Note 5. Acquisition

In July 2012, the Company signed the Original Purchase Agreement with UTC to acquire the Rocketdyne Business from UTC for $550.0 million. On June 10, 2013, the FTC announced that it closed its investigation into the Acquisition under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. On June 12, 2013, the Company entered into an Amended and Restated Purchase Agreement with UTC, which amended and restated the Original Purchase Agreement, as amended. On June 14, 2013, the Company completed the Acquisition of substantially all of the Rocketdyne Business pursuant to the Amended and Restated Purchase Agreement.

The aggregate consideration to UTC was $411.2 million, paid in cash, which represents the initial purchase price of $550.0 million reduced by $55.0 million relating to the pending future acquisition of UTC’s 50% ownership interest of RD Amross (a joint venture with NPO Energomash of Khimki, Russia which sells RD-180 engines to RD Amross), and the portion of the UTC business that markets and supports the sale of RD-180 engines. The purchase price was further adjusted for changes in advance payments on contracts, capital expenditures and other net assets, and is subject to further post-closing adjustments. The components of the estimated purchase price to UTC are as follows (in millions):


Purchase Price	$	495.0
Advance payments on contracts adjustment		(57.3	)
Capital expenditures adjustment		(29.8	)
Target net asset adjustment		3.3

Cash payment to UTC	$	411.2

The Company received a revised purchase price computation from UTC on September 12, 2013 and, per the terms and conditions of the Amended and Restated Purchase Agreement, the Company responded with its objections on December 9, 2013. The Company and UTC have been unable to resolve the disputed item; accordingly, the dispute will be resolved by a mutually selected national accounting firm. As of February 28, 2014, the disputed item is $5.4 million and the Company has not recorded any liability or adjusted the purchase price for this matter.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions):


Current assets	$	105.5
Property, plant and equipment, net		202.7
Other non-current assets		10.0

Total tangible assets acquired		318.2
Intangible assets acquired		128.3
Deferred income taxes		12.9

Total assets acquired		459.4
Liabilities assumed, current		(105.5	)
Liabilities assumed, non-current		(7.2	)

Total identifiable net assets acquired		346.7

Goodwill (Cash payment less total identifiable net assets acquired)	$	64.5

The preliminary purchase price allocation resulted in the recognition of $64.5 million in goodwill, all of which is deductible for tax purposes and included within the Company’s Aerospace and Defense segment. Goodwill recognized from the Acquisition primarily relates to the expected contributions of the Rocketdyne Business to the Company’s overall corporate strategy.

The Company has a $9.8 million and $18.6 million indemnification receivable from and payable to UTC, respectively, as of February 28, 2014. Pursuant to the terms of the Amended and Restated Purchase Agreement, the Company is indemnified for certain matters.

The unaudited pro forma information for the periods set forth below gives effect to the Acquisition as if it had occurred at the beginning of each respective fiscal year. These amounts have been calculated after applying our accounting policies and adjusting the results of the Rocketdyne Business to reflect depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied as at the beginning of each respective year, together with the tax effects, as applicable. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the Acquisition been consummated as of that time or that may result in the future. The pro forma information for the first quarter of fiscal 2013 is presented below (in millions, except per share amounts):


Net sales:
As reported	$	243.7
Pro forma	$	420.9
Net (loss) income:
As reported	($	14.0	)
Pro forma	$	12.1
Basic (loss) income per share
As reported	($	0.24	)
Pro forma	$	0.20
Diluted (loss) income per share
As reported	($	0.24	)
Pro forma	$	0.17