SELECTED FINANCIAL STATEMENT INFORMATION

Accounts Receivable



	As of October 31,
(in thousands)	2015			2014
Accounts receivable		$183,631			$151,812
Less: Allowance for doubtful accounts	(2,038		)	(2,143		)
Accounts receivable, net		$181,593			$149,669

Costs and Estimated Earnings on Uncompleted Percentage-of-Completion Contracts



	As of October 31,
(in thousands)	2015			2014
Costs incurred on uncompleted contracts		$22,645			$24,437
Estimated earnings	16,116			11,747
	38,761			36,184
Less: Billings to date	(36,442		)	(29,829		)
		$2,319			$6,355
Included in the accompanying Consolidated Balance Sheets under the following captions:
Accounts receivable, net (costs and estimated earnings in excess of billings)		$6,263			$8,161
Accrued expenses and other current liabilities (billings in excess of costs and estimated earnings)	(3,944		)	(1,806		)
		$2,319			$6,355

Changes in estimates pertaining to percentage-of-completion contracts did not have a material effect on net income from consolidated operations in fiscal 2015, 2014 or 2013.

Inventories



	As of October 31,
(in thousands)	2015			2014
Finished products		$119,262			$106,229
Work in process	32,201			30,056
Materials, parts, assemblies and supplies	89,739			79,163
Contracts in process	4,521			2,594
Less: Billings to date	(2,206		)	—
Inventories, net of valuation reserves		$243,517			$218,042

Contracts in process represents accumulated capitalized costs associated with fixed price contracts. Related progress billings and customer advances (“billings to date”) are classified as a reduction to contracts in process, if any, and any excess is included in accrued expenses and other liabilities.

Property, Plant and Equipment



	As of October 31,
(in thousands)	2015			2014
Land		$5,060			$4,501
Buildings and improvements	70,626			60,332
Machinery, equipment and tooling	152,022			139,963
Construction in progress	4,668			6,905
	232,376			211,701
Less: Accumulated depreciation and amortization	(126,706		)	(117,836		)
Property, plant and equipment, net		$105,670			$93,865

The amounts set forth above include tooling costs having a net book value of $6.5 million and $6.0 million as of October 31, 2015 and 2014, respectively. Amortization expense on capitalized tooling was $2.4 million, $2.4 million and $2.2 million in fiscal 2015, 2014 and 2013, respectively.

The amounts set forth above also include $3.7 million and $4.6 million of assets under capital leases as of October 31, 2015 and October 31, 2014, respectively. Accumulated depreciation associated with the assets under capital leases was $.7 million and $1.0 million as of October 31, 2015 and October 31, 2014, respectively. See Note 5, Long-Term Debt, for additional information pertaining to these capital lease obligations.

Depreciation and amortization expense, exclusive of tooling, on property, plant and equipment was $17.8 million, $17.1 million and $13.4 million in fiscal 2015, 2014 and 2013, respectively.

Accrued Expenses and Other Current Liabilities



	As of October 31,
(in thousands)	2015		2014
Accrued employee compensation and related payroll taxes		$53,238		$52,480
Deferred revenue	16,498		12,481
Accrued customer rebates and credits	8,072		10,924
Accrued additional purchase consideration	6,859		90
Other	15,488		16,603
Accrued expenses and other current liabilities		$100,155		$92,578

The total customer rebates and credits deducted within net sales in fiscal 2015, 2014 and 2013 was $4.7 million, $8.3 million and $8.3 million, respectively. The decrease in total customer rebates and credits deducted within net sales in fiscal 2015 and the amount of accrued customer rebates and credits principally reflects a reduction in the net sales volume of certain customers eligible for rebates as well as a reduction in the associated rebate percentages. The increase in deferred revenue principally reflects billings in excess of costs and earnings pertaining to certain of the Company's percentage-of-completion contracts. The increase in accrued additional purchase consideration principally reflects the estimated fair value of contingent consideration related to a fiscal 2015 acquisition expected to be paid in fiscal 2016. See Note 7, Fair Value Measurements, for additional information regarding the Company's contingent consideration obligations.

Other Long-Term Assets and Liabilities

The Company provides eligible employees, officers and directors of the Company the opportunity to voluntarily defer base salary, bonus payments, commissions, long-term incentive awards and directors fees, as applicable, on a pre-tax basis through the HEICO Corporation Leadership Compensation Plan (“LCP”), a nonqualified deferred compensation plan that conforms to Section 409A of the Internal Revenue Code. The Company matches 50% of the first 6% of base salary deferred by each participant. Director fees that would otherwise be payable in Company common stock may be deferred into the LCP, and, when distributable, are distributed in actual shares of Company common stock. The LCP does not provide for diversification of a director’s assets allocated to Company common stock. The deferred compensation obligation associated with Company common stock is recorded as a component of shareholders’ equity at cost and subsequent changes in fair value are not reflected in operations or shareholders’ equity of the Company. Further, while the Company has no obligation to do so, the LCP also provides the Company the opportunity to make discretionary contributions. The Company’s matching contributions and any discretionary contributions are subject to vesting and forfeiture provisions set forth in the LCP. Company contributions to the LCP charged to income in fiscal 2015, 2014 and 2013 totaled $5.7 million, $5.3 million and $4.3 million, respectively. The aggregate liabilities of the LCP were $76.2 million and $65.0 million as of October 31, 2015 and 2014, respectively, and are classified within other long-term liabilities in the Company’s Consolidated Balance Sheets. The assets of the LCP, totaling $77.1 million and $65.9 million as of October 31, 2015 and 2014, respectively, are classified within other assets and principally represent cash surrender values of life insurance policies that are held within an irrevocable trust that may be used to satisfy the obligations under the LCP.

Other long-term liabilities also includes deferred compensation of $4.5 million and $5.5 million as of October 31, 2015 and 2014, respectively, principally related to elective deferrals of salary and bonuses under a Company sponsored non-qualified deferred compensation plan formerly available to selected employees. The Company makes no contributions to this plan. The assets of this plan, which equaled the deferred compensation liability as of October 31, 2015 and 2014, respectively, are held within an irrevocable trust and classified within other assets in the Company’s Consolidated Balance Sheets. Additional information regarding the assets of this deferred compensation plan and the LCP may be found in Note 7, Fair Value Measurements.

Research and Development Expenses

The amount of new product research and development ("R&D") expenses included in cost of sales is as follows (in thousands):



	Year ended October 31,
	2015		2014		2013
R&D expenses		$38,747		$37,377		$32,897

Accumulated Other Comprehensive Income (Loss)

Changes in the components of accumulated other comprehensive income (loss) during fiscal 2015 and 2014 are as follows (in thousands):



	Foreign Currency Translation			Pension Benefit Obligation			Accumulated Other Comprehensive Income (Loss)
Balances as of October 31, 2013		($466	)		$610			$144
Unrealized loss	(7,882		)	(551		)	(8,433		)
Balances as of October 31, 2014	(8,348		)	59			(8,289		)
Unrealized loss	(16,020		)	(771		)	(16,791		)
Balances as of October 31, 2015		($24,368	)		($712	)		($25,080	)