þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

As of ~~September~~June 2, ~~2014, 31,939,799~~2015, 30,809,348 shares of the issuer’s common stock were outstanding.

					May 1,		October 31,
	August 1,		October 25,		2015		2014
	2014		2013		(Unaudited)
ASSETS	(Unaudited)

Current Assets
Cash and cash equivalents	$	210,456	$	179,178	$	172,645	$	238,144
Cash in escrow		-		4,018
Accounts receivable, net of allowances of $9,946 and $9,215		361,827		383,666
Accounts receivable, net of allowances of $9,808 and $10,023						384,662		379,889
Inventories
Raw materials and purchased parts		181,885		165,231		179,908		165,839
Work in progress		206,935		182,882		196,920		178,354
Finished goods		104,992		99,550		102,760		89,402
		493,812		447,663		479,588		433,595

Income tax refundable		7,681		6,526		9,394		5,266
Deferred income tax benefits		50,716		47,277		52,524		48,679
Prepaid expenses		24,816		18,183		23,892		20,336
Other current assets		4,286		5,204		3,600		2,149
Current assets of businesses held for sale						40,399		41,446
Total Current Assets		1,153,594		1,091,715		1,166,704		1,169,504

Property, Plant and Equipment		790,516		767,861		716,721		721,460
Accumulated depreciation		427,311		396,664		410,123		402,118
		363,205		371,197		306,598		319,342

Other Non-Current Assets
Goodwill		1,132,987		1,128,977		1,074,437		1,071,786
Intangibles, net		560,893		580,949		475,931		471,377
Debt issuance costs, net of accumulated amortization of $5,400 and $4,359		4,637		6,211
Debt issuance costs, net of accumulated amortization of $2,336 and $5,743						11,162		4,295
Deferred income tax benefits		68,416		71,840		62,759		71,307
Other assets		24,726		11,223		21,825		14,179
Non-current assets of businesses held for sale						56,952		71,677
	$	3,308,458	$	3,262,112	$	3,176,368	$	3,193,467

							May 1,			October 31,
	August 1,			October 25,			2015			2014
	2014			2013			(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY	(Unaudited)

Current Liabilities
Accounts payable	$	123,376		$	123,597		$	123,448		$	115,284
Accrued liabilities		238,968			253,561			264,493			262,536
Current maturities of long-term debt		12,822			21,279			1,002			12,774
Deferred income tax liabilities		3,205			2,307			2,851			1,773
Federal and foreign income taxes		2,309			7,348			1,617			1,571
Current liabilities of businesses held for sale								14,181			14,191
Total Current Liabilities		380,680			408,092			407,592			408,129

Long-Term Liabilities
Credit facilities		115,000			130,000			120,000			100,000
Long-term debt, net of current maturities		513,119			537,859			722,954			509,720
Deferred income tax liabilities		178,796			193,119			137,983			149,165
Pension and post-retirement obligations		62,759			68,102			57,968			62,693
Other liabilities		47,313			40,188			29,958			46,884
Non-current liabilities of businesses held for sale								19,427			18,876

Shareholders' Equity
Common stock, par value $.20 per share, authorized 60,000,000 shares, issued and outstanding 31,996,510 and 31,441,949 shares		6,399			6,288
Common stock, par value $.20 per share, authorized 60,000,000 shares, issued 32,302,123 and 32,123,717 shares								6,460			6,425
Additional paid-in capital		648,974			604,511			672,319			655,723
Treasury stock at cost, repurchased 45,979 and 0 shares		(5,176	)		-
Treasury stock at cost, repurchased 1,431,664 and 269,228 shares								(157,604	)		(30,262	)
Retained earnings		1,390,980			1,285,090			1,415,637			1,387,508
Accumulated other comprehensive loss		(42,012	)		(22,284	)		(266,348	)		(131,577	)
Total Esterline shareholders' equity		1,999,165			1,873,605			1,670,464			1,887,817
Noncontrolling interests		11,626			11,147			10,022			10,183
Total Shareholders' Equity		2,010,791			1,884,752			1,680,486			1,898,000
	$	3,308,458		$	3,262,112		$	3,176,368		$	3,193,467

For the Three and ~~Nine~~Six Month Periods Ended ~~August~~May 1, ~~2014~~2015 and ~~July 26, 2013~~May 2, 2014

		Three Months Ended						Nine Months Ended							Three Months Ended						Six Months Ended
		August 1,			July 26,			August 1,			July 26,				May 1,			May 2,			May 1,			May 2,
		2014			2013			2014			2013				2015			2014			2015			2014

Net Sales		$	531,124		$	478,068		$	1,565,678		$	1,435,592			$	500,080		$	510,861		$	946,424		$	996,801
Cost of Sales			348,651			299,166			1,027,565			914,969				336,429			331,636			637,423			646,841
			182,473			178,902			538,113			520,623				163,651			179,225			309,001			349,960
Expenses
Selling, general & administrative			95,293			101,822			289,969			298,711				100,742			92,035			194,398			181,167
Research, development and engineering			25,134			24,103			78,441			72,837				27,000			25,536			49,455			51,182
Restructuring charges			3,405			-			10,279			-				922			2,078			3,972			6,874
Goodwill impairment			-			3,454			-			3,454
Other (income) expense																-			-			(12,744	)		-
Total Expenses			123,832			129,379			378,689			375,002				128,664			119,649			235,081			239,223

Operating Earnings from Continuing Operations			58,641			49,523			159,424			145,621				34,987			59,576			73,920			110,737
Interest Income			(146	)		(132	)		(403	)		(381	)			(124	)		(136	)		(303	)		(255	)
Interest Expense			7,870			9,050			24,939			30,976				8,564			8,434			14,405			17,059
Loss on Extinguishment of Debt			533			-			533			946				329			-			329			-

Earnings from Continuing Operations Before Income Taxes			50,384			40,605			134,355			114,080				26,218			51,278			59,489			93,933
Income Tax Expense			11,430			1,151			27,693			13,027				4,542			10,386			12,692			19,012
Earnings from Continuing Operations Including Noncontrolling Interests			38,954			39,454			106,662			101,053				21,676			40,892			46,797			74,921

Earnings Attributable to Noncontrolling Interests			(46	)		(241	)		(429	)		(1,207	)			(44	)		(297	)		(107	)		(383	)
Earnings from Continuing Operations Attributable to Esterline, Net of Tax			38,908			39,213			106,233			99,846				21,632			40,595			46,690			74,538

Loss from Discontinued Operations Attributable to Esterline, Net of Tax			-			(975	)		(343	)		(975	)			(1,822	)		(3,691	)		(18,561	)		(7,556	)

Net Earnings Attributable to Esterline		$	38,908		$	38,238		$	105,890		$	98,871			$	19,810		$	36,904		$	28,129		$	66,982

Earnings (Loss) Per Share Attributable to Esterline - Basic:	Earnings (Loss) Per Share Attributable to Esterline - Basic:													Earnings (Loss) Per Share Attributable to Esterline - Basic:
Continuing operations		$	1.22		$	1.25		$	3.34		$	3.21			$	0.70		$	1.28		$	1.49		$	2.35
Discontinued operations			-			(0.03	)		(0.01	)		(0.03	)			(0.06	)		(0.12	)		(0.59	)		(0.24	)
Earnings (Loss) Per Share Attributable to Esterline - Basic		$	1.22		$	1.22		$	3.33		$	3.18			$	0.64		$	1.16		$	0.90		$	2.11

Earnings (Loss) Per Share Attributable to Esterline - Diluted:	Earnings (Loss) Per Share Attributable to Esterline - Diluted:													Earnings (Loss) Per Share Attributable to Esterline - Diluted:
Continuing operations		$	1.19		$	1.23		$	3.28		$	3.15			$	0.69		$	1.25		$	1.46		$	2.30
Discontinued operations			-			(0.03	)		(0.01	)		(0.03	)			(0.06	)		(0.11	)		(0.58	)		(0.23	)
Earnings (Loss) Per Share Attributable to Esterline - Diluted		$	1.19		$	1.20		$	3.27		$	3.12			$	0.63		$	1.14		$	0.88		$	2.07

Comprehensive Income (Loss)		$	16,479		$	45,201		$	86,162		$	83,459			$	33,544		$	80,121		$	(106,642	)	$	69,683

For the ~~Nine~~Six Month Periods Ended ~~August~~May 1, ~~2014~~2015 and ~~July 26, 2013~~May 2, 2014

	Nine Months Ended						May 1,			May 2,
	August 1,			July 26,			2015			2014
	2014			2013
Cash Flows Provided (Used) by Operating Activities
Net earnings including noncontrolling interests	$	106,319		$	100,078		$	28,236		$	67,365
Adjustments to reconcile net earnings including noncontrolling interests to net cash provided (used) by operating activities:
Depreciation and amortization		87,443			87,941			49,853			59,282
Deferred income taxes		(13,104	)		(12,238	)		(7,472	)		(8,410	)
Share-based compensation		9,833			7,667			5,552			6,648
Gain on sale of capital assets		-			(915	)
Goodwill impairment		-			3,454
Gain on release of non-income tax liability								(15,656	)		-
Loss on assets held for sale								15,846			-
Working capital changes, net of effect of acquisitions:
Accounts receivable		23,480			51,063			12,183			33,331
Inventories		(42,411	)		(32,774	)		(24,280	)		(33,485	)
Prepaid expenses		(6,202	)		(135	)		(5,208	)		(8,072	)
Other current assets		(99	)		(836	)		(327	)		(276	)
Accounts payable		(4,508	)		5,424			(2,920	)		(10,650	)
Accrued liabilities		(16,458	)		4,277			(10,440	)		(13,224	)
Federal and foreign income taxes		(7,983	)		(5,321	)		56			(3,754	)
Other liabilities		(1,440	)		(10,394	)		2,297			(1,587	)
Other, net		(155	)		(1,012	)		7,958			(2,716	)
		134,715			196,279			55,678			84,452

Cash Flows Provided (Used) by Investing Activities
Purchase of capital assets		(35,009	)		(37,765	)		(23,435	)		(21,297	)
Proceeds from sale of capital assets		-			915
Acquisition of business, net of cash acquired		(44,745	)		(40,689	)		(171,070	)		(44,043	)
								(194,505	)		(65,340	)
		(79,754	)		(77,539	)
Cash Flows Provided (Used) by Financing Activities
Proceeds provided by stock issuance under employee stock plans		23,173			20,450			9,335			22,957
Excess tax benefits from stock option exercises		6,392			2,237			1,744			5,297
Share repurchases		(5,176	)		-
Shares repurchased								(127,342	)		-
Repayment of long-term credit facilities		(40,000	)		(70,000	)		(190,000	)		(25,000	)
Repayment of long-term debt		(34,076	)		(209,541	)		(167,478	)		(19,302	)
Proceeds from issuance of long-term credit facilities		25,000			175,000			210,000			25,000
Proceeds from issuance of long-term debt								356,532			-
Proceeds from government assistance		3,362			5,114			3,142			-
Dividends paid to noncontrolling interests		(780	)		(1,044	)		-			(780	)
Debt and other issuance costs		-			(453	)		(7,890	)		-
		(22,105	)		(78,237	)		88,043			8,172

Effect of Foreign Exchange Rates on Cash and Cash Equivalents		(1,578	)		(1,930	)		(14,715	)		981
Net Increase (Decrease) in Cash and Cash Equivalents		31,278			38,573			(65,499	)		28,265

Cash and Cash Equivalents - Beginning of Period		179,178			160,675
Cash and Cash Equivalents - Beginning of Year								238,144			179,178
Cash and Cash Equivalents - End of Period	$	210,456		$	199,248		$	172,645		$	207,443

Supplemental Cash Flow Information:
Cash paid for interest	$	26,066		$	25,873		$	13,795		$	14,688
Cash paid for taxes		49,036			30,608			14,472			29,724

For the Three and ~~Nine~~Six Month Periods Ended ~~August~~May 1, ~~2014~~2015 and ~~July 26, 2013~~May 2, 2014

The consolidated balance sheet as of ~~August~~May 1, ~~2014,~~2015, the consolidated statement of operations and comprehensive income (loss) for the three and ~~nine~~six month periods ended ~~August~~May 1, ~~2014,~~2015, and ~~July 26, 2013,~~May 2, 2014, and the consolidated statement of cash flows for the ~~nine~~six month periods ended ~~August~~May 1, ~~2014,~~2015, and ~~July 26, 2013,~~May 2, 2014, are unaudited but, in the opinion of management, all of the necessary adjustments, consisting of normal recurring accruals, have been made to present fairly the financial statements referred to above in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the above statements do not include all of the footnotes required for complete financial statements. The results of operations and cash flows for the interim periods presented are not necessarily indicative of results that can be expected for the full year.

The notes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended October ~~25, 2013,~~31, 2014, provide a summary of significant accounting policies and additional financial information that should be read in conjunction with this Form 10-Q.

The timing of the Company’s revenues is impacted by the purchasing patterns of customers and, as a result, revenues are not generated evenly throughout the year. Moreover, the Company’s first fiscal quarter, November through January, includes significant holiday periods in both Europe and North America. The first ~~nine~~six months of fiscal 2015 was 26 weeks, while the first six months of fiscal 2014 ~~contained 40 weeks, while the first nine months of fiscal 2013 contained 39~~was 27 weeks.

On June 5, 2014, the Company’s board of directors authorized a change in the Company’s fiscal year end to the last Friday of September from the last Friday in October, effective for fiscal year 2016. The Company plans to report its financial results for the 11-month transition period of November 1, 2014, through October 2, 2015, on an Annual Report on Form 10-K and to thereafter file its annual report for each ~~twelve-month~~12-month period ending the last Friday of September of each year, beginning with the ~~twelve-month~~12-month period ending September 30, 2016. ~~The Company’s fiscal year 2014 remains unchanged and will end on October 31, 2014.~~

In April 2014, the Financial Accounting Standards Board (FASB) issued guidance that modifies the criteria used to qualify divestitures for classification as discontinued operations and expands disclosure related to disposals of significant components. The amendment will become effective for the Company in fiscal 2016, with early adoption permitted; however, the Company does not expect to early adopt the amended guidance. The amended guidance is expected to decrease the likelihood that future disposals will qualify for discontinued operations treatment, meaning that the results of operation of some future disposals may be reported as continuing operations.

In May 2014, the Financial Accounting Standards Board (FASB) amended requirements for an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The updated standard becomes effective for the Company in the first fiscal quarter of 2018. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on consolidated financial statements and related disclosures.

In April 2015, the Financial Accounting Standards Board (FASB) amended requirements related to the presentation of debt issuance cost. The updated standard requires debt issuance costs related to recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. The recognition and measurement of debt issuance costs are not affected by this amendment. The updated standard is effective for the Company in the first fiscal quarter of 2016. The Company does not expect that the standard will have a material impact on its consolidated financial statements and related disclosures.

Basic earnings per share is computed on the basis of the weighted average number of shares outstanding during the year. Diluted earnings per share includes the dilutive effect of stock options and restricted stock units. Common shares issuable from stock options excluded from the calculation of diluted earnings per share because they were anti-dilutive were ~~170,300~~243,450 and ~~219,800~~177,100 in the ~~third~~second fiscal quarter of ~~2014~~2015 and ~~2013,~~2014, respectively. Shares used for calculating earnings per share are disclosed in the following table.

(In thousands)	Three Months Ended				Nine Months Ended
In Thousands									Three Months Ended				Six Months Ended
									May 1,		May 2,		May 1,		May 2,
	August 1,		July 26,		August 1,		July 26,		2015		2014		2015		2014
	2014		2013		2014		2013
Shares used for basic earnings per share		31,995		31,297		31,818		31,100		31,005		31,867		31,306		31,733
Shares used for diluted earnings per share		32,591		31,870		32,427		31,663		31,525		32,475		31,839		32,348

The authorized capital stock of the Company consists of 25,000 shares of preferred stock ($100 par value), 475,000 shares of serial preferred stock ($1.00 par value), each issuable in series, and 60,000,000 shares of common stock ($.20 par value). As of May 1, 2015, and October 31, 2014, there were no shares of preferred stock or serial preferred stock outstanding.

On June 19, 2014, the Company’s board of directors approved a $200 million share repurchase program. In March 2015, the Company’s board of directors approved an additional $200 million for the share repurchase program. Under the program, the Company is authorized to repurchase up to ~~$200~~$400 million of outstanding shares of common stock from time to time, depending on market conditions, share price and other factors. Repurchases may be made in the open market or through private transactions, in accordance with SEC requirements. The Company may enter into a Rule 10(b)5-1 plan designed to facilitate the repurchase of all or a portion of the repurchase amount. The program does not require the Company to acquire a specific number of shares. Common stock repurchased can be reissued, and accordingly, the Company accounts for repurchased stock under the cost method of accounting.

During the ~~three~~six months ended ~~August~~May 1, ~~2014,~~2015, the Company repurchased ~~45,979~~1,162,436 shares under this program at an average price paid per share of ~~$112.57,~~$109.55, for an aggregate purchase price of ~~$5.2~~$127.3 million.

The Company’s pension plans principally include a U.S. pension plan maintained by Esterline and a non-U.S. plan maintained by CMC Electronics, Inc. (CMC). The Company also sponsors a number of other non-U.S. defined benefit pension plans, primarily in France and Germany. In fiscal 2014, the Company offered vested terminated participants of its U.S. pension plan a one-time opportunity to elect a lump-sum payment from the plan in lieu of a lifetime annuity. In the first fiscal quarter of 2015, the Company made a $16.6 million lump-sum payment to vested terminated pension plan participants from the plan, which resulted in an actuarial estimated settlement charge of $3.0 million. The charge was recorded in selling, general and administrative expenses. Components of periodic pension cost consisted of the following:

The Company’s principal post-retirement plans include non-U.S. plans, which are non-contributory healthcare and life insurance plans. The components of expense of these other retirement benefits consisted of the following:

The Company amortizes prior service cost and actuarial gains and losses from accumulated other comprehensive income to expense over the remaining service period.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy has been established that prioritizes the inputs to valuation

techniques used to measure fair value. An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy of fair value measurements is described below:

Level 1 – Valuations are based on quoted prices that the Company has the ability to obtain in actively traded markets for identical assets and liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market or exchange traded market, a valuation of these instruments does not require a significant degree of judgment.

Level 2 – Valuations are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 – Valuations are based on model-based techniques for which some or all of the assumptions are obtained from indirect market information that is significant to the overall fair value measurement and which require a significant degree of management judgment.

The following table sets forth the Company’s financial assets and liabilities that were measured at fair value on a recurring basis by level within the fair value hierarchy at ~~August~~May 1, ~~2014,~~2015, and October ~~25, 2013.~~31, 2014.

(In thousands)	Level 2
In Thousands					Level 2
	August 1,		October 25,		May 1,		October 31,
	2014		2013		2015		2014
Assets:
Derivative contracts designated as hedging instruments	$	1,381	$	2,270	$	1,912	$	24
Derivative contracts not designated as hedging instruments		2,763		3,670		1,006		1,081
Embedded derivatives		1,222		706		3,647		2,351

Liabilities:
Derivative contracts designated as hedging instruments	$	8,129	$	4,541	$	22,079	$	14,592
Derivative contracts not designated as hedging instruments		941		122		4,333		4,188
Embedded derivatives		518		344		1,128		15

(In thousands)	Level 3
In Thousands					Level 3
	August 1,		October 25,		May 1,		October 31,
	2014		2013		2015		2014
Liabilities:
Contingent purchase obligation	$	5,000	$	4,000	$	5,000	$	5,000

The Company’s embedded derivatives are the result of entering into sales or purchase contracts that are denominated in a currency other than the Company’s functional currency or the supplier’s or customer’s functional currency. The fair value is determined by calculating the difference between quoted exchange rates at the time the contract was entered into and the period-end exchange rate. These contracts are categorized as Level 2 in the fair value hierarchy.

~~The~~From time to time, the Company’s derivative contracts consist of foreign currency exchange contracts and interest rate swap agreements. These derivative contracts are over the counter, and their fair value is determined using modeling techniques that include market inputs such as interest rates, yield curves, and currency exchange rates. These contracts are categorized as Level 2 in the fair value hierarchy.

The Company’s contingent purchase obligations consist of additional contingent consideration in connection with the acquisition of Sunbank Family of Companies, LLC (Sunbank) of $5.0 million as of ~~August~~May 1, ~~2014.~~2015. The contingent considerations will be payable to the sellers if certain performance objectives are met following the acquisition in accordance with the terms of the purchase agreement. The values recorded on the balance sheet were derived from the estimated probability that the performance objectives will be met. The contingent purchase obligation is categorized as Level 3 in the fair value hierarchy. ~~The Company paid $4.0 million of contingent consideration in the second fiscal quarter of 2014 for satisfaction of its obligation related to Eclipse Electronic Systems, Inc. (Eclipse).~~

The Company uses derivative financial instruments in the form of foreign currency forward exchange contracts and interest rate swap contracts for the purpose of minimizing exposure to changes in foreign currency exchange rates on business transactions and interest rates, respectively. The Company’s policy is to execute such instruments with banks the Company believes to be creditworthy and not to enter into derivative financial instruments for speculative purposes. These derivative financial instruments do not subject the Company to undue risk, as gains and losses on these instruments generally offset gains and losses on the underlying assets, liabilities, or anticipated transactions that are being hedged.

All derivative financial instruments are recorded at fair value in the Consolidated Balance Sheet. For a derivative that has not been designated as an accounting hedge, the change in the fair value is recognized immediately through earnings. For a derivative that has been designated as an accounting hedge of an existing asset or liability (a fair value hedge), the change in the fair value of both the derivative and underlying asset or liability is recognized immediately through earnings. For a derivative designated as an accounting hedge of an anticipated transaction (a cash flow hedge), the change in the fair value is recorded on the Consolidated Balance Sheet in Accumulated Other Comprehensive Income (AOCI) to the extent the derivative is effective in mitigating the exposure related to the anticipated transaction. The change in the fair value related to the ineffective portion of the hedge, if any, is immediately recognized in earnings. The amount recorded within AOCI is reclassified into earnings in the same period during which the underlying hedged transaction affects earnings.

The fair ~~values~~value of derivative instruments are presented on a gross basis, as the Company does not have any derivative contracts which are subject to master netting arrangements. At ~~August~~May 1, 2015, and October 31, 2014, the Company did not have any hedges with credit-risk-related contingent features or that required the posting of collateral. The cash flows from derivative contracts are recorded in operating activities in the Consolidated Statement of Cash Flows.

The Company transacts business in various foreign currencies, which subjects the Company’s cash flows and earnings to exposure related to changes in foreign currency exchange rates. These exposures arise primarily from purchases or sales of products and services from third parties. Foreign currency forward exchange contracts provide for the purchase or sale of foreign currencies at specified future dates at specified exchange rates, and are used to offset changes in the fair value of certain assets or liabilities or forecasted cash flows resulting from transactions denominated in foreign currencies. At ~~August~~May 1, ~~2014,~~2015, and October ~~25, 2013,~~31, 2014, the Company had outstanding foreign currency forward exchange contracts principally to sell U.S. dollars with notional amounts of ~~$375.7~~$374.2 million and ~~$369.0~~$396.2 million, respectively. These notional values consist primarily of contracts for the European euro, British pound sterling and Canadian dollar, and are stated in U.S. dollar equivalents at spot exchange rates at the respective dates.

The Company manages its exposure to interest rate risk by maintaining an appropriate mix of fixed and variable rate debt, which over time should moderate the costs of debt financing. When considered necessary, the Company may use financial instruments in the form of interest rate swaps to help meet this objective. In fiscal 2010, the Company entered into interest rate swap agreements for $175.0 million on the 2017 Notes. The swap agreements exchanged the fixed interest rate on the 2017 Notes of 6.625% for a variable interest rate. In the second fiscal quarter of 2013, the swap agreements were terminated and the Company redeemed the 2017 Notes with the proceeds from the $175.0 million U.S. Term Loan. The Company recorded a gain on the swap termination of $2.9 million in the second fiscal quarter of 2013.

In April 2015, the Company issued €330.0 million in 3.625% Senior Notes due April 2023 (2023 Notes) and requiring semi-annual interest payment in April and October each year until maturity. The Company designated the 2023 Notes a hedge of the investment of certain foreign business units. The foreign currency gain or loss that is effective as a hedge is reported as a component of other comprehensive income (loss) in shareholders’ equity. To the extent that this hedge is ineffective, the foreign currency gain or loss is recorded in earnings. There was no ineffectiveness since inception of the hedge. The Company also designated the accrued interest on the 2023 Notes as a net investment hedge.

In July 2011, the Company entered into a Euro Term Loan for €125.0 million under the secured credit facility. The Company designated the Euro Term Loan a hedge of the investment in a certain French business unit. The foreign currency gain or loss that is effective as a hedge is reported as a component of other comprehensive income (loss) in shareholders’ equity. To the extent that this hedge is ineffective, the foreign currency gain or loss is recorded in earnings. There was no ineffectiveness since inception of the hedge. On June 30, 2014, the Company paid off the remaining balance of the Euro Term Loan. As a result, the Company recorded a net loss of $0.5 million on extinguishment of debt.

Fair ~~values~~value of derivative instruments in the Consolidated Balance Sheet at ~~August~~May 1, ~~2014,~~2015, and October ~~25, 2013,~~31, 2014, consisted of:

(In thousands)		Fair Value
In Thousands							Fair Value
		August 1,		October 25,			May 1,		October 31,
	Classification	2014		2013		Classification	2015		2014
Foreign Currency Forward Exchange Contracts:
	Other current assets	$	2,969	$	4,547	Other current assets	$	2,267	$	1,052
	Other assets		1,175		1,393	Other assets		651		53
	Accrued liabilities		7,612		3,002	Accrued liabilities		20,983		15,490
	Other liabilities		1,458		1,661	Other liabilities		5,429		3,290

Embedded Derivative Instruments:
	Other current assets	$	141	$	59	Other current assets	$	541	$	296
	Other assets		1,081		647	Other assets		3,106		2,055
	Accrued liabilities		312		344	Accrued liabilities		105		15
	Other liabilities		206		-	Other liabilities		1,023		-

The effect of derivative instruments on the Consolidated Statement of Operations and Comprehensive Income (Loss) for the three and ~~nine~~six month periods ended ~~August~~May 1, ~~2014,~~2015, and ~~July 26, 2013,~~May 2, 2014, consisted of:

We recognized the following gains (losses) on contracts designated as fair value hedges:

We recognized the following gains (losses) on contracts designated as cash flow hedges:

(In thousands)	Three Months Ended						Nine Months Ended
In Thousands													Three Months Ended						Six Months Ended
Gain (Loss)	August 1,			July 26,			August 1,			July 26,			May 1,			May 2,			May 1,			May 2,
													2015			2014			2015			2014
	2014			2013			2014			2013
Foreign currency forward exchange contracts:
Recognized in AOCI (effective portion)	$	1,873		$	(544	)	$	(858	)	$	(1,975	)	$	24,588		$	9,034		$	7,780		$	(2,735	)
Reclassified from AOCI into sales		(893	)		(551	)		(3,638	)		(1,187	)		(8,627	)		(2,242	)		(13,408	)		(2,741	)

We recognized the following gains (losses) on contracts designated as net investment hedges:

(In thousands)	Three Months Ended					Nine Months Ended
In Thousands											Three Months Ended						Six Months Ended
Gain (Loss)	August 1,		July 26,			August 1,		July 26,			May 1,			May 2,			May 1,			May 2,
	2014		2013			2014		2013			2015			2014			2015			2014
Euro term loan:

Euro Term Loan:
Recognized in AOCI	$	162	$	(886	)	$	134	$	(1,310	)	$	-		$	(556	)	$	-		$	(28	)

2023 Notes:
Recognized in AOCI											$	(13,035	)	$	-		$	(13,035	)	$	-

During the first ~~nine~~six months of fiscal ~~2014~~2015 and ~~2013,~~2014, the Company recorded ~~losses~~a loss of ~~$0.8~~$1.8 million and ~~$1.5~~a gain of $0.8 million, respectively, on foreign currency forward exchange contracts that have not been designated as an accounting ~~hedge.~~hedges. These foreign currency exchange ~~losses~~gains (losses) are included in selling, general and administrative expense.

There was no significant impact to the Company’s earnings related to the ineffective portion of any hedging instruments during the first ~~nine~~six months of fiscal ~~2014~~2015 and ~~2013.~~2014. In addition, there was no significant impact to the Company’s earnings when a hedged firm commitment no longer qualified as a fair value hedge or when a hedged forecasted transaction no longer qualified as a cash flow hedge during the first ~~nine~~six months of fiscal ~~2014~~2015 and ~~2013.~~2014.

Amounts included in AOCI are reclassified into earnings when the hedged transaction settles. The Company expects to reclassify approximately ~~$5.7~~$15.9 million of net loss into earnings over the next 12 months. The $15.9 million loss will reduce the Company’s U.S.-dollar-denominated sales covered by qualified forward contracts to the forward rate when the Company entered into the forward contracts. The maximum duration of the Company’s foreign currency cash flow hedge contracts at ~~August~~May 1, ~~2014,~~2015, is 24 months.

The income tax ~~rates were 20.6% and 11.4% for~~rate was 17.3% in the ~~first nine months~~second fiscal quarter of ~~fiscal 2014 and 2013, respectively.~~2015 compared with 20.3% in the prior-year period. In the ~~first nine months~~second fiscal quarter of 2015 we recognized $0.3 million of discrete tax expense principally related to reconciling the prior year’s income tax return to the income tax provision. In the second fiscal quarter of 2014, ~~the Company~~we recognized ~~approximately $1.4~~$0.6 million of discrete tax benefits principally related to the following items. The first item was approximately $0.9 million of tax benefits due to the release of reserves due to the expiration of applicable statutes of limitations. The second item was a $0.5 million reduction of net deferred income tax liabilities as a result of the enactment of tax laws reducing the U.K. statutory income tax rate. The income tax rate differed from the statutory rate in the second fiscal quarter of 2015 and 2014, as both years benefited from various tax credits and certain foreign interest expense deductions.

The income tax rates were 21.3% and 20.2% for the first six months of fiscal 2015 and 2014, respectively. In the first ~~nine~~six months of fiscal ~~2013,~~2015, the Company recognized ~~$12.4~~$0.8 million of discrete tax ~~benefits~~expense principally related to the following items. The first item was approximately $2.3 million of discrete tax expense principally related to reconciling the prior year’s income tax return to the income tax provision. The second item was approximately $1.5 million of tax benefits due to the retroactive extension of the U.S. federal research and experimentation credits. In the first six months of fiscal 2014, the Company recognized approximately $1.1 million of discrete tax benefits principally related to the following items. The ~~second~~first item was approximately ~~$2.3~~$0.6 million of tax benefits ~~related to the settlement of U.S. and foreign tax examinations. The third item was a $4.3 million tax benefit related~~due to the release of ~~tax~~ reserves due to the expiration of ~~applicable statutes~~a statute of limitations. The ~~fourth~~second item was a ~~$3.8~~$0.5 million reduction of net deferred income tax liabilities as a result of the enactment of tax laws reducing the U.K. statutory income tax rate. The income tax rate differed from the statutory rate in the first ~~nine~~six months of fiscal ~~2014~~2015 and ~~2013,~~2014, as both years benefited from various tax credits and certain foreign interest expense deductions.

It is reasonably possible that within the next twelve months approximately ~~$1.6~~$2.5 million of tax benefits that are currently unrecognized could be recognized as a result of settlement of examinations and/or the expiration of applicable statutes of limitations.

In March 2011, the Company entered into a secured credit facility for $460 million made available through a group of banks. The credit facility is secured by substantially all of the Company’s assets and interest is based on standard inter-bank offering rates. ~~The~~On April 9, 2015, the Company amended the secured credit facility ~~expires July 20, 2016.~~to extend the expiration to April 9, 2020, increase the revolving credit facility to $500 million, and provide for a delayed-draw term loan facility of $250 million. Borrowing under the delayed-draw term loan facility, if utilized, may be used only for working capital and repayment or refinancing of our existing indebtedness and to pay the fees and expenses in connection therewith. The ~~spread~~interest rate on the credit facility ranges from LIBOR plus ~~1.5%~~1.25% to LIBOR plus ~~2.25%~~2.00% depending on the leverage ratios at the time the funds are drawn. At ~~August~~May 1, ~~2014,~~2015, the Company had ~~$115.0~~$120.0 million outstanding under the secured credit facility at an interest rate of LIBOR plus 1.50%, which was ~~1.66%~~1.68% at ~~August~~May 1, ~~2014.~~

In July 2011, the Company amended the secured credit facility to provide for a €125.0 million term loan (Euro Term Loan). On June 30, 2014, the Company redeemed the €125.0 million Euro Term Loan. In connection with the redemption, the Company wrote off $0.5 million in unamortized debt issuance costs as a loss on extinguishment of debt in the third fiscal quarter of 2014.2015.

In April 2013, the Company amended the secured credit facility to provide for a $175.0 million term loan (U.S. Term Loan). The interest rate on the U.S. Term Loan ranges from LIBOR plus 1.5% to LIBOR plus 2.25% depending on the leverage ratios at the time the funds are drawn. ~~At August 1, 2014,~~On April 8, 2015, the Company ~~had $164.1~~paid off the $175 million ~~outstanding under the~~ U.S. Term Loan at an interest rate of LIBOR plus 1.50%, which was 1.66% at August 1, 2014. The loan amortizes at 1.25% of the original principal balance quarterly through March 31, 2016, with the remaining balance due in July 20, 2016.

In June 2014, the Company amended the secured credit facility to increase the U.K. borrower sublimit and to permit additional borrowers under the revolving credit facility in order to give the Company greater flexibility on foreign borrowing.

~~In April 2013, the Company redeemed the $175.0 million 6.625% Senior Notes due March 1, 2017 (2017 Notes).~~Loan. In connection with the redemption, the Company wrote off ~~$1.3~~$0.3 million in unamortized debt issuance costs as a charge against interest expense. In addition, the Company incurred a $3.9 million redemption premium and received proceeds of $2.9 million from the termination of its $175.0 million interest rate swap agreements. As a result, the redemption of the 2017 Notes resulted in a net loss ~~of $0.9 million~~ on extinguishment of debt in the second fiscal quarter of ~~2013.~~2015.

In August 2010, the Company issued $250.0 million in 7% Senior Notes due August 1, 2020 (2020 Notes), and requiring semi-annual interest payments in March and September of each year until maturity. The net proceeds from the sale of the notes, after deducting $4.4 million of debt issuance cost, were $245.6 million. The 2020 Notes are general unsecured senior obligations of the Company. The 2020 Notes are guaranteed, jointly and severally on a senior basis, by all the existing and future domestic subsidiaries of the Company unless designated as an “unrestricted subsidiary,” and those foreign subsidiaries that executed related subsidiary guarantees under the indenture covering the 2020 Notes. The 2020 Notes are subject to redemption at the option of the Company at any time prior to August 1, 2015, at a price equal to 100% of the principal amount, plus any accrued interest to the date of redemption and a make-whole provision. The 2020 Notes are also subject to redemption at the option of the Company, in whole or in part, on or after August 1, 2015, at redemption prices starting at 103.500% of the principal amount plus accrued interest during the period beginning August 1, 2015, and declining annually to 100% of principal and accrued interest on or after August 1, 2018.

In April 2015, the Company issued €330.0 million in 3.625% 2023 Notes requiring semi-annual interest payments in April and October of each year until maturity. The net proceeds from the sale of the notes, after deducting $5.7 million of debt issuance cost, were $350.8 million. The 2023 Notes are general unsecured senior obligations of the Company. The 2023 Notes are unconditionally guaranteed on a senior basis by the Company and certain subsidiaries of the Company that are guarantors under the Company’s existing secured credit facility. The 2023 Notes are subject to redemption at the option of the Company at any time prior to April 15, 2018, at a price equal to 100% of the principal amount, plus any accrued interest to the date of redemption and a make-whole provision. The Company may also redeem up to 35% of the 2023 Notes before April 15, 2018, with the net cash proceeds from equity offerings. The 2023 Notes are also subject to redemption at the option of the Company, in whole or in part, on or after April 15, 2018, at redemption prices starting at 102.719% of the principal amount plus accrued interest during the period beginning April 15, 2018, and declining annually to 100% of principal and accrued interest on or after April 15, 2021.

Based on quoted market prices, the approximate fair value of the Company’s ~~$250.0 million 7.0% Senior~~2020 Notes ~~due August 1, 2020 (2020 Notes)~~ was approximately ~~$268.9~~$261.7 million and ~~$272.5~~$266.9 million as of ~~August~~May 1, ~~2014,~~2015, and October ~~25, 2013,~~31, 2014, respectively. Based on quoted market prices, the approximate fair value of the Company’s 2023 Notes was approximately $371.0 million as of May 1, 2015. The carrying ~~amounts~~amount of the secured credit facility ~~and U.S. Term Loan approximate~~approximates fair value. Estimates of fair value for the 2020 Notes and 2023 Notes are based on quoted market prices, and are considered Level 2 inputs as defined in the fair value hierarchy described in Note 5.

Government refundable advances consist of payments received from the Canadian government to assist in research and development related to commercial aviation. The repayment of this advance is based on year-over-year commercial aviation revenue growth at CMC beginning in 2014. Imputed interest on the advance was ~~4.55%~~4.30% at ~~August~~May 1, ~~2014.~~2015. The ~~discounted value of~~ debt recognized was ~~$52.9~~$46.0 million and ~~$56.9~~$51.9 million as of ~~August~~May 1, ~~2014,~~2015, and October ~~25, 2013,~~31, 2014, respectively.

~~During the third fiscal quarter~~As of ~~2013,~~May 1, 2015, and October 31, 2014, the Company ~~recorded~~had a $1.1 million and $1.5 million liability, respectively, related to environmental remediation at a previously sold business for which the Company provided indemnification. ~~A loss~~

In the first fiscal quarter of ~~$1.0~~2015, the Company recognized a $15.7 million ~~net~~gain and a $2.4 million reduction in interest expense upon the lapse of a statutory period related to a liability for a non-income tax ~~is reflected in discontinued operations on the Consolidated Statement~~position of ~~Operations and Comprehensive Income (Loss).~~an acquired company.

On March 5, 2014, the Company entered into a Consent Agreement with the U.S. Department of State’s Directorate of Defense Trade Controls Office of Defense Trade Controls Compliance (DTCC) to resolve alleged International Traffic in Arms Regulations (ITAR) civil violations. The Consent Agreement ~~settles~~settled the pending ITAR compliance matter with the DTCC previously reported by the Company that resulted from voluntary reports the Company filed with DTCC that disclosed possible technical and administrative violations of the ITAR. The Consent Agreement has a three-year term and provides for: (i) a payment of $20 million, $10 million of which is suspended and eligible for offset credit based on verified expenditures for past and future remedial compliance measures; (ii) the appointment of an external Special Compliance Official to oversee compliance with the Consent Agreement and the ITAR; (iii) two external audits of the Company’s ITAR compliance program; and (iv) continued implementation of ongoing remedial compliance measures and additional remedial compliance measures related to automated systems and ITAR compliance policies, procedures, and training.

The settlement amount in the Consent Agreement iswas consistent with the amount proposed by DTCC in August 2013, for which the Company estimated and recorded a $10 million charge in the third fiscal quarter ended July 26, 2013. The $10 million portion of the settlement that is not subject to suspension will be paid in installments, with $4 million paid in March 2014, $2 million paid in February 2015, and $2 million to be paid in each of March ~~2015,~~ 2016 and 2017. The Company expects some part of recent investments made in ~~our~~its ITAR compliance

program will be eligible for credit against the suspended portion of the settlement amount, which include: additional staffing, ongoing implementation of a new software system, employee training, and establishment of a regular compliance audit program and corrective action process. The Company expects recent and future investments in remedial compliance measures will be sufficient to cover the $10 million suspended payment.

As of ~~August~~May 1, ~~2014,~~2015, the Company had three share-based compensation plans, which are described below. The compensation cost that has been charged against income for those plans was ~~$9.8~~$5.6 million and ~~$7.7~~$6.6 million for the first ~~nine~~six months of fiscal ~~2014~~2015 and ~~2013,~~2014, respectively. During the first ~~nine~~six months of fiscal ~~2014~~2015 and ~~2013,~~2014, the Company issued ~~600,540~~178,406 and ~~502,946~~491,320 shares, respectively, under its share-based compensation plans.

The ESPP is a “safe-harbor” designed plan whereby shares are purchased by participants at a discount of 5% of the market value on the purchase date and, therefore, compensation cost is not recorded.

The Company offers shares under its employee sharesave scheme for U.K. employees. This plan allows participants the option to purchase shares at a 5% discount ~~of 5%~~ of the market price of the stock as of the beginning of the offering period. The term of these options is three years. The sharesave scheme is not a “safe-harbor” design, and therefore, compensation cost is recognized on this plan. Under the sharesave scheme, option exercise prices are equal to the fair market value of the Company’s common stock on the date of grant. The Company granted ~~29,242~~25,984 and ~~16,722~~29,242 options in the ~~first nine~~six month periods ended ~~August~~May 1, ~~2014,~~2015, and ~~July 26, 2013,~~May 2, 2014, respectively. The weighted-average grant date fair value of options granted during the ~~nine~~six month periods ended ~~August~~May 1, 2015, and May 2, 2014, was $24.31 and ~~July 26, 2013, was~~ $27.03 ~~and $20.24~~ per share, respectively.

The fair value of the awards under the employee sharesave scheme was estimated using a Black-Scholes pricing model which uses the assumptions noted in the following table. The risk-free rate for the contractual life of the option is based on the U.S. Treasury zero coupon issues in effect at the time of grant.

			Six Months Ended
	Nine Months Ended		May 1,			May 2,
	August 1,	July 26,	2015			2014
	2014	2013
Volatility	33.69%	36.97%		25.80	%		33.69	%
Risk-free interest rate	0.73%	0.40%		0.93	%		0.73	%
Expected life (years)	3	3	3			3
Dividends	0	0	0			0

Under the equity incentive plan, option exercise prices are equal to the fair market value of the Company’s common stock on the date of grant. The Company granted ~~193,200~~188,500 and ~~244,700~~191,900 options to purchase shares in the ~~nine~~six month periods ended ~~August~~May 1, ~~2014,~~2015, and ~~July 26, 2013,~~May 2, 2014, respectively. The weighted-average grant date fair value of options granted during the ~~nine~~six month periods ended ~~August~~May 1, 2015, and May 2, 2014, was $48.63 and ~~July 26, 2013, was $45.23 and $29.24~~$45.20 per share, respectively.

The fair value of each option granted by the Company was estimated using a Black-Scholes pricing model, which uses the assumptions noted in the following table. The Company uses historical data to estimate volatility of the Company’s common stock and option exercise and employee termination assumptions. The risk-free rate for the contractual life of the option is based on the U.S. Treasury zero coupon issues in effect at the time of the grant.

			Six Months Ended
	Nine Months Ended		May 1,	May 2,
	August 1,	July 26,	2015	2014
	2014	2013
Volatility	41.87 - 43.17%	41.89 - 44.25%	40.73 - 41.89%	41.87 - 43.17%
Risk-free interest rate	1.73 - 2.99%	0.79 - 1.88%	1.43 - 2.00%	1.73 - 2.99%
Expected life (years)	5 - 9	4.5 - 9.5	5 - 9	5 - 9
Dividends	0	0	0	0

The Company granted ~~77,575~~20,300 and ~~32,200~~77,075 restricted stock units ~~during~~in the ~~nine~~six month periods ended ~~August~~May 1, ~~2014,~~2015, and ~~July 26, 2013,~~May 2, 2014, respectively. The weighted-average grant date fair value of restricted stock units granted during the ~~nine~~six month periods ended ~~August~~May 1, 2015, and May 2, 2014, was $113.98 and ~~July 26, 2013, was $84.50 and $62.52~~$84.34 per share, respectively. The fair value of each restricted stock unit granted by the Company is equal to the fair market value of the Company’s common stock on the date of grant.

On January 31, 2015, the Company acquired the defense, aerospace and training display (DAT) business of Belgium-based Barco N.V. (Barco) for €150 million, or approximately $171 million, in cash. The Company incurred a $2.9 million foreign currency exchange loss in the funding of the acquisition in the first fiscal quarter of 2015. The Company financed the acquisition primarily using international cash reserves, with the balance funded by borrowings under its existing credit facility. The display business develops and manufactures visualization solutions for a variety of demanding defense and commercial aerospace applications. The display business is included in our Avionics & Controls segment.

The following summarizes the allocation of the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The fair value adjustment for inventory was $7.1 million, which will be recognized as cost of goods sold over 13 months, the estimated inventory turnover. Acquisition related costs of $3.3 million have been recognized as selling, general and administrative expense. The purchase price includes the value of existing technologies, the introduction of new technologies, and the addition of new customers. These factors resulted in recording goodwill of $63.5 million. The amount allocated to goodwill is not deductible for income tax purposes.

On December 20, 2013, the Company acquired Sunbank for $51.7 million. The purchase price included $5 million in additional contingent consideration based upon achievement of certain sales levels over a two-year period. Sunbank is a manufacturer of electrical cable accessories, connectors and flexible conduit systems. Sunbank is included in the Sensors & Systems segment.

On February 4, 2013, the Company acquired the Gamesman Group (Gamesman) for $40.8 million. Gamesman is a global supplier of input devices principally serving the gaming industry. Gamesman is included in the Avionics & Controls segment.

~~The Company’s accumulated other comprehensive loss is comprised of the following:~~

On December 5, 2013, the Company announced the acceleration of its plans to consolidate certain facilities and create cost efficiencies through shared services in sales, general and administrative and support functions. These integration activities are expected to result in charges and expenses for a total of ~~approximately $40 million. The Company expects to incur costs of $20 million to $25~~$35 million in fiscal 2014 ~~to support these efforts, with the balance to be incurred~~and fiscal 2015. Total restructuring expenses were $20.4 million in fiscal ~~2015.~~2014. The costs are ~~mainly~~ for exit and relocation of facilities, losses on the write off of certain property, plant and equipment, and severance. In the first ~~nine~~six months of fiscal ~~2014,~~2015, restructuring expense totaled ~~$14.3~~$7.3 million, as more fully described in the following ~~table.~~table:

(In thousands)			Write Off of
In Thousands												Write Off of
	Exit &		of Property,							Exit &		Property,
	Relocation		Plant &							Relocation		Plant &
	of Facilities		Equipment			Severance		Total		of Facilities		Equipment		Severance		Total

Cost of sales	$	4,029	$	9		$	-	$	4,038	$	2,414	$	560	$	402	$	3,376
Restructuring charges		2,866		2,542	��		4,871		10,279		2,901		-		1,071		3,972
Total	$	6,895	$	2,551		$	4,871	$	14,317	$	5,315	$	560	$	1,473	$	7,348

In the first six months of fiscal 2014, restructuring expense totaled $8.9 million, as more fully described in the following table:

The Company has recorded an accrued liability ~~for $6.4~~of $2.7 million and $5.9 million for these activities as of ~~August~~May 1, ~~2014.~~2015, and October 31, 2014, respectively.

(In thousands)	Accrued
In Thousands				Accrued
				Liabilities
	Liabilities
Beginning Balance as of October 25, 2013	$	-		$	-
Amounts accrued and incurred		14,317			20,388
Amounts paid		(5,313	)		(11,688	)
Write-off		(2,542	)		(2,585	)
Currency translation adjustment		(37	)		(200	)
Ending Balance as of August 1, 2014	$	6,425
Balance as of October 31, 2014				$	5,915

Amounts accrued and incurred					7,348
Amounts paid					(9,845	)
Write-off					(560	)
Currency translation adjustment					(130	)
Balance as of May 1, 2015				$	2,728

On September 3, 2014, the Company approved a plan to sell certain non-core business units including Eclipse, a manufacturer of embedded communication intercept receivers for signal intelligence ~~applications,~~applications; Wallop Defence Systems, Ltd. (Wallop), a manufacturer of flare countermeasure ~~devices,~~devices; Pacific Aerospace and Electronics Inc. (PA&E), a manufacturer of hermetically sealed electrical ~~connectors,~~connectors; and ~~an immaterial~~a small distribution business. These businesses were not separate reporting units as defined under U.S. GAAP and no indicator of impairment existed at August 1, 2014, requiring an impairment test of their corresponding reporting units’ goodwill or these businesses’ long-lived assets. ~~Due to~~Based upon the ~~Company’s plan to sell these businesses, during~~estimated fair values, the Company incurred an estimated after-tax loss of $49.5 million in the fourth fiscal quarter of 2014 on assets held for sale in discontinued operations. Principal assumptions used in measuring the ~~assets will be valued at fair value and goodwill~~estimated after-tax loss included estimated selling price of the ~~reporting unit will be allocated to each~~discontinued business, ~~based upon~~discount rates, industry growth

rates, and pricing of comparable transactions in the ~~relative fair value of the business units and the reporting unit.~~market. Eclipse and the distribution business are included in the Avionics & Controls segment, Wallop is included in the Advanced Materials segment, and PA&E is included in the Sensors & Systems segment. ~~Beginning in~~

During the ~~fourth~~second fiscal quarter of ~~2014, these businesses will be reported as~~2015, the Company incurred a loss of $1.8 million on discontinued operations. ~~Based~~During the first six months of fiscal 2015, the Company incurred a loss on discontinued operations of $18.6 million, including a $15.8 million loss on assets held for sale. For the first six months of fiscal 2015, a $10.2 million loss on assets held for sale at Avionics & Controls was principally due the reduction of Eclipse’s estimated selling price based upon ~~a range~~lower expectations of ~~projected fair values, management expects~~earnings for the business and continuing negotiations with the buyer. The $5.1 million write-off in Advanced Materials was due to ~~incur an estimated after-tax loss between $55 million and $75 million~~the effects of valuing Wallop’s balance sheet at the current exchange rate incurred in the ~~fourth~~first six months of fiscal 2015.

In the first fiscal quarter of ~~2014 on~~2015, the ~~assets~~Company recorded a $1.2 million increase in a liability related to ~~be held~~environmental remediation at a previously sold business for ~~sale~~which the Company provided indemnification. A loss of $0.8 million, net of tax, is reflected in discontinued operations.

The operating results of the discontinued operations for the three month period ended May 1, 2015, consisted of the following:

The operating results of the discontinued operations for the six month period ended May 1, 2015, consisted of the following:

The operating results of the discontinued operations for the three month period ended May 2, 2014, consisted of the following:

The operating results of the discontinued operations for the six month period ended May 2, 2014, consisted of the following:

Assets and Liabilities Held for Sale within the Consolidated Balance Sheet at May 1, 2015, are comprised of the following:

	Avionics &		Sensors &		Advanced
In Thousands	Controls		Systems		Materials		Total

Accounts receivable, net	$	3,352	$	3,678	$	3,266	$	10,296
Inventories		12,924		9,141		5,733		27,798
Prepaid expenses		295		237		401		933
Deferred income tax benefits		697		675		-		1,372
Income tax refundable		-		-		-		-
Current Assets of Businesses Held for Sale	$	17,268	$	13,731	$	9,400	$	40,399

Net property, plant and equipment	$	1,777	$	3,990	$	16,867	$	22,634
Intangibles, net		15,642		10,205		6,957		32,804
Deferred income tax benefits		-		-		-		-
Other assets		-		-		1,514		1,514
Non-Current Assets of Businesses Held for Sale	$	17,419	$	14,195	$	25,338	$	56,952

Accounts payable	$	3,314	$	1,107	$	5,536	$	9,957
Accrued liabilities		1,738		1,018		1,468		4,224
Current Liabilities of Businesses Held for Sale	$	5,052	$	2,125	$	7,004	$	14,181

Deferred income tax liabilities	$	11,148	$	6,310	$	1,641	$	19,099
Other liabilities		307		21		-		328
Non-Current Liabilities of Businesses Held for Sale	$	11,455	$	6,331	$	1,641	$	19,427

Net Assets of Businesses Held for Sale	$	18,180	$	19,470	$	26,093	$	63,743

Assets and Liabilities Held for Sale within the Consolidated Balance Sheet at October 31, 2014, were comprised of the following:

	Avionics &		Sensors &			Advanced
In Thousands	Controls		Systems			Materials		Total

Accounts receivable, net	$	5,154	$	3,752		$	2,106	$	11,012
Inventories		12,646		7,972			5,258		25,876
Prepaid expenses		408		86			335		829
Deferred income tax benefits		671		680			-		1,351
Income tax refundable		-		-			2,378		2,378
Current Assets of Businesses Held for Sale	$	18,879	$	12,490		$	10,077	$	41,446

Net property, plant and equipment	$	4,949	$	4,105		$	19,839	$	28,893
Intangibles, net		22,228		10,659			8,327		41,214
Deferred income tax benefits		-		(30	)		-		(30	)
Other assets		-		-			1,600		1,600
Non-Current Assets of Businesses Held for Sale	$	27,177	$	14,734		$	29,766	$	71,677

Accounts payable	$	2,194	$	873		$	6,326	$	9,393
Accrued liabilities		1,765		1,008			2,025		4,798
Current Liabilities of Businesses Held for Sale	$	3,959	$	1,881		$	8,351	$	14,191

Deferred income tax liabilities	$	11,084	$	6,243		$	1,537	$	18,864
Other liabilities		-		-			12		12
Non-Current Liabilities of Businesses Held for Sale	$	11,084	$	6,243		$	1,549	$	18,876

Net Assets of Businesses Held for Sale	$	31,013	$	19,100		$	29,943	$	80,056

Business segment information for continuing operations includes the segments of Avionics & Controls, Sensors & Systems and Advanced Materials.

(In thousands)		Three Months Ended						Nine Months Ended
In Thousands															Three Months Ended						Six Months Ended
		August 1,			July 26,			August 1,			July 26,				May 1,			May 2,			May 1,			May 2,
		2014			2013			2014			2013				2015			2014			2015			2014
Sales
Avionics & Controls		$	200,109		$	179,572		$	596,149		$	546,272			$	210,589		$	184,616		$	387,067		$	378,506
Sensors & Systems			198,106			175,864			595,929			524,638				176,425			205,111			340,081			386,885
Advanced Materials			132,909			122,632			373,600			364,682				113,066			121,134			219,276			231,410
Total Sales		$	531,124		$	478,068		$	1,565,678		$	1,435,592
															$	500,080		$	510,861		$	946,424		$	996,801

Earnings from Continuing Operations Before Income Taxes	Earnings from Continuing Operations Before Income Taxes													Earnings from Continuing Operations Before Income Taxes
Avionics & Controls ⁽¹⁾		$	29,055		$	20,597		$	75,386		$	60,651
Avionics & Controls															$	9,449		$	23,310		$	28,551		$	51,050
Sensors & Systems			18,196			21,584			61,533			63,792				22,564			23,124			32,135			43,756
Advanced Materials			27,532			28,135			70,903			74,402				24,981			30,179			41,512			48,187
Segment Earnings			74,783			70,316			207,822			198,845				56,994			76,613			102,198			142,993

Corporate expense			(16,142	)		(20,793	)		(48,398	)		(53,224	)			(22,007	)		(17,037	)		(41,022	)		(32,256	)
Other income																-			-			12,744			-
Interest income			146			132			403			381				124			136			303			255
Interest expense			(7,870	)		(9,050	)		(24,939	)		(30,976	)			(8,564	)		(8,434	)		(14,405	)		(17,059	)
Loss on extinguishment of debt			(533	)		-			(533	)		(946	)			(329	)		-			(329	)		-
		$	50,384		$	40,605		$	134,355		$	114,080			$	26,218		$	51,278		$	59,489		$	93,933

The following schedules set forth condensed consolidating financial information as required by Rule 3-10 of Securities and Exchange Commission Regulation S-X as of ~~August~~May 1, ~~2014,~~2015, and October ~~25, 2013,~~31, 2014, and for the applicable periods ended ~~August~~May 1, ~~2014,~~2015, and ~~July 26, 2013,~~May 2, 2014, for (a) Esterline Technologies Corporation (the Parent); (b) TA Mfg. Limited, the issuer of the 2023 Notes; (c) on a combined basis, the current subsidiary guarantors (Guarantor Subsidiaries) of the secured credit facility, the 2020 Notes and ~~2020 Notes;~~the 2023 Notes for the periods after April 2015; and ~~(c)~~(d) on a combined basis, the subsidiaries that are not guarantors (Non-Guarantor Subsidiaries) of the secured credit facility, ~~and~~the 2020 Notes ~~(Non-Guarantor Subsidiaries).~~and the 2023 Notes for the period after April 2015. The Guarantor Subsidiaries are direct and indirect wholly-owned subsidiaries of Esterline Technologies Corporation and have fully and unconditionally, jointly and severally, guaranteed the secured credit facility, the 2020 Notes and the ~~2020~~2023 Notes.

(In thousands)							Non-
In Thousands																							Non-
				Guarantor			Guarantor										TA Mfg.			Guarantor			Guarantor
	Parent			Subsidiaries			Subsidiaries		Eliminations			Total		Parent			Ltd.			Subsidiaries			Subsidiaries			Eliminations			Total
ASSETS

Current Assets
Cash and cash equivalents	$	4,039		$	5,617		$	200,800	$	-		$	210,456	$	23,591		$	1,985		$	2,883		$	144,186		$	-		$	172,645
Cash in escrow		-			-			-		-			-
Accounts receivable, net		(212	)		145,086			216,953		-			361,827		69			-			142,018			242,575			-			384,662
Inventories		-			216,485			277,327		-			493,812		-			-			193,498			286,090			-			479,588
Income tax refundable		-			-			7,681		-			7,681		-			-			-			9,394			-			9,394
Deferred income tax benefits		29,042			169			21,505		-			50,716		31,918			-			(1,220	)		21,826			-			52,524
Prepaid expenses		169			7,968			16,679		-			24,816		185			-			8,302			15,405			-			23,892
Other current assets		84			116			4,086		-			4,286		74			-			111			3,415			-			3,600
Current assets of businesses held for sale															-			-			25,400			14,999			-			40,399
Total Current Assets		33,122			375,441			745,031		-			1,153,594		55,837			1,985			370,992			737,890			-			1,166,704

Property, Plant & Equipment, Net		1,470			169,712			192,023		-			363,205		1,397			-			160,832			144,369			-			306,598
Goodwill		-			362,192			770,795		-			1,132,987		-			-			372,021			702,416			-			1,074,437
Intangibles, net		-			155,050			405,843		-			560,893		-			-			101,998			373,933			-			475,931
Debt issuance costs, net		4,453			-			184		-			4,637		5,447			5,715			-			-			-			11,162
Deferred income tax benefits		14,799			(1	)		53,618		-			68,416		18,169			-			-			44,590			-			62,759
Other assets		515			16,020			8,191		-			24,726		276			-			41,394			(19,845	)		-			21,825
Non-current assets of businesses held for sale															-			-			-			56,952			-			56,952
Amounts Due From (To) Subsidiaries		-			651,862			-		(651,862	)		-		-			349,959			794,188			-			(1,144,147	)		-
Investment in Subsidiaries		2,772,194			1,415,794			115,373		(4,303,361	)		-		3,162,577			642,929			1,009,042			14,644			(4,829,192	)		-
Total Assets	$	2,826,553		$	3,146,070		$	2,291,058	$	(4,955,223	)	$	3,308,458	$	3,243,703		$	1,000,588		$	2,850,467		$	2,054,949		$	(5,973,339	)	$	3,176,368

LIABILITIES AND SHAREHOLDERS' EQUITY														LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	1,831		$	38,140		$	83,405	$	-		$	123,376	$	3,536		$	-		$	36,820		$	83,092		$	-		$	123,448
Accrued liabilities		10,770			85,711			142,487		-			238,968		16,247			1,189			87,274			159,783			-			264,493
Current maturities of long-term debt		8,750			371			3,701		-			12,822		-			-			862			140			-			1,002
Deferred income tax liabilities		444			19			2,742		-			3,205		558			-			1			2,292			-			2,851
Federal and foreign income taxes		(2,054	)		(8,882	)		13,245		-			2,309		(1,946	)		(2,621	)		(3,898	)		10,082			-			1,617
Current liabilities of businesses held for sale															-			-			3,902			10,279			-			14,181
Total Current Liabilities		19,741			115,359			245,580		-			380,680		18,395			(1,432	)		124,961			265,668			-			407,592

Credit Facilities		115,000			-			-		-			115,000		90,000			-			-			30,000			-			120,000
Long-Term Debt, Net		405,313			55,273			52,533		-			513,119		250,000			369,567			57,184			46,203			-			722,954
Deferred Income Tax Liabilities		54,211			(7	)		124,592		-			178,796		57,654			-			(17,465	)		97,794			-			137,983
Pension and Post-Retirement Obligations		17,388			713			44,658		-			62,759		18,904			-			862			38,202			-			57,968
Other Liabilities		16,313			3,944			27,056		-			47,313		14,680			-			194			15,084			-			29,958
Non-current liabilities of businesses held for sale															-			-			17,740			1,687			-			19,427
Amounts Due To (From) Subsidiaries		187,796			-			454,020		(641,816	)		-		1,102,689			-			-			400,768			(1,503,457	)		-
Shareholders' Equity		2,010,791			2,970,788			1,342,619		(4,313,407	)		2,010,791		1,691,381			632,453			2,666,991			1,159,543			(4,469,882	)		1,680,486
Total Liabilities and Shareholders' Equity	$	2,826,553		$	3,146,070		$	2,291,058	$	(4,955,223	)	$	3,308,458	$	3,243,703		$	1,000,588		$	2,850,467		$	2,054,949		$	(5,973,339	)	$	3,176,368

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three month period ended ~~August~~May 1, ~~2014.~~2015.

(In thousands)							Non-
In Thousands																									Non-
																			TA Mfg.			Guarantor			Guarantor
				Guarantor			Guarantor									Parent			Ltd.			Subsidiaries			Subsidiaries			Eliminations			Total
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Net sales	$	-		$	248,443		$	284,366		$	(1,685	)	$	531,124		$	-		$	-		$	234,864		$	266,456		$	(1,240	)	$	500,080
Cost of sales		-			156,486			193,850			(1,685	)		348,651			-			-			153,567			184,102			(1,240	)		336,429
		-			91,957			90,516			-			182,473			-			-			81,297			82,354			-			163,651
Expenses
Selling, general and administrative		-			37,686			57,607			-			95,293			-			16			35,634			65,092			-			100,742
Research, development and engineering		-			11,452			13,682			-			25,134
Research, development & engineering																	-			-			12,520			14,480			-			27,000
Restructuring charges		-			2,577			828			-			3,405			-			-			922			-			-			922
Goodwill impairment		-			-			-			-			-
Other (income) expense																	-			-			(409	)		409			-			-
Total Expenses		-			51,715			72,117			-			123,832			-			16			48,667			79,981			-			128,664

Operating Earnings from Continuing Operations		-			40,242			18,399			-			58,641			-			(16	)		32,630			2,373			-			34,987
Interest Income		(3,837	)		(1,948	)		(13,932	)		19,571			(146	)		(4,029	)		(860	)		(7,268	)		(7,490	)		19,523			(124	)
Interest Expense		5,777			6,832			14,832			(19,571	)		7,870			6,857			889			12,467			7,874			(19,523	)		8,564
Loss on Extinguishment of Debt		-			-			533			-			533			329			-			-						-			329
Earnings (Loss) from Continuing Operations Before Income Taxes		(1,940	)		35,358			16,966			-			50,384			(3,157	)		(45	)		27,431			1,989			-			26,218
Income Tax Expense (Benefit)		(466	)		7,446			4,450			-			11,430			(560	)		(9	)		5,333			(222	)		-			4,542
Earnings (Loss) from Continuing Operations Including Noncontrolling Interests		(1,474	)		27,912			12,516			-			38,954			(2,597	)		(36	)		22,098			2,211			-			21,676
Earnings Attributable to Noncontrolling Interests		-			-			(46	)		-			(46	)		-			-			-			(44	)		-			(44	)
Earnings (Loss) from Continuing Operations Attributable to Esterline, Net of Tax		(1,474	)		27,912			12,470			-			38,908			(2,597	)		(36	)		22,098			2,167			-			21,632
Loss from Discontinued Operations Attributable to Esterline, Net of Tax		-			-			-			-			-			-			-			921			(2,743	)		-			(1,822	)
Equity in Net Earnings of Consolidated Subsidiaries		40,382			883			114			(41,379	)		-			22,407			21,534			51						(43,992	)		-

Net Earnings (Loss) Attributable to Esterline	$	38,908		$	28,795		$	12,584		$	(41,379	)	$	38,908		$	19,810		$	21,498		$	23,070		$	(576	)	$	(43,992	)	$	19,810

Comprehensive Income (Loss)	$	15,707		$	26,224		$	(9,163	)	$	(16,289	)	$	16,479		$	33,393		$	10,537		$	23,443		$	11,737		$	(45,566	)	$	33,544

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the ~~nine~~six month period ended ~~August~~May 1, ~~2014.~~2015.

(In thousands)							Non-
In Thousands																									Non-
																			TA Mfg.			Guarantor			Guarantor
				Guarantor			Guarantor									Parent			Ltd.			Subsidiaries			Subsidiaries			Eliminations			Total
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Net sales	$	-		$	733,826		$	836,055		$	(4,203	)	$	1,565,678		$	-		$	-		$	443,865		$	504,659		$	(2,100	)	$	946,424
Cost of sales		-			468,901			562,867			(4,203	)		1,027,565			-			-			293,377			346,146			(2,100	)		637,423
		-			264,925			273,188			-			538,113			-			-			150,488			158,513			-			309,001
Expenses
Selling, general and administrative		-			120,154			169,815			-			289,969			-			16			74,293			120,089			-			194,398
Research, development and engineering		-			37,005			41,436			-			78,441
Research, development & engineering																	-			-			22,297			27,158			-			49,455
Restructuring charges		-			6,898			3,381			-			10,279			-			-			3,360			612			-			3,972
Goodwill impairment		-			-			-			-			-
Other (income) expense																	-			-			-			(12,744	)		-			(12,744	)
Total Expenses		-			164,057			214,632			-			378,689			-			16			99,950			135,115			-			235,081

Operating Earnings from Continuing Operations		-			100,868			58,556			-			159,424			-			(16	)		50,538			23,398			-			73,920
Interest Income		(11,588	)		(5,886	)		(42,306	)		59,377			(403	)		(7,994	)		(860	)		(14,466	)		(15,888	)		38,905			(303	)
Interest Expense		18,350			20,619			45,347			(59,377	)		24,939			13,201			889			24,795			14,425			(38,905	)		14,405
Loss on Extinguishment of Debt		-			-			533			-			533			329			-			-			-			-			329
Earnings (Loss) from Continuing Operations Before Income Taxes		(6,762	)		86,135			54,982			-			134,355			(5,536	)		(45	)		40,209			24,861			-			59,489
Income Tax Expense (Benefit)		(1,462	)		18,122			11,033			-			27,693			(1,109	)		(9	)		6,947			6,863			-			12,692
Earnings (Loss) from Continuing Operations Including Noncontrolling Interests		(5,300	)		68,013			43,949			-			106,662			(4,427	)		(36	)		33,262			17,998			-			46,797
Earnings Attributable to Noncontrolling Interests		-			-			(429	)		-			(429	)		-			-			-			(107	)		-			(107	)
Earnings (Loss) from Continuing Operations Attributable to Esterline, Net of Tax		(5,300	)		68,013			43,520			-			106,233			(4,427	)		(36	)		33,262			17,891			-			46,690
Loss from Discontinued Operations Attributable to Esterline, Net of Tax		(343	)		-			-			-			(343	)		(774	)		-			(9,655	)		(8,132	)		-			(18,561	)
Equity in Net Earnings of Consolidated Subsidiaries		111,533			2,117			1,434			(115,084	)		-			33,330			21,534			113			-			(54,977	)		-

Net Earnings (Loss) Attributable to Esterline	$	105,890		$	70,130		$	44,954		$	(115,084	)	$	105,890		$	28,129		$	21,498		$	23,720		$	9,759		$	(54,977	)	$	28,129

Comprehensive Income (Loss)	$	88,374		$	68,693		$	35,471		$	(106,376	)	$	86,162		$	(93,457	)	$	10,537		$	23,995		$	(104,298	)	$	56,581		$	(106,642	)

Condensed Consolidating Statement of Cash Flows for the ~~nine~~six month period ended ~~August~~May 1, ~~2014.~~2015.

(In thousands)								Non-
In Thousands																										Non-
																				TA Mfg.			Guarantor			Guarantor
					Guarantor			Guarantor									Parent			Ltd.			Subsidiaries			Subsidiaries			Eliminations			Total
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Cash Flows Provided (Used) by Operating Activities	Cash Flows Provided (Used) by Operating Activities																Cash Flows Provided (Used) by Operating Activities
Net earnings (loss) including noncontrolling interests		$	106,319		$	70,130		$	44,954		$	(115,084	)	$	106,319		$	28,236		$	21,498		$	23,720		$	9,759		$	(54,977	)	$	28,236
Depreciation & amortization			-			32,336			55,107			-			87,443			-			-			16,611			33,242			-			49,853
Deferred income taxes			(4,971	)		(2	)		(8,131	)		-			(13,104	)		(1,337	)		-			21			(6,156	)		-			(7,472	)
Share-based compensation			-			4,248			5,585			-			9,833			-			1			2,336			3,215			-			5,552
Gain from sale of capital assets			-			-			-			-			-
Goodwill impairment			-			-			-			-			-
Gain on release of non-income tax liability																		-			-			-			(15,656	)		-			(15,656	)
Loss on assets held for sale																		-			-			10,295			5,551			-			15,846
Working capital changes, net of effect of acquisitions:
Accounts receivable			528			13,887			9,065			-			23,480			541			-			3,608			8,034			-			12,183
Inventories			-			(17,289	)		(25,122	)		-			(42,411	)		-			-			(5,499	)		(18,781	)		-			(24,280	)
Prepaid expenses			(52	)		(1,913	)		(4,237	)		-			(6,202	)		(38	)		-			(1,663	)		(3,507	)		-			(5,208	)
Other current assets			2			(1	)		(100	)		-			(99	)		6			-			(18	)		(315	)		-			(327	)
Accounts payable			117			3,585			(8,210	)		-			(4,508	)		1,785			-			(3,949	)		(756	)		-			(2,920	)
Accrued liabilities			(10,486	)		(1,534	)		(4,438	)		-			(16,458	)		(5,657	)		1,177			(5,888	)		(72	)		-			(10,440	)
Federal and foreign income taxes			(4,462	)		21,809			(25,330	)		-			(7,983	)		336			(14	)		(1,059	)		793			-			56
Other liabilities			5,415			95			(6,950	)		-			(1,440	)		139			-			(82	)		2,240			-			2,297
Other, net			(497	)		(10,962	)		11,304			-			(155	)		(9,711	)		(642,884	)		(33,274	)		693,827			-			7,958
			91,913			114,389			43,497			(115,084	)		134,715			14,300			(620,222	)		5,159			711,418			(54,977	)		55,678

Cash Flows Provided (Used) by Investing Activities	Cash Flows Provided (Used) by Investing Activities																Cash Flows Provided (Used) by Investing Activities
Purchases of capital assets			(186	)		(11,748	)		(23,075	)		-			(35,009	)		(137	)		-			(8,558	)		(14,740	)		-			(23,435	)
Proceeds from sale of capital assets			-			-			-			-			-
Acquisition of business, net of cash acquired			-			(44,745	)		-			-			(44,745	)
Acquisition of businesses, net of cash acquired																		-			-			-			(171,070	)		-			(171,070	)
			(186	)		(56,493	)		(23,075	)		-			(79,754	)		(137	)		-			(8,558	)		(185,810	)		-			(194,505	)

(In thousands)

Non-

Guarantor

Guarantor

Parent

Subsidiaries

Subsidiaries

Eliminations

Total

Cash Flows Provided (Used) by Financing Activities

Proceeds provided by stock issuance under
   employee stock plans

23,173

-

-

-

23,173

Excess tax benefits from stock option
   exercises

6,392

-

-

-

6,392

Share repurchases

(5,176
)

-

-

-

(5,176
)
Repayment of long-term credit facilities

(40,000
)

-

-

-

(40,000
)
Repayment of long-term debt

(6,562
)

(245
)

(27,269
)

-

(34,076
)
Proceeds from issuance of long-term
   credit facilities

25,000

-

-

-

25,000

Proceeds from government assistance

-

-

3,362

-

3,362

Dividends paid to noncontrolling interests

-

-

(780
)

-

(780
)
Debt and other issuance costs

-

-

-

-

-

Net change in intercompany financing

(98,319
)

(56,888
)

40,123

115,084

-

(95,492
)

(57,133
)

15,436

115,084

(22,105
)

Effect of Foreign Exchange Rates on Cash
   and Cash Equivalents

(22
)

(22
)

(1,534
)

-

(1,578
)

Net Increase (Decrease) in Cash and
   Cash Equivalents

(3,787
)

741

34,324

-

31,278

Cash and Cash Equivalents -
   Beginning of Period

7,826

4,876

166,476

-

179,178

Cash and Cash Equivalents - End of Period

$
4,039

$
5,617

$
200,800

$
-

$
210,456

In Thousands										Non-
				TA Mfg.			Guarantor			Guarantor
	Parent			Ltd.			Subsidiaries			Subsidiaries			Eliminations		Total

Cash Flows Provided (Used) by Financing Activities
Proceeds provided by stock issuance under employee stock plans		9,335			-			-			-			-		9,335
Excess tax benefits from stock option exercises		1,744			-			-			-			-		1,744
Shares repurchased		(127,342	)		-			-			-			-		(127,342	)
Repayment of long-term credit facilities		(190,000	)		-			-			-			-		(190,000	)
Repayment of long-term debt		(161,875	)		-			2,476			(8,079	)		-		(167,478	)
Proceeds from issuance of long-term credit facilities		180,000			-			-			30,000			-		210,000
Proceeds from issuance of long-term debt		-			356,532			-			-			-		356,532
Proceeds from government assistance		-			-			-			3,142			-		3,142
Dividends paid to noncontrolling interests		-			-			-			-			-		-
Debt and other issuance costs		(2,130	)		(5,760	)		-			-			-		(7,890	)
Net change in intercompany financing		284,630			271,953			481			(612,041	)		54,977		-
		(5,638	)		622,725			2,957			(586,978	)		54,977		88,043

Effect of Foreign Exchange Rates on Cash and Cash Equivalents		432			(518	)		(129	)		(14,500	)		-		(14,715	)

Net Increase (Decrease) in Cash and Cash Equivalents		8,957			1,985			(571	)		(75,870	)		-		(65,499	)
Cash and Cash Equivalents - Beginning of Year		14,634			-			3,454			220,056			-		238,144

Cash and Cash Equivalents - End of Period	$	23,591		$	1,985		$	2,883		$	144,186		$	-	$	172,645

(In thousands)							Non-
In Thousands																						Non-
				Guarantor			Guarantor										TA Mfg.		Guarantor			Guarantor
		Parent		Subsidiaries			Subsidiaries		Eliminations			Total		Parent			Ltd.		Subsidiaries			Subsidiaries		Eliminations			Total
ASSETS

Current Assets
Cash and cash equivalents		$	7,826	$	4,876		$	166,476	$	-		$	179,178	$	14,634		$	-	$	3,454		$	220,056	$	-		$	238,144
Cash in escrow			4,018		-			-		-			4,018
Accounts receivable, net			316		154,492			228,858		-			383,666		610			-		143,158			236,121		-			379,889
Inventories			-		190,830			256,833		-			447,663		-			-		188,982			244,613		-			433,595
Income tax refundable			-		6,526			-		-			6,526		-			-		-			5,266		-			5,266
Deferred income tax benefits			26,731		171			20,375		-			47,277		31,486			-		(1,191	)		18,384		-			48,679
Prepaid expenses			117		5,510			12,556		-			18,183		147			-		6,703			13,486		-			20,336
Other current assets			86		115			5,003		-			5,204		80			-		114			1,955		-			2,149
Current assets of businesses held for sale															-			-		26,800			14,646		-			41,446
Total Current Assets			39,094		362,520			690,101		-			1,091,715		46,957			-		368,020			754,527		-			1,169,504

Property, Plant & Equipment, Net			1,754		175,402			194,041		-			371,197		1,489			-		158,089			159,764		-			319,342
Goodwill			-		344,995			783,982		-			1,128,977		-			-		347,700			724,086		-			1,071,786
Intangibles, net			-		144,222			436,727		-			580,949		-			-		106,164			365,213		-			471,377
Debt issuance costs, net			5,252		-			959		-			6,211		4,134			-		-			161		-			4,295
Deferred income tax benefits			16,782		-			55,058		-			71,840		20,455			-		30			50,822		-			71,307
Other assets			18		3,692			7,513		-			11,223		130			-		7,502			6,547		-			14,179
Non-current assets of businesses held for sale															-			-		40,737			30,940		-			71,677
Amounts Due From (To) Subsidiaries			-		549,307			-		(549,307	)		-		-			-		797,342			-		(797,342	)		-
Investment in Subsidiaries			2,588,478		979,123			349,104		(3,916,705	)		-		3,307,454			-		1,127,237			20,768		(4,455,459	)		-
Total Assets		$	2,651,378	$	2,559,261		$	2,517,485	$	(4,466,012	)	$	3,262,112	$	3,380,619		$	-	$	2,952,821		$	2,112,828	$	(5,252,801	)	$	3,193,467


LIABILITIES AND SHAREHOLDERS' EQUITY	LIABILITIES AND SHAREHOLDERS' EQUITY													LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
Accounts payable		$	1,714	$	29,064		$	92,819	$	-		$	123,597	$	1,751		$	-	$	36,905		$	76,628	$	-		$	115,284
Accrued liabilities			21,652		87,826			144,083		-			253,561		20,178			-		93,168			149,190		-			262,536
Current maturities of long-term debt			8,750		237			12,292		-			21,279		8,750			-		349			3,675		-			12,774
Deferred income tax liabilities			568		24			1,715		-			2,307		76			-		8			1,689		-			1,773
Federal and foreign income taxes			2,408		(27,399	)		32,339		-			7,348		(2,282	)		-		(2,643	)		6,496		-			1,571
Current liabilities of businesses held for sale															-			-		4,010			10,181		-			14,191
Total Current Liabilities			35,092		89,752			283,248		-			408,092		28,473			-		131,797			247,859		-			408,129

Credit Facilities			130,000		-			-		-			130,000		100,000			-		-			-		-			100,000
Long-Term Debt, Net			411,875		55,562			70,422		-			537,859		403,125			-		55,176			51,419		-			509,720
Deferred Income Tax Liabilities			57,757		(7	)		135,369		-			193,119		58,615			-		(17,333	)		107,883		-			149,165
Pension and Post-Retirement Obligations			17,500		618			49,984		-			68,102		18,683			-		1,226			42,784		-			62,693
Other Liabilities			12,298		194			27,696		-			40,188		16,762			-		3,944			26,178		-			46,884
Non-current liabilities of businesses held for sale															-			-		17,327			1,549		-			18,876
Amounts Due To (From) Subsidiaries			102,104		-			405,018		(507,122	)		-		856,961			-		-			456,861		(1,313,822	)		-
Shareholders' Equity			1,884,752		2,413,142			1,545,748		(3,958,890	)		1,884,752		1,898,000			-		2,760,684			1,178,295		(3,938,979	)		1,898,000
Total Liabilities and Shareholders' Equity		$	2,651,378	$	2,559,261		$	2,517,485	$	(4,466,012	)	$	3,262,112	$	3,380,619		$	-	$	2,952,821		$	2,112,828	$	(5,252,801	)	$	3,193,467

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three month period ended ~~July 26, 2013.~~May 2, 2014.

(In thousands)							Non-
In Thousands																								Non-
																			TA Mfg.		Guarantor			Guarantor
				Guarantor			Guarantor									Parent			Ltd.		Subsidiaries			Subsidiaries			Eliminations			Total
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Net sales	$	-		$	216,949		$	262,068		$	(949	)	$	478,068		$	-		$	-	$	243,425		$	268,512		$	(1,076	)	$	510,861
Cost of sales		-			132,786			167,329			(949	)		299,166			-			-		155,232			177,480			(1,076	)		331,636
		-			84,163			94,739			-			178,902			-			-		88,193			91,032			-			179,225
Expenses
Selling, general and administrative		-			38,045			63,777			-			101,822			-			-		37,903			54,132			-			92,035
Research, development and engineering		-			12,684			11,419			-			24,103
Research, development & engineering																	-			-		12,490			13,046			-			25,536
Restructuring charges		-			-			-			-			-			-			-		1,248			830			-			2,078
Goodwill impairment		-			-			3,454			-			3,454
Other (income) expense																	-			-		-			-			-			-
Total Expenses		-			50,729			78,650			-			129,379			-			-		51,641			68,008			-			119,649

Operating Earnings from Continuing Operations		-			33,434			16,089			-			49,523			-			-		36,552			23,024			-			59,576
Interest Income		(4,028	)		(2,028	)		(13,198	)		19,122			(132	)		(3,755	)		-		(1,913	)		(13,696	)		19,228			(136	)
Interest Expense		6,489			7,052			14,631			(19,122	)		9,050			6,237			-		6,730			14,695			(19,228	)		8,434
Loss on Extinguishment of Debt		-			-			-			-			-			-			-		-			-			-			-
Earnings (Loss) from Continuing Operations Before Income Taxes		(2,461	)		28,410			14,656			-			40,605			(2,482	)		-		31,735			22,025			-			51,278
Income Tax Expense (Benefit)		(671	)		6,264			(4,442	)		-			1,151			(520	)		-		6,996			3,910			-			10,386
Earnings (Loss) from Continuing Operations Including Noncontrolling Interests		(1,790	)		22,146			19,098			-			39,454			(1,962	)		-		24,739			18,115			-			40,892
Earnings Attributable to Noncontrolling Interests		-			-			(241	)		-			(241	)		-			-		-			(297	)		-			(297	)
Earnings (Loss) from Continuing Operations Attributable to Esterline, Net of Tax		(1,790	)		22,146			18,857			-			39,213			(1,962	)		-		24,739			17,818			-			40,595
Loss from Discontinued Operations Attributable to Esterline, Net of Tax		(975	)		-			-			-			(975	)		(343	)		-		(1,007	)		(2,341	)		-			(3,691	)
Equity in Net Earnings of Consolidated Subsidiaries		41,003			294			50			(41,347	)		-			39,209			-		802			1,926			(41,937	)		-

Net Earnings (Loss) Attributable to Esterline	$	38,238		$	22,440		$	18,907		$	(41,347	)	$	38,238		$	36,904		$	-	$	24,534		$	17,403		$	(41,937	)	$	36,904

Comprehensive Income (Loss)	$	45,816		$	22,610		$	26,689		$	(49,914	)	$	45,201		$	75,488		$	-	$	25,065		$	56,268		$	(76,700	)	$	80,121

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the ~~nine~~six month period ended ~~July 26, 2013.~~May 2, 2014.

(In thousands)							Non-
In Thousands																								Non-
																			TA Mfg.		Guarantor			Guarantor
				Guarantor			Guarantor									Parent			Ltd.		Subsidiaries			Subsidiaries			Eliminations			Total
	Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Net sales	$	-		$	653,959		$	784,389		$	(2,756	)	$	1,435,592		$	-		$	-	$	463,290		$	536,029		$	(2,518	)	$	996,801
Cost of sales		-			405,830			511,895			(2,756	)		914,969			-			-		295,903			353,456			(2,518	)		646,841
		-			248,129			272,494			-			520,623			-			-		167,387			182,573			-			349,960
Expenses
Selling, general and administrative		-			112,881			185,830			-			298,711			-			-		73,708			107,459			-			181,167
Research, development and engineering		-			37,448			35,389			-			72,837
Research, development & engineering																	-			-		24,313			26,869			-			51,182
Restructuring charges		-			-			-			-			-			-			-		4,321			2,553			-			6,874
Goodwill impairment		-			-			3,454			-			3,454
Other (income) expense																	-			-		-			-			-			-
Total Expenses		-			150,329			224,673			-			375,002			-			-		102,342			136,881			-			239,223

Operating Earnings from Continuing Operations		-			97,800			47,821			-			145,621			-			-		65,045			45,692			-			110,737
Interest Income		(11,680	)		(5,723	)		(41,022	)		58,044			(381	)		(7,751	)		-		(3,938	)		(28,372	)		39,806			(255	)
Interest Expense		23,722			20,019			45,279			(58,044	)		30,976			12,573			-		13,787			30,505			(39,806	)		17,059
Loss on Extinguishment of Debt		946			-			-			-			946			-			-		-			-			-			-
Earnings (Loss) from Continuing Operations Before Income Taxes		(12,988	)		83,504			43,564			-			114,080			(4,822	)		-		55,196			43,559			-			93,933
Income Tax Expense (Benefit)		(2,894	)		15,178			743			-			13,027			(996	)		-		12,237			7,771			-			19,012
Earnings (Loss) from Continuing Operations Including Noncontrolling Interests		(10,094	)		68,326			42,821			-			101,053			(3,826	)		-		42,959			35,788			-			74,921
Earnings Attributable to Noncontrolling Interests		-			-			(1,207	)		-			(1,207	)		-			-		-			(383	)		-			(383	)
Earnings (Loss) from Continuing Operations Attributable to Esterline, Net of Tax		(10,094	)		68,326			41,614			-			99,846			(3,826	)		-		42,959			35,405			-			74,538
Loss from Discontinued Operations Attributable to Esterline, Net of Tax		(975	)		-			-			-			(975	)		(343	)		-		(2,858	)		(4,355	)		-			(7,556	)
Equity in Net Earnings of Consolidated Subsidiaries		109,940			677			80			(110,697	)		-			71,151			-		1,234			1,320			(73,705	)		-

Net Earnings (Loss) Attributable to Esterline	$	98,871		$	69,003		$	41,694		$	(110,697	)	$	98,871		$	66,982		$	-	$	41,335		$	32,370		$	(73,705	)	$	66,982

Comprehensive Income (Loss)	$	87,090		$	68,102		$	35,100		$	(106,833	)	$	83,459		$	72,667		$	-	$	42,469		$	44,634		$	(90,087	)	$	69,683

Condensed Consolidating Statement of Cash Flows for the ~~nine~~six month period ended ~~July 26, 2013.~~May 2, 2014.

(In thousands)								Non-
In Thousands																									Non-
																				TA Mfg.		Guarantor			Guarantor
					Guarantor			Guarantor									Parent			Ltd.		Subsidiaries			Subsidiaries			Eliminations			Total
		Parent			Subsidiaries			Subsidiaries			Eliminations			Total
Cash Flows Provided (Used) by Operating Activities	Cash Flows Provided (Used) by Operating Activities																Cash Flows Provided (Used) by Operating Activities
Net earnings (loss) including noncontrolling interests		$	100,078		$	69,003		$	41,694		$	(110,697	)	$	100,078		$	67,365		$	-	$	41,335		$	32,370		$	(73,705	)	$	67,365
Depreciation & amortization			-			35,547			52,394			-			87,941			-			-		22,722			36,560			-			59,282
Deferred income taxes			11,252			(332	)		(23,158	)		-			(12,238	)		(2,708	)		-		16			(5,718	)		-			(8,410	)
Share-based compensation			-			3,321			4,346			-			7,667			-			-		2,891			3,757			-			6,648
Gain from sale of capital assets			-			(322	)		(593	)					(915	)
Goodwill impairment			-			-			3,454			-			3,454
Gain on release of non-income tax liability																		-			-		-			-			-			-
Loss on assets held for sale																		-			-		-			-			-			-
Working capital changes, net of effect of acquisitions:
Accounts receivable			(311	)		14,744			36,630			-			51,063			(257	)		-		11,715			21,873			-			33,331
Inventories			-			(17,500	)		(15,274	)		-			(32,774	)		-			-		(7,944	)		(25,541	)		-			(33,485	)
Prepaid expenses			29			287			(451	)		-			(135	)		33			-		(3,634	)		(4,471	)		-			(8,072	)
Other current assets			22			433			(1,291	)		-			(836	)		-			-		1			(277	)		-			(276	)
Accounts payable			449			1,616			3,359			-			5,424			(565	)		-		(132	)		(9,953	)		-			(10,650	)
Accrued liabilities			9,740			7,382			(12,845	)		-			4,277			(6,625	)		-		(1,292	)		(5,307	)		-			(13,224	)
Federal and foreign income taxes			1,607			(3,706	)		(3,222	)		-			(5,321	)		(6,803	)		-		22,219			(19,170	)		-			(3,754	)
Other liabilities			11,907			(13,422	)		(8,879	)		-			(10,394	)		5,308			-		64			(6,959	)		-			(1,587	)
Other, net			1,284			(675	)		(1,621	)		-			(1,012	)		(242	)		-		(3,170	)		696			-			(2,716	)
			136,057			96,376			74,543			(110,697	)		196,279			55,506			-		84,791			17,860			(73,705	)		84,452

Cash Flows Provided (Used) by Investing Activities	Cash Flows Provided (Used) by Investing Activities																Cash Flows Provided (Used) by Investing Activities
Purchases of capital assets			(105	)		(11,949	)		(25,711	)		-			(37,765	)		(149	)		-		(7,833	)		(13,315	)		-			(21,297	)
Proceeds from sale of capital assets			-			322			593			-			915
Acquisition of business, net of cash acquired			-			-			(40,689	)		-			(40,689	)
Acquisition of businesses, net of cash acquired																		-			-		(44,043	)		-			-			(44,043	)
			(105	)		(11,627	)		(65,807	)		-			(77,539	)		(149	)		-		(51,876	)		(13,315	)		-			(65,340	)

(In thousands)

Non-

Guarantor

Guarantor

Parent

Subsidiaries

Subsidiaries

Eliminations

Total

Cash Flows Provided (Used) by Financing Activities

Proceeds provided by stock issuance under
   employee stock plans

20,450

-

-

-

20,450

Excess tax benefits from stock option
   exercises

2,237

-

-

-

2,237

Shares repurchased

-

-

-

-

-

Repayment of long-term credit facilities

(70,000
)

-

-

-

(70,000
)
Repayment of long-term debt

(177,187
)

(151
)

(32,203
)

-

(209,541
)
Proceeds from issuance of long-term
   credit facilities

175,000

-

-

-

175,000

Proceeds from government assistance

-

-

5,114

-

5,114

Dividends paid to noncontrolling interests

-

-

(1,044
)

-

(1,044
)
Debt and other issuance costs

(453
)

-

-

-

(453
)
Net change in intercompany financing

(81,084
)

(84,563
)

54,950

110,697

-

(131,037
)

(84,714
)

26,817

110,697

(78,237
)

Effect of Foreign Exchange Rates on Cash
   and Cash Equivalents

5

(12
)

(1,923
)

-

(1,930
)

Net Increase (Decrease) in Cash and
   Cash Equivalents

4,920

23

33,630

-

38,573

Cash and Cash Equivalents -
   Beginning of Period

16,770

1,324

142,581

-

160,675

Cash and Cash Equivalents - End of Period

$
21,690

$
1,347

$
176,211

$
-

$
199,248

In Thousands									Non-
				TA Mfg.		Guarantor			Guarantor
	Parent			Ltd.		Subsidiaries			Subsidiaries			Eliminations		Total

Cash Flows Provided (Used) by Financing Activities
Proceeds provided by stock issuance under employee stock plans		22,957			-		-			-			-		22,957
Excess tax benefits from stock option exercises		5,297			-		-			-			-		5,297
Shares repurchased		-			-		-			-			-		-
Repayment of long-term credit facilities		(25,000	)		-		-			-			-		(25,000	)
Repayment of long-term debt		(4,375	)		-		(205	)		(14,722	)		-		(19,302	)
Proceeds from issuance of long-term credit facilities		25,000			-		-			-			-		25,000
Proceeds from issuance of long-term debt		-			-		-			-			-		-
Proceeds from government assistance		-			-		-			-			-		-
Dividends paid to noncontrolling interests		-			-		-			(780	)		-		(780	)
Debt and other issuance costs		-			-		-			-			-		-
Net change in intercompany financing		(77,490	)		-		(32,008	)		35,793			73,705		-
		(53,611	)		-		(32,213	)		20,291			73,705		8,172

Effect of Foreign Exchange Rates on Cash and Cash Equivalents		5			-		(43	)		1,019			-		981

Net Increase (Decrease) in Cash and Cash Equivalents		1,751			-		659			25,855			-		28,265
Cash and Cash Equivalents - Beginning of Year		7,826			-		4,876			166,476			-		179,178

Cash and Cash Equivalents - End of Period	$	9,577		$	-	$	5,535		$	192,331		$	-	$	207,443

We operate our businesses in three segments: Avionics & Controls, Sensors & Systems and Advanced Materials. Our segments are structured around our technical capabilities. Sales in all segments include domestic, international, defense and commercial customers.

The Avionics & Controls segment includes avionics systems, control and communication systems, and interface technologies capabilities. Avionics systems designs and develops cockpit systems integration and avionics solutions for commercial and military applications. Control and communication systems designs and manufactures technology interface systems for military and commercial aircraft and land- and sea-based military vehicles. Additionally, control and communication systems designs and manufactures military audio and data products for severe battlefield environments ~~embedded communication intercept receivers for signal intelligence applications, as well as~~and communication control systems to enhance security and aural clarity in military applications. Defense, aerospace and training display (DAT), which will be integrated into our avionics systems and control and communication systems capabilities develops and manufactures visualization solutions for a variety of demanding defense and commercial aerospace applications. Interface technologies manufactures and develops custom control panels, input systems for medical, industrial, military and gaming industries.

The Sensors & Systems segment includes power systems, connection technologies and advanced sensors capabilities. Power systems develops and manufactures electrical power switching and other related systems, principally for aerospace and defense customers. Connection technologies develops and manufactures highly engineered connectors for harsh environments and serves the aerospace, defense & space, power generation, rail and industrial equipment markets. Advanced sensors develops and manufactures ~~high-precision~~high precision temperature and pressure sensors for aerospace and defense customers.

The Advanced Materials segment includes engineered materials and defense technologies capabilities. Engineered materials develops and manufactures thermally engineered components and high-performance elastomer products used in a wide range of commercial aerospace and military applications. Defense technologies develops and manufactures combustible ordnance components and ~~airborne~~warfare countermeasure devices for military customers.

Our current business and strategic plan focuses on the continued development of our products principally for aerospace and defense markets. We are concentrating our efforts to expand our capabilities in these markets and to anticipate the global needs of our customers and respond to such needs with comprehensive solutions. These efforts focus on continuous research and new product development, acquisitions and strategic realignments of operations to expand our capabilities as a more comprehensive supplier to our customers across our entire product offering. Our business has been impacted by reductions in defense spending mainly due to the continued uncertainty of U.S. congressional budget cuts, or sequestration, on defense spending.

On January 31, 2015, we acquired the DAT business of Belgium-based Barco N.V. (Barco) for €150 million net of acquired cash, or approximately $171 million in cash. We financed the acquisition primarily using international cash reserves, with the balance funded by borrowings under our existing credit facility. DAT develops and manufactures visualization solutions for a variety of demanding defense and commercial aerospace applications. DAT employs roughly 600 people in Belgium, France, Israel, Singapore and the U.S. The display business is included in our Avionics & Controls segment. We incurred a $2.9 million foreign currency exchange loss in funding the acquisition at the end of the first fiscal quarter of 2015. We expect to incur approximately $26 million in integration and purchase accounting expenses and the aforementioned foreign currency exchange loss of which will be incurred mainly in fiscal 2015. We estimate that DAT will break even in fiscal 2015, excluding integration and purchase accounting expenses and the above referenced foreign currency loss.

In September 3, 2014, our board of directors approved ~~the~~a plan to sell certain non-core business units including Eclipse Electronic Systems, Inc. (Eclipse), a manufacturer of embedded communication intercept receivers for signal intelligence ~~applications,~~applications; Wallop Defence Systems, Ltd. (Wallop), a manufacturer of flare countermeasure ~~devices,~~devices; Pacific Aerospace and Electronics Inc. (PA&E), a manufacturer of hermetically sealed electrical ~~connectors,~~connectors; and ~~an immaterial~~a small distribution business. These ~~businesses were not separate reporting~~business units as defined under U.S. GAAP and no indicator of impairment existed at August 1, 2014, requiring an impairment test of their corresponding reporting units’ goodwill or these businesses’ long-lived assets. Due to our plan to sell these businesses, during the fourth fiscal quarter of 2014, the assets will be valued at fair value and goodwill of the reporting unit will be allocated to each business unit based upon the relative fair value of the business unit and the reporting unit. Eclipse and the distribution business are included in our Avionics & Controls segment, Wallop is included in our Advanced Materials segment, and PA&E is included in our Sensors & Systems segment. Beginning in our fourth fiscal quarter of 2014, these businesses will be reported as discontinued ~~operations.~~operations for all periods presented. Based upon ~~a range of projected~~the estimated fair values, we ~~expect to incur~~incurred an estimated after-tax loss ~~between $55 million and $75~~of $49.5 million in the fourth ~~fiscal~~ quarter of fiscal 2014 on the assets held for sale in discontinued operations. During the first six months of fiscal 2015 and 2014, we incurred a loss on discontinued operations of $18.6 million and $7.6 million, respectively.

On June 19, 2014, our board of directors approved a share repurchase program and authorized the repurchase of up to $200 million ~~share~~of outstanding shares of common stock. In March 2015, our board of directors authorized an additional $200 million for repurchase of outstanding shares of common stock under the program. Under the program, ~~we are~~the Company is authorized to repurchase up to ~~$200~~$400 million of the outstanding shares of common stock from time to time, depending on market conditions, share price and other factors. During ~~the third~~ fiscal ~~quarter of~~ 2014, we repurchased ~~45,979~~269,228 shares under this program at an average price paid per share of ~~$112.57,~~$112.40, for an aggregate purchase price of ~~$5.2~~$30.3 million. During the first six months of fiscal 2015, we repurchased 1,162,436 shares under this program at an average price paid per share of $109.55, for an aggregate purchase price of $127.3 million.

In March 2014, we entered into a Consent Agreement with the U.S. Department of State’s Directorate of Defense Trade Controls Office of Defense Trade Controls Compliance (DDTC) to resolve alleged International Traffic in Arms Regulations (ITAR) civil violations. Among other things, the Consent Agreement requires us to pay a $20 million penalty, of which $10 million was suspended and eligible for offset credit based upon verified expenditures for past and future remedial actions, and to continue to implement ongoing compliance remedial measures and to implement additional remedial measures related to ITAR compliance activities. As a result of these remedial measures, compliance expense was $7.9 million in the first six months of fiscal 2015 compared with $4.6 million in the same period in fiscal 2014. We estimate that compliance expense will be $15 million for fiscal 2015. More information about the Consent Agreement is set forth in Note 9 to the Consolidated Financial Statements included in Part 1, Item 1 of this report.

On December 20, 2013, we acquired ~~the~~ Sunbank Family of Companies, LLC (Sunbank) for $51.7 million. The purchase price included $5 million in additional contingent consideration based upon achievement of certain sales levels over a two-year period. Sunbank is a manufacturer of electrical cable accessories, connectors and flexible conduit systems. Sunbank is included in the Sensors & Systems segment.

On December 5, 2013, we announced the acceleration of our plans to consolidate certain facilities and create cost efficiencies through shared services in sales, general and administrative and support functions. ~~Our~~For fiscal 2014 and 2015 our integration activities are expected to result in aggregate charges and expenses of ~~approximately $40 million over the next two years. We expect to incur costs of $20 million to $25~~$35 million. Total restructuring expenses were $20.4 million in fiscal ~~2014, with the balance to be incurred~~2014. Restructuring expenses in fiscal ~~2015. The costs include~~2014 were mainly comprised of $5.7 million in severance and $11.9 million in exit and relocation of facilities expenses, and ~~losses from~~a $2.8 million loss on the write off of certain property, plant and equipment. Total restructuring expenses in the first six months of fiscal 2015 were $7.3 million, of which $4.0 million was reported separately as restructuring expenses and $3.3 million was reported as cost of goods sold. Total restructuring expenses in the first six months of fiscal 2014 were $8.9 million, of which $6.9 million was reported separately as restructuring expenses and $2.0 million was reported as cost of goods sold. Expense savings were $6.7 million in the first six months of fiscal 2015.

Total sales in the second fiscal quarter of 2015 have decreased 2% over the prior-year period to $500.1 million, mainly reflecting the effect of a weakening Canadian dollar, U.K. pound and euro relative to the U.S. dollar. The effect of weakening foreign currencies had a $29 million, or 6%, impact on ~~short-cycle activities will commence~~sales in the second fiscal ~~2014,~~quarter compared with ~~substantially~~the prior-year period. The decrease in total sales by segment principally reflected lower Sensors & Systems segment and Advanced Materials segment sales due to lower demand from defense and industrial commercial customers, partially offset by $31 million in incremental sales from the acquisition of DAT. Excluding the foreign currency exchange effects and the other items listed in the table at the end of this “Overview” section, sales volume decreased $6 million compared with the prior-year periods.

Consolidated gross margin decreased to 32.7% in the second fiscal quarter of 2015 compared with 35.1%, in the prior-year period. Gross margin in the second quarter of fiscal 2015 was impacted by weakening foreign currencies, unfavorable estimate at completion (EAC) adjustments for certain long-term development contracts, and the impact from settlement of forward contracts in the period that qualify for hedge accounting. Additionally, gross margin was impacted by an inventory fair value adjustment due to the shipment of acquired DAT inventory recorded at fair value. Gross margin declined at both Avionics & Controls and Advanced Materials and improved at Sensors & Systems, reflecting a favorable sales mix.

Selling, general and administrative expense increased by $8.7 million and by 2.1 percentage points over the prior-year period to 20.1% of sales, reflecting incremental selling, general and administrative expenses from the acquisition of DAT of $8.9 million and certain incremental expense matters, including acquisition costs of $2.4 million and incremental remedial compliance costs of $1.8 million. These increases were partially offset by the favorable effects of foreign currencies.

Research, development and engineering spending increased by $1.5 million over the prior-year period to 5.4% of sales due to incremental research, development and engineering expenses from the acquisition of DAT of $3.7 million, partially offset by lower spending for Sensors & Systems research, development and engineering.

The effective income tax rate was 17.3% in the second fiscal quarter of 2015 compared with 20.3% in the prior-year period, mainly reflecting additional tax benefits resulting from DAT integration expenses.

Earnings from continuing operations in the second fiscal quarter of 2015 were $21.6 million, or $0.69 per diluted share, compared with $40.6 million, or $1.25 per diluted share, in the prior-year period. Loss from discontinued operations in the second fiscal quarter of 2015 was $1.8 million, or $0.06 per diluted share, compared with $3.7 million, or $0.11 per diluted share, in the prior-year period. Net income in the second fiscal quarter was $19.8 million, or $0.63 per diluted share, compared with $36.9 million, or $1.14 per diluted share, in the prior-year period.

Total sales in the first six months of fiscal 2015 decreased 5.1% to $946.4 million compared with $996.8 million in the prior-year period, mainly reflecting the effect of a weakening Canadian dollar, U.K. pound and euro. The effect of weakening foreign currencies had a $39 million, or 4%, impact on sales in the first six months of fiscal 2015 compared with the prior-year period. Additionally, the

~~more savings projected~~decrease in sales reflected a 26-week period in the first six months of fiscal ~~2015. We expect these projects~~2015 compared to ~~result~~a 27-week period in ~~savings~~the prior-year period, resulting in ~~excess of $15 million annually commencing~~a reduction in ~~fiscal 2016. The projects have payback periods~~sales of approximately ~~two years.~~$37 million, or 4%. These decreases were partially offset by incremental sales from the DAT acquisition of $31 million. Excluding the foreign currency exchange effects and the other items listed in the table at the end of this “Overview” section, sales volume increased $5 million compared with the prior-year period.

Consolidated gross margin decreased to 32.6% in the first six months of fiscal 2015 compared with 35.1% in the prior-year period. Gross margin was mainly impacted by the effect of weakening foreign currencies, the 26-week versus 27-week impact, an unfavorable EAC for certain long-term development contracts, and the impact from the settlement of our foreign currency forward contracts in the period. Additionally, gross margin was impacted by an inventory fair value adjustment due to the shipment of acquired DAT inventory recognized at fair value. Gross margin was also impacted by unfavorable sales mix at Avionics & Controls and Advanced Materials.

Selling, general and administrative expense increased by $13.2 million and by 2.4 percentage points over the first six months of fiscal 2014 to 20.5% of sales, reflecting incremental selling, general and administrative expenses from the DAT acquisition of $8.9 million, acquisition costs of $3.0 million, higher remedial compliance costs of $3.9 million, a $2.1 million write off of fixed assets due to uncertainty over a cockpit integration program, and a $3.0 million pension settlement related to our settlement with terminated vested pension plan participants.

Research, development and engineering spending decreased by $1.7 million over the first six months of fiscal 2014 to 5.2% of sales. The decrease in research, development and engineering spending principally reflects lower spending on control and communication systems development, partially offset by incremental research, development and engineering expense from the DAT acquisition of $3.7 million. These increases were partially offset by the favorable effects of foreign currencies.

During the first six months of fiscal 2015, we recognized a $15.7 million gain in other income and a $2.4 million reduction in interest expense upon the lapse of a statutory period related to a liability for a non-income tax position of an acquired company. In addition, we incurred a $2.9 million loss in other income on foreign currency exchange resulting from the funding of the acquisition of DAT.

The effective income tax rate was 21.3% in the first six months of fiscal 2015 compared to 20.2% in the prior-year period, mainly reflecting higher discrete income tax benefits in the prior-year period.

Earnings from continuing operations in the first six months of fiscal 2015 were $46.7 million, or $1.46 per diluted share, compared with $74.5 million, or $2.30 per diluted share, in the prior-year period. Loss from discontinued operations in the first six months of fiscal 2015 was $18.6 million, or $0.58 per diluted share, compared with $7.6 million, or $0.23 per diluted share, in the prior-year period. Net income in the first six months of fiscal 2015 was $28.1 million, or $0.88 per diluted share, compared with $67.0 million, or $2.07 per diluted share, in the prior-year period.

Cash flows from operating activities were $55.7 million in the first six months of fiscal 2015 compared with $84.5 million in the prior-year period. The decrease in cash flow from operating activities reflected lower net earnings and lower cash receipts on collections of accounts receivable compared to the prior-year period.

Our sales, gross margin and earnings results for the three month and six month period ended May 1, 2015, compared with the three month and six month period ended May 2, 2014, included a number of significant items which are summarized in the tables below.

The following is a roll forward of sales and gross margin from the three month period ending May 2, 2014, to the three month period ending May 1, 2015:

The following is a roll forward of sales and gross margin from the six month period ending May 2, 2014, to the six month period ending May 1, 2015:

Three Month Period Ended May 1, 2015, Compared with Three Month Period Ended May 2, 2014

Sales for the second fiscal quarter decreased by $10.8 million, or 2.1%, over the prior-year period. The effect of a weakening Canadian dollar, U.K. pound and euro had a $29 million, or 6%, impact on sales in the second fiscal quarter compared with the prior-year period. This decrease was offset by $31 million in incremental sales from the DAT acquisition. Sales by segment were as follows:

The 14.1% increase in sales of Avionics & Controls was due to incremental sales from the DAT acquisition. This increase was partially offset by the effect of weakening foreign currencies, which reduced segment sales by $5 million compared with the prior-year period. The impact of the settlement of forward foreign currency contracts qualifying under hedge accounting reduced sales by $4 million. Sales volume increased $4 million reflecting higher sales of switches and cockpit control devices and communication systems to enhance security and aural clarity in military communications of $6 million, as well as higher sales of interface technologies of $3 million, partially offset by lower sales of avionics systems of $5 million.

The effect of weakening foreign currencies impacted Sensors & Systems sales by approximately $20 million compared with the prior-year period. The impact of forward contracts under hedge accounting reduced sales by $3 million. Sales volume decreased $5 million, reflecting lower sales of connection technologies of $6 million due to lower demand from industrial customers, including oil & gas and nuclear. Additionally, power systems sales decreased $3 million due to lower sales to rail customers, partially offset by higher aftermarket sales. A $3 million increase in advanced sensors sales was due to higher aftermarket sales, partially offset by lower sales to OEM customers.

The effect of weakening foreign currencies impacted Advanced Material sales by $3 million compared with the prior-year period. Sales volume decreased $5 million, reflecting decreased sales volumes of engineered materials of $2 million due lower aftermarket sales and completion of a long-term contract in the prior-year period. A $3 million decrease in sales of defense technologies was mainly due to lower demand for countermeasures.

Overall, gross margin was 32.7% and 35.1% for the second fiscal quarter of 2015 and 2014, respectively. Gross profit was $163.7 million and $179.2 million for the second fiscal quarter of 2015 and 2014, respectively. Gross margin was also impacted by $1.4 million in restructuring expense in the second fiscal quarter of both 2015 and 2014.

Avionics & Controls segment gross margin was 29.2% and 36.9% for the second fiscal quarter of 2015 and 2014, respectively. Segment gross profit was $61.5 million compared with $68.1 million in the prior-year period. Gross margin was impacted by the effects of weakening foreign currencies of $2 million and the impact from settlement forward contracts of $4 million. Additionally, avionics systems gross margin was impacted by a $4.9 million estimate at completion adjustment due to development program realignments. The decrease gross margin was also impacted by a fair value adjustment on acquired inventory of $2.7 million, which lowered incremental gross profit from $8.6 million to $6 million. Control and communication systems was impacted by a $0.5 million inventory write-off due to a program reassessment.

Sensors & Systems segment gross margin was 36.3% and 32.7% for the second fiscal quarter of 2015 and 2014, respectively. Segment gross profit was $64.1 million compared with $67.1 million in the prior-year period. Gross margin was impacted by the effects of weakening foreign currencies of $4 million and the impact from settlement of forward contracts of $3 million. These declines were partially offset by a $4 million increase in gross margin due to higher aftermarket sales and lower manufacturing costs of power systems.

Advanced Materials segment gross margin was 33.6% compared with 36.3% for the prior-year period. Segment gross profit was $38.0 million compared with $44.0 million in the prior-year period. The decrease in gross margin reflected $5 million in lower sales of engineered materials for defense applications and less favorable sales mix.

Selling, general and administrative expenses (which include corporate expenses) totaled $100.7 million, or 20.1% of sales, and $92.0 million, or 18.0% of sales, for the second fiscal quarter of 2015 and 2014, respectively. The increase in selling, general and administrative expenses reflected incremental selling, general and administrative expenses from the DAT acquisition of $8.9 million, $2.4 million in related acquisition expenses, and an increase of $1.8 million in remedial compliance costs over the prior-year period. These increases were partially offset by the effect of translating selling, general and administrative expenses denominated in non-U.S. functional currencies to the U.S. dollar of $7 million.

Research, development and engineering spending was $27.0 million, or 5.4% of sales, for the second fiscal quarter of 2015 compared with $25.5 million, or 5.0% of sales, for the second fiscal quarter of 2014. The increase in research, development and engineering spending principally reflected incremental research, development and engineering from the DAT acquisition of $8.9 million, substantially offset by lower spending on control and communication systems development.

Total restructuring expenses were ~~$5.4~~$2.3 million, or ~~1.0%~~0.5% of sales, in the ~~third~~second fiscal quarter of 2015, of which $0.9 million is reported separately as restructuring expenses and $1.4 million is included in cost of goods sold. Total restructuring expenses were $3.5 million, or 0.7% of sales, in the second fiscal quarter of 2014, of which $2.1 million is reported separately as restructuring expenses and $1.4 million is included in cost of goods sold.

Segment earnings (operating earnings excluding corporate expenses and other income or expense) for the second fiscal quarter of 2015 totaled $57.0 million, or 11.4% of sales, compared with $76.6 million, or 15.0% of sales, for the second fiscal quarter in 2014. Excluding restructuring expenses of $2.1 million and $3.3 million, segment earnings were $59.1 million, or 11.8% of sales, and $80.0 million, or 15.7% of sales, for the second fiscal quarters of 2015 and 2014, respectively.

Avionics & Controls segment earnings were $9.4 million, or 4.5% of sales, in the second fiscal quarter of 2015 and $23.3 million, or 12.6% of sales, in the second fiscal quarter of 2014, mainly reflecting a $12 million decrease in avionics systems, a $7 million incremental loss from the DAT acquisition, partially offset by a $5 million increase in control and communication systems earnings. Avionics systems earnings were impacted by lower gross profit as explained above. The increase in earnings from sales of control and communication systems principally reflected lower selling, general and administrative expenses and research, engineering and development expense. Restructuring expenses were $0.5 million and $1.1 million in the second fiscal quarter of 2015 and 2014, respectively. The effect of foreign currencies on segment earnings was a loss of $4 million in the second fiscal quarter of 2015 compared to the prior-year period.

Sensors & Systems segment earnings were $22.6 million, or 12.8% of sales, for the second fiscal quarter of 2015 compared with $23.1 million, or 11.3% of sales, for the second fiscal quarter of 2014. Sensors & Systems earnings were mainly impacted by lower gross profit as explained above partially offset by lower selling, general and administrative expenses mainly due to translating selling, general and administrative expenses denominated in non-U.S. functional currencies to the U.S. dollar. Restructuring expenses were $1.5 million and $1.7 million in the second fiscal quarter of 2015 and 2014, respectively. The effect of foreign currencies on segment earnings was a gain of $1 million in the second fiscal quarter of 2015 compared to the prior-year period.

Advanced Materials segment earnings were $25.0 million, or 22.1% of sales, for the second fiscal quarter of 2015 compared with $30.2 million, or 24.9% of sales, for the second fiscal quarter of 2014, primarily reflecting lower earnings from sales of engineered materials. Restructuring expenses were $1.1 million and $0.5 million in the second fiscal quarter of 2015 and 2014, respectively. The effect of foreign currencies was not material on segment earnings in the second fiscal quarter of 2015 compared to the prior-year period.

Interest expense for the second fiscal quarter of 2015 was $8.6 million compared with $8.4 million for the second fiscal quarter of 2014, reflecting higher borrowings and a lower overall interest rate.

The income tax rate was 17.3% in the second fiscal quarter of 2015 compared with 20.3% in the prior-year period. In the second fiscal quarter of 2015, we recognized $0.3 million of discrete tax expense principally related to reconciling the prior year’s income tax return to the income tax provision. In the second fiscal quarter of 2014, we recognized $0.6 million of discrete tax benefits principally related to the release of reserves due to the expiration of a statute of limitations. The income tax rate differed from the statutory rate in the second fiscal quarter of 2015 and 2014, as both years benefited from various tax credits and certain foreign interest expense deductions.

Six Month Period Ended May 1, 2015, Compared with Six Month Period Ended May 2, 2014

Sales for the first six months decreased 5.1% over the prior-year period principally due to the effect of a weakening Canadian dollar, U.K. pound and euro, which had a $39 million, or 4%, impact on sales in the six month period ended May 1, 2015, compared with the prior-year period. Additionally, the decrease in sales reflected a 26-week period in the first six months period ended May 1, 2015, compared to a 27-week period in the prior-year period, resulting in a reduction in sales of approximately $37 million, or 4% of sales. These decreases were partially offset by $31 million in incremental sales from the DAT acquisition. Sales by segment were as follows:

The 2.3% increase in sales of Avionics & Controls was due to incremental sales of $31 million from the DAT acquisition and a $7 million increase in control and communication systems, reflecting higher sales of switches and cockpit control devices and communication systems to enhance security and aural clarity in military communications. These increases were substantially offset by the 26-week versus 27-week impact which reduced sales by $14 million, the effect of foreign currencies, which reduced segment sales by $3 million compared with the prior-year period, and the impact of forward contracts under hedge accounting which reduced sales by $6 million. In addition, a $9 million decrease in avionics systems principally reflected lower demand for aviation products for defense applications.

The 12.1% decrease in sales of Sensors & Systems mainly reflected the 26-week versus 27-week impact of $14 million, the effect of foreign currencies of $31 million, and the impact of forward contracts under hedge accounting of $4 million. A $4 million decrease in sales of connection technologies reflected lower demand from industrial customers including oil and gas. These decreases were offset by a $7 million increase in advanced sensors aftermarket sales.

The 5.2% decrease in sales of Advanced Materials reflected the 26-week versus 27-week impact of $9 million and the effect of foreign currencies of $5 million. A $1 million increase in sales volume reflected a $5 million increase in sales of engineered materials, substantially offset by lower sales of countermeasures.

Overall, gross margin as a percentage of sales was 32.7% and 35.1% for the first six months of fiscal 2015 and 2014, respectively. Gross profit was $309.0 million and $350.0 million for the first six months of fiscal 2015 and 2014, respectively. Gross margin was impacted by $3.3 million and $2.0 million in restructuring expense in the first six months of fiscal 2015 and 2014, respectively.

Avionics & Controls segment gross margin was 31.0% and 37.1% for the first six months of fiscal 2015 and 2014, respectively. Segment gross profit was $120.0 million compared with $140.4 million in the prior-year period. Gross margin was impacted by the 26-week versus 27-week impact of $4 million and the impact from the settlement of forward contracts of $6 million. Additionally, avionics systems gross profit was impacted by a $1.4 million inventory write-off due to the uncertainty over a specific cockpit integration program and a $6 million estimate at completion adjustment due to development program realignments. Additionally, avionics systems gross margin was impacted by lower sales and unfavorable mix of aviation products for defense applications of $6 million. Control and communication systems was impacted by a $1.8 million inventory write-off due to a program reassessment. These decreases were partially offset by incremental gross profit from the DAT acquisition of $6 million, which was impacted by the shipment of acquired inventory valued at fair value at acquisition. A fair value adjustment of $2.7 million lowered incremental gross profit from DAT from $8.7 million to $6 million. Gross margin was favorably impacted by the effects of weakening foreign currencies of $0.5 million.

Sensors & Systems segment gross margin was 35.1% and 33.8% for the first six months of fiscal 2015 and 2014, respectively. Segment gross profit was $119.2 million compared with $130.9 million in the prior-year period. Gross margin was impacted by the 26-week versus 27-week impact of $5 million, the effects of foreign currencies of $5 million and the impact from the settlement of forward contracts of $4 million. A $6 million increase in gross profit due to volume and mix mainly reflected lower manufacturing costs of connection technologies, and power systems was partially offset by a $2.2 million increase in restructuring costs.

Advanced Materials segment gross margin was 31.8% for the first six months of fiscal 2015 compared with 34.0% for the same period one year ago. Segment gross profit was $69.8 million compared with $78.6 million in the prior-year period. Gross margin was impacted by the 26-week versus 27-week impact of $3 million and the effects of foreign currencies of $1 million. A $5 million decrease in volume/mix reflected lower sales of engineered materials for defense applications and a lower recovery of fixed costs.

Selling, general and administrative expenses (which include corporate expenses) totaled $194.4 million, or 20.5% of sales, and $181.2 million, or 18.2% of sales, for the first six months of fiscal 2015 and 2014, respectively. The increase in selling, general and administrative expense reflected $3.9 million in remedial compliance costs, incremental selling, general and administrative expenses from the DAT acquisition of $8.9 million, $3 million in related acquisition expenses, a $2.1 million write-off of fixed assets due to an avionics systems program realignment, and $3 million in higher pension costs due to our settlement with vested terminated pension plan participants. These increases were partially offset by the effect of translating selling, general and administrative expenses denominated in non-U.S. functional currencies to the U.S. dollar of $11 million. In fiscal 2014, we offered vested terminated participants of our U.S. pension plan a one-time opportunity to elect a lump-sum payment from the plan in lieu of a lifetime annuity. In the first fiscal quarter of 2015, we made $16.6 million in lump-sum payments to vested terminated pension plan participants from the plan, which resulted in an actuarial estimated settlement charge of $3.0 million.

Total restructuring expenses were $7.3 million, or 0.7% of sales, in the first six months of fiscal 2015, of which $3.9 million is reported separately as restructuring expenses and $3.4 million is included in cost of goods sold. Total restructuring expenses were $8.9 million, or 0.8% of sales, in the first six months of fiscal 2014, of which $6.9 million is reported separately as restructuring expenses and $2.0 million is included in cost of goods sold. Restructuring expenses were mainly comprised of $4.0 million of exit and relocation of facilities expenses and $1.3 million in severance. Total restructuring expenses were $14.3 million, or 0.9% of sales, in the first nine months of fiscal 2014, of which $10.3 million is reported separately as restructuring expenses and $4.0 million is included in cost of goods sold. Restructuring expenses were mainly comprised of $4.9 million in severance, $6.9 million in exit and relocation of facilities expenses, and a $2.6 million loss on the write off of certain property, plant and equipment.

On February 4, 2013, we acquired the Gamesman Group (Gamesman) for $40.8 million. Gamesman is a global supplier of input devices principally serving the gaming industry. Gamesman is included in the Avionics & Controls segment.

For the third fiscal quarter of 2014, earnings from continuing operations were $38.9 million, or $1.19 per diluted share, compared to $39.2 million, or $1.23 per diluted share, in the third fiscal quarter of 2013.

For the third fiscal quarter of 2014, sales increased 11.1% to $531.1 million compared to the prior-year period. Gross margin for the third fiscal quarter of 2014 was 34.4% compared with 37.4% in the prior-year period. Gross margin was lower across all three segments. Research, development and engineering spending in the third fiscal quarter of 2014 decreased 0.3 percentage points over the prior-year period to 4.7% of sales. Selling, general and administrative expense, as a percent of sales, in the third fiscal quarter of 2014 decreased 3.4 percentage points over the prior-year period to 17.9% of sales.

During the third fiscal quarter of 2013, we recorded a $3.5 million, or $0.11 per diluted share, impairment charge against goodwill of Racal Acoustics, Ltd. (Racal Acoustics), our military headset business, which is included in our Avionics & Controls segment. The results for the third fiscal quarter of 2013 also were impacted by a $10 million charge, or $0.31 per diluted share, related to the Directorate of Defense Trade Controls (DDTC) matter for which we entered into a Consent Agreement in March 2014.

The income tax rate was 22.7% compared with 2.8% for the third fiscal quarter of 2014 and 2013, respectively. In the third fiscal quarter of 2014, we recognized $0.3 million of discrete income tax benefits and $8.7 million of discrete income tax benefits in the prior-year period.

~~For the third fiscal quarter of 2014, net earnings were $38.9 million, or $1.19 per diluted share, compared to $38.2 million, or $1.20 per diluted share, in the third fiscal quarter of 2013.~~

For the first nine months of fiscal 2014, earnings from continuing operations were $106.2 million, or $3.28 per diluted share, compared to $99.8 million, or $3.15 per diluted share, during the prior-year period.

Sales increased by 9.1% to $1.6 billion in the first nine months of fiscal 2014, reflecting higher Avionics & Controls, Sensors & Systems, and Advanced Materials sales compared with the prior-year period. The increase in Advanced Materials sales reflected higher sales of engineered materials and weaker sales of defense technologies. Our sales were impacted by uncertainty with respect to future defense spending, which has resulted in delays in the release of orders. The impact of this uncertainty is yet to be fully determined, and lack of clarity will likely result in downward pressure for some period of time.

~~Gross margin decreased to 34.4% in the first nine months of fiscal 2014 compared with 36.3% in the prior-year period. This was due to lower gross margins across all three segments.~~

Research, development and engineering spending in the first nine months of fiscal 2014 increased $5.6 million over the prior-year period to $78.4 million, or 5.0% of sales. Selling, general and administrative expense, as a percent of sales, in the first nine months of fiscal 2014 decreased 2.3 percentage points over the prior-year period to 18.5% of sales.

During the first nine months of fiscal 2013, earnings from continuing operations were impacted by a $3.5 million, or $0.11 per diluted share, impairment charge against goodwill of Racal Acoustics, our military headset business. For the first nine months of fiscal 2013, earnings were also impacted by a $10 million charge, or $0.32 per diluted share, related to our matter with the DDTC as referred to above.

The income tax rate was 20.6% and 11.4% for the first nine months of fiscal 2014 and 2013, respectively. In the first nine months of fiscal 2014 and 2013, we recognized $1.4 million and $12.4 million, respectively, in discrete income tax benefits.

~~For the first nine months of fiscal 2014, net earnings were $105.9 million, or $3.27 per diluted share, compared to $98.9 million, or $3.12 per diluted share, during the prior-year period.~~

During the third fiscal quarter of 2014, the U.S. and other countries expanded the sanctions against Russia, which increased the restrictions on sales of certain products, including aviation products, to Russia and to specified restricted parties in or affiliated with Russia. Our Avionics & Controls and Sensors & Systems segments have programs with Russian customers. We evaluated the impact of these sanctions and determined that during the third fiscal quarter of 2014, the impact from Canadian, European Union and U.S. sanctions against Russia on our sales to Russia was not material. We are currently evaluating the effects of these sanctions on our future operating results, but we could have material impacts on our sales to Russia in future periods due to these sanctions.

~~Three Month Period Ended August 1, 2014, Compared with Three Month Period Ended July 26, 2013~~

~~Sales for the third fiscal quarter increased 11.1% over the prior-year period. Sales by segment were as follows:~~

The 11.4% increase in sales of Avionics & Controls mainly reflected higher sales volumes of control and communication systems and interface technologies of $18 million. Control and communication sales increased $11 million due to increased sales of cockpit controls for OEM commercial aviation applications. Interface technologies sales increase was mainly due to higher sales to gaming customers.

The 12.6% increase in Sensors & Systems principally reflected increased sales of connection technologies and $10 million from incremental sales from the Sunbank acquisition in December 2013. Advanced sensors sales increased $2 million on improved OEM sales partially offset by lower aftermarket sales. Power systems sales increased $4 million mainly due to higher commercial aviation demand. Segment sales also benefited from a stronger euro and U.K. pound relative to the U.S. dollar compared with the prior-year period.

The 8.4% increase in sales of Advanced Materials principally reflected increased sales volumes of engineered materials of $11 million, partially offset by decreased sales volumes of defense technologies. The increase in engineered materials mainly reflected higher sales for defense and commercial aviation applications. The decrease in defense technologies sales volumes was due to lower demand for combustible ordnance and flare countermeasure devices.

Overall, gross margin as a percentage of sales was 34.4%, compared with 37.4% in the same period a year ago. Gross profit was $182.5 million compared with $178.9 million in the same period a year ago. Gross margin was impacted by $2.0 million in restructuring expense in the third fiscal quarter of 2014.

Avionics & Controls segment gross margin was 36.8% and 39.4% for the third fiscal quarter of 2014 and 2013, respectively. Segment gross profit was $73.7 million compared with $70.7 million in the prior-year period. The increase in segment gross profit principally reflected higher gross profit on sales of control and communication systems of $5 million, partially offset by a $2 million decrease in gross profit on sales of avionics systems. The increase in gross profit on cockpit control devices was mainly due to higher gross margin on sales of secure communication systems due to a favorable estimate at completion adjustment on a long-term contract. The decrease in the segment gross margin percentage mainly reflected lower gross margins on sales of avionics systems and interface technologies. Avionics systems gross margin was impacted by a $3 million increase in an estimate at completion for long-term contracts for updated flight management systems, and interface technologies gross margin was impacted by an unfavorable sales mix.

Sensors & Systems segment gross margin was 33.0% and 36.4% for the third fiscal quarter of 2014 and 2013, respectively. Segment gross profit was $65.4 million compared with $64.0 million in the prior-year period. The decrease in the segment gross margin percentage reflected lower aftermarket sales of advanced sensors and higher operating expenses at our advanced sensors operations. Additionally, connection technologies gross margin was impacted by lower connector sales for defense applications.

Advanced Materials segment gross margin for the third fiscal quarter of 2014 was 32.6% compared with 36.1% for the prior-year period. Segment gross profit was $43.4 million compared with $44.2 million in the prior-year period. Gross profit in the third fiscal quarter of 2014 compared to the prior-year period reflected higher sales volumes of engineered materials for defense applications, offset by lower gross profit on decreased sales volumes of combustible ordnance and flare countermeasure devices. Gross margin

~~declined in the third fiscal quarter of 2014 due to lower sales of combustible ordnance and lower yields on flare countermeasure devices.~~

Selling, general and administrative expenses (which include corporate expenses) totaled $95.3 million, or 17.9% of sales, and $101.8 million, or 21.3% of sales, for the third fiscal quarter of 2014 and 2013, respectively. The decrease mainly reflected the $10 million charge for the DDTC matter recorded in the prior-year period, partially offset by $2 million in incremental compliance expense in the third fiscal quarter of 2014.

Research, development and engineering spending was ~~$25.1~~$49.5 million, or ~~4.7%~~5.2% of sales, for the ~~third~~first six months of fiscal ~~quarter of 2014~~2015 compared with ~~$24.1~~$51.2 million, or ~~5.0%~~5.1% of sales, for the ~~third~~first six months of fiscal ~~quarter~~2014. The decrease in research, development and engineering spending principally reflects lower spending on control and communication systems developments, partially offset by incremental research, development and engineering expense from the DAT acquisition of ~~2013.~~

$4 million. Fiscal 2015 research, development and engineering spending is expected to be in the range of approximately 5% of sales.

Segment earnings (operating earnings excluding corporate expenses and other income or expense) for the ~~third~~first six months of fiscal ~~quarter of 2014~~2015 totaled ~~$74.8~~$102.2 million, or ~~14.1%~~10.7% of sales, compared with ~~$70.3~~$143.0 million, or ~~14.7%~~14.3% of sales, for the ~~third~~first six months in fiscal ~~quarter in 2013.~~2014. Excluding restructuring expenses of ~~$5.1~~$6.9 million, segment earnings were ~~$79.9~~$109.1 million, or ~~15.0%~~11.5% of sales, for the ~~third fiscal quarter~~first six months of ~~2014. In the third fiscal quarter~~2015. Excluding restructuring expenses of ~~2013, we recorded an impairment charge of $3.5~~$8.7 million, ~~against goodwill of Racal Acoustics. Excluding the impairment charge recorded,~~ segment earnings ~~totaled $73.8~~were $151.7 million, or ~~15.4%~~15.2% of sales, for the ~~third fiscal quarter~~first six months of ~~2013.~~

Avionics & Controls segment earnings were ~~$29.1~~$28.6 million, or ~~14.5%~~7.4% of sales, in the ~~third~~first six months of fiscal ~~quarter of 2014 compared with $20.6~~2015 and $51.1 million, or ~~11.5%~~13.5% of sales, in the ~~third~~first six months of fiscal ~~quarter of 2013,~~2014, mainly reflecting ~~an $11~~a $16 million decrease in avionics systems, a $7 million incremental loss from the DAT acquisition, partially offset by a $2 million increase in control and communication systems partially offset by a $3 million decrease in avionics systems. Control and communication systems earnings benefited from increased earnings on higher sales and margins of cockpit control devices and improved earnings from sales of secure communication devices. Additionally, the third fiscal quarter of 2013 reflected an impairment charge of $3.5 million against goodwill of Racal Acoustics. Excluding the impairment charge, Avionics & Controls segment earnings were $24.1 million, or 13.4% of sales, in the third fiscal quarter of 2013.earnings. Avionics systems earnings were impacted by ~~an unfavorable estimate at completion adjustment.~~

lower gross profit as explained above and partially offset by lower selling, general and administrative expenses. The increase in earnings from sales of control and communication systems principally reflected lower research, engineering and development expense and selling, general and administrative expenses. Segment restructuring expenses were $0.5 million and $3.4 million in the first six months of fiscal 2015 and 2014, respectively. The effect of foreign currencies on segment earnings was not material in the first six months of fiscal 2015 compared to the prior-year period.

Sensors & Systems segment earnings were ~~$18.2~~$32.1 million, or ~~9.2%~~9.4% of sales, for the ~~third~~first six months of fiscal ~~quarter of 2014~~2015 compared with ~~$21.6~~$43.8 million, or ~~12.3%~~11.3% of sales, for the ~~third~~first six months of fiscal ~~quarter~~2014. The decrease in segment earnings principally reflected an $8 million decrease in earnings from sales of ~~2013. Sensors & Systems earnings~~connection technologies and a $2 million decrease in advanced sensors due to decreased gross profit as explained above. Additionally, segment restructuring expenses were ~~impacted by $3.3~~$4.5 million and $2.2 million in ~~restructuring expense~~the first six months of fiscal 2015 and ~~by lower aftermarket sales~~2014, respectively. The effect of ~~engine sensors.~~

foreign currencies on segment earnings was not material in the first six months of fiscal 2015 compared to the prior-year period.

Advanced Materials segment earnings were ~~$27.5~~$41.5 million, or ~~20.7%~~18.9% of sales, for the third fiscal quarter of 2014 compared with $28.1 million, or 22.9% of sales, for the third fiscal quarter of 2013, primarily reflecting lower earnings from sales of flare countermeasures of $5 million. This decrease in segment earnings from lower sales of countermeasures was substantially offset by increased earnings on higher sales of elastomer materials for defense applications.

~~Interest expense for the third fiscal quarter of 2014 was $7.9 million compared with $9.1 million for the third fiscal quarter of 2013, reflecting reduced borrowings.~~

The income tax rate was 22.7% for the third fiscal quarter of 2014 compared with 2.8% for the third fiscal quarter of 2013. In the third fiscal quarter of 2014, we recognized $0.3 million of discrete income tax benefits. In the third fiscal quarter of 2013, we recognized $8.7 million of discrete tax benefits principally related to the following items. The first item was a $4.3 million income tax benefit related to the release of income tax reserves due to the expiration of applicable statutes of limitations. The second item was a $3.8 million reduction of net deferred income tax liabilities as a result of the enactment of tax laws reducing the U.K. statutory income tax rate. The income tax rate differed from the statutory rate in the third fiscal quarter of 2014 and 2013, as both quarters benefited from various tax credits and certain foreign interest expense deductions.

~~To the extent that sales are transacted in a currency other than the functional currency of the operating unit, we are subject to foreign currency fluctuation risk.~~

We use forward contracts to hedge our foreign currency exchange risk. To the extent that these contracts qualify as hedges under U.S. GAAP, the amount of gain or loss is deferred in Accumulated Other Comprehensive Income (AOCI) until the related sale occurs. Also, we are subject to foreign currency gains or losses from embedded derivatives on backlog denominated in a currency other than the functional currency of our operating companies or its customers. Gains and losses on forward contracts, embedded derivatives, and revaluation of assets and liabilities denominated in a currency other than the functional currency of the Company for the three-month periods ended August 1, 2014, and July 26, 2013, are as follows:

~~Nine Month Period Ended August 1, 2014, Compared with Nine Month Period Ended July 26, 2013~~

~~Sales for the first nine~~six months of fiscal 2014 increased by 9.1% over the prior-year period, reflecting 40 weeks in the first nine months in fiscal 2014 and 39 weeks in the prior-year period and incremental sales from the Sunbank acquisition. Sales by segment were as follows:

The 9.1% increase in sales of Avionics & Controls mainly reflected increased sales volumes of control and communication systems and interface technologies. A $28 million increase in interface technologies sales mainly reflected incremental sales from the Gamesman acquisition. A $16 million increase in control and communication systems sales mainly reflected increased sales volumes of control panels and switches of $13 million for OEM commercial aviation applications. Additionally, the increase reflected higher sales volumes of secure communication devices of $7 million. These increases were partially offset by lower sales volumes of controls and grips.

The 13.6% increase in sales of Sensors & Systems principally reflected increased sales of connection technologies of $49 million and power systems of $14 million. The increase in connection technologies reflected incremental sales from the Sunbank acquisition of $23 million and higher sales volumes of connection technologies for commercial aviation and industrial applications. The increase in power systems sales mainly reflected higher OEM sales for commercial aviation applications. Advanced sensors sales increased $8 million on improved OEM sales partially offset by lower aftermarket sales. Segment sales also benefited from a stronger euro and U.K. pound relative to the U.S. dollar2015 compared with ~~the prior-year period.~~

The 2.4% increase in sales of Advanced Materials principally reflected increased sales of engineered materials for defense and commercial aviation applications of $27 million, partially offset by lower sales volumes of defense technologies of $18 million.

Overall, gross margin as a percentage of sales was 34.4% and 36.3% for the first nine months of fiscal 2014 and 2013, respectively. Gross profit was $538.1 million and $520.6 million for the first nine months of fiscal of 2014 and 2013, respectively. Gross margin was impacted by $4.0 million in restructuring expense in the first nine months of fiscal 2014.

Avionics & Controls segment gross margin was 36.6% and 37.6% for the first nine months of fiscal 2014 and 2013, respectively. Segment gross profit was $218.0 million compared with $205.4 million in the prior-year period, reflecting a $14 million increase on gross profit from sales of avionics systems and interface technologies. Gross profit on avionics systems increased $8 million mainly due to higher sales of aviation products for defense applications, partially offset by $2 million in restructuring expense. Gross profit on interface technologies increased $6 million mainly due to incremental sales from the Gamesman acquisition. The decrease in segment gross margin mainly reflected lower gross margin on sales of control and communication systems due to lower spares sales.

Sensors & Systems segment gross margin was 33.5% and 37.0% for the first nine months of fiscal 2014 and 2013, respectively. Segment gross profit was $199.4 million compared with $194.3 million in the prior-year period. The increase in gross profit mainly reflected the favorable effect of a strong euro and U.K. pound relative to the U.S. dollar. The decrease in segment gross margin principally reflected lower margins on sales of connection technologies and advanced sensors. The decrease in gross margin on connection technologies was due to lower defense sales resulting in a lower recovery of fixed overhead expenses. In addition, connection technologies gross margin was impacted by Sunbank’s current gross margin being lower than segment gross margin and

~~by recording Sunbank’s acquired inventory at fair value. The decrease in advanced sensors gross margin reflected lower aftermarket sales and higher operating expenses.~~

Advanced Materials segment gross margin was 32.3% for the first nine months of fiscal 2014 compared to 33.2% for the same period one year ago. Segment gross profit was $120.8 million compared to $121.0 million in the prior-year period. The decrease in segment gross profit reflected a decrease in gross profit on sales of defense technologies due to lower sales of combustible ordnance and flare countermeasures partially offset by a $15 million increase in gross profit on higher sales of elastomer materials for commercial aviation and defense applications.

~~Selling, general and administrative expenses (which include corporate expenses) totaled $290.0 million, or 18.5% of sales, and $298.7~~$48.2 million, or 20.8% of sales, for the first ~~nine~~six months of fiscal 2014, and 2013, respectively. The $8.7 million decrease in selling, general and administrative expenses mainly reflects a $4.8 million decrease in corporate expense and a $3.7 million decrease in segment selling, general and administrative expense. The decrease in corporate expense reflects the recording of a $10 million charge for the DDTC matter in the prior-year period. This decrease was partially offset by a $2.6 million increase in compliance expense related to U.S. export laws in the first nine months of fiscal 2014 compared to the prior-year period. The decrease in segment selling, general and administrative expense mainly reflected a $6.8 million decrease in pension expense, partially offset by incremental selling, general and administrative expense from acquisitions of businesses.

Research, development and engineering spending was $78.4 million, or 5.0% of sales, for the first nine months of fiscal 2014 compared with $72.8 million, or 5.1% of sales, for the first nine months of fiscal 2013. The increase in research, development and engineering spending principally reflects higher spending on avionics systems and advanced sensors. Fiscal 2014 research, development and engineering spending is expected to be about 5% of sales.

Total segment earnings (operating earnings excluding corporate expenses and other income or expense) for the first nine months of fiscal 2014 totaled $207.8 million, or 13.3% of sales, compared with $198.8 million, or 13.9% of sales, for the first nine months of fiscal 2013. Excluding restructuring expenses of $13.8 million, segment earnings were $221.7 million, or 14.2% of sales, for the first nine months of 2014.

Avionics & Controls segment earnings were $75.4 million, or 12.6% of sales, in the first nine months of fiscal 2014 and $60.7 million, or 11.1% of sales, in the first nine months of fiscal 2013. Excluding restructuring expense, segment earnings were $79.8 million or 13.4% of sales. Excluding the goodwill impairment charge of $3.5 million associated with Racal Acoustics, segment earnings were $64.1 million, or 11.7% of sales, in the first nine months of fiscal 2013. The increase in segment earnings from the prior-year period mainly reflects a $5 million increase in avionics systems earnings, a $6 million increase in control and communication systems earnings, and a $4 million increase in interface technologies earnings. Avionics systems earnings benefited from increased gross profit, partially offset by higher research, development and engineering expense of $4 million. Control and communication systems benefited from lower operating expenses. The increase in interface technologies earnings reflected incremental earnings from the Gamesman acquisition.

Sensors & Systems segment earnings were $61.5 million, or 10.3% of sales, for the first nine months of fiscal 2014 compared with $63.8 million, or 12.2% of sales, for the first nine months of fiscal 2013. Sensors & Systems was impacted by lower earnings on sales of advanced sensors, $5.5 million in segment restructuring expense, and $1.4 million from recording Sunbank’s acquired inventory at its fair value. These decreases were partially offset by higher earnings on sales of power systems.

Advanced Materials segment earnings were $70.9 million, or 19.0% of sales, for the first nine months of fiscal 2014 compared with $74.4 million, or 20.4% of sales, for the first nine months of fiscal 2013, primarily reflecting ~~restructuring expense of $4 million and~~ lower earnings from sales of ~~combustible ordnance and countermeasures. The~~engineered materials. Earnings from sales of defense technologies improved mainly due to lower restructuring expense. Segment restructuring expense ~~mainly reflected~~was $1.8 million and $3.1 million in the first six months of fiscal 2015 and 2014, respectively. The effect of foreign currencies was a loss ~~from~~of $2 million in the ~~write off~~first six months of certain property, plant and equipment resulting from a planned facility closure. This decrease in segment earnings was partially offset by increased gross profit on higher sales of elastomer materials for commercial aviation and defense applications.

Interest expense for the first ~~nine~~six months of fiscal 2015 was $14.4 million compared with $17.1 million for the first six months of fiscal 2014, ~~was $24.9 million compared with $31.0 million for the first nine months of fiscal 2013, reflecting reduced borrowings.~~

The income tax rates were ~~20.6%~~21.3% and ~~11.4%~~20.2% for the first ~~nine~~six months of fiscal ~~2014~~2015 and ~~2013,~~2014, respectively. In the first ~~nine~~six months of ~~2014,~~2015, we recognized ~~approximately $1.4~~$0.8 million of discrete tax ~~benefits~~expense principally related to the following items. The first item was approximately $0.9 million of tax benefits due to the release of reserves due to the expiration of applicable statutes of limitations. The second item was a $0.5 million reduction of net deferred income tax liabilities as a result of the enactment of tax laws reducing the U.K. statutory income tax rate. In the first nine months of fiscal 2013, we recognized $12.4$2.3 million of discrete tax ~~benefits~~expense principally related to reconciling the ~~following items.~~prior year’s income tax return to the income tax provision. The ~~first~~second item was approximately $1.5 million of tax benefits due to the retroactive extension of the U.S. federal research and experimentation credits. In the first six months of 2014, we recognized approximately $1.1 million of discrete tax benefits principally related to the following items. The ~~second~~first item was approximately ~~$2.3~~$0.6 million of tax benefits ~~related to the settlement of U.S. and foreign tax examinations. The third item was a $4.3 million tax benefit related~~due to the release of

~~tax~~ reserves due to the expiration of ~~applicable statutes~~a statute of limitations. The ~~fourth~~second item was a ~~$3.8~~$0.5 million reduction of net deferred income tax liabilities as a result of the enactment of tax laws reducing the U.K. statutory income tax rate. The income tax rate differed from the statutory rate in the first ~~nine~~six months of fiscal ~~2014~~2015 and ~~2013,~~2014, as both years benefited from various tax credits and certain foreign interest expense deductions.

To the extent that sales are transacted in a currency other than the functional currency of the operating unit, we are subject to foreign currency fluctuation risk.

We use forward contracts to hedge our foreign currency exchange risk. To the extent that these contracts qualify as hedges under U.S. GAAP, the amount of gain or loss is deferred in Accumulated Other Comprehensive Income (AOCI) until the related sale occurs. Also, we are subject to foreign currency gains or losses from embedded derivatives on backlog denominated in a currency other than the functional currency of our operating companies or its customers. Gains and losses on forward contracts, embedded derivatives, and revaluation of assets and liabilities denominated in a currency other than the functional currency of the Company for the nine month periods ended August 1, 2014, and July 26, 2013, are as follows:

New orders for the first ~~nine~~six months of fiscal ~~2014~~2015 were ~~$1.6~~$1.1 billion compared with ~~$1.4~~$1.0 billion for the same period in ~~2013.~~2014. New orders for the first six months of fiscal 2015 include the acquired backlog of DAT of $175.0 million. Backlog was $1.3 billion at ~~August~~May 1, 2015, $1.2 billion at May 2, 2014, and $1.1 billion at ~~the end of the prior-year period and at the end of fiscal 2013.~~October 31, 2014.

Cash and cash equivalents at ~~August~~May 1, ~~2014,~~2015, totaled ~~$210.5~~$172.6 million, ~~an increase~~a decrease of ~~$31.3~~$65.5 million from October ~~25, 2013.~~31, 2014. Net working capital ~~increased~~decreased to ~~$772.9~~$759.1 million at ~~August~~May 1, ~~2014,~~2015, from ~~$683.6~~$761.4 million at October ~~25, 2013.~~31, 2014. Sources and uses of cash flows from

operating activities principally ~~consist~~consisted of cash received from the sale of products and cash payments for material, labor and operating expenses. Cash flows provided by operating activities were ~~$134.7~~$55.7 million and ~~$196.3~~$84.5 million in the first ~~nine~~six months of fiscal 2015 and 2014, respectively. The decrease in cash flow from operating activities reflected lower net earnings and ~~2013, respectively, reflecting higher purchases of inventory,~~ lower cash receipts on collections ~~from customers and higher payments for income taxes.~~of accounts receivable compared with the prior-year period.

Cash flows used by investing activities were ~~$79.8~~$194.5 million and ~~$77.5~~$65.3 million in the first ~~nine~~six months of fiscal ~~2014~~2015 and ~~2013,~~2014, respectively. Cash flows used ~~for~~by investing activities ~~for~~in the first ~~nine~~six months of fiscal ~~2014 primarily~~2015 mainly reflected capital expenditures of $23.4 million and cash paid for acquisitions of ~~$44.7 million, net of cash acquired, and capital expenditures of $35.0~~$171.1 million. Cash flows used by investing activities in the first ~~nine~~six months of fiscal ~~2013 primarily~~2014 mainly reflected cash paid for acquisitions of ~~$40.7~~$44.0 million ~~net of cash acquired,~~ and capital expenditures of ~~$37.8~~$21.3 million.

Cash flows ~~used~~provided by financing activities were ~~$22.1 million and $78.2~~$88.0 million in the first ~~nine~~six months of fiscal 2015 and mainly reflected $210.0 million in proceeds from our credit facilities, $356.5 million in proceeds from issuance of the 2023 Notes, and $9.3 million from the issuance of common stock under our employee stock plans, partially offset by $127.3 million in shares repurchased, $357.5 million in debt repayment, and $7.9 million of debt issuance costs. Cash flows provided by financing activities were $8.2 million in the first six months of fiscal 2014 and ~~2013, respectively. Cash flows used by financing activities~~mainly reflected $25.0 million in ~~the first nine months~~proceeds from our credit facilities, $25.0 million repayment of ~~fiscal 2014 primarily reflected shares repurchased of $5.2~~long-term credit facilities, $19.3 million repayment of long-term debt and ~~credit facilities of $74.1~~$23.0 million ~~and proceeds~~ from ~~our credit facility of $25 million. Cash flows used by financing activities in~~ the ~~first nine months of fiscal 2013 primarily reflected proceeds from our new credit facility of $175.0 million and repayment of long-term debt and credit facilities of $279.5 million.~~

~~On June 19, 2014, our board of directors approved a $200 million share repurchase program. Under the program, we are authorized to repurchase up to $200 million of outstanding shares~~issuance of common stock from time to time, depending on market conditions, share price and other factors. Repurchases may be made in the open market or through private transactions, in accordance with SEC requirements. We may enter into a Rule 10(b)5-1 plan designed to facilitate the repurchase of all or a portion of the repurchase amount. The program does not require the Company to acquire a specific number of shares. During the three months ended August 1, 2014, we repurchased 45,979 shares under ~~this program at an average price paid per share of $112.57, for an aggregate purchase price of $5.2 million.~~

~~We believe cash on hand and funds generated from operations are adequate to service operating cash requirements and capital expenditures through the next twelve months.~~our employee stock plans.

Capital expenditures, consisting of machinery, equipment and computers, are anticipated to be approximately ~~$60~~$50 million during fiscal ~~2014,~~2015, compared ~~to $55.3~~with $45.7 million expended in fiscal ~~2013~~2014 (excluding acquisitions).

Total debt at ~~August~~May 1, ~~2014,~~2015, was ~~$640.9~~$844.0 million and consisted of $250.0 million of 2020 Notes, ~~$164.1 million~~$369.6 (€330.0 million) of ~~the U.S. Term Loan, $115.0~~2023 Notes, $120.0 million in borrowings under our secured credit facility, ~~$52.9~~$46.0 million ofin government refundable advances, ~~$55.8~~$58.2 million under capital lease obligations, and ~~$3.1~~$0.2 million ofunder our various foreign currency debt agreements and other debt agreements.

We believe cash on hand and funds generated from operations and borrowing capacity available under our debt facilities are sufficient to fund operating cash requirements and capital expenditures through the next twelve months.

This quarterly report on Form 10-Q contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “should” or “will” or the negative of such terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risk factors set forth in “Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October ~~25, 2013,~~31, 2014, that may cause our or the industry’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You should not place undue reliance on these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance or achievements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included or incorporated by reference into this report are made only as of the date hereof. We do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect future events or ~~developments, except as required by law.~~developments.

There have been no significant changes in our exposure to market risk during the first ~~nine~~six months of fiscal ~~2014.~~2015. A discussion of our exposure to market risk is provided in the Company’s Annual Report on Form 10-K for the fiscal year ended October ~~25, 2013.~~31, 2014.

Our principal executive and financial officers evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~August~~May 1, ~~2014.~~2015. Based upon that evaluation, they concluded as of ~~August~~May 1, ~~2014,~~2015, that our disclosure controls and procedures were effective to ensure that information we are required to disclose in the reports that we file under the Exchange Act is recorded, processed, summarized and reported within time periods specified in Securities and Exchange Commission rules and forms. In addition, our principal executive and financial officers concluded as of ~~August~~May 1, ~~2014,~~2015, that our disclosure controls and procedures ~~were~~are also effective to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

During the time period covered by this report, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

From time to time we are involved in legal proceedings arising in the ordinary course of business. We believe that adequate reserves for these liabilities have been made and that there is no litigation pending that could have a material adverse effect on our results of operations and financial condition.

See Note 9 to the ~~consolidated financial statements~~Consolidated Financial Statements included in Part 1, Item 1 of this report for information regarding legal proceedings.

On June 19, 2014, our board of directors authorized a new share repurchase program for the repurchase of up to an aggregate of $200 million of the Company’s outstanding common stock. On March 11, 2015, our board of directors authorized an additional $200 million for the repurchase of the Company’s outstanding common stock. All of the repurchases in the table above were made through that program.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Delaware		13-2595091
(State or other Jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)

Large accelerated filer	þ	Accelerated filer	¨

Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

In Thousands	May 1,			October 31,
	2015			2014

Unrealized loss on derivative contracts	$	(19,807	)	$	(14,179	)
Tax effect		5,350			3,890
		(14,457	)		(10,289	)

Pension and post-retirement obligations		(80,438	)		(90,225	)
Tax effect		26,784			30,072
		(53,654	)		(60,153	)

Currency translation adjustment		(198,237	)		(61,135	)
Accumulated other comprehensive gain (loss)	$	(266,348	)	$	(131,577	)

(In thousands)	Three Months Ended						Nine Months Ended
	August 1,			July 26,			August 1,			July 26,
	2014			2013			2014			2013
Service cost	$	2,621		$	2,832		$	8,244		$	9,103
Interest cost		4,737			4,414			14,314			13,208
Expected return on plan assets		(6,504	)		(5,836	)		(19,398	)		(17,142	)
Amortization of prior service costs		19			20			58			62
Amortization of actuarial loss		1,213			3,465			3,913			10,320
Net Periodic Cost	$	2,086		$	4,895		$	7,131		$	15,551

In Thousands	Three Months Ended						Six Months Ended
	May 1,			May 2,			May 1,			May 2,
	2015			2014			2015			2014
Components of Net Periodic Cost
Service cost	$	2,830		$	2,894		$	5,700		$	5,623
Interest cost		4,175			4,765			8,529			9,577
Expected return on plan assets		(6,385	)		(6,939	)		(12,859	)		(13,451	)
Settlement		-			-			2,991			-
Amortization of prior service cost		17			19			35			38
Amortization of actuarial (gain) loss		1,131			1,343			2,399			2,700
Net periodic cost (benefit)	$	1,768		$	2,082		$	6,795		$	4,487

In Thousands
As of January 31, 2015

Current assets	$	80,400
Property, plant and equipment		4,188
Intangible assets subject to amortization
Programs (15 year average useful life)		53,013
Trade name (10 year average useful life)		452
Contracts (3 year average useful life)		3,161
Goodwill		63,508
Other assets		3,401
Total assets acquired		208,123

Current liabilities assumed		33,368
Long-term liabilities assumed		3,685
Net assets acquired	$	171,070

		Three Months Ended
	Increase (Decrease)	May 1,		May 2,
In Thousands	From Prior Year	2015		2014

Avionics & Controls	14.1%	$	210,589	$	184,616
Sensors & Systems	(14.0)%		176,425		205,111
Advanced Materials	(6.7)%		113,066		121,134
Total Net Sales		$	500,080	$	510,861

(In thousands)			Three Months Ended
	Incr. (Decr.) From		August 1,		July 26,
	Prior Year Period		2014		2013
Avionics & Controls		11.4%	$	200,109	$	179,572
Sensors & Systems		12.6%		198,106		175,864
Advanced Materials		8.4%		132,909		122,632
Total Net Sales			$	531,124	$	478,068

					Total Number of		Dollar Value
					of Shares		of Shares
					Purchased as		That May Yet
	Total Number				Part of Publicly		Be Purchased
	of Shares		Average Price		Announced Plans		Under the Plan
Period	Repurchased		Paid Per Share		or Programs		or Program
May 3, 2014 to May 30, 2014		-	$	-		-	$	-
May 31, 2014 to June 27, 2014		-		-		-		200,000,000
June 28, 2014 to August 1, 2014		45,979		112.57		45,979		194,824,183
Total		45,979				45,979

					Total Number of		Dollar Value
					Shares Purchased		of Shares
					as Part of		That May Yet
	Total Number		Average		Publicly		Be Purchased
	of Shares		Price Paid		Announced Plans		Under the Plans
Period	Repurchased		Per Share		or Programs		or Programs

January 31, 2015 to February 27, 2015		20,493	$	114.69		20,493	$	74,762,343
February 28, 2015 to March 27, 2015		207,885		109.22		207,885		252,057,849
March 28, 2015 to May 1, 2015		84,410		114.46		84,410		242,396,591
Total		312,788				312,788

~~Item 6.~~		~~Exhibits~~Exhibit
Number		Exhibit Index

~~3.1~~4.1		~~Amended and Restated Bylaws of Esterline Technologies Corporation, effective June 5, 2014.~~Indenture dated April 8, 2015 relating to TA Mfg Limited's 3.625% Senior Notes due 2023. (Incorporated by reference to Exhibit ~~3.1~~4.1 to the ~~Company’s~~Company's Current Report on Form 8-K ~~dated June 5, 2014~~filed on April 8, 2015 [Commission File ~~No. 1-63571]~~Number 1-6357].)

10.1	*	Esterline Technologies Corporation Fiscal Year 2015 Annual Incentive Compensation Plan
~~10.1~~
~~Fifth~~10.2	*	Esterline Technologies Corporation Long-Term Performance Share Plan for fiscal years 2015-2017.

10.3	*	Form of Global Stock Option Agreement for Esterline Technologies Corporation 2013 Equity Incentive Plan.

10.4	*	Form of Global Restricted Stock Unit Agreement for Esterline Technologies Corporation 2013 Equity Incentive Plan.

10.5		Seventh Amendment dated as of ~~June~~April 9, ~~2014,~~2015, among Esterline Technologies Corporation, the ~~Guarantors,~~foreign borrowers party thereto, the subsidiary guarantors party thereto, Wells Fargo Bank, National Association, as Administrative Agent, and the lenders ~~and other parties~~ thereto. (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 13, 2015 [Commission File Number 1-6357].)

11		Schedule setting forth computation of basic and diluted earnings per ~~common~~ share for the three and ~~nine~~six month periods ended ~~August~~May 1, ~~2014,~~2015, and ~~July 26, 2013.~~May 2, 2014.

31.1		Certification of Chief Executive Officer.

31.2		Certification of Chief Financial Officer.

32.1		Certification (of Curtis C. Reusser) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification (of Robert D. George) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

~~Item 6.~~		~~Exhibits~~

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase

Dated: ~~September 5, 2014~~June 8, 2015	By:	/s/ Robert D. George
		Robert D. George
		Chief Financial Officer, Vice President, and
		Corporate Development
		(Principal Financial Officer)