Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
May. 31, 2015 | Jun. 30, 2015 | Nov. 28, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | AAR CORP | ||
Entity Central Index Key | 1,750 | ||
Document Type | 10-K | ||
Document Period End Date | May 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --05-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 962 | ||
Entity Common Stock, Shares Outstanding | 35,366,407 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Sales: | |||
Sales from products | $ 891,400,000 | $ 901,300,000 | $ 900,600,000 |
Sales from services | 702,900,000 | 807,800,000 | 907,300,000 |
Total sales | 1,594,300,000 | 1,709,100,000 | 1,807,900,000 |
Costs and operating expenses: | |||
Cost of products | 836,500,000 | 794,000,000 | 840,900,000 |
Cost of services | 598,500,000 | 626,200,000 | 707,500,000 |
Selling, general and administrative | 171,400,000 | 166,300,000 | 164,000,000 |
Total costs and operating expenses | 1,606,400,000 | 1,586,500,000 | 1,712,400,000 |
Earnings from joint ventures | 200,000 | 3,000,000 | 6,700,000 |
Operating income (loss) | (11,900,000) | 125,600,000 | 102,200,000 |
Loss on extinguishment of debt | (44,900,000) | (300,000) | |
Interest expense | (26,500,000) | (28,300,000) | (29,100,000) |
Interest income | 300,000 | 1,500,000 | 1,400,000 |
Income (Loss) from continuing operations before provision for income taxes | (83,000,000) | 98,800,000 | 74,200,000 |
Provision for income tax (benefit) | (28,500,000) | 31,600,000 | 25,400,000 |
Income (Loss) from continuing operations attributable to AAR | (54,500,000) | 67,200,000 | 48,800,000 |
Discontinued operations. | |||
Operating income (loss) | (1,500,000) | 6,500,000 | 8,100,000 |
Gain on disposal | 198,600,000 | ||
Impairment charges | (57,500,000) | ||
Provision for income taxes | 74,700,000 | 500,000 | 1,400,000 |
Income from discontinued operations | 64,900,000 | 6,000,000 | 6,700,000 |
Income attributable to noncontrolling interest from discontinued operations | (200,000) | (300,000) | (500,000) |
Income from discontinued operations attributable to AAR | 64,700,000 | 5,700,000 | 6,200,000 |
Net income attributable to AAR | $ 10,200,000 | $ 72,900,000 | $ 55,000,000 |
Earnings (Loss) per share - basic: | |||
Earnings (Loss) from continuing operations | $ (1.40) | $ 1.70 | $ 1.23 |
Earnings from discontinued operations | 1.66 | 0.15 | 0.15 |
Earnings per share - basic | 0.26 | 1.85 | 1.38 |
Earnings per share - diluted: | |||
Earnings (Loss) from continuing operations | (1.40) | 1.68 | 1.23 |
Earnings from discontinued operations | 1.64 | 0.15 | 0.15 |
Earnings per share-diluted | $ 0.24 | $ 1.83 | $ 1.38 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income attributable to AAR and noncontrolling interest | $ 10.4 | $ 73.2 | $ 55.5 |
Other comprehensive income, net of tax: | |||
Currency translation adjustments, net of tax | (7.8) | 14 | 8.7 |
Derivative instruments, net of tax expense of $1.4 in 2015, $0.4 in 2014, and $0.3 in 2013 | 2.6 | 0.7 | 0.6 |
Unrecognized pension and post retirement costs, net of tax expense (benefit) of ($3.2) in 2015, ($0.8) in 2014, and $1.8 in 2013 | (5.9) | (1.5) | 3.4 |
Total other comprehensive income (loss), net of tax | (11.1) | 13.2 | 12.7 |
Comprehensive income (loss) | (0.7) | 86.4 | 68.2 |
Less: Comprehensive income attributable to noncontrolling interests | (0.2) | (0.3) | (0.5) |
Comprehensive income (loss) attributable to AAR | $ (0.9) | $ 86.1 | $ 67.7 |
CONSOLIDATED STATEMENTS OF COM4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Derivative instruments tax expense | $ 1.4 | $ 0.4 | $ 0.3 |
Unrecognized pension and post retirement costs, tax expense (benefit) | $ (3.2) | $ (0.8) | $ 1.8 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | May. 31, 2015 | May. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 54.7 | $ 89.2 |
Accounts receivable | 229 | 283.1 |
Inventories | 456 | 495.3 |
Rotable spares and equipment on or available for short-term lease | 110.7 | 137.6 |
Assets of discontinued operations | 17 | |
Deposits, prepaids and other | 28.4 | 81.6 |
Deferred tax assets | 58.3 | 24.6 |
Total current assets | 954.1 | 1,111.4 |
Property, plant and equipment, at cost: | ||
Land | 3.4 | 9.4 |
Buildings and improvements | 86.4 | 102.4 |
Aircraft, equipment, furniture and fixtures | 523.5 | 627.4 |
Property, plant and equipment, gross | 613.3 | 739.2 |
Accumulated depreciation | (398.5) | (424.3) |
Property, plant and equipment, net of accumulated depreciation | 214.8 | 314.9 |
Other assets: | ||
Goodwill | 123.5 | 261.7 |
Intangible assets, net | 36.7 | 165.4 |
Equipment on or available for long-term lease | 80.2 | 98.4 |
Capitalized program development costs | 112.2 | |
Investment in joint ventures | 20.5 | 29.9 |
Other | 85.2 | 100.1 |
Total other assets | 346.1 | 767.7 |
Total assets | 1,515 | 2,194 |
Current liabilities: | ||
Current maturities of long-term debt | 69 | 69.7 |
Accounts and trade notes payable | 142.3 | 171.1 |
Accrued liabilities | 200.7 | 161.3 |
Total current liabilities | 412 | 402.1 |
Long-term debt, less current maturities | 85 | 564.3 |
Deferred tax liabilities | 104.6 | 156.7 |
Other liabilities and deferred income | 68.3 | 70.2 |
Total noncurrent liabilities | $ 257.9 | $ 791.2 |
Equity: | ||
Preferred stock, $1.00 par value, authorized 250,000 shares; none issued | ||
Common stock, $1.00 par value, authorized 100,000,000 shares; issued 44,895,934 and 44,674,186 shares at cost, respectively | $ 44.9 | $ 44.7 |
Capital surplus | 442.6 | 436.4 |
Retained earnings | 644.3 | 646 |
Treasury stock, 9,473,058 and 5,113,939 shares at cost, respectively | (246.3) | (98.3) |
Accumulated other comprehensive loss | (40.4) | (29.3) |
Total AAR stockholders' equity | 845.1 | 999.5 |
Noncontrolling interest | 1.2 | |
Total equity | 845.1 | 1,000.7 |
Total liabilities and equity | $ 1,515 | $ 2,194 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | May. 31, 2015 | May. 31, 2014 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized shares | 250,000 | 250,000 |
Preferred stock, issued shares | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, issued shares | 44,895,934 | 44,674,186 |
Treasury stock, shares | 9,473,058 | 5,113,939 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Millions | Total AAR Stockholders' Equity | Common Stock | Capital Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total |
Balance at May. 31, 2012 | $ 864.6 | $ 44.8 | $ 423.6 | $ 541.8 | $ (90.4) | $ (55.2) | $ 1.4 | $ 866 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 55 | 55 | 0.5 | 55.5 | ||||
Cash dividends | (11.9) | (11.9) | (1) | (12.9) | ||||
Stock option activity | 4.5 | 2.8 | 1.7 | 4.5 | ||||
Restricted stock activity | 7.8 | (0.1) | 4.7 | 3.2 | 7.8 | |||
Repurchase of shares | (14.6) | (14.6) | (14.6) | |||||
Equity portion of bond repurchase | 0.5 | 0.5 | 0.5 | |||||
Other comprehensive (loss) income, net of tax | 12.7 | 12.7 | 12.7 | |||||
Balance at May. 31, 2013 | 918.6 | 44.7 | 431.6 | 584.9 | (100.1) | (42.5) | 0.9 | 919.5 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 72.9 | 72.9 | 0.3 | 73.2 | ||||
Cash dividends | (11.8) | (11.8) | (11.8) | |||||
Stock option activity | 7.8 | 2.8 | 5 | 7.8 | ||||
Restricted stock activity | (0.2) | 2 | (2.2) | (0.2) | ||||
Repurchase of shares | (1) | (1) | (1) | |||||
Other comprehensive (loss) income, net of tax | 13.2 | 13.2 | 13.2 | |||||
Balance at May. 31, 2014 | 999.5 | 44.7 | 436.4 | 646 | (98.3) | (29.3) | 1.2 | 1,000.7 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 10.2 | 10.2 | 0.2 | 10.4 | ||||
Cash dividends | (11.9) | (11.9) | (0.6) | (12.5) | ||||
Stock option activity | 6.3 | 2.1 | 4.2 | 6.3 | ||||
Restricted stock activity | 4.2 | 0.2 | 4.7 | (0.7) | 4.2 | |||
Repurchase of shares | (151.5) | (151.5) | (151.5) | |||||
Other | 0.6 | 0.6 | $ 0.8 | 1.4 | ||||
Other comprehensive (loss) income, net of tax | (11.1) | (11.1) | (11.1) | |||||
Balance at May. 31, 2015 | $ 845.1 | $ 44.9 | $ 442.6 | $ 644.3 | $ (246.3) | $ (40.4) | $ 845.1 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Cash flows provided from operating activities: | |||
Net income attributable to AAR and noncontrolling interest | $ 10.4 | $ 73.2 | $ 55.5 |
Adjustments to reconcile net income attributable to AAR and noncontrolling interest to net cash provided from operating activities: | |||
Depreciation and intangible amortization | 69.1 | 80.4 | 79.7 |
Impairment Charges | 84.6 | ||
Amortization of program development costs | 31.6 | 6.3 | |
Amortization of stock-based compensation | 7.8 | 8.7 | 11.1 |
Amortization of debt discount | 2.7 | 5.3 | 9.6 |
Amortization of overhaul costs | 23.2 | 33 | 28.9 |
Deferred tax provision (benefit) | (79.8) | 9.6 | 29.5 |
Gain on sale of business | (198.6) | ||
Loss on extinguishment of debt | 44.9 | 0.3 | |
Earnings from joint ventures | (0.4) | (3.1) | (6.8) |
Changes in certain assets and liabilities: | |||
Accounts receivable | (28.3) | 16.7 | 6 |
Inventories | (43.2) | (47.9) | 16.1 |
Rotable spares and equipment on or available for short-term lease | 6.6 | 11.3 | 10.4 |
Equipment on or available for long-term lease | 6.2 | (41.7) | 0.8 |
Accounts and trade notes payable | (4) | 20.1 | (50.7) |
Accrued and other liabilities | 28.1 | 4.3 | 11.8 |
Other, primarily program and overhaul costs | (3.9) | (36.4) | (39.3) |
Net cash provided from (used in) operating activities | (43) | 139.8 | 162.9 |
Cash flows used in investing activities: | |||
Property, plant and equipment expenditures | (46.3) | (26.5) | (37.6) |
Proceeds from sale of assets | 6.6 | 2 | 11.8 |
Proceeds from sale of business | 686.1 | ||
Proceeds from sale-leaseback advance | 40.3 | ||
Payments for acquisitions | (1) | (15.3) | (21.3) |
Proceeds from aircraft joint ventures | 4 | (0.2) | 15.4 |
Other | (0.5) | (0.9) | (1.1) |
Net cash provided by (used in) investing activities | 689.2 | (40.9) | (32.8) |
Cash flows (used in) provided from financing activities: | |||
Short-term borrowings (repayments), net | (80) | 10 | (160) |
Proceeds from borrowings | 181.8 | ||
Reduction in long-term borrowings | (394.8) | (88.9) | (114.3) |
Cash dividends | (12.5) | (11.8) | (12.8) |
Premium paid on early retirement of debt | (45.6) | ||
Purchase of treasury stock | (151.5) | (1) | (14.6) |
Stock option exercises | 6.5 | 5.1 | 1.1 |
Other | (0.2) | 0.7 | (4.9) |
Net cash used in financing activities | (678.1) | (85.9) | (123.7) |
Effect of exchange rate changes on cash | (2.6) | 0.9 | 1.2 |
Increase (Decrease) in cash and cash equivalents | (34.5) | 13.9 | 7.6 |
Cash and cash equivalents, beginning of year | 89.2 | 75.3 | 67.7 |
Cash and cash equivalents, end of year | $ 54.7 | $ 89.2 | $ 75.3 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
May. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Description of Business AAR CORP. is a diversified provider of services and products to the worldwide commercial aviation and government and defense markets. Services and products include: aviation supply chain and parts support programs; maintenance, repair and overhaul of aircraft and landing gear; design and manufacture of specialized pallets, shelters, and containers; expeditionary airlift services; aircraft modifications and aircraft and engine sales and leasing. We serve commercial, defense and governmental aircraft fleet operators, original equipment manufacturers, and independent service providers around the world, and various other domestic and foreign military customers. Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiaries after elimination of intercompany accounts and transactions. The equity method of accounting is used for investments in other companies in which we have significant influence; generally this represents common stock ownership of at least 20% and not more than 50% (see Note 10 for a discussion of aircraft joint ventures). Revenue Recognition Sales and related cost of sales for product sales are recognized upon shipment of the product to the customer. Our standard terms and conditions provide that title passes to the customer when the product is shipped to the customer. Sales of certain defense products are recognized upon customer acceptance, which includes transfer of title. Under the majority of our expeditionary airlift services contracts, we are paid and record as revenue a fixed daily amount per aircraft for each day an aircraft is available to perform airlift services. In addition, we are paid and record as revenue an amount which is based on number of hours flown. Sales from services and the related cost of services are generally recognized when customer-owned material is shipped back to the customer. We have adopted this accounting policy because at the time the customer-owned material is shipped back to the customer, all services related to that material are complete as our service agreements generally do not require us to provide services at customer sites. Furthermore, serviced units are typically shipped to the customer immediately upon completion of the related services. Sales and related cost of sales for certain large airframe maintenance contracts and performance-based logistics programs are recognized by the percentage of completion method, based on the relationship of costs incurred to date to the estimated total costs. Lease revenues are recognized as earned. Income from monthly or quarterly rental payments is recorded in the pertinent period according to the lease agreement. However, for leases that provide variable rents, we recognize lease income on a straight-line basis. In addition to a monthly lease rate, some engine leases require an additional rental amount based on the number of hours the engine is used in a particular month. Lease income associated with these contingent rentals is recorded in the period in which actual usage is reported to us by the lessee, which is normally the month following the actual usage. Certain supply chain management programs we provide to our customers contain multiple elements or deliverables, such as program and warehouse management, parts distribution, and maintenance and repair services. We recognize revenue for each element or deliverable that can be identified as a separate unit of accounting at the time of delivery based upon the relative fair value of the products and services. Included in accounts receivable as of May 31, 2015 and 2014, are $21.1 million and $19.7 million, respectively, of unbilled accounts receivable related to our KC10 supply agreement. These unbilled accounts receivable relate to costs we have incurred on parts that were requested and accepted by our customer to support the program. These costs have not been billed by us because the customer has not issued the final paperwork necessary to allow for billing. In addition to the unbilled accounts receivable, included in Other non-current assets on the consolidated balance sheet as of May 31, 2015 and 2014, are $7.5 million and $9.9 million, respectively, of costs in excess of amounts billed for the flight-hour portion of the same KC10 supply agreement. These amounts represent the difference between the amounts of revenue recognized by us driven by costs incurred under the flight hour portion of the program, compared to what was billed. Pursuant to U.S. generally accepted accounting principles, we have to assess the recoverability of the costs in excess of amounts billed by projecting future performance of the flight hour portion of the contract, including an estimate of future flight hours and costs over the life of the program. In fiscal 2013, we established cost savings targets to reduce program spend over the life of the program and we had been successful in achieving these targets. However, beginning in the second half of fiscal 2013 we experienced a decrease in flight hour revenue. This decrease was caused by a 28% decline in flight hours flown primarily due to lower operations tempo. As a result of this unexpected and significant decline in flight hour revenue and a revised forecast indicating lower usage in the future for the fleet, we lowered the revenue and profitability forecast for the flight hour portion of the contract during the fourth quarter of fiscal 2013 resulting in a $29.8 million pre-tax charge. This revised forecast results in a 0% margin over the remaining life of the flight-hour program. No additional adjustments have been recorded in fiscal 2015 or 2014 based on the flight hours and costs incurred to date as well as future expectations for the program. We recorded 0% margin in fiscal 2015 and 2014 on the flight-hour portion of the contract, which resulted in revenue of $46.5 million and $42.4 million in fiscal 2015 and 2014, respectively. We expect to recover the May 31, 2015 balance of the costs in excess of amounts billed of $7.5 million through projected future billings in excess of forecasted costs over the life of the program. Notwithstanding the foregoing, we reserve all our rights under the KC10 supply agreement, at law and in equity, including our rights to recover past and future revenues and expenses associated with the program. Allowance for Doubtful Accounts We maintain an allowance for doubtful accounts to reflect the expected uncollectibility of accounts receivable based on past collection history and specific risks identified among uncollected accounts. In determining the required allowance, we consider factors such as general and industry-specific economic conditions, customer credit history, and our customers' current and expected future financial performance. The majority of our customers are recurring customers with an established payment history. Certain customers are required to undergo an extensive credit check prior to delivery of products or services. Goodwill and Other Intangible Assets In accordance with Accounting Standards Codification ("ASC") 350, Intangibles—Goodwill and Other , goodwill and other intangible assets deemed to have indefinite lives are not amortized, but are subject to annual impairment tests. We review and evaluate our goodwill and indefinite life intangible assets for potential impairment at a minimum annually, on May 31, or more frequently if circumstances indicate that impairment is possible. We use a two-step process to evaluate goodwill for impairment. In the first step, we compare the fair value of each reporting unit with the carrying value of the reporting unit, including goodwill. If the estimated fair value of the reporting unit is less than the carrying value of the reporting unit, we would be required to complete a second step to determine the amount of goodwill impairment. The second step of the test requires the allocation of the reporting unit's fair value to its assets and liabilities, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill as if the reporting unit was being acquired in a business combination. If the implied fair value of goodwill is less than the carrying value, the difference is recorded as an impairment loss. We estimate the fair value of each reporting unit using both an income approach based on discounted cash flows and a market approach based on a multiple of earnings. The assumptions we used to estimate the fair value of our reporting units are based on historical performance, as well as forecasts used in our current business plan and require considerable management judgment. We use a discount rate based on our consolidated weighted average cost of capital which is adjusted for each of our reporting units based on their specific risk and size characteristics. The fair value measurements used for our goodwill impairment testing use significant unobservable inputs, which reflect our own assumptions about the inputs that market participants would use in measuring fair value. The fair value of our reporting units is also impacted by our overall market capitalization and may be impacted by volatility in our stock price and assumed control premium, among other items. As of May 31, 2015, we have five reporting units as defined by ASC 350. Step one of the impairment test was completed for the reporting units with assigned goodwill and the estimated fair value for each reporting unit exceeded its net asset carrying value. Accordingly, there was no indication of impairment and the second step was not performed. In connection with the change in reportable segments discussed in Note 13—Business Segment Information and the divestitures discussed in Note 2—Discontinued Operations, we reallocated goodwill across our new segments based on a relative fair value basis. Changes in the carrying amount of goodwill by segment for fiscal 2015 and 2014 are as follows: Aviation Services Expeditionary Services Discontinued Operations Total Balance as of May 31, 2013 $ $ $ $ Acquisition — — Foreign currency translation adjustments — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2014 Reallocation of goodwill — ) — Businesses sold or assets held for sale — — ) ) Foreign currency translation adjustments ) — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2015 $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives. Intangible assets, other than goodwill, are comprised of the following: May 31, 2015 Gross Accumulated Amortization Net Amortizable intangible assets: Customer relationships $ $ ) $ Developed technology ) Lease agreements ) FAA certificates ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) Unamortized intangible assets: Trademarks — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ May 31, 2014 Gross Accumulated Amortization Net Amortizable intangible assets: Customer relationships $ $ ) $ Developed technology ) Lease agreements ) FAA certificates ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) Unamortized intangible assets: Trademarks — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships are being amortized over 10-20 years, developed technology is being amortized over 7-10 years, the lease agreements are being amortized over 18 years, and the FAA certificates are being amortized over 20 years. Amortization expense recorded during fiscal 2015, 2014 and 2013 was $4.6 million, $4.7 million, and $7.7 million, respectively. The estimated aggregate amount of amortization expense for intangible assets in each of the next five fiscal years is $4.4 million in 2016, $4.4 million in 2017, $4.4 million in 2018, $3.8 million in 2019 and $3.5 million in 2020. Foreign Currency Our foreign subsidiaries utilize the local currency as their functional currency. All balance sheet accounts of foreign subsidiaries transacting business in currencies other than the U.S. dollar are translated at year-end exchange rates. Revenues and expenses are translated at average exchange rates during the year. Translation adjustments are excluded from the results of operations and are recorded in stockholders' equity as a component of accumulated other comprehensive loss until such subsidiaries are liquidated. Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid instruments which have original maturities of three months or less when purchased. Financial Instruments and Concentrations of Market or Credit Risk Financial instruments that potentially subject us to concentrations of market or credit risk consist principally of trade receivables. While our trade receivables are diverse and represent a number of entities and geographic regions, the majority are with the U.S. Department of Defense and its contractors and entities in the aviation industry. Accounts receivable due from the U.S. Department of Defense were $39.2 million and $50.5 million at May 31, 2015 and 2014, respectively. Additionally, included in accounts receivable as of May 31, 2015 and 2014, are $41.1 million and $48.7 million, respectively, of accounts receivable from a large defense contractor. We perform regular evaluations of customer payment experience, current financial condition, and risk analysis. We may require collateral in the form of security interests in assets, letters of credit, and/or obligation guarantees from financial institutions for transactions executed on other than normal trade terms. The carrying amounts of cash and cash equivalents, accounts receivable, and accounts and trade notes payable approximate fair value because of the short-term maturity of these instruments. The carrying value of long-term debt bearing a variable interest rate approximates fair value. Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Inventories Inventories are valued at the lower of cost or market (estimated net realizable value). Cost is determined by the specific identification, average cost, or first-in, first-out methods. From time-to-time, we purchase aircraft and engines for disassembly to individual parts and components. Costs are assigned to these individual parts and components utilizing list prices from original equipment manufacturers and recent sales history. The following is a summary of inventories: May 31, 2015 2014 Raw materials and parts $ $ Work-in-process Aircraft and engine parts, components and finished goods Aircraft held for sale and related support parts ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ We classify certain aircraft from our expeditionary airlift business as assets held for sale at the time management commits to a plan to sell the aircraft, changes to the planned sale are not likely, the aircraft are actively marketed and available for immediate sale, and the sale is expected to be completed within one year. Upon designation of an aircraft as held for sale, we record the aircraft's value at the lower of its carrying value or its estimated fair value, less estimated costs to sell. Assets held for sale are not depreciated. Aircraft may be classified as assets held for sale for more than one year as we continue to actively market the aircraft at reasonable prices. Certain aircraft types we currently have available for sale are specifically designed for particular functions which limits the marketability of those assets. We had eleven aircraft held for sale comprised of five fixed-wing and six rotary-wing aircraft at May 31, 2015 and nine aircraft held for sale comprised of five fixed-wing and four rotary-wing aircraft at May 31, 2014. During fiscal 2015, we recognized impairment charges of $8.9 million reflecting the decrease in fair value for certain aircraft held for sale and related rotable assets. During the fourth quarter of fiscal 2015, we entered into a sale-leaseback transaction for our two S-92 rotary-wing aircraft. We received proceeds of $40.3 million in fiscal 2015 which have been deferred as a sale-leaseback advance pending completion of the sale transaction, which is expected to occur in fiscal 2016. Equipment under Leases Lease revenue is recognized as earned. The cost of the asset under lease is the original purchase price plus overhaul costs. Depreciation for aircraft is computed using the straight-line method over the estimated service life of the equipment. The balance sheet classification of equipment under lease is generally based on lease term, with fixed-term leases less than twelve months generally classified as short-term and all others generally classified as long-term. Equipment on short-term lease includes aircraft engines and parts on or available for lease to satisfy customers' immediate short-term requirements. The leases are renewable with fixed terms, which generally vary from one to twelve months. In conjunction with our decision to exit certain product lines in our landing gear business, we recognized an impairment charge of $17.7 million related to rotable assets in fiscal 2015. Equipment on long-term lease consists of engines on lease with commercial airlines generally for more than twelve months and rotable parts used to support long-term supply chain programs. The rotable parts included in equipment on long-term lease are being depreciated on a straight-line basis over their estimated useful lives. During the fourth quarter of fiscal 2015, we sold our two remaining wholly-owned aircraft which were on long-term leases for $11.0 million which resulted in a loss on sale of $14.8 million. The following is a summary of equipment on or available for long-term lease: May 31, 2015 2014 Aircraft engines and rotable parts $ $ Aircraft — ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Future rent due to us under non-cancelable leases during each of the next five fiscal years is $18.4 million in 2016, $17.6 million in 2017, $17.2 million in 2018, $16.7 million in 2019, and $16.1 million in 2020. Property, Plant and Equipment We record property, plant and equipment at cost. Depreciation is computed on the straight-line method over useful lives of 10-40 years for buildings and improvements and 3-10 years for equipment, furniture and fixtures, and capitalized software. Aircraft, major components in service, and associated rotable assets to support our expeditionary airlift services are depreciated over their estimated useful lives, which is generally 7-30 years. Leasehold improvements are amortized over the shorter of the estimated useful life or the term of the applicable lease. Repair and maintenance expenditures are expensed as incurred. Upon sale or disposal, cost and accumulated depreciation are removed from the accounts, and related gains and losses are included in results of operations. In accordance with ASC 360, Property, Plant and Equipment , we are required to test for impairment of long-lived assets whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable from its undiscounted cash flows. We utilize certain assumptions to estimate future undiscounted cash flows, including demand for our services, future market conditions and trends, business development pipeline of opportunities, current and future lease rates, lease terms, and residual values. Where a determination has been made to exit an entire asset group, the asset group is reviewed for potential impairment with an impairment loss recognized in the period in which it is determined that the aggregate carrying amount of assets within an asset group is not recoverable. Capitalized Program Development Costs Our Telair Cargo Group capitalized $139.8 million, net of reimbursements, as of May 31, 2014 related to costs associated with the engineering and development of the A400M cargo system. The Telair Cargo Group was sold in March 2015 as further discussed in Note 2—Discontinued Operations. These capitalized costs are classified as current and non-current assets on the May 31, 2014 Consolidated Balance Sheet. At May 31, 2014, current assets include $27.6 million in Deposits, prepaids and other and non-current assets include $112.2 million in Capitalized program development costs. The capitalized development costs were recovered upon the sale of the Telair Cargo Group. Income Taxes We are subject to income taxes in the U.S., state, and several foreign jurisdictions. In the ordinary course of business, there can be transactions and calculations where the ultimate tax determination is uncertain. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns in accordance with applicable accounting guidance for accounting for income taxes, using currently enacted tax rates in effect for the year in which the differences are expected to reverse. We record a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. The accounting for uncertainty in income taxes requires a more-likely-than-not threshold for financial statement recognition of tax positions taken or expected to be taken in a tax return. Where necessary, we record a liability for the difference between the benefit recognized for financial statement purposes and the tax position taken or expected to be taken on our tax return. To the extent that our assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. Supplemental Information on Cash Flows Supplemental information on cash flows is as follows: For the Year Ended May 31, 2015 2014 2013 Interest paid $ $ $ Income taxes paid Income tax refunds and interest received On May 29, 2015, we repurchased 4,185,960 shares of our common stock at a price of $31.90 per share pursuant to a tender offer utilizing $133.5 million cash on hand. Fees and expenses of $1.2 million were incurred related to the tender offer and were recorded in treasury stock. In addition to the tender offer, we also repurchased common shares of $16.8 million and re-issued shares upon exercise of stock options, net of shares withheld to satisfy statutory tax obligations, of $3.6 million during fiscal 2015. During fiscal 2014, treasury stock decreased $1.8 million reflecting the re-issuance of shares upon exercise of stock options, net of shares withheld to satisfy statutory tax obligations, and restricted stock award grants of $2.8 million, partially offset by the purchase of treasury shares of $1.0 million. During fiscal 2013, treasury stock increased $9.7 million reflecting the purchase of treasury shares of $14.6 million, partially offset by the re-issuance of shares upon exercise of stock options, net of shares withheld to satisfy statutory tax obligations, and restricted stock award grants of $4.9 million. Use of Estimates We have made estimates and utilized certain assumptions relating to the reporting of assets and liabilities and the disclosures of contingent liabilities to prepare these Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States. Actual results could differ from those estimates. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers , which provides guidance for revenue recognition. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in ASC 605, Revenue Recognition , and most industry-specific guidance. This ASU also supersedes certain cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts . This new standard will be effective for us beginning June 1, 2017, however the FASB issued a proposed ASU on April 29, 2015 which would defer the effective date of the new standard for one year. We are currently evaluating the impact of the adoption of this new standard on our consolidated financial statements. In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity which requires that a disposal representing a strategic shift that has or will have a major effect on an entity's financial results or a business activity classified as held for sale should be reported as discontinued operations. The amendments also expand the disclosure requirements for discontinued operations and add new disclosures for individually significant dispositions that do not qualify as discontinued operations. The Company adopted this guidance on June 1, 2015 which will result in expanded disclosures related to the income statement and cash flow activities for our discontinued operations. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . This standard amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. This new standard will be effective for us beginning June 1, 2016 with early adoption permitted. We are currently evaluating the impact of the adoption of this new standard on our consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
May. 31, 2015 | |
Discontinued operations. | |
Discontinued Operations | 2. Discontinued Operations On March 26, 2015, we completed the sale of our Telair Cargo Group to TransDigm, Inc. for $725 million, subject to certain post-closing adjustments, including a working capital adjustment. The Telair Cargo Group was comprised of Telair International, Telair US, and Nordisk Aviation Products. Cash received at closing before fees and expenses was $705 million with the remaining consideration of $20 million placed in escrow and payable based on the occurrence of certain post-closing events related to the A400M cargo system. In addition, incremental contingent consideration of up to $15 million related to the same cargo system development program could increase total proceeds to $740 million. We recognized a pre-tax gain on the sale (net of transaction expenses and fees) of $198.6 million in the fourth quarter of fiscal 2015. The gain excludes the aggregate $35 million of contingent consideration. We have also announced our intention to sell our Precision Systems Manufacturing ("PSM") business comprised of our metal and composite machined and fabricated parts manufacturing operations. During fiscal 2015, we recognized impairment charges of $57.5 million to reduce the carrying value of the PSM business's net assets to their expected value at the time of sale. Telair Cargo Group and PSM, which were both previously reported in our Technology Products segment, are reported as discontinued operations in the Consolidated Statements of Operations for all periods presented. Interest expense allocated to discontinued operations was $9.2 million, $13.0 million and $12.2 million for fiscal 2015, 2014, and 2013, respectively. No amounts for general corporate overhead were allocated to discontinued operations. Sales for our discontinued operations were $286.3 million, $325.9 million, and $329.4 million for fiscal 2015, 2014, and 2013, respectively. Liabilities of discontinued operations of $5.4 million at May 31, 2015 were classified as Accrued Liabilities on the Consolidated Balance Sheet. Unless otherwise noted, amounts and disclosures throughout these Notes to Consolidated Financial Statements relate to our continuing operations. |
Financing Arrangements
Financing Arrangements | 12 Months Ended |
May. 31, 2015 | |
Financing Arrangements | |
Financing Arrangements | 3. Financing Arrangements Debt Outstanding A summary of the carrying amount of our debt is as follows: May 31, 2015 2014 Revolving Credit Facility expiring March 24, 2020 with interest payable monthly $ $ Industrial revenue bond (secured by property, plant and equipment) due August 1, 2018 with interest payable monthly Note payable due March 9, 2017 with floating interest rate, payable semi-annually on June 1 and December 1 Convertible notes payable due March 1, 2016 with interest at 2.25% payable semi-annually on March 1 and September 1 Notes payable originally due January 15, 2022 with interest at 7.25% payable semi-annually on January 15 and July 15 — Other 1 ​ ​ ​ ​ ​ ​ ​ ​ Total debt Current maturities of debt ) ) ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 Included in Other is a mortgage loan (secured by Wood Dale, Illinois facility) due August 1, 2015 of $11.0 million and $11.0 million, 1.75% convertible notes due February 1, 2015 of $0 and $29.8 million, and a secured credit facility originally due April 23, 2015 of $0 million and $29.9 million at May 31, 2015 and 2014, respectively. The aggregate principal amount of debt maturing during each of the next five fiscal years is $70.8 million in 2016, $10.0 million in 2017, $0 million in 2018, $25.0 million in 2019, and $50.0 million in 2020. At May 31, 2015, the carrying value of our 2.25% convertible notes was $48.0 million and the estimated fair value was approximately $51.5 million. The 2.25% convertible notes are classified as Level 2 in the fair value hierarchy. This classification is defined as a fair value determined using market-based inputs other than quoted prices that are observable for the liability, either directly or indirectly. At May 31, 2015, the remaining variable rate and fixed rate debt had a fair value that approximates the carrying value of $106.0 million. These debt instruments are classified as Level 3 in the fair value hierarchy which is defined as a fair value determined based upon one or more significant unobservable inputs. We are subject to a number of covenants under our financing arrangements, including restrictions that relate to the payment of cash dividends, maintenance of minimum net working capital and tangible net worth levels, sales of assets, additional financing, purchase of our shares and other matters. We are in compliance with all financial and other covenants under our financing arrangements. Credit Facilities On March 24, 2015, we entered into an amendment (the "Amendment") to our Revolving Credit Facility dated April 12, 2011, as amended, with various financial institutions, as lenders and Bank of America, N.A., as administrative agent for the lenders (the "Revolving Credit Facility"). The Amendment increased the aggregate revolving credit commitment from $475 million to $500 million. Under certain circumstances, the Company also could request an increase to the revolving commitment by an aggregate amount of up to $250 million, not to exceed $750 million in total. Borrowings under the Revolving Credit Facility subsequent to the Amendment bear interest at the offered Eurodollar Rate plus 100 to 200 basis points based on certain financial measurements if a Eurodollar Rate loan, or at the offered fluctuating Base Rate plus 0 to 100 basis points based on certain financial measurements if a Base Rate loan. The Amendment also extended the maturity of the Revolving Credit Facility by approximately two years to March 24, 2020; deleted the minimum fixed charge coverage ratio; and added a minimum interest coverage ratio. In addition to the interest coverage ratio, the Revolving Credit Facility requires us to comply with a leverage ratio and certain affirmative and negative covenants, including those relating to financial reporting and notification, payment of indebtedness, taxes and other obligations, compliance with applicable laws, and limitations on additional liens, indebtedness, acquisitions, investments and disposition of assets. The Revolving Credit Facility also requires our significant domestic subsidiaries, and any subsidiaries that guarantee our other indebtedness, to provide a guarantee of payment under the Revolving Credit Facility. At May 31, 2015, we were in compliance with the financial and other covenants in these agreements. Borrowing activity under the Revolving Credit Facility during fiscal 2015, 2014 and 2013 is as follows: For the Year Ended May 31, 2015 2014 2013 Maximum amount borrowed $ $ $ Average daily borrowings Average interest rate during the year % % % On March 28, 2013, we amended our secured credit facility with The Huntington National Bank (the "Huntington Loan Agreement"). The amendment to the Huntington Loan Agreement reduced our secured facility from $65.0 million to $40.0 million while also reducing the interest rate from 325 basis points to 175 basis points over LIBOR. Borrowings under the Huntington Loan Agreement were secured by aircraft and related engines and components owned by us. The Huntington Loan Agreement was repaid and terminated in the fourth quarter of fiscal 2015 using the sale proceeds from the Telair Cargo Group. We also have $2.7 million available under a foreign line of credit. 7.25% Senior Notes due 2022 On April 30, 2015, we redeemed our $325 million 7.25% Senior Notes due 2022 for $370.6 million. We recognized a loss on extinguishment of debt of $44.9 million comprised of a make-whole premium of $45.6 million and unamortized deferred financing costs of $6.2 million, partially offset by an unamortized net premium of $6.9 million. Convertible Notes The interest expense associated with the convertible notes was as follows: For the Year Ended May 31, 2015 2014 2013 Coupon interest $ $ $ Amortization of deferred financing fees Amortization of discount ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense related to convertible notes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
May. 31, 2015 | |
Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities | 4. Derivative Instruments and Hedging Activities We are exposed to interest rate risk associated with fluctuations in interest rates on our variable rate debt. Prior to the fourth quarter of fiscal 2015, we utilized two derivative financial instruments to manage our variable interest rate exposure. We utilized a floating-to-fixed interest rate swap and an interest rate cap agreement with each hedging $50.0 million of notional principal interest under our Revolving Credit Facility. In connection with the Amendment of our Revolving Credit Facility, we settled our floating-to-fixed interest rate swap and interest rate cap agreements in the fourth quarter of fiscal 2015 for approximately $2.6 million. Prior to the settlement, the derivatives instruments were classified as cash flow hedges with gains and losses on the derivative instruments included in other comprehensive income. We recognized gains and losses on our derivative instruments as an adjustment to interest expense in the period the hedged interest payment affected earnings. We recognized a loss of $2.0 million in fiscal 2015 related to the reclassification of previously unrealized losses in accumulated other comprehensive income. The impact of the interest rate swap and interest cap agreement on the Consolidated Statement of Comprehensive Income for the years ended May 31, 2014 and 2013 was unrealized gains of $0.7 million and $0.6 million, respectively. At May 31, 2014, the fair value of our floating-to-fixed interest rate swap was a liability of $2.8 million and the fair value of our interest rate cap agreement was an asset of $0.1 million. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
May. 31, 2015 | |
Accounting for Stock-Based Compensation | |
Accounting for Stock-Based Compensation | 5. Stock-Based Compensation We provide stock-based awards under the AAR CORP. Stock Benefit Plan ("Stock Benefit Plan") and the AAR CORP. 2013 Stock Plan (the "2013 Stock Plan"), each of which has been approved by our stockholders. Under the Stock Benefit Plan and the 2013 Stock Plan, we are authorized to issue stock options to employees and non-employee directors that allow the grant recipients to purchase shares of common stock at a price not less than the fair market value of the common stock on the date of grant. Generally, stock options awarded expire ten years from the date of grant and are exercisable in three, four or five equal annual increments commencing one year after the date of grant. In addition to stock options, the Stock Benefit Plan and the 2013 Stock Plan also provide for the grant of restricted stock awards and performance-based restricted stock awards. The number of performance-based awards earned, subject to vesting, is based on achievement of certain Company-wide financial goals or stock price targets. The Stock Benefit Plan and the 2013 Stock Plan also provide for the grant of stock appreciation units and restricted stock units; however, to date, no such awards have been granted. Restricted stock grants are designed, among other things, to align employee interests with the interests of stockholders and to encourage the recipient to build a career with us. Restricted stock typically vests over periods of one to five years from date of grant. Restricted stock grants may be performance-based with vesting to occur over periods of three to six years. All restricted stock that has been granted and earned according to performance criteria carries full dividend and voting rights, regardless of whether it has vested. Substantially all stock options and restricted stock are subject to forfeiture prior to vesting if the employee's employment terminates for any reason other than death, disability or retirement. Since inception, a total of 11,149,000 shares have been granted under the Stock Benefit Plan. With the stockholder approval of the 2013 Stock Plan, we granted a total of 331,000 shares in fiscal 2015 under the 2013 Stock Plan and plan to make all future stock awards under the 2013 Stock Plan rather than the Stock Benefit Plan. There are 2,180,000 shares available for grant under the 2013 Stock Plan as of May 31, 2015. Stock Options No stock options were granted during fiscal 2015. During fiscal 2014 and 2013, we granted stock options representing 1,033,015 shares and 972,180 shares, respectively. The weighted average fair value per share of stock options granted during fiscal 2014 and 2013 was $10.24 and $4.85, respectively. The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: Stock Options Granted In Fiscal Year 2014 2013 Risk-free interest rate % % Expected volatility of common stock % % Dividend yield % % Expected option term in years The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility is based on historical volatility of our common stock, and the expected option term represents the period of time that the stock options granted are expected to be outstanding based on historical exercise trends. The dividend yield represents our anticipated cash dividends at the grant date over the expected option term. A summary of stock option activity for the three years ended May 31, 2015 consisted of the following (shares in thousands): 2015 2014 2013 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at beginning of year $ $ $ Granted — $ — $ $ Exercised ) $ ) $ ) $ Cancelled ) $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at end of year $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options exercisable at end of year $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The total fair value of stock options that vested during fiscal 2015, 2014, and 2013 was $3.1 million, $2.0 million, and $3.6 million, respectively. The total intrinsic value of stock options exercised during fiscal 2015, 2014, and 2013 was $11.1 million, $4.3 million, and $0.5 million, respectively. The aggregate intrinsic value of options outstanding was $16.0 million and $15.2 million as of May 31, 2015 and 2014, respectively. The tax benefit realized from stock options exercised during fiscal 2015, 2014, and 2013 was $2.4 million, $1.0 million, and zero, respectively. Expense charged to operations for stock options during fiscal 2015, 2014, and 2013 was $2.9 million, $3.8 million, and $3.5 million, respectively, recorded in selling, general and administrative expenses. As of May 31, 2015, we had $6.7 million of unrecognized compensation expense related to stock options that will be amortized over an average period of 1.4 years. The following table provides additional information regarding stock options outstanding as of May 31, 2015 (shares in thousands): Options Outstanding Options Exercisable Option Exercise Price Range Number Outstanding as of 5/31/15 Weighted-Average Remaining Contractual Life in Years Weighted- Average Exercise Price Number Exercisable as of 5/31/15 Weighted- Average Exercise Price $10.00 - $15.00 $ $ $15.01 - $20.00 $ $ $20.01 - $34.50 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restricted Stock We provide executives and other key employees an opportunity to be awarded performance-based and time-based restricted stock. The performance-based awards are contingent upon the achievement of certain performance objectives, including net income and return on capital. During fiscal 2015, 2014, and 2013, we granted 188,125, 60,808, and 53,280 of performance-based restricted shares, respectively. Time-based restricted shares of 97,581, 60,808, and 65,780 were granted to executives and key employees during fiscal 2015, 2014, and 2013, respectively. We also award time-based restricted stock to our non-employee directors as part of their annual compensation. Time-based restricted shares of 45,000, 45,000, and 48,333 were granted to members of the Board of Directors during fiscal 2015, 2014, and 2013, respectively. The fair value of restricted shares is the market value of our common stock on the date of grant. Expense related to all restricted share programs during fiscal 2015, 2014, and 2013 was $4.9 million, $4.9 million, and $7.6 million, respectively, and recorded in selling, general and administrative expenses. Restricted share activity during the fiscal year ended May 31, 2015 was as follows (shares in thousands): Number of Shares Weighted Average Fair Value on Grant Date Nonvested at May 31, 2014 $ Granted $ Vested ) $ Forfeited ) $ ​ ​ ​ ​ ​ ​ ​ ​ Nonvested at May 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of May 31, 2015, we had $8.5 million of unearned compensation related to restricted shares that will be amortized to expense over a weighted average period of 1.3 years. Shareholders' Rights Plan Pursuant to a shareholder rights plan adopted in 2007, each outstanding share of our common stock carries with it a Right to purchase one share at a price of $140 per share. The Rights become exercisable (and separate from the shares) when certain specified events occur, including the acquisition of 15% or more of the common stock by a person or group (an "Acquiring Person") or the commencement of a tender or exchange offer for 15% or more of the common stock. In the event that an Acquiring Person acquires 15% or more of the common stock, or if we are the surviving corporation in a merger involving an Acquiring Person or if the Acquiring Person engages in certain types of self-dealing transactions, each Right entitles the holder to purchase for $140 per share (or the then-current exercise price), shares of our common stock having a market value of $280 (or two times the exercise price), subject to certain exceptions. Similarly, if we are acquired in a merger or other business combination or 50% or more of our assets or earning power is sold, each Right entitles the holder to purchase at the then-current exercise price that number of shares of common stock of the surviving corporation having a market value of two times the exercise price. The Rights do not entitle the holder thereof to vote or to receive dividends. The Rights will expire on August 6, 2017, and may be redeemed by us for $.01 per Right under certain circumstances. |
Income Taxes
Income Taxes | 12 Months Ended |
May. 31, 2015 | |
Income Taxes | |
Income Taxes | 6. Income Taxes The provision for income tax (benefit) on income from continuing operations includes the following components: For the Year Ended May 31, 2015 2014 2013 Current: Federal $ $ $ ) State ) Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) Deferred ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The provision for income taxes on income from continuing operations differs from the amount computed by applying the U.S. federal statutory income tax rate of 35% for fiscal 2015, 2014, and 2013 to income before taxes (benefit), due to the following: For the Year Ended May 31, 2015 2014 2013 Provision for income tax (benefit) at the federal statutory rate $ ) $ $ State income taxes, net of federal benefit and refunds Federal adjustments ) Domestic Production Activities Deduction ) ) — State adjustments — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for income tax (benefit) $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) before provision for income tax (benefit) includes the following components: For the Year Ended May 31, 2015 2014 2013 Domestic $ ) $ $ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities and assets result primarily from the differences in the timing of the recognition of transactions for financial reporting and income tax purposes. During the fourth quarter of fiscal 2015, we identified certain classification errors within our deferred tax asset and liability accounts as of May 31, 2014. These errors did not impact the net deferred tax liability at May 31, 2014 of $132.1 million. We have revised the components of our deferred tax assets and liabilities in the following table and our Consolidated Balance Sheet as of May 31, 2014 to reflect a decrease of $5.5 million in both Deferred tax assets—current and Deferred tax liabilities—noncurrent . We have concluded these errors were not material to any prior reporting periods. Our deferred tax liabilities and assets consist of the following components: May 31, 2015 2014 Deferred tax assets-current attributable to: Inventory costs $ $ Impairment of PSM assets — Advanced billings Employee benefits Other — ​ ​ ​ ​ ​ ​ ​ ​ Total net deferred tax assets-current ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax assets-noncurrent attributable to: Postretirement benefits Advanced billings Foreign intangible assets — Other ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets-noncurrent ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets net of valuation allowance $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities attributable to: Depreciation $ ) $ ) Capitalized program development costs — ) Foreign intangible assets — ) Other ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax liabilities $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of May 31, 2015, we have determined that the realization of our deferred tax assets is more likely than not and that a valuation allowance is not required except for certain state net operating losses and credits. Our history of operating earnings, our expectations for continued future earnings, the nature of certain of our deferred tax assets and the scheduled reversal of deferred tax liabilities, primarily related to depreciation, support the recoverability of the deferred tax assets. Income tax receivable at May 31, 2015 and 2014 was $2.1 million and $14.8 million, respectively, and is included in Deposits, prepaids and other on the Consolidated Balance Sheet. Our fiscal 2015 effective income tax rate was 34.3% compared to 32.0% in fiscal 2014 which included a $2.0 million reduction in income tax expense related to changes in estimates originally used in the tax provision which were adjusted to actual on the federal income tax return. In addition, our higher taxable income in fiscal 2014 provided a greater tax benefit related to the Domestic Production Activities Deduction in accordance with Internal Revenue Code Section 199. Our fiscal 2013 effective income tax rate was 34.2%, which included a $1.3 million reduction in income tax expense related to the reduction of our state income tax rate from continued implementation of state tax planning strategies. Our state tax planning strategies included new corporate entities, including the restructure of one of our significant business units. Fiscal years 2013 and subsequent are open for examination. Various states and foreign jurisdictions also remain open subject to their applicable statute of limitations. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
May. 31, 2015 | |
Earnings per Share | |
Earnings per Share | 7. Earnings Per Share The computation of basic earnings per share is based on the weighted average number of common shares outstanding during each period. The computation of diluted earnings per share is based on the weighted average number of common shares outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, shares issuable upon vesting of restricted stock awards and shares to be issued upon conversion of convertible debt. We use the "if-converted" method in calculating the diluted earnings per share effect of the assumed conversion of our contingently convertible debt issued in fiscal 2006 because the principal for that issuance can be settled in stock, cash or a combination thereof. Under the "if converted" method, the after-tax effect of interest expense related to the convertible securities is added back to net income, and the convertible debt is assumed to have been converted into common shares at the beginning of the period. In accordance with ASC 260-10-45, Share-Based Payment Arrangements and Participating Securities and the Two-Class Method , our unvested restricted stock awards are deemed participating securities since these shares are entitled to participate in dividends declared on common shares. During periods of net income, the calculation of earnings per share for common stock excludes income attributable to unvested restricted stock awards from the numerator and excludes the dilutive impact of those shares from the denominator. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company. The following tables provide a reconciliation of the computations of basic and diluted earnings per share information for each of the years in the three-year period ended May 31, 2015 (shares in millions). For the Year Ended May 31, 2015 2014 2013 Basic EPS: Income (Loss) from continuing operations $ ) $ $ Less income attributable to participating shares ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from continuing operations attributable to common shareholders ) Income from discontinued operations attributable to common shareholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to common shareholders for earnings per share—basic $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted EPS: Income (Loss) from continuing operations $ ) $ $ Add after-tax interest on convertible debt — — Less income attributable to participating shares ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from continuing operations attributable to common shareholders ) Income from discontinued operations attributable to common shareholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to common shareholders for earnings per share—diluted $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding—basic Additional shares from assumed conversion of debt — — Additional shares from assumed exercise of stock options ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding—diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share—basic: Earnings (Loss) from continuing operations $ ) $ $ Earnings from discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share—basic $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share—diluted: Earnings (Loss) from continuing operations $ ) $ $ Earnings from discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share—diluted $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At May 31, 2015, 2014 and 2013, respectively, options to purchase 168,200 shares, 180,000 shares, and 872,200 shares of common stock were outstanding, but were not included in the computation of diluted earnings per share, because the exercise price of these options was greater than the average market price of the common shares for the period then ended. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
May. 31, 2015 | |
Employee Benefit Plans | |
Employee Benefit Plans | 8. Employee Benefit Plans Defined Benefit Plans Prior to January 1, 2000, the pension plan for domestic salaried and non-union hourly employees had a benefit formula based primarily on years of service and compensation. Effective January 1, 2000, we converted our defined benefit plan for substantially all domestic salaried and certain hourly employees to a cash balance pension plan. Under the cash balance pension plan, the retirement benefit is expressed as a dollar amount in an account that grows with annual pay-based credits and interest on the account balance. The interest crediting rate under our cash balance plan is determined quarterly and is equal to 100% of the average 30-year treasury rate for the second month preceding the applicable quarter published by the Internal Revenue Service. The average interest crediting rate under our cash balance plan for the fiscal year ended May 31, 2015 was 4.5%. Effective June 1, 2005, the existing cash balance plan was frozen and the annual pay-based credits were discontinued. Also effective June 1, 2005, the defined contribution plan was modified to include increased employer contributions and an enhanced profit sharing formula. Defined pension benefits for certain union hourly employees are based primarily on a fixed amount per year of service. We also have a defined benefit pension plan covering certain employees in the Netherlands. Certain foreign subsidiaries of Telair Cargo Group also maintained defined benefit pension plans in Germany and Norway with the plans' assets and obligations transferred to the new owners upon the closing of the Telair Cargo Group sale. Benefit formulas are based generally on years of service and compensation. It is the policy of these subsidiaries to fund at least the minimum amounts required by local laws and regulations. We provide eligible outside directors with benefits upon retirement on or after age 65 provided they have completed at least five years of service as a director. Benefits are paid quarterly in cash equal to 25% of the annual retainer fee payable to active outside directors. Payment of benefits commences upon retirement and continues for a period equal to the total number of years of the retired director's service up to a maximum of ten years, or death, whichever occurs first. In fiscal 2001, we terminated this plan for any new members of the Board of Directors first elected after May 31, 2001. No current directors participate in this plan. The change to our projected benefit obligation and the fair value of our plan assets for our pension plans in the United States and other countries was as follows: May 31, 2015 2014 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ $ Sale of Telair Cargo Group ) — Service cost Interest cost Participant contributions Net actuarial loss Benefit payments ) ) Plan change ) Foreign currency adjustment ) ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligation at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ Change in the fair value of plan assets: Fair value of plan assets at beginning of year $ $ Actual return on plan assets Employer contributions Participant contributions Benefit payments ) ) Foreign currency adjustment ) ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ Funded status at end of year $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts recognized in the Consolidated Balance Sheets consisted of the following: May 31, 2015 2014 Accrued liabilities $ ) $ ) Other liabilities and deferred income ) ) ​ ​ ​ ​ ​ ​ ​ ​ Funded status at end of year $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts recognized in accumulated other comprehensive loss at May 31, 2015 and 2014, respectively, consisted of the following: May 31, 2015 2014 Actuarial loss $ $ Prior service cost (credit) ) ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For all of our pension plans, both the projected benefit obligation and the accumulated benefit obligation are in excess of the individual plans' assets. The accumulated benefit obligation for all pension plans was $136.6 million and $134.4 million as of May 31, 2015 and 2014, respectively. Net Periodic Benefit Cost Pension expense charged to the Consolidated Statements of Income includes the following components: For the Year Ended May 31, 2015 2014 2013 Service cost $ $ $ Interest cost Expected return on plan assets ) ) ) Curtailment — — Amortization of prior service cost Recognized net actuarial loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The estimated amounts to be amortized from accumulated other comprehensive loss into expense during fiscal 2016 are as follows: Net actuarial loss $ Prior service cost ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assumptions The assumptions used in accounting for our plans are estimates of factors including, among other things, the amount and timing of future benefit payments. The following table presents the key weighted-average assumptions used in the measurement of our projected benefit obligations: May 31, 2015 2014 Discount rate: Domestic plans % % International plans Rate of compensation increase: Domestic plans % % International plans A summary of the weighted-average assumptions used to determine net periodic pension expense is as follows: For the Year Ended May 31, 2015 2014 2013 Discount rate: Domestic plans % % % International plans Rate of compensation increase: Domestic plans % % % International plans Expected long-term rate on plan assets: Domestic plans % % % International plans The discount rate was determined by projecting the expected future benefit payments as defined for the projected benefit obligation, discounting those expected payments using a theoretical zero-coupon spot yield curve derived from a universe of high-quality bonds as of the measurement date, and solving for the single equivalent discount rate that resulted in the same projected benefit obligation. Plan Assets The following table sets forth the actual asset allocation and target allocations for our U.S. pension plans: May 31, Target Asset Allocation 2015 2014 Equity securities % % 45 - 75 % Fixed income securities 15 - 25 % Other 0 - 25 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The assets of U.S pension plans are invested in compliance with the Employee Retirement Income Security Act of 1974. The investment goals are to provide a total return that, over the long term, optimizes the long-term return on plan assets at an acceptable risk, and to maintain a broad diversification across asset classes and among investment managers. We believe that there are no significant concentrations of risk within our plan assets as of May 31, 2015. Direct investments in our securities and the use of derivatives for the purpose of speculation are not permitted. The assets of the U.S. pension plans are invested primarily in equity and fixed income mutual funds, individual common stocks, and fund-of-funds hedge funds. The assets of the non-domestic plan are invested in funds-of-funds where each fund holds a portfolio of equity and fixed income mutual funds. To develop our expected long-term rate of return assumption on domestic plans, we use long-term historical return information for our targeted asset mix and current market conditions. The expected return for each asset class is weighted based on the target asset allocation to develop the expected long-term rate of return on plan assets assumption. The actual return on plan assets for the years ending May 31, 2015 and 2014 has exceeded our projected long-term rate of return on assets due to strong corporate bond and equity markets that generated asset returns in excess of historical trends and have exceeded the returns we expect these assets to achieve over the long-term. The following table sets forth by level, within the fair value hierarchy, pension plan assets at their fair value as of May 31, 2015: Level 1 1 Level 2 2 Level 3 3 Total Equity securities: U.S. common stock $ $ — $ — $ U.S. mutual funds — — International common stock — — International mutual funds — — Fixed income: Government securities and corporate bond mutual funds — — Funds-of-funds — Hedge funds — — Cash and cash equivalents — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total investments $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table sets forth by level, within the fair value hierarchy, pension plan assets at their fair value as of May 31, 2014: Level 1 1 Level 2 2 Level 3 3 Total Equity securities: U.S. common stock $ $ — $ — $ U.S. mutual funds — — International common stock — — International mutual funds — — Fixed income: Government securities and corporate bond mutual funds — — Funds-of-funds — Hedge funds — — Cash and cash equivalents — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total investments $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 Quoted prices in active markets for identical assets that we have the ability to access as of the reporting date. 2 Inputs other than quoted prices included within Level 1 that are directly observable for the asset or indirectly observable through corroboration with observable market data. 3 Unobservable inputs, such as internally developed pricing models or third party valuations for the asset due to little or no market activity for the asset. The following table presents the reconciliation of Level 3 pension assets measured at fair value for the fiscal years ended May 31, 2015 and 2014: Hedge Funds Fund-of-funds Total Balance as of May 31, 2013 $ $ $ Sales ) ) ) Purchases Return on plan assets related to: Assets sold by May 31, 2014 — ) ) Assets still held at May 31, 2014 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2014 Purchases — Return on plan assets related to assets still held at May 31, 2015 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2015 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Valuation Techniques Used to Determine Fair Value Cash equivalents are investments with maturities of three months or less when purchased. The fair values are based on observable market prices and categorized as Level 1. With respect to individually held equity securities, including investments in U.S. and international securities, the trustees obtain prices from pricing services, whose prices are obtained from direct feeds from market exchanges, which we are able to independently corroborate. Equity securities held individually are primarily traded on exchanges that contain only actively traded securities, due to the volume trading requirements imposed by these exchanges. Equity securities are valued based on quoted prices in active markets and categorized as Level 1. Equity and fixed income mutual funds are maintained by investment companies that hold certain investments in accordance with a stated set of fund objectives, which are consistent with our overall investment strategy. The values of some of these funds are publicly quoted. For equity and fixed income mutual funds which are publicly quoted, the funds are valued based on quoted prices in active markets and have been categorized as Level 1. For equity and fixed income mutual funds which are not publicly quoted, the fund administrators value the funds using the net asset value per fund share, derived from quoted prices in active markets of the underlying securities. These funds have been categorized as Level 2. As our funds-of-funds investments are also derived from quoted prices in active markets, we have categorized the funds-of-funds investments as Level 2. Hedge fund investments include those seeking to maximize absolute returns using a broad range of strategies to enhance returns and provide additional diversification. The fair value of hedge funds is determined using net asset value or its equivalent subject to certain restrictions, such as a lock-up period. As we may be limited in our ability to redeem the investments at the measurement date or within a reasonable period of time, the hedge fund investments are categorized as Level 3. Future Benefit Payments and Funding The following table summarizes our estimated future pension payments by fiscal year: Fiscal Year 2016 2017 2018 2019 2020 2021 to 2025 Estimated future pension payments $ $ $ $ $ $ Our contribution policy for the domestic plans is to contribute annually, at a minimum, an amount which is deductible for federal income tax purposes and that is sufficient to meet actuarially computed pension benefits. We anticipate contributing approximately $3.5 million during fiscal 2016. Postretirement Benefits Other Than Pensions We provide health and life insurance benefits for certain eligible retirees. The postretirement plan is unfunded and in fiscal 1995, we completed termination of postretirement health and life insurance benefits attributable to future services of collective bargaining and other domestic employees. The unfunded projected benefit obligation for this plan was $1.0 million and $0.9 million as of May 31, 2015 and 2014, respectively. We have omitted substantially all of the required disclosures related to this plan because the plan is not material to our consolidated financial position or results of operations. Defined Contribution Plan The defined contribution plan is a profit sharing plan which is intended to qualify as a 401(k) plan under the Internal Revenue Code. Under the plan, employees may contribute up to 75% of their pretax compensation, subject to applicable regulatory limits. We may make matching contributions up to 5% of compensation as well as discretionary profit sharing contributions. Our contributions vest on a pro-rata basis during the first three years of employment. We also provide profit sharing benefits for certain executives and key employees to supplement the benefits provided by the defined contribution plan. Expense charged to the Consolidated Statements of Income for our matching contributions, including profit sharing contributions, was $11.9 million in fiscal 2015, $11.8 million in fiscal 2014 and $13.0 million in fiscal 2013 for these plans. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
May. 31, 2015 | |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Loss | 9. Accumulated Other Comprehensive Loss Changes in our accumulated other comprehensive loss ("AOCL") by component for each of the years in the three-year period ended May 31, 2015 were as follows: Currency Translation Adjustments Pensions Plans Derivative Instruments Total Balance as of June 1, 2012 $ ) $ ) $ ) $ ) Other comprehensive loss before reclassifications Amounts reclassified from AOCL — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2013 ) ) ) ) Other comprehensive loss before reclassifications ) Amounts reclassified from AOCL — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other comprehensive income (loss) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2014 ) ) ) Other comprehensive loss before reclassifications ) ) ) Sale of Telair Cargo Group — Amounts reclassified from AOCL — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other comprehensive income (loss) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2015 $ $ ) $ — $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Aircraft Portfolio
Aircraft Portfolio | 12 Months Ended |
May. 31, 2015 | |
Aircraft Portfolio | |
Aircraft Portfolio | 10. Aircraft Portfolio Aircraft Owned with Joint Venture Partners We have ownership interests in three aircraft with joint venture partners at May 31, 2015 which are available for lease or sale to commercial air carriers. Our equity investment was approximately $20.5 million and $28.7 million as of May 31, 2015 and 2014, respectively, and is included in Investment in joint ventures on the Consolidated Balance Sheet. Included in the May 31, 2015 and 2014 amounts are notes receivable in the amount of $5.7 million and $12.2 million, respectively, for aircraft which the joint ventures have sold. Our aircraft joint ventures represent investments in limited liability companies that are accounted for under the equity method of accounting. Our membership interest in each of these joint ventures is 50%, and the primary business of these joint ventures is the acquisition, ownership, lease and disposition of certain commercial aircraft. Aircraft were purchased with cash contributions by the members of the joint ventures and debt financing provided on a limited recourse basis. Under the terms of servicing agreements with certain of the joint ventures, we provide administrative services and technical advisory services, including aircraft evaluations, oversight and logistical support of the maintenance process and records management. We also provide remarketing services with respect to the divestiture of aircraft by the joint ventures. During fiscal 2015, 2014 and 2013, we were paid $0.1 million, $0.1 million and $0.5 million, respectively, for such services. The income tax benefit or expense related to the operations of the joint ventures is recorded by the member companies. Distributions from joint ventures are classified as operating or investing activities in the Consolidated Statements of Cash Flows based upon an evaluation of the specific facts and circumstances of each distribution. Summarized financial information for these joint ventures is as follows: For the Year Ended May 31, 2015 2014 2013 Sales $ $ $ Income before provision for income taxes During fiscal 2015, the joint venture partners sold one aircraft for $5.1 million. During fiscal 2013, the joint venture partners sold twelve aircraft for $77.9 million. May 31, 2015 2014 Balance sheet information: Assets $ $ Debt Members' capital Information relating to aircraft type, year of manufacture, lessee, lease expiration date and expected disposition upon lease expiration of the three aircraft owned with joint venture partners as of May 31, 2015 is as follows: Quantity Aircraft Type Year Manufactured Lessee Lease Expiration Date (FY) Post-Lease Disposition 2 767-300 1991 United Airlines 2022 Sale/Re-lease 1 737-400 1993 — — Sale/Re-lease ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Wholly-Owned Aircraft In addition to the commercial aircraft owned with joint venture partners, we also previously owned 100% of two aircraft which we sold in the fourth quarter of fiscal 2015 for $11.0 million. The carrying value of these two aircraft was $25.8 million which resulted in the recognition of a loss on sale of $14.8 million. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
May. 31, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | 11. Commitments and Contingencies On October 3, 2003, we entered into a sale-leaseback transaction whereby we sold and leased back a facility located in Garden City, New York. The lease is classified as an operating lease. Net proceeds from the sale of the facility were $14.0 million and the cost and related accumulated depreciation of the facility of $9.5 million and $4.6 million, respectively, were removed from the Consolidated Balance Sheet at the time of sale. The gain realized on the sale of $9.1 million has been deferred and is being amortized over the 20-year lease term. As of May 31, 2015 and 2014, the unamortized balance of the deferred gain was approximately $3.8 million and $4.3 million, respectively, and is included in Other liabilities and deferred income on the Consolidated Balance Sheet. In May 2015, we entered into a sale-leaseback transaction related to our two S-92 rotary-wing aircraft. The proceeds of $40.3 million have been deferred as a sales-leaseback advance pending completion of the sale transaction. The lease is classified as an operating lease and has a term of two years. In addition to the leases described above, we lease other facilities and equipment under agreements that are classified as operating leases that expire at various dates through 2034. Future minimum payments under all operating leases at May 31, 2015 are as follows: Year Facilities and Equipment 2016 $ 2017 2018 2019 2020 2021 and thereafter Rental expense for facilities and equipment during fiscal years 2015, 2014, and 2013 was $33.3 million, $30.6 million, and $30.0 million, respectively. We enter into purchase obligations which arise in the ordinary course of business and represent a binding commitment to acquire inventory, including raw materials, parts and components, as well as equipment to support the operations of our business. The aggregate amount of purchase obligations due in each of the next five fiscal years is $222.6 million in 2016, $15.2 million in 2017, $4.1 million in 2018 and $0.1 in 2019 and 2020. We routinely issue letters of credit and performance bonds in the ordinary course of our business. These instruments are typically issued in conjunction with insurance contracts or other business requirements. The total of these instruments outstanding at May 31, 2015 was approximately $15.4 million. We are involved in various claims and legal actions, including environmental matters, arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on our consolidated financial condition or results of operations. |
Other Noncurrent Assets
Other Noncurrent Assets | 12 Months Ended |
May. 31, 2015 | |
Other Noncurrent Assets | |
Other Noncurrent Assets | 12. Other Noncurrent Assets At May 31, 2015 and 2014, other noncurrent assets consisted of the following: May 31, 2015 2014 Assets under deferred compensation plan $ $ Cash surrender value of life insurance Costs in excess of billings License fees Notes receivable Debt issuance costs Other ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ License Fees In June 2011, we entered into a ten-year agreement with Unison Industries to be the exclusive worldwide aftermarket distributor for Unison's electrical components, sensors, switches and other systems for aircraft and industrial uses. In connection with the agreement, we agreed to pay Unison Industries $20.0 million for the exclusive distribution rights with $7.0 million paid in June 2011, and $1.3 million payable by January 31 of each calendar year beginning in January 2012 through 2021. As of May 31, 2015 and 2014, the unamortized balance of the license is $10.4 million and $11.9 million, respectively, and is being amortized over a ten-year period. The current portion of the deferred payments of $1.3 million is recorded in Accrued liabilities and the long-term portion of $5.1 million is included in Other liabilities and deferred income on the Consolidated Balance Sheet. |
Business Segment Information
Business Segment Information | 12 Months Ended |
May. 31, 2015 | |
Business Segment Information | |
Business Segment Information | 13. Business Segment Information Segment Reporting As discussed in Note 2—Discontinued Operations, we began reporting our Telair Cargo Group and PSM businesses as discontinued operations in the third quarter of fiscal 2015. Prior to the decision to sell these two businesses, we reported our activities in the following two business segments: Aviation Services comprised of our supply chain, maintenance, repair and overhaul ("MRO") and airlift activities and Technology Products comprised of our Telair Cargo Group, Precision Systems Manufacturing, and mobility businesses. As a result of the decision to divest the Telair Cargo Group and PSM, we have revised our reportable segments to align to our new organizational structure. We now report our results in two new segments: Aviation Services comprised of supply chain and MRO activities and Expeditionary Services comprised of airlift and mobility activities. This new presentation reflects the way our chief operating decision making officer (Chief Executive Officer) now evaluates performance and our internal organizational and management structure. The Aviation Services segment consists of businesses that provide spares and maintenance support for aircraft operated by our commercial and government/defense customers. Sales in the Aviation Services segment are derived from the sale and lease of a wide variety of new, overhauled and repaired engine and airframe parts and components to the commercial aviation and government and defense markets. We provide customized inventory supply chain management, performance based logistics programs, aircraft component repair management services, and aircraft modifications. The segment also includes repair, maintenance and overhaul of aircraft, landing gear and components. Cost of sales consists principally of the cost of product, direct labor, and overhead. The Expeditionary Services segment consists of businesses that provide products and services supporting the movement of equipment and personnel by the U.S. DoD, foreign governments and non-governmental organizations. Sales in the Expeditionary Services segment are derived from the delivery of airlift services to mostly government and defense customers and the design and manufacture of pallets, shelters, and containers used to support the U.S. military's requirements for a mobile and agile force. We also provide system integration services for specialized command and control systems. Cost of sales consists principally of aircraft maintenance costs, depreciation, the cost of material to manufacture products, direct labor and overhead. Segment results have been reclassified for all periods presented to reflect our new segment presentation. The accounting policies for the segments are the same as those described in Note 1. Our chief operating decision making officer (Chief Executive Officer) evaluates performance based on the reportable segments and utilizes gross profit as a primary profitability measure. Gross profit is calculated by subtracting cost of sales from sales. The assets and certain expenses related to corporate activities are not allocated to the segments. Our reportable segments are aligned principally around differences in products and services. Selected financial information for each segment is as follows: For the Year Ended May 31, 2015 2014 2013 Net sales: Aviation Services $ $ $ Expeditionary Services ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended May 31, 2015 2014 2013 Gross profit: Aviation Services $ $ $ Expeditionary Services ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ May 31, 2015 2014 2013 Total assets: Aviation Services $ $ $ Expeditionary Services Discontinued operations Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended May 31, 2015 2014 2013 Capital expenditures: Aviation Services $ $ $ Expeditionary Services Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total continuing operations Discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended May 31, 2015 2014 2013 Depreciation and amortization: 1 Aviation Services $ $ $ Expeditionary Services Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total continuing operations Discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ 1 Includes depreciation and amortization of stock-based compensation. The following table reconciles segment gross profit to consolidated income before provision for income taxes. For the Year Ended May 31, 2015 2014 2013 Segment gross profit $ $ $ Selling, general and administrative ) ) ) Earnings from joint ventures Loss on extinguishment of debt ) — ) Interest expense ) ) ) Interest income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from continuing operations before provision for income taxes $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The U.S. Department of Defense, other U.S. government agencies and their contractors are our only customers representing 10% or more of total sales in any of the last three fiscal years. Sales by segment for these customers are as follows: For the Year Ended May 31, 2015 2014 2013 Aviation Services $ $ $ Expeditionary Services ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of total sales % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Geographic Data May 31, 2015 2014 Long-lived assets: United States $ $ Europe Other ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales to unaffiliated customers in foreign countries (including sales through foreign sales offices of domestic subsidiaries), were approximately $536.5 million (33.7% of total sales), $456.0 million (26.7% of total sales) and $464.9 million (25.7% of total sales) in fiscal 2015, 2014 and 2013, respectively. |
Selected Quarterly Data (Unaudi
Selected Quarterly Data (Unaudited) | 12 Months Ended |
May. 31, 2015 | |
Selected Quarterly Data (Unaudited) | |
Selected Quarterly Data (Unaudited) | 14. Selected Quarterly Data (Unaudited) The unaudited selected quarterly data for fiscal years ended May 31, 2015 and 2014 is presented below and has been recast to reflect Telair Cargo Group and PSM as discontinued operations for all periods presented: Fiscal 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Full Year Sales $ $ $ $ $ Gross profit ) Income (Loss) from continuing operations attributable to AAR ) ) Income (Loss) from discontinued operations attributable to AAR ) Net income (loss) attributable to AAR ) Earnings (Loss) per share—basic: Continuing operations ) ) Discontinued operations ) Earnings per share—basic ) Earnings (Loss) per share—diluted: Continuing operations ) ) Discontinued operations ) Earnings (Loss) per share—diluted ) Fiscal 2014 First Quarter Second Quarter Third Quarter Fourth Quarter Full Year Sales $ $ $ $ $ Gross profit Income from continuing operations attributable to AAR Income from discontinued operations attributable to AAR Net income attributable to AAR Earnings per share—basic: Continuing operations Discontinued operations Earnings per share—basic Earnings per share—diluted: Continuing operations Discontinued operations Earnings per share—diluted 1 The earnings-per-share computation for the year is a separate, annual calculation. Accordingly, the sum of the quarterly earnings-per-share amounts does not necessarily equal the earnings per share for the year. 2 Fourth quarter loss from continuing operations in fiscal 2015 reflects impairment charges and other losses of $71.4 million related to product lines and inventories identified as underperforming or not part of our strategy going forward in our services businesses and a loss on extinguishment of debt of $44.9 million. 3 Third quarter loss from discontinued operations in fiscal 2015 reflects the impairment of PSM's net assets of $46.4 million. 4 Fourth quarter income from discontinued operations in fiscal 2015 reflects the pre-tax gain on sale of the Telair Cargo Group of $198.6 million partially offset by additional impairment of PSM's net assets of $11.1 million. |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 12 Months Ended |
May. 31, 2015 | |
Allowance for Doubtful Accounts. | |
Allowance for Doubtful Accounts | 15. Allowance for Doubtful Accounts May 31, 2015 2014 2013 Balance, beginning of year $ $ $ Provision charged to operations Deductions for accounts written off, net of recoveries ) ) ) Sale of Telair Cargo Group ) — — Reclassification to assets of discontinued operations ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, end of year $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
May. 31, 2015 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiaries after elimination of intercompany accounts and transactions. The equity method of accounting is used for investments in other companies in which we have significant influence; generally this represents common stock ownership of at least 20% and not more than 50% (see Note 10 for a discussion of aircraft joint ventures). |
Revenue Recognition | Revenue Recognition Sales and related cost of sales for product sales are recognized upon shipment of the product to the customer. Our standard terms and conditions provide that title passes to the customer when the product is shipped to the customer. Sales of certain defense products are recognized upon customer acceptance, which includes transfer of title. Under the majority of our expeditionary airlift services contracts, we are paid and record as revenue a fixed daily amount per aircraft for each day an aircraft is available to perform airlift services. In addition, we are paid and record as revenue an amount which is based on number of hours flown. Sales from services and the related cost of services are generally recognized when customer-owned material is shipped back to the customer. We have adopted this accounting policy because at the time the customer-owned material is shipped back to the customer, all services related to that material are complete as our service agreements generally do not require us to provide services at customer sites. Furthermore, serviced units are typically shipped to the customer immediately upon completion of the related services. Sales and related cost of sales for certain large airframe maintenance contracts and performance-based logistics programs are recognized by the percentage of completion method, based on the relationship of costs incurred to date to the estimated total costs. Lease revenues are recognized as earned. Income from monthly or quarterly rental payments is recorded in the pertinent period according to the lease agreement. However, for leases that provide variable rents, we recognize lease income on a straight-line basis. In addition to a monthly lease rate, some engine leases require an additional rental amount based on the number of hours the engine is used in a particular month. Lease income associated with these contingent rentals is recorded in the period in which actual usage is reported to us by the lessee, which is normally the month following the actual usage. Certain supply chain management programs we provide to our customers contain multiple elements or deliverables, such as program and warehouse management, parts distribution, and maintenance and repair services. We recognize revenue for each element or deliverable that can be identified as a separate unit of accounting at the time of delivery based upon the relative fair value of the products and services. Included in accounts receivable as of May 31, 2015 and 2014, are $21.1 million and $19.7 million, respectively, of unbilled accounts receivable related to our KC10 supply agreement. These unbilled accounts receivable relate to costs we have incurred on parts that were requested and accepted by our customer to support the program. These costs have not been billed by us because the customer has not issued the final paperwork necessary to allow for billing. In addition to the unbilled accounts receivable, included in Other non-current assets on the consolidated balance sheet as of May 31, 2015 and 2014, are $7.5 million and $9.9 million, respectively, of costs in excess of amounts billed for the flight-hour portion of the same KC10 supply agreement. These amounts represent the difference between the amounts of revenue recognized by us driven by costs incurred under the flight hour portion of the program, compared to what was billed. Pursuant to U.S. generally accepted accounting principles, we have to assess the recoverability of the costs in excess of amounts billed by projecting future performance of the flight hour portion of the contract, including an estimate of future flight hours and costs over the life of the program. In fiscal 2013, we established cost savings targets to reduce program spend over the life of the program and we had been successful in achieving these targets. However, beginning in the second half of fiscal 2013 we experienced a decrease in flight hour revenue. This decrease was caused by a 28% decline in flight hours flown primarily due to lower operations tempo. As a result of this unexpected and significant decline in flight hour revenue and a revised forecast indicating lower usage in the future for the fleet, we lowered the revenue and profitability forecast for the flight hour portion of the contract during the fourth quarter of fiscal 2013 resulting in a $29.8 million pre-tax charge. This revised forecast results in a 0% margin over the remaining life of the flight-hour program. No additional adjustments have been recorded in fiscal 2015 or 2014 based on the flight hours and costs incurred to date as well as future expectations for the program. We recorded 0% margin in fiscal 2015 and 2014 on the flight-hour portion of the contract, which resulted in revenue of $46.5 million and $42.4 million in fiscal 2015 and 2014, respectively. We expect to recover the May 31, 2015 balance of the costs in excess of amounts billed of $7.5 million through projected future billings in excess of forecasted costs over the life of the program. Notwithstanding the foregoing, we reserve all our rights under the KC10 supply agreement, at law and in equity, including our rights to recover past and future revenues and expenses associated with the program. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts We maintain an allowance for doubtful accounts to reflect the expected uncollectibility of accounts receivable based on past collection history and specific risks identified among uncollected accounts. In determining the required allowance, we consider factors such as general and industry-specific economic conditions, customer credit history, and our customers' current and expected future financial performance. The majority of our customers are recurring customers with an established payment history. Certain customers are required to undergo an extensive credit check prior to delivery of products or services. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets In accordance with Accounting Standards Codification ("ASC") 350, Intangibles—Goodwill and Other , goodwill and other intangible assets deemed to have indefinite lives are not amortized, but are subject to annual impairment tests. We review and evaluate our goodwill and indefinite life intangible assets for potential impairment at a minimum annually, on May 31, or more frequently if circumstances indicate that impairment is possible. We use a two-step process to evaluate goodwill for impairment. In the first step, we compare the fair value of each reporting unit with the carrying value of the reporting unit, including goodwill. If the estimated fair value of the reporting unit is less than the carrying value of the reporting unit, we would be required to complete a second step to determine the amount of goodwill impairment. The second step of the test requires the allocation of the reporting unit's fair value to its assets and liabilities, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill as if the reporting unit was being acquired in a business combination. If the implied fair value of goodwill is less than the carrying value, the difference is recorded as an impairment loss. We estimate the fair value of each reporting unit using both an income approach based on discounted cash flows and a market approach based on a multiple of earnings. The assumptions we used to estimate the fair value of our reporting units are based on historical performance, as well as forecasts used in our current business plan and require considerable management judgment. We use a discount rate based on our consolidated weighted average cost of capital which is adjusted for each of our reporting units based on their specific risk and size characteristics. The fair value measurements used for our goodwill impairment testing use significant unobservable inputs, which reflect our own assumptions about the inputs that market participants would use in measuring fair value. The fair value of our reporting units is also impacted by our overall market capitalization and may be impacted by volatility in our stock price and assumed control premium, among other items. As of May 31, 2015, we have five reporting units as defined by ASC 350. Step one of the impairment test was completed for the reporting units with assigned goodwill and the estimated fair value for each reporting unit exceeded its net asset carrying value. Accordingly, there was no indication of impairment and the second step was not performed. In connection with the change in reportable segments discussed in Note 13—Business Segment Information and the divestitures discussed in Note 2—Discontinued Operations, we reallocated goodwill across our new segments based on a relative fair value basis. Changes in the carrying amount of goodwill by segment for fiscal 2015 and 2014 are as follows: Aviation Services Expeditionary Services Discontinued Operations Total Balance as of May 31, 2013 $ $ $ $ Acquisition — — Foreign currency translation adjustments — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2014 Reallocation of goodwill — ) — Businesses sold or assets held for sale — — ) ) Foreign currency translation adjustments ) — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2015 $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives. Intangible assets, other than goodwill, are comprised of the following: May 31, 2015 Gross Accumulated Amortization Net Amortizable intangible assets: Customer relationships $ $ ) $ Developed technology ) Lease agreements ) FAA certificates ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) Unamortized intangible assets: Trademarks — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ May 31, 2014 Gross Accumulated Amortization Net Amortizable intangible assets: Customer relationships $ $ ) $ Developed technology ) Lease agreements ) FAA certificates ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) Unamortized intangible assets: Trademarks — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer relationships are being amortized over 10-20 years, developed technology is being amortized over 7-10 years, the lease agreements are being amortized over 18 years, and the FAA certificates are being amortized over 20 years. Amortization expense recorded during fiscal 2015, 2014 and 2013 was $4.6 million, $4.7 million, and $7.7 million, respectively. The estimated aggregate amount of amortization expense for intangible assets in each of the next five fiscal years is $4.4 million in 2016, $4.4 million in 2017, $4.4 million in 2018, $3.8 million in 2019 and $3.5 million in 2020. |
Foreign Currency | Foreign Currency Our foreign subsidiaries utilize the local currency as their functional currency. All balance sheet accounts of foreign subsidiaries transacting business in currencies other than the U.S. dollar are translated at year-end exchange rates. Revenues and expenses are translated at average exchange rates during the year. Translation adjustments are excluded from the results of operations and are recorded in stockholders' equity as a component of accumulated other comprehensive loss until such subsidiaries are liquidated. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid instruments which have original maturities of three months or less when purchased. |
Financial Instruments and Concentrations of Market or Credit Risk | Financial Instruments and Concentrations of Market or Credit Risk Financial instruments that potentially subject us to concentrations of market or credit risk consist principally of trade receivables. While our trade receivables are diverse and represent a number of entities and geographic regions, the majority are with the U.S. Department of Defense and its contractors and entities in the aviation industry. Accounts receivable due from the U.S. Department of Defense were $39.2 million and $50.5 million at May 31, 2015 and 2014, respectively. Additionally, included in accounts receivable as of May 31, 2015 and 2014, are $41.1 million and $48.7 million, respectively, of accounts receivable from a large defense contractor. We perform regular evaluations of customer payment experience, current financial condition, and risk analysis. We may require collateral in the form of security interests in assets, letters of credit, and/or obligation guarantees from financial institutions for transactions executed on other than normal trade terms. The carrying amounts of cash and cash equivalents, accounts receivable, and accounts and trade notes payable approximate fair value because of the short-term maturity of these instruments. The carrying value of long-term debt bearing a variable interest rate approximates fair value. Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. |
Inventories | Inventories Inventories are valued at the lower of cost or market (estimated net realizable value). Cost is determined by the specific identification, average cost, or first-in, first-out methods. From time-to-time, we purchase aircraft and engines for disassembly to individual parts and components. Costs are assigned to these individual parts and components utilizing list prices from original equipment manufacturers and recent sales history. The following is a summary of inventories: May 31, 2015 2014 Raw materials and parts $ $ Work-in-process Aircraft and engine parts, components and finished goods Aircraft held for sale and related support parts ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ We classify certain aircraft from our expeditionary airlift business as assets held for sale at the time management commits to a plan to sell the aircraft, changes to the planned sale are not likely, the aircraft are actively marketed and available for immediate sale, and the sale is expected to be completed within one year. Upon designation of an aircraft as held for sale, we record the aircraft's value at the lower of its carrying value or its estimated fair value, less estimated costs to sell. Assets held for sale are not depreciated. Aircraft may be classified as assets held for sale for more than one year as we continue to actively market the aircraft at reasonable prices. Certain aircraft types we currently have available for sale are specifically designed for particular functions which limits the marketability of those assets. We had eleven aircraft held for sale comprised of five fixed-wing and six rotary-wing aircraft at May 31, 2015 and nine aircraft held for sale comprised of five fixed-wing and four rotary-wing aircraft at May 31, 2014. During fiscal 2015, we recognized impairment charges of $8.9 million reflecting the decrease in fair value for certain aircraft held for sale and related rotable assets. During the fourth quarter of fiscal 2015, we entered into a sale-leaseback transaction for our two S-92 rotary-wing aircraft. We received proceeds of $40.3 million in fiscal 2015 which have been deferred as a sale-leaseback advance pending completion of the sale transaction, which is expected to occur in fiscal 2016. |
Equipment under Leases | Equipment under Leases Lease revenue is recognized as earned. The cost of the asset under lease is the original purchase price plus overhaul costs. Depreciation for aircraft is computed using the straight-line method over the estimated service life of the equipment. The balance sheet classification of equipment under lease is generally based on lease term, with fixed-term leases less than twelve months generally classified as short-term and all others generally classified as long-term. Equipment on short-term lease includes aircraft engines and parts on or available for lease to satisfy customers' immediate short-term requirements. The leases are renewable with fixed terms, which generally vary from one to twelve months. In conjunction with our decision to exit certain product lines in our landing gear business, we recognized an impairment charge of $17.7 million related to rotable assets in fiscal 2015. Equipment on long-term lease consists of engines on lease with commercial airlines generally for more than twelve months and rotable parts used to support long-term supply chain programs. The rotable parts included in equipment on long-term lease are being depreciated on a straight-line basis over their estimated useful lives. During the fourth quarter of fiscal 2015, we sold our two remaining wholly-owned aircraft which were on long-term leases for $11.0 million which resulted in a loss on sale of $14.8 million. The following is a summary of equipment on or available for long-term lease: May 31, 2015 2014 Aircraft engines and rotable parts $ $ Aircraft — ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Future rent due to us under non-cancelable leases during each of the next five fiscal years is $18.4 million in 2016, $17.6 million in 2017, $17.2 million in 2018, $16.7 million in 2019, and $16.1 million in 2020. |
Property, Plant and Equipment | Property, Plant and Equipment We record property, plant and equipment at cost. Depreciation is computed on the straight-line method over useful lives of 10-40 years for buildings and improvements and 3-10 years for equipment, furniture and fixtures, and capitalized software. Aircraft, major components in service, and associated rotable assets to support our expeditionary airlift services are depreciated over their estimated useful lives, which is generally 7-30 years. Leasehold improvements are amortized over the shorter of the estimated useful life or the term of the applicable lease. Repair and maintenance expenditures are expensed as incurred. Upon sale or disposal, cost and accumulated depreciation are removed from the accounts, and related gains and losses are included in results of operations. In accordance with ASC 360, Property, Plant and Equipment , we are required to test for impairment of long-lived assets whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable from its undiscounted cash flows. We utilize certain assumptions to estimate future undiscounted cash flows, including demand for our services, future market conditions and trends, business development pipeline of opportunities, current and future lease rates, lease terms, and residual values. Where a determination has been made to exit an entire asset group, the asset group is reviewed for potential impairment with an impairment loss recognized in the period in which it is determined that the aggregate carrying amount of assets within an asset group is not recoverable. |
Capitalized Program Development Costs | Capitalized Program Development Costs Our Telair Cargo Group capitalized $139.8 million, net of reimbursements, as of May 31, 2014 related to costs associated with the engineering and development of the A400M cargo system. The Telair Cargo Group was sold in March 2015 as further discussed in Note 2—Discontinued Operations. These capitalized costs are classified as current and non-current assets on the May 31, 2014 Consolidated Balance Sheet. At May 31, 2014, current assets include $27.6 million in Deposits, prepaids and other and non-current assets include $112.2 million in Capitalized program development costs. The capitalized development costs were recovered upon the sale of the Telair Cargo Group. |
Income Taxes | Income Taxes We are subject to income taxes in the U.S., state, and several foreign jurisdictions. In the ordinary course of business, there can be transactions and calculations where the ultimate tax determination is uncertain. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns in accordance with applicable accounting guidance for accounting for income taxes, using currently enacted tax rates in effect for the year in which the differences are expected to reverse. We record a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. The accounting for uncertainty in income taxes requires a more-likely-than-not threshold for financial statement recognition of tax positions taken or expected to be taken in a tax return. Where necessary, we record a liability for the difference between the benefit recognized for financial statement purposes and the tax position taken or expected to be taken on our tax return. To the extent that our assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. |
Supplemental Information on Cash Flows | Supplemental Information on Cash Flows Supplemental information on cash flows is as follows: For the Year Ended May 31, 2015 2014 2013 Interest paid $ $ $ Income taxes paid Income tax refunds and interest received On May 29, 2015, we repurchased 4,185,960 shares of our common stock at a price of $31.90 per share pursuant to a tender offer utilizing $133.5 million cash on hand. Fees and expenses of $1.2 million were incurred related to the tender offer and were recorded in treasury stock. In addition to the tender offer, we also repurchased common shares of $16.8 million and re-issued shares upon exercise of stock options, net of shares withheld to satisfy statutory tax obligations, of $3.6 million during fiscal 2015. During fiscal 2014, treasury stock decreased $1.8 million reflecting the re-issuance of shares upon exercise of stock options, net of shares withheld to satisfy statutory tax obligations, and restricted stock award grants of $2.8 million, partially offset by the purchase of treasury shares of $1.0 million. During fiscal 2013, treasury stock increased $9.7 million reflecting the purchase of treasury shares of $14.6 million, partially offset by the re-issuance of shares upon exercise of stock options, net of shares withheld to satisfy statutory tax obligations, and restricted stock award grants of $4.9 million. |
Use of Estimates | Use of Estimates We have made estimates and utilized certain assumptions relating to the reporting of assets and liabilities and the disclosures of contingent liabilities to prepare these Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States. Actual results could differ from those estimates. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers , which provides guidance for revenue recognition. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in ASC 605, Revenue Recognition , and most industry-specific guidance. This ASU also supersedes certain cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts . This new standard will be effective for us beginning June 1, 2017, however the FASB issued a proposed ASU on April 29, 2015 which would defer the effective date of the new standard for one year. We are currently evaluating the impact of the adoption of this new standard on our consolidated financial statements. In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity which requires that a disposal representing a strategic shift that has or will have a major effect on an entity's financial results or a business activity classified as held for sale should be reported as discontinued operations. The amendments also expand the disclosure requirements for discontinued operations and add new disclosures for individually significant dispositions that do not qualify as discontinued operations. The Company adopted this guidance on June 1, 2015 which will result in expanded disclosures related to the income statement and cash flow activities for our discontinued operations. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . This standard amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. This new standard will be effective for us beginning June 1, 2016 with early adoption permitted. We are currently evaluating the impact of the adoption of this new standard on our consolidated financial statements. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
May. 31, 2015 | |
Summary of Significant Accounting Policies | |
Schedule of goodwill by reportable segment | Aviation Services Expeditionary Services Discontinued Operations Total Balance as of May 31, 2013 $ $ $ $ Acquisition — — Foreign currency translation adjustments — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2014 Reallocation of goodwill — ) — Businesses sold or assets held for sale — — ) ) Foreign currency translation adjustments ) — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2015 $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of intangible assets, other than goodwill | May 31, 2015 Gross Accumulated Amortization Net Amortizable intangible assets: Customer relationships $ $ ) $ Developed technology ) Lease agreements ) FAA certificates ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) Unamortized intangible assets: Trademarks — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ May 31, 2014 Gross Accumulated Amortization Net Amortizable intangible assets: Customer relationships $ $ ) $ Developed technology ) Lease agreements ) FAA certificates ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) Unamortized intangible assets: Trademarks — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of inventories | May 31, 2015 2014 Raw materials and parts $ $ Work-in-process Aircraft and engine parts, components and finished goods Aircraft held for sale and related support parts ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of equipment on or available for long-term lease | May 31, 2015 2014 Aircraft engines and rotable parts $ $ Aircraft — ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of supplemental information on cash flow | For the Year Ended May 31, 2015 2014 2013 Interest paid $ $ $ Income taxes paid Income tax refunds and interest received |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 12 Months Ended |
May. 31, 2015 | |
Financing Arrangements | |
Summary of carrying amount of debt | May 31, 2015 2014 Revolving Credit Facility expiring March 24, 2020 with interest payable monthly $ $ Industrial revenue bond (secured by property, plant and equipment) due August 1, 2018 with interest payable monthly Note payable due March 9, 2017 with floating interest rate, payable semi-annually on June 1 and December 1 Convertible notes payable due March 1, 2016 with interest at 2.25% payable semi-annually on March 1 and September 1 Notes payable originally due January 15, 2022 with interest at 7.25% payable semi-annually on January 15 and July 15 — Other 1 ​ ​ ​ ​ ​ ​ ​ ​ Total debt Current maturities of debt ) ) ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt $ $ 1. Included in Other is a mortgage loan (secured by Wood Dale, Illinois facility) due August 1, 2015 of $11.0 million and $11.0 million, 1.75% convertible notes due February 1, 2015 of $0 and $29.8 million, and a secured credit facility originally due April 23, 2015 of $0 million and $29.9 million at May 31, 2015 and 2014, respectively. |
Schedule of borrowing activity under the Credit Agreement | For the Year Ended May 31, 2015 2014 2013 Maximum amount borrowed $ $ $ Average daily borrowings Average interest rate during the year % % % |
Schedule of interest expense associated with the convertible notes | For the Year Ended May 31, 2015 2014 2013 Coupon interest $ $ $ Amortization of deferred financing fees Amortization of discount ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense related to convertible notes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
May. 31, 2015 | |
Accounting for Stock-Based Compensation | |
Assumptions used in the Black-Scholes option pricing model to estimate the fair value of each stock option grant | Stock Options Granted In Fiscal Year 2014 2013 Risk-free interest rate % % Expected volatility of common stock % % Dividend yield % % Expected option term in years |
Summary of stock option activity | A summary of stock option activity for the three years ended May 31, 2015 consisted of the following (shares in thousands): 2015 2014 2013 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at beginning of year $ $ $ Granted — $ — $ $ Exercised ) $ ) $ ) $ Cancelled ) $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at end of year $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options exercisable at end of year $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of additional information regarding stock options outstanding | The following table provides additional information regarding stock options outstanding as of May 31, 2015 (shares in thousands): Options Outstanding Options Exercisable Option Exercise Price Range Number Outstanding as of 5/31/15 Weighted-Average Remaining Contractual Life in Years Weighted- Average Exercise Price Number Exercisable as of 5/31/15 Weighted- Average Exercise Price $10.00 - $15.00 $ $ $15.01 - $20.00 $ $ $20.01 - $34.50 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of restricted share activity | Restricted share activity during the fiscal year ended May 31, 2015 was as follows (shares in thousands): Number of Shares Weighted Average Fair Value on Grant Date Nonvested at May 31, 2014 $ Granted $ Vested ) $ Forfeited ) $ ​ ​ ​ ​ ​ ​ ​ ​ Nonvested at May 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May. 31, 2015 | |
Income Taxes | |
Schedule of components of provision for income tax (benefit) on income from continuing operations | For the Year Ended May 31, 2015 2014 2013 Current: Federal $ $ $ ) State ) Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) Deferred ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of difference between the provision for income taxes on income from continuing operations from the amount computed by applying the U.S. federal statutory tax rate | For the Year Ended May 31, 2015 2014 2013 Provision for income tax (benefit) at the federal statutory rate $ ) $ $ State income taxes, net of federal benefit and refunds Federal adjustments ) Domestic Production Activities Deduction ) ) — State adjustments — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for income tax (benefit) $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of income (Loss) before provision for income tax (benefit) | For the Year Ended May 31, 2015 2014 2013 Domestic $ ) $ $ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of components of deferred tax liabilities and assets | May 31, 2015 2014 Deferred tax assets-current attributable to: Inventory costs $ $ Impairment of PSM assets — Advanced billings Employee benefits Other — ​ ​ ​ ​ ​ ​ ​ ​ Total net deferred tax assets-current ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax assets-noncurrent attributable to: Postretirement benefits Advanced billings Foreign intangible assets — Other ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets-noncurrent ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets net of valuation allowance $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities attributable to: Depreciation $ ) $ ) Capitalized program development costs — ) Foreign intangible assets — ) Other ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax liabilities $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
May. 31, 2015 | |
Earnings per Share | |
Reconciliation of the computations of basic and diluted earnings per share information | The following tables provide a reconciliation of the computations of basic and diluted earnings per share information for each of the years in the three-year period ended May 31, 2015 (shares in millions). For the Year Ended May 31, 2015 2014 2013 Basic EPS: Income (Loss) from continuing operations $ ) $ $ Less income attributable to participating shares ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from continuing operations attributable to common shareholders ) Income from discontinued operations attributable to common shareholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to common shareholders for earnings per share—basic $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted EPS: Income (Loss) from continuing operations $ ) $ $ Add after-tax interest on convertible debt — — Less income attributable to participating shares ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from continuing operations attributable to common shareholders ) Income from discontinued operations attributable to common shareholders ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to common shareholders for earnings per share—diluted $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding—basic Additional shares from assumed conversion of debt — — Additional shares from assumed exercise of stock options ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding—diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share—basic: Earnings (Loss) from continuing operations $ ) $ $ Earnings from discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share—basic $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share—diluted: Earnings (Loss) from continuing operations $ ) $ $ Earnings from discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share—diluted $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
May. 31, 2015 | |
Employee Benefit Plans | |
Schedule of change to the entity's projected benefit obligation and the fair value of plan assets for pension plan in the United States and other countries | May 31, 2015 2014 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ $ Sale of Telair Cargo Group ) — Service cost Interest cost Participant contributions Net actuarial loss Benefit payments ) ) Plan change ) Foreign currency adjustment ) ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligation at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ Change in the fair value of plan assets: Fair value of plan assets at beginning of year $ $ Actual return on plan assets Employer contributions Participant contributions Benefit payments ) ) Foreign currency adjustment ) ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ Funded status at end of year $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of amounts recognized in the Consolidated Balance Sheets | May 31, 2015 2014 Accrued liabilities $ ) $ ) Other liabilities and deferred income ) ) ​ ​ ​ ​ ​ ​ ​ ​ Funded status at end of year $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of amounts recognized in accumulated other comprehensive loss | May 31, 2015 2014 Actuarial loss $ $ Prior service cost (credit) ) ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of components of pension expense charged to the statement of income | For the Year Ended May 31, 2015 2014 2013 Service cost $ $ $ Interest cost Expected return on plan assets ) ) ) Curtailment — — Amortization of prior service cost Recognized net actuarial loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of estimated amounts for plans that will be amortized from accumulated other comprehensive loss into expense over the next fiscal year | Net actuarial loss $ Prior service cost ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of key weighted-average assumptions used in the measurement of the entity's projected benefit obligations | May 31, 2015 2014 Discount rate: Domestic plans % % International plans Rate of compensation increase: Domestic plans % % International plans |
Summary of the weighted average assumptions used to determine net periodic pension expense | For the Year Ended May 31, 2015 2014 2013 Discount rate: Domestic plans % % % International plans Rate of compensation increase: Domestic plans % % % International plans Expected long-term rate on plan assets: Domestic plans % % % International plans |
Schedule of actual asset allocation and target allocations | May 31, Target Asset Allocation 2015 2014 Equity securities % % 45 - 75 % Fixed income securities 15 - 25 % Other 0 - 25 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of fair value of pension plan assets | The following table sets forth by level, within the fair value hierarchy, pension plan assets at their fair value as of May 31, 2015: Level 1 1 Level 2 2 Level 3 3 Total Equity securities: U.S. common stock $ $ — $ — $ U.S. mutual funds — — International common stock — — International mutual funds — — Fixed income: Government securities and corporate bond mutual funds — — Funds-of-funds — Hedge funds — — Cash and cash equivalents — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total investments $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table sets forth by level, within the fair value hierarchy, pension plan assets at their fair value as of May 31, 2014: Level 1 1 Level 2 2 Level 3 3 Total Equity securities: U.S. common stock $ $ — $ — $ U.S. mutual funds — — International common stock — — International mutual funds — — Fixed income: Government securities and corporate bond mutual funds — — Funds-of-funds — Hedge funds — — Cash and cash equivalents — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total investments $ $ $ $ 1 Quoted prices in active markets for identical assets that we have the ability to access as of the reporting date. 2 Inputs other than quoted prices included within Level 1 that are directly observable for the asset or indirectly observable through corroboration with observable market data. 3 Unobservable inputs, such as internally developed pricing models or third party valuations for the asset due to little or no market activity for the asset. |
Schedule of reconciliation of Level 3 pension assets measured at fair value | Hedge Funds Fund-of-funds Total Balance as of May 31, 2013 $ $ $ Sales ) ) ) Purchases Return on plan assets related to: Assets sold by May 31, 2014 — ) ) Assets still held at May 31, 2014 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2014 Purchases — Return on plan assets related to assets still held at May 31, 2015 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2015 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of estimated future pension payments | Fiscal Year 2016 2017 2018 2019 2020 2021 to 2025 Estimated future pension payments $ $ $ $ $ $ |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
May. 31, 2015 | |
Accumulated Other Comprehensive Loss | |
Schedule of changes in accumulated other comprehensive loss ("AOCL") by component | Currency Translation Adjustments Pensions Plans Derivative Instruments Total Balance as of June 1, 2012 $ ) $ ) $ ) $ ) Other comprehensive loss before reclassifications Amounts reclassified from AOCL — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other comprehensive income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2013 ) ) ) ) Other comprehensive loss before reclassifications ) Amounts reclassified from AOCL — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other comprehensive income (loss) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2014 ) ) ) Other comprehensive loss before reclassifications ) ) ) Sale of Telair Cargo Group — Amounts reclassified from AOCL — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other comprehensive income (loss) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of May 31, 2015 $ $ ) $ — $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Aircraft Portfolio (Tables)
Aircraft Portfolio (Tables) | 12 Months Ended |
May. 31, 2015 | |
Aircraft Portfolio | |
Schedule of summarized income statement information of the joint ventures | For the Year Ended May 31, 2015 2014 2013 Sales $ $ $ Income before provision for income taxes |
Schedule of summarized balance sheet information of the limited liability companies | May 31, 2015 2014 Balance sheet information: Assets $ $ Debt Members' capital |
Information relating to aircraft type, year of manufacture, lessee, lease expiration date and expected disposition upon lease expiration | Quantity Aircraft Type Year Manufactured Lessee Lease Expiration Date (FY) Post-Lease Disposition 2 767-300 1991 United Airlines 2022 Sale/Re-lease 1 737-400 1993 — — Sale/Re-lease ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
May. 31, 2015 | |
Commitments and Contingencies | |
Schedule of future minimum payments under operating leases | Year Facilities and Equipment 2016 $ 2017 2018 2019 2020 2021 and thereafter |
Other Noncurrent Assets (Tables
Other Noncurrent Assets (Tables) | 12 Months Ended |
May. 31, 2015 | |
Other Noncurrent Assets | |
Schedule of other noncurrent assets | May 31, 2015 2014 Assets under deferred compensation plan $ $ Cash surrender value of life insurance Costs in excess of billings License fees Notes receivable Debt issuance costs Other ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
May. 31, 2015 | |
Business Segment Information | |
Selected financial information for each reportable segment | For the Year Ended May 31, 2015 2014 2013 Net sales: Aviation Services $ $ $ Expeditionary Services ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended May 31, 2015 2014 2013 Gross profit: Aviation Services $ $ $ Expeditionary Services ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ May 31, 2015 2014 2013 Total assets: Aviation Services $ $ $ Expeditionary Services Discontinued operations Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended May 31, 2015 2014 2013 Capital expenditures: Aviation Services $ $ $ Expeditionary Services Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total continuing operations Discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended May 31, 2015 2014 2013 Depreciation and amortization: 1 Aviation Services $ $ $ Expeditionary Services Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total continuing operations Discontinued operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1 Includes depreciation and amortization of stock-based compensation. |
Schedule of reconciliation of segment gross profit to consolidated income before provision for income taxes | For the Year Ended May 31, 2015 2014 2013 Segment gross profit $ $ $ Selling, general and administrative ) ) ) Earnings from joint ventures Loss on extinguishment of debt ) — ) Interest expense ) ) ) Interest income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from continuing operations before provision for income taxes $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of sales to the U.S. Department of Defense, other U.S. government agencies and their contractors by segment | For the Year Ended May 31, 2015 2014 2013 Aviation Services $ $ $ Expeditionary Services ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of total sales % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of geographic data | May 31, 2015 2014 Long-lived assets: United States $ $ Europe Other ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Selected Quarterly Data (Unau36
Selected Quarterly Data (Unaudited) (Tables) | 12 Months Ended |
May. 31, 2015 | |
Selected Quarterly Data (Unaudited) | |
Schedule of unaudited selected quarterly data | Fiscal 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Full Year Sales $ $ $ $ $ Gross profit ) Income (Loss) from continuing operations attributable to AAR ) ) Income (Loss) from discontinued operations attributable to AAR ) Net income (loss) attributable to AAR ) Earnings (Loss) per share—basic: Continuing operations ) ) Discontinued operations ) Earnings per share—basic ) Earnings (Loss) per share—diluted: Continuing operations ) ) Discontinued operations ) Earnings (Loss) per share—diluted ) Fiscal 2014 First Quarter Second Quarter Third Quarter Fourth Quarter Full Year Sales $ $ $ $ $ Gross profit Income from continuing operations attributable to AAR Income from discontinued operations attributable to AAR Net income attributable to AAR Earnings per share—basic: Continuing operations Discontinued operations Earnings per share—basic Earnings per share—diluted: Continuing operations Discontinued operations Earnings per share—diluted 1 The earnings-per-share computation for the year is a separate, annual calculation. Accordingly, the sum of the quarterly earnings-per-share amounts does not necessarily equal the earnings per share for the year. 2 Fourth quarter loss from continuing operations in fiscal 2015 reflects impairment charges and other losses of $71.4 million related to product lines and inventories identified as underperforming or not part of our strategy going forward in our services businesses and a loss on extinguishment of debt of $44.9 million. 3 Third quarter loss from discontinued operations in fiscal 2015 reflects the impairment of PSM's net assets of $46.4 million. 4 Fourth quarter income from discontinued operations in fiscal 2015 reflects the pre-tax gain on sale of the Telair Cargo Group of $198.6 million partially offset by additional impairment of PSM's net assets of $11.1 million. |
Allowance for Doubtful Accoun37
Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
May. 31, 2015 | |
Allowance for Doubtful Accounts. | |
Schedule of allowance for doubtful accounts | May 31, 2015 2014 2013 Balance, beginning of year $ $ $ Provision charged to operations Deductions for accounts written off, net of recoveries ) ) ) Sale of Telair Cargo Group ) — — Reclassification to assets of discontinued operations ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, end of year $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
May. 31, 2013 | Nov. 30, 2012 | May. 31, 2015 | May. 31, 2014 | |
Revenue Recognition | ||||
Cost in excess of amount billed | $ 14.4 | $ 15.1 | ||
KC10 Supply Agreement | ||||
Revenue Recognition | ||||
Unbilled accounts receivable related to KC10 supply agreement | 21.1 | 19.7 | ||
Cost in excess of amount billed | $ 7.5 | $ 9.9 | ||
Margin forecast on flight hour portion of supply contract (as a percent) | 0.00% | 0.00% | ||
Margin forecast on remaining life of flight hour portion of supply contract (as a percent) | 0.00% | |||
Pre-tax charge | $ 29.8 | |||
Decrease in flight hours flow due to lower operations tempo (as a percent) | 28.00% | |||
Revenue on flight hour portion of contract | $ 46.5 | $ 42.4 | ||
Minimum | ||||
Principles of Consolidation | ||||
Percentage of owned aircraft | 20.00% | |||
Maximum | ||||
Principles of Consolidation | ||||
Percentage of owned aircraft | 50.00% | |||
Wholly-Owned | ||||
Principles of Consolidation | ||||
Percentage of owned aircraft | 100.00% |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Details 2) $ in Millions | 12 Months Ended | |
May. 31, 2015USD ($)item | May. 31, 2014USD ($) | |
Goodwill by reportable segment | ||
Goodwill, Beginning Balance | $ 261.7 | $ 255.6 |
Acquisition | 0.3 | |
Foreign currency translation adjustments | (1.9) | 5.8 |
Businesses sold or assets held for sale | (136.3) | |
Goodwill, Ending Balance | $ 123.5 | 261.7 |
Number of Reporting Units | item | 5 | |
Discontinued operations | ||
Goodwill by reportable segment | ||
Goodwill, Beginning Balance | $ 141 | 136.9 |
Acquisition | 0.3 | |
Foreign currency translation adjustments | 3.8 | |
Reallocation of goodwill | (4.7) | |
Businesses sold or assets held for sale | (136.3) | |
Goodwill, Ending Balance | 141 | |
Aviation Services | ||
Goodwill by reportable segment | ||
Goodwill, Beginning Balance | 75.7 | 73.7 |
Foreign currency translation adjustments | (1.9) | 2 |
Goodwill, Ending Balance | 73.8 | 75.7 |
Expeditionary Services | ||
Goodwill by reportable segment | ||
Goodwill, Beginning Balance | 45 | 45 |
Reallocation of goodwill | 4.7 | |
Goodwill, Ending Balance | $ 49.7 | $ 45 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Amortizable intangible assets: | |||
Gross carrying amount | $ 57.9 | $ 183.3 | |
Accumulated amortization | (22.5) | (36.2) | |
Net carrying amount | 35.4 | 147.1 | |
Unamortized intangible assets: | |||
Trademarks | 1.3 | 18.3 | |
Intangible Assets, Gross (Excluding Goodwill) | 59.2 | 201.6 | |
Intangible Assets, Net (Excluding Goodwill), Total | 36.7 | 165.4 | |
Amortization expense | 4.6 | 4.7 | $ 7.7 |
Estimated aggregate amortization expense for intangible assets in each of the next five fiscal years | |||
2,016 | 4.4 | ||
2,017 | 4.4 | ||
2,018 | 4.4 | ||
2,019 | 3.8 | ||
2,020 | 3.5 | ||
Capitalized Program Development Costs | |||
Net costs capitalized associated with the engineering and development of the cargo system, current and noncurrent | 139.8 | ||
Net costs capitalized associated with the engineering and development of the cargo system, current | 27.6 | ||
Capitalized program development costs | 112.2 | ||
Customer relationships | |||
Amortizable intangible assets: | |||
Gross carrying amount | 23.4 | 124 | |
Accumulated amortization | (9) | (22.9) | |
Net carrying amount | $ 14.4 | 101.1 | |
Customer relationships | Minimum | |||
Unamortized intangible assets: | |||
Useful life | 10 years | ||
Customer relationships | Maximum | |||
Unamortized intangible assets: | |||
Useful life | 20 years | ||
Developed technology | |||
Amortizable intangible assets: | |||
Gross carrying amount | $ 8 | 32.8 | |
Accumulated amortization | (3.5) | (4.8) | |
Net carrying amount | $ 4.5 | 28 | |
Developed technology | Minimum | |||
Unamortized intangible assets: | |||
Useful life | 7 years | ||
Developed technology | Maximum | |||
Unamortized intangible assets: | |||
Useful life | 10 years | ||
Lease agreements | |||
Amortizable intangible assets: | |||
Gross carrying amount | $ 21.5 | 21.5 | |
Accumulated amortization | (8.7) | (7.5) | |
Net carrying amount | $ 12.8 | 14 | |
Unamortized intangible assets: | |||
Useful life | 18 years | ||
FAA certificates | |||
Amortizable intangible assets: | |||
Gross carrying amount | $ 5 | 5 | |
Accumulated amortization | (1.3) | (1) | |
Net carrying amount | $ 3.7 | $ 4 | |
Unamortized intangible assets: | |||
Useful life | 20 years |
Summary of Significant Accoun41
Summary of Significant Accounting Policies (Details 4) - Accounts receivable - Customer - USD ($) $ in Millions | May. 31, 2015 | May. 31, 2014 |
U.S. Department of Defense | ||
Financial Instruments and Concentrations of Market or Credit Risk | ||
Accounts receivable due | $ 39.2 | $ 50.5 |
Large defense contractor | ||
Financial Instruments and Concentrations of Market or Credit Risk | ||
Accounts receivable due | $ 41.1 | $ 48.7 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies (Details 5) $ in Millions | 12 Months Ended | |
May. 31, 2015USD ($)aircraft | May. 31, 2014USD ($)aircraft | |
Inventories | ||
Raw materials and parts | $ 43.1 | $ 114.1 |
Work-in-process | 18.1 | 57.5 |
Aircraft and engine parts, components and finished goods | 337 | 297.3 |
Aircraft held for sale and related support parts | 57.8 | 26.4 |
Total inventories | $ 456 | $ 495.3 |
Number of Aircrafts Held for Sale | aircraft | 11 | 9 |
Inventory impairment charge | $ 8.9 | |
Proceeds from sale-leaseback advance | $ 40.3 | |
Fixed-wing aircraft | ||
Inventories | ||
Number of Aircrafts Held for Sale | aircraft | 5 | 5 |
Rotary-wing aircraft | ||
Inventories | ||
Number of Aircrafts Held for Sale | aircraft | 6 | 4 |
Number of aircrafts under sale leaseback transaction | aircraft | 2 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies (Details 6) - May. 31, 2015 $ in Millions | USD ($)aircraft | USD ($) |
Equipment under leases | ||
Number of remaining aircraft sold | aircraft | 2 | |
Future rent due to us under non-cancelable leases | ||
2,016 | $ 18.4 | $ 18.4 |
2,017 | 17.6 | 17.6 |
2,018 | 17.2 | 17.2 |
2,019 | 16.7 | 16.7 |
2,020 | 16.1 | 16.1 |
Aircraft engines and rotable parts | ||
Equipment under leases | ||
Impairment charges of equipment on short-term lease | $ 17.7 | |
Aircraft | ||
Equipment under leases | ||
Proceeds from sale of long term leases | 11 | |
Loss on sale of long term leases | $ 14.8 | |
Minimum | ||
Equipment under leases | ||
Period of short-term leases | 1 month | |
Period of long-term lease | 12 months | |
Maximum | ||
Equipment under leases | ||
Period of short-term leases | 12 months |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Details 7) - USD ($) $ in Millions | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Property, Plant and Equipment | |||
Equipment on or available for long-term lease | $ 80.2 | $ 98.4 | |
Supplemental Information on Cash Flows | |||
Interest paid | 42.7 | 33.8 | $ 28.3 |
Income taxes paid | 105.6 | 17.3 | 24.1 |
Income tax refunds and interest received | $ 12.1 | 7.5 | $ 23.2 |
Building and improvements | Minimum | |||
Property, Plant and Equipment | |||
Useful life | 10 years | ||
Building and improvements | Maximum | |||
Property, Plant and Equipment | |||
Useful life | 40 years | ||
Equipment | Minimum | |||
Property, Plant and Equipment | |||
Useful life | 3 years | ||
Equipment | Maximum | |||
Property, Plant and Equipment | |||
Useful life | 10 years | ||
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment | |||
Useful life | 3 years | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment | |||
Useful life | 10 years | ||
Capitalized software | Minimum | |||
Property, Plant and Equipment | |||
Useful life | 3 years | ||
Capitalized software | Maximum | |||
Property, Plant and Equipment | |||
Useful life | 10 years | ||
Aircraft and components | Minimum | |||
Property, Plant and Equipment | |||
Useful life | 7 years | ||
Aircraft and components | Maximum | |||
Property, Plant and Equipment | |||
Useful life | 30 years | ||
Aircraft engines and rotable parts | |||
Property, Plant and Equipment | |||
Equipment on or available for long-term lease | $ 80.2 | 73.1 | |
Aircraft | |||
Property, Plant and Equipment | |||
Equipment on or available for long-term lease | $ 25.3 |
Summary of Significant Accoun45
Summary of Significant Accounting Policies (Details 8) - USD ($) $ / shares in Units, $ in Millions | May. 29, 2015 | May. 31, 2015 | May. 31, 2014 | May. 31, 2013 |
Shares repurchased (in shares) | 4,185,960 | |||
Share repurchase price (in dollars per share) | $ 31.90 | |||
Cash tender offer amount | $ 133.5 | |||
Fees and expenses | $ 1.2 | |||
Shares repurchased | $ 16.8 | |||
Change in treasury stock due to restricted stock awards and exercise of stock options, net of shares withheld to satisfy statutory tax obligations | 3.6 | |||
Repurchase of treasury shares | 151.5 | $ 1 | $ 14.6 | |
Treasury Stock | ||||
Total increase (decrease) in treasury stock | (1.8) | 9.7 | ||
Change in treasury stock due to restricted stock awards and exercise of stock options, net of shares withheld to satisfy statutory tax obligations | 2.8 | 4.9 | ||
Repurchase of treasury shares | $ 151.5 | $ 1 | $ 14.6 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Millions | Mar. 26, 2015 | May. 31, 2015 | May. 31, 2015 | May. 31, 2014 | May. 31, 2013 |
Discontinued Operations | |||||
Pre-tax gain on sale of business (net of transaction expenses and fees) | $ 198.6 | ||||
Contingent consideration | $ 35 | ||||
Recognized impairment charge | 57.5 | ||||
Interest Expense | 26.5 | $ 28.3 | $ 29.1 | ||
Telair Cargo Group | |||||
Discontinued Operations | |||||
Consideration received for sale of business | $ 725 | 0.4 | 0.4 | ||
Cash consideration received before fees and expenses | 705 | ||||
Total proceeds including potential favorable amendments | 740 | ||||
Pre-tax gain on sale of business (net of transaction expenses and fees) | 198.6 | ||||
Interest Expense | 9.2 | 13 | 12.2 | ||
Sales | 286.3 | $ 325.9 | $ 329.4 | ||
Telair Cargo Group | Accrued Liabilities | |||||
Discontinued Operations | |||||
Liabilities of discontinued operations | $ 5.4 | 5.4 | |||
Telair Cargo Group | A400M | |||||
Discontinued Operations | |||||
Escrow deposit | 20 | ||||
Telair Cargo Group | A400M | Maximum | |||||
Discontinued Operations | |||||
Share of potential favorable contractual amendments | $ 15 | ||||
Precision Systems Manufacturing | |||||
Discontinued Operations | |||||
Recognized impairment charge | $ 57.5 |
Financing Arrangements (Details
Financing Arrangements (Details) - USD ($) $ in Millions | Mar. 28, 2013 | Apr. 30, 2015 | May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | Mar. 24, 2015 | Apr. 12, 2011 |
Financing Arrangements | |||||||
Total debt | $ 154 | $ 634 | |||||
Current maturities of debt | (69) | (69.7) | |||||
Long-term debt | 85 | 564.3 | |||||
Aggregate par value of debt maturing in next five fiscal years | |||||||
2,016 | 70.8 | ||||||
2,017 | 10 | ||||||
2,018 | 0 | ||||||
2,019 | 25 | ||||||
2,020 | 50 | ||||||
Outstanding letter of credit | 15.4 | ||||||
Short-term borrowing activity | |||||||
Net proceeds from offering of notes | $ 181.8 | ||||||
Loss on Repurchase | 44.9 | 0.3 | |||||
Interest expense | |||||||
Amortization of discount | 2.7 | 5.3 | 9.6 | ||||
Loss on extinguishment of debt | $ (44.9) | (0.3) | |||||
Credit Facility Amendment | |||||||
Interest expense | |||||||
Maximum borrowing capacity under the credit agreement before amendment | $ 475 | ||||||
Extended maturity period | 2 years | ||||||
Maximum borrowing capacity | $ 500 | ||||||
Revolving Credit Facility expiring March 24, 2020 with interest payable monthly | |||||||
Financing Arrangements | |||||||
Total debt | $ 50 | 130 | |||||
Revolving Credit Facility expiring March 24, 2020 with interest payable monthly | Eurodollar rate | Minimum | |||||||
Aggregate par value of debt maturing in next five fiscal years | |||||||
Basis spread on variable rate under the credit agreement after amendment (as a percent) | 1.00% | ||||||
Revolving Credit Facility expiring March 24, 2020 with interest payable monthly | Eurodollar rate | Maximum | |||||||
Aggregate par value of debt maturing in next five fiscal years | |||||||
Basis spread on variable rate under the credit agreement after amendment (as a percent) | 2.00% | ||||||
Revolving Credit Facility expiring March 24, 2020 with interest payable monthly | Base rate | Minimum | |||||||
Aggregate par value of debt maturing in next five fiscal years | |||||||
Basis spread on variable rate under the credit agreement after amendment (as a percent) | 0.00% | ||||||
Revolving Credit Facility expiring March 24, 2020 with interest payable monthly | Base rate | Maximum | |||||||
Aggregate par value of debt maturing in next five fiscal years | |||||||
Basis spread on variable rate under the credit agreement after amendment (as a percent) | 1.00% | ||||||
Industrial revenue bond (secured by property, plant and equipment) due August 1, 2018 | |||||||
Financing Arrangements | |||||||
Total debt | $ 25 | 25 | |||||
Long-term debt: | |||||||
Net carrying amount | 0 | 29.9 | |||||
Secured credit facility (secured by aircraft and related engines and components) due April 23, 2015 with floating interest rate, payable monthly | |||||||
Aggregate par value of debt maturing in next five fiscal years | |||||||
Amount outstanding | $ 2.7 | ||||||
Interest expense | |||||||
Maximum borrowing capacity under the credit agreement before amendment | $ 65 | ||||||
Maximum borrowing capacity | $ 40 | ||||||
Secured credit facility (secured by aircraft and related engines and components) due April 23, 2015 with floating interest rate, payable monthly | LIBOR | |||||||
Aggregate par value of debt maturing in next five fiscal years | |||||||
Description of variable rate basis | LIBOR | LIBOR | |||||
Basis spread on variable rate (as a percent) | 1.75% | 1.75% | |||||
Basis spread on variable rate under the credit agreement before amendment (as a percent) | 3.25% | ||||||
Note payable due March 9, 2017 with floating interest rate, payable semi-annually on June 1 and December 1 | |||||||
Financing Arrangements | |||||||
Total debt | $ 20 | $ 30 | |||||
Notes payable due January 15, 2022 with interest at 7.25% payable semi-annually on January 15 and July 15 | |||||||
Financing Arrangements | |||||||
Interest rate (as a percent) | 7.25% | 7.25% | |||||
Total debt | 332.6 | ||||||
Short-term borrowing activity | |||||||
Loss on Repurchase | $ (44.9) | ||||||
Interest expense | |||||||
Redemption value of senior notes | 325 | ||||||
Redemption value including make-whole premium | 370.6 | ||||||
Loss on extinguishment of debt | 44.9 | ||||||
Make-whole premium of redeemed notes | 45.6 | ||||||
Unamortized deferred financing cost | 6.2 | ||||||
Unamortized deferred cost offset | $ 6.9 | ||||||
Convertible notes payable | |||||||
Interest expense | |||||||
Coupon interest | $ 1.5 | 3.1 | 3.7 | ||||
Amortization of deferred financing fees | 0.1 | 0.3 | 0.5 | ||||
Amortization of discount | 2.4 | 5.1 | 9.3 | ||||
Interest expense related to convertible notes | $ 4 | 8.5 | 13.5 | ||||
Convertible notes payable due February 1, 2015 with interest at 1.75% payable semi-annually on February 1 and August 1 | |||||||
Short-term borrowing activity | |||||||
Effective interest rate (as a Percent) | 1.75% | ||||||
Long-term debt: | |||||||
Net carrying amount | $ 0 | 29.8 | |||||
Convertible notes payable due March 1, 2016 with interest at 2.25% payable semi-annually on March 1 and September 1 | |||||||
Financing Arrangements | |||||||
Interest rate (as a percent) | 2.25% | ||||||
Total debt | $ 48 | 45.7 | |||||
Mortgage loan (secured by Wood Dale, Illinois facility) due August 1, 2015 with interest at 5.01% | |||||||
Long-term debt: | |||||||
Net carrying amount | 11 | 11 | |||||
Other | |||||||
Financing Arrangements | |||||||
Total debt | 11 | 70.7 | |||||
7.25% bonds, 1.75% and 2.25% convertible notes | |||||||
Aggregate par value of debt maturing in next five fiscal years | |||||||
Carrying value of long-term debt | 48 | ||||||
Long-term debt: | |||||||
Principal amount | 48 | ||||||
7.25% bonds, 1.75% and 2.25% convertible notes | Significant other observable inputs (Level 2) | |||||||
Aggregate par value of debt maturing in next five fiscal years | |||||||
Estimated fair value of long-term debt | 51.5 | ||||||
Remaining variable rate and fixed rate debt | Significant other unobservable inputs (Level 3) | |||||||
Aggregate par value of debt maturing in next five fiscal years | |||||||
Estimated fair value of long-term debt | 106 | ||||||
Credit Agreement and its Predecessor | |||||||
Short-term borrowing activity | |||||||
Maximum amount borrowed | 215 | 190 | 395 | ||||
Average daily borrowings | $ 140.7 | $ 135.8 | $ 312.3 | ||||
Average interest rate during the year (as a percent) | 1.69% | 1.77% | 2.03% | ||||
Revolving credit facility | Credit Facility Amendment | |||||||
Interest expense | |||||||
Increase in borrowing capacity | $ 250 | ||||||
Total borrowing capacity | $ 750 |
Derivative Instruments and He48
Derivative Instruments and Hedging Activities (Details) $ in Millions | May. 31, 2015USD ($)item | May. 31, 2014USD ($) |
Derivative Instruments and Hedging Activities | ||
Number of derivative financial instruments | item | 2 | |
Interest rate cap | Derivatives designated as hedging instruments: | ||
Fair value carrying amount of the Company's interest rate derivatives | ||
Derivative Assets | $ 0.1 | |
Interest rate cap | Derivatives designated as hedging instruments: | Cash flow hedges | ||
Derivative Instruments and Hedging Activities | ||
Notional amount under revolving credit agreement | $ 50 | |
Interest rate swap | Derivatives designated as hedging instruments: | ||
Fair value carrying amount of the Company's interest rate derivatives | ||
Derivative Liabilities | $ 2.8 | |
Interest rate swap | Derivatives designated as hedging instruments: | Cash flow hedges | ||
Derivative Instruments and Hedging Activities | ||
Notional amount under revolving credit agreement | 50 | |
Interest Rate Swap and Cap Agreements | Derivatives designated as hedging instruments: | ||
Derivative Instruments and Hedging Activities | ||
Settlement of floating-to-fixed interest rate swap and interest rate cap agreement | $ 2.6 |
Derivative Instruments and He49
Derivative Instruments and Hedging Activities (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Impact of the interest rate swap and interest cap agreement on the condensed consolidated statement of income | |||
Loss recognized related to the reclassification of previously unrealized losses in accumulated other comprehensive income | $ 2 | ||
Cash flow hedges | |||
Impact of the interest rate swap and interest cap agreement on the condensed consolidated statement of income | |||
Amount of unrealized gain recorded in other accumulated comprehensive income (loss) | $ 0.7 | $ 0.6 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
May. 31, 2015USD ($)item$ / sharesshares | May. 31, 2014USD ($)$ / sharesshares | May. 31, 2013USD ($)$ / sharesshares | |
Share-Based Compensation | |||
Total number of shares granted since inception | 11,149,000 | ||
2013 Stock Plan | |||
Share-Based Compensation | |||
Shares available for future grant | 2,180,000 | ||
Stock options | |||
Share-Based Compensation | |||
Expiration term | 10 years | ||
First number of equal annual increments in which stock options are exercisable | item | 3 | ||
First number of equal annual increments in which stock options are exercisable | item | 4 | ||
First number of equal annual increments in which stock options are exercisable | item | 5 | ||
Commencement period after the date of grant for annual increments of stock options becoming exercisable | 1 year | ||
Granted (in shares) | 0 | ||
Weighted average fair value of stock options granted (in dollars per share) | $ / shares | $ 10.24 | $ 4.85 | |
Assumptions used in the Black-Scholes option pricing models to estimate the fair value of each stock option grant | |||
Risk-free interest rate | 1.40% | 0.60% | |
Expected volatility of common stock | 49.10% | 51.40% | |
Dividend yield | 1.20% | 2.30% | |
Expected option term in years | 5 years 2 months 12 days | 5 years 4 months 24 days | |
Shares | |||
Outstanding at beginning of year (in shares) | 2,753,000 | 2,300,000 | 1,703,000 |
Granted (in shares) | 1,033,015 | 972,180 | |
Exercised (in shares) | (793,000) | (473,000) | (124,000) |
Cancelled (in shares) | (103,000) | (107,000) | (251,000) |
Outstanding at end of year (in shares) | 1,857,000 | 2,753,000 | 2,300,000 |
Options exercisable at end of year (in shares) | 627,000 | 1,019,000 | 1,089,000 |
Weighted Average Exercise Price | |||
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 19.59 | $ 16.22 | $ 17.96 |
Granted (in dollars per share) | $ / shares | 25.43 | 12.95 | |
Exercised (in dollars per share) | $ / shares | 15.98 | 16.20 | 13.72 |
Cancelled (in dollars per share) | $ / shares | 21.03 | 18.48 | 15.82 |
Outstanding at end of year (in dollars per share) | $ / shares | 21.05 | 19.59 | 16.22 |
Options exercisable at end of year (in dollars per share) | $ / shares | $ 21.78 | $ 17.88 | $ 17.73 |
Stock options, additional disclosures | |||
Total fair value of stock options vested | $ | $ 3.1 | $ 2 | $ 3.6 |
Total intrinsic value of stock options exercised | $ | 11.1 | 4.3 | 0.5 |
Aggregate intrinsic value of options outstanding | $ | 16 | 15.2 | |
Tax benefit realized from stock options exercised | $ | 2.4 | 1 | 0 |
Compensation expense | $ | 2.9 | 3.8 | 3.5 |
Unearned compensation not yet recognized | $ | $ 6.7 | ||
Average remaining amortization period of unearned compensation | 1 year 4 months 24 days | ||
Restricted stock | |||
Share-Based Compensation | |||
Granted (in shares) | 331,000 | ||
Stock options, additional disclosures | |||
Compensation expense | $ | $ 4.9 | $ 4.9 | $ 7.6 |
Unearned compensation not yet recognized | $ | $ 8.5 | ||
Average remaining amortization period of unearned compensation | 1 year 3 months 18 days | ||
Restricted stock | 2013 Stock Plan | |||
Share-Based Compensation | |||
Granted (in shares) | 331,000 | ||
Restricted stock | Minimum | |||
Share-Based Compensation | |||
Vesting period | 1 year | ||
Restricted stock | Maximum | |||
Share-Based Compensation | |||
Vesting period | 5 years | ||
Performance-based restricted stock | Minimum | |||
Share-Based Compensation | |||
Vesting period | 3 years | ||
Performance-based restricted stock | Maximum | |||
Share-Based Compensation | |||
Vesting period | 6 years | ||
Time-based restricted stock | Board of Directors | |||
Share-Based Compensation | |||
Granted (in shares) | 45,000 | 45,000 | 48,333 |
Stock-Based Compensation (Det51
Stock-Based Compensation (Details 2) - May. 31, 2015 - $ / shares shares in Thousands | Total |
Options Outstanding | |
Number Outstanding at the end of the period (in shares) | 1,857 |
Weighted-Average Remaining Contractual Life in Years | 7 years 1 month 6 days |
Weighted-Average Exercise Price (in dollars per Share) | $ 21.05 |
Options Exercisable | |
Number Outstanding at the end of the period (in shares) | 627 |
Weighted-Average Exercise Price (in dollar per Share) | $ 21.78 |
$10.00 - $15.00 | |
Share-Based Compensation | |
Option Exercise Price Range, low end of range (in dollars per share) | 10 |
Option Exercise Price Range, high end of range (in dollars per share) | $ 15 |
Options Outstanding | |
Number Outstanding at the end of the period (in shares) | 564 |
Weighted-Average Remaining Contractual Life in Years | 7 years 1 month 6 days |
Weighted-Average Exercise Price (in dollars per Share) | $ 12.90 |
Options Exercisable | |
Number Outstanding at the end of the period (in shares) | 94 |
Weighted-Average Exercise Price (in dollar per Share) | $ 12.90 |
$15.01 - $20.00 | |
Share-Based Compensation | |
Option Exercise Price Range, low end of range (in dollars per share) | 15.01 |
Option Exercise Price Range, high end of range (in dollars per share) | $ 20 |
Options Outstanding | |
Number Outstanding at the end of the period (in shares) | 226 |
Weighted-Average Remaining Contractual Life in Years | 4 years 8 months 12 days |
Weighted-Average Exercise Price (in dollars per Share) | $ 16.79 |
Options Exercisable | |
Number Outstanding at the end of the period (in shares) | 220 |
Weighted-Average Exercise Price (in dollar per Share) | $ 16.81 |
$20.01 - $34.50 | |
Share-Based Compensation | |
Option Exercise Price Range, low end of range (in dollars per share) | 20.01 |
Option Exercise Price Range, high end of range (in dollars per share) | $ 34.50 |
Options Outstanding | |
Number Outstanding at the end of the period (in shares) | 1,067 |
Weighted-Average Remaining Contractual Life in Years | 7 years 6 months |
Weighted-Average Exercise Price (in dollars per Share) | $ 26.26 |
Options Exercisable | |
Number Outstanding at the end of the period (in shares) | 313 |
Weighted-Average Exercise Price (in dollar per Share) | $ 27.94 |
Stock-Based Compensation (Det52
Stock-Based Compensation (Details 3) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Restricted stock | |||
Restricted Stock | |||
Compensation expense | $ 4.9 | $ 4.9 | $ 7.6 |
Number of Shares | |||
Nonvested at the beginning of the period ( in shares) | 990,000 | ||
Granted (in shares) | 331,000 | ||
Vested (in shares) | (178,000) | ||
Forfeited (in shares) | (89,000) | ||
Nonvested at the end of the period (in shares) | 1,054,000 | 990,000 | |
Weighted Average Fair Value on Grant Date | |||
Nonvested at the beginning of the period (in dollars per share) | $ 22.49 | ||
Granted (in dollars per share) | 25.86 | ||
Vested (in dollars per share) | 19.20 | ||
Forfeited (in dollars per share) | 20.21 | ||
Nonvested at the end of the period (in dollars per share) | $ 24.38 | $ 22.49 | |
Unearned compensation not yet recognized | $ 8.5 | ||
Average remaining amortization period of unearned compensation | 1 year 3 months 18 days | ||
Performance-based restricted stock | Executives and other key employees | |||
Number of Shares | |||
Granted (in shares) | 188,125 | 60,808 | 53,280 |
Time-based restricted stock | Board of Directors | |||
Number of Shares | |||
Granted (in shares) | 45,000 | 45,000 | 48,333 |
Time-based restricted stock | Executives and other key employees | |||
Number of Shares | |||
Granted (in shares) | 97,581 | 60,808 | 65,780 |
Stock-Based Compensation (Det53
Stock-Based Compensation (Details 4) - May. 31, 2015 - Shareholders' Rights Plan | item$ / sharesshares |
Shareholders' Rights Plan | |
Right to purchase number of shares | shares | 1 |
Purchase price per share (in dollars per share) | $ 140 |
Minimum percentage of the common stock shares acquired by a person or group of persons before rights become exercisable | 15.00% |
Market values of shares under the right (in dollars per share) | $ 280 |
Market values of shares under the right, as multiplier of exercise price | item | 2 |
Minimum percentage of assets or earning power sold before rights become exercisable | 50.00% |
Redemption price per Right (in dollars per share) | $ 0.01 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | May. 31, 2012 | |
Current: | ||||
Federal | $ 22.2 | $ 11.4 | $ (3.7) | |
State | 0.4 | 0.4 | (0.7) | |
Foreign | 1.5 | 0.8 | 1.5 | |
Total current | 24.1 | 12.6 | (2.9) | |
Deferred | (52.6) | 19 | 28.3 | |
Provision for income tax (benefit) | (28.5) | 31.6 | 25.4 | |
Income Tax Expense (Benefit), Total | (28.5) | 31.6 | $ 25.4 | |
Income tax receivable | $ 2.1 | $ 14.8 | ||
U.S. federal statutory income tax rate (as a percent) | 35.00% | 35.00% | 35.00% | |
Reasons for difference between the provision for income taxes on pre-tax income from the amount computed by applying the U.S. federal statutory tax rate | ||||
Provision for income tax (benefit) at the federal statutory rate | $ (29) | $ 34.6 | $ 26 | |
State income taxes, net of federal benefit and refunds | 0.2 | 0.2 | 0.4 | |
Federal adjustments | 0.5 | (2) | 0.3 | |
Domestic Production Activities Deduction | (0.2) | (1.2) | ||
State adjustments | (1.3) | |||
Provision for income tax (benefit) | (28.5) | 31.6 | 25.4 | |
Income (Loss) from continuing operations before provision for income tax (benefit) | (83) | 98.8 | $ 74.2 | |
Deferred tax assets-current attributable to: | ||||
Inventory costs | 35.4 | 14.4 | ||
Advance billings | 6 | 2 | ||
Employee benefits | 3.5 | 7.9 | ||
Other | 0.3 | |||
Deferred Tax Assets, Net of Valuation Allowance, Current, Total | 58.3 | 24.6 | ||
Deferred tax assets-noncurrent attributable to: | ||||
Postretirement benefits | 18.9 | 17.6 | ||
Advance billings | 8.3 | 16.2 | ||
Foreign intangible assets | 44.2 | |||
Other | 3.9 | 6.7 | ||
Total deferred tax assets-noncurrent | 31.1 | 84.7 | ||
Total deferred tax assets | 89.4 | 109.3 | ||
Valuation allowance | (2.8) | (2.8) | ||
Total deferred tax assets net of valuation allowance | 86.6 | 106.5 | ||
Deferred tax liabilities attributable to: | ||||
Depreciation | (132.4) | (158.4) | ||
Capitalized program development costs | (34.1) | |||
Foreign intangible assets | (42.9) | |||
Other | (0.5) | (3.2) | ||
Total deferred tax liabilities | (132.9) | (238.6) | ||
Net deferred tax liabilities | $ (46.3) | $ (132.1) | ||
Effective income tax rate (as a percent) | 34.30% | 32.00% | 34.20% | |
Decrease in deferred tax assets current | $ 5.5 | |||
Decrease in deferred tax liabilities noncurrent | 5.5 | |||
Reduction in income tax expense related to tax provision to federal income tax return filing differences | $ 2 | |||
Domestic Production Activities Deduction tax benefit | 0.2 | 1.2 | ||
Reduction in income tax expense related to reduction of the entity's state income tax rate | $ 1.3 | |||
Domestic | ||||
Reasons for difference between the provision for income taxes on pre-tax income from the amount computed by applying the U.S. federal statutory tax rate | ||||
Income (Loss) from continuing operations before provision for income tax (benefit) | (94.2) | 81.9 | $ 58.4 | |
Foreign | ||||
Reasons for difference between the provision for income taxes on pre-tax income from the amount computed by applying the U.S. federal statutory tax rate | ||||
Income (Loss) from continuing operations before provision for income tax (benefit) | 11.2 | $ 16.9 | $ 15.8 | |
Precision Systems Manufacturing | ||||
Deferred tax assets-current attributable to: | ||||
Impairment of PSM assets | $ 13.4 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Earnings per Share | |||||||||||
Effect to the participating securities as result of net loss | $ 0 | ||||||||||
Antidilutive stock options excluded from the computation of diluted earnings per share (in shares) | 168,200 | 180,000 | 872,200 | ||||||||
Basic EPS: | |||||||||||
Income (Loss) from continuing operations | $ (82,100,000) | $ 1,900,000 | $ 13,900,000 | $ 11,800,000 | $ 14,900,000 | $ 16,900,000 | $ 18,700,000 | $ 16,700,000 | $ (54,500,000) | $ 67,200,000 | $ 48,800,000 |
Less income attributable to participating shares | (300,000) | (1,500,000) | (2,000,000) | ||||||||
Income (loss) from continuing operations attributable to common shareholders | (54,800,000) | 65,700,000 | 46,800,000 | ||||||||
Income from discontinued operations attributable to common shareholders | 97.20 | (36.40) | 1.30 | 2.60 | 2,200,000 | 1,000,000 | 1,300,000 | 1,200,000 | 64,700,000 | 5,700,000 | 6,200,000 |
Net income attributable to common shareholders for earnings per share - basic | 9,900,000 | 71,400,000 | 53,000,000 | ||||||||
Diluted EPS: | |||||||||||
Income (Loss) from continuing operations | (82,100,000) | 1,900,000 | 13,900,000 | 11,800,000 | 14,900,000 | 16,900,000 | 18,700,000 | 16,700,000 | (54,500,000) | 67,200,000 | 48,800,000 |
Add after-tax interest on convertible debt | 3,200,000 | ||||||||||
Less income attributable to participating shares | (300,000) | (1,500,000) | (1,900,000) | ||||||||
Income (loss) from continuing operations attributable to common shareholders | (54,800,000) | 65,700,000 | 50,100,000 | ||||||||
Income from discontinued operations attributable to common shareholders | $ 97.20 | $ (36.40) | $ 1.30 | $ 2.60 | $ 2,200,000 | $ 1,000,000 | $ 1,300,000 | $ 1,200,000 | 64,700,000 | 5,700,000 | 6,200,000 |
Net income attributable to common shareholders for earnings per share - diluted | $ 9,900,000 | $ 71,400,000 | $ 56,300,000 | ||||||||
Weighted average common shares outstanding - basic | 39,100,000 | 38,600,000 | 38,300,000 | ||||||||
Additional shares from assumed conversion of debt | 2,200,000 | ||||||||||
Additional shares from the assumed exercise of stock options | 300,000 | 500,000 | 100,000 | ||||||||
Weighted average common shares outstanding - diluted | 39,400,000 | 39,100,000 | 40,600,000 | ||||||||
Earnings (Loss) per share - basic: | |||||||||||
Earnings (Loss) from continuing operations | $ (2.12) | $ 0.05 | $ 0.35 | $ 0.30 | $ 0.38 | $ 0.43 | $ 0.48 | $ 0.42 | $ (1.40) | $ 1.70 | $ 1.23 |
Earnings from discontinued operations | 2.50 | (0.94) | 0.03 | 0.07 | 0.06 | 0.02 | 0.03 | 0.03 | 1.66 | 0.15 | 0.15 |
Earnings per share - basic | 0.38 | (0.89) | 0.38 | 0.37 | 0.44 | 0.45 | 0.51 | 0.45 | 0.26 | 1.85 | 1.38 |
Earnings per share - diluted: | |||||||||||
Earnings (Loss) from continuing operations | (2.12) | 0.05 | 0.35 | 0.30 | 0.37 | 0.43 | 0.47 | 0.42 | (1.40) | 1.68 | 1.23 |
Earnings from discontinued operations | 2.48 | (0.94) | 0.03 | 0.07 | 0.06 | 0.02 | 0.03 | 0.03 | 1.64 | 0.15 | 0.15 |
Earnings per share-diluted | $ 0.36 | $ (0.89) | $ 0.38 | $ 0.37 | $ 0.43 | $ 0.45 | $ 0.50 | $ 0.45 | $ 0.24 | $ 1.83 | $ 1.38 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | |||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | Mar. 26, 2015 | |
Cash balance pension plan | ||||
Employee benefit plans | ||||
Interest crediting rate as a percentage of average 30-year treasury rate | 100.00% | |||
Average period of treasury rate used in determination of interest crediting rate | 30 years | |||
Average interest crediting rate (as a percent) | 4.50% | |||
Defined Benefit Pension Plans | ||||
Change in projected benefit obligation: | ||||
Projected benefit obligation at beginning of year | $ 141.9 | $ 130.2 | ||
Service cost | 2 | 2.2 | ||
Interest cost | 4.8 | 5.1 | ||
Participant contributions | 0.3 | 0.4 | ||
Net actuarial loss | 21.7 | 5.7 | ||
Benefit payments | (6.4) | (5.1) | ||
Plan change | (1.4) | 0.6 | ||
Foreign currency adjustment | (12.9) | 2.8 | ||
Projected benefit obligation at end of year | 144.9 | 141.9 | $ 130.2 | |
Reconciliation of pension assets measured at fair value | ||||
Fair value of plan assets at beginning of year | 116 | 101.6 | ||
Actual return on plan assets | 12.5 | 10.5 | ||
Employer contributions | 4.6 | 6.2 | ||
Participant contributions | 0.3 | 0.4 | ||
Benefit payments | (6.4) | (5.1) | ||
Foreign currency adjustment | (11.2) | 2.4 | ||
Fair value of plan assets at end of year | 115.8 | 116 | 101.6 | |
Funded status at end of year | (29.1) | (25.9) | ||
Amounts recognized in the consolidated balance sheets | ||||
Accrued liabilities | (3.5) | (3.4) | ||
Other liabilities and deferred income | (25.6) | (22.5) | ||
Funded status at end of year | (29.1) | (25.9) | ||
Amounts recognized in accumulated other comprehensive loss | ||||
Actuarial loss | 60.2 | 51.2 | ||
Prior service cost (credit) | (0.3) | 1.4 | ||
Total | 59.9 | 52.6 | ||
Accumulated benefit obligation in excess of plan assets | ||||
Accumulated benefit obligation | 136.6 | 134.4 | ||
Net Periodic Benefit Cost | ||||
Service cost | 2 | 2.1 | 1.9 | |
Interest cost | 4.8 | 4.9 | 4.8 | |
Expected return on plan assets | (6) | (5.8) | (6) | |
Curtailment | 0.2 | |||
Amortization of prior service cost | 0.2 | 0.1 | 0.2 | |
Recognized net actuarial loss | 1.8 | 1.9 | 1.8 | |
Total | 3 | $ 3.2 | $ 2.7 | |
Estimated amounts that will be amortized from accumulated other comprehensive loss into expense over the next fiscal year | ||||
Net actuarial loss | 2.3 | |||
Prior service cost | 0.1 | |||
Total | $ 2.4 | |||
Defined Benefit Pension Plans | Board of Directors | ||||
Employee benefit plans | ||||
Benefits paid in cash as percentage of the annual retainer fees payable to active outside director | 25.00% | |||
Defined Benefit Pension Plans | Minimum | Board of Directors | ||||
Employee benefit plans | ||||
Minimum age of retirement | 65 years | |||
Required minimum years of service as a director | 5 years | |||
Defined Benefit Pension Plans | Maximum | Board of Directors | ||||
Employee benefit plans | ||||
Period for which benefits will be payable | 10 years | |||
Domestic plans | ||||
Key weighted-average assumptions used in the measurement of the company's projected benefit obligations | ||||
Discount rate (as a percent) | 4.15% | 4.23% | ||
Rate of compensation increase (as a percent) | 2.50% | 2.50% | ||
Weighted-average assumptions used to determine net periodic pension expense | ||||
Discount rate (as a percent) | 4.23% | 4.29% | 4.14% | |
Rate of compensation increase (as a percent) | 2.50% | 2.50% | 2.50% | |
Expected long-term rate on plan assets (as a percent) | 7.50% | 7.50% | 8.00% | |
Plan Assets | ||||
Actual asset allocation (as a percent) | 100.00% | 100.00% | ||
Domestic plans | Equity securities | ||||
Plan Assets | ||||
Actual asset allocation (as a percent) | 60.00% | 64.00% | ||
Domestic plans | Fixed income securities | ||||
Plan Assets | ||||
Actual asset allocation (as a percent) | 16.00% | 17.00% | ||
Domestic plans | Other | ||||
Plan Assets | ||||
Actual asset allocation (as a percent) | 24.00% | 19.00% | ||
Domestic plans | Minimum | Equity securities | ||||
Plan Assets | ||||
Target Asset Allocation (as a percent) | 45.00% | |||
Domestic plans | Minimum | Fixed income securities | ||||
Plan Assets | ||||
Target Asset Allocation (as a percent) | 15.00% | |||
Domestic plans | Minimum | Other | ||||
Plan Assets | ||||
Target Asset Allocation (as a percent) | 0.00% | |||
Domestic plans | Maximum | Equity securities | ||||
Plan Assets | ||||
Target Asset Allocation (as a percent) | 75.00% | |||
Domestic plans | Maximum | Fixed income securities | ||||
Plan Assets | ||||
Target Asset Allocation (as a percent) | 25.00% | |||
Domestic plans | Maximum | Other | ||||
Plan Assets | ||||
Target Asset Allocation (as a percent) | 25.00% | |||
International plans | ||||
Key weighted-average assumptions used in the measurement of the company's projected benefit obligations | ||||
Discount rate (as a percent) | 1.90% | 3.20% | ||
Rate of compensation increase (as a percent) | 3.00% | 3.00% | ||
Weighted-average assumptions used to determine net periodic pension expense | ||||
Discount rate (as a percent) | 1.90% | 3.70% | 4.20% | |
Rate of compensation increase (as a percent) | 3.00% | 3.00% | 3.00% | |
Expected long-term rate on plan assets (as a percent) | 4.00% | 3.70% | 4.20% | |
Telair Cargo Group | ||||
Change in projected benefit obligation: | ||||
Consideration received for sale of business | $ (0.4) | $ (725) | ||
Telair Cargo Group | Defined Benefit Pension Plans | ||||
Change in projected benefit obligation: | ||||
Consideration received for sale of business | $ (5.1) |
Employee Benefit Plans (Detai57
Employee Benefit Plans (Details 2) - Defined Benefit Pension Plans - USD ($) $ in Millions | 12 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Employee benefit plans | ||
Fair value of plan assets | $ 116 | $ 101.6 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 116 | 101.6 |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 115.8 | 116 |
Quoted prices in active markets (Level 1) | ||
Employee benefit plans | ||
Fair value of plan assets | 54.3 | 54.3 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 54.3 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 51.6 | 54.3 |
Quoted prices in active markets (Level 1) | U.S. common stock | ||
Employee benefit plans | ||
Fair value of plan assets | 6.5 | 6.5 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 6.5 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 3.3 | 6.5 |
Quoted prices in active markets (Level 1) | U.S. mutual funds | ||
Employee benefit plans | ||
Fair value of plan assets | 24 | 24 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 24 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 26.8 | 24 |
Quoted prices in active markets (Level 1) | International common stock | ||
Employee benefit plans | ||
Fair value of plan assets | 0.6 | 0.6 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 0.6 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 0.1 | 0.6 |
Quoted prices in active markets (Level 1) | International mutual funds | ||
Employee benefit plans | ||
Fair value of plan assets | 9.1 | 9.1 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 9.1 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 9.1 | 9.1 |
Quoted prices in active markets (Level 1) | Government securities and corporate bond mutual funds | ||
Employee benefit plans | ||
Fair value of plan assets | 11 | 11 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 11 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 10.3 | 11 |
Quoted prices in active markets (Level 1) | Cash and cash equivalents | ||
Employee benefit plans | ||
Fair value of plan assets | 3.1 | 3.1 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 3.1 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 2 | 3.1 |
Significant other observable inputs (Level 2) | ||
Employee benefit plans | ||
Fair value of plan assets | 50.6 | 50.6 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 50.6 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 49.1 | 50.6 |
Significant other observable inputs (Level 2) | Funds-of-funds | ||
Employee benefit plans | ||
Fair value of plan assets | 50.6 | 50.6 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 50.6 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 49.1 | 50.6 |
Significant other unobservable inputs (Level 3) | ||
Employee benefit plans | ||
Fair value of plan assets | 11.1 | 10.1 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 11.1 | 10.1 |
Sales | (4.7) | |
Purchases | 3.2 | 5.4 |
Return on plan assets related to: | ||
Assets sold | (0.3) | |
Assets still held | 0.8 | 0.6 |
Fair value of plan assets at end of year | 15.1 | 11.1 |
Significant other unobservable inputs (Level 3) | Hedge funds | ||
Employee benefit plans | ||
Fair value of plan assets | 3.6 | 2.4 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 3.6 | 2.4 |
Sales | (2.4) | |
Purchases | 3.2 | 3.6 |
Return on plan assets related to: | ||
Assets still held | 0.3 | |
Fair value of plan assets at end of year | 7.1 | 3.6 |
Significant other unobservable inputs (Level 3) | Funds-of-funds | ||
Employee benefit plans | ||
Fair value of plan assets | 7.5 | 7.7 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 7.5 | 7.7 |
Sales | (2.3) | |
Purchases | 1.8 | |
Return on plan assets related to: | ||
Assets sold | (0.3) | |
Assets still held | 0.5 | 0.6 |
Fair value of plan assets at end of year | 8 | 7.5 |
Total | ||
Employee benefit plans | ||
Fair value of plan assets | 116 | 116 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 116 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 115.8 | 116 |
Total | U.S. common stock | ||
Employee benefit plans | ||
Fair value of plan assets | 6.5 | 6.5 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 6.5 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 3.3 | 6.5 |
Total | U.S. mutual funds | ||
Employee benefit plans | ||
Fair value of plan assets | 24 | 24 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 24 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 26.8 | 24 |
Total | International common stock | ||
Employee benefit plans | ||
Fair value of plan assets | 0.6 | 0.6 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 0.6 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 0.1 | 0.6 |
Total | International mutual funds | ||
Employee benefit plans | ||
Fair value of plan assets | 9.1 | 9.1 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 9.1 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 9.1 | 9.1 |
Total | Government securities and corporate bond mutual funds | ||
Employee benefit plans | ||
Fair value of plan assets | 11 | 11 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 11 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 10.3 | 11 |
Total | Hedge funds | ||
Employee benefit plans | ||
Fair value of plan assets | 3.6 | 3.6 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 3.6 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 7.1 | 3.6 |
Total | Funds-of-funds | ||
Employee benefit plans | ||
Fair value of plan assets | 58.1 | 58.1 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 58.1 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | 57.1 | 58.1 |
Total | Cash and cash equivalents | ||
Employee benefit plans | ||
Fair value of plan assets | 3.1 | 3.1 |
Reconciliation of pension assets measured at fair value | ||
Fair value of plan assets at beginning of year | 3.1 | |
Return on plan assets related to: | ||
Fair value of plan assets at end of year | $ 2 | $ 3.1 |
Employee Benefit Plans (Detai58
Employee Benefit Plans (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Defined Contribution Plan | |||
Vesting period | 3 years | ||
Expense charged to statement of income | $ 11.9 | $ 11.8 | $ 13 |
Maximum | |||
Defined Contribution Plan | |||
Maximum percentage of pretax compensation that can be contributed by employees' for 401 (k) defined contribution plan | 75.00% | ||
Maximum matching contribution of employer for 401 (k) defined contribution plan (as a percent) | 5.00% | ||
Defined Benefit Pension Plans | |||
Estimated future pension payments | |||
2,016 | $ 10.5 | ||
2,017 | 5.3 | ||
2,018 | 5.8 | ||
2,019 | 5.5 | ||
2,020 | 5.9 | ||
2021 to 2025 | 31.6 | ||
Funded status | |||
Unfunded projected benefit obligation | 29.1 | 25.9 | |
Domestic plans | |||
Estimated future pension payments | |||
Anticipated contribution in next fiscal year | 3.5 | ||
Postretirement Benefits Other Than Pensions | |||
Funded status | |||
Unfunded projected benefit obligation | $ 1 | $ 0.9 |
Accumulated Other Comprehensi59
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Accumulated Other Comprehensive Loss | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | $ (29.3) | $ (42.5) | |
Other comprehensive income (loss) before reclassifications | (64.2) | 11.9 | $ 11.5 |
Amounts reclassified from AOCL | 3.4 | 1.3 | 1.2 |
Total other comprehensive income (loss), net of tax | (11.1) | 13.2 | 12.7 |
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | (40.4) | (29.3) | (42.5) |
Telair Cargo Group | |||
Accumulated Other Comprehensive Loss | |||
Sale of business | 49.7 | ||
Currency Translation Adjustments | |||
Accumulated Other Comprehensive Loss | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | 8.7 | (5.3) | |
Other comprehensive income (loss) before reclassifications | (56.9) | 14 | 8.7 |
Total other comprehensive income (loss), net of tax | (7.8) | 14 | 8.7 |
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | 0.9 | 8.7 | (5.3) |
Currency Translation Adjustments | Telair Cargo Group | |||
Accumulated Other Comprehensive Loss | |||
Sale of business | 49.1 | ||
Pensions Plans | |||
Accumulated Other Comprehensive Loss | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | (35.4) | (33.9) | |
Other comprehensive income (loss) before reclassifications | (7.9) | (2.8) | 2.2 |
Amounts reclassified from AOCL | 1.4 | 1.3 | 1.2 |
Total other comprehensive income (loss), net of tax | (5.9) | (1.5) | 3.4 |
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | (41.3) | (35.4) | (33.9) |
Pensions Plans | Telair Cargo Group | |||
Accumulated Other Comprehensive Loss | |||
Sale of business | 0.6 | ||
Derivative Instruments | |||
Accumulated Other Comprehensive Loss | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | (2.6) | (3.3) | |
Other comprehensive income (loss) before reclassifications | 0.6 | 0.7 | 0.6 |
Amounts reclassified from AOCL | 2 | ||
Total other comprehensive income (loss), net of tax | $ 2.6 | 0.7 | 0.6 |
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | $ (2.6) | $ (3.3) |
Aircraft Portfolio (Details)
Aircraft Portfolio (Details) $ in Millions | 12 Months Ended | ||
May. 31, 2015USD ($)aircraftitem | May. 31, 2014USD ($) | May. 31, 2013USD ($)item | |
Aircraft portfolio | |||
Sales from services | $ 702.9 | $ 807.8 | $ 907.3 |
Owned Through Joint Ventures | |||
Aircraft portfolio | |||
Equity investments | 20.5 | 28.7 | |
Investment in joint ventures, receivable from sale of aircraft | $ 5.7 | 12.2 | |
Membership interest in joint ventures (as a percent) | 50.00% | ||
Sales from services | $ 0.1 | 0.1 | 0.5 |
Summarized income statement information | |||
Sales | 14.7 | 10.4 | 115.2 |
Income before provision for income taxes | $ 0.9 | 6.7 | $ 13.5 |
Number of aircraft sold by joint venture partners | item | 1 | 12 | |
Revenue from sale of aircraft by joint venture partners | $ 5.1 | $ 77.9 | |
Balance sheet information: | |||
Assets | 48.2 | 71.3 | |
Debt | 4.6 | 11.4 | |
Members' capital | $ 41 | $ 57.5 | |
Wholly-Owned | |||
Aircraft portfolio | |||
Membership interest in joint ventures (as a percent) | 100.00% | ||
Balance sheet information: | |||
Number of aircraft sold | aircraft | 2 | ||
Aircraft | Owned Through Joint Ventures | |||
Aircraft portfolio | |||
Owned aircraft, number | item | 3 |
Aircraft Portfolio (Details 2)
Aircraft Portfolio (Details 2) - May. 31, 2015 $ in Millions | USD ($)aircraftitem | USD ($)aircraftitem |
Owned Through Joint Ventures | ||
Aircraft portfolio | ||
Percentage of owned aircraft | 50.00% | 50.00% |
Wholly-Owned | ||
Aircraft portfolio | ||
Percentage of owned aircraft | 100.00% | 100.00% |
Number of Aircraft Sold | aircraft | 2 | 2 |
Carrying value of aircraft sold | $ | $ 25.8 | |
Loss on sale of aircraft | $ | $ 11 | $ 14.8 |
Aircraft | Owned Through Joint Ventures | ||
Aircraft portfolio | ||
Owned aircraft, number | 3 | 3 |
Aircraft | Owned Through Joint Ventures | Aircraft Type 767-300 | Aircraft Manufactured Year 1991 Member | United Airlines | Lease Expiration Date (FY) 2022 | ||
Aircraft portfolio | ||
Owned aircraft, number | 2 | 2 |
Aircraft | Owned Through Joint Ventures | Aircraft Type 737-400 | Aircraft Manufactured Year 1993 Member | ||
Aircraft portfolio | ||
Owned aircraft, number | 1 | 1 |
Commitments and Contingencies62
Commitments and Contingencies (Details) - USD ($) $ in Millions | Oct. 03, 2003 | May. 31, 2015 | May. 31, 2015 | May. 31, 2014 |
Sale-leaseback transaction | ||||
Net proceeds from sale of facility | $ 40.3 | |||
Garden City lease | ||||
Sale-leaseback transaction | ||||
Net proceeds from sale of facility | $ 14 | $ 40.3 | ||
Cost of the facility | 9.5 | |||
Accumulated depreciation of the facility | 4.6 | |||
Deferred gain realized on the sale | $ 9.1 | |||
Deferred gain amortization period | 20 years | 2 years | ||
Unamortized balance of the deferred gain | $ 3.8 | $ 3.8 | $ 4.3 |
Commitments and Contingencies63
Commitments and Contingencies (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Future minimum payments under operating leases | |||
2,016 | $ 222.6 | ||
2,017 | 15.2 | ||
Aggregate amount of purchase obligations due in each of the next five fiscal years | |||
2,018 | 4.1 | ||
2,019 | 0.1 | ||
2,020 | 0.1 | ||
Letters of credit and performance bonds outstanding | 15.4 | ||
Facilities and Equipment | |||
Future minimum payments under operating leases | |||
2,016 | 19.7 | ||
2,017 | 15.6 | ||
2,018 | 11.3 | ||
2,019 | 9.9 | ||
2,020 | 9.4 | ||
2021 and thereafter | 38 | ||
Rental expense | |||
Rental expense, net | $ 33.3 | $ 30.6 | $ 30 |
Other Noncurrent Assets (Detail
Other Noncurrent Assets (Details) - USD ($) $ in Millions | May. 31, 2015 | May. 31, 2014 |
Other Noncurrent Assets | ||
Assets under deferred compensation plan | $ 28.8 | $ 23.7 |
Cash surrender value of life insurance | 17.5 | 17.3 |
Costs in excess of billings | 14.4 | 15.1 |
License fees | 12.2 | 13 |
Notes receivable | 4.3 | 5.2 |
Debt issuance costs | 2.6 | 9.6 |
Other | 5.4 | 16.2 |
Other Assets, Noncurrent, Total | $ 85.2 | $ 100.1 |
Other Noncurrent Assets (Deta65
Other Noncurrent Assets (Details 2) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2011 | May. 31, 2015 | May. 31, 2014 | |
Intangible assets | |||
License fees | $ 12.2 | $ 13 | |
Exclusive distribution rights | Unison Industries | |||
Intangible assets | |||
Term of agreement | 10 years | ||
Amount agreed to be paid | $ 20 | ||
Amount paid | $ 7 | ||
Amount payable in each calendar year | 1.3 | ||
Licensing Agreements [Member] | |||
Intangible assets | |||
Current portion of the deferred payments | 1.3 | ||
Licensing Agreements [Member] | Unison Industries | |||
Intangible assets | |||
License fees | $ 10.4 | $ 11.9 | |
Amortization period | 10 years | ||
Long-term portion | $ 5.1 |
Business Segment Information (D
Business Segment Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
May. 31, 2015USD ($) | Feb. 28, 2015USD ($) | Nov. 30, 2014USD ($) | Aug. 31, 2014USD ($) | May. 31, 2014USD ($) | Feb. 28, 2014USD ($) | Nov. 30, 2013USD ($) | Aug. 31, 2013USD ($) | May. 31, 2015USD ($)item | May. 31, 2014USD ($) | May. 31, 2013USD ($) | |
Business Segment Information | |||||||||||
Number of business segments | item | 2 | ||||||||||
Business Segment Information | |||||||||||
Net sales | $ 415.8 | $ 380.1 | $ 403.3 | $ 395.1 | $ 420.6 | $ 399.8 | $ 458.9 | $ 429.8 | $ 1,594.3 | $ 1,709.1 | $ 1,807.9 |
Gross Profit | (20.4) | $ 50.1 | $ 67.2 | $ 62.4 | 73.5 | $ 66.2 | $ 77.4 | $ 71.8 | 159.3 | 288.9 | 259.5 |
Total assets | 1,515 | 2,194 | 1,515 | 2,194 | 2,136.9 | ||||||
Capital expenditures | 46.3 | 26.5 | 37.6 | ||||||||
Depreciation and amortization, including depreciation and amortization of stock-based compensation, Net | 76.9 | 89.1 | 90.8 | ||||||||
Continuing operations | |||||||||||
Business Segment Information | |||||||||||
Capital expenditures | 42.1 | 20.8 | 32.5 | ||||||||
Depreciation and amortization, including depreciation and amortization of stock-based compensation, Gross | 63.4 | 73.3 | 76.9 | ||||||||
Discontinued operations | |||||||||||
Business Segment Information | |||||||||||
Total assets | 17 | 663.4 | 17 | 663.4 | 617.1 | ||||||
Capital expenditures | 4.2 | 5.7 | 5.1 | ||||||||
Discontinued operations | 13.5 | 15.8 | 13.9 | ||||||||
Aviation Services | |||||||||||
Business Segment Information | |||||||||||
Net sales | 1,316.1 | 1,231.2 | 1,246.9 | ||||||||
Gross Profit | 143.8 | 172.5 | 145.1 | ||||||||
Total assets | 919 | 930.6 | 919 | 930.6 | 882.6 | ||||||
Aviation Services | Continuing operations | |||||||||||
Business Segment Information | |||||||||||
Capital expenditures | 8.7 | 9.5 | 8.7 | ||||||||
Depreciation and amortization, including depreciation and amortization of stock-based compensation, Gross | 28.9 | 25.6 | 24.2 | ||||||||
Expeditionary Services | |||||||||||
Business Segment Information | |||||||||||
Net sales | 278.2 | 477.9 | 561 | ||||||||
Gross Profit | 15.5 | 116.4 | 114.4 | ||||||||
Total assets | 387.6 | 424.4 | 387.6 | 424.4 | 479.7 | ||||||
Expeditionary Services | Continuing operations | |||||||||||
Business Segment Information | |||||||||||
Capital expenditures | 20.3 | 9 | 22.7 | ||||||||
Depreciation and amortization, including depreciation and amortization of stock-based compensation, Gross | 24.9 | 37.1 | 41 | ||||||||
Corporate | |||||||||||
Business Segment Information | |||||||||||
Total assets | $ 191.4 | $ 175.6 | 191.4 | 175.6 | 157.5 | ||||||
Corporate | Continuing operations | |||||||||||
Business Segment Information | |||||||||||
Capital expenditures | 13.1 | 2.3 | 1.1 | ||||||||
Depreciation and amortization, including depreciation and amortization of stock-based compensation, Gross | $ 9.6 | $ 10.6 | $ 11.7 |
Business Segment Information 67
Business Segment Information (Details 2) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Reconciliation of segment gross profit to consolidated income before provision for income taxes | |||||||||||
Segment gross profit | $ (20.4) | $ 50.1 | $ 67.2 | $ 62.4 | $ 73.5 | $ 66.2 | $ 77.4 | $ 71.8 | $ 159.3 | $ 288.9 | $ 259.5 |
Selling, general and administrative | (171.4) | (166.3) | (164) | ||||||||
Earnings from joint ventures | 0.2 | 3 | 6.7 | ||||||||
Loss on extinguishment of debt | (44.9) | (0.3) | |||||||||
Interest expense | (26.5) | (28.3) | (29.1) | ||||||||
Interest income | 0.3 | 1.5 | 1.4 | ||||||||
Income (Loss) from continuing operations before provision for income taxes | $ (83) | $ 98.8 | $ 74.2 |
Business Segment Information 68
Business Segment Information (Details 3) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Business Segment Information | |||||||||||
Sales | $ 415.8 | $ 380.1 | $ 403.3 | $ 395.1 | $ 420.6 | $ 399.8 | $ 458.9 | $ 429.8 | $ 1,594.3 | $ 1,709.1 | $ 1,807.9 |
U.S. Department of Defense, other U.S. government agencies and their contractors | |||||||||||
Business Segment Information | |||||||||||
Sales | $ 493.1 | $ 661.7 | $ 733.7 | ||||||||
Percentage of total sales | 30.90% | 38.70% | 40.60% | ||||||||
Aviation Services | |||||||||||
Business Segment Information | |||||||||||
Sales | $ 1,316.1 | $ 1,231.2 | $ 1,246.9 | ||||||||
Aviation Services | U.S. Department of Defense, other U.S. government agencies and their contractors | |||||||||||
Business Segment Information | |||||||||||
Sales | 237.3 | 199.1 | 192.1 | ||||||||
Expeditionary Services | |||||||||||
Business Segment Information | |||||||||||
Sales | 278.2 | 477.9 | 561 | ||||||||
Expeditionary Services | U.S. Department of Defense, other U.S. government agencies and their contractors | |||||||||||
Business Segment Information | |||||||||||
Sales | $ 255.8 | $ 462.6 | $ 541.6 |
Business Segment Information 69
Business Segment Information (Details 4) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Business Segment Information | |||||||||||
Long-lived assets | $ 560.9 | $ 1,082.6 | $ 560.9 | $ 1,082.6 | |||||||
Sales | 415.8 | $ 380.1 | $ 403.3 | $ 395.1 | 420.6 | $ 399.8 | $ 458.9 | $ 429.8 | 1,594.3 | 1,709.1 | $ 1,807.9 |
United States | |||||||||||
Business Segment Information | |||||||||||
Long-lived assets | 523.8 | 809 | 523.8 | 809 | |||||||
Europe | |||||||||||
Business Segment Information | |||||||||||
Long-lived assets | 37 | 271.4 | 37 | 271.4 | |||||||
Other | |||||||||||
Business Segment Information | |||||||||||
Long-lived assets | $ 0.1 | $ 2.2 | 0.1 | 2.2 | |||||||
Foreign countries | |||||||||||
Business Segment Information | |||||||||||
Sales | $ 536.5 | $ 456 | $ 464.9 | ||||||||
Foreign countries | Total sales | Geographic concentration | |||||||||||
Business Segment Information | |||||||||||
Percentage of total sales | 33.70% | 26.70% | 25.70% |
Selected Quarterly Data (Unau70
Selected Quarterly Data (Unaudited) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Sales | $ 415,800,000 | $ 380,100,000 | $ 403,300,000 | $ 395,100,000 | $ 420,600,000 | $ 399,800,000 | $ 458,900,000 | $ 429,800,000 | $ 1,594,300,000 | $ 1,709,100,000 | $ 1,807,900,000 |
Gross Profit | (20,400,000) | 50,100,000 | 67,200,000 | 62,400,000 | 73,500,000 | 66,200,000 | 77,400,000 | 71,800,000 | 159,300,000 | 288,900,000 | 259,500,000 |
Income (Loss) from Continuing Operations Attributable to AAR | (82,100,000) | 1,900,000 | 13,900,000 | 11,800,000 | 14,900,000 | 16,900,000 | 18,700,000 | 16,700,000 | (54,500,000) | 67,200,000 | 48,800,000 |
Income (Loss) from discontinued operations attributable to AAR | 97.20 | (36.40) | 1.30 | 2.60 | 2,200,000 | 1,000,000 | 1,300,000 | 1,200,000 | 64,700,000 | 5,700,000 | 6,200,000 |
Net income attributable to AAR | $ 15,100,000 | $ (34,500,000) | $ 15,200,000 | $ 14,400,000 | $ 17,100,000 | $ 17,900,000 | $ 20,000,000 | $ 17,900,000 | $ 10,200,000 | $ 72,900,000 | $ 55,000,000 |
Earnings (Loss) per share - basic: | |||||||||||
Earnings (Loss) from continuing operations | $ (2.12) | $ 0.05 | $ 0.35 | $ 0.30 | $ 0.38 | $ 0.43 | $ 0.48 | $ 0.42 | $ (1.40) | $ 1.70 | $ 1.23 |
Earnings (Loss) from discontinued operations | 2.50 | (0.94) | 0.03 | 0.07 | 0.06 | 0.02 | 0.03 | 0.03 | 1.66 | 0.15 | 0.15 |
Earnings per share - basic | 0.38 | (0.89) | 0.38 | 0.37 | 0.44 | 0.45 | 0.51 | 0.45 | 0.26 | 1.85 | 1.38 |
Earnings (Loss) per share - diluted: | |||||||||||
Earnings (Loss) from continuing operations | (2.12) | 0.05 | 0.35 | 0.30 | 0.37 | 0.43 | 0.47 | 0.42 | (1.40) | 1.68 | 1.23 |
Earnings (Loss) from discontinued operations | 2.48 | (0.94) | 0.03 | 0.07 | 0.06 | 0.02 | 0.03 | 0.03 | 1.64 | 0.15 | 0.15 |
Earnings (Loss) per share-diluted | 0.36 | (0.89) | 0.38 | 0.37 | 0.43 | 0.45 | 0.50 | 0.45 | 0.24 | 1.83 | 1.38 |
Diluted earnings per share (in dollars per share) | $ (2.12) | $ 0.05 | $ 0.35 | $ 0.30 | $ 0.37 | $ 0.43 | $ 0.47 | $ 0.42 | $ (1.40) | $ 1.68 | $ 1.23 |
Loss on extinguishment of debt | $ 44,900,000 | $ 300,000 | |||||||||
Impairment charges and other losses | $ 71,400,000 | ||||||||||
Pre-tax gain on sale of business (net of transaction expenses and fees) | 198,600,000 | ||||||||||
Precision Systems Manufacturing | |||||||||||
Earnings (Loss) per share - diluted: | |||||||||||
Impairment of Precision Systems Manufacturing | $ 46,400,000 | 11,100,000 | |||||||||
Impairment of net assets | $ 46,400,000 | $ 11,100,000 | |||||||||
Telair Cargo Group | |||||||||||
Earnings (Loss) per share - diluted: | |||||||||||
Pre-tax gain on sale of business (net of transaction expenses and fees) | $ 198,600,000 |
Allowance for Doubtful Accoun71
Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | |||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | Mar. 26, 2015 | |
Changes in allowance for doubtful accounts | ||||
Reclassification to assets of discontinued operations | $ (0.1) | |||
Allowance for Doubtful Accounts | ||||
Changes in allowance for doubtful accounts | ||||
Balance, beginning of year | 6.2 | $ 8.7 | $ 6.5 | |
Provision charged to operations | 1.7 | 0.7 | 6.8 | |
Deductions for accounts written off, net of recoveries | (1.6) | (3.2) | (4.6) | |
Balance, end of year | 5.8 | $ 6.2 | $ 8.7 | |
Telair Cargo Group | ||||
Changes in allowance for doubtful accounts | ||||
Consideration received for sale of business | $ (0.4) | $ (725) |
Uncategorized Items - air-20150
Label | Element | Value |
Accumulated Defined Benefit Plans Adjustment [Member] | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | us-gaap_AccumulatedOtherComprehensiveIncomeLossNetOfTax | $ (37.3) |
Accumulated Net Gain Loss From Designated Or Qualifying Cash Flow Hedges [Member] | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | us-gaap_AccumulatedOtherComprehensiveIncomeLossNetOfTax | (3.9) |
Accumulated Translation Adjustment [Member] | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | us-gaap_AccumulatedOtherComprehensiveIncomeLossNetOfTax | $ (14) |