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

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

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

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

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

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

As of ~~June 2, 2015, 30,809,348~~May 4, 2016, 29,353,387 shares of the issuer’s common stock were outstanding.

	May 1,		October 31,		April 1,		October 2,
	2015		2014		2016		2015
	(Unaudited)				(Unaudited)
ASSETS

Current Assets
Cash and cash equivalents	$	172,645	$	238,144	$	219,271	$	191,355
Accounts receivable, net of allowances of $9,808 and $10,023		384,662		379,889
Cash in escrow						1,125		-
Accounts receivable, net of allowances of $8,746 and $10,050						374,090		380,748
Inventories
Raw materials and purchased parts		179,908		165,839		175,848		169,153
Work in progress		196,920		178,354		187,056		181,187
Finished goods		102,760		89,402		97,813		96,428
		479,588		433,595		460,717		446,768

Income tax refundable		9,394		5,266		11,411		12,575
Deferred income tax benefits		52,524		48,679		-		41,082
Prepaid expenses		23,892		20,336		21,816		23,008
Other current assets		3,600		2,149		6,213		5,427
Current assets of businesses held for sale		40,399		41,446		19,217		27,851
Total Current Assets		1,166,704		1,169,504		1,113,860		1,128,814

Property, Plant and Equipment		716,721		721,460		771,321		729,317
Accumulated depreciation		410,123		402,118		443,957		419,918
		306,598		319,342		327,364		309,399

Other Non-Current Assets
Goodwill		1,074,437		1,071,786		1,042,283		1,041,991
Intangibles, net		475,931		471,377		425,457		452,040
Debt issuance costs, net of accumulated amortization of $2,336 and $5,743		11,162		4,295
Deferred income tax benefits		62,759		71,307		65,783		28,979
Other assets		21,825		14,179		15,988		14,348
Non-current assets of businesses held for sale		56,952		71,677		21,305		24,917
	$	3,176,368	$	3,193,467
Total Assets					$	3,012,040	$	3,000,488

	May 1,			October 31,			April 1,			October 2,
	2015			2014			2016			2015
	(Unaudited)						(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
Accounts payable	$	123,448		$	115,284		$	123,309		$	117,976
Accrued liabilities		264,493			262,536			257,681			259,734
Current maturities of long-term debt		1,002			12,774			17,182			13,376
Deferred income tax liabilities		2,851			1,773
Federal and foreign income taxes		1,617			1,571			1,527			2,404
Current liabilities of businesses held for sale		14,181			14,191			14,180			17,106
Total Current Liabilities		407,592			408,129			413,879			410,596

Long-Term Liabilities
Credit facilities		120,000			100,000			165,000			160,000
Long-term debt, net of current maturities		722,954			509,720			698,583			701,457
Deferred income tax liabilities		137,983			149,165			63,073			73,849
Pension and post-retirement obligations		57,968			62,693			74,188			75,019
Other liabilities		29,958			46,884			24,182			29,367
Non-current liabilities of businesses held for sale		19,427			18,876			822			2,409

Shareholders' Equity
Common stock, par value $.20 per share, authorized 60,000,000 shares, issued 32,302,123 and 32,123,717 shares		6,460			6,425
Common stock, par value $.20 per share, authorized 60,000,000 shares, issued 32,481,814 and 32,378,185 shares								6,496			6,476
Additional paid-in capital		672,319			655,723			694,022			682,479
Treasury stock at cost, repurchased 1,431,664 and 269,228 shares		(157,604	)		(30,262	)
Treasury stock at cost, repurchased 3,033,660 and 2,831,350 shares								(301,856	)		(289,780	)
Retained earnings		1,415,637			1,387,508			1,467,177			1,447,120
Accumulated other comprehensive loss		(266,348	)		(131,577	)		(304,088	)		(308,828	)
Total Esterline shareholders' equity		1,670,464			1,887,817
Total Esterline Shareholders' Equity								1,561,751			1,537,467
Noncontrolling interests		10,022			10,183			10,562			10,324
Total Shareholders' Equity		1,680,486			1,898,000			1,572,313			1,547,791
	$	3,176,368		$	3,193,467
Total Liabilities and Shareholders' Equity							$	3,012,040		$	3,000,488

For the Three and Six Month Periods Ended ~~May~~April 1, ~~2015~~2016 and ~~May 2, 2014~~March 27, 2015

															Three Months Ended						Six Months Ended
		Three Months Ended						Six Months Ended							April 1,			March 27,			April 1,			March 27,
		May 1,			May 2,			May 1,			May 2,				2016			2015			2016			2015
		2015			2014			2015			2014							(Recast)						(Recast)

Net Sales		$	500,080		$	510,861		$	946,424		$	996,801			$	490,310		$	468,210		$	931,787		$	972,821
Cost of Sales			336,429			331,636			637,423			646,841				334,137			318,193			637,895			644,563
			163,651			179,225			309,001			349,960				156,173			150,017			293,892			328,258
Expenses
Selling, general & administrative			100,742			92,035			194,398			181,167			��	102,423			99,432			196,514			197,521
Research, development and engineering			27,000			25,536			49,455			51,182				24,974			25,143			50,549			48,674
Restructuring charges			922			2,078			3,972			6,874				940			1,634			1,871			4,927
Other (income) expense			-			-			(12,744	)		-				-			(12,744	)		-			(12,744	)
Total Expenses			128,664			119,649			235,081			239,223				128,337			113,465			248,934			238,378

Operating Earnings from Continuing Operations			34,987			59,576			73,920			110,737				27,836			36,552			44,958			89,880
Interest Income			(124	)		(136	)		(303	)		(255	)			(94	)		(135	)		(181	)		(319	)
Interest Expense			8,564			8,434			14,405			17,059				7,294			5,934			14,510			14,016
Loss on Extinguishment of Debt			329			-			329			-

Earnings from Continuing Operations Before Income Taxes			26,218			51,278			59,489			93,933				20,636			30,753			30,629			76,183
Income Tax Expense			4,542			10,386			12,692			19,012
Income Tax Expense (Benefit)																3,416			5,714			3,383			16,686
Earnings from Continuing Operations Including Noncontrolling Interests			21,676			40,892			46,797			74,921				17,220			25,039			27,246			59,497

Earnings Attributable to Noncontrolling Interests			(44	)		(297	)		(107	)		(383	)
Loss (Earnings) Attributable to Noncontrolling Interests																(224	)		(108	)		(386	)		(91	)
Earnings from Continuing Operations Attributable to Esterline, Net of Tax			21,632			40,595			46,690			74,538				16,996			24,931			26,860			59,406

Loss from Discontinued Operations Attributable to Esterline, Net of Tax			(1,822	)		(3,691	)		(18,561	)		(7,556	)			(2,023	)		(14,600	)		(6,803	)		(20,476	)

Net Earnings Attributable to Esterline		$	19,810		$	36,904		$	28,129		$	66,982			$	14,973		$	10,331		$	20,057		$	38,930

Earnings (Loss) Per Share Attributable to Esterline - Basic:	Earnings (Loss) Per Share Attributable to Esterline - Basic:													Earnings (Loss) Per Share Attributable to Esterline - Basic:
Continuing operations		$	0.70		$	1.28		$	1.49		$	2.35			$	0.58		$	0.80		$	0.91		$	1.89
Discontinued operations			(0.06	)		(0.12	)		(0.59	)		(0.24	)			(0.07	)		(0.47	)		(0.23	)		(0.65	)
Earnings (Loss) Per Share Attributable to Esterline - Basic		$	0.64		$	1.16		$	0.90		$	2.11
Earnings (Loss) Per Share - Basic															$	0.51		$	0.33		$	0.68		$	1.24

Earnings (Loss) Per Share Attributable to Esterline - Diluted:	Earnings (Loss) Per Share Attributable to Esterline - Diluted:													Earnings (Loss) Per Share Attributable to Esterline - Diluted:
Continuing operations		$	0.69		$	1.25		$	1.46		$	2.30			$	0.57		$	0.79		$	0.90		$	1.86
Discontinued operations			(0.06	)		(0.11	)		(0.58	)		(0.23	)			(0.07	)		(0.46	)		(0.23	)		(0.64	)
Earnings (Loss) Per Share Attributable to Esterline - Diluted		$	0.63		$	1.14		$	0.88		$	2.07
Earnings (Loss) Per Share - Diluted															$	0.50		$	0.33		$	0.67		$	1.22

Net Earnings															$	14,973		$	10,331		$	20,057		$	38,930

Change in Fair Value of Derivative Financial Instruments																20,274			(12,667	)		16,101			(18,747	)
Income Tax Expense (Benefit)																5,779			(3,540	)		4,494			(5,682	)
																14,495			(9,127	)		11,607			(13,065	)

Change in Pension and Post-Retirement Obligations																(87	)		9,195			2,188			(626	)
Income Tax Expense (Benefit)																83			3,005			840			(312	)
																(170	)		6,190			1,348			(314	)

Currency Translation Adjustment																31,246			(116,598	)		(8,215	)		(172,596	)
Comprehensive Income (Loss)		$	33,544		$	80,121		$	(106,642	)	$	69,683			$	60,544		$	(109,204	)	$	24,797		$	(147,045	)

For the Six Month Periods Ended ~~May~~April 1, ~~2015~~2016 and ~~May 2, 2014~~March 27, 2015

							April 1,			March 27,
	May 1,			May 2,			2016			2015
	2015			2014						(Recast)

Cash Flows Provided (Used) by Operating Activities
Net earnings including noncontrolling interests	$	28,236		$	67,365		$	20,443		$	39,021
Adjustments to reconcile net earnings including noncontrolling interests to net cash provided (used) by operating activities:
Depreciation and amortization		49,853			59,282			48,736			49,827
Deferred income taxes		(7,472	)		(8,410	)		(10,094	)		(9,217	)
Share-based compensation		5,552			6,648			7,578			6,274
Gain on release of non-income tax liability		(15,656	)		-			-			(15,656	)
Loss on assets held for sale		15,846			-			3,572			14,447
Working capital changes, net of effect of acquisitions:
Accounts receivable		12,183			33,331			7,700			(21,394	)
Inventories		(24,280	)		(33,485	)		(7,275	)		(8,789	)
Prepaid expenses		(5,208	)		(8,072	)		1,120			(3,419	)
Other current assets		(327	)		(276	)		624			(40	)
Accounts payable		(2,920	)		(10,650	)		1,439			8,866
Accrued liabilities		(10,440	)		(13,224	)		917			1,907
Federal and foreign income taxes		56			(3,754	)		(690	)		(4,506	)
Other liabilities		2,297			(1,587	)		(1,345	)		4,771
Other, net		7,958			(2,716	)		7,159			(11,222	)
		55,678			84,452			79,884			50,870

Cash Flows Provided (Used) by Investing Activities
Purchase of capital assets		(23,435	)		(21,297	)		(42,506	)		(25,340	)
Acquisition of business, net of cash acquired		(171,070	)		(44,043	)
Escrow deposit								(1,125	)		-
Acquisition of businesses, net of cash acquired								-			(171,070	)
		(194,505	)		(65,340	)		(43,631	)		(196,410	)

Cash Flows Provided (Used) by Financing Activities
Proceeds provided by stock issuance under employee stock plans		9,335			22,957			3,489			10,103
Excess tax benefits from stock option exercises		1,744			5,297			496			2,113
Shares repurchased		(127,342	)		-			(12,076	)		(127,420	)
Repayment of long-term credit facilities		(190,000	)		(25,000	)		(10,000	)		(10,000	)
Repayment of long-term debt		(167,478	)		(19,302	)		(6,158	)		(9,918	)
Proceeds from issuance of long-term credit facilities		210,000			25,000			15,000			210,000
Proceeds from issuance of long-term debt		356,532			-
Proceeds from government assistance		3,142			-			-			3,310
Dividends paid to noncontrolling interests		-			(780	)
Debt and other issuance costs		(7,890	)		-
		88,043			8,172			(9,249	)		78,188

Effect of Foreign Exchange Rates on Cash and Cash Equivalents		(14,715	)		981			912			(14,576	)
Net Increase (Decrease) in Cash and Cash Equivalents		(65,499	)		28,265			27,916			(81,928	)

Cash and Cash Equivalents - Beginning of Year		238,144			179,178			191,355			213,251
Cash and Cash Equivalents - End of Period	$	172,645		$	207,443		$	219,271		$	131,323

Supplemental Cash Flow Information:
Cash paid for interest	$	13,795		$	14,688		$	13,314		$	14,021
Cash paid for taxes		14,472			29,724			6,654			21,852

For the Three and Six Month Periods Ended ~~May~~April 1, ~~2015~~2016 and ~~May 2, 2014~~March 27, 2015

The consolidated balance sheet as of ~~May~~April 1, ~~2015,~~2016, the consolidated statement of operations and comprehensive income (loss) for the three and six month periods ended ~~May~~April 1, ~~2015,~~2016, and ~~May 2, 2014,~~March 27, 2015, and the consolidated statement of cash flows for the six month periods ended ~~May~~April 1, ~~2015,~~2016, and ~~May 2, 2014,~~March 27, 2015, are unaudited but, in the opinion of management, all of the necessary adjustments, consisting of normal recurring accruals, have been made to present fairly the financial statements referred to above in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the above statements do not include all of the footnotes required for complete financial statements. The results of operations and cash flows for the interim periods presented are not necessarily indicative of results that can be expected for the full year.

The notes to the consolidated financial statements in the Company’s ~~Annual~~Transition Report on Form 10-K for the ~~fiscal year~~eleven months ended October ~~31, 2014,~~2, 2015, provide a summary of significant accounting policies and additional financial information that should be read in conjunction with this Form 10-Q.

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

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

The prior year Consolidated Statement of Operations and Comprehensive Income (Loss) for the three and six month period ended March 27, 2015, and the Consolidated Statement of Cash Flows for the six month period ended March 27, 2015, have been recast to align to the Company’s new quarter end.

In ~~April 2014,~~March 2016, the Financial Accounting Standards Board (FASB) issued new guidance simplifying certain aspects of accounting for share-based payments. The key provision of the new standard requires that ~~modifies~~excess tax benefits and shortfalls be recorded as income tax benefit or expense in the ~~criteria used to qualify divestitures for classification as discontinued operations~~income statement, rather than in equity. The Company is evaluating the effect the updated standard will have on the Company’s consolidated financial statements and ~~expands disclosure~~ related ~~to disposals of significant components.~~disclosures. The ~~amendment will become~~new guidance is effective for the Company in fiscal ~~2016,~~year 2018, with early adoption ~~permitted; however,~~permitted.

In February 2016, the FASB issued a new lease accounting standard, which provides revised guidance on accounting for lease arrangements by both lessors and lessees. The central requirement of the new standard is that lessees must recognize lease related assets and liabilities for all leases with a term longer than 12 months. The Company is evaluating the effect the standard will have on the Company’s consolidated financial statements and related disclosures. The new standard is effective for the Company ~~does not expect~~in fiscal year 2020, with early adoption permitted.

In November 2015, the FASB issued new guidance requiring all deferred tax assets and liabilities to ~~early adopt~~be classified as noncurrent on the ~~amended guidance.~~balance sheet instead of separating those balances into current and noncurrent amounts. The ~~amended~~new guidance is ~~expected~~effective for the Company in fiscal year 2018, with early adoption permitted. The Company adopted this guidance prospectively on April 1, 2016, and reclassified the current portion of net deferred tax assets and liabilities to decrease the likelihood that future disposals will qualify for discontinued operations treatment, meaning that the results of operation of some future disposals may be reported as continuing operations.net noncurrent deferred tax assets and liabilities. No prior periods were retrospectively adjusted.

In May 2014, the ~~Financial Accounting Standards Board (FASB)~~FASB amended requirements for an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective, and permits the use of either the retrospective or cumulative effect transition method. Early adoption is ~~not~~ permitted. The updated standard becomes effective for the Company in the first fiscal quarter of ~~2018.~~ 2019.

The Company has not yet selected a transition method, and is currently evaluating the effect that the updated standard will have on consolidated financial statements and related disclosures.

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

Basic earnings per share is computed on the basis of the weighted average number of shares outstanding during the year. Diluted earnings per share includes the dilutive effect of stock options and restricted stock units. Common shares issuable from stock options excluded from the calculation of diluted earnings per share because they were anti-dilutive were ~~243,450~~766,500 and ~~177,100~~688,600 in the ~~second fiscal quarter~~three and six month periods ending April 1, 2016, respectively. Common shares issuable from stock options excluded from the calculation of ~~2015~~diluted earnings per share because they were anti-dilutive were 257,650 and ~~2014,~~197,375 in the three and six month periods ending March 27, 2015, respectively. Shares used for calculating earnings per share are disclosed in the following ~~table.~~table:

In Thousands	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
									April 1,		March 27,		April 1,		March 27,
	May 1,		May 2,		May 1,		May 2,		2016		2015		2016		2015
	2015		2014		2015		2014				(Recast)				(Recast)

Shares used for basic earnings per share		31,005		31,867		31,306		31,733		29,588		31,162		29,585		31,401
Shares used for diluted earnings per share		31,525		32,475		31,839		32,348		29,825		31,687		29,882		31,937

The authorized capital stock of the Company consists of 25,000 shares of preferred stock ($100 par value), 475,000 shares of serial preferred stock ($1.00 par value), each issuable in series, and 60,000,000 shares of common stock ($.20 par value). As of ~~May~~April 1, ~~2015,~~2016, and October ~~31, 2014,~~2, 2015, there were no shares of preferred stock or serial preferred stock outstanding.

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

During the six months ended ~~May~~April 1, ~~2015,~~2016, the Company repurchased ~~1,162,436~~202,310 shares under this program at an average price paid per share of ~~$109.55,~~$59.69, for an aggregate purchase price of ~~$127.3~~$12.1 million. During the six months ended March 27, 2015, the Company repurchased 1,167,732 shares under this program at an average price paid per share of $109.12, for an aggregate purchase price of $127.4 million. Since the program began, the Company has repurchased 3,033,660 shares for an aggregate purchase price of $301.9 million, leaving $98.1 million for shares to be repurchased in the future.

	May 1,		October 31,		Six Months Ended			Year Ended
	2015		2014		April 1,			October 2,
					2016			2015
Shares Issued:
Balance, beginning of year		32,123,717		31,441,949		32,378,185			32,123,717
Shares issued under share-based compensation plans		178,406		681,768		103,629			254,468
Balance, end of current period		32,302,123		32,123,717		32,481,814			32,378,185

Treasury Stock:
Balance, beginning of year		269,228		-		(2,831,350	)		(269,228	)
Shares purchased		1,162,436		269,228		(202,310	)		(2,562,122	)
Balance, end of current period		1,431,664		269,228		(3,033,660	)		(2,831,350	)

Shares outstanding, end of period		30,870,459		31,854,489		29,448,154			29,546,835

In Thousands	May 1,			October 31,			April 1,			October 2,
	2015			2014			2016			2015

Unrealized loss on derivative contracts	$	(19,807	)	$	(14,179	)
Unrealized gain (loss) on derivative contracts							$	(6,840	)	$	(22,941	)
Tax effect		5,350			3,890			1,542			6,036
		(14,457	)		(10,289	)		(5,298	)		(16,905	)

Pension and post-retirement obligations		(80,438	)		(90,225	)		(97,535	)		(99,724	)
Tax effect		26,784			30,072			32,934			33,775
		(53,654	)		(60,153	)		(64,601	)		(65,949	)

Currency translation adjustment		(198,237	)		(61,135	)		(234,189	)		(225,974	)
Accumulated other comprehensive gain (loss)	$	(266,348	)	$	(131,577	)	$	(304,088	)	$	(308,828	)

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

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

In Thousands		Three Months Ended						Six Months Ended							Three Months Ended						Six Months Ended
															April 1,			March 27,			April 1,			March 27,
		May 1,			May 2,			May 1,			May 2,				2016			2015			2016			2015
		2015			2014			2015			2014							(Recast)						(Recast)
Components of Net Periodic Cost	Components of Net Periodic Cost													Components of Net Periodic Cost
Service cost		$	205		$	228		$	425		$	463			$	2,945		$	2,744		$	5,902		$	5,446
Interest cost			134			184			277			373				4,247			4,087			8,640			8,451
Expected return on plan assets																(5,993	)		(6,249	)		(11,904	)		(12,716	)
Settlement																-			-			-			2,991
Amortization of prior service cost			(17	)		(17	)		(34	)		(34	)			112			15			226			34
Amortization of actuarial (gain) loss			(23	)		(66	)		(49	)		(134	)			1,577			1,105			3,059			2,316
Net periodic cost (benefit)		$	299		$	329		$	619		$	668			$	2,888		$	1,702		$	5,923		$	6,522

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

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

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

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

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

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

The following table sets forth the Company’s financial assets and liabilities that were measured at fair value on a recurring basis by level within the fair value hierarchy at ~~May~~April 1, ~~2015,~~2016, and October ~~31, 2014.~~2, 2015.

In Thousands	Level 2				Level 2
	May 1,		October 31,		April 1,		October 2,
	2015		2014		2016		2015
Assets:
Derivative contracts designated as hedging instruments	$	1,912	$	24	$	5,328	$	1,386
Derivative contracts not designated as hedging instruments		1,006		1,081		560		189
Embedded derivatives		3,647		2,351		2,406		3,992

Liabilities:
Derivative contracts designated as hedging instruments	$	22,079	$	14,592	$	12,505	$	24,660
Derivative contracts not designated as hedging instruments		4,333		4,188		4,783		2,324
Embedded derivatives		1,128		15		1,537		380

In Thousands	Level 3				Level 3
	May 1,		October 31,		April 1,		October 2,
	2015		2014		2016		2015
Liabilities:
Contingent purchase obligation	$	5,000	$	5,000	$	-	$	3,750

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

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

The Company’s contingent purchase ~~obligations consist~~obligation consisted of additional contingent consideration in connection with the acquisition of Sunbank Family of Companies, LLC (Sunbank) of ~~$5.0~~$3.75 million as of ~~May 1, 2015. The contingent considerations will be payable to~~October 2, 2015, which was paid in the ~~sellers if certain performance objectives are met following the acquisition in accordance with the terms~~second fiscal quarter of 2016 upon achievement of the ~~purchase agreement.~~performance objectives. The ~~values~~value recorded on the balance sheet ~~were~~at October 2, 2015, was derived from the estimated probability that the performance objectives will be met. The contingent purchase obligation iswas categorized as Level 3 in the fair value hierarchy.

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

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

The fair value of derivative instruments ~~are~~is presented on a gross basis, as the Company does not have any derivative contracts which are subject to master netting arrangements. At ~~May~~April 1, ~~2015,~~2016, and October ~~31, 2014,~~2, 2015, the Company did not have any hedges with credit-risk-related contingent features or that required the posting of collateral. The cash flows from derivative contracts are recorded in operating activities in the Consolidated Statement of Cash Flows.

The Company transacts business in various foreign currencies, which subjects the Company’s cash flows and earnings to exposure related to changes in foreign currency exchange rates. These exposures arise primarily from purchases or sales of products and services from third parties. Foreign currency forward exchange contracts provide for the purchase or sale of foreign currencies at specified future dates at specified exchange rates, and are used to offset changes in the fair value of certain assets or liabilities or forecasted cash flows resulting from transactions denominated in foreign currencies. At ~~May~~April 1, ~~2015,~~2016, and October ~~31, 2014,~~2, 2015, the Company had outstanding foreign currency forward exchange contracts principally to sell U.S. dollars with notional amounts of ~~$374.2~~$400.1 million and ~~$396.2~~$402.9 million, respectively. These notional values consist primarily of contracts for the European euro, British pound sterling and Canadian dollar, and are stated in U.S. dollar equivalents at spot exchange rates at the respective dates.

The Company manages its exposure to interest rate risk by maintaining an appropriate mix of fixed and variable rate debt, which over time should moderate the costs of debt financing. When considered necessary, the Company may use financial instruments in the form of interest rate swaps to help meet this objective.

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

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

Fair value of derivative instruments in the Consolidated Balance Sheet at ~~May~~April 1, ~~2015,~~2016, and October ~~31, 2014,~~2, 2015, consisted of:

In Thousands		Fair Value					Fair Value
		May 1,		October 31,			April 1,		October 2,
	Classification	2015		2014		Classification	2016		2015
Foreign Currency Forward Exchange Contracts:
	Other current assets	$	2,267	$	1,052	Other current assets	$	3,353	$	1,527
	Other assets		651		53	Other assets		2,535		48
	Accrued liabilities		20,983		15,490	Accrued liabilities		14,181		20,688
	Other liabilities		5,429		3,290	Other liabilities		3,107		6,296

Embedded Derivative Instruments:
	Other current assets	$	541	$	296	Other current assets	$	2,030	$	2,913
	Other assets		3,106		2,055	Other assets		376		1,079
	Accrued liabilities		105		15	Accrued liabilities		1,282		351
	Other liabilities		1,023		-	Other liabilities		255		29

The effect of derivative instruments on the Consolidated Statement of Operations and Comprehensive Income (Loss) for the three and six month periods ended ~~May~~April 1, ~~2015,~~2016, and ~~May 2, 2014,~~March 27, 2015, consisted of:

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

In Thousands	Three Months Ended						Six Months Ended				Three Months Ended					Six Months Ended
Gain (Loss)	May 1,			May 2,			May 1,		May 2,		April 1,			March 27,		April 1,			March 27,
	2015			2014			2015		2014		2016			2015		2016			2015
														(Recast)					(Recast)
Embedded derivatives:
Recognized in sales	$	(5,230	)	$	(1,881	)	$	654	$	866	$	(4,708	)	$	4,033	$	(3,607	)	$	5,928

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

In Thousands	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
Gain (Loss)	May 1,			May 2,			May 1,			May 2,			April 1,			March 27,			April 1,			March 27,
	2015			2014			2015			2014			2016			2015			2016			2015
																(Recast)						(Recast)
Foreign currency forward exchange contracts:
Recognized in AOCI (effective portion)	$	24,588		$	9,034		$	7,780		$	(2,735	)	$	25,688		$	(5,851	)	$	28,574		$	(7,415	)
Reclassified from AOCI into sales		(8,627	)		(2,242	)		(13,408	)		(2,741	)		(5,414	)		(6,815	)		(12,473	)		(11,331	)

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

In Thousands	Three Months Ended						Six Months Ended						Three Months Ended					Six Months Ended
Gain (Loss)	May 1,			May 2,			May 1,			May 2,			April 1,			March 27,		April 1,			March 27,
	2015			2014			2015			2014			2016			2015		2016			2015
																(Recast)					(Recast)
Euro Term Loan:
2023 Notes and Accrued Interest:
Recognized in AOCI	$	-		$	(556	)	$	-		$	(28	)	$	(17,785	)	$	-	$	(6,252	)	$	-

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

During the first six months of fiscal ~~2015~~2016 and ~~2014,~~2015, the Company recorded ~~a loss~~losses of ~~$1.8~~$3.6 million and ~~a gain of $0.8~~$3.2 million, respectively, on foreign currency forward exchange contracts that have not been designated as accounting hedges. These foreign currency exchange ~~gains (losses)~~losses are included in selling, general and administrative expense.

There was no significant impact to the Company’s earnings related to the ineffective portion of any hedging instruments during the first six months of fiscal ~~2015~~2016 and ~~2014.~~2015. In addition, there was no significant impact to the Company’s earnings when a hedged firm commitment no longer qualified as a fair value hedge or when a hedged forecasted transaction no longer qualified as a cash flow hedge during the first six months of fiscal ~~2015~~2016 and ~~2014.~~2015.

Amounts included in AOCI are reclassified into earnings when the hedged transaction settles. The Company expects to reclassify approximately ~~$15.9~~$8.5 million of net loss into earnings over the next 12 months. ~~The $15.9 million loss will reduce the Company’s U.S.-dollar-denominated sales covered by qualified forward contracts to the forward rate when the Company entered into the forward contracts.~~ The maximum duration of the Company’s foreign currency cash flow hedge contracts at ~~May~~April 1, ~~2015,~~2016, is 24 months.

The income tax rate was ~~17.3%~~16.6% in the second fiscal quarter of ~~2015~~2016 compared with ~~20.3%~~18.6% in the prior-year period. In the second fiscal quarter of ~~2015 we~~2016, the Company recognized $0.3 million of discrete tax benefits due to income tax return to provision adjustments. In the second fiscal quarter of 2015, the Company recognized $0.5 million of discrete tax expense principally related to ~~reconciling~~ the ~~prior year’s~~following two items. The first item was a $2.0 million tax expense due to income tax return to ~~the income tax provision. In the~~provision adjustments. The second ~~fiscal quarter of 2014, we recognized $0.6~~ item was approximately $1.5��million of discrete tax benefits ~~principally related~~due to the ~~reduction of net deferred income tax liabilities as a result~~retroactive extension of the ~~enactment of tax laws reducing the U.K. statutory income tax rate.~~U.S. federal research and experimentation credits. The income tax rate differed from the statutory rate in the second fiscal quarter of ~~2015~~2016 and ~~2014,~~2015, as both years benefited from various tax credits and certain foreign interest expense deductions.

The income tax rates were ~~21.3%~~11.0% and ~~20.2%~~21.9% for the first six months of fiscal ~~2015~~2016 and ~~2014,~~2015, respectively. In the first six months of ~~fiscal 2015,~~2016, the Company recognized $0.8 million of discrete tax expense principally related to the following items. The first item was approximately $2.3 million of discrete tax expense principally related to reconciling the prior year’s income tax return to the income tax provision. The second item was approximately $1.5 million of tax benefits due to the retroactive extension of the U.S. federal research and experimentation credits. In the first six months of fiscal 2014, the Company recognized approximately $1.1$2.2 million of discrete tax benefits principally related to the following items. The first item was ~~approximately $0.6 million of tax benefits due to the release of reserves due to the expiration of~~ a ~~statute of limitations. The second item was a $0.5~~$1.3 million reduction of net deferred income tax liabilities as a result of the enactment of tax laws reducing the U.K. statutory income tax rate. The second item was approximately $1.3 million of discrete tax benefits due to the retroactive extension of the U.S. federal research and experimentation credits. The third item was a $0.4 million tax expense due to income tax return to provision adjustments. In the first six months of 2015, the Company recognized approximately $0.2 million of discrete tax benefits principally related to the following two items. The first item was approximately $1.5 million of discrete tax benefits due to the retroactive extension of the U.S. federal research and experimentation credits. The second item was a $1.3 million tax expense due to income tax return to provision adjustments. The income tax rate differed from the statutory rate in the first six months of fiscal ~~2015~~2016 and ~~2014,~~2015, as both years benefited from various tax credits and certain foreign interest expense deductions.

It is reasonably possible that within the next twelve months approximately ~~$2.5~~$1.1 million of tax benefits that are currently unrecognized could be recognized as a result of settlement of examinations and/or the expiration of applicable statutes of limitations.

In March 2011, the Company entered into a secured credit facility for $460 million made available through a group of banks. The credit facility is secured by substantially all of the Company’s assets and interest is based on standard inter-bank offering rates. U.S. Credit Facility

On April 9, 2015, the Company amended ~~the~~its secured credit facility to extend the ~~expiration~~maturity to April 9, 2020, increase the amount available for borrowing under the secured revolving credit facility to $500 million, and provide for a delayed-draw term loan facility of $250 ~~million. Borrowing under~~million (U.S. Term Loan, due 2020). The Company recorded $2.3 million in debt issuance costs. The credit facility is secured by substantially all the ~~delayed-draw term loan facility, if utilized, may be used only for working capital~~Company’s assets, and ~~repayment or refinancing of our existing indebtedness and to pay the fees and expenses in connection therewith.~~interest is based on standard inter-bank offering rates. The interest rate ~~on the credit facility~~ ranges from LIBOR plus 1.25% to LIBOR plus 2.00% ~~depending on the leverage ratios at the time the funds are drawn.~~. At ~~May~~April 1, ~~2015,~~2016, the Company had ~~$120.0~~$165.0 million outstanding under the secured credit facility at an interest rate of LIBOR plus ~~1.50%~~1.75%, which was ~~1.68% at May 1, 2015.~~2.20%.

In April 2013, the Company amended the secured credit facility to provide for a $175.0 million term loan (U.S. Term ~~Loan). The interest rate on the U.S. Term~~ Loan, ~~ranges from LIBOR plus 1.5% to LIBOR plus 2.25% depending on the leverage ratios at the time the funds are drawn.~~due 2016). On April 8, 2015, the Company paid off the ~~$175 million~~ U.S. Term ~~Loan.~~Loan, due 2016. In connection with the ~~redemption,~~repayment, the Company wrote off $0.3 million in unamortized debt issuance costs as a loss on extinguishment of debt in the ~~second~~third fiscal quarter of 2015.

On August 3, 2015, the Company borrowed $250 million under the U.S. Term Loan, due 2020, provided for under the amended secured credit facility. The interest rate on the U.S. Term Loan, due 2020, ranges from LIBOR plus 1.25% to LIBOR plus 2.00%. At April 1, 2016, the interest rate was LIBOR plus 1.75%, which equaled 2.19%. The loan amortizes at 1.25% of the original principal balance quarterly through March 2020, with the remaining balance due in April 2020.

In August 2010, the Company issued $250.0 million in 7% Senior Notes, due August 1, 2020 (2020 Notes), and ~~requiring~~which require semi-annual interest payments in March and September of each year until maturity. ~~The net~~

On August 4, 2015, the proceeds from the ~~sale~~U.S. Term Loan, due 2020, were used to redeem all of the ~~notes, after deducting $4.4~~7% 2020 Notes. As part of the redemption, the Company incurred an $8.75 million redemption premium and wrote off $2.4 million in unamortized debt issuance costs as a loss on extinguishment of debt ~~issuance cost, were $245.6 million. The 2020~~in the fourth fiscal quarter of 2015.

3.625% Senior Notes, are general unsecured senior obligations of the Company. The 2020 Notes are guaranteed, jointly and severally on a senior basis, by all the existing and future domestic subsidiaries of the Company unless designated as an “unrestricted subsidiary,” and those foreign subsidiaries that executed related subsidiary guarantees under the indenture covering the 2020 Notes. The 2020 Notes are subject to redemption at the option of the Company at any time prior to August 1, 2015, at a price equal to 100% of the principal amount, plus any accrued interest to the date of redemption and a make-whole provision. The 2020 Notes are also subject to redemption at the option of the Company, in whole or in part, on or after August 1, 2015, at redemption prices starting at 103.500% of the principal amount plus accrued interest during the period beginning August 1, 2015, and declining annually to 100% of principal and accrued interest on or after August 1, 2018.due April 2023

In April 2015, the Company issued €330.0 million in 3.625% Notes, due 2023 ~~Notes~~ requiring semi-annual interest payments in April and October of each year until maturity. The net proceeds from the sale of the notes, after deducting ~~$5.7~~$5.9 million of debt issuance ~~cost,~~costs, were $350.8 million. The 2023 Notes are general unsecured senior obligations of the Company. The 2023 Notes are unconditionally guaranteed on a senior basis by the Company and certain subsidiaries of the Company that are guarantors under the Company’s existing secured credit facility. The 2023 Notes are subject to redemption at the option of the Company at any time prior to April 15, 2018, at a price equal to 100% of the principal amount, plus any accrued interest to the date of redemption and a make-whole provision. The Company may also redeem up to 35% of the 2023 Notes before April 15, 2018, with the net cash proceeds from equity offerings. The 2023 Notes are also subject to redemption at the option of the Company, in whole or in part, on or after April 15, 2018, at redemption prices starting at 102.719% of the principal amount plus accrued interest during the period beginning April 15, 2018, and declining annually to 100% of principal and accrued interest on or after April 15, 2021.

Based on quoted market prices, the approximate fair value of the Company’s 2020 Notes was approximately $261.7 million and $266.9 million as of May 1, 2015, and October 31, 2014, respectively. Based on quoted market prices, the approximate fair value of the Company’s 2023 Notes was ~~approximately $371.0~~$329.7 million as of ~~May~~April 1, 2016, and $347.7 million as of October 2, 2015. The carrying amount of the secured credit facility ~~approximates~~and the U.S. Term Loan, due 2020, approximate fair value. ~~Estimates~~The estimate of fair value for the ~~2020 Notes and~~ 2023 Notes ~~are~~is based on ~~quoted market prices, and are considered~~ Level 2 inputs as defined in the fair value hierarchy ~~described in Note 5.~~described.

Government refundable advances consist of payments received from the Canadian government to assist in research and development related to commercial aviation. The ~~repayment of~~requirement to repay this advance is solely based on year-over-year commercial aviation revenue growth at CMC beginning in 2014. Imputed interest on the advance was ~~4.30%~~3.819% at ~~May~~April 1, ~~2015.~~2016. The debt recognized was ~~$46.0~~$44.6 million and ~~$51.9~~$43.3 million as of ~~May~~April 1, ~~2015,~~2016, and October ~~31, 2014,~~2, 2015, respectively.

In April 2015, FASB amended requirements related to the presentation of debt issuance costs. The updated standard requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. The recognition and measurement of debt issuance costs are not affected by this amendment. The Company adopted this updated standard during the first fiscal quarter of 2016. The Company reclassified $6.5 million of debt issuance costs from other non-current assets to a reduction of the Company’s current maturities of long-term debt of $0.2 million and a reduction of the Company’s long-term debt of $6.3 million as of October 2, 2015.

The Company is party to various lawsuits and claims, both as a plaintiff and defendant, and has contingent liabilities arising from the conduct of business, none of which, in the opinion of management, is expected to have a material effect on the Company’s financial

position or results of operations. The Company believes that it has made appropriate and adequate provisions for contingent liabilities.

As of ~~May~~April 1, ~~2015,~~2016, and October ~~31, 2014,~~2, 2015, the Company had a ~~$1.1~~liability of $0.8 million and ~~$1.5~~$1.6 million, ~~liability,~~ respectively, related to environmental remediation at a previously sold business for which the Company provided indemnification.

In the first fiscal quarter of 2015, the Company recognized a $15.7 million gain and a $2.4 million reduction in interest expense upon the lapse of a statutory period related to a liability for a non-income tax position of an acquired company.

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

The settlement amount in the Consent Agreement was consistent with the amount proposed by DTCC in August 2013, for which the Company estimated and recorded a $10 million charge in the third fiscal quarter ended July 26, 2013. The $10 million portion of the settlement that is not subject to suspension will be paid in installments, with $4 million paid in March 2014, $2 million paid in February 2015, $2 million paid in March 2016, and $2 million to be paid in ~~each of~~ March ~~2016 and~~ 2017. The Company expects that some part of recent investments made in its ITAR compliance program will be eligible for credit against the suspended portion of the settlement amount, which include: additional staffing, ongoing implementation of a new software system, employee training, and establishment of a regular compliance audit program and corrective action process. The Company expects recent and future investments in remedial compliance measures will be sufficient to cover the $10 million suspended payment. As of April 1, 2016, DTCC has accepted $5 million of the Company’s investment in remedial compliance measures. An additional amount of approximately $15 million in investment in remedial compliance measures will be submitted to the DTCC in fiscal 2016 to be applied against the suspended payment.

As of ~~May~~April 1, ~~2015,~~2016, the Company had three share-based compensation plans, which are described below. The compensation cost that has been charged against income for those plans was ~~$5.6~~$7.6 million and ~~$6.6~~$6.3 million for the first six months of fiscal ~~2015~~2016 and ~~2014,~~2015, respectively. During the first six months of fiscal ~~2015~~2016 and ~~2014,~~2015, the Company issued ~~178,406~~103,629 and ~~491,320~~231,000 shares, respectively, under its share-based compensation plans.

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

The Company offers shares under its employee sharesave scheme for U.K. employees. This plan allows participants the option to purchase shares at a 5% discount of the market price of the stock as of the beginning of the offering period. The term of these options is three years. The sharesave scheme is not a “safe-harbor” design, and therefore, compensation cost is recognized on this plan. Under the sharesave scheme, option exercise prices are equal to the fair market value of the Company’s common stock on the date of grant. ~~The Company granted 25,984 and 29,242~~No options ~~in the six month periods ended May 1, 2015, and May 2, 2014, respectively. The weighted-average grant date fair value of options~~were granted during the first six ~~month periods ended May 1, 2015, and May 2, 2014, was $24.31 and $27.03 per share, respectively.~~

Under the equity incentive plan, option exercise prices are equal to the fair market value of the Company’s common stock on the date of grant. The Company granted ~~188,500~~218,200 and ~~191,900~~187,500 options to purchase shares in the six month periods ended ~~May~~April 1, ~~2015,~~2016, and ~~May 2, 2014,~~March 27, 2015, respectively. The weighted-average grant date fair value of options granted during the six month periods ended ~~May~~April 1, 2016, and March 27, 2015, was $35.84 and ~~May 2, 2014, was $48.63 and $45.20~~$48.62 per share, respectively.

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

	Six Months Ended		Six Months Ended
	May 1,	May 2,	April 1,	March 27,
	2015	2014	2016	2015

Volatility	40.73 - 41.89%	41.87 - 43.17%	33.06 - 40.52%	40.73 - 41.89%
Risk-free interest rate	1.43 - 2.00%	1.73 - 2.99%	1.61 - 2.24%	1.43 - 2.00%
Expected life (years)	5 - 9	5 - 9	5 - 9	5 - 9
Dividends	0	0	0	0

The Company granted ~~20,300~~36,000 and ~~77,075~~20,300 restricted stock units in the six month periods ended ~~May~~April 1, ~~2015,~~2016, and ~~May 2, 2014,~~March 27, 2015, respectively. The weighted-average grant date fair value of restricted stock units granted during the six month periods ended ~~May~~April 1, 2016, and March 27, 2015, was $85.33 and ~~May 2, 2014, was~~ $113.98 ~~and $84.34~~ per share, respectively. The fair value of each restricted stock unit granted by the Company is equal to the fair market value of the Company’s common stock on the date of grant.

The Company granted 55,300 and 34,000 performance share plan shares in the six month periods ended April 1, 2016, and March 27, 2015, respectively. The total shares granted in each period equaled the number of shares participants would receive if the Company achieves target performance over the relevant period and is therefore at risk if the Company does not achieve the target level of the performance. The grant date fair value of performance share plan shares granted during the six month periods ended April 1, 2016, and March 27, 2015, was $79.31 and $117.53, respectively. The fair value of each performance share plan share granted by the Company is equal to the fair market value of the Company’s common stock on the date of grant.

On January 31, 2015, the Company acquired the defense, aerospace and training display (DAT) business of Belgium-based Barco N.V. (Barco) for €150 million, or approximately $171 million, in ~~cash.~~cash before a working capital adjustment of approximately $15 million. The Company incurred a $2.9 million foreign currency exchange loss in the funding of the acquisition in ~~the first~~ fiscal ~~quarter~~2015. Acquisition related costs of $3.4 million were recognized as selling, general and administrative expense in fiscal 2015. The Company financed the acquisition primarily using international cash reserves, with the balance funded by borrowings under its existing credit facility. The ~~display~~DAT business develops and manufactures visualization solutions for a variety of demanding defense and commercial aerospace ~~applications. The display business~~applications and is included in our Avionics & Controls segment.

The following summarizes the allocation of the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The fair value adjustment for inventory was ~~$7.1~~$7.0 million, which ~~will be~~was recognized as cost of goods sold over 13eight months, the estimated inventory turnover. ~~Acquisition related costs~~The fair value of ~~$3.3 million have been recognized as selling, general~~acquired programs represented the value of visualization solutions sold under long-term supply agreements with aerospace companies, military contractors, and ~~administrative expense.~~OEM manufacturers using similar technology. The valuation of the program included the values of program-specific technology, the backlog of contracts, and the relationship with customers which lead to potential future contracts. The valuation of the programs was based upon the discounted cash flow at a market-based discount rate. The purchase price includes the value of existing technologies, the introduction of new technologies, and the addition of new customers. These factors resulted in recording goodwill of ~~$63.5~~$48.5 million. ~~The~~A substantial portion of the amount allocated to goodwill is not deductible for income tax purposes.

In Thousands
As of January 31, 2015

Current assets	$	80,400	$	80,400
Property, plant and equipment		4,188		6,206
Intangible assets subject to amortization
Programs (15 year average useful life)		53,013		56,455
Trade name (10 year average useful life)		452
Contracts (3 year average useful life)		3,161
Programs (3 year average useful life)				677
Trade name (3 year average useful life)				226
Goodwill		63,508		48,537
Other assets		3,401		3,401
Total assets acquired		208,123		195,902

Current liabilities assumed		33,368		34,006
Long-term liabilities assumed		3,685		5,921
Net assets acquired	$	171,070	$	155,975

~~On December 20, 2013,~~To take advantage of synergies across the Company, ~~acquired Sunbank for $51.7 million. The purchase price included $5~~DAT will be further integrated with existing businesses. As a result of these integration activities, the Company incurred $3.6 million ~~in additional contingent consideration based upon achievement~~and $7.7 million of ~~certain sales levels over a two-year period. Sunbank is a manufacturer of electrical cable accessories, connectors and flexible conduit systems. Sunbank is included~~integration expenses in the ~~Sensors & Systems segment.~~first three and six months of fiscal 2016, respectively.

On December 5, 2013, the Company announced the acceleration of its plans to consolidate certain facilities and create cost efficiencies through shared services in sales, general and administrative and support functions. These integration activities are expected to result in charges and expenses for a total of $35 million in fiscal 2014 and fiscal 2015. Total restructuring expenses were $20.4 million in fiscal 2014. The costs are for exit and relocation of facilities, losses on the write off of certain property, plant and equipment, and severance.

In the second fiscal quarter of 2016, restructuring expense totaled $1.9 million. In the first six months of fiscal ~~2015,~~2016, restructuring expense totaled ~~$7.3~~$3.3 million, as more fully described in the following table:

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

Cost of sales	$	2,414	$	560	$	402	$	3,376	$	1,249	$	18	$	180	$	1,447
Restructuring charges		2,901		-		1,071		3,972		1,451		-		420		1,871
Total	$	5,315	$	560	$	1,473	$	7,348	$	2,700	$	18	$	600	$	3,318

In the recast second fiscal quarter of 2015, restructuring expense totaled $3.8 million. In the recast first six months of fiscal ~~2014,~~2015, restructuring expense totaled ~~$8.9~~$9.3 million, as more fully described in the following table:

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

Cost of sales	$	2,051	$	-	$	-	$	2,051	$	3,014	$	633	$	714	$	4,361
Restructuring charges		822		2,470		3,582		6,874		3,762		48		1,117		4,927
Total	$	2,873	$	2,470	$	3,582	$	8,925	$	6,776	$	681	$	1,831	$	9,288

The Company has recorded an accrued liability of ~~$2.7~~$5.7 million and ~~$5.9~~$5.2 million for these activities as of ~~May~~April 1, ~~2015,~~2016, and October ~~31, 2014,~~2, 2015, respectively.

~~On September 3, 2014,~~The Company’s board of directors previously approved the ~~Company approved a~~ plan to sell certain non-core business units including Eclipse Electronic Systems, Inc. (Eclipse), a manufacturer of embedded communication intercept receivers for signal intelligence applications; Wallop Defence Systems, Ltd. (Wallop), a manufacturer of flare countermeasure devices; Pacific Aerospace and Electronics Inc. (PA&E), a manufacturer of hermetically sealed electrical connectors; a small distribution business and a small ~~distribution~~manufacturing business. ~~These businesses were not separate reporting units as defined under U.S. GAAP~~

On June 5, 2015, the Company sold Eclipse for $7.9 million and ~~no indicator~~retained ownership of ~~impairment existed~~the land, building and building improvements, which are held for sale. In addition, on July 20, 2015, the Company sold PA&E for $23.4 million. Under the terms of the stock purchase agreements for the sale of Eclipse and PA&E, the Company agreed to indemnify the buyer for certain breaches of the Company’s representations and warranties and certain other items for up to $2.8 million and $3.9 million, respectively. An escrow account in the amount of $1.1 million was established at ~~August 1, 2014, requiring an impairment test~~closing of ~~their~~the sale of PA&E to partially cover the Company’s indemnification obligations. A claim against the escrow amount, if paid, would result in a corresponding ~~reporting units’ goodwill or these businesses’ long-lived assets. Based upon~~decrease in the ~~estimated fair values,~~purchase price for the sale of PA&E.

During the second fiscal quarter of 2016 and 2015, the Company incurred ~~an estimated after-tax~~a loss of ~~$49.5~~$2.0 million inand $14.6 million, respectively, on discontinued operations. During the ~~fourth~~first six months of fiscal ~~quarter~~2016 and 2015, the Company incurred a loss of ~~2014~~$6.8 million and $20.5 million, respectively. For the first and second fiscal quarters of fiscal 2016, the Company incurred a loss on assets held for sale at Advanced Materials of $2.2 million and $1.4 million, respectively. The loss on assets held for sale in ~~discontinued operations.~~both quarters was principally due to the effect of changes in foreign currency exchange rates on the estimated sale price and Wallop’s assets held for sale. Principal assumptions used in measuring the estimated ~~after-tax~~ loss on assets held for sale included estimated selling price of the discontinued business, discount rates, industry growth

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

~~During the second fiscal quarter of 2015, the Company incurred a loss of $1.8 million on discontinued operations.~~ During the first six months of fiscal 2015, the Company incurred a loss on discontinued operations of $18.6 million, including a $15.8 million loss on assets held for sale. For the first six months of fiscal 2015, a $10.2 million loss on assets held for sale at Avionics & Controls was principally due the reduction of Eclipse’s estimated selling price based upon lower expectations of earnings for the business and continuing negotiations with the buyer. The $5.1 million write-off in Advanced Materials was due to the effects of valuing Wallop’s balance sheet at the current exchange rate incurred in the first six months of fiscal 2015.

~~In the first fiscal quarter of 2015, the Company~~ recorded a ~~$1.2~~$1.7 million increase in a liability related to environmental remediation at a previously sold business for which the Company provided indemnification. A loss of ~~$0.8~~$1.1 million, net of tax, is reflected in discontinued operations.

The operating results of the discontinued operations for the three month period ended ~~May~~April 1, ~~2015,~~2016, consisted of the following:

In Thousands																Avionics &		Sensors &			Advanced
	Avionics &			Sensors &			Advanced									Controls		Systems			Materials			Other			Total
In Thousands	Controls			Systems			Materials			Other		Total

Net Sales	$	7,111		$	6,632		$	3,304		$	-	$	17,047			$	4,479	$	-		$	2,289		$	-		$	6,768

Operating earnings (loss)		(735	)		1,187			(1,010	)		-		(558	)			1,072		(151	)		(2,874	)		(7	)		(1,960	)
Gain (loss) on net assets held for sale		1,361			(622	)		(2,508	)		-		(1,769	)
Tax expense (benefit)		(301	)		3			(207	)		-		(505	)			273		-			(210	)		-			63
Income (loss) from discontinued operations	$	927		$	562		$	(3,311	)	$	-	$	(1,822	)		$	799	$	(151	)	$	(2,664	)	$	(7	)	$	(2,023	)

Included in Operating Earnings (Loss):															Included in Operating Earnings (Loss):
Gain (loss) on net assets held for sale																	326		-			(1,381	)		-			(1,055	)

The operating results of the discontinued operations for the six month period ended ~~May~~April 1, ~~2015,~~2016, consisted of the following:

In Thousands																	Avionics &		Sensors &			Advanced
	Avionics &			Sensors &			Advanced										Controls		Systems			Materials			Other			Total
In Thousands	Controls			Systems			Materials			Other			Total

Net Sales	$	13,913		$	12,265		$	6,105		$	-		$	32,283			$	10,061	$	-		$	4,773		$	-		$	14,834

Operating earnings (loss)		(1,517	)		1,737			(3,079	)		(1,185	)		(4,044	)			1,969		(307	)		(8,867	)		(11	)		(7,216	)
Gain (loss) on net assets held for sale		(10,153	)		(622	)		(5,071	)		-			(15,846	)
Tax expense (benefit)		(557	)		198			(559	)		(411	)		(1,329	)			686		-			(1,099	)		-			(413	)
Income (loss) from discontinued operations	$	(11,113	)	$	917		$	(7,591	)	$	(774	)	$	(18,561	)		$	1,283	$	(307	)	$	(7,768	)	$	(11	)	$	(6,803	)

Included in Operating Earnings (Loss):																Included in Operating Earnings (Loss):
Gain (loss) on net assets held for sale																		56		-			(3,628	)		-			(3,572	)

The operating results of the discontinued operations for the recast three month period ended March 27, 2015, consisted of the following:

The operating results of the discontinued operations for the ~~three~~recast six month period ended ~~May 2, 2014,~~March 27, 2015, consisted of the following:

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

In Thousands																	Avionics &			Sensors &		Advanced
	Avionics &			Sensors &			Advanced										Controls			Systems		Materials			Other			Total
In Thousands	Controls			Systems			Materials			Other			Total

Net Sales	$	17,534		$	10,938		$	9,281		$	-		$	37,753			$	27,591		$	12,257	$	6,150		$	-		$	45,998

Operating earnings (loss)		(4,719	)		(419	)		(4,824	)		(343	)		(10,305	)			(11,395	)		1,749		(11,221	)		(1,692	)		(22,559	)
Gain (loss) on net assets held for sale		-			-			-			-			-
Tax expense (benefit)		(1,616	)		(134	)		(999	)		-			(2,749	)			(89	)		672		(2,076	)		(590	)		(2,083	)
Income (loss) from discontinued operations	$	(3,103	)	$	(285	)	$	(3,825	)	$	(343	)	$	(7,556	)		$	(11,306	)	$	1,077	$	(9,145	)	$	(1,102	)	$	(20,476	)

Included in Operating Earnings (Loss):																Included in Operating Earnings (Loss):
Loss on net assets held for sale																		(11,439	)		-		(3,008	)		-			(14,447	)

Assets and Liabilities Held for Sale within the Consolidated Balance Sheet at ~~May~~April 1, ~~2015,~~2016, are comprised of the following:

In Thousands											Avionics &			Sensors &		Advanced
		Avionics &		Sensors &		Advanced					Controls			Systems		Materials		Total
In Thousands		Controls		Systems		Materials		Total

Accounts receivable, net		$	3,352	$	3,678	$	3,266	$	10,296		$	4,341		$	-	$	221	$	4,562
Inventories			12,924		9,141		5,733		27,798			11,954			-		2,380		14,334
Prepaid expenses			295		237		401		933			82			-		239		321
Deferred income tax benefits			697		675		-		1,372
Income tax refundable			-		-		-		-
Current Assets of Businesses Held for Sale	Current Assets of Businesses Held for Sale	$	17,268	$	13,731	$	9,400	$	40,399	Current Assets of Businesses Held for Sale		16,377			-		2,840		19,217

Net property, plant and equipment		$	1,777	$	3,990	$	16,867	$	22,634			5,417			-		9,463		14,880
Intangibles, net			15,642		10,205		6,957		32,804			-			-		3,779		3,779
Deferred income tax benefits			-		-		-		-			(147	)		-		1,370		1,223
Other assets			-		-		1,514		1,514			-			-		1,423		1,423
Non-Current Assets of Businesses Held for Sale	Non-Current Assets of Businesses Held for Sale	$	17,419	$	14,195	$	25,338	$	56,952	Non-Current Assets of Businesses Held for Sale		5,270			-		16,035		21,305

Accounts payable		$	3,314	$	1,107	$	5,536	$	9,957			765			-		1,837		2,602
Accrued liabilities			1,738		1,018		1,468		4,224			8,006			-		3,572		11,578
Current Liabilities of Businesses Held for Sale	Current Liabilities of Businesses Held for Sale	$	5,052	$	2,125	$	7,004	$	14,181	Current Liabilities of Businesses Held for Sale		8,771			-		5,409		14,180

Deferred income tax liabilities		$	11,148	$	6,310	$	1,641	$	19,099			-			-		319		319
Other liabilities			307		21		-		328			503			-		-		503
Non-Current Liabilities of Businesses Held for Sale	Non-Current Liabilities of Businesses Held for Sale	$	11,455	$	6,331	$	1,641	$	19,427	Non-Current Liabilities of Businesses Held for Sale		503			-		319		822

Net Assets of Businesses Held for Sale	Net Assets of Businesses Held for Sale	$	18,180	$	19,470	$	26,093	$	63,743	Net Assets of Businesses Held for Sale	$	12,373		$	-	$	13,147	$	25,520

Assets and Liabilities Held for Sale within the Consolidated Balance Sheet at October ~~31, 2014,~~2, 2015, were comprised of the following:

In Thousands													Avionics &			Sensors &		Advanced
		Avionics &		Sensors &			Advanced						Controls			Systems		Materials		Total
In Thousands		Controls		Systems			Materials		Total

Accounts receivable, net		$	5,154	$	3,752		$	2,106	$	11,012			$	5,360		$	-	$	1,546	$	6,906
Inventories			12,646		7,972			5,258		25,876				14,763			-		5,841		20,604
Prepaid expenses			408		86			335		829				156			-		185		341
Deferred income tax benefits			671		680			-		1,351
Income tax refundable			-		-			2,378		2,378
Current Assets of Businesses Held for Sale	Current Assets of Businesses Held for Sale	$	18,879	$	12,490		$	10,077	$	41,446		Current Assets of Businesses Held for Sale		20,279			-		7,572		27,851

Net property, plant and equipment		$	4,949	$	4,105		$	19,839	$	28,893				5,474			-		12,199		17,673
Intangibles, net			22,228		10,659			8,327		41,214				945			-		4,928		5,873
Deferred income tax benefits			-		(30	)		-		(30	)			(147	)		-		-		(147	)
Other assets			-		-			1,600		1,600				-			-		1,518		1,518
Non-Current Assets of Businesses Held for Sale	Non-Current Assets of Businesses Held for Sale	$	27,177	$	14,734		$	29,766	$	71,677		Non-Current Assets of Businesses Held for Sale		6,272			-		18,645		24,917

Accounts payable		$	2,194	$	873		$	6,326	$	9,393				1,878			-		4,837		6,715
Accrued liabilities			1,765		1,008			2,025		4,798				8,340			-		2,051		10,391
Current Liabilities of Businesses Held for Sale	Current Liabilities of Businesses Held for Sale	$	3,959	$	1,881		$	8,351	$	14,191		Current Liabilities of Businesses Held for Sale		10,218			-		6,888		17,106

Deferred income tax liabilities		$	11,084	$	6,243		$	1,537	$	18,864				-			-		194		194
Other liabilities			-		-			12		12				2,215			-		-		2,215
Non-Current Liabilities of Businesses Held for Sale	Non-Current Liabilities of Businesses Held for Sale	$	11,084	$	6,243		$	1,549	$	18,876		Non-Current Liabilities of Businesses Held for Sale		2,215			-		194		2,409

Net Assets of Businesses Held for Sale	Net Assets of Businesses Held for Sale	$	31,013	$	19,100		$	29,943	$	80,056		Net Assets of Businesses Held for Sale	$	14,118		$	-	$	19,135	$	33,253

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

In Thousands		Three Months Ended						Six Months Ended							Three Months Ended						Six Months Ended
															April 1,			March 27,			April 1,			March 27,
		May 1,			May 2,			May 1,			May 2,				2016			2015			2016			2015
		2015			2014			2015			2014							(Recast)						(Recast)
Sales
Avionics & Controls		$	210,589		$	184,616		$	387,067		$	378,506			$	198,665		$	187,330		$	384,910		$	393,947
Sensors & Systems			176,425			205,111			340,081			386,885				176,069			171,538			328,499			354,432
Advanced Materials			113,066			121,134			219,276			231,410				115,576			109,342			218,378			224,442
		$	500,080		$	510,861		$	946,424		$	996,801			$	490,310		$	468,210		$	931,787		$	972,821

Earnings from Continuing Operations Before Income Taxes	Earnings from Continuing Operations Before Income Taxes													Earnings from Continuing Operations Before Income Taxes
Avionics & Controls		$	9,449		$	23,310		$	28,551		$	51,050			$	2,649		$	7,934		$	12,062		$	45,260
Sensors & Systems			22,564			23,124			32,135			43,756				20,944			16,256			33,728			33,714
Advanced Materials			24,981			30,179			41,512			48,187				23,208			19,469			36,198			41,024
Segment Earnings			56,994			76,613			102,198			142,993				46,801			43,659			81,988			119,998

Corporate expense			(22,007	)		(17,037	)		(41,022	)		(32,256	)			(18,965	)		(19,851	)		(37,030	)		(42,862	)
Other income			-			-			12,744			-				-			12,744			-			12,744
Interest income			124			136			303			255				94			135			181			319
Interest expense			(8,564	)		(8,434	)		(14,405	)		(17,059	)			(7,294	)		(5,934	)		(14,510	)		(14,016	)
Loss on extinguishment of debt			(329	)		-			(329	)		-
		$	26,218		$	51,278		$	59,489		$	93,933			$	20,636		$	30,753		$	30,629		$	76,183

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

In Thousands

Non-

TA Mfg.

Guarantor

Guarantor

Parent

Ltd.

Subsidiaries

Subsidiaries

Eliminations

Total

ASSETS

Current Assets

Cash and cash equivalents
$
23,591

$
1,985

$
2,883

$
144,186

$
-

$
172,645

Accounts receivable, net

69

-

142,018

242,575

-

384,662

Inventories

-

-

193,498

286,090

-

479,588

Income tax refundable

-

-

-

9,394

-

9,394

Deferred income tax benefits

31,918

-

(1,220
)

21,826

-

52,524

Prepaid expenses

185

-

8,302

15,405

-

23,892

Other current assets

74

-

111

3,415

-

3,600

Current assets of businesses held
   for sale

-

-

25,400

14,999

-

40,399

Total Current Assets

55,837

1,985

370,992

737,890

-

1,166,704

Property, Plant & Equipment, Net

1,397

-

160,832

144,369

-

306,598

Goodwill

-

-

372,021

702,416

-

1,074,437

Intangibles, net

-

-

101,998

373,933

-

475,931

Debt issuance costs, net

5,447

5,715

-

-

-

11,162

Deferred income tax benefits

18,169

-

-

44,590

-

62,759

Other assets

276

-

41,394

(19,845
)

-

21,825

Non-current assets of businesses held
   for sale

-

-

-

56,952

-

56,952

Amounts Due From (To) Subsidiaries

-

349,959

794,188

-

(1,144,147
)

-

Investment in Subsidiaries

3,162,577

642,929

1,009,042

14,644

(4,829,192
)

-

Total Assets
$
3,243,703

$
1,000,588

$
2,850,467

$
2,054,949

$
(5,973,339
)

$
3,176,368

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

Accounts payable
$
3,536

$
-

$
36,820

$
83,092

$
-

$
123,448

Accrued liabilities

16,247

1,189

87,274

159,783

-

264,493

Current maturities of long-term
   debt

-

-

862

140

-

1,002

Deferred income tax liabilities

558

-

1

2,292

-

2,851

Federal and foreign income taxes

(1,946
)

(2,621
)

(3,898
)

10,082

-

1,617

Current liabilities of businesses
   held for sale

-

-

3,902

10,279

-

14,181

Total Current Liabilities

18,395

(1,432
)

124,961

265,668

-

407,592

Credit Facilities

90,000

-

-

30,000

-

120,000

Long-Term Debt, Net

250,000

369,567

57,184

46,203

-

722,954

Deferred Income Tax Liabilities

57,654

-

(17,465
)

97,794

-

137,983

Pension and Post-Retirement Obligations

18,904

-

862

38,202

-

57,968

Other Liabilities

14,680

-

194

15,084

-

29,958

Non-current liabilities of businesses
   held for sale

-

-

17,740

1,687

-

19,427

Amounts Due To (From) Subsidiaries

1,102,689

-

-

400,768

(1,503,457
)

-

Shareholders' Equity

1,691,381

632,453

2,666,991

1,159,543

(4,469,882
)

1,680,486

Total Liabilities and Shareholders'
   Equity
$
3,243,703

$
1,000,588

$
2,850,467

$
2,054,949

$
(5,973,339
)

$
3,176,368

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

In Thousands

Non-

TA Mfg.

Guarantor

Guarantor

Parent

Ltd.

Subsidiaries

Subsidiaries

Eliminations

Total

Net sales
$
-

$
-

$
234,864

$
266,456

$
(1,240
)

$
500,080

Cost of sales

-

-

153,567

184,102

(1,240
)

336,429

-

-

81,297

82,354

-

163,651

Expenses

Selling, general and administrative

-

16

35,634

65,092

-

100,742

Research, development & engineering

-

-

12,520

14,480

-

27,000

Restructuring charges

-

-

922

-

-

922

Other (income) expense

-

-

(409
)

409

-

-

Total Expenses

-

16

48,667

79,981

-

128,664

Operating Earnings from Continuing
   Operations

-

(16
)

32,630

2,373

-

34,987

Interest Income

(4,029
)

(860
)

(7,268
)

(7,490
)

19,523

(124
)
Interest Expense

6,857

889

12,467

7,874

(19,523
)

8,564

Loss on Extinguishment of Debt

329

-

-

-

329

Earnings (Loss) from Continuing
   Operations Before Income Taxes

(3,157
)

(45
)

27,431

1,989

-

26,218

Income Tax Expense (Benefit)

(560
)

(9
)

5,333

(222
)

-

4,542

Earnings (Loss) from Continuing
   Operations Including
   Noncontrolling Interests

(2,597
)

(36
)

22,098

2,211

-

21,676

Earnings Attributable to
   Noncontrolling Interests

-

-

-

(44
)

-

(44
)
Earnings (Loss) from Continuing
   Operations Attributable to
   Esterline, Net of Tax

(2,597
)

(36
)

22,098

2,167

-

21,632

Loss from Discontinued Operations
   Attributable to Esterline,
   Net of Tax

-

-

921

(2,743
)

-

(1,822
)
Equity in Net Earnings of
   Consolidated Subsidiaries

22,407

21,534

51

(43,992
)

-

Net Earnings (Loss) Attributable to
   Esterline
$
19,810

$
21,498

$
23,070

$
(576
)

$
(43,992
)

$
19,810

Comprehensive Income (Loss)
$
33,393

$
10,537

$
23,443

$
11,737

$
(45,566
)

$
33,544

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

In Thousands

Non-

TA Mfg.

Guarantor

Guarantor

Parent

Ltd.

Subsidiaries

Subsidiaries

Eliminations

Total

Net sales
$
-

$
-

$
443,865

$
504,659

$
(2,100
)

$
946,424

Cost of sales

-

-

293,377

346,146

(2,100
)

637,423

-

-

150,488

158,513

-

309,001

Expenses

Selling, general and administrative

-

16

74,293

120,089

-

194,398

Research, development & engineering

-

-

22,297

27,158

-

49,455

Restructuring charges

-

-

3,360

612

-

3,972

Other (income) expense

-

-

-

(12,744
)

-

(12,744
)
Total Expenses

-

16

99,950

135,115

-

235,081

Operating Earnings from Continuing
   Operations

-

(16
)

50,538

23,398

-

73,920

Interest Income

(7,994
)

(860
)

(14,466
)

(15,888
)

38,905

(303
)
Interest Expense

13,201

889

24,795

14,425

(38,905
)

14,405

Loss on Extinguishment of Debt

329

-

-

-

-

329

Earnings (Loss) from Continuing
   Operations Before Income Taxes

(5,536
)

(45
)

40,209

24,861

-

59,489

Income Tax Expense (Benefit)

(1,109
)

(9
)

6,947

6,863

-

12,692

Earnings (Loss) from Continuing
   Operations Including
   Noncontrolling Interests

(4,427
)

(36
)

33,262

17,998

-

46,797

Earnings Attributable to
   Noncontrolling Interests

-

-

-

(107
)

-

(107
)
Earnings (Loss) from Continuing
   Operations Attributable to
   Esterline, Net of Tax

(4,427
)

(36
)

33,262

17,891

-

46,690

Loss from Discontinued Operations
   Attributable to Esterline,
   Net of Tax

(774
)

-

(9,655
)

(8,132
)

-

(18,561
)
Equity in Net Earnings of
   Consolidated Subsidiaries

33,330

21,534

113

-

(54,977
)

-

Net Earnings (Loss) Attributable to
   Esterline
$
28,129

$
21,498

$
23,720

$
9,759

$
(54,977
)

$
28,129

Comprehensive Income (Loss)
$
(93,457
)

$
10,537

$
23,995

$
(104,298
)

$
56,581

$
(106,642
)

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

In Thousands

Non-

TA Mfg.

Guarantor

Guarantor

Parent

Ltd.

Subsidiaries

Subsidiaries

Eliminations

Total

Cash Flows Provided (Used) by Operating Activities

Net earnings (loss) including
   noncontrolling interests
$
28,236

$
21,498

$
23,720

$
9,759

$
(54,977
)

$
28,236

Depreciation & amortization

-

-

16,611

33,242

-

49,853

Deferred income taxes

(1,337
)

-

21

(6,156
)

-

(7,472
)
Share-based compensation

-

1

2,336

3,215

-

5,552

Gain on release of non-income
   tax liability

-

-

-

(15,656
)

-

(15,656
)
Loss on assets held for sale

-

-

10,295

5,551

-

15,846

Working capital changes, net of
   effect of acquisitions:

Accounts receivable

541

-

3,608

8,034

-

12,183

Inventories

-

-

(5,499
)

(18,781
)

-

(24,280
)
Prepaid expenses

(38
)

-

(1,663
)

(3,507
)

-

(5,208
)
Other current assets

6

-

(18
)

(315
)

-

(327
)
Accounts payable

1,785

-

(3,949
)

(756
)

-

(2,920
)
Accrued liabilities

(5,657
)

1,177

(5,888
)

(72
)

-

(10,440
)
Federal and foreign income taxes

336

(14
)

(1,059
)

793

-

56

Other liabilities

139

-

(82
)

2,240

-

2,297

Other, net

(9,711
)

(642,884
)

(33,274
)

693,827

-

7,958

14,300

(620,222
)

5,159

711,418

(54,977
)

55,678

Cash Flows Provided (Used) by Investing Activities

Purchases of capital assets

(137
)

-

(8,558
)

(14,740
)

-

(23,435
)
Acquisition of businesses, net of
   cash acquired

-

-

-

(171,070
)

-

(171,070
)

(137
)

-

(8,558
)

(185,810
)

-

(194,505
)

In Thousands

Non-

TA Mfg.

Guarantor

Guarantor

Parent

Ltd.

Subsidiaries

Subsidiaries

Eliminations

Total

Cash Flows Provided (Used) by Financing Activities

Proceeds provided by stock issuance
   under employee stock plans

9,335

-

-

-

-

9,335

Excess tax benefits from stock
   option exercises

1,744

-

-

-

-

1,744

Shares repurchased

(127,342
)

-

-

-

-

(127,342
)
Repayment of long-term credit
   facilities

(190,000
)

-

-

-

-

(190,000
)
Repayment of long-term debt

(161,875
)

-

2,476

(8,079
)

-

(167,478
)
Proceeds from issuance of long-term
   credit facilities

180,000

-

-

30,000

-

210,000

Proceeds from issuance of
   long-term debt

-

356,532

-

-

-

356,532

Proceeds from government
   assistance

-

-

-

3,142

-

3,142

Dividends paid to noncontrolling
   interests

-

-

-

-

-

-

Debt and other issuance costs

(2,130
)

(5,760
)

-

-

-

(7,890
)
Net change in intercompany
   financing

284,630

271,953

481

(612,041
)

54,977

-

(5,638
)

622,725

2,957

(586,978
)

54,977

88,043

Effect of Foreign Exchange Rates on
   Cash and Cash Equivalents

432

(518
)

(129
)

(14,500
)

-

(14,715
)

Net Increase (Decrease) in Cash and
   Cash Equivalents

8,957

1,985

(571
)

(75,870
)

-

(65,499
)
Cash and Cash Equivalents -
   Beginning of Year

14,634

-

3,454

220,056

-

238,144

Cash and Cash Equivalents -
   End of Period
$
23,591

$
1,985

$
2,883

$
144,186

$
-

$
172,645

In Thousands

Non-

TA Mfg.

Guarantor

Guarantor

Parent

Ltd.

Subsidiaries

Subsidiaries

Eliminations

Total

ASSETS

Current Assets

Cash and cash equivalents
$
14,634

$
-

$
3,454

$
220,056

$
-

$
238,144

Accounts receivable, net

610

-

143,158

236,121

-

379,889

Inventories

-

-

188,982

244,613

-

433,595

Income tax refundable

-

-

-

5,266

-

5,266

Deferred income tax benefits

31,486

-

(1,191
)

18,384

-

48,679

Prepaid expenses

147

-

6,703

13,486

-

20,336

Other current assets

80

-

114

1,955

-

2,149

Current assets of businesses held
   for sale

-

-

26,800

14,646

-

41,446

Total Current Assets

46,957

-

368,020

754,527

-

1,169,504

Property, Plant & Equipment, Net

1,489

-

158,089

159,764

-

319,342

Goodwill

-

-

347,700

724,086

-

1,071,786

Intangibles, net

-

-

106,164

365,213

-

471,377

Debt issuance costs, net

4,134

-

-

161

-

4,295

Deferred income tax benefits

20,455

-

30

50,822

-

71,307

Other assets

130

-

7,502

6,547

-

14,179

Non-current assets of businesses held
   for sale

-

-

40,737

30,940

-

71,677

Amounts Due From (To) Subsidiaries

-

-

797,342

-

(797,342
)

-

Investment in Subsidiaries

3,307,454

-

1,127,237

20,768

(4,455,459
)

-

Total Assets
$
3,380,619

$
-

$
2,952,821

$
2,112,828

$
(5,252,801
)

$
3,193,467

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

Accounts payable
$
1,751

$
-

$
36,905

$
76,628

$
-

$
115,284

Accrued liabilities

20,178

-

93,168

149,190

-

262,536

Current maturities of long-term debt

8,750

-

349

3,675

-

12,774

Deferred income tax liabilities

76

-

8

1,689

-

1,773

Federal and foreign income taxes

(2,282
)

-

(2,643
)

6,496

-

1,571

Current liabilities of businesses
   held for sale

-

-

4,010

10,181

-

14,191

Total Current Liabilities

28,473

-

131,797

247,859

-

408,129

Credit Facilities

100,000

-

-

-

-

100,000

Long-Term Debt, Net

403,125

-

55,176

51,419

-

509,720

Deferred Income Tax Liabilities

58,615

-

(17,333
)

107,883

-

149,165

Pension and Post-Retirement Obligations

18,683

-

1,226

42,784

-

62,693

Other Liabilities

16,762

-

3,944

26,178

-

46,884

Non-current liabilities of businesses
   held for sale

-

-

17,327

1,549

-

18,876

Amounts Due To (From) Subsidiaries

856,961

-

-

456,861

(1,313,822
)

-

Shareholders' Equity

1,898,000

-

2,760,684

1,178,295

(3,938,979
)

1,898,000

Total Liabilities and Shareholders'
   Equity
$
3,380,619

$
-

$
2,952,821

$
2,112,828

$
(5,252,801
)

$
3,193,467

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

In Thousands

Non-

TA Mfg.

Guarantor

Guarantor

Parent

Ltd.

Subsidiaries

Subsidiaries

Eliminations

Total

Net sales
$
-

$
-

$
243,425

$
268,512

$
(1,076
)

$
510,861

Cost of sales

-

-

155,232

177,480

(1,076
)

331,636

-

-

88,193

91,032

-

179,225

Expenses

Selling, general and administrative

-

-

37,903

54,132

-

92,035

Research, development & engineering

-

-

12,490

13,046

-

25,536

Restructuring charges

-

-

1,248

830

-

2,078

Other (income) expense

-

-

-

-

-

-

Total Expenses

-

-

51,641

68,008

-

119,649

Operating Earnings from Continuing
   Operations

-

-

36,552

23,024

-

59,576

Interest Income

(3,755
)

-

(1,913
)

(13,696
)

19,228

(136
)
Interest Expense

6,237

-

6,730

14,695

(19,228
)

8,434

Loss on Extinguishment of Debt

-

-

-

-

-

-

Earnings (Loss) from Continuing
   Operations Before Income Taxes

(2,482
)

-

31,735

22,025

-

51,278

Income Tax Expense (Benefit)

(520
)

-

6,996

3,910

-

10,386

Earnings (Loss) from Continuing
   Operations Including
   Noncontrolling Interests

(1,962
)

-

24,739

18,115

-

40,892

Earnings Attributable to
   Noncontrolling Interests

-

-

-

(297
)

-

(297
)
Earnings (Loss) from Continuing
   Operations Attributable to
   Esterline, Net of Tax

(1,962
)

-

24,739

17,818

-

40,595

Loss from Discontinued Operations
   Attributable to Esterline,
   Net of Tax

(343
)

-

(1,007
)

(2,341
)

-

(3,691
)
Equity in Net Earnings of
   Consolidated Subsidiaries

39,209

-

802

1,926

(41,937
)

-

Net Earnings (Loss) Attributable to
   Esterline
$
36,904

$
-

$
24,534

$
17,403

$
(41,937
)

$
36,904

Comprehensive Income (Loss)
$
75,488

$
-

$
25,065

$
56,268

$
(76,700
)

$
80,121

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

In Thousands

Non-

TA Mfg.

Guarantor

Guarantor

Parent

Ltd.

Subsidiaries

Subsidiaries

Eliminations

Total

Net sales
$
-

$
-

$
463,290

$
536,029

$
(2,518
)

$
996,801

Cost of sales

-

-

295,903

353,456

(2,518
)

646,841

-

-

167,387

182,573

-

349,960

Expenses

Selling, general and administrative

-

-

73,708

107,459

-

181,167

Research, development & engineering

-

-

24,313

26,869

-

51,182

Restructuring charges

-

-

4,321

2,553

-

6,874

Other (income) expense

-

-

-

-

-

-

Total Expenses

-

-

102,342

136,881

-

239,223

Operating Earnings from Continuing
   Operations

-

-

65,045

45,692

-

110,737

Interest Income

(7,751
)

-

(3,938
)

(28,372
)

39,806

(255
)
Interest Expense

12,573

-

13,787

30,505

(39,806
)

17,059

Loss on Extinguishment of Debt

-

-

-

-

-

-

Earnings (Loss) from Continuing
   Operations Before Income Taxes

(4,822
)

-

55,196

43,559

-

93,933

Income Tax Expense (Benefit)

(996
)

-

12,237

7,771

-

19,012

Earnings (Loss) from Continuing
   Operations Including
   Noncontrolling Interests

(3,826
)

-

42,959

35,788

-

74,921

Earnings Attributable to
   Noncontrolling Interests

-

-

-

(383
)

-

(383
)
Earnings (Loss) from Continuing
   Operations Attributable to
   Esterline, Net of Tax

(3,826
)

-

42,959

35,405

-

74,538

Loss from Discontinued Operations
   Attributable to Esterline,
   Net of Tax

(343
)

-

(2,858
)

(4,355
)

-

(7,556
)
Equity in Net Earnings of
   Consolidated Subsidiaries

71,151

-

1,234

1,320

(73,705
)

-

Net Earnings (Loss) Attributable to
   Esterline
$
66,982

$
-

$
41,335

$
32,370

$
(73,705
)

$
66,982

Comprehensive Income (Loss)
$
72,667

$
-

$
42,469

$
44,634

$
(90,087
)

$
69,683

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

In Thousands

Non-

TA Mfg.

Guarantor

Guarantor

Parent

Ltd.

Subsidiaries

Subsidiaries

Eliminations

Total

Cash Flows Provided (Used) by Operating Activities

Net earnings (loss) including
   noncontrolling interests
$
67,365

$
-

$
41,335

$
32,370

$
(73,705
)

$
67,365

Depreciation & amortization

-

-

22,722

36,560

-

59,282

Deferred income taxes

(2,708
)

-

16

(5,718
)

-

(8,410
)
Share-based compensation

-

-

2,891

3,757

-

6,648

Gain on release of non-income
   tax liability

-

-

-

-

-

-

Loss on assets held for sale

-

-

-

-

-

-

Working capital changes, net of
   effect of acquisitions:

Accounts receivable

(257
)

-

11,715

21,873

-

33,331

Inventories

-

-

(7,944
)

(25,541
)

-

(33,485
)
Prepaid expenses

33

-

(3,634
)

(4,471
)

-

(8,072
)
Other current assets

-

-

1

(277
)

-

(276
)
Accounts payable

(565
)

-

(132
)

(9,953
)

-

(10,650
)
Accrued liabilities

(6,625
)

-

(1,292
)

(5,307
)

-

(13,224
)
Federal and foreign income taxes

(6,803
)

-

22,219

(19,170
)

-

(3,754
)
Other liabilities

5,308

-

64

(6,959
)

-

(1,587
)
Other, net

(242
)

-

(3,170
)

696

-

(2,716
)

55,506

-

84,791

17,860

(73,705
)

84,452

Cash Flows Provided (Used) by Investing Activities

Purchases of capital assets

(149
)

-

(7,833
)

(13,315
)

-

(21,297
)
Acquisition of businesses, net of
   cash acquired

-

-

(44,043
)

-

-

(44,043
)

(149
)

-

(51,876
)

(13,315
)

-

(65,340
)

In Thousands

Non-

TA Mfg.

Guarantor

Guarantor

Parent

Ltd.

Subsidiaries

Subsidiaries

Eliminations

Total

Cash Flows Provided (Used) by Financing Activities

Proceeds provided by stock issuance
   under employee stock plans

22,957

-

-

-

-

22,957

Excess tax benefits from stock
   option exercises

5,297

-

-

-

-

5,297

Shares repurchased

-

-

-

-

-

-

Repayment of long-term credit
   facilities

(25,000
)

-

-

-

-

(25,000
)
Repayment of long-term debt

(4,375
)

-

(205
)

(14,722
)

-

(19,302
)
Proceeds from issuance of long-term
   credit facilities

25,000

-

-

-

-

25,000

Proceeds from issuance of
   long-term debt

-

-

-

-

-

-

Proceeds from government
   assistance

-

-

-

-

-

-

Dividends paid to noncontrolling
   interests

-

-

-

(780
)

-

(780
)
Debt and other issuance costs

-

-

-

-

-

-

Net change in intercompany
   financing

(77,490
)

-

(32,008
)

35,793

73,705

-

(53,611
)

-

(32,213
)

20,291

73,705

8,172

Effect of Foreign Exchange Rates on
   Cash and Cash Equivalents

5

-

(43
)

1,019

-

981

Net Increase (Decrease) in Cash and
   Cash Equivalents

1,751

-

659

25,855

-

28,265

Cash and Cash Equivalents -
   Beginning of Year

7,826

-

4,876

166,476

-

179,178

Cash and Cash Equivalents -
   End of Period
$
9,577

$
-

$
5,535

$
192,331

$
-

$
207,443

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

On June 5, 2014, we changed the Company’s fiscal year end to the last Friday of September from the last Friday in October. We reported our financial results for the 11-month transition period of November 1, 2014, through October 2, 2015, on our Transition Report on Form 10-K, and thereafter we will file our annual report for the 12-month period ending the last Friday of September of each year, beginning with the 12-month period ending September 30, 2016. Prior year results have been recast on a calendar quarter basis. Refer to the Transition Report on Form 10-K for the eleven months ended October 2, 2015, for additional information regarding our fiscal year change.

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

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

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

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

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

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

In September 2014, our board of directors approved a plan to sell certain non-core business units including Eclipse Electronic Systems, Inc. (Eclipse), a manufacturer of embedded communication intercept receivers for signal intelligence applications; Wallop Defence Systems, Ltd. (Wallop), a manufacturer of flare countermeasure devices; Pacific Aerospace and Electronics Inc. (PA&E), a manufacturer of hermetically sealed electrical connectors; and a small distribution business. These business units are reported as discontinued operations for all periods presented. Based upon the estimated fair values, we incurred an estimated after-tax loss of $49.5 million in the fourth quarter of fiscal 2014 on the assets held for sale in discontinued operations. During the first six months of fiscal 2015 and 2014, we incurred a loss on discontinued operations of $18.6 million and $7.6 million, respectively.

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

In March 2014, we entered into a Consent Agreement with the U.S. Department of State’s Directorate of Defense Trade Controls Office of Defense Trade Controls Compliance (DDTC) to resolve alleged International Traffic in Arms Regulations (ITAR) civil violations. Among other things, the Consent Agreement ~~requires~~required us to pay a $20 million penalty, of which $10 million was suspended and eligible for offset ~~credit based upon verified expenditures for past and future remedial actions, and to continue to implement ongoing compliance remedial~~credit. Compliance expense associated with these measures ~~and to implement additional remedial measures related to ITAR compliance activities. As a result of these remedial measures, compliance expense~~ was ~~$7.9~~$5.5 million in the first six months of fiscal ~~2015 compared with $4.6~~2016 and $7.2 million in the ~~same period in fiscal 2014. We estimate that compliance expense will be $15 million for fiscal 2015.~~prior-year period. More information about the Consent Agreement is set forth in Note 910 to the Consolidated Financial Statements included in Part 1, Item 1 of this report.

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

On December 5, 2013, we announced the acceleration of our plans to consolidate certain facilities and create cost efficiencies through shared services in sales, general and administrative and support functions. ~~For fiscal 2014 and 2015 our integration activities are expected to result in aggregate charges and expenses of $35 million. Total restructuring~~Restructuring expenses were ~~$20.4~~$11.7 million and $17.4 million in fiscal ~~2014. Restructuring expenses in fiscal~~2015 and 2014, were mainly comprised of $5.7 million in severance and $11.9 million in exit and relocation of facilities expenses, and a $2.8 million loss on the write off of certain property, plant and equipment. Total restructuring expenses in the first six months of fiscal 2015 were $7.3 million, of which $4.0 million was reported separately as restructuring expensesrespectively, and $3.3 million ~~was reported as cost of goods sold. Total restructuring expenses in the first six months of fiscal 2014 were $8.9 million, of which $6.9 million was reported separately as restructuring expenses~~ and ~~$2.0 million was reported as cost of goods sold. Expense savings were $6.7~~$9.3 million in the first six months of fiscal ~~2015.~~2016 and 2015, respectively.

Total sales infor the second fiscal quarter of ~~2015 have decreased 2%~~2016 increased by $22.1 million, or 4.7%, over the prior-year period to ~~$500.1~~$490.3 million, mainly reflecting higher sales volumes across all segments due to higher demand and incremental sales from DAT, partially offset by the effect of ~~a weakening Canadian dollar, U.K. pound and euro~~changes in foreign currency exchange rates relative to the U.S. dollar. ~~The effect of weakening foreign currencies had a $29~~Avionics & Controls sales volume increased by $6 million, or 6%3%, ~~impact on sales in the second fiscal quarter compared with the prior-year period. The decrease in total sales by segment principally reflected lower~~ Sensors & Systems ~~segment~~increased by $5 million, or 3%, and Advanced Materials ~~segment~~increased by $9 million, or 8%. Incremental sales ~~due to lower demand~~ from defense, aerospace and industrial commercial customers, partially offset by $31 million in incremental sales from the acquisition of DAT. Excluding the foreign currency exchange effects and the other items listed in the table at the end of this “Overview” section, sales volume decreased $6 million compared with the prior-year periods.

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

Selling, general and administrative expense increased by $8.7 million and by 2.1 percentage points over the prior-year period to 20.1% of sales, reflecting incremental selling, general and administrative expenses from the acquisition of DAT of $8.9 million and certain incremental expense matters, including acquisition costs of $2.4 million and incremental remedial compliance costs of $1.8training display (DAT) were $12 million. These increases were partially offset by the ~~favorable effects~~effect of changes in foreign ~~currencies.~~

~~Research, development and engineering spending increased by $1.5 million over~~currency exchange rates relative to the U.S. dollar compared with the prior-year period ~~to 5.4%~~ of sales due to incremental research, development and engineering expenses from the acquisition of DAT of $3.7 million, partially offset by lower spending for Sensors & Systems research, development and engineering.

The effective income tax rate was 17.3% in the second fiscal quarter of 2015 compared with 20.3% in the prior-year period, mainly reflecting additional tax benefits resulting from DAT integration expenses.$10 million.

Earnings from continuing operations in the second fiscal quarter of ~~2015~~2016 were ~~$21.6~~$17.0 million, or ~~$0.69~~$0.57 per diluted share, compared with ~~$40.6~~$24.9 million, or ~~$1.25~~$0.79 per diluted share, in the prior-year period. Loss from discontinued operations in the second fiscal quarter of ~~2015~~2016 was ~~$1.8~~$2.0 million, or ~~$0.06~~$0.07 per diluted share, compared with ~~$3.7~~$14.6 million, or ~~$0.11~~$0.46 per diluted share, in the prior-year period. Net income in the second fiscal quarter of 2016 was ~~$19.8~~$15.0 million, or ~~$0.63~~$0.50 per diluted share, compared with ~~$36.9~~$10.3 million, or ~~$1.14~~$0.33 per diluted share, in the prior-year period.

Total sales for the first six months of fiscal 2016 decreased by $41.0 million, or 4.2%, over the prior-year period to $931.8 million, reflecting lower sales volumes across all segments due to decreased demand and the effect of changes in foreign currency exchange rates relative to the U.S. dollar. Avionics & Controls sales volume decreased by $52 million, or 13%, Sensors & Systems decreased by $13 million, or 4%, and Advanced Materials decreased by $2 million, or 1%. Additionally, the effect of changes in foreign currency exchange rates compared with the prior-year period reduced sales by $29 million. These decreases were partially offset by the incremental sales from DAT of $56 million.

Earnings from continuing operations in the first six months of fiscal ~~2015 decreased 5.1% to $946.4~~2016 were $26.9 million, or $0.90 per diluted share, compared with ~~$996.8~~$59.4 million, or $1.86 per diluted share, in the prior-year ~~period, mainly reflecting the effect of a weakening Canadian dollar, U.K. pound and euro. The effect of weakening foreign currencies had a $39 million, or 4%, impact on sales~~period. Loss from discontinued operations in the first six months of fiscal ~~2015~~2016 was $6.8 million, or $0.23 per diluted share, compared with $20.5 million, or $0.64 per diluted share, in the prior-year period. ~~Additionally, the~~

~~decrease in sales reflected a 26-week period~~Net income in the first six months of fiscal ~~2015~~2016 was $20.1 million, or $0.67 per diluted share, compared ~~to a 27-week period~~with $38.9 million, or $1.22 per diluted share, in the prior-year period, resulting in a reduction in sales of approximately $37 million, or 4%. These decreases were partially offset by incremental sales from the DAT acquisition of $31 million. Excluding the foreign currency exchange effects and the other items listed in the table at the end of this “Overview” section, sales volume increased $5 million compared with the prior-year period.

Cash flows from operating activities were $79.9 million in the first six months of fiscal ~~2015~~2016 compared with ~~35.1%~~$50.9 million in the prior-year period. The increase in cash flow from operating activities reflected higher cash collections of accounts receivable and lower cash payments for income taxes.

Our sales, gross margin and earnings results for the three and six month period ended April 1, 2016, compared with the prior-year period included a number of significant items which are summarized in the tables below.

The following is a roll forward of sales and gross margin from the recast three month period ended March 27, 2015, to the three month period ended April 1, 2016:

In Thousands	Avionics &			Sensors &			Advanced
	Controls			Systems			Materials			Total
Sales:
Three month period ended March 27, 2015	$	187,330		$	171,538		$	109,342		$	468,210
Foreign currency gain (loss)		(7,128	)		(2,109	)		(2,247	)		(11,484	)
Forward contract gain (loss)		531			839			-			1,370
DAT incremental		12,428			-			-			12,428
Sales volume		6,364			5,080			8,648			20,092
Other		(860	)		721			(167	)		(306	)
Three month period ended April 1, 2016	$	198,665		$	176,069		$	115,576		$	490,310

Gross Margin:
Three month period ended March 27, 2015		55,959			60,083			33,975			150,017
Foreign currency gain (loss)		(5,638	)		(1,101	)		(601	)		(7,340	)
Forward contract gain (loss)		447			839			-			1,286
DAT incremental		5,260			-			-			5,260
DAT inventory fair value adjustment		1,816			-			-			1,816
DAT integration		(1,026	)		-			-			(1,026	)
Volume/mix		2,372			1,222			3,884			7,478
Lower (higher) manufacturing costs		(1,830	)		412			1,120			(298	)
Inventory reserves and EAC adjustment		(840	)		(180	)		-			(1,020	)
Three month period ended April 1, 2016	$	56,520		$	61,275		$	38,378		$	156,173

The following is a roll forward of sales and gross margin from the recast six month period ending March 27, 2015, to the six month period ended April 1, 2016:

In Thousands	Avionics &			Sensors &			Advanced
	Controls			Systems			Materials			Total
Sales:
Six month period ended March 27, 2015	$	393,947		$	354,432		$	224,442		$	972,821
Foreign currency gain (loss)		(9,582	)		(13,823	)		(3,464	)		(26,869	)
Forward contract gain (loss)		(2,053	)		234			-			(1,819	)
DAT incremental		55,554			-			-			55,554
Sales volume		(51,553	)		(12,806	)		(2,370	)		(66,729	)
Other		(1,403	)		462			(230	)		(1,171	)
Six month period ended April 1, 2016	$	384,910		$	328,499		$	218,378		$	931,787

Gross Margin:
Six month period ended March 27, 2015		134,747			122,985			70,526			328,258
Foreign currency gain (loss)		(5,532	)		(3,041	)		(862	)		(9,435	)
Forward contract gain (loss)		(2,119	)		234			-			(1,885	)
DAT incremental		23,309			-			-			23,309
DAT inventory fair value adjustment		1,816			-			-			1,816
DAT integration		(2,129	)		-			-			(2,129	)
Volume/mix		(26,531	)		(8,362	)		(1,345	)		(36,238	)
Lower (higher) manufacturing costs		(4,080	)		(2,514	)		(2,583	)		(9,177	)
Cost initiatives		67			2,388			459			2,914
Factory layout costs (Kaikaku)		(2,307	)		-			-			(2,307	)
Inventory reserves and EAC adjustment		(1,054	)		(180	)		-			(1,234	)
Six month period ended April 1, 2016	$	116,187		$	111,510		$	66,195		$	293,892

The following table shows the average foreign exchange rates for the U.K. pound, Canadian dollar and euro relative to the U.S. dollar for the three and six month periods ended April 1, 2016, and March 27, 2015.

The following tables show the impact of changes in the foreign currency exchange rates for the U.K. pound, Canadian dollar and euro relative to the U.S. dollar on operating earnings during the three month period ended April 1, 2016, compared with the prior-year period.

The following tables show the impact of changes in the foreign currency exchange rates for the U.K. pound, Canadian dollar and euro relative to the U.S. dollar on operating earnings during the six month period ended April 1, 2016, compared with the prior-year period.

For further explanation, please see the roll forward table of sales, gross margin and the analysis of the impact of changes in foreign currency exchange rates at the end of the Overview section.

Three Month Period Ended April 1, 2016, Compared with Three Month Period Ended March 27, 2015

Total sales for the second fiscal quarter increased by $22.1 million, or 4.7%, over the prior-year period. Sales by segment were as follows:

The $11.3 million, or 6.1%, increase in Avionics & Controls sales over the prior-year period mainly reflected incremental sales from DAT of $12 million and higher avionics systems sales of $7 million, partially offset by lower sales from interface technologies of $2 million and the effect of changes in foreign currency exchange rates. The increase in avionics systems reflected higher demand for flight management systems mainly for commercial aviation applications. The decrease in interface technologies reflected lower demand primarily for large medical diagnostic input consoles. The effect of changes in foreign currency exchange rates decreased sales by approximately $7 million compared to the prior-year period.

The $4.5 million, or 2.6%, increase in Sensors & Systems sales over the prior-year period reflected higher sales volumes of connection technologies due to higher demand for commercial aviation and industrial applications.

The $6.2 million, or 5.7%, increase in Advanced Materials sales over the prior-year period mainly reflected higher sales volumes of engineered materials and defense technologies. The $6 million increase in engineered materials sales volumes was mainly due to higher demand for elastomer clamping devices for commercial aviation and defense applications. The increase in defense technologies sales was due to higher demand for combustible ordnance.

Overall, gross margin was 31.9% and 32.0% for the second fiscal quarter of 2016 and 2015, respectively. Gross profit was $156.2 million and $150.0 million for the second fiscal quarter of 2016 and 2015, respectively. Gross profit was impacted by $1.0 million and $2.1 million in restructuring expense in the second fiscal quarter of 2016 and 2015, respectively.

Avionics & Controls segment gross margin was 28.5% and 29.9% for the second fiscal quarter of 2016 and 2015, respectively. Segment gross profit was $56.5 million compared with $56.0 million in the prior-year period. Gross profit in the second fiscal quarter of 2016 reflected incremental gross margin from DAT of $5 million, the effect of higher sales volume/mix of $2 million and an inventory fair value adjustment of $2 million recorded in the prior year period, offset by an increase in other expenses of $3 million, and the impact of foreign currency exchange rates. The increase in other expenses included (1) DAT integration costs of $1 million; and (2) other manufacturing costs of $2 million due to production inefficiencies. In addition, gross margin was ~~mainly~~impacted by a $5 million long-term contract loss in both the second fiscal quarter of 2016 and 2015. The loss in the both periods principally related to a scope issue on a long-term contract to upgrade avionics for a military transport aircraft that was settled in the second fiscal quarter of 2016. Gross margin in the second fiscal quarter of 2016 was also impacted by the effect of ~~weakening foreign currencies, the 26-week versus 27-week impact, an unfavorable EAC for certain long-term development contracts, and the impact from the settlement of our~~changes in foreign currency ~~forward contracts~~exchange rates of $5 million.

As of April 1, 2016, the Company has $6.5 million in outstanding accounts receivable on a long-term contract to upgrade avionics on a military transport aircraft. The final payment is due upon contract completion requiring a solution to a radio frequency tuning anomaly which is being tested on the ~~period. Additionally,~~aircraft. Management believes this solution will correct the anomaly, and accordingly, the outstanding receivable is probable of collection.

Sensors & Systems segment gross margin was ~~impacted~~34.8% and 35.0% for the second fiscal quarter of 2016 and 2015, respectively. Segment gross profit was $61.3 million compared with $60.1 million in the prior-year period, primarily reflecting the effect of higher sales volumes of connection technologies, partially offset by ~~an inventory fair value adjustment~~lower gross profit on sales of advanced sensors due to ~~the shipment of acquired DAT inventory recognized at fair value. Gross~~production inefficiencies.

Advanced Materials segment gross margin was ~~also impacted by unfavorable~~33.2% and 31.1% for the second fiscal quarter of 2016 and 2015, respectively. Segment gross profit was $38.4 million compared with $34.0 million in the prior-year period. The increase in gross profit reflected the impact of higher sales ~~mix at Avionics & Controls and Advanced Materials.~~volumes of engineered materials.

Selling, general and administrative ~~expense increased by $13.2~~expenses (which include corporate expenses) totaled $102.4 million, ~~and by 2.4 percentage points over the first six months of fiscal 2014 to 20.5%~~or 20.9% of sales, ~~reflecting~~and $99.4 million, or 21.2% of sales, for the second fiscal quarter of 2016 and 2015, respectively. Selling, general and administrative expenses increased compared with the prior-year period due to incremental selling, general and administrative expenses from ~~the~~ DAT of $5 million, partially offset by lower acquisition of $8.9 million, acquisition costs of $3.0 million, higher remedial compliance costs of $3.9 million, a $2.1 million write off of fixed assets due to uncertainty over a cockpit integration program, and a $3.0 million pension settlement related to our settlement with terminated vested pension plan participants.expenses.

Research, development and engineering spending ~~decreased by $1.7~~was $25.0 million, ~~over~~or 5.1% of sales, for the ~~first six months~~second fiscal quarter of 2016 compared with $25.1 million, or 5.4% of sales, for the second fiscal ~~2014 to 5.2%~~quarter of ~~sales.~~2015. The decrease ~~in research, development and engineering spending principally reflects~~reflected lower spending on ~~control and communication~~avionics systems ~~development,~~developments, partially offset by incremental research, development and engineering ~~expense~~ from DAT of $1.4 million.

Total restructuring expenses were $1.9 million, or 0.4% of sales, in the ~~DAT acquisition~~second fiscal quarter of ~~$3.7 million. These increases~~2016, of which $0.9 million is reported separately as restructuring expenses and $1.0 million is included in cost of goods sold. Total restructuring expenses were ~~partially offset by~~$3.8 million, or 0.8% of sales, in the ~~favorable effects~~second fiscal quarter of ~~foreign currencies.~~2015, of which $1.6 million is reported separately as restructuring expenses and $2.1 million is included in cost of goods sold.

During the ~~first six months~~second fiscal quarter of ~~fiscal~~ 2015, we recognized a $15.7 million gain in other income and a $2.4 million reduction in interest expense upon the lapse of a statutory period related to a liability for a non-income tax position of an acquired company. ~~In addition, we incurred a $2.9 million loss in~~

Segment earnings (operating earnings excluding corporate expenses and other income or expense) for the second fiscal quarter of 2016 totaled $46.8 million, or 9.5% of sales, compared with $43.7 million, or 9.3% of sales, for the second fiscal quarter in 2015.

Avionics & Controls segment earnings were $2.6 million, or 1.3% of sales, in the second fiscal quarter of 2016 and $7.9 million, or 4.2% of sales, in the second fiscal quarter of 2015, mainly reflecting increased operating expenses of $6 million. The increase in operating expenses principally reflects incremental selling, general and administrative expenses and research, development and engineering costs from DAT of $4 million, $3 million in DAT integration expense, and a $3 million foreign currency loss on mainly monetary assets. The loss on monetary assets was due to the strengthening of the Canadian dollar relative to the U.S. dollar from the end of the first fiscal quarter of 2016 to the end of the second fiscal quarter of 2016. In the prior-year period, the Canadian dollar weakened relative to the U.S. dollar. These increases were partially offset by a $2 million write-off of fixed assets due to an avionics systems program realignment recorded in the prior-year period.

Sensors & Systems segment earnings were $20.9 million, or 11.9% of sales, for the second fiscal quarter of 2016 compared with $16.3 million, or 9.5% of sales, for the second fiscal quarter of 2015. The change mainly reflects lower selling, general and administrative expenses due to the effect of changes in foreign currency exchange ~~resulting from~~rates of $3 million. In addition, restructuring expenses were $0.8 million and $2.4 million in the ~~funding~~second fiscal quarter of 2016 and 2015, respectively.

Advanced Materials segment earnings were $23.2 million, or 20.1% of sales, for the ~~acquisition~~second fiscal quarter of ~~DAT.~~2016 compared with $19.5 million, or 17.8% of sales, for the second fiscal quarter of 2015, primarily reflecting higher sales volumes of engineered materials. Restructuring expenses were $0.7 million and $1.0 million in the second fiscal quarter of 2016 and 2015, respectively.

Interest expense for the second fiscal quarter of 2016 was $7.3 million compared with $5.9 million for the second fiscal quarter of 2015. Interest expense in the prior-year was favorably impacted by the $2.4 million adjustment noted above.

The ~~effective~~ income tax rate was ~~21.3%~~16.6% in the second fiscal quarter of 2016 compared with 18.6% in the prior-year period. In the second fiscal quarter of 2016, we recognized $0.3 million of discrete tax benefits due to income tax return to provision adjustments. In the second fiscal quarter of 2015, we recognized $0.5 million of discrete tax expense principally related to the following two items. The first item was a $2.0 million tax expense due to income tax return to provision adjustments. The second item was approximately $1.5 million of discrete tax benefits due to the retroactive extension of the U.S. federal research and experimentation credits. The income tax rate differed from the statutory rate in the second fiscal quarters of 2016 and 2015, as both years benefited from various tax credits and certain foreign interest expense deductions.

Six Month Period Ended April 1, 2016, Compared with Six Month Period Ended March 27, 2015

Total sales for the first six months of fiscal ~~2015 compared to 20.2% in the prior-year period, mainly reflecting higher discrete income tax benefits in the prior-year period.~~

~~Earnings from continuing operations in the first six months of fiscal 2015 were $46.7~~2016 decreased by $41.0 million, or $1.46 per diluted share, compared with $74.5 million, or $2.30 per diluted share, in the prior-year period. Loss from discontinued operations in the first six months of fiscal 2015 was $18.6 million, or $0.58 per diluted share, compared with $7.6 million, or $0.23 per diluted share, in the prior-year period. Net income in the first six months of fiscal 2015 was $28.1 million, or $0.88 per diluted share, compared with $67.0 million, or $2.07 per diluted share, in the prior-year period.

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

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

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

In Thousands
Avionics &

Sensors &

Advanced

Controls

Systems

Materials

Total

Sales:

Three month period ended May 2, 2014
$
184,616

$
205,111

$
121,134

$
510,861

Foreign currency gain (loss)

(4,709
)

(20,585
)

(3,237
)

(28,531
)

Forward contract gain (loss)

(3,836
)

(2,549
)

-

(6,385
)

Acquired DAT business

30,611

-

-

30,611

Sales volume

3,907

(5,552
)

(4,831
)

(6,476
)

Three month period ended May 1, 2015
$
210,589

$
176,425

$
113,066

$
500,080

Gross Margin:

Three month period ended May 2, 2014

68,135

67,105

43,985

179,225

Foreign currency gain (loss)

(2,134
)

(4,096
)

(943
)

(7,173
)

Forward contract gain (loss)

(3,836
)

(2,549
)

-

(6,385
)

Acquired DAT business

8,559

-

-

8,559

Volume/mix

(1,056
)

4,152

(5,047
)

(1,951
)

DAT inventory fair value adjustment

(2,724
)

-

-

(2,724
)

Inventory reserves and EAC adjustment

(5,400
)

(500
)

-

(5,900
)

Three month period ended May 1, 2015
$
61,544

$
64,112

$
37,995

$
163,651

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

In Thousands
Avionics &

Sensors &

Advanced

Controls

Systems

Materials

Total

Sales:

Six month period ended May 2, 2014
$
378,506

$
386,885

$
231,410

$
996,801

Foreign currency gain (loss)

(2,975
)

(30,991
)

(4,741
)

(38,707
)
Forward contract gain (loss)

(6,302
)

(4,365
)

-

(10,667
)
26 week vs. 27 week

(14,018
)

(14,329
)

(8,571
)

(36,918
)
Acquired DAT business

30,611

-

-

30,611

Sales volume

1,245

2,881

1,178

5,304

Six month period ended May 1, 2015
$
387,067

$
340,081

$
219,276

$
946,424

Gross Margin:

Six month period ended May 2, 2014

140,370

130,947

78,643

349,960

Foreign currency gain (loss)

721

(5,474
)

(1,309
)

(6,062
)
Forward contract gain (loss)

(6,302
)

(4,365
)

-

(10,667
)
26 week vs. 27 week

(4,462
)

(5,032
)

(2,713
)

(12,207
)
Acquired DAT business

8,559

-

-

8,559

Volume/mix

(6,953
)

3,647

(4,838
)

(8,144
)
DAT inventory fair value adjustment

(2,724
)

-

-

(2,724
)
Inventory reserves and EAC adjustment

(9,214
)

(500
)

-

(9,714
)
Six month period ended May 1, 2015
$
119,995

$
119,223

$
69,783

$
309,001

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

~~Sales for the second fiscal quarter decreased by $10.8 million, or 2.1%~~4.2%, over the prior-year period. The effect of a weakening Canadian dollar, U.K. pound and euro had a $29 million, or 6%, impact on sales in the second fiscal quarter compared with the prior-year period. This decrease was offset by $31 million in incremental sales from the DAT acquisition. Sales by segment were as follows:

The ~~14.1% increase~~$9.0 million, or 2.3%, decrease in ~~sales of~~ Avionics & Controls ~~was~~sales over the prior-year period mainly reflected lower sales volumes of avionics systems of $23 million, control and communication systems of $22 million, and interface technologies of $6 million. The decrease in avionics systems reflected lower demand and delays for flight management systems for defense applications, including the T6-B military trainer for the U.S. Navy as the T6-B program is nearing completion. The decrease in control and communication systems mainly reflected lower sales of headset communication devices due to higher sales of delinquent orders in the prior-year period. The decrease in interface technologies reflected lower demand primarily for large medical diagnostic input consoles. The effect of changes in foreign currency exchange rates decreased sales by approximately $12 million. These decreases were partially offset by incremental sales from DAT of $55 million.

The $25.9 million, or 7.3%, decrease in Sensors & Systems sales over the ~~DAT acquisition. This increase was~~prior-year period reflected lower sales volumes of $13 million and weakening foreign currencies. The decrease in sales volume reflected lower sales of advanced sensors of $6 million, power systems of $8 million, partially offset by higher sales of connection technologies. The advanced sensors sales decrease mainly reflected lower OEM demand. The decrease in power systems sales reflected delays in shipments due to export control requirements. The decrease in connection technologies sales reflected lower demand from defense and industrial customers including oil and gas and nuclear. The effect of changes in foreign currency exchange rates decreased sales by approximately $14 million.

The $6.1 million, or 2.7%, decrease in Advanced Materials sales over the prior-year period reflected lower sales volumes of engineered materials under long-term defense contracts for metal insulation applications and the effect of weakening foreign currencies which reduced segment sales by $5 million compared with the prior-year period. The impact of the settlement of forward foreign currency contracts qualifying under hedge accounting reduced sales by $4 million. Sales volume increased $4 million reflecting higher sales of switches and cockpit control devices and communication systems to enhance security and aural clarity in military communications of $6 million, as well as higher sales of interface technologies of $3 ~~million, partially offset by lower sales of avionics systems of $5~~ million.

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

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

Overall, gross margin was ~~32.7%~~31.5% and ~~35.1%~~33.7% for the ~~second~~first six months of fiscal ~~quarter of~~2016 and 2015, ~~and 2014,~~ respectively. Gross profit was ~~$163.7~~$293.9 million and ~~$179.2~~$328.3 million for the ~~second~~first six months of fiscal ~~quarter of~~2016 and 2015, ~~and 2014,~~ respectively. Gross ~~margin~~profit was ~~also~~ impacted by $1.4 million and $4.4 million in restructuring expense in the ~~second~~first six months of fiscal ~~quarter of both~~2016 and 2015, ~~and 2014.~~respectively.

Avionics & Controls segment gross margin was ~~29.2%~~30.2% and ~~36.9%~~34.2% for the ~~second~~first six months of fiscal ~~quarter of~~2016 and 2015, ~~and 2014,~~ respectively. Segment gross profit was ~~$61.5~~$116.2 million compared with $68.1 million in the prior-year period. Gross margin was impacted by the effects of weakening foreign currencies of $2 million and the impact from settlement forward contracts of $4 million. Additionally, avionics systems gross margin was impacted by a $4.9 million estimate at completion adjustment due to development program realignments. The decrease gross margin was also impacted by a fair value adjustment on acquired inventory of $2.7 million, which lowered incremental gross profit from $8.6 million to $6 million. Control and communication systems was impacted by a $0.5 million inventory write-off due to a program reassessment.

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

~~Advanced Materials segment gross margin was 33.6% compared with 36.3% for the prior-year period. Segment gross profit was $38.0 million compared with $44.0~~$134.7 million in the prior-year period. The decrease in gross ~~margin~~profit reflected $5the impact of lower sales volumes/mix of $27 million and an increase in other expenses of $9 million. The decrease due to sales volume mainly reflected an $11 million impact on lower sales of avionics systems and a $15 million impact on decreased sales of control and communication systems. These lower sales volumes resulted in a lower recovery of fixed costs. The higher other expenses included DAT integration costs of $2 million, the cost of a major factory layout event (Kaikaku) of $2 million, and other manufacturing costs of $5 million due to production inefficiencies. Additionally, gross margin was impacted by the effect of changes in foreign currency exchange rates of $8 million. These decreases were partially offset by incremental gross profit from DAT of $23 million and a $2 million inventory fair value adjustment recorded in the prior year period.

Sensors & Systems segment gross margin was 33.9% and 34.7% for the first six months of fiscal 2016 and 2015, respectively. Segment gross profit was $111.5 million compared with $123.0 million in the prior-year period, primarily reflecting the impact of lower sales volume/mix of advanced sensors of $4 million and power systems of $5 million. Gross margin was impacted by the effects of changes in foreign currency exchange rates of $3 million.

Advanced Materials segment gross margin was 30.3% and 31.4% for the first six months of fiscal 2016 and 2015, respectively. Segment gross profit was $66.2 million compared with $70.5 million in the prior-year period. The decrease in gross profit reflected the impact of higher manufacturing costs of $4 million, mainly due to engineered materials ~~for defense applications and less favorable sales mix.~~manufacturing inefficiencies.

Selling, general and administrative expenses (which include corporate expenses) totaled ~~$100.7~~$196.5 million, or ~~20.1%~~21.1% of sales, and ~~$92.0~~$197.5 million, or ~~18.0%~~20.3% of sales, for the ~~second~~first six months of fiscal ~~quarter of~~2016 and 2015, ~~and 2014,~~ respectively. ~~The increase in selling,~~Selling, general and administrative expenses in the first six months of fiscal 2016 reflected the favorable effect of changes in foreign currency exchange rates of $9 million, a $2 million write-off of fixed assets due to an avionics systems program realignment recorded in the prior-year period and

lower corporate expenses. Corporate expenses decreased by $6 million principally due to a $3 million pension settlement in the prior-year quarter and decreased acquisition expenses. These decreases were partially offset by incremental selling, general and administrative expenses from ~~the~~ DAT ~~acquisition~~ of ~~$8.9~~$11 million ~~$2.4~~and $3 million in related acquisition expenses, and an increase of $1.8 million in remedial compliance costs over the prior-year period. These increases were partially offset by the effect of translating selling, general and administrative expenses denominated in non-U.S. functional currencies to the U.S. dollar of $7 million.DAT integration expense.

Research, development and engineering spending was ~~$27.0~~$50.5 million, or 5.4% of sales, for the ~~second~~first six months of fiscal ~~quarter of 2015~~2016 compared with ~~$25.5~~$48.7 million, or 5.0% of sales, for the ~~second fiscal quarter of 2014.~~prior-year period. The increase in research, development and engineering spending principally reflected incremental research, development and engineering from ~~the~~ DAT ~~acquisition~~ of ~~$8.9~~$7 million, ~~substantially~~partially offset by lower spending on ~~control~~avionics systems and ~~communication~~power systems ~~development.~~developments.

Total restructuring expenses were ~~$2.3~~$3.3 million, or ~~0.5%~~0.4% of sales, in the ~~second fiscal quarter~~first six months of ~~2015,~~2016, of which ~~$0.9~~$1.9 million is reported separately as restructuring expenses and $1.4 million is included in cost of goods sold. Total restructuring expenses were ~~$3.5~~$9.3 million, or ~~0.7%~~1.0% of sales, in the ~~second fiscal quarter~~first six months of ~~2014,~~2015, of which ~~$2.1~~$4.9 million is reported separately as restructuring expenses and ~~$1.4~~$4.4 million is included in cost of goods sold.

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

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

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

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

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

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

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

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

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

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

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

~~Overall, gross margin as a percentage of sales was 32.7% and 35.1% for the~~ first six months of fiscal ~~2015 and 2014, respectively. Gross profit was $309.0~~2016 totaled $82.0 million, ~~and $350.0 million for the first six months~~or 8.8% of ~~fiscal 2015 and 2014, respectively. Gross margin was impacted by $3.3 million and $2.0 million in restructuring expense in the first six months of fiscal 2015 and 2014, respectively.~~

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

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

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

~~Selling, general and administrative expenses (which include corporate expenses) totaled $194.4 million,~~ or ~~20.5% of sales, and $181.2 million, or 18.2%~~12.3% of sales, for the first six months of 2015.

Avionics & Controls segment earnings were $12.1 million, or 3.1% of sales, in the first six months of fiscal 2016 and $45.3 million, or 11.5% of sales, in the first six months of 2015, mainly reflecting a $19 million decrease in gross margin and ~~2014, respectively. The increase in~~increased selling, general and administrative ~~expense reflected $3.9 million in remedial compliance costs,~~expenses and research, development and engineering expenses of $15 million. This increase reflects incremental selling, general and administrative expenses and research, development and engineering expenses from ~~the~~ DAT ~~acquisition~~ of ~~$8.9~~$18 million and $6 million in DAT integration expense. These increases were partially offset by lower research, development and engineering expenses for avionics systems of $3 million, ~~in related acquisition~~lower selling, general and administrative expenses of $3 million, and a ~~$2.1~~$2 million write-off of fixed assets due to an avionics systems program realignment ~~and $3 million~~recorded in ~~higher pension costs due to our settlement with vested terminated pension plan participants. These increases~~the prior-year period.

Sensors & Systems segment earnings were partially offset by the effect of translating selling, general and administrative expenses denominated in non-U.S. functional currencies to the U.S. dollar of $11 million. In fiscal 2014, we offered vested terminated participants of our U.S. pension plan a one-time opportunity to elect a lump-sum payment from the plan in lieu of a lifetime annuity. In the first fiscal quarter of 2015, we made $16.6 million in lump-sum payments to vested terminated pension plan participants from the plan, which resulted in an actuarial estimated settlement charge of $3.0 million.

~~Total restructuring expenses were $7.3~~$33.7 million, or 0.7% of sales, in the first six months of fiscal 2015, of which $3.9 million is reported separately as restructuring expenses and $3.4 million is included in cost of goods sold. Total restructuring expenses were $8.9 million, or 0.8% of sales, in the first six months of fiscal 2014, of which $6.9 million is reported separately as restructuring expenses and $2.0 million is included in cost of goods sold.

~~Research, development and engineering spending was $49.5 million, or 5.2%~~10.3% of sales, for the first six months of fiscal ~~2015~~2016 compared with ~~$51.2~~$33.7 million, or ~~5.1%~~9.5% of sales, for the first six months of 2015, mainly reflecting an $11 million decrease in gross margin, offset by lower selling, general and administrative expenses principally due to the effects of changes in foreign currency exchange rates of $9 million. In addition, restructuring expenses were $1.3 million and $5.3 million in the first six months of 2016 and 2015, respectively.

Advanced Materials segment earnings were $36.2 million, or 16.6% of sales, for the first six months of fiscal 2014. The decrease in research, development and engineering spending principally reflects lower spending on control and communication systems developments, partially offset by incremental research, development and engineering expense from the DAT acquisition of $4 million. Fiscal 2015 research, development and engineering spending is expected to be in the range of approximately 5% of sales.

~~Segment earnings (operating earnings excluding corporate expenses and other income or expense) for the first six months of fiscal 2015 totaled $102.2~~2016 compared with $41.0 million, or 10.7% of sales, compared with $143.0 million, or 14.3% of sales, for the first six months in fiscal 2014. Excluding restructuring expenses of $6.9 million, segment earnings were $109.1 million, or 11.5%18.3% of sales, for the first six months of ~~2015. Excluding restructuring expenses of $8.7 million, segment earnings were $151.7 million, or 15.2% of sales, for the first six months of 2014.~~

~~Avionics & Controls segment earnings were $28.6 million, or 7.4% of sales, in the first six months of fiscal~~ 2015, ~~and $51.1 million, or 13.5% of sales, in the first six months of fiscal 2014, mainly~~primarily reflecting a $16 million decrease in avionics systems, a $7 million incremental loss from the DAT acquisition, partially offset by a $2 million increase in control and communication systems earnings. Avionics systems earnings were impacted by lower gross profit as explained above and partially offset by lower selling, general and administrative expenses. The increase in earnings from sales of control and communication systems principally reflected lower research, engineering and development expense and selling, general and administrative expenses. Segment restructuringhigher manufacturing costs at engineered materials. Restructuring expenses were ~~$0.5~~$0.9 million and ~~$3.4~~$2.4 million in the first six months of ~~fiscal~~2016 and 2015, ~~and 2014,~~ respectively. ~~The effect of foreign currencies on segment earnings was not material in the first six months of fiscal 2015 compared to the prior-year period.~~

Sensors & Systems segment earnings were $32.1 million, or 9.4% of sales, for the first six months of fiscal 2015 compared with $43.8 million, or 11.3% of sales, for the first six months of fiscal 2014. The decrease in segment earnings principally reflected an $8 million decrease in earnings from sales of connection technologies and a $2 million decrease in advanced sensors due to decreased gross profit as explained above. Additionally, segment restructuring expenses were $4.5 million and $2.2 million in the first six months of fiscal 2015 and 2014, respectively. The effect of foreign currencies on segment earnings was not material in the first six months of fiscal 2015 compared to the prior-year period.

Advanced Materials segment earnings were $41.5 million, or 18.9% of sales, for the first six months of fiscal 2015 compared with $48.2 million, or 20.8% of sales, for the first six months of fiscal 2014, primarily reflecting lower earnings from sales of engineered materials. Earnings from sales of defense technologies improved mainly due to lower restructuring expense. Segment restructuring expense was $1.8 million and $3.1 million in the first six months of fiscal 2015 and 2014, respectively. The effect of foreign currencies was a loss of $2 million in the first six months of fiscal 2015 compared to the prior-year period.

Interest expense for the first six months of fiscal ~~2015~~2016 was ~~$14.4~~$14.5 million compared with ~~$17.1~~$14.0 million for the first six months of ~~fiscal 2014, primarily due to lower interest rates.~~2015.

The income tax rates were ~~21.3%~~11.0% and ~~20.2%~~21.9% for the first six months of fiscal ~~2015~~2016 and ~~2014,~~2015, respectively. In the first six months of ~~2015,~~2016, we recognized $0.8 million of discrete tax expense principally related to the following items. The first item was approximately $2.3 million of discrete tax expense principally related to reconciling the prior year’s income tax return to the income tax provision. The second item was approximately $1.5 million of tax benefits due to the retroactive extension of the U.S. federal research and experimentation credits. In the first six months of 2014, we recognized approximately $1.1$2.2 million of discrete tax benefits principally related to the following items. The first item was ~~approximately $0.6 million of tax benefits due to the release of reserves due to the expiration of~~ a ~~statute of limitations. The second item was a $0.5~~$1.3 million reduction of net deferred income tax liabilities as a result of the enactment of tax laws reducing the U.K. statutory income tax rate. The second item was approximately $1.3 million of discrete tax benefits due to the retroactive extension of the U.S. federal research and experimentation credits. The third item was a $0.4 million tax expense due to income tax return to provision adjustments. In the first six months of 2015, we recognized approximately $0.2 million of discrete tax benefits principally related to the following two items. The first item was approximately $1.5 million of discrete tax benefits due to the retroactive extension of the U.S. federal research and experimentation credits. The second item was a $1.3 million tax expense due to income tax return to provision adjustments. The income tax rate differed from the statutory rate in the first six months of fiscal ~~2015~~2016 and ~~2014,~~2015, as both years benefited from various tax credits and certain foreign interest expense deductions.

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

New orders for the first six months of fiscal ~~2015~~2016 were $1.1 billion compared with ~~$1.0~~$0.9 billion ~~for~~in the ~~same~~prior-year period, reflecting an increase in ~~2014. New orders for the first six months of fiscal 2015 include the acquired backlog of DAT of $175.0 million.~~all three segments. Backlog was ~~$1.3~~$1.4 billion at ~~May~~April 1, 2016, $1.1 billion at March 27, 2015, and $1.2 billion at ~~May~~October 2, ~~2014, and $1.1 billion at October 31, 2014.~~2015.

Cash and cash equivalents at ~~May~~April 1, ~~2015,~~2016, totaled ~~$172.6~~$219.3 million, ~~a decrease~~an increase of ~~$65.5~~$27.9 million from October ~~31, 2014.~~2, 2015. Net working capital decreased to ~~$759.1~~$700.0 million at ~~May~~April 1, ~~2015,~~2016, from ~~$761.4~~$718.2 million at October ~~31, 2014.~~2, 2015. Sources and uses of cash flows from

operating activities principally consisted of cash received from the sale of products and cash payments for material, labor and operating expenses. Cash flows provided by operating activities were ~~$55.7~~$79.9 million and ~~$84.5~~$50.9 million in the first six months of fiscal ~~2015~~2016 and ~~2014,~~2015, respectively. The ~~decrease~~increase in cash flow from operating activities reflected ~~lower net earnings and lower~~higher cash ~~receipts on~~ collections of accounts receivable ~~compared with the prior-year period.~~and lower cash payments for income taxes.

Cash flows used by investing activities were ~~$194.5~~$43.6 million and ~~$65.3~~$196.4 million in the first six months of fiscal ~~2015~~2016 and ~~2014,~~2015, respectively. Cash flows used by investing activities in the first six months of fiscal ~~2015 mainly reflected~~2016 were primarily capital expenditures of ~~$23.4~~$42.5 million, ~~and cash paid~~including the purchase of a building for ~~acquisitions of $171.1 million.~~our DAT operation. Cash flows used by investing activities in the first six months of fiscal ~~2014 mainly reflected~~2015 were primarily capital expenditures of $25.3 million and cash paid for ~~acquisitions~~an acquisition of ~~$44.0~~$171.1 million, net of cash acquired.

Cash flows used by financing activities were $9.2 million in the first six months of fiscal 2016 and ~~capital expenditures~~mainly reflected a $10.0 million repayment of ~~$21.3 million.~~

long-term credit facilities, a $6.2 million repayment of long-term debt, and $12.1 million in shares repurchased, partially offset by $15.0 million in proceeds from our credit facilities and proceeds of $3.5 million from the issuance of common stock under our employee stock plans. Cash flows provided by financing activities were ~~$88.0~~$78.2 million in the first six months of fiscal 2015 and mainly reflected $210.0 million in proceeds from our credit facilities ~~$356.5 million in proceeds from issuance of the 2023 Notes,~~ and ~~$9.3~~$10.1 million from the issuance of common stock under our employee stock plans, partially offset by ~~$127.3~~$127.4 million in shares repurchased, $357.5 million in debt repayment, and $7.9 million of debt issuance costs. Cash flows provided by financing activities were $8.2 million in the first six months of fiscal 2014 and mainly reflected $25.0 million in proceeds from our credit facilities, $25.0a $10.0 million repayment of long-term credit facilities, ~~$19.3~~and a $9.9 million repayment of long-term ~~debt and $23.0 million from the issuance of common stock under our employee stock plans.~~debt.

Capital expenditures, consisting of machinery, equipment and computers, are anticipated to be approximately ~~$50~~$70 million during fiscal ~~2015,~~2016, compared with ~~$45.7~~$49.3 million expended in eleven-month fiscal ~~2014~~2015 (excluding acquisitions).

Total debt at ~~May~~April 1, ~~2015,~~2016, was ~~$844.0~~$880.8 million and consisted of ~~$250.0~~$242.9 million of the U.S. Term Loan, due 2020, ~~Notes, $369.6~~$370.7 million (€330.0 million) of the 2023 Notes, ~~$120.0~~$165.0 million in borrowings under our secured credit facility, ~~$46.0~~$44.6 million in government refundable advances, ~~$58.2~~$57.4 million under capital lease obligations, and $0.2 million under our various foreign currency debt agreements and other debt agreements.

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

This quarterly report on Form 10-Q contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “should” or “will” or the negative of such terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risk factors set forth in “Forward-Looking Statements” and “Risk Factors” in our ~~Annual~~Transition Report on Form 10-K for the fiscal year ended October ~~31, 2014,~~2, 2015, that may cause our or the industry’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You should not place undue reliance on these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance or achievements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included or incorporated by reference into this report are made only as of the date hereof. We do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect future events or developments.

There have been no significant changes in our exposure to market risk during the first ~~six~~three months of fiscal ~~2015.~~2016. A discussion of our exposure to market risk is provided in the Company’s ~~Annual~~Transition Report on Form 10-K for the fiscal year ended October ~~31, 2014.~~2, 2015.

Our principal executive and financial officers evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~May~~April 1, ~~2015.~~2016. Based upon that evaluation, they concluded as of ~~May~~April 1, ~~2015,~~2016, that our disclosure controls and procedures were effective to ensure that information we are required to disclose in the reports that we file under the Exchange Act is recorded, processed, summarized and reported within time periods specified in Securities and Exchange Commission rules and forms. In addition, our principal executive and financial officers concluded as of ~~May~~April 1, ~~2015,~~2016, that our disclosure controls and procedures are also effective to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

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

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

See Note 910 to the Consolidated Financial Statements included in Part 1, Item 1 of this report for information regarding legal proceedings.

Total Number of

Dollar Value

Shares Purchased

of Shares

as Part of

That May Yet

Total Number

Average

Publicly

Be Purchased

of Shares

Price Paid

Announced Plans

Under the Plans

Period

Repurchased

Per Share

or Programs

or Programs

January 31, 2015 to February 27, 2015

20,493

$
114.69

20,493

$
74,762,343

February 28, 2015 to March 27, 2015

207,885

109.22

207,885

252,057,849

March 28, 2015 to May 1, 2015

84,410

114.46

84,410

242,396,591

Total

312,788

312,788

Total Number of

Dollar Value

Shares Purchased

of Shares

as Part of

That May Yet

Total Number

Average

Publicly

Be Purchased

of Shares

Price Paid

Announced Plans

Under the Plans

Period

Repurchased

Per Share

or Programs

January 2, 2016 to January 29, 2016

2,831,350

110,220,429

January 30, 2016 to February 26, 2016

61,777

53.84

2,893,127

106,894,136

February 27, 2016 to April 1, 2016

140,533

62.26

3,033,660

98,144,250

Total

202,310

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

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

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

Large accelerated filer	þ	Accelerated filer	¨

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

In Thousands	Accrued
	Liabilities

Beginning Balance as of October 25, 2013	$	-
Amounts accrued and incurred		20,388
Amounts paid		(11,688	)
Write-off		(2,585	)
Currency translation adjustment		(200	)
Balance as of October 31, 2014	$	5,915

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

	Three Months Ended					Six Months Ended
	April 1,		March 27,			April 1,		March 27,
	2016			2015	Change	2016			2015	Change

GBP to USD		1.4200		1.5240	(6.8)%		1.4670		1.5545	(5.6)%
CAD to USD		0.7337		0.8038	(8.7)%		0.7425		0.8422	(11.8)%
EUR to USD		1.0964		1.1341	(3.3)%		1.0922		1.1905	(8.3)%

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

Current Assets
Cash and cash equivalents	$	23,591		$	1,985		$	2,883		$	144,186		$	-		$	172,645
Accounts receivable, net		69			-			142,018			242,575			-			384,662
Inventories		-			-			193,498			286,090			-			479,588
Income tax refundable		-			-			-			9,394			-			9,394
Deferred income tax benefits		31,918			-			(1,220	)		21,826			-			52,524
Prepaid expenses		185			-			8,302			15,405			-			23,892
Other current assets		74			-			111			3,415			-			3,600
Current assets of businesses held for sale		-			-			25,400			14,999			-			40,399
Total Current Assets		55,837			1,985			370,992			737,890			-			1,166,704

Property, Plant & Equipment, Net		1,397			-			160,832			144,369			-			306,598
Goodwill		-			-			372,021			702,416			-			1,074,437
Intangibles, net		-			-			101,998			373,933			-			475,931
Debt issuance costs, net		5,447			5,715			-			-			-			11,162
Deferred income tax benefits		18,169			-			-			44,590			-			62,759
Other assets		276			-			41,394			(19,845	)		-			21,825
Non-current assets of businesses held for sale		-			-			-			56,952			-			56,952
Amounts Due From (To) Subsidiaries		-			349,959			794,188			-			(1,144,147	)		-
Investment in Subsidiaries		3,162,577			642,929			1,009,042			14,644			(4,829,192	)		-
Total Assets	$	3,243,703		$	1,000,588		$	2,850,467		$	2,054,949		$	(5,973,339	)	$	3,176,368

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
Accounts payable	$	3,536		$	-		$	36,820		$	83,092		$	-		$	123,448
Accrued liabilities		16,247			1,189			87,274			159,783			-			264,493
Current maturities of long-term debt		-			-			862			140			-			1,002
Deferred income tax liabilities		558			-			1			2,292			-			2,851
Federal and foreign income taxes		(1,946	)		(2,621	)		(3,898	)		10,082			-			1,617
Current liabilities of businesses held for sale		-			-			3,902			10,279			-			14,181
Total Current Liabilities		18,395			(1,432	)		124,961			265,668			-			407,592

Credit Facilities		90,000			-			-			30,000			-			120,000
Long-Term Debt, Net		250,000			369,567			57,184			46,203			-			722,954
Deferred Income Tax Liabilities		57,654			-			(17,465	)		97,794			-			137,983
Pension and Post-Retirement Obligations		18,904			-			862			38,202			-			57,968
Other Liabilities		14,680			-			194			15,084			-			29,958
Non-current liabilities of businesses held for sale		-			-			17,740			1,687			-			19,427
Amounts Due To (From) Subsidiaries		1,102,689			-			-			400,768			(1,503,457	)		-
Shareholders' Equity		1,691,381			632,453			2,666,991			1,159,543			(4,469,882	)		1,680,486
Total Liabilities and Shareholders' Equity	$	3,243,703		$	1,000,588		$	2,850,467		$	2,054,949		$	(5,973,339	)	$	3,176,368

In Thousands			Three Months Ended
	Increase (Decrease)		April 1,		March 27,
	From Prior Year		2016		2015
					(Recast)

Avionics & Controls		6.1%	$	198,665	$	187,330
Sensors & Systems		2.6%		176,069		171,538
Advanced Materials		5.7%		115,576		109,342
Total Net Sales			$	490,310	$	468,210

Exhibit
Number		Exhibit Index

~~4.1~~10.1		Indenture dated April 8, 2015 relating to TA Mfg Limited's 3.625% Senior Notes due 2023. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on April 8, 2015 [Commission File Number 1-6357].)

~~10.1~~	*	Agreement for Lease for 4 & 5 Eastbrook Day Centre, Eastbrook Trading Centre among Sheldon Friendly Society, Darchem Engineering Limited and Esterline Technologies Corporation, ~~Fiscal Year 2015 Annual Incentive Compensation Plan~~

~~10.2~~	*	~~Esterline Technologies Corporation Long-Term Performance Share Plan for fiscal years 2015-2017.~~

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

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

~~10.5~~		~~Seventh Amendment~~ dated as of April 9, 2015, among Esterline Technologies Corporation, the foreign borrowers party thereto, the subsidiary guarantors party thereto, Wells Fargo Bank, National Association, as Administrative Agent, and the lenders thereto. (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 13, 2015 [Commission File Number 1-6357].)March 10, 2016.

11		Schedule setting forth computation of basic and diluted earnings per share for the three and six month periods ended ~~May~~April 1, ~~2015,~~2016, and ~~May 2, 2014.~~March 27, 2015.

31.1		Certification of Chief Executive Officer.

31.2		Certification of Chief Financial Officer.

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

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

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase

Dated: ~~June 8, 2015~~May 6, 2016	By:	/s/ Robert D. George
		Robert D. George
		Vice President, Chief Financial Officer, ~~Vice President,~~ and
		Corporate Development
		(Principal Financial Officer)