Balance Sheet Accounts

a. Fair Value of Financial Instruments

The accounting standards use a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The following are measured at fair value:



			Fair value measurement at March 31, 2016
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In millions)
Money market funds	$	114.3	$	114.3	$	—	$	—
			Fair value measurement at December 31, 2015
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In millions)
Money market funds	$	141.8	$	141.8	$	—	$	—
			Fair value measurement at November 30, 2015
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In millions)
Money market funds	$	187.2	$	187.2	$	—	$	—

As of March 31, 2016, a summary of cash and cash equivalents and the grantor trust by investment type is as follows:



	Total		Cash and Cash Equivalents		Money Market Funds
	(In millions)
Cash and cash equivalents	$	155.5	$	50.3	$	105.2
Grantor trust (included as a component of other current and noncurrent assets)	9.1		—		9.1
	$	164.6	$	50.3	$	114.3

The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued compensation, and other accrued liabilities, approximate fair value because of their short maturities.

The estimated fair value and principal amount for the Company’s outstanding debt is presented below:



	Fair Value						Principal Amount
	March 31, 2016		December 31, 2015		November 30, 2015		March 31, 2016		December 31, 2015		November 30, 2015
	(In millions)
Term loan	$	91.3	$	92.5	$	93.8	$	91.3	$	92.5	$	93.8
7.125% Second-Priority Senior Secured Notes (“7¹/₈% Notes”)	479.6		479.6		480.1		460.0		460.0		460.0
4¹/₁₆% Debentures	153.6		149.5		164.0		84.6		84.6		84.6
Delayed draw term loan	—		13.0		13.0		—		13.0		13.0
Other debt	0.5		0.6		0.6		0.4		0.5		0.6
	$	725.0	$	735.2	$	751.5	$	636.3	$	650.6	$	652.0

The fair values of the 7¹/₈% Notes and 4¹/₁₆% Debentures were determined using broker quotes that are based on open markets for the Company’s debt securities as of March 31, 2016, December 31, 2015, and November 30, 2015 (both Level 2 securities). The fair value of the term loans and other debt was determined to approximate carrying value.

b. Accounts Receivable



	March 31, 2016		December 31, 2015		November 30, 2015
	(In millions)
Billed	$	123.8	$	114.1	$	90.4
Unbilled	58.0		54.8		80.6
Total receivables under long-term contracts	181.8		168.9		171.0
Other receivables	0.5		0.6		0.5
Accounts receivable	$	182.3	$	169.5	$	171.5

As of March 31, 2016, December 31, 2015, and November 30, 2015, unbilled receivables included $37.2 million, $36.8 million, and $33.7 million, respectively, of amounts for overhead disallowances or billing decrements that primarily represent estimates of potential overhead costs which may not be successfully negotiated for allowability and collected after one year.

c. Inventories



	March 31, 2016			December 31, 2015			November 30, 2015
	(In millions)
Long-term contracts at average cost	$	629.2		$	543.5		$	505.8
Progress payments	(459.8		)	(388.5		)	(349.6		)
Total long-term contract inventories	169.4			155.0			156.2
Total other inventories	1.2			1.2			1.3
Inventories	$	170.6		$	156.2		$	157.5

d. Other Current Assets, net



	March 31, 2016		December 31, 2015		November 30, 2015
	(In millions)
Recoverable from the U.S. government for Rocketdyne Business integration costs (see Note 4(f))	$	11.9	$	11.9	$	11.9
Prepaid expenses	10.7		11.9		10.7
Recoverable from the U.S. government for Competitive Improvement Program severance obligations (see Note 9)	10.0		9.1		9.5
Receivables, net	14.4		10.6		7.2
Income taxes receivable	1.6		1.6		2.9
Indemnification receivable from UTC	15.7		15.7		15.7
Other	6.5		8.4		6.5
Other current assets, net	$	70.8	$	69.2	$	64.4

e. Property, Plant and Equipment, net



	March 31, 2016			December 31, 2015			November 30, 2015
	(In millions)
Land	$	71.4		$	71.4		$	71.3
Buildings and improvements	291.6			290.1			287.6
Machinery and equipment	513.4			510.6			509.8
Construction-in-progress	35.0			32.5			34.9
	911.4			904.6			903.6
Less: accumulated depreciation	(552.0		)	(541.3		)	(537.8		)
Property, plant and equipment, net	$	359.4		$	363.3		$	365.8

f. Other Noncurrent Assets, net



	March 31, 2016		December 31, 2015		November 30, 2015
	(In millions)
Recoverable from the U.S. government for Rocketdyne Business integration costs	$	18.7	$	21.2	$	22.4
Deferred financing costs	2.0		2.1		2.3
Recoverable from the U.S. government for Competitive Improvement Program severance obligations (see Note 9)	1.7		3.2		2.8
Recoverable from the U.S. government for conditional asset retirement obligations	18.5		17.8		17.5
Grantor trusts	10.2		10.3		10.7
Income taxes receivable	7.9		7.9		7.9
Notes receivable, net	9.0		9.0		9.0
Other	11.1		10.1		9.4
Other noncurrent assets, net	$	79.1	$	81.6	$	82.0

The current and noncurrent Rocketdyne Business integration costs capitalized as of March 31, 2016, December 31, 2015, and November 30, 2015 totaled $30.6 million, $33.1 million, and $34.3 million, respectively. These integration costs are reimbursable by the U.S. government upon its audit and approval that the Company's planned integration savings will exceed its restructuring costs by a factor of at least two to one. In December 2014, the Company was informed that the Defense Contract Audit Agency had completed its audit of the Company’s restructuring proposal and found that the Company had achieved the required minimum two to one savings to restructuring cost ratio. Actual recovery of the previously deferred integration costs will take place after the determination from the Under Secretary of Defense that the audited restructuring savings exceed the costs by a factor of two to one and final execution of an Advance Agreement with the Defense Contract Management Agency. The Company believes these final two actions will be completed in fiscal 2016. The Company reviews on a quarterly basis the probability of recovery of these costs.

g. Other Current Liabilities



	March 31, 2016		December 31, 2015		November 30, 2015
	(In millions)
Accrued compensation and employee benefits	$	70.1	$	90.4	$	90.6
Income taxes	14.8		20.3		15.5
Competitive improvement program obligations (see Note 9)	10.5		9.4		10.7
Payable to UTC primarily for Transition Service Agreements	1.1		1.9		1.9
Interest payable	5.4		12.9		11.7
Contract loss provisions	8.4		9.1		9.3
Other	70.2		59.1		61.6
Other current liabilities	$	180.5	$	203.1	$	201.3

h. Other Noncurrent Liabilities



	March 31, 2016		December 31, 2015		November 30, 2015
	(In millions)
Conditional asset retirement obligations	$	29.8	$	29.5	$	29.3
Pension benefits, non-qualified	17.5		17.6		17.9
Deferred compensation	12.0		11.5		11.9
Deferred revenue	13.7		13.8		13.9
Competitive improvement program obligations (see Note 9)	2.0		3.2		3.1
Other	19.0		19.6		18.3
Other noncurrent liabilities	$	94.0	$	95.2	$	94.4

i. Accumulated Other Comprehensive Loss, Net of Income Taxes

Changes in accumulated other comprehensive loss by components related to the Company’s retirement benefit plans are as follows:



	Actuarial Losses, Net			Prior Service Credits, Net			Total
	(In millions)
November 30, 2015	$	(342.6	)	$	0.9		$	(341.7	)
Actuarial losses, net of $4.6 million of income taxes	(8.6		)	—			(8.6		)
Amortization of actuarial losses and prior service credits, net of $1.7 million of income taxes	3.4			(0.1		)	3.3
December 31, 2015	(347.8		)	0.8			(347.0		)
Amortization of actuarial losses and prior service credits, net of $5.8 million of income taxes	9.3			(0.2		)	9.1
March 31, 2016	$	(338.5	)	$	0.6		$	(337.9	)

j. Redeemable Common Stock

The Company inadvertently failed to register with the SEC the issuance of certain of its common shares in its defined contribution 401(k) employee benefit plan (the “Plan”). As a result, certain Plan participants who purchased such securities pursuant to the Plan may have the right to rescind certain of their purchases for consideration equal to the purchase price paid for the securities (or if such security has been sold, to receive consideration with respect to any loss incurred on such sale) plus interest from the date of purchase. As of March 31, 2016, December 31, 2015, and November 30, 2015, the Company has classified 0.1 million shares as redeemable common stock because the redemption features are not within the control of the Company. The Company may also be subject to civil and other penalties by regulatory authorities as a result of the failure to register these shares. These shares have always been treated as outstanding for financial reporting purposes. In June 2008, the Company filed a registration statement on Form S-8 to register future transactions in the Company's stock fund in the Plan. During the first quarter of fiscal 2016, December 2015, and the first quarter of fiscal 2015, the Company recorded $(0.1) million, $0.4 million, and ($0.7) million, respectively, for realized (gains)/losses and interest associated with this matter.

k. Treasury Stock

During fiscal 2014, the Company repurchased 3.5 million of its common shares at a cost of $64.5 million. The Company reflects stock repurchases in its financial statements on a “settlement” basis.