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 in 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 September 30, 2017
	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	$	122.1	$	122.1	$	—	$	—
			Fair value measurement at December 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	$	328.5	$	328.5	$	—	$	—

As of September 30, 2017, the carrying amounts 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	$	392.5	$	277.3	$	115.2
Grantor trust (included as a component of other current and noncurrent assets)	6.9		—		6.9
	$	399.4	$	277.3	$	122.1

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
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
	(In millions)
Term loan	$	375.0	$	390.0	$	375.0	$	390.0
2¹/₄% Notes	446.0		294.9		300.0		300.0
4¹/₁₆% Debentures (1)	—		70.8		—		35.6
	$	821.0	$	755.7	$	675.0	$	725.6

_______

(1)

In December 2016, the Company notified holders of its 4¹/₁₆% Debentures that the Company would redeem, on February 3, 2017, all of their 4¹/₁₆% Debentures at a purchase price equal to 100% of the principal amount of the 4¹/₁₆% Debentures to be redeemed, plus any accrued and unpaid interest. In January 2017, $35.6 million of the 4¹/₁₆% Debentures (the entire amount outstanding as of December 31, 2016) were converted to 3.9 million shares of common stock.

The fair values of the 2¹/₄% Notes and 4¹/₁₆% Debentures were determined using broker quotes that are based on open markets for the Company’s debt securities (Level 2 securities). The term loan bore interest at variable rates, which adjusted based on market conditions, and its carrying value approximated fair value.

b. Accounts Receivable



	September 30, 2017			December 31, 2016
	(In millions)
Billed	$	145.4		$	55.7
Unbilled	177.6			124.1
Reserve for overhead rate disallowance	(40.8		)	(44.5		)
Total receivables under long-term contracts	282.2			135.3
Other receivables	0.9			1.1
Accounts receivable	$	283.1		$	136.4

c. Inventories



	September 30, 2017			December 31, 2016
	(In millions)
Long-term contracts at average cost	$	605.0		$	551.9
Progress payments	(445.5		)	(368.2		)
Total long-term contract inventories	159.5			183.7
Total other inventories	1.3			1.4
Inventories	$	160.8		$	185.1

d. Other Current Assets, net



	September 30, 2017		December 31, 2016
	(In millions)
Recoverable from the U.S. government for acquisition related integration costs	$	11.9	$	11.9
Recoverable from the U.S. government for competitive improvement program obligations (see Note 10)	20.7		7.6
Prepaid expenses	17.0		16.5
Cost-share and other receivables, net	10.7		17.8
Income taxes receivable	5.1		26.8
Indemnification receivable from United Technologies Corporation, net	0.2		5.5
Other	5.4		5.6
Other current assets, net	$	71.0	$	91.7

e. Property, Plant and Equipment, net



	September 30, 2017			December 31, 2016
	(In millions)
Land	$	71.2		$	71.4
Buildings and improvements	317.0			304.2
Machinery and equipment	542.7			540.8
Construction-in-progress	20.5			30.4
	951.4			946.8
Less: accumulated depreciation	(601.8		)	(580.8		)
Property, plant and equipment, net	$	349.6		$	366.0

f. Other Noncurrent Assets, net



	September 30, 2017		December 31, 2016
	(In millions)
Recoverable from the U.S. government for conditional asset retirement obligations	$	21.1	$	20.3
Recoverable from the U.S. government for restructuring costs	27.1		12.8
Recoverable from the U.S. government for acquisition related integration costs	2.0		10.9
Recoverable from the U.S. government for competitive improvement program obligations (see Note 10)	22.9		1.3
Deferred financing costs	2.8		3.4
Grantor trusts	26.6		16.6
Income taxes receivable	10.7		10.8
Notes receivable, net	9.0		9.0
Other	4.5		5.1
Other noncurrent assets, net	$	126.7	$	90.2

g. Other Current Liabilities



	September 30, 2017		December 31, 2016
	(In millions)
Accrued compensation and employee benefits	$	102.5	$	105.7
Contract related liabilities	47.4		24.7
Competitive improvement program obligations (see Note 10)	21.3		7.6
Income taxes payable	0.3		2.1
Interest payable	2.2		4.1
Contract loss provisions	4.5		6.8
Other	14.4		16.8
Other current liabilities	$	192.6	$	167.8

h. Other Noncurrent Liabilities



	September 30, 2017		December 31, 2016
	(In millions)
Conditional asset retirement obligations	$	40.3	$	30.6
Pension benefits, non-qualified	17.1		17.5
Deferred compensation	31.1		19.8
Deferred revenue	12.8		13.3
Competitive improvement program obligations (see Note 10)	22.9		1.3
Uncertain income tax positions	24.4		28.4
Other	13.4		13.1
Other noncurrent liabilities	$	162.0	$	124.0

i. Accumulated Other Comprehensive Loss, Net of Income Taxes

Changes in accumulated other comprehensive loss by components, net of income taxes:



	Actuarial Losses, Net			Prior Service Credits, Net		Total
	(In millions)
December 31, 2016	$	(303.2	)	$	0.2	$	(303.0	)
Amortization of actuarial losses and prior service credits, net of $18.5 million of income taxes	29.1			—		29.1
September 30, 2017	$	(274.1	)	$	0.2	$	(273.9	)

j. Redeemable Common Stock

On May 30, 2017, the Company made a registered rescission offer to buy back unregistered shares from eligible Plan participants at the original purchase price plus interest, or to reimburse eligible Plan participants for losses they may have incurred if their shares had been sold. The registered rescission offer expired on June 30, 2017, and settlement payments of $3.5 million under the offer were completed in the third quarter of fiscal 2017 (see Note 13).

The Company inadvertently failed to register with the Securities Exchange Commission ("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 had 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. 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.