Note 6. 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:


	Total		Fair value measurement at August 31, 2013
	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	$	173.3	$	173.3	$	—	$	—


	Total		Fair value measurement at November 30, 2012
	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	$	166.0	$	166.0	$	—	$	—

As of August 31, 2013, 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	$	181.9	$	21.3	$	160.6
Grantor trust (included as a component of other current and noncurrent assets)		12.7		—		12.7

	$	194.6	$	21.3	$	173.3

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
	August 31, 2013		November 30, 2012		August 31, 2013		November 30, 2012
	(In millions)
Term loan	$	45.6	$	47.5	$	45.6	$	47.5
7¹⁄₈% Notes		484.5		—		460.0		—
4¹⁄₁₆% Debentures		339.7		246.0		198.4		200.0
Other debt		1.1		1.2		1.1		1.2

	$	870.9	$	294.7	$	705.1	$	248.7

The fair values of the 7¹⁄₈% Notes and 4¹⁄₁₆% Debentures were determined using broker quotes that are based on open markets of the Company’s debt securities as of August 31, 2013 and November 30, 2012 (both Level 2 securities). The fair value of the term loan and other debt was determined to approximate carrying value.

b. Accounts Receivable


	August 31, 2013		November 30, 2012
	(In millions)
Billed	$	73.3	$	49.4
Unbilled		145.3		62.0

Total receivables under long-term contracts		218.6		111.4
Other receivables		0.7		0.1

Accounts receivable	$	219.3	$	111.5

c. Inventories


	August 31, 2013			November 30, 2012
	(In millions)
Long-term contracts at average cost	$	335.7		$	256.4
Progress payments		(208.8	)		(209.9	)

Total long-term contract inventories		126.9			46.5
Total other inventories		1.0			0.4

Inventories	$	127.9		$	46.9

d. Property, Plant and Equipment, net


	August 31, 2013			November 30, 2012
	(In millions)
Land	$	67.2		$	29.6
Buildings and improvements		220.5			158.5
Machinery and equipment		465.9			343.5
Construction-in-progress		55.7			36.9

		809.3			568.5
Less: accumulated depreciation		(444.7	)		(424.6	)

Property, plant and equipment, net	$	364.6		$	143.9

e. Other Noncurrent Assets, net


	August 31, 2013		November 30, 2012
	(In millions)
Deferred financing costs	$	19.3	$	7.0
Recoverable from the U.S. government for conditional asset retirement obligations		15.1		13.8
Indemnification receivable from UTC		9.5		—
Grantor trust		11.6		12.1
Other		10.5		18.2

Other noncurrent assets, net	$	66.0	$	51.1

f. Other Current Liabilities


	August 31, 2013		November 30, 2012
	(In millions)
Accrued compensation and employee benefits	$	91.2	$	49.6
Interest payable		19.2		6.3
Payable to UTC		13.7		—
Contract loss provisions		8.5		5.7
Legal settlements		2.7		7.0
Other		57.1		34.7

Other current liabilities	$	192.4	$	103.3

g. Other Noncurrent Liabilities


	August 31, 2013		November 30, 2012
	(In millions)
Conditional asset retirement obligations	$	22.5	$	20.8
Pension benefits, non-qualified		18.6		18.9
Deferred compensation		9.3		8.4
Deferred revenue		8.2		8.6
Legal settlements		0.3		2.3
Other		9.9		9.5

Other noncurrent liabilities	$	68.8	$	68.5

h. Accumulated Other Comprehensive Loss, Net of Income Taxes


	August 31, 2013			November 30, 2012
	(In millions)
Actuarial losses, net	$	(421.6	)	$	(491.0	)
Prior service credits		4.1			4.7

Accumulated other comprehensive loss, net of income taxes	$	(417.5	)	$	(486.3	)

During the three and nine months ended August 31, 2013, the Company reclassified $23.0 million and $68.8 million, respectively, from accumulated other comprehensive loss to retirement benefit expense. During the three and nine months ended August 31, 2012, the Company reclassified $14.6 million and $44.1 million, respectively, from accumulated other comprehensive loss to retirement benefit expense.