Note 5 - Accounts Receivable, Concentrations of Credit Risk and Inventories
 3 Months Ended
Nov. 30, 2011
Accounts Receivable Concentrations Of Credit Risk And Inventories
Note 5 —Accounts Receivable, Concentrations of Credit Risk, and Inventories

Accounts Receivable

Our accounts receivable, including retainage, net, were as follows (in thousands):

 
 
November 30,
2011
   
August 31,
2011
 
Trade accounts receivable, net
  $ 704,480     $ 732,134  
Unbilled accounts receivable
    10,366       23,116  
Retainage
    17,271       16,992  
Total accounts receivable, including retainage, net
  $ 732,117     $ 772,242  

Analysis of the change in the allowance for doubtful accounts follows (in thousands):

   
2011
 
Beginning balance, September 1
  $ 22,350  
Increased provision
    886  
Write offs
    (924 )
Recovery
    (345 )
Other
    (3,838 )
Ending balance, November 30
  $ 18,129  

Included in our trade accounts receivable, net at November 30, 2011, and August 31, 2011, were approximately $9.0 million of outstanding invoices due from a local government entity resulting from revenues earned in providing disaster relief, emergency response, and recovery services. The local government entity has challenged the appropriateness of our invoiced amounts, and we are currently in litigation with the government entity. The amounts we ultimately collect could differ materially from amounts currently recorded.

At November 30, 2011, and August 31, 2011, we had approximately $159.1 million and $227.1 million, respectively, included in trade receivables, net, for an air quality control (AQC) project, primarily related to periodic costs and milestone reconciliation invoices. On November 1, 2011, the client presented an assessment challenging $169.6 million of our costs and fee. We believe the assessment to be substantially without merit. We have included in our estimates at completion what we believe to be the probable amounts to be ultimately collected. See our discussion of legal proceedings in Note 12 — Contingencies and Commitments and our discussion of unapproved change orders and claims in Note 16 — Accounting for Claims, Unapproved Change Orders and Incentives on Long-Term Construction Contracts for additional information. During the three months ended November 30, 2011, we received payment of $68.0 million from the client.

Concentrations of Credit

Amounts due from U.S. government agencies or entities were $82.3 million and $64.3 million at November 30, 2011, and August 31, 2011, respectively. Costs and estimated earnings in excess of billings on uncompleted contracts include $236.9 million and $278.6 million at November 30, 2011, and August 31, 2011, respectively, related to the U.S. government agencies and related entities.

Additionally, at November 30, 2011, and August 31, 2011, respectively, we had approximately $159.1 million and $227.1 million in trade receivables, net, related to one client.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined using the first-in-first-out (FIFO) or weighted-average cost methods. Cost includes material, labor, and overhead costs. Inventories are reported net of the allowance for excess or obsolete inventory. Major components of inventories were as follows (in thousands):

 
 
November 30, 2011
   
August 31, 2011
 
 
 
 
Weighted
Average
   
FIFO
   
Total
   
Weighted
Average
   
FIFO
   
Total
 
Raw materials
  $ 19,583     $ 129,244     $ 148,827     $ 16,040     $ 118,516     $ 134,556  
Work in process
    2,920       33,519       36,439       2,878       25,483       28,361  
Finished goods
    78,505       —       78,505       82,127       —       82,127  
Total
  $ 101,008     $ 162,763     $ 263,771     $ 101,045     $ 143,999     $ 245,044