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What changed in BWX Technologies, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of BWX Technologies, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+243 added−283 removedSource: 10-K (2024-02-27) vs 10-K (2023-02-23)

Top changes in BWX Technologies, Inc.'s 2023 10-K

243 paragraphs added · 283 removed · 210 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

80 edited+3 added−19 removed115 unchanged
Biggest changeGovernmental Regulations and Environmental Matters Governmental Regulations Many aspects of our operations and properties are affected by political developments and are subject to both domestic and foreign governmental regulations, including those relating to: • possessing and processing special nuclear materials; • workplace health and safety; • constructing and equipping electric power facilities; • currency conversions and repatriation; • taxation of earnings; and • protecting the environment. 11 Table of Contents We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our operations.
Biggest changeIn conjunction with the spin-off, claims and liabilities associated with the asbestos personal injury, property damage and indirect property damage claims mentioned above have been expressly assumed by BWE pursuant to the master separation agreement between us and BWE. 10 Table of Contents Governmental Regulations and Environmental Matters Governmental Regulations Many aspects of our operations and properties are affected by political developments and are subject to both domestic and foreign governmental regulations, including those relating to: • possessing and processing special nuclear materials; • workplace health and safety; • constructing and equipping electric power facilities; • currency conversions and repatriation; • taxation of earnings; and • protecting the environment.
Statements and assumptions regarding expectations and projections of specific projects, our future backlog, revenues, income and capital spending, strategic investments, acquisitions or divestitures, return of capital activities or margin improvement initiatives are examples of forward-looking statements.
Statements and assumptions regarding expectations and projections of specific projects, our future backlog, revenues, income, capital spending, strategic investments, acquisitions or divestitures, return of capital activities or margin improvement initiatives are examples of forward-looking statements.
Our compensation programs are designed to ensure we remain competitive relative to the markets in which we operate; provide meaningful value to employees and those they care for; incentivize the short- and long-term success of BWXT and its stakeholders through programs with consistent performance measures throughout the organization; and recognize employees who make outstanding contributions to the organization.
Our compensation programs are further designed to ensure we remain competitive relative to the markets in which we operate; provide meaningful value to employees and those they care for; incentivize the short- and long-term success of BWXT and its stakeholders through programs with consistent performance measures throughout the organization; and recognize employees who make outstanding contributions to the organization.
This segment also manufactures and supplies products for diagnostic imaging and radiotherapeutic treatments. It is also a partner for contract development and manufacturing services for life science and pharmaceutical companies. Among its offerings is the manufacture of medical radioisotopes, radiopharmaceuticals and medical devices, as well as partnerships with life science and pharmaceutical companies developing new drugs.
This segment also manufactures and supplies products for diagnostic imaging and radiotherapeutic treatments and is a partner for contract development and manufacturing services for life science and pharmaceutical companies. Among its offerings is the manufacture of medical radioisotopes, radiopharmaceuticals and medical devices, as well as partnerships with life science and pharmaceutical companies developing new drugs.
This segment competes with a number of nuclear medicine companies which include, but are not limited to, Curium, Lantheus Holdings, Inc. and Jubilant DraxImage Inc. The primary bases of competition in this area are quality, distribution capabilities, price and reliability.
This segment competes with a number of nuclear medicine companies which include, but are not limited to, Curium Pharma, Lantheus Holdings, Inc. and Jubilant DraxImage Inc. The primary bases of competition in this area are quality, distribution capabilities, price and reliability.
The scope of the protection may be limited, may be subject to conditions and may not be supported by adequate insurance or other means of financing. In addition, we may have difficulty enforcing our contractual rights with others following a material loss.
The scope of the protection may be limited, may be subject to conditions and may not be supported by adequate insurance or other means of risk financing. In addition, we may have difficulty enforcing our contractual rights with others following a material loss.
Lawrence Livermore National Security, LLC, a limited liability company formed in 2006 by the University of California, Bechtel National, Inc., Amentum and BWXT Government Group, Inc., manages and operates Lawrence Livermore National Laboratory located in Livermore, California.
Lawrence Livermore National Security, LLC, a limited liability company formed by the University of California, Bechtel National, Inc., Amentum and BWXT Government Group, Inc., manages and operates Lawrence Livermore National Laboratory located in Livermore, California.
These are generally cost-reimbursable contracts that include an award fee that is primarily based on annual performance, with monthly provisional fee payments and annual true-up payments. Depending on the type of contract, the contractor may be required to supply working capital, which is reimbursed by the U.S. Government through regular invoicing.
These are generally cost-reimbursable contracts that include an award fee that is primarily based on annual performance, with periodic provisional fee payments and annual true-up payments. Depending on the type of contract, the contractor may be required to supply working capital, which is reimbursed by the U.S. Government through regular invoicing.
This segment's capabilities include: • steam generation and separation equipment design and development; • thermal-hydraulic design of reactor plant components; • in-plant inspection, maintenance and modification services; • nuclear component modification and replacement; • commercial nuclear fuel manufacturing and design; • nuclear fuel handling system design, manufacturing, delivery, installation and commissioning; • containers for the storage of spent nuclear fuel and other high-level waste; • structural and thermal-hydraulic design and vibration analysis for heat exchangers; • structural component design for precision manufacturing; • materials expertise in high-strength, low-alloy steels and nickel-based materials; 2 Table of Contents • material procurement of tubing, forgings and weld wire; and • metallographic and chemical analysis.
This segment's capabilities include: • steam generation and separation equipment design and development; • thermal-hydraulic design of reactor plant components; • in-plant inspection, maintenance and modification services; • nuclear component modification and replacement; • commercial nuclear fuel manufacturing and design; • nuclear fuel handling system design, manufacturing, delivery, installation and commissioning; • containers for the storage of spent nuclear fuel and other high-level waste; • structural and thermal-hydraulic design and vibration analysis for heat exchangers; • structural component design for precision manufacturing; • materials expertise in high-strength, low-alloy steels and nickel-based materials; • material procurement of tubing, forgings and weld wire; and • metallographic and chemical analysis.
Government customer accounted for more than 10% of our consolidated revenues in the years ended December 31, 2022, 2021 or 2020. Raw Materials and Suppliers Our operations use raw materials, such as carbon and alloy steels in various forms and components and accessories for assembly, which are available from numerous sources.
Government customer accounted for more than 10% of our consolidated revenues in the years ended December 31, 2023, 2022 or 2021. Raw Materials and Suppliers Our operations use raw materials, such as carbon and alloy steels in various forms and components and accessories for assembly, which are available from numerous sources.
We charge the costs of research and development unrelated to specific contracts as incurred. Excluding customer-sponsored research and development, the majority of our activities in this area for the years ended December 31, 2022, 2021 and 2020 related to the development of technologies in the area of medical and industrial radioisotopes, radiopharmaceuticals, additive and autonomous manufacturing and advanced reactors.
We charge the costs of research and development unrelated to specific contracts as incurred. Excluding customer-sponsored research and development, the majority of our activities in this area for the years ended December 31, 2023, 2022 and 2021 related to the development of technologies in the area of medical and industrial radioisotopes, radiopharmaceuticals, additive and autonomous manufacturing and advanced reactors.
Army Corps of Engineers ("Army Corps") to clean up radioactive waste at the Shallow Land Disposal Area located in Parks Township, Armstrong County, Pennsylvania (the "SLDA"), consistent with the Memorandum of Understanding between the Nuclear Regulatory Commission and the United States Army Corps of Engineers 12 Table of Contents for Coordination on Cleanup and Decommissioning of the Formerly Utilized Sites Remedial Action Program Sites with NRC-Licensed Facilities, dated July 5, 2001 (the "MOU").
Army Corps of Engineers ("Army Corps") to clean up radioactive waste at the Shallow Land Disposal Area located in Parks Township, Armstrong County, Pennsylvania (the "SLDA"), consistent with the Memorandum of Understanding between the Nuclear Regulatory Commission and the United States Army Corps of Engineers for Coordination on Cleanup and Decommissioning of the Formerly Utilized Sites Remedial Action Program Sites with NRC-Licensed Facilities, dated July 5, 2001 (the "MOU").
Our goal is to be the employer of choice within our industry and the communities in which we operate. We focus on maintaining a solid pipeline of talent throughout our organization and continually developing the capabilities and skills needed for the future of our business.
Our goal is to be the employer of choice within our industry and the communities in which we operate. We focus on maintaining a solid pipeline of talent throughout our organization and developing the capabilities and skills in our workforce needed for the future of our business.
The Price-Anderson Act limits the public liability of U.S. manufacturers and operators of licensed nuclear facilities and other parties who may be liable in respect of, and indemnifies them against, all claims in excess of a certain amount.
The Price-Anderson Act limits the public liability of U.S. manufacturers and operators of licensed nuclear facilities and other parties who may be liable in respect of, and indemnifies them against, all claims in excess of a statutory amount.
Risks that we have frequently found difficult to cost-effectively insure against include, but are not limited to, property losses from wind, flood and earthquake events, nuclear hazards and war, pollution liability, liabilities related to occupational health exposures (including asbestos), professional liability/errors and omissions coverage, the failure, misuse or unavailability of our information technology systems, the failure of security measures designed to protect our information technology systems from security breaches and liability related to risk of loss of our work in progress.
Risks that we have frequently found difficult to cost-effectively insure against include, but are not limited to, property losses from wind, flood and earthquake events, nuclear hazards, war, pollution liability (including per- and polyfluoroalkyl substances), liabilities related to occupational health exposures (including asbestos), professional liability, errors and omissions coverage, the failure, misuse or unavailability of our information and/or operational technology systems, the failure of security measures designed to protect our information technology systems from security breaches and liability related to risk of loss of our work in progress.
Providing comprehensive, competitive, and affordable retirement, health, income protection and other benefits is also central to our attraction and retention strategy. We offer health benefits which include various medical/pharmacy plan options, health savings accounts for those in high deductible health plans, and flexible spending accounts for both health care and dependent care are also available to employees.
Providing comprehensive, competitive, and affordable retirement, healthcare, income protection and other benefits is also central to our attraction and retention strategy. We offer health benefits which include various medical/pharmacy plan options, health savings accounts for those in high deductible health plans, and flexible spending accounts for both health care and dependent care are also available to employees, where applicable.
In pursuit of an injury-free workplace, we constantly monitor and assess all injuries and "near misses" for any lessons we can learn and leverage to reduce the risk inherent in occupational activities. In addition to providing regular 8 Table of Contents safety training to our employees, we routinely conduct safety culture surveys to identify employee concerns.
In pursuit of an injury-free workplace, we constantly monitor and assess all injuries and "near misses" for any lessons we can learn and leverage to reduce the risk inherent in occupational activities. In addition to providing regular safety training to our employees, we routinely conduct safety culture surveys to identify employee concerns.
Newport News Nuclear BWXT – Los Alamos, LLC, a limited liability company formed in 2017 by Stoller Newport News Nuclear, Inc., a subsidiary of Huntington Ingalls Industries, Inc.'s Technical Solutions division, and BWXT Technical Services Group, Inc.
Newport News Nuclear BWXT – Los Alamos, LLC, a limited liability company formed by Stoller Newport News Nuclear, Inc., a subsidiary of Huntington Ingalls Industries, Inc.'s Technical Solutions division, and BWXT Technical Services Group, Inc.
Government-owned nuclear facilities. Many of our government contracts in this area are bid as a joint venture with one or more companies, in which we have a majority or a minority position. The performance of our joint venture partners can impact our reputation and our future competitive position with respect to that particular project and customer.
Many of our government contracts in this area are bid as a joint venture with one or more companies, in which we have a majority or a minority position. The performance of our joint venture partners can impact our reputation and our future competitive position with respect to that particular project and customer.
Diversity, Equity and Inclusion We value the diversity of our employees and are committed to providing an engaging and inclusive atmosphere for all employees that promotes productivity and encourages creativity and innovation. We maintain a Diversity and Inclusion ("D&I") Committee comprised of a rotating group of employees representing various job functions, levels and backgrounds.
Diversity, Equity and Inclusion We value the diversity of our employees and are committed to providing an engaging and inclusive atmosphere for all that promotes productivity and encourages creativity and innovation. We maintain a Diversity and Inclusion ("D&I") 7 Table of Contents Committee comprised of a rotating group of employees representing various job functions, levels and backgrounds.
BWXT does retain some level of risk in the event of future changes to the legal landscape in these countries regarding international third-party nuclear liability. In 2008, the U.S. ratified the Convention on Supplementary Compensation for Nuclear Damage ("CSC") with the International Atomic Energy Agency.
BWXT does retain some level of risk in the event of future changes to the legal landscape in these countries regarding international third-party nuclear liability. 9 Table of Contents In 2008, the U.S. ratified the Convention on Supplementary Compensation for Nuclear Damage ("CSC") with the International Atomic Energy Agency.
We have also posted on our website our: Corporate Governance Principles; Code of Business Conduct; Code of Ethics for our Chief Executive Officer and Senior Financial Officers; Board of Directors Conflicts of Interest Policies and Procedures; Amended and Restated Bylaws; and charters for the Audit and Finance, Governance and Compensation Committees of our Board of Directors.
We have also posted on our website our: Corporate Governance Principles; Code of Business Conduct; Code of Ethics for our Chief Executive Officer and Senior Financial Officers; Board of Directors Conflicts of Interest Policies and Procedures; Amended and Restated Bylaws; and charters for the Audit and Finance, Governance and Compensation Committees of our Board of Directors. 13 Table of Contents
This participation is customarily accomplished through the participation in joint ventures with other contractors for 10 Table of Contents any given facility. These activities involve, among other things, handling nuclear devices and their components. Insurable liabilities arising from these sites are rarely protected by our or our partners' corporate insurance programs.
This participation is customarily accomplished through the participation in joint ventures with other contractors for any given facility. These activities involve, among other things, handling nuclear devices and their components. Insurable liabilities arising from these sites are rarely protected by our or our partners' corporate insurance programs.
To protect against liability from claims brought by third parties, we seek to be insured under the utility customer's nuclear liability policies and have the benefit of the indemnity and limitation of any applicable liability provision of the Price-Anderson Act.
To protect against liability from claims brought by third parties in the U.S., we seek to be insured under the utility customer's nuclear liability policies and have the benefit of the indemnity and limitation of any applicable liability provision of the Price-Anderson Act.
Our Government Operations and Commercial Operations segments rely on a limited number of suppliers, including single-source suppliers, for certain materials used in its products; however, we believe the suppliers of these materials are reliable. Additionally, we and the U.S. Government expend significant effort to monitor and maintain the supplier base for our Government Operations segment.
Our Government Operations and Commercial Operations segments rely on a limited number of suppliers, including single-source suppliers, for certain materials used in our products; however, we believe the suppliers of these materials are 6 Table of Contents reliable. Additionally, we and the U.S. Government expend significant effort to monitor and maintain the supplier base for our Government Operations segment.
Of our total environmental accruals at December 31, 2022 and 2021, $10.8 million and $9.8 million, respectively, were included in current liabilities. Inherent in the estimates of these accruals are our expectations regarding the levels of contamination, decommissioning costs and recoverability from other parties, which may vary significantly as decommissioning activities progress.
Of our total environmental accruals at December 31, 2023 and 2022, $10.6 million and $10.8 million, respectively, were included in current liabilities. Inherent in the estimates of these accruals are our expectations regarding the levels of contamination, decommissioning costs and recoverability from other parties, which may vary significantly as decommissioning activities progress.
Government, utilities and other customers in the nuclear power and radiopharmaceutical industries. Our largest and primary customer of our Government Operations segment is the U.S. Government. During the years ended December 31, 2022, 2021 and 2020, the U.S. Government represented approximately 76%, 76% and 77% of our total consolidated revenues, respectively. No individual non-U.S.
Government, utilities and other customers in the nuclear power and radiopharmaceutical industries. Our largest and primary customer of our Government Operations segment is the U.S. Government. During the years ended December 31, 2023, 2022 and 2021, the U.S. Government represented approximately 75%, 76% and 76% of our total consolidated revenues, respectively. No individual non-U.S.
We generally account for our investments in joint ventures under the equity method of accounting. Certain of our Government Operations segment unconsolidated joint ventures are described below. • Los Alamos Legacy Cleanup Contract.
We generally account 5 Table of Contents for our investments in joint ventures under the equity method of accounting. Certain of our Government Operations segment unconsolidated joint ventures are described below. • Los Alamos Legacy Cleanup Contract.
This segment competes with a number of companies specializing in nuclear capabilities including, but not limited to, Framatome, Cameco Corporation, Doosan Heavy Industries & Construction Co., Ltd., E.S. Fox Limited, AECON Group Inc., Bechtel National, Inc., Westinghouse Electric Corporation and SNC-Lavalin Group, Inc.
This segment competes with a number of companies specializing in nuclear capabilities including, but not limited to, Framatome, Cameco Corporation, Doosan Heavy Industries & Construction Co., Ltd., E.S. Fox Limited, AECON Group Inc., Bechtel National, Inc., Westinghouse Electric Corporation and AtkinsRéalis.
In addition, compliance with existing environmental regulations necessitated capital expenditures of $1.6 million, $3.1 million and $1.2 million in the years ended December 31, 2022, 2021 and 2020, respectively. We expect to spend another $3.3 million on such capital expenditures over the next five years.
In addition, compliance with existing environmental regulations necessitated capital expenditures of $0.7 million, $1.6 million and $3.1 million in the years ended December 31, 2023, 2022 and 2021, respectively. We expect to spend another $2.2 million on such capital expenditures over the next five years.
We expect to recognize approximately 42% of the revenue associated with our backlog by the end of 2023, with the remainder to be recognized thereafter. Major new awards from the U.S. Government are typically received following Congressional approval of appropriations for the U.S.
We expect to recognize approximately 51% of the revenue associated with our backlog by the end of 2024, with the remainder to be recognized thereafter. Major new awards from the U.S. Government are typically received following Congressional approval of appropriations for the U.S.
With our specialized capabilities of full life-cycle management of special materials, facilities and technologies, we believe this segment is well-positioned to continue participating in the ongoing cleanup, operation and management of critical government-owned nuclear sites, laboratories and manufacturing complexes maintained by the DOE, NASA and other federal agencies.
With our specialized capabilities of full life-cycle management of special materials, facilities and technologies, we believe that we are well-positioned to continue participating in the ongoing cleanup, operation and management of critical government-owned nuclear sites, laboratories and manufacturing complexes maintained by the DOE, NASA and other federal agencies.
In addition, significant portions of the designs, processing and final product are classified by the U.S. Government, requiring applicable personnel to obtain and maintain U.S. Government security clearances. 5 Table of Contents This segment also engages in the management and operation of U.S. Government facilities and the delivery of environmental remediation services (decontamination and decommissioning) associated with U.S.
In addition, significant portions of the designs, processing and final product are classified by the U.S. Government, requiring applicable personnel to obtain and maintain U.S. Government security clearances. This segment also engages in the management and operation of U.S. Government facilities and the delivery of environmental remediation services (decontamination and decommissioning) associated with U.S. Government-owned nuclear facilities.
Contractual arrangements for customer-sponsored research and development can vary and include contracts, cost-sharing arrangements, cooperative agreements and grants. See Note 1 to our consolidated financial statements included in this Report for further information on research and development.
Contractual arrangements for customer-sponsored research and development can vary and include contracts, cost-sharing arrangements, cooperative agreements and grants. 8 Table of Contents See Note 1 to our consolidated financial statements included in this Report for further information on research and development.
We provided financial assurance totaling $68.1 million and $61.8 million during the years ended December 31, 2022 and 2021, respectively, with surety bonds for the ultimate decommissioning of these licensed facilities.
We provided financial assurance totaling $68.1 million and $68.1 million during the years ended December 31, 2023 and 2022, respectively, with surety bonds for the ultimate decommissioning of these licensed facilities.
We take pride in the fact that we operate NRC Category 1 and Canadian Nuclear Safety Commission ("CNSC") licensed facilities and have instilled as a core value a culture that prioritizes safety with a vision of zero injuries and incidents at all of our work locations.
We operate NRC Category 1 and Canadian Nuclear Safety Commission ("CNSC") licensed facilities and have instilled as a core value a culture that prioritizes safety with a vision of zero injuries and incidents at all of our work locations.
Our primary competitors in the delivery of goods and services to the U.S. Government and the operation of U.S. Government facilities include, but are not limited to, Bechtel National, Inc., Amentum, Fluor Corporation, Jacobs Engineering Group, Inc., Northrop Grumman Corporation, Huntington Ingalls Industries, Inc., Honeywell International, Inc., Leidos, Inc., Westinghouse Electric Corporation and Atkins (a member of SNC-Lavalin Group, Inc.).
Our primary competitors in the delivery of goods and services to the U.S. Government and the operation of U.S. Government facilities include, but are not limited to, Bechtel National, Inc., Amentum, Fluor Corporation, Jacobs Engineering Group, Inc., Northrop Grumman Corporation, Huntington Ingalls Industries, Inc., Honeywell International, Inc., Leidos, Inc., Westinghouse Electric Corporation and AtkinsRéalis.
Our compliance with federal, foreign, state and local environmental control and protection regulations resulted in pre-tax charges of approximately $20.0 million, $17.5 million and $16.3 million in the years ended December 31, 2022, 2021 and 2020, respectively.
Our compliance with federal, foreign, state and local environmental control and protection regulations resulted in pre-tax expense of approximately $20.0 million, $20.0 million and $17.5 million in the years ended December 31, 2023, 2022 and 2021, respectively.
The value of unexercised options excluded from backlog as of December 31, 2022 was approximately $200 million, which is expected to be awarded in annual installments through 2024, subject to annual Congressional appropriations. Competition The competitive environments in which each segment operates are described below.
The value of unexercised options excluded from backlog as of December 31, 2023 was approximately $100 million which are expected to be awarded in 2024, subject to annual Congressional appropriations. Competition The competitive environments in which each segment operates are described below.
These unconsolidated joint ventures are included in our Government Operations segment. See Note 4 to our consolidated financial statements included in this Report for financial information on our equity method investments. At December 31, 2022, our ending backlog was $4,144.3 million, which included $88.7 million of unfunded backlog related to U.S. Government contracts.
These unconsolidated joint ventures are included in our Government Operations segment. See Note 4 to our consolidated financial statements included in this Report for financial information on our equity method investments. 4 Table of Contents At December 31, 2023, our ending backlog was $3,997.6 million, which included $414.7 million of unfunded backlog related to U.S. Government contracts.
Services provided include project management and support services, site operations, maintenance, utilities, high-level waste canister relocation, facility disposition, waste tank farm management, U.S. Nuclear Regulatory Commission ("NRC") licensed disposal area management, waste management and nuclear materials disposition, and safeguards and security. • Waste Isolation Pilot Plant.
Services provided include project management and support services, site operations, maintenance, utilities, high-level waste canister relocation, facility disposition, waste tank farm management, U.S. Nuclear Regulatory Commission ("NRC") licensed disposal area management, waste management and nuclear materials disposition, and safeguards and security. • Synergy Achieving Consolidated Operations & Maintenance (SACOM).
We provided financial assurance totaling $43.3 million and $46.4 million during the years ended December 31, 2022 and 2021, respectively, with letters of credit and surety bonds for the ultimate decommissioning of these licensed facilities. At December 31, 2022 and 2021, we had total environmental accruals, including asset retirement obligations, of $101.8 million and $102.4 million, respectively.
We provided financial assurance totaling $44.3 million and $43.3 million during the years ended December 31, 2023 and 2022, respectively, with letters of credit and surety bonds for the ultimate decommissioning of these licensed facilities. 12 Table of Contents At December 31, 2023 and 2022, we had total environmental accruals, including asset retirement obligations, of $101.1 million and $101.8 million, respectively.
However, none of these methods will eliminate all risks. 9 Table of Contents Depending on competitive conditions, the nature of the work, industry custom and other factors, we may not be successful in obtaining adequate contractual protection from our customers and other parties against losses and liabilities arising out of or related to the performance of our work.
Depending on competitive conditions, the nature of the work, industry custom and other factors, we may not be successful in obtaining adequate contractual protection from our customers and other parties against losses and liabilities arising out of or related to the performance of our work.
In general, we operate in capital-intensive industries and rely on large contracts for a substantial amount of our revenues. We are currently exploring growth strategies across our segments through strategic investments and acquisitions to expand and complement our existing businesses.
For further details regarding each segment's facilities, see Item 2 of this Report. In general, we operate in capital-intensive industries and rely on large contracts for a substantial amount of our revenues. We are currently exploring growth strategies across our segments through strategic investments and acquisitions to expand and complement our existing businesses.
The laboratory serves as a national resource in science and engineering, focused on national security, energy, the environment and bioscience, with special responsibility for nuclear devices. • Savannah River Liquid Waste Disposition Program.
The laboratory serves as a national resource in science and engineering, focused on national security, energy, the environment and bioscience, with special responsibility for nuclear devices. • Savannah River Integrated Mission Completion Contract.
Government by managing and operating high-consequence operations at U.S. nuclear weapons sites, national laboratories and manufacturing complexes. The revenues and equity in income of investees under these types of contracts are largely a function of spending by the U.S. Government and the performance scores we and our consortium partners earn in managing and operating these sites.
The revenues and equity in income of investees under these types of contracts are largely a function of spending by the U.S. Government and the performance scores we and our consortium partners earn in managing and operating these sites.
Backlog Backlog represents the dollar amount of revenue we expect to recognize in the future from contracts awarded and in progress. Not all of our expected revenue from a contract award is recorded in backlog for a variety of reasons, including that some projects are awarded and completed within the same reporting period.
Not all of our expected revenue from a contract award is recorded in backlog for a variety of reasons, including that some projects are awarded and completed within the same reporting period.
Government in accordance with the requirements of the FAR and CAS regulations include, but are not limited to, unallowable employee compensation and benefit costs, lobbying costs, interest, certain legal costs and charitable donations.
Examples of costs that may be incurred by us and not billable to the U.S. Government in accordance with the requirements of the FAR and CAS regulations include, but are not limited to, unallowable employee compensation and benefit costs, lobbying costs, interest, certain legal costs and charitable donations.
Government require us to provide advance notice in connection with any contemplated sale or shut down of the relevant facility. In each of those situations, the U.S. Government has an exclusive right to negotiate a mutually acceptable purchase of the facility.
Government require us to provide advance notice in connection with any contemplated sale or shut down of the relevant facility. In each of those situations, the U.S.
Our backlog at December 31, 2022 and 2021 was as follows: December 31, 2022 December 31, 2021 (In approximate millions) Government Operations $ 3,515 85 % $ 4,532 88 % Commercial Operations 629 15 % 644 12 % Total Backlog $ 4,144 100 % $ 5,176 100 % We do not include the value of our unconsolidated joint venture contracts in backlog.
Our backlog at December 31, 2023 and 2022 was as follows: December 31, 2023 December 31, 2022 (In approximate millions) Government Operations $ 3,217 80 % $ 3,515 85 % Commercial Operations 781 20 % 629 15 % Total Backlog $ 3,998 100 % $ 4,144 100 % We do not include the value of our unconsolidated joint venture contracts in backlog.
Fluor-BWXT Portsmouth LLC is a limited liability company formed by Fluor Federal Services, Inc. and BWXT TSG to provide nuclear operations, decontamination and decommissioning services at the Portsmouth Gaseous Diffusion Plant in Portsmouth, Ohio. A request for proposal was issued by the DOE in 2022 as a follow on to this contract.
Fluor-BWXT Portsmouth LLC is a limited liability company formed by Fluor Federal Services, Inc. and BWXT TSG to provide nuclear operations, decontamination and decommissioning services at the Portsmouth Gaseous Diffusion Plant in Portsmouth, Ohio.
In addition, we are a leading manufacturer of critical nuclear components, fuels and assemblies for government and limited other uses. We have supplied nuclear components for DOE programs since the 1950s and are the largest domestic supplier of research reactor fuel elements for colleges, universities and national laboratories. We also downblend Cold War-era government stockpiles of high-enriched uranium.
We have supplied nuclear components for DOE programs since the 1950s and are the largest domestic supplier of research reactor fuel elements for colleges, universities and national laboratories. We also downblend Cold War-era government stockpiles of high-enriched uranium. In addition, we have over 100 years of experience in supplying components for defense applications.
We have been identified as a potentially responsible party at various cleanup sites under CERCLA. CERCLA and other environmental laws can impose liability for the entire cost of cleanup on any of the potentially responsible parties, regardless of fault or the lawfulness of the original conduct.
CERCLA and other environmental laws can impose liability for the entire cost of cleanup on any of the potentially responsible parties, regardless of fault or the lawfulness of the original conduct.
Forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "anticipate," "plan," "seek," "goal," "could," "intend," "may," "should" or other words that convey the uncertainty of future events or outcomes.
Forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "anticipate," "plan," "seek," "goal," "could," "intend," "may," "should" or other words that convey the uncertainty of future events or outcomes. In addition, sometimes we will specifically describe a statement as being a forward-looking statement and refer to this cautionary statement.
See Note 2 to our consolidated financial statements included in this Report for additional information on acquisitions and divestitures. Contracts We execute our contracts through a variety of methods, including fixed-price incentive fee, cost-plus, cost-reimbursable, firm fixed-price or some combination of these methods. We generally recognize our contract revenues and related costs on an over time basis.
Contracts We execute our contracts through a variety of methods, including fixed-price incentive fee, cost-plus, cost-reimbursable, firm fixed-price or some combination of these methods. We generally recognize our contract revenues and related costs on an over time basis.
We strive to maintain a highly-skilled and diverse workforce where employees are recruited, compensated, retained and promoted based on their performance and contribution to the Company. 7 Table of Contents Employees At December 31, 2022, we employed approximately 7,000 persons worldwide, predominantly in the U.S. (5,600 employees) and Canada (1,400 employees).
We strive to maintain a highly-skilled and diverse workforce where employees are recruited, compensated, retained and promoted based on their performance and contribution to the Company. Employees At December 31, 2023, we employed approximately 7,800 persons worldwide, predominantly in the U.S. (6,200 employees) and Canada (1,600 employees). Many of our operations are subject to union contracts, which we negotiate periodically.
Our Government Operations segment also enters into contracts that include the management and operation of nuclear production facilities, environmental management sites and the management of spent nuclear fuel and transuranic waste for the U.S. Government, primarily the DOE.
Government has an exclusive right to negotiate a mutually acceptable purchase of the facility. 3 Table of Contents Our Government Operations segment also enters into contracts that include the management and operation of nuclear production facilities, environmental management sites and the management of spent nuclear fuel and transuranic waste for the U.S. Government, primarily the DOE.
This segment also serves customers of our advanced technology platforms primarily through the use of fixed-price contracts that are awarded following a competitive bid process, primarily in the early design and development phases of the underlying program.
This segment also serves customers of our advanced technology platforms primarily through contracts that are awarded following a competitive bid process, primarily in the early design and development phases of the underlying program. Most of our contracts in this area are cost-plus which reduces our overall risk as the underlying projects increase in scale.
However, future events, such as changes in existing laws and regulations or their interpretation, more vigorous enforcement policies of regulatory agencies or stricter or different interpretations of existing laws and regulations, may require additional expenditures by us, which may be material. Accordingly, we can provide no assurance that we will not incur significant environmental compliance costs in the future.
However, future events, such as changes in existing laws and regulations or their interpretation, more vigorous enforcement policies of regulatory agencies or stricter or different interpretations of existing laws and regulations, may 11 Table of Contents require additional expenditures by us, which may be material.
An award is expected in the first half of 2023. • West Valley Demonstration Project Phase I Decommissioning and Facility Disposition. CH2M Hill-BWXT West Valley, LLC is a limited liability company formed by CH2M Hill Constructors, Inc., BWXT TSG and Environmental Chemical Corporation.
A follow-on contract was awarded by the DOE to a competitor in 2023 and transition is expected to occur during 2024. • West Valley Demonstration Project Phase I Decommissioning and Facility Disposition. CH2M Hill-BWXT West Valley, LLC is a limited liability company formed by CH2M Hill Constructors, Inc., BWXT TSG and Environmental Chemical Corporation.
In October 2021, Savannah River Mission Completion LLC, a limited liability company formed by BWXT TSG, Amentum and Fluor Federal Services, Inc. was awarded a contract to reduce environmental and financial liabilities for the DOE at the Savannah River Site located in Aiken, South Carolina.
Savannah River Mission Completion LLC, a limited liability company formed by BWXT TSG, Amentum and Fluor Federal Services, Inc. was awarded a contract to receive, store, treat and dispose of radioactive liquid waste for the DOE at the Savannah River Site located in Aiken, South Carolina. • Portsmouth Gaseous Diffusion Plant D&D.
In the event of a contract deferral or cancellation, we generally would be entitled to recover costs incurred, settlement expenses and profit on work completed prior to deferral or cancellation.
In the event of a contract deferral or cancellation, we generally would be entitled to recover costs incurred, settlement expenses and profit on work completed prior to deferral or cancellation. Significant or numerous contract deferrals or cancellations could adversely affect our business, financial condition, results of operations and cash flows.
Dynamic and Cunico are suppliers of highly-engineered, proprietary valves, manifolds and fittings for global naval nuclear and diesel-electric submarines, surface warfare ships and commercial shipping vessels. These companies are reported as part of our Government Operations segment. Acquisition of Laker Energy Products Ltd.
Dynamic and Cunico are suppliers of highly-engineered, proprietary valves, manifolds and fittings for global naval nuclear and diesel-electric submarines, surface warfare ships and commercial shipping vessels. These companies are reported as part of our Government Operations segment. See Note 2 to our consolidated financial statements included in this Report for additional information on acquisitions.
We also procure insurance, operate our own captive insurance company or establish funded and/or unfunded reserves.
We also procure insurance, operate our own captive insurance company and establish funded and/or unfunded reserves. However, none of these methods will eliminate all risks.
The kinds of permits, licenses and certificates required in our operations depend upon a number of factors. We cannot determine the extent to which new legislation, new regulations or changes in existing laws or regulations may affect our future operations.
We cannot determine the extent to which new legislation, new regulations or changes in existing laws or regulations may affect our future operations.
In addition, we perform fabrication activities for missile launch tubes for U.S. Navy submarines and supply proprietary and sole-source valves, manifolds and fittings to global naval and commercial shipping customers. Our Government Operations segment specializes in the design and manufacture of close-tolerance and high-quality equipment for nuclear applications.
In addition, we supply proprietary and sole-source valves, manifolds and fittings to global naval and commercial shipping customers. Our Government Operations segment specializes in the design and manufacture of close-tolerance and high-quality equipment for nuclear applications. In addition, we are a leading manufacturer of critical nuclear components, fuels and assemblies for government and limited other uses.
All three indicate growth in the total number of ships and a sustained, or increased, procurement profile for nuclear-powered submarines and aircraft carriers.
Navy issued its 30-year shipbuilding plan containing three alternative procurement profiles based upon varied funding assumptions. All three indicate growth in the total number of ships and a sustained, or increased, procurement profile for nuclear-powered submarines and aircraft carriers.
At any given time, a relatively small number of projects can represent a significant part of our operations. Business Segments We operate in two reportable segments: Government Operations and Commercial Operations.
At any given time, a relatively small number of projects can represent a significant part of our operations. Business Segments We operate in two reportable segments: Government Operations and Commercial Operations. For financial information regarding each of our segments and financial information regarding geographic areas, see Note 15 and Note 3 to our consolidated financial statements included in this Report.
We caution that these statements are not guarantees of future performance, and you should not rely unduly on them as they involve risks, uncertainties and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate.
We have based our forward-looking statements on information currently available to us and our current expectations, estimates and projections about our industries, business environment and our Company. We caution that these statements are not guarantees of future performance, and you should not rely unduly on them as they involve risks, uncertainties and assumptions that we cannot predict.
Human Capital Management People Strong, Innovation Driven Our employees are responsible for providing safe and effective nuclear solutions for global security, clean energy, environmental restoration, nuclear medicine and space exploration. Through their hard work, dedication and innovation, we have developed new technologies that benefit our customers, build our business and enhance our lives.
Human Capital Management People Strong, Innovation Driven Our employees are responsible for providing safe and effective nuclear solutions for global security, clean energy, environmental restoration, nuclear medicine and space exploration. We encourage innovation to develop new technologies, improve our products and open new markets.
We have also been a leader in the receipt, storage, characterization, dissolution, recovery and purification of a variety of uranium-bearing materials. All phases of uranium downblending and uranium recovery are performed at our Lynchburg, Virginia and Erwin, Tennessee sites. The demand for nuclear components by the U.S. Government determines a substantial portion of this segment's backlog.
All phases of uranium downblending and uranium recovery are performed at our Lynchburg, Virginia and Erwin, Tennessee sites. The demand for nuclear components by the U.S. Government determines a substantial portion of this segment's backlog. We expect that orders for nuclear components will continue to be a significant part of backlog for the foreseeable future. In March 2023, the U.S.
Unless otherwise specified in a contract, allowable and allocable costs are billed to contracts with the U.S. Government in accordance with the Federal Acquisition Regulation (the "FAR") and the related U.S. Government Cost Accounting Standards ("CAS"). Examples of costs that may be incurred by us and not billable to the U.S.
Government Operations The majority of the revenue generated by this segment is from long-term contracts with the DOE/NNSA's Naval Nuclear Propulsion Program. Unless otherwise specified in a contract, allowable and allocable costs are billed to contracts with the U.S. Government in accordance with the Federal Acquisition Regulation (the "FAR") and the related U.S. Government Cost Accounting Standards ("CAS").
Employee Compensation and Benefits Our compensation plans are designed to reward our employees for achieving and exceeding objectives that create long-term value for shareholders. The success and growth of our business is attributable to our ability to attract, develop, and retain talented and high-performing employees at all levels in our Company.
The success and growth of our business is attributable to our ability to attract, develop, engage and retain talented and high-performing employees at all levels in our Company.
In addition, we have over 100 years of experience in supplying components for defense applications. 1 Table of Contents We work closely with the DOE-supported nuclear non-proliferation program. Currently, this program is assisting in the development of a high-density, low-enriched uranium fuel required for high-enriched uranium test reactor conversions.
We work closely with the DOE-supported nuclear non-proliferation program. Currently, this program is assisting in the development of a high-density, low-enriched uranium fuel required for high-enriched uranium test reactor conversions. We have also been a leader in the receipt, storage, characterization, dissolution, recovery and purification of a variety of uranium-bearing materials.
A significant portion of our Commercial Operations segment's operations depends on the timing of maintenance outages and the cyclical nature of capital expenditures and major refurbishments for nuclear utility customers, principally in the Canadian market, which could cause variability in our financial results.
A significant portion of our Commercial Operations segment's operations depends on the timing of maintenance outages and the cyclical nature of capital expenditures and major refurbishments for nuclear utility customers, principally in the Canadian market, which could cause variability in our financial results. 2 Table of Contents Acquisitions Acquisition of Dynamic Controls Limited and Citadel Capital Corporation On April 11, 2022, our subsidiary BWXT Government Group, Inc. acquired all of the outstanding stock of U.K.-based Dynamic Controls Limited ("Dynamic") and U.S.-based Citadel Capital Corporation, along with its wholly-owned subsidiary, Cunico Corporation ("Cunico").
Our profit may vary under time-and-materials contracts if actual labor-hour rates vary significantly from the negotiated rates.
Our profit may vary under time-and-materials contracts if actual labor-hour rates vary significantly from the negotiated rates. Additionally, because time-and-materials contracts can provide little or no fee for managing material costs, the content mix can have an impact on profitability.
In addition, sometimes we will specifically describe a statement as being a forward-looking statement and refer to this cautionary statement. 13 Table of Contents Statements in this Report, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements.
Statements in this Report, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements appear in Item 1, Item 3, Item 7 and in the notes to our consolidated financial statements in Item 8 of this Report and elsewhere in this Report.
Additionally, because time-and-materials contracts can provide little or no fee for managing material costs, the content mix can have an impact on profitability. 4 Table of Contents Our arrangements with customers may require us to provide letters of credit, bid and performance bonds or guarantees to secure bids or performance under contracts, which may involve significant amounts for contract security.
Our arrangements with customers may require us to provide letters of credit, bid and performance bonds or guarantees to secure bids or performance under contracts, which may involve significant amounts for contract security. Backlog Backlog represents the dollar amount of revenue we expect to recognize in the future from contracts awarded and in progress.
While the current presidential administration may make further changes with its fiscal year 2024 budget submission, we have made additional capital expenditures and investments in personnel to meet the current demand requirements and we expect to continue making such expenditures and investments. This segment also provides various services to the U.S.
We plan to make additional capital expenditures and investments in personnel to meet the current demand requirements, and we expect to continue making such expenditures and investments in the future. 1 Table of Contents This segment also provides various services to the U.S. Government by managing and operating high-consequence operations at U.S. nuclear weapons sites, national laboratories and manufacturing complexes.
Many of our operations are subject to union contracts, which we customarily negotiate periodically. At December 31, 2022, approximately 2,000 of our employees were members of labor unions. We consider our relationships with our employees to be satisfactory.
At December 31, 2023, approximately 2,000 of our employees were members of labor unions. We consider our relationships with our employees to be satisfactory. Employee Compensation and Benefits Our compensation plans are designed to reward our employees for achieving and exceeding objectives that create long-term value for shareholders.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur insurance coverage may be inadequate to cover all of our significant risks or our insurers may deny coverage of material losses we incur, which could adversely affect our profitability and overall financial condition. We operate large manufacturing facilities and perform services in large commercial power plants where accidents or system failures can have significant consequences.
Biggest changeOur operations are subject to operating risks, which could expose us to potentially significant professional liability, product liability, warranty and other claims. Our insurance coverage may be inadequate to cover all of our significant risks, or our insurers may deny coverage of material losses we incur, which could adversely affect our profitability and overall financial condition.
Risks that we have frequently found difficult to cost-effectively insure against include, but are not limited to, business interruption, property losses from wind, flood and earthquake events, nuclear hazards and war, pollution liability, liabilities related to occupational health exposures (including asbestos), professional liability/errors and omissions coverage, the failure, misuse or unavailability of our information systems, the failure of security measures designed to protect our information systems from security breaches, and liability related to risk of loss of our work in progress and customer-owned materials in our care, custody and control.
Risks that we have frequently found difficult to cost-effectively insure against include, but are not limited to, business interruption, property losses from wind, flood and earthquake events, nuclear hazards, war, pollution liability, liabilities related to occupational health exposures (including asbestos), professional liability/errors and omissions coverage, the failure, misuse or unavailability of our information systems, the failure of security measures designed to protect our information systems from security breaches, and liability related to risk of loss of our work in progress and customer-owned materials in our care, custody and control.
Our business strategy includes acquisitions and strategic investments to support our growth, which can create certain risks and uncertainties. We intend to pursue growth through the acquisition of, or strategic investments in, businesses or assets that we believe will enable us to strengthen our existing businesses and expand into adjacent industries.
Our business strategy includes acquisitions and strategic investments to support our growth, which can create certain risks and uncertainties. We intend to pursue growth through the acquisition of, or strategic investments in, businesses or assets that we believe will enable us to strengthen our existing business and expand into adjacent industries.
Our operations in designing, engineering, manufacturing, supplying, constructing and maintaining nuclear fuel and nuclear power equipment and components subject us to various risks, including: • potential liabilities relating to harmful effects on the environment and human health resulting from nuclear operations and the storage, handling and disposal of radioactive materials; 23 Table of Contents • unplanned expenditures relating to maintenance, operation, security, defects, upgrades and repairs required by the NRC, CNSC and other government agencies; • limitations on the amounts and types of insurance commercially available to cover losses that might arise in connection with nuclear operations; and • potential liabilities arising out of a nuclear, radiological or criticality incident, whether or not it is within our control.
Our operations in designing, engineering, manufacturing, supplying, constructing and maintaining nuclear fuel and nuclear power equipment and components subject us to various risks, including: • potential liabilities relating to harmful effects on the environment and human health resulting from nuclear operations and the storage, handling and disposal of radioactive materials; 23 Table of Contents • unplanned expenditures relating to maintenance, operation, security, defects, upgrades and repairs required by the NRC, the CNSC and other government agencies; • limitations on the amounts and types of insurance commercially available to cover losses that might arise in connection with nuclear operations; and • potential liabilities arising out of a nuclear, radiological or criticality incident, whether or not it is within our control.
Revised security and safety requirements promulgated by these agencies could necessitate substantial capital and other expenditures. In addition, we must comply with and are affected by laws and regulations relating to the award, administration and performance of U.S. Government contracts.
Revised security and safety requirements promulgated by these agencies could necessitate substantial capital and other expenditures. In addition, we must comply with and are affected by laws and regulations relating to the award, administration and performance of U.S. Government contracts. U.S.
In the future, we may not be able to obtain necessary licenses on commercially reasonable terms, which could have a material adverse effect on our operations. 17 Table of Contents Our operations are subject to disruption caused by severe weather, environmental and natural disasters, pandemics and other natural and manmade events that could adversely affect our manufacturing facilities or the infrastructure necessary to support them.
In the future, we may not be able to obtain necessary licenses on commercially reasonable terms, which could have a material adverse effect on our operations. 17 Table of Contents Our operations are subject to disruption caused by severe weather, environmental and natural disasters and other natural and manmade events that could adversely affect our manufacturing facilities or the infrastructure necessary to support them.
The extent to which such an epidemic impacts our business will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of a public health epidemic or outbreak and the actions to contain its impact.
The extent to which such an epidemic, pandemic or outbreak impacts our business will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of a public health epidemic, pandemic or outbreak and the actions to contain its impact.
While we take steps to mitigate the impact of severe weather, environmental and natural disasters, the frequency and severity of which may be impacted by climate change, pandemics and other natural and manmade events, such events could result in severe disruption to our business operations at these facilities.
While we take steps to mitigate the impact of severe weather, environmental and natural disasters, the frequency and severity of which may be impacted by climate change and other natural and manmade events, such events could result in severe disruption to our business operations at these facilities.
Government contractor, we may be prone to a greater number of those threats than companies in other industries. These threats range from attacks common to most industries to more advanced and persistent threats from highly-organized adversaries targeting us because we are a U.S. Government contractor.
Government contractor, we may be prone to a greater number of these threats than companies in other industries. These threats range from attacks common to most industries to more advanced and persistent threats from highly-organized adversaries targeting us because we are a U.S. Government contractor.
If our operations or the operations of our customers or our suppliers are restricted, we may be unable to perform fully on our contracts and our costs may increase as a result of a public health epidemic or outbreak.
If our operations or the operations of our customers or our suppliers are restricted, we may be unable to perform fully on our contracts and our costs may increase as a result of a public health epidemic, pandemic or outbreak.
Actual or threatened public health epidemics or outbreaks, such as the global outbreak of COVID-19, could have a material adverse effect on our business and results of operations.
Actual or threatened public health epidemics, pandemics or outbreaks, such as the global outbreak of COVID-19, could have a material adverse effect on our business and results of operations.
Our ability to operate or operate profitability could be significantly impacted, which could have a material adverse effect on our business, financial condition and results of operations. We operate a number of large manufacturing facilities in the U.S. and Canada, including NRC Category 1 and CNSC-licensed nuclear manufacturing and fuel facilities.
Our ability to operate or operate profitably could be significantly impacted, which could have a material adverse effect on our business, financial condition and results of operations. We operate a number of large manufacturing facilities in the U.S. and Canada, including NRC Category 1 and CNSC-licensed nuclear manufacturing and fuel facilities.
Government programs, either of which may result in a reduction in the number of contract award opportunities available to us, a reduction of activities at DOE sites and an increase in costs, including the costs of obtaining contract awards. The U.S.
Government programs, either of which may result in a reduction in the number of contract award opportunities available to us, a reduction of activities at DOE sites and an increase in costs, including the costs of obtaining contract awards.
These activities subject us to inherent costs and risks associated with replacing and updating these systems, including potential disruption of our internal control structure, substantial capital expenditures, demands on management time and other 16 Table of Contents risks of delays or difficulties in transitioning to new systems or of integrating new systems into our current systems.
These activities subject us to inherent costs and risks associated with replacing and updating these systems, including potential disruption of our internal control structure, substantial capital expenditures, demands on management time and other risks of delays or difficulties in transitioning to new systems or of integrating new systems into our current systems.
We may not achieve significant revenue from new product and service investments for a number of years, if at all. Additionally, there can be no assurance that the current technologies that our businesses rely upon will remain competitive, or that competing technologies will not disrupt our business.
We may not achieve significant revenue from new product and service investments for a number of years, if at all. Additionally, there can be no assurance that the current technologies that our business relies upon will remain competitive, or that competing technologies will not disrupt our business.
Such disruptions and any other information technology system disruptions, and our ability to mitigate those disruptions, if not anticipated and appropriately mitigated, could have a material adverse effect on our business. Actual or threatened public health epidemics or outbreaks, such as COVID-19, could have a material adverse effect on our business and results of operations.
Such disruptions and any other information technology system disruptions, and our ability to mitigate these disruptions, if not anticipated and appropriately mitigated, could have a material adverse effect on our business. Actual or threatened public health epidemics, pandemics or outbreaks, such as COVID-19, could have a material adverse effect on our business and results of operations.
Any product liability claims could be costly to defend, time-consuming and result in adverse judgments, which could result in a material adverse effect on our business, reputation and results.
Any product liability claims could be costly to defend, time-consuming and result in adverse judgments, which could result in a material adverse effect on our business, reputation and results of operations.
If any of our contracts reflected 14 Table of Contents in backlog are terminated by the U.S. Government, our backlog would be reduced by the expected value of the remaining work under such contracts. In addition, on those contracts for which we are teamed with others and are not the prime contractor, the U.S.
If any of our contracts reflected in backlog are terminated by the U.S. Government, our backlog would be reduced by the expected value of the remaining work under such contracts. In addition, on those contracts for which we are teamed with others and are not the prime contractor, the U.S.
Any of these permits or approvals may be subject to denial, revocation or modification under various circumstances. Failure to obtain or comply with the conditions of permits or approvals may adversely affect our operations by temporarily suspending our activities or curtailing our work and may subject us to penalties and other sanctions.
Any of these permits or approvals may be subject to denial, revocation or modification under various circumstances. Failure to obtain or comply with the conditions of permits or approvals may adversely affect our operations by temporarily suspending our 25 Table of Contents activities or curtailing our work and may subject us to penalties and other sanctions.
Depending on competitive conditions and other factors, we endeavor to obtain contractual protection against certain uninsured risks from our customers. When obtained, such contractual indemnification protection may not be as broad as we desire or may not be supported by adequate insurance maintained by the customer.
Depending on competitive conditions and other factors, we endeavor to obtain contractual protection against certain uninsured risks from our customers. When obtained, such contractual indemnification protection may not be as broad as we desire or may 18 Table of Contents not be supported by adequate insurance maintained by the customer.
Such insurance or contractual indemnity protection may not be sufficient or effective under all circumstances or against all hazards to which we may be subject. A successful claim for 18 Table of Contents which we are not insured or for which we are underinsured could have a material adverse effect on us.
Such insurance or contractual indemnity protection may not be sufficient or effective under all circumstances or against all hazards to which we may be subject. A successful claim for which we are not insured or for which we are underinsured could have a material adverse effect on us.
Any public health epidemic poses the risk that we or our employees, contractors, suppliers, customers and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities.
Any public health epidemic, pandemic or outbreak 16 Table of Contents poses the risk that we or our employees, contractors, suppliers, customers and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities.
As of December 31, 2022, we had underfunded defined benefit pension and postretirement benefit plans with obligations totaling approximately $(80.5) million. A substantial portion of our postretirement benefit plan costs are recoverable on our U.S. Government contracts. See Note 7 to our consolidated financial statements included in this Report for additional information regarding our pension and postretirement benefit plan obligations.
As of December 31, 2023, we had underfunded defined benefit pension and postretirement benefit plans with obligations totaling approximately $105.4 million. A substantial portion of our postretirement benefit plan costs are recoverable on our U.S. Government contracts. See Note 7 to our consolidated financial statements included in this Report for additional information regarding our pension and postretirement benefit plan obligations.
Government may not renew or may seek to modify or terminate our existing contracts. For the year ended December 31, 2022, U.S. Government contracts comprised approximately 76% of our total consolidated revenues.
Government may not renew or may seek to modify or terminate our existing contracts. For the year ended December 31, 2023, U.S. Government contracts comprised approximately 75% of our total consolidated revenues.
If an accident were to occur, its severity could be significantly affected by the volume of the materials and the speed of corrective action taken by us and others, 24 Table of Contents including emergency response personnel, as well as other factors beyond our control, such as weather and wind conditions.
If an accident were to occur, its severity could be significantly affected by the volume of the materials and the speed of corrective action taken by us and others, including emergency response personnel, as well as other factors beyond our control, such as weather and wind conditions. Actions taken in response to an accident could result in significant costs.
We are engaged in a number of highly competitive industries and we have priced a number of our contracts on a fixed-price basis. Our actual costs could exceed our projections, which may result in reduced profit or loss.
We are engaged in a number of highly competitive industries and we have priced a number of our contracts on a fixed-price basis. Our actual costs on certain contracts have, and on other contracts could, exceed our projections, which has resulted, and may in the future also result in reduced profit or loss.
Our inability to obtain adequate letters of credit and bonding and, as a result, to bid on new work could have a material adverse effect on our business, financial condition and results of operations. As of December 31, 2022, we had $37.5 million in letters of credit and $113.5 million in surety bonds outstanding.
Our inability to obtain adequate letters of credit and bonding and, as a result, to bid on new work could have a material adverse effect on our business, financial condition and results of operations. As of December 31, 2023, we had $38.4 million in letters of credit and $114.6 million in surety bonds outstanding.
In addition, unfavorable economic conditions may lead customers to delay, curtail or cancel proposed or existing projects, which may decrease the overall demand for our products and services and adversely affect our results of operations.
Demand for our products and services is vulnerable to economic downturns, the competitiveness of alternative energy sources and industry conditions. In addition, unfavorable economic conditions may lead customers to delay, curtail or cancel proposed or existing projects, which may decrease the overall demand for our products and services and adversely affect our results of operations.
If an incident or evacuation is not covered under the Price-Anderson Act's or Canada's NLCA's indemnification provisions, we could be held liable for damages, regardless of fault, which could have an adverse effect on our financial condition and results of operations.
If an incident, damages or 24 Table of Contents evacuation is not covered under the indemnification provisions of the Price-Anderson Act or Canada's NLCA, we could be held liable for damages, in some cases regardless of fault, which could have an adverse effect on our financial condition and results of operations.
These activities involve, among other things, handling nuclear devices and their components for the U.S. Government. Most insurable liabilities arising from these sites are not protected in our corporate insurance program. Instead, we rely on government contractual agreements, some insurance purchased specifically for the sites and certain specialized self-insurance programs funded by the U.S. Government. The U.S.
These activities involve, among other things, handling nuclear devices and their components for the U.S. Government. Most insurable liabilities arising from these sites are not protected in our corporate insurance program. Instead, we rely on government contractual agreements, including a U.S.
Because we provide nuclear fabrication and other services to the DOE relating to its nuclear devices, facilities and other programs and the nuclear power industry in the ongoing maintenance and modifications of its nuclear power plants, including the manufacture of equipment and other components for use in such nuclear power plants, we may be entitled to some of the indemnification protections under the Price-Anderson Act against liability arising from nuclear incidents in the U.S.
Because we provide nuclear fabrication and other services to the DOE relating to its nuclear devices, facilities and other programs and the nuclear power industry in the ongoing maintenance and modifications of its nuclear power plants, including the manufacture of equipment and other components for use in such nuclear power plants, we expect, in the event of a nuclear incident or precautionary evacuation (as such terms are defined in the Atomic Energy Act), to be entitled to the indemnification protections under the Price-Anderson Act against liability arising from nuclear incidents occurring in the U.S.
Accordingly, indemnification protections and the possibility of exclusions under Canada's NLCA are similar to those under the Price-Anderson Act in the U.S. The Price-Anderson Act and Canada's NLCA indemnification provisions may not apply to all liabilities that we might incur while performing services as a contractor for the DOE and the nuclear power industry.
The Price-Anderson Act and Canada's NLCA indemnification provisions may not apply to all liabilities that we might incur while performing services as a contractor for the DOE and the nuclear power industry.
Despite these attempts, the cost and gross profit we realize on a fixed-price contract have and could vary materially from the estimated amounts because of supplier, contractor and subcontractor performance, execution issues, changes in job conditions, variations in labor and equipment productivity, inflation and increases in the cost of labor and raw materials, particularly steel, over the term of the contract.
Despite these attempts, the cost and gross profit we realize on a fixed-price contract have and could vary materially from the estimated amounts because of supplier, contractor and subcontractor performance, execution issues, changes in job conditions, variations in labor and equipment productivity, inflation and increases in the cost of labor and raw materials, particularly steel, over the term of the contract. 15 Table of Contents These variations and the risks generally inherent in our industries may result in actual revenues or costs being different from those we originally estimated and may result in reduced profitability or losses on projects.
Additionally, increased concern regarding global climate change may result in state, federal or international requirements to reduce or mitigate global warming, such as the imposition of stricter limits on greenhouse gas emissions or carbon pricing mechanisms.
Additionally, increased concern regarding the environment and global climate change may result in state, federal or international requirements such as the imposition of stricter limits on greenhouse gas emissions, carbon pricing mechanisms, increasing global chemical restrictions and bans, water and waste requirements and compliance and disclosure requirements.
Actions taken in response to an accident could result in significant costs. Governmental requirements relating to the protection of the environment, including solid waste management, air quality, water quality, the decontamination and decommissioning of nuclear manufacturing and processing facilities and cleanup of contaminated sites, have had a substantial impact on our operations.
Governmental requirements relating to the protection of the environment, including solid waste management, air quality, water quality, the decontamination and decommissioning of nuclear manufacturing and processing facilities and cleanup of contaminated sites, have had a substantial impact on our operations. These requirements are complex and subject to frequent change.
Unfavorable economic conditions, competition from other forms of power generation, increased competition for refurbishment contracts, changes in government policy or operational or project execution issues may lead nuclear plant operators in Canada to cease operations or delay, curtail or cancel proposed or existing life-extension projects, which may decrease the overall demand for our products and services in Canada and adversely affect our financial condition, results of operations and cash flows. 15 Table of Contents We are subject to risks associated with contractual pricing in our industries, including the risk that, if our actual costs exceed the costs we estimate on our fixed-price contracts, our profitability will decline and we may suffer losses.
Unfavorable economic conditions, competition from other forms of power generation, increased competition for refurbishment contracts, changes in government policy or operational or project execution issues may lead nuclear plant operators in Canada to cease operations or delay, curtail or cancel proposed or existing life-extension projects, which may decrease the overall demand for our products and services in Canada and adversely affect our financial condition, results of operations and cash flows.
Government is also conditional, and provisions of the relevant contract or applicable law may preclude reimbursement. We have a captive insurance company subsidiary that provides us with various insurance coverages. Claims, as a result of our operations, could adversely impact the ability of our captive insurance company subsidiary to respond to all claims presented.
We have a captive insurance company subsidiary that provides us with various insurance coverages. Claims, as a result of our operations, could adversely impact the ability of our captive insurance company subsidiary to respond to all claims presented.
The indemnification authority under the Price-Anderson Act was extended through December 2025 by the Energy Policy Act of 2005. We also provide nuclear fabrication and other services to the nuclear power industry in Canada and other countries. Canada's NLCA generally conforms to international conventions and is conceptually similar to the Price-Anderson Act in the U.S.
We also provide nuclear fabrication and other services to the nuclear power industry in Canada and other countries. Canada's NLCA generally conforms to international conventions and is conceptually similar to the Price-Anderson Act in the U.S. Accordingly, indemnification protections and the possibility of exclusions under Canada's NLCA are similar to those under the Price-Anderson Act in the U.S.
The Price-Anderson Act comprehensively regulates the manufacture, use and storage of radioactive materials, while promoting the nuclear industry by offering broad indemnification to commercial nuclear power plant operators and DOE contractors.
The Price-Anderson Act partially indemnifies the nuclear industry against liability arising from nuclear incidents in the U.S., while ensuring compensation for the general public. The Price-Anderson Act comprehensively regulates the manufacture, use and storage of radioactive materials, while promoting the nuclear industry by offering broad indemnification to commercial nuclear power plant operators and DOE contractors.
There are many variables in how budget reductions could be implemented that will determine its specific impact; however, reductions in federal government spending could adversely impact programs in which we provide products or services. In addition, these cuts could adversely affect the viability of the suppliers and subcontractors under our programs.
Government programs across the board, regardless of how programs align with those priorities. There are many variables in how budget reductions could be implemented that will determine its specific impact; however, reductions in federal government spending could adversely impact programs in which we provide products or services.
Government to renew our existing contracts or the disallowance of the payment of our contract costs could have a material adverse effect on our financial condition, results of operations and cash flows. Federal budget delays, federal debt ceiling limitations, or reductions in government spending could adversely impact government spending for the products and services we provide.
Government to renew our existing contracts or the disallowance of the payment of our contract costs could have a material adverse effect on our financial condition, results of operations and cash flows.
In addition, third parties may allege that we have infringed their intellectual property rights, which could result in litigation. Litigation to protect, defend or determine the scope of intellectual property rights, even if ultimately successful, could be costly and could divert management's attention away from other aspects of our business.
Litigation to protect, defend or determine the scope of intellectual property rights, even if ultimately successful, could be costly and could divert management's attention away from other aspects of our business. In addition, our trade secrets may otherwise become known or be independently developed by competitors.
Federal government spending reductions could adversely impact U.S. Government programs for which we provide products or services. While we believe many of our programs are well-aligned with national defense and other strategic priorities, government spending on these programs can be subject to negative publicity, political factors and public scrutiny.
While we believe many of our programs are well-aligned with national defense and other strategic priorities, government spending on these programs can be subject to negative publicity, political factors and public scrutiny. The risk of future budget delays or reductions is uncertain, and it is possible that spending cuts may be applied to U.S.
Although we utilize a combination of tailored and industry standard security measures and technology to monitor and mitigate these threats, we cannot guarantee that these measures and technology will be sufficient to prevent security threats from materializing.
Further, security breaches within our supply chain or unauthorized disclosures of confidential information could also adversely affect our business and reputation. Although we utilize a combination of tailored and industry standard security measures and technology to monitor and mitigate these threats, we cannot guarantee that these measures and technology will be sufficient to prevent security threats from materializing.
In addition, our trade secrets may otherwise become known or be independently developed by competitors. In some instances, we have augmented our technology base by licensing the proprietary intellectual property of third parties.
In some instances, we have augmented our technology base by licensing the proprietary intellectual property of third parties.
Our failure to protect our intellectual property rights, our infringement of third-party intellectual property or our inability to obtain or renew licenses to use intellectual property of third parties, could adversely affect our business. Our success depends, in part, on our ability to protect our proprietary information and other intellectual property.
We rely on intellectual property law and confidentiality agreements to protect our intellectual property. We also rely on intellectual property we license from third parties. Failure to protect our intellectual property rights, alleged infringement of third-party intellectual property rights or our inability to obtain or renew licenses to use intellectual property of third parties, could adversely affect our business.
If environmental or climate-change laws or regulations are adopted or changed, they could necessitate the need for substantial capital and other expenditures and have further negative impacts on our financial condition, results of operations and cash flows. Our operations are subject to operating risks, which could expose us to potentially significant professional liability, product liability, warranty and other claims.
If environmental or climate-change laws or regulations are adopted or changed, they could necessitate the need for substantial capital and other expenditures and have further negative impacts on our financial condition, results of operations and cash flows. Increasing sustainability disclosure requirements may result in increased costs or reputational risks and could limit our ability to manufacture certain of our products.
Government fails to renew these contracts or modifies key terms, our results of operations and cash flows would be adversely affected. As a result of these and other factors, the termination of one or more of our significant government contracts, our suspension from government contract work, the failure of the U.S.
Government fails to renew these contracts or modifies key terms, our results of operations and cash flows would be adversely affected.
These agreements and security measures may be inadequate to deter or prevent misappropriation of our confidential information. In the event of an infringement of our intellectual property rights, a breach of a confidentiality agreement or divulgence of proprietary information, we may not have adequate legal remedies to protect our intellectual property.
In the event of an infringement of our intellectual property rights, a breach of a confidentiality agreement or divulgence of proprietary information, we may not have adequate legal remedies to protect our intellectual property. In addition, third parties may allege that we have infringed their intellectual property rights, which could result in litigation.
A public health epidemic or outbreak and mitigation measures may also have an adverse impact on global economic conditions, which could have an adverse effect on our business.
These cost increases may result in unfavorable changes in estimates which may not be fully recoverable or adequately covered by insurance or through government assistance programs. A public health epidemic, pandemic or outbreak and mitigation measures may also have an adverse impact on global economic conditions, which could have an adverse effect on our business.
Government has historically fulfilled its contractual agreement to reimburse for insurable claims, and we expect it to continue this process. However, it should be noted that, in most situations, the U.S. Government is contractually obligated to pay subject to the availability of authorized government funds. The reimbursement obligation of the U.S.
However, it should be noted that, in most situations, the U.S. Government is contractually obligated to pay subject to the availability of authorized government funds. The reimbursement obligation of the U.S. Government is also conditional, and provisions of the relevant contract or applicable law may preclude reimbursement.
We rely significantly on proprietary technology, information, processes and know-how that are not subject to patent or copyright protection. We seek to protect this information through trade secret or confidentiality agreements with our employees, consultants, subcontractors or other parties, as well as through other security measures.
We seek to protect this information through trade secret or confidentiality agreements with our employees, consultants, subcontractors or other parties, as well as through other security measures. These agreements and security measures may be inadequate to deter or prevent misappropriation of our confidential information.
Our intellectual property could be stolen, challenged, invalidated, circumvented or rendered unenforceable. In addition, effective intellectual property protection may be limited or unavailable in some foreign countries where we operate. Our failure to protect our intellectual property rights may result in the loss of valuable technologies or adversely affect our competitive business position.
Our success depends, in part, on our ability to protect our proprietary information and other intellectual property. Our intellectual property could be stolen, challenged, invalidated, circumvented or rendered unenforceable. In addition, effective intellectual property protection may be limited or unavailable in certain jurisdictions where we operate.
We may also be required to maintain operations of our joint ventures if the U.S. Government can no longer meet its debt obligations. Demand for our products and services is vulnerable to economic downturns, the competitiveness of alternative energy sources and industry conditions.
In addition, these cuts could adversely 14 Table of Contents affect the viability of the suppliers and subcontractors under our programs. We may also be required to temporarily maintain operations of our joint ventures if the U.S. Government can no longer meet its debt obligations. From time to time, the U.S.
If these subsidies are reduced, disallowed or repealed due to changes in law or determination by the underlying government agency, it could have a material adverse effect on our financial condition, results of operations and cash flows.
However, during periods covered by continuing resolutions, we may experience delays in new awards of our products and services, and those delays could have a material adverse effect on our financial condition, results of operations and cash flows. If Congress is not able to enact appropriations bills or extend the continuing resolution, the U.S.
Removed
The risk of future budget delays or reductions is uncertain and it is possible that spending cuts may be applied to U.S. Government programs across the board, regardless of how programs align with those priorities.
Added
We anticipate the federal budget will continue to be subject to debate and compromise shaped by, among other things, heightened political tensions, the global security environment, inflationary pressures and macroeconomic conditions. This may result in shifting funding priorities, which could have material adverse impacts on defense spending broadly and our programs. The U.S.
Removed
These variations and the risks generally inherent in our industries may result in actual revenues or costs being different from those we originally estimated and may result in reduced profitability or losses on projects.
Added
As a result of these and other factors, reductions in the level of funding for individual programs that are important to our business, the termination of one or more of our significant government contracts, our suspension from government contract work, the failure of the U.S.
Removed
These cost increases may result in unfavorable changes in estimates which may not be fully recoverable or adequately covered by insurance or through government assistance programs such as the Coronavirus Aid, Relief and Economic Security Act in the U.S. (the "CARES Act") or the Canada Emergency Wage Subsidy (the "CEWS") in the case of COVID-19.
Added
Federal debt ceiling limitations, reductions in government spending, or impacts to federal appropriations that fund many of our contracts (such as those impacts arising from a continuing resolution or government shutdown), could adversely impact government spending for the products and services we provide. Federal government spending reductions could adversely impact U.S. Government programs for which we provide products or services.
Removed
Additionally, government agencies may review and/or audit the benefits received under applicable government assistance programs, such as the CEWS in the case of COVID-19, and could disallow benefits which we have previously received.
Added
Government operates under a continuing resolution to continue funding the U.S. Government. Under such a continuing resolution, funding at amounts consistent with appropriated levels for the prior fiscal year are typically available, subject to certain restrictions, but new contract and program starts are not authorized.
Removed
Moreover, there may be public scrutiny of government aid beneficiaries and as a result, our reputation could be harmed by participating in such programs. We rely on intellectual property law and confidentiality agreements to protect our intellectual property. We also rely on intellectual property we license from third parties.
Added
In the event of a continuing resolution, we expect our key programs will continue to be supported and funded under the continuing resolution.
Removed
Limitations or modifications to indemnification regulations of the U.S. or foreign countries could adversely affect our business. The Price-Anderson Act partially indemnifies the nuclear industry against liability arising from nuclear incidents in the U.S., while ensuring compensation for the general public.
Added
Government would enter a whole or partial shutdown. Additionally, there is a risk that no continuing resolution would be entered into in certain circumstances, which would also cause a whole or partial government shutdown. The impact of any government shutdown is uncertain.
Removed
These requirements are complex and subject to frequent change.
Added
However, if a government shutdown were to occur and were to continue for an extended period, our employees could be at risk of furlough and we could be at risk of program cancellations, schedule delays, production halts and other disruptions and nonpayment, which could have a material adverse effect on our financial condition, results of operations and cash flows.
Removed
Item 1B. UNRESOLVED STAFF COMMENTS None. 25 Table of Contents
Added
We are subject to risks associated with contractual pricing in our industries, including the risk that, if our actual costs exceed the costs we estimate on our fixed-price contracts, our profitability will decline and we may suffer losses.
Added
Our failure to protect our intellectual property rights may result in the loss of valuable technologies or adversely affect our competitive business position. We rely significantly on proprietary technology, information, processes and know-how that are not subject to patent or copyright protection.
Added
We operate large manufacturing facilities and perform services in large commercial power plants where accidents or system failures can have significant consequences.
Added
Government-provided nuclear indemnity (see the below discussion regarding the Price-Anderson Act), some insurance purchased specifically for the sites and certain specialized self-insurance programs funded by the U.S. Government. The U.S. Government has historically fulfilled its contractual agreement to reimburse for insurable claims, and we expect it to continue this process.
Added
Environmental, social and governance matters and any related reporting obligations may impact our business. U.S. and international regulators, investors and other stakeholders are increasingly focused on environmental, social and governance matters.
Added
For example, new domestic and international laws and regulations relating to environmental, social and governance matters, including environmental sustainability and climate change, human capital management and cybersecurity, are under consideration or being adopted, which may include specific, target-driven disclosure requirements or obligations.
Added
Our response will require increased costs to comply, the implementation of new reporting processes, entailing additional compliance risk, a skilled workforce and other incremental investments. Limitations or modifications to indemnification regulations of the U.S. or foreign countries could adversely affect our business.
Added
(with an available indemnification amount of approximately $16.5 billion) and in foreign countries (with an available indemnification amount of $0.5 billion). The statutory authority for indemnification under the Price-Anderson Act has been extended by Congress four times, most recently through December 2025 by the Energy Policy Act of 2005 (Public Law 109-58).
Added
The further extension of the NRC and DOE indemnification authority beyond 2025 is a matter presently being considered in the U.S. Congress. The Price-Anderson Act extensions have historically been for twenty years. The failure of an extension would not impact the existing government nuclear indemnifications already provided under our current DOE contracts and NRC licenses.
Added
However, a failure to extend the indemnification authority would impact future DOE contract awards and NRC licenses. In such an event, such contracts and licenses would not contain automatic government indemnification.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe site is also the largest commercial International Atomic Energy Agency certified facility in the U.S. (2) Nuclear Fuel Services, Inc. ("NFS") operates this facility, which manufactures fuel for naval nuclear reactors and downblends Cold War-era government stockpiles of high-enriched uranium. NFS is the sole provider of nuclear fuel for the U.S. Navy.
Biggest change("NFS") operates this facility, which manufactures fuel for naval nuclear reactors and downblends Cold War-era government stockpiles of high-enriched uranium. NFS is the sole provider of nuclear fuel for the U.S. Navy. (3) These facilities are licensed by the CNSC in order to allow us to fabricate natural uranium fuel and produce medical radioisotopes.
LEGAL PROCEEDINGS The information set forth under the heading "Investigations and Litigation" in Note 10 to our consolidated financial statements included in Item 8 of this Report is incorporated by reference into this Item 3. Item 4. MINE SAFETY DISCLOSURES None. 26 Table of Contents PART II
Item 3. LEGAL PROCEEDINGS The information set forth under the heading "Investigations and Litigation" in Note 10 to our consolidated financial statements included in Item 8 of this Report is incorporated by reference into this Item 3. Item 4. MINE SAFETY DISCLOSURES None. 28 Table of Contents PART II
PROPERTIES The following table provides the segment name, location and general use of each of our principal properties at December 31, 2022 that we own or lease: Business Segment and Location Principal Use Owned/Leased (Lease Expiration) Government Operations Lynchburg, Virginia Manufacturing facility (1) (4) Owned Barberton, Ohio Manufacturing facility Owned Euclid, Ohio Manufacturing facility Owned Mount Vernon, Indiana Manufacturing facility Owned Erwin, Tennessee Manufacturing facility (2) (4) Owned Lynchburg, Virginia Administrative office Leased (2023) Commercial Operations Cambridge, Ontario, Canada Manufacturing facility Owned Peterborough, Ontario, Canada Manufacturing facility (3) (4) Leased (2036) Toronto, Ontario, Canada Manufacturing facility (3) (4) Leased (2036) Kanata, Ontario, Canada Manufacturing facility (3) (4) Leased (2038) Vancouver, British Columbia, Canada Manufacturing facility (3) (4) Leased (2031) Oakville, Ontario, Canada Manufacturing facility Leased (2029) Corporate Lynchburg, Virginia Administrative office Leased (2025) Washington, District of Columbia Administrative office Leased (2033) Charlotte, North Carolina Administrative office Leased (2025) (1) This facility is our Government Operations segment's primary manufacturing plant and is the nation's largest commercial high-enriched uranium processing facility.
PROPERTIES The following table provides the segment name, location and general use of each of our principal properties at December 31, 2023 that we own or lease: Business Segment and Location Principal Use Owned/Leased (Lease Expiration) Government Operations Lynchburg, Virginia Manufacturing facility (1) (4) Owned Barberton, Ohio Manufacturing facility Owned Euclid, Ohio Manufacturing facility Owned Mount Vernon, Indiana Manufacturing facility Owned Erwin, Tennessee Manufacturing facility (2) (4) Owned Lynchburg, Virginia Administrative office Leased (2024) Commercial Operations Cambridge, Ontario, Canada Manufacturing facility Owned Peterborough, Ontario, Canada Manufacturing facility (3) (4) Leased (2036) Toronto, Ontario, Canada Manufacturing facility (3) (4) Leased (2036) Kanata, Ontario, Canada Manufacturing facility (3) (4) Leased (2038) Vancouver, British Columbia, Canada Manufacturing facility (3) (4) Leased (2031) Oakville, Ontario, Canada Manufacturing facility Leased (2029) Corporate Lynchburg, Virginia Administrative office Leased (2026) Washington, District of Columbia Administrative office Leased (2033) Charlotte, North Carolina Administrative office Leased (2025) (1) Our Government Operations segment operates two facilities in Lynchburg, Virginia: • The segment's primary manufacturing plant which resides on 497 acres and has approximately 1 million square feet under roof.
We consider each of our significant properties to be suitable and adequate for its intended use. For further details regarding our properties, see Item 1 of this Report. Item 3.
(4) This site is subject to review by either the NRC or the CNSC for licensee performance. The performance reviews determine the safe and secure conduct of operations of the facility. We consider each of our significant properties to be suitable and adequate for its intended use. For further details regarding our properties, see Item 1 of this Report.
Removed
(3) These facilities are licensed by the CNSC in order to allow us to fabricate natural uranium fuel and produce medical radioisotopes. (4) This site is subject to review by either the NRC or the CNSC for licensee performance. The performance reviews determine the safe and secure conduct of operations of the facility.
Added
This facility is the nation's largest commercial high-enriched uranium processing facility and is also the largest commercial International Atomic Energy Agency certified facility in the U.S. • A center for manufacturing and research and development, referred to as the BWXT Innovation Campus. This site is adjacent to facility noted above. (2) Nuclear Fuel Services, Inc.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities Period Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) (2) October 1, 2022 – October 31, 2022 7 $ 55.45 — $ 397.6 November 1, 2022 – November 30, 2022 — — — $ 397.6 December 1, 2022 – December 31, 2022 — — — $ 397.6 Total 7 $ 55.45 — (1) Includes 7 shares repurchased during October pursuant to the provisions of employee benefit plans that permit the repurchase of shares to satisfy statutory tax withholding obligations.
Biggest changeIssuer Purchases of Equity Securities Period Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) (2) October 1, 2023 – October 31, 2023 1,092 $ 76.00 — $ 397.6 November 1, 2023 – November 30, 2023 26 78.10 — $ 397.6 December 1, 2023 – December 31, 2023 — — — $ 397.6 Total 1,118 $ 76.05 — (1) Includes 1,092, 26 and 0 shares repurchased during October, November and December, respectively, pursuant to the provisions of employee benefit plans that permit the repurchase of shares to satisfy statutory tax withholding obligations.
(2) On April 30, 2021, our Board of Directors authorized us to repurchase an indeterminate number of shares of our common stock at an aggregate market value of up to $500 million with no expiration date. 27 Table of Contents The following graph provides a comparison of our cumulative total shareholder return over five years to the return of the S&P 500 Composite Index ("S&P 500") and the return of the S&P Aerospace and Defense Select Index ("S&P A&D Select").
(2) On April 30, 2021, our Board of Directors authorized us to repurchase an indeterminate number of shares of our common stock at an aggregate market value of up to $500 million with no expiration date. 29 Table of Contents The following graph provides a comparison of our cumulative total shareholder return over five years to the return of the S&P 500 Composite Index ("S&P 500") and the return of the S&P Aerospace and Defense Select Index ("S&P A&D Select").
Since November 2012, we have periodically announced that our Board of Directors has authorized share repurchase programs. The following table provides information on our purchases of equity securities during the quarter ended December 31, 2022.
Since November 2012, we have periodically announced that our Board of Directors has authorized share repurchase programs. The following table provides information on our purchases of equity securities during the quarter ended December 31, 2023.
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the New York Stock Exchange under the symbol BWXT. As of February 21, 2023, there were approximately 1,356 holders of record of our common stock.
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the New York Stock Exchange under the symbol BWXT. As of February 23, 2024, there were approximately 1,298 holders of record of our common stock.
(1) Assumes initial investment of $100 on December 31, 2017 and reinvestment of dividends. Item 6. [RESERVED] 28 Table of Contents
This graph assumes the investment of $100 on December 31, 2018 and the reinvestment of dividends thereafter. Item 6. [RESERVED] 30 Table of Contents

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeFinancial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm 42 Consolidated Balance Sheets December 31, 2022 and 2021 44 Consolidated Statements of Income Years Ended December 31, 2022, 2021 and 2020 46 i Table of Contents PAGE Consolidated Statements of Comprehensive Income Years Ended December 31, 2022, 2021 and 2020 47 Consolidated Statements of Stockholders' Equity Years Ended December 31, 2022, 2021 and 2020 48 Consolidated Statements of Cash Flows Years Ended December 31, 2022, 2021 and 2020 49 Notes to Consolidated Financial Statements 50
Biggest changeFinancial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm 43 Consolidated Statements of Income Years Ended December 31, 2023, 2022 and 2021 45 Consolidated Statements of Comprehensive Income Years Ended December 31, 2023, 2022 and 2021 46 i Table of Contents PAGE Consolidated Balance Sheets December 31, 2023 and 2022 47 Consolidated Statements of Stockholders' Equity Years Ended December 31, 2023, 2022 and 2021 49 Consolidated Statements of Cash Flows Years Ended December 31, 2023, 2022 and 2021 50 Notes to Consolidated Financial Statements 51
Item 6. [Reserved] 28 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 28 General 29 Critical Accounting Estimates 30 Government Assistance 32 Results of Operations Years Ended December 31, 2022, 2021 and 2020 33 Effects of Inflation and Changing Prices 36 Liquidity and Capital Resources 36 Item 7A.
Item 6. [Reserved] 30 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 30 General 31 Critical Accounting Estimates 32 Results of Operations Years Ended December 31, 2023, 2022 and 2021 35 Effects of Inflation and Changing Prices 37 Liquidity and Capital Resources 37 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 41 Item 8.
Removed
Quantitative and Qualitative Disclosures about Market Risk 40 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe timeframe for submitting new claims under the CEWS ended in May 2022, and we do not expect to qualify for further assistance under this program. 32 Table of Contents Results of Operations – Years Ended December 31, 2022, 2021 and 2020 Selected financial highlights are presented in the table below: Year Ended December 31, 2022 2021 2020 (In thousands) REVENUES: Government Operations $ 1,808,483 $ 1,725,097 $ 1,763,127 Commercial Operations 427,358 407,082 371,269 Eliminations (3,007) (8,105) (10,880) $ 2,232,834 $ 2,124,074 $ 2,123,516 OPERATING INCOME: Government Operations $ 336,501 $ 329,549 $ 345,250 Commercial Operations 27,418 35,243 36,915 $ 363,919 $ 364,792 $ 382,165 Unallocated Corporate (15,348) (18,944) (23,613) Total Operating Income $ 348,571 $ 345,848 $ 358,552 Consolidated Results of Operations Year Ended December 31, 2022 vs. 2021 Consolidated revenues increased 5.1%, or $108.8 million, to $2,232.8 million in the year ended December 31, 2022 compared to $2,124.1 million in 2021, due to increases in our Government Operations and Commercial Operations segments of $83.4 million and $20.3 million, respectively.
Biggest changeGovernment is obligated to pay substantially all the decommissioning costs. 34 Table of Contents Results of Operations – Years Ended December 31, 2023, 2022 and 2021 Selected financial highlights are presented in the table below: Year Ended December 31, 2023 2022 2021 (In thousands) REVENUES: Government Operations $ 2,031,337 $ 1,808,483 $ 1,725,097 Commercial Operations 466,344 427,358 407,082 Eliminations (1,372) (3,007) (8,105) $ 2,496,309 $ 2,232,834 $ 2,124,074 OPERATING INCOME: Government Operations $ 374,682 $ 336,501 $ 329,549 Commercial Operations 37,532 27,418 35,243 $ 412,214 $ 363,919 $ 364,792 Unallocated Corporate (29,155) (15,348) (18,944) Total Operating Income $ 383,059 $ 348,571 $ 345,848 This section discusses our 2023 and 2022 results of operations and contains year-to-year comparisons between 2023 and 2022.
We utilize our Revolving Credit Facility and a bilateral letter of credit facility to support such obligations, but the issuance of letters of credit under our bilateral letter of credit facility is at the issuer’s discretion, and our bilateral facility generally permits the issuer, in its sole discretion, to demand collateral if the issuer does not otherwise have the benefit of the collateral under our Credit Facility.
We utilize our Revolving Credit Facility and a bilateral letter of credit facility to support such obligations, but the issuance of letters of credit under our bilateral letter of credit facility is at the issuer’s discretion, and our bilateral letter of credit facility generally permits the issuer, in its sole discretion, to demand collateral if the issuer does not otherwise have the benefit of the collateral under our Credit Facility.
Under the Credit Facility, (1) if an event of default relating to bankruptcy or other insolvency events occurs with respect to the Company, all related obligations will immediately become due and payable; (2) if any other event of default exists, the lenders will be permitted to accelerate the maturity of the related obligations outstanding; and (3) if any event of default exists, the lenders will be permitted to terminate their commitments thereunder and exercise other rights and remedies, including the commencement of foreclosure or other actions against the collateral.
Under the Credit Facility, (1) if an event of default relating to bankruptcy or other insolvency events occur with respect to the Company, all related obligations will immediately become due and payable; (2) if any other event of default exists, the lenders will be permitted to accelerate the maturity of the related obligations outstanding; and (3) if any event of default exists, the lenders will be permitted to terminate their commitments thereunder and exercise other rights and remedies, including the commencement of foreclosure or other actions against the collateral.
We experienced net cash generated from operations in each of the years ended December 31, 2022, 2021 and 2020. Typically, the fourth quarter has been the period of highest cash flows from operating activities because of the timing of payments received from the U.S. Government on accounts receivable retainages and cash dividends received from our joint ventures.
We experienced net cash generated from operations in each of the years ended December 31, 2023, 2022 and 2021. Typically, the fourth quarter has been the period of highest cash flows from operating activities because of the timing of payments received from the U.S. Government on accounts receivable retainages and cash dividends received from our joint ventures.
As of December 31, 2022, we were in compliance with all covenants set forth in the 2021 Indenture and the Senior Notes due 2029. Other Arrangements We have posted surety bonds to support regulatory and contractual obligations for certain decommissioning responsibilities, projects and legal matters.
As of December 31, 2023, we were in compliance with all covenants set forth in the 2021 Indenture and the Senior Notes due 2029. Other Arrangements We have posted surety bonds to support regulatory and contractual obligations for certain decommissioning responsibilities, projects and legal matters.
We have completed our annual review of our indefinite-lived intangible assets for the year ended December 31, 2022, which indicated that we had no impairment. The fair value of our indefinite-lived intangible assets was substantially in excess of carrying value.
We have completed our annual review of our indefinite-lived intangible assets for the year ended December 31, 2023, which indicated that we had no impairment. The fair value of our indefinite-lived intangible assets was substantially in excess of carrying value.
If the carrying value of a reporting unit exceeds its fair value, an impairment charge is recorded to goodwill in the amount by which the carrying value exceeds fair value. 31 Table of Contents We completed our annual review of goodwill for each of our reporting units for the year ended December 31, 2022, which indicated that we had no impairment of goodwill.
If the carrying value of a reporting unit exceeds its fair value, an impairment charge is recorded to goodwill in the amount by which the carrying value exceeds fair value. We completed our annual review of goodwill for each of our reporting units for the year ended December 31, 2023, which indicated that we had no impairment of goodwill.
The maximum permitted leverage ratio is 4.00 to 1.00, which may be increased to 4.50 to 1.00 for up to four consecutive fiscal quarters after a material acquisition. The minimum consolidated 36 Table of Contents interest coverage ratio is 3.00 to 1.00.
The maximum permitted leverage ratio is 4.00 to 1.00, which may be increased to 4.50 to 1.00 for up to four consecutive fiscal quarters after a material acquisition. The minimum consolidated interest coverage ratio is 3.00 to 1.00.
In general, we operate in capital-intensive industries and rely on large contracts for a substantial amount of our revenues. We are currently exploring growth strategies across our segments through strategic investments and acquisitions to expand and complement our existing businesses.
In general, we operate in capital-intensive industries and rely on large contracts for a substantial amount of our revenues. We operate in two reportable segments: Government Operations and Commercial Operations. We are currently exploring growth strategies across our segments through strategic investments and acquisitions to expand and complement our existing businesses.
The following sensitivity analysis shows the impact of a 25 basis point change in the assumed discount rate and return on plan assets on our FAS pension benefit plan obligations and expense for the year ended December 31, 2022: .25% Increase .25% Decrease (In millions) Discount Rate: Effect on ongoing net periodic benefit cost (1) $ 1.3 $ (1.4) Effect on projected benefit obligation $ (23.2) $ 24.3 Return on Plan Assets: Effect on ongoing net periodic benefit cost $ (2.8) $ 2.8 (1) Excludes effect of annual mark to market adjustment.
The following sensitivity analysis shows the impact of a 25 basis point change in the assumed discount rate and return on plan assets on our FAS pension benefit plan obligations and expense for the year ended December 31, 2023: .25% Increase .25% Decrease (In millions) Discount Rate: Effect on ongoing net periodic benefit cost (1) $ 0.6 $ (0.6) Effect on projected benefit obligation $ (24.0) $ 25.1 Return on Plan Assets: Effect on ongoing net periodic benefit cost $ (2.1) $ 2.1 (1) Excludes effect of annual mark to market adjustment.
We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds those underwriters issue. As of December 31, 2022, bonds issued and outstanding under these arrangements totaled approximately $113.5 million.
We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds those underwriters issue. As of December 31, 2023, bonds issued and outstanding under these arrangements totaled approximately $114.6 million.
Pension costs calculated under CAS are utilized as the basis for recovery of pension costs on our U.S. Government contracts. For the years ended December 31, 2022, 2021 and 2020, our CAS pension costs attributed to U.S. Government contracts totaled $11.7 million, $29.0 million and $43.6 million, respectively.
Pension costs calculated under CAS are utilized as the basis for recovery of pension costs on our U.S. Government contracts. For the years ended December 31, 2023, 2022 and 2021, our CAS 32 Table of Contents pension costs attributed to U.S. Government contracts totaled $13.6 million, $11.7 million and $29.0 million, respectively.
As of December 31, 2022, the weighted-average interest rate on outstanding borrowings under our Credit Facility was 5.93%. The Credit Facility generally includes customary events of default for a secured credit facility.
As of December 31, 2023, the weighted-average interest rate on outstanding borrowings under our Credit Facility was 6.96%. The Credit Facility generally includes customary events of default for a secured credit facility.
As of December 31, 2022, letters of credit issued and outstanding under our bilateral letter of credit facility totaled approximately $34.9 million, and such letters of credit are secured by the collateral under our Credit Facility. 38 Table of Contents Other Cash, Cash Equivalents, Restricted Cash and Investments In the aggregate, our cash and cash equivalents, restricted cash and cash equivalents and investments decreased by $0.3 million to $52.9 million at December 31, 2022 from $53.1 million at December 31, 2021, primarily due to the items discussed below.
As of December 31, 2023, letters of credit issued and outstanding under our bilateral letter of credit facility totaled approximately $36.7 million, and such letters of credit are secured by the collateral under our Credit Facility. 39 Table of Contents Other Cash, Cash Equivalents, Restricted Cash and Investments In the aggregate, our cash and cash equivalents, restricted cash and cash equivalents and investments increased by $38.2 million to $91.1 million at December 31, 2023 from $52.9 million at December 31, 2022, primarily due to the items discussed below.
Cash Requirements We believe we have sufficient cash and cash equivalents and borrowing capacity, along with cash generated from operations and continued access to debt markets, to satisfy our cash requirements for the next 12 months and beyond.
Our investment portfolio consists primarily of corporate bonds and mutual funds. Cash Requirements We believe we have sufficient cash and cash equivalents and borrowing capacity, along with cash generated from operations and continued access to debt markets, to satisfy our cash requirements for the next 12 months and beyond.
Statements based on historical cost, however, do not adequately reflect the cumulative effect of increasing costs and changes in the purchasing power of the U.S. dollar, especially during times of significant and continued inflation.
Effects of Inflation and Changing Prices Our financial statements are prepared in accordance with GAAP, using historical U.S. dollar accounting ("historical cost"). Statements based on historical cost, however, do not adequately reflect the cumulative effect of increasing costs and changes in the purchasing power of the U.S. dollar, especially during times of significant and continued inflation.
We expect these heightened spending levels to decline as these capital expansion projects near completion. During the year ended December 31, 2022, we paid $81.1 million in dividends to holders of our common stock.
We expect these heightened spending levels to decline as these capital expansion projects are largely complete. During the year ended December 31, 2023, we paid $85.0 million in dividends to holders of our common stock.
Our net cash provided by financing activities increased by $104.1 million to $14.0 million in the year ended December 31, 2022, compared to cash used in financing activities of $90.1 million in the year ended December 31, 2021.
Our net cash used in financing activities increased by $183.3 million to $169.4 million in the year ended December 31, 2023, compared to cash provided by financing activities of $14.0 million in the year ended December 31, 2022.
Liquidity and Capital Resources Our overall liquidity position, which we generally define as our unrestricted cash and cash equivalents plus amounts available for borrowings under our credit facility, increased by approximately $185.1 million to $532.7 million at December 31, 2022 compared to $347.7 million at December 31, 2021, primarily attributable to the borrowing of the Term Loan, as defined below, the proceeds from which were used to repay borrowings under our Revolving Credit Facility, as defined below.
Liquidity and Capital Resources Our overall liquidity position, which we generally define as our unrestricted cash and cash equivalents plus amounts available for borrowings under our credit facility, increased by approximately $116.3 million to $649.1 million at December 31, 2023 compared to $532.7 million at December 31, 2022, primarily attributable to improvements in operating cash flows which were used, in part, to repay borrowings under our Revolving Credit Facility, as defined below.
Our net cash used in investing activities decreased by $48.4 million to $256.2 million in the year ended December 31, 2022, compared to $304.7 million in the year ended December 31, 2021.
Our net cash used in investing activities decreased by $100.6 million to $155.6 million in the year ended December 31, 2023, compared to $256.2 million in the year ended December 31, 2022.
In addition, the Credit Facility contains various restrictive covenants, including with respect to debt, liens, investments, mergers, acquisitions, dividends, equity repurchases and asset sales. As of December 31, 2022, we were in compliance with all covenants set forth in the Credit Facility.
In addition, the Credit Facility contains various restrictive covenants, including with respect to debt, liens, investments, mergers, acquisitions, dividends, equity repurchases and asset sales.
As of December 31, 2022, borrowings under our Term Loan totaled $250.0 million, borrowings and letters of credit issued under the Revolving Credit Facility totaled $250.0 million and $2.5 million, respectively, and we had $497.5 million available under the Revolving Credit Facility for borrowings and to meet letter of credit requirements.
As of December 31, 2023, borrowings under our Term Loan totaled $243.8 million, borrowings and letters of credit issued under the Revolving Credit Facility totaled $175.0 million and $1.7 million, respectively, and we had $573.3 million available under the Revolving Credit Facility for borrowings and to meet letter of credit requirements.
Outstanding loans under the Credit Facility bear interest at our option at either (1) the Term SOFR plus a credit spread adjustment of 0.10% plus a margin ranging from 1.0% to 1.75% per year or (2) the base rate plus a margin ranging from 0.0% to 0.75% per year.
As of December 31, 2023, we were in compliance with all covenants set forth in the Credit Facility. 37 Table of Contents Outstanding loans under the Credit Facility bear interest at our option at either (1) the Term SOFR plus a credit spread adjustment of 0.10% plus a margin ranging from 1.0% to 1.75% per year or (2) the base rate plus a margin ranging from 0.0% to 0.75% per year.
Our effective tax rate was 24.1% for the year ended December 31, 2022 compared to 22.6% for the year ended December 31, 2021. Our effective tax rate was 22.6% for the year ended December 31, 2021 compared to 22.9% for the year ended December 31, 2020.
Our effective tax rate was 23.4% for the year ended December 31, 2023 compared to 24.1% for the year ended December 31, 2022.
Our effective tax rates for the years ended December 31, 2022, 2021 and 2020 were higher than the U.S. corporate 35 Table of Contents income tax rate of 21% primarily due to state income taxes within the U.S. and the unfavorable rate differential associated with our Canadian earnings.
Our effective tax rates for the years ended December 31, 2023 and 2022 were higher than the U.S. corporate income tax rate of 21% primarily due to state income taxes within the U.S. and the unfavorable rate differential associated with our Canadian earnings. 36 Table of Contents See Note 5 to our consolidated financial statements included in this Report for further information on income taxes.
In addition, we anticipate cash requirements totaling approximately $1.4 million for contributions to our other postretirement benefit plans in 2023.
We expect cash requirements totaling approximately $4.4 million and $1.2 million for contributions to our pension plans and other postretirement benefit plans, respectively, in 2024.
Senior Notes due 2029 We issued $400 million aggregate principal amount of 4.125% senior notes due 2029 (the "Senior Notes due 2029") pursuant to an indenture dated April 13, 2021 (the "2021 Indenture"), among the Company, certain of our subsidiaries, as guarantors, and U.S. Bank, as trustee.
As of December 31, 2023, we were in compliance with all covenants set forth in the 2020 Indenture and the Senior Notes due 2028. 38 Table of Contents Senior Notes due 2029 We issued $400 million aggregate principal amount of 4.125% senior notes due 2029 (the "Senior Notes due 2029") pursuant to an indenture dated April 13, 2021 (the "2021 Indenture"), among the Company, certain of our subsidiaries, as guarantors, and U.S.
Critical Accounting Estimates Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions are affected by management's application of accounting policies.
Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe the following are our most critical accounting policies that we apply in the preparation of our financial statements.
Assumptions include the selection of our peer companies and use of market multiples, which could increase or decrease based on the profitability of our competitors and performance of their stock, which is often dependent on the performance of the stock market and general economy as a whole.
Assumptions include the selection of our peer companies and use of market multiples, which could increase or decrease based on the profitability of our competitors and performance of their stock, which is often dependent on the performance of the stock market and general economy as a whole. 33 Table of Contents Adverse changes in the assumptions utilized in our impairment test could cause a reduction or elimination of excess fair value over carrying value, resulting in potential recognition of impairment.
The decrease in cash used in investing activities was primarily attributable to a decrease in purchases of property, plant and equipment of $112.7 million, which was partially offset by the $47.3 million acquisition of Dynamic and Cunico as well as an $11.5 million increase in investments in equity method investees during the year ended December 31, 2022.
The decrease in cash used in investing activities was primarily attributable to a decrease in purchases of property, plant and equipment of $47.0 million and the $46.7 million acquisition of Dynamic and Cunico in the prior year. In addition, we experienced an $11.5 million decrease in investments in equity method investees.
The Senior Notes due 2029 are guaranteed by each of the Company's present and future direct and indirect wholly owned domestic subsidiaries that is a guarantor under the Credit Facility. Interest on the Senior Notes due 2029 is payable semi-annually in cash in arrears on April 15 and October 15 of each year at a rate of 4.125% per annum.
Interest on the Senior Notes due 2029 is payable semi-annually in cash in arrears on April 15 and October 15 of each year at a rate of 4.125% per annum. The Senior Notes due 2029 will mature on April 15, 2029.
Other Income (Expense) During the year ended December 31, 2022, other income (expense) decreased $83.2 million to a loss of $33.3 million compared to a gain of $49.9 million in 2021.
Other Income (Expense) During the year ended December 31, 2023, other income (expense) decreased $27.5 million to a loss of $61.7 million compared to a loss of $34.2 million in 2022.
The margin for Term SOFR and base rate loans was 1.50% and 0.50%, respectively, the letter of credit fee for financial letters of credit and performance letters of credit was 1.50% and 0.90%, respectively, and the commitment fee for the unused portion of the Revolving Credit Facility was 0.20% from the closing date through the date of our delivery of the compliance certificate for the fiscal quarter ended December 31, 2022.
Based on the total net leverage ratio applicable at December 31, 2023, the margin for Term SOFR and base rate loans was 1.50% and 0.50%, respectively, the letter of credit fee for financial letters of credit and performance letters of credit was 1.50% and 0.90%, respectively, and the commitment fee for the unused portion of the Revolving Credit Facility was 0.20%.
Although we continually strive to improve our ability to estimate our contract costs and profitability, adjustments to overall contract costs due to unforeseen events could be significant in future periods.
During the year ended December 31, 2021, no adjustment to any one contract had a material impact on our consolidated financial statements. Although we continually strive to improve our ability to estimate our contract costs and profitability, adjustments to overall contract costs due to unforeseen events could be significant in future periods.
Our cash requirements as of December 31, 2022 include the following contractual obligations: Total Less than 1 Year 1-3 Years 3-5 Years After 5 Years (In thousands) Long-term debt principal $ 1,300,000 $ 6,250 $ 18,750 $ 475,000 $ 800,000 Interest payments $ 323,482 $ 65,286 $ 115,163 $ 110,033 $ 33,000 Lease payments $ 31,078 $ 4,546 $ 6,673 $ 4,035 $ 15,824 Our contingent commitments under letters of credit and surety bonds currently outstanding expire as follows: Total Less than 1 Year 1-3 Years 3-5 Years Thereafter (In thousands) $ 151,052 $ 138,775 $ 10,992 $ 1,285 $ — 39 Table of Contents Other cash requirements include, among other things, capital expenditures, payment of dividends, repurchases of common stock, capital contributions for joint ventures and contributions to our pension and other postretirement benefit plans.
Our cash requirements as of December 31, 2023 include the following contractual obligations: Total Less than 1 Year 1-3 Years 3-5 Years After 5 Years (In thousands) Long-term debt principal $ 1,218,750 $ 6,250 $ 25,000 $ 787,500 $ 400,000 Interest payments $ 249,452 $ 59,433 $ 105,567 $ 76,202 $ 8,250 Lease payments $ 28,094 $ 4,131 $ 6,654 $ 3,736 $ 13,573 Our contingent commitments under letters of credit and surety bonds currently outstanding expire as follows: Total Less than 1 Year 1-3 Years 3-5 Years Thereafter (In thousands) $ 153,054 $ 144,231 $ 8,823 $ — $ — 40 Table of Contents Other cash requirements include, among other things, capital expenditures, payment of dividends, repurchases of common stock, capital contributions for joint ventures and contributions to our pension and other postretirement benefit plans.
We immediately recognize net actuarial gains and losses in earnings in the fourth quarter as a component of net periodic benefit cost.
Actual experience that differs from these assumptions or future changes in assumptions will affect our recognized benefit obligations and related costs. We immediately recognize net actuarial gains and losses in earnings in the fourth quarter as a component of net periodic benefit cost.
Our net cash provided by operating activities decreased by $141.3 million to $244.7 million in the year ended December 31, 2022, compared to $386.0 million in the year ended December 31, 2021.
Our net cash provided by operating activities increased by $119.0 million to $363.7 million in the year ended December 31, 2023, compared to $244.7 million in the year ended December 31, 2022. The increase in cash provided by operating activities was primarily attributable to the timing of project cash flows.
Our domestic and foreign cash and cash equivalents, restricted cash and cash equivalents and investments as of December 31, 2022 and 2021 were as follows: December 31, 2022 2021 (In thousands) Domestic $ 38,455 $ 39,128 Foreign 14,436 14,016 Total $ 52,891 $ 53,144 Our working capital increased by $89.6 million to $403.8 million at December 31, 2022 from $314.1 million at December 31, 2021, primarily attributable to the timing of project cash flows and vendor payments.
Our domestic and foreign cash and cash equivalents, restricted cash and cash equivalents and investments as of December 31, 2023 and 2022 were as follows: December 31, 2023 2022 (In thousands) Domestic $ 71,177 $ 38,455 Foreign 19,934 14,436 Total $ 91,111 $ 52,891 Our working capital increased by $39.0 million to $442.8 million at December 31, 2023 from $403.8 million at December 31, 2022, primarily attributable to increases in cash and cash equivalents resulting from improved billing and collection cycles as well as the receipt of progress payments which were partially offset by the timing of accounts payable.
Government programs, we are a significant participant in the defense industry and have not been negatively impacted by federal budget reductions to date. We believe many of our programs are well-aligned with national defense and other strategic priorities as we supply high-end equipment for submarines and aircraft carriers for the U.S.
Government Operations The revenues of our Government Operations segment are largely a function of national security spending by the U.S. Government. As a supplier of major nuclear components for certain U.S. Government programs, we are a significant participant in the defense industry and have not been negatively impacted by federal budget reductions to date.
Provision for Income Taxes Year Ended December 31, Year Ended December 31, 2022 2021 $ Change 2021 2020 $ Change (In thousands) Income before Provision for Income Taxes $ 314,377 $ 395,713 $ (81,336) $ 395,713 $ 362,172 $ 33,541 Provision for Income Taxes $ 75,757 $ 89,425 $ (13,668) $ 89,425 $ 82,976 $ 6,449 Effective Tax Rate 24.1% 22.6% 22.6% 22.9% For the year ended December 31, 2022, our provision for income taxes decreased $13.7 million to $75.8 million, while income before provision for income taxes decreased $81.3 million to $314.4 million when compared to the prior year.
Provision for Income Taxes Year Ended December 31, 2023 2022 $ Change (In thousands) Income before Provision for Income Taxes $ 321,400 $ 314,377 $ 7,023 Provision for Income Taxes $ 75,079 $ 75,757 $ (678) Effective Tax Rate 23.4% 24.1% For the year ended December 31, 2023, our provision for income taxes decreased $0.7 million to $75.1 million, while income before provision for income taxes increased $7.0 million to $321.4 million when compared to the prior year.
The amount of recoverable CAS pension costs recognized as revenue on an annual basis may differ from the amounts noted above.
The amount of recoverable CAS pension costs recognized as revenue on an annual basis may differ from the amounts noted above. See further discussion of our accounting for contracts and revenue recognition above and in Note 1 to our consolidated financial statements included in this Report.
A component of other income (expense) is net periodic benefit cost, which includes mark to market adjustments due to our immediate recognition of net actuarial gains (losses) for our pension and postretirement benefit plans.
Included in other income (expense) are components of net periodic benefit cost, which include mark to market adjustments due to our immediate recognition of net actuarial gains (losses) for our pension and postretirement benefit plans which changed to a loss of $20.9 million during the year ended December 31, 2023 compared to a gain of $4.0 million for the year ended December 31, 2022.
In April 2021, our Board of Directors authorized us to repurchase an indeterminate number of shares of our common stock up to an aggregate market value of $500 million. During the year ended December 31, 2022, we repurchased $20.0 million in shares of our common stock under this and prior share repurchase authorizations.
In April 2021, our Board of Directors authorized us to repurchase an indeterminate number of shares of our common stock up to an aggregate market value of $500 million. As of December 31, 2023, the total remaining share repurchase authorization was $397.6 million. See Item 5 of this Report for additional share repurchase information.
The increase was primarily related to continued growth in design and engineering work executed by our advanced technologies business, particularly in the defense and space markets, resulting in revenue growth of $35.4 million. 33 Table of Contents Increases in volume related to the manufacture of nuclear components for U.S.
The increase was driven by higher volume in the manufacture of nuclear components for U.S. Government programs, resulting in an increase of $100.0 million when compared to the prior year. Continued growth in design and engineering work executed by our advanced technologies business, particularly in the defense market, resulted in additional revenues of $61.6 million.
Government Operations Year Ended December 31, Year Ended December 31, 2022 2021 $ Change 2021 2020 $ Change (In thousands) Revenues $ 1,808,483 $ 1,725,097 $ 83,386 $ 1,725,097 $ 1,763,127 $ (38,030) Operating Income $ 336,501 $ 329,549 $ 6,952 $ 329,549 $ 345,250 $ (15,701) % of Revenues 18.6% 19.1% 19.1% 19.6% Year Ended December 31, 2022 vs. 2021 Revenues increased 4.8%, or $83.4 million, to $1,808.5 million in the year ended December 31, 2022 compared to $1,725.1 million in 2021.
Government Operations Year Ended December 31, 2023 2022 $ Change (In thousands) Revenues $ 2,031,337 $ 1,808,483 $ 222,854 Operating Income $ 374,682 $ 336,501 $ 38,181 % of Revenues 18.4% 18.6% Year Ended December 31, 2023 vs. 2022 Revenues increased 12.3%, or $222.9 million, to $2,031.3 million in the year ended December 31, 2023 compared to $1,808.5 million in 2022.
The nature, timing and duration of any related contracts are dependent on the demand and funding availability for such technologies. 29 Table of Contents Commercial Operations The revenues in this segment primarily depend on the demand and competitiveness of nuclear energy.
Commercial Operations The revenues in this segment primarily depend on the demand and competitiveness of nuclear energy.
The increase was primarily related to higher levels of in-plant inspection, maintenance and modification services totaling $26.2 million in addition to increases in revenues related to our nuclear fuel handling capabilities of $13.3 million. We 34 Table of Contents also experienced higher revenues in our fuel fabrication and medical radioisotopes businesses in 2021 when compared to the prior year.
The increase was primarily related to higher levels of in-plant inspection, maintenance, modification and refurbishment services of $24.1 million and an increase in revenues in our medical radioisotopes business of $14.6 million. We also experienced higher volume in our nuclear components manufacturing and fuel handling businesses. These increases were partially offset by decreased revenues in our fuel fabrication business.
We would expect to fund these opportunities with cash generated from operations or by raising additional capital through debt, equity or some combination thereof. We operate in two reportable segments: Government Operations and Commercial Operations.
We would expect to fund these opportunities with cash generated from operations or by raising additional capital through debt, equity or some combination thereof. Outlook We expect to recognize approximately 51% of the revenue associated with our backlog by the end of 2024, with the remainder to be recognized thereafter.
Commercial Operations Year Ended December 31, Year Ended December 31, 2022 2021 $ Change 2021 2020 $ Change (In thousands) Revenues $ 427,358 $ 407,082 $ 20,276 $ 407,082 $ 371,269 $ 35,813 Operating Income $ 27,418 $ 35,243 $ (7,825) $ 35,243 $ 36,915 $ (1,672) % of Revenues 6.4% 8.7% 8.7% 9.9% Year Ended December 31, 2022 vs. 2021 Revenues increased 5.0%, or $20.3 million, to $427.4 million in the year ended December 31, 2022 compared to $407.1 million in 2021.
The increase was due to the operating income impact of the changes in revenues noted above. 35 Table of Contents Commercial Operations Year Ended December 31, 2023 2022 $ Change (In thousands) Revenues $ 466,344 $ 427,358 $ 38,986 Operating Income $ 37,532 $ 27,418 $ 10,114 % of Revenues 8.0% 6.4% Year Ended December 31, 2023 vs. 2022 Revenues increased 9.1%, or $39.0 million, to $466.3 million in the year ended December 31, 2023 compared to $427.4 million in 2022.
Our Commercial Operations segment's offerings also include medical radioisotope products, radiopharmaceuticals and medical devices for use in diagnostic imaging and radiotherapeutic treatments. The medical isotope business will be the platform from which we plan to launch our Molybdenum-99 product line and a number of future radioisotope-based imaging, diagnostic and therapeutic products.
The medical isotope business will be the platform from which we plan to launch our Molybdenum-99 product line and a number of future radioisotope-based imaging, diagnostic and therapeutic products. 31 Table of Contents Critical Accounting Estimates Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States ("GAAP").
Consolidated operating income increased $2.7 million to $348.6 million in the year ended December 31, 2022 compared to $345.8 million in 2021. Operating income in our Government Operations segment increased $7.0 million, and we also experienced lower Unallocated Corporate expenses of $3.6 million.
Consolidated operating income increased $34.5 million to $383.1 million in the year ended December 31, 2023 compared to $348.6 million in 2022. Operating income in our Government Operations and Commercial Operations segments increased $38.2 million and $10.1 million, respectively. These increases were partially offset by higher Unallocated Corporate expenses of $13.8 million.
These decreases were partially offset by an increase in restructuring related costs and higher levels of legal and consulting costs associated with due diligence activities when compared to the prior year.
During 2023, we undertook several initiatives to transform our current information technology infrastructure which resulted in an increase in expense of $2.1 million. These increases were partially offset by a decrease in legal and consulting costs associated with due diligence activities when compared to the prior year.
A portion of this segment's operations is also conducted through joint ventures, which typically earn fees, and we account for them following the equity method of accounting. See Note 4 to our consolidated financial statements included in this Report for financial information on our equity method investments. This segment also specializes in the development of advanced technologies.
See Note 4 to our consolidated financial statements included in this Report for financial information on our equity method investments. This segment also specializes in the development of advanced technologies. The nature, timing and duration of any related contracts are dependent on the demand and funding availability for such technologies.
This increase was partially offset by a reduction in net borrowings of long-term debt of $225.0 million when compared to the prior year. At December 31, 2022, we had short-term and long-term investments with a fair value of $11.9 million. Our investment portfolio consists primarily of U.S. Government securities, corporate bonds and mutual funds.
The increase in cash used in financing activities was primarily attributable to a reduction in net borrowings of long-term debt of $181.3 million which was partially offset by a reduction in repurchases of common stock of $20.0 million. At December 31, 2023, we had long-term investments with a fair value of $9.5 million.
Unallocated Corporate Unallocated corporate expenses decreased $3.6 million to $15.3 million in the year ended December 31, 2022 compared to $18.9 million in 2021, primarily due to a decrease in healthcare costs and lower compensation related expense inclusive of stock-based compensation.
Unallocated Corporate Unallocated Corporate expenses increased $13.8 million to $29.2 million in the year ended December 31, 2023 compared to $15.3 million in 2022. The increase was primarily due to increases in healthcare costs totaling $8.7 million in addition to higher compensation related expenses.
Year Ended December 31, 2021 vs. 2020 Consolidated revenues increased slightly to $2,124.1 million in the year ended December 31, 2021 compared to $2,123.5 million in 2020, due to an increase in our Commercial Operations segment of $35.8 million which was partially offset by a decrease in revenues in our Government Operations segment of $38.0 million.
Consolidated Results of Operations Year Ended December 31, 2023 vs. 2022 Consolidated revenues increased 11.8%, or $263.5 million, to $2,496.3 million in the year ended December 31, 2023 compared to $2,232.8 million in 2022, due to increases in revenues in our Government Operations and Commercial Operations segments of $222.9 million and $39.0 million, respectively.
Navy and participate in the continuing cleanup, operation and management of critical government-owned nuclear sites, laboratories and manufacturing complexes maintained by the DOE, NASA and other federal agencies. However, it is possible that reductions in federal government spending could have an adverse impact on the operating results and cash flows of this segment in the future.
However, it is possible that reductions in federal government spending could have an adverse impact on the operating results and cash flows of this segment in the future. A portion of this segment's operations is also conducted through joint ventures, which typically earn fees, and we account for them following the equity method of accounting.
The decrease was due to the operating income impact of the changes in revenues noted above as well as lower levels of net favorable contract adjustments recorded in 2021 when compared to the prior year. These decreases were partially offset by an increase in operating income of $4.5 million associated with our joint venture activities.
Operating income increased $10.1 million to $37.5 million in the year ended December 31, 2023 compared to $27.4 million in 2022. The increase was primarily due to the operating income impact of the changes in revenues noted above in addition to lower restructuring-related expenses when compared to the prior year.
Net periodic benefit cost resulted in a decrease to other income of $88.9 million in 2022 when compared to the prior year, caused by increased losses related to mark to market adjustments totaling $86.2 million.
This was caused by a decrease in pension income of $40.6 million which was partially offset by a decrease in losses related to mark to market adjustments totaling $15.8 million.
Removed
Our reportable segments reflect changes we made during the first quarter of 2022 to better align our businesses by their government and commercial nature, which reflects the manner in which our operating segment information is reported for purposes of assessing operating performance and allocating resources.
Added
We believe many of our programs are well-aligned with national defense and other strategic priorities as we supply high-end equipment for submarines and aircraft carriers for the U.S. Navy and participate in the continuing cleanup, operation and management of critical government-owned nuclear sites, laboratories and manufacturing complexes maintained by the DOE, NASA and other federal agencies.
Removed
Prior to 2022, we reported three segments: Nuclear Operations Group, Nuclear Power Group and Nuclear Services Group. Our Government Operations segment consists of our legacy Nuclear Operations Group and Nuclear Services Group segments with certain research and development activities in the areas of advanced reactors and advanced manufacturing.
Added
Our Commercial Operations segment's offerings also include medical radioisotope products, radiopharmaceuticals and medical devices for use in diagnostic imaging and radiotherapeutic treatments.
Removed
Our Commercial Operations segment consists of our legacy Nuclear Power Group segment with certain research and development and commercialization activities in the areas of medical and industrial radioisotopes and radiopharmaceuticals. Both segments now include research and development and certain commercialization activities associated with new technologies previously reported outside of our reportable segments.
Added
The aggregate impact of changes in estimates increased our revenue and operating income as follows: Year Ended December 31, 2023 2022 2021 (In thousands) Revenues $ 24,728 $ 26,629 $ 30,719 Operating Income (1) $ 24,813 $ 24,405 $ 26,540 (1) During the year ended December 31, 2023, our Government Operations segment results were favorably impacted by contract adjustments related to a nuclear operations contract which resulted in an increase in operating income of $22.5 million.
Removed
The change in our reportable segments had no impact on our previously reported consolidated financial condition, results of operations or cash flows. We have applied the change in reportable segments to previously reported historical financial information and related disclosures included in this Report.
Added
Our Government Operations segment also recognized favorable adjustments totaling $27.9 million as a result of the successful negotiation of change orders related to cost growth that was driven by out-of-scope changes associated with the manufacture of non-nuclear components.
Removed
Outlook We expect to recognize approximately 42% of the revenue associated with our backlog by the end of 2023, with the remainder to be recognized thereafter. Government Operations The revenues of our Government Operations segment are largely a function of national security spending by the U.S. Government. As a supplier of major nuclear components for certain U.S.
Added
During the year ended December 31, 2022, our Government Operations segment results were negatively affected by contract adjustments for cost growth related to the manufacture of non-nuclear components which resulted in a decrease in operating income of $11.3 million.
Removed
We believe the following are our most critical accounting policies that we apply in the preparation of our financial statements.
Added
Discussions of our 2021 results and year-to-year comparisons between 2022 and 2021 that are not included in this Report can be found in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.
Removed
In the years ended December 31, 2022, 2021 and 2020, we recognized net favorable changes in estimates related to long-term contracts that increased operating income by approximately $24.4 million, $26.5 million and $42.8 million, respectively.
Added
We also experienced higher revenues associated with our uranium processing and downblending operations of $58.6 million. Operating income increased $38.2 million to $374.7 million in the year ended December 31, 2023 compared to $336.5 million in 2022.
Removed
See further discussion of our accounting for contracts and revenue recognition above and in Note 1 to our consolidated financial statements included in this Report. 30 Table of Contents Actual experience that differs from these assumptions or future changes in assumptions will affect our recognized benefit obligations and related costs.
Added
These increases were partially offset by the operating margin impact caused by a shift in our project and product line mix. In particular, our field services business experienced a considerable increase in volume associated with large scale, long-term construction projects in support of major refurbishment and plant life extension projects in Canada.
Removed
Adverse changes in the assumptions utilized in our impairment test could cause a reduction or elimination of excess fair value over carrying value, resulting in potential recognition of impairment.
Added
In addition, we experienced an increase in interest expense of $10.6 million in 2023 when compared to the prior year due primarily to an increase in the weighted-average interest rate on outstanding borrowings under our Credit Facility, as defined below.
Removed
Government is obligated to pay substantially all the decommissioning costs. Government Assistance In response to the COVID-19 pandemic, on March 27, 2020, the U.S. Government enacted the CARES Act, which among other things, provided employers an option to defer payroll tax payments for a limited period.
Added
Bank, as trustee. The Senior Notes due 2029 are guaranteed by each of the Company's present and future direct and indirect wholly owned domestic subsidiaries that is a guarantor under the Credit Facility.
Removed
As of December 31, 2022, we deferred $10.7 million of payroll taxes, which was subsequently paid in January 2023. Additionally, on April 11, 2020, the Canadian Government enacted the CEWS under the COVID-19 Economic Response Plan to prevent large layoffs and help employers offset a portion of their employee salaries and wages for a limited period.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changePrincipal Amount by Expected Maturity (In thousands) At December 31, 2022: Fair Value at Years Ending December 31, December 31, 2023 2024 2025 2026 2027 Thereafter Total 2022 Investments $ 3,801 — — — $ 1,479 $ 6,455 $ 11,735 $ 11,901 Average Interest Rate 0.76% — — — 10.45% 0.25% Fixed Interest Rate Debt — — — — — $ 800,000 $ 800,000 $ 710,000 Average Interest Rate — — — — — 4.125% Variable Interest Rate Debt $ 6,250 $ 6,250 $ 12,500 $ 12,500 $ 462,500 — $ 500,000 $ 509,263 Average Interest Rate 6.40% 5.26% 4.68% 4.66% 4.70% — 40 Table of Contents At December 31, 2021: Fair Value at Years Ending December 31, December 31, 2022 2023 2024 2025 2026 Thereafter Total 2021 Investments $ 3,822 — — — — $ 7,587 $ 11,409 $ 13,369 Average Interest Rate 0.92% — — — — 0.94% Fixed Interest Rate Debt — — — — — $ 800,000 $ 800,000 $ 812,833 Average Interest Rate — — — — — 4.125% Variable Interest Rate Debt — — — $ 400,000 — — $ 400,000 $ 395,100 Average Interest Rate — — — 2.90% — — Exchange Rate Sensitivity The following table provides information about our FX forward contracts outstanding at December 31, 2022 and presents such information in U.S. dollar equivalents.
Biggest changePrincipal Amount by Expected Maturity (In thousands) At December 31, 2023: Fair Value at Years Ending December 31, December 31, 2024 2025 2026 2027 2028 Thereafter Total 2023 Investments — — — $ 1,479 — $ 7,002 $ 8,481 $ 9,496 Average Interest Rate — — — 9.57 % — — Note Receivable $ 396 $ 7,022 — — — — $ 7,418 $ 7,300 Average Interest Rate 6.80 % 6.80 % — — — — Fixed Interest Rate Debt — — — — $ 400,000 $ 400,000 $ 800,000 $ 734,667 Average Interest Rate — — — — 4.13 % 4.13 % Variable Interest Rate Debt $ 6,250 $ 12,500 $ 12,500 $ 387,500 — — $ 418,750 $ 424,751 Average Interest Rate 6.24 % 4.98% 4.73% 4.75% — — 41 Table of Contents At December 31, 2022: Fair Value at Years Ending December 31, December 31, 2023 2024 2025 2026 2027 Thereafter Total 2022 Investments $ 3,801 — — — $ 1,479 $ 6,455 $ 11,735 $ 11,901 Average Interest Rate 0.76% — — — 10.45% 0.25% Fixed Interest Rate Debt — — — — — $ 800,000 $ 800,000 $ 710,000 Average Interest Rate — — — — — 4.13% Variable Interest Rate Debt $ 6,250 $ 6,250 $ 12,500 $ 12,500 $ 462,500 — $ 500,000 $ 509,263 Average Interest Rate 6.40% 5.26% 4.68% 4.66% 4.70% — Exchange Rate Sensitivity The following table provides information about our FX forward contracts outstanding at December 31, 2023 and presents such information in U.S. dollar equivalents.
Historically, we have hedged those risks with FX forward contracts. At December 31, 2022, the fair values of our outstanding derivative instruments were not significant. We do not enter into speculative derivative positions. Interest Rate Sensitivity The following tables provide information about our financial instruments that are sensitive to changes in interest rates.
Historically, we have hedged those risks with FX forward contracts. At December 31, 2023, the fair values of our outstanding derivative instruments were not significant. We do not enter into speculative derivative positions. Interest Rate Sensitivity The following tables provide information about our financial instruments that are sensitive to changes in interest rates.
See the heading "Liquidity and Capital Resources" in Item 7 of this Report for additional information on our debt instruments. We also have exposure from changes in interest rates related to our cash equivalents and our investment portfolio, which consists primarily of U.S. Government securities, corporate bonds and mutual funds.
See the heading "Liquidity and Capital Resources" in Item 7 of this Report for additional information on our debt instruments. We also have exposure from changes in interest rates related to our cash equivalents and our investment portfolio, which consists primarily of corporate bonds and mutual funds.
At December 31, 2022, we had (i) $500.0 million in outstanding borrowings and $497.5 million available under the Credit Facility, (ii) an aggregate principal amount of $400.0 million of Senior Notes due 2028 and (iii) an aggregate principal amount of $400.0 million of Senior Notes due 2029.
At December 31, 2023, we had (i) $418.8 million in outstanding borrowings and $573.3 million available under the Credit Facility, (ii) an aggregate principal amount of $400.0 million of Senior Notes due 2028 and (iii) an aggregate principal amount of $400.0 million of Senior Notes due 2029.
Dollars (in thousands) Year Ending Fair Value at Average Contractual Foreign Currency December 31, 2023 December 31, 2022 Exchange Rate Canadian dollar $ 9,636 $ (410) 1.2899 U.S. dollar (selling Canadian dollar) $ 414,364 $ 1,129 1.3505 Euro (selling Canadian dollar) $ 7,058 $ 218 1.4159 Year Ending Fair Value at Average Contractual Foreign Currency December 31, 2024 December 31, 2022 Exchange Rate U.S. dollar (selling Canadian dollar) $ 4,373 $ 183 1.2864 Euro (selling Canadian dollar) $ 3,328 $ 33 1.4626 41 Table of Contents
Dollars (in thousands) Year Ending Fair Value at Average Contractual Foreign Currency December 31, 2024 December 31, 2023 Exchange Rate Canadian dollar $ 4,854 $ 120 1.3540 U.S. dollar (selling Canadian dollar) $ 427,729 $ (10,159) 1.3550 Euro (selling Canadian dollar) $ 6,541 $ 21 1.4636 Year Ending Fair Value at Average Contractual Foreign Currency December 31, 2025 December 31, 2023 Exchange Rate Canadian dollar $ 3,828 $ 86 1.3480 42 Table of Contents

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