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What changed in BWX Technologies, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of BWX Technologies, Inc.'s 2023 and 2024 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 2024 report.

+247 added−226 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-27)

Top changes in BWX Technologies, Inc.'s 2024 10-K

247 paragraphs added · 226 removed · 197 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

64 edited+13 added−8 removed126 unchanged
Biggest changeWe established the BWXT Technical Fellow program which honors and celebrates some of our most talented employees for their contributions to driving innovation and inspiring creativity. Our Technical Fellows offer a breadth of knowledge and diversity of technical expertise that can be focused on developing creative solutions to numerous challenges we face in our industry.
Biggest changeOur Technical Fellows offer a breadth of knowledge and diversity of technical expertise that can be focused on developing creative solutions to numerous challenges we face in our industry. Diversity 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.
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.
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 design and manufacturing; • 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.
We make available through the Investors section of this website under "SEC Filings," free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, our proxy statement, statements of beneficial ownership of securities on Forms 3, 4 and 5 and amendments to those reports as soon as reasonably practicable after we electronically file those materials with, or furnish those materials to, the Securities and Exchange Commission (the "SEC").
We make available through the Investors section of this website under "SEC Filings," free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, our proxy statement, statements of beneficial ownership of securities on Forms 3, 4 and 5 and amendments to those reports as soon as reasonably practicable after we electronically file those materials with, or furnish those materials to, the Securities and Exchange Commission ("SEC").
Government contractor, we are subject to federal regulations under which our right to receive future awards of new federal contracts would be unilaterally suspended or barred if we were convicted of a crime or indicted based on allegations of a violation of specific federal statutes. In addition, some of our contracts with the U.S.
As a U.S. Government contractor, we are subject to federal regulations under which our right to receive future awards of new federal contracts would be unilaterally suspended or barred if we were convicted of a crime or indicted based on allegations of a violation of specific federal statutes. In addition, some of our contracts with the U.S.
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 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 are the manufacture of medical radioisotopes, radiopharmaceuticals and medical devices, as well as partnerships with life science and pharmaceutical companies developing new drugs.
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.
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 2024, the U.S.
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.
Savannah River Mission Completion, LLC, a limited liability company formed by BWXT TSG, Amentum Environment & Energy, Inc. 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.
Environmental Our operations and properties are subject to a wide variety of increasingly complex and stringent federal, foreign, state and local environmental laws and regulations, including those governing discharges into the air and water, the handling and disposal of solid and hazardous wastes, the remediation of soil and groundwater contaminated by hazardous substances and the health and safety of employees.
Environmental Our operations and properties are subject to a wide variety of increasingly complex and stringent federal, foreign, state and local environmental laws and regulations, including those governing discharges into the air and water, the handling, storage and disposal of mixed, solid and hazardous wastes, the remediation of soil and groundwater contaminated by hazardous substances and the health and safety of employees.
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 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 Environment & Energy, Inc., Fluor Corporation, Jacobs Engineering Group, Inc., Northrop Grumman Corporation, Huntington Ingalls Industries, Inc., Honeywell International, Inc., Leidos, Inc., Westinghouse Electric Corporation and AtkinsRéalis.
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.
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 reliable. Additionally, we and the U.S. Government expend significant effort to monitor and maintain the supplier base for our Government Operations segment.
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.
Lawrence Livermore National Security, LLC, a limited liability company formed by the University of California, Bechtel National, Inc., Amentum Environment & Energy, Inc. and BWXT Government Group, Inc., manages and operates Lawrence Livermore National Laboratory located in Livermore, California.
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 provided financial assurance totaling $68.1 million and $68.1 million during the years ended December 31, 2024 and 2023, respectively, with surety bonds for the ultimate decommissioning of these licensed facilities.
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.
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.
Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in our forward-looking statements. We have discussed many of these factors in more detail elsewhere in this Report. These factors are not necessarily all the factors that could affect us.
Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in our forward-looking statements. 13 Table of Contents We have discussed many of these factors in more detail elsewhere in this Report. These factors are not necessarily all the factors that could affect us.
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.
This segment competes with a number of nuclear medicine 5 Table of Contents 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.
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.
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 and customer-owned materials in our care, custody and control.
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.
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.
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.
At December 31, 2024, approximately 2,300 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.
In addition, we maintain the BWXT Ethics Helpline to allow employees to report any concerns relating to ethics or other concerns confidentially and, if they choose, anonymously. We investigate and take prompt action to correct conduct that is inconsistent with our Code and other policies.
In addition, we maintain the BWXT Ethics Helpline to allow employees to report any concerns 8 Table of Contents relating to ethics or other concerns confidentially and, if they choose, anonymously. We investigate and take prompt action to correct conduct that is inconsistent with our Code and other policies.
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.
In addition, compliance with existing environmental regulations necessitated capital expenditures of $0.8 million, $0.7 million and $1.6 million in the years ended December 31, 2024, 2023 and 2022, respectively. We expect to spend another $3.7 million on such capital expenditures over the next five years.
Government generally has the right not to exercise option periods and may not exercise an option period for various reasons including, but not limited to, annual funding determinations. In addition, contracts between the U.S. Government and its prime contractors usually contain standard provisions for termination at the convenience of the U.S. Government or the prime contractor. As a U.S.
Government generally has the right not to exercise option periods and may not exercise an option period for various reasons including, but 3 Table of Contents not limited to, annual funding determinations. In addition, contracts between the U.S. Government and its prime contractors usually contain standard provisions for termination at the convenience of the U.S. Government or the prime contractor.
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.
We expect to recognize approximately 48% of the revenue associated with our backlog by the end of 2025, 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.
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.
Of our total environmental accruals at December 31, 2024 and 2023, $9.2 million and $10.6 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.
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.
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.
While our management considers these statements and assumptions to be reasonable, they are inherently subject to numerous factors, including potentially the risk factors described in the section labeled Item 1A of this Report, most of which are difficult to predict and many of which are beyond our control.
While our management considers these statements and assumptions to be reasonable, they are inherently subject to numerous factors, including potentially the risk factors described in the section labeled Item 1A of this Report, most of which are difficult to predict and many of which are beyond our control. As a contractor to the U.S.
Syncom Space Services, LLC is a limited liability company formed by PAE Applied Technologies, LLC (acquired by Amentum in 2022) and BWXT Nuclear Operations Group, Inc. to provide facility operations and maintenance services for institutional and technical facilities, and perform test and manufacturing support services at two NASA facilities – the Stennis Space Center in Hancock County, Mississippi and the Michoud Assembly Facility in New Orleans, Louisiana. • Paducah Gaseous Diffusion Plant Deactivation and Remediation Project.
Syncom Space Services, LLC is a limited liability company formed by PAE Applied Technologies, LLC (acquired by Amentum in 2022) and BWXT Nuclear Operations Group, Inc. to provide facility operations and maintenance services for institutional and technical facilities, and perform test and manufacturing support services at two NASA facilities – the Stennis Space Center in Hancock County, Mississippi and the Michoud Assembly Facility in New Orleans, Louisiana.
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.
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, 2024, we employed approximately 8,700 persons worldwide, predominantly in the U.S. (6,800 employees) and Canada (1,900 employees). Many of our operations are subject to union contracts, which we negotiate periodically.
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.
Our compliance with federal, foreign, state and local environmental control and protection regulations resulted in pre-tax expense of approximately $22.7 million, $20.0 million and $20.0 million in the years ended December 31, 2024, 2023 and 2022, respectively.
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
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; Director Conflict of Interest Policy; Amended and Restated Bylaws; and charters for the Audit and Finance, Governance and Compensation Committees of our Board of Directors.
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.
We provided financial assurance totaling $28.5 million and $44.3 million during the years ended December 31, 2024 and 2023, respectively, with letters of credit and surety bonds for the ultimate decommissioning of these licensed facilities. At December 31, 2024 and 2023, we had total environmental accruals, including asset retirement obligations, of $103.4 million and $101.1 million, respectively.
Claims as a result of our operations could adversely impact the ability of our insurance subsidiary to respond to all claims presented.
Our insurance subsidiary does not provide insurance to unrelated parties. Claims as a result of our operations could adversely impact the ability of our insurance subsidiary to respond to all claims presented.
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).
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. • West Valley Demonstration Project Phase 1B.
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.
A follow-on contract was awarded by the DOE to another contractor and transition is expected to occur during 2025. • West Valley Demonstration Project Phase I Decommissioning and Facility Disposition. CH2M Hill-BWXT West Valley, LLC is a limited liability company formed by Amentum Environment & Energy, Inc. (formerly CH2M Hill Constructors, Inc.), BWXT TSG and Environmental Chemical Corporation.
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.
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, 2024, our ending backlog was $4,842.5 million, which included $387.4 million of unfunded backlog related to U.S. Government contracts.
We also provide nuclear fabrication and other services to the nuclear power industry in Canada. Canada's Nuclear Liability and Compensation Act ("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.
Canada's Nuclear Liability and Compensation Act ("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.
Government Operations We have specialized technical capabilities that have allowed us to be a valued supplier of nuclear components and fuel for the U.S. Government's naval nuclear fleet since the 1950s. Because of the technical and regulatory standards required to meet U.S.
Competition The competitive environments in which each segment operates are described below. Government Operations We have specialized technical capabilities that have allowed us to be a valued supplier of nuclear components and fuel for the U.S. Government's naval nuclear fleet since the 1950s. Because of the technical and regulatory standards required to meet U.S.
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.
Excluding customer-sponsored research and development, the majority of our activities in this area for the years ended December 31, 2024, 2023 and 2022 related to the development of technologies in the area of medical and industrial radioisotopes, radiopharmaceuticals, additive and autonomous manufacturing, advanced reactors and nuclear fuel.
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.
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. 7 Table of Contents Providing comprehensive, competitive, and affordable retirement, healthcare, income protection and other benefits is also central to our attraction and retention strategy.
Accordingly, we review contract price and cost estimates regularly as the work progresses and reflect adjustments in profit proportionate to the percentage of completion in the period when we revise those estimates.
We generally recognize our contract revenues and related costs on an over time basis. Accordingly, we review contract price and cost estimates regularly as the work progresses and reflect adjustments in profit proportionate to the percentage of completion in the period when we revise those estimates.
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.
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.
Although this ARCO indemnity would cover claims by the Army Corps to seek recovery from BWXT for SLDA cleanup costs, no assurance can be given that this indemnity will be available or sufficient in the event such claims are asserted. For additional discussion of environmental matters, see Note 10 to our consolidated financial statements included in this Report.
Although this ARCO indemnity would cover claims by the Army Corps to seek recovery from BWXT for SLDA cleanup costs, 12 Table of Contents no assurance can be given that this indemnity will be available or sufficient in the event such claims are asserted.
Our wholly owned captive insurance subsidiary provides primary workers' compensation, employer's liability, commercial general liability, automotive liability and property insurance to support our operations. Liabilities include provisions for estimated losses incurred but not reported (“IBNR”), as well as estimated provisions for known claims. IBNR reserve estimates are primarily based upon historical loss experience, industry data and other actuarial assumptions.
Our wholly owned captive insurance subsidiary provides primary workers' compensation, employer's liability, commercial general and excess liability, automotive liability and property insurance to support our operations. Liabilities include provisions for estimated losses incurred but not reported ("IBNR"), as well as estimated provisions for known claims.
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 require us to provide advance notice in connection with any contemplated sale or shut down of the relevant facility. In each of these situations, the U.S. Government has an exclusive right to negotiate a mutually acceptable purchase of the facility.
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.
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.
Reserve estimates are adjusted in future periods as actual losses differ from experience. Through our insurance subsidiary, we also have reinsurance coverage with third parties for certain losses above a per occurrence and/or aggregate retention. Receivables for reinsurance coverage are recognized when realization is deemed probable.
IBNR reserve estimates are primarily based upon historical loss experience, industry data and other actuarial assumptions. Reserve estimates are adjusted in future periods as actual losses differ from experience. Through our insurance subsidiary, we also have reinsurance coverage with third parties for certain losses above a per occurrence and/or aggregate retention.
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.
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.
We are also involved in manufacturing activities at licensed facilities in Canada that are subject to continuing reviews by governmental agencies in Canada, including the CNSC.
As a result of these activities, we are subject to continuing reviews by governmental agencies, including the U.S. Environmental Protection Agency and the NRC. We are also involved in manufacturing activities at licensed facilities in Canada that are subject to continuing reviews by governmental agencies in Canada, including the CNSC.
We may also have business reasons in the future to have our insurance subsidiary accept other risks that we cannot or do not wish to transfer to outside insurance companies. These risks may be considerable in any given year or cumulatively. Our insurance subsidiary does not provide insurance to unrelated parties.
Receivables for reinsurance coverage are recognized when realization is deemed probable. We may also have business reasons 10 Table of Contents in the future to have our insurance subsidiary accept other risks that we cannot or do not wish to transfer to outside insurance companies. These risks may be considerable in any given year or cumulatively.
The D&I Committee works to identify and implement changes to promote awareness and foster a culture of diversity and inclusion throughout the workforce. In addition, we participate in numerous conferences and career fairs each year that focus on diversity, including those hosted by the National Society of Black Engineers and the Society of Women Engineers.
In addition, we participate in numerous conferences and career fairs each year that focus on diversity, including those hosted by the National Society of Black Engineers and the Society of Women Engineers.
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.
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. Our income protection plans provide coverage for employees in the event of an unexpected illness or injury.
The Price-Anderson Act, as amended, includes a sunset provision and requires renewal each time that it expires. Contracts that were entered into during a period of time that the Price-Anderson Act was in full force and effect continue to receive the benefit of the Price-Anderson Act's nuclear indemnity. The Price-Anderson Act is set to expire on December 31, 2025.
Contracts that were entered into during a period of time that the Price-Anderson Act was in full force and effect continue to receive the benefit of the Price-Anderson Act's nuclear indemnity. The Price-Anderson Act is set to expire on December 31, 2065. We also provide nuclear fabrication and other services to the nuclear power industry in Canada.
Our operations in designing, engineering, manufacturing, constructing and servicing nuclear power equipment and components for our commercial nuclear utility customers subject us to various risks, including, without limitation, damage to our customers' property and third-party claims for personal injury, environmental liability, death and property damage.
In cases where we purchase insurance, we are subject to the creditworthiness of the relevant insurer(s), the available limits of the coverage, our retention under the relevant policy, exclusions in the policy and gaps in coverage. 9 Table of Contents Our operations in designing, engineering, manufacturing, constructing and servicing nuclear power equipment and components for our commercial nuclear utility customers subject us to various risks, including, without limitation, damage to our customers' property and third-party claims for personal injury, environmental liability, death and property damage.
In 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.
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.
We generally purchase these raw materials and components as needed for individual contracts. Although shortages of some raw materials have existed occasionally, no serious shortage exists at the present time.
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 generally purchase these raw materials and components as needed for individual contracts. Although shortages of some raw materials have existed occasionally, no serious shortage exists at the present time.
These laws and regulations include the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended ("CERCLA"), the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act and similar laws that provide for responses to, and liability for, releases of hazardous substances into the environment.
Such laws and regulations may also expose us to liability for the conduct of or conditions caused by others or for our acts that were in compliance with all applicable laws at the time such acts were performed. 11 Table of Contents These laws and regulations include the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended ("CERCLA"), the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act and similar laws that provide for responses to, and liability for, releases of hazardous substances into the environment.
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").
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 Aerojet Ordnance Tennessee, Inc.
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.
Backlog may not be indicative of future operating results, and projects in our backlog may be cancelled, modified or otherwise altered by customers. 4 Table of Contents Our backlog at December 31, 2024 and 2023 was as follows: December 31, 2024 December 31, 2023 (In approximate millions) Government Operations $ 3,913 81 % $ 3,217 80 % Commercial Operations 930 19 % 781 20 % Total Backlog $ 4,843 100 % $ 3,998 100 % We do not include the value of our unconsolidated joint venture contracts in backlog.
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.
Customers We provide our products and services to a diverse customer base, including the 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, 2024, 2023 and 2022, the U.S.
We offer online and in-person professional development and training, as well as mentoring programs, to enhance the knowledge, skills and advancement opportunities for our employees. To further our employee development goals, we partner with a number of educational institutions for accredited, vocational and technical upskilling programs.
We also offer retirement, investment, and tax savings/deferral opportunities to our employees. Employee Development The professional development of our employees is critical to our success. We offer online and in-person professional development and training, as well as mentoring programs, to enhance the knowledge, skills and advancement opportunities for our employees.
We provide tuition reimbursement to employees pursuing job-related, career enhancing courses and provide full tuition grants for the completion of undergraduate and graduate degree programs through an accredited university partner. For employees identified with high potential for promotion to leadership roles, we routinely offer leadership development programs focused on preparing future leaders for their next career steps.
To further our employee development goals, we partner with a number of educational institutions for accredited, vocational and technical upskilling programs. We provide tuition reimbursement to employees pursuing job-related, career enhancing courses and provide full tuition grants for the completion of undergraduate and graduate degree programs through an accredited university partner.
We perform significant amounts of work for the U.S. Government under both prime contracts and subcontracts and operate certain facilities that are licensed to possess and process special nuclear materials. As a result of these activities, we are subject to continuing reviews by governmental agencies, including the U.S. Environmental Protection Agency and the NRC.
For additional discussion of environmental matters, see Note 10 to our consolidated financial statements included in this Report. We perform significant amounts of work for the U.S. Government under both prime contracts and subcontracts and operate certain facilities that are licensed to possess and process special nuclear materials.
Four Rivers Nuclear Partnership, LLC is a limited liability company formed by CH2M Hill Constructors, Inc., BWXT TSG and Fluor Federal Services, Inc. to provide nuclear operations, deactivation and remediation services at the Paducah Gaseous Diffusion Plant in Paducah, Kentucky. Customers We provide our products and services to a diverse customer base, including the U.S.
(formerly CH2M Hill Constructors, Inc.), BWXT TSG and Fluor Federal Services, Inc. to provide nuclear operations, deactivation and remediation services at the Paducah Gaseous Diffusion Plant in Paducah, Kentucky. 6 Table of Contents • Pantex Plant.
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.
We maintain a Diversity and Inclusion ("D&I") Committee comprised of a rotating group of employees representing various job functions, levels and backgrounds. The D&I Committee works to identify and implement changes to promote awareness and foster a culture of diversity and inclusion throughout the workforce.
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.
Government represented approximately 76%, 75% and 76% of our total consolidated revenues, respectively. No individual non-U.S. Government customer accounted for more than 10% of our consolidated revenues in the years ended December 31, 2024, 2023 or 2022.
Removed
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.
Added
On November 4, 2024, we announced our intention to acquire Aerojet Ordnance Tennessee, Inc. ("A.O.T"), a subsidiary of L3Harris Technologies, Inc. This acquisition was subsequently completed on January 3, 2025. A.O.T is a leading provider of advanced special materials which will further enhance our capabilities to develop and manufacture advanced materials and products for commercial, military and space applications.
Removed
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.
Added
A.O.T. will be reported as part of our Government Operations segment. Kinectrics, Inc. On December 27, 2024, we entered into an agreement to acquire Kinectrics Holdings, Inc., the parent company of Kinectrics, Inc. ("Kinectrics").
Removed
Backlog may not be indicative of future operating results, and projects in our backlog may be cancelled, modified or otherwise altered by customers.
Added
Kinectrics is a leader in providing lifecycle management services for the global nuclear power and transmission and distribution markets, and in the production and supply of isotopes for the radiopharmaceutical industry. Kinectrics employs over 1,300 employees located across 20 sites worldwide. This acquisition is targeted to close in the middle of 2025, following necessary regulatory and other approvals.
Removed
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.
Added
Once completed, Kinectrics will be reported as part of our Commercial Operations segment. See Note 2 to our consolidated financial statements included in this Report for additional information about our recent acquisition activity. 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.
Removed
Our income protection plans provide coverage for employees in the event of an unexpected illness or injury. We also offer retirement, investment, and tax savings/deferral opportunities to our employees. Employee Development The professional development of our employees is critical to our success.
Added
West Valley Cleanup Alliance, LLC is a limited liability company formed by BWXT TSG, Jacobs Technology, Inc. and Geosyntec Consultants, Inc. to achieve significant risk and financial liability reduction and provide the best overall optimal solution for accelerated completion and closure of the site near West Valley, New York.
Removed
In cases where we purchase insurance, we are subject to the creditworthiness of the relevant insurer(s), the available limits of the coverage, our retention under the relevant policy, exclusions in the policy and gaps in coverage.
Added
The Phase 1B contract begins in June 2025 and will continue the current cleanup mission and will include the demolition of remaining components of the main plant process building, soil remediation and disposition, waste management and disposition, environmental monitoring, surveillance and maintenance and program support activities. • Synergy Achieving Consolidated Operations & Maintenance (SACOM).
Removed
Such laws and regulations may also expose us to liability for the conduct of or conditions caused by others or for our acts that were in compliance with all applicable laws at the time such acts were performed.
Added
A reduced scope, follow-on contract was awarded by NASA to another contractor in 2024 and transition is expected to occur during 2025. • Paducah Gaseous Diffusion Plant Deactivation and Remediation Project. Four Rivers Nuclear Partnership, LLC is a limited liability company formed by Amentum Environment & Energy, Inc.
Removed
Accordingly, we can provide no assurance that we will not incur significant environmental compliance costs in the future. We have been identified as a potentially responsible party at various cleanup sites under CERCLA.
Added
PanTeXas Deterrence, LLC is a limited liability company formed by BWXT TSG, Fluor Federal Services, Inc, SOC LLC and The Texas A&M University System to provide nuclear production operations services, long-term plant modernization and capability enhancement/stewardship along with other required services to support the NNSA and broader national security requirements assigned to the Pantex Plant near Amarillo, Texas. • Hanford Integrated Tank Disposition Contract.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf any such strikes or other work stoppages were to occur, we could experience a significant disruption of operations. In addition, negotiations with unions could divert management attention. New union contracts or the organization of nonunion employees could result in increased operating costs, as a result of higher wages or benefit expenses, for both union and nonunion employees.
Biggest changeIf we are unable to negotiate acceptable new contracts with our unions from time to time, we could experience strikes or other work stoppages by the affected employees. If any such strikes or other work stoppages were to occur, we could experience a significant disruption of operations. In addition, negotiations with unions could divert management's attention.
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.
However, during periods covered by a continuing resolution, 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 a continuing resolution, the U.S.
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.
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; • 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.
Maintaining adequate bonding and letter of credit capacity is necessary for us to successfully bid on and win various contracts. In line with industry practice, we are often required to post standby letters of credit and surety bonds to support contractual obligations to customers as well as other obligations.
Maintaining adequate bonding and letter of credit capacity is necessary for us to successfully bid on and win various contracts. In line with industry practice, we are often required to post standby letters of credit, bank guarantees and surety bonds to support contractual obligations to customers as well as other obligations.
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.
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 15 Table of Contents 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.
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.
Any public health epidemic, pandemic or outbreak 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.
In addition, a single-source or limited-source supplier of a key component could potentially exert significant bargaining power over price, quality, warranty claims or other terms relating to these materials, which could have a material adverse effect on our financial condition, results of operations and cash flows.
In addition, a single-source or limited-source supplier of a key component could potentially exert significant bargaining power over price, quality, warranty claims or other terms 20 Table of Contents relating to these materials, which could have a material adverse effect on our financial condition, results of operations and cash flows.
There can be no assurance that we will be successful in addressing all of the technological challenges to developing and commercializing this technology or in obtaining the required authorizations from the FDA, Health Canada or the CNSC. In addition, commercialization of the medical radioisotope technology could subject us to product liability claims.
There can be no assurance that we will be successful in addressing all of the technological challenges to developing and commercializing this technology or in obtaining the required authorizations from the FDA, Health Canada or the CNSC. In addition, commercialization of the medical radioisotope technology could 21 Table of Contents subject us to product liability claims.
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.
If an incident, damages or 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.
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.
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.
As required by GAAP, we estimate loss contingencies and establish reserves based on our assessment of contingencies where liability is deemed probable and reasonably estimable in light of the 22 Table of Contents facts and circumstances known to us at a particular point in time.
As required by GAAP, we estimate loss contingencies and establish reserves based on our assessment of contingencies where liability is deemed probable and reasonably estimable in light of the facts and circumstances known to us at a particular point in time.
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.
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 17 Table of Contents epidemic, pandemic or outbreak.
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.
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.
Our ability to secure such financing will depend in part on prevailing capital market conditions, as well as conditions in our business and operating results. Moreover, to the extent an acquisition transaction financed by non-equity consideration results in goodwill, it will reduce our tangible net worth, which might have an adverse effect on potential credit and bonding capacity.
Our ability to secure such financing will depend in part on prevailing capital market conditions, as well as conditions in our business and operating results. Moreover, to the extent an acquisition transaction financed by non-equity consideration results in goodwill, it will reduce our tangible net worth, which may have an adverse effect on potential credit and surety bond capacity.
Additionally, an acquisition may bring us into businesses we have not previously conducted and expose us to additional business risks that are different than those we have historically experienced. 20 Table of Contents Our business strategy also includes development and commercialization of new technologies to support our growth, which requires significant investment and involves various risks and uncertainties.
Additionally, an acquisition may bring us into a business we have not previously conducted and expose us to additional business risks that are different than those we have historically experienced. Our business strategy also includes development and commercialization of new technologies to support our growth, which requires significant investment and involves various risks and uncertainties.
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.
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.
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.
As of December 31, 2024, we had underfunded defined benefit pension and postretirement benefit plans with obligations totaling approximately $103.9 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.
Changes in environmental and climate change laws or regulations, including laws relating to greenhouse gas emissions, could lead to new or additional investment in facilities and could increase environmental compliance expenditures, including increased energy, raw material and other costs.
Changes in environmental and climate change laws or regulations, including laws relating to greenhouse gas emissions, could lead to new or additional investment in facilities and could increase environmental 23 Table of Contents compliance expenditures, including increased energy, raw material and other costs.
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.
Government may not renew or may seek to modify or terminate our existing contracts. For the year ended December 31, 2024, U.S. Government contracts comprised approximately 76% of our total consolidated revenues.
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.
In addition, these cuts could adversely 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. Government operates under a continuing resolution to continue funding the U.S. Government.
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.
In addition, effective intellectual property protection may be limited or unavailable in certain jurisdictions 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. We rely significantly on proprietary technology, information, processes and know-how that are not subject to patent or copyright protection.
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.
U.S. and international regulators, investors and other stakeholders are increasingly focused on environmental, social and governance matters. 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.
Such additional requirements could result in additional expense and, if we are unable to comply with such regulatory changes, could have a material adverse effect on our business, financial condition and results of operations.
If we are unable to comply with any such regulatory changes, it could have a material adverse effect on our business, financial condition and results of operations.
Our current estimates of our contract costs and the profitability of our long-term projects, although reasonably reliable when made, could change as a result of the uncertainties associated with these types of contracts, and if adjustments to overall contract costs are significant, the reductions or reversals of previously recorded revenue and profits could be material in future periods.
Our current estimates of our contract costs and the profitability of our long-term projects, although reasonably reliable when made, could change as a result of the uncertainties associated with these types of contracts, and if adjustments to overall contract costs are significant, the reductions or reversals of previously recorded revenue and profits could be material in future periods. 22 Table of Contents Our backlog is subject to unexpected adjustments and cancellations and may not be a reliable indicator of future revenues or earnings.
If we are unable to adequately address any such performance issues, then our customer may exercise its right to terminate a joint project, exposing us to legal liability, loss of reputation and reduced profit. 21 Table of Contents Under these arrangements, participating parties may disagree on business decisions and strategies.
If we are unable to adequately address any such performance issues, then our customer may exercise its right to terminate a joint project, exposing us to legal liability, loss of reputation and reduced profit. Under these arrangements, participating parties may disagree on business decisions and strategies. These disagreements could result in delays, additional costs and risks of litigation.
We are routinely audited and reviewed by the U.S. Government and its agencies. These agencies review our performance under our contracts, our cost structure and our compliance with applicable laws, regulations and standards, as well as the adequacy of, and our compliance with, our internal control systems and policies.
Government and its agencies. These agencies review our performance under our contracts, our cost structure and our compliance with applicable laws, regulations and standards, as well as the adequacy of, and our compliance with, our internal control systems and policies.
We utilize bonding facilities, but, as is typically the case, the issuance of bonds under each of those facilities is at the surety's sole discretion. In addition, we have capacity limits under our credit facility for letters of credit.
We utilize surety bond facilities, but, as is typically the case, the issuance of surety bonds under these facilities is at the surety's sole discretion. In addition, we have capacity limits under our credit facility for letters of credit and bank guarantees.
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.
We may not be able to maintain insurance coverage at adequate levels. 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.
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.
Our inability to obtain adequate letters of credit, bank guarantees and surety bonds 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, 2024, we had $35.0 million in letters of credit and bank guarantees and $278.7 million in surety bonds outstanding.
If we fail to effectively manage any leadership changes, including organizational and strategic changes, such failure could have a material adverse effect on our ability to successfully attract, motivate and retain highly qualified employees, as well as our business, financial condition and results of operations. 19 Table of Contents Negotiations with labor unions and possible work stoppages and other labor problems could divert management's attention and disrupt operations.
If we fail to effectively manage any leadership changes, including organizational and strategic changes, such failure could have a material adverse effect on our ability to successfully attract, motivate and retain highly qualified employees, as well as our business, financial condition and results of operations.
We rely on a limited number of suppliers, including single-source suppliers, which could, under certain circumstances, adversely affect our revenues and operating results. We rely on a limited number of suppliers, including several single-source suppliers, for materials used in our products in both our Government Operations and Commercial Operations segments.
We rely on a limited number of suppliers, including several single-source suppliers, for materials used in our products in both our Government Operations and Commercial Operations segments.
Moreover, due to events that affect the insurance and bonding and credit markets generally, bonding and letters of credit may be more difficult to obtain in the future or may only be available at significant additional cost. There can be no assurance that letters of credit or bonds will continue to be available to us on reasonable terms.
Moreover, due to events that affect the insurance and bonding and credit markets generally, surety bonds, letters of credit and bank guarantees may be more difficult to obtain in the future or may only be available at significant additional cost.
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.
Government fails to renew these contracts or modifies key terms, our results of operations and cash flows would be adversely affected. 14 Table of Contents 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.
Accordingly, we review contract price and cost estimates regularly as the work progresses and reflect adjustments proportionate to our progress made towards completion in income in the period when we revise those estimates.
We generally recognize revenues and profits under our long-term contracts on an over time basis. Accordingly, we review contract price and cost estimates regularly as the work progresses and reflect adjustments proportionate to our progress made towards completion in income in the period when we revise those estimates.
The potential also exists for competitors to emerge with alternative technologies. We can provide no assurance that those competitors will not develop and commercialize similar or superior technologies sooner than we can or at a significant cost or price advantage. We conduct a portion of our operations through joint venture entities, over which we may have limited ability to influence.
The potential also exists for competitors to emerge with alternative technologies. We can provide no assurance that those competitors will not develop and commercialize similar or superior technologies sooner than we can or at a significant cost or price advantage.
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.
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.
Because of project cancellations or changes in project scope and schedule, we cannot predict with certainty when or if backlog will be performed. In addition, even where a project proceeds as scheduled, it is possible that contracted parties may default and fail to pay amounts owed to us or poor project performance could increase the cost associated with a project.
In addition, even where a project proceeds as scheduled, it is possible that contracted parties may default and fail to pay amounts owed to us or poor project performance could increase the cost associated with a project.
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.
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.
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.
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. During periods covered by a continuing resolution, we expect our key programs will continue to be supported and funded under the continuing resolution.
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.
Actions taken in response to an accident could result in significant costs. 25 Table of Contents 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.
Although we have product liability insurance coverage, with policy limits that we believe are customary for the medical radioisotope industry, such coverage may not be adequate, requiring that we pay judgments or settlement amounts in excess of policy limits. We may not be able to maintain insurance coverage at adequate levels.
Claims, as a result of our operations, could adversely impact the ability of our captive insurance company subsidiary to respond to all claims presented. 19 Table of Contents Although we have product liability insurance coverage, with policy limits that we believe are customary for the medical radioisotope industry, such coverage may not be adequate, requiring that we pay judgments or settlement amounts in excess of policy limits.
(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).
(with an available indemnification amount of approximately $16.5 billion) and in foreign countries (with an available indemnification amount of $2 billion). The statutory authority for indemnification under the Price-Anderson Act has been extended by Congress five times, most recently through December 2065 by Section 107 to the Further Consolidated Appropriations Action, 2024 (Public Law 118-47, March 23, 2024).
In addition, new collective bargaining agreements or amendments to agreements could increase our labor costs and operating expenses. A significant number of our employees are members of labor unions. If we are unable to negotiate acceptable new contracts with our unions from time to time, we could experience strikes or other work stoppages by the affected employees.
Negotiations with labor unions and possible work stoppages and other labor problems could divert management's attention and disrupt operations. In addition, new collective bargaining agreements or amendments to agreements could increase our labor costs and operating expenses. A significant number of our employees are members of labor unions.
These letters of credit and bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts. If a letter of credit or bond is required for a particular project and we are unable to obtain it due to insufficient capacity or other reasons, we will not be able to pursue that project.
If a letter of credit, bank guarantee or surety bond is required for a particular project and we are unable to obtain such instrument due to insufficient capacity or other reasons, we will not be able to pursue that project.
These disagreements could result in delays, additional costs and risks of litigation. Our inability to successfully maintain existing relationships or enter into new agreements could have a material adverse effect on our results of operations.
Our inability to successfully maintain existing relationships or enter into new agreements could have a material adverse effect on our results of operations. Accounting and Financial Reporting Risks We recognize a large portion of our revenue on an over time basis which could result in volatility in our results of operations.
Government contract laws and regulations affect how we do business with our customers and, in some instances, impose added costs on our business. A violation of specific laws and regulations could result in the imposition of fines and penalties or the termination of our contracts or debarment from bidding on contracts.
Government contract laws and regulations affect how we do business with our customers and, in some instances, impose added costs on our business.
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.
Our operations are subject to disruption caused by severe weather, environmental and natural disasters and other natural and man-made events that could adversely affect our manufacturing facilities or the infrastructure necessary to support them.
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.
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. Furthermore, the increased use of artificial intelligence may raise potential liabilities related to privacy and intellectual property or result in a loss of intellectual property.
Our 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.
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. We operate large manufacturing facilities and perform services in large commercial power plants where accidents or system failures can have significant consequences.
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. 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.
Our backlog is subject to unexpected adjustments and cancellations and may not be a reliable indicator of future revenues or earnings. There can be no assurance that the revenues projected in our backlog will be realized or, if realized, will result in profits.
There can be no assurance that the revenues projected in our backlog will be realized or, if realized, will result in profits. Because of project cancellations or changes in project scope and schedule, we cannot predict with certainty when or if backlog will be performed.
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.
Removed
Government fails to renew these contracts or modifies key terms, our results of operations and cash flows would be adversely affected.
Added
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.
Removed
In the event of a continuing resolution, we expect our key programs will continue to be supported and funded under the continuing resolution.
Added
Our operations in foreign countries expose us to currency, political and trade risks, including from tariffs, trade barriers, and other protectionist or retaliatory measures, which could impact our results of operations. We have significant manufacturing and sales operations in foreign countries, particularly in Canada.
Removed
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.
Added
Our financial results may be adversely affected by fluctuations in foreign currencies and by the translation of the financial statements of our foreign subsidiaries from local currencies into U.S. dollars. Both the sales from international operations and export sales are subject to varying degrees of risks inherent in doing business outside of the U.S.
Removed
We operate large manufacturing facilities and perform services in large commercial power plants where accidents or system failures can have significant consequences.
Added
Such risks include the possibility of unfavorable circumstances arising from host country laws or regulations including, but not limited to changes in tariff and trade barriers.
Removed
Accounting and Financial Reporting Risks We recognize a large portion of our revenue on an over time basis which could result in volatility in our results of operations. We generally recognize revenues and profits under our long-term contracts on an over time basis.
Added
Uncertainty remains with respect to trade policies and treaties between the U.S. and other countries, including Canada, where we manufacture heavy nuclear components and products for our medical radioisotopes business that may be sold to US customers. The U.S. federal government has recently implemented tariffs on certain foreign goods and may implement additional tariffs on foreign goods.
Removed
For example, changes to the FAR requirements for federal contractors proposed in November 2022 would require companies to make annual greenhouse gas emissions and other disclosures in order to be deemed a responsible bidder on future government contracts.
Added
For example, in January 2025, the U.S. presidential administration stated its intention to impose a 25% tariff on imports from Canada into the United States, and the Canadian government stated it would take certain retaliatory measures. On February 3, 2025, the U.S. presidential administration and the Canadian prime minister announced a 30-day pause to the implementation of these tariffs.
Removed
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
As we currently manufacture substantially all of our products for our medical radioisotope business in Canada, a 25% tariff on all imports from Canada would increase the costs of those products manufactured in Canada and could adversely impact our gross profit for this business if we are unable to pass this cost to our customers.
Removed
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
Our Canadian business does not currently have any material contracts for the sale of heavy nuclear components to US customers so the direct risk related to those tariffs is currently negligible.
Removed
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.
Added
Such tariffs and, if enacted, any further legislation or actions taken by the U.S. federal government or Canadian government that restrict trade, such as additional tariffs, trade barriers, and other protectionist or retaliatory measures taken by such governments, could adversely impact our profitability and ability to sell products and services.
Removed
In certain instances, alternate indemnification authority exists but it must be specifically requested and separately approved and may not always be applicable (e.g., indemnification under Public Law 85-804 is available for contracts having a defense interest and certain DOE contracts may not be for supplies or services that satisfy this requirement).
Added
For example, new or increased tariffs would increase the cost of our products and the components and raw materials that go into making them. These increased costs could adversely impact the gross margin that we earn on our products, which could make our products less competitive and reduce demand from customers.
Removed
Because nuclear liability risks are uninsurable or under-insurable, the absence of government indemnification would require us to choose between (i) accepting future DOE work and entering future NRC licenses (or providing fuel, components or services under NRC licensees lacking indemnification) without government indemnification and accepting the associated significant risk, or (ii) declining such future work.
Added
The ultimate impact of any tariffs will depend on various factors, including if any tariffs are ultimately implemented, the timing of implementation, contractual terms, and the amount, scope, and nature of the tariffs. 16 Table of Contents Tariffs and other restrictive trade measures may require us to take various actions, including changing suppliers and restructuring business relationships.
Added
Changing our operations in accordance with new or changed trade restrictions can be expensive, time-consuming, disruptive to our operations and distracting to management. Tariffs and trade restrictions can be announced with little or no advance notice, and we may not be able to effectively mitigate all adverse impacts from such measures.
Added
Moreover, the rapid evolution and increased sophistication, availability, and use of artificial intelligence technologies may exacerbate our cybersecurity risks by use of these technologies by us, our customers, suppliers, business partners, third-party providers, and bad actors. These trends may increase the likelihood of cybersecurity events occurring.
Added
While we have experienced disruptions due to severe weather, environmental and natural disasters and other natural and man-made events in the past, including a recent facility closure due to Hurricane Helene, none have had a material adverse effect on our business or operations to date.
Added
Increasing sustainability disclosure requirements may result in increased costs or reputational risks and could limit our ability to manufacture certain of our products. 18 Table of Contents Our operations are subject to operating risks, which could expose us to potentially significant professional liability, product liability, warranty and other claims.
Added
New union contracts or the organization of nonunion employees could result in increased operating costs, as a result of higher wages, higher benefit expenses and other factors, for both union and nonunion employees. We rely on a limited number of suppliers, including single-source suppliers, which could, under certain circumstances, adversely affect our revenues and operating results.
Added
These letters of credit, bank guarantees and surety bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIf a cybersecurity threat appears to progress into a possible cybersecurity incident, our IT Director, Cyber Security serves as the CIMT’s incident manager and the CDO or designee notifies the Chief Risk Officer of a need to activate the CIMT as appropriate, informs and updates the CIMT, and may consult other internal and external resources with the required technical, application, organizational, and business knowledge to provide effective advice to the CIMT.
Biggest changeIf a cybersecurity threat appears to progress into a possible cybersecurity incident, our IT Director, Cyber Security serves as the CIMT’s incident manager and the CDO or designee notifies the Chief Risk 27 Table of Contents Officer of a need to activate the CIMT as appropriate, informs and updates the CIMT and may consult other internal and external resources with the required technical, application, organizational and business knowledge to provide effective advice to the CIMT.
As a U.S. Government contractor, we may be prone to a greater number of those threats than companies in other industries. We believe we are well positioned to meet the requirements of the Cybersecurity Maturity Model Certification ("CMMC") program and are preparing for certification once the requirements are effective.
As a U.S. Government contractor, we may be prone to a greater number of cybersecurity threats than companies in other industries. We believe we are well positioned to meet the requirements of the Cybersecurity Maturity Model Certification ("CMMC") program and are preparing for certification once the requirements are effective.
The CIMT operates under the co-leadership of the General Counsel and CDO, who are responsible for oversight and composition of the CIMT, determining whether an incident warrants activating external service providers, providing updates to the Chief Executive Officer and Senior Management Team, keeping 26 Table of Contents our Governance Committee as well as our Board of Directors informed as appropriate, and ultimately establishing and executing our enterprise-wide incident response strategy.
The CIMT operates under the co-leadership of the General Counsel and CDO, who are responsible for oversight and composition of the CIMT, determining whether an incident warrants activating external service providers, providing updates to the Chief Executive Officer and senior management team, keeping our Governance Committee as well as our Board of Directors informed as appropriate, and ultimately establishing and executing our enterprise-wide incident response strategy.
See Item 1A of this Report for more information on our cybersecurity risks. 27 Table of Contents
See Item 1A of this Report for more information on our cybersecurity risks. 28 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES 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.
Biggest changePROPERTIES The following table provides the segment name, location and general use of each of our principal properties at December 31, 2024 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 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) McLean, Virginia Administrative office Leased (2035) (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.
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.
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 the facility noted above. (2) Nuclear Fuel Services, Inc.
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
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. 29 Table of Contents PART II
(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.
(4) These facilities are 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.

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, 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.
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, 2024 – October 31, 2024 2,109 $ 116.52 — $ 377.6 November 1, 2024 – November 30, 2024 653 121.75 — $ 377.6 December 1, 2024 – December 31, 2024 — — — $ 377.6 Total 2,762 $ 117.76 — (1) Includes 2,109, 653 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. 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").
(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. 30 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, 2023.
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, 2024.
This graph assumes the investment of $100 on December 31, 2018 and the reinvestment of dividends thereafter. Item 6. [RESERVED] 30 Table of Contents
This graph assumes the investment of $100 on December 31, 2019 and the reinvestment of dividends thereafter. Item 6. [RESERVED] 31 Table of Contents
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.
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 20, 2025, there were approximately 1,268 holders of record of our common stock.

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 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
Biggest changeFinancial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm 44 Consolidated Statements of Income Years Ended December 31, 2024, 2023 and 2022 46 Consolidated Statements of Comprehensive Income Years Ended December 31, 2024, 2023 and 2022 47 i Table of Contents PAGE Consolidated Balance Sheets December 31, 2024 and 2023 48 Consolidated Statements of Stockholders' Equity Years Ended December 31, 2024, 2023 and 2022 50 Consolidated Statements of Cash Flows Years Ended December 31, 2024, 2023 and 2022 51 Notes to Consolidated Financial Statements 52
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.
Item 6. [Reserved] 31 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 31 General 32 Critical Accounting Estimates 33 Results of Operations Years Ended December 31, 2024, 2023 and 2022 36 Effects of Inflation and Changing Prices 38 Liquidity and Capital Resources 38 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 42 Item 8.

Item 7. Management's Discussion & Analysis

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

62 edited+12 added−10 removed64 unchanged
Biggest changeAs 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.
Biggest changeAs of December 31, 2024, we were in compliance with all covenants set forth in the 2020 Indenture and the Senior Notes due 2028.
Contracts and Revenue Recognition We generally recognize estimated contract revenue and resulting income over time based on the measurement of the extent of progress toward completion using total costs incurred as a percentage of the total estimated project costs for individual performance obligations.
Contracts and Revenue Recognition We generally recognize contract revenue and resulting income over time based on the measurement of the extent of progress toward completion using total costs incurred as a percentage of the total estimated project costs for individual performance obligations.
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").
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. 32 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").
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.
We experienced net cash generated from operations in each of the years ended December 31, 2024, 2023 and 2022. 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.
Although there can be no assurance that we will maintain our surety bonding capacity, we believe our current capacity is adequate to support our existing requirements for the next 12 months. In addition, these bonds generally indemnify the beneficiaries should we fail to perform our obligations under the applicable agreements.
Although there can be no assurance that we will maintain our surety bond capacity, we believe our current capacity is adequate to support our existing requirements for the next 12 months. In addition, these surety bonds generally indemnify the beneficiaries should we fail to perform our obligations under the applicable agreements.
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.
As of December 31, 2024, 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 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.
We utilize our Revolving Credit Facility and a bilateral letter of credit facility to support such obligations, but the issuance of letters of credit and bank guarantees 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.
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.
Discussions of our 2023 results and year-to-year comparisons between 2023 and 2022 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, 2023.
We utilize bonding facilities to support such obligations, but the issuance of bonds under those facilities is typically at the surety's discretion, and the bonding facilities generally permit the surety, in its sole discretion, to terminate the facility or demand collateral.
We utilize surety bond facilities to support such obligations, but the issuance of surety bonds under those facilities is typically at the surety's discretion, and the surety bond facilities generally permit the surety, in its sole discretion, to terminate the facility or demand collateral.
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.
We have completed our annual review of our indefinite-lived intangible assets for the year ended December 31, 2024, which indicated that we had no impairment. The fair value of our indefinite-lived intangible assets was substantially in excess of carrying value.
We may redeem the Senior Notes due 2028, in whole or in part, at any time on or after June 30, 2023 at a redemption price equal to (i) 102.063% of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on June 30, 2023, (ii) 101.031% of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on June 30, 2024 and (iii) 100.0% of the principal amount to be redeemed if the redemption occurs on or after June 30, 2025, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
We may redeem the Senior Notes due 2028, in whole or in part, at any time on or after June 30, 2024 at a redemption price equal to (i) 101.031% of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on June 30, 2024 and (ii) 100.0% of the principal amount to be redeemed if the redemption occurs on or after June 30, 2025, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
We may prepay all loans under the Credit Facility at any time without premium or penalty (other than customary Term SOFR breakage costs), subject to notice requirements. The Credit Facility includes financial covenants that are evaluated on a quarterly basis, based on the rolling four-quarter period that ends on the last day of each fiscal quarter.
We may prepay all loans under the Credit Facility at any time without premium or penalty (other than customary Term Secured Overnight Financing Rate ("SOFR") breakage costs), subject to notice requirements. The Credit Facility includes financial covenants that are evaluated on a quarterly basis, based on the rolling four-quarter period that ends on the last day of each fiscal quarter.
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.
As of December 31, 2024, we were in compliance with all covenants set forth in the Credit Facility. 38 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.
We may redeem the Senior Notes due 2029, in whole or in part, at any time on or after April 15, 2024 at a redemption price equal to (i) 102.063% of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on April 15, 2024, (ii) 101.031% of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on April 15, 2025 and (iii) 100.0% of the principal amount to be redeemed if the redemption occurs on or after April 15, 2026, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
The Senior Notes due 2029 will mature on April 15, 2029. 39 Table of Contents We may redeem the Senior Notes due 2029, in whole or in part, at any time on or after April 15, 2024 at a redemption price equal to (i) 102.063% of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on April 15, 2024, (ii) 101.031% of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on April 15, 2025 and (iii) 100.0% of the principal amount to be redeemed if the redemption occurs on or after April 15, 2026, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
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.
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 gain of $0.8 million during the year ended December 31, 2024 compared to a loss of $20.9 million for the year ended December 31, 2023.
Similarly, we have provided letters of credit to governmental agencies and contractual counterparties to support regulatory and contractual obligations for certain decommissioning responsibilities, projects and legal matters.
Similarly, we have provided letters of credit and bank guarantees to governmental agencies and contractual counterparties to support regulatory and contractual obligations for certain decommissioning responsibilities, projects and legal matters.
Pension Plans and Postretirement Benefits We utilize actuarial and other assumptions in calculating the cost and benefit obligations of our pension and postretirement benefits. The assumptions utilized in the determination of our cost and obligations include assumptions regarding discount rates, expected returns on plan assets, mortality and health care cost trends.
Pension Plans and Postretirement Benefits We utilize actuarial and other assumptions in calculating the cost and benefit obligations of our pension and postretirement benefits. The assumptions utilized in the determination of our cost and obligations include assumptions 33 Table of Contents regarding discount rates, expected returns on plan assets, mortality and health care cost trends.
We are required to make quarterly amortization payments on the Term Loan in an amount equal to (i) 0.625% of the initial aggregate principal amount of the Term Loan on the last business day of each quarter beginning the quarter ending March 31, 2023 and ending the quarter ending December 31, 2024 and (ii) 1.25% of the initial aggregate principal amount of the Term Loan on the last business day of each quarter ending after December 31, 2024, with the balance of the Term Loan due at maturity.
We were required to make quarterly amortization payments on the Term Loan in an amount equal to 0.625% of the initial aggregate principal amount of the Term Loan on the last business day of each quarter beginning the quarter ending March 31, 2023 and ending the quarter ending December 31, 2024 and are now required to make quarterly amortization payments in an amount equal to 1.25% of the initial aggregate principal amount of the Term Loan on the last business day of each quarter ending after December 31, 2024, with the balance of the Term Loan due at maturity.
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.
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, 2024, the total remaining share repurchase authorization was $377.6 million. See Item 5 of this Report for additional share repurchase information.
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.
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 48% of the revenue associated with our backlog by the end of 2025, with the remainder to be recognized thereafter.
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.
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, 2024: .25% Increase .25% Decrease (In millions) Discount Rate: Effect on ongoing net periodic benefit cost (1) $ 0.6 $ (0.7) Effect on projected benefit obligation $ (21.0) $ 21.8 Return on Plan Assets: Effect on ongoing net periodic benefit cost $ (2.1) $ 2.1 (1) Excludes effect of annual mark to market adjustment.
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.
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 $148.6 million to $797.7 million at December 31, 2024 compared to $649.1 million at December 31, 2023, primarily attributable to improvements in operating cash flows which were used, in part, to repay borrowings under our Revolving Credit Facility, as defined below.
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.
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, 2024, surety bonds issued and outstanding under these arrangements totaled approximately $278.7 million.
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.
We expect these heightened spending levels to decline as these capital expansion projects are largely complete. During the year ended December 31, 2024, we paid $88.3 million in dividends to holders of our common stock.
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%.
Based on the total net leverage ratio applicable at December 31, 2024, the margin for Term SOFR and base rate loans was 1.25% and 0.25%, respectively, the letter of credit fee for financial letters of credit and performance letters of credit was 1.25% and 0.825%, respectively, and the commitment fee for the unused portion of the Revolving Credit Facility was 0.175%.
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, 2024, the weighted-average interest rate on outstanding borrowings under our Credit Facility was 5.72%. The Credit Facility generally includes customary events of default for a secured credit facility.
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.
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, 2024, 2023 and 2022, our CAS pension costs attributed to U.S. Government contracts totaled $20.5 million, $13.6 million and $11.7 million, respectively.
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.
The increase was primarily driven by higher volume in the manufacture of nuclear components for U.S. Government programs of $138.7 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 $62.2 million.
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.
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.
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.
In addition, we experienced a decrease in interest expense of $7.6 million in 2024 when compared to the prior year due primarily to a decrease in borrowings coupled with a decline in the weighted-average interest rate on outstanding borrowings under our Credit Facility, as defined below.
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.
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.
Government 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.
Government is obligated to pay substantially all the decommissioning costs. 35 Table of Contents Results of Operations – Years Ended December 31, 2024, 2023 and 2022 Selected financial highlights are presented in the table below: Year Ended December 31, 2024 2023 2022 (In thousands) REVENUES: Government Operations $ 2,183,040 $ 2,031,337 $ 1,808,483 Commercial Operations 523,972 466,344 427,358 Eliminations (3,358) (1,372) (3,007) $ 2,703,654 $ 2,496,309 $ 2,232,834 OPERATING INCOME: Government Operations $ 377,875 $ 374,682 $ 336,501 Commercial Operations 46,816 37,532 27,418 $ 424,691 $ 412,214 $ 363,919 Unallocated Corporate (44,084) (29,155) (15,348) Total Operating Income $ 380,607 $ 383,059 $ 348,571 This section discusses our 2024 and 2023 results of operations and contains year-to-year comparisons between 2024 and 2023.
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.
As of December 31, 2024, borrowings under our Term Loan totaled $237.5 million, borrowings and letters of credit issued under the Revolving Credit Facility totaled $25.0 million and $1.4 million, respectively, and we had $723.6 million available under the Revolving Credit Facility for borrowings and to meet letter of credit requirements.
Senior Notes due 2026 We issued $400 million aggregate principal amount of 5.375% senior notes due 2026 (the "Senior Notes due 2026") pursuant to an indenture dated May 24, 2018, among the Company, certain of our subsidiaries, as guarantors, and U.S. Bank National Association, as trustee.
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.
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.
Consolidated Results of Operations Year Ended December 31, 2024 vs. 2023 Consolidated revenues increased 8.3%, or $207.3 million, to $2,703.7 million in the year ended December 31, 2024 compared to $2,496.3 million in 2023, due to increases in revenues in our Government Operations and Commercial Operations segments of $154.0 million and $57.6 million, respectively.
Changes in external market conditions may affect certain other assumptions, such as the cost of capital. Market conditions can be volatile and are outside of our control.
Changes in external market conditions may affect certain other assumptions, such as the cost of capital.
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.
Provision for Income Taxes Year Ended December 31, 2024 2023 $ Change (In thousands) Income before Provision for Income Taxes $ 348,720 $ 321,400 $ 27,320 Provision for Income Taxes $ 66,422 $ 75,079 $ (8,657) Effective Tax Rate 19.0% 23.4% For the year ended December 31, 2024, our provision for income taxes decreased $8.7 million to $66.4 million, while income before provision for income taxes increased $27.3 million to $348.7 million when compared to the prior year.
The fair value of our reporting units was substantially in excess of carrying value. Each year, we evaluate indefinite-lived intangible assets to assess recoverability, and impairments, if any, are recognized in earnings.
Each year, we evaluate indefinite-lived intangible assets to assess recoverability, and impairments, if any, are recognized in earnings.
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.
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.
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.
We completed our annual review of goodwill for each of our reporting units for the year ended December 31, 2024, which indicated that we had no impairment of goodwill. The fair value of our reporting units was substantially in excess of carrying value.
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.
The increase in cash used in financing activities was primarily attributable to a reduction in net borrowings of long-term debt of $75.0 million and an increase in repurchases of common stock of $20.0 million. At December 31, 2024, we had long-term investments with a fair value of $10.6 million. Our investment portfolio consists primarily of corporate bonds and mutual funds.
Under the market valuation approach, we employ the guideline publicly traded company method, which indicates the fair value of the equity of each reporting unit by comparing it to publicly traded companies in similar lines of business. After identifying and selecting guideline companies, we analyze their business and financial profiles for relative similarity.
Market conditions can be volatile and are outside of our control. 34 Table of Contents Under the market valuation approach, we employ the guideline publicly traded company method, which indicates the fair value of the equity of each reporting unit by comparing it to publicly traded companies in similar lines of business.
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.
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.
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.
During the year ended December 31, 2023, our Government Operations segment results were favorably impacted by contract adjustments related to a nuclear contract which resulted in an increase in operating income of $22.5 million.
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.
The increase in cash provided by operating activities was primarily attributable to the timing of project cash flows. 40 Table of Contents Our net cash used in investing activities decreased by $1.1 million to $154.6 million in the year ended December 31, 2024, compared to $155.6 million in the year ended December 31, 2023.
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.
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.
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.
Government Operations Year Ended December 31, 2024 2023 $ Change (In thousands) Revenues $ 2,183,040 $ 2,031,337 $ 151,703 Operating Income $ 377,875 $ 374,682 $ 3,193 % of Revenues 17.3% 18.4% Year Ended December 31, 2024 vs. 2023 Revenues increased 7.5%, or $151.7 million, to $2,183.0 million in the year ended December 31, 2024 compared to $2,031.3 million in 2023.
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.
This was caused by a decrease in losses related to mark to market adjustments totaling $20.2 million.
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.
Our effective tax rate for the year ended December 31, 2023 was 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 non-U.S. earnings.
Factors such as size, growth, risk and profitability are analyzed and compared to each of our reporting units.
After identifying and selecting guideline companies, we analyze their business and financial profiles for relative similarity. Factors such as size, growth, risk and profitability are analyzed and compared to each of our reporting units.
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.
Our net cash provided by operating activities increased by $44.7 million to $408.4 million in the year ended December 31, 2024, compared to $363.7 million in the year ended December 31, 2023.
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.
Our domestic and foreign cash and cash equivalents, restricted cash and cash equivalents and investments as of December 31, 2024 and 2023 were as follows: December 31, 2024 2023 (In thousands) Domestic $ 69,595 $ 71,177 Foreign 21,585 19,934 Total $ 91,180 $ 91,111 Our working capital increased by $13.0 million to $455.8 million at December 31, 2024 from $442.8 million at December 31, 2023, primarily attributable to the change in income taxes receivable and prepaid expenses which was partially offset by the timing of project cash flows.
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.
Our cash requirements as of December 31, 2024 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 $ 1,062,500 $ 12,500 $ 250,000 $ 800,000 $ — Interest payments $ 203,199 $ 58,439 $ 111,760 $ 33,000 $ — Lease payments $ 30,090 $ 3,930 $ 5,600 $ 4,318 $ 16,242 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) $ 313,671 $ 133,100 $ 30,192 $ 150,380 $ — 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.
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.
Consolidated operating income decreased $2.5 million to $380.6 million in the year ended December 31, 2024 compared to $383.1 million in 2023. Operating income in our Government Operations and Commercial Operations segments increased $5.5 million and $9.3 million, respectively.
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.
Operating income increased $3.2 million to $377.9 million in the year ended December 31, 2024 compared to $374.7 million in 2023, primarily driven by the operating income impact of the changes in revenues noted above. 36 Table of Contents Commercial Operations Year Ended December 31, 2024 2023 $ Change (In thousands) Revenues $ 523,972 $ 466,344 $ 57,628 Operating Income $ 46,816 $ 37,532 $ 9,284 % of Revenues 8.9% 8.0% Year Ended December 31, 2024 vs. 2023 Revenues increased 12.4%, or $57.6 million, to $524.0 million in the year ended December 31, 2024 compared to $466.3 million in 2023.
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.
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 $0.1 million to $91.2 million at December 31, 2024 from $91.1 million at December 31, 2023, primarily due to the items discussed below.
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.
These increases were partially offset by a decrease in unallocated healthcare costs when compared to the prior year. Other Income (Expense) During the year ended December 31, 2024, other income (expense) increased $29.8 million to a loss of $31.9 million compared to a loss of $61.7 million 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.
The Kinectrics acquisition is targeted to close in the middle of 2025 at which time we expect to make a cash investment of approximately $525.0 million U.S. dollar equivalent. 41 Table of Contents We expect cash requirements totaling approximately $7.8 million and $1.2 million for contributions to our pension plans and other postretirement benefit plans, respectively, in 2025.
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.
No single item had a significant impact on the change in cash used in investing activities. Our net cash used in financing activities increased by $83.4 million to $252.8 million in the year ended December 31, 2024, compared to cash used in financing activities of $169.4 million in the year ended December 31, 2023.
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 rate was 19.0% for the year ended December 31, 2024 compared to 23.4% for the year ended December 31, 2023. Our effective tax rate for the year ended December 31, 2024 was lower than the U.S. corporate income tax rate of 21% primarily due to increased benefits from U.S. federal research and development tax credits.
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.
The increase was primarily related to higher revenues in nuclear components, medical radioisotopes, fuel handling and fuel fabrication, partially offset by lower revenues related to on-site refurbishment work when compared to the prior year. Operating income increased $9.3 million to $46.8 million in the year ended December 31, 2024 compared to $37.5 million in 2023.
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.
These initiatives are expected to continue into 2026 and accounted for increases in expense of $9.5 million for the year ended December 31, 2024. We also experienced an increase in legal and consulting costs associated with due diligence activities of $4.5 million for the year ended December 31, 2024.
Removed
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.
Added
The aggregate impact of changes in estimates increased our revenue and operating income as follows: Year Ended December 31, 2024 2023 2022 (In thousands) Revenues $ 37,908 $ 24,728 $ 26,629 Operating Income (1) $ 36,770 $ 24,813 $ 24,405 (1) During the year ended December 31, 2024, no adjustments to any one contract had a material impact on our consolidated financial statements.
Removed
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.
Added
Contracts may be modified at the request of our customer or initiated by us to amend all or part of an existing contract, including contract type. Depending on the nature of the modification, we consider whether to account for the modification as an adjustment to the existing contract or as a separate contract.
Removed
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.
Added
Modifications to our contracts are generally accounted for as if they were part of the existing contract as these modifications are not distinct from the existing contract and accounted for as a cumulative adjustment to revenue.
Removed
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.
Added
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. 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.
Removed
On July 15, 2021, using cash on hand and borrowings under the Former Credit Facility, we redeemed the Senior Notes due 2026 at a redemption price equal to 102.688% of the principal amount, resulting in an early redemption premium of $10.8 million and the write-off of deferred debt issuance costs totaling $4.2 million.
Added
These increases were more than offset by an increase in Unallocated Corporate expenses of $15.8 million when compared to the prior year.
Removed
These charges were recorded in our consolidated statement of income during the year ended December 31, 2021 as components of Other – net and Interest expense, respectively.
Added
These increases were partially offset by a decrease in revenues associated with our downblending operations as well as a decrease in revenues caused by the timing of long-lead material procurements of $36.5 million and $24.7 million, respectively.
Removed
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.
Added
The increase was primarily due to the increase in revenues noted above as well as a favorable shift in our product mix which was partially offset by a $4.4 million increase in expenses associated with due diligence and restructuring-related activities when compared to the prior year.
Removed
At any time prior to April 15, 2024, we may also redeem up to 40.0% of the Senior Notes due 2029 with net cash proceeds of certain equity offerings at a redemption price equal to 104.125% of the principal amount of the Senior Notes due 2029 to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Added
Unallocated Corporate Unallocated Corporate expenses increased $14.9 million to $44.1 million in the year ended December 31, 2024 compared to $29.2 million in 2023. During the third quarter of 2023, we undertook several initiatives to transform our current information technology infrastructure and to improve the effectiveness of our digital framework.
Removed
In addition, at any time prior to April 15, 2024, we may redeem the Senior Notes due 2029, in whole or in part, at a redemption price equal to 100.0% of the principal amount of the Senior Notes due 2029 to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date plus an applicable "make-whole" premium.
Added
See Note 5 to our consolidated financial statements included in this Report for further information on income taxes. 37 Table of Contents Effects of Inflation and Changing Prices Our financial statements are prepared in accordance with GAAP, using historical U.S. dollar accounting ("historical cost").

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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, 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.
Biggest changePrincipal Amount by Expected Maturity (In thousands) At December 31, 2024: Fair Value at Years Ending December 31, December 31, 2025 2026 2027 2028 2029 Thereafter Total 2024 Investments — — $ 1,479 $ — — $ 7,700 $ 9,179 $ 10,609 Average Interest Rate — — — — — — Note Receivable $ 6,467 — — — — — $ 6,467 $ 6,367 Average Interest Rate 6.80 % — — — — — Fixed Interest Rate Debt — — — $ 400,000 $ 400,000 $ — $ 800,000 $ 746,529 Average Interest Rate — — — 4.13 % 4.13 % — Variable Interest Rate Debt $ 12,500 $ 12,500 $ 237,500 — — — $ 262,500 $ 262,479 Average Interest Rate 5.39 % 5.27 % 5.28 % — — — 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% — — 42 Table of Contents Exchange Rate Sensitivity The following table provides information about our FX forward contracts outstanding at December 31, 2024 and presents such information in U.S. dollar equivalents.
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.
Historically, we have hedged those risks with FX forward contracts. At December 31, 2024, 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.
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.
At December 31, 2024, we had (i) $237.5 million in outstanding borrowings under our Term Loan, $25.0 million in outstanding borrowings under the Revolving Credit Facility, $1.4 million in letters of credit issued under the Revolving Credit Facility and $723.6 million available under the Credit Facility, (ii) an aggregate principal amount of $400 million of Senior Notes due 2028 and (iii) an aggregate principal amount of $400 million of Senior Notes due 2029.
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
Dollars (in thousands) Year Ending Fair Value at Average Contractual Foreign Currency December 31, 2025 December 31, 2024 Exchange Rate Canadian dollar $ 6,786 $ (290) 1.3767 U.S. dollar (selling Canadian dollar) $ 409,848 $ 8,371 1.4055 Euro (selling Canadian dollar) $ 19,175 $ (38) 1.4957 Year Ending Fair Value at Average Contractual Foreign Currency December 31, 2026 December 31, 2024 Exchange Rate U.S. dollar (selling Canadian dollar) $ 4,318 $ 179 1.3502 Euro (selling Canadian dollar) $ 1,720 $ (25) 1.5216 43 Table of Contents

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