What changed in this filing

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Item 1A. Risk Factors

2023-02-23 compared with 2022-02-22 · 49 added, 62 removed, 326 unchanged (25% of the section changed)

12 unchanged sentences

Consequently, programs often are only partially funded initially and additional funds are committed only as Congress makes further appropriations.

When the U.S.

Government does not complete its budget process before the end of its fiscal year on September 30, government operations typically are funded through a continuing resolution that authorizes agencies of the U.S.

Government to continue to operate, but does not authorize new spending initiatives.

When the U.S.

Government operates under a continuing resolution or there are other disruptions in the funding process, delays can occur in the procurement of products and services.

Government is currently operating under a continuing resolution with respect to its fiscal year 2022 which began on October 1, 2021.

As a result, we are subject to ongoing uncertainties associated with U.S.

Government budget constraints and other factors affecting government funding.

The reduction or termination of funding, or changes in the timing of funding, for a U.S.

Government program in which we provide products or services would result in a reduction or loss of anticipated future revenues attributable to that program and could have a negative impact on our financial condition, results of operations and cash flows.

In addition, our Nuclear Operations Group and Nuclear Services Group segments depend on U.S.

In addition, our Government Operations segment depends on U.S.

Government funding, particularly funding levels at the DOE.

6 unchanged sentences

A termination arising out of our default could expose us to liability and have an adverse effect on our ability to compete for future contracts and orders.

If any of our contracts reflected in backlog are terminated by the U.S.

If any of our contracts reflected

in backlog are terminated by the U.S.

Government, our backlog would be reduced by the expected value of the remaining work under such contracts.

9 unchanged sentences

Government to renew our existing contracts or the disallowance of the payment of our contract costs could have a material adverse effect on our financial condition, results of operations and cash flows.

Federal budget delays or reductions in government spending could adversely impact government spending for the products and services we provide.

Federal budget delays, federal debt ceiling limitations, or reductions in government spending could adversely impact government spending for the products and services we provide.

Federal government spending reductions could adversely impact U.S.

9 unchanged sentences

Demand for our products and services is vulnerable to economic downturns, the competitiveness of alternative energy sources and industry conditions.

In addition, unfavorable economic conditions may lead customers to delay, curtail or cancel proposed or existing projects, which may decrease the overall demand for our products and services and adversely affect our results of operations.

Demand for our products and services has been, and we expect that demand will continue to be, subject to significant fluctuations due to a variety of factors beyond our control, including economic and industry conditions.

These factors include, but are not limited to, inflation, geopolitical issues, the availability and cost of credit, the demand for and competitiveness of nuclear power with other energy sources, the cyclical nature of the power generation industry, low business and consumer confidence, high unemployment, energy conservation measures and decisions of utilities that operate nuclear power plants.

Unfavorable economic conditions may lead customers to delay, curtail or cancel proposed or existing projects, which may decrease the overall demand for our products and services and adversely affect our results of operations.

Our customers may also find it more difficult to raise capital in the future due to limitations on the availability of credit, increases in interest rates and other factors affecting the federal, municipal and corporate credit markets.

Our customers may find it more difficult to raise capital in the future due to limitations on the availability of credit, increases in interest rates and other factors affecting the federal, municipal and corporate credit markets.

Additionally, our customers may demand more favorable pricing terms and find it increasingly difficult to timely pay invoices for our products and services, which would impact our future cash flows and liquidity.

9 unchanged sentences

We attempt to cover the increased costs of anticipated changes in labor, material and service costs of long-term contracts, either through estimates of cost increases, which are reflected in the original contract price, or through price escalation clauses.

Despite these attempts, the

cost and gross profit we realize on a fixed-price contract could vary materially from the estimated amounts because of supplier, contractor and subcontractor performance, execution issues, changes in job conditions, variations in labor and equipment productivity, inflation and increases in the cost of labor and raw materials, particularly steel, over the term of the contract.

Despite these attempts, the cost and gross profit we realize on a fixed-price contract have and could vary materially from the estimated amounts because of supplier, contractor and subcontractor performance, execution issues, changes in job conditions, variations in labor and equipment productivity, inflation and increases in the cost of labor and raw materials, particularly steel, over the term of the contract.

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.

20 unchanged sentences

In addition, we maintain, replace and/or upgrade current financial, human resources and other information technology systems.

These activities subject us to inherent costs and risks associated with replacing and updating these systems, including potential disruption of our internal control structure, substantial capital expenditures, demands on management time and other risks of delays or difficulties in transitioning to new systems or of integrating new systems into our current systems.

risks of delays or difficulties in transitioning to new systems or of integrating new systems into our current systems.

Our systems implementations and upgrades may not result in productivity improvements at the levels anticipated, or at all.

3 unchanged sentences

Actual or threatened public health epidemics or outbreaks, such as the global outbreak of COVID-19, could have a material adverse effect on our business and results of operations.

COVID-19 has spread around the world, including the United States and Canada.

COVID-19 is impacting worldwide economic activity and has resulted in disruptions to travel, trade and operations around the world, including us.

A public health epidemic, such as COVID-19, 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 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.

Our business could be materially adversely impacted by employee illness, quarantines, government actions, facility closures, other actions to contain the impact of such diseases and/or potential responses to such actions by our customers, suppliers, contractors and employees.

Although our U.S.

and Canadian operations have to date been deemed "essential" by federal, state and local authorities and have remained operational, there can be no assurance that such authorities will not impose restrictions on the operations of our facilities as a result of COVID-19 or that our facilities will continue to operate due to COVID-19.

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 COVID-19.

If our operations or the operations of our customers or our suppliers are restricted, we may be unable to perform fully on our contracts and our costs may increase as a result of a public health epidemic or outbreak.

These cost increases may result in unfavorable changes in estimates which may not be fully recoverable or adequately covered by insurance or through government assistance programs such as the Coronavirus Aid, Relief and Economic Security Act in the U.S.

(the "CARES Act") or the Canada Emergency Wage Subsidy (the "CEWS").

While it is not possible at this time to estimate the full impact that COVID-19 could have on our business, the continued spread of COVID-19 and the measures taken by the governments of countries affected, as well as measures taken by state and local authorities in the United States, could disrupt the supply chain and the manufacture or shipment of our products and adversely impact our business, financial condition or results of operations.

We have experienced the rescheduling of certain services that our Canadian nuclear service business provides during nuclear power plant outages.

More widespread or further delays could have a material adverse impact on our results of operations.

COVID-19 and mitigation measures may also have an adverse impact on global economic conditions, which could have an adverse effect on our business.

The extent to which COVID-19 impacts our business will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact.

Additionally, the Canadian Government may review and audit the wage subsidies received under the CEWS and could disallow benefits for which we have applied.

If these subsidies are reduced, disallowed or repealed due to changes in law or determination by the Canadian Government, it could have a material adverse effect on our financial condition, results of operations and cash flows.

Moreover, there may be public scrutiny of government aid beneficiaries and as a result, our reputation could be harmed by participating in the CEWS.

(the "CARES Act") or the Canada Emergency Wage Subsidy (the "CEWS") in the case of COVID-19.

A public health epidemic or outbreak and mitigation measures may also have an adverse impact on global economic conditions, which could have an adverse effect on our business.

The extent to which such an epidemic impacts our business will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of a public health epidemic or outbreak and the actions to contain its impact.

Additionally, government agencies may review and/or audit the benefits received under applicable government assistance programs, such as the CEWS in the case of COVID-19, and could disallow benefits which we have previously received.

If these subsidies are reduced, disallowed or repealed due to changes in law or determination by the underlying government agency, it could have a material adverse effect on our financial condition, results of operations and cash flows.

Moreover, there may be public scrutiny of government aid beneficiaries and as a result, our reputation could be harmed by participating in such programs.

We rely on intellectual property law and confidentiality agreements to protect our intellectual property.

19 unchanged sentences

While we take steps to mitigate the impact of severe weather, environmental and natural disasters, the frequency and severity of which may be impacted by climate change, pandemics and other natural and manmade events, such events could result in severe disruption to our business operations at these facilities.

Similar events impacting the facilities or our customers, suppliers and other subcontractors could also impact our business or disrupt our operations.

Similar events impacting the facilities of our customers, suppliers and other subcontractors could also impact our business or disrupt our operations.

If insurance or other risk mitigating mechanisms are insufficient for us to recover our costs and resume operations in a timely fashion, it could have a material adverse effect on our business, financial condition and results of operations.

Additionally, increased concern regarding global climate change may result in state, federal or international requirements to reduce or mitigate global warming, such as the imposition of stricter limits on greenhouse gas emissions or carbon pricing mechanisms.

If environmental or climate-change laws or regulations are adopted or changed, they could necessitate the need for substantial capital and other expenditures and have further negative impacts on our financial condition, results of operations and cash flows.

Our operations are subject to operating risks, which could expose us to potentially significant professional liability, product liability, warranty and other claims.

20 unchanged sentences

Such insurance or contractual indemnity protection may not be sufficient or effective under all circumstances or against all hazards to which we may be subject.

A successful claim for which we are not insured or for which we are underinsured could have a material adverse effect on us.

Additionally, disputes

with insurance carriers over coverage may affect the timing of cash flows and, if litigation with the carrier becomes necessary, an outcome unfavorable to us may have a material adverse effect on our results of operations.

A successful claim for

which we are not insured or for which we are underinsured could have a material adverse effect on us.

Additionally, disputes with insurance carriers over coverage may affect the timing of cash flows and, if litigation with the carrier becomes necessary, an outcome unfavorable to us may have a material adverse effect on our results of operations.

We are also involved in management and operating activities for the U.S.

19 unchanged sentences

Competition for skilled and diverse employees in our industry can be intense, and any uncertainty surrounding future employment opportunities, facility locations, organizational and reporting structures, acquisitions and divestitures, and related concerns may impair our ability to attract and retain qualified employees.

In addition, certain parts of our business, including in the Nuclear Operations Group, involve designs, processing and final products that are classified by the U.S.

In addition, certain parts of our business, including in the Government Operations segment, involve designs, processing and final products that are classified by the U.S.

Government and require applicable personnel to obtain and maintain U.S.

13 unchanged sentences

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.

We rely on single-source suppliers, which could, under certain circumstances, adversely affect our revenues and operating results.

We rely on several single-source suppliers for materials used in our products in our Nuclear Operations Group segment.

If the supply of a single-sourced material is delayed or ceases, we may not be able to produce the related product in a timely manner or in sufficient quantities, if at all, which could adversely affect our revenues and operating results.

In addition, a single-source supplier of a key component could potentially exert significant bargaining power over price, quality, warranty claims or other terms relating to the single-sourced materials, which could have a material adverse effect on our financial condition, results of operations and cash flows.

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.

If the supply of a single-sourced or limited-sourced material is delayed or ceases, we may not be able to produce the related product in a timely manner or in sufficient quantities, if at all, which could adversely affect our revenues and operating results.

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.

Maintaining adequate bonding and letter of credit capacity is necessary for us to successfully bid on and win various contracts.

19 unchanged sentences

Investments in new technologies involve varying degrees of uncertainties and risk.

Commercial success

depends on many factors, including the levels of innovation, the development costs and the availability of capital resources to fund those costs, the levels of competition from others developing similar or other competing technologies, our ability to obtain or maintain government permits or certifications, the effectiveness of production, distribution and marketing efforts, market demand, market growth or shrinkage, market acceptance and the costs to customers to deploy and provide support for the new technologies.

Commercial success depends on many factors, including the levels of innovation, the development costs and the availability of capital resources to fund those costs, the levels of competition from others developing similar or other competing technologies, our ability to obtain or maintain government permits or certifications, the effectiveness of production, distribution and marketing efforts, market demand, market growth or shrinkage, market acceptance and the costs to customers to deploy and provide support for the new technologies.

We may not achieve significant revenue from new product and service investments for a number of years, if at all.

28 unchanged sentences

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.

Our collaborative arrangements also involve risks that participating parties may disagree on business decisions and strategies.

Under these arrangements, participating parties may disagree on business decisions and strategies.

These disagreements could result in delays, additional costs and risks of litigation.

Our inability to successfully maintain existing collaborative relationships or enter into new collaborative arrangements 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

28 unchanged sentences

Our business may be adversely affected by the outcome of legal proceedings, investigations, disputes and other contingencies that cannot be predicted with certainty.

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.

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.

Subsequent developments in legal proceedings may affect our assessment and estimates of the loss contingency recorded as a liability or as a reserve against assets in our financial statements.

7 unchanged sentences

In complying with these laws and regulations, we may incur significant costs, and non-compliance may result in the imposition of fines and penalties, including contractual damages.

If we fail to comply with these laws and regulations or if a government audit, review, or investigation uncovers improper or illegal activities, we may be subject to civil penalties, criminal penalties, or administrative sanctions, including suspension or debarment from contracting with the U.S.

Our reputation could suffer harm if allegations of impropriety were made or found against us, which could adversely affect our operating performance and may result in additional expenses and possible loss of revenue.

If we fail to comply with existing or future laws and regulations or if a government audit, review, or investigation uncovers improper or illegal activities, we may be subject to civil penalties, criminal penalties, or administrative sanctions, including suspension or debarment from contracting with the U.S.

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.

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.

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.

Further, our reputation could suffer harm if allegations of impropriety were made or found against us, which could adversely affect our operating performance and may result in additional expenses and possible loss of revenue.

Employee, agent or partner misconduct or our overall failure to comply with laws, regulations or government contracts could weaken our ability to win contracts, lead to the suspension of our operations and result in reduced revenues and profits.

14 unchanged sentences

• 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 and other government agencies;

• unplanned expenditures relating to maintenance, operation, security, defects, upgrades and repairs required by the NRC, CNSC and other government agencies;

• limitations on the amounts and types of insurance commercially available to cover losses that might arise in connection with nuclear operations;

1 unchanged sentence

Our nuclear operations are subject to various safety-related requirements imposed by the U.S.

Government, the DOE and the NRC.

Government, the DOE, the NRC and the CNSC.

In the event of non-compliance, these agencies might increase regulatory oversight, impose fines or shut down our operations, depending upon the assessment of the severity of the situation.

2 unchanged sentences

Government contracts.

Government contract laws and regulations affect how we do business with our customers and, in some instances, impose added

costs on our business.

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.

9 unchanged sentences

The Price-Anderson Act and Canada's NLCA indemnification provisions may not apply to all liabilities that we might incur while performing services as a contractor for the DOE and the nuclear power industry.

If an incident or evacuation is not covered under the Price-Anderson Act's or Canada's NLCA's indemnification provisions, we could be held liable for damages, regardless of fault, which could have an adverse effect on our results of operations and financial condition.

In connection with the international transportation of toxic, hazardous and radioactive materials, it is possible for a claim to be asserted that may not fall within the indemnification provided by the Price-Anderson Act or Canada's NLCA.

3 unchanged sentences

Public Law 85-804 authorizes certain agencies of the U.S.

Government, such as the DOE and the U.S.

Department of Defense, to indemnify their contractors against unusually hazardous or nuclear risks when such action would facilitate the national defense.

Government, such as the DOE and the DoD, to indemnify their contractors against unusually hazardous or nuclear risks when such action would facilitate the national defense.

However, because the indemnification protections afforded by Public Law 85-804 are granted on a discretionary basis, situations could arise where the U.S.

4 unchanged sentences

Failure to properly handle these materials could pose a health risk to humans or wildlife and could cause personal injury and property damage (including environmental contamination).

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.

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.

4 unchanged sentences

Such expenditures and liabilities may adversely affect our business, financial condition, results of operations and cash flows.

In addition, some of our operations and the operations of predecessor owners of some of our properties have exposed us to civil claims by third parties for liability

resulting from alleged contamination of the environment or personal injuries caused by releases of hazardous substances into the environment.

In addition, some of our operations and the operations of predecessor owners of some of our properties have exposed us to civil claims by third parties for liability resulting from alleged contamination of the environment or personal injuries caused by releases of hazardous substances into the environment.

See the heading "Governmental Regulations and Environmental Matters" in Item 1 of this Report.

In our contracts, we seek to protect ourselves from liability associated with accidents, but there can be no assurance that such contractual limitations on liability will be effective in all cases or that our or our customers' insurance will cover all the liabilities we have assumed under those contracts.

The costs of defending against a claim arising out of a nuclear incident or precautionary evacuation, and any damages awarded as a result of such a claim, could adversely affect our results of operations and financial condition.

We maintain insurance coverage as part of our overall risk management strategy and due to requirements to maintain specific coverage in our financing agreements and in many of our contracts.

1 unchanged sentence

In addition, comparable insurance may not continue to be available to us in the future at acceptable prices, or at all.

Our business requires us to obtain, and to comply with, national, state and local government permits and approvals.

Our business is required to obtain, and to comply with, national, state and local government permits and approvals.

Our business requires us to obtain, and to comply with, federal, state and local government permits and approvals.

Our business is required to obtain, and to comply with, federal, state and local government permits and approvals.

Any of these permits or approvals may be subject to denial, revocation or modification under various circumstances.

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors