What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-02-27 compared with 2023-02-23 · 47 added, 80 removed, 409 unchanged (24% of the section changed)

8 unchanged sentences

Government Operations and Commercial Operations.

Our reportable segments reflect changes we made during the first quarter of 2022 to better align our businesses by their government and commercial nature, which reflects the manner in which our operating segment information is reported for purposes of assessing operating performance and allocating resources.

Prior to 2022, we reported three segments:

Nuclear Operations Group, Nuclear Power Group and Nuclear Services Group.

Our Government Operations segment consists of our legacy Nuclear Operations Group and Nuclear Services Group segments with certain research and development activities in the areas of advanced reactors and advanced manufacturing.

Our Commercial Operations segment consists of our legacy Nuclear Power Group segment with certain research and development and commercialization activities in the areas of medical and industrial radioisotopes and radiopharmaceuticals.

Both segments now include research and development and certain commercialization activities associated with new technologies previously reported outside of our reportable segments.

The change in our reportable segments had no impact on our previously reported consolidated results of operations, financial condition or cash flows.

We have applied the change in reportable segments to previously reported historical financial information and related disclosures included in this Report.

For financial information regarding each of our segments and financial information regarding geographic areas, see Note 15 and Note 3 to our consolidated financial statements included in this Report.

6 unchanged sentences

Department of Energy ("DOE")/National Nuclear Security Administration's ("NNSA") Naval Nuclear Propulsion Program.

In addition, we perform fabrication activities for missile launch tubes for U.S.

Navy submarines and supply proprietary and sole-source valves, manifolds and fittings to global naval and commercial shipping customers.

In addition, we supply proprietary and sole-source valves, manifolds and fittings to global naval and commercial shipping customers.

Our Government Operations segment specializes in the design and manufacture of close-tolerance and high-quality equipment for nuclear applications.

10 unchanged sentences

We expect that orders for nuclear components will continue to be a significant part of backlog for the foreseeable future.

In April 2022, the U.S.

In March 2023, the U.S.

Navy issued its 30-year shipbuilding plan containing three alternative procurement profiles based upon varied funding assumptions.

All three indicate growth in the total number of ships and a sustained, or increased, procurement profile for nuclear-powered submarines and aircraft carriers.

While the current presidential administration may make further changes with its fiscal year 2024 budget submission, we have made additional capital expenditures and investments in personnel to meet the current demand requirements and we expect to continue making such expenditures and investments.

We plan to make additional capital expenditures and investments in personnel to meet the current demand requirements, and we expect to continue making such expenditures and investments in the future.

This segment also provides various services to the U.S.

3 unchanged sentences

Government and the performance scores we and our consortium partners earn in managing and operating these sites.

With our specialized capabilities of full life-cycle management of special materials, facilities and technologies, we believe this segment is well-positioned to continue participating in the ongoing cleanup, operation and management of critical government-owned nuclear sites, laboratories and manufacturing complexes maintained by the DOE, NASA and other federal agencies.

With our specialized capabilities of full life-cycle management of special materials, facilities and technologies, we believe that we are well-positioned to continue participating in the ongoing cleanup, operation and management of critical government-owned nuclear sites, laboratories and manufacturing complexes maintained by the DOE, NASA and other federal agencies.

The Government Operations segment is also a leader in the development of advanced nuclear reactors for a variety of power and propulsion applications in the space and terrestrial domains.

22 unchanged sentences

• metallographic and chemical analysis.

This segment also manufactures and supplies products for diagnostic imaging and radiotherapeutic treatments.

It is also a partner for contract development and manufacturing services for life science and pharmaceutical companies.

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.

1 unchanged sentence

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.

Acquisitions and Divestitures

Acquisition of Dynamic Controls Limited and Citadel Capital Corporation

3 unchanged sentences

These companies are reported as part of our Government Operations segment.

Acquisition of Laker Energy Products Ltd.

On January 2, 2020, our subsidiary BWXT Canada Ltd.

acquired Laker Energy Products Ltd., which was renamed BWXT Precision Manufacturing Inc.

("Precision Manufacturing").

Precision Manufacturing is a global supplier of nuclear-grade materials and precisely machined components for CANDU nuclear power utilities and is reported as part of our Commercial Operations segment.

Divestiture of U.S.-Based Commercial Nuclear Services Business

On May 29, 2020, our subsidiary BWXT Nuclear Energy, Inc.

divested its U.S.-based commercial nuclear services business, a component of our Government Operations segment.

In a cashless transaction, we exchanged net assets totaling $18.0 million, consisting primarily of property, plant and equipment and certain warranty obligations, for a manufacturing facility and the associated land of approximately the same value.

The acquired assets are reported as part of the Government Operations segment.

See Note 2 to our consolidated financial statements included in this Report for additional information on acquisitions and divestitures.

See Note 2 to our consolidated financial statements included in this Report for additional information on acquisitions.

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.

8 unchanged sentences

Government Operations

The majority of the revenue generated by this segment is from long-term contracts with the U.S.

DOE/NNSA's Naval Nuclear Propulsion Program.

The majority of the revenue generated by this segment is from long-term contracts with the DOE/NNSA's Naval Nuclear Propulsion Program.

Unless otherwise specified in a contract, allowable and allocable costs are billed to contracts with the U.S.

25 unchanged sentences

These contracts are generally structured as five-year contracts with options for up to five additional years, which are exercisable by the customer, or include provisions whereby the contract durations can be extended as a result of the achievement of certain performance metrics.

These are generally cost-reimbursable contracts that include an award fee that is primarily based on annual performance, with monthly provisional fee payments and annual true-up payments.

These are generally cost-reimbursable contracts that include an award fee that is primarily based on annual performance, with periodic provisional fee payments and annual true-up payments.

Depending on the type of contract, the contractor may be required to supply working capital, which is reimbursed by the U.S.

Government through regular invoicing.

This segment also serves customers of our advanced technology platforms primarily through the use of fixed-price contracts that are awarded following a competitive bid process, primarily in the early design and development phases of the underlying program.

Fixed-price contracts entail more risk to us because the price has been pre-determined and is generally not subject to adjustment, regardless of costs incurred, unless authorized by the customer.

We expect to transition these programs to cost-reimbursable contracts which will minimize our overall risk as the underlying projects increase in scale.

This segment also serves customers of our advanced technology platforms primarily through contracts that are awarded following a competitive bid process, primarily in the early design and development phases of the underlying program.

Most of our contracts in this area are cost-plus which reduces our overall risk as the underlying projects increase in scale.

Commercial Operations

31 unchanged sentences

Government are subject to these annual funding approvals, the total values of the underlying programs are significantly larger.

The value of unexercised options excluded from backlog as of December 31, 2022 was approximately $200 million, which is expected to be awarded in annual installments through 2024, subject to annual Congressional appropriations.

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.

The competitive environments in which each segment operates are described below.

15 unchanged sentences

Government and the operation of U.S.

Government facilities include, but are not limited to, Bechtel National, Inc., Amentum, Fluor Corporation, Jacobs Engineering Group, Inc., Northrop Grumman Corporation, Huntington Ingalls Industries, Inc., Honeywell International, Inc., Leidos, Inc., Westinghouse Electric Corporation and Atkins (a member of SNC-Lavalin Group, Inc.).

The primary bases of competition for this segment are experience, past performance, availability of key personnel and technical capabilities.

2 unchanged sentences

This segment competes with a number of companies specializing in nuclear capabilities including, but not limited to, Framatome, Cameco Corporation, Doosan Heavy Industries & Construction Co., Ltd., E.S.

Fox Limited, AECON Group Inc., Bechtel National, Inc., Westinghouse Electric Corporation and SNC-Lavalin Group, Inc.

Fox Limited, AECON Group Inc., Bechtel National, Inc., Westinghouse Electric Corporation and AtkinsRéalis.

The primary bases of competition for this segment are price, technical capabilities, quality, timeliness of performance, breadth of products and services and willingness to accept project risks.

This segment also manufactures medical radioisotopes, radiopharmaceuticals and medical devices, and partners with life science and pharmaceutical companies developing new drugs.

This segment competes with a number of nuclear medicine companies which include, but are not limited to, Curium, Lantheus Holdings, Inc.

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.

2 unchanged sentences

We share in the ownership of a variety of entities with third parties, primarily through corporations, limited liability companies and partnerships, which we refer to as "joint ventures." Through these joint venture arrangements, our Government Operations segment primarily manages and operates nuclear facilities and associated plant infrastructure, constructs large capital facilities, provides safeguards and security for inventory and assets, supports and conducts research and development for advanced energy technology and manages environmental programs for the DOE, the NNSA and NASA.

We generally account for our investments in joint ventures under the equity method of accounting.

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.

Newport News Nuclear BWXT – Los Alamos, LLC, a limited liability company formed in 2017 by Stoller Newport News Nuclear, Inc., a subsidiary of Huntington Ingalls Industries, Inc.'s Technical Solutions division, and BWXT Technical Services Group, Inc.

Newport News Nuclear BWXT – Los Alamos, LLC, a limited liability company formed by Stoller Newport News Nuclear, Inc., a subsidiary of Huntington Ingalls Industries, Inc.'s Technical Solutions division, and BWXT Technical Services Group, Inc.

("BWXT TSG"), was awarded a contract to perform environmental monitoring and remediation, waste management and disposition, and decontamination and decommissioning at the Los Alamos National Laboratory site and surrounding private and government-owned lands.

• Lawrence Livermore National Laboratory.

Lawrence Livermore National Security, LLC, a limited liability company formed in 2006 by the University of California, Bechtel National, Inc., Amentum and BWXT Government Group, Inc., manages and operates Lawrence Livermore National Laboratory located in Livermore, California.

Lawrence Livermore National Security, LLC, a limited liability company formed by the University of California, Bechtel National, Inc., Amentum and BWXT Government Group, Inc., manages and operates Lawrence Livermore National Laboratory located in Livermore, California.

The laboratory serves as a national resource in science and engineering, focused on national security, energy, the environment and bioscience, with special responsibility for nuclear devices.

• Savannah River Liquid Waste Disposition Program.

Savannah River Remediation LLC, a limited liability company formed in 2009 by Amentum, Bechtel National, Inc., CH2M Hill Constructors, Inc.

and BWXT TSG, became the liquid waste contractor for the DOE's Savannah River Site located in Aiken, South Carolina.

This contract ended in February 2022 and was replaced by the Savannah River Integrated Mission Completion contract, which was awarded to another BWXT joint venture in October 2021, as described below.

• Savannah River Integrated Mission Completion Contract.

In October 2021, Savannah River Mission Completion LLC, a limited liability company formed by BWXT TSG, Amentum and Fluor Federal Services, Inc.

was awarded a contract to reduce environmental and financial liabilities for the DOE at the Savannah River Site located in Aiken, South Carolina.

This contract began on February 27, 2022, the primary objective of which is to receive, store, treat and dispose of radioactive liquid waste.

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.

1 unchanged sentence

and BWXT TSG to provide nuclear operations, decontamination and decommissioning services at the Portsmouth Gaseous Diffusion Plant in Portsmouth, Ohio.

A request for proposal was issued by the DOE in 2022 as a follow on to this contract.

An award is expected in the first half of 2023.

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.

2 unchanged sentences

Nuclear Regulatory Commission ("NRC") licensed disposal area management, waste management and nuclear materials disposition, and safeguards and security.

• Waste Isolation Pilot Plant.

Nuclear Waste Partnership, LLC is a limited liability company formed by Amentum, BWXT TSG and Areva Federal Services, LLC as the major subcontractor that manages and operates the DOE's Waste Isolation Pilot Plant in Carlsbad, New Mexico.

A follow on contract was awarded by the DOE to a competitor in the fourth quarter of 2022.

Transition to the new contractor was completed in February 2023.

• Synergy Achieving Consolidated Operations & Maintenance (SACOM).

15 unchanged sentences

Although shortages of some raw materials have existed occasionally, no serious shortage exists at the present time.

Our Government Operations and Commercial Operations segments rely on a limited number of suppliers, including single-source suppliers, for certain materials used in its products;

however, we believe the suppliers of these materials are reliable.

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

Additionally, we and the U.S.

3 unchanged sentences

Our employees are responsible for providing safe and effective nuclear solutions for global security, clean energy, environmental restoration, nuclear medicine and space exploration.

Through their hard work, dedication and innovation, we have developed new technologies that benefit our customers, build our business and enhance our lives.

We encourage innovation to develop new technologies, improve our products and open new markets.

Our goal is to be the employer of choice within our industry and the communities in which we operate.

We focus on maintaining a solid pipeline of talent throughout our organization and continually developing the capabilities and skills needed for the future of our business.

We focus on maintaining a solid pipeline of talent throughout our organization and developing the capabilities and skills in our workforce needed for the future of our business.

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.

1 unchanged sentence

(6,200 employees) and Canada (1,600 employees).

Many of our operations are subject to union contracts, which we customarily negotiate periodically.

Many of our operations are subject to union contracts, which we negotiate periodically.

At December 31, 2023, approximately 2,000 of our employees were members of labor unions.

2 unchanged sentences

Our compensation plans are designed to reward our employees for achieving and exceeding objectives that create long-term value for shareholders.

The success and growth of our business is attributable to our ability to attract, develop, and retain talented and high-performing employees at all levels in our Company.

Our compensation programs are designed to ensure we remain competitive relative to the markets in which we operate;

The success and growth of our business is attributable to our ability to attract, develop, engage and retain talented and high-performing employees at all levels in our Company.

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;

1 unchanged sentence

and recognize employees who make outstanding contributions to the organization.

Providing comprehensive, competitive, and affordable retirement, health, income protection and other benefits is also central to our attraction and retention strategy.

We offer health benefits which include various medical/pharmacy plan options, health savings accounts for those in high deductible health plans, and flexible spending accounts for both health care and dependent care are also available to employees.

Providing comprehensive, competitive, and affordable retirement, healthcare, income protection and other benefits is also central to our attraction and retention strategy.

Our income protection plans provide coverage for employees in the event of an unexpected illness or injury.

9 unchanged sentences

Diversity, Equity and Inclusion

We value the diversity of our employees and are committed to providing an engaging and inclusive atmosphere for all employees that promotes productivity and encourages creativity and innovation.

We maintain a Diversity and Inclusion ("D&I") Committee comprised of a rotating group of employees representing various job functions, levels and backgrounds.

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")

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.

5 unchanged sentences

We provide our employees upfront and ongoing training to ensure that environmental, health and safety policies and procedures are effectively communicated and implemented.

We take pride in the fact that we operate NRC Category 1 and Canadian Nuclear Safety Commission ("CNSC") licensed facilities and have instilled as a core value a culture that prioritizes safety with a vision of zero injuries and incidents at all of our work locations.

We operate NRC Category 1 and Canadian Nuclear Safety Commission ("CNSC") licensed facilities and have instilled as a core value a culture that prioritizes safety with a vision of zero injuries and incidents at all of our work locations.

In pursuit of an injury-free workplace, we constantly monitor and assess all injuries and "near misses" for any lessons we can learn and leverage to reduce the risk inherent in occupational activities.

In addition to providing regular

safety training to our employees, we routinely conduct safety culture surveys to identify employee concerns.

In addition to providing regular safety training to our employees, we routinely conduct safety culture surveys to identify employee concerns.

We use this information to further improve our safety culture and programs in an effort to prevent future occupational and environmental incidents.

28 unchanged sentences

We primarily seek to do this through contractual protections, including waivers of consequential damages, indemnities, caps on liability, liquidated damages provisions and access to the insurance of other parties.

We also procure insurance, operate our own captive insurance company or establish funded and/or unfunded reserves.

We also procure insurance, operate our own captive insurance company and establish funded and/or unfunded reserves.

However, none of these methods will eliminate all risks.

Depending on competitive conditions, the nature of the work, industry custom and other factors, we may not be successful in obtaining adequate contractual protection from our customers and other parties against losses and liabilities arising out of or related to the performance of our work.

The scope of the protection may be limited, may be subject to conditions and may not be supported by adequate insurance or other means of financing.

The scope of the protection may be limited, may be subject to conditions and may not be supported by adequate insurance or other means of risk financing.

In addition, we may have difficulty enforcing our contractual rights with others following a material loss.

1 unchanged sentence

Insurers frequently react to market losses by ceasing to write or severely limiting coverage for certain exposures.

Risks that we have frequently found difficult to cost-effectively insure against include, but are not limited to, property losses from wind, flood and earthquake events, nuclear hazards and war, pollution liability, liabilities related to occupational health exposures (including asbestos), professional liability/errors and omissions coverage, the failure, misuse or unavailability of our information technology systems, the failure of security measures designed to protect our information technology systems from security breaches and liability related to risk of loss of our work in progress.

Risks that we have frequently found difficult to cost-effectively insure against include, but are not limited to, property losses from wind, flood and earthquake events, nuclear hazards, war, pollution liability (including per- and polyfluoroalkyl substances), liabilities related to occupational health exposures (including asbestos), professional liability, errors and omissions coverage, the failure, misuse or unavailability of our information and/or operational technology systems, the failure of security measures designed to protect our information technology systems from security breaches and liability related to risk of loss of our work in progress.

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.

2 unchanged sentences

We also attempt to cap our overall liability in our contracts.

To protect against liability from claims brought by third parties, we seek to be insured under the utility customer's nuclear liability policies and have the benefit of the indemnity and limitation of any applicable liability provision of the Price-Anderson Act.

To protect against liability from claims brought by third parties in the U.S., we seek to be insured under the utility customer's nuclear liability policies and have the benefit of the indemnity and limitation of any applicable liability provision of the Price-Anderson Act.

The Price-Anderson Act limits the public liability of U.S.

manufacturers and operators of licensed nuclear facilities and other parties who may be liable in respect of, and indemnifies them against, all claims in excess of a certain amount.

manufacturers and operators of licensed nuclear facilities and other parties who may be liable in respect of, and indemnifies them against, all claims in excess of a statutory amount.

This amount is determined by the sum of commercially available liability insurance plus certain retrospective premium assessments payable by operators of commercial nuclear reactors.

21 unchanged sentences

Government facilities.

This participation is customarily accomplished through the participation in joint ventures with other contractors for

any given facility.

This participation is customarily accomplished through the participation in joint ventures with other contractors for any given facility.

These activities involve, among other things, handling nuclear devices and their components.

47 unchanged sentences

Although we have recorded reserves in connection with certain of these environmental matters, due to the uncertainties associated with environmental remediation, there can be no assurance that the actual costs resulting from these remediation matters will not exceed the recorded reserves.

Our compliance with federal, foreign, state and local environmental control and protection regulations resulted in pre-tax charges of approximately $20.0 million, $17.5 million and $16.3 million in the years ended December 31, 2022, 2021 and 2020, respectively.

Our compliance with federal, foreign, state and local environmental control and protection regulations resulted in pre-tax expense of approximately $20.0 million, $20.0 million and $17.5 million in the years ended December 31, 2023, 2022 and 2021, respectively.

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.

2 unchanged sentences

Based on our experience to date, we do not currently anticipate any material adverse effect on our business or consolidated financial condition as a result of future compliance with existing environmental laws and regulations.

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.

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.

6 unchanged sentences

In 2002, Congress directed the U.S.

for Coordination on Cleanup and Decommissioning of the Formerly Utilized Sites Remedial Action Program Sites with NRC-Licensed Facilities, dated July 5, 2001 (the "MOU").

Army Corps of Engineers ("Army Corps") to clean up radioactive waste at the Shallow Land Disposal Area located in Parks Township, Armstrong County, Pennsylvania (the "SLDA"), consistent with the Memorandum of Understanding between the Nuclear Regulatory Commission and the United States Army Corps of Engineers for Coordination on Cleanup and Decommissioning of the Formerly Utilized Sites Remedial Action Program Sites with NRC-Licensed Facilities, dated July 5, 2001 (the "MOU").

From 1961 to 1970, the SLDA was operated by the Nuclear Materials and Equipment Corporation ("NUMEC") pursuant to Atomic Energy Commission ("AEC") License SNM-145.

28 unchanged sentences

From time to time, our management or persons acting on our behalf make forward-looking statements to inform existing and potential security holders about our Company.

Statements and assumptions regarding expectations and projections of specific projects, our future backlog, revenues, income and capital spending, strategic investments, acquisitions or divestitures, return of capital activities or margin improvement initiatives are examples of forward-looking statements.

Statements and assumptions regarding expectations and projections of specific projects, our future backlog, revenues, income, capital spending, strategic investments, acquisitions or divestitures, return of capital activities or margin improvement initiatives are examples of forward-looking statements.

Forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "anticipate," "plan," "seek," "goal," "could," "intend," "may," "should" or other words that convey the uncertainty of future events or outcomes.

1 unchanged sentence

Statements in this Report, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements.

Those forward-looking statements appear in Item 1, Item 3, Item 7 and in the notes to our consolidated financial statements in Item 8 of this Report and elsewhere in this Report.

These forward-looking statements appear in Item 1, Item 3, Item 7 and in the notes to our consolidated financial statements in Item 8 of this Report and elsewhere in this Report.

We have based our forward-looking statements on information currently available to us and our current expectations, estimates and projections about our industries, business environment and our Company.

19 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 1. Business