What changed in this filing

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Item 1A. Risk Factors

2024-02-27 compared with 2023-02-23 · 67 added, 44 removed, 331 unchanged (25% of the section changed)

19 unchanged sentences

Government programs, either of which may result in a reduction in the number of contract award opportunities available to us, a reduction of activities at DOE sites and an increase in costs, including the costs of obtaining contract awards.

We anticipate the federal budget will continue to be subject to debate and compromise shaped by, among other things, heightened political tensions, the global security environment, inflationary pressures and macroeconomic conditions.

This may result in shifting funding priorities, which could have material adverse impacts on defense spending broadly and our programs.

Government typically can terminate or modify any of its contracts with us either for its convenience or if we default by failing to perform under the terms of the applicable contract.

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.

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Government fails to renew these contracts or modifies key terms, our results of operations and cash flows would be adversely affected.

As a result of these and other factors, the termination of one or more of our significant government contracts, our suspension from government contract work, the failure of the U.S.

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

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

Federal debt ceiling limitations, reductions in government spending, or impacts to federal appropriations that fund many of our contracts (such as those impacts arising from a continuing resolution or government shutdown), could adversely impact government spending for the products and services we provide.

Federal government spending reductions could adversely impact U.S.

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however, reductions in federal government spending could adversely impact programs in which we provide products or services.

In addition, these cuts could adversely affect the viability of the suppliers and subcontractors under our programs.

We may also be required to maintain operations of our joint ventures if 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.

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.

In the event of a continuing resolution, we expect our key programs will continue to be supported and funded under the continuing resolution.

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.

Government would enter a whole or partial shutdown.

Additionally, there is a risk that no continuing resolution would be entered into in certain circumstances, which would also cause a whole or partial government shutdown.

The impact of any government shutdown is uncertain.

However, if a government shutdown were to occur and were to continue for an extended period, our employees could be at risk of furlough and we could be at risk of program cancellations, schedule delays, production halts and other disruptions and nonpayment, which could have a material adverse effect on our financial condition, results of operations and cash flows.

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

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We are engaged in a number of highly competitive industries and we have priced a number of our contracts on a fixed-price basis.

Our actual costs could exceed our projections, which may result in reduced profit or loss.

Our actual costs on certain contracts have, and on other contracts could, exceed our projections, which has resulted, and may in the future also result in reduced profit or loss.

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.

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We face various security threats, including cyber threats, threats to the physical security of our facilities and infrastructure (including those that we manage and operate for our customers), and threats from terrorist acts, as well as the potential for business disruptions associated with these threats.

Further, security breaches within our supply chain or unauthorized disclosures of confidential information could also adversely affect our business and reputation.

Although we utilize a combination of tailored and industry standard security measures and technology to monitor and mitigate these threats, we cannot guarantee that these measures and technology will be sufficient to prevent security threats from materializing.

We have been, and will likely continue to be, subject to cyber-based attacks and other attempts to threaten our information technology systems, including attempts to gain unauthorized access to our proprietary and sensitive information and attacks from computer hackers, viruses, malicious code, internal threats and other security problems.

Government contractor, we may be prone to a greater number of those threats than companies in other industries.

Government contractor, we may be prone to a greater number of these threats than companies in other industries.

These threats range from attacks common to most industries to more advanced and persistent threats from highly-organized adversaries targeting us because we are a U.S.

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

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

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

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

In addition, the implementation of new technology systems may cause disruptions in our business operations.

Such disruptions and any other information technology system disruptions, and our ability to mitigate those disruptions, if not anticipated and appropriately mitigated, could have a material adverse effect on our business.

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

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.

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.

Such disruptions and any other information technology system disruptions, and our ability to mitigate these disruptions, if not anticipated and appropriately mitigated, could have a material adverse effect on our business.

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

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

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.

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.

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") 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.

These cost increases may result in unfavorable changes in estimates which may not be fully recoverable or adequately covered by insurance or through government assistance programs.

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

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

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

We also rely on intellectual property we license from third parties.

Our failure to protect our intellectual property rights, our infringement of third-party intellectual property or our inability to obtain or renew licenses to use intellectual property of third parties, could adversely affect our business.

Failure to protect our intellectual property rights, alleged infringement of third-party intellectual property rights or our inability to obtain or renew licenses to use intellectual property of third parties, could adversely affect our business.

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 some foreign countries where we operate.

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.

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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 operations are subject to disruption caused by severe weather, environmental and natural disasters, pandemics and other natural and manmade events that could adversely affect our manufacturing facilities or the infrastructure necessary to support them.

Our ability to operate or operate profitability could be significantly impacted, which could have a material adverse effect on our business, financial condition and results of operations.

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 ability to operate or operate profitably could be significantly impacted, which could have a material adverse effect on our business, financial condition and results of operations.

We operate a number of large manufacturing facilities in the U.S.

and Canada, including NRC Category 1 and CNSC-licensed nuclear manufacturing and fuel facilities.

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

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

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.

Additionally, increased concern regarding the environment and global climate change may result in state, federal or international requirements such as the imposition of stricter limits on greenhouse gas emissions, carbon pricing mechanisms, increasing global chemical restrictions and bans, water and waste requirements and compliance and disclosure requirements.

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.

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

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Also, catastrophic events customarily result in decreased coverage limits, more limited coverage, additional exclusions in coverage, increased premium costs and increased deductibles and self-insured retentions.

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

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

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.

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.

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.

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.

2 unchanged sentences

Most insurable liabilities arising from these sites are not protected in our corporate insurance program.

Instead, we rely on government contractual agreements, some insurance purchased specifically for the sites and certain specialized self-insurance programs funded by the U.S.

Instead, we rely on government contractual agreements, including a U.S.

Government-provided nuclear indemnity (see the below discussion regarding the Price-Anderson Act), some insurance purchased specifically for the sites and certain specialized self-insurance programs funded by the U.S.

Government has historically fulfilled its contractual agreement to reimburse for insurable claims, and we expect it to continue this process.

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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.

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.

Additionally, upon the February 22, 2006 effectiveness of the settlement relating to the Chapter 11 proceedings involving several of our former subsidiaries, most of our subsidiaries contributed substantial insurance rights providing coverage for, among other things, asbestos and other personal injury claims, to an asbestos personal injury trust.

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Our business strategy includes acquisitions and strategic investments to support our growth, which can create certain risks and uncertainties.

We intend to pursue growth through the acquisition of, or strategic investments in, businesses or assets that we believe will enable us to strengthen our existing businesses and expand into adjacent industries.

We intend to pursue growth through the acquisition of, or strategic investments in, businesses or assets that we believe will enable us to strengthen our existing business and expand into adjacent industries.

We may be unable to execute this growth strategy if we cannot identify suitable businesses or assets, reach agreement on potential strategic transactions on acceptable terms or for other reasons.

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

Additionally, there can be no assurance that the current technologies that our businesses rely upon will remain competitive, or that competing technologies will not disrupt our business.

Additionally, there can be no assurance that the current technologies that our business relies upon will remain competitive, or that competing technologies will not disrupt our business.

Moreover, new products and services may not be profitable, and, even if they are profitable, our operating margins from new products and services may not be as high as the margins we have experienced historically.

91 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, CNSC and other government agencies;

• 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;

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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.

Environmental, social and governance matters and any related reporting obligations may impact our business.

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.

Our response will require increased costs to comply, the implementation of new reporting processes, entailing additional compliance risk, a skilled workforce and other incremental investments.

Limitations or modifications to indemnification regulations of the U.S.

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The Price-Anderson Act comprehensively regulates the manufacture, use and storage of radioactive materials, while promoting the nuclear industry by offering broad indemnification to commercial nuclear power plant operators and DOE contractors.

Because we provide nuclear fabrication and other services to the DOE relating to its nuclear devices, facilities and other programs and the nuclear power industry in the ongoing maintenance and modifications of its nuclear power plants, including the manufacture of equipment and other components for use in such nuclear power plants, we may be entitled to some of the indemnification protections under the Price-Anderson Act against liability arising from nuclear incidents in the U.S.

The indemnification authority under the Price-Anderson Act was extended through December 2025 by the Energy Policy Act of 2005.

Because we provide nuclear fabrication and other services to the DOE relating to its nuclear devices, facilities and other programs and the nuclear power industry in the ongoing maintenance and modifications of its nuclear power plants, including the manufacture of equipment and other components for use in such nuclear power plants, we expect, in the event of a nuclear incident or precautionary evacuation (as such terms are defined in the Atomic Energy Act), to be entitled to the indemnification protections under the Price-Anderson Act against liability arising from nuclear incidents occurring in the U.S.

(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).

The further extension of the NRC and DOE indemnification authority beyond 2025 is a matter presently being considered in the U.S.

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.

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.

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).

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.

We also provide nuclear fabrication and other services to the nuclear power industry in Canada and other countries.

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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 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.

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.

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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.

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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.

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.

Although existing licenses are routinely renewed by various regulators, renewal could be denied or jeopardized by various factors, including:

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Our inability to obtain, and to comply with, the permits and approvals required for our business could have a material adverse effect on us.

UNRESOLVED STAFF COMMENTS

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