What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-23 compared with 2025-02-24 · 264 added, 168 removed, 1435 unchanged (23% of the section changed)

21 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Over Time Revenue Recognition – Estimating Costs at Completion – Refer to Note 1 and Note 3 to the Financial Statements

Acquisitions – Kinectrics Inc.

– Fair Value of Property, Plant and Equipment and Customer Relationships Intangible Asset – Refer to Note 2 to the financial statements

Critical Audit Matter Description

The Company generally recognizes contract revenue and related costs over time for individual performance obligations based on a cost-to-cost method in accordance with Financial Accounting Standards Board Topic Revenue from Contracts with Customers .

The Company recognizes estimated contract revenue and resulting income based on the measurement of the extent of progress toward completion as a percentage of the total project.

The Company reviews contract price and cost estimates periodically as the work progresses and reflect adjustments proportionate to the percentage-of-completion in income in the period when those estimates are revised.

The accounting for these contracts involves judgment, particularly as it relates to the process of estimating total costs to complete the performance obligation.

Given the significance of revenue and the level of judgment involved in estimating total costs to complete the performance obligations used to recognize revenue for long-term contracts, auditing such estimates involved especially subjective judgment.

The assets acquired and liabilities assumed in the Kinectrics Inc.

("Kinectrics") transaction have been recorded at estimates of fair value as determined by management, based on information available and assumptions as to future operations.

Of the total assets acquired and liabilities assumed, the Company acquired $175.0 million of property, plant, and equipment and $107.5 million of customer relationships intangible asset.

We identified the fair value of the aforementioned property, plant and equipment and customer relationships intangible asset for the Kinectrics Inc.

acquisition as a critical audit matter because of the significant estimates and assumptions made by management regarding the asset valuation methodology and discount rate for the customer relationships intangible asset acquired as well as the valuation methodology and the cost to replace or reproduce comparable assets for the property, plant, and equipment acquired.

This required a high degree of auditor judgment and an increased extent of effort, including the need

to involve our fair value specialists when performing audit procedures to evaluate the reasonableness of the valuation methodologies applied to the property, plant, and equipment and customer relationships intangible asset acquired.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to revenue recognized over time, including management’s estimates of total contract costs to complete its performance obligations, included the following, among others:

• We tested the effectiveness of controls over revenue recognized over time, including those over cost estimates at completion for performance obligations.

• We tested recorded revenue using analytical procedures.

• We analyzed cumulative adjustments recorded during the year and separately tested those with characteristics of audit interest due to their size to determine that the adjustments were the result of changes in facts and circumstances, recorded in the appropriate period, and for the appropriate amount.

• We analyzed contracts with customers recognized over time to identify whether there are contracts with characteristics of audit interest.

For a contract determined to exhibit characteristics of audit interest, we performed the following testing:

◦ Read the contract to understand the contract terms and the accounting treatment in accordance with generally accepted accounting principles.

◦ Compared the transaction price to the consideration expected to be received based on current rights and obligations under the contract, including modifications that were agreed upon with the customer.

◦ Tested the mathematical accuracy of management’s calculation of the profit margin and the revenue recognized based on the costs incurred during the year, consistent with the cost-plus fixed fee nature of the contract.

Our audit procedures related to the fair value of property, plant, and equipment and customer relationships intangible asset acquired included the following, among others:

• We tested the design and operating effectiveness of controls over management's purchase price allocation procedures, including controls over the methodologies and assumptions used in the fair value for property, plant, and equipment and customer relationships intangible asset, and reviewed the work of management's third-party specialists.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the customer relationships intangible asset valuation methodology and discount rate by:

◦ Testing the source information underlying the determination of the discount rate and testing the mathematical accuracy of the calculation.

◦ Developing a range of independent estimates and comparing those to the discount rate selected by management.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the property, plant, and equipment valuation methodology and the cost to replace or reproduce comparable assets.

We also developed a range of independent estimates and compared to those used by management, including testing the mathematical accuracy of the calculation.

• We evaluated the reasonableness of management's forecasted information used in the valuation models, including estimated future EBITDA, by:

◦ Comparing the estimates to historical and actual results;

◦ Evaluating whether the forecasts were consistent with evidence obtained in other areas of the audit;

◦ Comparing the estimates to third-party economic research, industry performance, and peer company performance;

◦ Corroborating assumptions and estimates with internal communications to management and the Board of Directors;

◦ Testing the accuracy and completeness of certain underlying data used by management.

/S/ DELOITTE & TOUCHE LLP

Charlotte, North Carolina

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13,867 7,478 7,613

Losses on asset disposals and impairments, net 4,390 1,034 5,520

Losses (gains) on asset disposals and impairments, net ( 4,972 ) 4,390 1,034

Selling, general and administrative expenses

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Unrealized gains arising during the period, net of tax provision of $( 187 ), $( 213 ) and $( 247 ), respectively

Reclassification adjustment for (gains) losses included in net income, net of tax provision (benefit) of $ 245 , $ 91 and $( 181 ), respectively

Reclassification adjustment for gains included in net income, net of tax provision of $ 339 , $ 245 and $ 91 , respectively

( 996 ) ( 734 ) ( 264 )

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2,610 2,981 2,669

Unrealized gains (losses) arising during the period, net of tax (provision) benefit of $( 11 ), $( 27 ) and $ 28 , respectively

Unrealized (losses) gains arising during the period, net of tax provision of $( 85 ), $( 11 ) and $( 27 ), respectively

( 60 ) 39 100

Reclassification adjustment for gains included in net income during the period, net of tax provision of $ 80 , $ 0 , and $ 0

Other Comprehensive Income (Loss)

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Contracts in progress 610,315 577,745

Inventories 46,537 40,288

Other current assets 66,078 49,092

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Other Assets 124,625 92,498

TOTAL $ 2,869,924 $ 2,747,065

TOTAL ASSETS $ 4,271,495 $ 2,869,924

See accompanying notes to consolidated financial statements.

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93,578 79,007

Total Liabilities 3,038,483 1,789,520

Commitments and Contingencies (Note 10)

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Total Stockholders' Equity 1,233,012 1,080,404

$ 2,869,924 $ 2,747,065

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,271,495 $ 2,869,924

See accompanying notes to consolidated financial statements.

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Distributions to noncontrolling interests — — — — — — — ( 115 ) ( 115 )

Purchase of capped calls related to convertible senior notes — — ( 97,600 ) — — — ( 97,600 ) — ( 97,600 )

Balance December 31, 2025 128,720,819 $ 1,288 $ 159,884 $ 2,523,631 $ ( 19,373 ) $ ( 1,432,943 ) $ 1,232,487 $ 525 $ 1,233,012

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Income of investees, net of dividends 19,139 ( 10,598 ) 11,130

Losses on asset disposals and impairments - net 4,390 1,034 5,520

Losses (gains) on asset disposals and impairments - net ( 4,972 ) 4,390 1,034

Provision for deferred taxes 49,417 19,845 ( 5,128 )

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CASH FLOWS FROM FINANCING ACTIVITIES:

Payments of short-term borrowing and long-term debt ( 12,500 ) — —

Proceeds from issuance of convertible senior notes 1,250,000 — —

Borrowings of long-term debt 1,030,000 456,000 353,100

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Payment of debt issuance costs ( 33,494 ) — —

Purchase of capped calls related to convertible senior notes ( 131,875 ) — —

Repurchases of common stock ( 30,000 ) ( 20,000 ) —

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Other, net 1,333 ( 207 ) 756

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES ( 252,785 ) ( 169,371 ) 13,952

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 693,640 ( 252,785 ) ( 169,371 )

EFFECTS OF EXCHANGE RATE CHANGES ON CASH ( 4,746 ) ( 2,126 ) 1,937

TOTAL (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS ( 1,044 ) 40,625 1,215

TOTAL INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS 426,633 ( 1,044 ) 40,625

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 80,571 81,615 40,990

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We classify assets and liabilities related to long-term contracts as current using the duration of the related contract or program as our operating cycle, which is generally longer than one year.

We have recast certain amounts previously reported in our consolidated statements of cash flows to conform to the presentation at December 31, 2024.

We have recast certain amounts previously reported in our consolidated balance sheets and statements of cash flows to conform to the presentation at December 31, 2025.

We present the notes to our consolidated financial statements on the basis of continuing operations, unless otherwise stated.

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Naval Nuclear Propulsion Program for use in submarines and aircraft carriers.

Through this segment, we also fabricate fuel-bearing precision components that range in weight from a few grams to hundreds of tons, manufacture electro-mechanical equipment, perform design, manufacturing, inspection, assembly and testing activities and downblend Cold War-era government stockpiles of high-enriched uranium, develop capabilities related to the manufacture of high-purity depleted uranium, design advanced reactors and manufacture other advanced materials and products for commercial, military and space applications.

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

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These services are provided to the U.S.

Department of Energy ("DOE"), including the National Nuclear Security Administration, the Office of Nuclear Energy, the Office of Science and the Office of Environmental Management, the Department of Defense and NASA.

In addition, this segment also develops technology for advanced nuclear reactors for a variety of power and propulsion applications in the space and terrestrial domains and offers complete advanced nuclear fuel and reactor design and engineering, licensing and manufacturing services for these programs.

• Our Commercial Operations segment fabricates commercial nuclear steam generators, nuclear fuel, fuel handling systems, pressure vessels, reactor components, heat exchangers, tooling delivery systems and other auxiliary equipment, including containers for the storage of spent nuclear fuel and other high-level waste and supplies nuclear-grade materials and precisely machined components for nuclear utility customers.

We have supplied the nuclear industry with more than 1,300 large, heavy components worldwide, and we are the only commercial heavy nuclear component manufacturer in North America.

We supply the global nuclear industry with large, heavy components and are the only commercial heavy nuclear component manufacturer in North America.

This segment also provides specialized engineering services that include structural component design, 3-D thermal-hydraulic engineering analysis, weld and robotic process development, electrical and controls engineering and metallurgy and materials engineering.

In addition, this segment offers in-plant inspection, maintenance and modification services for nuclear steam generators, heat exchangers, reactors, fuel handling systems and balance of plant equipment, as well as specialized non-destructive examination and tooling/repair solutions.

This segment also offers a broad suite of nuclear power plant lifecycle support and management services for the global industry and transmission and distribution markets.

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

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Recently Adopted Accounting Standards

In November 2023, the Financial Accounting Standards Board ("FASB") issued updates to Topic Segment Reporting to improve disclosures about a public company's reportable segments.

In December 2023, the Financial Accounting Standards Board ("FASB") issued updates to Topic Income Taxes (hereinafter referred to as "ASU 2023-09") to provide, on an annual basis, disaggregated disclosures with respect to the reconciliation of our effective tax rate, as well as a disaggregation of income taxes paid, net of refunds received.

During the year ended December 31, 2025, we adopted the provisions of this update which are included in Note 5.

The revised disclosures include additional, more detailed information

about our reportable segment's expenses as well as the title and position of our Chief Operating Decision Maker ("CODM").

These disclosure changes will be included in interim periods beginning in the year ending December 31, 2025.

The adoption of these provisions had no impact on our results of operations, financial position or cash flows.

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Under the provisions of this FASB topic, we recognize expense for all share-based awards granted on a straight-line basis over the requisite service periods of the awards, which is generally equivalent to the vesting term.

This topic requires compensation expense to be recognized such that compensation expense is recorded only for those awards expected to vest.

This topic requires compensation expense to be recognized only for those awards expected to vest.

As a result, we periodically review the number of actual forfeitures and record any adjustments deemed necessary each reporting period.

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will enact legislation to adopt Pillar Two it had no impact on our provision for income taxes for the year ended December 31, 2025 and we do not currently expect Pillar Two to significantly impact our provision for income taxes in the future.

On July 4, 2025, President Trump signed into law an act commonly referred to as the "One Big Beautiful Bill Act".

This bill includes a number of tax provisions including extending existing provisions that were set to expire, substantive changes in international tax law rules and the repeal or phase outs of certain energy tax credits.

This legislation did not result in a material impact to our results of operations, financial position or cash flows.

Earnings Per Share

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We perform testing of goodwill for impairment annually or more frequently whenever events or circumstances indicate the carrying value of goodwill may be impaired.

During the year ended December 31, 2023, we changed our annual goodwill impairment test date from September 30 to November 15.

This is a change in method of applying an accounting principle which we believe is a preferable alternative as the new date of assessment is more closely aligned with the approval of our fourth quarter forecast and includes the most recent financial information available.

We may elect to perform a qualitative test when we believe that there is sufficient excess fair value over carrying value based on our most recent quantitative assessment, adjusted for relevant events and circumstances that could affect fair value during the current year.

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Balance at December 31, 2023 $ 173,253 $ 123,767 $ 297,020

Purchase price adjustment 588 — 588

Translation ( 199 ) ( 9,459 ) ( 9,658 )

Balance at December 31, 2024 $ 173,054 $ 114,308 $ 287,362

Purchase price adjustment 74,699 130,055 204,754

Translation 1,170 7,574 8,744

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NRC category 1 license $ 43,830 $ 43,830 $ 43,830

Kinectrics trade name $ 36,433 $ — $ —

The following summarizes the changes in the carrying amount of Intangible Assets:

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2026 $ 20,344

2027 $ 18,692

2028 $ 17,918

2029 $ 17,829

2030 $ 17,436

We lease certain manufacturing facilities, office space and equipment under operating leases with terms of one to 20 years.

Certain of the leases include options to renew for periods of one to ten years .

We include lease options in our

determination of the right-of-use asset and lease liability if it is reasonably certain that we will exercise one or more of the options.

We include lease options in our determination of the right-of-use asset and lease liability if it is reasonably certain that we will exercise one or more of the options.

Leases with initial terms of 12 months or less are excluded from our right-of-use assets and lease liabilities.

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Interest expense (1)

( 4,540 ) ( 2,048 ) ( 2,048 )

Balance at end of period $ 35,984 $ 7,030 $ 9,078

(1) Includes the recognition of prior deferred debt issuance costs associated with former debt instruments of $( 1.5 ) million for the year ended December 31, 2025.

Pension Plans and Postretirement Benefits

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We utilize actuarial valuations to calculate the cost and benefit obligations of our pension and postretirement benefits.

The actuarial valuations utilize significant assumptions in the determination of our benefit cost and

obligations, including assumptions regarding discount rates, expected rate of return on plan assets, mortality and health care cost trends.

The actuarial valuations utilize significant assumptions in the determination of our benefit cost and obligations, including assumptions regarding discount rates, expected rate of return on plan assets, mortality and health care cost trends.

We determine our discount rate based on a yield curve comprising rates of return on high-quality, fixed-income investments currently available and expected to be available during the period to maturity of our pension and postretirement benefit plan obligations.

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Unrecognized prior service cost on benefit obligations ( 17,265 ) ( 15,233 )

Net unrealized gain on available-for-sale investments 267 227

Net unrealized (loss) gain on available-for-sale investments ( 94 ) 267

Accumulated other comprehensive income (loss) $ ( 19,373 ) $ ( 48,211 )

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(In thousands) Line Item Presented

Realized (loss) gain on derivative financial instruments $ ( 96 ) $ ( 72 ) $ ( 370 ) Revenues

Realized gain on derivative financial instruments $ 51 $ ( 96 ) $ ( 72 ) Revenues

1,284 1,075 427 Cost of operations

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$ ( 2,610 ) $ ( 2,981 ) $ ( 2,669 ) Net Income

Realized gain on investments $ 380 $ — $ — Other - net

$ ( 80 ) $ — $ — Income Taxes

$ 300 $ — $ — Net Income

Total reclassification for the period

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At December 31, 2025, we had deferred approximately $ 0.0 million of net gains on these derivative financial instruments.

Assuming market conditions continue, we expect to recognize the majority of this amount in the next 12 months.

For the years ended December 31, 2025, 2024 and 2023, we recognized (gains) losses of $( 19.0 ) million, $( 38.0 ) million and $ 5.1 million, respectively, in Other – net on our consolidated statements of income associated with FX forward contracts not designated as hedging instruments.

At December 31, 2024, our derivative financial instruments consisted of FX forward contracts with a total notional value of $ 441.8 million with maturities extending to July 2026.

At December 31, 2025, our derivative financial instruments consisted of FX forward contracts with a total notional value of $ 246.9 million with maturities extending to April 2028.

These instruments consisted primarily of FX forward contracts to purchase or sell Canadian dollars and Euros.

We are exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments.

We attempt to mitigate this risk by using major financial institutions with

high credit ratings.

Our counterparties to derivative financial instruments have the benefit of the same collateral arrangements and covenants as described under our Credit Facility.

We attempt to mitigate this risk by using major financial institutions with high credit ratings.

Our counterparties to derivative financial instruments have the benefit of the same collateral arrangements and covenants as described under our New Credit Facility.

New Accounting and Disclosure Standards

In December 2023, the FASB issued updates to Topic Income Taxes to provide, on an annual basis, disaggregated disclosures with respect to the reconciliation of our effective tax rate, as well as a disaggregation of income taxes paid, net of refunds received.

The new standard is effective on a prospective basis for annual periods beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of the adoption of this standard and expect that it will only require changes to our disclosures with no impact on our results of operations, financial position or cash flows.

In March 2024, the Securities and Exchange Commission ("SEC") issued a final rule under SEC Release Nos.

33-11275 and 34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors , that would require us to provide climate-related disclosures in annual reports and registration statements beginning with our annual report for the year ending December 31, 2025.

The rule, as issued, would require disclosure of material climate-related risks, our governance and risk management of climate-related risks and any material climate-related targets or goals, greenhouse gas emissions as well as disclosure of the financial statement effects inclusive of capitalized costs, expenses incurred and losses resulting from severe weather events and natural conditions.

In April 2024, the SEC issued an order staying the final rule pending the completion of litigation filed in federal courts challenging it.

We are currently evaluating the impact of the final rule and related litigation on our disclosures.

In November 2024, the FASB issued updates to Topic Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures:

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In September 2025, the FASB issued updates to Topic Intangibles – Goodwill and Other – Internal-Use Software:

Targeted Improvements to the Accounting for Internal-Use Software.

These updates modernize the accounting for internal-use software by eliminating the sequential development stages currently in use, and modify when an entity is required to begin capitalizing software costs.

Furthermore, disclosures for property, plant and equipment will be required for all capitalized software costs.

The updates are effective for annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods.

Early adoption is permitted.

Upon adoption, the updates may be applied prospectively, retrospectively or using a modified transition approach.

We are currently evaluating the impact of the adoption of this standard on our financial condition, results of operations, cash flows and disclosures.

In December 2025 the FASB issued updates to Topic Government Grants – Accounting for Government Grants Received by Business Entities .

These updates add guidance on the recognition, measurement and presentation of government grants where entities historically were required to analogize other existing guidance to determine the appropriate accounting.

The FASB largely leveraged this other guidance in these updates.

The updates are effective for annual periods beginning after December 15, 2028, including interim periods within those fiscal years with early adoption permitted.

We are currently evaluating the impact of the adoption of this standard.

NOTE 2 – ACQUISITIONS

Aerojet Ordnance Tennessee, Inc.

On November 4, 2024, we announced our intention to acquire Aerojet Ordnance Tennessee, Inc.

On January 3, 2025, we acquired all of the equity interests of Aerojet Ordnance Tennessee, Inc.

("A.O.T"), a subsidiary of L3Harris Technologies, Inc.

This acquisition was subsequently completed on January 3, 2025 for approximately $ 105.5 million, subject to certain working capital adjustments.

for approximately $ 101.1 million, subject to certain working capital adjustments, which reflected a $ 2.2 million reduction in the initial purchase price.

A.O.T is a leading provider of advanced special materials which will further enhance our capabilities to develop and manufacture advanced materials and products for commercial, military and space applications.

will be reported as part of our Government Operations segment.

As of the date of this filing, we have not completed a preliminary purchase price allocation.

is reported as part of our Government Operations segment.

Our purchase price allocation resulted in the recognition of $ 75.0 million of goodwill, $ 27.0 million of intangible assets, and $ 12.7 million of property, plant and equipment.

This purchase price allocation reflects a $ 15.0 million increase to Goodwill, primarily related to a revision to our valuation of contract assets and liabilities identified during the three months ended December 31, 2025.

As of December 31, 2025, we completed the determination of fair values of the acquired assets and liabilities assumed.

The intangible assets included above consist of the following (dollar amounts in thousands):

Amount Amortization Period

Customer Relationships $ 25,400 6 years

Backlog $ 1,600 1 year

Kinectrics Inc.

On December 27, 2024, we entered into an agreement to acquire Kinectrics Holdings, Inc., the parent company of Kinectrics Inc.

("Kinectrics") for approximately CAD 782.7 million subject to certain working capital adjustments.

This acquisition is targeted to close in the middle of 2025, following necessary regulatory and other approvals, for approximately $ 525.0 million U.S.

dollar equivalent.

Kinectrics is a leader in providing lifecycle management services for the global nuclear power and transmission and distribution markets and in the production and supply of isotopes for the radiopharmaceutical industry and employs over 1,300 employees located across 20 sites worldwide.

Following the close, Kinectrics will be reported as part of our Commercial Operations segment.

Due to the pending nature of this transaction, we have not initiated a preliminary purchase price allocation as of the date of this filing.

On May 20, 2025, we acquired all of the equity interests in Kinectrics Holdings, Inc., the parent company of Kinectrics Inc.

("Kinectrics") for approximately CAD $ 782.7 million subject to certain working capital and other adjustments.

This resulted in purchase consideration of CAD $ 614.5 million ($ 440.6 million U.S.

dollar equivalent), which is net of assumed pension liabilities, other postretirement benefit obligations and indebtedness.

Kinectrics is a leader in providing lifecycle management services for the global nuclear power, transmission and distribution markets and in the production and supply of isotopes for the radiopharmaceutical industry and employs over 1,300 employees located across 20 sites worldwide.

Kinectrics is reported as part of our Commercial Operations segment.

The fair value assessment of the Kinectrics acquisition is in process as of the filing date of this Form 10-K.

The amounts allocated to the assets acquired and liabilities assumed have been determined by management, using estimates of fair value based on information currently available and on current assumptions of future operations.

These fair values are subject to change upon the completion of purchase accounting, the impact of which may be material.

The estimates of fair value resulted in the recognition of $ 175.0 million of property, plant and equipment, $ 130.1 million of goodwill, $ 151.3 million of intangible assets, $ 39.5 million of investments in unconsolidated affiliates and $ 25.4 million of net working capital, net of acquired pension liabilities and other postretirement benefit obligations totaling $ 90.3 million.

This purchase price allocation reflects a $ 18.2 million reduction to goodwill related to the finalization of tax elections made during the three months ended December 31, 2025.

The intangible assets included above consist of the following (dollar amounts in thousands):

Amount Amortization Period

Trade name $ 35,900 Indefinite

Developed technology $ 7,900 20 years

Customer relationships $ 107,500 20 years

NOTE 3 – REVENUE RECOGNITION

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Our Government Operations segment recognizes revenue over time for the manufacturing of naval nuclear reactor components and fuel, the downblending of high-enriched uranium and the development of advanced nuclear reactors for power and propulsion applications.

Certain of our contracts contain two or more different types of components, each of which we

identify as a separate performance obligation.

Certain of our contracts contain two or more different types of components, each of which we identify as a separate performance obligation.

We recognize revenue using a cost-to-cost method to measure progress as control is continually transferred to the customer as we incur costs on the performance obligations.

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$ 4,318 $ 36,770 $ 24,813

(1) During the year ended December 31, 2025, our Government Operations segment results were favorably impacted by material contract adjustments related to a nuclear operations contract.

The material adjustments resulted in an increase in revenue and operating income of $ 29.4 million during the year ended December 31, 2025.

During the year ended December 31, 2024, no adjustments to any one contract had a material impact on our consolidated financial statements.

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Our Government Operations segment also recognized favorable adjustments totaling $ 27.9 million as a result of the successful negotiation of change orders related to cost growth that was driven by out-of-scope changes associated with the manufacture of non-nuclear components.

During the year ended December 31, 2022, our Government Operations segment results were negatively affected by contract adjustments for cost growth related to the manufacture of non-nuclear components which resulted in a decrease in operating income of $ 11.3 million.

Contract Assets and Liabilities

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We have investments in entities that we account for using the equity method.

Our share of the undistributed earnings of our equity method investees were $ 40.4 million and $ 31.1 million at December 31, 2024 and 2023, respectively.

Our share of the undistributed earnings of our equity method investees was $ 29.1 million and $ 40.4 million at December 31, 2025 and 2024, respectively.

These amounts are included in Investments in Unconsolidated Affiliates on our consolidated balance sheets.

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NOTE 5 – INCOME TAXES

We are subject to federal income tax in the U.S., Canada and the U.K., as well as income tax within multiple U.S.

We are subject to federal income tax in the U.S., Canada, and various other jurisdictions., as well as income tax within multiple U.S.

state jurisdictions.

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These jurisdictions may have regimes of taxation that vary with respect to nominal rates and with respect to the basis on which these rates are applied.

This variation, along with the changes in our mix of income within these jurisdictions,

can contribute to shifts in our effective tax rate from period to period.

As of the date of this filing, we are not currently under audit by any domestic or international tax authority.

This variation, along with the changes in our mix of income within these jurisdictions, can contribute to shifts in our effective tax rate from period to period.

We are currently under audit by various state and international authorities.

We do not have any returns under examination for years prior to 2020.

Certain jurisdictions now implement the Organization for Economic Cooperation and Development's (OECD) Pillar Two rules regarding a global minimum tax.

As of December 31, 2025, these new rules have not impacted our provision for income taxes.

We apply the provisions of FASB Topic Income Taxes regarding the treatment of uncertain tax positions.

A reconciliation of unrecognized tax benefits (exclusive of interest and federal and state benefits) is as follows (amounts in thousands):

A reconciliation of unrecognized tax benefits (exclusive of interest and federal and state benefits) is as follows:

Year Ended December 31,

(In thousands)

Balance at beginning of period (1)

Additions based on tax positions taken in the current year 2,121

Additions based on tax positions taken in prior years 19,027

Changes for tax positions taken in prior years —

Settlements with tax authorities —

Increases based on tax positions taken in the current year 1,920 2,121

Increases based on tax positions taken in prior years — 19,027

Decreases based on tax positions taken in prior years ( 8,005 ) —

Decreases due to settlements with tax authorities — —

Decreases due to lapse of applicable statute of limitation — —

Other, net — —

Balance at end of period $ 15,063 $ 21,148

(1) We did not have any uncertain tax positions or activity during the years ended December 31, 2023 and 2022.

The unrecognized tax benefits balance of $ 15.1 million at December 31, 2025 would reduce our effective tax rate if recognized.

We believe it is unlikely that our unrecognized tax benefits will materially increase or decrease within the next 12 months.

Deferred income taxes reflect the net tax effects of temporary differences between the financial and tax bases of assets and liabilities.

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Investments in joint ventures and affiliated companies 3,065 2,746

Long-term contracts — 13,363

Convertible debt premium 34,275 —

federal tax credits and loss carryforward 3,399 3,071

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Total deferred tax liabilities 199,465 173,809

Net deferred tax assets (liabilities) $ ( 18,952 ) $ 1,718

Net deferred tax liabilities $ ( 12,929 ) $ ( 18,952 )

The components of Income before Provision for Income Taxes were as follows:

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The following is a reconciliation of our income tax provision from the U.S.

statutory federal tax rate to our consolidated effective tax rate:

statutory federal tax rate to our consolidated effective tax rate for the year ended December 31, 2025, updated to reflect the adoption of ASU 2023-09:

Year Ended December 31,

2024 2023 2022

(In thousands)

Income before provision for income taxes $ 398,120

federal statutory tax rate 83,605 21.0 %

State and local income taxes, net of Federal income tax effects (1)

Foreign tax effects

Canada - capital loss realization ( 3,654 ) ( 0.9 ) %

Other ( 943 ) ( 0.2 ) %

Effect of changes in tax laws or rates enacted in the current period — — %

Effect of cross-border tax laws 2,574 0.6 %

research and development tax credit ( 5,761 ) ( 1.4 ) %

Nontaxable or nondeductible items ( 1,051 ) ( 0.3 ) %

Changes in unrecognized tax benefits ( 7,934 ) ( 2.0 ) %

Other adjustments ( 1,138 ) ( 0.3 ) %

Effective tax rate $ 68,259 17.1 %

(1) State taxes in Virginia, Tennessee, Ohio, California and New Mexico made up greater than 50% of the tax effect in this category.

The following is a reconciliation of our income tax provision from the U.S.

statutory federal tax rate to our consolidated effective tax rate as previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09:

Year Ended December 31,

federal statutory tax rate 21.0 % 21.0 %

State and local income taxes 1.3 % 1.2 %

3 unchanged sentences

Effective tax rate 19.0 % 23.4 %

The effective tax rate benefit related to research and development tax credits is presented net of reserves for uncertain tax positions and includes credits corresponding to current year activities, as well as credits corresponding to activities in prior reporting periods.

The amounts of cash taxes paid by the Company are as follows:

Year Ended December 31, 2025

– federal $ 30,359

– state 3,805

Canada 13,618

Income taxes, net of amounts refunded $ 47,892

At December 31, 2025, we had a valuation allowance of $ 14.9 million for deferred tax assets, which we expect cannot be realized through carrybacks, future reversals of existing taxable temporary differences and our estimate of future taxable income.

9 unchanged sentences

Year Ended December 31, 2023 $ ( 13,022 ) $ ( 4,399 ) $ — $ ( 17,421 )

We have domestic federal and foreign capital losses of $ 7.0 million available to offset future capital gains.

The domestic federal capital losses begin to expire in 2025, while the foreign capital losses have an indefinite carryforward period.

We are carrying a full valuation allowance of $ 7.0 million against the deferred tax asset related to these domestic federal and foreign capital loss carryforwards.

In addition, we have state credits and state net operating losses of $ 12.8 million ($ 10.1 million net of federal tax benefit) available to offset future taxable income in various states.

We have federal net operating losses of $ 3.4 million available to offset future taxable income.

The federal net operating losses have an indefinite carryforward period.

We are carrying a full valuation allowance of $ 3.4 million against the deferred tax asset related to these federal net operating loss carryforwards.

We have state credits and state net operating losses of $ 14.6 million ($ 11.5 million net of federal tax benefit) available to offset future taxable income in various states.

These state net operating loss carryforwards begin to expire in 2026.

We are carrying a valuation allowance of $ 12.8 million ($ 10.1 million net of federal tax benefit) against the deferred tax asset related to the state credits and state loss carryforwards.

We are carrying a full valuation allowance of $ 14.6 million ($ 11.5 million net of federal tax benefit) against the deferred tax asset related to the state credits and state loss carryforwards.

We would be subject to withholding taxes if we were to distribute earnings from certain foreign subsidiaries.

As of December 31, 2024, the undistributed earnings of these subsidiaries were approximately $ 323.1 million, and unrecognized deferred income tax liabilities of approximately $ 16.2 million would be payable upon the distribution of these earnings.

All of our foreign earnings are considered indefinitely reinvested.

Determination of the amount of unrecognized deferred taxes related to these undistributed earnings is not practicable.

NOTE 6 – LONG-TERM DEBT

2 unchanged sentences

Debt Instruments:

Convertible Debt $ 1,250,000 $ —

Senior Notes 800,000 800,000

Credit Facility — 262,500

Other Debt 1,967 —

Amounts due within one year — 12,500

6 unchanged sentences

2028 – $ 400.0 million;

2028 – $ 400.0 million and 2029 – $ 400.0 million.

Credit Facility

On October 12, 2022, we entered into an Amended and Restated Credit Agreement (the "Credit Facility") with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto, which amended and restated our then existing secured credit facility (the "Former Credit Facility"), which consisted of a $ 750 million senior secured revolving credit facility.

The Credit Facility consists of a $ 750 million senior secured revolving credit facility (the "Revolving Credit Facility") and a $ 250 million senior secured term A loan (the "Term Loan").

The Revolving Credit Facility and the Term Loan are scheduled to mature on October 12, 2027.

All proceeds from the Term Loan were used to repay outstanding indebtedness under the Former Credit Facility.

The proceeds of loans under the Credit Facility are available for working capital needs, permitted acquisitions and other general corporate purposes.

The Credit Facility allows for additional parties to become lenders and, subject to certain conditions, for the increase of the commitments under the Credit Facility, subject to an aggregate maximum for all additional commitments of (1) the greater of (a) $ 400 million and (b) 100 % of EBITDA, as defined in the Credit Facility, for the last four full fiscal quarters, plus (2) all

voluntary prepayments of the Term Loan, plus (3) additional amounts provided the Company is in compliance with a pro forma first lien leverage ratio test of less than or equal to 2.50 to 1.00.

The Company's obligations under the Credit Facility are guaranteed, subject to certain exceptions, by substantially all of the Company's present and future wholly owned domestic restricted subsidiaries.

The Credit Facility is secured by first-priority liens on certain assets owned by the Company and its subsidiary guarantors (other than its subsidiaries comprising a portion of its Government Operations segment).

The Credit Facility requires interest payments on outstanding loans on a periodic basis until maturity.

We are required to make quarterly amortization payments on the Term Loan in an amount equal to (i) 0.625 % of the initial aggregate principal amount of the Term Loan on the last business day of each quarter beginning the quarter ending March 31, 2023 and ending the quarter ending December 31, 2024 and (ii) 1.25 % of the initial aggregate principal amount of the Term Loan on the last business day of each quarter ending after December 31, 2024, with the balance of the Term Loan due at maturity.

We may prepay all loans under the Credit Facility at any time without premium or penalty (other than customary Term Secured Overnight Financing Rate ("SOFR") breakage costs), subject to notice requirements.

The Credit Facility includes financial covenants that are evaluated on a quarterly basis, based on the rolling four-quarter period that ends on the last day of each fiscal quarter.

2029 – $ 400.0 million and 2030 and thereafter– $ 1.25 billion.

New Credit Facility

On November 10, 2025, we entered into a second Amended and Restated Credit Agreement (the "New Credit Facility") with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto, which amended and restated our then-existing secured credit facility (the "Former Credit Facility"), which consisted of a $ 750 million senior secured revolving credit facility (the "Revolving Credit Facility") and a $ 250 million senior secured term A loan (the "Term Loan").

The Revolving Credit Facility and the Term Loan were repaid, in their entirety, with the proceeds from the 2030 Notes as discussed below.

The New Credit Facility includes a $ 1.25 billion senior secured revolving credit facility.

The proceeds of loans under the New Credit Facility are available for working capital needs, permitted acquisitions and other general corporate purposes.

The New Credit Facility is scheduled to mature on November 10, 2030, subject to an early maturity trigger if on any date the aggregate outstanding principal amount of unsecured indebtedness due within 91 days thereof is in excess of 100 % of EBITDA, as defined in the New Credit Facility, for the last four full fiscal quarters.

However, this early maturity trigger will not apply if (1) the total Net Leverage Ratio is less than or equal to 2.00 to 1.00 or (2) liquidity is at least 125 % of such outstanding unsecured indebtedness.

The Company’s obligations under the New Credit Facility are guaranteed by the same guarantors that guarantee the 2030 Notes.

The New Credit Facility is secured by first-priority liens on certain assets owned by the Company and the guarantors (other than its subsidiaries comprising a portion of its Government Operations segment), provided such liens may be released if the Company obtains investment grade ratings of at least BBB- from S&P or Baa3 from Moody's and no default or event of default exists.

The New Credit Facility allows for additional parties to become lenders and, subject to certain conditions, for the increase of the commitments under the New Credit Facility, subject to an aggregate maximum for all additional commitments of (1) the greater of (a) $ 600 million and (b) 100 % of EBITDA, as defined in the New Credit Facility, for the last four full fiscal quarters, plus (2) additional amounts provided the Company is in compliance with a pro forma first lien leverage ratio test 3.00 to 1.00 or less.

Outstanding loans under the New Credit Facility bear interest at our option at either (i) the Term SOFR rate plus a margin ranging from 1.00 % to 1.75 % per year or (ii) the base rate (the highest of (x) the administrative agent's prime rate, (y) the Federal Funds rate plus 0.50 % and (z) the Term SOFR rate for a one-month tenor plus 1.00 %) plus a margin ranging from 0.0 % to 0.75 % per year.

In addition, the Company will be charged (1) a commitment fee of between 0.15 % and 0.225 % per year on the unused portion of the New Credit Facility, (2) a letter of credit fee of between 1.00 % and 1.75 % per year with respect to the amount of each financial letter of credit issued under the New Credit Facility, and (3) a letter of credit fee of between 0.75 % and 1.05 % per year with respect to the amount of each performance letter of credit or commercial letter of credit issued under the New Credit Facility.

The applicable margin for loans, the commitment fee and the letter of credit fees set forth above will vary quarterly based on the Company's consolidated total net leverage ratio.

The Company may prepay all loans under the New Credit Facility at any time without premium or penalty (other than customary Term SOFR rate breakage costs), subject to notice requirements.

The New Credit Facility contains representations and warranties, affirmative and negative covenants and events of default that the Company considers customary for an agreement of this type, including covenants setting a maximum consolidated total net leverage ratio and a minimum consolidated interest coverage ratio.

If any event of default relating to bankruptcy or other insolvency events occurs with respect to the Company, the lenders’ commitments under the New Credit Facility will automatically terminate and all outstanding obligations under the New Credit Facility will immediately become due and payable.

If any other event of default occurs, the lenders will be permitted to terminate their commitments under the New Credit Facility, accelerate all outstanding obligations under the New Credit Facility and exercise other rights and remedies, including the commencement of foreclosure or other actions against the collateral.

Based on the total net leverage ratio applicable at December 31, 2025, the margin for Term SOFR and base rate loans was 1.50 % and 0.50 %, respectively, the letter of credit fee for financial letters of credit and performance letters of credit was 1.50 % and 0.90 %, respectively, and the commitment fee for the unused portion of the New Credit Facility was 0.20 %.

The New Credit Facility includes financial covenants that are evaluated on a quarterly basis, based on the rolling four-quarter period that ends on the last day of each fiscal quarter.

The maximum permitted leverage ratio is 4.00 to 1.00, which may be increased to 4.50 to 1.00 for up to four consecutive fiscal quarters after a material acquisition.

The minimum consolidated interest coverage ratio is 3.00 to 1.00.

In addition, the Credit Facility contains various restrictive covenants, including with respect to debt, liens, investments, mergers, acquisitions, dividends, equity repurchases and asset sales.

As of December 31, 2024, we were in compliance with all covenants set forth in the Credit Facility.

Outstanding loans under the Credit Facility bear interest at our option at either (1) the Term SOFR plus a credit spread adjustment of 0.10 % plus a margin ranging from 1.0 % to 1.75 % per year or (2) the base rate plus a margin ranging from 0.0 % to 0.75 % per year.

We are charged a commitment fee on the unused portion of the Revolving Credit Facility, and that fee ranges from 0.15 % to 0.225 % per year.

Additionally, we are charged a letter of credit fee of between 1.0 % and 1.75 % per year with respect to the amount of each financial letter of credit issued under the Revolving Credit Facility, and a letter of credit fee of between 0.75 % and 1.05 % per year with respect to the amount of each performance letter of credit issued under the Revolving Credit Facility.

The applicable margin for loans, the commitment fee and the letter of credit fees set forth above will vary quarterly based on our consolidated total net leverage ratio.

Based on the total net leverage ratio applicable at December 31, 2024, the margin for Term SOFR and base rate loans was 1.25 % and 0.25 %, respectively, the letter of credit fee for financial letters of credit and performance letters of credit was 1.25 % and 0.825 %, respectively, and the commitment fee for the unused portion of the Revolving Credit Facility was 0.175 %.

As of December 31, 2024, borrowings under our Term Loan totaled $ 237.5 million, borrowings and letters of credit issued under the Revolving Credit Facility totaled $ 25.0 million and $ 1.4 million, respectively, and we had $ 723.6 million available under the Revolving Credit Facility for borrowings and to meet letter of credit requirements.

As of December 31, 2024, the weighted-average interest rate on outstanding borrowings under our Credit Facility was 5.72 %.

The Credit Facility generally includes customary events of default for a secured credit facility.

Under the Credit Facility, (1) if an event of default relating to bankruptcy or other insolvency events occur with respect to the Company, all related obligations will immediately become due and payable;

In addition, the New Credit Facility contains various restrictive covenants, including with respect to debt, liens, investments, mergers, acquisitions, dividends, equity repurchases and asset sales.

As of December 31, 2025, we were in compliance with all covenants set forth in the New Credit Facility.

As of December 31, 2025, letters of credit issued under the New Credit Facility totaled $ 1.4 million and we had no outstanding borrowings and had $ 1,248.6 million available under the New Credit Facility for borrowings and to meet letter of credit requirements.

The New Credit Facility generally includes customary events of default for a secured credit facility.

Under the New Credit Facility, (1) if an event of default relating to bankruptcy or other insolvency events occur with respect to the Company, all related obligations will immediately become due and payable;

(2) if any other event of default exists, the lenders will be permitted to accelerate the maturity of the related obligations outstanding;

and (3) if any event of default exists, the lenders will be permitted to terminate their commitments thereunder and exercise other rights and remedies, including the commencement of foreclosure or other actions against the collateral.

If any default occurs under the Credit Facility, or if we are unable to make any of the representations and warranties in the Credit Facility, we will be unable to borrow funds or have letters of credit issued under the Credit Facility.

If any default occurs under the New Credit Facility, or if we are unable to make any of the representations and warranties in the New Credit Facility, we will be unable to borrow funds or have letters of credit issued under the New Credit Facility.

Senior Notes due 2028

3 unchanged sentences

Bank"), as trustee.

The Senior Notes due 2028 are guaranteed by each of the Company's present and future direct and indirect wholly owned domestic subsidiaries that is a guarantor under the Credit Facility.

The Senior Notes due 2028 are guaranteed by each of the Company's present and future direct and indirect wholly owned domestic subsidiaries that is a guarantor under the New Credit Facility.

Interest on the Senior Notes due 2028 is payable semi-annually in cash in arrears on June 30 and December 30 of each year at a rate of 4.125 % per annum.

The Senior Notes due 2028 will mature on June 30, 2028.

We may redeem the Senior Notes due 2028, in whole or in part, at any time on or after June 30, 2024 at a redemption price equal to (i) 101.031 % of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on June 30, 2024 and (ii) 100.0 % of the principal amount to be redeemed if the redemption occurs on or after June 30, 2025, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

We may redeem the Senior Notes due 2028, in whole or in part, at any time at a redemption price equal to 100.0 % of the principal amount to be redeemed plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The 2020 Indenture contains customary events of default, including, among other things, payment default, failure to comply with covenants or agreements contained in the 2020 Indenture or the Senior Notes due 2028 and certain provisions related to bankruptcy events.

2 unchanged sentences

Senior Notes due 2029

We issued $ 400 million aggregate principal amount of 4.125 % senior notes due 2029 (the "Senior Notes due 2029") pursuant to an indenture dated April 13, 2021 (the "2021 Indenture"), among the Company, certain of our subsidiaries, as guarantors, and U.S.

guarantors, and U.S.

Bank, as trustee.

2 unchanged sentences

The Senior Notes due 2029 will mature on April 15, 2029.

We may redeem the Senior Notes due 2029, in whole or in part, at any time on or after April 15, 2024 at a redemption price equal to (i) 102.063 % of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on April 15, 2024, (ii) 101.031 % of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on April 15, 2025 and (iii) 100.0 % of the principal amount to be redeemed if the redemption occurs on or after April 15, 2026, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

We may redeem the Senior Notes due 2029, in whole or in part, at any time on or after April 15, 2025 at a redemption price equal to (i) 101.031 % of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on April 15, 2025 and (ii) 100.0 % of the principal amount to be redeemed if the redemption occurs on or after April 15, 2026, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The 2021 Indenture contains customary events of default, including, among other things, payment default, failure to comply with covenants or agreements contained in the 2021 Indenture or the Senior Notes due 2029 and certain provisions related to bankruptcy events.

1 unchanged sentence

As of December 31, 2025, we were in compliance with all covenants set forth in the 2021 Indenture and the Senior Notes due 2029.

2030 Notes and Capped Call Transactions

In November 2025, the Company issued $ 1.25 billion aggregate principal amount of 0 % Convertible Senior Notes due 2030 (the "2030 Notes"), including the exercise in full of the initial purchasers' option to purchase up to an additional $ 150.0 million principal amount of the 2030 Notes.

The 2030 Notes were issued pursuant to an Indenture, dated November 19, 2025 (the "Indenture"), among the Company, certain of our subsidiaries, as guarantors, and U.S.

Bank Trust Company, National Association, as trustee.

The 2030 Notes are guaranteed by each of the Company's present and future direct and indirect wholly owned domestic subsidiaries that guarantee its existing and future capital markets indebtedness.

The conversion rate for the 2030 Notes will initially be 3.8094 shares of common stock per $1,000 principal amount of the 2030 Notes, which is equivalent to an initial conversion price of approximately $ 262.51 per share of common stock.

The conversion rate is subject to adjustment upon certain events.

Upon conversion, the Company will settle conversions by paying cash up to the aggregate principal amount of the 2030 Notes to be converted and paying or delivering, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the 2030 Notes being converted, based on the applicable conversion rate(s).

The 2030 Notes will mature on November 1, 2030, unless earlier converted, redeemed or repurchased.

The 2030 Notes will not bear regular interest, and the principal amount of the 2030 Notes will not accrete.

However, special interest and additional interest, if any, may accrue on the 2030 Notes at a combined rate per annum not exceeding 0.50 % upon the occurrence of certain events as described in the Indenture.

The Company may not redeem the 2030 Notes at its option before November 6, 2028.

The Company will have the option to redeem the 2030 Notes, in whole or in part (subject to the partial redemption limitation described below), at any time, and from time to time, on or after November 6, 2028 and before the 26th Scheduled Trading Day (as defined in the Indenture) immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid special interest and additional interest, if any, to, but excluding, the redemption date, but only if certain conditions are met.

On or after August 1, 2030, until the close of business on the second Scheduled Trading Day (as defined in the Indenture) immediately before the maturity date, the 2030 Notes will be convertible at the option of the noteholders at any time.

Before August 1, 2030, noteholders will have the right to convert their 2030 Notes only under the following circumstances:

(1) during any fiscal quarter commencing after the fiscal quarter ending on March 31, 2026, if the last reported sale price of the Company’s common stock exceeds 130 % of the conversion price for each of at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter;

(2) during the five consecutive business days immediately after any ten consecutive trading day period if the trading price per $1,000 principal amount of 2030 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of common stock on such trading day and the conversion rate on each Trading Day;

(3) upon the occurrence of specified corporate events or distributions on the common stock as set forth in the Indenture;

or (4) if the Company calls the 2030 Notes for redemption.

If the Company undergoes a Fundamental Change (as defined in the Indenture), then, subject to certain exceptions, noteholders may require the Company to repurchase their 2030 Notes in whole or in part for cash at a price equal to the principal amount of the 2030 Notes to be repurchased, plus accrued and unpaid special interest and additional interest, if any, to, but excluding, the Fundamental Change Repurchase Date (as defined in the Indenture).

The definition of Fundamental Change includes, among other things, certain business combination transactions involving the Company and certain de-listing events with respect to the common stock.

Capped Call Transactions

In connection with the pricing of the 2030 Notes and the exercise by the initial purchasers of their option in full to purchase additional 2030 Notes, respectively, the Company paid $ 131.9 million to enter into privately negotiated capped call transactions (the “Capped Call Transactions”) with affiliates of certain of the initial purchasers and certain other financial institutions (the “Option Counterparties”).

The Capped Call Transactions have an expiration date of November 1, 2030 but may be redeemed earlier, subject to certain conditions.

The Capped Call Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2030 Notes, the number of shares of common stock initially underlying the 2030 Notes.

The Capped Call Transactions are expected generally to reduce the potential dilution to the holders of common stock upon any conversion of the 2030 Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted 2030 Notes, as the case may be, with such reduction and or offset subject to a cap.

The cap price of the Capped Call Transactions will initially be $ 396.24 per share of common stock, which represents a premium of 100 % over the last reported sale price of the common stock of $ 198.12 per share on November 5, 2025, and is subject to certain adjustments under the terms of the Capped Call Transactions.

The Capped Call Transactions are separate transactions (in each case entered into by the Company with the Option Counterparties), are not part of the terms of the 2030 Notes and will not change the holders’ rights under the 2030 Notes.

Holders will not have any rights with respect to the Capped Call Transactions.

The Capped Call Transactions qualify for a scope exception from derivative accounting for instruments that are both indexed to the issuer's own stock and classified in stockholders' equity on our consolidated balance sheets.

The 2030 Notes and the Capped Call Transactions have been integrated for tax purposes.

The impact of this tax treatment results in the Capped Call Transactions being deductible with the cost of the Capped Call Transactions qualifying as original issue discount for tax purposes over the term of the 2030 Notes.

Other Arrangements

6 unchanged sentences

Similarly, we have provided letters of credit and bank guarantees to governmental agencies and contractual counterparties to support regulatory and contractual obligations for certain decommissioning responsibilities, projects and legal matters.

We utilize our Revolving Credit Facility and a bilateral letter of credit facility to support such obligations, but the issuance of letters of credit and bank guarantees under our bilateral letter of credit facility is at the issuer's discretion, and our bilateral letter of credit facility generally permits the issuer, in its sole discretion, to demand collateral if the issuer does not otherwise have the benefit of the collateral under our Credit Facility.

Although there can be no assurance that we will maintain our bilateral letter of credit capacity, we believe our current capacity, together with capacity under our Revolving Credit Facility, is adequate to support our existing requirements for the next 12 months.

As of December 31, 2024, letters of credit and bank guarantees issued and outstanding under our bilateral letter of credit facility totaled approximately $ 33.7 million, and such letters of credit and bank guarantees are secured by the collateral under our Credit Facility.

We utilize our New Credit Facility and a bilateral letter of credit facility to support such obligations, but the issuance of letters of credit and bank guarantees under our bilateral letter of credit facility is at the issuer's discretion, and our bilateral letter of credit facility generally permits the issuer, in its sole discretion, to demand collateral if the issuer does not otherwise have the benefit of the collateral under our New Credit Facility.

On May 14, 2025 we amended our bilateral letter of credit facility to increase the maximum aggregate amount to $ 75 million.

Although there can be no assurance that we will maintain our bilateral letter of credit capacity, we believe our current capacity, together with capacity under our New Credit Facility, is adequate to support our existing requirements for the next 12 months.

As of December 31, 2025, letters of credit and bank guarantees issued and outstanding under our bilateral letter of credit facility totaled approximately $ 48.7 million, and such letters of credit and bank guarantees are secured by the collateral under our New Credit Facility.

NOTE 7 – PENSION PLANS AND POSTRETIREMENT BENEFITS

1 unchanged sentence

Certain of our subsidiaries have made other benefits available to certain groups of employees, including postretirement health care and life insurance benefits.

For salaried employees, all major U.S.

As of 2021, for salaried employees, all major U.S.

and Canadian defined benefit retirement plans have been closed to new entrants, and benefit accruals have ceased.

For hourly employees, certain defined benefit retirement plans have been closed to new entrants.

Our funding policy is to fund the plans as recommended by the respective plan actuaries and in accordance with the Employee Retirement Income Security Act of 1974, as amended, or other applicable law.

On May 20, 2025, we completed the acquisition of Kinectrics, inclusive of the Kinectrics Inc.

Pension Plan.

Through the Kinectrics Inc.

Pension Plan, Kinectrics employees are eligible for membership in the plan after completion of three months of continuous service and it is the Company's only defined benefit plan that is open to new participants.

Assuming we continue as a government contractor, our contractual arrangements with the U.S.

15 unchanged sentences

4,642 1,307 — —

Acquisitions 453,635 — 61,915 —

— — ( 4,860 ) —

Actuarial loss (gain)

15 unchanged sentences

32,878 4,611 5,617 1,048

— — ( 4,860 ) —

Acquisitions 421,730 — — —

Foreign currency exchange rate changes

11 unchanged sentences

12,546 10,663 — —

Accrued employee benefits

( 2,822 ) ( 2,787 ) ( 1,935 ) ( 1,312 )

Prepaid (accrued) employee benefits ( 2,960 ) ( 2,822 ) 328 ( 1,935 )

Accumulated postretirement benefit obligation

51 unchanged sentences

The benefit obligation of our pension plans as of December 31, 2025 and 2024 increased (decreased) by $ 13.8 million and $( 49.0 ) million, respectively, due to changes in the discount rate.

In November 2022, we completed the wind-up of our foreign salaried pension benefit plan and settled approximately $ 48.8 million in benefit obligations.

As a result, we recognized pension settlement-related charges of $ 12.6 million during the year ended December 31, 2022.

Additional Information

57 unchanged sentences

Partnerships with Security Holdings 1 % 2 %

Other 4 % 5 %

Cash and Accrued Items 23 % 4 %

Total 100 % 100 %

2 unchanged sentences

Equities 33 %

We sponsor the BWXT Canada Ltd.

Foreign Plans

We sponsor the following foreign defined benefit plans, both of which are in Canada:

• BWXT Canada Ltd.

Bargaining Unit Employees' Pension Plan;

The following is a summary of the asset allocations of this plan at December 31, 2024 and 2023 by asset category:

• Kinectrics Inc.

Pension Plan.

The assets of the foreign plans are maintained in separate trusts.

The following is a summary of the asset allocations of the foreign plans at December 31, 2025 and 2024 by asset category:

Asset Category:

3 unchanged sentences

Total 100 % 100 %

The target allocation for 2025 for the Canadian plan, by asset class, is as follows:

The target allocation for 2026 for the foreign plans, by asset class, is as follows:

Fixed Income 65 %

35 unchanged sentences

Expected employer contributions to trusts of defined benefit plans:

2025 $ 4,170 $ — $ 873 N/A

2026 $ 2,700 $ 288 $ 10,842 $ 2,379

Expected benefit payments:

6 unchanged sentences

Defined Contribution Plans

We also provide benefits under the BWXT Thrift Plan (the "Thrift Plan").

The Thrift Plan generally provides for matching employer contributions of 50 % of the first 6 % of compensation, as defined in the Thrift Plan, contributed by participants, and fully vest and are nonforfeitable after three years of service or upon retirement, death, lay-off or approved disability.

We also provide benefits under the BWXT Retirement Savings Plan (The "Thrift Plan").

The Thrift Plan generally provides for matching employer contributions of 50 % of the first 6 % of compensation, as defined in the Thrift Plan, contributed by participants, and fully vest and are nonforfeitable after three of service or upon retirement, death, lay-off or approved disability.

These matching employer contributions are made in cash and invested at the employees' discretion.

We also provide service-based cash contributions under the Thrift Plan to employees not accruing benefits under our defined benefit plans.

Our Canadian plan also includes a defined contribution component whereby we make cash, service-based contributions.

One of our foreign plans includes a defined contribution component whereby we make cash, service-based contributions.

Amounts charged to expense for employer contributions under our defined contribution plans totaled approximately $ 43.0 million, $ 47.4 million and $ 41.5 million in the years ended December 31, 2025, 2024 and 2023, respectively.

1 unchanged sentence

On April 30, 2021, our Board of Directors authorized us to repurchase an indeterminate number of shares of our common stock at an aggregate market value of up to $ 500 million with no expiration date.

In the year ended December 31, 2024, we repurchased 249,442 shares of our common stock from public market transactions for $ 20.0 million.

In the year ended December 31, 2023, we did no t repurchase any shares of our common stock from public market transactions.

In the year ended December 31, 2025, repurchased 289,473 shares of our common stock from public market transactions for $ 30 million.

In the year ended December 31, 2024, we repurchased 249,442 shares of our common stock from public market transactions for $ 20.0 million.

In the year ended December 31, 2023, we did not repurchase any shares of our common stock from public market transactions.

As of December 31, 2025, we had approximately $ 347.6 million available to us for share repurchase under the $ 500 million authorization described above.

22 unchanged sentences

In June 2012, we established the 2012 Long-Term Incentive Plan of BWXT Technical Services Group, Inc., a cash-settled plan for employees of certain subsidiaries and unconsolidated affiliates as selected by the plan committee.

settled plan provides for a number of forms of stock-based compensation, including stock appreciation rights, restricted stock units and performance units, subject to satisfaction of specific performance goals.

The cash-settled plan provides for a number of forms of stock-based compensation, including stock appreciation rights, restricted stock units and performance units, subject to satisfaction of specific performance goals.

Stock appreciation rights are granted at not less than 100 % of the fair market value closing price of a share of BWXT common stock on the date of grant, become exercisable at such time or times as determined when granted and expire not more than ten years after the date of grant.

18 unchanged sentences

The aggregate intrinsic value included in the table above represents the total pre-tax intrinsic value that would have been received by the option holders had all option holders exercised their options on December 31, 2025.

The intrinsic value is calculated as the total number of option shares multiplied by the difference between the closing price of our common stock on the last trading day of the period and the exercise price of the options.

The intrinsic value is

calculated as the total number of option shares multiplied by the difference between the closing price of our common stock on the last trading day of the period and the exercise price of the options.

This amount changes based on the price of our common stock.

25 unchanged sentences

The actual tax benefits realized related to the performance shares vested during the year ended December 31, 2025 totaled $ 1.5 million.

Cash-Settled Stock Appreciation Rights

As of December 31, 2024, we did not have any cash-settled stock appreciation rights outstanding.

Cash-Settled Restricted Stock Units

As of December 31, 2024, we had 456 nonvested units valued at $ 111.39 per share.

The fair value is based on our closing stock price as of December 31, 2024 and is re-determined at the end of each reporting period for purposes of remeasuring compensation expense associated with these cash-settled awards.

Cash-Settled Performance Units

The actual number of units in which each participant vests is dependent upon achievement of certain return on invested capital and diluted earnings per share targets over a three-year performance period.

The number of units in which participants

can vest ranges from 0 to 200 % of the initial performance units granted, to be determined upon completion of the three-year performance period.

As of December 31, 2024, we had 2,052 nonvested units valued at $ 111.39 per share with an assumed weighted-average vesting of 153 %.

Cash-Settled Awards

As of December 31, 2025, we did not have any cash-settled stock appreciation rights, restricted stock units or performance units outstanding.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

23 unchanged sentences

In addition, compliance with existing environmental regulations necessitated capital expenditures of $ 1.2 million, $ 0.8 million and $ 0.7 million in the years ended December 31, 2025, 2024 and 2023, respectively.

At December 31, 2024 and 2023, we had total environmental accruals (including asset retirement obligations) of $ 103.4 million and $ 101.1 million,

respectively.

At December 31, 2025 and 2024, we had total environmental accruals (including asset retirement obligations) of $ 107.2 million and $ 103.4 million, respectively.

Of our total environmental accruals at December 31, 2025 and 2024, $ 6.9 million and $ 9.2 million, respectively, were included in current liabilities .

25 unchanged sentences

Government represented 28 % and 40 % of net receivables at December 31, 2025 and 2024, respectively.

In the years ended December 31, 2024, 2023 and 2022, revenues from two large utility customers accounted for approximately 14 %, 14 % and 14 % of our total consolidated revenues, respectively.

Accounts receivable due directly from two large utility customers represented 19 % and 21 % of net receivables at December 31, 2024 and 2023, respectively.

In the years ended December 31, 2025, 2024 and 2023, revenues from four large utility customers accounted for approximately 17 %, 14 % and 14 % of our total consolidated revenues, respectively.

Accounts receivable due directly from four large utility customers represented 50 % and 19 % of net receivables at December 31, 2025 and 2024, respectively.

See Note 15 for additional information about our major customers.

7 unchanged sentences

$ 6,945 $ 1,298 $ — $ 8,243

Available-for-sale securities

Corporate bonds

$ 6,945 $ 1,298 $ — $ 8,243

$ 9,178 $ 1,431 $ — $ 10,609

The following is a summary of our investments at December 31, 2024:

31 unchanged sentences

$ 8,243 $ — $ 8,243 $ — $ —

Available-for-sale securities

Corporate bonds

$ 8,243 $ — $ 8,243 $ — $ —

$ 10,609 $ 1,834 $ 8,775 $ — $ —

The following is a summary of our investments measured at fair value at December 31, 2024:

19 unchanged sentences

At December 31, 2025 and 2024, the fair value of our Senior Notes due 2029 was $ 389.3 million and $ 371.9 million, respectively.

At December 31, 2025, the fair value of our 2030 Notes was $ 1.194 billion.

The fair value of our remaining debt instruments approximated their carrying values at December 31, 2025 and 2024.

85 unchanged sentences

Canada 701,723 462,593 442,755

United Kingdom 2,216 1,703 1,640

All Other Countries 13,039 2,216 1,703

$ 1,585,136 $ 1,278,161 $ 1,228,520

5 unchanged sentences

Evaluation of segment performance:

Our CODM is the Company's President and Chief Executive Officer.

Our Chief Operating Decision Maker (the "CODM") is the Company's President and Chief Executive Officer.

Our CODM measures the performance of each segment based on several metrics, including revenue and operating income and uses these results, in part, to evaluate the performance of and to allocate resources to each segment.

22 unchanged sentences

(1) Includes equity in income of investees.

In the quarter ended June 30, 2025, we recognized favorable contract adjustments totaling $ 29.4 million related to a nuclear operations contract.

Year Ended December 31, 2024

17 unchanged sentences

(1) Includes equity in income of investees.

In the quarter ended December 31, 2023, we recognized favorable contract adjustments totaling $ 27.9 million as a result of the successful negotiation of change orders related to cost growth that was driven by out-of-scope changes associated with the manufacture of non-nuclear components.

In the quarter ended September 30, 2023, we recognized $ 22.5 million of favorable contract adjustments related to a nuclear operations contract.

We immediately recognize actuarial gains (losses) for our pension and postretirement benefit plans in earnings as a component of net periodic benefit cost.

26 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 8. Financial Statements and Supplementary Data