BWX TECHNOLOGIES, INC. – 10-Q – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following information should be read in conjunction with the unaudited
condensed consolidated financial statements and the notes thereto included in
Item 1 in Part I of this quarterly report on Form 10-Q ("Report"), as well as
the audited consolidated financial statements and the related notes and Item 7
of our annual report on Form 10-K for the year ended December 31, 2022 (our
"2022 10-K").

In this Report, unless the context otherwise indicates, "we," "us" and "our"
mean BWX Technologies, Inc. ("BWXT" or the "Company") and its consolidated
subsidiaries.

Cautionary Statement Concerning Forward-Looking Statements

From time to time, our management or persons acting on our behalf make
forward-looking statements to inform existing and potential security holders
about our Company. Forward-looking statements include those statements that
express a belief, expectation or intention, as well as those that are not
statements of historical fact, within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Statements and assumptions regarding
expectations and projections of specific projects, our future backlog, revenues,
income and capital spending, strategic investments, acquisitions or
divestitures, return of capital activities or margin improvement initiatives are
examples of forward-looking statements. Forward-looking statements are generally
accompanied by words such as "estimate," "project," "predict," "believe,"
"expect," "anticipate," "plan," "seek," "goal," "could," "intend," "may,"
"should" or other words that convey the uncertainty of future events or
outcomes. In addition, sometimes we will specifically describe a statement as
being a forward-looking statement and refer to this cautionary statement.

We have based our forward-looking statements on information currently available
to us and our current expectations, estimates and projections about our Company,
industries and business environment. We caution that these statements are not
guarantees of future performance and you should not rely unduly on them as they
involve risks, uncertainties and assumptions that we cannot predict. In
addition, we have based many of these forward-looking statements on assumptions
about future events that may prove to be inaccurate. While our management
considers these statements and assumptions to be reasonable, they are inherently
subject to numerous factors, including potentially the risk factors described in
Item 1A of our 2022 10-K, most of which are difficult to predict and many of
which are beyond our control. Accordingly, our actual results may differ
materially from the future performance that we have expressed or forecast in our
forward-looking statements.

We have discussed many of these factors in more detail elsewhere in this Report.
These factors are not necessarily all the factors that could affect us.
Unpredictable or unanticipated factors we have not discussed in this Report or
in our 2022 10-K could also have material adverse effects on actual results of
matters that are the subject of our forward-looking statements. We do not intend
to update or review any forward-looking statement or our description of
important factors, whether as a result of new information, future events or
otherwise, except as required by applicable laws.

General

We operate in two reportable segments: Government Operations and Commercial
Operations. In general, we operate in capital-intensive industries and rely on
large contracts for a substantial amount of our revenues. We are currently
exploring growth strategies across our segments to expand and complement our
existing businesses. We would expect to fund these opportunities with cash
generated from operations or by raising additional capital through debt, equity
or some combination thereof.

Government Operations

The revenues of our Government Operations segment are largely a function of
defense spending by the U.S. Government. Through this segment, we engineer,
design and manufacture precision naval nuclear components, reactors and nuclear
fuel for the U.S. Department of Energy ("DOE")/National Nuclear Safety
Administration's Naval Nuclear Propulsion Program. In addition, we perform
fabrication activities for missile launch tubes for U.S. Navy submarines and
supply proprietary and sole-source valves, manifolds and fittings to global
naval and commercial shipping customers. As a supplier of major nuclear
components for certain U.S. Government programs, this segment is a significant
participant in the defense industry.

This segment also provides various services to the U.S. Government by managing
and operating high-consequence operations at U.S. nuclear weapons sites,
national laboratories and manufacturing complexes. The revenues and equity in
income of investees under these types of contracts are largely a function of
spending of the U.S. Government and the
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performance scores we and our consortium partners earn in managing and operating
these sites. With our specialized capabilities of full life-cycle management of
special materials, facilities and technologies, we believe this segment is
well-positioned to continue participating in the ongoing cleanup, operation and
management of critical government-owned nuclear sites, laboratories and
manufacturing complexes maintained by the DOE, NASA and other federal agencies.

Additionally, this segment also develops technology for a variety of
applications, including advanced nuclear power sources, and offers complete
advanced nuclear fuel and reactor design and engineering, licensing and
manufacturing services for new advanced nuclear reactors.

Commercial Operations

Through this segment, we design and manufacture commercial nuclear steam
generators, heat exchangers, pressure vessels, reactor components, as well as
other auxiliary equipment, including containers for the storage of spent nuclear
fuel and other high-level nuclear waste. This segment is a leading supplier of
nuclear fuel, fuel handling systems, tooling delivery systems, nuclear-grade
materials and precisely machined components, and related services for CANDU
nuclear power plants. This segment also provides a variety of engineering and
in-plant services and is a significant supplier to nuclear power utilities
undergoing major refurbishment and plant life extension projects. Additionally,
this segment is a global manufacturer and supplier of critical medical
radioisotopes and radiopharmaceuticals.

Our Commercial Operations segment's overall activity primarily depends on the
demand and competitiveness of nuclear energy and the demand for critical
radioisotopes and radiopharmaceuticals. A significant portion of our Commercial
Operations segment's operations depends on the timing of maintenance outages,
the cyclical nature of capital expenditures and major refurbishment and life
extension projects, as well as the demand for nuclear fuel and fuel handling
equipment primarily in the Canadian market, which could cause variability in our
financial results.

Acquisition of Dynamic Controls Limited and Citadel Capital Corporation

On April 11, 2022, our subsidiary BWXT Government Group, Inc. acquired all of
the outstanding stock of U.K.-based Dynamic Controls Limited ("Dynamic") and
U.S.-based Citadel Capital Corporation, along with its wholly-owned subsidiary,
Cunico Corporation ("Cunico"). Dynamic and Cunico are suppliers of
highly-engineered, proprietary valves, manifolds and fittings for global naval
nuclear and diesel-electric submarines, surface warfare ships and commercial
shipping vessels. These companies are reported as part of our Government
Operations segment.

For additional information on the acquisition of Dynamic and Cunico, see Note 2
to our condensed consolidated financial statements included in this Report.

Critical Accounting Estimates

For a summary of the critical accounting policies and estimates that we use in
the preparation of our unaudited condensed consolidated financial statements,
see Item 7 of our 2022 10-K. There have been no material changes to our critical
accounting policies and estimates during the three months ended March 31, 2023.

Accounting for Contracts

On certain of our performance obligations, we recognize revenue over time. In
accordance with FASB Topic Revenue from Contracts with Customers, we are
required to estimate the total amount of costs on these performance obligations.
As of March 31, 2023, we have provided for the estimated costs to complete all
of our ongoing contracts. However, it is possible that current estimates could
change due to unforeseen events, which could result in adjustments to overall
contract revenues and costs. A principal risk on fixed-price contracts is that
revenue from the customer is insufficient to cover increases in our costs. It is
possible that current estimates could materially change for various reasons,
including, but not limited to, fluctuations in the cost of labor, forecasted
labor productivity or raw material prices. In some instances, we guarantee
completion dates related to our projects or provide performance guarantees.
Increases in costs on our fixed-price contracts could have a material adverse
impact on our consolidated results of operations, financial condition and cash
flows. Alternatively, reductions in overall contract costs at completion could
materially improve our consolidated results of operations, financial condition
and cash flows.

During the three months ended March 31, 2023 and 2022, we recognized net changes
in estimates related to contracts that recognize revenue over time, which
decreased operating income by approximately $7.8 million and $5.2 million,
respectively.

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Results of Operations - Three Months Ended March 31, 2023 vs. Three Months Ended
March 31, 2022

Selected financial highlights are presented in the table below:

                                            Three Months Ended
                                                March 31,
                                                          2023           2022         $ Change
                                                                    (In thousands)
REVENUES:
Government Operations                                  $ 459,886      $ 431,777      $ 28,109
Commercial Operations                                    108,924         99,950         8,974

Eliminations                                                (450)          (989)          539
                                                       $ 568,360      $ 530,738      $ 37,622
OPERATING INCOME:
Government Operations                                  $  90,560      $  72,231      $ 18,329
Commercial Operations                                      1,513          3,962        (2,449)

                                                       $  92,073      $  76,193      $ 15,880
Unallocated Corporate                                     (4,231)        (4,620)          389
Total Operating Income                                 $  87,842      $  71,573      $ 16,269

Consolidated Results of Operations

Consolidated revenues increased 7.1%, or $37.6 million, to $568.4 million in the
three months ended March 31, 2023 compared to $530.7 million for the
corresponding period of 2022, primarily due to increases in our Government
Operations and Commercial Operations segments of $28.1 million and $9.0 million,
respectively.

Consolidated operating income increased $16.3 million to $87.8 million in the
three months ended March 31, 2023 compared to $71.6 million for the
corresponding period of 2022. Operating income in our Government Operations
segment increased $18.3 million and we also experienced lower Unallocated
Corporate expenses of $0.4 million. These increases were partially offset by
lower operating income in our Commercial Operations segment of $2.4 million when
compared to the prior year.

Government Operations

                                      Three Months Ended
                                          March 31,
                                                    2023           2022         $ Change
                                                              (In thousands)
Revenues                                         $ 459,886      $ 431,777      $ 28,109
Operating Income                                 $  90,560      $  72,231      $ 18,329
% of Revenues                                          19.7%          16.7%


Revenues increased 6.5%, or $28.1 million, to $459.9 million in the three months
ended March 31, 2023 compared to $431.8 million for the corresponding period of
2022. The increase was primarily driven by higher volume in the manufacture of
nuclear components for U.S. Government programs, resulting in an increase in
revenues of $31.3 million when compared to the prior year. Continued growth in
design and engineering work executed by our advanced technologies business,
particularly in the defense market, resulted in additional revenues of $9.7
million. These increases were partially offset by the timing of long-lead
material procurements when compared to the corresponding period in the prior
year.

Operating income increased $18.3 million to $90.6 million in the three months
ended March 31, 2023 compared to $72.2 million for the corresponding period of
2022. The increase was due to the operating income impact of the changes in
revenues noted above which included additional benefits associated with
favorable product line mix. In addition, we also experienced an increase in
operating income of $6.1 million associated with improved performance at several
of the U.S. Government facilities that we manage, inclusive of the Savannah
River Site Integrated Mission Completion Contract that began in February 2022.
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Commercial Operations

                                      Three Months Ended
                                          March 31,
                                                    2023           2022        $ Change
                                                             (In thousands)
Revenues                                         $ 108,924      $ 99,950      $  8,974
Operating Income                                 $   1,513      $  3,962      $ (2,449)
% of Revenues                                           1.4%          4.0%


Revenues increased 9.0%, or $9.0 million, to $108.9 million in the three months
ended March 31, 2023 compared to $100.0 million for the corresponding period of
2022. The increase was primarily related to higher volume in our nuclear
components manufacturing business as well as increases in revenues associated
with nuclear fuel handling and in-plant inspection, maintenance and modification
services.

Operating income decreased $2.4 million to $1.5 million in the three months
ended March 31, 2023 compared to $4.0 million in 2022. The decrease was due to a
shift in our project and product line mix as well as an increase in
restructuring-related costs of $1.2 million.

Unallocated Corporate

Unallocated corporate expenses decreased $0.4 million in the three months ended
March 31, 2023 compared to the corresponding period of 2022, primarily due to a
decrease in legal and consulting costs associated with due diligence activities
when compared to the prior year which was partially offset by an increase in
healthcare costs.

Provision for Income Taxes

                                                              Three Months Ended
                                                                  March 31,
                                                                             2023          2022        $ Change
                                                                                      (In thousands)
Income before Provision for Income Taxes                                  $ 79,674      $ 77,448      $  2,226
Provision for Income Taxes                                                $ 18,681      $ 18,374      $    307
Effective Tax Rate                                                             23.4%         23.7%


We primarily operate in the U.S., Canada and the U.K. and we recognize our U.S.
income tax provision based on the U.S. federal statutory rate of 21%, our
Canadian tax provision based on the Canadian local statutory rate of
approximately 25%, and our U.K. tax provision based on the U.K. local statutory
rate of 25%.

Our effective tax rate for the three months ended March 31, 2023 was 23.4% as
compared to 23.7% for the three months ended March 31, 2022. The effective tax
rates for the three months ended March 31, 2023 and 2022 were higher than the
U.S. corporate income tax rate of 21% primarily due to state income taxes within
the U.S. and the unfavorable rate differential associated with our foreign
earnings.

Backlog

Backlog represents the dollar amount of revenue we expect to recognize in the
future from contracts awarded and in progress. Not all of our expected revenue
from a contract award is recorded in backlog for a variety of reasons, including
that some projects are awarded and completed within the same reporting period.

Our backlog is equal to our remaining performance obligations under contracts
that meet the criteria in FASB Topic Revenue from Contracts with Customers, as
discussed in Note 3 to our condensed consolidated financial statements included
in this Report. It is possible that our methodology for determining backlog may
not be comparable to methods used by other companies.

We are subject to the budgetary and appropriations cycle of the U.S. Government
as it relates to our Government Operations segment. Backlog may not be
indicative of future operating results, and projects in our backlog may be
cancelled, modified or otherwise altered by customers.

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                             March 31,        December 31,
                                2023              2022
                               (In approximate millions)
Government Operations      $      3,109      $       3,515
Commercial Operations               665                629

Total Backlog              $      3,774      $       4,144

We do not include the value of our unconsolidated joint venture contracts in
backlog. These unconsolidated joint ventures are included in our Government
Operations segment.

As of March 31, 2023, our ending backlog was $3,774.4 million, which included
$96.3 million of unfunded backlog related to U.S. Government contracts. We
expect to recognize approximately 65% of the revenue associated with our backlog
by the end of 2024, with the remainder to be recognized thereafter.

Major new awards from the U.S. Government are typically received following
Congressional approval of the budget for the U.S. Government's next fiscal year,
which starts October 1, and may not be awarded to us before the end of the
calendar year. Due to the fact that most contracts awarded by the U.S.
Government are subject to these annual funding approvals, the total values of
the underlying programs are significantly larger.

The value of unexercised options excluded from backlog as of March 31, 2023, was
approximately $200 million, which is expected to be awarded in annual
installments through 2024, subject to annual Congressional appropriations.

Liquidity and Capital Resources

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. 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. 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 net 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 ended 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 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. The maximum permitted total net 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 March 31, 2023, we were in compliance with all covenants set forth
in the Credit Facility.
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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 total net leverage ratio. Based on the
total net leverage ratio applicable at March 31, 2023, 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 March 31, 2023, borrowings under the Term Loan totaled $248.4 million,
borrowings and letters of credit issued under the Revolving Credit Facility
totaled $330.0 million and $2.6 million, respectively, and we had $417.4 million
available under the Revolving Credit Facility for borrowings and to meet letter
of credit requirements. As of March 31, 2023, the weighted-average interest rate
on outstanding borrowings under the Credit Facility was 6.17%.

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 occurs 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.

Senior Notes due 2028

We issued $400 million aggregate principal amount of 4.125% senior notes due
2028 (the "Senior Notes due 2028") pursuant to an indenture dated June 12, 2020
(the "2020 Indenture"), among the Company, certain of our subsidiaries, as
guarantors, and U.S. Bank Trust Company, National Association (formerly known as
U.S. Bank National Association) ("U.S. 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.

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, 2023 at a redemption price equal to (i) 102.063% of the principal
amount to be redeemed if the redemption occurs during the 12-month period
beginning on June 30, 2023, (ii) 101.031% of the principal amount to be redeemed
if the redemption occurs during the 12-month period beginning on June 30, 2024
and (iii) 100.0% of the principal amount to be redeemed if the redemption occurs
on or after June 30, 2025, in each case plus accrued and unpaid interest, if
any, to, but excluding, the redemption date. At any time prior to June 30, 2023,
we may also redeem up to 40.0% of the Senior Notes due 2028 with net cash
proceeds of certain equity offerings at a redemption price equal to 104.125% of
the principal amount to be redeemed, plus accrued and unpaid interest, if any,
to, but excluding, the redemption date. In addition, at any time prior to June
30, 2023, we may redeem the Senior Notes due 2028, in whole or in part, 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 plus
an applicable "make-whole" premium.

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. The 2020 Indenture also contains
customary negative covenants. As of March 31, 2023, we were in compliance with
all covenants set forth in the 2020 Indenture and the Senior Notes due 2028.

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
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guarantors, and U.S. Bank, as trustee. The Senior Notes due 2029 are guaranteed
by each of the Company's present and future direct and indirect wholly owned
domestic subsidiaries that is a guarantor under the Credit Facility.

Interest on the Senior Notes due 2029 is payable semi-annually in cash in
arrears on April 15 and October 15 of each year, at a rate of 4.125% per annum.
The Senior Notes due 2029 will mature on April 15, 2029.

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. At any time
prior to April 15, 2024, we may also redeem up to 40.0% of the Senior Notes due
2029 with net cash proceeds of certain equity offerings at a redemption price
equal to 104.125% of the principal amount to be redeemed, plus accrued and
unpaid interest, if any, to, but excluding, the redemption date. In addition, at
any time prior to April 15, 2024, we may redeem the Senior Notes due 2029, in
whole or in part, at a redemption price equal to 100.0% of the principal amount
to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the
redemption date plus an applicable "make-whole" premium.

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. The 2021 Indenture also contains
customary negative covenants. As of March 31, 2023, we were in compliance with
all covenants set forth in the 2021 Indenture and the Senior Notes due 2029.

Other Arrangements

We have posted surety bonds to support regulatory and contractual obligations
for certain decommissioning responsibilities, projects and legal matters. We
utilize bonding facilities to support such obligations, but the issuance of
bonds under those facilities is typically at the surety's discretion, and the
bonding facilities generally permit the surety, in its sole discretion, to
terminate the facility or demand collateral. Although there can be no assurance
that we will maintain our surety bonding capacity, we believe our current
capacity is adequate to support our existing requirements for the next 12
months. In addition, these bonds generally indemnify the beneficiaries should we
fail to perform our obligations under the applicable agreements. We, and certain
of our subsidiaries, have jointly executed general agreements of indemnity in
favor of surety underwriters relating to surety bonds those underwriters issue.
As of March 31, 2023, bonds issued and outstanding under these arrangements
totaled approximately $113.6 million.

Similarly, we have provided letters of credit to governmental agencies and
contractual counterparties to support regulatory and contractual obligations for
certain decommissioning responsibilities, projects and legal matters. We utilize
our Revolving Credit Facility and a bilateral letter of credit facility to
support such obligations, but the issuance of letters of credit under our
bilateral letter of credit facility is at the issuer's discretion, and our
bilateral letter of credit facility generally permits the issuer, in its sole
discretion, to demand collateral if the issuer does not otherwise have the
benefit of the collateral under our Credit Facility. Although there can be no
assurance that we will maintain our bilateral letter of credit facility
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 March 31, 2023, letters of credit issued and
outstanding under our bilateral letter of credit facility totaled approximately
$34.9 million, and such letters of credit are secured by the collateral under
our Credit Facility.

Long-term Benefit Obligations

As of March 31, 2023, we had underfunded defined benefit pension and
postretirement benefit plans with obligations totaling approximately $78.0
million. These long-term liabilities are expected to require use of our
resources to satisfy future funding obligations. Based largely on statutory
funding requirements, we expect to make contributions of approximately $5.5
million for the remainder of 2023 related to our pension and postretirement
plans. We may also make additional contributions based on a variety of factors
including, but not limited to, tax planning, evaluation of funded status and
risk mitigation strategies.
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Other

Cash, Cash Equivalents, Restricted Cash and Investments

Our domestic and foreign cash and cash equivalents, restricted cash and cash
equivalents and investments as of March 31, 2023 and December 31, 2022 were as
follows:

               March 31,      December 31,
                 2023             2022
                      (In thousands)
Domestic      $  49,480      $      38,455
Foreign          10,282             14,436
Total         $  59,762      $      52,891


Our working capital increased by $99.1 million to $502.9 million at March 31,
2023 from $403.8 million at December 31, 2022, primarily attributable to changes
in contracts in progress and retainages due to the timing of project cash flows
and a decrease in current liabilities associated with the payment of accrued
incentives during the three months ended March 31, 2023.

Our net cash used in operating activities increased by $7.6 million to $13.0
million in the three months ended March 31, 2023, compared to $5.4 million in
the three months ended March 31, 2022. The increase in cash used in operating
activities was primarily attributable to the timing of project cash flows.

Our net cash used in investing activities decreased by $36.1 million to $29.8
million in the three months ended March 31, 2023, compared to $65.9 million in
the three months ended March 31, 2022. The decrease in cash used in investing
activities was primarily attributable to a decrease in purchases of property,
plant and equipment of $22.6 million as well as a $13.6 million decrease in
investments in equity method investees.

Our net cash provided by financing activities decreased by $11.2 million to
$49.3 million in the three months ended March 31, 2023, compared to $60.6
million in the three months ended March 31, 2022. The decrease in cash provided
by financing activities was primarily attributable to a reduction in net
borrowings of long-term debt which was partially offset by a reduction in
repurchases of common stock when compared to the corresponding period of the
prior year.

At March 31, 2023, we had restricted cash and cash equivalents totaling $5.5
million, $2.5 million of which was held for future decommissioning of facilities
(which is included in other assets on our condensed consolidated balance sheets)
and $3.0 million of which was held to meet reinsurance reserve requirements of
our captive insurer.

At March 31, 2023, we had short-term and long-term investments with a fair value
of $12.2 million. Our investment portfolio consists primarily of U.S. Government
and agency securities, corporate bonds and mutual funds. Our debt securities are
carried at fair value and are either classified as trading, with unrealized
gains and losses reported in earnings, or as available-for-sale, with unrealized
gains and losses, net of tax, being reported as a component of other
comprehensive income. Our equity securities are carried at fair value with the
unrealized gains and losses reported in earnings.

Cash Requirements

In April 2023, one of our joint ventures was awarded a DOE contract which we
expect to transition in 2023. Over the next 12 months, we anticipate significant
initial capital contributions related to this joint venture. Apart from this
item, our cash requirements have not changed materially from those disclosed in
Item 7 of our 2022 10-K. Furthermore, we believe we have sufficient cash and
cash equivalents and borrowing capacity, along with cash generated from
operations and continued access to capital markets, to satisfy our cash
requirements for the next 12 months and beyond.