Government Operations Margin Outlook
Q: Can Government Operations margins stay around 20% given the new Navy pricing agreement?
A: Management is hopeful that Government Operations EBITDA margins can remain in the high teens to 20% range, aiming to drive margins from a low to mid-teens starting point through operational excellence and material cost advantages. They are addressing mix challenges and ramping immature programs like microreactors and special materials, with an eye on holding underlying margins steady.

Carrier Lull Extension
Q: Is the Carrier lull potentially extending into 2026, and what's the background?
A: The potential extension of the Carrier lull into 2026 is due to the Navy's shipbuilding plan delaying procurement of the next carrier. Depending on advanced procurement, this could add an extra year to the lull. Management is hopeful to avoid supply chain disruptions but has been signaling this possibility for a few quarters.

Q4 EPS Sequential Decline
Q: Why is EPS expected to decline from Q3 to Q4 despite typical seasonality?
A: The company pulled forward some positive impacts typically seen in Q4 into earlier quarters, derisking Q4 numbers. Additionally, there is a sequential headwind from a three-week downtime in Tennessee and higher corporate expenditures in Q4 due to health care costs, leading to a sequential decline in EPS from Q3 to Q4.

Medical Segment Growth
Q: Will BWXT Medical continue its 25% growth next year excluding technetium-99?
A: Yes, the strong growth in the Medical segment is expected to continue without relying on technetium-99. The robust portfolio, including PET products and TheraSphere, is driving growth, and management does not bank on technetium-99 to achieve similar growth as in 2024.

EBITDA Margins and Mix Impact
Q: What's causing flat EBITDA margins despite expectations for expansion?
A: The flat EBITDA margins are due to lower-margin contracts in microreactor programs like Project Pele and DRACO, which, while providing solid revenue and a technological lead, come with lower margins. Additionally, immature programs, special materials contracts, and lower volumes in the Naval segment due to the carrier lull are impacting margins. The company is maintaining margins by managing mix and operational efficiency.

Microreactor Program Funding
Q: Does Project Pele funding extend beyond 2025, and will it exceed $300 million?
A: Yes, the Project Pele contract, initially valued at $300 million, will not end in 2025. The customer has expanded the scope, adding features and spending, especially as the program moves to Idaho. Management anticipates the program could exceed $300 million and continue beyond 2025.

SMR Market Opportunity
Q: How much of the $300 billion SMR market by 2040 could BWXT capture?
A: It's challenging to estimate, but for the GE BWRX-300, BWXT expects about $100 million of content per unit. With additional contracts like TerraPower's Natrium reactor, BWXT could capture tens of millions per unit. As a merchant supplier, BWXT's potential revenue depends on the number of units deployed, with possibilities to expand scope through partnerships.

Enrichment Sole Supplier Potential
Q: Could BWXT become the sole supplier in the national security enrichment market?
A: Yes, since BWXT was the sole awardee of the recent contract for enrichment capabilities, it's possible they could be the sole supplier for both centrifuges and enrichment. However, this depends on the government's long-term decisions.

Commercial Nuclear Growth Drivers
Q: What's driving the expected double-digit growth in commercial nuclear in 2025?
A: Growth is driven by projects across the nuclear value chain:

• Large reactors: Refurbishments at Pickering and overall growth in the Canadian fleet.
• Medium reactors: The Darlington project involving the BWRX-300 SMR will see a full year of activity in 2025.
• Small reactors: Microreactor work is expected to develop over the medium term, leveraging insights from Pele and DRACO programs.

Supply Chain Impacts from Shipyard Issues
Q: Are supply chain issues at shipyards affecting BWXT?
A: BWXT is not experiencing significant supply chain pressures. Their build schedule is two years ahead of shipyards, providing early visibility into potential issues. They have managed through challenges like COVID-19 successfully and feel well-positioned to deliver to their customers.

2025 CapEx and Cash Flow Guidance
Q: What's the outlook for 2025 CapEx and free cash flow?
A: While precise CapEx figures will be provided next quarter, factors such as the Cambridge expansion and investments in BWRX-300 demand could result in CapEx levels similar to this year or slightly higher. Management remains committed to delivering on free cash flow guidance for 2025.

Enrichment Opportunities and Bidding Intentions
Q: Did BWXT bid on recent DOE contracts for uranium enrichment?
A: No, BWXT did not submit proposals for DOE's commercial enrichment contracts, as these are aimed at developing commercial capabilities where other companies are better suited. BWXT focuses on niches like deconversion and does not intend to enter large-scale commercial fuel enrichment.

International Decommissioning Opportunities
Q: Is BWXT exploring international decommissioning projects like in Lithuania?
A: BWXT prefers to avoid the risks associated with fixed-price, large-scale international decommissioning projects. They focus on DOE decommissioning and environmental remediation work, which is cost-reimbursable and within their expertise. However, international opportunities exist in commercial nuclear power development, particularly with the CANDU technology in countries like Romania, Argentina, and South Korea.

Competitive Advantages in Nuclear Industry
Q: What are BWXT's main competitive advantages beyond experience?
A: BWXT's competitive advantages include:

• Market leadership in advanced nuclear fuels, such as coated fuels for space applications and TRISO fuel with commercial potential.
• Being the only North American company capable of manufacturing large pressure vessels, used in reactors like the GE SMR.
• Decades of uninterrupted experience, including delivering up to 415 reactors to the nuclear Navy.
• Deep expertise and continuous operation in nuclear projects, unmatched by competitors.

Timeline for Growth in Key Areas
Q: When will growth in isotopes, microreactors, and SMRs significantly impact the P&L?
A: Growth is occurring in three horizons:

• Near-term: Immediate growth from nuclear medicine and SMRs like the GE product and TerraPower's Natrium reactor.
• Mid-term: Increased contributions from microreactors as they move into production and commercial opportunities; growth from the AUKUS partnership over the next few years.
• Long-term: Opportunities in enrichment for national security and potential large-scale nuclear reactors for grid applications to meet emerging power demands.

Government Segment Growth Drivers
Q: What drove strong growth in the Government segment this quarter?
A: The Government segment's strong growth, the highest all year, was due to good execution across the board, particularly in Advanced Technologies with projects like Project Pele and DRACO ramping up. Naval sites are effectively utilizing increased labor, contributing to both margin and top-line growth.