Caution Regarding Forward-Looking Statements
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, 2021(our "2021 10-K").
In this report, unless the context indicates otherwise, “we”, “us” and “our”
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, margin improvement initiatives or impacts of the novel strain of coronavirus ("COVID-19") pandemic 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. For example, the extent to which the COVID-19 pandemic will continue to impact our business will depend on future developments that are highly uncertain and cannot be predicted, including the length and severity of the COVID-19 health crisis, the potential recurrence of COVID-19, subsequent waves or strains or the development of similar diseases, the actions to contain the impact of such diseases and potential responses to such actions by our suppliers, contractors and employees. 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 2021 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, including under the heading "COVID-19 Assessment" of this Item 2 and Item 1A of our 2021 10-K. 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 2021 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.
We operate in two business segments: Government Operations and Commercial
Operations. Our featured segments reflect the changes we made during the first
quarter of 2022 to better align our businesses by their government and
commercial nature, which reflects how our operating segment
the information is communicated for the purpose of evaluating operational performance and
resource allocation Prior to 2022, we reported on three segments:
Our Government Operations segment consists of our legacy
Nuclear Operations Groupand Nuclear Services Groupsegments with certain research and development activities in the areas of advanced reactors and advanced manufacturing. Our Commercial Operations segment consists of our legacy Nuclear Power Groupsegment with certain research and development and commercialization activities in the areas of medical and industrial radioisotopes. Both segments now include research and development and certain commercialization activities associated with new technologies previously reported centrally, outside of our reportable segments. The change in our reportable segments had no impact on our previously reported consolidated results 17
of operations, financial condition or cash flows. We have applied the change in reportable segments to previously reported historical financial information and related disclosures included in this Report. 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.
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'sNaval Nuclear Propulsion Program. In addition, we perform fabrication activities for missile launch tubes for U.S. Navysubmarines. As a supplier of major nuclear components for certain U.S. Governmentprograms, this segment is a significant participant in the defense industry. This segment also provides various services to the U.S. Governmentby 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. Governmentand the performance scores we and our consortium partners earn in managing and operating these sites. With our specialized capabilities of full life-cycle management of special materials, facilities and technologies, we believe this segment is well-positioned to continue to participate in the continuing cleanup, operation and management of critical government-owned nuclear sites, laboratories and manufacturing complexes maintained by the DOE, NASA and other federal agencies.
In addition, this segment also develops technology for a variety of
applications, including advanced nuclear power sources, and offers
advanced nuclear fuel and reactor design and engineering, licensing and
manufacturing services for new advanced nuclear reactors.
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 leading 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 radioisotopes and radiopharmaceuticals for research, diagnostic and therapeutic uses. 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.
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 will be reported as part of our Government Operations segment.
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 2021 10-K. There have been no material changes to our critical accounting policies and estimates during the three months ended
March 31, 2022. 18
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, 2022, 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 forecasted labor productivity or steel and other 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, 2022and 2021, we recognized net changes in estimates related to contracts that recognize revenue over time, which increased (decreased) operating income by approximately $(5.2) millionand $6.5 million, respectively.
We continue to monitor the COVID-19 pandemic and its impacts and potential impacts on our business. We continue to operate our facilities and have taken numerous precautions to mitigate exposure and protect the health and well-being of our workforce, including arranging for the vaccination of our workforce, where possible. To date, we have experienced localized operational challenges as a result of employee illness, quarantines and social distancing protocols, but the severity of these impacts has subsided significantly. Because developments related to the spread of COVID-19 and its impacts continue to change, it is difficult to predict any future impact at this time. Additionally, COVID-19 may also adversely impact our supply chain and other manufacturers, which could delay our receipt of essential goods and services. Any number of these potential risks could have a material adverse effect on our financial condition, results of operations and cash flows. Government Assistance On
March 27, 2020, the U.S. Governmentenacted the Coronavirus Aid, Relief and Economic Security Act, which, among other things, provides employers an option to defer payroll tax payments for a limited period. As of March 31, 2022, we have deferred $10.7 millionof payroll taxes which are due by January 2023. Additionally, on April 11, 2020, the Canadian Government enacted the CanadaEmergency Wage Subsidy ("CEWS") under the COVID-19 Economic Response Plan to prevent large layoffs and help employers offset a portion of their employee salaries and wages for a limited period. During the three months ended March 31, 2022and 2021, we recognized subsidies under the CEWS as offsets to operating expenses of $0.6 millionand $0.9 million, respectively. The Canadian Government has extended the CEWS to May 2022with a number of modifications. 19
Results of operations – Quarters ended
Some financial highlights are presented in the table below:
Three Months Ended March 31, 2022 2021 $ Change (In thousands) REVENUES: Government Operations
$ 431,777 $ 423,275 $ 8,502Commercial Operations 99,950 107,398 (7,448) Eliminations (989) (2,400) 1,411 $ 530,738 $ 528,273 $ 2,465OPERATING INCOME: Government Operations $ 72,231 $ 78,245 $ (6,014)Commercial Operations 3,962 6,294 (2,332) $ 76,193 $ 84,539 $ (8,346)Unallocated Corporate (4,620) (2,125) (2,495) Total Operating Income $ 71,573 $ 82,414 $ (10,841)
Consolidated operating results
Consolidated revenues increased 0.5%, or
$2.5 million, to $530.7 millionin the three months ended March 31, 2022compared to $528.3 millionfor the corresponding period of 2021, due to an increase in our Government Operations segment of $8.5 million, which was partially offset by a decrease in revenues in our Commercial Operations segment of $7.4 million. Consolidated operating income decreased $10.8 millionto $71.6 millionin the three months ended March 31, 2022compared to $82.4 millionfor the corresponding period of 2021. Operating income in our Government Operations and Commercial Operations segments decreased by $6.0 millionand $2.3 million, respectively. We also experienced higher Unallocated Corporate expenses of $2.5 millionwhen compared to the prior year. Government Operations Three Months Ended March 31, 2022 2021 $ Change (In thousands) Revenues $ 431,777 $ 423,275 $ 8,502Operating Income $ 72,231 $ 78,245 $ (6,014)% of Revenues 16.7% 18.5% Revenues increased 2.0%, or $8.5 million, to $431.8 millionin the three months ended March 31, 2022compared to $423.3 millionfor the corresponding period of 2021. The increase was primarily related to the timing of the procurement of certain long-lead materials when compared to the corresponding period in the prior year. We also experienced an increase in revenues of $5.2 millionrelated to continued growth in design and engineering work executed by our advanced technologies business, particularly in the defense and space markets, and an increase in revenues of $3.2 millionassociated with transition activities at the Savannah River Site, the contract for which was awarded in 2021. These increases were offset by a reduction in volume related to missile tubes totaling $8.2 million. Operating income decreased $6.0 millionto $72.2 millionin the three months ended March 31, 2022compared to $78.2 millionfor the corresponding period of 2021. The decrease was primarily related to lower levels of favorable contract adjustments due to lower productivity recorded in the current year when compared to the prior year, which were partially offset by the operating income impact of the changes in revenue noted above. 20
Table of Contents Commercial Operations Three Months Ended March 31, 2022 2021 $ Change (In thousands) Revenues
$ 99,950 $ 107,398 $ (7,448)Operating Income $ 3,962 $ 6,294 $ (2,332)% of Revenues 4.0% 5.9% Revenues decreased 6.9%, or $7.4 million, to $100.0 millionin the three months ended March 31, 2022compared to $107.4 millionfor the corresponding period of 2021. The decrease was primarily related to lower levels of in-plant inspection, maintenance and modification services totaling $8.4 million, primarily associated with a large outage project that was completed in the prior year. We also experienced a decrease in revenues related to our parts manufacturing business. These decreases were partially offset by increases in revenues related to our nuclear fuel handling capabilities and higher levels of revenue in our medical radioisotopes business when compared to the prior year. Operating income decreased $2.3 millionto $4.0 millionin the three months ended March 31, 2022compared to $6.3 millionfor the corresponding period of 2021, due to the operating income impact of the changes in revenues noted above in addition to restructuring related costs, which totaled $1.9 million.
Unallocated corporate expenses increased
$2.5 millionin the three months ended March 31, 2022compared to the corresponding period of 2021, primarily due to legal and consulting costs associated with due diligence activities in addition to restructuring related costs, which combined to total an increase of $2.1 million. Provision for Income Taxes Three Months Ended March 31, 2022 2021 $ Change (In thousands) Income before Provision for Income Taxes $ 77,448 $ 91,893 $ (14,445)Provision for Income Taxes $ 18,374 $ 22,078 $ (3,704)Effective Tax Rate 23.7% 24.0% We primarily operate in the U.S.and Canada, and we recognize our U.S.income tax provision based on the U.S.federal statutory rate of 21% and our Canadian tax provision based on the Canadian local statutory rate of approximately 25%. Our effective tax rate for the three months ended March 31, 2022was 23.7% as compared to 24.0% for the three months ended March 31, 2021. The effective tax rates for the three months ended March 31, 2022and 2021 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 Canadian earnings.
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 budget and supply cycle of the
with respect to our Government Operations sector. The backlog may not be
indicative of future operating results, and plans in our backlog may be
canceled, modified or otherwise altered by customers.
Table of Contents March 31, December 31, 2022 2021 (In approximate millions) Government Operations
$ 4,158 $ 4,532Commercial Operations 748 644 Total Backlog $ 4,906 $ 5,176
We do not include the value of our unconsolidated joint venture contracts in
back. These unconsolidated joint ventures are included in our government
March 31, 2022, our ending backlog was $4,906.4 million, $97.4 millionof which had not yet been funded. We expect to recognize approximately 54% of the revenue associated with our backlog by the end of 2023, with the remainder to be recognized thereafter. Major new awards from the U.S. Governmentare typically received following Congressional approval of the budget for the U.S. Government'snext 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. Governmentare subject to these annual funding approvals, the total values of the underlying programs are significantly larger.
The value of unexercised options excluded from the backlog as of
installments through 2024, subject to annual Congressional appropriations.
Cash and capital resources
March 24, 2020, we entered into an Amendment No. 1 to Credit Agreement, which amended the Credit Agreement dated as of May 24, 2018(as amended, the "Credit Facility") with Wells Fargo Bank, N.A., as administrative agent, and the other lenders party thereto. The Credit Facility provides for a $750 millionsenior secured revolving credit facility (the "Revolving Credit Facility"). All obligations under the Revolving Credit Facility are scheduled to mature on March 24, 2025. The proceeds of loans under the Revolving 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) $250 millionand (b) 65% of EBITDA, as defined in the Credit Facility, for the last four full fiscal quarters, plus (2) all voluntary prepayments of the term loans, 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 the majority of its subsidiaries comprising its Government Operations segment). The Revolving Credit Facility requires interest payments on revolving loans on a periodic basis until maturity. We may prepay all loans under the Credit Facility at any time without premium or penalty (other than customary Eurocurrency breakage costs), subject to notice requirements. The Credit Facility includes financial covenants that are tested 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 March 31, 2022, we were in compliance with all covenants set forth in the Credit Facility. Outstanding loans under the Revolving Credit Facility bear interest at our option at either (1) the Eurocurrency rate 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 22
each financial letter of credit issued under the 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 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 leverage ratio. Based on the leverage ratio applicable at
March 31, 2022, the margin for Eurocurrency rate and base rate revolving 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 Revolving Credit Facility was 0.20%. As of March 31, 2022, borrowings and letters of credit issued under the Revolving Credit Facility totaled $510.0 millionand $35.9 million, respectively. As a result, as of March 31, 2022we had $204.1 millionavailable under the Revolving Credit Facility for borrowings and to meet letter of credit requirements. As of March 31, 2022, the interest rate on outstanding borrowings under our Credit Facility was 1.89%. 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
$400 millionaggregate 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 maturing in 2028 is payable semi-annually in cash in
Senior Notes maturing in 2028 will mature on
We may redeem the Senior Notes due 2028, in whole or in part, at any time on or after
June 30, 2023at a redemption price equal to (i) 102.063% of the principal amount to be redeemed if the redemption occurs during the twelve-month period beginning on June 30, 2023, (ii) 101.031% of the principal amount to be redeemed if the redemption occurs during the twelve-month period beginning on June 30, 2024and (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 of the Senior Notes due 2028 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 of the Senior Notes due 2028 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, 2022, we were in compliance with all covenants set forth in the 2020 Indenture and the Senior Notes due 2028.
Senior Notes Due 2029
$400 millionaggregate 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. 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 maturing in 2029 is payable semi-annually in cash in
Senior Notes maturing in 2029 will mature on
We may redeem the Senior Notes due 2029, in whole or in part, at any time on or after
April 15, 2024at a redemption price equal to (i) 102.063% of the principal amount to be redeemed if the redemption occurs during the twelve-month period beginning on April 15, 2024, (ii) 101.031% of the principal amount to be redeemed if the redemption occurs during the twelve-month period beginning on April 15, 2025and (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 of the Senior Notes due 2029 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 of the Senior Notes due 2029 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, 2022, we were in compliance with all covenants set forth in the 2021 Indenture and the Senior Notes due 2029.
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 twelve 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, 2022, bonds issued and outstanding under these arrangements totaled approximately $109.9 million.
Long-term benefit obligations
March 31, 2022, we had underfunded defined benefit pension and postretirement benefit plans with obligations totaling approximately $81.2 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 $11.9 millionfor the remainder of 2022 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. 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, 2022and December 31, 2021were as follows: March 31, December 31, 2022 2021 (In thousands) Domestic $ 34,120 $ 39,128Foreign 7,981 14,016 Total $ 42,101 $ 53,144Our working capital increased by $69.6 millionto $383.8 millionat March 31, 2022from $314.1 millionat December 31, 2021, primarily attributable to the timing of project cash flows and vendor payments. Our net cash used in operating activities increased by $103.8 millionto $5.4 millionin the three months ended March 31, 2022, compared to cash provided by operating activities of $98.4 millionin the three months ended March 31, 2021. The increase in cash used in operating activities was primarily attributable to an $88.7 millioncustomer payment delayed until the first quarter of 2021, which was originally expected in 2020. 24
Our net cash used in investing activities decreased by
$36.1 millionto $65.9 millionin the three months ended March 31, 2022, compared to $102.0 millionin the three months ended March 31, 2021. The decrease in cash used in investing activities was primarily attributable to a decrease in purchases of property, plant and equipment of $49.5 million, partially offset by a $13.6 millionincrease in investments in equity method investees in the three months ended March 31, 2022. Our net cash provided by financing activities increased by $41.3 millionto $60.6 millionin the three months ended March 31, 2022, compared to $19.3 millionin the three months ended March 31, 2021. The increase in cash provided by financing activities was primarily attributable to the repayment of bank overdrafts of $88.7 millionin the three months ended March 31, 2021. This was partially offset by a decrease in net borrowings of long-term debt of $45.0 millionin the three months ended March 31, 2022compared to the prior period. At March 31, 2022, we had restricted cash and cash equivalents totaling $5.7 million, $2.8 millionof which was held for future decommissioning of facilities (which is included in other assets on our condensed consolidated balance sheets) and $2.9 millionof which was held to meet reinsurance reserve requirements of our captive insurer. At March 31, 2022, we had short-term and long-term investments with a fair value of $12.8 million. Our investment portfolio consists primarily of U.S. Governmentand 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.
Our cash requirements have not changed materially from those disclosed in Item 7 of our 2021 10-K. We believe we have sufficient cash and cash equivalents and borrowing capacity, along with cash generated from operations and continued access to debt markets, to satisfy our cash requirements for the next 12 months and beyond.