# NWPX Infrastructure, Inc. (NWPX) Informational only - not investment advice. CIK: 0001001385 SIC: 3317 Steel Pipe & Tubes SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 33](/major-group/33/) > [SIC 3317 Steel Pipe & Tubes](/industry/3317/) Latest 10-K filed: 2026-02-26 SEC page: https://www.sec.gov/edgar/browse/?CIK=1001385 Filing source: https://www.sec.gov/Archives/edgar/data/1001385/000143774926005861/nwpx20251231_10k.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 526003000 | USD | 2025 | 2026-02-26 | | Net income | 35411000 | USD | 2025 | 2026-02-26 | | Assets | 579630000 | USD | 2025 | 2026-02-26 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001001385.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 149,387,000 | 132,780,000 | 172,149,000 | 279,317,000 | 285,907,000 | 333,313,000 | 457,665,000 | 444,355,000 | 492,548,000 | 526,003,000 | | Net income | -9,263,000 | -10,163,000 | 20,312,000 | 27,902,000 | 19,050,000 | 11,523,000 | 31,149,000 | 21,072,000 | 34,206,000 | 35,411,000 | | Operating income | -9,987,000 | -9,209,000 | -2,971,000 | 28,689,000 | 25,565,000 | 16,032,000 | 44,821,000 | 33,858,000 | 48,244,000 | 50,870,000 | | Gross profit | 64,000 | 5,815,000 | 12,096,000 | 47,184,000 | 50,519,000 | 44,254,000 | 85,855,000 | 77,642,000 | 95,405,000 | 103,637,000 | | Diluted EPS | -0.97 | -1.06 | 2.09 | 2.85 | 1.93 | 1.16 | 3.11 | 2.09 | 3.40 | 3.56 | | Operating cash flow | 1,519,000 | -7,520,000 | -18,400,000 | 42,886,000 | 56,087,000 | -5,811,000 | 17,540,000 | 53,455,000 | 55,051,000 | 67,283,000 | | Capital expenditures | 2,292,000 | 2,851,000 | 3,797,000 | 8,585,000 | 14,013,000 | 13,262,000 | 22,829,000 | 18,291,000 | 20,799,000 | 20,177,000 | | Share buybacks | | | | | | 0.00 | 0.00 | 707,000 | 4,429,000 | 18,351,000 | | Assets | 241,555,000 | 230,324,000 | 271,350,000 | 310,245,000 | 373,015,000 | 547,679,000 | 601,340,000 | 597,881,000 | 589,653,000 | 579,630,000 | | Liabilities | 32,342,000 | 30,060,000 | 52,760,000 | 62,087,000 | 103,389,000 | 264,296,000 | 283,066,000 | 257,521,000 | 215,650,000 | 184,847,000 | | Stockholders' equity | 209,213,000 | 200,264,000 | 218,590,000 | 248,158,000 | 269,626,000 | 283,383,000 | 318,274,000 | 340,360,000 | 374,003,000 | 394,783,000 | | Cash and cash equivalents | 21,829,000 | 43,646,000 | 6,677,000 | 31,014,000 | 37,927,000 | 2,997,000 | 3,681,000 | 4,068,000 | 5,007,000 | 2,273,000 | | Free cash flow | -773,000 | -10,371,000 | -22,197,000 | 34,301,000 | 42,074,000 | -19,073,000 | -5,289,000 | 35,164,000 | 34,252,000 | 47,106,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | -6.20% | -7.65% | 11.80% | 9.99% | 6.66% | 3.46% | 6.81% | 4.74% | 6.94% | 6.73% | | Operating margin | -6.69% | -6.94% | -1.73% | 10.27% | 8.94% | 4.81% | 9.79% | 7.62% | 9.79% | 9.67% | | Return on equity | -4.43% | -5.07% | 9.29% | 11.24% | 7.07% | 4.07% | 9.79% | 6.19% | 9.15% | 8.97% | | Return on assets | -3.83% | -4.41% | 7.49% | 8.99% | 5.11% | 2.10% | 5.18% | 3.52% | 5.80% | 6.11% | | Liabilities / equity | 0.15 | 0.15 | 0.24 | 0.25 | 0.38 | 0.93 | 0.89 | 0.76 | 0.58 | 0.47 | | Current ratio | 8.01 | 8.28 | 5.07 | 4.69 | 4.18 | 3.56 | 3.07 | 2.83 | 3.49 | 3.78 | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001001385.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 0.97 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 0.99 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 0.23 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 116,372,000 | 7,448,000 | 0.74 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 118,722,000 | 5,818,000 | 0.58 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 110,164,000 | 5,444,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 113,215,000 | 5,238,000 | 0.52 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 129,505,000 | 8,619,000 | 0.86 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 130,201,000 | 10,253,000 | 1.02 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 119,627,000 | 10,096,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 116,115,000 | 3,964,000 | 0.39 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 133,182,000 | 9,063,000 | 0.91 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 151,067,000 | 13,505,000 | 1.38 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 125,639,000 | 8,879,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 138,254,000 | 10,534,000 | 1.08 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1001385/000143774926014185/nwpx20260331_10q.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-04-30 Report date: 2026-03-31 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report on Form 10‑Q for the quarter ended March 31, 2026 (“2026 Q1 Form 10‑Q”) contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), that are based on current expectations, estimates, and projections about our business, management’s beliefs, and assumptions made by management. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “forecasts,” “should,” “could,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements as a result of a variety of important factors. While it is impossible to identify all such factors, those that could cause actual results to differ materially from those estimated by us include: • changes in demand and market prices for our products; • product mix; • bidding activity and order modifications or cancelations; • timing of customer orders and deliveries; • production schedules; • price and availability of raw materials and other costs central to producing and shipping our products; • excess or shortage of production capacity; • product quality failures that result in decreased sales and operating margin, product returns, product liability, warranty, or other claims; • international trade policy and regulations; • changes in trade policy (in particular Canada and Mexico) and duties imposed on imports and exports and the related impacts on us; • economic uncertainty and associated trends in macroeconomic conditions, including potential recession, inflation, and the state of the housing and commercial construction markets; • interest rate risk and changes in market interest rates, including the impact on our customers and related demand for our products; • our ability to identify and complete internal initiatives and/or acquisitions in order to grow our business; • our ability to effectively integrate recent and other future acquisitions into our business and operations that produce accretive financial results; • effects of security breaches, computer viruses, and cybersecurity incidents; • increased use of artificial intelligence by us and our competitors, as well as related legal and regulatory requirements; • timing and amount of share repurchases; • impacts of U.S. tax reform legislation on our results of operations, and the impact on our customers and related demand for our products; • delays or reductions in state or local government spending due to revisions to federal appropriations brought on by policy changes, staffing levels or the inability to pass budget reconciliation legislation; • adequacy of our insurance coverage; • supply chain challenges; • our ability to attract and retain talented employees; • impact of geopolitical trends, changes, and events, including various military conflicts or tensions and the regional and global ramifications of these conditions; • operating problems at our manufacturing operations including fires, explosions, inclement weather, and floods and other natural disasters; • effectiveness of future implementations or conversions of enterprise resource planning or other key systems; • material weaknesses in our internal control over financial reporting and our ability to remediate such weaknesses; • impacts of pandemics, epidemics, or other public health emergencies; and • other risks discussed in Part I — Item 1A. “Risk Factors” of our Annual Report on Form 10‑K for the year ended December 31, 2025 (“2025 Form 10‑K”) and from time to time in our other Securities and Exchange Commission (the “SEC”) filings and reports. 18 Table of Contents Such forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this 2026 Q1 Form 10‑Q. If we do update or correct one or more forward-looking statements, investors and others should not conclude that we will make additional updates or corrections with respect thereto or with respect to other forward-looking statements. Overview NWPX Infrastructure, Inc. is a leading manufacturer of water-related infrastructure products and operates in two segments, Water Transmission Systems (“WTS”), operating as the Northwest Pipe Company brand, and Precast Infrastructure and Engineered Systems (“Precast”). For detailed descriptions of these segments, see Note 12, “Segment Information” of the Notes to Condensed Consolidated Financial Statements in Part I – Item 1. “Financial Statements” of this 2026 Q1 Form 10‑Q. Our WTS segment is the largest manufacturer of engineered water transmission systems in North America and produces steel casing pipe, bar-wrapped concrete cylinder pipe, and pipeline system joints and fittings. Our Precast segment provides solution-based products for a wide range of markets including high-quality reinforced precast concrete products, lined precast sanitary sewer system structures, water distribution and management equipment including pump lift stations, wastewater pretreatment, and stormwater quality products. Our Precast segment has broadened its manufacturing footprint by bringing lined and engineered precast products into production at additional facilities, increasing capacity and improving regional availability. Our skilled team is committed to quality and innovation while upholding its core values of accountability, commitment, and teamwork. Headquartered in Vancouver, Washington, we operate 14 manufacturing facilities across North America. On February 23, 2026, we completed the acquisition of 100% of the shares of Boughton’s Precast, Inc. (“Boughton”), a single precast facility located in Pueblo, Colorado, for a purchase price of approximately $9.0 million. Boughton is included in the Precast segment for all periods following the acquisition date. This acquisition expands our geographic footprint for our stormwater infrastructure and sanitary sewer products including manholes, catch basins, vaults, and reinforced concrete pipe. Our water infrastructure products are sold generally to installation contractors, who include our products in their bids to federal, state, and municipal agencies, privately-owned water companies, or developers for specific projects. We believe our sales are substantially driven by spending on urban growth and new water infrastructure with a recent trend towards spending on water infrastructure replacement, repair, and upgrade. Within the total range of products, our steel pipe best addresses the larger-diameter, higher-pressure pipeline applications, while our precast concrete products mainly serve stormwater and sanitary sewer systems. Our Current Economic Environment Demand for our Precast products is generally influenced by general economic conditions such as housing starts, population growth, interest rates, and rates of inflation. According to the United States Census Bureau, privately-owned housing starts were at a seasonally adjusted annual rate of 1.5 million in January 2026 and 1.4 million in December 2025, and the population of the United States is expected to increase by approximately 1 million people in 2026. While the housing market has softened recently and the current elevated federal funds rate could temper demand for our precast products, we continue to see steady demand in Texas and Utah which are two of the four states in the United States with the highest capital expenditures per capita according to the June 2025 Bluefield Research Insight Report – U.S. & Canada Water & Wastewater Pipe CAPEX Forecasts, 2025-2035 and two of the states in which our Precast manufacturing facilities are located. Our WTS projects are often planned for many years in advance, as we operate that business with a long-term time horizon for which the projects are sometimes part of 50‑year build-out plans. As anticipated, we experienced elevated bidding levels in the first quarter of 2026, leading to a record backlog of $373 million despite some uncertainty in the broader domestic economy. Recent executive orders, staffing cuts, and other federal funding disputes are viewed as risks that could delay funding brought on by the Bipartisan Infrastructure Deal (Infrastructure Investment and Jobs Act (“IIJA”)) and the Inflation Reduction Act. Project funding delays would first impact the engineering and design phases in the early part of the project cycle, and if they became elongated delays, would delay funding State Revolving Funds would eventually impact future project bids. According to the August 2025 Bluefield Research Insight Report – Infrastructure Investment & Jobs Act: Tracking the Spending, Q3 2025, approximately $5 billion earmarked under the IIJA has currently been awarded to Drinking Water State Revolving Loan Fund recipients via subawards, leaving most of the $55 billion spending package available; we expect to benefit from this spending late in the cycle due to the long timelines associated with WTS projects. 19 Table of Contents Purchased steel typically represents approximately 29% of our WTS projects’ cost of sales, and higher steel costs generally result in higher selling prices and revenue; however, volatile fluctuations in steel markets can affect our business. WTS contracts are generally quoted on a fixed-price basis, and volatile steel markets can result in selling prices that no longer correlate to the cost available at the time of steel purchase. Our average price of purchased steel was $1,043 per ton in the first three months of 2026, compared to annual averages of $967 in 2025 and $914 in 2024. Economic uncertainty, including the impacts of conflicts in the Middle East and Europe, U.S. global economic policy, resulting inflationary pressures, the potential risks of a recession, and disruptions in the financial markets could have an adverse effect on our business. We believe the uncertainty surrounding foreign trade policies could further dampen construction activity and impact our costs, particularly in the short term; however, these risks will be mitigated to the extent possible. A period of sustained uncertainty in the cost of fuel and the resulting impact on freight costs could present near term risks to financial performance. Should the economic environment remain uncertain, the direct and indirect impact on our business will also depend on future developments, which cannot be predicted. Results of Operations The following table sets forth, for the periods indicated, certain financial information regarding costs and expenses expressed in dollars (in thousands) and as a percentage of total net sales. Three Months Ended Three Months Ended March 31, 2026 March 31, 2025 $ % of Net Sales $ % of Net Sales Net sales: Water Transmission Systems $ 93,453 67.6 % $ 78,446 67.6 % Precast Infrastructure and Engineered Systems 44,801 32.4 37,669 32.4 Total net sales 138,254 100.0 116,115 100.0 Cost of sales: Water Transmission Systems 76,134 55.1 66,272 57.1 Precast Infrastructure and Engineered Systems 35,455 25.6 30,478 26.2 Total cost of sales 111,589 80.7 96,750 83.3 Gross profit: Water Transmission Systems 17,319 12.5 12,174 10.5 Precast Infrastructure and Engineered Systems 9,346 6.8 7,191 6.2 Total gross profit 26 [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following is management’s discussion and analysis of certain significant factors that have affected our consolidated financial condition and results of operations during the periods included herein. This discussion should be read in conjunction with our historical Consolidated Financial Statements and Notes to Consolidated Financial Statements in Part II — Item 8. “Financial Statements and Supplementary Data” of this 2025 Form 10‑K. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I — Item 1A. “Risk Factors” or in other parts of this 2025 Form 10‑K. For discussion related to the results of operations and changes in financial condition for the year ended December 31, 2024 compared to the year ended December 31, 2023 refer to Part II — Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Year Ended December 31, 2024 Compared to Year Ended December 31, 2023” and “Liquidity and Capital Resources” in our 2024 Form 10‑K, which was filed with the SEC on February 27, 2025, and which is incorporated herein by reference. Overview NWPX Infrastructure, Inc., formerly known as Northwest Pipe Company, is a leading manufacturer of water-related infrastructure products, and operates in two segments, Water Transmission Systems (WTS), operating as the Northwest Pipe Company brand, and Precast Infrastructure and Engineered Systems (Precast), which includes the brands NWPX Geneva and NWPX Park. For detailed descriptions of these segments, see the “Our Segments” discussion in Part I — Item 1. “Business” of this 2025 Form 10‑K. Under our Northwest Pipe Company brand, we are the largest manufacturer of engineered water transmission systems in North America and produce steel casing pipe, bar-wrapped concrete cylinder pipe, and pipeline system joints and fittings. We also provide solution-based products for a wide range of markets including high-quality reinforced precast concrete products, lined precast sanitary sewer system structures, water distribution and management equipment including pump lift stations, wastewater pretreatment, and stormwater quality products. We have broadened our manufacturing footprint by bringing lined and engineered precast products into production at additional facilities. This increases our capacity and improves regional availability. Strategically positioned to meet growing water and wastewater infrastructure needs, our skilled team is committed to quality and innovation while upholding our core values of accountability, commitment, and teamwork. Headquartered in Vancouver, Washington, we operate 13 manufacturing facilities across North America. On February 23, 2026, we completed the acquisition of 100% of the shares of Boughton’s Precast, Inc., a single precast facility located in Pueblo, Colorado, for a purchase price of approximately $9.0 million. This acquisition expands our geographic footprint for our stormwater infrastructure and sanitary sewer products including manholes, catch basins, vaults, and reinforced concrete pipe. The financial information included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations is that of NWPX Infrastructure, Inc. prior to the acquisition of Boughton because the acquisition was completed after the period covered by the financial statements included in this 2025 Form 10‑K. Our water infrastructure products are sold generally to installation contractors, who include our products in their bids to federal, state, and municipal agencies, privately-owned water companies, or developers for specific projects. We believe our sales are substantially driven by spending on urban growth and new water infrastructure with a recent trend towards spending on water infrastructure replacement, repair, and upgrade. Within the total range of products, our steel pipe best addresses the larger-diameter, higher-pressure pipeline applications, while our precast concrete products mainly serve stormwater and sanitary sewer systems. 26 Table of Contents Our Current Economic Environment Demand for our Precast products is generally influenced by general economic conditions such as housing starts, population growth, interest rates, and rates of inflation. According to the United States Census Bureau, privately-owned housing starts were at a seasonally adjusted annual rate of 1.4 million in December 2025 and 1.5 million in December 2024, and the population of the United States is expected to increase by approximately 1 million people in 2026. While the housing market has softened recently and the current elevated federal funds rate could temper demand for our precast products, we continue to see steady demand in Texas and Utah which are two of the four states in the United States with the highest capital expenditures per capita according to the June 2025 Bluefield Research Insight Report – U.S. & Canada Water & Wastewater Pipe CAPEX Forecasts, 2025-2035 and the states in which our Precast manufacturing facilities are located. Our WTS projects are often planned for many years in advance, as we operate that business with a long-term time horizon for which the projects are sometimes part of 50‑year build-out plans. Our 2025 project bidding levels approximated those realized in 2024, and we expect near and medium term demand for water infrastructure projects in the United States to remain relatively healthy. Our WTS business faces uncertainty in the broader domestic economy as recent executive orders, staffing cuts, and other federal funding disputes are viewed to delay funding brought on by the IIJA and the Inflation Reduction Act. While these delays first impact the engineering and design phases in the early part of the project cycle, elongated delays to funding State Revolving Funds would eventually impact future project bids. According to the August 2025 Bluefield Research Insight Report – Infrastructure Investment & Jobs Act: Tracking the Spending, Q3 2025, approximately $5 billion earmarked under the IIJA has currently been awarded to Drinking Water State Revolving Loan Fund recipients via subawards, leaving most of the $55 billion spending package available; we expect to benefit from this spending late in the cycle due to the long timelines associated with WTS projects. Purchased steel typically represents approximately 29% of our WTS projects’ cost of sales, and higher steel costs generally result in higher selling prices and revenue; however, volatile fluctuations in steel markets can affect our business. WTS contracts are generally quoted on a fixed-price basis, and volatile steel markets can result in selling prices that no longer correlate to the cost available at the time of steel purchase. Our average price of purchased steel was $967 per ton in 2025, compared to $914 in 2024 and $994 in 2023. Economic uncertainty, including the impacts of U.S. global economic policy, inflationary pressures, potential risks of a recession, and disruptions in the financial markets could have an adverse effect on our business. We believe uncertainty around the tariffs and related countermeasures could further dampen construction activity and impact our costs, particularly in the short term; however, these risks will be mitigated to the extent possible. Should the economic environment remain uncertain, the direct and indirect impact on our business will also depend on future developments, which cannot be predicted. 27 Table of Contents Results of Operations The following table sets forth, for the periods indicated, certain financial information regarding costs and expenses expressed in dollars (in thousands) and as a percentage of total net sales. Year Ended Year Ended Year Ended December 31, 2025 December 31, 2024 December 31, 2023 $ % of Net Sales $ % of Net Sales $ % of Net Sales Net sales: Water Transmission Systems $ 350,879 66.7 % $ 337,945 68.6 % $ 296,381 66.7 % Precast Infrastructure and Engineered Systems 175,124 33.3 154,603 31.4 147,974 33.3 Total net sales 526,003 100.0 492,548 100.0 444,355 100.0 Cost of sales: Water Transmission Systems 283,738 53.9 275,341 55.9 253,954 57.2 Precast Infrastructure and Engineered Systems 138,628 26.4 121,802 24.7 112,759 25.3 Total cost of sales 422,366 80.3 397,143 80.6 366,713 82.5 Gross profit: Water Transmission Systems 67,141 12.8 62,604 12.7 42,427 9.5 Precast Infrastructure and Engineered Systems 36,496 6.9 32,801 6.7 35,215 8.0 Total gross profit 103,637 19.7 95,405 19.4 77,642 17.5 Selling, general, and administrative expense 52,767 10.0 47,161 9.6 43,784 9.9 Operating income 50,870 9.7 48,244 9.8 33,858 7.6 Other income (loss) (1,783 ) (0.3 ) (213 ) - 276 0.1 Interest expense (2,609 ) (0.6 ) (5,660 ) (1.2 ) (4,855 ) (1.1 ) Income before income taxes 46,478 8.8 42,371 8.6 29,279 6.6 Income tax expense 11,067 2.1 8,165 1.7 8,207 1.8 Net income $ 35,411 6.7 % $ 34,206 6.9 % $ 21,072 4.8 % Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Net sales. Net sales increased 6.8% to $526.0 million in 2025 compared to $492.5 million in 2024. WTS net sales increased 3.8% to $350.9 million in 2025 compared to $337.9 million in 2024 driven by a 14% increase in selling price per ton due to changes in product mix, which was partially offset by a 9% decrease in tons produced resulting from changes in project timing. Bidding activity, backlog, and production levels may vary significantly from period to period, thereby affecting sales volumes. Precast net sales increased 13.3% to $175.1 million in 2025 compared to $154.6 million in 2024 driven by an 8% increase in volume shipped and a 4% increase in selling prices due to changes in product mix. Gross profit. Gross profit increased 8.6% to $103.6 million (19.7% of net sales) in 2025 compared to $95.4 million (19.4% of net sales) in 2024. WTS gross profit increased 7.2% to $67.1 million (19.1% of WTS net sales) in 2025 compared to $62.6 million (18.5% of WTS net sales) in 2024 primarily due to increased selling prices. Precast gross profit increased 11.3% to $36.5 million (20.8% of Precast net sales) in 2025 compared to $32.8 million (21.2% of Precast net sales) in 2024 primarily due to increased volume shipped. Selling, general, and administrative expense. Selling, general, and administrative expense increased 11.9% to $52.8 million (10.0% of net sales) in 2025 compared to $47.2 million (9.6% of net sales) in 2024 primarily due to $2.8 million in higher incentive compensation expense and $2.6 million in higher base compensation and benefits expense. 28 Table of Contents Income taxes. Income tax expense was $11.1 million in 2025 (an effective income tax rate of 23.8%) compared to $8.2 million in 2024 (an effective income tax rate of 19.3%). The effective income tax rate for 2025 was primarily impacted by non-deductible permanent differences and a reduction in uncertain income tax positions due to a lapse in statute of limitations for the year the position originated. The effective income tax rate for 2024 was primarily impacted by reduction in uncertain income tax positions due to a lapse in statute of limitations for the year the position originated. The effective income tax rate can change significantly depending on the relationship of permanent income tax differences to estimated pre-tax income or loss. Accordingly, the comparison of effective income tax rates between periods is not meaningful in all situations. Liquidity and Capital Resources Sources and Uses of Cash Our principal sources of liquidity generally include operating cash flows and our credit agreement. From time to time our long-term capital needs may be met through the issuance of additional debt or equity. Our principal uses of liquidity generally include capital expenditures, working capital, organic growth initiatives, acquisitions, share repurchases, and debt service. Information regarding our cash flows for the years ended December 31, 2025, 2024, and 2023 are presented in our Consolidated Statements of Cash Flows contained in Part II — Item 8. “Financial Statements and Supplementary Data” of this 2025 Form 10‑K, and are further discussed below. As of December 31, 2025, our working capital (current assets minus current liabilities) was $184.9 million compared to $187.4 million as of December 31, 2024. Cash and cash equivalents totaled $2.3 million and $5.0 million as of December 31, 2025 and 2024, respectively. Fluctuations in WTS working capital accounts result from timing differences between production, shipment, invoicing, and collection, as well as changes in levels of production and costs of materials. We typically have a relatively large investment in working capital, as we generally pay for materials, labor, and other production costs in the initial stages of a project, while payments from our customers are generally received after finished product is delivered. A portion of our revenues are recognized over time as the manufacturing process progresses; therefore, cash receipts typically occur subsequent to when revenue is recognized and the elapsed time between when revenue is recorded and when cash is received can be significant. As such, our payment cycle is a significantly shorter interval than our collection cycle, although the effect of this difference in the cycles may vary by project, and from period to period. As of December 31, 2025, we had $0.3 million of outstanding revolving loan borrowings, $11.5 million of outstanding long-term debt, $91.1 million of operating lease liabilities, and $7.1 million of finance lease liabilities. As of December 31, 2024, we had $24.7 million of outstanding revolving loan borrowings, $14.5 million of outstanding long-term debt, $90.7 million of operating lease liabilities, and $6.8 million of finance lease liabilities. For future maturities of these obligations, see Notes 6, 7, and 8 of the Notes to Consolidated Financial Statements in Part II — Item 8. “Financial Statements and Supplementary Data” of this 2025 Form 10‑K. Due to the uncertainty with respect to the timing of future cash flows associated with our approximately $1.9 million in unrecognized tax benefits as of December 31, 2025, we are unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities. For further information, see Note 16, “Income Taxes” of the Notes to Consolidated Financial Statements in Part II — Item 8. “Financial Statements and Supplementary Data” of this 2025 Form 10‑K. Net Cash Provided by Operating Activities Net cash provided by operating activities was $67.3 million in 2025 compared to $55.1 million in 2024. Net income, adjusted for noncash items, provided $73.8 million of operating cash flow in 2025 compared to $60.4 million of operating cash flow in 2024. The net change in working capital used $6.5 million of operating cash flow in 2025 compared to $5.3 million of operating cash flow in 2024. 29 Table of Contents Net Cash Used in Investing Activities Net cash used in investing activities was $20.1 million in 2025 compared to $20.7 million in 2024. Capital expenditures were $20.2 million in 2025 compared to $20.8 million in 2024, which includes $1.1 million in 2025 and $2.0 million in 2024 of investment in our new reinforced concrete pipe mill, $0.3 million in 2025 and $5.4 million in 2024 for the construction of a building at our Salt Lake City, Utah facility for the new mill, $1.4 million in 2025 for the catch basin in the Orem, Utah facility, and the remainder primarily for standard capital replacement. We currently expect capital expenditures in 2026 to be approximately $20 million to $24 million, which includes approximately $4 million for the catch basin machine in the Orem, Utah facility, and the remainder primarily for standard capital replacement. Net Cash Used in Financing Activities Net cash used in financing activities was $49.9 million in 2025 compared to $33.4 million in 2024. Net repayments on the line of credit were $24.4 million in 2025 compared to $29.8 million in 2024. Net borrowings (repayments) on other debt were ($3.0) million in 2025 compared to $3.7 million in 2024. Repurchases of common stock were $18.4 million in 2025 compared to $4.4 million in 2024. We anticipate that our existing cash and cash equivalents, cash flows expected to be generated by operations, and additional borrowing capacity under our credit agreement and other loans will be adequate to fund our working capital, debt service, capital expenditure requirements, and share repurchases for the foreseeable future. To the extent necessary, we may also satisfy capital requirements through additional bank borrowings, senior notes, term notes, subordinated debt, and finance and operating leases, if such resources are available on satisfactory terms. We have from time to time evaluated and continue to evaluate opportunities for acquisitions and expansion. Any such transactions, if consummated, may necessitate additional bank borrowings or other sources of funding. As previously discussed, we acquired Boughton in February 2026 which was funded by borrowings on the line of credit. On December 4, 2023, our shelf registration statement on Form S‑3 (Registration No. 333‑275691) covering the potential future sale of up to $150 million of our equity and/or debt securities or combinations thereof, was declared effective by the SEC. This shelf registration statement, which replaced the registration statement on Form S‑3 that expired on November 3, 2023, provides another potential source of capital, in addition to other alternatives already in place. We cannot be certain that funding will be available on favorable terms or available at all. To the extent that we raise additional funds by issuing equity securities, our shareholders may experience significant dilution. As of the date of this 2025 Form 10‑K, we have not yet sold any securities under this registration statement, nor do we have an obligation to do so. Please refer to the factors discussed in Part I — Item 1A. “Risk Factors” of this 2025 Form 10‑K. On October 10, 2023, our Board of Directors authorized a share repurchase program of up to $30 million of our outstanding common stock. On December 11, 2025, our Board of Directors authorized a share repurchase program of up to an additional $10 million of our outstanding common stock. These programs do not commit to any particular timing or quantity of purchases, and the programs may be suspended or discontinued at any time. Under the programs, shares may be purchased in the open market, including through plans adopted pursuant to Rule 10b5‑1 of the Exchange Act, or in privately negotiated transactions administered by our broker. At this time, we have elected to limit our share repurchase transactions to only those transactions made under Rule 10b5‑1 trading plans, which we believe consider our liquidity, including availability of borrowings and covenant compliance under our credit agreement, and other capital allocation priorities of the business. For details regarding our Rule 10b5‑1 trading plans and share repurchase program, see Note 11, “Stockholders’ Equity” of the Notes to Consolidated Financial Statements in Part II — Item 8. “Financial Statements and Supplementary Data” of this 2025 Form 10‑K. Please refer to the factors discussed in Part I — Item 1A. “Risk Factors” of this 2025 Form 10‑K. 30 Table of Contents Credit Agreement The Credit Agreement dated June 30, 2021 with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, and the lenders from time to time party thereto, including the initial sole lender, Wells Fargo (the “Lenders”), as amended by the Incremental Amendment dated October 22, 2021, the Second Amendment to Credit Agreement dated April 29, 2022, the Third Amendment to Credit Agreement dated June 29, 2023, and the Fourth Amendment to Credit Agreement and Ratification of Loan Documents dated August 13, 2025 (together, the “Amended Credit Agreement”) provides for a revolving loan, swingline loan, and letters of credit in the aggregate amount of up to $125 million (“Revolver Commitment”), with an option for us to increase that amount by $50 million, subject to provisions of the Amended Credit Agreement. The Amended Credit Agreement will expire, and all obligations outstanding will mature, on August 13, 2030. We may prepay outstanding amounts at our discretion without penalty at any time, subject to applicable notice requirements. As of December 31, 2025 under the Amended Credit Agreement, we had $0.3 million of outstanding revolving loan borrowings, $1.1 million of outstanding letters of credit, and additional borrowing capacity of approximately $124 million. Revolving loans under the Amended Credit Agreement bear interest at rates related to, at our option and subject to the provisions of the Amended Credit Agreement, either: (i) Base Rate (as defined in the Amended Credit Agreement) plus the Applicable Margin; (ii) Adjusted Daily Simple Secured Overnight Finance Rate (“SOFR”) (as defined in the Amended Credit Agreement) plus the Applicable Margin; or (iii) Adjusted Term SOFR (as defined in the Amended Credit Agreement) plus the Applicable Margin. The “Applicable Margin” is 0.50% to 2.00%, depending on our Consolidated Senior Leverage Ratio (as defined in the Amended Credit Agreement) and the interest rate option chosen. Interest on outstanding revolving loans is payable monthly in arrears. Swingline loans under the Amended Credit Agreement bear interest at the Base Rate plus the Applicable Margin. As of December 31, 2025, the weighted-average interest rate for outstanding borrowings was 5.35%. The Amended Credit Agreement requires the payment of a commitment fee of between 0.20% and 0.25%, based on the amount by which the Revolver Commitment exceeds the average daily balance of outstanding borrowings (as defined in the Amended Credit Agreement). Such fee is payable monthly in arrears. We are also obligated to pay additional fees customary for credit facilities of this size and type. The letters of credit outstanding as of December 31, 2025 relate to workers’ compensation insurance and a public improvement project. Based on the nature of these arrangements and our historical experience, we do not expect to make any material payments under these arrangements. The Amended Credit Agreement contains customary representations and warranties, as well as customary affirmative and negative covenants, events of default, and indemnification provisions in favor of the Lenders. The negative covenants include restrictions regarding the incurrence of liens and indebtedness, annual capital expenditures, certain investments, acquisitions, and dispositions, and other matters, all subject to certain exceptions. The Amended Credit Agreement requires us to regularly provide financial information to Wells Fargo and to maintain a consolidated senior leverage ratio no greater than 3.00 to 1.00 (subject to certain exceptions) and a minimum consolidated earnings before interest, taxes, depreciation, and amortization (as defined in the Amended Credit Agreement) of at least $35 million for the four consecutive fiscal quarters most recently ended. Pursuant to the Amended Credit Agreement, we have also agreed that we will not sell, assign, or otherwise dispose or encumber, any of our owned real property. The occurrence of an event of default could result in the acceleration of the obligations under the Amended Credit Agreement. We were in compliance with our financial covenants as of December 31, 2025, and expect to continue to be in compliance in the near term. Our obligations under the Amended Credit Agreement are secured by a senior security interest in substantially all of our and our subsidiaries’ assets. Long-term Debt On October 28, 2024, we converted the outstanding balance of the Interim Funding Agreement dated August 2, 2022 with Wells Fargo Equipment Finance, Inc. (“WFEF”), as amended January 23, 2023, March 15, 2023, July 21, 2023, and November 2, 2023 into a $15 million term loan with WFEF that was used to fund our new reinforced concrete pipe mill. The term loan matures on October 28, 2029, bears interest at the SOFR Average (as defined in the term loan) plus 2.22%, is payable in monthly installments of $0.3 million plus accrued interest, and is secured by the pipe mill. As of December 31, 2025, the outstanding balance of the term loan was $11.5 million and the weighted-average interest rate for outstanding borrowings was 6.24%. The term loan may be prepaid in full at any time provided that we pay a prepayment fee equal to 2% of the outstanding principal balance if repaid in the first 30 months of the loan. 31 Table of Contents Recent Accounting Pronouncements For a description of recent accounting pronouncements affecting our Company, including the dates of adoption and estimated effects on financial position, results of operations, and cash flows, see Note 2, “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in Part II — Item 8. “Financial Statements and Supplementary Data” of this 2025 Form 10‑K. Critical Accounting Estimates Management Estimates The preparation of our Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. On an ongoing basis, we evaluate all of our estimates including those related to revenue recognition, goodwill, income taxes, and litigation and other contingencies. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies and related judgments and estimates affect the preparation of our Consolidated Financial Statements. Revenue Recognition WTS revenue for water infrastructure steel pipe products is recognized over time as the manufacturing process progresses because of our right to payment for work performed to date plus a reasonable profit on cancellations for unique products that have no alternative use to us. Revenue is measured by the costs incurred to date relative to the estimated total direct costs to fulfill each contract. Contract costs include all material, labor, and other direct costs incurred in satisfying performance obligations. The cost of steel material is recognized as a contract cost when the steel is introduced into the manufacturing process. Estimated total costs of each contract requires judgment and are reviewed on a monthly basis by project management, operations, and cost accounting personnel for all active projects. All cost revisions that result in a material change in gross profit are reviewed by senior management personnel. Judgment is required in estimating total costs which primarily include labor costs and productivity, and cost and availability of materials, which could be influenced by inflationary trends, supplier performance, or asset utilization, amongst other factors. We use certain assumptions and develop estimates based on a number of considerations, including the degree of required product customization, our historical experience, the project plans, and an assessment of the risks and uncertainties inherent in the contract related to implementation delays or performance issues that may or may not be within our control. Changes in job performance, job conditions, and estimated profitability, including those arising from contract change orders, contract penalty provisions, foreign currency exchange rate movements, changes in raw materials costs, and final contract settlements may result in revisions to estimates of revenue, costs, and income, and are recognized in the period in which the revisions are determined. Provisions for losses on uncompleted contracts are estimated by comparing total estimated contract revenue to the total estimated contract costs and a loss is recognized during the period in which it becomes probable and can be reasonably estimated. Precast revenue for water infrastructure concrete pipe and precast concrete products is recognized at the time control is transferred to customers, which is generally at the time of shipment, in an amount that reflects the consideration we expect to be entitled to in exchange for the products. All variable considerations that may affect the total transaction price, including contractual discounts, returns, and credits are included in net sales. Estimates for variable consideration are based on historical experience, anticipated performance, and management’s judgment. We generally do not recognize revenue on a contract until the contract has approval and commitment from both parties, the contract rights and payment terms can be identified, the contract has commercial substance, and its collectability is probable. Our contracts do not contain significant financing. Goodwill Goodwill is reviewed for impairment annually as of November 30, or whenever events occur or circumstances change that indicate goodwill may be impaired. Goodwill is tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment (also known as a component). 32 Table of Contents In testing goodwill for impairment, we have the option to perform a qualitative assessment to determine whether the existence of events or circumstances indicate that it is more-likely-than-not (more than 50%) that the fair value of a reporting unit is less than its carrying amount. When performing a qualitative assessment, we evaluate factors such as industry and market conditions, cost factors, overall financial performance, and other relevant entity specific events and changes. In the evaluation, we also look at the long-term prospects for the reporting unit, which requires considerable management judgment. If the qualitative assessment indicates that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, or if we choose not to perform the qualitative assessment, then a quantitative assessment is performed to determine the reporting unit’s fair value. The fair value calculation uses a combination of income and market approaches. The income approach is based upon projected future after-tax cash flows discounted to present value using factors that consider the timing and risk associated with the future after-tax cash flows. The market approach is based upon historical and/or forward-looking measures using multiples of revenue or earnings before interest, tax, depreciation, and amortization. We utilize a weighted average of the income and market approaches. If the reporting unit’s carrying value exceeds its fair value, then an impairment loss is recognized for the amount of the excess of the carrying amount over the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Fair value determinations require considerable judgment and are sensitive to changes in underlying estimates, assumptions, and market factors, and future changes in any of these could result in different fair value determinations in the future. Income Taxes Income taxes are recorded using an asset and liability approach that requires the recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been recognized in our Consolidated Financial Statements or income tax returns. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount expected to be realized. The determination of our provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Our provision for income taxes primarily reflects a combination of income earned and taxed in the various United States federal, state, local, and to a lesser extent, foreign jurisdictions. Jurisdictional tax law changes, increases or decreases in permanent differences between book and tax items, accruals or adjustments of accruals for unrecognized income tax benefits or valuation allowances, and our change in the mix of earnings from these taxing jurisdictions all affect the overall effective income tax rate. We record income tax reserves for federal, state, local, and international exposures relating to periods subject to audit. The development of reserves for these exposures requires judgments about tax issues, potential outcomes and timing, and is a subjective estimate. We assess our income tax positions and record income tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances, and information available at the reporting dates. For those income tax positions where it is more-likely-than-not that an income tax benefit will be sustained, we have recorded the largest amount of income tax benefit with a greater than 50% likelihood of being realized upon settlement with a tax authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that an income tax benefit will be sustained, no income tax benefit has been recognized in the Consolidated Financial Statements.