CAPITAL CONSTRUCTION FUND

3 Months Ended

Mar. 31, 2025

CAPITAL CONSTRUCTION FUND

CAPITAL CONSTRUCTION FUND

7.          CAPITAL CONSTRUCTION FUND

The Capital Construction Fund (“CCF”) is described in Note 7 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. A summary of the activities within the CCF cash and cash equivalents, and investments account for the three months ended March 31, 2025 and 2024 consisted of the following:

	Three Months Ended
	March 31,
(In millions)	2025		2024
CCF Cash and Cash Equivalents:
CCF cash and cash equivalents balance at beginning of period	$	230.7	$	599.4
Cash withdrawal for the purchase of U.S. Treasury debt securities and accrued interest		—		(449.8)
Proceeds from U.S. Treasury debt securities at maturity		20.3		—
Interest income on cash and cash equivalents, and CCF investments		4.1		7.2
Repurchase of assigned accounts receivable		100.7		—
Qualifying withdrawal payments out of the CCF		(65.0)		—
Total CCF cash and cash equivalents balance at end of period		290.8		156.8
CCF Investments:
CCF investments balance at beginning of period		411.9		—
Purchase of U.S. Treasury debt securities		—		448.1
Withdrawals of U.S. Treasury debt securities at maturity		(20.3)		—
Accretion of investments		3.0		1.9
Total CCF investments balance at end of period		394.6		450.0
Total CCF cash and cash equivalents, and investments balance at end of period	$	685.4	$	606.8

CCF Cash and Cash Equivalents: Cash on deposit in the CCF account is invested in a short-term U.S. Treasury obligations fund with daily liquidity. At March 31, 2025, these short-term securities had a weighted average life of 89 days.

CCF Investments: In February 2024, the Company purchased approximately $448.1 million of fixed-rate U.S. Treasuries with accrued interest of $1.7 million using CCF cash. The fixed-rate debt securities were purchased at a discount and have various maturity dates of less than 2 years. The cost of these investments accretes to face value on a straight-line basis until maturity. Such accretion is included in interest income in the Condensed Consolidated Statements of Income and Comprehensive Income.

As of March 31, 2025, CCF investments maturities are as follows:

	As of
	March 31, 2025
Year (in millions)	Cost		Fair Value
2025	$	173.0	$	173.2
2026		169.3		169.9
2027		52.3		52.6
Total CCF investments	$	394.6	$	395.7

CCF cash and cash equivalents, and investments are classified as a long-term asset on the Company’s Condensed Consolidated Balance Sheets as the Company intends to use withdrawals to fund qualified milestone progress payments for the construction of three new Jones Act vessels.

CCF Assigned Accounts Receivable: As of March 31, 2025 and December 31, 2024, eligible accounts receivable of $79.2 million and $178.1 million were assigned to the CCF, respectively. Due to the nature of the assignment of eligible accounts receivable into the CCF, such assigned amounts are classified as part of accounts receivable in the Condensed Consolidated Balance Sheets.