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Basis of Presentation and Significant Accounting Policies | 6 Months Ended
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Jun. 30, 2025
Accounting Policies [Abstract] |
Basis of Presentation and Significant Accounting Policies | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES We have presented the condensed consolidated financial statements of BWX Technologies, Inc. ("BWXT" or the "Company") in U.S. dollars in accordance with the interim reporting requirements of Form 10-Q, Rule 10-01 of Regulation S-X and accounting principles generally accepted in the United States ("GAAP"). Certain financial information and disclosures normally included in our financial statements prepared annually in accordance with GAAP have been condensed or omitted. Readers of these financial statements should, therefore, refer to the consolidated financial statements and notes in our annual report on Form 10-K for the year ended December 31, 2024 (our "2024 10-K"). We have included all adjustments, in the opinion of management, consisting only of normal recurring adjustments, necessary for a fair presentation. We use the equity method to account for investments in entities that we do not control, but over which we have the ability to exercise significant influence. We generally refer to these entities as "joint ventures." We have eliminated all intercompany transactions and accounts. We classify assets and liabilities related to long-term contracts as current using the duration of the related contract or program as our operating cycle, which is generally longer than one year. We have recast certain amounts previously reported in our condensed consolidated balance sheets and statements of cash flows to conform to the presentation at June 30, 2025. We present the notes to our condensed consolidated financial statements on the basis of continuing operations, unless otherwise stated. Unless the context otherwise indicates, "we," "us" and "our" mean BWXT and its consolidated subsidiaries. Reportable Segments We operate in two reportable segments: Government Operations and Commercial Operations. Our reportable segments are further described as follows: •Our Government Operations segment manufactures naval nuclear reactors, including the related nuclear fuel, for the U.S. Naval Nuclear Propulsion Program for use in submarines and aircraft carriers. Through this segment, we also fabricate fuel-bearing precision components that range in weight from a few grams to hundreds of tons, manufacture electromechanical equipment, perform design, manufacturing, inspection, assembly and testing activities, downblend Cold War-era government stockpiles of high-enriched uranium and develop and manufacture advanced materials and products for commercial, military and space applications. In addition, we supply proprietary and sole-source valves, manifolds and fittings to global naval and commercial shipping customers. In-house capabilities also include wet chemistry uranium processing, advanced heat treatment to optimize component material properties and a controlled, clean-room environment with the capacity to assemble railcar-size components. This segment also provides various other services, primarily through joint ventures, to the U.S. and Canadian Governments including nuclear materials management and operation, environmental management and administrative and operating services for various Government-owned facilities. These services are primarily provided to the U.S. Department of Energy ("DOE"), including the National Nuclear Security Administration, the Office of Nuclear Energy, the Office of Science and the Office of Environmental Management, the Department of Defense and Canadian Nuclear Labs. In addition, this segment also develops technology for advanced nuclear reactors for a variety of power and propulsion applications in the space and terrestrial domains and offers complete advanced nuclear fuel and reactor design and engineering, licensing and manufacturing services for these programs. •Our Commercial Operations segment fabricates commercial nuclear steam generators, nuclear fuel, fuel handling systems, pressure vessels, reactor components, heat exchangers, tooling delivery systems and other auxiliary equipment, including containers for the storage of spent nuclear fuel and other high-level waste, and supplies nuclear-grade materials and precisely machined components for nuclear utility customers. We have supplied the nuclear industry with more than 1,300 large, heavy components worldwide and are the only commercial heavy nuclear component manufacturer in North America. This segment also provides specialized engineering services that include structural component design, 3-D thermal-hydraulic engineering analysis, weld and robotic process development, electrical and controls engineering and metallurgy and materials engineering. In addition, this segment offers in-plant inspection, maintenance and modification services for nuclear steam generators, heat exchangers, reactors, fuel handling systems and balance of plant equipment, as well as specialized non-destructive examination and tooling/repair solutions. This segment also offers a broad suite of nuclear power plant lifecycle support and management services for the global industry and transmission and distribution markets. This segment also manufactures medical radioisotopes, radiopharmaceuticals and medical devices, and partners with life science and pharmaceutical companies developing new drugs. See Note 3 and Note 8 for financial information about our segments. Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. For further information, refer to the consolidated financial statements and notes included in our 2024 10-K. Recently Adopted Accounting Standards There were no accounting standards adopted during the six months ended June 30, 2025 that had a significant impact on our financial position, results of operations, cash flows or disclosures. Contracts and Revenue Recognition We generally recognize contract revenues and related costs over time for individual performance obligations based on a cost-to-cost method in accordance with Financial Accounting Standards Board ("FASB") Topic Revenue from Contracts with Customers. We recognize estimated contract revenue and resulting income based on the measurement of the extent of progress toward completion as a percentage of the total project. Certain costs may be excluded from the cost-to-cost method of measuring progress, such as significant costs for uninstalled materials, if such costs do not depict our performance in transferring control of goods or services to the customer. We review contract price and cost estimates periodically as the work progresses and reflect adjustments proportionate to the percentage-of-completion in income in the period when those estimates are revised. We recognize revenue on certain cost plus and time and materials contracts equal to the amount we have the right to invoice the customer when performance obligations are satisfied over time and the invoice amount corresponds directly with the value we are providing the customer. Certain of our contracts recognize revenue at a point in time, and revenue on these contracts is recognized when control transfers to the customer. The majority of our revenue that is recognized at a point in time is related to parts and certain medical radioisotopes and radiopharmaceuticals in our Commercial Operations segment. For all contracts, if a current estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full when determined. See Note 3 for a further discussion of revenue recognition. Provision for Income Taxes We are subject to federal income tax in the U.S., Canada and various other foreign jurisdictions, as well as income tax within multiple U.S. state jurisdictions. We provide for income taxes based on the enacted tax laws and rates in the jurisdictions in which we conduct our operations. These jurisdictions may have regimes of taxation that vary with respect to nominal rates and with respect to the basis on which these rates are applied. This variation, along with changes in our mix of income within these jurisdictions, can contribute to shifts in our effective tax rate from period to period. Our effective tax rate for the three months ended June 30, 2025 was 19.7% as compared to 20.3% for the three months ended June 30, 2024. Our effective tax rate for the six months ended June 30, 2025 was 18.8% as compared to 21.3% for the six months ended June 30, 2024. The effective tax rates for the three and six months ended June 30, 2025 were lower than the U.S. corporate federal income tax rate of 21% primarily due to benefits from U.S. federal research and development tax credits and excess tax benefits associated with equity compensation. The effective tax rates for the three and six months ended June 30, 2024 approximated the U.S. corporate federal income tax rate of 21% due to the revaluation of our Canadian net deferred tax liabilities, which was required by the temporary reduction of the Canadian federal tax rate for qualifying nuclear manufacturers for tax years beginning on or after January 1, 2024. On July 4, 2025, President Trump signed into law an act commonly referred to as the “One Big Beautiful Bill Act”. This bill includes a number of tax provisions including extending existing provisions that were set to expire, substantive changes in international tax rules and the repeal or phase outs of certain energy tax credits. We are currently evaluating the impact of this legislation on our results of operations, financial position and cash flows. Cash and Cash Equivalents and Restricted Cash and Cash Equivalents At June 30, 2025, we had restricted cash and cash equivalents totaling $7.2 million, $4.1 million of which was held for future decommissioning of facilities (which is included in Other Assets on our condensed consolidated balance sheets) and $3.0 million of which was held to meet reinsurance reserve requirements of our captive insurer. The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents on our condensed consolidated balance sheets to the totals presented on our condensed consolidated statements of cash flows:
|  | June 30, 2025 |  | December 31, 2024
|  | (In thousands)
Cash and cash equivalents |  | $ | 36,984 |  |  | $ | 74,109 |
Restricted cash and cash equivalents |  | 3,049 |  |  | 2,785 |
Restricted cash and cash equivalents included in Other Assets |  | 4,102 |  |  | 3,677 |
Total cash and cash equivalents and restricted cash and cash equivalents as presented on our condensed consolidated statements of cash flows |  | $ | 44,135 |  |  | $ | 80,571 |
Inventories At June 30, 2025 and December 31, 2024, we had inventories totaling $51.6 million and $40.3 million, respectively, consisting almost entirely of raw materials and supplies. Property, Plant and Equipment, Net Property, plant and equipment is stated at cost and is set forth below:
|  | June 30, 2025 |  | December 31, 2024
|  | (In thousands)
Land |  | $ | 55,428 |  |  | $ | 10,608 |
Buildings |  | 494,901 |  |  | 417,189 |
Machinery and equipment |  | 1,279,022 |  |  | 1,166,236 |
Property under construction |  | 652,759 |  |  | 584,539 |
|  | 2,482,110 |  |  | 2,178,572 |
Less: Accumulated depreciation |  | 944,339 |  |  | 900,411 |
Property, Plant and Equipment, Net |  | $ | 1,537,771 |  |  | $ | 1,278,161 |
Accumulated Other Comprehensive Income (Loss) The components of Accumulated other comprehensive income (loss) included in Stockholders' Equity are as follows:
|  | June 30, 2025 |  | December 31, 2024
|  | (In thousands)
Currency translation adjustments |  | $ | (9,897) |  |  | $ | (33,735) |
Net unrealized gain on derivative financial instruments |  | 543 |  |  | 490 |
Unrecognized prior service cost on benefit obligations |  | (13,937) |  |  | (15,233) |
Net unrealized gain (loss) on available-for-sale investments |  | (94) |  |  | 267 |
Accumulated other comprehensive loss |  | $ | (23,385) |  |  | $ | (48,211) |
The amounts reclassified out of Accumulated other comprehensive income (loss) by component and the affected condensed consolidated statements of income line items are as follows:
|  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |
|  | 2025 |  | 2024 |  | 2025 |  | 2024 |  |
Accumulated Other Comprehensive Income (Loss) Component Recognized |  | (In thousands) |  | Line Item Presented
Realized gain (loss) on derivative financial instruments |  | $ | 192 |  |  | $ | 125 |  |  | $ | 115 |  |  | $ | 91 |  |  | Revenues
|  | 77 |  |  | (191) |  |  | 323 |  |  | (75) |  |  | Cost of operations
|  | 269 |  |  | (66) |  |  | 438 |  |  | 16 |  |  | Total before tax
|  | (58) |  |  | 17 |  |  | (95) |  |  | (4) |  |  | Provision for Income Taxes
|  | $ | 211 |  |  | $ | (49) |  |  | $ | 343 |  |  | $ | 12 |  |  | Net Income
Amortization of prior service cost on benefit obligations |  | $ | (814) |  |  | $ | (832) |  |  | $ | (1,611) |  |  | $ | (1,663) |  |  | Other – net
|  | 157 |  |  | 163 |  |  | 315 |  |  | 324 |  |  | Provision for Income Taxes
|  | $ | (657) |  |  | $ | (669) |  |  | $ | (1,296) |  |  | $ | (1,339) |  |  | Net Income
Realized gains on investments |  | $ | — |  |  | $ | — |  |  | $ | 381 |  |  | $ | — |  |  | Other – net
|  | — |  |  | — |  |  | (80) |  |  | — |  |  | Provision for Income Taxes
|  | $ | — |  |  | $ | — |  |  | $ | 301 |  |  | $ | — |  |  | Net Income
Total reclassification for the period |  | $ | (446) |  |  | $ | (718) |  |  | $ | (652) |  |  | $ | (1,327) |  |  |
Derivative Financial Instruments Our operations give rise to exposure to market risks from changes in foreign currency exchange ("FX") rates. We use derivative financial instruments, primarily FX forward contracts, to reduce the impact of changes in FX rates on our operating results. We use these instruments to hedge our exposure associated with revenues or costs on our long-term contracts and other transactions that are denominated in currencies other than our operating entities' functional currencies. We do not hold or issue derivative financial instruments for trading or other speculative purposes. We enter into derivative financial instruments primarily as hedges of certain firm purchase and sale commitments and loans between domestic and foreign subsidiaries denominated in foreign currencies. We record these contracts at fair value on our condensed consolidated balance sheets. Based on the hedge designation at the inception of the contract, the related gains and losses on these contracts are deferred in stockholders' equity as a component of Accumulated other comprehensive income (loss) until the hedged item is recognized in earnings. The gain or loss on a derivative instrument not designated as a hedging instrument is immediately recognized in earnings. Gains and losses on derivative financial instruments that require immediate recognition are included as a component of Other – net on our condensed consolidated statements of income and are recorded in our condensed consolidated statements of cash flows based on the nature and use of the instruments. We have designated the majority of our FX forward contracts that qualify for hedge accounting as cash flow hedges. The hedged risk is the risk of changes in functional-currency-equivalent cash flows attributable to changes in FX spot rates of forecasted transactions primarily related to long-term contracts. We exclude from our assessment of effectiveness the portion of the fair value of the FX forward contracts attributable to the difference between FX spot rates and FX forward rates. At June 30, 2025, we had deferred approximately $0.5 million of net gains on these derivative financial instruments. Assuming market conditions continue, we expect to recognize the majority of this amount in the next 12 months. For the three months ended June 30, 2025 and 2024, we recognized (gains) losses of $22.1 million and $(5.1) million, respectively, and for the six months ended June 30, 2025 and 2024, we recognized (gains) losses of $20.4 million and $(14.8) million, respectively, in Other – net on our condensed consolidated statements of income associated with FX forward contracts not designated as hedging instruments. At June 30, 2025, our derivative financial instruments consisted of FX forward contracts with a total notional value of $775.3 million with maturities extending to August 2026. These instruments consist primarily of FX forward contracts to purchase or sell Canadian dollars and Euros. We are exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments. We attempt to mitigate this risk by using major financial institutions with high credit ratings. Our counterparties to derivative financial instruments have the benefit of the same collateral arrangements and covenants as described under our credit facility. New Accounting and Disclosure Standards In December 2023, the FASB issued updates to Topic Income Taxes to provide, on an annual basis, disaggregated disclosures with respect to the reconciliation of our effective tax rate, as well as a disaggregation of income taxes paid, net of refunds received. The new standard is effective on a prospective basis for annual periods beginning after December 15, 2024. We are currently evaluating the impact of the adoption of this standard and expect that it will only require changes to our disclosures with no impact on our results of operations, financial position or cash flows. In November 2024, the FASB issued updates to Topic Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses. These updates require a public entity to disclose additional information about specific expense categories in the notes to financial statements on an annual and interim basis. The updates are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. A public entity may apply these amendments on a prospective basis or retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the impact of the adoption of this standard and expect that it will only require changes to our disclosures with no impact on our results of operations, financial position or cash flows.

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- Definition The entire disclosure for the basis of presentation and significant accounting policies concepts. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). Accounting policies describe all significant accounting policies of the reporting entity. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483426/235-10-50-1 + Details
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