What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2021-02-22 compared with 2020-02-24 · 589 added, 258 removed, 1199 unchanged (41% of the section changed)

25 unchanged sentences

The Company recognizes estimated contract revenue and resulting income based on the measurement of the extent of progress toward completion as a percentage of the total project.

The Company reviews contract price and cost estimates periodically as the work progresses and reflect adjustments proportionate to the percentage-of-completion in income in the period in which those estimates are revised.

The accounting for these contracts involves judgment, particularly as it relates to the process of estimating total costs at completion for the performance obligation.

Given the significance of revenue and the level of judgment involved in estimating total costs at completion for the performance obligations used to recognize revenue for long-term contracts, auditing such estimates involved especially subjective judgment.

The Company reviews contract price and cost estimates periodically as the work progresses and reflects adjustments proportionate to the percentage-of-completion in income in the period when those estimates are revised.

The accounting for these contracts involves judgment, particularly as it relates to the process of estimating total costs to complete the performance obligation.

Given the significance of revenue and the level of judgment involved in estimating total costs to complete the performance obligations used to recognize revenue for long-term contracts, auditing such estimates involved especially subjective judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management's estimates of contract costs to complete for its performance obligations included the following, among others:

Our audit procedures related to revenues recognized over time, including management’s estimates of total contract costs to complete its performance obligations included the following, among others:

• We tested the effectiveness of controls over revenue recognized over time, including those over cost estimates at completion for performance obligations.

We performed a retrospective review on prior percentage-of-completion estimates to assess management's ability to estimate costs.

We tested the recorded revenue using analytical procedures, regression analysis, and detailed contract testing.

For a selection of contracts with customers recognized over time, our detail testing performed included the following:

• For select cumulative adjustments recorded, we performed a retrospective review to determine that the adjustments were the result of changes in facts and circumstances and not estimates that were previously inaccurate.

• We tested the recorded revenue using a combination of analytical procedures and detailed contract testing.

• For select contracts with customers recognized over time, our detail testing performed included the following:

◦ Read the contract to understand the contract terms and evaluated the appropriateness of the accounting treatment in accordance with generally accepted accounting principles.

Compared the transaction price to the consideration expected to be received based on current rights and obligations under the contract and any modifications that were agreed upon with the customer.

◦ Compared the transaction price to the consideration expected to be received based on current rights and obligations under the contract, including modifications that were agreed upon with the customer.

◦ Tested management’s identification of distinct performance obligations.

◦ Tested the mathematical accuracy of management’s calculation of the percent complete, the profit margin and the revenue recognized over time.

Evaluated the estimates of total costs for the performance obligation as follows:

Tested the accuracy and completeness of the costs incurred to date used in the calculation of the total cost estimates for the performance obligation by agreeing the tested amounts to the actual costs incurred to date recorded in the general ledger.

Compared costs incurred to date to the costs management estimated to be incurred to date.

Evaluated management's ability to achieve the estimates of total cost by performing corroborating inquiries with the Company's project managers and engineers, comparing the estimates to management's work plans, engineering specifications and supplier contracts, and when considered necessary, observation of the work site to evaluate project status.

Compared management's estimates for the selected contract to costs of similar performance obligations, when applicable.

Tested key inputs of the estimates (e.g., material cost estimates are compared to purchase orders, supplier contracts or other source documents).

◦ Evaluated a selection of cost estimates within the selected contract as follows:

▪ Compared costs incurred to date or costs of similar performance obligations to evaluate the reasonableness of management’s estimates.

▪ Evaluated management’s ability to achieve the cost estimates by performing corroborating inquiries with the Company’s project managers and engineers, as appropriate;

comparing the estimates to management’s work plans, engineering specifications, purchase orders, and/or supplier contracts as appropriate;

and when considered necessary, observation of the work site to evaluate project status.

/S/ DELOITTE & TOUCHE LLP

8 unchanged sentences

Restricted cash and cash equivalents 3,070 3,056

Investments 3,707 5,843

Accounts receivable – trade, net 153,368 56,721

Accounts receivable – other 22,239 13,426

Retainages 55,172 46,670

Contracts in progress 449,176 376,037

2 unchanged sentences

Property, Plant and Equipment, Net 816,471 580,241

Investments 9,356 7,620

Goodwill 283,708 275,502

Deferred Income Taxes 49,415 58,689

1 unchanged sentence

Intangible Assets 192,751 191,392

Other Assets 96,398 95,598

TOTAL $ 2,293,503 $ 1,908,913

See accompanying notes to consolidated financial statements.

6 unchanged sentences

Current maturities of long-term debt $ — $ 14,711

Bank overdraft 88,694 —

Accounts payable 184,392 170,678

5 unchanged sentences

Long-Term Debt

862,731 809,442

Accumulated Postretirement Benefit Obligation

25,689 23,259

Environmental Liabilities

84,153 80,368

Pension Liability

144,859 172,508

Other Liabilities

28,576 14,515

Commitments and Contingencies (Note 10)

1 unchanged sentence

Common stock, par value $ 0.01 per share, authorized 325,000,000 shares;

issued 126,579,285 and 125,871,866 shares at December 31, 2019 and December 31, 2018, respectively

issued 127,009,536 and 126,579,285 shares at December 31, 2020 and 2019, respectively

Preferred stock, par value $ 0.01 per share, authorized 75,000,000 shares;

2 unchanged sentences

Retained earnings 1,549,950 1,344,383

Treasury stock at cost, 31,266,670 and 30,625,074 shares at December 31, 2019 and December 31, 2018, respectively

Treasury stock at cost, 31,698,747 and 31,266,670 shares at December 31, 2020 and 2019, respectively

( 1,095,452 ) ( 1,068,164 )

Accumulated other comprehensive income (loss) 8,198 ( 7,448 )

Stockholders' Equity – BWX Technologies, Inc.

617,766 404,106

Noncontrolling interest 2 6

Total Stockholders' Equity 617,768 404,112

$ 2,293,503 $ 1,908,913

See accompanying notes to consolidated financial statements.

2 unchanged sentences

Year Ended December 31,

2020 2019 2018

(In thousands, except share and per share amounts)

$ 2,123,516 $ 1,894,920 $ 1,799,889

Costs and Expenses:

Cost of operations

1,548,119 1,361,056 1,295,876

Research and development costs

14,189 17,672 15,223

Losses (gains) on asset disposals and impairments, net

( 1,361 ) 2,824 64

Selling, general and administrative expenses

231,169 216,771 214,092

Total Costs and Expenses

1,792,116 1,598,323 1,525,255

Equity in Income of Investees

27,152 28,924 30,343

Operating Income

358,552 325,521 304,977

Other Income (Expense):

Interest income

518 942 2,479

Interest expense

( 31,014 ) ( 35,320 ) ( 27,823 )

34,116 22,599 512

Total Other Income (Expense)

3,620 ( 11,779 ) ( 24,832 )

Income before Provision for Income Taxes

362,172 313,742 280,145

Provision for Income Taxes

82,976 69,065 52,840

$ 279,196 $ 244,677 $ 227,305

Net Income Attributable to Noncontrolling Interest

( 526 ) ( 562 ) ( 347 )

Net Income Attributable to BWX Technologies, Inc.

$ 278,670 $ 244,115 $ 226,958

Earnings per Common Share:

Net Income Attributable to BWX Technologies, Inc.

$ 2.92 $ 2.56 $ 2.29

Net Income Attributable to BWX Technologies, Inc.

$ 2.91 $ 2.55 $ 2.27

Shares used in the computation of earnings per share (Note 17):

95,457,193 95,377,414 99,062,087

95,726,497 95,810,538 100,019,053

See accompanying notes to consolidated financial statements.

2 unchanged sentences

Year Ended December 31,

2020 2019 2018

(In thousands)

$ 279,196 $ 244,677 $ 227,305

Other Comprehensive Income (Loss):

2 unchanged sentences

Unrealized (losses) gains arising during the period, net of tax benefit (provision) of $ 24 , $ 442 and $( 167 ), respectively

Reclassification adjustment for losses (gains) included in net income, net of tax (benefit) provision of $(310), $47 and $21, respectively

( 73 ) ( 1,586 ) 450

Reclassification adjustment for (gains) losses included in net income, net of tax provision (benefit) of $ 173 , $( 310 ) and $ 47 , respectively

( 487 ) 888 ( 118 )

Benefit obligations:

Unrecognized losses arising during the period, net of tax benefit of $ 513 , $ 1,274 and $ 2,290 , respectively

( 1,820 ) ( 4,249 ) ( 8,444 )

Recognition of benefit plan costs, net of tax benefit of $( 645 ), $( 562 ) and $( 410 ), respectively

Unrealized gains (losses) arising during the period, net of tax provision of $(3), $(6) and $(382), respectively

2,532 2,030 1,500

Unrealized (losses) gains arising during the period, net of tax provision of $( 56 ), $( 3 ) and $( 6 ), respectively

( 191 ) 418 ( 102 )

Reclassification adjustment for gains included in net income, net of tax provision of $ 0 , $ 0 and $ 1 , respectively

Other Comprehensive Income (Loss)

15,646 2,764 ( 16,358 )

Total Comprehensive Income

294,842 247,441 210,947

Comprehensive Income Attributable to Noncontrolling Interest

( 526 ) ( 562 ) ( 347 )

Comprehensive Income Attributable to BWX Technologies, Inc.

$ 294,316 $ 246,879 $ 210,600

See accompanying notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Common Stock Capital In

Par Value Retained

Earnings Accumulated

Comprehensive

Income (Loss)

Stockholders'

Noncontrolling

Income (Loss) Treasury

Stock Stockholders'

Equity Noncontrolling

Interest Total

Stockholders'

1 unchanged sentence

Balance December 31, 2017 125,381,591 $ 1,254 $ 98,843 $ 990,652 $ 9,454 $ ( 814,809 ) $ 285,394 $ 363 $ 285,757

Recently adopted accounting standards — — — 13,311 ( 3,385 ) — 9,926 — 9,926

Net income — — — 226,958 — — 226,958 347 227,305

Dividends declared ($ 0.64 per share)

— — — ( 64,159 ) — — ( 64,159 ) — ( 64,159 )

Currency translation adjustments — — — — ( 9,642 ) — ( 9,642 ) — ( 9,642 )

8 unchanged sentences

Recently adopted accounting standards — — — ( 1,219 ) 77 — ( 1,142 ) — ( 1,142 )

Net income — — — 244,115 — — 244,115 562 244,677

Dividends declared ($ 0.68 per share)

— — — ( 65,275 ) — — ( 65,275 ) — ( 65,275 )

Currency translation adjustments — — — — 5,263 — 5,263 — 5,263

8 unchanged sentences

Recently adopted accounting standards — — — — — — — — —

Net income — — — 278,670 — — 278,670 526 279,196

Dividends declared ($ 0.76 per share)

— — — ( 73,103 ) — — ( 73,103 ) — ( 73,103 )

Currency translation adjustments — — — — 15,685 — 15,685 — 15,685

11 unchanged sentences

Year Ended December 31,

2020 2019 2018

(In thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income $ 279,196 $ 244,677 $ 227,305

Adjustments to reconcile net income to net cash provided by operating activities:

4 unchanged sentences

Stock-based compensation expense 16,844 12,726 11,883

Other, net ( 792 ) 963 ( 2,238 )

Changes in assets and liabilities, net of effects from acquisitions:

1 unchanged sentence

Accounts payable ( 1,241 ) 44,592 1,888

Retainages ( 8,578 ) 11,477 24,911

Contracts in progress and advance billings on contracts ( 53,242 ) ( 78,645 ) ( 34,012 )

Income taxes 1,157 ( 3,833 ) ( 23,257 )

Accrued and other current liabilities 6,843 ( 14,135 ) 11,596

Pension liabilities, accrued postretirement benefit obligations and employee benefits ( 29,311 ) ( 8,822 ) ( 187,425 )

Other, net 7,903 ( 9,006 ) ( 2,634 )

NET CASH PROVIDED BY OPERATING ACTIVITIES 196,442 279,368 169,290

5 unchanged sentences

Investments, net of return of capital, in equity method investees 88 255 ( 9,059 )

Other, net 3,397 208 5,253

NET CASH USED IN INVESTING ACTIVITIES ( 265,319 ) ( 179,995 ) ( 326,724 )

3 unchanged sentences

Payment of debt issuance costs ( 6,803 ) — ( 9,443 )

Bank overdraft 88,694 — —

Repurchases of common shares ( 21,960 ) ( 20,000 ) ( 214,759 )

2 unchanged sentences

Cash paid for shares withheld to satisfy employee taxes ( 5,249 ) ( 9,190 ) ( 6,796 )

NET CASH USED IN FINANCING ACTIVITIES

Other, net ( 9,332 ) 900 ( 671 )

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 25,046 ( 43,713 ) ( 9,323 )

EFFECTS OF EXCHANGE RATE CHANGES ON CASH ( 271 ) 332 ( 9,979 )

TOTAL INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS

TOTAL (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS ( 44,102 ) 55,992 ( 176,736 )

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 92,400 36,408 213,144

2 unchanged sentences

Cash paid during the period for:

Interest $ 38,267 $ 39,670 $ 16,993

Income taxes (net of refunds) $ 73,589 $ 70,056 $ 58,715

28 unchanged sentences

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.

The Barberton and Mount Vernon locations specialize in the design and manufacture of heavy components inclusive of development and fabrication activities for submarine missile launch tubes.

The Barberton and Mount Vernon locations specialize in the design and manufacture of heavy components inclusive of fabrication activities for submarine missile launch tubes.

The Euclid facility fabricates electro-mechanical equipment and performs design, manufacturing, inspection, assembly and testing activities.

1 unchanged sentence

("NFS"), one of our wholly owned subsidiaries.

Located in Erwin, NFS also downblends Cold War-era government stockpiles of high-enriched uranium into material suitable for further processing into commercial nuclear reactor fuel.

Our Nuclear Power Group 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, for nuclear utility customers.

Located in Erwin, NFS also downblends Cold War-era government stockpiles of high-enriched uranium.

• Our Nuclear Power Group 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.

BWXT has supplied the nuclear industry with more than 1,300 large, heavy components worldwide and is the only commercial heavy nuclear component manufacturer in North America.

3 unchanged sentences

• Our Nuclear Services Group segment provides various services to the U.S.

Government and the commercial nuclear industry.

Services provided to the U.S.

Government include nuclear materials management and operation, environmental management and administrative and operating services for various U.S.

Government including nuclear materials management and operation, environmental management and administrative and operating services for various U.S.

Government-owned facilities.

2 unchanged sentences

Through this segment we deliver services and management solutions to nuclear and high-consequence operations.

A significant portion of this segment's operations are conducted through joint ventures.

Our Nuclear Services Group segment also provides inspection and maintenance services primarily for the U.S.

commercial nuclear industry including steam generator and heat exchanger inspection services, high pressure water lancing, non-destructive examination and customized tooling solutions.

This segment also develops technology for a

variety of applications, including advanced nuclear power sources, and offers complete advanced nuclear fuel and reactor design and engineering, licensing and manufacturing services for new advanced nuclear reactors.

A significant portion of this segment's operations is conducted through joint ventures.

This segment also develops technology for a variety of applications, including advanced nuclear power sources, and offers complete advanced nuclear fuel and reactor design and engineering, licensing and manufacturing services for new advanced nuclear reactors.

See Note 15 for financial information about our segments.

Divestiture of U.S.-Based Commercial Nuclear Services Business

On May 29, 2020, our subsidiary BWXT Nuclear Energy, Inc.

divested its U.S.-based commercial nuclear services business, a component of our Nuclear Services Group segment.

In a cashless transaction, we exchanged net assets totaling $ 18.0 million, consisting primarily of property, plant and equipment and certain warranty obligations, for a manufacturing facility and the associated land of approximately the same value.

The acquired assets are reported as part of the Nuclear Services Group segment.

Recently Adopted Accounting Standards

On January 1, 2019, we adopted the update to the Financial Accounting Standards Board ("FASB") Topic Leases .

This update requires that a lessee recognize on its balance sheets the assets and liabilities for all leases with lease terms of more than 12 months, along with additional qualitative and quantitative disclosures.

We adopted this update using the modified retrospective method, which resulted in the recognition of right-of-use assets totaling $ 45.1 million and lease liabilities totaling $ 11.9 million .

The difference between the right-of-use assets and lease liabilities of $ 33.2 million was primarily the result of reclassifications from Intangible Assets of favorable leases related to recent acquisitions.

In addition, we elected the package of practical expedients permitted under the transition guidance, which allowed us to carry forward our historical lease classifications, among other things.

The adoption of the provisions in this update did not have an impact on our consolidated statements of income or cash flows.

On January 1, 2020, we adopted the update to the Financial Accounting Standards Board ("FASB") Topic Financial Instruments – Credit Losses .

This update requires entities to recognize expected credit losses immediately in the financial statements.

We considered our customer base, credit loss history and expected loss rate in our evaluation of expected credit losses.

The adoption of the provisions in this update did not have an impact on our financial position, results of operations or cash flows.

On January 1, 2020, we adopted the update to the FASB Topic Intangibles – Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment .

This update simplifies the accounting for goodwill impairment by eliminating the second step from the goodwill impairment test.

Goodwill impairment is now determined by comparing the fair value of a reporting unit with its carrying amount.

The adoption of the provisions in this update did not have an impact on our financial position, results of operations or cash flows.

In December 2019, the FASB issued an update to the FASB Topic Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes .

This update simplifies various aspects related to the accounting for income taxes by eliminating certain exceptions to the general principles in Topic 740, simplifies when companies recognize deferred taxes in an interim period and clarifies certain aspects of the current guidance to promote consistent application.

We elected to early adopt this update effective January 1, 2020, which did not have a material impact on our financial position, results of operations or cash flows.

On January 1, 2020, we adopted the update to the FASB Topic Compensation – Retirement Benefits – Defined Benefit Plans – General .

This update modifies the annual disclosure requirements for employers that sponsor defined benefit pension or other postretirement benefit plans.

This update requires disclosure changes to be presented on a retrospective basis.

The adoption of the provisions in this update did not have an impact on our financial position, results of operations or cash flows.

Use of Estimates

12 unchanged sentences

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.

On January 1, 2019, certain of our joint ventures within our Nuclear Services Group segment adopted the provisions of FASB Topic Revenue from Contracts with Customers .

This resulted in a decrease to Investments in Unconsolidated Affiliates of $ 1.1 million with an offsetting decrease to Retained earnings on our consolidated balance sheet.

Warranty Expense

4 unchanged sentences

Year Ended December 31,

2020 2019 2018

(In thousands)

Balance at beginning of period $ 9,042 $ 10,344 $ 13,428

Additions 1,341 2,232 1,494

Expirations and other changes (1)

( 1,624 ) ( 2,728 ) ( 3,367 )

Payments ( 1,026 ) ( 1,065 ) ( 663 )

Translation and other (2)

( 2,441 ) 259 ( 548 )

Balance at end of period $ 5,292 $ 9,042 $ 10,344

(1) Includes discounts provided to customers in satisfaction of warranty obligations totaling $( 1.2 ) million in each of the years ended December 31, 2019 and 2018.

(2) Includes $( 2.5 ) million related to the divestiture of the U.S.-based commercial nuclear services business during the year ended December 31, 2020.

Stock-Based Compensation

11 unchanged sentences

See Note 9 for a further discussion of stock-based compensation.

Grant Accounting

We recognize amounts related to grants as a reduction of expense in the period in which the related costs for which the grants are intended to compensate are recognized and we are reasonably assured to receive payment.

On April 11, 2020, the Canadian Government enacted the Canada Emergency 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 year ended December 31, 2020, we recognized $ 20.4 million of subsidies under CEWS as an offset to operating expenses.

Research and Development

7 unchanged sentences

We incurred total interest of $ 40.8 million, $ 41.4 million and $ 31.5 million in the years ended December 31, 2020, 2019 and 2018, respectively, of which we capitalized $ 9.8 million, $ 6.1 million and $ 3.7 million in the years ended December 31, 2020, 2019 and 2018, respectively.

Income tax expense for federal, foreign, state and local income taxes is calculated on pre-tax income based on current tax law and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets

and liabilities.

We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized.

10 unchanged sentences

We have computed earnings per common share on the basis of the weighted-average number of common shares, and, where dilutive, common share equivalents, outstanding during the indicated periods.

We issue a number of forms of stock-based compensation periodically, including incentive and non-qualified stock options, restricted stock, restricted stock units and performance shares and performance units, subject to satisfaction of specific performance goals.

We issue a number of forms of stock-based compensation periodically, including incentive and non-qualified stock options, restricted stock, restricted stock units, performance shares and performance units, subject to satisfaction of specific performance goals.

We include the shares applicable to these plans in our computation of diluted earnings per share when related performance criteria have been met.

9 unchanged sentences

Total cash and cash equivalents and restricted cash and cash equivalents as presented on our consolidated statements of cash flows

$ 48,298 $ 92,400

Our investment portfolio consists primarily of U.S.

3 unchanged sentences

We classify investments available for current operations in the consolidated balance sheets as current assets, while we classify investments held for long-term purposes as non-current assets.

We adjust the amortized cost of debt securities for amortization of premiums and accretion of discounts to maturity.

That amortization is included in Interest income.

We adjust the amortized cost of debt securities for amortization of premiums and accretion of discounts to maturity, and such adjustments are included in Interest income.

We include realized gains and losses on our investments in Other – net.

10 unchanged sentences

(In thousands)

Land $ 9,585 $ 8,919

Buildings 267,808 221,462

Machinery and equipment 827,785 775,997

Property under construction 420,374 265,715

1,525,552 1,272,093

Accumulated depreciation 709,081 691,852

Net Property, Plant and Equipment

Property, Plant and Equipment, Net $ 816,471 $ 580,241

Goodwill represents the excess of the cost of our acquired businesses over the fair value of the net assets acquired.

1 unchanged sentence

We may elect to perform a qualitative test when we believe that there is sufficient excess fair value over carrying value based on our most recent quantitative assessment, adjusted for relevant events and circumstances that could affect fair value during the current year.

If we conclude based on this assessment that it is more likely than not that the reporting unit is not impaired, we do not perform a quantitative impairment test.

In all other circumstances, we utilize a two-step quantitative impairment test to identify potential goodwill impairment and measure the amount of any goodwill impairment.

The first step of the test compares the fair value of a reporting unit with its carrying amount, including goodwill.

If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of the impairment loss, if any.

The second step compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill.

If we conclude based on this assessment that it is more

likely than not that the reporting unit is not impaired, we do not perform a quantitative impairment test.

In all other circumstances, we compare the fair value of a reporting unit to its carrying amount, including goodwill.

If the fair value of the reporting unit exceeds its carrying value, no impairment charge is recorded.

If the carrying amount of a reporting unit exceeds its fair value, an impairment charge is recorded to goodwill in the amount by which carrying value exceeds fair value.

The following summarizes the changes in the carrying amount of Goodwill:

Operations Group

Operations Group Nuclear

Group Nuclear

(In thousands)

Balance at December 31, 2018 $ 110,939 $ 118,143 $ 45,000 $ 274,082

Acquisition of the MI business (Note 2)

Balance at December 31, 2018

Translation and other (1)

— 1,420 — 1,420

Balance at December 31, 2019 $ 110,939 $ 119,563 $ 45,000 $ 275,502

Acquisition of Laker Energy Products (Note 2) — 5,753 — 5,753

Translation — 2,453 — 2,453

Balance at December 31, 2020 $ 110,939 $ 127,769 $ 45,000 $ 283,708

(1) Includes an adjustment of $( 3.2 ) million, net of tax, to correct the business combination accounting for our 2016 acquisition.

11 unchanged sentences

Our Intangible Assets were as follows:

2020 2019 2018

(In thousands)

7 unchanged sentences

Patented technology 780 765 734

All other 858 2,200 2,200

Total $ 181,921 $ 172,730 $ 209,992

Accumulated amortization:

6 unchanged sentences

Patented technology ( 286 ) ( 212 ) ( 136 )

All other ( 86 ) ( 1,522 ) ( 1,302 )

Total $ ( 33,000 ) $ ( 25,168 ) $ ( 25,146 )

Net amortized intangible assets $ 148,921 $ 147,562 $ 184,846

3 unchanged sentences

Year Ended December 31,

2020 2019 2018

(In thousands)

3 unchanged sentences

Reclassification of right-of-use assets — ( 33,866 ) —

Translation and other (1)

2,003 5,710 ( 9,496 )

Balance at end of period $ 192,751 $ 191,392 $ 228,676

(1) Includes $( 0.6 ) million related to the divestiture of the U.S.-based commercial nuclear services business during the year ended December 31, 2020.

Estimated amortization expense for the next five fiscal years is as follows (amounts in thousands):

Year Ended December 31,

Year Ended December 31, Amount

We lease certain manufacturing facilities, office space and equipment under operating leases with terms of one to 20 years.

9 unchanged sentences

The maturities of our lease liabilities at December 31, 2020 were as follows (amounts in thousands):

Thereafter 2,828

Total lease payments $ 10,488

Interest ( 1,722 )

Present value of lease liabilities (1)

2 unchanged sentences

The difference between the right-of-use assets and lease liabilities was primarily the result of our adoption of the update to the FASB Topic Leases on January 1, 2019, which resulted in reclassifications from Intangible Assets of favorable leases related to recent acquisitions.

Future minimum payments required under operating leases that had initial or remaining noncancellable lease terms in excess of one year at December 31, 2018 were as follows (amounts in thousands):

Deferred Debt Issuance Costs

3 unchanged sentences

Year Ended December 31,

2020 2019 2018

(In thousands)

Balance at beginning of period $ 8,006 $ 9,583 $ 4,202

Additions 6,803 — 9,443

Interest expense (1)

( 2,540 ) ( 1,577 ) ( 4,062 )

Balance at end of period $ 12,269 $ 8,006 $ 9,583

Includes the recognition of prior deferred debt issuance costs associated with a former credit facility of $ 2.4 million for the year ended December 31, 2018.

(1) Includes the recognition of prior deferred debt issuance costs associated with former credit facilities of $( 0.7 ) million and $( 2.4 ) million for the years ended December 31, 2020 and 2018, respectively.

Pension Plans and Postretirement Benefits

3 unchanged sentences

The actuarial valuations utilize significant assumptions in the determination of our benefit cost and obligations, including assumptions regarding discount rates, expected returns on plan assets, mortality and health care cost trends.

We determine our discount rate based on a yield curve comprised of rates of return on high-quality, fixed-income investments currently available and expected to be available during the period to maturity of our pension and postretirement benefit plan obligations.

benefit plan obligations.

The expected rate of return on plan assets assumption is based on capital market assumptions of the long-term expected returns for the investment mix of assets currently in the portfolio.

11 unchanged sentences

Nuclear Regulatory Commission ("NRC") and the Canadian Nuclear Safety Commission ("CNSC").

In accordance with the FASB Topic Asset Retirement and Environmental Obligations, we record the fair value of a liability for an asset retirement obligation

in the period in which it is incurred.

In accordance with the FASB Topic Asset Retirement and Environmental Obligations, we record the fair value of a liability for an asset retirement obligation in the period in which it is incurred.

When we initially record such a liability, we capitalize a cost by increasing the carrying amount of the related long-lived asset.

5 unchanged sentences

We adjust the estimated costs as further information develops or circumstances change.

Given the long-lived nature of these facilities, we are required to estimate retirement costs that will be incurred in the future, which may extend up to 40 years at the time the asset retirement obligation is established.

Due to the significance of the remaining useful life of these facilities, the timing of retirement and future costs for material components of the asset retirement obligations, such as labor and waste disposal fees, could differ from our estimates.

An exception to this accounting treatment relates to the work we perform for two facilities for which the U.S.

3 unchanged sentences

Year Ended December 31,

2020 2019 2018

(In thousands)

2 unchanged sentences

Additions/adjustments ( 3,284 ) ( 5,030 ) 8,000

Acquisitions — — 2,062

Accretion 5,343 5,379 5,523

Translation and other (1)

371 ( 3,503 ) ( 1,788 )

Balance at end of period (2)

Includes an adjustment of $( 4.3 ) million to correct the business combination accounting for our 2016 acquisition.

$ 78,110 $ 77,288 $ 90,822

(1) Includes an adjustment of $( 4.3 ) million to correct the business combination accounting for our 2016 acquisition during the year ended December 31, 2019.

(2) Includes current asset retirement obligations of $ 2.8 million, $ 5.7 million and $ 13.8 million at December 31, 2020, 2019 and 2018, respectively.

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Currency translation adjustments $ 24,454 $ 8,769

Net unrealized gain on derivative financial instruments

Net unrealized (loss) gain on derivative financial instruments ( 496 ) 64

Unrecognized prior service cost on benefit obligations ( 15,902 ) ( 16,614 )

Net unrealized gain (loss) on available-for-sale investments

Net unrealized gain on available-for-sale investments 142 333

Accumulated other comprehensive income $ 8,198 $ ( 7,448 )

Upon adopting the FASB update to the Topic Derivatives , we reclassified $ 0.1 million from Retained earnings to Accumulated other comprehensive income on January 1, 2019.

The amounts reclassified out of Accumulated other comprehensive income by component and the affected consolidated statements of income line items are as follows:

Year Ended December 31,

2020 2019 2018

Accumulated Other Comprehensive Income (Loss) Component Recognized

(In thousands)

Line Item Presented

(In thousands) Line Item Presented

Realized (loss) gain on derivative financial instruments

$ ( 35 ) $ ( 132 ) $ ( 242 ) Revenues

695 ( 1,066 ) 407 Cost of operations

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( 173 ) 310 ( 47 ) Provision for Income Taxes

$ 487 $ ( 888 ) $ 118 Net Income

Amortization of prior service cost on benefit obligations

$ ( 3,177 ) $ ( 2,592 ) $ ( 1,910 ) Other – net

645 562 410 Provision for Income Taxes

$ ( 2,532 ) $ ( 2,030 ) $ ( 1,500 ) Net Income

Realized gains on investments

$ — $ — $ 3 Other – net

— — ( 1 ) Provision for Income Taxes

$ — $ — $ 2 Net Income

Total reclassification for the period

$ ( 2,045 ) $ ( 2,918 ) $ ( 1,380 )

Foreign Currency Translation

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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 denominated in foreign currencies.

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 consolidated balance sheets.

Based on the hedge designation at 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 until the hedged item is recognized in earnings.

Based on the hedge designation at 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 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 consolidated statements of income.

Gains and losses on derivative financial instruments that require immediate recognition are included as a component of Other – net on our consolidated statements of income and are recorded in the 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.

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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 December 31, 2019 , we had deferred approximately $ 0.1 million of net gains on these derivative financial instruments.

At December 31, 2020, we had deferred approximately $( 0.5 ) million of net losses on these derivative financial instruments.

Assuming market conditions continue, we expect to recognize the majority of this amount in the next twelve months.

For the year ended December 31, 2018, we recognized $ 4.7 million of gains associated with FX forward contracts not designated as hedges, which we recorded as an investing activity in the consolidated statement of cash flows.

At December 31, 2019 , our derivative financial instruments consisted of FX forward contracts with a total notional value of $ 68.1 million with maturities extending to December 2021 .

For the years ended December 31, 2020, 2019 and 2018, we recognized $ 8.7 million, $( 1.0 ) million and $( 4.7 ) million, respectively, of (gains) losses associated with FX forward contracts not designated as hedges.

At December 31, 2020, our derivative financial instruments consisted of FX forward contracts with a total notional value of $ 245.3 million with maturities extending to March 2023.

These instruments consist primarily of FX forward contracts to purchase or sell Canadian dollars and Euros.

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Our counterparties to derivative financial instruments have the benefit of the same collateral arrangements and covenants as described under our credit facility.

New Accounting Standards

In June 2016, the FASB issued Topic Financial Instruments – Credit Losses .

This update requires entities to recognize expected credit losses immediately in the financial statements.

We expect to adopt the provisions of this update on January 1, 2020.

We do not expect the adoption of this update to have a material impact on our financial statements.

In January 2017, the FASB issued an update to the Topic Intangibles – Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment .

This update eliminates the two-step process that requires the identification of a potential impairment and a separate analysis to measure the amount of the impairment.

Our annual assessment of goodwill impairment will be now determined by comparing the fair value of a reporting unit with its carrying amount.

We expect to adopt the provisions of this update on January 1, 2020.

We do not expect the adoption of this update to have a material impact on our financial statements.

NOTE 2 – ACQUISITIONS

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("Laker Energy Products") for CAD 23.3 million ($ 17.8 million U.S.

dollar equivalent), subject to contingent consideration of up to an additional CAD 12.0 million .

dollar equivalent).

At December 31, 2020, we are subject to the payment of contingent consideration totaling CAD 5.0 million, of which we have recognized CAD 2.5 million as a component of the purchase price.

Our purchase price allocation resulted in the recognition of $ 8.4 million of Property, Plant and Equipment, Net, $ 8.2 million of Intangible Assets and $ 5.8 million of Goodwill.

In addition, we recognized right-of-use assets and lease liabilities of $ 2.7 million.

Laker Energy Products is a global supplier of nuclear-grade materials and precisely machined components for CANDU nuclear power utilities and employs approximately 140 personnel.

Laker Energy Products will be reported as part of our Nuclear Power Group segment.

Laker Energy Products is reported as part of our Nuclear Power Group segment.

Nordion Medical Isotope Business

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Contracts in progress 51

Inventories 2,113

Other current assets 97

Property, plant and equipment 12,948

Goodwill 62,495

Deferred Income Taxes 3,006

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The intangible assets included above consist of the following (dollar amounts in thousands):

Amortization Period

Technical support agreement

Unpatented technology

Favorable operating leases

Customer relationship

Amount Amortization Period

Technical support agreement $ 67,500 23 years

Unpatented technology $ 33,000 23 years

Favorable operating leases $ 28,157 13 - 30 years

Customer relationship $ 10,600 23 years

The following unaudited pro forma financial information presents our results of operations for the years ended December 31, 2018 and 2017 as if the acquisition of the MI business had occurred on January 1, 2017.

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(In thousands, except per share amounts)

Revenues $ 1,825,029 $ 1,726,135

Net Income Attributable to BWX Technologies, Inc.

$ 228,545 $ 143,475

Basic Earnings per Common Share $ 2.31 $ 1.44

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NOTE 3 – REVENUE RECOGNITION

The initial impact of the adoption of the FASB Topic Revenue from Contracts with Customers , which was recognized in a cumulative catch-up adjustment on January 1, 2018, is illustrated below:

(In thousands)

Contracts in progress

Deferred Income Taxes

Accrued liabilities – other

Advance billings on contracts

Stockholders' Equity:

Retained earnings

The adoption of FASB Topic Revenue from Contracts with Customers , which was recognized in a cumulative catch-up adjustment on January 1, 2018, resulted in an increase to Retained earnings of $ 9.9 million.

Within our Nuclear Operations Group segment, we continue to recognize revenue over time and now measure progress on performance obligations using a cost-to-cost method.

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This change impacted the life-to-date revenue and cost of operations recognized on performance obligations, and the adjustment to capture the impact of the new revenue recognition standard was recorded as a cumulative catch-up adjustment in Retained earnings.

The new standard also resulted in a reduction in both our Contracts in progress and Advance billings on contracts account balances as a result of measuring the asset and liability at the contract level.

Prior to January 1, 2018, contract assets and liabilities were measured at the unit of account, which we concluded was at a lower level than that of the contract.

The impact of the adoption of the new revenue standard on our Nuclear Power Group and Nuclear Services Group segments was not material.

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Our Nuclear Operations Group segment recognizes revenue over time for the manufacturing of naval nuclear reactor components and fuel, submarine missile launch tubes and the downblending of high-enriched uranium.

Certain of our contracts contain two or more different types of components, each of which we identify as a separate performance obligation.

Certain of our contracts

contain two or more different types of components, each of which we identify as a separate performance obligation.

We recognize revenue using a cost-to-cost method to measure progress as control is continually transferred to the customer as we incur costs on the performance obligations.

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For standard parts, revenue is recognized at the point in time control transfers to the customer, which is consistent with the transfer of ownership.

For medical isotopes, we recognize revenue either at the point in time control transfers to the customer or over time using a unit of output method.

For medical radioisotopes, we recognize revenue either at the point in time control transfers to the customer or over time using a unit of output method.

This segment generates revenue primarily from firm-fixed-price contracts that do not contain variable consideration as well as time-and-materials based contracts.

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The contracts within this segment do not contain significant variable consideration and contain a single performance obligation.

Certain of these contracts contain assurance warranties and/or provisions for liquidated damages, which are expected to have an immaterial impact on the contracts based on our historical experience.

Disaggregated Revenues

Revenues by geographical area and customer type were as follows:

Year Ended December 31, 2019

Year Ended December 31, 2018

(In thousands)

Year Ended December 31, 2020 Year Ended December 31, 2019 Year Ended December 31, 2018

Group Nuclear

Group Total Nuclear

Group Nuclear

Group Total Nuclear

Group Nuclear

(In thousands)

United States:

Government $ 1,540,256 $ — $ 113,075 $ 1,653,331 $ 1,368,555 $ — $ 111,236 $ 1,479,791 $ 1,311,886 $ — $ 107,711 $ 1,419,597

Non-Government 98,986 35,432 19,061 153,479 51,802 38,058 17,907 107,767 4,146 16,059 11,831 32,036

$ 1,639,242 $ 35,432 $ 132,136 $ 1,806,810 $ 1,420,357 $ 38,058 $ 129,143 $ 1,587,558 $ 1,316,032 $ 16,059 $ 119,542 $ 1,451,633

Non-Government $ — $ 309,433 $ 4,357 $ 313,790 $ — $ 287,948 $ 2,196 $ 290,144 $ 161 $ 294,781 $ 2,758 $ 297,700

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Segment Revenues $ 1,646,257 $ 371,269 $ 136,493 2,154,019 $ 1,428,587 $ 352,640 $ 131,339 1,912,566 $ 1,319,170 $ 365,911 $ 122,438 1,807,519

Eliminations ( 30,503 ) ( 17,646 ) ( 7,630 )

Revenues $ 2,123,516 $ 1,894,920 $ 1,799,889

Revenues by timing of transfer of goods or services were as follows:

Year Ended December 31, 2019

Year Ended December 31, 2018

(In thousands)

Year Ended December 31, 2020 Year Ended December 31, 2019 Year Ended December 31, 2018

Group Nuclear

Group Total Nuclear

Group Nuclear

Group Total Nuclear

Group Nuclear

(In thousands) (In thousands) (In thousands)

Over time $ 1,646,092 $ 322,745 $ 136,493 $ 2,105,330 $ 1,428,348 $ 305,075 $ 131,339 $ 1,864,762 $ 1,318,884 $ 335,430 $ 122,438 $ 1,776,752

Point-in-time 165 48,524 — 48,689 239 47,565 — 47,804 286 30,481 — 30,767

Segment Revenues $ 1,646,257 $ 371,269 $ 136,493 2,154,019 $ 1,428,587 $ 352,640 $ 131,339 1,912,566 $ 1,319,170 $ 365,911 $ 122,438 1,807,519

Eliminations ( 30,503 ) ( 17,646 ) ( 7,630 )

Revenues $ 2,123,516 $ 1,894,920 $ 1,799,889

Revenues by contract type were as follows:

Year Ended December 31, 2019

Year Ended December 31, 2018

(In thousands)

Year Ended December 31, 2020 Year Ended December 31, 2019 Year Ended December 31, 2018

Group Nuclear

Group Total Nuclear

Group Nuclear

Group Total Nuclear

Group Nuclear

(In thousands) (In thousands) (In thousands)

Fixed-Price Incentive Fee $ 1,226,770 $ 1,578 $ — $ 1,228,348 $ 1,137,883 $ 2,511 $ — $ 1,140,394 $ 1,041,083 $ 16,165 $ — $ 1,057,248

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Segment Revenues $ 1,646,257 $ 371,269 $ 136,493 2,154,019 $ 1,428,587 $ 352,640 $ 131,339 1,912,566 $ 1,319,170 $ 365,911 $ 122,438 1,807,519

Eliminations ( 30,503 ) ( 17,646 ) ( 7,630 )

Revenues $ 2,123,516 $ 1,894,920 $ 1,799,889

Performance Obligations

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Changes in these estimates result in the recognition of cumulative catch-up adjustments that impact our revenues and/or costs of contracts.

During the years ended December 31, 2019 and 2018, we recognized net favorable changes in estimates that resulted in increases in revenues of $ 70.9 million and $ 58.6 million , respectively, as well as increases (decreases) in cost of operations of $( 0.7 ) million and $ 12.3 million , respectively.

During the years ended December 31, 2020, 2019 and 2018, we recognized net favorable changes in estimates that resulted in increases in revenues of $ 44.9 million, $ 70.9 million and $ 58.6 million, respectively, as well as increases (decreases) in cost of operations of $ 2.1 million, $( 0.7 ) million and $ 12.3 million, respectively.

Included in these 2018 amounts are contract adjustments resulting from rework issues related to the manufacture of non-nuclear components being produced within our Nuclear Operations Group segment.

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Changes in Contracts in progress and Advance billings on contracts are primarily driven by differences in the timing of revenue recognition and billings to our customers.

During the year ended December 31, 2019 , our unbilled receivables increased $ 57.1 million and our Advance billings on contracts decreased $ 23.1 million , primarily as a result of revenue in excess of billings on certain fixed-price incentive fee contracts within our Nuclear Operations Group segment and the timing of milestone billings in our Nuclear Power Group segment.

During the year ended December 31, 2020, our unbilled receivables increased $ 70.4 million primarily as a result of the timing of milestone billings in our Nuclear Power Group segment and the acquisition of Laker Energy Products.

Our fixed-price incentive fee contracts for our Nuclear Operations Group segment include provisions that result in an increase in retainages on contracts during the first and third quarters of the year, with larger payments made during the second and fourth quarters.

Retainages also vary as a result of timing differences between incurring costs and achieving milestones that allow us to recover these amounts.

December 31, December 31,

(In thousands)

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Unbilled receivables $ 436,279 $ 365,861

Retainages $ 55,172 $ 46,670

Included in Other Assets:

Retainages $ 1,488 $ 1,412

Advance billings on contracts $ 83,581 $ 75,425

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Of the long-term retainages at December 31, 2020, we anticipate collecting $ 0.3 million in 2022 and $ 1.2 million in 2023.

During the years ended December 31, 2019 and 2018 , we recognized $ 62.3 million and $ 53.6 million of revenue that was in Advance billings on contracts at December 31, 2018 and January 1, 2018, respectively.

During the years ended December 31, 2020 and 2019, we recognized $ 51.5 million and $ 62.3 million of revenue that was in Advance billings on contracts at December 31, 2019 and 2018, respectively.

Remaining Performance Obligations

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Of the remaining performance obligations on our contracts with customers at December 31, 2020, we expect to recognize revenues as follows:

2021 2022 Thereafter Total

(In approximate millions)

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Noncurrent assets 970 1,285

Total Assets $ 492,995 $ 443,538

Current liabilities $ 270,536 $ 219,702

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Year Ended December 31,

2020 2019 2018

(In thousands)

Revenues $ 3,980,066 $ 3,716,548 $ 5,685,015

Gross profit $ 142,709 $ 133,170 $ 172,673

Net income $ 139,988 $ 130,949 $ 162,095

Reimbursable costs recorded in revenues by the unconsolidated joint ventures in our Nuclear Services Group segment totaled $ 3,851.5 million, $ 3,516.1 million and $ 5,339.7 million for the years ended December 31, 2020, 2019 and 2018, respectively.

In 2018, we began to properly classify certain of our joint ventures as equity method investments resulting in the increases in the summarized financial information disclosed above.

Income taxes for the investees are the responsibility of the respective owners.

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Year Ended December 31,

2020 2019 2018

(In thousands)

Equity income based on stated ownership percentages

$ 27,266 $ 28,272 $ 30,787

Timing of GAAP and other adjustments

( 114 ) 652 ( 444 )

Equity in income of investees

$ 27,152 $ 28,924 $ 30,343

Our transactions with unconsolidated affiliates were as follows:

Year Ended December 31,

2020 2019 2018

(In thousands)

Sales to $ 12,186 $ 14,668 $ 18,454

Dividends received $ 25,005 $ 20,955 $ 22,237

Capital contributions, net of returns $ ( 88 ) $ ( 255 ) $ 9,059

At December 31, 2019 and 2018 , Other Assets included amounts due from unconsolidated affiliates of $ 2.6 million and $ 4.3 million , respectively.

At December 31, 2020 and 2019, Accounts receivable - other included amounts due from unconsolidated affiliates of $ 2.5 million and $ 2.6 million, respectively.

NOTE 5 – INCOME TAXES

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This variation, along with the changes in our mix of income within these jurisdictions, can contribute to shifts in our effective tax rate from period to period.

On December 22, 2017, H.R.

1, the Tax Cuts and Jobs Act (the "Act") was enacted, making significant changes to existing U.S.

tax laws that impact us, including, but not limited to, a reduction to the U.S.

corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017, the taxation of global intangible low-taxed income ("GILTI") and additional deduction limitations related to executive compensation.

Our Canadian operations continue to be subject to tax at a local statutory rate of approximately 25 % .

We are currently under audit by various state and international authorities.

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Year Ended December 31,

2020 2019 2018

(In thousands)

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Decreases due to lapse of applicable statute of limitation ( 123 ) ( 127 ) ( 1,379 )

Other, net 1 16 ( 27 )

Balance at end of period $ 5,852 $ 3,899 $ 274

The unrecognized tax benefits balance of $ 5.9 million at December 31, 2020 would reduce our effective tax rate if recognized.

We believe that, within the next 12 months, it is reasonably possible that our previously unrecognized tax benefits could decrease by $ 0.1 million .

We believe that, within the next 12 months, it is reasonably possible that our entire previously unrecognized tax benefits will be resolved with the appropriate taxing jurisdiction.

Deferred income taxes reflect the net tax effects of temporary differences between the financial and tax bases of assets and liabilities.

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Long-term contracts 15,974 10,790

State tax credits and net operating loss carryforward

Foreign tax credit and net operating loss carryforward

Accrued payroll taxes 4,828 —

federal tax credits and loss carryforward 7,224 4,177

state tax credits and loss carryforward 6,819 7,297

Foreign tax credit and loss carryforward 9,919 5,848

Other 4,961 4,621

Total deferred tax assets 129,135 120,736

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Right-of-use lease assets 10,509 10,446

Intangibles 17,004 14,134

Total deferred tax liabilities 66,828 48,469

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Year Ended December 31,

2020 2019 2018

(In thousands)

$ 314,150 $ 270,569 $ 231,721

Other than U.S.

48,022 43,173 48,424

Income before Provision for Income Taxes $ 362,172 $ 313,742 $ 280,145

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Year Ended December 31,

2020 2019 2018

(In thousands)

– federal $ 53,340 $ 47,693 $ 14,680

– state and local 7,587 2,180 4,597

Other than U.S.

14,159 15,398 16,117

Total current 75,086 65,271 35,394

– federal 10,852 7,975 20,327

– state and local ( 536 ) 872 1,564

Other than U.S.

( 2,426 ) ( 5,053 ) ( 4,445 )

Total deferred 7,890 3,794 17,446

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Year Ended December 31,

2020 2019 2018

federal statutory tax rate 21.0 % 21.0 % 21.0 %

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Tax Cuts & Jobs Act — % — % ( 4.7 ) %

Manufacturing deduction

Minority interest

Other ( 0.3 ) % 0.1 % 0.8 %

Effective tax rate 22.9 % 22.0 % 18.9 %

As a result of the passage of the Act, during the year ended December 31, 2017, we recognized $ 53.0 million of expense in our provision for income taxes due primarily to the remeasurement of our U.S.

deferred tax assets and liabilities.

In the year ended December 31, 2018, we recognized $ 13.5 million of benefit in our provision for income taxes related to the remeasurement of our deferred tax assets as a result of accelerating additional contributions to certain of our domestic pension plans for inclusion in our 2017 U.S.

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The following is an analysis of our valuation allowance for deferred tax assets:

Balance Charges To

Expenses Charged To

Accounts Ending

(In thousands)

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Year Ended December 31, 2018 $ ( 15,252 ) 2,017 ( 22 ) $ ( 13,257 )

We have state credits and state net operating losses of $ 9.2 million ( $ 7.3 million net of federal tax benefit) available to offset future taxable income in various states.

These state net operating loss carryforwards begin to expire in the year 2020 .

are carrying a valuation allowance of $ 7.8 million ( $ 6.2 million net of federal tax benefit) against the deferred tax asset related to the state credits and state loss carryforwards.

We have federal capital losses of $ 7.2 million available to offset future capital gains.

These federal capital losses begin to expire in the year 2023.

We are carrying a full valuation allowance of $ 7.2 million against the deferred tax asset related to these federal capital loss carryforwards.

In addition, we have state credits and state net operating losses of $ 8.6 million ($ 6.8 million net of federal tax benefit) available to offset future taxable income in various states.

These state net operating loss carryforwards begin to expire in the

We are carrying a valuation allowance of $ 7.2 million ($ 5.7 million net of federal tax benefit) against the deferred tax asset related to the state credits and state loss carryforwards.

We would be subject to withholding taxes if we were to distribute earnings from certain foreign subsidiaries.

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Secured Debt:

Senior Notes $ 800,000 $ 400,000

Credit Facility 75,000 432,159

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Long-Term Debt $ 862,731 $ 809,442

Maturities of Long-Term Debt subsequent to December 31, 2019 are as follows:

2020 – $ 14.7 million ;

2021 – $ 14.7 million ;

2022 – $ 14.7 million ;

2023 – $ 388.0 million ;

Maturities of Long-Term Debt subsequent to December 31, 2020 were as follows:

2021 through 2024 – $ 0.0 million;

2025 – $ 75.0 million;

and thereafter – $ 800.0 million.

On June 12, 2020, we issued $ 400 million aggregate principal amount of our 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, the guarantors party thereto and U.S.

Bank National Association, as trustee.

The proceeds from the issuance of the Senior Notes due 2028 were used to (1) repay in full the Term Loans, as defined below, under our Credit Agreement dated as of May 24, 2018 (as amended, the "Credit Facility"), (2) repay a portion of the borrowings under the Revolving Credit Facility, as defined below, under the Credit Facility and (3) pay all fees and expenses related to the issuance of the Senior Notes due 2028.

Credit Facility

On May 24, 2018, we and certain of our subsidiaries entered into a credit agreement (the "Credit Facility") with Wells Fargo Bank, N.A., as administrative agent, and the other lenders party thereto.

The Credit Facility includes a $ 500.0 million senior secured revolving credit facility (the "Revolving Credit Facility"), a $ 50.0 million U.S.

On March 24, 2020, we entered into an Amendment No.

1 to Credit Agreement (the "Amendment"), which amended the Credit Facility with Wells Fargo Bank, N.A., as administrative agent, and the other lenders party thereto.

The Credit Facility originally provided for a $ 500 million senior secured revolving credit facility (the "Revolving Credit Facility"), a $ 50 million U.S.

dollar senior secured term loan A made available to the Company (the "USD Term Loan") and a $ 250 million (U.S.

dollar equivalent) Canadian dollar senior secured term loan A made available to BWXT Canada Ltd.

(the "CAD Term Loan").

All obligations under the Credit Facility are scheduled to mature on May 24, 2023.

The proceeds of loans under the Credit Facility are available for working capital needs 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 million and (b) 65 % of EBITDA, as defined in the Credit Facility, for the last four full fiscal quarters, plus (2) all voluntary prepayments of 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 "CAD Term Loan" and together with the USD Term Loan, the "Term Loans").

On June 12, 2020, we repaid in full the Term Loans, at par, with a portion of the proceeds from the issuance of the Senior Notes due 2028.

The Amendment, among other things, (1) provided additional commitments to increase the Revolving Credit Facility by $ 250 million, such that the Revolving Credit Facility is now $ 750 million;

(2) extended the maturity date of the Revolving Credit Facility to March 24, 2025;

(3) removed BWXT Canada Ltd.

as a borrower under the Revolving Credit Facility;

(4) modified the applicable margin for borrowings under the Revolving Credit Facility to be, at the Company's option, either (i) the Eurocurrency rate plus a margin ranging from 1.0 % to 1.75 % per year or (ii) the base rate plus a margin ranging from 0.0 % to 0.75 % per year, in each case depending on the Company's leverage ratio;

(5) modified the commitment fee on the unused portion of the Revolving Credit Facility to range from 0.15 % to 0.225 % per year, depending on the Company's leverage ratio;

and (6) modified the letter of credit fee with respect to each financial letter of credit and performance letter of credit issued under the Revolving Credit Facility to range from 1.0 % to 1.75 % and 0.75 % to 1.05 % per year, respectively, in each case, depending on the Company's leverage ratio.

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 million and (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 obligations of BWXT Canada Ltd.

under the Credit Facility are guaranteed, subject to certain exceptions, by substantially all of the Company's present and future wholly owned Canadian and domestic restricted subsidiaries.

The Credit Facility is secured by first-priority liens on certain assets owned by the Company (other than its subsidiaries comprising its Nuclear Operations Group segment and a portion of its Nuclear Services Group segment);

provided that (1) the Company's domestic obligations are only secured by assets and property of the domestic loan parties and (2) the obligations of BWXT Canada Ltd.

and the Canadian guarantors are secured by assets and property of the Canadian guarantors and the domestic loan parties.

The Credit Facility requires interest payments on revolving loans on a periodic basis until maturity.

We began making quarterly amortization payments on the USD Term Loan and the CAD Term Loan in amounts equal to 1.25 % of the initial aggregate principal amount of each term loan in the third quarter of 2018.

The Credit Facility is secured by first-priority liens on certain assets owned by the Company and its subsidiary guarantors (other than its subsidiaries comprising its Nuclear Operations Group segment and a portion of its Nuclear Services Group 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.

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As of December 31, 2020, we were in compliance with all covenants set forth in the Credit Facility.

Outstanding loans under the Credit Facility will bear interest at our option at either (1) the Eurocurrency rate plus a margin ranging from 1.25 % to 2.0 % per year or (2) the base rate or Canadian index rate, as applicable (described in the Credit Facility as the highest of (a) with respect to the base rate only, the federal funds rate plus 0.5 % , (b) the one-month Eurocurrency rate plus 1.0 % and (c) the administrative agent's prime rate or the Canadian prime rate, as applicable), plus, in each case, a margin ranging from 0.25 % to 1.0 % per year.

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.

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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 December 31, 2019 , the margin for Eurocurrency rate and base rate or Canadian index rate loans was 1.375 % and 0.375 % , respectively, the letter of credit fee for financial letters of credit and performance letters of credit was 1.375 % and 0.825 % , respectively, and the commitment fee for the unused portion of the Revolving Credit Facility was 0.175 % .

As of December 31, 2019 , borrowings outstanding totaled $ 272.2 million and $ 160.0 million under our term loans and revolving line of credit, respectively, and letters of credit issued under the Credit Facility totaled $ 67.6 million .

As a result, we had $ 272.4 million available for borrowings or to meet letter of credit requirements as of December 31, 2019 .

As of December 31, 2019 , the weighted-average interest rate on outstanding borrowings under our Credit Facility was 3.29 % .

The Credit Facility generally includes customary events of default for a secured credit facility, some of which allow for an opportunity to cure.

Under the Credit Facility, (1) if an event of default relating to bankruptcy or other insolvency events occurs, all related obligations will immediately become due and payable;

Based on the leverage ratio applicable at December 31, 2020, the margin for Eurocurrency rate and base rate revolving loans was 1.25 % and 0.25 %, respectively, the letter of credit fee for financial letters of credit and performance letters of credit was 1.25 % and 0.825 %, respectively, and the commitment fee for the unused portion of the Revolving Credit Facility was 0.175 %.

As of December 31, 2020, borrowings and letters of credit issued under the Revolving Credit Facility totaled $ 75.0 million and $ 68.3 million, respectively.

As a result, as of December 31, 2020 we had $ 606.7 million available under the Revolving Credit Facility for borrowings and to meet letter of credit requirements.

As of December 31, 2020, the interest rate on outstanding borrowings under our Credit Facility was 1.41 %.

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;

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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.

We issued $ 400.0 million aggregate principal amount of 5.375 % senior notes due 2026 (the "Senior Notes") pursuant to an indenture dated May 24, 2018 (the "Indenture"), among the Company, certain of our subsidiaries, as guarantors, and U.S.

Senior Notes due 2026

On May 24, 2018, we issued $ 400 million aggregate principal amount of 5.375 % senior notes due 2026 (the "Senior Notes due 2026") pursuant to an indenture dated May 24, 2018 (the "2018 Indenture"), among the Company, certain of our subsidiaries, as guarantors, and U.S.

Bank National Association, as trustee.

The Senior Notes 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 is payable semi-annually in cash in arrears on January 15 and July 15 of each year, which commenced on July 15, 2018, at a rate of 5.375 % per annum.

The Senior Notes will mature on July 15, 2026.

On and after July 15, 2021, the Company may redeem the Senior Notes, in whole or in part, at a redemption price equal to (i) 102.688 % of the principal amount to be redeemed if the redemption occurs during the twelve-month period beginning on July 15, 2021, (ii) 101.344 % of the principal amount to be redeemed if the redemption occurs during the twelve-month period beginning on July 15, 2022 and (iii) 100.0 % of the principal amount to be redeemed if the redemption occurs on or after July 15, 2023, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

At any time prior to July 15, 2021, the Company may also redeem up to 40.0 % of the Senior Notes with net cash proceeds of certain equity offerings at a redemption price equal to 105.375 % of the principal amount of the Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

In addition, at any time prior to July 15, 2021, the Company may redeem the Senior Notes, in whole or in part, at a redemption price equal to 100.0 % of the principal amount of the Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date plus an applicable "make-whole" premium.

The Indenture contains customary events of default, including, among other things, payment default, failure to comply with covenants or agreements contained in the Indenture or the Senior Notes and certain provisions related to bankruptcy events.

The Senior Notes due 2026 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 due 2026 is payable semi-annually in cash in arrears on January 15 and July 15 of each year at a rate of 5.375 % per annum.

The Senior Notes due 2026 will mature on July 15, 2026.

On and after July 15, 2021, we may redeem the Senior Notes due 2026, in whole or in part, at a redemption price equal to (i) 102.688 % of the principal amount to be redeemed if the redemption occurs during the twelve-month period beginning on July 15, 2021, (ii) 101.344 % of the principal amount to be redeemed if the redemption occurs during the twelve-month period beginning on July 15, 2022 and (iii) 100.0 % of the principal amount to be redeemed if the redemption occurs on or after July 15, 2023, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

At any time prior to July 15, 2021, we may also redeem up to 40.0 % of the Senior Notes due 2026 with net cash proceeds of certain equity offerings at a redemption price equal to 105.375 % of the principal amount of the Senior Notes due 2026 to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

In addition, at any time prior to July 15, 2021, we may redeem the Senior Notes due 2026, in whole or in part, at a redemption price equal to 100.0 % of the principal amount of the Senior Notes due 2026 to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date plus an applicable "make-whole" premium.

The 2018 Indenture contains customary events of default, including, among other things, payment default, failure to comply with covenants or agreements contained in the 2018 Indenture or the Senior Notes due 2026 and certain provisions related to bankruptcy events.

The 2018 Indenture also contains customary negative covenants.

As of December 31, 2019 , we were in compliance with all covenants and agreements set forth in the Indenture and the Senior Notes.

As of December 31, 2020, we were in compliance with all covenants set forth in the 2018 Indenture and the Senior Notes due 2026.

Senior Notes due 2028

On June 12, 2020, we issued $ 400 million aggregate principal amount of our Senior Notes due 2028 pursuant to the 2020 Indenture.

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 due 2028 is payable semi-annually in cash in arrears on June 30 and December 30 of each year at a rate of 4.125 % per annum.

The Senior Notes due 2028 will mature on June 30, 2028.

We may redeem the Senior Notes due 2028, in whole or in part, at any time on or after June 30, 2023 at 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, 2024 and (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 December 31, 2020, we were in compliance with all covenants set forth in the 2020 Indenture and the Senior Notes due 2028.

Other Arrangements

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.

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.

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We have historically provided defined benefit retirement benefits, primarily through noncontributory pension plans, for most of our regular employees.

Certain of our subsidiaries have made other benefits available to certain groups of employees, including postretirement health care and life insurance benefits.

Certain of our subsidiaries have made other benefits available to certain groups of employees,

including postretirement health care and life insurance benefits.

For salaried employees, all major U.S.

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Pension Benefits

Year Ended December 31,

Other Benefits

Year Ended December 31, Other Benefits

Year Ended December 31,

2020 2019 2020 2019

(In thousands)

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Benefit obligation at beginning of period

$ 1,308,798 $ 1,186,186 $ 58,881 $ 60,405

10,650 9,123 642 545

Interest cost

37,199 46,307 1,612 2,254

Plan participants' contributions

180 321 562 550

2,333 5,523 — —

( 7,041 ) ( 25,694 ) — —

Actuarial loss (gain)

120,126 139,909 2,219 ( 2,427 )

Foreign currency exchange rate changes

3,513 6,027 331 462

Benefits paid

( 61,703 ) ( 58,904 ) ( 3,161 ) ( 2,908 )

Benefit obligation at end of period

$ 1,414,055 $ 1,308,798 $ 61,086 $ 58,881

Change in plan assets:

Fair value of plan assets at beginning of period

$ 1,150,495 $ 1,024,091 $ 48,321 $ 43,945

Actual return on plan assets

190,862 195,846 5,293 5,688

Plan participants' contributions

180 321 562 550

Company contributions

5,131 4,284 992 915

( 7,041 ) ( 21,191 ) — —

Foreign currency exchange rate changes

3,308 6,048 — —

Benefits paid

( 61,703 ) ( 58,904 ) ( 3,091 ) ( 2,777 )

Fair value of plan assets at the end of period

1,281,232 1,150,495 52,077 48,321

Funded status

$ ( 132,823 ) $ ( 158,303 ) $ ( 9,009 ) $ ( 10,560 )

Amounts recognized in the balance sheet consist of:

Prepaid postretirement benefit obligation

$ — $ — $ 18,069 $ 14,012

Prepaid pension

14,588 16,936 — —

Accrued employee benefits

( 3,082 ) ( 3,218 ) ( 1,389 ) ( 1,313 )

Accumulated postretirement benefit obligation

— — ( 25,689 ) ( 23,259 )

Pension liability

( 144,329 ) ( 172,021 ) — —

Accrued benefit liability, net

$ ( 132,823 ) $ ( 158,303 ) $ ( 9,009 ) $ ( 10,560 )

Amount recognized in accumulated comprehensive income (before taxes):

Prior service cost (credit)

$ 21,319 $ 22,356 $ ( 1,059 ) $ ( 1,252 )

Supplemental information:

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Projected benefit obligation

$ 1,264,764 $ 1,167,257 N/A N/A

Accumulated benefit obligation

$ 1,255,899 $ 1,153,811 $ 24,593 $ 22,316

Fair value of plan assets

$ 1,117,353 $ 992,018 $ — $ —

Plans with plan assets in excess of accumulated benefit obligation:

Projected benefit obligation

$ 149,291 $ 141,541 N/A N/A

Accumulated benefit obligation

$ 149,270 $ 141,497 $ 36,493 $ 36,565

Fair value of plan assets

$ 163,879 $ 158,477 $ 52,077 $ 48,321

We record the service cost component of net periodic benefit cost within Operating income on our consolidated statements of income.

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Pension Benefits

Year Ended December 31,

Other Benefits

Year Ended December 31, Other Benefits

Year Ended December 31,

2020 2019 2018 2020 2019 2018

(In thousands)

Components of net periodic benefit cost:

$ 10,650 $ 9,123 $ 9,593 $ 642 $ 545 $ 620

Interest cost

37,199 46,307 47,496 1,612 2,254 2,121

Expected return on plan assets

( 77,298 ) ( 69,809 ) ( 80,939 ) ( 2,691 ) ( 2,514 ) ( 2,540 )

Amortization of prior service cost

3,370 2,903 2,221 ( 193 ) ( 311 ) ( 311 )

Recognized net actuarial loss (gain)

6,829 9,353 36,738 ( 458 ) ( 5,723 ) ( 4,094 )

Net periodic benefit cost (income)

$ ( 19,250 ) $ ( 2,123 ) $ 15,109 $ ( 1,088 ) $ ( 5,749 ) $ ( 4,204 )

Net periodic benefit cost related to our pension plans is calculated in accordance with GAAP.

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Recognized net actuarial losses (gains) consist primarily of our reported actuarial losses (gains), settlements, and the differences between the actual returns on plan assets and the expected returns on plan assets.

The benefit obligation of our pension plans as of December 31, 2020 and 2019 increased by $ 124.2 million and $ 156.8 million, respectively, due primarily to decreases in the discount rate.

In July 2018, we completed the purchase of a group annuity contract that transferred certain domestic pension benefit obligations of approximately $ 240 million to an insurance company for approximately 1,300 retirees.

As a result, we recognized pension settlement-related charges of $ 10.4 million during 2018.

In October 2017, we completed the purchase of a group annuity contract that transferred certain domestic pension benefit obligations totaling $ 113.6 million to an insurance company for approximately 2,300 retirees.

As a result, we recognized pension settlement-related charges of $ 3.8 million during 2017.

We made contributions to our pension and postretirement benefit plans totaling $ 159.0 million during the year ended December 31, 2018.

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Pension Benefits

Year Ended December 31,

Other Benefits

Year Ended December 31, Other Benefits

Year Ended December 31,

2020 2019 2020 2019

(In thousands)

Decrease in accumulated other comprehensive income due to actuarial losses – before taxes

$ ( 2,333 ) $ ( 5,523 ) $ — $ —

In the current fiscal year, we have recognized expense (income) in other comprehensive income as a component of net periodic benefit cost of approximately $ 3.4 million and $( 0.2 ) million for our pension benefits and other benefits, respectively.

In the next fiscal year, we expect to recognize expense (income) in other comprehensive income as a component of net periodic benefit cost of approximately $ 4.1 million and $( 0.2 ) million for our pension benefits and other benefits, respectively.

Pension Benefits

Other Benefits

Pension Benefits Other Benefits

2020 2019 2020 2019

Weighted-average assumptions used to determine net periodic benefit obligations at December 31:

Discount rate

Pension Benefits

Other Benefits

2.63 % 3.31 % 2.49 % 3.21 %

Pension Benefits Other Benefits

2020 2019 2018 2020 2019 2018

Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:

Discount rate to determine service cost

3.00 % 3.74 % 3.32 % 3.01 % 3.93 % 3.91 %

Discount rate to determine interest cost

2.78 % 3.98 % 3.56 % 2.62 % 3.92 % 3.50 %

Expected return on plan assets

6.95 % 6.95 % 6.95 % 5.66 % 5.68 % 5.70 %

The expected return on plan assets rate assumptions are based on the long-term expected returns for the investment mix of assets in the portfolio.

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Historical real return trends for the various asset classes in the plan's portfolio are combined with anticipated future market conditions to estimate the real rate of return for each asset class.

These rates are then adjusted for anticipated future inflation to estimate nominal rates of return for each class.

The expected rate of return on plan assets is then determined to be the weighted-average nominal return based on the weightings of the classes within the total asset portfolio.

We are using an expected return on plan assets assumption of 7.2 % for the majority of our existing pension plan assets (approximately 86 % of our total pension assets at December 31, 2019 ).

These rates are then adjusted for anticipated future inflation to estimate nominal rates of return for each asset class.

The expected rate of return on plan assets is then determined to be the weighted-average nominal return based on the weightings of the asset classes within the total asset portfolio.

Our existing other benefit plans are unfunded, with the exception of the NFS postretirement benefit plans.

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Year that the rate reaches ultimate trend rate 2030 2030

Assumed health care cost trend rates have a significant effect on the amounts we report for our health care plan.

A one-percentage-point change in our assumed health care cost trend rates would have the following effects:

One-Percentage-

Point Increase

One-Percentage-

Point Decrease

(In thousands)

Effect on total of service and interest cost

Effect on postretirement benefit obligation

Investment Goals

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Allocations to each asset class for both domestic and foreign plans are reviewed periodically and rebalanced, if appropriate, to assure the continued relevance of the goals, objectives and strategies.

The pension trusts for both our domestic

and foreign plans employ a professional investment advisor and a number of professional investment managers whose individual benchmarks are, in the aggregate, consistent with the plan's overall investment objectives.

The pension trusts for both our domestic and foreign plans employ a professional investment advisor and a number of professional investment managers whose individual benchmarks are, in the aggregate, consistent with the plan's overall investment objectives.

The goals of each investment manager are (1) to meet (in the case of passive accounts) or exceed (for actively managed accounts) the benchmark selected and agreed upon by the manager and the pension trust and (2) to display an overall level of risk in its portfolio that is consistent with the risk associated with the agreed upon benchmark.

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Domestic Plans

We sponsor the following domestic defined benefit plans:

We sponsor the following domestic defined benefit pension plans:

• BWXT Retirement Plan;

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Asset Category:

Fixed Income (excluding U.S.

Government Securities)

Commingled and Mutual Funds 29 % 27 %

Government Securities 28 % 22 %

Fixed Income (excluding U.S.

Government Securities) 18 % 33 %

Diversified Credit 11 % 5 %

Real Estate 7 % 7 %

Partnerships with Security Holdings 4 % 5 %

Other 3 % 1 %

Total 100 % 100 %

The target allocation for 2021 for the domestic plans, by asset class, is as follows:

Fixed Income 49 %

Equities 28 %

Foreign Plans

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Asset Category:

Fixed Income 98 % 62 %

Equity Securities and Commingled Mutual Funds — % 35 %

The target allocation for 2020 for the Canadian plans, by asset class, is as follows:

Global Equity

Other 2 % 3 %

Total 100 % 100 %

The target allocation for 2021 for the Canadian plans, by asset class, is entirely fixed income securities.

See Note 14 for a detailed description of fair value measurements and the hierarchy established for valuation inputs.

The following is a summary of total investments for our plans measured at fair value at December 31, 2019 :

The following is a summary of total assets for our plans measured at fair value at December 31, 2020:

12/31/2020 Level 1 Level 2 Level 3 Unclassified

(In thousands)

Pension and Other Benefits:

Fixed Income $ 391,418 $ — $ 228,857 $ — $ 162,561

Commingled and Mutual Funds 338,473 72,764 — — 265,709

Government Securities 316,375 310,975 5,400 — —

Diversified Credit 126,823 — — — 126,823

Real Estate 77,437 — — — 77,437

Partnerships with Security Holdings 49,007 — — — 49,007

Cash and Accrued Items (1)

The following is a summary of total investments for our plans measured at fair value at December 31, 2018 :

33,776 — — — 33,776

Total Assets $ 1,333,309 $ 383,739 $ 234,257 $ — $ 715,313

(1) Includes items that are not required to be categorized in the fair value hierarchy in order to permit reconciliation of the fair value hierarchy to the fair value of plan assets presented in the Obligations and Funded Status table.

The following is a summary of total assets for our plans measured at fair value at December 31, 2019:

12/31/2019 Level 1 Level 2 Level 3 Unclassified

(In thousands)

Pension and Other Benefits:

Fixed Income $ 453,390 $ — $ 355,064 $ — $ 98,326

Commingled and Mutual Funds 334,786 58,161 — — 276,625

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Partnerships with Security Holdings 52,840 — — — 52,840

Real Estate 65,821 — — — 65,821

Other 47,550 — — — 47,550

Cash and Accrued Items 23,823 17,180 6,643 — —

In accordance with FASB Topic Fair Value Measurements , certain investments that were measured at net asset value per share (or its equivalent) ("NAV") have not been classified in the fair value hierarchy.

These investments are measured on the fair value of the underlying investments but may not be redeemable at that fair value.

When appropriate, we adjust these net

asset values for contributions and distributions, if any, made during the period beginning on the latest NAV valuation date and ending on our measurement date.

We also consider available market data, relevant index returns, preliminary estimates from our investees and other data obtained through research and consultation with third-party advisors in determining the fair value of these investments.

Domestic Plans

Foreign Plans

Total Assets $ 1,198,816 $ 291,641 $ 366,013 $ — $ 541,162

Domestic Plans Foreign Plans

Benefits Other

Benefits Pension

Benefits Other

(In thousands)

Expected employer contributions to trusts of defined benefit plans:

2021 $ — $ 90 $ 1,827 N/A

Expected benefit payments:

2021 $ 59,656 $ 2,736 $ 7,007 $ 507

2022 $ 61,903 $ 2,812 $ 7,237 $ 509

2023 $ 63,795 $ 2,819 $ 7,353 $ 539

2024 $ 65,255 $ 2,841 $ 7,469 $ 549

2025 $ 66,330 $ 2,827 $ 7,578 $ 578

2026-2030 $ 336,783 $ 12,950 $ 38,756 $ 3,322

Defined Contribution Plans

We also provide benefits under the BWXT Thrift Plan (the "Thrift Plan").

The Thrift Plan generally provides for matching employer contributions of 50 % of the first 6 % of compensation, as defined in the Thrift Plan, contributed by participants, and fully vest and are nonforfeitable after three years of service or upon retirement, death, lay-off or approved disability.

The Thrift Plan generally provides for matching employer contributions of 50 % of the first 6 % of compensation, as defined in the Thrift Plan, contributed by

participants, and fully vest and are nonforfeitable after three years of service or upon retirement, death, lay-off or approved disability.

These matching employer contributions are made in cash and invested at the employees' discretion.

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On November 6, 2018, our Board of Directors authorized an additional share repurchase of up to an aggregate market value of $ 250 million during a three-year period from November 6, 2018 to November 6, 2021.

On September 15, 2016, we entered into a $ 200 million accelerated share repurchase agreement (the "ASR Agreement") with Wells Fargo Bank, National Association ("Wells Fargo").

Pursuant to the terms of the ASR Agreement, on September 16, 2016, we paid Wells Fargo $ 200 million in cash and received 4,135,435 shares of BWXT common stock.

On March 24, 2017, the final settlement of the ASR Agreement was completed, and we received an additional 846,568 shares of BWXT common stock.

The total number of shares repurchased under the ASR Agreement was 4,982,003 shares at an average price of $ 40.14 per share based on the volume-weighted average stock price of BWXT common stock traded during the term of the ASR Agreement, less a customary discount.

We immediately reduced the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share as of the dates the initial and final repurchases of shares were physically delivered.

The ASR Agreement was accounted for as a treasury stock transaction and forward stock purchase contract.

The shares were recorded in treasury stock on our consolidated balance sheets.

The forward stock purchase contract was indexed to BWXT's own stock and classified as an equity instrument.

In the year ended December 31, 2020, we repurchased 338,521 shares of our common stock for $ 22.0 million.

In the year ended December 31, 2019, we repurchased 443,877 shares of our common stock for $ 20.0 million.

In the year ended December 31, 2018, we repurchased 4,523,934 shares of our common stock for approximately $ 214.7 million.

In the year ended December 31, 2017, we received 846,568 shares under the final settlement of the ASR Agreement and made no other share repurchases.

As of December 31, 2020, we had approximately $ 143.4 million available to us for share repurchase under the $ 250 million authorization described above.

NOTE 9 – STOCK-BASED COMPENSATION

2010 Long-Term Incentive Plan of BWX Technologies, Inc.

Members of the Board of Directors, executive officers, key employees and consultants are eligible to participate in the 2010 Long-Term Incentive Plan of BWX Technologies, Inc.

BWX Technologies, Inc.

2020 Omnibus Incentive Plan

In May 2020, our stockholders approved the 2020 Omnibus Incentive Plan (the "2020 Plan") which succeeded the 2010 Long-Term Incentive Plan of BWX Technologies, Inc.

(the "2010 Plan").

Members of the Board of Directors, executive officers, key employees and consultants are eligible to participate in the 2020 Plan.

The Compensation Committee of the Board of Directors selects the participants for the 2020 Plan.

The Plan provides for a number of forms of stock-based compensation, including incentive and non-qualified stock options, restricted stock, restricted stock units, performance shares and performance units, subject to satisfaction of specific performance goals.

Shares subject to awards under the Plan that are cancelled, forfeited, terminated or expire unexercised, shall immediately become available for the granting of awards under the Plan.

As part of the approval of the Plan, 10,000,000 shares of common stock were initially authorized for issuance through the Plan, with an additional 2,300,000 authorized for issuance in 2014.

The 2020 Plan provides for cash awards and equity-based compensation in the form of stock options, restricted stock, restricted stock units, performance shares and performance units, subject to satisfaction of specific performance goals.

Shares subject to awards under either the 2020 Plan or the 2010 Plan that are cancelled, forfeited, terminated or expire unexercised, shall immediately become available for the granting of awards under the 2020 Plan.

As of the effective date of the 2020 Plan, shares available for grant under the 2010 Plan are available for grant under the 2020 Plan.

In addition, our stockholders approved an additional 1,450,000 shares of common stock for issuance through the 2020 Plan.

Options to purchase shares are granted at not less than 100 % of the fair market value closing price on the date of grant, become exercisable at such time or times as determined when granted and expire not more than ten years after the date of grant.

At December 31, 2019 , we had awarded 9,109,541 shares under the Plan and had a total of 3,190,459 shares of our common stock available for future awards.

At December 31, 2020, we had a total of 4,333,710 shares of our common stock available for future awards.

In the event of a change in control of the Company, the terms of the awards under the 2020 Plan contain provisions that may cause restrictions to lapse and accelerate the vesting of awards.

2010 Long-Term Incentive Plan of BWX Technologies, Inc.

Members of the Board of Directors, executive officers, key employees and consultants were eligible to participate in the 2010 Plan prior to it being succeeded by the 2020 Plan.

The Compensation Committee of the Board of Directors selected the participants for the 2010 Plan.

The 2010 Plan provided for a number of forms of stock-based compensation, including incentive and non-qualified stock options, restricted stock, restricted stock units, performance shares and performance units, subject to satisfaction of specific performance goals.

Shares subject to award under the 2010 Plan that are cancelled, forfeited, terminated or expire unexercised, shall immediately become available for the granting of awards under the 2020 Plan.

As part of the approval of the 2010 Plan, 10,000,000 shares of common stock were initially authorized for issuance, with an additional 2,300,000 authorized for issuance in 2014.

Long-Term Incentive Plan of BWXT Technical Services Group, Inc.

In June 2012, we established the 2012 Long-Term Incentive Plan of BWXT Technical Services Group, Inc., a cash-settled plan for employees of certain subsidiaries and unconsolidated affiliates as selected by the plan committee.

The cash-settled plan provides for a number of forms of stock-based compensation, including stock appreciation rights, restricted stock units and performance units, subject to satisfaction of specific performance goals.

settled plan provides for a number of forms of stock-based compensation, including stock appreciation rights, restricted stock units and performance units, subject to satisfaction of specific performance goals.

Stock appreciation rights are granted at not less than 100 % of the fair market value closing price of a share of BWXT common stock on the date of grant, become exercisable at such time or times as determined when granted and expire not more than ten years after the date of grant.

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Stock-based compensation expense for all of our plans recognized for the years ended December 31, 2020, 2019 and 2018 totaled $ 16.8 million, $ 14.8 million and $ 10.8 million, respectively, with associated tax benefit totaling $ 2.7 million, $ 2.5 million and $ 1.7 million, respectively.

Included in stock-based compensation expense for the year ended December 31, 2017 is $ 2.5 million associated with an executive reorganization that resulted in the acceleration of previously granted equity awards.

As of December 31, 2020, unrecognized estimated compensation expense related to nonvested awards was $ 15.1 million, which is expected to be recognized over a weighted-average period of 1.6 years.

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The following table summarizes activity for our stock options for the year ended December 31, 2020 (share data in thousands):

Shares Weighted-

Price Weighted-

Term Aggregate

(In millions)

Outstanding at beginning of period 324 $ 23.91

Cancelled/expired/forfeited

Outstanding at end of period

Exercisable at end of period

Granted — N/A

Exercised ( 123 ) $ 23.64

Cancelled/expired/forfeited — N/A

Outstanding at end of period 201 $ 24.07 2.9 years $ 7.3

Exercisable at end of period 201 $ 24.07 2.9 years $ 7.3

The aggregate intrinsic value included in the table above represents the total pre-tax intrinsic value that would have been received by the option holders had all option holders exercised their options on December 31, 2020.

5 unchanged sentences

Nonvested performance shares as of December 31, 2020 and changes during the year ended December 31, 2020 were as follows (share data in thousands):

Shares Weighted-

Nonvested at beginning of period 409 $ 53.39

Adjustment to assumed vesting percentage 76 $ 52.86

Granted 146 $ 56.75

Vested ( 173 ) $ 48.76

Cancelled/forfeited ( 7 ) $ 54.64

6 unchanged sentences

Nonvested restricted stock units as of December 31, 2020 and changes during the year ended December 31, 2020 were as follows (share data in thousands):

Shares Weighted-

Nonvested at beginning of period 166 $ 54.51

Granted 120 $ 56.70

Vested ( 97 ) $ 54.45

Cancelled/forfeited ( 4 ) $ 54.54

3 unchanged sentences

The following table summarizes activity for our stock appreciation rights for the year ended December 31, 2020 (unit data in thousands):

Units Weighted-

Price Weighted-

Term Aggregate

(In millions)

Outstanding at beginning of period 55 $ 23.39

Cancelled/expired/forfeited

Outstanding at end of period

Exercisable at end of period

Granted — N/A

Exercised ( 15 ) $ 21.69

Cancelled/expired/forfeited — N/A

Outstanding at end of period 40 $ 24.04 2.9 years $ 1.4

Exercisable at end of period 40 $ 24.04 2.9 years $ 1.4

The aggregate intrinsic value included in the table above represents the total pre-tax intrinsic value that would have been received by the stock appreciation rights holders had all holders exercised their rights on December 31, 2020.

20 unchanged sentences

We have not been determined to be a major contributor of wastes to any of these sites.

On the basis of our relative contribution of waste to each site, we expect our share of the ultimate liability for the various sites will not have a material adverse effect on our consolidated financial condition, results of operations or cash flows in any given year.

On the basis of the relative contribution of waste to each site by potentially responsible parties, as well as the financial solvency of other potentially responsible parties, we expect our share of the ultimate liability for the various sites will not have a material adverse effect on our consolidated financial condition, results of operations or cash flows in any given year.

We perform significant amounts of work for the U.S.

4 unchanged sentences

The NRC's decommissioning regulations require our Nuclear Operations Group segment to provide financial assurance that it will be able to pay the expected cost of decommissioning its two licensed facilities at the end of their service lives.

We provided financial assurance totaling $ 61.8 million and $ 56.2 million during the years ended December 31, 2019 and 2018 respectively, with surety bonds for the ultimate decommissioning of these licensed facilities.

We provided financial assurance totaling $ 61.8 million during the years ended December 31, 2020 and 2019 with surety bonds for

the ultimate decommissioning of these licensed facilities.

These facilities have provisions in their government contracts pursuant to which substantially all of our decommissioning costs and financial assurance obligations are covered by the DOE, including the costs to complete the decommissioning projects underway at the facility in Erwin, Tennessee.

These surety bonds are to cover decommissioning required pursuant to work not subject to this DOE obligation.

The surety bonds noted above are to cover decommissioning required pursuant to work not subject to this DOE obligation.

In Canada, the CNSC's decommissioning regulations require our Nuclear Power Group segment to provide financial assurance that it will be able to pay the expected cost of decommissioning its CNSC-licensed facilities at the end of their service lives.

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Our Nuclear Power Group segment's major customers are large utilities.

These concentrations of customers may impact our overall exposure to credit risk, either positively or negatively, in that our customers may be similarly affected by changes in economic or other conditions.

These concentrations of customers may impact our overall exposure to credit risk, either positively or negatively, in that our customers may be

similarly affected by changes in economic or other conditions.

In the years ended December 31, 2020, 2019 and 2018, U.S.

4 unchanged sentences

We believe that our provision for possible losses on uncollectable accounts receivable is adequate for our credit loss exposure.

At December 31, 2019 and 2018 , the allowances for possible losses that we deducted from Accounts receivable – trade, net on our consolidated balance sheets were $ 0.2 million and $ 0.1 million , respectively.

At December 31, 2020 and 2019, the allowances for possible losses that we deducted from Accounts receivable – trade, net on our consolidated balance sheets were $ 0.2 million.

NOTE 13 – INVESTMENTS

The following is a summary of our investments at December 31, 2020:

Losses Estimated

(In thousands)

Equity securities

$ 172 $ 628 $ — $ 800

5,323 1,432 — 6,755

Available-for-sale securities

Government and agency securities

2,317 1 ( 4 ) 2,314

Corporate bonds

2,879 259 ( 6 ) 3,132

Asset-backed securities and collateralized mortgage obligations

115 — ( 53 ) 62

$ 10,806 $ 2,320 $ ( 63 ) $ 13,063

The following is a summary of our investments at December 31, 2019:

Losses Estimated

(In thousands)

Equity securities

$ 417 $ 1,755 $ — $ 2,172

4,988 697 — 5,685

Available-for-sale securities

Government and agency securities

2,039 5 — 2,044

Corporate bonds

3,103 380 — 3,483

Asset-backed securities and collateralized mortgage obligations

Proceeds, gross realized gains and gross realized losses on sales of available-for-sale securities were as follows:

(In thousands)

Year Ended December 31, 2019

Year Ended December 31, 2018

Year Ended December 31, 2017

132 — ( 53 ) 79

$ 10,679 $ 2,837 $ ( 53 ) $ 13,463

NOTE 14 – FAIR VALUE MEASUREMENTS

4 unchanged sentences

• Level 1 – inputs are based upon quoted prices for identical instruments traded in active markets.

Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for similar or identical instruments in inactive markets and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets and liabilities.

• Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for similar or identical instruments in inactive markets and model-based valuation techniques for which all significant assumptions

are observable in the market or can be corroborated by observable market data for substantially the full term of the assets and liabilities.

• Level 3 – inputs are generally unobservable and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability.

The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar valuation techniques.

These investments are measured on the fair value of the underlying investments but may not be redeemable at that fair value.

When appropriate, we adjust these net asset values for contributions and distributions, if any, made during the period beginning on the latest NAV valuation date and ending on our measurement date.

The following sections describe the valuation methodologies we use to measure the fair values of our investments, derivatives and nonrecurring fair value measurements.

5 unchanged sentences

The following is a summary of our investments measured at fair value at December 31, 2020:

12/31/2020 Level 1 Level 2 Level 3 Unclassified

(In thousands)

Equity securities

$ 800 $ — $ — $ 800 $ —

6,755 — 6,755 — —

Available-for-sale securities

Government and agency securities

2,314 2,314 — — —

Corporate bonds

3,132 1,738 1,394 — —

Asset-backed securities and collateralized mortgage obligations

$ 13,063 $ 4,052 $ 8,211 $ 800 $ —

The following is a summary of our investments measured at fair value at December 31, 2019:

12/31/2019 Level 1 Level 2 Level 3 Unclassified

(In thousands)

Equity securities

$ 2,172 $ — $ 2,172 $ — $ —

5,685 — 5,685 — —

Available-for-sale securities

Government and agency securities

2,044 2,044 — — —

Corporate bonds

3,483 1,855 1,628 — —

Asset-backed securities and collateralized mortgage obligations

$ 13,463 $ 3,899 $ 9,564 $ — $ —

Level 2 derivative assets and liabilities currently consist of FX forward contracts.

Where applicable, the value of these derivative assets and liabilities is computed by discounting the projected future cash flow amounts to present value using market-based observable inputs, including FX forward and spot rates, interest rates and counterparty performance risk adjustments.

At December 31, 2019 and 2018 , we had forward contracts outstanding to purchase or sell foreign currencies, primarily Canadian dollars and Euros, with a total fair value of $( 0.8 ) million and $ 0.7 million , respectively.

At December 31, 2020 and 2019, we had FX forward contracts outstanding to purchase or sell foreign currencies, primarily Canadian dollars and Euros, with a total fair value of $( 2.2 ) million and $( 0.8 ) million, respectively.

Other Financial Instruments

5 unchanged sentences

Where quoted prices are not available, we base the fair values on the present value of future cash flows discounted at estimated borrowing rates for similar debt instruments or on estimated prices based on current yields for debt issues of similar quality and terms.

At December 31, 2019 and 2018 , the fair value of our Senior Notes was $ 423.5 million and $ 384.9 million , respectively.

At December 31, 2020 and 2019, the fair values of our Senior Notes due 2026 were $ 415.5 million and $ 423.5 million, respectively.

At December 31, 2020, the fair value of our Senior Notes due 2028 was $ 416.7 million.

The fair value of our remaining debt instruments approximated their carrying values at December 31, 2020 and 2019.

2 unchanged sentences

The operations of our segments are managed separately, and each segment has unique technology, services and customer classes.

We account for intersegment sales at prices that we generally establish by reference to similar transactions with unaffiliated customers.

We account for intersegment

sales at prices that we generally establish by reference to similar transactions with unaffiliated customers.

Reportable segments are measured based on operating income exclusive of general corporate expenses and gains (losses) on sales of corporate assets.

1 unchanged sentence

Year Ended December 31,

2020 2019 2018

(In thousands)

REVENUES (1) :

Nuclear Operations Group $ 1,646,257 $ 1,428,587 $ 1,319,170

1 unchanged sentence

Nuclear Services Group 136,493 131,339 122,438

Eliminations (1)

( 30,503 ) ( 17,646 ) ( 7,630 )

$ 2,123,516 $ 1,894,920 $ 1,799,889

(1) Segment revenues are net of the following intersegment transfers:

2 unchanged sentences

Nuclear Services Group Transfers ( 26,159 ) ( 13,056 ) ( 3,318 )

$ ( 30,503 ) $ ( 17,646 ) $ ( 7,630 )

OPERATING INCOME:

2 unchanged sentences

Nuclear Services Group 26,436 14,226 20,374

Other ( 22,309 ) ( 23,099 ) ( 18,074 )

$ 382,165 $ 343,270 $ 325,975

Unallocated Corporate (1)

( 23,613 ) ( 17,749 ) ( 20,998 )

Total Operating Income (2)

$ 358,552 $ 325,521 $ 304,977

Other Income (Expense) 3,620 ( 11,779 ) ( 24,832 )

6 unchanged sentences

Nuclear Services Group 328 2,727 —

Other — — 467

Unallocated Corporate — — ( 224 )

$ ( 1,361 ) $ 2,824 $ 64

Equity in Income of Investees :

2 unchanged sentences

Nuclear Services Group 27,152 28,924 30,343

$ 27,152 $ 28,924 $ 30,343

Year Ended December 31,

2020 2019 2018

(In thousands)

3 unchanged sentences

Nuclear Services Group 1,326 1,169 974

Other 252 2,597 2,780

Segment Capital Expenditures 243,811 175,098 101,824

5 unchanged sentences

Nuclear Services Group 1,685 3,246 3,401

Other 645 787 —

Segment Depreciation and Amortization 53,829 54,318 52,687

1 unchanged sentence

Total Depreciation and Amortization $ 60,674 $ 61,722 $ 60,097

2020 2019 2018

(In thousands)

3 unchanged sentences

Nuclear Services Group 166,240 177,952 180,441

Other 3,638 3,751 5,557

Segment Assets 2,183,348 1,748,943 1,547,519

Corporate Assets 110,155 159,970 107,577

Total Assets $ 2,293,503 $ 1,908,913 $ 1,655,096

INVESTMENT IN UNCONSOLIDATED AFFILIATES:

5 unchanged sentences

Year Ended December 31,

2020 2019 2018

(In thousands)

2 unchanged sentences

Commercial Operations 106,001 60,032 7,284

1,646,257 1,428,587 1,319,170

Nuclear Power Group:

1 unchanged sentence

Nuclear Services and Engineering 120,684 109,168 164,283

371,269 352,640 365,911

Nuclear Services Group:

Nuclear Environmental Services 94,320 102,726 96,566

Management & Operation Contracts of U.S.

Government Facilities

Nuclear Services and Advanced Reactor Design and Engineering 42,173 28,613 25,872

136,493 131,339 122,438

Eliminations ( 30,503 ) ( 17,646 ) ( 7,630 )

$ 2,123,516 $ 1,894,920 $ 1,799,889

Information about our Consolidated Operations in Different Geographic Areas:

Year Ended December 31,

2020 2019 2018

(In thousands)

REVENUES (1) :

$ 1,780,409 $ 1,572,085 $ 1,446,791

Canada 309,688 287,971 294,913

All Other Countries 33,419 34,864 58,185

$ 2,123,516 $ 1,894,920 $ 1,799,889

(1) We allocate geographic revenues based on the location of the customers' operations .

2020 2019 2018

(In thousands)

NET PROPERTY, PLANT AND EQUIPMENT:

$ 603,518 $ 494,202 $ 390,632

Canada 212,953 86,039 48,607

$ 816,471 $ 580,241 $ 439,239

Information about our Major Customers:

5 unchanged sentences

Quarter Ended

2020 June 30,

2020 September 30,

2020 December 31,

(In thousands, except per share amounts)

$ 542,208 $ 504,520 $ 519,878 $ 556,910

Operating income (1)

$ 98,267 $ 82,434 $ 88,770 $ 89,081

Equity in income of investees

$ 6,063 $ 4,913 $ 8,271 $ 7,905

Net Income Attributable to BWX Technologies, Inc.

$ 75,499 $ 64,258 $ 73,171 $ 65,742

Earnings per common share:

Net Income Attributable to BWX Technologies, Inc.

$ 0.79 $ 0.67 $ 0.77 $ 0.69

Net Income Attributable to BWX Technologies, Inc.

$ 0.79 $ 0.67 $ 0.76 $ 0.69

(1) Includes equity in income of investees.

1 unchanged sentence

Quarter Ended

2019 June 30,

2019 September 30,

2019 December 31,

(In thousands, except per share amounts)

$ 416,454 $ 471,231 $ 506,000 $ 501,235

Operating income (1)

$ 63,644 $ 80,535 $ 98,462 $ 82,880

Equity in income of investees

$ 7,682 $ 6,862 $ 7,874 $ 6,506

Net Income Attributable to BWX Technologies, Inc.

$ 48,978 $ 58,878 $ 74,810 $ 61,449

Earnings per common share:

Net Income Attributable to BWX Technologies, Inc.

$ 0.51 $ 0.62 $ 0.78 $ 0.64

Net Income Attributable to BWX Technologies, Inc.

$ 0.51 $ 0.62 $ 0.78 $ 0.64

(1) Includes equity in income of investees.

In the quarter ended September 30, 2018, we recognized $ 12.5 million of benefit in our provision for income taxes related to the remeasurement of our deferred tax assets as a result of accelerating additional contributions to certain of our domestic pension plans for inclusion in our 2017 U.S.

We immediately recognize actuarial gains (losses) for our pension and postretirement benefit plans in earnings as a component of net periodic benefit cost.

Recorded in the quarters ended December 31, 2020 and 2019, the effects of these adjustments on pre-tax income were $( 6.4 ) million and $( 3.6 ) million, respectively.

Additionally, we recorded an interim net actuarial gain of $ 35.1 million in the quarter ended September 30, 2018 as a result of the purchase of a group annuity contract to transfer certain domestic pension benefit obligations to an insurance company, which included a $ 10.4 million settlement loss and a $ 45.5 million actuarial gain.

NOTE 17 – EARNINGS PER SHARE

1 unchanged sentence

Year Ended December 31,

2020 2019 2018

(In thousands, except shares and

1 unchanged sentence

Net Income Attributable to BWX Technologies, Inc.

$ 278,670 $ 244,115 $ 226,958

Weighted-average common shares

95,457,193 95,377,414 99,062,087

Basic earnings per common share

$ 2.92 $ 2.56 $ 2.29

Net Income Attributable to BWX Technologies, Inc.

$ 278,670 $ 244,115 $ 226,958

Weighted-average common shares (basic)

95,457,193 95,377,414 99,062,087

Effect of dilutive securities:

Stock options, restricted stock units and performance shares (1)

269,304 433,124 956,966

Adjusted weighted-average common shares

95,726,497 95,810,538 100,019,053

Diluted earnings per common share

At December 31, 2019 , 2018 and 2017 , we excluded 0 , 0 and 41,854 shares, respectively, from our diluted share calculation as their effect would have been antidilutive.

$ 2.91 $ 2.55 $ 2.27

(1) At December 31, 2020, 2019 and 2018, none of our shares were antidilutive.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data