UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

__________________________________________________

FORM 10-Q

__________________________________________________

(Mark One)



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2018.~~2019.



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No. 001-34658

BWX TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

__________________________________________________



DELAWARE		80-0558025
(State of Incorporation or Organization)		(I.R.S. Employer Identification No.)

800 MAIN STREET, 4TH FLOOR
LYNCHBURG, VIRGINIA		24504
(Address of Principal Executive Offices)		(Zip Code)

Registrant's Telephone Number, Including Area Code: (980) 365-4300

__________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	ý	Accelerated filer	¨

Non-accelerated filer	¨ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	¨

Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

The number of shares of the registrant's common stock outstanding at ~~May 2, 2018~~April 29, 2019 was ~~99,679,664.~~95,149,979.

BWX TECHNOLOGIES, INC.

INDEX - FORM 10-Q




	PAGE
PART I - FINANCIAL INFORMATION

Item 1 – Condensed Consolidated Financial Statements	2

Condensed Consolidated Balance Sheets
March 31, ~~2018~~2019 and December 31, ~~2017~~2018 (Unaudited)	2

Condensed Consolidated Statements of Income
Three Months Ended March 31, ~~2018~~2019 and ~~2017~~2018 (Unaudited)	4

Condensed Consolidated Statements of Comprehensive Income
Three Months Ended March 31, ~~2018~~2019 and ~~2017~~2018 (Unaudited)	5

Condensed Consolidated Statements of Stockholders' Equity
Three Months Ended March 31, ~~2018~~2019 and ~~2017~~2018 (Unaudited)	6

Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, ~~2018~~2019 and ~~2017~~2018 (Unaudited)	7

Notes to Condensed Consolidated Financial Statements	8

Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations	2320

Item 3 – Quantitative and Qualitative Disclosures About Market Risk	3128

Item 4 – Controls and Procedures	3128

PART II - OTHER INFORMATION

Item 1 – Legal Proceedings	3229

Item 1A – Risk Factors	3229

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	3229

Item 6 – Exhibits	3330

SIGNATURES	3431

PART I

FINANCIAL INFORMATION


Item 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BWX TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS


	March 31, 2018		December 31, 2017		March 31, 2019		December 31, 2018
	(Unaudited) (In thousands)				(Unaudited) (In thousands)
Current Assets:
Cash and cash equivalents	$	143,335	$	203,404	$	22,976	$	29,871
Restricted cash and cash equivalents	5,362		7,105		4,024		3,834
Investments	1,034		2,934		3,601		3,597
Accounts receivable – trade, net	174,150		189,217		65,255		71,574
Accounts receivable – other	8,058		19,365		12,038		13,374
Retainages					72,000		57,885
Contracts in progress	337,375		420,628		351,953		318,454
Other current assets	33,536		30,437		45,717		43,859
Total Current Assets	702,850		873,090		577,564		542,448
Property, Plant and Equipment	1,023,856		1,013,141		1,150,110		1,132,392
Less accumulated depreciation	673,954		664,512		696,095		693,153
Net Property, Plant and Equipment	349,902		348,629		454,015		439,239
Investments	8,909		9,301		8,598		7,382
Goodwill	216,999		218,331		275,604		274,082
Deferred Income Taxes	84,727		86,740		61,154		63,908
Investments in Unconsolidated Affiliates	47,043		43,266		65,320		63,746
Intangible Assets	106,718		110,405		194,116		228,676
Other Assets	22,391		22,577		80,415		35,615
TOTAL	$	1,539,539	$	1,712,339	$	1,716,786	$	1,655,096

See accompanying notes to condensed consolidated financial statements.

BWX TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' EQUITY


	March 31, 2018			December 31, 2017			March 31, 2019			December 31, 2018
	(Unaudited) (In thousands, except share and per share amounts)						(Unaudited) (In thousands, except share and per share amounts)
Current Liabilities:
Current maturities of long-term debt	$	27,693		$	27,870		$	14,383		$	14,227
Accounts payable	99,224			93,421			98,455			114,751
Accrued employee benefits	57,637			82,477			56,342			77,386
Accrued liabilities – other	51,662			64,738			58,032			62,163
Advance billings on contracts	77,140			246,192			88,117			98,477
Accrued warranty expense	13,699			13,428			10,431			10,344
Total Current Liabilities	327,055			528,126			325,760			377,348
Long-Term Debt	471,367			481,059			856,005			753,617
Accumulated Postretirement Benefit Obligation	20,959			21,368			19,223			19,236
Environmental Liabilities	80,682			79,786			87,972			86,372
Pension Liability	274,801			296,444			169,939			173,469
Other Liabilities	19,425			19,799			15,013			9,353
Commitments and Contingencies (Note 4)
Commitments and Contingencies (Note 5)
Stockholders' Equity:
Common stock, par value $0.01 per share, authorized 325,000,000 shares; issued 125,722,034 and 125,381,591 shares at March 31, 2018 and December 31, 2017, respectively	1,257			1,254
Common stock, par value $0.01 per share, authorized 325,000,000 shares; issued 126,379,796 and 125,871,866 shares at March 31, 2019 and December 31, 2018, respectively							1,264			1,259
Preferred stock, par value $0.01 per share, authorized 75,000,000 shares; No shares issued	—			—			—			—
Capital in excess of par value	107,108			98,843			119,525			115,725
Retained earnings	1,053,090			990,652			1,198,198			1,166,762
Treasury stock at cost, 26,056,339 and 25,964,088 shares at March 31, 2018 and December 31, 2017, respectively	(820,749		)	(814,809		)
Treasury stock at cost, 31,243,844 and 30,625,074 shares at March 31, 2019 and December 31, 2018, respectively							(1,066,822		)	(1,037,795		)
Accumulated other comprehensive income	4,435			9,454			(9,316		)	(10,289		)
Stockholders' Equity – BWX Technologies, Inc.	345,141			285,394			242,849			235,662
Noncontrolling interest	109			363			25			39
Total Stockholders' Equity	345,250			285,757			242,874			235,701
TOTAL	$	1,539,539		$	1,712,339		$	1,716,786		$	1,655,096

See accompanying notes to condensed consolidated financial statements.

BWX TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME


	Three Months Ended March 31,						Three Months Ended March 31,
	2018			2017			2019			2018
	(Unaudited) (In thousands, except share and per share amounts)						(Unaudited) (In thousands, except share and per share amounts)
Revenues	$	457,463		$	428,229		$	416,454		$	457,463
Costs and Expenses:
Cost of operations	327,364			303,216			303,635			327,364
Research and development costs	3,607			1,519			5,174			3,607
Gains on asset disposals and impairments, net	(8		)	—
Losses (gains) on asset disposals and impairments, net							—			(8		)
Selling, general and administrative expenses	53,762			51,097			51,683			53,762
Total Costs and Expenses	384,725			355,832			360,492			384,725
Equity in Income of Investees	7,150			3,875			7,682			7,150
Operating Income	79,888			76,272			63,644			79,888
Other Income (Expense):
Interest income	778			137			415			778
Interest expense	(3,560		)	(3,517		)	(8,703		)	(3,560		)
Other – net	7,910			7,486			7,521			7,910
Total Other Income (Expense)	5,128			4,106			(767		)	5,128
Income before Provision for Income Taxes	85,016			80,378			62,877			85,016
Provision for Income Taxes	18,603			24,592			13,767			18,603
Net Income	$	66,413		$	55,786		$	49,110		$	66,413
Net (Income) Loss Attributable to Noncontrolling Interest	28			(67		)	(132		)	28
Net Income Attributable to BWX Technologies, Inc.	$	66,441		$	55,719		$	48,978		$	66,441
Earnings per Common Share:
Basic:
Net Income Attributable to BWX Technologies, Inc.	$	0.67		$	0.56		$	0.51		$	0.67
Diluted:
Net Income Attributable to BWX Technologies, Inc.	$	0.66		$	0.55		$	0.51		$	0.66
Shares used in the computation of earnings per share (Note 9):
Basic	99,526,187			99,444,910			95,255,109			99,526,187
Diluted	100,512,287			100,690,968			95,821,354			100,512,287

See accompanying notes to condensed consolidated financial statements.

BWX TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME


	Three Months Ended March 31,						Three Months Ended March 31,
	2018			2017			2019			2018
	(Unaudited) (In thousands)						(Unaudited) (In thousands)
Net Income	$	66,413		$	55,786		$	49,110		$	66,413
Other Comprehensive Income (Loss):
Currency translation adjustments	(3,124		)	791			943			(3,124		)
Derivative financial instruments:
Unrealized gains arising during the period, net of tax provision of $(59) and $(97), respectively	173			279
Reclassification adjustment for gains included in net income, net of tax provision of $30 and $13, respectively	(79		)	(37		)
Amortization of benefit plan costs, net of tax benefit of $(183) and $(156), respectively	322			290
Unrealized (losses) gains arising during the period, net of tax benefit (provision) of $164 and $(59), respectively							(441		)	173
Reclassification adjustment for gains included in net income, net of tax provision of $49 and $30, respectively							(141		)	(79		)
Amortization of benefit plan costs, net of tax benefit of $(136) and $(183), respectively							511			322
Investments:
Unrealized losses arising during the period, net of tax benefit (provision) of $0 and $(70), respectively	(66		)	(94		)
Reclassification adjustment for gains included in net income, net of tax provision of $0 and $8, respectively	—			(14		)
Unrealized gains (losses) arising during the period, net of tax provision of $(7) and $0, respectively							24			(66		)
Other Comprehensive Income (Loss)	(2,774		)	1,215			896			(2,774		)
Total Comprehensive Income	63,639			57,001			50,006			63,639
Comprehensive (Income) Loss Attributable to Noncontrolling Interest	28			(67		)
Comprehensive Income Attributable to Noncontrolling Interest							(132		)	28
Comprehensive Income Attributable to BWX Technologies, Inc.	$	63,667		$	56,934		$	49,874		$	63,667

See accompanying notes to condensed consolidated financial statements.

BWX TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


	Common Stock			Capital In Excess of Par Value							Accumulated Other Comprehensive Income (Loss)															Total Stockholders' Equity				Common Stock						Capital In Excess of Par Value							Accumulated Other Comprehensive Income (Loss)															Total Stockholders' Equity
	Shares	Par Value					Retained Earnings				Accumulated Other Comprehensive Income (Loss)			Treasury Stock				Stockholders' Equity				Noncontrolling Interest				Total Stockholders' Equity			Shares			Par Value				Capital In Excess of Par Value			Retained Earnings				Accumulated Other Comprehensive Income (Loss)			Treasury Stock				Stockholders' Equity				Noncontrolling Interest				Total Stockholders' Equity
																																	(In thousands, except share and per share amounts)
Balance December 31, 2018																														125,871,866			$	1,259		$	115,725			$	1,166,762		$	(10,289	)		$	(1,037,795	)		$	235,662			$	39		$	235,701
Recently adopted accounting standards																														—			—			—				(1,219		)	77				—				(1,142		)		—			(1,142		)
Net income																														—			—			—				48,978			—				—				48,978				132			49,110
Dividends declared ($0.17 per share)																														—			—			—				(16,323		)	—				—				(16,323		)		—			(16,323		)
Currency translation adjustments																														—			—			—				—			943				—				943				—			943
Derivative financial instruments																														—			—			—				—			(582		)		—				(582		)		—			(582		)
Defined benefit obligations																														—			—			—				—			511				—				511				—			511
Available-for-sale investments																														—			—			—				—			24				—				24				—			24
Exercises of stock options																														58,655			1			1,275				—			—				—				1,276				—			1,276
Shares placed in treasury																														—			—			—				—			—				(29,027		)		(29,027		)		—			(29,027		)
Stock-based compensation charges																														449,275			4			2,525				—			—				—				2,529				—			2,529
Distributions to noncontrolling interests																														—			—			—				—			—				—				—				(146		)	(146		)
Balance March 31, 2019 (unaudited)																														126,379,796			$	1,264		$	119,525			$	1,198,198		$	(9,316	)		$	(1,066,822	)		$	242,849			$	25		$	242,874
		(In thousands, except share and per share amounts)
Balance December 31, 2017	125,381,591	$	1,254	Capital In Excess of Par Value	$	98,843			$	990,652		$	9,454			$	(814,809	)		$	285,394			$	363		$	285,757			125,381,591			$	1,254		$	98,843			$	990,652		$	9,454			$	(814,809	)		$	285,394			$	363		$	285,757
Recently adopted accounting standards	—	—		—				12,171			(2,245		)		—				9,926				—			9,926				—			—			—				13,311			(3,385		)		—				9,926				—			9,926
Net income	—	—		—				66,441			—				—				66,441				(28		)	66,413				—			—			—				66,441			—				—				66,441				(28		)	66,413
Dividends declared ($0.16 per share)	—	—		—				(16,174		)	—				—				(16,174		)		—			(16,174		)		—			—			—				(16,174		)	—				—				(16,174		)		—			(16,174		)
Currency translation adjustments	—	—		—				—			(3,124		)		—				(3,124		)		—			(3,124		)		—			—			—				—			(3,124		)		—				(3,124		)		—			(3,124		)
Derivative financial instruments	—	—		—				—			94				—				94				—			94				—			—			—				—			94				—				94				—			94
Defined benefit obligations	—	—		—				—			322				—				322				—			322				—			—			—				—			322				—				322				—			322
Available-for-sale investments	—	—		—				—			(66		)		—				(66		)		—			(66		)		—			—			—				—			(66		)		—				(66		)		—			(66		)
Exercise of stock options	159,126	1		3,806				—			—				—				3,807				—			3,807
Exercises of stock options																														159,126			1			3,806				—			—				—				3,807				—			3,807
Shares placed in treasury	—	—		—				—			—				(5,940		)		(5,940		)		—			(5,940		)		—			—			—				—			—				(5,940		)		(5,940		)		—			(5,940		)
Stock-based compensation charges	181,317	2		4,459				—			—				—				4,461				—			4,461				181,317			2			4,459				—			—				—				4,461				—			4,461
Distributions to noncontrolling interests	—	—		—				—			—				—				—				(226		)	(226		)		—			—			—				—			—				—				—				(226		)	(226		)
Balance March 31, 2018 (unaudited)	125,722,034	$	1,257	$	107,108			$	1,053,090		$	4,435			$	(820,749	)		$	345,141			$	109		$	345,250			125,722,034			$	1,257		$	107,108			$	1,054,230		$	3,295			$	(820,749	)		$	345,141			$	109		$	345,250

Balance December 31, 2016	124,149,609	$	1,241	$	22,018			$	885,117		$	3,811			$	(762,169	)		$	150,018			$	392		$	150,410
Net income	—	—		—				55,719			—				—				55,719				67			55,786
Dividends declared ($0.09 per share)	—	—		—				(9,058		)	—				—				(9,058		)		—			(9,058		)
Currency translation adjustments	—	—		—				—			791				—				791				—			791
Derivative financial instruments	—	—		—				—			242				—				242				—			242
Defined benefit obligations	—	—		—				—			290				—				290				—			290
Available-for-sale investments	—	—		—				—			(108		)		—				(108		)		—			(108		)
Exercise of stock options	412,991	4		9,789				—			—				—				9,793				—			9,793
Shares placed in treasury	—	—		39,907				—			—				(45,100		)		(5,193		)		—			(5,193		)
Stock-based compensation charges	272,141	3		3,409				—			—				—				3,412				—			3,412
Distributions to noncontrolling interests	—	—		—				—			—				—				—				(146		)	(146		)
Balance March 31, 2017 (unaudited)	124,834,741	$	1,248	$	75,123			$	931,778		$	5,026			$	(807,269	)		$	205,906			$	313		$	206,219

See accompanying notes to condensed consolidated financial statements.

BWX TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended March 31,						Three Months Ended March 31,
	2018			2017			2019			2018
	(Unaudited) (In thousands)						(Unaudited) (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	66,413		$	55,786		$	49,110		$	66,413
Non-cash items included in net income from continuing operations:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	14,061			13,976			15,122			14,061
Income of investees, net of dividends	(2,299		)	1,779			(2,960		)	(2,299		)
Gains on asset disposals and impairments, net	(8		)	—
Recognition of losses for pension and postretirement plans	505			446			647			505
Stock-based compensation expense	4,461			3,412			2,529			4,461
Changes in assets and liabilities:
Accounts receivable	16,943			(41,153		)	5,812			27,387
Accounts payable	10,528			(14,003		)	1,612			10,528
Retainages							(13,949		)	(10,444		)
Contracts in progress and advance billings on contracts	(74,153		)	(4,890		)	(43,735		)	(74,153		)
Income taxes	(5,502		)	(2,607		)	7,559			(5,502		)
Accrued and other current liabilities	364			(29,810		)	(10,748		)	364
Pension liability, accrued postretirement benefit obligation and employee benefits	(48,929		)	(38,891		)
Pension liabilities, accrued postretirement benefit obligations and employee benefits							(25,876		)	(48,929		)
Other, net	(989		)	1,279			(2,846		)	(997		)
NET CASH USED IN OPERATING ACTIVITIES	(18,605		)	(54,676		)	(17,723		)	(18,605		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(17,634		)	(13,713		)	(44,519		)	(17,634		)
Purchases of securities	(1,033		)	(3,503		)	(1,786		)	(1,033		)
Sales and maturities of securities	2,948			3,317			1,800			2,948
Investments, net of return of capital, in equity method investees	—			(1,701		)
Proceeds from asset disposals	8			—
Other, net	—			691			—			8
NET CASH USED IN INVESTING ACTIVITIES	(15,711		)	(14,909		)	(44,505		)	(15,711		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under the Credit Agreement	—			73,600
Repayments under Credit Agreement	(6,951		)	(30,476		)
Borrowings of long-term debt							212,500			—
Repayments of long-term debt							(113,457		)	(6,951		)
Repurchases of common shares							(20,000		)	—
Dividends paid to common shareholders	(15,947		)	(8,985		)	(16,797		)	(15,947		)
Exercise of stock options	2,525			9,665
Exercises of stock options							823			2,525
Cash paid for shares withheld to satisfy employee taxes	(4,657		)	(4,973		)	(8,574		)	(4,657		)
Other	(226		)	(146		)	943			(226		)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES	(25,256		)	38,685
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES							55,438			(25,256		)
EFFECTS OF EXCHANGE RATE CHANGES ON CASH	(2,236		)	1,013			104			(2,236		)
TOTAL DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS	(61,808		)	(29,887		)	(6,686		)	(61,808		)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	213,144			134,600			36,408			213,144
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	151,336		$	104,713		$	29,722		$	151,336
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	3,463		$	3,330		$	14,767		$	3,463
Income taxes (net of refunds)	$	24,370		$	27,082		$	6,191		$	24,370
SCHEDULE OF NON-CASH INVESTING ACTIVITY:
Accrued capital expenditures included in accounts payable	$	4,735		$	3,016		$	11,249		$	4,735

See accompanying notes to condensed consolidated financial statements.

BWX TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, ~~2018~~2019

(UNAUDITED)

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

We have presented the condensed consolidated financial statements of BWX Technologies, Inc. ("BWXT" or the "Company") in U.S. dollars in accordance with the interim reporting requirements of Form 10-Q, Rule 10-01 of Regulation S-X and accounting principles generally accepted in the United States ("GAAP"). Certain financial information and disclosures normally included in our financial statements prepared annually in accordance with GAAP have been condensed or omitted. Readers of these financial statements should, therefore, refer to the consolidated financial statements and notes in our annual report on Form 10-K for the year ended December 31, ~~2017~~2018 (our ~~"2017~~"2018 10-K"). We have included all adjustments, in the opinion of management, consisting only of normal recurring adjustments, necessary for a fair presentation.

We use the equity method to account for investments in entities that we do not control, but over which we have the ability to exercise significant influence. We generally refer to these entities as "joint ventures." We have eliminated all intercompany transactions and accounts. We have reclassified certain amounts previously reported to conform to the presentation at March 31, ~~2018~~2019 and for the three months ended March 31, ~~2018~~2019 primarily related to ~~recently adopted~~the adoption of new accounting standards. We present the notes to our condensed consolidated financial statements on the basis of continuing operations, unless otherwise stated.

Unless the context otherwise indicates, "we," "us" and "our" mean BWXT and its consolidated subsidiaries.

Reportable Segments

We operate in three reportable segments: Nuclear Operations Group, Nuclear ~~Services~~Power Group and Nuclear ~~Power~~Services Group. Our reportable segments are further described as follows:

Our Nuclear Operations Group segment manufactures naval nuclear reactors for the Naval Nuclear Propulsion Program for use in ~~U.S. Navy~~ submarines and aircraft carriers. Through this segment, we own and operate manufacturing facilities located in Lynchburg, Virginia; Barberton, Ohio; Mount Vernon, Indiana; Euclid, Ohio; and Erwin, Tennessee. The Lynchburg operations fabricate fuel-bearing precision components that range in weight from a few grams to hundreds of tons. 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 Euclid facility fabricates electro-mechanical equipment and performs design, manufacturing, inspection, assembly and testing activities. Fuel for the naval nuclear reactors is provided by Nuclear Fuel Services, Inc. ("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. 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. This segment also provides specialized engineering services that include structural component design, 3-D thermal-hydraulic engineering analysis, weld and robotic process development, electrical and controls engineering and metallurgy and materials engineering. In addition, this segment offers in-plant inspection, maintenance and modification services for nuclear steam generators, heat exchangers, reactors, fuel handling systems and balance of plant equipment, as well as specialized non-destructive examination and tooling/repair solutions. This segment is also a leading global manufacturer and supplier of critical medical radioisotopes and radiopharmaceuticals for research, diagnostic and therapeutic uses. See Note 2 for information about a recent acquisition related to this segment.

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-owned facilities. These services are provided to the U.S. Department of Energy ("DOE"), including the National Nuclear Security Administration ("NNSA"), the Office of Nuclear Energy, the Office of Science and the Office of Environmental

Management, and NASA. 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 is also ~~provides~~engaged in inspection and maintenance services ~~primarily~~ for the ~~U.S.~~ commercial nuclear industry ~~including~~primarily in the U.S. These services include steam generator, ~~and~~ heat exchanger and balance of plant inspection ~~services,~~and servicing as well as high pressure water lancing, non-destructive examination and the development of customized tooling solutions. This segment also offers complete advanced nuclear fuel and reactor design and engineering, licensing and manufacturing services for new advanced nuclear ~~reactors.~~

~~Our Nuclear Power Group segment fabricates steam generators, nuclear fuel, fuel handling systems, pressure vessels, reactor components, heat exchangers, tooling delivery systems~~reactors and other ~~auxiliary equipment, including containers for the storage of spent~~ nuclear fuel and other high-level waste, for nuclear utility customers. BWXT has supplied the nuclear industry with more than 1,300 large, heavy components worldwide and is the only heavy nuclear component, N-Stamp certified manufacturer in North America. This segment also provides specialized engineering services that include structural component design, 3-D thermal-hydraulic engineering analysis, weld and robotic process development, electrical and controls engineering and metallurgy and materials engineering. In addition, this segment

offers in-plant inspection, maintenance and modification services for nuclear steam generators, heat exchangers, reactors, fuel handling systems and balance of plant equipment, as well as specialized non-destructive examination and tooling/repair solutions.technologies.

See Note 8 for financial information about our segments.

Operating results for the three months ended March 31, ~~2018~~2019 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2018.~~2019. For further information, refer to the consolidated financial statements and ~~the related footnotes~~notes included in our ~~2017~~2018 10-K.

~~Acquisition~~Recently Adopted Accounting Standards

In February 2016, the FASB issued an update to the Topic Leases, which supersedes the lease reporting requirements in Topic Leases (previously "FAS 13"). This update requires that a lessee recognize on its balance sheets the assets and liabilities for all leases with lease terms of ~~Sotera Health LLC's Nordion Medical Isotope Business~~

~~On April 17, 2018,~~more than 12 months, along with additional qualitative and quantitative disclosures. We adopted this update on January 1, 2019 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 of favorable leases related to recent acquisitions from Intangible Assets. In addition, we ~~signed a definitive agreement to acquire Sotera Health LLC's Nordion medical isotope business. Nordion's medical radioisotopes business is a leading global manufacturer and supplier~~elected the package of critical medical isotopes and radiopharmaceuticals for research, diagnostic and therapeutic uses. Its customers include radiopharmaceutical companies, hospitals and radiopharmacies. Its primary operations are located in Kanata, Ontario and Vancouver, British Columbia. This acquisition will allowpractical expedients permitted under the transition guidance, which allowed us to ~~accelerate~~carry forward our entry into the medical radioisotope market by adding licensed infrastructure, approximately 150 highly trained and experienced personnel and two production centers. Subject to required Canadian and U.S. regulatory reviews and approvals, this transaction is expected to close by the end of 2018.

~~Deconsolidation of Generation mPower LLC~~

On March 2, 2016, we entered into a framework agreement with Bechtel Power Corporation ("Bechtel"), BWXT Modular Reactors, LLC and BDC NexGen Power, LLC for the potential restructuring and restart of our mPower small modular reactor program (the "Framework Agreement"). As a result of entering into the Framework Agreement, we deconsolidated Generation mPower LLC ("GmP") from our financial statements ashistorical lease classifications, among other things. The adoption of the ~~date~~provisions in this update did not have an impact on our condensed consolidated statements of the Framework Agreement and recognized a $30.0 million loss contingency, which was ultimately paid to Bechtel in the first quarter of 2017 following the receipt of Bechtel's notice that the mPower program would not be restarted.income or cash flows.

Contracts and Revenue Recognition

We generally recognize contract revenues and related costs over time for individual performance obligations based on a cost-to-cost method in accordance with Financial Accounting Standards Board ("FASB") Topic Revenue from Contracts with Customers. We recognize estimated contract revenue and resulting income based on the measurement of the extent of progress toward completion as a percentage of the total ~~project (percentage-of-completion basis).~~project. Certain costs may be excluded from the cost-to-cost method of measuring progress, such as significant costs for uninstalled materials, if such costs do not depict our performance in transferring control of goods or services to the customer. We review contract price and cost estimates periodically as the work progresses and reflect adjustments proportionate to the percentage-of-completion in income in the period when those estimates are revised. Certain of our contracts recognize revenue at a point in time, and revenue on these contracts is recognized when control transfers to the customer. The majority of our revenue that is recognized at a point in time is related to parts and certain medical radioisotopes and radiopharmaceuticals in our Nuclear Power Group segment. For all contracts, if a current estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full when determined.

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 condensed consolidated balance sheet.

Accumulated Other Comprehensive Income

The components of Accumulated other comprehensive income included in Stockholders' Equity are as follows:


	March 31, 2018			December 31, 2017			March 31, 2019			December 31, 2018
	(In thousands)						(In thousands)
Currency translation adjustments	$	10,024		$	13,148		$	4,449		$	3,506
Net unrealized gain on derivative financial instruments	447			353			180			685
Unrecognized prior service cost on benefit obligations	(5,915		)	(6,237		)	(13,884		)	(14,395		)
Net unrealized gain (loss) on available-for-sale investments	(121		)	2,190			(61		)	(85		)
Accumulated other comprehensive income	$	4,435		$	9,454		$	(9,316	)	$	(10,289	)

~~As a result of the adoption of~~Upon adopting the FASB update to the Topic ~~Financial Instruments~~Derivatives, we reclassified ~~$2.2~~$0.1 million ~~of net unrealized gains on available-for-sale investments~~ from Retained earnings to Accumulated other comprehensive income ~~to Retained earnings~~ on January 1, ~~2018.~~2019.

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


	Three Months Ended March 31,							Three Months Ended March 31,
	2018			2017				2019			2018
Accumulated Other Comprehensive Income (Loss) Component Recognized	(In thousands)						Line Item Presented	(In thousands)						Line Item Presented
Realized gain (loss) on derivative financial instruments	$	(11	)	$	(4	)	Revenues	$	(12	)	$	(11	)	Revenues
	120			54			Cost of operations	202			120			Cost of operations
	109			50			Total before tax	190			109			Total before tax
	(30		)	(13		)	Provision for Income Taxes	(49		)	(30		)	Provision for Income Taxes
	$	79		$	37		Net Income	$	141		$	79		Net Income
Amortization of prior service cost on benefit obligations	$	(505	)	$	(446	)	Other – net	$	(647	)	$	(505	)	Other – net
	183			156			Provision for Income Taxes	136			183			Provision for Income Taxes
	$	(322	)	$	(290	)	Net Income	$	(511	)	$	(322	)	Net Income
Realized gain on investments	$	—		$	22		Other – net
	—			(8		)	Provision for Income Taxes
	$	—		$	14		Net Income
Total reclassification for the period	$	(243	)	$	(239	)		$	(370	)	$	(243	)

Inventories

At March 31, ~~2018~~2019 and December 31, ~~2017, included in~~2018, Other current assets ~~we had~~included inventories totaling ~~$10.6~~$15.2 million and ~~$8.6~~$16.0 million, respectively, consisting entirely of raw materials and supplies.

Restricted Cash and Cash Equivalents

At March 31, ~~2018,~~2019, we had restricted cash and cash equivalents totaling ~~$8.0~~$6.7 million, ~~$2.6~~$2.7 million of which was held for future decommissioning of facilities (which is included in Other Assets on our condensed consolidated balance sheets) and ~~$5.4~~$4.0 million of which was held to meet reinsurance reserve requirements of our captive insurer.

The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents ~~within~~on our condensed consolidated balance sheets to the totals presented inon our condensed consolidated statement of cash flows:


	March 31, 2018		December 31, 2017		March 31, 2019		December 31, 2018
	(In thousands)				(In thousands)
Cash and cash equivalents	$	143,335	$	203,404	$	22,976	$	29,871
Restricted cash and cash equivalents	5,362		7,105		4,024		3,834
Restricted cash and cash equivalents included in Other Assets	2,639		2,635		2,722		2,703
Total cash and cash equivalents and restricted cash and cash equivalents as presented in our condensed consolidated statement of cash flows	$	151,336	$	213,144
Total cash and cash equivalents and restricted cash and cash equivalents as presented on our condensed consolidated statement of cash flows					$	29,722	$	36,408

~~Warranty Expense~~Leases

We ~~accrue estimated expense,~~lease certain manufacturing facilities, office space and equipment under operating leases with terms of one to 20 years. Certain of the leases include options to renew for periods of one to 10 years. We include lease options in our determination of the right-of-use asset and lease liability if it is reasonably certain that we will exercise one or more of the options. Leases with initial terms of 12 months or less are excluded from our right-of-use assets and lease liabilities. Our right-of-use assets are included in ~~Cost~~Other Assets on our condensed consolidated balance sheet. Our current lease liabilities are included in Accrued liabilities – other, and our noncurrent lease liabilities are included in Other Liabilities on our condensed consolidated balance sheet. We use discount rates based on our incremental borrowing rate as most of our leases do not provide an implicit rate that can be readily determined.

During the three months ended March 31, 2019, we recognized lease expense of $2.1 million and paid cash of $1.7 million for our operating leases. At March 31, 2019, our weighted-average remaining lease term was 4.0 years, and for the purpose of measuring the present value of our lease liabilities, the weighted-average discount rate was 5.03%. The maturities of our lease liabilities at March 31, 2019 were as follows (amounts in thousands):



2019	$	4,354
2020	2,680
2021	1,974
2022	1,221
2023	513
2024	142
Thereafter	1,102
Total lease payments	$	11,986
Less: interest	(1,220		)
Present value of lease liabilities ⁽¹⁾	$	10,766


(1)	Includes current lease liabilities of $4.9 million.

At March 31, 2019, our right-of-use assets totaled $44.1 million. The difference between the right-of-use assets and lease liabilities was primarily the result of reclassifications of favorable leases related to recent acquisitions from Intangible Assets.

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



2019	$	5,650
2020	$	2,655
2021	$	1,969
2022	$	1,216
2023	$	511
Thereafter	$	1,231

Derivative Financial Instruments

Our operations give rise to exposure to market risks from changes in foreign currency exchange ("FX") rates. We use derivative financial instruments, primarily FX forward contracts, to reduce the impact of changes in FX rates on our operating results. We use these instruments to hedge our exposure associated with revenues or costs on our long-term contracts and other transactions that are denominated in currencies other than our operating entities' functional currencies. We do not hold or issue derivative financial instruments for trading or other speculative purposes.

We enter into derivative financial instruments primarily as hedges of certain firm purchase and sale commitments denominated in foreign currencies. We record these contracts at fair value on our condensed consolidated balance sheets. Based on the hedge designation at the inception of the contract, the related gains and losses on these contracts are deferred in stockholders' equity as a component of Accumulated other comprehensive income until the hedged item is recognized in earnings. The gain or loss on a derivative instrument not designated as a hedging instrument is immediately recognized in earnings. Gains and losses on derivative financial instruments that require immediate recognition are included as a component of Other – net on our condensed consolidated statements of ~~income,~~income.

We have designated the majority of our FX forward contracts that qualify for hedge accounting as cash flow hedges. The hedged risk is the risk of changes in functional-currency-equivalent cash flows attributable to ~~satisfy contractual warranty requirements when~~changes in FX spot rates of forecasted transactions primarily related to long-term contracts. We exclude from our assessment of effectiveness the portion of the fair value of the FX forward contracts attributable to the difference between FX spot rates and FX forward rates. At March 31, 2019, we had deferred approximately $0.2 million of net gains on these derivative financial instruments in Accumulated other comprehensive income. Assuming market conditions continue, we expect to recognize the associated revenue on the related contracts. In addition, we record specific provisions or reductions where we expect the actual warranty costs to significantly differ from the accrued estimates. Such changes could have a material effect on our consolidated financial condition, resultsmajority of ~~operations and cash flows.~~

~~The following summarizes the changes~~this amount in the ~~carrying amount~~next 12 months.

At March 31, 2019, our derivative financial instruments consisted of FX forward contracts with a total notional value of $73.5 million with maturities extending to December 2021. These instruments consist primarily of FX forward contracts to

purchase or sell Canadian dollars. We are exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments. We attempt to mitigate this risk by using major financial institutions with high credit ratings. Our counterparties to derivative financial instruments have the benefit of the same collateral arrangements and covenants as described under our ~~Accrued warranty expense:~~

Three Months Ended
March 31,
2018 2017
(In thousands)
Balance at beginning of period $ 13,428
$ 11,477
Additions 517
386
Expirations and other changes (53 ) —
Payments (20 ) (15 )
Translation (173 ) 60
Balance at end of period $ 13,699
$ 11,908
credit facility.

Provision for Income Taxes

We are subject to federal income tax in the U.S. and Canada as well as income tax within multiple U.S. state jurisdictions. We provide for income taxes based on the enacted tax laws and rates in the jurisdictions in which we conduct our operations. These jurisdictions may have regimes of taxation that vary with respect to nominal rates and with respect to the basis on which these rates are applied. This variation, along with 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, the Tax Cuts and Jobs Act (the "Act") was enacted, making significant changes to existing U.S. tax laws that impact BWXT, 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. We recognized the income tax effects of the Act within our condensed consolidated financial statements in accordance with FASB Topic ~~Income Taxes. Our Canadian operations continue to be subject to tax at a local statutory rate of approximately 25%.~~

Our effective tax rate for the three months ended March 31, ~~2018~~2019 was 21.9% as compared to ~~30.6%~~21.9% for the three months ended March 31, ~~2017.~~2018. The effective tax ~~rate~~rates for the three months ended March 31, 2019 and 2018 ~~was~~were slightly higher than the U.S. corporate income tax rate of 21% primarily due to state income taxes within the U.S. and the unfavorable rate differential associated with our Canadian earnings. Our effective tax ~~rate~~rates for the three months ended March 31, 2019 and 2018 ~~and March 31, 2017 was~~were favorably impacted by benefits recognized for excess tax benefits related to employee share-based payments of ~~$2.2~~$1.7 million and ~~$2.3~~$2.2 million, respectively.

As of March 31, ~~2018,~~2019, we had gross unrecognized tax benefits of ~~$1.7~~$0.3 million (exclusive of interest and federal and state benefits), all of which would reduce our effective tax rate if recognized.

~~Recently Adopted Accounting Standards~~NOTE 2 – ACQUISITIONS

Acquisition of Sotera Health LLC's Nordion Medical Isotope Business

On July 30, 2018, our subsidiary BWXT ITG Canada, Inc. acquired Sotera Health's Nordion medical isotope business (the "MI business") for $213.0 million. The MI business is a leading global manufacturer and supplier of critical medical radioisotopes and radiopharmaceuticals for research, diagnostic and therapeutic uses. Its customers include radiopharmaceutical companies, hospitals and radiopharmacies. Its primary operations are located in Kanata, Ontario, Canada and Vancouver, British Columbia, Canada. This acquisition added approximately 150 highly trained and experienced personnel, two specialized production centers and a uniquely licensed infrastructure. In ~~May 2014, the FASB issued the Topic~~ ~~Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in the Topic~~ ~~Revenue Recognition~~ and most industry specific guidance. The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance also outlines a five-step model whereby revenue is recognized as performance obligations within a contract are satisfied, as well as new, expanded disclosures. We adopted the new revenue recognition standard on January 1, 2018 for all of our contracts utilizing the modified retrospective method resulting in changes to our opening balance sheet that were recognized through a cumulative catch-up adjustment. See Note 2 for further information regarding revenue recognition and our adoption of the new revenue standard.

~~In October 2016, the FASB issued an update~~addition to the ~~Topic~~ ~~Statement~~growing portfolio of ~~Cash Flows.~~ radioisotope products we acquired, the MI business will be the platform from which we plan to launch our Molybdenum-99 product line and a number of future radioisotope-based imaging, diagnostic and therapeutic products. This update clarifies guidance on the classification and presentation of restricted cash and cash equivalents in the statement of cash flows. Restricted cash and cash equivalents will now be included with cash and cash equivalents when reconciling the beginning and end of period totals shown on the statement of cash flows. In addition, a reconciliation between the amounts of cash and cash equivalents and restricted cash and cash equivalentsbusiness is reported in the balance sheets and the statement of cash flows is now required. We adopted this update on January 1, 2018 with retrospective application. This update resulted in an increase to cash and cash equivalents and restricted cash and cash equivalents of $9.0 million and $8.8 million at December 31, 2016 and March 31, 2017 on our condensed consolidated statement of cash flows, respectively. This update did not otherwise have a material impact on our financial statements.

~~In March 2017, the FASB issued an update to the Topic~~ ~~Compensation – Retirement Benefits~~. This update amends the presentation requirements of the components of net periodic benefit cost related to defined benefit pension and postretirement plans in our consolidated statements of income. Previously, components of net periodic benefit cost were aggregated and reported net in the consolidated statements of income as part of ~~operating income. This update requires entities to disaggregate~~our Nuclear Power Group segment.

The purchase price of the ~~service cost component~~acquisition has been allocated among assets acquired and liabilities assumed at fair value, with the excess purchase price recorded as goodwill. Our purchase price allocation is as follows (amounts in thousands):



Accounts receivable – trade	$	7,732
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
Intangible assets	139,257
Total assets acquired	$	227,699
Accounts payable	$	654
Accrued employee benefits	579
Accrued liabilities – other	1,665
Environmental liabilities	2,062
Pension liability	9,746
Total liabilities assumed	$	14,706
Net assets acquired	$	212,993
Amount of tax deductible goodwill	$	53,693

The intangible assets included above consist of ~~net periodic benefit cost and present it with other current compensation costs within operating income. Other components~~the following (dollar amounts in thousands):



	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 net periodic benefit cost are required to be classified outside of operating income within the consolidated statements of income. These changes to classification will result in no changes to net income. We adopted this update on January 1, 2018 with retrospective presentation. The impact of this update on our condensed consolidated statement of incomeoperations for the three months ended March 31, ~~2017 was a reduction of Operating Income, along with a corresponding increase to Other Income (Expense), of $6.9 million. See Note 3 for additional information.~~

~~In March 2016,~~2018 as if the ~~FASB issued an update to the Topic~~ ~~Financial Instruments~~. This update amends the classification and measurement of financial instruments including the requirement to measure equity investments at fair value with changes in fair value recognized in net income (except those accounted for under the equity method of accounting or those that result in consolidationacquisition of the ~~investee). We adopted this update~~MI business had occurred on January 1, ~~2018 through~~2017. The unaudited pro forma financial information below is not intended to represent or be indicative of our actual consolidated results had we completed the ~~modified retrospective method, which resulted in a cumulative catch-up adjustment, which reclassified $2.2 million~~acquisition at January 1, 2017. This information is presented for comparative purposes only and should not be taken as representative of ~~net gains from Accumulated other comprehensive income to Retained earnings on~~ our ~~condensed~~future consolidated ~~balance sheet.~~results of operations.

~~New Accounting Standards~~

~~In February 2016,~~



	Three Months Ended
	March 31, 2018
	(In thousands, except per share amounts)
Revenues	$	467,791
Net Income Attributable to BWX Technologies, Inc.	$	66,890
Basic Earnings per Common Share	$	0.67
Diluted Earnings per Common Share	$	0.67

The unaudited pro forma results include the ~~FASB issued an update~~following pre-tax adjustments to the ~~Topic~~ ~~Leases, which supersedes~~historical results presented above:

Increase in amortization expense related to timing of amortization of the ~~lease reporting requirements~~fair value of identifiable intangible assets acquired of approximately $1.5 million for the three months ended March 31, 2018.

Additional interest expense associated with the incremental borrowings that would have been incurred to acquire the MI business as of January 1, 2017 of approximately $1.5 million for the three months ended March 31, 2018.

Elimination of $1.6 million in ~~Topic~~ ~~Leases~~ ~~(previously "FAS 13"). This update requires~~acquisition related costs recognized in the three months ended March 31, 2018 that a lessee recognize on its balance sheet the assets and liabilities for all leases with lease terms of more than 12 months, along with additional qualitative and quantitative disclosures. The effect of leases in a consolidated statement of income and a consolidated statement of cash flows isare not expected to be largely unchanged. Accounting by lessors was not significantly impacted by this update. This update will be effective for us in 2019, with early adoption permitted. We expect to adopt the provisions in this update effective January 1, 2019 and are currently evaluating the impact of the adoption on our financial statements.recurring.

NOTE 23 – 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, is illustrated below:~~

January 1, December 31,
2018 2017
(In thousands)
Assets:
Contracts in progress $ 260,932
$ 420,628
Deferred Income Taxes $ 85,193
$ 86,740
Liabilities:
Accrued liabilities – other $ 66,371
$ 64,738
Advance billings on contracts $ 73,390
$ 246,192
Stockholders' Equity:
Retained earnings $ 1,000,578
$ 990,652

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. Historically, we utilized man-hours or a cost-to-cost method to measure progress on certain performance obligations within this segment. The performance obligations identified for recognizing revenue are similar to our historical units of account. As a result of the change to a cost-to-cost method, the timing of revenue recognition on affected contracts, in the aggregate, results in the recognition of revenue and cost of operations earlier in the process of satisfying performance obligations. This change impacted the life-to-date revenue and costs 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. Historically, 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.~~

~~Contracts and Revenue Recognition~~

~~Nuclear Operations Group~~

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. 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. We allocate revenue to the individual performance obligations within contracts with multiple performance obligations based on the stand-alone selling price of the individual performance obligations.

Our fixed-price incentive fee contracts include incentives that we concluded to be variable consideration. The amount of the variable consideration to which we are entitled is dependent on our actual costs incurred on the performance obligation compared to the target costs for that performance obligation and subject to incentive price revisions included within the contracts. We include these incentive fees in revenue when there is sufficient evidence to determine that the variable consideration is not constrained. The remaining contracts typically have immaterial amounts of variable consideration and have a single performance obligation. Our estimates of variable consideration and total estimated costs at completion are determined through a detailed process based on historical performance and our expertise using the most likely method. Variations from estimated contract performance could result in a material effect on our financial condition and results of operations in future periods.

Our Nuclear Operations Group segment's contracts allow for billings as costs are incurred, subject to certain retainages on our fixed-price incentive fee contracts, that require milestones to be reached for the remaining consideration to be paid.

~~Nuclear Services Group~~

Our contracts within our Nuclear Services Group segment are primarily cost-plus service contracts on which we recognize revenue over time based on a cost-to-cost method, which is consistent with the structure of the billings associated with these contracts. Ownership continuously transfers to the customer as we perform the services. 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.

~~Nuclear Power Group~~

Our Nuclear Power Group segment recognizes revenue over time using a cost-to-cost method for the manufacturing of large components, non-standard parts, fuel bundles and service contracts as control continually transfers to the customers. For standard parts, revenue is recognized at the point in time control transfers to the customer, which is consistent with the transfer of ownership. This segment generates revenue primarily from firm-fixed-price contracts that do not contain variable consideration as well as time-and-materials based contracts. Certain of these contracts contain assurance warranties and/or provisions for liquidated damages, which are expected to have an immaterial impact to the contracts based on our historical experience. We are entitled to payment on the majority of our Nuclear Power Group segment contracts when we achieve certain milestones related to our progress on the contract.

Disaggregated Revenues

Revenues by geographical area and customer type ~~are~~were as follows:


	Three Months Ended March 31, 2018									Three Months Ended March 31, 2019									Three Months Ended March 31, 2018
	Nuclear Operations Group		Nuclear Services Group		Nuclear Power Group		Total			Nuclear Operations Group		Nuclear Power Group		Nuclear Services Group		Total			Nuclear Operations Group		Nuclear Power Group		Nuclear Services Group		Total
	(In thousands)									(In thousands)
United States:
Government	$	316,631	$	25,881	$	—	$	342,512		$	297,303	$	—	$	24,451	$	321,754		$	316,631	$	—	$	25,881	$	342,512
Non-Government	—		3,177		260		3,437			5,338		9,162		4,353		18,853			—		260		3,177		3,437
	$	316,631	$	29,058	$	260	$	345,949		$	302,641	$	9,162	$	28,804	$	340,607		$	316,631	$	260	$	29,058	$	345,949
Canada:
Government	$	—	$	—	$	—	$	—
Non-Government	—		975		82,325		83,300			$	—	$	68,611	$	290	$	68,901		$	—	$	82,325	$	975	$	83,300
	$	—	$	975	$	82,325	$	83,300
Other:
Government	$	—	$	—	$	—	$	—
Non-Government	—		—		30,231		30,231			$	2,160	$	6,626	$	—	$	8,786		$	—	$	30,231	$	—	$	30,231
	$	—	$	—	$	30,231	$	30,231
Segment Revenues	$	316,631	$	30,033	$	112,816	459,480			$	304,801	$	84,399	$	29,094	418,294			$	316,631	$	112,816	$	30,033	459,480
Adjustments and Eliminations							(2,017		)							(1,840		)							(2,017		)
Revenues							$	457,463								$	416,454								$	457,463

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


	Three Months Ended March 31, 2018									Three Months Ended March 31, 2019									Three Months Ended March 31, 2018
	Nuclear Operations Group		Nuclear Services Group		Nuclear Power Group		Total			Nuclear Operations Group		Nuclear Power Group		Nuclear Services Group		Total			Nuclear Operations Group		Nuclear Power Group		Nuclear Services Group		Total
	(In thousands)									(In thousands)
Over-time	$	316,631	$	30,033	$	105,109	$	451,773
Over time										$	304,733	$	70,661	$	29,094	$	404,488		$	316,631	$	105,109	$	30,033	$	451,773
Point-in-time	—		—		7,707		7,707			68		13,738		—		13,806			—		7,707		—		7,707
Segment Revenues	$	316,631	$	30,033	$	112,816	459,480			$	304,801	$	84,399	$	29,094	418,294			$	316,631	$	112,816	$	30,033	459,480
Adjustments and Eliminations							(2,017		)							(1,840		)							(2,017		)
Revenues							$	457,463								$	416,454								$	457,463

Revenues by contract type ~~are~~were as follows:


	Three Months Ended March 31, 2018									Three Months Ended March 31, 2019									Three Months Ended March 31, 2018
	Nuclear Operations Group		Nuclear Services Group		Nuclear Power Group		Total			Nuclear Operations Group		Nuclear Power Group		Nuclear Services Group		Total			Nuclear Operations Group		Nuclear Power Group		Nuclear Services Group		Total
	(In thousands)									(In thousands)
Fixed-Price Incentive Fee	$	249,240	$	—	$	4,028	$	253,268		$	245,487	$	273	$	—	$	245,760		$	249,240	$	4,028	$	—	$	253,268
Firm-Fixed-Price	47,058		5,410		74,282		126,750			39,343		61,998		6,168		107,509			47,058		74,282		5,410		126,750
Cost-Plus Fee	20,233		23,953		45		44,231			19,853		—		22,535		42,388			20,233		45		23,953		44,231
Time-and-Materials	100		670		34,461		35,231			118		22,128		391		22,637			100		34,461		670		35,231
Segment Revenues	$	316,631	$	30,033	$	112,816	459,480			$	304,801	$	84,399	$	29,094	418,294			$	316,631	$	112,816	$	30,033	459,480
Adjustments and Eliminations							(2,017		)							(1,840		)							(2,017		)
Revenues							$	457,463								$	416,454								$	457,463

Performance Obligations

As we progress on our contracts and the underlying performance obligations for which we recognize revenue over time, we refine our estimates of variable consideration and total estimated costs at completion, which impact the overall profitability on our contracts and performance obligations. Changes in these estimates result in the recognition of cumulative catch-up adjustments that impact our ~~revenue~~revenues and/or costs of contracts. During the three months ended March 31, 2019 and 2018, we recognized net favorable changes in estimates that resulted in ~~an increase~~increases in ~~revenue~~revenues of $4.8 million and $5.3 ~~million.~~million, respectively.

Contract Assets and Liabilities

We include revenues and related costs incurred, plus accumulated contract costs that exceed amounts invoiced to customers under the terms of the contracts, in Contracts in progress. We include in Advance billings on contracts billings that exceed accumulated contract costs and revenues and costs recognized over time. Amounts that are withheld on our fixed-price incentive fee contracts are classified within Retainages. Certain of these amounts require conditions other than the passage of time to be achieved, with the remaining amounts only requiring the passage of time. Most long-term contracts contain provisions for progress payments. Our unbilled receivables do not contain an allowance for credit losses as we expect to invoice customers and collect all amounts for unbilled revenues. 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 three months ended March 31, ~~2018,~~2019, our unbilled receivables increased ~~$75.4~~$33.1 million, primarily as a result of revenue in excess of billings on certain ~~firm-fixed-price~~fixed-price incentive fee contracts within our Nuclear Operations Group segment and ~~the timing of milestone payments on large components~~services and engineering contracts ~~started in 2018~~ within our Nuclear Power Group segment. 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. This resulted in an increase in retainages on contracts ~~from January 1 to~~during the three months ended March 31, ~~2018~~2019 as shown below:


	March 31,		January 1,		March 31,		December 31,
	2018		2018		2019		2018
	(In thousands)				(In thousands)
Included in Contracts in progress:
Unbilled receivables	$	325,745	$	250,325	$	341,776	$	308,723
Included in Accounts receivable – trade, net:
Retainages	$	93,258	$	82,801	$	72,000	$	57,885
Included in Other Assets:
Retainages	$	1,656	$	1,669	$	1,508	$	1,674
Advance billings on contracts	$	77,140	$	73,390	$	88,117	$	98,477

During the three months ended March 31, 2019 and 2018, we recognized $33.8 million and $30.4 million of ~~revenue~~revenues that ~~was~~were in Advance billings on contracts at December 31, 2018 and January 1, ~~2018.~~

2018, respectively.

Remaining Performance Obligations

Remaining performance obligations represent the dollar amount of revenue we expect to recognize in the future from performance obligations on contracts previously awarded and in progress. Of the March 31, ~~2018~~2019 remaining performance obligations on our contracts with customers, we expect to recognize revenues as follows:

2018 2019 Thereafter Total
(In approximate millions)
Nuclear Operations Group $ 944
$ 802
$ 1,256
$ 3,002
Nuclear Services Group 21
3
4
28
Nuclear Power Group 168
111
271
550
Total Remaining Performance Obligations $ 1,133
$ 916
$ 1,531
$ 3,580

~~Historical Method~~

~~Prior to the adoption of FASB Topic~~ ~~Revenue from Contracts with Customers~~, we accounted for revenue under previous GAAP. In accordance with our adoption of the new revenue recognition standard utilizing the modified retrospective approach, we are required to disclose the impact on our financial statements on a line item basis.

~~A comparison of certain line items in our condensed consolidated balance sheet is shown below:~~

March 31, 2018

Current
Method

Historical
Method
(In thousands)
Assets:
Contracts in progress $ 337,375
$ 365,192
Deferred Income Taxes $ 84,727
$ 85,443
Liabilities:
Accrued liabilities – other $ 51,662
$ 49,327
Advance billings on contracts $ 77,140
$ 117,174
Stockholders' Equity:
Retained earnings $ 1,053,090
$ 1,043,924

Differences in the amounts above are primarily the result of the initial adoption of the new revenue recognition standard. Additional differences were caused by revenue under the current method being $8.1 million lower than the historical method as discussed below.

~~A comparison of certain line items in our condensed consolidated statement of operations is shown below:~~

Three Months Ended
March 31, 2018

Current
Method

Historical
Method
(In thousands)
Revenues $ 457,463
$ 465,530
Cost of operations $ 327,364
$ 334,542
Operating Income $ 79,888
$ 80,777
Provision for Income Taxes $ 18,603
$ 18,732
Net Income $ 66,413
$ 67,173

We recognized $8.1 million less revenue under the current method compared to the historical method for the three months ended March 31, 2018. This was primarily driven by less progress being achieved on contracts as a result of using a cost-to-cost method for measuring progress under the current method as compared to man-hours or units of output under our historical method.



	2019		2020		Thereafter		Total
	(In approximate millions)
Nuclear Operations Group	$	708	$	947	$	2,355	$	4,010
Nuclear Power Group	185		146		438		769
Nuclear Services Group	40		3		2		45
Total Remaining Performance Obligations	$	933	$	1,096	$	2,795	$	4,824

NOTE 34 – PENSION PLANS AND POSTRETIREMENT BENEFITS

We record the service cost component of net periodic benefit cost within Operating income on our condensed consolidated statements of income. For the three months ended March 31, ~~2018~~2019 and ~~2017,~~2018, these amounts were $2.6 ~~million and $2.3 million, respectively.~~million. All other components of net periodic benefit cost are included in Other – net within the condensed consolidated statements of income. For the three months ended March 31, ~~2018~~2019 and ~~2017,~~2018, these amounts were ~~$(8.9)~~$(5.2) million and ~~$(6.9)~~$(8.9) million, respectively. Components of net periodic benefit cost included in net income ~~are~~were as follows:


	Pension Benefits						Other Benefits						Pension Benefits						Other Benefits
	Three Months Ended March 31,						Three Months Ended March 31,						Three Months Ended March 31,						Three Months Ended March 31,
	2018			2017			2018			2017			2019			2018			2019			2018
	(In thousands)												(In thousands)
Service cost	$	2,413		$	2,151		$	165		$	154		$	2,456		$	2,413		$	145		$	165
Interest cost	12,343			13,513			549			540			11,592			12,343			585			549
Expected return on plan assets	(21,625		)	(20,837		)	(634		)	(595		)	(17,436		)	(21,625		)	(627		)	(634		)
Amortization of prior service cost (credit)	550			525			(45		)	(79		)	725			550			(78		)	(45		)
Net periodic benefit (income) cost	$	(6,319	)	$	(4,648	)	$	35		$	20		$	(2,663	)	$	(6,319	)	$	25		$	35

NOTE 45 – COMMITMENTS AND CONTINGENCIES

~~Other than as noted below, there have been~~There were no material ~~changes~~contingencies during the period covered by this Form ~~10-Q in the status of the legal proceedings disclosed in~~10-Q. For more information regarding commitments and contingencies, refer to Note 10 to the consolidated financial statements in Part II of our ~~2017~~2018 10-K.

~~Investigations and Litigation~~

~~Apollo and Parks Township~~

In January 2010, Michelle McMunn, Cara D. Steele and Yvonne Sue Robinson filed suit against Babcock & Wilcox Power Generation Group, Inc. ("B&W PGG"), Babcock & Wilcox Technical Services Group, Inc., formerly known as B&W Nuclear Environmental Services, Inc. and now known as BWXT Technical Services Group, Inc. (the "BWXT Parties") and Atlantic Richfield Company ("ARCO") in the U.S. District Court for the Western District of Pennsylvania. Since January 2010, additional suits were filed by additional plaintiffs and there are currently 17 lawsuits pending in the U.S. District Court for the Western District of Pennsylvania (the "Trial Court") against the BWXT Parties and ARCO, including the most recent lawsuits filed in June and October 2015. In total, the suits involve approximately 107 primary claimants. The primary claimants allege, among other things, personal injuries and property damage as a result of alleged releases of radioactive material relating to the operation, remediation and/or decommissioning of two former nuclear fuel processing facilities located in the Borough of Apollo and Parks Township, Pennsylvania (collectively, the "Apollo and Parks Litigation"). Those facilities previously were owned by Nuclear Materials and Equipment Company, a former subsidiary of ARCO ("NUMEC"), which was acquired by B&W PGG. The plaintiffs in the Apollo and Parks Litigation seek compensatory and punitive damages, and in November 2014 delivered a demand of $125.0 million for the settlement of all then-filed actions. While we consider the likelihood of the plaintiffs' recovery to be remote, solely on the basis of this demand we estimate the range of a possible loss at between $0.0 million and $125.0 million. In connection with the spin-off of our former Power Generation business, we agreed to indemnify B&W PGG and its affiliates for any losses arising from the Apollo and Parks Litigation pursuant to the Master Separation Agreement.

Between May 2015 and March 2016, the presiding judge in the Apollo and Parks Litigation granted the BWXT Parties' motions to dismiss or motions for summary judgment in all 17 of the existing lawsuits. Accordingly, all current claims in the Apollo and Parks Litigation have been dismissed by the Trial Court. All plaintiffs filed notices of appeal, and the appeals were consolidated in the U.S. Court of Appeals for the Third Circuit (the "Court of Appeals"). On August 23, 2017, the Court of Appeals affirmed the rulings of the Trial Court, dismissing all claims against the BWXT Parties and other defendants in the cases. Plaintiffs filed a notice of petition for rehearing, which was denied by the Court of Appeals on September 21, 2017. The plaintiffs filed a writ of certiorari for review by the U.S. Supreme Court on December 20, 2017. On February 20, 2018, the U.S. Supreme Court denied plaintiffs' petition for writ of certiorari making the Court of Appeals decision affirming the dismissal of all 17 lawsuits final.

At the time of ARCO's sale of NUMEC stock to B&W PGG, B&W PGG received an indemnity and hold harmless agreement from ARCO, which has been assigned to BWXT and its affiliates, with respect to claims and liabilities arising prior to or as a result of conduct or events predating the acquisition.

The ARCO indemnity remains applicable should any future claims similar in nature to the Apollo and Parks Litigation be made, although no assurance can be given that the indemnity will be available or sufficient in the event of liability, if any.

~~NOTE 5 – DERIVATIVE FINANCIAL INSTRUMENTS~~

Our operations give rise to exposure to market risks from changes in foreign currency exchange ("FX") rates. We use derivative financial instruments, primarily FX forward contracts, to reduce the impact of changes in FX rates on our operating results. We use these instruments primarily to hedge our exposure associated with revenues or costs on our long-term contracts that are denominated in currencies other than our operating entities' functional currencies. We do not hold or issue derivative financial instruments for trading or other speculative purposes.

We enter into derivative financial instruments primarily as hedges of certain firm purchase and sale commitments denominated in foreign currencies. We record these contracts at fair value on our condensed consolidated balance sheets. Based on the hedge designation at the inception of the contract, the related gains and losses on these contracts are deferred in stockholders' equity as a component of Accumulated other comprehensive income until the hedged item is recognized in earnings. Any ineffective portion of a derivative's change in fair value and any portion excluded from the assessment of effectiveness are immediately recognized in Other – net in our condensed consolidated statements of income. The gain or loss on a derivative instrument not designated as a hedging instrument is also immediately recognized in earnings. Gains and losses on derivative financial instruments that require immediate recognition are included as a component of Other – net in our condensed consolidated statements of income.

We have designated all of our FX forward contracts that qualify for hedge accounting as cash flow hedges. The hedged risk is the risk of changes in functional-currency-equivalent cash flows attributable to changes in FX spot rates of forecasted transactions related to long-term contracts. We exclude from our assessment of effectiveness the portion of the fair value of the FX forward contracts attributable to the difference between FX spot rates and FX forward rates. At March 31, 2018, we had deferred approximately $0.4 million of net gains on these derivative financial instruments in Accumulated other comprehensive income. Assuming market conditions continue, we expect to recognize the majority of this amount in the next 12 months.

At March 31, 2018, our derivative financial instruments consisted of FX forward contracts. The notional value of our FX forward contracts totaled $31.6 million at March 31, 2018, with maturities extending to December 2021. These instruments consist primarily of contracts to purchase or sell Canadian dollars. We are exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments. We attempt to mitigate this risk by using major financial institutions with high credit ratings. The counterparties to all of our FX forward contracts are financial institutions included in our credit facility. Our hedge counterparties have the benefit of the same collateral arrangements and covenants as described under our credit facility.

~~The following tables summarize our derivative financial instruments at March 31, 2018 and December 31, 2017:~~

Asset and Liability Derivatives
March 31,
2018 December 31,
2017
(In thousands)
Derivatives Designated as Hedges:
FX Forward Contracts:
Location
Accounts receivable – other $ 295
$ 250
Other Assets $ 390
$ 348
Accounts payable $ 54
$ 177
Other Liabilities $ 62
$ 93

~~The effects of derivatives on our financial statements are outlined below:~~

Three Months Ended
March 31,
2018 2017
(In thousands)
Derivatives Designated as Hedges:
Cash Flow Hedges:
FX Forward Contracts:
Amount of gain recognized in other comprehensive income $ 232
$ 376
Gain (loss) reclassified from accumulated other comprehensive income (loss) into earnings: effective portion
Location
Revenues $ (11 ) $ (4 )
Cost of operations $ 120
$ 54

NOTE 6 – FAIR VALUE MEASUREMENTS

Investments

The following is a summary of our investments measured at fair value at March 31, ~~2018:~~2019:


	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(In thousands)								(In thousands)
Equity securities
Equities	$	2,442	$	—	$	2,442	$	—	$	1,919	$	—	$	1,919	$	—
Mutual funds	4,851		—		4,851		—		5,130		—		5,130		—
Available-for-sale securities
U.S. Government and agency securities	1,034		1,034		—		—		1,979		1,979		—		—
Corporate bonds	1,469		1,469		—		—		3,082		1,460		1,622		—
Asset-backed securities and collateralized mortgage obligations	147		—		147		—		89		—		89		—
Total	$	9,943	$	2,503	$	7,440	$	—	$	12,199	$	3,439	$	8,760	$	—

The following is a summary of our investments measured at fair value at December 31, ~~2017:~~2018:


	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(In thousands)								(In thousands)
Equity securities
Equities									$	1,163	$	—	$	1,163	$	—
Mutual funds									4,694		—		4,694		—
Available-for-sale securities
U.S. Government and agency securities	$	1,299	$	1,299	$	—	$	—	2,227		2,227		—		—
Corporate bonds	3,169		1,534		1,635		—		2,803		1,433		1,370		—
Equities	2,759		—		2,759		—
Mutual funds	4,847		—		4,847		—
Asset-backed securities and collateralized mortgage obligations	161		—		161		—		92		—		92		—
Total	$	12,235	$	2,833	$	9,402	$	—	$	10,979	$	3,660	$	7,319	$	—

We estimate the fair value of investments based on quoted market prices. For investments for which there are no quoted market prices, we derive fair values from available yield curves for investments of similar quality and terms.

Derivatives

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 March 31, ~~2018~~2019 and December 31, ~~2017,~~2018, we had forward contracts outstanding to purchase or sell foreign currencies, primarily Canadian dollars, with a total fair value of ~~$0.6~~$(0.2) million and ~~$0.3~~$0.7 million, respectively.

Other Financial Instruments

We used the following methods and assumptions in estimating our fair value disclosures for our other financial instruments, as follows:

Cash and cash equivalents and restricted cash and cash equivalents. The carrying amounts that we have reported in the accompanying condensed consolidated balance sheets for Cash and cash equivalents and Restricted cash and cash equivalents approximate their fair values due to their highly liquid nature.

Long-term and short-term debt. We base the fair values of debt instruments, including our 5.375% senior notes due 2026 (the "Senior Notes"), on quoted market prices. 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 March 31, 2019 and December 31, 2018, the fair value of our Senior Notes was $406.2 million and $384.9 million, respectively. The fair value of our remaining debt instruments approximated their carrying ~~value~~values at March 31, ~~2018~~2019 and December 31, ~~2017.~~2018.

NOTE 7 – STOCK-BASED COMPENSATION

Stock-based compensation recognized for all of our plans for the three months ended March 31, 2019 and 2018 ~~and 2017~~ totaled ~~$4.9~~$3.6 million and ~~$4.7~~$4.9 million, respectively, with associated tax benefit totaling ~~$0.9~~$0.6 million and ~~$1.6~~$0.9 million, respectively.

NOTE 8 – SEGMENT REPORTING

As described in Note 1, our operations are assessed based on three reportable segments. An analysis of our operations by reportable segment is as follows:


	Three Months Ended March 31,						Three Months Ended March 31,
	2018			2017			2019			2018
	(In thousands)						(In thousands)
REVENUES:
Nuclear Operations Group	$	316,631		$	325,081		$	304,801		$	316,631
Nuclear Power Group							84,399			112,816
Nuclear Services Group	30,033			27,854			29,094			30,033
Nuclear Power Group	112,816			77,674
Adjustments and Eliminations ⁽¹⁾	(2,017		)	(2,380		)	(1,840		)	(2,017		)
	$	457,463		$	428,229		$	416,454		$	457,463


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


Nuclear Operations Group Transfers	$	(1,139	)	$	(195	)	$	(857	)	$	(1,139	)
Nuclear Power Group Transfers							(40		)	(40		)
Nuclear Services Group Transfers	(838		)	(2,157		)	(943		)	(838		)
Nuclear Power Group Transfers	(40		)	(28		)
	$	(2,017	)	$	(2,380	)	$	(1,840	)	$	(2,017	)
OPERATING INCOME:
Nuclear Operations Group	$	67,657		$	67,749		$	57,625		$	67,657
Nuclear Power Group							12,583			21,764
Nuclear Services Group	1,177			402			1,571			1,177
Nuclear Power Group	21,764			12,956
Other	(4,043		)	(1,612		)	(6,096		)	(4,043		)
	$	86,555		$	79,495		$	65,683		$	86,555
Unallocated Corporate ⁽²⁾	(6,667		)	(3,223		)	(2,039		)	(6,667		)
Total Operating Income	$	79,888		$	76,272		$	63,644		$	79,888
Other Income (Expense):
Interest income	778			137			415			778
Interest expense	(3,560		)	(3,517		)	(8,703		)	(3,560		)
Other – net	7,910			7,486			7,521			7,910
Total Other Income (Expense)	5,128			4,106			(767		)	5,128
Income before Provision for Income Taxes	$	85,016		$	80,378		$	62,877		$	85,016


(2)	Unallocated corporate includes general corporate overhead not allocated to segments.

NOTE 9 – EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share:


	Three Months Ended March 31,				Three Months Ended March 31,
	2018		2017		2019		2018
	(In thousands, except share and per share amounts)				(In thousands, except share and per share amounts)
Basic:
Net Income Attributable to BWX Technologies, Inc.	$	66,441	$	55,719	$	48,978	$	66,441
Weighted-average common shares	99,526,187		99,444,910		95,255,109		99,526,187
Basic earnings per common share	$	0.67	$	0.56	$	0.51	$	0.67
Diluted:
Net Income Attributable to BWX Technologies, Inc.	$	66,441	$	55,719	$	48,978	$	66,441
Weighted-average common shares (basic)	99,526,187		99,444,910		95,255,109		99,526,187
Effect of dilutive securities:
Stock options, restricted stock units and performance shares ⁽¹⁾	986,100		1,246,058		566,245		986,100
Adjusted weighted-average common shares	100,512,287		100,690,968		95,821,354		100,512,287
Diluted earnings per common share	$	0.66	$	0.55	$	0.51	$	0.66


(1)	At March 31, ~~2018~~2019 and ~~2017,~~2018, we excluded ~~79,278~~181,358 and ~~103,608~~79,278 shares, respectively, from our diluted share calculation as their effect would have been antidilutive.


Item 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

The following information should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included under Item 1 of this quarterly report on Form 10-Q ("Report") and the audited consolidated financial statements and the related notes and Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our annual report on Form 10-K for the year ended December 31, ~~2017~~2018 (our ~~"2017~~"2018 10-K").

In this Report, unless the context otherwise indicates, "we," "us" and "our" mean BWX Technologies, Inc. ("BWXT" or the "Company") and its consolidated subsidiaries.

From time to time, our management or persons acting on our behalf make forward-looking statements to inform existing and potential security holders about our ~~company. In addition, various~~Company. Forward-looking statements ~~in this Report, including~~include those statements that express a belief, expectation or intention, as well as those that are not statements of historical fact, ~~are forward-looking statements~~ within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange ~~Act of 1934.~~Act. Statements and assumptions regarding expectations and projections of specific projects, our future backlog, revenues, income and capital spending, strategic investments, acquisitions or divestitures, ~~research and development initiatives,~~ return onof capital activities or margin improvement initiatives are examples of forward-looking statements. Forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "anticipate," "plan," "seek," "goal," "could," "intend," "may," "should" or other words that convey the uncertainty of future events or outcomes. In addition, sometimes we will specifically describe a statement as being a forward-looking statement and refer to this cautionary statement.

We have based our forward-looking statements on information currently available to us and our current expectations, estimates and projections about our industries and our ~~company.~~Company. We caution that these statements are not guarantees of future performance and you should not rely unduly on them as they involve risks, uncertainties and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. While our management considers these statements and assumptions to be reasonable, they are inherently subject to ~~significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties,~~numerous factors, including potentially the risk factors described in the section labeled Item 1A, "Risk Factors" of our 2018 10-K, most of which are difficult to predict and many of which are beyond our control. Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in our forward-looking statements.

We believe the items we have outlined above are important factors that could cause estimates in our financial statements to differ materially from actual results and those expressed in a forward-looking statement made in this Report or elsewhere by us or on our behalf. Differences between actual results and any future performance suggested in our forward-looking statements could result from a variety of factors. We have discussed many of these factors in more detail elsewhere in this Report and in Item 1A "Risk Factors" in our ~~2017~~2018 10-K. These factors are not necessarily all the factors that could affect us. Unpredictable or unanticipated factors we have not discussed in this Report or in our ~~2017~~2018 10-K could also have material adverse effects on actual results of matters that are the subject of our forward-looking statements. We do not intend to update or review any forward-looking statement or our description of important factors, ~~each time~~whether as a ~~potential important factor arises,~~result of new information, future events or otherwise, except as required by applicable securities laws and regulations. We advise our security holders that they should (1) be aware that factors not referred to above could affect the accuracy of our forward-looking statements and (2) use caution and common sense when considering our forward-looking statements.laws.

GENERAL

We operate in three reportable segments: Nuclear Operations Group, Nuclear ~~Services~~Power Group and Nuclear ~~Power~~Services Group. In general, we operate in capital-intensive industries and rely on large contracts for a substantial amount of our revenues. We are currently exploring growth strategies across our segments to expand and complement our existing businesses. We would expect to fund these opportunities with cash ~~on hand~~generated from operations or by raising additional capital through debt, equity or some combination thereof.

Nuclear Operations Group

The revenues of our Nuclear Operations Group segment are largely a function of defense spending by the U.S. Government. Through this segment, we engineer, design and manufacture precision naval nuclear components, reactors and nuclear fuel for the DOE/NNSA's Naval Nuclear Propulsion Program. In addition, we perform development and fabrication activities for missile launch tubes for U.S. Navy submarines. As a supplier of major nuclear components for certain U.S. Government programs, this segment is a significant participant in the defense industry.

Nuclear Power Group

high-level nuclear waste. This segment is a leading supplier of nuclear fuel, fuel handling systems, tooling delivery systems and related services for CANDU nuclear power plants. This segment also provides a variety of engineering and in-plant services and is a significant supplier to nuclear power utilities undergoing major refurbishment and plant life extension projects. Additionally, this segment is a leading global manufacturer and supplier of critical medical radioisotopes and radiopharmaceuticals.

Our Nuclear Power Group segment's overall activity primarily depends on the demand and competitiveness of nuclear energy. A significant portion of our Nuclear Power Group segment's operations depend on the timing of maintenance and refueling outages, the cyclical nature of capital expenditures and major refurbishment and life extension projects, as well as the demand for nuclear fuel and fuel handling equipment primarily in the Canadian market, which could cause variability in our financial results.

Nuclear Services Group

Our Nuclear Services Group segment provides various services to the U.S. Government and the commercial nuclear industry primarily in the U.S. The revenues and equity in income of investees under our U.S. Government contracts are largely a function of spending of the U.S. Government and the performance scores we and our consortium partners earn in managing and operating high-consequence operations at U.S. nuclear weapons sites, national laboratories and manufacturing complexes. With its specialized capabilities of full life-cycle management of special materials, facilities and technologies, we believe our Nuclear Services Group segment is well-positioned to continue to participate in the continuing cleanup, operation and management of critical government-owned nuclear sites, laboratories and manufacturing complexes maintained by the DOE, NASA and other federal agencies.

This segment is also engaged in inspection and maintenance services for the commercial nuclear industry primarily in the U.S. These services include ~~the~~steam generator, heat exchanger and balance of plant inspection ~~of steam generators~~ and ~~heat exchangers,~~servicing as well as high pressure water lancing, non-destructive examination and the development of 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.

~~Nuclear Power Group~~

Through this segment, we design and manufacture commercial nuclear steam generators, heat exchangers, pressure vessels, reactor components, and other auxiliary equipment, including containers for the storage of spent nuclear fuel and other high-level nuclear waste. This segment is a leading supplier of nuclear fuel, fuel handling systems, tooling delivery systems and related services for CANDU nuclear power plants. This segment also provides a variety of engineering and in-plant services and is a significant supplier to nuclear power utilities undergoing major refurbishment and plant life extension projects.

Our Nuclear Power Group segment's overall activity primarily depends on the demand and competitiveness of nuclear energy. A significant portion of our Nuclear Power Group segment's operations depend on the timing of maintenance outages, principally in the Canadian market, and the cyclical nature of capital expenditures and major refurbishments for nuclear utility customers, which could cause variability in our financial results.

Acquisition of Sotera Health LLC's Nordion Medical Isotope Business

On ~~April 17,~~July 30, 2018, ~~we signed a definitive agreement to acquire~~our subsidiary BWXT ITG Canada, Inc. acquired Sotera ~~Health LLC's~~Health's Nordion medical isotope ~~business. Nordion's medical radioisotopes~~business (the "MI business"). The MI business is a leading global manufacturer and supplier of critical medical ~~isotopes~~radioisotopes and radiopharmaceuticals for research, diagnostic and therapeutic uses. Its customers include radiopharmaceutical companies, hospitals and radiopharmacies. Its primary operations are located in Kanata, Ontario, Canada and Vancouver, British ~~Columbia.~~Columbia, Canada. This acquisition ~~will allow us to accelerate our entry into the medical radioisotope market by adding licensed infrastructure,~~added approximately 150 highly trained and experienced personnel, two specialized production centers and ~~two production centers. Subject~~a uniquely licensed infrastructure. In addition to ~~required Canadian~~the growing portfolio of radioisotope products we acquired, the MI business will be the platform from which we plan to launch our Molybdenum-99 product line and ~~U.S. regulatory reviews~~a number of future radioisotope-based imaging, diagnostic and ~~approvals, this transaction~~therapeutic products. This business is ~~expected to close by the end~~reported as part of ~~2018.~~our Nuclear Power Group segment.

Critical Accounting Policies and Estimates

For a summary of the critical accounting policies and estimates that we use in the preparation of our unaudited condensed consolidated financial statements, see Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our ~~2017~~2018 10-K. There have been no material changes to our policies during the three months ended March 31, ~~2018~~2019 with the exception of changes to ~~FASB Topics~~Financial Accounting Standards Board ("FASB") Topic ~~Revenue from Contracts with Customers~~ ~~and~~ ~~Compensation – Retirement Benefits~~Leases as described in the notes to ~~our~~the condensed consolidated financial statements in Item 1 of this Report.

Accounting for Contracts

On certain of our performance obligations, we recognize revenue over time. In accordance with FASB Topic Revenue from Contracts with Customers, we are required to estimate the total amount of costs on these performance obligations. As of March 31, ~~2018,~~2019, we have provided for the estimated costs to complete all of our ongoing contracts. However, it is possible that current estimates could change due to unforeseen events, which could result in adjustments to overall contract costs. A principal risk on ~~fixed-priced~~fixed-price contracts is that revenue from the customer is insufficient to cover increases in our costs. It is possible that current estimates could materially change for various reasons, including, but not limited to, fluctuations in forecasted labor productivity or steel and other raw material prices. In some instances, we guarantee completion dates related to our projects or provide performance guarantees. Increases in costs on our fixed-price contracts could have a material adverse impact on our

consolidated results of operations, financial condition and cash flows. Alternatively, reductions in overall contract costs at

completion could materially improve our consolidated results of operations, financial condition and cash flows. InDuring the three months ended March 31, ~~2018~~2019 and ~~2017,~~2018, we recognized net changes in estimates related to contracts that recognize revenue over time, which increased operating income by approximately ~~$5.3~~$4.8 million and ~~$4.9~~$5.3 million, respectively.

RESULTS OF OPERATIONS – THREE MONTHS ENDED MARCH 31, ~~2018~~2019 VS. THREE MONTHS ENDED MARCH 31, ~~2017~~2018

Selected financial highlights are presented in the table below:


	Three Months Ended March 31,									Three Months Ended March 31,
	2018			2017			$ Change			2019			2018			$ Change
	(In thousands)									(In thousands)
REVENUES:
Nuclear Operations Group	$	316,631		$	325,081		$	(8,450	)	$	304,801		$	316,631		$	(11,830	)
Nuclear Power Group										84,399			112,816			(28,417		)
Nuclear Services Group	30,033			27,854			2,179			29,094			30,033			(939		)
Nuclear Power Group	112,816			77,674			35,142
Adjustments and Eliminations	(2,017		)	(2,380		)	363			(1,840		)	(2,017		)	177
	$	457,463		$	428,229		$	29,234		$	416,454		$	457,463		$	(41,009	)
OPERATING INCOME:
Nuclear Operations Group	$	67,657		$	67,749		$	(92	)	$	57,625		$	67,657		$	(10,032	)
Nuclear Power Group										12,583			21,764			(9,181		)
Nuclear Services Group	1,177			402			775			1,571			1,177			394
Nuclear Power Group	21,764			12,956			8,808
Other	(4,043		)	(1,612		)	(2,431		)	(6,096		)	(4,043		)	(2,053		)
	$	86,555		$	79,495		$	7,060		$	65,683		$	86,555		$	(20,872	)
Unallocated Corporate	(6,667		)	(3,223		)	(3,444		)	(2,039		)	(6,667		)	4,628
Total Operating Income	$	79,888		$	76,272		$	3,616		$	63,644		$	79,888		$	(16,244	)

Consolidated Results of Operations

~~Three months ended March 31, 2018 vs. 2017~~

Consolidated revenues ~~increased 6.8%~~decreased 9.0%, or ~~$29.2~~$41.0 million, to ~~$457.5~~$416.5 million in the three months ended March 31, ~~2018~~2019 compared to ~~$428.2~~$457.5 million for the corresponding period in ~~2017,~~2018, due to ~~increases~~decreases in revenues from our Nuclear ~~Services~~Operations Group, Nuclear Power Group and Nuclear ~~Power~~Services Group segments totaling ~~$2.2~~$11.8 million, $28.4 million and ~~$35.1~~$0.9 million, respectively. ~~These increases were partially offset by a decrease in revenues in our Nuclear Operations Group segment of $8.5 million.~~

Consolidated operating income ~~increased $3.6~~decreased $16.2 million to ~~$79.9~~$63.6 million in the three months ended March 31, ~~2018~~2019 compared to ~~$76.3~~$79.9 million for the corresponding period of ~~2017. We experienced~~2018. Operating income in our Nuclear Operations Group, Nuclear Power Group and Other segments decreased by $10.0 million, $9.2 million and $2.1 million, respectively. These decreases were partially offset by operating income improvements in our Nuclear Services Group ~~and Nuclear Power Group segments~~segment of ~~$0.8~~$0.4 million ~~and $8.8 million, respectively. These increases were partially offset by lower operating income in our Nuclear Operations Group and Other segments of $0.1 and $2.4 million, respectively,~~ as well as ~~an increase in~~lower unallocated corporate expenses of ~~$3.4 million.~~$4.6 million when compared to the corresponding period of 2018.

Nuclear Operations Group

Three Months Ended
March 31,
2018 2017 $ Change
(In thousands)
Revenues $ 316,631
$ 325,081
$ (8,450 )
Operating Income 67,657
67,749
(92 )
% of Revenues 21.4%
20.8%

~~Three months ended March 31, 2018 vs. 2017~~



	Three Months Ended March 31,
	2019		2018		$ Change
	(In thousands)
Revenues	$	304,801	$	316,631	$	(11,830	)
Operating Income	$	57,625	$	67,657	$	(10,032	)
% of Revenues	18.9%		21.4%

Revenues decreased ~~2.6%~~3.7%, or ~~$8.5~~$11.8 million, to ~~$316.6~~$304.8 million in the three months ended March 31, ~~2018~~2019 compared to ~~$325.1~~$316.6 million for the corresponding period of ~~2017. The~~2018. This decrease was ~~primarily~~ attributable to lower activity in the manufacturing of nuclear and non-nuclear components for U.S. Government ~~programs.~~programs due primarily to the timing of the procurement of certain

long-lead materials. This decrease was partially offset by increased activity in our naval nuclear fuel and downblending operations.

Operating income decreased ~~$0.1~~$10.0 million to ~~$67.7~~$57.6 million in the three months ended March 31, ~~2018~~2019 compared to $67.7 million for the corresponding period of ~~2017.~~2018. The decrease in operating income was primarily ~~driven by~~due to the changes in ~~revenue~~revenues noted above ~~which was offset by~~as well as net favorable changes in estimates related to certain long-term contracts within our naval nuclear fuel and downblending ~~operations.~~operations, which occurred during the quarter ended March 31, 2018. We also incurred higher expenses associated with onboarding employees to meet expected increased volume demands.

Nuclear Power Group



	Three Months Ended March 31,
	2019		2018		$ Change
	(In thousands)
Revenues	$	84,399	$	112,816	$	(28,417	)
Operating Income	$	12,583	$	21,764	$	(9,181	)
% of Revenues	14.9%		19.3%

Revenues decreased 25.2%, or $28.4 million, to $84.4 million in the three months ended March 31, 2019 compared to $112.8 million for the corresponding period of 2018. The decrease was primarily attributable to lower levels of activity associated with our nuclear components business of $19.6 million, predominantly related to the China steam generator project, which is nearing completion. In addition, we experienced a decrease in revenues of $10.2 million from a decline in the volume of in-plant inspection, maintenance and modification services due to fewer plant outages. These decreases were partially offset by an increase in revenues associated with our MI business, which was acquired in the third quarter of 2018.

Operating income decreased $9.2 million to $12.6 million in the three months ended March 31, 2019 compared to $21.8 million for the corresponding period of 2018, primarily attributable to the decrease in revenues noted above. In addition, operating margins decreased as a result of a shift in our product line mix when compared to the same period in the prior year.

Nuclear Services Group

Three Months Ended
March 31,
2018 2017 $ Change
(In thousands)
Revenues $ 30,033
$ 27,854
$ 2,179
Operating Income 1,177
402
775
% of Revenues 3.9%
1.4%

~~Three months ended March 31, 2018 vs. 2017~~



	Three Months Ended March 31,
	2019		2018		$ Change
	(In thousands)
Revenues	$	29,094	$	30,033	$	(939	)
Operating Income	$	1,571	$	1,177	$	394
% of Revenues	5.4%		3.9%

Revenues ~~increased 7.8%, or $2.2 million, to $30.0~~totaled $29.1 million in the three months ended March 31, ~~2018~~2019 and were relatively unchanged when compared to ~~$27.9~~$30.0 million for the corresponding period of 2017. The increase was primarily attributable to increased activity at our Naval Reactor decommissioning and decontamination project of $2.9 million and an increase in design and engineering revenues in support of NASA's nuclear space programs. These increases were partially offset by a decline in revenue associated with cost reimbursable activities at some of the sites we manage and operate.2018.

Operating income ~~increased $0.8 million to $1.2~~totaled $1.6 million in the three months ended March 31, ~~2018~~2019 and was relatively unchanged when compared to ~~$0.4~~$1.2 million for the corresponding period of 2017. The increase was primarily attributable to lower selling, general and administrative expenses related to a decrease in business development activities caused by the timing of proposal activities.2018.

~~Nuclear Power Group~~Other

Three Months Ended
March 31,
2018 2017 $ Change
(In thousands)
Revenues $ 112,816
$ 77,674
$ 35,142
Operating Income 21,764
12,956
8,808
% of Revenues 19.3%
16.7%



	Three Months Ended March 31,
	2019			2018			$ Change
	(In thousands)
Operating Income	$	(6,096	)	$	(4,043	)	$	(2,053	)

~~Three months ended March 31, 2018 vs. 2017~~

~~Revenues increased 45.2%, or $35.1 million, to $112.8~~Operating income decreased $2.1 million in the three months ended March 31, 2018 compared to $77.7 million for the corresponding period of 2017. The increase was primarily attributable to an increase in revenues in our nuclear components business of $17.8 million as a result of an increase in design and manufacturing work associated with the China steam generator project and higher levels of in-plant inspection, maintenance and modification services totaling $11.1 million. In addition, we also experienced an increase in volume related to the fabrication of nuclear fuel and higher levels of activity associated with our nuclear fuel handling capabilities.

Operating income increased $8.8 million to $21.8 million in the three months ended March 31, 2018 compared to $13.0 million for the corresponding period of 2017, primarily attributable to increases in revenue noted above. In addition, operating income improved as a result of lower selling, general and administrative expenses of $0.9 million, which was largely related to the integration of BWXT Nuclear Energy Canada Inc. (acquired December 16, 2016) into our existing business.

~~Other~~

Three Months Ended
March 31,
2018 2017 $ Change
(In thousands)
Operating Income (4,043 ) (1,612 ) (2,431 )

~~Operating income decreased $2.4 million to a loss of $4.0 million in the three months ended March 31, 2018 compared to a loss of $1.6 million for the corresponding period of 2017,~~2019, primarily due to an increase in research and development activities related to our medical and industrial radioisotope ~~capabilities.~~capabilities and other nuclear technologies.

Unallocated Corporate

Unallocated corporate expenses ~~increased $3.4~~decreased $4.6 million to ~~$6.7~~$2.0 million for the three months ended March 31, ~~2018~~2019 compared to ~~$3.2~~$6.7 million for the corresponding period of ~~2017.~~2018. This ~~increase~~decrease was primarily due to ~~third-party~~higher levels of legal and consulting costs associated with due diligence activities ~~and~~conducted in the prior year as well as higher levels of stock-based compensation ~~which were partially offset by lower healthcare claims.~~during the quarter ended March 31, 2018.

Provision for Income Taxes


	Three Months Ended March 31,							Three Months Ended March 31,
	2018		2017		$ Change			2019		2018		$ Change
	(In thousands)							(In thousands)
Income before Provision for Income Taxes	$	85,016	$	80,378	$	4,638		$	62,877	$	85,016	$	(22,139	)
Provision for Income Taxes	$	18,603	$	24,592	$	(5,989	)	$	13,767	$	18,603	$	(4,836	)
Effective Tax Rate	21.9%		30.6%					21.9%		21.9%

We operate primarily ~~operate~~ in the U.S. and ~~Canada. On December 22, 2017, the Tax Cuts~~Canada, and ~~Jobs Act (the "Act") was enacted, making significant changes to existing~~we recognize our U.S. income tax ~~laws that impact BWXT, including, but not limited to, a reduction to~~provision based on the U.S. ~~corporate income~~federal statutory rate of 21% and our Canadian tax ~~rate from 35% to 21% for tax years beginning after December 31, 2017,~~provision based on the taxation of global intangible low-taxed income ("GILTI") and additional deduction limitations related to executive compensation. We recognized the income tax effects of the Act within our condensed consolidated financial statements in accordance with Financial Accounting Standards Board Topic ~~Income Taxes. Our~~ Canadian ~~operations continue to be subject to tax at a~~ local statutory rate of approximately 25%.

Backlog

Backlog represents the dollar amount of revenue we expect to recognize in the future from contracts awarded and in progress. Not all of our expected revenue from a contract award is recorded in backlog for a variety of reasons, including that some projects are awarded and completed within the same fiscal quarter.

Our backlog is equal to our remaining performance obligations under contracts that meet the criteria in FASB Topic Revenue from Contracts with Customers, as discussed in Note 23 to our condensed consolidated financial statements included in this Report. It is possible that our methodology for determining backlog may not be comparable to methods used by other companies.

We are subject to the budgetary and appropriations cycle of the U.S. Government as it relates to our Nuclear Operations Group and Nuclear Services Group segments. Backlog may not be indicative of future operating results, and projects in our backlog may be cancelled, modified or otherwise altered by customers.


	March 31, 2018		December 31, 2017		March 31, 2019		December 31, 2018
	(In approximate millions)				(In approximate millions)
Nuclear Operations Group	$	3,002	$	3,305	$	4,010	$	2,637
Nuclear Power Group					769		804
Nuclear Services Group	28		29		45		38
Nuclear Power Group	550		637
Total Backlog	$	3,580	$	3,971	$	4,824	$	3,479

We do not include the value of our unconsolidated joint venture contracts in backlog. These unconsolidated joint ventures are included in our Nuclear Services Group segment.

Of the March 31, ~~2018~~2019 backlog, we expect to recognize revenues as follows:


	2018		2019		Thereafter		Total		2019		2020		Thereafter		Total
	(In approximate millions)								(In approximate millions)
Nuclear Operations Group	$	944	$	802	$	1,256	$	3,002	$	708	$	947	$	2,355	$	4,010
Nuclear Power Group									185		146		438		769
Nuclear Services Group	21		3		4		28		40		3		2		45
Nuclear Power Group	168		111		271		550
Total Backlog	$	1,133	$	916	$	1,531	$	3,580	$	933	$	1,096	$	2,795	$	4,824

At March 31, ~~2018,~~2019, Nuclear Operations Group backlog with the U.S. Government was ~~$2,998.7~~$3,502.7 million, ~~$283.5~~$171.7 million of which had not yet been funded.

At March 31, ~~2018,~~2019, Nuclear Power Group had no backlog with the U.S. Government.

At March 31, 2019, Nuclear Services Group backlog with the U.S. Government was ~~$7.2~~$36.1 million, all of which was funded.

~~At March 31, 2018, Nuclear Power Group had no backlog with the U.S. Government.~~

Major new awards from the U.S. Government are typically received following ~~congressional~~Congressional approval of the budget for the Government's next fiscal year, which starts October 1, and may not be awarded to us before the end of the calendar year. Due to the fact that most contracts awarded by the U.S. Government are subject to these annual funding approvals, the total values of the underlying programs are significantly larger. In ~~April 2016,~~March 2019, we ~~were awarded~~received a nuclear component and fuel ~~contract, along with a three-year downblending contract by~~award from the U.S. Government with a combined value ~~in excess of $3.0~~exceeding $2.1 billion, inclusive of unexercised ~~options.~~

Asoptions, approximately $1.5 billion of which had been added to backlog as of March 31, ~~2018, the U.S. Government had awarded us approximately $2.8 billion of the April 2016 award.~~2019. The value of unexercised options excluded from backlog as of March 31, ~~2018~~2019 was approximately ~~$0.2~~$0.6 billion, the majority of which is expected to be exercised in ~~2019,~~2020, subject to annual ~~congressional~~Congressional appropriations.

Liquidity and Capital Resources

Credit Facility

On ~~September 2, 2016,~~May 24, 2018, we and certain of our subsidiaries entered into ~~an amendment~~a credit agreement (the ~~"Amendment"~~"Credit Facility") ~~to our Credit Agreement dated May 11, 2015~~ with Wells Fargo Bank, ~~of America,~~ N.A., as administrative agent, and ~~certain~~the other lenders ~~and letter of credit issuers~~ party ~~thereto (collectively, the "Amended~~thereto. The Credit ~~Agreement"). Prior to the Amendment, our Credit Agreement provided for~~Facility includes a ~~five-year,~~$500.0 million senior secured revolving credit facility ~~in an aggregate amount of up to $400~~(the "Revolving Credit Facility"), a $50.0 million ~~the full amount of which was available for the issuance of letters of credit, and a~~U.S. dollar senior secured term loan ~~facility of $300~~A made available to the Company (the "USD Term Loan") and a $250.0 million ~~which was drawn on June 30, 2015. The Amendment added a new U.S.~~(U.S. dollar equivalent) Canadian dollar senior secured term loan ~~facility in an aggregate principal amount of up~~A made available to $112.5 million, which was drawn on September 16, 2016, and a new Canadian dollar term loan facility in an aggregate principal amount of up to the equivalent of $137.5 million U.S. dollars, which was drawn on December 12, 2016 (collectively, the "IncrementalBWXT Canada Ltd. (the "CAD Term ~~Loans"~~Loan"). All obligations under the ~~Amended~~ Credit ~~Agreement~~Facility are scheduled to mature on ~~June 30, 2020.~~May 24, 2023. The proceeds of loans under the ~~Amended~~ Credit ~~Agreement~~Facility are available for working capital needs and other general corporate purposes.

The ~~Amended~~ Credit ~~Agreement includes provisions~~Facility allows for additional ~~financial institutions~~parties to become lenders orand, subject to certain conditions, for ~~any existing lender to~~the increase ~~its commitment thereunder,~~of the commitments under the Credit Facility, subject to an aggregate maximum ~~of $250 million~~ 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, ~~revolving credit borrowings and letter~~plus (3) additional amounts provided the Company is in compliance with a pro forma first lien leverage ratio test of ~~credit commitments.~~

less than or equal to 2.50 to 1.00.

The ~~Amended~~Company's obligations under the Credit ~~Agreement is (1)~~Facility are guaranteed, subject to certain exceptions, by substantially all of ~~our~~the Company's present and future wholly owned domestic ~~subsidiaries, excluding our captive insurance subsidiary,~~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 ~~(2)~~future wholly owned Canadian and domestic restricted subsidiaries.

The Credit Facility is secured by first-priority liens on certain assets owned by ~~us and~~ the ~~guarantors~~Company (other than ~~our~~its subsidiaries comprising ~~our~~its Nuclear Operations Group segment and a portion of ~~our~~its Nuclear Services Group ~~segments).~~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 ~~Amended~~ Credit ~~Agreement~~Facility requires interest payments on revolving loans on a periodic basis until maturity. We began making quarterly amortization payments on the ~~$300 million term loan~~USD Term Loan and the CAD Term Loan in ~~an amount~~amounts equal to 1.25% of the initial aggregate principal amount of each term loan in the ~~first~~third quarter of 2016. We began making quarterly amortization payments on the U.S. dollar term loan facility in an amount equal to 1.25% of the aggregate principal amount in the fourth quarter of 2016. We began making quarterly amortization payments on the Canadian dollar term loan facility in an amount equal to 1.25% of the aggregate principal amount in the first quarter of 2017.2018. We may prepay all loans under the ~~Amended~~ Credit ~~Agreement~~Facility at any time without premium or penalty (other than customary Eurocurrency ~~rate~~ breakage costs), subject to notice requirements.

The ~~Amended~~ Credit ~~Agreement~~Facility includes financial covenants that are tested on a quarterly basis, based on the rolling four-quarter period that ends on the last day of each fiscal quarter. The maximum permitted leverage ratio is ~~3.00~~4.00 to 1.00, which may be increased to ~~3.25~~4.50 to 1.00 for up to four consecutive fiscal quarters after a material acquisition. The minimum consolidated interest coverage ratio is ~~4.00~~3.00 to 1.00. In addition, the ~~Amended~~ Credit ~~Agreement~~Facility contains various restrictive covenants, including with respect to debt, liens, investments, mergers, acquisitions, dividends, equity repurchases and asset sales. AtAs of March 31, ~~2018,~~2019, we were in compliance with all covenants set forth in the ~~Amended~~ Credit ~~Agreement.~~Facility.

Outstanding loans under the ~~Amended~~ Credit ~~Agreement~~Facility will bear interest at our option at either (1) the Eurocurrency rate plus a margin ranging from 1.25% to ~~1.75%~~2.00% per year or (2) the base rate ~~(the~~or Canadian index rate, as applicable (described in the Credit Facility as the highest of (a) with respect to the ~~Federal Funds~~base rate only, the federal funds rate plus 0.50%, (b) the one-month Eurocurrency rate plus 1.0%~~, or~~ and (c) the administrative agent's prime ~~rate)~~rate or the Canadian prime rate, as applicable), plus, in each case, a margin ranging from 0.25% to ~~0.75%~~1.00% per year. We are charged a commitment fee on the unused portion of the ~~revolving credit facility,~~Revolving Credit Facility, and that fee ~~varies between 0.15% and 0.25%~~ranges from 0.150% to 0.275% per year. Additionally, we are charged a letter of credit fee of between 1.25% and ~~1.75%~~2.00% per year with respect to the amount of each financial letter of credit issued under the ~~Amended~~ Credit ~~Agreement,~~Facility, and a letter of credit fee of between 0.75% and ~~1.05%~~1.20% per year ~~is charged~~ with respect to the amount of each performance letter of credit issued under the ~~Amended~~ Credit ~~Agreement.~~Facility. The applicable margin for loans, the commitment fee and the letter of credit fees set forth above will vary quarterly based on our leverage ratio. Based on the leverage ratio applicable at March 31, ~~2018,~~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~~Revolving Credit Facility was 0.175%.

~~Upon the closing~~As of the Credit Agreement and the subsequent Amendment, we paid certain upfront fees to the lenders thereunder, and paid arrangement and other fees to the arrangers and agents of the Amended Credit Agreement.

At March 31, ~~2018,~~2019, borrowings outstanding totaled ~~$502.8~~$276.9 million and ~~$0.0~~$202.7 million under our term loans and revolving line of credit, respectively, and letters of credit issued under the ~~Amended~~ Credit ~~Agreement~~Facility totaled ~~$73.8~~$64.3 million. As a result, we had ~~$326.2~~$233.0 million available for borrowings or to meet letter of credit requirements as of March 31, ~~2018, excluding the additional $250 million available to us for term loan, revolving credit borrowings and letter of credit commitments.~~2019. As of March 31, ~~2018,~~2019, the weighted-average interest rate on outstanding borrowings under our ~~Amended~~ Credit ~~Agreement~~Facility was ~~3.18%~~3.71%.

The ~~Amended~~ Credit ~~Agreement~~Facility generally includes customary events of default for a secured credit facility, some of which allow for an opportunity to cure. IfUnder the Credit Facility, (1) if an event of default relating to bankruptcy or other insolvency events occurs, ~~under the Amended Credit Agreement,~~ all related obligations ~~under the Amended Credit Agreement~~ will immediately become due and ~~payable. If~~payable; (2) if any other event of default exists, ~~under the Amended Credit Agreement,~~ the lenders will be permitted to accelerate the maturity of the related obligations ~~outstanding under the Amended Credit Agreement. If~~outstanding; and (3) if any event of default ~~occurs under the Amended Credit Agreement,~~exists, the lenders will be permitted to terminate their commitments thereunder and exercise other rights and remedies, including the commencement of foreclosure or other actions against the collateral.

If any default occurs under the ~~Amended~~ Credit ~~Agreement,~~Facility, or if we are unable to make any of the representations and warranties in the ~~Amended~~ Credit ~~Agreement,~~Facility, we will be unable to borrow funds or have letters of credit issued under the ~~Amended~~ Credit ~~Agreement.~~Facility.

Senior Notes

We issued $400.0 million aggregate principal amount of its 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. 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.

The Company may redeem the Senior Notes, in whole or in part, at any time on or after July 15, 2021 at established redemption prices. At any time prior to July 15, 2021, the Company may also redeem up to 40% 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% 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 Indenture also contains customary negative covenants. As of March 31, 2019, we were in compliance with all covenants and agreements set forth in the Indenture and the Senior Notes.

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. Although there can be no assurance that we will maintain our surety bonding capacity, we believe our current capacity is adequate to support our existing requirements for the next twelve months. In addition, these bonds generally indemnify the beneficiaries should we fail to perform our obligations under the applicable agreements. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds those underwriters issue. As of March 31, ~~2018,~~2019, bonds issued and outstanding under these arrangements totaled approximately ~~$60.8~~$67.7 million.

Long-term Benefit Obligations

Our unfunded pension and postretirement benefit obligations totaled ~~$284.1~~$193.1 million at March 31, ~~2018.~~2019. These long-term liabilities are expected to require use of our resources to satisfy future funding obligations. WeBased largely on statutory funding requirements, we expect to make contributions of approximately ~~$25.6~~$5.7 million for the remainder of ~~2018~~2019 related to our pension ~~plans~~ and postretirement plans. We may also make additional contributions based on a variety of factors including, but not limited to, tax planning, evaluation of funded status and risk mitigation strategies.

Other

Our domestic and foreign cash and cash equivalents, restricted cash and cash equivalents and investments as of March 31, ~~2018~~2019 and December 31, ~~2017~~2018 were as follows:


	March 31, 2018		December 31, 2017		March 31, 2019		December 31, 2018
	(In thousands)				(In thousands)
Domestic	$	154,624	$	211,935	$	27,529	$	37,108
Foreign	6,657		13,443		14,392		10,279
Total	$	161,281	$	225,378	$	41,921	$	47,387

Our working capital increased by ~~approximately $30.8~~$86.7 million to ~~$375.8~~$251.8 million at March 31, ~~2018~~2019 from ~~$345.0~~$165.1 million at December 31, ~~2017,~~2018, primarily attributable to changes in net contracts in progress and advance billings due to the timing of project cash ~~flows.~~flows and a decrease in current liabilities primarily associated with the payment of accrued incentives during the three months ended March 31, 2019.

Our net cash used in operations ~~decreased by $36.1~~of $17.7 million in the three months ended March 31, 2019 was comparable to the $18.6 million in the three months ended March 31, ~~2018, compared to $54.7 million in the three months ended March 31, 2017.~~2018. The ~~decrease in~~ cash used in operations was ~~largely~~primarily attributable to ~~changes in accounts receivable, accounts payable and accrued expenses, which were partially offset by~~meeting our working capital needs for the ~~changes to net contracts in progress and advance billings noted above.~~periods then ended.

Our net cash used in investing activities increased by ~~$0.8~~$28.8 million to $44.5 million in the three months ended March 31, 2019 compared to $15.7 million in the three months ended March 31, ~~2018 compared to $14.9 million in the three months ended March 31, 2017.~~2018. The increase was primarily attributable to an increase in purchases of property, plant and equipment ~~which were partially offset~~of $26.9 million.

Our net cash provided by ~~a decrease~~financing activities increased by $80.7 million to $55.4 million in the ~~purchases of securities and a decrease caused by the return of capital associated with one of our equity method investments related~~three months ended March 31, 2019, compared to ~~a joint venture that was transitioned in 2017.~~

~~Our net~~ cash used in financing activities ~~increased by $64.0 million to~~of $25.3 million in the three months ended March 31, ~~2018, compared to cash provided by financing activities of $38.7 million in the three months ended March 31, 2017.~~2018. The increase was primarily attributable to ~~a decrease~~an increase in net borrowings ~~and repayments under the Amended Credit Agreement~~ of ~~$50.1~~$106.0 million, ~~when compared to the same period~~which was partially offset by an increase in repurchases of ~~the prior year.~~common shares of $20.0 million.

At March 31, ~~2018,~~2019, we had restricted cash and cash equivalents totaling ~~$8.0~~$6.7 million, ~~$2.6~~$2.7 million of which was held for future decommissioning of facilities (which is included in other assets on our condensed consolidated balance sheets) and ~~$5.4~~$4.0 million of which was held to meet reinsurance reserve requirements of our captive insurer.

At March 31, ~~2018,~~2019, we had short-term and long-term investments with a fair value of ~~$9.9~~$12.2 million. Our investment portfolio consists primarily of U.S. Government and agency securities, corporate bonds and equities, mutual funds and asset-backed securities. Our ~~investments~~debt securities are carried at fair value and are either classified as trading, with unrealized gains and losses reported in earnings, or as available-for-sale, with unrealized gains and losses, net of tax, being reported as a component of other comprehensive income. Our equity securities are carried at fair value with the unrealized gains and losses reported in earnings.

Based on our liquidity position, we believe we have sufficient cash and letter of credit and borrowing capacity to fund our operating requirements for at least the next 12 months.


Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposures to market risks have not changed materially from those disclosed in Item 7A included in Part II of our ~~2017~~2018 10-K.


Item 4.	CONTROLS AND PROCEDURES

As of the end of the period covered by this quarterly report, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) adopted by the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act")). This evaluation was conducted under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Our disclosure controls and procedures were developed through a process in which our management applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding the control objectives. You should note that the design of any system of disclosure controls and procedures is based in part upon various assumptions about the likelihood of future events, and we cannot assure you that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Based on the evaluation referred to above, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures are effective as of March 31, ~~2018~~2019 to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and such information is accumulated and communicated to management as appropriate to allow timely decisions regarding disclosure. There has been no change in our internal control over financial reporting during the quarter ended March 31, ~~2018~~2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION


Item 1.	LEGAL PROCEEDINGS

For information regarding ongoing investigations and litigation, see Note 45 to our unaudited condensed consolidated financial statements in Part I of this report, which we incorporate by reference into this Item.


Item 1A.	RISK FACTORS

In addition to the other information in this report, the other factors presented in Item 1A Risk Factors in our ~~2017~~2018 10-K are some of the factors that could materially affect our business, financial condition or future results. There have been no material changes to our risk factors from those disclosed in our ~~2017~~2018 10-K.


Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Since November 2012, we have periodically announced that our Board of Directors has authorized share repurchase programs. The following table provides information on our purchases of equity securities during the quarter ended March 31, ~~2018.~~2019. Any shares purchased that were not part of a publicly announced plan or program are related to repurchases of common stock pursuant to the provisions of employee benefit plans that permit the repurchase of shares to satisfy statutory tax withholding obligations.

Period
Total number
of shares
purchased ⁽¹⁾

Average
price
paid
per share
Total number of shares purchased as part of publicly announced plans or programs
Approximate dollar
value of shares that
may yet be
purchased under the
plans or programs
(in millions) ⁽²⁾
January 1, 2018 - January 31, 2018 5,648
$ 62.57
—
$ 193.0
February 1, 2018 - February 28, 2018 2,696
$ 63.38
—
$ 150.0
March 1, 2018 - March 31, 2018 84,138
$ 64.37
—
$ 150.0
Total 92,482
$ 64.23
—



Period	Total number of shares purchased ⁽¹⁾	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) ⁽²⁾
January 1, 2019 - January 31, 2019	275,879	$	42.22	275,879	$	173.7
February 1, 2019 - February 28, 2019	181,639	$	49.66	167,998	$	165.3
March 1, 2019 - March 31, 2019	161,483	$	51.76	—	$	165.3
Total	619,001	$	46.89	443,877


(1)	Includes ~~5,648, 2,696~~13,641 and ~~84,138~~161,483 shares repurchased during ~~January,~~ February and March, respectively, pursuant to the provisions of employee benefit plans that permit the repurchase of shares to satisfy statutory tax withholding obligations.

(2)

On November ~~4, 2015,~~6, 2018, we announced that our Board of Directors authorized us to repurchase an indeterminate number of shares of our common stock at an aggregate market value of up to $300 million during a two-year period that expired on February 26, 2018. On February 27, 2017, we announced that our Board of Directors authorized us to repurchase an indeterminate number of shares of our common stock at an aggregate market value of up to $150$250 million during a three-year period that expires on ~~February 24, 2020. The February 2017 authorization was in addition to the share repurchase amount authorized in~~ November ~~2015.~~6, 2021.


Item 6.	EXHIBITS



Exhibit Number		Description
2.1		Master Separation Agreement dated as of July 2, 2010 between McDermott International, Inc. and the Company (incorporated by reference to Exhibit 2.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 (File No. 1-34658)).

2.2		Master Separation Agreement, dated as of June 8, 2015, between the Company and Babcock & Wilcox Enterprises, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the SEC on June 9, 2015 (File No. 1-34658)).

3.1		Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 (File No. 1-34658)).

3.2		Certificate of Amendment to Restated Certificate of Incorporation dated June 30, 2015 (incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 1-34658)).

3.3		Amended and Restated Bylaws (incorporated by reference to Exhibit ~~3.2~~3.3 to the Company's Current Report on Form 8-K filed with the SEC on ~~June 9, 2015~~March 5, 2019 (File No. 1-34658)).

4.1		Indenture, dated May 24, 2018, among BWX Technologies, Inc., each of the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on May 24, 2018 (File No. 1-34658)).

4.2		Form of 5.375% Senior Note Due 2026 (included in Exhibit 4.1) (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed with the SEC on May 24, 2018 (File No. 1-34658)).

10.1*		Form of ~~Non-Employee Director Grant Letter.~~

10.2*		~~Form of 2018~~2019 Performance Restricted Stock Unit Grant Agreement for Employees.

10.310.2		Form of ~~2018~~2019 Restricted Stock Unit Grant Agreement for Employees.

31.1		Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer.

31.2		Rule 13a-14(a)/15d-14(a) certification of Chief Financial Officer.

32.1		Section 1350 certification of Chief Executive Officer.

32.2		Section 1350 certification of Chief Financial Officer.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document



*	Management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.




		BWX TECHNOLOGIES, INC.

		/s/ David S. Black
	By:	David S. Black
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer and Duly Authorized
		Representative)

		/s/ Jason S. Kerr
	By:	Jason S. Kerr
		Vice President and Chief Accounting Officer
		(Principal Accounting Officer and Duly Authorized
		Representative)

May ~~4, 2018~~1, 2019

3431



	March 31, 2018
	Current Method		Historical Method
	(In thousands)
Assets:
Contracts in progress	$	337,375	$	365,192
Deferred Income Taxes	$	84,727	$	85,443
Liabilities:
Accrued liabilities – other	$	51,662	$	49,327
Advance billings on contracts	$	77,140	$	117,174
Stockholders' Equity:
Retained earnings	$	1,053,090	$	1,043,924



	Three Months Ended March 31, 2018
	Current Method		Historical Method
	(In thousands)
Revenues	$	457,463	$	465,530
Cost of operations	$	327,364	$	334,542
Operating Income	$	79,888	$	80,777
Provision for Income Taxes	$	18,603	$	18,732
Net Income	$	66,413	$	67,173



	Asset and Liability Derivatives
	March 31, 2018		December 31, 2017
	(In thousands)
Derivatives Designated as Hedges:
FX Forward Contracts:
Location
Accounts receivable – other	$	295	$	250
Other Assets	$	390	$	348
Accounts payable	$	54	$	177
Other Liabilities	$	62	$	93