BWX Annual Report 2019 | Quarterlytics

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FY2019 Annual Report · BWX

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Financial Highlights

$1,895

$1,800

$1,688

($ in millions, except per share amounts)

2017

2018

2019

Revenue

$1,688

$1,800

$1,895

GAAP Operating Income

$292

$305

$326

Non-GAAP Operating Income*

$287

$308

$331

GAAP Operating Margin

17.3%

16.9%

17.2%

Non-GAAP Margin*

17.0%

17.1%

17.5%

Revenue
$ in millions

$2.62

$2.39

GAAP EPS

$1.47

$2.27

$2.55

$2.05

Non-GAAP EPS*

$2.05

$2.39

$2.62

Cash Returned to Shareholders

Dividends

Share Repurchases

$42

$64

$215

$65

$20

Record $5.3B year-ending backlog

BWXT Total
Shareholder Return
Adjusted for dividends

(5 years)

BWXT
Up 202%

S&P 500
Up 74%

Cover: U.S. Navy’s Nimitz-class, nuclear-powered supercarrier USS Ronald Reagan (CVN 76) sails in the Coral Sea

* A reconciliation of non-GAAP to the comparable GAAP figures can be found at the end of this annual report

Non-GAAP EPS*

$331

$308

$287

Non-GAAP Operating Income*
$ in millions

$0.17

$0.16

$0.11

2Q17-4Q17 1Q18-4Q18 1Q19-4Q19

Quarterly Dividend Per Share

Dear Shareholders

2019 was an exciting year for BWXT. With continued strength and
success in our Navy business, the introduction of new product
lines in fuel and medical radioisotopes and advancements in the
additive manufacturing of nuclear materials, we are poised for
growth and innovation into the new decade.

BWXT finished the year with record-setting revenue of $1.9 billion,
representing a 5% increase from 2018. Full-year earnings per share
rose 10% from 2018 to a company high of $2.62, and we returned
$85 million to shareholders through share repurchases and dividends
approved by the BWXT Board of Directors.

Nuclear Operations
Our largest business segment, the Nuclear Operations Group,
is driven by a sustained focus on execution and attention to detail.
We continued to build our backlog throughout the year with almost
$4 billion in contract awards for naval nuclear propulsion work.
These include $2.1 billion for the manufacture of reactor components
and fuel for Virginia and Columbia-class submarines and $806 million
for the procurement of long-lead materials. Additionally, an award for
$1 billion to support Ford-class aircraft carrier nuclear propulsion
construction was received.

In October, we announced the restart and expansion of the
Tri-structural Isotropic (TRISO) nuclear fuel production line.
Our existing infrastructure at one of our Nuclear Regulatory
Commission Category 1 licensed facilities, coupled with our
history of successful production and testing of this fuel type,
position us well for a variety of promising applications and
rising customer demand.

Nuclear Power
The Nuclear Power Group gained momentum in the
medical isotopes business, announcing production plans for
Germanium-68 (Ge-68) and receiving U.S. Food & Drug
Administration (FDA) approval for the sale of a generic version of
Indium In-111 Oxyquinoline Solution in the United States. Our
focus on industrializing the Mo-99 technology remains steadfast,
and we continue progress towards commercialization.

In January 2020, BWXT Canada Ltd. (BWXT Canada) acquired
Laker Energy Products, Inc. This transaction broadens our portfolio
of critical CANDU® components for a global customer base and
strengthens our brand in Canadian commercial nuclear power.

Nuclear Services
The Nuclear Services Group’s joint venture, Syncom Space Services,
was awarded a contract option worth up to $1.3 billion, if fully
exercised, on its project at NASA’s Stennis Space Center and
Michoud Assembly Facility and received notice of the U.S. Department
of Energy’s intent to extend our Portsmouth Decontamination and
Decommissions contract. In 2020, we are tracking the award of the
Hanford Tank Closure Contract and competing for DOE opportunities
at Savannah River, Oak Ridge and Idaho.

This business continues to make progress on conceptual design and
testing efforts with NASA on an in-space flight demonstration project
for a Nuclear Thermal Propulsion reactor, aimed at successfully
operating in space in the 2020s. I had the honor and privilege
of testifying before Vice President Mike Pence and members of
the National Space Council as well as the opportunity to host the
President’s science advisor Dr. Kelvin Droegemeier and NASA
Administrator Jim Bridenstine, who stated that the path to Mars will
very likely go through BWXT and Lynchburg, Virginia. The application
of nuclear technologies in space has the potential to push the human
boundaries of space exploration to the Moon and Mars.

Looking Forward
Our 2019 results demonstrate our ability to evolve as emerging
demands for advanced nuclear technologies materialize. Our high
standards of safety, quality and innovation are unwavering as we
pursue our vision of employing nuclear technology to solve some of
the world’s most important problems.

We look forward to 2020 with expectations of continued growth and
investments that maximize shareholder return and position BWXT for
continued success in the coming decade. I will close by thanking our
employees for their focus and dedication as we continue to build this
remarkable business.

BWXT is People-Strong, Innovation Driven.

Rex D. Geveden
President and Chief Executive Officer

BWX Techno lo gies, Inc. 2019 Annual Report 1

2019 Highlights

Indium In-111 Oxyquinoline Solution
approved by FDA for sale in the U.S.

$2.1 billion contract award for the manufacture
of reactor components and fuel for Virginia and
Columbia-class submarines

TRISO nuclear fuel production
line restart and expansion

Company Overview

At BWX Technologies, Inc. (BWXT), we are People Strong,

Innovation Driven. Headquartered in Lynchburg, Va., BWXT

provides safe and effective nuclear solutions for national

security, clean energy, environmental remediation, nuclear

medicine and space exploration. With approximately

6,600 employees, BWXT has 12 major operating sites

in the U.S. and Canada. In addition, BWXT joint ventures

provide management and operations at more than a dozen

U.S. Department of Energy and NASA facilities.

2 BWX Technologi es, Inc. 2019 A nn ual Re por t

$806 million contract award
for the procurement of long-lead
materials required for naval reactor
component manufacturing

Strategic acquisition of
Laker Energy Products, Inc.

$1 billion contract award to
support Ford-class aircraft carrier
nuclear propulsion construction

Business Segments Segment non-GAAP Operating Income ($ in millions)

$56.4

$17.1

$298.3

Nuclear Operations Group

Nuclear Power Group

Nuclear Services Group

Manufactures naval nuclear

Designs, services, engineers

Provides technical operations at

reactors for U.S. submarines and

and manufactures components

government sites; U.S. commercial

aircraft carriers; supplies research

and fuel for Canada Deuterium

plant services; advanced

reactor fuel and elements for

Uranium (CANDU) nuclear power

technology developments in space

universities, national laboratories

plants; medical isotope and

power and medical isotopes

and international customers

radiopharmaceutical production for

hospitals and radiopharmacies

BWX Techno logies, Inc. 2019 Annu al Repor t 3

Corporate Information

Board of Directors

John A. Fees
Chairman

Rex D. Geveden
Director

Jan A. Bertsch (1)* (2)
Director

Gerhard F. Burbach (3)
Director

James A. Jaska (3)*
Director

Kenneth J. Krieg (2)
Director

Robb A. LeMasters (1) (2)
Director

Leland D. Melvin (3)
Director

Robert L. Nardelli (1) (3)
Director

Barbara A. Niland (1) (2)*
Director

Charles W. Pryor Jr.
Lead Independent Director

1 Audit and Finance Committee
2 Compensation Committee
3 Governance Committee
* Committee Chair

Company Officers

Rex D. Geveden
President and
Chief Executive Officer

Joel W. Duling
President,
Nuclear Operations Group

John R. MacQuarrie
President,
Nuclear Power Group

William E. Russell
Senior Vice President
and Chief Technology Officer

David S. Black
Senior Vice President
and Chief Financial Officer

Jason S. Kerr
Vice President and
Chief Accounting Officer

Kenneth R. Camplin
President,
Nuclear Services Group

Richard W. Loving
Senior Vice President
and Chief Administrative Officer

Thomas E. McCabe
Senior Vice President,
General Counsel, Chief
Compliance Officer and
Corporate Secretary

Suzanne C. Sterner
Senior Vice President,
Government Relations

4 BWX Tec hnologies, In c. 20 19 An n ual Repo rt

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________

_____________________________________________________________

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 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 Number 001-34658
_____________________________________________________________

BWX TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)
_____________________________________________________________

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

Delaware

80-0558025

800 Main Street, 4th Floor
Lynchburg, Virginia

(Address of principal executive offices)

24504

(Zip Code)

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

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class

Common Stock, $0.01 par value

Trading Symbol(s)

BWXT

Name of each exchange on which registered

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None
_____________________________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such
files). Yes

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. (Check one):

Large accelerated filer

Non-accelerated filer

Emerging growth company

Accelerated filer

Smaller reporting 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

The aggregate market value of the registrant's common stock held by nonaffiliates of the registrant on the last business day of the registrant's most
recently completed second fiscal quarter (based on the closing sales price on the New York Stock Exchange on June 30, 2019) was approximately $5.0 billion.

The number of shares of the registrant's common stock outstanding at February 20, 2020 was 95,083,647.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive proxy statement for the 2020 Annual Meeting of Stockholders to be held on May 1, 2020 are incorporated by

reference into Part III of this Form 10-K.

[This page intentionally left blank]

BWX TECHNOLOGIES, INC.
INDEX – FORM 10-K

PART I

PAGE

Item 1.

Business

General
Business Segments

Contracts
Backlog

Competition
Joint Ventures

Customers
Raw Materials and Suppliers

Employees
Patents and Technology Licenses
Research and Development Activities

Hazard Risks and Insurance

Governmental Regulations and Environmental Matters

Cautionary Statement Concerning Forward-Looking Statements

Item 1A.

Item 1B.

Item 2.

Item 3.
Item 4.

Available Information

Risk Factors

Unresolved Staff Comments

Properties

Legal Proceedings
Mine Safety Disclosures

PART II

Item 5.
Item 6.

Item 7.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities
Selected Financial Data

Management's Discussion and Analysis of Financial Condition and Results of Operations

General
Critical Accounting Policies and Estimates
Results of Operations

Years Ended December 31, 2019, 2018 and 2017(cid:3)

Effects of Inflation and Changing Prices
Liquidity and Capital Resources

Item 7A.
Item 8.

Quantitative and Qualitative Disclosures about Market Risk
Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

December 31, 2019 and 2018(cid:3)

Consolidated Statements of Income

Years Ended December 31, 2019, 2018 and 2017

1
1

3
5

5
6
7

7
7

12
13

29
31

32
33

36
39
39
42

Consolidated Statements of Comprehensive Income
Years Ended December 31, 2019, 2018 and 2017(cid:3)

Consolidated Statements of Stockholders' Equity

Years Ended December 31, 2019, 2018 and 2017(cid:3)

Consolidated Statements of Cash Flows

Years Ended December 31, 2019, 2018 and 2017

Notes to Consolidated Financial Statements

Item 9.

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

Item 9A.

Controls and Procedures

Disclosure Controls and Procedures
Management’s Report on Internal Control Over Financial Reporting
Changes in Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm

Item 9B.

Other Information

PART III

Item 10.
Item 11.

Item 12.

Item 13.

Item 14.

Directors, Executive Officers and Corporate Governance
Executive Compensation

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters

Certain Relationships and Related Transactions, and Director Independence

Principal Accounting Fees and Services

PART IV

Item 15.
Item 16.

Exhibits, Financial Statement Schedules
Form 10-K Summary

Signatures

PAGE

51
52

93
93
93
94

95
95

96
99

100

Statements we make in this Annual Report on Form 10-K ("Report"), which express a belief, expectation or intention, as well
as those that are not historical fact, are forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject to various risks, uncertainties and assumptions, including
those to which we refer under the headings "Cautionary Statement Concerning Forward-Looking Statements" and "Risk
Factors" in Items 1 and 1A of Part I of this Report. In this Report, unless the context otherwise indicates, "we," "us" and "our"
mean BWX Technologies, Inc. ("BWXT" or the "Company") and its consolidated subsidiaries.

Item 1.

BUSINESS

General

PART I

BWX Technologies, Inc. is a specialty manufacturer of nuclear components, a developer of nuclear technologies and a
service provider with an operating history of more than 100 years. Our core businesses focus on the design, engineering and
manufacture of precision naval nuclear components, reactors and nuclear fuel for the U.S. Government. We also provide special
nuclear materials processing, environmental site restoration services, and a variety of products and services to customers in the
nuclear power industry, as well as critical medical radioisotopes and radiopharmaceuticals. While we provide a wide range of
products and services, our business segments are heavily focused on major projects. At any given time, a relatively small
number of projects can represent a significant part of our operations.

On June 30, 2015, we completed the spin-off of our former Power Generation business (the "spin-off") into an
independent, publicly traded company named Babcock & Wilcox Enterprises, Inc. ("BWE"). We have presented the notes to
our consolidated financial statements on the basis of continuing operations, unless otherwise stated.

Business Segments

We operate in three reportable segments: Nuclear Operations Group, Nuclear Power Group and Nuclear Services Group.
For financial information regarding each of our segments and financial information regarding geographic areas, see Note 15 to
our consolidated financial statements included in this Report. For further details regarding each segment's facilities, see Item 2,
"Properties." 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 through strategic investments and acquisitions to
expand and complement our existing businesses. We would expect to fund these opportunities with cash generated from
operations or by raising additional capital through debt, equity or some combination thereof.

Nuclear Operations Group

Through this segment, we engineer, design and manufacture precision naval nuclear components, reactors and nuclear

fuel for the U.S. Department of Energy ("DOE")/National Nuclear Security Administration's ("NNSA") Naval Nuclear
Propulsion Program. In addition, we perform development and fabrication activities for missile launch tubes for U.S. Navy
submarines.

Our Nuclear Operations Group segment specializes in the design and manufacture of close-tolerance and high-quality

equipment for nuclear applications. In addition, we are a leading manufacturer of critical nuclear components, fuels and
assemblies for government and limited other uses. We have supplied nuclear components for DOE programs since the 1950s
and are the largest domestic supplier of research reactor fuel elements for colleges, universities and national laboratories. We
also convert or downblend high-enriched uranium into low-enriched fuel for use in commercial reactors to generate electricity.
In addition, we have over 100 years of experience in supplying components for defense applications.

We work closely with the DOE-supported nuclear non-proliferation program. Currently, this program is assisting in the

development of a high-density, low-enriched uranium fuel required for high-enriched uranium test reactor conversions. We
have also been a leader in the receipt, storage, characterization, dissolution, recovery and purification of a variety of uranium-
bearing materials. All phases of uranium downblending and uranium recovery are performed at our Lynchburg, Virginia and
Erwin, Tennessee sites.

The demand for nuclear components by the U.S. Government determines a substantial portion of this segment's backlog.

number disclosed in long-range shipbuilding plans issued prior to February 2018. We expect the U.S. Navy's new shipbuilding
plan will require us to make additional capital expenditures and investment in personnel to meet this growth in demand.

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. We have supplied the nuclear industry with more than 1,300 large, heavy components worldwide and
we are the only commercial heavy nuclear component manufacturer in North America. This segment is also 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 in-depth knowledge comes from over 50 years of
experience in the design, manufacturing, commissioning and service of nuclear power generation equipment. Additionally, this
segment is a leading global manufacturer and supplier of critical medical radioisotopes and radiopharmaceuticals.

The Nuclear Power Group segment specializes in performing full-scope, prototype design work coupled with

manufacturing integration. This segment's capabilities include:

•

steam generation and separation equipment design and development;

thermal-hydraulic design of reactor plant components;

commercial nuclear fuel manufacturing and design;

• nuclear fuel handling system design, manufacturing, delivery, installation and commissioning;

•

containers for the storage of spent nuclear fuel and other high-level waste;

structural and thermal-hydraulic design and vibration analysis for heat exchangers;

structural component design for precision manufacturing;

• materials expertise in high-strength, low-alloy steels and nickel-based materials;

• material procurement of tubing, forgings and weld wire;

• metallographic and chemical analysis; and

• manufacture and supply of critical medical radioisotopes and radiopharmaceuticals for research, diagnostic and

therapeutic uses.

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.

Nuclear Services Group

Through this segment, we provide various services to the U.S. Government, including special nuclear materials
processing, environmental site restoration services and management and operating services for various U.S. Government-
owned facilities. These services are provided primarily to the DOE, including the NNSA, the Office of Nuclear Energy, the
Office of Science and the Office of Environmental Management, and NASA.

This segment's principal operations include:

• managing and operating environmental management sites;

• managing spent nuclear fuel and transuranic waste for the DOE;

• managing and operating nuclear production facilities;

• providing critical skills and resources for DOE sites; and

• managing and operating space flight hardware and test facilities for NASA.

This segment is also engaged in inspection and maintenance services for the commercial nuclear industry primarily in the

U.S. These services include steam generator, heat exchanger and balance of plant inspection and 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.

Our Nuclear Services Group segment's overall activity depends primarily on authorized spending levels of the DOE,

including the NNSA, the Office of Nuclear Energy, the Office of Science and the Office of Environmental Management, and
NASA. We manage and operate complex, high-consequence nuclear and national security operations for the DOE and the
NNSA, primarily through our joint ventures, as further discussed under the caption "Joint Ventures" below. In addition, this
segment's activities associated with the U.S. commercial nuclear industry depend on the demand and competitiveness of
nuclear power in the U.S. and our ability to successfully obtain commercial nuclear contracts.

Acquisitions

Laker Energy Products Ltd.

On January 2, 2020, our subsidiary BWXT Canada Ltd. acquired Laker Energy Products Ltd. ("Laker Energy Products").
Laker Energy Products is a global supplier of nuclear-grade materials and precisely machined components for CANDU nuclear
power utilities and employs approximately 140 personnel. Laker Energy Products will be reported as part of our Nuclear Power
Group segment.

Nordion Medical Isotope Business

On July 30, 2018, our subsidiary BWXT ITG Canada, Inc. acquired the Nordion medical isotope business (the "MI

business"). 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 addition to 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 a number of future
radioisotope-based imaging, diagnostic and therapeutic products. This business is reported as part of our Nuclear Power Group
segment.

See Note 2 to our consolidated financial statements included in this Report for additional information on acquisitions.

Contracts

We execute our contracts through a variety of methods, including fixed-price incentive fee, cost-plus, cost-reimbursable,
firm fixed-price or some combination of these methods. We generally recognize our contract revenues and related costs on an
over time basis. Accordingly, we review contract price and cost estimates regularly as the work progresses and reflect
adjustments in profit proportionate to the percentage of completion in the period when we revise those estimates. To the extent
that these adjustments result in a reduction or an elimination of previously reported profits with respect to a project, we would
recognize a charge against current earnings, which could be material.

We have contracts that extend beyond one year. Most of our long-term contracts have provisions for progress payments.

We attempt to cover anticipated increases in labor, material and service costs of our long-term contracts either through an
estimate of such changes, which is reflected in the original price, or through risk-sharing mechanisms, such as escalation or
price adjustments for items such as labor and commodity prices.

In the event of a contract deferral or cancellation, we generally would be entitled to recover costs incurred, settlement

expenses and profit on work completed prior to deferral or termination. Significant or numerous cancellations could adversely
affect our business, financial condition, results of operations and cash flows.

Nuclear Operations Group

The majority of the revenue generated by this segment is from long-term contracts with the U.S. DOE/NNSA's Naval
Nuclear Propulsion Program. Unless otherwise specified in a contract, allowable and allocable costs are billed to contracts with
the U.S. Government in accordance with the Federal Acquisition Regulation (the "FAR") and the related U.S. Government Cost

Accounting Standards ("CAS"). Examples of costs that may be incurred by us and not billable to the U.S. Government in
accordance with the requirements of the FAR and CAS regulations include, but are not limited to, unallowable employee
compensation and benefit costs, lobbying costs, interest, certain legal costs and charitable donations.

Most of our contracts in this segment are fixed-price incentive fee contracts that provide for reimbursement of allowable

costs incurred plus a fee and generally require that we use our best efforts to accomplish the scope of the work within some
specified time and stated dollar limitation. Fees can be established in terms of dollar value or percentage of costs. Award and
incentive fees are determined and earned based on customer evaluation of our performance against negotiated criteria,
primarily related to cost, and are intended to provide motivation for excellence in contract performance. Incentive fees that are
based on cost provide for an initially negotiated fee to be adjusted later, typically using a formula to measure performance
against the associated criteria, based on the relationship of total allowable costs to total target costs. Award and incentive fees
represent variable consideration that we include in revenue when there is sufficient evidence to determine that the variable
consideration is not constrained.

Certain of our U.S. Government contracts span one or more base years and multiple option years. The U.S. Government
generally has the right not to exercise option periods and may not exercise an option period for various reasons including, but
not limited to, annual funding determinations. In addition, contracts between the U.S. Government and its prime contractors
usually contain standard provisions for termination at the convenience of the U.S. Government or the prime contractor. As a
U.S. Government contractor, we are subject to federal regulations under which our right to receive future awards of new federal
contracts would be unilaterally suspended or barred if we were convicted of a crime or indicted based on allegations of a
violation of specific federal statutes. In addition, some of our contracts with the U.S. Government require us to provide advance
notice in connection with any contemplated sale or shut down of the relevant facility. In each of those situations, the U.S.
Government has an exclusive right to negotiate a mutually acceptable purchase of the facility.

Nuclear Power Group

Contracts in this segment are usually awarded through a competitive bid process. Factors that customers may consider
include price, plant or equipment availability, technical capabilities of equipment and personnel, efficiency, safety record and
reputation. Certain of these contracts are fixed-price contracts in which the specified scope of work is agreed to for a pre-
determined price that is generally not subject to adjustment, regardless of costs incurred by the contractor, unless changes in
scope are authorized by the customer. Fixed-price contracts entail more risk to us because they require us to predetermine both
the quantities of work to be performed and the costs associated with executing the work. Remaining contracts are primarily
time-and-materials contracts, which result in us recovering costs incurred in accordance with the contract plus a fee.

Our arrangements with customers may require us to provide letters of credit, bid and performance bonds or guarantees to

secure bids or performance under contracts, which may involve significant amounts for contract security.

Nuclear Services Group

This segment's principal operations include the management and operation of nuclear production facilities, environmental

management sites and the management of spent nuclear fuel and transuranic waste for the DOE. These activities are primarily
accomplished through our participation in joint ventures with other contractors as further discussed under the caption "Joint
Ventures" below.

The contracts for the management and operation of U.S. Government facilities are awarded through a complex and
protracted procurement process. These contracts are generally structured as five-year contracts with options for up to five
additional years, which are exercisable by the customer, or include provisions whereby the contract durations can be extended
as a result of the achievement of certain performance metrics. These are generally cost-reimbursement contracts that include an
award fee that is primarily based on annual performance, with monthly provisional fee payments and annual true-up payments.
Depending on the type of contract, the contractor may be required to supply working capital, which is reimbursed by the U.S.
Government through regular invoicing.

This segment also serves the U.S. commercial nuclear industry and customers for our advanced technology platforms

primarily through the use of fixed-price contracts that are awarded following a competitive bid process. Fixed-price contracts
entail more risk to us because the price has been pre-determined and is generally not subject to adjustment, regardless of costs
incurred, unless authorized by the customer.

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 reporting period.

Our backlog is equal to our remaining performance obligations under contracts that meet the criteria in Financial

Accounting Standards Board ("FASB") Topic Revenue from Contracts with Customers, as discussed in Note 3 to our
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.

Our backlog at December 31, 2019 and 2018 was as follows:

Nuclear Operations Group
Nuclear Power Group
Nuclear Services Group
Total Backlog

December 31,
2019

December 31,
2018

(In approximate millions)

4,515
730
43
5,288

85% $
14%
1%
100% $

2,637
804
38
3,479

76%
23%
1%
100%

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. See Note 4 to our consolidated financial statements included in this
Report for financial information on our equity method investments.

Of the backlog at December 31, 2019, we expect to recognize revenues as follows:

Nuclear Operations Group
Nuclear Power Group
Nuclear Services Group
Total Backlog

2020

2021

Thereafter

Total

(In approximate millions)

1,396
217
32
1,645

1,013
174
1
1,188

2,106
339
10
2,455

4,515
730
43
5,288

As of December 31, 2019, our Nuclear Operations Group segment's backlog with the U.S. Government was $4,046.6

million, $427.4 million of which had not yet been funded.

As of December 31, 2019, our Nuclear Power Group segment had no backlog with the U.S. Government.

As of December 31, 2019, our Nuclear Services Group segment's backlog with the U.S. Government was $9.5 million,

$0.1 million of which had not yet been funded.

Major new awards from the U.S. Government are typically received following Congressional approval of the budget for

the U.S. 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 2019, we received awards from the U.S. Government with a
combined value in excess of $3.9 billion, inclusive of unexercised options, approximately $2.8 billion of which had been added
to backlog as of December 31, 2019. The value of unexercised options excluded from backlog as of December 31, 2019 was
approximately $1.1 billion, which is expected to be exercised through 2025, subject to annual Congressional appropriations.

Competition

The competitive environments in which each segment operates are described below.

Nuclear Operations Group. We have specialized technical capabilities that have allowed us to be a valued supplier of

nuclear components and fuel for the U.S. Government's naval nuclear fleet since the 1950s. Because of the technical and
regulatory standards required to meet U.S. Government contracting requirements for nuclear components and fuel and the
barriers to entry present in this type of environment, competition in this segment is limited. The primary bases of limited
competition for this segment are price, high capital investment, technical capabilities, high regulatory licensing costs and
quality of products and services. In addition, a significant portion of the designs, processing and final product are classified by
the U.S. Government, requiring applicable personnel to obtain and maintain U.S. Government security clearances.

Nuclear Power Group. Our Nuclear Power Group segment supplies heavy nuclear components, specialized engineering

and maintenance services, nuclear fuel, fuel handling systems and tooling delivery systems for CANDU reactors. This segment
competes with a number of companies specializing in nuclear capabilities including, but not limited to, Framatome, Cameco
Corporation, Doosan Heavy Industries & Construction, E.S. Fox Limited, AECON Group Inc., Bechtel National, Inc.,
Westinghouse Electric Corporation and SNC-Lavalin Group, Inc. The primary bases of competition for this segment are price,
technical capabilities, quality, timeliness of performance, breadth of products and services and willingness to accept project
risks.

Nuclear Services Group. Through this segment, we are engaged in the management and operation of U.S. Government

facilities and the delivery of environmental remediation services (decontamination and decommissioning) associated with U.S.
Government-owned nuclear facilities. Many of our government contracts are bid as a joint venture with one or more
companies, in which we have a majority or a minority position. The performance of the prime or lead contractor can impact our
reputation and our future competitive position with respect to that particular project and customer. Our primary competitors in
the delivery of goods and services to the U.S. Government and the operation of U.S. Government facilities include, but are not
limited to, Bechtel National, Inc., Amentum, Fluor Corporation, Lockheed Martin Corporation, Jacobs Engineering Group,
Inc., Northrop Grumman Corporation, Huntington Ingalls Industries, Inc., Honeywell International, Inc. and Leidos, Inc. The
primary bases of competition for this segment are experience, past performance, availability of key personnel and technical
capabilities.

The Nuclear Services Group segment is also engaged in the commercial nuclear industry primarily in the U.S. This
portion of the segment competes with a number of companies specializing in commercial nuclear engineering and maintenance
services including Framatome, Westinghouse Electric Corporation and other third-tier service suppliers. The primary bases of
competition for this segment are price, technical capabilities, quality, timeliness of performance, breadth of products and
services and willingness to accept project risks.

Joint Ventures

We share in the ownership of a variety of entities with third parties, primarily through corporations, limited liability
companies and partnerships, which we refer to as "joint ventures." Through these joint venture arrangements, our Nuclear
Services Group segment primarily manages and operates nuclear facilities and associated plant infrastructure, constructs large
capital facilities, provides safeguards and security for inventory and assets, supports and conducts research and development
for advanced energy technology and manages environmental programs for the DOE, the NNSA and NASA. We generally
account for our investments in joint ventures under the equity method of accounting. Certain of our Nuclear Services Group
segment unconsolidated joint ventures are described below.

• Los Alamos Legacy Cleanup Contract. Newport News Nuclear BWXT – Los Alamos, LLC, a limited liability

company formed in 2017 by Stoller Newport News Nuclear, Inc., a subsidiary of Huntington Ingalls Industries, Inc.'s
Technical Solutions division, and BWXT Technical Services Group, Inc. ("BWXT TSG"), was awarded a contract to
perform environmental monitoring and remediation, waste management and disposition, and decontamination and
decommissioning at the Los Alamos National Laboratory site and surrounding private and government-owned lands.

• Lawrence Livermore National Laboratory. Lawrence Livermore National Security, LLC, a limited liability

company formed in 2006 by the University of California, Bechtel National, Inc., Amentum and BWXT Government
Group, Inc., manages and operates Lawrence Livermore National Laboratory located in Livermore, California. The
laboratory serves as a national resource in science and engineering, focused on national security, energy, the
environment and bioscience, with special responsibility for nuclear devices.

• Savannah River Liquid Waste Disposition Program. Savannah River Remediation LLC, a limited liability company
formed in 2009 by Amentum, Bechtel National, Inc., CH2M Hill Constructors, Inc. and BWXT TSG, became the
liquid waste contractor for the DOE's Savannah River Site located in Aiken, South Carolina. The objective of this
program is to achieve closure of the Savannah River Site liquid waste tanks in compliance with the Federal Facilities
Agreement, utilizing the Defense Waste Processing Facility and Saltstone Facility.

• Portsmouth Gaseous Diffusion Plant D&D. Fluor-BWXT Portsmouth LLC is a limited liability company formed by
Fluor Federal Services, Inc. and BWXT TSG to provide nuclear operations, decontamination and decommissioning
services at the Portsmouth Gaseous Diffusion Plant in Portsmouth, Ohio.

• West Valley Demonstration Project Phase I Decommissioning and Facility Disposition. CH2M Hill-BWXT West
Valley, LLC is a limited liability company formed by CH2M Hill Constructors, Inc., BWXT TSG and Environmental
Chemical Corporation. Services provided include project management and support services, site operations,
maintenance, utilities, high-level waste canister relocation, facility disposition, waste tank farm management, U.S.
Nuclear Regulatory Commission ("NRC") licensed disposal area management, waste management and nuclear
materials disposition, and safeguards and security.

• Waste Isolation Pilot Plant. Nuclear Waste Partnership, LLC is a limited liability company formed by Amentum,

BWXT TSG and Areva Federal Services, LLC as the major subcontractor that manages and operates the DOE's Waste
Isolation Pilot Plant in Carlsbad, New Mexico.

• Synergy Achieving Consolidated Operations & Maintenance (SACOM). Syncom Space Services, LLC is a limited
liability company formed by PAE Applied Technologies, LLC and BWXT Nuclear Operations Group, Inc. to provide
facility operations and maintenance services for institutional and technical facilities, and perform test and
manufacturing support services at two NASA facilities – the Stennis Space Center in Hancock County, Mississippi and
the Michoud Assembly Facility in New Orleans, Louisiana.

• Paducah Gaseous Diffusion Plant Deactivation and Remediation Project. Four Rivers Nuclear Partnership, LLC is
a limited liability company formed by BWXT TSG, CH2M Hill Constructors, Inc. and Fluor Federal Services, Inc. to
provide nuclear operations, deactivation and remediation services at the Paducah Gaseous Diffusion Plant in Paducah,
Kentucky.

Customers

We provide our products and services to a diverse customer base, including the U.S. Government, utilities and other
customers in the nuclear power and radiopharmaceutical industries. Our largest customer during the years ended December 31,
2019, 2018 and 2017 was the U.S. Government, representing approximately 77%, 79% and 81% of our total consolidated
revenues, respectively. No individual non-U.S. Government customer accounted for more than 10% of our consolidated
revenues in the years ended December 31, 2019, 2018 or 2017.

The U.S. Government is the primary customer of our Nuclear Operations Group and Nuclear Services Group segments.

Revenues from U.S. Government contracts comprised 96%, 99% and 99% of revenues in our Nuclear Operations Group
segment for the years ended December 31, 2019, 2018 and 2017, respectively. Revenues from U.S. Government contracts
comprised 85%, 90% and 83% of revenues in our Nuclear Services Group segment for the years ended December 31, 2019,
2018 and 2017, respectively.

Raw Materials and Suppliers

Our operations use raw materials, such as carbon and alloy steels in various forms and components and accessories for
assembly, which are available from numerous sources. We generally purchase these raw materials and components as needed
for individual contracts. Although shortages of some raw materials have existed occasionally, no serious shortage exists at the
present time.

Our Nuclear Operations Group segment relies on several single-source suppliers for materials used in its products. We

believe these suppliers are reliable, and we and the U.S. Government expend significant effort to monitor and maintain the
supplier base for our Nuclear Operations Group segment. Our Nuclear Power Group and Nuclear Services Group segments do
not depend on single sources of supply for materials used in their products. We have limited supply options for certain raw
materials used in our Nuclear Power Group segment; however, we believe the suppliers of these materials are reliable.

Employees

At December 31, 2019, we employed approximately 6,450 persons worldwide. Approximately 1,750 of our employees

were members of labor unions at December 31, 2019. Many of our operations are subject to union contracts, which we
customarily renew periodically. We consider our relationships with our employees to be satisfactory.

Patents and Technology Licenses

We currently hold a large number of U.S. and foreign patents and have patent applications pending. We acquire patents

and technology licenses and grant licenses to others when we consider it advantageous for us to do so. Although in the
aggregate our patents and technology licenses are important to us, we do not regard any single patent or license or group of
related patents or licenses as critical or essential to our business as a whole. In general, we depend on our technological
capabilities and the application of know-how, rather than patents and technology licenses, in the conduct of our various
businesses.

Research and Development Activities

Our research and development activities are related to the development and improvement of new and existing products

and equipment, as well as conceptual and engineering evaluation for translation into practical applications. These activities
include the development of medical radioisotope technology and a variety of advanced technologies in the areas of additive
manufacturing, machine learning, modular reactors, nuclear thermal propulsion and high temperature gas reactors, among
others. These projects are sponsored and funded through internal research and development and by a number of commercial
and government customers.

We charge the costs of research and development unrelated to specific contracts as incurred. Excluding customer-
sponsored research and development, the majority of our activities in this area for the years ended December 31, 2019, 2018
and 2017 related to the development of technologies in the area of medical and industrial radioisotopes. Contractual
arrangements for customer-sponsored research and development can vary on a case-by-case basis and include contracts,
cooperative agreements and grants.

See Note 1 to our consolidated financial statements included in this Report for further information on research and

development.

Hazard Risks and Insurance

Our operations present risks of injury to or death of people, loss of or damage to property and damage to the

environment. We have created loss control systems and processes to assist us in the identification and treatment of the hazard
risks presented by our operations, and we endeavor to make sure these systems are effective.

As loss control measures will not always be successful, we seek to establish various means of funding losses and
transferring financial liability related to incidents or occurrences. We primarily seek to do this through contractual protections,
including waivers of consequential damages, indemnities, caps on liability, liquidated damages provisions and access to the
insurance of other parties. We also procure insurance, operate our own captive insurance company and/or establish funded or
unfunded reserves. However, none of these methods will eliminate all risks.

Depending on competitive conditions, the nature of the work, industry custom and other factors, we may not be

successful in obtaining adequate contractual protection from our customers and other parties against losses and liabilities
arising out of or related to the performance of our work. The scope of the protection may be limited, may be subject to
conditions and may not be supported by adequate insurance or other means of financing. In addition, we may have difficulty
enforcing our contractual rights with others following a material loss.

Similarly, insurance for certain potential losses or liabilities may not be available or may only be available at a cost or on

terms we consider not to be economical. Insurers frequently react to market losses by ceasing to write or severely limiting
coverage for certain exposures. Risks that we have frequently found difficult to cost-effectively insure against include, but are
not limited to, property losses from wind, flood and earthquake events, nuclear hazards and war, pollution liability, liabilities
related to occupational health exposures (including asbestos), liability related to our executives, professional liability/errors and
omissions coverage, the failure, misuse or unavailability of our information technology systems, the failure of security
measures designed to protect our information technology systems from security breaches and liability related to risk of loss of
our work in progress. In cases where we purchase insurance, we are subject to the credit worthiness of the relevant insurer(s),
the available limits of the coverage, our retention under the relevant policy, exclusions in the policy and gaps in coverage.

Our operations in designing, engineering, manufacturing, constructing and servicing nuclear power equipment and
components for our commercial nuclear utility customers subject us to various risks, including, without limitation, damage to
our customers' property and third-party claims for personal injury, environmental liability, death and property damage. To
protect against liability for damage to a customer's property, we endeavor to obtain waivers of liability and subrogation from

the customer and its insurer. We also attempt to cap our overall liability in our contracts. To protect against liability from claims
brought by third parties, we seek to be insured under the utility customer's nuclear liability policies and have the benefit of the
indemnity and limitation of any applicable liability provision of the Price-Anderson Act. The Price-Anderson Act limits the
public liability of U.S. manufacturers and operators of licensed nuclear facilities and other parties who may be liable in respect
of, and indemnifies them against, all claims in excess of a certain amount. This amount is determined by the sum of
commercially available liability insurance plus certain retrospective premium assessments payable by operators of commercial
nuclear reactors. For those sites where we provide environmental remediation services, we seek the same protection from our
customers as we do for our other nuclear activities. The Price-Anderson Act, as amended, includes a sunset provision and
requires renewal each time that it expires. Contracts that were entered into during a period of time that the Price-Anderson Act
was in full force and effect continue to receive the benefit of the Price-Anderson Act's nuclear indemnity. The Price-Anderson
Act is set to expire on December 31, 2025. We also provide nuclear fabrication and other services to the nuclear power industry
in Canada. Canada's Nuclear Liability and Compensation Act ("NLCA") generally conforms to international conventions and is
conceptually similar to the Price-Anderson Act in the U.S. Accordingly, indemnification protections and the possibility of
exclusions under Canada's NLCA are similar to those under the Price-Anderson Act in the U.S.

We supply commercial nuclear equipment and services to certain customers in countries other than the U.S. and Canada
that are party to international treaties and in countries that are not signatory to international treaties but have their own nuclear
liability laws that, in general, have regulations in place whereby nuclear operators are solely liable for nuclear damage claims,
which would exclude nuclear suppliers from any such exposure. BWXT does retain some level of risk in the event of future
changes to the legal landscape in these countries regarding international third-party nuclear liability.

In 2008, the U.S. ratified the Convention on Supplementary Compensation for Nuclear Damage ("CSC") with the

International Atomic Energy Agency. The CSC is an international treaty developed to create a global legal framework for
allocating responsibility and assuring prompt and equitable compensation in the unlikely event of certain nuclear incidents. The
ratification by the U.S. authorizes the Secretary of Energy to issue regulations establishing a retrospective risk pooling program
whereby, in the event that the U.S. must make a contribution to the CSC international fund, U.S. nuclear suppliers, including
BWXT, would pay the full cost of this contribution by the U.S.

Although we do not own or operate any nuclear reactors, we have some coverage under commercially available nuclear
liability and property insurance for our facilities that are currently licensed to possess special nuclear materials. Substantially
all of our Nuclear Operations Group segment contracts involving nuclear materials are covered by and subject to the nuclear
indemnity provisions of either the Price-Anderson Act or Public Law 85-804, which, among other things, authorizes the DOE
to indemnify certain contractors when such acts would facilitate national defense. However, to the extent the value of the
nuclear materials in our care, custody or control exceeds the commercially available limits of our insurance, we potentially
have underinsured risk of loss for such nuclear material.

Our Nuclear Services Group segment participates in the management and operation of various U.S. Government
facilities. This participation is customarily accomplished through the participation in joint ventures with other contractors for
any given facility. These activities involve, among other things, handling nuclear devices and their components. Insurable
liabilities arising from these sites are rarely protected by our or our partners' corporate insurance programs. Instead, we rely on
government contractual agreements and insurance purchased specifically for a site. The U.S. Government has historically
fulfilled its contractual agreement to reimburse its contractors for covered claims, and we expect it to continue this process
during our participation in the administration of these facilities. However, in most of these situations in which the U.S.
Government is contractually obligated to pay, the payment obligation is subject to the availability of authorized government
funds. The reimbursement obligation of the U.S. Government is also conditional, and provisions of the relevant contract or
applicable law may preclude reimbursement.

Our wholly owned captive insurance subsidiary provides primary workers' compensation, employer's liability,

commercial general liability and automotive liability insurance to support our operations. We may also have business reasons in
the future to have our insurance subsidiary accept other risks that we cannot or do not wish to transfer to outside insurance
companies. These risks may be considerable in any given year or cumulatively. Our insurance subsidiary does not provide
insurance to unrelated parties. Claims as a result of our operations could adversely impact the ability of our insurance
subsidiary to respond to all claims presented.

Additionally, upon the February 22, 2006 effectiveness of the settlement relating to the Chapter 11 proceedings involving

several of our former subsidiaries, most of our subsidiaries contributed substantial insurance rights to the asbestos personal
injury trust, including rights to (1) certain pre-1979 primary and excess insurance coverages and (2) certain of our 1979-1986
excess insurance coverage. These insurance rights provided coverage for, among other things, asbestos and other personal
injury claims, subject to the terms and conditions of the policies. The contribution of these insurance rights was made in

exchange for the agreement on the part of the representatives of the asbestos claimants, including the representative of future
claimants, to the entry of a permanent injunction, pursuant to Section 524(g) of the U.S. Bankruptcy Code, to channel to the
asbestos trust all asbestos-related general liability claims against our subsidiaries and former subsidiaries arising out of,
resulting from or attributable to their operations, and the implementation of related releases and indemnification provisions
protecting those subsidiaries and their affiliates from future liability for such claims. Although we are not aware of any
significant, unresolved claims against our subsidiaries and former subsidiaries that are not subject to the channeling injunction
and that relate to the periods during which such excess insurance coverage related, with the contribution of these insurance
rights to the asbestos personal injury trust, it is possible that we could have underinsured or uninsured exposure for non-
derivative asbestos claims or other personal injury or other claims that would have been insured under these coverages had the
insurance rights not been contributed to the asbestos personal injury trust. In conjunction with the spin-off, claims and liabilities
associated with the asbestos personal injury, property damage and indirect property damage claims mentioned above have been
expressly assumed by BWE pursuant to the master separation agreement between us and BWE.

Governmental Regulations and Environmental Matters

Governmental Regulations

Many aspects of our operations and properties are affected by political developments and are subject to both domestic

and foreign governmental regulations, including those relating to:

• possessing and processing special nuclear materials;

• workplace health and safety;

•

constructing and equipping electric power facilities;

currency conversions and repatriation;

taxation of earnings; and

• protecting the environment.

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and

certificates with respect to our operations. The kinds of permits, licenses and certificates required in our operations depend
upon a number of factors.

We cannot determine the extent to which new legislation, new regulations or changes in existing laws or regulations may

affect our future operations.

Environmental

Our operations and properties are subject to a wide variety of increasingly complex and stringent federal, foreign, state

and local environmental laws and regulations, including those governing discharges into the air and water, the handling and
disposal of solid and hazardous wastes, the remediation of soil and groundwater contaminated by hazardous substances and the
health and safety of employees. Sanctions for non-compliance may include revocation of permits, corrective action orders,
administrative or civil penalties and criminal prosecution. Some environmental laws provide for strict, joint and several liability
for remediation of spills and other releases of hazardous substances, as well as damage to natural resources. In addition,
companies may be subject to claims alleging personal injury or property damage as a result of alleged exposure to hazardous
substances. Such laws and regulations may also expose us to liability for the conduct of or conditions caused by others or for
our acts that were in compliance with all applicable laws at the time such acts were performed.

These laws and regulations include the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended ("CERCLA"), the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act and
similar laws that provide for responses to, and liability for, releases of hazardous substances into the environment. These laws
and regulations also include similar foreign, state or local counterparts to these federal laws, which regulate air emissions,
water discharges, hazardous substances and waste and require public disclosure related to the use of various hazardous
substances. Our operations are also governed by laws and regulations relating to workplace safety and worker health, including
the U.S. Occupational Safety and Health Act and regulations promulgated thereunder.

We are currently in the process of investigating and remediating some of our current and former operating sites. Although

we have recorded reserves in connection with certain of these environmental matters, due to the uncertainties associated with

environmental remediation, there can be no assurance that the actual costs resulting from these remediation matters will not
exceed the recorded reserves.

Our compliance with federal, foreign, state and local environmental control and protection regulations resulted in pre-tax

charges of approximately $15.9 million, $14.7 million and $14.1 million in the years ended December 31, 2019, 2018 and
2017, respectively. In addition, compliance with existing environmental regulations necessitated capital expenditures of $1.4
million, $1.7 million and $0.9 million in the years ended December 31, 2019, 2018 and 2017, respectively. We expect to spend
another $20.8 million on such capital expenditures over the next five years. We cannot predict all of the environmental
requirements or circumstances that will exist in the future, but we anticipate that environmental control and protection
standards will become increasingly stringent and costly. Based on our experience to date, we do not currently anticipate any
material adverse effect on our business or consolidated financial condition as a result of future compliance with existing
environmental laws and regulations. However, future events, such as changes in existing laws and regulations or their
interpretation, more vigorous enforcement policies of regulatory agencies or stricter or different interpretations of existing laws
and regulations, may require additional expenditures by us, which may be material. Accordingly, we can provide no assurance
that we will not incur significant environmental compliance costs in the future.

We have been identified as a potentially responsible party at various cleanup sites under CERCLA. CERCLA and other

environmental laws can impose liability for the entire cost of cleanup on any of the potentially responsible parties, regardless of
fault or the lawfulness of the original conduct. Generally, however, where there are multiple responsible parties, a final
allocation of costs is made based on the amount and type of wastes disposed of by each party and the number of financially
viable parties, although this may not be the case with respect to any particular site. We have not been determined to be a major
contributor of wastes to any of these sites. On the basis of our relative contribution of waste to each site, we expect our share of
the ultimate liability for the various sites will not have a material adverse effect on our consolidated financial condition, results
of operations or cash flows in any given year.

Environmental remediation projects have been and continue to be undertaken at certain of our current and former
facilities. In 2002, Congress directed the U.S. Army Corps of Engineers ("Army Corps") to clean up radioactive waste at the
Shallow Land Disposal Area located in Parks Township, Armstrong County, Pennsylvania (the "SLDA"), consistent with the
Memorandum of Understanding between the NRC and the Army Corps for Coordination on Cleanup and Decommissioning of
the Formerly Utilized Sites Remedial Action Program Sites with NRC-Licensed Facilities, dated July 5, 2001 (the "MOU").
From 1961 to 1970, the SLDA was operated by the Nuclear Materials and Equipment Corporation ("NUMEC") pursuant to
Atomic Energy Commission ("AEC") License SNM-145. The AEC was the predecessor to the NRC. The SLDA was used for
the disposal of waste from NUMEC's nuclear fuels fabrication facility in Apollo, Pennsylvania. Both radioactive and non-
radioactive waste was disposed in a series of trenches at the SLDA. NUMEC, a former subsidiary of Atlantic Richfield
Company ("ARCO") was acquired by BWXT in November 1971. Shortly after the Army Corps' contractor commenced cleanup
operations in 2011, the Army Corps ceased excavation activities because the contractor deviated from accepted field
procedures, and the excavated material was found to be complex and beyond the Army Corps' characterization and
management procedures. The MOU was modified in late 2014 to add the DOE and the NNSA as parties to deal with "special
nuclear materials." In December 2014, the Army Corps issued a Proposed Record of Decision Amendment, which reflects a
revised cost estimate of $350 million, in addition to the $62 million expended through September 2014, to implement the
selected remedy. In October 2018, the Army Corps confirmed award of the previously protested remediation contract as
amended to the original contractor. In March 2019, the Army Corps issued a notice-to-proceed to this contractor. The federal
legislation directing the Army Corps to clean up the SLDA also directs the Army Corps to seek to recover response costs from
appropriate responsible parties in accordance with CERCLA. In connection with BWXT's acquisition of NUMEC from ARCO
in November 1971, ARCO assumed and agreed to indemnify and hold harmless BWXT with respect to claims and liabilities
arising as a result of transactions or operations of NUMEC prior to the acquisition date. Although this ARCO indemnity would
cover claims by the Army Corps to seek recovery from BWXT for SLDA cleanup costs, no assurance can be given that this
indemnity will be available or sufficient in the event such claims are asserted. For additional discussion of environmental
matters, see "Note 10 – Commitments and Contingencies" to our consolidated financial statements included in this Report.

We perform significant amounts of work for the U.S. Government under both prime contracts and subcontracts and
operate certain facilities that are licensed to possess and process special nuclear materials. As a result of these activities, we are
subject to continuing reviews by governmental agencies, including the U.S. Environmental Protection Agency (the "EPA") and
the NRC. We are also involved in manufacturing activities at licensed facilities in Canada that are also subject to continuing
reviews by governmental agencies in Canada, including the Canadian Nuclear Safety Commission ("CNSC").

respectively, with surety bonds for the ultimate decommissioning of these licensed facilities. These facilities have provisions in
their government contracts pursuant to which substantially all of our decommissioning costs and financial assurance obligations
are covered by the DOE, including the costs to complete the decommissioning projects underway at the facility in Erwin,
Tennessee. These surety bonds are to cover decommissioning required pursuant to work not subject to this DOE obligation.

In Canada, the CNSC's decommissioning regulations require our Nuclear Power Group segment to provide financial

assurance that it will be able to pay the expected cost of decommissioning its CNSC-licensed facilities at the end of their
service lives. We provided financial assurance totaling $47.0 million and $45.1 million during the years ended December 31,
2019 and 2018, respectively, with letters of credit and surety bonds for the ultimate decommissioning of these licensed
facilities.

At December 31, 2019 and 2018, we had total environmental accruals, including asset retirement obligations, of $90.8
million and $104.9 million, respectively. Of our total environmental accruals at December 31, 2019 and 2018, $10.4 million
and $18.5 million, respectively, were included in current liabilities. Inherent in the estimates of these accruals are our
expectations regarding the levels of contamination, decommissioning costs and recoverability from other parties, which may
vary significantly as decommissioning activities progress. Accordingly, changes in estimates could result in material
adjustments to our operating results, and the ultimate loss may differ materially from the amounts we have provided for in our
consolidated financial statements.

Cautionary Statement Concerning Forward-Looking Statements

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. Statements and assumptions regarding expectations and projections of
specific projects, our future backlog, revenues, income and capital spending, strategic investments, acquisitions or divestitures,
return of 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.

Statements in this Report, including those that express a belief, expectation or intention, as well as those that are not
statements of historical fact, are forward-looking statements. Those forward-looking statements appear in Item 1 – "Business"
and Item 3 – "Legal Proceedings" in Part I of this Report, in Item 7 – "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and in the notes to our consolidated financial statements in Item 8 of Part II of this Report
and elsewhere in this Report.

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. 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 numerous factors, including potentially the risk factors described in the section labeled Item 1A, "Risk Factors" of
this Report, 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 have discussed many of these factors in more detail elsewhere in this Report. These factors are not necessarily all the

factors that could affect us. Unpredictable or unanticipated factors we have not discussed in this Report 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, whether as a result of new information,
future events or otherwise, except as required by applicable laws.

Available Information

Our website address is www.bwxt.com. We make available through the Investors section of this website under "SEC

Filings," free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, our
proxy statement, statements of beneficial ownership of securities on Forms 3, 4 and 5 and amendments to those reports as soon
as reasonably practicable after we electronically file those materials with, or furnish those materials to, the Securities and
Exchange Commission (the "SEC"). The SEC maintains a website at www.sec.gov that contains reports, proxy and information
statements, and other information regarding issuers that file electronically with the SEC. We have also posted on our website

our: Corporate Governance Principles; Code of Business Conduct; Code of Ethics for our Chief Executive Officer and Senior
Financial Officers; Board of Directors Conflicts of Interest Policies and Procedures; Amended and Restated Bylaws; and
charters for the Audit and Finance, Governance and Compensation Committees of our Board of Directors.

Item 1A. RISK FACTORS

Risk Factors Related to Our Business

We rely on U.S. Government contracts for a substantial percentage of our revenue, and some of those contracts are

subject to continued appropriations by Congress and may be terminated or delayed if future funding is not made available.
In addition, the U.S. Government may not renew or may seek to modify or terminate our existing contracts.

For the year ended December 31, 2019, U.S. Government contracts comprised approximately 77% of our total
consolidated revenues. Government contracts are subject to various uncertainties, restrictions and regulations, including
oversight audits, which could result in withholding or delaying payments to us, and termination or modification at the U.S.
Government's convenience. In addition, some of our large, multi-year contracts with the U.S. Government are subject to annual
funding determinations and the continuing availability of Congressional appropriations. Although multi-year operations may be
planned in connection with major procurements, Congress generally appropriates funds on a fiscal-year basis even though a
program may continue for several years. Consequently, programs often are only partially funded initially and additional funds
are committed only as Congress makes further appropriations. When the U.S. Government does not complete its budget process
before the end of its fiscal year on September 30, government operations typically are funded through a continuing resolution
that authorizes agencies of the U.S. Government to continue to operate, but does not authorize new spending initiatives. When
the U.S. Government operates under a continuing resolution or there are other disruptions in the funding process, delays can
occur in the procurement of products and services. As a result, we are subject to ongoing uncertainties associated with U.S.
Government budget restraints and other factors affecting government funding. The reduction or termination of funding, or
changes in the timing of funding, for a U.S. Government program in which we provide products or services would result in a
reduction or loss of anticipated future revenues attributable to that program and could have a negative impact on our financial
condition, results of operations and cash flows.

In addition, our Nuclear Operations Group and Nuclear Services Group segments depend on U.S. Government funding,

particularly funding levels at the DOE. Significant changes in the level of funding (for example, the annual budget of the DOE)
or specifically mandated levels for individual programs that are important to our business could have an unfavorable impact on
us. Any reduction in the level of U.S. Government funding, particularly at the DOE, may result in, among other things, a
reduction in the number and scope of projects put out for bid by the U.S. Government or the curtailment of existing U.S.
Government programs, either of which may result in a reduction in the number of contract award opportunities available to us,
a reduction of activities at DOE sites and an increase in costs, including the costs of obtaining contract awards.

The U.S. Government typically can terminate or modify any of its contracts with us either for its convenience or if we

default by failing to perform under the terms of the applicable contract. A termination arising out of our default could expose us
to liability and have an adverse effect on our ability to compete for future contracts and orders. If any of our contracts reflected
in backlog are terminated by the U.S. Government, our backlog would be reduced by the expected value of the remaining work
under such contracts. In addition, on those contracts for which we are teamed with others and are not the prime contractor, the
U.S. Government could terminate a prime contract under which we are a subcontractor, irrespective of the quality of our
products and services as a subcontractor. Furthermore, certain of our U.S. Government contracts span one or more base years
and multiple option years. The U.S. Government generally has the right not to exercise option periods and may not exercise an
option period for various reasons.

We also have several significant contracts with the U.S. Government that are subject to periodic renewal and rebidding

through a competitive process. If the U.S. Government fails to renew these contracts or modifies key terms, our results of
operations and cash flows would be adversely affected.

As a result of these and other factors, the termination of one or more of our significant government contracts, our

suspension from government contract work, the failure of the U.S. Government to renew our existing contracts or the
disallowance of the payment of our contract costs could have a material adverse effect on our financial condition, results of
operations and cash flows.

Federal budget sequestration and other delays or reductions in government spending could adversely impact

government spending for the products and services we provide.

In August 2011, Congress enacted the Budget Control Act, which committed the U.S. Government to significantly
reducing the federal deficit over ten years. The Budget Control Act established reductions in discretionary spending through
2021. If these spending reductions were not met, it called for substantial automatic spending cuts, or sequestration, split
between defense and non-defense programs scheduled to start in March 2013 and continue over a nine-year period.

Federal government spending reductions, including through sequestration, could adversely impact U.S. Government
programs for which we provide products or services. Additionally, while we believe many of our programs are well aligned
with national defense and other strategic priorities, government spending on these programs can be subject to negative
publicity, political factors and public scrutiny. The risk of future sequestration cuts is uncertain, and it is possible that spending
cuts may be applied to U.S. Government programs across the board, regardless of how programs align with those priorities.
There are many variables in how budget reductions could be implemented that will determine its specific impact; however,
reductions in federal government spending and sequestration, as currently provided for under the Budget Control Act, could
adversely impact programs in which we provide products or services. In addition, these cuts could adversely affect the viability
of the suppliers and subcontractors under our programs. We may also be required to maintain operations of our joint ventures if
the U.S. Government can no longer meet its debt obligations.

Demand for our products and services is vulnerable to economic downturns, the competitiveness of alternative energy

sources and industry conditions.

Demand for our products and services has been, and we expect that demand will continue to be, subject to significant

fluctuations due to a variety of factors beyond our control, including economic and industry conditions. These factors include,
but are not limited to inflation, geopolitical issues, the availability and cost of credit, the demand for and competitiveness of
nuclear power with other energy sources, the cyclical nature of the power generation industry, low business and consumer
confidence, high unemployment and energy conservation measures and decisions of utilities that operate nuclear power plants.

Unfavorable economic conditions may lead customers to delay, curtail or cancel proposed or existing projects, which

may decrease the overall demand for our products and services and adversely affect our results of operations.

Our customers may also find it more difficult to raise capital in the future due to limitations on the availability of credit,

increases in interest rates and other factors affecting the federal, municipal and corporate credit markets. Additionally, our
customers may demand more favorable pricing terms and find it increasingly difficult to timely pay invoices for our products
and services, which would impact our future cash flows and liquidity. Inflation or significant changes in interest rates could
reduce the demand for our products and services. Any inability to timely collect our invoices may lead to an increase in our
accounts receivables and potentially to increased write-offs of uncollectable invoices. If the economy weakens, or customer
spending declines, then our backlog, revenues, net income and overall financial condition could deteriorate.

Our future business prospects in Canada are dependent upon the continued operation of Canadian nuclear plants and

refurbishment of the majority of the plants in Ontario to extend their operating lives. Unfavorable economic conditions,
competition from other forms of power generation, increased competition for refurbishment contracts, changes in government
policy or operational or project execution issues may lead nuclear plant operators in Canada to cease operations or delay, curtail
or cancel proposed or existing life-extension projects, which may decrease the overall demand for our products and services in
Canada and adversely affect our financial condition, results of operations and cash flows.

Our backlog is subject to unexpected adjustments and cancellations and may not be a reliable indicator of future

revenues or earnings.

There can be no assurance that the revenues projected in our backlog will be realized or, if realized, will result in profits.
Because of project cancellations or changes in project scope and schedule, we cannot predict with certainty when or if backlog
will be performed. In addition, even where a project proceeds as scheduled, it is possible that contracted parties may default
and fail to pay amounts owed to us or poor project performance could increase the cost associated with a project. Delays,
suspensions, cancellations, payment defaults, scope changes and poor project execution could materially reduce or eliminate
the revenues and profits that we actually realize from projects in backlog.

Reductions in our backlog due to cancellation or modification by a customer or for other reasons may adversely affect,

potentially to a material extent, the revenues and earnings we actually receive from contracts included in our backlog. Many of
the contracts in our backlog provide for cancellation fees in the event customers cancel projects. These cancellation fees usually

provide for reimbursement of our out-of-pocket costs, revenues for work performed prior to cancellation and a varying
percentage of the profits we would have realized had the contract been completed. However, we typically have no contractual
right upon cancellation to the total revenues reflected in our backlog. Projects may remain in our backlog for extended periods
of time. If we experience significant project terminations, suspensions or scope adjustments to contracts reflected in our
backlog, our financial condition, results of operations and cash flows may be adversely impacted.

We are subject to risks associated with contractual pricing in our industries, including the risk that, if our actual costs

exceed the costs we estimate on our fixed-price contracts, our profitability will decline and we may suffer losses.

We are engaged in a number of highly competitive industries and we have priced a number of our projects on a fixed-

price basis. Our actual costs could exceed our projections, which may result in reduced profit or loss. We attempt to cover the
increased costs of anticipated changes in labor, material and service costs of long-term contracts, either through estimates of
cost increases, which are reflected in the original contract price, or through price escalation clauses. Despite these attempts, the
cost and gross profit we realize on a fixed-price contract could vary materially from the estimated amounts because of supplier,
contractor and subcontractor performance, execution issues, changes in job conditions, variations in labor and equipment
productivity and increases in the cost of labor and raw materials, particularly steel, over the term of the contract.

These variations and the risks generally inherent in our industries may result in actual revenues or costs being different
from those we originally estimated and may result in reduced profitability or losses on projects. Some of these risks include:

• difficulties encountered on our large-scale projects related to the procurement of materials or due to schedule

disruptions, equipment performance failures, unforeseen site conditions, rejection clauses in customer contracts or
other factors that may result in additional costs to us, reductions in revenue, claims or disputes;

• our inability to obtain compensation for additional work we perform or expenses we incur as a result of our customers

providing deficient design, engineering information, equipment or materials;

•

requirements to pay liquidated damages upon our failure to meet schedule or performance requirements of our
contracts; and

• difficulties in engaging third-party subcontractors, equipment manufacturers or materials suppliers or failures by third-
party subcontractors, equipment manufacturers or materials suppliers to perform could result in project delays and
cause us to incur additional costs.

We recognize a large portion of our revenue on an over time basis which could result in volatility in our results of

operations.

We generally recognize revenues and profits under our long-term contracts on an over time basis. Accordingly, we review

contract price and cost estimates regularly as the work progresses and reflect adjustments proportionate to our progress made
towards completion in income in the period when we revise those estimates. To the extent these adjustments result in a
reduction or an elimination of previously reported profits with respect to a project, we would recognize a charge against current
earnings, which could be material. Our current estimates of our contract costs and the profitability of our long-term projects,
although reasonably reliable when made, could change as a result of the uncertainties associated with these types of contracts,
and if adjustments to overall contract costs are significant, the reductions or reversals of previously recorded revenue and
profits could be material in future periods.

If we fail to comply with government procurement laws and regulations, we could lose business and be liable for

various penalties or sanctions.

We must comply with laws and regulations relating to the formation, administration, and performance of U.S.
Government contracts. These laws and regulations include the FAR, Defense Federal Acquisition Regulations, the Truth in
Negotiations Act, CAS, and laws, regulations, and orders restricting the use and dissemination of classified information under
the U.S. export control laws and the export of certain products and technical information. Certain government contracts provide
audit rights by government agencies, including with respect to performance, costs, internal controls and compliance with
applicable laws and regulations. In complying with these laws and regulations, we may incur significant costs, and non-
compliance may result in the imposition of fines and penalties, including contractual damages. If we fail to comply with these
laws and regulations or if a government audit, review, or investigation uncovers improper or illegal activities, we may be
subject to civil penalties, criminal penalties, or administrative sanctions, including suspension or debarment from contracting
with the U.S. Government. Our reputation could suffer harm if allegations of impropriety were made or found against us, which
could adversely affect our operating performance and may result in additional expenses and possible loss of revenue.

Changes in our effective tax rate and tax positions may vary.

We are subject to income taxes primarily in the U.S. and Canada. A change in tax laws, treaties or regulations, or their

interpretation, in any jurisdiction in which we operate could significantly impact our provision for income taxes, which could
have a material impact on our earnings, cash flows from operations and value of our deferred tax assets or liabilities.

In addition, significant judgment is required in determining our provision for income taxes. In the ordinary course of our
business, there are many transactions and calculations where the ultimate tax determination is uncertain, and we are regularly
subject to audit by tax authorities. Although we believe that our tax estimates and tax positions are reasonable, they could be
materially affected by many factors including the final outcome of tax audits and related litigation, the introduction of new tax
accounting standards, legislation, regulations and related interpretations, the realizability of deferred tax assets and changes in
uncertain tax positions. A significant increase in our tax rate could have a material adverse effect on our profitability and
liquidity. A significant decrease in our tax rate could have a material adverse effect on our financial results in the
implementation year due to the need to revalue our deferred tax assets to adjust for the lower future tax savings expected with
the new tax rate and other potential charges. For example, on December 22, 2017, H.R. 1, the Tax Cuts and Jobs Act, was
enacted, which reduced future tax rates resulting in a reduction in the value of our deferred tax assets.

Our business could be negatively impacted by security threats, including physical and cybersecurity threats, and other

disruptions.

We face various security threats, including cyber threats, threats to the physical security of our facilities and infrastructure

(including those that we manage and operate for our customers), and threats from terrorist acts, as well as the potential for
business disruptions associated with these threats. Although we utilize a combination of tailored and industry standard security
measures and technology to monitor and mitigate these threats, we cannot guarantee that these measures and technology will be
sufficient to prevent security threats from materializing.

We have been, and will likely continue to be, subject to cyber-based attacks and other attempts to threaten our

information technology systems, including attempts to gain unauthorized access to our proprietary and sensitive information
and attacks from computer hackers, viruses, malicious code, internal threats and other security problems. As a U.S.
Government contractor, we may be prone to a greater number of those threats than companies in other industries. These threats
range from attacks common to most industries to more advanced and persistent threats from highly-organized adversaries
targeting us because we are a U.S. Government contractor. We are required to maintain minimum security standards for
handling information under our government contracts and failure to do so could result in termination of those contracts. From
time to time, we experience system interruptions and delays; however, prior cyber-based attacks directed at us have not had a
material adverse impact on our results of operations. Due to the evolving nature of these security threats, the impact of any
future incident cannot be predicted. If we are unable to protect our proprietary and sensitive information, our customers could
question the adequacy of our threat mitigation and detection processes and procedures, which could negatively impact our
reputation and present and future business.

The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means.

Occurrence of any of these events could adversely affect our internal operations, the services we provide to customers, the
value of our investment in research and development efforts and other intellectual property, our future financial results, our
reputation or our stock price.

In addition, we maintain, replace and/or upgrade current financial, human resources and other information technology

systems. These activities subject us to inherent costs and risks associated with replacing and updating these systems, including
potential disruption of our internal control structure, substantial capital expenditures, demands on management time and other
risks of delays or difficulties in transitioning to new systems or of integrating new systems into our current systems. Our
systems implementations and upgrades may not result in productivity improvements at the levels anticipated, or at all. In
addition, the implementation of new technology systems may cause disruptions in our business operations. Such disruptions
and any other information technology system disruptions, and our ability to mitigate those disruptions, if not anticipated and
appropriately mitigated, could have a material adverse effect on our business.

We rely on intellectual property law and confidentiality agreements to protect our intellectual property. We also rely on
intellectual property we license from third parties. Our failure to protect our intellectual property rights, our infringement of
third party intellectual property or our inability to obtain or renew licenses to use intellectual property of third parties, could
adversely affect our business.

Our success depends, in part, on our ability to protect our proprietary information and other intellectual property. Our
intellectual property could be stolen, challenged, invalidated, circumvented or rendered unenforceable. In addition, effective
intellectual property protection may be limited or unavailable in some foreign countries where we operate.

Our failure to protect our intellectual property rights may result in the loss of valuable technologies or adversely affect

our competitive business position. We rely significantly on proprietary technology, information, processes and know-how that
are not subject to patent or copyright protection. We seek to protect this information through trade secret or confidentiality
agreements with our employees, consultants, subcontractors or other parties, as well as through other security measures. These
agreements and security measures may be inadequate to deter or prevent misappropriation of our confidential information. In
the event of an infringement of our intellectual property rights, a breach of a confidentiality agreement or divulgence of
proprietary information, we may not have adequate legal remedies to protect our intellectual property. In addition, third parties
may allege that we have infringed their intellectual property rights, which could result in litigation. Litigation to protect, defend
or determine the scope of intellectual property rights, even if ultimately successful, could be costly and could divert
management's attention away from other aspects of our business. In addition, our trade secrets may otherwise become known or
be independently developed by competitors.

In some instances, we have augmented our technology base by licensing the proprietary intellectual property of third

parties. In the future, we may not be able to obtain necessary licenses on commercially reasonable terms, which could have a
material adverse effect on our operations.

We are involved in a number of legal proceedings. We cannot predict the outcome of litigation and other contingencies

with certainty.

Our business may be adversely affected by the outcome of legal proceedings, disputes and other contingencies that
cannot be predicted with certainty. As required by GAAP, we estimate loss contingencies and establish reserves based on our
assessment of contingencies where liability is deemed probable and reasonably estimable in light of the facts and circumstances
known to us at a particular point in time. Subsequent developments in legal proceedings may affect our assessment and
estimates of the loss contingency recorded as a liability or as a reserve against assets in our financial statements. For a
description of current legal proceedings, see "Note 10 – Commitments and Contingencies" to our consolidated financial
statements included in this Report.

Maintaining adequate bonding and letter of credit capacity is necessary for us to successfully bid on and win various

contracts.

In line with industry practice, we are often required to post standby letters of credit and surety bonds to support

contractual obligations to customers as well as other obligations. These letters of credit and bonds generally indemnify
customers should we fail to perform our obligations under the applicable contracts. If a letter of credit or bond is required for a
particular project and we are unable to obtain it due to insufficient liquidity or other reasons, we will not be able to pursue that
project. We utilize bonding facilities, but, as is typically the case, the issuance of bonds under each of those facilities is at the
surety's sole discretion. In addition, we have capacity limits under our credit facility for letters of credit. Moreover, due to
events that affect the insurance and bonding and credit markets generally, bonding and letters of credit may be more difficult to
obtain in the future or may only be available at significant additional cost. There can be no assurance that letters of credit or
bonds will continue to be available to us on reasonable terms. Our inability to obtain adequate letters of credit and bonding and,
as a result, to bid on new work could have a material adverse effect on our business, financial condition and results of
operations. As of December 31, 2019, we had $67.6 million in letters of credit and $73.3 million in surety bonds outstanding.

Our debt exposes us to certain risks.

As of December 31, 2019, the Company had $832.2 million in aggregate principal amount of debt outstanding. The terms

of our credit facility and indenture impose various restrictions and covenants on us that could have adverse consequences,
including:

•

limiting our ability to react to changing economic, regulatory and industry conditions;

•

limiting our ability to compete and our flexibility in planning for, or reacting to, changes in our business and the
industry;

exposing us to the risk of higher interest rates on borrowings under our credit facility, which are subject to variable
rates of interest;

limiting our ability to invest in joint ventures or acquire other companies;

limiting our ability to pay dividends to our stockholders or repurchase shares of our common stock; and

limiting our ability to borrow additional funds.

Our failure to comply with these restrictions and covenants could adversely affect our liquidity and operations.

In addition, the London Interbank Offered Rate ("LIBOR") and the Canadian Dollar Offered Rate ("CDOR") are used as

interest rate benchmarks for establishing the variable rates of interest under our credit facility. LIBOR has been the subject of
recent national, international and other regulatory guidance and proposals for reform. In 2017, the United Kingdom's Financial
Conduct Authority, which regulates LIBOR, announced that it intends to stop persuading or compelling banks to submit the
rates to calculate LIBOR after 2021. These reforms and other pressures may in the future cause LIBOR, or CDOR, to cease to
exist or to perform differently than in the past. The consequences of these developments cannot be entirely predicted, but could
result in new interest rate benchmarks being used for our credit facility, which could result in an increase in our variable rates
of interest and interest expense.

Our business strategy includes acquisitions and strategic investments to support our growth, which can create certain

risks and uncertainties.

We intend to pursue growth through the acquisition of, or strategic investments in, businesses or assets that we believe

will enable us to strengthen our existing businesses and expand into adjacent industries. We may be unable to execute this
growth strategy if we cannot identify suitable businesses or assets, reach agreement on potential strategic acquisitions on
acceptable terms or for other reasons. Business acquisitions involve certain risks, including:

• difficulties relating to the assimilation of personnel, services and systems of an acquired business and the assimilation

of marketing and other operational capabilities;

•

challenges resulting from unanticipated changes in customer relationships after the acquisition;

additional financial and accounting challenges and complexities in areas such as tax planning, treasury management,
forecasting, financial reporting and internal controls;

assumption of liabilities of an acquired business, including liabilities that were unknown at the time the acquisition
transaction was negotiated;

• diversion of management's attention from day-to-day operations;

•

failure to realize anticipated benefits, such as cost savings and revenue enhancements;

• potentially substantial transaction costs associated with business combinations; and

• potential impairment of goodwill or other intangible assets resulting from the overpayment for an acquisition.

Acquisitions may be funded by the issuance of additional equity or debt financing, which may not be available on

attractive terms. Our ability to secure such financing will depend in part on prevailing capital market conditions, as well as
conditions in our business and operating results. Moreover, to the extent an acquisition transaction financed by non-equity
consideration results in goodwill, it will reduce our tangible net worth, which might have an adverse effect on potential credit
and bonding capacity.

Additionally, an acquisition may bring us into businesses we have not previously conducted and expose us to additional

business risks that are different than those we have historically experienced.

Our business strategy also includes development and commercialization of new technologies to support our growth,

which requires significant investment and involves various risks and uncertainties. These new technologies may not achieve
desired commercial or financial results.

Our future growth will depend on our ability to continue to innovate by developing and commercializing new product

and service offerings. Investments in new technologies involve varying degrees of uncertainties and risk. Commercial success
depends on many factors, including the levels of innovation, the development costs and the availability of capital resources to
fund those costs, the levels of competition from others developing similar or other competing technologies, our ability to obtain
or maintain government permits or certifications, the effectiveness of production, distribution and marketing efforts, market
acceptance and the costs to customers to deploy and provide support for the new technologies. We may not achieve significant
revenue from new product and service investments for a number of years, if at all. Additionally, there can be no assurance that
the current technologies that our businesses rely upon will remain competitive, or that competing technologies will not disrupt
our business. Moreover, new products and services may not be profitable, and, even if they are profitable, our operating
margins from new products and services may not be as high as the margins we have experienced historically. Lastly, new
technologies may not be patentable and, as a result, we may face increased competition.

Among our opportunities involving new technologies, we are developing new medical isotope technology. The costs to

develop and commercialize this technology require a substantial amount of investment over a period of years, and
commercialization of this technology also requires authorizations from government agencies, including the U.S. Food and Drug
Administration ("FDA"), Health Canada and the CNSC. There can be no assurance that we will be successful in addressing all
of the technological challenges to developing and commercializing this technology or in obtaining the required authorizations
from the FDA, Health Canada or the CNSC. In addition, commercialization of the medical radioisotope technology could
subject us to product liability claims. The potential also exists for competitors to emerge with alternative technologies. We can
provide no assurance that those competitors will not develop and commercialize similar or superior technologies sooner than
we can or at a significant cost or price advantage.

Our operations are subject to operating risks, which could expose us to potentially significant professional liability,

product liability, warranty and other claims. Our insurance coverage may be inadequate to cover all of our significant risks
or our insurers may deny coverage of material losses we incur, which could adversely affect our profitability and overall
financial condition.

We operate large manufacturing facilities and perform services in large commercial power plants where accidents or

system failures can have significant consequences. Risks inherent in our operations include:

•

accidents resulting in injury or the loss of life or property;

environmental or toxic tort claims, including delayed manifestation claims for personal injury or loss of life;

• pollution or other environmental mishaps;

•

adverse weather conditions;

• mechanical or design failures;

• property losses;

• business interruption due to political action in foreign countries or other reasons; and

•

labor stoppages.

Any accident or failure at a site where we have provided products or services could result in significant professional
liability, product liability, warranty and other claims against us, regardless of whether our products or services caused the
incident. We have been, and in the future we may be, named as defendants in lawsuits asserting large claims as a result of
litigation arising from events such as those listed above.

We endeavor to identify and obtain, in established markets, insurance agreements to cover significant risks and liabilities.
Insurance against some of the risks inherent in our operations is either unavailable or available only at rates or on terms that we
consider uneconomical. Also, catastrophic events customarily result in decreased coverage limits, more limited coverage,
additional exclusions in coverage, increased premium costs and increased deductibles and self-insured retentions. Risks that we
have frequently found difficult to cost-effectively insure against include, but are not limited to, business interruption, property
losses from wind, flood and earthquake events, nuclear hazards and war, pollution liability, liabilities related to occupational
health exposures (including asbestos), professional liability/errors and omissions coverage, the failure, misuse or unavailability
of our information systems, the failure of security measures designed to protect our information systems from security

breaches, and liability related to risk of loss of our work in progress and customer-owned materials in our care, custody and
control. Depending on competitive conditions and other factors, we endeavor to obtain contractual protection against certain
uninsured risks from our customers. When obtained, such contractual indemnification protection may not be as broad as we
desire or may not be supported by adequate insurance maintained by the customer. Such insurance or contractual indemnity
protection may not be sufficient or effective under all circumstances or against all hazards to which we may be subject. A
successful claim for which we are not insured or for which we are underinsured could have a material adverse effect on us.
Additionally, disputes with insurance carriers over coverage may affect the timing of cash flows and, if litigation with the
carrier becomes necessary, an outcome unfavorable to us may have a material adverse effect on our results of operations.

We are also involved in management and operating activities for the U.S. Government. These activities involve, among
other things, handling nuclear devices and their components for the U.S. Government. Most insurable liabilities arising from
these sites are not protected in our corporate insurance program. Instead, we rely on government contractual agreements, some
insurance purchased specifically for the sites and certain specialized self-insurance programs funded by the U.S. Government.
The U.S. Government has historically fulfilled its contractual agreement to reimburse for insurable claims, and we expect it to
continue this process. However, it should be noted that, in most situations, the U.S. Government is contractually obligated to
pay subject to the availability of authorized government funds. The reimbursement obligation of the U.S. Government is also
conditional, and provisions of the relevant contract or applicable law may preclude reimbursement.

We have a captive insurance company subsidiary that provides us with various insurance coverages. Claims, as a result of

our operations, could adversely impact the ability of our captive insurance company subsidiary to respond to all claims
presented.

Although we have product liability insurance coverage, with policy limits that we believe are customary for the medical
radioisotope industry, such coverage may not be adequate, requiring that we pay judgments or settlement amounts in excess of
policy limits. We may not be able to maintain insurance coverage at adequate levels. Any product liability claims could be
costly to defend, time-consuming and result in adverse judgments, which could result in a material adverse effect on our
business, reputation and results.

Additionally, upon the February 22, 2006 effectiveness of the settlement relating to the Chapter 11 proceedings involving

several of our former subsidiaries, most of our subsidiaries contributed substantial insurance rights providing coverage for,
among other things, asbestos and other personal injury claims, to an asbestos personal injury trust. With the contribution of
these insurance rights to the asbestos personal injury trust, we may have underinsured or uninsured exposure for non-derivative
asbestos claims or other personal injury or other claims that would have been insured under these coverages had the insurance
rights not been contributed to the asbestos personal injury trust. In conjunction with the spin-off, claims and liabilities
associated with the asbestos personal injury, property damage and indirect property damage claims mentioned above have been
expressly assumed by BWE pursuant to the master separation agreement between us and BWE.

Our nuclear operations subject us to various environmental, regulatory, financial and other risks.

Our operations in designing, engineering, manufacturing, supplying, constructing and maintaining nuclear fuel and

nuclear power equipment and components subject us to various risks, including:

• potential liabilities relating to harmful effects on the environment and human health resulting from nuclear operations

and the storage, handling and disposal of radioactive materials;

• unplanned expenditures relating to maintenance, operation, security, defects, upgrades and repairs required by the

NRC and other government agencies;

•

limitations on the amounts and types of insurance commercially available to cover losses that might arise in
connection with nuclear operations; and

• potential liabilities arising out of a nuclear, radiological or criticality incident, whether or not it is within our control.

Our nuclear operations are subject to various safety-related requirements imposed by the U.S. Government, the DOE and

the NRC. In the event of non-compliance, these agencies might increase regulatory oversight, impose fines or shut down our
operations, depending upon the assessment of the severity of the situation. Revised security and safety requirements
promulgated by these agencies could necessitate substantial capital and other expenditures. In addition, we must comply with
and are affected by laws and regulations relating to the award, administration and performance of U.S. Government contracts.
Government contract laws and regulations affect how we do business with our customers and, in some instances, impose added

costs on our business. A violation of specific laws and regulations could result in the imposition of fines and penalties or the
termination of our contracts or debarment from bidding on contracts.

Limitations or modifications to indemnification regulations of the U.S. or foreign countries could adversely affect our

business.

The Price-Anderson Act partially indemnifies the nuclear industry against liability arising from nuclear incidents in the

U.S., while ensuring compensation for the general public. The Price-Anderson Act comprehensively regulates the manufacture,
use and storage of radioactive materials, while promoting the nuclear industry by offering broad indemnification to commercial
nuclear power plant operators and DOE contractors. Because we provide nuclear fabrication and other services to the DOE
relating to its nuclear devices, facilities and other programs and the nuclear power industry in the ongoing maintenance and
modifications of its nuclear power plants, including the manufacture of equipment and other components for use in such
nuclear power plants, we may be entitled to some of the indemnification protections under the Price-Anderson Act against
liability arising from nuclear incidents in the U.S. The indemnification authority under the Price-Anderson Act was extended
through December 2025 by the Energy Policy Act of 2005. We also provide nuclear fabrication and other services to the
nuclear power industry in Canada and other countries. Canada's NLCA generally conforms to international conventions and is
conceptually similar to the Price-Anderson Act in the U.S. Accordingly, indemnification protections and the possibility of
exclusions under Canada's NLCA are similar to those under the Price-Anderson Act in the U.S.

The Price-Anderson Act and Canada's NLCA indemnification provisions may not apply to all liabilities that we might

incur while performing services as a contractor for the DOE and the nuclear power industry. If an incident or evacuation is not
covered under the Price-Anderson Act's or Canada's NLCA's indemnification provisions, we could be held liable for damages,
regardless of fault, which could have an adverse effect on our results of operations and financial condition. In connection with
the international transportation of toxic, hazardous and radioactive materials, it is possible for a claim to be asserted that may
not fall within the indemnification provided by the Price-Anderson Act or Canada's NLCA. If such indemnification authority is
not applicable in the future, our business could be adversely affected if the owners and operators of nuclear power plants fail to
retain our services in the absence of commercially adequate insurance and indemnification.

Moreover, because we manufacture nuclear components for the U.S. Government's defense program, we may be entitled

to some of the indemnification protections afforded by Public Law 85-804 for certain of our nuclear operations risks. Public
Law 85-804 authorizes certain agencies of the U.S. Government, such as the DOE and the U.S. Department of Defense, to
indemnify their contractors against unusually hazardous or nuclear risks when such action would facilitate the national defense.
However, because the indemnification protections afforded by Public Law 85-804 are granted on a discretionary basis,
situations could arise where the U.S. Government elects not to offer such protections. In such situations, our business could be
adversely affected by either our inability to obtain commercially adequate insurance or indemnification or our refusal to pursue
such operations in the absence of such protections.

Our operations involve the handling, transportation and disposal of radioactive and hazardous materials, and

environmental laws and regulations and civil liability for contamination of the environment or related personal injuries may
result in increases in our operating costs and capital expenditures and decreases in our earnings and cash flows.

Our operations involve the handling, transportation and disposal of radioactive and hazardous materials, including
nuclear devices and their components. Failure to properly handle these materials could pose a health risk to humans or wildlife
and could cause personal injury and property damage (including environmental contamination). If an accident were to occur, its
severity could be significantly affected by the volume of the materials and the speed of corrective action taken by emergency
response personnel, as well as other factors beyond our control, such as weather and wind conditions. Actions taken in response
to an accident could result in significant costs.

Governmental requirements relating to the protection of the environment, including solid waste management, air quality,

water quality, the decontamination and decommissioning of nuclear manufacturing and processing facilities and cleanup of
contaminated sites, have had a substantial impact on our operations. These requirements are complex and subject to frequent
change. In some cases, they can impose liability for the entire cost of cleanup on any responsible party without regard to
negligence or fault and impose liability on us for the conduct of others or conditions others have caused, or for our acts that
complied with all applicable requirements when we performed them. Our compliance with amended, new or more stringent
requirements, stricter interpretations of existing requirements or the future discovery of contamination may require us to make
material expenditures or subject us to liabilities that we currently do not anticipate. Such expenditures and liabilities may
adversely affect our business, financial condition, results of operations and cash flows. In addition, some of our operations and
the operations of predecessor owners of some of our properties have exposed us to civil claims by third parties for liability

resulting from alleged contamination of the environment or personal injuries caused by releases of hazardous substances into
the environment. See Item 1, "Business - Governmental Regulations and Environmental Matters."

In our contracts, we seek to protect ourselves from liability associated with accidents, but there can be no assurance that

such contractual limitations on liability will be effective in all cases or that our or our customers' insurance will cover all the
liabilities we have assumed under those contracts. The costs of defending against a claim arising out of a nuclear incident or
precautionary evacuation, and any damages awarded as a result of such a claim, could adversely affect our results of operations
and financial condition.

We maintain insurance coverage as part of our overall risk management strategy and due to requirements to maintain

specific coverage in our financing agreements and in many of our contracts. These policies do not protect us against all
liabilities associated with accidents or for unrelated claims. In addition, comparable insurance may not continue to be available
to us in the future at acceptable prices, or at all.

We are subject to domestic and international laws and regulations, violations of which may adversely affect our future

operations.

Many aspects of our operations and properties are affected by political developments and are subject to both domestic

and foreign governmental regulations, including those relating to:

•

constructing and manufacturing nuclear components;

currency conversions and repatriation;

environmental protection legislation;

export control;

taxation of earnings;

transactions in or with certain foreign countries or officials, such as those designated by the Office of Foreign Assets
Control of the U.S. Department of the Treasury; and

• use of local employees and suppliers.

Failure by us, our sales representatives, or consultants to comply with these laws and regulations could result in
administrative, civil, or criminal liabilities and could, in the extreme case, result in suspension or debarment from government
contracts or suspension of our export privileges, which could have a material adverse effect on our business.

In addition, a portion of the demand for our products and services is from electric power generating companies and other

customers. The demand for power generation products and services can be influenced by state and federal governmental
legislation setting requirements for utilities related to operations, emissions and environmental impacts. The legislative process
is unpredictable and includes a platform that continuously seeks to increase the restrictions on power producers.

We cannot determine the extent to which our future operations and earnings may be affected by new legislation, new

regulations or changes in existing regulations.

Our business requires us to obtain, and to comply with, national, state and local government permits and approvals.

Our business is required to obtain, and to comply with, national, state and local government permits and approvals. Any

of these permits or approvals may be subject to denial, revocation or modification under various circumstances. Failure to
obtain or comply with the conditions of permits or approvals may adversely affect our operations by temporarily suspending
our activities or curtailing our work and may subject us to penalties and other sanctions. Although existing licenses are
routinely renewed by various regulators, renewal could be denied or jeopardized by various factors, including:

•

failure to provide adequate financial assurance for decommissioning or closure;

failure to comply with environmental and safety laws and regulations or permit conditions;

local community, political or other opposition;

executive action; and

legislative action.

As a result of our acquisition of the MI business in 2018, we are also subject to regulatory oversight by the FDA and

Health Canada. The commercialization of our medical radioisotope technology will require the review and approval of these
and other government agencies. Any delay or denial of such approvals could have a material adverse effect on our MI business.

In addition, if new legislation or regulations are enacted or implemented, or if existing laws or regulations are amended or

are interpreted or enforced differently, we may be required to obtain additional operating permits or approvals. Our inability to
obtain, and to comply with, the permits and approvals required for our business could have a material adverse effect on us.

Employee, agent or partner misconduct or our overall failure to comply with laws, regulations or government

contracts could weaken our ability to win contracts, lead to the suspension of our operations and result in reduced revenues
and profits.

Misconduct, fraud, or other improper activities by one or more of our employees, agents or partners as well as our failure
to comply with applicable laws and regulations, could have a significant negative impact on our business and reputation. Such
misconduct could include the failure to comply with government procurement regulations, regulations regarding the protection
of classified and other information, regulations regarding the pricing of labor and other costs in government contracts,
regulations on lobbying or similar activities, regulations pertaining to the internal controls over financial reporting and various
other applicable laws or regulations. For example, we regularly provide services that may be highly sensitive or that are related
to critical national security matters; if a security breach were to occur, our ability to procure future government contracts could
be severely limited. The precautions we take to prevent and detect these activities may not be effective, and we could face
unknown risks or losses.

We are routinely audited and reviewed by the U.S. Government and its agencies. These agencies review our performance

under our contracts, our cost structure and our compliance with applicable laws, regulations and standards, as well as the
adequacy of, and our compliance with, our internal control systems and policies. Systems that are subject to review include our
purchasing systems, billing systems, property management and control systems, cost estimating systems, compensation systems
and management information systems. Any costs found to be improperly allocated to a specific contract will not be reimbursed
or must be refunded if already reimbursed. If an audit or review uncovers improper or illegal activities, we could be subject to
civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of
payments, fines, loss of security clearance and suspension or debarment from contracting with the U.S. Government. In
addition, we could suffer serious reputational harm if allegations of impropriety were made against us.

We conduct a portion of our operations through joint venture entities, over which we may have limited ability to

influence.

We currently have equity interests in several joint ventures and may enter into additional joint venture arrangements in
the future. Our influence over some of these entities may be limited. Even in those joint ventures over which we do exercise
significant influence, we are often required to consider the interests of our joint venture partners in connection with major
decisions concerning the operations of the joint ventures. In any case, differences in views among the joint venture participants
may result in delayed decisions or disputes. We also cannot control the actions of our joint venture partners. We sometimes
have joint and several liabilities with our joint venture partners under the applicable contracts for joint venture projects and we
cannot be certain that our partners will be able to satisfy any potential liability that could arise. These factors could potentially
harm the business and operations of a joint venture and, in turn, our business and operations.

Operating through joint ventures in which we are minority holders results in us having limited control over many
decisions made with respect to projects and internal controls relating to projects. These joint ventures may not be subject to the
same requirements regarding internal controls and internal control over financial reporting that we follow. As a result, internal
control problems may arise with respect to the joint ventures that could adversely affect our ability to respond to requests or
contractual obligations to customers or to meet the internal control requirements to which we are otherwise subject.

In addition, our arrangements involving joint ventures may restrict us from gaining access to the cash flows or assets of
these entities. In some cases, our joint ventures have governmentally imposed restrictions on their abilities to transfer funds to
us.

If our co-venturers fail to perform their contractual obligations on a project or if we fail to coordinate effectively with

our co-venturers, we could be exposed to legal liability, loss of reputation and reduced profit on the project.

We often perform projects jointly with third parties. For example, we enter into contractual arrangements to bid for and

perform jointly on large projects. Success on these joint projects depends in part on whether our co-venturers fulfill their

contractual obligations satisfactorily. If any one or more of these third parties fail to perform their contractual obligations
satisfactorily, we may be required to make additional investments and provide added services in order to compensate for that
failure. If we are unable to adequately address any such performance issues, then our customer may exercise its right to
terminate a joint project, exposing us to legal liability, loss of reputation and reduced profit.

Our collaborative arrangements also involve risks that participating parties may disagree on business decisions and
strategies. These disagreements could result in delays, additional costs and risks of litigation. Our inability to successfully
maintain existing collaborative relationships or enter into new collaborative arrangements could have a material adverse effect
on our results of operations.

The loss of the services of one or more of our key personnel, or our failure to attract, assimilate and retain trained

personnel in the future, could disrupt our operations and result in loss of revenues.

Our success depends on the continued active participation of our executive officers and key operating personnel. The

unexpected loss of the services of any one of these persons could adversely affect our operations.

Our operations require the services of employees having the technical training and experience necessary to obtain the

proper operational results. Certain of our operations also require personnel who are eligible to obtain and maintain U.S.
Government security clearances. As such, our operations depend, to a considerable extent, on the continuing availability of
such employees and personnel. Additionally, the process of obtaining the requisite security clearances for some of our
personnel can be subject to delays and other factors beyond our control. If we should suffer any material loss of personnel to
competitors, retirement or other reasons, or experience difficulties employing additional or replacement personnel with the
requisite level of training, experience and qualifications to adequately operate our business, our operations could be adversely
affected.

While we believe our wage rates are competitive and our relationships with our employees are satisfactory, a significant

increase in the wages paid by other employers could result in a reduction in our workforce, increases in wage rates, or both.

Negotiations with labor unions and possible work stoppages and other labor problems could divert management's
attention and disrupt operations. In addition, new collective bargaining agreements or amendments to agreements could
increase our labor costs and operating expenses.

A significant number of our employees are members of labor unions. If we are unable to negotiate acceptable new
contracts with our unions from time to time, we could experience strikes or other work stoppages by the affected employees. If
any such strikes or other work stoppages were to occur, we could experience a significant disruption of operations. In addition,
negotiations with unions could divert management attention. New union contracts could result in increased operating costs, as a
result of higher wages or benefit expenses, for both union and nonunion employees. If nonunion employees were to unionize,
we would experience higher ongoing labor costs.

Pension and medical expenses associated with our retirement benefit plans may fluctuate significantly depending on

changes in actuarial assumptions, future market performance of plan assets, future trends in health care costs and
legislative or other regulatory actions.

A substantial portion of our current and retired employee population is covered by pension and postretirement benefit
plans, the costs and funding requirements of which depend on our various assumptions, including estimates of rates of return on
benefit-related assets, discount rates for future payment obligations, rates of future cost growth, mortality assumptions and
trends for future costs. Service accruals for salaried participants ceased as of December 31, 2015. Variances from these
estimates could have a material adverse effect on us. In addition, our policy to recognize these variances annually through mark
to market accounting could result in volatility in our results of operations, which could be material. As of December 31, 2019,
we had underfunded defined benefit pension and postretirement benefit plans with obligations totaling approximately $(199.8)
million. A substantial portion of our postretirement benefit plan costs are recoverable on our U.S. Government contracts. See
Note 7 to our consolidated financial statements included in this Report for additional information regarding our pension and
postretirement benefit plan obligations.

Our internal controls over financial reporting may not be sufficient to achieve all stated goals and objectives.

Our internal 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. The design of any system of internal controls and procedures is based in part upon various

assumptions about the likelihood of future events, and we cannot provide assurance that any design will succeed in achieving
its stated goals under all potential future conditions, regardless of how remote.

We rely on single-source suppliers, which could, under certain circumstances, adversely affect our revenues and

operating results.

We rely on several single-source suppliers for materials used in our products in our Nuclear Operations Group segment.

If the supply of a single-sourced material is delayed or ceases, we may not be able to produce the related product in a timely
manner or in sufficient quantities, if at all, which could adversely affect our revenues and operating results. In addition, a
single-source supplier of a key component could potentially exert significant bargaining power over price, quality, warranty
claims or other terms relating to the single-sourced materials, which could have a material adverse effect on our financial
condition, results of operations and cash flows.

We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act.

The U.S. Foreign Corrupt Practices Act (the "FCPA") generally prohibits companies and their intermediaries from
making improper payments to non-U.S. officials. Our training program and policies mandate compliance with the FCPA. We
operate in some parts of the world that have experienced governmental corruption to some degree, and, in certain
circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices. If we are found to be
liable for violations of the FCPA (either due to our own acts or our inadvertence, or due to the acts or inadvertence of others,
including employees of our joint ventures), we could suffer from civil and criminal penalties or other sanctions.

We may not be able to compete successfully against current and future competitors.

Some of our competitors or potential competitors have greater financial or other resources than we have and in some

cases are government-supported. Our operations may be adversely affected if our current competitors or new market entrants
introduce new products or services with better features, technology, performance, prices or other characteristics than those of
our products and services. Furthermore, we operate in industries where capital investment is critical. We may not be able to
obtain as much purchasing and borrowing leverage and access to capital for investment as other companies, which may impair
our ability to compete against competitors or potential competitors.

Our international operations may be subject to political, economic and other uncertainties not generally encountered

in our domestic operations.

For the year ended December 31, 2019, our revenues from international operations comprised approximately 17% of our

total consolidated revenues. Operating in international markets requires significant resources and management attention and
subjects us to political, economic and regulatory risks that are not generally encountered in our U.S. operations. These include:

•

renegotiation or nullification of our existing contracts;

changing political conditions and changing laws and policies affecting trade and investment; and

changes in foreign currency exchange rates.

In addition, we rely on some international suppliers for some of the materials used in our products. Disruptions or
changes to the economics of supply arrangements due to international market risks could have a material impact on our
financial condition, results of operations and cash flows.

Our international operations sometimes face the additional risks of fluctuating currency values, hard currency shortages

and controls of foreign currency exchange.

See Note 15 to our consolidated financial statements included in this Report for additional information about our

operations in different geographic areas.

Natural disasters or other events beyond our control could adversely impact our business.

We rely on our highly specialized facilities and information technology systems to manufacture products, provide
services and otherwise perform our contracts. Natural disasters, such as earthquakes, tsunamis, hurricanes, floods, tornados, or
other events could cause disruption to our facilities, systems or projects, which could interrupt operational processes and

performance on our contracts and adversely impact our ability to manufacture our products and provide services and support to
our customers, which could have a material impact on our financial condition, results of operations and cash flows.

War, other armed conflicts or terrorist attacks could have a material adverse effect on our business.

War, terrorist attacks and unrest have caused and may continue to cause instability in the world's financial and
commercial markets and have significantly increased political and economic instability in some of the geographic areas in
which we operate. Threats of war or other armed conflict may cause further disruption to financial and commercial markets. In
addition, continued unrest could lead to acts of terrorism in the U.S. or elsewhere, and acts of terrorism could be directed
against companies such as ours. Also, acts of terrorism and threats of armed conflicts in or around various areas in which we
operate could limit or disrupt our markets and operations, including disruptions from evacuation of personnel, cancellation of
contracts or the loss of personnel or assets. Armed conflicts, terrorism and their effects on us or our markets may significantly
affect our business and results of operations in the future.

Risks Relating to the Spin-Off of Our Former Power Generation Business

Potential indemnification liabilities relating to the spin-off could materially adversely affect us.

In connection with the spin-off, we entered into agreements with BWE to provide for, among other things, the principal

corporate transactions required to effect the planned spin-off, certain conditions to the spin-off and provisions governing the
relationship between us and BWE with respect to and resulting from the spin-off. Among other things, these agreements
provided for indemnification obligations designed to make us financially responsible for substantially all liabilities that may
exist relating to our business activities, whether incurred prior to or after the spin-off. If we are required to indemnify BWE, we
may be subject to substantial liabilities.

BWE agreed to indemnify us for certain liabilities in connection with the spin-off. However, there can be no
assurance that the indemnity will be sufficient to insure us against the full amount of such liabilities, or that BWE will be
able to satisfy its indemnification obligations.

In connection with the spin-off, BWE agreed to indemnify us for certain liabilities. However, third parties could seek to

hold us responsible for any of the liabilities that BWE will agree to retain, and there can be no assurance that the indemnity
from BWE will be sufficient to protect us against the full amount of such liabilities, or that BWE will be able to fully satisfy its
indemnification obligations. Moreover, even if we ultimately succeed in recovering from BWE any amounts for which we are
held liable, we may be temporarily required to bear these losses.

The BWE spin-off could result in substantial tax liability.

Upon completion of the spin-off, we received an opinion of counsel substantially to the effect that, for U.S. federal
income tax purposes, the spin-off will qualify under Section 355 of the Code and certain transactions related to the spin-off will
qualify under Sections 355 and/or 368 of the Code. The opinion relied on, among other things, various assumptions and
representations as to factual matters made by us and BWE, which, if inaccurate or incomplete in any material respect, could
jeopardize the conclusions reached by such counsel in its opinion. The opinion is not binding on the IRS or the courts, and there
can be no assurance that the IRS or the courts will not challenge the conclusions stated in the opinion or that any such challenge
would not prevail.

We are not aware of any facts or circumstances that would cause the assumptions or representations that were relied on in

the opinion to be inaccurate or incomplete in any material respect. If, notwithstanding receipt of the opinion, the spin-off were
subsequently determined not to qualify under Section 355 of the Code, each U.S. holder of our common stock who received
shares of BWE common stock in the spin-off would generally be treated as receiving a taxable distribution of property in an
amount equal to the fair market value of the shares of BWE common stock received. That distribution would be taxable to each
such stockholder as a dividend to the extent of our current and accumulated earnings and profits. For each such stockholder,
any amount that exceeded our earnings and profits would be treated first as a non-taxable return of capital to the extent of such
stockholder's tax basis in its shares of our common stock with any remaining amount being taxed as a capital gain. In addition,
if certain related preparatory transactions were to fail to qualify for tax-free treatment, they would be treated as taxable sales
and/or distributions to the Company.

We entered into a tax sharing agreement with BWE in connection with the spin-off. Pursuant to this agreement, we

agreed with BWE on the allocation of spin-off related tax liabilities and the indemnification provisions relating to these
liabilities. If we are liable for taxes under the tax sharing agreement, that liability could have a material adverse effect on us.

Additionally, there can be no assurance that any indemnities from BWE will be sufficient to protect us against any potential tax
liabilities.

Risks Relating to Ownership of Our Common Stock

Provisions in our corporate documents and Delaware law could delay or prevent a change in control of our company,

even if that change may be considered beneficial by some stockholders.

The existence of some provisions of our certificate of incorporation and bylaws and Delaware law could discourage,

delay or prevent a change in control of our company that a stockholder may consider favorable. These include provisions:

• providing that our Board of Directors fixes the number of members of the board;

•

limiting who may call special meetings of stockholders;

• prohibiting stockholder action by written consent, thereby requiring stockholder action to be taken at a meeting of the

stockholders;

•

establishing advance notice requirements for nominations of candidates for election to our Board of Directors or for
proposing matters that can be acted on by stockholders at stockholder meetings;

establishing supermajority vote requirements for certain amendments to our certificate of incorporation and bylaws;

limiting the right of stockholders to remove directors;

authorizing a large number of shares of common stock that are not yet issued, which would allow our Board of
Directors to issue shares to persons friendly to current management, thereby protecting the continuity of our
management, or which could be used to dilute the stock ownership of persons seeking to obtain control of us; and

authorizing the issuance of "blank check" preferred stock, which could be issued by our Board of Directors to increase
the number of outstanding shares and thwart a takeover attempt.

In addition, we are subject to Section 203 of the Delaware General Corporation Law, which may have an anti-takeover

effect with respect to transactions not approved in advance by our Board of Directors, including discouraging takeover attempts
that might result in a premium over the market price for shares of our common stock.

We believe these provisions protect our stockholders from coercive or otherwise unfair takeover tactics by requiring

potential acquirers to negotiate with our Board of Directors and by providing our Board of Directors with more time to assess
any acquisition proposal, and are not intended to make our company immune from takeovers. However, these provisions apply
even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our Board of
Directors determines is not in the best interests of our company and our stockholders.

We may issue preferred stock that could dilute the voting power or reduce the value of our common stock.

Our certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or

series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special
rights, including preferences over our common stock respecting dividends and distributions, as our Board of Directors
generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce
the value of our common stock. For example, we could grant holders of preferred stock the right to elect some number of our
directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the
repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the
residual value of the common stock.

Item 1B.

UNRESOLVED STAFF COMMENTS

None.

Item 2.

PROPERTIES

The following table provides the segment name, location and general use of each of our principal properties at

December 31, 2019 that we own or lease:

Business Segment and Location
Nuclear Operations Group
Lynchburg, Virginia
Barberton, Ohio
Euclid, Ohio
Mount Vernon, Indiana
Erwin, Tennessee
Nuclear Power Group

Cambridge, Ontario, Canada
Peterborough, Ontario, Canada
Toronto, Ontario, Canada
Kanata, Ontario, Canada
Vancouver, British Columbia, Canada

Nuclear Services Group
Lynchburg, Virginia
Lynchburg, Virginia

Corporate

Lynchburg, Virginia
Charlotte, North Carolina

Principal Use

Owned/Leased
(Lease Expiration)

Manufacturing facility (1) (4)
Manufacturing facility
Manufacturing facility
Manufacturing facility
Manufacturing facility (2) (4)

Owned
Owned
Owned
Owned
Owned

Manufacturing facility
Manufacturing facility (3) (4)
Manufacturing facility (3) (4)
Manufacturing facility (3) (4)
Manufacturing facility (3) (4)

Administrative office
Engineering office

Administrative office
Administrative office

Owned
Leased (2036)
Leased (2036)
Leased (2038)
Leased (2031)

Leased (2020)
Leased (2020)

Leased (2020)
Leased (2022)

(1) This facility is our Nuclear Operations Group segment's primary manufacturing plant and is the nation's largest

commercial high-enriched uranium processing facility. The site is also the largest commercial International Atomic
Energy Agency certified facility in the U.S.

(2) Nuclear Fuel Services, Inc. ("NFS") operates this facility, which manufactures fuel for naval nuclear reactors and

converts Cold War-era government stockpiles of high-enriched uranium into material suitable for further processing into
commercial nuclear reactor fuel. NFS is the sole provider of nuclear fuel for the U.S. Navy.

(3) These facilities are licensed by the CNSC in order to allow us to fabricate natural uranium fuel and produce medical

radioisotopes.

(4) This site is subject to review by either the NRC or the CNSC for licensee performance. The performance reviews

determine the safe and secure conduct of operations of the facility.

We consider each of our significant properties to be suitable and adequate for its intended use. For further details

regarding our properties, see Item 1, "Business."

Item 3.

LEGAL PROCEEDINGS

The information set forth under the heading "Investigations and Litigation" in Note 10 to our consolidated financial

statements included in this Report is incorporated by reference into this Item 3.

Item 4.

MINE SAFETY DISCLOSURES

None.

PART II

Item 5.

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the New York Stock Exchange under the symbol BWXT. As of February 20, 2020, there

were approximately 1,794 holders of record of our common stock.

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
December 31, 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.

Issuer Purchases of Equity Securities

Period
October 1, 2019 – October 31, 2019
November 1, 2019 – November 30, 2019
December 1, 2019 – December 31, 2019
Total

Total number
of shares
purchased (1)

92
8,849
—
8,941

Average price
paid per share
55.91
$
60.62
$
—
60.57

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)
165.3
165.3
165.3

— $
— $
— $
—

(1) Includes 92 and 8,849 shares repurchased during October and November, respectively, pursuant to the provisions of

employee benefit plans that permit the repurchase of shares to satisfy statutory tax withholding obligations.

(2) On November 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 $250 million during a three-year period that
expires on November 6, 2021.

The following graph provides a comparison of our cumulative total shareholder return over five years to the return of the

S&P 500 Composite Index ("S&P 500 Index") and the return of the S&P Aerospace and Defense Select Index ("S&P A&D
Select Index"). The following graph shall not be deemed to be "soliciting material" or "filed" with the SEC or be subject to
Regulation 14A or 14C (other than as provided in Item 201 of Regulation S-K) or to the liabilities of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall such information be incorporated by reference
into any future filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that BWXT
specifically incorporates it by reference into such filing.

(1) Assumes initial investment of $100 on December 31, 2014 and reinvestment of dividends. The value of the BWE shares

distributed in the spin-off is reflected in the cumulative total return as a reinvested dividend.

Item 6.

SELECTED FINANCIAL DATA

2019

For the Years Ended December 31,
2017

2016

2018

2015

Statement of Income Data (1)(2):

Revenues
Income from Continuing Operations before

Provision for Income Taxes and
Noncontrolling Interest

Income from Continuing Operations, Net of Tax
Income (Loss) from Discontinued Operations,

Net of Tax

Net Income Attributable to BWX Technologies,

Inc.

Basic Earnings per Common Share:

Income from Continuing Operations

Income (Loss) from Discontinued Operations

Net Income Attributable to BWX

Technologies, Inc.

Diluted Earnings per Common Share:

Income from Continuing Operations
Income (Loss) from Discontinued Operations

Net Income Attributable to BWX

Technologies, Inc.

Dividends Declared Per Share
Balance Sheet Data:
Total Assets (2)(3)
Current Maturities of Long-Term Debt
Long-Term Debt (3)

(In thousands, except per share amounts)

$ 1,894,920

$ 1,799,889

$ 1,687,738

$ 1,550,573

$ 1,415,529

$
$

313,742

244,115

—

244,115

2.56

—

2.56

2.55
—

2.55
0.68

$
$

280,145

226,958

—

226,958

2.29

—

2.29

2.27
—

2.27
0.64

$
$

295,780

147,844

—

147,844

1.49

—

1.49

1.47
—

1.47
0.42

$
$

257,268

183,057

—

183,057

1.79

—

1.79

1.76
—

1.76
0.36

221,065

140,774

(9,309)

131,465

1.32
(0.09)

1.23

1.31
(0.09)

1.22
0.32

$ 1,908,913
14,711
$
809,442
$

$ 1,655,096
14,227
$
753,617
$

$ 1,712,339
27,870
$
481,059
$

$ 1,579,815
27,370
$
497,724
$

$ 1,375,398
15,000
$
278,259
$

(1) Statement of income data prior to December 31, 2015 has been restated to reflect the June 30, 2015 spin-off, which is

presented as income (loss) from discontinued operations.

(2) On January 1, 2018, we adopted FASB Topic Revenue from Contracts with Customers. As a result, we recognized $58.4

million and $15.8 million more revenue and net income, respectively, under the current method compared to the
historical method which impacted basic and diluted earnings per share by $0.16 for the year ended December 31, 2018.
Information presented for years ending prior to December 31, 2018 may not be comparable.

(3) On January 1, 2016, we adopted an update to FASB Topic Interest – Imputation of Interest, which resulted in the

retrospective reclassification of unamortized debt issuance costs related to the Company's Credit Agreement from other
non-current assets to a reduction in long-term debt of $6.7 million as of December 31, 2015.

We immediately recognize actuarial gains (losses) for our pension and postretirement benefit plans in earnings primarily
in the fourth quarter each year as a component of net periodic benefit cost. The effect of this adjustment for 2019, 2018, 2017,
2016 and 2015 on pre-tax income was $(3.6) million, $(32.6) million, $(11.1) million, $(21.3) million and $(54.7) million,
respectively.

In the year ended December 31, 2018, we recognized $13.5 million of benefit in our provision for income taxes related to

the remeasurement of our deferred tax assets as a result of accelerating additional contributions to certain of our domestic
pension plans for inclusion in our 2017 U.S. tax return.

In the year ended December 31, 2017, we recognized $53.0 million of expense in our provision for income taxes related

to significant changes to existing U.S. tax laws.

In the year ended December 31, 2016, we recorded a gain of approximately $13.6 million related to the deconsolidation
of Generation mPower LLC ("GmP") and we recorded a $30.0 million loss contingency pursuant to the terms of the mPower
31

Framework Agreement. We also recorded a gain of approximately $9.3 million related to the release from performance
guarantees for various projects executed by our former Power Generation business. In addition, we reversed a $16.1 million
loss contingency resulting from a favorable ruling in a lawsuit involving commercial nuclear contracts.

In the year ended December 31, 2015, we incurred $26.0 million of charges related to the spin-off. We also incurred
$16.6 million of charges related to restructuring activities. In addition, we recorded income related to litigation proceeds of
$94.8 million, including pre- and post-judgment interest totaling $29.1 million.

Item 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Statements we make in the following discussion, which express a belief, expectation or intention, as well as those that are not
historical fact, are forward-looking statements that are subject to risks, uncertainties and assumptions. Our actual results,
performance or achievements, or industry results, could differ materially from those we express in the following discussion as a
result of a variety of factors, including the risks and uncertainties we have referred to under the headings "Cautionary
Statement Concerning Forward-Looking Statements" and "Risk Factors" in Items 1 and 1A of Part I of this Report.

GENERAL

We are a leading supplier of nuclear components and fuel to the U.S. Government; provide technical, management and

site services to support governments in the operation of complex facilities and environmental remediation activities; supply
precision manufactured components, nuclear fuel and services for the commercial nuclear power industry; supply critical
medical radioisotopes and radiopharmaceuticals; and develop nuclear technologies for a variety of applications, including
medical radioisotopes, advanced nuclear power sources and advanced nuclear reactors. In general, we operate in capital-
intensive industries and rely on large contracts for a substantial amount of our revenues. We operate in three reportable
segments: Nuclear Operations Group, Nuclear Power Group and Nuclear Services Group. We are currently exploring growth
strategies across our segments through strategic investments and acquisitions to expand and complement our existing
businesses. We would expect to fund these opportunities with cash generated from operations or by raising additional capital
through debt, equity or some combination thereof.

Outlook

Nuclear Operations Group

We expect the backlog of our Nuclear Operations Group segment of approximately $4,515 million at December 31, 2019

to produce revenues of approximately $1,396 million in 2020, not including any change orders or new contracts that may be
awarded during the year.

The revenues of our Nuclear Operations Group segment are largely a function of defense spending by the U.S.

Government. As a supplier of major nuclear components for certain U.S. Government programs, we are a significant participant
in the defense industry and have not been negatively impacted by sequestration or federal budget reductions to date. We believe
many of our programs are well-aligned with national defense and other strategic priorities as we supply high-end equipment for
submarines and aircraft carriers for the U.S. Navy. However, it is possible that reductions in federal government spending and
sequestration could have an adverse impact on the operating results and cash flows of our Nuclear Operations Group and
Nuclear Services Group segments in the future.

We expect that orders for nuclear components will continue to be a significant part of backlog for the foreseeable future.
In addition, the U.S. Navy issued its fiscal year 2020 long-range shipbuilding plan in March 2019, which continues to include
recommendations to increase the size of its fleet of ships to include additional submarines and aircraft carriers beyond the
number disclosed in long-range shipbuilding plans issued prior to February 2018. We expect the U.S. Navy's new shipbuilding
plan will require us to make additional capital expenditures and investment in personnel to meet this growth in demand.

Nuclear Power Group

We expect the backlog of our Nuclear Power Group segment of approximately $730 million at December 31, 2019 to

produce revenues of approximately $217 million in 2020, not including any change orders or new contracts that may be
awarded during the year. The revenues in this segment primarily depend on the demand and competitiveness of nuclear energy.
The activity of this segment depends on the timing of maintenance and refueling outages, the cyclical nature of capital

expenditures and major refurbishment and plant 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.

Our acquisition of the MI business in July 2018 expanded our Nuclear Power Group segment's offerings to include
medical radioisotope products. 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.

Nuclear Services Group

A significant portion of this segment's operations is conducted through joint ventures, which typically earn fees, and we
account for them following the equity method of accounting. See Note 4 to our consolidated financial statements included in
this Report for financial information on our equity method investments. As a result, this segment reports minimal backlog and
revenues.

Given our specialized capabilities of full life-cycle management of special materials, facilities and technologies, we

believe our Nuclear Services Group segment is well-positioned 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. Additionally, the Nuclear Services Group segment supports the commercial nuclear industry
in the U.S., which depends on the timing of maintenance outages for nuclear utility customers, which could cause variability in
our financial results.

This segment also specializes in the development of advanced technologies. The nature, timing and duration of any

related contracts are dependent on the demand and funding availability for such technologies.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our financial statements and accompanying notes are prepared in accordance with accounting principles generally

accepted in the United States ("GAAP"). Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions are
affected by management's application of accounting policies. We believe the following are our most critical accounting policies
that we apply in the preparation of our financial statements. These policies require our most difficult, subjective and complex
judgments, often as a result of the need to make estimates of matters that are inherently uncertain.

Contracts and Revenue Recognition. We determine the appropriate accounting method for each of our long-term
contracts before work on the project begins. We generally recognize contract revenues and related costs over time for individual
performance obligations based on a cost-to-cost method in accordance with FASB Topic Revenue from Contracts with
Customers. We recognize estimated contract revenue and resulting income based on the measurement of the extent of progress
toward completion as a percentage of the total project. Certain costs may be excluded from the cost-to-cost method of
measuring progress, such as significant costs for uninstalled materials, if such costs do not depict our performance in
transferring control of goods or services to the customer. We review contract price and cost estimates periodically as the work
progresses and reflect adjustments proportionate to the percentage-of-completion in income in the period when those estimates
are revised. 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. 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. We routinely review estimates related to our contracts, and revisions to
profitability are reflected in the quarterly and annual earnings we report. In the years ended December 31, 2019, 2018 and
2017, we recognized net favorable changes in estimates related to long-term contracts that increased operating income by
approximately $71.6 million, $46.3 million and $35.2 million, respectively.

Although we continually strive to improve our ability to estimate our contract costs and profitability, adjustments to

overall contract costs due to unforeseen events could be significant in future periods. We recognize contract change orders or
changes in scope of work in contract revenues, to the extent of costs incurred, when we believe collection is probable and can
be reasonably estimated. We recognize income from claims when formally agreed with the customer. We regularly assess the
collectability of contract revenues and receivables from customers.

Pension Plans and Postretirement Benefits. We utilize actuarial and other assumptions in calculating the cost and
benefit obligations of our pension and postretirement benefits. The assumptions utilized in the determination of our benefit cost
33

and obligations include assumptions regarding discount rates, expected returns on plan assets, mortality and health care cost
trends. The assumptions utilized represent our best estimates based on historical experience and other factors.

We calculate the majority of our pension costs under both financial accounting standards ("FAS") in accordance with

GAAP and CAS in accordance with the FAR. We have prepared our consolidated financial statements and segment reporting
disclosures utilizing pension costs calculated under FAS. Pension costs calculated under CAS are utilized as the basis for
recovery of pension costs on our U.S. Government contracts. For the years ended December 31, 2019, 2018 and 2017, our CAS
pension costs attributed to U.S. Government contracts totaled $46.7 million, $44.0 million and $56.1 million, respectively. The
amount of recoverable CAS pension costs recognized as revenue on an annual basis may differ from the amounts noted above.
See further discussion of our accounting for contracts and revenue recognition above and in Note 1 to our consolidated
financial statements included in this Report.

Actual experience that differs from these assumptions or future changes in assumptions will affect our recognized benefit

obligations and related costs. We immediately recognize net actuarial gains and losses in earnings in the fourth quarter as a
component of net periodic benefit cost. Net actuarial gains and losses occur when actual experience differs from any of the
various assumptions used to value our pension and postretirement benefit plans or when assumptions, which are revisited
annually through our update of our actuarial valuations, change due to current market conditions or underlying demographic
changes. The primary factors contributing to net actuarial gains and losses are changes in the discount rate used to value the
obligations as of the measurement date each year, the difference between the actual return on plan assets and the expected
return on plan assets and changes in health care cost trends. The effect of changes in the discount rate and expected rate of
return on plan assets assumptions in combination with the actual return on plan assets can result in significant changes in our
estimated pension and postretirement benefit cost and our consolidated financial condition.

The following sensitivity analysis shows the impact of a 25 basis point change in the assumed discount rate, return on

assets and health care cost trend rate on our FAS pension and postretirement benefit plan obligations and expense for the year
ended December 31, 2019:

Pension Plans
Discount Rate:

Effect on ongoing net periodic benefit cost (1)
Effect on projected benefit obligation

Return on Assets:

Effect on ongoing net periodic benefit cost

Postretirement Plans
Discount Rate:

Effect on ongoing net periodic benefit cost (1)
Effect on projected benefit obligation

Return on Assets:

Effect on ongoing net periodic benefit cost

Health Care Cost Trend Rate:

Effect on ongoing net periodic benefit cost
Effect on projected benefit obligation

.25% Increase

.25% Decrease

(In millions)

$
$

$
0.7
(37.4) $

(0.8)
40.2

(2.5) $

2.5

0.1
$
(1.7) $

0.1

0.1
1.4

$
$

(0.1)
1.8

(0.1)

(0.1)
(1.2)

(1) Excludes effect of annual mark to market adjustment.

Goodwill and Intangible Assets. Each year, we evaluate goodwill at each reporting unit to assess recoverability, and
impairments, if any, are recognized in earnings. We perform a qualitative analysis when we believe that there is sufficient
excess fair value over carrying value based on our most recent quantitative assessment, adjusted for relevant facts and
circumstances that could affect fair value. Deterioration in macroeconomic, industry and market conditions, cost factors,
overall financial performance, share price decline or entity and reporting unit specific events could cause us to believe a
qualitative test is no longer appropriate.

When we determine that it is appropriate to test goodwill for impairment utilizing a quantitative test, the first step of the

test compares the fair value of a reporting unit to its carrying amount, including goodwill. We utilize both the income and

market valuation approaches to provide inputs into the estimate of the fair value of our reporting units, which would be
considered by market participants.

Under the income valuation approach, we employ a discounted cash flow model to estimate the fair value of each
reporting unit. This model requires the use of significant estimates and assumptions regarding future revenues, costs, margins,
capital expenditures, changes in working capital, terminal year growth rate and cost of capital. Our cash flow models are based
on our forecasted results for the applicable reporting units. Actual results could differ materially from our projections. Some
assumptions, such as future revenues, costs and changes in working capital are company driven and could be affected by a loss
of one or more significant contracts or customers, failure to control costs on certain contracts, a decline in U.S. Government
funding or a decline in demand based on changing economic or regulatory conditions. Changes in external market conditions
may affect certain other assumptions, such as the cost of capital. Market conditions can be volatile and are outside of our
control.

Under the market valuation approach, we employ the guideline publicly traded company method, which indicates the fair

value of the equity of each reporting unit by comparing it to publicly traded companies in similar lines of business. After
identifying and selecting guideline companies, we analyze their business and financial profiles for relative similarity. Factors
such as size, growth, risk and profitability are analyzed and compared to each of our reporting units. Assumptions include the
selection of our peer companies and use of market multiples, which could deteriorate or increase based on the profitability of
our competitors and performance of their stock, which is often dependent on the performance of the stock market and general
economy as a whole.

Adverse changes in these assumptions utilized within the first step of our impairment test could cause a reduction or
elimination of excess fair value over carrying value, resulting in potential recognition of impairment. If the carrying amount of
a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of
the impairment loss, if any. The second step compares the implied fair value of the reporting unit's goodwill with the carrying
amount of that goodwill.

We completed our annual review of goodwill for each of our reporting units for the year ended December 31, 2019,

which indicated that we had no impairment of goodwill. The fair value of our reporting units was substantially in excess of
carrying value.

Each year, we evaluate indefinite-lived intangible assets to assess recoverability, and impairments, if any, are recognized

in earnings. We perform a qualitative assessment when testing indefinite-lived intangible assets for impairment to determine
whether events or circumstances that could affect the significant inputs used in determining fair value have occurred that
indicate that it is more likely than not that the indefinite-lived intangible asset is impaired. Deterioration in macroeconomic,
industry and market conditions, cost factors or overall financial performance could cause us to believe a qualitative test is no
longer appropriate. When quantitative assessments are performed, we primarily utilize income-based valuation approaches.
Under the income-based valuation approach, we employ a relief from royalty method of valuation. This method requires
significant assumptions, including assumed royalty rate, future revenues and cost of capital. Assumptions related to operating
performance, such as future revenues, could be affected by loss of a customer contract, a decline in U.S. Government funding
or a decline in demand based on changing economic or regulatory conditions. Changes in external market conditions may affect
certain other assumptions, such as the cost of capital. Market conditions can be volatile and are outside of our control.

Adverse changes in these assumptions utilized within our indefinite-lived intangible asset impairment test could cause a

reduction or elimination of excess fair value over carrying value, resulting in potential recognition of impairment.

We have completed our annual review of our indefinite-lived intangible assets for the year ended December 31, 2019,

which indicated that we had no impairment. The fair value of our indefinite-lived intangible assets was substantially in excess
of carrying value.

Asset Retirement Obligations and Environmental Cleanup Costs. We accrue for future decommissioning of our nuclear

facilities that will permit the release of these facilities to unrestricted use at the end of each facility's service life, which is a
requirement of our licenses from the NRC and the CNSC. In accordance with the FASB Topic Asset Retirement and
Environmental Obligations, we record the fair value of a liability for an asset retirement obligation in the period in which it is
incurred. In estimating fair value, we use present value of cash flows expected to be incurred in settling our obligations. To the
extent possible, we perform a marketplace assessment of the cost and timing of performing the retirement activities. We apply a
credit-adjusted risk-free interest rate to our expected cash flows in our determination of fair value. When we initially record
such a liability, we capitalize a cost by increasing the carrying amount of the related long-lived asset. When we acquire a
business that has an asset retirement obligation, the asset retirement obligation is recognized at fair value without a

corresponding increase to the related long-lived asset. Over time, the liability is accreted to its present value each period, and
the capitalized cost is depreciated over the useful life of the related asset. Actual costs incurred to decommission our facilities
may differ from the accreted liability. As a result, upon completion of a decommissioning activity, we will either settle the
obligation for its recorded amount or incur a gain or loss. This topic applies to environmental liabilities associated with assets
that we currently operate and are obligated to remove from service. For environmental liabilities associated with assets that we
no longer operate, we have accrued amounts based on the estimated costs of cleanup activities, net of the anticipated effect of
any applicable cost-sharing arrangements. We adjust the estimated costs as further information develops or circumstances
change. An exception to this accounting treatment relates to the work we perform for two facilities for which the U.S.
Government is obligated to pay substantially all the decommissioning costs.

See Note 1 to our consolidated financial statements included in this Report for further discussion of recently adopted

accounting standards.

RESULTS OF OPERATIONS – YEARS ENDED DECEMBER 31, 2019, 2018 and 2017

Selected financial highlights are presented in the table below:

REVENUES:

Nuclear Operations Group
Nuclear Power Group
Nuclear Services Group
Adjustments and Eliminations

OPERATING INCOME:

Nuclear Operations Group
Nuclear Power Group
Nuclear Services Group
Other

Unallocated Corporate

Total Operating Income

Year Ended December 31,
2018

2017

2019

(In thousands)

1,428,587
352,640
131,339
(17,646)
1,894,920

298,328
53,815
14,226
(23,099)
343,270
(17,749)
325,521

1,319,170
365,911
122,438
(7,630)
1,799,889

271,405
52,270
20,374
(18,074)
325,975
(20,998)
304,977

1,271,861
285,831
137,249
(7,203)
1,687,738

267,930
36,548
22,083
(10,688)
315,873
(23,650)
292,223

This section discusses our 2019 and 2018 results of operations and contains year-to-year comparisons between 2019 and

2018. Discussions of our 2017 results and year-to-year comparisons between 2018 and 2017 that are not included in this Report
can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of
our Annual Report on Form 10-K for the year ended December 31, 2018.

Consolidated Results of Operations

Consolidated revenues increased 5.3%, or $95.0 million, to $1,894.9 million in the year ended December 31, 2019
compared to $1,799.9 million for the corresponding period of 2018, due to increases in revenue from our Nuclear Operations
Group and Nuclear Services Group segments totaling $109.4 million and $8.9 million, respectively. These increases were
partially offset by a decrease in our Nuclear Power Group segment of $13.3 million.

Consolidated operating income increased $20.5 million to $325.5 million in the year ended December 31, 2019 compared
to $305.0 million for the corresponding period of 2018. Operating income in our Nuclear Operations Group and Nuclear Power
Group segments increased by $26.9 million and $1.5 million, respectively. We also experienced lower Unallocated Corporate
expenses of $3.2 million when compared to the corresponding period of 2018. These increases were partially offset by
decreases in operating income in our Nuclear Services Group and Other segments of $6.1 million and $5.0 million,
respectively.

Nuclear Operations Group

Revenues
Operating Income
% of Revenues

Year Ended December 31,
2018

2019

$ Change

$
$

1,428,587
298,328
20.9%

(In thousands)
1,319,170
$
271,405
$
20.6%

$
$

109,417
26,923

Revenues increased by 8.3%, or $109.4 million, to $1,428.6 million in the year ended December 31, 2019 compared to

$1,319.2 million for the corresponding period of 2018. This increase was primarily attributable to increased activity in the
manufacture of nuclear components for U.S. Government programs as well as the timing of the procurement of certain long-
lead materials when compared to the corresponding period of 2018. These increases were partially offset by lower activity in
our downblending operations.

Operating income increased $26.9 million to $298.3 million in the year ended December 31, 2019 compared to $271.4

million for the corresponding period of 2018. The increase was due to the operating income impact of the net changes in
revenue noted above as well as the unfavorable contract adjustments recorded in the prior year resulting from rework issues
related to the manufacture of non-nuclear components of $29.2 million.

Nuclear Power Group

Revenues
Operating Income
% of Revenues

$
$

2019

Year Ended December 31,
2018
(In thousands)
365,911
$
52,270
$
14.3%

$
$

352,640
53,815
15.3%

$ Change

(13,271)
1,545

Revenues decreased by 3.6%, or $13.3 million, to $352.6 million in the year ended December 31, 2019 compared to
$365.9 million for the corresponding period of 2018. The decrease was primarily attributable to a decline in revenues resulting
from a lower volume of in-plant inspection, refurbishment and maintenance and modification services when compared to the
same period in the prior year. This decrease was partially offset by a $23.9 million increase in revenues associated with our MI
business and increased activity in our nuclear components business.

Operating income increased $1.5 million to $53.8 million in the year ended December 31, 2019 compared to $52.3
million for the corresponding period of 2018. This increase was primarily attributable to our nuclear fuel manufacturing
business which contains a $5.2 million favorable change in estimate associated with an asset retirement obligation for one of
our nuclear fuel fabrication facilities. This increase was partially offset by the operating income impact of the decrease in
revenues noted above.

Nuclear Services Group

Revenues
Operating Income
% of Revenues

Year Ended December 31,
2018

2019

$ Change

$
$

131,339
14,226
10.8%

(In thousands)
122,438
$
20,374
$
16.6%

$
$

8,901
(6,148)

Revenues increased by 7.3%, or $8.9 million, to $131.3 million in the year ended December 31, 2019 compared to
$122.4 million for the corresponding period of 2018. The increase was primarily attributable to an increase in the volume of
commercial nuclear inspection and maintenance outage work in the U.S. when compared to the same period in the prior year.

Operating income decreased $6.1 million to $14.2 million in the year ended December 31, 2019 compared to $20.4

million for the corresponding period of 2018. The decrease was primarily attributable to higher selling, general and
administrative expenses related to business development activities caused by the timing of proposal activities and lower levels
37

of income at a site in New Mexico that we exited in the prior year. These decreases were partially offset by improved
operational performance at several of our sites and the operating income impact of the increase in revenue related to our U.S.
commercial nuclear services business noted above.

Other

Operating Income

Year Ended December 31,
2018

2019

$ Change

(In thousands)

(23,099) $

(18,074) $

(5,025)

Operating income decreased $5.0 million to a loss of $23.1 million in the year ended December 31, 2019 compared to a

loss of $18.1 million for the corresponding period of 2018, primarily due to an increase in expenses related to research and
development and commercialization activities related to our medical and industrial radioisotope capabilities and other advanced
technologies when compared to the corresponding period of the prior year.

Unallocated Corporate

Unallocated corporate expenses decreased $3.2 million to $17.7 million in the year ended December 31, 2019 compared

to $21.0 million for the corresponding period of 2018, primarily due to higher levels of legal and consulting costs associated
with due diligence activities conducted in the prior year.

Other Income (Expense)

During the year ended December 31, 2019, other income (expense) increased $13.1 million to a loss of $11.8 million

compared to a loss of $24.8 million for the corresponding period of 2018. A component of other income (expense) is net
periodic benefit cost inclusive of mark to market adjustments due to our immediate recognition of net actuarial gains (losses)
for our pension and postretirement benefit plans. Net periodic benefit cost changed to income of $17.5 million in the year
ended December 31, 2019 compared to expense of $0.7 million in the corresponding period of 2018. This increase in income
was partially offset by an increase in interest expense of $7.5 million associated with higher levels of long-term debt when
compared to the prior year.

Provision for Income Taxes

Income before Provision for Income Taxes
Provision for Income Taxes

Effective Tax Rate

Year Ended December 31,
2018

2019

$ Change

$
$

313,742
69,065
22.0%

(In thousands)
280,145
$
52,840
$
18.9%

$
$

33,597
16,225

On December 22, 2017, H.R. 1, the Tax Cuts and Jobs Act (the "Act") was enacted, making significant changes to
existing U.S. tax laws that impact 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. Our Canadian operations continue to be subject to tax
at a local statutory rate of approximately 25%.

For the year ended December 31, 2019, our provision for income taxes increased $16.2 million to $69.1 million, while

income before provision for income taxes increased $33.6 million to $313.7 million. Our effective tax rate was approximately
22.0% for 2019, as compared to 18.9% for 2018. Our effective tax rate for 2019 was 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. These unfavorable rate impacts were partially offset by benefits recognized for excess tax benefits related to
employee share-based payments of $2.4 million. Our effective tax rate for 2018 was lower than the U.S. corporate income tax
rate of 21% primarily due to remeasurement adjustments to our deferred tax assets as a result of accelerating additional
contributions made in August 2018 to certain of our domestic pension plans for inclusion in our 2017 U.S. tax return.

See Note 5 to our consolidated financial statements included in this Report for further information on income taxes.

EFFECTS OF INFLATION AND CHANGING PRICES

Our financial statements are prepared in accordance with GAAP, using historical U.S. dollar accounting ("historical

cost"). Statements based on historical cost, however, do not adequately reflect the cumulative effect of increasing costs and
changes in the purchasing power of the U.S. dollar, especially during times of significant and continued inflation.

In order to minimize the negative impact of inflation on our operations, we attempt to cover the increased cost of
anticipated changes in labor, material and service costs, either through an estimate of those changes, which we reflect in the
original price, or through price escalation clauses in our contracts. However, there can be no assurance we will be able to cover
all changes in cost using this strategy.

LIQUIDITY AND CAPITAL RESOURCES

Our overall liquidity position, which we generally define as our unrestricted cash and cash equivalents and short-term
investments plus amounts available for borrowings under our credit facility, decreased by approximately $5.2 million to $364.8
million at December 31, 2019 compared to $370.0 million at December 31, 2018. We experienced net cash generated from
operations in each of the years ended December 31, 2019, 2018 and 2017. Typically, the fourth quarter has been the period of
highest cash flows from operating activities because of the timing of payments received from the U.S. Government on accounts
receivable retainages and cash dividends received from our joint ventures.

Credit Facility

On May 24, 2018, we and certain of our subsidiaries entered into a credit agreement (the "Credit Facility") with Wells
Fargo Bank, N.A., as administrative agent, and the other lenders party thereto. The Credit Facility includes a $500.0 million
senior secured revolving credit facility (the "Revolving Credit Facility"), a $50.0 million U.S. dollar senior secured term loan A
made available to the Company (the "USD Term Loan") and a $250.0 million (U.S. dollar equivalent) Canadian dollar senior
secured term loan A made available to BWXT Canada Ltd. (the "CAD Term Loan"). All obligations under the Credit Facility
are scheduled to mature on May 24, 2023. The proceeds of loans under the Credit Facility are available for working capital
needs and other general corporate purposes.

The Credit Facility allows for additional parties to become lenders and, subject to certain conditions, for the increase of
the commitments under the Credit Facility, subject to an aggregate maximum for all additional commitments of (1) the greater
of (a) $250 million and (b) 65% of EBITDA, as defined in the Credit Facility, for the last four full fiscal quarters, plus (2) all
voluntary prepayments of term loans, plus (3) additional amounts provided the Company is in compliance with a pro forma
first lien leverage ratio test of less than or equal to 2.50 to 1.00.

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

The Credit Facility is secured by first-priority liens on certain assets owned by the Company (other than its subsidiaries
comprising its Nuclear Operations Group segment and a portion of its Nuclear Services Group segment); provided that (1) the
Company's domestic obligations are only secured by assets and property of the domestic loan parties and (2) the obligations of
BWXT Canada Ltd. and the Canadian guarantors are secured by assets and property of the Canadian guarantors and the
domestic loan parties.

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

quarterly amortization payments on the USD Term Loan and the CAD Term Loan in amounts equal to 1.25% of the initial
aggregate principal amount of each term loan in the third quarter of 2018. We may prepay all loans under the Credit Facility at
any time without premium or penalty (other than customary Eurocurrency breakage costs), subject to notice requirements.

The Credit 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 4.00 to 1.00, which may be
increased to 4.50 to 1.00 for up to four consecutive fiscal quarters after a material acquisition. The minimum consolidated
interest coverage ratio is 3.00 to 1.00. In addition, the Credit Facility contains various restrictive covenants, including with
respect to debt, liens, investments, mergers, acquisitions, dividends, equity repurchases and asset sales. As of December 31,
2019, we were in compliance with all covenants set forth in the Credit Facility.

Outstanding loans under the Credit Facility will bear interest at our option at either (1) the Eurocurrency rate plus a
margin ranging from 1.25% to 2.0% per year or (2) the base rate or Canadian index rate, as applicable (described in the Credit
Facility as the highest of (a) with respect to the base rate only, the federal funds rate plus 0.5%, (b) the one-month Eurocurrency
rate plus 1.0% and (c) the administrative agent's prime rate or the Canadian prime rate, as applicable), plus, in each case, a
margin ranging from 0.25% to 1.0% per year. We are charged a commitment fee on the unused portion of the Revolving Credit
Facility, and that fee ranges from 0.15% to 0.275% per year. Additionally, we are charged a letter of credit fee of between
1.25% and 2.0% per year with respect to the amount of each financial letter of credit issued under the Credit Facility, and a
letter of credit fee of between 0.75% and 1.2% per year with respect to the amount of each performance letter of credit issued
under the Credit 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 December 31, 2019, the margin for
Eurocurrency rate and base rate or Canadian index rate loans was 1.375% and 0.375%, respectively, the letter of credit fee for
financial letters of credit and performance letters of credit was 1.375% and 0.825%, respectively, and the commitment fee for
the unused portion of the Revolving Credit Facility was 0.175%.

As of December 31, 2019, borrowings outstanding totaled $272.2 million and $160.0 million under our term loans and

revolving line of credit, respectively, and letters of credit issued under the Credit Facility totaled $67.6 million. As a result, we
had $272.4 million available for borrowings or to meet letter of credit requirements as of December 31, 2019. As of
December 31, 2019, the weighted-average interest rate on outstanding borrowings under our Credit Facility was 3.29%.

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

opportunity to cure. Under the Credit Facility, (1) if an event of default relating to bankruptcy or other insolvency events
occurs, all related obligations will immediately become due and payable; (2) if any other event of default exists, the lenders
will be permitted to accelerate the maturity of the related obligations outstanding; and (3) if any event of default 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 Credit Facility, or if we are unable to make any of the representations and warranties in the

Credit Facility, we will be unable to borrow funds or have letters of credit issued under the Credit Facility.

Senior Notes

We issued $400.0 million aggregate principal amount of 5.375% senior notes due 2026 (the "Senior Notes") pursuant to

an indenture dated May 24, 2018 (the "Indenture"), among the Company, certain of our subsidiaries, as guarantors, and U.S.
Bank National Association, as trustee. The Senior Notes are guaranteed by each of the Company's present and future direct and
indirect wholly owned domestic subsidiaries that is a guarantor under the Credit Facility.

Interest on the Senior Notes is payable semi-annually in cash in arrears on January 15 and July 15 of each year, which

commenced on July 15, 2018, at a rate of 5.375% per annum. The Senior Notes will mature on July 15, 2026.

On and after July 15, 2021, the Company may redeem the Senior Notes, in whole or in part, at a redemption price equal to

(i) 102.688% of the principal amount to be redeemed if the redemption occurs during the twelve-month period beginning on
July 15, 2021, (ii) 101.344% of the principal amount to be redeemed if the redemption occurs during the twelve-month period
beginning on July 15, 2022 and (iii) 100.0% of the principal amount to be redeemed if the redemption occurs on or after July
15, 2023, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date. At any time prior to July
15, 2021, the Company may also redeem up to 40.0% of the Senior Notes with net cash proceeds of certain equity offerings at a
redemption price equal to 105.375% of the principal amount of the Senior Notes to be redeemed, plus accrued and unpaid
interest, if any, to, but excluding, the redemption date. In addition, at any time prior to July 15, 2021, the Company may redeem
the Senior Notes, in whole or in part, at a redemption price equal to 100.0% of the principal amount of the Senior Notes to be
redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date plus an applicable "make-whole"
premium.

The Indenture contains customary events of default, including, among other things, payment default, failure to comply

with covenants or agreements contained in the Indenture or the Senior Notes and certain provisions related to bankruptcy
events. The Indenture also contains customary negative covenants. As of December 31, 2019, we were in compliance with all
covenants and agreements set forth in the Indenture and the Senior Notes.

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 December 31, 2019, bonds issued and outstanding under
these arrangements totaled approximately $73.3 million.

OTHER

Cash, Cash Equivalents, Restricted Cash and Investments

In the aggregate, our cash and cash equivalents, restricted cash and cash equivalents and investments increased by
approximately $58.5 million to $105.9 million at December 31, 2019 from $47.4 million at December 31, 2018, primarily due
to the items discussed below. Our domestic and foreign cash and cash equivalents, restricted cash and cash equivalents and
investments as of December 31, 2019 and 2018 were as follows:

Domestic
Foreign
Total

December 31,

2019

2018

(In thousands)

76,337
29,526
105,863

37,108
10,279
47,387

Our working capital increased by $59.9 million to $225.0 million at December 31, 2019 from $165.1 million at
December 31, 2018, primarily attributable to increases in cash and cash equivalents and changes in net contracts in progress
and advance billings due to the timing of project cash flows. These increases were partially offset by an increase in accounts
payable caused by the timing of vendor payments.

Our net cash provided by operating activities increased by $110.1 million to $279.4 million in the year ended

December 31, 2019, compared to cash provided by operating activities of $169.3 million in the year ended December 31, 2018.
The increase in cash provided by operating activities was primarily attributable to a $153.3 million decrease in pension
contributions when compared to the prior year, partially offset by the timing of project cash flows.

Our net cash used in investing activities decreased by $146.7 million to $180.0 million in the year ended December 31,
2019, compared to $326.7 million in the year ended December 31, 2018. The decrease in cash used in investing activities was
primarily attributable to our acquisition of the MI business for $213.0 million during the prior year, partially offset by an
increase in purchases of property, plant and equipment of $72.8 million during the year ended December 31, 2019.

Our net cash used in financing activities increased by $34.4 million to $43.7 million in the year ended December 31,
2019, compared to $9.3 million in the year ended December 31, 2018. The increase in net cash used in financing activities was
primarily attributable to a decrease in net borrowings of $237.1 million as compared to the prior year, partially offset by a
decrease in repurchases of common shares of $194.8 million.

At December 31, 2019, we had restricted cash and cash equivalents totaling $5.9 million, $2.8 million of which was held
for future decommissioning of facilities (which is included in other assets on our consolidated balance sheets) and $3.1 million
of which was held to meet reinsurance reserve requirements of our captive insurer.

At December 31, 2019, we had short-term and long-term investments with a fair value of $13.5 million. Our investment

portfolio consists primarily of U.S. Government and agency securities, corporate bonds and equities and mutual funds.

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.

CONTRACTUAL OBLIGATIONS

Our cash requirements as of December 31, 2019 under current contractual obligations were as follows:

Long-term debt principal
Interest payments
Lease payments

Total

Less than
1 Year

1-3
Years

3-5
Years

After
5 Years

$
$
$

832,159
178,998
8,409

$
$
$

14,711
30,330
3,505

(In thousands)
29,422
$
58,972
$
3,110
$

$
$
$

388,026
46,696
725

$
$
$

400,000
43,000
1,069

We expect cash requirements totaling approximately $6.7 million for contributions to our pension plans in 2020. In

addition, we anticipate cash requirements totaling approximately $1.3 million for contributions to our other postretirement
benefit plans in 2020.

Our contingent commitments under letters of credit and surety bonds currently outstanding expire as follows:

Total

Less than
1 Year

$ 140,874

$ 129,028

1-3
Years

(In thousands)
$ 3,053

3-5
Years

$ 1,157

Thereafter

$ 7,636

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk from changes in interest rates relates primarily to our debt instruments. Our borrowings
include both fixed and variable interest rate debt. At December 31, 2019, we had (i) $432.2 million in outstanding borrowings
and $272.4 million available under the Credit Facility and (ii) an aggregate principal amount of $400.0 million of Senior Notes
due 2026. See Item 7 – "Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity
and Capital Resources" for additional information on our debt instruments.

We also have exposure from changes in interest rates related to our cash equivalents and our investment portfolio, which
consists primarily of U.S. Government and agency securities, corporate bonds and equities and mutual funds. We are averse to
principal loss and seek to ensure the safety and preservation of our invested funds by limiting default risk, market risk and
reinvestment risk.

We have operations in foreign locations, and, as a result, our financial results could be significantly affected by factors
such as changes in foreign currency exchange ("FX") rates or weak economic conditions in those foreign markets. In order to
manage the operational risks associated with FX rate fluctuations, we attempt to hedge those risks with FX derivative
instruments. Historically, we have hedged those risks with FX forward contracts. At December 31, 2019, the fair values of our
outstanding derivative instruments were not significant. We do not enter into speculative derivative positions.

Interest Rate Sensitivity

The following tables provide information about our financial instruments that are sensitive to changes in interest rates.

The tables present principal cash flows and related weighted-average interest rates by expected maturity dates.

Principal Amount by Expected Maturity
(In thousands)

At December 31, 2019:

Years Ending December 31,

Fair Value at

December 31,

2020

2021

2022

2023

2024

Thereafter

Total

2019

Investments

Average Interest Rate

Fixed Interest Rate Debt

Average Interest Rate

3,663

1.94%

—

Variable Interest Rate Debt

14,711

$ 388,026

Average Interest Rate

3.26%

3.20%

3.25%

3.11%

— $

7,016

10,679

—

1.41%

— $ 400,000

$ 400,000

—

5.38%

— $ 432,159

—

13,463

423,462

431,644

At December 31, 2018:

Years Ending December 31,

Fair Value at

December 31,

2019

2020

2021

2022

2023

Thereafter

Total

2018

Investments

Average Interest Rate

Fixed Interest Rate Debt

Average Interest Rate

3,587

1.53%

—

— $

7,230

10,817

—

2.28%

— $ 400,000

$ 400,000

—

5.38%

Variable Interest Rate Debt

14,227

$ 320,519

— $ 377,427

10,979

384,940

376,843

Average Interest Rate

3.63%

3.52%

3.50%

3.54%

3.68%

—

Exchange Rate Sensitivity

The following table provides information about our FX forward contracts outstanding at December 31, 2019 and presents

such information in U.S. dollar equivalents. The table presents notional amounts and related weighted-average FX rates by
expected (contractual) maturity dates and constitutes a forward-looking statement. These notional amounts generally are used
to calculate the contractual payments to be exchanged under the contract. The average contractual FX rates are expressed using
market convention, which is dependent on the currencies being bought and sold under the forward contract.

Forward Contracts to Purchase Foreign Currencies in U.S. Dollars (in thousands)

Foreign Currency
Canadian dollar
U.S. dollar (selling Canadian dollar)
Euro (selling Canadian dollar)

Foreign Currency
Canadian dollar
U.S. dollar (selling Canadian dollar)

Year Ending

Fair Value at

Average Contractual

December 31, 2020
3,795
39,735
18,936

$
$
$

Year Ending
December 31, 2021
3,795
1,803

$
$

$
$
$

$
$

December 31, 2019

Exchange Rate

(97)
(213)
(388)

1.2641
1.3052
1.5015

Fair Value at

Average Contractual

December 31, 2019

Exchange Rate

(113)
(10)

1.2608
1.3075

Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of BWX Technologies, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of BWX Technologies, Inc. and subsidiaries (the "Company")
as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, stockholders' equity,
and cash flows for each of the three years in the period ended December 31, 2019, and the related notes (collectively referred to
as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United
States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated February 24, 2020 expressed an unqualified opinion on the Company's internal control over
financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and
we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.

Revenue Recognition – Estimating Costs at Completion – Refer to Note 1 and Note 3 to the Financial Statements.

Critical Audit Matter Description

The Company generally recognizes 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 Topic Revenue from Contracts with
Customers. The Company recognizes estimated contract revenue and resulting income based on the measurement of the extent
of progress toward completion as a percentage of the total project. The Company reviews contract price and cost estimates
periodically as the work progresses and reflect adjustments proportionate to the percentage-of-completion in income in the
period in which those estimates are revised. The accounting for these contracts involves judgment, particularly as it relates to
the process of estimating total costs at completion for the performance obligation.

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

How the Critical Audit Matter Was Addressed in the Audit

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

• We tested the effectiveness of controls over revenue recognized over time, including those over cost estimates at

completion for performance obligations.

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

estimate costs.

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

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

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

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

Tested management's identification of distinct performance obligations.

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

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

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

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

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

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

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

/S/ DELOITTE & TOUCHE LLP

Charlotte, North Carolina
February 24, 2020

We have served as the Company's auditor since 2009.

BWX TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS

ASSETS

Current Assets:

Cash and cash equivalents
Restricted cash and cash equivalents

Investments
Accounts receivable – trade, net

Accounts receivable – other
Retainages
Contracts in progress
Other current assets

Total Current Assets

Property, Plant and Equipment, Net
Investments
Goodwill

Deferred Income Taxes

Investments in Unconsolidated Affiliates

Intangible Assets

Other Assets

TOTAL

See accompanying notes to consolidated financial statements.

December 31,

2019

2018

(In thousands)

86,540
3,056

5,843
56,721

13,426
46,670
376,037
41,462

629,755

580,241
7,620
275,502

58,689

70,116

191,392

95,598

29,871
3,834

3,597
71,574

13,374
57,885
318,454
43,859

542,448

439,239
7,382
274,082

63,908

63,746

228,676

35,615

1,908,913

1,655,096

BWX TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Current maturities of long-term debt
Accounts payable

Accrued employee benefits
Accrued liabilities – other

Advance billings on contracts
Accrued warranty expense

Total Current Liabilities

Long-Term Debt
Accumulated Postretirement Benefit Obligation

Environmental Liabilities

Pension Liability

Other Liabilities
Commitments and Contingencies (Note 10)

Stockholders' Equity:

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

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

Preferred stock, par value $0.01 per share, authorized 75,000,000 shares; no shares

issued

Capital in excess of par value

Retained earnings
Treasury stock at cost, 31,266,670 and 30,625,074 shares at December 31, 2019 and

December 31, 2018, respectively

Accumulated other comprehensive income (loss)

Stockholders' Equity – BWX Technologies, Inc.

Noncontrolling interest

Total Stockholders' Equity

TOTAL

See accompanying notes to consolidated financial statements.

December 31,

2019

2018

(In thousands, except share
and per share amounts)

14,711
170,678

82,640
52,213

75,425
9,042

404,709
809,442
23,259

80,368

172,508

14,515

14,227
114,751

77,386
62,163

98,477
10,344

377,348
753,617
19,236

86,372

173,469

9,353

1,266

1,259

—

134,069

1,344,383

(1,068,164)
(7,448)
404,106

6
404,112
1,908,913

—

115,725

1,166,762

(1,037,795)
(10,289)
235,662

39
235,701
1,655,096

BWX TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF INCOME

Revenues

Costs and Expenses:
Cost of operations

Research and development costs
Losses (gains) on asset disposals and impairments, net
Selling, general and administrative expenses

Total Costs and Expenses

Equity in Income of Investees
Operating Income

Other Income (Expense):

Interest income
Interest expense

Other – net

Total Other Income (Expense)

Income before Provision for Income Taxes

Provision for Income Taxes
Net Income

Net Income Attributable to Noncontrolling Interest

Net Income Attributable to BWX Technologies, Inc.

Earnings per Common Share:

Basic:

Net Income Attributable to BWX Technologies, Inc.

Diluted:

Net Income Attributable to BWX Technologies, Inc.

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

Basic

Diluted

See accompanying notes to consolidated financial statements.

Year Ended December 31,

2019

2018

2017

(In thousands, except share and per share amounts)

1,894,920

1,799,889

1,687,738

1,361,056

17,672
2,824
216,771
1,598,323

28,924
325,521

1,295,876

15,223
64
214,092
1,525,255

30,343
304,977

942
(35,320)
22,599
(11,779)
313,742

69,065
244,677
(562)
244,115

2.56

2.55

2,479
(27,823)
512
(24,832)
280,145

52,840
227,305
(347)
226,958

2.29

2.27

1,191,983

7,190
(194)
210,148
1,409,127

13,612
292,223

1,405
(14,879)
17,031

3,557

295,780

147,415
148,365
(521)
147,844

1.49

1.47

95,377,414

99,062,087

99,334,472

95,810,538

100,019,053

100,369,190

BWX TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net Income

Other Comprehensive Income (Loss):
Currency translation adjustments

Derivative financial instruments:

Year Ended December 31,

2019

2018

2017

244,677

(In thousands)
227,305
$

148,365

5,263

(9,642)

6,237

Unrealized (losses) gains arising during the period, net of tax benefit

(provision) of $442, $(167) and $(264), respectively

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

(1,586)

888

450

(118)

757

(64)

Benefit obligations:

Unrecognized losses arising during the period, net of tax benefit of

$1,274, $2,290 and $532, respectively

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

and $(618), respectively

(4,249)

(8,444)

(987)

2,030

1,500

1,142

Investments:

Unrealized gains (losses) arising during the period, net of tax

provision of $(3), $(6) and $(382), respectively

Reclassification adjustment for gains included in net income, net of

tax provision of $0, $1 and $223, respectively

Other Comprehensive Income (Loss)
Total Comprehensive Income

Comprehensive Income Attributable to Noncontrolling Interest

Comprehensive Income Attributable to BWX Technologies, Inc.

418

(102)

(930)

—
2,764
247,441
(562)
246,879

(2)
(16,358)
210,947
(347)
210,600

(512)
5,643
154,008
(521)
153,487

See accompanying notes to consolidated financial statements.

BWX TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Common Stock

Par
Value

Capital In
Excess of
Par Value

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Treasury
Stock

Stockholders'
Equity

Noncontrolling
Interest

(In thousands, except share and per share amounts)

Balance December 31, 2016

124,149,609

$ 1,241

22,018

885,117

3,811

(762,169)

150,018

Net income

Dividends declared ($0.42 per share)

Currency translation adjustments

Derivative financial instruments

Defined benefit obligations

Available-for-sale investments

Exercises of stock options

Shares placed in treasury

Stock-based compensation charges

Distributions to noncontrolling interests

—

921,040

—

310,942

—

21,699

39,907

15,219

—

147,844

(42,309)

—

6,237

693

155

(1,442)

—

(52,640)

—

147,844

(42,309)

6,237

693

155

(1,442)

21,709

(12,733)

15,222

—

392

521

—

(550)

Total
Stockholders'
Equity

150,410

148,365

(42,309)

6,237

693

155

(1,442)

21,709

(12,733)

15,222

(550)

Balance December 31, 2017

125,381,591

$ 1,254

98,843

990,652

9,454

(814,809)

285,394

363

285,757

Recently adopted accounting standards

Net income

Dividends declared ($0.64 per share)

Currency translation adjustments

Derivative financial instruments

Defined benefit obligations

Available-for-sale investments

Exercises of stock options

Shares placed in treasury

Stock-based compensation charges

Distributions to noncontrolling interests

—

210,311

—

279,964

—

5,002

—

11,880

—

13,311

226,958

(64,159)

—

(3,385)

—

(9,642)

332

(6,944)

(104)

—

9,926

226,958

(64,159)

(9,642)

332

(6,944)

(104)

5,004

(222,986)

—

11,883

—

Balance December 31, 2018

125,871,866

$ 1,259

$ 115,725

$ 1,166,762

(10,289)

$ (1,037,795)

235,662

Recently adopted accounting standards

Net income

Dividends declared ($0.68 per share)

Currency translation adjustments

Derivative financial instruments

Defined benefit obligations

Available-for-sale investments

Exercises of stock options

Shares placed in treasury

Stock-based compensation charges

Distributions to noncontrolling interests

—

246,967

—

460,452

—

5,623

—

12,721

—

(1,219)

244,115

(65,275)

—

5,263

(698)

(2,219)

418

—

(30,369)

—

(1,142)

244,115

(65,275)

5,263

(698)

(2,219)

418

5,625

(30,369)

12,726

—

347

—

(671)

—

562

—

(595)

9,926

227,305

(64,159)

(9,642)

332

(6,944)

(104)

5,004

(222,986)

11,883

(671)

235,701

(1,142)

244,677

(65,275)

5,263

(698)

(2,219)

418

5,625

(30,369)

12,726

(595)

Balance December 31, 2019

126,579,285

$ 1,266

$ 134,069

$ 1,344,383

(7,448)

$ (1,068,164)

404,106

404,112

See accompanying notes to consolidated financial statements.

BWX TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income

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

Depreciation and amortization

Income of investees, net of dividends

Provision for deferred taxes

Recognition of losses for pension and postretirement plans

Stock-based compensation expense

Other, net

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

Accounts receivable

Accounts payable

Retainages

Contracts in progress and advance billings on contracts

Income taxes

Accrued and other current liabilities
Pension liabilities, accrued postretirement benefit obligations and employee benefits

Other, net

NET CASH PROVIDED BY OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment

Acquisition of businesses

Purchases of securities
Sales and maturities of securities

Investments, net of return of capital, in equity method investees

Other, net

NET CASH USED IN INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings of long-term debt
Repayments of long-term debt

Payment of debt issuance costs

Repurchases of common shares

Dividends paid to common shareholders
Exercises of stock options

Cash paid for shares withheld to satisfy employee taxes

Other, net

NET CASH USED IN FINANCING ACTIVITIES

EFFECTS OF EXCHANGE RATE CHANGES ON CASH
TOTAL INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND

RESTRICTED CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH

EQUIVALENTS AT BEGINNING OF PERIOD

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH

EQUIVALENTS AT END OF PERIOD

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the period for:

Interest

Income taxes (net of refunds)

SCHEDULE OF NON-CASH INVESTING ACTIVITY:

Accrued capital expenditures included in accounts payable

See accompanying notes to consolidated financial statements.

2019

Year Ended December 31,
2018
(In thousands)

2017

244,677

227,305

148,365

61,722

(7,969)

3,794

6,222

12,726

963

15,605

44,592

11,477

(78,645)

(3,833)

(14,135)
(8,822)

(9,006)

279,368

(182,124)

—

(4,208)
5,874

255

208
(179,995)

699,600
(654,095)

—

(20,000)

(65,374)
4,446

(9,190)

900

(43,713)

332

55,992

36,408

60,097

(8,106)

17,446

34,554

11,883

(2,238)

37,282

1,888

24,911

(34,012)

(23,257)

11,596
(187,425)

(2,634)

169,290

(109,338)

(212,993)

(4,520)
3,933

(9,059)

5,253
(326,724)

1,158,800
(876,206)

(9,443)

(214,759)

(63,821)
3,573

(6,796)

(671)

(9,323)

(9,979)

56,557

2,520

93,461

12,823

15,222

(194)

(34,459)

(7,476)

(8,344)

35,272

15,124

(26,610)
(79,311)

(990)

221,960

(96,880)

(715)

(3,237)
12,852

(2,789)

1,088
(89,681)

109,400
(137,053)

—

(42,043)
17,117

(8,049)

(550)

(61,178)

7,443

(176,736)

78,544

213,144

134,600

92,400

36,408

213,144

39,670

70,056

39,528

16,993

58,715

29,470

14,252

38,425

8,454

BWX TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2019

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

We have presented the consolidated financial statements of BWX Technologies, Inc. ("BWXT") in U.S. dollars in

accordance with accounting principles generally accepted in the United States ("GAAP").

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
December 31, 2019 and for the year ended December 31, 2019. On June 30, 2015, we completed the spin-off of our former
Power Generation business (the "spin-off") into an independent, publicly traded company named Babcock & Wilcox
Enterprises, Inc. ("BWE"). We present the notes to our 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 Power Group and Nuclear Services Group.

Our reportable segments are further described as follows:

• Our Nuclear Operations Group segment manufactures naval nuclear reactors for the U.S. Naval Nuclear Propulsion
Program for use in 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.

• 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 also provides inspection and maintenance services primarily for the U.S.
commercial nuclear industry including steam generator and heat exchanger inspection services, high pressure water
lancing, non-destructive examination and customized tooling solutions. This segment also develops technology for a

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

See Note 15 for financial information about our segments.

Recently Adopted Accounting Standards

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

update requires that a lessee recognize on its balance sheets the assets and liabilities for all leases with lease terms of more than
12 months, along with additional qualitative and quantitative disclosures. We adopted this update using the modified
retrospective method, which resulted in the recognition of right-of-use assets totaling $45.1 million and lease liabilities totaling
$11.9 million. The difference between the right-of-use assets and lease liabilities of $33.2 million was primarily the result of
reclassifications from Intangible Assets of favorable leases related to recent acquisitions. In addition, we elected the package of
practical expedients permitted under the transition guidance, which allowed us to carry forward our historical lease
classifications, among other things. The adoption of the provisions in this update did not have an impact on our consolidated
statements of income or cash flows.

Use of Estimates

We use estimates and assumptions to prepare our financial statements in conformity with GAAP. Some of our more

significant estimates include estimates of costs to complete long-term contracts and the associated revenues, estimates of the
fair value of acquired intangible and other assets, estimates we make in selecting assumptions related to the valuations of our
pension and postretirement benefit plans, including the selection of our discount rates, mortality and expected rates of return on
our pension plan assets and estimates we make in evaluating our asset retirement obligations. These estimates and assumptions
affect the amounts we report in our financial statements and accompanying notes. Our actual results could differ from these
estimates. Variances could result in a material effect on our financial condition and results of operations in future periods.

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 FASB Topic Revenue from Contracts with Customers. We recognize estimated contract
revenue and resulting income based on the measurement of the extent of progress toward completion as a percentage of the
total project. Certain costs may be excluded from the cost-to-cost method of measuring progress, such as significant costs for
uninstalled materials, if such costs do not depict our performance in transferring control of goods or services to the customer.
We review contract price and cost estimates periodically as the work progresses and reflect adjustments proportionate to the
percentage-of-completion in income in the period when those estimates are revised. 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 consolidated balance sheet.

Warranty Expense

We accrue estimated warranty expense, included in Cost of operations on our consolidated statements of income, to

satisfy contractual warranty requirements when we 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, results of operations and cash
flows.

The following summarizes the changes in the carrying amount of Accrued warranty expense:

Balance at beginning of period
Additions
Expirations and other changes (1)
Payments
Translation
Balance at end of period

Year Ended December 31,
2018

2017

2019

10,344
2,232
(2,728)
(1,065)
259
9,042

(In thousands)
13,428
$
1,494
(3,367)
(663)
(548)
10,344

11,477
3,783
(2,213)
(70)
451
13,428

(1) Includes discounts provided to customers in satisfaction of warranty obligations totaling $1.2 million in each of the

years ended December 31, 2019, 2018 and 2017.

Stock-Based Compensation

We expense stock-based compensation in accordance with FASB Topic Compensation – Stock Compensation. Under this

topic, the fair value of equity-classified awards, such as restricted stock, performance shares and stock options, is determined
on the date of grant and is not remeasured. The fair value of liability-classified awards, such as cash-settled stock appreciation
rights, restricted stock units and performance units, is determined on the date of grant and is remeasured at the end of each
reporting period through the date of settlement. Grant date fair values for restricted stock, restricted stock units, performance
shares and performance units are determined using the closing price of our common stock on the date of grant.

Under the provisions of this FASB topic, we recognize expense for all share-based awards granted on a straight-line basis

over the requisite service periods of the awards, which is generally equivalent to the vesting term. This topic requires
compensation expense to be recognized such that compensation expense is recorded only for those awards expected to vest. As
a result, we periodically review the amount of actual forfeitures and record any adjustments deemed necessary each reporting
period. We also recognize excess tax benefits in our provision for income taxes. These excess tax benefits result from tax
deductions in excess of the cumulative compensation expense recognized for options exercised and other equity-classified
awards.

Additionally, this FASB topic amended FASB Topic Statement of Cash Flows to require excess tax benefits to be
classified along with other income tax cash flows as an operating activity. In addition, cash flows related to employee taxes
paid for withheld shares are classified as a financing activity.

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

Research and Development

Our research and development activities are related to the development and improvement of new and existing products

and equipment, as well as conceptual and engineering evaluation for translation into practical applications. We charge the costs
of research and development unrelated to specific contracts as incurred. Contractual arrangements for customer-sponsored
research and development can vary on a case-by-case basis and include contracts, cooperative agreements and grants.

Research and development activities totaled $66.9 million, $63.4 million and $50.4 million in the years ended
December 31, 2019, 2018 and 2017, respectively. This includes amounts paid for by our customers of $49.2 million, $48.2
million and $43.2 million, in the years ended December 31, 2019, 2018 and 2017, respectively.

Capitalization of Interest Cost

We capitalize interest in accordance with FASB Topic Interest. We incurred total interest of $41.4 million, $31.5 million

and $16.5 million in the years ended December 31, 2019, 2018 and 2017, respectively, of which we capitalized $6.1 million,
$3.7 million and $1.6 million in the years ended December 31, 2019, 2018 and 2017, respectively.

Income Taxes

Income tax expense for federal, foreign, state and local income taxes is calculated on pre-tax income based on current tax
law and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets
54

and liabilities. We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be
realized. We assess deferred taxes and the adequacy of the valuation allowance on a quarterly basis. In the ordinary course of
business, there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record
tax benefits for all years subject to examination based upon management's evaluation of the facts, circumstances and
information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be
sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon
ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions
where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial
statements. We record interest and penalties (net of any applicable tax benefit) related to income taxes as a component of
Provision for Income Taxes on our consolidated statements of income.

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

unrecognized deferred income tax liabilities, including withholding taxes, would be payable upon distribution of these earnings.
We consider the earnings of our non-U.S. subsidiaries to be permanently reinvested.

Earnings Per Share

We have computed earnings per common share on the basis of the weighted-average number of common shares, and,

where dilutive, common share equivalents, outstanding during the indicated periods. We issue a number of forms of stock-
based compensation periodically, including incentive and non-qualified stock options, restricted stock, restricted stock units and
performance shares and performance units, subject to satisfaction of specific performance goals. We include the shares
applicable to these plans in our computation of diluted earnings per share when related performance criteria have been met.

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Our cash equivalents are highly liquid investments with maturities of three months or less when we purchase them.

We record cash and cash equivalents as restricted when we are unable to freely use such cash and cash equivalents for our

general operating purposes. At December 31, 2019, we had restricted cash and cash equivalents totaling $5.9 million, $2.8
million of which was held for future decommissioning of facilities (which is included in Other Assets on our consolidated
balance sheets) and $3.1 million of which was held to meet reinsurance reserve requirements of our captive insurer.

The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents on our

consolidated balance sheets to the totals presented on our consolidated statements of cash flows:

Cash and cash equivalents
Restricted cash and cash equivalents
Restricted cash and cash equivalents included in Other Assets
Total cash and cash equivalents and restricted cash and cash equivalents as presented on our

consolidated statements of cash flows

December 31,

2019

2018

(In thousands)

86,540
3,056
2,804

29,871
3,834
2,703

92,400

36,408

Investments

Our investment portfolio consists primarily of U.S. Government and agency securities, corporate bonds and equities and
mutual funds. Our 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 the unrealized gains and losses, net of tax, reported as a component of
Accumulated other comprehensive income. Our equity securities are carried at fair value with the unrealized gains and losses
reported in earnings. We classify investments available for current operations in the consolidated balance sheets as current
assets, while we classify investments held for long-term purposes as non-current assets. We adjust the amortized cost of debt
securities for amortization of premiums and accretion of discounts to maturity. That amortization is included in Interest income.
We include realized gains and losses on our investments in Other – net. The cost of securities sold is based on the specific
identification method. We include interest on securities in Interest income.

Inventories

We carry our inventory at the lower of cost or net realizable value using either the weighted average or first-in, first-out
methods. At December 31, 2019 and 2018, Other current assets included inventories totaling $17.1 million and $16.0 million,
respectively, consisting entirely of raw materials and supplies.

Property, Plant and Equipment

We carry our property, plant and equipment at depreciated cost, less any impairment provisions. We depreciate our
property, plant and equipment using the straight-line method over estimated economic useful lives of eight to 40 years for
buildings and three to 14 years for machinery and equipment. Our depreciation expense was $51.0 million, $48.6 million and
$47.3 million for the years ended December 31, 2019, 2018 and 2017, respectively. We expense the costs of maintenance,
repairs and renewals that do not materially prolong the useful life of an asset as we incur them.

Property, plant and equipment is stated at cost and is set forth below:

December 31,

2019

2018

Land
Buildings
Machinery and equipment
Property under construction

Less: Accumulated depreciation
Net Property, Plant and Equipment

Goodwill

(In thousands)
8,919
221,462
775,997
265,715
1,272,093
691,852
580,241

8,784
205,552
770,876
147,180
1,132,392
693,153
439,239

Goodwill represents the excess of the cost of our acquired businesses over the fair value of the net assets acquired. We
perform testing of goodwill for impairment annually. We may elect to perform a qualitative test when we believe that there is
sufficient excess fair value over carrying value based on our most recent quantitative assessment, adjusted for relevant events
and circumstances that could affect fair value during the current year. If we conclude based on this assessment that it is more
likely than not that the reporting unit is not impaired, we do not perform a quantitative impairment test. In all other
circumstances, we utilize a two-step quantitative impairment test to identify potential goodwill impairment and measure the
amount of any goodwill impairment. The first step of the test compares the fair value of a reporting unit with its carrying
amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill
impairment test is performed to measure the amount of the impairment loss, if any. The second step compares the implied fair
value of the reporting unit's goodwill with the carrying amount of that goodwill.

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

Balance at December 31, 2017
Acquisition of the MI business (Note 2)
Translation
Balance at December 31, 2018
Translation and other (1)
Balance at December 31, 2019

Nuclear
Operations
Group

Nuclear
Power
Group

Nuclear
Services
Group

110,939
—
—
110,939
—
110,939

(In thousands)

62,392
62,495
(6,744)
118,143
1,420
119,563

45,000
—
—
45,000
—
45,000

Total

218,331
62,495
(6,744)
274,082
1,420
275,502

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

acquisition.

Investments in Unconsolidated Affiliates

We use the equity method of accounting for affiliates in which we are able to exert significant influence. Currently, all of
our material investments in affiliates that are not consolidated are recorded using the equity method. Affiliates in which we are
unable to exert significant influence are carried at fair value.

Intangible Assets

Intangible assets are recognized at fair value when acquired. Intangible assets with definite lives are amortized to Costs

and Expenses using the straight-line method over their estimated useful lives and tested for impairment when events or changes
in circumstances indicate that their carrying amounts may not be recoverable. Intangible assets with indefinite lives are not
amortized and are subject to annual impairment testing. We may elect to perform a qualitative assessment when testing
indefinite-lived intangible assets for impairment to determine whether events or circumstances affecting significant inputs
related to the most recent quantitative evaluation have occurred, indicating that it is more likely than not that the indefinite-
lived intangible asset is impaired. Otherwise, we test indefinite-lived intangible assets for impairment by quantitatively
determining the fair value of the indefinite-lived intangible asset and comparing the fair value of the intangible asset to its
carrying amount. If the carrying amount of the intangible asset exceeds its fair value, we recognize impairment for the amount
of the difference.

Our Intangible Assets were as follows:

Amortized intangible assets:

Gross cost:

Technical support agreement
Customer relationships
Unpatented technology
Favorable operating leases
CNSC class 1B nuclear facility license
Acquired backlog
Patented technology
Tradename
All other
Total

Accumulated amortization:

Net amortized intangible assets

Unamortized intangible assets:
NRC category 1 license

2019

December 31,
2018

(In thousands)

2017

$
$

67,423
39,555
36,785
—
26,002
—
765
—
2,200
172,730

(4,153) $
(13,841)
(2,805)
—
(2,635)
—
(212)
—
(1,522)
(25,168) $
$
147,562

64,749
38,771
35,327
35,161
24,971
8,079
734
—
2,200
209,992

(1,173) $
(11,767)
(1,194)
(1,295)
(1,698)
(6,581)
(136)
—
(1,302)
(25,146) $
$
184,846

—
30,339
8,379
8,832
27,055
13,527
796
1,500
2,200
92,628

—
(11,505)
(4,456)
(459)
(938)
(6,113)
(75)
(1,425)
(1,082)
(26,053)
66,575

43,830

The following summarizes the changes in the carrying amount of Intangible Assets:

Year Ended December 31,
2018

2017

2019

Balance at beginning of period
Acquisitions (Note 2)
Amortization expense
Reclassification of right-of-use assets
Translation
Balance at end of period

228,676
—
(9,128)
(33,866)
5,710
191,392

(In thousands)
110,405
$
139,257
(11,490)
—
(9,496)
228,676

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

Year Ended December 31,
2020
2021
2022
2023
2024

Leases

$
$
$
$
$

114,748
746
(9,210)
—
4,121
110,405

Amount

7,881
7,881
7,881
7,679
7,661

We 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 Other Assets on our 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 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 year ended December 31, 2019, we recognized lease expense of $8.1 million, which included $1.6 million
related to the amortization of favorable lease agreements, and paid cash of $7.0 million for our operating leases. During the
years ended December 31, 2018 and 2017, we recognized lease expense of $6.2 million and $5.1 million, respectively. At
December 31, 2019, our weighted-average remaining lease term was 4.3 years, and for the purpose of measuring the present
value of our lease liabilities, the weighted-average discount rate was 4.96%. The maturities of our lease liabilities at
December 31, 2019 were as follows (amounts in thousands):

2020
2021
2022
2023
2024
Thereafter
Total lease payments
Less: Interest
Present value of lease liabilities (1)

3,505
1,912
1,198
553
172
1,069
8,409
(846)
7,563

(1) Includes current lease liabilities of $3.4 million.

At December 31, 2019, our right-of-use assets totaled $41.0 million. The difference between the right-of-use assets and

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

Future minimum payments required under operating leases that had initial or remaining noncancellable lease terms in

excess of one year at December 31, 2018 were as follows (amounts in thousands):

2019
2020
2021
2022
2023
Thereafter

$
$
$
$
$
$

5,650
2,655
1,969
1,216
511
1,231

Deferred Debt Issuance Costs

We have included deferred debt issuance costs in the consolidated balance sheets as a direct deduction from the carrying
amount of our debt liability. We amortize deferred debt issuance costs as interest expense over the life of the related debt. The
following summarizes the changes in the carrying amount of these assets:

Balance at beginning of period
Additions
Interest expense (1)
Balance at end of period

Year Ended December 31,
2018

2017

2019

9,583
—
(1,577)
8,006

(In thousands)
4,202
$
9,443
(4,062)
9,583

5,892
—
(1,690)
4,202

(1) Includes the recognition of prior deferred debt issuance costs associated with a former credit facility of $2.4 million for

the year ended December 31, 2018.

Pension Plans and Postretirement Benefits

We sponsor various defined benefit pension and postretirement benefit plans covering certain employees of our U.S. and

Canadian subsidiaries. We utilize actuarial valuations to calculate the cost and benefit obligations of our pension and
postretirement benefits. The actuarial valuations utilize significant assumptions in the determination of our benefit cost and
obligations, including assumptions regarding discount rates, expected returns on plan assets, mortality and health care cost
trends. We determine our discount rate based on a yield curve comprised of rates of return on high-quality, fixed-income
investments currently available and expected to be available during the period to maturity of our pension and postretirement
benefit plan obligations. The expected rate of return on plan assets assumption is based on capital market assumptions of the
long-term expected returns for the investment mix of assets currently in the portfolio. The expected rate of return on plan assets
is determined to be the weighted-average of the nominal returns based on the weightings of the classes within the total asset
portfolio. Expected health care cost trends represent expected annual rates of change in the cost of health care benefits and are
estimated based on analysis of health care cost inflation.

The components of benefit cost related to service cost, interest cost, expected return on plan assets and prior service cost
amortization are recorded on a quarterly basis based on actuarial assumptions. In the fourth quarter of each year, or as interim
remeasurements are required, we immediately recognize net actuarial gains and losses in earnings as a component of net
periodic benefit cost. Recognized net actuarial gains and losses consist primarily of our reported actuarial gains and losses and
the difference between the actual return on plan assets and the expected return on plan assets.

We recognize the funded status of each plan as either an asset or a liability in the consolidated balance sheets. The funded

status is the difference between the fair value of plan assets and the present value of its benefit obligation, determined on a
plan-by-plan basis. Our pension plan assets can include assets that are difficult to value. See Note 7 for detailed information
regarding our plan assets.

Asset Retirement Obligations and Environmental Cleanup Costs

We accrue for future decommissioning of our nuclear facilities that will permit the release of these facilities to
unrestricted use at the end of each facility's service life, which is a requirement of our licenses from the U.S. Nuclear
Regulatory Commission ("NRC") and the Canadian Nuclear Safety Commission ("CNSC"). In accordance with the FASB
Topic Asset Retirement and Environmental Obligations, we record the fair value of a liability for an asset retirement obligation

in the period in which it is incurred. When we initially record such a liability, we capitalize a cost by increasing the carrying
amount of the related long-lived asset. When we acquire a business that has an asset retirement obligation, the asset retirement
obligation is recognized at fair value without a corresponding increase to the related long-lived asset. Over time, the liability is
accreted to its present value each period and the capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of a liability, we will settle the obligation for its recorded amount or incur a gain or loss. This topic applies to
environmental liabilities associated with assets that we currently operate and are obligated to remove from service. For
environmental liabilities associated with assets that we no longer operate, we have accrued amounts based on the estimated
costs of cleanup activities for which we are responsible, net of any cost-sharing arrangements. We adjust the estimated costs as
further information develops or circumstances change. An exception to this accounting treatment relates to the work we
perform for two facilities for which the U.S. Government is obligated to pay substantially all of the decommissioning costs.

Substantially all of our asset retirement obligations relate to the remediation of our nuclear analytical laboratory and the
NFS facility in our Nuclear Operations Group segment as well as certain facilities in our Nuclear Power Group segment. The
following summarizes the changes in the carrying amount of these liabilities:

Balance at beginning of period
Costs incurred
Additions/adjustments
Acquisitions
Accretion
Translation and other (1)
Balance at end of period (2)

Year Ended December 31,
2018

2017

2019

90,822
(10,380)
(5,030)
—
5,379
(3,503)
77,288

(In thousands)
78,036
$
(1,011)
8,000
2,062
5,523
(1,788)
90,822

71,899
(2)
—
—
4,728
1,411
78,036

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

(2) Includes current asset retirement obligations of $5.7 million, $13.8 million and $8.1 million at December 31, 2019,

2018 and 2017, respectively.

Self-Insurance

We have a wholly owned insurance subsidiary that provides employer's liability, general and automotive liability and

primary workers' compensation insurance and, from time to time, builder's risk insurance (within certain limits) to our
companies. We may also, in the future, have this insurance subsidiary accept other risks that we cannot or do not wish to
transfer to outside insurance companies. Included in Other Liabilities on our consolidated balance sheets are reserves for self-
insurance totaling $5.2 million and $5.6 million at December 31, 2019 and 2018, respectively.

Loss Contingencies

We accrue liabilities for loss contingencies when it is probable that a liability has been incurred and the amount of loss is

reasonably estimable. We provide disclosure when there is a reasonable possibility that the ultimate loss will exceed the
recorded provision or if such probable loss is not reasonably estimable. Due to the nature of our business, we are, from time to
time, involved in investigations, litigation, disputes or claims related to our business activities, as discussed in Note 10. Our
losses are typically resolved over long periods of time and are often difficult to assess and estimate due to, among other
reasons, the possibility of multiple actions by third parties; the attribution of damages, if any, among multiple defendants;
plaintiffs, in most cases involving personal injury claims, do not specify the amount of damages claimed; the discovery process
may take multiple years to complete; during the litigation process, it is common to have multiple complex unresolved
procedural and substantive issues; the potential availability of insurance and indemnity coverages; the wide-ranging outcomes
reached in similar cases, including the variety of damages awarded; the likelihood of settlements for de minimus amounts prior
to trial; the likelihood of success at trial; and the likelihood of success on appeal. Consequently, it is possible future earnings
could be affected by changes in our assessments of the probability that a loss has been incurred in a material pending litigation
against us and/or changes in our estimates related to such matters.

Accumulated Other Comprehensive Income

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

Currency translation adjustments
Net unrealized gain on derivative financial instruments
Unrecognized prior service cost on benefit obligations
Net unrealized gain (loss) on available-for-sale investments
Accumulated other comprehensive income

December 31,

2019

2018

(In thousands)
8,769
64
(16,614)
333
(7,448) $

3,506
685
(14,395)
(85)
(10,289)

Upon adopting the FASB update to the Topic Derivatives, we reclassified $0.1 million from Retained earnings to

Accumulated other comprehensive income on January 1, 2019.

The amounts reclassified out of Accumulated other comprehensive income by component and the affected consolidated

statements of income line items are as follows:

2019

Year Ended December 31,
2018

2017

(In thousands)

Line Item Presented

$
$

(132) $

(1,066)
(1,198)
310
(888) $

(2,592) $
562
(2,030) $
— $
—
— $
(2,918) $

(242) $
407
165
(47)
118

(1,910) $
410
(1,500) $
3
$
(1)
$
2
(1,380) $

169 Revenues
(84) Cost of operations
85 Total before tax
(21) Provision for Income Taxes
64 Net Income

(1,760) Other – net

618 Provision for Income Taxes

(1,142) Net Income
735 Other – net
(223) Provision for Income Taxes
512 Net Income
(566)

Accumulated Other Comprehensive Income

(Loss) Component Recognized
Realized (loss) gain on derivative

financial instruments

Amortization of prior service cost on

benefit obligations

Realized gains on investments

Total reclassification for the period

Foreign Currency Translation

We translate assets and liabilities of our foreign operations into U.S. dollars at current exchange rates, and we translate

income statement items at average exchange rates for the periods presented. We record adjustments resulting from the
translation of foreign currency financial statements as a component of Accumulated other comprehensive income. We report
foreign currency transaction gains and losses in income. We have included in Other – net transaction gains (losses) of $1.0
million, $2.0 million and $(0.7) million for the years ended December 31, 2019, 2018 and 2017, respectively.

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 consolidated balance sheets. Based on the
hedge designation at inception of the contract, the related gains and losses on these contracts are deferred in stockholders'

equity as a component of Accumulated other comprehensive income until the hedged item is recognized in earnings. The gain
or loss on a derivative instrument not designated as a hedging instrument is immediately recognized in earnings. Gains and
losses on derivative financial instruments that require immediate recognition are included as a component of Other – net on our
consolidated statements of income.

We have designated the majority of our FX forward contracts that qualify for hedge accounting as cash flow hedges. The

hedged risk is the risk of changes in functional-currency-equivalent cash flows attributable to changes in FX spot rates of
forecasted transactions primarily related to long-term contracts. We exclude from our assessment of effectiveness the portion of
the fair value of the FX forward contracts attributable to the difference between FX spot rates and FX forward rates. At
December 31, 2019, we had deferred approximately $0.1 million of net gains on these derivative financial instruments.
Assuming market conditions continue, we expect to recognize the majority of this amount in the next twelve months. For the
year ended December 31, 2018, we recognized $4.7 million of gains associated with FX forward contracts not designated as
hedges, which we recorded as an investing activity in the consolidated statement of cash flows.

At December 31, 2019, our derivative financial instruments consisted of FX forward contracts with a total notional value

of $68.1 million with maturities extending to December 2021. These instruments consist primarily of FX forward contracts to
purchase or sell Canadian dollars and Euros. We are exposed to credit-related losses in the event of non-performance by
counterparties to derivative financial instruments. We attempt to mitigate this risk by using major financial institutions with
high credit ratings. Our counterparties to derivative financial instruments have the benefit of the same collateral arrangements
and covenants as described under our credit facility.

New Accounting Standards

In June 2016, the FASB issued Topic Financial Instruments – Credit Losses. This update requires entities to recognize
expected credit losses immediately in the financial statements. We expect to adopt the provisions of this update on January 1,
2020. We do not expect the adoption of this update to have a material impact on our financial statements.

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

Test for Goodwill Impairment. This update eliminates the two-step process that requires the identification of a potential
impairment and a separate analysis to measure the amount of the impairment. Our annual assessment of goodwill impairment
will be now determined by comparing the fair value of a reporting unit with its carrying amount. We expect to adopt the
provisions of this update on January 1, 2020. We do not expect the adoption of this update to have a material impact on our
financial statements.

NOTE 2 – ACQUISITIONS

Laker Energy Products Ltd.

On January 2, 2020, our subsidiary BWXT Canada Ltd. acquired Laker Energy Products Ltd. ("Laker Energy Products")

for CAD 21.1 million ($16.2 million U.S. dollar equivalent), subject to contingent consideration of up to an additional CAD
12.0 million. Laker Energy Products is a global supplier of nuclear-grade materials and precisely machined components for
CANDU nuclear power utilities and employs approximately 140 personnel. Laker Energy Products will be reported as part of
our Nuclear Power Group segment.

Nordion Medical Isotope Business

On July 30, 2018, our subsidiary BWXT ITG Canada, Inc. acquired the 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 addition to 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 a number of future
radioisotope-based imaging, diagnostic and therapeutic products. This business is reported as part of our Nuclear Power Group
segment.

The purchase price of the 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
Contracts in progress
Inventories
Other current assets
Property, plant and equipment
Goodwill
Deferred Income Taxes
Intangible assets

Total assets acquired

Accounts payable
Accrued employee benefits
Accrued liabilities – other
Environmental liabilities
Pension liability

Total liabilities assumed

Net assets acquired
Amount of tax deductible goodwill

$
$

$
$
$

7,732
51
2,113
97
12,948
62,495
3,006
139,257
227,699
654
579
1,665
2,062
9,746
14,706
212,993
53,693

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

Technical support agreement
Unpatented technology
Favorable operating leases
Customer relationship

Amount

67,500
33,000
28,157
10,600

$
$
$
$

Amortization
Period

23 years
23 years
13-30 years
23 years

The following unaudited pro forma financial information presents our results of operations for the years ended
December 31, 2018 and 2017 as if the acquisition of the MI business had occurred on January 1, 2017. The unaudited pro
forma financial information below is not intended to represent or be indicative of our actual consolidated results had we
completed the acquisition at January 1, 2017. This information is presented for comparative purposes only and should not be
taken as representative of our future consolidated results of operations.

Revenues
Net Income Attributable to BWX Technologies, Inc.
Basic Earnings per Common Share
Diluted Earnings per Common Share

Year Ended December 31,

2018

2017

(In thousands, except per share
amounts)

$
$
$
$

1,825,029
228,545
2.31
2.29

$
$
$
$

1,726,135
143,475
1.44
1.43

The unaudited pro forma results include the following pre-tax adjustments to the historical results presented above:

•

Increase in amortization expense related to timing of amortization of the fair value of identifiable intangible assets
acquired of approximately $3.5 million and $6.0 million for the years ended December 31, 2018 and 2017,
respectively.

• 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 $2.4 million and $5.2 million for the years ended December 31,
2018 and 2017, respectively.

• Elimination of $2.5 million in acquisition related costs recognized in the year ended December 31, 2018 that are not

expected to be recurring.

NOTE 3 – REVENUE RECOGNITION

The initial impact of the adoption of the FASB Topic Revenue from Contracts with Customers, which was recognized in a

cumulative catch-up adjustment on January 1, 2018, is illustrated below:

Assets:

Contracts in progress
Deferred Income Taxes

Liabilities:

Accrued liabilities – other
Advance billings on contracts

Stockholders' Equity:
Retained earnings

January 1,

December 31,

2018

2017

(In thousands)

$
$

260,932
85,193

66,371
73,390

1,000,578

$
$

420,628
86,740

64,738
246,192

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. Prior to January 1, 2018, 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 cost of
operations recognized on performance obligations, and the adjustment to capture the impact of the new revenue recognition
standard was recorded as a cumulative catch-up adjustment in Retained earnings. The new standard also resulted in a reduction
in both our Contracts in progress and Advance billings on contracts account balances as a result of measuring the asset and
liability at the contract level. Prior to January 1, 2018, contract assets and liabilities were measured at the unit of account,
which we concluded was at a lower level than that of the contract.

The impact of the adoption of the new revenue standard on our Nuclear Power Group and Nuclear Services Group

segments was not material.

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 primarily 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. Our fuel and downblending contracts allow billing when we achieve certain milestones related to our progress.

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

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.

Disaggregated Revenues

Revenues by geographical area and customer type were as follows:

Year Ended December 31, 2019

Year Ended December 31, 2018

Nuclear
Operations
Group

Nuclear
Power
Group

Nuclear
Services
Group

Nuclear
Operations
Group

Nuclear
Power
Group

Nuclear
Services
Group

Total

(In thousands)

$1,368,555

51,802

$1,420,357

— $ 111,236

$1,479,791

$1,311,886

38,058

17,907

107,767

4,146

38,058

$ 129,143

$1,587,558

$1,316,032

— $ 107,711

$1,419,597

16,059

11,831

32,036

16,059

$ 119,542

$1,451,633

— $ 287,948

8,230

26,634

2,196

$ 290,144

— $

34,864

161

$ 294,781

2,977

55,071

2,758

$ 297,700

138

58,186

United States:

Government

Non-Government

Canada:

Non-Government

Other:

Non-Government

Segment Revenues

$1,428,587

$ 352,640

$ 131,339

1,912,566

$1,319,170

$ 365,911

$ 122,438

1,807,519

Eliminations

Revenues

(17,646)

$1,894,920

(7,630)

$1,799,889

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

Year Ended December 31, 2019

Year Ended December 31, 2018

Nuclear
Operations
Group

Nuclear
Power
Group

Nuclear
Services
Group

Nuclear
Operations
Group

Nuclear
Power
Group

Nuclear
Services
Group

Total

(In thousands)

Over time

Point-in-time

$1,428,348

$ 305,075

$ 131,339

$1,864,762

$1,318,884

$ 335,430

$ 122,438

$1,776,752

239

47,565

—

47,804

286

30,481

—

30,767

Segment Revenues

$1,428,587

$ 352,640

$ 131,339

1,912,566

$1,319,170

$ 365,911

$ 122,438

1,807,519

Eliminations

Revenues

(17,646)

$1,894,920

(7,630)

$1,799,889

Revenues by contract type were as follows:

Year Ended December 31, 2019

Year Ended December 31, 2018

Nuclear
Operations
Group

Nuclear
Power
Group

Nuclear
Services
Group

Nuclear
Operations
Group

Nuclear
Power
Group

Nuclear
Services
Group

Total

(In thousands)

Fixed-Price Incentive Fee

$1,137,883

2,511

— $1,140,394

$1,041,083

16,165

— $1,057,248

Firm-Fixed-Price

Cost-Plus Fee

Time-and-Materials

Segment Revenues

Eliminations

Revenues

Performance Obligations

210,631

282,014

26,163

79,741

755

102,726

332

67,360

2,450

518,808

183,222

70,142

195,030

252,893

80,880

2,177

96,808

23,294

96,566

2,578

471,217

177,491

101,563

$1,428,587

$ 352,640

$ 131,339

1,912,566

$1,319,170

$ 365,911

$ 122,438

1,807,519

(17,646)

$1,894,920

(7,630)

$1,799,889

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 revenues and/or costs of contracts. During the years ended December 31, 2019 and 2018, we
recognized net favorable changes in estimates that resulted in increases in revenues of $70.9 million and $58.6 million,
respectively, as well as increases (decreases) in cost of operations of $(0.7) million and $12.3 million, respectively. Included in
these 2018 amounts are contract adjustments resulting from rework issues related to the manufacture of non-nuclear
components being produced within our Nuclear Operations Group segment. We recognized a decrease in operating income of
$29.2 million for the year ended December 31, 2018 related to this matter, which resulted in a decrease in earnings per share of
$0.23.

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

Included in Contracts in progress:

Unbilled receivables

Retainages
Included in Other Assets:

Retainages

Advance billings on contracts

December 31,
2019

December 31,

2018

(In thousands)

$
$

365,861
46,670

1,412
75,425

$
$

308,723
57,885

1,674
98,477

Retainages expected to be collected after one year are included in Other Assets. Of the long-term retainages at

December 31, 2019, we anticipate collecting $0.3 million in 2021 and $1.1 million in 2022.

During the years ended December 31, 2019 and 2018, we recognized $62.3 million and $53.6 million of revenue that was

in Advance billings on contracts at December 31, 2018 and January 1, 2018, respectively.

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 remaining performance obligations on our
contracts with customers at December 31, 2019, we expect to recognize revenues as follows:

Nuclear Operations Group
Nuclear Power Group
Nuclear Services Group
Total Remaining Performance Obligations

2020

2021

Thereafter

Total

(In approximate millions)

1,396
217
32
1,645

1,013
174
1
1,188

2,106
339
10
2,455

4,515
730
43
5,288

NOTE 4 – EQUITY METHOD INVESTMENTS

We have investments in entities that we account for using the equity method. Our share of the undistributed earnings of

our equity method investees were $16.1 million and $16.1 million at December 31, 2019 and 2018, respectively.

The following tables summarize combined balance sheet and income statement information for investments accounted

for under the equity method:

Current assets
Noncurrent assets
Total Assets
Current liabilities
Owners' equity
Total Liabilities and Owners' Equity

Revenues
Gross profit
Net income

December 31,

2019

2018

(In thousands)

442,253
1,285
443,538
219,702
223,836
443,538

$
$

449,369
1,621
450,990
234,464
216,526
450,990

$
$

Year Ended December 31,
2018

2017

2019

$
$
$

3,716,548
133,170
130,949

(In thousands)
5,685,015
$
172,673
$
162,095
$

$
$
$

678,080
35,081
35,081

Reimbursable costs recorded in revenues by the unconsolidated joint ventures in our Nuclear Services Group segment

totaled $3,516.1 million, $5,339.7 million and $638.4 million for the years ended December 31, 2019, 2018 and 2017,
respectively. In 2018, we began to properly classify certain of our joint ventures as equity method investments resulting in the
increases in the summarized financial information disclosed above.

Income taxes for the investees are the responsibility of the respective owners. Accordingly, no provision for income taxes

has been recorded by the investees.

Reconciliations of net income per combined income statement information of our investees to equity in income of

investees per our consolidated statements of income are as follows:

Equity income based on stated ownership percentages
Timing of GAAP and other adjustments
Equity in income of investees

Our transactions with unconsolidated affiliates were as follows:

Sales to
Dividends received
Capital contributions, net of returns

Year Ended December 31,
2018

2017

2019

28,272
652
28,924

(In thousands)
30,787
$
(444)
30,343

13,412
200
13,612

Year Ended December 31,
2018

2017

2019

14,668
20,955

(In thousands)
18,454
$
22,237
$
(255) $
9,059

$
$
$

22,259
16,132
2,789

$
$
$

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

$4.3 million, respectively.

NOTE 5 – 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, H.R. 1, the Tax Cuts and Jobs Act (the "Act") was enacted, making significant changes to
existing U.S. tax laws that impact us, including, but not limited to, a reduction to the U.S. corporate income tax rate from 35%
to 21% for tax years beginning after December 31, 2017, the taxation of global intangible low-taxed income ("GILTI") and
additional deduction limitations related to executive compensation. Our Canadian operations continue to be subject to tax at a
local statutory rate of approximately 25%.

We are currently under audit by various state and international authorities. With few exceptions, we do not have any

returns under examination for years prior to 2015.

We apply the provisions of FASB Topic Income Taxes regarding the treatment of uncertain tax positions. A reconciliation

of unrecognized tax benefits (exclusive of interest and federal and state benefits) is as follows:

Balance at beginning of period
Increases based on tax positions taken in the current year
Increases based on tax positions taken in the prior years
Decreases based on tax positions taken in the prior years
Decreases due to settlements with tax authorities
Decreases due to lapse of applicable statute of limitation
Other, net
Balance at end of period

Year Ended December 31,
2018

2017

2019

(In thousands)
1,680
$
—
—
—
—
(1,379)
(27)
274

274
3,736
—
—
—
(127)
16
3,899

1,651
—
—
—
—
—
29
1,680

The unrecognized tax benefits balance of $3.9 million at December 31, 2019 would reduce our effective tax rate if

recognized.

We believe that, within the next 12 months, it is reasonably possible that our previously unrecognized tax benefits could

decrease by $0.1 million.

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

and liabilities. Significant components of deferred tax assets and liabilities as of December 31, 2019 and 2018 were as follows:

December 31,

2019

2018

(In thousands)

36,791
2,365
7,077
2,991
12,121
20,100
1,856
4,702
10,790
7,297
5,848
8,798
120,736
(13,578)
107,158

23,889
10,446
14,134
48,469
58,689

37,528
2,639
6,821
4,352
11,835
24,805
—
8,977
6,046
6,349
1,683
2,998
114,033
(13,257)
100,776

14,348
—
24,358
38,706
62,070

2017

255,194
40,586
295,780

Year Ended December 31,
2018
(In thousands)
231,721
$
48,424
280,145

270,569
43,173
313,742

Deferred tax assets:
Pension liability
Accrued warranty expense
Accrued vacation pay
Accrued liabilities for self-insurance (including postretirement health care benefits)
Accrued liabilities for executive and employee incentive compensation
Environmental and products liabilities
Lease liabilities
Investments in joint ventures and affiliated companies
Long-term contracts
State tax credits and net operating loss carryforward
Foreign tax credit and net operating loss carryforward
Other

Total deferred tax assets
Valuation allowance for deferred tax assets
Deferred tax assets
Deferred tax liabilities:

Property, plant and equipment
Right-of-use lease assets
Intangibles

Total deferred tax liabilities
Net deferred tax assets

The components of Income before Provision for Income Taxes were as follows:

2019

U.S.
Other than U.S.
Income before Provision for Income Taxes

The components of Provision for Income Taxes were as follows:

Current:

U.S. – federal
U.S. – state and local
Other than U.S.
Total current

Deferred:

U.S. – federal
U.S. – state and local
Other than U.S.

Total deferred
Provision for Income Taxes

Year Ended December 31,
2018

2017

2019

(In thousands)

47,693
2,180
15,398
65,271

7,975
872
(5,053)
3,794
69,065

14,680
4,597
16,117
35,394

20,327
1,564
(4,445)
17,446
52,840

26,632
3,023
24,299
53,954

107,844
(158)
(14,225)
93,461
147,415

The following is a reconciliation of our income tax provision from the U.S. statutory federal tax rate to our consolidated

effective tax rate:

U.S. federal statutory tax rate
State and local income taxes
Foreign rate differential
Excess tax deductions on equity compensation
Impact of U.S. Tax Cuts & Jobs Act
Manufacturing deduction
Minority interest
Other
Effective tax rate

Year Ended December 31,
2018

2017

2019

21.0 %
1.0 %
0.6 %
(0.7)%
— %
— %
— %
0.1 %
22.0 %

21.0 %
2.1 %
0.7 %
(1.0)%
(4.7)%
— %
— %
0.8 %
18.9 %

35.0 %
1.2 %
(1.4)%
(2.0)%
17.7 %
(1.4)%
(0.1)%
0.8 %
49.8 %

As a result of the passage of the Act, during the year ended December 31, 2017, we recognized $53.0 million of expense
in our provision for income taxes due primarily to the remeasurement of our U.S. deferred tax assets and liabilities. In the year
ended December 31, 2018, we recognized $13.5 million of benefit in our provision for income taxes related to the
remeasurement of our deferred tax assets as a result of accelerating additional contributions to certain of our domestic pension
plans for inclusion in our 2017 U.S. tax return.

At December 31, 2019, we had a valuation allowance of $13.6 million for deferred tax assets, which we expect cannot be

realized through carrybacks, future reversals of existing taxable temporary differences and our estimate of future taxable
income. We believe that our remaining deferred tax assets are more likely than not realizable through carrybacks, future
reversals of existing taxable temporary differences and our estimate of future taxable income. Any changes to our estimated
valuation allowance could be material to our consolidated financial statements.

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

Year Ended December 31, 2019
Year Ended December 31, 2018
Year Ended December 31, 2017

Beginning
Balance

Charges To
Costs and
Expenses

Charged To
Other
Accounts

Ending
Balance

$
$
$

(13,257)
(15,252)
(17,226)

(In thousands)
(414)
2,017
2,544

93
$
(22) $
(570) $

(13,578)
(13,257)
(15,252)

We have state credits and state net operating losses of $9.2 million ($7.3 million net of federal tax benefit) available to

offset future taxable income in various states. These state net operating loss carryforwards begin to expire in the year 2020. We

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

We would be subject to withholding taxes if we were to distribute earnings from certain foreign subsidiaries. As of
December 31, 2019, the undistributed earnings of these subsidiaries were approximately $168.5 million, and our unrecognized
deferred income tax liabilities of approximately $8.4 million would be payable upon the distribution of these earnings. All of
our foreign earnings are considered indefinitely reinvested.

NOTE 6 – LONG-TERM DEBT

Our Long-Term Debt consists of the following:

Secured Debt:

Senior Notes
Credit Facility

Less: Amounts due within one year

Long-Term Debt, gross

Less: Deferred debt issuance costs

Long-Term Debt

December 31,

2019

2018

(In thousands)

400,000
432,159
14,711
817,448
8,006
809,442

400,000
377,427
14,227
763,200
9,583
753,617

Maturities of Long-Term Debt subsequent to December 31, 2019 are as follows: 2020 – $14.7 million; 2021 – $14.7

million; 2022 – $14.7 million; 2023 – $388.0 million; 2024 – $0.0 million; and thereafter – $400.0 million.

Credit Facility

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

As of December 31, 2019, borrowings outstanding totaled $272.2 million and $160.0 million under our term loans and

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

If any default occurs under the Credit Facility, or if we are unable to make any of the representations and warranties in the

Credit Facility, we will be unable to borrow funds or have letters of credit issued under the Credit Facility.

Senior Notes

We issued $400.0 million aggregate principal amount of 5.375% senior notes due 2026 (the "Senior Notes") pursuant to

Interest on the Senior Notes is payable semi-annually in cash in arrears on January 15 and July 15 of each year, which

commenced on July 15, 2018, at a rate of 5.375% per annum. The Senior Notes will mature on July 15, 2026.

On and after July 15, 2021, the Company may redeem the Senior Notes, in whole or in part, at a redemption price equal to

The Indenture contains customary events of default, including, among other things, payment default, failure to comply

Other Arrangements

We have posted surety bonds to support regulatory and contractual obligations for certain decommissioning

NOTE 7 – PENSION PLANS AND POSTRETIREMENT BENEFITS

We have historically provided defined benefit retirement benefits, primarily through noncontributory pension plans, for
most of our regular employees. Certain of our subsidiaries have made other benefits available to certain groups of employees,
including postretirement health care and life insurance benefits. For salaried employees, all major U.S. and Canadian defined
benefit retirement plans have been closed to new entrants, and benefit accruals have ceased. For hourly employees, certain
defined benefit retirement plans have been closed to new entrants.

Our funding policy is to fund the plans as recommended by the respective plan actuaries and in accordance with the

Employee Retirement Income Security Act of 1974, as amended, or other applicable law. Assuming we continue as a
government contractor, our contractual arrangements with the U.S. Government provide for the recovery of contributions to our
pension and other postretirement benefit plans covering employees working primarily in our Nuclear Operations Group
segment.

Obligations and Funded Status

Change in benefit obligation:

Benefit obligation at beginning of period
Service cost
Interest cost
Plan participants' contributions
Amendments
Acquisition
Settlements
Actuarial loss (gain)
Transfers
Foreign currency exchange rate changes
Benefits paid
Benefit obligation at end of period

Change in plan assets:

Fair value of plan assets at beginning of period
Actual return on plan assets
Plan participants' contributions
Company contributions
Settlements
Transfers
Foreign currency exchange rate changes
Benefits paid
Fair value of plan assets at the end of period
Funded status

Amounts recognized in the balance sheet consist of:

Prepaid postretirement benefit obligation
Prepaid pension
Accrued employee benefits
Accumulated postretirement benefit obligation
Pension liability
Accrued benefit liability, net

Amount recognized in accumulated comprehensive

income (before taxes):
Prior service cost (credit)
Supplemental information:
Plans with accumulated benefit obligation in excess of

plan assets:
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets

Plans with plan assets in excess of accumulated benefit

obligation:
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets

Pension Benefits
Year Ended December 31,

Other Benefits
Year Ended December 31,

2019

2018

2019

2018

(In thousands)

1,186,186
9,123
46,307
321
5,523
—
(25,694)
139,909
—
6,027
(58,904)
1,308,798

1,024,091
195,846
321
4,284
(21,191)
—
6,048
(58,904)
1,150,495
(158,303) $

1,543,343
9,593
47,496
60
10,734
9,746
(242,513)
(107,669)
1,167
(12,010)
(73,761)
1,186,186

1,257,699
(53,299)
177
157,573
(252,908)
1,134
(12,524)
(73,761)
1,024,091
(162,095) $

— $

16,936
(3,218)
—
(172,021)
(158,303) $

14,145
(3,191)
—
(173,049)
(162,095) $

60,405
545
2,254
550
—
—
—
(2,427)
—
462
(2,908)
58,881

43,945
5,688
550
915
—
—
—
(2,777)
48,321
(10,560) $

14,012
—
(1,313)
(23,259)
—
(10,560) $

68,239
620
2,121
584
—
—
—
(7,336)
—
(870)
(2,953)
60,405

45,602
(772)
584
1,379
—
—
—
(2,848)
43,945
(16,460)

4,000
—
(1,240)
(19,220)
—
(16,460)

22,356

19,736

(1,252) $

(1,563)

1,167,257
1,153,811
992,018

141,541
141,497
158,477

$
$
$

1,058,828
1,048,252
882,588

127,358
127,378
141,503

$
$

N/A
22,316

$
— $

N/A
36,565
48,321

$
$

N/A
18,429
—

N/A
41,976
43,945

$
$
$

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

statements of income. For the years ended December 31, 2019, 2018 and 2017, these amounts were $9.7 million, $10.2 million
and $8.6 million, respectively. All other components of net periodic benefit cost are included in Other – net on our consolidated
statements of income. For the years ended December 31, 2019, 2018 and 2017, these amounts were $(17.5) million, $0.7
million and $(16.6) million, respectively. Components of net periodic benefit cost included in net income are as follows:

Components of net periodic benefit

cost:
Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
Recognized net actuarial loss

(gain)

Net periodic benefit cost (income)

Pension Benefits
Year Ended December 31,

Other Benefits
Year Ended December 31,

2019

2018

2017

2019

2018

2017

(In thousands)

9,123
46,307
(69,809)
2,903

9,593
47,496
(80,939)
2,221

8,031
54,353
(83,617)
2,074

545
2,254
(2,514)
(311)

620
2,121
(2,540)
(311)

567
2,182
(2,383)
(314)

9,353
(2,123) $

36,738
15,109

8,322
(10,837) $

(5,723)
(5,749) $

(4,094)
(4,204) $

2,741
2,793

Net periodic benefit cost related to our pension plans is calculated in accordance with GAAP. In addition, we calculate

pension costs in accordance with U.S. cost accounting standards ("CAS") for purposes of cost recovery on our U.S.
Government contracts to the extent applicable. See further discussion of CAS pension costs in our discussion of Critical
Accounting Policies and Estimates included in Item 7 of this Annual Report on Form 10-K.

Recognized net actuarial losses (gains) consist primarily of our reported actuarial losses (gains), settlements, and the

differences between the actual returns on plan assets and the expected returns on plan assets. In July 2018, we completed the
purchase of a group annuity contract that transferred certain domestic pension benefit obligations of approximately
$240 million to an insurance company for approximately 1,300 retirees. As a result, we recognized pension settlement-related
charges of $10.4 million during 2018. In October 2017, we completed the purchase of a group annuity contract that transferred
certain domestic pension benefit obligations totaling $113.6 million to an insurance company for approximately 2,300 retirees.
As a result, we recognized pension settlement-related charges of $3.8 million during 2017.

We made contributions to our pension and postretirement benefit plans totaling $159.0 million during the year ended
December 31, 2018. In August 2018, we accelerated $118.1 million of pension contributions to certain domestic pension plans
in order to capture a tax benefit in our 2017 U.S. tax return due to the change in corporate tax rates.

Additional Information

Pension Benefits
Year Ended December 31,

2019

2018

Other Benefits
Year Ended December 31,

2019

2018

(In thousands)

Decrease in accumulated other comprehensive income

due to actuarial losses – before taxes

(5,523) $

(10,734) $

— $

—

In the current fiscal year, we have recognized expense (income) in other comprehensive income as a component of net

periodic benefit cost of approximately $2.9 million and $(0.3) million for our pension benefits and other benefits, respectively.
In the next fiscal year, we expect to recognize expense (income) in other comprehensive income as a component of net periodic
benefit cost of approximately $4.1 million and $(0.2) million for our pension benefits and other benefits, respectively.

Assumptions

Weighted-average assumptions used to determine net

periodic benefit obligations at December 31:
Discount rate

3.31%

4.30%

3.21%

4.25%

Pension Benefits

Other Benefits

2019

2018

2019

2018

Pension Benefits

Other Benefits

2019

2018

2017

2019

2018

2017

Weighted-average assumptions

used to determine net periodic
benefit cost for the years ended
December 31:

Discount rate to determine service

cost

Discount rate to determine interest

cost

Expected return on plan assets

3.74%

3.32%

3.84%

3.93%

3.91%

4.29%

3.98%
6.95%

3.56%
6.95%

3.17%
7.00%

3.92%
5.68%

3.50%
5.70%

3.71%
5.71%

The expected return on plan assets rate assumptions are based on the long-term expected returns for the investment mix
of assets in the portfolio. In setting these rates, we use a building-block approach. Historical real return trends for the various
asset classes in the plan's portfolio are combined with anticipated future market conditions to estimate the real rate of return for
each asset class. These rates are then adjusted for anticipated future inflation to estimate nominal rates of return for each class.
The expected rate of return on plan assets is then determined to be the weighted-average nominal return based on the
weightings of the classes within the total asset portfolio. We are using an expected return on plan assets assumption of 7.2% for
the majority of our existing pension plan assets (approximately 86% of our total pension assets at December 31, 2019).

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

provide health benefits to certain salaried and hourly employees, as well as retired employees, of NFS. All of the assets for
these postretirement benefit plans are contributed into a Voluntary Employees' Beneficiary Association trust.

Assumed health care cost trend rates at December 31:
Health care cost trend rate assumed for next year
Rates to which the cost trend rate is assumed to decline (ultimate trend rate)
Year that the rate reaches ultimate trend rate

2019

2018

7.00%
4.50%
2030

7.25%
4.50%
2030

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

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

Effect on total of service and interest cost
Effect on postretirement benefit obligation

Investment Goals

General

One-Percentage-
Point Increase

One-Percentage-
Point Decrease

(In thousands)
300
5,470

$
$

(247)
(4,624)

$
$

The overall investment strategy of the pension trusts is to achieve long-term growth of principal, while avoiding
excessive risk and to minimize the probability of loss of principal over the long term. The specific investment goals that have
been set for the pension trusts, in the aggregate, are (1) to ensure that plan liabilities are met when due and (2) to achieve an
investment return on trust assets consistent with a reasonable level of risk.

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

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

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

The investment performance of total portfolios, as well as asset class components, is periodically measured against
commonly accepted benchmarks, including the individual investment manager benchmarks. In evaluating investment manager
performance, consideration is also given to personnel, strategy, research capabilities, organizational and business matters,
adherence to discipline and other qualitative factors that may impact the ability to achieve desired investment results.

Domestic Plans

We sponsor the following domestic defined benefit plans:

• BWXT Retirement Plan;

• Nuclear Fuel Services, Inc. Retirement Plan for Salaried Employees; and

• Nuclear Fuel Services, Inc. Retirement Plan for Hourly Employees.

The assets of the domestic pension plans are commingled for investment purposes and held by the trustee in the BWXT
Master Trust (the "Master Trust"). For the years ended December 31, 2019 and 2018, the investment returns on domestic plan
assets of the Master Trust (net of deductions for management fees) were approximately 21% and (4)%, respectively.

The following is a summary of the asset allocations for the Master Trust at December 31, 2019 and 2018 by asset

category:

Asset Category:

Fixed Income (excluding U.S. Government Securities)
Commingled and Mutual Funds
U.S. Government Securities
Partnerships with Security Holdings
Real Estate
Other

Total

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

Asset Class:

Fixed Income
Equities
Other

December 31,

2019

2018

33%
27%
22%
5%
7%
6%
100%

33%
27%
24%
7%
7%
2%
100%

55%
28%
17%

Foreign Plans

We sponsor various plans through certain of our Canadian subsidiaries.

The combined weighted-average asset allocations of these plans at December 31, 2019 and 2018 by asset category were

as follows:

Asset Category:
Fixed Income
Equity Securities and Commingled Mutual Funds
Other

Total

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

Asset Class:

Fixed Income
Global Equity
U.S. Equity

Fair Value

December 31,

2019

2018

62%
35%
3%
100%

46%
51%
3%
100%

65%
19%
16%

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

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

Pension and Other Benefits:

Fixed Income
Commingled and Mutual Funds
U.S. Government Securities
Partnerships with Security Holdings
Real Estate
Other
Cash and Accrued Items

Total Assets

12/31/2019

Level 1

Level 2

Level 3

Unclassified

(In thousands)

453,390
334,786
220,606
52,840
65,821
47,550
23,823
1,198,816

— $

58,161
216,300
—
—
—
17,180
291,641

355,064
—
4,306
—
—
—
6,643
366,013

— $
—
—
—
—
—
—
— $

98,326
276,625
—
52,840
65,821
47,550
—
541,162

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

Pension and Other Benefits:

Fixed Income
Commingled and Mutual Funds
U.S. Government Securities
Partnerships with Security Holdings
Real Estate
Cash and Accrued Items

Total Assets

12/31/2018

Level 1

Level 2
(In thousands)

Level 3

Unclassified

380,925
320,210
218,074
62,309
61,219
25,299
1,068,036

— $

47,975
214,427
—
—
21,542
283,944

315,691
—
3,647
—
—
3,757
323,095

— $
—
—
—
—
—
— $

65,234
272,235
—
62,309
61,219
—
460,997

In accordance with FASB Topic Fair Value Measurements, certain investments that were measured at net asset value per

share (or its equivalent) ("NAV") have not been classified in the fair value hierarchy. These investments are measured on the
fair value of the underlying investments but may not be redeemable at that fair value. When appropriate, we adjust these net

asset values for contributions and distributions, if any, made during the period beginning on the latest NAV valuation date and
ending on our measurement date. We also consider available market data, relevant index returns, preliminary estimates from
our investees and other data obtained through research and consultation with third-party advisors in determining the fair value
of these investments.

Cash Flows

Expected employer contributions to trusts of defined

benefit plans:
2020

Expected benefit payments:

2020
2021
2022
2023
2024
2025-2029

Domestic Plans

Foreign Plans

Pension
Benefits

Other
Benefits

Pension
Benefits

Other
Benefits

(In thousands)

$
$
$
$
$
$

— $

57,550
59,995
62,010
63,804
65,194
335,013

$
$
$
$
$
$

2,822
2,890
2,950
2,965
3,003
14,062

$
$
$
$
$
$

3,608

N/A

6,820
6,933
7,165
7,310
7,413
41,293

$
$
$
$
$
$

447
493
499
528
536
3,171

Defined Contribution Plans

We also provide benefits under the BWXT Thrift Plan (the "Thrift Plan"). The Thrift Plan generally provides for
matching employer contributions of 50% of the first 6% of compensation, as defined in the Thrift Plan, contributed by
participants, and fully vest and are nonforfeitable after three years of service or upon retirement, death, lay-off or approved
disability. These matching employer contributions are made in cash and invested at the employees' discretion. We also provide
service-based cash contributions under the Thrift Plan to employees not accruing benefits under our defined benefit plans. Our
Canadian Plans also include a defined contribution component whereby we make cash, service-based contributions. Amounts
charged to expense for employer contributions under our defined contribution plans totaled approximately $31.7 million, $31.3
million and $29.1 million in the years ended December 31, 2019, 2018 and 2017, respectively.

NOTE 8 – CAPITAL STOCK

In October 2015, our Board of Directors authorized us to repurchase an indeterminate number of shares of our common

stock of up to an aggregate market value of $300 million; this authorization expired on February 26, 2018. On February 24,
2017, our Board of Directors authorized an additional share repurchase of up to an aggregate market value of $150 million; this
authorization became fully utilized in November 2018. On November 6, 2018, our Board of Directors authorized an additional
share repurchase of up to an aggregate market value of $250 million during a three-year period from November 6, 2018 to
November 6, 2021.

On September 15, 2016, we entered into a $200 million accelerated share repurchase agreement (the "ASR Agreement")
with Wells Fargo Bank, National Association ("Wells Fargo"). Pursuant to the terms of the ASR Agreement, on September 16,
2016, we paid Wells Fargo $200 million in cash and received 4,135,435 shares of BWXT common stock. On March 24, 2017,
the final settlement of the ASR Agreement was completed, and we received an additional 846,568 shares of BWXT common
stock. The total number of shares repurchased under the ASR Agreement was 4,982,003 shares at an average price of $40.14
per share based on the volume-weighted average stock price of BWXT common stock traded during the term of the ASR
Agreement, less a customary discount.

We immediately reduced the outstanding shares used to calculate the weighted-average common shares outstanding for

basic and diluted earnings per share as of the dates the initial and final repurchases of shares were physically delivered. The
ASR Agreement was accounted for as a treasury stock transaction and forward stock purchase contract. The shares were
recorded in treasury stock on our consolidated balance sheets. The forward stock purchase contract was indexed to BWXT's
own stock and classified as an equity instrument.

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

ended December 31, 2018, we repurchased 4,523,934 shares of our common stock for approximately $214.7 million. In the
year ended December 31, 2017, we received 846,568 shares under the final settlement of the ASR Agreement and made no
other share repurchases. As of December 31, 2019, we had approximately $165.3 million available to us for share repurchase
under the $250 million authorization described above.

NOTE 9 – STOCK-BASED COMPENSATION

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

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

2010 Long-Term Incentive Plan of BWX Technologies, Inc. (the "Plan"). The Compensation Committee of the Board of
Directors selects the participants for the Plan. The Plan provides for a number of forms of stock-based compensation, including
incentive and non-qualified stock options, restricted stock, restricted stock units, performance shares and performance units,
subject to satisfaction of specific performance goals. Shares subject to awards under the Plan that are cancelled, forfeited,
terminated or expire unexercised, shall immediately become available for the granting of awards under the Plan. As part of the
approval of the Plan, 10,000,000 shares of common stock were initially authorized for issuance through the Plan, with an
additional 2,300,000 authorized for issuance in 2014. Options to purchase shares are granted at not less than 100% of the fair
market value closing price on the date of grant, become exercisable at such time or times as determined when granted and
expire not more than ten years after the date of grant.

At December 31, 2019, we had awarded 9,109,541 shares under the Plan and had a total of 3,190,459 shares of our
common stock available for future awards. In the event of a change in control of the Company, the terms of the awards under
the Plan contain provisions that may cause restrictions to lapse and accelerate the vesting of awards.

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

In June 2012, we established the 2012 Long-Term Incentive Plan of BWXT Technical Services Group, Inc., a cash-settled
plan for employees of certain subsidiaries and unconsolidated affiliates as selected by the plan committee. The cash-settled plan
provides for a number of forms of stock-based compensation, including stock appreciation rights, restricted stock units and
performance units, subject to satisfaction of specific performance goals. Stock appreciation rights are granted at not less than
100% of the fair market value closing price of a share of BWXT common stock on the date of grant, become exercisable at
such time or times as determined when granted and expire not more than ten years after the date of grant. Stock appreciation
rights are cash settled for the excess of the market price of BWXT common stock on the exercise date minus the exercise price.
Restricted stock units and performance units are cash settled upon vesting as determined when granted. We will not issue any
shares of BWXT common stock under this plan, as all awards are cash settled.

In the event of a change in control of the Company, the terms of the awards under the cash-settled plan contain provisions

that may cause restrictions to lapse and accelerate the vesting of awards.

Stock-based compensation expense for all of our plans recognized for the years ended December 31, 2019, 2018 and
2017 totaled $14.8 million, $10.8 million and $18.5 million, respectively, with associated tax benefit totaling $2.5 million, $1.7
million and $3.7 million, respectively. Included in stock-based compensation expense for the year ended December 31, 2017 is
$2.5 million associated with an executive reorganization that resulted in the acceleration of previously granted equity awards.

As of December 31, 2019, unrecognized estimated compensation expense related to nonvested awards was $13.3 million,

which is expected to be recognized over a weighted-average period of 1.7 years.

Stock Options

The following table summarizes activity for our stock options for the year ended December 31, 2019 (share data in

thousands):

Number
of
Shares

Weighted-
Average
Exercise
Price

Weighted-
Average
Remaining
Contractual
Term

Aggregate
Intrinsic
Value
(In millions)

Outstanding at beginning of period
Granted
Exercised
Cancelled/expired/forfeited
Outstanding at end of period
Exercisable at end of period

571
—
(246) $
(1) $
$
$

324
324

23.44
N/A
22.85
20.31
23.91
23.91

3.1 Years $
3.1 Years $

12.4
12.4

The aggregate intrinsic value included in the table above represents the total pre-tax intrinsic value that would have been

received by the option holders had all option holders exercised their options on December 31, 2019. The intrinsic value is
calculated as the total number of option shares multiplied by the difference between the closing price of our common stock on
the last trading day of the period and the exercise price of the options. This amount changes based on the price of our common
stock.

During the years ended December 31, 2019, 2018 and 2017, the total intrinsic value of stock options exercised was $8.1

million, $8.5 million and $22.6 million, respectively. The actual tax benefits realized related to the stock options exercised
during the year ended December 31, 2019 totaled $1.1 million.

Performance Shares

Nonvested performance shares as of December 31, 2019 and changes during the year ended December 31, 2019 were as

follows (share data in thousands):

Nonvested at beginning of period
Adjustment to assumed vesting percentage
Granted
Vested
Cancelled/forfeited
Nonvested at end of period

Number
of
Shares

Weighted-
Average
Grant Date
Fair Value

$
639
$
13
140
$
(368) $
(15) $
$
409

43.06
48.52
51.78
34.64
53.97
53.39

The actual number of shares in which each participant vests is dependent upon achievement of certain return on invested
capital and diluted earnings per share targets over a three-year performance period. The number of shares in which participants
can vest ranges from zero to 200% of the initial performance shares granted, to be determined upon completion of the three-
year performance period. The nonvested shares at the end of the period in the table above assumes weighted-average vesting of
114%.

The actual tax benefits realized related to the performance shares vested during the year ended December 31, 2019

totaled $3.3 million.

Restricted Stock Units

Nonvested restricted stock units as of December 31, 2019 and changes during the year ended December 31, 2019 were as

follows (share data in thousands):

Nonvested at beginning of period
Granted
Vested
Cancelled/forfeited
Nonvested at end of period

Number
of
Shares

Weighted-
Average
Grant Date
Fair Value

$
160
123
$
(110) $
(7) $
$

166

51.85
51.36
46.96
55.22
54.51

The actual tax benefits realized related to the restricted stock units vested during the year ended December 31, 2019

totaled $0.8 million.

Cash-Settled Stock Appreciation Rights

The following table summarizes activity for our stock appreciation rights for the year ended December 31, 2019 (unit data

in thousands):

Number
of
Units

Weighted-
Average
Exercise
Price

Weighted-
Average
Remaining
Contractual
Term

Aggregate
Intrinsic
Value
(In millions)

Outstanding at beginning of period
Granted
Exercised
Cancelled/expired/forfeited
Outstanding at end of period
Exercisable at end of period

64
—
(9) $
—
55
55

$
$

22.92
N/A
20.00
N/A
23.39
23.39

3.0 Years $
3.0 Years $

2.1
2.1

The aggregate intrinsic value included in the table above represents the total pre-tax intrinsic value that would have been

received by the stock appreciation rights holders had all holders exercised their rights on December 31, 2019. The intrinsic
value is calculated as the total number of stock appreciation rights multiplied by the difference between the closing price of our
common stock on the last trading day of the period and the exercise price of the stock appreciation rights. This amount changes
based on the price of our common stock.

Cash-Settled Performance Units

The actual number of units in which each participant vests is dependent upon achievement of certain return on invested
capital and diluted earnings per share targets over a three-year performance period. The number of units in which participants
can vest ranges from zero to 200% of the initial performance units granted, to be determined upon completion of the three-year
performance period.

As of December 31, 2019, we had 5,207 nonvested units valued at $62.08 per share with an assumed weighted-average

vesting of 124%. The fair value is based on our closing stock price as of December 31, 2019 and is re-determined at the end of
each reporting period for purposes of remeasuring compensation expense associated with these cash-settled awards.

Cash-Settled Restricted Stock Units

As of December 31, 2019, we had 1,193 nonvested units valued at $62.08 per share. The fair value is based on our

closing stock price as of December 31, 2019 and is re-determined at the end of each reporting period for purposes of
remeasuring compensation expense associated with these cash-settled awards.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Investigations and Litigation

Due to the nature of our business, we are, from time to time, involved in investigations, litigation, disputes or claims

related to our business activities, including, among other things:

• performance- or warranty-related matters under our customer and supplier contracts and other business arrangements;

and

• workers' compensation, employment, premises liability and other claims.

Based upon our prior experience, we do not expect that any of these litigation proceedings, disputes and claims will have

a material adverse effect on our consolidated financial condition, results of operations or cash flows.

Environmental Matters

We have been identified as a potentially responsible party at various cleanup sites under the Comprehensive

Environmental Response, Compensation, and Liability Act, as amended ("CERCLA") and other environmental laws. These
laws can impose liability for the entire cost of cleanup on any of the potentially responsible parties, regardless of fault or the
lawfulness of the original conduct. Generally, however, where there are multiple responsible parties, a final allocation of costs
is made based on the amount and type of wastes disposed of by each party and the number of financially viable parties,
although this may not be the case with respect to any particular site. We have not been determined to be a major contributor of
wastes to any of these sites. On the basis of our relative contribution of waste to each site, we expect our share of the ultimate
liability for the various sites will not have a material adverse effect on our consolidated financial condition, results of
operations or cash flows in any given year.

We perform significant amounts of work for the U.S. Government under both prime contracts and subcontracts and
operate certain facilities that are licensed to possess and process special nuclear materials. As a result of these activities, we are
subject to continuing reviews by governmental agencies, including the U.S. Environmental Protection Agency and the NRC.
We are also involved in manufacturing activities at licensed facilities in Canada that are also subject to continuing reviews by
governmental agencies in Canada, including the CNSC.

The NRC's decommissioning regulations require our Nuclear Operations Group segment to provide financial assurance
that it will be able to pay the expected cost of decommissioning its two licensed facilities at the end of their service lives. We
provided financial assurance totaling $61.8 million and $56.2 million during the years ended December 31, 2019 and 2018
respectively, with surety bonds for the ultimate decommissioning of these licensed facilities. These facilities have provisions in
their government contracts pursuant to which substantially all of our decommissioning costs and financial assurance obligations
are covered by the DOE, including the costs to complete the decommissioning projects underway at the facility in Erwin,
Tennessee. These surety bonds are to cover decommissioning required pursuant to work not subject to this DOE obligation.

In Canada, the CNSC's decommissioning regulations require our Nuclear Power Group segment to provide financial

Our compliance with federal, foreign, state and local environmental control and protection regulations resulted in pre-tax

charges of approximately $15.9 million, $14.7 million and $14.1 million in the years ended December 31, 2019, 2018 and
2017, respectively. In addition, compliance with existing environmental regulations necessitated capital expenditures of $1.4
million, $1.7 million and $0.9 million in the years ended December 31, 2019, 2018 and 2017, respectively. At December 31,
2019 and 2018, we had total environmental accruals (including asset retirement obligations) of $90.8 million and $104.9
million, respectively. Of our total environmental accruals at December 31, 2019 and 2018, $10.4 million and $18.5 million,
respectively, were included in current liabilities. Inherent in the estimates of these accruals are our expectations regarding the
levels of contamination, decommissioning costs and recoverability from other parties, which may vary significantly as
decommissioning activities progress. Accordingly, changes in estimates could result in material adjustments to our operating
results, and the ultimate loss may differ materially from the amounts that we have provided for in our consolidated financial
statements.

NOTE 11 – RISKS AND UNCERTAINTIES

Revenue Recognized Over Time

As of December 31, 2019, in accordance with the method of recognizing revenue over time, we have provided for our

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. The risk on fixed-price contracts is that revenue
from the customer does not 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.
Increases in costs on our fixed-price contracts could have a material adverse impact on our consolidated financial condition,
results of operations and cash flows. Alternatively, reductions in overall contract costs at completion could materially improve
our consolidated financial condition, results of operations and cash flows.

Insurance

Upon the February 22, 2006 effectiveness of the settlement relating to the Chapter 11 proceedings involving several of
our former subsidiaries, most of our subsidiaries contributed substantial insurance rights to the asbestos personal injury trust,
including rights to (1) certain pre-1979 primary and excess insurance coverages and (2) certain of our 1979-1986 excess
insurance coverage. These insurance rights provided coverage for, among other things, asbestos and other personal injury
claims, subject to the terms and conditions of the policies. The contribution of these insurance rights was made in exchange for
the agreement on the part of the representatives of the asbestos claimants, including the representative of future claimants, to
the entry of a permanent injunction, pursuant to Section 524(g) of the U.S. Bankruptcy Code, to channel to the asbestos trust all
asbestos-related general liability claims against our subsidiaries and former subsidiaries arising out of, resulting from or
attributable to their operations, and the implementation of related releases and indemnification provisions protecting those
subsidiaries and their affiliates from future liability for such claims. Although we are not aware of any significant, unresolved
claims against our subsidiaries and former subsidiaries that are not subject to the channeling injunction and that relate to the
periods during which such excess insurance coverage related, with the contribution of these insurance rights to the asbestos
personal injury trust, it is possible that we could have underinsured or uninsured exposure for non-derivative asbestos claims or
other personal injury or other claims that would have been insured under these coverages had the insurance rights not been
contributed to the asbestos personal injury trust. In conjunction with the spin-off, claims and liabilities associated with the
asbestos personal injury, property damage and indirect property damage claims mentioned above have been expressly assumed
by BWE pursuant to the master separation agreement between us and BWE.

NOTE 12 – FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT RISK

The primary customer of our Nuclear Operations Group and Nuclear Services Group segments is the U.S. Government,

including some of its contractors. Our Nuclear Power Group segment's major customers are large utilities. These concentrations
of customers may impact our overall exposure to credit risk, either positively or negatively, in that our customers may be
similarly affected by changes in economic or other conditions. In the years ended December 31, 2019, 2018 and 2017, U.S.
Government contracts accounted for approximately 77%, 79% and 81% of our total consolidated revenues, respectively.
Accounts receivable due directly or indirectly from the U.S. Government represented 67% and 63% of net receivables at
December 31, 2019 and 2018, respectively. See Note 15 for additional information about our operations in different geographic
areas.

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

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

NOTE 13 – INVESTMENTS

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

Equity securities

Equities
Mutual funds

Available-for-sale securities

U.S. Government and agency securities
Corporate bonds
Asset-backed securities and collateralized mortgage

obligations

Total

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair
Value

(In thousands)

417
4,988

1,755
697

2,039
3,103

5
380

— $
—

—
—

2,172
5,685

2,044
3,483

132
10,679

—
2,837

(53)
(53) $

79
13,463

The following is a summary of our investments at December 31, 2018:

Equity securities

Equities
Mutual funds

Available-for-sale securities

U.S. Government and agency securities
Corporate bonds
Asset-backed securities and collateralized mortgage

obligations

Total

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair
Value

(In thousands)

908
4,699

255
—

2,216
2,850

11
—

— $
(5)

—
(47)

1,163
4,694

2,227
2,803

144
10,817

—
266

(52)
(104) $

92
10,979

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

Year Ended December 31, 2019
Year Ended December 31, 2018
Year Ended December 31, 2017

Proceeds

Gross
Realized
Gains

(In thousands)

Gross
Realized
Losses

$
$
$

— $
— $
$

148

— $
— $
$

108

—
—
—

NOTE 14 – FAIR VALUE MEASUREMENTS

FASB Topic Fair Value Measurements and Disclosures defines fair value as the price that would be received to sell an

asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.
This topic also sets forth the disclosure requirements regarding fair value and establishes a hierarchy for valuation inputs that
emphasizes the use of observable inputs when measuring fair value. A financial instrument's categorization within the fair value
hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy
established by this topic is as follows:

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

• Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for similar or

identical instruments in inactive markets and model-based valuation techniques for which all significant assumptions
are observable in the market or can be corroborated by observable market data for substantially the full term of the
assets and liabilities.

• Level 3 – inputs are generally unobservable and typically reflect management's estimates of assumptions that market
participants would use in pricing the asset or liability. The fair values are therefore determined using model-based
techniques that include option pricing models, discounted cash flow models and similar valuation techniques.

The following sections describe the valuation methodologies we use to measure the fair values of our investments,

derivatives and nonrecurring fair value measurements.

Investments

Investments primarily include U.S. Government and agency securities, corporate bonds and equities and mutual funds.

In general, and where applicable, we principally use a composite of observable prices and quoted prices in active markets

for identical assets or liabilities to determine fair value. This pricing methodology applies to our Level 1 and Level 2
investments.

Fair Value Measurements

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

12/31/2019

Level 1

Level 2

Level 3

(In thousands)

Equity securities

Equities
Mutual funds

Available-for-sale securities

U.S. Government and agency securities
Corporate bonds
Asset-backed securities and collateralized mortgage

obligations

Total

2,172
5,685

— $
—

2,172
5,685

2,044
3,483

2,044
1,855

—
1,628

79
13,463

—
3,899

79
9,564

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

Equity securities

Equities
Mutual funds

Available-for-sale securities

U.S. Government and agency securities
Corporate bonds
Asset-backed securities and collateralized mortgage

obligations

Total

Derivatives

12/31/2018

Level 1

Level 2

Level 3

(In thousands)

1,163
4,694

— $
—

1,163
4,694

2,227
2,803

2,227
1,433

—
1,370

92
10,979

—
3,660

92
7,319

—
—

Level 2 derivative assets and liabilities currently consist of FX forward contracts. Where applicable, the value of these

derivative assets and liabilities is computed by discounting the projected future cash flow amounts to present value using
market-based observable inputs, including FX forward and spot rates, interest rates and counterparty performance risk
adjustments. At December 31, 2019 and 2018, we had forward contracts outstanding to purchase or sell foreign currencies,
primarily Canadian dollars and Euros, with a total fair value of $(0.8) million and $0.7 million, respectively.

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 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 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 December 31, 2019 and 2018, the fair value of our Senior Notes was $423.5 million and
$384.9 million, respectively. The fair value of our remaining debt instruments approximated their carrying values at
December 31, 2019 and 2018.

NOTE 15 – SEGMENT REPORTING

As described in Note 1, our operations are assessed based on three reportable segments. The operations of our segments
are managed separately, and each segment has unique technology, services and customer classes. We account for intersegment
sales at prices that we generally establish by reference to similar transactions with unaffiliated customers. Reportable segments
are measured based on operating income exclusive of general corporate expenses and gains (losses) on sales of corporate
assets.

1. Information about Operations in our Different Industry Segments:

REVENUES (1):

Nuclear Operations Group
Nuclear Power Group
Nuclear Services Group
Eliminations

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

Nuclear Operations Group Transfers
Nuclear Power Group Transfers
Nuclear Services Group Transfers

OPERATING INCOME:

Nuclear Operations Group
Nuclear Power Group
Nuclear Services Group
Other

Unallocated Corporate (1)

Total Operating Income (2)

Other Income (Expense)
Income before Provision for Income Taxes

Year Ended December 31,
2018

2017

2019

(In thousands)

1,428,587
352,640
131,339
(17,646)
1,894,920

1,319,170
365,911
122,438
(7,630)
1,799,889

1,271,861
285,831
137,249
(7,203)
1,687,738

(4,382) $
(208)
(13,056)
(17,646) $

(4,004) $
(308)
(3,318)
(7,630) $

(1,322)
(246)
(5,635)
(7,203)

298,328
53,815
14,226
(23,099)
343,270
(17,749)
325,521
(11,779)
313,742

271,405
52,270
20,374
(18,074)
325,975
(20,998)
304,977
(24,832)
280,145

267,930
36,548
22,083
(10,688)
315,873
(23,650)
292,223
3,557
295,780

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

(2) The following amounts are included in Operating Income:

Losses (Gains) on Asset Disposals and Impairments, Net:

Nuclear Operations Group
Nuclear Power Group
Nuclear Services Group
Other
Unallocated Corporate

Equity in Income of Investees:
Nuclear Operations Group
Nuclear Power Group
Nuclear Services Group
Other

(6) $

— $

103
2,727
—
—
2,824

— $
—
28,924
—
28,924

(179)
—
467
(224)
64

— $
—
30,343
—
30,343

(65)
(129)
—
—
—
(194)

—
—
13,612
—
13,612

CAPITAL EXPENDITURES:
Nuclear Operations Group
Nuclear Power Group
Nuclear Services Group
Other

Segment Capital Expenditures

Corporate Capital Expenditures
Total Capital Expenditures

DEPRECIATION AND AMORTIZATION:

Nuclear Operations Group
Nuclear Power Group
Nuclear Services Group
Other

Segment Depreciation and Amortization

Corporate Depreciation and Amortization
Total Depreciation and Amortization

SEGMENT ASSETS:

Nuclear Operations Group
Nuclear Power Group
Nuclear Services Group
Other

Segment Assets

Corporate Assets
Total Assets

INVESTMENT IN UNCONSOLIDATED AFFILIATES:

Nuclear Operations Group
Nuclear Power Group
Nuclear Services Group
Other

Total Investment in Unconsolidated Affiliates

2019

Year Ended December 31,
2018
(In thousands)

2017

133,279
38,053
1,169
2,597
175,098
7,026
182,124

33,231
17,054
3,246
787
54,318
7,404
61,722

93,360
4,710
974
2,780
101,824
7,514
109,338

32,132
17,154
3,401
—
52,687
7,410
60,097

86,323
3,856
1,514
628
92,321
4,559
96,880

31,289
13,751
3,702
—
48,742
7,815
56,557

December 31,

2019

2018

2017

(In thousands)

986,827
580,413
177,952
3,751
1,748,943
159,970
1,908,913

878,758
482,763
180,441
5,557
1,547,519
107,577
1,655,096

947,055
313,959
161,948
2,511
1,425,473
286,866
1,712,339

— $
—
70,116
—
70,116

— $
—
63,746
—
63,746

—
—
43,266
—
43,266

2. Information about our Product and Service Lines:

REVENUES:

Nuclear Operations Group:
Government Programs
Commercial Operations

Nuclear Power Group:

Nuclear Manufacturing
Nuclear Services and Engineering

Nuclear Services Group:

Nuclear Environmental Services
Management & Operation Contracts of U.S. Government Facilities
Nuclear Services and Advanced Reactor Design and Engineering

Other:
Eliminations

2019

Year Ended December 31,
2018
(In thousands)

2017

1,368,555
60,032
1,428,587

1,311,886
7,284
1,319,170

1,262,929
8,932
1,271,861

243,472
109,168
352,640

201,628
164,283
365,911

158,931
126,900
285,831

102,726
—
28,613
131,339
—
(17,646)
1,894,920

96,566
—
25,872
122,438
—
(7,630)
1,799,889

101,056
9,746
26,447
137,249
—
(7,203)
1,687,738

3. Information about our Consolidated Operations in Different Geographic Areas:

REVENUES (1):

U.S.
Canada
All Other Countries

Year Ended December 31,
2018

2017

2019

(In thousands)

1,572,085
287,971
34,864
1,894,920

1,446,791
294,913
58,185
1,799,889

1,408,817
245,073
33,848
1,687,738

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

NET PROPERTY, PLANT AND EQUIPMENT:

U.S.
Canada

2019

December 31,

2018
(In thousands)

2017

494,202
86,039
580,241

390,632
48,607
439,239

308,561
40,068
348,629

4. Information about our Major Customers:

In the years ended December 31, 2019, 2018 and 2017, sales to the U.S. Government accounted for approximately 77%,
79% and 81% of our total consolidated revenues, respectively, all of which were included in our Nuclear Operations Group and
Nuclear Services Group segments.

NOTE 16 – QUARTERLY FINANCIAL DATA (UNAUDITED)

The following tables set forth selected unaudited quarterly financial information for the years ended December 31, 2019

and 2018:

Revenues
Operating income (1)
Equity in income of investees
Net Income Attributable to BWX Technologies, Inc.
Earnings per common share:

Basic:

Net Income Attributable to BWX Technologies, Inc.

Diluted:

Net Income Attributable to BWX Technologies, Inc.

(1) Includes equity in income of investees.

Revenues
Operating income (1)
Equity in income of investees
Net Income Attributable to BWX Technologies, Inc.
Earnings per common share:

Basic:

Net Income Attributable to BWX Technologies, Inc.

Diluted:

Net Income Attributable to BWX Technologies, Inc.

(1) Includes equity in income of investees.

Year Ended December 31, 2019
Quarter Ended

March 31,
2019

June 30,
2019

September 30,
2019

December 31,
2019

(In thousands, except per share amounts)

416,454
63,644
7,682
48,978

0.51

$
$
$
$

471,231
80,535
6,862
58,878

0.62

$
$
$
$

506,000
98,462
7,874
74,810

0.78

$
$
$
$

501,235
82,880
6,506
61,449

0.64

Year Ended December 31, 2018
Quarter Ended

March 31,
2018

June 30,
2018

September 30,
2018

December 31,
2018

(In thousands, except per share amounts)

457,463
79,888
7,150
66,441

0.67

0.66

$
$
$
$

438,921
71,549
6,225
60,663

0.61

0.60

$
$
$
$

425,507
50,395
9,323
77,919

0.78

$
$
$
$

477,998
103,145
7,645
21,935

0.22

$
$
$
$

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

We immediately recognize actuarial gains (losses) for our pension and postretirement benefit plans in earnings as a
component of net periodic benefit cost. Recorded in the quarters ended December 31, 2019 and 2018, the effects of these
adjustments on pre-tax income were $(3.6) million and $(67.8) million, respectively. Additionally, we recorded an interim net
actuarial gain of $35.1 million in the quarter ended September 30, 2018 as a result of the purchase of a group annuity contract
to transfer certain domestic pension benefit obligations to an insurance company, which included a $10.4 million settlement
loss and a $45.5 million actuarial gain.

NOTE 17 – EARNINGS PER SHARE

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

Basic:

Net Income Attributable to BWX Technologies, Inc.
Weighted-average common shares
Basic earnings per common share

Diluted:

Net Income Attributable to BWX Technologies, Inc.
Weighted-average common shares (basic)

Effect of dilutive securities:

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

Adjusted weighted-average common shares
Diluted earnings per common share

Year Ended December 31,

2019

2018

2017

(In thousands, except shares and
per share amounts)

244,115
95,377,414
2.56

244,115
95,377,414

226,958
99,062,087
2.29

226,958
99,062,087

147,844
99,334,472
1.49

147,844
99,334,472

433,124
95,810,538
2.55

956,966
100,019,053
2.27

1,034,718
100,369,190
1.47

(1) At December 31, 2019, 2018 and 2017, we excluded 0, 0 and 41,854 shares, respectively, from our diluted share

calculation as their effect would have been antidilutive.

Item 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this Report, we carried out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief Financial Officer, 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")). 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.
It should be noted 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 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 our disclosure controls and procedures are effective as of December 31, 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
SEC and such information is accumulated and communicated to management, including its principal executives and principal
financial officers or persons performing similar functions, as appropriate to allow timely decisions regarding required
disclosure.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as
that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) and for our assessment of the effectiveness of
internal control over financial reporting.

Our internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of our consolidated financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in
accordance with authorizations of our management and Board of Directors; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on
the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, including our Chief Executive Officer and Chief Financial Officer, has conducted an assessment of the

effectiveness of our internal control over financial reporting as of December 31, 2019, based on the framework established in
Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission. This assessment included an evaluation of the design of our internal control over financial reporting and testing of
the operational effectiveness of those controls. Based on our assessment under the criteria described above, management has
concluded that our internal control over financial reporting was effective as of December 31, 2019. Deloitte & Touche LLP has
issued an attestation report on our internal control over financial reporting as of December 31, 2019, and their report is included
in Item 9A.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the quarter ended December 31, 2019

that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of BWX Technologies, Inc.:

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of BWX Technologies, Inc. and subsidiaries (the Company) as of
December 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal
Control – Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated financial statements as of and for the year ended December 31, 2019 of the Company and our
report dated February 24, 2020 expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/S/ DELOITTE & TOUCHE LLP

Charlotte, North Carolina
February 24, 2020

Item 9B. OTHER INFORMATION

None.

PART III

Item 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item with respect to directors and executive officers is incorporated by reference to the

material appearing under the headings "Election of Directors," "Named Executive Profiles," and "Executive Officer Profiles" in
the Proxy Statement for our 2020 Annual Meeting of Stockholders. The information required by this item with respect to
compliance with section 16(a) of the Securities and Exchange Act of 1934, as amended, is incorporated by reference to the
material appearing under the heading "Section 16(a) Beneficial Ownership Compliance" in the Proxy Statement for our 2020
Annual Meeting of Stockholders. The information required by this item with respect to the Audit Committee and Audit and
Finance Committee financial experts is incorporated by reference to the material appearing in "Director Independence" and
"Audit and Finance Committee" under the heading "Corporate Governance – Board of Directors and Its Committees" in the
Proxy Statement for our 2020 Annual Meeting of Stockholders.

We have adopted a Code of Business Conduct for our employees and directors, including, specifically, our chief

executive officer, our chief financial officer, our chief accounting officer and our other executive officers. Our code satisfies the
requirements for a "code of ethics" within the meaning of SEC rules. A copy of the code is posted on our web site,
www.bwxt.com under "About Us – Corporate Citizenship – Ethics and Compliance."

Item 11.

EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference to the material appearing under the headings

"Compensation Discussion and Analysis," "Compensation of Directors," "Compensation of Executive Officers,"
"Compensation Committee Interlocks and Insider Participation" section under the heading "Corporate Governance – Board of
Directors and Its Committees," and "Compensation Committee Report" in the Proxy Statement for our 2020 Annual Meeting of
Stockholders.

Item 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The information required by this item is incorporated by reference to the material appearing under the headings "Equity
Compensation Plan Information" and "Security Ownership of Certain Beneficial Owners" in the Proxy Statement for our 2020
Annual Meeting of Stockholders.

Item 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information required by this item is incorporated by reference to the material appearing under the headings "Corporate
Governance – Director Independence" and "Certain Relationships and Related Transactions" in the Proxy Statement for our
2020 Annual Meeting of Stockholders.

Item 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item is incorporated by reference to the material appearing under the heading
"Ratification of Appointment of Independent Registered Public Accounting Firm for Year Ending December 31, 2020" in the
Proxy Statement for our 2020 Annual Meeting of Stockholders.

PART IV

Item 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this Report or incorporated by reference:

1. CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2019 and 2018

Consolidated Statements of Income for the Years Ended December 31, 2019, 2018 and 2017

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2019, 2018 and 2017

Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2019, 2018 and 2017

Consolidated Statements of Cash Flows for the Years Ended December 31, 2019, 2018 and 2017

Notes to Consolidated Financial Statements for the Years Ended December 31, 2019, 2018 and 2017

2. CONSOLIDATED FINANCIAL STATEMENT SCHEDULES

All schedules for which provision is made of the applicable regulations of the SEC have been omitted because they
are not required under the relevant instructions or because the required information is included in the financial statements or the
related footnotes contained in this Report.

3. EXHIBITS

Exhibit
Number

Description

2.1

2.2

3.1

3.3

4.1

4.2

4.3

4.4

10.1

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)).

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)).

Restated Certificate of Incorporation of the Company, dated May 14, 2019 (incorporated by reference to Exhibit
3.2 to the Company's Current Report on Form 8-K filed with the SEC on May 17, 2019 (File No. 1-34658)).

Amended and Restated Bylaws, dated November 1, 2019 (incorporated by reference to Exhibit 3.3 to the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 (File No. 1-34658)).

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)).

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)).

First Supplemental Indenture, dated May 24, 2019, among the Company, each of the guarantors party thereto and
U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.3 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2019 (File No. 1-34658)).

Description of the Company's Securities Registered under Section 12 of the Securities Exchange Act of 1934.

Credit Agreement, dated as of May 24, 2018, among BWX Technologies, Inc., as administrative borrower, BWXT
Canada Ltd., as the Canadian borrower, Wells Fargo Bank, N.A., as administrative agent, and the other lenders
party thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with
the SEC on May 24, 2018 (File No. 1-34658)).

Exhibit
Number

Description

10.2

10.3

10.4

10.5*

10.6*

10.7*

10.8*

10.9*

10.10*

10.11*

10.12*

10.13*

10.14*

10.15*

10.16*

10.17*

10.18*

Tax Sharing Agreement dated as of June 7, 2010 between J. Ray Holdings, Inc. and Babcock & Wilcox Holdings,
Inc. (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2010 (File No. 1-34658)).

Tax Sharing Agreement, dated as of June 8, 2015, by and between the Company and Babcock & Wilcox
Enterprises, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 2015 (File No. 1-34658)).

Cooperative Agreement, dated as of April 12, 2013, between Babcock & Wilcox mPower, Inc. and the United
States Department of Energy (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form
8-K dated April 15, 2013 (File No. 1-34658)).

BWX Technologies, Inc. Executive Incentive Compensation Plan as amended and restated July 1, 2015
(incorporated by reference to Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2015 (File No. 1-34658)).

Supplemental Executive Retirement Plan of BWX Technologies, Inc. as amended and restated July 1, 2015
(incorporated by reference to Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2015 (File No. 1-34658)).

BWX Technologies, Inc. Defined Contribution Restoration Plan as amended and restated effective July 1, 2015
(incorporated by reference to Exhibit 10.13 to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2015 (File No. 1-34658)).

Form of Change In Control Agreement between the Company and selected officers (other than Mr. Geveden)
(incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on
July 6, 2015 (File No. 1-34658)).

Form of Amendment to Change in Control Agreement, dated July 1, 2016, between the Company and certain
officers (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 2016 (File No. 1-34658)).

Form of Change In Control Agreement between the Company and Mr. Geveden dated October 26, 2015
(incorporated by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2015 (File No. 1-34658)).

Form of Non-Employee Director Grant Letter (incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 (File No. 1-34658)).

Form of Non-Employee Director Grant Letter (incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (File No. 1-34658)).

Form of Non-Employee Director Grant Letter (incorporated by reference to Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 (File No. 1-34658)).

Form of 2019 Performance Restricted Stock Unit Grant Agreement for Employees (incorporated by reference to
Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2019 (File
No. 1-34658)).

Form of 2019 Restricted Stock Unit Grant Agreement for Employees (incorporated by reference to Exhibit 10.2 to
the Company's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2019 (File No. 1-34658)).

Form of 2018 Performance Restricted Stock Unit Grant Agreement for Employees (incorporated by reference to
Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2018 (File
No. 1-34658)).

Form of 2018 Restricted Stock Unit Grant Agreement for Employees (incorporated by reference to Exhibit 10.3 to
the Company's Quarterly Report on Form 10-Q filed for the quarter ended March 31, 2018 (File No. 1-34658)).

Form of 2017 Performance Restricted Stock Unit Grant Agreement for Employees (incorporated by reference to
Exhibit 10.13 to the Company's Annual Report on Form 10-K filed for the year ended December 31, 2016 (File
No. 1-34658)).

Exhibit
Number

10.19*

10.20*

10.21*

10.22*

10.23*

10.24*

10.25*

10.26*

10.27*

10.28*

10.29*

10.30*

10.31*

10.32

10.33

10.34

Description

Form of 2017 Restricted Stock Unit Grant Agreement for Employees (incorporated by reference to Exhibit 10.14
to the Company's Annual Report on Form 10-K filed for the year ended December 31, 2016 (File No. 1-34658)).

Form of 2016 Performance Restricted Stock Unit Grant Agreement for Employees (incorporated by reference to
Exhibit 10.11 to the Company's Annual Report on Form 10-K filed for the year ended December 31, 2015 (File
No. 1-34658)).

Form of 2016 Restricted Stock Unit Grant Agreement for Employees (incorporated by reference to Exhibit 10.12
to the Company's Annual Report on Form 10-K filed for the year ended December 31, 2015 (File No. 1-34658)).

Form of Agreement to Convert Units Payable in BWE Shares into Units Payable in BWXT Shares (incorporated
by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K filed for the year ended December
31, 2015 (File No. 1-34658)).

2015 Notice of Grant under Amended and Restated 2010 Long-Term Incentive Plan of the Company
(incorporated by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K filed for the year
ended December 31, 2014 (File No. 1-34658)).

Form of 2015 Stock Option Grant Agreement for Employees (incorporated by reference to Exhibit 10.13 to the
Company's Annual Report on Form 10-K for the year ended December 31, 2014 (File No. 1-34658)).

Form of 2015 Restricted Stock Unit Grant Agreement (ratable vesting) for Employees (incorporated by reference
to Exhibit 10.14 to the Company's Annual Report on Form 10-K for the year ended December 31, 2014 (File No.
1-34658)).

Form of 2015 Restricted Stock Unit Grant Agreement (cliff vesting) for Employees (incorporated by reference to
Exhibit 10.15 to the Company's Annual Report on Form 10-K for the year ended December 31, 2014 (File No.
1-34658)).

BWX Technologies, Inc. Executive Severance Plan amended and restated July 1, 2015 (incorporated by reference
to Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No.
1-34658)).

2010 Long-Term Incentive Plan of the Company as amended and restated July 1, 2015 (incorporated by reference
to Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No.
1-34658)).

Form of Restructuring Transaction Retention Agreement between the Company and certain of our executive
officers, dated November 5, 2014 (incorporated by reference to Exhibit 10.4 to the Company's Current Report on
Form 8-K dated October 31, 2014 (File No. 1-34658)).

Form of Restructuring Transaction Severance Agreement between the Company and certain of our executive
officers, dated November 5, 2014 (incorporated by reference to Exhibit 10.5 to the Company's Current Report on
Form 8-K dated October 31, 2014 (File No. 1-34658)).

Employee Matters Agreement, dated as of June 8, 2015, by and between the Company and Babcock & Wilcox
Enterprises, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed
with the SEC on June 9, 2015 (File No. 1-34658)).

Transition Services Agreement, dated as of June 8, 2015, between the Company, as service provider, and Babcock
&Wilcox Enterprises, Inc., as service receiver (incorporated by reference to Exhibit 10.3 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 1-34658)).

Transition Services Agreement, dated as of June 8, 2015, between Babcock & Wilcox Enterprises, Inc., as service
provider, and the Company, as service receiver (incorporated by reference to Exhibit 10.4 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 1-34658)).

Assumption and Loss Allocation Agreement, dated as of June 19, 2015, by and among ACE American Insurance
Company and the Ace Affiliates (as defined therein), Babcock & Wilcox Enterprises, Inc. and the Company
(incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2015 (File No. 1-34658)).

Exhibit
Number

10.35

10.36

10.37*

10.38*

10.39

21.1

23.1

31.1

31.2

32.1

32.2

Description

Reinsurance Novation and Assumption Agreement, dated as of June 19, 2015, by and among ACE American
Insurance Company and the Ace Affiliates (as defined therein), Creole Insurance Company and Dampkraft
Insurance Company (incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 2015 (File No. 1-34658)).

Novation and Assumption Agreement, dated as of June 19, 2015, by and among the Company, Babcock & Wilcox
Enterprises, Inc., Dampkraft Insurance Company and Creole Insurance Company (incorporated by reference to
Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No.
1-34658)).

Form of Director and Officer Indemnification Agreement entered into between the Company and each of its
directors and selected officers effective July 1, 2015 (incorporated by reference to Exhibit 10.15 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 1-34658)).

Transition Agreement, dated December 14, 2017, between John A. Fees and the Company (incorporated by
reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated December 15, 2017 (File No.
1-34658)).

Joinder Agreement, dated as of May 24, 2019, between BWXT Advanced Technologies LLC and Wells Fargo
Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2019 (File No. 1-34658)).

Subsidiaries of the Registrant.

Consent of Deloitte & Touche LLP.

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

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

Section 1350 certification of Chief Executive Officer.

Section 1350 certification of Chief Financial Officer.

101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL

tags are embedded within the Inline XBRL 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

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Management contract or compensatory plan or arrangement.

Item 16.

FORM 10-K SUMMARY

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

February 24, 2020

BWX TECHNOLOGIES, INC.

/s/ Rex D. Geveden

By:

Rex D. Geveden

President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following
persons on behalf of the registrant and in the capacities indicated and on the date indicated.

Signature

Title

/s/ Rex D. Geveden

Rex D. Geveden

/s/ David S. Black

David S. Black

/s/ Jason S. Kerr

Jason S. Kerr

/s/ John A. Fees

John A. Fees

/s/ Jan A. Bertsch

Jan A. Bertsch

/s/ Gerhard F. Burbach

Gerhard F. Burbach

/s/ James M. Jaska

James M. Jaska

/s/ Kenneth J. Krieg

Kenneth J. Krieg

/s/ Robb A. LeMasters

Robb A. LeMasters

/s/ Leland D. Melvin

Leland D. Melvin

/s/ Robert L. Nardelli

Robert L. Nardelli

/s/ Barbara A. Niland

Barbara A. Niland

/s/ Charles W. Pryor Jr.

Charles W. Pryor Jr.

February 24, 2020

President and Chief Executive Officer
(Principal Executive Officer)

Senior Vice President and Chief Financial Officer

(Principal Financial Officer and Duly Authorized Representative)

Vice President and Chief Accounting Officer

(Principal Accounting Officer and Duly Authorized Representative)

Non-Executive Chairman

Director

100

BWX TECHNOLOGIES, INC.
SIGNIFICANT SUBSIDIARIES OF THE REGISTRANT
YEAR ENDED DECEMBER 31, 2019

NAME OF COMPANY
BWXT Investment Company
BWXT Canada Ltd.
BWXT Government Group, Inc.
BWXT Nuclear Operations Group, Inc.
BWXT Nuclear Energy, Inc.
Nuclear Fuel Services, Inc.
BWXT Modular Reactors, LLC
BWXT mPower, Inc.
BWXT Nuclear Energy Canada Inc.
BWXT ITG Canada, Inc.
BWXT Advanced Technologies LLC

JURISDICTION
OF
ORGANIZATION
Delaware
Canada
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Canada
Canada
Delaware

EXHIBIT 21.1

PERCENTAGE
OF OWNERSHIP
INTEREST

100
100
100
100
100
100
100
100
100
100
100

The subsidiaries omitted from the foregoing list, considered in the aggregate as a single subsidiary, do not constitute a
significant subsidiary.

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No.’s 333-168687 and 333-195889 on Form S-8

of our reports dated February 24, 2020, relating to the consolidated financial statements of BWX Technologies, Inc. and
subsidiaries, and the effectiveness of BWX Technologies, Inc. and subsidiaries internal control over financial reporting
appearing in the Annual Report on Form 10-K of BWX Technologies, Inc. for the year ended December 31, 2019.

EXHIBIT 23.1

/S/ DELOITTE & TOUCHE LLP

Charlotte, North Carolina
February 24, 2020

I, Rex D. Geveden, certify that:

CERTIFICATIONS

EXHIBIT 31.1

I have reviewed this annual report on Form 10-K of BWX Technologies, Inc. for the year ended December 31, 2019;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly

present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial

reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred

during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control

over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or
persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over

financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role

in the registrant’s internal control over financial reporting.

February 24, 2020

/s/ Rex D. Geveden

Rex D. Geveden
President and Chief Executive Officer

EXHIBIT 31.2

I, David S. Black, certify that: