BWX Technologies, Inc.

Previous wording

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 Safety Administration's ("NNSA") Naval Nuclear Propulsion Program. In addition, this segment downblends Cold War-era government stockpiles of high-enriched uranium, develops and manufactures advanced materials and products for commercial, military and space applications and supplies proprietary and sole-source valves, manifolds and fittings to global naval and commercial shipping customers. As a supplier of major nuclear components for certain U.S. Government programs, this segment is a significant participant in the defense industry.

Current wording

Through this segment, we engineer, design and manufacture precision naval nuclear components, reactors and nuclear fuel for the U.S. Department of Energy/National Nuclear Security Administration Naval Nuclear Propulsion Program. In addition, this segment downblends Cold War-era government stockpiles of high-enriched uranium, develops and manufactures advanced materials and products for commercial, military and space applications and supplies proprietary and sole-source valves, manifolds and fittings to global naval and commercial shipping customers. As a supplier of major nuclear components for certain U.S. Government programs, this segment is a significant participant in the defense industry.

Previous wording

Subsequent to March 31, 2026, we announced our intention to acquire Precision Components Group, LLC ("PCG"), including its subsidiaries Precision Custom Components and DC Fabricators. PCG is a privately held U.S. manufacturer of complex, heavy-walled and heat-transfer components. The acquisition will expand BWXT’s heavy-manufacturing footprint and establish additional U.S. commercial nuclear production capacity to serve growing domestic demand. The acquisition is expected to close during the second half of 2026, subject to required regulatory approvals and customary closing conditions. Once completed, PCG will be reported as part of our Commercial Operations segment.

Current wording

PCG was a privately held U.S. manufacturer of complex, heavy-walled and heat-transfer components. The acquisition will expand BWXT’s heavy-manufacturing footprint and establish additional U.S. commercial nuclear production capacity to serve growing domestic demand. PCG will be reported as part of our Commercial Operations segment.

Previous wording

For a summary of the critical accounting policies and estimates that we use in the preparation of our unaudited condensed consolidated financial statements, see Item 7 of our 2025 10-K. There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2026.

Current wording

For a summary of the critical accounting policies and estimates that we use in the preparation of our unaudited condensed consolidated financial statements, see Item 7 of our 2025 10-K. There have been no material changes to our critical accounting policies and estimates during the six months ended June 30, 2026.

Previous wording

As we progress on our contracts and the underlying performance obligations, 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. The aggregate impact of changes in estimates decreased our revenues and operating income as follows:

Current wording

As we progress on our contracts and the underlying performance obligations, 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. The aggregate impact of changes in estimates increased our revenues and operating income as follows:

Previous wording

(1)During the three months ended March 31, 2026 and 2025, no adjustments to any one contract had a material impact on our consolidated financial statements.

Current wording

(1)During the three and six months ended June 30, 2026, no adjustments to any one contract had a material impact on our consolidated financial statements. During the three and six months ended June 30, 2025, our Government Operations segment results were favorably impacted by material contract adjustments related to a nuclear operations contract resulting in an increase in revenue and operating income of $29.4 million.

Previous wording

Results of Operations – Three Months Ended March 31, 2026 vs. Three Months Ended March 31, 2025

Current wording

Results of Operations – Three and Six Months Ended June 30, 2026 vs. Three and Six Months Ended June 30, 2025

Previous wording

Consolidated revenues increased 26.1%, or $178.0 million, to $860.2 million in the three months ended March 31, 2026 compared to $682.3 million for the corresponding period of 2025, due to increases in our Government Operations and Commercial Operations segments of $22.6 million and $155.3 million, respectively.

Current wording

Consolidated revenues increased 18.0%, or $137.6 million, to $901.6 million in the three months ended June 30, 2026 compared to $764.0 million for the corresponding period of 2025, due to increases in our Government Operations and Commercial Operations segments of $12.3 million and $126.4 million, respectively.

Previous wording

Consolidated operating income increased $10.1 million to $106.7 million in the three months ended March 31, 2026 compared to $96.6 million for the corresponding period of 2025 due to increases in our Government Operations and Commercial Operations segments of $1.4 million and $17.6 million, respectively, offset partially by higher Unallocated Corporate expenses of $8.9 million when compared to the corresponding period in the prior year.

Current wording

Consolidated revenues increased 21.8%, or $315.5 million, to $1,761.8 million in the six months ended June 30, 2026 compared to $1,446.3 million for the corresponding period of 2025, due to increases in our Government Operations and Commercial Operations segments of $34.9 million and $281.7 million, respectively.

Previous wording

Revenues increased $22.6 million, or 4.1%, to $577.9 million in the three months ended March 31, 2026 compared to $555.3 million for the corresponding period of 2025. The increase was primarily due to an increase in revenues of $16.2 million associated with A.O.T. and contributions from enrichment operations. These increases were partially offset by a decrease in revenues associated with our advanced technologies business.

Current wording

Revenues increased $34.9 million, or 3.1% to $1,179.2 million in the six months ended June 30, 2026 compared to $1,144.2 million for the corresponding period of 2025. The increase was primarily driven by an increase in revenues of $19.6 million associated with A.O.T. and contributions from enrichment operations. These increases were partially offset by a decrease in revenues associated with our advanced technologies business when compared to the corresponding period of the prior year.

Previous wording

Revenues increased 121.1%, or $155.3 million, to $283.6 million in the three months ended March 31, 2026 compared to $128.3 million for the corresponding period of 2025. The increase was primarily related to the acquisition of Kinectrics, completed on May 20, 2025, which resulted in an increase in revenues of $105.3 million. The increase was also due to higher revenues related to on-site inspection, maintenance and refurbishment work of $23.1 million and components manufacturing of $19.2 million.

Current wording

Revenues increased 71.7%, or $126.4 million, to $302.5 million in the three months ended June 30, 2026 compared to $176.1 million for the corresponding period of 2025. The increase was primarily related to the acquisition of Kinectrics, completed on May 20, 2025, which resulted in an increase in revenues of $68.3 million. The increase was also due to higher revenues relating to on-site inspection, maintenance, modification and refurbishment work of $31.8 million and fuel handling and engineering services and parts manufacturing of $19.6 million.

Previous wording

Operating income increased $17.6 million to $24.0 million in the three months ended March 31, 2026 compared to $6.5 million for the corresponding period of 2025. The increase was primarily related to the operating income impact of the changes in revenues noted above as well as a favorable shift in our product mix. These increases were partially offset by a $1.7 million increase in expenses associated with acquisition and restructuring-related activities.

Current wording

Operating income increased $17.5 million to $24.3 million in the three months ended June 30, 2026 compared to $6.9 million for the corresponding period of 2025. The increase was primarily related to the operating income impact of the changes in revenues noted above as well as a favorable shift in our product mix when compared to the corresponding period of the prior year.

Previous wording

Unallocated corporate expenses increased $8.9 million to $16.5 million in the three months ended March 31, 2026 compared to $7.6 million the corresponding period of 2025. The increase was primarily related to higher expenditures for legal and consulting costs associated with merger and acquisition related activities of $3.0 million and restructuring related activities $1.0 million when compared to the corresponding period of the prior year.

Current wording

Unallocated corporate expenses increased $10.9 million in the six months ended June 30, 2026 compared to the corresponding period of 2025. The increase was primarily due to higher expenditures for legal and consulting costs associated with merger and acquisition related activities of $3.1 million and higher healthcare costs related to the timing of claims.

Previous wording

Our effective tax rate for the three months ended March 31, 2026 was 15.0% as compared to 17.7% for the three months ended March 31, 2025. The effective tax rates for the three months ended March 31, 2026 and March 31, 2025 were lower than the U.S. corporate federal income tax rate of 21% primarily due to excess tax benefits associated with equity compensation.

Current wording

Our effective tax rate for the six months ended June 30, 2026 was 18.4% as compared to 18.8% for the six months ended June 30, 2025. The effective tax rates for the six months ended June 30, 2026 and June 30, 2025 were lower than the U.S. corporate federal income tax rate of 21% primarily due to benefits from U.S. federal research and development tax credits and excess tax benefits associated with equity compensation.

Previous wording

As of March 31, 2026, our ending backlog was $8,650.8 million, which included $2,367.4 million of unfunded backlog related to U.S. Government contracts. We expect to recognize approximately 60% of the revenue associated with our backlog by the end of 2027, with the remainder to be recognized thereafter.

Current wording

As of June 30, 2026, our ending backlog was $8,398.1 million, which included $2,256.4 million of unfunded backlog related to U.S. Government contracts. We expect to recognize approximately 55% of the revenue associated with our backlog by the end of 2027, with the remainder to be recognized thereafter.

Previous wording

The New Credit Facility is scheduled to mature on November 10, 2030, subject to an early maturity trigger if on any date the aggregate outstanding principal amount of unsecured indebtedness due within 91 days thereof is in excess of 100% of EBITDA, as defined in the New Credit Facility, for the last four full fiscal quarters. However, this early maturity trigger will not apply if (1) the total Net Leverage Ratio is less than or equal to 2.00 to 1.00 or (2) liquidity is at least 125% of such outstanding unsecured indebtedness. The Company’s obligations under the New Credit Facility are guaranteed by the same guarantors that guarantee the 2030 Notes. The New Credit Facility is secured by first-priority liens on certain assets owned by the Company and the guarantors (other than its subsidiaries comprising a portion of its Government Operations segment), provided such liens may be released if the Company obtains investment grade ratings of at least BBB- from S&P or Baa3 from Moody's and no default or event of default exists.

Current wording

The New Credit Facility is scheduled to mature on November 10, 2030, subject to an early maturity trigger if on any date the aggregate outstanding principal amount of unsecured indebtedness due within 91 days thereof is in excess of 100% of EBITDA, as defined in the New Credit Facility, for the last four full fiscal quarters. However, this early maturity trigger will not apply if (1) the total Net Leverage Ratio is less than or equal to 2.00 to 1.00 or (2) liquidity is at least 125% of such outstanding unsecured indebtedness. The Company’s obligations under the New Credit Facility are guaranteed by the same guarantors that guarantee the 2030 Notes. The New Credit Facility is secured by first-priority liens on certain assets owned by the Company and the guarantors (other than its subsidiaries comprising a portion of its Government Operations segment), provided such liens may be released if the Company obtains investment grade ratings (with a stable outlook or better) from two of the three primary rating agencies, and no default or event of default exists.

Previous wording

We may redeem the Senior Notes due 2029, in whole or in part, at any time at a redemption price equal to 100.0% of the principal amount to be redeemed if the redemption occurs on or after April 15, 2026, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

Current wording

We may redeem the Senior Notes due 2029, in whole or in part, at any time at a redemption price equal to 100.0% of the principal amount to be redeemed plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

Previous wording

Before August 1, 2030, noteholders will have the right to convert their 2030 Notes only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending on March 31, 2026, if the last reported sale price of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter; (2) during the five consecutive business days immediately after any ten consecutive trading day period if the trading price per $1,000 principal amount of 2030 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of common stock on such trading day and the conversion rate on each Trading Day; (3) upon the occurrence of specified corporate events or distributions on the common stock as set forth in the Indenture; or (4) if the Company calls the 2030 Notes for redemption.

Current wording

Before August 1, 2030, noteholders will have the right to convert their 2030 Notes only under the following circumstances: (1) during any fiscal quarter, if the last reported sale price of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter; (2) during the five consecutive business days immediately after any ten consecutive trading day period if the trading price per $1,000 principal amount of 2030 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of common stock on such trading day and the conversion rate on each Trading Day; (3) upon the occurrence of specified corporate events or distributions on the common stock as set forth in the Indenture; or (4) if the Company calls the 2030 Notes for redemption.

Previous wording

We have posted surety bonds to support regulatory and contractual obligations for certain decommissioning responsibilities, projects and legal matters. We utilize surety bond facilities to support such obligations, but the issuance of surety bonds under those facilities is typically at the surety's discretion, and the surety bond facilities generally permit the surety, in its sole discretion, to terminate the facility or demand collateral. Although there can be no assurance that we will maintain our surety bond capacity, we believe our current capacity is adequate to support our existing requirements for the next 12 months. In addition, these surety bonds generally indemnify the beneficiaries should we fail to perform our obligations under the applicable agreements. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds those underwriters issue. As of March 31, 2026, surety bonds issued and outstanding under these arrangements totaled approximately $359.6 million.

Current wording

We have posted surety bonds to support regulatory and contractual obligations for certain decommissioning responsibilities, projects and legal matters. We utilize surety bond facilities to support such obligations, but the issuance of surety bonds under those facilities is typically at the surety's discretion, and the surety bond facilities generally permit the surety, in its sole discretion, to terminate the facility or demand collateral. Although there can be no assurance that we will maintain our surety bond capacity, we believe our current capacity is adequate to support our existing requirements for the next 12 months. In addition, these surety 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 June 30, 2026, surety bonds issued and outstanding under these arrangements totaled approximately $355.4 million.

Previous wording

Similarly, we have provided letters of credit and bank guarantees to governmental agencies and contractual counterparties to support regulatory and contractual obligations for certain decommissioning responsibilities, projects and legal matters. We utilize our New Credit Facility and a bilateral letter of credit facility to support such obligations, but the issuance of letters of credit and bank guarantees under our bilateral letter of credit facility is at the issuer's discretion, and our bilateral letter of credit facility generally permits the issuer, in its sole discretion, to demand collateral if the issuer does not otherwise have the benefit of the collateral under our New Credit Facility. Although there can be no assurance that we will maintain our bilateral letter of credit facility capacity, we believe our current capacity, together with capacity under our New Credit Facility, is adequate to support our existing requirements for the next 12 months. As of March 31, 2026, letters of credit and bank guarantees issued and outstanding under our bilateral letter of credit facility totaled approximately $50.7 million, and such letters of credit and bank guarantees are secured by the collateral under our New Credit Facility.

Current wording

Similarly, we have provided letters of credit and bank guarantees to governmental agencies and contractual counterparties to support regulatory and contractual obligations for certain decommissioning responsibilities, projects and legal matters. We utilize our New Credit Facility and a bilateral letter of credit facility to support such obligations, but the issuance of letters of credit and bank guarantees under our bilateral letter of credit facility is at the issuer's discretion, and our bilateral letter of credit facility generally permits the issuer, in its sole discretion, to demand collateral if the issuer does not otherwise have the benefit of the collateral under our New Credit Facility. Although there can be no assurance that we will maintain our bilateral letter of credit facility capacity, we believe our current capacity, together with capacity under our New Credit Facility, is adequate to support our existing requirements for the next 12 months. As of June 30, 2026, letters of credit and bank guarantees issued and outstanding under our bilateral letter of credit facility totaled approximately $36.2 million, and such letters of credit and bank guarantees are secured by the collateral under our New Credit Facility.

Previous wording

As of March 31, 2026, we had underfunded defined benefit pension and postretirement benefit plans with obligations totaling approximately $158.1 million. These long-term liabilities are expected to require use of our resources to satisfy future funding obligations. Based largely on statutory funding requirements, we expect to make contributions of approximately $16.3 million for the remainder of 2026 related to our pension and postretirement plans. We may also make additional contributions based on a variety of factors including, but not limited to, tax planning, evaluation of funded status and risk mitigation strategies.

Current wording

As of June 30, 2026, we had underfunded defined benefit pension and postretirement benefit plans with obligations totaling approximately $152.0 million. These long-term liabilities are expected to require use of our resources to satisfy future funding obligations. Based largely on statutory funding requirements, we expect to make contributions of approximately $15.8 million for the remainder of 2026 related to our pension and postretirement plans. We may also make additional contributions based on a variety of factors including, but not limited to, tax planning, evaluation of funded status and risk mitigation strategies.

Previous wording

Our working capital increased by $53.8 million to $942.2 million at March 31, 2026 from $888.3 million at December 31, 2025, primarily due to changes in contracts in progress and advance billings on contracts due to the timing of project cash flows and decreases in accrued employee benefits offset partially by increases in accounts payable and accrued liabilities.

Current wording

Our working capital increased by $108.5 million to $996.8 million at June 30, 2026 from $888.3 million at December 31, 2025, due to favorable changes in contracts in progress and advance billings on contracts due to the timing of project cash flows and decreases in accrued employee benefits offset partially by increases in accounts payable.

Previous wording

Our net cash provided by operating activities increased by $42.0 million to $92.6 million in the three months ended March 31, 2026, compared to cash provided by operating activities of $50.7 million in the three months ended March 31, 2025. The increase in cash provided by operating activities was primarily attributable to the timing of vendor payments and project cash flows.

Current wording

Our net cash provided by operating activities increased by $39.3 million to $249.0 million in the six months ended June 30, 2026, compared to cash provided by operating activities of $209.7 million in the six months ended June 30, 2025. The increase in cash provided by operating activities was primarily attributable to favorable changes on the timing of vendor payments, customer billings and project cash flows and an increase in net income. This increase was offset partially by a decrease in income taxes payable.

Previous wording

Our net cash used in investing activities decreased by $109.4 million to $46.9 million in the three months ended March 31, 2026, compared to cash used in investing activities of $156.4 million in the three months ended March 31, 2025. The decrease in cash used in investing activities was primarily attributable to the acquisition of A.O.T. on January 3, 2025.

Current wording

Our net cash used in investing activities decreased by $545.0 million to $84.4 million in the six months ended June 30, 2026, compared to cash used in investing activities of $629.5 million in the six months ended June 30, 2025. The decrease in cash used in investing activities was primarily attributable to the acquisitions of A.O.T. and Kinectrics in the prior year.

Previous wording

Our net cash used in financing activities increased by $119.0 million to $34.2 million in the three months ended March 31, 2026, compared to cash provided by financing activities of $84.8 million in the three months ended March 31, 2025. The increase in cash used in financing activities was primarily due to net borrowings of long-term debt of $141.9 million in the corresponding period in the prior year.

Current wording

Our net cash used in financing activities increased by $442.8 million to $57.0 million in the six months ended June 30, 2026, compared to cash provided by financing activities of $385.8 million in the six months ended June 30, 2025. The increase in cash used in financing activities was primarily due to net borrowings of long-term debt of $473.8 million in the corresponding period in the prior year, offset partially by $30.0 million of repurchases of common stock in the corresponding period in the prior year.

Previous wording

At March 31, 2026, we had restricted cash and cash equivalents totaling $8.0 million, $4.8 million of which was held for future decommissioning of facilities (which is included in Other Assets on our condensed consolidated balance sheets) and $3.2 million of which was held to meet reinsurance reserve requirements of our captive insurer.

Current wording

At June 30, 2026, we had restricted cash and cash equivalents totaling $8.1 million, $5.0 million of which was held for future decommissioning of facilities (which is included in Other Assets on our condensed consolidated balance sheets) and $3.1 million of which was held to meet reinsurance reserve requirements of our captive insurer.

Previous wording

At March 31, 2026, we had long-term investments with a fair value of $7.9 million and our investment portfolio consisted entirely of mutual funds. These equity securities are carried at fair value with the unrealized gains and losses reported in earnings.

Current wording

At June 30, 2026, we had long-term investments with a fair value of $8.8 million and our investment portfolio consisted entirely of mutual funds. These equity securities are carried at fair value with the unrealized gains and losses reported in earnings.

Previous wording

As discussed in Note 2 to our condensed consolidated financial statements, we announced our intention to acquire PCG. We expect to make a significant cash investment during 2026 to complete this acquisition.

Current wording

As discussed in Note 2 to our condensed consolidated financial statements, on July 1, 2026, we completed our acquisition of PCG. We expect to make a significant cash investment during 2026 to complete this acquisition.