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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _________________________________________________________________________________________________________________________________ 
FORM 10-Q
 _________________________________________________________________________________________________________________________________ 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022.
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     .
Commission File No. 001-34658
BWX TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
__________________________________________________________________________________________________________________________________
Delaware 80-0558025
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
800 Main Street, 4th Floor 
Lynchburg,Virginia 24504
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (980) 365-4300
_________________________________________________________________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueBWXTNew York Stock Exchange
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      No  
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      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
The number of shares of the registrant's common stock outstanding at May 5, 2022 was 91,192,769.


BWX TECHNOLOGIES, INC.
INDEX – FORM 10-Q
 PAGE
March 31, 2022 and December 31, 2021 (Unaudited)
Three Months Ended March 31, 2022 and 2021 (Unaudited)
Three Months Ended March 31, 2022 and 2021 (Unaudited)
Three Months Ended March 31, 2022 and 2021 (Unaudited)
Three Months Ended March 31, 2022 and 2021 (Unaudited)

1

PART I
FINANCIAL INFORMATION
Item 1.    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
March 31,
2022
December 31,
2021
(Unaudited)
(In thousands)
Current Assets:
Cash and cash equivalents$23,635 $33,891 
Restricted cash and cash equivalents2,896 2,896 
Investments3,789 3,811 
Accounts receivable – trade, net58,886 70,663 
Accounts receivable – other14,501 16,651 
Retainages77,804 51,507 
Contracts in progress561,407 546,595 
Other current assets49,487 47,718 
Total Current Assets792,405 773,732 
Property, Plant and Equipment, Net1,071,365 1,045,640 
Investments8,997 9,558 
Goodwill286,859 285,502 
Deferred Income Taxes21,360 21,394 
Investments in Unconsolidated Affiliates101,857 85,284 
Intangible Assets184,688 185,551 
Other Assets101,576 94,719 
TOTAL$2,569,107 $2,501,380 
See accompanying notes to condensed consolidated financial statements.
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BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31,
2022
December 31,
2021
(Unaudited)
(In thousands, except share
and per share amounts)
Current Liabilities:
Accounts payable$141,131 $189,842 
Accrued employee benefits60,071 71,835 
Accrued liabilities – other95,282 80,998 
Advance billings on contracts105,687 111,619 
Accrued warranty expense6,473 5,321 
Total Current Liabilities408,644 459,615 
Long-Term Debt1,299,777 1,189,304 
Accumulated Postretirement Benefit Obligation23,993 24,333 
Environmental Liabilities92,966 92,642 
Pension Liability52,886 59,388 
Other Liabilities30,887 38,863 
Commitments and Contingencies (Note 5)
Stockholders' Equity:
Common stock, par value $0.01 per share, authorized 325,000,000 shares; issued 127,591,227 and 127,311,985 shares at March 31, 2022 and December 31, 2021, respectively
1,276 1,273 
Preferred stock, par value $0.01 per share, authorized 75,000,000 shares; No shares issued
  
Capital in excess of par value178,243 174,288 
Retained earnings1,814,482 1,775,751 
Treasury stock at cost, 36,403,902 and 35,915,747 shares at March 31, 2022 and December 31, 2021, respectively
(1,352,291)(1,326,280)
Accumulated other comprehensive income (loss)18,179 12,143 
Stockholders' Equity – BWX Technologies, Inc.659,889 637,175 
Noncontrolling interest65 60 
Total Stockholders' Equity659,954 637,235 
TOTAL$2,569,107 $2,501,380 
See accompanying notes to condensed consolidated financial statements.

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BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31,
 20222021
(Unaudited)
(In thousands, except share and per share amounts)
Revenues$530,738 $528,273 
Costs and Expenses:
Cost of operations404,827 392,806 
Research and development costs2,953 3,116 
Losses (gains) on asset disposals and impairments, net30 (8)
Selling, general and administrative expenses60,134 58,261 
Total Costs and Expenses467,944 454,175 
Equity in Income of Investees8,779 8,316 
Operating Income71,573 82,414 
Other Income (Expense):
Interest income117 132 
Interest expense(7,051)(7,039)
Other – net12,809 16,386 
Total Other Income (Expense)5,875 9,479 
Income before Provision for Income Taxes
77,448 91,893 
Provision for Income Taxes18,374 22,078 
Net Income$59,074 $69,815 
Net Income Attributable to Noncontrolling Interest(64)(66)
Net Income Attributable to BWX Technologies, Inc.$59,010 $69,749 
Earnings per Common Share:
Basic:
Net Income Attributable to BWX Technologies, Inc.$0.64 $0.73 
Diluted:
Net Income Attributable to BWX Technologies, Inc.$0.64 $0.73 
Shares used in the computation of earnings per share (Note 9):
Basic91,563,598 95,303,728 
Diluted91,800,294 95,558,863 
See accompanying notes to condensed consolidated financial statements.
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BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
Three Months Ended March 31,
 20222021
(Unaudited)
(In thousands)
Net Income$59,074 $69,815 
Other Comprehensive Income (Loss):
Currency translation adjustments5,365 8,001 
Derivative financial instruments:
Unrealized losses arising during the period, net of tax benefit of $36 and $139, respectively
(108)(412)
Reclassification adjustment for losses (gains) included in net income, net of tax (benefit) provision of $(52) and $56, respectively
152 (166)
Amortization of benefit plan costs, net of tax benefit of $(163) and $(157), respectively
651 580 
Unrealized (losses) gains on investments arising during the period, net of tax benefit (provision) of $6 and $(24), respectively
(24)89 
Other Comprehensive Income (Loss)6,036 8,092 
Total Comprehensive Income65,110 77,907 
Comprehensive Income Attributable to Noncontrolling Interest(64)(66)
Comprehensive Income Attributable to BWX Technologies, Inc.$65,046 $77,841 
See accompanying notes to condensed consolidated financial statements.
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BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Common StockCapital In
Excess of
Par Value
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders'
Equity
 SharesPar
Value
Retained
Earnings
Treasury
Stock
Stockholders'
Equity
Noncontrolling
Interest
  (In thousands, except share and per share amounts)
Balance December 31, 2021127,311,985 $1,273 $174,288 $1,775,751 $12,143 $(1,326,280)$637,175 $60 $637,235 
Net income— — — 59,010 — — 59,010 64 59,074 
Dividends declared ($0.22 per share)
— — — (20,279)— — (20,279)— (20,279)
Currency translation adjustments— — — — 5,365 — 5,365 — 5,365 
Derivative financial instruments— — — — 44 — 44 — 44 
Defined benefit obligations— — — — 651 — 651 — 651 
Available-for-sale investments— — — — (24)— (24)— (24)
Exercises of stock options— — — — — — — — — 
Shares placed in treasury— — — — — (26,011)(26,011)— (26,011)
Stock-based compensation charges279,242 3 3,955 — — — 3,958 — 3,958 
Distributions to noncontrolling interests— — — — — — — (59)(59)
Balance March 31, 2022 (unaudited)127,591,227 $1,276 $178,243 $1,814,482 $18,179 $(1,352,291)$659,889 $65 $659,954 
Balance December 31, 2020127,009,536 $1,270 $153,800 $1,549,950 $8,198 $(1,095,452)$617,766 $2 $617,768 
Net income— — — 69,749 — — 69,749 66 69,815 
Dividends declared ($0.21 per share)
— — — (20,173)— — (20,173)— (20,173)
Currency translation adjustments— — — — 8,001 — 8,001 — 8,001 
Derivative financial instruments— — — — (578)— (578)— (578)
Defined benefit obligations— — — — 580 — 580 — 580 
Available-for-sale investments— — — — 89 — 89 — 89 
Exercises of stock options61,260 — 1,517 — — — 1,517 — 1,517 
Shares placed in treasury— — — — — (24,694)(24,694)— (24,694)
Stock-based compensation charges191,350 3 3,978 — — — 3,981 — 3,981 
Distributions to noncontrolling interests— — — — — — — — — 
Balance March 31, 2021 (unaudited)127,262,146 $1,273 $159,295 $1,599,526 $16,290 $(1,120,146)$656,238 $68 $656,306 
See accompanying notes to condensed consolidated financial statements.
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BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31,
 20222021
 (Unaudited) (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income$59,074 $69,815 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization17,620 15,897 
Income of investees, net of dividends(2,975)(2,414)
Recognition of losses for pension and postretirement plans814 737 
Stock-based compensation expense3,958 3,981 
Other, net1,413 1,168 
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable11,765 96,449 
Accounts payable(33,490)(12,623)
Retainages(26,148)(26,475)
Contracts in progress and advance billings on contracts(18,014)(29,541)
Income taxes11,958 17,134 
Accrued and other current liabilities(5,283)1,751 
Pension liabilities, accrued postretirement benefit obligations and employee benefits(25,714)(42,584)
Other, net(362)5,119 
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES(5,384)98,414 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment(52,411)(101,932)
Purchases of securities(1,121)(1,384)
Sales and maturities of securities1,126 1,252 
Investments in equity method investees(13,600) 
Other, net79 32 
NET CASH USED IN INVESTING ACTIVITIES(65,927)(102,032)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt145,300 205,800 
Repayments of long-term debt(35,300)(50,800)
Repayment of bank overdraft (88,694)
Repurchases of common stock(20,000)(20,007)
Dividends paid to common shareholders(20,666)(20,322)
Exercises of stock options 1,672 
Cash paid for shares withheld to satisfy employee taxes(6,011)(4,687)
Other, net(2,749)(3,680)
NET CASH PROVIDED BY FINANCING ACTIVITIES60,574 19,282 
EFFECTS OF EXCHANGE RATE CHANGES ON CASH277 (542)
TOTAL (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS
(10,460)15,122 
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD39,775 48,298 
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS AT END OF PERIOD$29,315 $63,420 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest$1,900 $11,438 
Income taxes (net of refunds)$6,283 $4,386 
SCHEDULE OF NON-CASH INVESTING ACTIVITY:
Accrued capital expenditures included in accounts payable$11,785 $25,849 
See accompanying notes to condensed consolidated financial statements.
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BWX TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2022
(UNAUDITED)
NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
We have presented the condensed consolidated financial statements of BWX Technologies, Inc. ("BWXT" or the "Company") in U.S. dollars in accordance with the interim reporting requirements of Form 10-Q, Rule 10-01 of Regulation S-X and accounting principles generally accepted in the United States ("GAAP"). Certain financial information and disclosures normally included in our financial statements prepared annually in accordance with GAAP have been condensed or omitted. Readers of these financial statements should, therefore, refer to the consolidated financial statements and notes in our annual report on Form 10-K for the year ended December 31, 2021 (our "2021 10-K"). We have included all adjustments, in the opinion of management, consisting only of normal recurring adjustments, necessary for a fair presentation.
We use the equity method to account for investments in entities that we do not control, but over which we have the ability to exercise significant influence. We generally refer to these entities as "joint ventures." We have eliminated all intercompany transactions and accounts. We present the notes to our condensed consolidated financial statements on the basis of continuing operations, unless otherwise stated.
Unless the context otherwise indicates, "we," "us" and "our" mean BWXT and its consolidated subsidiaries.
Reportable Segments
We operate in two reportable segments: Government Operations and Commercial Operations. Our reportable segments reflect changes we made during the first quarter of 2022 to better align our businesses by their government and commercial nature, which reflects the manner in which our operating segment information is reported for purposes of assessing operating performance and allocating resources. Prior to 2022, we reported three segments: Nuclear Operations Group, Nuclear Power Group and Nuclear Services Group.
Our Government Operations segment consists of our legacy Nuclear Operations Group and Nuclear Services Group segments with certain research and development activities in the areas of advanced reactors and advanced manufacturing. Our Commercial Operations segment consists of our legacy Nuclear Power Group segment with certain research and development and commercialization activities in the areas of medical and industrial radioisotopes. Both segments now include research and development and certain commercialization activities associated with new technologies previously reported centrally, outside of our reportable segments. The change in our reportable segments had no impact on our previously reported consolidated results of operations, financial condition or cash flows. We have applied the change in reportable segments to previously reported historical financial information and related disclosures included in this quarterly report on Form 10-Q. Our reportable segments are further described as follows:
Our Government Operations segment manufactures naval nuclear reactors, including the related nuclear fuel, for the U.S. Naval Nuclear Propulsion Program for use in submarines and aircraft carriers. Through this segment, we also fabricate fuel-bearing precision components that range in weight from a few grams to hundreds of tons, manufacture electro-mechanical equipment, perform design, manufacturing, inspection, assembly and testing activities and downblend Cold War-era government stockpiles of high-enriched uranium. In-house capabilities also include wet chemistry uranium processing, advanced heat treatment to optimize component material properties and a controlled, clean-room environment with the capacity to assemble railcar-size components. This segment also provides various other services, primarily through joint ventures, to the U.S. Government including 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, the Office of Nuclear Energy, the Office of Science and the Office of Environmental Management, and NASA. In addition, 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 Commercial Operations segment fabricates commercial nuclear steam generators, nuclear fuel, fuel handling systems, pressure vessels, reactor components, heat exchangers, tooling delivery systems and other auxiliary equipment, including containers for the storage of spent nuclear fuel and other high-level waste and supplies nuclear-grade materials and precisely machined components for nuclear utility customers. We have supplied the nuclear industry with more than 1,300 large, heavy components worldwide and is the only commercial heavy nuclear
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component manufacturer in North America. This segment also provides specialized engineering services that include structural component design, 3-D thermal-hydraulic engineering analysis, weld and robotic process development, electrical and controls engineering and metallurgy and materials engineering. In addition, this segment offers in-plant inspection, maintenance and modification services for nuclear steam generators, heat exchangers, reactors, fuel handling systems and balance of plant equipment, as well as specialized non-destructive examination and tooling/repair solutions. This segment is also a leading global manufacturer and supplier of critical medical radioisotopes and radiopharmaceuticals for research, diagnostic and therapeutic uses.
See Note 8 and Note 3 for financial information about our segments. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. For further information, refer to the consolidated financial statements and notes included in our 2021 10-K.
Recently Adopted Accounting Standards
There were no accounting standards adopted during the three months ended March 31, 2022.
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 Commercial Operations segment. For all contracts, if a current estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full when determined.
Provision for Income Taxes
We are subject to federal income tax in the U.S. and Canada as well as income tax within multiple U.S. state jurisdictions. We provide for income taxes based on the enacted tax laws and rates in the jurisdictions in which we conduct our operations. These jurisdictions may have regimes of taxation that vary with respect to nominal rates and with respect to the basis on which these rates are applied. This variation, along with the changes in our mix of income within these jurisdictions, can contribute to shifts in our effective tax rate from period to period.
Our effective tax rate for the three months ended March 31, 2022 was 23.7% as compared to 24.0% for the three months ended March 31, 2021. The effective tax rates for the three months ended March 31, 2022 and 2021 were 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.
Cash and Cash Equivalents and Restricted Cash and Cash Equivalents
At March 31, 2022, we had restricted cash and cash equivalents totaling $5.7 million, $2.8 million of which was held for future decommissioning of facilities (which is included in Other Assets on our condensed consolidated balance sheets) and $2.9 million of which was held to meet reinsurance reserve requirements of our captive insurer.
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The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents on our condensed consolidated balance sheets to the totals presented on our condensed consolidated statement of cash flows:
March 31,
2022
December 31,
2021
 (In thousands)
Cash and cash equivalents$23,635 $33,891 
Restricted cash and cash equivalents2,896 2,896 
Restricted cash and cash equivalents included in Other Assets2,784 2,988 
Total cash and cash equivalents and restricted cash and cash equivalents as presented on our condensed consolidated statement of cash flows
$29,315 $39,775 
Inventories
At March 31, 2022 and December 31, 2021, Other current assets included inventories totaling $16.6 million and $16.3 million, respectively, consisting entirely of raw materials and supplies.
Property, Plant and Equipment, Net
Property, plant and equipment, net is stated at cost and is set forth below:
 March 31,
2022
December 31,
2021
 (In thousands)
Land$9,693 $9,538 
Buildings323,416 321,872 
Machinery and equipment972,263 957,423 
Property under construction512,089 487,856 
1,817,461 1,776,689 
Less: Accumulated depreciation746,096 731,049 
Property, Plant and Equipment, Net$1,071,365 $1,045,640 
Accumulated Other Comprehensive Income (Loss)
The components of Accumulated other comprehensive income (loss) included in Stockholders' Equity are as follows:
March 31,
2022
December 31,
2021
 (In thousands)
Currency translation adjustments$35,992 $30,627 
Net unrealized loss on derivative financial instruments(650)(694)
Unrecognized prior service cost on benefit obligations(17,371)(18,022)
Net unrealized gain on available-for-sale investments208 232 
Accumulated other comprehensive income (loss)$18,179 $12,143 
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The amounts reclassified out of Accumulated other comprehensive income (loss) by component and the affected condensed consolidated statements of income line items are as follows:
 Three Months Ended
March 31,
 
 20222021 
Accumulated Other Comprehensive Income (Loss) Component Recognized
(In thousands)Line Item Presented
Realized gain (loss) on derivative financial instruments
$89 $227 Revenues
(293)(5)Cost of operations
(204)222 Total before tax
52 (56)Provision for Income Taxes
$(152)$166 Net Income
Amortization of prior service cost on benefit obligations
$(814)$(737)Other – net
163 157 Provision for Income Taxes
$(651)$(580)Net Income
Total reclassification for the period
$(803)$(414)
Derivative Financial Instruments
Our operations give rise to exposure to market risks from changes in foreign currency exchange ("FX") rates. We use derivative financial instruments, primarily FX forward contracts, to reduce the impact of changes in FX rates on our operating results. We use these instruments to hedge our exposure associated with revenues or costs on our long-term contracts and other transactions that are denominated in currencies other than our operating entities' functional currencies. We do not hold or issue derivative financial instruments for trading or other speculative purposes.
We enter into derivative financial instruments primarily as hedges of certain firm purchase and sale commitments and loans between domestic and foreign subsidiaries denominated in foreign currencies. We record these contracts at fair value on our condensed consolidated balance sheets. Based on the hedge designation at the inception of the contract, the related gains and losses on these contracts are deferred in stockholders' equity as a component of Accumulated other comprehensive income until the hedged item is recognized in earnings. The gain or loss on a derivative instrument not designated as a hedging instrument is immediately recognized in earnings. Gains and losses on derivative financial instruments that require immediate recognition are included as a component of Other – net on our condensed consolidated statements of income.
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 March 31, 2022, we had deferred approximately $0.7 million of net losses on these derivative financial instruments. Assuming market conditions continue, we expect to recognize the majority of this amount in the next 12 months. For the three months ended March 31, 2022 and 2021, we recognized (gains) losses of $7.9 million and $3.6 million, respectively, in Other – net on our condensed consolidated statements of income associated with FX forward contracts not designated as hedging instruments.
At March 31, 2022, our derivative financial instruments consisted of FX forward contracts with a total notional value of $413.9 million with maturities extending to December 2024. 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.
NOTE 2 – ACQUISITIONS
Dynamic Controls Limited and Citadel Capital Corporation
On April 11, 2022, our subsidiary BWXT Government Group, Inc. acquired all of the outstanding stock of U.K.-based Dynamic Controls Limited ("Dynamic") and U.S.-based Citadel Capital Corporation, along with its wholly-owned subsidiary, Cunico Corporation ("Cunico"), for approximately $49.9 million. Dynamic and Cunico are suppliers of highly-engineered,
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proprietary valves, manifolds and fittings for global naval nuclear and diesel-electric submarines, surface warfare ships and commercial shipping vessels. These companies will be reported as part of our Government Operations segment.
NOTE 3 – REVENUE RECOGNITION
As described in Note 1, our operations are assessed based on two reportable segments. In connection with our segment reporting change, we have revised historical amounts to conform to current segment presentation.
Disaggregated Revenues
Revenues by geographic area and customer type were as follows:
 Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Government OperationsCommercial OperationsTotalGovernment OperationsCommercial OperationsTotal
 (In thousands)
United States:
Government$406,247 $ $406,247 $398,624 $ $398,624 
Non-Government23,558 7,214 30,772 21,446 10,272 31,718 
$429,805 $7,214 $437,019 $420,070 $10,272 $430,342 
Canada:
Non-Government$978 $90,398 $91,376 $1,020 $91,355 $92,375 
Other:
Non-Government$994 $2,338 $3,332 $2,185 $5,771 $7,956 
Segment Revenues$431,777 $99,950 531,727 $423,275 $107,398 530,673 
Eliminations(989)(2,400)
Revenues$530,738 $528,273 
Revenues by timing of transfer of goods or services were as follows:
 Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Government OperationsCommercial OperationsTotalGovernment OperationsCommercial OperationsTotal
 (In thousands)
Over time$431,749 $85,915 $517,664 $423,250 $93,887 $517,137 
Point-in-time28 14,035 14,063 25 13,511 13,536 
Segment Revenues$431,777 $99,950 531,727 $423,275 $107,398 530,673 
Eliminations(989)(2,400)
Revenues$530,738 $528,273 
Revenues by contract type were as follows:
 Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Government OperationsCommercial OperationsTotalGovernment OperationsCommercial OperationsTotal
 (In thousands)
Fixed-Price Incentive Fee$301,425 $2,547 $303,972 $302,326 $490 $302,816 
Firm-Fixed-Price83,566 77,982 161,548 80,257 68,057 148,314 
Cost-Plus Fee45,518  45,518 38,815  38,815 
Time-and-Materials1,268 19,421 20,689 1,877 38,851 40,728 
Segment Revenues$431,777 $99,950 531,727 $423,275 $107,398 530,673 
Eliminations(989)(2,400)
Revenues$530,738 $528,273 
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Performance Obligations
As we progress on our contracts and the underlying performance obligations for which we recognize revenue over time, we refine our estimates of variable consideration and total estimated costs at completion, which impact the overall profitability on our contracts and performance obligations. Changes in these estimates result in the recognition of cumulative catch-up adjustments that impact our revenues and/or costs of contracts. During the three months ended March 31, 2022 and 2021, we recognized net favorable changes in estimates that resulted in increases (decreases) in revenues of $(5.2) million and $6.5 million, respectively.
Contract Assets and Liabilities
We include revenues and related costs incurred, plus accumulated contract costs that exceed amounts invoiced to customers under the terms of the contracts, in Contracts in progress. We include in Advance billings on contracts billings that exceed accumulated contract costs and revenues 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 receivables. Changes in Contracts in progress and Advance billings on contracts are primarily driven by differences in the timing of revenue recognition and billings to our customers. During the three months ended March 31, 2022, our unbilled receivables increased $11.8 million primarily as a result of the timing of milestone billings on certain firm-fixed-price and time and materials contracts within our Commercial Operations segment partially offset by the timing of milestone billings on fixed price incentive fee contracts within our Government Operations segment. During the three months ended March 31, 2022, our Advance billings on contracts decreased $5.9 million primarily as a result of revenues in excess of billings on certain firm-fixed-price contracts within our Government Operations segment. Our fixed-price incentive fee contracts for our Government Operations segment include provisions that result in an increase in retainages on contracts during the first and third quarters of the year, with larger payments received 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.
 March 31,December 31,
 20222021
 (In thousands)
Included in Contracts in progress:
Unbilled receivables$540,397 $528,644 
Retainages$77,804 $51,507 
Included in Other Assets:
Retainages$1,132 $1,271 
Advance billings on contracts$105,687 $111,619 
During the three months ended March 31, 2022 and 2021, we recognized $38.7 million and $30.0 million, respectively, of revenues that were in Advance billings on contracts at the beginning of each year.
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. At March 31, 2022, our remaining performance obligations were $4,906.4 million. We expect to recognize approximately 54% of the revenue associated with our remaining performance obligations by the end of 2023, with the remainder to be recognized thereafter.
NOTE 4 – PENSION PLANS AND POSTRETIREMENT BENEFITS
We record the service cost component of net periodic benefit cost within Operating income on our condensed consolidated statements of income. For the three months ended March 31, 2022 and 2021, these amounts were $3.1 million and $3.1 million, respectively. All other components of net periodic benefit cost are included in Other – net within the condensed
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consolidated statements of income. For the three months ended March 31, 2022 and 2021, these amounts were $(12.6) million and $(13.4) million, respectively. Components of net periodic benefit cost included in net income were as follows:
 Pension BenefitsOther Benefits
Three Months Ended
March 31,
Three Months Ended
March 31,
 2022202120222021
 (In thousands)
Service cost$2,917 $2,957 $165 $190 
Interest cost7,821 6,754 347 282 
Expected return on plan assets
(20,868)(20,414)(738)(716)
Amortization of prior service cost (credit)
807 782 7 (45)
Net periodic benefit income$(9,323)$(9,921)$(219)$(289)
NOTE 5 – COMMITMENTS AND CONTINGENCIES
There were no material contingencies during the period covered by this Form 10-Q.
NOTE 6 – FAIR VALUE MEASUREMENTS
Investments
The following is a summary of our investments measured at fair value at March 31, 2022:
TotalLevel 1Level 2Level 3Unclassified
 (In thousands)
Equity securities