Company: BWXT
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001486957-25-000026
Chunk: 21

Company: BWX Technologies, Inc.
Filing Date: 2025-05-05
Form: 10-Q
Item: Part I, Item 1
Chunk 21
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 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 and are recorded in our condensed consolidated statements of cash flows based on the nature and use of the instruments.We have designated the majority of our FX forward contracts that qualify for hedge accounting as cash flow hedges. 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, 2025, we had deferred approximately $1.0 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 12 months. For the three months ended March 31, 2025 and 2024, we recognized gains of $1.7 million and $9.7 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, 2025, our derivative financial instruments consisted of FX forward contracts with a total notional value of $388.3 million with maturities extending to July 2026. 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 and Disclosure StandardsIn December 2023, the FASB issued updates to Topic Income Taxes to provide, on an annual basis, disaggregated

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disclosures with respect to the reconciliation of our effective tax rate, as well as a disaggregation of income taxes paid, net ofrefunds received. The new standard is effective on a prospective basis for annual periods beginning after December 15, 2024. We are currently evaluating the impact of the adoption of this standard and expect that it will only require changes to our disclosures with no impact on our results of operations, financial position or cash flows.In November 2024, the FASB issued updates