Attached files
| file | filename |
|---|---|
| 8-K - 8-K - BWX Technologies, Inc. | d60804d8k.htm |
| EX-10.1 - EX-10.1 - BWX Technologies, Inc. | d60804dex101.htm |
Exhibit 99.1
BWX TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On June 30, 2015, The Babcock & Wilcox Company (“B&W” or the “Company”) completed the separation of its Power Generation business (with related captive insurance operations which were contributed by B&W) from its Government and Nuclear Operations business into two publicly traded companies through a spin-off. After the spin-off, the Power Generation business is now called Babcock & Wilcox Enterprises, Inc. (“BW”), and on June 30, 2015 the Company changed its name to BWX Technologies, Inc. (“BWXT”).
The following unaudited pro forma condensed consolidated balance sheet as of March 31, 2015 and the unaudited pro forma condensed consolidated statements of income for the three months ended March 31, 2015 and the years ended December 31, 2014, 2013 and 2012, have been derived from the historical financial statements of the Company (“we”, “us” or “our”) as if the disposal of BW occurred as of January 1, 2012. The unaudited pro forma condensed consolidated balance sheet as of March 31, 2015 reflects our results as if the separation and related transactions described above had occurred as of such date.
Due to the spin-off of BW, when the Company issues financial statements beginning with the period ending June 30, 2015 and for the year ending December 31, 2015, the historical results of BW will be reclassified as discontinued operations in accordance with Financial Accounting Standards Board Codification Topic 205-20, Presentation of Financial Statements – Discontinued Operations.
The pro forma adjustments include assumptions that management believes are reasonable. The pro forma adjustments may differ from the adjustments that will be calculated to report the BW business as discontinued operations in our future filings.
These unaudited pro forma condensed consolidated financial statements set forth below are based on available information and assumptions that we believe are factually supportable and are presented for illustrative purposes only. These unaudited pro forma condensed consolidated financial statements are not necessarily indicative of the operating results or the financial position that would have been achieved had the spin-off of BW been completed as of the dates indicated or of the results that may be obtained in the future. These unaudited pro forma condensed consolidated financial statements and the accompanying unaudited notes should be read together with our annual report on Form 10-K for the year ended December 31, 2014 and our quarterly report on Form 10-Q for the quarter ended March 31, 2015.
The unaudited pro forma condensed consolidated financial statements are not necessarily indicative of our future performance or what our results of operations and financial position would have been if we had operated as an independent public company during the periods presented or if the transactions reflected in the pro forma adjustments had actually occurred as of the dates assumed. The unaudited pro forma condensed consolidated financial statements also do not reflect any significant changes that may occur after the spin-off.
BWX TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2015
| Historical BWXT |
Distribution of BW (a) |
Other (e) | BWXT Pro Forma |
|||||||||||||
| (in thousands) | ||||||||||||||||
| ASSETS | ||||||||||||||||
| Current Assets: |
||||||||||||||||
| Cash and cash equivalents |
$ | 274,394 | $ | (216,096 | ) | $ | — | $ | 58,298 | |||||||
| Restricted cash and cash equivalents |
50,670 | (24,097 | ) | — | 26,573 | |||||||||||
| Investments |
10,469 | (5,757 | ) | — | 4,712 | |||||||||||
| Accounts receivable – trade, net |
404,941 | (240,685 | ) | — | 164,256 | |||||||||||
| Accounts receivable – other |
51,448 | (44,204 | ) | — | 7,244 | |||||||||||
| Contracts in progress |
395,542 | (102,925 | ) | — | 292,617 | |||||||||||
| Inventories |
109,659 | (97,499 | ) | — | 12,160 | |||||||||||
| Deferred income taxes |
73,892 | (33,205 | ) | — | 40,687 | |||||||||||
| Other current assets |
49,820 | (13,478 | ) | — | 36,342 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Current Assets |
1,420,835 | (777,946 | ) | — | 642,889 | |||||||||||
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|
|
|
|
|
|
|
|
|||||||||
| Property, Plant and Equipment |
1,171,347 | (333,500 | ) | — | 837,847 | |||||||||||
| Less accumulated depreciation |
742,704 | (191,157 | ) | — | 551,547 | |||||||||||
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|
|
|
|
|
|
|
|
|||||||||
| Net Property, Plant and Equipment |
428,643 | (142,343 | ) | — | 286,300 | |||||||||||
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|
|
|
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|
|||||||||
| Investments |
8,263 | (208 | ) | — | 8,055 | |||||||||||
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|
|||||||||
| Goodwill |
376,478 | (206,564 | ) | — | 169,914 | |||||||||||
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|||||||||
| Deferred Income Taxes |
250,221 | (127,032 | ) | — | 123,189 | |||||||||||
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|||||||||
| Investments in Unconsolidated Affiliates |
133,691 | (101,103 | ) | — | 32,588 | |||||||||||
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|||||||||
| Intangible Assets |
105,573 | (45,821 | ) | — | 59,752 | |||||||||||
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| Other Assets |
68,430 | (21,882 | ) | — | 46,548 | |||||||||||
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|
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|
|||||||||
| TOTAL |
$ | 2,792,134 | $ | (1,422,899 | ) | $ | — | $ | 1,369,235 | |||||||
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See accompanying noted to unaudited pro forma condensed consolidated financial statements.
BWX TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2015
| Historical BWXT |
Distribution of BW (a) |
Other (e) | BWXT Pro Forma |
|||||||||||||
| (in thousands) | ||||||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
| Current Liabilities: |
||||||||||||||||
| Notes payable and current maturities of long-term debt |
$ | 18,219 | $ | (3,219 | ) | $ | — | $ | 15,000 | |||||||
| Accounts payable |
199,349 | (135,869 | ) | — | 63,480 | |||||||||||
| Accrued employee benefits |
86,673 | (33,730 | ) | — | 52,943 | |||||||||||
| Accrued liabilities – other |
101,512 | (53,575 | ) | — | 47,937 | |||||||||||
| Advance billings on contracts |
254,844 | (174,654 | ) | — | 80,190 | |||||||||||
| Accrued warranty expense |
53,722 | (38,025 | ) | — | 15,697 | |||||||||||
| Income taxes payable |
19,421 | (11,521 | ) | — | 7,900 | |||||||||||
| BW closing contribution |
— | — | 102,000 | 102,000 | ||||||||||||
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|||||||||
| Total Current Liabilities |
733,740 | (450,593 | ) | 102,000 | 385,147 | |||||||||||
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|||||||||
| Long-term Debt |
281,250 | — | 30,000 | 311,250 | ||||||||||||
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|||||||||
| Accumulated Postretirement Benefit Obligation |
56,939 | (27,519 | ) | — | 29,420 | |||||||||||
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|
|||||||||
| Environmental Liabilities |
56,548 | — | — | 56,548 | ||||||||||||
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| Pension Liability |
558,763 | (250,638 | ) | — | 308,125 | |||||||||||
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|||||||||
| Other Liabilities |
57,970 | (39,380 | ) | — | 18,590 | |||||||||||
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| Commitments and Contingencies |
||||||||||||||||
| Stockholders’ Equity: |
||||||||||||||||
| Stockholders’ equity |
1,036,622 | (664,678 | ) | (132,000 | ) | 239,944 | ||||||||||
| Accumulated other comprehensive income |
(4,896 | ) | 11,005 | — | 6,109 | |||||||||||
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|||||||||
| Stockholders’ Equity – BWX Technologies, Inc. |
1,031,726 | (653,673 | ) | (132,000 | ) | 246,053 | ||||||||||
| Noncontrolling interest |
15,198 | (1,096 | ) | — | 14,102 | |||||||||||
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| Total Stockholders’ Equity |
1,046,924 | (654,769 | ) | (132,000 | ) | 260,155 | ||||||||||
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| TOTAL |
$ | 2,792,134 | $ | (1,422,899 | ) | $ | — | $ | 1,369,235 | |||||||
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See accompanying noted to unaudited pro forma condensed consolidated financial statements.
BWX TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2015
| Historical BWXT |
Pro Forma Adjustments (b) |
BWXT Pro Forma |
||||||||||
| (in thousands, except share and per share amounts) | ||||||||||||
| Revenues |
$ | 730,565 | $ | (395,079 | ) | $ | 335,486 | |||||
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|
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| Costs and Expenses: |
||||||||||||
| Cost of operations |
539,921 | (312,282 | ) | 227,639 | ||||||||
| Research and development costs |
8,346 | (4,518 | ) | 3,828 | ||||||||
| Losses (Gains) on asset disposals and impairments, net |
15 | (18 | ) | (3 | ) | |||||||
| Selling, general and administrative expenses |
103,707 | (53,281 | ) | 50,426 | ||||||||
| Special charges for restructuring activities |
2,502 | (2,354 | ) | 148 | ||||||||
| Costs to spin-off BW |
5,044 | (3,527 | ) (c) | 1,517 | ||||||||
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| Total Costs and Expenses |
659,535 | (375,980 | ) | 283,555 | ||||||||
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| Equity in Income (Loss) of Investees |
(219 | ) | 2,071 | 1,852 | ||||||||
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| Operating Income |
70,811 | (17,028 | ) | 53,783 | ||||||||
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| Other Income (Expense): |
||||||||||||
| Interest income |
174 | (148 | ) | 26 | ||||||||
| Interest expense |
(2,363 | ) | 140 | (2,223 | ) | |||||||
| Other – net |
(1,715 | ) | 311 | (1,404 | ) | |||||||
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| Total Other Income (Expense): |
(3,904 | ) | 303 | (3,601 | ) | |||||||
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| Income before Provision for (Benefit from) Income Taxes |
66,907 | (16,725 | ) | 50,182 | ||||||||
| Provision for (Benefit from) Income Taxes |
21,866 | (5,649 | ) (d) | 16,217 | ||||||||
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| Net Income |
$ | 45,041 | $ | (11,076 | ) | $ | 33,965 | |||||
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| Net Income Attributable to Noncontrolling Interest |
216 | 52 | 268 | |||||||||
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| Net Income Attributable to BWX Technologies, Inc. |
$ | 45,257 | $ | (11,024 | ) | $ | 34,233 | |||||
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| Earnings per common Share: |
||||||||||||
| Basic: |
||||||||||||
| Net Income Attributable to BWX Technologies, Inc. |
$ | 0.42 | $ | 0.32 | ||||||||
| Diluted: |
||||||||||||
| Net Income Attributable to BWX Technologies, Inc. |
$ | 0.42 | $ | 0.32 | ||||||||
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|||||||||
| Shares in Used in the Computation of Earnings per Share: |
||||||||||||
| Basic |
106,775,916 | 106,775,916 | ||||||||||
| Diluted |
107,146,494 | 107,146,494 | ||||||||||
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See accompanying noted to unaudited pro forma condensed consolidated financial statements.
BWX TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2014
| Historical BWXT |
Pro Forma Adjustments (b) |
BWXT Pro Forma |
||||||||||
| (in thousands, except share and per share amounts) | ||||||||||||
| Revenues |
$ | 2,923,019 | $ | (1,472,409 | ) | $ | 1,450,610 | |||||
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| Costs and Expenses: |
||||||||||||
| Cost of operations |
2,409,376 | (1,256,342 | ) | 1,153,034 | ||||||||
| Research and development costs |
73,234 | (18,483 | ) | 54,751 | ||||||||
| Losses (Gains) on asset disposals and impairments, net |
1,081 | (1,752 | ) | (671 | ) | |||||||
| Selling, general and administrative expenses |
436,552 | (206,175 | ) | 230,377 | ||||||||
| Special charges for restructuring activities |
41,091 | (20,183 | ) | 20,908 | ||||||||
| Costs to spin-off BW |
6,063 | (5,902 | ) (c) | 161 | ||||||||
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| Total Costs and Expenses |
2,967,397 | (1,508,837 | ) | 1,458,560 | ||||||||
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| Equity in Income of Investees |
41,756 | (8,681 | ) | 33,075 | ||||||||
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| Operating Income (Loss) |
(2,622 | ) | 27,747 | 25,125 | ||||||||
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| Other Income (Expense): |
||||||||||||
| Interest income |
1,028 | (795 | ) | 233 | ||||||||
| Interest expense |
(7,579 | ) | 492 | (7,087 | ) | |||||||
| Other – net |
14,639 | (775 | ) | 13,864 | ||||||||
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| Total Other Income (Expense): |
8,088 | (1,078 | ) | 7,010 | ||||||||
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| Income before Provision for (Benefit from) Income Taxes |
5,466 | 26,669 | 32,135 | |||||||||
| Provision for (Benefit from) Income Taxes |
(15,991 | ) | 17,682 | (d) | 1,691 | |||||||
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| Net Income |
$ | 21,457 | $ | 8,987 | $ | 30,444 | ||||||
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| Net Income Attributable to Noncontrolling Interest |
7,931 | 365 | 8,296 | |||||||||
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| Net Income Attributable to BWX Technologies, Inc. |
$ | 29,388 | $ | 9,352 | $ | 38,740 | ||||||
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| Earnings per common Share: |
||||||||||||
| Basic: |
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| Net Income Attributable to BWX Technologies, Inc. |
$ | 0.27 | $ | 0.36 | ||||||||
| Diluted: |
||||||||||||
| Net Income Attributable to BWX Technologies, Inc. |
$ | 0.27 | $ | 0.36 | ||||||||
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| Shares in Used in the Computation of Earnings per Share: |
||||||||||||
| Basic |
108,477,262 | 108,477,262 | ||||||||||
| Diluted |
108,761,092 | 108,761,092 | ||||||||||
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See accompanying noted to unaudited pro forma condensed consolidated financial statements.
BWX TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2013
| Historical BWXT |
Pro Forma Adjustments (b) |
BWXT Pro Forma |
||||||||||
| (in thousands, except share and per share amounts) | ||||||||||||
| Revenues |
$ | 3,269,208 | $ | (1,722,545 | ) | $ | 1,546,663 | |||||
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| Costs and Expenses: |
||||||||||||
| Cost of operations |
2,301,648 | (1,289,256 | ) | 1,012,392 | ||||||||
| Research and development costs |
79,226 | (21,043 | ) | 58,183 | ||||||||
| Losses (Gains) on asset disposals and impairments, net |
1,049 | (1,181 | ) | (132 | ) | |||||||
| Selling, general and administrative expenses |
379,382 | (181,658 | ) | 197,724 | ||||||||
| Special charges for restructuring activities |
39,599 | (18,343 | ) | 21,256 | ||||||||
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| Total Costs and Expenses |
2,800,904 | (1,511,481 | ) | 1,289,423 | ||||||||
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| Equity in Income of Investees |
68,058 | (18,387 | ) | 49,671 | ||||||||
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| Operating Income |
536,362 | (229,451 | ) | 306,911 | ||||||||
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| Other Income (Expense): |
||||||||||||
| Interest income |
1,443 | (1,228 | ) | 215 | ||||||||
| Interest expense |
(3,115 | ) | 462 | (2,653 | ) | |||||||
| Other – net |
(17,517 | ) | (1,444 | ) | (18,961 | ) | ||||||
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| Total Other Income (Expense): |
(19,189 | ) | (2,210 | ) | (21,399 | ) | ||||||
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|||||||
| Income before Provision for (Benefit from) Income Taxes |
517,173 | (231,661 | ) | 285,512 | ||||||||
| Provision for (Benefit from) Income Taxes |
184,583 | (83,784 | ) (d) | 100,799 | ||||||||
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| Net Income |
$ | 332,590 | $ | (147,877 | ) | $ | 184,713 | |||||
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| Net Income Attributable to Noncontrolling Interest |
13,488 | 289 | 13,777 | |||||||||
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| Net Income Attributable to BWX Technologies, Inc. |
$ | 346,078 | $ | (147,588 | ) | $ | 198,490 | |||||
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| Earnings per common Share: |
||||||||||||
| Basic: |
||||||||||||
| Net Income Attributable to BWX Technologies, Inc. |
$ | 3.09 | $ | 1.77 | ||||||||
| Diluted: |
||||||||||||
| Net Income Attributable to BWX Technologies, Inc. |
$ | 3.07 | $ | 1.76 | ||||||||
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|||||||||
| Shares in Used in the Computation of Earnings per Share: |
||||||||||||
| Basic |
111,901,750 | 111,901,750 | ||||||||||
| Diluted |
112,685,417 | 112,685,417 | ||||||||||
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See accompanying noted to unaudited pro forma condensed consolidated financial statements.
BWX TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2012
| Historical BWXT |
Pro Forma Adjustments (b) |
BWXT Pro Forma |
||||||||||
| (in thousands, except share and per share amounts) | ||||||||||||
| Revenues |
$ | 3,291,359 | $ | (1,768,495 | ) | $ | 1,522,864 | |||||
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|
|||||||
| Costs and Expenses: |
||||||||||||
| Cost of operations |
2,461,205 | (1,378,384 | ) | 1,082,821 | ||||||||
| Research and development costs |
120,562 | (22,952 | ) | 97,610 | ||||||||
| Losses (Gains) on asset disposals and impairments, net |
1,419 | (3,276 | ) | (1,857 | ) | |||||||
| Selling, general and administrative expenses |
428,293 | (206,391 | ) | 221,902 | ||||||||
| Special charges for restructuring activities |
— | — | — | |||||||||
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|
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| Total Costs and Expenses |
3,011,479 | (1,611,003 | ) | 1,400,476 | ||||||||
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|
|||||||
| Equity in Income of Investees |
66,709 | (17,402 | ) | 49,307 | ||||||||
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|
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| Operating Income |
346,589 | (174,894 | ) | 171,695 | ||||||||
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|
|||||||
| Other Income (Expense): |
||||||||||||
| Interest income |
1,491 | (1,391 | ) | 100 | ||||||||
| Interest expense |
(3,735 | ) | 563 | (3,172 | ) | |||||||
| Other – net |
(24,927 | ) | 1,994 | (22,933 | ) | |||||||
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|
|||||||
| Total Other Income (Expense): |
(27,171 | ) | 1,166 | (26,005 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Income before Provision for (Benefit from) Income Taxes |
319,418 | (173,728 | ) | 145,690 | ||||||||
| Provision for (Benefit from) Income Taxes |
101,861 | (58,474 | ) (d) | 43,387 | ||||||||
|
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|
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|
|||||||
| Net Income |
$ | 217,557 | $ | (115,254 | ) | $ | 102,303 | |||||
|
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|
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|
|||||||
| Net Income Attributable to Noncontrolling Interest |
10,138 | 141 | 10,279 | |||||||||
|
|
|
|
|
|
|
|||||||
| Net Income Attributable to BWX Technologies, Inc. |
$ | 227,695 | $ | (115,113 | ) | $ | 112,582 | |||||
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|
|||||||
| Earnings per common Share: |
||||||||||||
| Basic: |
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| Net Income Attributable to BWX Technologies, Inc. |
$ | 1.92 | $ | 0.95 | ||||||||
| Diluted: |
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| Net Income Attributable to BWX Technologies, Inc. |
$ | 1.91 | $ | 0.95 | ||||||||
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| Shares in Used in the Computation of Earnings per Share: |
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| Basic |
118,418,930 | 118,418,930 | ||||||||||
| Diluted |
119,021,324 | 119,021,324 | ||||||||||
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See accompanying noted to unaudited pro forma condensed consolidated financial statements.
BWX TECHNOLOGIES, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| (a) | Reflects the pro forma elimination of the assets, liabilities and equity associated with the Company’s former Power Generation business combined with related captive insurance operations which were contributed by us in conjunction with the spin-off, which are included in our historical condensed consolidated balance sheet. |
| (b) | Reflects the pro forma elimination of the operating results of the Company’s former Power Generation business. Selling, general and administrative expenses exclude general corporate overhead expenses that were allocated to the Power Generation operations that are not specifically identifiable as costs of the Power Generation business. Such general corporate overhead expenses do not meet the criteria to be presented in discontinued operations and thus will be presented as part of BWXT’s continuing operations. |
| (c) | Reflects the pro forma elimination, from continuing operations, of costs directly attributable to the spin-off, consisting primarily of fees for professional services. |
| (d) | Reflects the pro forma adjustment to income tax expense or benefit that has been allocated between continuing operations and discontinued operations in accordance with the intra-period allocation rules of Financial Accounting Standards Board Codification Topic 740-20, Income Taxes. This includes allocating to continuing operations the tax effects for changes in tax laws or rates, changes in tax status and changes in circumstances that may cause a change in judgment about the realization of deferred tax assets in future years. |
| (e) | Reflects the pro forma borrowings under BWXT’s revolving credit facility to support a cash payment of $132 million to BW. This cash payment was funded by a $30 million draw under BWXT’s revolver and net cash generated during the three months ended June 30, 2015. This payment was made pursuant to the terms of the Master Separation Agreement between BWXT and BW in order for BWXT to provide appropriate working capital and liquidity levels for BW following the spin-off. |