What changed in this filing

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Item 1. Business

2022-03-08 compared with 2021-03-08 · 143 added, 95 removed, 99 unchanged (71% of the section changed)

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and its consolidated subsidiaries.

B&W is a growing, globally-focused renewable, environmental and thermal technologies provider with decades of experience providing diversified energy and emissions control solutions to a broad range of industrial, electrical utility, municipal and other customers.

B&W is a growing, globally-focused renewable, environmental and thermal technologies provider with over 150 years of experience providing diversified energy and emissions control solutions to a broad range of industrial, electrical utility,

municipal and other customers.

B&W’s innovative products and services are organized into three market-facing segments.

Our reportable segments are:

• Babcock & Wilcox Renewable:

Cost-effective technologies for efficient and environmentally sustainable power and heat generation, including waste-to-energy, biomass energy and black liquor systems for the pulp and paper industry.

Cost-effective technologies for efficient and environmentally sustainable power and heat generation, including waste-to-energy, solar construction and installation, biomass energy and black liquor systems for the pulp and paper industry.

B&W’s leading technologies support a circular economy, diverting waste from landfills to use for power generation and replacing fossil fuels, while recovering metals and reducing emissions.

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B&W has an extensive global base of installed equipment for utilities and general industrial applications including refining, petrochemical, food processing, metals and others.

On September 30, 2021, we acquired a 60% controlling ownership stake in Illinois-based solar energy contractor Fosler Construction Company Inc.

(“Fosler Construction”) for approximately $27.2 million in cash plus contingent consideration of up to $10 million, valued at $8.8 million.

Fosler Construction provides commercial, industrial and utility-scale solar services and owns two community solar projects in Illinois being developed under the Illinois Solar for All program.

Fosler Construction was founded in 1998 and employs approximately 120 people.

It has a strong track record of successfully completing solar projects profitably with union labor and has aligned its model with a growing number of renewable project incentives in the U.S.

We believe Fosler Construction is positioned to capitalize on the high-growth solar market in the U.S.

and that the acquisition aligns with B&W’s aggressive growth and expansion of our clean and renewable energy businesses.

Fosler Construction is reported as part of our B&W Renewable segment, and operates under the name Fosler Solar, a Babcock & Wilcox company.

On November 30, 2021, we acquired 100% ownership of VODA A/S (“VODA”) through our wholly-owned subsidiary, B&W PGG Luxembourg Finance SARL for approximately $32.9 million.

VODA is a Denmark-based multi-brand aftermarket parts and services provider, focusing on energy-producing incineration plants including waste-to-energy, biomass-to-energy or other fuels, providing service, engineering services, spare parts as well as general outage support and management.

VODA has extensive experience in incineration technology, boiler and pressure parts, SRO, automation, and performance optimization.

VODA employs approximately 65 people mainly in Denmark and Sweden.

We believe VODA will solidify our platform for our renewable service business in Europe and that the acquisition aligns with B&W’s aggressive growth and expansion of our clean and renewable energy businesses.

VODA is reported as part of our B&W Renewable segment.

We plan to form B&W Renewable Services to integrate VODA and our waste-to-energy and biomass aftermarket services businesses.

On February 1, 2022, we acquired 100% ownership of Fossil Power Systems, Inc.

for approximately $59.1 million, excluding working capital adjustments.

Fossil Power Systems, Inc., is a leading designer and manufacturer of hydrogen, natural gas and renewable pulp and paper combustion equipment including ignitors, plant controls and safety systems based in Dartmouth, Nova Scotia, Canada.

Fossil Power Systems, Inc.

will initially be reported as part of our B&W Thermal segment.

On February 28, 2022, we acquired 100% ownership of Optimus Industries, LLC for approximately $19 million, excluding working capital adjustments.

Optimus designs and manufactures waste heat recovery products for use in power generation, petrochemical, and process industries , including package boilers, watertube and firetube waste heat boilers, economizers, superheaters, waste heat recovery equipment and sulfuric acid plants and is based in Tulsa, Oklahoma and Chanute, Kansas.

Optimus Industries, LLC will be reported as part of our B&W Thermal segment.

Our business depends significantly on the capital, operations and maintenance expenditures of global electric power generating companies, including renewable and thermal powered heat generation industries and industrial facilities with environmental compliance policy requirements.

Several factors may influence these expenditures, including:

• climate change initiatives promoting environmental policies which include renewable energy options utilizing waste-to-energy or biomass to meet legislative requirements and clean energy portfolio standards in the United States, European, Middle East and Asian markets;

• requirements for environmental improvements in various global markets;

• expectation of future governmental requirements to further limit or reduce greenhouse gas and other emissions in the United States, Europe and other international climate change sensitive countries;

• prices for electricity, along with the cost of production and distribution including the cost of fuels within the United States, Europe, Middle East and Asian based countries;

• climate change initiatives promoting environmental policies including renewable energy options utilizing waste-to-energy or biomass to meet legislative requirements and clean energy portfolio standards in the United States, European, Middle East and Asian markets;

• regulations requiring environmental improvements in various global markets;

• expectations regarding future governmental requirements to further limit or reduce greenhouse gas and other emissions in the United States, Europe and other international climate change sensitive countries;

• prices for electricity, along with the cost of production and distribution including the cost of fuels within the United States, Europe, Middle East and Asian countries;

• demand for electricity and other end products of steam-generating facilities;

• level of capacity utilization at operating power plants and other industrial uses of steam production;

• requirements for maintenance and upkeep at operating power plants to combat the accumulated effects of usage;

• maintenance and upkeep requirements at operating power plants, including to combat the accumulated effects of usage;

• overall strength of the industrial industry;

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Customer demand is heavily affected by the variations in our customers’ business cycles and by the overall economies and energy, environmental and noise abatement needs of the countries in which they operate.

Recent Developments

2021 Common Stock Offering

As described in Note 25, to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, on February 12, 2021, we completed a public offering of our common stock, par value $0.01 per share (“Common Stock”).

The offering was conducted pursuant to an underwriting agreement (the “Underwriting Agreement”) dated February 9, 2021, between us and B.

Riley Securities, Inc., a related party, as representative of the several underwriters (the “Underwriters”).

At the closing, we issued 29,487,180 shares of Common Stock, inclusive of 3,846,154 shares of Common Stock issued pursuant to the full exercise of the Underwriter’s option to purchase Common Stock.

We received gross proceeds of approximately $172.5 million from the 2021 common stock offering.

Net proceeds received were approximately $163 million after deducting underwriting discounts and commissions, but before expenses.

The net proceeds of the Common Stock offering and the Senior Notes offering, described below, are expected to be used to support our clean energy growth initiatives, to make a prepayment towards the outstanding U.S.

Revolving Credit Facility and permanently reduce the commitments under our senior secured credit facilities.

2021 Senior Notes Offering

As described in Note 25, to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, on February 12, 2021, we completed a public offering of $120 million aggregate principal amount of our 8.125% senior notes due 2026 (the “Senior Notes”).

The offering was conducted pursuant to an underwriting agreement (the “Notes Underwriting Agreement”) dated February 10, 2021, between us and B.

Riley Securities, Inc., a related party, as representative of several underwriters (the “Underwriters”).

At the completion, we received gross proceeds of approximately $125 million aggregate principal amount of Senior Notes, inclusive of $5 million aggregate principal amount of Senior Notes issued pursuant to the full exercise of the Underwriter’s option to purchase Senior Notes.

Net proceeds received were approximately $120 million after deducting underwriting discounts and commissions, but before expenses.

In addition to the public offering, we issued $35 million of Senior Notes to B.

Riley Financial, Inc., a related party, in exchange for a deemed prepayment of our existing Last Out Term Loan' Tranche A-6 in a concurrent private offering.

On February 12, 2021, we also entered into an indenture (the “Base Indenture”) and a supplemental indenture (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”) with The Bank of New York Mellon Trust Company National Association, as trustee (the “Trustee”), among the Company and the Trustee.

The Indenture establishes the form and provides for the issuance of the Senior Notes.

The Senior Notes are senior unsecured obligations of the Company and rank equally in right of payment with all of the Company’s other existing and future senior unsecured and unsubordinated indebtedness.

The Senior Notes are effectively subordinated in right of payment to all of the Company’s existing and future secured indebtedness and structurally subordinated to all existing and future indebtedness of the Company’s subsidiaries, including trade payables.

The Notes bear interest at the rate of 8.125% per annum.

Interest on the Senior Notes is payable quarterly in arrears on January 31, April 30, July 31 and October 31 of each year, commencing on April 30, 2021.

The Notes will mature on February 28, 2026.

We may, at our option, at any time and from time to time, redeem the Senior Notes for cash in whole or in part (i) on or after February 28, 2022 and prior to February 28, 2023, at a price equal to $25.75 per Senior Note, plus accrued and unpaid interest to, but excluding, the date of redemption, (ii) on or after February 28, 2023 and prior to February 29, 2024, at a price equal to $25.50 per Senior Note, plus accrued and unpaid interest to, but excluding, the date of redemption, (iii) on or after February 29, 2024 and prior to February 28, 2025, at a price equal to $25.25 per Senior Note, plus accrued and unpaid interest to, but excluding, the date of redemption and (iv) on or after February 28, 2025 and prior to maturity, at a price equal to 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption.

On and after any redemption date, interest will cease to accrue on the redeemed Notes.

The Indenture contains customary events of default and cure provisions.

If an uncured default occurs and is continuing, the Trustee or the holders of at least 25% of the principal amount of the Senior Notes may declare the entire amount of the Senior Notes, together with accrued and unpaid interest, if any, to be immediately due and payable.

In the case of an event of default involving the Company’s bankruptcy, insolvency or reorganization, the principal of, and accrued and unpaid interest on, the principal amount of the Senior Notes, together with accrued and unpaid interest, if any, will automatically, and without any declaration or other action on the part of the Trustee or the holders of the Senior Notes, become due and payable.

Amendments to the A&R Credit Agreement

As described in Note 25, to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, on February 8, 2021, we entered into A&R Amendment No.

2 with Bank of America.

A&R Amendment No.

2, among other matters, (i) permits the issuance of the Senior Notes in the 2021 senior notes offering described above, (ii) permits the deemed prepayment of $35 million of our Tranche A term loan with $35 million principal amount of Senior Notes, (iii) provides that 75% of the Senior Notes gross proceeds shall be used to repay outstanding borrowings and permanently reduce the commitments under our senior secured credit facilities, and (iv) provide that $5 million of certain previously deferred facility fees will be paid by the Company.

As described in Note 25, to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, on March 4, 2021, we entered into A&R Amendment No.

3 with Bank of America.

A&R Amendment No.

3, among other matters, at the date of effectiveness (i) permits the prepayment of certain term loans, (ii) reduces the revolving credit commitments to

$130 million and removes the ability to obtain revolving loans under the credit agreement, and (iii) amends certain covenants and conditions to the extension of credit.

On March 4, 2021, effective with the execution of Amendment No.

3, we paid $75 million towards our existing Last Out Term Loans and paid $21.8 million of accrued and deferred fees related to the revolving credit facility.

2021 Exchange Agreement

As described in Note 25, to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, on February 12, 2021, the Company and B.

Riley Financial, Inc.

Riley”), a related party, entered into a letter agreement (the “Exchange Agreement”) pursuant to which we agreed to issue to B.

Riley $35 million aggregate principal amount of Senior Notes in exchange for a deemed prepayment of $35 million of our existing Tranche A term loan with B.

Riley (the “Exchange”).

The Exchange Agreement also provides that, promptly following the date of the Exchange Agreement, the parties thereto will negotiate in good faith and use commercially reasonable efforts to enter into an agreement providing B.

Riley or its designated affiliates with customary registration rights in respect of the Senior Notes issued to B.

Riley in the Exchange.

On February 12, 2021, we issued $35 million of Senior Notes to B.

Riley Financial, Inc.

in exchange for a deemed prepayment of our existing Last Out Term Loan' Tranche A-6.

In December 2019, a novel strain of coronavirus, COVID-19, was identified in Wuhan, China and has subsequently spread globally.

This global pandemic has disrupted business operations, trade, commerce, financial and credit markets, and daily life throughout the world.

In December 2019, a novel strain of coronavirus, COVID-19, was identified in Wuhan, China and subsequently spread globally.

This global pandemic has disrupted business operations, including global supply chains, trade, commerce, financial and credit markets, and daily life throughout the world.

Our business has been, and continues to be, adversely impacted by the measures taken and restrictions imposed in the countries in which we operate and by local governments and others to control the spread of this virus.

These measures and restrictions have varied widely and have been subject to significant changes from time to time depending on the changes in the severity of the virus in these countries and localities.

These restrictions, including travel and curtailment of other activity, negatively impact our ability to conduct business.

These measures and restrictions have varied widely and have been subject to significant changes from time to time depending on changes in the severity of the virus in these countries and localities.

These restrictions, including curtailment of travel and other activity, negatively impact our ability to conduct business.

Disruption to our global supply chains from COVID-19 has included impacts to the manufacturing, supply, distribution, transportation and delivery of our products.

We could also see significant disruptions of the operations of our logistics, service providers, delays in shipments and negative impacts to pricing of certain of our products.

Disruptions and delays in our supply chains as a result of the COVID-19 pandemic could adversely our ability to meet our customers’ demands.

Additionally, the prioritization of shipments of certain products as a result of the pandemic could cause delays in the shipment or delivery of our products.

Such disruptions could result in reduced sales.

The volatility and variability of the virus has limited our ability to forecast the impact of the virus on our customers and our business.

The continuing resurgence of COVID-19, including at least one new strain thereof, has resulted in the reimposition of certain restrictions and may lead to other restrictions being implemented in response to efforts to reduce the spread of the virus.

These varying and changing events have caused many of the projects we had anticipated would begin in 2020 to be delayed into 2021 and beyond.

The ongoing impact of COVID-19, including new strains such as the delta and omicron variants, has resulted in the reimposition of certain restrictions and may lead to other restrictions being implemented in response to efforts to reduce the spread of the virus.

These varying and changing events have caused many of the projects we had anticipated would begin in 2021 to be delayed into 2022 and potentially beyond.

Many customers and projects require B&W's employees to travel to customer and project worksites.

Certain customers and significant projects are located in areas where travel restrictions have been imposed, certain customers have closed or reduced on-site activities, and timelines for completion of certain projects have, as noted above, been extended into 2022 and beyond.

Additionally, out of concern for our employees, even where restrictions permit employees to return to our offices and worksites, we have incurred additional costs to protect our employees as well as, advising those who are uncomfortable returning to worksites due to the pandemic that they are not required to do so for an indefinite period of time.

Additionally, out of concern for our employees, even where restrictions permit employees to return to our offices and worksites, we incurred additional costs to protect our employees and advised those who are uncomfortable returning to worksites due to the pandemic that they are not required to do so for an indefinite period of time.

The resulting uncertainty concerning, among other things, the spread and economic impact of the virus has also caused significant volatility and, at times, illiquidity in global equity and credit markets.

The full extent of the COVID-19 impact on our operational and financial performance will depend on future developments, including the ultimate duration and spread of the pandemic and related actions taken by the U.S.

government, state and local government officials, and international governments to prevent disease spread, as well as the availability and effectiveness of COVID-19 vaccinations in the U.S.

The full extent of the impact of COVID-19 and its variants on our operational and financial performance will depend on future developments, including the ultimate duration and spread of the pandemic and related actions taken by the U.S.

government, state and local government officials, and international governments to prevent outbreaks, as well as the availability, effectiveness and acceptance of COVID-19 vaccinations in the U.S.

and abroad, all of which are uncertain, out of our control, and cannot be predicted.

Beginning in April 2020, as part of the Company’s response to the impact of the COVID-19 pandemic on its business, the Company has taken a number of cash conservation and cost reduction measures, as described in Note 1 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Equity Capital Activities

On February 12, 2021, we completed a public offering of 29,487,180 shares of our common stock for net proceeds of $163.0 million, inclusive of 3,846,154 shares issued to B.

Riley Securities, Inc., a related party.

On May 7, 2021, we completed a public offering of 4,000,000 shares of our 7.75% Series A Cumulative Perpetual Preferred Stock (the “Preferred Stock”) at an offering price of $25.00 per share for net proceeds of approximately $95.7 million after deducting underwriting discounts and commissions but before expenses.

On May 26, 2021, we completed the additional sale of 444,700 shares of our Preferred Stock, related to offering described above, at an offering price of $25.00 per share for net proceeds of approximately $10.7 million after deducting underwriting fees and commissions.

On June 1, 2021, the Company and B.

Riley, a related party, entered into an agreement pursuant to which we (i) issued B.

Riley 2,916,880 shares of our Preferred Stock, representing an exchange price of $25.00 per share and paid $0.4 million in cash, and (ii) paid $0.9 million in cash to B.

Riley for accrued interest due, in exchange for a deemed prepayment of $73.3 million of our then-existing term loans with B.

On July 7, 2021, we entered into a sales agreement with B.

Riley Securities, Inc., a related party, in connection with the offer and sale of our Preferred Stock with an aggregate offering price of up to $76 million to or through B.

Riley Securities, Inc.

The Preferred Stock has the same terms (other than date of issuance and first dividend), has the same CUSIP number and is fungible with the Preferred Stock issued on May 7, 2021.

As of December 31, 2021, we sold $7.7 million aggregate amount of Preferred Stock for $7.7 million net proceeds after commission and fees related to the July 7, 2021 sales agreement.

For further information, see Note 17 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Debt Capital Activities

8.125% Senior Notes

On February 12, 2021, we completed a public offering of $125.0 million aggregate principal amount of our 8.125% senior notes due 2026 (the “8.125% Senior Notes”).

At the completion of the offering, we received net proceeds of approximately $120.0 million after deducting underwriting discounts, commissions, and before expenses.

In addition to the public offering, we issued $35.0 million of 8.125% Senior Notes to B.

Riley Financial, Inc., a related party, in exchange for a deemed prepayment of our existing Last Out Term Loan Tranche A-3 in a concurrent private offering.

On March 31, 2021, we entered into a sales agreement with B.

Riley Securities, Inc., a related party, in which we may sell to or through B.

Riley Securities, Inc., from time to time, additional 8.125% Senior Notes up to an aggregate principal amount of $150.0 million of 8.125% Senior Notes.

The 8.125% Senior Notes have the same terms as (other than date of issuance), form a single series of debt securities with and have the same CUSIP number and be fungible with, the 8.125% Senior Notes issued February 12, 2021, as described above.

As of December 31, 2021, the Company has sold $26.2 million aggregate principal amount of 8.125% Senior Notes under the sales agreement disclosed above for $26.6 million of net proceeds after commissions and fees.

The 8.125% Senior Notes are senior unsecured obligations of the Company and rank equally in right of payment with all of the Company’s other existing and future senior unsecured and unsubordinated indebtedness.

The 8.125% Senior Notes bear interest at the rate of 8.125% per annum.

Interest on the 8.125% Senior Notes is payable quarterly in arrears on January 31, April 30, July 31 and October 31 of each year, commencing on April 30, 2021.

The 8.125% Senior Notes mature on February 28, 2026.

6.50% Senior Notes .

On December 13, 2021, we completed an underwritten public offering of $140 million aggregate principal amount of 6.50% senior notes due 2026 (the “6.50% Senior Notes”).

On December 28, 2021, we received a notice that the Underwriters had elected to exercise their overallotment option for an additional $11.4 million in aggregate principal amount of the 6.50% Senior Notes.

The Company closed the overallotment option on December 30, 2021.

As of the closing of the overallotment option, a total of $151.4 million in aggregate principal amount of the 6.50% Senior Notes have been sold.

The net proceeds

from the offering, including the 6.50% Senior Notes purchased pursuant to the overallotment option, after deducting the Underwriters’ discount and the estimated offering expenses payable by the Company, were approximately $145.0 million.

The public offering of our 6.50% Senior Notes was conducted pursuant to an underwriting agreement dated December 8, 2021, between us and B.

Riley Securities, Inc., an affiliate of B.

Riley, a related party, as representative of several underwriters.

The 6.50% Senior Notes are senior unsecured obligations of the Company and rank equally in right of payment with all of the Company’s other existing and future senior unsecured and unsubordinated indebtedness.

The 6.50% Senior Notes are effectively subordinated in right of payment to all of the Company’s existing and future secured indebtedness and structurally subordinated to all existing and future indebtedness of the Company’s subsidiaries, including trade payables.

The 6.50% Senior Notes bear interest at the rate of 6.50% per annum.

Interest on the 6.50% Senior Notes is payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing on March 31, 2022.

The 6.50% Senior Notes will mature on December 31, 2026.

For further information, see Note 14 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

We execute our contracts through a variety of methods, including fixed-price, cost-plus, target price cost incentive, cost-reimbursable or some combination of these methods.

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While we carefully select our partners in these arrangements, they can subject us to risks that we may not be able to fully control and may include joint and several liability.

An example of this includes BWL Energy Ltd., which was formed to complete the construction of a waste wood fired boiler contract in the United Kingdom (the fifth European B&W Renewable EPC loss contracts described in Note 5 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report).

This joint venture combined our expertise in waste-to-energy power plant design, engineering, procurement and construction with our partner's civil construction capability to provide a full turnkey product to our customer.

We generally recognize our contract revenues and related costs over time using the cost-to-cost input method that uses costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations.

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Foreign Operations

Our operations in Denmark provide comprehensive services to companies in the waste-to-energy and biomass energy sector of the power generation market, currently primarily in Europe.

Our operations in Denmark, including through our recent acquisition of VODA, provide comprehensive services to companies in the waste-to-energy and biomass to energy sector of the power generation market, currently primarily in Europe.

Our operations in Italy provide custom-engineered comprehensive wet and dry cooling solutions and aftermarket parts and services to the power generation industry including natural gas-fired and renewable energy power plants, as well as downstream oil and gas, petrochemical and other industrial end markets in Europe, the Middle East and the Americas.

Our operations in Scotland and China primarily provide boiler cleaning technologies and systems (such as sootblowers), primarily to Europe and China, respectively.

Our operations in Scotland primarily provide boiler cleaning technologies and systems primarily to Europe.

Our Canadian operations serve the Canadian industrial power, oil production and electric utility markets.

We have manufacturing facilities in Mexico to serve global markets.

We also own a manufacturing facility in China that produces tube bundles for our cooling solutions.

Our operations are assessed based on three reportable segments which changed in 2020 as part of our strategic, market-focused organizational and re-branding initiative to accelerate growth and provide stakeholders improved visibility into our renewable and environmental growth platforms.

The reportable segment change in 2020 also reflects an ongoing integration of our foreign operations services on a worldwide basis, as well as expanding services beyond Europe to meet emerging global demand for these services, including the Americas and the Middle East.

The functional currency of our foreign operating entities is not the United States dollar, and as a result, we are subject to exchange rate fluctuations that impact our financial position, results of operations and cash flows.

We do not currently engage in currency hedging activities to limit the risks of currency fluctuations.

For additional information on the geographic distribution of our revenues, see Note 4 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

We provide our products and services to a diverse customer base that includes utilities and other power producers located around the world.

We have no customers that individually accounted for more than 10% of our consolidated revenues for the years ended December 31, 2020 and 2019.

Refer to Note 4 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for additional information.

With over 150 years of experience, we have supplied highly engineered energy and environmental equipment in more than 90 countries.

We have a competitive advantage in our experience and technical capability to reliably convert a wide range of fuels to steam.

For additional information on the geographic distribution of our revenues, see Note 4 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

With over 150 years of experience, we have a competitive advantage in our experience and technical capability to reliably convert a wide range of fuels to steam.

We have supplied highly-engineered energy and environmental equipment in more than 90 countries.

Our strong, installed base around the globe also yields competitive advantages, although our markets are highly competitive and price sensitive.

We compete with a number of domestic and foreign companies specializing in power generation, environmental, and cooling systems and services.

We compete with a number of domestic and foreign companies specializing in power generation, environmental control equipment, and cooling systems and services.

Each segment’s primary competitors are summarized as follows:

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Andritz SPG Dry Enerfab

Steinmuller Radscan AB

Steinmuller Radscan AB TEI Construction

LAB APComPower

(1) GE, MH Power Systems, Babcock Power & Doosan are also considered primary competitors of the B&W Environmental Segment.

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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 do not view ourselves as having any “principal” suppliers because none exceed 10% of the Company’s cost of goods sold.

We generally purchase these raw materials and components as needed for individual contracts.

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Although shortages of some raw materials have existed from time to time, no serious shortage exists at the present time.

Human Capital Resources

Human Capital Management

At December 31, 2021, we had approximately 1,800 employees worldwide, of which approximately 1,750 were full-time.

Approximately 400 of our hourly employees are union-affiliated, covered by four union agreements related to active facilities in Mexico, the United States, the United Kingdom, and Canada.

We have one union agreement that expires in 2022 and one that expires in 2023.

We are preparing to renegotiate two other agreements that expire in 2021.

We successfully renegotiated two union contracts in 2021 and have one that will expire in early 2023.

We consider our relationships with our employees and unions to be in good standing.

Patents and Licenses

Workforce Engagement

We believe an engaged global workforce is critical to our success as we work to profitably grow our business as a leading supplier of clean and sustainable energy solutions.

B&W is known for having a dedicated, long-tenured workforce and for having some of the best, most experienced employees in the industries we serve.

Our ability to attract and retain this exceptional talent requires a commitment to open communication about the company’s business, strategy and results with our employees and a globally diverse, inclusive and supportive workplace that provides opportunities for growth and career development.

It also requires programs that enhance employees’ overall work experience.

We have implemented the Responsible and Flexible Workplace Program (“ReFlex”) in the U.S.

that provides employees with flexibility in where they work and various work-from-home policies across many of our global operations.

While COVID-19 has continued to impact life throughout the world, our employees have remained diligent, customer focused and resilient, and progressive employment programs like ReFlex have provided us with an important competitive advantage.

They allow us to keep our facilities running, deliver on our projects and ensure our customers’ needs are met, while also safeguarding the safety and health of our employees.

Through ReFlex, our employees have needed flexibility and autonomy in how they work, particularly during these unprecedented times.

Compensation and Benefits

We also believe it is important to provide competitive compensation and benefits programs for our employees.

In addition to salaries, we offer the following benefits, among others, which vary by employee level and by the country where the employees are located:

• stock awards,

• retirement programs (including pension and savings plans),

• health savings and flexible spending accounts,

• paid time off,

• paid parental leave,

• disability programs,

• and employee assistance programs.

At B&W, our values of safety, ethics, quality, integrity, respect and agility are at the foundation of our business, and we are focused on efficiently ingraining new employees into that culture, whether they join through the normal recruiting and hiring process, or as we have grown our company through strategic acquisitions.

We also believe in the importance of being a good corporate citizen, providing and supporting opportunities for our employees to make a positive impact in the communities where they live and work.

Our Board is actively engaged with our workforce practices and policies, and regularly receives updates and provides input on key culture topics, including employee engagement, employee development and succession planning.

Patents and Patent Licenses

We currently hold a large number of United States and foreign patents and have patent applications pending.

We have acquired patents and technology licenses and granted technology licenses to others when we have considered it advantageous for us to do so.

We have acquired patents and technology licenses and granted technology licenses to others when we have considered it advantageous

for us to do so.

Although in the aggregate our patents and 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.

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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.

Information about our Executive Officers

For a listing of our executive officers, see Part III, Item 10 of this Annual Report, which information is incorporated herein by reference.

Government Regulations

We are subject to a variety of laws and regulations in the United States and other countries that involve matters central to our business, including those relating to:

• the construction and manufacture of renewable, environmental and thermal products;

• clean air and other environmental protection legislation;

• taxation of domestic and foreign earnings;

• tariffs, duties, or trade sanctions and other trade barriers imposed by foreign countries that restrict or prohibit business transactions in certain markets;

• user privacy, security, data protection, content, and online-payment services;

• intellectual property;

• transactions in or with foreign countries or officials;

• use of local employees and suppliers.

For further discussion, see Part I, Item 1A, “Risk Factors” of this Annual Report on Form 10-K.

Available Information

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Amended and Restated By-laws;

charters for the Audit & Finance, Governance, and Compensation Committees of our Board;

and Modern Slavery Transparency Statement.

charters for the Audit & Finance, Governance, and

Compensation Committees of our Board;

and our Modern Slavery Transparency Statement.

We are not including the information contained in our website as part of or incorporating it by reference into this Annual Report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business