What changed in this filing

/stocks — the workspaceLOADING

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2022-03-08 compared with 2021-03-08 · 856 added, 921 removed, 1107 unchanged (62% of the section changed)

4 unchanged sentences

Our investments are classified as available-for-sale.

Revolving Credit Facility is variable-rate debt, so its fair value would not be significantly affected by changes in prevailing market rates.

On December 31, 2020, its principal balance was $164.3 million, and the weighted average interest rate was 7.46%.

As of the effectiveness date of our A&R Credit Agreement on May 14, 2020, our Last Out Term Loans' interest rate was fixed at 12.0% per annum.

Prior to May 14, 2020, our Last Out Term Loans had a paid-in-kind interest feature which was additive to the principal balance.

We have operations in many foreign locations, and, as a result, our financial results could be significantly affected by factors such as changes in foreign currency exchange (“FX”) rates or weak economic conditions in those foreign markets.

4 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Babcock & Wilcox Enterprises, Inc.:

To the Stockholders and the Board of Directors of Babcock & Wilcox Enterprises, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Babcock & Wilcox Enterprises, Inc.

(the "Company") as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive (loss) income, stockholders' (deficit) equity, and cash flows, for each of the two years in the period ended December 31, 2020, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

(the "Company") as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity (deficit), and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 8, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Change in Accounting Principle

As discussed in Notes 2 and 6 to the consolidated financial statements, the Company elected to change its method of accounting for certain inventories from the last-in, first-out (“LIFO”) cost method to the first-in, first-out (“FIFO”) cost method which has been retrospectively applied to the consolidated financial statements as of December 31, 2020 and 2019.

Basis for Opinion

1 unchanged sentence

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

1 unchanged sentence

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

2 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition and Contracts – Refer to Notes 2 and 5 to the financial statements

4 unchanged sentences

Typically, revenue is recognized 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 the Company’s performance obligations.

The accounting for these contracts involves judgment, particularly as it relates to the process of

estimating total costs and profit for the performance obligation.

The accounting for these contracts involves judgment, particularly as it relates to the process of estimating total costs and profit for the performance obligation.

Revenue from fixed price long term contracts for products and services transferred to customer over time accounted for 81% of Company revenue for the year ended December 31, 2021.

We identified revenue on fixed price long-term contracts as a critical audit matter because of the judgments necessary for management to estimate total costs and profit for the performance obligations used to recognize revenue for certain fixed price long-term contracts.

We identified revenue on certain fixed price long-term contracts as a critical audit matter because of the judgments necessary for management to estimate total costs and profit for the performance obligations used to recognize revenue for fixed price long-term contracts.

This required extensive audit effort due to the volume and complexity of fixed price long-term contracts and required a high degree of auditor judgment when performing audit procedures to audit management’s estimates of total costs and profit and evaluating the results of those procedures.

1 unchanged sentence

Our audit procedures related to management’s estimates of total costs and profit for the performance obligations used to recognize revenue for certain fixed price long-term contracts included the following, among others:

• We selected a sample of customer fixed price long-term contracts performed over time and performed the following:

• We selected a sample of fixed price long-term contracts performed over time and performed the following:

– Evaluated whether the fixed price contracts were properly included in management’s calculation of fixed price long-term contract revenue based on the terms and conditions of each contract, including whether continuous transfer of control to the customer occurred as progress was made toward fulfilling the performance obligation.

6 unchanged sentences

– Comparing management’s estimates for the selected contracts to costs and profits of similar performance obligations, when applicable.

– Performing multiple live project site visits

– Tested the mathematical accuracy of management’s calculation of revenue for the performance obligation.

1 unchanged sentence

• Evaluated the Company’s disclosures related to revenue recognition and contracts to assess their conformity with the applicable accounting standards.

Accounting for A&R Credit Agreement– Refer to Notes 14 and 15 to the financial statements

Critical Audit Matter Description

On May 14, 2020, the Company entered into an agreement with its lenders amending and restating its Amended Credit Agreement (the “A&R Credit Agreement”).

The agreement refinances and extends the maturity of its Revolving Credit Facility and Last Out Term Loans.

The agreement, among other things, extends the maturity date of the revolving credit facility to June 30, 2022, and the maturity date of all Last Out Term Loans to December 30, 2022;

retains the interest rates in effect before the refinancing throughout the revised maturity dates;

and provides for the deferral of certain interest payments during 2020 to be paid in 2021.

We identified the accounting for the A&R Credit Agreement as a critical audit matter because of the judgments necessary for management to determine if the amendment of the debt agreement resulted in a debt extinguishment, a debt modification or a troubled debt restructuring for the Revolving Credit Facility and for the Last Out Term Loans.

This required extensive audit effort due to the complexity of the agreement and required a high degree of auditor judgment when performing audit procedures to audit management’s estimates and judgments and evaluating the results of those procedures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the accounting of the A&R Credit Agreement and management’s judgements used to account for the amendment included the following, among others:

• Evaluated management's conclusion regarding the accounting treatment of the A&R Credit Agreement by performing the following:

– We obtained and analyzed the executed A&R Credit Agreement.

– We obtained and analyzed the Company’s documentation and accounting assessment including their conclusions regarding the appropriate unit of account to use for evaluation.

– We obtained and analyzed the Company’s documentation and accounting assessment including their conclusions reached regarding the appropriate accounting model to apply to the amendment for each of the Revolving Credit Facility and the Last Out Term Loans.

– With the assistance of our professionals having experience in accounting for complex debt arrangements, we evaluated whether the restructuring of each of the Revolving Credit Facility and the Last Out Term Loans represents a troubled debt restructuring through the following procedures:

– Evaluated whether the Company was experiencing financial difficulties at the time of the amendment.

– Evaluated whether a concession was granted by either of the creditors.

– With the assistance of fair value specialists, we independently evaluated the reasonableness of the interest rates for both the Revolving Credit Facility and Last Out Term Loans after the amendment to determine whether they were deemed to be at market rates or met the criteria of a concession.

• Evaluated the Company’s disclosures to assess their compliance with the applicable accounting standards.

/s/ DELOITTE & TOUCHE LLP

13 unchanged sentences

Research and development costs

1,595 4,379 2,861

Gain on asset disposals, net

( 15,737 ) ( 3,263 ) ( 3,940 )

Total costs and expenses 702,542 568,054 888,493

Operating loss ( 1,737 ) ( 29,382 )

Other (expense) income:

Operating income (loss)

20,821 ( 1,737 ) ( 29,382 )

Other income (expense):

Interest expense ( 39,393 ) ( 59,796 ) ( 94,901 )

Interest income 531 646 923

Loss on debt extinguishment ( 6,194 ) ( 3,969 )

Gain (loss) on debt extinguishment

6,530 ( 6,194 ) ( 3,969 )

Loss on sale of business

( 1,753 ) ( 108 ) ( 3,601 )

Benefit plans, net 48,142 5,600 22,800

1 unchanged sentence

Other – net ( 1,270 ) ( 1,128 ) 285

Total other expense ( 2,181 ) ( 95,065 )

Loss before income tax expense ( 3,918 ) ( 124,447 )

Income tax expense 8,179 5,286

Loss from continuing operations ( 12,097 ) ( 129,733 )

Total other income (expense)

8,493 ( 2,181 ) ( 95,065 )

Income (loss) before income tax expense

29,314 ( 3,918 ) ( 124,447 )

Income tax (benefit) expense

( 2,224 ) 8,179 5,286

Income (loss) from continuing operations

31,538 ( 12,097 ) ( 129,733 )

Income from discontinued operations, net of tax

Net loss ( 10,297 ) ( 129,039 )

Net income (loss)

31,538 ( 10,297 ) ( 129,039 )

Net (income) loss attributable to non-controlling interest

Net loss attributable to stockholders $ ( 10,318 ) $ ( 121,974 )

Basic and diluted (loss) earnings per share:

( 644 ) ( 21 ) 7,065

Net income (loss) attributable to stockholders

30,894 ( 10,318 ) ( 121,974 )

Dividend on Series A preferred stock 9,127 — —

Net income (loss) attributable to stockholders of common stock

$ 21,767 $ ( 10,318 ) $ ( 121,974 )

Basic income (loss) per share

Continuing operations $ 0.26 $ ( 0.25 ) $ ( 3.89 )

Discontinued operations — 0.04 0.02

Basic and diluted loss per share $ ( 0.21 ) $ ( 3.87 )

Shares used in the computation of earnings (loss) per share:

Basic and diluted 48,710 31,514

Basic income (loss) per share

$ 0.26 $ ( 0.21 ) $ ( 3.87 )

Diluted income (loss) per share

Continuing operations $ 0.26 $ ( 0.25 ) $ ( 3.89 )

Discontinued operations — 0.04 0.02

Diluted income (loss) per share

$ 0.26 $ ( 0.21 ) $ ( 3.87 )

Shares used in the computation of income (loss) per share:

Basic 82,391 48,710 31,514

Diluted 83,580 48,710 31,514

* Year ended December 31, 2020 and 2019 amounts have been adjusted to reflect the change in inventory accounting method, as described in Notes 2 and 6 to the Consolidated Financial Statements.

See accompanying notes to Consolidated Financial Statements.

BABCOCK & WILCOX ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Year ended December 31,

(in thousands) 2021 2020 2019

Net loss $ ( 10,297 ) $ ( 129,039 )

Other comprehensive (loss) income:

Net income (loss)

$ 31,538 $ ( 10,297 ) $ ( 129,039 )

Other comprehensive income (loss):

Currency translation adjustments (CTA) ( 3,412 ) $ ( 53,318 ) 13,401

Reclassification of CTA to net loss — 3,176

Reclassification of CTA to net income (loss)

( 4,512 ) — 3,176

Derivative financial instruments:

3 unchanged sentences

Benefit obligations:

Amortization of benefit plan benefits ( 998 ) ( 1,857 )

Pension and post retirement adjustments, net of tax 1,492 ( 998 ) ( 1,857 )

Other comprehensive (loss) income

Total comprehensive loss ( 64,613 ) ( 115,681 )

Comprehensive (income) loss attributable to non-controlling interest ( 29 ) 7,140

Comprehensive loss attributable to stockholders $ ( 64,642 ) $ ( 108,541 )

( 6,432 ) ( 54,316 ) 13,358

Total comprehensive income (loss)

25,106 ( 64,613 ) ( 115,681 )

Comprehensive (loss) income attributable to non-controlling interest

( 595 ) ( 29 ) 7,140

Comprehensive income (loss) attributable to stockholders

$ 24,511 $ ( 64,642 ) $ ( 108,541 )

See accompanying notes to Consolidated Financial Statements.

18 unchanged sentences

Total assets $ 913,265 $ 599,077

Revolving credit facilities $ — $ 179,000

Last out term loans — 103,953

Accounts payable $ 85,929 $ 73,481

2 unchanged sentences

Accrued warranty expense 12,925 25,399

Financing lease liabilities 2,445 886

Operating lease liabilities 3,950 3,995

Other accrued liabilities 54,385 80,858

Loans payable 12,380 —

Current liabilities held for sale — 8,305

Total current liabilities 253,383 270,832

Revolving credit facilities 164,300 —

Senior notes 326,366 —

Long term loans payable 1,543 —

Last out term loans — 183,330

Revolving credit facilities — 164,300

Pension and other accumulated postretirement benefit liabilities 182,730 252,292

4 unchanged sentences

Commitments and contingencies

Stockholders' deficit:

Stockholders' equity (deficit):

Preferred stock, par value $ 0.01 per share, authorized shares of 20,000 ;

issued and outstanding shares of 7,669 and 0 at December 31, 2021 and 2020, respectively

Common stock, par value $ 0.01 per share, authorized shares of 500,000 ;

4 unchanged sentences

Accumulated deficit ( 1,321,154 ) ( 1,342,921 )

Accumulated other comprehensive income (loss) ( 52,390 ) 1,926

Stockholders' deficit attributable to shareholders ( 339,366 ) ( 296,356 )

Accumulated other comprehensive loss ( 58,822 ) ( 52,390 )

Stockholders' equity (deficit) attributable to shareholders 33,149 ( 332,081 )

Non-controlling interest 25,473 1,104

Total stockholders' deficit ( 338,262 ) ( 294,939 )

Total liabilities and stockholders' deficit $ 591,792 $ 626,519

Total stockholders' equity (deficit)

58,622 ( 330,977 )

Total liabilities and stockholders' equity (deficit)

$ 913,265 $ 599,077

* Year ended December 31, 2020 amounts have been adjusted to reflect the change in inventory accounting method, as described in Notes 2 and 6 to the Consolidated Financial Statements.

See accompanying notes to Consolidated Financial Statements.

BABCOCK & WILCOX ENTERPRISES, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT) EQUITY

Common Stock Capital In

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

Common Stock Preferred Stock Capital In

Par Value Treasury Stock Accumulated Deficit Accumulated

Comprehensive

(Loss) Income Non-controlling

Loss Non-controlling

Interest Total

Stockholders’

(in thousands, except share and per share amounts)

Balance at January 1, 2018 16,879 $ 1,748 $ 1,047,062 $ ( 105,590 ) $ ( 1,217,914 ) $ ( 11,432 ) $ 8,829 $ ( 277,297 )

Equity (Deficit)

(in thousands, except share and per share amounts) Shares Par

Value Shares Par

Balance at December 31, 2018 (As reported) 16,879 $ 1,748 — $ — $ 1,047,062 $ ( 105,590 ) $ ( 1,217,914 ) $ ( 11,432 ) $ 8,829 $ ( 277,297 )

Inventory accounting method change* — — — — — — 7,285 — — 7,285

Balance at December 31, 2018 16,879 1,748 — — 1,047,062 ( 105,590 ) ( 1,210,629 ) ( 11,432 ) 8,829 ( 270,012 )

Net loss — — — — — — ( 121,974 ) — ( 7,065 ) ( 129,039 )

1 unchanged sentence

Derivative financial instruments — — — — — — — ( 1,362 ) — ( 1,362 )

Defined benefit obligations — — — — — ( 1,857 ) — ( 1,857 )

Stock-based compensation 108 12 3,072 ( 117 ) — — — 2,967

Pension and post retirement adjustments, net of tax — — — — — — — ( 1,857 ) — ( 1,857 )

Stock-based compensation charges 108 12 — — 3,072 ( 117 ) — — — 2,967

Rights offering, net 13,922 1,392 — — 39,544 — — — — 40,936

6 unchanged sentences

Currency translation adjustments — — — — — — — ( 53,318 ) 8 ( 53,310 )

Defined benefit obligations — — — — — ( 998 ) — ( 998 )

Stock-based compensation 460 9 4,548 ( 283 ) — — — 4,274

Pension and post retirement adjustments, net of tax — — — — — — — ( 998 ) — ( 998 )

Stock-based compensation charges 460 9 — — 4,548 ( 283 ) — — — 4,274

Equitized guarantee fee payment 1,713 17 — — 3,883 — — — — 3,900

Equitized Last Out Term Loan interest payment 5,905 59 13,391 — — — — 13,450

Equitized Last Out Term Loan principal payment 5,905 59 — — 13,391 — — — — 13,450

Dividends to non-controlling interest — — — — — — — — ( 342 ) ( 342 )

Balance at December 31, 2020 54,452 $ 4,784 — $ — $ 1,164,436 $ ( 105,990 ) $ ( 1,342,921 ) $ ( 52,390 ) $ 1,104 $ ( 330,977 )

(1) Issued and outstanding common shares and treasury stock shares reflect the one-for-ten reverse stock split on July 24, 2019 as described in Note 1 .

Net income — — — — — — 30,894 — 644 31,538

Currency translation adjustments — — — — — — — ( 7,924 ) ( 49 ) ( 7,973 )

Pension and post retirement adjustments, net of tax — — — — — — — 1,492 — 1,492

Stock-based compensation charges 2,347 31 — — 7,770 ( 4,944 ) — — — 2,857

Common stock offering 29,487 295 — — 160,546 — — — — 160,841

Preferred stock offering, net — — 4,752 48 113,227 — — — — 113,275

Equitized Last Out Term Loan principal payment — — 2,917 29 72,893 — — — — 72,922

Dividends to preferred stockholders — — — — — — ( 9,127 ) — — ( 9,127 )

Non-controlling interest from acquisition — — — — — — — — 23,996 23,996

Dividends to non-controlling interest — — — — — — — — ( 222 ) ( 222 )

Balance at December 31, 2021 86,286 $ 5,110 7,669 $ 77 $ 1,518,872 $ ( 110,934 ) $ ( 1,321,154 ) $ ( 58,822 ) $ 25,473 $ 58,622

* Amount reflects the change in inventory accounting method, as described in Notes 2 and 6 to the Consolidated Financial Statements

See accompanying notes to Consolidated Financial Statements.

4 unchanged sentences

Cash flows from operating activities:

Net loss $ ( 10,297 ) $ ( 129,039 )

Net income (loss)

$ 31,538 $ ( 10,297 ) $ ( 129,039 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization of long-lived assets 18,337 16,805 23,605

Amortization of deferred financing costs, debt discount and payment-in-kind interest 16,743 61,181

Amortization of deferred financing costs and debt discount 7,918 16,743 61,181

Amortization of guaranty fee 1,832 1,159 —

1 unchanged sentence

Loss on sale of business 1,753 108 3,601

Loss on debt extinguishment 6,194 3,969

Gains on asset disposals ( 3,262 ) ( 3,940 )

Provision for (benefit from) deferred income taxes, including valuation allowances 1,791 ( 855 )

Mark to market (gains) losses and prior service cost amortization for pension and postretirement plans 22,156 ( 10,661 )

(Gain) loss on debt extinguishment

( 6,530 ) 6,194 3,969

Gain on asset disposals

( 15,737 ) ( 3,262 ) ( 3,940 )

(Benefit from) provision for deferred income taxes, including valuation allowances

( 7,745 ) 1,791 ( 855 )

Mark to market, prior service cost amortization for pension and postretirement plans ( 15,512 ) 22,156 ( 10,661 )

Stock-based compensation, net of associated income taxes 7,801 4,557 3,084

15 unchanged sentences

Purchase of property, plant and equipment ( 6,679 ) ( 8,230 ) ( 3,804 )

Proceeds from sale of business 8,000 7,445

Acquisition of business, net of cash acquired ( 55,341 ) — —

Proceeds from sale of business and assets, net 25,390 8,000 7,445

Purchases of available-for-sale securities ( 12,605 ) ( 29,068 ) ( 8,914 )

1 unchanged sentence

Other, net — 4,954 2,505

Net cash from investing activities 2,219 8,779

Net cash (used in) from investing activities ( 33,541 ) 2,219 8,779

Year ended December 31,

1 unchanged sentence

Cash flows from financing activities:

Borrowings under our U.S.

revolving credit facility 158,900 291,600

Repayments of our U.S.

revolving credit facility ( 173,600 ) ( 257,500 )

Issuance of senior notes 303,324 — —

Borrowings on loan payable 7,145 — —

Repayments on loan payable ( 846 ) — —

Borrowings under last out term loans — 70,000 151,350

Repayments under last out term loans ( 75,408 ) — ( 41,766 )

Borrowings under U.S.

revolving credit facility 14,500 158,900 291,600

Repayments of U.S.

revolving credit facility ( 178,800 ) ( 173,600 ) ( 257,500 )

Repayments under our foreign revolving credit facilities — — ( 605 )

Shares of our common stock returned to treasury stock ( 283 ) ( 117 )

Issuance of preferred stock, net 113,275 — —

Payment of preferred stock dividends ( 9,127 ) — —

Shares of common stock returned to treasury stock ( 4,944 ) ( 283 ) ( 117 )

Proceeds from rights offering — — 40,376

Costs related to rights offering — — ( 832 )

Issuance of common stock, net 160,841 — 1,392

Debt issuance costs ( 24,560 ) ( 10,590 ) ( 16,619 )

Issuance of common stock — 1,392

Other, net ( 2,588 ) ( 329 ) ( 261 )

2 unchanged sentences

Net increase (decrease) in cash, cash equivalents and restricted cash

159,292 10,482 ( 3,338 )

Cash, cash equivalents and restricted cash, beginning of period 67,423 56,941 60,279

5 unchanged sentences

NOTE 1 – BASIS OF PRESENTATION

The 2020 and 2019 Consolidated Financial Statements of Babcock & Wilcox Enterprises, Inc.

(“B&W,” “management,” “we,” “us,” “our” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States and Securities and Exchange Commission (“SEC”).

The Consolidated Financial Statements of Babcock & Wilcox Enterprises, Inc.

(“B&W,” “management,” “we,” “us,” “our” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

We have eliminated all intercompany transactions and accounts.

We present the notes to our Consolidated Financial Statements on the basis of continuing operations, unless otherwise stated.

Recent Developments

In February and March 2021, we entered into a series of agreements and completed a series of financing transactions including the following:

• 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 senior notes, (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;

• on February 12, 2021, we entered into a letter agreement (the “Exchange Agreement”) with B.

Riley Financial, Inc.

Riley”), a related party, 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.

On February 12, 2021, we issued $ 35 million of senior notes to B.

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

The interest rate on the remaining Last Out Term Loan Tranche A balances has been reduced to 6.625 % from 12.0 %;

• on February 12, 2021, we received gross proceeds of approximately $ 172.5 million after closing a public offering of our common stock in which 29,487,180 shares of common stock were issued, inclusive of 3,846,154 shares issued to B.

Riley Securities, Inc., a related party, as representative of several underwriters to the common stock offering.

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

• on February 12, 2021, we received gross proceeds of approximately $ 125 million after completing an issuances of our 8.125 % Senior Notes due 2026 from a public offering of $ 120 million and $ 5 million of the senior notes issued to B.

Riley Securities, Inc., a related party, as representative of several underwriters to the senior notes offering.

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

• 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 A&R 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.

For further information, see Note 25 to our Consolidated Financial Statements.

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 changes 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 2020 to be delayed into the 2022 and 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 which include:

• temporary unpaid furloughs of certain employees;

• temporarily deferral of 50 % of the monthly fee paid to BRPI Executive Consulting, LLC for the services of our Chief Executive Officer;

• deferrals of 30 % of the base salaries of our Chief Financial Officer and Chief Operating Officer, and 50 % of our previous Chief Strategy Officer;

• suspension of our 401(k) company match for U.S.

employees for 2020 and for 2021 as of the issuance date of these financial statements;

• approval by the Company’s Board for a temporary deferral of 50 % of the cash compensation payable to non-employee directors under the Company’s board compensation program paid during the first quarter of 2021;

• temporary rent payment deferrals related to leased facilities located in the U.S., Canada, Italy and Denmark;

• utilizing options for government loans and programs in the U.S.

and abroad that are appropriate and available;

• deferring, in accordance with the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law in March 2020, the Pension Plan contribution payments of $ 5.5 million each for the 2020 Plan year that would have been made on April 15, 2020, July 15, 2020 and October 15, 2020, respectively.

In addition, we elected to defer the contribution payments of $ 1.1 million for the 2018 Plan year and $ 23.7 million for the 2019 Plan year that were both due on September 15, 2020.

Per the 2019 Plan year waiver received on October 1, 2020, the $ 23.7 million deferred for the 2019 Plan year will now be funded over the next five years .

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Reportable segments

Our operations are assessed based on three reportable segments which changed during our third quarter of 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.

Our operations are assessed based on three reportable market-facing segments as part of the Company's strategic, market-focused organizational and re-branding initiative to accelerate growth and provide stakeholders improved visibility into our renewable and environmental growth platforms.

Our reportable segments are as follows:

• B&W Renewable segment :

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.

The segment'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.

• B&W Environmental segment :

full suite of best-in-class emissions control and environmental technology solutions for utility and industrial steam generation applications around the world.

The segment's broad experience includes systems for cooling, ash handling, particulate control, nitrogen oxides and sulfur dioxides removal, chemical looping for carbon control, and mercury control.

• B&W Thermal segment :

• Babcock & Wilcox Renewable:

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.

• Babcock & Wilcox Environmental:

A full suite of best-in-class emissions control and environmental technology solutions for utility, waste to energy, biomass, carbon black, and industrial steam generation applications around the world.

B&W’s broad experience includes systems for cooling, ash handling, particulate control, nitrogen oxides and sulfur dioxides removal, chemical looping for carbon control, and mercury control.

• Babcock & Wilcox Thermal:

Steam generation equipment, aftermarket parts, construction, maintenance and field services for plants in the power generation, oil and gas, and industrial sectors.

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

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

For financial information about our segments see Note 4 to our Consolidated Financial Statements.

1 unchanged sentence

We use estimates and assumptions to prepare our Consolidated Financial Statements in conformity with GAAP.

Some of our more significant estimates include our estimate of costs to complete long-term construction contracts, estimates associated with assessing whether goodwill and other long-lived assets are impaired, estimates of costs to be incurred to satisfy contractual warranty requirements, estimates of the value of acquired intangible and tangible assets, estimates associated with the realizability of deferred tax assets, and estimates we make in selecting assumptions related to the valuations of our pension and postretirement plans, including the selection of our discount rates, mortality and expected rates of return on our pension plan assets.

Some of our more significant estimates include our estimate of costs to complete long-term construction contracts, estimates associated with assessing whether goodwill, intangible assets and other long-lived assets are impaired, estimates of costs to be incurred to satisfy contractual warranty requirements, estimates of the value of acquired intangible and tangible assets, estimates associated with the realizability of deferred tax assets, and estimates we make in selecting assumptions related to the valuations of our pension and postretirement plans, including the selection of our discount rates, mortality and expected rates of return on our pension plan assets.

These estimates and assumptions affect the amounts we report in our Consolidated Financial Statements and accompanying notes.

19 unchanged sentences

We report foreign currency transaction gains and losses in income.

We have included transaction gains of $ 58.8 million and losses of $ 16.6 million in the years ended December 31, 2020 and 2019, respectively, in foreign exchange in our Consolidated Statements of Operations.

We have included a transaction (loss) gain of $( 4.3 ) million, $ 58.8 million and $( 16.6 ) million in the years ended December 31, 2021, 2020, and 2019, respectively, in foreign exchange in our Consolidated Statements of Operations.

These foreign exchange net gains and losses are primarily related to transaction gains or losses from unhedged intercompany loans when the loan is denominated in a currency different than the participating entity's functional currency.

Certain reclassifications have been made to the 2019 balances related to foreign currency gains and losses in the Consolidated Statements of Cash Flows to conform to the current year presentation.

Revenue recognition

4 unchanged sentences

Standard commercial payment terms generally apply to these sales.

Revenue from products and services transferred to customers over time accounted for 71 % and 79 % of our revenue for the years ended December 31, 2020 and 2019, respectively.

Revenue from products and services transferred to customers over time accounted for 81 %, 71 % and 79 % of our revenue for the years ended years ended December 31, 2021, 2020, and 2019, respectively.

Revenue recognized over time primarily relates to customized, engineered solutions and construction services.

Incurred cost represents work performed, which corresponds with, and thereby best depicts, the

transfer of control to the customer.

Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer.

Contract costs include labor, material, overhead and, when appropriate, SG&A expenses.

15 unchanged sentences

We recognize accrued claims in contract revenues for extra work or changes in scope of work to the extent of costs incurred when we believe we have an enforceable right to the modification or claim and the amount can be estimated reliably, and its realization is probable.

In evaluating these criteria, we consider the contractual/legal basis for enforcing the claim, the cause of any additional costs incurred and whether those costs are identifiable or otherwise determinable, the nature and reasonableness of those costs, the objective evidence available to support the amount of the claim, and our relevant history with the counter-party that supports our expectations about their willingness and ability to pay for the additional cost along with a reasonable margin.

with the counter-party that supports our expectations about their willingness and ability to pay for the additional cost along with a reasonable margin.

We generally recognize sales commissions in equal proportion as revenue is recognized.

12 unchanged sentences

We accrue estimated expense included in cost of operations on our Consolidated Statements of Operations to satisfy contractual warranty requirements when we recognize the associated revenues on the related contracts, or in the case of a loss contract, the full amount of the estimated warranty costs is accrued when the contract becomes a loss contract.

In addition, we

record specific provisions or reductions where we expect the actual warranty costs to significantly differ from the accrued estimates.

In addition, we record specific provisions or reductions where we expect the actual warranty costs to significantly differ from the accrued estimates.

Such changes could have a material effect on our consolidated financial condition, results of operations and cash flows.

1 unchanged sentence

Our research and development activities are related to improving our products through innovations to reduce the cost of our products to make them more competitive and through innovations to reduce performance risk of our products to better meet our and our customers' expectations.

Research and development activities totaled $ 4.4 million and $ 2.9 million in the years ended December 31, 2020 and 2019, respectively.

Research and development activities totaled $ 1.6 million, $ 4.4 million and $ 2.9 million in the years ended December 31, 2021, 2020, and 2019, respectively.

Advertising expense

Advertising expense is charged when incurred and is included in selling, general and administrative expenses on our Consolidated Statements of Operations.

Advertising expense is recognized when incurred and is included in selling, general and administrative expenses on our Consolidated Statements of Operations.

Advertising expenses in the years ended December 31, 2021, 2020, and 2019 were not significant.

14 unchanged sentences

We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized.

We assess the need for a valuation allowance on a quarterly basis.

For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

10 unchanged sentences

Our allowance for doubtful accounts was $ 11.9 million and $ 17.2 million at December 31, 2021 and 2020, respectively.

Amounts charged to selling, general and administrative expenses were $( 0.2 ) million and $ 0.2 million for the years ended December 31, 2020 and 2019, respectively.

We carry our inventories at the lower of cost or market.

We determine cost principally on the first-in, first-out basis, except for certain materials inventories of our B&W Thermal segment, where we use the last-in, first-out (“LIFO”) method.

We determined the cost of approximately 20 % of our total inventories using the LIFO method at December 31, 2020 and 2019, and our total LIFO reserve at December 31, 2020 and 2019 was approximately $ 7.3 million and $ 7.2 million, respectively.

Our obsolete inventory reserve was $ 7.1 million and $ 6.9 million at December 31, 2020 and 2019, respectively.

Amounts charged to selling, general and administrative expenses were $( 0.1 ) million, $( 0.2 ) million and $ 0.2 million for the years ended December 31, 2021, 2020, and 2019, respectively.

We carry our inventories at the lower of cost or net realizable value.

We determine cost on the first-in, first-out basis.

During the fourth quarter of 2021, the Company voluntarily changed its method of accounting for certain domestic inventory previously valued by the LIFO method to the FIFO method.

The cumulative effect of this change on periods presented prior to 2019 resulted in an increase in retained earnings of $ 7.3 million at December 31, 2018.

The impact on earnings was a decrease of $ 0.1 million and an increase of $ 0.4 million for the years ending December 31, 2020 and 2019, respectively.

The FIFO method of accounting for inventory is preferable because it more closely matches the physical inventory flow, better reflects the current value of inventories on our Consolidated Balance Sheets, improves our financial reporting by having a consistent method across the organization, and increases comparability with certain peers of the Company.

inventory reserve was $ 6.5 million and $ 7.1 million at December 31, 2021 and 2020, respectively.

The components of inventories can be found in Note 6.

2 unchanged sentences

We depreciate our property, plant and equipment using the straight-line method over estimated economic useful lives of eight to 33 years for buildings and three to 28 years for machinery and equipment.

Our depreciation expense was $ 11.3 million and $ 19.3 million for the years ended December 31, 2020 and 2019, respectively.

Our depreciation expense was $ 9.7 million, $ 11.3 million and $ 19.3 million for the years ended December 31, 2021, 2020, and 2019, respectively.

We expense the costs of maintenance, repairs and renewals that do not materially prolong the useful life of an asset as we incur them.

5 unchanged sentences

Any changes in such factors may negatively affect our business and result in future asset impairments.

Investments in unconsolidated joint ventures

We use the equity method of accounting for investments in joint ventures in which we are able to exert significant influence, but not control.

Joint ventures in which our investment ownership is less than 20% and where we are unable to exert significant influence are carried at cost.

We assess our investments in unconsolidated joint ventures for other-than-temporary-impairment when significant changes occur in the investee's business or our investment philosophy.

Such changes might include a series of operating losses incurred by the investee that are deemed other-than-temporary, the inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment or a change in the strategic reasons that were important when we originally entered into the joint venture.

If an other-than-temporary-impairment were to occur, we would measure our investment in the unconsolidated joint venture at fair value.

Investments in consolidated joint ventures

Investments in consolidated entities

SPIG maintains a 60 % ownership interest in a joint venture entity, which is consolidated into the B&W Environmental segment results.

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

(“Fosler Construction”).

See Note 26 for further information on this acquisition.

Goodwill represents the excess of the cost of our acquired businesses over the fair value of the net assets acquired.

We perform testing of goodwill for impairment annually or when impairment indicators are present.

We may elect to perform a qualitative test when we believe that there is substantially in excess fair value over carrying value based on our most recent

quantitative assessment, adjusted for relevant events and circumstances that could affect fair value during the current year.

We perform testing of goodwill for impairment annually on October 1 st or when impairment indicators are present.

We may elect to perform a qualitative test when we believe that there is substantially in excess fair value over carrying value based on our most recent quantitative assessment, adjusted for relevant events and circumstances that could affect fair value during the current year.

If we conclude based on this assessment that it is more likely than not that the reporting unit is not impaired, we do not perform a quantitative impairment test.

8 unchanged sentences

If the carrying amount of the intangible asset exceeds its fair value, we recognize impairment for the amount of the difference.

Accounting for Leases

We determine if an arrangement is a lease at inception.

Operating leases are included in right-of-use (“ROU”) assets , operating lease liabilities and non-current operating lease liabilities in the Consolidated Balance Sheets.

Finance leases are included in net property, plant and equipment, and finance lease, other accrued liabilities and other non-current finance

liabilities in the Consolidated Balance Sheets.

Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

As substantially all of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at lease commencement date in determining the present value of future payments.

Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located.

The ROU assets also include any prepaid lease payments made and initial direct costs incurred and excludes lease incentives.

Our lease terms may include options to extend or terminate the lease, which we recognize when it is reasonably certain that we will exercise that option.

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

For leases beginning in 2019 and later, we account for lease components (e.g., fixed payments including rent) together with the non-lease components (e.g., common-area maintenance costs) as a single lease component for all classes of underlying assets.

Derivative financial instruments

2 unchanged sentences

As of December 31, 2021, we do not hold any derivative assets or liabilities.

the last of our derivative contracts were sold during the first quarter of 2019.

Self-insurance

22 unchanged sentences

Consequently, it is possible future earnings could be affected by changes in our assessments of the probability that a loss recovery has been recognized and/or changes in our estimates related to such matters.

See Note 5 for discussion regarding the loss recovery recognized in 2020 and 2019.

See Note 5 for discussions regarding the project contract cost recovery recognized in 2021 and the non-recurring loss recovery in 2020.

Contingent consideration

The fair values of earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates.

For each transaction, we estimate the fair value of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability in other non-current liabilities on our Consolidated Balance Sheets.

We review and re-assess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from the initial estimates.

Changes in the estimated fair value of our contingent earn-out liabilities related to the time component of the present value calculation are reported in interest expense on our Consolidated Statements of Operations.

Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income (loss) on our Consolidated Statements of Operations.

Stock-based compensation

7 unchanged sentences

For liability-classified awards, changes in fair value are recognized through cumulative catch-ups each period.

Excess tax benefits on stock-based compensation are to be presented as a financing cash flow, rather than as a reduction of taxes paid.

Excess tax benefits on stock-based compensation should be classified along with other income tax cash flows as an operating activity.

These excess tax benefits result from tax deductions in excess of the cumulative compensation expense recognized for options exercised and other equity-classified awards.

1 unchanged sentence

Recently adopted accounting standards

Effective January 1, 2020, we adopted ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract .

The new guidance requires companies acting as the customer in a cloud hosting service arrangement to follow the requirements of ASC 350-40 for capitalizing implementation costs for internal-use software and requires the amortization of these costs over the life of the related service contract.

We adopted the following accounting standard during the year ended December 31, 2021:

Effective January 1, 2021 we adopted ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

The amendments in this update simplify the accounting for income taxes by removing exceptions related to the incremental approach for intra-period tax allocation, certain deferred tax liabilities, and the general methodology for calculating income taxes in an interim period.

The amendment also provides simplification related to accounting for franchise (or similar) tax, evaluating the tax basis step up of goodwill, allocation of consolidated current and deferred tax expense, reflection of the impact of enacted tax law or rate changes in annual effective tax rate calculations in the interim period that includes enactment date, and other minor codification improvements.

The impact of this standard on our consolidated financial statements was immaterial.

NOTE 3 – EARNINGS (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted earnings (loss) per share of our common stock, net of non-controlling interest:

In March 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848):

The amendments in this update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition.

This update is an amendment to ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform of Financial Reporting, which was issued in March 2020 and provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendments in the updates apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

The expedients and exceptions provided by the updates do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship.

As of December 31, 2021, we have not yet elected any optional expedients provided in the standard.

We will apply the accounting relief as relevant contract and hedge accounting relationship modifications are made during the reference rate reform transition period.

The impact of this standard on our consolidated financial statements was immaterial.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Equity's Own Equity (Subtopic 815-40):

Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force).

The amendments in this update affect all entities that issue freestanding written call options that are classified in equity.

Specifically, the amendments affect those entities when a freestanding equity-classified written call option is modified or exchanged and remains equity classified after the modification or exchange.

The amendments that relate to the recognition and measurement of EPS for certain modifications or exchanges of freestanding equity-classified written call options affect entities that present EPS in accordance with the guidance in Earnings Per Share (Topic 260) .

The amendments in this update do not apply to modifications or exchanges of financial instruments that are within the scope of another Topic.

That is, accounting for those instruments continues to be subject to the requirements in other Topics.

The amendments in this update do not affect a holder’s accounting for freestanding call options.

The update is applicable to B&W as we have previously issued freestanding written call options.

As of December 31, 2021, these options remain unexercised and we will apply the accounting standard as freestanding written call options are modified or exchanged.

The impact of this standard on our consolidated financial statements was immaterial.

NOTE 3 – EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings (loss) per share of our common stock, net of non-controlling interest and dividends on preferred stock:

Year ended December 31,

(in thousands, except per share amounts) 2021 2020 2019

Loss from continuing operations $ ( 12,118 ) $ ( 122,668 )

Income from discontinued operations, net of tax 1,800 694

Net loss attributable to stockholders $ ( 10,318 ) $ ( 121,974 )

Weighted average shares used to calculate basic and diluted earnings per share 48,710 31,514

Basic and diluted (loss) earnings per share:

Income (loss) from continuing operations attributable to stockholders of common stock

$ 21,767 $ ( 12,118 ) $ ( 122,668 )

Income from discontinued operations attributable to stockholders of common stock, net of tax

Net income (loss) attributable to stockholders of common stock

$ 21,767 $ ( 10,318 ) $ ( 121,974 )

Weighted average shares used to calculate basic income (loss) per share

82,391 48,710 31,514

Dilutive effect of stock options, restricted stock and performance units 1,189 — —

Weighted average shares used to calculate diluted income (loss) per share

83,580 48,710 31,514

Basic income (loss) per share

Continuing operations $ 0.26 $ ( 0.25 ) $ ( 3.89 )

Discontinued operations — 0.04 0.02

Basic and diluted loss per share $ ( 0.21 ) $ ( 3.87 )

In July 2019, the Company completed a rights offering to existing common stockholders (the “2019 Rights Offering”).

Because the rights issuance was offered to all existing stockholders at an exercise price that was less than the fair value of our Common Stock, as of such time, the weighted average shares outstanding and basic and diluted earnings (loss) per share were adjusted retroactively to reflect the bonus element of the rights offering for all periods presented by a factor of 1.0875 .

Weighted average shares, prior to giving effect to the 2019 Rights Offering, in 2019 were 11,635 thousand.

Because we incurred a net loss in the years ended December 31, 2020 and 2019, respectively basic and diluted shares are the same.

If we had net income in years ended December 31, 2020 and 2019 diluted shares would include an additional 610.9 thousand and 150.0 thousand shares, respectively.

We excluded 1.3 million and 0.3 million shares related to stock options from the diluted share calculation for the years ended December 31, 2020 and 2019, respectively, because their effect would have been anti-dilutive.

Basic income (loss) per share

$ 0.26 $ ( 0.21 ) $ ( 3.87 )

Diluted income (loss) per share

Continuing operations $ 0.26 $ ( 0.25 ) $ ( 3.89 )

Discontinued operations — 0.04 0.02

Diluted income (loss) per share

$ 0.26 $ ( 0.21 ) $ ( 3.87 )

Because we incurred a net loss in the years ended December 31, 2020 and 2019 basic and diluted shares are the same.

If we had net income in the years ended December 31, 2020 and 2019 diluted shares would include an additional 610.9 thousand and 150.0 thousand shares, respectively.

We exclu ded 0.3 million , 1.3 million, and 0.3 million shares related to stock options from the diluted share calculation for the years ended December 31, 2021, 2020, and 2019 respectively, because their effect would have been anti-dilutive.

NOTE 4 – SEGMENT REPORTING

Effective September 30, 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, we realigned certain businesses and management structure to recognize how we allocate resources and analyze the operating performance of our businesses.

This realignment changed our reportable segments beginning with our third quarter of 2020.

All periods have been recast to reflect this change.

Our operations are assessed based on three reportable segments as described in Note 2.

6 unchanged sentences

Vølund 60,671 66,397 111,432

Fosler 12,490 — —

156,800 156,187 205,551

2 unchanged sentences

SPIG 55,615 52,341 80,729

BWV-AB 10,441 10,429

GMAB 19,949 10,441 10,429

133,826 107,968 275,635

3 unchanged sentences

Eliminations ( 592 ) ( 2,806 ) ( 31,819 )

$ 566,317 $ 859,111

Total Revenues $ 723,363 $ 566,317 $ 859,111

The presentation of the components of our adjusted EBITDA in the table below is consistent with the way our chief operating decision maker reviews the results of our operations and makes strategic decisions about our business.

Items such as gains or losses on asset sales, MTM pension adjustments, restructuring and spin costs, impairments, losses on debt extinguishment, costs related to financial consulting required under our U.S.

Revolving Credit Facility and other costs that may not be directly controllable by segment management are not allocated to the segments.

Adjusted EBITDA for each segment is presented below with a reconciliation to net loss attributable to stockholders.

Items such as gains or losses on asset sales, net pension benefits, restructuring costs, impairments, gains and losses on debt extinguishment, costs related to financial consulting, research and development costs and other costs that may not be directly controllable by segment management are not allocated to the segments.

Adjusted EBITDA for each segment is presented below with a reconciliation from net income (loss).

Year ended December 31,

(in thousands) 2021 2020 2019

Net income (loss) $ 31,538 $ ( 10,297 ) $ ( 129,039 )

Interest expense 41,359 60,713 95,266

Income tax (benefit) expense ( 2,224 ) 8,179 5,286

Depreciation & amortization 18,337 16,805 23,605

EBITDA 89,010 75,400 ( 4,882 )

Benefit plans, net ( 48,142 ) ( 5,600 ) ( 22,800 )

Gain on sales, net ( 13,984 ) ( 3,155 ) ( 339 )

(Gain) loss on debt extinguishment ( 6,530 ) 6,194 3,969

Stock compensation 10,476 4,587 3,376

Restructuring activities and business services transition costs 10,726 11,849 11,707

Advisory fees for settlement costs and liquidity planning 5,480 6,357 11,824

Litigation legal costs 4,894 2,137 475

Acquisition pursuit and related costs 4,841 — —

Product development (1)

Foreign exchange 4,294 ( 58,799 ) 16,602

Financial advisory services 2,709 4,384 9,069

Other - net 1,489 1,128 ( 285 )

Loss from business held for sale 483 467 5,850

Loss from a non-strategic business 116 2,559 5,518

Settlement cost to exit contract (2)

Income from discontinued operations — ( 1,800 ) ( 694 )

Adjusted EBITDA (3)

$ 70,575 $ 45,708 $ 45,965

(1) Costs associated with development of commercially viable products that are ready to go to market.

(2) In March 2019, we entered into a settlement in connection with an additional B&W Renewable waste-to-energy EPC contract, for which notice to proceed was not given and the contract was not started.

The settlement eliminated our obligations to act, and our risk related to acting, as the prime EPC should the project have moved forward.

(3)) Adjusted EBITDA for the twelve months ended December 31, 2020 includes a $ 26 million non-recurring loss recovery related to certain historical EPC loss contracts in the third quarter.

Year ended December 31,

(in thousands) 2021 2020 2019

Adjusted EBITDA

B&W Renewable segment (1)

$ 23,219 $ 24,957 $ 1,617

B&W Environmental segment 11,773 3,503 12,553

B&W Thermal segment 49,143 36,052 52,235

35,435 51,353

Corporate ( 12,467 ) ( 14,425 ) ( 17,579 )

Research and development costs ( 4,379 ) ( 2,861 )

Research and development benefit (costs) ( 1,093 ) ( 4,379 ) ( 2,861 )

$ 70,575 $ 45,708 $ 45,965

Restructuring activities ( 11,849 ) ( 11,707 )

Financial advisory services ( 4,384 ) ( 9,069 )

Settlement cost to exit Vølund contract (3)

Advisory fees for settlement costs and liquidity planning ( 6,357 ) ( 11,824 )

Litigation fees and settlement ( 2,137 ) ( 475 )

Loss on business held for sale ( 467 ) ( 5,850 )

Stock compensation ( 4,587 ) ( 3,376 )

Interest on letters of credit included in cost of operations ( 917 ) ( 365 )

Depreciation & amortization ( 16,805 ) ( 23,605 )

Loss from a non-strategic business ( 2,559 ) ( 5,518 )

Gain on asset disposals, net 3,263 3,940

Operating loss ( 1,737 ) ( 29,382 )

Interest expense, net ( 59,150 ) ( 93,978 )

Loss on debt extinguishment ( 6,194 ) ( 3,969 )

Loss on sale of business ( 108 ) ( 3,601 )

Net pension benefit before MTM 28,754 13,996

MTM (loss) gain from benefit plans ( 23,154 ) 8,804

Foreign exchange 58,799 ( 16,602 )

Other – net ( 1,128 ) 285

Total other expense ( 2,181 ) ( 95,065 )

Loss before income tax expense ( 3,918 ) ( 124,447 )

Income tax expense 8,179 5,286

Loss from continuing operations ( 12,097 ) ( 129,733 )

Income from discontinued operations, net of tax 1,800 694

Net loss ( 10,297 ) ( 129,039 )

Net (income) loss attributable to non-controlling interest ( 21 ) 7,065

Net loss attributable to stockholders $ ( 10,318 ) $ ( 121,974 )

(1) During the year ended December 31, 2020, we redefined our definition of adjusted EBITDA to eliminate the effects of certain items including loss from a non-strategic business, interest on letters of credit included in cost of operations and loss on business held for sale.

Consequently, adjusted EBITDA in prior periods have been revised to conform with the revised definition and present separate reconciling items in our reconciliation.

(2) Adjusted EBITDA for the year ended December 31, 2020, includes the recognition of a $ 26.0 million loss recovery settlement related to certain historical EPC loss contracts in the third quarter.

(3) In March 2019, we entered into a settlement in connection with an additional B&W Renewable waste-to-energy EPC contract, for which notice to proceed was not given and the contract was not started.

The settlement eliminated our obligations to act, and our risk related to acting, as the prime EPC should the project have moved forward .

(1) Adjusted EBITDA for the twelve months ended December 31, 2020 includes a $ 26 million non-recurring loss recovery related to certain historical EPC loss contracts in the third quarter.

We do not separately identify or report our assets by segment as our chief operating decision maker does not consider assets by segment to be a critical measure by which performance is measured.

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 account for more than 10% of our consolidated revenues for the years ended December 31, 2020 and 2019.

We estimate that 47 %, 43 % and 45 % of our consolidated revenues in 2021, 2020, and 2019, respectively, were related to coal-fired power plants.

11 unchanged sentences

United Kingdom 26,722 25,811 54,347

Indonesia 19,644 16,739

Sweden 22,391 11,430 18,789

Israel 14,110 1,635 635

Saudi Arabia 12,529 9,545 5,243

Hong Kong 11,056 4,490 4,524

China 10,028 8,461 18,430

1 unchanged sentence

South Korea 3,961 4,050 14,443

Indonesia 1,853 19,644 16,739

Aggregate of all other countries, each with less than $10 million in revenues 104,347 91,161 110,388

8 unchanged sentences

United Kingdom 5,722 5,274 5,469

Italy 1,565 1,881 2,172

Aggregate of all other countries 2,180 5,689 2,259

30 unchanged sentences

Changes in Contract Estimates

In the years ended December 31, 2020 and 2019, we recognized changes in estimated gross profit related to long-term contracts accounted for on the percentage-of-completion basis, which are summarized as follows:

In the years ended December 31, 2021, 2020 and 2019 we recognized changes in estimated gross profit related to long-term contracts accounted for on the over time basis, which are summarized as follows:

Year ended December 31,

(in thousands) 2021 2020 2019

Increases in gross profits for changes in estimates for over time contracts (1)

Increases in gross profit for changes in estimates for over time contracts (1)

$ 16,042 $ 43,597 $ 34,622

Decreases in gross profits for changes in estimates for over time contracts ( 17,480 ) ( 50,050 )

Net changes in gross profits for changes in estimates for over time contracts $ 26,117 $ ( 15,428 )

(1) Increases in gross profits for changes in estimates for over time contracts reflects insurance loss recovery of $ 26.0 million in the year ended December 31, 2020.

Decreases in gross profit for changes in estimates for over time contracts ( 6,531 ) ( 17,480 ) ( 50,050 )

Net changes in gross profit for changes in estimates for over time contracts $ 9,511 $ 26,117 $ ( 15,428 )

(1) Increases in gross profits for changes in estimates for over time contracts reflects a non-recurring loss recovery of $ 26.0 million in the year ended December 31, 2020.

B&W Renewable EPC Loss Contracts

1 unchanged sentence

The scope of these EPC (Engineer, Procure and Construct) contracts extended beyond our core technology, products and services.

In addition to these loss contracts, we had one remaining extended scope contract in our B&W Renewable segment which turned into a loss contract in 2019.

In the years ended December 31, 2020 and 2019, we recorded $ 3.7 million and $ 6.9 million in net losses, respectively, inclusive of warranty expense as described in Note 11, resulting from changes in the estimated revenues and costs to complete the six European B&W Renewable EPC loss contracts.

We did no t change our estimate of liquidated damages in the year ended December 31, 2020.

The changes in estimates in the year ended December 31, 2019 included increases in our estimates of anticipated liquidated damages that reduced revenue associated with these six contracts by $ 1.8 million.

Total anticipated liquidated damages associated with these six contracts were $ 95.6 million and $ 86.8 million at December 31, 2020 and December 31, 2019, respectively.

As of December 31, 2019, five of the six European B&W Renewable EPC loss contracts had been turned over to the customer, with only punch list or agreed remediation items and performance testing remaining, some of which are expected to be performed during the customers' scheduled maintenance outages.

Turnover is not applicable to the fifth loss contract under the terms of the March 29, 2019 settlement agreement with the customers of the second and fifth loss contracts, who are related parties to each other.

Under that settlement agreement, we limited our remaining risk related to these contracts by paying a combined £ 70 million ($ 91.5 million) on April 5, 2019 in exchange for limiting and further defining our obligations under the second and fifth loss contracts, including waiver of the rejection and termination rights on the fifth loss contract that could have resulted in repayment of all monies paid to us and our former civil construction partner (up to approximately $ 144 million), and requirement to restore the property to its original state if the customer exercised this contractual rejection right.

On the fifth loss contract, we agreed to continue to support construction services to complete certain key systems of the plant by May 31, 2019, for which penalty for failure to complete these systems is limited to the unspent portion of our quoted cost of the activities through that date.

The settlement eliminated all historical claims and remaining liquidated damages.

In accordance with the settlement, we have no further obligation related to the fifth loss contract other than customary warranty of core products if the plant is used as a biomass plant as designed.

We estimated the portion of this settlement related to waiver of the rejection right on the fifth loss contract was $ 81.1 million, which was recorded in the fourth quarter of 2018 as a reduction in the selling price.

We continue to pursue claims against subcontractors..

For the second loss contract, the settlement limited the remaining performance obligations and settled historic claims for nonconformance and delays, and we turned over the plant in May 2019, and subsequently began the operations and maintenance contract to operate this plant.

As of December 31, 2020, the status of these six B&W Renewable EPC loss contracts was as follows:

• The first contract, a waste-to-energy plant in Denmark, became a loss contract in 2016.

As of December 31, 2020, this contract was approximately 100 % complete and construction activities are complete as of the date of this report.

The unit became operational during the second quarter of 2017.

A settlement was reached with the customer to achieve takeover on January 31, 2019, after which only punch list items and other agreed to remediation items remain, most of which are expected to be performed during the customer's scheduled maintenance outages.

As of January 31, 2019, the contract is in the warranty phase.

On January 15, 2021 we reached agreement with the customer to achieve final takeover which completes the base warranty period and confirms the agreed to remaining remediation items.

During the year ended December 31, 2020, we recognized additional contract losses of $ 2.7 million, inclusive of warranty.

Our estimate at completion as of December 31, 2020 includes $ 9.8 million of total expected liquidated damages.

As of December 31, 2020, the reserve for estimated contract losses recorded in other accrued liabilities in our Consolidated Balance Sheets was $ 0.1 million.

In the year ended December 31, 2019, we recognized additional contract losses of $ 2.3 million as a result of identifying additional remediation costs.

As of December 31, 2019, this contract had $ 1.1 million of accrued losses and was approximately 99 % complete.

• The second contract, a biomass plant in the United Kingdom, became a loss contract in 2016.

As of December 31, 2020, this contract was approximately 100 % complete.

Trial operations began in April 2019 and takeover by the customer occurred effective May 2019.

This project is subject to the March 29, 2019 settlement agreement described above.

During the year ended December 31, 2020, we recognized additional contract losses of $ 0.7 million on this contract, inclusive of warranty, as a result of additional punch list and other commissioning costs.

Our estimate at completion as of December 31, 2020 includes $ 20.6 million of total expected liquidated damages due to schedule delays.

Our estimates at completion as of December 31, 2020 and 2019 also include contractual bonus opportunities for guaranteed higher power output and other performance metrics.

As of December 31, 2020, the reserve for estimated contract losses recorded in other accrued liabilities in our Consolidated Balance Sheets was $ 0.1 million.

In the year ended December 31, 2019, we recognized contract losses of $ 2.3 million on this contract as a result of repairs required during startup commissioning activities, additional expected punch list and other commissioning costs, and changes in construction cost estimates.

As of December 31, 2019, this contract had no accrued losses and was approximately 100 % complete.

• The third contract, a biomass plant in Denmark, became a loss contract in 2016.

As of December 31, 2020, this contract was approximately 100 % complete.

Warranty began in March 2018, when we agreed to a partial takeover with the customer, and we agreed to a full takeover by the customer at the end of October 2018, when we also agreed to a scheduled timeline for remaining punch list activities to be completed around the customer's future planned outages.

During the year ended December 31, 2020, we recognized additional contract losses of $ 1.1 million, inclusive of warranty.

Our estimate at completion as of December 31, 2020 includes $ 7.3 million of total expected liquidated damages due to schedule delays.

As of December 31, 2020, we expect no future charges due to this contract and, accordingly, we have no reserve for estimated contract losses.

In the year ended December 31, 2019, we recognized additional contract losses of $ 0.1 million as a result of changes in the estimated costs at completion.

As of December 31, 2019, this contract had no accrued losses and was approximately 100 % complete.

• The fourth contract, a biomass plant in the United Kingdom, became a loss contract in 2016.

As of December 31, 2020, this contract was approximately 100 % complete.

Trial operations began in November 2018 and takeover by the customer occurred in February 2019, after which only final performance testing, for which performance metrics have been previously demonstrated, and punch list and other agreed upon items remain, some of which are expected to be performed during the customer's scheduled maintenance outages.

During the year ended December 31, 2020, we recognized additional contract losses of $ 1.1 million on this contract, inclusive of warranty, due to changes in cost to complete remaining punch list items and other close out items.

Our estimate at completion as of December 31, 2020 includes $ 22.5 million of total expected liquidated damages due to schedule delays.

Our estimates at completion as of December 31, 2020 also include contractual bonus opportunities for guaranteed higher power output and other performance metrics.

As of December 31, 2020, the reserve for estimated contract losses recorded in other accrued liabilities in our Consolidated Balance Sheets was $ 0.1 million.

In the year ended December 31, 2019, we recognized additional contract losses of $ 5.2 million on this contract due to changes in estimated bonus revenue and cost to complete remaining punch list, remediation of certain performance guarantees and other close out items.

As of December 31, 2019, this contract had $ 0.2 million of accrued losses and was approximately 100 % complete.

• The fifth contract, a biomass plant in the United Kingdom, became a loss contract in 2017.

As of December 31, 2020, this contract was approximately 100 % complete.

This project is subject to the March 29, 2019 settlement agreement described above.

We continue to pursue claims against subcontractors.

Under the settlement, our remaining performance obligations were limited to construction support services to complete certain key systems of the plant by May 31, 2019.

The settlement also eliminated all historical claims and remaining liquidated damages.

Remaining items at December 31, 2020 primarily related to subcontract close outs and other finalization items under the terms of the settlement.

During the year ended December 31, 2020, our estimated loss on the contract improved by $ 0.4 million.

Our estimate at completion as of December 31, 2020, includes $ 14.7 million of total expected liquidated damages due to schedule delays.

Our estimates at completion as of December 31, 2020 also include contractual bonus opportunities for guaranteed higher power output and other performance metrics.

As of December 31, 2020, we expect no future charges due to this contract and, accordingly, we have no reserve for estimated contract losses.

During the year ended December 31, 2019, our estimated loss on the contract improved by $ 5.6 million inclusive of warranty.

As of December 31, 2019, this contract had $ 2.4 million of accrued losses and was approximately 98 % complete.

• The sixth contract, a waste-to-energy plant in the United Kingdom, became a loss contract in 2017.

As of December 31, 2020, this contract was approximately 100 % complete.

The contract is in the warranty phase.

During the year ended December 31, 2020, our estimated loss on the contract improved by $ 1.5 million, inclusive of warranty.

Our estimate at completion as of December 31, 2020 includes $ 20.6 million of total expected liquidated damages due to schedule delays.

As of December 31, 2020, we expect no future charges due to this contract and, accordingly, we have no reserve for estimated contract losses.

In the year ended December 31, 2019, we revised our revenue and costs at completion for this contract, which resulted in additional contract losses of $ 2.5 million related to matters encountered in completing punch list items.

As of December 31, 2019, this contract had $ 0.3 million of accrued losses and was approximately 99 % complete.

In the fourth quarter of 2019, one of our other B&W Renewable energy contracts turned into a loss contract (estimate loss of $ 0.2 million) due to the extension of time and other start-up costs associated with the completion of the trial operations run and turnover to the client.

This contract was turned over to the client in October 2019.

During the years ended December 31, 2020 and 2019, we recognized additional charges of $ 2.5 million and $ 3.4 million, respectively, on this contract.

In September 2017, we identified the failure of a structural steel beam on the fifth contract, which stopped work in the boiler building and other areas pending corrective actions to stabilize the structure.

Provisional regulatory approval to begin structural repairs to the failed beam was obtained on March 29, 2018 (later than previously estimated), and full approval to proceed with repairs was obtained in April 2018.

Full access to the site was obtained on June 6, 2018 after completion of the repairs to the structure.

The engineering, design and manufacturing of the steel structure were the responsibility of our subcontractors.

A similar design was also used on the second and fourth contracts, and although no structural failure occurred on these two other contracts, work was also stopped in certain restricted areas while we added reinforcement to the structures, which also resulted in delays that lasted until late January 2018.

The total costs related to the structural steel issues on these three contracts, including contract delays, are estimated to be approximately $ 36 million, which is included in the December 31, 2020 estimated losses at completion for these three contracts.

We continue to pursue recovery of this cost from responsible subcontractors.

In June 2019, we agreed in principle to a settlement agreement under one insurance policy related to recover GBP 2.8 million ($ 3.5 million) of certain losses on the fifth project;

which our insurer paid us in September 2019.

In addition to these loss contracts, we have one remaining extended scope contract in our Babcock & Wilcox Renewable segment which turned into a loss contract in the fourth quarter of 2019.

Five of the six contracts were 100 % complete and the remaining one contract was nearly 100 % complete at December 31, 2021, with only limited warranty obligations remaining, and all have been turned over to the customers.

In the years ended December 31, 2021 and 2020, we recorded $ 42 thousand in net gains and $ 3.7 million in net losses, respectively, inclusive of warranty expense as described in Note 11, resulting from changes in the estimated revenues and costs to complete those contracts.

All liquidated damages associated with these six contracts have been settled and paid as of December 31, 2020.

In October 2020, we entered into a settlement agreement with an insurer under which we received a settlement of $ 26.0 million to settle claims in connection with five of six European B&W Renewable EPC loss contracts disclosed above.

We recognized this loss recovery of $ 26.0 million as a reduction of our Cost of operations in our Consolidated Statements of Operations.

On October 23, 2020, we received $ 26.0 million of gross proceeds under the settlement agreement.

As required by the Company’s U.S.

Revolving Credit Facility, 50 % of the net proceeds (gross proceeds less costs) or $ 8.0 million of the settlement received by the Company was applied as a permanent reduction of the U.S.

Revolving Credit Facility in October 2020.

The Company is continuing to pursue other potential loss recoveries and claims where appropriate and available.

Other B&W Renewable Contract Settlement

In March 2019, we entered into a settlement in connection with an additional European waste-to-energy EPC contract, for which notice to proceed was not given and the contract was not started.

The £ 5.0 million (approximately $ 6.6 million) payment on April 5, 2019 for the settlement eliminated our obligations to act, and our risk related to acting, as the prime EPC should the project have moved forward.

We recognized this non-recurring loss recovery of $ 26.0 million as a reduction of our c ost of operations in our Consolidated Statements of Operation s in 2020.

During 2021, the Company settled a dispute with a subcontractor for project costs related to three of the Renewable EPC loss contracts described above.

Accordingly, we recognized this settlement as a reduction of our cost of operations in our Consolidated Statements of Operations and recorded the receivable in a ccounts receivable - other in our Consolidated Balance Sheets at December 31, 2021 and in the Table above.

The Company, as a normal part of its ongoing business operations, is continuing to pursue other additional potential claims and recoveries from subcontractors and others where appropriate and available.

B&W Environmental Loss Contracts

At December 31, 2020, the B&W Environmental segment had two significant loss contracts, each of which are contracts for a dry cooling system for a gas-fired power plant in the United States.

In the years ended December 31, 2020 and 2019, we recorded $ 1.3 million and $ 5.6 million in net losses, respectively, resulting from changes in estimated revenue and cost to complete these two loss contracts.

At December 31, 2020, construction and procurement are complete on the first loss contract.

Overall, the contract is approximately 100 % complete as of 2020 with only warranty obligations remaining.

As of December 31, 2020, we have no reserve for estimated contract losses.

As of December 31, 2019, this contract had accrued losses of $ 0.1 million and was approximately 99 % complete.

Construction is being performed by the B&W Thermal segment, but the contract loss is included in the B&W Environmental segment.

At December 31, 2020, the design and procurement are nearing completion on the second loss contract.

Overall, the contract is approximately 99 % complete and final completion is expected to be in the first quarter of 2021.

During the year ended December 31, 2020, we recognized additional contract losses of $ 1.3 million on this contract due to issues with the seismic design and fan screens.

As of December 31, 2020, the reserve for estimated contract losses recorded in other accrued liabilities in our Consolidated Balance Sheets was $ 0.1 million related to this contract.

In the year ended December 31, 2019, we recognized additional contract losses of $ 3.3 million on this contract due to issues with seismic design and fan screens.

As of December 31, 2019, this contract had accrued losses of $ 0.9 million and was 87 % complete.

At December 31, 2021, the B&W Environmental segment had two significant loss contracts of which both contracts were nearly 100 % complete.

In the year ended December 31, 2021 our estimated loss on these contracts improved by $ 0.4 million.

In the twelve months ended December 31, 2020 and 2019, we recognized $ 1.3 million and $ 5.6 million, respectively, of additional charges on these contracts.

NOTE 6 – INVENTORIES

Inventories are stated at the lower of cost or net realizable value.

During the fourth quarter of 2021, the Company voluntarily changed its method of accounting for certain domestic inventory previously valued by the LIFO method to the FIFO method.

The cumulative effect of this change on periods presented prior to 2019 resulted in an increase in retained earnings of $ 7.3 million at December 31, 2018.

The impact on earnings was a decrease of $ 0.1 million and an increase of $ 0.4 million for the years ending December 31, 2020 and 2019, respectively.

The FIFO method of accounting for inventory is preferable because it more closely matches the physical inventory flow, better reflects the current value of inventories on our Consolidated

Balance Sheets, improves our financial reporting by having a consistent method across the organization, and increases comparability with certain peers of the Company.

The components of inventories are as follows:

Year ended December 31,

(in thousands) 2020 2019

(in thousands) December 31, 2021 December 31, 2020 (1)

Raw materials and supplies $ 56,352 $ 53,944

2 unchanged sentences

Total inventories $ 79,527 $ 74,446

NOTE 7 – PROPERTY, PLANT & EQUIPMENT, & FINANCE LEASE

Property, plant and equipment, and finance lease less accumulated depreciation is as follows:

Year ended December 31,

(in thousands) 2020 2019

(1) December 31, 2020 amounts have been revised to reflect the change in inventory accounting method, as described above.

As a result of the retrospective application of this change in accounting method, the following financial statement line items within the accompanying financial statements were adjusted, as follows:

December 31, 2021 December 31, 2020

(in thousands) As Computed Under LIFO As Reported Under FIFO Effect

of Change As Computed Under LIFO As Reported Under FIFO Effect

Consolidated Balance Sheets

Inventories $ 72,242 $ 79,527 $ 7,285 $ 67,161 $ 74,446 $ 7,285

Accumulated deficit ( 1,328,439 ) ( 1,321,154 ) 7,285 ( 1,350,206 ) ( 1,342,921 ) 7,285

NOTE 7 – PR OPERTY, PLANT & EQUIPMENT, & FINANCE LEASE

Property, plant and equipment less accumulated depreciation is as follows:

(in thousands) December 31, 2021 December 31, 2020

Land $ 1,489 $ 1,584

8 unchanged sentences

Net property, plant and equipment, and finance lease $ 85,627 $ 85,078

In December 2019, we consolidated all of our Barberton and most of our Copley, Ohio operations into new, leased office space in Akron, Ohio and $ 4.9 million of accelerated depreciation was recognized during the year ended December 31, 2019.

NOTE 8 - GOODWILL

The following summarizes the changes in the net carrying amount of goodwill as of December 31, 2020 after giving effect to the reallocation of our goodwill across our new reportable segments as more fully described below:

(in thousands) B&W Renewable B&W Environmental B&W Thermal Total

The following summarizes the changes in the net carrying amount of goodwill as of December 31, 2021:

(in thousands) B&W

Renewable B&W Environmental B&W

Thermal Total

Balance at December 31, 2020 $ 10,211 $ 5,673 $ 31,479 $ 47,363

Addition - Fosler Construction (1)

51,979 — — 51,979

Addition - VODA (1)

17,176 — — 17,176

Currency translation adjustments ( 9 ) ( 6 ) ( 41 ) ( 56 )

Balance at December 31, 2021 $ 79,357 $ 5,667 $ 31,438 $ 116,462

(1) As described in Note 26, we are in the process of completing the purchase price allocation associated with the Fosler Construction and VODA acquisitions and as a result, the provisional measurements of goodwill associated with these acquisitions are subject to change.

Goodwill is tested for impairment annually and when impairment indicators exist.

No impairment was recorded during the years ended December 31, 2020 and December 31, 2019.

Because the B&W Thermal, B&W Construction Co., LLC, B&W Renewable and B&W Environmental reporting units each had negative carrying values, reasonable changes in assumptions would not indicate impairment.

No impairment indicators were identified during the year ended December 31, 2021.

In conducting the annual impairment test for goodwill, the Company has the option to first assess qualitative factors to determine whether it is more likely than not the fair value of any reporting unit is less than its carrying amount.

2 unchanged sentences

Alternatively, the Company may elect to proceed directly to the quantitative impairment test.

During the annual goodwill impairment testing as of October 1, 2020, the Company first assessed qualitative factors to determine whether it was necessary to perform the quantitative impairment test.

Based on the assessment of qualitative

factors, including the fact that the company had performed a quantitative impairment test as of September 30, 2020, it was determined that it is not more likely than not the fair value of any reporting unit was less than its carrying amount.

No impairment charges were recorded as a result of the qualitative testing performed.

On September 30, 2020, the previous Babcock & Wilcox and Babcock & Wilcox Construction Co., LLC reporting units became the B&W Thermal and B&W Construction Co., LLC reporting units, respectively, within the Babcock & Wilcox Thermal operating segment.

The Company also identified the B&W Renewable and B&W Environmental reporting units related to the transfer of businesses from the former Babcock & Wilcox reporting unit to the Babcock & Wilcox Renewable and Babcock & Wilcox Environmental operating segments.

Consequently, the Company re-allocated goodwill between the affected reporting units based on their relative fair values and compared the carrying value to the fair value of each impacted reporting unit.

In conjunction with the changes mentioned above, the Company determined that this represented a triggering event for an interim goodwill assessment and performed a goodwill impairment test of the impacted reporting units on a before and after basis and based on the assessment, as of September 30, 2020, concluded that the fair value of the impacted reporting units exceeded their carrying values.

Accordingly, no impairment was indicated during the interim assessment, as of September 30, 2020.

In the first quarter of 2020, our share price declined significantly, which we considered to be a triggering event for an interim goodwill assessment.

We primarily attributed the significant decline in our share price to the current macroeconomic conditions and impacts COVID-19 will have on our operations.

Based on the interim assessment, as of March 31, 2020, no impairment was indicated during the first quarter of 2020.

No impairment indicators were identified during 2019.

During the annual goodwill impairment testing as of October 1, 2021, the Company elected to perform a quantitative impairment test.

No impairment charges were recorded as a result of the quantitative testing performed.

NOTE 9 – INTANGIBLE ASSETS

Our intangible assets are as follows:

Year ended December 31,

(in thousands) 2020 2019

(in thousands) December 31, 2021 December 31, 2020

Definite-lived intangible assets (1)

3 unchanged sentences

Tradename 12,747 13,088

Acquired backlog 3,100 —

All other 9,319 9,262

4 unchanged sentences

Tradename amortization ( 5,425 ) ( 4,831 )

Acquired backlog ( 1,620 ) —

All other amortization ( 9,205 ) ( 9,252 )

4 unchanged sentences

Total intangible assets, net $ 43,795 $ 23,908

(1) As described in Note 26, we are in the process of completing the purchase price allocation associated with the Fosler Construction and VODA acquisitions and as a result, the increase in intangible assets associated with these acquisitions are subject to change.

The following summarizes the changes in the carrying amount of intangible assets:

2 unchanged sentences

Balance at beginning of period $ 23,908 $ 25,300

Business acquisitions and adjustments (1)

Amortization expense ( 5,128 ) ( 3,406 )

Currency translation adjustments and other 2,014 ( 1,219 )

Currency translation adjustments ( 1,568 ) 2,014

Balance at end of the period $ 43,795 $ 23,908

(1) As described in Note 26, we are in the process of completing the purchase price allocation associated with the Fosler Construction and VODA acquisitions and as a result, the increase in amortization expense associated with these acquisitions are subject to change.

Amortization of intangible assets is included in cost of operations and SG&A in our Consolidated Statement of Operations but is not allocated to segment results.

Estimated future intangible asset amortization expense is as follows (in thousands):

Estimated future intangible asset amortization expense, including the preliminary amortization expense resulting from the acquisitions of Fosler Construction and VODA, during the year ended December 31, 2021 is as follows (in thousands):

Amortization Expense (1)

5 unchanged sentences

Thereafter 17,313

Long-lived assets, including definite-lived intangible assets are reviewed for impairment whenever circumstances indicate that the carrying amount might not be recoverable.

The circumstances leading to the first quarter interim goodwill assessment as described in Note 8 also triggered an evaluation of long-lived assets, including intangible assets.

The Company performed an analysis as required by ASC 360-10-35 to assess the recoverability of other long-lived assets in its B&W Renewable and B&W Environmental asset groups.

With respect to these asset groups the sum of the undiscounted cash flows and the residual value of the primary assets exceeded the carrying value of both the B&W Vølund and B&W SPIG asset groups and no impairment was indicated during the first quarter of 2020.

Interim impairment testing was performed for the B&W Renewable and B&W Environmental asset groups due to continued net operating losses and significant decreases in revenues experienced during 2019.

In our interim test as of September 30, 2019, the sum of the undiscounted cash flows and the residual value of the primary assets exceeded the carrying value of both the B&W Renewable and B&W Environmental asset groups and no impairment was indicated.

(1) As described in Note 26, we are in the process of completing the purchase price allocation associated with the Fosler Construction and VODA acquisitions and as a result, the estimated future intangible asset amortization expense associated with these acquisitions are subject to change.

As of December 31, 2021 and 2020, the B&W Vølund asset group had $ 0.7 million and $ 0.5 million of identifiable intangible assets, net of accumulated amortization, respectively.

As of December 31, 2021 and 2020, the B&W SPIG asset group had $ 16.6 million and $ 21.1 million of identifiable intangible assets, net of accumulated amortization, respectively.

We believe the estimates and assumptions utilized in our interim impairment testing are reasonable.

However, actual results could differ substantially from those used in our valuations.

To the extent such factors result in a failure to achieve the level of undiscounted forecasted cash flows used to estimate fair value for the purpose determining whether or not an impairment calculation should be performed for the intangible assets, or if we committed to a strategy to sell one or more of the reporting units in the near future as we continue to reevaluate our ongoing operations, we may be required to record non-cash impairment charges in the future which could have an adverse impact on our business, financial condition and results of operations.

See Note 26 for intangible assets identified in conjunction with the acquisitions of Fosler Construction and VODA, which are subject to change pending the finalization of the purchase price allocation associated with these acquisitions.

NOTE 10 – LEASES

Accounting for Leases

We determine if an arrangement is a lease at inception.

Operating leases are included in right-of-use (“ROU”) assets , operating lease liabilities and non-current operating lease liabilities in the Consolidated Balance Sheets.

Finance leases are included in net property, plant and equipment, and finance lease, other accrued liabilities and other non-current finance liabilities in the Consolidated Balance Sheets.

Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

As substantially all of our leases do not provide an

implicit rate, we use our incremental borrowing rate based on the information available at lease commencement date in determining the present value of future payments.

Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located.

The ROU assets also include any prepaid lease payments made and initial direct costs incurred and excludes lease incentives.

Our lease terms may include options to extend or terminate the lease, which we recognize when it is reasonably certain that we will exercise that option.

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

In December 2019, we consolidated all of our Barberton and most of our Copley, Ohio operations into new leased office space in Akron, Ohio as described in Note 7.

The lease is classified as a finance lease and has an initial term of fifteen years , with an option to extend up to two additional ten-year terms and no option of early termination.

As we are not reasonably certain to exercise the option to extend the lease beyond the initial base term, only payments related to the initial term were included in the initial ROU asset.

Base rent will increase two percent annually, making the total future minimum payments during the initial term of the lease approximately $ 51.6 million as of December 31, 2020.

Based upon an initial term of fifteen years , an incremental borrowing rate of 8 % was used to determine the ROU asset, as no implicit rate was identified in the lease agreement.

We recorded a $ 28.3 million ROU asset in net property, plant and equipment, and finance lease and corresponding liabilities in other accrued liabilities and other non-current finance liabilities in the Consolidated Balance Sheets as of December 31, 2020 .

We have operating and finance leases for real estate, vehicles, and certain equipment.

Our leases have remaining lease terms of up to 15 years, some of which may include options to extend the leases for up to 10 years, and some of which may include options to terminate the leases within 1 year.

Certain real property assets for our Copley, Ohio location were sold on March 15, 2021, as described in Note 26.

In conjunction with the sale, we executed a leaseback agreement commencing March 16, 2021 and expiring on March 31, 2033.

The lease is classified as an operating lease with total future minimum payments during the initial term of the lease of approximately $ 5.6 million as of December 31, 2021.

An incremental borrowing rate of 7.71 % was used to determine the right-of-use (the "ROU") asset.

As of December 31, 2021, a $ 3.5 million ROU asset is recorded in r ight of use assets with corresponding liabilities of $ 3.8 million in other accrued liabilities and other non-current operating liabilities in our Consolidated Balance Sheets as of December 31, 2021.

Certain real property assets for our Lancaster, Ohio location were sold on August 13, 2021, as described in Note 26.

In conjunction with the sale, we executed a leaseback agreement commencing August 13, 2021 and expiring on August 31, 2041.

The lease is classified as an operating lease with total future minimum payments during the initial term of the lease of approximately $ 36.6 million as of December 31, 2021.

An incremental borrowing rate of 8.215 % was used to determine the ROU asset.

We recorded a $ 19.4 million ROU asset in right of use assets and corresponding liabilities of $ 19.5 million in other accrued liabilities and other non-current operating liabilities in our Consolidated Balance Sheets as of December 31, 2021.

In conjunction with our acquisition of Fosler Construction, as described in Note 26, w e assumed two leases classified as operating leases with total future minimum payments during the remaining term of the leases of approximately $ 1.5 million.

As of December 31, 2021, a $ 1.1 million ROU asset is recorded in right-of-use assets with corresponding liabilities of $ 1.1 million in operating lease liabilities and non-current operating lease liabilities in our Consolidated Balance Sheets.

As of December 31, 2021, there was one lease classified as a finance lease with total future minimum payments during the remaining term of the leases of approximately $ 1.5 million.

An incremental borrowing rate of 6.65 % was used to determine the ROU asset.

We recorded a $ 0.7 million ROU asset in net property, plant and equipment, and finance lease and corresponding liabilities of $ 0.7 million in other accrued liabilities and other non-current finance liabilities in our Consolidated Balance Sheets as of December 31, 2021 .

The components of lease expense included on our Consolidated Statements of Operations were as follows:

Year ended December 31, Year ended December 31,

Year ended December 31,

(in thousands) Classification 2021 2020 2019

1 unchanged sentence

Operating lease expense Selling, general and administrative expenses $ 4,974 $ 5,736 $ 6,624

Operating lease expense Cost of operations 1,077 — —

Short-term lease expense Selling, general and administrative expenses $ 3,541 $ 1,960 $ 6,575

3 unchanged sentences

Finance lease expense:

Amortization of right-of-use assets Selling, general and administrative expenses $ 2,061 $ 13

Amortization of right-of-use assets Cost of operations $ 3,510 $ 2,061 $ 13

Interest on lease liabilities Interest expense 2,502 2,452 14

6 unchanged sentences

Other information related to leases is as follows:

Year ended December 31, Year ended December 31,

Year ended December 31,

(in thousands) 2021 2020 2019

3 unchanged sentences

Financing cash flows from finance leases 2,366 ( 13 ) ( 12 )

(in thousands) December 31, 2021 December 31, 2020

Right-of-use assets obtained in exchange for lease liabilities:

7 unchanged sentences

Finance leases 7.93 % 8.00 %

Amounts relating to leases were presented on our Consolidated Balance Sheets as of December 31, 2020 and 2019 in the following line items:

Amounts relating to leases were presented on our Consolidated Balance Sheets in the following line items:

(in thousands)

4 unchanged sentences

Operating lease liabilities Operating lease liabilities $ 3,950 $ 3,995

Finance lease liabilities Other accrued liabilities 886 ( 38 )

Finance lease liabilities Financing lease liabilities 2,445 886

Operating lease liabilities Non-current operating lease liabilities 26,685 7,031

1 unchanged sentence

Total lease liabilities $ 62,449 $ 41,602

Future minimum lease payments required under non-cancellable leases as of December 31, 2020 were as follows:

Future minimum lease payments required, including the future minimum lease payments resulting from the September 30, 2021 acquisition of Fosler Construction, under non-cancellable leases as of December 31, 2021 were as follows:

(in thousands) Operating Leases Finance Leases Total

Year ending December 31, 2021 $ 4,783 $ 3,278 $ 8,061

Year ending December 31, 2022 3,509 3,342 6,851

Year ending December 31, 2023 2,394 3,408 5,802

Year ending December 31, 2024 1,424 3,473 4,897

Year ending December 31, 2025 315 3,498 3,813

2022 $ 6,209 $ 4,833 $ 11,042

2023 4,975 3,459 8,434

2024 3,889 3,525 7,414

2025 2,890 3,552 6,442

2026 2,548 3,623 6,171

Thereafter 32,264 32,481 64,745

13 unchanged sentences

Balance at end of period $ 12,925 $ 25,399

We accrue estimated expense included in cost of operations on our Consolidated Statements of Operations to satisfy contractual warranty requirements when we recognize the associated revenues on the related contracts, or in the case of a loss contract, the full amount of the estimated warranty cost is accrued when the contract becomes a loss contract.

In addition, we record specific provisions or reductions where we expect the actual warranty costs to significantly differ from the accrued estimates.

In addition, we

record specific provisions or reductions where we expect the actual warranty costs to significantly differ from the accrued estimates.

Such changes could have a material effect on our consolidated financial condition, results of operations and cash flows.

Warranty expense in the year ended December 31, 2019 includes $ 3.9 million of warranty reversal related to developments stemming from the March 29, 2019 settlement agreement for the B&W Renewable EPC loss contracts described in Note 5.

NOTE 12 – RESTRUCTURING ACTIVITIES

The Company incurred restructuring charges in 2021, 2020 and 2019.

The charges primarily consist of severance costs related to actions taken, including as part of the Company’s strategic, market-focused organizational and re-branding initiative.

During 2020, these charges also include actions taken to address to impact of COVID-19 on our business.

The following tables summarize the restructuring activity incurred by segment:

Year ended December 31, Year ended December 31,

The charges primarily consist of severance and related costs to actions taken, including as part of the Company’s strategic, market-focused organizational and re-branding initiative.

During 2021 and 2020, these charges also include actions taken to address the impact of COVID-19 on our business.

The following tables summarizes the restructuring activity incurred by segment:

Year ended December 31,

(in thousands) Total Severance and related costs Other (1)

Total Severance and related costs Other (1)

B&W Renewable segment $ 1,876 $ 1,732 $ 144

4 unchanged sentences

Cumulative costs to date $ 45,183 37,252 7,931

(1) Other amounts consist primarily of exit, spin-off, relocation, COVID-19 related and other costs.

(1) Other amounts consist primarily of exit, relocation, COVID-19 related and other costs.

Year ended December 31,

(in thousands) Total Severance and related costs Other (1)

B&W Renewable segment $ 5,926 $ 4,537 $ 1,389

B&W Environmental segment 745 293 452

B&W Thermal segment 4,725 1,962 2,763

Corporate 453 ( 52 ) 505

$ 11,849 $ 6,740 $ 5,109

(1) Other amounts consist primarily of exit, relocation, COVID-19 related and other costs.

Year ended December 31,

(in thousands) Total Severance and related costs Other (1)

B&W Renewable segment $ 2,233 $ 2,176 $ 57

B&W Environmental segment 2,000 1,888 112

B&W Thermal segment 3,040 2,791 249

Corporate 4,434 3,566 868

$ 11,707 $ 10,421 $ 1,286

(1) Other amounts consist primarily of exit, relocation and other costs.

Restructuring liabilities are included in other accrued liabilities on our Consolidated Balance Sheets.

7 unchanged sentences

Balance at end of period $ 6,561 $ 8,146

As of December 31, 2020, approximately $ 4.0 million in severance payments were made related to restructuring charges.

The payments shown above for the years ended December 31, 2021 and 2020 relate primarily to severance.

Accrued restructuring liabilities at December 31, 2021 and 2020 relate primarily to employee termination benefits.

In the fourth quarter of 2020, as part of the Company's continuing integration of worldwide teams, we accrued $ 3.5 million of employee severance and related costs.

Restructuring liabilities are included in other accrued liabilities on our Consolidated Balance Sheets.

Additional charges may be recognized in future periods related to the actions described above, the timing and amount of which are not known at this time.

NOTE 13 – PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

5 unchanged sentences

As of December 31, 2021, and 2020, approximately 73 and 85 hourly union employees continue to accrue benefits under the U.S.

Plan, respectively.

Plan for the respective years.

Effective January 1, 2012, a defined contribution component was adopted applicable to Babcock & Wilcox Canada, Ltd.

25 unchanged sentences

Plan participants’ contributions — — 155 160

Curtailments — — — —

Settlements — 115 — —

Amendments 676 — — —

Actuarial loss (gain) 108,623 114,125 478 ( 1,200 )

Gain due to transfer — — — —

Actuarial (gain) loss ( 28,815 ) 108,623 ( 153 ) 478

Foreign currency exchange rate changes 165 1,615 3 33

6 unchanged sentences

Plan participants' contributions — — 155 160

Transfers — — — —

Foreign currency exchange rate changes 17 1,783 — —

25 unchanged sentences

Expected return on plan assets ( 56,154 ) ( 61,322 ) ( 55,717 ) — — —

( 61,322 ) ( 55,717 ) — —

Amortization of prior service cost 97 142 ( 1,084 ) ( 2,157 )

Recognized net actuarial loss (gain) 22,676 ( 7,603 ) 478 ( 1,201 )

Amortization of prior service cost (credit) 97 97 142 691 ( 1,084 ) ( 2,157 )

Recognized net actuarial (gain) loss ( 15,327 ) 22,676 ( 7,603 ) ( 153 ) 478 ( 1,201 )

Benefit plans, net (1)

3 unchanged sentences

Net periodic benefit cost (benefit) $ ( 48,044 ) $ ( 4,490 ) $ ( 19,088 ) $ 705 $ ( 299 ) $ ( 2,919 )

(1) Benefit plans, net , which is presented separately in the Consolidated Statements of Operations, is not allocated to the segments.

(2) Service cost related to a small group of active participants is presented within cost of operations in the Consolidated Statement of Operations and is allocated to the B&W Thermal segment.

(3) Expected return on plan assets includes $ 0.8 million related to interest incurred for deferred contribution payments.

Recognized net actuarial loss (gain) consists primarily of our reported actuarial loss (gain), curtailments, settlements, and the difference between the actual return on plan assets and the expected return on plan assets.

Total net MTM adjustments for our pension and other postretirement benefit plans were losses (gains) of $ 23.2 million and $( 8.8 ) million in the years ended December 31, 2020 and 2019, respectively.

The recognized net actuarial loss (gain) was recorded in Benefit plans, net in our Consolidated Statements of Operations.

Settlements are triggered in a plan when the distributions exceed the sum of the service cost and interest cost of the respective plan.

Lump sum payments from our Canadian Plans resulted in plan settlements of a $ 0.1 million loss during 2019.

The settlements themselves were not material, but they triggered interim MTM remeasurements of the Canadian Plan's assets and liabilities, resulting in a $ 0.6 million loss during 2019.

Both the settlements and the MTM remeasurements are reflected in the Recognized net actuarial loss (gain) in the table above and are included in our Consolidated Statements of Operations in the Benefit plans, net line item.

(1) Benefit plans, net , which is presented separately in our Consolidated Statements of Operations, is not allocated to the segments.

(2) Service cost related to a small group of active participants is presented within cost of operations in our Consolidated Statement of Operations and is allocated to the B&W Thermal segment.

Recognized net actuarial gain consists primarily of our reported actuarial gain and the difference between the actual return on plan assets and the expected return on plan assets.

Total net mark to market (“MTM”) adjustments for our pension and other postretirement benefit plans were (gains) losses of $( 15.5 ) million, $ 23.2 million and $( 8.8 ) million in the years ended, December 31, 2021, 2020 and 2019, respectively.

The recognized net actuarial (gain) loss was recorded in benefit plans, net in our Consolidated Statements of Operations.

Pension Benefits Other Benefits

16 unchanged sentences

The overall investment strategy of the pension trusts is to achieve long-term growth of principal, while avoiding excessive risk and to minimize the probability of loss of principal over the long term.

The specific investment goals that have been set for the pension trusts in the aggregate are (1) to ensure that plan liabilities are met when due and (2) to achieve an investment return on trust assets consistent with a reasonable level of risk.

The specific investment goals that have been set

for the pension trusts in the aggregate are (1) to ensure that plan liabilities are met when due and (2) to achieve an investment return on trust assets consistent with a reasonable level of risk.

Allocations to each asset class for both domestic and foreign plans are reviewed periodically and rebalanced, if appropriate, to assure the continued relevance of the goals, objectives and strategies.

18 unchanged sentences

The target asset allocation for the Master Trust as of December 31, 2021 was 50 % of alternative, liquid credit and direct lending funds, 20 % of fixed income securities, and 30 % of equity and other investments.

As of December 31, 2019, the target allocation was 65 % of commingled and mutual funds and 35 % of fixed income investments.

As of December 31, 2020, the target allocation was 54 % of alternative, liquid credit and direct lending funds, 22 % of fixed income securities, and 24 % of equity and other investments.

We routinely reassess the target asset allocation with a goal of better aligning the timing of expected cash flows from those assets to the anticipated timing of benefit payments.

23 unchanged sentences

Venture capital 236,730 — — 236,730

Hedge fund 80,711 — — 80,711

Cash and accrued items 30,130 30,130 — —

7 unchanged sentences

Fixed income 44,604 — 44,604 —

Equity 45,539 45,539 — —

Venture capital 56,719 — — 56,719

Cash and accrued items 69,822 69,822 — —

1 unchanged sentence

Investments measured at net asset value 241,568

Pending trades ( 195 )

Total pension and other postretirement benefit assets $ 1,047,646

15 unchanged sentences

(1) Pension benefit payments are made from their respective plan's trust.

We made contributions to our pension and other postretirement benefit plans totaling $ 4.0 million and $ 5.2 million during the years ended December 31, 2020 and 2019, respectively.

Expected employer contributions to trusts of defined benefit plans above reflect relief granted under pension contribution waivers, which deferred minimum pension contributions for approximately one year to then be repaid over a five-year period.

On October 1, 2020 we received IRS approval of our temporary hardship waiver request for our pension and other postretirement benefit plans' contribution for the 2019 Plan year.

Pursuant to the provisions of the waiver granted by the IRS related to the 2018 Plan year, we were required to resume quarterly contributions on April 15, 2020 equal to the required quarterly contributions to the Plan.

The 2019 Plan year deferred contribution of $ 23.7 million is allowed to be funded over the next five years.

On March 27, 2020, the CARES Act was signed into law and among other things, provides deferral of certain U.S.

pension plan contributions until January 1, 2021.

This was updated to allow payments due on January 1, 2021 to be considered timely made no later than January 4, 2021.

We elected to defer the contribution payments of $ 5.5 million each for the 2020 Plan year that would have been made on April 15, 2020 and July 15, 2020 and October 15, 2020, respectively.

In addition, we elected to defer the contribution payments of $ 1.1 million for the 2018 waiver for the 2019 Plan year and $ 23.7 million for the 2019 Plan year that were both due on September 15, 2020.

The total funding contributions of approximately $ 46.0 million originally estimated for 2020 includes $ 1.1 million for the 2018 waiver payment for the 2019 Plan year, $ 23.7 million for the 2019 Plan year, $ 16.5 million for the 2020 Plan year and $ 4.5 million related to other non-qualified pension plans, non-U.S.

pension plans and other postretirement benefits plans.

In January 2021, we made contributions of $ 22.0 million for the 2020 Plan year and $ 1.1 million for the 2018 waiver payment for the 2019 Plan year and $ 0.4 million of interest as required per the CARES Act deferral.

We made contributions to our pension and other postretirement benefit plans totaling $ 27.6 million and $ 4.0 million during the years ended December 31, 2021 and 2020.

Contributions made during the year ended December 31, 2021 includes $ 0.4 million of interest as required per the CARES Act that was signed into law on March 27, 2020.

In accordance with the American Rescue Plan Act of 2021, we elected to defer $ 20.9 million of the estimated Pension Plan contribution payments of $ 45.6 million that would have been due during 2021.

Defined contribution plans

We provide benefits under The B&W Thrift Plan (the “Thrift Plan”).

The Thrift Plan generally provides for matching employer contributions of 50 % of the first 8 % of the participants' compensation.

These matching employer contributions are typically made in cash.

Amounts charged to expense for employer contributions under the Thrift Plan totaled approximately $ 1.0 million and $ 3.1 million in the years ended December 31, 2020 and 2019, respectively.

The Thrift Plan generally provides for matching employer contributions.

Beginning in April 2020 and continuing through December 31, 2021, as part of the Company's response to the impact of the COVID-19 pandemic on its business, the Company suspended its 401(k) company match for U.S.

The Company resumed its employer contributions beginning in 2022 inclusive of a one-time profit sharing contribution for the 2021 plan year equal to 0.75 % of eligible employees' base pay.

Employer matching contributions are typically made in cash.

Amounts charged to expense for employer contributions under the Thrift Plan totaled approximately $ 0.0 million , $ 1.0 million and $ 3.1 million in the years ended December 31, 2021, 2020 and 2019, respectively.

Also, our salaried Canadian employees are provided with a defined contribution plan.

The amount charged to expense for employer contributions was approximately $ 0.3 million and $ 0.3 million in the years ended December 31, 2020 and 2019, respectively.

The amount charged to expense for employer contributions was approximately $ 0.3 million, $ 0.3 million and $ 0.3 million in the years ended December 31, 2021, 2020 and 2019, respectively.

Multi-employer plans

6 unchanged sentences

of Collective

2021 2020 2019

2021 2020 2019 (in millions)

Boilermaker-Blacksmith National Pension Trust 48-6168020/ 001 Yellow Red Yes $ 4.0 $ 7.5 No Described

Boilermaker-Blacksmith National Pension Trust 48-6168020/ 001 Yellow Yellow Red Yes $ 16.6 $ 4.0 $ 7.5 No Described

All other 2.2 0.9 4.9

$ 18.8 $ 4.9 $ 12.4

Our collective bargaining agreements with the Boilermaker-Blacksmith National Pension Trust (the “Boilermaker Plan”) is under a National Maintenance Agreement platform which is evergreen in terms of expiration.

2 unchanged sentences

All other contributions expense for all periods included in this report represents multiple amounts to various plans that, individually, are deemed to be insignificant.

NOTE 14 – 2021 SENIOR NOTES OFFERINGS

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”) for net proceeds of approximately $ 120.0 million.

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.

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 for $ 26.6 million of net proceeds.

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 a public offering of $ 140.0 million aggregate principal amount of our 6.50 % senior notes due 2026 (the “ 6.50 % Senior Notes”) and a subsequent exercise of $ 11.4 million aggregate principal of our 6.50 % senior notes due 2026 by the underwriters was completed on December 30, 2021.

At the completion of the offerings, we received net proceeds of approximately $ 145.8 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.

The components of the Company's senior notes at December 31, 2021 are as follows:

(in thousands) 8.125 %

Senior notes due 2026

$ 186,219 $ 151,440 $ 337,659

Unamortized deferred financing costs ( 5,269 ) ( 6,604 ) ( 11,873 )

Unamortized premium 580 — 580

Net debt balance $ 181,530 $ 144,836 $ 326,366

NOTE 15 – LAST OUT TERM LOANS

Effective with the new debt facilities the Company entered into on June 30, 2021, as described in Note 16 below, the Company has no remaining Last Out Term Loans and no further borrowings thereunder are available.

The Last Out Term Loan activity is described as follows:

Last Out Term Loan Tranche

(in thousands) A-3 A-4 A-6 Total

Balance at December 31, 2020

$ 113,330 $ 30,000 $ 40,000 $ 183,330

Payments in cash ( 40,408 ) ( 30,000 ) ( 5,000 ) ( 75,408 )

Exchange for Preferred Stock ( 72,922 ) — — ( 72,922 )

Exchange for 8.125 % Senior Notes

— — ( 35,000 ) ( 35,000 )

Balance at December 31, 2021

$ — $ — $ — $ —

NOTE 16 – REVOLVING DEBT

Our revolving debt is comprised of a revolving credit facility in the U.S.

totaling $ 164.3 million and $ 179.0 million at December 31, 2020 and 2019, respectively.

On May 11, 2015, we entered into the Amended Credit Agreement with a syndicate of lenders in connection with our spin-off from The Babcock & Wilcox Company (now BWX Technologies, Inc.

or “BWXT”) which governs the U.S.

Revolving Credit Facility and the Last Out Term Loans.

Since June 2016, we have entered into a number of waivers and amendments to the Amended Credit Agreement, including several to avoid default under the financial and other covenants specified in the Amended Credit Agreement.

Debt Facilities

On June 30, 2021, we entered into a Revolving Credit Agreement (the “Revolving Credit Agreement”) with PNC Bank, National Association, as administrative agent (“PNC”) and a letter of credit agreement (the “Letter of Credit Agreement”) with PNC, pursuant to which PNC agreed to issue up to $ 110 million in letters of credit that is secured in part by cash collateral provided by an affiliate of MSD Partners, MSD PCOF Partners XLV, LLC (“MSD”), as well as a reimbursement, guaranty and security agreement with MSD, as administrative agent, and the cash collateral providers from time to time party thereto, along with certain of our subsidiaries as guarantors, pursuant to which we are obligated to reimburse MSD and any other cash collateral provider to the extent the cash collateral provided by MSD and any other cash collateral provider to secure the Letter of Credit Agreement is drawn to satisfy draws on letters of credit (the “Reimbursement Agreement” and collectively with the Revolving Credit Agreement and Letter of Credit Agreement, the “Debt Documents” and the facilities thereunder, the “Debt Facilities”).

The obligations of the Company under each of the Debt Facilities are guaranteed by certain existing and future domestic and foreign subsidiaries of the Company.

Riley Financial, Inc.

Riley”), a related party, has provided a guaranty of payment with regard to the Company’s obligations under the Reimbursement Agreement, as described below.

The Company expects to use the proceeds and letter of credit availability under the Debt Facilities for working capital purposes and general corporate purposes, including to backstop or replace certain letters of credit issued

under our previous A&R Credit Agreement, dated as of May 14, 2020 (as amended, restated or otherwise modified from time to time), by and among the Company, as borrower, Bank of America, N.A., as administrative agent, the lenders and the other parties from time to time party thereto, which was repaid and commitments thereunder terminated as of June 30, 2021.

The Revolving Credit Agreement matures on June 30, 2025.

As of December 31, 2021, no borrowings have occurred under the Revolving Credit Agreement and under the Letter of Credit Agreement, usage consisted of $ 16.4 million of financial letters of credit and $ 90.4 million of performance letters of credit.

Each of the Debt Facilities has a maturity date of June 30, 2025.

The interest rates applicable under the Revolving Credit Agreement float at a rate per annum equal to either (i) a base rate plus 2.0 % or (ii) 1 or 3 month reserve-adjusted LIBOR rate plus 3.0 %.

The interest rates applicable to the Reimbursement Agreement float at a rate per annum equal to either (i) a base rate plus 6.50 % or (ii) 1 or 3 month reserve-adjusted LIBOR plus 7.50 %.

Under the Letter of Credit Agreement, the Company is required to pay letter of credit fees on outstanding letters of credit equal to (i) administrative fees of 0.75 % and (ii) fronting fees of 0.25 %.

Under the Revolving Credit Agreement, the Company is required to pay letter of credit fees on outstanding letters of credit equal to (i) letter of credit commitment fees of 3.0 % and (ii) letter of credit fronting fees of 0.25 %.

Under each of the Revolving Credit Agreement and the Letter of Credit Agreement, we are required to pay a facility fee equal to 0.375 % per annum of the unused portion of the Revolving Credit Agreement or the Letter of Credit Agreement, respectively.

The Company is permitted to prepay all or any portion of the loans under the Revolving Credit Agreement prior to maturity without premium or penalty.

Prepayments under the Reimbursement Agreement shall be subject to a prepayment fee of 2.25 % in the first year after closing, 2.0 % in the second year after closing and 1.25 % in the third year after closing, with no prepayment fee payable thereafter.

The Company has mandatory prepayment obligations under the Reimbursement Agreement upon the receipt of proceeds from certain dispositions or casualty or condemnation events.

The Revolving Credit Agreement and Letter of Credit Agreement require mandatory prepayments to the extent of an over-advance.

The obligations under the Debt Facilities are secured by substantially all assets of the Company and each of the guarantors, in each case subject to inter-creditor arrangements.

As noted above, the obligations under the Letter of Credit Facility are also secured by the cash collateral provided by MSD and any other cash collateral provider thereunder.

The Debt Documents contain certain representations and warranties, affirmative covenants, negative covenants and conditions that are customarily required for similar financings.

The Debt Documents require the Company to comply with certain financial maintenance covenants, including a quarterly fixed charge coverage test of not less than 1.00 to 1.00, a quarterly senior net leverage ratio test of not greater than 2.50 to 1.00, a non-guarantor cash repatriation covenant not to exceed $ 35 million at any one time, a minimum liquidity covenant of at least $ 30.0 million at all times, and an annual cap on maintenance capital expenditures of $ 7.5 million.

The Debt Documents also contain customary events of default (subject, in certain instances, to specified grace periods) including, but not limited to, the failure to make payments of interest or premium, if any, on, or principal under the respective facility, the failure to comply with certain covenants and agreements specified in the applicable Debt Agreement, defaults in respect of certain other indebtedness, and certain events of insolvency.

If any event of default occurs, the principal, premium, if any, interest and any other monetary obligations on all the then outstanding amounts under the Debt Documents may become due and payable immediately.

In connection with the Company’s entry into the Debt Documents, on June 30, 2021, B.

Riley, a related party, entered into a Guaranty Agreement in favor of MSD, in its capacity as administrative agent under the Reimbursement Agreement, for the ratable benefit of MSD, the cash collateral providers and each co-agent or sub-agent appointed by MSD from time to time (the “B.

Riley Guaranty”).

Riley Guaranty provides for the guarantee of all of the Company’s obligations under the Reimbursement Agreement.

Riley Guaranty is enforceable in certain circumstances, including, among others, certain events of default and the acceleration of the Company’s obligations under the Reimbursement Agreement.

Under a fee letter with B.

Riley, the Company agreed to pay B.

Riley $ 0.9 million per annum in connection with the B.

Riley Guaranty.

The Company entered into a reimbursement agreement with B.

Riley governing the Company’s obligation to reimburse B.

Riley to the extent the B.

Riley Guaranty is called upon by the agent or lenders under the Reimbursement Agreement.

As of December 31, 2021, a subsidiary has borrowed $ 1.5 million against a $ 2.5 million line of credit.

The interest rate on the line of credit is 5.5 % per annum and matures on January 30, 2022.

Subsequent to December 31, 2021, the subsidiary entered into a new $ 3.5 million line of credit with a maturity date of January 30, 2023.

A&R Credit Agreement

On May 14, 2020, we entered into an agreement with our lenders amending and restating the Amended Credit Agreement (the “A&R Credit Agreement”).

The A&R Credit Agreement refinances and extends the maturity of our U.S.

Revolving Credit Facility and Last Out Term Loans.

Under the A&R Credit Agreement, B.

Riley has committed to provide the Company with up to $ 70.0 million of additional Last Out Term Loans on the same terms as the term loans extended under the Amended Credit Agreement.

An aggregate $ 30.0 million of this new commitment was funded upon execution of the A&R Credit Agreement.

Of the remaining commitments, at least $ 35.0 million will be funded in installments, subject to reduction for the gross proceeds from certain equity offerings conducted by the Company, and $ 5.0 million will be funded upon request by the Company.

The proceeds from the $ 30.0 million of new term loans will be used to pay transaction fees and expenses and repay outstanding borrowings under the U.S.

Revolving Credit Facility.

Proceeds from the additional $ 40.0 million of term loans will be used to repay outstanding borrowings under the U.S.

Revolving Credit Facility, with any remaining amounts used for working capital, capital expenditures, permitted acquisitions and general corporate purposes.

The A&R Credit Agreement also provides that, (i) the U.S.

Revolving Credit Facility continues to be available for issuances of existing and new letters of credit, subject to the L/C Sublimit (as defined below), (ii) the $ 205.0 million sublimit on borrowings under the U.S.

Revolving Credit Facility is maintained, and (iii) interest payments on the unpaid principal amount of revolving credit loans incurred during the period from May 14, 2020 through and including August 31, 2020 of $ 3.8 million are deferred and will be paid in six equal installments on the last business day of each calendar month beginning on January 29, 2021 and through June 30, 2021.

No swing line borrowings are permitted under the A&R Credit Agreement.

The A&R Credit Agreement also amends the following terms, among others, as compared with the Amended Credit Agreement:

(i) the maturity date of the U.S.

Revolving Credit Facility is extended to June 30, 2022, and the maturity date of all Last Out Term Loans under the A&R Credit Agreement is extended to December 30, 2022 (six months after the maturity date of the U.S.

Revolving Credit Facility);

(ii) the interest rate for loans under the U.S.

Revolving Credit Facility remained the same at LIBOR plus 7 % or base rate (as defined in the A&R Credit Agreement) plus 6 %.

These margins will be reduced by 2 % if commitments under the U.S.

Revolving Credit Facility are reduced to less than $ 200.0 million.

The fee for letters of credit is set at 4 %;

(iii) the interest rate for all Last Out Term Loans is set at 12 %;

(iv) the commitments under the U.S.

Revolving Credit Facility automatically and permanently decrease in the following amounts on the following dates, which match the funding dates and amounts for the committed term loans:

(x) $ 10.0 million on November 30, 2020;

and (y) $ 5.0 million on each of March 31, 2021, June 30, 2021, September 30, 2021, December 31, 2021 and March 31, 2022, respectively;

(v) the amount of revolving loans and letters of credit available in currencies other than U.S.

dollars are capped at $ 125.0 million through April 30, 2021 and step down to $ 110.0 million on May 1, 2021;

(vi) the amount of financial letters of credit is capped at $ 75.0 million, and the amount of all letters of credit is capped at $ 190.0 million through April 30, 2021 and step down to $ 175.0 million on May 1, 2021 (the “L/C Sublimit”).

Affirmative and negative covenants under the A&R Credit Agreement are substantially consistent with the Amended Credit Agreement, except that, among other changes:

(i) the indebtedness covenant has been modified to permit the incurrence of any governmental assistance in the form of indebtedness in connection with COVID-19 relief in an aggregate principal amount not to exceed $ 10.0 million;

(ii) a third-party letter of credit basket of up to $ 50.0 million has been added;

(iii) certain liens and restricted payments are modified to permit liens and repayments of indebtedness incurred in connection with governmental assistance in connection with COVID-19 relief;

and (iv) covenants related to the European B&W Renewable EPC loss projects have been removed.

The minimum required liquidity condition of $ 30.0 million remains constant but has been modified to exclude cash of non-loan parties in an amount in excess of $ 25.0 million.

Events of default under the A&R Credit Agreement are substantially consistent with the Amended Credit Agreement, except that B.

Riley’s failure to fund any of its additional Last Out Term Loans committed under the A&R Credit Agreement will constitute an event of default.

In connection with the A&R Credit Agreement, the Company has incurred certain customary amendment and commitment fees, a portion of which will be deferred pursuant to the terms of the A&R Credit Agreement along with certain previously deferred fees incurred under the Amended Credit Agreement.

On October 30, 2020, we entered into A&R Amendment No.

1 with Bank of America, N.A.

A&R Amendment No.

1, among other matters, (i) provides that, under the A&R Credit Agreement, the “Commitment Reduction Amount” shall be an amount equal to (a) for any “Prepayment Event” relating to a “Recovery Event” (each as defined under the A&R Credit Agreement), 50 % of the net cash proceeds with respect to such Prepayment Event, and (b) with respect to any other Prepayment Event under the A&R Credit Agreement, the net cash proceeds with respect to such Prepayment Event, and (ii) establishes new financial covenants for interest coverage ratios and senior leverage ratios.

As of December 31 , 2020, the future minimum interest coverage ratios under our A&R Credit Agreement are as follows:

• 0.50 :1.00 for the quarter ending March 31, 2021

• 0.80 :1.00 for the quarter ending June 30, 2021

• 1.00 :1.00 for the quarter ending September 30, 2021

• 1.10 :1.00 for the quarter ending December 31, 2021

• 1.25 :1.00 for the quarter ending March 31, 2022 and the last day of each fiscal quarter ending thereafter

As of December 31 , 2020, the future maximum permitted senior leverage ratios under our A&R Credit Agreement are as follows:

• 7.75 :1.00 for the quarter ending March 31, 2021

• 4.25 :1.00 for the quarter ending June 30, 2021

• 3.75 :1.00 for the quarter ending September 30, 2021

• 3.00 :1.00 for the quarter ending December 31, 2021

• 2.25 :1.00 for the quarter ending March 31, 2022 and the last day of each fiscal quarter ending thereafter

Amendments to the A&R Credit Agreement - Subsequent Events

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.

On March 4, 2021, we entered into A&R Amendment No.

3 with Bank of America.

A&R Amendment No.

Revolving Credit Facility

As of December 31, 2020, the U.S.

Revolving Credit Facility provides for a senior secured revolving credit facility in an aggregate amount of up to $ 306.2 million, as amended and adjusted for completed asset sales and other transactions.

The proceeds from loans under the U.S.

Revolving Credit Facility are available for working capital needs, capital expenditures, permitted acquisitions and other general corporate purposes, and the full amount is available to support the issuance of letters of credit, subject to the limits specified in the agreement.

At December 31, 2020, borrowings under the U.S.

Revolving Credit Facility consisted of $ 164.3 million at a weighted average interest rate of 7.46 %.

Usage under the U.S.

Revolving Credit Facility consisted of $ 164.3 million of revolving loan borrowings, $ 22.0 million of financial letters of credit and $ 86.2 million of performance letters of credit.

At December 31, 2020, we had approximately $ 33.7 million available to meet letter of credit and borrowing requirements based on our overall facility size.

On October 23, 2020, we received $ 26.0 million under the settlement agreement described in Note 5.

As required by the Company’s U.S.

Revolving Credit Facility, 50 % of the net proceeds (gross proceeds less costs) or $ 8.0 million of the settlement received by the Company was applied as a permanent reduction of the U.S.

Revolving Credit Facility in October 2020.

Revolving Credit Facility - Subsequent Events

On February 12, 2021, we received gross proceeds of $ 125 million from the 2021 Senior Notes offering.

As required by the Company’s U.S.

Revolving Credit Facility, 75 % of the gross proceeds or $ 93.8 million received by the Company was applied as a permanent reduction of the U.S.

Revolving Credit Facility as of February 12, 2021.

Also on February 16, 2021, we prepaid $ 167.1 million towards the outstanding U.S.

Revolving Credit Facility.

As of March 4, 2021, effective with Amendment No.

3 to the A&R Credit Agreement described above, the U.S.

Revolving Credit Facility provides for an aggregate letters of credit amount of up to $ 130 million, as described in Note 25.

Riley Limited Guaranty

In connection with the Company’s entry into the A&R Credit Agreement, B.

Riley has entered into the B.

Riley Guaranty for the benefit of the Administrative Agent and the lenders under the U.S.

Revolving Credit Facility.

Riley Guaranty provides for the guarantee of all of the Company’s obligations with respect to the U.S.

Revolving Credit Facility (other than with respect to letters of credit and contingent obligations), including the obligation to repay outstanding revolving credit loans and pay earned interest and fees.

Riley Guaranty is enforceable in certain circumstances, including, among others:

Riley’s failure to timely fund in full any of its additional Last Out Term Loans committed under the A&R Credit Agreement;

(ii) certain events of default relating to bankruptcy or insolvency occurring with respect to B.

(iii) the acceleration of the Company’s borrowings under the U.S.

Revolving Credit Facility;

(iv) the Company’s failure to pay any amount due to the Administrative Agent or any lender under the U.S.

Revolving Credit Facility;

or (v) any assertion that the B.

Riley Guaranty or any portion thereof is not valid, binding or enforceable.

In connection with the B.

Riley Guaranty, the Company entered into a fee letter with B.

Riley pursuant to which the Company agreed to pay B.

Riley a fee of $ 3.9 million (the “B.

Riley Guaranty Fee”).

On June 8, 2020, the Company issued

1,712,479 unregistered shares of Common Stock to B.

Riley and certain of its affiliates in settlement of the B.

Riley Guaranty Fee in connection with the Fee and Interest Equitization Agreement discussed below.

Fee and Interest Equitization Agreement

In connection with the B.

Riley Guaranty, the Company entered into a Fee and Interest Equitization Agreement (the “Equitization Agreement”) with B.

Riley and, solely for certain limited purposes under the Equitization Agreement, B.

Riley FBR, Inc.

The Equitization Agreement provides that, in lieu of receiving (a) $ 13.4 million of interest payments with respect to Last Out Term Loans under the A&R Credit Agreement between May 14, 2020 and December 31, 2020 (the “Equitized Interest Payments”) and (b) the B.

Riley Guaranty Fee (the “Equitized Fee Payment” and, together with the Equitized Interest Payments, the “Equitized Fees and Interest Payments”), B.

Riley will receive unregistered shares of the Company’s Common Stock.

Under the Equitization Agreement, B.

Riley will receive a number of shares of unregistered common stock equal to (i) the aggregate dollar value of the Equitized Fees and Interest Payments divided by (ii) the Conversion Price.

For purposes of the Equitization Agreement, the “Conversion Price” means the average volume weighted average price of the common stock over 15 consecutive trading days beginning on and including May 15, 2020 (the “Measurement Period”), subject to customary adjustments.

On June 5, 2020, the conversion price was calculated at $ 2.2774 per share.

On December 31, 2020, September 30, 2020 and June 30, 2020, the Company issued 2,379,376 , 2,334,002 and 1,192,371 unregistered shares of Common Stock, respectively, to B.

Riley and certain of its affiliates in settlement of the quarterly interest payable in connection with the Equitization Agreement discussed above.

As described above, the A&R Credit Agreement commitments were terminated, all loans were repaid and all outstanding and undrawn letters of credit were collateralized on June 30, 2021.

The Company recognized a gain on debt extinguishment of $ 6.5 million in the year ended December 31, 2021, primarily representing the write-off of accrued revolver fees of $ 11.3 million offset by the unamortized deferred financing fees of $ 4.8 million related to the prior A&R Credit Agreement.

Letters of Credit, Bank Guarantees and Surety Bonds

Certain subsidiaries primarily outside of the United States have credit arrangements with various commercial banks and other financial institutions for the issuance of letters of credit and bank guarantees in association with contracting activity.

The aggregate value of all such letters of credit and bank guarantees opened outside of the U.S.

Revolving Credit Facility as of December 31, 2020 and 2019 was $ 84.5 million and $ 88.5 million, respectively.

The aggregate value of the letters of credit provided by the U.S.

Revolving Credit Facility backstopping letters of credit or bank guarantees was $ 32.0 million as of December 31, 2020.

Of the letters of credit issued under the U.S.

Revolving Credit Facility, $ 34.9 million are subject to foreign currency revaluation.

We have posted surety bonds to support contractual obligations to customers relating to certain contracts.

Certain of our subsidiaries primarily outside of the United States have credit arrangements with various commercial banks and other financial institutions for the issuance of letters of credit and bank guarantees in association with contracting activity.

The aggregate value of all such letters of credit and bank guarantees outside of our Letter of Credit Agreement as of December 31, 2021 was $ 52.8 million.

The aggregate value of the outstanding letters of credit provided under the Letter of Credit Agreement backstopping letters of credit or bank guarantees was $ 35.5 million as of December 31, 2021.

Of the outstanding letters of credit issued under the Letter of Credit Agreement, $ 51.5 million are subject to foreign currency revaluation.

We have also posted surety bonds to support contractual obligations to customers relating to certain contracts.

We utilize bonding facilities to support such obligations, but the issuance of bonds under those facilities is typically at the surety's discretion.

2 unchanged sentences

As of December 31, 2021, bonds issued and outstanding under these arrangements in support of contracts totaled approximately $ 188.3 million.

The aggregate value of the letters of credit provided by the U.S.

Revolving Credit Facility backstopping surety bonds was $ 34.7 million.

Our ability to obtain and maintain sufficient capacity under our U.S.

Revolving Credit Facility is essential to allow us to support the issuance of letters of credit, bank guarantees and surety bonds.

The aggregate value of the letters of credit backstopping surety bonds was $ 13.1 million.

Our ability to obtain and maintain sufficient capacity under our new Debt Facilities is essential to allow us to support the issuance of letters of credit, bank guarantees and surety bonds.

Without sufficient capacity, our ability to support contract security requirements in the future will be diminished.

NOTE 15 – LAST OUT TERM LOANS

The components of the Last Out Term Loans by Tranche are as follows:

December 31, 2020

(in thousands) A-3 A-4 A-6 Total

$ 101,660 $ 30,000 40,000 $ 171,660

Discount and fees 8,650 — — 8,650

Paid-in-kind interest 3,020 — — 3,020

Net debt balance $ 113,330 $ 30,000 $ 40,000 $ 183,330

(1) Tranche A-3 proceeds represent the net proceeds after the $ 39.7 million principal prepayment of the tranche as of July 23, 2019, the date of the Equitization Transactions as discussed below.

December 31, 2019

(in thousands) A-3

Discount and fees 8,650

Paid-in-kind interest 3,020

Principal 113,330

Unamortized discount and fees ( 9,377 )

Net debt balance $ 103,953

(1) Tranche A-3 proceeds represent the net proceeds after the $ 39.7 million principal prepayment of the tranche as of July 23, 2019, the date of the Equitization Transactions as discussed below.

Last Out Term Loans are incurred under our A&R Credit Agreement and are pari passu with the U.S.

Revolving Credit Facility except for certain payment subordination provisions.

The Last Out Term Loans are subject to the same representations and warranties, covenants and events of default as the U.S.

Revolving Credit Facility.

In connection with the effectiveness of the A&R Credit Agreement, the maturity date for the Last Out Term Loans was extended to December 30, 2022.

A debt modification with the same borrower that results in substantially different terms is accounted for as an extinguishment of the existing debt and a reborrowing of new debt.

An extinguishment gain or loss is then recognized based on the fair value of the new debt as compared to the carrying value of the extinguished debt.

The Company recognized a loss on debt extinguishment of $ 6.2 million in 2020, primarily representing the unamortized value of the original issuance discount and fees on the Tranche A-3 Last Out Term Loan.

On December 31, 2020, September 30, 2020 and June 30, 2020, the Company issued 2,379,376 , 2,334,002 , and 1,192,371 unregistered shares of common stock to B.

Riley in settlement of the Last Out Term Loans' quarterly interest payable in connection with the Fee and Interest Equitization Agreement further discussed in Note 14.

The total effective interest rate of Tranche A-3, Tranche A-4 and Tranche A-6 was 12.0 % on December 31, 2020.

Interest expense associated with the Last Out Term Loans is detailed in Note 16.

As of December 31, 2020, the Last Out Term Loans are presented as a non-current liability in our Consolidated Balance Sheets as a result of the extension of their maturity dates to December 30, 2022 granted under the A&R Credit Agreement.

As of December 31, 2019, the Last Out Term Loans are presented as a current liability in our Consolidated Balance Sheets as a result of limited waivers granted to maintain compliance with the covenants in the prior Amended Credit Agreement.

We borrowed $ 30.0 million of net proceeds under Tranche A-1 of the Last Out Term Loans from B.

Riley, a related party, in September and October of 2018.

In November 2018, Tranche A-1 was assigned to Vintage, also a related party.

As part of the Equitization Transactions in July 2019, the outstanding principal of Tranche A-1 of the Last Out Term Loans including accrued paid-in-kind interest remaining as of March 31, 2019 was exchanged for shares of Common Stock.

We borrowed $ 10.0 million of net proceeds under Tranche A-2 of Last Out Term Loans from B.

Riley, a related party in March 2019.

Tranche A-2 was fully repaid on July 23, 2019 with proceeds from the 2019 Rights Offering as part of the Equitization Transactions in July 2019.

Under Amendment No.

16 to our previous Amended Credit Agreement, we borrowed $ 150.0 million face value from B.

Riley, a related party, under a Tranche A-3 of Last Out Term Loans.

The $ 141.4 million net proceeds from Tranche A-3 were primarily used to pay the amounts due under the settlement agreements covering certain European B&W Renewable loss projects as described in Note 5, with the remainder used for working capital and general corporate purposes.

Interest rates for Tranche A-3 are described above.

Tranche A-3 may be prepaid, subject to the subordination provisions under the previous Amended Credit Agreement as described above, but not re-borrowed.

As part of the Equitization Transactions, the total prepayment of principal of Tranche A-3 of the Last Out Term Loans was $ 39.7 million.

On January 31, 2020, we entered into Amendment No.

20 to the Amended Credit Agreement.

Amendment No.

20 provides $ 30.0 million of additional commitments from B.

Riley, a related party, under a new Tranche A-4 of Last Out Term Loans.

The proceeds from Tranche A-4 may be used under the terms of Amendment No.

20 to repay revolving credit loans, for working capital and general corporate purposes, and to reimburse certain expenses of B.

Riley as specified by Amendment No.

The terms of Tranche A-4 are the same as the terms for the Tranche A-3 under the Amended Credit Agreement.

As of January 31, 2020, we borrowed $ 30.0 million face value of the Tranche A-4 and received net proceeds of $ 26.3 million after paying total fees of $ 3.7 million related to amendment No.

20 described above.

On January 31, 2020, we entered into Amendment No.

20 to the Amended Credit Agreement.

Amendment No.

20 provides an incremental Tranche A-5 of Last Out Term Loans to be extended prior to maturity of the Last Out Term Loans under the Amended Credit Agreement in the event certain customer letters of credit are drawn.

The terms of Tranche A-5 are the same as the terms for the Tranche A-3 under the Amended Credit Agreement.

As of March 8, 2021, no borrowings have occurred under Tranche A-5.

The A&R Credit Agreement provided us with up to $ 70.0 million of additional funding in the form of Tranche A-6 Last Out Term Loans from B.

Riley, a related party, as more fully described in Note 14.

An aggregate $ 30.0 million of this new commitment was funded upon execution of the A&R Credit Agreement.

Of the remaining commitments, $ 35.0 million will be funded in installments, subject to reduction for the gross proceeds from certain equity offerings conducted by the Company.

The remaining $ 5.0 million will be available upon request by the Company.

On November 30, 2020, we borrowed $ 10.0 million face value of the Tranche A-6 and received gross proceeds of $ 10.0 million pursuant to the terms of the A&R Credit Agreement which required the proceeds to be applied as a permanent reduction of the U.S.

Revolving Credit Facility.

The A&R Credit Agreement provided us with up to $ 50.0 million of additional funding for letters of credit in the form of Tranche A-7 Last Out Term Loans from B.

Riley, a related party, as more fully described in Note 14.

The $ 50.0 million will be available upon request by the Company, subject to certain limitations.

As of March 8, 2021, no borrowings have occurred under Tranche A-7.

Last Out Term Loans - Subsequent Events

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.

The interest rate on the remaining Last Out Term Loan Tranche A balances has been reduced to 6.625 % from 12.0 %, as described in Note 25.

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

3, we paid $ 75 million towards our existing Last Out Term Loans, as described in Note 25.

Other Indebtedness - Loans Payable

As of December 31, 2021, our Denmark subsidiary has three unsecured interest free loans totaling $ 3.3 million under a local government loan program related to COVID-19.

The loans of $ 0.8 million, $ 1.6 million and $ 0.9 million are payable in April 2022, May 2022 and May 2023, respectively.

The loan payable in May 2023 is included in long term loans payables in our Consolidated Balance Sheets.

As of December 31, 2021, as a result of our recent acquisition of a 60 % controlling ownership stake in Fosler Construction Company Inc.

(“Fosler Construction”) as described in Note 26, Fosler Construction has two loans totaling $ 8.3 million.

Both loans have a variable interest rate with a minimum rate of 6 % and are due June 30, 2022.

Fosler Construction also has loans primarily for vehicles and equipment totaling $ 0.7 million at December 31, 2021.

The vehicle and equipment loans are included in long term loans payables in our Consolidated Balance Sheets.

NOTE 17 – PREFERRED STOCK

In May 2021, we completed a public offering of our 7.75 % Series A Cumulative Perpetual Preferred Stock (the "Preferred Stock") pursuant to an underwriting agreement (the “Underwriting Agreement”) between us and B.

Riley Securities, Inc..

At the closing, we issued to the public 4,444,700.00 shares of our Preferred Stock, at an offering price of $ 25.00 per share for net proceeds of approximately $ 106.4 million after deducting underwriting discounts, commissions but before expenses.

The Preferred Stock has a par value of $ 0.01 per share and is perpetual and has no maturity date.

The Preferred Stock has a cumulative cash dividend, when and as if declared by our Board of Directors, at a rate of 7.75 % per year on the liquidation preference amount of $ 25.00 per share and payable quarterly in arrears.

The Preferred Stock ranks, as to dividend rights and rights as to the distribution of assets upon our liquidation, dissolution or winding-up:

(1) senior to all classes or series of our common stock and to all other capital stock issued by us expressly designated as ranking junior to the Preferred Stock;

(2) on parity with any future class or series of our capital stock expressly designated as ranking on parity with the Preferred Stock;

(3) junior to any future class or series of our capital stock expressly designated as ranking senior to the Preferred Stock;

and (4) junior to all our existing and future indebtedness.

The Preferred Stock has no stated maturity and is not subject to mandatory redemption or any sinking fund.

We will pay cumulative cash dividends on the Preferred Stock when, as and if declared by our Board of Directors, only out of funds legally available for payment of dividends.

Dividends on the Preferred Stock will accrue on the stated amount of $ 25.00 per share of the Preferred Stock at a rate per annum equal to 7.75 % (equivalent to $ 1.9375 per year), payable quarterly in arrears.

Dividends on the Preferred Stock declared by our Board of Directors will be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year.

During 2021, the Company's Board of Directors approved dividends totaling $ 9.1 million..

There are no cumulative undeclared dividends of the Preferred Stock at December 31, 2021.

On June 1, 2021, the Company and B.

Riley, a related party, entered into an agreement (the “Exchange 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.

Riley under the Company’s prior A&R Credit Agreement.

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

Riley Securities, Inc., a related party, in connection with the offer and to or through B.

Riley Securities, Inc., from time to time, additional shares of Preferred Stock up to an aggregate amount of $ 76.0 million of Preferred Stock.

The Preferred Stock will have the same terms and have the same CUSIP number and be fungible with, the Preferred Stock issued during May 2021.

As of December 31, 2021, the Company sold $ 7.7 million aggregate principal amount of Preferred Stock for $ 7.7 million net proceeds.

NOTE 18 – COMMON STOCK

On February 12, 2021, we completed a public offering of our common stock pursuant to an underwriting agreement dated February 9, 2021, between us and B.

Riley Securities, Inc., as representative of the several underwriters.

At the closing, we issued to the public 29,487,180 shares of our common stock and received net proceeds of approximately $ 163.0 million after deducting underwriting discounts and commissions, but before expenses.

The net proceeds of the offering were used to make a prepayment toward the balance outstanding under our U.S.

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

On May 20, 2021, at the 2021 annual meeting of stockholders of the Company, the stockholders of the Company, upon the recommendation of the Company’s Board of Directors, approved the Babcock & Wilcox Enterprises, Inc.

2021 Long-Term Incentive Plan.

The 2021 Plan became effective upon such stockholder approval.

The maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2021 Plan equals:

(1) 1,250,000 shares, plus (2) the number of any shares subject to awards granted under the Company’s Amended and Restated 2015 Long-Term Incentive Plan (the “2015 Plan”) and outstanding as of May 20, 2021 which expire, or are terminated, surrendered, or forfeited for any reason without issuance of such shares (including for outstanding performance share awards to the extent they are earned at less than maximum).

No new awards may be granted under the 2015 Plan.

As of May 20, 2021 (immediately prior to the stockholder approval of the 2021 Plan), the total number of shares of our common stock subject to outstanding awards granted under the 2015 Plan was 2,007,152 shares.

NOTE 19 – INTEREST EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION

Interest expense in our Consolidated Statements of Operations consisted of the following components:

Interest expense in our Consolidated Financial Statements consisted of the following components:

Year ended December 31,

1 unchanged sentence

Components associated with borrowings from:

Revolving Credit Facility $ 13,988 $ 15,639

Senior notes $ 13,273 $ — $ —

Last Out Term Loans - cash interest 4,349 6,140 11,207

1 unchanged sentence

Last Out Term Loans - paid-in-kind interest — — 5,964

Revolving Credit Facility 1,416 13,988 15,639

19,038 33,578 32,810

Components associated with amortization or accretion of:

Revolving Credit Agreement 2,735 — —

Senior notes 2,510 — —

Last Out Term Loans - discount and financing fees — 3,183 10,580

Revolving Credit Facility - deferred financing fees and commitment fees 5,995 14,811 31,567

1 unchanged sentence

Revolving Credit Facility - deferred ticking fee for Amendment 16 — 1,660 5,064

Last Out Term Loans - discount and financing fees 3,183 10,580

11,240 19,654 61,090

Components associated with interest from:

Lease liabilities 2,502 2,452 14

Other interest expense 6,613 4,112 987

9,115 6,564 1,001

Total interest expense $ 39,393 $ 59,796 $ 94,901

The following table provides a reconciliation of cash, cash equivalents and restricted cash reporting within the Consolidated Balance Sheets that sum to the total of the same amounts in the Consolidated Statements of Cash Flows:

Year ended December 31,

(in thousands) 2020 2019

The following table provides a reconciliation of cash and cash equivalents and restricted cash reporting within the Consolidated Balance Sheets and in the Consolidated Statements of Cash Flows:

(in thousands) December 31, 2021 December 31, 2020 December 31, 2019

Held by foreign entities $ 42,070 $ 38,726 $ 38,921

entities 182,804 18,612 4,851

Cash and cash equivalents of continuing operations 57,338 43,772

Cash and cash equivalents 224,874 57,338 43,772

Reinsurance reserve requirements 443 4,551 9,318

Bank guarantee collateral 2,665 —

Restricted foreign accounts — 2,869 3,851

Bank guarantee collateral 997 2,665 —

Letters of credit collateral 401 — —

Restricted cash and cash equivalents 1,841 10,085 13,169

Total cash, cash equivalents and restricted cash of continuing operations shown in the Consolidated Statements of Cash Flows $ 67,423 $ 56,941

Revolving Credit Facility described in Note 14 allows for nearly immediate borrowing of available capacity to fund cash requirements in the normal course of business, meaning that the minimum United States cash on hand is maintained to minimize borrowing costs.

Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 226,715 $ 67,423 $ 56,941

The following cash activity is presented as a supplement to our Consolidated Statements of Cash Flows and is included in Net cash used in activities :

2 unchanged sentences

Income tax payments, net $ 4,991 $ 6,960 $ 3,873

Interest payments - 8.125 % Senior Notes due 2026

Interest payments on our U.S.

33 unchanged sentences

Non-vested at beginning of period 1,275 $ 2.50

Granted 1,275 2.50

Cancelled/forfeited ( 47 ) 78.57

Exercised ( 1,275 ) 2.50

Non-vested at end of period — $ —

As of December 31, 2020, total compensation expense not yet recognized related to non-vested performance-based restricted stock units was $ 3.0 million and the weighted-average period in which the expense is expected to be recognized is 1.9 years.

Performance-based, cash settled units

2 unchanged sentences

Non-vested at beginning of period 2 $ 140.30

Vested ( 19 ) 2.41

Cancelled/forfeited ( 2 ) 140.30

5 unchanged sentences

Upon exercise of the SARs, holders receive a cash-settled payment equal to the number of SARs that are being exercised multiplied by the difference between the stock price on the date of exercise minus the SARs base price.

Employee SARs are issued under the Fourth Amended and Restated 2015 LTIP, and Non-employee SARs are issued under a Non-employee SARs agreement.

The liability method is used to recognize the accrued compensation expense with cumulatively adjusted revaluations to the then current fair value at each reporting date through final settlement.

Employee SARs were issued under the Fourth Amended and Restated 2015 LTIP, and Non-employee SARs were issued under a Non-employee SARs agreement.

The liability method was used to recognize the accrued compensation expense with cumulatively adjusted revaluations to the then current fair value at each reporting date through final settlement.

We used the following assumptions to determine the fair value of the SARs granted to employees and non-employee as of December 31, 2021 and 2020:

7 unchanged sentences

Treasury spot rates for the expected duration at the date of grant, which we convert to a continuously compounded rate.

We relied upon a suboptimal exercise factor, representing the ratio of the base price to the stock price at the time of exercise, to account for potential early exercise

prior to the expiration of the contractual term.

We relied upon a suboptimal exercise factor, representing the ratio of the base price to the stock price at the time of exercise, to account for potential early exercise prior to the expiration of the contractual term.

With consideration to the executive level of the SARs holders, a suboptimal exercise multiple of 2.0 x was selected.

2 unchanged sentences

Our valuation model assumes the holders will exercise their SARs prior to the expiration of the contractual term of the SARs.

The following table presents the changes in our outstanding employee SARs and non-employee SARs for the year ending December 31, 2020 and the associated weighted-average values:

(share data in thousands) Number of employee SARs Number of non-employee SARs Total number of SARs Weighted-average value Weighted-average exercise price

Non-vested at beginning of period 168 844 1,012 $ 0.51 $ 23.44

Granted — — — — —

Vested ( 168 ) ( 844 ) ( 1,012 ) 0.49 23.44

Non-vested at end of period — — — $ — $ —

As of December 31, 2020, the total intrinsic value of the vested SARs was $ 3.3 million.

As of December 31, 2021 , the SARS are fully vested and their total intrinsic value is $ 7.0 million.

NOTE 21 – PROVISION FOR INCOME TAXES

4 unchanged sentences

Other than the United States ( 1,341 ) 61,673 ( 59,837 )

Loss before provision for income taxes $ ( 3,918 ) $ ( 124,447 )

Income (loss) before income tax expense $ 29,314 $ ( 3,918 ) $ ( 124,447 )

Significant components of the provision for income taxes are as follows:

6 unchanged sentences

( 103 ) 1,084 ( 257 )

( 8,772 ) — —

Foreign 383 3,133 850

2 unchanged sentences

(1) The 2020 amount reflects a benefit of $ 0.6 million offsetting tax expense of $ 0.6 million in discontinued operations pursuant to the guidance in paragraph 740-20-45-7 that requires all components, including discontinued operations, be considered when determining the tax benefit from a loss from continuing operations.

The 2021 amount reflects estimated withholding taxes on the divestiture of Diamond Power Machine (Hubei) Co.

(2) The 2020 amount reflects $ 1.1 million of deferred tax expense as a result of the change in indefinite reinvestment assertion related to certain foreign subsidiaries.

(3) The 2021 amount reflects a $ 8.7 million of deferred tax benefit primarily attributable to a reduction in the valuation allowance on net operating losses and temporary deductible benefits in certain states that are now expected to be recovered.

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income (loss) before the provision for income taxes.

11 unchanged sentences

Luxembourg impairment of investments — ( 30,603 ) ( 65,848 )

Effect of DPMH sale

( 1,090 ) — —

Accrual adjustments — 405 ( 995 )

5 unchanged sentences

Other ( 202 ) 299 674

Income tax expense $ 8,179 $ 5,286

Income tax (benefit) expense

$ ( 2,224 ) $ 8,179 $ 5,286

(1) The 2020 amount reflects a restructuring of intercompany debt that resulted in the reduction of certain foreign net operating loss carryforwards.

11 unchanged sentences

Foreign tax credit carryforward 5,381 7,312

Property, plant and equipment — 614

Other tax credits 5,336 3,270

Lease liability 15,455 —

Other 4,810 8,478

4 unchanged sentences

Property, plant and equipment $ 1,653 $ 2,763

Right of use assets 14,574 —

Long-term contracts 7,045 —

Unremitted earnings 1,069 1,084

2 unchanged sentences

Net deferred tax liabilities $ ( 1,399 ) $ ( 3,712 )

At December 31, 2020, the Company has tax-effected foreign net operating loss (NOL) carryforwards of approximately $ 356.8 million available to offset future taxable income in certain foreign jurisdictions.

At December 31, 2021, the Company has foreign net operating loss (NOL) carryforward DTAs of approximately $ 357.8 million available to offset future taxable income in certain foreign jurisdictions.

Of these foreign NOL carryforwards, $ 187.6 million do not expire.

The remaining foreign NOLs will expire between 2022 and 2037.

As December 31, 2020, the Company has tax-effected U.S.

federal NOL carryforwards of approximately $ 42.5 million.

Of this amount, $ 20.7 million will expire between 2031 and 2037.

As December 31, 2021, the Company has U.S.

federal NOL carryforward DTAs of approximately $ 43.9 million.

Of this amount, $ 20.7 million will expire in 2036 and 2037.

The remaining amount of U.S.

3 unchanged sentences

federal NOL carryforward is not subject to the Code Section 382 limitation.

At December 31, 2020, the Company has tax-effected state NOL carryforwards of $ 23.9 million available to offset future taxable income in various jurisdictions.

At December 31, 2021, the Company has state NOL carryforward DTAs of $ 23.7 million available to offset future taxable income in various jurisdictions.

Of this amount, $ 23.3 million will expire between 2022 and 2041.

At December 31, 2020,the Company has tax-effected foreign tax credit carryforwards of $ 7.3 million.

At December 31, 2021,the Company has foreign tax credit carryforwards of $ 5.4 million.

These carryforwards will expire between 2022 and 2028.

14 unchanged sentences

Under Code Section 382, a company has undergone an ownership change if shareholders owning at least 5% of the company have increased their collective holdings by more than 50% during the prior three-year period.

Based on information that is publicly available, the Company determined that a Section 382 ownership change occurred on July 23, 2019 as a result of the Equitization Transactions described in Part II, Item 7, Liquidity and Capital Resources, 2019 Rights Offering.

As a result of this change in ownership, the Company estimated that the future utilization of our federal NOLs (and certain credits and previously disallowed interest deductions) will become limited to approximately $ 1.2 million annually ($ 0.3 million tax effected) The Company maintains a full valuation allowance on its U.S.

Based on information that is publicly available, the Company determined that a Section 382 ownership change occurred on July 23, 2019.

deferred tax assets, including the deferred tax assets associated with the federal NOLs, credits and disallowed interest carryforwards.

2 unchanged sentences

The Company continues to assert indefinite reinvestment in the remaining $ 297.4 million of existing earnings that are not expected to be distributed in the future.

Upon repatriation of those earnings, in the form of dividends or otherwise, the Company would be subject to withholding taxes payable to the various foreign countries.

The Company expects to take the 100% dividends received deduction to offset any U.S.

federal taxable income on the undistributed earnings.

Upon repatriation of those earnings, in the form of dividends or otherwise, the Company would be subject to withholding taxes payable to various foreign countries.

The Company expects to take the 100% dividends received deduction to offset any US federal taxable income on the undistributed earnings.

Withholding taxes of approximately $ 1.6 million would be payable upon remittance of these previously unremitted earnings.

11 unchanged sentences

Decreases due to lapse of applicable statute of limitation — ( 87 ) ( 104 )

CTA/Translation ( 2,807 ) — —

Balance at end of period $ 36,448 $ 39,013 $ 1,229

5 unchanged sentences

Tax years 2015 through 2020 remain open to assessment by the United States Internal Revenue Service and various state and international tax authorities.

With few exceptions, we do not have any returns under examination for years prior to 2014.

The United States Internal Revenue Service has completed examinations of the federal tax returns of our former parent, BWXT, through 2014, and all matters arising from such examinations have been resolved.

We do not have any returns under examination for years prior to 2014.

The United States

Internal Revenue Service has completed examinations of the federal tax returns of our former parent, BWXT, through 2014, and all matters arising from such examinations have been resolved.

NOTE 22 – CONTINGENCIES

9 unchanged sentences

SEC Investigation

SEC is conducting a formal investigation of the Company, focusing on the accounting charges and related matters involving the Company's B&W Renewable segment from 2015-2019.

The SEC has served multiple subpoenas on the Company for documents.

The Company is cooperating with the SEC related to the subpoenas and investigation.

The SEC has taken testimony from past and current officers, directors, and employees in addition to also seeking testimony from certain third-parties.

It is reasonably possible that the SEC may bring one or more claims against the Company and certain individuals.

Due to the stage of the investigation, we are unable to estimate the amount of loss or range of potential loss of any claim.

However, there can be no assurance that such claims will not have a material impact on the Company.

As the Company previously disclosed, the U.S.

SEC ('SEC") had been conducting a formal investigation of the Company, focusing on the accounting charges and related matters involving the Company's B&W Renewable segment from 2015-2019.

On October 20,2021, the SEC informed the Company that the staff does not intend to recommend any enforcement action against the Company.

Stockholder Derivative and Class Action Litigation

6 unchanged sentences

We believe that the outcome of the Stockholder Litigation will not have a material adverse impact on our consolidated financial condition, results of operations or cash flows, net of any insurance coverage.

Russian Invasion of Ukraine

We do not currently have contracts directly with Russian entities or businesses and we currently do not do business in Russia directly.

We believe the Company’s only involvement with Russia or Russian-entities, involves sales of our products in the amount of approximately $ 3.1 million by a wholly-owned Italian subsidiary of the Company to non-Russian counterparties who may resell our products to Russian entities or perform services in Russia using our products.

The economic sanctions and export-control measures and the ongoing invasion of Ukraine could impact our subsidiary’s rights and responsibilities under the contracts and could result in potential losses to the Company.

Due to the nature of our business, we are, from time to time, involved in routine litigation or subject to disputes or claims related to our business activities, including, among other things:

4 unchanged sentences

Gains and losses deferred in accumulated other comprehensive income (loss) ("AOCI") are generally reclassified and recognized in the Consolidated Statements of Operations once they are realized.

The changes in the components of AOCI, net of tax, for the year ended December 31, 2020 and 2019 were as follows:

(in thousands) Currency translation (loss) gain Net unrealized gain (loss) on derivative instruments Net unrecognized loss related to benefit plans Total

The changes in the components of AOCI, net of tax, for the years ended of 2021, 2020, and 2019 were as follows:

(in thousands) Currency translation

loss Net unrealized gain (loss) on derivative instruments Net unrecognized loss

related to benefit plans

(net of tax) Total

Balance at December 31, 2018 $ ( 10,834 ) $ 1,362 $ ( 1,960 ) $ ( 11,432 )

2 unchanged sentences

Amounts reclassified from AOCI to advanced billings on contracts — ( 197 ) — ( 197 )

Net other comprehensive income (loss) 16,577 ( 1,362 ) ( 1,857 ) 13,358

Net other comprehensive (loss) income 16,577 ( 1,362 ) ( 1,857 ) 13,358

Balance at December 31, 2019 $ 5,743 $ — $ ( 3,817 ) $ 1,926

1 unchanged sentence

Reclassified from AOCI to net income (loss) — — ( 998 ) ( 998 )

Net other comprehensive loss ( 53,318 ) — ( 998 ) ( 54,316 )

Net other comprehensive (loss) income ( 53,318 ) — ( 998 ) ( 54,316 )

Balance at December 31, 2020 $ ( 47,575 ) $ — $ ( 4,815 ) $ ( 52,390 )

Other comprehensive income (loss) before reclassifications ( 3,412 ) — 676 ( 2,736 )

Reclassified from AOCI to net income (loss) ( 4,512 ) — 816 ( 3,696 )

Net other comprehensive income (loss) ( 7,924 ) — 1,492 ( 6,432 )

Balance at December 31, 2021 $ ( 55,499 ) $ — $ ( 3,323 ) $ ( 58,822 )

The amounts reclassified out of AOCI by component and the affected Consolidated Statements of Operations line items are as follows (in thousands):

AOCI component Line items in the Consolidated Statements of Operations affected by reclassifications from AOCI Year ended December 31,

Release of currency translation gain with the sale of business Loss on sale of business $ — $ ( 3,176 )

2021 2020 2019

Release of currency translation adjustment with the sale of business Loss on sale of business $ 4,512 $ — $ ( 3,176 )

Derivative financial instruments Other – net

Amortization of prior service cost on benefit obligations Benefit plans, net $ 998 $ 1,857

Pension and post retirement adjustments, net of tax Benefit plans, net ( 816 ) 998 1,857

Net (loss) income $ 3,696 $ 998 $ ( 1,521 )

NOTE 24 – FAIR VALUE MEASUREMENTS

4 unchanged sentences

Mutual funds 714 — 714

Corporate Stocks 4,168 4,168 —

United States Government and agency securities 2,017 2,017 —

4 unchanged sentences

Mutual funds 636 — 636

Corporate Stocks 4,168 4,168 —

United States Government and agency securities 4,365 4,365 —

Total fair value of available-for-sale securities $ 15,308 $ 14,672 $ 636

Available-For-Sale Securities

Our investments in available-for-sale securities are presented in other assets on our Consolidated Balance Sheets with contractual maturities ranging from 0 - 6 years.

Available-For-Sale Debt Securities

Our investments in available-for-sale debt securities are presented in other assets on our Consolidated Balance Sheets with contractual maturities ranging from 0 - 5 years.

See Note 14 above for a discussion of our recent offerings of senior notes.

The fair value of the senior notes is based on readily available quoted market prices as of December 31, 2021.

(in thousands) December 31, 2021

Senior Notes Carrying Value Estimated Fair Value

8.125 % Senior Notes due 2026 ('BWSN')

$ 186,219 $ 195,250

6.50 % Senior Notes due 2026 ('BWNB')

$ 151,440 $ 150,229

Other Financial Instruments

2 unchanged sentences

The carrying amounts that we have reported in the accompanying Consolidated Balance Sheets for cash and cash equivalents and restricted cash and cash equivalents approximate their fair values due to their highly liquid nature.

• Revolving debt and Last Out Term Loans .

• Last Out Term Loans and Revolving Debt .

We base the fair values of debt instruments on quoted market prices.

Where quoted prices are not available, we base the fair values on Level 2 inputs such as the present value of future cash flows discounted at estimated borrowing rates for similar debt instruments or on estimated prices based on current yields for debt issues of similar quality and terms.

The fair value of our debt instruments approximated their carrying value at December 31, 2020 and 2019.

The fair value of our Last Out Term Loans and Revolving Debt approximated their carrying value at December 31, 2020.

The fair value of the warrants was established using the Black-Scholes option pricing model value approach.

• Contingent consideration:

In connection with the Fosler Construction Company acquisition, the Company agreed to pay contingent consideration based on the achievement of targeted revenue thresholds for the year ended December 31, 2022.

The range of undiscounted amounts the Company could be required to pay under the contingent consideration arrangement is between $ 0.0 million and $ 10.0 million.

As of December 31, 2021, the fair value of the contingent earn-out liability is $ 9.2 millions and is classified as a component of other non-current liabilities in the Company's Consolidated Balance Sheets.

The fair value measurement of the contingent consideration related to the Fosler Construction Company acquisition was categorized as a Level 3 liability, as the measurement amount is based primarily on significant inputs not observable in the markets.

The Company evaluates the fair value of contingent consideration and the corresponding liability each reporting period using an option pricing framework.

The Company estimates projections during the earn-out period and volatility within the option pricing model captures variability in the potential pay-out.

The analysis considers a discount rate applicable to the underlying projections and the risk of the Company paying the future liability.

NOTE 25 – RELATED PARTY TRANSACTIONS

The Letter Agreement entered into on April 5, 2019, pursuant to which the parties agreed to use their reasonable best efforts to effect a series of equitization transactions for a portion of the Last Out Term Loans, between B.

Riley, Vintage and the Company included agreement to negotiate one or more agreements that provide B.

Riley and Vintage with certain governance rights, including (i) the right for B.

Riley and Vintage to each nominate up to three individuals to serve on our board of directors, subject to certain continued lending and equity ownership thresholds and (ii) pre-emptive rights permitting B.

Riley to participate in future issuances of our equity securities.

The Company also entered into a Registration Rights Agreement with B.

Riley and Vintage on April 30, 2019 providing each with certain customary registration rights for the shares of our common stock that they hold.

On April 30, 2019, the Company entered into an Investor Rights Agreement with B.

Riley and Vintage providing the governance rights contemplated by the Letter Agreement.

The Company believes it transactions with related parties were conducted on terms equivalent to those prevailing in an arm's length transaction.

Transactions with B.

Based on its Schedule 13D filings, B.

Based on its Schedule 13D filings with the SEC, B.

Riley beneficially owns 30.3 % of our outstanding common stock as of December 31, 2021.

Riley is party to the Last Out Term Loans as described in Note 15 and also provided the B.

Riley Guaranty as described in Note 14.

In connection with the B.

Riley Guaranty, the Company entered into the Fee and Interest Equitization Agreement described in Note 14.

Under the Equitization Agreement the Company issued 1.7 million shares of unregistered common stock on June 8, 2020, 1.2 million shares of unregistered common stock on June 30, 2020, 2.3 million shares of unregistered common stock on September 30, 2020 and 2.4 million shares of unregistered common stock on December 31, 2020 to B.

Riley in satisfaction of the B.

Riley Guaranty Fee and payment of certain interest payments described in Note 14.

All of these issued shares are unregistered.

We entered an agreement with BRPI Executive Consulting, LLC, an affiliate of B.

Riley, on November 19, 2018 for the services of Mr.

Kenny Young, to serve as our Chief Executive Officer until November 30, 2020, unless terminated by either party with thirty days written notice.

On November 9, 2020 we amended the agreement with BRPI Executive Consulting, LLC to extend the services of Mr.

Kenny Young to serve as our Chief Executive Officer until December 31, 2023.

Riley was party to the Last Out Term Loans under our prior A&R Credit Agreement, as described in Note 15.

We entered into an agreement with BRPI Executive Consulting, LLC, an affiliate of B.

Riley, on November 19, 2018 and amended the agreement on November 9, 2020 to retain the services of Mr.

Kenny Young, to serve as our Chief Executive Officer until December 31, 2023, unless terminated by either party with thirty days written notice.

Under this agreement, payments are $ 0.75 million per annum, paid monthly.

2 unchanged sentences

Young's performance and services.

In April 2020, we temporarily deferred the monthly fee paid to BRPI Executive Consulting, LLC for the services of our Chief Executive Officer by 50 % as described in Note 1.

Total fees associated with B.

Riley related to the Last Out Term Loans and services of Mr.

Kenny Young, both as described above, were $ 7.4 million and $ 12.4 million for the years ended December 31, 2020 and 2019, respectively.

Kenny Young, both as de scribed above, were $ 0.8 million, $ 7.4 million and $ 12.4 million for the twelve months ended December 31, 2021, 2020 and 2019, respectively .

On November 13, 2020 we entered into an agreement with B.

2 unchanged sentences

Riley, to purchase 200,000 shares of Class A common stock of Eos Energy Storage LLC for an aggregate purchase price of $ 2.0 million.

The shares were subsequently sold in January 2021 for which the Company recognized net proceeds of $ 4.5 million.

On August 10, 2020, B.

The shares were sold in January 2021 for which the Company recognized net proceeds of $ 4.5 million.

The public offering of our 8.125 % Senior Notes in February 2021, as described in Note 14, was conducted pursuant to an underwriting agreement dated February 10, 2021, between us and B.

Riley Securities, Inc., an affiliate of B.

Riley, as representative of several underwriters.

At the closing date on February 12, 2021, we paid B.

Riley Securities, Inc.

$ 5.2 million for underwriting fees and other transaction cost related to the 8.125 % Senior Notes offering.

The public offering of our common stock, as described in Note 18, was conducted pursuant to an underwriting agreement dated February 9, 2021, between us and B.

Riley Securities, Inc., as representative of the several underwriters.

Also on February 12, 2021, we paid B.

Riley Securities, Inc.

$ 9.5 million for underwriting fees and other transaction costs related to the offering.

On February 12, 2021, the Company and B.

Riley entered into the Exchange Agreement pursuant to which we agreed to issue to B.

Riley $ 35.0 million aggregate principal amount of 8.125 % Senior Notes in exchange for a deemed prepayment of $ 35.0 million of our existing Tranche A term loan with B.

Riley Financial in the Exchange , as described in Note 14 .

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

Riley Securities, Inc., a related party, in which we may sell, from time to time, up to an aggregated principal amount of $ 150.0 million of 8.125 % Senior N otes due 2026 to or through B.

Riley Securities, Inc., as described in Note 14 .

As of December 31, 2021, we paid B.

Riley Securities, In c.

$ 0.5 million for underwriting fees and other transaction costs related to the offering.

The public offering of our 7.75 % Series A Cumulative Perpetual Preferred Stock, as described in Note 17, was conducted pursuant to an underwriting agreement dated May 4, 2021, between us and B.

Riley Securities, Inc., as representative of several underwriters.

At the closing date on May 2021, we paid B.

Riley Securities, Inc.

$ 4.3 million for underwriting fees and other transaction cost related to the Preferred Stock offering.

On May 26, 2021, we completed the additional sale of 444,700 shares of our Preferred Stock, related to the grant to the underwriters, as described i n Note 17, and paid B.

Riley Securities, Inc.

$ 0.4 million for underwriting fees in conjunction with the transaction.

On June 1, 2021, we issued 2,916,880 shares of the Company’s 7.75 % Series A Cumulative Perpetual Preferred Stock and paid $ 0.4 million in cash due to B.

Riley, a related party, in exchange for a deemed prepayment of $ 73.3 million of our then existing Last Out Term Loans and paid $ 0.9 million in cash for accrued interest, as described in Note 17.

On June 30, 2021, we entered into new Debt Facilities, as described in Note 16 .

In connection with the Company’s entry into the Debt Facilities, B.

Riley Financial, Inc., an affiliate of B.

Riley, has provided a guaranty of payment with regard to the Company’s obligations under the Reimbursement Agreement, as describe in Note 16 .

Under a fee letter with B.

Riley, the Company shall pay B.

Riley $ 0.9 million per annum in connection with the B.

Riley Guaranty.

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

Riley Securities, Inc., a related party, in which we may sell, from time to time, up to an aggregated principal amount of $ 76 million of Preferred Stock to or through B.

Riley Securities, Inc., as described in Note 17 .

As of December 31, 2021, we paid B.

Riley Securities, Inc.

$ 0.2 million for underwriting fees and other transaction costs related to the offering.

The public offering of our 6.50 % Senior Notes in December 2021, as described in Note 14, was conducted pursuant to an underwriting agreement dated December 8, 2021, between us and B.

Riley Securities, Inc., an affiliate of B.

Riley, as representative of several underwriters.

At the closing date on December 13, 2021, we paid B.

Riley Securities, Inc.

$ 5.5 million for underwriting fees and other transaction cost related to the 6.50 % Senior Notes offering.

On December 17, 2021, B.

Riley Financial, Inc.

entered into a project specific indemnity rider (the “Indemnity Rider”) to the General Agreement of Indemnity, dated May 28, 2015, between us and Berkley Insurance Company (the “Surety”).

Pursuant to the terms of the Indemnity Rider, B.

entered into a General Agreement of Indemnity (the "Indemnity Agreement"), between us and AXA-XL and or its affiliated associated and subsidiary companies (collectively the “Surety”).

Pursuant to the terms of the Indemnity Agreement, B.

Riley will indemnify the Surety for losses the Surety may incur as a result of providing a payment and performance bond in an aggregate amount not to exceed € 30.0 million in connection with our proposed performance on a specified project.

In consideration of B.

Riley's execution of the Indemnity Rider, we paid B.

Riley a fee of $ 0.6 million following the issuance of the bond by the Surety, which represents approximately 2.0 % of the bonded obligations.

Under the A&R Credit Agreement, any draw or claim under the Indemnity Rider will convert into a Tranche A-5 Last Out Term Loan for the benefit of B.

Refer to Note 14 and Note 15 for additional related party transactions with B.

Riley and its affiliates related to our Revolving Debt and Last Out Term Loans.

Refer to Note 25 for additional related party transactions with B.

Riley and its affiliates regarding the subsequent events in conjunction with the 2021 Common Stock Offering, 2021 Senior Notes Offering, 2021 Exchange Agreement and payment of $ 75 million towards our existing Last Out Term Loans .

Riley's execution of the Indemnity Agreement, we paid B.

Riley a fee of $ 1.7 million following the issuance of the bond by the Surety, which represents approximately 5.0 % of the bonded obligations, to be amortized over the term of the agreement.

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

At the closing date on December 30, 2021, we paid B.

Riley Securities, Inc.

$ 0.5 million for underwriting fees and other transaction cost related to the 6.50 % Senior Notes overallotment.

Transactions with Vintage Capital Management, LLC

Based on its Schedule 13D filings, Vintage beneficially owns 19.7 % of our outstanding common stock as of December 31, 2020.

NOTE 23 – ASSETS HELD FOR SALE, DIVESTITURES AND DISCONTINUED OPERATIONS

On March 26, 2021, Vintage and B.

Riley completed a transaction pursuant to which B.

Riley agreed to purchase from Vintage, and Vintage agreed to sell to B.

Riley, all 10,720,785 shares of our common stock owned by Vintage.

Based on its Schedule 13D filings, Vintage beneficially owns 0 % o f our outstanding common stock as of December 31, 2021.

NOTE 26 – ACQUISITIONS, ASSETS HELD FOR SALE, DIVESTITURES AND DISCONTINUED OPERATIONS

Fosler Construction

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

(“Fosler Construction”).

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 with a track record of successfully completing solar projects profitably with union labor and aligning 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 will operate under the name Fosler Solar, a Babcock and Wilcox company.

The total fair value of consideration for the acquisition is $ 36.0 millions, including $ 27.2 million in cash plus $ 8.8 million in estimated fair value of the contingent consideration arrangement.

In connection with the acquisition, the Company agreed to pay contingent consideration based on the achievement of targeted revenue thresholds for the year ended December 31, 2022.

The range of undiscounted amounts the Company could be required to pay under the contingent consideration arrangement is between $ 0.0 million and $ 10.0 million.

We estimated fair values primarily using the discounted cash flow method at September 30, 2021 for the preliminary allocation of consideration to the assets acquired and liabilities assumed.

During the measurement period, we will continue to obtain information to assist in finalizing the fair value of assets acquired and liabilities assumed, which may differ materially from these preliminary estimates.

If we determine any measurement period adjustments are material, we will apply those adjustments, including any related impacts to net income, in the reporting period in which the adjustments are determined.

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.

The provisional measurements noted in the table below are preliminary and subject to modification in the future.

The preliminary purchase price allocation to assets acquired and liabilities assumed in the acquisitions were:

Purchase Price Allocation at September 30, 2021 Purchase Price Allocation Adjustments since September 30, 2021 (3)

Purchase Price Allocation at December 31, 2021 Purchase Price Allocation at December 31, 2021

(in thousands) Fosler Construction VODA

Cash $ — $ — $ — $ 4,737

Accounts receivable 1,904 121 2,025 5,654

Contracts in progress 1,363 ( 158 ) 1,205 258

Other current assets 1,137 ( 835 ) 302 825

Property, plant and equipment 9,527 ( 14 ) 9,513 253

43,230 8,749 51,979 17,176

Other assets 17,497 ( 4,600 ) 12,897 14,321

Right of use assets 1,093 — 1,093 433

Debt ( 7,625 ) — ( 7,625 ) —

Current liabilities ( 5,073 ) ( 390 ) ( 5,463 ) ( 5,181 )

Advance billings on contracts ( 1,557 ) 238 ( 1,319 ) ( 2,036 )

Non-current lease liabilities ( 1,730 ) — ( 1,730 ) ( 302 )

Other non-current liabilities ( 4,112 ) 1,218 ( 2,894 ) ( 3,264 )

Non-controlling interest (2)

( 22,262 ) ( 1,734 ) ( 23,996 ) —

Net acquisition cost $ 33,392 $ 2,595 $ 35,987 $ 32,874

(1) Goodwill is calculated as the excess of the purchase price over the net assets acquired.

With respect to the Fosler Construction acquisition, goodwill represents Fosler's ability to significantly expand EPC and O&M services among new customers across the U.S.

by leveraging B&W's access to capital and geographic reach.

With respect to the VODA acquisition, goodwill represents VODA's ability to significantly expand within the aftermarket parts and services industries by leveraging B&W's access to capital and existing platform within the renewable service market.

Goodwill is not expected to be deductible for U.S federal income tax purposes.

(2) The fair value of the non-controlling interest was derived based on the fair value of the 60 % controlling interest acquired by B&W.

The transaction price paid by B&W reflects a Level 2 input involving an observable transaction involving an ownership interest in Fosler Construction.

Also, as described above, a portion of the purchase consideration relates to the contingent consideration.

(3) Our preliminary purchase price allocation changed due to additional information and further analysis.

Intangible assets are included in other assets above and consists of the following:

Fosler Construction VODA

(in thousands) Estimated Acquisition Date Fair Value Weighted Average Estimated Useful Life Estimated Acquisition Date Fair Value Weighted Average Estimated Useful Life

Customer Relationships 9,400 12 years 13,855 11 years

Tradename — — 228 3 years

Backlog 3,100 5 months — —

Total intangible assets (1)

$ 12,500 $ 14,083

(1) Intangible assets were valued using the income approach, which includes significant assumptions around future revenue growth, profitability, discount rates and customer attrition.

Such assumptions are classified as level 3 inputs within the fair value hierarchy.

The Company incurred approximately $ 0.7 million and $ 0.4 million of costs related to the acquisitions of VODA and Fosler Construction, respectively, which were recorded as a component of our operating expenses in our Consolidated Statement of Operations for 2021.

Acquisitions - Subsequent Event

On February 1, 2022, we acquired 100 % ownership of Fossil Power Systems, Inc, (“FPS”) for approximately $ 59.1 million, excluding working capital adjustments.

FPS 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.

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.

Assets Held for Sale

Assets held for sale are required to be recorded at the lower of carrying value or fair value less any costs to sell.

In December 2020, we determined that certain fixed assets within the B&W Thermal segment met the criteria to be classified as held for sale.

At December 31, 2020, the carrying value of the assets held for sale was lower than the estimated fair value less costs to sell.

Certain real property assets for the Copley, Ohio location were sold on March 15, 2021 for $ 4.0 million.

We received $ 3.3 million of net proceeds after adjustments and recognized a gain on sale of $ 1.9 million.

In conjunction with the sale, we executed a leaseback agreement commencing March 16, 2021 and expiring on March 31, 2033.

These assets were treated as assets held for sale on our Consolidated Balance Sheets as of December 31, 2020.

Certain real property assets for the Lancaster, Ohio location were sold on August 13, 2021 for $ 18.9 million.

We received $ 15.8 million of net proceeds after adjustments and expenses and recognized a gain on sale of $ 13.9 million.

In conjunction with the sale, we executed a leaseback agreement commencing August 13, 2021 and expiring on August 31, 2041.

These assets were treated as assets held for sale on our Consolidated Balance Sheets as of December 31, 2020.

In December 2019, we determined that a small business within the B&W Thermal segment met the criteria to be classified as held for sale.

At December 31, 2020, the carrying value of the net assets planned to be sold approximated the estimated fair value less costs to sell.

The sale closed March 8, 2021.

The sale of the fixed assets and the divestiture of the business held for sale could result in a gain or loss on sale to the extent the ultimate selling price differs from the current carrying value of the net assets recorded.

The sales are expected to be completed in 2021.

Refer to Divestiture s below as this sale closed March 5, 2021.

The following table summarizes the carrying value of the assets and liabilities held for sale at December 31, 2020:

(in thousands) December 31, 2020 December 31, 2019

(in thousands) December 31, 2020

Accounts receivable – trade, net $ 2,103

16 unchanged sentences

Current liabilities held for sale 8,305

Assets Held for Sale - Subsequent Event

On January 21, 2021, we entered into a definitive agreement for the sale of a small business within the B&W Thermal segment that was classified as held for sale for a total sales price of $ 2.8 million.

The sale closed on March 8, 2021.

Total liabilities held for sale $ 8,305

Effective March 5, 2021, we sold all of the issued and outstanding capital stock of Diamond Power Machine (Hubei) Co., Inc, for $ 2.8 million.

We received $ 2.0 million in gross proceeds before expenses and recorded an $ 0.8 million favorable contract asset for the amortization period from March 8, 2021 through December 31, 2023.

For the twelve months ended December 31, 2021, we recognized a $ 1.8 million pre-tax loss, inclusive of the recognition of $ 4.5 million of currency translation adjustment, on the sale of the business and after consideration of certain working capital adjustments that are in dispute.

Additional adjustments may be necessary as this is finalized.

On March 17, 2020, we fully settled the remaining escrow associated with the sale of PBRRC and received $ 4.5 million in cash.

Effective May 31, 2019, we sold all of the issued and outstanding capital stock of Loibl, a material handling business in Germany, to Lynx Holding GmbH for € 10.0 million (approximately $ 11.4 million), subject to adjustment.

We received $ 7.4 million in cash and recognized a $ 3.6 million pre-tax loss on sale of this business in 2019, net of $ 0.7 million in transaction costs.

Proceeds from the transaction were primarily used to reduce outstanding balances under our U.S.

Revolving Credit Facility.

Discontinued Operations

1 unchanged sentence

NOTE 27 – NEW ACCOUNTING STANDARDS

We adopted the following accounting standard during the year ended December 31, 2021:

Effective January 1, 2021 we adopted ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

The impact of this standard on our consolidated financial statements was immaterial.

In March 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848):

This update is an amendment to ASU 2020-04, Reference Rate Reform (Topic 848):

As of December 31, 2021, we have not yet elected any optional expedients provided in the standard.

We will apply the accounting relief as relevant contract and hedge accounting relationship modifications are made during the reference rate reform transition period.

We do not expect the standard to have a material impact on our consolidated financial statements.