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Item 9A. Controls and Procedures

2023-03-16 compared with 2022-03-08 · 47 added, 27 removed, 419 unchanged (15% of the section changed)

4 unchanged sentences

It should be noted that the design of any system of disclosure controls and procedures is based in part upon various assumptions about the likelihood of future events, and we cannot assure that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Based on the evaluation referred to above, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures are effective as of December 31, 2021 to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and

Exchange Commission, and such information is accumulated and communicated to management as appropriate to allow timely decisions regarding disclosure.

Based on the evaluation referred to above, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures are effective as of December 31, 2022 to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and such information is accumulated and communicated to management as appropriate to allow timely decisions regarding disclosure.

Management's Report on Internal Control Over Financial Reporting

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Our financial reporting process and associated internal controls were designed to provide reasonable assurance to management and the Board of Directors regarding the reliability of financial reporting and the preparation of our Consolidated Financial Statements for external reporting in accordance with accounting principles generally accepted in the United States of America.

On September 30, 2021, we acquired a 60% controlling ownership in Fosler Construction and on November 30, 2021, we acquired 100% ownership of VODA, as described in Note 26 of the Consolidated Financial Statements in Part I of this report.

On February 2, 2022, we acquired 100% controlling ownership Fossil Power Systems and on February 28, 2022, we acquired 100% ownership of Optimus Industries, as described in Note 26 of the Consolidated Financial Statements in Part I of this report.

In accordance with the SEC’s general guidance that an assessment of a recently acquired business may be omitted from our internal control over financial reporting scope in the year of acquisition we excluded the acquired businesses from management’s report on internal control over financial reporting.

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Attestation Report of Independent Registered Public Accounting Firm

The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by Deloitte & Touche LLP, our independent registered public accounting firm, as stated in their report, which is included in Item 8, Financial Statements and Supplementary Data under the heading “Report of Independent Registered Public Accounting Firm,” and is incorporated herein by reference.

The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by Deloitte & Touche LLP, our independent registered public accounting firm, as stated in their report, which is included in Item 9A below, under the heading “Report of Independent Registered Public Accounting Firm,” and is incorporated herein by reference.

Changes in Internal Control Over Financial Reporting

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We have not experienced any material impact to our internal controls over financial reporting, despite the fact that some of our team members are working remotely in response to the COVID-19 pandemic.

In addition, during 2021, the Company outsourced certain support functions to external service providers of which some were still in transition as of December 31, 2021.

In addition, during 2022, the Company continued to outsource certain support functions to external service providers of which some were still in transition as of December 31, 2022.

We are continually monitoring and assessing these situations on our internal controls to ensure their operating effectiveness.

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We have audited the internal control over financial reporting of Babcock & Wilcox Enterprises, Inc.

(the “Company”) 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 (COSO).

In our opinion, the Company maintained, in

all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2021, of the Company and our report dated March 8, 2022 , expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company’s change in accounting principle.

As described in Item 9A, management excluded from its assessment the internal control over financial reporting at Fosler Construction Company Inc.

and VODA A/S, which were acquired on September 30, 2021, and November 30, 2021, respectively, and whose financial statements constitute approximately 14% of total assets and 2% of revenues of the consolidated financial statement amounts as of and for the year ended December 31, 2021.

and subsidiaries (the “Company”) as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2022, of the Company and our report dated March 16, 2023 , expressed an unqualified opinion on those financial statements.

As described in Item 9A above, management excluded from its assessment the internal control over financial reporting at Fossil Power Systems and Optimus Industries, which were acquired on February 2, 2022, and February 28, 2022, respectively, and whose financial statements constitute approximately 11% of total assets and 7% of revenues of the consolidated financial statement amounts as of and for the year ended December 31, 2022.

Accordingly, our audit did not include the internal control over financial reporting at these acquired entities.

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Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

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.

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.

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Other Information

On March 2, 2022, our Board of Directors approved an amendment to our Amended and Restated Bylaws of Babcock & Wilcox Enterprises, Inc.

(the “Amendment”).

Pursuant to such amendment, the entirety of Section 2.10(e) was deleted.

As a result of the Amendment, our Bylaws no longer include an age limitation for members of our Board of Directors.

The effective date of the Amendment is March 2, 2022.

A complete copy of the Bylaws reflecting the Amendment is attached to this Annual Report on Form 10-K as Exhibit 3.4.

As discussed in Note 28 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, the Company entered into the Second Amended Revolving Credit Agreement on March 14, 2023, which amended the terms of the Amended Revolving Credit Agreement to (i) waive the senior net leverage ratio test for purposes of enacting a Permitted Restricted Payment on Preferred Shares (each as defined in the Second Amended Revolving Credit Agreement) to be made on March 31, 2023;

and (ii) replace the use of LIBOR with Term SOFR throughout.

The Company paid an amendment fee of $25,000 to PNC in consideration of the Second Amended Revolving Credit Agreement.

Certain of the lenders, as well as certain of their respective affiliates, have performed and may in the future perform for the Company and its subsidiaries, various commercial banking, investment banking, lending, underwriting, trust services, financial advisory and other financial services, for which they have received and may in the future receive customary fees and expenses.

The foregoing description is qualified in its entirety by the complete text of the Amended Revolving Credit Agreement, which is attached to this Annual Report on Form 10-K as Exhibit 10.78.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not Applicable

Directors, Executive Officers and Corporate Governance

The information required by this item with respect to directors is incorporated by reference to the material appearing under the heading “Election of Directors” in the Proxy Statement for our 2022 Annual Meeting of Stockholders.

The information required by this item with respect to compliance with section 16(a) of the Securities and Exchange Act of 1934, as amended, is incorporated by reference to the material appearing under the heading “Section 16(a) Beneficial Ownership Compliance” in the Proxy Statement for our 2022 Annual Meeting of Stockholders.

The information

required by this item with respect to compliance with section 16(a) of the Securities and Exchange Act of 1934, as amended, is incorporated by reference to the material appearing under the heading “Section 16(a) Beneficial Ownership Compliance” in the Proxy Statement for our 2023 Annual Meeting of Stockholders.

The information required by this item with respect to the Audit Committee and Audit and Finance Committee financial experts is incorporated by reference to the material appearing in the “Director Independence” and “Audit and Finance Committee” sections under the heading “Corporate Governance –Board of Directors and Its Committees” in the Proxy Statement for our 2022 Annual Meeting of Stockholders.

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Dziewisz 57 Executive Vice President, General Counsel and Corporate Secretary

Joe Buckler 46 Senior Vice President, Clean Energy

Chris Riker 40 Senior Vice President, Thermal

Kenneth Young has served as our Chief Executive Officer since November 2018 and as the Chairman of our Board of Directors since September 2020.

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Dziewisz joined the Company in 1997.

Joe Buckler has served as our Senior Vice President, Clean Energy since August 2022 with responsibility for the Company's ClimateBright portfolio, B&W Renewable Service and B&W's environmental and emissions control solutions.

Prior to that, he served as Senior Vice President, Sales and Business Development with responsibility for growth of the Company's three business segments.

From July 2019 to January 2019, as Vice President, Service Products, Joe held responsibility for all technical and commercial aspects of the Company's Service business.

He first joined the Company in 2002 in the Engineering group after serving as Product Engineer for Sonoco Products Company.

Chris Riker has served as Senior Vice President, Thermal since August 2022 with responsibility for the Company's global thermal energy business.

He has also served as Senior Vice President, Global Parts and Service from 2018 to 2022, where he led the Company's worldwide parts and services business, and Vice President, Industrial Steam Generation from 2016 to 2018 where he had responsibility over the Company's package boiler, pulp and paper and petrochemical businesses.

Prior to that, he led the B&W's Finance organization for B&W's former Global Services segment after serving as Controller for Babcock & Wilcox's Diamond Power International, Inc.

Chris first joined Babcock & Wilcox in the role of Manager of Internal Audit in 2010 after serving as a consultant with KPMG, LLP.

Executive Compensation

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Number of securities remaining available for future issuance 2,642

The other information required by this item is incorporated by reference to the material appearing under the headings “Security Ownership of Directors and Executive Officers” and “Security Ownership of Certain Beneficial Owners” in the Proxy Statement for our 2022 Annual Meeting of Stockholders.

The other information required by this item is incorporated by reference to the material appearing under the heading “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement for our 2023 Annual Meeting of Stockholders.

Certain Relationships and Related Transactions, and Director Independence

Information required by this item is incorporated by reference to the material appearing under the headings “Corporate Governance – Director Independence” and “Certain Relationships and Related Transactions” in the Proxy Statement for our 2022 Annual Meeting of Stockholders.

Principal Accountant Fees and Services

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Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No.

Intellectual Property Agreement, dated as of May 29, 2015, between Babcock & Wilcox mPower, Inc.

Intellectual Property Agreement, dated as of May 29, 2015, between Babcock & Wilcox Power, Inc.

and Babcock & Wilcox Power Generation Group, Inc.

140 unchanged sentences

Amendment No.

2 to Amended and Restated Credit Agreement by and between Babcock and Wilcox Enterprises Inc.

2 to Amended and Restated Credit Agreement by and between Babcock & Wilcox Enterprises Inc.

and Bank of America, N.A., as Administrative Agent, dated February 8, 2021 (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc.

1 unchanged sentence

Amendment No.

3 to Amended and Restated Credit Agreement by and between Babcock and Wilcox Enterprises Inc.

3 to Amended and Restated Credit Agreement by and between Babcock & Wilcox Enterprises Inc.

and Bank of America, N.A., as Administrative Agent, dated March 4 2021 (incorporated by reference to Exhibit 10.68 of the Babcock & Wilcox Enterprises, Inc.

1 unchanged sentence

Amendment No.

4 to Amended and Restated Credit Agreement by and between Babcock and Wilcox Enterprises Inc.

4 to Amended and Restated Credit Agreement by and between Babcock & Wilcox Enterprises Inc.

and Bank of America, N.A., as Administrative Agent, dated March 26, 2021 (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc.

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Current Report on Form 8-K filed on July 7, 2021 (File No.

LIFO Preferability Letter

Amendment No.

1 to Revolving Credit, Guaranty and Security Agreement, dated as of August 8, 2022, by and among Babcock & Wilcox Enterprises, Inc.

and PNC Bank, National Association, as administrative agent, lender and swing loan lender, filed on Form 10-Q/A (File No.

Amendment No.

1 to Reimbursement, Guaranty and Security Agreement, dated as of August 8, 2022, by and among Babcock & Wilcox Enterprises, Inc.

and MSD PCOF Partners XLV, LLC, as administrative agent, filed on Form 10-Q/A (File No.

Amendment No.

2 to Reimbursement, Guaranty and Security Agreement, dated as of November 8, 2022, by and among Babcock & Wilcox Enterprises, Inc.

and MSD PCOF Partners XLV, LLC, as administrative agent, filed on Form 10-Q/A, filed herein.

Amendment No.

2 to Revolving Credit, Guaranty and Security Agreement, dated as of March 14, 2023, by and among Babcock & Wilcox Enterprises, Inc.

and PNC Bank, National Association, as administrative agent, lender and swing loan lender, filed herein.

Significant Subsidiaries of the Registrant.

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Balance at end of period $ 7,227 $ 6,534

* December 31, 2020 balance at beginning of period amount has been adjusted to reflect the change in inventory accounting method, as described in Notes 2 and 6 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Form 10-K Summary

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

What changed 10-K

Item 9A. Controls and Procedures