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Item 7. Management’s Discussion and Analysis

2026-03-16 compared with 2025-03-31 · 215 added, 283 removed, 159 unchanged (76% of the section changed)

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The following discussion includes a comparison of Results of Operations and Liquidity and Capital Resources for the years ended December 31, 2025 and 2024.

We have also included a comparison of the Results of Operations for the years ended December 31, 2023 and 2022 for all of our segment discussions below.

Unless otherwise noted, discussion of our business and results of operations in this Annual Report on Form 10-K refers to our continuing operations.

For additional comparison of the years ended December 31, 2023 and 2022, see Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as filed on March 15, 2024 and amended on March 26, 2024.

We have also included a comparison of the Results of Operations for the years ended December 31, 2024 and 2023.

Our consolidated financial statements are prepared in conformity with GAAP.

Our discussion of financial results include non-GAAP measures (e.g., foreign currency impact, EBITDA, Adjusted EBITDA) to provide additional information concerning our financial results that we believe is useful to the readers of our financial statements in the assessment of our performance and operating trends.

Unless otherwise noted, discussion of our business and results of operations refers to our continuing operations.

Unless otherwise noted, discussion of our business and results of operations in this Annual Report on Form 10-K refers to our continuing operations.

In the fourth quarter of 2025, we reassessed our segment structure as a result of the completion of our strategic shift to streamline and simplify our business.

This transformation included the divestiture of certain non-core assets, as described in Note 4 to the Consolidated Financial Statements.

As a result of this assessment, we have determined we have one reportable segment, labeled as B&W.

The revised segment presentation has been applied retrospectively to all periods presented.

For further information regarding our segment reporting, see Note 6 to the Consolidated Financial Statements.

BUSINESS OVERVIEW

We are a globally focused renewable, environmental and thermal technologies provider with over 155 years of experience providing diversified energy and emissions control solutions to a broad range of industrial, electrical utility, municipal and other customers.

Our innovative products and services are organized into three market-facing reporting segments.

For a description of our reportable segments see Item 1, Business of this Form 10-K.

Customer demand is heavily affected by the variations in our customers' business cycles, power demand in their operating territories, and by the overall economies and energy, environmental and noise abatement needs of the countries in which they

We have manufacturing facilities in Canada, Mexico, the United States and the United Kingdom.

We are a globally focused energy technologies provider with nearly 160 years of experience providing diversified energy and emissions control solutions to a broad range of industrial, electrical utility, municipal and other customers.

Our innovative products and services are organized in one reporting segment.

For a description of our reportable segment see Item 1, Business of this Form 10-K.

Customer demand is heavily affected by the variations in our customers' business cycles, power demand in their operating territories, and by the overall economies, energy, environmental and regulatory requirements of the countries in which they

We have manufacturing facilities in Canada, Mexico and the United States.

Many aspects of our operations and properties could be affected by political developments, environmental regulations and operating risks.

These and other factors may have a material impact on our international and domestic operations or our business as a whole.

Through our restructuring efforts, we continue to make significant progress to make our cost structure more variable and to reduce costs.

We expect our cost saving measures to continue to translate to bottom-line results, with top-line growth driven by opportunities for our core technologies and support services across the B&W Renewable, B&W Environmental and B&W

Thermal segments globally.

We continue to explore other cost saving initiatives to improve cash generation and evaluate additional non-core business and asset sales to continue to strengthen our liquidity.

These have been and may continue to be important factors that could cause our actual results to differ materially from those indicated in these statements.

Through our restructuring efforts, we have made and will continue working to make significant progress reducing costs and improving profitability.

We continue to explore other cost saving initiatives and in conjunction with top-line growth driven by opportunities for our core technologies, we will continue to improve cash generation and strengthen our liquidity.

These initiatives have been and may continue to be important factors that could cause our actual results to differ materially from those indicated in these financial statements.

If one or more events related to these or other risks or uncertainty materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate.

In addition, we continue to evaluate further dispositions, opportunities for additional cost savings and opportunities for subcontractor recoveries and other claims where appropriate and available.

If the value of our business was to decline, or if we were to determine that we were unable to recognize an amount in connection with any proposed disposition in excess of the carrying value of any disposed asset, we may be required to recognize impairments for one or more of our assets that may adversely impact our business, financial condition and results of operations.

Discontinued Operations

During the fourth quarter of 2024 , we committed to a plan to sell our Vølund business resulting in a significant change that would impact our business.

As of December 31, 2024 , we met all of the criteria for the assets and liabilities of this business, formerly part of our B&W Renewable segment, to be accounted for as held for sale.

For 2024 , annual revenue decreased to $34.5 million from $81.4 million in 2023 primarily as a result of several larger projects that had higher volume of work in 2023 than in 2024 .

The annual Operating loss for 2024 was $18.5 million , which is slightly higher than the Operating loss of $16.4 million for 2023 as a result of the aforementioned reduction of revenue due

to the lack of larger projects to replace the larger volume of work in 2023 .

For 2023 , annual revenue decreased from $98.5 million in 2022 as the aforementioned larger projects that were in process and had larger volume of work in 2022 than in 2023 .

This decrease in revenue is also the primary cause for the decrease in Operating Loss from $4.2 million in 2022 as well as increased expenses in the O&M contracts that have since been exited.

On October 31, 2025, we completed a sale of the net assets comprising our ASH business for $29 million, subject to customary fees and adjustments and recorded a gain of $21.5 million on the sale.

For more information on this sale, see Note 4 to the Consolidated Financial Statements.

The revenue and operating results presented for ASH for the year ended December 31, 2025 represent the financial results for January through October 2025 operations.

While there is a slight decline in revenue for 2025 compared to prior years, operating margins are consistent at approximately 28%.

Diamond Power

On July 31, 2025, we closed the sale of our Diamond Power business for a base purchase price of $177 million, subject to certain offsets and adjustments.

We recorded a gain of $53.2 million on the sale.

For more information on this sale, see Note 4 to the Consolidated Financial Statements.

The revenue and operating results presented for Diamond Power for the year ended December 31, 2025 represent the financial results for January through July 2025 operations.

Revenue and operating margins are lower in 2025 compared to 2024 and 2023 due to the sale closing in July 2025 and related transaction costs incurred.

On April 29, 2025, we sold our Vølund business for a base purchase price equal to $15.0 million plus $0.1 million (400,000 Danish krone).

We recorded a net loss of $36.8 million, which included a write off of CTA of $52.6 million.

For more information, see Note 4 to the Consolidated Financial Statements.

The revenue and operating results for the year ended December 31, 2025 primarily represent the financial results for January through April 2025 operations as well as the net loss on the sale primarily from the write off of CTA.

The decrease in revenue and operating margin is a result of the slowdown in sales and engagement of projects toward the end of 2024 and into 2025 as the Company engaged in the sale of the business.

During the third quarter of 2023, we committed to a plan to sell our B&W Solar business, resulting in a significant change that would impact our operations.

As of September 30, 2023, we met all of the criteria for the assets and liabilities of this business, formerly part of our B&W Renewable segment, to be accounted for as held for sale.

As of September 30, 2023, we met all of the criteria for the assets and liabilities of this business to be accounted for as held for sale.

In addition, we also determined that the operations of the B&W Solar business qualified as a discontinued operation, primarily based upon its significance to our current and historic operating losses.

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These charges have been included in Loss from discontinued operations, net of tax in the Consolidated Statements of Operations.

The impairment charges and additional contract losses during the year ended December 31, 2023 totaled $56.6 million and $44.1 million , respectively.

Certain circumstances beyond our control have extended the period required to complete the sale within one year.

Specifically, market conditions driven by uncertainties with potential administration changes and related impacts to the solar industry.

We initiated actions necessary to respond to the change in circumstances by engaging an advisory service provider with more specialized industry qualifications.

We continue to meet the criteria to account for the B&W Solar business as held for sale and discontinued operations as of December 31, 2024

For 2024, annual revenue increased to $68.4 million from $34.7 million in 2023 as a result of three large projects being executed in Pennsylvania.

Operating loss for 2024 improved to $20.8 million from $117.9 million in 2023 as a result of 2023 including asset impairments as a result of being classified as available for sale and several loss-making contracts occurring in 2023 as well as 2024 including a $6.8 million gain due to an insurance claim settlement.

Revenue for 2023 decreased from $41.9 million in 2022 as a result of lower volume in regard to projects in New York.

Operating Loss for 2023 increased from the Operating loss in 2022 of $6.5 million as a result of the impairments and loss-making contracts occurring in 2023 as well as 2022 including a $9.6 million gain due on the change in fair value of the contingent consideration from the acquisition.

The decrease in revenue and operating margin is a result of the focus on the sale of the business in 2024 and 2025.

During the fourth quarter of 2025, we discontinued marketing B&W Solar for sale due to lack of potential buyers and terminated our broker arrangement with a third party provider.

As of December 31, 2025, B&W Solar was disposed of through abandonment, as we ceased all business operations and either transferred or wrote off its remaining assets.

As a result, the B&W Solar business no longer meets the criteria of held for sale as of December 31, 2025, but continues to meet the criteria for discontinued operations for all periods presented.

BWRS, SPIG and GMAB

In addition to the B&W Solar and Vølund businesses, discontinued operations include the following subsidiaries divested in 2024:

In addition to the ASH, Diamond Power, V ø lund and B&W Solar businesses, discontinued operations include the following subsidiaries divested in 2024:

BWRS, SPIG, and GMAB.

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Results of operations and cash flows for these businesses and the financial position of the divested subsidiaries are reported as discontinued operations for all periods presented and the notes to the financial statements have been adjusted on a retrospective basis.

On June 28, 2024, we, through our B&W PGG Luxembourg Finance Sárl subsidiary, entered into an agreement to sell the entire issued and outstanding share capital of our Denmark-based renewable parts and services subsidiary, BWRS, to Hitachi Zosen Inova AG ("Buyer").

The sale of BWRS to the Buyer was completed the same day.

We received net cash proceeds of $83.5 million and recorded a gain on the sale of the business of $44.9 million.

The proceeds were used to reduce outstanding debt and support working capital needs.

SPIG and GMAB

On October 8, 2024, we, through our B&W PGG Luxembourg Finance Sárl subsidiary and Babcock & Wilcox A/S subsidiary, entered into an agreement to sell the entire issued and outstanding share capital of our Italy-based SPIG and Sweden-based GMAB subsidiaries, to Auctus Neptune Holding S.p.A, which closed on October 30, 2024.

We received net cash proceeds of $33.7 million and recorded an impairment of $5.8 million.

The proceeds were used to support working capital needs and reduce outstanding debt.

We recorded a gain of $14.1 million on this divestiture.

For more information, see Note 4 to the Consolidated Financial Statements.

RESULTS OF OPERATIONS–YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023

Components of Our Results of Operations

Our revenue is the total amount of income generated by our business and consists primarily of income from our renewable, environmental and thermal technology solutions and services we provide to a broad range of industrial, electric utility and other customers.

Revenue from our operations is assessed based on our three market-facing segments.

B&W Renewable, B&W Environmental and B&W Thermal.

Operating income (loss)

Operating income (loss) consists primarily of our revenue minus costs and expenses, including cost of operations, SG&A and advisory fees and settlement costs.

Net loss consists primarily of operating income minus other income and expenses, including interest expense, foreign exchange, expense related to our benefit plans, and provision for income taxes.

Consolidated Results of Operations

The following discussion of our consolidated and business segment results of operations includes a discussion of Adjusted EBITDA , which is a non-GAAP financial measure.

Adjusted EBITDA differs from net (loss) income, the most directly comparable measure calculated in accordance with GAAP.

Management believes that this financial measure is useful to investors because it excludes certain expenses, allowing investors to more easily compare our operating performance period to period.

A reconciliation of net (loss) income to Adjusted EBITDA is included in "Non-GAAP Financial Measures" below.

The following discussion is of our consolidated results of operations below.

Year ended December 31,

(in thousands) 2024 2023 2022

B&W Renewable segment $ 110,134 $ 140,835 $ 122,765

B&W Environmental segment 109,390 108,655 81,822

B&W Thermal segment 497,879 499,216 415,104

Eliminations (70) (21,391) (10,254)

Total Revenue $ 717,333 $ 727,315 $ 609,437

(in thousands) 2025 2024 $ Change

Revenues $ 587,676 $ 581,039 $ 6,637

Costs and expenses:

Cost of operations 443,825 454,326 (10,501)

Selling, general and administrative expenses 119,481 124,541 (5,060)

Research and development costs

1,457 5,133 (3,676)

Impairment of long-lived assets 950 3,729 (2,779)

Loss (gain) on asset disposals, net

1,226 (354) 1,580

Operating income (loss)

20,737 (6,336) 27,073

Loss from continuing operations

$ (32,848) $ (104,272) $ 71,424

2025 vs 2024 Consolidated Results

Revenues decreased by $10.0 million to $717.3 million in 2024 as compared to $727.3 million in 2023, driven by a decline in our B&W Renewable segment related to lower pulp and paper projects and lower volume on a European renewable job in 2024 .

Operating income increased $8.5 million from $16.6 million in 2023 to $25.1 million in 2024, primarily due to higher volume related to a natural gas conversion project, environmental projects as well as lower expenses, partially offset by a decrease of $11.7 million due to a large project in our U.S.

construction business that was completed in 2023 and not fully replaced in 2024 in our B&W Thermal segment.

Net loss from continuing operations decreased by $2.8 million to $73.0 million in 2024 from $75.8 million in 2023, driven by increased operating income (as discussed in the paragraph above) and offset by a loss on debt extinguishment of $7.3 million attributable to terminating the Revolving and Letter of Credit Agreements with PNC and MSD.

Revenues increased by $6.6 million to $587.7 million in 2025 compared to $581.0 million 2024.

The increase is driven by larger parts volume of $35.2 million and two natural gas conversion projects of $25.7 million offset partially by lower volume related to ESP projects of $20.0 million, construction projects of $18.7 million and package boilers of $10.7 million.

Costs of operations decreased by $10.5 million to $443.8 million in 2025 compared to $454.3 million in 2024.

The decrease is primarily driven by a shift in business mix, as higher‑margin parts sales increased, revenue from larger projects declined and the remaining large projects required lower costs to complete.

SG&A expenses decreased by $5.1 million to $119.5 million in 2025 compared to $124.5 million in 2024.

The decrease is primarily related to cost savings, partially offset by increased expenses in employee benefits in the current year.

Research and development costs decreased by $3.7 million to $1.5 million in 2025 compared to $5.1 million in 2024.

The decrease is primarily driven by less development activity due to the increased commercialization of our BrightLoop ™ technology.

Impairment of long-lived assets decreased by $2.8 million to $1.0 million in 2025 compared to $3.7 million 2024.

The decrease is driven by the construction in process facility that was impaired in 2024, partially offset by impairment recognized in the current year relating to a reduction in our real estate footprint.

Loss (gain) on asset disposals increased in 2025 compared to 2024 relating to the write-off of equipment in one of our manufacturing locations which was disposed of in 2025 compared to 2024 which had minor disposals.

Operating income increased by $27.1 million to $20.7 million in 2025 compared to an operating loss of $6.3 million in 2024, primarily due to the revenue as described above and an increase in gross profit due to the improvement in cost of operations in product mix.

Loss from continuing operations decreased by $71.4 million to $32.8 million in 2025 compared to $104.3 million in 2024, primarily due to the revenue as described above and an increase in gross profit due to the improvement in cost of operations in product mix, reduction in benefit plan expense for the year due to better asset performance in 2025 than anticipated and reduced interest expense due to the debt repayments and refinancing during the year.

Year ended December 31,

(in thousands) 2024 2023 $ Change

Revenues $ 581,039 $ 587,448 $ (6,409)

Costs and expenses:

Cost of operations 454,326 465,977 (11,651)

Selling, general and administrative expenses 124,541 134,940 (10,399)

Research and development costs

5,133 6,462 (1,329)

Impairment of long-lived assets 3,729 — 3,729

(Gain) loss on asset disposals, net

(354) 134 (488)

Operating loss

(6,336) (20,065) 13,729

Loss from continuing operations

$ (104,272) $ (109,212) $ 4,940

2024 vs 2023 Consolidated Results

Revenues increased by $117.9 million to $727.3 million in 2023 as compared to $609.4 million in 2022, primarily attributable to increased revenue of $79.4 million in our global parts and services business across all segments and $55.0 million due to a large new construction project in 2023, partially offset by a slight decline in service projects.

Operating income increased $17.8 million from $(1.2) million in 2022 to $16.6 million in 2023, primarily due to increased gross margin from higher revenues.

Net loss from continuing operations increased by $61.6 million to $75.8 million in 2023 from $14.2 million in 2022, primarily attributable to a $75.0 million swing in benefit plans cost from a $37.5 million benefit in 2022 to a $37.5 million expense in 2023, offset slightly by the increased operating income described above.

Revenues decreased by $6.4 million to $581.0 million in 2024 compared to $587.4 million in 2023.

The decrease is primarily driven by a $27.1 million decrease in the U.S.

construction business as a result of a large construction project finishing in 2023 that was not fully replicated in 2024, offset partially by a large natural gas project of $16.7 million starting execution in 2024.

Costs of operations decreased by $11.7 million to $454.3 million in 2024 compared to $466.0 million in 2023.

The decrease is driven primarily by lower revenue as described above, as well as a shift in business mix and cost reductions.

SG&A expenses decreased by $10.4 million to $124.5 million in 2024 compared to $134.9 million in 2023.

The decrease is primarily driven by continued efforts to reduce overhead.

Research and development costs decreased by $1.3 million to $5.1 million in 2024 compared to $6.5 million in 2023.

The decrease is primarily driven by by less development activity due to the increased commercialization of our BrightLoop ™ technology.

Impairment of long-lived assets increased by $3.7 million to $3.7 million in 2024.

The increase relates to a construction in process facility that was impaired.

(Gain) loss on asset disposals, net decreased in 2024 compared to 2023 relating to minor disposals in 2024.

Operating loss decreased by $13.7 million to $6.3 million in 2024 compared to $20.1 million in 2023, primarily due to higher volume related to a natural gas conversion project, environmental projects as well as lower expenses, partially offset by a decrease of $11.7 million due to a large project in our U.S.

construction business that was completed in 2023 and not fully replaced in 2024.

Loss from continuing operations decreased by $4.9 million to $104.3 million in 2024 compared to $109.2 million in 2023, driven by decreased operating loss (as discussed in the paragraph above) and partially offset by a loss on debt extinguishment of $7.3 million attributable to terminating the Revolving and Letter of Credit Agreements with PNC and MSD.

Other Expenses Impacting Operating Results

Interest Expense

Interest expense in the Consolidated Financial Statements consisted of the following components:

Year ended December 31,

(in thousands) 2025 2024 2023

Components associated with borrowings from:

Senior Notes due 2026

$ 16,961 $ 25,512 $ 25,601

Senior Notes due 2030

Revolving Credit Agreement 2,961 4,892 1,494

26,651 30,404 27,095

Components associated with amortization or accretion of:

Revolving Credit Agreement 4,585 6,149 4,643

Senior Notes due 2026

2,035 2,606 2,525

Senior Notes due 2030

3,545 8,755 7,168

Components associated with interest from:

Lease liabilities 2,427 2,037 2,813

Letter of Credit interest and fees

4,498 3,942 3,519

Other interest expense 1,018 1,007 1,966

Capitalized interest

7,336 6,986 8,298

Total interest expense $ 37,532 $ 46,145 $ 42,561

The decrease in interest expense in 2025 compared to 2024 is driven by decreased borrowings on our revolving credit facility, the full redemption of our 8.125% Senior Notes, and efforts to reduce the outstanding balance on our 6.50% Senior Notes.

Also contributing to the decrease is the realization of a portion of the deferred gain from our senior note exchange transaction.

For further information r efer to Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

The increase in interest expense in 2024 compared to 2023 is driven by increased borrowings on our revolving credit facility.

Year ended December 31,

(in thousands, except for percentages) 2025 2024 2023

Loss from continuing operations before income tax expense $ (24,568) $ (91,471) $ (103,608)

Income tax expense 8,280 12,801 5,604

Effective tax rate (34) % (14) % (5) %

Our effective tax rate reflects a valuation allowance against deferred tax assets in jurisdictions other than Mexico, Canada, Brazil, Thailand, the Philippines, Indonesia, and the United Kingdom.

The change in our income tax rate in 2025 compared to 2024 is primarily attributable to non-deductible items related to the dissolution and divestiture of certain entities, an increase in our valuation allowance and the difference between statutory and foreign jurisdictions.

The change in our income tax rate in 2024 compared to 2023 is primarily attributable to an increase in valuation allowances, a change in the Company's permanent investment assertion and an unfavorable resolution of a foreign income tax matter.

Bookings and Backlog

Bookings and backlog are our measures of remaining performance obligations under our sales contracts.

Management believes these metrics provide investors, lenders and other users of our financial statements with a leading indicator of future revenues.

We believe these metrics provide investors, lenders and other users of our financial statements with a leading indicator of future revenues.

It is possible that our methodology for determining bookings and backlog may not be comparable to methods used by other companies.

We generally include expected revenue from contracts in our backlog when we receive written confirmation from our customers authorizing the performance of work and committing the customers to payment for work performed.

Backlog may not be indicative of future operating results, and contracts in our backlog may be canceled, modified or otherwise altered by customers.

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Because we operate globally, our backlog is also affected by changes in foreign currencies each period.

Bookings represent changes to the backlog.

Bookings include additions related to new business or increases in project scope, subtractions due to customer cancellations or reductions in project scope, changes in estimates that affect selling price and revaluation of backlog denominated in foreign currency.

We believe comparing bookings on a quarterly basis or for periods less than one year is less meaningful than for longer periods, and that shorter-term changes in bookings may not necessarily indicate a material trend.

Total bookings as of December 31, 2024 and 2023 was as follows:

Total bookings as of December 31, 2025 and 2024 were as follows:

Year ended December 31,

(in millions) 2025 2024

B&W Renewable $ 108.1 $ 130.1

B&W Environmental 65.2 108.3

B&W Thermal 716.6 409.9

Other/eliminations (0.3) (9.6)

Total bookings $ 889.6 $ 638.7

$ 549.6 $ 751.4

Our backlog as of December 31, 2025 and 2024 was as follows:

(in millions) 2025 2024

B&W Renewable $ 53.6 $ 62.7

B&W Environmental 42.1 87.8

B&W Thermal 437.2 210.6

Other/eliminations 7.2 7.1

Backlog $ 540.1 $ 368.2

$ 423.6 $ 495.2

Of the backlog as of December 31, 2025, we expect to recognize revenues as follows:

(In millions) 2025 2026 Thereafter Total

B&W Renewable $ 32.6 $ 19.8 $ 1.2 $ 53.6

B&W Environmental 25.6 15.6 0.9 42.1

B&W Thermal 287.8 140.7 8.7 437.2

Other/eliminations 7.2 — — 7.2

Expected revenue from backlog $ 353.2 $ 176.1 $ 10.8 $ 540.1

(in millions)

2026 2027 Thereafter Total

$ 380.7 $ 38.2 $ 4.7 $ 423.6

Effective February 26, 2026, we entered into an agreement with Base Electron, an IPP backed by Applied Digital, to complete the design and installation of four 300-megawatt natural gas-fired power plants.

With this project, our backlog would be $2.8 billion in total as the related work scope is authorized and written commitments are received from the customer.

For further information refer to Note 24 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Non-GAAP Financial Measures

We use non-GAAP financial measures internally to evaluate our performance and make financial and operational decisions.

In addition to Loss from continuing operations, we use non-GAAP financial measures internally to evaluate our performance and make financial and operational decisions.

When viewed in conjunction with GAAP results and the accompanying reconciliations, we believe that the presentation of these measures provides investors with greater transparency and a greater understanding of factors affecting our financial position and results of operations than GAAP measures alone.

The presentation of non-GAAP financial measures should not be considered in isolation or as a substitute for the related financial results prepared in accordance with GAAP.

The following discussion of our business segment results of operations includes a discussion of Adjusted EBITDA.

Adjusted EBITDA differs from the most directly comparable measure calculated in accordance with GAAP.

A reconciliation of net loss, the most directly comparable GAAP measure, to Adjusted EBITDA is included below.

The following discussion of our business segment results of operations includes a discussion of EBITDA and Adjusted EBITDA.

EBITDA focuses on the earnings generated from core business operations, without considering the effects of

financing, accounting decisions or tax.

EBITDA and Adjusted EBITDA differ from the most directly comparable measure calculated in accordance with GAAP.

A reconciliation of Loss from continuing operations, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA is included below.

Management believes that this financial measure is useful to investors because it excludes certain expenses, allowing investors to more easily compare our financial performance period to period.

When viewed in conjunction with GAAP results and the accompanying reconciliation in Note 5 to the Consolidated Financial Statements, we believe the presentation of Adjusted EBITDA provides investors with greater transparency and a greater understanding of factors affecting our financial position and results of operations than GAAP measures alone.

Adjusted EBITDA on a consolidated basis is defined as the sum of the Adjusted EBITDA for each of the segments, further adjusted for corporate allocations and research and development costs.

At a segment level, the Adjusted EBITDA presented in this report is consistent with the manner in which our CODM primarily reviews the results of operations and makes strategic decisions about the business.

Our CODM is the chief executive officer and on a quarterly basis reviews actuals to budgets and forecasts when making decisions.

Adjusted EBITDA is calculated as earnings before interest, tax, depreciation and amortization adjusted for items such as gains or losses arising from the sale of non-income producing assets, net pension benefits, restructuring activities, impairments, gains and losses on debt extinguishment, legal and settlement costs, costs related to financial consulting, research and development costs, and other costs that may not be directly controllable by segment management and are not allocated to the segment.

We present consolidated Adjusted EBITDA because we believe it is useful to investors to help facilitate comparisons of the ongoing, operating performance before corporate overhead and other expenses not attributable to the operating performance of our revenue generating segments.

When viewed in conjunction with GAAP results, we believe the presentation of EBITDA and Adjusted EBITDA provides investors with greater transparency and a greater understanding of factors affecting our financial position and results of operations than GAAP measures alone.

Adjusted EBITDA is calculated as earnings before interest, tax, depreciation and amortization, and adjusted for items such as gains or losses arising from the sale of non-income producing assets, net pension benefits, stock compensation, restructuring activities, impairments, gains and losses on debt extinguishment, legal and settlement costs and costs related to financial consulting.

Additionally, the Company redefined its definition of Adjusted EBITDA to eliminate the effects of certain items including interest on letters of credit included in Cost of operations and product development costs.

Prior period results have been revised to conform with the revised definition and present separate reconciling items in our reconciliation.

Year ended December 31,

(in thousands) 2025 2024 2023

$ (59,779) $ (196,971) $ (26,584)

Income (loss) from discontinued operations, net of tax

13,183 (121,177) (12,398)

Loss from continuing operations

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Income tax expense

8,280 12,801 5,604

Depreciation & amortization 9,677 10,075 13,881

EBITDA 21,155 (35,901) (48,073)

Impairment of goodwill and long-lived assets 3,729 — —

Impairment of long-lived assets

Benefit plans, net 9,782 31,230 38,406

(Gain) loss on asset sales, net

Loss (gain) on asset disposals, net

1,226 (354) 134

Stock compensation 2,551 4,509 7,121

Restructuring activities and business services transition costs 1,296 2,619 5,981

Advisory fees for settlement costs and liquidity planning 1,234 1,107 1,509

Loss on debt extinguishment

Settlement and related legal costs (recoveries)

Restructuring activities

685 1,296 2,619

Acquisition pursuit and related costs 643 827 5,504

Product development (1)

Gain (loss) on debt extinguishment

(1,836) 7,267 —

Settlements and related legal costs

129 4,044 (1,474)

Foreign exchange (135) (237) 2,327

Financial advisory services 8,004 1,877 1,934

Letter of credit fees 7,036 7,702 5,204

Other - net 1,229 3,707 2,436

Adjusted EBITDA $ 43,740 $ 21,167 $ 5,430

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

Year ended December 31,

(in thousands) 2024 2023 2022

Adjusted EBITDA (1)

B&W Renewable segment $ 15,085 $ 6,381 $ 11,768

B&W Environmental segment 10,794 4,133 1,641

B&W Thermal segment 61,370 64,775 56,708

Corporate (18,354) (14,484) (14,550)

Total Adjusted EBITDA $ 68,895 $ 60,805 $ 55,567

(1) See table above for reconciliation of Net loss to Adjusted EBITDA.

Corporate costs in Adjusted EBITDA include SG&A expenses that are not allocated to the reportable segments.

These costs include, among others, certain executive, compliance, strategic, reporting and legal expenses associated with governance of the total organization and being an SEC registrant, and research and development activity costs.

Impairment of goodwill and long-lived assets

Impairment of long-lived assets relate to certain assets under construction due to changes in project status.

Impairment of long-lived assets

Impairment of long-lived assets refers to when the carrying amount of an asset exceeds the fair value or recoverable amount.

Benefit plans, net

We recognize benefits from our defined benefit and other postretirement benefit plans based on actuarial calculations primarily because our expected return on assets is greater than our service cost.

Service cost is low because our plan benefits are frozen except for a small number of hourly participants.

Service cost is low because our plan benefits are frozen.

Our pension costs include MTM adjustments and are primarily a result of changes in the discount rate, curtailments and settlements.

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Refer to Note 14 to the Consolidated Financial Statements for further information regarding our pension and other postretirement plans.

(Gain) loss on asset sales, net

Loss (gain) on asset disposals, net

We, at times, will sell or dispose of certain assets that are unrelated to our current or future operations.

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Therefore, we believe it is useful to exclude stock-based compensation from our non-GAAP financial measures in order to highlight the performance of the business and to be consistent with the way many investors evaluate our performance and compare our operating results to peer companies.

Expenses related to restricted stock units are recognized on a straight-line basis over a 3-year vesting period, except for market-based restricted stock units which are recognized over a derived service period.

Restructuring activities and business services transition costs

Restructuring activities

Restructuring activities and business services transition actions across our business units and corporate functions primarily consist of severance and related costs associated with non-recurring actions taken to transform our operations with impacts on employees and facilities used in our businesses.

Business services transition costs relate to new technology implementation, expected to provide future benefit and are included in Selling, general and administrative expenses in the Consolidated Statement of Operations.

Advisory fees for settlement costs and liquidity planning

Advisory fees fluctuate based on use of external consultants.

Loss on debt extinguishment

Business services transition costs relate to new technology implementation, expected to provide future benefit and are included in Cost of operations and SG&A expenses in the Consolidated Statement of Operations.

Gain (loss) on debt extinguishment

Losses on debt extinguishment were due to the write-off of deferred financing fees and certain other exit costs associated with our extinguishment of the Debt Facilities.

Settlement and related legal costs (recoveries)

Settlements and related legal costs (recoveries)

Settlements and related legal costs (recoveries) relate to expenses associated with resolving legal disputes, whether through negotiated settlements or court judgments.

For further discussion see Note 20 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Acquisition pursuit and related costs

Acquisition pursuit and related costs fluctuate based on activity.

Product development

Our product development activities include expenses that relate to sales, marketing, and other business development expenses for our products and services still under development and not yet widely available and are primarily from the timing of specific research and increased development efforts and activities related to our BrightLoop ™ commercialization efforts and to further develop our ClimateBright ™ portfolio.

Management excludes these expenses from Adjusted EBITDA as they often may not correlate to revenue or other operations occurring in the current period.

Foreign exchange

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dollars at current exchange rates, and we translate items in our Consolidated Statement of Operations at average exchange rates for the periods presented.

We record adjustments resulting from the translation of foreign currency amounts as a component of Accumulated Other Comprehensive Loss.

We report foreign currency transaction gains (losses) in income in the Consolidated Statements of Operations.

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Foreign exchange gains and losses are primarily related to unhedged intercompany loans denominated in European currencies to fund foreign operations.

Letter of credit fees

Letter of credit fees are routinely incurred in the course of executing customer contracts.

A portion of the fees are included in the contract prices with our customers.

Certain letter of credit amounts represent performance guarantees akin to insurance that are not passed along to our customers and are excluded from Adjusted EBITDA as they do not reflect the performance of the business.

Letter of credit fees are not passed along to customers and included in Cost of operations.

B&W Renewable Segment Results

Year ended December 31,

(in thousands) 2024 2023 $ Change

Revenues $ 110,134 $ 140,835 $ (30,701)

Adjusted EBITDA $ 15,085 $ 6,381 $ 8,704

2024 vs 2023 results

Revenues in the B&W Renewable segment decreased $30.7 million, to $110.1 million in 2024 compared to $140.8 million in 2023.

This is primarily attributable to lower volume in 2024 of a certain European project compared to 2023, as well as a few pulp and paper projects that finished in 2023 that were not fully replaced in 2024.

Adjusted EBITDA in the B&W Renewable segment increased $8.7 million, to $15.1 million in 2024 compared to $6.4 million in 2023.

This is primarily attributable to lower SG&A expenses due to lower allocation of costs associated with a lower percentage of revenue than in 2023, partially offset by the lower volume mentioned above.

Year ended December 31,

(in thousands) 2023 2022 $ Change

Revenues $ 140,835 $ 122,765 $ 18,070

Adjusted EBITDA $ 6,381 $ 11,768 $ (5,387)

2023 vs 2022 results

Revenues in the B&W Renewable segment increased $18.1 million, to $140.8 million in 2023 compared to $122.8 million in 2022.

This is primarily attributable to increased revenue of $22.9 million related to a European Renewable project that began in 2023.

Adjusted EBITDA in the B&W Renewable segment decreased $5.4 million, to $6.4 million in 2023 compared to $11.8 million in 2022.

This is primarily attributable to a $6.2 million gain on sale related to the development rights of a future renewable energy project that was sold in 2022, partially offset by the increased revenue in 2023.

B&W Environmental Segment Results

Year ended December 31,

(in thousands) 2024 2023 $ Change

Revenues $ 109,390 $ 108,655 $ 735

Adjusted EBITDA $ 10,794 $ 4,133 $ 6,661

2024 vs 2023 results

Revenues in the B&W Environmental segment was flat in 2024 compared to 2023.

Adjusted EBITDA in the B&W Environmental segment wa s $10.8 million at December 31, 2024 compared to $4.1 million in 2023.

The increase is attributable to the growth in our industrial electrostatic precipitator business which have higher margins.

Year ended December 31,

(in thousands) 2023 2022 $ Change

Revenues $ 108,655 $ 81,822 $ 26,833

Adjusted EBITDA $ 4,133 $ 1,641 $ 2,492

2023 vs 2022 results

Revenues in the B&W Environmental segment increased $26.8 million to $108.7 million in 2023 compared to $81.8 million in 2022.

The increase primarily relates to the increase in revenue in our ash handling business.

Adjusted EBITDA in the B&W Environmental segment was $4.1 million at December 31, 2023 compared to $1.6 million at 2022.

The increase is primarily driven by the increased revenue described above.

B&W Thermal Segment Results

Year ended December 31,

(in thousands) 2024 2023 $ Change

Revenues $ 497,879 $ 499,216 $ (1,337)

Adjusted EBITDA $ 61,370 $ 64,775 $ (3,405)

2024 vs 2023 results

Revenues in the B&W Thermal segment decreased $1.3 million , to $497.9 million in the year ended December 31, 2024 compared to $499.2 million generated in 2023 .

The decrease is primarily driven by a $27.1 million decrease in the U.S.

Adjusted EBITDA in the B&W Thermal segment decreased $3.4 million to $61.4 million in 2024 compared to $64.8 million in 2023.

The decrease is primarily due to lower revenue in the U.S.

construction business, partially offset by a large natural gas project.

Year ended December 31,

(in thousands) 2023 2022 $ Change

Revenues $ 499,216 $ 415,104 $ 84,112

Adjusted EBITDA $ 64,775 $ 56,708 $ 8,067

2023 vs 2022 results

Revenues in the B&W Thermal segment increased $84.1 million, to $499.2 million in the year ended December 31, 2023 compared to $415.1 million generated in 2022.

The increase is driven by $55.0 million in revenue from a large new construction project and increased revenue of $49.9 million in our parts business, partially offset by a decline in service projects of $13.4 million due to a project being completed in 2022.

Adjusted EBITDA in the B&W Thermal segment increased $8.1 million to $64.8 million in 2023 compared to $56.7 million in 2022.

The increase is the result of the large new construction project and increased volume in our parts business described above.

Other Expenses Impacting Operating Results

Interest Expense

Interest expense in our Consolidated Financial Statements consisted of the following components:

Year ended December 31,

(in thousands) 2024 2023 2022

Components associated with borrowings from:

Senior notes $ 25,512 $ 25,601 $ 24,962

Credit Facility 4,892 1,494 —

30,404 27,095 24,962

Components associated with amortization or accretion of:

Revolving Credit Agreement 6,149 4,643 4,400

Senior notes 2,606 2,525 2,612

8,755 7,168 7,012

Components associated with interest from:

Lease liabilities 2,037 2,813 2,372

Letter of Credit fees and interest 3,942 3,519 3,910

Other interest expense 1,008 1,976 1,541

6,987 8,308 7,823

Total interest expense $ 46,146 $ 42,571 $ 39,797

The increase in interest expense is driven by increased borrowings in 2024 when compared to 2023.

The increase in interest expense in 2023, when compared to 2022 is driven by higher utilization of the revolver as well as increased other interest expense.

Year ended December 31,

(in thousands, except for percentages) 2024 2023 2022

Loss from continuing operations before income tax expense $ (60,790) $ (65,976) $ (5,115)

Income tax expense $ 12,172 $ 9,818 $ 9,071

Effective tax rate (20) % (15) % (177) %

Our effective tax rate reflects a valuation allowance against deferred tax assets in jurisdictions other than Mexico, Canada, Brazil, Finland, Germany, Thailand, the Philippines, Indonesia, the United Kingdom, and Sweden.

The change in our income tax expense in 2024 compared to 2023 is primarily attributable to an increase in valuation allowances, a change in the Company's permanent investment assertion and an unfavorable resolution of a foreign income tax matter.

Financial advisory services

Financial advisory services relate to business planning and other professional services.

LIQUIDITY AND CAPITAL RESOURCES

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We fund our liquidity requirements primarily through cash generated from operations, external sources of financing, including our Credit Agreement, senior notes, and equity offerings, and our Preferred Stock, each of which are described below and in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report in further detail.

In 2024, we entered into the Sales Agreement with the Agents, in connection with the offer and sale from time to time of shares of our common stock, having an aggregate offering price of up to $50.0 million, through the Agents.

As of December 31, 2024, 5.0 million shares have been sold pursuant to the Sales Agreement.

Refer to Note 16 to the Consolidated Financial Statements for additional discussion of the Sales Agreement.

The Company has a credit agreement that provides for an up to $150.0 million asset-based credit facility with an outstanding balance of $124.4 million at December 31, 2024 that is currently due in November 2025 and, accordingly, is classified as a current liability.

In addition, the Company has senior notes with an aggregate principal amount of $193 million at December 31, 2024 for which the maturity date is within twelve months following the issuance of these financial statements.

As a result of the uncertainty regarding our current demonstrated ability to repay the current debt, this condition raises substantial doubt about the Company’s ability to continue as a going concern.

In response to the conditions that raised substantial doubt and to partially address our liquidity needs, during the year ended December 31, 2024, we took the following actions, among others:

• sold our BWRS business for net proceeds of $83.5 million on June 28, 2024 (described in Note 4 to the Consolidated Financial Statements);

• sold our SPIG and GMAB businesses for net proceeds of $33.7 million on October 30, 2024 (described in Note 4 to the Consolidated Financial Statements);

• sold 5.0 million common shares pursuant to our At-The-Market Offering (described in Note 16 to the Consolidated Financial Statements) for net proceeds of $7.9 million;

• successfully recovered $14.0 million of losses related to Solar;

• applied for and was granted a waiver of the required minimum contributions to the U.S.

Plan by the PBGC, which reduced cash funding requirements in 2024 by $15.0 million and will increase contributions annually over the subsequent 5-year period (described in Note 14 to the Consolidated Financial Statements).

In response to the conditions, we are currently evaluating different strategies to obtain the required funding for future debt maturities and operations.

We have taken or plan to take all or some combination of the following actions, and continue to evaluate other actions:

• actively negotiating with our current lender under the Credit Facility to extend the maturity date of the Credit Facility to at least September 30, 2026;

• actively negotiating with several holders of the Senior Notes to extend their maturity date out for five years;

• actively negotiating with parties to obtain a new junior credit arrangement to satisfy any Senior Notes that are not extended and to fund future operations;

• actively in discussions with certain parties to further divest non-core assets.

There is no assurance that we will successfully obtain the financing necessary to satisfy our current obligations when they come due.

In addition, we may take one or more of the following actions to obtain the required funding for future operations:

• Suspension of dividends on our Preferred Stock;

• Consideration of selling additional common shares.

Management believes it is taking all prudent actions to address its liquidity concerns, however, these plans have not been finalized, and are subject to market conditions that are not within the Company's control, therefore we have determined that there is substantial doubt about our ability to continue as a going concern for the twelve months following the issuance of these financial statements.

believe that our current operating plan and borrowings available under our Credit Agreement will be sufficient to satisfy our foreseeable liquidity needs and capital expenditure requirements, including for at least the next twelve months.

We may elect to raise additional capital through the sale of additional equity or debt financing to fund business activities such as strategic acquisitions, capital expenditures, working capital needs or other purposes beyond the next twelve months.

Additional financing may not be available on terms favorable to the Company or at all, and may also be impacted by any disruptions in the financial markets.

In addition, the Company's existing indebtedness could limit its ability to obtain additional financing.

Cash and Cash Flows

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We have no plans to repatriate these funds to the U.S.

In addition, we had $89.3 million of restricted cash as of December 31, 2024 related to collateral for certain letters of credit as part of funding for several ongoing projects.

Cash flows used in operating activities was $118.7 million in the year ended December 31, 2024, which is primarily attributable to the current year net loss, including discontinued operations, of $59.8 million, gain on the sale of businesses of $58.9 million, and uses from operations, partially offset by $79.1 million in non-cash expense arising from adjustments to prior service pensions, depreciation and amortization, impairment on long-lived assets, amortization of deferred financing costs and debt discount, operating lease expenses and stock-based compensation expenses.

Cash flows used in operating activities was $42.3 million in the year ended December 31, 2023, which is primarily attributable to the current year net loss, including discontinued operations, of $197.0 million, partially offset by $137.7 million in non-cash expense arising from goodwill impairment, adjustments to prior service pensions, depreciation and amortization, amortization of deferred financing costs and debt discount, operating lease expenses and stock-based compensation expenses.

Cash flows provided by investing activities totaled $110.0 million in the year ended December 31, 2024, primarily due to proceeds from the sale of businesses and assets of $120.9 million, partially offset by $11.2 million of capital expenditures.

Cash flows used in investing activities totaled $7.9 million in the year ended December 31, 2023, primarily due to $9.8 million of capital expenditures, partially offset by net proceeds from transactions in available-for-sale securities of $2.0 million.

Cash flows provided by financing activities was $69.7 million during the year ended December 31, 2024, primarily related to net borrowings of $93.7 million, partially offset by payments of preferred stock dividends of $18.6 million and debt issuance costs of $8.5 million.

Cash flows provided by financing activities of $8.6 million during the year ended December 31, 2023, primarily related to net borrowings of $25.9 million, partially offset by payments of preferred stock dividends of $11.1 million and payment of holdback funds related to an acquisition of $2.8 million.

We had $66.8 million of restricted cash as of December 31, 2025 related to collateral for certain letters of credit as part of funding for several ongoing projects.

Cash flows used in operating activities was $68.9 million in the year ended December 31, 2025, which is primarily attributable to the current year net loss, including discontinued operations, of $36.2 million and non-cash adjustments arising from gain on sale of business of $38.9 million, partially offset by the impairment of long-lived assets of $9.9 million and depreciation and amortization of long-lived assets of $10.1 million.

Cash flows used in operating activities also included movements in certain operating assets and liabilities such as advanced billings on contracts of $50.7 million and contracts in progress of $19.7 million, which are primarily impacted by timing differences related to progress made on ongoing projects, billings, and collections, and may fluctuate significantly period to period.

These were partially offset by operating cash flow decreases from accounts payable of $57.9 million, pension liabilities, accrued postretirement benefits and employee benefits of $10.6 million and accounts receivable - trade, net of $16.5 million, which are result of timing of vendor payments, contributions made to the plan and timing of ongoing collections, respectively.

Cash flows used in operating activities was $118.7 million in the year ended December 31, 2024, which is primarily attributable to the current year net loss, including discontinued operations, of $59.9 million, and non-cash adjustments arising from the BWRS sale of $58.9 million, partially offset by the mark to market, prior service cost amortization for pension and postretirement plans of $34.9 million and depreciation and amortization of long-lived assets of $16.7 million.

Cash flows used in operating activities also included movements in certain operating assets and liabilities such as utilization of contracts in progress of $41.6 million and accounts receivable -trade, net of $12.2 million, which are primarily impacted by timing differences related to progress made on ongoing projects, billings, and collections, accrued and other current liabilities of $28.5 million resulting from the timing of payments to vendors, and pension liabilities, accrued postretirement benefits and employee benefits of $16.8 million.

Cash flows provided by investing activities totaled $197.0 million in the year ended December 31, 2025, primarily due to proceeds from the sale of businesses of $216.3 million, partially offset by purchases of fixed assets primarily relating to BrightLoop ™ projects.

Cash flows provided by investing activities totaled $110.0 million in the year ended December 31, 2024, primarily related to $120.9 million of proceeds from our divestitures, partially offset by $11.2 million of capital expenditures primarily relating to BrightLoop ™ projects.

Cash flows used in financing activities was $58.7 million during the year ended December 31, 2025, primarily related to the redemption of our Senior Notes due 2026 of $110.7 million, net repayments on the Axos Credit Agreement of $54.3 million and payments of Preferred Stock dividends of $14.9 million, partially offset by proceeds of $130.1 million pursuant to our at-the-market offerings as described in Note 16 to the Consolidated Financial Statements.

Cash flows provided by financing activities of $69.7 million during the year ended December 31, 2024, primarily related to the net borrowings on the Axos Credit Agreement of $93.7 million, partially offset by Preferred Stock dividend payments of $18.6 million and debt issuance costs of $8.5 million.

Debt and Credit Facilities

As described in Note 15 to our Consolidated Financial Statements included herein, we entered into a Credit Agreement in January 2024.

Riley, a related party, has provided a guaranty of payment with regard to our obligations under the Credit Agreement.

This agreement substantially replaces the existing Reimbursement Agreement, Revolving Credit Agreement and Letter of Credit Agreement.

We completed the transition of letters of credit outstanding under the Letter of Credit Agreement

and Reimbursement Agreement to the Credit Agreement in August 2024.

We completed the transition of letters of credit outstanding under the Letter of Credit Agreement and Reimbursement Agreement to the Credit Agreement in August 2024.

Information related to our Debt and Credit Facilities is described in Note 15 to the Consolidated Financial Statements and is incorporated herein by reference.

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These policies require our most difficult, subjective and complex judgments, often as a result of the need to make estimates of matters that are inherently uncertain.

Business Combinations

Assets acquired and liabilities assumed in a business combination are recognized and measured based on their estimated fair value at the acquisition date, while the acquisition-related costs are expensed as incurred.

Any excess of the purchase consideration when compared to the fair value of the net tangible and intangible assets acquired, if any, is recorded as goodwill.

We engage valuation specialists to assist with the determination of the fair value of assets acquired, liabilities assumed, and goodwill, if any, for any acquisition.

If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate will be recorded.

Subsequent to the reporting period, and not later than one year from the acquisition date, we will record any material adjustments to the initial estimate based on new information obtained that would have existed as of the date of the acquisition.

Any adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period the adjustment arises.

See Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for further discussion.

Assets and Liabilities Held for Sale and Discontinued Operations

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Discontinued operations comprise activities that were disposed of, discontinued or held for sale at the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting purposes and represent a strategic business shift having a major effect on our operations and financial results according to ASC 205, Presentation of Financial Statements.

We have included all of the revenues and expenses for B&W Solar, BWRS, SPIG, GMAB and Vølund businesses as discontinued operations in the Consolidated Statements of Operations and all assets and liabilities as held for sale in the Consolidated Balance Sheets.

We have included all of the revenues and expenses for B&W Solar, BWRS, SPIG, GMAB, Vølund, Diamond Power and ASH businesses as discontinued operations in the Consolidated Statements of Operations and all assets and liabilities as held for sale in the Consolidated Balance Sheets as of December 31, 2024.

No assets or liabilities were held for sale in the Consolidated Balance Sheets as of December 31, 2025.

See Note 5 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for further discussion.

Contracts and revenue recognition

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For all contracts, if a current estimate of total contract cost indicates a loss on a contract, the projected contract loss is recognized in full in Costs of operations in the Consolidated Statements of Operations and an accrual for the estimated loss on the uncompleted contract is recorded in Other accrued liabilities in the Consolidated Balance Sheets.

In addition, when we determine that an incomplete contract will not be

completed on time and the contract has liquidated damages provisions, we recognize the estimated liquidated damages at the most likely amount we will incur as a reduction of the estimated selling price in the period the change in estimate occurs.

In addition, when we determine that an incomplete contract will not be completed on time and the contract has liquidated damages provisions, we recognize the estimated liquidated damages at the most likely amount we will incur as a reduction of the estimated selling price in the period the change in estimate occurs.

These amounts are included in Other accrued liabilities in the Consolidated Balance Sheets.

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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 the relevant history with the counterparty that supports expectations about their willingness and ability to pay for the additional cost along with a reasonable margin.

Claims receivable at December 31, 2024 and 2023 were not significant in the Consolidated Financial Statements.

Claims receivable were not significant at December 31, 2025 and 2024.

Our revenue recognition policies, assumptions, changes in estimates and significant loss contracts are described in greater detail in Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

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The estimated fair value of the reporting unit is derived based on valuation techniques we believe market participants would use for each of the reporting units.

The annual quantitative assessment was performed using a combination of the income approach (discounted cash flows), the market approach and the guideline transaction method.

The income approach uses the reporting unit's estimated future cash flows, discounted at the weighted-average cost of capital of a hypothetical third-party buyer to account for uncertainties within the projections.

The income approach uses assumptions based on the reporting unit's estimated revenue growth, operating margin and working capital turnover.

The market approach estimates fair value by applying cash flow multiples to the reporting unit's operating performance.

The multiples are derived from comparable publicly traded companies with similar characteristics to the reporting unit.

The guideline transaction method estimates fair value by applying recent observed transaction multiples from transactions involving companies with similar characteristics to the reporting unit's business.

The Company completed its annual goodwill impairment testing for 2024 and 2025 and determined that the fair value of each reporting unit was substantially in excess of its carrying value.

The Company also performed an interim goodwill impairment test in July 2025, in connection with its sale of Diamond Power business.

No impairment was identified.

If actual results are not consistent with the Company's estimates and/or other assumptions change, the Company may be exposed to future impairment charges that could materially and adversely impact its financial position and results of operations.

See Note 2 and Note 10 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for further discussion.

Warranty expenses

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Factors that impact our estimate of warranty costs include prior history of warranty claims and our estimate of future costs of materials and labor.

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

Such changes could have a material effect on our consolidated financial position, results of operations

and cash flows.

See Note 13 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for further discussion.

Pension plans and postretirement benefits

We sponsor various defined benefit pension and postretirement plans covering certain employees of our U.S., Canadian and U.K.

subsidiaries and use actuarial valuations to calculate the cost and benefit obligations of pension and postretirement benefits.

We sponsor various defined benefit pension and postretirement plans covering certain employees of our U.S.

and Canadian subsidiaries and use actuarial valuations to calculate the cost and benefit obligations of pension and postretirement benefits.

The actuarial valuations use significant assumptions in the determination of benefit cost and obligations, including assumptions regarding discount rates, expected returns on plan assets, mortality and health care cost trends.

Included in our significant assumptions, we determine the discount rate based on a review of published financial data and discussions with our actuary regarding rates of return on high-quality, fixed-income investments currently available and expected to be available during the period to maturity of our pension and postretirement plan obligations.

alternative spot rate method for discounting the benefit obligation rather than a single equivalent discount rate because it more accurately applies each year's spot rates to the projected cash flows.

We use an alternative spot rate method for discounting the benefit obligation rather than a single equivalent discount rate because it more accurately applies each year's spot rates to the projected cash flows.

The components of benefit cost related to service cost, interest cost, expected return on plan assets and prior service cost amortization are recorded on a quarterly basis based on actuarial assumptions.

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The expected rate of return on plan assets is determined to be the weighted average of the nominal returns based on the weightings of the asset classes within the total asset portfolio.

As of December 2015, we have ceased all of our various plans but continue to accrue benefits for those employees still eligible prior to the cessation of these plans.

As of 2015, we have ceased all of our various plans but continue to accrue benefits for those employees still eligible prior to the cessation of these plans.

See Note 14 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for further discussion.

Income tax expense for federal, foreign, state and local income taxes are calculated on taxable income based on the income tax law in effect at the latest balance sheet date and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities.

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Disclosures are provided when there is a reasonable possibility that the ultimate loss will exceed the recorded provision or if such probable loss is not reasonably estimable.

We currently are involved in significant litigation, as discussed in Note 20 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

As disclosed, we have accrued estimates of the probable losses associated with these matters;

however, these matters are typically resolved over long periods of time and are often difficult to estimate due to the factors included in Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Consequently, it is possible future earnings could be affected by changes in our assessment of the probability that a loss has been incurred in a material pending litigation against us and/or changes in estimates related to such matters.

Currently we do not expect that any of our litigation proceedings, disputes and claims will have a material adverse effect on our consolidated financial position, as discussed in Note 20 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Where applicable, we have accrued estimates of the probable losses associated with these matters;

however, these matters are typically resolved

over long periods of time and are often difficult to estimate due to the factors included in Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Consequently, it is possible future earnings could be affected by changes in our assessment of the probability that a loss has been incurred in material pending litigation against us and/or changes in estimates related to such matters.

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 7. Management’s Discussion and Analysis