~~Elimination of the historical interest expense recognized by Universal of $0.1 million, $0.3~~$0.2 million and $0.4 million, respectively.

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.

NOTE 4 – REVENUE RECOGNITION AND CONTRACTS

Revenue Recognition

A performance obligation is a contractual promise to transfer a distinct good or service to the customer. A contract's transaction price is allocated to each distinct performance obligation and is recognized as revenue when (point in time) or as (over time) the performance obligation is satisfied.

Revenue from goods and services transferred to customers at a point in time, which includes certain aftermarket parts and services, accounted for 18% and 31% for the three months ended June 30, 2021 and 2020, respectively, and 22% and 31% of our revenue for the six months ended June 30, 2021 and 2020, respectively. Revenue from products and services transferred to customers over time, which primarily relates to customized, engineered solutions and construction services, accounted for 82% and 69% for the three months ended June 30, 2021 and 2020, respectively, and 78% and 69% of our revenue for the six months ended June 30, 2021 and 2020, respectively.

Refer to Note 3 for our disaggregation of revenue by product line.

Contract Balances

The following represents the components of our contracts in progress and advance billings on contracts included in our Condensed Consolidated Balance Sheets:


(in thousands)	June 30, 2021		December 31, 2020		$ Change		% Change
Contract assets - included in contracts in progress:
Costs incurred less costs of revenue recognized	$	25,766	$	25,888	$	(122)	0	%
Revenues recognized less billings to customers	38,171		33,420		4,751		14	%
Contracts in progress	$	63,937	$	59,308	$	4,629	8	%
Contract liabilities - included in advance billings on contracts:
Billings to customers less revenues recognized	$	51,361	$	61,884	$	(10,523)	(17)	%
Costs of revenue recognized less cost incurred	1,781		2,118		(337)		(16)	%
Advance billings on contracts	$	53,142	$	64,002	$	(10,860)	(17)	%

Net contract balance	$	10,795	$	(4,694)	$	15,489	(330)	%

Accrued contract losses	$	321	$	582	$	(261)	(45)	%

Backlog

On June 30, 2021 we had $500.0 million of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 45.2%, 21.2% and 33.6% of our remaining performance obligations as revenue in the ~~three~~remainder of 2021, 2022 and ~~nine months ended September 30, 2016 and the 12 months ended~~ ~~December 31, 2016~~,thereafter, respectively.

~~Elimination of $2.1 million in transaction related costs recognized in the 12 months ended~~ ~~December 31, 2016~~.

~~NOTE 5 – CONTRACTS AND REVENUE RECOGNITION~~

We generally recognize revenues and related costs from long-term contracts on a percentage-of-completion basis. Accordingly, we review contract price and cost estimates regularly as work progresses and reflect adjustments in profit proportionate to the percentage of completion in the periods in which we revise estimates to complete the contract. To the extent that these adjustments result in a reduction of previously reported profits from a project, we recognize a charge against current earnings. If a contract is estimated to result in a loss, that loss is recognized in the current period as a charge to earnings and the full loss is accrued on our balance sheet, which results in no expected gross profit from the loss contract in the future unless there are revisions to our estimated revenues or costs at completion in periods following the accrual of the contract loss. Changes in the estimated results of our percentage-of-completion contracts are necessarily based on information available at the time that the estimates are made and are based on judgments that are inherently uncertain as they are predictive in nature. As with all estimates to complete used to measure contract revenue and costs, actual results can and do differ from our estimates made over time.Contract Estimates

In the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016,~~2020, we recognized changes in estimated gross profit related to long-term contracts accounted for on the ~~percentage-of-completion~~over time basis, which are summarized as follows:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2021		2020		2021		2020
Increases in gross profit for changes in estimates for over time contracts	$	2,314	$	4,037	$	5,339	$	7,561
Decreases in gross profit for changes in estimates for over time contracts	(3,137)		(5,102)		(4,495)		(5,288)
Net changes in gross profit for changes in estimates for over time contracts	$	(823)	$	(1,065)	$	844	$	2,273

Three months ended September 30, Nine months ended September 30,
(in thousands) 2017 2016 2017 2016
Increases in estimates for percentage-of-completion contracts $ 3,040
$ 7,996
$ 15,777
$ 33,056
Decreases in estimates for percentage-of-completion contracts (12,312 ) (22,126 ) (135,445 ) (65,805 )
Net changes in estimates for percentage-of-completion contracts $ (9,272 ) $ (14,130 ) $ (119,668 ) $ (32,749 )

B&W Renewable EPC Loss Contracts

~~As disclosed in our December 31, 2016 consolidated financial statements, we~~

We had ~~four~~6 B&W Renewable EPC contracts for renewable energy ~~projects~~facilities in Europe that were loss contracts at December 31, ~~2016. During~~2017. 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 have one remaining extended scope contract in our Babcock & Wilcox Renewable segment which turned into a loss contract in the fourth quarter of 2019.

NaN of the 6 contracts were 100% complete and the remaining 2 contracts were nearly 100% complete at June 30, 2021, with only limited warranty obligations remaining, and all have been turned over to the customers. In the three months ended June 30, ~~2017, two additional renewable energy projects~~2021 and 2020, we recorded $0.0 million and $0.4 million in ~~Europe became loss contracts. During~~net losses, respectively, and in the ~~three and nine~~six months ended ~~September~~June 30, ~~2017,~~2021 and 2020, we recorded ~~a total of $11.6~~$0.1 million ~~and $123.8 million, respectively,~~ in net gains and $0.3 million in net losses, respectively, inclusive of warranty expense as described in Note 10, resulting from changes in the estimated revenues and costs to complete ~~these six European renewable energy loss~~those contracts. ~~These changes in estimates include an increase in our estimate of~~All liquidated damages associated with these 6 contracts have been settled and paid as of December 31, 2020.

In 2019, one of our other B&W Renewable energy contracts turned into a loss contract due to delays and other start-up costs prior to turnover to the client in October 2019. In the three and six ~~projects of $13.2~~months ended June 30, 2021 our estimated loss on the contract improved by $0.7 million, and ~~$22.6 million~~ in the three and ~~nine~~six months ended ~~September 30, 2017, respectively, to a total of $62.8 million at September 30, 2017. The charges recorded in the nine months~~

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ended September 30, 2017 were due to revisions in the estimated revenues and costs at completion during the period, primarily as a result of structural steel design issues including the anticipated schedule impact, scheduling delays and shortcomings in our subcontractors' estimated productivity. Also included in the charges recorded in the nine months ended September 30, 2017 were corrections that reduced (increased) estimated contract losses at completion by $1.0 million, $(6.0) million and $1.1 million relating to the three months ended December 31, 2016, March 31, 2017 and June 30, ~~2017, respectively. Management has determined these amounts are immaterial to the consolidated financial statements in these previous periods.~~2020, we did 0t recognize additional charges on this contract. As of ~~September~~June 30, ~~2017, the status of these six loss contracts was as follows:~~

The first project became a loss contract in the second quarter of 2016. As of September 30, 2017, this project is approximately 97% complete and construction activities are complete as of the date of this report. The unit became operational during the second quarter of 2017, and turnover activities linked to the customer's operation of the facility are expected to be completed during the first quarter of 2018. During the three and nine months ended September 30, 2017, we recognized additional contract losses of $4.6 million and $15.1 million, respectively, on the project as a result of differences in actual and estimated costs and schedule delays. Our estimate at completion as of September 30, 2017 includes $9.4 million of total expected liquidated damages. As of September 30, 2017, the reserve for estimated contract losses recorded in "other accrued liabilities" in our consolidated balance sheet was $2.3 million. In the three and nine months ended September 30, 2016, we recognized charges of $14.0 million and $45.7 million, respectively, and as of September 30, 2016, this project had $7.8 million of accrued losses and was 79% complete.

~~The second project became a loss contract in the fourth quarter of 2016. As of September 30, 2017,~~2021, this contract was approximately 75% complete, and we expect this project to be completed in early 2018. During the three and nine months ended September 30, 2017, we recognized contract gains of $2.0 million and contract losses of $35.4 million, respectively, on this project as a result of changes in construction cost estimates and schedule delays. Our estimate at completion as of September 30, 2017 includes $15.5 million of total expected liquidated damages. As of September 30, 2017, the reserve for estimated contract losses recorded in "other accrued liabilities" in our consolidated balance sheet was $13.6 million.99% complete.

The third project became a loss contract in the fourth quarter of 2016. As of September 30, 2017, this contract was approximately 95% complete and construction activities are complete as of the date of this report. The unit became operational during the second quarter of 2017, and turnover activities linked to the customer's operation of the facility are expected to be completed during the fourth quarter of 2017. During the three and nine months ended September 30, 2017, we recognized additional contract losses of $1.6 million and $7.1 million, respectively, as a result of changes in the estimated costs at completion. Our estimate at completion as of September 30, 2017 includes $6.7 million of total expected liquidated damages for schedule delays. As of September 30, 2017, the reserve for estimated contract losses recorded in "other accrued liabilities" in our consolidated balance sheet was $1.7 million.

The fourth project became a loss contract in the fourth quarter of 2016. As of September 30, 2017, this contract was approximately 77% complete, and we expect this project to be completed in early 2018. During the three and nine months ended September 30, 2017, we revised our estimated revenue and costs at completion for this loss contract, which resulted in contract gains of $4.5 million and contract losses of $17.4 million, respectively. Our estimate at completion as of September 30, 2017 includes $8.9 million of total expected liquidated damages due to schedule delays. The changes in the status of this project were primarily attributable to changes in the estimated costs at completion, offset by a $4.8 million reduction in estimated liquidated damages we recognized during the three months ended March 31, 2017. As of September 30, 2017, the reserve for estimated contract losses recorded in "other accrued liabilities" in our consolidated balance sheet was $5.2 million.

The fifth project became a loss contract in the second quarter of 2017. As of September 30, 2017, this contract was approximately 60% complete, and we expect this project to be completed in the second half of 2018. During the three and nine months ended September 30, 2017, we revised our estimated revenue and costs at completion for this loss contract, which resulted in additional contract losses of $12.0 million and $35.3 million, respectively. Our estimate at completion as of September 30, 2017 includes $17.9 million of total expected liquidated damages due to schedule delays. The change in the status of this project was primarily attributable to changes in the estimated costs at completion and schedule delays. As of September 30, 2017, the reserve for estimated contract losses recorded in "other accrued liabilities" in our consolidated balance sheet was $14.3 million.

The sixth project became a loss contract in the second quarter of 2017. As of September 30, 2017, this contract was approximately 68% complete, and we expect this project to be completed in the first half of 2018. During the nine months ended September 30, 2017, we revised our estimated revenue and costs at completion for this loss contract, which resulted in additional contract losses of $18.5 million. We had no significant change in estimate on this loss contract during the

~~Table of Contents~~

three months ended September 30, 2017. Our estimate at completion as of September 30, 2017 includes $4.3 million of total expected liquidated damages due to schedule delays. The change in the status of this project was primarily attributable to changes in the estimated costs at completion and schedule delays. As of September 30, 2017, the reserve for estimated contract losses recorded in "other accrued liabilities" in our consolidated balance sheet was $3.3 million.

In September 2017, we identified the failure of a structural steel beam on ~~the fifth project, which temporarily stopped work~~a contact for a biomass plant in the ~~boiler building pending corrective actions to stabilize the structure that are expected to be complete in the fourth quarter of 2017.~~United Kingdom, 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 projects,~~two other contracts, and although no structural failure occurred on these two other ~~projects,~~contracts, work was also stopped ~~for a short period of time, and~~in certain restricted areas while we added reinforcement ofto the ~~structure is underway.~~structures, which also resulted in delays. The ~~costs~~total cost related to ~~these~~the structural steel issues ~~are~~on these three contracts was estimated to be approximately ~~$20~~$36 million, which ~~include the impact of project delays, and~~ is included in the ~~September~~June 30, ~~2017~~2021 estimated losses at completion for these three ~~projects as~~contracts. We are continuing to aggressively pursue recovery of this cost from responsible subcontractors. 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 5 of 6 European B&W Renewable EPC loss contracts disclosed above.

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

B&W Environmental Loss Contracts

At June 30, 2021, the B&W Environmental segment had 2 significant loss contracts, each of which are contracts for a dry cooling system for a gas-fired power plant in the ~~preceding paragraphs.~~United States. In the three and six months ended June 30, 2021 our estimated loss on these contracts improved by $0.4 million and in the three and six months ended June 30, 2020, we did 0t recognize additional charges on these contracts. As of June 30, 2021, both contracts were nearly 100% complete.

~~Also~~

NOTE 5 – INVENTORIES

The components of inventories are as follows:


(in thousands)	June 30, 2021		December 31, 2020
Raw materials and supplies	$	47,482	$	46,659
Work in progress	7,364		8,195
Finished goods	16,157		12,307
Total inventories	$	71,003	$	67,161

NOTE 6 – PROPERTY, PLANT & EQUIPMENT, & FINANCE LEASE

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


(in thousands)	June 30, 2021		December 31, 2020
Land	$	1,550	$	1,584
Buildings	34,096		34,207
Machinery and equipment	151,352		151,399
Property under construction	2,749		5,336
	189,747		192,526
Less accumulated depreciation	139,850		135,925
Net property, plant and equipment	49,897		56,601
Finance lease	37,142		30,551
Less finance lease accumulated amortization	3,673		2,074
Net property, plant and equipment, and finance lease	$	83,366	$	85,078

NOTE 7 - GOODWILL

The following summarizes the changes in the net carrying amount of goodwill as of June 30, 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
Currency translation adjustments	7		4		39		50
Balance at June 30, 2021	$	10,218	$	5,677	$	31,518	$	47,413

Goodwill is tested for impairment annually and when impairment indicators exist. NaN impairment indicators were identified during the three months ended June 30, 2021. 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.

NOTE 8– INTANGIBLE ASSETS

Our intangible assets are as follows:


(in thousands)	June 30, 2021		December 31, 2020
Definite-lived intangible assets
Customer relationships	$	24,110	$	24,862
Unpatented technology	15,489		15,713
Patented technology	3,124		2,642
Tradename	12,879		13,088
All other	9,414		9,262
Gross value of definite-lived intangible assets	65,016		65,567
Customer relationships amortization	(20,047)		(19,537)
Unpatented technology amortization	(7,546)		(6,751)
Patented technology amortization	(2,662)		(2,593)
Tradename amortization	(5,133)		(4,831)
All other amortization	(9,281)		(9,252)
Accumulated amortization	(44,669)		(42,964)
Net definite-lived intangible assets	$	20,347	$	22,603
Indefinite-lived intangible assets
Trademarks and trade names	$	1,305	$	1,305
Total intangible assets, net	$	21,652	$	23,908

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


	Six months ended June 30,
(in thousands)	2021		2020
Balance at beginning of period	$	23,908	$	25,300
Amortization expense	(1,705)		(1,716)
Currency translation adjustments	(551)		81
Balance at end of the period	$	21,652	$	23,665

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

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


	Amortization Expense
Year ending December 31, 2021	$	1,701
Year ending December 31, 2022	3,409
Year ending December 31, 2023	3,409
Year ending December 31, 2024	3,325
Year ending December 31, 2025	2,559
Year ending December 31, 2026	1,283
Thereafter	4,661

NOTE 9– LEASES

Certain real property assets for our Copley, Ohio location were sold on March 15, 2021, as described in Note 24. 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 a finance lease with total future minimum payments during the initial term of the lease of approximately $5.7 million as of June 30, 2021. An incremental borrowing rate of 7.19% was used to determine the right-of-use (the "ROU") asset. We recorded a $3.6 million ROU asset in net property, plant and equipment, and finance lease and corresponding liabilities of $3.8 million in otheraccrued liabilities and other non-current finance liabilities in the Condensed Consolidated Balance Sheets as of June 30, 2021.

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


		Three months ended June 30,				Six months ended June 30,
(in thousands)	Classification	2021		2020		2021		2020
Operating lease expense:
Operating lease expense	Selling, general and administrative expenses	$	1,308	$	1,389	$	2,647	$	2,896
Short-term lease expense	Selling, general and administrative expenses	1,486		292		2,641		480
Variable lease expense (1)	Selling, general and administrative expenses	471		(382)		679		394
Total operating lease expense		$	3,265	$	1,299	$	5,967	$	3,770

Finance lease expense:
Amortization of right-of-use assets	Selling, general and administrative expenses	$	1,069	$	514	$	1,598	$	1,029
Interest on lease liabilities	Interest expense	708		616		1,324		1,231
Total finance lease expense		$	1,777	$	1,130	$	2,922	$	2,260

Sublease income (2)	Other – net	$	(21)	$	(21)	$	(43)	$	(43)
Net lease cost		$	5,021	$	2,408	$	8,846	$	5,987

(1) Variable lease expense primarily consists of common area maintenance expenses paid directly to lessors of real estate leases.

(2) Sublease income excludes rental income from owned properties, which is not material.

Other information related to leases is as follows:


	Six months ended June 30,
(in thousands)	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,674	$	2,743
Operating cash flows from finance leases	1,324		1,231
Financing cash flows from finance leases	834		(399)


(in thousands)	June 30, 2021			December 31, 2020
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	1,281		$	2,629
Finance leases	$	6,589		$	146

Weighted-average remaining lease term:
Operating leases (in years)	2.8			3.1
Finance leases (in years)	12.5			13.9
Weighted-average discount rate:
Operating leases	9.11		%	9.26		%
Finance leases	7.88		%	8.00		%

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


(in thousands)
Assets:	Classification	June 30, 2021		December 31, 2020
Operating lease assets	Right-of-use assets	$	9,399	$	10,814
Finance lease assets	Net property, plant and equipment, and finance lease	33,469		28,477
Total non-current lease assets		$	42,868	$	39,291

Liabilities:
Current
Operating lease liabilities	Operating lease liabilities	$	3,728	$	3,995
Finance lease liabilities	Other accrued liabilities	3,095		886
Non-current
Operating lease liabilities	Non-current operating lease liabilities	5,888		7,031
Finance lease liabilities	Non-current finance lease liabilities	33,237		29,690
Total lease liabilities		$	45,948	$	41,602

Future minimum lease payments required under non-cancellable leases as of June 30, 2021 were as follows:


(in thousands)	Operating Leases		Finance Leases		Total
2021 (excluding the six months ended June 30, 2021)	$	2,410	$	2,860	$	5,270
2022	3,864		5,233		9,097
2023	2,572		3,879		6,451
2024	1,468		3,944		5,412
2025	411		3,969		4,380
Thereafter	7		38,412		38,419
Total	$	10,732	$	58,297	$	69,029
Less imputed interest	(1,116)		(21,965)		(23,081)
Lease liability	$	9,616	$	36,332	$	45,948

NOTE 10 – ACCRUED WARRANTY EXPENSE

We may offer assurance type warranties on products and services we sell. Changes in the carrying amount of our accrued warranty expense are as follows:


	Six months ended June 30,
(in thousands)	2021		2020
Balance at beginning of period	$	25,399	$	33,376
Additions	3,608		2,063
Expirations and other changes	(4,309)		(1,584)
Payments	(8,576)		(5,410)
Translation and other	254		46
Balance at end of period	$	16,376	$	28,491

We accrue estimated expense included in cost of operations on our Condensed 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. Such changes could have a material effect on our consolidated financial condition, results of operations and cash flows.

NOTE 11 – RESTRUCTURING ACTIVITIES

The Company incurred restructuring charges in the three months ended ~~September~~June 30, ~~2017, we adjusted the design~~2021 and 2020. The charges primarily consist of ~~three of these renewable facilities~~severance costs related to ~~increase the guaranteed power output, which will allow us to achieve contractual bonus opportunities for the higher output. The bonus opportunities increased the estimated selling price~~actions taken, including as part of the ~~three contracts by approximately $15 million in total,~~Company’s strategic, market-focused organizational and ~~this positive change in estimated cost~~re-branding initiative. During 2020, these charges also include actions taken to ~~complete was fully recognized in~~address the ~~third quarter~~impact of ~~2017 because each of these three were loss projects.~~

~~During the three and nine months ended September 30, 2017, we recognized a net loss of $2.3 million~~COVID-19 on our business.

The following table summarizes the restructuring activity incurred by segment:


	Three months ended June 30,						Three months ended June 30,
	2021						2020
(in thousands)	Total		Severance and related costs		Other (1)		Total		Severance and related costs		Other (1)
B&W Renewable segment	$	557	$	466	$	91	$	951	$	155	$	796
B&W Environmental segment	209		172		37		237		154		83
B&W Thermal segment	1,542		1,035		507		948		303		645
Corporate	92		8		84		256		0		256
	$	2,400	$	1,681	$	719	$	2,392	$	612	$	1,780


	Six months ended June 30,						Six months ended June 30,
	2021						2020
(in thousands)	Total		Severance and related costs		Other (1)		Total		Severance and related costs		Other (1)
B&W Renewable segment	$	1,066	$	919	$	147	$	1,752	$	813	$	939
B&W Environmental segment	298		207		91		377		211		166
B&W Thermal segment	1,890		1,047		843		1,889		689		1,200
Corporate	139		8		131		325		0		325
	$	3,393	$	2,181	$	1,212	$	4,343	$	1,713	$	2,630
Cumulative costs to date	$	43,707	35,394		8,313

(1) Other amounts consist primarily of exit, relocation, COVID-19 related and other ~~renewable energy projects that are not loss contracts, and we expect them to remain profitable at completion.~~costs.

During the third quarter of 2016, we determined it was probable that we would receive a $15.0 million insurance recovery for a portion of the losses on the first European renewable energy project discussed above. There was no change in the accrued probable insurance recovery at September 30, 2017. The insurance recovery represents the full amount available under the insurance policy, and is recorded in accounts receivable - other in our condensed consolidated balance sheet at September 30, 2017.

~~NOTE 6 – RESTRUCTURING ACTIVITIES AND SPIN-OFF TRANSACTION COSTS~~

~~Restructuring liabilities~~

Restructuring liabilities are included in other accrued liabilities on our ~~condensed consolidated balance sheets.~~Condensed Consolidated Balance Sheets. Activity related to the restructuring liabilities is as follows:


	Three months ended June 30,			Six months ended June 30,
(in thousands)		2021		2020		2021		2020
Balance at beginning of period		$	8,022	$	5,341	$	8,146	$	5,358
Restructuring expense		2,400		2,392		3,393		4,343
Payments		(2,477)		(2,646)		(3,594)		(4,614)
Balance at end of period		$	7,945	$	5,087	$	7,945	$	5,087

Three months ended September 30, Nine months ended September 30,
(in thousands) 2017 2016 2017 2016
Balance at beginning of period⁽¹⁾
$ 967
$ 11,984
$ 2,254
$ 740
Restructuring expense 3,428
1,792
7,285
19,816
Payments (2,399 ) (10,422 ) (7,543 ) (17,202 )
Balance at September 30 $ 1,996
$ 3,354
$ 1,996
$ 3,354

⁽¹⁾~~For~~The payments shown above for the three ~~month periods~~months ended ~~September 30, 2017 and 2016, the balance at the beginning of the period is as of~~ June 30, ~~2017~~2021 and ~~2016, respectively. For the nine month periods ended September 30, 2017 and 2016, the balance at the beginning of the period is as of December 31, 2016 and 2015, respectively.~~

2020 relate primarily to severance. Accrued restructuring liabilities at ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 relate primarily to employee termination benefits.

Excluded from restructuring expense in the table above are non-cash restructuring charges that did not impact the accrued restructuring liability. In the three and nine months ended September 30, 2017, we recognized $0.2 million and $0.6 million, respectively, in non-cash restructuring expense related to losses (gains) on the disposals of long-lived assets. In the three and nine months ended September 30, 2016, we recognized non-cash charges of $0.2 million and $14.8 million, respectively, related to impairments of long-lived assets.

~~Table of Contents~~

~~Spin-off transaction costs~~

Spin-off costs were primarily attributable to employee retention awards directly related to the spin-off from our former parent, The Babcock & Wilcox Company (now known as BWX Technologies, Inc.). In the three and nine months ended September 30, 2017, we recognized spin-off costs of $0.2 million and $1.0 million, respectively. In the three and nine months ended September 30, 2016, we recognized spin-off costs of $0.4 million and $3.4 million, respectively. In the nine months ended September 30, 2017, we disbursed $1.9 million of the accrued retention awards.

~~NOTE 7 – PROVISION FOR INCOME TAXES~~

We had an income tax benefit of $5.6 million in the three months ended September 30, 2017, which resulted in a 4.7% effective tax rate as compared to $1.6 million of income tax expense in the three months ended September 30, 2016, which resulted in a 15.2% effective tax rate. Our effective tax rate for the three months ended September 30, 2017 was lower than our statutory rate primarily due to nondeductible goodwill impairment charges, foreign losses in our Renewable segment that are subject to a valuation allowance and nondeductible expenses, offset by favorable discrete items of $0.4 million. The discrete items include favorable adjustments to prior year U.S. tax returns and the effect of vested and exercised share-based compensation awards. Our effective tax rate for the three months ended September 30, 2016 was lower than our statutory rate primarily due to changes in the jurisdictional mix of our forecasted full year income and losses and favorable impacts from adjustments related to prior years' tax returns in the United States and foreign jurisdictions.

We had an income tax benefit of $7.6 million in the nine months ended September 30, 2017, which resulted in a 2.7% effective tax rate as compared to an income tax benefit of $0.8 million in the nine months ended September 30, 2016, which resulted in a 1.8% effective tax rate for the nine months ended September 30, 2016. Our effective tax rate for the nine months ended September 30, 2017 was lower than our statutory rate primarily due to the reasons noted above, as well as the second quarter tax benefit associated with the impairment of our equity method investment in India, which was offset by a valuation allowance, second quarter discrete items including withholding tax on a forecasted distribution outside the United States, partly offset by first quarter favorable discrete adjustments to prior year foreign tax returns and nondeductible transaction costs. Our effective tax rate for the nine months ended September 30, 2016 was lower than our statutory rate primarily due to a $13.1 million increase in valuation allowances associated with deferred tax assets related to our equity investment in a foreign joint venture and state net operating losses, and to the jurisdictional mix of our forecasted full year income and losses, as described above.

~~During the nine months ended September 30, 2017, we prospectively adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2016-09,~~ ~~Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-based Payment Accounting~~. Adopting the new accounting standard resulted in a net $0.2 million and $1.7 million income tax benefit in the three and nine months ended September 30, 2017, respectively, associated with the income tax effects of vested and exercised share-based compensation awards.

~~Table of Contents~~

NOTE 812 – ~~COMPREHENSIVE INCOME~~PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

~~Gains and losses deferred~~Components of net periodic benefit cost (benefit) included in ~~accumulated other comprehensive~~net income (loss) ~~("AOCI")~~ are ~~reclassified and recognized~~as follows:


	Pension Benefits								Other Benefits
	Three months ended June 30,				Six months ended June 30,				Three months ended June 30,				Six months ended June 30,
(in thousands)	2021		2020		2021		2020		2021		2020		2021		2020
Interest cost	$	5,609	$	8,250	$	11,280	$	16,511	$	39	$	72	$	78	$	144
Expected return on plan assets	(11,773)		(15,544)		(26,782)		(31,185)		0		0		0		0
Amortization of prior service cost (credit)	28		43		56		86		173		(271)		346		(542)
Benefit plans, net (1)	(6,136)		(7,251)		(15,446)		(14,588)		212		(199)		424		(398)
Service cost included in COS (2)	218		209		435		420		6		4		12		9
Net periodic benefit cost (benefit)	$	(5,918)	$	(7,042)	$	(15,011)	$	(14,168)	$	218	$	(195)	$	436	$	(389)

(1) Benefit plans, net, which is presented separately in the ~~condensed consolidated statements~~Condensed 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 ~~once they~~ in the Condensed Consolidated Statement of Operations and is allocated to the B&W Thermal segment.

There were 0 mark-to-market adjustments for our pension and other postretirement benefit plans during the three and six months ended June 30, 2021 and 2020.

We made contributions to our pension and other postretirement benefit plans totaling $0.3 million and $24.3 million during the three and six months ended June 30, 2021, respectively, as compared to $0.6 million and $1.1 million during the three and six months ended June 30, 2020, respectively. Contributions made during the three months ended June 30, 2021 includes 0 interest and during the six months ended June 30, 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.

NOTE 13 – 2021 SENIOR NOTES OFFERING

On February 12, 2021, we completed a public offering of $125.0 million aggregate principal amount of our 8.125% senior notes due 2026. At the completion of the offering, we received net proceeds of approximately $120.0 million after deducting underwriting discounts, commissions, and before expenses.

In addition to the public offering, we issued $35.0 million of Senior Notes to B. Riley Financial, Inc. 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 Senior Notes up to an aggregate principal amount of $150.0 million of Senior Notes. The 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 Senior Notes issued February 12, 2021, as described above.

As of June 30, 2021, the Company has sold $12.9 million aggregate principal amount of Senior Notes under the sales agreement disclosed above for $13.1 million of net proceeds after commissions and fees.

Subsequent to June 30, 2021 and as of August 12, 2021, the Company has sold $12.7 million aggregate principal amount of Senior Notes under the March 31, 2021 sales agreement disclosed above for $12.9 million of net proceeds after commission and fees.

The components of the Senior Notes are ~~realized.~~ as follows:


(in thousands)	June 30, 2021
8.125% Senior Notes due 2026	$	172,882
Unamortized deferred financing costs	(4,913)
Unamortized premium	388
Net debt balance	$	168,357

The ~~changes~~Senior Notes are senior unsecured obligations of the Company and rank equally in right of payment with all of the Company’s other existing and future senior unsecured and unsubordinated indebtedness. The Senior Notes bear interest at the rate of 8.125% per annum. Interest on the Senior Notes is payable quarterly in arrears on January 31, April 30, July 31 and October 31 of each year, commencing on April 30, 2021. The Senior Notes mature on February 28, 2026.

NOTE 14– LAST OUT TERM LOANS

Effective with the new debt facilities the Company entered into on June 30, 2021, as described in Note 15 below, the Company has no remaining Last Out Term Loans and no further borrowings thereunder are available. At December 31, 2020, the components of ~~AOCI, net of tax, for the first three quarters in 2017 and 2016~~our Last Out Term Loans by tranche were as follows:


	December 31, 2020
(in thousands)	A-3		A-4		A-6		Total
Proceeds (1)	$	101,660	$	30,000	$	40,000	$	171,660
Discount and fees	8,650		0		0		8,650
Paid-in-kind interest	3,020		0		0		3,020
Net debt balance	$	113,330	$	30,000	$	40,000	$	183,330

(in thousands) Currency translation gain (loss) (net of tax) Net unrealized gain (loss) on investments (net of tax) Net unrealized gain (loss) on derivative instruments (net of tax) Net unrecognized gain (loss) related to benefit plans (net of tax) Total
Balance at December 31, 2016 $ (43,987 ) $ (37 ) $ 802
$ 6,740
$ (36,482 )
Other comprehensive income (loss) before reclassifications 5,417
61
4,587
(44 ) 10,021
Amounts reclassified from AOCI to net income (loss) —
(27 ) (3,843 ) (882 ) (4,752 )
Net current-period other comprehensive income (loss) 5,417
34
744
(926 ) 5,269
Balance at March 31, 2017 $ (38,570 ) $ (3 ) $ 1,546
$ 5,814
$ (31,213 )
Other comprehensive income (loss) before reclassifications 6,757
(19 ) (2,204 ) (97 ) 4,437
Amounts reclassified from AOCI to net income (loss) —
(1 ) (658 ) (800 ) (1,459 )
Net current-period other comprehensive income (loss) 6,757
(20 ) (2,862 ) (897 ) 2,978
Balance at June 30, 2017 (31,813 ) (23 ) (1,316 ) 4,917
(28,235 )
Other comprehensive income (loss) before reclassifications 2,591
69
268
(66 ) 2,862
Amounts reclassified from AOCI to net income (loss) —
(4 ) 3,567
(630 ) 2,933
Net current-period other comprehensive income (loss) 2,591
65
3,835
(696 ) 5,795
Balance at September 30, 2017 $ (29,222 ) $ 42
$ 2,519
$ 4,221
$ (22,440 )
(1) Tranche A-3 proceeds represent the net proceeds after the $39.7 million principal prepayment from the July 2019 Equitization Transactions.

On February 12, 2021, in connection with the Exchange described in Note 13, the interest rate on the remaining Last Out Term Loans were reduced to 6.625% from 12.0%. Interest expense associated with the Last Out Term Loans is detailed in Note 18. The Company recognized a loss on debt extinguishment of $6.2 million in the quarter ended June 30, 2020, primarily representing the unamortized value of the original issuance discount and fees on the Tranche A-3 Last Out Term Loan.

Tranche A-3

On March 4, 2021, we paid down an additional $40.0 million on our existing Tranche A-3. Also, as described in Note 16, 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 to B. Riley, a related party, in exchange for a deemed prepayment of $73.3 million of our then existing Tranche A-3 and paid $0.9 million in cash for accrued interest.

~~Table~~

Tranche A-4

On January 31, 2020, we borrowed $30.0 million face value of ~~Contents~~the Tranche A-4 from B. Riley, a related party and received net proceeds of $26.3 million after incurring total fees of $3.7 million. On March 4, 2021, we paid down the $30.0 million outstanding on our existing Tranche A-4.

Tranche A-6

On May 14, 2020, we borrowed $30.0 million face value of the Tranche A-6 from B. Riley, a related party, as described in Note 15. On November 30, 2020, we borrowed an additional $10.0 million face value of the Tranche A-6 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.

As described in Note 13, on February 12, 2021, we issued $35.0 million of Senior Notes to B. Riley Financial, Inc. in exchange for a deemed prepayment of our existing Tranche A-6 as part of the Exchange. Also, on March 4, 2021, we paid down the remaining $5.0 million outstanding on our existing Tranche A-6.

(in thousands) Currency translation gain (loss) (net of tax) Net unrealized gain (loss) on investments (net of tax) Net unrealized gain (loss) on derivative instruments (net of tax) Net unrecognized gain (loss) related to benefit plans (net of tax) Total
Balance at December 31, 2015 $ (19,493 ) $ (44 ) $ 1,786
$ (1,102 ) $ (18,853 )
Other comprehensive income (loss) before reclassifications 1,740
18
2,576
(61 ) 4,273
Amounts reclassified from AOCI to net income (loss) —
1
(1,003 ) 61
(941 )
Net current-period other comprehensive income 1,740
19
1,573
—
3,332
Balance at March 31, 2016 $ (17,753 ) $ (25 ) $ 3,359
$ (1,102 ) $ (15,521 )
Other comprehensive income (loss) before reclassifications (11,566 ) (7 ) 778
37
(10,758 )
Amounts reclassified from AOCI to net income (loss) —
—
(651 ) 58
(593 )
Net current-period other comprehensive income (loss) (11,566 ) (7 ) 127
95
(11,351 )
Balance at June 30, 2016 (29,319 ) (32 ) 3,486
(1,007 ) (26,872 )
Other comprehensive income (loss) before reclassifications 2,811
18
1,132
(25 ) 3,936
Amounts reclassified from AOCI to net income (loss) —
—
(1,247 ) 8
(1,239 )
Net current-period other comprehensive income (loss) 2,811
18
(115 ) (17 ) 2,697
Balance at September 30, 2016 $ (26,508 ) $ (14 ) $ 3,371
$ (1,024 ) $ (24,175 )
NOTE 15 – REVOLVING DEBT

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 has 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 (“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. B. Riley Financial, Inc. (“B. 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 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.

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) the applicable spread over LIBOR on the aggregate face amount of the letters of credit issued under the Revolving Credit Agreement, (ii) administrative fees of 0.75% and (iii) 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 ~~reclassified~~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”). The B. Riley Guaranty provides for the guarantee of all of the Company’s obligations under the Reimbursement Agreement. The B. 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.

A&R Credit Agreement

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 quarter ended June 30, 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 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 outstanding outside our prior A&R Credit Agreement as of June 30, 2021 was $57.3 million. The aggregate value of the outstanding letters of credit provided by our prior A&R Credit Agreement backstopping letters of credit or bank guarantees was $22.1 million as of June 30, 2021. Of the outstanding letters of credit issued under our prior A&R Credit Agreement, $32.1 million are subject to foreign currency revaluation. At June 30, 2021, usage under the prior A&R Credit Agreement consisted of $22.0 million of financial letters of credit and $79.7 million of performance letters of credit.

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. These bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds those underwriters issue in support of some of our contracting activity. As of June 30, 2021, bonds issued and outstanding under these arrangements in support of contracts totaled approximately $259.3 million. The aggregate value of the letters of credit provided by our prior A&R Credit Agreement backstopping surety bonds was $24.6 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.

Other Indebtedness - Loan Payable

During the six months ended June 30, 2021, our Denmark subsidiary received 2 unsecured interest free loans totaling $2.6 million under a local government loan program related to COVID-19. The loans of $0.9 million and $1.7 million are payable in April 2022 and May 2022, respectively.

Subsequent to June 30, 2021, our Denmark subsidiary received an unsecured interest free loan totaling $0.9 million under a local government loan program related to COVID-19. The loan is payable in May 2023.

NOTE 16 – PREFERRED STOCK

On May 7, 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”) dated May 4, 2021, between us and B. Riley Securities, Inc., as representative of several underwriters (the “Underwriters”). At the closing, we issued to the public 4,000,000 shares of our Preferred Stock, at an offering price of $25.00 per share for net proceeds of approximately $95.7 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.

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

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 (or a duly authorized committee of our Board of Directors), only out of ~~AOCI~~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 Series A Preferred Stock declared by ~~component~~our Board of Directors (or a duly authorized committee of our Board of Directors) will be payable quarterly in arrears on March 31, June 30, September 30 and December 31, beginning on June 30, 2021.

On June 8, 2021, the ~~affected condensed consolidated statements~~Company's Board of ~~operations line items~~Directors approved a dividend of $0.290625 per share of the Company's outstanding Preferred Stock, with a record date for the dividend of June 18, 2021 and a payment date of June 30, 2021. On June 30, 2021, the Company paid dividends totaling $1.7 million. After the Company paid the dividends on June 30, 2021, there are 0 cumulative undeclared dividends of the Preferred Stock at June 30, 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 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 as ~~follows (in thousands):~~(other than date of issuance and first dividend) with and have the same CUSIP number and be fungible with, the Preferred Stock issued during May 2021. The first dividend for the Preferred Stock issued thereunder, when, as and if declared, will accumulate and be cumulative from the dividend payment date (March 31, June 30, September 30 and December 31 of each year) for which full cumulative dividends have been paid immediately prior to the original issue date for each such share.

AOCI component Line items in the Condensed Consolidated Statements of Operations affected by reclassifications from AOCI Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Derivative financial instruments Revenues $ 2,092
$ 1,940
$ 8,094
$ 4,524
Cost of operations 159
24
113
57
Other-net (7,930 ) (445 ) (7,438 ) (1,065 )
Total before tax (5,679 ) 1,519
769
3,516
Provision for income taxes (2,112 ) 272
(165 ) 615
Net income $ (3,567 ) $ 1,247
$ 934
$ 2,901

Amortization of prior service cost on benefit obligations Cost of operations $ 619
$ (15 ) $ 2,281
$ 294
Provision for income taxes (11 ) (7 ) (31 ) 421
Net income (loss) $ 630
$ (8 ) $ 2,312
$ (127 )

Realized gain on investments Other-net $ 6
$ —
$ 50
$ (1 )
Provision for income taxes 2
—
18
—
Net income (loss) $ 4
$ —
$ 32
$ (1 )

~~Table of Contents~~

Subsequent to June 30, 2021 and as of August 12, 2021, the Company sold $5.9 million aggregate amount of Preferred Stock for $5.9 million net proceeds after commission and fees related to the July 7, 2021 sales agreement disclosed above.

The net proceeds of the offerings are intended to be used for general corporate purposes, including clean energy growth initiatives, potential future acquisitions and reduction of net leverage.

NOTE 17 – COMMON STOCK

On February 12, 2021, we completed a public offering of our common stock pursuant to an underwriting agreement (the “Underwriting Agreement”) dated February 9, ~~– CASH AND CASH EQUIVALENTS~~2021, between us and B. Riley Securities, Inc., as representative of the several underwriters (the “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 ~~components~~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 (the “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 Common Stock subject to outstanding awards granted under the 2015 Plan was 2,007,152 shares.

NOTE 18 –INTEREST EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION

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


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2021		2020		2021		2020
Components associated with borrowings from:
Senior Notes	$	3,459	$	0	$	5,192	$	0
Last Out Term Loans	837		4,828		4,349		8,875


U.S. Revolving Credit Facility	0		3,409		1,416		7,448
	4,296		8,237		10,957		16,323
Components associated with amortization or accretion of:
Senior Notes	298		0		1,766		0
Last Out Term Loans - discount and financing fees	0		1,579		0		3,729
U.S. Revolving Credit Facility - deferred financing fees and commitment fees	1,595		3,629		5,995		12,664
U.S. Revolving Credit Facility - deferred ticking fee for Amendment 16	0		2		0		1,660
	1,893		5,210		7,761		18,053

Other interest expense	1,832		2,035		3,526		3,197

Total interest expense	$	8,021	$	15,482	$	22,244	$	37,573

The following table provides a reconciliation of cash and cash equivalents and restricted cash reporting that sum to the total cash amount in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows:


(in thousands)	June 30, 2021		December 31, 2020		June 30, 2020
Held by foreign entities	$	27,822	$	38,726	$	34,676
Held by U.S. entities	2,238		18,612		2,139
Cash and cash equivalents	30,060		57,338		36,815

Reinsurance reserve requirements	590		4,551		5,596
Restricted foreign accounts	0		2,869		2,661
Bank guarantee collateral	2,240		2,665		3,044
Letters of credit collateral	110,708		0		0
Restricted cash and cash equivalents	113,538		10,085		11,301
Total cash, cash equivalents and restricted cash shown in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows	$	143,598	$	67,423	$	48,116

As disclosed above, letters of credit collateral of $110.7 million as of June 30, 2021 represents cash pledged to secure the outstanding and undrawn letters of credit issued under our prior A&R Credit Agreement, most of which are ~~as follows:~~

(in thousands) September 30, 2017 December 31, 2016
Held by foreign entities $ 44,778
$ 94,415
Held by United States entities 3,359
1,472
Cash and cash equivalents $ 48,137
$ 95,887

Reinsurance reserve requirements $ 21,456
$ 21,189
Restricted foreign accounts 5,192
6,581
Restricted cash and cash equivalents $ 26,648
$ 27,770

~~Our United States revolving~~expected to be cancelled and replaced by new letters of credit ~~facility~~issued by PNC, as described in Note ~~17 allows for nearly immediate borrowing~~15 – Revolving Debt. Subsequent to June 30, 2021 and as of ~~available capacity~~August 12, 2021, we have issued $60.7 million of backstop letters of credit issued by PNC and reclassified this amount from restricted cash and cash equivalents to ~~fund~~ cash ~~requirements in~~and cash equivalents. We expect to issue new PNC letters of credit to the ~~normal course of business, meaning~~beneficiaries such that the ~~minimum United States~~letters of credit issued under the prior A&R Credit Agreement will be cancelled along with the backstop letters of credit issued by PNC. Further, we expect the completion of the issuance of new letters of credit to cover the remaining collateral balance of $50.0 million by PNC by September 30, 2021 which will alleviate any restricted use of the letters of credit collateral amount by the Company.

The following cash ~~on hand~~activity is ~~maintained~~presented as a supplement to ~~minimize borrowing costs.~~our Condensed Consolidated Statements of Cash Flows and is included in Net cash used in activities:


	Six months ended June 30,
(in thousands)	2021		2020
Income tax payments, net	$	3,331	$	1,438

Interest payments on our 8.125% Senior Notes due 2026	$	2,911	$	0
Interest payments on our U.S. Revolving Credit Facility	5,979		8,110
Interest payments on our Last Out Term Loans	6,140		6,140
Total cash paid for interest	$	15,030	$	14,250

NOTE 1019 – ~~INVENTORIES~~PROVISION FOR INCOME TAXES

~~The components of inventories are as follows:~~

(in thousands) September 30, 2017 December 31, 2016
Raw materials and supplies $ 66,995
$ 61,630
Work in progress 9,518
6,803
Finished goods 14,586
17,374
Total inventories $ 91,099
$ 85,807

~~NOTE 11 – EQUITY METHOD INVESTMENTS~~

Joint ventures in which we have significant ownership and influence, but not control, are accounted for in our consolidated financial statements using the equity method of accounting. We assess our investments in unconsolidated affiliates 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 affiliate at fair value.

Our primary equity method investees include joint ventures in China and India, each of which manufactures boiler parts and equipment. At September 30, 2017 and December 31, 2016, our total investment in these joint ventures was $87.4 million and $98.7 million, respectively.

During the third quarter of 2017, both we and our joint venture partner began the process of scaling back the operations at Thermax Babcock & Wilcox Energy Solutions Private Limited ("TBWES"), our joint venture in India, due to the decline in forecasted market opportunities in India. Currently, the manufacturing facility in India has been reduced to essential personnel only while engineering services are expected to continue in our engineering office through the end of 2017. These actions are in line with our change in strategy for the joint venture announced in the second quarter of 2017, which reduced the expected recoverable value of our investment in TBWES. We recognized an $18.2 million other-than-temporary-impairment of our investment in TBWES during the nine months ended September 30, 2017. The impairment charge was based on the difference in the carrying value of our investment in TBWES and our share of the estimated fair value of TBWES's net assets.

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~~NOTE 12– INTANGIBLE ASSETS~~

~~Our intangible assets are as follows:~~

(in thousands) September 30, 2017 December 31, 2016
Definite-lived intangible assets
Customer relationships $ 59,683
$ 47,892
Unpatented technology 19,941
18,461
Patented technology 6,560
2,499
Tradename 22,818
18,774
Backlog 30,088
28,170
All other 7,550
7,429
Gross value of definite-lived intangible assets 146,640
123,225
Customer relationships amortization (21,931 ) (17,519 )
Unpatented technology amortization (4,443 ) (2,864 )
Patented technology amortization (2,043 ) (1,532 )
Tradename amortization (4,749 ) (3,826 )
Acquired backlog amortization (27,814 ) (21,776 )
All other amortization (6,965 ) (5,974 )
Accumulated amortization (67,945 ) (53,491 )
Net definite-lived intangible assets $ 78,695
$ 69,734

Indefinite-lived intangible assets:
Trademarks and trade names $ 1,305
$ 1,305
Total indefinite-lived intangible assets $ 1,305
$ 1,305

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

Nine months ended September 30,
(in thousands) 2017 2016
Balance at beginning of period $ 71,039
$ 37,844
Business acquisitions 19,500
55,438
Amortization expense (14,455 ) (11,904 )
Currency translation adjustments and other 3,916
647
Balance at end of the period $ 80,000
$ 82,025

The January 11, 2017 acquisition of Universal resulted in an increase in our intangible asset amortization expense during the three and nine months ended September 30, 2017 of $0.5 million and $2.6 million, respectively.

The July 1, 2016 acquisition of SPIG, S.p.A. resulted in an increase in our intangible asset amortization expense during the three and nine months ended September 30, 2017 of $1.9 million and $7.3 million, respectively, and $7.1 million of intangible asset amortization expense duringIn the three months ended ~~September~~June 30, ~~2016.~~2021, income tax expense was $3.5 million, resulting in an effective tax rate of 53.0%. In the three months ended June 30, 2020, income tax expense was $0.8 million, with an effective tax rate of (4.9)%.

~~Amortization~~In the six months ended June 30, 2021, income tax expense was $6.4 million, resulting in an effective tax rate of ~~intangible~~(107.8)%. In the six months ended June 30, 2020, income tax expense was $35.0 thousand, resulting in an effective tax rate of (0.1)%.

Our effective tax rate for the three and six months ended June 30, 2021 and 2020 is not reflective of the U.S. statutory rate due to valuation allowances against certain net deferred tax assets and discrete items. We have unfavorable discrete items of`$0.9 million and $3.5 million for the three and six months ended June 30, 2021, respectively, which primarily represent withholding taxes and adjustment to our United Kingdom deferred tax liabilities due to an enacted change in tax rate. We had favorable discrete items of $1.8 million and $1.3 million for the three and six months ended June 30, 2020, respectively.

We are subject to federal income tax in the United States and numerous countries that have statutory tax rates different than the United States federal statutory rate of 21%. The most significant of these foreign operations are located in Canada, Denmark, Germany, Italy, Mexico, Sweden, and the United Kingdom, with effective tax rates ranging between approximately 19% and 30%. We provide for income taxes based on the tax laws and rates in the jurisdictions where we conduct operations. These jurisdictions may have regimes of taxation that vary in both nominal rates and the basis on which these rates are applied. Our consolidated effective income tax rate can vary from period to period due to these variations, changes in jurisdictional mix of our income, and valuation allowances.

NOTE 20 – CONTINGENCIES

Litigation Relating to Boiler Installation and Supply Contract

On December 27, 2019, a complaint was filed against Babcock & Wilcox by P.H. Glatfelter Company (“Glatfelter”) in the United States District Court for the Middle District of Pennsylvania, Case No. 1:19-cv-02215-JPW, alleging claims of breach of contract, fraud, negligent misrepresentation, promissory estoppel and unjust enrichment (the “Glatfelter Litigation”). The complaint alleges damages in excess of $58.9 million. On March 16, 2020 we filed a motion to dismiss, and on December 14, 2020 the court issued its order dismissing the fraud and negligent misrepresentation claims and finding that, in the event that parties’ contract is ~~included~~found to be valid, Plaintiffs’ claims for damages will be subject to the contractual cap on liability (defined as the $11.7 million purchase price subject to certain adjustments). On January 11, 2021, we filed our answer and a counterclaim for breach of contract, seeking damages in ~~cost~~excess of ~~operations in~~$2.9 million. We intend to continue to vigorously litigate the action. However, given the preliminary stage of the litigation, it is too early to determine if the outcome of the Glatfelter Litigation will have a material adverse impact on our condensed consolidated ~~statement~~financial condition, results of operations ~~but it is not allocated to segment results.~~or cash flows.

SEC Investigation

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~~Estimated future intangible asset amortization expense, including the increase in amortization expense resulting from the January 11, 2017 acquisition of Universal, is as follows (in thousands):~~

Period ending Amortization expense
Three months ending December 31, 2017 $ 3,582
Twelve months ending December 31, 2018 $ 12,444
Twelve months ending December 31, 2019 $ 10,342
Twelve months ending December 31, 2020 $ 9,042
Twelve months ending December 31, 2021 $ 8,782
Twelve months ending December 31, 2022 $ 7,205
Thereafter $ 27,298

~~NOTE 13 – GOODWILL~~

The ~~following summarizes~~U.S. SEC is conducting a formal investigation of the ~~changes in~~Company, focusing on the ~~carrying amount of goodwill:~~

(in thousands) Power Renewable Industrial Total
Balance at December 31, 2016 $ 46,220
$ 48,435
$ 172,740
$ 267,395
Increase resulting from Universal acquisition —
—
14,413
14,413
Third quarter 2017 impairment charges^*
—
(49,965 ) (36,938 ) (86,903 )
Currency translation adjustments 1,180
1,530
6,490
9,200
Balance at September 30, 2017 $ 47,400
$ —
$ 156,705
$ 204,105

^* ~~Prior to September 30, 2017, we had not recorded any goodwill impairment charges.~~

Our annual goodwill impairment assessment is performed on October 1 of each year (the "annual assessment" date); however, events during 2017 have required two interim assessments of all six of our reporting units. Inaccounting charges and related matters involving the ~~second quarter of 2017, significant charges in our~~Company's B&W Renewable segment ~~was considered~~from 2015-2019. The SEC has served multiple subpoenas on the Company for documents. The Company is cooperating with the SEC related to ~~be a triggering event for~~ the ~~interim assessment as of June 30, 2017, which did not indicate impairment. In~~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 ~~third quarter of 2017, our market capitalization significantly decreased~~SEC may bring one or more claims against the Company and certain individuals. Due to ~~below our equity value, which was considered to be a trigger for a second interim assessment. Additionally,~~ the ~~forecast was reduced for our SPIG reporting unit based on a change in the market strategy implemented by the new segment management to focus on core geographies and products.~~

~~Assessing goodwill for impairment involves a two step test. Step 1~~stage of the test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step of the test is performedinvestigation, we are unable to ~~measure~~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 ~~impairment loss, if any. Step 2~~Company.

Stockholder Derivative and Class Action Litigation

On April 14, 2020, a putative B&W stockholder (“Plaintiff”) filed a derivative and class action complaint against certain of the ~~test compares~~Company’s directors (current and former), executives and significant stockholders (“Defendants”) and the ~~implied fair value~~Company (as a nominal defendant). The action was filed in the Delaware Court of Chancery and is captioned Parker v. Avril, et al., C.A. No. 2020-0280-PAF ("Stockholder Litigation"). Plaintiff alleges that Defendants, among other things, did not properly discharge their fiduciary duties in connection with the 2019 rights offering and related transactions. The case is currently in discovery. We believe that the outcome of the ~~reporting unit's goodwill with the carrying amount~~Stockholder Litigation will not have a material adverse impact on our condensed consolidated financial condition, results of ~~that goodwill, and impairment is measured as the excess~~operations or cash flows, net of the carrying value over the implied value of goodwill. Estimating the fair value of a reporting unit requires significant judgment. The fair value of each reporting unit determined under Step 1 of the goodwill impairment test was based on a 50% weighting of an income approach using a discounted cash flow analysis based on forward-looking projections of future operating results, a 30% to 40% weighting of a market approach using multiples of revenue and earnings before interest, taxes, depreciation and amortization ("EBITDA") of guideline companies and a 20% to 10% weighting of a market approach using multiples of revenue and EBITDA from recent, similar business combinations.any insurance coverage.

~~We primarily attributed the significant decline in our market capitalization in the third quarter of 2017~~Other

Due to the ~~announcement~~nature of ~~significant charges~~our business, we are, from time to time, involved in ~~the Renewable reporting unit. Accordingly,~~routine litigation or subject to disputes or claims related to our business activities, including, among other things: performance or warranty-related matters under our customer and supplier contracts and other business arrangements; and workers' compensation, premises liability and other claims. Based on our prior experience, we ~~increased the discount rate applied to future projected~~do not expect that any of these other litigation proceedings, disputes and claims will have a material adverse effect on our condensed consolidated financial condition, results of operations or cash flows from 15.0% at June 30, 2017 to 23.5% at September 30, 2017. As a result of the increase in the discount rate and an increase in the carrying value of the reporting unit, impairment was indicated at September 30, 2017, which measured $50.0 million ($48.9 million net of tax), the full carrying value. Other long-lived assets in the reporting unit were not impaired.

For our SPIG reporting unit, which is included in our Industrial segment, the Step 1 also indicated impairment. At June 30, 2017 and October 1, 2016, the fair value exceeded the carrying value by less than 1% and 5%, respectively. At September 30, 2017, the independently obtained fair value estimates decreased under both the income and market valuation approaches due

flows.

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to a short-term decrease in profitability attributable to specific current contracts and changes in SPIG's market strategy introduced by segment management during the third quarter. The discount rate applied to future projected cash flows was 14.0% and 12.5% at each of the September 30, 2017 and June 30, 2017 interim tests, respectively. Step 2 of the impairment test at September 30, 2017 measured $36.9 million of impairment (with no income tax impact). The SPIG reporting unit has $38.0 million of goodwill remaining after the impairment charge. Other long-lived assets in the reporting unit were not impaired.

For the remaining four reporting units where impairment was not indicated at September 30, 2017, the goodwill balances at September 30, 2017 and the Step 1 goodwill impairment test headroom (the estimated fair value less the carrying value) are as follows:

Power Segment Industrial Segment
(in millions) Power Construction MEGTEC Universal
Reporting unit headroom 60% 98% 12% 18%
Goodwill balance $38.5 $8.9 $104.3 $14.4

Step 1 of the impairment test for our MEGTEC reporting unit, which is included in our Industrial segment, did not indicate impairment, and the fair value exceeded the carrying value by 12% at September 30, 2017 compared to 3.0% at June 30, 2017 and 22% at October 1, 2016. Under both the income and market valuation approaches, the fair value estimates at the interim assessment data and the second interim assessment date decreased compared to the annual assessment date due to lower projected net sales and EBITDA. Similar to many industrial businesses, the reduction in MEGTEC reporting unit revenues has been the result of a decline in new equipment demand, primarily in the Americas; however, bookings trends have recently improved and backlog at September 30, 2017 is 67% higher than at the same date a year ago. The MEGTEC reporting unit recorded a 15% increase in revenues and a 16% increase in gross profit during the third quarter of 2017. The estimate of fair value of the MEGTEC reporting unit is sensitive to changes in assumptions, particularly assumed discount rates and projections of future operating results under the income approach. The discount rate applied to future projected cash flows was 12.5% and 11.0% at each of the September 30, 2017 and June 30, 2017 interim tests, respectively. Absent any other changes, an increase in the discount rate could result in future impairment of goodwill. Decreases in future projected operating results could also result in future impairment of goodwill.

~~NOTE 14 – PROPERTY, PLANT & EQUIPMENT~~

~~Property, plant and equipment is stated at cost. The composition of our property, plant and equipment less accumulated depreciation is set forth below:~~

(in thousands) September 30, 2017 December 31, 2016
Land $ 8,802
$ 6,348
Buildings 121,952
114,322
Machinery and equipment 206,437
189,489
Property under construction 14,218
22,378
351,409
332,537
Less accumulated depreciation 208,302
198,900
Net property, plant and equipment $ 143,107
$ 133,637

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~~NOTE 15 – WARRANTY EXPENSE~~

~~Changes in the carrying amount of our accrued warranty expense are as follows:~~

Nine months ended September 30,
(in thousands) 2017 2016
Balance at beginning of period $ 40,467
$ 39,847
Additions 17,818
18,300
Expirations and other changes (9,053 ) (2,945 )
Increases attributable to business combinations 1,060
901
Payments (11,126 ) (10,922 )
Translation and other 2,064
(217 )
Balance at end of period $ 41,230
$ 44,964

During the nine months ended September 30, 2017 and 2016, our Power segment reduced its accrued warranty expense by $4.7 million and $2.2 million, respectively, to reflect the expiration of warranties, and updated its estimated warranty accrual rate to reflect its warranty claims experience and current contractual warranty obligations, which reduced the accrued warranty expense by $4.1 million in the nine months ended September 30, 2017. Additions to the warranty accrual include specific provisions on industrial steam projects totaling $7.1 million and $2.1 million during the nine months ended September 30, 2017 and 2016, respectively.

NOTE 1621 – ~~PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS~~COMPREHENSIVE INCOME

~~Components of net periodic benefit cost (benefit) included~~Gains and losses deferred in ~~net~~accumulated other comprehensive income (loss) ("AOCI") are generally reclassified and recognized in the Condensed Consolidated Statements of Operations once they are realized. The changes in the components of AOCI, net of tax, for the first two quarters of 2021 and 2020 were as follows:


(in thousands)	Currency translation loss		Net unrecognized loss related to benefit plans (net of tax)		Total
Balance at December 31, 2020	$	(47,575)	$	(4,815)	$	(52,390)
Other comprehensive loss before reclassifications	(70)		0		(70)
Reclassified from AOCI to net income (loss)	(4,512)		198		(4,314)
Net other comprehensive (loss) income	(4,582)		198		(4,384)
Balance at March 31, 2021	$	(52,157)	$	(4,617)	$	(56,774)
Other comprehensive loss before reclassifications	(1,478)		0		(1,478)
Reclassified from AOCI to net income	0		198		198
Net other comprehensive (loss) income	(1,478)		198		(1,280)
Balance at June 30, 2021	$	(53,635)	$	(4,419)	$	(58,054)

Pension benefits Other benefits
Three months ended September 30, Nine months ended September 30, Three months ended September 30, Nine months ended September 30,
(in thousands) 2017 2016 2017 2016 2017 2016 2017 2016
Service cost $ 227
$ 548
$ 756
$ 1,137
$ 3
$ 6
$ 11
$ 18
Interest cost 10,369
10,086
30,905
30,890
(106 ) 206
255
629
Expected return on plan assets (14,936 ) (15,925 ) (44,646 ) (46,107 ) —
—
—
—
Amortization of prior service cost 29
81
80
335
(561 ) —
(2,277 ) —
Recognized net actuarial loss —
645
1,062
30,545
—
—
—
—
Net periodic benefit cost (benefit) $ (4,311 ) $ (4,565 ) $ (11,843 ) $ 16,800
$ (664 ) $ 212
$ (2,011 ) $ 647


(in thousands)	Currency translation gain		Net unrecognized loss related to benefit plans (net of tax)		Total
Balance at December 31, 2019	$	5,743	$	(3,817)	$	1,926
Other comprehensive income before reclassifications	2,380		0		2,380
Reclassified from AOCI to net loss	0		(246)		(246)
Net other comprehensive income (loss)	2,380		(246)		2,134
Balance at March 31, 2020	$	8,123	$	(4,063)	$	4,060
Other comprehensive loss before reclassifications	(4,095)		0		(4,095)
Reclassified from AOCI to net loss	0		(246)		(246)
Net other comprehensive loss	(4,095)		(246)		(4,341)
Balance at June 30, 2020	$	4,028	$	(4,309)	$	(281)

During the first quarter of 2017, lump sum payments from our Canadian pension plan resulted in a plan settlement of $0.4 million, which also resulted in interim mark to market accounting for the pension plan. The mark to market adjustment in the first quarter of 2017 was $0.7 million. The effect of these charges and mark to market adjustments are reflected in the $1.1 million "Recognized net actuarial loss" for the nine months ended September 30, 2017 in the table above. There were no significant plan settlements or interim mark to market adjustments during the second or third quarters of 2017.

During the second and third quarters of 2016, we recorded adjustments to our benefit plan liabilities resulting from certain curtailment and settlement events. In September 2016, lump sum payments from our Canadian pension plan resulted in a $0.1 million pension plan settlement charge. In May 2016, the closure of our West Point, Mississippi manufacturing facility resulted in a $1.8 million curtailment charge in our United States pension plan. In April 2016, lump sum payments from our Canadian pension plan resulted in a $1.1 million plan settlement charge. These events resulted in interim mark to market accounting for the respective benefit plans in 2016. Mark to market charges in the three months ended September 30, 2016 were $0.5 million in our Canadian pension plan. Mark to market charges for our United States and Canadian pension plans were $27.5 million in the nine months ended September 30, 2016. The pension mark to market charges were impacted by higher than expected returns on pension plan assets. The weighted-average discount rate used to remeasure the benefit plan liabilities at September 30, 2016 was 3.88%. The effect of these charges and mark to market adjustments are reflected in the 2016 "Recognized net actuarial loss" in the table above.

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~~We have excluded the recognized net actuarial loss from our reportable segments and such amount has been reflected in~~ ~~Note 3~~ ~~as the mark to market adjustment in the reconciliation of reportable segment income (loss) to consolidated operating losses. The recognized net actuarial loss during the~~ ~~three and nine~~ ~~months ended September 30, 2017 and 2016 was recorded in our condensed consolidated statements of operations in the following line items:~~

Pension benefits
Three months ended September 30, Nine months ended September 30,
(in thousands) 2017 2016 2017 2016
Cost of operations $ —
$ 580
$ 954
$ 30,079
Selling, general and administrative expenses —
64
106
465
Other —
—
2
—
Total $ —
$ 644
$ 1,062
$ 30,544

We made contributions to our pension and other postretirement benefit plans totaling $9.8 million and $16.2 million during the three and nine months ended September 30, 2017, respectively, as compared to $1.8 million and $4.4 million during the three and nine months ended September 30, 2016, respectively.

~~See Note 23 for the future expected effect of FASB ASU 2017-07 on the presentation of benefit and expense related to our pension and post retirement plans.~~

~~NOTE 17 – REVOLVING DEBT~~

The ~~components~~amounts reclassified out of ~~our revolving debt are comprised of separate revolving credit facilities in the following locations:~~

(in thousands) September 30, 2017 December 31, 2016
United States $ 58,900
$ 9,800
Foreign 12,398
14,241
Total revolving debt $ 71,298
$ 24,041

~~United States revolving credit facility~~

On May 11, 2015, we entered into a credit agreement with a syndicate of lenders ("Credit Agreement") in connection with our spin-off from The Babcock & Wilcox Company. The Credit Agreement, which is scheduled to mature on June 30, 2020, provides for a senior secured revolving credit facility, initially in an aggregate amount of up to $600.0 million. The proceeds from loans under the Credit Agreement are available for working capital needs and other general corporate purposes,AOCI by component and the ~~full amount is available to support the issuance~~affected Condensed Consolidated Statements of ~~letters of credit.~~

On February 24, 2017 and August 9, 2017, we entered into amendments to the Credit Agreement (the “Amendments” and the Credit Agreement, as amended to date, the “Amended Credit Agreement”) to, among other things: (1) permit us to incur the debt under the second lien term loan facility (discussed further in Note 18), (2) modify the definition of EBITDA in the Amended Credit Agreement to exclude: up to $98.1 million of charges for certain Renewable segment contracts for periods including the quarter ended December 31, 2016, up to $115.2 million of charges for certain Renewable segment contracts for periods including the quarter ended June 30, 2017, up to $4.0 million of aggregate restructuring expenses incurred during the period from July 1, 2017 through September 30, 2018 measured on a consecutive four-quarter basis, realized and unrealized foreign exchange losses resulting from the impact of foreign currency changes on the valuation of assets and liabilities, and fees and expenses incurred in connection with the August 9, 2017 amendment, (3) replace the maximum leverage ratio with a maximum senior debt leverage ratio, (4) decrease the minimum consolidated interest coverage ratio, (5) limit our ability to borrow under the Amended Credit Agreement during the covenant relief period to $250.0 million in the aggregate, (6) reduce commitments under the revolving credit facility from $600.0 million to $500.0 million, (7) require us to maintain liquidity (as defined in the Amended Credit Agreement) of at least $75.0 million as of the last business day of any calendar month, (8) require us to repay outstanding borrowings under the revolving credit facility (without any reduction in commitments) with certain excess cash, (9) increase the pricing for borrowings and commitment fees under the Amended Credit Agreement, (10) limit our ability to incur debt and liens during the covenant relief period, (11) limit our ability to make acquisitions and investments in third parties during the covenant relief period, (12) prohibit us from paying dividends and undertaking stock

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repurchases during the covenant relief period (other than our share repurchase from an affiliate of AIP (discussed further in Note 18)), (13) prohibit us from exercising the accordion described below during the covenant relief period, (14) limit our financial and commercial letters of credit outstanding under the Amended Credit Agreement to $30.0 million during the covenant relief period, (15) require us to reduce commitments under the Amended Credit Agreement with the proceeds of certain debt issuances and asset sales, (16) beginning with the quarter ended September 30, 2017, limit to no more than $25.0 million any cumulative net income losses attributable to certain Vølund projects, and (17) increase reporting obligations and require us to hire a third-party consultant. The covenant relief period will end, at our election, when the conditions set forth in the Amended Credit AgreementOperations line items are ~~satisfied, but in no event earlier than the date on which we provide the compliance certificate for our fiscal quarter ending December 31, 2018.~~

Other than during the covenant relief period, the Amended Credit Agreement contains an accordion feature that allows us, subject to the satisfaction of certain conditions, including the receipt of increased commitments from existing lenders or new commitments from new lenders, to increase the amount of the commitments under the revolving credit facility in an aggregate amount not to exceed the sum of (1) $200.0 million plus (2) an unlimited amount, so long as for any commitment increase under this subclause (2) our senior leverage ratio (assuming the full amount of any commitment increase under this subclause (2) is drawn) is equal to or less than 2.00:1.0 after giving pro forma effect thereto. During the covenant relief period, our ability to exercise the accordion feature will be prohibited.

The Amended Credit Agreement and our obligations under certain hedging agreements and cash management agreements with our lenders and their affiliates are (1) guaranteed by substantially all of our wholly owned domestic subsidiaries, but excluding our captive insurance subsidiary, and (2) secured by first-priority liens on certain assets owned by us and the guarantors. The Amended Credit Agreement requires interest payments on revolving loans on a periodic basis until maturity. We may prepay all loans at any time without premium or penalty (other than customary LIBOR breakage costs), subject to notice requirements. The Amended Credit Agreement requires us to make certain prepayments on any outstanding revolving loans after receipt of cash proceeds from certain asset sales or other events, subject to certain exceptions and a right to reinvest such proceeds in certain circumstances. During the covenant relief period, such prepayments may require us to reduce the commitments under the Amended Credit Agreement by a corresponding amount of such prepayments. Following the covenant relief period, such prepayments will not require us to reduce the commitments under the Amended Credit Agreement.

After giving effect to Amendments, loans outstanding under the Amended Credit Agreement bear interest at our option at either (1) the LIBOR rate plus 5.0% per annum or (2) the base rate (the highest of the Federal Funds rate plus 0.5%, the one month LIBOR rate plus 1.0%, or the administrative agent's prime rate) plus 4.0% per annum. Interest expense associated with our United States revolving credit facility loans for the three and nine months ended September 30, 2017 was $3.3 million and $7.0 million, respectively. Included in interest expense was $1.3 million and $2.1 million of non-cash amortization of direct financing costs for the three and nine months ended September 30, 2017, respectively. A commitment fee of 1.0% per annum is charged on the unused portions of the revolving credit facility. A letter of credit fee of 2.50% per annum is charged with respect to the amount of each financial letter of credit outstanding, and a letter of credit fee of 1.50% per annum is charged with respect to the amount of each performance and commercial letter of credit outstanding. Additionally, an annual facility fee of $1.5 million is payable on the first business day of 2018 and 2019, and a pro rated amount is payable on the first business day of 2020.

The Amended Credit Agreement includes financial covenants that are tested on a quarterly basis, based on the rolling four-quarter period that ends on the last day of each fiscal quarter. The maximum permitted senior debt leverage ratio as defined in the Amended Credit Agreement is:

~~6.00:1.0 for the quarter ended September 30, 2017,~~

~~8.50:1.0 for each of the quarters ending December 31, 2017 and March 31, 2018,~~

~~6.25:1.0 for the quarter ending June 30, 2018,~~

~~4.00:1.0 for the quarter ending September 30, 2018,~~

~~3.75:1.0 for the quarter ending December 31, 2018,~~

~~3.25:1.0 for each of the quarters ending March 31, 2019 and June 30, 2019, and~~

~~3.00:1.0 for each of the quarters ending September 30, 2019 and each quarter thereafter.~~

~~The minimum consolidated interest coverage ratio as defined in the Credit Agreement is:~~

~~1.50:1.0 for the quarter ended September 30, 2017,~~

~~1.00:1.0 for each of the quarters ending December 31, 2017 and March 31, 2018,~~

~~1.25:1.0 for the quarter ending June 30, 2018,~~

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~~1.50:1.0 for each of the quarters ending September 30, 2018 and December 31, 2018,~~

~~1.75:1.0 for each of the quarters ending March 31, 2019 and June 30, 2019, and~~

~~2.00:1.0 for each of the quarters ending September 30, 2019 and each quarter thereafter.~~

~~Beginning with September 30, 2017, consolidated capital expenditures in each fiscal year are limited to $27.5 million.~~

At September 30, 2017, usage under the Amended Credit Agreement consisted of $58.9 million in borrowings at an effective interest rate of 6.88%, $7.7 million of financial letters of credit and $87.2 million of performance letters of credit. At September 30, 2017, we had $94.7 million available for borrowings or to meet letter of credit requirements primarily based on trailing 12 month EBITDA, and our leverage (as defined in the Amended Credit Agreement) ratio was 3.00 and our interest coverage ratio was 2.59. In addition, through September 30, 2017, we have used $11.6 million of the $25.0 million of permitted net income losses attributable to our Vølund projects. At September 30, 2017, we were in compliance with all of the covenants set forth in the Amended Credit Agreement.

~~Foreign revolving credit facilities~~

Outside of the United States, we have revolving credit facilities in Turkey, China and India that are used to provide working capital to our operations in each country. These three foreign revolving credit facilities allow us to borrow up to $14.8 million in aggregate and each have a one year term. At September 30, 2017, we had $12.4 million in borrowings outstanding under these foreign revolving credit facilities at an effective weighted-average interest rate of 5.17%.

~~Other credit arrangements~~

Certain subsidiaries have credit arrangements with various commercial banks and other financial institutions for the issuance of letters of credit and bank guarantees in associated with contracting activity. The aggregate value of all such letters of credit and bank guarantees not secured by the United States revolving credit facility as of September 30, 2017 and December 31, 2016 was $279.1 million and $255.2 million, respectively.

We have posted surety bonds to support contractual obligations to customers relating to certain projects. We utilize bonding facilities to support such obligations, but the issuance of bonds under those facilities is typically at the surety's discretion. Although there can be no assurance that we will maintain our surety bonding capacity, we believe our current capacity is adequate to support our existing project requirements for the next 12 months. In addition, these bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds those underwriters issue in support of some of our contracting activity. As of September 30, 2017, bonds issued and outstanding under these arrangements in support of contracts totaled approximately $472.3 million.

~~NOTE 18 – SECOND LIEN TERM LOAN FACILITY~~

On August 9, 2017, we entered into a second lien credit agreement (the "Second Lien Credit Agreement") with an affiliate of American Industrial Partners ("AIP"), governing a second lien term loan facility. The second lien term loan facility consists of a second lien term loan in the principal amount of $175.9 million, all of which was borrowed on August 9, 2017, and a delayed draw term loan facility in the principal amount of up to $20.0 million, which may be drawn in a single draw prior to June 30, 2020, subject to certain conditions. Through September 30, 2017, we have not utilized the delayed draw term loan facility.

Borrowings under the second lien term loan, other than the delayed draw term loan, have a coupon interest rate of 10% per annum, and borrowings under the delayed draw term loan have a coupon interest rate of 12% per annum, in each case payable quarterly. Undrawn amounts under the delayed draw term loan accrue a commitment fee at a rate of 0.50%, which was paid at closing. The second lien term loan and any borrowings we may make under the delayed draw term loan have a scheduled maturity of December 30, 2020.

In connection with our entry into the second lien term loan facility, we used $50.9 million of the proceeds to repurchase approximately 4.8 million shares of our common stock (approximately 10% of our shares outstanding) held by an affiliate of AIP, which was one of the conditions precedent for the second lien term loan facility. Based on observable and unobservable market data, we determined the fair value of the shares we repurchased from the related party on August 9, 2017 was $16.7 million. We utilized a discounted cash flow model and estimates of our weighted average cost of capital on the transaction

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date to derive the estimated fair value of the share repurchase. The $34.2 million difference between the share repurchase price and the fair value of the repurchased shares was recorded as a discount on the second lien term facility borrowing. Non-cash amortization of the debt discount and direct financing costs will be accreted to the carrying value of the loan through interest expense over the term of the second lien term loan facility utilizing the effective interest method and an effective interest rate of 18.64%.

~~The carrying value of the second lien term loan facility at September 30, 2017 was~~ as follows (in thousands):


AOCI component	Line items in the Condensed Consolidated Statements of Operations affected by reclassifications from AOCI	Three months ended June 30,				Six months ended June 30,
		2021		2020		2021		2020
Release of currency translation adjustment with the sale of business	Loss on sale of business	$	0	$	0	$	4,512	$	0
Amortization of prior service cost on benefit obligations	Benefit plans, net	(198)		246		(396)		492
	Net (loss) income	$	(198)	$	246	$	4,116	$	492

Face value
Unamortized debt discount
and direct financing costs
Net carrying value
$175,884 $37,500 $138,384

~~Interest expense associated with our second lien credit agreement is comprised of the following:~~

(in thousands)
Actual for the period
August 9, 2017 through
September 30, 2017

Forecasted for the period
October 1, 2017 through
December 31, 2017
Forecasted for the period
January 1, 2018 through
December 31, 2018
Coupon interest (10%) $2,554 $4,433 $17,588
Amortization of financing costs and discount $1,095 $2,119 $9,678
Total interest expense $3,649 $6,552 $27,266

Borrowings under the Second Lien Credit Agreement are (1) guaranteed by substantially all of our wholly owned domestic subsidiaries, but excluding our captive insurance subsidiary, and (2) secured by second-priority liens on certain assets owned by us and the guarantors. The Second Lien Credit Agreement requires interest payments on loans on a quarterly basis until maturity. Voluntary prepayments made during the first year after closing are subject to a make-whole premium, voluntary prepayments made during the second year after closing are subject to a 3.0% premium and voluntary prepayments made during the third year after closing are subject to a 2.0% premium. The Second Lien Credit Agreement requires us to make certain prepayments on any outstanding loans after receipt of cash proceeds from certain asset sales or other events, subject to certain exceptions and a right to reinvest such proceeds in certain circumstances, and subject to certain restrictions contained in an intercreditor agreement among the lenders under the Amended Credit Agreement and the Second Lien Credit Agreement.

The Second Lien Credit Agreement contains representations and warranties, affirmative and restrictive covenants, financial covenants and events of default substantially similar to those contained in the Amended Credit Agreement, subject to appropriate cushions. The Second Lien Credit Agreement is generally less restrictive than the Amended Credit Agreement.

~~NOTE 19 – CONTINGENCIES~~

~~ARPA litigation~~

On February 28, 2014, the Arkansas River Power Authority ("ARPA") filed suit against Babcock & Wilcox Power Generation Group, Inc. (now known as The Babcock & Wilcox Company and referred to herein as “BW PGG”) in the United States District Court for the District of Colorado (Case No. 14-cv-00638-CMA-NYW) alleging breach of contract, negligence, fraud and other claims arising out of BW PGG's delivery of a circulating fluidized bed boiler and related equipment used in the Lamar Repowering Project pursuant to a 2005 contract.

A jury trial took place in mid-November 2016. Some of ARPA’s claims were dismissed by the judge during the trial. The jury’s verdict on the remaining claims was rendered on November 21, 2016. The jury found in favor of B&W with respect to ARPA’s claims of fraudulent concealment and negligent misrepresentation and on one of ARPA’s claims of breach of contract. The jury found in favor of ARPA on the three remaining claims for breach of contract and awarded damages totaling $4.2 million, which exceeded the previous $2.3 million accrual we established in 2012 by $1.9 million. We increased our accrual by $1.9 million in the fourth quarter of 2016. At September 30, 2017 and December 31, 2016, $4.2 million was included in other accrued liabilities in our consolidated balance sheet, and we have posted a bond pending resolution of post-trial matters.

ARPA also requested that pre-judgment interest of $4.1 million plus post-judgment interest at a rate of 0.77% compounded annually be added to the judgment, together with certain litigation costs. The court granted ARPA $3.7 million of pre-

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judgment interest on July 21, 2017, which we recorded in our June 30, 2017 condensed consolidated financial statements in other accrued liabilities and interest expense. B&W commenced an appeal of the judgment on August 18, 2017, and ARPA filed a notice of cross appeal on August 31, 2017.

~~Stockholder litigation~~

On March 3, 2017 and March 13, 2017, the Company and certain of its officers were named as defendants in two separate but largely identical complaints alleging violations of the federal securities laws. The complaints were brought on behalf of a putative class of investors who purchased the Company's common stock between July 1, 2015 and February 28, 2017 and were filed in the United States District Court for the Western District of North Carolina (collectively, the "Stockholder Litigation"). During the second quarter of 2017, the Stockholder Litigation was consolidated into a single action and a lead plaintiff was selected by the Court. During the third quarter of 2017, the plaintiff further amended its complaint. As amended, the complaint now purports to cover investors who purchased shares between June 17, 2015 and August 9, 2017.

The plaintiff in the Stockholder Litigation alleges fraud, misrepresentation and a course of conduct relating to the facts surrounding certain projects underway in the Company's Renewable segment, which, according to the plaintiff, had the effect of artificially inflating the price of the Company's common stock. The plaintiff further alleges that stockholders were harmed when the Company disclosed on February 28, 2017 and August 9, 2017 that it would incur losses on these projects. The plaintiff seeks an unspecified amount of damages.

We believe the allegations in the Stockholder Litigation are without merit, and 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.

~~Other~~

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: performance or warranty-related matters under our customer and supplier contracts and other business arrangements; and workers' compensation, premises liability and other claims. Based on our prior experience, we do not expect that any of these other litigation proceedings, disputes and claims will have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

~~NOTE 20 – DERIVATIVE FINANCIAL INSTRUMENTS~~

Our foreign currency exchange ("FX") forward contracts that qualify for hedge accounting are designated as cash flow hedges. The hedged risk is the risk of changes in functional-currency-equivalent cash flows attributable to changes in FX spot rates of forecasted transactions related to long-term contracts. We exclude from our assessment of effectiveness the portion of the fair value of the FX forward contracts attributable to the difference between FX spot rates and FX forward rates. At September 30, 2017 and 2016, we had deferred approximately $2.5 million and $3.4 million, respectively, of net gains on these derivative financial instruments in accumulated other comprehensive income ("AOCI").

At September 30, 2017, our derivative financial instruments consisted solely of FX forward contracts. The notional value of our FX forward contracts totaled $121.2 million at September 30, 2017 with maturities extending to November 2019. These instruments consist primarily of contracts to purchase or sell euros and British pounds sterling. We are exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments. We attempt to mitigate this risk by using major financial institutions with high credit ratings. The counterparties to all of our FX forward contracts are financial institutions party to our United States revolving credit facility. Our hedge counterparties have the benefit of the same collateral arrangements and covenants as described under our United States revolving credit facility. During the third quarter of 2017, our hedge counterparties removed the lines of credit supporting new FX forward contracts. Subsequently, we have not entered into any new FX forward contracts.

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~~The following tables summarize our derivative financial instruments:~~

Asset and Liability Derivative
(in thousands) September 30, 2017 December 31, 2016
Derivatives designated as hedges:
Foreign exchange contracts:
Location of FX forward contracts designated as hedges:
Accounts receivable-other $ 1,694
$ 3,805
Other assets 750
665
Accounts payable 542
1,012
Other liabilities 183
213

Derivatives not designated as hedges:
Foreign exchange contracts:
Location of FX forward contracts not designated as hedges:
Accounts receivable-other $ 1,238
$ 105
Accounts payable 2,594
403
Other liabilities 8
7

~~The effects of derivatives on our financial statements are outlined below:~~

Three months ended September 30, Nine months ended September 30,
(in thousands) 2017 2016 2017 2016
Derivatives designated as hedges:
Cash flow hedges
Foreign exchange contracts
Amount of gain (loss) recognized in other comprehensive income $ 398
$ 1,419
$ 2,642
5,476
Effective portion of gain (loss) reclassified from AOCI into earnings by location:
Revenues 2,092
1,940
8,094
4,524
Cost of operations 159
24
113
57
Other-net (7,930 ) (445 ) (7,438 ) (1,065 )
Portion of gain (loss) recognized in income that is excluded from effectiveness testing by location:
Other-net (7,005 ) 1,607
(10,524 ) 3.408

Derivatives not designated as hedges:
Forward contracts
Loss recognized in income by location:
Other-net $ (1,364 ) $ (154 ) $ (1,709 ) $ (567 )

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NOTE 2122 – FAIR VALUE MEASUREMENTS

The following tables summarize our financial assets and liabilities carried at fair value, all of which were valued from readily available prices or using inputs based upon quoted prices for similar instruments in active markets (known as "Level 1" and "Level 2" inputs, respectively, in the fair value hierarchy established by the FASB Topic, Fair Value Measurements and Disclosures).


(in thousands)
Available-for-sale securities	June 30, 2021		Level 1		Level 2
Corporate notes and bonds	$	7,919	$	7,919	$	0
Mutual funds	678		0		678
United States Government and agency securities	5,144		5,144		0
Total fair value of available-for-sale securities	$	13,741	$	13,063	$	678

(in thousands)
Available-for-sale securities September 30, 2017 Level 1 Level 2 Level 3
Commercial paper $ 5,394
$ —
$ 5,394
$ —
Mutual funds 1,286
—
1,286
—
U.S. Government and agency securities 7,243
7,243
—
—
Total fair value of available-for-sale securities $ 13,923
$ 7,243
$ 6,680
$ —


(in thousands)
Available-for-sale securities	December 31, 2020		Level 1		Level 2
Corporate notes and bonds	$	6,139	$	6,139	$	0
Mutual funds	636		0		636
Corporate Stocks	4,168		4,168		0
United States Government and agency securities	4,365		4,365		0
Total fair value of available-for-sale securities	$	15,308	$	14,672	$	636

(in thousands)
Available-for-sale securities December 31, 2016 Level 1 Level 2 Level 3
Commercial paper $ 6,734
$ —
$ 6,734
$ —
Certificates of deposit 2,251
—
2,251
—
Mutual funds 1,152
—
1,152
—
Corporate bonds 750
750
—
—
U.S. Government and agency securities 7,104
7,104
—
—
Total fair value of available-for-sale securities $ 17,991
$ 7,854
$ 10,137
$ —
Available-For-Sale Securities

Derivatives September 30, 2017 December 31, 2016
Forward contracts to purchase/sell foreign currencies $ 355 $ 2,940

~~Available-for-sale securities~~

~~We estimate the fair value of available-for-sale securities based on quoted market prices.~~ Our investments in available-for-sale securities are presented in ~~"other assets"~~other assets on our ~~condensed consolidated balance sheets.~~Condensed Consolidated Balance Sheets with contractual maturities ranging from 0-5 years.

~~Derivatives~~Senior Notes

~~Derivative assets and liabilities currently consist~~See Note 13 above for a discussion of ~~FX forward contracts. Where applicable, the~~our recent offerings of Senior Notes. The fair value of ~~these derivative assets and liabilities~~the Senior Notes is computed by discounting the projected future cash flow amounts to present value using market-based observable inputs, including FX forward and spot rates, interest rates and counterparty performance risk adjustments.based on readily available quoted market prices as of June 30, 2021.


(in thousands)	June 30, 2021
Senior Notes	Carrying Value		Estimated Fair Value
8.125% Senior Notes due 2026 ('BWSN')	$	172,882	$	179,105

Other ~~financial instruments~~Financial Instruments

We used the following methods and assumptions in estimating our fair value disclosures for our other financial instruments:

•Cash and cash equivalents and restricted cash and cash equivalents. The carrying amounts that we have reported in the accompanying ~~condensed consolidated balance sheets~~Condensed Consolidated Balance Sheets for cash and cash equivalents and restricted cash and cash equivalents approximate their fair values due to their highly liquid nature.

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condensed consolidated financial statements, the difference between the price paid for the shares and the estimated fair value of the shares repurchased was treated as a debt discount together with the direct financing costs.

We had approximately $94.7 million of availability under our United States revolving credit facility as of September 30, 2017. Based on the amended United States revolving credit and second lien term loan facilities, we believe we have adequate sources of liquidity at September 30, 2017 to meet our cash requirements. Our assessment is based on our operating forecast, backlog, cash on-hand, borrowing capacity, planned capital investments and ability to manage future discretionary cash outflows during the next 12 month period. We expect our operations to use cash over the full year of 2017 and into the first half of 2018, particularly in the Renewable segment, as we fund contract losses and work down advanced bill positions. Our forecasted use of cash over the next 12 months is expected to be funded in part through borrowings from our United States revolving credit facility. Our United States revolving credit facility 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. After giving effect to the $50.0 million of unrestricted cash on hand required under our financial covenants, we expect to have between $73.0 million and $173.0 million of available borrowing capacity from our United States revolving credit facility during the next 12 months based on our forecast of the trailing 12 month EBITDA calculation and forecasted borrowings. We expect cash and cash equivalents, cash flows from operations, and our borrowing capacity under our United States revolving credit facility and second lien term loan facility to be sufficient to meet our liquidity needs for at least 12 months from the date of this filing.

~~Our net cash~~Cash used in operations was ~~$150.8~~$86.1 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017, compared to cash used in operations of $39.8 million~~2021, which is primarily represented in the ~~nine months ended September 30, 2016. The~~$40.3 million change ~~is partially attributable to the $228.3~~in pension, postretirement and employee benefit liabilities and a $45.7 million ~~increase in our~~ net loss in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. Also, a $13.0 million net decrease in cash outflows associated with changes in accounts receivable, contracts in progress and advanced billings in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016 resulted primarily from the timing of billings and stage of completion of large, ongoing contracts in our Renewable segment. Generally, we try to structure contract milestones to mirror our expected cash outflows over the course of the contract; however, the timing of milestone receipts can greatly affect our overall cash position. Our portfolio of Renewable energy contracts at both September 30, 2017 and December 31, 2016 included milestone payments from our customers in advance of incurring the contract expenses, and as a result we are in an advance bill position on most of these contracts at both dates. Because of the advanced bill positions, combined with the increase in expected costs to complete the Renewable loss contracts, we expect the use of cash by the Renewable segment to continue during 2017 and into the first half of 2018 until these contracts are completed. Partially offsetting these operating cash outflows was a $25.6 million decrease in operating cash outflows associated with changes in ~~contract related accounts payable and accrued liabilities in~~working capital. In the ~~nine~~six months ended ~~September~~June 30, ~~2017 compared to the nine months ended September 30, 2016.~~

~~Our net~~2020, cash used in operations was $49.3 million primarily represented in the net loss before depreciation and amortization. There also was a $0.9 million net increase in operating cash outflows associated with changes in working capital.

Cash flows from investing activities ~~was $57.9~~provided net cash of $6.6 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021, primarily related to proceeds from the sale of business and ~~$191.6~~assets and net change in available-for-sale securities, offset by $2.2 million of capital expenditures. In the six months ended June 30, 2020, cash flows from investing activities provided net cash of $4.3 million, primarily related to $8.0 million from the settlement of remaining escrows associated with the sale of Palm Beach Resource Recovery Corporation and MEGTEC and Universal businesses, offset by the net change in available-for-sale securities and $1.7 million of capital expenditures.

Cash flows from financing activities provided net cash of $151.3 million in the ~~nine~~six months ended ~~September~~June 30, ~~2016. The~~2021, primarily related to the issuance of Senior Notes, Preferred Stock and common stock offset by $75.4 million Last Out Term Loans repayments, a $164.3 million net reduction on the prior U.S. Revolving Credit Facility and $10.9 million of financing fees. Cash flows from financing activities provided net cash ~~used in investing activities was primarily attributable to the $52.5 million acquisition~~ of Universal on January 11, 2017, net of $4.4 million cash acquired in the business combination (see Note 4 to the condensed consolidated financial statements). The net cash used in investing activities in the nine months ended September 30, 2016 included $143.0 million acquisition of SPIG, net of $26.0 million cash acquired, and a $26.2 million contribution to increase our interest in TBWES, our joint venture in India. Capital expenditures were $10.7 million and $20.4$35.7 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016, respectively.~~

~~Our net cash provided~~2020, primarily related to $60.0 million face value borrowings from the Last Out Term Loans offset by ~~financing activities was $155.5~~$14.3 million in the nine months ended September 30, 2017, compared to $64.6 million of cash used in the nine months ended September 30, 2016. The cash provided by financing activities in the nine months ended September 30, 2017 was a result of net borrowings from ~~our United States revolving credit facility~~the prior U.S. Revolving Credit Facility and $10.4 million of ~~$49.1 million, which were used to fund our working capital needs~~financing fees.

Debt Facilities

As described above and ~~the Universal acquisition. In addition, cash provided by financing activities~~ in the ~~nine months ended September~~Notes to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report, on June 30, ~~2017 included proceeds from~~2021, we entered into the ~~issuance~~Debt Facilities, including the Revolving Credit Agreement. The obligations of the ~~second lien term loan~~Company under each of ~~$141.7 million, which were used to repurchase $16.7 million~~the Debt Facilities are guaranteed by certain existing and future domestic and foreign subsidiaries of ~~shares from~~the Company. B. Riley Financial, Inc. (“B. Riley”), a related party, ~~fund debt issuance costs~~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 ~~repay a portion~~letter of credit availability under the Debt Facilities for working capital purposes and general corporate purposes, including to backstop certain letters of credit issued under our United States revolving credit facility. The net cash used in financing activities in the nine months ended September 30, 2016 is primarily attributable to repurchases of $78.4 million of our common stock.

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~~United States revolving credit facility~~

~~On May 11, 2015, we entered into a credit agreement with a syndicate of lenders ("Credit Agreement") in connection with our spin-off from The Babcock & Wilcox Company. The~~previous A&R Credit Agreement, for which ~~is scheduled to mature~~commitments were terminated, all loans were repaid and ll outstanding and undrawn letters of credit were collateralized on June 30, ~~2020, provides for a senior secured revolving credit facility, initially in an aggregate amount of up to $600 million. The proceeds of loans under~~2021.

Last Out Term Loans

Effective with the ~~Credit Agreement are available for working capital needs and other general corporate purposes, and~~new debt facilities the ~~full amount is available to support the issuance of letters of credit.~~

~~On February 24, 2017 and August 9, 2017, we~~Company entered into ~~amendments~~on June 30, 2021, as described in Note 15 to the ~~Credit Agreement (the “Amendments”~~Condensed Consolidated Financial Statements included in Part I, Item 1 of the Quarterly Report, the Company has no remaining Last Out Term Loans and ~~the Credit Agreement, as amended to date, the “Amended Credit Agreement”) to, among other things: (1) permit us to incur the~~no further borrowings thereunder are available.

The Company recognized a loss on debt ~~under the second lien term loan facility, (2) modify the definition~~extinguishment of ~~EBITDA~~$6.2 million in the Amended Credit Agreement to exclude: up to $98.1 million of charges for certain Renewable segment contracts for periods including the quarter ended December 31, 2016, up to $115.2 million of charges for certain Renewable segment contracts for periods including the quarter ended June 30, ~~2017, up to $4.0 million~~2020, primarily representing the unamortized value of ~~aggregate restructuring expenses incurred during~~ the ~~period from July 1, 2017 through September 30, 2018 measured on a consecutive four-quarter basis, realized~~original issuance discount and ~~unrealized foreign exchange losses resulting from the impact of foreign currency changes~~fees on the ~~valuation~~Tranche A-3 Last Out Term Loan.

See Note 14 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of ~~assets and liabilities, and fees and expenses incurred in connection with~~ the ~~August 9, 2017 amendment, (3) replace~~Quarterly Report for additional information on our Last Out Term Loans.

A&R Credit Agreement

As described above, the ~~maximum leverage ratio with a maximum senior debt leverage ratio, (4) decrease the minimum consolidated interest coverage ratio, (5) limit our ability to borrow under the Amended~~A&R Credit Agreement ~~during the covenant relief period to $250.0~~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 aggregate, (6) reduce commitments under the revolving credit facility from $600.0 million to $500.0 million, (7) require us to maintain liquidity (as defined in the Amended Credit Agreement) of at least $75.0 million as of the last business day of any calendar month, (8) require us to repay outstanding borrowings under the revolving credit facility (without any reduction in commitments) with certain excess cash, (9) increase the pricing for borrowings and commitment fees under the Amended Credit Agreement, (10) limit our ability to incur debt and liens during the covenant relief period, (11) limit our ability to make acquisitions and investments in third parties during the covenant relief period, (12) prohibit us from paying dividends and undertaking stock repurchases during the covenant relief period (other than our share repurchase from an affiliate of AIP), (13) prohibit us from exercising the accordion described below during the covenant relief period, (14) limit our financial and commercial letters of credit outstanding under the Amended Credit Agreement to $30.0 million during the covenant relief period, (15) require us to reduce commitments under the Amended Credit Agreement with the proceeds of certain debt issuances and asset sales, (16) beginning with the quarter ended ~~September~~June 30, ~~2017, limit to no more than $25.0~~2021, primarily representing the write-off of accrued revolver fees of $11.3 million any cumulative net income losses attributable to certain Vølund projects, and (17) increase reporting obligations and require us to hire a third-party consultant. The covenant relief period will end, at our election, whenoffset by the ~~conditions set forth in the Amended Credit Agreement are satisfied, but in no event earlier than the date on which we provide the compliance certificate for our fiscal quarter ended December 31, 2018.~~

~~Other than during the covenant relief period, the Amended Credit Agreement contains an accordion feature that allows us, subject~~unamortized deferred financing fees of $4.8 million related to the satisfaction of certain conditions, including the receipt of increased commitments from existing lenders or new commitments from new lenders, to increase the amount of the commitments under the revolving credit facility in an aggregate amount not to exceed the sum of (1) $200.0 million plus (2) an unlimited amount, so long as for any commitment increase under this subclause (2) our senior leverage ratio (assuming the full amount of any commitment increase under this subclause (2) is drawn) is equal to or less than 2.0:1.0 after giving pro forma effect thereto. During the covenant relief period, our ability to exercise the accordion feature will be prohibited.

After giving effect to Amendments, loans outstanding under the Amended Credit Agreement bear interest at our option at either (1) the LIBOR rate plus 5.0% per annum or (2) the base rate (the highest of the Federal Funds rate plus 0.5%, the one month LIBOR rate plus 1.0%, or the administrative agent's prime rate) plus 4.0% per annum.prior A commitment fee of 1.0% per annum is charged on the unused portions of the revolving credit facility. A letter of credit fee of 2.50% per annum is charged with respect to the amount of each financial letter of credit outstanding, and a letter of credit fee of 1.50% per annum is charged with respect to the amount of each performance and commercial letter of credit outstanding. Additionally, an annual facility fee of $1.5 million is payable on the first business day of 2018 and 2019, and a pro rated amount is payable on the first business day of 2020.

~~6.00:1.0 for the quarter ended September 30, 2017,~~

~~8.50:1.0 for each of the quarters ending December 31, 2017 and March 31, 2018,~~

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~~6.25:1.0 for the quarter ending June 30, 2018,~~

~~4.00:1.0 for the quarter ending September 30, 2018,~~

~~3.75:1.0 for the quarter ending December 31, 2018,~~

~~3.25:1.0 for each of the quarters ending March 31, 2019 and June 30, 2019, and~~

~~3.00:1.0 for each of the quarters ending September 30, 2019 and each quarter thereafter.~~

~~The minimum consolidated interest coverage ratio as defined in the Credit Agreement is:~~

~~1.50:1.0 for the quarter ended September 30, 2017,~~

~~1.00:1.0 for each of the quarters ending December 31, 2017 and March 31, 2018,~~

~~1.25:1.0 for the quarter ending June 30, 2018,~~

~~1.50:1.0 for each of the quarters ending September 30, 2018 and December 31, 2018,~~

~~1.75:1.0 for each of the quarters ending March 31, 2019 and June 30, 2019, and~~

~~2.00:1.0 for each of the quarters ending September 30, 2019 and each quarter thereafter.~~

~~Beginning with September 30, 2017, consolidated capital expenditures in each fiscal year are limited to $27.5 million.~~

At September 30, 2017, usage under the Amended Credit Agreement consisted of $58.9 million in borrowings at an effective interest rate of 6.88%, $7.7 million of financial letters of credit and $87.2 million of performance letters of credit. At September 30, 2017, we had approximately $94.7 million available for borrowings or to meet letter of credit requirements primarily based on trailing 12 month EBITDA, and our leverage (as defined in the Amended Credit Agreement) ratio was 3.00 and our interest coverage ratio was 2.59. In addition, through September 30, 2017, we have used $11.6 million of the $25.0 million of permitted net income loss attributable to Vølund projects. At September 30, 2017, we were in compliance with all of the covenants set forth in the Amended Credit Agreement, and we forecast our compliance with the financial covenants to be closest to the minimum thresholds at March 31, 2018.

We plan to execute the actions necessary to enable us to maintain compliance with the financial and other covenants described above. We believe we will accomplish our plans to maintain compliance with our financial and other covenants, and believe our cash on hand, proceeds from potential future asset sales, cash flows from operations and amounts available under our United States revolving credit facility will be adequate to enable us to fund our operations. However, there can be no assurance that we will be successful. Our ability to generate cash flows from operations, access funding under reasonable terms, contract business with reasonable terms and conditions and comply with our financial and other covenants may be impacted by a variety of business, economic, regulatory and other factors, which may be outside of our control. Such factors include, but are not limited to: our ability to access capital markets and complete asset dispositions, delay or cancellation of projects, decreased profitability on our projects due to matters not reasonably forecasted, changes in the timing of cash flows on our projects due to the timing of receipts and required payments of liabilities and funding of our loss projects, the timing of approval or settlement of change orders and claims, changes in foreign currency exchange or interest rates, performance of pension plan assets or changes in actuarially determined liabilities. In addition, we could be impacted if our customers experience a material change in their ability to pay us or if the banks associated with our lending facilities were to cease or reduce operations. Also, we have what we believe is adequate capacity to provide letters of credit and secure surety bonds in support of current and future projects, but there can be no assurance that these will be renewed or available at reasonable commercial terms in the future.

~~Second lien term loan~~

On August 9, 2017, we entered into a second lien credit agreement (the "Second Lien Credit Agreement") with an affiliate of AIP governing a second lien term loan facility. The second lien term loan facility consists of a second lien term loan in the principal amount of $175.9 million, all of which we borrowed on August 9, 2017, and a delayed draw term loan facility in the principal amount of up to $20.0 million, which may be drawn in a single draw prior to June 30, 2020, subject to certain conditions. Borrowings under the second lien term loan, other than the delayed draw term loan, bear interest at 10% per annum, and borrowings under the delayed draw term loan bear interest at 12% per annum, in each case payable quarterly. Undrawn amounts under the delayed draw term loan accrue a commitment fee at a rate of 0.50% per annum. The second lien term loan has a scheduled maturity of December 30, 2020. Any delayed draw borrowings would also have a scheduled maturity of December 30, 2020. In connection with our entry into the second lien term loan facility, we used a portion of the proceeds from the second lien term loan to repurchase approximately 4.8 million shares of our common stock (approximately 10% of our shares outstanding) held by an affiliate of AIP for approximately $50.9 million, which was one of the conditions precedent for the second lien term loan facility.

~~Table of Contents~~

Borrowings under the Second Lien Credit Agreement are (1) guaranteed by substantially all of our wholly owned domestic subsidiaries, but excluding our captive insurance subsidiary, and (2) secured by second-priority liens on certain assets owned by us and the guarantors. The Second Lien Credit Agreement requires interest payments on loans on a periodic basis until maturity. Voluntary prepayments made during the first year after closing are subject to a make-whole premium, voluntary prepayments made during the second year after closing are subject to a a 3.0% premium and voluntary prepayments made during the third year after closing are subject to a 2.0% premium. The Second Lien Credit Agreement requires us to make certain prepayments on any outstanding loans after receipt of cash proceeds from certain asset sales or other events, subject to certain exceptions and a right to reinvest such proceeds in certain circumstances, and subject to certain restrictions contained in an intercreditor agreement among the lenders under the Amended Credit Agreement and the Second Lien&R Credit Agreement.

~~The Second Lien~~Letters of Credit, ~~Agreement contains representations~~Bank Guarantees and ~~warranties, affirmative and restrictive covenants, financial covenants and events~~Surety Bonds

Certain of default substantially similar to those contained in the Amended Credit Agreement, subject to appropriate cushions. The Second Lien Credit Agreement is generally less restrictive than the Amended Credit Agreement.

~~Foreign revolving credit facilities~~

~~Outside~~our subsidiaries primarily outside of the United States we have revolving credit facilities in Turkey, China and India that are used to provide working capital to our operations in each country. These three foreign revolving credit facilities allow us to borrow up to $14.8 million in aggregate and each have a one year term. At September 30, 2017, we had $12.4 million in borrowings outstanding under these foreign revolving credit facilities at an effective weighted-average interest rate of 5.17%.

~~Other credit arrangements~~

~~Certain subsidiaries~~ have credit arrangements with various commercial banks and other financial institutions for the issuance of letters of credit and bank guarantees in ~~associated~~association with contracting activity. The aggregate value of all such letters of credit and bank guarantees ~~not secured by the United States revolving credit facility~~outstanding outside our prior A&R Credit Agreement as of ~~September~~June 30, ~~2017 and December 31, 2016~~2021 was ~~$279.1~~$57.3 million. The aggregate value of the outstanding letters of credit provided by our prior A&R Credit Agreement backstopping letters of credit or bank guarantees was $22.1 million ~~and $255.2~~as of June 30, 2021. Of the

outstanding letters of credit issued under our prior A&R Credit Agreement, $32.1 million ~~respectively.~~are subject to foreign currency revaluation.

We have also posted surety bonds to support contractual obligations to customers relating to certain ~~projects.~~contracts. We utilize bonding facilities to support such obligations, but the issuance of bonds under those facilities is typically at the surety's discretion. Although there can be no assurance that we will maintain our surety bonding capacity, we believe our current capacity is more than adequate to support our existing project requirements for the next 12 months. In addition, theseThese bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds those underwriters issue in support of some of our contracting activity. As of ~~September~~June 30, ~~2017,~~2021, bonds issued and outstanding under these arrangements in support of contracts totaled approximately ~~$472.3~~$259.3 million. The aggregate value of the letters of credit provided by our prior A&R Credit Agreement backstopping surety bonds was $24.6 million.

Other Indebtedness - Loan Payable

As described in Note 15, during the six months ended June 30, 2021, our Denmark subsidiary received two unsecured interest free loans totaling $2.6 million under a local government loan program related to COVID-19. The loans of $0.9 million and $1.7 million are payable in April 2022 and May 2022, respectively.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have, or are reasonably expected to have, a material current or future effect on its financial condition, results of operations, liquidity, capital expenditures or capital resources at June 30, 2021.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

For a summary of the critical accounting policies and estimates that we use in the preparation of our unaudited ~~condensed consolidated financial statements,~~Condensed Consolidated Financial Statements, see ~~"Critical~~“Critical Accounting ~~Policies"~~Policies and Estimates” in our Annual Report. There have been no significant changes to our policies during the ~~quarter~~six months ended ~~September~~June 30, ~~2017.~~2021.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposures to market risks ~~could change~~have not changed materially from those disclosed under ~~"Quantitative~~“Quantitative and Qualitative Disclosures About Market ~~Risk"~~Risk” in our Annual Report. Our exposure to market risk from changes in interest rates relates primarily to our cash equivalents and our investment portfolio, which primarily consists of investments in United States Government obligations and highly liquid money market instruments denominated in United States dollars. We are averse to principal loss and seek to ensureReport on Form 10-K for the ~~safety and preservation of our invested funds by limiting default risk, market risk and reinvestment risk. Our investments are classified as available-for-sale.~~year ended December 31, 2020.

Although the condensed and consolidated balance sheets do not present debt at fair value, our second lien term loan facility is fixed-rate debt, the fair value of which could fluctuate as a result of changes in prevailing market rates. On September 30, 2017, its principal balance was $175.9 million. Our United States revolving credit facility is variable-rate debt, so its fair

~~Table of Contents~~

~~value would not be significantly affected by changes in prevailing market rates. On September 30, 2017, its principal balance was $58.9 million.~~

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. Our primary foreign currency exposures are Danish kroner, Great British pound, Euro, Canadian dollar, and Chinese yuan. In order to manage the risks associated with FX rate fluctuations, we attempt to hedge those risks with FX derivative instruments, but there can be no assurance that such instruments will be available to us on reasonable terms. Historically, we have hedged those risks with FX forward contracts. We do not enter into speculative derivative positions. During the third quarter of 2017, our hedge counterparties removed the lines of credit supporting new FX forward contracts. Subsequently, we have not entered into any new FX forward contracts.

Item 4. Controls and Procedures

Disclosure ~~controls~~Controls and ~~procedures~~Procedures

As of the end of the period covered by this report, the Company's management, with the participation of our Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as(as that term is defined in Rules 13a-15(e) and 15d-15(e) ofadopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Exchange Act")). ~~Disclosure~~Our disclosure controls and procedures, by their nature, can provide only reasonable assurance regarding the control objectives. 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 ~~the controls and processes~~effective as of June 30, 2021 to provide reasonable assurance that ~~are designed to ensure 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 ~~SEC's~~ rules and ~~forms. Disclosure controls~~forms of the Securities and ~~procedures include, without limitation, controls~~Exchange Commission, and ~~procedures designed to ensure that~~such information ~~required to be disclosed in the reports that the Company files or submits under the Exchange Act~~ is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosures. Our disclosure controls and procedures were developed through a process in which our management applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding the control objectives. 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 provide absolute assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.disclosure.

On January 11, 2017, we acquired Universal, which would have represented approximately 3% of our total consolidated assets and consolidated revenues as of and for the year ended December 31, 2016, respectively. As the acquisition occurred during the last 12 months, the scope of our assessment of the effectiveness of disclosure controls and procedures does not include internal control over financial reporting related to Universal. This exclusion is 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.

Based on the evaluation referred to above, our Chief Executive Officer and Chief Financial Officer concluded the disclosure controls and procedures were not effective due to the material weakness in internal control over financial reporting that we reported for the quarter ended June 30, 2017 at Vølund, a business unit within our Renewable segment, which remains unremediated as of September 30, 2017. Our management has completed all steps designed to remediate the material weakness at September 30, 2017; however, the material weakness at Vølund cannot be remediated until the new processes and procedures have been in place for a sufficient period of time and management has determined through testing that the controls are effective. Management expects the material weakness at Vølund will be remediated at December 31, 2017; however, our remediation plans cannot guarantee the material weakness will be remediated by a specific future date or at all.

We are committed to continuing to improve our internal control over financial reporting and will continue to review our financial reporting processes and internal controls at Vølund. As we continue to evaluate and work to improve our internal control over financial reporting, we may identify additional measures to address the material weakness at Vølund. Our management, with the oversight of the audit and finance committee of our board of directors, will continue to assess and take steps to enhance the overall design and capability of our control environment in the future.

~~Table of Contents~~

Changes in ~~internal control over financial reporting~~Internal Control Over Financial Reporting

During the three months ended September 30, 2017, we finalized the implementation of a new financial consolidation, planning and reporting system. The new system replaces the legacy system we used under a service agreement with our former Parent. In connection with the implementation, we updated the processes that constitute our internal control over financial reporting, as necessary, to accommodate related changes to our accounting procedures and business processes. Although the processes that constitute our internal control over financial reporting have been affected by the system implementation, we do not believe the implementation of the financial consolidation, planning and reporting system has had or will have a material adverse effect on our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management has taken steps to ensure that appropriate internal controls are designed and implemented. The new system and associated internal controls were subject to testing and data reconciliation during implementation.

~~Other than the system change described above, there~~There were no changes in our internal control over financial reporting during the ~~quarter~~six months ended ~~September~~June 30, ~~2017~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 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. We are continually monitoring and assessing the COVID-19 situation on our internal controls to ensure their operating effectiveness.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding ongoing investigations and litigation, see Note 1920 to the unaudited ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements in Part I of this report, which we incorporate by reference into this Item.

Item 1A. Risk Factors

We are subject to various risks and uncertainties in the course of our business. The discussion of such risks and uncertainties may be found under ~~"Risk Factors"~~“Risk Factors” in our Annual ~~Report.~~Report on Form 10-K for the fiscal year ended December 31, 2020 and

in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021. There ~~have been no~~are material changes to the following risk factors:

We repaid our A&R Credit Agreement and our new Revolving Credit Agreement restricts our operations.

As disclosed in Note 17 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of the Quarterly Report, we repaid our A&R Credit Agreement on June 30, 2021. Also as of June 30, 2021, we entered into the Debt Documents, including our new Revolving Credit agreement.

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, a quarterly senior net leverage ratio test, a non-guarantor cash repatriation covenant, a minimum liquidity covenant and an annual cap on maintenance capital expenditures. The Debt Documents also contains 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.

Our ability to comply with the covenants, restrictions and specified financial ratios contained in the Debt Documents, including our Revolving Credit Agreement, may be affected by events beyond our control, including prevailing macroeconomic, financial and industry conditions, as well as the other risks discussed in this Quarterly Report. If market or other macroeconomic conditions deteriorate, or if we experience any of the other risks discussed in this Quarterly Report, our ability to comply with these covenants may be impaired. A breach of any of the covenants in our Debt Documents could result in an event of default under our Debt Documents, which would result in our inability to access our Revolving Credit Agreement for additional borrowings and letters of credit while any default exists. Upon the occurrence of such ~~risk factors.~~an event of default, all amounts outstanding under our Revolving Credit Agreement could also be declared to be immediately due and payable and all applicable commitments to extend further credit could be terminated. If indebtedness under our Revolving Credit Agreement is accelerated, there can be no assurance that we will have sufficient assets to repay the indebtedness. The operating and financial restrictions and covenants in our Debt Documents and any future financing agreements may adversely affect our ability to finance future operations or capital needs or to engage in other business activities.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In ~~August 2015, we announced~~accordance with the provisions of the employee benefit plans, the Company acquired the following shares in connection with the vesting of employee restricted stock that ~~our Board of Directors authorized a share repurchase program.~~require us to withhold shares to satisfy employee statutory income tax withholding obligations. The following table ~~provides information on our purchases~~identifies the number of ~~equity securities~~common shares and average price per share for each month during the quarter ended ~~September~~June 30, ~~2017. Any~~2021. The Company does not have a general share repurchase program at this time.


(data in whole amounts)
Period	Total number of shares acquired (1)	Average price per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs
April 2021	—	$	—	—	$	—
May 2021	158	$	9.02	—	$	—
June 2021	—	$	—	—	$	—
Total	158	$	9.02	—	$	—

(1) Acquired shares ~~purchased that were not part of a publicly announced plan or program~~ are ~~related to repurchases of common~~recorded in treasury stock ~~pursuant to the provisions of employee benefit plans that permit the repurchase of shares to satisfy statutory tax withholding obligations.~~in our Condensed Consolidated Balance Sheets.

Period
Total number of shares purchased ^{(1) (2)}
Average
price paid
per share
Total number of
shares purchased as
part of publicly
announced plans or
programs
Approximate dollar value of shares that may
yet be purchased under
the plans or programs
(in thousands)⁽³⁾
July 1, 2017 - July 31, 2017 3,620 $— — $100,000
August 1, 2017 - August 31, 2017 4,835,775 $10.52 — $100,000
September 1, 2017 - September 30, 2017 944 $— — $100,000
Total 4,840,339 —



~~(1)~~	Includes 3,620, 953 and 944 shares repurchased in July, August and September, respectively, pursuant to the provisions of employee benefit plans that require us to repurchase shares to satisfy employee statutory income tax withholding obligations.
~~(2)~~	~~Includes 4,834,822 shares repurchased for $50,883,635 on August 9, 2017 from an affiliate of AIP in conjunction with the issuance of our second lien term loan facility.~~
~~(3)~~	On August 4, 2016, we announced that our board of directors authorized the repurchase of an indeterminate number of our shares of common stock in the open market at an aggregate market value of up to $100 million over the next twenty-four months. As of November 8, 2017, we have not made any share repurchases under the August 4, 2016 share repurchase authorization.

~~Table of Contents~~

Item 6. Exhibits


3.1						Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876)).

~~10.1~~3.2						Certificate of Amendment ~~No. 3 dated August 9, 2017,~~of the Restated Certificate of Incorporation (incorporated by reference to ~~Credit Agreement, dated May 11, 2015, among~~Exhibit 3.1 to the Babcock & Wilcox Enterprises, Inc., Current Report on Form 8-K filed on June 17, 2019 (File No. 001-36876)).

3.3						Certificate of Amendment of the Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the ~~Borrower, Bank~~Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on July 24, 2019 (File No. 001-36876)).

3.4						Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (File No. 001-36876)).

3.5						Certificate of ~~America, N.A., as administrative Agent~~Designations with respect to the 7.75% Series A Cumulative Perpetual Preferred Stock, dated May 6, 2021, filed with the Secretary of State of Delaware and ~~Lender, and~~effective on May 6, 2021 (incorporated by reference to Exhibit 3.4 to the ~~other Lenders party thereto~~Babcock & Wilcox Enterprises, Inc. Form 8-A filed on May 7, 2021 (File No. 001-36876)).

3.6						Certificate of Increase in Number of Shares of 7.75% Series A Cumulative Perpetual Preferred Stock, dated June 1, 2021 (incorporated by reference to Exhibit 3.1 to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on July 4, 2021 (File No. 001-36876)).

4.1						Form of Certificate representing 7.75% Series A Cumulative Perpetual Preferred Stock ( incorporated by reference to Exhibit 4.1 to the Babcock & Wilcox Enterprises, Inc. Form 8-A filed on May 7, 2021 (File No. 001-36876)).

10.1						Babcock & Wilcox Enterprises, Inc. 2021 Long-Term Incentive Plan (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed ~~August 15, 2017~~on May 26, 2021 (File No. 001-36876)).

10.2						~~Second Lien~~Amendment No. 5 to Amended and Restated Credit Agreement dated ~~August 9, 2017, among Babcock & Wilcox Enterprises, Inc., as the Borrower, Lightship Capital LLC, as administrative Agent and Lender, and the other Lenders party thereto~~May 10, 2021 (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed ~~August 15, 2017~~on May 13, 2021 (File ~~No.001-36876)~~No. 001-36876)).

10.3						~~Amendment No. 4 dated September 20, 2017 to~~Revolving Credit, Guaranty and Security Agreement, dated ~~May 11, 2015,~~as of June 30, 2021, by and among Babcock & Wilcox Enterprises, Inc., and PNC Bank, National Association, as administrative agent, lender and swing loan lender (incorporated by reference to the ~~borrower, Bank of America, N.A. as Administrative Agent, and the other Lenders party thereto~~Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on July 7, 2021 (File No. 001-36876)).

10.4						Letter of Credit Issuance and Reimbursement and Guaranty Agreement, dated as of June 30, 2021, by and among Babcock & Wilcox Enterprises, Inc. and PNC Bank, National Association, as issuer (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on July 7, 2021 (File No. 001-36876))


10.5		Reimbursement, Guaranty and Security Agreement, dated as of June 30, 2021, by and among Babcock & Wilcox Enterprises, Inc. and MSD PCOF Partners XLV, LLC, as administrative agent (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on July 7, 2021 (File No. 001-36876)).

10.6		Guaranty Agreement, dated as of June 30, 2021, by B. Riley Financial, Inc. in favor of MSD PCOF Partners XLV, LLC, as administrative agent (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on July 7, 2021 (File No. 001-36876)).

31.1		Rule 13a-14(a)/15d-14(a) certification of Chief Executive ~~Officer~~Officer.

31.2		Rule 13a-14(a)/15d-14(a) certification of Chief Financial ~~Officer~~Officer.

32.1		Section 1350 certification of Chief Executive ~~Officer~~Officer.

32.2		Section 1350 certification of Chief Financial ~~Officer~~Officer.

~~101.INS~~101.SCH		~~XBRL Instance Document~~

~~101.SCH~~	XBRL Taxonomy Extension Schema ~~Document~~Document.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase ~~Document~~Document.

101.LAB		XBRL Taxonomy Extension Label Linkbase ~~Document~~Document.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase ~~Document~~Document.

101.DEF		XBRL Taxonomy Extension Definition Linkbase ~~Document~~Document.

104		Cover Page Interactive Data File (embedded within the inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



~~November 8, 2017~~			BABCOCK & WILCOX ENTERPRISES, INC.

August 12, 2021	By:	~~By:~~	/s/ ~~Daniel W. Hoehn~~Louis Salamone
			~~Daniel W. Hoehn~~Louis Salamone
			Executive Vice President, ~~Controller &~~Chief Financial Officer and Chief Accounting Officer
	(Principal Financial and Accounting Officer and Duly Authorized Representative)



~~DELAWARE~~Delaware		47-2783641
(State or other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

~~THE HARRIS BUILDING~~1200 East Market Street, Suite 650
~~13024 BALLANTYNE CORPORATE PLACE, SUITE 700~~Akron, Ohio		44305
~~CHARLOTTE, NORTH CAROLINA~~	~~28277~~
(Address of Principal Executive Offices)	(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	BW	New York Stock Exchange
8.125% Senior Notes due 2026	BWSN	New York Stock Exchange
7.75% Series A Cumulative Perpetual Preferred Stock	BW PRA	New York Stock Exchange


						PAGE

Cautionary Statement Concerning Forward-Looking Information							~~PAGE~~ 3
PART I - FINANCIAL INFORMATION
Item 1.			~~Item 1 –~~ Condensed Consolidated Financial Statements			34

	Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 (Unaudited)			34

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 (Unaudited)			45

	Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 (Unaudited)			56
			Condensed Consolidated Statement of Stockholders' (Deficit) Equity for the Three Month s Ended March 31 a nd June 30 of 2021 and 2020 (Unaudited)			7
			Condensed Consolidated Statements of Cash Flows for the ~~Nine~~S ix Months Ended ~~September~~June 30 ~~2017~~, 2021 and ~~2016~~2020 (Unaudited)			69

	Notes to Condensed Consolidated Financial Statements			710

Item 2.	~~Item 2 -~~ Management's Discussion and Analysis of Financial Condition and Results of ~~Operations~~Operation			3035
			Overview			35
			Results of Operations - Three and Six Months Ended June 30, 2021 and 2020			37
			Liquidity and Capital Resources			44
			Critical Accounting Policies and Estimates			47
Item ~~3 -~~ 3.			Quantitative and Qualitative Disclosures ~~About~~about Market Risk			4547

Item 4.	~~Item 4 -~~ Controls and Procedures			4647

PART II - OTHER INFORMATION

Item 1.	~~Item 1 -~~ Legal Proceedings			4748

Item 1A.	~~Item 1A -~~ Risk Factors			4748

Item 2.	~~Item 2 -~~ Unregistered Sales of Equity Securities and Use of Proceeds			4748

	Item ~~6 - Exhibits~~6.	48Exhibits			49

SIGNATURES		4851


	Three months ended June 30,				Six months ended June 30,
(in thousands, except per share amounts)	2021		2020		2021		2020
Revenues	$	202,860	$	135,397	$	371,108	$	283,951
Costs and expenses:
Cost of operations	158,799		102,907		290,184		217,535
Selling, general and administrative expenses	33,704		34,579		74,161		72,187
Advisory fees and settlement costs	4,526		1,989		7,817		6,228
Restructuring activities	2,400		2,392		3,393		4,343
Research and development costs	609		1,231		1,197		2,572
Loss (gain) on asset disposals, net	38		2		(1,966)		(913)
Total costs and expenses	200,076		143,100		374,786		301,952
Operating income (loss)	2,784		(7,703)		(3,678)		(18,001)
Other income (expense):
Interest expense	(8,021)		(15,482)		(22,244)		(37,573)
Interest income	146		223		255		263
Gain (loss) on debt extinguishment	6,530		(6,194)		6,530		(6,194)
(Loss) gain on sale of business	(2,598)		(108)		(2,240)		(108)
Benefit plans, net	5,924		7,450		15,022		14,986
Foreign exchange	1,826		7,112		617		(2,214)
Other – net	96		(2,586)		(182)		(2,792)
Total other income (expense)	3,903		(9,585)		(2,242)		(33,632)
Income (loss) before income tax expense	6,687		(17,288)		(5,920)		(51,633)
Income tax expense	3,546		845		6,382		35
Income (loss) from continuing operations	3,141		(18,133)		(12,302)		(51,668)
(Loss) income from discontinued operations, net of tax	0		(113)		0		1,800
Net income (loss)	3,141		(18,246)		(12,302)		(49,868)
Net (income) loss attributable to non-controlling interest	(15)		142		(36)		238
Net income (loss) attributable to stockholders	3,126		(18,104)		(12,338)		(49,630)
Less: Dividend on Series A preferred stock	1,731		0		1,731		0
Net income (loss) attributable to stockholders of common stock	$	1,395	$	(18,104)	$	(14,069)	$	(49,630)

Basic earnings (loss) per share
Continuing operations	$	0.02	$	(0.39)	$	(0.18)	$	(1.10)
Discontinued operations	0		0		0		0.04
Basic earnings (loss) per share	$	0.02	$	(0.39)	$	(0.18)	$	(1.06)
Diluted earnings (loss) per share
Continuing operations	$	0.02	$	(0.39)	$	(0.18)	$	(1.10)
Discontinued operations	0		0		0		0.04
Diluted earnings (loss) per share	$	0.02	$	(0.39)	$	(0.18)	$	(1.06)
Shares used in the computation of earnings (loss) per share:
Basic	85,724		46,853		78,589		46,628
Diluted	87,003		46,853		78,589		46,628



	Three months ended September 30,						Nine months ended September 30,
(in thousands, except per share amounts)	2017			2016			2017			2016
Revenues	$	408,703		$	410,955		$	1,149,636		$	1,198,279
Costs and expenses:
Cost of operations	361,416			337,198			1,095,271			1,018,314
Selling, general and administrative expenses	60,241			60,697			195,847			182,761
Goodwill impairment charges	86,903			—			86,903			—
Restructuring activities and spin-off transaction costs	3,775			2,395			8,910			38,021
Research and development costs	2,291			2,361			7,454			8,273
Losses (gains) on asset disposals, net	59			(2		)	63			(17		)
Total costs and expenses	514,685			402,649			1,394,448			1,247,352
Equity in income (loss) and impairment of investees	1,234			2,827			(13,380		)	4,887
Operating income (loss)	(104,748		)	11,133			(258,192		)	(44,186		)
Other income (expense):
Interest income	121			115			359			656
Interest expense	(7,468		)	(379		)	(15,567		)	(1,169		)
Other – net	(7,633		)	(241		)	(6,024		)	113
Total other income (expense)	(14,980		)	(505		)	(21,232		)	(400		)
Income (loss) before income tax expense	(119,728		)	10,628			(279,424		)	(44,586		)
Income tax expense (benefit)	(5,639		)	1,617			(7,644		)	(790		)
Net income (loss)	(114,089		)	9,011			(271,780		)	(43,796		)
Net income attributable to noncontrolling interest	(213		)	(117		)	(566		)	(293		)
Net income (loss) attributable to shareholders	$	(114,302	)	$	8,894		$	(272,346	)	$	(44,089	)

Basic income (loss) per share	$	(2.48	)	$	0.18		$	(5.69	)	$	(0.87	)

Diluted income (loss) per share	$	(2.48	)	$	0.18		$	(5.69	)	$	(0.87	)

Shares used in the computation of earnings per share:
Basic	46,149			49,621			47,905			50,613
Diluted	46,149			49,857			47,905			50,613



x☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


(in thousands, except per share amount)	September 30, 2017			December 31, 2016			(in thousands, except per share amount)	June 30, 2021		December 31, 2020
Cash and cash equivalents	$	48,137		$	95,887
Restricted cash and cash equivalents	26,648			27,770
Cash, cash equivalents and restricted cash							Cash, cash equivalents and restricted cash	$	143,598	$	67,423
Accounts receivable – trade, net	320,202			282,347			Accounts receivable – trade, net	132,341		128,317
Accounts receivable – other	67,421			73,756			Accounts receivable – other	34,622		35,442
Contracts in progress	169,182			166,010			Contracts in progress	63,937		59,308
Inventories	91,099			85,807			Inventories	71,003		67,161
Other current assets	37,339			45,957			Other current assets	15,355		26,421
Current assets held for sale							Current assets held for sale	0		4,728
Total current assets	760,028			777,534			Total current assets	460,856		388,800
Net property, plant and equipment	143,107			133,637
Net property, plant and equipment, and finance lease							Net property, plant and equipment, and finance lease	83,366		85,078
Goodwill	204,105			267,395			Goodwill	47,413		47,363
Deferred income taxes	163,013			163,388
Investments in unconsolidated affiliates	87,417			98,682
Intangible assets	80,000			71,039			Intangible assets	21,652		23,908
Right-of-use assets							Right-of-use assets	9,399		10,814
Other assets	22,227			17,468			Other assets	40,688		24,673
Non-current assets held for sale							Non-current assets held for sale	1,766		11,156
Total assets	$	1,459,897		$	1,529,143		Total assets	$	665,140	$	591,792

Foreign revolving credit facilities	$	12,398		$	14,241
Accounts payable	243,565			220,737			Accounts payable	$	87,541	$	73,481
Accrued employee benefits	38,009			35,497			Accrued employee benefits	13,998		13,906
Advance billings on contracts	219,822			210,642			Advance billings on contracts	53,142		64,002
Accrued warranty expense	41,230			40,467			Accrued warranty expense	16,376		25,399
Operating lease liabilities							Operating lease liabilities	3,728		3,995
Other accrued liabilities	92,491			95,954			Other accrued liabilities	60,213		81,744
Loan payable							Loan payable	2,564		0
Current liabilities held for sale							Current liabilities held for sale	0		8,305
Total current liabilities	647,515			617,538			Total current liabilities	237,562		270,832
United States revolving credit facility	58,900			9,800
Second lien term loan facility	138,384			—
Senior notes							Senior notes	168,357		0
Last out term loans							Last out term loans	0		183,330
Revolving credit facilities							Revolving credit facilities	0		164,300
Pension and other accumulated postretirement benefit liabilities	275,269			301,259			Pension and other accumulated postretirement benefit liabilities	213,042		252,292
Other noncurrent liabilities	45,046			39,595
Non-current finance lease liabilities							Non-current finance lease liabilities	33,237		29,690
Non-current operating lease liabilities							Non-current operating lease liabilities	5,888		7,031
Other non-current liabilities							Other non-current liabilities	22,773		22,579
Total liabilities	1,165,114			968,192			Total liabilities	680,859		930,054
Commitments and contingencies							Commitments and contingencies	0
Stockholders' equity:
Common stock, par value $0.01 per share, authorized 200,000 shares; issued and outstanding 44,049 and 48,688 shares at September 30, 2017 and December 31, 2016, respectively	499			544
Stockholders' deficit:							Stockholders' deficit:
Preferred stock, par value $0.01 per share, authorized shares of 20,000; issued and outstanding shares of 7,362 and 0 at June 30, 2021 and December 30, 2020, respectively							Preferred stock, par value $0.01 per share, authorized shares of 20,000; issued and outstanding shares of 7,362 and 0 at June 30, 2021 and December 30, 2020, respectively	74		0
Common stock, par value $0.01 per share, authorized shares of 500,000; issued and outstanding shares of 85,729 and 54,452 at June 30, 2021 and December 31, 2020, respectively							Common stock, par value $0.01 per share, authorized shares of 500,000; issued and outstanding shares of 85,729 and 54,452 at June 30, 2021 and December 31, 2020, respectively	5,103		4,784
Capital in excess of par value	800,183			806,589			Capital in excess of par value	1,509,697		1,164,436
Treasury stock at cost, 5,681 and 5,592 shares at September 30, 2017 and December 31, 2016, respectively	(104,745		)	(103,818		)
Retained deficit	(387,030		)	(114,684		)
Treasury stock at cost, 1,313 and 718 shares at June 30, 2021 and December 31, 2020, respectively							Treasury stock at cost, 1,313 and 718 shares at June 30, 2021 and December 31, 2020, respectively	(109,301)		(105,990)
Accumulated deficit							Accumulated deficit	(1,364,275)		(1,350,206)
Accumulated other comprehensive loss	(22,440		)	(36,482		)	Accumulated other comprehensive loss	(58,054)		(52,390)
Stockholders' equity attributable to shareholders	286,467			552,149
Noncontrolling interest	8,316			8,802
Total stockholders' equity	294,783			560,951
Total liabilities and stockholders' equity	$	1,459,897		$	1,529,143
Stockholders' deficit attributable to shareholders							Stockholders' deficit attributable to shareholders	(16,756)		(339,366)
Non-controlling interest							Non-controlling interest	1,037		1,104
Total stockholders' deficit							Total stockholders' deficit	(15,719)		(338,262)
Total liabilities and stockholders' deficit							Total liabilities and stockholders' deficit	$	665,140	$	591,792


	Common Stock			Preferred Stock			Capital In Excess of Par Value		Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive Loss		Non-controlling Interest		Total Stockholders’ Deficit

	Shares	Par Value		Shares	Par Value
		(in thousands, except share and per share amounts)
Balance at December 31, 2020	54,452	$	4,784	0	$	0	$	1,164,436	$	(105,990)	$	(1,350,206)	$	(52,390)	$	1,104	$	(338,262)

Net (loss) income	—	—		—	—		—		—		(15,464)		—		21		(15,443)
Currency translation adjustments	—	—		—	—		—		—		—		(4,582)		(24)		(4,606)
Defined benefit obligations	—	—		—	—		—		—		—		198		—		198
Stock-based compensation charges	1,725	22		—	—		4,480		(3,308)		—		—		—		1,194
Common stock offering, net	29,487	295		—	—		161,218		—		—		—		—		161,513
Dividends to non-controlling interest	—	—		—	—		—		—		—		—		(38)		(38)
Balance at March 31, 2021	85,664	$	5,101	0	$	0	$	1,330,134	$	(109,298)	$	(1,365,670)	$	(56,774)	$	1,063	$	(195,444)
Net income	—	—		—	—		—		—		3,126		—		15		3,141
Currency translation adjustments	—	—		—	—		—		—		—		(1,478)		(5)		(1,483)
Defined benefit obligations	—	—		—	—		—		—		—		198		—		198
Stock-based compensation charges	65	2		—	—		1,201		(3)		—		—		—		1,200
Common stock offering	—	—		—	—		(529)		—		—		—		—		(529)
Preferred stock offering, net	—	—		4,445	45		105,998		—		—		—		—		106,043
Equitized Last Out Term Loan principal payment	—	—		2,917	29		72,893		—		—		—		—		72,922
Dividends to preferred stockholders	—	—		—	—		—		—		(1,731)		—		—		(1,731)
Dividends to non-controlling interest	—	—		—	—		—		—		—		—		(36)		(36)
Balance at June 30, 2021	85,729	$	5,103	7,362	$	74	$	1,509,697	$	(109,301)	$	(1,364,275)	$	(58,054)	$	1,037	$	(15,719)



	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2017			2016			2017			2016
Revenues:
Power segment	$	202,222		$	211,749		$	612,274		$	762,293
Renewable segment	108,557			124,344			262,168			293,593
Industrial segment	99,288			76,809			281,734			147,275
Eliminations	(1,364		)	(1,947		)	(6,540		)	(4,882		)
	408,703			410,955			1,149,636			1,198,279
Gross profit:
Power segment	40,629			48,896			132,653			170,903
Renewable segment	181			18,592			(100,119		)	14,468
Industrial segment	9,461			14,601			34,240			33,506
Intangible amortization expense included in cost of operations	(2,984		)	(7,752		)	(11,455		)	(8,833		)
Mark to market loss included in cost of operations	—			(580		)	(954		)	(30,079		)
	47,287			73,757			54,365			179,965
Selling, general and administrative ("SG&A") expenses	(59,225		)	(59,615		)	(192,742		)	(179,225		)
Goodwill impairment charges	(86,903		)	—			(86,903		)	—
Restructuring activities and spin-off transaction costs	(3,775		)	(2,395		)	(8,910		)	(38,021		)
Research and development costs	(2,291		)	(2,361		)	(7,454		)	(8,273		)
Intangible amortization expense included in SG&A	(1,016		)	(1,018		)	(2,999		)	(3,071		)
Mark to market loss included in SG&A	—			(64		)	(106		)	(465		)
Equity in income of investees	1,234			2,827			4,813			4,887
Impairment of equity method investment	—			—			(18,193		)	—
Gains (losses) on asset disposals, net	(59		)	2			(63		)	17
Operating income (loss)	$	(104,748	)	$	11,133		$	(258,192	)	$	(44,186	)



(in thousands)	Estimated acquisition date fair value
Cash	$	4,379
Accounts receivable	11,270
Contracts in progress	3,167
Inventories	4,585
Other assets	579
Property, plant and equipment	16,692
Goodwill	14,413
Identifiable intangible assets	19,500
Deferred income tax assets	935
Current liabilities	(10,833		)
Other noncurrent liabilities	(1,423		)
Deferred income tax liabilities	(6,338		)
Net acquisition cost	$	56,926



	Estimated fair value (in thousands)		Weighted average estimated useful life (in years)
Customer relationships	$	10,800	15
Backlog	1,700		1
Trade names / trademarks	3,000		20
Technology	4,000		7
Total amortizable intangible assets	$	19,500



	Three months ended		Nine months ended			Twelve months ended
(in thousands)	September 30, 2016		September 30, 2016			December 31, 2016
Revenues	$	431,412	$	1,259,905		$	1,660,986
Net income (loss) attributable to B&W	8,903		(43,458		)	(113,940		)
Basic earnings per common share	0.18		(0.86		)	(2.27		)
Diluted earnings per common share	0.18		(0.86		)	(2.27		)



(in thousands)	Currency translation gain (loss) (net of tax)			Net unrealized gain (loss) on investments (net of tax)			Net unrealized gain (loss) on derivative instruments (net of tax)			Net unrecognized gain (loss) related to benefit plans (net of tax)			Total
Balance at December 31, 2016	$	(43,987	)	$	(37	)	$	802		$	6,740		$	(36,482	)
Other comprehensive income (loss) before reclassifications	5,417			61			4,587			(44		)	10,021
Amounts reclassified from AOCI to net income (loss)	—			(27		)	(3,843		)	(882		)	(4,752		)
Net current-period other comprehensive income (loss)	5,417			34			744			(926		)	5,269
Balance at March 31, 2017	$	(38,570	)	$	(3	)	$	1,546		$	5,814		$	(31,213	)
Other comprehensive income (loss) before reclassifications	6,757			(19		)	(2,204		)	(97		)	4,437
Amounts reclassified from AOCI to net income (loss)	—			(1		)	(658		)	(800		)	(1,459		)
Net current-period other comprehensive income (loss)	6,757			(20		)	(2,862		)	(897		)	2,978
Balance at June 30, 2017	(31,813		)	(23		)	(1,316		)	4,917			(28,235		)
Other comprehensive income (loss) before reclassifications	2,591			69			268			(66		)	2,862
Amounts reclassified from AOCI to net income (loss)	—			(4		)	3,567			(630		)	2,933
Net current-period other comprehensive income (loss)	2,591			65			3,835			(696		)	5,795
Balance at September 30, 2017	$	(29,222	)	$	42		$	2,519		$	4,221		$	(22,440	)



Period ending	Amortization expense
Three months ending December 31, 2017	$	3,582
Twelve months ending December 31, 2018	$	12,444
Twelve months ending December 31, 2019	$	10,342
Twelve months ending December 31, 2020	$	9,042
Twelve months ending December 31, 2021	$	8,782
Twelve months ending December 31, 2022	$	7,205
Thereafter	$	27,298


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2021		2020		2021		2020
Revenues:
B&W Renewable segment
B&W Renewable	$	24,701	$	27,066	$	42,698	$	49,404
Vølund	13,643		16,443		24,457		30,104
	38,344		43,509		67,155		79,508
B&W Environmental segment
B&W Environmental	10,995		10,513		28,428		23,448
SPIG	13,194		10,850		24,378		22,187
GMAB	4,169		3,809		6,712		5,457
	28,358		25,172		59,518		51,092
B&W Thermal segment
B&W Thermal	136,316		67,212		244,597		153,895
	136,316		67,212		244,597		153,895

Other	(158)		(496)		(162)		(544)
Total Revenues	$	202,860	$	135,397	$	371,108	$	283,951



(in thousands)	Power		Renewable			Industrial			Total
Balance at December 31, 2016	$	46,220	$	48,435		$	172,740		$	267,395
Increase resulting from Universal acquisition	—		—			14,413			14,413
Third quarter 2017 impairment charges^*	—		(49,965		)	(36,938		)	(86,903		)
Currency translation adjustments	1,180		1,530			6,490			9,200
Balance at September 30, 2017	$	47,400	$	—		$	156,705		$	204,105



	Power Segment		Industrial Segment
(in millions)	Power	Construction	MEGTEC	Universal
Reporting unit headroom	60%	98%	12%	18%
Goodwill balance	$38.5	$8.9	$104.3	$14.4



Face value	Unamortized debt discount and direct financing costs	Net carrying value
$175,884	$37,500	$138,384



(in thousands)	Actual for the period August 9, 2017 through September 30, 2017	Forecasted for the period October 1, 2017 through December 31, 2017	Forecasted for the period January 1, 2018 through December 31, 2018
Coupon interest (10%)	$2,554	$4,433	$17,588
Amortization of financing costs and discount	$1,095	$2,119	$9,678
Total interest expense	$3,649	$6,552	$27,266



	Asset and Liability Derivative
(in thousands)	September 30, 2017		December 31, 2016
Derivatives designated as hedges:
Foreign exchange contracts:
Location of FX forward contracts designated as hedges:
Accounts receivable-other	$	1,694	$	3,805
Other assets	750		665
Accounts payable	542		1,012
Other liabilities	183		213

Derivatives not designated as hedges:
Foreign exchange contracts:
Location of FX forward contracts not designated as hedges:
Accounts receivable-other	$	1,238	$	105
Accounts payable	2,594		403
Other liabilities	8		7



Derivatives	September 30, 2017		December 31, 2016
Forward contracts to purchase/sell foreign currencies	$	355	$	2,940



Pension & other postretirement benefit costs (benefits)
(in thousands)	December 31, 2016			December 31, 2015			Current classification	Future classification
Service cost	$	1,703		$	13,701		Cost of operations	Cost of operations
Interest cost	41,772			50,644			Cost of operations	Other income (expense)
Expected return on plan assets	(61,939		)	(68,709		)	Cost of operations	Other income (expense)
Amortization of prior service cost	250			307			Cost of operations	Other income (expense)
Recognized net actuarial losses - mark to market adjustments	24,110			40,210			Cost of operations or SG&A expenses	Other income (expense)
Net periodic benefit cost (benefit)	$	5,896		$	36,153


	Three months ended June 30,				Six months ended June 30,
(In approximate millions)	2021		2020		2021		2020
B&W Renewable(1)	$	44	$	31	$	81	$	65
B&W Environmental	27		11		68		56
B&W Thermal	97		43		188		174
Other/eliminations	—		(1)		—		(1)
Bookings	$	168	$	84	$	337	$	294


	As of June 30,
(In approximate millions)	2021		2020
B&W Renewable(1)	$	221	$	215
B&W Environmental	117		85
B&W Thermal	166		157
Other/eliminations	(4)		—
Backlog	$	500	$	457



(In approximate millions)	2017	2018	Thereafter	Total
Power	$155	$157	$170	$482
Renewable	129	232	703	1,064
Industrial	71	246	—	317
Other/eliminations	—	6	(43)	(37)
Backlog	$355	$641	$830	$1,826


	Three months ended June 30,								Six months ended June 30,
(In thousands, except for percentages)	2021			2020			$ Change		2021			2020			$ Change
Income (loss) before income taxes	$	6,687		$	(17,288)		$	23,975	$	(5,920)		$	(51,633)		$	45,713
Income tax expense	$	3,546		$	845		$	2,701	$	6,382		$	35		$	6,347
Effective tax rate	53.0		%	(4.9)		%			(107.8)		%	(0.1)		%



Period	Total number of shares purchased ^{(1) (2)}	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands)⁽³⁾
July 1, 2017 - July 31, 2017	3,620	$—	—	$100,000
August 1, 2017 - August 31, 2017	4,835,775	$10.52	—	$100,000
September 1, 2017 - September 30, 2017	944	$—	—	$100,000
Total	4,840,339		—