

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

~~THE HARRIS BUILDING~~20 SOUTH VAN BUREN AVENUE
~~13024 BALLANTYNE CORPORATE PLACE, SUITE 700~~BARBERTON, OHIO
~~CHARLOTTE, NORTH CAROLINA~~		~~28277~~44203
(Address of Principal Executive Offices)		(Zip Code)



Large accelerated filer	x ¨	Accelerated filer	¨ x

Non-accelerated filer	¨ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	¨ x

		Emerging growth company	¨



	Common Stock			Capital In Excess of Par Value		Treasury Stock			Accumulated Deficit			Accumulated Other Comprehensive Loss			Noncontrolling Interest			Total Stockholders’ Equity (Deficit)

	Shares ⁽¹⁾	Par Value
		(in thousands, except share and per share amounts)
Balance at December 31, 2017	4,407	$	499	$	800,968	$	(104,785	)	$	(492,150	)	$	(22,429	)	$	8,600		$	190,703

Net income	—	—		—		—			(120,433		)	—			98			(120,335		)
Revenue recognition	—	—		—		—			(472		)	—			—			(472		)
Currency translation adjustments	—	—		—		—			—			1,179			(25		)	1,154
Derivative financial instruments	—	—		—		—			—			(48		)	—			(48		)
Defined benefit obligations	—	—		—		—			—			(439		)	—			(439		)
Available-for-sale investments	—	—		—		—			38			(38		)	—			—
Stock-based compensation charges	—	4		149		(720		)	—			—			—			(567		)
Balance at March 31, 2018	4,407	$	503	$	801,117	$	(105,505	)	$	(613,017	)	$	(21,775	)	$	8,673		$	69,996
Net income	—	—		—		—			(265,768		)	—			165			(265,603		)
Currency translation adjustments	—	—		—		—			—			8,517			(40		)	8,477
Derivative financial instruments	—	—		—		—			—			(132		)	—			(132		)
Defined benefit obligations	—	—		—		—			—			(3,146		)	—			(3,146		)
Available-for-sale investments	—	—		—		—			(38		)	—			—			(38		)
Rights offering, net	12,426	1,243		243,907		—			—			—			—			245,150
Stock-based compensation charges	34	—		877		(26		)	—			—			—			851
Balance at June 30, 2018	16,867	$	1,746	$	1,045,901	$	(105,531	)	$	(878,823	)	$	(16,536	)	$	8,798		$	55,555

See accompanying notes to Condensed Consolidated Financial Statements.

See accompanying notes to ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

The accompanying ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. The ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements do not include any adjustments that might result from the outcome of the going concern uncertainty.

We face liquidity challenges from ~~additional~~ losses recognized ~~in the fourth quarter of 2017 and the first half of 2018~~ on our six European ~~renewable energy~~Vølund EPC loss contracts described in Note ~~5 to the condensed consolidated financial statements,~~4, which ~~caused us to be out of compliance with certain financial covenants in the agreements governing certain of our debt at December 31, 2017, March 31, 2018 and June 30, 2018. To avoid default, we obtained~~have required amendments and waivers to ~~our U.S. revolving~~maintain compliance with the Amended Credit Agreement, inclusive of Amendments No. 16 and No. 17. Our liquidity is provided under a credit ~~facility,~~agreement dated May 11, 2015, ~~(as~~as amended, ~~the "U.S.~~with a syndicate of lenders ("Amended Credit Agreement") that governs a revolving credit facility ("U.S. Revolving Credit Facility") ~~that temporarily waived these financial covenant defaults, as~~and our last out term loan facility ("Last Out Term Loans"). The Amended Credit Agreement and the amendments and waivers are described in more detail in Note ~~17.~~13, Note 14 and Note 18.

In July 2019, the Company completed the 2019 Rights Offering, as described in Note 17, to existing common stockholders. Because the rights issuance was offered to all existing stockholders at an exercise price that was less than the fair value of the stock, the weighted average shares outstanding and basic and diluted earnings (loss) per share were adjusted retroactively to reflect the bonus element of the rights offering for all periods presented by a factor of 1.0875. Weighted average shares, prior to giving effect to the 2019 Rights Offering, in the three months ended June 30, 2019 and 2018 were 16,888 thousand and 12,521 thousand, respectively. Weighted average shares, prior to giving effect to the 2019 Rights Offering, in the six months ended June 30, 2019 and 2018 were 16,884 thousand and 8,492 thousand, respectively.

Because we incurred a net loss in the three and six months ~~months~~ ended June 30, ~~2018~~2019 and ~~2017,~~2018, basic and diluted shares are the same.

If we had net income in the three months ended June 30, ~~2018~~2019 and ~~2017,~~2018, diluted shares would include an additional ~~0.8 million~~25.7 thousand and ~~0.3 million~~84.7 thousand shares, respectively. If we had net income in the six months ended June 30, ~~2018~~2019 and ~~2017,~~2018, diluted shares would include an additional ~~0.9 million~~35.8 thousand and ~~0.4 million~~93.5 thousand shares, respectively.

We excluded ~~3.2 million~~123.4 thousand and ~~1.9 million~~321.1 thousand shares related to stock options from the diluted share calculation for the three months ended June 30, ~~2018~~2019 and ~~2017,~~2018, respectively, because their effect would have been anti-dilutive. We excluded ~~2.5 million~~226.6 thousand and ~~1.9 million~~248.7 thousand shares related to stock options from the diluted share calculation for the six months ended June 30, ~~2018~~2019 and ~~2017,~~2018, respectively, because their effect would have been anti-dilutive.

Six Months Ended June 30,
(in thousands) 2018 2017
Depreciation and amortization $ 3,036
$ 5,307
Goodwill impairment $ 72,309
$ —
Provision for (benefit from) deferred income taxes $ (815 ) $ (275 )
Purchase of property, plant equipment $ 77
$ 486
Acquisition of Universal, net of cash acquired $ —
$ (52,547 )



	Three months ended June 30,						Six months ended June 30,
(in thousands)	2019			2018			2019			2018
Revenues:
Babcock & Wilcox segment
Retrofits	$	44,923		$	69,344		$	75,597		$	131,327
New build utility and environmental	55,377			42,194			124,284			55,041
Aftermarket parts and field engineering services	64,308			63,299			127,395			136,372
Industrial steam generation	49,357			28,464			96,367			43,370
Eliminations	(13,001		)	(5,549		)	(34,121		)	(9,232		)
	200,964			197,752			389,522			356,878
Vølund & Other Renewable segment
Renewable new build and services	31,553			40,077			61,086			84,788
Operations and maintenance services	2,313			14,925			2,873			30,172
Eliminations	(171		)	—			(732		)	—
	33,695			55,002			63,227			114,960
SPIG segment
New build cooling systems	17,385			33,699			38,391			62,744
Aftermarket cooling system services	7,303			12,316			15,474			20,015
Eliminations	(1,854		)	—			(2,129		)	—
	22,834			46,015			51,736			82,759

Eliminations	(9,378		)	(7,432		)	(24,434		)	(10,084		)
	$	248,115		$	291,337		$	480,051		$	544,513



	Three months ended June 30,						Six months ended June 30,
(in thousands)	2019			2018			2019			2018
Gross profit (loss)⁽¹⁾:
Babcock & Wilcox segment	$	37,853		$	30,013		$	68,959		$	60,876
Vølund & Other Renewable segment	5,057			(69,329		)	2,201			(119,778		)
SPIG segment	2,388			79			6,064			(2,672		)
Intangible amortization expense included in cost of operations	(1,014		)	(1,829		)	(2,071		)	(3,661		)
	44,284			(41,066		)	75,153			(65,235		)

Selling, general and administrative ("SG&A") expenses	(41,948		)	(46,948		)	(84,217		)	(106,120		)
Advisory fees and settlement costs	(4,778		)	(5,142		)	(18,388		)	(8,231		)
Intangible amortization expense included in SG&A	(128		)	(158		)	(258		)	(395		)
Goodwill impairment	—			(37,540		)	—			(37,540		)
Restructuring activities and spin-off transaction costs	(936		)	(3,826		)	(7,015		)	(10,688		)
Research and development costs	(710		)	(1,287		)	(1,453		)	(2,429		)
Loss on asset disposals, net	(42		)	(1,384		)	(42		)	(1,384		)
Equity in income and impairment of investees	—			—			—			(11,757		)
Operating loss	$	(4,258	)	$	(137,351	)	$	(36,220	)	$	(243,779	)

⁽¹⁾Intangible amortization is not allocated to the segments' gross profit, but depreciation is allocated to the segments' gross profit.



	Three months ended June 30,						Six months ended June 30,
(in thousands)	2019			2018			2019			2018
Adjusted EBITDA
Babcock & Wilcox segment⁽¹⁾	$	19,032		$	9,897		$	27,996		$	14,074
Vølund & Other Renewable segment	(779		)	(78,603		)	(9,642		)	(140,357		)
SPIG segment	(142		)	(6,222		)	517			(13,532		)
Corporate⁽²⁾	(9,367		)	(6,194		)	(14,351		)	(17,808		)
Research and development costs	(710		)	(1,287		)	(1,453		)	(2,429		)
	8,034			(82,409		)	3,067			(160,052		)

Restructuring activities and spin-off transaction costs	(936		)	(3,826		)	(7,015		)	(10,688		)
Financial advisory services	(3,197		)	(5,142		)	(7,155		)	(8,231		)
Settlement cost to exit Vølund contract⁽³⁾	—			—			(6,575		)	—
Advisory fees for settlement costs and liquidity planning	(1,581		)	—			(4,658		)	—
Goodwill impairment	—			(37,540		)	—			(37,540		)
Impairment of equity method investment in TBWES	—			—			—			(18,362		)
Gain on sale of equity method investment in BWBC	—			—			—			6,509
Depreciation & amortization	(6,536		)	(6,921		)	(13,842		)	(13,902		)
Loss on asset disposal	(42		)	(1,513		)	(42		)	(1,513		)
Operating loss	(4,258		)	(137,351		)	(36,220		)	(243,779		)
Interest expense, net	(26,636		)	(11,770		)	(37,211		)	(25,069		)
Loss on debt extinguishment	(3,969		)	(49,241		)	(3,969		)	(49,241		)
Loss on sale of business	(3,601		)	—			(3,601		)	—
Net pension benefit before MTM	3,333			6,542			6,761			13,539
MTM (gain) loss from benefit plans	(862		)	544			(1,260		)	544
Foreign exchange	9,506			(20,198		)	(647		)	(17,741		)
Other – net	43			(131		)	463			266
Loss before income tax expense	(26,444		)	(211,605		)	(75,684		)	(321,481		)
Income tax expense (benefit)	1,891			(1,934		)	2,517			5,029
Loss from continuing operations	(28,335		)	(209,671		)	(78,201		)	(326,510		)
Gain (loss) from discontinued operations, net of tax	694			(55,932		)	694			(59,428		)
Net loss	(27,641		)	(265,603		)	(77,507		)	(385,938		)
Net income (loss) attributable to noncontrolling interest	1			(165		)	102			(263		)
Net loss attributable to stockholders	$	(27,640	)	$	(265,768	)	$	(77,405	)	$	(386,201	)

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.

The charges recorded in the three and six months ended June 30, 2018 and June 30, 2017 were due to revisions in the estimated revenues and costs at completion during the period across the six loss contracts described below. Also, as described in Note 17, the August 9, 2018 amendment to the U.S. Revolving Credit Facility requires $25.0 million of concessions from customers on these Renewable loss contracts to be secured by August 31, 2018; however, these concessions have not been included in the contract estimates as of June 30, 2018 because they remained unsigned as of the filing date of these condensed consolidated financial statements. As of June 30, 2019, five of the six European Vølund EPC loss contracts had been turned over to the customer, with only punch list or agreed remediation items and performance testing remaining, some of which are expected to be performed during the customers' scheduled maintenance outages. Turnover is not applicable to the fifth loss contract under the terms of the March 29, 2019 settlement agreement with the customers of the second and fifth loss contracts, who are related parties to each other. Under that settlement agreement, we limited our remaining risk related to these contracts by paying a combined £70 million ($91.5 million) on April 5, 2019 in exchange for limiting and further defining our obligations under the second and fifth loss contracts, including waiver of the rejection and termination rights on the fifth loss contract that could have resulted in repayment of all monies paid to us and our former civil construction partner (up to approximately $144 million), and requirement to restore the property to its original state if the customer exercised this contractual rejection right. On the fifth loss contract, we agreed to continue to support construction services to complete certain key systems of the plant by May 31, 2019, for which penalty for failure to complete these systems is limited to the unspent portion of our quoted cost of the activities through that date. The settlement eliminated all historical claims and remaining liquidated damages. Upon completion of these activities in accordance with the settlement, we will have no further obligation related to the fifth loss contract other than customary warranty of core products if the plant is used as a biomass plant as designed. We estimated the portion of this settlement related to waiver of the rejection right on the fifth project was $81.1 million, which was recorded in the fourth quarter of 2018 as a reduction in the selling price. We are still pursuing insurance recoveries and claims against subcontractors. For the second loss project, the settlement limited the remaining performance obligations and settled historic claims for nonconformance and delays, and we turned over the plant in May 2019, and subsequently began the operations and maintenance contract to operate this plant.

During the three and six months ended June 30, 2019, we recognized additional charges of $1.3 million and $1.5 million, respectively, on our other Vølund renewable energy projects that are not loss contracts. During the three and six months

ended June 30, 2018, we did not recognize additional losses on our other Vølund renewable energy projects that are not loss contracts.

In September 2017, we identified the failure of a structural steel beam on the fifth contract, which stopped work in the boiler building and other areas pending corrective actions to stabilize the structure. Provisional regulatory approval to begin structural repairs to the failed beam was obtained ~~at the end of~~on March 29, 2018 (later than previously estimated), and full approval to proceed with repairs was obtained in April 2018. Full access to the site was obtained inon June 6, 2018 after completion of the repairs to the structure. The engineering, design and manufacturing of the steel structure were the responsibility of our subcontractors. A similar design was also used on the second and fourth contracts, and although no structural failure occurred on these two other contracts, work was also stopped in certain restricted areas while we added reinforcement to the structures, which also resulted in delays that lasted until late January 2018. The total costs related to the structural steel issues on these three contracts, including contract delays, are estimated to be approximately ~~$46~~$36 million, which is included in the June 30, ~~2018~~2019 estimated losses at completion for these three contracts. We are continuing to aggressively pursue recovery of this cost under various applicable insurance policies and from responsible subcontractors. In June 2019, we agreed in principle to a settlement agreement under one insurance policy related to recover GBP 2.8 million ($3.5 million) of certain losses on the fifth project; we also recorded this recovery in accounts receivable - other in our Condensed Consolidated Balance Sheet as of June 30, 2019.

In March 2019, we entered into a settlement in connection with an ~~allowance~~additional European waste-to-energy EPC contract, for which notice to proceed was not given and the contract was not started. The £5.0 million (approximately $6.6 million) payment on April 5, 2019 for the ~~entire receivable~~settlement eliminates our obligations and our risk related to acting as the prime EPC should the project have moved forward.

At June 30, 2019, SPIG had one significant loss contract, which is a contract to engineer, procure materials and then construct a dry cooling system for a gas-fired power plant in the U.S. At June 30, 2019, the design and procurement are substantially complete, and construction is nearing completion. Overall, the contract is 97% complete and it is expected be fully complete in mid-2019. As of June 30, 2019, the reserve for estimated contract losses recorded in other accrued liabilities in our Condensed Consolidated Balance Sheets was $0.5 million related to this contract. Construction is being performed by the Babcock & Wilcox segment, but the contract loss is included in the SPIG segment.



(in thousands)	June 30, 2019		December 31, 2018
Raw materials and supplies	$	45,931	$	44,833
Work in progress	6,142		5,348
Finished goods	11,755		11,142
Total inventories	$	63,828	$	61,323



(in thousands)	June 30, 2019		December 31, 2018
Land	$	3,568	$	3,575
Buildings	106,182		106,238
Machinery and equipment	176,928		181,825
Property under construction	2,381		2,290
	289,059		293,928
Less accumulated depreciation	211,054		203,036
Net property, plant and equipment	$	78,005	$	90,892

The following summarizes the changes in the net carrying amount of goodwill as of June 30, 2019:



(in thousands)	Babcock & Wilcox
Balance at December 31, 2018	$	47,108
Currency translation adjustments	5
Balance at June 30, 2019	$	47,113

In January 2017, the Financial Accounting Standards Board ("FASB") issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment (ASU 2017-04). The standard simplifies the subsequent measurement of goodwill by removing the requirement to perform a hypothetical purchase price allocation to compute the implied fair value of goodwill to measure impairment. Instead, goodwill impairment is measured as the difference between the fair value of the reporting unit and the carrying value of the reporting unit. The standard also clarifies the treatment of the income tax effect of tax-deductible goodwill when measuring goodwill impairment loss. We early adopted ASU 2017-04 on April 1, 2018, effective the first day of our 2018 second quarter.

NOTE 9– LEASES

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). We adopted this new standard on January 1, 2019 and used the effective date as our date of initial application while continuing to present the comparative periods in accordance with the guidance under the lease standard in effect during those prior periods in the Condensed Consolidated Financial Statements. We recorded an immaterial cumulative-effect adjustment to the opening balance of retained earnings on the date of adoption. We elected the "package of practical expedients", which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. However, we did not elect to adopt the hindsight practical expedient and are therefore maintaining the lease terms we previously determined under ASC 840.

We determine if an arrangement is a lease at inception. Leases are included in Right-of-use ("ROU") assets, lease liabilities and noncurrent lease liabilities in the Condensed Consolidated Balance Sheets. ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As substantially all of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at lease commencement date in determining the present value of future payments. The ROU assets also include any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease, which we recognize when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

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

In September 2018, we announced that we would consolidate most of our Barberton and Copley, Ohio operations into new, leased office space in Akron, Ohio. The move to the new, leased office space is expected to occur during the fourth quarter of 2019. As of June 30, 2019, the operating lease agreement for the office space in Akron had not yet commenced; it will commence when it is ready for occupation. The lease has an initial term of fifteen years, with an option to extend up to two additional ten-year terms. Base rent will increase two percent annually, making the total future minimum payments during the initial term of the lease approximately $55 million. This lease, which has not yet commenced, is not included in the following tables.

The components of lease expense were as follows:



(in thousands)	Three months ended June 30, 2019			Six months ended June 30, 2019
Operating lease expense	$	1,589		$	3,498
Short-term lease expense	2,335			5,196
Variable lease expense	871			983
Sublease income ⁽¹⁾	(14		)	(24		)
Total lease expense	$	4,781		$	9,653



(in thousands)	Three months ended June 30, 2019		Six months ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from leases	$	1,560	$	3,661
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	812	$	1,013

Amounts relating to leases were presented in the Condensed Consolidated Balance Sheets as of June 30, 2019 in the following line items:



(in thousands, except lease term and discount rate)	June 30, 2019
Right-of-use assets	$	13,121

Liabilities:
Lease liabilities	$	4,229
Noncurrent lease liabilities	8,816
Total lease liabilities	$	13,045

Weighted-average remaining lease term:
Operating leases (in years)	3.61
Weighted-average discount rate:
Operating leases	9.47		%

Future minimum lease payments required under non-cancellable operating leases as of June 30, 2019 were as follows:



(in thousands)
Six months ending December 31, 2019	$	2,702
Twelve months ending December 31, 2020	4,774
Twelve months ending December 31, 2021	3,332
Twelve months ending December 31, 2022	2,155
Twelve months ending December 31, 2023	1,417
Thereafter	899
Total	$	15,279
Less imputed interest	(2,234		)
Lease liability	$	13,045



(in thousands)
Three months ended June 30, 2019	Total severance and related costs
Babcock & Wilcox segment	$	127
Vølund & Other Renewable segment	437
SPIG segment	258
Corporate	114
	$	936

~~At the end of June~~



(in thousands)
Six months ended June 30, 2019	Total severance and related costs
Babcock & Wilcox segment	$	4,075
Vølund & Other Renewable segment	1,015
SPIG segment	401
Corporate	1,524
	$	7,015



(in thousands)
Three months ended June 30, 2018	Severance and related costs			Exit costs		Spin-off transaction costs			Total
Babcock & Wilcox segment	$	2,768		$	6	$	—		$	2,774
Vølund & Other Renewable segment	(53		)	—		—			(53		)
SPIG segment	366			—		—			366
Corporate	785			—		(46		)	739
	$	3,866		$	6	$	(46	)	$	3,826



(in thousands)
Six months ended June 30, 2018	Severance and related costs		Exit costs		Spin-off transaction costs		Total
Babcock & Wilcox segment	$	3,860	$	150	$	—	$	4,010
Vølund & Other Renewable segment	441		—		—		441
SPIG segment	750		—		—		750
Corporate	5,157		—		330		5,487
	$	10,208	$	150	$	330	$	10,688



	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)	2019			2018			2019			2018			2019			2018			2019			2018
Interest cost	$	10,965		$	9,741		$	21,822		$	19,498		$	119		$	95		$	239		$	192
Expected return on plan assets	(13,905		)	(16,215		)	(27,799		)	(32,445		)	—			—			—			—
Amortization of prior service cost	27			25			55			50			(539		)	(188		)	(1,078		)	(834		)
Recognized net actuarial loss (gain)	862			(544		)	1,260			(544		)	—			—			—			—
Benefit plans, net⁽¹⁾	(2,051		)	(6,993		)	(4,662		)	(13,441		)	(420		)	(93		)	(839		)	(642		)
Service cost included in COS⁽²⁾	150			187			300			376			4			4			8			8
Net periodic benefit (benefit) cost	$	(1,901	)	$	(6,806	)	$	(4,362	)	$	(13,065	)	$	(416	)	$	(89	)	$	(831	)	$	(634	)

The Amended Credit Agreement and our cash management agreements with our lenders and their affiliates continue to be (1) guaranteed by substantially all of our wholly owned domestic subsidiaries and certain of our foreign subsidiaries, but excluding our captive insurance subsidiary, and (2) secured by first-priority liens on certain assets owned by us and the guarantors. The U.S. Revolving Credit Facility 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, with the exception to the prepayment of certain Last Out Term Loans pursuant to the Equitization Transactions described in Note 18; such Last Out Term Loan prepayments are further limited by an aggregate principal amount of $86 million plus interest. The U.S. Revolving Credit Facility requires certain prepayments on any outstanding revolving loans after receipt of cash proceeds from certain asset sales or other events, subject to certain exceptions. Such prepayments may require us to reduce the commitments under the U.S. Revolving Credit Facility by a corresponding amount of such prepayments.

After giving effect to the Amendments through June 30, 2019, revolving loans outstanding under the U.S. Revolving Credit Facility bear interest at our option at either (1) the LIBOR rate plus 6.0% per annum during 2019 and 7.0% per annum during 2020, or (2) the Base Rate plus 5.0% per annum during 2019, and 6.0% per annum during 2020. The Base Rate is 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. The components of our interest expense are detailed in Note 19. A commitment fee of 1.0% per annum is charged on the unused portions of the U.S. Revolving Credit Facility. Additionally, an annual facility fee of $1.5 million was paid on the first business day of 2019, and a pro-rated amount is payable on the first business day of 2020. A deferred fee reduction from 2.5% to 1.5% became effective October 10, 2018, due to achieving certain asset sales. A letter of credit fee of 2.5% per annum is charged with respect to the amount of each financial letter of credit outstanding, and a letter of credit fee of 1.5% per annum is charged with respect to the amount of each performance and commercial letter of credit outstanding. Letter of credit fees are payable on the tenth business day after the last business day of each fiscal quarter.

In connection with Amendment No. 16, a contingent consent fee of $13.9 million (4.0% of total availability) is payable on December 15, 2019, but will be waived if certain actions are undertaken to refinance the facility by that date. We recorded the contingent consent fee as part of deferred financing fees in other current assets in the Condensed Consolidated Balance Sheets because it has been earned but may be waived, and it is being amortized to interest expense. See further discussion in Note 19. Amendment No. 16 to the U.S. Revolving Credit Facility also established a deferred ticking fee of 1.0% of total availability that is payable if certain actions are not undertaken to refinance the facility by December 15, 2019, in addition to an incremental 1.0% per month after December 15, 2019. No expense has been recognized for the deferred ticking fee because the company believes it is not probable of being earned by the lenders.

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. These include a maximum permitted senior debt leverage ratio

and a minimum consolidated interest coverage ratio, each as defined in the Amended Credit Agreement. Compliance with these ratios was waived with respect to the quarter ended December 31, 2018 and new ratios were established in Amendment No. 16 commencing with the quarter ended March 31, 2019. Amendment No. 16 also, among other items, (1) modifies the definition of EBITDA in the Credit Agreement to, among other things, include addbacks related to losses in connection with the Vølund projects, fees and expenses related to the Amendment and prior waivers to the Credit Agreement and fees associated with Vølund project related settlement agreements, (2) reduces to $30 million the minimum liquidity we are required to maintain at the time of any credit extension request and at the last business day of any calendar month, (3) allows for the issuance of up to $20.0 million of new letters of credit with respect to any future Vølund project, (4) changes the consolidated interest coverage and senior leverage coverage covenant ratios, (5) decreases the relief period borrowing sublimit, (6) changes or removes certain contract completion milestones that we had been required to meet in connection with one renewable energy project, (7) permits letters of credit to expire one year after the maturity of the revolving credit facility, (8) creates a new event of default for failure to terminate the existing revolving credit facility on or prior to March 15, 2020, (9) establishes a deferred ticking fee of 1.0% if certain actions are not undertaken to refinance the facility by December 15, 2019, in addition to an incremental 1.0% per month after December 15, 2019 and (10) provides for a contingent consent fee of 4.0% if certain actions are not undertaken to refinance the facility by December 15, 2019. Amendment No. 17, among other items, (1) clarifies from Amendment No. 16 the definition of the amounts that can be used in calculating the loss basket for certain Vølund contracts, and (2) resets the loss basket for certain Vølund contracts to $15.0 million to align with the clarification commencing with the quarter ending March 31, 2019.

Effective beginning April 5, 2019 with Amendment No. 16, the remaining maximum permitted senior debt leverage ratios, as defined in the Amended Credit Agreement, are as follows:

Effective beginning April 5, 2019 with Amendment No. 16, the remaining minimum consolidated interest coverage ratios, as defined in the Amended Credit Agreement, are as follows:



	December 31, 2018
(in thousands)	A-1			A-2		A-3		Total
Proceeds	$	30,000		$	—	$	—	$	30,000
Discount and fees	5,111			—		—		5,111
Paid-in-kind interest	132			—		—		132
Principal	35,243			—		—		35,243
Unamortized discount and fees	(4,594		)	—		—		(4,594		)
Net debt balance	$	30,649		$	—	$	—	$	30,649

As of June 30, 2019, after giving effect to Amendment No. 16, all outstanding Last Out Term Loans bear interest at a fixed rate per annum of 15.5% per annum. of which 7.5% is payable in cash and 8% is payable in kind. Upon completion of the 2019 Rights Offering (as defined below) on July 23, 2019, the interest rate on all outstanding Last Out Term Loans under the Amended Credit Agreement became a fixed rate per annum of 12% payable in cash. The total effective interest rate of Tranche A-1 was 15.98% and 25.38% on June 30, 2019 and December 31, 2018, respectively. Interest expense associated with the Last Out Term Loans is detailed in Note 19. Amendment No. 16 also permitted prepayment of up to $86.0 million of the Last Out Term Loans as contemplated under the Equitization Transactions described in Note 18.

We borrowed $30.0 million of net proceeds under Tranche A-1 of the Last Out Term Loans from B. Riley FBR, Inc., a related party, in three draws in September and October 2018. In November 2018, Tranche A-1 was assigned to Vintage Capital Management, LLC ("Vintage"), also a related party, who held the full amount of Tranche A-1 at June 30, 2019. The original face principal amount of Tranche A-1 is $30.0 million, which excludes a $2.0 million up-front fee that was added to the principal balance on the first funding date, transaction expenses, paid-in-kind interest, and original issue discounts of 10% for each draw under Tranche A-1.

On April 5, 2019, Amendment No. 16 and the Letter Agreement (defined in Note 18) modified Tranche A-1 by adding a substantive conversion option that required the conversion of the Tranche A-1 to common stock at $0.30 per share in connection with the Equitization Transactions described in Note 18, which was conditioned upon, among other things, the closing of the 2019 Rights Offering and shareholder approval. Under U.S. GAAP, a debt modification with the same borrower that results in substantially different terms is accounted for as an extinguishment of the existing debt and a reborrowing of new debt. An extinguishment gain or loss is then recognized based on the fair value of the new debt as compared to the carrying value of the extinguished debt. The carrying value of the Tranche A-1 was $33.3 million on April 5, 2019 before the modification. The initial fair value of the new debt was estimated to be its initial principal value of $37.3 million. We recognized a loss on debt extinguishment of $4.0 million in the quarter ended June 30, 2019, primarily representing the unamortized value of the original issuance discount and fees on the extinguished debt.

As of June 30, 2019, Tranche A-1 was payable in full on December 31, 2020, the maturity date. Tranche A-1 may be prepaid, subject to the subordination provisions, but not re-borrowed. As described in Note 18, Tranche A-1 was exchanged for shares on July 23, 2019, after which no remaining amounts were outstanding.

Under Amendment No. 16, we borrowed $150.0 million face value from B. Riley, a related party, under a Tranche A-3 of Last Out Term Loans. The $141.4 million net proceeds from Tranche A-3 were primarily used to pay the amounts due under the settlement agreements covering certain European Vølund loss projects as described in Note 4, with the remainder used for working capital and general corporate purposes. Tranche A-3 included an original issue discount of 3.2% of the gross cash proceeds. An additional discount was recorded upon shareholder approval of the warrants and Equitization Transactions. These additional discounts totaled $8.1 million, which included $6.1 million for the estimated fair value of warrants issued to B. Riley, a related party, as described in Note 15 and Note 18 and $2.0 million for the intrinsic value of the beneficial conversion feature that allows conversion of a portion of the Tranche A-3 to equity under the Backstop Commitment described in Note 18. Both the warrants and the Backstop Commitment were contemplated in connection of the original extension of Tranche A-3.

Interest rates for Tranche A-3 are described above. The total effective interest rate of Tranche A-3 was 23.79% on June 30, 2019. Tranche A-3 may be prepaid, subject to the subordination provisions and as contemplated under the Equitization

Transactions as described above and in Note 18, but not re-borrowed. As part of the July 23, 2019 Equitization Transactions described in Note 18, the total prepayment of principal of Tranche A-3 of the Last Out Term Loans was $39.7 million inclusive of the $8.2 million of principal value exchanged for common shares under the Backstop Commitment.

Immediately after completion of the Equitization Transactions, the Tranches A-1 and A-2 of the Last Out Term Loans were fully extinguished, and $114.0 million including accrued paid-in-kind interest was outstanding on Tranche A-3, and it bears interest at a fixed rate of 12.0% per annum payable in cash.



Stock price	$	0.385
Exercise price	$	0.010
Time to expiration	3 years
Annualized volatility	121.00		%
Annual rate of quarterly dividends	—		%
Discount rate - bond equivalent rate	2.30		%
Expiration of option	April 5, 2022
Warrant value	$	0.38

On June 14, 2019, after approval of the stockholders at the Company's annual meeting of stockholders, the Company amended its Amended and Restated Certificate of Incorporation to increase the authorized number of shares of the Company's common stock from 200,000,000 shares to 500,000,000 shares to allow for the Equitization Transactions described in Note 18. The reverse stock split on July 24, 2019, described in Note 1 did not affect the number of authorized shares.

On June 14, 2019, at the Company's annual meeting of stockholders, upon the recommendation of the Company's Board of Directors, the stockholders approved the Babcock & Wilcox Enterprises, Inc. Amended and Restated 2015 Long-Term Incentive Plan (amended and restated as of June 14, 2019) (the "Fourth Amended and Restated 2015 LTIP"), which became effective upon such stockholder approval. The Fourth Amended and Restated 2015 LTIP, among other immaterial changes, increases the number of shares available for awards by 17,000,000 shares to a total of 29,271,731 shares of the Company's common stock, subject to adjustment as provided under the plan document. The increase in the maximum number of shares available for awards will allow us to establish the previously announced equity pool of 16,666,666 shares of its common stock for issuance for long-term incentive planning purposes. The shares available for award under the plan are subject to equitable adjustment for the reverse stock split described in Note 1 and other dilutive and antidilutive events.

Immediately after completion of the Equitization Transactions, Tranches A-1 and A-2 of the Last Out Term Loans were fully extinguished, and Tranche A-3 of the Last Out Term Loans had a balance of $114.0 million, including accrued paid-in-kind interest, which bears interest at a fixed rate of 12.0% per annum payable in cash and continues to bear the other terms described in Note 14. Based on Schedule 13D filings made by B. Riley and Vintage, as a result of the Equitization Transactions, Vintage increased its beneficial ownership in us to 32.8% and B. Riley increased its beneficial ownership in us to 18.4% inclusive of the outstanding warrants held by B. Riley.



	Six months ended June 30,
(in thousands)	2019		2018
Accrued capital expenditures in accounts payable	$	—	$	123
Accreted interest expense on our Second Lien Term Loan Facility	$	—	$	3,202



	Six months ended June 30,
(in thousands)	2019		2018
Income tax payments (refunds), net	$	32	$	2,938

Interest payments on our U.S. Revolving Credit Facility	$	6,921	$	4,599
Interest payments on our Last Out Term Loans	1,022		—
Interest payments on our Second Lien Term Loan Facility	—		7,627
Total cash paid for interest	$	7,943	$	12,226



	Three months ended June 30,				Six months ended June 30,
(in thousands)	2019		2018		2019		2018
Components associated with borrowings from:
U.S. Revolving Credit Facility	$	3,801	$	3,434	$	7,351	$	5,779
Last Out Term Loans - cash interest	3,606		—		4,119		—
Last Out Term Loans - paid-in-kind interest	3,881		—		4,941		—
Second Lien Term Loan Facility	—		2,191		—		7,460
Foreign Revolving Credit Facilities	—		145		—		279
	11,288		5,770		16,411		13,518
Components associated with amortization or accretion of:
U.S. Revolving Credit Facility - deferred financing fees and commitment fees	8,880		5,113		14,149		8,314
U.S. Revolving Credit Facility - contingent consent fee for Amendment 16 ⁽¹⁾	4,674		—		4,674		—
Last Out Term Loans - discount and financing fees	1,479		—		2,069		—
Second Lien Term Loan Facility - discount and financing fees	—		833		—		3,202
	15,033		5,946		20,892		11,516

Other interest expense	516		161		668		295

Total interest expense	$	26,837	$	11,877	$	37,971	$	25,329

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



(in thousands)	June 30, 2019		December 31, 2018		June 30, 2018		December 31, 2017
Held by foreign entities	$	30,932	$	35,522	$	27,955	$	42,490
Held by United States entities	4,258		7,692		557		1,227
Cash and cash equivalents of continuing operations	35,190		43,214		28,512		43,717

Reinsurance reserve requirements	5,350		11,768		25,269		21,061
Restricted foreign accounts	3,830		5,297		6,442		4,919
Sale proceeds held in escrow	—		—		591		—
Restricted cash and cash equivalents	9,180		17,065		32,302		25,980
Total cash, cash equivalents and restricted cash of continuing operations shown in the Condensed Consolidated Statements of Cash Flows	$	44,370	$	60,279	$	60,814	$	69,697

Total cash and cash equivalents of discontinued operations	$	—	$	—	$	10,437	$	12,950

Our U.S. Revolving Credit Facility described in Note 13 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.

In the three months ended June 30, 2019, income tax expense was $1.9 million, resulting in an effective tax rate of (7.15)%. We are subject to federal income tax in the United States and numerous countries that have statutory tax rates different than the U.S. 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 19% and approximately 30%. We provide for income taxes based on the tax laws and rates in the jurisdictions in which we conduct our operations. These jurisdictions may have regimes of taxation that vary with respect to both nominal rates and the basis on which these rates are applied. Our consolidated effective income tax rate can vary significantly from period to period due to these variations, changes in jurisdictional mix of our income and valuation allowances in certain jurisdictions that can offset income tax expense or benefit.

The United States Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017 and introduced significant changes to the United States income tax law. Beginning in 2018, the Tax Act reduced the United States statutory corporate income tax rate from 35% to 21% and created a modified territorial system that will generally allow United States companies a full dividend received deduction for any future dividends from non-U.S. subsidiaries. In addition to the tax rate reduction and changes to the territorial nature of the US tax system, the Tax Act introduced a new limitation on interest deductions, a Foreign Derived Intangible Income (“FDII”) and new minimum tax on foreign sourced income, Global Low Taxed Intangible Income (“GILTI”). The Company will account for GILTI as a period cost in the year the tax is incurred. In 2019, we do not anticipate any FDII benefit or GILTI taxes but expect an interest limitation. This disallowed interest expense will be available for carryforward and is not subject to expiration but can only be used in a future year when the net interest expense for that period (including carryforward amounts) exceeds the relevant annual limitation.

On March 3, 2017 and March 13, 2017, the Company and certain of its former officers were named as defendants in two separate but largely identical complaints alleging violations of the federal securities laws. The two complaints were brought on behalf of a 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. Through subsequent amendments, the putative class period was expanded to include 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 certain projects undertaken by the Vølund & Other 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 later disclosed that it would incur losses on these projects. The plaintiff seeks an unspecified amount of damages.

We believe the allegations in the Stockholder Litigation were 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

On February 16, 2018 and February 22, 2018, the Company and certain of its present and former officers and directors were named as defendants in three separate but substantially similar derivative lawsuits filed in the United States District Court for the District of Delaware (the "Federal Court Derivative Litigation"). On April 23, 2018, the United States District Court for the District of Delaware entered an order consolidating the related derivative actions and designating co-lead and co-liaison counsel. On June 1, 2018, plaintiffs filed a consolidated derivative complaint. Plaintiffs assert a variety of claims against the defendants including alleged violations of the federal securities laws, waste, breach of fiduciary duties and unjust enrichment. Plaintiffs, who purport to be current stockholders of the Company's common stock, are suing on behalf of the Company to recover costs and an unspecified amount of damages, and to force the implementation of certain corporate governance changes. On June 28, 2018, the Federal Court Derivative Litigation was transferred to the United States District Court for the Western District of North Carolina, where the Stockholder Litigation is pending. The parties filed a motion to stay the Federal Court Derivative Litigation, which was granted by the Court on August 13, 2018.

On November 14, 2018, the Company and certain of its present and former officers and directors were named as defendants in an additional shareholder derivative lawsuit filed in the North Carolina Superior Court (the "State Court Derivative Litigation"). The complaint in that action covers the same period and contains allegations substantially similar to those asserted in the pending Federal Court Derivative Litigation.

The parties to the Federal Court and State Court Derivative Litigations held a mediation on April 17, 2019 in an attempt to resolve these pending matters. At this mediation, the parties reached an agreement in principle with plaintiffs' counsel to resolve these cases based on certain corporate governance changes that the Company has already implemented or is willing to implement in the future and payment by certain of the Company's insurance carriers of $1 million in attorneys' fees and expenses to plaintiffs' counsel. There is no other monetary payment associated with this settlement. The parties subsequently executed a stipulation of settlement and have submitted it to the Federal Court for its preliminary approval.

On May 28, 2019, a putative class action complaint was filed against the Board in the Court of Chancery of the State of Delaware. The complaint is captioned Price v. Avril, et al., C.A. No. 2019-0393-JRS (Del. Ch.). The complaint asserted, among other things, that the Board breached their fiduciary duties by failing to disclose all material information necessary for a fully-informed vote on certain of the proposals presented for consideration at the annual meeting of the Company's stockholders. The plaintiff also filed a motion to preliminarily enjoin the stockholder vote on the proposals unless and until all material information regarding the proposals was disclosed to the Company’s stockholders. The plaintiff withdrew her motion to preliminarily enjoin the stockholder vote on the proposals following the Company’s issuance of a supplemental proxy statement on June 6, 2019. The Court granted the plaintiff's request to voluntarily dismiss this action with prejudice on July 31, 2019, and retained jurisdiction solely for the purpose of adjudicating an anticipated application for attorneys' fees and expenses incurred by plaintiff's counsel.

In addition, on June 3, 2019, a second putative class action complaint was filed against the Company, the Board and Mr. Young in the United States District Court for the District of Delaware. The complaint is captioned Kent v. Babcock & Wilcox Enterprises, Inc., et. al., No. 1:19-cv-01032-MN (D. Del.). The complaint asserts, among other things, claims under Sections 14(a) and 20(a) of the Exchange Act for allegedly disseminating a materially incomplete and misleading proxy statement in connection with the Equitization Transactions, which was filed with the SEC on May 13, 2019. The complaint seeks an order rescinding the Equitization Transactions or, in the alternative, awarding monetary damages as well as other relief. The plaintiff has yet to serve process on the Company, the Board or Mr. Young in this action. The Company, the Board and Mr. Young believe that the plaintiff’s allegations in the complaint lack merit and intend to vigorously defend against the action.

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.

(in thousands) Currency translation gain (loss)
Net unrealized gain (loss) on investments (net of tax)¹
Net unrealized gain (loss) on derivative instruments Net unrecognized gain (loss) related to benefit plans (net of tax) Total
Balance at December 31, 2017 $ (27,837 ) $ 38
$ 1,737
$ 3,633
$ (22,429 )
Impact of ASU 2016-1 on changes in the components of AOCI, net of tax ⁽¹⁾
—
(38 ) —
—
(38 )
Other comprehensive income (loss) before reclassifications 3,223
—
1,224
(55 ) 4,392
Amounts reclassified from AOCI to net income (loss) (2,044 ) —
(1,272 ) (384 ) (3,700 )
Net current-period other comprehensive income (loss) 1,179
—
(48 ) (439 ) 692
Balance at March 31, 2018 $ (26,658 ) $ —
$ 1,689
$ 3,194
$ (21,775 )
Other comprehensive income (loss) before reclassifications 8,517
—
(513 ) 112
8,116
Amounts reclassified from AOCI to net income (loss) —
—
381
(427 ) (46 )
Amounts reclassified from AOCI to pension, other accumulated postretirement benefit liabilities and deferred income taxes⁽²⁾
—
—
—
(2,831 ) (2,831 )
Net current-period other comprehensive income (loss) 8,517
—
(132 ) (3,146 ) 5,239
Balance at June 30, 2018 $ (18,141 ) $ —
$ 1,557
$ 48
$ (16,536 )



(in thousands)	Currency translation (loss) gain			Net unrealized gain (loss) on derivative instruments ⁽¹⁾			Net unrecognized loss related to benefit plans (net of tax)			Total
Balance at December 31, 2018	$	(10,834	)	$	1,362		$	(1,960	)	$	(11,432	)
Other comprehensive income (loss) before reclassifications	10,260			(1,178		)	—			9,082
Reclassified from AOCI to net income (loss)	—			224			(356		)	(132		)
Net other comprehensive income (loss)	10,260			(954		)	(356		)	8,950
Balance at March 31, 2019	$	(574	)	$	408		$	(2,316	)	$	(2,482	)
Other comprehensive loss before reclassifications	(7,979		)	(189		)	—			(8,168		)
Reclassified from AOCI to net income (loss)	3,176			(22		)	(514		)	2,640
Net other comprehensive (loss) income	(4,803		)	(211		)	(514		)	(5,528		)
Balance at June 30, 2019	$	(5,377	)	$	197		$	(2,830	)	$	(8,010	)

(in thousands) Currency translation gain (loss) Net unrealized gain (loss) on investments (net of tax) Net unrealized gain (loss) on derivative instruments 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 )



(in thousands)	Currency translation (loss) gain			Net unrealized gain (loss) on investments (net of tax)			Net unrealized gain (loss) on derivative instruments			Net unrecognized gain (loss) related to benefit plans (net of tax)			Total
Balance at December 31, 2017	$	(27,837	)	$	38		$	1,737		$	3,633		$	(22,429	)
ASU 2016-1 cumulative adjustment⁽¹⁾	—			(38		)	—			—			(38		)
Other comprehensive income (loss) before reclassifications	3,223			—			1,224			(55		)	4,392
Reclassified from AOCI to net (loss) income	(2,044		)	—			(1,272		)	(384		)	(3,700		)
Net other comprehensive income (loss)	1,179			(38		)	(48		)	(439		)	654
Balance at March 31, 2018	$	(26,658	)	$	—		$	1,689		$	3,194		$	(21,775	)
Other comprehensive income (loss) before reclassifications	8,517			—			(513		)	112			8,116
Reclassified from AOCI to net income (loss)	—			—			381			(427		)	(46		)
Amounts reclassified from AOCI to pension, other accumulated postretirement benefit liabilities and deferred income taxes	—			—			—			(2,831		)	(2,831		)
Net other comprehensive income (loss)	8,517			—			(132		)	(3,146		)	5,239
Balance at June 30, 2018	$	(18,141	)	$	—		$	1,557		$	48		$	(16,536	)

~~Our interim goodwill~~Property, plant and equipment amounts are reviewed for impairment ~~tests and second quarter 2018~~whenever events or changes in circumstances indicate that the carrying amount of an asset, or asset group, may not be recoverable. An impairment ~~charges required significant fair value measurements using unobservable inputs (see Note 12). The fair value~~loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the ~~reporting unit was~~asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset carrying value over its fair value. Fair value is generally determined based on an income approach using a discounted cash flow analysis ~~a market approach using multiples of revenue and EBITDA of guideline companies, and a market approach using multiples of revenue and EBITDA from recent, similar business combinations.~~

B. Riley Financial, Inc. and its affiliates became the beneficial owner of greater than five percent of our common stock in May 2018, upon completion of the 2018 Rights Offering described in Note 17. Based on its Schedule 13D filing made on May 7, 2019, B. Riley beneficially owned 6.6% of our outstanding common stock as of June 30, ~~2018 and 2017, we recognized~~2019. Based on its Schedule 13D filings following the ~~following non-cash activity~~completion of the Equitization Transactions described in Note 18, B. Riley beneficially owns 18.4% of our ~~condensed consolidated financial statements:~~

~~During~~B. Riley is party to the ~~six months ended~~Last Out Term Loans as described in Note 14 and Note 18 and was a party to the Equitization Transactions described in Note 18, which included providing the Backstop Commitment to the 2019 Rights Offering described in Note 17 and Note 18 and receiving warrants as described in Note 15 and Note 18.

Based on its Schedule 13D filing on May 2, 2019, Vintage beneficially owned 14.9% of our outstanding common stock as of June 30, 2019. Based on its Schedule 13D filings following the completion of the Equitization Transactions described in Note 18, Vintage beneficially owns 32.8% of our outstanding common stock as of July 23, 2019.

Vintage was a party to Tranche A-1 of the Last Out Term Loans as described in Note 14 and Note 18 and was a party to the Equitization Transactions described in Note 18, which included participation in the 2019 Rights Offering described in Note 17 and Note 18 and conversion of Tranche A-1 of the Last Out Term Loans in the Debt Exchange as described in Note 14 and Note 18. Prior to Debt Exchange, $6.0 million of Tranche A-1 had been transferred or sold to affiliates of B. Riley and the remainder was held by Vintage.

On April 10, 2018, the Company and Vintage entered into an equity commitment agreement (the "Equity Commitment Agreement"), which Equity Commitment Agreement amended and restated in its entirety the prior letter agreement, dated as of March 1, 2018, between the Company and Vintage, pursuant to which Vintage agreed to backstop the 2018 Rights Offering for the purpose of providing at least $245 million of new capital.

On July 23, 2019, concurrent with the completion of the 2019 Rights Offering, described in Note 17, the Tranche A-1 principal and paid-in-kind interest totaling $38.2 million was exchanged for 127.2 million of our common shares of which 107.2 million of common shares were issued to Vintage, a related party, and the remainder were issued to B.Riley, also a related party, described above.

Effective May 31, 2019, we sold all of the issued and outstanding capital stock of Loibl, a material handling business in Germany, to Lynx Holding GmbH for €10.0 million (approximately $11.4 million), subject to adjustment. We received $7.4 million in cash and recognized a $3.6 million pre-tax loss on sale of this business in the quarter ended June 30, 2019, net of $0.7 million in transaction costs. Proceeds from the transaction were primarily used to reduce outstanding balances under our U.S. Revolving Credit Facility. Through the sale, we were also able to release performance letters of credit totaling $8.5 million, which improved our borrowing capacity as described in Note 13. Prior to the divestiture, Loibl was part of the Vølund & Other Renewable segment and had revenues of approximately $30 million for the year ended December 31, 2018.

Three months ended June 30, Six months ended June 30,
(in thousands) 2018 2017 2018 2017
Components associated with borrowings from:
U.S. Revolving Credit Facility $ 3,434
$ 1,428
$ 5,779
$ 2,128
Second Lien Term Loan Facility 2,191
—
7,460
—
Foreign revolving credit facilities 145
233
279
474
5,770
1,661
13,518
2,602
Components associated with amortization or accretion of:
U.S. Revolving Credit Facility deferred financing fees and commitment fees 5,113
872
8,314
1,588
Second Lien Term Loan Facility deferred financing fees and discount 833
—
3,202
—
5,946
872
11,516
1,588

Other interest expense 161
3,750
295
3,796

Total interest expense $ 11,877
$ 6,283
$ 25,329
$ 7,986



(in thousands)	Three months ended June 30, 2018			Six months ended June 30, 2018
Revenue	$	58,257		$	116,439
Cost of operations	45,521			90,189
Selling, general and administrative	7,597			17,024
Goodwill impairment	72,309			72,309
Research and development	390			756
Operating income (loss)	(67,560		)	(63,839		)
Net loss	(55,932		)	(59,428		)

This quarterly report, including Management's Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You should not place undue reliance on these statements. Statements that include the words "expect," "intend," "plan," "believe," "project," "forecast," "estimate," "may," "should," "anticipate" and similar statements of a future or forward-looking nature identify forward-looking statements.

These forward-looking statements address matters that involve risks and uncertainties and include statements that reflect the current views of our senior management with respect to our financial performance and future events with respect to our business and industry in general. There are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Differences between actual results and any future performance suggested in our forward-looking statements could result from a variety of factors, including the following: our ability to continue as a going concern; our ability to obtain and maintain sufficient financing to provide liquidity to meet our business objectives, surety bonds, letters of credit and similar financing; our ability to satisfy ~~the liquidity and other~~ requirements under U.S. revolving credit facility as recently amended, including our ability to successfully enter into and borrow under a new term loan and receive concessions from customers on our Renewable energy loss contracts;the Amended Credit Agreement; the highly competitive nature of our businesses; general economic and business conditions, including changes in interest rates and currency exchange rates; general developments in the industries in which we are involved; cancellations of and adjustments to backlog and the resulting impact from using backlog as an indicator of future earnings; our ability to perform contracts on time and on budget, in accordance with the schedules and terms established by the applicable contracts with customers; failure by third-party subcontractors, partners or suppliers to perform their obligations on time and as specified; our ability to realize anticipated savings and operational benefits from our restructuring plans, and other cost-savings initiatives; our ability to successfully ~~integrate~~address remaining items and ~~realize the expected synergies from acquisitions;~~any warranty obligations within our ~~ability to successfully address productivity and schedule issues in~~accrued estimated costs for our Vølund & Other Renewable segment, including the ability to complete our Renewable energy contracts within the expected time frame and the estimated costs; willingness of customers to waive liquidated damages or agree to bonus opportunities;segment; our ability to successfully partner with third parties to win and execute ~~renewable contracts;~~contracts within the Vølund & Other Renewable segment; changes in our effective tax rate and tax ~~positions;~~positions, including any limitation on our ability to use our net operating loss carryforwards and other tax assets as a result of an "ownership change" under Section 382 of the Internal Revenue Code; our ability to maintain operational support for our information systems against service outages and data corruption, as well as protection against cyber-based network security breaches and theft of data; our ability to protect our intellectual property and renew licenses to use intellectual property of third parties; our use of the percentage-of-completion method to recognize revenue over time; our ability to successfully manage research and development projects and costs, including our efforts to successfully develop and commercialize new technologies and products; the operating risks normally incident to our lines of business, including professional liability, product liability, warranty and other claims against us; changes in, or our failure or inability to comply with, laws and government regulations; actual of anticipated changes in governmental regulation, including trade and tariff policies; difficulties we may encounter in obtaining regulatory or other necessary permits or approvals; changes in, and liabilities relating to, existing or future environmental regulatory matters; changes in actuarial assumptions and market fluctuations that affect our net pension liabilities and income; potential violations of the Foreign Corrupt Practices Act; our ability to successfully compete with current and future competitors; the loss of key personnel and the continued availability

These factors are not necessarily all the factors that could affect us. We assume no obligation to revise or update any forward-looking statement included in this quarterly report or the Annual ~~Report~~report for any reason, except as required by law.

In this report, unless the context otherwise indicates, ~~"B&W,~~"BW," "we," "us," "our" and "the Company" mean Babcock & Wilcox Enterprises, Inc. and its consolidated subsidiaries. The presentation of the components of our revenues, gross profit and earnings before interest, taxes, depreciation and amortization ("EBITDA"), as reconciled in the table on the following pages of this Management's Discussion and Analysis of Financial Condition and Results of Operations is consistent with the way our chief operating decision maker reviews the results of operations and makes strategic decisions about the business.

~~In the three and six months ended June 30, 2018, we~~We recorded operating losses of ~~$137.4~~$4.3 million and ~~$243.8 million compared to $146.6 million and $157.9~~$36.2 million in the three and six months ended June 30, ~~2017. Our consolidated results and the results~~2019, respectively, compared to losses of the Renewable segment are primarily driven by changes in estimated revenues and costs to complete the six European loss contracts described in more detail in Note 5 to the condensed consolidated financial statements. We intend to seek insurance recoveries and additional relief from customers and will pursue other claims where appropriate and available. There can be no assurance as to recovery amounts that we may realize. Renewable loss contract positions at June 30, 2018 do not take into account any of these potential recoveries to mitigate these losses.

As of June 30, 2019, five of the six European Vølund EPC loss contracts ~~primarily~~had been turned over to the customer, with only punch list or agreed remediation items and performance testing remaining, some of which are expected to be performed during the customers' scheduled maintenance outages. Turnover is not applicable to the fifth loss contract under the terms of the March 29, 2019 settlement agreement with the customers of the second and fifth loss contracts, who are related parties to each other. Under that settlement agreement, we limited our remaining risk related to these contracts by paying a combined £70 million ($91.5 million) on April 5, 2019 in exchange for limiting and further defining our obligations under the second and fifth loss contracts, including waiver of the rejection and termination rights on the fifth loss contract that could have resulted in repayment of all monies paid to us and our former civil construction partner (up to approximately $144 million), and requirement to restore the property to its original state if the customer exercised this contractual rejection right. On the fifth loss contract, we agreed to continue to support construction services to complete certain key systems of the plant by May 31, 2019, for which penalty for failure to complete these systems is limited to the unspent portion of our quoted cost of the activities through that date. The settlement eliminated all historical claims and remaining liquidated damages. Upon completion of these activities in accordance with the settlement, we will have no further obligation related to the fifth loss contract other than customary warranty of core products if the plant is used as a ~~result~~biomass plant as designed. We estimated the portion of ~~scheduling~~this settlement related to waiver of the rejection right on the fifth project was $81.1 million, which was recorded in the fourth quarter of 2018 as a reduction in the selling price. We are still pursuing insurance recoveries and claims against subcontractors. For the second loss project, the settlement limited the remaining performance obligations and settled historic claims for nonconformance and delays, and we turned over the plant in May 2019, and subsequently began the operations and maintenance contract to operate this plant. See further discussion of the loss projects in Note 4.

The SPIG segment contributed to our operating results with $(0.1) million and $0.5 million of adjusted EBITDA in the three and six months ended June 30, 2019, respectively, compared to $(6.2) million and $(13.5) million in the three and six months ended June 30, 2018, respectively. The improvement begins to reflect the effects of a 2017 change in strategy to improve profitability by focusing on more selective bidding in core geographies and products. SPIG's adjusted EBITDA loss in the first half of 2018 was primarily driven by increases in estimated costs to complete new build cooling systems contracts sold under a previous strategy and lower volumes of aftermarket cooling system services. SPIG's new build cooling systems contracts that were sold under the previous strategy were mostly complete as of December 31, 2018; however, included in these few remaining contracts is a loss contract to engineer, procure materials and then construct a dry cooling system for a gas-fired power plant in the U.S., which continued through the first half of 2019 and is expected to be complete in mid-2019.

Our Babcock & Wilcox segment generated adjusted EBITDA of $19.0 million and $28.0 million in the three and six months ended June 30, 2019, respectively, compared to $9.9 million and $14.1 million in the three and six months ended June 30, 2018, respectively. The increase is primarily attributable to higher volume of large construction new build projects, including industrial projects, and lower warranty expenses partly offset by a decrease in volume of parts and retrofits.

Through our restructuring efforts, we made significant strides to make our cost structure more variable and to reduce costs. We have identified additional initiatives that are underway as of the date of this filing that are expected to further reduce

~~delays~~costs, and ~~shortcomings in~~we expect to continue to explore other cost saving initiatives to improve cash generation and to evaluate additional non-core asset sales to reduce our ~~subcontractors estimated productivity. Two of the six became loss contracts in the second quarter of 2017.~~debt.

InComparisons of our results from continuing operations for the ~~Power segment, 2018 revenues are below~~three and six months ended June 30, 2019 to the corresponding periods due to anticipated lower demand in the global market for new build coal-fired power generation and from lower demand for retrofit projects driven by the Coal Combustion Residue regulations in the U.S. Restructuring occurred in 2017 to maintain margins by reducing costs associated with the projected declines in demand, and further restructuring occurred in June 2018. Comparisons are further affected by increases in estimated warranty costs on certain projects in the second quarter of 2018 ~~favorable results in closing out contracts in the second quarter of 2017 and a reduction of employee benefit expenses that benefited the second quarter of 2017.~~

We face liquidity challenges from losses recognized on our six European Vølund EPC loss contracts described in Note 4, which have required amendments and waivers to maintain compliance with the Amended Credit Agreement, inclusive of Amendments No. 16 and No. 17. Our liquidity is provided under a credit agreement dated May 11, 2015, as amended, with a syndicate of lenders ("Amended Credit Agreement") that governs a revolving credit facility ("U.S. Revolving Credit Facility") and our last out term loan facility ("Last Out Term Loans"). The ~~sale~~Amended Credit Agreement and the amendments and waivers are described in more detail in Note 13, Note 14 and Note 18.

Additionally, we continue to evaluate further dispositions and additional opportunities for cost savings. We also continue to pursue insurance recoveries, additional relief from customers and will pursue other claims where appropriate and available. Management believes it has taken and is ~~taking all~~continuing to take prudent actions to address the substantial doubt ~~about~~regarding our ability to continue as a going concern, but we cannot assert that it is probable that our plans will fully mitigate the liquidity challenges we ~~face.~~face because some matters may not fully be in our control. Amendment No. 16 to the Amended Credit Facility also created a new event of default for failure to terminate the existing U.S. Revolving Credit Facility on or prior to March 15, 2020, which is within twelve months of the date of this filing. Our ~~plan is designed~~ability to ~~provide us~~comply with ~~what we believe~~the financial and other covenants of the Amended Credit Facility through that date are dependent upon achieving our forecasted financial results. While management believes it will be ~~adequate liquidity~~able to meet our obligations for at least the twelve month period following August 9, 2018; however, our remediation plan depends on conditions and matters that may be outside of our control, including regulatory approvals that may be requiredobtain additional financing to ~~sell certain assets, agreement to concessions from customers on the Renewable loss contracts as required under the amended terms of~~replace our U.S. Revolving Credit ~~Facility and our~~facility, the ability to ~~obtain~~do so will depend on credit markets and ~~maintain sufficient capacity to support contract security requirements for current and future business. Additionally,~~other matters that are outside of our ability to operate within the amended covenants and borrowing limits associated with our U.S. Revolving Credit Facility are dependent on our future financial operating results. If we cannot continue as a going concern, material adjustmentscontrol.

In addition to the ~~carrying values~~discussions regarding additional financing described above, we continue to evaluate further dispositions, opportunities for additional cost savings and ~~classifications of our assets~~opportunities for insurance recoveries and ~~liabilities~~other claims where appropriate and ~~the reported amounts of income and expense would be required.~~available.

⁽¹⁾~~Gross~~Intangible amortization is not allocated to the segments' gross profit, ~~excludes intangible amortization~~ but ~~includes depreciation.~~depreciation is allocated to the segments' gross profit.



	Three months ended June 30,								Six months ended June 30,
(In thousands)	2019			2018			$ Change		2019			2018			$ Change
Revenues	$	200,964		$	197,752		$	3,212	$	389,522		$	356,878		$	32,644
Gross profit	$	37,853		$	30,013		$	7,840	$	68,959		$	60,876		$	8,083
Adjusted EBITDA	$	19,032		$	9,897		$	9,135	$	27,996		$	14,074		$	13,922
Gross profit %	18.8		%	15.2		%			17.7		%	17.1		%

Revenues in the Vølund & Other Renewable segment decreased 39%, or $21.3 million to $33.7 million in the second quarter of 2019 compared to $55.0 million in the second quarter of 2018. The reduction in revenue primarily relates to the September 17, 2018 divestiture of PBRRC, a subsidiary that held two operations and maintenance contracts for waste-to-energy facilities in West Palm Beach, Florida, that had previously generated annual revenues of approximately $60 million. Revenue was also lower due to the level of activity and changes in estimates in the Engineer, Procure and Construct ("EPC") loss contracts, as described in Note 4, which was partially offset by the startup of two operations and maintenance contracts in the U.K. that followed turnover of the EPC contracts to the customers. Our revenue in 2019 was also affected by a previous change in strategy for the Vølund business. In 2017, we redefined our approach to bidding on and executing renewable energy contracts, under which we are focusing on engineering and supplying our core waste-to-energy and renewable energy technologies - steam generation, combustion grate, environmental equipment, material handling and cooling condensers - while partnering with other firms to execute the balance of plant and civil construction scope on contracts we pursue. We expect this lower, more focused scope to result in lower levels of revenue, but better execution on future work. Additionally, we previously made the decision to limit bidding on Vølund renewable energy contracts while we focused on progressing the EPC loss contracts, and that previous limit on bidding has resulted in lower revenue in 2019. Future year-over-year comparisons will also be affected by the sale of Loibl, a materials handling business in Germany, effective May 31, 2019 as described in Note 25. Prior to the divestiture, Loibl was part of the Vølund & Other Renewable segment and had revenues of approximately $30 million for the year ended December 31, 2018.

Gross profit in the Vølund & Other Renewable segment increased $74.4 million to $5.1 million in the second quarter of 2019 compared to $(69.3) million in the second quarter of 2018. In the second quarter of 2018, ~~and 2017,~~ we recorded $57.3 million in net losses including warranty resulting from changes in the estimated revenues and ~~$115.2~~costs to complete the six European Vølund EPC loss contracts. Only $3.2 million of equivalent losses were recorded in the second quarter of 2019 inclusive of warranty, which were partially offset by $5.9 million for additional insurance recovery settlements that were collected and are expected to be collected in the third quarter 2019. Beyond the effect of the loss contracts, the second quarter 2019 gross profit included lower levels of direct overhead support and warranty expense, offset by the absence of gross profit from PBRRC as a result of its September 2018 sale as described above. Changes in estimated costs to complete the six European Vølund EPC loss contracts includes changes in estimated warranty costs, which was a reduction of $3.9 million in the second quarter of 2019 related to developments in the quarter stemming from the March 29, 2019 settlement agreement compared to a $15.1 million increase in the second quarter of 2018 based on experience from the startup and commissioning activities in that period.

Adjusted EBITDA in the Vølund & Other Renewable segment improved $77.8 million to $(0.8) million in the second quarter of 2019 compared to $(78.6) million in the second quarter of 2018. The improvement was primarily due to gross profit, as described above. Additionally, SG&A was lower, reflecting the benefits of restructuring, lower indirect support cost of the EPC loss contracts, lower proposal costs and active reductions in discretionary spend.

Additional information about the changes in the estimated revenue and costs to complete these European Vølund EPC loss contracts, the March 29, 2019 settlement of the second and fifth loss contracts, changes in the warranty accruals and the insurance receivable is included in Note 4.

Revenues in the Vølund & Other Renewable segment decreased 45%, or $51.7 million to $63.2 million in the six months ended June 30, 2019 compared to $115.0 million in the corresponding period in 2018. The reduction primarily relates to the September 17, 2018 divestiture of PBRRC, a subsidiary that held two operations and maintenance contracts for waste-to-energy facilities in West Palm Beach, Florida, that had previously generated annual revenues of approximately $60 million. Revenue was also lower due to the lower level of activity and changes in estimates, including the effect of the settlements, on the EPC loss contracts as described above and in Note 4, which was partially offset by the startup of two operations and maintenance contracts in the U.K. that followed turnover of the EPC contracts to the customers. Our revenue in 2019 was also affected by a previous change in strategy for the Vølund business and a previous decision to limit bidding on Vølund renewable energy contracts while we focused on progressing the EPC loss contracts, both of which are described above. Future year-over-year comparisons will also be affected by the sale of Loibl, a materials handling business in Germany, effective May 31, 2019 as described in Note 25. Loibl had revenue of approximately $30 million in the year ended December 31, 2018.

Gross profit in the Vølund & Other Renewable segment increased $122.0 million to $2.2 million in the six months ended June 30, 2019 compared to $(119.8) million in the corresponding period in 2018. In the six months ended June 30, 2019 and June 30, 2018, we recorded $7.4 million and $110.0 million in net losses including warranty, respectively, resulting from changes in the estimated revenues and costs to complete the six European Vølund EPC loss contracts, which were partially offset by $5.9 million for additional insurance recovery settlements that were collected and are expected to be collected in the third quarter 2019. Beyond the effect of the loss contracts, gross profit for the six months ended June 30, 2019 included lower levels of direct overhead support and warranty expense, offset by the absence of gross profit from PBRRC as a result of its September 2018 sale as described above. Changes in ~~greater detail in Note 5~~estimated costs to complete the condensed consolidated financial statements. The lower level of losses recorded in the Renewable segment were partly offset by a decrease in the Power segment from the lower volume of revenue, increasessix European Vølund EPC loss contracts includes changes in estimated warranty costs, ~~on certain projects, favorable results in closing out contracts~~which was a reduction of $3.9 million in the second quarter of ~~2017 and a reduction of employee benefits that occurred~~2019 related to developments in the ~~second~~ quarter ~~of 2017.~~

Adjusted EBITDA in the Vølund & Other Renewable segment improved $130.7 million to $(9.6) million in the six months ended June 30, 2019 compared to $(140.4) million in the corresponding period of 2018. The improvement was primarily due to the gross profit variance, as described above. Additionally, SG&A was lower, reflecting the benefits of ~~prior~~ restructuring, ~~initiatives and conscious reduction~~lower indirect support cost of ~~discretionary costs, which more than offset increases in financial advisory fees, litigation~~the EPC loss contracts, lower proposal costs and ~~support costs~~active reductions in discretionary spend.

Additional information about the changes in the ~~Renewable segment.~~estimated revenue and costs to complete these European Vølund EPC loss contracts, the March 29, 2019 settlement of the second and fifth loss contracts, changes in the warranty accruals and the insurance receivable is included in Note 4.

~~Equity~~



	Three months ended June 30,									Six months ended June 30,
(In thousands)	2019			2018			$ Change			2019			2018			$ Change
Revenues	$	22,834		$	46,015		$	(23,181	)	$	51,736		$	82,759		$	(31,023	)
Gross profit (loss)	$	2,388		$	79		$	2,309		$	6,064		$	(2,672	)	$	8,736
Adjusted EBITDA	$	(142	)	$	(6,222	)	$	6,080		$	517		$	(13,532	)	$	14,049
Gross profit %	10.5		%	0.2		%				11.7		%	(3.2		)%

Revenues in ~~income of investees was a loss of $15.2~~the SPIG segment decreased 50%, or $23.2 million, to $22.8 million in the second quarter of 2017, which included an $18.2 million other-than-temporary-impairment of our investment in TBWES, which was partly offset by $3.0 million of equity in income of BWBC. Our former joint ventures and the related equity in income of investees is described more fully below and in Note 11 to the condensed consolidated financial statements.

Gross profit ~~decreased by $45.3~~in the SPIG segment increased $2.3 million, to ~~a loss of $65.2~~$2.4 million in the first six months of 2018 as compared to a loss of $20.0 million in the first six months of 2017. Gross profit in the Renewable segment decreased $19.5 million primarily from changes in the estimated revenues and costs to complete the six European loss contracts, as described in greater detail in Note 5 to the condensed consolidated financial statements. Gross profit in the Power segment decreased $20.7 million primarily from the lower volume of revenue, increases in estimated warranty costs on certain projects, favorable results in closing out contracts in the second quarter of ~~2017 and a reduction of employee benefits that occurred~~2019, compared to $0.1 million in the second quarter of ~~2017. Gross profit~~2018. The improvement begins to reflect the effects of a 2017 change in ~~the Industrial segment decreased primarily from increases~~strategy to improve profitability by focusing on more selective bidding in ~~estimated costs to complete new build cooling contracts.~~

under a previous strategy and lower volumes of aftermarket cooling system services. SPIG's new build cooling systems contracts that were sold under the previous strategy were mostly complete as of December 31, 2018; however, included in these few remaining contracts is a loss contract to engineer, procure materials and then construct a dry cooling system for a gas-fired power plant in the U.S., which is expected to be compete in the third quarter of 2019.

Adjusted EBITDA in the ~~Industrial~~SPIG segment improved $6.1 million to $(0.1) million in the second quarter of 2019 compared to $(6.2) million in the second quarter of 2018, driven by the improvement to gross profit and the benefits of cost savings and restructuring initiatives.

Revenues in the SPIG segment decreased ~~by $8.1~~37%, or $31.0 million, to ~~a loss of $13.5~~$51.7 million in the six months ended June 30, ~~2018, compared~~2019 from $82.8 million in the corresponding period in 2018. The decrease is primarily due to lower volume of new build cooling systems services following a 2017 change in strategy to improve profitability by focusing on more selective bidding in core geographies and products and a lower volume of aftermarket cooling system services.

Gross profit in the SPIG segment increased $8.7 million, to $6.1 million in the six months ended June 30, ~~2017.~~2019, compared to $(2.7) million in the corresponding period in 2018. The ~~decrease~~improvement begins to reflect the effects of a 2017 change in strategy to improve profitability by focusing on more selective bidding in core geographies and products. SPIG gross profit (loss) in the six months ended June 30, 2018 was primarily ~~reflects~~driven by increases in estimated costs to complete ~~legacy~~ new build cooling systems contracts sold under a previous strategy and ~~legal expenses related~~lower volumes of aftermarket cooling system services. SPIG's new build cooling systems contracts that were sold under the previous strategy were mostly complete as of December 31, 2018; however, included in these few remaining contracts is a loss contract to ~~legacy litigation.~~engineer, procure materials and then construct a dry cooling system for a gas-fired power plant in the U.S., which is expected to be compete in the third quarter of 2019.

Adjusted EBITDA in the SPIG segment improved $14.0 million to $0.5 million of adjusted EBITDA income in the six months ended June 30, 2019 compared to $(13.5) million in the corresponding period in 2018, driven by the improvement to gross profit and the benefits of cost savings and restructuring initiatives.

Advisory fees and settlement costs decreased by $0.4 million to $4.8 million in the second quarter of 2019 as compared to $5.1 million in the second quarter of 2018, primarily due to a decrease in financial advisory fees, partly offset by an increase in legal fees related to pursuit of insurance recoveries.

Advisory fees and settlement costs increased by $10.2 million to $18.4 million in the six months ended June 30, ~~2107. The decrease primarily reflects benefits of restructuring, lower incentive and stock-based compensation and reductions in discretionary spend.~~

InAt June 30, 2019, we do not have any remaining investments in equity method investees. During the first quarter of 2018, we sold ~~all of~~ our interest in BWBC to our joint venture partner in China for approximately $21.1 million, ~~which resulted~~resulting in a gain of approximately $6.5 million, ~~during~~which was classified in equity income of investees in the ~~first quarter~~Condensed Consolidated Statement of ~~2018. The~~Operations. Proceeds from this sale, net of ~~our interest~~$1.3 million of withholding tax, were $19.8 million. Our former equity method investment in BWBC joint venture in China is further described in Note 11 to the condensed consolidated financial statements. We recognized $3.0 million and $3.6 million of equity in earnings of BWBC in the three and six months ended June 30, 2017, respectively.

In July 2018, we completed the sale of our investment in TBWES together with the settlement of related contractual claims and received $15.0 million in cash, of which $7.7 million related to our investment in ~~TBWES. Additionally, AOCI includes $2.6~~TBWES and $7.3 million ~~at June 30,~~of proceeds were used to pay outstanding claims. In July 2018, ~~for~~the AOCI related to cumulative currency translation loss from our investment in TBWES ~~and is expected to be~~of $2.6 million was also recognized as a loss and is included in ~~connection with closing~~foreign exchange in our Condensed Consolidated Statement of Operations. TBWES had a manufacturing facility that produced boiler parts and equipment intended primarily for new build coal boiler contracts in India. During the ~~sale~~first quarter of 2018, based on a preliminary agreement to sell our investment in TBWES, we recognized an additional $18.4 million other-than-temporary-impairment. The impairment charge was based on the difference in the ~~third quarter~~carrying value of ~~2018.~~

Our ~~effective~~income tax ~~rate can~~expense in the second quarter of 2019 reflects a full valuation allowance against our net deferred tax assets. Deferred tax assets are evaluated each period to determine whether it is more likely than not that those deferred tax assets will be ~~significantly impacted by~~realized in the future, and valuation allowances ~~related to losses incurred in certain jurisdictions where~~are recorded when the ability to utilize those ~~losses~~deferred tax assets to reduce taxable income in the foreseeable future is less than more likely than not. Valuation allowances do not limit our ability to use deferred tax assets in the future. Valuation allowances may be reversed in the future if sufficient positive evidence exists to outweigh the negative evidence under the framework of ASC 740, Income Taxes.

Our effective tax rate for the second quarter of 2019 is not reflective of the U.S. statutory rate primarily due to a full valuation allowance against net deferred tax assets. In jurisdictions where we have available net operating loss carryforwards ("NOLs"), such as the U.S., Denmark and Italy, the existence of a full valuation allowance against deferred tax assets results in income tax benefit or expense relating primarily to discrete items. In other profitable jurisdictions, however, we may record income tax expense, even though we have established a full valuation allowance against our net deferred tax assets. Our income tax expense (benefit) also reflects changes in the jurisdictional mix of income and losses.

In the second quarter of 2018, our effective tax rate was also affected by valuation allowances related to losses incurred in certain jurisdictions. Additionally, we ~~operate~~operated in numerous countries that have statutory tax rates that differ from that of 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 ~~20%~~19% and approximately 30%. In addition to statutory rate differences, the jurisdictional mix of our income (loss) before tax can be significantly affected by mark to market adjustments related to our pension and postretirement plans, which have been primarily in the United States, and the impact of discrete items and other nondeductible expenses.

Loss before provision for income taxes generated in the United States and foreign locations for the three and six months ended June 30, ~~2018~~2019 and ~~2017~~2018 is presented in the table below.

See Note 720 ~~of the condensed consolidated financial statements~~ for explanation of differences between our effective income tax rate and our statutory rate.Note 20 also describes the impact of an "ownership change" under Section 382 of the Internal Revenue Code ("IRC"). The Equitization Transactions described in Note 18 have resulted in an "ownership change" under IRC Section 382.

Additionally, we continue to evaluate further dispositions and additional opportunities for cost savings. We also continue to pursue insurance recoveries, additional relief from customers and will pursue other claims where appropriate and available. Management believes it has taken and is ~~taking all~~continuing to take prudent actions to address the substantial doubt ~~about~~regarding our ability to continue as a going concern, but we cannot assert that it is probable that our plans will fully mitigate the liquidity challenges we ~~face.~~face because some matters may not fully be in our control. Amendment No. 16 to the Amended Credit Facility also created a new event of default for failure to terminate the existing U.S. Revolving Credit Facility on or prior to March 15, 2020, which is within twelve months of the date of this filing. Our ~~plan is designed~~ability to ~~provide us~~comply with ~~what we believe~~the financial and other covenants of the Amended Credit Facility through that date are dependent upon achieving our forecasted financial results. While management believes it will be ~~adequate liquidity~~able to meet our obligations for at least the twelve month period following August 9, 2018; however, our remediation plan depends on conditions and matters that may be outside of our control, including regulatory approvals that may be requiredobtain additional financing to ~~sell certain assets, agreement to concessions from customers on the Renewable loss contracts as required under the amended terms of~~replace our U.S. Revolving Credit ~~Facility~~facility, the ability to do so will depend on credit markets and other matters that are outside of our control.

In addition to the discussions regarding additional financing described above, we continue to evaluate further dispositions, opportunities for additional cost savings and opportunities for insurance recoveries and other claims where appropriate and available.

On November 27, 2018, we received written notification (the "NYSE Notice"), from the New York Stock Exchange (the "NYSE"), that we were not in compliance with an NYSE continued listing standard in Rule 802.01C of the NYSE Listed Company Manual because the average closing price of our common stock fell below $1.00 over a period of 30 consecutive trading days. We can regain compliance with the minimum per share average closing price standard at any time during the six-month cure period if, on the last trading day of any calendar month during the cure period, we have (i) a closing share price of at least $1.00 and (ii) an average closing price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month. We completed a reverse stock split effective as of July 24, 2019 to regain compliance, but there is no guarantee that this reverse stock split will enable us to cure this deficiency. Our common stock could also be delisted if we fail to satisfy any other continued listing standards. For example, based on our current shareholders' equity, our common stock may be subject to delisting if our average market capitalization over a consecutive 30-trading-day period is less than $50.0 million, subject to our ability to ~~obtain~~regain compliance with this listing standard during an applicable cure period.

On July 11, 2019, the Company's board of directors approved a reverse stock split of one-for-ten on the Company's issued and ~~maintain sufficient capacity to support contract security requirements for current~~outstanding common stock which became effective on July 24, 2019. The one-for-ten reverse stock split automatically converted every ten shares of the Company's outstanding and future business. Additionally, our ability to operate within the amended covenants and borrowing limits associated with our U.S. Revolving Credit Facility are dependent on our future financial operating results. If we cannot continue as a going concern, material adjustmentstreasury common stock prior to the ~~carrying values~~effectiveness of the reverse stock split into one share of common stock. No fractional shares were issued in the reverse stock split. Instead, stockholders who would otherwise have held fractional shares received cash payments (without interest) in respect of such fractional shares. The reverse stock split did not impact any stockholder's percentage ownership of the Company, subject to the treatment of fractional shares. The reverse stock split was undertaken to increase the market price per share of the Company's common stock to allow the Company to regain compliance with the NYSE's continued listing standards relating to minimum price per share pending final approval by the NYSE.



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



		PAGE
PART I - FINANCIAL INFORMATION
	Item 1 – Condensed Consolidated Financial Statements	3

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, ~~2018~~2019 and ~~2017~~2018 (Unaudited)	3

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, ~~2018~~2019 and ~~2017~~2018 (Unaudited)	4

	Condensed Consolidated Balance Sheets as of June 30, ~~2018~~2019 and December 31, ~~2017~~2018 (Unaudited)	5

	Condensed Consolidated Statements of Stockholders' (Deficit) Equity for the Six Months Ended June 30, 2019 and 2018 (Unaudited)	6

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, ~~2018~~2019 and ~~2017~~2018 (Unaudited)	68

	Notes to Condensed Consolidated Financial Statements	810

	Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations	3745

	Item 3 - Quantitative and Qualitative Disclosures About Market Risk	5568

	Item 4 - Controls and Procedures	5568

PART II - OTHER INFORMATION

	Item 1 - Legal Proceedings	5669

	Item 1A - Risk Factors	5669

	Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	5670

	Item 6 - Exhibits	5770

SIGNATURES		5872



	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2018			2017			2018			2017
Net loss	$	(265,603	)	$	(150,850	)	$	(385,938	)	$	(157,691	)
Other comprehensive income (loss):
Currency translation adjustments (CTA), net of taxes	8,517			6,757			11,740			12,174

Reclassification adjustment for CTA gains included in net loss, net of taxes	—			—			(2,044		)	—

Derivative financial instruments:
Unrealized (gains) losses on derivative financial instruments	(602		)	(3,657		)	999			2,244
Income taxes	(89		)	(1,453		)	288			(139		)
Unrealized (gains) losses on derivative financial instruments, net of taxes	(513		)	(2,204		)	711			2,383
Derivative financial instrument (gains) losses reclassified into net income	489			(1,550		)	(1,139		)	(6,448		)
Income taxes	108			(892		)	(248		)	(1,947		)
Reclassification adjustment for (gains) losses included in net loss, net of taxes	381			(658		)	(891		)	(4,501		)

Benefit obligations:
Unrealized gains (losses) on benefit obligations	112			(97		)	57			(141		)
Unrealized gains (losses) on benefit obligations, net of taxes	112			(97		)	57			(141		)
Amortization of benefit plan benefits	(1,366		)	(789		)	(1,750		)	(1,662		)
Income taxes	1,892			11			1,892			20
Amortization of benefit plan benefits, net of taxes	(3,258		)	(800		)	(3,642		)	(1,682		)

Other	—			(20		)	(38		)	14

Other comprehensive income	5,239			2,978			5,893			8,247
Total comprehensive loss	(260,364		)	(147,872		)	(380,045		)	(149,444		)
Comprehensive income (loss) attributable to noncontrolling interest	(125		)	164			(198		)	(26		)
Comprehensive loss attributable to stockholders	$	(260,489	)	$	(147,708	)	$	(380,243	)	$	(149,470	)


(in thousands, except per share amount)	June 30, 2018			December 31, 2017			June 30, 2019			December 31, 2018
Cash and cash equivalents	$	28,512		$	43,717		$	35,190		$	43,214
Restricted cash and cash equivalents	32,302			25,980			9,180			17,065
Accounts receivable – trade, net	236,718			252,508			200,586			197,203
Accounts receivable – other	37,807			78,813			62,822			44,662
Contracts in progress	149,040			135,811			150,422			144,727
Inventories	67,274			72,917			63,828			61,323
Other current assets	37,787			34,039			64,566			41,425
Current assets of discontinued operations	83,331			88,472
Total current assets	672,771			732,257			586,594			549,619
Net property, plant and equipment	105,765			114,707			78,005			90,892
Goodwill	47,179			85,678			47,113			47,108
Deferred income taxes	99,080			97,467
Investments in unconsolidated affiliates	8,421			43,278
Intangible assets	36,368			42,065			28,395			30,793
Right-of-use assets							13,121			—
Other assets	28,013			25,741			18,811			27,085
Noncurrent assets of discontinued operations	106,510			181,036
Total assets	$	1,104,107		$	1,322,229		$	772,039		$	745,497

Foreign revolving credit facilities	$	4,124		$	9,173
Second lien term loan facility	—			160,141
Revolving credit facilities							$	184,400		$	145,506
Last out term loans							183,056			30,649
Accounts payable	191,664			205,396			167,081			199,882
Accrued employee benefits	27,072			27,058			27,393			19,319
Advance billings on contracts	149,768			171,997			102,284			149,367
Accrued warranty expense	53,138			33,514			39,589			45,117
Lease liabilities							4,229			—
Other accrued liabilities	88,351			89,549			97,097			122,149
Current liabilities of discontinued operations	57,316			47,499
Total current liabilities	571,433			744,327			805,129			711,989
U.S. revolving credit facility	196,300			94,300
Pension and other accumulated postretirement benefit liabilities	235,369			250,002			275,136			281,647
Noncurrent lease liabilities							8,816			—
Other noncurrent liabilities	37,214			29,897			25,993			29,158
Noncurrent liabilities of discontinued operations	8,236			13,000
Total liabilities	1,048,552			1,131,526			1,115,074			1,022,794
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.01 per share, authorized 200,000 shares; issued and outstanding 168,660 and 44,065 shares at June 30, 2018 and December 31, 2017, respectively	1,746			499
Stockholders' deficit:
Common stock, par value $0.01 per share, authorized 500,000 shares at June 30, 2019 and 200,000 shares at December 31, 2018, respectively; issued and outstanding 16,888 and 16,879 shares at June 30, 2019 and December 31, 2018, respectively ⁽¹⁾							1,748			1,748
Capital in excess of par value	1,045,901			800,968			1,055,759			1,047,062
Treasury stock at cost, 5,830 and 5,681 shares at June 30, 2018 and December 31, 2017, respectively	(105,531		)	(104,785		)
Retained deficit	(878,823		)	(492,150		)
Treasury stock at cost, 593 and 587 shares at June 30, 2019 and December 31, 2018, respectively ⁽¹⁾							(105,613		)	(105,590		)
Accumulated deficit							(1,295,319		)	(1,217,914		)
Accumulated other comprehensive loss	(16,536		)	(22,429		)	(8,010		)	(11,432		)
Stockholders' equity attributable to shareholders	46,757			182,103
Stockholders' deficit attributable to shareholders							(351,435		)	(286,126		)
Noncontrolling interest	8,798			8,600			8,400			8,829
Total stockholders' equity	55,555			190,703
Total liabilities and stockholders' equity	$	1,104,107		$	1,322,229
Total stockholders' deficit							(343,035		)	(277,297		)
Total liabilities and stockholders' deficit							$	772,039		$	745,497


	Six Months Ended June 30,						Six months ended June 30,
(in thousands)	2018			2017			2019			2018
Cash flows from operating activities:
Net loss	$	(385,938	)	$	(157,691	)	$	(77,507	)	$	(385,938	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization of long-lived assets	16,938			21,465			13,842			16,938
Amortization of debt issuance costs and debt discount	7,236			764
Amortization of deferred financing costs, debt discount and payment-in-kind interest							23,115			7,236
Amortization of right of use assets							2,861			—
Loss on sale of business							3,601			—
Loss on debt extinguishment	49,241			—			3,969			49,241
Goodwill impairment of discontinued operations	72,309			—			—			72,309
Goodwill impairment	37,540			—			—			37,540
Income from equity method investees	(6,605		)	(3,579		)	—			(6,605		)
Other than temporary impairment of equity method investment in TBWES	18,362			18,193
Other-than-temporary impairment of equity method investment in TBWES							—			18,362
Losses on asset disposals and impairments	1,934			114			42			1,934
Reserve for claims receivable	15,523			—			—			15,523
Provision for (benefit from) deferred income taxes	(1,477		)	(1,326		)
Mark to market gains and prior service cost amortization for pension and postretirement plans	(1,149		)	(600		)
Benefit from deferred income taxes, including valuation allowances							(776		)	(1,477		)
Mark to market losses (gains) and prior service cost amortization for pension and postretirement plans							390			(1,149		)
Stock-based compensation, net of associated income taxes	1,030			6,522			609			1,030
Changes in assets and liabilities
Changes in assets and liabilities:
Accounts receivable	40,641			6,343			(5,765		)	40,641
Contracts in progress and advance billings on contracts	(30,494		)	6,704			(53,571		)	(30,494		)
Inventories	5,925			3,381			(3,951		)	5,925
Income taxes	(4,036		)	(899		)	1,295			(4,036		)
Accounts payable	(15,103		)	25,454			(31,688		)	(15,103		)
Accrued and other current liabilities	30,051			13,839			(15,670		)	20,331
Accrued contract loss							(45,779		)	9,720
Pension liabilities, accrued postretirement benefits and employee benefits	(17,579		)	(13,040		)	(110		)	(17,579		)
Other, net	15,008			(7,331		)	(7,918		)	15,008
Net cash from operating activities	(150,643		)	(81,687		)
Net cash used operating activities							(193,011		)	(150,643		)
Cash flows from investing activities:
Purchase of property, plant and equipment	(4,350		)	(7,741		)	(434		)	(4,350		)
Acquisition of business, net of cash acquired	—			(52,547		)
Proceeds from sale of business	5,105			—			7,445			5,105
Proceeds from sale of equity method investment in a joint venture	21,078			—
Proceeds from sale of equity method investments in joint venture							—			21,078
Purchases of available-for-sale securities	(11,383		)	(20,328		)	(4,187		)	(11,383		)
Sales and maturities of available-for-sale securities	13,578			21,840			2,880			13,578
Other, net	189			(90		)	(462		)	189
Net cash from investing activities	24,217			(58,866		)	5,242			24,217



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


⁽²⁾	Allocations are excluded from discontinued operations. Accordingly, allocations previously absorbed by the MEGTEC and Universal businesses in the SPIG segment have been included with other unallocated costs in Corporate, and total $2.9 million and $5.7 million in the three months and six months ended June 30, 2018, respectively.


⁽³⁾	In March 2019, we entered into a settlement in connection with an additional European waste-to-energy EPC contract, for which notice to proceed was not given and the contract was not started. The settlement eliminates our obligations and our risk related to acting as the prime EPC should the project move forward.


	June 30,		December 31,
(in thousands)	2018		2017		June 30, 2019		December 31, 2018			$ Change			% Change
Contract assets - included in contracts in progress:
Costs incurred less costs of revenue recognized	$	59,552	$	69,576	$	33,155	$	49,910		$	(16,755	)	(34	)%
Revenues recognized less billings to customers	89,488		66,235		117,267		94,817			22,450			24	%
Contracts in progress	$	149,040	$	135,811	$	150,422	$	144,727		$	5,695		4	%
Contract liabilities - included in advance billings on contracts:
Billings to customers less revenues recognized	$	148,313	$	168,880	$	99,317	$	140,933		$	(41,616	)	(30	)%
Costs of revenue recognized less cost incurred	1,455		3,117		2,967		8,434			(5,467		)	(65	)%
Advance billings on contracts	$	149,768	$	171,997	$	102,284	$	149,367		$	(47,083	)	(32	)%

Net contract balance					$	48,138	$	(4,640	)	$	52,778		(1,137	)%

Accrued contract losses	$	53,699	$	40,634	$	11,014	$	61,651		$	(50,637	)	(82	)%



	Amortization Expense
Three months ending September 30, 2019	$	940
Three months ending December 31, 2019	940
Twelve months ending December 31, 2020	3,487
Twelve months ending December 31, 2021	3,261
Twelve months ending December 31, 2022	3,200
Twelve months ending December 31, 2023	3,197
Twelve months ending December 31, 2024	3,085
Thereafter	8,980


⁽¹⁾	Benefit plans, net, which is presented separately in the 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 sales in the Condensed Consolidated Statement of Operations and is allocated to the Babcock & Wilcox segment.



(in thousands)	Currency translation gain (loss)			Net unrealized gain (loss) on investments (net of tax)¹			Net unrealized gain (loss) on derivative instruments			Net unrecognized gain (loss) related to benefit plans (net of tax)			Total
Balance at December 31, 2017	$	(27,837	)	$	38		$	1,737		$	3,633		$	(22,429	)
Impact of ASU 2016-1 on changes in the components of AOCI, net of tax ⁽¹⁾	—			(38		)	—			—			(38		)
Other comprehensive income (loss) before reclassifications	3,223			—			1,224			(55		)	4,392
Amounts reclassified from AOCI to net income (loss)	(2,044		)	—			(1,272		)	(384		)	(3,700		)
Net current-period other comprehensive income (loss)	1,179			—			(48		)	(439		)	692
Balance at March 31, 2018	$	(26,658	)	$	—		$	1,689		$	3,194		$	(21,775	)
Other comprehensive income (loss) before reclassifications	8,517			—			(513		)	112			8,116
Amounts reclassified from AOCI to net income (loss)	—			—			381			(427		)	(46		)
Amounts reclassified from AOCI to pension, other accumulated postretirement benefit liabilities and deferred income taxes⁽²⁾	—			—			—			(2,831		)	(2,831		)
Net current-period other comprehensive income (loss)	8,517			—			(132		)	(3,146		)	5,239
Balance at June 30, 2018	$	(18,141	)	$	—		$	1,557		$	48		$	(16,536	)


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,					Line items in the Condensed Consolidated Statements of Operations affected by reclassifications from AOCI	Three months ended June 30,						Six months ended June 30,
AOCI component		2018			2017			2018		2017				2019			2018			2019			2018
Release of currency translation gain with the sale of equity method investment	Equity in income and impairment of investees	$	—		$	—		$	2,044	$	—
Release of currency translation gain with the sale of equity method investment and the sale of business													Equity in income and impairment of investees	$	—		$	—		$	—		$	2,044
	Provision for income taxes	—			—			—		—			Loss on sale of business	(3,176		)	—			(3,176		)	—
	Net income (loss)	$	—		$	—		$	2,044	$	—		Net (loss) income	$	(3,176	)	$	—		$	(3,176	)	$	2,044

Derivative financial instruments	Revenues	$	(478	)	$	714		$	1,138	$	6,002		Revenues	$	—		$	(478	)	$	—		$	1,138
	Cost of operations	(11		)	(49		)	1		(46		)	Cost of operations	—			(11		)	—			1
	Other-net	—			885			—		492			Other	22			—			(202		)	—
	Total before tax	(489		)	1,550			1,139		6,448			Total before tax	22			(489		)	(202		)	1,139
	Provision for income taxes	(108		)	892			248		1,947			(Benefit) provision for income taxes	—			(108		)	—			248
	Net income (loss)	$	(381	)	$	658		$	891	$	4,501		Net income (loss)	$	22		$	(381	)	$	(202	)	$	891

Amortization of prior service cost on benefit obligations	Benefit plans, net	$	427		$	789		$	811	$	1,662		Benefit plans, net	$	514		$	427		$	870		$	811
	Provision for income taxes	—			(11		)	—		(20		)	Net income	$	514		$	427		$	870		$	811
	Net income (loss)	$	427		$	800		$	811	$	1,682

Realized gain on investments	Other-net	$	—		$	1		$	—	$	44
	Provision for income taxes	—			—			—		16
	Net income (loss)	$	—		$	1		$	—	$	28



(in thousands)	June 30, 2019			December 31, 2018
Definite-lived intangible assets
Customer relationships	$	24,544		$	24,764
Unpatented technology	15,098			15,098
Patented technology	2,611			2,616
Tradename	12,514			12,566
All other	9,938			9,728
Gross value of definite-lived intangible assets	64,705			64,772
Customer relationships amortization	(17,968		)	(17,219		)
Unpatented technology amortization	(4,507		)	(3,760		)
Patented technology amortization	(2,412		)	(2,348		)
Tradename amortization	(3,968		)	(3,672		)
All other amortization	(8,760		)	(8,285		)
Accumulated amortization	(37,615		)	(35,284		)
Net definite-lived intangible assets	$	27,090		$	29,488
Indefinite-lived intangible assets
Trademarks and trade names	$	1,305		$	1,305
Total intangible assets, net	$	28,395		$	30,793



(in thousands)	Power			Renewable		Industrial⁽¹⁾			Total
Balance at December 31, 2017 ⁽²⁾	$	47,370		$	—	$	38,308		$	85,678
Currency translation adjustments	(191		)	—		(768		)	(959		)
Second quarter 2018 impairment charges	—			—		(37,540		)	(37,540		)
Balance at June 30, 2018 ⁽²⁾	$	47,179		$	—	$	—		$	47,179



Year ending	Amortization expense
Three months ending September 30, 2018	$	1,311
Three months ending December 31, 2018	$	1,311
Twelve months ending December 31, 2019	$	4,763
Twelve months ending December 31, 2020	$	4,002
Twelve months ending December 31, 2021	$	3,772
Twelve months ending December 31, 2022	$	3,685
Twelve months ending December 31, 2023	$	3,677
Thereafter	$	12,542



(in thousands)	Coupon Interest	Accretion of debt discount and amortization of financing costs	Total Interest Expense
For the three months ended June 30, 2018	$2,191	$833	$3,024
For the six months ended June 30, 2018	$7,460	$3,202	$10,662



	Asset and Liability Derivative
(in thousands)	June 30, 2018		December 31, 2017
Derivatives designated as hedges:
Foreign exchange contracts:
Location of FX forward contracts designated as hedges:
Accounts receivable-other	$	731	$	1,088
Other assets	1,631		312
Accounts payable	1		105

Derivatives not designated as hedges:
Foreign exchange contracts:
Location of FX forward contracts not designated as hedges:
Accounts receivable-other	$	—	$	7
Accounts payable	3		1,722
Other liabilities	—		12


(in thousands)
Available-for-sale securities	June 30, 2018		Level 1		Level 2		Level 3		June 30, 2019		Level 1		Level 2		Level 3
Commercial paper	$	1,989	$	—	$	1,989	$	—
Certificates of deposit	2,999		—		2,999		—
Corporate notes and bonds									$	12,844	$	12,844	$	—	$	—
Mutual funds	1,351		—		1,351		—		593		—		593		—
Corporate notes and bonds	1,594		1,594		—		—
United States Government and agency securities	5,680		5,680		—		—		3,296		3,296		—		—
Total fair value of available-for-sale securities	$	13,614	$	7,274	$	6,340	$	—	$	16,733	$	16,140	$	593	$	—


(in thousands)
Derivatives	June 30, 2018		December 31, 2017			June 30, 2019		December 31, 2018
Forward contracts to purchase/sell foreign currencies	$	2,358	$	(432	)	$	—	$	546



(in thousands)	Six months ended June 30, 2018
Depreciation and amortization	$	3,036
Goodwill impairment	72,309
Provision for deferred income taxes	(815		)
Purchase of property, plant equipment	77


										Six months ended June 30,
(In approximate millions)	June 30, 2018			December 31, 2017			June 30, 2017			2019			2018
Power	$	500		$	453		$	562
Renewable⁽¹⁾	916			1,008			1,137
Industrial	137			175			221
Babcock & Wilcox										$	323		$	500
Vølund & Other Renewable⁽¹⁾										205			916
SPIG										65			137
Other/eliminations	(35		)	(43		)	(36		)	(8		)	(35		)
Backlog	$	1,518		$	1,593		$	1,884		$	585		$	1,518


⁽¹⁾	Vølund & Other Renewable backlog at June 30, 2019, includes $169 million related to long-term operation and maintenance contracts for renewable energy plants, with remaining durations extending until 2034. Generally, such contracts have a duration of 10-20 years and include options to extend.



Period	Total number of shares purchased ⁽¹⁾	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)⁽²⁾
April 1, 2018 - April 30, 2018	196	$—	—	$100,000
May 1, 2018 - May 31, 2018	3,410	$—	—	$100,000
June 1, 2018 - June 30, 2018	7,140	$—	—	$100,000
Total	10,746		—



Period	Total number of shares purchased ^{(1) (2)}	Average price paid per share ⁽²⁾		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 2019	59	$	4.40	—	$	—
May 2019	126	$	3.10	—	$	—
June 2019	—	$	—	—	$	—
Total	185	$	3.52	—	$	—



~~(1)~~	Includes 196, 3,410 and 7,140 shares repurchased in April, May and June, respectively, pursuant to the provisions of employee benefit plans that require us to repurchase shares to satisfy employee statutory income tax withholding obligations.
~~(2)~~	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 August 7, 2018, we have not made any share repurchases under the August 4, 2016 share repurchase authorization.



~~2.1~~3.1*		~~Stock Purchase Agreement, dated as~~Restated Certificate of ~~June 5, 2018, among B&W Equity Investments, LLC, Babcock & Wilcox MEGTEC Holdings, Inc., Babcock & Wilcox MEGTEC, LLC, The Babcock & Wilcox Company,~~Incorporation (incorporated by reference to Exhibit 3.1 to the Babcock & Wilcox Enterprises, Inc.~~, DURR, Inc., and DURR Aktiengesellschaft~~ Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))

~~10.1~~3.2		~~Equity Commitment agreement, dated April 10, 2018, by~~Certificate of Amendment of the Amended and ~~between~~Restated Certificate of Incorporation of Babcock & Wilcox Enterprises, Inc. ~~and Vintage Capital Management, LLC~~, as filed with the Secretary of State of the State of Delaware on June 14, 2019 (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed ~~April 11, 2018~~on June 17, 2019 (File No. ~~001-36786)~~001-36876))

~~10.2~~3.3		Certificate of Amendment of the Restated Certificate of Incorporation, as amended, of Babcock & Wilcox Enterprises, Inc. ~~Amended and Restated 2015 Long-Term Incentive Plan (Amended and Restated~~, as filed with the Secretary of ~~May 16, 2018)~~State of the State of Delaware on July 23, 2019 (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed ~~May 21, 2018~~on July 24, 2019 (File No. 001-36876))

~~10.3~~10.1*		Amendment No. 6,16, dated April ~~10, 2018,~~5, 2019, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on April ~~11, 2018~~5, 2019 (File No. 001-36876))

10.2		Letter Agreement, dated April 5, 2019, among Babcock & Wilcox Enterprises, Inc., B. Riley FBR, Inc. and Vintage Capital Management, LLC (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on April 5, 2019 (File No. 001-36876))

10.3		Backstop Exchange Agreement, dated as of April 30, 2019, by and among Babcock & Wilcox Enterprises, Inc. and B. Riley FBR, Inc. (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on April 30, 2019 (File No. 001-36876))

10.4		~~Amendment No. 7, dated May 31, 2018, to Credit~~Investor Rights Agreement, dated as of ~~May 11, 2015,~~April 30, 2019, by and among Babcock & Wilcox Enterprises, Inc., asB. Riley FBR, Inc. and Vintage Capital Management, LLC (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 April 30, 2019 (File No. 001-36876))

10.5		Registration Rights Agreement, dated as of April 30, 2019, by and among Babcock & Wilcox Enterprises, Inc., and certain investors party thereto (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. ~~Executive Severance~~Current Report on Form 8-K filed on April 30, 2019 (File No. 001-36876))

10.6		Form of Warrant (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on July 24, 2019 (File No. 001-36876))

10.7		Babcock & Wilcox Enterprises, Inc. Amended and Restated 2015 Long-Term Incentive Plan (Amended and Restated as ~~revised effective~~of June ~~1, 2018~~14, 2019) (incorporated by reference to Appendix G to the Babcock & Wilcox Enterprises, Inc. Definitive Proxy Statement filed with the Securities and Exchange Commission on May 13, 2019).

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

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

32.1		Section 1350 certification of Chief Executive Officer

32.2		Section 1350 certification of Chief Financial Officer

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document


*		~~Certain schedules and exhibits to~~The Company has omitted certain information contained in this ~~agreement have been omitted~~exhibit pursuant to ~~Item~~Rule 601(b)~~(2)~~(10) of Regulation S-K. ~~A copy of any~~The omitted ~~schedule and/or exhibit will be furnished~~information is not material and, if publicly disclosed, would likely cause competitive harm to the ~~SEC upon request.~~ Company.



~~August 9, 2018~~			BABCOCK & WILCOX ENTERPRISES, INC.

	August 8, 2019	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)