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

For the quarterly period ended March 31, ~~2021~~2022


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

For the transition period from to

Commission File No. 001-36876

Registrant's Telephone Number, Including Area Code: (330) 753-4511

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	BW	New York Stock Exchange
8.125% Senior Notes due 2026	BWSN	New York Stock Exchange
6.50% Senior Notes due 2026	BWNB	New York Stock Exchange
7.75% Series A Cumulative Perpetual Preferred Stock	BW PRA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

This Quarterly Report on Form 10-Q, 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. All statements other than statements of historical or current fact included in this Quarterly Report are forward-looking statements. You should not place undue reliance on these statements. Forward-looking statements include words such as “expect,” “intend,” “plan,” “likely,” “seek,” “believe,” “project,” “forecast,” “target,” “goal,” “potential,” “estimate,” “may,” “might,” “will,” “would,” “should,” “could,” “can,” “have,” “due,” “anticipate,” “assume,” “contemplate,” “continue” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operational performance or other events.

These forward-looking statements are based on management’s current expectations and involve a number of risks and uncertainties, including, among other things, the impact of COVID-19 and the invasion of Ukraine by Russia and the capital markets and global economic climate generally; our ability to integrate acquired businesses and the impact of those acquired businesses on our cash flows, results of operations and financial condition, including our recent acquisitions of Fosler Construction Company Inc., VODA A/S, Fossil Power Systems, Inc., and Optimus Industries, LLC; our recognition of any asset impairments as a result of any decline in the value of our assets or our efforts to dispose of any assets in the future; 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 comply with the requirements of, and to service the indebtedness under, our debt facility agreements; our ability to pay dividends on our 7.75% Series A Cumulative Perpetual Preferred Stock; our ability to make interest payments on our 8.125% senior notes due 2026 and our 6.50% notes due 2026; the highly competitive nature of our businesses and our ability to win work, including identified project opportunities in our pipeline; general economic and business conditions, including changes in interest rates and currency exchange rates; 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 successfully resolve claims by vendors for goods and services provided and claims by customers for items under warranty; our ability to realize anticipated savings and operational benefits from our restructuring plans, and other cost savings initiatives; our ability to successfully address productivity and schedule issues in our B&W Renewable, B&W Environmental and B&W Thermal segments; our ability to successfully partner with third parties to win and execute contracts within our B&W Environmental, B&W Renewable and B&W Thermal segments; changes in our effective tax rate and tax positions, including any limitation on our ability to use our net operating loss carryforwards and other tax assets; 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; difficulties we may encounter in obtaining regulatory or other necessary permits or approvals; changes in actuarial assumptions and market fluctuations that affect our net pension liabilities and income; our ability to successfully compete with current and future competitors; our ability to negotiate and maintain good relationships with labor unions; changes in pension and medical expenses associated with our retirement benefit programs; social, political, competitive and economic situations in foreign countries where we do business or seek new business, and the other factors specified and set forth under "Risk Factors" in our periodic reports filed with the Securities and Exchange Commission, including our most recent annual report on Form 10-K filed on March 8, 2022.

These forward-looking statements are made based upon detailed assumptions and reflect management’s current expectations and beliefs. While we believe that these assumptions underlying the forward-looking statements are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect actual results.

The forward-looking statements included herein are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

~~See accompanying notes to Condensed Consolidated Financial Statements.~~

CONDENSED CONSOLIDATED ~~BALANCE SHEETS~~STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


	Three Months Ended March 31,
(in thousands)		2022		2021
Net loss		$	(8,684)	$	(15,443)
Other comprehensive (loss) income:
Currency translation adjustments ("CTA")		(4,285)		$	(70)

Reclassification of CTA to net loss		—		(4,512)






Benefit obligations:
Pension and post retirement adjustments, net of tax		593		198

Other comprehensive loss		(3,692)		(4,384)
Total comprehensive loss		(12,376)		(19,827)
Comprehensive income attributable to non-controlling interest		461		3
Comprehensive loss attributable to stockholders		$	(11,915)	$	(19,824)

See accompanying notes to Condensed Consolidated Financial Statements.

Common Stock Capital In
Excess of
Par Value Treasury Stock Accumulated Deficit Accumulated
Other
Comprehensive
Loss Non-controlling
Interest Total
Stockholders’
Deficit
Shares Par Value
(in thousands, except share and per share amounts)
Balance at December 31, 2020 54,452 $ 4,784 $ 1,164,436 $ (105,990) $ (1,350,206) $ (52,390) $ 1,104 $ (338,262)
Net (loss) income — — — — (15,464) — 21 (15,443)
Currency translation adjustments — — — — — (4,582) (24) (4,606)
Defined benefit obligations — — — — — 198 — 198
Stock-based compensation charges 1,725 22 4,480 (3,308) — — — 1,194
Common stock offering 29,487 295 161,218 — — — — 161,513
Dividends to non-controlling interest — — — — — — (38) (38)
Balance at March 31, 2021 85,664 $ 5,101 $ 1,330,134 $ (109,298) $ (1,365,670) $ (56,774) $ 1,063 $ (195,444)

Common Stock Capital In
Excess of
Par Value Treasury Stock Accumulated Deficit Accumulated
Other
Comprehensive
Income Non-controlling
Interest Total
Stockholders’
Deficit
Shares Par Value
(in thousands, except share and per share amounts)
Balance at December 31, 2019 46,374 $ 4,699 $ 1,142,614 $ (105,707) $ (1,339,888) $ 1,926 $ 1,417 $ (294,939)
Net loss — — — — (31,526) — (96) (31,622)
Currency translation adjustments — — — — — 2,380 (58) 2,322
Defined benefit obligations — — — — — (246) — (246)
Stock-based compensation charges 33 4 876 (9) — — — 871
Dividends to noncontrolling interest — — — — — — (36) (36)
Balance at March 31, 2020 46,407 $ 4,703 $ 1,143,490 $ (105,716) $ (1,371,414) $ 4,060 $ 1,227 $ (323,650)

See accompanying notes to Condensed Consolidated Financial Statements.

Three months ended March 31,
(in thousands) 2021 2020
Cash flows from operating activities:
Net loss $ (15,443) $ (31,622)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of long-lived assets 4,058 4,208
Amortization of deferred financing costs, debt discount and payment-in-kind interest 5,779 9,877
Amortization of guaranty fee 452 0
Non-cash operating lease expense 1,140 1,223
Gain on sale of business (358) 0
Gains on asset disposals (2,005) (915)
Provision for (benefit from) deferred income taxes, including valuation allowances 1,557 (424)
Prior service cost amortization for pension and postretirement plans 198 (246)
Stock-based compensation, net of associated income taxes 4,502 880
Foreign exchange 1,209 9,326
Changes in assets and liabilities:
Accounts receivable (11,629) 10,599
Contracts in progress (6,911) 7,690
Advance billings on contracts 18,226 (7,321)
Inventories (1,863) 1,286
Income taxes (1,919) (1,888)
Accounts payable 6,246 (26,451)
Accrued and other current liabilities (17,127) 6,110
Accrued contract loss (129) (2,593)
Pension liabilities, accrued postretirement benefits and employee benefits (33,640) (10,258)
Other, net (6,297) (4,942)
Net cash used in operating activities (53,954) (35,461)
Cash flows from investing activities:
Purchase of property, plant and equipment (1,410) (2,394)
Proceeds from sale of business and assets, net 3,297 0
Purchases of available-for-sale securities (3,394) (6,352)
Sales and maturities of available-for-sale securities 5,495 3,420
Other, net 534 831
Net cash from (used in) investing activities 4,522 (4,495)
Cash flows from financing activities:
Borrowings under our U.S. revolving credit facility 14,500 70,200
Repayments of our U.S. revolving credit facility (178,800) (64,200)
Borrowings under last out term loans 0 30,000
Repayments under last out term loans (75,000) 0
Issuance of senior notes 125,000 0
Shares of our common stock returned to treasury stock (3,308) (9)
Issuance of common stock, net 161,513 0
Debt issuance costs (7,727) (5,749)
Other, net (241) 550
Net cash from financing activities 35,937 30,792
Effects of exchange rate changes on cash 4,518 (1,392)
Net decrease in cash, cash equivalents and restricted cash (8,977) (10,556)
Cash, cash equivalents and restricted cash, beginning of period 67,423 56,941
Cash, cash equivalents and restricted cash, end of period $ 58,446 $ 46,385


	Common Stock			Preferred Stock			Capital In Excess of Par Value		Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive (Loss)		Non-controlling Interest		Total Stockholders’ Equity
(in thousands, except share amounts)	Shares	Par Value		Shares	Par Value
Balance at December 31, 2021	86,286	$	5,110	7,669	$	77	$	1,518,872	$	(110,934)	$	(1,321,154)	$	(58,822)	$	25,473	$	58,622
Net loss	—	—		—	—		—		—		(8,264)		—		(420)		(8,684)
Currency translation adjustments	—	—		—	—		—		—		—		(4,285)		(41)		(4,326)

Pension and post retirement adjustments, net of tax	—	—		—	—		—		—		—		593		—		593
Stock-based compensation charges	52	1		—	—		1,765		(221)		—		—		—		1,545
Dividends to preferred stockholders	—	—		—	—		—		—		(3,715)		—		—		(3,715)
Preferred stock, net	—	—		—	—		(92)		—		—		—		—		(92)



Dividends to non-controlling interest	—	—		—	—		—		—		—		—		(1)		(1)
Balance at March 31, 2022	86,338	$	5,111	7,669	$	77	$	1,520,545	$	(111,155)	$	(1,333,133)	$	(62,514)	$	25,011	$	43,942


	Common Stock			Capital In Excess of Par Value		Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive (Loss)		Non-controlling Interest		Total Stockholders’ Deficit
(in thousands, except share amounts)	Shares	Par Value
Balance at December 31, 2020	54,452	$	4,784	$	1,164,436	$	(105,990)	$	(1,350,206)	$	(52,390)	$	1,104	$	(338,262)
Net loss	—	—		—		—		(15,464)		—		21		(15,443)
Currency translation adjustments	—	—		—		—		—		(4,582)		(24)		(4,606)
Pension and post retirement adjustments, net of tax	—	—		—		—		—		198		—		198
Stock-based compensation charges	1,725	22		4,480		(3,308)		—		—		—		1,194
Common stock offering	29,487	295		161,218		—		—		—		—		161,513
Dividends to non-controlling interest	—	—		—		—		—		—		(38)		(38)
Balance at March 31, 2021	85,664	$	5,101	$	1,330,134	$	(109,298)	$	(1,365,670)	$	(56,774)	$	1,063	$	(195,444)

See accompanying notes to Condensed Consolidated Financial Statements.


	Three Months Ended March 31,
(in thousands)	2022		2021
Cash flows from operating activities:
Net loss	$	(8,684)	$	(15,443)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of long-lived assets	6,202		4,058
Amortization of deferred financing costs and debt discount	834		5,779
Amortization of guaranty fee	231		452
Non-cash operating lease expense	1,174		1,140
Gain on sale of business	—		(358)

Gain on asset disposals	—		(2,005)
(Benefit from) provision for deferred income taxes	(689)		1,557
Prior service cost amortization for pension and postretirement plans	593		198
Stock-based compensation, net of associated income taxes	1,766		4,502

Foreign exchange	(3,085)		1,209
Changes in assets and liabilities:
Accounts receivable	(28,694)		(11,629)
Contracts in progress	(13,334)		(6,911)
Advance billings on contracts	27,532		18,226
Inventories	(2,996)		(1,863)
Income taxes	(7,009)		(1,919)
Accounts payable	11,297		6,246
Accrued and other current liabilities	(11,290)		(17,127)
Accrued contract loss	4,274		(129)
Pension liabilities, accrued postretirement benefits and employee benefits	(10,048)		(33,640)
Other, net	(10,073)		(6,297)
Net cash used in operating activities	(41,999)		(53,954)
Cash flows from investing activities:
Purchase of property, plant and equipment	(1,004)		(1,410)
Acquisition of business, net of cash acquired	(64,914)		—
Proceeds from sale of business and assets, net	—		3,297
Purchases of available-for-sale securities	(1,125)		(3,394)
Sales and maturities of available-for-sale securities	1,674		5,495
Other, net	(15)		534
Net cash (used in) from investing activities	(65,384)		4,522


	Three Months Ended March 31,
(in thousands)	2022		2021
Cash flows from financing activities:
Issuance of senior notes	2,016		125,000
Borrowings on loan payable	1,342		—
Repayments on loan payable	(31)		—

Repayments under last out term loans	—		(75,000)
Borrowings under U.S. revolving credit facility	—		14,500
Repayments of U.S. revolving credit facility	—		(178,800)

Preferred stock fees	—		—
Payment of preferred stock dividends	(3,715)		—
Shares of common stock returned to treasury stock	(221)		(3,308)


Issuance of common stock, net	—		161,513
Debt issuance costs	(119)		(7,727)
Other, net	(840)		(241)
Net cash (used in) from financing activities	(1,568)		35,937
Effects of exchange rate changes on cash	(794)		4,518
Net decrease in cash, cash equivalents and restricted cash	(109,745)		(8,977)
Cash, cash equivalents and restricted cash, beginning of period	226,715		67,423
Cash, cash equivalents and restricted cash, end of period	$	116,970	$	58,446

See accompanying notes to Condensed Consolidated Financial Statements.

Beginning in April 2020 and continuing as of May 13, 2021, as part of the Company’s response to the impact of the COVID-19 pandemic on its business, the Company continues to take a number of cash conservation and cost reduction measures which include:

•~~suspension of our 401(k) company match for U.S. employees for 2021;~~

•~~utilizing options for government loans and programs in the U.S. and abroad that are appropriate and available; and~~

•deferring $20.9 million of the estimated Pension Plan contribution payments of $45.6 million that would have been due during 2021, in accordance with the American Rescue Plan Act of 2021 (the "ARPA relief plan") signed into law in March 2021. In January 2021, we made Pension Plan contributions of $23.1 million, excluding interest.

NOTE 2 – EARNINGS PER SHARE

~~If we had net income in the three months ended March 31,~~ 2021, diluted shares would include an additional 0.9 million and 1.6 million ~~shares. If we had net income in the three months ended March 31, 2020, diluted~~ shares, ~~would include an additional 0.5 million shares.~~respectively.

~~B&W’s innovative products and services~~Our operations are ~~organized into~~assessed based on 3 reportable market-facing segments ~~which changed in the third quarter of 2020~~ as part of the Company's strategic, market-focused organizational and re-branding initiative to accelerate growth and provide stakeholders with improved visibility into our renewable and environmental growth platforms. ~~Segment results for all periods have been restated for comparative purposes.~~ Our reportable segments are as follows:

•Babcock & Wilcox Renewable: Cost-effective technologies for efficient and environmentally sustainable power and heat generation, including waste-to-energy, solar construction and installation, biomass energy and black liquor systems for the pulp and paper industry. B&W’s leading technologies support a circular economy by diverting waste from landfills to use for power generation and replacing fossil fuels while recovering metals and reducing emissions.

•Babcock & Wilcox Environmental: A full suite of best-in-class emissions control and environmental technology solutions for utility, waste to energy, biomass, carbon black and industrial steam generation applications around the world. B&W’s broad experience includes systems for cooling, ash handling, particulate control, nitrogen oxides and sulfur dioxides removal, chemical looping for carbon control, and mercury control.

•Babcock & Wilcox Thermal: Steam generation equipment, aftermarket parts, construction, maintenance and field services for plants in the power generation, oil and gas, and industrial sectors. B&W has an extensive global base of installed equipment for utilities and general industrial applications including refining, petrochemical, food processing, metals and others.

B&W Renewable Services (1)

(1) B&W Renewable Services' 2021 revenues were reclassed from Vølund's prior year reported amount for year-over-year comparability.

~~The presentation~~Adjusted EBITDA on a consolidated basis is a non-GAAP metric defined as the sum of the ~~components of our~~ adjusted EBITDA infor each of the ~~table~~segments, further adjusted for corporate allocations and research and development costs. At a segment level, the adjusted EBITDA presented below is consistent with the ~~way our~~manner in which the Company's chief operating decision maker ("CODM") reviews the results of ~~our~~ operations and makes strategic decisions about ~~our business. Items~~the business and is calculated as earnings before interest, tax, depreciation and amortization adjusted for items such as gains or losses on asset sales, ~~MTM~~net pension ~~adjustments,~~benefits, restructuring costs, impairments, gains and losses on debt extinguishment, costs related to financial consulting, ~~required under our U.S. Revolving Credit Facility,~~ research and development costs and other costs that may not be directly controllable by segment management and are not allocated to the ~~segments.~~segment.The Company uses adjusted EBITDA internally to evaluate its performance and in making financial and operational decisions. When viewed in conjunction with GAAP results, the Company believes that its presentation of adjusted EBITDA provides investors with greater transparency and a greater understanding of factors affecting its financial condition and results of operations than GAAP measures alone. Prior period results have been revised to conform with the revised definition and present separate reconciling items in our reconciliation.

Product development (1)

(1) ~~Adjusted EBITDA for the three months ended March 31, 2020, excludes losses related~~Costs associated with development of commercially viable products that are ready to ~~a non-strategic business and interest on letters of credit included in cost of operations that were previously included in Adjusted EBITDA and total $(0.1) million and $(0.2) million, respectively.~~go to market.

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

On March 31, ~~2021~~2022 we had ~~$535.0~~$721.0 million of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately ~~51.0%~~61.4%, ~~18.7%~~15.4% and ~~30.3%~~23.2% of our remaining performance obligations as revenue in ~~the remainder of 2021,~~ 2022, 2023 and thereafter, respectively.

Changes in Contract Estimates

B&W Renewable Projects

initial recognition of $14.5 million of accrued liabilities and $0.4 million of warranty accruals during this acquisition's annual measurement period. We ~~had 6 B&W Renewable EPC contracts for renewable energy facilities in Europe that were loss contracts at December 31, 2017. The scope~~have submitted insurance claims to recover a portion of these EPC (Engineer, Procure and Construct) contracts extended beyond our core technology, products and services. In addition to these loss contracts, we have one remaining extended scope contract in our Babcock & Wilcox Renewable segment which turned into a loss contract in the fourth quarter of 2019.

~~In the three months ended March 31, 2021 and March 31, 2020, we recorded $0.1 million and $0.1 million in net gains, respectively, inclusive of warranty expense~~losses as described in Note 10, resulting from changes in the estimated revenues and costs to complete the 6 European B&W Renewable EPC loss contracts. All 6 contracts were approximately 100% complete at March 31, 2021; total liquidated damages associated with these 6 contracts were $92.5 million and $86.5 million at March 31, 2021 and March 31, 2020, respectively. The change in liquidated damages was due to foreign exchange impact.

In 2019, one of our other B&W Renewable energy contracts turned into a loss contract due to delays and other start-up costs prior to turnover to the client in October 2019. In the three months ended March 31, 2021 and March 31, 2020, we did 0t recognize additional charges on this contract. As of March 31, ~~2021, this contract was approximately 99% complete.~~

In September 2017, we identified the failure of a structural steel beam on a contact for a biomass plant in the United Kingdom, The engineering, design and manufacturing of the steel structure were the responsibility of our subcontractors. A similar design was also used on two other 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. The total costs related to the structural steel issues on these three contracts were estimated to be approximately $36 million, which is included in the March 31, 2021 estimated losses at completion for these three contracts. We are continuing to aggressively pursue recovery of this cost from responsible subcontractors. In October 2020, we entered into a settlement agreement with an insurer under which we received a settlement of $26.0 million to settle claims in connection with 5 of 6 European B&W Renewable EPC loss contracts disclosed above.

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

~~B&W Environmental Loss Contracts~~

At March 31, 2021, the B&W Environmental segment had 2 significant loss contracts, each of which are contracts for a dry cooling system for a gas-fired power plant in the United States. In the three months ended March 31, 2021 and March 31, 2020, we did 0t recognize additional charges on these contracts. As of March 31, 2021, the first contract was approximately 100% complete and the second contract was approximately 99% complete.2022.

The following summarizes the changes in the net carrying amount of goodwill as of March 31, ~~2021:~~2022:

Addition - Fossil Power(1)

Addition - Optimus Industries(1)

Measurement period adjustments - Fosler(1)(2)

Measurement period adjustments - VODA(1)(2)

(1) As described in Note 21, we are in the process of completing the purchase price allocation associated with the Fosler Construction, VODA, Fossil Power and Optimus Industries acquisitions and as a result, the provisional measurements of goodwill associated with these acquisitions are subject to change.

(2) Our preliminary purchase price allocation changed due to additional information and further analysis.

Goodwill is tested for impairment annually and on an interim basis when impairment indicators exist. ~~NaN~~No impairment indicators were identified during the three months ended March 31, ~~2021. Because~~2022.

As of March 31, 2022, Fosler's goodwill increase of $11.2 million included a $14.9 million increase resulting from the ~~B&W Thermal, B&W Construction Co., LLC, B&W Renewable~~initial recognition of $14.5 million of accrued liabilities and ~~B&W Environmental reporting units each had negative carrying values, reasonable changes~~$0.4 million of warranty accruals during this acquisition's annual measurement period, as described in ~~assumptions would not indicate impairment.~~Note 4.

NOTE 8 – INTANGIBLE ASSETS

(1) As described in Note 21, we are in the process of completing the purchase price allocation associated with the Fosler Construction, VODA, Fossil Power and Optimus Industries acquisitions and as a result, the increase in intangible assets associated with these acquisitions are subject to change.

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

Business acquisitions and adjustments(1)

(1) As described in Note 21, we are in the process of completing the purchase price allocation associated with the Fosler Construction, VODA, Fossil Power and Optimus Industries acquisitions and as a result, the increase in intangible assets associated with these acquisitions are subject to change.

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

Intangible assets are assessed for impairment on an interim basis when impairment indicators exist. No impairment indicators were identified during the three months ended March 31, 2022.

~~NOTE 9– LEASES~~

~~Certain fixed~~See Note 21 for intangible assets ~~for our Copley, Ohio location were sold on March 15, 2021, as described~~identified in ~~Note 23. In~~ conjunction with the ~~sale, we executed a leaseback agreement also commencing March 16, 2021~~acquisitions of Fosler Construction, VODA, Fossil Power and ~~expiring on March 31, 2033. The lease is classified as a finance lease with total future minimum payments during~~Optimus Industries, which are subject to change pending the ~~initial term~~finalization of the ~~lease of approximately $5.7 million as of March 31, 2021. An incremental borrowing rate of 7% was used to determine the ROU asset. We recorded a $3.7 million ROU asset in~~ ~~net property, plant and equipment, and finance lease~~ ~~and corresponding liabilities in~~ ~~otheraccrued liabilities~~ ~~and~~ ~~other non-current finance liabilities~~ ~~in the Condensed Consolidated Balance Sheets as of March 31, 2021~~.

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

Three months ended March 31,
(in thousands) Classification 2021 2020
Operating lease expense:
Operating lease expense Selling, general and administrative expenses $ 1,339 $ 1,507
Short-term lease expense Selling, general and administrative expenses 1,155 188
Variable lease expense (1)
Selling, general and administrative expenses 208 776
Total operating lease expense $ 2,702 $ 2,471
Finance lease expense:
Amortization of right-of-use assets Selling, general and administrative expenses $ 529 $ 515
Interest on lease liabilities Interest expense 616 615
Total finance lease expense $ 1,145 $ 1,130
Sublease income (2)
Other – net $ (22) $ (22)
Net lease cost $ 3,825 $ 3,579

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

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

~~Other information related to leases is as follows:~~

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

~~Future minimum lease payments required under non-cancellable leases as of March 31, 2021 were as follows:~~
(in thousands) Operating Leases Finance Leases Total
2021 (excluding the three months ended March 31, 2021) $ 3,467 $ 2,629 $ 6,096
2022 3,439 3,793 7,232
2023 2,407 3,879 6,286
2024 1,326 3,944 5,270
2025 313 3,969 4,282
Thereafter 19 38,412 38,431
Total $ 10,971 $ 56,626 $ 67,597
Less imputed interest (1,256) (22,551) (23,807)
Lease liability $ 9,715 $ 34,075 $ 43,790
purchase price allocation associated with these acquisitions.

We accrue estimated expense included in ~~cost~~Cost of operations on our Condensed Consolidated Statements of Operations to satisfy contractual warranty requirements when we recognize the associated revenues on the related contracts, or in the case of a loss contract, the full amount of the estimated warranty costs is accrued when the contract becomes a loss contract. Additions at March 31, 2022 included $0.4 million related to the Fosler projects, as described in Note 4. In addition, we record specific provisions or reductions where we expect the actual warranty costs to significantly differ from the accrued estimates. Such changes could have a material effect on our consolidated financial condition, results of operations and cash flows.

Three months ended March 31, Three months ended March 31,
2021 2020
(in thousands) Total Severance and related costs
Other (1)
Total Severance and related costs
Other (1)
B&W Renewable segment $ 509 $ 453 $ 56 $ 801 $ 658 $ 143
B&W Environmental segment 89 35 54 140 57 83
B&W Thermal segment 348 12 336 941 386 555
Corporate 47 0 47 69 0 69
$ 993 $ 500 $ 493 $ 1,951 $ 1,101 $ 850
Total Severance and related costs
Other (1)
Cumulative costs to date $ 41,307 33,713 7,594


	Three Months Ended March 31,						Three Months Ended March 31,
	2022						2021
(in thousands)	Total		Severance and related costs		Other (1)		Total		Severance and related Costs		Other(1)
B&W Renewable segment	$	(193)	$	(229)	$	36	$	509	$	453	$	56
B&W Environmental segment	69		10		59		89		35		54
B&W Thermal segment	198		50		148		348		12		336
Corporate	20		—		20		47		—		47
	$	94	$	(169)	$	263	$	993	$	500	$	493
Cumulative costs to date	$	45,277	37,083		8,194		0		0		0

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

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

Balance at beginning of period

Benefit plans, net (1)

Service cost included in COS (2)

(1) Benefit plans, net, which is presented separately in ~~the~~our 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~~ Cost of operations in ~~the~~our Condensed Consolidated ~~Statement~~Statements of Operations and is allocated to the B&W Thermal segment.

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

NOTE 1312 – ~~2021 SENIOR NOTES OFFERING~~DEBT

~~On February 12,~~Senior Notes

8.125% Senior Notes

During 2021, we completed ~~a public offering~~sales of ~~$125.0~~$151.2 million aggregate principal amount of our 8.125% senior notes due ~~2026. The offering was conducted pursuant to an underwriting agreement~~2026 (the ~~“Notes Underwriting Agreement”~~“8.125% Senior Notes”) ~~dated February 10, 2021, between us and B. Riley Securities, Inc., as representative of the several underwriters (the “Underwriters”). At the completion, we received gross~~for net proceeds of approximately ~~$125.0~~$146.6 million. Net proceeds received were approximately $120.0 million after deducting underwriting discounts and commissions, but before expenses. The Senior Notes were issued in denominations of $25.00 per Senior Note and in integral multiples thereof.

In addition to the ~~public offering,~~completed sales, we issued $35.0 million of 8.125% Senior Notes to B. Riley Financial, Inc., a related party, in exchange for a deemed prepayment of our then existing Last Out Term Loan Tranche ~~A-3 in a concurrent private offering.~~

A-3. The ~~components of the Senior Notes are as follows:~~


~~(in thousands)~~	~~March 31, 2021~~
8.125% ~~Senior Notes due 2026~~	$	~~160,000~~
~~Unamortized deferred financing costs~~	~~4,491~~
~~Net debt balance~~	$	~~155,509~~

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

interest to, but excluding, the date of redemption, (ii) on or after February 28, 2023 and prior to February 29, 2024, at a price equal to $25.50 per Senior Note, plus accrued and unpaid interest to, but excluding, the date of redemption, (iii) on or after February 29, 2024 and prior to February 28, 2025, at a price equal to $25.25 per Senior Note, plus accrued and unpaid interest to, but excluding, the date of redemption and (iv) on or after February 28, 2025 and prior to maturity, at a price equal to 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption. On and after any redemption date, interest will cease to accrue on the redeemed Senior Notes. The Indenture governing the Senior Notes contains customary events of default and cure provisions.

On March 31, 2021, we entered into a sales agreement with B. Riley Securities, Inc., a related party, in which we may sell to or through B. Riley Securities, Inc., from time to time, additional 8.125% Senior Notes up to an ~~aggregated~~aggregate principal amount of $150.0 ~~million of~~million. The 8.125% Senior ~~Notes. The Senior~~ Notes ~~will~~ have the same terms as (other than date of issuance), form a single series of debt securities with and have the same CUSIP number and beare fungible with the initial 8.125% Senior Notes ~~issued February 12, 2021, as described above.~~issuance in 2021.

During the first quarter of 2022, the Company sold $2.0 million aggregate principal of 8.125% Senior Notes ~~- Subsequent Event~~under the sales agreement described above for $2.0 million of net proceeds.

As6.50% Senior Notes

During 2021, we completed sales of ~~May 10, 2021, the Company has sold $10.6~~$151.4 million aggregate principal amount of our 6.50% senior notes due in 2026 (the “6.50% Senior ~~Notes~~Notes”) for ~~$11.0 million gross proceeds related to the March 31, 2021 sales agreement disclosed above. The Company received $10.7 million of~~ net ~~cash proceeds after commission and fees.~~

~~Exchange Agreement~~

On February 12, 2021, the Company and B. Riley entered into the Exchange Agreement pursuant to which we issued to B. Riley, a related party, $35.0 million aggregate principal amount of Senior Notes in exchange for a deemed prepayment of $35.0 million of our existing Tranche A term loan with B. Riley Financial (the “Exchange”).

~~NOTE 14 – 2021 COMMON STOCK OFFERING~~

On February 12, 2021, we completed a public offering of our common stock pursuant to an underwriting agreement (the “Underwriting Agreement”) dated February 9, 2021, between us and B. Riley Securities, Inc., as representative of the several underwriters (the “Underwriters”). At the closing, we issued to the public 29,487,180 shares of our common stock and received gross proceeds of approximately ~~$172.5~~$145.8 million. ~~Net proceeds from~~Interest on the ~~offering were approximately $163.0 million after deducting underwriting discounts~~6.50% Senior Notes is payable quarterly in arrears on March 31, June 30, September 30 and ~~commissions, but before expenses.~~

December 31 of each year, and commenced on March 31, 2022. The net proceeds of the offering were used to make a prepayment towards the balance outstanding under our U.S. Revolving Credit Facility and permanently reduce the commitments under our senior secured credit facilities.

~~NOTE 15– LAST OUT TERM LOANS~~6.50% Senior Notes mature on December 31, 2026.

The components of the ~~Last Out Term Loans by Tranche~~Company's senior notes at March 31, 2022 are as follows:


	~~March 31, 2021~~
~~(in thousands)~~	~~A-3~~
~~Proceeds~~ ~~(1)~~	$	~~61,660~~
~~Discount and fees~~	~~8,650~~
~~Paid-in-kind interest~~	~~3,020~~
~~Net debt balance~~	$	~~73,330~~

~~(1)~~ ~~Tranche A-3 proceeds represent the net proceeds after the $39.7 million principal prepayment from the July 2019 Equitization Transactions and a $40.0 million principal repayment in March 2021~~

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

~~(1)~~ ~~Tranche A-3 proceeds represent the net proceeds after the $39.7 million principal prepayment from the July 2019 Equitization Transactions.~~


	Senior Notes
(in thousands)	8.125%		6.50%		Total
Senior notes due 2026	$	188,200	$	151,440	$	339,640
Unamortized deferred financing costs	(5,043)		(6,297)		(11,340)
Unamortized premium	570		—		570
Net debt balance	$	183,727	$	145,143	$	328,870

~~Last Out Term Loans are incurred under our A&R Credit Agreement and are pari passu with the U.S.~~ Revolving Credit Facility except for certain payment subordination provisions. The Last Out Term Loans are subject to the same representations and warranties, covenants and events of default as the U.S. Revolving Credit Facility. In connection with the effectiveness of the A&R Credit Agreement, the maturity date for the Last Out Term Loans was extended to December 30, 2022.Debt

On ~~February 12,~~June 30, 2021, in connection with the Exchange described in Note 13, the interest rate on the remaining Last Out Term Loan Tranche A balances was reduced to 6.625% from 12.0%. Interest expense associated with the Last Out Term Loans is detailed in Note 17.

~~Tranche A-3~~

Effective with Amendment No. 16 to our previous Amended Credit Agreement, we borrowed $150.0 million face value from B. Riley, a related party, under Tranche A-3. The $141.4 million net proceeds from Tranche A-3 were primarily used to pay the amounts due under the settlement agreements covering certain European B&W Renewable loss projects as described in Note 4, with the remainder used for working capital and general corporate purposes.

As part of the Equitization Transactions of July 23, 2019, we prepaid $39.7 million principal of Tranche A-3. Also, on March 4, 2021, effective with A&R Amendment No. 3, we paid down an additional $40.0 million on our existing Tranche A-3.

~~Tranche A-4~~

On January 31, 2020, effective with Amendment No. 20 to the Amended Credit Agreement, we borrowed $30.0 million face value of the Tranche A-4 from B. Riley, a related party and received net proceeds of $26.3 million after incurring total fees of $3.7 million. On March 4, 2021, effective with A&R Amendment No. 3, we paid down the $30.0 million outstanding on our existing Tranche A-4.

~~Tranche A-5~~

~~On January 31, 2020,~~ we entered into ~~Amendment No. 20 to the Amended Credit Agreement. Amendment No. 20 provides an incremental Tranche A-5 to be extended prior to maturity of the Last Out Term Loans under the Amended~~a Revolving Credit Agreement (the “Revolving Credit Agreement”) with PNC Bank, National Association, as administrative agent (“PNC”) and a letter of credit agreement (the “Letter of Credit Agreement”) with PNC, pursuant to which PNC agreed to issue up to $110 million in ~~the event certain customer~~ letters of credit that is secured in part by cash collateral provided by an affiliate of MSD Partners, MSD PCOF Partners XLV, LLC (“MSD”), as well as a reimbursement, guaranty and security agreement with MSD, as administrative agent, and the cash collateral providers from time to time party thereto, along with certain of our subsidiaries as guarantors, pursuant to which we are ~~drawn. The terms~~obligated to reimburse MSD and any other cash collateral provider to the extent the cash collateral provided by MSD and any other cash collateral provider to secure the Letter of ~~Tranche A-5 are the same as the terms for the Tranche A-3 under the Amended~~ Credit ~~Agreement. As~~Agreement is drawn to satisfy draws on letters of ~~May 13, 2021, 0 borrowings occurred under Tranche A-5.~~

~~Tranche A-6~~

~~On May 14, 2020, effective~~credit (the “Reimbursement Agreement”) and collectively with the ~~A&R~~Revolving Credit Agreement ~~we borrowed $30.0 million face value~~and Letter of Credit Agreement, the “Debt Documents” and the facilities thereunder, the “Debt Facilities”). The obligations of the ~~Tranche A-6 from B. Riley, a related party, as described in Note 16. On November 30, 2020, we borrowed an additional $10.0 million face value~~Company under each of the ~~Tranche A-6 pursuant to the terms~~Debt Facilities are guaranteed by certain existing and future domestic and foreign subsidiaries of the ~~A&R Credit Agreement which required the proceeds to be applied as a permanent reduction of the U.S. Revolving Credit Facility.~~

~~As described in Note 13, on February 12, 2021, we issued $35.0 million of Senior Notes to~~Company. B. Riley Financial, Inc. ~~in exchange~~(“B. Riley”), a related party, has provided a guaranty of payment with regard to the Company’s obligations under the Reimbursement Agreement, as described below. The Company expects to use the proceeds and letter of credit availability under the Debt Facilities for a deemed prepayment of our existing Tranche A-6 as part of the Exchange. Also, on March 4, 2021, effective with A&R Amendment No. 3, we paid down the remaining $5.0 million outstanding on our existing Tranche A-6.

~~Tranche A-7~~

working capital purposes and general corporate purposes. The ~~A&R~~Revolving Credit Agreement ~~provided us with up to $50.0~~matures on June 30, 2025. As of March 31, 2022, no borrowings have occurred under the Revolving Credit Agreement and under the Letter of Credit Agreement, usage consisted of $16.2 million of ~~additional funding for~~financial letters of credit ~~in the form~~and $90.8 million of ~~Tranche A-7, from B. Riley, a related party, as described in Note 16. The $50.0 million will be available upon request by the Company, subject to certain limitations. As~~performance letters of ~~May 13, 2021, 0 borrowings occurred under Tranche A-7.~~credit.

2119

~~NOTE 16 – REVOLVING DEBT~~Each of the Debt Facilities has a maturity date of June 30, 2025. The interest rates applicable under the Revolving Credit Agreement float at a rate per annum equal to either (i) a base rate plus 2.0% or (ii) 1 or 3 month reserve-adjusted LIBOR rate plus 3.0%. The interest rates applicable to the Reimbursement Agreement float at a rate per annum equal to either (i) a base rate plus 6.50% or (ii) 1 or 3 month reserve-adjusted LIBOR plus 7.50%. Under the Letter of Credit Agreement, the Company is required to pay letter of credit fees on outstanding letters of credit equal to (i) administrative fees of 0.75% and (ii) fronting fees of 0.25%. Under the Revolving Credit Agreement, the Company is required to pay letter of credit fees on outstanding letters of credit equal to (i) letter of credit commitment fees of 3.0% and (ii) letter of credit fronting fees of 0.25%. Under each of the Revolving Credit Agreement and the Letter of Credit Agreement, we are required to pay a facility fee equal to 0.375% per annum of the unused portion of the Revolving Credit Agreement or the Letter of Credit Agreement, respectively. The Company is permitted to prepay all or any portion of the loans under the Revolving Credit Agreement prior to maturity without premium or penalty. Prepayments under the Reimbursement Agreement shall be subject to a prepayment fee of 2.25% in the first year after closing, 2.0% in the second year after closing and 1.25% in the third year after closing with no prepayment fee payable thereafter.

~~Our revolving debt was comprised~~The Company has mandatory prepayment obligations under the Reimbursement Agreement upon the receipt of ~~our U.S.~~proceeds from certain dispositions or casualty or condemnation events. The Revolving Credit ~~Facility in~~Agreement and Letter of Credit Agreement require mandatory prepayments to the ~~U.S.in the amount~~extent of ~~$164.3 million as of December 31, 2020. As described below, effective with A&R Amendment No. 3 on March 4, 2021, we can no longer obtain revolving loans under the terms of our A&R Credit Agreement.~~an over-advance.

~~A&R~~The obligations under the Debt Facilities are secured by substantially all assets of the Company and each of the guarantors, in each case subject to inter-creditor arrangements. As noted above, the obligations under the Letter of Credit ~~Agreement~~Facility are also secured by the cash collateral provided by MSD and any other cash collateral provider thereunder.

~~On May 11, 2015, we~~The Debt Documents contain certain representations and warranties, affirmative covenants, negative covenants and conditions that are customarily required for similar financings. The Debt Documents require the Company to comply with certain financial maintenance covenants, including a quarterly fixed charge coverage test of not less than 1.00 to 1.00, a quarterly senior net leverage ratio test of not greater than 2.50 to 1.00, a non-guarantor cash repatriation covenant not to exceed $35 million at any one time, a minimum liquidity covenant of at least $30.0 million at all times, and an annual cap on maintenance capital expenditures of $7.5 million. The Debt Documents also contain customary events of default (subject, in certain instances, to specified grace periods) including, but not limited to, the failure to make payments of interest or premium, if any, on, or principal under the respective facility, the failure to comply with certain covenants and agreements specified in the applicable Debt Agreement, defaults in respect of certain other indebtedness and certain events of insolvency. If any event of default occurs, the principal, premium, if any, interest and any other monetary obligations on all the then outstanding amounts under the Debt Documents may become due and payable immediately.

In connection with the Company’s entry into the Debt Documents on June 30, 2021, B. Riley, a related party, entered into ~~an amended credit agreement~~a Guaranty Agreement in favor of MSD, in its capacity as administrative agent under the Reimbursement Agreement, for the ratable benefit of MSD, the cash collateral providers and each co-agent or sub-agent appointed by MSD from time to time (the “B. Riley Guaranty”). The B. Riley Guaranty provides for the guarantee of all of the Company’s obligations under the Reimbursement Agreement. The B. Riley Guaranty is enforceable in certain circumstances, including, among others, certain events of default and the acceleration of the Company’s obligations under the Reimbursement Agreement. Under a fee letter with ~~a syndicate of lenders~~B. Riley, the Company agreed to pay B. Riley $0.9 million per annum in connection with ~~our spin-off from~~the B. Riley Guaranty. The ~~Babcock & Wilcox~~ Company ~~(now BWX Technologies, Inc.) which governs the U.S. Revolving Credit Facility and the Last Out Term Loans. Since June 2016, we have~~ entered into a ~~number of waivers and amendments~~reimbursement agreement with B. Riley governing the Company’s obligation to reimburse B. Riley to the ~~credit agreement, including several to avoid default~~extent the B. Riley Guaranty is called upon by the agent or lenders under the ~~financial and other covenants specified in the credit agreement.~~

~~On May 14, 2020, we entered into the A&R Credit Agreement which refinances and extends the maturity of our U.S. Revolving Credit Facility and Last Out Term Loans.~~

On October 30, 2020, we entered into A&R Amendment No. 1 with Bank of America, N.A. A&R Amendment No. 1, among other matters, (i) provides that, under the A&R Credit Agreement, the "Commitment Reduction Amount" shall be an amount equal to (a) for any "Prepayment Event" relating to a "Recovery Event" (each as defined under the A&R Credit Agreement), 50% of the net cash proceeds with respect to such Prepayment Event, and (b) with respect to any other Prepayment Event under the A&R Credit Agreement, the net cash proceeds with respect to such Prepayment Event, and (ii) establishes new financial covenants for interest coverage ratios and senior leverage ratios.

~~On February 8, 2021, we entered into A&R Amendment No. 2 with Bank of America, N.A., as administrative agent to the lenders under our Amended and Restated Credit~~Reimbursement Agreement. A&R Amendment No. 2 amends our A&R Credit Agreement to, among other matters, (i) permit the issuance of 8.125% Senior Notes offering described above, (ii) permit the deemed prepayment of $35.0 million of our Last Out Term Loan Tranche A with $35.0 million principal amount of Senior Notes, (iii) provide that 75% of the Senior Notes gross proceeds shall be used to repay outstanding borrowings and permanently reduce the commitments under our senior secured credit facilities, and (iv) provide that $5.0 million of certain previously deferred facility fees will be paid by the Company.

On March 4, 2021, we entered into A&R Amendment No. 3 with Bank of America, N.A. A&R Amendment No. 3, among other matters, at the date of effectiveness (i) permits the prepayment of certain term loans, (ii) reduces the revolving credit

~~commitments to $130.0 million and removes the ability to obtain revolving loans under the credit agreement, and (iii) amends certain covenants and conditions to the extension of credit.~~

On March 26, 2021, we entered into A&R Amendment No. 4 with Bank of America, N.A. A&R Amendment No. 4, among other matters, at the date of effectiveness (i) permits the issuance of 8.125% senior notes due 2026 up to an aggregate principle amount of $150.0 million, and (ii) modifies the calculation of the senior leverage ratio.

As of March 31, ~~2021,~~2022, a subsidiary has borrowed $1.7 million against a $3.5 million line of credit with a variable interest rate on the ~~future effective minimum interest coverage ratios under our A&R Credit Agreement are as follows:~~

•~~0.80:1.00 for~~line of credit of 5.0% per annum. On April 1, 2022, the ~~quarter ending June 30, 2021~~

•~~1.00:1.00 for the quarter ending September 30, 2021~~

•~~1.10:1.00 for the quarter ending December 31, 2021~~

•~~1.25:1.00 for the quarter ending March 31, 2022~~line of credit was paid in full and ~~the last day of each fiscal quarter ending thereafter~~terminated.

~~As of March 31,~~Effective with the Revolving Credit Agreement, the Company entered into on June 30, 2021, the ~~future effective maximum permitted senior leverage ratios under our A&R Credit Agreement~~Company has no remaining Last Out Term Loans and no further borrowings thereunder are ~~as follows:~~

•~~4.25:1.00 for the quarter ending June 30, 2021~~

•~~3.75:1.00 for the quarter ending September 30, 2021~~

•~~3.00:1.00 for the quarter ending December 31, 2021~~

•~~2.25:1.00 for the quarter ending March 31, 2022 and the last day of each fiscal quarter ending thereafter~~

~~See Note 25 - Subsequent Events for an additional amendment to the A&R Credit Agreement as of May 10, 2021.~~

~~U.S. Revolving Credit Facility~~

As of March 31, 2021, effective with Amendment No. 3 to the A&R Credit Agreement described above, the U.S. Revolving Credit Facility provides for an aggregate letters of credit amount of up to $130.0 million.

At March 31, 2021, usage under the U.S. Revolving Credit Facility consisted of $22.0 million of financial letters of credit and $82.1 million of performance letters of credit. At March 31, 2021, we had approximately $25.9 million available to meet letter of credit requirements based on our overall facility size.

On February 12, 2021, we received gross proceeds of $125.0 million from the 2021 Senior Notes offering. As required by the Company’s U.S. Revolving Credit Facility, 75% of the gross proceeds or $93.8 million received by the Company was applied as a permanent reduction of the U.S. Revolving Credit Facility as of February 12, 2021.

~~Also on February 16, 2021, we prepaid $167.1 million toward the remaining outstanding U.S. Revolving Credit Facility.~~available.

Letters of Credit, Bank Guarantees and Surety Bonds

Certain of our subsidiaries, primarily outside of the United States, have credit arrangements with various commercial banks and other financial institutions for the issuance of letters of credit and bank guarantees in association with contracting activity. The aggregate value of all such letters of credit and bank guarantees ~~opened~~ outside of ~~the U.S. Revolving~~our Letter of Credit ~~Facility~~Agreement as of March 31, ~~2021 and December 31, 2020~~2022 was ~~$60.7 million and $88.5 million, respectively.~~$48.3 million. The aggregate value of the outstanding letters of credit provided byunder the ~~U.S. Revolving~~ Letter of

Credit ~~Facility~~Agreement backstopping letters of credit or bank guarantees was ~~$18.0~~$34.8 million as of March 31, ~~2021.~~2022. Of the outstanding letters of credit issued under the ~~U.S. Revolving~~Letter of Credit ~~Facility, $27.3~~Agreement, $52.0 million are subject to foreign currency revaluation.

We have also posted surety bonds to support contractual obligations to customers relating to certain contracts. We utilize bonding facilities to support such obligations, but the issuance of bonds under those facilities is typically at the surety's discretion. These bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds ~~those~~the underwriters issue in support of some of our contracting activity. As of March 31, ~~2021,~~2022, bonds issued and outstanding under these arrangements in support of our contracts totaled approximately ~~$266.4~~$221.5 million. The aggregate value of the letters of credit ~~provided by the U.S. Revolving Credit facility~~ backstopping surety bonds was ~~$34.7~~$9.2 million.

Our ability to obtain and maintain sufficient capacity under our ~~U.S. Revolving Credit Facility~~current Debt Facilities is essential to allow us to support the issuance of letters of credit, bank guarantees and surety bonds. Without sufficient capacity, our ability to support contract security requirements in the future will be diminished.

Other Indebtedness - Loans Payable

As of March 31, 2022, our Denmark subsidiary has 3 unsecured interest-free loans totaling $3.3 million under a local government loan program related to COVID-19. The loans of $0.8 million, $1.6 million and $0.9 million are payable in April 2022, May 2022 and May 2023, respectively. The loan payable in May 2023 is included in Long term loans payables in our Condensed Consolidated Balance Sheets. Subsequent to March 31, 2022, the loan due April 2022 was repaid on April 1, 2022.

As of March 31, 2022, Fosler Construction has 2 loans totaling $8.9 million. Both loans have a variable interest rate with a minimum rate of 6.0% and are due June 30, 2022. Fosler Construction also has loans, primarily for vehicles and equipment, totaling $0.6 million at March 31, 2022. The vehicle and equipment loans are included in long term loans payables in our Condensed Consolidated Balance Sheets.

NOTE 13 – PREFERRED STOCK

In May 2021, we completed a public offering of our 7.75% Series A Cumulative Perpetual Preferred Stock (the "Preferred Stock") pursuant to an underwriting agreement (the “Underwriting Agreement”) between us and B. Riley Securities, Inc.. At the closing, we issued to the public 4,444,700 shares of our Preferred Stock, at an offering price of $25.00 per share for net proceeds of approximately $106.4 million after deducting underwriting discounts, commissions but before expenses. The Preferred Stock has a par value of $0.01 per share and is perpetual and has no maturity date. The Preferred Stock has a cumulative cash dividend, when and as if declared by our Board of Directors, at a rate of 7.75% per year on the liquidation preference amount of $25.00 per share and payable quarterly in arrears.

The Preferred Stock ranks, as to dividend rights and rights as to the distribution of assets upon our liquidation, dissolution or winding-up: (1) senior to all classes or series of our common stock and to all other capital stock issued by us expressly designated as ranking junior to the Preferred Stock; (2) on parity with any future class or series of our capital stock expressly designated as ranking on parity with the Preferred Stock; (3) junior to any future class or series of our capital stock expressly designated as ranking senior to the Preferred Stock; and (4) junior to all our existing and future indebtedness.

The Preferred Stock has no stated maturity and is not subject to mandatory redemption or any sinking fund. We will pay cumulative cash dividends on the Preferred Stock when, as and if declared by our Board of Directors, only out of funds legally available for payment of dividends. Dividends on the Preferred Stock will accrue on the stated amount of $25.00 per share of the Preferred Stock at a rate per annum equal to 7.75% (equivalent to $1.9375 per year), payable quarterly in arrears. Dividends on the Preferred Stock declared by our Board of Directors will be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year.

During the three months ending March 31, 2022, the Company's Board of Directors approved dividends totaling $3.7 million. There are no cumulative undeclared dividends of the Preferred Stock at March 31, 2022.

On June 1, 2021, the Company and B. Riley, a related party, entered into an agreement (the “Exchange Agreement”) pursuant to which we (i) issued B. Riley 2,916,880 shares of our Preferred Stock, representing an exchange price of $25.00 per share

and paid $0.4 million in cash, and (ii) paid $0.9 million in cash to B. Riley for accrued interest due, in exchange for a deemed prepayment of $73.3 million of our then existing term loans with B. Riley under the Company’s prior A&R Credit Agreement.

On July 7, 2021, we entered into a sales agreement with B. Riley Securities, Inc., a related party, in connection with the offer to or through B. Riley Securities, Inc., from time to time, additional shares of Preferred Stock up to an aggregate amount of $76.0 million of Preferred Stock. The Preferred Stock has the same terms and have the same CUSIP number and is fungible with, the Preferred Stock issued during May 2021. For the three months ending March 31, 2022, the Company has sold no additional Preferred Stock pursuant to the sales agreement. As of December 31, 2021, the Company sold $7.7 million aggregate principal amount of Preferred Stock for $7.7 million of net proceeds.

NOTE 14 – COMMON STOCK

On February 12, 2021, we completed a public offering of our common stock pursuant to an underwriting agreement dated February 9, 2021, between us and B. Riley Securities, Inc., as representative of the several underwriters. At the time of closing, we issued to the public 29,487,180 shares of our common stock and received net proceeds of approximately $163.0 million after deducting underwriting discounts and commissions, but before expenses. The net proceeds of the offering were used to make a prepayment toward the balance outstanding under our then existing U.S. Revolving Credit Facility and permanently reduced the commitments under our senior secured credit facilities.

NOTE 1715 –INTEREST EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION

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


		Three months ended March 31,						Three Months Ended March 31,
(in thousands)	(in thousands)		2021		2020		(in thousands)		2022		2021
Components associated with borrowings from:	Components associated with borrowings from:						Components associated with borrowings from:
Senior Notes			$	1,733	$	0
Senior notes							Senior notes		$	6,216	$	1,733
Last Out Term Loans - cash interest	Last Out Term Loans - cash interest		3,513		4,048		Last Out Term Loans - cash interest		—		3,513

U.S. Revolving Credit Facility	U.S. Revolving Credit Facility		$	1,416	$	4,039	U.S. Revolving Credit Facility		—		1,416
			6,662		8,087				6,216		6,662
Components associated with amortization or accretion of:	Components associated with amortization or accretion of:						Components associated with amortization or accretion of:
Senior Notes			1,468		0
Last Out Term Loans - discount and financing fees			0		2,150
U.S. Revolving Credit Facility - deferred financing fees and commitment fees			4,400		9,035
U.S. Revolving Credit Facility - deferred ticking fee for Amendment 16			0		1,658
Revolving Credit Agreement							Revolving Credit Agreement		1,060		—
Senior notes							Senior notes		643		1,468
U.S. Revolving Credit Facility							U.S. Revolving Credit Facility		—		4,400
			5,868		12,843				1,703		5,868

Components associated with interest from:							Components associated with interest from:
Lease liabilities							Lease liabilities		708		616
Other interest expense	Other interest expense		1,693		1,161		Other interest expense		2,640		1,077
									3,348		1,693

Total interest expense	Total interest expense		$	14,223	$	22,091	Total interest expense		$	11,267	$	14,223

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

Hold-back for acquisition purchase price (1)

The following cash activity is presented as a supplement to our Condensed Consolidated Statements of Cash Flows and is included in Net cash used in operating activities:

Litigation Relating to Boiler Installation and Supply Contract

On December 27, 2019, a complaint was filed against Babcock & Wilcox by P.H. Glatfelter Company (“Glatfelter”) in the United States District Court for the Middle District of Pennsylvania, Case No. 1:19-cv-02215-JPW, alleging claims of breach of contract, fraud, negligent misrepresentation, promissory estoppel and unjust enrichment (the “Glatfelter Litigation”). The complaint alleges damages in excess of $58.9 million. On March 16, 2020 we filed a motion to dismiss, and on December 14, 2020 the court issued its order dismissing the fraud and negligent misrepresentation claims and finding that, in the event that parties’ contract is found to be valid, Plaintiffs’ claims for damages will be subject to the contractual cap on liability (defined as the $11.7 million purchase price subject to certain adjustments). On January 11, 2021, we filed our ~~Answer~~answer and a ~~Counterclaim~~counterclaim for breach of contract, seeking damages in excess of $2.9 million. We intend to continue to vigorously litigate the action. However, given the ~~preliminary~~ stage of the litigation, it is too early to determine if the outcome of the Glatfelter Litigation will have a material adverse impact on our ~~condensed~~ consolidated financial condition, results of operations or cash flows.

~~SEC Investigation~~

The U.S. SEC is conducting a formal investigation of the Company, focusing on the accounting charges and related matters involving the Company's B&W Renewable segment from 2015-2019. The SEC has served multiple subpoenas on the Company for documents. The Company is cooperating with the SEC related to the subpoenas and investigation. The SEC has taken testimony from past and current officers, directors, and employees in addition to also seeking testimony from certain third-parties. It is reasonably possible that the SEC may bring one or more claims against the Company and certain individuals. Due to the stage of the investigation, we are unable to estimate the amount of loss or range of potential loss of any claim. However, there can be no assurance that such claims will not have a material impact on the Company.

Stockholder Derivative and Class Action Litigation

Russian Invasion of Ukraine

We do not currently have contracts directly with Russian entities or businesses and we currently do not do business in Russia directly. We believe the Company’s only involvement with Russia or Russian-entities, involves sales of our products in the amount of approximately $3.1 million by a wholly-owned Italian subsidiary of the Company to non-Russian counterparties who may resell our products to Russian entities or perform services in Russia using our products. The economic sanctions and export-control measures and the ongoing invasion of Ukraine could impact our subsidiary’s rights and responsibilities under the contracts and could result in potential losses to the Company.

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

Available-For-Sale Securities

Our investments in available-for-sale securities are presented in other assets on our Condensed Consolidated Balance Sheets with contractual maturities ranging from 0-5 years.

(in thousands) March 31, 2021
Senior Notes Carrying Value Estimated Fair Value
8.125% Senior Notes due 2026 ('BWSN') $ 160,000 $ 169,536


(in thousands)	March 31, 2022
Senior Notes	Carrying Value		Estimated Fair Value
8.125% Senior Notes due 2026 ('BWSN')	$	188,200	$	197,759
6.50% Senior Notes due 2026 ('BWNB')	$	151,440	$	144,353

Other Financial Instruments

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

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

•~~Last Out Term Loans and~~ Revolving Debt. We base the fair values of debt instruments on quoted market prices. Where quoted prices are not available, we base the fair values on Level 2 inputs such as the present value of future cash flows discounted at estimated borrowing rates for similar debt instruments or on estimated prices based on current yields for debt issues of similar quality and terms. The fair value of our ~~Last Out Term Loans~~Revolving Debt approximated their carrying value at March 31, ~~2021 and December 31, 2020. The fair value of our Revolving Debt approximated their carrying value at December 31, 2020.~~2022.

•Warrants. The fair value of the warrants was established using the Black-Scholes option pricing model value approach.

•Contingent consideration: In connection with the Fosler Construction Company acquisition, the Company agreed to pay contingent consideration based on the achievement of targeted revenue thresholds for the year ended December 31, 2022. The range of undiscounted amounts the Company could be required to pay under the contingent consideration arrangement is between $0.0 million and $10.0 million. As of March 31, 2022, the fair value of the contingent consideration liability is $9.6 million and is classified as a component of other current liabilities in the Company's Condensed Consolidated Balance Sheets. The fair value measurement of the contingent consideration related to the Fosler Construction Company acquisition was categorized as a Level 3 liability, as the measurement amount is based primarily on significant inputs not observable in the markets. The Company evaluates the fair value of contingent consideration and the corresponding liability each reporting period using an option pricing framework. The Company estimates projections during the earn-out period and volatility within the option pricing model captures variability in the potential pay-out. The analysis considers a discount rate applicable to the underlying projections and the risk of the Company paying the future liability.

NOTE 2220 – RELATED PARTY TRANSACTIONS

The Company believes transactions with related parties were conducted on terms equivalent to those prevailing in an arm's length transaction.

Transactions with B. Riley

Based on its Schedule 13D filings with the SEC, B. Riley beneficially owns ~~33.2%~~approximately 30.3% of our outstanding common stock as of March 31, ~~2021.~~2022.

~~B. Riley is party to the Last Out Term Loans as described in Note 15.~~

We entered into an agreement with BRPI Executive Consulting, LLC, an affiliate of B. Riley, on November 19, 2018 and amended the agreement on November 9, 2020 to retain the services of Mr. Kenny Young, to serve as our Chief Executive Officer until December 31, 2023, unless terminated by either party with thirty days written notice. Under this agreement, payments are $0.75 million per annum, paid monthly. Subject to the achievement of certain performance objectives as determined by the Compensation Committee of the Board, a bonus or bonuses may also be earned and payable to BRPI Executive Consulting, LLC.

Total fees associated with B. Riley related to the ~~Last Out Term Loans and~~ services of Mr. Kenny Young ~~both as described above, were~~ were $0.2 million and ~~$4.2~~$0.2 million for the three months ended March 31, 2022 and 2021, ~~and 2020, respectively.~~

respectively

On November 13, 2020 we entered into an agreement with B. Riley Principal Merger Corp. II, an affiliate of B. Riley, to purchase 200,000 shares of Class A common stock of Eos Energy Storage LLC for an aggregate purchase price of $2.0 million. The shares were sold in January 2021 for which the Company recognized net proceeds of $4.5 million..

The public offering of our 8.125% Senior Notes in February 2021, as described in Note ~~13,~~12, was conducted pursuant to an underwriting agreement dated February 10, 2021, between us and B. Riley Securities, Inc., an affiliate of B. Riley, as representative of several underwriters. At the closing date on February 12, 2021, we paid B. Riley Securities, Inc. $5.2 million for underwriting fees and other transaction cost related to the 8.125% Senior Notes offering.

The public offering of our common stock, as described in Note 14, was conducted pursuant to ~~the Underwriting Agreement~~an underwriting agreement dated February 9, 2021, between us and B. Riley Securities, Inc., as representative of the several underwriters. Also on February 12, 2021, we paid B. Riley Securities, Inc. $9.5 million for underwriting fees and other transaction costs related to the offering.

On February 12, 2021, the Company and B. Riley entered into the Exchange Agreement pursuant to which we agreed to issue to B. Riley $35.0 million aggregate principal amount of 8.125% Senior Notes in exchange for a deemed prepayment of $35.0 million of our existing Tranche A term loan with B. Riley Financial in the Exchange, as described in Note 1312.

On March 31, 2021, we entered into a sales agreement with B. Riley Securities, Inc., a related party, in which we may sell, from time to time, up to an aggregated principal amount of $150.0 million of 8.125% ~~senior~~ Senior N~~notes~~otes due 2026 to or through B. Riley Securities, Inc., as described in Note 12. As of March 31, 2022, we paid B. Riley Securities, Inc. $0.6 million for underwriting fees and other transaction costs related to the offering of which $0.1 million has been paid for the three months ended March 31, 2022.

The public offering of our 7.75% Series A Cumulative Perpetual Preferred Stock, as described in Note 13, was conducted pursuant to an underwriting agreement dated May 4, 2021, between us and B. Riley Securities, Inc., as representative of several underwriters. At the closing date on May 2021, we paid B. Riley Securities, Inc. $4.3 million for underwriting fees and other transaction cost related to the Preferred Stock offering.

On May 26, 2021, we completed the additional sale of 444,700 shares of our Preferred Stock, related to the grant to the underwriters, as described in Note 13, and paid B. Riley Securities, Inc. $0.4 million for underwriting fees in conjunction with the transaction.

On June 1, 2021, we issued 2,916,880 shares of the Company’s 7.75% Series A Cumulative Perpetual Preferred Stock and paid $0.4 million in cash due to B. Riley, a related party, in exchange for a deemed prepayment of $73.3 million of our then existing Last Out Term Loans and paid $0.9 million in cash for accrued interest, as described in Note 13.

On June 30, 2021, we entered into new Debt Facilities, as described in Note 12. In connection with the Company’s entry into the Debt Facilities, B. Riley Financial, Inc., an affiliate of B. Riley, has provided a guaranty of payment with regard to the Company’s obligations under the Reimbursement Agreement, as describe in Note 12. Under a fee letter with B. Riley, the Company shall pay B. Riley $0.9 million per annum in connection with the B. Riley Guaranty.

On July 7, 2021, we entered into a sales agreement with B. Riley Securities, Inc., a related party, in which we may sell, from time to time, up to an aggregated principal amount of $76.0 million of Preferred Stock to or through B. Riley Securities, Inc., as described in Note 13.As of March 31, 2022, we paid B. Riley Securities, Inc. $0.2 million for underwriting fees and other transaction costs related to the offering.

The public offering of our 6.50% Senior Notes in December 2021, as described in Note 12, was conducted pursuant to an underwriting agreement dated December 8, 2021, between us and B. Riley Securities, Inc., an affiliate of B. Riley, as representative of several underwriters. At the closing date on December 13, 2021, we paid B. Riley Securities, Inc. $5.5 million for underwriting fees and other transaction cost related to the 6.50% Senior Notes offering.

On December 17, 2021, B. Riley Financial, Inc. entered into a General Agreement of Indemnity (the "Indemnity Agreement"), between us and AXA-XL and or its affiliated associated and subsidiary companies (collectively the “Surety”). Pursuant to the terms of the Indemnity Agreement, B. Riley will indemnify the Surety for losses the Surety may incur as a result of providing a payment and performance bond in an aggregate amount not to exceed €30.0 million in connection with our proposed performance on a specified project. In consideration of B. Riley's execution of the Indemnity Agreement, we paid B. Riley a fee of $1.7 million following the issuance of the bond by the Surety, which represents approximately 5.0% of the bonded obligations, to be amortized over the term of the agreement.

On December 28, 2021, we received a notice that the underwriters of the 6.50% Senior Notes had elected to exercise their overallotment option for an additional $11.4 million in aggregate principal amount of the Senior Notes. At the closing date on December 30, 2021, we paid B. Riley Securities, Inc. $0.5 million for underwriting fees and other transaction cost related to the 6.50% Senior Notes overallotment.

NOTE 21 – ACQUISITIONS AND DIVESTITURES

Acquisitions

Fosler Construction

On September 30, 2021, we acquired a 60% controlling ownership stake in Illinois-based solar energy contractor Fosler Construction Company Inc. (“Fosler Construction”). Fosler Construction provides commercial, industrial and utility-scale solar services and owns 2 community solar projects in Illinois that are being developed under the Illinois Solar for All program. Fosler Construction was founded in 1998 with a track record of successfully completing solar projects profitably with union labor while aligning its model with a growing number of renewable project incentives in the U.S. We believe Fosler Construction is positioned to capitalize on the high-growth solar market in the U.S. and that the acquisition aligns with B&W’s aggressive growth and expansion of our clean and renewable energy businesses. Fosler Construction is reported as part of our B&W Renewable segment, and operates under the name Fosler Solar, a Babcock and Wilcox company.

The total fair value of consideration for the acquisition is $36.0 million, including $27.2 million in cash plus $8.8 million in estimated fair value of the contingent consideration arrangement. In connection with the acquisition, the Company agreed to pay contingent consideration based on the achievement of targeted revenue thresholds for the year ended December 31, 2022. The range of undiscounted amounts the Company could be required to pay under the contingent consideration arrangement is between $0.0 million and $10.0 million.

~~Refer~~We estimated fair values primarily using the discounted cash flow method at September 30, 2021 for the preliminary allocation of consideration to ~~Note 25 for additional related party transactions with B. Riley~~the assets acquired and ~~its affiliates regarding~~liabilities assumed. During the measurement period, we will continue to obtain information to assist in finalizing the fair value of assets acquired and liabilities assumed, which may differ materially from these preliminary estimates. Any subsequent ~~events~~changes in ~~conjunction with~~ the ~~public offering~~fair values of the ~~7.75% Series A Cumulative Perpetual Preferred Stock between~~assets acquired and liabilities assumed during the ~~Company and B. Riley Securities, Inc., as representative of the several underwriters.~~measurement period may result in adjustments to goodwill.

~~Transactions with Vintage Capital Management, LLC~~As of March 31, 2022, we recorded an increase in goodwill of $14.9 million resulting from the initial recognition of $14.5 million of accrued liabilities and $0.4 million of warranty accruals during this acquisition's annual measurement period, as described in Note 4.

VODA

On ~~March 26,~~November 30, 2021, ~~Vintage~~we acquired 100% ownership of VODA A/S (“VODA”) through our wholly-owned subsidiary, B&W PGG Luxembourg Finance SARL, for approximately $32.9 million. VODA is a Denmark-based multi-brand aftermarket parts and ~~B. Riley completed a transaction pursuant to which B. Riley agreed to purchase from Vintage,~~services provider, focusing on energy-producing incineration plants including waste-to-energy, biomass-to-energy or other fuels, providing service, engineering services, spare parts as well as general outage support and ~~Vintage agreed to sell to B. Riley, all 10,720,785 shares~~management. VODA has extensive experience in incineration technology, boiler and pressure parts, SRO, automation, and performance optimization. VODA is reported as part of our ~~common stock owned by Vintage.~~B&W Renewable segment and is included in the B&W Renewable Services product line.

~~Based on its Schedule 13D filings, Vintage beneficially owns 0%~~We estimated fair values primarily using the discounted cash flow method at November 30, 2021 for the preliminary allocation of ~~our outstanding common stock as~~consideration to the assets acquired and liabilities assumed. During the measurement period, we will continue to obtain information to assist in finalizing the fair value of ~~March 31, 2021.~~

assets acquired and liabilities assumed, which may differ materially from these preliminary estimates. Any subsequent changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill.

~~NOTE 23 – ASSETS HELD FOR SALE, DIVESTITURES AND DISCONTINUED OPERATIONS~~Fossil Power Systems

~~Assets Held~~On February 1, 2022, we acquired 100% ownership of Fossil Power Systems, Inc. (“FPS”) for ~~Sale~~approximately $59.1 million, excluding working capital adjustments. The consideration paid for FPS included a hold-back of $5.9 million, payable twelve months from the date of the acquisition if certain conditions of the purchase agreement are met an is recorded on our Condensed Consolidated Balance Sheets in restricted cash and cash equivalents and other accrued liabilities.

FPS is a leading designer and manufacturer of hydrogen, natural gas and renewable pulp and paper combustion equipment including ignitors, plant controls and safety systems based in Dartmouth, Nova Scotia, Canada and is reported as part of our B&W Thermal segment.

We estimated fair values primarily using the discounted cash flow method at February 1, 2022 for the preliminary allocation of consideration to the assets acquired and liabilities assumed. During the measurement period, we will continue to obtain information to assist in finalizing the fair value of assets acquired and liabilities assumed, which may differ materially from these preliminary estimates. Any subsequent changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill.

Optimus Industries

On February 28, 2022, we acquired 100% ownership of Optimus Industries, LLC ("Optimus Industries") for approximately $19.0 million, excluding working capital adjustments. Optimus Industries designs and manufactures waste heat recovery products for use in power generation, petrochemical, and process industries, including package boilers, watertube and firetube waste heat boilers, economizers, superheaters, waste heat recovery equipment and units for sulfuric acid plants and is based in Tulsa, Oklahoma and Chanute, Kansas. Optimus Industries is reported as part of our B&W Thermal segment.

The fair values for the Optimus Industries acquisition have not been completed as of the filing date of this Quarterly report.

We will estimate fair values primarily using the discounted cash flow method at February 28, 2022 for the preliminary allocation of consideration to the assets acquired and liabilities assumed. During the measurement period, we will obtain information to assist in finalizing the fair value of assets acquired and liabilities assumed, which may differ materially from these preliminary estimates. Any subsequent changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill.

Purchase Price Allocations

The provisional measurements noted in the tables below are preliminary and subject to modification in the future. The preliminary purchase price allocation to assets acquired and liabilities assumed in the acquisitions were:


	Fosler Construction
(in thousands)	Initial Allocation of Consideration		Measurement Period Adjustments		Updated Preliminary Allocation

Accounts receivable	$	1,904	$	121	$	2,025
Contracts in progress	1,363		9,433		10,796
Other current assets	1,137		(304)		833
Property, plant and equipment	9,527		(7,860)		1,667
Goodwill(1) (4)	43,230		19,912		63,142
Other assets	17,497		(4,600)		12,897
Right of use assets	1,093		—		1,093
Debt	(7,625)		—		(7,625)
Current liabilities (4)	(5,073)		(15,829)		(20,902)
Advance billings on contracts	(1,557)		238		(1,319)
Non-current lease liabilities	(1,730)		—		(1,730)
Other non-current liabilities	(4,112)		3,218		(894)
Non-controlling interest(2)	(22,262)		(1,734)		(23,996)
Net acquisition cost	$	33,392	$	2,595	$	35,987

(1) Goodwill is calculated as the excess of the purchase price over the net assets acquired. With respect to the Fosler Construction acquisition, goodwill represents Fosler's ability to significantly expand EPC and O&M services among new customers across the U.S. by leveraging B&W's access to capital and geographic reach.

(2) The fair value of the non-controlling interest was derived based on the fair value of the 60% controlling interest acquired by B&W. The transaction price paid by B&W reflects a Level 2 input involving an observable transaction involving an ownership interest in Fosler Construction. Also, as described above, a portion of the purchase consideration relates to the contingent consideration.

(3) Our preliminary purchase price allocation changed due to additional information and further analysis.

(4) Our preliminary goodwill and current liabilities adjustments increased $14.5 million due to additional accrued liabilities recognized attributable to the Fosler projects described in Note 4.


	VODA
(in thousands)	Initial Allocation of Consideration		Measurement Period Adjustments		Updated Preliminary Allocation
Cash	$	4,737	$	—	$	4,737
Accounts receivable	5,654		—		5,654
Contracts in progress	258		—		258
Other current assets	825		—		825
Property, plant and equipment	253		—		253
Goodwill(1)	17,176		(61)		17,115
Other assets	14,321		—		14,321
Right of use assets	433		—		433
Current liabilities	(5,181)		—		(5,181)
Advance billings on contracts	(2,036)		—		(2,036)
Non-current lease liabilities	(302)		—		(302)
Other non-current liabilities	(3,264)		—		(3,264)
Net acquisition cost	$	32,874	$	(61)	$	32,813

(1) Goodwill is calculated as the excess of the purchase price over the net assets acquired. With respect to the VODA acquisition, goodwill represents VODA's ability to significantly expand within the aftermarket parts and services industries by leveraging B&W's access to capital and existing platform within the renewable service market. Goodwill is not expected to be deductible for U.S federal income tax purposes.

(2)Our preliminary purchase price allocation changed due to additional information and further analysis.


	Purchase Price Allocation at March 31, 2022
(in thousands)	Fossil Power Systems		Optimus Industries(2)
Cash	$	1,869	$	5,338
Accounts receivable	2,624		5,165
Contracts in progress	370		2,598
Other current assets	3,228		2,115
Property, plant and equipment	178		2,441
Goodwill(1)	35,392		11,081
Other assets	25,092		12
Right of use assets	1,115		94
Current liabilities	(1,792)		(4,240)
Advance billings on contracts	(645)		(3,779)
Non-current lease liabilities	(989)		(2)
Other non-current liabilities	(7,384)		(1,858)
Net acquisition cost	$	59,058	$	18,965

(1) Goodwill is calculated as the excess of the purchase price over the net assets acquired. With respect to the FPS acquisition, goodwill represents FPS's ability to significantly expand services among new customers by leveraging cross-selling opportunities and recognizing general cost synergies.

(2)With respect to Optimus Industries, the fair value analysis has not been completed. We will update the purchase price allocations after the fair value analysis has been completed.

Intangible assets are included in other assets above and consists of the following:


	Fosler Construction			VODA
(in thousands)	Estimated Acquisition Date Fair Value		Weighted Average Estimated Useful Life	Estimated Acquisition Date Fair Value		Weighted Average Estimated Useful Life
Customer Relationships	$	9,400	12 years	$	13,855	11 years
Tradename	—		—	228		3 years
Backlog	3,100		5 months	—		—
Total intangible assets(1)	$	12,500		$	14,083

	Fossil Power Systems
	Estimated Acquisition Date Fair Value		Weighted Average Estimated Useful Life
Customer Relationships	$	20,451	9 years
Tradename	787		14 years
Patented Technology	578		12 years
Unpatented Technology	3,276		12 years
Total intangible assets(1)	$	25,092

(1) Intangible assets were valued using the income approach, which includes significant assumptions around future revenue growth, profitability, discount rates and customer attrition. Such assumptions are classified as level 3 inputs within the fair value hierarchy.

Costs related to our acquisitions of Fosler, VODA, Fossil Power Systems, and Optimus Industries, which were recorded as a component of our operating expenses in our Condensed Consolidated Statements of Operations, consists of the following:


	For the Three Months Ended
(in thousands)	March 31, 2022
Fosler Construction	$	195
VODA	140
FPS	31
Optimus Industries	69
Total	$	435

Divestitures

Certain ~~fixed~~real property assets for the Copley, Ohio location were sold on March 15, 2021 for $4.0 million. We received $3.3 million of net proceeds after adjustments and recognized a gain on sale of $1.9 million. In conjunction with the sale, we executed a leaseback agreement commencing March 16, 2021 ~~and expiring~~which expires on March 31, 2033.

Certain real property assets for the Lancaster, Ohio location were sold on August 13, 2021 for $18.9 million. We received $15.8 million of net proceeds after adjustments and expenses and recognized a gain on sale of $13.9 million. In ~~December 2019,~~conjunction with the sale, we ~~determined that~~executed a ~~small business within the B&W Thermal segment met the criteria to be classified as held for sale. At December~~leaseback agreement commencing August 13, 2021 which expires on August 31, ~~2020, the carrying value of the net assets planned to be sold approximated the estimated fair value less costs to sell. Refer to~~ ~~Divestitures below as this sale closed March 5, 2021.~~

~~The following table summarizes the carrying value of the assets and liabilities held for sale at March 31, 2021 and December 31, 2020:~~

(in thousands) March 31, 2021 December 31, 2020
Accounts receivable – trade, net $ 0 $ 2,103
Accounts receivable – other 0 86
Contracts in progress 0 458
Inventories 0 1,676
Other current assets 0 405
     Current assets held for sale 0 4,728
Net property, plant and equipment 1,870 10,365
Intangible assets 0 759
Right-of-use-asset 0 32
     Non-current assets held for sale 1,870 11,156
Total assets held for sale $ 1,870 $ 15,884
Accounts payable $ 0 $ 5,211
Accrued employee benefits 0 178
Advance billings on contracts 0 370
Accrued warranty expense 0 466
Operating lease liabilities 0 32
Other accrued liabilities 0 2,048
     Current liabilities held for sale 0 8,305
Total liabilities held for sale $ 0 $ 8,305

~~Divestitures~~2041.

Effective March 5, 2021, we sold all of the issued and outstanding capital stock of Diamond Power Machine (Hubei) Co., Inc, ~~to BPE Clyde Pte Ltd.~~ for $2.8 million. We received $2.0 million in gross proceeds before expenses and recorded an $0.8 million favorable contract asset for the amortization period from March 8, 2021 through December 31, 2023. WeFor the twelve months ended December 31, 2021, we recognized a ~~$0.4~~$1.8 million pre-tax ~~gain,~~loss, inclusive of the recognition of $4.5 million of ~~CTA,~~currency translation adjustment, on the sale of the business and after consideration of certain working capital adjustments that are in ~~the three months ended March 31, 2021.~~

~~On March 17, 2020, we fully settled the remaining escrow associated with the sale of PBRRC and received $4.5 million in cash.~~

~~Discontinued Operations~~

~~On April 6, 2020, we fully settled the remaining escrow associated with the sale of the MEGTEC and Universal businesses and received $3.5 million in cash.~~dispute. Additional adjustments may be necessary as this is finalized.

NOTE 2422 – NEW ACCOUNTING STANDARDS

We adopted the following accounting standard during the first quarter of ~~2021:~~

~~In December 2019, the FASB issued ASU 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.~~ The amendments in this update simplify the accounting for income taxes by removing exceptions related to the incremental approach for intra-period tax allocation, certain deferred tax liabilities, and the general methodology for calculating income taxes in an interim period. The amendment also provides simplification related to accounting for franchise (or similar) tax, evaluating the tax basis step up of goodwill, allocation of consolidated current and deferred tax expense, reflection of the impact of enacted tax law or rate changes in annual effective tax rate calculations in the interim period that includes enactment date, and other minor codification improvements. The impact of this standard on our condensed consolidated financial statements was immaterial.

~~New accounting standards not yet adopted that could affect our Condensed Consolidated Financial Statements in the future are summarized as follows:~~

~~In March 2021, the FASB issued ASU 2021-01,~~ ~~Reference Rate Reform (Topic 848): Scope.~~ The amendments in this update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. This update is an amendment to ASU 2020-04, ~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform of Financial Reporting,~~ which was issued in March 2020 and provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in the updates apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the updates do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in both updates are effective for all entities upon issuance and may be adopted any date on or after March 12, 2020 up to December 31, 2022. We are currently evaluating the impact of the standards on our condensed consolidated financial statements.2022:

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40). The amendments in this update simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity by removing major separation models required under current U.S. GAAP. The amendments also improve the consistency of diluted earnings per share calculations. The ~~amendments~~impact of this standard on our Condensed Consolidated Financial Statements was immaterial.

New accounting standards not yet adopted that could affect our Condensed Consolidated Financial Statements in the future are summarized as follows:

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendment in this update ~~are~~provides an exception to fair value measurement for contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination. As a result, contract assets and contract liabilities will be recognized and measured by the acquirer in accordance with ASC 606, Revenue from Contracts with Customers. The amendment also improves consistency in revenue recognition in the post-acquisition period for acquired contracts as compared to contracts entered into after the business combination. The amendment in this update is effective for public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Forin January 2023; all other entities have an additional year to adopt. Early adoption is permitted; however, if the ~~amendments are~~new guidance is adopted in an interim period, it is required to be applied retrospectively to all business combinations within the year of adoption. This amendment is effective for fiscal years beginning after December 15, ~~2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020,~~2022, including interim periods within those fiscal years. We are currently evaluating the impact of the standard on our condensed consolidated financial statements.

In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326: Financial Instruments - Credit Losses. This update is an amendment to the new credit losses standard, ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, that was issued in June 2016 and clarifies that operating lease receivables are not within the scope of Topic 326. The new credit losses standard changes the accounting for credit losses for certain instruments. The new measurement approach is based on expected losses, commonly referred to as the current expected credit loss ~~(CECL)~~("CECL") model, and applies to financial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investment in leases, and reinsurance and trade receivables, as well as certain off-balance sheet credit exposures, such as loan commitments. The standard also changes the impairment model for available-for-sale debt securities. The provisions of this standard will primarily impact the allowance for doubtful accounts on our trade receivables, contracts in progress, and potentially our impairment model for available-for-sale debt securities (to the extent we have any upon adoption). For public, smaller reporting companies, this standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact of both standards on our ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

~~NOTE 25 – SUBSEQUENT EVENTS~~

~~2021 Preferred Stock Offerings~~

On May 7, 2021, we completed a public offering of our 7.75% Series A Cumulative Perpetual Preferred Stock (the "Preferred Stock") pursuant to an underwriting agreement (the “Underwriting Agreement”) dated May 4, 2021, between us and B. Riley Securities, Inc., as representative of the several underwriters (the “Underwriters”). At the closing, we issued to the public 4,000,000 shares of our Preferred Stock, at an offering price of $25.00 per share for gross proceeds of approximately $100.0 million before deducting underwriting discounts, commissions and estimated offering expenses. We have granted the underwriters a 30-day option to purchase up to an additional 600,000 shares of the Preferred Stock in connection with the offering. Net proceeds from the offering were approximately $95.7 million after deducting underwriting discounts, commissions but before expenses. The Preferred Stock has a par value of $0.01 per share and is perpetual and has no maturity date. The Preferred Stock has a cumulative cash dividend, when and as if declared by our Board of Directors, at a rate of 7.75% per year on the liquidation preference amount of $25.00 per share and payable quarterly in arrears.

The Preferred Stock will, as to dividend rights and rights as to the distribution of assets upon our liquidation, dissolution or winding-up, rank: (1) senior to all classes or series of our common stock and to all other capital stock issued by us expressly designated as ranking junior to the Preferred Stock; (2) on parity with any future class or series of our capital stock expressly designated as ranking on parity with the Preferred Stock; (3) junior to any future class or series of our capital stock expressly designated as ranking senior to the Preferred Stock; and (4) junior to all our existing and future indebtedness.

The Preferred Stock has no stated maturity and is not subject to mandatory redemption or any sinking fund. We will pay cumulative cash dividends on the Preferred Stock when, as and if declared by our Board of Directors (or a duly authorized committee of our Board of Directors), only out of funds legally available for payment of dividends. Dividends on the Preferred Stock will accrue on the stated amount of $25.00 per share of the Preferred Stock at a rate per annum equal to 7.75% (equivalent to $1.9375 per year), payable quarterly in arrears. Dividends on the Series A Preferred Stock declared by our board of directors (or a duly authorized committee of our board of directors) will be payable quarterly in arrears on March 31, June 30, September 30 and December 31, beginning on June 30, 2021.

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

~~The Preferred Stock is expected to begin trading on the NYSE under the symbol “BW PRA” within 30 business days of the closing date.~~

~~Revolving Debt - A&R Credit Agreement~~

On May 10, 2021, we entered into Amendment No. 5 to Amended and Restated Credit Agreement with Bank of America, N.A., in its capacity as administrative agent (“A&R Amendment No. 5”). A&R Amendment No. 5 amends the terms of our A&R Credit Agreement to, among other matters, (i) permit the payment of dividends on the Preferred Stock and (ii) permit certain future issuances of Preferred Stock to B. Riley, a related party, in exchange for deemed prepayments of amounts outstanding under our A&R Credit Agreement.

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

~~*****~~You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included in Financial Statements under Item 1 within this Quarterly Report. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. See Cautionary Statement Concerning Forward-Looking Information *****Information.

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 are based on management’s current expectations and involve a number of risks and uncertainties, including, among other things, the impact of COVID-19 on us and the capital markets and global economic climate generally; our recognition of any asset impairments as a result of any decline in the value of our assets or our efforts to dispose of any assets in the future; 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 comply with the requirements of, and to service the indebtedness under, our A&R Credit Agreement; the highly competitive nature of our businesses and our ability to win work, including identified project opportunities in our pipeline; general economic and business conditions, including changes in interest rates and currency exchange rates; 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 successfully resolve claims by vendors for goods and services provided and claims by customers for items under warranty; our ability to realize anticipated savings and operational benefits from our restructuring plans, and other cost-savings initiatives; our ability to successfully address productivity and schedule issues in our B&W Renewable, B&W Environmental and B&W Thermal segments, including the ability to complete our B&W Renewable's European EPC projects and B&W Environmental's U.S. loss projects within the expected time frame and the estimated costs; our ability to successfully partner with third parties to win and execute contracts within our B&W Environmental, B&W Renewable and B&W Thermal segments; changes in our effective tax rate and tax positions, including any limitation on our ability to use our net operating loss carryforwards and other tax assets; 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; difficulties we may encounter in obtaining regulatory or other necessary permits or approvals; changes in actuarial assumptions and market fluctuations that affect our net pension liabilities and income; our ability to successfully compete with current and future competitors; our ability to negotiate and maintain good relationships with labor unions; changes in pension and medical expenses associated with our retirement benefit programs; social, political, competitive and economic situations in foreign countries where we do business or seek new business; and the other factors specified and set forth under "Risk Factors" in our periodic reports filed with the Securities and Exchange Commission, including our most recent annual report on Form 10-K.

BUSINESS OVERVIEW ~~OF RESULTS~~

B&W is a growing, globally-focused renewable, environmental and thermal technologies provider with ~~decades~~over 150 years of experience providing diversified energy and emissions control solutions to a broad range of industrial, electrical utility, municipal and other customers. B&W’s innovative products and services are organized into three market-facing ~~segments:~~segments. Our reportable segments are as follows:

industry. B&W’s leading technologies support a circular economy, diverting waste from landfills to use for power generation and replacing fossil fuels, while recovering metals and reducing emissions.

•Babcock & Wilcox Environmental: A full suite of best-in-class emissions control and environmental technology solutions for utility, waste to energy, biomass, carbon black, and industrial steam generation applications around the world. B&W’s broad experience includes systems for cooling, ash handling, particulate control, nitrogen oxides and sulfur dioxides removal, chemical looping for carbon control, and mercury control.

On February 1, 2022, we acquired 100% ownership of Fossil Power Systems, Inc. for approximately $59.1 million, excluding working capital adjustments. Fossil Power Systems, Inc., is a leading designer and manufacturer of hydrogen, natural gas and

renewable pulp and paper combustion equipment including ignitors, plant controls and safety systems based in Dartmouth, Nova Scotia, Canada. Fossil Power Systems, Inc. is reported as part of our B&W Thermal segment.

On February 28, 2022, we acquired 100% ownership of Optimus Industries, LLC for approximately $19.0 million, excluding working capital adjustments. Optimus Industries, LLC designs and manufactures waste heat recovery products for use in power generation, petrochemical, and process industries, including package boilers, watertube and firetube waste heat boilers, economizers, superheaters, waste heat recovery equipment and units for sulfuric acid plants and is based in Tulsa, Oklahoma and Chanute, Kansas. Optimus Industries, LLC is reported as part of our B&W Thermal segment.

Our business depends significantly on the capital, operations and maintenance expenditures of global electric power generating companies, including renewable and thermal powered heat generation industries and industrial facilities with environmental compliance policy requirements. Several factors may influence these expenditures, including:

•climate change initiatives promoting environmental policies which include renewable energy options utilizing waste-to-energy or biomass to meet legislative requirements and clean energy portfolio standards in the United States, European, Middle East and Asian markets;

•requirements for environmental improvements in various global markets;

•expectation of future governmental requirements to further limit or reduce greenhouse gas and other emissions in the United States, Europe and other international climate change sensitive countries;

•prices for electricity, along with the cost of production and distribution including the cost of fuels within the United States, Europe, Middle East and Asian based countries;

•demand for electricity and other end products of steam-generating facilities;

•level of capacity utilization at operating power plants and other industrial uses of steam production;

•requirements for maintenance and upkeep at operating power plants to combat the accumulated effects of usage;

•prices of and access to materials, particularly as a result of rising inflation and the impact of the Russian invasion of Ukraine;

•overall strength of the industrial industry; and

•ability of electric power generating companies and other steam users to raise capital.

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

~~We recorded operating loss of $6.5 million in the first quarter of 2021 as compared to operating loss of $10.3 million in~~ ~~the first quarter of 2020 and we showed improved results in all three segments as described below.~~

Adjusted EBITDA in the B&W Renewable segment was $0.2 million and $(1.4) million in the first quarter of 2021 and 2020, respectively. The increase was primarily due to favorable product mix in our parts business and the benefits of cost savings and restructuring initiatives being partially offset by lower revenue in the current quarter.

The B&W Environmental segment generated adjusted EBITDA of $1.1 million and $0.3 million in the first quarter of 2021 and 2020, respectively. The increase is primarily attributable to higher volume in the current quarter and the benefits of cost savings and restructuring initiatives being partially offset by unfavorable mix in our parts business.

Our B&W Thermal segment generated adjusted EBITDA of $10.4 million and $7.6 million in the first quarter of 2021 and 2020, respectively. This increase is primarily attributable to a higher level of activity on construction projects, favorable project execution and the benefits of cost savings and restructuring initiatives.

We have manufacturing facilities in Mexico, the United States, Denmark, Scotland and China. Many aspects of our operations and properties could be affected by political developments, including the ongoing Russian-Ukrainian conflict, environmental regulations and operating risks. These and other factors may have a material impact on our international and domestic operations or our business as a whole.

Through our restructuring efforts, we continue to make significant progress to make our cost structure more variable and to reduce costs. We expect our ~~cost-savings~~cost saving measures to continue to translate to bottom-line results, with top-line growth driven by opportunities for our core technologies and support services across the B&W Renewable, B&W Environmental and B&W Thermal segments globally.

We ~~have identified additional initiatives that are underway as of the date of this filing that are expected to further reduce costs, and we~~ expect to continue to explore other cost saving initiatives to improve cash generation and evaluate additional non-core asset sales to continue to strengthen our liquidity. 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.

~~Year-over-year comparisons of our results from continuing operations were also impacted by:~~

•~~$1.0 million and $2.0 million of restructuring costs were recognized in the first quarter of 2021 and 2020, respectively. The restructuring costs primarily related to severance.~~

•$0.9 million and $0.9 million of financial advisory service fees were recorded in the first quarter of 2021 and 2020, respectively. These services are required under our U.S. Revolving Credit Facility. Financial advisory service fees are included in ~~advisory fees and settlement costs~~ ~~in the Condensed Consolidated Statement of Operations.~~

•$2.0 million and $2.6 million of legal and other advisory fees were recognized in the first quarter of 2021 and 2020, respectively. These fees are related to the contract settlement and liquidity planning and are included in ~~advisory fees and settlement costs~~ ~~in the Condensed Consolidated Statement of Operations.~~

In addition, ~~to the discussions described above,~~ we continue to evaluate further dispositions, opportunities for additional cost savings and opportunities for ~~insurance~~subcontractor recoveries and other claims where appropriate and available. If the value of our business was to decline, or if we were to determine that we were unable to recognize an amount in connection with any proposed disposition in excess of the carrying value of any disposed asset, we may be required to recognize impairments for one or more of our assets that may adversely impact our business, financial condition and results of operations.

RESULTS OF OPERATIONS

Components of Our Results of Operations

Revenue

Our revenue is the total amount of income generated by our business and consists primarily of income from our renewable, environmental and thermal technology solutions that we provide to a broad range of industrial electric utility and other customers. Revenue from our operations is assessed based on our three market-facing segments, Babcock & Wilcox Renewable, Babcock & Wilcox Environmental and Babcock & Wilcox Thermal.

Operating Income (Loss)

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

Net Income (Loss)

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

Condensed Consolidated Results of Operations

The presentation of the components of our adjusted EBITDA in the table below is consistent with the way our chief operating decision maker reviews the results of our operations and makes strategic decisions about our business. Items such as gains or losses on asset sales, MTM pension adjustments, restructuring costs, impairments, losses on debt extinguishment, costs related to financial consulting required under our U.S. Revolving Credit Facility, research and development costs and other costs that may not be directly controllable by segment management are not allocated to the segments.

Three months ended March 31,
(in thousands) 2021 2020 $ Change
Revenues:
B&W Renewable segment $ 28,811 $ 35,999 $ (7,188)
B&W Environmental segment 31,160 25,920 5,240
B&W Thermal segment 108,281 86,683 21,598
Other (4) (48) 44
$ 168,248 $ 148,554 $ 19,694

Three months ended March 31,
(in thousands) 2021 2020 $ Change
Adjusted EBITDA (1)
B&W Renewable segment $ 204 $ (1,434) $ 1,638
B&W Environmental segment 1,101 270 831
B&W Thermal segment 10,430 7,606 2,824
Corporate (2,685) (4,143) 1,458
Research and development costs (588) (1,341) 753
$ 8,462 $ 958 $ 7,504

~~(1)~~ Adjusted EBITDA for the three months ended March 31, 2020, excludes losses related to a non-strategic business and interest on letters of credit included in cost of operations that were previously included in Adjusted EBITDA and total $(0.1) million and $(0.2) million, respectively.

~~Three Months Ended March 31, 2021 and 2020~~

~~Revenues increased by$19.7 million~~to $168.2 million in the first quarter of 2021 as compared to $148.6 million in the first quarter of 2020 primarily due to a higher level of construction project activity in the current quarter. Revenues for each of our segments have been adversely impacted by COVID-19 including the postponement and delay of several projects. In addition revenue was impacted by segment specific changes which are discussed in further detail in the sections below.

Operating losses improved $3.8 million to $(6.5) million in the first quarter of 2021 compared to $(10.3) million in the first quarter of 2020. The increase is primarily due to the higher construction volume as described above, improved project execution and the benefits of costs savings and restructuring initiatives. Restructuring expenses, advisory fees, amortization expense, gains (losses) on dispositions of equity method investees, and impairments are discussed in further detail in the sections below.

~~Non-GAAP Financial Measures~~

The following discussion of our business segment results of operations includes a discussion of adjusted ~~gross profit,~~EBITDA, which when used on a consolidated basis is a non-GAAP financial measure. Adjusted ~~gross profit~~EBITDA differs from the most directly comparable measure calculated in accordance with generally accepted accounting principles ("~~GAAP~~"(“GAAP”). ~~Amortization expense is not allocated to the segments’ adjusted gross profit.~~ A reconciliation of ~~operating~~net income (loss), the most directly comparable GAAP measure, to adjusted ~~gross profit~~EBITDA is included in ~~the table~~“Non-GAAP Financial Measures” below. Management believes that this financial measure is useful to investors because it excludes certain expenses, allowing investors to more easily compare our financial performance period to period.

Three months ended March 31,
(in thousands) 2021 2020 $ Change
Adjusted gross profit (1)(2)
Operating loss $ (6,462) $ (10,298) $ 3,836
Selling, general and administrative ("SG&A") expenses 40,391 37,532 2,859
Advisory fees and settlement costs 3,291 4,239 (948)
Amortization expense 1,385 1,410 (25)
Restructuring activities 993 1,951 (958)
Research and development costs 588 1,341 (753)
(Gain) loss from a non-strategic business (12) 121 (133)
Gains on asset disposals, net (2,004) (915) (1,089)
$ 38,170 $ 35,381 $ 2,789


	Three Months Ended March 31,
(in thousands)		2022		2021
Revenues:
B&W Renewable segment		$	67,961	$	28,811
B&W Environmental segment		34,948		31,160
B&W Thermal segment		102,239		108,281
Eliminations		(1,099)		(4)
		$	204,049	$	168,248


	Three Months Ended March 31,
(in thousands)		2022		2021
Adjusted EBITDA
B&W Renewable segment		$	1,455	$	204
B&W Environmental segment		1,439		1,105
B&W Thermal segment		14,154		10,535
Corporate		(4,373)		(2,685)
Research and development costs		(655)		(588)
		$	12,020	$	8,571

~~(1)~~ ~~Amortization is not allocated to the segments' adjusted gross profit, but depreciation is allocated to the segments' adjusted gross profit.~~

~~(2)~~

Three Months Ended March 31, 2022 and 2021

Revenues increased by ~~Adjusted gross profit for~~$35.8 millionto $204.0 million in the three months ended March 31, ~~2020, excludes losses related~~2022 as compared to ~~a non-strategic business that was previously included~~$168.2 million in ~~Adjusted gross profit and totals $(0.1) million.~~the three months ended March 31, 2021. The increase is primarily attributable to higher volume driven by new-

~~Adjusted gross profit by segment is as follows:~~

Three months ended March 31,
(in thousands) 2021 2020 $ Change
Adjusted gross profit (loss)
B&W Renewable segment $ 6,900 $ 6,921 $ (21)
B&W Environmental segment 5,942 5,299 643
B&W Thermal segment 25,328 23,161 2,167
$ 38,170 $ 35,381 $ 2,789

~~B&W Renewable Segment Results~~

Three months ended March 31,
(in thousands) 2021 2020 $ Change
Revenues $ 28,811 $ 35,999 $ (7,188)
Adjusted EBITDA $ 204 $ (1,434) $ 1,638
Adjusted gross profit $ 6,900 $ 6,921 $ (21)
Adjusted gross profit (loss) % 23.9 % 19.2 %

~~Three Months Ended March 31, 2021~~build projects and ~~2020~~

~~Revenues in~~ the ~~B&W~~acquisitions of Fosler Construction and VODA within our Renewable segment, ~~decreased 20%, or $7.2 million to $28.8 million in~~ the ~~first quarter~~acquisitions of ~~2021 compared to $36.0 million in the first quarter of 2020. The reduction in revenue is due to project delays~~Fossil Power Systems and ~~a lower level of activity in the current quarter due to COVID-19.~~

Adjusted EBITDA in the B&W Renewable segment increased $1.6 million, to $0.2 million in the first quarter of 2021 compared to $(1.4) million in the first quarter of 2020. The benefits of cost savings and restructuring initiatives and favorable product mix inOptimus Industries within our ~~parts business more than offset the decrease in volume, as discussed above.~~

Adjusted gross profit in the B&W Renewable segment remained flat at $6.9 million due to lower volume as described above which was offset by favorable product mix in our parts business and the benefits of cost savings and restructuring initiatives.

~~B&W Environmental Segment Results~~

Three months ended March 31,
(In thousands) 2021 2020 $ Change
Revenues $ 31,160 $ 25,920 $ 5,240
Adjusted EBITDA $ 1,101 $ 270 $ 831
Adjusted gross profit $ 5,942 $ 5,299 $ 643
Adjusted gross profit % 19.1 % 20.4 %

~~Three Months Ended March 31, 2021 and 2020~~

Revenues in the B&W Environmental segment increased 20%, or $5.2 million to $31.2 million in the first quarter of 2021 compared to $25.9 million in the first quarter of 2020. The increase is primarily due to higher service and project activity in the current quarter.

Adjusted EBITDA in the B&W Environmental segment was $1.1 million in the first quarter of 2021 compared to $0.3 million in the first quarter of 2020. The increase is driven primarily by the higher volume, as described above and the benefits of cost savings and restructuring initiatives partially offset by unfavorable mix in our parts business.

Adjusted gross profit in the B&W Environmental segment increased $0.6 million to $5.9 million in the first quarter of 2021 compared to $5.3 million in the first quarter of 2020. The increase is primarily attributable to the increase in volume being partially offset by unfavorable product mix in our parts business.

~~B&W Thermal Segment Results~~

Three months ended March 31,
(In thousands) 2021 2020 $ Change
Revenues $ 108,281 $ 86,683 $ 21,598
Adjusted EBITDA $ 10,430 $ 7,606 $ 2,824
Adjusted gross profit $ 25,328 $ 23,161 $ 2,167
Adjusted gross profit % 23.4 % 26.7 %

~~Three Months Ended March 31, 2021 and 2020~~

~~Revenues in the B&W~~ Thermal segment, ~~increased 25%, or $21.6 million, to $108.3 million~~ in ~~the first quarter of 2021 compared to $86.7 million generated in the first quarter of 2020. The revenue increase is attributable~~addition to a higher level of volume in our Environmental segment partially offset by a lower level of construction activity in our Thermal segment. The negative impacts on ~~construction projects~~the global economy as a result of the ongoing Russia-Ukraine military conflict adversely impacted each of our segments causing shortages of supplies and materials and affecting the timing of revenue on several projects. Segment specific changes are discussed in further detail in the ~~current quarter.~~sections below.

~~Adjusted EBITDA in the B&W Thermal segment increased $2.8~~Net loss improved by $6.8 million ~~to $10.4~~from a net loss of $15.4 million in the ~~first quarter~~three months ended March 31, 2021 to a net loss of ~~2021 compared to $7.6~~$8.7 million in the ~~first quarter of 2020, which is mainly attributable to the increase in volume as described above, favorable project execution and the benefits of costs savings and restructuring initiatives.~~

~~Adjusted gross profit in the B&W Thermal segment~~three months ended March 31, 2022. Operating loss increased ~~$2.2~~$0.3 million to ~~$25.3~~an operating loss of $6.8 million in the ~~first quarter of 2021,~~three months ended March 31, 2022 as compared to ~~$23.2~~an operating loss of $6.5 million in the ~~first~~three months ended March 31, 2021. The decrease is primarily due to the $1.9 million gain on sale recognized in the prior years quarter related to the sale of ~~2020, which is consistent with~~certain real property assets at the ~~increase in revenue~~Copley, Ohio location as described ~~above being partially offset by unfavorable product mix~~ in ~~our parts business.~~

Note 21 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report. Restructuring expenses, advisory fees, research and development, depreciation and amortization expense, pension and other postretirement benefit plans, foreign exchange, and income taxes are discussed in further detail in the sections below.

Bookings and Backlog

Bookings and backlog are our measure of remaining performance obligations under our sales contracts. It is possible that our methodology for determining bookings and backlog may not be comparable to methods used by other companies.

We generally include expected revenue from contracts in our backlog when we receive written confirmation from our customers authorizing the performance of work and committing the customers to payment for work performed. Backlog may not be indicative of future operating results, and contracts in our backlog may be canceled, modified or otherwise altered by customers. Backlog can vary significantly from period to period, particularly when large new build projects or operations and maintenance contracts are booked because they may be fulfilled over multiple years. ~~Additionally, because~~Because we operate globally, our backlog is also affected by changes in foreign currencies each period. We do not include orders of our unconsolidated joint ventures in backlog.

Bookings represent changes to the backlog. Bookings include additions from booking new business, subtractions from customer cancellations or modifications, changes in estimates of liquidated damages that affect selling price and revaluation of backlog denominated in foreign currency. We believe comparing bookings on a quarterly basis or for periods less than one

year is less meaningful than for longer periods, and that shorter-term changes in bookings may not necessarily indicate a material trend.


		Three months ended March 31,						Three Months Ended March 31,
(In approximate millions)			2021		2020
(in approximate millions)							(in approximate millions)		2022		2021
B&W Renewable(1)	B&W Renewable(1)		$	37	$	34	B&W Renewable(1)		$	101	$	37
B&W Environmental	B&W Environmental		41		45		B&W Environmental		37		41
B&W Thermal	B&W Thermal		91		130		B&W Thermal		101		91
Other/eliminations			—		—

Bookings	Bookings		$	169	$	209	Bookings		$	239	$	169

(1) B&W Renewable bookings includes the revaluation of backlog denominated in currency other than U.S. dollars. The foreign exchange impact on B&W Renewable bookings in the ~~first quarter of~~three months ended March 31, 2022 and 2021 was $6.0 million and ~~2020~~ ~~was~~ $7.0 million, ~~and $(6.9) million, respectively.~~respectively.

(1) B&W Renewable backlog at March 31, ~~2021,~~2022, includes ~~$164.0~~$153.2 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.

Adjusted EBITDA on a consolidated basis is a non-GAAP metric defined as the sum of the adjusted EBITDA for each of the segments, further adjusted for corporate allocations and research and development costs. At a segment level, the adjusted EBITDA presented below is consistent with the way the Company's chief operating decision maker reviews the results of operations and makes strategic decisions about the business and is calculated as earnings before interest, tax, depreciation and amortization adjusted for items such as gains or losses on asset sales, net pension benefits, restructuring costs, impairments, gains and losses on debt extinguishment, costs related to financial consulting, research and development costs and other costs that may not be directly controllable by segment management and are not allocated to the segment.The Company uses adjusted EBITDA internally to evaluate its performance and in making financial and operational decisions. When viewed in conjunction with GAAP results, the Company believes that its presentation of adjusted EBITDA provides investors with greater transparency and a greater understanding of factors affecting its financial condition and results of operations than GAAP measures alone. Additionally, the Company redefined its definition of adjusted EBITDA to eliminate the effects of certain items including business transition costs. Prior period results have been revised to conform with the revised definition and present separate reconciling items in our reconciliation.


	Three Months Ended March 31,
(in thousands)		2022		2021
Net loss		$	(8,684)	$	(15,443)
Interest expense		12,324		14,509
Income tax expense		1,230		2,836
Depreciation & amortization		6,202		4,058
EBITDA		11,072		5,960

Benefit plans, net		(7,452)		(9,098)
Gain on sales, net		(20)		(2,362)
Stock compensation		1,319		7,829
Restructuring activities and business services transition costs		2,688		993
Advisory fees for settlement costs and liquidity planning		1,032		1,978
Litigation costs		2,528		380
Acquisition pursuit and related costs		843		—
Product development (1)		852		—
Foreign exchange		(3,085)		1,209
Financial advisory services		375		933
Contract step-up purchase price adjustment		1,745		—
Loss from business held for sale		—		483

Other - net		123		266
Adjusted EBITDA		$	12,020	$	8,571

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


	Three Months Ended March 31,
(in thousands)		2022		2021
Adjusted EBITDA
B&W Renewable segment		$	1,455	$	204
B&W Environmental segment		1,439		1,105
B&W Thermal segment		14,154		10,535
Corporate		(4,373)		(2,685)
Research and development costs		(655)		(588)
		$	12,020	$	8,571

B&W Renewable Segment Results

Three Months Ended March 31, 2022 and 2021

Revenues in the B&W Renewable segment increased $39.2 million, to $68.0 million in the three months ended March 31, 2022 compared to $28.8 million in the three months ended March 31, 2021. The increase in revenue is primarily due to the acquisitions of Fosler Construction and VODA and higher volume of new-build projects.

Adjusted EBITDA in the B&W Renewable segment increased $1.3 million, to $1.5 million in the three months ended March 31, 2022 compared to $0.2 million in the three months ended March 31, 2021. The increase is primarily due to the higher volume, as described above offset partially by mix within the segment.

B&W Environmental Segment Results

Three Months Ended March 31, 2022 and 2021

Revenues in the B&W Environmental segment increased 12%, or $3.8 million to $34.9 million in the three months ended March 31, 2022 compared to $31.2 million in the three months ended March 31, 2021. The increase is primarily driven by higher overall volume in ash handling systems, scrubbers, precipitators and cooling systems.

Adjusted EBITDA in the B&W Environmental segment was $1.4 million in the three months ended March 31, 2022 compared to $1.1 million in the three months ended March 31, 2021. The increase is driven primarily by higher volume, as described above.

B&W Thermal Segment Results

Revenues in the B&W Thermal segment decreased 6%, or $6.0 million, to $102.2 million in the three months ended March 31, 2022 compared to $108.3 million in the three months ended March 31, 2021. The revenue decrease is attributable to a lower level of activity on construction projects, partially offset by the acquisitions of Fossil Power Systems and Optimus Industries.

Adjusted EBITDA in the B&W Thermal segment increased $3.6 million to $14.2 million in the three months ended March 31, 2022 compared to $10.5 million in the three months ended March 31, 2021, which is mainly attributable to the acquisitions of Fossil Power Systems and Optimus Industries and continued cost savings and restructuring initiatives benefiting the current year, which more than offset the overall decrease in volume, as described above.

Advisory fees and settlement ~~costs decreased by $0.9~~costs increased $0.6 million to $3.9 million in the three months ended March 31, 2022 as compared to $3.3 million in the ~~first quarter~~corresponding period of ~~2021 as compared~~2021. The increase is primarily related to ~~$4.2 million~~higher legal fees and other costs incurred in the ~~first quarter of 2020, primarily due to reduced use of external consultants in 2021 as the Company staffed certain positions internally.~~current quarter.

Our research and development activities are ~~related to~~focused on improving our products through innovations to reduce ~~the~~their cost ~~of our products to~~and make them more competitive, ~~and through innovations~~as well as to reduce performance risk of our products to better meet our and our ~~customers'~~customers’ expectations. Research and development expenses remained relatively unchanged and totaled $0.7 million and $0.6 million ~~and $1.3 million for~~in the three

months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively. ~~The decrease resulted primarily from timing of specific research and development efforts.~~

Depreciation expense was ~~$2.7~~$2.2 million and ~~$2.8~~$2.7 million in the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

Our pension costs also include ~~MTM~~mark-to-market ("MTM") adjustments from time to time ~~as described further in Note 12 to the Condensed Consolidated Financial Statements. Interim MTM charges~~and are primarily a result of changes in the discount rate, curtailments orand settlements. Any MTM charge or gain should not be considered to be representative of future MTM adjustments as such events are not currently predicted and are in each case subject to market conditions and actuarial assumptions as of the date of the event giving rise to the MTM adjustment. There were no MTM adjustments for our other postretirement benefit plans during the three months ended March 31, 2022 and 2021, respectively.

~~Other than service cost of~~ ~~$0.2 million~~ ~~and $0.2 million in the~~ ~~three months ended~~ ~~March 31, 2021 and 2020, respectively, which are related to the small number of hourly participants still accruing benefits within the Babcock & Wilcox Thermal segment,~~ ~~pension benefit and MTM adjustments are excluded from the results of our segments.~~ Refer to Note 1211 to the Condensed Consolidated Financial Statements for further information regarding our pension and other postretirement plans.

The costs and funding requirements of our pension and postretirement benefit plans depend on our various assumptions, including estimates of rates of return on benefit-related assets, discount rates for future payment obligations, rates of future cost growth, mortality assumptions and trends for future costs. Variances from these estimates could have a material adverse effect on us. Our policy to recognize these variances annually through MTM accounting could result in volatility in our results of operations, which could be material. The funding obligations for the Company’s pension plans are impacted by the performance of the financial markets, particularly the equity markets, and interest rates. If the financial markets do not provide the long-term returns that are expected, or discount rates increase the present value of liabilities, the Company could be required to make larger contributions.

Our income tax expense in the first quarter of ~~2021~~2022 reflects a full valuation allowance against our net deferred tax assets, except in Mexico, Canada, the United Kingdom, Brazil, Finland, Germany, Thailand, the ~~Philippines.~~Philippines, Indonesia, and Sweden. Deferred tax assets are evaluated each period to determine whether realization is more likely than not. Valuation allowances are established when management determines it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. Valuation allowances may be removed 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 first quarter of ~~2021~~2022 is not reflective of the United States statutory rate primarily due to a valuation allowance against certain net deferred tax assets and unfavorable discrete ~~items, including estimated withholding taxes on the divestiture of Diamond Power Machine (Hubei) Co. referenced in Note 23.~~ items.In certain jurisdictions (namely, the United States ~~Denmark,~~ and Italy) where the ~~company~~Company anticipates a loss for the fiscal year or incurs a loss for the year-to-date period for which a tax benefit cannot be realized in accordance with ASC 740, the ~~company~~Company excludes the loss in that jurisdiction from the overall computation of the estimated annual effective tax rate.

~~In December 2019, the FASB issued~~ ~~ASU No. 2019-12, Simplifying the Accounting for Income Taxes~~. ~~ASU No. 2019-12~~ removes certain exceptions to the general principles in Topic 740, primarily related to intraperiod tax allocation, recognizing deferred tax liabilities for outside basis differences, and calculating income taxes in interim periods. The Company adopted ~~ASU No. 2019-12~~ ~~on January 1, 2021, on a prospective basis. The adoption did not have a material impact on our interim consolidated financial statements.~~

~~Since January 1, 2021,~~

During the first quarter of 2022, we executed the following actions:

•on February ~~8, 2021,~~1, 2022, we ~~entered into A&R Amendment No. 2 to Amended and Restated Credit Agreement (“A&R Amendment No. 2”) with Bank~~acquired 100% ownership of America, N.A., as administrative agent to the lenders under our Amended and Restated Credit Agreement. A&R Amendment No. 2 amends our Amended and Restated Credit Agreement (the “A&R Credit Agreement”) to, among other matters, (i) permit the issuance of 8.125% senior notes due 2026 (the “Senior Notes”) in the offering described below, (ii) permit the deemed prepayment of $35.0Fossil Power Systems, Inc. for approximately $59.1 million, of our Last Our Term Loan Tranche A with $35.0 million principal amount of Senior Notes, (iii) provide that 75% of the Senior Notes gross proceeds shall be used to repay outstanding borrowings and permanently reduce the commitments under our senior secured credit facilities, and (iv) provide that $5.0 million of certain previously deferred facility fees will be paid by the Company;

•on February 12, 2021, we entered into a letter agreement (the “Exchange Agreement”) with B. Riley Financial, Inc. (“B. Riley”), a related party, pursuant to which we agreed to issue to B. Riley $35.0 million aggregate principal amount of Senior Notes in exchange for a deemed prepayment of $35.0 million of our existing Tranche A term loan with B. Riley. On February 12, 2021, we issued $35.0 million of senior notes to B. Riley in exchange for a deemed prepayment of our existing Last Out Term Loan' Tranche A-6. The interest rate on the remaining Last Out Term Loan Tranche A balances has been reduced to 6.625% from 12.0%;

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

B. Riley Securities, Inc., a related party, as representative of several underwriters in the common stock offering. Net proceeds received were approximately $163.0 million after deducting underwriting discounts and commissions, but before expenses;

•on February 12, 2021, we received gross proceeds of approximately $125.0 million after completing an issuance of our $125.0 million aggregate principal amount of Senior Notes, in a public offering through B. Riley Securities, Inc., a related party, as representative of several underwriters in the senior notes offering. Net proceeds received were approximately $120.0 million after deducting underwriting discounts and commissions, but before expenses;

•on March 4, 2021, we entered into A&R Amendment No. 3 to Amended and Restated Credit Agreement (“A&R Amendment No. 3”) with Bank of America, N.A., as administrative agent to the lenders under our A&R Credit Agreement. A&R Amendment No. 3, among other matters, at the date of effectiveness (i) permits the prepayment of certain term loans, (ii) reduces the revolving credit commitments under our A&R Credit Agreement to $130.0 million and removes the ability to obtain revolving loans under our A&R Credit Agreement, and (iii) amends certain covenants and conditions to the extension of credit under our A&R Credit Agreement;

•on March 4, 2021, effective with the execution of A&R Amendment No. 3, we paid $75.0 million towards our existing Last Out Term Loans and paid $21.8 million of accrued and deferred fees related to the revolving credit facility; and

•~~on March 5, 2021, we sold all of the issued and outstanding~~excluding working capital stock of Diamond Power Machine (Hubei) Co., Inc, to BPE Clyde Pte Ltd. for $2.8 million. We received $2.0 million in cash and recorded an $0.8 million favorable contract asset for the amortization period from March 8, 2021 through December 31, 2023. We recognized a $0.4 million gain on the sale of the business.

•~~on March 15, 2021, we completed the sale of certain fixed assets for the Copley, Ohio location for $4.0 million, received $3.3 million of net cash proceeds after~~ adjustments ~~and recognized a gain on sale of $1.9 million. In conjunction with the sale, we executed a leaseback agreement commencing March 16, 2021 and expiring on March 31, 2033;~~

•on March 26, 2021, we entered into A&R Amendment No. 4 to Amended and Restated Credit Agreement (“A&R Amendment No. 4”) with Bank of America, N.A., as administrative agent to the lenders under our A&R Credit Agreement. A&R Amendment No. 4, among other matters, at the date of effectiveness (i) permits the issuance of additional Senior Notes of up to an aggregate principle amount of $150 million, and (ii) modifies the calculation of the senior leverage ratio, as described in Note 1621 to the Condensed Consolidated Financial Statements included in Part I, Item 1I of this Quarterly Report;

•on ~~March 31, 2021,~~February 28, 2022, we ~~entered into a sales agreement with B. Riley Securities, Inc., a related party, in which we may sell, from time to time, up to an aggregated principal amount~~acquired 100% ownership of ~~$150~~Optimus Industries, LLC for approximately $19.0 million, ~~of 8.125% senior notes due 2026 to or through B. Riley Securities, Inc.,~~excluding working capital adjustments as described in Note 1321 to the Condensed Consolidated Financial Statements included in Part I, Item 1I of this Quarterly Report; and

•asduring the first quarter of ~~May 10, 2021,~~2022, the Company ~~has~~ sold ~~$10.6~~$2.0 million aggregate principal ~~amount~~ of 8.125% Senior Notes ~~for $11.0~~and received $2.0 million ~~gross~~of net proceeds ~~related to the March 31, 2021 sales agreement disclosed~~as described in Note 1312 to the Condensed Consolidated Financial Statements included in Part I, Item 1I of this Quarterly Report. ~~The Company received $10.7 million of net cash proceeds after commission and fees;~~

•
on May 7, 2021, we completed a public offering of our 7.75% Series A Cumulative Perpetual Preferred Stock (the "Preferred Stock") pursuant to an underwriting agreement (the “Underwriting Agreement”) dated May 4, 2021, between us

•on May 10, 2021, we entered into Amendment No. 5 to Amended and Restated Credit Agreement with Bank of America, N.A., in its capacity as administrative agent (“A&R Amendment No. 5”). A&R Amendment No. 5 amends the terms of our A&R Credit Agreement to, among other matters, (i) permit the payment of dividends on the Preferred Stock and (ii) permit certain future issuances of Preferred Stock to B. Riley, a related party, in exchange for deemed prepayments of amounts outstanding under our A&R Credit Agreement.

•~~suspension of our 401(k) company match for U.S. employees for 2021;~~

•~~utilizing options for government loans and programs in the U.S. and abroad that are appropriate and available; and~~

•deferring the remaining $20.9 million of the estimated Pension Plan contribution payments of $45.6 million that would have been due during 2021, in accordance with the American Rescue Plan Act of 2021 (the "ARPA relief plan") signed into law in March 2021. In January 2021, we made Pension Plan contributions of $23.1 million, excluding interest. equity offerings.

$2.0 million. Cash flows from financing activities provided net cash of $35.9 million in the three months ended March 31, 2021, primarily related to the $125.0 million issuance of senior notes and $161.5 million common stock issuance, ~~primarily~~ offset by $75.0 million last out term loans repayments, a $164.3 million net reduction on the U.S. Revolving Credit Facility and $7.7 million of financing fees. Cash flows from financing activities provided net cash of $30.8 million in the three months ended March 31, 2020, primarily related to $30.0 million face value borrowings from the last out term loans, $6.0 million of net borrowings from the U.S. revolving credit facility, partly offset by $5.7 million of financing fees.

~~2021 Senior Notes Offering~~

On February 12, 2021, we completed a public offering of $125.0 million aggregate principal amount of our 8.125% senior notes due 2026. The offering was conducted pursuant to an underwriting agreement (the “Notes Underwriting Agreement”) dated February 10, 2021, between us and B. Riley Securities, Inc., as representative of the several underwriters (the “Underwriters”). At the completion, we received gross proceeds of approximately $125.0 million. Net proceeds received were approximately $120.0 million after deducting underwriting discounts and commissions, but before expenses. The Senior Notes were issued in denominations of $25.00 per Senior Note and in integral multiples thereof.

In addition to the public offering, we issued $35.0 million of Senior Notes to B. Riley Financial, Inc. in exchange for a deemed prepayment of our existing Last Out Term Loan Tranche A-3 in a concurrent private offering.

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

We may, at our option, at any time and from time to time, redeem the Senior Notes for cash in whole or in part (i) on or after February 28, 2022 and prior to February 28, 2023, at a price equal to $25.75 per Senior Note, plus accrued and unpaid interest to, but excluding, the date of redemption, (ii) on or after February 28, 2023 and prior to February 29, 2024, at a price equal to $25.50 per Senior Note, plus accrued and unpaid interest to, but excluding, the date of redemption, (iii) on or after February 29, 2024 and prior to February 28, 2025, at a price equal to $25.25 per Senior Note, plus accrued and unpaid interest to, but excluding, the date of redemption and (iv) on or after February 28, 2025 and prior to maturity, at a price equal to 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption. On and after any redemption date, interest will cease to accrue on the redeemed Senior Notes. The Indenture governing the Senior Notes contains customary events of default and cure provisions.

On March 31, 2021, we entered into a sales agreement with B. Riley Securities, Inc., a related party, in which we may sell to or through B. Riley Securities, Inc., from time to time, additional Senior Notes up to an aggregated principal amount of $150.0 million of Senior Notes. The Senior Notes will have the same terms as (other than date of issuance), form a single series of debt securities with and have the same CUSIP number and be fungible with, the Senior Notes issued February 12, 2021, as described above.

~~Senior Notes - Subsequent Event~~

As of May 10, 2021, the Company has sold $10.6 million aggregate principal amount of Senior Notes for $11.0 million gross proceeds related to the March 31, 2021 sales agreement disclosed above. The Company received $10.7 million of net cash proceeds after commission and fees.

~~Exchange Agreement~~

On February 12, 2021, the Company and B. Riley entered into a letter agreement (the “Exchange Agreement”) pursuant to which we issued to B. Riley, a related party, $35.0 million aggregate principal amount of Senior Notes in exchange for a deemed prepayment of $35.0 million of our existing Tranche A term loan with B. Riley Financial (the “Exchange”).

~~2021 Common Stock Offering~~

On February 12, 2021, we completed a public offering of our common stock pursuant to an underwriting agreement (the “Underwriting Agreement”) dated February 9, 2021, between us and B. Riley Securities, Inc., as representative of the several underwriters (the “Underwriters”). At the closing, we issued to the public 29,487,180 shares of our common stock and received gross proceeds of approximately $172.5 million. Net proceeds from the offering were approximately $163.0 million after deducting underwriting discounts and commissions, but before expenses.

The net proceeds of the offering were used to make a prepayment towards the balance outstanding under our U.S. Revolving Credit Facility and permanently reduce the commitments under our senior secured credit facilities.

~~Last Out Term Loans~~

Last Out Term Loans are incurred under our A&R Credit Agreement and are pari passu with the U.S. Revolving Credit Facility except for certain payment subordination provisions. The Last Out Term Loans are subject to the same representations and warranties, covenants and events of default as the U.S. Revolving Credit Facility. In connection with the effectiveness of the A&R Credit Agreement, the maturity date for the Last Out Term Loans was extended to December 30, 2022.

On February 12, 2021, in connection with the Exchange described in Note 13, the interest rate on the remaining Last Out Term Loan Tranche A balances was reduced to 6.625% from 12.0%. Interest expense associated with the Last Out Term Loans is detailed in Note 17.

Effective with Amendment No. 16 to our credit agreement, we borrowed $150.0 million face value from B. Riley, a related party, under Tranche A-3. The $141.4 million net proceeds from Tranche A-3 were primarily used to pay the amounts due under the settlement agreements covering certain European B&W Renewable loss projects as described in Note 4, with the remainder used for working capital and general corporate purposes.

On January 31, 2020, we entered into Amendment No. 20 to the Amended Credit Agreement. Amendment No. 20 provides an incremental Tranche A-5 to be extended prior to maturity of the Last Out Term Loans under the Amended Credit Agreement in the event certain customer letters of credit are drawn. The terms of Tranche A-5 are the same as the terms for the Tranche A-3 under the Amended Credit Agreement. As of May 13, 2021, no borrowings occurred under Tranche A-5.

On May 14, 2020, effective with the A&R Credit Agreement, we borrowed $30.0 million face value of the Tranche A-6 from B. Riley, a related party, as described in Note 16. On November 30, 2020, we borrowed an additional $10.0 million face value of the Tranche A-6 pursuant to the terms of the A&R Credit Agreement which required the proceeds to be applied as a permanent reduction of the U.S. Revolving Credit Facility.Debt Facilities

~~The A&R Credit Agreement provided us with up to $50.0 million~~and future domestic and foreign subsidiaries of ~~additional funding for letters of credit in~~ the ~~form of Tranche A-7, from~~Company. B. Riley, a related party, ~~as described in Note 16.~~has provided a guaranty of payment with regard to the Company’s obligations under the Reimbursement Agreement. The ~~$50.0 million will be available upon request by~~Company expects to use the ~~Company, subject to certain limitations.~~proceeds and letter of credit availability under the Debt Facilities for working capital purposes and general corporate purposes. The Revolving Credit Agreement matures on June 30, 2025. As of ~~May 13, 2021,~~March 31, 2022, no borrowings have occurred under ~~Tranche A-7.~~

~~A&R~~the Revolving Credit Agreement

On May 11, 2015, we entered into an amended credit agreement with a syndicate of lenders in connection with our spin-off from The Babcock & Wilcox Company (now BWX Technologies, Inc.) which governs the U.S. Revolving Credit Facility and ~~the Last Out Term Loans. Since June 2016, we have entered into a number of waivers and amendments to the credit agreement, including several to avoid default~~ under the ~~financial and other covenants specified in the credit agreement.~~

~~On May 14, 2020, we entered into the A&R Credit Agreement which refinances and extends the maturity~~Letter of ~~our U.S. Revolving Credit Facility and Last Out Term Loans.~~

On February 8, 2021, we entered into A&R Amendment No. 2 with Bank of America, N.A., as administrative agent to the lenders under our Amended and Restated Credit Agreement. A&R Amendment No. 2 amends our A&R Credit Agreement to, among other matters, (i) permit the issuance of 8.125% Senior Notes offering described above, (ii) permit the deemed prepayment of $35.0 million of our Last Out Term Loan Tranche A with $35.0 million principal amount of Senior Notes, (iii)

~~On March 4, 2021, we entered into A&R Amendment No. 3 with Bank~~financial letters of ~~America. A&R Amendment No. 3, among other matters, at the date~~credit and $90.8 million of ~~effectiveness (i) permits the prepayment~~performance letters of certain term loans, (ii) reduces the revolving credit commitments to $130.0 million and removes the ability to obtain revolving loans under the credit agreement, and (iii) amends certain covenants and conditions to the extension of credit.

On March 26, 2021, we entered into A&R Amendment No. 4 with Bank of America. A&R Amendment No. 4, among other matters, at the date of effectiveness (i) permits the issuance of 8.125% senior notes due 2026 up to an aggregate principle amount of $150.0 million, and (ii) modifies the calculation of the senior leverage ratio.

On May 10, 2021, we entered into A&R Amendment No. 5 with Bank of America, N.A. A&R Amendment No. 5, among other matters, at the date of effectiveness (i) permits the issuance of certain disqualified stock and the payment of regular cash dividends thereon and (ii) permits the related cashless prepayment of term loans.

~~U.S. Revolving Credit Facility~~

~~At March 31, 2021, usage under~~with a variable interest rate on the ~~U.S. Revolving Credit Facility consisted of $22.0 million of financial letters~~line of credit ~~and $82.1 million~~ of ~~performance letters of credit. At March 31, 2021, we had approximately $25.9 million available to meet letter~~5.0% per annum. On April 1, 2022, the line of credit ~~requirements based on our overall facility size.~~

On February 12, 2021, we received gross proceeds of $125.0 million from the 2021 Senior Notes offering. As required by the Company’s U.S. Revolving Credit Facility, 75% of the gross proceeds, or $93.8 million, received by the Company was ~~applied as a permanent reduction of the U.S. Revolving Credit Facility as of February 12, 2021.~~

~~Also on February 16, 2021, we prepaid $167.1 million towards the remaining outstanding U.S. Revolving Credit Facility.~~


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

1200 East Market Street, Suite 650
Akron, Ohio						44305
(Address of Principal Executive Offices)						(Zip Code)


		PAGE
Cautionary Statement Concerning Forward-Looking Information		3
PART I - FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements	3
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, ~~2021~~2022 and ~~2020 (Unaudited)~~2021	34
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, ~~202~~1 2022 and 20 20 ~~(Unaudited)~~	4
	~~Condensed Consolidated Balance Sheets as of~~ ~~March 31, 202~~1 ~~and December 31, 20~~20 2021 (Unaudited)	5
	Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021 (Unaudited)	6
	Condensed Consolidated Statement of Stockholders' Equity (Deficit) ~~Equity~~ for each of the Three Month Periods Ended March 3 1 ~~, 202~~1 31, 2022, and 20 20 2021 (Unaudited)	67
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 3 1 ~~, 202~~1 31, 2022 and 20 20 2021 (Unaudited)	78
	Notes to Condensed Consolidated Financial Statements	810
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operation	3233
	Overview	3233
	Results of Operations - Three Months Ended March 3 1 ~~, 202~~1 31, 2022 and 20 202021	34
	Liquidity and Capital Resources	40
	Critical Accounting Policies and Estimates	4642
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4642
Item 4.	Controls and Procedures	4643
PART III I - OTHER INFORMATION
Item 1.	Legal Proceedings	4743
Item 1A.	Risk Factors	4743
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4743
Item 6.	Exhibits	4844
SIGNATURES		4946


	Three months ended March 31,
(in thousands, except per share amounts)		2021		2020
Revenues		$	168,248	$	148,554
Costs and expenses:
Cost of operations		131,385		114,628
Selling, general and administrative expenses		40,457		37,608
Advisory fees and settlement costs		3,291		4,239
Restructuring activities		993		1,951
Research and development costs		588		1,341
Gain on asset disposals, net		(2,004)		(915)
Total costs and expenses		174,710		158,852
Operating loss		(6,462)		(10,298)
Other (expense) income:
Interest expense		(14,223)		(22,091)
Interest income		109		40
Gain on sale of business		358		0
Benefit plans, net		9,098		7,536
Foreign exchange		(1,209)		(9,326)
Other – net		(278)		(206)
Total other expense		(6,145)		(24,047)
Loss before income tax expense (benefit)		(12,607)		(34,345)
Income tax expense (benefit)		2,836		(810)
Loss from continuing operations		(15,443)		(33,535)
Income from discontinued operations, net of tax		0		1,913
Net loss		(15,443)		(31,622)
Net (income) loss attributable to non-controlling interest		(21)		96
Net loss attributable to stockholders		$	(15,464)	$	(31,526)

Basic and diluted loss per share - continuing operations		$	(0.22)	$	(0.72)
Basic and diluted earnings per share - discontinued operations		0		0.04
Basic and diluted loss per share		$	(0.22)	$	(0.68)

Shares used in the computation of earnings (loss) per share:
Basic and diluted		71,396		46,403


	Three Months Ended March 31,
(in thousands, except per share amounts)		2022		2021
Revenues		$	204,049	$	168,248
Costs and expenses:
Cost of operations		163,060		131,385
Selling, general and administrative expenses		43,044		40,457
Advisory fees and settlement costs		3,935		3,291
Restructuring activities		94		993
Research and development costs		719		588
Gain on asset disposals, net		(20)		(2,004)
Total costs and expenses		210,832		174,710
Operating loss		(6,783)		(6,462)
Other expense:
Interest expense		(11,267)		(14,223)
Interest income		117		109

Gain on sale of business		—		358
Benefit plans, net		7,452		9,098
Foreign exchange		3,085		(1,209)
Other expense – net		(58)		(278)
Total other expense		(671)		(6,145)
Loss before income tax expense		(7,454)		(12,607)
Income tax expense		1,230		2,836


Net loss		(8,684)		(15,443)
Net loss (income) attributable to non-controlling interest		420		(21)
Net loss attributable to stockholders		(8,264)		(15,464)
Less: Dividend on Series A preferred stock		3,715		—
Net loss attributable to stockholders of common stock		$	(11,979)	$	(15,464)

Basic loss per share		$	(0.14)	$	(0.22)




Diluted loss per share		$	(0.14)	$	(0.22)




Shares used in the computation of loss per share:
Basic		87,992		71,396
Diluted		87,992		71,396


(in thousands, except per share amount)	March 31, 2021		December 31, 2020
Cash and cash equivalents	$	53,833	$	57,338
Restricted cash and cash equivalents	4,613		10,085
Accounts receivable – trade, net	144,125		128,317
Accounts receivable – other	30,694		35,442
Contracts in progress	66,233		59,308
Inventories	67,864		67,161
Other current assets	24,014		26,421
Current assets held for sale	0		4,728
Total current assets	391,376		388,800
Net property, plant and equipment, and finance lease	85,848		85,078
Goodwill	47,354		47,363
Intangible assets	22,209		23,908
Right-of-use assets	9,513		10,814
Other assets	24,187		24,673
Non-current assets held for sale	1,870		11,156
Total assets	$	582,357	$	591,792

Accounts payable	$	78,503	$	73,481
Accrued employee benefits	13,740		13,906
Advance billings on contracts	81,753		64,002
Accrued warranty expense	19,537		25,399
Operating lease liabilities	3,578		3,995
Other accrued liabilities	70,572		81,744
Current liabilities held for sale	0		8,305
Total current liabilities	267,683		270,832
Revolving credit facilities	0		164,300
Last out term loans	73,330		183,330
Senior notes	155,509		0
Pension and other accumulated postretirement benefit liabilities	219,262		252,292
Non-current finance lease liabilities	33,155		29,690
Non-current operating lease liabilities	6,137		7,031
Other non-current liabilities	22,725		22,579
Total liabilities	777,801		930,054
Commitments and contingencies	0		0
Stockholders' deficit:
Common stock, par value $0.01 per share, authorized shares of 500,000; issued and outstanding shares of 85,664 and 54,452 at March 31, 2021 and December 31, 2020, respectively	5,101		4,784
Capital in excess of par value	1,330,134		1,164,436
Treasury stock at cost, 1,214 and 718 shares at March 31, 2021 and December 31, 2020, respectively	(109,298)		(105,990)
Accumulated deficit	(1,365,670)		(1,350,206)
Accumulated other comprehensive income (loss)	(56,774)		(52,390)
Stockholders' deficit attributable to shareholders	(196,507)		(339,366)
Non-controlling interest	1,063		1,104
Total stockholders' deficit	(195,444)		(338,262)
Total liabilities and stockholders' deficit	$	582,357	$	591,792


(in thousands, except per share amount)	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	108,137	$	224,874
Restricted cash and cash equivalents	8,833		1,841
Accounts receivable – trade, net	170,464		132,068
Accounts receivable – other	39,819		34,553
Contracts in progress	95,972		80,176
Inventories, net	90,401		79,527
Other current assets	27,343		29,395

Total current assets	540,969		582,434
Net property, plant and equipment, and finance lease	77,156		85,627
Goodwill	174,371		116,462
Intangible assets, net	65,452		43,795
Right-of-use assets	30,500		30,163
Other assets	66,251		54,784

Total assets	$	954,699	$	913,265

Accounts payable	$	97,840	$	85,929
Accrued employee benefits	12,245		12,989
Advance billings on contracts	99,910		68,380
Accrued warranty expense	11,873		12,925
Financing lease liabilities	1,973		2,445
Operating lease liabilities	4,078		3,950
Other accrued liabilities	75,949		54,385
Loans payable	13,433		12,380

Total current liabilities	317,301		253,383
Senior notes	328,870		326,366
Long term loans payable	1,476		1,543


Pension and other postretirement benefit liabilities	174,873		182,730
Non-current finance lease liabilities	29,094		29,369
Non-current operating lease liabilities	27,032		26,685
Other non-current liabilities	32,111		34,567
Total liabilities	910,757		854,643
Commitments and contingencies	0		0
Stockholders' equity:
Preferred stock, par value $0.01 per share, authorized shares of 20,000; issued and outstanding shares of 7,669 and 7,669 at March 31, 2022 and December 31, 2021, respectively	77		77
Common stock, par value $0.01 per share, authorized shares of 500,000; issued and outstanding shares of 86,338 and 86,286 at March 31, 2022 and December 31, 2021, respectively	5,111		5,110
Capital in excess of par value	1,520,545		1,518,872
Treasury stock at cost, 1,553 and 1,525 shares at March 31, 2022 and December 31, 2021, respectively	(111,155)		(110,934)
Accumulated deficit	(1,333,133)		(1,321,154)
Accumulated other comprehensive loss	(62,514)		(58,822)
Stockholders' equity attributable to shareholders	18,931		33,149
Non-controlling interest	25,011		25,473
Total stockholders' equity	43,942		58,622
Total liabilities and stockholders' equity	$	954,699	$	913,265


(in thousands)	(in thousands)	B&W Renewable		B&W Environmental		B&W Thermal		Total		(in thousands)	B&W Renewable		B&W Environmental		B&W Thermal		Total
Balance at December 31, 2020		$	10,211	$	5,673	$	31,479	$	47,363
Balance at December 31, 2021										Balance at December 31, 2021	$	79,357	$	5,667	$	31,438	$	116,462
Addition - Fossil Power(1)										Addition - Fossil Power(1)	—		—		35,392		35,392
Addition - Optimus Industries(1)										Addition - Optimus Industries(1)	—		—		11,081		11,081
Measurement period adjustments - Fosler(1)(2)										Measurement period adjustments - Fosler(1)(2)	11,163		—		—		11,163
Measurement period adjustments - VODA(1)(2)										Measurement period adjustments - VODA(1)(2)	(61)		—		—		(61)
Currency translation adjustments	Currency translation adjustments	(1)		(1)		(7)		(9)		Currency translation adjustments	57		45		232		334
Balance at March 31, 2021		$	10,210	$	5,672	$	31,472	$	47,354
Balance at March 31, 2022										Balance at March 31, 2022	$	90,516	$	5,712	$	78,143	$	174,371


	Amortization Expense
Year ending December 31, ~~2021~~	$	~~2,470~~
~~Year ending December 31,~~ 2022	~~3,321~~5,990
Year ending December 31, 2023	~~3,319~~7,986
Year ending December 31, 2024	~~3,247~~7,906
Year ending December 31, 2025	~~2,549~~7,089
Year ending December 31, 2026	~~1,292~~5,890
Year ending December 31, 2027	5,229
Thereafter	~~4,706~~24,057


		Three months ended March 31,
(in thousands)	Classification		2021		2020
Operating lease expense:
Operating lease expense	Selling, general and administrative expenses		$	1,339	$	1,507
Short-term lease expense	Selling, general and administrative expenses		1,155		188
Variable lease expense (1)	Selling, general and administrative expenses		208		776
Total operating lease expense			$	2,702	$	2,471

Finance lease expense:
Amortization of right-of-use assets	Selling, general and administrative expenses		$	529	$	515
Interest on lease liabilities	Interest expense		616		615
Total finance lease expense			$	1,145	$	1,130

Sublease income (2)	Other – net		$	(22)	$	(22)
Net lease cost			$	3,825	$	3,579


(in thousands)
Assets:	Classification	March 31, 2021		December 31, 2020
Operating lease assets	Right-of-use assets	$	9,513	$	10,814
Finance lease assets	Net property, plant and equipment, and finance lease	31,651		28,477
Total non-current lease assets		$	41,164	$	39,291

Liabilities:
Current
Operating lease liabilities	Operating lease liabilities	$	3,578	$	3,995
Finance lease liabilities	Other accrued liabilities	920		886
Non-current
Operating lease liabilities	Non-current operating lease liabilities	6,137		7,031
Finance lease liabilities	Non-current finance lease liabilities	33,155		29,690
Total lease liabilities		$	43,790	$	41,602


(in thousands)	Operating Leases		Finance Leases		Total
2021 (excluding the three months ended March 31, 2021)	$	3,467	$	2,629	$	6,096
2022	3,439		3,793		7,232
2023	2,407		3,879		6,286
2024	1,326		3,944		5,270
2025	313		3,969		4,282
Thereafter	19		38,412		38,431
Total	$	10,971	$	56,626	$	67,597
Less imputed interest	(1,256)		(22,551)		(23,807)
Lease liability	$	9,715	$	34,075	$	43,790


			Pension Benefits					Other Benefits						Pension Benefits				Other Benefits
		Three months ended March 31,					Three months ended March 31,			Three Months Ended March 31,						Three Months Ended March 31,
(in thousands)	(in thousands)		2021		2020			2021			2020		(in thousands)	2022		2021			2022		2021
Interest cost	Interest cost		$	5,671	$	8,261		$	39		$	72	Interest cost	$	6,664	$	5,671		$	49	$	39
Expected return on plan assets	Expected return on plan assets		(15,009)		(15,641)			0			0		Expected return on plan assets	(14,366)		(15,009)			—		—
Amortization of prior service cost (credit)	Amortization of prior service cost (credit)		28		43			173			(271)		Amortization of prior service cost (credit)	28		28			173		173
Benefit plans, net (1)	Benefit plans, net (1)		(9,310)		(7,337)			212			(199)		Benefit plans, net (1)	(7,674)		(9,310)			222		212
Service cost included in COS (2)	Service cost included in COS (2)		217		211			6			5		Service cost included in COS (2)	201		217			5		6
Net periodic benefit cost (benefit)	Net periodic benefit cost (benefit)		$	(9,093)	$	(7,126)		$	218		$	(194)	Net periodic benefit cost (benefit)	$	(7,473)	$	(9,093)		$	227	$	218


(in thousands)	(in thousands)	Currency translation loss		Net unrecognized loss related to benefit plans (net of tax)		Total		(in thousands)	Currency translation loss		Net unrecognized loss related to benefit plans (net of tax)		Total
Balance at December 31, 2020		$	(47,575)	$	(4,815)	$	(52,390)
Balance at December 31, 2021								Balance at December 31, 2021	$	(55,499)	$	(3,323)	$	(58,822)
Other comprehensive loss before reclassifications	Other comprehensive loss before reclassifications	(70)		0		(70)		Other comprehensive loss before reclassifications	(4,285)		—		(4,285)
Reclassified from AOCI to net income (loss)		(4,512)		198		(4,314)
Reclassified from AOCI to net loss								Reclassified from AOCI to net loss	—		593		593
Net other comprehensive (loss) income	Net other comprehensive (loss) income	(4,582)		198		(4,384)		Net other comprehensive (loss) income	(4,285)		593		(3,692)
Balance at March 31, 2021		$	(52,157)	$	(4,617)	$	(56,774)

Balance at March 31, 2022								Balance at March 31, 2022	(59,784)		(2,730)		(62,514)


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


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


AOCI component	AOCI component	Line items in the Condensed Consolidated Statements of Operations affected by reclassifications from AOCI	Three months ended March 31,					AOCI component	Line items in the Condensed Consolidated Statements of Operations affected by reclassifications from AOCI			Three Months Ended March 31,
				2021		2020					Line items in the Condensed Consolidated Statements of Operations affected by reclassifications from AOCI		2022		2021
Release of currency translation adjustment with the sale of business	Release of currency translation adjustment with the sale of business	Gain on sale of business		$	4,512	$	0			Release of currency translation adjustment with the sale of business			$	—	$	4,512
Amortization of prior service cost on benefit obligations		Benefit plans, net		(198)		246
		Net income		$	4,314	$	246
Pension and post retirement adjustments, net of tax										Pension and post retirement adjustments, net of tax	Benefit plans, net		(593)		(198)
											Net (loss) income		$	(593)	$	4,314


		As of March 31,					As of March 31,
(In approximate millions)		2021		2020
(in approximate millions)						(in approximate millions)	2022		2021
B&W Renewable(1)	B&W Renewable(1)	$	215	$	224	B&W Renewable(1)	$	440	$	215
B&W Environmental	B&W Environmental	118		100		B&W Environmental	126		118
B&W Thermal	B&W Thermal	206		183		B&W Thermal	158		206
Other/eliminations	Other/eliminations	(4)		(6)		Other/eliminations	(3)		(4)
Backlog	Backlog	$	535	$	501	Backlog	$	721	$	535


		Three months ended March 31,										Three Months Ended March 31,
(In thousands, except for percentages)	(In thousands, except for percentages)		2021			2020			$ Change		(In thousands, except for percentages)		2022			2021
Income (loss) before income taxes			$	(12,607)		$	(34,345)		$	21,738
Income tax expense (benefit)			$	2,836		$	(810)		$	3,646
Loss before income taxes											Loss before income taxes		$	(7,454)		$	(12,607)
Income tax expense											Income tax expense		$	1,230		$	2,836
Effective tax rate	Effective tax rate		(22.5)		%	2.4		%			Effective tax rate		(16.5)		%	(22.5)		%


(data in whole amounts)	(data in whole amounts)							(data in whole amounts)
Period	Period	Total number of shares acquired (1)	Average price per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs		Period	Total number of shares acquired (1)	Average price per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs
January 2021		79,182	$	3.51	—	$	—
February 2021		416,665	$	7.27	—	$	—
March 2021		—	$	—	—	$	—
January 2022								January 2022	19,734	$	8.65	—	$	—
February 2022								February 2022	6,833	$	7.37	—	$	—
March 2022								March 2022	—	$	—	—	$	—
Total	Total	495,847	$	6.67	—	$	—	Total	26,567	$	8.32	—	$	—


2.1*						Master Separation Agreement, dated as of June 8, 2015, between The Babcock & Wilcox Company and Babcock & Wilcox Enterprises, Inc. (incorporated by reference to Exhibit 2.1 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876)).

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

3.2						Certificate of Amendment of the Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on June 17, 2019 (File No. 001-36876)).

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

3.4						Amended and Restated Bylaws of the Babcock & Wilcox Enterprises, Inc.

3.5						Certificate of Designations with respect to the 7.75% Series A Cumulative Perpetual Preferred Stock, dated May 6, 2021, filed with the Secretary of State of Delaware and effective on May 6, 2021 (incorporated by reference to Exhibit ~~3.1~~3.4 to the Babcock & Wilcox Enterprises, Inc. ~~Quarterly Report~~Form 8-A filed on ~~Form 10-Q for the quarter ended March 31, 2017~~May 7, 2021 (File No. 001-36876)).

~~4.3~~3.6						~~Indenture~~Certificate of Increase in Number of Shares of 7.75% Series A Cumulative Perpetual Preferred Stock, dated ~~February 12,~~June 1, 2021 (incorporated by reference to Exhibit ~~4.1~~3.1 to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on ~~February 12,~~July 7, 2021 (File No. 001-36876)).

~~4.4~~						Supplemental Indenture dated February 12, 2021 (incorporated by reference to Exhibit 4.2 to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on February 12, 2021 (File No. 001-36876)).

~~4.5~~						~~Form of 8.125% Senior Note Due 2026 (included in Exhibit 4.4)~~

~~10.1~~						Consultant Agreement by and between The Babcock & Wilcox Company Inc. and Henry Bartoli effective as of January 1, 2021 (incorporated by reference to Exhibit 10.3 of the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed November 10, 2020 (File No. 001-36876)).

~~10.2~~						Exchange Agreement by and between Babcock & Wilcox Enterprises Inc. and B. Riley Financial, Inc. dated February 12, 2021 (incorporated by reference to Exhibit 1.3 to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on February 12, 2021 (File No. 001-36876)).

~~10.3~~						Amendment No. 2 to Amended and Restated Credit Agreement by and between Babcock and Wilcox Enterprises Inc. and Bank of America, N.A., as Administrative Agent, dated February 8, 2021 (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on February 12, 2021 (File No. 001-36876)).

~~10.4~~						Amendment No. 3 to Amended and Restated Credit Agreement by and between Babcock and Wilcox Enterprises Inc. and Bank of America, N.A., as Administrative Agent, dated March 4, 2021 (incorporated by reference to Exhibit 10.68 to the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended December 31, 2020 (File No. 001-36876)).

~~10.5~~						Amendment No. 4 to Amended and Restated Credit Agreement by and between Babcock and Wilcox Enterprises Inc. and Bank of America, N.A., as Administrative Agent, dated March 26, 2021 (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on April 1, 2021 (File No. 001-36876)).

~~10.6~~						~~Amendment No. 5 to Amended and Restated Credit Agreement by and between Babcock and Wilcox Enterprises Inc. and Bank of America, N.A., as Administrative Agent, dated May 10, 2021~~


























































































































































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.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.



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


		BABCOCK & WILCOX ENTERPRISES, INC.

May ~~13, 2021~~9, 2022	By:	/s/ Louis Salamone
		Louis Salamone
		Executive Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Financial and Accounting Officer and Duly Authorized Representative)