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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
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47-2783641
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(State or other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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THE HARRIS BUILDING
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13024 BALLANTYNE CORPORATE PLACE, SUITE 700
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CHARLOTTE, NORTH CAROLINA
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28277
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
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Name of each Exchange on which registered
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Common Stock, $0.01 par value
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New York Stock Exchange
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Large accelerated filer
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x
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Accelerated filer
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Item 6
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Item 9
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•
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high-pressure equipment for energy conversion, such as boilers fueled by coal, oil, bitumen, natural gas, and renewables including municipal solid waste and biomass fuels;
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•
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environmental control systems for both power generation and industrial applications to incinerate, filter, capture, recover and/or purify air, liquid and vapor-phase effluents from a variety of power generation and specialty manufacturing processes;
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•
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aftermarket support for the global installed base of operating plants with a wide variety of products and technical services including replacement parts, retrofit and upgrade capabilities, field engineering, construction, inspection, operations and maintenance, condition assessment and other technical support;
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•
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custom-engineered comprehensive dry and wet cooling solutions
;
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•
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gas turbine inlet and exhaust systems, custom silencers, filters and custom enclosures; and
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•
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engineered-to-order services, products and systems for energy conversion worldwide and related auxiliary equipment, such as burners, pulverizers, soot blowers and ash and material handling systems.
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•
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prices for electricity, along with the cost of production and distribution including the cost of fuel within the United States or internationally;
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•
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demand for electricity and other end products of steam-generating facilities;
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•
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requirements for environmental and noise abatement improvements;
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•
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expectation of future requirements to further limit or reduce greenhouse gas and other emissions in the United States and internationally;
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•
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environmental policies which include waste-to-energy or biomass as options to meet legislative requirements and clean energy portfolio standards;
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•
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level of capacity utilization at operating power plants and other industrial uses of steam production;
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•
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requirements for maintenance and upkeep at operating power plants to combat the accumulated effects of usage;
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•
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overall strength of the industrial industry; and
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•
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ability of electric power generating companies and other steam users to raise capital.
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•
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maintaining our strong service presence in support of our installed fleet of steam generation equipment and expanding support of other OEM equipment;
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•
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selectively bidding contracts in emerging international markets needing state-of-the-art technology for fossil power generation and environmental systems;
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•
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growing sales of industrial steam generation products in the petrochemical and pulp & paper markets, such as heat recovery, natural gas and oil fired package boilers, due in part to lower fuel prices; and
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•
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reducing costs through a focus on operational efficiencies.
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•
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Babcock & Wilcox Beijing Company, Ltd. ("BWBC")
Through
December 31, 2017
, we owned equal interests in this entity with Beijing Jingcheng Machinery Electric Holding Company, Ltd. BWBC was formed in 1986 and is located in Beijing, China. Its main activities include the design, manufacture, production and sale of various power plant steam generators including supercritical and ultra supercritical boilers and aftermarket services that include boiler upgrades and environmental equipment. BWBC also provides engineering services and manufacturing to support B&W's new power boiler business globally. In early 2018, we sold all of our joint venture interest in BWBC for approximately
$21 million
, resulting in a gain of approximately
$4 million
, which will be recognized in the first quarter of 2018. Although we will no longer have an equity interest in this joint venture, we will continue a relationship with BWBC through an expanded technology license.
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•
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Thermax Babcock & Wilcox Energy Solutions Private Limited ("TBWES")
In June 2010, one of our subsidiaries and Thermax Ltd., a boiler manufacturer based in India, formed a joint venture to build subcritical and highly efficient supercritical boilers and pulverizers for the Indian utility boiler market. We have licensed to TBWES our technology for subcritical boilers 300 MW and larger, highly efficient supercritical boilers and coal pulverizers. In 2013, TBWES finalized construction of a facility in India designed to produce parts for up to 3,000 MW of utility boiler capacity per year. During the second quarter of 2017, both we and our joint venture partner decided to make a strategic change in the Indian joint venture due to the decline in forecasted market opportunities in India, which reduced the recoverable value of our investment in the joint venture. As a result of this strategic change, we recognized an
$18.2 million
other-than-temporary-impairment of our investment in TBWES in the second quarter of 2017. At
December 31, 2017
, our remaining investment in TBWES was
$26.0 million
.
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•
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Other Project Related Ventures
From time to time, we partner with other companies to better meet the needs of our customers, which can result in project-related joint venture entities. Examples of this include BWL Energy Ltd., which was formed to complete the construction of a waste wood fired boiler contract in the United Kingdom. This joint venture combines our expertise in the waste-to-energy power plant design, engineering, procurement and construction with our partner's civil construction capability to provide a full turnkey product to our customer.
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(In millions)
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2017
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2016
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||||
Power
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$
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656
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$
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790
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Renewable
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115
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135
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Industrial
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416
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222
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Other/eliminations
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(48
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)
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(6
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)
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Bookings
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$
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1,139
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$
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1,141
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(in approximate millions)
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2018
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2019
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Thereafter
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Total
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||||||||
Power segment
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$
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335
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$
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81
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$
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37
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$
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453
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Renewable segment
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293
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111
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604
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1,008
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Industrial segment
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258
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—
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—
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258
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||||
Other/eliminations
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(3
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)
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—
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(40
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)
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(43
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)
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Backlog
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$
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883
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$
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192
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$
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601
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$
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1,676
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Power segment
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Renewable segment
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Industrial segment
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GE
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CNIM Group
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B&W MEGTEC primary competitors
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Doosan
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Hitachi Zosen
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Durr, Dustex, CECO, Eisenmann
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Babcock Power
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Martin
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B&W Universal primary competitors
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Cleaver-Brooks
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Keppel Seghers
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CECO, Innova, Miratech, American Air Filter
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Sumitomo SHI-FW
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Valmet
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B&W SPIG primary competitors
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MH Power Systems
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Andritz
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Hamon, Enexio, Kelvion, Paharpur, Evapco,
SPX Corporation
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•
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prices for electricity, along with the cost of production and distribution;
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•
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prices for natural resources such as coal and natural gas;
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•
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demand for electricity and other end products of steam-generating facilities;
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•
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availability of other sources of electricity or other end products;
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•
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requirements of environmental legislation and regulations, including potential requirements applicable to carbon dioxide emissions;
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•
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impact of potential regional, state, national and/or global requirements to significantly limit or reduce greenhouse gas emissions in the future;
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•
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level of capacity utilization and associated operations and maintenance expenditures of power generating companies and other steam-using facilities;
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•
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requirements for maintenance and upkeep at operating power plants and other steam-using facilities to combat the accumulated effects of wear and tear;
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•
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ability of electric generating companies and other steam users to raise capital; and
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•
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relative prices of fuels used in boilers, compared to prices for fuels used in gas turbines and other alternative forms of generation.
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•
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difficulties encountered on our large-scale contracts related to the procurement of materials or due to schedule disruptions, equipment performance failures, engineering and design complexity, unforeseen site conditions, rejection clauses in customer contracts or other factors that may result in additional costs to us, reductions in revenue, claims or disputes;
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•
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our inability to obtain compensation for additional work we perform or expenses we incur as a result of our customers or subcontractors providing deficient design or engineering information or equipment or materials;
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•
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requirements to pay liquidated damages upon our failure to meet schedule or performance requirements of our contracts; and
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•
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difficulties in engaging third-party subcontractors, equipment manufacturers or materials suppliers or failures by third-party subcontractors, equipment manufacturers or materials suppliers to perform could result in contract delays and cause us to incur additional costs.
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•
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flexibility in planning for, or reacting to, changes in our business or economic, regulatory and industry conditions;
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•
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ability to invest in joint ventures or acquire other companies;
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•
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ability to sell assets;
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•
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ability to pay dividends to our stockholders;
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•
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ability to repurchase shares of our common stock; and
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•
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ability to borrow additional funds.
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•
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accidents resulting in injury or the loss of life or property;
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•
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environmental or toxic tort claims, including delayed manifestation claims for personal injury or loss of life;
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•
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pollution or other environmental mishaps;
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•
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adverse weather conditions;
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•
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mechanical failures;
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•
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property losses;
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•
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business interruption due to political action or other reasons; and
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•
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labor stoppages.
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•
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constructing and manufacturing power generation products;
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•
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currency conversions and repatriation;
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•
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clean air and other environmental protection legislation;
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•
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taxation of foreign earnings;
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•
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transactions in or with foreign countries or officials; and
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•
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use of local employees and suppliers.
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•
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failure to comply with environmental and safety laws and regulations or permit conditions;
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•
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local community, political or other opposition;
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•
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executive action; and
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•
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legislative action.
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•
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risks of war, terrorism and civil unrest;
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•
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expropriation, confiscation or nationalization of our assets;
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•
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renegotiation or nullification of our existing contracts;
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•
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changing political conditions and changing laws and policies affecting trade and investment;
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•
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overlap of different tax structures; and
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•
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risk of changes in foreign currency exchange rates.
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•
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the historical audited consolidated financial results reflect allocations of expenses for services historically provided by BWC, and those allocations may be different than the comparable expenses we would have incurred as an independent company;
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•
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our cost of debt and other capitalization may be different from that reflected in our historical audited consolidated financial statements;
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•
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the historical audited consolidated financial information does not reflect the changes that will occur in our cost structure, management, financing arrangements and business operations as a result of our separation from BWC, including the costs related to being an independent company; and
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•
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the historical audited consolidated financial information does not reflect the effects of some of the liabilities that have been assumed by B&W and does reflect the effects of some of the assets that have been transferred to, and liabilities that have been assumed by, BWC, including the assets and liabilities associated with BWC's Nuclear Energy segment, which were previously part of B&W and were transferred to BWC prior to the spin-off.
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•
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fluctuations in our quarterly or annual earnings or those of other companies in our industry;
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•
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failures of our operating results to meet the estimates of securities analysts or the expectations of our stockholders or changes by securities analysts in their estimates of our future earnings;
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•
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announcements by us or our customers, suppliers or competitors;
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•
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the depth and liquidity of the market for B&W common stock;
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•
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changes in laws or regulations that adversely affect our industry or us;
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•
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changes in accounting standards, policies, guidance, interpretations or principles;
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•
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general economic, industry and stock market conditions;
|
•
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future sales of our common stock by our stockholders;
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•
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the concentration of ownership of our common stock;
|
•
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future issuances of our common stock by us;
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•
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our ability to pay dividends in the future; and
|
•
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the other factors described in these "Risk Factors" and other parts of this annual report.
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Business Segment and Location
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Principal Use
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Owned/Leased
(Lease Expiration)
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Power segment
|
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Barberton, Ohio
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Administrative office / research and development
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Owned
(1)
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Lancaster, Ohio
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Manufacturing facility
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Owned
(1)
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Copley, Ohio
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Warehouse / service center
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Owned
(1)
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Dumbarton, Scotland
|
Manufacturing facility
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Owned
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Guadalupe, NL, Mexico
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Manufacturing facility
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Leased (2024)
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Cambridge, Ontario, Canada
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Administrative office / warehouse
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Leased (2018)
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Jingshan, Hubei, China
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Manufacturing facility
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Owned
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Renewable segment
|
|
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Copenhagen, Denmark
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Administrative office
|
Leased (2022)
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Esbjerg, Denmark
|
Manufacturing facility / administrative office
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Owned
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Straubing, Germany
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Manufacturing facility
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Leased (2021)
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Industrial segment
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De Pere, Wisconsin
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Manufacturing facility / administrative office
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Owned
(1)
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Stoughton, Wisconsin
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Administrative office
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Owned
(1)
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Arona, Italy
|
Administrative offices / research and development
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Leased (2022)
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San Diego, California
|
Administrative office
|
Leased (2024)
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Shanghai, China
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Manufacturing facility
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Owned
|
Ding Xiang, Xin Zhou, Shan Xi, China
|
Manufacturing facility
|
Leased (2019/2020)
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Beloit, Wisconsin
|
Manufacturing facility
|
Leased (2026)
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Muscoda, Wisconsin
|
Manufacturing facility
|
Owned
(1)
|
San Luis Potosi, Mexico
|
Manufacturing facility
|
Owned
|
Corporate office
|
|
|
Charlotte, North Carolina
|
Administrative office
|
Leased (2019)
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Share Price
|
Dividends
|
|||||||
Quarter ended
|
High
|
Low
|
Per Share
|
||||||
June 30, 2015
|
$
|
22.31
|
|
$
|
17.12
|
|
$
|
—
|
|
September 30, 2015
|
$
|
21.95
|
|
$
|
16.40
|
|
$
|
—
|
|
December 31, 2015
|
$
|
21.67
|
|
$
|
15.86
|
|
$
|
—
|
|
March 31, 2016
|
$
|
22.17
|
|
$
|
17.95
|
|
$
|
—
|
|
June 30, 2016
|
$
|
23.99
|
|
$
|
14.32
|
|
$
|
—
|
|
September 30, 2016
|
$
|
17.30
|
|
$
|
14.27
|
|
$
|
—
|
|
December 31, 2016
|
$
|
17.72
|
|
$
|
12.90
|
|
$
|
—
|
|
March 31, 2017
|
$
|
17.50
|
|
$
|
8.54
|
|
$
|
—
|
|
June 30, 2017
|
$
|
11.88
|
|
$
|
8.58
|
|
$
|
—
|
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September 30, 2017
|
$
|
12.06
|
|
$
|
1.61
|
|
$
|
—
|
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December 31, 2017
|
$
|
6.14
|
|
$
|
3.28
|
|
$
|
—
|
|
Period
|
Total number of shares purchased
(1)
|
Average
price paid
per share
|
Total number of
shares purchased as
part of publicly
announced plans or
programs
|
Approximate dollar value of shares that may
yet be purchased under
the plans or programs
(in thousands)
(2)
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||||||
October 1, 2017 - October 31, 2017
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—
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|
$—
|
—
|
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$100,000
|
||||
November 1, 2017 - November 30, 2017
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2,345
|
|
$—
|
—
|
|
$100,000
|
||||
December 1, 2017 - December 31, 2017
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6,544
|
|
$—
|
—
|
|
$100,000
|
||||
Total
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8,889
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|
|
—
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(1)
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The shares repurchased during November and December 2017 shown in the table above are those repurchased pursuant to the provisions of employee benefit plans that require us to repurchase shares to satisfy employee statutory income tax withholding obligations.
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(2)
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On August 4, 2016, we announced that our board of directors authorized the repurchase of an indeterminate number of our shares of common stock in the open market at an aggregate market value of up to $100 million over the next twenty-four months. As of March 1, 2018, we have not made any share repurchases under the August 4, 2016 share repurchase authorization.
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(1)
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Assumes initial investment of $100 on June 30, 2015.
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For the Years Ended
|
||||||||||||||||||
(in thousands, except for per share amounts)
|
2017
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2016
|
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2015
|
|
2014
|
|
2013
|
||||||||||
Revenues
|
$
|
1,557,735
|
|
|
$
|
1,578,263
|
|
|
$
|
1,757,295
|
|
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$
|
1,486,029
|
|
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$
|
1,767,651
|
|
Income (loss) from continuing operations
|
(379,015
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)
|
|
(115,082
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)
|
|
16,534
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|
|
(11,890
|
)
|
|
140,478
|
|
|||||
Net income attributable to Babcock & Wilcox Enterprises, Inc.
|
(379,824
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)
|
|
(115,649
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)
|
|
19,141
|
|
|
(26,528
|
)
|
|
174,527
|
|
|||||
Basic earnings per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations per common share
|
(8.09
|
)
|
|
(2.31
|
)
|
|
0.30
|
|
|
(0.23
|
)
|
|
2.49
|
|
|||||
Net income attributable to Babcock & Wilcox Enterprises, Inc.
|
(8.09
|
)
|
|
(2.31
|
)
|
|
0.36
|
|
|
(0.49
|
)
|
|
3.10
|
|
|||||
Total assets (as of year end)
|
$
|
1,322,229
|
|
|
$
|
1,529,143
|
|
|
$
|
1,663,045
|
|
|
$
|
1,516,554
|
|
|
$
|
1,290,228
|
|
•
|
In 2017, we recorded goodwill impairment charges of
$86.9 million
($85.8 million net of tax), which included a
$50.0 million
charge in the Renewable reporting unit and a
$36.9 million
charge in the SPIG reporting unit. The reasons for the charges and related assumptions made by management are described in
Note 15
to the
consolidated financial statements included in Item 8
of this annual report.
|
•
|
Restructuring and spin costs were
$15.4 million
, $40.8 million, $14.9 million and $20.2 million in 2017, 2016, 2015, and 2014, respectively.
|
•
|
In 2017, as a result of a strategic change in our Indian joint venture due to the decline in forecasted market opportunities in India, we recorded an
$18.2 million
other-than-temporary-impairment of our investment in TBWES.
|
•
|
In 2016, we sold all of our interest in our Australian joint venture, Halley & Mellowes Pty. Ltd., for $18.0 million, resulting in a gain of $8.3 million.
|
•
|
In 2015, we recognized a $14.6 million impairment charge, primarily related to research and development facilities and equipment dedicated to activities that were determined not to be commercially viable.
|
•
|
We recognize actuarial gains (losses) related to our pension and postretirement benefit plans in earnings as a component of net periodic benefit cost. The effect of these adjustments for 2017, 2016, 2015, 2014 and 2013 and on pre-tax income was a gain (loss) of
$8.7 million
, $(24.1) million, $(40.2) million, $(101.3) million and $92.1 million, respectively.
|
•
|
Goodwill impairment charges totaling
$86.9 million
were recorded in 2017, of which
$50.0 million
related to our Renewable reporting unit and
$36.9 million
related to our SPIG reporting unit in the Industrial segment.
|
•
|
Intangible asset amortization expense was
$18.3 million
and $19.9 million in
2017
and 2016, respectively. We expect approximately
$12.4 million
of expense in the full year 2018.
|
•
|
Restructuring expense totaled
$14.2 million
,
$37.0 million
, and
$11.7 million
in 2017, 2016 and 2015, respectively. Restructuring expense includes accelerated depreciation and other activities related to manufacturing facility consolidation and outsourcing as well as reduction in force, consulting and other costs. In addition to savings already realized, we expect to realize savings of approximately
$45.0 million
in 2018.
|
•
|
Asset impairments in 2016 totaled $14.9 million and were associated with the long-lived assets at an owned coal-fired power plant. The non-cash impairment charge was classified in restructuring costs in 2016, and we sold the coal-fired power plant in 2017. B&W no longer owns any coal-fired power plants at December 31, 2017.
|
•
|
Asset impairments in 2015 totaled $14.6 million and were primarily related to research and development facilities and equipment used for activities that were determined not to be commercially viable. The non-cash impairment charge was reflected in loss on disposal of assets in 2015.
|
•
|
The outcome of the Arkansas River Power Authority ("ARPA") litigation on November 21, 2016 resulted in a net
$3.2 million
charge in our Power segment in the fourth quarter of 2016, which included a
$4.2 million
revenue reversal, a
$2.3 million
decrease in cost of operations and a
$1.3 million
increase in SG&A expenses. On July 21, 2017, the court awarded
$3.7 million
of pre-judgment interest, which we recorded as an increase in other accrued liabilities and interest expense in the second quarter of 2017. In December 2017, we reached an agreement in arbitration to settle all matters related to the ARPA litigation for
$7.0 million
. The arbitration agreement resulted in a
$1.6 million
reduction in our accrual, a
$0.8 million
increase in revenue and $0.8 million decrease in interest expense in the fourth quarter of 2017.
|
•
|
Litigation settlement charges of $9.6 million were incurred in 2015, including $1.8 million of legal costs and a $7.8 million reversal of Power segment revenues associated with the release of an accrued claims receivable balance as part of the legal settlement related to the Berlin Station project.
|
•
|
Expenses related to the spin-off from our former Parent were
$1.2 million
,
$3.8 million
and $3.3 million in 2017, 2016 and 2015, respectively. The costs were primarily attributable to employee retention awards.
|
•
|
Acquisition and integration costs included in SG&A totaled
$2.7 million
and
$5.1 million
in 2017 and 2016, respectively, related to the SPIG and Universal acquisitions .
|
•
|
Actuarially determined mark to market gains (losses) were
$8.7 million
,
$(24.1) million
and
$(40.2) million
in 2017, 2016 and 2015, respectively.
|
•
|
An other-than-temporary-impairment of our investment in TBWES of
$18.2 million
in 2017 was included in Equity in income of investees, reducing our remaining investment in TBWES to
$26.0 million
at December 31, 2017.
|
•
|
In 2016, we sold all of our joint venture interest in HMA for
$18.0 million
, resulting in a gain of
$8.3 million
that was included in Equity in income of investees.
|
•
|
Enactment of new United States tax legislation in the fourth quarter of 2017 resulted in
$62.4 million
of income tax expense from the revaluation of deferred tax assets to the newly enacted United States federal income tax rates.
|
|
Years ended December 31,
|
||||||||
(In thousands)
|
2017
|
2016
|
2015
|
||||||
Revenues:
|
|
|
|
||||||
Power segment
|
$
|
821,062
|
|
$
|
981,978
|
|
$
|
1,234,997
|
|
Renewable segment
|
347,198
|
|
349,172
|
|
338,603
|
|
|||
Industrial segment
|
397,791
|
|
253,613
|
|
183,695
|
|
|||
Eliminations
|
(8,316
|
)
|
(6,500
|
)
|
—
|
|
|||
|
1,557,735
|
|
1,578,263
|
|
1,757,295
|
|
|||
Gross profit (loss):
|
|
|
|
||||||
Power segment
|
191,999
|
|
233,550
|
|
247,632
|
|
|||
Renewable segment
|
(128,204
|
)
|
(68,109
|
)
|
57,682
|
|
|||
Industrial segment
|
41,383
|
|
50,726
|
|
54,826
|
|
|||
Intangible amortization expense included in cost of operations
|
(14,272
|
)
|
(15,842
|
)
|
(7,676
|
)
|
|||
Mark to market gain (loss) included in cost of operations
|
8,972
|
|
(21,208
|
)
|
(44,307
|
)
|
|||
|
99,878
|
|
179,117
|
|
308,157
|
|
|||
SG&A expenses
|
(255,545
|
)
|
(240,166
|
)
|
(240,296
|
)
|
|||
Goodwill impairment charges
|
(86,903
|
)
|
—
|
|
—
|
|
|||
Restructuring activities and spin-off transaction costs
|
(15,447
|
)
|
(40,807
|
)
|
(14,946
|
)
|
|||
Research and development costs
|
(9,412
|
)
|
(10,406
|
)
|
(16,543
|
)
|
|||
Intangible amortization expense included in SG&A
|
(3,980
|
)
|
(4,081
|
)
|
(3,769
|
)
|
|||
Mark to market gain (loss) included in SG&A
|
(274
|
)
|
(2,902
|
)
|
4,097
|
|
|||
Equity in income of investees
|
8,326
|
|
16,440
|
|
(242
|
)
|
|||
Impairment of equity method investment
|
(18,193
|
)
|
—
|
|
—
|
|
|||
Gains (losses) on asset disposals, net
|
(15
|
)
|
32
|
|
(14,597
|
)
|
|||
Operating income (loss)
|
$
|
(281,565
|
)
|
$
|
(102,773
|
)
|
$
|
21,861
|
|
•
|
Power
:
Focused on technologies and aftermarket services for steam-generating, environmental, and auxiliary equipment for power generation and other industrial applications.
|
•
|
Renewable
:
Focused on the supply of steam-generating systems, environmental and auxiliary equipment for the waste-to-energy and biomass power generation industries.
|
•
|
Industrial
:
Focused on custom-engineered cooling, environmental, acoustic, emission and filtration solutions, other industrial equipment and related aftermarket services.
|
•
|
maintaining our strong service presence in support of our installed fleet of steam generation equipment and expanding support of other OEM equipment;
|
•
|
selectively bidding contracts in emerging international markets needing state-of-the-art technology for fossil power generation and environmental systems;
|
•
|
growing sales of industrial steam generation products in the petrochemical and pulp & paper markets, such as heat recovery, natural gas and oil fired package boilers, due in part to lower fuel prices; and
|
•
|
reducing costs through a focus on operational efficiencies.
|
|
Year Ended December 31,
|
|
|
Year Ended December 31,
|
|
||||||||||||||
(In thousands)
|
2017
|
2016
|
$ Change
|
|
2016
|
2015
|
$ Change
|
||||||||||||
Revenues
|
$
|
821,062
|
|
$
|
981,978
|
|
$
|
(160,916
|
)
|
|
$
|
981,978
|
|
$
|
1,234,997
|
|
$
|
(253,019
|
)
|
Gross profit
|
$
|
191,999
|
|
$
|
233,550
|
|
$
|
(41,551
|
)
|
|
$
|
233,550
|
|
$
|
247,632
|
|
$
|
(14,082
|
)
|
Gross margin %
|
23
|
%
|
24
|
%
|
|
|
24
|
%
|
20
|
%
|
|
|
Year Ended December 31,
|
|
|
Year Ended December 31,
|
|
||||||||||||||
(in thousands, except percentages)
|
2017
|
2016
|
$ Change
|
|
2016
|
2015
|
$ Change
|
||||||||||||
Revenues
|
$
|
347,198
|
|
$
|
349,172
|
|
$
|
(1,974
|
)
|
|
$
|
349,172
|
|
$
|
338,603
|
|
$
|
10,569
|
|
Gross profit (loss)
|
$
|
(128,204
|
)
|
$
|
(68,109
|
)
|
$
|
(60,095
|
)
|
|
$
|
(68,109
|
)
|
$
|
57,682
|
|
$
|
(125,791
|
)
|
% of revenues
|
(37
|
)%
|
(20
|
)%
|
|
|
(20
|
)%
|
17
|
%
|
|
|
Year Ended December 31,
|
|
|
Year Ended December 31,
|
|
||||||||||||||
(In thousands)
|
2017
|
2016
|
$ Change
|
|
2016
|
2015
|
$ Change
|
||||||||||||
Revenues
|
$
|
397,791
|
|
$
|
253,613
|
|
$
|
144,178
|
|
|
$
|
253,613
|
|
$
|
183,695
|
|
$
|
69,918
|
|
Gross profit
|
$
|
41,383
|
|
$
|
50,726
|
|
$
|
(9,343
|
)
|
|
$
|
50,726
|
|
$
|
54,826
|
|
$
|
(4,100
|
)
|
Gross margin %
|
10
|
%
|
20
|
%
|
|
|
|
20
|
%
|
30
|
%
|
|
|
Year Ended December 31,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
B&W's share of income from equity method investees
|
$
|
8,326
|
|
$
|
8,116
|
|
$
|
(242
|
)
|
Gain on sale of HMA
|
—
|
|
8,324
|
|
—
|
|
|||
Other than temporary impairment of TBWES
|
(18,193
|
)
|
—
|
|
—
|
|
|||
|
$
|
(9,867
|
)
|
$
|
16,440
|
|
$
|
(242
|
)
|
|
Year Ended December 31,
|
||||||||
(In thousands, except for percentages)
|
2017
|
2016
|
2015
|
||||||
Income (loss) before income taxes
|
$
|
(314,199
|
)
|
$
|
(108,139
|
)
|
$
|
20,205
|
|
Income tax expense (benefit)
|
$
|
64,816
|
|
$
|
6,943
|
|
$
|
3,671
|
|
Effective tax rate
|
(20.6
|
)%
|
(6.4
|
)%
|
18.2
|
%
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
United States
|
$
|
(44,835
|
)
|
$
|
1,280
|
|
$
|
(20,748
|
)
|
Other than the United States
|
(269,364
|
)
|
(109,419
|
)
|
40,953
|
|
|||
Income (loss) before provision for (benefit from) income taxes
|
(314,199
|
)
|
(108,139
|
)
|
20,205
|
|
•
|
secured an equity commitment agreement on March 1, 2018 with a group of our existing stockholders to fully backstop our planned rights offering for the purpose of providing approximately
$182 million
of new capital, in the form of new equity, that together with
$35 million
of borrowings permitted by our United States revolving credit facility we intend to use to extinguish the outstanding balance of our second lien term loan facility and terminate the associated borrowing agreement;
|
•
|
mitigating, to the extent possible, the adverse impact of our net losses and financial covenant defaults over the past two years on our core operations, customers, vendors and banking relationships (e.g., providers of bank guarantees, letters of credit and surety bonds);
|
•
|
entered into employee retention agreements with key members of management;
|
•
|
dedicating project management resources to the performance, efficiency and timely completion of our existing and forecasted portfolio of contracts; and
|
•
|
selling certain assets or exiting certain markets, if we believe the opportunity would improve stockholder value and our liquidity outlook.
|
•
|
8.50
:1.0 for the quarter ended December 31, 2017,
|
•
|
7.00
:1.0 for the quarter ending March 31, 2018,
|
•
|
6.50
:1.0 for the quarters ending June 30, 2018 and September 30, 2018,
|
•
|
4.75
:1.0 for the quarter ending December 31, 2018,
|
•
|
3.00
:1.0 for the quarter ending March 31, 2019,
|
•
|
2.75
:1.0 for the quarters ending June 30, 2019 and September 30, 2019, and
|
•
|
2.50
:1.0 for the quarter ending December 31, 2019 and each quarter thereafter.
|
•
|
1.25
:1.0 for the quarter ended December 31, 2017,
|
•
|
1.15
:1.0 for the quarter ending March 31, 2018,
|
•
|
1.00
:1.0 for the quarter ending June 30, 2018,
|
•
|
0.85
:1.0 for the quarter ending September 30, 2018,
|
•
|
1.25
:1.0 for the quarter ending December 31, 2018,
|
•
|
1.50
:1.0 for the quarter ending March 31, 2019 and
|
•
|
2.00
:1.0 for the quarters ending June 30, 2019 and each quarter thereafter.
|
(in thousands)
|
Total
|
Less than 1 Year
|
1-3 Years
|
3-5 Years
|
After
5 Years
|
||||||||||
Operating lease payments
|
$
|
23,803
|
|
$
|
6,814
|
|
$
|
8,653
|
|
$
|
4,999
|
|
$
|
3,337
|
|
United States revolving credit facility
|
$
|
94,300
|
|
$
|
—
|
|
$
|
94,300
|
|
$
|
—
|
|
$
|
—
|
|
Second lien notes facility
|
$
|
195,884
|
|
$
|
—
|
|
$
|
195,884
|
|
$
|
—
|
|
$
|
—
|
|
Foreign revolving credit facility
|
$
|
9,173
|
|
$
|
9,173
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
ARPA litigation settlement
|
$
|
7,000
|
|
$
|
2,500
|
|
$
|
4,500
|
|
$
|
—
|
|
$
|
—
|
|
Total
|
Less than 1 Year
|
1-3 Years
|
3-5 Years
|
Thereafter
|
$779,082
|
$368,357
|
$374,566
|
$35,072
|
$1,088
|
a)
|
The contract or other evidence provides a legal basis for the claim; or a legal opinion has been obtained, stating that under the circumstances there is a reasonable basis to support the claim.
|
b)
|
Additional costs are caused by circumstances that were unforeseen at the contract date and are not the result of deficiencies in the contractor's performance.
|
c)
|
Costs associated with the claim are identifiable or otherwise determinable and are reasonable in view of the work performed.
|
d)
|
The evidence supporting the claim is objective and verifiable, not based on unsupported representations.
|
(In millions)
|
0.25% increase
|
|
0.25% decrease
|
||||
Discount rate
:
|
|
|
|
||||
Effect on ongoing net periodic benefit cost
(1)
|
$
|
(31.1
|
)
|
|
$
|
32.4
|
|
Effect on projected benefit obligation
|
(32.7
|
)
|
|
34.2
|
|
||
Return on assets:
|
|
|
|
||||
Effect on ongoing net periodic benefit cost
|
$
|
(2.2
|
)
|
|
$
|
2.2
|
|
|
Year Ended December 31,
|
||||||||
(in thousands, except per share amounts)
|
2017
|
2016
|
2015
|
||||||
Revenues
|
$
|
1,557,735
|
|
$
|
1,578,263
|
|
$
|
1,757,295
|
|
Costs and expenses:
|
|
|
|
||||||
Cost of operations
|
1,457,857
|
|
1,399,146
|
|
1,449,138
|
|
|||
Selling, general and administrative expenses
|
259,799
|
|
247,149
|
|
239,968
|
|
|||
Goodwill impairment charges
|
86,903
|
|
—
|
|
—
|
|
|||
Restructuring activities and spin-off transaction costs
|
15,447
|
|
40,807
|
|
14,946
|
|
|||
Research and development costs
|
9,412
|
|
10,406
|
|
16,543
|
|
|||
Losses (gains) on asset disposals, net
|
15
|
|
(32
|
)
|
14,597
|
|
|||
Total costs and expenses
|
1,829,433
|
|
1,697,476
|
|
1,735,192
|
|
|||
Equity in income (loss) and impairment of investees
|
(9,867
|
)
|
16,440
|
|
(242
|
)
|
|||
Operating income (loss)
|
(281,565
|
)
|
(102,773
|
)
|
21,861
|
|
|||
Other income (expense):
|
|
|
|
||||||
Interest income
|
510
|
|
810
|
|
618
|
|
|||
Interest expense
|
(26,305
|
)
|
(3,796
|
)
|
(2,338
|
)
|
|||
Other – net
|
(6,839
|
)
|
(2,380
|
)
|
64
|
|
|||
Total other income (expense)
|
(32,634
|
)
|
(5,366
|
)
|
(1,656
|
)
|
|||
Income (loss) before income tax expense
|
(314,199
|
)
|
(108,139
|
)
|
20,205
|
|
|||
Income tax expense
|
64,816
|
|
6,943
|
|
3,671
|
|
|||
Income (loss) from continuing operations
|
(379,015
|
)
|
(115,082
|
)
|
16,534
|
|
|||
Income (loss) from discontinued operations, net of tax
|
—
|
|
—
|
|
2,803
|
|
|||
Net income (loss)
|
(379,015
|
)
|
(115,082
|
)
|
19,337
|
|
|||
Net income attributable to noncontrolling interest
|
(809
|
)
|
(567
|
)
|
(196
|
)
|
|||
Net income (loss) attributable to stockholders
|
$
|
(379,824
|
)
|
$
|
(115,649
|
)
|
$
|
19,141
|
|
|
|
|
|
||||||
Basic earnings (loss) per share - continuing operations
|
$
|
(8.09
|
)
|
$
|
(2.31
|
)
|
$
|
0.31
|
|
Basic earnings (loss) per share - discontinued operations
|
—
|
|
—
|
|
0.05
|
|
|||
Basic earnings (loss) per share
|
$
|
(8.09
|
)
|
$
|
(2.31
|
)
|
$
|
0.36
|
|
|
|
|
|
||||||
Diluted earnings (loss) per share - continuing operations
|
$
|
(8.09
|
)
|
$
|
(2.31
|
)
|
$
|
0.30
|
|
Diluted earnings per share - discontinued operations
|
—
|
|
—
|
|
0.06
|
|
|||
Diluted earnings (loss) per share
|
$
|
(8.09
|
)
|
$
|
(2.31
|
)
|
$
|
0.36
|
|
|
|
|
|
||||||
Shares used in the computation of earnings per share:
|
|
|
|
||||||
Basic
|
46,935
|
|
50,129
|
|
53,487
|
|
|||
Diluted
|
46,935
|
|
50,129
|
|
53,709
|
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Net income (loss)
|
$
|
(379,015
|
)
|
$
|
(115,082
|
)
|
$
|
19,337
|
|
Other comprehensive income (loss):
|
|
|
|
||||||
Currency translation adjustments, net of taxes
|
16,150
|
|
(24,494
|
)
|
(19,459
|
)
|
|||
|
|
|
|
||||||
Derivative financial instruments:
|
|
|
|
||||||
Unrealized gains on derivative financial instruments
|
3,346
|
|
2,208
|
|
282
|
|
|||
Income taxes
|
142
|
|
162
|
|
(57
|
)
|
|||
Unrealized gains on derivative financial instruments, net of taxes
|
3,204
|
|
2,046
|
|
339
|
|
|||
Derivative financial instrument (gains) losses reclassified into net income
|
(2,503
|
)
|
(3,598
|
)
|
1,557
|
|
|||
Income taxes
|
(234
|
)
|
(568
|
)
|
424
|
|
|||
Reclassification adjustment for (gains) losses included in net income, net of taxes
|
(2,269
|
)
|
(3,030
|
)
|
1,133
|
|
|||
|
|
|
|
||||||
Benefit obligations:
|
|
|
|
||||||
Unrealized gains (losses) on benefit obligations
|
(152
|
)
|
12,202
|
|
462
|
|
|||
Income taxes
|
—
|
|
4,510
|
|
(57
|
)
|
|||
Unrealized gains (losses) on benefit obligations, net of taxes
|
(152
|
)
|
7,692
|
|
519
|
|
|||
Amortization of benefit plan costs (benefits)
|
(2,912
|
)
|
(254
|
)
|
1,042
|
|
|||
Income taxes
|
43
|
|
(404
|
)
|
1,237
|
|
|||
Amortization of benefit plan costs (benefits), net of taxes
|
(2,955
|
)
|
150
|
|
(195
|
)
|
|||
|
|
|
|
||||||
Other:
|
75
|
|
7
|
|
(22
|
)
|
|||
|
|
|
|
||||||
Other comprehensive income (loss)
|
14,053
|
|
(17,629
|
)
|
(17,685
|
)
|
|||
Total comprehensive income (loss)
|
(364,962
|
)
|
(132,711
|
)
|
1,652
|
|
|||
Comprehensive loss attributable to noncontrolling interest
|
(778
|
)
|
(575
|
)
|
(183
|
)
|
|||
Comprehensive income (loss) attributable to stockholders
|
$
|
(365,740
|
)
|
$
|
(133,286
|
)
|
$
|
1,469
|
|
(in thousands, except per share amount)
|
December 31, 2017
|
December 31, 2016
|
||||
Cash and cash equivalents
|
$
|
56,667
|
|
$
|
95,887
|
|
Restricted cash and cash equivalents
|
25,980
|
|
27,770
|
|
||
Accounts receivable – trade, net
|
291,704
|
|
282,347
|
|
||
Accounts receivable – other
|
78,970
|
|
73,756
|
|
||
Contracts in progress
|
161,220
|
|
166,010
|
|
||
Inventories
|
82,162
|
|
85,807
|
|
||
Other current assets
|
35,554
|
|
45,957
|
|
||
Total current assets
|
732,257
|
|
777,534
|
|
||
Net property, plant and equipment
|
141,931
|
|
133,637
|
|
||
Goodwill
|
204,398
|
|
267,395
|
|
||
Deferred income taxes
|
97,826
|
|
163,388
|
|
||
Investments in unconsolidated affiliates
|
43,278
|
|
98,682
|
|
||
Intangible assets
|
76,780
|
|
71,039
|
|
||
Other assets
|
25,759
|
|
17,468
|
|
||
Total assets
|
$
|
1,322,229
|
|
$
|
1,529,143
|
|
|
|
|
||||
Foreign revolving credit facilities
|
$
|
9,173
|
|
$
|
14,241
|
|
Second lien term loan facility
|
160,141
|
|
—
|
|
||
Accounts payable
|
225,234
|
|
220,737
|
|
||
Accrued employee benefits
|
30,153
|
|
35,497
|
|
||
Advance billings on contracts
|
181,070
|
|
210,642
|
|
||
Accrued warranty expense
|
39,020
|
|
40,467
|
|
||
Other accrued liabilities
|
99,536
|
|
95,954
|
|
||
Total current liabilities
|
744,327
|
|
617,538
|
|
||
United States revolving credit facility
|
94,300
|
|
9,800
|
|
||
Pension and other accumulated postretirement benefit liabilities
|
256,390
|
|
301,259
|
|
||
Other noncurrent liabilities
|
36,509
|
|
39,595
|
|
||
Total liabilities
|
1,131,526
|
|
968,192
|
|
||
Commitments and contingencies
|
|
|
||||
Stockholders' equity:
|
|
|
||||
Common stock, par value $0.01 per share, authorized 200,000 shares; issued and outstanding 44,065 and 48,688 shares at December 31, 2017 and 2016, respectively
|
499
|
|
544
|
|
||
Capital in excess of par value
|
800,968
|
|
806,589
|
|
||
Treasury stock at cost, 5,681 and 5,592 shares at December 31, 2017 and December 31, 2016, respectively
|
(104,785
|
)
|
(103,818
|
)
|
||
Retained deficit
|
(492,150
|
)
|
(114,684
|
)
|
||
Accumulated other comprehensive loss
|
(22,429
|
)
|
(36,482
|
)
|
||
Stockholders' equity attributable to shareholders
|
182,103
|
|
552,149
|
|
||
Noncontrolling interest
|
8,600
|
|
8,802
|
|
||
Total stockholders' equity
|
190,703
|
|
560,951
|
|
||
Total liabilities and stockholders' equity
|
$
|
1,322,229
|
|
$
|
1,529,143
|
|
|
Common Stock
|
Capital In
Excess of Par Value |
Treasury Stock
|
Retained
Earnings |
Accumulated
Other Comprehensive Income (Loss) |
Former Parent Investment
|
Noncontrolling
Interest |
Total
Stockholders’ Equity |
||||||||||||||||||
|
||||||||||||||||||||||||||
|
Shares
|
Par Value
|
||||||||||||||||||||||||
|
|
(in thousands, except share and per share amounts)
|
||||||||||||||||||||||||
December 31, 2014 Balance
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
10,374
|
|
$
|
676,036
|
|
$
|
1,027
|
|
$
|
687,437
|
|
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
965
|
|
—
|
|
18,176
|
|
196
|
|
19,337
|
|
||||||||
Currency translation adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(19,446
|
)
|
—
|
|
(13
|
)
|
(19,459
|
)
|
||||||||
Derivative financial instruments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,472
|
|
—
|
|
—
|
|
1,472
|
|
||||||||
Defined benefit obligations
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
324
|
|
—
|
|
—
|
|
324
|
|
||||||||
Available-for-sale investments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(22
|
)
|
—
|
|
—
|
|
(22
|
)
|
||||||||
Stock-based compensation
|
137
|
|
17
|
|
7,772
|
|
(1,143
|
)
|
—
|
|
—
|
|
6
|
|
—
|
|
6,652
|
|
||||||||
Repurchased shares
|
(1,376
|
)
|
(14
|
)
|
|
(24,265
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(24,279
|
)
|
|||||||||
Dividends to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(491
|
)
|
(491
|
)
|
||||||||
Net transfers from Parent
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
125,295
|
|
—
|
|
125,295
|
|
||||||||
Distribution of Nuclear Energy segment to former Parent
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(11,555
|
)
|
(36,284
|
)
|
—
|
|
(47,839
|
)
|
||||||||
Reclassification of former Parent investment to capital in excess of par value and common stock
|
53,720
|
|
537
|
|
782,692
|
|
—
|
|
—
|
|
—
|
|
(783,229
|
)
|
—
|
|
—
|
|
||||||||
December 31, 2015 Balance
|
52,481
|
|
$
|
540
|
|
$
|
790,464
|
|
$
|
(25,408
|
)
|
$
|
965
|
|
$
|
(18,853
|
)
|
$
|
—
|
|
$
|
719
|
|
$
|
748,427
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(115,649
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
567
|
|
$
|
(115,082
|
)
|
Currency translation adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(24,494
|
)
|
—
|
|
8
|
|
(24,486
|
)
|
||||||||
Derivative financial instruments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(984
|
)
|
—
|
|
—
|
|
(984
|
)
|
||||||||
Defined benefit obligations
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,842
|
|
—
|
|
—
|
|
7,842
|
|
||||||||
SPIG Acquisition
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,754
|
|
7,754
|
|
||||||||
Available-for-sale investments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7
|
|
—
|
|
—
|
|
7
|
|
||||||||
Stock-based compensation charges
|
423
|
|
46
|
|
16,125
|
|
(2,731
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
13,440
|
|
||||||||
Repurchased shares
|
(4,216
|
)
|
(42
|
)
|
—
|
|
(75,679
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(75,721
|
)
|
||||||||
Dividends to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(246
|
)
|
(246
|
)
|
||||||||
December 31, 2016 Balance
|
48,688
|
|
$
|
544
|
|
$
|
806,589
|
|
$
|
(103,818
|
)
|
$
|
(114,684
|
)
|
$
|
(36,482
|
)
|
$
|
—
|
|
$
|
8,802
|
|
$
|
560,951
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(379,824
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
809
|
|
$
|
(379,015
|
)
|
Currency translation adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
16,150
|
|
—
|
|
(31
|
)
|
16,119
|
|
||||||||
Derivative financial instruments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
935
|
|
—
|
|
—
|
|
935
|
|
||||||||
Defined benefit obligations
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3,107
|
)
|
—
|
|
—
|
|
(3,107
|
)
|
||||||||
Available-for-sale investments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
75
|
|
—
|
|
—
|
|
75
|
|
||||||||
Stock-based compensation charges
|
212
|
|
3
|
|
11,005
|
|
(967
|
)
|
2,358
|
|
—
|
|
—
|
|
—
|
|
12,399
|
|
||||||||
Common stock retirement
|
(4,835
|
)
|
(48
|
)
|
(16,626
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(16,674
|
)
|
||||||||
Dividends to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(980
|
)
|
(980
|
)
|
||||||||
December 31, 2017 Balance
|
44,065
|
|
$
|
499
|
|
$
|
800,968
|
|
$
|
(104,785
|
)
|
$
|
(492,150
|
)
|
$
|
(22,429
|
)
|
$
|
—
|
|
$
|
8,600
|
|
$
|
190,703
|
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|||||||
Net income (loss)
|
$
|
(379,015
|
)
|
$
|
(115,082
|
)
|
$
|
19,337
|
|
Non-cash items included in net income (loss):
|
|
|
|
||||||
Depreciation and amortization of long-lived assets
|
40,138
|
|
39,583
|
|
34,932
|
|
|||
Amortization of debt issuance costs and debt discount
|
6,407
|
|
1,244
|
|
622
|
|
|||
(Income) loss from equity method investees
|
(8,326
|
)
|
(16,440
|
)
|
242
|
|
|||
Goodwill impairment charges
|
86,903
|
|
—
|
|
—
|
|
|||
Other than temporary impairment of equity method investment in TBWES
|
18,193
|
|
—
|
|
—
|
|
|||
Losses on asset disposals and impairments
|
807
|
|
14,938
|
|
16,881
|
|
|||
Write-off of accrued claims receivable, net
|
—
|
|
—
|
|
7,832
|
|
|||
Provision for (benefit from) deferred income taxes
|
50,304
|
|
(9,000
|
)
|
(32,121
|
)
|
|||
Mark to market losses (gains) and prior service cost amortization for pension and postretirement plans
|
(11,608
|
)
|
36,346
|
|
40,611
|
|
|||
Stock-based compensation, net of associated income taxes
|
11,813
|
|
16,129
|
|
7,773
|
|
|||
Changes in assets and liabilities, net of effects of acquisitions:
|
|
|
|
||||||
Accounts receivable
|
9,414
|
|
46,755
|
|
(54,807
|
)
|
|||
Dividends from equity method investees
|
50,134
|
|
12,160
|
|
20,830
|
|
|||
Accrued insurance receivable
|
—
|
|
(15,000
|
)
|
—
|
|
|||
Contracts in progress and advance billings on contracts
|
(24,001
|
)
|
(13,259
|
)
|
62,971
|
|
|||
Inventories
|
11,874
|
|
2,869
|
|
6,060
|
|
|||
Income taxes
|
26,618
|
|
22,593
|
|
9,275
|
|
|||
Accounts payable
|
(14,664
|
)
|
4,542
|
|
17,863
|
|
|||
Accrued and other current liabilities
|
(12,450
|
)
|
25,110
|
|
11,464
|
|
|||
Pension liabilities, accrued postretirement benefits and employee benefits
|
(44,584
|
)
|
(46,973
|
)
|
(2,336
|
)
|
|||
Other, net
|
(7,790
|
)
|
(4,242
|
)
|
2,970
|
|
|||
Net cash from operating activities
|
(189,833
|
)
|
2,273
|
|
170,399
|
|
|||
Cash flows from investing activities:
|
|
|
|
||||||
Decrease in restricted cash and cash equivalents
|
(2,259
|
)
|
9,374
|
|
6,298
|
|
|||
Investment in equity method investees
|
—
|
|
(26,256
|
)
|
(7,424
|
)
|
|||
Purchase of property, plant and equipment
|
(14,278
|
)
|
(22,450
|
)
|
(35,397
|
)
|
|||
Acquisition of business, net of cash acquired
|
(52,547
|
)
|
(144,780
|
)
|
—
|
|
|||
Proceeds from sale of equity method investment in a joint venture
|
—
|
|
17,995
|
|
—
|
|
|||
Purchases of available-for-sale securities
|
(29,252
|
)
|
(45,217
|
)
|
(14,008
|
)
|
|||
Sales and maturities of available-for-sale securities
|
35,484
|
|
29,846
|
|
5,266
|
|
|||
Other, net
|
708
|
|
646
|
|
(587
|
)
|
|||
Net cash from investing activities
|
$
|
(62,144
|
)
|
$
|
(180,842
|
)
|
$
|
(45,852
|
)
|
|
|
|
|
||||||
|
|
|
|
||||||
|
|
|
|
||||||
|
|
|
|
||||||
|
|
|
|
||||||
|
|
|
|
||||||
|
|
|
|
BABCOCK & WILCOX ENTERPRISES, INC.
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)
|
||||||||||
|
Year Ended December 31,
|
|||||||||
(in thousands)
|
2017
|
2016
|
2015
|
|||||||
Cash flows from financing activities:
|
|
|
|
|||||||
Borrowings under our United States revolving credit facility
|
$
|
629,722
|
|
$
|
205,600
|
|
$
|
—
|
|
|
Repayments of our United States revolving credit facility
|
(545,222
|
)
|
(195,800
|
)
|
—
|
|
||||
Proceeds from our second lien term loan facility, net of $34.2 million discount
|
161,674
|
|
—
|
|
—
|
|
||||
Borrowings under our foreign revolving credit facilities
|
273
|
|
5,674
|
|
—
|
|
||||
Repayments of our foreign revolving credit facilities
|
(6,597
|
)
|
(20,248
|
)
|
(1,080
|
)
|
||||
Common stock repurchase from related party
|
(16,674
|
)
|
—
|
|
—
|
|
||||
Net transfers from our former Parent
|
—
|
|
—
|
|
80,589
|
|
||||
Shares of our common stock returned to treasury stock
|
(967
|
)
|
(78,410
|
)
|
(25,408
|
)
|
||||
Debt issuance costs
|
(15,002
|
)
|
—
|
|
—
|
|
||||
Other
|
(1,082
|
)
|
(246
|
)
|
(491
|
)
|
||||
Net cash from financing activities
|
206,125
|
|
(83,430
|
)
|
53,610
|
|
||||
Effects of exchange rate changes on cash
|
6,632
|
|
(7,306
|
)
|
(6,407
|
)
|
||||
Cash flow from continuing operations
|
(39,220
|
)
|
(269,305
|
)
|
171,750
|
|
||||
Cash flows from discontinued operations:
|
|
|
|
|||||||
Operating cash flows from discontinued operations, net
|
—
|
|
—
|
|
(25,194
|
)
|
||||
Investing cash flows from discontinued operations, net
|
—
|
|
—
|
|
(23
|
)
|
||||
Net cash flows from discontinued operations
|
—
|
|
—
|
|
(25,217
|
)
|
||||
Net increase (decrease) in cash and equivalents
|
(39,220
|
)
|
(269,305
|
)
|
146,533
|
|
||||
Cash and equivalents, beginning of period
|
95,887
|
|
365,192
|
|
218,659
|
|
||||
Cash and equivalents, end of period
|
$
|
56,667
|
|
$
|
95,887
|
|
$
|
365,192
|
|
•
|
secured an equity commitment agreement on March 1, 2018 with a group of our existing stockholders to fully backstop our planned rights offering for the purpose of providing approximately
$182 million
of new capital, in the form of new equity, that together with
$35 million
of borrowings permitted by our United States revolving credit facility we intend to use to extinguish the outstanding balance of our second lien term loan facility and terminate the associated borrowing agreement;
|
•
|
mitigating, to the extent possible, the adverse impact of our net losses and financial covenant defaults over the past two years on our core operations, customers, vendors and banking relationships (e.g., providers of bank guarantees, letters of credit and surety bonds);
|
•
|
entered into employee retention agreements with key members of management;
|
•
|
dedicating project management resources to the performance, efficiency and timely completion of our existing and forecasted portfolio of contracts; and
|
•
|
selling certain assets or exiting certain markets, if we believe the opportunity would improve stockholder value and our liquidity outlook.
|
•
|
Power
:
Focused on technologies and aftermarket services for steam-generating, environmental, and auxiliary equipment for power generation and other industrial applications.
|
•
|
Renewable
:
Focused on the supply of steam-generating systems, environmental and auxiliary equipment for the waste-to-energy and biomass power generation industries.
|
•
|
Industrial
:
Focused on custom-engineered cooling, environmental, acoustic, emission and filtration solutions, other industrial equipment and related aftermarket services.
|
a)
|
The contract or other evidence provides a legal basis for the claim; or a legal opinion has been obtained, stating that under the circumstances there is a reasonable basis to support the claim.
|
b)
|
Additional costs are caused by circumstances that were unforeseen at the contract date and are not the result of deficiencies in the contractor's performance.
|
c)
|
Costs associated with the claim are identifiable or otherwise determinable and are reasonable in view of the work performed.
|
d)
|
The evidence supporting the claim is objective and verifiable, not based on unsupported representations.
|
|
Year Ended December 31,
|
||||||||
(in thousands, except per share amounts)
|
2017
|
2016
|
2015
|
||||||
Income (loss) from continuing operations
|
$
|
(379,824
|
)
|
(115,649
|
)
|
$
|
16,338
|
|
|
Income (loss) from discontinued operations, net of tax
|
—
|
|
—
|
|
2,803
|
|
|||
Net income (loss) attributable to shareholders
|
$
|
(379,824
|
)
|
$
|
(115,649
|
)
|
$
|
19,141
|
|
|
|
|
|
||||||
Weighted average shares used to calculate basic earnings per share
|
46,935
|
|
50,129
|
|
53,487
|
|
|||
Dilutive effect of stock options, restricted stock and performance shares
|
—
|
|
—
|
|
222
|
|
|||
Weighted average shares used to calculate diluted earnings per share
|
46,935
|
|
50,129
|
|
53,709
|
|
|||
|
|
|
|
||||||
Basic earnings (loss) per share:
|
|
|
|
||||||
Continuing operations
|
$
|
(8.09
|
)
|
$
|
(2.31
|
)
|
$
|
0.31
|
|
Discontinued operations
|
—
|
|
—
|
|
0.05
|
|
|||
Basic earnings (loss) per share:
|
$
|
(8.09
|
)
|
$
|
(2.31
|
)
|
$
|
0.36
|
|
|
|
|
|
||||||
Diluted earnings (loss) per share:
|
|
|
|
||||||
Continuing operations
|
(8.09
|
)
|
(2.31
|
)
|
0.30
|
|
|||
Discontinued operations
|
—
|
|
—
|
|
0.06
|
|
|||
Diluted earnings (loss) per share:
|
$
|
(8.09
|
)
|
$
|
(2.31
|
)
|
$
|
0.36
|
|
•
|
Power segment
:
focused on the supply of and aftermarket services for steam-generating, environmental and auxiliary equipment for power generation and other industrial applications.
|
•
|
Renewable segment
:
focused on the supply of steam-generating systems, environmental and auxiliary equipment for the waste-to-energy and biomass power generation industries.
|
•
|
Industrial segment
:
focused on custom-engineered cooling, environmental and other industrial equipment along with related aftermarket services.
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
REVENUES
|
|
|
|
||||||
Power segment
|
|
|
|
||||||
Retrofits & continuous emissions monitoring systems
|
$
|
306,758
|
|
$
|
392,854
|
|
$
|
427,378
|
|
New build utility and environmental
|
155,886
|
|
292,302
|
|
403,981
|
|
|||
Aftermarket parts and field engineering services
|
277,129
|
|
292,535
|
|
304,923
|
|
|||
Industrial steam generation
|
123,127
|
|
107,267
|
|
219,379
|
|
|||
Eliminations
|
(41,838
|
)
|
(102,980
|
)
|
(120,664
|
)
|
|||
|
821,062
|
|
981,978
|
|
1,234,997
|
|
|||
Renewable segment
|
|
|
|
||||||
Renewable new build and services
|
282,228
|
|
284,684
|
|
277,326
|
|
|||
Operations and maintenance
|
64,970
|
|
65,814
|
|
63,437
|
|
|||
Eliminations
|
—
|
|
(1,326
|
)
|
(2,160
|
)
|
|||
|
347,198
|
|
349,172
|
|
338,603
|
|
|||
Industrial segment
|
|
|
|
||||||
Aftermarket parts and services
|
117,970
|
|
81,690
|
|
61,350
|
|
|||
Environmental solutions
|
138,722
|
|
74,726
|
|
90,343
|
|
|||
Cooling systems
|
126,683
|
|
73,797
|
|
—
|
|
|||
Engineered products
|
14,416
|
|
23,400
|
|
32,002
|
|
|||
|
397,791
|
|
253,613
|
|
183,695
|
|
|||
|
|
|
|
||||||
Eliminations
|
(8,316
|
)
|
(6,500
|
)
|
—
|
|
|||
|
$
|
1,557,735
|
|
$
|
1,578,263
|
|
$
|
1,757,295
|
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
GROSS PROFIT (LOSS)
|
|
|
|
||||||
Power segment
|
$
|
191,999
|
|
$
|
233,550
|
|
$
|
247,632
|
|
Renewable segment
|
(128,204
|
)
|
(68,109
|
)
|
57,682
|
|
|||
Industrial segment
|
41,383
|
|
50,726
|
|
54,826
|
|
|||
Intangible amortization expense included in cost of operations
|
(14,272
|
)
|
(15,842
|
)
|
(7,676
|
)
|
|||
Mark to market gain (loss) included in cost of operations
|
8,972
|
|
(21,208
|
)
|
(44,307
|
)
|
|||
|
99,878
|
|
179,117
|
|
308,157
|
|
|||
Selling, general and administrative ("SG&A") expenses
|
(255,545
|
)
|
(240,166
|
)
|
(240,296
|
)
|
|||
Goodwill impairment charges
|
(86,903
|
)
|
—
|
|
—
|
|
|||
Restructuring activities and spin-off transaction costs
|
(15,447
|
)
|
(40,807
|
)
|
(14,946
|
)
|
|||
Research and development costs
|
(9,412
|
)
|
(10,406
|
)
|
(16,543
|
)
|
|||
Intangible amortization expense included in SG&A
|
(3,980
|
)
|
(4,081
|
)
|
(3,769
|
)
|
|||
Mark to market gain (loss) included in SG&A
|
(274
|
)
|
(2,902
|
)
|
4,097
|
|
|||
Equity in income of investees
|
8,326
|
|
16,440
|
|
(242
|
)
|
|||
Impairment of equity method investment
|
(18,193
|
)
|
—
|
|
—
|
|
|||
Gains (losses) on asset disposals, net
|
(15
|
)
|
32
|
|
(14,597
|
)
|
|||
Operating income (loss)
|
$
|
(281,565
|
)
|
$
|
(102,773
|
)
|
$
|
21,861
|
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
DEPRECIATION AND AMORTIZATION
|
|
|
|
||||||
Power segment
|
$
|
9,222
|
|
$
|
11,231
|
|
$
|
18,532
|
|
Renewable segment
|
3,208
|
|
2,711
|
|
2,567
|
|
|||
Industrial segment
|
20,293
|
|
19,073
|
|
10,345
|
|
|||
Segment depreciation and amortization
|
32,723
|
|
33,015
|
|
31,444
|
|
|||
Corporate
|
7,415
|
|
6,568
|
|
3,488
|
|
|||
Total depreciation and amortization
|
$
|
40,138
|
|
$
|
39,583
|
|
$
|
34,932
|
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
REVENUES
(1)
|
|
|
|
||||||
United States
|
$
|
757,159
|
|
$
|
851,955
|
|
$
|
1,034,653
|
|
United Kingdom
|
194,456
|
|
201,221
|
|
126,285
|
|
|||
Canada
|
108,045
|
|
74,629
|
|
134,276
|
|
|||
Denmark
|
82,843
|
|
54,722
|
|
116,064
|
|
|||
China
|
54,883
|
|
33,898
|
|
41,921
|
|
|||
Egypt
|
43,148
|
|
35,878
|
|
—
|
|
|||
South Korea
|
41,217
|
|
44,660
|
|
4,358
|
|
|||
Sweden
|
39,891
|
|
24,809
|
|
18,302
|
|
|||
Germany
|
28,333
|
|
29,559
|
|
19,233
|
|
|||
Vietnam
|
15,771
|
|
55,265
|
|
46,803
|
|
|||
Dominican Republic
|
15,144
|
|
21,366
|
|
82,916
|
|
|||
Saudi Arabia
|
13,978
|
|
2,408
|
|
4,220
|
|
|||
South Africa
|
12,453
|
|
4,097
|
|
4,486
|
|
|||
Italy
|
11,663
|
|
7,862
|
|
4,671
|
|
|||
Netherlands
|
8,989
|
|
3,348
|
|
4,651
|
|
|||
Finland
|
8,713
|
|
5,756
|
|
6,113
|
|
|||
Bolivia
|
8,694
|
|
—
|
|
—
|
|
|||
Oman
|
7,683
|
|
—
|
|
—
|
|
|||
Indonesia
|
6,909
|
|
6,723
|
|
1,730
|
|
|||
Nigeria
|
6,766
|
|
—
|
|
—
|
|
|||
India
|
6,441
|
|
6,856
|
|
13,108
|
|
|||
Aggregate of all other countries,
each with less than $5 million in revenues
|
84,556
|
|
113,251
|
|
93,505
|
|
|||
|
$
|
1,557,735
|
|
$
|
1,578,263
|
|
$
|
1,757,295
|
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
NET PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
||||||
United States
|
$
|
79,681
|
|
$
|
75,368
|
|
$
|
88,840
|
|
Mexico
|
26,503
|
|
22,594
|
|
24,643
|
|
|||
China
|
13,373
|
|
13,460
|
|
13,956
|
|
|||
United Kingdom
|
6,604
|
|
6,337
|
|
8,070
|
|
|||
Denmark
|
7,953
|
|
6,749
|
|
6,265
|
|
|||
Aggregate of all other countries, each with less than
$5 million of net property, plant and equipment
|
7,817
|
|
9,129
|
|
3,943
|
|
|||
|
$
|
141,931
|
|
$
|
133,637
|
|
$
|
145,717
|
|
(in thousands)
|
Acquisition
date fair values
|
||
Cash
|
$
|
4,379
|
|
Accounts receivable
|
11,270
|
|
|
Contracts in progress
|
3,167
|
|
|
Inventories
|
4,585
|
|
|
Other assets
|
579
|
|
|
Property, plant and equipment
|
16,692
|
|
|
Goodwill
|
14,413
|
|
|
Identifiable intangible assets
|
19,500
|
|
|
Deferred income tax assets
|
935
|
|
|
Current liabilities
|
(10,833
|
)
|
|
Other noncurrent liabilities
|
(1,423
|
)
|
|
Deferred income tax liabilities
|
(6,338
|
)
|
|
Net acquisition cost
|
$
|
56,926
|
|
|
Fair value (in thousands)
|
Weighted average
estimated useful life
(in years)
|
||
Customer relationships
|
$
|
10,800
|
|
15
|
Backlog
|
1,700
|
|
1
|
|
Trade names / trademarks
|
3,000
|
|
20
|
|
Technology
|
4,000
|
|
7
|
|
Total amortizable intangible assets
|
$
|
19,500
|
|
|
|
Year Ended
|
||
(in thousands)
|
December 31, 2016
|
||
Revenues
|
$
|
1,660,986
|
|
Net income (loss) attributable to B&W
|
(113,940
|
)
|
|
Basic earnings per common share
|
(2.27
|
)
|
|
Diluted earnings per common share
|
(2.27
|
)
|
•
|
A net increase in amortization expense related to timing of amortization of the fair value of identifiable intangible assets acquired of
$2.8 million
in the year ended
December 31, 2016
.
|
•
|
Elimination of the historical interest expense recognized by Universal of
$0.4 million
in the year ended
December 31, 2016
.
|
•
|
Elimination of
$2.1 million
in transaction related costs recognized in the year ended
December 31, 2016
.
|
(in thousands)
|
Acquisition
date fair values
|
||
Cash
|
$
|
25,994
|
|
Accounts receivable
|
58,843
|
|
|
Contracts in progress
|
61,155
|
|
|
Inventories
|
2,554
|
|
|
Other assets
|
7,341
|
|
|
Property, plant and equipment
|
6,104
|
|
|
Goodwill
|
72,401
|
|
|
Identifiable intangible assets
|
55,164
|
|
|
Deferred income tax assets
|
5,550
|
|
|
Revolving debt
|
(27,530
|
)
|
|
Current liabilities
|
(56,323
|
)
|
|
Advance billings on contracts
|
(15,226
|
)
|
|
Other noncurrent liabilities
|
(379
|
)
|
|
Deferred income tax liabilities
|
(17,120
|
)
|
|
Noncontrolling interest in joint venture
|
(7,754
|
)
|
|
Net acquisition cost
|
$
|
170,774
|
|
(in thousands)
|
Fair value (in thousands)
|
|
Weighted average
estimated useful life
(in years)
|
||
Customer relationships
|
$
|
12,217
|
|
|
9
|
Backlog
|
17,769
|
|
|
2
|
|
Trade names / trademarks
|
8,885
|
|
|
20
|
|
Technology
|
14,438
|
|
|
10
|
|
Non-compete agreements
|
1,666
|
|
|
3
|
|
Internally-developed software
|
189
|
|
|
3
|
|
Total amortizable intangible assets
|
$
|
55,164
|
|
|
|
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
|
2016
|
|
2015
|
||||
Revenues
|
|
$
|
1,663,126
|
|
|
$
|
1,941,987
|
|
Net income (loss) attributable to B&W
|
|
(111,500
|
)
|
|
12,047
|
|
||
Basic earnings per common share
|
|
(2.22
|
)
|
|
0.23
|
|
||
Diluted earnings per common share
|
|
(2.22
|
)
|
|
0.22
|
|
•
|
A net increase (decrease) in amortization expense related to timing of amortization of the fair value of identifiable intangible assets acquired of
$6.5 million
and
$18.6 million
in the years ended December 31, 2016 and 2015, respectively.
|
•
|
Elimination of the historical interest expense recognized by SPIG of
$0.5 million
and
$0.7 million
in the years ended ended December 31, 2016 and 2015, respectively.
|
•
|
Elimination of
$3.5 million
and
$0.2 million
in transaction related costs recognized in the years ended December 31, 2016 and 2015, respectively.
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Increases in estimates for percentage-of-completion contracts
|
$
|
21,638
|
|
$
|
42,368
|
|
$
|
36,653
|
|
Decreases in estimates for percentage-of-completion contracts
|
(174,906
|
)
|
(149,169
|
)
|
(36,235
|
)
|
|||
Net changes in estimates for percentage-of-completion contracts
|
$
|
(153,268
|
)
|
$
|
(106,801
|
)
|
$
|
418
|
|
|
December 31,
|
|||||
(in thousands)
|
2017
|
2016
|
||||
Included in contracts in progress:
|
|
|
||||
Costs incurred less costs of revenue recognized
|
$
|
80,645
|
|
$
|
96,210
|
|
Revenues recognized less billings to customers
|
80,575
|
|
69,800
|
|
||
Contracts in progress
|
$
|
161,220
|
|
$
|
166,010
|
|
Included in advance billings on contracts:
|
|
|
||||
Billings to customers less revenues recognized
|
$
|
177,953
|
|
$
|
199,480
|
|
Costs of revenue recognized less cost incurred
|
3,117
|
|
11,162
|
|
||
Advance billings on contracts
|
$
|
181,070
|
|
$
|
210,642
|
|
|
December 31,
|
|||||
(in thousands)
|
2017
|
2016
|
||||
Retainage expected to be collected within one year
|
$
|
14,572
|
|
$
|
18,843
|
|
Retainage expected to be collected after one year
|
6,112
|
|
4,583
|
|
||
Total retainage
|
$
|
20,684
|
|
$
|
23,426
|
|
|
December 31,
|
|||||
(in thousands)
|
2017
|
2016
|
||||
Current assets
|
$
|
322,956
|
|
$
|
335,577
|
|
Noncurrent assets
|
137,081
|
|
126,958
|
|
||
Total assets
|
460,037
|
|
462,535
|
|
||
Current liabilities
|
342,178
|
|
231,150
|
|
||
Noncurrent liabilities
|
24,474
|
|
40,537
|
|
||
Owners' equity
|
93,385
|
|
190,848
|
|
||
Total liabilities and equity
|
$
|
460,037
|
|
$
|
462,535
|
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Revenues
|
$
|
346,459
|
|
$
|
488,101
|
|
$
|
475,459
|
|
Gross profit
|
32,682
|
|
76,986
|
|
69,021
|
|
|||
|
|
|
|
||||||
Income before provision for income taxes
|
(10,626
|
)
|
19,529
|
|
3,072
|
|
|||
Provision for income taxes
|
1,907
|
|
3,715
|
|
4,500
|
|
|||
Net income
|
$
|
(12,533
|
)
|
$
|
15,814
|
|
$
|
(1,428
|
)
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Equity income based on stated ownership percentages
|
$
|
7,530
|
|
$
|
7,898
|
|
$
|
(542
|
)
|
TBWES other than temporary impairment
|
(18,193
|
)
|
—
|
|
—
|
|
|||
Gain on sale of our interest in HMA
|
—
|
|
8,324
|
|
—
|
|
|||
All other adjustments due to amortization of basis differences,
timing of GAAP adjustments and other adjustments
|
796
|
|
218
|
|
300
|
|
|||
Equity in income of investees
|
$
|
(9,867
|
)
|
$
|
16,440
|
|
$
|
(242
|
)
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Sales to
|
$
|
7,143
|
|
$
|
17,220
|
|
$
|
18,014
|
|
Purchases from
|
12,470
|
|
32,490
|
|
45,397
|
|
|||
Dividends received
(1)
|
50,134
|
|
12,160
|
|
20,830
|
|
|||
Capital contributions
(2)
|
—
|
|
26,256
|
|
7,424
|
|
|
Year ended December 31,
|
|||||
(in thousands)
|
2017
|
2016
|
||||
Balance at beginning of period
|
$
|
2,253
|
|
$
|
740
|
|
Restructuring expense
|
13,923
|
|
21,939
|
|
||
Payments
|
(13,857
|
)
|
(20,426
|
)
|
||
Balance at December 31
|
$
|
2,319
|
|
$
|
2,253
|
|
|
Year Ended December 31,
|
|||
|
2016
|
2015
|
||
Risk-free interest rate
|
1.14
|
%
|
1.38
|
%
|
Expected volatility
|
25
|
%
|
28
|
%
|
Expected life of the option in years
|
3.95
|
|
3.96
|
|
Expected dividend yield
|
—
|
%
|
—
|
%
|
(share data in thousands)
|
Number of Shares
|
Weighted-Average
Exercise Price
|
Weighted-Average
Remaining
Contractual Term
(in years)
|
Aggregate
Intrinsic Value
(in thousands)
|
||||||
Outstanding at beginning of period
|
2,652
|
|
$
|
18.27
|
|
|
|
|||
Granted
|
—
|
|
—
|
|
|
|
||||
Exercised
|
(24
|
)
|
15.04
|
|
|
|
||||
Cancelled/expired/forfeited
|
(150
|
)
|
18.50
|
|
|
|
||||
Outstanding at end of period
|
2,478
|
|
$
|
18.28
|
|
5.46
|
|
$
|
—
|
|
Exercisable at end of period
|
1,844
|
|
$
|
18.14
|
|
4.69
|
|
$
|
—
|
|
(share data in thousands)
|
Number of Shares
|
Weighted-Average Grant Date Fair Value
|
|||
Nonvested at beginning of period
|
712
|
|
$
|
19.14
|
|
Granted
|
1,902
|
|
5.35
|
|
|
Vested
|
(282
|
)
|
18.48
|
|
|
Cancelled/forfeited
|
(105
|
)
|
15.00
|
|
|
Nonvested at end of period
|
2,227
|
|
$
|
7.63
|
|
|
Year Ended December 31,
|
Year Ended December 31,
|
||
|
2017
|
2016
|
||
Risk-free interest rate
|
1.54
|
%
|
0.96
|
%
|
Expected volatility
|
42
|
%
|
25
|
%
|
Expected life of the option in years
|
2.83
|
|
2.83
|
|
Expected dividend yield
|
—
|
%
|
—
|
%
|
(share data in thousands)
|
Number of Shares
|
Weighted-Average Grant Date Fair Value
|
|||
Nonvested at beginning of period
|
451
|
|
$
|
19.29
|
|
Granted
|
828
|
|
9.74
|
|
|
Vested
|
(3
|
)
|
9.67
|
|
|
Cancelled/forfeited
|
(141
|
)
|
14.07
|
|
|
Nonvested at end of period
|
1,135
|
|
$
|
12.75
|
|
(share data in thousands)
|
Number of Shares
|
Weighted-Average Grant Date Fair Value
|
|||
Nonvested at beginning of period
|
32
|
|
$
|
18.53
|
|
Granted
|
1,908
|
|
2.90
|
|
|
Vested
|
(7
|
)
|
—
|
|
|
Cancelled/forfeited
|
(134
|
)
|
3.93
|
|
|
Nonvested at end of period
|
1,799
|
|
$
|
4.53
|
|
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Balance at beginning of period
|
$
|
884
|
|
$
|
1,141
|
|
$
|
3,321
|
|
Increases based on tax positions taken in the current year
|
277
|
|
178
|
|
88
|
|
|||
Increases based on tax positions taken in the prior years
|
56
|
|
230
|
|
248
|
|
|||
Decreases based on tax positions taken in the prior years
|
(13
|
)
|
—
|
|
(1,161
|
)
|
|||
Decreases due to settlements with tax authorities
|
—
|
|
(665
|
)
|
(1,355
|
)
|
|||
Decreases due to lapse of applicable statute of limitation
|
—
|
|
—
|
|
—
|
|
|||
Balance at end of period
|
$
|
1,204
|
|
$
|
884
|
|
$
|
1,141
|
|
|
December 31,
|
|||||
(in thousands)
|
2017
|
2016
|
||||
Deferred tax assets:
|
|
|
||||
Pension liability
|
$
|
58,810
|
|
$
|
105,426
|
|
Accrued warranty expense
|
5,262
|
|
11,628
|
|
||
Accrued vacation pay
|
996
|
|
4,792
|
|
||
Accrued liabilities for self-insurance (including postretirement health care benefits)
|
3,910
|
|
6,596
|
|
||
Accrued liabilities for executive and employee incentive compensation
|
4,950
|
|
8,334
|
|
||
Investments in joint ventures and affiliated companies
|
10,422
|
|
10,742
|
|
||
Long-term contracts
|
6,801
|
|
10,318
|
|
||
Accrued Legal Fees
|
1,579
|
|
2,110
|
|
||
Inventory Reserve
|
1,842
|
|
2,445
|
|
||
Property, plant and equipment
|
—
|
|
1,587
|
|
||
Net operating loss carryforward
|
95,715
|
|
33,187
|
|
||
State tax net operating loss carryforward
|
21,658
|
|
15,372
|
|
||
Foreign tax credit carryforward
|
7,150
|
|
3,870
|
|
||
Other tax credits
|
5,678
|
|
737
|
|
||
Other
|
4,980
|
|
7,852
|
|
||
Total deferred tax assets
|
229,753
|
|
224,996
|
|
||
Valuation allowance for deferred tax assets
|
(108,105
|
)
|
(40,484
|
)
|
||
Net, total deferred tax assets
|
121,648
|
|
184,512
|
|
||
|
|
|
||||
Deferred tax liabilities:
|
|
|
||||
Long-term contracts
|
569
|
|
3,601
|
|
||
Intangibles
|
21,215
|
|
21,892
|
|
||
Property, plant and equipment
|
2,835
|
|
—
|
|
||
Undistributed foreign earnings
|
1,314
|
|
500
|
|
||
Goodwill
|
—
|
|
1,125
|
|
||
Other
|
2,445
|
|
2,885
|
|
||
Total deferred tax liabilities
|
28,378
|
|
30,003
|
|
||
Net deferred tax assets
|
$
|
93,270
|
|
$
|
154,509
|
|
(in thousands)
|
Beginning
balance
|
Charges to costs
and expenses
|
Charged to
other accounts
|
Ending
balance
|
||||||||
Year Ended December 31, 2017
|
$
|
(40,484
|
)
|
$
|
(61,021
|
)
|
$
|
(6,600
|
)
|
$
|
(108,105
|
)
|
Year Ended December 31, 2016
|
(10,077
|
)
|
(29,307
|
)
|
(1,100
|
)
|
(40,484
|
)
|
||||
Year Ended December 31, 2015
|
(9,216
|
)
|
(861
|
)
|
—
|
|
(10,077
|
)
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
United States
|
$
|
(44,835
|
)
|
$
|
1,280
|
|
$
|
(20,748
|
)
|
Other than the United States
|
(269,364
|
)
|
(109,419
|
)
|
40,953
|
|
|||
Income before provision for income taxes
|
$
|
(314,199
|
)
|
$
|
(108,139
|
)
|
$
|
20,205
|
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Current:
|
|
|
|
||||||
United States – federal
|
$
|
100
|
|
$
|
284
|
|
$
|
24,084
|
|
United States – state and local
|
397
|
|
(415
|
)
|
3,458
|
|
|||
Other than in the United States
|
8,612
|
|
4,504
|
|
8,250
|
|
|||
Total current
|
9,109
|
|
4,373
|
|
35,792
|
|
|||
Deferred:
|
|
|
|
||||||
United States – Federal
|
58,203
|
|
11,512
|
|
(35,888
|
)
|
|||
United States – state and local
|
2,546
|
|
6,365
|
|
(111
|
)
|
|||
Other than in the United States
|
(5,042
|
)
|
(15,307
|
)
|
3,878
|
|
|||
Total deferred (benefit) provision
|
55,707
|
|
2,570
|
|
(32,121
|
)
|
|||
Provision for income taxes
|
$
|
64,816
|
|
$
|
6,943
|
|
$
|
3,671
|
|
(in thousands)
|
Currency translation gain (loss) (net of tax)
|
Net unrealized gain (loss) on investments (net of tax)
|
Net unrealized gain (loss) on derivative instruments (net of tax)
|
Net unrecognized gain (loss) related to benefit plans (net of tax)
|
Total
|
||||||||||
Balance at December 31, 2014
|
$
|
11,551
|
|
$
|
(22
|
)
|
$
|
(123
|
)
|
$
|
(1,032
|
)
|
$
|
10,374
|
|
Other comprehensive income (loss) before reclassifications
|
(19,459
|
)
|
(49
|
)
|
339
|
|
519
|
|
(18,650
|
)
|
|||||
Amounts reclassified from AOCI to net income (loss)
|
—
|
|
27
|
|
1,133
|
|
(195
|
)
|
965
|
|
|||||
Net transfers from Parent
|
(11,585
|
)
|
—
|
|
437
|
|
(394
|
)
|
(11,542
|
)
|
|||||
Net current-period other comprehensive income (loss)
|
(31,044
|
)
|
(22
|
)
|
1,909
|
|
(70
|
)
|
(29,227
|
)
|
|||||
Balance at December 31, 2015
|
$
|
(19,493
|
)
|
$
|
(44
|
)
|
$
|
1,786
|
|
$
|
(1,102
|
)
|
$
|
(18,853
|
)
|
Other comprehensive income (loss) before reclassifications
|
(24,494
|
)
|
7
|
|
2,046
|
|
7,692
|
|
(14,749
|
)
|
|||||
Amounts reclassified from AOCI to net income (loss)
|
—
|
|
—
|
|
(3,030
|
)
|
150
|
|
(2,880
|
)
|
|||||
Net current-period other comprehensive income (loss)
|
(24,494
|
)
|
7
|
|
(984
|
)
|
7,842
|
|
(17,629
|
)
|
|||||
Balance at December 31, 2016
|
(43,987
|
)
|
(37
|
)
|
802
|
|
6,740
|
|
(36,482
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
16,150
|
|
99
|
|
3,204
|
|
(152
|
)
|
19,301
|
|
|||||
Amounts reclassified from AOCI to net income (loss)
|
—
|
|
(24
|
)
|
(2,269
|
)
|
(2,955
|
)
|
(5,248
|
)
|
|||||
Net current-period other comprehensive income (loss)
|
16,150
|
|
75
|
|
935
|
|
(3,107
|
)
|
14,053
|
|
|||||
Balance at December 31, 2017
|
$
|
(27,837
|
)
|
$
|
38
|
|
$
|
1,737
|
|
$
|
3,633
|
|
$
|
(22,429
|
)
|
AOCI component
|
Line items in the Consolidated Statements of Operations affected by reclassifications from AOCI
|
Year Ended December 31,
|
||||||||
2017
|
2016
|
2015
|
||||||||
Derivative financial instruments
|
Revenues
|
$
|
10,059
|
|
$
|
4,624
|
|
$
|
546
|
|
|
Cost of operations
|
(118
|
)
|
195
|
|
155
|
|
|||
|
Other-net
|
(7,438
|
)
|
(1,221
|
)
|
(24
|
)
|
|||
|
Total before tax
|
2,503
|
|
3,598
|
|
677
|
|
|||
|
Provision for income taxes
|
234
|
|
568
|
|
149
|
|
|||
|
Net income
|
$
|
2,269
|
|
$
|
3,030
|
|
$
|
528
|
|
|
|
|
|
|
||||||
Amortization of prior service cost on benefit obligations
|
Cost of operations
|
$
|
2,912
|
|
$
|
254
|
|
$
|
(1,475
|
)
|
|
Provision for income taxes
|
(43
|
)
|
404
|
|
(1,168
|
)
|
|||
|
Net income (loss)
|
$
|
2,955
|
|
$
|
(150
|
)
|
$
|
(307
|
)
|
|
|
|
|
|
||||||
Realized gain on investments
|
Other-net
|
$
|
38
|
|
$
|
—
|
|
$
|
(42
|
)
|
|
Provision for income taxes
|
14
|
|
—
|
|
(15
|
)
|
|||
|
Net income (loss)
|
$
|
24
|
|
$
|
—
|
|
$
|
(27
|
)
|
(in thousands)
|
December 31, 2017
|
December 31, 2016
|
||||
Held by foreign entities
|
$
|
54,274
|
|
$
|
94,415
|
|
Held by United States entities
|
2,393
|
|
1,472
|
|
||
Cash and cash equivalents
|
$
|
56,667
|
|
$
|
95,887
|
|
|
|
|
||||
Reinsurance reserve requirements
|
$
|
21,061
|
|
$
|
21,189
|
|
Restricted foreign accounts
|
4,919
|
|
6,581
|
|
||
Restricted cash and cash equivalents
|
$
|
25,980
|
|
$
|
27,770
|
|
(in thousands)
|
December 31, 2017
|
December 31, 2016
|
||||
Raw materials and supplies
|
$
|
60,708
|
|
$
|
61,630
|
|
Work in progress
|
7,867
|
|
6,803
|
|
||
Finished goods
|
13,587
|
|
17,374
|
|
||
Total inventories
|
$
|
82,162
|
|
$
|
85,807
|
|
(in thousands)
|
December 31, 2017
|
December 31, 2016
|
||||
Definite-lived intangible assets
|
|
|
||||
Customer relationships
|
$
|
59,794
|
|
$
|
47,892
|
|
Unpatented technology
|
20,160
|
|
18,461
|
|
||
Patented technology
|
6,542
|
|
2,499
|
|
||
Tradename
|
22,951
|
|
18,774
|
|
||
Backlog
|
30,160
|
|
28,170
|
|
||
All other
|
7,611
|
|
7,430
|
|
||
Gross value of definite-lived intangible assets
|
147,218
|
|
123,226
|
|
||
Customer relationships amortization
|
(23,434
|
)
|
(17,519
|
)
|
||
Unpatented technology amortization
|
(5,013
|
)
|
(2,864
|
)
|
||
Patented technology amortization
|
(2,213
|
)
|
(1,532
|
)
|
||
Tradename amortization
|
(5,097
|
)
|
(3,826
|
)
|
||
Acquired backlog amortization
|
(28,695
|
)
|
(21,776
|
)
|
||
All other amortization
|
(7,291
|
)
|
(5,974
|
)
|
||
Accumulated amortization
|
(71,743
|
)
|
(53,491
|
)
|
||
Net definite-lived intangible assets
|
$
|
75,475
|
|
$
|
69,735
|
|
|
|
|
||||
Indefinite-lived intangible assets:
|
|
|
||||
Trademarks and trade names
|
$
|
1,305
|
|
$
|
1,305
|
|
Total indefinite-lived intangible assets
|
$
|
1,305
|
|
$
|
1,305
|
|
|
Twelve months ended December 31,
|
|||||
(in thousands)
|
2017
|
2016
|
||||
Balance at beginning of period
|
$
|
71,039
|
|
$
|
37,844
|
|
Business acquisitions
|
19,500
|
|
55,438
|
|
||
Amortization expense
|
(18,252
|
)
|
(19,923
|
)
|
||
Currency translation adjustments and other
|
4,493
|
|
(2,320
|
)
|
||
Balance at end of the period
|
$
|
76,780
|
|
$
|
71,039
|
|
Year ending
|
Amortization expense
|
||
December 31, 2018
|
$
|
12,423
|
|
December 31, 2019
|
$
|
10,371
|
|
December 31, 2020
|
$
|
9,077
|
|
December 31, 2021
|
$
|
8,817
|
|
December 31, 2022
|
$
|
7,244
|
|
Thereafter
|
$
|
27,543
|
|
(in thousands)
|
Power
|
Renewable
|
Industrial
|
Total
|
||||||||
Balance at December 31, 2015
|
$
|
47,137
|
|
$
|
49,624
|
|
$
|
104,308
|
|
$
|
201,069
|
|
Increase resulting from SPIG acquisition
|
—
|
|
—
|
|
69,862
|
|
69,862
|
|
||||
Purchase price adjustment - SPIG acquisition
|
—
|
|
—
|
|
2,539
|
|
2,539
|
|
||||
Currency translation adjustments
|
(917
|
)
|
(1,189
|
)
|
(3,969
|
)
|
(6,075
|
)
|
||||
Balance at December 31, 2016
|
46,220
|
|
48,435
|
|
172,740
|
|
267,395
|
|
||||
Increase resulting from Universal acquisition
|
—
|
|
—
|
|
14,413
|
|
14,413
|
|
||||
Impairment charges
(1)
|
—
|
|
(49,965
|
)
|
(36,938
|
)
|
(86,903
|
)
|
||||
Currency translation adjustments
|
1,150
|
|
1,530
|
|
6,813
|
|
9,493
|
|
||||
Balance at December 31, 2017
|
$
|
47,370
|
|
$
|
—
|
|
$
|
157,028
|
|
$
|
204,398
|
|
|
Power Segment
|
|
Industrial Segment
|
||
(in millions)
|
Power
|
Construction
|
|
MEGTEC
|
Universal
|
Reporting unit headroom
|
60%
|
98%
|
|
12%
|
18%
|
Goodwill balance
|
$38.5
|
$8.9
|
|
$104.3
|
$14.4
|
(in thousands)
|
December 31, 2017
|
December 31, 2016
|
||||
Land
|
$
|
8,859
|
|
$
|
6,348
|
|
Buildings
|
122,369
|
|
114,322
|
|
||
Machinery and equipment
|
217,791
|
|
189,489
|
|
||
Property under construction
|
6,486
|
|
22,378
|
|
||
|
355,505
|
|
332,537
|
|
||
Less accumulated depreciation
|
213,574
|
|
198,900
|
|
||
Net property, plant and equipment
|
$
|
141,931
|
|
$
|
133,637
|
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Balance at beginning of period
|
$
|
40,467
|
|
$
|
39,847
|
|
$
|
37,735
|
|
Additions
|
23,161
|
|
22,472
|
|
19,310
|
|
|||
Expirations and other changes
|
(13,887
|
)
|
(10,855
|
)
|
(982
|
)
|
|||
Increases attributable to business combinations
|
1,060
|
|
918
|
|
—
|
|
|||
Payments
|
(14,110
|
)
|
(11,089
|
)
|
(15,215
|
)
|
|||
Translation and other
|
2,329
|
|
(826
|
)
|
(1,001
|
)
|
|||
Balance at end of period
|
$
|
39,020
|
|
$
|
40,467
|
|
$
|
39,847
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||
(in thousands)
|
2017
|
2016
|
2015
|
|
2017
|
2016
|
2015
|
||||||||||||
Service cost
|
$
|
789
|
|
$
|
1,680
|
|
$
|
13,677
|
|
|
$
|
15
|
|
$
|
23
|
|
$
|
24
|
|
Interest cost
|
41,113
|
|
40,875
|
|
49,501
|
|
|
319
|
|
897
|
|
1,143
|
|
||||||
Expected return on plan assets
|
(59,409
|
)
|
(61,939
|
)
|
(68,709
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of prior service cost
|
103
|
|
250
|
|
307
|
|
|
(3,009
|
)
|
—
|
|
—
|
|
||||||
Recognized net actuarial loss (gain)
|
(8,191
|
)
|
31,932
|
|
41,574
|
|
|
(505
|
)
|
(7,822
|
)
|
(1,364
|
)
|
||||||
Net periodic benefit cost (benefit)
|
$
|
(25,595
|
)
|
$
|
12,798
|
|
$
|
36,350
|
|
|
$
|
(3,180
|
)
|
$
|
(6,902
|
)
|
$
|
(197
|
)
|
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Cost of operations
|
$
|
(8,972
|
)
|
$
|
21,208
|
|
$
|
44,307
|
|
Selling, general and administrative expenses
|
274
|
|
2,902
|
|
(4,097
|
)
|
|||
Other
|
2
|
|
—
|
|
—
|
|
|||
Total
|
$
|
(8,696
|
)
|
$
|
24,110
|
|
$
|
40,210
|
|
|
Pension Benefits
|
|
Other Benefits
|
||
|
2017
|
2016
|
|
2017
|
2016
|
Weighted average assumptions used to determine net periodic benefit obligations at December 31:
|
|
|
|
|
|
Discount rate
|
3.65%
|
4.13%
|
|
3.33%
|
3.66%
|
Rate of compensation increase
|
0.10%
|
2.40%
|
|
—
|
—
|
Weighted average assumptions used to determine net periodic benefit cost for the years ended December 31:
|
|
|
|
|
|
Discount rate
|
4.11%
|
4.25%
|
|
3.33%
|
3.66%
|
Expected return on plan assets
|
6.64%
|
6.70%
|
|
—%
|
—%
|
Rate of compensation increase
|
0.10%
|
2.40%
|
|
—%
|
—%
|
|
2016
|
|
Assumed health care cost trend rates at December 31
|
|
|
Health care cost trend rate assumed for next year
|
8.50
|
%
|
Rates to which the cost trend rate is assumed to decline (ultimate trend rate)
|
4.50
|
%
|
Year that the rate reaches ultimate trend rate
|
2024
|
|
|
2017
|
2016
|
||
Asset Category:
|
|
|
||
Fixed Income (excluding United States Government Securities)
|
33
|
%
|
32
|
%
|
Commingled and Mutual Funds
|
41
|
%
|
38
|
%
|
United States Government Securities
|
21
|
%
|
20
|
%
|
Equity Securities
|
3
|
%
|
7
|
%
|
Derivatives
|
1
|
%
|
1
|
%
|
Other
|
1
|
%
|
2
|
%
|
|
2017
|
|
2016
|
||
Asset Category:
|
|
|
|
||
Equity Securities and Commingled Mutual Funds
|
41
|
%
|
|
44
|
%
|
Fixed Income
|
58
|
%
|
|
55
|
%
|
Other
|
1
|
%
|
|
1
|
%
|
|
Canadian
Plans
|
|
Diamond
UK Plan
|
||
Asset Class:
|
|
|
|
||
United States Equity
|
27
|
%
|
|
10
|
%
|
Global Equity
|
23
|
%
|
|
12
|
%
|
Fixed Income
|
50
|
%
|
|
78
|
%
|
(in thousands)
|
12/31/2017
|
Level 1
|
Level 2
|
||||||
Fixed income
|
$
|
352,484
|
|
$
|
—
|
|
$
|
352,484
|
|
Equities
|
33,525
|
|
33,525
|
|
—
|
|
|||
Commingled and mutual funds
|
413,166
|
|
—
|
|
413,166
|
|
|||
United States government securities
|
193,249
|
|
193,249
|
|
—
|
|
|||
Cash and accrued items
|
14,578
|
|
12,585
|
|
1,993
|
|
|||
Total pension and other postretirement benefit assets
|
$
|
1,007,002
|
|
$
|
239,359
|
|
$
|
767,643
|
|
(in thousands)
|
12/31/2016
|
Level 1
|
Level 2
|
||||||
Fixed income
|
$
|
321,847
|
|
$
|
—
|
|
$
|
321,847
|
|
Equities
|
83,441
|
|
78,268
|
|
5,173
|
|
|||
Commingled and mutual funds
|
349,348
|
|
4,609
|
|
344,739
|
|
|||
United States government securities
|
156,599
|
|
156,599
|
|
—
|
|
|||
Cash and accrued items
|
11,633
|
|
9,394
|
|
2,239
|
|
|||
Total pension and other postretirement benefit assets
|
$
|
922,868
|
|
$
|
248,870
|
|
$
|
673,998
|
|
Pension Fund
|
|
EIN/PIN
|
|
Pension Protection
Act Zone Status
|
|
FIP/RP Status
Pending/
Implemented
|
|
Contributions
|
|
Surcharge Imposed
|
|
Expiration Date
Of Collective
Bargaining
Agreement
|
||||||||||||
|
||||||||||||||||||||||||
2017
|
|
2016
|
|
2015
|
|
|
||||||||||||||||||
2017
|
|
2016
|
|
(in millions)
|
|
|||||||||||||||||||
Boilermaker-Blacksmith National Pension Trust
|
|
48-6168020/ 001
|
|
Yellow
|
|
Yellow
|
|
Yes
|
|
$
|
7.9
|
|
|
$
|
17.8
|
|
|
$
|
20.3
|
|
|
No
|
|
Described
Below |
All Other
|
|
|
|
|
|
|
|
|
|
2.0
|
|
|
3.2
|
|
|
4.6
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
$
|
9.9
|
|
|
$
|
21.0
|
|
|
$
|
24.9
|
|
|
|
|
|
(in thousands)
|
December 31, 2017
|
December 31, 2016
|
||||
United States
|
$
|
94,300
|
|
$
|
9,800
|
|
Foreign
|
9,173
|
|
14,241
|
|
||
Total revolving debt
|
$
|
103,473
|
|
$
|
24,041
|
|
•
|
8.50
:1.0 for the quarter ended December 31, 2017,
|
•
|
7.00
:1.0 for the quarter ending March 31, 2018,
|
•
|
6.50
:1.0 for the quarters ending June 30, 2018 and September 30, 2018,
|
•
|
4.75
:1.0 for the quarter ending December 31, 2018,
|
•
|
3.00
:1.0 for the quarter ending March 31, 2019,
|
•
|
2.75
:1.0 for the quarters ending June 30, 2019 and September 30, 2019 and
|
•
|
2.50
:1.0 for the quarter ending December 31, 2019 and each quarter thereafter.
|
•
|
1.25
:1.0 for the quarter ended December 31, 2017,
|
•
|
1.15
:1.0 for the quarter ending March 31, 2018,
|
•
|
1.00
:1.0 for the quarter ending June 30, 2018,
|
•
|
0.85
:1.0 for the quarter ending September 30, 2018,
|
•
|
1.25
:1.0 for the quarter ending December 31, 2018,
|
•
|
1.50
:1.0 for the quarter ending March 31, 2019 and
|
•
|
2.00
:1.0 for the quarters ending June 30, 2019 and each quarter thereafter.
|
Face value
|
Unamortized debt discount
and direct financing costs
|
Net carrying value
|
$195,884
|
$35,743
|
$160,141
|
(in thousands)
|
Coupon
Interest
|
Accretion of debt discount and amortization of financing costs
|
Total
Interest
Expense
|
For the three months ended September 30, 2017
|
$2,554
|
$1,095
|
$3,649
|
For the three months ended December 31, 2017
|
$4,657
|
$2,131
|
$6,788
|
Forecasted for the year ending December 31, 2018
|
$20,266
|
$9,838
|
$30,104
|
|
Asset and Liability Derivative
|
|||||
(in thousands)
|
December 31, 2017
|
December 31, 2016
|
||||
Derivatives designated as hedges:
|
|
|
||||
Foreign exchange contracts:
|
|
|
||||
Location of FX forward contracts designated as hedges:
|
|
|
||||
Accounts receivable-other
|
$
|
1,088
|
|
$
|
3,805
|
|
Other assets
|
312
|
|
665
|
|
||
Accounts payable
|
105
|
|
1,012
|
|
||
Other liabilities
|
—
|
|
213
|
|
||
|
|
|
||||
Derivatives not designated as hedges:
|
|
|
||||
Foreign exchange contracts:
|
|
|
||||
Location of FX forward contracts not designated as hedges:
|
|
|
||||
Accounts receivable-other
|
$
|
7
|
|
$
|
105
|
|
Accounts payable
|
1,722
|
|
403
|
|
||
Other liabilities
|
12
|
|
7
|
|
|
Year Ended December 31,
|
|||||
(in thousands)
|
2017
|
2016
|
||||
Derivatives designated as hedges:
|
|
|
||||
Cash flow hedges
|
|
|
||||
Foreign exchange contracts
|
|
|
||||
Amount of gain (loss) recognized in other comprehensive income
|
$
|
3,346
|
|
2,208
|
|
|
Effective portion of gain (loss) reclassified from AOCI into earnings by location:
|
|
|
||||
Revenues
|
10,059
|
|
4,624
|
|
||
Cost of operations
|
(118
|
)
|
195
|
|
||
Other-net
|
(7,438
|
)
|
(1,221
|
)
|
||
Portion of gain (loss) recognized in income that is excluded from effectiveness testing by location:
|
|
|
||||
Other-net
|
(5,277
|
)
|
4,518
|
|
||
|
|
|
||||
Derivatives not designated as hedges:
|
|
|
||||
Forward contracts
|
|
|
||||
Loss recognized in income by location:
|
|
|
||||
Other-net
|
$
|
(3,436
|
)
|
$
|
(872
|
)
|
(in thousands)
|
|
|
|
|
||||||||
Available-for-sale securities
|
December 31, 2017
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Commercial paper
|
$
|
1,895
|
|
$
|
—
|
|
$
|
1,895
|
|
$
|
—
|
|
Certificates of deposit
|
2,398
|
|
—
|
|
2,398
|
|
—
|
|
||||
Mutual funds
|
1,331
|
|
—
|
|
1,331
|
|
—
|
|
||||
Corporate notes and bonds
|
4,447
|
|
4,447
|
|
—
|
|
—
|
|
||||
United States Government and agency securities
|
5,738
|
|
5,738
|
|
—
|
|
—
|
|
||||
Total fair value of available-for-sale securities
|
$
|
15,809
|
|
$
|
10,185
|
|
$
|
5,624
|
|
$
|
—
|
|
(in thousands)
|
|
|
|
|
||||||||
Available-for-sale securities
|
December 31, 2016
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Commercial paper
|
$
|
6,734
|
|
$
|
—
|
|
$
|
6,734
|
|
$
|
—
|
|
Certificates of deposit
|
2,251
|
|
—
|
|
2,251
|
|
—
|
|
||||
Mutual funds
|
1,152
|
|
—
|
|
1,152
|
|
—
|
|
||||
Corporate notes and bonds
|
750
|
|
750
|
|
—
|
|
—
|
|
||||
United States Government and agency securities
|
7,104
|
|
7,104
|
|
—
|
|
—
|
|
||||
Total fair value of available-for-sale securities
|
$
|
17,991
|
|
$
|
7,854
|
|
$
|
10,137
|
|
$
|
—
|
|
Derivatives
|
December 31, 2017
|
December 31, 2016
|
||||||
Forward contracts to purchase/sell foreign currencies
|
$
|
(432
|
)
|
$
|
2,940
|
|
•
|
Cash and cash equivalents and restricted cash and cash equivalents
. The carrying amounts that we have reported in the accompanying consolidated balance sheets for cash and cash equivalents and restricted cash and cash equivalents approximate their fair values due to their highly liquid nature.
|
•
|
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 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 debt instruments approximated their carrying value at
December 31, 2017
and
December 31, 2016
.
|
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Accrued capital expenditures in accounts payable
|
$
|
1,383
|
|
$
|
2,751
|
|
$
|
568
|
|
Accreted interest expense on our second lien term loan facility
|
$
|
3,226
|
|
$
|
—
|
|
$
|
—
|
|
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Income tax payments (refunds), net
|
$
|
(10,889
|
)
|
$
|
10,781
|
|
$
|
15,008
|
|
Interest payments on our United States revolving credit facility
|
$
|
4,909
|
|
$
|
425
|
|
$
|
—
|
|
Interest payments on our second lien term loan facility
|
$
|
7,044
|
|
$
|
—
|
|
$
|
—
|
|
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Components associated with borrowings from:
|
|
|
|
||||||
United States revolving credit facility
|
$
|
5,051
|
|
$
|
1,669
|
|
$
|
1,059
|
|
Second lien term loan facility
|
7,211
|
|
—
|
|
—
|
|
|||
Foreign revolving credit facilities
|
1,021
|
|
847
|
|
148
|
|
|||
|
13,283
|
|
2,516
|
|
1,207
|
|
|||
Components associated with amortization or accretion of:
|
|
|
|
||||||
United States revolving credit facility deferred financing fees
|
6,270
|
|
1,244
|
|
1,131
|
|
|||
Second lien term loan facility deferred financing fees and discount
|
3,226
|
|
—
|
|
—
|
|
|||
|
9,496
|
|
1,244
|
|
1,131
|
|
|||
|
|
|
|
||||||
Other interest expense
|
3,526
|
|
36
|
|
—
|
|
|||
|
|
|
|
||||||
Total interest expense
|
$
|
26,305
|
|
$
|
3,796
|
|
$
|
2,338
|
|
(in thousands)
|
Year Ended December 31, 2015
|
||
Sales to our former Parent
|
$
|
911
|
|
Corporate administrative expenses
|
35,343
|
|
(in thousands)
|
Year Ended December 31 2015
|
||
Sales to former Parent
|
$
|
911
|
|
|
|
||
Corporate administrative expenses
|
35,343
|
|
|
Income tax allocation
|
11,872
|
|
|
Acquisition of business, net of cash acquired
|
—
|
|
|
Cash pooling and general financing activities
|
(91,015
|
)
|
|
Cash contribution received at spin-off
|
125,300
|
|
|
Net transfer from former Parent per statement of cash flows
|
$
|
80,589
|
|
|
|
||
Non-cash items:
|
|
||
Net transfer of assets and liabilities
|
$
|
44,706
|
|
Distribution of Nuclear Energy segment
|
$
|
(47,839
|
)
|
Net transfer from former Parent per statement of shareholders' equity
|
$
|
77,456
|
|
|
Six Months Ended June 30,
|
||
(in thousands)
|
2015
|
||
Revenues
|
$
|
53,064
|
|
|
|
||
Income (loss) before income tax expense
|
3,358
|
|
|
Income tax expense (benefit)
|
555
|
|
|
Income (loss) from discontinued operations, net of tax
|
$
|
2,803
|
|
Fiscal Year Ending December 31,
|
Amount
|
||
2018
|
$
|
6,814
|
|
2019
|
$
|
5,100
|
|
2020
|
$
|
3,553
|
|
2021
|
$
|
2,741
|
|
2022
|
$
|
2,258
|
|
Thereafter
|
$
|
3,337
|
|
Fiscal year ending December 31,
|
Amount
|
||
2018
|
$
|
9,173
|
|
2019
|
$
|
—
|
|
2020
|
$
|
290,184
|
|
2021
|
$
|
—
|
|
2022
|
$
|
—
|
|
Thereafter
|
$
|
—
|
|
(in thousands, except per share amounts)
|
Quarter ended
|
||||||||||||||
|
March 31, 2017
|
|
June 30, 2017
|
|
Sept. 30, 2017
|
|
Dec. 31, 2017
|
||||||||
Revenues
|
$
|
391,104
|
|
|
$
|
349,829
|
|
|
$
|
408,703
|
|
|
$
|
408,099
|
|
Gross profit
|
$
|
62,900
|
|
|
$
|
(55,822
|
)
|
|
$
|
47,287
|
|
|
$
|
45,513
|
|
Operating income (loss)
(1)
|
$
|
(8,798
|
)
|
|
$
|
(144,646
|
)
|
|
$
|
(104,748
|
)
|
|
$
|
(23,373
|
)
|
Equity in income (loss) of investees
|
$
|
618
|
|
|
$
|
(15,232
|
)
|
|
$
|
1,234
|
|
|
$
|
3,513
|
|
Net income (loss) attributable to shareholders
|
$
|
(7,045
|
)
|
|
$
|
(150,999
|
)
|
|
$
|
(114,302
|
)
|
|
$
|
(107,478
|
)
|
Earnings per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.14
|
)
|
|
$
|
(3.09
|
)
|
|
$
|
(2.48
|
)
|
|
$
|
(2.44
|
)
|
Diluted
|
$
|
(0.14
|
)
|
|
$
|
(3.09
|
)
|
|
$
|
(2.48
|
)
|
|
$
|
(2.44
|
)
|
(1)
|
Includes equity in income of investees.
|
(in thousands, except per share amounts)
|
Quarter ended
|
||||||||||||||
|
March 31, 2016
|
|
June 30, 2016
|
|
Sept. 30, 2016
|
|
Dec. 31, 2016
|
||||||||
Revenues
|
$
|
404,116
|
|
|
$
|
383,208
|
|
|
$
|
410,955
|
|
|
$
|
379,984
|
|
Gross profit
|
$
|
80,156
|
|
|
$
|
26,052
|
|
|
$
|
73,757
|
|
|
$
|
(848
|
)
|
Operating income (loss)
(1)
|
$
|
17,266
|
|
|
$
|
(72,585
|
)
|
|
$
|
11,133
|
|
|
$
|
(58,587
|
)
|
Equity in income (loss) of investees
|
$
|
2,676
|
|
|
$
|
(616
|
)
|
|
$
|
2,827
|
|
|
$
|
11,553
|
|
Net income (loss) attributable to shareholders
|
$
|
10,507
|
|
|
$
|
(63,490
|
)
|
|
$
|
8,894
|
|
|
$
|
(71,560
|
)
|
Earnings per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.20
|
|
|
$
|
(1.25
|
)
|
|
$
|
0.18
|
|
|
$
|
(1.47
|
)
|
Diluted
|
$
|
0.20
|
|
|
$
|
(1.25
|
)
|
|
$
|
0.18
|
|
|
$
|
(1.47
|
)
|
(1)
|
Includes equity in income of investees.
|
•
|
Actuarial gains and losses from marking to market our pension and postretirement benefit plan assets and liabilities (see Note 18). Such mark to market adjustments resulted in (charges) gains of:
$9.8 million
in the fourth quarter of 2017,
$(1.1) million
in the first quarter of 2017,
$6.4 million
in the fourth quarter of 2016,
$(0.5) million
in the third quarter of 2016, and
$(30.0) million
in the second quarter of 2016.
|
•
|
In the third quarter of 2017,
$86.9 million
of goodwill impairment charges (see Note 15).
|
•
|
In the second and fourth quarters of both 2017 and 2016, significant losses related to changes in the estimates of the forecasted revenues and costs to complete six renewable energy contracts (see
Note 6
).
|
•
|
In the fourth quarter of 2017,
$62.4 million
of additional income tax expense resulting from the enactment of new tax legislation in the United States on December 22, 2017 (see Note 10).
|
•
|
8.50
:1.0 for the quarter ended December 31, 2017,
|
•
|
7.00
:1.0 for the quarter ending March 31, 2018,
|
•
|
6.50
:1.0 for the quarters ending June 30, 2018 and September 30, 2018,
|
•
|
4.75
:1.0 for the quarter ending December 31, 2018,
|
•
|
3.00
:1.0 for the quarter ending March 31, 2019,
|
•
|
2.75
:1.0 for the quarters ending June 30, 2019 and September 30, 2019 and
|
•
|
2.50
:1.0 for the quarter ending December 31, 2019 and each quarter thereafter.
|
•
|
1.25
:1.0 for the quarter ended December 31, 2017,
|
•
|
1.15
:1.0 for the quarter ending March 31, 2018,
|
•
|
1.00
:1.0 for the quarter ending June 30, 2018,
|
•
|
0.85
:1.0 for the quarter ending September 30, 2018,
|
•
|
1.25
:1.0 for the quarter ending December 31, 2018,
|
•
|
1.50
:1.0 for the quarter ending March 31, 2019 and
|
•
|
2.00
:1.0 for the quarters ending June 30, 2019 and each quarter thereafter.
|
Name
|
Age
|
Position
|
Jenny L. Apker
|
60
|
Senior Vice President and Chief Financial Officer
|
Mark A. Carano
|
48
|
Senior Vice President, Industrial and Corporate Development
|
J. André Hall
|
52
|
Senior Vice President, General Counsel and Corporate Secretary
|
Daniel W. Hoehn
|
39
|
Vice President, Controller and Chief Accounting Officer
|
Mark S. Low
|
61
|
Senior Vice President, Power
|
Jimmy B. Morgan
|
49
|
Senior Vice President, Renewable
|
Leslie C. Kass
|
47
|
President and Chief Executive Officer
|
James J. Muckley
|
59
|
Senior Vice President, Operations
|
Plan Category:
|
Equity compensation plans
approved by security holders
|
||
Number of securities to be issued upon exercise of outstanding options and rights
|
5,839,265
|
|
|
Weighted-average exercise price of outstanding options and rights
|
$
|
13.15
|
|
Number of securities remaining available for future issuance
|
247,310
|
|
|
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))
|
|
|
|
|
|
Amended and 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))
|
|
|
|
|
|
Amended and Restated Bylaws (incorporate by reference to Exhibit 3.1 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (File No. 001-36876))
|
|
|
|
|
|
Tax Sharing Agreement, dated as of June 8, 2015, by and between The Babcock & Wilcox Company and Babcock & Wilcox Enterprises, Inc. (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Employee Matters Agreement, dated as of June 8, 2015, by and between The Babcock & Wilcox Company and Babcock & Wilcox Enterprises, Inc. (incorporated by reference to Exhibit 10.2 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Transition Services Agreement, dated as of June 8, 2015, between The Babcock & Wilcox Company, as service provider, and Babcock & Wilcox Enterprises, Inc., as service receiver (incorporated by reference to Exhibit 10.3 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Transition Services Agreement, dated as of June 8, 2015, between Babcock & Wilcox Enterprises, Inc., as service provider, and The Babcock & Wilcox Company, as service receiver (incorporated by reference to Exhibit 10.4 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Assumption and Loss Allocation Agreement, dated as of June 19, 2015, by and among ACE American Insurance Company and the Ace Affiliates (as defined therein), Babcock & Wilcox Enterprises, Inc. and The Babcock & Wilcox Company (incorporated by reference to Exhibit 10.5 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Reinsurance Novation and Assumption Agreement, dated as of June 19, 2015, by and among ACE American Insurance Company and the Ace Affiliates (as defined therein), Creole Insurance Company and Dampkraft Insurance Company (incorporated by reference to Exhibit 10.6 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Novation and Assumption Agreement, dated as of June 19, 2015, by and among The Babcock & Wilcox Company, Babcock & Wilcox Enterprises, Inc., Dampkraft Insurance Company and Creole Insurance Company (incorporated by reference to Exhibit 10.7 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Amended and Restated 2015 Long-Term Incentive Plan of Babcock & Wilcox Enterprises, Inc. (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. current Report on Form 8-K filed May 6, 2016 (File No. 001-36876))
|
|
|
|
|
|
Babcock & Wilcox Enterprises, Inc. Executive Incentive Compensation Plan (incorporated by reference to Exhibit 10.9 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Babcock & Wilcox Enterprises, Inc. Management Incentive Compensation Plan (incorporated by reference to Exhibit 10.10 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
Supplemental Executive Retirement Plan of Babcock & Wilcox Enterprises, Inc. (incorporated by reference to Exhibit 10.11 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Babcock & Wilcox Enterprises, Inc. Defined Contribution Restoration Plan (incorporated by reference to Exhibit 10.12 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Intellectual Property Agreement, dated as of June 26, 2015, between Babcock & Wilcox Power Generation Group, Inc. and BWXT Foreign Holdings, LLC (incorporated by reference to Exhibit 10.13 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Intellectual Property Agreement, dated as of June 27, 2015, between Babcock & Wilcox Technology, Inc. and Babcock & Wilcox Investment Company (incorporated by reference to Exhibit 10.14 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Intellectual Property Agreement, dated as of May 29, 2015, between Babcock & Wilcox Canada Ltd. and B&W PGG Canada Corp. (incorporated by reference to Exhibit 10.15 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Intellectual Property Agreement, dated as of May 29, 2015, between Babcock & Wilcox mPower, Inc. and Babcock & Wilcox Power Generation Group, Inc. (incorporated by reference to Exhibit 10.16 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Intellectual Property Agreement, dated as of June 26, 2015, between The Babcock & Wilcox Company and Babcock & Wilcox Enterprises, Inc. (incorporated by reference to Exhibit 10.17 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the borrower, Bank of America, N.A., as Administrative Agent, and the Other Lenders Party Thereto (incorporated by reference to Exhibit 10.18 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Form of Change-in-Control Agreement, by and between Babcock & Wilcox Enterprises, Inc. and certain officers for officers elected prior to August 4, 2016 (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (File No. 001-36876))
|
|
|
|
|
|
Form of Restricted Stock Grant Agreement (Spin-off Award) (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Form of Restricted Stock Units Grant Agreement (incorporated by reference to Exhibit 10.2 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Form of Stock Option Grant Agreement (incorporated by reference to Exhibit 10.3 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (File No. 001-36876))
|
|
|
|
|
|
Form of Performance Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.23 to the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 001-36876))
|
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Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.24 to the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 001-36876))
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Form of Change-in-Control Agreement, by and between Babcock & Wilcox Enterprises, Inc. and certain officers for officers elected on or after August 4, 2016 (incorporated by reference to Exhibit 10.2 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (File No. 001-36876))
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Amendment No. 1 dated June 10, 2016 to Credit Agreement, dated May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the Borrower, Bank of America, N.A., as Administrative Agent, and the other Lenders party thereto (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (File No. 001-36876))
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Amendment No. 2 dated February 24, 2017 to Credit Agreement, dated May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the Borrower, Bank of America, N.A., as Administrative Agent, and the other Lenders party thereto.
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Form of Performance Unit Award Grant Agreement (Cash Settled) (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 (File No. 001-36876))
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Form of Special Restricted Stock Unit Award Grant Agreement (incorporated by reference to Exhibit 10.2 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 (File No. 001-36876))
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Amendment No. 3 dated August 9, 2017, to Credit Agreement dated May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the Borrower, Bank of America, N.A., as administrative Agent and Lender, and the other Lenders party thereto (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 (File No. 001-36876))
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Second Lien Credit Agreement, dated August 9, 2017, among Babcock & Wilcox Enterprises, Inc., as the Borrower, Lightship Capital LLC, as administrative Agent and Lender, and the other Lenders party thereto (incorporated by reference to Exhibit 10.2 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 (File No. 001-36876))
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Amendment No. 4 dated September 30, 2017, to Credit Agreement dated May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the Borrower, Bank of America, N.A., as administrative Agent and Lender, and the other Lenders party thereto (incorporated by reference to Exhibit 10.3 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 (File No. 001-36876))
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Agreement, dated as of January 3, 2018, among Babcock & Wilcox Enterprises, Inc., Vintage Capital Management, LLC, Kahn Capital Management, LLC, and Brian R. Kahn (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed January 3, 2018 (File No. 001-36876))
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Form of Joinder Agreement (incorporated by reference to Exhibit 10.2 to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed January 3, 2018 (File No. 001-36876))
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Offer Letter, by and between Babcock & Wilcox Enterprises, Inc. and Leslie C. Kass dated as of January 31, 2018 (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed February 1, 2018 (file no. 001-36876)
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Supplement to Employment Agreement, by and between Babcock & Wilcox Enterprises, Inc. and E. James Ferland dated as of January 31, 2018 (incorporated by reference to Exhibit 10.2 to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed February 1, 2018 (file no. 001-36876)
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Significant Subsidiaries of the Registrant
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Consent of Deloitte & Touche LLP
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Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer
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Rule 13a-14(a)/15d-14(a) certification of Chief Financial Officer
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Section 1350 certification of Chief Executive Officer
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Section 1350 certification of Chief Financial Officer
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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BABCOCK & WILCOX ENTERPRISES, INC.
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/s/ Leslie C. Kass
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March 1, 2018
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By:
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Leslie C. Kass
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President and Chief Executive Officer
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Signature
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Title
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/s/ Leslie C. Kass
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President, Chief Executive Officer and Director
(Principal Executive Officer)
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Leslie C. Kass
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/s/ Jenny L. Apker
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Senior Vice President and Chief Financial Officer
(Principal Financial Officer and Duly Authorized Representative)
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Jenny L. Apker
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/s/ Daniel W. Hoehn
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Vice President, Controller and Chief Accounting Officer
(Principal Accounting Officer and Duly Authorized Representative)
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Daniel W. Hoehn
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/s/ E. James Ferland
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Executive Chairman
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E. James Ferland
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/s/ Matthew E. Avril
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Director
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Matthew E. Avril
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/s/ Henry E. Bartoli
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Director
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Henry E. Bartoli
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/s/ Thomas A. Christopher
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Director
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Thomas A. Christopher
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/s/ Cynthia S. Dubin
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Director
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Cynthia S. Dubin
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/s/ Brian K. Ferraioli
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Director
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Brian K. Ferraioli
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/s/ Stephen G. Hanks
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Director
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Stephen G. Hanks
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/s/ Brian R. Kahn
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Director
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Brian R. Kahn
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/s/ Anne R. Pramaggiore
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Director
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Anne R. Pramaggiore
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/s/ Larry L. Weyers
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Director
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Larry L. Weyers
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Name of Company
|
Jurisdiction of
Organization
|
Percentage
of Ownership
Interest
|
Americon Equipment Services, Inc.
|
Delaware
|
100
|
Americon, LLC
|
Delaware
|
100
|
B&W de Panama, Inc.
|
Panama
|
100
|
B&W PGG Luxembourg Canada Holdings SARL
|
Luxembourg
|
100
|
B&W PGG Luxembourg Finance SARL
|
Luxembourg
|
100
|
B&W PGG Luxembourg Holdings SARL
|
Luxembourg
|
100
|
B and W SPIG South Africa
|
South Africa
|
100
|
Babcock & Wilcox Beijing Company, Ltd.
|
China
|
50
|
Babcock & Wilcox Construction Co., LLC
|
Delaware
|
100
|
Babcock & Wilcox de Monterrey, S.A. de C.V.
|
Mexico
|
100
|
Babcock & Wilcox Ebensburg Power, LLC
|
Delaware
|
100
|
Babcock & Wilcox Equity Investments, LLC
|
Delaware
|
100
|
Babcock & Wilcox Global Sales and Services Brazil Ltda.
|
Brazil
|
100
|
Babcock & Wilcox Global Sales & Services - Chile SpA
|
Chile
|
100
|
Babcock & Wilcox Global Sales and Service Pte. Ltd.
|
Singapore
|
100
|
Babcock & Wilcox Global Sales & Services SARL
|
Luxembourg
|
100
|
Babcock & Wilcox Holdings, LLC
|
Delaware
|
100
|
Babcock & Wilcox India Holdings, Inc.
|
Delaware
|
100
|
Babcock & Wilcox India Private Limited
|
India
|
100
|
Babcock & Wilcox International Investments Co., Inc.
|
Panama
|
100
|
Babcock & Wilcox International Sales and Service Corporation
|
Delaware
|
100
|
Babcock & Wilcox International, Inc.
|
Delaware
|
100
|
Babcock & Wilcox Loibl GmbH
|
Germany
|
100
|
Babcock & Wilcox MEGTEC Holdings, Inc.
|
Delaware
|
100
|
Babcock & Wilcox MEGTEC, LLC
|
Delaware
|
100
|
Babcock & Wilcox Monterrey Finance SARL
|
Luxembourg
|
100
|
Babcock & Wilcox Power Generation Group Canada Corp.
|
Nova Scotia
|
100
|
Babcock & Wilcox Singapore Pte. Ltd.
|
Singapore
|
100
|
Babcock & Wilcox Slovakia s.r.o.
|
Slovakia
|
100
|
Babcock & Wilcox SPIG, Inc.
|
New Jersey
|
100
|
Babcock & Wilcox Technology, LLC
|
Delaware
|
100
|
Babcock & Wilcox Universal Europe Ltd.
|
United Kingdom
|
100
|
Babcock & Wilcox Universal, Inc.
|
Wisconsin
|
100
|
Babcock & Wilcox Universal, S. de R.L. de C.V.
|
Mexico
|
100
|
Babcock & Wilcox Volund Limited
|
United Kingdom
|
100
|
Babcock & Wilcox Volund AB
|
Sweden
|
100
|
Babcock & Wilcox Volund A/S
|
Denmark
|
100
|
BWL Energy (Teesside) Ltd.
|
Northern Ireland
|
50
|
BWL Energy (Rye House) Ltd.
|
Northern Ireland
|
50
|
Name of Company
|
Jurisdiction of
Organization
|
Percentage
of Ownership
Interest
|
Dampkraft Insurance Company
|
South Carolina
|
100
|
D.C.S. Dry Cooling Services S.r.l.
|
Italy
|
100
|
Delta Power Services, LLC
|
Delaware
|
100
|
Diamond Operating Co., Inc.
|
Delaware
|
100
|
Diamond Power Australia Holdings, Inc.
|
Delaware
|
100
|
Diamond Power Central & Eastern Europe s.r.o.
|
Czech Republic
|
100
|
Diamond Power China Holdings, Inc.
|
Delaware
|
100
|
Diamond Power do Brasil Limitada
|
Brazil
|
100
|
Diamond Power Equity Investments, Inc.
|
Delaware
|
100
|
Diamond Power Finland OY
|
Finland
|
100
|
Diamond Power Germany GmbH
|
Germany
|
95
|
Diamond Power International, LLC
|
Delaware
|
100
|
Diamond Power Machine (Hubei) Co., Inc.
|
China
|
50
|
Diamond Power Services S.E.A. Ltd.
|
Thailand
|
50
|
Diamond Power Specialty (Proprietary) Limited
|
Republic of South Africa
|
100
|
Diamond Power Specialty Limited
|
United Kingdom
|
100
|
Diamond Power Sweden AB
|
Sweden
|
100
|
DPS Anson, LLC
|
Delaware
|
100
|
DPS Berlin, LLC
|
Delaware
|
100
|
DPS Cadillac, LLC
|
Delaware
|
100
|
DPS Florida, LLC
|
Delaware
|
100
|
DPS Gregory, LLC
|
Delaware
|
100
|
DPS Mecklenburg, LLC
|
Delaware
|
100
|
DPS Piedmont, LLC
|
Delaware
|
100
|
Ebensburg Energy, LLC
|
Delaware
|
100
|
Ebensburg Investors Limited Partnership
|
Pennsylvania
|
100
|
MEGTEC Energy & Environmental LLC
|
Delaware
|
100
|
MEGTEC Environmental Limited
|
United Kingdom
|
100
|
MEGTEC IEPG BV
|
Netherlands
|
100
|
MEGTEC India Holdings, LLC
|
Delaware
|
100
|
MEGTEC Systems AB
|
Sweden
|
100
|
MEGTEC Systems Amal AB
|
Sweden
|
100
|
MEGTEC Systems Australia, Inc.
|
Delaware
|
100
|
MEGTEC Systems India Private Ltd.
|
India
|
100
|
MEGTEC Systems Limited
|
United Kingdom
|
100
|
MEGTEC Systems S.A.S.
|
France
|
100
|
MEGTEC Systems Shanghai Ltd.
|
China
|
100
|
MEGTEC Systems, Inc.
|
Delaware
|
100
|
MEGTEC Thermal Energy & Environmental Technology (Shanghai), LTD.
|
China
|
100
|
MEGTEC TurboSonic Inc.
|
Ontario
|
100
|
MEGTEC TurboSonic Technologies, Inc.
|
Delaware
|
100
|
MTS Asia, Inc.
|
Delaware
|
100
|
MTS Environmental GmbH
|
Germany
|
100
|
O&M Holding Company
|
Delaware
|
100
|
Name of Company
|
Jurisdiction of
Organization
|
Percentage
of Ownership
Interest
|
P. T. Babcock & Wilcox Asia
|
Indonesia
|
100
|
Palm Beach Resource Recovery Corporation
|
Florida
|
100
|
Power Systems Operations, Inc.
|
Delaware
|
100
|
Servicios de Fabricacion de Valle Soleado, S.A. de C.V.
|
Mexico
|
100
|
Servicios Profesionales de Valle Soleado, S.A. de C.V.
|
Mexico
|
100
|
SOFCo - EFS Holdings LLC
|
Delaware
|
100
|
SPIG S.p.A.
|
Italy
|
100
|
SPIG S.p.A.
|
Ecuador
|
100
|
SPIG Kuhlturmtechnologien GmbH
|
Germany
|
100
|
SPIG Turn Apa de Racine
|
Romania
|
100
|
SPIG Vostock
|
Russia
|
95
|
SPIG Sogutma Sistemleri Tlc Ldt
|
Turkey
|
100
|
SPIG Cooling Towers India Private Limited
|
India
|
100
|
SPIG Torres de Resfriamento Ltda.
|
Brazil
|
100
|
SPIG (Shanxi) Cooling System Co., Ltd.
|
China
|
100
|
SPIG (Shanxi) Cooling Technology Company, Ltd.
|
China
|
60
|
SPIG KOREA LTD.
|
Korea
|
100
|
The Babcock & Wilcox Company
|
Delaware
|
100
|
Thermax Babcock & Wilcox Energy Solutions Private Limited
|
India
|
49
|
Universal Acoustic & Emission Technologies Pvt. Ltd.
|
India
|
100
|
Universal AET Holdings, LLC
|
Wisconsin
|
100
|
Universal Asia Pacific Pte. Ltd.
|
Singapore
|
100
|
Universal Silencer Mexico, LLC
|
Wisconsin
|
100
|
Universal Silencer Mexico II, LLC
|
Wisconsin
|
100
|
Universal Silencer (Shanghai) Co., Ltd.
|
China
|
100
|
1.
|
I have reviewed this annual report on Form 10-K of Babcock & Wilcox Enterprises, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
March 1, 2018
|
/s/ Leslie C. Kass
|
|
Leslie C. Kass
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Babcock & Wilcox Enterprises, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
March 1, 2018
|
/s/ Jenny L. Apker
|
|
Jenny L. Apker
|
|
Senior Vice President and Chief Financial Officer
|
(1)
|
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2017
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of B&W as of the dates and for the periods expressed in the Report.
|
Dated: March 1, 2018
|
/s/ Leslie C. Kass
|
|
Leslie C. Kass
|
|
President and Chief Executive Officer
|
(1)
|
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2017
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of B&W as of the dates and for the periods expressed in the Report.
|
Dated: March 1, 2018
|
/s/ Jenny L. Apker
|
|
Jenny L. Apker
|
|
Senior Vice President and Chief Financial Officer
|