BABCOCK & WILCOX ENTERPRISES, INC.
|
(Exact name of registrant as specified in its charter)
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DELAWARE
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001-36876
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47-2783641
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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20 SOUTH VAN BUREN AVENUE BARBERTON, OHIO
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44203
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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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Trading Symbol
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Name of Each Exchange on which Registered
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Common stock, $0.01 par value per share
|
BW
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New York Stock Exchange
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Item 1.01
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Entry into a Material Definitive Agreement
|
Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
|
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BABCOCK & WILCOX ENTERPRISES, INC.
|
|
|
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|
|
|
|
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August 8, 2019
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By:
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/s/ Louis Salamone
|
|
|
|
Louis Salamone
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|
|
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Executive Vice President, Chief Financial Officer and Chief Accounting Officer
(Principal Accounting Officer and Duly Authorized Representative)
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Exhibit 99.1
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News Release
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Investor Contact:
|
Media Contact:
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Megan Wilson
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Ryan Cornell
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Vice President, Corporate Development & Investor Relations
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Public Relations
|
Babcock & Wilcox Enterprises
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Babcock & Wilcox Enterprises
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704.625.4944 |
investors@babcock.com
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330.860.1345 |
rscornell@babcock.com
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|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||
|
2019
|
2018
|
|
2019
|
2018
|
||||||||
Revenues
|
$
|
248.1
|
|
$
|
291.3
|
|
|
$
|
480.1
|
|
$
|
544.5
|
|
Costs and expenses:
|
|
|
|
|
|
||||||||
Cost of operations
|
203.8
|
|
332.4
|
|
|
404.9
|
|
609.7
|
|
||||
Selling, general and administrative expenses
|
42.1
|
|
47.1
|
|
|
84.5
|
|
106.5
|
|
||||
Goodwill impairment
|
—
|
|
37.5
|
|
|
—
|
|
37.5
|
|
||||
Advisory fees and settlement costs
|
4.8
|
|
5.1
|
|
|
18.4
|
|
8.2
|
|
||||
Restructuring activities and spin-off transaction costs
|
0.9
|
|
3.8
|
|
|
7.0
|
|
10.7
|
|
||||
Research and development costs
|
0.7
|
|
1.3
|
|
|
1.5
|
|
2.4
|
|
||||
Loss on asset disposals, net
|
0.0
|
|
1.4
|
|
|
0.0
|
|
1.4
|
|
||||
Total costs and expenses
|
252.4
|
|
428.7
|
|
|
516.3
|
|
776.5
|
|
||||
Equity in loss of investees
|
—
|
|
—
|
|
|
—
|
|
(11.8
|
)
|
||||
Operating loss
|
(4.3
|
)
|
(137.4
|
)
|
|
(36.2
|
)
|
(243.8
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
||||||||
Interest expense
|
(26.8
|
)
|
(11.9
|
)
|
|
(38.0
|
)
|
(25.3
|
)
|
||||
Interest income
|
0.2
|
|
0.1
|
|
|
0.8
|
|
0.3
|
|
||||
Loss on debt extinguishment
|
(4.0
|
)
|
(49.2
|
)
|
|
(4.0
|
)
|
(49.2
|
)
|
||||
Loss on sale of business
|
(3.6
|
)
|
0.0
|
|
|
(3.6
|
)
|
0.0
|
|
||||
Benefit plans, net
|
2.5
|
|
7.1
|
|
|
5.5
|
|
14.1
|
|
||||
Foreign exchange
|
9.5
|
|
(20.2
|
)
|
|
(0.6
|
)
|
(17.7
|
)
|
||||
Other – net
|
0.0
|
|
(0.1
|
)
|
|
0.5
|
|
0.3
|
|
||||
Total other expense
|
(22.2
|
)
|
(74.3
|
)
|
|
(39.5
|
)
|
(77.7
|
)
|
||||
Loss before income tax expense
|
(26.4
|
)
|
(211.6
|
)
|
|
(75.7
|
)
|
(321.5
|
)
|
||||
Income tax expense (benefit)
|
1.9
|
|
(1.9
|
)
|
|
2.5
|
|
5.0
|
|
||||
Loss from continuing operations
|
(28.3
|
)
|
(209.7
|
)
|
|
(78.2
|
)
|
(326.5
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
0.7
|
|
(55.9
|
)
|
|
0.7
|
|
(59.4
|
)
|
||||
Net loss
|
(27.6
|
)
|
(265.6
|
)
|
|
(77.5
|
)
|
(385.9
|
)
|
||||
Net income (loss) attributable to noncontrolling interest
|
—
|
|
(0.2
|
)
|
|
0.1
|
|
(0.3
|
)
|
||||
Net loss attributable to stockholders
|
$
|
(27.6
|
)
|
$
|
(265.8
|
)
|
|
$
|
(77.4
|
)
|
$
|
(386.2
|
)
|
|
|
|
|
|
|
||||||||
Basic and diluted loss per common share:
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(1.54
|
)
|
$
|
(15.41
|
)
|
|
$
|
(4.26
|
)
|
$
|
(35.39
|
)
|
Discontinued operations
|
0.04
|
|
(4.11
|
)
|
|
0.04
|
|
(6.43
|
)
|
||||
Basic and diluted loss per common share
|
$
|
(1.50
|
)
|
$
|
(19.52
|
)
|
|
$
|
(4.22
|
)
|
$
|
(41.82
|
)
|
|
|
|
|
|
|
||||||||
Shares used in the computation of earnings per share:
|
|
|
|
|
|
||||||||
Basic and Diluted
(2)
|
18.4
|
|
13.6
|
|
|
18.4
|
|
9.2
|
|
(In millions, except per share amount)
|
June 30, 2019
|
December 31, 2018
|
||||
Cash and cash equivalents
|
$
|
35.2
|
|
$
|
43.2
|
|
Restricted cash and cash equivalents
|
9.2
|
|
17.1
|
|
||
Accounts receivable – trade, net
|
200.6
|
|
197.2
|
|
||
Accounts receivable – other
|
62.8
|
|
44.7
|
|
||
Contracts in progress
|
150.4
|
|
144.7
|
|
||
Inventories
|
63.8
|
|
61.3
|
|
||
Other current assets
|
64.6
|
|
41.4
|
|
||
Total current assets
|
586.6
|
|
549.6
|
|
||
Net property, plant and equipment
|
78.0
|
|
90.9
|
|
||
Goodwill
|
47.1
|
|
47.1
|
|
||
Intangible assets
|
28.4
|
|
30.8
|
|
||
Right-of-use assets
|
13.1
|
|
—
|
|
||
Other assets
|
18.8
|
|
27.1
|
|
||
Total assets
|
$
|
772.0
|
|
$
|
745.5
|
|
|
||||||
Revolving credit facilities
|
184.4
|
|
145.5
|
|
||
Last out term loans
|
183.1
|
|
30.6
|
|
||
Accounts payable
|
167.1
|
|
199.9
|
|
||
Accrued employee benefits
|
27.4
|
|
19.3
|
|
||
Advance billings on contracts
|
102.3
|
|
149.4
|
|
||
Accrued warranty expense
|
39.6
|
|
45.1
|
|
||
Lease liabilities
|
4.2
|
|
—
|
|
||
Other accrued liabilities
|
97.1
|
|
122.1
|
|
||
Total current liabilities
|
805.1
|
|
712.0
|
|
||
Pension and other accumulated postretirement benefit liabilities
|
275.1
|
|
281.6
|
|
||
Noncurrent lease liabilities
|
8.8
|
|
—
|
|
||
Other noncurrent liabilities
|
26.0
|
|
29.2
|
|
||
Total liabilities
|
1,115.1
|
|
1,022.8
|
|
||
|
|
|
||||
Commitments and contingencies
|
|
|
||||
Stockholders' deficit:
|
|
|
||||
Common stock, par value $0.01 per share, authorized 500,000 shares at June 30, 2019 and 200,000 shares at December 31, 2018, respectively; issued and outstanding 16,888 and 16,879 shares at June 30, 2019 and December 31, 2018, respectively
(1)
|
1.7
|
|
1.7
|
|
||
Capital in excess of par value
|
1,055.8
|
|
1,047.1
|
|
||
Treasury stock at cost, 593 and 587 shares at June 30, 2019 and December 31, 2018, respectively
(1)
|
(105.6
|
)
|
(105.6
|
)
|
||
Accumulated deficit
|
(1,295.3
|
)
|
(1,217.9
|
)
|
||
Accumulated other comprehensive loss
|
(8.0
|
)
|
(11.4
|
)
|
||
Stockholders' deficit attributable to shareholders
|
(351.4
|
)
|
(286.1
|
)
|
||
Noncontrolling interest
|
8.4
|
|
8.8
|
|
||
Total stockholders' deficit
|
(343.0
|
)
|
(277.3
|
)
|
||
Total liabilities and stockholders' deficit
|
$
|
772.0
|
|
$
|
745.5
|
|
|
Six months ended June 30,
|
|||||
|
2019
|
2018
|
||||
Cash flows from operating activities:
|
|
|
||||
Net loss
|
$
|
(77.5
|
)
|
$
|
(385.9
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
||||
Depreciation and amortization of long-lived assets
|
13.8
|
|
16.9
|
|
||
Amortization of deferred financing costs, debt discount and payment-in-kind interest
|
23.1
|
|
7.2
|
|
||
Amortization of right of use assets
|
2.9
|
|
—
|
|
||
Loss on sale of business
|
3.6
|
|
—
|
|
||
Loss on debt extinguishment
|
4.0
|
|
49.2
|
|
||
Goodwill impairment of discontinued operations
|
—
|
|
72.3
|
|
||
Goodwill impairment
|
—
|
|
37.5
|
|
||
Income from equity method investees
|
—
|
|
(6.6
|
)
|
||
Other-than-temporary impairment of equity method investment in TBWES
|
—
|
|
18.4
|
|
||
Losses on asset disposals and impairments
|
0.0
|
1.9
|
|
|||
Reserve for claims receivable
|
—
|
|
15.5
|
|
||
Benefit from deferred income taxes, including valuation allowances
|
(0.8
|
)
|
(1.5
|
)
|
||
Mark to market losses (gains) and prior service cost amortization for pension plans
|
0.4
|
|
(1.1
|
)
|
||
Stock-based compensation, net of associated income taxes
|
0.6
|
|
1.0
|
|
||
Changes in assets and liabilities:
|
|
|
||||
Accounts receivable
|
(5.8
|
)
|
40.6
|
|
||
Contracts in progress and advance billings on contracts
|
(53.6
|
)
|
(30.5
|
)
|
||
Inventories
|
(4.0
|
)
|
5.9
|
|
||
Income taxes
|
1.3
|
|
(4.0
|
)
|
||
Accounts payable
|
(31.7
|
)
|
(15.1
|
)
|
||
Accrued and other current liabilities
|
(15.7
|
)
|
20.3
|
|
||
Accrued contract loss
|
(45.8
|
)
|
9.7
|
|
||
Pension liabilities, accrued postretirement benefits and employee benefits
|
(0.1
|
)
|
(17.6
|
)
|
||
Other, net
|
(7.9
|
)
|
15.0
|
|
||
Net cash used operating activities
|
(193.0
|
)
|
(150.6
|
)
|
||
Cash flows from investing activities:
|
|
|
||||
Purchase of property, plant and equipment
|
(0.4
|
)
|
(4.4
|
)
|
||
Proceeds from sale of business
|
7.4
|
|
5.1
|
|
||
Proceeds from sale of equity method investments in joint venture
|
—
|
|
21.1
|
|
||
Purchases of available-for-sale securities
|
(4.2
|
)
|
(11.4
|
)
|
||
Sales and maturities of available-for-sale securities
|
2.9
|
|
13.6
|
|
||
Other, net
|
(0.5
|
)
|
0.2
|
|
||
Net cash from investing activities
|
5.2
|
|
24.2
|
|
||
Cash flows from financing activities:
|
|
|
||||
Borrowings under our U.S. revolving credit facility
|
179.7
|
|
307.3
|
|
||
Repayments of our U.S. revolving credit facility
|
(140.2
|
)
|
(205.3
|
)
|
||
Repayments of our second lien term loan facility
|
—
|
|
(212.6
|
)
|
||
Borrowings under Last Out Term Loan Tranche A-2 from related party
|
10.0
|
|
—
|
|
||
Borrowings under Last Out Term Loan Tranche A-3 from related party
|
141.4
|
|
—
|
|
||
Repayments under our foreign revolving credit facilities
|
(0.6
|
)
|
(5.0
|
)
|
||
Shares of our common stock returned to treasury stock
|
0.0
|
(0.7
|
)
|
|||
Proceeds from rights offering
|
—
|
|
248.4
|
|
||
Costs related to rights offering
|
(0.7
|
)
|
(3.2
|
)
|
||
Debt issuance costs
|
(14.4
|
)
|
(6.7
|
)
|
||
Net cash from financing activities
|
175.1
|
|
122.1
|
|
|
Six months ended June 30,
|
|||||
|
2019
|
2018
|
||||
Effects of exchange rate changes on cash
|
(3.3
|
)
|
(7.0
|
)
|
||
Net decrease in cash, cash equivalents and restricted cash
|
(15.9
|
)
|
(11.4
|
)
|
||
Less net increase in cash and cash equivalents of discontinued operations
|
—
|
|
(2.5
|
)
|
||
Net decrease in cash, cash equivalents and restricted cash of continuing operations
|
(15.9
|
)
|
(8.9
|
)
|
||
Cash, cash equivalents and restricted cash of continuing operations, beginning of period
|
60.3
|
|
69.7
|
|
||
Cash, cash equivalents and restricted cash of continuing operations, end of period
|
$
|
44.4
|
|
$
|
60.8
|
|
SEGMENT RESULTS
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||
|
2019
|
2018
|
|
2019
|
2018
|
||||||||
REVENUES:
|
|
|
|
|
|
||||||||
Babcock & Wilcox segment
|
$
|
201.0
|
|
$
|
197.8
|
|
|
$
|
389.5
|
|
$
|
356.9
|
|
Vølund & Other Renewable segment
|
33.7
|
|
55.0
|
|
|
63.2
|
|
115.0
|
|
||||
SPIG segment
|
22.8
|
|
46.0
|
|
|
51.7
|
|
82.8
|
|
||||
Eliminations
|
(9.4
|
)
|
(7.4
|
)
|
|
(24.4
|
)
|
(10.1
|
)
|
||||
|
$
|
248.1
|
|
$
|
291.3
|
|
|
$
|
480.1
|
|
$
|
544.5
|
|
|
|
|
|
|
|
||||||||
GROSS PROFIT (LOSS):
|
|
|
|
|
|
||||||||
Babcock & Wilcox segment
|
$
|
37.9
|
|
$
|
30.0
|
|
|
$
|
69.0
|
|
$
|
60.9
|
|
Vølund & Other Renewable segment
|
5.1
|
|
(69.3
|
)
|
|
2.2
|
|
(119.8
|
)
|
||||
SPIG segment
|
2.4
|
|
0.1
|
|
|
6.1
|
|
(2.7
|
)
|
||||
Intangible asset amortization included in cost of operations
|
(1.0
|
)
|
(1.8
|
)
|
|
(2.1
|
)
|
(3.7
|
)
|
||||
|
|
|
|
|
|
||||||||
ADJUSTED EBITDA:
|
|
|
|
|
|
||||||||
Babcock & Wilcox segment
|
$
|
19.0
|
|
$
|
9.9
|
|
|
$
|
28.0
|
|
$
|
14.1
|
|
Vølund & Other Renewable segment
|
(0.8
|
)
|
(78.6
|
)
|
|
(9.6
|
)
|
(140.4
|
)
|
||||
SPIG segment
|
(0.1
|
)
|
(6.2
|
)
|
|
0.5
|
|
(13.5
|
)
|
||||
Corporate
|
(9.4
|
)
|
(6.2
|
)
|
|
(14.4
|
)
|
(17.8
|
)
|
||||
Research and development costs
|
(0.7
|
)
|
(1.3
|
)
|
|
(1.5
|
)
|
(2.4
|
)
|
||||
|
$
|
8.0
|
|
$
|
(82.4
|
)
|
|
$
|
3.1
|
|
$
|
(160.1
|
)
|
|
|
|
|
|
|
||||||||
AMORTIZATION EXPENSE:
|
|
|
|
|
|
||||||||
Babcock & Wilcox segment
|
$
|
0.2
|
|
$
|
0.2
|
|
|
$
|
0.3
|
|
$
|
0.4
|
|
Vølund & Other Renewable segment
|
0.2
|
|
0.2
|
|
|
0.3
|
|
0.4
|
|
||||
SPIG segment
|
0.8
|
|
1.6
|
|
|
1.7
|
|
3.3
|
|
||||
|
$
|
1.1
|
|
$
|
2.0
|
|
|
$
|
2.3
|
|
$
|
4.1
|
|
|
|
|
|
|
|
||||||||
DEPRECIATION EXPENSE:
|
|
|
|
|
|
||||||||
Babcock & Wilcox segment
|
$
|
4.3
|
|
$
|
3.2
|
|
|
$
|
9.2
|
|
$
|
6.3
|
|
Vølund & Other Renewable segment
|
0.6
|
|
0.9
|
|
|
1.4
|
|
1.9
|
|
||||
SPIG segment
|
0.5
|
|
0.5
|
|
|
1.0
|
|
1.0
|
|
||||
Corporate
|
—
|
|
0.3
|
|
|
—
|
|
0.6
|
|
||||
|
$
|
5.4
|
|
$
|
4.9
|
|
|
$
|
11.5
|
|
$
|
9.8
|
|
|
|
|
|
|
|
||||||||
BOOKINGS:
|
|
|
|
|
|
||||||||
Babcock & Wilcox segment
|
$
|
140
|
|
$
|
132
|
|
|
$
|
327
|
|
$
|
403
|
|
Vølund & Other Renewable segment
(2)(3)
|
(78
|
)
|
(23
|
)
|
|
(59
|
)
|
23
|
|
||||
SPIG segment
|
18
|
|
18
|
|
|
30
|
|
45
|
|
||||
Other/Eliminations
|
(13
|
)
|
(1
|
)
|
|
(15
|
)
|
(2
|
)
|
||||
|
$
|
67
|
|
$
|
126
|
|
|
$
|
283
|
|
$
|
469
|
|
|
|
|
|
|
|
||||||||
|
As of June 30,
|
|
|
|
|||||||||
BACKLOG:
|
2019
|
2018
|
|
|
|
||||||||
Babcock & Wilcox segment
|
$
|
323
|
|
$
|
500
|
|
|
|
|
||||
Vølund & Other Renewable segment
|
205
|
|
916
|
|
|
|
|
||||||
SPIG segment
|
65
|
|
137
|
|
|
|
|
||||||
Other/Eliminations
|
(8
|
)
|
(35
|
)
|
|
|
|
||||||
|
$
|
585
|
|
$
|
1,518
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||
|
2019
|
2018
|
|
2019
|
2018
|
||||||||
Adjusted EBITDA
(2)
|
|
|
|
|
|
||||||||
Babcock & Wilcox segment
(3)
|
$
|
19.0
|
|
$
|
9.9
|
|
|
$
|
28.0
|
|
$
|
14.1
|
|
Vølund & Other Renewable segment
|
(0.8
|
)
|
(78.6
|
)
|
|
(9.6
|
)
|
(140.4
|
)
|
||||
SPIG segment
|
(0.1
|
)
|
(6.2
|
)
|
|
0.5
|
|
(13.5
|
)
|
||||
Corporate
(4)
|
(9.4
|
)
|
(6.2
|
)
|
|
(14.4
|
)
|
(17.8
|
)
|
||||
Research and development costs
|
(0.7
|
)
|
(1.3
|
)
|
|
(1.5
|
)
|
(2.4
|
)
|
||||
Total Adjusted EBITDA
|
8.0
|
|
(82.4
|
)
|
|
3.1
|
|
(160.1
|
)
|
||||
|
|
|
|
|
|
||||||||
Restructuring activities and spin-off transaction costs
|
(0.9
|
)
|
(3.8
|
)
|
|
(7.0
|
)
|
(10.7
|
)
|
||||
Financial advisory services
|
(3.2
|
)
|
(5.1
|
)
|
|
(7.2
|
)
|
(8.2
|
)
|
||||
Settlement cost to exit Vølund contract
(5)
|
—
|
|
—
|
|
|
(6.6
|
)
|
—
|
|
||||
Advisory fees for settlement costs and liquidity planning
|
(1.6
|
)
|
—
|
|
|
(4.7
|
)
|
—
|
|
||||
Goodwill impairment
|
—
|
|
(37.5
|
)
|
|
—
|
|
(37.5
|
)
|
||||
Impairment of equity method investment in TBWES
|
—
|
|
—
|
|
|
—
|
|
(18.4
|
)
|
||||
Gain on sale of equity method investment in BWBC
|
—
|
|
—
|
|
|
—
|
|
6.5
|
|
||||
Depreciation & amortization
|
(6.5
|
)
|
(6.9
|
)
|
|
(13.8
|
)
|
(13.9
|
)
|
||||
Loss on asset disposal
|
0.0
|
(1.5
|
)
|
|
0.0
|
(1.5
|
)
|
||||||
Operating loss
|
(4.3
|
)
|
(137.4
|
)
|
|
(36.2
|
)
|
(243.8
|
)
|
||||
Interest expense, net
|
(26.6
|
)
|
(11.8
|
)
|
|
(37.2
|
)
|
(25.1
|
)
|
||||
Loss on debt extinguishment
|
(4.0
|
)
|
(49.2
|
)
|
|
(4.0
|
)
|
(49.2
|
)
|
||||
Loss on sale of business
|
(3.6
|
)
|
—
|
|
|
(3.6
|
)
|
—
|
|
||||
Net pension benefit before MTM
|
3.3
|
|
6.5
|
|
|
6.8
|
|
13.5
|
|
||||
MTM (gain) loss from benefit plans
|
(0.9
|
)
|
0.5
|
|
|
(1.3
|
)
|
0.5
|
|
||||
Foreign exchange
|
9.5
|
|
(20.2
|
)
|
|
(0.6
|
)
|
(17.7
|
)
|
||||
Other – net
|
0.0
|
(0.1
|
)
|
|
0.5
|
|
0.3
|
|
|||||
Loss before income tax expense
|
(26.4
|
)
|
(211.6
|
)
|
|
(75.7
|
)
|
(321.5
|
)
|
||||
Income tax expense (benefit)
|
1.9
|
|
(1.9
|
)
|
|
2.5
|
|
5.0
|
|
||||
Loss from continuing operations
|
(28.3
|
)
|
(209.7
|
)
|
|
(78.2
|
)
|
(326.5
|
)
|
||||
Gain (loss) from discontinued operations, net of tax
|
0.7
|
|
(55.9
|
)
|
|
0.7
|
|
(59.4
|
)
|
||||
Net loss
|
(27.6
|
)
|
(265.6
|
)
|
|
(77.5
|
)
|
(385.9
|
)
|
||||
Net income (loss) attributable to noncontrolling interest
|
0.0
|
|
(0.2
|
)
|
|
0.1
|
|
(0.3
|
)
|
||||
Net loss attributable to stockholders
|
$
|
(27.6
|
)
|
$
|
(265.8
|
)
|
|
$
|
(77.4
|
)
|
$
|
(386.2
|
)
|
Exhibit 99.2
|
News Release
|
Investor Contact:
|
Media Contact:
|
Megan Wilson
|
Ryan Cornell
|
Vice President, Corporate Development & Investor Relations
|
Public Relations
|
Babcock & Wilcox Enterprises
|
Babcock & Wilcox Enterprises
|
704.625.4944 |
investors@babcock.com
|
330.860.1345 |
rscornell@babcock.com
|