UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended ~~June 30, 2021~~March 31, 2022


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

For the transition period from to

Commission File No. 001-36876

BABCOCK & WILCOX ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)


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

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

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

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


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

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐☒

Non-accelerated filer

☒☐

Smaller reporting company

☒☐

Emerging growth company

☐

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

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

Yes ☐ No ☒

The number of shares of the registrant's common stock outstanding at ~~August 6, 2021~~May 2, 2022 was ~~85,820,578.~~86,337,832.

TABLE OF CONTENTS


		PAGE

Cautionary Statement Concerning Forward-Looking Information		3
PART I - FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements	43
	Condensed Consolidated Statements of Operations for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020 (Unaudited)~~	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)	5
	Condensed Consolidated Balance Sheets as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (Unaudited)	6
	Condensed Consolidated Statement of Stockholders' Equity (Deficit) ~~Equity~~ for each of the Three Month s Periods Ended March 31, a nd ~~June 30~~ of 2022, and 2021 ~~and 2020~~ (Unaudited)	7
	Condensed Consolidated Statements of Cash Flows for the S ix Three Months Ended ~~June 30~~,March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)	98
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operation	3533
	Overview	3533
	Results of Operations - Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~	3734
	Liquidity and Capital Resources	4440
	Critical Accounting Policies and Estimates	4742
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4742
Item 4.	Controls and Procedures	4743
PART III I - OTHER INFORMATION
Item 1.	Legal Proceedings	4843
Item 1A.	Risk Factors	4843
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4843
Item 6.	Exhibits	4944
SIGNATURES		5146

***** Cautionary Statement Concerning Forward-Looking Information *****

This ~~quarterly report,~~Quarterly Report on Form 10-Q, including Management's Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical or current fact included in this Quarterly Report are forward-looking statements. You should not place undue reliance on these statements. ~~Statements that~~Forward-looking statements include words such as “expect,” “intend,” “plan,” “likely,” “seek,” “believe,” “project,” “forecast,” “target,” “goal,” “potential,” “estimate,” “may,” “might,” “will,” “would,” “should,” “could,” “can,” “have,” “due,” “anticipate,” “assume,” “contemplate,” “continue” and other words and terms of similar meaning in connection with any discussion of the ~~words "expect," "intend," "plan," "believe," "project," "forecast," "estimate," "may," "should," "anticipate" and similar statements~~timing or nature of a future operational performance or ~~forward-looking nature identify forward-looking statements.~~other events.

These forward-looking statements are based on management’s current expectations and involve a number of risks and uncertainties, including, among other things, the impact of COVID-19 ~~on us~~and the invasion of Ukraine by Russia and the capital markets and global economic climate generally; our ability to integrate acquired businesses and the impact of those acquired businesses on our cash flows, results of operations and financial condition, including our recent acquisitions of Fosler Construction Company Inc., VODA A/S, Fossil Power Systems, Inc., and Optimus Industries, LLC; our recognition of any asset impairments as a result of any decline in the value of our assets or our efforts to dispose of any assets in the future; our ability to obtain and maintain sufficient financing to provide liquidity to meet our business objectives, surety bonds, letters of credit and similar financing; our ability to comply with the requirements of, and to service the indebtedness under, our debt facility agreements; our ability to pay dividends on our 7.75% Series A Cumulative Perpetual Preferred ~~Stock,~~Stock; our ability to make interest payments on our 8.125% senior notes due 2026 and our 6.50% notes due 2026; the highly competitive nature of our businesses and our ability to win work, including identified project opportunities in our pipeline; general economic and business conditions, including changes in interest rates and currency exchange rates; cancellations of and adjustments to backlog and the resulting impact from using backlog as an indicator of future earnings; our ability to perform contracts on time and on budget, in accordance with the schedules and terms established by the applicable contracts with customers; failure by third-party subcontractors, partners or suppliers to perform their obligations on time and as specified; our ability to successfully resolve claims by vendors for goods and services provided and claims by customers for items under warranty; our ability to realize anticipated savings and operational benefits from our restructuring plans, and other cost savings initiatives; our ability to successfully address productivity and schedule issues in our B&W Renewable, B&W Environmental and B&W Thermal ~~segments, including the ability to complete our B&W Renewable's European EPC projects and B&W Environmental's U.S. loss projects within the expected time frame and the estimated costs;~~segments; our ability to successfully partner with third parties to win and execute contracts within our B&W Environmental, B&W Renewable and B&W Thermal segments; changes in our effective tax rate and tax positions, including any limitation on our ability to use our net operating loss carryforwards and other tax assets; our ability to successfully manage research and development projects and costs, including our efforts to successfully develop and commercialize new technologies and products; the operating risks normally incident to our lines of business, including professional liability, product liability, warranty and other claims against us; difficulties we may encounter in obtaining regulatory or other necessary permits or approvals; changes in actuarial assumptions and market fluctuations that affect our net pension liabilities and income; our ability to successfully compete with current and future competitors; our ability to negotiate and maintain good relationships with labor unions; changes in pension and medical expenses associated with our retirement benefit programs; social, political, competitive and economic situations in foreign countries where we do business or seek new ~~business;~~business, and the other factors specified and set forth under "Risk Factors" in our periodic reports filed with the Securities and Exchange Commission, including our most recent annual report on Form ~~10-K.~~10-K filed on March 8, 2022.

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

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

PART I ~~- FINANCIAL INFORMATION~~

ITEM 1. Condensed Consolidated Financial Statements

BABCOCK & WILCOX ENTERPRISES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended June 30, Six months ended June 30,
(in thousands, except per share amounts) 2021 2020 2021 2020
Revenues $ 202,860 $ 135,397 $ 371,108 $ 283,951
Costs and expenses:
Cost of operations 158,799 102,907 290,184 217,535
Selling, general and administrative expenses 33,704 34,579 74,161 72,187
Advisory fees and settlement costs 4,526 1,989 7,817 6,228
Restructuring activities 2,400 2,392 3,393 4,343
Research and development costs 609 1,231 1,197 2,572
Loss (gain) on asset disposals, net 38 2 (1,966) (913)
Total costs and expenses 200,076 143,100 374,786 301,952
Operating income (loss) 2,784 (7,703) (3,678) (18,001)
Other income (expense):
Interest expense (8,021) (15,482) (22,244) (37,573)
Interest income 146 223 255 263
Gain (loss) on debt extinguishment 6,530 (6,194) 6,530 (6,194)
(Loss) gain on sale of business (2,598) (108) (2,240) (108)
Benefit plans, net 5,924 7,450 15,022 14,986
Foreign exchange 1,826 7,112 617 (2,214)
Other – net 96 (2,586) (182) (2,792)
Total other income (expense) 3,903 (9,585) (2,242) (33,632)
Income (loss) before income tax expense 6,687 (17,288) (5,920) (51,633)
Income tax expense 3,546 845 6,382 35
Income (loss) from continuing operations 3,141 (18,133) (12,302) (51,668)
(Loss) income from discontinued operations, net of tax 0 (113) 0 1,800
Net income (loss) 3,141 (18,246) (12,302) (49,868)
Net (income) loss attributable to non-controlling interest (15) 142 (36) 238
Net income (loss) attributable to stockholders 3,126 (18,104) (12,338) (49,630)
Less: Dividend on Series A preferred stock 1,731 0 1,731 0
Net income (loss) attributable to stockholders of common stock $ 1,395 $ (18,104) $ (14,069) $ (49,630)
Basic earnings (loss) per share
Continuing operations $ 0.02 $ (0.39) $ (0.18) $ (1.10)
Discontinued operations 0 0 0 0.04
Basic earnings (loss) per share $ 0.02 $ (0.39) $ (0.18) $ (1.06)
Diluted earnings (loss) per share
Continuing operations $ 0.02 $ (0.39) $ (0.18) $ (1.10)
Discontinued operations 0 0 0 0.04
Diluted earnings (loss) per share $ 0.02 $ (0.39) $ (0.18) $ (1.06)
Shares used in the computation of earnings (loss) per share:
Basic 85,724 46,853 78,589 46,628
Diluted 87,003 46,853 78,589 46,628


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

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


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

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




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




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

See accompanying notes to Condensed Consolidated Financial Statements.

BABCOCK & WILCOX ENTERPRISES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 2021 2020
Net income (loss) $ 3,141 $ (18,246) $ (12,302) $ (49,868)
Other comprehensive income (loss):
Currency translation adjustments (CTA) (1,478) (4,095) (1,548) (1,715)
Reclassification of CTA to net loss 0 0 (4,512) 0
Benefit obligations:
Amortization of benefit plan benefits 198 (246) 396 (492)
Other comprehensive loss (1,280) (4,341) (5,664) (2,207)
Total comprehensive income (loss) 1,861 (22,587) (17,966) (52,075)
Comprehensive income attributable to non-controlling interest (10) 105 (7) 259
Comprehensive income (loss) attributable to stockholders $ 1,851 $ (22,482) $ (17,973) $ (51,816)


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

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






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

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

See accompanying notes to Condensed Consolidated Financial Statements.

BABCOCK & WILCOX ENTERPRISES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


(in thousands, except per share amount)	(in thousands, except per share amount)	June 30, 2021		December 31, 2020		(in thousands, except per share amount)	March 31, 2022		December 31, 2021
Cash, cash equivalents and restricted cash		$	143,598	$	67,423
Cash and cash equivalents						Cash and cash equivalents	$	108,137	$	224,874
Restricted cash and cash equivalents						Restricted cash and cash equivalents	8,833		1,841
Accounts receivable – trade, net	Accounts receivable – trade, net	132,341		128,317		Accounts receivable – trade, net	170,464		132,068
Accounts receivable – other	Accounts receivable – other	34,622		35,442		Accounts receivable – other	39,819		34,553
Contracts in progress	Contracts in progress	63,937		59,308		Contracts in progress	95,972		80,176
Inventories		71,003		67,161
Inventories, net						Inventories, net	90,401		79,527
Other current assets	Other current assets	15,355		26,421		Other current assets	27,343		29,395
Current assets held for sale		0		4,728

Total current assets	Total current assets	460,856		388,800		Total current assets	540,969		582,434
Net property, plant and equipment, and finance lease	Net property, plant and equipment, and finance lease	83,366		85,078		Net property, plant and equipment, and finance lease	77,156		85,627
Goodwill	Goodwill	47,413		47,363		Goodwill	174,371		116,462
Intangible assets		21,652		23,908
Intangible assets, net						Intangible assets, net	65,452		43,795
Right-of-use assets	Right-of-use assets	9,399		10,814		Right-of-use assets	30,500		30,163
Other assets	Other assets	40,688		24,673		Other assets	66,251		54,784
Non-current assets held for sale		1,766		11,156

Total assets	Total assets	$	665,140	$	591,792	Total assets	$	954,699	$	913,265

Accounts payable	Accounts payable	$	87,541	$	73,481	Accounts payable	$	97,840	$	85,929
Accrued employee benefits	Accrued employee benefits	13,998		13,906		Accrued employee benefits	12,245		12,989
Advance billings on contracts	Advance billings on contracts	53,142		64,002		Advance billings on contracts	99,910		68,380
Accrued warranty expense	Accrued warranty expense	16,376		25,399		Accrued warranty expense	11,873		12,925
Financing lease liabilities						Financing lease liabilities	1,973		2,445
Operating lease liabilities	Operating lease liabilities	3,728		3,995		Operating lease liabilities	4,078		3,950
Other accrued liabilities	Other accrued liabilities	60,213		81,744		Other accrued liabilities	75,949		54,385
Loan payable		2,564		0
Current liabilities held for sale		0		8,305
Loans payable						Loans payable	13,433		12,380

Total current liabilities	Total current liabilities	237,562		270,832		Total current liabilities	317,301		253,383
Senior notes	Senior notes	168,357		0		Senior notes	328,870		326,366
Last out term loans		0		183,330
Revolving credit facilities		0		164,300
Pension and other accumulated postretirement benefit liabilities		213,042		252,292
Long term loans payable						Long term loans payable	1,476		1,543

Pension and other postretirement benefit liabilities						Pension and other postretirement benefit liabilities	174,873		182,730
Non-current finance lease liabilities	Non-current finance lease liabilities	33,237		29,690		Non-current finance lease liabilities	29,094		29,369
Non-current operating lease liabilities	Non-current operating lease liabilities	5,888		7,031		Non-current operating lease liabilities	27,032		26,685
Other non-current liabilities	Other non-current liabilities	22,773		22,579		Other non-current liabilities	32,111		34,567
Total liabilities	Total liabilities	680,859		930,054		Total liabilities	910,757		854,643
Commitments and contingencies	Commitments and contingencies	0				Commitments and contingencies	0		0
Stockholders' deficit:
Preferred stock, par value $0.01 per share, authorized shares of 20,000; issued and outstanding shares of 7,362 and 0 at June 30, 2021 and December 30, 2020, respectively		74		0
Common stock, par value $0.01 per share, authorized shares of 500,000; issued and outstanding shares of 85,729 and 54,452 at June 30, 2021 and December 31, 2020, respectively		5,103		4,784
Stockholders' equity:						Stockholders' equity:
Preferred stock, par value $0.01 per share, authorized shares of 20,000; issued and outstanding shares of 7,669 and 7,669 at March 31, 2022 and December 31, 2021, respectively						Preferred stock, par value $0.01 per share, authorized shares of 20,000; issued and outstanding shares of 7,669 and 7,669 at March 31, 2022 and December 31, 2021, respectively	77		77
Common stock, par value $0.01 per share, authorized shares of 500,000; issued and outstanding shares of 86,338 and 86,286 at March 31, 2022 and December 31, 2021, respectively						Common stock, par value $0.01 per share, authorized shares of 500,000; issued and outstanding shares of 86,338 and 86,286 at March 31, 2022 and December 31, 2021, respectively	5,111		5,110
Capital in excess of par value	Capital in excess of par value	1,509,697		1,164,436		Capital in excess of par value	1,520,545		1,518,872
Treasury stock at cost, 1,313 and 718 shares at June 30, 2021 and December 31, 2020, respectively		(109,301)		(105,990)
Treasury stock at cost, 1,553 and 1,525 shares at March 31, 2022 and December 31, 2021, respectively						Treasury stock at cost, 1,553 and 1,525 shares at March 31, 2022 and December 31, 2021, respectively	(111,155)		(110,934)
Accumulated deficit	Accumulated deficit	(1,364,275)		(1,350,206)		Accumulated deficit	(1,333,133)		(1,321,154)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(58,054)		(52,390)		Accumulated other comprehensive loss	(62,514)		(58,822)
Stockholders' deficit attributable to shareholders		(16,756)		(339,366)
Stockholders' equity attributable to shareholders						Stockholders' equity attributable to shareholders	18,931		33,149
Non-controlling interest	Non-controlling interest	1,037		1,104		Non-controlling interest	25,011		25,473
Total stockholders' deficit		(15,719)		(338,262)
Total liabilities and stockholders' deficit		$	665,140	$	591,792
Total stockholders' equity						Total stockholders' equity	43,942		58,622
Total liabilities and stockholders' equity						Total liabilities and stockholders' equity	$	954,699	$	913,265

See accompanying notes to Condensed Consolidated Financial Statements.

BABCOCK & WILCOX ENTERPRISES, INC.

CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) ~~EQUITY~~

Common Stock Preferred Stock Capital In
Excess of
Par Value Treasury Stock Accumulated Deficit Accumulated
Other
Comprehensive
Loss Non-controlling
Interest Total
Stockholders’
Deficit
Shares Par
Value Shares Par
Value
(in thousands, except share and per share amounts)
Balance at December 31, 2020 54,452 $ 4,784 0 $ 0 $ 1,164,436 $ (105,990) $ (1,350,206) $ (52,390) $ 1,104 $ (338,262)
Net (loss) income — — — — — — (15,464) — 21 (15,443)
Currency translation adjustments — — — — — — — (4,582) (24) (4,606)
Defined benefit obligations — — — — — — — 198 — 198
Stock-based compensation charges 1,725 22 — — 4,480 (3,308) — — — 1,194
Common stock offering, net 29,487 295 — — 161,218 — — — — 161,513
Dividends to non-controlling interest — — — — — — — — (38) (38)
Balance at March 31, 2021 85,664 $ 5,101 0 $ 0 $ 1,330,134 $ (109,298) $ (1,365,670) $ (56,774) $ 1,063 $ (195,444)
Net income — — — — — — 3,126 — 15 3,141
Currency translation adjustments — — — — — — — (1,478) (5) (1,483)
Defined benefit obligations — — — — — — — 198 — 198
Stock-based compensation charges 65 2 — — 1,201 (3) — — — 1,200
Common stock offering — — — — (529) — — — — (529)
Preferred stock offering, net — — 4,445 45 105,998 — — — — 106,043
Equitized Last Out Term Loan principal payment — — 2,917 29 72,893 — — — — 72,922
Dividends to preferred stockholders — — — — — — (1,731) — — (1,731)
Dividends to non-controlling interest — — — — — — — — (36) (36)
Balance at June 30, 2021 85,729 $ 5,103 7,362 $ 74 $ 1,509,697 $ (109,301) $ (1,364,275) $ (58,054) $ 1,037 $ (15,719)


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

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



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


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

																	Shares			Par Value
			(in thousands, except share and per share amounts)
Balance at December 31, 2019		46,374	$	4,699													$	1,142,614		$	(105,707)	$	(1,339,888)		$	1,926	$	1,417		$	(294,939)

(in thousands, except share amounts)																	(in thousands, except share amounts)		Shares					Par Value					Capital In Excess of Par Value				Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive (Loss)		Non-controlling Interest		Total Stockholders’ Deficit
Balance at December 31, 2020																	Balance at December 31, 2020		54,452					$	4,784
Net loss	Net loss	—	—		—		—		(31,526)		—		(96)		(31,622)		Net loss		—					—								—			—		(15,464)		—		21		(15,443)
Currency translation adjustments	Currency translation adjustments	—	—		—		—		—		2,380		(58)		2,322		Currency translation adjustments		—					—					—				—		—		(4,582)		(24)		(4,606)
Defined benefit obligations		—	—		—		—		—		(246)		—		(246)
Pension and post retirement adjustments, net of tax																	Pension and post retirement adjustments, net of tax		—					—					—				—		—		198		—		198
Stock-based compensation charges	Stock-based compensation charges	33	4		876		(9)		—		—		—		871		Stock-based compensation charges		1,725					22					4,480				(3,308)		—		—		—		1,194
Common stock offering																	Common stock offering		29,487					295					161,218				—		—		—		—		161,513
Dividends to non-controlling interest	Dividends to non-controlling interest	—	—		—		—		—		—		(36)		(36)		Dividends to non-controlling interest		—					—					—				—		—		—		(38)		(38)
Balance at March 31, 2020		46,407	$	4,703	$	1,143,490	$	(105,716)	$	(1,371,414)	$	4,060	$	1,227	$	(323,650)
Net loss		—	—		—		—		(18,104)		—		(142)		(18,246)
Currency translation adjustments		—	—		—		—		—		(4,095)		37		(4,058)
Defined benefit obligations		—	—		—		—		—		(246)		—		(246)
Stock-based compensation charges		—	—		923		(1)		—		—		—		922
Equitized guarantee fee payment		1,713	17		3,883		—		—		—		—		3,900
Equitized Last Out Term Loan interest payment		1,192	12		2,703		—		—		—		—		2,715
Dividends to non-controlling interest		—	—		—		—		—		—		(37)		(37)
Balance at June 30, 2020		49,312	$	4,732	$	1,150,999	$	(105,717)	$	(1,389,518)	$	(281)	$	1,085	$	(338,700)
Balance at March 31, 2021																	Balance at March 31, 2021		85,664					$	5,101				$	1,330,134			$	(109,298)	$	(1,365,670)	$	(56,774)	$	1,063	$	(195,444)

See accompanying notes to Condensed Consolidated Financial Statements.

BABCOCK & WILCOX ENTERPRISES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended June 30,
(in thousands) 2021 2020
Cash flows from operating activities:
Net loss $ (12,302) $ (49,868)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of long-lived assets 8,379 8,239
Amortization of deferred financing costs, debt discount and payment-in-kind interest 6,464 14,785
Amortization of guaranty fee 908 236
Non-cash operating lease expense 2,238 2,403
(Gain) loss on sale of business 2,240 108
(Gain) loss on debt extinguishment (6,530) 6,194
Gains on asset disposals (1,966) (913)
Provision for (benefit from) deferred income taxes, including valuation allowances 2,002 (793)
Prior service cost amortization for pension and postretirement plans 396 (492)
Stock-based compensation, net of associated income taxes 5,705 1,803
Foreign exchange (617) 2,214
Changes in assets and liabilities:
Accounts receivable (576) 36,105
Contracts in progress (5,014) 6,847
Advance billings on contracts (10,512) (14,957)
Inventories (4,821) (570)
Income taxes (1,961) (3,141)
Accounts payable 10,227 (37,347)
Accrued and other current liabilities (34,717) 15,277
Accrued contract loss (261) (4,432)
Pension liabilities, accrued postretirement benefits and employee benefits (40,339) (16,946)
Other, net (5,018) (14,074)
Net cash used in operating activities (86,075) (49,322)
Cash flows from investing activities:
Purchase of property, plant and equipment (2,168) (1,675)
Proceeds from sale of business and assets, net 7,170 8,773
Purchases of available-for-sale securities (6,694) (13,668)
Sales and maturities of available-for-sale securities 8,303 10,835
Net cash from investing activities 6,611 4,265
Cash flows from financing activities:
Issuance of senior notes, net 138,287 0
Borrowings on loan payable 2,566 0
Borrowings under last out term loans 0 60,000
Repayments under last out term loans (75,408) 0
Borrowings under U.S. revolving credit facility 14,500 94,200
Repayments of U.S. revolving credit facility (178,800) (108,500)
Issuance of preferred stock, net 106,043 0
Payment of preferred stock dividends (1,731) 0
Shares of common stock returned to treasury stock (3,311) (10)
Issuance of common stock, net 160,984 0
Debt issuance costs (10,933) (10,356)
Other, net (908) 326
Net cash from financing activities 151,289 35,660
Effects of exchange rate changes on cash 4,350 572
Net increase (decrease) in cash, cash equivalents and restricted cash 76,175 (8,825)
Cash, cash equivalents and restricted cash, beginning of period 67,423 56,941
Cash, cash equivalents and restricted cash, end of period $ 143,598 $ 48,116


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

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

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


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

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

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


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

See accompanying notes to Condensed Consolidated Financial Statements.

BABCOCK & WILCOX ENTERPRISES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30, 2021~~MARCH 31, 2022

NOTE 1 – BASIS OF PRESENTATION

These interim Condensed Consolidated Financial Statements of Babcock & Wilcox Enterprises, Inc. (“B&W,” “management,” “we,” “us,” “our” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and Securities and Exchange Commission (“SEC”) instructions for interim financial information, and should be read in conjunction with our Annual Report. We have included all adjustments, in the opinion of management, consisting only of normal, recurring adjustments, necessary for a fair presentation of the interim financial statements. We have eliminated all intercompany transactions and accounts. We present the notes to our Condensed Consolidated Financial Statements on the basis of continuing operations, unless otherwise stated.

COVID-19

In December 2019, a novel strain of coronavirus, ~~COVID-19,~~("COVID-19"), was identified in Wuhan, China and subsequently spread globally. This global pandemic has disrupted business operations, including trade, commerce, financial and credit markets, and daily life throughout the world. Our business has been, and continues to be, adversely impacted by the measures taken and restrictions imposed in the countries in which we operate and by local governments and others to control the spread of this virus. These measures and restrictions have varied widely and have been subject to significant changes from time to time depending on changes in the severity of the virus in these countries and localities. These restrictions, including curtailment of travel and other activity, negatively impact our ability to conduct business.

Disruption to our global supply changes from COVID-19 has included impacts to the manufacturing, supply, distribution, transportation and delivery of our products. We also observed significant disruptions of the operations of our logistics, service providers, delays in shipments and negative impacts to pricing of certain of our products. Disruptions and delays in our supply chains as a result of the COVID-19 pandemic could continue to adversely impact our ability to meet our customers’ demands. Additionally, the prioritization of shipments of certain products as a result of the pandemic could cause delays in the shipment or delivery of our products. Such disruptions could result in reduced sales.

The volatility and variability of the virus has limited our ability to forecast the impact of ~~the virus~~COVID-19 on our customers and our business. The ~~continuing resurgence~~ongoing impact of COVID-19, including ~~new~~evolving strains such as the delta ~~variant,~~and omicron variants, has resulted in the reimposition of certain restrictions and may lead to the implementation of other restrictions ~~being implemented~~ in response to efforts to reduce the spread of the virus. These varying and changing events have caused many of the projects we had anticipated ~~would~~to begin ~~in 2020~~during the prior two years to be delayed into ~~the second half of 2021~~2022 and beyond. Many customers and projects require B&W's employees to travel to customer and project worksites. Certain customers and significant projects are located in areas where travel restrictions have been imposed, certain customers have closed or reduced on-site activities, and timelines for completion of certain projects have, as noted above, been extended into ~~the second half of 2021~~2022 and beyond. Additionally, out of concern for our employees, even where restrictions permit employees to return to our offices and worksites, we incurred additional costs to protect our employees and advised those who are uncomfortable returning to worksites due to the pandemic that they are not required to do so for an indefinite period of time. The resulting uncertainty concerning, among other things, the spread and economic impact of the virus has also caused significant volatility and, at times, illiquidity in global equity and credit markets. The full extent of the impact of COVID-19 ~~impact, including new strains such as the delta variant, that may arise along with the availability of vaccines~~ and ~~anti-vaccination attitudes of the public, that could negatively impact our evaluation~~its variants on our operational and financial performance will depend on future developments, including the ultimate duration and spread of the pandemic and related actions taken by the U.S. government, state and local government officials, and international governments to prevent ~~disease spread,~~outbreaks, as well as the availability, effectiveness and ~~effectiveness~~acceptance of COVID-19 vaccinations in the U.S. and abroad, all of which are uncertain, out of our control, and cannot be predicted.

Beginning in April 2020 and continuing as of August 12, 2021, as part of the Company’s response to the impact of the COVID-19 pandemic on its business, the Company continues to take a number of cash conservation and cost reduction measures which include:

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

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

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

NOTE 2 – EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted ~~earnings~~loss per share of our common stock, net of non-controlling interest and dividends on preferred stock:

Three months ended June 30, Six months ended June 30,
(in thousands, except per share amounts) 2021 2020 2021 2020
Income (loss) from continuing operations attributable to stockholders of common stock $ 1,395 $ (17,991) $ (14,069) $ (51,430)
Income (loss) from discontinued operations attributable to stockholders of common stock, net of tax 0 (113) 0 1,800
Net income (loss) attributable to stockholders of common stock $ 1,395 $ (18,104) $ (14,069) $ (49,630)
Weighted average shares used to calculate basic earnings (loss) per share 85,724 46,853 78,589 46,628
Dilutive effect of stock options, restricted stock and performance units 1,279 0 0 0
Weighted average shares used to calculate diluted earnings (loss) per share 87,003 46,853 78,589 46,628
Basic earnings (loss) per share
Continuing operations $ 0.02 $ (0.39) $ (0.18) $ (1.10)
Discontinued operations 0 0 0 0.04
Basic earnings (loss) per share $ 0.02 $ (0.39) $ (0.18) $ (1.06)
Diluted earnings (loss) per share
Continuing operations $ 0.02 $ (0.39) $ (0.18) $ (1.10)
Discontinued operations 0 0 0 0.04
Diluted earnings (loss) per share $ 0.02 $ (0.39) $ (0.18) $ (1.06)

~~Because we incurred a net loss in the six months ended June 30, 2021 and in the three and six months ended June 30, 2020, basic and diluted shares are the same.~~


	Three Months Ended March 31,
(in thousands, except per share amounts)		2022		2021


Net loss attributable to stockholders of common stock		$	(11,979)	$	(15,464)

Weighted average shares used to calculate basic and diluted loss per share		87,992		71,396



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




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

If we ~~had~~were in a net income inposition during the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021, diluted shares would include an additional ~~1.4~~0.9 million ~~shares. If we had net income in the three~~ and ~~six months ended June 30, 2020, diluted shares would include an additional 33.3 thousand and 216.1 thousand~~1.6 million shares, respectively.

We excluded ~~0.3~~0.4 million and ~~1.5~~0.4 million shares related to stock options from the diluted share calculation for the three months ended ~~June 30,~~March 31, 2022 and 2021, and 2020, respectively, because their effect would have been anti-dilutive. We excluded 0.4 million and 1.7 million shares related to stock options from the diluted share calculation for the six months ended June 30, 2021 and 2020, respectively, because their effect would have been anti-dilutive.

NOTE 3 – SEGMENT REPORTING

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

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

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

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

~~Total revenues~~

Revenues exclude eliminations of revenues generated from sales to other ~~segments.~~segments or to other product lines within the segment. An analysis of our operations by segment is as follows:


		Three months ended June 30,				Six months ended June 30,					Three Months Ended March 31,
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)		2022		2021
Revenues:	Revenues:									Revenues:
B&W Renewable segment	B&W Renewable segment									B&W Renewable segment
B&W Renewable	B&W Renewable	$	24,701	$	27,066	$	42,698	$	49,404	B&W Renewable		$	19,711	$	17,997
B&W Renewable Services (1)										B&W Renewable Services (1)		8,288		5,260
Vølund	Vølund	13,643		16,443		24,457		30,104		Vølund		16,336		5,554
Fosler Solar										Fosler Solar		23,626		—
		38,344		43,509		67,155		79,508				67,961		28,811
B&W Environmental segment	B&W Environmental segment									B&W Environmental segment
B&W Environmental	B&W Environmental	10,995		10,513		28,428		23,448		B&W Environmental		18,185		17,433
SPIG	SPIG	13,194		10,850		24,378		22,187		SPIG		12,060		11,184
GMAB	GMAB	4,169		3,809		6,712		5,457		GMAB		4,703		2,543
		28,358		25,172		59,518		51,092				34,948		31,160
B&W Thermal segment	B&W Thermal segment									B&W Thermal segment
B&W Thermal	B&W Thermal	136,316		67,212		244,597		153,895		B&W Thermal		102,239		108,281
		136,316		67,212		244,597		153,895				102,239		108,281

Other		(158)		(496)		(162)		(544)
Eliminations										Eliminations		(1,099)		(4)
Total Revenues	Total Revenues	$	202,860	$	135,397	$	371,108	$	283,951	Total Revenues		$	204,049	$	168,248

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

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

Adjusted EBITDA for each segment is presented below with a reconciliation tofrom net ~~income (loss) attributable to stockholders of common stock.~~loss.

Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 2021 2020
Adjusted EBITDA (1)
B&W Renewable segment $ 3,427 $ (138) $ 3,631 $ (1,572)
B&W Environmental segment 2,698 (1,146) 3,799 (769)
B&W Thermal segment 12,431 8,018 22,861 15,592
Corporate (2,997) (3,805) (5,682) (7,948)
Research and development costs (485) (1,231) (1,073) (2,572)
15,074 1,698 23,536 2,731
Restructuring activities (2,400) (2,392) (3,393) (4,343)
Financial advisory services (1,299) (582) (2,232) (1,511)
Advisory fees for settlement costs and liquidity planning (2,059) (1,155) (4,037) (3,769)
Litigation legal costs (1,167) (252) (1,547) (948)
Stock compensation (51) (1,187) (7,880) (1,899)
Interest on letters of credit included in cost of operations (320) (172) (606) (399)
Income (loss) from business held for sale 0 470 (483) (318)
Depreciation & amortization (4,321) (4,032) (8,379) (8,240)
Contract asset amortization (73) 0 (73) 0
ClimateBrightTM product development
(263) 0 (263) 0
Gain (loss) from a non-strategic business (299) (97) (287) (218)
Gain (loss) on asset disposals, net (38) (2) 1,966 913
Operating income (loss) 2,784 (7,703) (3,678) (18,001)
Interest expense, net (7,875) (15,259) (21,989) (37,310)
Gain (loss) on debt extinguishment 6,530 (6,194) 6,530 (6,194)
(Loss) gain on sale of business (2,598) (108) (2,240) (108)
Net pension benefit 5,924 7,450 15,022 14,986
Foreign exchange 1,826 7,112 617 (2,214)
Other – net 96 (2,586) (182) (2,792)
Total other income (expense) 3,903 (9,585) (2,242) (33,632)
Income (loss) before income tax expense 6,687 (17,288) (5,920) (51,633)
Income tax expense 3,546 845 6,382 35
Income (loss) from continuing operations 3,141 (18,133) (12,302) (51,668)
(Loss) income from discontinued operations, net of tax 0 (113) 0 1,800
Net income (loss) 3,141 (18,246) (12,302) (49,868)
Net (income) loss attributable to non-controlling interest (15) 142 (36) 238
Net income (loss) attributable to stockholders 3,126 (18,104) (12,338) (49,630)
Less: Dividend on Series A preferred stock 1,731 0 1,731 0
Net income (loss) attributable to stockholders of common stock $ 1,395 $ (18,104) $ (14,069) $ (49,630)


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

Benefit plans, net		(7,452)		(9,098)
Gain on sales, net		(20)		(2,362)
Stock compensation		1,319		7,829
Restructuring activities and business services transition costs		2,688		993
Advisory fees for settlement costs and liquidity planning		1,032		1,978
Litigation costs		2,528		380
Acquisition pursuit and related costs		843		—
Product development (1)		852		—
Foreign exchange		(3,085)		1,209
Financial advisory services		375		933
Contract step-up purchase price adjustment		1,745		—
Loss from business held for sale		—		483
Other - net		123		266
Adjusted EBITDA		$	12,020	$	8,571

(1) ~~Adjusted EBITDA for the three and six months ended June 30, 2020, excludes losses related~~Costs associated with development of commercially viable products that are ready to a non-strategic business and interest on letters of credit included in cost of operations that were previously included in Adjusted EBITDA and total $0.1 million and $0.2 million, respectively, and $0.2 million and $0.4 million, respectively.go to market.


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

We do not separately identify or report our assets by segment as our ~~chief operating decision maker~~CODM does not consider assets by segment to be a critical measure by which performance is measured.

NOTE 4 – REVENUE RECOGNITION AND CONTRACTS

Revenue Recognition

~~A performance obligation is a contractual promise to transfer a distinct good or service to~~We generate the ~~customer. A contract's transaction price is allocated to each distinct performance obligation~~vast majority of our revenues from the supply of, and ~~is recognized as~~aftermarket services for, steam-generating, environmental and auxiliary equipment. We also earn revenue ~~when (point in time) or as (over time)~~from the ~~performance obligation is satisfied.~~supply of custom-engineered cooling systems for

steam applications along with related aftermarket services.

Revenue from goods and services transferred to customers at a point in time, which includes certain aftermarket parts and services, accounted for ~~18%~~19% and ~~31%~~27% of our revenue for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and 22% and 31% of our revenue for the six months ended June 30, 2021 and 2020,~~ respectively. Revenue from products and services transferred to customers over time, which primarily relates to customized, engineered solutions and construction services, accounted for ~~82%~~81% and ~~69%~~73% of our revenue for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and 78% and 69% of our revenue for the six months ended June 30, 2021 and 2020,~~ respectively.

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

Contract Balances

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


(in thousands)	(in thousands)	June 30, 2021		December 31, 2020		$ Change		% Change		(in thousands)	March 31, 2022		December 31, 2021		$ Change		% Change
Contract assets - included in contracts in progress:	Contract assets - included in contracts in progress:									Contract assets - included in contracts in progress:
Costs incurred less costs of revenue recognized	Costs incurred less costs of revenue recognized	$	25,766	$	25,888	$	(122)	0	%	Costs incurred less costs of revenue recognized	$	32,101	$	35,939	$	(3,838)	(11)	%
Revenues recognized less billings to customers	Revenues recognized less billings to customers	38,171		33,420		4,751		14	%	Revenues recognized less billings to customers	63,871		44,237		19,634		44	%
Contracts in progress	Contracts in progress	$	63,937	$	59,308	$	4,629	8	%	Contracts in progress	$	95,972	$	80,176	$	15,796	20	%
Contract liabilities - included in advance billings on contracts:	Contract liabilities - included in advance billings on contracts:									Contract liabilities - included in advance billings on contracts:
Billings to customers less revenues recognized	Billings to customers less revenues recognized	$	51,361	$	61,884	$	(10,523)	(17)	%	Billings to customers less revenues recognized	$	100,130	$	68,615	$	31,515	46	%
Costs of revenue recognized less cost incurred	Costs of revenue recognized less cost incurred	1,781		2,118		(337)		(16)	%	Costs of revenue recognized less cost incurred	(220)		(235)		15		(6)	%
Advance billings on contracts	Advance billings on contracts	$	53,142	$	64,002	$	(10,860)	(17)	%	Advance billings on contracts	$	99,910	$	68,380	$	31,530	46	%

Net contract balance	Net contract balance	$	10,795	$	(4,694)	$	15,489	(330)	%	Net contract balance	$	(3,938)	$	11,796	$	(15,734)	(133)	%

Accrued contract losses	Accrued contract losses	$	321	$	582	$	(261)	(45)	%	Accrued contract losses	$	4,652	$	378	$	4,274	1,131	%

Backlog

On ~~June 30, 2021~~March 31, 2022 we had ~~$500.0~~$721.0 million of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately ~~45.2%~~61.4%, ~~21.2%~~15.4% and ~~33.6%~~23.2% of our remaining performance obligations as revenue in ~~the remainder of 2021,~~ 2022, 2023 and thereafter, respectively.

Changes in Contract Estimates

In the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ we recognized changes in estimated gross profit related to long-term contracts accounted for on the over time basis, which are summarized as follows:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)		2022		2021
Increases in gross profit for changes in estimates for over time contracts	Increases in gross profit for changes in estimates for over time contracts	$	2,314	$	4,037	$	5,339	$	7,561	Increases in gross profit for changes in estimates for over time contracts		$	3,341	$	3,025
Decreases in gross profit for changes in estimates for over time contracts	Decreases in gross profit for changes in estimates for over time contracts	(3,137)		(5,102)		(4,495)		(5,288)		Decreases in gross profit for changes in estimates for over time contracts		(2,862)		(1,358)
Net changes in gross profit for changes in estimates for over time contracts	Net changes in gross profit for changes in estimates for over time contracts	$	(823)	$	(1,065)	$	844	$	2,273	Net changes in gross profit for changes in estimates for over time contracts		$	479	$	1,667

B&W Renewable ~~EPC Loss Contracts~~Projects

WeDuring March 2022, we determined that our Fosler Solar reporting unit had 6 B&W Renewable EPC contracts for renewable energy facilities in Europe that were loss contracts at December 31, 2017. The scope of these EPC (Engineer, Procure and Construct) contracts extended beyond our core technology, products and services. In addition to these loss contracts, we have one remaining extended scope contract in our Babcock & Wilcox Renewable segment which turned into a loss contract in the fourth quarter of 2019.

NaN of the 6 contracts were 100% complete and the remaining 2 contracts were nearly 100% complete at June 30, 2021, with only limited warranty obligations remaining, and all have been turned over to the customers. In the three months ended June 30, 2021 and 2020, we recorded $0.0 million and $0.4 million in net losses, respectively, and in the six months ended June 30, 2021 and 2020, we recorded $0.1 million in net gains and $0.3 million in net losses, respectively, inclusive of warranty expense as described in Note 10, resulting from changes in the estimated revenues and costs to complete those contracts. All liquidated damages associated with these 6 contracts have been settled and paid as of December 31, 2020.

In 2019, one of our other B&W Renewable energy contracts turned into a loss contract due to delays and other start-up costs prior to turnover to the client in October 2019. In the three and six months ended June 30, 2021 our estimated loss on the contract improved by $0.7 million, and in the three and six months ended June 30, 2020, we did 0t recognize additional charges on this contract. As of June 30, 2021, this contract was approximately 99% complete.

~~In September 2017, we identified the failure of a structural steel beam on a contact for a biomass plant~~7 projects located in the United ~~Kingdom, The engineering, design~~States that existed at the time we acquired Fosler on September 30, 2021 which generated losses that arose due to the status of certain construction activities, existing at acquisition date, not adequately disclosed in the sales agreement and ~~manufacturing~~not recognized in the financial records of the steel structure were the responsibility of our subcontractors. A similar design was also used on two other contracts, and although no structural failure occurred on these two other contracts, work was also stopped in certain restricted areas while we added reinforcement to the structures, which also resulted in delays. The total cost related to the structural steel issues on these three contracts was estimated to be approximately $36 million, which is included in the June 30, 2021 estimated losses at completion for these three contracts. We are continuing to aggressively pursue recovery of this cost from responsible subcontractors. In October 2020, we entered into a settlement agreement with an insurer under which we received a settlement of $26.0 million to settle claims in connection with 5 of 6 European B&W Renewable EPC loss contracts disclosed above.

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

~~B&W Environmental Loss Contracts~~

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

March 31, 2022, we recorded an increase in goodwill of $14.9 million resulting from the

1514

initial recognition of $14.5 million of accrued liabilities and $0.4 million of warranty accruals during this acquisition's annual measurement period. We have submitted insurance claims to recover a portion of these losses as of March 31, 2022.

NOTE 5 – INVENTORIES

Inventories are stated at the lower of cost or net realizable value. The components of inventories are as follows:


(in thousands)	(in thousands)	June 30, 2021		December 31, 2020		(in thousands)	March 31, 2022		December 31, 2021
Raw materials and supplies	Raw materials and supplies	$	47,482	$	46,659	Raw materials and supplies	$	63,772	$	56,352
Work in progress	Work in progress	7,364		8,195		Work in progress	7,212		5,723
Finished goods	Finished goods	16,157		12,307		Finished goods	19,417		17,452
Total inventories	Total inventories	$	71,003	$	67,161	Total inventories	$	90,401	$	79,527

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

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


(in thousands)	(in thousands)	June 30, 2021		December 31, 2020		(in thousands)	March 31, 2022		December 31, 2021
Land	Land	$	1,550	$	1,584	Land	$	1,533	$	1,489
Buildings	Buildings	34,096		34,207		Buildings	32,681		31,895
Machinery and equipment	Machinery and equipment	151,352		151,399		Machinery and equipment	145,134		144,325
Property under construction	Property under construction	2,749		5,336		Property under construction	4,877		12,480
		189,747		192,526			184,225		190,189
Less accumulated depreciation	Less accumulated depreciation	139,850		135,925		Less accumulated depreciation	134,639		133,137
Net property, plant and equipment	Net property, plant and equipment	49,897		56,601		Net property, plant and equipment	49,586		57,052
Finance lease		37,142		30,551
Finance leases						Finance leases	34,160		34,159
Less finance lease accumulated amortization	Less finance lease accumulated amortization	3,673		2,074		Less finance lease accumulated amortization	6,590		5,584
Net property, plant and equipment, and finance lease	Net property, plant and equipment, and finance lease	$	83,366	$	85,078	Net property, plant and equipment, and finance lease	$	77,156	$	85,627

NOTE 7 - GOODWILL

The following summarizes the changes in the net carrying amount of goodwill as of ~~June 30, 2021:~~March 31, 2022:


(in thousands)	(in thousands)	B&W Renewable		B&W Environmental		B&W Thermal		Total		(in thousands)	B&W Renewable		B&W Environmental		B&W Thermal		Total
Balance at December 31, 2020		$	10,211	$	5,673	$	31,479	$	47,363
Balance at December 31, 2021										Balance at December 31, 2021	$	79,357	$	5,667	$	31,438	$	116,462
Addition - Fossil Power(1)										Addition - Fossil Power(1)	—		—		35,392		35,392
Addition - Optimus Industries(1)										Addition - Optimus Industries(1)	—		—		11,081		11,081
Measurement period adjustments - Fosler(1)(2)										Measurement period adjustments - Fosler(1)(2)	11,163		—		—		11,163
Measurement period adjustments - VODA(1)(2)										Measurement period adjustments - VODA(1)(2)	(61)		—		—		(61)
Currency translation adjustments	Currency translation adjustments	7		4		39		50		Currency translation adjustments	57		45		232		334
Balance at June 30, 2021		$	10,218	$	5,677	$	31,518	$	47,413
Balance at March 31, 2022										Balance at March 31, 2022	$	90,516	$	5,712	$	78,143	$	174,371

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

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

Goodwill is tested for impairment annually and on an interim basis when impairment indicators exist. ~~NaN~~No impairment indicators were identified during the three months ended ~~June 30, 2021. Because~~March 31, 2022.

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

1615

NOTE 8 – INTANGIBLE ASSETS

Our intangible assets are as follows:


(in thousands)	(in thousands)	June 30, 2021		December 31, 2020		(in thousands)	March 31, 2022		December 31, 2021
Definite-lived intangible assets(1)	Definite-lived intangible assets(1)					Definite-lived intangible assets(1)
Customer relationships	Customer relationships	$	24,110	$	24,862	Customer relationships	$	67,332	$	46,903
Unpatented technology	Unpatented technology	15,489		15,713		Unpatented technology	18,591		15,410
Patented technology	Patented technology	3,124		2,642		Patented technology	3,682		3,103
Tradename	Tradename	12,879		13,088		Tradename	13,383		12,747
Acquired backlog						Acquired backlog	3,100		3,100
All other	All other	9,414		9,262		All other	9,128		9,319
Gross value of definite-lived intangible assets	Gross value of definite-lived intangible assets	65,016		65,567		Gross value of definite-lived intangible assets	115,216		90,582
Customer relationships amortization	Customer relationships amortization	(20,047)		(19,537)		Customer relationships amortization	(21,820)		(20,800)
Unpatented technology amortization	Unpatented technology amortization	(7,546)		(6,751)		Unpatented technology amortization	(8,729)		(8,313)
Patented technology amortization	Patented technology amortization	(2,662)		(2,593)		Patented technology amortization	(2,769)		(2,729)
Tradename amortization	Tradename amortization	(5,133)		(4,831)		Tradename amortization	(5,595)		(5,425)
Acquired backlog						Acquired backlog	(3,100)		(1,620)
All other amortization	All other amortization	(9,281)		(9,252)		All other amortization	(9,056)		(9,205)
Accumulated amortization	Accumulated amortization	(44,669)		(42,964)		Accumulated amortization	(51,069)		(48,092)
Net definite-lived intangible assets	Net definite-lived intangible assets	$	20,347	$	22,603	Net definite-lived intangible assets	$	64,147	$	42,490
Indefinite-lived intangible assets	Indefinite-lived intangible assets					Indefinite-lived intangible assets
Trademarks and trade names	Trademarks and trade names	$	1,305	$	1,305	Trademarks and trade names	$	1,305	$	1,305
Total intangible assets, net	Total intangible assets, net	$	21,652	$	23,908	Total intangible assets, net	$	65,452	$	43,795

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

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


		Six months ended June 30,					Three Months Ended March 31,
(in thousands)	(in thousands)	2021		2020		(in thousands)	2022		2021
Balance at beginning of period	Balance at beginning of period	$	23,908	$	25,300	Balance at beginning of period	$	43,795	$	23,908
Business acquisitions and adjustments(1)						Business acquisitions and adjustments(1)	25,092		—
Amortization expense	Amortization expense	(1,705)		(1,716)		Amortization expense	(2,978)		(856)
Currency translation adjustments	Currency translation adjustments	(551)		81		Currency translation adjustments	(457)		(843)
Balance at end of the period	Balance at end of the period	$	21,652	$	23,665	Balance at end of the period	$	65,452	$	22,209

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

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

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

Estimated future intangible asset amortization expense as of March 31, 2022 is as follows (in thousands):


	Amortization Expense
Year ending December 31, ~~2021~~	$	~~1,701~~
~~Year ending December 31,~~ 2022	~~3,409~~5,990
Year ending December 31, 2023	~~3,409~~7,986
Year ending December 31, 2024	~~3,325~~7,906
Year ending December 31, 2025	~~2,559~~7,089
Year ending December 31, 2026	~~1,283~~5,890
Year ending December 31, 2027	5,229
Thereafter	~~4,661~~24,057

~~NOTE 9– LEASES~~

~~Certain real property~~See Note 21 for intangible assets ~~for our Copley, Ohio location were sold on March 15, 2021, as described~~identified in ~~Note 24. In~~ conjunction with the ~~sale, we executed a leaseback agreement commencing March 16, 2021~~acquisitions of Fosler Construction, VODA, Fossil Power and ~~expiring on March 31, 2033. The lease is classified as a finance lease with total future minimum payments during~~Optimus Industries, which are subject to change pending the ~~initial term~~finalization of the ~~lease of approximately $5.7 million as of June 30, 2021. An incremental borrowing rate of 7.19% was used to determine the right-of-use (the "ROU") asset. We recorded a $3.6 million ROU asset in~~ ~~net property, plant and equipment, and finance lease~~ ~~and corresponding liabilities of $3.8 million in~~ ~~otheraccrued liabilities~~ ~~and~~ ~~other non-current finance liabilities~~ ~~in the Condensed Consolidated Balance Sheets as of June 30, 2021~~.

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

Three months ended June 30, Six months ended June 30,
(in thousands) Classification 2021 2020 2021 2020
Operating lease expense:
Operating lease expense Selling, general and administrative expenses $ 1,308 $ 1,389 $ 2,647 $ 2,896
Short-term lease expense Selling, general and administrative expenses 1,486 292 2,641 480
Variable lease expense (1)
Selling, general and administrative expenses 471 (382) 679 394
Total operating lease expense $ 3,265 $ 1,299 $ 5,967 $ 3,770
Finance lease expense:
Amortization of right-of-use assets Selling, general and administrative expenses $ 1,069 $ 514 $ 1,598 $ 1,029
Interest on lease liabilities Interest expense 708 616 1,324 1,231
Total finance lease expense $ 1,777 $ 1,130 $ 2,922 $ 2,260
Sublease income (2)
Other – net $ (21) $ (21) $ (43) $ (43)
Net lease cost $ 5,021 $ 2,408 $ 8,846 $ 5,987

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

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

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

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

(in thousands) June 30, 2021 December 31, 2020
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases $ 1,281 $ 2,629
Finance leases $ 6,589 $ 146
Weighted-average remaining lease term:
Operating leases (in years) 2.8 3.1
Finance leases (in years) 12.5 13.9
Weighted-average discount rate:
Operating leases 9.11 % 9.26 %
Finance leases 7.88 % 8.00 %

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

(in thousands)
Assets: Classification June 30, 2021 December 31, 2020
Operating lease assets Right-of-use assets $ 9,399 $ 10,814
Finance lease assets Net property, plant and equipment, and finance lease 33,469 28,477
Total non-current lease assets $ 42,868 $ 39,291
Liabilities:
Current
Operating lease liabilities Operating lease liabilities $ 3,728 $ 3,995
Finance lease liabilities Other accrued liabilities 3,095 886
Non-current
Operating lease liabilities Non-current operating lease liabilities 5,888 7,031
Finance lease liabilities Non-current finance lease liabilities 33,237 29,690
Total lease liabilities $ 45,948 $ 41,602

~~Future minimum lease payments required under non-cancellable leases as of June 30, 2021 were as follows:~~
(in thousands) Operating Leases Finance Leases Total
2021 (excluding the six months ended June 30, 2021) $ 2,410 $ 2,860 $ 5,270
2022 3,864 5,233 9,097
2023 2,572 3,879 6,451
2024 1,468 3,944 5,412
2025 411 3,969 4,380
Thereafter 7 38,412 38,419
Total $ 10,732 $ 58,297 $ 69,029
Less imputed interest (1,116) (21,965) (23,081)
Lease liability $ 9,616 $ 36,332 $ 45,948
purchase price allocation associated with these acquisitions.

NOTE 109 – ACCRUED WARRANTY EXPENSE

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


		Six months ended June 30,					Three Months Ended March 31,
(in thousands)	(in thousands)	2021		2020		(in thousands)	2022		2021
Balance at beginning of period	Balance at beginning of period	$	25,399	$	33,376	Balance at beginning of period	$	12,925	$	25,399
Additions	Additions	3,608		2,063		Additions	1,300		1,475
Expirations and other changes	Expirations and other changes	(4,309)		(1,584)		Expirations and other changes	(1,467)		(1,318)
Payments	Payments	(8,576)		(5,410)		Payments	(193)		(5,943)
Translation and other	Translation and other	254		46		Translation and other	(692)		(76)
Balance at end of period	Balance at end of period	$	16,376	$	28,491	Balance at end of period	$	11,873	$	19,537

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

NOTE 1110 – RESTRUCTURING ACTIVITIES

The Company incurred restructuring charges in the three months ended ~~June 30, 2021~~March 31, 2022, and ~~2020.~~2021. The charges primarily consist of severance and related costs ~~related~~ to actions taken ~~including~~ as part of the Company’s strategic, market-focused organizational and re-branding initiative. ~~During 2020, these charges also include actions taken to address the impact of COVID-19 on our business.~~

The following ~~table~~tables summarizes the restructuring activity incurred by segment:

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


		Six months ended June 30,						Six months ended June 30,							Three Months Ended March 31,						Three Months Ended March 31,
		2021						2020							2022						2021
(in thousands)	(in thousands)	Total		Severance and related costs		Other (1)		Total		Severance and related costs		Other (1)		(in thousands)	Total		Severance and related costs		Other (1)		Total		Severance and related Costs		Other(1)
B&W Renewable segment	B&W Renewable segment	$	1,066	$	919	$	147	$	1,752	$	813	$	939	B&W Renewable segment	$	(193)	$	(229)	$	36	$	509	$	453	$	56
B&W Environmental segment	B&W Environmental segment	298		207		91		377		211		166		B&W Environmental segment	69		10		59		89		35		54
B&W Thermal segment	B&W Thermal segment	1,890		1,047		843		1,889		689		1,200		B&W Thermal segment	198		50		148		348		12		336
Corporate	Corporate	139		8		131		325		0		325		Corporate	20		—		20		47		—		47
		$	3,393	$	2,181	$	1,212	$	4,343	$	1,713	$	2,630		$	94	$	(169)	$	263	$	993	$	500	$	493
Cumulative costs to date	Cumulative costs to date	$	43,707	35,394		8,313								Cumulative costs to date	$	45,277	37,083		8,194		0

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

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


		Three months ended June 30,			Six months ended June 30,							Three Months Ended March 31,
(in thousands)	(in thousands)		2021		2020		2021		2020		(in thousands)		2022		2021
Balance at beginning of period	Balance at beginning of period		$	8,022	$	5,341	$	8,146	$	5,358	Balance at beginning of period		$	6,561	$	8,146
Restructuring expense	Restructuring expense		2,400		2,392		3,393		4,343		Restructuring expense		94		993
Payments	Payments		(2,477)		(2,646)		(3,594)		(4,614)		Payments		(749)		(1,117)
Balance at end of period	Balance at end of period		$	7,945	$	5,087	$	7,945	$	5,087	Balance at end of period		$	5,906	$	8,022

The payments shown above for the three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ relate primarily to severance. Accrued restructuring liabilities at ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ relate primarily to employee termination benefits.

NOTE 1211 – PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

Components of net periodic ~~benefit~~ cost (benefit) included in net (loss) income ~~(loss)~~ are as follows:


		Pension Benefits								Other Benefits									Pension Benefits				Other Benefits
		Three months ended June 30,				Six months ended June 30,				Three months ended June 30,				Six months ended June 30,					Three Months Ended March 31,				Three Months Ended March 31,
(in thousands)	(in thousands)	2021		2020		2021		2020		2021		2020		2021		2020		(in thousands)	2022		2021			2022		2021
Interest cost	Interest cost	$	5,609	$	8,250	$	11,280	$	16,511	$	39	$	72	$	78	$	144	Interest cost	$	6,664	$	5,671		$	49	$	39
Expected return on plan assets	Expected return on plan assets	(11,773)		(15,544)		(26,782)		(31,185)		0		0		0		0		Expected return on plan assets	(14,366)		(15,009)			—		—
Amortization of prior service cost (credit)	Amortization of prior service cost (credit)	28		43		56		86		173		(271)		346		(542)		Amortization of prior service cost (credit)	28		28			173		173
Benefit plans, net (1)	Benefit plans, net (1)	(6,136)		(7,251)		(15,446)		(14,588)		212		(199)		424		(398)		Benefit plans, net (1)	(7,674)		(9,310)			222		212
Service cost included in COS (2)	Service cost included in COS (2)	218		209		435		420		6		4		12		9		Service cost included in COS (2)	201		217			5		6
Net periodic benefit cost (benefit)	Net periodic benefit cost (benefit)	$	(5,918)	$	(7,042)	$	(15,011)	$	(14,168)	$	218	$	(195)	$	436	$	(389)	Net periodic benefit cost (benefit)	$	(7,473)	$	(9,093)		$	227	$	218

(1) Benefit plans, net, which is presented separately in ~~the~~our Condensed Consolidated Statements of Operations, is not allocated to the segments.

(2) Service cost related to a small group of active participants is presented within~~cost~~ Cost of operations in ~~the~~our Condensed Consolidated ~~Statement~~Statements of Operations and is allocated to the B&W Thermal segment.

There were 0no mark-to-market ("MTM") adjustments for our pension and other postretirement benefit plans during the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

We made contributions to our pension and other postretirement benefit plans totaling ~~$0.3~~$0.4 million and ~~$24.3~~$24.0 million ~~during the~~ ~~three and six~~ ~~months ended~~ ~~June 30, 2021,~~ ~~respectively, as compared to $0.6 million and $1.1 million during the~~ ~~three and six~~ ~~months ended June 30, 2020, respectively. Contributions made~~ during the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~includes 0 interest and during the six months ended~~ ~~June 30, 2021~~ ~~includes $0.4 million of interest as required per the CARES Act that was signed into law on March 27, 2020.~~ respectively.

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

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

~~On February 12,~~Senior Notes

8.125% Senior Notes

During 2021, we completed ~~a public offering~~sales of ~~$125.0~~$151.2 million aggregate principal amount of our 8.125% senior notes due ~~2026. At the completion of the offering, we received~~2026 (the “8.125% Senior Notes”) for net proceeds of approximately ~~$120.0 million after deducting underwriting discounts, commissions, and before expenses.~~

$146.6 million. In addition to the ~~public offering,~~completed sales, we issued $35.0 million of 8.125% Senior Notes to B. Riley Financial, Inc., a related party, in exchange for a deemed prepayment of our then existing Last Out Term Loan Tranche ~~A-3~~A-3. The 8.125% Senior Notes bear interest at the rate of 8.125% per annum which is payable quarterly in ~~a concurrent private offering.~~arrears on January 31, April 30, July 31 and October 31 of each year, commencing on April 30, 2021. The 8.125% Senior Notes mature on February 28, 2026.

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

AsDuring the first quarter of ~~June 30, 2021,~~2022, the Company ~~has~~ sold ~~$12.9~~$2.0 million aggregate principal ~~amount~~ of 8.125% Senior Notes under the sales agreement ~~disclosed~~described above for ~~$13.1~~$2.0 million of net ~~proceeds after commissions and fees.~~proceeds.

~~Subsequent to June 30,~~6.50% Senior Notes

During 2021, ~~and as~~we completed sales of ~~August 12, 2021, the Company has sold $12.7~~$151.4 million aggregate principal amount of our 6.50% senior notes due in 2026 (the “6.50% Senior ~~Notes under the March 31, 2021 sales agreement disclosed above~~Notes”) for ~~$12.9 million of~~ net proceeds ~~after commission and fees.~~

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


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

The Senior Notes are senior unsecured obligations of the Company and rank equally in right of payment with all of the Company’s other existing and future senior unsecured and unsubordinated indebtedness. The Senior Notes bear interest at the rate of 8.125% per annum.approximately $145.8 million. Interest on the 6.50% Senior Notes is payable quarterly in arrears on ~~January~~March 31, ~~April~~June 30, ~~July 31~~September 30 and ~~October~~December 31 of each year, ~~commencing~~and commenced on ~~April 30, 2021.~~March 31, 2022. The 6.50% Senior Notes mature on ~~February 28,~~December 31, 2026.

~~NOTE 14– LAST OUT TERM LOANS~~The components of the Company's senior notes at March 31, 2022 are as follows:


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

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

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

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

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

~~Tranche A-3~~

On March 4, 2021, we paid down an additional $40.0 million on our existing Tranche A-3. Also, as described in Note 16, on June 1, 2021, we issued 2,916,880 shares of the Company’s 7.75% Series A Cumulative Perpetual Preferred Stock and paid $0.4 million in cash to B. Riley, a related party, in exchange for a deemed prepayment of $73.3 million of our then existing Tranche A-3 and paid $0.9 million in cash for accrued interest.

~~Tranche A-4~~

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

~~Tranche A-6~~

On May 14, 2020, we borrowed $30.0 million face value of the Tranche A-6 from B. Riley, a related party, as described in Note 15. On November 30, 2020, we borrowed an additional $10.0 million face value of the Tranche A-6 pursuant to the terms of the A&R Credit Agreement which required the proceeds to be applied as a permanent reduction of the U.S. Revolving ~~Credit Facility.~~

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

~~NOTE 15 – REVOLVING DEBT~~

Debt ~~Facilities~~

On June 30, 2021, we entered into a Revolving Credit Agreement (the “Revolving Credit Agreement”) with PNC Bank, National Association, as administrative agent (“PNC”) and a letter of credit agreement (the “Letter of Credit Agreement”) with PNC, pursuant to which PNC ~~has~~ agreed to issue up to $110 million in letters of credit that is secured in part by cash collateral provided by an affiliate of MSD Partners, MSD PCOF Partners XLV, LLC (“MSD”), as well as a reimbursement, guaranty and security agreement with MSD, as administrative agent, and the cash collateral providers from time to time party thereto, along with certain of our subsidiaries as guarantors, pursuant to which we are obligated to reimburse MSD and any other cash collateral provider to the extent the cash collateral provided by MSD and any other cash collateral provider to secure the Letter of Credit Agreement is drawn to satisfy draws on letters of credit ~~(“Reimbursement~~(the “Reimbursement Agreement”) and collectively with the Revolving Credit Agreement and Letter of Credit Agreement, the “Debt Documents” and the facilities thereunder, the “Debt Facilities”). The obligations of the Company under each of the Debt Facilities are guaranteed by certain existing and future domestic and foreign subsidiaries of the Company. B. Riley Financial, Inc. (“B. Riley”), a related party, has provided a guaranty of payment with regard to the Company’s obligations under the Reimbursement Agreement, as described below. The Company expects to use the proceeds and letter of credit availability under the Debt Facilities for working capital purposes and general corporate purposes, including to backstop certain letters of credit issued under our previous A&R Credit Agreement, dated as of May 14, 2020 (as amended, restated or otherwise modified from time to time), by and among the Company, as borrower, Bank of America, N.A., as administrative agent, the lenders and the other parties from time to time party thereto, which was repaid and commitments thereunder terminated as of June 30, 2021.purposes. The Revolving Credit Agreement matures on June 30, 2025. As of March 31, 2022, no borrowings have occurred under the Revolving Credit Agreement and under the Letter of Credit Agreement, usage consisted of $16.2 million of financial letters of credit and $90.8 million of performance letters of credit.

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

The Company has mandatory prepayment obligations under the Reimbursement Agreement upon the receipt of proceeds from certain dispositions or casualty or condemnation events. The Revolving Credit Agreement and Letter of Credit Agreement require mandatory prepayments to the extent of an over-advance.

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

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

In connection with the Company’s entry into the Debt Documents on June 30, 2021, B. Riley, a related party, entered into a Guaranty Agreement in favor of MSD, in its capacity as administrative agent under the Reimbursement Agreement, for the ratable benefit of MSD, the cash collateral providers and each co-agent or sub-agent appointed by MSD from time to time (the “B. Riley Guaranty”). The B. Riley Guaranty provides for the guarantee of all of the Company’s obligations under the Reimbursement Agreement. The B. Riley Guaranty is enforceable in certain circumstances, including, among others, certain events of default and the acceleration of the Company’s obligations under the Reimbursement Agreement. Under a fee letter with B. Riley, the Company agreed to pay B. Riley $0.9 million per annum in connection with the B. Riley Guaranty. The Company entered into a reimbursement agreement with B. Riley governing the Company’s obligation to reimburse B. Riley to the extent the B. Riley Guaranty is called upon by the agent or lenders under the Reimbursement Agreement.

~~A&R Credit Agreement~~As of March 31, 2022, a subsidiary has borrowed $1.7 million against a $3.5 million line of credit with a variable interest rate on the line of credit of 5.0% per annum. On April 1, 2022, the line of credit was paid in full and terminated.

~~As described above,~~Effective with the ~~A&R~~Revolving Credit Agreement, ~~commitments were terminated, all loans were repaid and all outstanding and undrawn letters of credit were collateralized~~the Company entered into on June 30, ~~2021. The~~2021, the Company recognized a gain on debt extinguishment of $6.5 million in the quarter ended June 30, 2021, primarily representing the write-off of accrued revolver fees of $11.3 million offset by the unamortized deferred financing fees of $4.8 million related to the prior A&R Credit Agreement.has no remaining Last Out Term Loans and no further borrowings thereunder are available.

Letters of Credit, Bank Guarantees and Surety Bonds

Certain of our subsidiaries, primarily outside of the United States, have credit arrangements with various commercial banks and other financial institutions for the issuance of letters of credit and bank guarantees in association with contracting activity. The aggregate value of all such letters of credit and bank guarantees ~~outstanding~~ outside of our ~~prior A&R~~Letter of Credit Agreement as of ~~June 30, 2021~~March 31, 2022 was ~~$57.3~~$48.3 million. The aggregate value of the outstanding letters of credit provided ~~by our prior A&R~~ under the Letter of

Credit Agreement backstopping letters of credit or bank guarantees was ~~$22.1~~$34.8 million as of ~~June 30, 2021.~~March 31, 2022. Of the outstanding letters of credit issued under ~~our prior A&R~~the Letter of Credit Agreement, ~~$32.1~~$52.0 million are subject to foreign currency revaluation. ~~At June 30, 2021, usage under the prior A&R Credit Agreement consisted of $22.0 million of financial letters of credit and $79.7 million of performance letters of credit.~~

We have also posted surety bonds to support contractual obligations to customers relating to certain contracts. We utilize bonding facilities to support such obligations, but the issuance of bonds under those facilities is typically at the surety's discretion. These bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds ~~those~~the underwriters issue in support of some of our contracting activity. As of ~~June 30, 2021,~~March 31, 2022, bonds issued and outstanding under these arrangements in support of our contracts totaled approximately ~~$259.3~~$221.5 million. The aggregate value of the letters of credit ~~provided by our prior A&R Credit Agreement~~ backstopping surety bonds was ~~$24.6~~$9.2 million.

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

Other Indebtedness - ~~Loan~~Loans Payable

~~During the six months ended June 30, 2021,~~As of March 31, 2022, our Denmark subsidiary ~~received 2~~has 3 unsecured ~~interest free~~interest-free loans totaling ~~$2.6~~$3.3 million under a local government loan program related to COVID-19. The loans of ~~$0.9~~$0.8 million, $1.6 million and ~~$1.7~~$0.9 million are payable in April 2022, May 2022 and May 2023, respectively. The loan payable in May 2023 is included in Long term loans payables in our Condensed Consolidated Balance Sheets. Subsequent to March 31, 2022, ~~respectively.~~the loan due April 2022 was repaid on April 1, 2022.

~~Subsequent to~~As of March 31, 2022, Fosler Construction has 2 loans totaling $8.9 million. Both loans have a variable interest rate with a minimum rate of 6.0% and are due June 30, ~~2021,~~2022. Fosler Construction also has loans, primarily for vehicles and equipment, totaling $0.6 million at March 31, 2022. The vehicle and equipment loans are included in long term loans payables in our ~~Denmark subsidiary received an unsecured interest free loan totaling $0.9 million under a local government loan program related to COVID-19. The loan is payable in May 2023.~~Condensed Consolidated Balance Sheets.

NOTE 1613 – PREFERRED STOCK

OnIn May 7, 2021, we completed a public offering of our 7.75% Series A Cumulative Perpetual Preferred Stock (the "Preferred Stock") pursuant to an underwriting agreement (the “Underwriting Agreement”) ~~dated May 4, 2021,~~ between us and B. Riley Securities, ~~Inc., as representative of several underwriters (the “Underwriters”).~~Inc.. At the closing, we issued to the public ~~4,000,000~~4,444,700 shares of our Preferred Stock, at an offering price of $25.00 per share for net proceeds of approximately ~~$95.7~~$106.4 million after deducting underwriting discounts, commissions but before expenses. The Preferred Stock has a par value of $0.01 per share and is perpetual and has no maturity date. The Preferred Stock has a cumulative cash dividend, when and as if declared by our Board of Directors, at a rate of 7.75% per year on the liquidation preference amount of $25.00 per share and payable quarterly in arrears.

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

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

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

~~On June 8, 2021,~~During the three months ending March 31, 2022, the Company's Board of Directors approved a dividend of $0.290625 per share of the Company's outstanding Preferred Stock, with a record date for the dividend of June 18, 2021 and a payment date of June 30, 2021. On June 30, 2021, the Company paid dividends totaling ~~$1.7~~$3.7 million. ~~After the Company paid the dividends on June 30, 2021, there~~There are 0no cumulative undeclared dividends of the Preferred Stock at ~~June 30, 2021.~~March 31, 2022.

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

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

On July 7, 2021, we entered into a sales agreement with B. Riley Securities, Inc., a related party, in connection with the offer ~~and~~ to or through B. Riley Securities, Inc., from time to time, additional shares of Preferred Stock up to an aggregate amount of $76.0 million of Preferred Stock. The Preferred Stock ~~will have~~has the same terms ~~as (other than date of issuance and first dividend) with~~ and have the same CUSIP number and beis fungible with, the Preferred Stock issued during May 2021. ~~The first dividend for~~For the three months ending March 31, 2022, the Company has sold no additional Preferred Stock issued thereunder, when, as and if declared, will accumulate and be cumulative from the dividend payment date (March 31, June 30, September 30 and December 31 of each year) for which full cumulative dividends have been paid immediately priorpursuant to the ~~original issue date for each such share.~~

~~Subsequent to June 30, 2021 and as~~sales agreement. As of ~~August 12,~~December 31, 2021, the Company sold ~~$5.9~~$7.7 million aggregate principal amount of Preferred Stock for ~~$5.9~~$7.7 million of net ~~proceeds after commission and fees related to the July 7, 2021 sales agreement disclosed above.~~proceeds.

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

NOTE 1714 – COMMON STOCK

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

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

On May 20, 2021, at the 2021 annual meeting of stockholders of the Company, the stockholders of the Company, upon the recommendation of the Company’s Board of Directors, approved the Babcock & Wilcox Enterprises, Inc. 2021 Long-Term Incentive Plan. The 2021 Plan became effective upon such stockholder approval. The maximum number of shares of the Company’s common stock (the “Common Stock”) that may be issued or transferred pursuant to awards under the 2021 Plan equals: (1) 1,250,000 shares, plus (2) the number of any shares subject to awards granted under the Company’s Amended and Restated 2015 Long-Term Incentive Plan (the “2015 Plan”) and outstanding as of May 20, 2021 which expire, or are terminated, surrendered, or forfeited for any reason without issuance of such shares (including for outstanding performance share awards to the extent they are earned at less than maximum). No new awards may be granted under the 2015 Plan. As of May 20, 2021 (immediately prior to the stockholder approval of the 2021 Plan), the total number of shares of Common Stock subject to outstanding awards granted under the 2015 Plan was 2,007,152 shares.

NOTE 1815 –INTEREST EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION

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


		Three months ended June 30,				Six months ended June 30,					Three Months Ended March 31,
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)		2022		2021
Components associated with borrowings from:	Components associated with borrowings from:									Components associated with borrowings from:
Senior Notes		$	3,459	$	0	$	5,192	$	0
Last Out Term Loans		837		4,828		4,349		8,875

Senior notes										Senior notes		$	6,216	$	1,733
Last Out Term Loans - cash interest										Last Out Term Loans - cash interest		—		3,513
U.S. Revolving Credit Facility	U.S. Revolving Credit Facility	0		3,409		1,416		7,448		U.S. Revolving Credit Facility		—		1,416
		4,296		8,237		10,957		16,323				6,216		6,662
Components associated with amortization or accretion of:	Components associated with amortization or accretion of:									Components associated with amortization or accretion of:
Senior Notes		298		0		1,766		0
Last Out Term Loans - discount and financing fees		0		1,579		0		3,729
U.S. Revolving Credit Facility - deferred financing fees and commitment fees		1,595		3,629		5,995		12,664
U.S. Revolving Credit Facility - deferred ticking fee for Amendment 16		0		2		0		1,660
Revolving Credit Agreement										Revolving Credit Agreement		1,060		—
Senior notes										Senior notes		643		1,468
U.S. Revolving Credit Facility										U.S. Revolving Credit Facility		—		4,400
		1,893		5,210		7,761		18,053				1,703		5,868

Components associated with interest from:										Components associated with interest from:
Lease liabilities										Lease liabilities		708		616
Other interest expense	Other interest expense	1,832		2,035		3,526		3,197		Other interest expense		2,640		1,077
												3,348		1,693

Total interest expense	Total interest expense	$	8,021	$	15,482	$	22,244	$	37,573	Total interest expense		$	11,267	$	14,223

2622

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


(in thousands)	(in thousands)	June 30, 2021		December 31, 2020		June 30, 2020		(in thousands)	March 31, 2022		December 31, 2021		March 31, 2021
Held by foreign entities	Held by foreign entities	$	27,822	$	38,726	$	34,676	Held by foreign entities	$	35,870	$	42,070	$	25,169
Held by U.S. entities	Held by U.S. entities	2,238		18,612		2,139		Held by U.S. entities	72,267		182,804		28,664
Cash and cash equivalents	Cash and cash equivalents	30,060		57,338		36,815		Cash and cash equivalents	108,137		224,874		53,833

Reinsurance reserve requirements	Reinsurance reserve requirements	590		4,551		5,596		Reinsurance reserve requirements	584		443		2,053
Restricted foreign accounts		0		2,869		2,661
Bank guarantee collateral	Bank guarantee collateral	2,240		2,665		3,044		Bank guarantee collateral	492		997		2,560
Letters of credit collateral	Letters of credit collateral	110,708		0		0		Letters of credit collateral	1,858		401		—
Hold-back for acquisition purchase price (1)								Hold-back for acquisition purchase price (1)	5,899		—		—
Restricted cash and cash equivalents	Restricted cash and cash equivalents	113,538		10,085		11,301		Restricted cash and cash equivalents	8,833		1,841		4,613
Total cash, cash equivalents and restricted cash shown in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows		$	143,598	$	67,423	$	48,116
Total cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows								Total cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows	$	116,970	$	226,715	$	58,446

(1)

~~As disclosed above, letters~~ The purchase price for Fossil Power Systems ("FPS") was $59.1 million, including a hold-back of ~~credit collateral of $110.7~~$5.9 million as reflected above. The hold-back is being held in escrow for potential payment of ~~June 30, 2021~~ ~~represents cash pledged~~up to ~~secure~~ the ~~outstanding and undrawn letters~~maximum amount twelve months from the February 1, 2022 date of ~~credit issued under our prior A&R Credit Agreement, most of which~~acquisition if the conditions are ~~expected to be cancelled and replaced by new letters of credit issued by PNC, as described~~met. The hold-back amount is included in Note 15 – Revolving Debt. Subsequent to June 30, 2021 and as of August 12, 2021, we have issued $60.7 million of backstop letters of credit issued by PNC and reclassified this amount from restrictedRestricted cash and cash equivalents ~~to cash~~ and cash equivalents. We expect to issue new PNC letters of credit to the beneficiaries such that the letters of credit issued under the prior A&R Credit Agreement will be cancelled along with the backstop letters of credit issued by PNC. Further, we expect the completion of the issuance of new letters of credit to cover the remaining collateral balance of $50.0 million by PNC by September 30, 2021 which will alleviate any restricted use of the letters of credit collateral amount by the Company.Other accrued liabilities on our Condensed Consolidated Balance Sheets.

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


		Six months ended June 30,					Three Months Ended March 31,
(in thousands)	(in thousands)	2021		2020		(in thousands)	2022		2021
Income tax payments, net	Income tax payments, net	$	3,331	$	1,438	Income tax payments, net	$	471	$	1,499

Interest payments on our 8.125% Senior Notes due 2026		$	2,911	$	0
Interest payments - 8.125% Senior Notes due 2026						Interest payments - 8.125% Senior Notes due 2026	$	3,783	$	—
Interest payments - 6.50% Senior Notes due 2026						Interest payments - 6.50% Senior Notes due 2026	2,926		—
Interest payments on our U.S. Revolving Credit Facility	Interest payments on our U.S. Revolving Credit Facility	5,979		8,110		Interest payments on our U.S. Revolving Credit Facility	—		5,979
Interest payments on our Last Out Term Loans	Interest payments on our Last Out Term Loans	6,140		6,140		Interest payments on our Last Out Term Loans	—		3,560
Total cash paid for interest	Total cash paid for interest	$	15,030	$	14,250	Total cash paid for interest	$	6,709	$	9,539

NOTE 1916 – PROVISION FOR INCOME TAXES

In the three months ended ~~June 30, 2021,~~March 31, 2022, income tax expense was ~~$3.5~~$1.2 million, resulting in an effective tax rate of ~~53.0%~~(16.5)%. In the three months ended ~~June 30, 2020, income tax expense was $0.8 million, with an effective tax rate of (4.9)%.~~

~~In the six months ended June 30,~~March 31, 2021, income tax expense was ~~$6.4~~$2.8 million, resulting in an effective tax rate of ~~(107.8)%. In the six months ended June 30, 2020, income tax expense was $35.0 thousand, resulting in an effective tax rate of (0.1)~~(22.5)%.

Our effective tax rate for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is not reflective of the U.S. statutory rate due to valuation allowances against certain net deferred tax assets and discrete items. We have unfavorable discrete items ~~of`$0.9 million and $3.5~~of $0.4 million for the three ~~and six~~ months ended ~~June 30, 2021, respectively,~~March 31, 2022, which primarily represent withholding ~~taxes and adjustment to our United Kingdom deferred tax liabilities due to an enacted change in tax rate.~~taxes. We had ~~favorable~~unfavorable discrete items of ~~$1.8~~$2.5 million ~~and $1.3 million for~~in the three ~~and six~~ months ended ~~June 30, 2020, respectively.~~March 31, 2021, which primarily represented withholding taxes.

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

NOTE 2017 – CONTINGENCIES

Litigation Relating to Boiler Installation and Supply Contract

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

~~SEC Investigation~~

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

Stockholder Derivative and Class Action Litigation

On April 14, 2020, a putative B&W stockholder (“Plaintiff”) filed a derivative and class action complaint against certain of the Company’s directors (current and former), executives and significant stockholders (“Defendants”) and the Company (as a nominal defendant). The action was filed in the Delaware Court of Chancery and is captioned Parker v. Avril, et al., C.A. No. 2020-0280-PAF ("Stockholder Litigation"). Plaintiff alleges that Defendants, among other things, did not properly discharge their fiduciary duties in connection with the 2019 rights offering and related transactions. The ~~case~~litigation is currently ~~in discovery. We believe that~~ongoing and at this time we are unable to determine whether the outcome of the Stockholder Litigation will ~~not~~ have a material adverse impact on our ~~condensed~~ consolidated financial condition, results of operations or cash flows, net of any insurance coverage.

Russian Invasion of Ukraine

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

Other

Due to the nature of our business, we are, from time to time, involved in routine litigation or subject to disputes or claims related to our business activities, including, among other things: performance or warranty-related matters under our customer and supplier contracts and other business arrangements; and workers' compensation, premises liability and other claims. Based on our prior experience, we do not expect that any of these other litigation proceedings, disputes and claims will have a material adverse effect on our ~~condensed~~ consolidated financial condition, results of operations or cash flows.

2824

NOTE 2118 – COMPREHENSIVE INCOME

Gains and losses deferred in accumulated other comprehensive income (loss) ("AOCI") are generally reclassified and recognized in the Condensed Consolidated Statements of Operations once they are realized. The changes in the components of AOCI, net of tax, for the first ~~two quarters~~quarter of ~~2021~~2022 and ~~2020~~2021 were as follows:


(in thousands)	(in thousands)	Currency translation loss		Net unrecognized loss related to benefit plans (net of tax)		Total		(in thousands)	Currency translation loss		Net unrecognized loss related to benefit plans (net of tax)		Total
Balance at December 31, 2020		$	(47,575)	$	(4,815)	$	(52,390)
Balance at December 31, 2021								Balance at December 31, 2021	$	(55,499)	$	(3,323)	$	(58,822)
Other comprehensive loss before reclassifications	Other comprehensive loss before reclassifications	(70)		0		(70)		Other comprehensive loss before reclassifications	(4,285)		—		(4,285)
Reclassified from AOCI to net income (loss)		(4,512)		198		(4,314)
Reclassified from AOCI to net loss								Reclassified from AOCI to net loss	—		593		593
Net other comprehensive (loss) income	Net other comprehensive (loss) income	(4,582)		198		(4,384)		Net other comprehensive (loss) income	(4,285)		593		(3,692)
Balance at March 31, 2021		$	(52,157)	$	(4,617)	$	(56,774)
Other comprehensive loss before reclassifications		(1,478)		0		(1,478)
Reclassified from AOCI to net income		0		198		198
Net other comprehensive (loss) income		(1,478)		198		(1,280)
Balance at June 30, 2021		$	(53,635)	$	(4,419)	$	(58,054)

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

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


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

The amounts reclassified out of AOCI by component and the affected Condensed Consolidated Statements of Operations line items are as follows (in thousands):


AOCI component	AOCI component	Line items in the Condensed Consolidated Statements of Operations affected by reclassifications from AOCI	Three months ended June 30,				Six months ended June 30,				AOCI component	Line items in the Condensed Consolidated Statements of Operations affected by reclassifications from AOCI	Three Months Ended March 31,
			2021		2020		2021		2020					2022		2021
Release of currency translation adjustment with the sale of business	Release of currency translation adjustment with the sale of business	Loss on sale of business	$	0	$	0	$	4,512	$	0	Release of currency translation adjustment with the sale of business	Loss on sale of business		$	—	$	4,512
Amortization of prior service cost on benefit obligations		Benefit plans, net	(198)		246		(396)		492
		Net (loss) income	$	(198)	$	246	$	4,116	$	492
Pension and post retirement adjustments, net of tax											Pension and post retirement adjustments, net of tax	Benefit plans, net		(593)		(198)
												Net (loss) income		$	(593)	$	4,314

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NOTE 2219 – FAIR VALUE MEASUREMENTS

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


(in thousands)	(in thousands)							(in thousands)
Available-for-sale securities	Available-for-sale securities	June 30, 2021		Level 1		Level 2		Available-for-sale securities	March 31, 2022		Level 1		Level 2
Corporate notes and bonds	Corporate notes and bonds	$	7,919	$	7,919	$	0	Corporate notes and bonds	$	8,218	$	8,218	$	—
Mutual funds	Mutual funds	678		0		678		Mutual funds	673		—		673
United States Government and agency securities	United States Government and agency securities	5,144		5,144		0		United States Government and agency securities	2,933		2,933		—
Total fair value of available-for-sale securities	Total fair value of available-for-sale securities	$	13,741	$	13,063	$	678	Total fair value of available-for-sale securities	$	11,824	$	11,151	$	673


(in thousands)	(in thousands)							(in thousands)
Available-for-sale securities	Available-for-sale securities	December 31, 2020		Level 1		Level 2		Available-for-sale securities	December 31, 2021		Level 1		Level 2
Corporate notes and bonds	Corporate notes and bonds	$	6,139	$	6,139	$	0	Corporate notes and bonds	$	9,477	$	9,477	$	—
Mutual funds	Mutual funds	636		0		636		Mutual funds	714		—		714
Corporate Stocks		4,168		4,168		0
United States Government and agency securities	United States Government and agency securities	4,365		4,365		0		United States Government and agency securities	2,017		2,017		—
Total fair value of available-for-sale securities	Total fair value of available-for-sale securities	$	15,308	$	14,672	$	636	Total fair value of available-for-sale securities	$	12,208	$	11,494	$	714

Available-For-Sale Securities

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

Senior Notes

See Note 1312 above for a discussion of our ~~recent offerings of Senior Notes.~~senior notes. The fair value of the ~~Senior Notes~~senior notes is based on readily available quoted market prices as of ~~June 30, 2021.~~March 31, 2022.


(in thousands)	(in thousands)	June 30, 2021				(in thousands)	March 31, 2022
Senior Notes	Senior Notes	Carrying Value		Estimated Fair Value		Senior Notes	Carrying Value		Estimated Fair Value
8.125% Senior Notes due 2026 ('BWSN')	8.125% Senior Notes due 2026 ('BWSN')	$	172,882	$	179,105	8.125% Senior Notes due 2026 ('BWSN')	$	188,200	$	197,759
6.50% Senior Notes due 2026 ('BWNB')						6.50% Senior Notes due 2026 ('BWNB')	$	151,440	$	144,353

Other Financial Instruments

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

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

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

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

3026

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

NOTE 2320 – RELATED PARTY TRANSACTIONS

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

Transactions with B. Riley

Based on its Schedule 13D filings with the SEC, B. Riley beneficially owns ~~33.1%~~approximately 30.3% of our outstanding common stock as of ~~June 30, 2021.~~March 31, 2022.

~~B. Riley was party to the Last Out Term Loans under our A&R Credit Agreement described in Note 14.~~

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

Total fees associated with B. Riley related to the ~~Last Out Term Loans and~~ services of Mr. Kenny Young ~~both as described above,~~ were $0.2 million and ~~$0.4~~$0.2 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~respectively, and were $3.3 million and $7.5 million for the~~ ~~three and six~~respectively ~~months ended June 30, 2020, respectively.~~.

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

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

The public offering of our common stock, as described in Note ~~17,~~14, was conducted pursuant to an underwriting agreement dated February 9, 2021, between us and B. Riley Securities, Inc., as representative of the several underwriters. Also on February 12, 2021, we paid B. Riley Securities, Inc. $9.5 million for underwriting fees and other transaction costs related to the offering.

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

On March 31, 2021, we entered into a sales agreement with B. Riley Securities, Inc., a related party, in which we may sell, from time to time, up to an aggregated principal amount of $150.0 million of 8.125% ~~senior~~ Senior N~~notes~~otes due 2026 to or through B. Riley Securities, Inc., as described in Note 1312. As of ~~June 30, 2021,~~March 31, 2022, we paid B. Riley Securities, ~~Inc. $0.3~~Inc. $0.6 million for underwriting fees and other transaction costs related to the ~~offering.~~offering of which $0.1 million has been paid for the three months ended March 31, 2022.

The public offering of our 7.75% Series A Cumulative Perpetual Preferred Stock, as described in Note ~~16,~~13, was conducted pursuant to an underwriting agreement dated May 4, 2021, between us and B. Riley Securities, Inc., as representative of several underwriters. At the closing date on May 7, 2021, we paid B. Riley Securities, Inc. $4.3 million for underwriting fees and other transaction cost related to the Preferred Stock offering.

On May 26, 2021, we completed the additional sale of 444,700 shares of our Preferred Stock, related to the grant to the underwriters, as described in Note ~~16,~~13, and paid B. Riley Securities, Inc. $0.4 million for underwriting fees in conjunction with the transaction.

On June 1, 2021, we issued 2,916,880 shares of the Company’s 7.75% Series A Cumulative Perpetual Preferred Stock and paid $0.4 million in cash due to B. Riley, a related party, in exchange for a deemed prepayment of $73.3 million of our then existing Last Out Term Loans and paid $0.9 million in cash for accrued interest, as described in Note ~~16.~~13.

On June 30, 2021, we entered into new Debt Facilities, as described in Note 1512. In connection with the Company’s entry into the Debt Facilities, B. Riley Financial, Inc., an affiliate of B. Riley, has provided a guaranty of payment with regard to the Company’s obligations under the Reimbursement Agreement, as describe in Note 1512. Under a fee letter with B. Riley, the Company shall pay B. Riley $0.9 million per annum in connection with the B. Riley Guaranty.

~~Transactions with B. Riley - Subsequent Events~~

On July 7, 2021, we entered into a sales agreement with B. Riley Securities, Inc., a related party, in which we may sell, from time to time, up to an aggregated principal amount of $7676.0 million of Preferred Stock to or through B. Riley Securities, Inc., as described in Note 1613.As of March 31, 2022, we paid B. Riley Securities, Inc. $0.2 million for underwriting fees and other transaction costs related to the offering.

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

On ~~March 26,~~December 17, 2021, ~~Vintage and~~ B. Riley ~~completed~~Financial, Inc. entered into a ~~transaction pursuant~~General Agreement of Indemnity (the "Indemnity Agreement"), between us and AXA-XL and or its affiliated associated and subsidiary companies (collectively the “Surety”). Pursuant to ~~which~~the terms of the Indemnity Agreement, B. Riley ~~agreed~~will indemnify the Surety for losses the Surety may incur as a result of providing a payment and performance bond in an aggregate amount not to ~~purchase from Vintage, and Vintage agreed to sell to~~exceed €30.0 million in connection with our proposed performance on a specified project. In consideration of B. Riley's execution of the Indemnity Agreement, we paid B. Riley ~~all 10,720,785 shares~~a fee of ~~our common stock owned~~$1.7 million following the issuance of the bond by ~~Vintage.~~the Surety, which represents approximately 5.0% of the bonded obligations, to be amortized over the term of the agreement.

~~Based~~On December 28, 2021, we received a notice that the underwriters of the 6.50% Senior Notes had elected to exercise their overallotment option for an additional $11.4 million in aggregate principal amount of the Senior Notes. At the closing date on ~~its Schedule 13D filings, Vintage beneficially owns 0% of our outstanding common stock as of June~~December 30, ~~2021.~~2021, we paid B. Riley Securities, Inc. $0.5 million for underwriting fees and other transaction cost related to the 6.50% Senior Notes overallotment.

NOTE 2421 – ~~ASSETS HELD FOR SALE,~~ACQUISITIONS AND DIVESTITURES ~~AND DISCONTINUED OPERATIONS~~

~~Assets Held~~Acquisitions

Fosler Construction

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

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

We estimated fair values primarily using the discounted cash flow method at September 30, 2021 for the preliminary allocation of consideration to the assets acquired and liabilities assumed. During the measurement period, we will continue to obtain information to assist in finalizing the fair value of assets acquired and liabilities assumed, which may differ materially from these preliminary estimates. Any subsequent changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill.

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

VODA

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

We estimated fair values primarily using the discounted cash flow method at November 30, 2021 for the preliminary allocation of consideration to the assets acquired and liabilities assumed. During the measurement period, we will continue to obtain information to assist in finalizing the fair value of assets acquired and liabilities assumed, which may differ materially from these preliminary estimates. Any subsequent changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill.

Fossil Power Systems

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

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

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

Optimus Industries

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

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

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

Purchase Price Allocations

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


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

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

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

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

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

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


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

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

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


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

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

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

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


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

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

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

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


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

Divestitures

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

In December 2019, we determined that a small business within the B&W Thermal segment met the criteria to be classified as held for sale. At December 31, 2020, the carrying value of the net assets planned to be sold approximated the estimated fair value less costs to sell. Refer to ~~Divestitures below as this sale closed March 5, 2021.~~

~~In December 2020, we determined that certain~~Certain real property assets ~~within~~for the ~~B&W Thermal segment met the criteria to be classified as held~~Lancaster, Ohio location were sold on August 13, 2021 for ~~sale. At June 30, 2021, the carrying value~~$18.9 million. We received $15.8 million of ~~the assets held for~~net proceeds after adjustments and expenses and recognized a gain on sale of ~~$1.8 million was lower than~~$13.9 million. In conjunction with the ~~estimated fair value less costs to sell.~~

~~The following table summarizes the carrying value of the assets and liabilities held for~~ sale, ~~at June 30,~~we executed a leaseback agreement commencing August 13, 2021 ~~and December~~which expires on August 31, ~~2020:~~

(in thousands) June 30, 2021 December 31, 2020
Accounts receivable – trade, net $ 0 $ 2,103
Accounts receivable – other 0 86
Contracts in progress 0 458
Inventories 0 1,676
Other current assets 0 405
     Current assets held for sale 0 4,728
Net property, plant and equipment 1,766 10,365
Intangible assets 0 759
Right-of-use-asset 0 32
     Non-current assets held for sale 1,766 11,156
Total assets held for sale $ 1,766 $ 15,884
Accounts payable $ 0 $ 5,211
Accrued employee benefits 0 178
Advance billings on contracts 0 370
Accrued warranty expense 0 466
Operating lease liabilities 0 32
Other accrued liabilities 0 2,048
     Current liabilities held for sale 0 8,305
Total liabilities held for sale $ 0 $ 8,305

~~Divestitures~~2041.

Effective March 5, 2021, we sold all of the issued and outstanding capital stock of Diamond Power Machine (Hubei) Co., Inc, for $2.8 million. We received $2.0 million in gross proceeds before expenses and recorded an $0.8 million favorable contract asset for the amortization period from March 8, 2021 through December 31, 2023. WeFor the twelve months ended December 31, 2021, we recognized a ~~$0.4~~$1.8 million pre-tax ~~gain,~~loss, inclusive of the recognition of $4.5 million of currency translation adjustment, on the sale of the business ~~in the three months ended March 31, 2021. For the three months ended June 30, 2021, we recorded an adjustment~~and after consideration of ~~$2.6 million related to~~ certain working capital ~~amounts~~adjustments that are in dispute. Additional adjustments may be necessary as this is finalized. ~~For the six months ended June 30, 2021, the net pre-tax loss on the sale was $2.2 million.~~

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

~~Discontinued Operations~~

~~On April 6, 2020, we fully settled the remaining escrow associated with the sale of the MEGTEC and Universal businesses and received $3.5 million in cash.~~

NOTE 2522 – NEW ACCOUNTING STANDARDS

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

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

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

~~In May 2021, the FASB issued ASU 2021-04,~~ Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Equity's Own Equity (Subtopic 815-40): Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force). The amendments in this update affect all entities that issue freestanding written call options that are classified in equity. Specifically, the amendments affect those entities when a freestanding equity-classified written call option is modified or exchanged and remains equity classified after the modification or exchange. The amendments that relate to the recognition and measurement of EPS for certain modifications or exchanges of freestanding equity-classified written call options affect entities that present EPS in accordance with the guidance in ~~Earnings Per Share (Topic 260)~~. The amendments in this update do not apply to modifications or exchanges of financial instruments that are within the scope of another Topic. That is, accounting for those instruments continues to be subject to the requirements in other Topics. The amendments in this update do not affect a holder’s accounting for freestanding call options. The update is applicable to B&W as we have previously issued freestanding written call options however those options remain unexercised as of June 30, 2021 and they have not been modified or exchanged to date. The amendments are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. We are currently evaluating the impact of the standards on our condensed consolidated financial statements.

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

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

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

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

~~December 15, 2020,~~2022, including interim periods within those fiscal years. We are currently evaluating the impact of the standard on our condensed consolidated financial statements.

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

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

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

BUSINESS OVERVIEW ~~OF RESULTS~~

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

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

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

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

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

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

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

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

•requirements for environmental improvements in various global markets;

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

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

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

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

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

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

•overall strength of the industrial industry; and

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

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

We recorded operating income of $2.8 million and an operating loss of $3.7 million in the three and six months ended June 30, 2021, respectively, compared to operating losses of $7.7 million and $18.0 million in ~~the~~ ~~three and six months ended~~ ~~June 30, 2020, respectively, and we showed improved results in all three~~ ~~segments as~~ ~~described below.~~

Adjusted EBITDA in the B&W Renewable segment was $3.4 million and $3.6 million in the three and six months ended June 30, 2021, respectively, compared to $(0.1) million and $(1.6) million in the three and six months ended ~~June 30, 2020, respectively~~. The improvement is primarily attributable to lower levels of direct overhead support and SG&A, reflecting the benefits of cost savings and restructuring initiatives, offset partially by the decrease in volume.

~~Adjusted EBITDA in the B&W Environmental segment was $2.7 million and $3.8 million~~ ~~in the three and six months ended June 30, 2021, respectively, compared to~~ ~~$(1.1) millionand $(0.8) million in the~~ ~~three and six months ended~~ ~~June 30, 2020, respectively.~~ ~~The increase is driven primarily by the higher volume and the decrease in shared resources.~~

Adjusted EBITDA in the B&W Thermal segment was $12.4 million and $22.9 million in the three and six months ended June 30, 2021, respectively, compared to $8.0 million and $15.6 million in the three and six months ended ~~June 30, 2020, respectively~~. This increase is primarily attributable to the increase in volume offset partially by product mix, an increase in expenses due to growth in Asia and Mid-East, and a increase in shared resources due to higher volume.

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

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

We ~~have identified additional initiatives that are underway as of the date of this filing that are expected to further reduce costs, and we~~ expect to continue to explore other cost saving initiatives to improve cash generation and evaluate additional non-core asset sales to continue to strengthen our liquidity. There are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate.

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

•$2.4 million and $3.4 million of restructuring costs were recognized in the three and six months ended June 30, 2021, respectively, compared to $2.4 million and $4.3 million of restructuring costs recognized in the three and six months ended ~~June 30, 2020, respectively. The restructuring costs primarily related to severance.~~

•$1.3 million and $2.2 million of financial advisory service fees were recognized in the three and six months ended June 30, 2021, respectively, as compared to $0.6 million and $1.5 million in the corresponding periods of 2020. Financial advisory service fees are included in ~~advisory fees and settlement costs~~ ~~in the Condensed Consolidated Statement of Operations.~~

•$2.1 million and $4.0 million of legal and other advisory fees were recognized in the three and six months ended June 30, 2021, respectively, as compared to $1.2 million and $3.8 million in the corresponding periods of 2020 These fees are related to the contract settlement and liquidity planning and are included in ~~advisory fees and settlement costs~~ ~~in the Condensed Consolidated Statement of Operations.~~

•$1.2 million and $1.5 million of litigation legal costs were recognized in the three and six months ended June 30, 2021, respectively, as compared to $0.3 million and $0.9 million in the corresponding periods of 2020. These fees are included in ~~advisory fees and settlement costs~~ ~~in the Condensed Consolidated Statement of Operations.~~

In addition, ~~to the discussions described above,~~ we continue to evaluate further dispositions, opportunities for additional cost savings and opportunities for subcontractor recoveries and other claims where appropriate and available. If the value of our

business was to decline, or if we were to determine that we were unable to recognize an amount in connection with any proposed disposition in excess of the carrying value of any disposed asset, we may be required to recognize impairments for one or more of our assets that may adversely impact our business, financial condition and results of operations.

RESULTS OF OPERATIONS

Components of Our Results of Operations

Revenue

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

Operating Income (Loss)

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

Net Income (Loss)

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

Condensed Consolidated Results of Operations

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

Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 $ Change 2021 2020 $ Change
Revenues:
B&W Renewable segment $ 38,344 $ 43,509 $ (5,165) $ 67,155 $ 79,508 $ (12,353)
B&W Environmental segment 28,358 25,172 3,186 59,518 51,092 8,426
B&W Thermal segment 136,316 67,212 69,104 244,597 153,895 90,702
Other (158) (496) 338 (162) (544) 382
$ 202,860 $ 135,397 $ 67,463 $ 371,108 $ 283,951 $ 87,157

Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 $ Change 2021 2020 $ Change
Adjusted EBITDA (1)
B&W Renewable segment $ 3,427 $ (138) $ 3,565 $ 3,631 $ (1,572) $ 5,203
B&W Environmental segment 2,698 (1,146) 3,844 3,799 (769) 4,568
B&W Thermal segment 12,431 8,018 4,413 22,861 15,592 7,269
Corporate (2,997) (3,805) 808 (5,682) (7,948) 2,266
Research and development costs (485) (1,231) 746 (1,073) (2,572) 1,499
$ 15,074 $ 1,698 $ 13,376 $ 23,536 $ 2,731 $ 20,805

~~(1)~~ Adjusted EBITDA for the three and six months ended June 30, 2020, excludes losses related to a non-strategic business and interest on letters of credit included in cost of operations that were previously included in Adjusted EBITDA and total $(0.1) million and $(0.2) million, respectively, and $(0.2) million and $(0.4) million, respectively.

~~Three Months Ended June 30, 2021 and 2020~~

~~Revenues increased by$67.5 million~~to $202.9 million in the second quarter of 2021 compared to $135.4 million in the corresponding period of 2020, primarily due to a higher level of construction project activity in the current period. Notwithstanding revenue increases in our Thermal and Environmental segments, revenues for each of our segments have been impacted by COVID-19 including the postponement and delay of several projects. Additionally, revenue was impacted by segment specific changes which are discussed in further detail in the sections below.

Operating income (loss) improved $10.5 million to $2.8 million in the second quarter of 2021 compared to $(7.7) million in the corresponding period of 2020. The increase is primarily due to the higher construction volume as described above, improved project execution and the benefits of costs savings and restructuring initiatives. Restructuring expenses, advisory fees, amortization expense, gains (losses) on dispositions of equity method investees, and impairments are discussed in further detail in the sections below.

~~Six Months Ended June 30, 2021 and 2020~~

~~Revenues increased by$87.2 million~~to $371.1 million in the six months ended June 30, 2021 compared to $284.0 million in the corresponding period of 2020, primarily due to a higher level of construction project activity in the current period. Revenues for each of our segments have been impacted by COVID-19 including the postponement and delay of several projects. In addition, revenue was impacted by segment specific changes which are discussed in further detail in the sections below.

Operating losses improved $14.3 million to $(3.7) million in the six months ended June 30, 2021 compared to $(18.0) million in the corresponding period of 2020. The increase is primarily due to the higher construction volume as described above, improved project execution and the benefits of costs savings and restructuring initiatives. Restructuring expenses, advisory fees, amortization expense, gains (losses) on dispositions of equity method investees, and impairments are discussed in further detail in the sections below.

~~Non-GAAP Financial Measures~~

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

Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 $ Change 2021 2020 $ Change
Adjusted gross profit (1)(2)
Operating income (loss) $ 2,784 $ (7,703) $ 10,487 $ (3,678) $ (18,001) $ 14,323
Selling, general and administrative ("SG&A") expenses 33,162 34,504 (1,342) 73,553 72,036 1,517
Advisory fees and settlement costs 4,526 1,989 2,537 7,817 6,228 1,589
Amortization expense 1,991 1,335 656 3,376 2,745 631
Restructuring activities 2,400 2,392 8 3,393 4,343 (950)
Research and development costs 609 1,231 (622) 1,197 2,572 (1,375)
Losses from a non-strategic business 299 97 202 287 218 69
Losses (gains) on asset disposals, net 38 2 36 (1,966) (913) (1,053)
$ 45,809 $ 33,847 $ 11,962 $ 83,979 $ 69,228 $ 14,751
~~(1)~~ ~~Amortization is not allocated to the segments' adjusted gross profit, but depreciation is allocated to the segments' adjusted gross profit.~~


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

~~(2)~~ Adjusted gross profit for the three and six months ended June 30, 2020, excludes losses related to a non-strategic business that was previously included in Adjusted gross profit and totals $0.1 million and $0.2 million, respectively


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

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

Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 $ Change 2021 2020 $ Change
Adjusted gross profit
B&W Renewable segment $ 9,825 $ 9,388 $ 437 $ 16,725 $ 16,309 $ 416
B&W Environmental segment 6,671 4,455 2,216 12,613 9,754 2,859
B&W Thermal segment 29,313 20,004 9,309 54,641 43,165 11,476
$ 45,809 $ 33,847 $ 11,962 $ 83,979 $ 69,228 $ 14,751

~~B&W Renewable Segment Results~~

Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 $ Change 2021 2020 $ Change
Revenues $ 38,344 $ 43,509 $ (5,165) $ 67,155 $ 79,508 $ (12,353)
Adjusted EBITDA $ 3,427 $ (138) $ 3,565 $ 3,631 $ (1,572) $ 5,203
Adjusted gross profit $ 9,825 $ 9,388 $ 437 $ 16,725 $ 16,309 $ 416
Adjusted gross profit % 25.6 % 21.6 % 24.9 % 20.5 %

~~Three Months Ended June 30, 2021 and 2020~~

Revenues in the B&W Renewable segment decreased 12%, or $5.2 million to $38.3 million in the second quarter of 2021 compared to $43.5 million in the corresponding period of 2020. The reduction in revenue is primarily due to project delays of large orders due to the continued adverse effects of COVID-19 in the second quarter of 2021 coupled with the completion of prior year large service and licensing projects and loss contracts that have not been replaced.

Adjusted EBITDA in the B&W Renewable segment increased $3.6 million, to $3.4 million in the second quarter of 2021 compared to $(0.1) million in the corresponding period of 2020. The improvement is primarily attributable to lower levels of direct overhead support and SG&A, reflecting the benefits of cost savings and restructuring initiatives, offset partially by the decrease in volume, as discussed above.

Adjusted gross profit in the B&W Renewable segment increased $0.4 million, to $9.8 million in the second quarter of 2021 compared to $9.4 million. The increase is primarily driven by lower levels of direct overhead, offset partially by the decrease in volume, as discussed above.

~~Six Months Ended June 30, 2021 and 2020~~

Revenues in the B&W Renewable segment decreased 16%, or $12.4 million to $67.2 million in the six months ended June 30, 2021 compared to $79.5 million in the corresponding period of 2020. The reduction in revenue is primarily due to project delays of large orders due to the continued adverse effects of COVID-19 in the first six months of 2021 coupled with the completion of prior year large service and licensing projects and loss contracts that have not been replaced.

Adjusted EBITDA in the B&W Renewable segment increased $5.2 million, to $3.6 million in the six months ended June 30, 2021 compared to $(1.6) million in the corresponding period of 2020. The benefits of cost savings and restructuring initiatives, decrease in shared resources due to lower volume and no additional changes in the estimated revenues and costs to complete the six European B&W Renewable EPC loss contracts, as described in Note 4, more than offset the decrease in volume, as discussed above.

Adjusted gross profit in the B&W Renewable segment increased $0.4 million, to $16.7 million in the second quarter of 2021 compared to $16.3 million due to the benefits of cost savings and restructuring initiatives and no additional changes in the estimated revenues and costs to complete the six European B&W Renewable EPC loss contracts, as described in Note 4, offset partially by the decrease in volume, as discussed above.

~~B&W Environmental Segment Results~~

Three months ended June 30, Six months ended June 30,
(In thousands) 2021 2020 $ Change 2021 2020 $ Change
Revenues $ 28,358 $ 25,172 $ 3,186 $ 59,518 $ 51,092 $ 8,426
Adjusted EBITDA $ 2,698 $ (1,146) $ 3,844 $ 3,799 $ (769) $ 4,568
Adjusted gross profit $ 6,671 $ 4,455 $ 2,216 $ 12,613 $ 9,754 $ 2,859
Adjusted gross profit % 23.5 % 17.7 % 21.2 % 19.1 %

~~Three Months Ended June 30, 2021 and 2020~~

Revenues in the B&W Environmental segment increased 13%, or $3.2 million to $28.4 million in the second quarter of 2021 compared to $25.2 million in the corresponding period of 2020. The increase is primarily due to higher project activity in the current quarter as compared to the prior quarter which was impacted due to the postponement of new projects as a result of COVID-19.

Adjusted EBITDA in the B&W Environmental segment was $2.7 million in the second quarter of 2021 compared to $(1.1) million in the corresponding period of 2020. The increase is driven primarily by the higher volume, as described above and a decrease in shared resources.

Adjusted gross profit in the B&W Environmental segment increased $2.2 million to $6.7 million in the second quarter of 2021 compared to $4.5 million in the corresponding period of 2020. The increase is primarily attributable to the increase in volume and product mix.

~~Six Months Ended June 30, 2021 and 2020~~

Revenues in the B&W Environmental segment increased 16%, or $8.4 million to $59.5 million in the six months ended June 30, 2021 compared to $51.1 million in the corresponding period of 2020. The increase is primarily due to higher project activity in the current period as compared to the prior period which was impacted due to the postponement of new projects as a result of COVID-19.

Adjusted EBITDA in the B&W Environmental segment was $3.8 million in the six months ended June 30, 2021 compared to $(0.8) million in the corresponding period of 2020. The increase is driven primarily by the higher volume, as described above, the benefits of cost-savings and restructuring initiatives and a $0.4 million improvement to complete the two B&W Environmental loss contracts, as described in Note 4.

Adjusted gross profit in the B&W Environmental segment increased $2.9 million to $12.6 million in the six months ended June 30, 2021 compared to $9.8 million in the corresponding period of 2020. The increase is primarily attributable to the increase in volume, lower levels of shared overhead and a $0.4 million improvement to complete the two B&W Environmental loss contracts, as described in Note 4.

~~B&W Thermal Segment Results~~

Three months ended June 30, Six months ended June 30,
(In thousands) 2021 2020 $ Change 2021 2020 $ Change
Revenues $ 136,316 $ 67,212 $ 69,104 $ 244,597 $ 153,895 $ 90,702
Adjusted EBITDA $ 12,431 $ 8,018 $ 4,413 $ 22,861 $ 15,592 $ 7,269
Adjusted gross profit $ 29,313 $ 20,004 $ 9,309 $ 54,641 $ 43,165 $ 11,476
Adjusted gross profit % 21.5 % 29.8 % 22.3 % 28.0 %

Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021

Revenues ~~in the B&W Thermal segment~~ increased ~~103%, or $69.1~~by$35.8 millionto ~~$136.3~~$204.0 million in the second quarter of 2021 compared to $67.2 million generated in the corresponding period of 2020. The revenue increase is attributable to a higher level of activity on construction projects in the current quarterthree months ended March 31, 2022 as compared to ~~the prior quarter which was impacted by project delays due to COVID-19.~~

~~Adjusted EBITDA in the B&W Thermal segment increased $4.4 million to $12.4~~$168.2 million in the ~~second quarter of 2021 compared to $8.0 million in the corresponding period of 2020, which~~three months ended March 31, 2021. The increase is ~~consistent with the increase in volume as described above offset partially by product mix, an increase in expenses due to growth in Asia and Mid-East, and a increase in shared resources due~~primarily attributable to higher ~~volume.~~

Adjusted gross profit in the B&W Thermal segment increased $9.3 million, to $29.3 million in the second quarter of 2021, compared to $20.0 million in the corresponding period of 2020, which is mainly attributable to the increase in revenue as described above.

volume driven by new-

4035

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

~~Revenues in~~ the ~~B&W~~acquisitions of Fosler Construction and VODA within our Renewable segment, the acquisitions of Fossil Power Systems and Optimus Industries within our Thermal segment, ~~increased 59%, or $90.7 million, to $244.6 million~~ in ~~the six months ended June 30, 2021 compared to $153.9 million generated in the corresponding period of 2020. The revenue increase is attributable~~addition to a higher level of volume in our Environmental segment partially offset by a lower level of construction activity in our Thermal segment. The negative impacts on ~~construction projects~~the global economy as a result of the ongoing Russia-Ukraine military conflict adversely impacted each of our segments causing shortages of supplies and materials and affecting the timing of revenue on several projects. Segment specific changes are discussed in further detail in the ~~current period~~sections below.

Net loss improved by $6.8 million from a net loss of $15.4 million in the three months ended March 31, 2021 to a net loss of $8.7 million in the three months ended March 31, 2022. Operating loss increased $0.3 million to an operating loss of $6.8 million in the three months ended March 31, 2022 as compared to ~~the prior period which was impacted by project delays due to COVID-19.~~

~~Adjusted EBITDA in the B&W Thermal segment increased $7.3 million to $22.9~~an operating loss of $6.5 million in the ~~six~~three months ended ~~June 30, 2021 compared~~March 31, 2021. The decrease is primarily due to ~~$15.6~~the $1.9 million gain on sale recognized in the ~~corresponding period of 2020, which is mainly attributable~~prior years quarter related to the ~~increase in volume~~sale of certain real property assets at the Copley, Ohio location as described ~~above offset partially by product mix, an increase~~ in Note 21 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report. Restructuring expenses, ~~due to growth~~advisory fees, research and development, depreciation and amortization expense, pension and other postretirement benefit plans, foreign exchange, and income taxes are discussed in ~~Asia and Mid-East, and a increase in shared resources due to higher volume.~~

~~Adjusted gross profit~~further detail in the B&W Thermal segment increased $11.5 million, to $54.6 million in the six months ended June 30, 2021, compared to $43.2 million in the corresponding period of 2020, which is consistent with the increase in revenue as described above.

sections below.

Bookings and Backlog

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

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

Bookings represent changes to the backlog. Bookings include additions from booking new business, subtractions from customer cancellations or modifications, changes in estimates of liquidated damages that affect selling price and revaluation of backlog denominated in foreign currency. We believe comparing bookings on a quarterly basis or for periods less than one year is less meaningful than for longer periods, and that shorter-term changes in bookings may not necessarily indicate a material trend.


		Three months ended June 30,				Six months ended June 30,					Three Months Ended March 31,
(In approximate millions)		2021		2020		2021		2020
(in approximate millions)										(in approximate millions)		2022		2021
B&W Renewable(1)	B&W Renewable(1)	$	44	$	31	$	81	$	65	B&W Renewable(1)		$	101	$	37
B&W Environmental	B&W Environmental	27		11		68		56		B&W Environmental		37		41
B&W Thermal	B&W Thermal	97		43		188		174		B&W Thermal		101		91
Other/eliminations		—		(1)		—		(1)

Bookings	Bookings	$	168	$	84	$	337	$	294	Bookings		$	239	$	169

(1) B&W Renewable bookings includes the revaluation of backlog denominated in currency other than U.S. dollars. The foreign exchange impact on B&W Renewable bookings in the ~~second quarter of~~three months ended March 31, 2022 and 2021 ~~and 2020~~ was ~~$(2.6)~~$6.0 million and ~~$(1.6) million, respectively. The foreign exchange impact on B&W Renewable bookings in the six months ended June 30, 2021 and 2020 was $4.5 million and $(0.6)~~$7.0 million, respectively.

Our backlog as of ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ was as follows:


		As of June 30,					As of March 31,
(In approximate millions)		2021		2020
(in approximate millions)						(in approximate millions)	2022		2021
B&W Renewable(1)	B&W Renewable(1)	$	221	$	215	B&W Renewable(1)	$	440	$	215
B&W Environmental	B&W Environmental	117		85		B&W Environmental	126		118
B&W Thermal	B&W Thermal	166		157		B&W Thermal	158		206
Other/eliminations	Other/eliminations	(4)		—		Other/eliminations	(3)		(4)
Backlog	Backlog	$	500	$	457	Backlog	$	721	$	535

(1) B&W Renewable backlog at ~~June 30, 2021,~~March 31, 2022, includes ~~$163.0~~$153.2 million related to long-term operation and maintenance contracts for renewable energy plants, with remaining durations extending until 2034. Generally, such contracts have a duration of 10-20 years and include options to extend.

Of the backlog at ~~June 30, 2021,~~March 31, 2022, we expect to recognize revenues as follows:


(In approximate millions)		2021		2022		Thereafter		Total
(in approximate millions)										(in approximate millions)	2022		2023		Thereafter		Total
B&W Renewable	B&W Renewable	$	57	$	26	$	138	$	221	B&W Renewable	$	233	$	68	$	139	$	440
B&W Environmental	B&W Environmental	59		30		28		117		B&W Environmental	88		14		24		126
B&W Thermal	B&W Thermal	114		50		2		166		B&W Thermal	125		29		4		158
Other/eliminations	Other/eliminations	(4)		—		—		(4)		Other/eliminations	(3)		—		—		(3)
Expected revenue from backlog	Expected revenue from backlog	$	226	$	106	$	168	$	500	Expected revenue from backlog	$	443	$	111	$	167	$	721

Non-GAAP Financial Measures

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


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

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

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

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


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

B&W Renewable Segment Results


	Three Months Ended March 31,
(in thousands)		2022		2021		$ Change
Revenues		$	67,961	$	28,811	$	39,150
Adjusted EBITDA		$	1,455	$	204	$	1,251

Three Months Ended March 31, 2022 and 2021

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

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

B&W Environmental Segment Results


	Three Months Ended March 31,
(in thousands)		2022		2021		$ Change
Revenues		$	34,948	$	31,160	$	3,788
Adjusted EBITDA		$	1,439	$	1,105	$	334

Three Months Ended March 31, 2022 and 2021

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

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

B&W Thermal Segment Results


	Three Months Ended March 31,
(In thousands)		2022		2021		$ Change
Revenues		$	102,239	$	108,281	$	(6,042)
Adjusted EBITDA		$	14,154	$	10,535	$	3,619

Three Months Ended March 31, 2022 and 2021

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

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

Corporate

Corporate costs in adjusted EBITDA include SG&A expenses that are not allocated to the reportable segments. These costs include, among others, certain executive, compliance, strategic, reporting and legal expenses associated with governance of the total organization and being an SEC registrant. Corporate costs ~~decreased $0.8~~increased $1.7 million to ~~$3.0~~$4.4 million in three months ended March 31, 2022 as compared to ~~$3.8~~$2.7 million incurred ~~for~~in the three months ended ~~June 30, 2021 and 2020, respectively.~~March 31, 2021. The ~~decrease~~increase is primarily due to ~~lower incentive compensation in the second quarter of 2021.~~

~~Corporate costs decreased $2.3 million to $5.7 million compared to $7.9 million incurred for the six months ended June 30, 2021~~increased tax services and ~~2020, respectively. The decrease is primarily due to lower incentive compensation,~~ audit ~~fees, and temporary consultant fees incurred in the first six months of 2021.~~fees.

Advisory Fees and Settlement Costs

Advisory fees and settlement ~~costs~~costs increased ~~by $2.5~~ $0.6 million to ~~$4.5~~$3.9 million in the ~~second quarter of 2021~~ three months ended March 31, 2022 as compared to ~~$2.0~~$3.3 million in the corresponding period of ~~2020 and advisory~~2021. The increase is primarily related to higher legal fees and ~~settlement~~other costs ~~increased $1.6 million to $7.8 million~~incurred in the ~~six months ended June 30, 2021 as compared to $6.2 million in the corresponding period of 2020. The change is primarily due to increased use of external consultants in the second quarter of 2021.~~current quarter.

Research and Development

Our research and development activities are focused on improving our products through innovations to reduce ~~the~~their cost ~~of our products~~ and make them more competitive, as well as to reduce performance risk of our products to better meet our and our ~~customers'~~customers’ expectations. Research and development expenses remained relatively unchanged and totaled ~~$0.6~~$0.7 million and ~~$1.2~~$0.6 million in the ~~second quarter of 2021 and 2020, respectively, and totaled $1.2 million and $2.6 million in the six~~three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. ~~The decrease resulted primarily from timing of specific research and development efforts.~~

Restructuring

Restructuring actions across our business units and corporate functions resulted in ~~$2.4~~$0.1 million and ~~$2.4 million in the second quarter of 2021 and 2020, respectively, and totaled $3.4 million and $4.3~~$1.0 million of expense in the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021, respectively. The decrease of $0.9 million for the three months ended March 31, 2022 is due to a lower level of restructuring actions compared to the prior year comparable quarter. For the three months ended March 31, 2021, the charges primarily consist of severance related to actions taken, including as part of the Company’s strategic, market-focused organizational and ~~2020, respectively.~~re-branding initiatives.

42Transition Costs

Transition costs across our corporate and business functions resulted in $2.6 million of expense in the three months ended March 31, 2022. These charges primarily result from actions taken to outsource certain tasks to offshore service providers or to transfer administrative and compliance tasks to global service providers as part of our strategic efforts to reduce future selling, general and administrative costs. Transition costs are included in selling, general and administrative expenses in our Condensed Consolidated Statements of Operations.

Depreciation and Amortization

Depreciation expense was ~~$2.4~~$2.2 million and ~~$2.9~~$2.7 million in the ~~second quarter of 2021 and 2020, respectively and depreciation expense was $5.1 million and $5.5 million in the six~~three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively.

Amortization expense was ~~$2.0~~$4.0 million and ~~$1.3~~$1.4 million in the ~~second quarter of 2021 and 2020, respectively and amortization expense was $3.4 million and $2.7 million in the six~~three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively.

Pension and Other Postretirement Benefit Plans

We recognize benefits from our defined benefit and other postretirement benefit plans based on actuarial calculations primarily because our expected return on assets is greater than our service ~~costs.~~cost. Service cost is low because our plan benefits are frozen except for a small number of hourly participants. Pension benefits were $5.9 million and $7.5 million in the second quarter of 2021 and 2020, respectively. Pension benefits were $15.0 million and $15.0 million in the six months ended June 30, 2021 and 2020, respectively.

Our pension costs also include ~~MTM~~mark-to-market ("MTM") adjustments from time to ~~time. Interim MTM charges~~time and are primarily a result of changes in the discount rate, curtailments orand settlements. Any MTM charge or gain should not be considered to be representative of future MTM adjustments as such events are not currently predicted and are in each case subject to market conditions and actuarial assumptions as of the date of the event giving rise to the MTM adjustment.There were no MTM adjustments for our ~~pension and~~ other postretirement benefit plans during the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020~~respectively.

~~Other than service cost of~~ ~~$0.2 million~~ ~~and $0.2 million in the~~ ~~second quarter of 2021 and 2020, respectively, and $0.4 million~~ ~~and $0.4 million in the~~ ~~six months ended~~ ~~June 30, 2021 and 2020, respectively, which are related to the small number of hourly participants still accruing benefits within the Babcock & Wilcox Thermal segment,~~ ~~pension benefit and MTM adjustments are excluded from the results of our segments.~~

The costs and funding requirements of our pension and postretirement benefit plans depend on our various assumptions, including estimates of rates of return on benefit-related assets, discount rates for future payment obligations, rates of future cost growth, mortality assumptions and trends for future costs. Variances from these estimates could have a material adverse effect on us. Our policy to recognize these variances annually through MTM accounting could result in volatility in our results of operations, which could be material. The funding obligations for the Company’s pension plans are impacted by the performance of the financial markets, particularly the equity markets, and interest rates. If the financial markets do not provide the long-term returns that are expected, or discount rates increase the present value of liabilities, the Company could be required to make larger contributions. Refer to Note 1211 to the Condensed Consolidated Financial Statements for further information regarding our pension and other postretirement plans.

Foreign Exchange

We translate assets and liabilities of our foreign operations into United States dollars at current exchange rates, and we translate items in our statement of operations at average exchange rates for the periods presented. We record adjustments resulting from the translation of foreign currency financial statements as a component of accumulated other comprehensive income (loss). We report foreign currency transaction gains and losses in the Condensed Consolidated Statements of ~~Operations~~.Operations.

Foreign exchange was a gain (loss) of ~~$1.8~~$3.1 million and ~~$7.1~~$(1.2) million for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and a gain/(loss) of $0.6 million and $(2.2) million for the six months ended June 30, 2021 and 2020,~~ respectively. Foreign exchange gains and losses are primarily related to unhedged intercompany loans denominated in European currencies to fund foreign operations.

Income Taxes

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


	Three Months Ended March 31,
(In thousands, except for percentages)		2022			2021
Loss before income taxes		$	(7,454)		$	(12,607)
Income tax expense		$	1,230		$	2,836
Effective tax rate		(16.5)		%	(22.5)		%

Our income tax expense in the ~~second~~first quarter of ~~2021~~2022 reflects a full valuation allowance against our net deferred tax assets, except in Mexico, Canada, the United Kingdom, Brazil, Finland, Germany, Thailand, the Philippines, Indonesia, and Sweden. Deferred tax assets are evaluated each period to determine whether realization is more likely than not. Valuation allowances are established when management determines it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. Valuation allowances may be removed in the future if sufficient positive evidence exists to outweigh the negative evidence under the framework of ASC 740, Income Taxes.

Our effective tax rate for the ~~second~~first quarter of ~~2021~~2022 is not reflective of the United States statutory rate primarily due to a valuation allowance against certain net deferred tax assets and unfavorable discrete ~~items, including the adjustment of deferred tax liabilities for the effect of an enacted change in the United Kingdom tax rate from 19% to 25% beginning in 2023.~~ items.In certain jurisdictions (namely, ~~Denmark~~the United States and Italy) where the ~~company~~Company anticipates a loss for the fiscal year or incurs a loss for the year-to-date period for which a tax benefit cannot be realized in accordance with ASC 740, the ~~company~~Company excludes the loss in that jurisdiction from the overall computation of the estimated annual effective tax rate. ~~For the period ended June 30, 2021, the United States was not considered a loss jurisdiction and was included in the estimated annual effective tax rate. .~~

~~In December 2019, the FASB issued ASU No. 2019-12,~~ ~~Simplifying the Accounting for Income Taxes~~. ASU No. 2019-12 removes certain exceptions to the general principles in Topic 740, primarily related to intraperiod tax allocation, recognizing deferred tax liabilities for changes in ownership of foreign equity method investments or foreign subsidiaries, and exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The Company adopted ASU No. 2019-12 on January 1, 2021, on a prospective basis. The adoption did not have a material impact on our interim consolidated financial statements, estimated income for the full fiscal year 2021 or to the trend of earnings.

Liquidity and Capital Resources

Liquidity

Our primary liquidity requirements include debt service, funding of dividends on preferred stock and working capital needs. We fund our liquidity requirements primarily through cash generated from operations, external sources of financing, including our, ~~recent Revolving Credit Agreement, Senior Notes, and~~senior notes, equity offerings, including our Preferred Stock, ~~each of~~and revolving credit agreement which are described ~~below and~~ in the Notes to our Condensed Consolidated Financial Statements included in Part I, Item 1I of ~~the~~this Quarterly Report in further detail along with other sources of liquidity.

~~We recently~~

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

•on ~~March 4, 2021,~~February 1, 2022, we ~~entered into A&R Amendment No. 3 to Amended and Restated Credit Agreement (“A&R Amendment No. 3”) with Bank~~acquired 100% ownership of America, N.A., as administrative agent to the lenders under our A&R Credit Agreement. A&R Amendment No. 3, among other matters, at the date of effectiveness (i) permits the prepayment of certain term loans, (ii) reduces the revolving credit commitments under our A&R Credit Agreement to $130.0 million and removes the ability to obtain revolving loans under our A&R Credit Agreement, and (iii) amends certain covenants and conditions to the extension of credit under our A&R Credit Agreement;

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

•~~on March 5, 2021, we sold all of the issued and outstanding capital stock of Diamond~~Fossil Power ~~Machine (Hubei) Co.,~~Systems, Inc. for ~~$2.8 million. We received $2.0~~approximately $59.1 million, in cash and recorded an $0.8 million favorable contract asset for the amortization period from March 8, 2021 through December 31, 2023. We recognized a $0.4 million gain on the sale of the business and recorded an adjustment of $2.6 million in the second quarter;

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

•on March 26, 2021, we entered into A&R Amendment No. 4 to Amended and Restated Credit Agreement (“A&R Amendment No. 4”) with Bank of America, N.A., as administrative agent to the lenders under our A&R Credit Agreement. A&R Amendment No. 4, among other matters, at the date of effectiveness (i) permits the issuance of additional Senior Notes of up to an aggregate principle amount of $150 million, and (ii) modifies the calculation of

~~the senior leverage ratio,~~ as described in Note 1521 to the Condensed Consolidated Financial Statements included in Part I, Item 1I of this Quarterly Report;

•on ~~May 7, 2021,~~February 28, 2022, we ~~completed a public offering~~acquired 100% ownership of ~~our Preferred Stock, in which we ultimately issued an aggregate 4,444,700 shares of our Preferred Stock, at an offering price of $25.00 per share~~Optimus Industries, LLC for ~~net proceeds of~~ approximately ~~$106.4~~$19.0 million, ~~after deducting underwriting discounts, commissions but before expenses,~~excluding working capital adjustments as described in Note 1621 to the Condensed Consolidated Financial Statements included in Part I, Item 1I of this Quarterly Report; and

•~~on June 1, 2021, we issued 2,916,880 shares~~during the first quarter of ~~our Preferred Stock~~2022, the Company sold $2.0 million aggregate principal of 8.125% Senior Notes and ~~paid $0.4 million in cash to B. Riley, a related party, in exchange for a deemed prepayment of $73.3~~received $2.0 million of ~~our then existing Tranche A-3 term loan and paid $0.9 million in cash for accrued interest due to B. Riley,~~net proceeds as described in Note 1412 to the Condensed Consolidated Financial Statements included in Part I, Item 1I of this Quarterly Report. ~~As a result of such deemed prepayment, the total amount outstanding under our Last Out Term Loans was reduced to zero;~~

•
~~on June 30, 2021, we paid dividends on our outstanding Preferred Stock totaling $1.7 million, as described in~~

See Note 1612, Note 13, Note 14 and Note 21 to the Condensed Consolidated Financial Statements included in Part I, Item 1I of this ~~Quarterly Report;~~

•as of June 30, 2021, we issued an additional $12.9 million aggregate principal amount of Senior Notes for $13.1 million net proceeds under the March 31, 2021 sales agreement as described in Note 13 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report;

•subsequent to June 30, 2021 and as of August 12, 2021, we issued additional shares of our Preferred Stock for $5.9 million net proceeds under the sales agreement as described in Note 16 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report;

•subsequent to June 30, 2021 and as of August 12, 2021, we issued additional Senior Notes for $12.9 million net proceeds under the sales agreement as described in Note 13 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report; and

•on June 30, 2021, we entered the Revolving Credit Agreement with PNC, as administrative agent and swing loan lender which provides for an up to $50.0 million asset-based revolving credit facility, including a $15 million letter of credit sublimit and a $5 million swingline sublimit. In addition, we entered into the Letter of Credit Agreement with PNC, pursuant to which PNC has agreed to issue up to $110 million in letters of credit secured in part by cash collateral provided by an affiliate of MSD. Lastly, we entered into the Reimbursement Agreement with MSD, as administrative agent, and the cash collateral providers from time to time party thereto, pursuant to which we shall reimburse MSD and any other cash collateral provider to the extent the up to $110 million of cash collateral provided by MSD and any other cash collateral provider to secure the Letter of Credit Agreement is drawn to satisfy draws on letters of credit, as described in Note 15 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.

~~See Note 13, Note 14, Note 15, Note 16, and Note 17 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of the~~ Quarterly Report for additional information on our external sources of financing and equity offerings.

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

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

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

Cash and Cash Flows

At ~~June 30, 2021,~~March 31, 2022, our unrestricted cash and cash equivalents totaled ~~$30.1~~$108.1 million and we had total debt of ~~$170.9 million.~~$343.8 million as well as $191.7 million of gross preferred stock outstanding. Our foreign business locations held ~~$27.8~~$35.9 million of our total unrestricted cash and cash equivalents at ~~June 30, 2021.~~March 31, 2022. In general, our foreign cash balances are not available to fund our U.S. operations unless the funds are repatriated or used to repay intercompany loans made from the U.S. to foreign entities, which could expose us to taxes we presently have not made a provision for in our results of operations. We presently have no plans to repatriate these funds to the ~~U.S..~~U.S. In addition, we had ~~$110.7~~$1.9 million of restricted cash at ~~June 30, 2021~~March 31, 2022 related to collateral for certain letters of ~~credit of which $60.7 million has been returned to us as of August 12, 2021.~~credit.

Cash used in operations was ~~$86.1~~$42.0 million in the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, which is primarily ~~represented in~~attributable to the ~~$40.3~~net loss, $10.0 million ~~change~~reduction in pension, postretirement and employee benefit liabilities and a ~~$45.7~~$13.2 million net decrease in operating cash outflows associated with changes in working capital. In the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, cash used in operations was ~~$49.3~~$54.0 million which is primarily ~~represented in~~ the result of our net loss, ~~before depreciation~~the change in pension, postretirement and ~~amortization.~~employee benefit liabilities. There was also ~~was~~ a ~~$0.9~~$13.2 million ~~net increase~~decrease in operating cash outflows associated with changes in working capital.

Cash flows from investing activities ~~provided~~used net cash of ~~$6.6~~$65.4 million in the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, primarily ~~related~~due to ~~proceeds from~~ the ~~sale~~acquisitions of business of $64.9 million and ~~assets and net change in available-for-sale securities, offset by $2.2~~$1.0 million of capital expenditures. In the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, cash flows from investing activities provided net cash of ~~$4.3~~$4.5 million, primarily related to ~~$8.0~~$3.3 million proceeds from ~~the settlement of remaining escrows associated with~~ the sale of ~~Palm Beach Resource Recovery Corporation~~business, proceeds from asset disposals and ~~MEGTEC and Universal businesses, offset by the~~ net change in available-for-sale securities, ~~and $1.7~~offset by $1.4 million of capital expenditures.

Cash flows from financing activities ~~provided~~used net cash of ~~$151.3~~$1.6 million in the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, primarily related to the ~~issuance~~payment of ~~Senior Notes, Preferred Stock and common~~the preferred stock dividend of $3.7 million offset by ~~$75.4 million Last Out Term Loans repayments, a $164.3 million net reduction on~~ the ~~prior U.S. Revolving Credit Facility and $10.9 million~~senior note proceeds of ~~financing fees.~~$2.0 million. Cash flows from financing activities provided net cash of ~~$35.7~~$35.9 million in the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, primarily related to ~~$60.0~~the $125.0 million ~~face value borrowings from the Last Out Term Loans~~issuance of senior notes and $161.5 million common stock issuance, offset by ~~$14.3~~$75.0 million oflast out term loans repayments, a $164.3 million net ~~borrowings from~~reduction on the ~~prior~~ U.S. Revolving Credit Facility and ~~$10.4~~$7.7 million of financing fees.

Debt Facilities

As described ~~above and~~ in the ~~Notes~~Note 12 to our Condensed Consolidated Financial Statements included in Part I, Item 1I of this Quarterly Report, on June 30, 2021, we entered into the ~~Debt Facilities, including the~~Reimbursement Agreement, Revolving Credit ~~Agreement.~~Agreement and Letter of Credit Agreement (collectively, the “Debt Documents” and the facilities thereunder, the “Debt Facilities”). The obligations of the Company under each of the Debt Facilities are guaranteed by certain existing and future domestic and foreign subsidiaries of the Company. B. Riley, ~~Financial, Inc. (“B. Riley”),~~ a related party, has provided a guaranty of payment with regard to the Company’s obligations under the Reimbursement ~~Agreement, as described below.~~Agreement. The Company expects to use the proceeds and letter of credit availability under the Debt Facilities for working capital purposes and general corporate ~~purposes, including to backstop certain~~purposes. The Revolving Credit Agreement matures on June 30, 2025. As of March 31, 2022, no borrowings have occurred under the Revolving Credit Agreement and under the Letter of

Credit Agreement, usage consisted of $16.2 million of financial letters of credit ~~issued under our previous A&R Credit Agreement, for which commitments were terminated, all loans were repaid~~ and ~~ll outstanding and undrawn~~$90.8 million of performance letters of ~~credit were collateralized on June 30, 2021.~~

~~Last Out Term Loans~~

Effective with the new debt facilities the Company entered into on June 30, 2021, as described in Note 15 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of the Quarterly Report, the Company has no remaining Last Out Term Loans and no further borrowings thereunder are available.

The Company recognized a loss on debt extinguishment of $6.2 million in the quarter ended June 30, 2020, primarily representing the unamortized value of the original issuance discount and fees on the Tranche A-3 Last Out Term Loan.

~~See Note 14 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of the Quarterly Report for additional information on our Last Out Term Loans.~~

~~A&R Credit Agreement~~credit.

As ~~described above, the A&R Credit Agreement commitments were terminated, all loans were repaid and all outstanding and undrawn letters~~of March 31, 2022, a subsidiary has borrowed $1.7 million against a $3.5 million line of credit ~~were collateralized~~with a variable interest rate on ~~June 30, 2021. The Company recognized a gain on debt extinguishment~~the line of ~~$6.5 million~~credit of 5.0% per annum. On April 1, 2022, the line of credit was paid in the quarter ended June 30, 2021, primarily representing the write-off of accrued revolver fees of $11.3 million offset by the unamortized deferred financing fees of $4.8 million related to the prior A&R Credit Agreement.full and terminated.

Letters of Credit, Bank Guarantees and Surety Bonds

Certain of our subsidiaries primarily outside of the United States have credit arrangements with various commercial banks and other financial institutions for the issuance of letters of credit and bank guarantees in association with contracting activity. The aggregate value of all such letters of credit and bank guarantees ~~outstanding~~ outside of our ~~prior A&R~~Letter of Credit Agreement as of ~~June 30, 2021~~March 31, 2022 was ~~$57.3~~$48.3 million. The aggregate value of the outstanding letters of credit provided ~~by our prior A&R~~under the Letter of Credit Agreement backstopping letters of credit or bank guarantees was ~~$22.1~~$34.8 million as of ~~June 30, 2021.~~March 31, 2022. Of the

outstanding letters of credit issued under ~~our prior A&R~~the Letter of Credit Agreement, ~~$32.1~~$52.0 million are subject to foreign currency revaluation.

We have also posted surety bonds to support contractual obligations to customers relating to certain contracts. We utilize bonding facilities to support such obligations, but the issuance of bonds under those facilities is typically at the surety's discretion. These bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds those underwriters issue in support of some of our contracting activity. As of ~~June 30, 2021,~~March 31, 2022, bonds issued and outstanding under these arrangements in support of contracts totaled approximately ~~$259.3~~$221.5 million. The aggregate value of the letters of credit ~~provided by our prior A&R Credit Agreement~~ backstopping surety bonds was ~~$24.6~~$9.2 million.

Other Indebtedness - ~~Loan~~Loans Payable

As ~~described in Note 15, during the six months ended June 30, 2021,~~of March 31, 2022, our Denmark subsidiary ~~received two~~has three unsecured ~~interest free~~interest-free loans totaling ~~$2.6~~$3.3 million under a local government loan program related to COVID-19. The loans of ~~$0.9~~$0.8 million, $1.6 million and ~~$1.7~~$0.9 million are payable in April 2022, May 2022 and May 2023, respectively. The loan payable in May 2023 is included in long term loans payables in our Condensed Consolidated Balance Sheets. Subsequent to March 31, 2022, ~~respectively.~~the loan due April 2022 was repaid on April 1, 2022.

~~Subsequent to~~As of March 31, 2022, Fosler Construction has two loans totaling $8.9 million. Both loans have a variable interest rate with a minimum rate of 6.0% and are due June 30, ~~2021,~~2022. Fosler Construction also has loans primarily for vehicles and equipment totaling $0.6 million at March 31, 2022. The vehicle and equipment loans are included in long term loans payables in our ~~Denmark subsidiary received an unsecured interest free loan totaling $0.9 million under a local government loan program related to COVID-19. The loan is payable in May 2023.~~Condensed Consolidated Balance Sheets.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have, or are reasonably expected to have, a material current or future effect on its financial condition, results of operations, liquidity, capital expenditures or capital resources at ~~June 30, 2021.~~March 31, 2022.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

For a summary of the critical accounting policies and estimates that we use in the preparation of our unaudited Condensed Consolidated Financial Statements, see ~~“Critical~~"Critical Accounting Policies and ~~Estimates”~~Estimates" in our Annual ~~Report.~~Report for the year ended December 31, 2021. There have been no significant changes to our policies during the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposures to market risks have not changed materially from those disclosed under ~~“Quantitative~~"Quantitative and Qualitative Disclosures About Market ~~Risk”~~Risk" in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company's management, with the participation of our Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Exchange Act")). Our disclosure controls and procedures, by their nature, can provide only reasonable assurance regarding the control objectives. It should be noted that the design of any system of disclosure controls and procedures is based in part upon various assumptions about the likelihood of future events, and we cannot assure that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Based on the evaluation referred to above, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures are effective as of ~~June 30, 2021~~March 31, 2022 to provide reasonable assurance that

information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and such information is accumulated and communicated to management as appropriate to allow timely decisions regarding disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal controls over financial reporting, despite the fact that some of our team members are working remotely in response to the COVID-19 pandemic. We are continually monitoring and assessing ~~the COVID-19 situation~~these situations on our internal controls to ensure their operating effectiveness.

PART II ~~- OTHER INFORMATION~~

Item 1. Legal Proceedings

For information regarding ongoing investigations and litigation, see Note 2017 to the ~~unaudited~~ Condensed Consolidated Financial Statements included in Part I, Item I of this ~~report,~~Quarterly Report, which we incorporate by reference into this Item.

Item 1A. Risk Factors

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

~~in our Quarterly Report on Form 10-Q for~~2021. Other than the ~~quarter ended March 31, 2021. There are~~additional risk factor set forth below there have been no material changes to the ~~following~~ risk ~~factors:~~factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2021.

~~We repaid~~The ongoing invasion of Ukraine by Russia may continue to adversely affect our ~~A&R Credit Agreement~~business and ~~our new Revolving Credit Agreement restricts our~~results of operations.

The ongoing invasion of Ukraine by Russia, and the global response to it, may continue to adversely affect our business and results of operations. The military conflict between Russia and Ukraine has caused significant volatility and disruptions to the global markets, including shortages of supplies and materials necessary for our business. For example, the conflict can impact our ability to place orders for materials, such as steel, in Europe, and may more broadly impact lead times for materials globally. It is not possible to predict the short- and long-term implications of this conflict, which could include but are not limited to further uncertainty about economic and political stability, delays in access to supplies and materials, increases in inflation rate and energy prices and adverse effects on currency exchange rates and financial markets. As ~~disclosed~~described in our Business Overview and Results of Operations included in Part I, Item II and Note 17 to the Condensed Consolidated Financial Statements included in Part I, Item 1I of ~~the Quarterly Report, we repaid our A&R Credit Agreement on June 30, 2021. Also as of June 30, 2021, we entered into the Debt Documents, including our new Revolving Credit agreement.~~

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

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

4843

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

In accordance with the provisions of the employee benefit plans, the Company acquired the following shares in connection with the vesting of employee restricted stock that require us to withhold shares to satisfy employee statutory income tax withholding obligations. The following table identifies the number of common shares and average price per share for each month during the quarter ended ~~June 30, 2021.~~March 31, 2022. The Company does not have a general share repurchase program at this time.


(data in whole amounts)	(data in whole amounts)							(data in whole amounts)
Period	Period	Total number of shares acquired (1)	Average price per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs		Period	Total number of shares acquired (1)	Average price per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs
April 2021		—	$	—	—	$	—
May 2021		158	$	9.02	—	$	—
June 2021		—	$	—	—	$	—
January 2022								January 2022	19,734	$	8.65	—	$	—
February 2022								February 2022	6,833	$	7.37	—	$	—
March 2022								March 2022	—	$	—	—	$	—
Total	Total	158	$	9.02	—	$	—	Total	26,567	$	8.32	—	$	—

(1) Acquired shares are recorded in treasury stock in our Condensed Consolidated Balance Sheets.

Item 6. Exhibits


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

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

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

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

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

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

3.6						Certificate of Increase in Number of Shares of 7.75% Series A Cumulative Perpetual Preferred Stock, dated June 1, 2021 (incorporated by reference to Exhibit 3.1 to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on July 4,7, 2021 (File No. 001-36876)).

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

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

~~10.2~~						Amendment No. 5 to Amended and Restated Credit Agreement dated May 10, 2021 (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on May 13, 2021 (File No. 001-36876)).

~~10.3~~						Revolving Credit, Guaranty and Security Agreement, dated as of June 30, 2021, by and among Babcock & Wilcox Enterprises, Inc. and PNC Bank, National Association, as administrative agent, lender and swing loan lender (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on July 7, 2021 (File No. 001-36876)).

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


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

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






























































































































































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

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

32.1						Section 1350 certification of Chief Executive Officer.

32.2						Section 1350 certification of Chief Financial Officer.

101.SCH						XBRL Taxonomy Extension Schema Document.

101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB						XBRL Taxonomy Extension Label Linkbase Document.

101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF						XBRL Taxonomy Extension Definition Linkbase Document.



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

*Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.

SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		BABCOCK & WILCOX ENTERPRISES, INC.

~~August 12, 2021~~May 9, 2022	By:	/s/ Louis Salamone
		Louis Salamone
		Executive Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Financial and Accounting Officer and Duly Authorized Representative)

5146


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

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


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


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