Babcock & Wilcox Enterprises Annual Report 2020

← All annual reports

FY2020 Annual Report · Babcock & Wilcox Enterprises

Loading PDF…

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

☒

☐

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

For the fiscal year ended December 31, 2020

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
(State or other Jurisdiction of Incorporation or Organization)

47-2783641
(I.R.S. Employer Identification No.)

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

44305
(Zip Code)

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

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

Title of each class
Common Stock, $0.01 par value
8.125% Senior Notes due 2026

Trading Symbol(s)
BW
BWSN

Name of each exchange on which registered
New York Stock Exchange
New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

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 x 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 x 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

Non-accelerated filer

☐

☒

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 extension 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐☐ No x

The aggregate market value of the registrant's common stock held by non-affiliates of the registrant on the last business
day of the registrant's most recently completed second fiscal quarter (based on the closing sales price on the New York Stock
Exchange on June 30, 2020) was approximately $52.6 million.

The number of shares of the registrant's common stock outstanding at February 28, 2021 was 85,564,466.

DOCUMENTS INCORPORATED BY REFERENCE

In accordance with General Instruction G(3) of Form 10-K, certain information required by Part III hereof will either be incorporated into this Form 10-K by
reference to our Definitive Proxy Statement for our Annual Meeting of Shareholders filed within 120 days of December 31, 2020 or will be included in an
amendment to this Form 10-K filed within 120 days of December 31, 2020.

SUMMARY RISK FACTORS

Our business is subject to varying degrees of risk and uncertainty. Investors should consider the risks and uncertainties summarized below, as well as the risks and
uncertainties discussed in Part I, Item 1A, “Risk Factors” of this Annual Report on Form 10-K. The summary below is provided for ease of reference, is not
intended to reflect a complete explanation of relevant risks and uncertainties and should be read together with the more detailed description of these risks and
uncertainties in Part I, Item 1A, “Risk Factors” of this Annual Report on Form 10-K. Additional risks not presently known to us or that we currently deem
immaterial may also affect us. If any of these risks occur, our business, financial condition, results of operations or cash flows could be materially and adversely
affected, and, as a result, the trading price for our common stock could decline.
Our business is subject to the following principal risks and uncertainties:

•

Our business, financial condition and results of operations, and those of our customers, suppliers and vendors, are being adversely affected by the recent
global COVID-19 outbreak and may be adversely affected by other similar outbreaks;

• We are subject to risks associated with contractual pricing in our industry, including the risk that, if our actual costs exceed the costs we estimate on our

•

fixed-price contracts, our profitability will decline, and we may suffer losses;
Our contractual performance may be affected by third parties' and subcontractors' failure to meet schedule, quality and other requirements on our
contracts, which could increase our costs, scope, technical difficulty or in extreme cases, our ability to meet contractual requirements;
If our co-venturers fail to perform their contractual obligations on a contract or if we fail to coordinate effectively with our co-venturers, we could be
exposed to legal liability, loss of reputation, reduced profit, or liquidity challenges;

•

Our operations are subject to operating risks, which could expose us to potentially significant professional liability, product liability, warranty and other
claims. Our insurance coverage may be inadequate to cover all of our significant risks, our insurers may deny coverage of material losses we incur, or we
may be unable to obtain additional insurance coverage in the future, any of which could adversely affect our profitability and overall financial condition;

• We may not be able to compete successfully against current and future competitors;
• We derive substantial revenues from electric power generating companies and other steam-using industries, including coal-fired power plants in

particular. Demand for our products and services depending on spending in these historically cyclical industries. Additionally, legislative and regulatory
developments relating to clean air legislation are affecting industry plans for spending on coal-fired power plants within the United States and elsewhere;
Demand for our products and services is vulnerable to macroeconomic downturns and industry conditions;

•
• We must refinance our A&R Credit Agreement on or prior to June 30, 2022,
•
Our A&R Credit Agreement, which governs our U.S. Revolving Credit Facility and our Last Out Term Loans, restricts our operations;
• Maintaining adequate bonding and letter of credit capacity is necessary for us to successfully complete, bid on and win various contracts;
• We are exposed to credit risk and may incur losses as a result of such exposure;
•

A disruption in, or failure of our information technology systems, including those related to cybersecurity, could adversely affect our business operations
and financial performance;

• We are subject to government regulations that may adversely affect our future operations;
•
•

Our operations are subject to various environmental laws and legislation that may become more stringent in the future;
Our operations involve the handling, transportation and disposal of hazardous materials, and environmental laws and regulations and civil liability for
contamination of the environment or related personal injuries may result in increases in our operating costs and capital expenditures and decreases in our
earnings and cash flows;
Our international operations are subject to political, economic and other uncertainties not generally encountered in our domestic operations;
International uncertainties and fluctuations in the value of foreign currencies could harm our profitability;
Substantial sales, or the perception of sales, of our common stock by us or certain of our existing shareholders could cause our stock price to decline and
future issuances may dilute our common shareholders' ownership in the Company;
B. Riley and Vintage each have significant influence over us;

•
• We are subject to continuing contingent liabilities of BWXT following the spin-off;
• We could be subject to changes in tax rates or tax law, adoption of new regulations, changing interpretations of existing law or exposure to additional tax

•
•
•

liabilities in excess of accrued amounts that could adversely affect our financial position;
Our ability to use net operating losses (“NOLs”) and certain tax credits to reduce future tax payments could be further limited if we experience an
additional “ownership change”;
Negotiations with labor unions and possible work stoppages and other labor problems could divert management's attention and disrupt operations. In
addition, new collective bargaining agreements or amendments to existing agreements could increase our labor costs and operating expenses;
Pension and medical expenses associated with our retirement benefit plans may fluctuate significantly depending on a number of factors, and we may be
required to contribute cash to meet underfunded pension obligations; and,
Natural disasters or other events beyond our control, such as war, armed conflicts or terrorist attacks could adversely affect our business.

•

Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings

TABLE OF CONTENTS

PART I

PART II

Market for Registrant's Common Equity, Related Stockholder Matter and Issuer Purchase of Equity Securities
Select Financial Data
Management's Discussion and Analysis of Financial Condition and Results of Operation

Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.

Item 5.
Item 6.
Item 7.

Business Overview
Results of Operations - Years Ended December 31, 2020 and 2019
Liquidity and Capital Resources
Effects of Inflation and Changing Prices
Critical Accounting Policies and Estimates

Item 7A.
Item 8.

Quantitative and Qualitative Disclosures about Market Risk
Consolidated Financial Statements and Supplemental Data

Report of Independent Registered Public Accounting Firm
Consolidated Statements of Operations for the Years Ended December 31, 2020 and 2019
Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2020 and 2019
Consolidated Balance Sheets as of December 31, 2020 and 2019
Consolidated Statement of Stockholders' (Deficit) Equity for the Years Ended December 31, 2020 and 2019
Consolidated Statements of Cash Flows for the Years Ended December 31, 2020 and 2019
Notes to Consolidated Financial Statements

Item 9.
Item 9A.

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
Controls and Procedures

Disclosure Controls and Procedures
Management's Report on Internal Control Over Financial Reporting
Changes in Internal Control Over Financial Reporting

Other Information

PART III

Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Beneficial Owners and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services

PART IV

Exhibits and Financial Statement Schedules
Form 10-K Summary

Item 9B.

Item 10.
Item 11.
Item 12.
Item 13.
Item 14.

Item 15.
Item 16.
Signatures

PAGE

5
11
30
30
31

31
31
31
31
33
39
43
44
45
46
46
49
50
51
52
53
55
104
104
104
105
106
106

106
107
107
107
108

108
116
116

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

PART I

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

These forward-looking statements are based on management’s current expectations and involve a number of risks and uncertainties, including, among other things,
the impact of COVID-19 on us and the capital markets and global economic climate generally; our recognition of any asset impairments as a result of any decline
in the value of our assets or our efforts to dispose of any assets in the future; our ability to obtain and maintain sufficient financing to provide liquidity to meet our
business objectives, surety bonds, letters of credit and similar financing; our ability to comply with the requirements of, and to service the indebtedness under, our
A&R Credit Agreement; our anticipated use of proceeds from our recent offerings of our common stock and 8.125% senior 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; 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. These factors also include the cautionary statements included in this report and the risk factors set forth under Part I, Item 1A of this Annual
Report.

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.

ITEM 1. Business

In this Annual Report on Form 10-K, or this “Annual Report”, unless the context otherwise indicates, “B&W,” “we,” “us,” “our” or the “Company” mean Babcock
& Wilcox Enterprises, Inc. and its consolidated subsidiaries.

•

Babcock & Wilcox Renewable: Cost-effective technologies for efficient and environmentally sustainable power and heat generation, including waste-to-
energy, 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.
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.

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;
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.

Recent Developments

2021 Common Stock Offering

As described in Note 25, to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, on February 12, 2021, we completed a public
offering of our common stock, par value $0.01 per share (“Common Stock”). The offering was conducted pursuant to an underwriting agreement (the
“Underwriting Agreement”) dated February 9, 2021, between us and B. Riley Securities, Inc., a related party, as representative of the several underwriters (the
“Underwriters”). At the closing, we issued 29,487,180 shares of Common Stock, inclusive of 3,846,154 shares of Common Stock issued pursuant to the full
exercise of the Underwriter’s option to purchase Common Stock. We received gross proceeds of approximately $172.5 million from the 2021 common stock
offering. Net proceeds received were approximately $163 million after deducting underwriting discounts and commissions, but before expenses.

The net proceeds of the Common Stock offering and the Senior Notes offering, described below, are expected to be used to support our clean energy growth
initiatives, to make a prepayment towards the outstanding U.S. Revolving Credit Facility and permanently reduce the commitments under our senior secured credit
facilities.

2021 Senior Notes Offering

As described in Note 25, to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, on February 12, 2021, we completed a public
offering of $120 million aggregate principal amount of our 8.125% senior notes due 2026 (the “Senior Notes”). The offering was conducted pursuant to an
underwriting agreement (the “Notes Underwriting Agreement”) dated February 10, 2021, between us and B. Riley Securities, Inc., a related party, as representative
of several underwriters (the “Underwriters”). At the completion, we received gross proceeds of approximately $125 million aggregate principal amount of Senior
Notes, inclusive of $5 million aggregate principal amount of Senior Notes issued pursuant to the full exercise of the Underwriter’s option to purchase Senior Notes.
Net proceeds received were approximately $120 million after deducting underwriting discounts and commissions, but before expenses.

In addition to the public offering, we issued $35 million of Senior Notes to B. Riley Financial, Inc., a related party, in exchange for a deemed prepayment of our
existing Last Out Term Loan' Tranche A-6 in a concurrent private offering.

On February 12, 2021, we also entered into an indenture (the “Base Indenture”) and a supplemental indenture (the “Supplemental Indenture” and, together with the
Base Indenture, the “Indenture”) with The Bank of New York Mellon Trust Company National Association, as trustee (the “Trustee”), among the Company and the
Trustee. The Indenture establishes the form and provides for the issuance of the Senior Notes.

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 are effectively subordinated in right of payment to all of the Company’s existing and future secured
indebtedness and structurally subordinated to all existing and future indebtedness of the Company’s subsidiaries, including trade payables. The Notes bear interest
at the rate of 8.125% per annum. Interest on the Senior Notes is payable quarterly in arrears on January 31, April 30, July 31 and October 31 of each year,
commencing on April 30, 2021. The Notes will mature on February 28, 2026.

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

The Indenture contains customary events of default and cure provisions. If an uncured default occurs and is continuing, the Trustee or the holders of at least 25% of
the principal amount of the Senior Notes may declare the entire amount of the Senior Notes, together with accrued and unpaid interest, if any, to be immediately
due and payable. In the case of an event of default involving the Company’s bankruptcy, insolvency or reorganization, the principal of, and accrued and unpaid
interest on, the principal amount of the Senior Notes, together with accrued and unpaid interest, if any, will automatically, and without any declaration or other
action on the part of the Trustee or the holders of the Senior Notes, become due and payable.

Amendments to the A&R Credit Agreement

As described in Note 25, to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, on February 8, 2021, we entered into A&R
Amendment No. 2 with Bank of America. A&R Amendment No. 2, among other matters, (i) permits the issuance of the Senior Notes in the 2021 senior notes
offering described above, (ii) permits the deemed prepayment of $35 million of our Tranche A term loan with $35 million principal amount of Senior Notes, (iii)
provides that 75% of the Senior Notes gross proceeds shall be used to repay outstanding borrowings and permanently reduce the commitments under our senior
secured credit facilities, and (iv) provide that $5 million of certain previously deferred facility fees will be paid by the Company.

As described in Note 25, to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, on March 4, 2021, we entered into A&R
Amendment No. 3 with Bank of America. A&R Amendment No. 3, among other matters, at the date of effectiveness (i) permits the prepayment of certain term
loans, (ii) reduces the revolving credit commitments to

$130 million and removes the ability to obtain revolving loans under the credit agreement, and (iii) amends certain covenants and conditions to the extension of
credit.

On March 4, 2021, effective with the execution of Amendment No. 3, we paid $75 million towards our existing Last Out Term Loans and paid $21.8 million of
accrued and deferred fees related to the revolving credit facility.

2021 Exchange Agreement

As described in Note 25, to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, on February 12, 2021, the Company and B.
Riley Financial, Inc. (“B. Riley”), a related party, entered into a letter agreement (the “Exchange Agreement”) pursuant to which we agreed to issue to B. Riley
$35 million aggregate principal amount of Senior Notes in exchange for a deemed prepayment of $35 million of our existing Tranche A term loan with B. Riley
(the “Exchange”). The Exchange Agreement also provides that, promptly following the date of the Exchange Agreement, the parties thereto will negotiate in good
faith and use commercially reasonable efforts to enter into an agreement providing B. Riley or its designated affiliates with customary registration rights in respect
of the Senior Notes issued to B. Riley in the Exchange.

On February 12, 2021, we issued $35 million of Senior Notes to B. Riley Financial, Inc. in exchange for a deemed prepayment of our existing Last Out Term Loan'
Tranche A-6.

COVID-19

In December 2019, a novel strain of coronavirus, COVID-19, was identified in Wuhan, China and has subsequently spread globally. This global pandemic has
disrupted business operations, 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 the changes in the
severity of the virus in these countries and localities. These restrictions, including travel and curtailment of other activity, negatively impact our ability to conduct
business. The volatility and variability of the virus has limited our ability to forecast the impact of the virus on our customers and our business. The continuing
resurgence of COVID-19, including at least one new strain thereof, has resulted in the reimposition of certain restrictions and may lead to 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
begin in 2020 to be delayed into 2021 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 2021 and beyond. Additionally, out of concern for our employees, even where
restrictions permit employees to return to our offices and worksites, we have incurred additional costs to protect our employees as well as, advising 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 COVID-19 impact 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, as well as the availability and effectiveness 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, as part of the Company’s response to the impact of the COVID-19 pandemic on its business, the Company has taken a number of cash
conservation and cost reduction measures, as described in Note 1 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Contracts

We execute our contracts through a variety of methods, including fixed-price, cost-plus, target price cost incentive, cost-reimbursable or some combination of these
methods. Contracts are usually awarded through a competitive bid process. Factors that customers may consider include price, technical capabilities of equipment
and personnel, plant or equipment availability, efficiency, safety record and reputation.

Fixed-price contracts are for a fixed selling price to cover all costs and any profit element for a defined scope of work. Fixed-price contracts entail more risk to us
because they require us to predetermine both the quantities of work to be performed and the costs associated with executing the work.

We have contracts that extend beyond one year. Most of our long-term contracts have provisions for progress payments. We attempt to cover anticipated increases
in labor, material and service costs of our long-term contracts either through an estimate of such changes, which is reflected in the original price, or through risk-
sharing mechanisms, such as escalation or price adjustments for items such as labor and commodity prices. In the event of a contract deferral or cancellation
without cause, we generally would be entitled to recover costs incurred, settlement expenses and profit on work completed prior to deferral or termination.
Significant or numerous cancellations could adversely affect our business, financial condition, results of operations and cash flows.

From time to time, we partner with other companies to meet the needs of our customers, which can result in project-related joint venture entities or other
contractual arrangements. While we carefully select our partners in these arrangements, they can subject us to risks that we may not be able to fully control and
may include joint and several liability. An example of this includes BWL Energy Ltd., which was formed to complete the construction of a waste wood fired boiler
contract in the United Kingdom (the fifth European B&W Renewable EPC loss contracts described in Note 5 to the Consolidated Financial Statements included in
Part II, Item 8 of this Annual Report). This joint venture combined our expertise in waste-to-energy power plant design, engineering, procurement and construction
with our partner's civil construction capability to provide a full turnkey product to our customer.

We generally recognize our contract revenues and related costs over time using the cost-to-cost input method that uses costs incurred to date relative to total
estimated costs at completion to measure progress toward satisfying our performance obligations. Accordingly, we review contractual sales price and cost estimates
regularly as the work progresses and reflect adjustments in profit proportionate to the percentage-of-completion in the period when we revise those estimates. To
the extent that these adjustments result in a reduction or an elimination of previously reported profits with respect to a contract, we would recognize a charge
against current earnings, which could be material.

See further description of risks related to our contracting in Risks Related to Our Operations in Part I, Item 1A of this Annual Report.

Our arrangements with customers frequently require us to provide letters of credit, bid and performance bonds or guarantees to secure bids or performance under
contracts, which may involve providing cash collateral or other contract security that we may not be able to provide.

Other sales, such as parts and certain aftermarket service activities, are not in the form of long-term contracts, and we recognize revenues as goods are delivered
and work is performed. See further discussion in Note 5 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Foreign Operations

Our operations in Denmark provide comprehensive services to companies in the waste-to-energy and biomass energy sector of the power generation market,
currently primarily in Europe. Our operations in Italy provide custom-engineered comprehensive wet and dry cooling solutions and aftermarket parts and services
to the power generation industry including natural gas-fired and renewable energy power plants, as well as downstream oil and gas, petrochemical and other
industrial end markets in Europe, the Middle East and the Americas. Our operations in Scotland and China primarily provide boiler cleaning technologies and
systems (such as sootblowers), primarily to Europe and China, respectively. Our Canadian operations serve the Canadian industrial power, oil production and
electric utility markets. We have manufacturing facilities in Mexico to serve global markets. We also own a manufacturing facility in China that produces tube
bundles for our cooling solutions.

Our operations are assessed based on three reportable segments which changed in 2020 as part of our strategic, market-focused organizational and re-branding
initiative to accelerate growth and provide stakeholders improved visibility into our renewable and environmental growth platforms. The reportable segment
change in 2020 also reflects an ongoing integration of our foreign operations services on a worldwide basis, as well as expanding services beyond Europe to meet
emerging global demand for these services, including the Americas and the Middle East.

The functional currency of our foreign operating entities is not the United States dollar, and as a result, we are subject to exchange rate fluctuations that impact our
financial position, results of operations and cash flows. We do not currently engage in currency hedging activities to limit the risks of currency fluctuations.

For additional information on the geographic distribution of our revenues, see Note 4 to our Consolidated Financial Statements included in Part II, Item 8 of this
Annual Report.

Customers

We provide our products and services to a diverse customer base that includes utilities and other power producers located around the world. We have no customers
that individually accounted for more than 10% of our consolidated revenues for the years ended December 31, 2020 and 2019. Refer to Note 4 to the Consolidated
Financial Statements included in Part II, Item 8 of this Annual Report for additional information.

Competition

With over 150 years of experience, we have supplied highly engineered energy and environmental equipment in more than 90 countries. We have a competitive
advantage in our experience and technical capability to reliably convert a wide range of fuels to steam. Our strong, installed base around the globe also yields
competitive advantages, although our markets are highly competitive and price sensitive. We compete with a number of domestic and foreign companies
specializing in power generation, environmental, and cooling systems and services. Each segment's primary competitors are summarized as follows:

B&W Renewable segment

B&W Environmental segment

B&W Thermal segment

CNIM Group
Hitachi Zosen
Martin
Keppel Seghers
Valmet
Andritz
Steinmuller

Hamon
Enexio
Seagull
Paharpur
Evapco
SPG Dry
Radscan AB
LAB

(1)

GE
MH Power Systems
Babcock Power
(1)
Doosan
Clyde Bergemann
Enerfab

(1)

GE, MH Power Systems, Babcock Power & Doosan are also considered primary competitors of the B&W Environmental Segment.

Across each of our segments, we also compete with a variety of engineering and construction companies related to installation of steam generating systems and
environmental control equipment; specialized industrial equipment; and other suppliers of replacement parts, repair and alteration services and other services
required to retrofit and maintain existing steam generating systems. The primary bases of competition are price, technical capabilities, quality, timeliness of
performance, breadth of products and services and willingness to accept contract risks.

Raw Materials and Suppliers

Our operations use raw materials such as carbon and alloy steels in various forms and components and accessories for assembly, which are available from
numerous sources. We do not view ourselves as having any “principal” suppliers because none exceed 10% of the Company’s cost of goods sold. We generally
purchase these raw materials and components as needed for individual contracts. We do not depend on a single source of supply for any significant raw materials.
Although shortages of some raw materials have existed from time to time, no serious shortage exists at the present time.

Employees

At December 31, 2020, we had approximately 2,100 employees worldwide, of which approximately 2,050 were full-time. Approximately 400 of our hourly
employees are union-affiliated, covered by four union agreements related to active facilities in Mexico, the United States, the United Kingdom, and Canada. We
have one union agreement that expires in 2022 and one that expires in 2023. We are preparing to renegotiate two other agreements that expire in 2021. We consider
our relationships with our employees and unions to be in good standing.

Patents and Licenses

We currently hold a large number of United States and foreign patents and have patent applications pending. We have acquired patents and technology licenses and
granted technology licenses to others when we have considered it advantageous for us to do so. Although in the aggregate our patents and licenses are important to
us, we do not regard any single patent or license or group of related patents or licenses as critical or essential to our business as a whole. In general, we depend on
our technological capabilities and the application thereof, rather than patents and licenses, in the conduct of our various businesses.

Research and Development Activities

Our research and development activities improve our products through innovations to reduce the cost of our products to make them more competitive and through
innovations to reduce performance risk of our products to better meet our customer expectations. Research and development costs are expensed as incurred.

Permits and Licenses

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our operations. The
kinds of permits, licenses and certificates required in our operations depend upon a number of factors. We are not aware of any material noncompliance and believe
our operations and certifications are currently in compliance with all relevant permits, licenses and certifications.

Environmental

We have been identified as a potentially responsible party at various cleanup sites under the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (“CERCLA”). CERCLA and other environmental laws can impose liability for the entire cost of cleanup on any of the potentially
responsible parties, regardless of fault or the lawfulness of the original conduct. Generally, however, where there are multiple responsible parties, a final allocation
of costs is made based on the amount and type of wastes disposed of by each party and the number of financially viable parties, although this may not be the case
with respect to any particular site. We have not been determined to be a major contributor of wastes to any of these sites. On the basis of our relative contribution
of waste to each site, we expect our share of the ultimate liability for the various sites will not have a material adverse effect on our consolidated financial
condition, results of operations or cash flows in any given year.

Information about our Executive Officers

For a listing of our executive officers, see Part III, Item 10 of this Annual Report, which information is incorporated herein by reference.

Available Information

Our website address is www.babcock.com. We make available through the Investor section of this website under “Financial Information,” free of charge, our
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, our proxy statement, statements of beneficial ownership of securities
on Forms 3, 4 and 5 and amendments to those reports as soon as reasonably practicable after we electronically file those materials with, or furnish those materials
to, the Securities and Exchange Commission (the “SEC”). In addition, the SEC maintains a website at www.sec.gov that contains reports, proxy and annual reports,
and other information regarding issuers that file electronically with the SEC. We have also posted on our website our: Corporate Governance Principles; Code of
Business Conduct; Code of Ethics for our Chief Executive Officer and Senior Financial Officers; Related Party Transactions Policy; Management, Board Members
and Independent Director Contact Information; Amended and Restated By-laws; charters for the Audit & Finance, Governance, and Compensation Committees of
our Board; and Modern Slavery Transparency Statement. We are not including the information contained in our website as part of or incorporating it by reference
into this Annual Report.

Item 1A. Risk Factors

You should carefully consider each of the following risks and all of the other information contained in this Annual Report. If any of these risks develop into actual
or expected events, our business, financial condition, results of operations or cash flows could be materially and adversely affected, and, as a result, the trading
price of our common stock could decline.

The risks discussed below are not the only ones facing our business but do represent those risks that we believe are material to us. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial may also harm our business. Please read the cautionary notice regarding forward-
looking statements under the heading “Cautionary Statement Concerning Forward-Looking Information.”

Risks Related to Our Operations

When a pandemic or outbreak of an infectious disease occurs, our business, financial condition and results of operations may be adversely affected. In December
2019, a novel strain of coronavirus, COVID-19, was identified in Wuhan, China and has subsequently spread globally. This global pandemic has disrupted business
operations, 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 the changes in the severity of the virus
in these countries and localities. These restrictions, including travel and curtailment of other activity, negatively impact our ability to conduct business. The
volatility and variability of the virus has limited our ability to forecast the impact of the virus on our customers and our business. The continuing resurgence of
COVID-19, including at least one new strain thereof, has resulted in the reimposition of certain restrictions and may lead to 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 begin in 2020
to be delayed into 2021 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 2021 and beyond. Additionally, out of concern for our employees, even where restrictions
permit employees to return to our offices and worksites, we have incurred additional costs to protect our employees as well as, advising 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 COVID-19 impact 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, as well as the availability and effectiveness of COVID-19 vaccinations in the U.S. and abroad, all of which are uncertain, out of our control, and cannot be
predicted.

This outbreak, and any outbreak of a contagious disease or any other adverse public health developments in countries where we operate, could have material and
adverse effects on our business, financial condition and results of operations. These effects could include, among others, delays in the construction of new projects
or the delay of maintenance on existing products provided to our customers, as well as disruptions or restrictions on our employees’ ability to travel to necessary
worksites, including as a result of the temporary closure of our facilities or the facilities of our customers, suppliers, vendors or projects. Further, our suppliers and
vendors may be adversely impacted, which may impair their ability to satisfy their contractual obligations to us and our customers. In addition, any outbreak may
result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn or
recession that could affect demand for our products or our ability to obtain financing for our business or projects.

The ultimate effect of the COVID-19 outbreak or any other outbreak on our business, financial condition and operations will depend heavily on the future
developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information that may emerge
concerning the severity of the virus and the actions taken to contain the virus or treat its impact, among others. In particular, the actual and threatened spread of the
virus could have a material adverse effect on the global economy and may negatively impact financial markets in the future, including the trading price of our
common stock, could cause continued interest rate volatility and movements that could make obtaining financing or refinancing our debt obligations more
challenging or more expensive, could continue to limit the ability of our personnel to travel to service the needs of our customers as well as limiting the ability of
our suppliers and vendors to travel

to service our business, and could result in any threatened areas to be subject to quarantine and shelter-in-place orders among other restrictions. Any of these
developments could have a material adverse effect on our business, liquidity, capital resources and financial results and may result in our inability to continue
operating as a going concern or require us to reorganize our company in its entirety, including through bankruptcy proceedings.

We are subject to risks associated with contractual pricing in our industry, including the risk that, if our actual costs exceed the costs we estimate on our fixed-
price contracts, our profitability will decline, and we may suffer losses.

We are engaged in a highly competitive industry, and we have priced a number of our contracts on a fixed-price basis. Our actual costs could exceed our
projections. We attempt to cover the increased costs of anticipated changes in labor, material and service costs of long-term contracts, either through estimates of
cost increases, which are reflected in the original contract price, or through price escalation clauses. Despite these attempts, the cost and gross profit we realize on a
fixed-price contract could vary materially from the estimated amounts because of supplier, contractor and subcontractor performance, changes in job conditions,
variations in labor and equipment productivity and increases in the cost of labor and raw materials, particularly steel, over the term of the contract. These variations
and the risks generally inherent in our industry may result in actual revenues or costs being different from those we originally estimated and may result in reduced
profitability or losses on contracts. Some of these risks include:

•

•
•

difficulties encountered on our large-scale contracts related to the procurement of materials or due to schedule disruptions, equipment performance
failures, engineering and design complexity, unforeseen site conditions, rejection clauses in customer contracts or other factors that may result in
additional costs to us, reductions in revenue, claims or disputes;
our inability to obtain compensation for additional work we perform or expenses we incur as a result of our customers or subcontractors providing
deficient design or engineering information or equipment or materials;
requirements to pay liquidated damages upon our failure to meet schedule or performance requirements of our contracts; and
difficulties in engaging third-party subcontractors, equipment manufacturers or materials suppliers or failures by third-party subcontractors, equipment
manufacturers or materials suppliers to perform could result in contract delays and cause us to incur additional costs.

We have recently experienced these risks with several large loss contracts in our B&W Renewable and B&W Environmental segments, which resulted in
significant losses for our operations, impaired our liquidity position and had previously resulted in substantial doubt regarding whether we would be able to
continue to operate as a going concern. If we were to experience these risks again in the future, our business, results of operations, financial condition and liquidity
may be materially and adversely affected.

Our contractual performance may be affected by third parties' and subcontractors' failure to meet schedule, quality and other requirements on our contracts,
which could increase our costs, scope, technical difficulty or in extreme cases, our ability to meet contractual requirements.

We conduct significant portions of our business by engaging in long-term contracts related to highly complex, customized equipment or facilities for electrical
generation, industrial processes, and/or environmental compliance. The complexity of these contracts generally necessitates the participation of others, including
third-party suppliers, subcontractors, equipment or part manufacturers, partner companies, other companies with whom we do not have contractual relationships,
customers, financing organizations, regulators and others. Our reliance on these parties subjects us to the risk of customer dissatisfaction with the quality or
performance of the products or services we sell due to supplier or subcontractor failure. Third-party supplier and subcontractor business interruptions could include
but are not limited to, work stoppages, union negotiations, other labor disputes and payment disputes. Current or future economic conditions could also impact the
ability of suppliers and subcontractors to access credit and, thus, impair their ability to provide us quality products, materials, or services in a timely manner, or at
all.

While we endeavor to limit our liability to matters within our control, not all scenarios can be foreseen, and we may become subject to the risk of others’
performance that may or may not be within our control or influence. Delays, changes or failures of others, including third-party suppliers and subcontractors, could
subject us to additional costs, delays, technical specification changes, contractual penalties or other matters for which we may be unable to obtain compensation, or
compensation may not be sufficient. In extreme cases, the direct or indirect effects of such matters may cause us to be unable to fulfill our contractual
requirements.

For example, we have had contracts to construct several renewable energy plants in the United Kingdom. These contracts have suffered delays, additional costs and
contractual penalties. The complexity of these contracts required us to subcontract matters, such as structural engineering, to other companies that have the
appropriate technical expertise. In September 2017, a structural steel issue was discovered at one of these plants, which management believes is the result of an
engineering error by a subcontractor. The failure resulted in work being stopped at the plant with the failure and at two other plants under construction where
failure had not occurred, but had used a similar design by the same subcontractor. In each case, additional engineering analysis and remediation was required,
resulting in additional costs, schedule delays and contractual penalties, all of which were significantly greater at the plant where failure occurred. Through
December 31, 2020, approximately $36 million of additional costs had been recorded related to the effects of this engineering error across the three plants. In each
case, the engineering assessment, remediation and safety plans required approval of the subcontractor, customer, our contract partner and the respective analysis of
independent technical experts from each. Any insurance coverage may be insufficient, or the timing of any insurance proceeds may not meet our liquidity
requirements. In the case of the fifth European B&W Renewable loss contract, where structural failure occurred, the process to agree on the appropriate structural
remediation and plan to implement the remediation was lengthy and resulted in a more significant delay.

If our co-venturers fail to perform their contractual obligations on a contract or if we fail to coordinate effectively with our co-venturers, we could be exposed
to legal liability, loss of reputation, reduced profit, or liquidity challenges.

We often perform contracts jointly with third parties or execute contracts with partners through joint ventures or other contractual arrangements. For example, we
enter into contracting consortia and other contractual arrangements to bid for and perform jointly on large contracts. We may not be able to control the actions of
our partners in these arrangements, and influence over the actions of our partners and the contractual outcomes may be limited. Success on these joint contracts
depends in part on whether our co-venturers fulfill their contractual obligations satisfactorily. If any one or more of these third parties fail to perform their
contractual obligations satisfactorily, we may be required to make additional investments and provide added services in order to compensate for that failure. If we
are unable to adequately address any performance issues when and if required, customers may exercise their rights to terminate a joint contract, exposing us to
legal liability, damage to our reputation, reduced profit or liquidity challenges.

For example, our joint venture partner for a renewable energy plant in the United Kingdom entered into administration (similar to filing for bankruptcy in the U.S.)
in late February 2018. Accordingly, we were required to take over the civil scope of the renewable energy plant project, which resulted in significant delays and
materially increased our costs on the project. The same joint venture partner is party to another previously awarded bid, but where notice to proceed has not been
provided.

Our collaborative arrangements also involve risks that participating parties may disagree on business decisions and strategies. These disagreements could result in
delays, additional costs and risks of litigation. In these arrangements, we sometimes have joint and several liabilities with our partners, and we cannot be certain
that our partners will be able to satisfy any potential liability that could arise. Our inability to successfully maintain existing collaborative relationships or enter into
new collaborative arrangements could have a material adverse effect on our results of operations.

Our backlog is subject to unexpected adjustments and cancellations and may not be a reliable indicator of future revenues or earnings.

There can be no assurance that the revenues projected in our backlog will be realized or, if realized, will result in profits. Because of contract cancellations or
changes in scope and schedule, we cannot predict with certainty when or if backlog will be performed. In addition, even where a contract proceeds as scheduled, it
is possible that contracted parties may default and fail to pay amounts owed to us or poor contract performance could increase the cost associated with a contract.
Delays, suspensions, cancellations, payment defaults, scope changes and poor contract execution could materially reduce or eliminate the revenues and profits that
we actually realize from contracts in backlog.

Reductions in our backlog due to cancellation or modification by a customer or for other reasons may adversely affect, potentially to a material extent, the revenues
and earnings we actually receive from contracts included in our backlog. Many of the contracts in our backlog provide for cancellation fees in the event customers
cancel contracts. These cancellation fees usually provide for reimbursement of our out-of-pocket costs, revenues for work performed prior to cancellation and a
varying percentage of the profits we would have realized had the contract been completed. However, we typically have no contractual right upon cancellation to the
total revenues reflected in our backlog. Contracts may remain in our backlog for

extended periods of time. If we experience significant contract terminations, suspensions or scope adjustments to contracts reflected in our backlog, our financial
condition, results of operations and cash flows may be adversely impacted.

Our operations are subject to operating risks, which could expose us to potentially significant professional liability, product liability, warranty and other
claims. Our insurance coverage may be inadequate to cover all of our significant risks, our insurers may deny coverage of material losses we incur, or we may
be unable to obtain additional insurance coverage in the future, any of which could adversely affect our profitability and overall financial condition.

We engineer, construct and perform services in, and provide products for, large industrial facilities where accidents or system failures can have significant
consequences. Risks inherent in our operations include:

accidents resulting in injury or the loss of life or property;
environmental or toxic tort claims, including delayed manifestation claims for personal injury or loss of life;
pollution or other environmental mishaps;
adverse weather conditions;

•
•
•
•
• mechanical failures;
property losses;
•
business interruption due to political action or other reasons; and
•
labor stoppages.
•

Any accident or failure at a site where we have provided products or services could result in significant professional liability, product liability, warranty and other
claims against us, regardless of whether our products or services caused the incident. We have been, and in the future, we may be, named as defendants in lawsuits
asserting large claims as a result of litigation arising from events such as those listed above.

We endeavor to identify and obtain in established markets insurance agreements to cover significant risks and liabilities. Insurance against some of the risks
inherent in our operations is either unavailable or available only at rates or on terms that we consider uneconomical. Also, catastrophic events customarily result in
decreased coverage limits, more limited coverage, additional exclusions in coverage, increased premium costs and increased deductibles and self-insured
retentions. Risks that we have frequently found difficult to cost-effectively insure against include, but are not limited to, business interruption, property losses from
wind, flood and earthquake events, war and confiscation or seizure of property in some areas of the world, pollution liability, liabilities related to occupational
health exposures (including asbestos), the failure, misuse or unavailability of our information systems, the failure of security measures designed to protect our
information systems from cybersecurity threats, and liability related to risk of loss of our work in progress and customer-owned materials in our care, custody and
control. Depending on competitive conditions and other factors, we endeavor to obtain contractual protection against uninsured risks from our customers. When
obtained, such contractual indemnification protection may not be as broad as we desire or may not be supported by adequate insurance maintained by the customer.
Such insurance or contractual indemnity protection may not be sufficient or effective under all circumstances or against all hazards to which we may be subject. A
successful claim for which we are not insured or for which we are underinsured could have a material adverse effect on us. Additionally, disputes with insurance
carriers over coverage may affect the timing of cash flows and, if litigation with the carrier becomes necessary, an outcome unfavorable to us may have a material
adverse effect on our results of operations. Moreover, certain accidents or failures, including accidents resulting in bodily injury or harm, could disqualify us from
continuing business with customers, and any losses arising thereby may not be covered by insurance or other indemnification.

Our wholly-owned captive insurance subsidiary provides workers' compensation, employer's liability, commercial general liability, professional liability and
automotive liability insurance to support our operations. We may also have business reasons in the future to have our insurance subsidiary accept other risks which
we cannot or do not wish to transfer to outside insurance companies. These risks may be considerable in any given year or cumulatively. Our insurance subsidiary
has not provided significant amounts of insurance to unrelated parties. Claims as a result of our operations could adversely impact the ability of our insurance
subsidiary to respond to all claims presented.

Additionally, upon the February 22, 2006 effectiveness of the settlement relating to the Chapter 11 proceedings involving several of our subsidiaries, most of our
subsidiaries contributed substantial insurance rights to the asbestos personal injury trust, including rights to (1) certain pre-1979 primary and excess insurance
coverages and (2) certain of our 1979-1986 excess insurance coverage. These insurance rights provided coverage for, among other things, asbestos and other
personal injury claims, subject to the terms and conditions of the policies. The contribution of these insurance rights was made in exchange for the agreement on
the part of the representatives of the asbestos claimants, including the representative of future claimants, to the entry of a permanent injunction, pursuant to Section
524(g) of the United States Bankruptcy Code, to channel to the

asbestos trust all asbestos-related claims against our subsidiaries and former subsidiaries arising out of, resulting from or attributable to their operations, and the
implementation of related releases and indemnification provisions protecting those subsidiaries and their affiliates from future liability for such claims. Although
we are not aware of any significant, unresolved claims against our subsidiaries and former subsidiaries that are not subject to the channeling injunction and that
relate to the periods during which such excess insurance coverage related, with the contribution of these insurance rights to the asbestos personal injury trust, it is
possible that we could have underinsured or uninsured exposure for non-derivative asbestos claims or other personal injury or other claims that would have been
insured under these coverages had the insurance rights not been contributed to the asbestos personal injury trust.

We may not be able to compete successfully against current and future competitors.

Some of our competitors or potential competitors have greater financial or other resources than we have and in some cases are government supported. Our
operations may be adversely affected if our current competitors or new market entrants introduce new products or services with better features, performance, prices
or other characteristics than those of our products and services. Furthermore, we operate in industries where capital investment is critical. We may not be able to
obtain as much purchasing and borrowing leverage and access to capital for investment as other companies, which may impair our ability to compete against
competitors or potential competitors.

Risks Related to Our Industry

We derive substantial revenues from electric power generating companies and other steam-using industries, including coal-fired power plants in particular.
Demand for our products and services depends on spending in these historically cyclical industries. Additionally, recent legislative and regulatory
developments relating to clean air legislation are affecting industry plans for spending on coal-fired power plants within the United States and elsewhere.

The demand for power generation products and services depends primarily on the spending of electric power generating companies and other steam-using
industries and expenditures by original equipment manufacturers. These expenditures are influenced by such factors including, but not limited to:

•
•
•
•
•
•
•
•
•
•
•

prices for electricity, along with the cost of production and distribution;
prices for natural resources such as coal and natural gas;
demand for electricity and other end products of steam-generating facilities;
availability of other sources of electricity or other end products;
requirements of environmental legislation and regulations, including potential requirements applicable to carbon dioxide emissions;
investments in renewable energy sources and technology;
impact of potential regional, state, national and/or global requirements to significantly limit or reduce greenhouse gas emissions in the future;
level of capacity utilization and associated operations and maintenance expenditures of power generating companies and other steam-using facilities;
requirements for maintenance and upkeep at operating power plants and other steam-using facilities to combat the accumulated effects of wear and tear;
ability of electric generating companies and other steam users to raise capital; and
relative prices of fuels used in boilers, compared to prices for fuels used in gas turbines and other alternative forms of generation.

We estimate that 43% and 45% of our consolidated revenues in 2020 and 2019, respectively, were related to coal-fired power plants. The availability of natural gas
in great supply has caused, in part, low prices for natural gas in the United States, which has led to more demand for natural gas relative to energy derived from
coal. A material decline in spending by electric power generating companies and other steam-using industries on coal-fired power plants over a sustained period of
time could materially and adversely affect the demand for our power generation products and services and, therefore, our financial condition, results of operations
and cash flows. Coal-fired power plants have been scrutinized by environmental groups and government regulators over the emissions of potentially harmful
pollutants. This scrutiny and other economic incentives including tax advantages, have promoted the growth of nuclear, wind and solar power, among others, and a
decline in cost of renewable power plant components and power storage. The recent economic environment and uncertainty concerning new environmental
legislation or replacement rules or regulations in the United States and elsewhere has caused many of our

major customers, principally electric utilities, to delay making substantial expenditures for new plants, and delay upgrades to existing power plants.

Demand for our products and services is vulnerable to macroeconomic downturns and industry conditions.

Demand for our products and services has been, and we expect that demand will continue to be, subject to significant fluctuations due to a variety of factors beyond
our control, including macroeconomic and industry conditions. These factors include, but are not limited to, the cyclical nature of the industries we serve, inflation,
geopolitical issues, the availability and cost of credit, volatile oil and natural gas prices, low business and consumer confidence, high unemployment and energy
conservation measures.

Unfavorable macroeconomic conditions may lead customers to delay, curtail or cancel proposed or existing contracts, which may decrease the overall demand for
our products and services and adversely affect our results of operations.

In addition, our customers may find it more difficult to raise capital in the future due to limitations on the availability of credit, increases in interest rates and other
factors affecting the federal, municipal and corporate credit markets. Also, our customers may demand more favorable pricing terms and find it increasingly
difficult to timely pay invoices for our products and services, which would impact our future cash flows and liquidity. Inflation or significant changes in interest
rates could reduce the demand for our products and services. Any inability to timely collect our invoices may lead to an increase in our borrowing requirements,
our accounts receivable and potentially to increased write-offs of uncollectible invoices. If the economy weakens, or customer spending declines, then our backlog,
revenues, net income and overall financial condition could deteriorate.

Risks Related to Our Liquidity and Capital Resources

We must refinance our A&R Credit Agreement on or prior to June 30, 2022.

As described in Note 14 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, on May 14, 2020, we entered into an agreement
with our lenders amending and restating the Amended Credit Agreement (the “A&R Credit Agreement”). The A&R Credit Agreement refinanced our U.S.
Revolving Credit Facility and Last Out Term Loans and extended the maturity dates of the U.S. Revolving Credit Facility to June 30, 2022, and the Last Out Term
Loans to December 30,2022.

Depending on our future financial condition and results of operations for 2021 and the first six months of 2022, the result of the continuing disruption to the U.S.
and worldwide economic, financial and credit markets caused by COVID-19, and the related measures implemented by governments, individuals and private
companies to contain the further spread of the virus, and other factors that may impact our ability to negotiate and obtain future financing, we may be unable to
refinance our A&R Credit Agreement on or prior to June 30, 2022 or at all.

As described in Note 1 and Note 25 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, on February 12, 2021, we
completed offerings of our common stock and 8.125% senior notes due 2026. The aggregate net proceeds from the offerings were approximately $283 million after
deducting underwriting discounts and commissions, but before expenses. Also, as described in Note 1 and Note 25 to the Consolidated Financial Statements
included in Part II, Item 8 of this Annual Report, we used approximately $167.1 million of the net proceeds of these offerings to repay outstanding borrowings
under our A&R Credit Agreement and we issued $35 million aggregate principal amount of our 8.125% senior notes due 2026 to B. Riley Financial, Inc., a related
party, in exchange for a deemed prepayment of $35 million outstanding under our Tranche A term loan.
Notwithstanding this reduction of the amount of borrowings outstanding under our A&R Credit Agreement, we may still be unable to refinance the remaining
borrowings under our A&R Credit Agreement and there can be no assurance that our plan to improve our financial position will be successful or that we will be
able to obtain additional capital in the future on commercially reasonable terms or at all. If we are unable to refinance our A&R Credit Facility on commercially
reasonable terms or at all, it may materially and adversely affect our reputation, liquidity, business, financial condition or results of operations and may be
necessary for us to reorganize our company in its entirety, including through bankruptcy proceedings.

We will have broad discretion in the use of the net proceeds from our recent offerings of our common stock and 8.125% senior notes due 2026.

As described in Recent Developments of Part II of this Annual Report on Form 10-K, on February 12, 2021, we closed our underwritten public offerings of
common stock and 8.125% senior notes due 2026. We intend to use the net proceeds from these offerings to repay a portion or all of the outstanding indebtedness
under our existing credit facilities, including loans outstanding under our A&R Credit Agreement. However, we retain broad discretion over the use of the net
proceeds from the offerings and, accordingly, these proceeds could be applied in ways that do not improve our results of operations, financial condition or cash
flows.

Our A&R Credit Agreement, which governs our U.S. Revolving Credit Facility and our Last Out Term Loans, restricts our operations.

The terms of our A&R Credit Agreement impose various restrictions and covenants on us that could have adverse consequences, including, but not limited to,
limiting our:
•
•
•
•
•
•
•

flexibility in planning for, or reacting to, changes in our business or economic, regulatory and industry conditions;
ability to invest in joint ventures or acquire other companies;
ability to sell assets;
ability to pay dividends to our shareholders;
ability to repurchase shares of our common stock;
ability to borrow additional funds; and
ability to issue additional letters of credit.

In addition, our A&R Credit Agreement requires us to satisfy and maintain specified financial ratios. The covenants of our A&R Credit Agreement also limited the
amount of additional contract charges that we are able to incur on specific European B&W Renewable contracts. In the past, we have been forced to request
amendments to the covenants of our previous Amended Credit Agreement, among others, and no assurance can be provided that we will be able to perform under
the covenants of our A&R Credit Agreement in the future.

Our ability to comply with the covenants, restrictions and specified financial ratios contained in our A&R 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 Annual Report. If market or other
macroeconomic conditions deteriorate, or if we experience any of the other risks discussed in this Annual Report, our ability to comply with these covenants may
be impaired. A breach of any of the covenants in our A&R Credit Agreement could result in an event of default under our A&R Credit Agreement, which would
result in our inability to access our U.S. Revolving Credit Facility for additional borrowings and letters of credit while any default exists. Upon the occurrence of
such an event of default, all amounts outstanding under our U.S. Revolving Credit Facility and our Last Out Term Loans 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 A&R 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 A&R Credit
Agreement and any future financing agreements may adversely affect our ability to finance future operations or capital needs or to engage in other business
activities.

Maintaining adequate bonding and letter of credit capacity is necessary for us to successfully complete, bid on and win various contracts.

In line with industry practice, we are often required to post standby letters of credit and surety bonds to support contractual obligations to customers as well as
other obligations. These letters of credit and bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts. If a
letter of credit or bond is required for a particular contract and we are unable to obtain it due to insufficient liquidity or other reasons, we will not be able to pursue
that contract, or we could default on contracts that are underway or that have been awarded. We utilize bonding facilities, but, as is typically the case, the issuance
of bonds under each of those facilities is at the surety's sole discretion. Moreover, due to events that affect the insurance and bonding and credit markets generally,
bonding and letters of credit may be more difficult to obtain in the future or may only be available at significant additional cost. There can be no assurance that
letters of credit or bonds from sources outside of our contractually committed U.S. Revolving Credit Facility will continue to be available to us on reasonable
terms, and the use of our U.S. Revolving Credit Facility to obtain letters of credit or bonds may reduce the borrowing capacity under our U.S. Revolving Credit
Facility. Our inability to obtain or maintain adequate letters of credit and

bonding and, as a result, to bid on new work could have a material adverse effect on our business, financial condition and results of operations. The aggregate value
of all such letters of credit and bank guarantees opened outside of the U.S. Revolving Credit Facility as of December 31, 2020 and December 31, 2019 was $84.5
million and $88.5 million, respectively. The aggregate value of the letters of credit provided by the U.S. Revolving Credit Facility backstopping letters of credit or
bank guarantees from sources outside our U.S. Revolving Credit Facility was $32.0 million as of December 31, 2020. Of the letters of credit issued under the U.S.
Revolving Credit Facility as of December 31, 2020, $34.9 million are subject to foreign currency revaluation. Amendment No. 20 to our previous Amended Credit
Agreement also provided an incremental Tranche A-5 last out term loans in the event certain customer letters of credit are drawn.

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 December 31, 2020, bonds issued and outstanding under these arrangements in support of
contracts totaled approximately $280.9 million. The aggregate value of the letters of credit provided by the U.S. Revolving Credit facility backstopping surety
bonds from sources outside our U.S. Revolving Credit Facility was $34.7 million as of December 31, 2020.

Our evaluation of strategic alternatives for certain businesses and non-core assets may not be successful.

We continue to evaluate strategic alternatives for our business lines and assets to improve the Company's capital structure. There can be no assurance that these
ongoing strategic evaluations will result in the identification or consummation of any transaction. We may incur substantial expenses associated with identifying
and evaluating potential strategic alternatives. The process of exploring strategic alternatives may be time consuming and disruptive to our business operations, and
if we are unable to effectively manage the process, our business, financial condition and results of operations could be adversely affected. We cannot assure that
any potential transaction or other strategic alternative, if identified, evaluated and consummated, will prove to be beneficial to shareholders and that the process of
identifying, evaluating and consummating any potential transaction or other strategic alternative will not adversely impact our business, financial condition or
results of operations. Any potential transaction would be dependent upon a number of factors that may be beyond our control, including, among other factors,
market conditions, industry trends, the interest of third parties in our business, the availability of financing to potential buyers on reasonable terms, and the consent
of our lenders.

In addition, while this strategic evaluation continues, we are exposed to risks and uncertainties, including potential difficulties in retaining and attracting key
employees, distraction of our management from other important business activities, and potential difficulties in establishing and maintaining relationships with
customers, suppliers, lenders, sureties and other third parties, all of which could harm our business.

Our total assets include goodwill and other indefinite-lived intangible assets. If we determine these have become impaired, our business, financial condition
and results of operations could be materially adversely affected.

Goodwill represents the excess of cost over the fair market value of net assets acquired in business combinations. Indefinite-lived intangibles are comprised of
certain trademarks and tradenames. At December 31, 2020, goodwill and other indefinite-lived intangible assets totaled $71.3 million. We review goodwill and
other intangible assets at least annually for impairment and any excess in carrying value over the estimated fair value is charged to the Consolidated Statement of
Operations. Future impairment may result from, among other things, deterioration in the performance of an acquired business or product line, adverse market
conditions and changes in the competitive landscape, adverse changes in applicable laws or regulations, including changes that restrict the activities of an acquired
business or product line, and a variety of other circumstances. If the value of our business were 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.

We are exposed to credit risk and may incur losses as a result of such exposure.

We conduct our business by obtaining orders that generate cash flows in the form of advances, contract progress payments and final balances in accordance with
the underlying contractual terms. We are thus exposed to potential losses resulting from contractual counterparties' failure to meet their obligations. As a result, the
failure by customers to meet their payment obligations, or a mere delay in making those payments, could reduce our liquidity and increase the need to resort to
other sources of financing, with possible adverse effects on our business, financial condition, results of operations and cash flows. In some cases, we have joint and
several liability with consortium partners in our projects, such as the renewable energy

plants in the United Kingdom, and we may be subject to additional losses if our partners are unable to meet their contractual obligations. For example, in the case
of the fifth European B&W Renewable loss contract, our civil construction partner for this project entered into administration in February 2018 (similar to filing
for bankruptcy in the U.S.), and we were required to assume its scope of work.

In addition, the deterioration of macroeconomic conditions or negative trends in the global credit markets could have a negative impact on relationships with
customers and our ability to collect on trade receivables, with possible adverse effects on our business, financial condition, results of operations and cash flows.

Interest rates on certain of our outstanding indebtedness are tied to LIBOR and may be subject to change.

LIBOR and certain other “benchmarks” are the subject of recent national, international, and other regulatory guidance and proposals for reform. These reforms may
cause such benchmarks to perform differently than in the past or have other consequences which cannot be predicted. In particular, on July 27, 2017, the United
Kingdom’s Financial Conduct Authority, which regulates LIBOR, publicly announced that it intends to stop persuading or compelling banks to submit LIBOR
rates after 2021. It is unclear whether, at that time, LIBOR will cease to exist or if new methods of calculating LIBOR will be established. As of December 31,
2020, approximately $145 million of our outstanding indebtedness had interest rate payments determined based directly or indirectly on LIBOR, including our
outstanding indebtedness under our A&R Credit Agreement. If there is uncertainty as to whether LIBOR will continue to be quoted, if LIBOR ceases to exist or if
the methods of calculating LIBOR change from current methods for any reason, the interest rates on this indebtedness may increase substantially from those we
have previously experienced. Further, our A&R Credit Agreement contains provisions establishing alternative methods for calculating the interest rate on our
indebtedness if LIBOR is no longer available. Any such alternative calculation methods could increase the interest expense we have historically realized on our
indebtedness or realize on future indebtedness under our A&R Credit Agreement.

Risks Related to Intellectual Property and Information Security

A disruption in, or failure of our information technology systems, including those related to cybersecurity, could adversely affect our business operations and
financial performance.

We rely on information technology networks and systems, including the Internet, to process, transmit and store electronic sensitive and confidential information, to
manage and support a variety of business processes and activities and to comply with regulatory, legal and tax requirements. While we maintain some of our
critical information technology systems, we are also dependent on third parties to provide important information technology services relating to, among other
things, human resources, electronic communications and certain finance functions.

We face various threats to our information technology networks and systems, including cyber threats, threats to the physical security of our facilities and
infrastructure from natural or man-made incidents or disasters, and threats from terrorist acts, as well as the potential for business disruptions associated with these
threats. We have been, and will likely continue to be, subject to cyber-based attacks and other attempts to threaten our information technology systems and the
software we sell. A cyber-based attack could include attempts to gain unauthorized access to our proprietary information and attacks from malicious third parties
using sophisticated, targeted methods to circumvent firewalls, encryption and other security defenses, including hacking, fraud, phishing scams or other forms of
deception. Although we utilize a combination of tailored and industry standard security measures and technology to monitor and mitigate these threats, we cannot
guarantee that these measures and technology will be sufficient to prevent current and future threats to our information technology networks and systems from
materializing. Furthermore, we may have little or no oversight with respect to security measures employed by third-party service providers, which may ultimately
prove to be ineffective at countering threats.

If these systems are damaged, intruded upon, attacked, shutdown or cease to function properly, whether by planned upgrades, force majeure, telecommunication
failures, hardware or software beak-ins or viruses, or other cybersecurity incidents and our business continuity plans do not resolve the issues in a timely manner,
the services we provide to customers, the value of our investment in research and development efforts and other intellectual property, our product sales, our ability
to comply with regulations related to information contained on our information technology networks and systems, our financial condition, results of operations and
stock price may be materially and adversely affected, and we could experience delays in reporting our financial results. In addition, there is a risk of business
interruption, litigation with third parties, reputational damage from leakage of confidential information or the software we sell being compromised, and increased
cybersecurity protection and

remediation costs due to the increasing sophistication and proliferation of threats. The costs related to cyber or other security threats or disruptions may not be fully
insured or indemnified by other means.

To address risks to our information technology systems, we continue to invest in our systems and training of company personnel. As required, we replace and/or
upgrade financial, human resources and other information technology systems. These activities subject us to inherent costs and risks associated with replacing and
updating these systems, including potential disruption of our internal control structure, substantial capital expenditures, demands on management time and other
risks of delays or difficulties in transitioning to new systems or of integrating new systems into our current systems. Our systems implementations and upgrades
may not result in productivity improvements at the levels anticipated, or at all. In addition, the implementation of new technology systems may cause disruptions in
our business operations. Such disruption and any other information technology system disruptions, and our ability to mitigate those disruptions, if not anticipated
and appropriately mitigated, could have a material adverse effect on our financial condition, results of operations and stock price.

Privacy and information security laws are complex, and if we fail to comply with applicable laws, regulations and standards, or if we fail to properly maintain
the integrity of our data, protect our proprietary rights to our systems or defend against cybersecurity attacks, we may be subject to government or private
actions due to privacy and security breaches, any of which could have a material adverse effect on our business, financial condition and results of operations
or materially harm our reputation.

We are subject to a variety of laws and regulations in the United States and other countries that involve matters central to our business, including user privacy,
security, rights of publicity, data protection, content, intellectual property, distribution, electronic contracts and other communications, competition, protection of
minors, consumer protection, taxation, and online-payment services. These laws can be particularly restrictive in countries outside the United States. Both in the
United States and abroad, these laws and regulations constantly evolve and remain subject to significant change. In addition, the application and interpretation of
these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which we operate. Because we store, process, and use data,
some of which contains personal information, we are subject to complex and evolving federal, state, and foreign laws and regulations regarding privacy, data
protection, content, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in investigations,
claims, changes to our business practices, increased cost of operations, and declines in user growth, retention, or engagement, any of which could seriously harm
our business.

Several proposals have been adopted or are currently pending before federal, state, and foreign legislative and regulatory bodies that could significantly affect our
business. The General Data Protection Regulation, or GDPR, in the European Union, which went into effect on May 25, 2018, placed new data protection
obligations and restrictions on organizations and may require us to further change our policies and procedures. If we are not compliant with GDPR requirements,
we may be subject to significant fines and our business may be seriously harmed. In addition, the California Consumer Privacy Act went into effect in January
2020, with a lookback to January 2019, and placed additional requirements on the handling of personal data.

We rely on intellectual property law and confidentiality agreements to protect our intellectual property. We also rely on intellectual property we license from
third parties. Our failure to protect our intellectual property rights, or our inability to obtain or renew licenses to use intellectual property of third parties, could
adversely affect our business.

Our success depends, in part, on our ability to protect our proprietary information and other intellectual property. Our intellectual property could be stolen,
challenged, invalidated, circumvented or rendered unenforceable. In addition, effective intellectual property protection may be limited or unavailable in some
foreign countries where we operate.

Our failure to protect our intellectual property rights may result in the loss of valuable technologies or adversely affect our competitive business position. We rely
significantly on proprietary technology, information, processes and know-how that are not subject to patent or copyright protection. We seek to protect this
information through trade secret or confidentiality agreements with our employees, consultants, subcontractors or other parties, as well as through other security
measures. These agreements and security measures may be inadequate to deter or prevent misappropriation of our confidential information. In the event of an
infringement of our intellectual property rights, a breach of a confidentiality agreement or divulgence of proprietary information, we may not have adequate legal
remedies to protect our intellectual property. Litigation to determine the scope of intellectual property rights, even if ultimately successful, could be costly and
could divert management's attention away from other aspects of our business. In addition, our trade secrets may otherwise become known or be independently
developed by competitors.

In some instances, we have augmented our technology base by licensing the proprietary intellectual property of third parties. In the future, we may not be able to
obtain necessary licenses on commercially reasonable terms, which could have a material adverse effect on our operations.

Risks Related to Government Regulation

We are subject to government regulations that may adversely affect our future operations.

Many aspects of our operations and properties are affected by political developments and are subject to both domestic and foreign governmental regulations,
including those relating to:

•
•
•
•
•
•
•
•

constructing and manufacturing power generation products;
currency conversions and repatriation;
clean air and other environmental protection legislation;
taxation of foreign earnings;
tariffs, duties, or trade sanctions and other trade barriers imposed by foreign countries that restrict or prohibit business transactions in certain markets;
changes in applicable laws or policies;
transactions in or with foreign countries or officials; and
use of local employees and suppliers.

In addition, a substantial portion of the demand for our products and services is from electric power generating companies and other steam-using customers. The
demand for power generation products and services can be influenced by governmental legislation setting requirements for utilities related to operations, emissions
and environmental impacts. The legislative process is unpredictable and includes a platform that continuously seeks to increase the restrictions on power producers.
Potential legislation limiting emissions from power plants, including carbon dioxide, could affect our markets and the demand for our products and services related
to power generation.

We cannot determine the extent to which our future operations and earnings may be affected by new legislation, new regulations or changes in existing regulations.

Our business and our customers' businesses are required to obtain, and to comply with, national, state and local government permits and approvals.

Our business and our customers' businesses are required to obtain, and to comply with, national, state and local government permits and approvals. Any of these
permits or approvals may be subject to denial, revocation or modification under various circumstances. Failure to obtain or comply with the conditions of permits
or approvals may adversely affect our operations by temporarily suspending our activities or curtailing our work and may subject us to penalties and other
sanctions. Although existing licenses are routinely renewed by various regulators, renewal could be denied or jeopardized by various factors, including, but not
limited to:
•
•
•
•

failure to comply with environmental and safety laws and regulations or permit conditions;
local community, political or other opposition;
executive action; and
legislative action.

In addition, if new environmental legislation or regulations are enacted or implemented, or existing laws or regulations are amended or are interpreted or enforced
differently, we or our customers may be required to obtain additional operating permits or approvals. Our inability or our customers' inability to obtain, and to
comply with, the permits and approvals required for our business could have a material adverse effect on us.

Risks Related to Environmental Regulation

Our operations are subject to various environmental laws and legislation that may become more stringent in the future.

Our operations and properties are subject to a wide variety of increasingly complex and stringent foreign, federal, state and local environmental laws and
regulations, including those governing discharges into the air and water, the handling and disposal of solid and hazardous wastes, the remediation of soil and
groundwater contaminated by hazardous substances and

the health and safety of employees. Sanctions for noncompliance may include revocation of permits, corrective action orders, administrative or civil penalties and
criminal prosecution. Some environmental laws provide for strict, joint and several liability for remediation of spills and other releases of hazardous substances, as
well as damage to natural resources. In addition, companies may be subject to claims alleging personal injury or property damage as a result of alleged exposure to
hazardous substances. Such laws and regulations may also expose us to liability for the conduct of or conditions caused by others or for our acts that were in
compliance with all applicable laws at the time such acts were performed.

We cannot predict all of the environmental requirements or circumstances that will exist in the future but anticipate that environmental control and protection
standards will become increasingly stringent and costly. Based on our experience to date, we do not currently anticipate any material adverse effect on our business
or financial condition as a result of future compliance with existing environmental laws and regulations. However, future events, such as changes in existing laws
and regulations or their interpretation, more vigorous enforcement policies of regulatory agencies or stricter or different interpretations of existing laws and
regulations, may require additional expenditures by us, which may be material. Accordingly, we can provide no assurance that we will not incur significant
environmental compliance costs in the future.

Our operations involve the handling, transportation and disposal of hazardous materials, and environmental laws and regulations and civil liability for
contamination of the environment or related personal injuries may result in increases in our operating costs and capital expenditures and decreases in our
earnings and cash flows.

Our operations involve the handling, transportation and disposal of hazardous materials. Failure to properly handle these materials could pose a health risk to
humans or wildlife and could cause personal injury and property damage (including environmental contamination). If an accident were to occur, its severity could
be significantly affected by the volume of the materials and the speed of corrective action taken by emergency response personnel, as well as other factors beyond
our control, such as weather and wind conditions. Actions taken in response to an accident could result in significant costs.

Governmental requirements relating to the protection of the environment, including solid waste management, air quality, water quality and cleanup of
contaminated sites, have in the past had a substantial impact on our operations. These requirements are complex and subject to frequent change. In some cases, they
can impose liability for the entire cost of cleanup on any responsible party without regard to negligence or fault and impose liability on us for the conduct of others
or conditions others have caused, or for our acts that complied with all applicable requirements when we performed them. Our compliance with amended, new or
more stringent requirements, stricter interpretations of existing requirements or the future discovery of contamination may require us to make material expenditures
or subject us to liabilities that we currently do not anticipate. Such expenditures and liabilities may adversely affect our business, financial condition, results of
operations and cash flows. In addition, some of our operations and the operations of predecessor owners of some of our properties have exposed us to civil claims
by third parties for liability resulting from alleged contamination of the environment or personal injuries caused by releases of hazardous substances into the
environment.

In our contracts, we seek to protect ourselves from liability associated with accidents, but there can be no assurance that such contractual limitations on liability
will be effective in all cases or that our or our customers' insurance will cover all the liabilities we have assumed under those contracts. The costs of defending
against a claim arising out of a contamination incident or precautionary evacuation, and any damages awarded as a result of such a claim, could adversely affect
our results of operations and financial condition.

We maintain insurance coverage as part of our overall risk management strategy and due to requirements to maintain specific coverage in our financing agreements
and in many of our contracts. These policies do not protect us against all liabilities associated with accidents or for unrelated claims. In addition, comparable
insurance may not continue to be available to us in the future at acceptable prices, or at all.

Risks Related to Our International Operations

We could be adversely affected by violations of the United States Foreign Corrupt Practices Act, the UK Anti-Bribery Act or other anti-bribery laws.

The United States Foreign Corrupt Practices Act (the “FCPA”) generally prohibits companies and their intermediaries from making improper payments to non-
United States government officials. Our training program, audit process and policies mandate compliance with the FCPA, the UK Anti-Bribery Act (the “UK Act”)
and other anti-bribery laws. We operate in some parts of the world that have experienced governmental corruption to some degree, and, in some circumstances,
strict

compliance with anti-bribery laws may conflict with local customs and practices. If we are found to be liable for violations of the FCPA, the UK Act or other anti-
bribery laws (either due to our own acts or our inadvertence, or due to the acts or inadvertence of others, including agents, promoters or employees of our joint
ventures), we could suffer from civil and criminal penalties or other sanctions.

Our international operations are subject to political, economic and other uncertainties not generally encountered in our domestic operations.

We derive a substantial portion of our revenues from international operations, and we intend to continue to expand our international presence and customer base as
part of our growth strategy. Our revenues from sales to customers located outside of the United States represented approximately 45% and 46% of total revenues
for the years ended December 31, 2020 and 2019, respectively. Operating in international markets requires significant resources and management attention and
subjects us to political, economic and regulatory risks that are not generally encountered in our United States operations. These include, but are not limited to:

•
•
•
•
•
•
•

risks of war, terrorism and civil unrest;
expropriation, confiscation or nationalization of our assets;
renegotiation or nullification of our existing contracts;
changing political conditions and changing laws and policies affecting trade and investment;
overlap of different tax structures;
risk of changes in foreign currency exchange rates; and
tariffs, price controls and trade agreements and disputes.

Various foreign jurisdictions have laws limiting the right and ability of foreign subsidiaries and joint ventures to pay dividends and remit earnings to affiliated
companies. Our international operations sometimes face the additional risks of fluctuating currency values, hard currency shortages and controls of foreign
currency exchange. If we continue to expand our business globally, our success will depend, in part, on our ability to anticipate and effectively manage these and
other risks. These and other factors may have a material impact on our international operations or our business as a whole.

International uncertainties and fluctuations in the value of foreign currencies could harm our profitability.

We have international operations primarily in Europe, Canada, Mexico and China. For the year ended December 31, 2020, international operations accounted for
approximately 45% of our total revenues. Our significant international subsidiaries may have sales and cost of sales in different currencies as well as other
transactions that are denominated in currencies other than their functional currency. We do not currently engage in currency hedging activities to limit the risks of
currency fluctuations. Consequently, fluctuations in foreign currencies could have a negative impact on the profitability of our global operations, which would
harm our financial results and cash flows.

Risks Related to Ownership of Our Common Stock

The market price and trading volume of our common stock may be volatile.

The market price of our common stock could fluctuate significantly in future periods due to a number of factors, many of which are beyond our control, including,
but not limited to:

•
•

•
•
•
•
•
•
•
•
•
•

fluctuations in our quarterly or annual earnings or those of other companies in our industry;
failures of our operating results to meet the estimates of securities analysts or the expectations of our shareholders or changes by securities analysts in
their estimates of our future earnings;
announcements by us or our customers, suppliers or competitors;
the depth and liquidity of the market for our common stock;
changes in laws or regulations that adversely affect our industry or us;
changes in accounting standards, policies, guidance, interpretations or principles;
general economic, industry and stock market conditions;
future sales of our common stock by our shareholders;
the concentration of ownership of our common stock;
future issuances of our common stock by us;
our ability to pay dividends in the future; and
the other risk factors set forth under Part I, Item 1A and other parts of this Annual Report.

Substantial sales, or the perception of sales, of our common stock by us or certain of our existing shareholders could cause our stock price to decline and
future issuances may dilute our common shareholders' ownership in the Company.

Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of
our common stock and could impair our ability to raise capital through the sale of additional equity securities. As of December 31, 2020, we had an aggregate of
approximately 54.5 million shares of common stock outstanding, approximately 27.3 million shares of which were held by B. Riley and Vintage Capital
Management, LLC (“Vintage”), not including approximately 1.7 million shares of our common stock issuable upon exercise of the warrants held by B. Riley. We
entered into a registration rights agreement with B. Riley and Vintage on April 30, 2019, pursuant to which B. Riley and Vintage have customary demand and
piggyback registration rights for all shares of our common stock they beneficially own. We filed a resale shelf registration statement on behalf of the shareholders
party to the registration rights agreement permitting the resale of approximately 25.6 million shares of our common stock that were issued to B. Riley, Vintage and
the other shareholders party thereto. We are also required to register for resale any additional shares of our common stock that B. Riley and Vintage may acquire in
the future, including as part of any refinancing of our A&R Credit Agreement.

Any sales of substantial amounts of our common stock, or the perception that these sales might occur, could lower the market price of our common stock and
impede our ability to raise capital through the issuance of equity securities. Any sales, or perception of sales, by our existing shareholders could also impact the
perception of shareholder support for us. which could in turn negatively affect our customer and supplier relationships. Further, if we were to issue additional
equity securities (or securities convertible into or exchangeable or exercisable for equity securities) to raise additional capital, our shareholders' ownership interests
in the Company will be diluted and the value of our common stock may be reduced.

B. Riley and Vintage each have significant influence over us.

As of December 31, 2020 B. Riley and Vintage together control approximately 52.2% of the voting power represented by our common stock. Each of B. Riley and
Vintage have the right to nominate three members of our board of directors pursuant to the investor rights agreement we entered into with them on April 30, 2019,
The investor rights agreement also provides pre-emptive rights to B. Riley with respect to certain future issuances of our equity securities. The services of our
Chief Executive Officer are provided to us by B. Riley pursuant to a consulting agreement, and B. Riley currently holds all of our outstanding Last Out Term Loans
issued under our A&R Credit Agreement. If either B. Riley participate as investors in the refinancing of our A&R Credit Agreement, their respective ownership of
our common stock, debt or other securities may further increase. As a result of these arrangements, each of B. Riley and Vintage have significant influence over
our management and policies and over all matters requiring shareholder approval, including the election of directors, amendment of our certificate of incorporation
and approval of significant corporate transactions. Further, if B. Riley and Vintage were to act together on any matter presented for shareholder approval, they
would have the ability to control the outcome of that matter. Each of B. Riley and Vintage can take actions that have the effect of delaying or preventing a change
of control of us or discouraging others from making tender offers for our shares, which could prevent shareholders from receiving a premium for their shares.
These actions may be taken even if other shareholders oppose them. In addition, the concentration of voting power with B. Riley and Vintage may have an adverse
effect on the price of our common stock, and the interests of either B. Riley or Vintage may not be consistent with the interests of our other shareholders.

We are a "smaller reporting company" and, as a result of the scaled disclosure requirements applicable to us, our common stock may be less attractive to
investors. Depending on our public float on June 30, 2021, we may cease to qualify as a smaller reporting company and may become an “accelerated filer or
“large accelerated filer”, which could increase our disclosure and compliance requirements.

We are currently a "smaller reporting company" as defined under Exchange Act. As a smaller reporting company, we are subject to scaled disclosure requirements
in our periodic reports and proxy statements, including around executive compensation arrangements. We intend to take advantage of certain of the scaled
disclosure requirements available for smaller reporting companies, and we may continue to take advantage of these or additional scaled disclosure requirements
until we no longer qualify as a smaller reporting company. As a result, the information we provide to investors may be different than that provided by other public
companies. We cannot predict whether investors will find our common stock less attractive as a result of our taking advantage of these scaled disclosure
requirements. If investors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our
stock price may decline or may be more volatile.

Depending on our public float as of June 30, 2021, we may cease to qualify as a smaller reporting company and become an “accelerated filer” or “large accelerated
filer” as defined in the Exchange Act as of December 31, 2021. If we cease to qualify as a smaller reporting company as of June 30, 2021, we would not be
required to reflect the change in our smaller reporting company status, and comply with the associated increased disclosure obligations until our first quarterly
report in our next fiscal year (i.e., the quarterly report for the three-month period ended March 31, 2022).

If we do not qualify as a smaller reporting company and become an accelerated filer or large accelerated filer, we will become subject to certain disclosure and
compliance requirements that apply to other public companies but did not previously apply to us. These requirements include, but are not limited to, the
requirement that our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404(b)
of the Sarbanes-Oxley Act of 2002, compliance with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding
mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements, the requirement
that we provide full and more detailed disclosures regarding executive compensation, the requirement that we hold a non-binding advisory vote on executive
compensation and obtain stockholder approval of any golden parachute payments not previously approved, and reduction in the amount of time for filing our
periodic and annual reports.

We expect that compliance with the additional disclosure and compliance requirements would increase our legal and financial compliance costs and could cause
management and other personnel to divert attention from operational and other business matters to devote time to public company reporting requirements. In
addition, if we are not able to comply with changing requirements in a timely manner, the market price of our stock could decline and we could be subject to
sanctions or investigations by the stock exchange on which our common stock is listed, the SEC, or other regulatory authorities, which would require additional
financial and management resources.

We do not currently pay regular dividends on our common stock, so holders of our common stock may not receive funds without selling their shares of our
common stock.

We have no current intent to pay a regular dividend, and dividend payments are restricted by our lending agreements. Our board of directors will determine the
payment of future dividends on our common stock, if any, and the amount of any dividends in light of applicable law, contractual restrictions limiting our ability to
pay dividends, our earnings and cash flows, our capital requirements, our financial condition, and other factors our board of directors deems relevant. Accordingly,
our shareholders may have to sell some or all of their shares of our common stock in order to generate cash flow from their investment.

Provisions in our corporate documents and Delaware law could delay or prevent a change in control of the Company, even if that change may be considered
beneficial by some shareholders.

The existence of some provisions of our certificate of incorporation and bylaws and Delaware law could discourage, delay or prevent a change in control of the
Company that a shareholder may consider favorable.

In addition, we are subject to Section 203 of the Delaware General Corporation Law, which may have an anti-takeover effect with respect to transactions not
approved in advance by our board of directors, including discouraging takeover attempts that might result in a premium over the market price for shares of our
common stock.

We believe these provisions protect our shareholders from coercive or otherwise unfair takeover tactics by requiring potential acquirors to negotiate with our board
of directors and by providing our board of directors with more time to assess any acquisition proposal and are not intended to make the Company immune from
takeovers. However, these provisions apply even if the offer may be considered beneficial by some shareholders and could delay or prevent an acquisition that our
board of directors determines is in the best interests of the Company and our shareholders.

We may issue preferred stock that could dilute the voting power or reduce the value of our common stock.

Our certificate of incorporation authorizes us to issue, without the approval of our shareholders, one or more classes or series of preferred stock having such
designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends
and distributions, as our board of directors generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or
reduce the value of our common stock. For example, we could grant holders of preferred stock the right to elect some number of our directors in

all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation
preferences we could assign to holders of preferred stock could affect the residual value of the common stock.

Risks Relating to our 2015 Spin-Off from our Former Parent

We are subject to continuing contingent liabilities of BWXT following the spin-off.

We completed a spin-off from The Babcock & Wilcox Company (now known as BWX Technologies, Inc., or “BWXT”), on June 30, 2015 to become a separate
publicly traded company, and BWXT did not retain any ownership interest in the Company. As a result of the spin-off, there are several significant areas where the
liabilities of BWXT may become our obligations. For example, under the Internal Revenue Code ("Code") and the related rules and regulations, each corporation
that was a member of BWXT consolidated tax reporting group during any taxable period or portion of any taxable period ending on or before the completion of the
spin-off is jointly and severally liable for the federal income tax liability of the entire consolidated tax reporting group for that taxable period. We entered into a tax
sharing agreement with BWXT in connection with the spin-off that allocates the responsibility for prior period taxes of BWXT consolidated tax reporting group
between us and BWXT and its subsidiaries. However, if BWXT were unable to pay, we could be required to pay the entire amount of such taxes. Other provisions
of law establish similar liability for other matters, including laws governing tax-qualified pension plans as well as other contingent liabilities. The other contingent
liabilities include personal injury claims or environmental liabilities related to BWXT's historical nuclear operations. For example, BWXT has agreed to indemnify
us for personal injury claims and environmental liabilities associated with radioactive materials related to the operation, remediation, and/or decommissioning of
two former nuclear fuel processing facilities located in the Borough of Apollo and Parks Township, Pennsylvania. To the extent insurance providers and third-party
indemnitors do not cover those liabilities, and BWXT was unable to pay, we could be required to pay for them.

The spin-off could result in substantial tax liability.

The spin-off was conditioned on BWXT's receipt of an opinion of counsel, in form and substance satisfactory to BWXT, substantially to the effect that, for United
States federal income tax purposes, the spin-off qualifies under Section 355 of the Code, and certain transactions related to the spin-off qualify under Sections 355
and/or 368 of the Code. The opinion relied on, among other things, various assumptions and representations as to factual matters made by BWXT and us which, if
inaccurate or incomplete in any material respect, would jeopardize the conclusions reached by such counsel in its opinion. The opinion is not binding on the IRS or
the courts, and there can be no assurance that the IRS or the courts will not challenge the conclusions stated in the opinion or that any such challenge would not
prevail.

We are not aware of any facts or circumstances that would cause the assumptions or representations that were relied on in the opinion to be inaccurate or
incomplete in any material respect. If, notwithstanding receipt of the opinion, the spin-off was determined not to qualify under Section 355 of the Code, each
United States holder of BWXT common stock who received shares of our common stock in the spin-off would generally be treated as receiving a taxable
distribution of property in an amount equal to the fair market value of the shares of our common stock received. In addition, if certain related preparatory
transactions were to fail to qualify for tax-free treatment, they would be treated as taxable asset sales and/or distributions.

Under the terms of the tax sharing agreement we entered into in connection with the spin-off, we are generally responsible for all taxes attributable to us or any of
our subsidiaries, whether accruing before, on or after the date of the spin-off. We and BWXT generally share responsibility for all taxes imposed on us or BWXT
and its subsidiaries in the event the spin-off and/or certain related preparatory transactions were to fail to qualify for tax-free treatment. However, if the spin-off
and/or certain related preparatory transactions were to fail to qualify for tax-free treatment because of actions or failures to act by us or BWXT, we or BWXT,
respectively would be responsible for all such taxes. Our liabilities under the tax sharing agreement could have a material adverse effect on us. At this time, we
cannot precisely quantify the amount of liabilities we may have under the tax sharing agreement and there can be no assurances as to their final amounts.

Under some circumstances, we could be liable for any resulting adverse tax consequences from engaging in certain significant strategic or capital raising
transactions.

Even if the spin-off otherwise qualifies as a tax-free distribution under Section 355 of the Code, the spin-off and certain related transactions may result in
significant United States federal income tax liabilities to us under Section 355(e) and other applicable provisions of the Code if 50% or more of BWXT's stock or
our stock (in each case, by vote or value) is treated as

having been acquired, directly or indirectly, by one or more persons as part of a plan (or series of related transactions) that includes the spin-off. The process for
determining whether an acquisition triggering those provisions has occurred is complex, inherently factual and subject to interpretation of the facts and
circumstances of a particular case.

Under the terms of the tax sharing agreement we entered into in connection with the spin-off, BWXT generally is liable for any such tax liabilities. However, we
are required to indemnify BWXT against any such tax liabilities that result from actions taken or failures to act by us. As a result of these rules and contractual
provisions, we may be unable to engage in certain strategic or capital raising transactions that our shareholders might consider favorable, or to structure potential
transactions in the manner most favorable to us, without certain adverse tax consequences.

Potential indemnification liabilities to BWXT pursuant to the master separation agreement could materially adversely affect the Company.

The master separation agreement with BWXT provides for, among other things, the principal corporate transactions required to effect the spin-off, certain
conditions to the spin-off and provisions governing the relationship between us and BWXT with respect to and resulting from the spin-off. Among other things, the
master separation agreement provides for indemnification obligations designed to make us financially responsible for substantially all liabilities that may exist
relating to our business activities, whether incurred prior to or after the spin-off, as well as those obligations of BWXT assumed by us pursuant to the master
separation agreement. If we are required to indemnify BWXT under the circumstances set forth in the master separation agreement, we may be subject to
substantial liabilities.

In connection with our separation from BWXT, BWXT has agreed to indemnify us for certain liabilities. However, there can be no assurance that the
indemnity will be sufficient to insure us against the full amount of such liabilities, or that BWXT's ability to satisfy its indemnification obligation will not be
impaired in the future.

Pursuant to the master separation agreement, BWXT has agreed to indemnify us for certain liabilities. However, third parties could seek to hold us responsible for
any of the liabilities that BWXT agreed to retain, and there can be no assurance that the indemnity from BWXT will be sufficient to protect us against the full
amount of such liabilities, or that BWXT will be able to fully satisfy its indemnification obligations. Moreover, even if we ultimately succeed in recovering from
BWXT any amounts for which we are held liable, we may be temporarily required to bear these losses.

General Risk Factors

Our reported financial results may be adversely affected by new accounting pronouncements or changes in existing accounting standards and practices, which
could result in volatility in our results of operations.

We prepare our financial statements in conformity with accounting principles generally accepted in the U.S. These accounting principles are subject to
interpretation or changes by the FASB and the SEC. New accounting pronouncements and varying interpretations of accounting standards and practices have
occurred in the past and are expected to occur in the future. New accounting pronouncements or a change in the interpretation of existing accounting standards or
practices may have a significant effect on our reported financial results and may even affect our reporting of transactions completed before the change is announced
or effective.

Any difficulties in adopting or implementing any new accounting standard could result in our failure to meet our financial reporting obligations, which could result
in regulatory discipline and harm investors’ confidence in us. Finally, if we were to change our critical accounting estimates, our operating results could be
significantly affected.

We could be subject to changes in tax rates or tax law, adoption of new regulations, changing interpretations of existing law or exposure to additional tax
liabilities in excess of accrued amounts that could adversely affect our financial position.

We are subject to income taxes in the United States and numerous foreign jurisdictions. A change in tax laws, treaties or regulations, or in their interpretation, in
any country in which we operate could result in a higher tax rate on our earnings, which could have a material impact on our earnings and cash flows from
operations. Tax reform legislation enacted in December of 2017 has made substantial changes to United States tax law, including a reduction in the corporate tax
rate, a limitation on deductibility of interest expense, a limitation on the use of net operating losses to offset future taxable income, the allowance of immediate
expensing of capital expenditures and the transition of U.S. international taxation from a worldwide tax system to a more generally territorial system, and a one-
time transition tax on the mandatory deemed

repatriation of foreign earnings. Generally, future changes in applicable U.S. or foreign tax laws and regulations, or their interpretation and application could have
an adverse effect on our business, financial conditions and results of operations.

Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions and
calculations where the ultimate tax determination is uncertain, and we are regularly subject to audit by tax authorities. Although we believe that our tax estimates
and tax positions are reasonable, they could be materially affected by many factors including the final outcome of tax audits and related litigation, the introduction
of new tax accounting standards, legislation, regulations and related interpretations, our global mix of earnings, the ability to realize deferred tax assets and changes
in uncertain tax positions. A significant increase in our tax rate could have a material adverse effect on our profitability and liquidity.

Our ability to use net operating losses (“NOLs”) and certain tax credits to reduce future tax payments could be further limited if we experience an additional
“ownership change”.

Some or all of the Company's deferred tax assets, consisting primarily of NOLs and interest carryforwards that are not currently deductible for tax purposes, could
expire unused if we are unable to generate sufficient taxable income in the future to take advantage of them or if we enter into transactions that limit our right to
use them, which includes transactions that result in an “ownership change” under Section 382 of the Code.

Sections 382 and 383 of the Code limits for U.S. federal income tax purposes, the annual use of NOL carryforwards (including previously disallowed interest
carryforwards) and tax credit carryforwards, respectively, following an ownership change. Under Section 382 of the Code, a company has undergone an ownership
change if shareholders owning at least 5% of the company have increased their collective holdings by more than 50% during the prior three-year period. Based on
information that is publicly available, the Company determined that a Section 382 ownership change occurred on July 23, 2019 as a result of the Equitization
Transactions. If the Company experiences subsequent ownership changes, certain NOL carryforwards (including previously disallowed interest carryforwards) may
be subject to more than one section 382 limitation.

The loss of the services of one or more of our key personnel, or our failure to attract, recruit, motivate, and retain qualified personnel in the future, could
disrupt our business and harm our results of operations.

We depend on the skills, working relationships, and continued services of key personnel, including our management team and others throughout our organization.
We are also dependent on our ability to attract and retain qualified personnel, for whom we compete with other companies both inside and outside our industry.
Our business, financial condition or results of operations may be adversely impacted by the unexpected loss of any of our management team or other key personnel,
or more generally if we fail to attract, recruit, motivate and retain qualified personnel.

Negotiations with labor unions and possible work stoppages and other labor problems could divert management's attention and disrupt operations. In addition,
new collective bargaining agreements or amendments to existing agreements could increase our labor costs and operating expenses.

A significant number of our employees are members of labor unions. If we are unable to negotiate acceptable new contracts with our unions from time to time, we
could experience strikes or other work stoppages by the affected employees. If any such strikes, protests or other work stoppages were to occur, we could
experience a significant disruption of operations. In addition, negotiations with unions could divert management's attention. New union contracts could result in
increased operating costs, as a result of higher wages or benefit expenses, for both union and nonunion employees. If nonunion employees were to unionize, we
could experience higher ongoing labor costs.

Pension and medical expenses associated with our retirement benefit plans may fluctuate significantly depending on a number of factors, and we may be
required to contribute cash to meet underfunded pension obligations.

A substantial portion of our current and retired employee population is covered by pension and postretirement benefit plans, the costs and funding requirements of
which 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 mark to market 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.

As of December 31, 2020, our defined benefit pension and postretirement benefit plans were underfunded by approximately $248.2 million. In addition, certain of
these postretirement benefit plans were collectively bargained, and our ability to curtail or change the benefits provided may be impacted by contractual provisions
set forth in the relevant union agreements and other plan documents. We also participate in various multi-employer pension plans in the United States and Canada
under union and industry agreements that generally provide defined benefits to employees covered by collective bargaining agreements. Absent an applicable
exemption, a contributor to a United States multi-employer plan is liable, upon termination or withdrawal from a plan, for its proportionate share of the plan's
underfunded vested liability. Funding requirements for benefit obligations of these multi-employer pension plans are subject to certain regulatory requirements, and
we may be required to make cash contributions which may be material to one or more of these plans to satisfy certain underfunded benefit obligations. See Note 13
to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for additional information regarding our pension and postretirement
benefit plan obligations.

Natural disasters or other events beyond our control, such as war, armed conflicts or terrorist attacks could adversely affect our business.

Matters outside of our control could adversely affect demand for or supply of our products or disrupt our facilities, systems or projects, which could interrupt
operational processes and performance on our contracts and adversely impact our ability to manufacture our products and provide services and support to our
customers. Insurance for such matters may be unavailable or insufficient. Such matters could include natural disasters, such as earthquakes, tsunamis, hurricanes,
floods, tornadoes, war, armed conflicts, or terrorist attacks, among others. We operate facilities in areas of the world that are exposed to such risks, which could be
general in nature or targeted at us or our markets.

Item 1B. Unresolved Staff Comments

None

Item 2. Properties

The following table provides the primary segment, location and general use of each of our principal properties that we own or lease at December 31,2020.

Business Segment and Location

Principal Use

Owned/Leased
(Lease Expiration)

B&W Renewable segment

Copenhagen, Denmark
Esbjerg, Denmark
B&W Environmental segment

Administrative office
Manufacturing facility / administrative office

Paruzzaro Italy
Ding Xiang, Xin Zhou, Shan Xi, China

Administrative offices
Manufacturing facility

B&W Thermal segment
Akron, Ohio
Lancaster, Ohio
Copley, Ohio
Dumbarton, Scotland
Guadalupe, NL, Mexico
Cambridge, Ontario, Canada
Jingshan, Hubei, China

Administrative offices
Manufacturing facility
Warehouse / service center
Manufacturing facility
Manufacturing facility
Administrative office / warehouse
Manufacturing facility

(1)

These properties are encumbered by liens under existing credit facilities.

Leased (2021)
Owned

Leased (2024)
Leased (2023)

(1)

Leased (2034)
(1)
Owned
Owned
Owned
Leased (2024)
Leased (2024)
Owned

We believe that our major properties are adequate for our present needs and, as supplemented by planned improvements and construction, expect them to remain
adequate for the foreseeable future.

Item 3. Legal Proceedings

For information regarding ongoing investigations and litigation, see Note 19 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual
Report, which we incorporate by reference into this Item.

Item 5. Market for Registrant's Common Equity Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is traded on the New York Stock Exchange under the symbol BW.

PART II

As of January 31, 2021, there were approximately 1,000 record holders of our common stock prior to the completion of the common stock offering on February 12,
2020, as described in Note 25 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

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 purchase price per share for each month during the quarter ended December 31, 2020. The Company does not have a general share repurchase
program at this time.

(data in whole amounts)

Period
October 2020
November 2020
December 2020

Total

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

1,832 $
— $
— $
1,832 $

2.62
—
—
—

— $
— $
— $
— $

—
—
—
—

(1)

Repurchased shares are recorded in treasury stock in our Consolidated Balance Sheets included in Part II, Item 8 of this Annual Report.

Item 6. Selected Financial Data

We are currently a smaller reporting company as defined by Item 10(f)(1) of Regulation S-K and are not required to provide the information required by this item.

Item 7. 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 Annual 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

B&W is a growing, globally-focused renewable, environmental and thermal technologies provider with decades 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 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 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:

•

Our operating results for 2020 have been negatively impacted by the COVID-19 pandemic as previously described on pages 7 and 8. Because the majority of our
revenues are driven by projects, we cannot reasonably estimate the amount of the decreases in our operating results directly caused by COVID-19. We have
experienced adverse impacts on our 2020 revenues due to delays in closing new business deals, deferrals or delays in starting new projects, and other product
volume decreases due to COVID-19 in 2020 caused by the following, among other reasons:
Customers’ concern regarding the duration and magnitude of COVID-19;
Customers’ hesitance to place large orders;
Certain planned 2020 projects being delayed into 2021 and beyond;
Field service personnel unable to get to certain site projects;
Travel restrictions impeding our ability to acquire new customers; and
International growth plans hindered by recruitment, training & deployment of new field personnel.

•
•
•
•
•
•

We have manufacturing facilities in the Unites States, Mexico, Denmark, Scotland and China. Many aspects of our operations and properties could be affected by
political developments, 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 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. While we anticipate quarterly variability and cyclicality typical of our industry, we
expect to continue to show improvement in 2021 as compared to 2020.

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.

Our operating loss improved to a loss of $1.7 million for the year ended December 31, 2020 as compared to a loss of $29.4 million for the year ended December
31, 2019. Year-over-year comparisons of our results from continuing operations were affected by:

•

•
•

•

On October 10, 2020, we entered into a settlement agreement with an insurer in connection with five of the six European B&W Renewable EPC loss
contracts. In connection with the insured losses recognized in prior years, we recognized a loss recovery of $26.0 million as a reduction of our Cost of
operations in our Consolidated Statements of Operations included in Item 8 of this Annual Report. On October 23, 2020, we received gross proceeds of
$26.0 million, as described in Note 5 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
$11.8 million and $11.7 million of restructuring and spin-off costs were recognized in 2020 and 2019, primarily related to severance.
$4.4 million and $9.1 million of financial advisory service fees were recorded in 2020 and 2019, respectively, which are required under our U.S.
Revolving Credit Facility. Financial advisory service fees are included in advisory fees and settlement costs in the Consolidated Statement of Operations
included in Item 8 of this Annual Report.
$6.4 million and $11.8 million of legal and other advisory fees were recognized in 2020 and 2019, respectively, primarily related to a loss recovery
settlement agreement, a contract settlement and for liquidity planning and are included in advisory fees and settlement costs in the Consolidated Statement
of Operations included in Item 8 of this Annual Report. The settlements are further described above and in Note 5 to the Consolidated Financial
Statements included in Part II, Item 8 of this Annual Report.
$(23.2) million and $8.8 million of actuarially determined mark to market (“MTM”) (losses) gains on our pension and other post-retirement benefits in
2020 and 2019, respectively. MTM losses are further described in Note 13 to the Consolidated Financial Statements included in Part II, Item 8 of this
Annual Report.
$4.9 million of accelerated depreciation expense in 2019 for fixed assets affected by our September 2018 announcement to consolidate office space and
relocate our global headquarters to Akron, Ohio in December 2019.
$6.6 million of settlement cost was recognized in 2019 in connection with an additional European waste-to-energy EPC contract, for which notice to
proceed was not given and the contract was not started and is included in advisory fees and settlement costs in the Consolidated Financial Statements
included in Part II, Item 8 of this Annual Report. The settlement limits our obligations to our core scope activities and eliminates risk related to acting as
the prime EPC should the project have moved forward.
$3.6 million of loss on sale of business was recognized in 2019 for a non-core materials handling business in Germany, Loibl GmbH, as described in Note
23 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

RESULTS OF OPERATIONS

Consolidated Results of Operations

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

(In thousands)
Revenues:

B&W Renewable segment
B&W Environmental segment
B&W Thermal segment
Eliminations

(in thousands)
Adjusted EBITDA

(1)(2)

B&W Renewable segment
B&W Environmental segment
B&W Thermal segment
Corporate
Research and development costs

2020

Year ended December 31,
2019

$ Change

156,187 $
107,968
304,968
(2,806)
566,317 $

205,551 $
275,635
409,744
(31,819)
859,111 $

(49,364)
(167,667)
(104,776)
29,013
(292,794)

2020

Year ended December 31,
2019

$ Change

24,957 $
3,474
35,435
(14,425)
(4,379)
45,062 $

1,617 $
12,512
51,353
(17,579)
(2,861)
45,042 $

23,340
(9,038)
(15,918)
3,154
(1,518)
20

(1)

(2)

Revenues decreased by $292.8 million to $566.3 million in 2020 as compared to $859.1 million in 2019. Revenues for each of our segments have been adversely
impacted by COVID-19, including the postponement and delay of several projects due to COVID-19. In addition to the impacts of COVID-19, revenue was also
impacted by segment specific changes which are discussed in further detail in the sections below. .

Operating losses improved $27.6 million to $(1.7) million in 2020 from $(29.4) million in 2019, primarily due to the insurance loss recovery of $26.0 million and a
lower level of losses on the EPC loss contracts, partially offset by the divestiture of Loibl and the impacts of COVID-19 in the B&W Renewable segment, as well
as a decline in volume in the B&W Environmental and B&W Thermal segments related primarily to COVID-19. 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, a non-GAAP financial measure. Adjusted
gross profit 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 income (loss), the most directly comparable GAAP measure, to
adjusted gross profit is included in the table 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. As

previously discussed, we changed our reportable segments in 2020 and have recast prior period results to account for this change.

(in thousands)
Adjusted gross profit
Operating loss

(1)(2)(3)

Selling, general and administrative (“SG&A”) expenses
Advisory fees and settlement costs
Intangible amortization expense
Restructuring activities
Research and development costs
Loss from a non-strategic business
Gain on asset disposals, net

Adjusted gross profit

2020

Year ended December 31,
2019

$ Change

(1,737) $

141,438
12,878
5,467
11,849
4,379
2,559
(3,263)
173,570 $

(29,382) $
150,556
27,943
4,274
11,707
2,861
5,518
(3,940)
169,537 $

27,645
(9,118)
(15,065)
1,193
142
1,518
(2,959)
677
4,033

(1)

(2)

(3)

Intangible amortization is not allocated to the segments' adjusted gross profit, but depreciation is allocated to the segments' adjusted gross profit.
Adjusted gross profit for the years ended December 31, 2020 and December 31, 2019, excludes losses related to a non-strategic business that was previously included in Adjusted gross profit
within the B&W Environmental segment and totals $2.6 million and $5.5 million, respectively.
Adjusted gross profit for the year ended December 31, 2020, includes the recognition of a $26.0 million loss recovery settlement related to certain historical EPC loss contracts in the third
quarter.

Adjusted gross profit by segment is as follows:

(in thousands)
B&W Renewable segment
B&W Environmental segment
B&W Thermal segment
Adjusted gross profit

B&W Renewable Segment Results

(in thousands)
Revenues
Adjusted EBITDA
Adjusted gross profit
Adjusted gross profit %

2020

Year ended December 31,
2019

$ Change

58,838 $
23,548
91,184
173,570 $

29,992 $
48,372
91,173
169,537 $

28,846
(24,824)
11
4,033

2020

Year ended December 31,
2019

$ Change

$
$
$

156,187
24,957
58,838

$
$
$

37.7 %

205,551
1,617
29,992

$
$
$

14.6 %

(49,364)
23,340
28,846

Revenues in the B&W Renewable segment decreased 24%, or $49.4 million to $156.2 million in 2020 compared to $205.6 million in 2019. The reduction in
revenue is due to the advanced completion of activities on the European B&W Renewable EPC loss contracts in the prior year as well as new anticipated activities
being deferred due to COVID-19, partially offset by a higher level of activities on two operations and maintenance contracts in the U.K. which followed the
turnover of the EPC loss contracts to the customers. Additionally, the reduction in revenue partially relates to the divestiture of Loibl, a materials handling business
in Germany that generated revenues of approximately $14.3 million in 2019.

Adjusted EBITDA in the B&W Renewable segment improved $23.3 million to $25.0 million in 2020 compared to $1.6 million in 2019. The improvement is
primarily due to the loss recovery of $26.0 million recognized in 2020 under an October 10, 2020 settlement agreement with an insurer in connection with five of
the six European B&W Renewable EPC loss contracts. In addition the B&W Renewable segment incurred lower costs in the current year to complete the six
European

B&W Renewable EPC loss contracts which included $3.7 million and $6.9 million in net losses, including warranty in 2020 and 2019, respectively. The Adjusted
EBITDA improvement was also partially offset by the divestiture of Loibl and lower volume, as described above.

Adjusted gross profit in the B&W Renewable segment increased $28.8 million to $58.8 million in 2020 compared to $30.0 million in 2019. The improvement is
primarily due to the loss recovery of $26.0 million recognized in 2020 under an October 10, 2020 settlement agreement with an insurer in connection with five of
the six European B&W Renewable EPC loss contracts and lower costs in the current year to complete the six European B&W Renewable EPC loss contracts,
partially offset by lower volume.

B&W Environmental Segment Results

(In thousands)
Revenues
Adjusted EBITDA
Adjusted gross profit
Adjusted gross profit %

2020

Year ended December 31,
2019

$ Change

$
$
$

107,968
3,474
23,548

$
$
$

21.8 %

275,635
12,512
48,372

$
$
$

17.5 %

(167,667)
(9,038)
(24,824)

Revenues in the B&W Environmental segment decreased 61%, or $167.7 million, to $108.0 million in 2020 from $275.6 million in 2019. The decrease is primarily
due to the completion of large construction projects in the prior year and a lower level of activity primarily due to the postponement of new projects by several
customers as a result of COVID-19. B&W Environmental's two significant legacy loss contracts, generated revenues of $4.1 million and $18.8 million in 2020 and
2019, respectively.

Adjusted EBITDA in the B&W Environmental segment decreased $9.0 million to $3.5 million in 2020 compared to $12.5 million in 2019. The decline is primarily
attributable to the impacts of lower volume, the effects of which were partially offset by a lower percentage of overhead being allocated to the segment that were
not previously allocated to other segments.

Adjusted gross profit in the B&W Environmental segment decreased $24.8 million, to $23.5 million in 2020, compared to $48.4 million in 2019. The decrease is
primarily attributable to the decrease in volume as described above.

B&W Thermal Segment Results

(In thousands)
Revenues
Adjusted EBITDA
Adjusted gross profit
Adjusted gross profit %

2020

Year ended December 31,
2019

$ Change

$
$
$

304,968
35,435
91,184

$
$
$

29.9 %

409,744
51,353
91,173

$
$
$

22.3 %

(104,776)
(15,918)
11

Revenues in the B&W Thermal segment decreased 26%, or $104.8 million, to $305.0 million in 2020 compared to $409.7 million in 2019. The revenue decrease is
attributable to the completion of large construction projects in the prior year in addition to the adverse impacts of COVID-19 resulting in lower parts, construction,
package boilers and international service orders.

Adjusted EBITDA in the B&W Thermal segment decreased 31%, or $15.9 million, to $35.4 million in 2020 compared to $51.4 million in 2019, primarily
attributable to lower volume of project activity and a higher percentage of overhead being allocated to the segment that was previously allocated to other segments,
the effects of which were partially offset by favorable product mix and a full period of cost savings and restructuring initiatives benefiting the current year.

Adjusted gross profit in the B&W Thermal segment remained flat at $91.2 million primarily due to lower volume as described above which was offset by favorable
product mix and the effects of a full period of cost savings and restructuring initiatives benefiting the current year.

Bookings and Backlog

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

We generally include expected revenue from contracts in our backlog when we receive written confirmation from our customers authorizing the performance of
work and committing the customers to payment for work performed. Backlog may not be indicative of future operating results, and contracts in our backlog may be
canceled, modified or otherwise altered by customers. Backlog can vary significantly from period to period, particularly when large new build projects or
operations and maintenance contracts are booked because they may be fulfilled over multiple years. Additionally, because 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.

Our bookings for the year ended December 31, 2020 and 2019 was as follows:

(1)

(In approximate millions)
B&W Renewable
B&W Environmental
B&W Thermal
Other/eliminations

Bookings

Year ended December 31,

2020

2019

116 $
147
390
(8)
645 $

42
152
343
(21)
516

(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 years
ended December 31, 2020 and 2019 was $(14.7) million and $(3.3) million, respectively.

Our backlog as of December 31, 2020 and 2019 was as follows:

(1)

(In approximate millions)
B&W Renewable
B&W Environmental
B&W Thermal
Other/eliminations

Backlog

As of December 31,

2020

2019

208 $
106
226
(5)
535 $

226
81
140
(6)
441

(1)

B&W Renewable backlog at December 31, 2020, includes $164.1 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 December 31, 2020, we expect to recognize revenues as follows:

(In approximate millions)
B&W Renewable
B&W Environmental
B&W Thermal
Other/eliminations

Expected revenue from backlog

2021

2022

Thereafter

Total

54 $
65
188
(5)
302 $

22 $
12
35
—
69 $

132 $
29
3
—
164 $

208
106
226
(5)
535

Corporate

Corporate costs include SG&A expenses that are not allocated to the reportable segments. These costs include certain executive, compliance, strategic, reporting
and legal expenses associated with governance of the total organization and being an SEC registrant. Corporate costs decreased $3.2 million to $14.4 million in the
year ended December 31, 2020 as compared to $17.6 million in the year ended December 31, 2019, primarily due to decreased bonus costs recognized for the year
ended December 31, 2020.

Advisory Fees and Settlement Costs

Advisory fees and settlement costs decreased by $15.1 million to $12.9 million in the year ended December 31, 2020 as compared to $27.9 million in the year
ended December 31, 2019, primarily due to settlement costs to exit the fifth B&W Renewable EPC contract in the first quarter of 2019 as described in Note 5 to the
Consolidated Financial Statements included in Part II, Item 8 of this Annual Report and also due to reduced use of external consultants in 2020 as the Company
staffed certain positions internally.

Research and Development

Our research and development activities are related to improving our products through innovations to reduce the cost of our products to make them more
competitive and through innovations to reduce performance risk of our products to better meet our and our customers' expectations. Research and development
costs unrelated to specific contracts are expensed as incurred. Research and development expenses totaled $4.4 million and $2.9 million for the years ended
December 31, 2020 and 2019, respectively. The increase resulted primarily from our strategy to support future growth.

Restructuring

Restructuring actions across our business segments and corporate functions resulted in $11.8 million and $11.7 million of expense in the years ended December 31,
2020 and 2019, respectively.

Depreciation and Intangible Asset Amortization

Depreciation expense was $11.3 million and $19.3 million in the years ended December 31, 2020 and 2019, respectively.

We recorded intangible asset amortization expense of $5.5 million and $4.3 million in the years ended December 31, 2020 and 2019, respectively.

In December 2019, we consolidated all of our Barberton and most of our Copley, Ohio operations into new, leased office space in Akron, Ohio and $4.9 million of
accelerated depreciation was recognized during the year ended December 31, 2019.

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. Service cost is low because our plan benefits are frozen except for a small number of hourly participants. Pension benefits,
excluding MTM adjustments of a loss of $23.2 million and a gain of $8.8 million, were $28.8 million and $14.0 million in the years ended December 31, 2020 and
2019, respectively. The increase in the net periodic pension benefit was primarily due to the impact of lower discount rates and higher actual return on plan assets.
The change in the MTM adjustment was primarily due to the lower impact of discount rate changes, lower actual return on plan assets, reduced mortality
assumption gains and higher losses related to demographic experience.

The following sensitivity analysis reflects the impact of a 25 basis point change in the assumed discount rate and return on assets on our pension plan obligations
and expense for the year ended December 31, 2020:

(In millions)

Discount rate:

Effect on ongoing net periodic benefit cost
Effect on projected benefit obligation

(1)

Return on assets:

Effect on ongoing net periodic benefit cost

(1)

Excludes effect of annual MTM adjustment.

0.25% increase

0.25% decrease

(31.1) $
(34.1)

(2.4)

32.6
35.7

2.4

A 25 basis point change in the assumed discount rate and return on assets would have no meaningful impact on our other postretirement benefit plan obligations
and expense for the year ended December 31, 2020 individually or in the aggregate, excluding the impact of any annual MTM adjustments we record annually.

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 income.

Foreign exchange was a gain of $58.8 million and a loss of $16.6 million for the years ended December 31, 2020 and 2019, respectively. Foreign exchange gains
and losses are primarily related to unhedged intercompany loans denominated in European currencies to fund foreign operations. Foreign exchange gains in 2020
were primarily driven by a weakening U.S. dollar compared to the underlying European currencies and changes in loan balances denominated in Danish Krone that
averaged over $500 million throughout the year.

Income Taxes

(In thousands, except for percentages)
Income (loss) before income taxes
Income tax expense
Effective tax rate

$
$

2020

Year ended December 31,
2019

$
$

(3,918)
8,179
(208.8)%

(124,447)
5,286

$
$

(4.2)%

$ Change

120,529
2,893

Our effective tax rate in 2020 reflects a valuation allowance against deferred tax assets in jurisdictions other than, Mexico, Canada, the United Kingdom, and
Sweden.

The increase in our income tax expense in 2020 compared to 2019 is primarily attributable to additional income in our profitable foreign subsidiaries, additional
foreign withholding taxes incurred on cross-border transactions, and a $1.1 million deferred tax liability related to unremitted earnings of certain foreign
subsidiaries.

In 2019, our effective tax rate was also impacted by valuation allowances related to losses incurred in certain jurisdictions.

Liquidity and Capital Resources

Liquidity

Our primary liquidity requirements include debt service and working capital needs. We fund our liquidity requirements primarily through cash generated from
operations and external sources of financing, including our A&R Credit Agreement (as defined below) that governs the U.S. Revolving Credit Facility and the last
out term loans (the “Last Out Term Loans”), each of which are described below in further detail along with other sources of liquidity.

As described in Recent Developments in Part II of this Annual Report on Form 10-K, on February 12, 2021, we completed offerings of common stock and 8.125%
senior notes due 2026, which resulted in net proceeds of approximately $283 million after deducting underwriting discounts and commissions, but before expenses.

Cash and Cash Flows

At December 31, 2020, our unrestricted cash and cash equivalents totaled $57.3 million and we had total debt of $347.6 million. Our foreign business locations
held $38.7 million of our total unrestricted cash and cash equivalents at December 31, 2020. Our U.S. Revolving Credit Facility allows for nearly immediate
borrowing of available capacity to fund cash requirements in the normal course of business, meaning that U.S. cash on hand is minimized to reduce borrowing
costs. 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 had approximately
$33.7 million available for borrowings under the U.S. Revolving Credit Facility at December 31, 2020.

Cash used in operations was $40.8 million in the year ended December 31, 2020, which is primarily the result of the change in accounts payable. In the year ended
December 31, 2019, cash used in operations was $176.3 million primarily due to funding settlements related to European B&W Renewable EPC contracts,
progress against accrued losses on the six European B&W Renewable EPC loss contracts and working capital build within the B&W Thermal segment related to
the timing of and mix of work.

Cash flows from investing activities provided net cash of $2.2 million in the year ended December 31, 2020, primarily related to $8.0 million of proceeds received
from the settlement of remaining escrows associated with the sale of Palm Beach Resource Recovery Corporation and MEGTEC and Universal businesses, $5.0
million of other investing activities, offset by the net change in available-for-sale securities and $8.2 million of capital expenditures. In the year ended
December 31, 2019, net cash provided by investing activities was $8.8 million, primarily from proceeds received from the sale of Loibl for $7.4 million.

Cash flows from financing activities provided net cash of $44.1 million in the year ended December 31, 2020, primarily related to $70.0 million net borrowings
from the Last Out Term Loans, offset by $14.7 million of net repayments of the U.S. Revolving Credit Facility and $10.6 million of financing fees. Net cash
provided by financing activities in the year ended December 31, 2019 was $167.0 million primarily related to $109.6 million net borrowings from the Last Out
Term Loans, $34.1 million of net borrowings from the U.S. Revolving Credit Facility, and $40.4 million proceeds from the Rights Offering, partly offset by $16.6
million of financing fees.

A&R Credit Agreement

As described in Note 14 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, on May 11, 2015, we entered into the Amended
Credit Agreement with a syndicate of lenders in connection with our spin-off from BWXT which governs the U.S. Revolving Credit Facility and the Last Out Term
Loans (as defined below). Since June 2016, we have entered into a number of waivers and amendments to the Amended Credit Agreement, including several to
avoid default under the financial and other covenants specified in the Amended Credit Agreement.

On May 14, 2020, we entered into an agreement with our lenders amending and restating the Amended Credit Agreement (the “A&R Credit Agreement”). The
A&R Credit Agreement refinances and extends the maturity of our U.S. Revolving Credit Facility and Last Out Term Loans.

Under the A&R Credit Agreement, B. Riley has committed to provide the Company with up to $70.0 million of additional Last Out Term Loans on the same terms
as the term loans extended under the Amended Credit Agreement. An aggregate $30.0 million of this new commitment was funded upon execution of the A&R
Credit Agreement. Of the remaining commitments, at least $35.0 million will be funded in installments, subject to reduction for the gross proceeds from certain
equity offerings conducted by the Company, and $5.0 million will be funded upon request by the Company. The proceeds from the $30.0 million of new term loans
were used to pay transaction fees and expenses and repay outstanding borrowings under the U.S. Revolving Credit Facility. Proceeds from the additional
$40.0 million of term loans were used to repay outstanding borrowings under the U.S. Revolving Credit Facility, with any remaining amounts used for working
capital, capital expenditures, permitted acquisitions and general corporate purposes. See Note 14 and Note 15 to the Consolidated Financial Statements included in
Part II, Item 8 of this Annual Report for additional discussion of the A&R Credit Agreement, U.S. Credit Facility and Last Out Term Loans.

On February 8, 2021, we entered into Amendment No. 2 to the A&R, which among other things, permitted the issuance of the 8.125% senior notes due 2026. See
Recent Developments in Part II of this Annual Report on Form 10-K for additional discussion of Amendment No. 2 to A&R Credit Agreement.

On March 4, 2021, we entered into A&R Amendment No. 3 with Bank of America. A&R Amendment No. 3, among other matters, at the date of effectiveness (i)
permits the prepayment of certain term loans, (ii) reduces the revolving credit commitments to $130 million and removes the ability to obtain revolving loans under
the credit agreement, and (iii) amends certain covenants and conditions to the extension of credit.

U.S. Revolving Credit Facility

As of December 31, 2020, the U.S. Revolving Credit Facility provides for a senior secured revolving credit facility in an aggregate amount of up to $306.2 million,
as amended and adjusted for completed asset sales. The proceeds from loans under the U.S. Revolving Credit Facility are available for working capital needs,
capital expenditures, permitted acquisitions and other general corporate purposes, and the full amount is available to support the issuance of letters of credit, subject
to the limits specified in the agreement.

At December 31, 2020, borrowings under the U.S. Revolving Credit Facility consisted of $164.3 million at a weighted average interest rate of 7.46%. Usage under
the U.S. Revolving Credit Facility consisted of $164.3 million of revolving loan borrowings, $22.0 million of financial letters of credit and $86.2 million of
performance letters of credit. At December 31, 2020, we had approximately $33.7 million available to meet letter of credit and borrowing requirements based on
our overall facility size.

On October 23, 2020, we received $26.0 million under the settlement agreement described in Note 5 to the Consolidated Financial Statements included in Part II,
Item 8 of this Annual Report. As required by the Company’s U.S. Revolving Credit Facility, 50% of the net proceeds (gross proceeds less costs) or $8.0 million of
the settlement received by the Company was applied as a permanent reduction of the U.S. Revolving Credit Facility in October 2020.

As described in Note 14 and Note 25 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, on February 12, 2021, we received
gross proceeds of $125 million from the 2021 Senior Notes offering. As required by the Company’s U.S. Revolving Credit Facility, 75% of the gross proceeds or
$93.8 million received by the Company was applied as a permanent reduction of the U.S. Revolving Credit Facility as of February 12, 2021. Net proceeds received
were approximately $120 million after deducting underwriting discounts and commissions, but before expenses.

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

As of March 4, 2021, effective with Amendment No. 3 to the A&R Credit Agreement described above, the U.S. Revolving Credit Facility provides for an
aggregate letters of credit amount of up to $130 million.

Last Out Term Loans

Last Out Term Loans are incurred under our A&R Credit Agreement and are pari passu with the U.S. Revolving Credit Facility except for certain payment
subordination provisions. The Last Out Term Loans are subject to the same representations and warranties, covenants and events of default as the U.S. Revolving
Credit Facility. Under U.S. GAAP, a debt modification with the same borrower that results in substantially different terms is accounted for as an extinguishment of
the existing debt and a reborrowing of new debt. An extinguishment gain or loss is then recognized based on the fair value of the new debt as compared to the
carrying value of the extinguished debt. The Company recognized a loss on debt extinguishment of $6.2 million in 2020, primarily representing the unamortized
value of the original issuance discount and fees on the Tranche A-3 Last Out Term Loan. In connection with the effectiveness of the A&R Credit Agreement, the
maturity date for the Last Out Term Loans was extended to December 30, 2022.

On December 31, 2020, September 30, 2020 and June 30, 2020, the Company issued 2,379,376, 2,334,002, and 1,192,371 unregistered shares of common stock to
B. Riley in settlement of the Last Out Term Loans' quarterly interest payable in connection with the Fee and Interest Equitization Agreement further discussed in
Note 14.

The total effective interest rate of Tranche A-3, Tranche A-4 and Tranche A-6 was 12.0% on December 31, 2020. Interest expense associated with the Last Out
Term Loans is detailed in Note 16.

As of December 31, 2020, the Last Out Term Loans are presented as a non-current liability in our Consolidated Balance Sheets as a result of the extension of their
maturity dates to December 30, 2022 granted under the A&R Credit Agreement. As of December 31, 2019, the Last Out Term Loans are presented as a current
liability in our Consolidated Balance Sheets as a result of limited waivers granted to maintain compliance with the covenants in the previous Amended Credit
Agreement. See Note 14 and Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for additional discussion of the
A&R Credit Agreement, U.S. Credit Facility and Last Out Term Loans.

On February 12, 2021, we issued $35 million of Senior Notes to B. Riley Financial, Inc. in exchange for a deemed prepayment of our existing Last Out Term Loan'
Tranche A-6. The interest rate on the remaining Last Out Term Loan Tranche A balances has been reduced to 6.625% from 12.0%. See Recent Developments in
Part II of this Annual Report on Form 10-K for additional discussion of the exchange and deemed prepayment.

On March 4, 2021, effective with the execution of A&R Amendment No. 3, we paid $75 million towards our existing Last Out Term Loans..

Letters of Credit, Bank Guarantees and Surety Bonds

As described in Note 14 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, certain subsidiaries primarily outside of the
United States have credit arrangements with various commercial banks and other financial institutions for the issuance of letters of credit and bank guarantees in
association with contracting activity. The aggregate value of all such letters of credit and bank guarantees opened outside of the U.S. Revolving Credit Facility as
of December 31, 2020 and December 31, 2019 was $84.5 million and $88.5 million, respectively. The aggregate value of the letters of credit provided by the U.S.
Revolving Credit Facility backstopping letters of credit or bank guarantees was $32.0 million as of December 31, 2020. Of the letters of credit issued under the
U.S. Revolving Credit Facility, $34.9 million are subject to foreign currency revaluation.

Our ability to obtain and maintain sufficient capacity under our U.S. Revolving Credit Facility 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.

B. Riley Limited Guaranty

In connection with the Company’s entry into the A&R Credit Agreement, B. Riley entered into the B. Riley Guaranty (as defined in Note 14) for the benefit of the
Administrative Agent and the lenders under the U.S. Revolving Credit Facility. The B. Riley Guaranty provides for the guarantee of all of the Company’s
obligations with respect to the U.S. Revolving Credit Facility (other than with respect to letters of credit and contingent obligations), including the obligation to
repay outstanding

revolving credit loans and pay earned interest and fees. See Note 14 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for
additional discussion of the B. Riley Guaranty.

Fee and Interest Equitization Agreement

In connection with the B. Riley Guaranty, the Company entered into the Equitization Agreement (as defined in Note 14) with B. Riley and, solely for certain
limited purposes under the Equitization Agreement, B. Riley FBR, Inc.

The Equitization Agreement provides that, in lieu of receiving (a) $13.4 million of interest payments with respect to Last Out Term Loans under the A&R Credit
Agreement between May 14, 2020 and December 31, 2020 and (b) the B. Riley Guaranty Fee, B. Riley will receive unregistered shares of the Company’s Common
Stock. See Note 14 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for additional discussion of the Equitization
Agreement.

Equitization Transactions

In connection with Amendment No. 16 to the Amended Credit Agreement and the extension of Tranche A-3 of the Last Out Term Loans, the Company, B. Riley
and Vintage, each related parties, entered into the “Letter Agreement” on April 5, 2019, pursuant to which the parties agreed to use their reasonable best efforts to
effect a series of equitization transactions for a portion of the Last Out Term Loans, subject to, among other things, stockholder approval. Stockholder approval was
received at the Company's annual stockholder meeting on June 14, 2019 and the contemplated transactions. See Note 14 to the Consolidated Financial Statements
included in Part II, Item 8 of this Annual Report for additional discussion of the Equitization Transactions.

2019 Rights Offering

On June 28, 2019, we distributed to holders of our common stock one nontransferable subscription right to purchase 0.986896 common shares for each common
share held at a subscription price of $0.30 per whole share of common stock (the “2019 Rights Offering”). The 2019 Rights Offering expired on July 18, 2019 and
settled on July 23, 2019.

The 2019 Rights Offering resulted in the issuance of 13.9 million common shares as a result of the exercise of subscription rights in the offering. Gross proceeds
from the 2019 Rights Offering were $41.8 million, $10.3 million which was used to fully repay Tranche A-2 of the Last Out Term Loans and the remaining $31.5
million was used to reduce outstanding borrowings under Tranche A-3 of the Last Out Term Loans. Concurrently with the closing of the 2019 Rights Offering, and
in satisfaction of the Backstop Commitment, the Company issued an aggregate of 2.7 million common shares in exchange for a portion of the Tranche A-3 Last
Out Term Loans totaling $8.2 million, to B. Riley, a related party. The 2019 Rights Offering was pursuant to the April 5, 2019 Letter Agreement and the
Equitization Transactions and were approved by stockholders at the Company's annual stockholder meeting on June 14, 2019.

2021 Offerings of Common Stock and 8.125% Senior Notes due 2026

As described in Recent Developments of Part I of this Annual Report on Form 10-K, on February 12, 2021, we closed our underwritten public offerings of
common stock and 8.125% senior notes due 2026. See the discussion in Recent Developments for additional information regarding these offerings.

Off-Balance Sheet Arrangements

There were no significant off-balance sheet arrangements at December 31, 2020.

EFFECTS OF INFLATION AND CHANGING PRICES

Our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report are prepared in accordance with generally accepted accounting principles
in the United States, using historical United States dollar accounting (“historical cost”). Statements based on historical cost, however, do not adequately reflect the
cumulative effect of increasing costs and changes in the purchasing power of the United States dollar, especially during times of significant and continued inflation.

In order to minimize the negative impact of inflation on our operations, we attempt to cover the increased cost of anticipated changes in labor, material and service
costs, either through an estimate of those changes, which we reflect in the original

price, or through price escalation clauses in our contracts. However, there can be no assurance we will be able to cover all changes in cost using this strategy.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Consolidated Financial Statements included in Part II, Item 8 of this Annual Report are prepared in accordance with accounting principles generally accepted
in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe the following are our most
critical accounting policies that we apply in the preparation of our consolidated financial statements. These policies require our most difficult, subjective and
complex judgments, often as a result of the need to make estimates of matters that are inherently uncertain.

Contracts and revenue recognition

A significant portion of our revenue is recognized over time using the cost-to-cost input method, which involves significant estimates. This method of revenue
recognition uses costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred
cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material,
overhead, warranty and, when appropriate, SG&A expenses. Variable consideration in these contracts includes estimates of liquidated damages, contractual
bonuses and penalties, and contract modifications.

We review contract price and cost estimates each reporting period as the work progresses and reflect adjustments proportionate to the costs incurred to date relative
to total estimated costs at completion in income in the period when those estimates are revised. These changes in estimates can be material. For all contracts, if a
current estimate of total contract cost indicates a loss on a contract, the projected contract loss is recognized in full through the statement of operations and an
accrual for the estimated loss on the uncompleted contract is included in other accrued liabilities in the Consolidated Balance Sheets. In addition, when we
determine that an uncompleted contract will not be completed on-time and the contract has liquidated damages provisions, we recognize the estimated liquidated
damages we will incur and record them as a reduction of the estimated selling price in the period the change in estimate occurs. Losses accrued in advance of the
completion of a contract are included in other accrued liabilities in our Consolidated Balance Sheets.

Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in the contract specifications or
requirements. In most instances, contract modifications are for goods or services that are not distinct and, therefore, are accounted for as part of the existing
contract, with cumulative adjustment to revenue.

We recognize claims receivable in contract revenues for extra work or changes in scope of work to the extent of costs incurred when we believe we have an
enforceable right to the modification or claim and the amount can be estimated reliably, and its realization is probable. In evaluating these criteria, we consider the
contractual/legal basis for enforcing the claim, the cause of any additional costs incurred and whether those costs are identifiable or otherwise determinable, the
nature and reasonableness of those costs, the objective evidence available to support the amount of the claim, and our relevant history with the counter-party that
supports our expectations about their willingness and ability to pay for the additional cost along with a reasonable margin. In our Consolidated Balance Sheets,
claims receivable at December 31, 2020 and December 31, 2019 were not significant.

Our revenue recognition policies, assumptions, changes in estimates and significant loss contracts are described in greater detail in Note 2 to the Consolidated
Financial Statements included in Part II, Item 8 of this Annual Report.

Warranty

We accrue estimated expense included in cost of operations on our Consolidated Statements of Operations to satisfy contractual warranty requirements when we
recognize the associated revenues on the related contracts. In addition, we record specific provisions or reductions when we expect the actual warranty costs to
significantly differ from the accrued estimates. Factors that impact our estimate of warranty costs include prior history of warranty claims and our estimates of
future costs of materials and labor. Such changes could have a material effect on our consolidated financial condition, results of operations and cash flows. See
Note 11 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for further discussion.

Loss contingencies

Income taxes

Income tax expense for federal, foreign, state, and local income taxes is calculated on taxable income based on the income tax law in effect at the latest balance
sheet date and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. We record a
valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. We assess the need for valuation allowances on a
quarterly basis. In determining the need for a valuation allowance, we consider relevant positive and negative evidence, including carryback potential, reversals of
taxable temporary differences, future taxable income, and tax-planning strategies. As of December 31, 2020, we have a valuation allowance on our deferred tax
assets in substantially all jurisdictions, as we do not believe it is more likely than not that the deferred tax assets will be realized.

For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than
50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax
positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in our consolidated financial statements. We
record interest and penalties (net of any applicable tax benefit) related to income taxes as a component of provision for income taxes on our Consolidated
Statements of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risk from changes in interest rates relates primarily to our cash equivalents and our investment portfolio, which primarily consists of
investments in U.S. government obligations and highly liquid money market instruments denominated in U.S. dollars. We are averse to principal loss and seek to
ensure the safety and preservation of our invested funds by limiting default risk, market risk and reinvestment risk. Our investments are classified as available-for-
sale.

Our U. S. Revolving Credit Facility is variable-rate debt, so its fair value would not be significantly affected by changes in prevailing market rates. On
December 31, 2020, its principal balance was $164.3 million, and the weighted average interest rate was 7.46%. As of the effectiveness date of our A&R Credit
Agreement on May 14, 2020, our Last Out Term Loans' interest rate was fixed at 12.0% per annum. Prior to May 14, 2020, our Last Out Term Loans had a paid-in-
kind interest feature which was additive to the principal balance.

We have operations in many foreign locations, and, as a result, our financial results could be significantly affected by factors such as changes in foreign currency
exchange (“FX”) rates or weak economic conditions in those foreign markets. Foreign currency transaction gains and losses on intercompany loans that are not
designated as permanent loans are recorded in earnings. Our primary foreign currency exposures are Danish krone, British pound, Euro, Canadian dollar, Mexican
peso,and Chinese yuan. If the balances of these intercompany loans at December 31, 2020 were to remain constant, a 100 basis point change in FX rates would
impact our earnings by an estimated $17.3 million per year.

ITEM 8. Consolidated Financial Statements and Supplemental Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Babcock & Wilcox Enterprises, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Babcock & Wilcox Enterprises, Inc. (the "Company") as of December 31, 2020 and 2019, the
related consolidated statements of operations, comprehensive (loss) income, stockholders' (deficit) equity, and cash flows, for each of the two years in the period
ended December 31, 2020, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our
opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of
its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in
the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required
to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control
over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to
be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken
as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or
disclosures to which they relate.

Revenue Recognition and Contracts – Refer to Notes 2 and 5 to the financial statements

Critical Audit Matter Description

The Company recognizes fixed price long-term contract revenue over the contract term (“over time”) as the work progresses, either as products are produced or as
services are rendered, because transfer of control to the customer occurs over time. Substantially all of the Company’s fixed price long-term contracts represent a
single performance obligation as the interdependent nature of the goods and services provided prevents them from being separately identifiable within the contract.
Revenue recognized over time primarily relates to customized, engineered solutions and construction services from all three of the Company’s segments.
Typically, revenue is recognized over time using the cost-to-cost input method that uses costs incurred to date relative to total estimated costs at completion to
measure progress toward satisfying the Company’s performance obligations. The accounting for these contracts involves judgment, particularly as it relates to the
process of

estimating total costs and profit for the performance obligation. Revenue from fixed price long term contracts for products and services transferred to customer
over time accounted for 71% of Company revenue for the year ended December 31, 2020.

We identified revenue on fixed price long-term contracts as a critical audit matter because of the judgments necessary for management to estimate total costs and
profit for the performance obligations used to recognize revenue for certain fixed price long-term contracts. This required extensive audit effort due to the volume
and complexity of fixed price long-term contracts and required a high degree of auditor judgment when performing audit procedures to audit management’s
estimates of total costs and profit and evaluating the results of those procedures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s estimates of total costs and profit for the performance obligations used to recognize revenue for certain fixed price
long-term contracts included the following, among others:

• We selected a sample of customer fixed price long-term contracts performed over time and performed the following:

–

Evaluated whether the fixed price contracts were properly included in management’s calculation of fixed price long-term contract revenue based
on the terms and conditions of each contract, including whether continuous transfer of control to the customer occurred as progress was made
toward fulfilling the performance obligation.

– Compared the transaction prices to the consideration expected to be received based on current rights and obligations under the contracts and any

modifications that were agreed upon with the customers.

–

Tested management’s identification of distinct performance obligations by evaluating whether the underlying goods, services, or both were
highly interdependent and interrelated.

Tested the accuracy and completeness of the costs incurred to date for the performance obligation.

– With the assistance of our capital projects specialists we evaluated the estimates of total cost and profit for the performance obligation by:
– Comparing costs incurred to date to the costs which management estimated to be incurred to date.

–

Evaluating management’s ability to achieve the estimates of total cost and profit by performing corroborating inquiries with the Company’s
project managers and engineers, and comparing the estimates to management’s work plans, engineering specifications, and supplier contracts.

– Comparing management’s estimates for the selected contracts to costs and profits of similar performance obligations, when applicable.

–

Tested the mathematical accuracy of management’s calculation of revenue for the performance obligation.

Tested management’s retrospective review of each contract’s revenue to determine whether revenue is accurately recognized during the period
under audit.

•

Evaluated the Company’s disclosures related to revenue recognition and contracts to assess their conformity with the applicable accounting standards.

Accounting for A&R Credit Agreement– Refer to Notes 14 and 15 to the financial statements

Critical Audit Matter Description

On May 14, 2020, the Company entered into an agreement with its lenders amending and restating its Amended Credit Agreement (the “A&R Credit Agreement”).
The agreement refinances and extends the maturity of its Revolving Credit Facility and Last Out Term Loans. The agreement, among other things, extends the
maturity date of the revolving credit facility to June 30, 2022, and the maturity date of all Last Out Term Loans to December 30, 2022; retains the interest rates in
effect before the refinancing throughout the revised maturity dates; and provides for the deferral of certain interest payments during 2020 to be paid in 2021.

We identified the accounting for the A&R Credit Agreement as a critical audit matter because of the judgments necessary for management to determine if the
amendment of the debt agreement resulted in a debt extinguishment, a debt modification or a troubled debt restructuring for the Revolving Credit Facility and for
the Last Out Term Loans.

This required extensive audit effort due to the complexity of the agreement and required a high degree of auditor judgment when performing audit procedures to
audit management’s estimates and judgments and evaluating the results of those procedures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the accounting of the A&R Credit Agreement and management’s judgements used to account for the amendment included the
following, among others:

•

Evaluated management's conclusion regarding the accounting treatment of the A&R Credit Agreement by performing the following:

– We obtained and analyzed the executed A&R Credit Agreement.

– We obtained and analyzed the Company’s documentation and accounting assessment including their conclusions regarding the appropriate unit

of account to use for evaluation.

– We obtained and analyzed the Company’s documentation and accounting assessment including their conclusions reached regarding the
appropriate accounting model to apply to the amendment for each of the Revolving Credit Facility and the Last Out Term Loans.

– With the assistance of our professionals having experience in accounting for complex debt arrangements, we evaluated whether the restructuring
of each of the Revolving Credit Facility and the Last Out Term Loans represents a troubled debt restructuring through the following procedures:

–

Evaluated whether the Company was experiencing financial difficulties at the time of the amendment.

Evaluated whether a concession was granted by either of the creditors.

– With the assistance of fair value specialists, we independently evaluated the reasonableness of the interest rates for both the Revolving
Credit Facility and Last Out Term Loans after the amendment to determine whether they were deemed to be at market rates or met the
criteria of a concession.

•

Evaluated the Company’s disclosures to assess their compliance with the applicable accounting standards.

/S/ DELOITTE & TOUCHE LLP

Cleveland, Ohio
March 8, 2021

We have served as the Company’s auditor since 2014.

BABCOCK & WILCOX ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

Year ended December 31,

2020

2019

566,317 $

(in thousands, except per share amounts)
Revenues
Costs and expenses:
Cost of operations
Selling, general and administrative expenses
Advisory fees and settlement costs
Restructuring activities
Research and development costs
Gain on asset disposals, net
Total costs and expenses

Operating loss
Other (expense) income:

Interest expense
Interest income
Loss on debt extinguishment
Loss on sale of business
Benefit plans, net
Foreign exchange
Other – net

Total other expense

Loss before income tax expense

Income tax expense

Loss from continuing operations

Income from discontinued operations, net of tax

Net loss

Net (income) loss attributable to non-controlling interest
Net loss attributable to stockholders

Basic and diluted (loss) earnings per share:

Continuing operations
Discontinued operations

Basic and diluted loss per share

Shares used in the computation of earnings (loss) per share:

Basic and diluted

See accompanying notes to Consolidated Financial Statements.

400,465
141,746
12,878
11,849
4,379
(3,263)
568,054
(1,737)

(59,796)
646
(6,194)
(108)
5,600
58,799
(1,128)
(2,181)
(3,918)
8,179
(12,097)
1,800
(10,297)
(21)

(10,318) $

(0.25) $
0.04
(0.21) $

859,111

698,853
151,069
27,943
11,707
2,861
(3,940)
888,493
(29,382)

(94,901)
923
(3,969)
(3,601)
22,800
(16,602)
285
(95,065)
(124,447)
5,286
(129,733)
694
(129,039)
7,065
(121,974)

(3.89)
0.02
(3.87)

48,710

31,514

BABCOCK & WILCOX ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands)
Net loss
Other comprehensive (loss) income:

Currency translation adjustments (CTA)

Reclassification of CTA to net loss

Derivative financial instruments:

Unrealized gains on derivative financial instruments
Derivative financial instrument losses reclassified into net loss
Derivative financial instruments reclassified to advanced billings on contracts

Benefit obligations:

Amortization of benefit plan benefits

Other comprehensive (loss) income
Total comprehensive loss

Comprehensive (income) loss attributable to non-controlling interest

Comprehensive loss attributable to stockholders

See accompanying notes to Consolidated Financial Statements.

Year ended December 31,

2020

2019

(10,297) $

(129,039)

(53,318)

—

—
—
—

(998)
(54,316)
(64,613)
(29)

(64,642) $

13,401

3,176

(1,367)
202
(197)

(1,857)
13,358
(115,681)
7,140
(108,541)

BABCOCK & WILCOX ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS

December 31, 2020

December 31, 2019

(in thousands, except per share amount)
Cash and cash equivalents
Restricted cash and cash equivalents
Accounts receivable – trade, net
Accounts receivable – other
Contracts in progress
Inventories
Other current assets
Current assets held for sale
Total current assets

Net property, plant and equipment, and finance lease
Goodwill
Intangible assets
Right-of-use assets
Other assets
Non-current assets held for sale

Total assets

Revolving credit facilities
Last out term loans
Accounts payable
Accrued employee benefits
Advance billings on contracts
Accrued warranty expense
Operating lease liabilities
Other accrued liabilities
Current liabilities held for sale
Total current liabilities

Revolving credit facilities
Last out term loans
Pension and other accumulated postretirement benefit liabilities
Non-current finance lease liabilities
Non-current operating lease liabilities
Other non-current liabilities

Total liabilities
Commitments and contingencies
Stockholders' deficit:

Common stock, par value $0.01 per share, authorized shares of 500,000; issued and outstanding shares of 54,452
and 46,374 at December 31, 2020 and 2019, respectively
Capital in excess of par value
Treasury stock at cost, 718 and 616 shares at December 31, 2020 and 2019, respectively
Accumulated deficit
Accumulated other comprehensive income (loss)

Stockholders' deficit attributable to shareholders

Non-controlling interest

Total stockholders' deficit
Total liabilities and stockholders' deficit

See accompanying notes to Consolidated Financial Statements.

57,338 $
10,085
128,317
35,442
59,308
67,161
26,421
4,728
388,800
85,078
47,363
23,908
10,814
24,673
11,156
591,792 $

— $
—
73,481
13,906
64,002
25,399
3,995
81,744
8,305
270,832
164,300
183,330
252,292
29,690
7,031
22,579
930,054

43,772
13,169
142,201
23,263
91,579
63,103
27,044
8,089
412,220
97,053
47,160
25,300
12,498
24,966
7,322
626,519

179,000
103,953
109,913
18,256
75,287
33,376
4,323
68,848
9,538
602,494
—
—
259,272
30,454
8,388
20,850
921,458

4,784
1,164,436
(105,990)
(1,350,206)
(52,390)
(339,366)
1,104
(338,262)
591,792 $

4,699
1,142,614
(105,707)
(1,339,888)
1,926
(296,356)
1,417
(294,939)
626,519

BABCOCK & WILCOX ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT) EQUITY

Common Stock

(1)

Par Value

Capital In
Excess of
Par Value

Treasury Stock

Accumulated Deficit

Accumulated
Other
Comprehensive
(Loss) Income

Non-controlling
Interest

Total
Stockholders’
Deficit

Balance at January 1, 2018

16,879 $

1,748 $

1,047,062 $

(in thousands, except share and per share amounts)
(1,217,914) $

(105,590) $

(11,432) $

8,829 $

(277,297)

Net loss
Currency translation adjustments
Derivative financial instruments
Defined benefit obligations
Stock-based compensation
Rights offering, net
Last Out Term Loan principal value
exchanged for common stock
Issuance of beneficial conversion option of
Last Out Term Loan Tranche A-3
Warrants
Dividends to non-controlling interest
Balance at December 31, 2019

Net (loss) income
Currency translation adjustments
Defined benefit obligations
Stock-based compensation
Equitized guarantee fee payment
Equitized Last Out Term Loan interest
payment
Dividends to non-controlling interest
Balance at December 31, 2020

—
—
—
—
108
13,922

15,465

—
—
—
—
12
1,392

1,547

—

—
—
46,374 $

—
—
4,699 $

—
—
—
460
1,713

5,905

—

54,452 $

—
—
—
9
17

—
4,784 $

—
—
—
—
3,072
39,544

44,848

2,022

6,066
—

—
—
—
—
(117)
—

—

—
—

(121,974)
—
—
—
—
—

—

—
—

1,142,614 $

(105,707) $

(1,339,888) $

—
16,577
(1,362)
(1,857)
—
—

—

(7,065)
(75)
—
—
—
—

—

—
—
1,926 $

—
(272)
1,417 $

—
—
—
4,548
3,883

13,391

—

—
—
—
(283)
—

—

(10,318)
—
—
—
—

—

—
(53,318)
(998)
—
—

—

1,164,436 $

(105,990) $

(1,350,206) $

(52,390) $

21
8
—
—
—

—

(342)
1,104 $

(342)
(338,262)

(129,039)
16,502
(1,362)
(1,857)
2,967
40,936

46,395

2,022

6,066
(272)
(294,939)

(10,297)
(53,310)
(998)
4,274
3,900

13,450

(1)

Issued and outstanding common shares and treasury stock shares reflect the one-for-ten reverse stock split on July 24, 2019 as described in Note 1.

See accompanying notes to Consolidated Financial Statements.

BABCOCK & WILCOX ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)
Cash flows from operating activities:

Net loss
Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization of long-lived assets
Amortization of deferred financing costs, debt discount and payment-in-kind interest
Amortization of guaranty fee
Non-cash operating lease expense
Loss on sale of business
Loss on debt extinguishment
Gains on asset disposals
Provision for (benefit from) deferred income taxes, including valuation allowances
Mark to market (gains) losses and prior service cost amortization for pension and postretirement plans
Stock-based compensation, net of associated income taxes
Equitized non-cash interest expense
Foreign exchange

Changes in assets and liabilities:

Accounts receivable
Contracts in progress
Advance billings on contracts
Inventories
Income taxes
Accounts payable
Accrued and other current liabilities
Accrued contract loss
Pension liabilities, accrued postretirement benefits and employee benefits
Other, net

Net cash used in operating activities

Cash flows from investing activities:

Purchase of property, plant and equipment
Proceeds from sale of business
Purchases of available-for-sale securities
Sales and maturities of available-for-sale securities
Other, net

Net cash from investing activities

Year ended December 31,

2020

2019

(10,297) $

(129,039)

16,805
16,743
1,159
4,765
108
6,194
(3,262)
1,791
22,156
4,557
13,450
(58,799)

21,673
35,850
(13,057)
(4,084)
(2,425)
(42,001)
9,146
(5,557)
(37,223)
(18,498)
(40,806)

(8,230)
8,000
(29,068)
26,563
4,954
2,219

23,605
61,181
—
5,356
3,601
3,969
(3,940)
(855)
(10,661)
3,084
—
16,602

63,914
48,492
(71,268)
(4,141)
1,273
(80,459)
(23,101)
(50,654)
(16,346)
(16,930)
(176,317)

(3,804)
7,445
(8,914)
11,547
2,505
8,779

(in thousands)
Cash flows from financing activities:

Borrowings under our U.S. revolving credit facility
Repayments of our U.S. revolving credit facility
Borrowings under Last Out Term Loans
Repayments under Last Out Term Loans
Repayments under our foreign revolving credit facilities
Shares of our common stock returned to treasury stock
Proceeds from rights offering
Costs related to rights offering
Debt issuance costs
Issuance of common stock
Other, net

Net cash from financing activities

Effects of exchange rate changes on cash
Net increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of period
Cash, cash equivalents and restricted cash, end of period

See accompanying notes to Consolidated Financial Statements.

Year ended December 31,

2020

2019

158,900
(173,600)
70,000
—
—
(283)
—
—
(10,590)
—
(329)
44,098
4,971
10,482
56,941
67,423 $

291,600
(257,500)
151,350
(41,766)
(605)
(117)
40,376
(832)
(16,619)
1,392
(261)
167,018
(2,818)
(3,338)
60,279
56,941

BABCOCK & WILCOX ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2020

NOTE 1 – BASIS OF PRESENTATION

The 2020 and 2019 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 and Securities and Exchange Commission (“SEC”). We have
eliminated all intercompany transactions and accounts. We present the notes to our Consolidated Financial Statements on the basis of continuing operations, unless
otherwise stated.

Recent Developments

In February and March 2021, we entered into a series of agreements and completed a series of financing transactions including the following:

•

on February 8, 2021, we entered into A&R Amendment No. 2 with Bank of America. A&R Amendment No. 2, among other matters, (i) permits the
issuance of senior notes, (ii) permits the deemed prepayment of $35 million of our Tranche A term loan with $35 million principal amount of senior notes,
(iii) provides that 75% of the senior notes gross proceeds shall be used to repay outstanding borrowings and permanently reduce the commitments under
our senior secured credit facilities, and (iv) provide that $5 million of certain previously deferred facility fees will be paid by the Company;
on February 12, 2021, we entered into a letter agreement (the “Exchange Agreement”) with B. Riley Financial, Inc. (“B. Riley”), a related party, pursuant
to which we agreed to issue to B. Riley $35 million aggregate principal amount of Senior Notes in exchange for a deemed prepayment of $35 million of
our existing Tranche A term loan with B. Riley. On February 12, 2021, we issued $35 million of senior notes to B. Riley in exchange for a deemed
prepayment of our existing Last Out Term Loan' Tranche A-6. The interest rate on the remaining Last Out Term Loan Tranche A balances has been
reduced to 6.625% from 12.0%;
on February 12, 2021, we received gross proceeds of approximately $172.5 million after closing a public offering of our common stock in which
29,487,180 shares of common stock were issued, inclusive of 3,846,154 shares issued to B. Riley Securities, Inc., a related party, as representative of
several underwriters to the common stock offering. Net proceeds received were approximately $163 million after deducting underwriting discounts and
commissions, but before expenses;
on February 12, 2021, we received gross proceeds of approximately $125 million after completing an issuances of our 8.125% Senior Notes due 2026
from a public offering of $120 million and $5 million of the senior notes issued to B. Riley Securities, Inc., a related party, as representative of several
underwriters to the senior notes offering. Net proceeds received were approximately $120 million after deducting underwriting discounts and
commissions, but before expenses;
on March 4, 2021, we entered into A&R Amendment No. 3 with Bank of America. A&R Amendment No. 3, among other matters, at the date of
effectiveness (i) permits the prepayment of certain term loans, (ii) reduces the revolving credit commitments to $130 million and removes the ability to
obtain revolving loans under the credit agreement, and (iii) amends certain covenants and conditions to the extension of credit; and
on March 4, 2021, effective with the execution of A&R Amendment No. 3, we paid $75 million towards our existing Last Out Term Loans and paid
$21.8 million of accrued and deferred fees related to the revolving credit facility.

For further information, see Note 25 to our Consolidated Financial Statements.

COVID-19

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 begin in 2020 to be delayed into 2021 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 2021 and beyond. Additionally, out of concern
for our employees, even where restrictions permit employees to return to our offices and worksites, we have incurred additional costs to protect our employees as
well as, advising 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 COVID-19 impact 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, as well as the availability and effectiveness of COVID-19 vaccinations in the U.S. and abroad, all of which are uncertain,
out of our control, and cannot be predicted.

•
•
•
•
•

•
•
•

temporary unpaid furloughs of certain employees;
temporarily deferral of 50% of the monthly fee paid to BRPI Executive Consulting, LLC for the services of our Chief Executive Officer;
deferrals of 30% of the base salaries of our Chief Financial Officer and Chief Operating Officer, and 50% of our previous Chief Strategy Officer;
suspension of our 401(k) company match for U.S. employees for 2020 and for 2021 as of the issuance date of these financial statements;
approval by the Company’s Board for a temporary deferral of 50% of the cash compensation payable to non-employee directors under the Company’s
board compensation program paid during the first quarter of 2021;
temporary rent payment deferrals related to leased facilities located in the U.S., Canada, Italy and Denmark;
utilizing options for government loans and programs in the U.S. and abroad that are appropriate and available; and
deferring, in accordance with the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law in March 2020, the Pension
Plan contribution payments of $5.5 million each for the 2020 Plan year that would have been made on April 15, 2020, July 15, 2020 and October 15,
2020, respectively. In addition, we elected to defer the contribution payments of $1.1 million for the 2018 Plan year and $23.7 million for the 2019 Plan
year that were both due on September 15, 2020. Per the 2019 Plan year waiver received on October 1, 2020, the $23.7 million deferred for the 2019 Plan
year will now be funded over the next five years.

NOTE 2– SIGNIFICANT ACCOUNTING POLICIES

Reportable segments

Our operations are assessed based on three reportable segments which changed during our third quarter of 2020 as part of our strategic, market-focused
organizational and re-branding initiative to accelerate growth and provide stakeholders improved visibility into our renewable and environmental growth platforms.
Our reportable segments are as follows:

•

B&W Renewable segment: cost-effective technologies for efficient and environmentally sustainable power and heat generation, including waste-to-energy,
biomass energy and black liquor systems for the pulp and paper industry. The segment'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.
B&W Environmental segment: full suite of best-in-class emissions control and environmental technology solutions for utility and industrial steam
generation applications around the world. The segment'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.
B&W Thermal segment: steam generation equipment, aftermarket parts, construction, maintenance and field services for plants in the power generation,
oil and gas, and industrial sectors. The segment has an extensive global base of installed equipment for utilities and general industrial applications
including refining, petrochemical, food processing, metals and others.

For financial information about our segments see Note 4 to our Consolidated Financial Statements.

Use of estimates

We use estimates and assumptions to prepare our Consolidated Financial Statements in conformity with GAAP. Some of our more significant estimates include our
estimate of costs to complete long-term construction contracts, estimates associated with assessing whether goodwill and other long-lived assets are impaired,
estimates of costs to be incurred to satisfy contractual warranty requirements, estimates of the value of acquired intangible and tangible assets, estimates associated
with the realizability of deferred tax assets, and estimates we make in selecting assumptions related to the valuations of our pension and postretirement plans,
including the selection of our discount rates, mortality and expected rates of return on our pension plan assets. These estimates and assumptions affect the amounts
we report in our Consolidated Financial Statements and accompanying notes. Our actual results could differ from these estimates. Variances could result in a
material effect on our financial condition and results of operations in future periods.

Earnings per share

We have computed earnings per common share on the basis of the weighted average number of common shares, and, where dilutive, common share equivalents,
outstanding during the indicated periods. The weighted average shares used to calculate basic and diluted earnings per share reflect the bonus element for the 2019
Rights Offering on July 23, 2019 and the one-for-ten reverse stock split on July 24, 2019. We have a number of forms of stock-based compensation, including
incentive and non-qualified stock options, restricted stock, restricted stock units, performance shares, and performance units, subject to satisfaction of specific
performance goals. We include the shares applicable to these plans in dilutive earnings per share when related performance criteria have been met. The
computation of basic and diluted earnings per share is included in Note 3.

Investments

Our investments primarily relate to our wholly owned insurance subsidiary. We classify investments available for current operations in the Consolidated Balance
Sheets as current assets, while we classify investments held for long-term purposes as non-current assets. We adjust the amortized cost of debt securities for
amortization of premiums and accretion of discounts to maturity. That amortization is included in interest income. We include realized gains and losses on our
investments in other - net in our Consolidated Statements of Operations. The cost of securities sold is based on the specific identification method. We include
interest on securities in interest income.

Foreign currency translation

We translate assets and liabilities of our foreign operations into U.S. 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 income. We have included transaction gains of $58.8
million and losses of $16.6 million in the years ended December 31, 2020 and 2019, respectively, in foreign exchange in our Consolidated Statements of
Operations. These foreign exchange net gains and losses are primarily related to transaction gains or losses from unhedged intercompany loans when the loan is
denominated in a currency different than the participating entity's functional currency. Certain reclassifications have been made to the 2019 balances related to
foreign currency gains and losses in the Consolidated Statements of Cash Flows to conform to the current year presentation.

Revenue recognition

A performance obligation is a contractual promise to transfer a distinct good or service to the customer. A contract's transaction price is allocated to each distinct
performance obligation and is recognized as revenue when (point in time) or as (over time) the performance obligation is satisfied.

Revenue from goods and services transferred to customers at a point in time, which includes certain aftermarket parts and services, accounted for 29% and 21% of
our revenue for the years ended December 31, 2020 and 2019, respectively. Revenue on these contracts is recognized when the customer obtains control of the
asset, which is generally upon shipment or delivery and acceptance by the customer. Standard commercial payment terms generally apply to these sales.

Revenue from products and services transferred to customers over time accounted for 71% and 79% of our revenue for the years ended December 31, 2020 and
2019, respectively. Revenue recognized over time primarily relates to customized, engineered solutions and construction services. Typically, revenue is recognized
over time using the cost-to-cost input method that uses costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying
our performance obligations. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the

transfer of control to the customer. Contract costs include labor, material, overhead and, when appropriate, SG&A expenses. Variable consideration in these
contracts includes estimates of liquidated damages, contractual bonuses and penalties, and contract modifications. Substantially all of our revenue recognized over
time under the cost-to-cost input method contains a single performance obligation as the interdependent nature of the goods and services provided prevents them
from being separately identifiable within the contract. Generally, we try to structure contract milestones to mirror our expected cash outflows over the course of the
contract; however, the timing of milestone receipts can greatly affect our overall cash position. Refer to Note 4 for our disaggregation of revenue by product line.

As of December 31, 2020, we have estimated the costs to complete of all our in-process contracts in order to estimate revenues using a cost-to-cost input method.
However, it is possible that current estimates could change due to unforeseen events, which could result in adjustments to overall contract costs. The risk on fixed-
priced contracts is that revenue from the customer does not cover increases in our costs. It is possible that current estimates could materially change for various
reasons, including, but not limited to, fluctuations in forecasted labor productivity, transportation, fluctuations in foreign exchange rates or steel and other raw
material prices. Increases in costs on our fixed-price contracts could have a material adverse impact on our consolidated financial condition, results of operations
and cash flows. Alternatively, reductions in overall contract costs at completion could materially improve our consolidated financial condition, results of operations
and cash flows. Variations from estimated contract performance could result in material adjustments to operating results for any fiscal quarter or year.

We recognize accrued claims in contract revenues for extra work or changes in scope of work to the extent of costs incurred when we believe we have an
enforceable right to the modification or claim and the amount can be estimated reliably, and its realization is probable. In evaluating these criteria, we consider the
contractual/legal basis for enforcing the claim, the cause of any additional costs incurred and whether those costs are identifiable or otherwise determinable, the
nature and reasonableness of those costs, the objective evidence available to support the amount of the claim, and our relevant history with the counter-party that
supports our expectations about their willingness and ability to pay for the additional cost along with a reasonable margin.

We generally recognize sales commissions in equal proportion as revenue is recognized. Our sales agreements are structured such that commissions are only
payable upon receipt of payment, thus a capitalized asset at contract inception has not been recorded for sales commission as a liability has not been incurred at that
point.

Contract balances

Contracts in progress, a current asset in our Consolidated Balance Sheets, includes revenues and related costs so recorded, plus accumulated contract costs that
exceed amounts invoiced to customers under the terms of the contracts. Advance billings, a current liability in our Consolidated Balance Sheets, includes advance
billings on contracts invoices that exceed accumulated contract costs and revenues and costs recognized under the cost-to-cost input method. Those balances are
classified as current based on the life cycle of the associated contracts. Most long-term contracts contain provisions for progress payments. Our unbilled receivables
do not contain an allowance for credit losses as we expect to invoice customers and the collection of all amounts for unbilled revenues is deemed probable. We
review contract price and cost estimates each reporting period as the work progresses and reflect adjustments proportionate to the costs incurred to date relative to
total estimated costs at completion in income in the period when those estimates are revised. For all contracts, if a current estimate of total contract cost indicates a
loss on a contract, the projected contract loss is recognized in full through the statement of operations and an accrual for the estimated loss on the uncompleted
contract is included in other accrued liabilities in the Consolidated Balance Sheets. In addition, when we determine that an uncompleted contract will not be
completed on-time and the contract has liquidated damages provisions, we recognize the estimated liquidated damages at the most likely amount we will incur and
record them as a reduction of the estimated selling price in the period the change in estimate occurs. Losses accrued in advance of the completion of a contract are
included in other accrued liabilities in our Consolidated Balance Sheets.

Warranty expense

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.

Research and development

Our research and development activities are related to improving our products through innovations to reduce the cost of our products to make them more
competitive and through innovations to reduce performance risk of our products to better meet our and our customers' expectations. Research and development
activities totaled $4.4 million and $2.9 million in the years ended December 31, 2020 and 2019, respectively.

Advertising expense

Advertising expense is charged when incurred and is included in selling, general and administrative expenses on our Consolidated Statements of Operations.
Advertising expenses in the years ended December 31, 2020 and 2019 were not significant.

Pension plans and postretirement benefits

We sponsor various defined benefit pension and postretirement plans covering certain employees of our U.S., Canadian and U.K. subsidiaries. We use actuarial
valuations to calculate the cost and benefit obligations of our pension and postretirement benefits. The actuarial valuations use significant assumptions in the
determination of our benefit cost and obligations, including assumptions regarding discount rates, expected returns on plan assets, mortality and health care cost
trends.

We determine our discount rate based on a review of published financial data and discussions with our actuary regarding rates of return on high-quality, fixed-
income investments currently available and expected to be available during the period to maturity of our pension and postretirement plan obligations. We use an
alternative spot rate method for discounting the benefit obligation rather than a single equivalent discount rate because it more accurately applies each year's spot
rates to the projected cash flows.

The components of benefit cost related to service cost, interest cost, expected return on plan assets and prior service cost amortization are recorded on a quarterly
basis based on actuarial assumptions. In the fourth quarter of each year, or as interim remeasurements are required, we recognize net actuarial gains and losses into
earnings as a component of net periodic benefit cost (mark to market (“MTM”) pension adjustment). Recognized net actuarial gains and losses consist primarily of
our reported actuarial gains and losses and the difference between the actual return on plan assets and the expected return on plan assets.

We recognize the funded status of each plan as either an asset or a liability in the Consolidated Balance Sheets. The funded status is the difference between the fair
value of plan assets and the present value of its benefit obligation, determined on a plan-by-plan basis. See Note 13 for a detailed description of our plan assets.

Income taxes

Income tax expense for federal, foreign, state and local income taxes are calculated on taxable income based on the income tax law in effect at the latest balance
sheet date and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. We record a
valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. We assess the need for a valuation allowance on a
quarterly basis. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a
greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income
tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in our Consolidated Financial Statements.
We record interest and penalties (net of any applicable tax benefit) related to income taxes as a component of income tax expense on our Consolidated Statements
of Operations.

Cash and cash equivalents and restricted cash

Our cash equivalents are highly liquid investments, with maturities of three months or less when we purchase them. We record cash and cash equivalents as
restricted when we are unable to freely use such cash and cash equivalents for our general operating purposes.

Trade accounts receivable and allowance for doubtful accounts

Our trade accounts receivable balance is stated at the amount owed by our customers, net of allowances for estimated uncollectible balances. We maintain
allowances for doubtful accounts for estimated losses expected to result from the inability of our customers to make required payments. These estimates are based
on management's evaluation of the ability of customers to make payments, with emphasis on historical remittance experience, known customer financial
difficulties, the age of receivable balances and any other known factors specific to a receivable. Accounts receivable are charged to the allowance when it is
determined they are no longer collectible. Our allowance for doubtful accounts was $17.2 million and $25.1 million at December 31, 2020 and 2019, respectively.
Amounts charged to selling, general and administrative expenses were $(0.2) million and $0.2 million for the years ended December 31, 2020 and 2019,
respectively.

Inventories

We carry our inventories at the lower of cost or market. We determine cost principally on the first-in, first-out basis, except for certain materials inventories of our
B&W Thermal segment, where we use the last-in, first-out (“LIFO”) method. We determined the cost of approximately 20% of our total inventories using the
LIFO method at December 31, 2020 and 2019, and our total LIFO reserve at December 31, 2020 and 2019 was approximately $7.3 million and $7.2 million,
respectively. Our obsolete inventory reserve was $7.1 million and $6.9 million at December 31, 2020 and 2019, respectively. The components of inventories can be
found in Note 6.

Property, plant and equipment

We carry our property, plant and equipment at depreciated cost, less any impairment provisions. We depreciate our property, plant and equipment using the
straight-line method over estimated economic useful lives of eight to 33 years for buildings and three to 28 years for machinery and equipment. Our depreciation
expense was $11.3 million and $19.3 million for the years ended December 31, 2020 and 2019, respectively. We expense the costs of maintenance, repairs and
renewals that do not materially prolong the useful life of an asset as we incur them.

Property, plant and equipment amounts are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset, or
asset group, may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future
cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of
the asset carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. Our estimates of cash flow may differ from
actual cash flow due to, among other things, technological changes, economic conditions or changes in operating performance. Any changes in such factors may
negatively affect our business and result in future asset impairments.

Investments in unconsolidated joint ventures

We use the equity method of accounting for investments in joint ventures in which we are able to exert significant influence, but not control. Joint ventures in
which our investment ownership is less than 20% and where we are unable to exert significant influence are carried at cost. We assess our investments in
unconsolidated joint ventures for other-than-temporary-impairment when significant changes occur in the investee's business or our investment philosophy. Such
changes might include a series of operating losses incurred by the investee that are deemed other-than-temporary, the inability of the investee to sustain an earnings
capacity that would justify the carrying amount of the investment or a change in the strategic reasons that were important when we originally entered into the joint
venture. If an other-than-temporary-impairment were to occur, we would measure our investment in the unconsolidated joint venture at fair value.

Investments in consolidated joint ventures

SPIG maintains a 60% ownership interest in a joint venture entity, which is consolidated into the B&W Environmental segment results.

Goodwill

Goodwill represents the excess of the cost of our acquired businesses over the fair value of the net assets acquired. We perform testing of goodwill for impairment
annually or when impairment indicators are present. We may elect to perform a qualitative test when we believe that there is substantially in excess fair value over
carrying value based on our most recent

quantitative assessment, adjusted for relevant events and circumstances that could affect fair value during the current year. If we conclude based on this assessment
that it is more likely than not that the reporting unit is not impaired, we do not perform a quantitative impairment test. In all other circumstances, we perform a
quantitative impairment test to identify potential goodwill impairment and measure the amount of any goodwill impairment. Goodwill impairment tests recognize
impairment for the amount that the carrying value of a reporting unit exceeds its fair value up to the remaining amount of goodwill.

Intangible assets

Intangible assets are recognized at fair value when acquired. Intangible assets with definite lives are amortized to operating expense using the straight-line method
over their estimated useful lives and tested for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable.
Intangible assets with indefinite lives are not amortized and are subject to impairment testing at least annually or in interim periods when impairment indicators are
present. We may elect to perform a qualitative assessment when testing indefinite lived intangible assets for impairment to determine whether events or
circumstances affecting significant inputs related to the most recent quantitative evaluation have occurred, indicating that it is more likely than not that the
indefinite lived intangible asset is impaired. Otherwise, we test indefinite lived intangible assets for impairment by determining the fair value of the indefinite lived
intangible asset and comparing the fair value of the intangible asset to its carrying amount. If the carrying amount of the intangible asset exceeds its fair value, we
recognize impairment for the amount of the difference.

Derivative financial instruments

Derivative assets and liabilities usually consist of FX forward contracts. Where applicable, the value of these derivative assets and liabilities is computed by
discounting the projected future cash flow amounts to present value using market-based observable inputs, including FX forward and spot rates, interest rates and
counterparty performance risk adjustments. As of December 31, 2020, we do not hold any derivative assets or liabilities; the last of our derivative contracts were
sold during the first quarter of 2019.

Self-insurance

We have a wholly owned insurance subsidiary that provides employer's liability, general and automotive liability and workers' compensation insurance and, from
time to time, builder's risk insurance (within certain limits) to our companies. We may also, in the future, have this insurance subsidiary accept other risks that we
cannot or do not wish to transfer to outside insurance companies. Included in other non-current liabilities on our Consolidated Balance Sheets are reserves for self-
insurance totaling $11.6 million and $15.7 million as of December 31, 2020 and 2019, respectively.

Loss contingencies

We estimate liabilities for loss contingencies when it is probable that a liability has been incurred and the amount of loss is reasonably estimable. We provide
disclosure when there is a reasonable possibility that the ultimate loss will exceed the recorded provision or if such probable loss is not reasonably estimable. We
are currently involved in some significant litigation, as discussed in Note 19. Our losses are typically resolved over long periods of time and are often difficult to
assess and estimate due to, among other reasons, the possibility of multiple actions by third parties; the attribution of damages, if any, among multiple defendants;
plaintiffs, in most cases involving personal injury claims, do not specify the amount of damages claimed; the discovery process may take multiple years to
complete; during the litigation process, it is common to have multiple complex unresolved procedural and substantive issues; the potential availability of insurance
and indemnity coverages; the wide-ranging outcomes reached in similar cases, including the variety of damages awarded; the likelihood of settlements for de
minimis amounts prior to trial; the likelihood of success at trial; and the likelihood of success on appeal. Consequently, it is possible future earnings could be
affected by changes in our assessments of the probability that a loss has been incurred in a material pending litigation against us and/or changes in our estimates
related to such matters.

Loss recoveries

We recognize loss recoveries and provide disclosures only when receipt of the recovery is probable and we are able to reasonably estimate the amount of the
recovery. Our loss recoveries are typically resolved over long periods of time and are often difficult to assess and estimate due to, among other reasons, the
possibility of multiple actions by third parties, multiple complex unresolved procedural and substantive issues; the wide-ranging outcomes reached in similar cases,
including the variety of losses incurred. Consequently, it is possible future earnings could be affected by changes in our assessments of the probability that a loss
recovery has been recognized and/or changes in our estimates related to such matters. See Note 5 for discussion regarding the loss recovery recognized in 2020 and
2019.

Stock-based compensation

The fair value of equity-classified awards, such as restricted stock, performance shares and stock options, is determined on the date of grant and is not remeasured.
The fair value of liability-classified awards, such as cash-settled stock appreciation rights, restricted stock units and performance units, is determined on the date of
grant and is remeasured at the end of each reporting period through the date of settlement. Fair values for restricted stock, restricted stock units, performance shares
and performance units are determined using the closing price of our common stock on the date of grant. Fair values for stock options are determined using a Black-
Scholes option-pricing model (“Black-Scholes”). For performance shares or units that contain a Relative Total Shareholder Return vesting criteria and for stock
appreciation rights, we utilize a Monte Carlo simulation to determine the fair value, which determines the probability of satisfying the market condition included in
the award. The determination of the fair value of a share-based payment award using an option-pricing model or a Monte Carlo simulation requires the input of
significant assumptions, such as the expected life of the award and stock price volatility.

We recognize expense for all stock-based awards granted on a straight-line basis over the requisite service periods of the awards, which is generally equivalent to
the vesting term. For liability-classified awards, changes in fair value are recognized through cumulative catch-ups each period. Excess tax benefits on stock-based
compensation are to be presented as a financing cash flow, rather than as a reduction of taxes paid. These excess tax benefits result from tax deductions in excess of
the cumulative compensation expense recognized for options exercised and other equity-classified awards. See Note 17 for further discussion of stock-based
compensation.

Recently adopted accounting standards

Effective January 1, 2020, we adopted ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for
Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The new guidance requires companies acting as the customer in a
cloud hosting service arrangement to follow the requirements of ASC 350-40 for capitalizing implementation costs for internal-use software and requires the
amortization of these costs over the life of the related service contract. The impact of this standard on our consolidated financial statements was immaterial.

NOTE 3 – EARNINGS (LOSS) 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:

(in thousands, except per share amounts)
Loss from continuing operations
Income from discontinued operations, net of tax

Net loss attributable to stockholders

Weighted average shares used to calculate basic and diluted earnings per share

Basic and diluted (loss) earnings per share:

Continuing operations
Discontinued operations

Basic and diluted loss per share

Year ended December 31,

2020

2019

(12,118) $
1,800
(10,318) $

(122,668)
694
(121,974)

48,710

31,514

(0.25) $
0.04
(0.21) $

(3.89)
0.02
(3.87)

In July 2019, the Company completed a rights offering to existing common stockholders (the “2019 Rights Offering”). Because the rights issuance was offered to
all existing stockholders at an exercise price that was less than the fair value of our Common Stock, as of such time, the weighted average shares outstanding and
basic and diluted earnings (loss) per share were adjusted retroactively to reflect the bonus element of the rights offering for all periods presented by a factor of
1.0875. Weighted average shares, prior to giving effect to the 2019 Rights Offering, in 2019 were 11,635 thousand.

Because we incurred a net loss in the years ended December 31, 2020 and 2019, respectively basic and diluted shares are the same. If we had net income in years
ended December 31, 2020 and 2019 diluted shares would include an additional 610.9 thousand and 150.0 thousand shares, respectively.

We excluded 1.3 million and 0.3 million shares related to stock options from the diluted share calculation for the years ended December 31, 2020 and 2019,
respectively, because their effect would have been anti-dilutive.

NOTE 4 – SEGMENT REPORTING

Effective September 30, 2020 as part of our strategic, market-focused organizational and re-branding initiative to accelerate growth and provide stakeholders
improved visibility into our renewable and environmental growth platforms, we realigned certain businesses and management structure to recognize how we
allocate resources and analyze the operating performance of our businesses. This realignment changed our reportable segments beginning with our third quarter of
2020. All periods have been recast to reflect this change. Our operations are assessed based on three reportable segments as described in Note 2. Revenues exclude
eliminations of revenues generated from sales to other segments or to other product lines within the segment. An analysis of our operations by segment is as
follows:

(in thousands)
Revenues:

B&W Renewable segment
B&W Renewable
Vølund

B&W Environmental segment
B&W Environmental
SPIG
BWV-AB

B&W Thermal segment
B&W Thermal

Eliminations

Year ended December 31,

2020

2019

89,790 $
66,397
156,187

45,186
52,341
10,441
107,968

304,968
304,968

(2,806)
566,317 $

94,119
111,432
205,551

184,477
80,729
10,429
275,635

409,744
409,744

(31,819)
859,111

Adjusted EBITDA for each segment is presented below with a reconciliation to net loss attributable to stockholders.

(in thousands)
Adjusted EBITDA

(1)(2)

B&W Renewable segment
B&W Environmental segment
B&W Thermal segment
Corporate
Research and development costs

(3)

Restructuring activities
Financial advisory services
Settlement cost to exit Vølund contract
Advisory fees for settlement costs and liquidity planning
Litigation fees and settlement
Loss on business held for sale
Stock compensation
Interest on letters of credit included in cost of operations
Depreciation & amortization
Loss from a non-strategic business
Gain on asset disposals, net
Operating loss

Interest expense, net
Loss on debt extinguishment
Loss on sale of business
Net pension benefit before MTM
MTM (loss) gain from benefit plans
Foreign exchange
Other – net

Total other expense

Loss before income tax expense

Income tax expense

Loss from continuing operations

Income from discontinued operations, net of tax

Net loss

Net (income) loss attributable to non-controlling interest
Net loss attributable to stockholders

Year ended December 31,

2020

2019

24,957 $
3,474
35,435
(14,425)
(4,379)
45,062

(11,849)
(4,384)
—
(6,357)
(2,137)
(467)
(4,587)
(917)
(16,805)
(2,559)
3,263
(1,737)
(59,150)
(6,194)
(108)
28,754
(23,154)
58,799
(1,128)
(2,181)
(3,918)
8,179
(12,097)
1,800
(10,297)
(21)

(10,318) $

1,617
12,512
51,353
(17,579)
(2,861)
45,042

(11,707)
(9,069)
(6,575)
(11,824)
(475)
(5,850)
(3,376)
(365)
(23,605)
(5,518)
3,940
(29,382)
(93,978)
(3,969)
(3,601)
13,996
8,804
(16,602)
285
(95,065)
(124,447)
5,286
(129,733)
694
(129,039)
7,065
(121,974)

(1)

(2)

(3)

During the year ended December 31, 2020, we redefined our definition of adjusted EBITDA to eliminate the effects of certain items including loss from a non-strategic business, interest on
letters of credit included in cost of operations and loss on business held for sale. Consequently, adjusted EBITDA in prior periods have been revised to conform with the revised definition and
present separate reconciling items in our reconciliation.
Adjusted EBITDA for the year ended December 31, 2020, includes the recognition of a $26.0 million loss recovery settlement related to certain historical EPC loss contracts in the third
quarter.
In March 2019, we entered into a settlement in connection with an additional B&W Renewable waste-to-energy EPC contract, for which notice to proceed was not given and the contract was
not started. The settlement eliminated our obligations to act, and our risk related to acting, as the prime EPC should the project have moved forward.

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

Information about our consolidated operations in different geographic areas

(in thousands)
REVENUES

(1)

United States
Canada
Denmark
United Kingdom
Indonesia
Sweden
China
Finland
South Korea
Aggregate of all other countries, each with less than $10 million in revenues

(1)

We allocate geographic revenues based on the location of the customer's operations.

(in thousands)
NET PROPERTY, PLANT AND EQUIPMENT, AND FINANCE LEASE

United States
Mexico
Denmark
United Kingdom
China
Aggregate of all other countries

NOTE 5 – REVENUE RECOGNITION AND CONTRACTS

Revenue Recognition

Year ended December 31,

2020

2019

310,958 $
43,936
28,590
25,811
19,644
11,430
8,461
6,606
4,050
106,831
566,317 $

Year ended December 31,

2020

2019

46,734 $
18,173
7,327
5,274
889
6,681
85,078 $

460,484
113,660
27,311
54,347
16,739
18,789
18,430
14,118
14,443
120,790
859,111

61,111
19,241
6,801
5,469
76
4,355
97,053

We generate the vast majority of our revenues from the supply of, and aftermarket services for, steam-generating, environmental and auxiliary equipment. We also
earn revenue from the supply of custom-engineered cooling systems for

steam applications along with related aftermarket services. Our revenue recognition accounting policy is described in more detail in Note 2.

Contract Balances

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

(in thousands)
Contract assets - included in contracts in progress:
Costs incurred less costs of revenue recognized
Revenues recognized less billings to customers

Contracts in progress

Contract liabilities - included in advance billings on contracts:

Billings to customers less revenues recognized
Costs of revenue recognized less cost incurred

Advance billings on contracts

Net contract balance

Accrued contract losses

The following amounts represent retainage on contracts:

(in thousands)
Retainage expected to be collected within one year
Retainage expected to be collected after one year
Total retainage

December 31, 2020 December 31, 2019

$ Change

% Change

25,888 $
33,420
59,308 $

61,884 $
2,118
64,002 $

29,877 $
61,702
91,579 $

76,468 $
(1,181)
75,287 $

(3,989)
(28,282)
(32,271)

(14,584)
3,299
(11,285)

(4,694) $

16,292 $

(20,986)

582 $

6,139 $

(5,557)

(13)%
(46)%
(35)%

(19)%
(279)%
(15)%

129 %

(91)%

December 31, 2020

December 31, 2019

$ Change

% Change

2,969 $
632
3,601 $

474 $

5,739
6,213 $

2,495
(5,107)
(2,612)

526 %
(89) %
(42) %

We have included retainage expected to be collected in 2020 in accounts receivable – trade, net in our Consolidated Balance Sheets. Retainage expected to be
collected after one year are included in other assets in our Consolidated Balance Sheets. Of the long-term retainage at December 31, 2020, we anticipate collecting
$0.6 million in 2022.

Backlog

On December 31, 2020 we had $535.0 million of remaining performance obligations, which we also refer to as total backlog. We expect to recognize
approximately 56.4%, 12.9% and 30.7% of our remaining performance obligations as revenue in 2021, 2022 and thereafter, respectively.

Changes in Contract Estimates

In the years ended December 31, 2020 and 2019, we recognized changes in estimated gross profit related to long-term contracts accounted for on the percentage-
of-completion basis, which are summarized as follows:

(in thousands)
Increases in gross profits for changes in estimates for over time contracts
Decreases in gross profits for changes in estimates for over time contracts

(1)

Net changes in gross profits for changes in estimates for over time contracts

Year ended December 31,

2020

2019

43,597 $
(17,480)
26,117 $

34,622
(50,050)
(15,428)

(1)

Increases in gross profits for changes in estimates for over time contracts reflects insurance loss recovery of $26.0 million in the year ended December 31, 2020.

B&W Renewable EPC Loss Contracts

We had six 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 had one remaining
extended scope contract in our B&W Renewable segment which turned into a loss contract in 2019.

In the years ended December 31, 2020 and 2019, we recorded $3.7 million and $6.9 million in net losses, respectively, inclusive of warranty expense as described
in Note 11, resulting from changes in the estimated revenues and costs to complete the six European B&W Renewable EPC loss contracts. We did not change our
estimate of liquidated damages in the year ended December 31, 2020. The changes in estimates in the year ended December 31, 2019 included increases in our
estimates of anticipated liquidated damages that reduced revenue associated with these six contracts by $1.8 million. Total anticipated liquidated damages
associated with these six contracts were $95.6 million and $86.8 million at December 31, 2020 and December 31, 2019, respectively.

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

As of December 31, 2020, the status of these six B&W Renewable EPC loss contracts was as follows:

•

The first contract, a waste-to-energy plant in Denmark, became a loss contract in 2016. As of December 31, 2020, this contract was approximately
100% complete and construction activities are complete as of the date of this report. The unit became operational during the second quarter of 2017. A
settlement was reached with the customer to achieve takeover on January 31, 2019, after which only punch list items and other agreed to remediation
items remain, most of which are expected to be performed during the customer's scheduled maintenance outages. As of January 31, 2019, the contract is
in the warranty phase. On January 15, 2021 we reached agreement with the customer to achieve final takeover which completes the base warranty period
and confirms the agreed to remaining remediation items. During the year ended December 31, 2020, we recognized additional contract losses of $2.7
million, inclusive of warranty. Our estimate at completion as of December 31, 2020 includes $9.8 million of total expected liquidated damages. As of
December 31, 2020, the reserve for estimated contract losses recorded in other accrued liabilities in our Consolidated Balance Sheets was $0.1 million. In
the year ended December 31, 2019, we recognized additional contract losses of $2.3 million as a result of identifying additional remediation costs. As of
December 31, 2019, this contract had $1.1 million of accrued losses and was approximately 99% complete.

The second contract, a biomass plant in the United Kingdom, became a loss contract in 2016. As of December 31, 2020, this contract was approximately
100% complete. Trial operations began in April 2019 and takeover by the customer occurred effective May 2019. This project is subject to the March 29,
2019 settlement agreement described above. During the year ended December 31, 2020, we recognized additional contract losses of $0.7 million on this
contract, inclusive of warranty, as a result of additional punch list and other commissioning costs. Our estimate at completion as of December 31, 2020
includes $20.6 million of total expected liquidated damages due to schedule delays. Our estimates at completion as of December 31, 2020 and 2019 also
include contractual bonus opportunities for guaranteed higher power output and other performance metrics. As of December 31, 2020, the reserve for
estimated contract losses recorded in other accrued liabilities in our Consolidated Balance Sheets was $0.1 million.

•

In the year ended December 31, 2019, we recognized contract losses of $2.3 million on this contract as a result of repairs required during startup
commissioning activities, additional expected punch list and other commissioning costs, and changes in construction cost estimates. As of December 31,
2019, this contract had no accrued losses and was approximately 100% complete.

The third contract, a biomass plant in Denmark, became a loss contract in 2016. As of December 31, 2020, this contract was approximately 100%
complete. Warranty began in March 2018, when we agreed to a partial takeover with the customer, and we agreed to a full takeover by the customer at the
end of October 2018, when we also agreed to a scheduled timeline for remaining punch list activities to be completed around the customer's future
planned outages. During the year ended December 31, 2020, we recognized additional contract losses of $1.1 million, inclusive of warranty. Our estimate
at completion as of December 31, 2020 includes $7.3 million of total expected liquidated damages due to schedule delays. As of December 31, 2020, we
expect no future charges due to this contract and, accordingly, we have no reserve for estimated contract losses. In the year ended December 31, 2019, we
recognized additional contract losses of $0.1 million as a result of changes in the estimated costs at completion. As of December 31, 2019, this contract
had no accrued losses and was approximately 100% complete.

The fourth contract, a biomass plant in the United Kingdom, became a loss contract in 2016. As of December 31, 2020, this contract was approximately
100% complete. Trial operations began in November 2018 and takeover by the customer occurred in February 2019, after which only final performance
testing, for which performance metrics have been previously demonstrated, and punch list and other agreed upon items remain, some of which are
expected to be performed during the customer's scheduled maintenance outages. During the year ended December 31, 2020, we recognized additional
contract losses of $1.1 million on this contract, inclusive of warranty, due to changes in cost to complete remaining punch list items and other close out
items. Our estimate at completion as of December 31, 2020 includes $22.5 million of total expected liquidated damages due to schedule delays. Our
estimates at completion as of December 31, 2020 also include contractual bonus opportunities for guaranteed higher power output and other performance
metrics. As of December 31, 2020, the reserve for estimated contract losses recorded in other accrued liabilities in our Consolidated Balance Sheets was
$0.1 million. In the year ended December 31, 2019, we recognized additional contract losses of $5.2 million on this contract due to changes in estimated
bonus revenue and cost to complete remaining punch list, remediation of certain performance guarantees and other close out items. As of December 31,
2019, this contract had $0.2 million of accrued losses and was approximately 100% complete.

The fifth contract, a biomass plant in the United Kingdom, became a loss contract in 2017. As of December 31, 2020, this contract was approximately
100% complete. This project is subject to the March 29, 2019 settlement agreement described above. We estimated the portion of this settlement related to
waiver of the rejection right on the fifth loss contract was $81.1 million, which was recorded in the fourth quarter of 2018 as a reduction in the selling
price. We continue to pursue claims against subcontractors. Under the settlement, our remaining performance obligations were limited to construction
support services to complete certain key systems of the plant by May 31, 2019. The settlement also eliminated all historical claims and remaining
liquidated damages. Remaining items at December 31, 2020 primarily related to subcontract close outs and other finalization items under the terms of the
settlement. During the year ended December 31, 2020, our estimated loss on the contract improved by $0.4 million. Our estimate at completion as of
December 31, 2020, includes $14.7 million of total expected liquidated damages due to schedule delays. Our estimates at completion as of December 31,
2020 also include contractual bonus opportunities for guaranteed higher power output and other performance metrics. As of December 31, 2020, we
expect no future charges due to this contract and, accordingly, we have no reserve for estimated contract losses. During the year ended December 31,
2019, our estimated loss on the contract improved by $5.6 million inclusive of warranty. As of December 31, 2019, this contract had $2.4 million of
accrued losses and was approximately 98% complete.

The sixth contract, a waste-to-energy plant in the United Kingdom, became a loss contract in 2017. As of December 31, 2020, this contract was
approximately 100% complete. The contract is in the warranty phase. During the year ended December 31, 2020, our estimated loss on the contract
improved by $1.5 million, inclusive of warranty. Our estimate at completion as of December 31, 2020 includes $20.6 million of total expected liquidated
damages due to schedule delays. As of December 31, 2020, we expect no future charges due to this contract and, accordingly, we have no reserve for
estimated contract losses. In the year ended December 31, 2019, we revised our revenue and costs at completion for this contract, which resulted in
additional contract losses of $2.5 million related to matters encountered in completing punch list items. As of December 31, 2019, this contract had $0.3
million of accrued losses and was approximately 99% complete.

In the fourth quarter of 2019, one of our other B&W Renewable energy contracts turned into a loss contract (estimate loss of $0.2 million) due to the extension of
time and other start-up costs associated with the completion of the trial operations run and turnover to the client. This contract was turned over to the client in
October 2019. During the years ended December 31, 2020 and 2019, we recognized additional charges of $2.5 million and $3.4 million, respectively, on this
contract.

In September 2017, we identified the failure of a structural steel beam on the fifth contract, which stopped work in the boiler building and other areas pending
corrective actions to stabilize the structure. Provisional regulatory approval to begin structural repairs to the failed beam was obtained on March 29, 2018 (later
than previously estimated), and full approval to proceed with repairs was obtained in April 2018. Full access to the site was obtained on June 6, 2018 after
completion of the repairs to the structure. The engineering, design and manufacturing of the steel structure were the responsibility of our subcontractors. A similar
design was also used on the second and fourth contracts, and although no structural failure occurred on these two other contracts, work was also stopped in certain
restricted areas while we added reinforcement to the structures, which also resulted in delays that lasted until late January 2018. The total costs related to the
structural steel issues on these three contracts, including contract delays, are estimated to be approximately $36 million, which is included in the December 31,
2020 estimated losses at completion for these three contracts. We continue to pursue recovery of this cost from responsible subcontractors. In June 2019, we agreed
in principle to a settlement agreement under one insurance policy related to recover GBP 2.8 million ($3.5 million) of certain losses on the fifth project; which our
insurer paid us in September 2019.

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
five of six European B&W Renewable EPC loss contracts disclosed above. We recognized this loss recovery of $26.0 million as a reduction of our Cost of
operations in our Consolidated Statements of Operations. On October 23, 2020, we received $26.0 million of gross proceeds under the settlement agreement. As
required by the Company’s U.S. Revolving Credit Facility, 50% of the net proceeds (gross proceeds less costs) or $8.0 million of the settlement received by the
Company was applied as a permanent reduction of the U.S. Revolving Credit Facility in October 2020.

The Company is continuing to pursue other potential loss recoveries and claims where appropriate and available.

Other B&W Renewable Contract Settlement

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

B&W Environmental Loss Contracts

At December 31, 2020, the B&W Environmental segment had two 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 years ended December 31, 2020 and 2019, we recorded $1.3 million and $5.6 million in net losses, respectively, resulting
from changes in estimated revenue and cost to complete these two loss contracts.

At December 31, 2020, construction and procurement are complete on the first loss contract. Overall, the contract is approximately 100% complete as of 2020 with
only warranty obligations remaining. As of December 31, 2020, we have no reserve for estimated contract losses. As of December 31, 2019, this contract had
accrued losses of $0.1 million and was approximately 99% complete. Construction is being performed by the B&W Thermal segment, but the contract loss is
included in the B&W Environmental segment.

At December 31, 2020, the design and procurement are nearing completion on the second loss contract. Overall, the contract is approximately 99% complete and
final completion is expected to be in the first quarter of 2021. During the year ended December 31, 2020, we recognized additional contract losses of $1.3 million
on this contract due to issues with the seismic design and fan screens. As of December 31, 2020, the reserve for estimated contract losses recorded in other accrued
liabilities in our Consolidated Balance Sheets was $0.1 million related to this contract. In the year ended December 31, 2019, we recognized additional contract
losses of $3.3 million on this contract due to issues with seismic design and fan screens. As of December 31, 2019, this contract had accrued losses of $0.9 million
and was 87% complete.

NOTE 6 – INVENTORIES

The components of inventories are as follows:

(in thousands)
Raw materials and supplies
Work in progress
Finished goods
Total inventories

NOTE 7 – PROPERTY, PLANT & EQUIPMENT, & FINANCE LEASE

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

(in thousands)
Land
Buildings
Machinery and equipment
Property under construction

Less accumulated depreciation
Net property, plant and equipment
Finance lease
Less finance lease accumulated amortization
Net property, plant and equipment, and finance lease

Year ended December 31,

2020

2019

46,659 $
8,195
12,307
67,161 $

Year ended December 31,

2020

2019

1,584 $
34,207
151,399
5,336
192,526
135,925
56,601
30,551
2,074
85,078 $

42,685
7,502
12,916
63,103

2,998
84,005
154,016
6,204
247,223
180,562
66,661
30,405
13
97,053

NOTE 8 – GOODWILL

The following summarizes the changes in the net carrying amount of goodwill as of December 31, 2020 after giving effect to the reallocation of our goodwill
across our new reportable segments as more fully described below:

(in thousands)
Balance at December 31, 2019
Currency translation adjustments

Balance at December 31, 2020

B&W Renewable

B&W Environmental

B&W Thermal

Total

10,169 $
42
10,211 $

5,652 $
21
5,673 $

31,339 $
140
31,479 $

47,160
203
47,363

Goodwill is tested for impairment annually and when impairment indicators exist. No impairment was recorded during the years ended December 31, 2020 and
December 31, 2019. Because the B&W Thermal, B&W Construction Co., LLC, B&W Renewable and B&W Environmental reporting units each had negative
carrying values, reasonable changes in assumptions would not indicate impairment.

In conducting the annual impairment test for goodwill, the Company has the option to first assess qualitative factors to determine whether it is more likely than not
the fair value of any reporting unit is less than its carrying amount. If the Company elects to perform a qualitative assessment and determines an impairment is
more likely than not, the Company is required to perform a quantitative impairment test. Otherwise, no further analysis is required. Alternatively, the Company
may elect to proceed directly to the quantitative impairment test.

During the annual goodwill impairment testing as of October 1, 2020, the Company first assessed qualitative factors to determine whether it was necessary to
perform the quantitative impairment test. Based on the assessment of qualitative

factors, including the fact that the company had performed a quantitative impairment test as of September 30, 2020, it was determined that it is not more likely than
not the fair value of any reporting unit was less than its carrying amount. No impairment charges were recorded as a result of the qualitative testing performed.

On September 30, 2020, the previous Babcock & Wilcox and Babcock & Wilcox Construction Co., LLC reporting units became the B&W Thermal and B&W
Construction Co., LLC reporting units, respectively, within the Babcock & Wilcox Thermal operating segment. The Company also identified the B&W Renewable
and B&W Environmental reporting units related to the transfer of businesses from the former Babcock & Wilcox reporting unit to the Babcock & Wilcox
Renewable and Babcock & Wilcox Environmental operating segments. Consequently, the Company re-allocated goodwill between the affected reporting units
based on their relative fair values and compared the carrying value to the fair value of each impacted reporting unit. In conjunction with the changes mentioned
above, the Company determined that this represented a triggering event for an interim goodwill assessment and performed a goodwill impairment test of the
impacted reporting units on a before and after basis and based on the assessment, as of September 30, 2020, concluded that the fair value of the impacted reporting
units exceeded their carrying values. Accordingly, no impairment was indicated during the interim assessment, as of September 30, 2020.

In the first quarter of 2020, our share price declined significantly, which we considered to be a triggering event for an interim goodwill assessment. We primarily
attributed the significant decline in our share price to the current macroeconomic conditions and impacts COVID-19 will have on our operations. Based on the
interim assessment, as of March 31, 2020, no impairment was indicated during the first quarter of 2020.

No impairment indicators were identified during 2019.

NOTE 9 – INTANGIBLE ASSETS

Our intangible assets are as follows:

(in thousands)
Definite-lived intangible assets

Customer relationships
Unpatented technology
Patented technology
Tradename
All other

Gross value of definite-lived intangible assets

Customer relationships amortization
Unpatented technology amortization
Patented technology amortization
Tradename amortization
All other amortization

Accumulated amortization

Net definite-lived intangible assets

Indefinite-lived intangible assets
Trademarks and trade names

Total intangible assets, net

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

Year ended December 31,

2020

2019

24,862 $
15,713
2,642
13,088
9,262
65,567
(19,537)
(6,751)
(2,593)
(4,831)
(9,252)
(42,964)
22,603 $

1,305 $
23,908 $

24,440
14,917
2,598
12,372
9,225
63,552
(18,616)
(5,245)
(2,476)
(4,257)
(8,963)
(39,557)
23,995

1,305
25,300

$
$

(in thousands)
Balance at beginning of period
Amortization expense
Currency translation adjustments and other
Balance at end of the period

Year ended December 31,

2020

2019

25,300 $
(3,406)
2,014
23,908 $

30,793
(4,274)
(1,219)
25,300

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

Estimated future intangible asset amortization expense is as follows (in thousands):

Year ending December 31, 2021
Year ending December 31, 2022
Year ending December 31, 2023
Year ending December 31, 2024
Year ending December 31, 2025
Thereafter

Amortization Expense

3,369
3,323
3,322
3,250
2,661
6,678

Long-lived assets, including definite-lived intangible assets are reviewed for impairment whenever circumstances indicate that the carrying amount might not be
recoverable. The circumstances leading to the first quarter interim goodwill assessment as described in Note 8 also triggered an evaluation of long-lived assets,
including intangible assets. The Company performed an analysis as required by ASC 360-10-35 to assess the recoverability of other long-lived assets in its B&W
Renewable and B&W Environmental asset groups. With respect to these asset groups the sum of the undiscounted cash flows and the residual value of the primary
assets exceeded the carrying value of both the B&W Vølund and B&W SPIG asset groups and no impairment was indicated during the first quarter of 2020.

Interim impairment testing was performed for the B&W Renewable and B&W Environmental asset groups due to continued net operating losses and significant
decreases in revenues experienced during 2019. In our interim test as of September 30, 2019, the sum of the undiscounted cash flows and the residual value of the
primary assets exceeded the carrying value of both the B&W Renewable and B&W Environmental asset groups and no impairment was indicated.

As of December 31, 2020 and 2019, the B&W Vølund asset group had $0.5 million and $1.1 million of identifiable intangible assets, net of accumulated
amortization, respectively.

As of December 31, 2020 and 2019, the B&W SPIG asset group had $21.1 million and $21.6 million of identifiable intangible assets, net of accumulated
amortization, respectively.

We believe the estimates and assumptions utilized in our interim impairment testing are reasonable. However, actual results could differ substantially from those
used in our valuations. To the extent such factors result in a failure to achieve the level of undiscounted forecasted cash flows used to estimate fair value for the
purpose determining whether or not an impairment calculation should be performed for the intangible assets, or if we committed to a strategy to sell one or more of
the reporting units in the near future as we continue to reevaluate our ongoing operations, we may be required to record non-cash impairment charges in the future
which could have an adverse impact on our business, financial condition and results of operations.

NOTE 10 – LEASES

Accounting for Leases

We determine if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) assets, operating lease liabilities and non-current
operating lease liabilities in the Consolidated Balance Sheets. Finance leases are included in net property, plant and equipment, and finance lease, other accrued
liabilities and other non-current finance liabilities in the Consolidated Balance Sheets. Lease liabilities are recognized based on the present value of the future
minimum lease payments over the lease term at commencement date. As substantially all of our leases do not provide an

implicit rate, we use our incremental borrowing rate based on the information available at lease commencement date in determining the present value of future
payments. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic
environments where the leased asset is located. The ROU assets also include any prepaid lease payments made and initial direct costs incurred and excludes lease
incentives. Our lease terms may include options to extend or terminate the lease, which we recognize when it is reasonably certain that we will exercise that option.
Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not
recorded on the balance sheet.

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

In December 2019, we consolidated all of our Barberton and most of our Copley, Ohio operations into new leased office space in Akron, Ohio as described in Note
7. The lease is classified as a finance lease and has an initial term of fifteen years, with an option to extend up to two additional ten-year terms and no option of
early termination. As we are not reasonably certain to exercise the option to extend the lease beyond the initial base term, only payments related to the initial term
were included in the initial ROU asset. Base rent will increase two percent annually, making the total future minimum payments during the initial term of the lease
approximately $51.6 million as of December 31, 2020. Based upon an initial term of fifteen years, an incremental borrowing rate of 8% was used to determine the
ROU asset, as no implicit rate was identified in the lease agreement. We recorded a $28.3 million ROU asset in net property, plant and equipment, and finance
lease and corresponding liabilities in other accrued liabilities and other non-current finance liabilities in the Consolidated Balance Sheets as of December 31,
2020.

We have operating and finance leases for real estate, vehicles, and certain equipment. Our leases have remaining lease terms of up to 15 years, some of which may
include options to extend the leases for up to 10 years, and some of which may include options to terminate the leases within 1 year.

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

Classification

Year ended December 31,
2020

Year ended December 31,
2019

(in thousands)
Operating lease expense:
Operating lease expense
Short-term lease expense
(1)
Variable lease expense

Total operating lease expense

Finance lease expense:
Amortization of right-of-use assets
Interest on lease liabilities

Total finance lease expense

Selling, general and administrative expenses
Selling, general and administrative expenses
Selling, general and administrative expenses

Selling, general and administrative expenses
Interest expense

Sublease income
Net lease cost

(2)

Other – net

(1)

(2)

Variable lease expense primarily consists of common area maintenance expenses paid directly to lessors of real estate leases.
Sublease income excludes rental income from owned properties, which is not material.

$
$

5,736 $
1,960
1,973
9,669 $

2,061 $
2,452
4,513 $

(86) $
14,096 $

6,624
6,575
2,349
15,548

13
14
27

(67)
15,508

Other information related to leases is as follows:

(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases
Operating cash flows from finance leases
Financing cash flows from finance leases

Right-of-use assets obtained in exchange for lease liabilities:

Operating leases
Finance leases

$
$

Weighted-average remaining lease term:

Operating leases (in years)
Finance leases (in years)
Weighted-average discount rate:

Operating leases
Finance leases

Year ended December 31,
2020

Year ended December 31,
2019

5,603
2,452
(13)

2,629
146

$
$

3.1
13.9

9.26 %
8.00 %

6,578
14
(12)

3,014
30,404

3.4
15.0

9.27 %
8.00 %

Amounts relating to leases were presented on our Consolidated Balance Sheets as of December 31, 2020 and 2019 in the following line items:

(in thousands)
Assets:

Operating lease assets
Finance lease assets

Total non-current lease assets

Liabilities:
Current

Operating lease liabilities
Finance lease liabilities

Non-current

Operating lease liabilities
Finance lease liabilities

Total lease liabilities

Classification

December 31, 2020

December 31, 2019

Right-of-use assets
Net property, plant and equipment, and finance lease

Operating lease liabilities
Other accrued liabilities

Non-current operating lease liabilities
Non-current finance lease liabilities

10,814 $
28,477
39,291 $

3,995 $
886

7,031
29,690
41,602 $

12,498
30,392
42,890

4,323
(38)

8,388
30,454
43,127

Future minimum lease payments required under non-cancellable leases as of December 31, 2020 were as follows:

(in thousands)
Year ending December 31, 2021
Year ending December 31, 2022
Year ending December 31, 2023
Year ending December 31, 2024
Year ending December 31, 2025
Thereafter
Total

Less imputed interest
Lease liability

Operating Leases

Finance Leases

Total

4,783 $
3,509
2,394
1,424
315
7

12,432 $
(1,406)
11,026 $

3,278 $
3,342
3,408
3,473
3,498
34,787
51,786 $
(21,210)
30,576 $

NOTE 11 – ACCRUED WARRANTY EXPENSE

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

(in thousands)
Balance at beginning of period
Additions
Expirations and other changes
Payments
Translation and other
Balance at end of period

Year ended December 31,

2020

2019

33,376 $
11,912
(8,391)
(13,916)
2,418
25,399 $

8,061
6,851
5,802
4,897
3,813
34,794
64,218
(22,616)
41,602

45,117
9,557
(7,622)
(12,446)
(1,230)
33,376

We accrue estimated expense included in cost of operations on our 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 cost is accrued when the
contract becomes a loss contract. 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. Warranty expense in the
year ended December 31, 2019 includes $3.9 million of warranty reversal related to developments stemming from the March 29, 2019 settlement agreement for the
B&W Renewable EPC loss contracts described in Note 5.
NOTE 12 – RESTRUCTURING ACTIVITIES

The Company incurred restructuring charges in 2019 and 2020. The charges primarily consist of severance 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 to impact of
COVID-19 on our business.

The following tables summarize the restructuring activity incurred by segment:

(in thousands)

B&W Renewable segment
B&W Environmental segment
B&W Thermal segment
Corporate

Year ended December 31,
2020
Severance and
related costs

Total

Other

(1)

Total

Year ended December 31,
2019
Severance and
related costs

Other

(1)

5,926 $
745
4,725
453
11,849 $

4,537 $
293
1,962
(52)
6,740 $

1,389 $
452
2,763
505
5,109 $

2,233 $
2,000
3,040
4,434
11,707 $

2,176 $
1,888
2,791
3,566
10,421 $

57
112
249
868
1,286

Cumulative costs to date

40,314 $

33,213 $

7,101

(1)

Other amounts consist primarily of exit, spin-off, relocation, COVID-19 related and other costs.

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

(in thousands)
Balance at beginning of period
Restructuring expense
Payments

Balance at end of period

Year ended December 31,

2020

2019

5,359 $
11,849
(9,062)
8,146 $

7,359
11,707
(13,707)
5,359

As of December 31, 2020, approximately $4.0 million in severance payments were made related to restructuring charges. Accrued restructuring liabilities at
December 31, 2020 and 2019 relate primarily to employee termination benefits. In the fourth quarter of 2020, as part of the Company's continuing integration of
worldwide teams, we accrued $3.5 million of employee severance and related costs. Restructuring liabilities are included in other accrued liabilities on our
Consolidated Balance Sheets.

Additional charges may be recognized in future periods related to the actions described above, the timing and amount of which are not known at this time.

NOTE 13 – PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

We have historically provided defined benefit retirement benefits to domestic employees under the Retirement Plan for Employees of Babcock & Wilcox
Commercial Operations (the “U.S. Plan”), a noncontributory plan. As of 2006, the U.S. Plan was closed to new salaried plan entrants. Effective December 31,
2015, benefit accruals for those salaried employees covered by, and continuing to accrue service and salary adjusted benefits under the U.S. Plan ceased. As of
December 31, 2020, and 2019, approximately 85 and 100 hourly union employees continue to accrue benefits under the U.S. Plan, respectively.

Effective January 1, 2012, a defined contribution component was adopted applicable to Babcock & Wilcox Canada, Ltd. (the “Canadian Plans”). Any employee
with less than two years of continuous service as of December 31, 2011 was required to enroll in the defined contribution component of the Canadian Plans as of
January 1, 2012 or upon the completion of 6 months of continuous service, whichever is later. These and future employees will not be eligible to enroll in the
defined benefit component of the Canadian Plans. In 2014, benefit accruals under certain hourly Canadian pension plans were ceased with an effective date of
January 1, 2015. As part of the spin-off transaction, we split the Canadian defined benefit plans from BWXT, which was completed in 2017. We did not present
these plans as multi-employer plans because our portion was separately identifiable, and we were able to assess the assets, liabilities and periodic expense in the
same manner as if it were a separate plan in each period.

We also sponsor the Diamond Power Specialty Limited Retirement Benefits Plan (the “U.K. Plan”) through our subsidiary. Benefit accruals under this plan ceased
effective November 30, 2015. We have accounted for the GMP equalization following the U.K. High Court ruling during the fourth quarter of 2018 by recording
prior service cost in accumulated other comprehensive income that will be amortized through net periodic pension cost over 15 years, ending December 31, 2033.

We do not provide retirement benefits to certain non-resident alien employees of foreign subsidiaries. Retirement benefits for salaried employees who accrue
benefits in a defined benefit plan are based on final average compensation and years of service, while benefits for hourly paid employees are based on a flat benefit
rate and years of service. Our funding policy is to fund the plans as recommended by the respective plan actuaries and in accordance with the Employee Retirement
Income Security Act of 1974, as amended, or other applicable law. Funding provisions under the Pension Protection Act accelerate funding requirements to ensure
full funding of benefits accrued.

We make available other benefits which include postretirement health care and life insurance benefits to certain salaried and union retirees based on their union
contracts, and on a limited basis, to future retirees.

Obligations and funded status

(in thousands)
Change in benefit obligation:

Benefit obligation at beginning of period
Service cost
Interest cost
Plan participants’ contributions
Curtailments
Settlements
Amendments
Actuarial loss (gain)
Gain due to transfer
Foreign currency exchange rate changes
Benefits paid
Benefit obligation at end of period

Change in plan assets:

Fair value of plan assets at beginning of period
Actual return on plan assets
Employer contribution
Plan participants' contributions
Transfers
Foreign currency exchange rate changes
Benefits paid
Fair value of plan assets at the end of period
Funded status

Amounts recognized in the balance sheet consist of:

Accrued employee benefits
Accumulated postretirement benefit obligation
Pension liability
Prepaid pension
Accrued benefit liability, net

Amount recognized in accumulated comprehensive income (before taxes):

Prior service cost
Supplemental information:
Plans with accumulated benefit obligation in excess of plan assets

Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets

Plans with plan assets in excess of accumulated benefit obligation

Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets

Pension Benefits
Year Ended December 31,
2019
2020

Other Benefits
Year Ended December 31,
2019
2020

1,218,968 $

792
33,267
—
—
—
—
108,623
—
1,615
(79,246)
1,284,019 $

974,117 $
148,100
2,892
—
—
1,783
(79,246)
1,047,646
(236,373) $

(1,163) $
—
(241,889)
6,679
(236,373) $

1,140,127 $

778
43,312
—
—
115
—
114,125
—
2,007
(81,496)
1,218,968 $

871,925 $
177,560
4,049
—
—
2,079
(81,496)
974,117
(244,851) $

(1,153) $
—
(248,821)
5,123
(244,851) $

12,134 $

19
288
160
—
—
—
478
—
33
(1,310)
11,802 $

— $
—
1,150
160
—
—
(1,310)
—

(11,802) $

(1,399) $

(10,403)
—
—

(11,802) $

14,019
15
424
180
—
—
—
(1,200)
—
66
(1,370)
12,134

—
—
1,191
180
—
—
(1,371)
—
(12,134)

(1,683)
(10,451)
—
—
(12,134)

557 $

643 $

3,046 $

1,962

1,219,129 $
1,219,129 $
976,078 $

1,159,083 $
1,159,083 $
909,110 $

64,890 $
64,890 $
71,568 $

59,885 $
59,885 $
65,007 $

— $
11,802 $
— $

— $
— $
— $

—
12,134
—

—
—
—

$
$
$

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

(in thousands)
Interest cost
Expected return on plan assets
Amortization of prior service cost
Recognized net actuarial loss (gain)

(3)

Benefit plans, net

(1)

Service cost included in COS

(2)

Net periodic benefit cost (benefit)

Pension Benefits
Year ended December 31,
2019
2020

Other Benefits
Year ended December 31,
2019
2020

33,267 $
(61,322)
97
22,676
(5,282)
792
(4,490) $

43,312 $
(55,717)
142
(7,603)
(19,866)
778
(19,088) $

288 $
—
(1,084)
478
(318)
19
(299) $

424
—
(2,157)
(1,201)
(2,934)
15
(2,919)

(1)

Benefit plans, net, which is presented separately in the Consolidated Statements of Operations, is not allocated to the segments.

(2)

(3)

Service cost related to a small group of active participants is presented within cost of operations in the Consolidated Statement of Operations and is allocated to the B&W Thermal segment.
Expected return on plan assets includes $0.8 million related to interest incurred for deferred contribution payments.

Recognized net actuarial loss (gain) consists primarily of our reported actuarial loss (gain), curtailments, settlements, and the difference between the actual return
on plan assets and the expected return on plan assets. Total net MTM adjustments for our pension and other postretirement benefit plans were losses (gains) of
$23.2 million and $(8.8) million in the years ended December 31, 2020 and 2019, respectively. The recognized net actuarial loss (gain) was recorded in Benefit
plans, net in our Consolidated Statements of Operations.

Settlements are triggered in a plan when the distributions exceed the sum of the service cost and interest cost of the respective plan. Lump sum payments from our
Canadian Plans resulted in plan settlements of a $0.1 million loss during 2019. The settlements themselves were not material, but they triggered interim MTM
remeasurements of the Canadian Plan's assets and liabilities, resulting in a $0.6 million loss during 2019. Both the settlements and the MTM remeasurements are
reflected in the Recognized net actuarial loss (gain) in the table above and are included in our Consolidated Statements of Operations in the Benefit plans, net line
item.

Assumptions

Weighted average assumptions used to determine net periodic benefit
obligations:

Comparative single equivalent discount rate
Rate of compensation increase

Weighted average assumptions used to determine net periodic benefit cost:

Comparative single equivalent discount rate
Expected return on plan assets
Rate of compensation increase

Pension Benefits
Year ended December 31,
2019
2020

Other Benefits
Year ended December 31,
2019
2020

2.50%
0.08%

3.23%
6.63%
0.08%

3.25%
0.07%

4.28%
6.66%
0.07%

1.97%
—

1.97%
—
—

2.99%
—

2.99%
—
—

The expected rate of return on plan assets is based on the long-term expected returns for the investment mix of assets currently in the portfolio. In setting this rate,
we use a building-block approach. Historic real return trends for the various asset classes in the plan's portfolio are combined with anticipated future market
conditions to estimate the real rate of return for each asset class. These rates are then adjusted for anticipated future inflation to determine estimated nominal rates
of return for each asset class. The expected rate of return on plan assets is determined to be the weighted average of the nominal returns based on the weightings of
the asset classes within the total asset portfolio. We use an expected return on plan assets assumption of 6.89% for the majority of our pension plan assets
(approximately 93% of our total pension assets at December 31, 2020).

Investment goals

The overall investment strategy of the pension trusts is to achieve long-term growth of principal, while avoiding excessive risk and to minimize the probability of
loss of principal over the long term. The specific investment goals that have been set for the pension trusts in the aggregate are (1) to ensure that plan liabilities are
met when due and (2) to achieve an investment return on trust assets consistent with a reasonable level of risk.

Allocations to each asset class for both domestic and foreign plans are reviewed periodically and rebalanced, if appropriate, to assure the continued relevance of the
goals, objectives and strategies. The pension trusts for both our domestic and foreign plans employ a professional investment advisor and a number of professional
investment managers whose individual benchmarks are, in the aggregate, consistent with the plans' overall investment objectives. The goals of each investment
manager are (1) to meet (in the case of passive accounts) or exceed (for actively managed accounts) the benchmark selected and agreed upon by the manager and
the trust and (2) to display an overall level of risk in its portfolio that is consistent with the risk associated with the agreed upon benchmark.

The investment performance of total portfolios, as well as asset class components, is periodically measured against commonly accepted benchmarks, including the
individual investment manager benchmarks. In evaluating investment manager performance, consideration is also given to personnel, strategy, research
capabilities, organizational and business matters, adherence to discipline and other qualitative factors that may impact the ability to achieve desired investment
results.

Domestic plans: We sponsor the U.S. Plan, which is a domestic defined benefit plan. The assets of this plan are held by the Trustee in The Babcock & Wilcox
Company Master Trust (the “Master Trust”). For the years ended December 31, 2020 and 2019, the investment return on domestic plan assets of the Master Trust
(net of deductions for management fees) was approximately 17% and 23%, respectively.

The following is a summary of the asset allocations for the Master Trust by asset category:

Asset category:

Commingled and mutual funds
United States government securities
Corporate stocks
Venture capital
Hedge funds
Cash and accrued items

Year ended December 31,

2020

2019

41 %
16 %
5 %
18 %
13 %
7 %

68 %
30 %
— %
— %
— %
2 %

The target asset allocation for the Master Trust as of December 31, 2020 was 54% of alternative, liquid credit and direct lending funds, 22% of fixed income
securities, and 24% of equity and other investments. As of December 31, 2019, the target allocation was 65% of commingled and mutual funds and 35% of fixed
income investments. We routinely reassess the target asset allocation with a goal of better aligning the timing of expected cash flows from those assets to the
anticipated timing of benefit payments.
Foreign plans: We sponsor various plans through certain of our foreign subsidiaries. These plans are the Canadian Plans and the U.K. Plan. The combined
weighted average asset allocations of these plans by asset category were as follows:

Asset category:

Commingled and mutual funds
Fixed income
Other

Year ended December 31,

2020

2019

35 %
62 %
3 %

30 %
68 %
2 %

The target allocation for 2020 for the foreign plans, by asset class, is as follows:

Asset class:

United States equity
Global equity
Fixed income and other

Canadian
Plans

U.K. Plan

23 %
27 %
50 %

6 %
6 %
88 %

Fair value of plan assets
See Note 21 for a detailed description of fair value measurements and the hierarchy established for valuation inputs. In accordance with Subtopic 820-10, Fair
Value Measurement and Disclosures, certain investments that are measured at fair value using the net asset value ("NAV") per share practical expedient have not
been classified in the fair value hierarchy. The investments that are measured at fair value using NAV per share included in the tables below are intended to permit
reconciliation of the fair value hierarchy to the fair value of plan assets at the end of each period, which is presented in the first table above titled “obligations and
funded status”. The following is a summary of total investments for our plans measured at fair value:

(in thousands)

Commingled and mutual funds
United States government securities
Fixed income
Equity
Venture capital
Cash and accrued items

Investments measured at fair value

Investments measured at net asset value
Pending trades
Total pension and other postretirement benefit assets

(in thousands)

Commingled and mutual funds
United States government securities
Fixed income
Cash and accrued items

Investments measured at fair value

Investments measured at net asset value
Total pension and other postretirement benefit assets

Year ended December 31,
2020

Level 1

Level 2

Level 3

429,101 $
160,488
44,604
45,539
56,719
69,822
806,273 $
241,568
(195)
1,047,646

402,935 $
160,488
—
45,539
—
69,822
678,784 $

26,166 $

—
44,604
—
—
—

70,770 $

Year ended December 31,
2019

Level 1

Level 2

Level 3

— $
—
—
729
729 $

531,823 $
271,272
39,625
20,819
863,539 $

531,823 $
271,272
39,625
21,548
864,268 $
109,849
974,117

—
—
—
—
56,719
—
56,719

—
—
—
—
—

Expected cash flows

(in thousands)
Expected employer contributions to trusts of defined benefit plans:

2021

Expected benefit payments

(1)

2021
2022
2023
2024
2025
2026-2030

Domestic Plans

Pension
Benefits

Other
Benefits

Foreign Plans

Pension
Benefits

Other
Benefits

45,605 $

1,225 $

1,502 $

75,113 $
74,688
74,099
73,356
72,386
340,845

1,225 $
1,131
1,041
953
870
3,251

2,623 $
2,660
2,666
2,740
2,885
15,135

174

174
152
143
132
121
460

(1)

Pension benefit payments are made from their respective plan's trust.

We made contributions to our pension and other postretirement benefit plans totaling $4.0 million and $5.2 million during the years ended December 31, 2020 and
2019, respectively. Expected employer contributions to trusts of defined benefit plans above reflect relief granted under pension contribution waivers, which
deferred minimum pension contributions for approximately one year to then be repaid over a five-year period.

On October 1, 2020 we received IRS approval of our temporary hardship waiver request for our pension and other postretirement benefit plans' contribution for the
2019 Plan year. Pursuant to the provisions of the waiver granted by the IRS related to the 2018 Plan year, we were required to resume quarterly contributions on
April 15, 2020 equal to the required quarterly contributions to the Plan. The 2019 Plan year deferred contribution of $23.7 million is allowed to be funded over the
next five years.

On March 27, 2020, the CARES Act was signed into law and among other things, provides deferral of certain U.S. pension plan contributions until January 1,
2021. This was updated to allow payments due on January 1, 2021 to be considered timely made no later than January 4, 2021. We elected to defer the contribution
payments of $5.5 million each for the 2020 Plan year that would have been made on April 15, 2020 and July 15, 2020 and October 15, 2020, respectively. In
addition, we elected to defer the contribution payments of $1.1 million for the 2018 waiver for the 2019 Plan year and $23.7 million for the 2019 Plan year that
were both due on September 15, 2020.

The total funding contributions of approximately $46.0 million originally estimated for 2020 includes $1.1 million for the 2018 waiver payment for the 2019 Plan
year, $23.7 million for the 2019 Plan year, $16.5 million for the 2020 Plan year and $4.5 million related to other non-qualified pension plans, non-U.S. pension
plans and other postretirement benefits plans.

In January 2021, we made contributions of $22.0 million for the 2020 Plan year and $1.1 million for the 2018 waiver payment for the 2019 Plan year and $0.4
million of interest as required per the CARES Act deferral.

Defined contribution plans

We provide benefits under The B&W Thrift Plan (the “Thrift Plan”). The Thrift Plan generally provides for matching employer contributions of 50% of the first
8% of the participants' compensation. These matching employer contributions are typically made in cash. Amounts charged to expense for employer contributions
under the Thrift Plan totaled approximately $1.0 million and $3.1 million in the years ended December 31, 2020 and 2019, respectively.

Also, our salaried Canadian employees are provided with a defined contribution plan. The amount charged to expense for employer contributions was
approximately $0.3 million and $0.3 million in the years ended December 31, 2020 and 2019, respectively.

Multi-employer plans

One of our subsidiaries in the B&W Thermal segment contributes to various multi-employer plans. The plans generally provide defined benefits to substantially all
unionized workers in this subsidiary. The following table summarizes our contributions to multi-employer plans for the years covered by this report:

Pension Fund
Boilermaker-Blacksmith
National Pension Trust
All other

EIN/PIN

Pension Protection
Act Zone Status
2020

2019

FIP/RP Status
Pending/
Implemented

Contributions

2020

2019

(in millions)

48-6168020/ 001

Yellow

Red

Yes

4.0 $
0.9
4.9 $

7.5
4.9
12.4

Surcharge
Imposed

Expiration Date
of Collective
Bargaining
Agreement
Described
Below

Our collective bargaining agreements with the Boilermaker-Blacksmith National Pension Trust (the “Boilermaker Plan”) is under a National Maintenance
Agreement platform which is evergreen in terms of expiration. However, the agreement allows for termination by either party with a 90-day written notice. Our
contributions to the Boilermaker Plan constitute less than 5% of total contributions to the Boilermaker Plan. All other contributions expense for all periods included
in this report represents multiple amounts to various plans that, individually, are deemed to be insignificant.

NOTE 14 – REVOLVING DEBT

Our revolving debt is comprised of a revolving credit facility in the U.S. totaling $164.3 million and $179.0 million at December 31, 2020 and 2019, respectively.

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

A&R Credit Agreement

Under the A&R Credit Agreement, B. Riley has committed to provide the Company with up to $70.0 million of additional Last Out Term Loans on the same terms
as the term loans extended under the Amended Credit Agreement. An aggregate $30.0 million of this new commitment was funded upon execution of the A&R
Credit Agreement. Of the remaining commitments, at least $35.0 million will be funded in installments, subject to reduction for the gross proceeds from certain
equity offerings conducted by the Company, and $5.0 million will be funded upon request by the Company. The proceeds from the $30.0 million of new term loans
will be used to pay transaction fees and expenses and repay outstanding borrowings under the U.S. Revolving Credit Facility. Proceeds from the additional
$40.0 million of term loans will be used to repay outstanding borrowings under the U.S. Revolving Credit Facility, with any remaining amounts used for working
capital, capital expenditures, permitted acquisitions and general corporate purposes.

The A&R Credit Agreement also provides that, (i) the U.S. Revolving Credit Facility continues to be available for issuances of existing and new letters of credit,
subject to the L/C Sublimit (as defined below), (ii) the $205.0 million sublimit on borrowings under the U.S. Revolving Credit Facility is maintained, and (iii)
interest payments on the unpaid principal amount of revolving credit loans incurred during the period from May 14, 2020 through and including August 31, 2020 of
$3.8 million are deferred and will be paid in six equal installments on the last business day of each calendar month beginning on January 29, 2021 and through June
30, 2021. No swing line borrowings are permitted under the A&R Credit Agreement.

The A&R Credit Agreement also amends the following terms, among others, as compared with the Amended Credit Agreement:

(i) the maturity date of the U.S. Revolving Credit Facility is extended to June 30, 2022, and the maturity date of all Last Out Term Loans under the

A&R Credit Agreement is extended to December 30, 2022 (six months after the maturity date of the U.S. Revolving Credit Facility);
(ii) the interest rate for loans under the U.S. Revolving Credit Facility remained the same at LIBOR plus 7% or base rate (as defined in the A&R Credit

Agreement) plus 6%. These margins will be reduced by 2% if commitments under the U.S. Revolving Credit Facility are reduced to less than
$200.0 million. The fee for letters of credit is set at 4%;
(iii) the interest rate for all Last Out Term Loans is set at 12%;
(iv) the commitments under the U.S. Revolving Credit Facility automatically and permanently decrease in the following amounts on the following dates,
which match the funding dates and amounts for the committed term loans: (x) $10.0 million on November 30, 2020; and (y) $5.0 million on each
of March 31, 2021, June 30, 2021, September 30, 2021, December 31, 2021 and March 31, 2022, respectively;

(v) the amount of revolving loans and letters of credit available in currencies other than U.S. dollars are capped at $125.0 million through April 30, 2021

and step down to $110.0 million on May 1, 2021; and

(vi) the amount of financial letters of credit is capped at $75.0 million, and the amount of all letters of credit is capped at $190.0 million through April

30, 2021 and step down to $175.0 million on May 1, 2021 (the “L/C Sublimit”).

Affirmative and negative covenants under the A&R Credit Agreement are substantially consistent with the Amended Credit Agreement, except that, among other
changes: (i) the indebtedness covenant has been modified to permit the incurrence of any governmental assistance in the form of indebtedness in connection with
COVID-19 relief in an aggregate principal amount not to exceed $10.0 million; (ii) a third-party letter of credit basket of up to $50.0 million has been added; (iii)
certain liens and restricted payments are modified to permit liens and repayments of indebtedness incurred in connection with governmental assistance in
connection with COVID-19 relief; and (iv) covenants related to the European B&W Renewable EPC loss projects have been removed. The minimum required
liquidity condition of $30.0 million remains constant but has been modified to exclude cash of non-loan parties in an amount in excess of $25.0 million.

Events of default under the A&R Credit Agreement are substantially consistent with the Amended Credit Agreement, except that B. Riley’s failure to fund any of
its additional Last Out Term Loans committed under the A&R Credit Agreement will constitute an event of default.

In connection with the A&R Credit Agreement, the Company has incurred certain customary amendment and commitment fees, a portion of which will be deferred
pursuant to the terms of the A&R Credit Agreement along with certain previously deferred fees incurred under the Amended Credit Agreement.

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

As of December 31 , 2020, the future minimum interest coverage ratios under our A&R Credit Agreement are as follows:

•
•
•
•
•

0.50:1.00 for the quarter ending March 31, 2021
0.80:1.00 for the quarter ending June 30, 2021
1.00:1.00 for the quarter ending September 30, 2021
1.10:1.00 for the quarter ending December 31, 2021
1.25:1.00 for the quarter ending March 31, 2022 and the last day of each fiscal quarter ending thereafter

As of December 31 , 2020, the future maximum permitted senior leverage ratios under our A&R Credit Agreement are as follows:

•
•
•
•
•

7.75:1.00 for the quarter ending March 31, 2021
4.25:1.00 for the quarter ending June 30, 2021
3.75:1.00 for the quarter ending September 30, 2021
3.00:1.00 for the quarter ending December 31, 2021
2.25:1.00 for the quarter ending March 31, 2022 and the last day of each fiscal quarter ending thereafter

Amendments to the A&R Credit Agreement - Subsequent Events

On February 8, 2021, we entered into A&R Amendment No. 2 with Bank of America. A&R Amendment No. 2, among other matters, (i) permits the issuance of
the Senior Notes in the 2021 senior notes offering described above, (ii) permits the deemed prepayment of $35 million of our Tranche A term loan with $35 million
principal amount of Senior Notes, (iii) provides that 75% of the Senior Notes gross proceeds shall be used to repay outstanding borrowings and permanently reduce
the commitments under our senior secured credit facilities, and (iv) provide that $5 million of certain previously deferred facility fees will be paid by the Company.

U.S. Revolving Credit Facility

As of December 31, 2020, the U.S. Revolving Credit Facility provides for a senior secured revolving credit facility in an aggregate amount of up to $306.2 million,
as amended and adjusted for completed asset sales and other transactions. The proceeds from loans under the U.S. Revolving Credit Facility are available for
working capital needs, capital expenditures, permitted acquisitions and other general corporate purposes, and the full amount is available to support the issuance of
letters of credit, subject to the limits specified in the agreement.

On October 23, 2020, we received $26.0 million under the settlement agreement described in Note 5. As required by the Company’s U.S. Revolving Credit
Facility, 50% of the net proceeds (gross proceeds less costs) or $8.0 million of the settlement received by the Company was applied as a permanent reduction of the
U.S. Revolving Credit Facility in October 2020.

U.S. Revolving Credit Facility - Subsequent Events

On February 12, 2021, we received gross proceeds of $125 million from the 2021 Senior Notes offering. As required by the Company’s U.S. Revolving Credit
Facility, 75% of the gross proceeds or $93.8 million received by the Company was applied as a permanent reduction of the U.S. Revolving Credit Facility as of
February 12, 2021.

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

B. Riley Limited Guaranty

In connection with the Company’s entry into the A&R Credit Agreement, B. Riley has entered into the B. Riley Guaranty for the benefit of the Administrative
Agent and the lenders under the U.S. Revolving Credit Facility. The B. Riley Guaranty provides for the guarantee of all of the Company’s obligations with respect
to the U.S. Revolving Credit Facility (other than with respect to letters of credit and contingent obligations), including the obligation to repay outstanding revolving
credit loans and pay earned interest and fees. The B. Riley Guaranty is enforceable in certain circumstances, including, among others: (i) B. Riley’s failure to
timely fund in full any of its additional Last Out Term Loans committed under the A&R Credit Agreement; (ii) certain events of default relating to bankruptcy or
insolvency occurring with respect to B. Riley; (iii) the acceleration of the Company’s borrowings under the U.S. Revolving Credit Facility; (iv) the Company’s
failure to pay any amount due to the Administrative Agent or any lender under the U.S. Revolving Credit Facility; or (v) any assertion that the B. Riley Guaranty or
any portion thereof is not valid, binding or enforceable.

In connection with the B. Riley Guaranty, the Company entered into a fee letter with B. Riley pursuant to which the Company agreed to pay B. Riley a fee of $3.9
million (the “B. Riley Guaranty Fee”). On June 8, 2020, the Company issued

1,712,479 unregistered shares of Common Stock to B. Riley and certain of its affiliates in settlement of the B. Riley Guaranty Fee in connection with the Fee and
Interest Equitization Agreement discussed below.

Fee and Interest Equitization Agreement

In connection with the B. Riley Guaranty, the Company entered into a Fee and Interest Equitization Agreement (the “Equitization Agreement”) with B. Riley and,
solely for certain limited purposes under the Equitization Agreement, B. Riley FBR, Inc.

The Equitization Agreement provides that, in lieu of receiving (a) $13.4 million of interest payments with respect to Last Out Term Loans under the A&R Credit
Agreement between May 14, 2020 and December 31, 2020 (the “Equitized Interest Payments”) and (b) the B. Riley Guaranty Fee (the “Equitized Fee Payment”
and, together with the Equitized Interest Payments, the “Equitized Fees and Interest Payments”), B. Riley will receive unregistered shares of the Company’s
Common Stock.

Under the Equitization Agreement, B. Riley will receive a number of shares of unregistered common stock equal to (i) the aggregate dollar value of the Equitized
Fees and Interest Payments divided by (ii) the Conversion Price. For purposes of the Equitization Agreement, the “Conversion Price” means the average volume
weighted average price of the common stock over 15 consecutive trading days beginning on and including May 15, 2020 (the “Measurement Period”), subject to
customary adjustments. On June 5, 2020, the conversion price was calculated at $2.2774 per share.

On December 31, 2020, September 30, 2020 and June 30, 2020, the Company issued 2,379,376, 2,334,002 and 1,192,371 unregistered shares of Common Stock,
respectively, to B. Riley and certain of its affiliates in settlement of the quarterly interest payable in connection with the Equitization Agreement discussed above.

Letters of Credit, Bank Guarantees and Surety Bonds

Certain subsidiaries primarily outside of the United States have credit arrangements with various commercial banks and other financial institutions for the issuance
of letters of credit and bank guarantees in association with contracting activity. The aggregate value of all such letters of credit and bank guarantees opened outside
of the U.S. Revolving Credit Facility as of December 31, 2020 and 2019 was $84.5 million and $88.5 million, respectively. The aggregate value of the letters of
credit provided by the U.S. Revolving Credit Facility backstopping letters of credit or bank guarantees was $32.0 million as of December 31, 2020. Of the letters of
credit issued under the U.S. Revolving Credit Facility, $34.9 million are subject to foreign currency revaluation.

We have 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 December 31, 2020, bonds issued and
outstanding under these arrangements in support of contracts totaled approximately $280.9 million. The aggregate value of the letters of credit provided by the U.S.
Revolving Credit Facility backstopping surety bonds was $34.7 million.

NOTE 15 – LAST OUT TERM LOANS

The components of the Last Out Term Loans by Tranche are as follows:

(in thousands)
(1)
Proceeds
Discount and fees
Paid-in-kind interest
Net debt balance

December 31, 2020

A-3

A-4

A-6

Total

101,660 $
8,650
3,020
113,330 $

30,000
—
—

30,000 $

40,000 $

—
—

40,000 $

171,660
8,650
3,020
183,330

(1)

Tranche A-3 proceeds represent the net proceeds after the $39.7 million principal prepayment of the tranche as of July 23, 2019, the date of the Equitization Transactions as discussed below.

(in thousands)
(1)
Proceeds
Discount and fees
Paid-in-kind interest
Principal
Unamortized discount and fees
Net debt balance

December 31, 2019
A-3

101,660
8,650
3,020
113,330
(9,377)
103,953

(1)

Tranche A-3 proceeds represent the net proceeds after the $39.7 million principal prepayment of the tranche as of July 23, 2019, the date of the Equitization Transactions as discussed below.

A debt modification with the same borrower that results in substantially different terms is accounted for as an extinguishment of the existing debt and a
reborrowing of new debt. An extinguishment gain or loss is then recognized based on the fair value of the new debt as compared to the carrying value of the
extinguished debt. The Company recognized a loss on debt extinguishment of $6.2 million in 2020, primarily representing the unamortized value of the original
issuance discount and fees on the Tranche A-3 Last Out Term Loan.

The total effective interest rate of Tranche A-3, Tranche A-4 and Tranche A-6 was 12.0% on December 31, 2020. Interest expense associated with the Last Out
Term Loans is detailed in Note 16.

Tranche A-1

We borrowed $30.0 million of net proceeds under Tranche A-1 of the Last Out Term Loans from B. Riley, a related party, in September and October of 2018. In
November 2018, Tranche A-1 was assigned to Vintage, also a related party. As part of the Equitization Transactions in July 2019, the outstanding principal of
Tranche A-1 of the Last Out Term Loans including accrued paid-in-kind interest remaining as of March 31, 2019 was exchanged for shares of Common Stock.

Tranche A-2

We borrowed $10.0 million of net proceeds under Tranche A-2 of Last Out Term Loans from B. Riley, a related party in March 2019. Tranche A-2 was fully
repaid on July 23, 2019 with proceeds from the 2019 Rights Offering as part of the Equitization Transactions in July 2019.

Tranche A-3

Under Amendment No. 16 to our previous Amended Credit Agreement, we borrowed $150.0 million face value from B. Riley, a related party, under a Tranche A-3
of Last Out Term Loans. The $141.4 million net proceeds from Tranche A-3 were primarily used to pay the amounts due under the settlement agreements covering
certain European B&W Renewable loss projects as described in Note 5, with the remainder used for working capital and general corporate purposes.

Interest rates for Tranche A-3 are described above. Tranche A-3 may be prepaid, subject to the subordination provisions under the previous Amended Credit
Agreement as described above, but not re-borrowed. As part of the Equitization Transactions, the total prepayment of principal of Tranche A-3 of the Last Out
Term Loans was $39.7 million.

Tranche A-4

On January 31, 2020, we entered into Amendment No. 20 to the Amended Credit Agreement. Amendment No. 20 provides $30.0 million of additional
commitments from B. Riley, a related party, under a new Tranche A-4 of Last Out Term Loans. The proceeds from Tranche A-4 may be used under the terms of
Amendment No. 20 to repay revolving credit loans, for working capital and general corporate purposes, and to reimburse certain expenses of B. Riley as specified
by Amendment No. 20. The terms of Tranche A-4 are the same as the terms for the Tranche A-3 under the Amended Credit Agreement.

As of January 31, 2020, we borrowed $30.0 million face value of the Tranche A-4 and received net proceeds of $26.3 million after paying total fees of $3.7 million
related to amendment No. 20 described above.

Tranche A-5

On January 31, 2020, we entered into Amendment No. 20 to the Amended Credit Agreement. Amendment No. 20 provides an incremental Tranche A-5 of Last
Out Term Loans to be extended prior to maturity of the Last Out Term Loans under the Amended Credit Agreement in the event certain customer letters of credit
are drawn. The terms of Tranche A-5 are the same as the terms for the Tranche A-3 under the Amended Credit Agreement. As of March 8, 2021, no borrowings
have occurred under Tranche A-5.

Tranche A-6

The A&R Credit Agreement provided us with up to $70.0 million of additional funding in the form of Tranche A-6 Last Out Term Loans from B. Riley, a related
party, as more fully described in Note 14. An aggregate $30.0 million of this new commitment was funded upon execution of the A&R Credit Agreement. Of the
remaining commitments, $35.0 million will be funded in installments, subject to reduction for the gross proceeds from certain equity offerings conducted by the
Company. The remaining $5.0 million will be available upon request by the Company.

On November 30, 2020, we borrowed $10.0 million face value of the Tranche A-6 and received gross proceeds of $10.0 million 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.

Tranche A-7

The A&R Credit Agreement provided us with up to $50.0 million of additional funding for letters of credit in the form of Tranche A-7 Last Out Term Loans from
B. Riley, a related party, as more fully described in Note 14. The $50.0 million will be available upon request by the Company, subject to certain limitations. As of
March 8, 2021, no borrowings have occurred under Tranche A-7.

Last Out Term Loans - Subsequent Events

On February 12, 2021, we issued $35 million of Senior Notes to B. Riley Financial, Inc. in exchange for a deemed prepayment of our existing Last Out Term Loan
Tranche A-6. The interest rate on the remaining Last Out Term Loan Tranche A balances has been reduced to 6.625% from 12.0%, as described in Note 25.

On March 4, 2021, effective with the execution of Amendment No. 3, we paid $75 million towards our existing Last Out Term Loans, as described in Note 25.

NOTE 16 –INTEREST EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION

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

(in thousands)
Components associated with borrowings from:

U.S. Revolving Credit Facility
Last Out Term Loans - cash interest
Last Out Term Loans - equitized interest
Last Out Term Loans - paid-in-kind interest

Components associated with amortization or accretion of:

U.S. Revolving Credit Facility - deferred financing fees and commitment fees
U.S. Revolving Credit Facility - contingent consent fee for Amendment 16
U.S. Revolving Credit Facility - deferred ticking fee for Amendment 16
Last Out Term Loans - discount and financing fees

Other interest expense

Total interest expense

Year ended December 31,

2020

2019

13,988 $
6,140
13,450
—
33,578

14,811
—
1,660
3,183
19,654

6,564

59,796 $

15,639
11,207
—
5,964
32,810

31,567
13,879
5,064
10,580
61,090

1,001

94,901

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

(in thousands)
Held by foreign entities
Held by U.S. entities

Cash and cash equivalents of continuing operations

Reinsurance reserve requirements
Bank guarantee collateral
Restricted foreign accounts

Restricted cash and cash equivalents
Total cash, cash equivalents and restricted cash of continuing operations shown in the Consolidated
Statements of Cash Flows

Year ended December 31,

2020

2019

38,726 $
18,612
57,338

4,551
2,665
2,869
10,085

67,423 $

38,921
4,851
43,772

9,318
—
3,851
13,169

56,941

Our U.S. Revolving Credit Facility described in Note 14 allows for nearly immediate borrowing of available capacity to fund cash requirements in the normal
course of business, meaning that the minimum United States cash on hand is maintained to minimize borrowing costs.

The following cash activity is presented as a supplement to our Consolidated Statements of Cash Flows and is included in Net cash used in activities:
Year ended December 31,

(in thousands)
Income tax payments, net

Interest payments on our U.S. Revolving Credit Facility
Interest payments on our Last Out Term Loans

Total cash paid for interest

NOTE 17 – STOCK-BASED COMPENSATION

Stock options

2020

2019

6,960 $

11,675 $
6,140
17,815 $

3,873

14,715
12,220
26,935

There were no stock options awarded in 2020. The following table summarizes activity for outstanding stock options for the year ended December 31, 2020:

(share data in thousands)
Outstanding at beginning of period
Granted
Exercised
Cancelled/expired/forfeited
Outstanding at end of period
Exercisable at end of period

Number of shares

Weighted-average
exercise price

Weighted-average
remaining
contractual term
(in years)

Aggregate
intrinsic value
(in thousands)

396 $
—
—
(56)
340 $
340 $

106.56
—
—
96.90
107.84
107.84

4.61 $
4.61 $

—
—

The aggregate intrinsic value included in the table above represents the total pretax intrinsic value that would have been received by the option holders had all
option holders exercised their options on December 31, 2020. The intrinsic value is calculated as the total number of option shares multiplied by the difference
between the closing price of our common stock on the last trading day of the period and the exercise price of the options. This amount changes based on the price
of our common stock.

Restricted stock units

Non-vested restricted stock units activity for the year ended December 31, 2020 was as follows:

(share data in thousands)
Non-vested at beginning of period
Granted
Vested
Cancelled/forfeited
Non-vested at end of period

Number of shares

Weighted-average grant
date fair value

2,029 $
1,168
(544)
(163)
2,490 $

4.97
2.56
4.93
7.00
3.77

As of December 31, 2020, total compensation expense not yet recognized related to non-vested restricted stock units was $4.1 million and the weighted-average
period in which the expense is expected to be recognized is 0.8 years.

Performance-based restricted stock units

Performance-based restricted stock units activity for the year ended December 31, 2020 was as follows:

(share data in thousands)
Non-vested at beginning of period
Granted
Vested
Cancelled/forfeited
Non-vested at end of period

Number of shares

Weighted-average grant
date fair value

47 $

1,275
—
(47)
1,275 $

70.06
2.50
—
78.57
2.50

As of December 31, 2020, total compensation expense not yet recognized related to non-vested performance-based restricted stock units was $3.0 million and the
weighted-average period in which the expense is expected to be recognized is 1.9 years.

Performance-based, cash settled units

Cash-settled performance units activity for the year ended December 31, 2020 was as follows:

(share data in thousands)
Non-vested at beginning of period
Granted
Vested
Cancelled/forfeited
Non-vested at end of period

Stock Appreciation Rights

Number of shares

Weighted-average grant
date fair value

24 $
—
(19)
(3)
2 $

18.78
—
2.41
102.28
140.30

In December 2018, we granted stock appreciation rights to certain employees (“Employee SARs”) and to a non-employee related party, BRPI Executive
Consulting, LLC (“Non-employee SARs”). The Employee SARs and Non-employee SARs both expire ten years after the grant date and primarily vest 100% upon
completion after the required years of service. Upon vesting, the Employee SARs and Non-employee SARs may be exercised within 10 business days following
the end of any calendar quarter during which the volume weighted average share price is greater than the share price goal. Upon exercise of the SARs, holders
receive a cash-settled payment equal to the number of SARs that are being exercised multiplied by the difference between the stock price on the date of exercise
minus the SARs base price. Employee SARs are issued under the Fourth Amended and Restated 2015 LTIP, and Non-employee SARs are issued under a Non-
employee SARs agreement. The liability method is used to recognize the accrued compensation expense with cumulatively adjusted revaluations to the then current
fair value at each reporting date through final settlement.

We used the following assumptions to determine the fair value of the SARs granted to employees and non-employee as of December 31, 2020 and 2019:

Risk-free interest rate
Expected volatility
Expected life in years
Suboptimal exercise factor

Year ended December 31,

2020

2019

0.74 %
50 %
7.72
2.0x

1.89 %
46 %
8.71
2.0x

In making these assumptions, we based estimated volatility on the historical returns of the Company's stock price and selected guideline companies. We based risk-
free rates on the corresponding U.S. Treasury spot rates for the expected duration at the date of grant, which we convert to a continuously compounded rate. We
relied upon a suboptimal exercise factor, representing the ratio of the base price to the stock price at the time of exercise, to account for potential early exercise

prior to the expiration of the contractual term. With consideration to the executive level of the SARs holders, a suboptimal exercise multiple of 2.0x was selected.
Subject to vesting conditions, should the stock price achieve a value of 2.0x above the base price, we assume the holders will exercise prior to the expiration of the
contractual term of the SARs. The expected term for the SARs is an output of our valuation model in estimating the time period that the SARs are expected to
remain unexercised. Our valuation model assumes the holders will exercise their SARs prior to the expiration of the contractual term of the SARs.

The following table presents the changes in our outstanding employee SARs and non-employee SARs for the year ending December 31, 2020 and the associated
weighted-average values:

(share data in thousands)
Non-vested at beginning of period
Granted
Vested
Non-vested at end of period

Number of employee
SARs

Number of non-employee
SARs

Total number of SARs Weighted-average value

Weighted-average
exercise price

168
—
(168)
—

844
—
(844)
—

1,012 $
—
(1,012)

— $

0.51 $
—
0.49

— $

23.44
—
23.44
—

As of December 31, 2020, the total intrinsic value of the vested SARs was $3.3 million.

NOTE 18 – PROVISION FOR INCOME TAXES

Income (loss) before income taxes includes the following:

(in thousands)
United States
Other than the United States

Loss before provision for income taxes

Significant components of the provision for income taxes are as follows:

(in thousands)
Current:
Federal
State
Foreign

(1)

Total current provision

Deferred:
(2)
Federal
State
Foreign

Total deferred provision

Provision for income taxes

Year ended December 31,

2020

2019

(65,591) $
61,673
(3,918) $

(64,610)
(59,837)
(124,447)

Year ended December 31,

2020

2019

(21) $
246
3,737
3,962

1,084
—
3,133
4,217
8,179 $

534
454
3,705
4,693

(257)
—
850
593
5,286

(1)

(2)

The 2020 amount reflects a benefit of $0.6 million offsetting tax expense of $0.6 million in discontinued operations pursuant to the guidance in paragraph 740-20-45-7 that requires all
components, including discontinued operations, be considered when determining the tax benefit from a loss from continuing operations.
The 2020 amount reflects $1.1 million of deferred tax expense as a result of the change in indefinite reinvestment assertion related to certain foreign subsidiaries.

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income (loss) before the provision for
income taxes.

The sources and tax effects of the differences are as follows:

(1)

(in thousands)
Income tax benefit at federal statutory rate
State and local income taxes
Foreign rate differential
Intra-entity debt restructuring
Deferred taxes - change in tax rate
Non-deductible (non-taxable) items
Tax credits
Valuation allowances
Luxembourg impairment of investments
Accrual adjustments
Unrecognized tax benefits
Withholding taxes
Change in indefinite reinvestment assertion
Disallowed interest deductions
Return to provision and prior year true-up
Other

Income tax expense

Year ended December 31,

2020

2019

(823) $
346
2,422
2,908
8,512
1,963
(2,939)
(17,498)
(30,603)
405
37,387
1,416
1,084
11,155
(7,855)
299
8,179 $

(1)

The 2020 amount reflects a restructuring of intercompany debt that resulted in the reduction of certain foreign net operating loss carryforwards.

Deferred income taxes reflect the tax effects of differences between the financial and tax bases of assets and liabilities.

Significant components of deferred tax assets and liabilities are as follows:

(in thousands)
Deferred tax assets:
Pension liability
Other accruals
Long-term contracts
Net operating loss carryforward
State net operating loss carry forward
Interest limitation carryforward
Foreign tax credit carryforward
Property, plant and equipment
Other tax credits
Other

Total deferred tax assets

Valuation allowance for deferred tax assets

Total deferred tax assets, net

Deferred tax liabilities:

Property, plant and equipment
Unremitted earnings
Intangibles

Total deferred tax liabilities

Net deferred tax liabilities

Year ended December 31,

2020

2019

50,849 $
12,989
1,121
399,321
23,956
38,539
7,312
—
3,270
8,478
545,835 $
(536,251)

9,584 $

2,763 $
1,084
9,449
13,296
(3,712) $

(26,134)
3,205
2,053
—
9,799
4,190
144
56,254
(65,848)
(995)
(271)
1,331
—
11,009
9,875
674
5,286

64,046
14,283
4,879
386,949
21,190
37,221
2,535
614
3,243
11,695
546,655
(539,791)
6,864

—
—
8,785
8,785
(1,921)

At December 31, 2020, the Company has tax-effected foreign net operating loss (NOL) carryforwards of approximately $356.8 million available to offset future
taxable income in certain foreign jurisdictions. Of these foreign NOL carryforwards, $185.5 million do not expire. The remaining foreign NOLs will expire
between 2021 and 2037.

As December 31, 2020, the Company has tax-effected U.S. federal NOL carryforwards of approximately $42.5 million. Of this amount, $20.7 million will expire
between 2031 and 2037. The remaining amount of U.S. NOL carryforward does not expire. A portion of the net operating loss carryforward is limited under Code
Section 382. Approximately $19.2 million of our U.S. federal NOL carryforward is not subject to the Code Section 382 limitation.

At December 31, 2020, the Company has tax-effected state NOL carryforwards of $23.9 million available to offset future taxable income in various jurisdictions.
Of this amount, $23.3 million will expire between 2021 and 2040.

At December 31, 2020,the Company has tax-effected foreign tax credit carryforwards of $7.3 million. These carryforwards will expire between 2021 and 2028.

At December 31, 2020, the Company has valuation allowances of $536.3 million for deferred tax assets, which we expect will not be realized, through carrybacks,
reversals of existing taxable temporary differences, estimates of future taxable income or tax-planning strategies. Deferred tax assets are evaluated for realizability
under ASC 740, considering all positive and negative evidence. At December 31, 2020, our weighting of positive and negative evidence included an assessment of
historical income by jurisdiction adjusted for nonrecurring items, as well as an evaluation of other qualitative factors such as the length and magnitude of pretax
losses. The valuation allowances may be reversed in the future if sufficient positive evidence exists. Any reversal of our valuation allowance could be material to
the income or loss for the period in which our assessment changes.

The net change during the year in the total valuation allowance is as follows:

(in thousands)
Balance at beginning of period
Charges to costs and expenses
Charges to other accounts
Balance at end of period

Year ended December 31,

2020

2019

(539,791) $
17,498
(13,958)
(536,251) $

(483,967)
(56,254)
430
(539,791)

Sections 382 and 383 of the Code limits, for U.S. federal income tax purposes, the annual use of NOL carryforwards (including previously disallowed interest
carryforwards) and tax credit carryforwards, respectively, following an ownership change. Under Code Section 382, a company has undergone an ownership
change if shareholders owning at least 5% of the company have increased their collective holdings by more than 50% during the prior three-year period. Based on
information that is publicly available, the Company determined that a Section 382 ownership change occurred on July 23, 2019 as a result of the Equitization
Transactions described in Part II, Item 7, Liquidity and Capital Resources, 2019 Rights Offering. As a result of this change in ownership, the Company estimated
that the future utilization of our federal NOLs (and certain credits and previously disallowed interest deductions) will become limited to approximately $1.2
million annually ($0.3 million tax effected) The Company maintains a full valuation allowance on its U.S. deferred tax assets, including the deferred tax assets
associated with the federal NOLs, credits and disallowed interest carryforwards.

Undistributed earnings of certain foreign subsidiaries amounted to approximately $222.4 million. The Company no longer intends to assert indefinite reinvestment
with respect to withholding taxes of $1.1 million that could be assessed on the repatriation of $14.3 million in undistributed earnings. The Company continues to
assert indefinite reinvestment in the remaining $208.1 million of existing earnings that are not expected to be distributed in the future. Upon repatriation of those
earnings, in the form of dividends or otherwise, the Company would be subject to withholding taxes payable to the various foreign countries. The Company expects
to take the 100% dividends received deduction to offset any U.S. federal taxable income on the undistributed earnings. Withholding taxes of approximately $2.8
million would be payable upon remittance of these previously unremitted earnings.

We recognize the benefit of a tax position when we conclude that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon
examination. A recognized tax benefit is measured as the largest amount of benefit, on a cumulative probability basis, which is more likely-than-not to be realized
upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

Below is a tabular rollforward of the beginning and ending aggregate unrecognized tax benefits:

(in thousands)
Balance at beginning of period
Increases based on tax positions taken in the current year
Increases based on tax positions taken in prior years
Decreases based on tax positions taken in prior years
Decreases due to settlements with tax authorities
Decreases due to lapse of applicable statute of limitation
Balance at end of period

Year ended December 31,

2020

2019

1,229 $
37,900
—
(29)
—
(87)
39,013 $

1,500
29
27
(223)
—
(104)
1,229

Unrecognized tax benefits of $0.8 million would, if recognized, impact the effective tax rate. The remaining balance of unrecognized tax benefits relates to
deferred tax assets that, if recognized, would require a full valuation allowance. It is not expected that the amount of unrecognized tax benefits will change
significantly during the next 12 months. We recognize interest and penalties related to unrecognized tax benefits in our provision for income taxes; however, such
amounts are not significant to any period presented.

Tax years 2015 through 2019 remain open to assessment by the United States Internal Revenue Service and various state and international tax authorities. With few
exceptions, we do not have any returns under examination for years prior to 2014. The United States Internal Revenue Service has completed examinations of the
federal tax returns of our former parent, BWXT, through 2014, and all matters arising from such examinations have been resolved.

NOTE 19 – 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 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 is currently in discovery. We believe that
the outcome of the Stockholder Litigation will not have a material adverse impact on our consolidated financial condition, results of operations or cash flows, net
of any insurance coverage.

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 consolidated financial condition, results of operations or cash flows.

NOTE 20 – COMPREHENSIVE INCOME

Gains and losses deferred in accumulated other comprehensive income (loss) (“AOCI”) are generally reclassified and recognized in the Consolidated Statements of
Operations once they are realized. The changes in the components of AOCI, net of tax, for the year ended December 31, 2020 and 2019 were as follows:

(in thousands)
Balance at December 31, 2018

Other comprehensive income (loss) before reclassifications
Reclassified from AOCI to net income (loss)
Amounts reclassified from AOCI to advanced billings on contracts
Net other comprehensive income (loss)

Balance at December 31, 2019

Other comprehensive loss before reclassifications
Reclassified from AOCI to net income (loss)
Net other comprehensive loss

Balance at December 31, 2020

Currency
translation (loss)
gain

Net unrealized gain
(loss) on derivative
instruments

Net unrecognized
loss related to
benefit plans

Total

(10,834) $

1,362 $

13,401
3,176
—
16,577
5,743 $

(53,318)
—
(53,318)
(47,575) $

(1,367)
202
(197)
(1,362)

— $

—
—
—
— $

(1,960) $

—
(1,857)
—
(1,857)
(3,817) $

—
(998)
(998)
(4,815) $

(11,432)

12,034
1,521
(197)
13,358
1,926

(53,318)
(998)
(54,316)
(52,390)

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

AOCI component

Line items in the Consolidated Statements of Operations
affected by reclassifications from AOCI

Release of currency translation gain with the sale of business
Derivative financial instruments
Amortization of prior service cost on benefit obligations

Loss on sale of business
Other – net
Benefit plans, net

Year ended December 31,

2020

2019

$
$
$

— $
— $
998 $

(3,176)
(202)
1,857

NOTE 21 – 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)
Available-for-sale securities
Corporate notes and bonds
Mutual funds
Corporate Stocks
United States Government and agency securities
Total fair value of available-for-sale securities

(in thousands)
Available-for-sale securities
Corporate notes and bonds
Mutual funds
United States Government and agency securities
Total fair value of available-for-sale securities

Available-For-Sale Securities

December 31, 2020

Level 1

Level 2

6,139 $
636
4,168
4,365
15,308 $

6,139 $
—
4,168
4,365
14,672 $

December 31, 2019

Level 1

Level 2

8,310 $
587
3,868
12,765 $

8,310 $
—
3,868
12,178 $

—
636
—
—
636

—
587
—
587

Our investments in available-for-sale securities are presented in other assets on our Consolidated Balance Sheets with contractual maturities ranging from 0-6
years.

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 Consolidated
Balance Sheets for cash and cash equivalents and restricted cash and cash equivalents approximate their fair values due to their highly liquid nature.
• Revolving debt and Last Out Term Loans. 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 debt instruments approximated their carrying
value at December 31, 2020 and 2019.

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

NOTE 22 – RELATED PARTY TRANSACTIONS

The Letter Agreement entered into on April 5, 2019, pursuant to which the parties agreed to use their reasonable best efforts to effect a series of equitization
transactions for a portion of the Last Out Term Loans, between B. Riley, Vintage and the Company included agreement to negotiate one or more agreements that
provide B. Riley and Vintage with certain governance rights, including (i) the right for B. Riley and Vintage to each nominate up to three individuals to serve on
our board of directors, subject to certain continued lending and equity ownership thresholds and (ii) pre-emptive rights permitting B. Riley to participate in future
issuances of our equity securities. The Company also entered into a Registration Rights Agreement with B. Riley and Vintage on April 30, 2019 providing each
with certain customary registration rights for the shares of our common stock that they hold. On April 30, 2019, the Company entered into an Investor Rights
Agreement with B. Riley and Vintage providing the governance rights contemplated by the Letter Agreement.

Transactions with B. Riley

Based on its Schedule 13D filings, B. Riley beneficially owns 32.5% of our outstanding common stock as of December 31, 2020.

B. Riley is party to the Last Out Term Loans as described in Note 15 and also provided the B. Riley Guaranty as described in Note 14.

In connection with the B. Riley Guaranty, the Company entered into the Fee and Interest Equitization Agreement described in Note 14. Under the Equitization
Agreement the Company issued 1.7 million shares of unregistered common stock on June 8, 2020, 1.2 million shares of unregistered common stock on June 30,
2020, 2.3 million shares of unregistered common stock on September 30, 2020 and 2.4 million shares of unregistered common stock on December 31, 2020 to B.
Riley in satisfaction of the B. Riley Guaranty Fee and payment of certain interest payments described in Note 14. All of these issued shares are unregistered.

We entered an agreement with BRPI Executive Consulting, LLC, an affiliate of B. Riley, on November 19, 2018 for the services of Mr. Kenny Young, to serve as
our Chief Executive Officer until November 30, 2020, unless terminated by either party with thirty days written notice. On November 9, 2020 we amended the
agreement with BRPI Executive Consulting, LLC to extend the services of Mr. Kenny Young to serve as our Chief Executive Officer until December 31, 2023.
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. In June 2019, we granted a total
of $2.0 million in cash bonuses to BRPI Executive Consulting LLC for Mr. Young's performance and services. In April 2020, we temporarily deferred the monthly
fee paid to BRPI Executive Consulting, LLC for the services of our Chief Executive Officer by 50% as described in Note 1.

Total fees associated with B. Riley related to the Last Out Term Loans and services of Mr. Kenny Young, both as described above, were $7.4 million and $12.4
million for the years ended December 31, 2020 and 2019, 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 subsequently sold in January 2021 for which the
Company recognized net proceeds of $4.5 million.

On August 10, 2020, B. Riley Financial, Inc. entered into a project specific indemnity rider (the “Indemnity Rider”) to the General Agreement of Indemnity, dated
May 28, 2015, between us and Berkley Insurance Company (the “Surety”). Pursuant to the terms of the Indemnity Rider, B. Riley will indemnify the Surety for
losses the Surety may incur as a result of providing a payment and performance bond in an aggregate amount not to exceed $30.0 million in connection with our
proposed performance on a specified project. In consideration of B. Riley's execution of the Indemnity Rider, we paid B. Riley a fee of $0.6 million following the
issuance of the bond by the Surety, which represents approximately 2.0% of the bonded obligations. Under the A&R Credit Agreement, any draw or claim under
the Indemnity Rider will convert into a Tranche A-5 Last Out Term Loan for the benefit of B. Riley.

Refer to Note 14 and Note 15 for additional related party transactions with B. Riley and its affiliates related to our Revolving Debt and Last Out Term Loans. Refer
to Note 25 for additional related party transactions with B. Riley and its affiliates regarding the subsequent events in conjunction with the 2021 Common Stock
Offering, 2021 Senior Notes Offering, 2021 Exchange Agreement and payment of $75 million towards our existing Last Out Term Loans.

Transactions with Vintage Capital Management, LLC

Based on its Schedule 13D filings, Vintage beneficially owns 19.7% of our outstanding common stock as of December 31, 2020.

NOTE 23 – ASSETS HELD FOR SALE, DIVESTITURES AND DISCONTINUED OPERATIONS

Assets Held for Sale

Assets held for sale are required to be recorded at the lower of carrying value or fair value less any costs to sell.

In December 2020, we determined that certain fixed assets 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 assets held for sale was lower than the estimated fair value less costs to sell.

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. The sale closed March 8, 2021.

The sale of the fixed assets and the divestiture of the business held for sale could result in a gain or loss on sale to the extent the ultimate selling price differs from
the current carrying value of the net assets recorded. The sales are expected to be completed in 2021.

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

(in thousands)
Accounts receivable – trade, net
Accounts receivable – other
Contracts in progress
Inventories
Other current assets
Current assets held for sale

Net property, plant and equipment
Intangible assets
Right-of-use-asset
Non-current assets held for sale

Total assets held for sale

Accounts payable
Accrued employee benefits
Advance billings on contracts
Accrued warranty expense
Operating lease liabilities
Other accrued liabilities
Current liabilities held for sale

Assets Held for Sale - Subsequent Event

December 31, 2020

December 31, 2019

2,103 $
86
458
1,676
405
4,728

10,365
759
32
11,156

5,472
147
586
1,555
329
8,089

6,534
725
63
7,322

15,884 $

15,411

5,211 $
178
370
466
32
2,048
8,305 $

7,898
430
227
515
6
462
9,538

On January 21, 2021, we entered into a definitive agreement for the sale of a small business within the B&W Thermal segment that was classified as held for sale
for a total sales price of $2.8 million. The sale closed on March 8, 2021.

Divestitures

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

Effective May 31, 2019, we sold all of the issued and outstanding capital stock of Loibl, a material handling business in Germany, to Lynx Holding GmbH for
€10.0 million (approximately $11.4 million), subject to adjustment. We received $7.4 million in cash and recognized a $3.6 million pre-tax loss on sale of this
business in 2019, net of $0.7 million in transaction costs. Proceeds from the transaction were primarily used to reduce outstanding balances under our U.S.
Revolving Credit Facility.

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 24 – NEW ACCOUNTING STANDARDS

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

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 in this update are 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. For all other entities, the amendments are 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, including interim periods within those fiscal years. We are currently evaluating the impact of the standard on our consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform of Financial Reporting.
The amendments in this update provide 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 this update 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 amendments 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 this update 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 standard on our consolidated financial statements.

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. For public
business entities, the amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of
the amendments is permitted, including adoption in any interim period for public business entities for periods in which financial statements have not yet been
issued. We are currently evaluating the impact of the standard on our consolidated financial statements, however, we do not expect the adoption of this update will
have a material impact.

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) model, and applies to financial assets measured at amortized cost, including loans,

100

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 consolidated financial statements.

NOTE 25– SUBSEQUENT EVENTS

2021 Common Stock Offering

On February 12, 2021, we completed a public offering of our common stock, par value $0.01 per share (“Common Stock”). The offering was conducted pursuant
to an underwriting agreement (the “Underwriting Agreement”) dated February 9, 2021, between us and B. Riley Securities, Inc., as representative of the several
underwriters (the “Underwriters”). At the closing, we issued 29,487,180 shares of Common Stock, inclusive of 3,846,154 shares of Common Stock issued pursuant
to the full exercise of the Underwriter’s option to purchase Common Stock. We received gross proceeds of approximately $172.5 million from the 2021 common
stock offering. Net proceeds received were approximately $163 million after deducting underwriting discounts and commissions, but before expenses.

2021 Senior Notes Offering

On February 12, 2021, we completed a public offering of $120 million aggregate principal amount of our 8.125% senior notes due 2026 (the “Senior Notes”). The
offering was conducted pursuant to an underwriting agreement (the “Notes Underwriting Agreement”) dated February 10, 2021, between us and B. Riley
Securities, Inc., as representative of the several underwriters (the “Underwriters”). At the completion, we received gross proceeds of approximately $125 million
aggregate principal amount of Senior Notes, inclusive of $5 million aggregate principal amount of Senior Notes issued pursuant to the full exercise of the
Underwriter’s option to purchase Senior Notes. Net proceeds received were approximately $120 million after deducting underwriting discounts and commissions,
but before expenses.

In addition to the public offering, we issued $35 million of Senior Notes to B. Riley Financial, Inc. in exchange for a deemed prepayment of our existing Last Out
Term Loan' Tranche A-3 in a concurrent private offering,

101

2021 Exchange Agreement

On February 12, 2021, the Company and B. Riley entered into a letter agreement (the “Exchange Agreement”) pursuant to which we agreed to issue to B. Riley
$35 million aggregate principal amount of Senior Notes in exchange for a deemed prepayment of $35 million of our existing Tranche A term loan with B. Riley
Financial (the “Exchange”). The Exchange Agreement also provides that, promptly following the date of the Exchange Agreement, the parties thereto will
negotiate in good faith and use commercially reasonable efforts to enter into an agreement providing B. Riley or its designated affiliates with customary
registration rights in respect of the Senior Notes issued to B. Riley in the Exchange.

Amendments to the A&R Credit Agreement

U.S. Revolving Credit Facility

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

Related Parties

The Common Stock offering was conducted pursuant to an underwriting agreement dated February 9, 2021, between us and B. Riley Securities, Inc., as
representative of the several underwriters. At the closing date on February 12, 2021, we issued 3,846,154 shares of Common Stock to B. Riley Securities, Inc.
pursuant to the full exercise of the Underwriter’s option to purchase common stock. We received gross proceeds of approximately $22.5 million for the common
stock issued to B. Riley Securities, Inc.. Also on February 12, 2021, we paid B. Riley Securities, Inc. $9.5 million for underwriting fees and other transaction cost
related to the Common Stock offering.

102

The Senior Notes offering was conducted pursuant to an underwriting agreement dated February 10, 2021, between us and B. Riley Securities, Inc., as
representative of several underwriters. At the closing date on February 12, 2021, we received gross proceeds of approximately $5.0 million for the senior notes
issued to B. Riley Securities, Inc.. Also on February 12, 2021, we paid B. Riley Securities, Inc. $5.2 million for underwriting fees and other transaction cost related
to the Senior Notes offering.

On February 12, 2021, the Company and B. Riley entered into a Letter Agreement (the “Exchange Agreement”) pursuant to which we agreed to issue to B. Riley
$35 million aggregate principal amount of Senior Notes in exchange for a deemed prepayment of $35 million of our existing Tranche A term loan with B. Riley
Financial (the “Exchange”).

103

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. 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, which, 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 December 31, 2020 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.

104

Management's Report on Internal Control Over Financial Reporting

B&W's management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)
under the Securities Exchange Act of 1934, as amended). Our internal control over financial reporting includes, among other things, policies and procedures for
conducting business, information systems for processing transactions and an internal audit department. Mechanisms are in place to monitor the effectiveness of our
internal control over financial reporting and actions are taken to remediate identified internal control deficiencies. Our procedures for financial reporting include
the involvement of senior management, our Audit and Finance Committee and our staff of financial and legal professionals. Our financial reporting process and
associated internal controls were designed to provide reasonable assurance to management and the Board of Directors regarding the reliability of financial
reporting and the preparation of our Consolidated Financial Statements for external reporting in accordance with accounting principles generally accepted in the
United States of America.

Management, with the participation of our principal executive and financial officers, assessed the effectiveness of our internal control over financial reporting as of
December 31, 2020. Management based its assessment on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework). Because of its inherent limitations, a system of internal control over financial reporting can provide
only reasonable assurance as to its effectiveness and may not prevent or detect misstatements. Further, because of changing conditions, effectiveness of internal
control over financial reporting may vary over time. Based on our assessment, management has concluded that B&W's internal control over financial reporting was
effective at the reasonable assurance level described above as of December 31, 2020.

105

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended December 31, 2020 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 on our internal controls to ensure their operating effectiveness.

Item 9B. Other Information

Not applicable.

Item 10. Directors, Executive Officers and Corporate Governance

PART III

The information required by this item with respect to directors is incorporated by reference to the material appearing under the heading “Election of Directors” in
the Proxy Statement for our 2021 Annual Meeting of Stockholders. The information required by this item with respect to compliance with section 16(a) of the
Securities and Exchange Act of 1934, as amended, is incorporated by reference to the material appearing under the heading “Section 16(a) Beneficial Ownership
Compliance” in the Proxy Statement for our 2021 Annual Meeting of Stockholders. The information required by this item with respect to the Audit Committee and
Audit and Finance Committee financial experts is incorporated by reference to the material appearing in the “Director Independence” and “Audit and Finance
Committee” sections under the heading “Corporate Governance –Board of Directors and Its Committees” in the Proxy Statement for our 2021 Annual Meeting of
Stockholders.

We have adopted a Code of Business Conduct for our employees and directors, including, specifically, our chief executive officer, our chief financial officer, our
chief accounting officer, and our other executive officers. Our code satisfies the requirements for a “code of ethics” within the meaning of SEC rules. A copy of the
code is posted on our web site, www.babcock.com under “Investor Relations – Corporate Governance – Highlights.” We intend to disclose promptly on our
website any amendments to, or waivers of, the code covering our chief executive officer, chief financial officer and chief accounting officer.

EXECUTIVE OFFICERS

Our executive officers and their ages as of March 1, 2021, are as follows:

Name
Kenneth Young
Louis Salamone
Jimmy B. Morgan
John J. Dziewisz
Robert M. Caruso

Age

57
74
52
55
58

Position
Chairman and Chief Executive Officer
Executive Vice President, Chief Financial Officer and Chief Accounting Officer
Chief Operating Officer
Senior Vice President and Corporate Secretary
Chief Implementation Officer

Kenneth Young has served as our Chief Executive Officer since November 2018 and as the Chairman of our Board of Directors since September 2020. Mr. Young
also serves as the President of B. Riley Financial, Inc. (“B. Riley”), a provider of collaborative financial services and solutions, since July 2018, and as Chief
Executive Officer of B. Riley’s subsidiary, B. Riley Principal Investments, since October 2016. From August 2008 to March 2016, Mr. Young served as the
President and Chief Executive Officer of Lightbridge Communications Corporation (f/k/a LCC International, Inc.), a provider of integrated end-to-end solutions for
wireless voice and data communications networks. Mr. Young has served as a member of the boards of directors of Globalstar, Inc. since 2015, Orion Energy
Systems, Inc. since 2017, Liberty Tax, Inc. since 2018 and bebe stores, inc. since 2018. Mr. Young previously served as a member of the boards of directors of B.
Riley from 2015 to 2016 and Standard Diversified Opportunities Inc. from 2015 to 2017.
Louis Salamone has served as our Executive Vice President, Chief Financial Officer and Chief Accounting Officer since August 2019. Before that, Mr. Salamone
served as our Chief Financial Officer since February 2019. Prior to that, Mr.

106

Salamone served as the Company's Executive Vice President of Finance since November 2018. Mr. Salamone also served as an advisor to MDx Diagnostics, LLC,
a provider of medical devices, from December 2017 until February 2019. From April 2013 until December 2017, Mr. Salamone served as Chief Financial Officer
of CityMD, an urgent care provider. Prior to joining CityMD, Mr. Salamone was Vice President and Chief Financial Officer of OpenPeak Inc., a provider of
mobile cybersecurity solutions, from April 2009 until March 2013, and Executive Vice President and Chief Financial Officer of LCC, from June 2006 until April
2009.
Jimmy B. Morgan has served as our Chief Operating Officer of The Babcock & Wilcox Company since August 2020. He has also served as Managing Director of
our Babcock & Wilcox Vølund subsidiary since Mach 2020. Previously, Mr. Morgan served as our Senior Vice President, Babcock & Wilcox from January 2019
to August 2020. From December 2016 until January 2019, Mr. Morgan served as Senior Vice President, Renewable, including our Babcock & Wilcox Vølund
subsidiary and Babcock & Wilcox's operations and maintenance services businesses. From August 2016 to December 2016, he served as Senior Vice President,
Operations. He was Vice President, Operations from May 2016 to August 2016 and was Vice President and General Manager of Babcock & Wilcox Construction
Co., Inc. from February 2016 to May 2016. Before joining Babcock & Wilcox, he was President for Allied Technical Resources, Inc., a technical staffing company,
from September 2013 to January 2016. Previous positions included serving as Chief Operating Officer with BHI Energy, Vice President of Installation and
Modification Services with Westinghouse Electric Company, and as Managing Director for AREVA T&D. He began his career with Duke Energy.

John J. Dziewisz has served as our Senior Vice President and Corporate Secretary since February 1, 2020. He also serves as the Company’s Chief Compliance
Officer and the General Counsel of The Babcock & Wilcox Company. Previously, Mr. Dziewisz served as our Vice President, Assistant General Counsel & Chief
Compliance Officer from January 2019 to February 2020. From June 2013 until January 2019, Mr. Dziewisz served as Assistant General Counsel, Operations &
Intellectual Property. From June 2005 until June 2013, Mr. Dziewisz served as Managing Attorney with the Company. Mr. Dziewisz joined the Company in 1997.

Robert M. Caruso has served as our Chief Implementation Officer since April 2018. He works closely with the Company’s executive leadership team to review
financial and operational strategies, and revenue and profitability enhancement opportunities. Mr. Caruso also serves as a Managing Director of Alvarez & Marsal's
North American Commercial Restructuring practice (“NACR”) since September 2006. He is a member of the NACR Executive Committee and co-leads
the NACR Midwest Region.
Item 11. Executive Compensation

The information required by this item is incorporated by reference to the material appearing under the headings “Compensation of Directors” and “Compensation
of Executive Officers” in the Proxy Statement for our 2021 Annual Meeting of Stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table provides information on our equity compensation plans as of December 31, 2020:

(share data in thousands)

Equity Compensation Plan Information

Plan Category
Number of securities to be issued upon exercise of outstanding options and rights
Weighted-average exercise price of outstanding options and rights
Number of securities remaining available for future issuance

Equity compensation plans approved by
security holders
4,106
$12.00
965

The other information required by this item is incorporated by reference to the material appearing under the headings “Security Ownership of Directors and
Executive Officers” and “Security Ownership of Certain Beneficial Owners” in the Proxy Statement for our 2021 Annual Meeting of Stockholders.

107

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information required by this item is incorporated by reference to the material appearing under the headings “Corporate Governance – Director Independence” and
“Certain Relationships and Related Transactions” in the Proxy Statement for our 2021 Annual Meeting of Stockholders.

Item 14. Principal Accountant Fees and Services

The information required by this item is incorporated by reference to the material appearing under the heading “Ratification of Appointment of Independent
Registered Public Accounting Firm for Year Ending December 31, 2021” in the Proxy Statement for our 2021 Annual Meeting of Stockholders.

Item 15. Exhibits

PART IV

2.1*

3.1

3.2

3.3

3.4

4.1

4.2

4.3

4.4

4.5

10.1

10.2

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)).

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)).

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)).

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)).

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

Form of Warrant (incorporated by reference to Exhibit 4.1 of the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on
July 24, 2019 (File No. 001-36876)).

Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.2
of the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 001-36876)).

Indenture dated February 12, 2021 (incorporated by reference to Exhibit 4.1 to the Babcock & Wilcox Enterprises, Inc. Current Report on
Form 8-K filed on February 12, 2021 (File No. 001-36876))

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

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

Tax Sharing Agreement, dated as of June 8, 2015, by and between The Babcock & Wilcox Company and Babcock & Wilcox Enterprises, Inc.
(incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended
June 30, 2015 (File No. 001-36876)).

Employee Matters Agreement, dated as of June 8, 2015, by and between The Babcock & Wilcox Company and Babcock & Wilcox
Enterprises, Inc. (incorporated by reference to Exhibit 10.2 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the
quarter ended June 30, 2015 (File No. 001-36876)).

108

10.3

10.4

10.5

10.6

10.7

10.8†

10.9†

10.10†

10.11†

10.12†

10.13

10.14

10.15

Transition Services Agreement, dated as of June 8, 2015, between The Babcock & Wilcox Company, as service provider, and Babcock &
Wilcox Enterprises, Inc., as service receiver (incorporated by reference to Exhibit 10.3 to the Babcock & Wilcox Enterprises, Inc. Quarterly
Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876)).

Transition Services Agreement, dated as of June 8, 2015, between Babcock & Wilcox Enterprises, Inc., as service provider, and The
Babcock & Wilcox Company, as service receiver (incorporated by reference to Exhibit 10.4 to the Babcock & Wilcox Enterprises, Inc.
Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876)).

Assumption and Loss Allocation Agreement, dated as of June 19, 2015, by and among ACE American Insurance Company and the Ace
Affiliates (as defined therein), Babcock & Wilcox Enterprises, Inc. and The Babcock & Wilcox Company (incorporated by reference to
Exhibit 10.5 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-
36876)).

Reinsurance Novation and Assumption Agreement, dated as of June 19, 2015, by and among ACE American Insurance Company and the
Ace Affiliates (as defined therein), Creole Insurance Company and Dampkraft Insurance Company (incorporated by reference to Exhibit
10.6 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876)).

Novation and Assumption Agreement, dated as of June 19, 2015, by and among The Babcock & Wilcox Company, Babcock & Wilcox
Enterprises, Inc., Dampkraft Insurance Company and Creole Insurance Company (incorporated by reference to Exhibit 10.7 to the Babcock
& Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876)).

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

Babcock & Wilcox Enterprises, Inc. Executive Incentive Compensation Plan (incorporated by reference to Exhibit 10.9 to the Babcock &
Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876)).

Babcock & Wilcox Enterprises, Inc. Management Incentive Compensation Plan (incorporated by reference to Exhibit 10.10 to the Babcock
& Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876)).

Supplemental Executive Retirement Plan of Babcock & Wilcox Enterprises, Inc. (incorporated by reference to Exhibit 10.11 to the Babcock
& Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876)).

Babcock & Wilcox Enterprises, Inc. Defined Contribution Restoration Plan (incorporated by reference to Exhibit 10.12 to the Babcock &
Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876)).

Intellectual Property Agreement, dated as of June 26, 2015, between Babcock & Wilcox Power Generation Group, Inc. and BWXT Foreign
Holdings, LLC (incorporated by reference to Exhibit 10.13 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for
the quarter ended June 30, 2015 (File No. 001-36876)).

Intellectual Property Agreement, dated as of June 27, 2015, between Babcock & Wilcox Technology, Inc. and Babcock & Wilcox
Investment Company (incorporated by reference to Exhibit 10.14 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-
Q for the quarter ended June 30, 2015 (File No. 001-36876)).

Intellectual Property Agreement, dated as of May 29, 2015, between Babcock & Wilcox Canada Ltd. and B&W PGG Canada Corp.
(incorporated by reference to Exhibit 10.15 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended
June 30, 2015 (File No. 001-36876)).

109

10.16

10.17

10.18†

10.19†

10.20†

10.21†

10.22†

10.23

10.24

10.25†

10.26†

10.27

10.28†

Intellectual Property Agreement, dated as of May 29, 2015, between Babcock & Wilcox mPower, Inc. and Babcock & Wilcox Power
Generation Group, Inc. (incorporated by reference to Exhibit 10.16 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-
Q for the quarter ended June 30, 2015 (File No. 001-36876)).

Intellectual Property Agreement, dated as of June 26, 2015, between The Babcock & Wilcox Company and Babcock & Wilcox Enterprises,
Inc. (incorporated by reference to Exhibit 10.17 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter
ended June 30, 2015 (File No. 001-36876)).

Form of Change-in-Control Agreement, by and between Babcock & Wilcox Enterprises, Inc. and certain officers for officers elected prior to
August 4, 2016 (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the
quarter ended September 30, 2016 (File No. 001-36876)).

Form of Restricted Stock Grant Agreement (Spin-off Award) (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox
Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (File No. 001-36876)).

Form of Restricted Stock Units Grant Agreement (incorporated by reference to Exhibit 10.2 to the Babcock & Wilcox Enterprises, Inc.
Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (File No. 001-36876)).

Form of Stock Option Grant Agreement (incorporated by reference to Exhibit 10.3 to the Babcock & Wilcox Enterprises, Inc. Quarterly
Report on Form 10-Q for the quarter ended September 30, 2015 (File No. 001-36876)).

Form of Performance Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.23 to the Babcock & Wilcox Enterprises,
Inc. Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 001-36876)).

Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.24 to the Babcock & Wilcox Enterprises,
Inc. Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 001-36876)).

Form of Change-in-Control Agreement, by and between Babcock & Wilcox Enterprises, Inc. and certain officers for officers elected on or
after August 4, 2016 (incorporated by reference to Exhibit 10.2 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q
for the quarter ended September 30, 2016 (File No. 001-36876)).

Form of Performance Unit Award Grant Agreement (Cash Settled) (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox
Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 (File No. 001-36876)).

Form of Special Restricted Stock Unit Award Grant Agreement (incorporated by reference to Exhibit 10.2 to the Babcock & Wilcox
Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 (File No. 001-36876)).

Babcock & Wilcox Enterprises, Inc., Severance Plan, as revised effective June 1, 2018 (incorporated by reference to the Babcock & Wilcox
Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (File No. 001-36876)).

Consulting Agreement dated November 19, 2018 between Babcock & Wilcox Enterprises, Inc., and BRPI Executive Consulting
(incorporated by reference to Exhibit 10.49 of the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended
December 31, 2018 (File No. 001-36876)).

110

10.29†

10.30†

10.31†

10.32

10.33

10.34

10.35

10.36

10.37

10.38

10.39

10.40

Executive Employment Agreement dated November 19, 2018 between Babcock & Wilcox Enterprises, Inc. and Louis Salamone
(incorporated by reference to Exhibit 10.50 of the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended
December 31, 2018 (File No. 001-36876)).

Executive Employment Agreement dated November 19, 2018 between Babcock & Wilcox Enterprises, Inc. and Henry Bartoli, as amended
(incorporated by reference to Exhibit 10.30 of the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended
December 31, 2019 (File No. 001-36876)).

Form of Stock Appreciation Right Award Grant Agreement (incorporated by reference to Exhibit 10.52 of the Babcock & Wilcox
Enterprises, Inc. Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 001-36876)).

Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the borrower, Bank of America, N.A., as
Administrative Agent, and the Other Lenders Party Thereto (incorporated by reference to Exhibit 10.18 to the Babcock & Wilcox
Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 001-36876)).

Amendment No. 1 dated June 10, 2016 to Credit Agreement, dated May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the
Borrower, Bank of America, N.A., as Administrative Agent, and the other Lenders party thereto (incorporated by reference to Exhibit 10.1
to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (File No. 001-36876)).

Amendment No. 2 dated February 24, 2017 to Credit Agreement, dated May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the
Borrower, Bank of America, N.A., as Administrative Agent, and the other Lenders party thereto (incorporated by reference to Exhibit 10.1
to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (File No. 001-36876)).

Amendment No. 3 dated August 9, 2017, to Credit Agreement dated May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the
Borrower, Bank of America, N.A., as administrative Agent and Lender, and the other Lenders party thereto (incorporated by reference to
Exhibit 10.1 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 (File No.
001-36876)).

Amendment No. 4 dated September 30, 2017, to Credit Agreement dated May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the
Borrower, Bank of America, N.A., as administrative Agent and Lender, and the other Lenders party thereto (incorporated by reference to
Exhibit 10.3 to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 (File No.
001-36876)).

Amendment No. 5 dated March 1, 2018, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the
borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to the Babcock &
Wilcox Enterprises, Inc. Current Report on Form 8-K filed March 5, 2018 (File No. 001-36876)).

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

Consent and Amendment No. 7 dated May 31, 2018, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox
Enterprises, Inc., as the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by
reference to the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (File No. 001-
36876)).

Amendment No. 8 dated August 9, 2018, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the
borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to the Babcock &
Wilcox Enterprises, Inc. Current Report on Form 8-K filed August 13, 2018 (File No. 001-36876)).

111

10.41

10.42

10.43

10.44

10.45

10.46

10.47‡

10.48‡

10.49‡

10.50‡

10.51‡

Amendment No. 9 dated September 14, 2018, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc.,
as the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to the
Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (File No. 001-36876)).

Amendment No. 10 dated September 28, 2018, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc.,
as the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to the
Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (File No. 001-36876)).

Amendment No. 11 dated October 4, 2018, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as
the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to the
Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (File No. 001-36876)).

Amendment No. 12 dated October 31, 2018, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as
the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to the
Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (File No. 001-36876)).

Amendment No. 13 dated December 31, 2018, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc.,
as the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to Exhibit
10.47 of the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 001-
36876)).

Amendment No. 14 dated January 15, 2019 to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as
the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to Exhibit
10.48 of the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 001-
36876)).

Amendment No. 15 and Limited Waiver dated March 19, 2019 to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox
Enterprises, Inc., as the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by
reference to Exhibit 10.53 of the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended December 31, 2018
(File No. 001-36876)).

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

Amendment No. 17, dated August 7, 2019, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as
the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to Exhibit
10.49 of the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 001-
36876)).

Amendment No. 18, dated December 31, 2019, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc.,
as the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to Exhibit
10.50 of the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 001-
36876)).

Amendment No. 19, dated January 17, 2020, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as
the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to Exhibit
10.51 of the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 001-
36876)).

112

10.52‡

10.53

10.54

10.55†

10.56

10.57

10.58‡

10.59

10.60

10.61

10.62‡

10.63‡

10.64‡

Amendment No. 20, dated January 31, 2020, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as
the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to Exhibit
10.52 of the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 001-
36876)).

Investor Rights Agreement, dated as of April 30, 2019, by and among Babcock & Wilcox Enterprises, Inc., B. Riley FBR, Inc. and Vintage
Capital Management, LLC (incorporated by reference to Exhibit 10.4 of the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form
10-Q for the quarter ended June 30, 2019 (File No. 001-36876)).

Registration Rights Agreement, dated as of April 30, 2019, by and among Babcock & Wilcox Enterprises, Inc., and certain investors party
thereto (incorporated by reference to Exhibit 10.5 of the Babcock & Wilcox Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter
ended June 30, 2019 (File No. 001-36876)).

Form of 2019 Restricted Stock Units Director Grant Agreement (incorporated by reference to Exhibit 10.1 to the Babcock & Wilcox
Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 (File No. 001-36876)).

First Amendment to the Babcock & Wilcox Enterprises, Inc. Defined Contribution Restoration Plan. (incorporated by reference to Exhibit
10.56 of the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 001-
36876)).

Backstop Commitment Letter, dated January 31, 2020, between Babcock & Wilcox Enterprises, Inc. and B. Riley Financial, Inc.
(incorporated by reference to Exhibit 10.2 to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed on February 3, 2020
(File No. 001-36876)).

Amendment No. 21, dated March 27, 2020, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as
the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to Exhibit
10.58 of the Babcock & Wilcox Enterprises, Inc. Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 001-
36876)).

Amendment and Restatement Agreement (attaching the Amended and Restated Credit Agreement), dated as of May 14, 2020, among
Babcock & Wilcox Enterprises, Inc., as the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto
(incorporated by reference to Exhibit 10.1 of the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed May 15, 2020 (File
No. 001-36876)).

Form of 2021 Long-Term Cash Incentive Award Grant Agreement (incorporated by reference to Exhibit 10.10 to the Babcock & Wilcox
Enterprises, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 (File No. 001-36876)).

Amendment No. 1 to Amended and Restated Credit Agreement, dated as of October 30, 2020, among Babcock & Wilcox Enterprises, Inc.,
as the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to Exhibit
10.1 of the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed November 5, 2020 (File No. 001-36876)).

Second Amendment to Executive Services Agreement between Babcock & Wilcox Enterprises, Inc. and BRPI Executive Consulting, LLC
dated November 9, 2020 (incorporated by reference to Exhibit 10.1 of the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K
filed November 10, 2020 (File No. 001-36876)).

Third Amendment to Executive Employment Agreement between Babcock & Wilcox Enterprises, Inc. and Henry Bartoli dated November
5, 2020 (incorporated by reference to Exhibit 10.2 of the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed November
10, 2020 (File No. 001-36876)).

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

113

10.65‡

Settlement Agreement between Babcock & Wilcox Volund A/S and XL Insurance Company SE dated October 10, 2020.

10.66

10.67

10.68

21.1

23.1

31.1

31.2

32.1

32.2

101.SCH

101.CAL

101.LAB

101.PRE

101.DEF

104

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

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

Amendment No. 3 to Amended and Restated Credit Agreement by and between Babcock and Wilcox Enterprises Inc. and Bank of
America, N.A., as Administrative Agent, dated March 4 2021

Significant Subsidiaries of the Registrant.

Consent of Deloitte & Touche LLP.

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

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

Section 1350 certification of Chief Executive Officer.

Section 1350 certification of Chief Financial Officer.

XBRL Taxonomy Extension Schema Document.

XBRL Taxonomy Extension Calculation Linkbase Document.

XBRL Taxonomy Extension Label Linkbase Document.

XBRL Taxonomy Extension Presentation Linkbase Document.

XBRL Taxonomy Extension Definition Linkbase Document.

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.

† Management contract or compensatory plan or arrangement.

‡ The Company has omitted certain information contained in this exhibit pursuant to Rule 601(b)(10) of Regulation S-K. The omitted information is not material
and, if publicly disclosed, would likely cause competitive harm to the Company.

114

Allowance for Doubtful Accounts

(in thousands)
Balance at beginning of period
Charges to costs and expenses
Deductions
Currency translation adjustments and other
Balance at end of period

Deferred Tax Assets Valuation Allowance

(in thousands)
Balance at beginning of period
Charges to costs and expenses
Charges to other accounts
Balance at end of period

Inventory Reserves

(in thousands)
Balance at beginning of period
Charges to costs and expenses
Deductions
Held for sale
Currency translation adjustments and other
Balance at end of period

BABCOCK & WILCOX ENTERPRISES, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II

Year ended December 31,

2020

2019

25,071 $
(1,044)
(6,783)

(22) $
17,222 $

Year ended December 31,

2020

2019

539,791 $
(17,498)
13,958
536,251 $

Year ended December 31,

2020

2019

14,165 $
769
(867)
—
296
14,363 $

21,392
1,689
(371)
2,361
25,071

483,967
56,254
(430)
539,791

15,529
72
(141)
(1,384)
89
14,165

115

Item 16. Form 10-K Summary

None.

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.

SIGNATURES

BABCOCK & WILCOX ENTERPRISES, INC.

March 8, 2021

By:

/s/ Kenneth M. Young
Kenneth M. Young
Chairman and Chief Executive Officer

116

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

Signature

Title

/s/ Kenneth M. Young
Kenneth M. Young

Chairman and Chief Executive Officer
(Principal Executive Officer)

/s/ Louis Salamone
Louis Salamone

/s/ Henry E. Bartoli
Henry E. Bartoli

/s/ Alan B. Howe

Alan B. Howe

/s/Philip D. Moeller
Philip D. Moeller

/s/ Rebecca Stahl
Rebecca Stahl

/s/ Joseph A. Tato
Joseph A. Tato

March 8, 2021

Executive Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Financial and
Accounting Officer and Duly Authorized Representative)

Director

117

EXHIBIT 10.65

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I)
NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

DATE: 2020

SETTLEMENT AGREEMENT

Between

BABCOCK AND WILCOX VØLUND A/S

and

[ ]

CMS Cameron McKenna Nabarro Olswang LLP Cannon Place
78 Cannon Street London EC4N 6AF
T +44 20 7367 3000

645304040_8

F +44 20 7367 2000
cms.law

EXHIBIT 10.65

645304040_8

EXHIBIT 10.65

TABLE OF CONTENTS

DEFINITIONS AND INTERPRETATION 2

EFFECT OF THIS SETTLEMENT AGREEMENT 3

PAYMENT 3

RELEASE AND DISCHARGE 3

DISPOSAL OF PROCEEDINGS 4

COVENANT NOT TO SUE 4

COSTS 5

WARRANTIES AND AUTHORITIES 5

CONFIDENTIALITY 5

10.

11.

12.

ASSIGNMENT 6

VARIATION 6

SEVERABILITY 6

13.

14.

ENTIRE AGREEMENT 6

COUNTERPARTS 6

15.

GOVERNING LAW AND JURISDICTION 6

16.

SUCCESSORS AND ASSIGNS 6

17.

NO WAIVER 7

18. ENFORCEMENT………………………………………………………………………………...7

645304040_8

EXHIBIT 10.65

THIS SETTLEMENT AGREEMENT is made this

day of

2020

BETWEEN:

(1)

BABCOCK & WILCOX VØLUND A/S (company registration number 25053664) having its registered office at Odinsvej 19,
2600 Glostrup, Denmark, on its own behalf and on behalf of all insureds under the 2017 Policy and the 2018 Policy (“BWV”);
and

(2) [ ],

each a “Party” and together the “Parties”.

WHEREAS

(a)

(b)

(c)

(d)

(e)

BWV specialises in the manufacture, construction, maintenance and operation of renewable energy plants internationally.

BWV was engaged in relation to four projects in the UK, namely:

(i)

(ii)

(iii)

(iv)

The Teesside (or Port Clarence) Project – BWV entered into a joint venture with Lagan Construction Group Limited
(incorporating a joint venture entity – BWL Energy (Teesside) Limited) in relation to the Port Clarence Biomass Power
Plant, England (the “Teesside Project”);

The Margam Project – BWV entered into a consortium agreement with Interserve Construction Limited (“ICL”) in
relation to the Margam Biomass Plant, Wales (the “Margam Project”);

The Templeborough Project – BWV entered into a consortium agreement with ICL in relation to the Templeborough
Biomass Plant, Rotherham, England (the “Templeborough Project”); and

The Dunbar Project – BWV entered into a consortium agreement with ICL in relation to the Dunbar Energy-from-Waste
(EfW) Facility, Scotland (the “Dunbar Project”).

(collectively the “UK Projects”).

In addition, BWV constructed a waste to energy power plant in Copenhill, Denmark for Amager
Resource Center I/S (the “ARC Project”).

The UK Projects became significantly delayed and have been the subject of various third party claims, including claims against
BWV alleging negligence arising from its failure to perform its duties.

BWV has suffered loss in respect of the UK Projects and the ARC Project which it considers is covered under Professional
Indemnity Insurance Policies dated 7 February 2017 and 15 December 2017 respectively, issued by [ ] (the “2017 Policy” and
“2018 Policy”, together, the “Policies”); however, [ ] objected to the claims, and BWV has therefore referred a dispute to
arbitration.

(the “Dispute”).

(f)

BWV has notified 11 claims under the 2017 Policy and further two claims under the 2018 Policy in the total amount of
£69,021,108.21. Three claims under the 2017 Policy relate to a

fundamental design error by BWV leading to a beam failure at its Teesside Project and claims concerning defects in the beam
design at its Margam Project and Templeborough Project (the “Beam Claims”). The balance of the claims under the 2017 Policy
relate to structural, electrical and

EXHIBIT 10.65

piping engineering errors by BWV relating to the Teesside Project, Margam Project, Templeborough Project, and Dunbar Project
(the “Non-Beam Claims”). The claims made under the 2018 Policy relate to engineering failures arising out of BWV’s failure to
perform its services on (i) the Margam Project, and (ii) the ARC Project (the “2018 Claims”).

BWV has brought the Beam Claims, Non-Beam Claims, and 2018 Claims as set out in BWV’s Amended Statement of Claim
against [ ] in Danish Institute of Arbitration (“DIA”) proceedings [ ], arising out of or in connection with the Policies (the
"Proceedings").

The Parties now wish to fully and finally settle the Proceedings and the Dispute between the Parties in accordance with the terms
of this Settlement Agreement.

IT IS HEREBY AGREED AS FOLLOWS:

i..

ii..

iii..

iv..

v..

vi..

vii..

DEFINITIONS AND INTERPRETATION

In this Settlement Agreement, unless the context requires otherwise, the following words and expressions have the following

meanings:

“ARC Project” is given the meaning in Recital (C) above;

“Beam Claims” is given the meaning in Recital (F) above;

“CMS” means CMS Cameron McKenna Nabarro Olswang LLP, BWV’s legal

representative;

“Consent Award” means the consent award in the agreed form at Schedule 2;

“Consent Award Letter” means the letter at Schedule 1, in an agreed format, from the Parties to the Tribunal and DIA
confirming that the Parties have agreed to discontinue the Proceedings and requesting the Tribunal to issue a Consent
Award in the agreed form;

“DIA” is given the meaning in Recital (F) above;

“DIA Confirmation Letter” means the letter in Schedule 3, in an agreed format, to be sent to the Parties from the DIA,

confirming that the Consent Award is final and binding;

viii..

“Dispute” is given the meaning in Recital (E) above;

1.1.9 [ ];

Dunbar Project” is given the meaning in Recital (B) above;

“ICL” is given the meaning in Recital (B) above;

“Margam Project” is given the meaning in Recital (B) above;

“Non-Beam Claims” is given the meaning in Recital (F) above;

“Policies” is given the meaning in Recital (E) above;

“Proceedings” is given the meaning in Recital (G) above;

“Settlement Agreement” means this agreement;

“Settlement Sum” is given the meaning in paragraph 3.1 below;

“Released Claims” is given the meaning in paragraph 4.1 below;

x..

xi..

xii..

xiii..

xiv..

xv..

xvi..

xvii..

xviii..

xix..

“Teesside Project” is given the meaning in Recital (B) above;

EXHIBIT 10.65

ii.

iii.

iv.

vi.

“Templeborough Project” is given the meaning in Recital (B) above;

“Tribunal” refers to the arbitral tribunal, comprising Mr Stefan Lindskog, Mr Morten
Samuelsson and John Rowland QC, appointed in the Proceedings;

“UK Projects” is given the meaning in Recital (B) above;

“2017 Policy” is given the meaning in Recital (F) above;

“2018 Policy” is given the meaning in Recital (F) above; and

“2018 Claims” is given the meaning in Recital (F) above.

In this Settlement Agreement the headings are for convenience only and will not affect the interpretation of this Settlement
Agreement. The singular includes the plural and vice versa.

Unless otherwise defined within this Settlement Agreement, all capitalised terms will mean the same as the definitions set out in
the Subcontract.

EFFECT OF THIS SETTLEMENT AGREEMENT

The Parties agree that this Settlement Agreement shall become binding on the Parties as soon as each Party has executed the
Settlement Agreement.

This Settlement Agreement is only binding on the Parties and for the avoidance of doubt, does not compromise or in any way
affect any claims held or pursued against third parties.

SETTLEMENT SUM

The Settlement Sum is $ USD 26 million.

[ ] shall pay to BWV the Settlement Sum within fourteen calendar days of the date of this Settlement Agreement. Payment shall
be made by way of bank transfer to:

Further, as consideration in addition to the Settlement Sum, against reduced recovery under the Policies, BWV has hereby
acquired any rights of recourse, including rights of recourse arising as a consequence of this Settlement Agreement, [ ] may
have against third parties under the Policies and applicable law, including section 22 of the Danish Liability and Compensation
Act [in Danish: Erstatningsansvarsloven]. By signing this Settlement Agreement, [ ] irrevocably and unconditionally assigns [in
Danish: transport til eje] to BWV any and all rights of recourse as set out in this paragraph.

RELEASE AND DISCHARGE

This Settlement Agreement is in full and final settlement of the Proceedings and the Dispute, and each Party hereby irrevocably,
wholly and unconditionally releases, waives and forever discharges, all and/or any claims or circumstances (whether already
notified to [ ] or not), that it

]

has had, may have or hereafter can, shall or may have against the other Party, including but not limited to their holding
companies, subsidiaries, affiliates, directors or employees in connection

EXHIBIT 10.65

to the Dispute or under the Policies, including but not limited to any claims; and / or the underlying facts relating to the Dispute
(collectively the “Released Claims”).

EXHIBIT 10.65

5.1
DISPOSAL OF PROCEEDINGS

CMS and [ ] have agreed the form of letter, on behalf of

the Parties, in Schedule 1 with the following enclosures:

(a)

The Consent Award in the agreed form at
Schedule 2; and

EXHIBIT 10.65

(b)

The agreed form letter requesting the DIA
to confirm that the Consent Award is final
and binding at Schedule 3.

Within five days of [ ] paying the Settlement Sum referred to in paragraph 3.1 above, CMS shall send Schedules 1 (the Consent
Award Letter), Schedule 2 (the Consent Award) and Schedule 3 (the DIA Confirmation Letter) to the Tribunal and the DIA,
copying [ ].

For the avoidance of doubt, the Parties agree that the Consent Award shall be a final, binding and non-appealable determination,
and in agreeing such Consent Award, the Parties have waived any and all rights they may have to:

ii.

iii.

Challenge the jurisdiction of the Tribunal for any reason whatsoever;

Challenge the Consent Award on grounds of jurisdiction or for any other reason; and

Resist enforcement of the Consent Award for any reason and in any jurisdiction.

For the further avoidance of doubt, the Parties have agreed that none of the grounds for refusal of recognition and enforcement set
out in Article V of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards apply.

COVENANT NOT TO SUE

With effect from the date of this Settlement Agreement each Party agrees and undertakes not to commence, pursue, continue,
voluntarily aid in any way, encourage, prosecute or cause to be commenced, pursued, continued or prosecuted against any other
Party, or any of them, any action, suit or other proceedings concerning the Released Claims, in this jurisdiction or any other.

Nothing in this Settlement Agreement shall prevent either Party from taking action against the other in the event of any breach this

Settlement Agreement after the date of this Settlement Agreement.

COSTS

Each Party shall bear its own legal and other costs arising out of or in connection with this Settlement Agreement (including the

implementation of all matters provided by this Settlement Agreement).

Each Party shall bear 50% of the fees and expenses incurred by the Tribunal in the Proceedings and the DIA’s administrative

charges (including the registration fee(s)), to be determined by the DIA, pursuant to Schedules 1, 2 and 3 hereto.

WARRANTIES AND AUTHORITIES

Each Party expressly warrants and represents that:

i..

It has not sold, transferred, assigned or otherwise disposed of its interest in the Released Claims or of any rights of recourse,

as set out in paragraph 3.3, and irrevocably agrees

EXHIBIT 10.65

ii.

iii.

iv.

that it will not assign, transfer or otherwise dispose of its interest in the Released Claims of any rights of recourse, as set
out in paragraph 3.3 to any third parties;

It has the full right, capacity, power and authority to enter into, execute, deliver and perform this Settlement Agreement;

The individuals named below are authorised to sign this Settlement Agreement on its behalf;

This Settlement Agreement has been, or will be, duly authorised, executed and delivered by the Parties and constitutes,
or will when executed constitute, its legal, valid and binding obligations; and

The execution of this Settlement Agreement and compliance with its terms will not result in violation by any Party of its
constituent documents or of any provision contained in any agreement or instrument to which it is a party or by which it
is bound or in any statute, law, rule, regulation, judgment, decree or order applicable to it.

CONFIDENTIALITY

The terms of this Settlement Agreement and the substance of all negotiations in connection with this Settlement Agreement are
confidential to the Parties and their advisers, who shall not disclose them to, or otherwise communicate them to, any third party,
other than:

ii.

iii.

iv.

To the Parties’ respective auditors, insurers and reinsurers and legal advisers to the extent necessary to enable them to
perform their professional duties and on terms which preserve confidentiality;

To the extent required by any applicable law;

To the extent required to enforce any rights or defend any claims relating to or arising as a consequence of this
Settlement Agreement, against third parties, provided that such disclosure is relevant to the enforcement of such rights
or defence of such claims;

To the extent required by any order of a court or arbitral tribunal of competent jurisdiction or by any proper order or
demand made by any competent authority or body where the Party is under a legal or regulatory obligation to make such
a disclosure; and

To the extent required to implement and enforce any of the terms of the Settlement Agreement.

ASSIGNMENT

Neither Party may novate, assign the benefit or delegate the burden of this Settlement Agreement without the other Party's
consent, such consent cannot to be unreasonably withheld.

VARIATION

No variation of this Settlement Agreement shall be effective unless it is in writing and signed by or on behalf of the Parties.

SEVERABILITY

If any provision of this Settlement Agreement is found to be void or unenforceable, that provision shall be deemed to be deleted
from this Settlement Agreement and the remaining

provisions of this Settlement Agreement shall continue in full force and effect and the Parties shall use their respective reasonable
endeavours to procure that any such provision is replaced by a provision

EXHIBIT 10.65

which is valid and enforceable, and which gives effect to the spirit and intent of this Settlement Agreement.

ENTIRE AGREEMENT

This Settlement Agreement constitutes the entire understanding and agreement between the Parties and supersedes and
extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them,
whether written or oral, relating to its subject matter.

Each Party acknowledges and confirms that it has not entered into this Settlement Agreement in reliance wholly or partly on any
statement, representation assurance or warranty made by or on behalf of the other Party, whether orally or in writing, at any time
prior to the execution of this Settlement Agreement other than as expressly set out in this Settlement Agreement.

COUNTERPARTS

This Settlement Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of
which taken together shall constitute a single agreement.

GOVERNING LAW AND JURISDICTION

This Settlement Agreement shall be governed by and construed in accordance with the laws of Denmark, excluding any conflict
of law rules which may apply the laws of any other jurisdiction, and each party hereto agrees not to assert as a defence in any
proceedings that it is not subject to the laws of Denmark.

Any dispute arising out of or in connection with this Settlement Agreement, including any disputes regarding the existence,
validity or termination thereof, shall be settled by arbitration administrated by DIA in accordance with the rules of arbitration
procedure adopted by DIA and in force at the time when such proceedings are commenced.

The arbitral tribunal shall be composed of three arbitrators. The place of arbitration shall be Copenhagen, Denmark, and the
procedural language shall be English.

SUCCESSORS AND ASSIGNS

This Settlement Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and
assigns.

NO WAIVER

No failure by a Party to exercise, nor any delay by a Party in exercising, any right or remedy under this Settlement Agreement
shall operate as a waiver of it, nor shall any single or partial defective exercise by the Parties of any right or remedy prevent any
other or further exercise of that or any other right or remedy.

ENFORCEMENT

This Settlement Agreement can be subject to enforcement, including under Section 478 (1) (4) of the Danish Administration of
Justice Act.

EXHIBIT 10.65

We agree to the terms of this Settlement Agreement and I represent that I am duly authorised to sign it on behalf of Babcock & Wilcox
Vølund A/S.

Signed this 10 day of October 2020.

[......................................................]
Martin Oehlenschlæger (Exec. Director / Direktør) for and on behalf of Babcock & Wilcox Vølund A/S

Signed this 10 day of October 2020.

[......................................................]
Kasper Bjarnø Sinning (Supervisory Board Member/ Bestyrelsesmedlem) for and on behalf of Babcock & Wilcox Vølund A/S

We agree to the terms of this Settlement Agreement and I represent that I am duly authorised to sign it on behalf of [ ]

Signed this 12 day of October 2020.

[......................................................]
[ ]

Exhibit 10.68

Execution Version

AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT (this “ Amendment”), dated as of
March 4, 2021, is among BABCOCK & WILCOX ENTERPRISES, INC., a Delaware corporation (the “Borrower”), BANK OF
AMERICA, N.A., in its capacity as administrative agent for the Lenders (as defined in the Credit Agreement described below) (in
such capacity, the “Administrative Agent”), and each of the Lenders party hereto, for purposes of Sections 1, 2, 5(a), 6, and 8 hereof,
acknowledged and agreed by certain Subsidiaries of the Borrower, as Guarantors, and, for purposes of Section 5(b), B. Riley
Financial, Inc., as Limited Guarantor.

W I T N E S S E T H:

WHEREAS, the Borrower, the Administrative Agent and the Lenders have entered into that certain Amended and Restated
Credit Agreement, dated as of May 14, 2020 (as amended through Amendment No. 1, dated as of October 30, 2020, Amendment No.
2, dated as of February 8, 2021, and from time to time further amended, supplemented, restated, amended and restated or otherwise
modified the “Credit Agreement”; capitalized terms used in this Amendment not otherwise defined herein shall have the respective
meanings given thereto in the Credit Agreement (as amended hereby)), pursuant to which the Revolving Credit Lenders have
provided the Revolving Credit Facility to the Borrower and the Term Loan Lenders have provided the Term Loan Facility to the
Borrower; and

WHEREAS, the Borrower has requested that the Administrative Agent and the Required Lenders agree to, among other
items, (i) permit the prepayment of certain Term Loans, (ii) reduce the Revolving Credit Commitments to $130,000,000 and remove
the ability for the Borrower to obtain Revolving Credit Loans under the Credit Agreement and (ii) amend certain covenants and
conditions to the extension of credit; and

WHEREAS, the Borrower, the Administrative Agent and the Lenders signatory hereto are willing to effect such

amendments on the terms and conditions contained in this Amendment.

NOW, THEREFORE, in consideration of the premises and further valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

Amendments to the Credit Agreement.

The Credit Agreement is, effective as of the Amendment No. 3 Effective Date, hereby amended as follows:

(a)

Section 1.01 (Defined Terms) of the Credit Agreement shall be amended by inserting the following new definitions in
the appropriate alphabetical order in Section 1.01:

“Amendment No. 3” means that certain Amendment No. 3, dated as of the Amendment No. 3 Effective Date, by and
among the Loan Parties, the Administrative Agent and the Lenders party thereto.

“Amendment No. 3 Effective Date” means March 4, 2021, the date on which the conditions precedent to the
effectiveness of Amendment No. 3 were satisfied.

“Amendment No. 3 Term Loan Prepayment” means the optional prepayment of up to $75,000,000 of the principal
amount of Term Loans by the Borrower on or after the Amendment No. 3 Effective Date but on or prior to March 31,
2021 in accordance with Section 2.05(a)(i).

“Accelerated Automatic Commitment Reduction” has the meaning specified in Section 2.06(a)(iii).

“Lancaster Sale” has the meaning specified in the definition of “Prepayment Event”.

(b)

The definition of “Aggregate L/C Sublimit” in Section 1.01 (Defined Terms) of the Credit Agreement shall be
amended by inserting the text underlined below and deleting the text stricken below to read in its entirety as follows:

“Aggregate L/C Sublimit” means (x) prior to May 1, 2021, $190,000,000 and (y) thereafter, $175,000,000
$130,000,000.

(c)

The definition of “Alternative Currency Sublimit” in Section 1.01 (Defined Terms) of the Credit Agreement shall be
amended by inserting the text underlined below and deleting the text stricken below to read in its entirety as follows:

“Alternative Currency Sublimit” means an amount equal to the lesser of (i) the Revolving Credit Facility and, (ii)
prior to May 1, 2021, $125,000,000, and thereafter, $110,000,000 $100,000,000. The Alternative Currency Sublimit
is part of, and not in addition to, the Revolving Credit Facility.

(d)

The definition of “Cashless Term Loan Prepayment” in Section 1.01 (Defined Terms) of the Credit Agreement shall
be amended by deleting the text stricken below to read in its entirety as follows:

“Cashless Term Loan Prepayment” means the deemed optional prepayment of the principal amount of Term Loans by
the Borrower pursuant to Section 2.05(a)(i), which prepayments shall be effectuated by the conversion or exchange
(x) on or prior to February 28, 2021 (which date, upon written notice to the Administrative Agent, may be extended to
permit a shareholder vote with respect to the Borrower, as needed to obtain required regulatory approvals or allow for
the expiration of any regulatory waiting period (including under the Hart-Scott-Rodino Act), in each case, as
necessary to effectuate all or any portion of such

conversion or exchange) of Term Loans in an aggregate principal amount deemed purchased not to exceed
$50,000,000 into Stock or Stock Equivalents (other than Disqualified Stock) of the Borrower by reducing the
principal amount of Term Loans on a dollar for dollar basis based on a price determined by the Borrower and the
Team Loan Lenders, which generally will be based on the market price of common stock of the Borrower (or such
other price as may be required by the applicable rules and regulations of the NYSE) and/or (y) on or prior to February
17, 2021 of Term Loans in an aggregate principal amount deemed purchased not to exceed $35,000,000 into Notes
Indebtedness permitted pursuant to Section 7.01(q) on a dollar-for dollar basis based on the principal amount of such
deemed purchased Notes Indebtedness.

(e)

(f)

The definition of “CIO” in Section 1.01 (Defined Terms) of the Credit Agreement shall be deleted.

The definition of “Default Rate” in Section 1.01 (Defined Terms) of the Credit Agreement shall be amended by
inserting the text underlined below to read in its entirety as follows:

“Default Rate” means (a) when used with respect to Obligations (including, for the avoidance of doubt, any L/C
Borrowing) arising under any Loan Document other than Letter of Credit Fees, an interest rate equal to (i) the Base
Rate plus (ii) the Applicable Rate applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that
with respect to a Eurocurrency Rate Loan, the Default Rate shall be an interest rate equal to the interest rate
(including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, and (b) when used with
respect to Letter of Credit Fees, a rate equal to the Applicable Rate applicable to Letter of Credit Fees plus 2% per
annum.

(g)

Clause (a) of the definition of “Prepayment Event” in Section 1.01 (Defined Terms) of the Credit Agreement shall be
amended by inserting the text underlined below to read in its entirety as follows:

(a) (i) any Asset Sale (other than an Asset Sale (x) permitted by any of Section 7.04(a), (b), (c), (e), (f), (g), (h), (j)
or (k) or (y) in connection with the Lancaster Sale (as defined and contemplated in that certain Consent, dated as of
December 22, 2020, by and among the Borrower, the Administrative Agent, and the Lenders party thereto) (the
“Lancaster Sale”)), (ii) any sale and leaseback transaction (whether or not permitted by Section 7.13) (other than (x)
the sale and leaseback of the Power Copley property in accordance with Section 7.13 or (y) in connection with the
Lancaster Sale) resulting in aggregate Net Cash Proceeds in excess of $3,000,000 for any single transaction or a series
of related transactions or (iii) any Recovery Event; or

(h)

The definition of “Repayment Deadline” in Section 1.01 (Defined Terms) of the Credit Agreement shall be deleted.

(i)

The definition of “Restricted Payment” in Section 1.01 (Defined Terms) of the Credit Agreement shall be amended by
inserting the text underlined below to read in its entirety as follows:

“Restricted Payment” means (a) any dividend, distribution or any other payment whether direct or indirect, on
account of any Stock or Stock Equivalents of the Borrower or any of its Subsidiaries now or hereafter outstanding,
except a dividend payable solely in Stock or Stock Equivalents (other than Disqualified Stock) or a dividend or
distribution payable solely to the Borrower or one or more Guarantors, (b) any redemption, retirement, sinking fund
or similar payment, purchase or other acquisition for value, direct or indirect, of any Stock or Stock Equivalents of the
Borrower or any of its Subsidiaries now or hereafter outstanding other than one payable solely to the Borrower or one
or more Guarantors, (c) any payment or prepayment of principal, premium (if any), interest, fees (including fees to
obtain any waiver or consent in connection with any Indebtedness) or other charges on, or redemption, purchase,
retirement, defeasance, sinking fund or similar payment with respect to, any Subordinated Debt of the Borrower or
any other Loan Party, other than any Intercompany Subordinated Debt Payment, COVID-19 Relief Indebtedness
permitted under Section 7.01 or any required (in each case) payment, prepayment, redemption, retirement, purchases
or other payments, in each case to the extent permitted to be made by the terms of such Subordinated Debt, (d) any
payment in connection with matured or drawn obligations with respect to the AECI Letter of Credit or Tranche A-7
Letters of Credit, except in the form of payments or prepayments of Tranche A-5 Term Loans or Tranche A-7 Term
Loans, as applicable, in each case subject to the provisions of Article XI and any other subordination terms set forth
herein and (e) any payment or prepayment of principal, premium (if any), interest, fees (including fees to obtain any
waiver or consent in connection with any Indebtedness, but excluding customary fees payable on the date of
incurrence of Notes Indebtedness) or other charges on, or redemption, purchase, retirement, defeasance, sinking fund
or similar payment with respect to, any Notes Indebtedness of the Borrower or any other Loan Party, other than, so
long as no Event of Default shall have occurred and be continuing on the date of payment thereof, regularly scheduled
payments of interest required to be made on any Notes Indebtedness. For the avoidance of doubt, any Cashless Term
Loan Prepayment or Amendment No. 3 Term Loan Prepayment (including any payment of outstanding interest on the
date of such prepayment) and payments to any Term Loan Lender, in its capacity as such, under the B. Riley Fee
Letter shall not be considered “Restricted Payments” under this definition.

(j)

The definition of “Revolving Credit Commitment” in Section 1.01 (Defined Terms) of the Credit Agreement shall be
amended by inserting the text underlined below to read in its entirely as follows:

“Revolving Credit Commitment” means, as to each Revolving Credit Lender, its obligation to (a) make Revolving
Loans to the Borrower pursuant to Section 2.01 and (b) purchase participations in L/C Obligations, in an aggregate
principal amount at any one time outstanding not to exceed the Dollar amount set forth opposite such Lender’s name
on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as
applicable, as such amount may be adjusted from time to time in accordance with this Agreement. As of the
Amendment No. 3 Effective Date, the aggregate amount of the Revolving Credit Commitments shall equal
$130,000,000.

(k)

The definition of “Revolving Credit Facility” in Section 1.01 (Defined Terms) of the Credit Agreement shall be
amended by inserting the text underlined below and deleting the text stricken below to read in its entirety as follows:

“Revolving Credit Facility” means, at any time, the aggregate amount of the Lenders’ Revolving Credit
Commitments at such time. As of the Amendment No. 3 Restatement Effective Date, and after giving effect to the
Accelerated Automatic Commitment Reduction, the aggregate amount of the Revolving Credit Facility shall equal
$326,922,091.95 $130,000,000.

(l)

The definition of “Revolving Funded Debt Sublimit” in Section 1.01 (Defined Terms) of the Credit Agreement shall
be amended by inserting the text underlined below and deleting the text stricken below to read in its entirety as
follows:

“Revolving Funded Debt Sublimit” means the lesser of (a) $205,000,000, plus, in each case, the principal amount of
Revolving Credit Loans made pursuant to Section 2.03(c)(ii) that have not been repaid, and (b) the Revolving Credit
Facility $0. The Revolving Funded Debt Sublimit is part of, and not in addition to, the Revolving Credit Facility. For
purposes of this definition of “Revolving Funded Debt Sublimit”, repayments and prepayments of Revolving Credit
Loans shall be deemed to be applied, first, to Revolving Credit Loans not made pursuant to Section 2.03(c)(ii) and,
second, to Revolving Credit Loans made pursuant to Section 2.03(c)(ii).

(m)

The definition of “Term Loan Working Capital Commitment” in Section 1.01 (Defined Terms) of the Credit
Agreement shall be amended by inserting the text underlined below and deleting the text stricken below to read in its
entirety as follows:

“Term Loan Working Capital Commitment” means, as to each Tranche A-6 Term Loan Lender, its obligation to
make Working Capital Term Loans to the Borrower pursuant to Section 2.01F in an aggregate principal amount not to
exceed the Dollar amount set forth opposite such Tranche A-6 Term Loan Lender’s name on Schedule 2.01. As of the
Restatement Effective Date Amendment No. 3 Effective Date, the aggregate amount of the Tranche A-6 Term Loan
Lenders’ Term Loan Working Capital Commitments shall equal $5,000,000.00 $0 as a result of

(n)

(o)

(p)

reductions with respect to a Prepayment Event under clause (a)(iii) of the definition thereof.

The definition of “Test Date” in Section 1.01 (Defined Terms) of the Credit Agreement shall be deleted.

The definition of “Trigger Event” in Section 1.01 (Defined Terms) of the Credit Agreement shall be deleted.

The proviso in clause (b) of Section 2.02 (Borrowings; Conversions; and Continuations of Loans) shall be amended
by deleting the text stricken below to read in its entirety as follows:

provided, however, that if on the date a Committed Loan Notice with respect to a Borrowing is given by the
Borrower, there are L/C Borrowings outstanding, then the proceeds of such Borrowing, first, shall be applied to the
payment in full of any such L/C Borrowings, and second, shall be made available to the Borrower as provided above
and, if such Borrowing includes a Term Loan Borrowing of Working Capital Term Loans, to the extent any Term
Loan Borrowing results in a Trigger Event or if a Repayment Deadline exists, proceeds of the applicable Term Loan
Borrowing may be applied to the prepayment of Revolving Credit Loans in amounts equal to the excess of the
thresholds set forth in the definition of “Trigger Event”.

(q)

Clause (i) of Section 2.03(c) (Drawings and Reimbursements; Funding of Participations) shall be amended by
deleting the text stricken below to read in its entirety as follows:

Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the
applicable L/C Issuer shall notify the Borrower and the Administrative Agent thereof. In the case of any draw under a
Letter of Credit denominated in an Alternative Currency, the L/C Issuer shall notify the Borrower of the Dollar
Equivalent of the amount of the drawing promptly following the determination thereof. The Borrower agrees to pay to
the L/C Issuer of any Letter of Credit that has been drawn upon the amount of all draws thereunder, in Dollars (or the
Dollar Equivalent of such payment if such payment was made in an Alternative Currency), no later than (x) the
Business Day on which the L/C Issuer has provided notice thereof to the Borrower if such notice has been provided
prior to 11:00 a.m. on such Business Day, or (y) no later than 10:00 a.m. on the next succeeding Business Day after
the Borrower receives such notice from such L/C Issuer if such notice is not received prior to 11:00 a.m. on such day
(each such date, an “Honor Date”), and such L/C Issuer shall provide prompt notice to the Administrative Agent of
such reimbursement. If the Borrower fails to so reimburse the applicable L/C Issuer by such time, such L/C Issuer
shall promptly notify the Administrative Agent of the Honor Date and the amount of the unreimbursed drawing
(expressed in Dollars in the amount of the

Dollar Equivalent thereof in the case of a Letter of Credit denominated in an Alternative Currency) (the
“Unreimbursed Amount”), and the Administrative Agent shall provide such notice, along with the amount of such
Lender’s Applicable Percentage thereof, to each Lender. In such event, the Borrower shall be deemed to have
requested a Revolving Credit Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to
the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal
amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Revolving Credit Commitments
and the conditions set forth in Section 4.03 (other than the delivery of a Committed Loan Notice). Any notice given
by any L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if
immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.

(r)

Clause (iii) of Section 2.03(c) (Drawings and Reimbursements; Funding of Participations) shall be amended by
deleting the text stricken below to read in its entirety as follows:

With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing of Base Rate
Loans because the conditions set forth in Section 4.03 cannot be satisfied or for any other reason, the Borrower shall
be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is
not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear
interest at the Default Rate. In such event, each Lender’s payment to the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under
this Section 2.03.

(s)

Clause (iv) of Section 2.03(c) (Drawings and Reimbursements; Funding of Participations) shall be amended by
deleting the text stricken below to read in its entirety as follows:

Until each Lender funds its Revolving Credit Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the
applicable L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s
Applicable Percentage of such amount shall be solely for the account of the applicable L/C Issuer.

(t)

Clause (v) of Section 2.03(c) (Drawings and Reimbursements; Funding of Participations) shall be amended by
deleting the text stricken below to read in its entirety as follows:

Each Lender’s obligation to make Revolving Credit Loans or L/C Advances to reimburse the L/C Issuer for amounts
drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall
not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against any L/C Issuer, the Borrower, any Subsidiary or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether
or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Revolving Credit
Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.03 (other than delivery by the
Borrower of a Committed Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the
obligation of the Borrower to reimburse the applicable L/C Issuer for the amount of any payment made by the L/C
Issuer under any Letter of Credit, together with interest as provided herein.

(u)

The second sentence in clause (vi) of Section 2.03(c) (Drawings and Reimbursements; Funding of Participations)
shall be amended by deleting the text stricken below to read in its entirety as follows:

If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such
Lender’s Revolving Credit Loan included in the relevant Revolving Credit Borrowing or L/C Advance in respect of
the relevant L/C Borrowing, as the case may be.

(v)

The first proviso of clause (a)(i) of Section 2.05 (Prepayments) of the Credit Agreement shall be amended by
inserting the text underlined below to read in its entirety as follows:

provided that (i) such notice must be in a form acceptable to the Administrative Agent and be received by the
Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to any date of prepayment of
Eurocurrency Rate Loans, (B) on the date of prepayment of Base Rate Loans, (C) five Business Days prior to any date
of prepayment of Fixed Rate Loans, other than with respect to the Amendment No. 3 Term Loan Prepayment, and (D)
1 Business Day prior to the date of the Amendment No. 3 Term Loan Prepayment;

(w)

The fifth sentence of clause (a)(i) of Section 2.05 (Prepayments) of the Credit Agreement shall be amended by
inserting the text underlined below to read in its entirety as follows:

Any Cashless Term Loan Prepayment or the Amendment No. 3 Term Loan Prepayment of a Fixed Rate Loan shall be
accompanied by all accrued interest on the amount prepaid to the extent that such interest is permitted to be paid
under Section 11.01.

(x)

Clause (a)(iii) of Section 2.05 (Prepayments) of the Credit Agreement shall be amended by inserting the text
underlined below and deleting the text stricken below to read in its entirety as follows:

Except as set forth in clause clauses (c) and (d) of Section 11.01 and notwithstanding anything to the contrary
contained herein, the Borrower shall not be permitted to prepay the Term Loan Facility (pursuant to Section 2.05(a)(i)
or otherwise) until the occurrence of the Revolving Credit Facility Termination Date, provided that the Administrative
Agent, in its sole discretion, may permit a prepayment in full of the Term Loan Facility on the Revolving Credit
Facility Termination Date, provided further that the Administrative Agent will not release funds paid with respect to
the Term Loan Facility to any Term Loan Lender until the Administrative Agent has deemed, in its reasonable
discretion, that the Revolving Credit Facility Termination Date has occurred.

(y)

(z)

Clause (b)(vi) of Section 2.05 (Prepayments) of the Credit Agreement shall be deleted.

Section 2.06(a)(iii) (Automatic) of the Credit Agreement shall be amended by inserting the following sentence to the
end of such Section:

Notwithstanding the above, on the Amendment No. 3 Effective Date each of the automatic reductions to the
Aggregate Revolving Credit Commitments scheduled to occur after the Amendment No. 3 Effective Date shall be
accelerated and occur upon the effectiveness of Amendment No. 3 in lieu of the dates set forth above (the
“Accelerated Automatic Commitment Reduction”).

(aa)

Clause (iv)(A)(y) of Section 2.09(d) (Existing Credit Agreement Fees) of the Credit Agreement shall be amended by
inserting the text underlined below and deleting the text stricken below to read in its entirety as follows:

(y) upon the scheduled date (disregarding the Accelerated Automatic Commitment Reduction) of each automatic
commitment reduction to the Aggregate Revolving Credit Commitments required scheduled under Section 2.06(a)(iii)
for which (I) a corresponding amount of proceeds of Scheduled Term Loans are funded pursuant to Section 2.01F
substantially contemporaneously therewith and received by the Borrower (or as such funding may be replaced with
Net Cash Proceeds of the issuance of Stock or Stock Equivalents of the Borrower or contribution to the equity of the
Borrower in accordance with Section 4.05(a)) and (II) no requirement to make any prepayment under Section 2.06(a)
(iv) would result from such commitment reduction, an amount equal to 10% of such automatic commitment reduction
will be waived on the date thereof; and

(ab)

Clause (e) of Section 4.03 (Conditions to Revolving Credit Extensions) of the Credit Agreement shall be deleted.

(ac)

The last paragraph of Section 4.03 (Conditions to Revolving Credit Extensions) of the Credit Agreement shall be
amended by inserting the text underlined below and deleting the text stricken below to read in its entirety as follows:

Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Loans to the
other Type or a continuation of Eurocurrency Rate Loans) submitted by the Borrower (or with respect to a Letter of
Credit Application, any Permitted L/C Party) shall be deemed to be a representation and warranty of the Borrower
that the conditions specified in Sections 4.03(a), and (b) and (e) have been satisfied on and as of the date of the
applicable Credit Extension.

(ad)

The last sentence of Section 6.28 (Consultant) of the Credit Agreement shall be amended by inserting the text
underlined below and deleting the text stricken below to read in its entirety as follows:

To the extent that the Borrower hires professional staff members as mutually agreed to between the CIO and the other
members of senior management of the Borrower in respect of its financial planning and analysis functions, upon
notice to the Administrative Agent, the Borrower may modify the engagement described under this Section 6.28 (on
such terms as may be reasonably acceptable to the Administrative Agent) to permit the CIO Borrower to implement a
transition process in respect of such financial planning and analysis functions from the Consultant to such
professional staff members.

(ae)

(af)

Section 6.33 (Chief Implementation Officer) of the Credit Agreement shall be amended and restated in its entirety as
[“Reserved”].

Clause (j) of Section 7.08 (Transactions with Affiliates) of the Credit Agreement shall be amended by deleting the text
stricken below to read in its entirety as follows:

(j) any Cashless Term Loan Prepayment, including the incurrence of the Notes Indebtedness and issuance of Stock
and Stock Equivalents that is converted or exchanged from Term Loans; and

(ag)

Section 8.01(m) (Tranche A-6 Term Loan Fundings) of the Credit Agreement shall be deleted.

(ah)

Section 11.01 (Payment Subordination) of the Credit Agreement shall be amended by inserting the text underlined
below and deleting the text stricken below to read in its entirety as follows:

11.01 Payment Subordination. The Term Loan Lenders agree that the Obligations with respect to the Term Loan
Facility continue to be expressly subordinate and junior in right of payment to all Obligations with respect to the
Revolving Credit Facility (including any interest or entitlement to fees or expenses or other charges with respect to
the Revolving Credit Facility accruing

after the commencement of any proceeding under any Debtor Relief Law, whether or not such amounts are allowed in
any proceeding), except for any payment of (a) any payment expressly permitted to be made prior to the Restatement
Effective Date under Section 11.01 of the Existing Credit Agreement, (b) the 2020 Refinancing Term Loan Lender
Expenses, (c) Cashless Term Loan Prepayments, (d) the Amendment No. 3 Term Loan Prepayment and (de) other
than upon and during the continuance of an Event of Default, any interest on the Term Loans due on the applicable
Interest Payment Date, the date of the Amendment No. 3 Term Loan Prepayment or on any Cashless Term Loan
Prepayment on the date that such prepayment is deemed made, and payments made in lieu of interest pursuant to the
B. Riley Fee Letter and any fees paid in connection with the Term Loans pursuant to the B. Riley Fee Letter.

(ai)

Clause (a) of Section 11.02 (Turnover) of the Credit Agreement shall be amended by inserting the text underlined
below and deleting the text stricken below to read in its entirety as follows:

(a) Any payment or distribution (whether in cash, property or securities) that may be received by any Term Loan
Lender or its Affiliate (including, in each case, in its capacity as a holder of Notes Indebtedness) on account of any
Obligations with respect to the Term Loan Facility, the Notes Indebtedness, the B. Riley Fee Letter or the 2020
Refinancing in violation of this Agreement (including Section 7.05) shall be segregated and held in trust and promptly
paid over to the Administrate Agent, for the benefit of the Secured Parties, in each case, in the same form as received,
with any necessary endorsements, and each of the Term Loan Lenders hereby authorizes the Administrative Agent to
make any such endorsements as agent for such Term Loan Lender or its respective Affiliate (in each case, which
authorization, being coupled with an interest, is irrevocable). All such payments paid over to the Administrative
Agent shall be, as applicable, (i) used to prepay Revolving Credit Loans pay L/C Borrowings and, if the Revolving
Credit Loans L/C Borrowings are paid in full, Cash Collateralize Letters of Credit or (ii) applied in accordance with
the provisions of Section 8.03. For purposes of this Agreement, each Term Loan Lender agrees that in an any
proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party of the Borrower,
any debt or equity securities issued or to be issued by the reorganized or liquidating Borrower or any reorganized or
liquidating Loan Party that is allocated to any Term Loan Lender or Affiliate thereof on account of the Term Loan
Facility, the Notes Indebtedness, the B. Riley Fee Letter or the 2020 Refinancing in a plan of reorganization or
liquidation shall be deemed to be payments that are subject to the turnover provisions hereunder.

Additional Agreements and Acknowledgments

(a)

The Borrower agrees to pay, or cause to be paid, to the Administrative Agent in immediately available funds upon the
Amendment No. 3 Effective Date, (x) for

the account of each Revolving Credit Lender, (i) the amendment and restated fee described in Section 2.09(c)(ii) of
the Credit Agreement in the amount of $1,634,610.46, (ii) the “Deferred Facility Fee” (as defined in the Existing
Credit Agreement) as described in Section 2.09(d)(i) of the Credit Agreement in the amount of $6,675,103.06, (iii) the
“Deferred Ticking Fees” (as defined in the Existing Credit Agreement) described in Section 2.09(d)(iv)(x) of the
Credit Agreement in the amount of $6,723,651.61, and (iv) the “Other Amendment Fees” as described in Section
2.09(d)(iv)(y) of the Credit Agreement in the amount of $1,379,348.26, (y) for the account of each Revolving Credit
Lender who consented to that certain Amendment No. 6, dated as of April 10, 2018, by and among the Borrower, the
Administrative Agent and the Lenders party thereto, and acknowledged and agreed by the Guarantors, the
“Amendment No. 6” fees described in Section 2.09(d)(ii) of the Credit Agreement in the amount of $540,000.00 (the
payments under clauses (x) and (y) of this Section 2(a), the “Prepaid Deferred Fees”) and (z) for the account of each
Revolving Credit Lender, such Revolving Credit Lender’s ratable share of all outstanding deferred (i) interest on
Revolving Credit Loans, (ii) Letter of Credit Fees and (iii) commitment fees set forth in Section 2.09 of the Credit
Agreement, in each case, accrued from the Restatement Effective Date through and including August 31, 2020 (the
payments under clause (z) of this Section 2(a)), the “Prepaid Deferred Interest”).

(b)

The Borrower and the other Loan Parties each acknowledge and agree that the breach or failure to comply in any
respect with the terms and conditions of this Section 2 shall constitute an immediate Event of Default under Section
8.01 of the Credit Agreement.

Effectiveness; Conditions Precedent.

The amendments contained herein shall only be effective upon the satisfaction or waiver of each of the following conditions
precedent (the date of satisfaction or waiver, the “Amendment No. 3 Effective Date”):

(a)

the Administrative Agent shall have received each of the following documents or instruments in form and substance
acceptable to the Administrative Agent:

(i)

(ii)

counterparts of this Amendment executed by the Loan Parties, the Limited Guarantor, the Administrative
Agent, the Required Lenders and each Term Loan Lender;

a certificate of the chief financial officer or treasurer of the Borrower certifying that as of the Amendment No.
3 Effective Date (A) all of the representations and warranties in this Amendment are true and correct in

(iii)

all material respects (or, to the extent any such representation and warranty is modified by a materiality or
Material Adverse Effect standard, in all respects) as of such date (except to the extent that such representations
and warranties expressly relate to an earlier date, in which case they shall be true and correct in all material
respects (or, to the extent any such representation and warranty is modified by a materiality or Material
Adverse Effect standard, in all respects) as of such earlier date), (B) no Default shall exist, or would result
from the occurrence of the Amendment No. 3 Effective Date and (C) since December 31, 2019, there have not
occurred any facts, circumstances, changes, developments or events which, individually or in the aggregate,
have constituted or would reasonably be expected to result in, a Material Adverse Effect;

a certificate of the secretary or assistant secretary of each of (i) the Loan Parties that are Domestic
Subsidiaries, (ii) the Canadian Guarantor and (iii) Babcock & Wilcox De Monterrey, S.A. DE C.V., certifying
and confirming that (i) attached thereto is a true, correct and complete copy of resolutions duly adopted by the
board of directors (or similar governing body) of each such Loan Party, authorizing the execution, delivery
and performance of the Amendment and the Loan Documents to which such Loan Party is a party, or is to be,
a party, and that such resolutions have not been amended, rescinded or otherwise modified and are in full force
and effect in the form adopted; (ii) a true, correct and complete copy of the certificate of incorporation or
certificate of formation (or the equivalent organizational documents) of each such Loan Party, together with
any amendments thereto, was previously delivered to the Administrative Agent on May 14, 2020 or is attached
thereto, and that the certified charter has not been revoked, amended, rescinded or modified and remains in
full force and effect as of the date thereof; (iii) a true, correct, and complete copy of the bylaws, partnership
agreement or operation agreement (or the equivalent governing documentation) of each such Loan Party,
together with any amendments thereto, was previously delivered to the Administrative Agent on April 10,
2018 or is attached thereto, and that the bylaws have not been revoked, amended, rescinded or modified and
remain in full force and effect as of the date hereof; and (iv) attached thereto is a true, correct and complete list
of names, offices and true signatures of the duly qualified, acting and elected or appointed officers of each
such Loan Party authorized to sign the Amendment and the Loan Documents to which the such Loan Party is,
or is to be, a party and the other agreements, instruments and documents to be delivered by such Loan Party
pursuant to the Amendment and the Loan Documents;

(iv)

(v)

(vi)

(vii)

(viii)

(ix)

such documents and certifications as the Administrative Agent may reasonably require to evidence that each
Loan Party that are Domestic Subsidiaries that each such Loan Party is validly existing and in good standing
in its jurisdiction of organization;

a solvency certificate, executed by a Responsible Officer of the Borrower in form and substance reasonably
acceptable to the Administrative Agent, which, among other things, shall certify that the Borrower will be
Solvent as of the date hereof;

satisfactory opinion of King & Spalding LLP, as counsel to the Loan Parties, as to such matters reasonably
requested by the Administrative Agent and in form and substance satisfactory to the Administrative Agent;

an executed perfection certificate for the Borrower and the Domestic Subsidiaries in form and substance
reasonably satisfactory to the Administrative Agent as well as any information with respect to intellectual
property reasonably requested by the Administrative Agent;

executed Intellectual Property Security Agreements that the Administrative Agent deems necessary or
reasonably desirable in order to perfect or provide notice of the Liens created under the U.S. Collateral
Agreement in intellectual property Collateral, in form appropriate for filing with the United States Patent and
Trademark Office and the United States Copyright Office; and

a duly executed assignment of mortgage in favor of the Administrative Agent with respect to that certain
Open-End Mortgage, Assignment of Leases, Rents and Security Agreement dated as of November 4, 2020, by
ICP Barberton Robinson LLC and Holdings Barberton Robinson, LLC, in favor of The Babcock & Wilcox
Company.

(b)

(c)

(d)

(e)

there shall be no Revolving Credit Loans outstanding under the Credit Agreement as of the Amendment No. 3
Effective Date;

the Administrative Agent shall have received (i) the Prepaid Deferred Fees and (ii) the Prepaid Deferred Interest;

the Administrative Agent shall have received a prepayment notice in accordance with Section 2.05(a)(i) of the Credit
Agreement with respect to each of (i) the Amendment No. 3 Term Loan Prepayment and (ii) any prepayment of the
outstanding Revolving Credit Loans, if applicable;

without prejudice to, or limiting the Borrower’s obligations under, Section 10.04 (Expenses; Indemnity; Damage
Waiver) of the Credit Agreement, all outstanding fees, costs and expenses due to the Administrative Agent and the
Lenders, including on account of Agent’s Legal Advisor and FTI, shall have been paid in

full to the extent that the Borrower has received an invoice therefor (with reasonable and customary supporting
documentation) at least two Business Days prior to the Amendment No. 3 Effective Date (without prejudice to any
post-closing settlement of such fees, costs and expenses to the extent not so invoiced); and

(f)

each of the representations and warranties made by the Borrower in Section 4 hereof shall be true and correct.

The Administrative Agent agrees that it will, upon the satisfaction or waiver of the conditions contained in this Section 3,
promptly provide written notice to the Borrower, and the Lenders of the effectiveness of this Amendment.

Representations and Warranties.

In order to induce the Administrative Agent and the Lenders to enter into this Amendment, the Borrower represents and
warrants to the Administrative Agent and the Lenders, for itself and for each other Loan Party, as follows:

(a)

(b)

(c)

that both immediately prior to and immediately after giving effect to this Amendment, no Default or Event of Default
exists;

the representations and warranties contained in the Credit Agreement are true and correct in all material respects on
and as of the date hereof (except to the extent that such representations and warranties (i) specifically refer to an
earlier date, in which case they shall be true and correct in all material respects as of such earlier date and (ii) contain
a materiality or Material Adverse Effect qualifier, in which case such representations and warranties shall be true and
correct in all respects);

the execution, delivery and performance by the Borrower and the other Loan Parties of this Amendment and the
consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate, limited
liability company or partnership action, including the consent of shareholders, partners and members where required,
do not contravene any Loan Party or any of its Subsidiaries’ respective Constituent Documents, do not violate any
Requirement of Law applicable to any Loan Party or any order or decree of any Governmental Authority or arbiter
applicable to any Loan Party and do not require the consent of, authorization by, approval of, notice to, or filing or
registration with, any Governmental Authority or any other Person in order to be effective and enforceable;

(d)

this Amendment has been duly executed and delivered on behalf of the Borrower and the other Loan Parties;

(e)

(f)

this Amendment constitutes a legal, valid and binding obligation of the Borrower and the other Loan Parties
enforceable against the Borrower and the other Loan Parties in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, Debtor Relief Laws or similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity; and

as of the date hereof, all Liens, security interests, assignments and pledges encumbering the Collateral, created
pursuant to and/or referred to in the Credit Agreement or the other Loan Documents, are valid, enforceable, duly
perfected to the extent required by the Loan Documents, non-avoidable, first priority liens, security interests,
assignments and pledges (subject to Liens permitted by Section 7.02 of the Credit Agreement), continue unimpaired,
are in full force and effect and secure and shall continue to secure all of the obligations purported to be secured in the
respective Security Instruments pursuant to which such Liens were granted.

Consent, Acknowledgement and Reaffirmation of Indebtedness and Liens.

(a)

By its execution hereof, each Loan Party, in its capacity under each of the Loan Documents to which it is a party
(including the capacities of debtor, guarantor, grantor and pledgor, as applicable, and each other similar capacity, if
any, in which such party has granted Liens on all or any part of its properties or assets, or otherwise acts as an
accommodation party, guarantor, indemnitor or surety with respect to all or any part of the Obligations), hereby:

(i)

(ii)

expressly consents to the amendments and modifications to the Credit Agreement effected hereby;

expressly confirms and agrees that, notwithstanding the effectiveness of this Amendment, each Loan
Document to which it is a party is, and all of the obligations and liabilities of such Loan Party to the
Administrative Agent, the Lenders and each other Secured Party contained in the Loan Documents to which it
is a party (in each case, as amended and modified by this Amendment), are and shall continue to be, in full
force and effect and are hereby reaffirmed, ratified and confirmed in all respects and, without limiting the
foregoing, agrees to be bound by and abide by and operate and perform under and pursuant to and comply
fully with all of the terms, conditions, provisions, agreements, representations, undertakings, warranties,
indemnities, guaranties, grants of security interests and covenants contained in the Loan Documents;

(iii)

to the extent such party has granted Liens or security interests on any of its properties or assets pursuant to any
of the Loan Documents to secure the

prompt and complete payment, performance and/or observance of all or any part of its Obligations to the
Administrative Agent, the Lenders, and/or any other Secured Party, acknowledges, ratifies, remakes, regrants,
confirms and reaffirms without condition, all Liens and security interests granted by such Loan Party to the
Administrative Agent for their benefit and the benefit of the Lenders, pursuant to the Credit Agreement and
the other Loan Documents, and acknowledges and agrees that all of such Liens and security interests are
intended and shall be deemed and construed to continue to secure the Obligations under the Loan Documents,
as amended, restated, supplemented or otherwise modified and in effect from time to time, including but not
limited to, the Loans made by, and Letters of Credit provided by, the Administrative Agent and the Lenders to
the Borrower and/or the other Loan Parties under the Credit Agreement, and all extensions renewals,
refinancings, amendments or modifications of any of the foregoing;

agrees that this Amendment shall in no manner impair or otherwise adversely affect any of the Liens and
security interests granted in or pursuant to the Loan Documents; and

acknowledges and agrees that: (i) the Guaranty and any obligations incurred thereunder, have been provided
in exchange for “reasonably equivalent value” (as such term is used under the Bankruptcy Code and
applicable state fraudulent transfer laws) and “fair consideration” (as such term is used under applicable state
fraudulent conveyance laws) or similar term under applicable Debtor Relief Laws and (ii) each grant or
perfection of a Lien or security interest on any Collateral provided in connection with Loan Documents, this
Amendment and/or any negotiations with the Administrative Agent and/or the Lenders in connection with a
“workout” of the Obligations is intended to constitute, and does constitute, a “contemporaneous exchange for
new value” (as such term is used in Section 547 of the Bankruptcy Code) or similar concept under applicable
Debtor Relief Laws.

(iv)

(v)

(b)

By its execution hereof, the Limited Guarantor, in its capacity under the Limited Guarantor, hereby:

(i)

(ii)

expressly consents to the amendments and modifications to the Credit Agreement effected hereby;

expressly confirms and agrees that, notwithstanding the effectiveness of this Amendment, the Limited
Guaranty, is and shall continue to be, in full force and effect and is hereby reaffirmed, ratified and confirmed
in all respects and, without limiting the foregoing, agrees to be bound by and abide by and operate and
perform under and pursuant to and comply fully with all of the terms, conditions, provisions, agreements,
representations,

undertakings, warranties, indemnities, guaranties, grants of security interests and covenants contained in the
Limited Guaranty; and

(iii)

acknowledges and agrees that the Limited Guaranty and any obligations incurred thereunder, have been
provided in exchange for “reasonably equivalent value” (as such term is used under the Bankruptcy Code and
applicable state fraudulent transfer laws) and “fair consideration” (as such term is used under applicable state
fraudulent conveyance laws).

Releases; Waivers.

(a)

By its execution hereof, each Loan Party (on behalf of itself and its Affiliates) and its successors-in-title, legal
representatives and assignees and, to the extent the same is claimed by right of, through or under any Loan Party, for
its past, present and future employees, agents, representatives, officers, directors, shareholders, and trustees (each, a
“Releasing Party” and collectively, the “Releasing Parties”), does hereby remise, release and discharge, and shall be
deemed to have forever remised, released and discharged, the Administrative Agent, the Lenders and each of the other
Secured Parties, and the Administrative Agent’s, each Lenders’ and each other Secured Party’s respective successors-
in-title, legal representatives and assignees, past, present and future officers, directors, affiliates, shareholders,
trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals and all other persons and
entities to whom any of the foregoing would be liable if such persons or entities were found to be liable to any
Releasing Party, or any of them (collectively hereinafter, the “Lender Parties”), from any and all manner of action and
actions, cause and causes of action, claims, charges, demands, counterclaims, suits, covenants, controversies,
damages, judgments, expenses, liens, claims of liens, claims of costs, penalties, attorneys’ fees, or any other
compensation, recovery or relief on account of any liability, obligation, demand or cause of action of whatever nature,
whether in law, equity or otherwise (including, without limitation, any so called “lender liability” claims, claims for
subordination (whether equitable or otherwise), interest or other carrying costs, penalties, legal, accounting and other
professional fees and expenses and incidental, consequential and punitive damages payable to third parties, or any
claims arising under 11 U.S.C. §§ 541-550 or any claims for avoidance or recovery under any other federal, state or
foreign law equivalent), whether known or unknown, fixed or contingent, joint and/or several, secured or unsecured,
due or not due, primary or secondary, liquidated or unliquidated, contractual or tortious, direct, indirect, or derivative,
asserted or unasserted, foreseen or unforeseen, suspected or unsuspected, now existing, heretofore existing or which
may heretofore have accrued against any of the Lender Parties under the Credit

Agreement or any of the other Loan Documents, whether held in a personal or representative capacity, and which are
based on any act, fact, event or omission or other matter, cause or thing occurring at or from any time prior to and
including the date hereof, in all cases of the foregoing in any way, directly or indirectly arising out of, connected with
or relating to the Credit Agreement or any other Loan Document and the transactions contemplated thereby, and all
other agreements, certificates, instruments and other documents and statements (whether written or oral) related to
any of the foregoing (each, a “Claim” and collectively, the “Claims”), in each case, other than Claims arising from
Lender Parties’ gross negligence, fraud, or willful misconduct. Each Releasing Party further stipulates and agrees
with respect to all Claims, that it hereby waives, to the fullest extent permitted by applicable law, any and all
provisions, rights, and benefits conferred by any applicable U.S. federal or state law, or any principle of
common law, that would otherwise limit a release or discharge of any unknown Claims pursuant to this
Section 6.

(b)

By its execution hereof, each Loan Party hereby (i) acknowledges and confirms that there are no existing defenses,
claims, subordinations (whether equitable or otherwise), counterclaims or rights of recoupment or setoff against the
Administrative Agent, the Lenders or any other Secured Parties in connection with the Obligations or in connection
with the negotiation, preparation, execution, performance or any other matters relating to the Credit Agreement, the
other Loan Documents or this Amendment and (ii) expressly waives any setoff, counterclaim, recoupment, defense or
other right that such Loan Party now has against the Administrative Agent, any Lender or any of their respective
affiliates, whether in connection with this Amendment, the Credit Agreement and the other Loan Documents, the
transactions contemplated by this Amendment or the Credit Agreement and the Loan Documents, or any agreement or
instrument relating thereto.

Entire Agreement.

This Amendment, the Credit Agreement (including giving effect to the amendments set forth in Section 1 above), and the
other Loan Documents (collectively, the “Relevant Documents”), set forth the entire understanding and agreement of the
parties hereto in relation to the subject matter hereof and supersedes any prior negotiations and agreements among the parties
relating to such subject matter. No promise, condition, representation or warranty, express or implied, not set forth in the
Relevant Documents shall bind any party hereto, and no such party has relied on any such promise, condition, representation
or warranty. Each of the parties hereto acknowledges that, except as

otherwise expressly stated in the Relevant Documents, no representations, warranties or commitments, express or implied,
have been made by any party to any other party in relation to the subject matter hereof or thereof. None of the terms or
conditions of this Amendment may be changed, modified, waived or cancelled orally or otherwise, except in writing and in
accordance with Section 10.01 of the Credit Agreement.

Full Force and Effect of Credit Agreement.

This Amendment is a Loan Document (and the Borrower and the other Loan Parties agree that the “Obligations” secured by
the Collateral shall include any and all obligations of the Loan Parties under this Amendment). Except as expressly modified
hereby, all terms and provisions of the Credit Agreement and all other Loan Documents remain in full force and effect and
nothing contained in this Amendment shall in any way impair the validity or enforceability of the Credit Agreement or the
Loan Documents, or alter, waive, annul, vary, affect, or impair any provisions, conditions, or covenants contained therein or
any rights, powers, or remedies granted therein. This Amendment shall not constitute a modification of the Credit Agreement
or any of the other Loan Documents or a course of dealing with Administrative Agent or the Lenders at variance with the
Credit Agreement or the other Loan Documents such as to require further notice by Administrative Agent or any Lender to
require strict compliance with the terms of the Credit Agreement and the other Loan Documents in the future, except in each
case as expressly set forth herein. The Borrower acknowledges and expressly agrees that Administrative Agent and the
Lenders reserve the right to, and do in fact, require strict compliance with all terms and provisions of the Credit Agreement
and the other Loan Documents (subject to any qualifications set forth therein), as amended herein.

Counterparts; Effectiveness.

This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single contract. Except as provided in
Section 3 above, this Amendment shall become effective when it shall have been executed by the Administrative Agent and
when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each
of the other parties hereto. Delivery of an executed counterpart of a signature page of this Amendment by facsimile,
electronic email or other electronic imaging means (e.g., “pdf” or “tif”), including DocuSign, shall be effective as delivery of
a manually executed counterpart of this Amendment.

10.

Governing Law; Jurisdiction; Waiver of Jury Trial.

THIS AMENDMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN
ARISING OUT OF OR RELATING TO THIS
CONTRACT OR TORT OR OTHERWISE) BASED UPON,
AMENDMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. Sections 10.04, 10.14 and 10.15
of the Credit Agreement are hereby incorporated herein by this reference.

11.

Severability.

If any provision of this Amendment is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions of this Amendment shall not be affected or impaired thereby and (b) the parties shall endeavour
in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in
a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

12.

References.

All references in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the
Credit Agreement and each reference to the “Credit Agreement”, (or the defined term “Agreement”, “thereunder”, “thereof”
of words of like import referring to the Credit Agreement) in the other Loan Documents shall mean and be a reference to the
Credit Agreement as amended hereby and giving effect to the amendments contained in this Amendment.

13.

Successors and Assigns.

This Amendment shall be binding upon the Borrower, the Lenders and the Administrative Agent and their respective
successors and assigns, and shall inure to the benefit of the Borrower, the Lenders and the Administrative Agent and the
respective successors and assigns of the Borrower, the Lenders and the Administrative Agent.

[Signature pages follow]

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be made, executed and delivered by their duly
authorized officers as of the day and year first above written.

BABCOCK & WILCOX ENTERPRISES, INC.

By: _______________________________________
Name:
Title:

Acknowledged and Agreed for purposes of Sections 1, 2, 5(a), 6 and 8 of the Amendment:

Americon Equipment Services, Inc.
Americon, LLC
Babcock & Wilcox Construction Co., LLC
Babcock & Wilcox Ebensburg Power, LLC
Babcock & Wilcox Equity Investments, LLC
Babcock & Wilcox Holdings, LLC
Babcock & Wilcox India Holdings, Inc.
Babcock & Wilcox International Sales and Service Corporation
Babcock & Wilcox International, Inc.
BABCOCK & WILCOX CANADA CORP.
Babcock & Wilcox SPIG, Inc.
Babcock & Wilcox Technology, LLC
babcock & wilcox DE mONTERREY, S.A. de c.v.
Delta Power Services, LLC
Diamond Operating Co., Inc.
Diamond Power Australia Holdings, Inc.

Diamond Power China Holdings, Inc.

Diamond Power Equity Investments, Inc.
Diamond Power International, LLC
Ebensburg Energy, LLC
O&M Holding Company
Power Systems Operations, Inc.
SOFCo EFS Holdings LLC
The Babcock & Wilcox Company

By: __________________________________________
Name:

Title:

EBENSBURG INVESTORS LIMITED PARTNERSHIP

By: BABCOCK & WILCOX EBENSBURG POWER, LLC, as General Partner

By: __________________________________________
Name:
Title:

Acknowledged and Agreed for purposes of Section 5(b) of the Amendment:

B. RILEY FINANCIAL, inc.

By:

Name:
Title:

Administrative Agent:

BANK OF AMERICA, N.A., as Administrative Agent

By:_________________________

Name:
Title:

Lenders:

BANK OF AMERICA, N.A., as Lender and Swing Line Lender

By:_________________________

Name:
Title:

B. RILEY FINANCIAL, INC., as Lender

By:_________________________

Name:
Title:

___________________________, as Lender

By:_________________________

Name:
Title:

___________________________, as Lender

By:_________________________

Name:
Title:

BABCOCK & WILCOX ENTERPRISES, INC.
SUBSIDIARIES
YEAR ENDED DECEMBER 31, 2020

Exhibit 21.1

Name of Company

1867BW, LLC
Americon Equipment Services, Inc.

Americon, LLC

B&W de Panama, Inc.

B&W PGG Luxembourg Canada Holdings SARL

B&W PGG Luxembourg Finance SARL

B&W PGG Luxembourg Holdings SARL

B and W SPIG South Africa

Babcock and Wilcox ME Holdings Limited

Babcock & Wilcox Australia Pty. Ltd.

Babcock & Wilcox Construction Co., LLC

Babcock & Wilcox de Monterrey, S.A. de C.V.

Babcock & Wilcox Ebensburg Power, LLC

Babcock & Wilcox Equity Investments, LLC

Babcock & Wilcox Global Sales and Services Brazil Ltda.

Babcock & Wilcox Global Sales & Services - Chile SpA

Babcock & Wilcox Global Sales and Service Pte. Ltd.

Babcock & Wilcox Global Sales & Services SARL

Babcock & Wilcox Holdings, LLC

Babcock & Wilcox India Holdings, Inc.

Babcock & Wilcox India Private Limited

Babcock & Wilcox International Investments Co., Inc.

Babcock & Wilcox International Sales and Service Corporation

Babcock & Wilcox International, Inc.

Babcock & Wilcox Monterrey Finance SARL

Babcock & Wilcox Singapore Pte. Ltd.

Babcock & Wilcox SPIG, Inc.

Babcock & Wilcox Technology, LLC

Babcock & Wilcox Volund Limited

Babcock & Wilcox Volund AB

Babcock & Wilcox Volund A/S

Babcock Wilcox Arabia Limited

BWL Energy (Teesside) Ltd.

BWL Energy (Rye House) Ltd.

Dampkraft Insurance Company

D.C.S. Dry Cooling Services S.r.l.

Delta Power Services, LLC

Diamond Operating Co., Inc.

Diamond Power Australia Holdings, Inc.

Jurisdiction of
Organization

Delaware
Delaware

Delaware

Panama

Luxembourg

South Africa

United Arab Emirates

Australia

Delaware

Mexico

Delaware

Brazil

Chile

Singapore

Luxembourg

Delaware

India

Panama

Delaware

Luxembourg

Singapore

New Jersey

Delaware

United Kingdom

Sweden

Denmark

Saudi Arabia

Northern Ireland

South Carolina

Italy

Delaware

Percentage
of Ownership
Interest
100
100

100

Name of Company

Diamond Power Central & Eastern Europe s.r.o.
Diamond Power China Holdings, Inc.

Diamond Power do Brasil Limitada

Diamond Power Equity Investments, Inc.

Diamond Power Finland OY

Diamond Power Germany GmbH

Diamond Power International, LLC

Diamond Power Machine (Hubei) Co., Inc.

Diamond Power Services S.E.A. Ltd.

Diamond Power Specialty (Proprietary) Limited

Diamond Power Specialty Limited

Diamond Power Sweden AB

Ebensburg Energy, LLC

Ebensburg Investors Limited Partnership

O&M Holding Company

P. T. Babcock & Wilcox Asia

Power Systems Operations, Inc.

Servicios de Fabricacion de Valle Soleado, S.A. de C.V.

Servicios Profesionales de Valle Soleado, S.A. de C.V.

SOFCo - EFS Holdings LLC

SPIG S.p.A.

SPIG Kuhlturmtechnologien GmbH

SPIG Turn Apa de Racine

SPIG Vostock

SPIG Sogutma Sistemleri Tlc Ldt

SPIG Cooling Towers India Private Limited

SPIG Torres de Resfriamento Ltda.

SPIG (Shanxi) Cooling System Co., Ltd.

SPIG (Shanxi) Cooling Technology Company, Ltd.

SPIG KOREA LTD.

The Babcock & Wilcox Company

Jurisdiction of
Organization

Czech Republic
Delaware

Percentage
of Ownership
Interest
100
100

Brazil

Delaware

Finland

Germany

Delaware

China

Thailand

Republic of South Africa

United Kingdom

Sweden

Delaware

Pennsylvania

Delaware

Indonesia

Delaware

Mexico

Delaware

Italy

Ecuador

Germany

Romania

Russia

Turkey

India

Brazil

China

Korea

Delaware

100

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements No. 333-236254 and No. 333-234754 on
Forms S-3 and Registration Statement 333-233225 on Form S-8 of our report dated March 8, 2021, relating to the
consolidated financial statements of Babcock & Wilcox Enterprises, Inc. appearing in this Annual Report on Form
10-K for the year ended December 31, 2020

/S/ DELOITTE & TOUCHE LLP

Cleveland, Ohio
March 8, 2021

Exhibit 23.1

EXHIBIT 31.1

I, Kenneth M. Young, certify that:

I have reviewed this annual report on Form 10-K of Babcock & Wilcox Enterprises, Inc.;

CERTIFICATION

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material

respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as

defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our

supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions

about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial

reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent
functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s

internal control over financial reporting.

Dated: March 8, 2021

/s/ Kenneth M. Young
Kenneth M. Young
President and Chief Executive Officer

EXHIBIT 31.2

I, Louis Salamone, certify that: