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What changed in Babcock & Wilcox Enterprises, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Babcock & Wilcox Enterprises, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+308 added−305 removedSource: 10-K (2025-03-31) vs 10-K (2024-03-15)

Top changes in Babcock & Wilcox Enterprises, Inc.'s 2024 10-K

308 paragraphs added · 305 removed · 219 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

36 edited+3 added−3 removed26 unchanged
Biggest changeOur ClimateBright TM family of products including SolveBright TM , OxyBright TM , BrightLoop TM and BrightGen TM , places us at the forefront of hydrogen production and carbon dioxide capturing technologies and development with many of the aforementioned products already commercially available and others ready for commercial deployment. • Babcock & Wilcox Thermal: Our vast installed base of steam generation equipment and related auxiliaries spans the globe and includes customers in a variety of end markets including power generation, oil and gas, petrochemical, food and beverage, metals and mining, and others.
Biggest changeOur ClimateBright ™ products including SolveBright ™ , OxyBright ™ , BrightLoop ™ and BrightGen ™ place us at the forefront of hydrogen production and decarbonization technologies and development with many of these products already commercially available and others ready for commercial deployment.
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.
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, components and accessories for assembly, which are available from numerous sources.
For additional information on the geographic distribution of our revenues, see Note 5 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report. 8 Competition With over 155 years of experience, we have a competitive advantage in our experience and technical capability to reliably convert a wide range of fuels to steam.
For additional information on the geographic distribution of our revenues, see Note 5 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report. 9 Competition With over 155 years of experience, we have a competitive advantage in our experience and technical capability to reliably convert a wide range of fuels to steam.
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 7 price adjustments for items such as labor and commodity prices.
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.
BrightLoo p TM offers significant advantages over other hydrogen generation technologies as it generates competitively priced hydrogen from a wide range of fuels (including solid fuels such as biomass and coal) with a high rate of carbon captured resulting in low (or even negative) carbon intensity hydrogen.
BrightLoo p ™ offers significant advantages over other hydrogen generation technologies as it generates competitively priced hydrogen from a wide range of fuels, including solid fuels such as biomass and coal, with a high rate of carbon captured resulting in low, or even negative, carbon-intensity hydrogen.
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 position, results of operations or cash flows in any given year.
On the basis of our relative contribution of waste to each site, we expect our share of the 11 ultimate liability for the various sites will not have a material adverse effect on our consolidated financial position, results of operations or cash flows in any given year.
Our operations in Scotland provide boiler cleaning technologies and systems mainly to European markets. Our Canadian operations serve the Canadian industrial power, oil production and electric utility markets. We have manufacturing facilities in Mexico to serve global markets.
Foreign Operations Our operations in Scotland provide boiler cleaning technologies and systems mainly to European markets. Our Canadian operations serve the Canadian industrial power, oil production and electric utility markets. We have manufacturing facilities in Mexico to serve global markets.
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 10 lawfulness of the original conduct.
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.
The duration and scope of these conditions cannot be predicted, and therefore, any anticipated negative financial impact on our operating results cannot be reasonably estimated. Equity Capital Activities For information regarding our equity activities, see Note 16 to the Consolidated Financial Statements included in Part II, Item 9 of this Annual Report.
The duration and scope of these conditions cannot be predicted, and therefore, any anticipated negative financial impact on our operating results cannot be reasonably estimated. Equity Capital Activities For information regarding our equity activities, see Note 16 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
Core Values At B&W, our values of safety, ethics, quality, integrity, respect and agility are at the foundation of our business, and we are focused on efficiently ingraining new employees into that culture, whether they join through the normal recruiting and hiring process, or as we have grown through strategic acquisitions.
Core Values At B&W, our values of safety, ethics, quality, integrity, respect and agility are at the foundation of our business, and we are focused on efficiently integrating new employees into that culture, whether they join through the normal recruiting and hiring process, or as we have grown through strategic acquisitions.
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 presently exists.
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, we do not believe any serious shortage presently exists.
We have supplied highly-engineered energy and environmental equipment in more than 90 countries. 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 control equipment, and cooling systems and services.
We have supplied highly-engineered energy and environmental equipment in more than 90 countries. 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 and environmental control equipment.
Through ReFlex, our employees have needed flexibility and autonomy in how they work, allowing us to deliver on our projects and ensure our customers' needs are met. Compensation and Benefits We also believe it is important to provide competitive compensation and benefits programs for our employees.
Through ReFlex, our employees have the needed flexibility and autonomy in how they work, allowing us to deliver on our projects and ensure our customers' needs are met. 10 Compensation and Benefits We believe it is important to provide competitive compensation and benefits programs for our employees.
Compliance with such regulations has not had a material effect on our capital expenditures, results of operations or competitive position to date. For further discussion, see Part I, Item 1A, “Risk Factors” of this Annual Report on Form 10-K. Available Information Our website address is www.babcock.com .
Compliance with such regulations has not had a material effect on our capital expenditures, results of operations or competitive position to date. For further discussion, see Part I, Item 1A, "Risk Factors" of this Annual Report on Form 10-K. Available Information Our website address is www.babcock.com .
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.
In addition, the SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Our Board of Directors is actively engaged with our workforce practices and policies, and regularly receives updates and provides input on key culture topics, including employee engagement, employee development and succession planning. Patents and Patent Licenses We currently hold a large number of United States and foreign patents and have various patent applications pending.
Our Board of Directors is actively engaged with our workforce practices and policies and regularly receives updates and provides input on key culture topics, including employee engagement, employee development and succession planning. Patents and Patent Licenses We currently hold a large number of U.S. and foreign patents and have various patent applications pending.
We have implemented the Responsible and Flexible Workplace Program (“ReFlex”) in the U.S. that 9 provides employees with flexibility in where they work and we have various work-from-home policies across many of our global operations.
We have implemented the Responsible and Flexible Workplace Program ("ReFlex") in the U.S. that provides employees with flexibility in where they work, and we have various work-from-home policies across many of our global operations.
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, Compensation, and Related Party Transactions Committees of our Board; and our Modern Slavery Transparency Statement.
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 Information; Amended and Restated By-laws; charters for the Audit & Finance, Governance, Compensation, and Related Party Transactions Committees of our Board; Modern Slavery Transparency Statement; Conflict Minerals Policy; and Tax Strategy Statement.
In addition to salaries, we offer the following benefits, among others, which vary by employee level and by the country where the employees are located: • contributory healthcare, dental and vision benefits; • bonuses; • stock awards; • retirement programs (including pension and savings plans); • health savings and flexible spending accounts; • paid time off; • paid parental leave; • disability programs; and • employee assistance programs.
In addition to competitive salaries, we offer the following benefits, among others, which vary by employee level and by the country where an employee is located: • contributory healthcare, dental and vision benefits; • bonuses; • stock awards; • retirement programs (including pension and savings plans); • health savings and flexible spending accounts; • paid time off; • paid parental leave; • disability programs; and • employee assistance programs.
Debt Capital Activities For information regarding our debt activities, see Note 15 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.
Debt Capital Activities For information regarding our debt activities, see Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report. 8 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.
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 SEC.
We make available through the Investor section of this website under "About B&W>Investor>Financial Reports," 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 SEC.
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.
Customer demand is heavily affected by the variations in our customers’ business cycles, power demand in their operating territories and by the overall economies and energy, environmental and noise abatement needs of the countries in which they operate.
We provide aftermarket parts, construction, maintenance, engineered upgrades and field services for our installed base as well as the installed base of other OEMs; the substantial and stable cash flows generated from these businesses helps to fund our investments in new clean energy initiatives.
We provide aftermarket parts, construction, maintenance, engineered upgrades and field services for our installed base as well as the installed base of other original equipment manufacturers; the substantial and stable cash flows generated from these businesses help to fund our investments in new clean energy initiatives.
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.
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.
Human Capital Resources Human Capital Management At December 31, 2023, we had approximately 2,250 employees worldwide, of which approximately 2,200 were full-time. Approximately 450 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.
Human Capital Resources Human Capital Management At December 31, 2024, we had approximately 1,950 employees worldwide, of which approximately 1,900 were full-time. Approximately 435 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.
ITEM 1. Business We are a growing, globally-focused renewable, environmental and thermal technologies provider with over 155 years of experience providing diversified energy and emissions control solutions to a broad range of industrial, electrical utility, municipal and other customers. Our innovative products and services are organized into three market-facing segments.
ITEM 1. Business We are a globally focused renewable, environmental and thermal technologies provider with over 155 years of experience providing diversified energy and emissions control solutions to a broad range of industrial, electrical utility, municipal and other customers.
We successfully renegotiated one union contract in 2023 and have three that will expire in 2024. We consider our relationships with our employees and unions to be in good standing.
We successfully renegotiated four union contracts in 2024 and have two that will expire in 2025. We consider our relationships with our employees and unions to be in good standing.
Our unique range of offerings, coupled with the strength of our brand, provides a competitive advantage in existing and emerging markets. 6 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.
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.
In addition to our aftermarket offerings, we also provide complete steam generation systems including package boilers, watertube and firetube waste heat boilers, and other boilers to medium and heavy industrial customers.
In addition to our aftermarket offerings, we also provide complete steam generation systems including package boilers, watertube and firetube waste heat boilers, and other boilers to medium and heavy industrial customers. Our unique range of offerings, coupled with the strength of our brand, provides a competitive advantage in existing and emerging markets.
Each segment’s primary competitors are summarized as follows: B&W Renewable segment B&W Environmental segment B&W Thermal segment Andritz AG Aker Carbon Capture ASA AZCO Inc. Hitachi Zosen Corporation Durr Group Babcock Power Inc. (1) Keppel Ltd. Elessent Clean Technologies Inc. Clyde Bergemann Power Group MARTIN GmbH ENEXIO Management GmbH Doosan Corporation (1) Steinmuller Engineering GmbH EVAPCO, Inc. Enerfab, Inc.
Each segment’s primary competitors are summarized as follows: B&W Renewable segment B&W Environmental segment B&W Thermal segment Andritz AG Aker Carbon Capture ASA AZCO Inc. Clyde Industries, Inc. Dürr Group Babcock Power Inc. (1) Steinmüller Engineering GmbH Elessent Clean Technologies Inc. Clyde Bergemann Power Group Valmet Oyj UCC Environmental Doosan Corporation (1) Radscan AB Enerfab, Inc. Seagull Environmental Technologies, Inc.
Our reportable segments are as follows: • Babcock & Wilcox Renewable: Our innovative hydrogen generation technology (BrightLoop TM ) supports global climate goals including the decarbonization of industrial and utility steam and power producers.
Our innovative products and services are organized into the following market-facing reporting segments: • Babcock & Wilcox Renewable: Our innovative BrightLoo p ™ hydrogen generation technology supports global climate goals including the decarbonization of industrial and utility steam and power producers.
Valmet Oyj Paharpur Cooling Towers Ltd. General Electric Company (1) Radscan AB Mitsubishi Power, Ltd. (1) Seagull Environmental Technologies, Inc. Southern Environmental, Inc (1) Babcock Power Inc., Doosan Corporation, General Electric Company and Mitsubishi Power, Ltd. are also considered primary competitors of the B&W Environmental Segment.
GE Vernova, Inc. (1) Southern Environmental, Inc Mitsubishi Power, Ltd. (1) (1) Babcock Power Inc., Doosan Corporation, GE Vernova, Inc., and Mitsubishi Power, Ltd. are also considered primary competitors of the B&W Environmental Segment.
We also offer best-in-class technologies for efficient and environmentally sustainable power and heat generation, including waste-to-energy, oxygen-fired biomass-to-energy (OxyBright TM ), and black liquor systems for the pulp and paper industry. Our leading waste-to-energy technologies support a circular economy, diverting waste from landfills to use for power generation or district heating, while recovering metals and reducing emissions.
We also offer best-in-class technologies for efficient and environmentally sustainable power and heat generation, oxygen-fired biomass-to-energy (OxyBright ™ ), and black liquor systems for the pulp and paper industry.
In certain instances, these situations have resulted in cost increases and delays or disruptions that have had, and could continue to have, an adverse impact on our ability to meet customers’ demands.
Market Update Management continues to adapt to macroeconomic conditions, including the impacts from inflation, higher interest rates and foreign exchange rate volatility and geopolitical conflicts. In certain instances, these situations have resulted in cost increases and delays or disruptions that have had, and could continue to have, an adverse impact on our ability to meet customers’ demands.
Our broad experience includes systems for cooling, ash handling, particulate control, nitrogen oxide and sulfur dioxide removal, dioxin and furan control, carbon dioxide capture, mercury control as well as other acid gas and pollutant control.
Our broad experience includes systems for cooling ash handling, particulate control, nitrogen oxides and sulfur dioxides removal, chemical looping for carbon control and mercury control.
To date, we have installed approximately 500 waste-to-energy and biomass-to-energy units at more than 300 facilities in approximately 30 countries which serve a wide variety of utility, waste management, municipality and investment firm customers. • Babcock & Wilcox Environmental: Our full suite of best-in-class emissions control and environmental technology solutions for utility, waste-to-energy, biomass-to-energy, carbon black, and industrial steam generation applications supports environmental stewardship around the world.
Our leading waste-to-energy technologies support a circular economy, diverting waste from landfills to use for power generation and replacing fossil fuels, while recovering recyclable metals and reducing emissions. • Babcock & Wilcox Environmental: Our full suite of emissions control and environmental technology solutions for utility, waste-to-energy, biomass-to-energy, carbon black, and industrial steam generation applications around the world.
Removed
Market Update Management continues to adapt to macroeconomic conditions, including the impacts from inflation, higher interest rates and foreign exchange rate volatility, geopolitical conflicts (including the ongoing conflicts in Ukraine and the Middle East) and global shipping and supply chain disruptions that continued to have an impact during 2023.
Added
We believe these technologies position us to compete in the 7 bioenergy sector within the carbon capture and sequestration (BECCS) market.
Removed
Foreign Operations Our operations in Denmark provide comprehensive services to companies in the waste-to-energy and biomass-to-energy sector of the power generation market, currently primarily in Europe.
Added
Our portfolio of clean power production solutions continues to evolve to reach customers at all stages of their energy transition. • Babcock & Wilcox Thermal: Our vast installed base of steam generation equipment includes aftermarket parts, construction, maintenance and field services for plants in the power generation, oil and gas and industrial sectors.
Removed
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.
Added
We have an extensive global base of installed equipment for utilities and general industrial applications including refining, petrochemical, food processing, metals and others.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

85 edited+23 added−17 removed178 unchanged
Biggest changeWe 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 no serious shortage exists at this time, growth or volatility in the global economy may exacerbate pressures on us and our suppliers, which could affect our operating and financial results.
Biggest changeOur operations use raw materials in various forms and components and accessories for assembly, which are available from numerous sources. 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.
Our contractual performance may be affected by third parties’ and subcontractors’ failure to meet schedule, quality and other requirements in our contracts, which could increase our costs, scope, or technical difficulty or in extreme cases, limit our ability to meet contractual requirements.
Our contractual performance may be affected by third parties’ and subcontractors’ failure to meet schedule, quality and other requirements in our contracts, which could increase costs, scope, or technical difficulty or in extreme cases, limit our ability to meet contractual requirements.
Sections 382 and 383 of the IRC limits for U.S. federal income tax purposes, the annual use of NOL carryforwards, disallowed interest carryforwards and tax credit carryforwards, respectively, following an ownership change.
Sections 382 and 383 of the IRC limits for U.S. federal income tax purposes, the annual use of NOL carryforwards and disallowed interest carryforwards and tax credit carryforwards, respectively, following an ownership change.
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; • failure of our operating results to meet the estimates of securities analysts or the expectations of our shareholders; • securities analysts' changes 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; 24 • 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.
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; • failure of our operating results to meet the estimates of securities analysts or the expectations of our shareholders; • securities analysts' changes 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.
If these information systems are damaged, intruded upon, attacked, shutdown or cease to function properly, whether by misconfiguration, planned upgrades, force majeure events, telecommunication failures, malware or viruses, or other cybersecurity incidents and our business continuity plans do not mitigate 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 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.
If these information systems are damaged, intruded upon, attacked, shutdown or cease to function properly, whether by misconfiguration, planned upgrades, force majeure events, telecommunication failures, malware or viruses, or other cybersecurity incidents and our business continuity plans do not mitigate 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 21 product sales, our ability to comply with regulations related to information contained on our information technology 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.
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: • the construction and manufacture of renewable, environmental and thermal products; • clean air and other environmental protection legislation; • taxation of domestic and foreign earnings; • tariffs, duties, or trade sanctions and other trade barriers imposed by countries that restrict or prohibit business transactions in certain markets or in certain goods; • user privacy, security, data protection, content, and online-payment services; • intellectual property; • transactions in or with foreign countries or officials; and • use of local employees and suppliers.
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: • the construction and manufacture of renewable, environmental and thermal products; • clean air and other environmental protection legislation; • taxation of domestic and foreign earnings; • tariffs, duties, trade sanctions or trade wars and other trade barriers imposed by countries that restrict or prohibit business transactions in certain markets or in certain goods; • user privacy, security, data protection, content, and online-payment services; • intellectual property; • transactions in or with foreign countries or officials; and • use of local employees and suppliers.
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 15 subsidiaries and their affiliates from future liability for such claims.
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.
Our ability to meet customer delivery schedules for our backlog is dependent on a number of factors including, but not limited to, access to the raw materials required for production, an adequately trained and capable workforce, project engineering expertise for certain large projects, sufficient manufacturing plant capacity, available subcontractors and appropriate planning and scheduling of manufacturing resources.
Our ability to meet customer delivery schedules for our backlog is dependent on a number of factors including, but not limited to, access to the raw materials required for production, an adequately trained and capable workforce, project engineering expertise for certain large projects, sufficient manufacturing plant capacity, available subcontractors and appropriate planning and scheduling of 16 manufacturing resources.
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; 16 • 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.
These expenditures are influenced by such factors including, but not limited to: • prices for electricity, along with the cost of production and distribution; 18 • 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.
Our ability to successfully execute acquisitions will be impacted by factors including the availability of financing on terms acceptable to us, the potential reduction of our ability or willingness to incur debt to fund acquisitions due to macroeconomic conditions, our financial results, the willingness of target companies to sell, our ability to identify acquisition candidates that meet our valuation parameters and increased competition for acquisitions.
Our ability to successfully execute acquisitions will be impacted by factors including the availability of financing on terms acceptable to us, the potential reduction of our ability or willingness to incur debt to fund acquisitions due to macroeconomic conditions, our financial results, the willingness of target companies to sell, our ability to identify acquisition candidates that meet our valuation parameters and competition for acquisitions.
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 22 anticipate. Such expenditures and liabilities may adversely affect our business, financial condition, results of operations and cash flows.
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.
Based on information that is publicly available, we determined that a Section 382 ownership change occurred in July 2019 as a result of the Equitization Transactions. If we experience subsequent ownership changes, certain NOL carryforwards (including previously disallowed interest carryforwards) may be subject to more than one section 382 limitation.
Based on information that is publicly available, we determined that a Section 382 ownership change occurred in July 2019 as a result of the Equitization 28 Transactions. If we experience subsequent ownership changes, certain NOL carryforwards (including previously disallowed interest carryforwards) may be subject to more than one section 382 limitation.
Our ability to obtain and maintain sufficient capacity under our Debt Facilities is essential to allow us to support the issuance of letters of credit, bank guarantees and surety bonds. Without sufficient capacity, our ability to support contract security requirements in the future will be diminished. Our total assets include goodwill and other indefinite-lived intangible assets.
Our ability to obtain and maintain sufficient capacity under our Debt Facilities is essential to allow us to support the issuance of letters of credit, bank guarantees and surety bonds. Without sufficient capacity, our ability to support contract security requirements in the future will be diminished. 20 Our total assets include goodwill and other indefinite-lived intangible assets.
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, but it could be material. 21 Our business and our customers’ businesses are required to obtain, and to comply with, national, state and local government permits and approvals.
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, but it could be material. Our business and our customers’ businesses are required to obtain, and to comply with, national, state and local government permits and approvals.
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.
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. 22 Our failure to protect our intellectual property rights may result in the loss of valuable technologies or adversely affect our competitive business position.
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.
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 24 associated with accidents or for unrelated claims.
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.
We cannot assure you 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.
Our insurance coverage may not 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.
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.
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.
These disagreements could result in delays, additional costs and risks of litigation. In these arrangements, we sometimes have 15 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.
Potential difficulties we may encounter as part of the integration process 13 include (i) the inability to successfully integrate transportation networks; (ii) complexities and unanticipated issues associated with integrating the businesses’ complex systems, technologies and operating procedures; (iii) integrating workforces while maintaining focus on achieving strategic initiatives; (iv) potential unknown liabilities and unforeseen increased or new expenses; (v) the possibility of faulty assumptions underlying expectations regarding the integration process; and (vi) the inability to improve on historical operating results.
Potential difficulties we may encounter as part of the integration process include (i) the inability to successfully integrate transportation networks; (ii) complexities and unanticipated issues associated with integrating such businesses’ complex systems, technologies and operating procedures; (iii) integrating workforces while maintaining focus on achieving strategic initiatives; (iv) potential unknown liabilities and unforeseen increased or new expenses; (v) the possibility of faulty assumptions underlying expectations regarding the integration process; and (vi) the inability to improve on historical operating results.
Third-party 12 supplier and subcontractor business interruptions could include but are not limited to, interruptions to business operations due to a pandemic or other health crises, work stoppages, union negotiations, other labor disputes and payment disputes.
Third-party supplier and subcontractor business interruptions could include but are not limited to, interruptions to business operations due to a pandemic or other health crises, work stoppages, union negotiations, other labor disputes and payment disputes.
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. 27 We outsource certain business processes to third-party vendors and have certain business relationships that subject us to risks, including disruptions in business which could increase our costs.
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. 29 We outsource certain business processes to third-party vendors and have certain business relationships that subject us to risks, including disruptions in business which could increase our costs.
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. 28 Item 1B. Unresolved Staff Comments None
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. 30 Item 1B. Unresolved Staff Comments None
Our financial performance could be adversely affected due to our inability to meet customer demand for our products or services in the event of a material disruption at one of our manufacturing or services facilities. Equipment failures, natural disasters, power outages, fires, explosions, terrorism, adverse weather conditions, labor disputes or other influences could create a material disruption.
Our financial performance could be adversely affected due to our inability to meet customer demand for our products or services in the event of a material disruption at one of our manufacturing or services facilities. Equipment failures, natural disasters, power outages, fires, including wildfires, explosions, terrorism, adverse weather conditions, labor disputes or other influences could create a material disruption.
Demand for our products and services has been, and we expect that demand will continue to be, subject to significant fluctuations due to macroeconomic and industry conditions, including but 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, business and consumer confidence, unemployment levels and energy conservation measures.
Demand for our products and services has been, and we expect that demand will continue to be, subject to significant fluctuations due to macroeconomic and industry conditions, including but 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, tariffs and trade wars, business and consumer confidence, unemployment levels and energy conservation measures.
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.
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, and due to increases in tariffs over the term of the contract.
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 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 limit our ability to raise capital through the issuance of equity securities.
A reduction or interruption in supply, including disruptions due to a pandemic, geopolitical conflicts (including the ongoing conflicts in Ukraine and the Middle East), a significant natural disaster, shortages in global freight capacity, significant increases in the price of critical components and raw materials, a failure to appropriately forecast or adjust our requirements for components or raw materials based on our business needs could materially adversely affect our business, operating results, and financial condition and could materially damage customer relationships.
A reduction or interruption in supply, including disruptions due to a pandemic, geopolitical conflicts (including the ongoing conflicts in Ukraine and the Middle East), a significant natural disaster, shortages in global freight capacity, significant increases in the price of critical components and raw materials, including due to increased tariffs or trade wars, a failure to appropriately forecast or adjust our requirements for components or raw materials based on our business needs could materially adversely affect our business, operating results, and financial condition and could materially damage customer relationships.
If our co-venturers fail to perform their 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.
If our co-venturers fail to perform their obligations on a contract or if we fail to coordinate effectively with our co-venturers, we could be exposed to legal liability, damage to 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.
Similar laws have passed in Virginia, Connecticut, Utah and Colorado, and have been enacted or proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. We rely on intellectual property law and confidentiality agreements to protect our intellectual property.
Similar laws have passed in Virginia, Connecticut, Utah, Colorado, Indiana, Montana and Oregon and have been enacted or proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. We rely on intellectual property law and confidentiality agreements to protect our intellectual property.
Riley has 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 and the other shareholders party thereto.
Riley has customary demand and piggyback registration rights for all shares of our common stock they beneficially own. We filed a resale shelf registration 26 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.
Some or all of our 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 IRC.
Some or all of our 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 IRC.
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.
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.
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; • changes in foreign currency exchange rates; and • tariffs, price controls and trade agreements and disputes.
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, such as tariffs and trade wars; • overlap of different tax structures; 25 • changes in foreign currency exchange rates; and • tariffs, price controls and trade agreements and disputes.
Due to the existence of these material weaknesses, we concluded that our internal control over financial reporting was not effective as of December 31, 2023.
Due to the existence of these material weaknesses, we concluded that our internal control over financial reporting was not effective as of December 31, 2024.
As of December 31, 2023, our defined benefit pension and postretirement benefit plans were underfunded by approximately $164.6 million . In addition, certain of these postretirement benefit plans were collectively bargained, and our ability to curtail or change th e benefits provided may be impacted by contractual provisions set forth in the relevant union agreements and other plan documents.
As of December 31, 2024, our defined benefit pension and postretirement benefit plans were underfunded by approximately $184.6 million . In addition, certain of these postretirement benefit plans were collectively bargained, and our ability to curtail or change th e benefits provided may be impacted by contractual provisions set forth in the relevant union agreements and other plan documents.
We have international operations primarily in Europe, Canada, and Mexico. For the year ended December 31, 2023, international operations accounted for approximately 49% 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 have international operations primarily in Europe, Canada, and Mexico. For the year ended December 31, 2024, international operations accounted for approximately 35% 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.
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.
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 and other circumstances or requirements that may or may not be within our control or influence.
As discussed in Part II, Item 9A. of this Annual Report, we identified certain material weaknesses as of December 31, 2023 in three components of internal control based on criteria established in the 2013 Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
As discussed in Part II, Item 9A. of this Annual Report, we identified certain material weaknesses as of December 31, 2024 in five components of internal control based on criteria established in the 2013 Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
The abundant availability of natural gas has caused from time to time, 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.
The availability of natural gas in great supply has caused from time to time, 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.
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.
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 GAAP. These accounting principles are subject to interpretation or changes by FASB and the SEC.
A significant increase in our effective tax rate could have a material adverse effect on our profitability and liquidity. 26 Our ability to use NOL and certain tax credits to reduce future tax payments could be further limited if we experience an additional “ownership change”.
A significant increase in our effective tax rate could have a material adverse effect on our profitability and liquidity. Our ability to use NOL and certain tax credits to reduce future tax payments could be further limited if we experience an additional "ownership change".
Riley controls approximately 30.7% of the voting power represented by our common stock. B. Riley currently has the right to nominate one member 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.
As of December 31, 2024, B. Riley controls approximately 30.3% of the voting power represented by our common stock. B. Riley currently has the right to nominate one member 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.
Under long-term contracts, we may incur capital expenditures or other costs at the beginning of the contract that we expect to recoup through the life of the contract. Some of these contracts provide for advance payments to assist us in covering these costs and expenses.
We routinely enter into long-term contracts with customers. With long-term contracts, we may incur capital expenditures or other costs at the beginning of the contract that we expect to recoup through the life of the contract. Some of these contracts provide for advance payments to assist us in covering these costs and expenses.
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.
Some of these risks include: • difficulties encountered on our large-scale contracts related to the procurement of materials, including due to increases in tariffs or trade wars, 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 resulting in contract delays or additional costs. 14 Disputes with customers with long-term contracts could adversely affect our financial condition.
Our backlog is subject to unexpected adjustments and cancellations and may not be a reliable indicator of future revenues or earnings; our inability to deliver our backlog on time could affect our future sales and profitability, and our relationships with our customers. Our backlog was $530.5 million as of December 31, 2023 and $549.1 million at December 31, 2022.
Our backlog is subject to unexpected adjustments and cancellations and may not be a reliable indicator of future revenues or earnings; our inability to deliver our backlog on time could affect our future sales and profitability, and our relationships with our customers. Our backlog was $540.1 million as of December 31, 2024 and $368.2 million at December 31, 2023.
A dispute with a customer during the life of a long-term contract could impact our ability to receive payments or otherwise recoup incurred costs and expenses.
A dispute with a customer during the life of a long-term contract could, and in the past has, impacted our ability to receive payments or otherwise recoup incurred costs and expenses.
We may also be required to register for resale any additional shares of our common stock that B. Riley may acquire in the future.
Riley and the other shareholders party thereto. We may also be required to register for resale any additional shares of our common stock that B. Riley may acquire in the future.
As described in Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, during 2021, we completed offerings of $151.2 million aggregate principal amount of our 8.125% senior notes due 2026 (“8.125% Senior Notes”) and $151.4 million aggregate principal amount of our 6.50% senior notes due in 2026 (the “6.50% Senior Notes” and, together with the 8.125% Senior Notes, the “Notes Due 2026”).
As described in Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, during 2021, we completed offerings of $151.2 million aggregate principal amount of our 8.125% Senior Notes due February 2026 and $151.4 million aggregate principal amount of our 6.50% Senior Notes due December 2026.
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 us will be diluted and the value of our common stock may be reduced. B. Riley has significant influence over us. As of December 31, 2023, B.
Further, if we were to issue additional equity securities (or securities convertible into or exchangeable or exercisable for equity securities) to raise additional capital, including in connection with any financing, our shareholders' ownership interests in us will be diluted and the value of our common stock may be reduced. B. Riley has significant influence over us.
Risks Related to Environmental Regulation Our operations are subject to various environmental laws and legislation that may become more stringent in the future.
See "Risks Related to Environmental Regulation" below for further information. Risks Related to Environmental Regulation Our operations are subject to various environmental laws and legislation that may become more stringent in the future.
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. 23 Our international operations are subject to political, economic and other uncertainties not generally encountered in our domestic operations.
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.
As of December 31, 2023, we had an aggregate of approximately 89.4 million shares of common stock outstanding, approximately 27.4 million shares of which were held by B. Riley. We entered into a registration rights agreement with B. Riley and other shareholders on April 30, 2019, pursuant to which B.
As of December 31, 2024, we had an aggregate of approximately 95.1 million shares of common stock outstanding, approximately 28.8 million shares of which were held by B. Riley. We entered into the Registration Rights Agreement with B. Riley and other shareholders on April 30, 2019, pursuant to which B.
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.
Generally, future changes in applicable U.S. or foreign tax laws and regulations, including the Organisation for Economic Co-operation and Development's ("OECD") Global Minimum Tax ("Pillar 2") initiative, 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.
Since December 2022, we have entered into a number of amendments and waivers to our Debt Facilities to, among other things, provide relief or waiver under certain financial and other covenants and to waive certain events of default thereunder. 11 Although we currently have approximately $5.0 available to borrow under our new Credit Agreement with Axos Bank (as discussed in Note 25 to the Consolidated Financial Statements included in Part II, Item 8 of this Report), we expect that we will require additional financing to fund working capital to continue as a going concern.
Since December 2022, we have entered into a number of amendments and waivers to our Debt Facilities to, among other things, provide relief or waiver under certain financial and other covenants and to waive certain events of default thereunder. 12 Although we currently have approximately $5.0 million available to borrow under our Credit Agreement, we expect that we will require additional financing to fund working capital to continue as a going concern.
If we fail to make innovations, launch products with quality problems, experience development cost overruns, or the market does not accept our new products, then our financial condition, results of operations, cash flows and liquidity could be adversely affected.
If we fail to make innovations, launch products with quality problems, experience development cost overruns, or the market does not accept our new products, then our financial condition, results of operations, cash flows and liquidity could be adversely affected. Risks Related to Our Industry We derive substantial revenues from electric power generating companies and other steam-using industries.
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 us that a shareholder may consider favorable. 25 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.
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.
As of December 31, 2023, goodwill and other indefinite-lived intangible assets totaled $147.6 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.
As of December 31, 2024, goodwill and other indefinite-lived intangible assets totaled $101.2 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. No indicators of goodwill impairment were identified for our reporting units at the measurement date.
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 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 vendors also may be unable to meet our demand, significantly increase lead times for deliveries or impose significant price increases we are unable to offset through alternate sources of supply, price increases to our customers or increased productivity in our operations. 17 Our operations use raw materials in various forms and components and accessories for assembly, which are available from numerous sources.
Our 19 vendors also may be unable to meet our demand, significantly increase lead times for deliveries or impose significant price increases that we are or may be unable to offset through alternate sources of supply, price increases to our customers or increased productivity in our operations.
Riley has 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. If B.
Riley with respect to certain future issuances of our equity securities. As a result of these arrangements, B. Riley has 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. If B.
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, and automotive liability insurance to support our operations.
Moreover, certain 17 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.
The maturity date of the Credit Agreement is January 18, 2027, provided that if as of August 30, 2025, the Notes Due 2026 have not been refinanced pursuant to a Permitted Refinancing, as defined in the Credit Agreement, or the maturity date of all of the Notes Due 2026 has not been otherwise extended to a date on or after July 18, 2027, then the maturity date of the Credit Agreement is August 30, 2025.
The maturity date of the Credit Agreement is January 18, 2027, provided that by November 28, 2025, the Notes Due 2026 have not been refinanced pursuant to a Permitted Refinancing, as defined in the Credit Agreement.
Moreover, as the Russia-Ukraine conflict continues, there can be no certainty regarding whether such governments or other governments will impose additional sanctions, export controls or other economic or military measures against Russia. We do not currently have contracts directly with Russian entities or businesses and we currently do not conduct business in Russia directly.
Moreover, as the Russia-Ukraine conflict continues, there can be no certainty regarding whether such governments or other governments will impose additional sanctions, export controls or other economic or military measures against Russia.
General Risk Factors Our business could be harmed if we fail to maintain effective internal control over financial reporting.
General Risk Factors Our business could be harmed if we fail to maintain effective internal control over financial reporting, and we have identified certain material weaknesses as of December 31, 2024.
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.
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. 23 In addition, if existing laws or regulations are amended or are interpreted or enforced differently or if new environmental legislation or regulations are enacted or implemented, we or our customers may be also required to obtain additional operating permits or approvals.
The aggregate value of the letters of credit backstopping surety bonds was 18 $16.8 million. These letters of credit and bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts.
As of December 31, 2024, bonds issued and outstanding under these arrangements in support of contracts totaled approximately $177.8 million. The aggregate value of the letters of credit backstopping surety bonds was $15.7 million. These letters of credit and bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts.
We have developed and implemented strategies to mitigate previously implemented and, in some cases, proposed tariff increases, but there is no assurance we will be able to continue to mitigate prolonged tariffs. Further, uncertainties about future tariff changes could result in mitigation actions that prove to be ineffective or detrimental to our business.
We have developed and implemented strategies to mitigate previously implemented and, in some cases, proposed tariff increases, but there is no assurance we will be able to continue to mitigate prolonged tariffs.
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 us and our shareholders.
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 us and our shareholders. 27 Risks Relating to the 2015 Spin-Off from our Former Parent Potential indemnification liabilities to BWXT pursuant to the master separation agreement could materially adversely affect us.
While we maintain some of our critical information 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. 19 We face various threats to our information systems, including cyber threats, ransomware attacks, phishing attacks, threats to the physical security of our facilities and infrastructure from natural or man-made incidents or disasters, threats from insider and terrorist acts, as well as the potential for business disruptions associated with these threats.
We face various threats to our information systems, including cyber threats, ransomware attacks, phishing attacks, threats to the physical security of our facilities and infrastructure from natural or man-made incidents or disasters, threats from insider and terrorist acts, as well as the potential for business disruptions associated with these threats.
DPF") and/or the UK Extension of the EU-U.S. DPF, as well as certain approved forms of data protection agreements, called Standard Contractual Clauses, for 20 data transfers from EU and UK to the US.
DPF") and/or the UK Extension of the EU-U.S. DPF, as well as certain approved forms of data protection agreements, called Standard Contractual Clauses, for data transfers from EU and UK to the US. These transfer mechanisms may be subject to challenge or invalidation, which may restrict the transfer of personal data which could impact our operations and increase our costs.
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.
Demand for our products and services depends on spending in these historically cyclical industries. Additionally, legislative and regulatory developments relating to industry plans for spending 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.
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, 2023, bonds issued and outstanding under these arrangements in support of contracts totaled approximately $141.7 million.
We have also posted surety bonds to support contractual obligations to customers relating to certain 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.
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. 14 Our operations are subject to various risks, which could expose us to potentially significant professional liability, product liability, warranty and other claims.
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.
The aggregate value of all such letters of credit and bank guarantees outside of our Letter of Credit Agreement as of December 31, 2023, was $39.4 million. The aggregate value of the outstanding letters of credit provided under the Letter of Credit Agreement backstopping letters of credit or bank guarantees was $21.7 million as of December 31, 2023.
There are $41.3 million total outstanding letters of credit as of December 31, 2024. The aggregate value of all such letters of credit and bank guarantees outside of our Letter of Credit Agreement as of December 31, 2024, was $3.1 million.
Our revenues from sales to customers located outside of the U.S. represented approximately 49%, 46% and 41% of total revenues for the years ended December 31, 2023, 2022 and 2021, 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 U.S. operations.
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 U.S. operations.
These transfer mechanisms may be subject to challenge or invalidation, which may restrict the transfer of personal data which could impact our operations and increase our costs. In addition, the California Consumer Privacy Act and the California Privacy Rights Act placed additional requirements on the handling of personal data, including employee data.
In addition, the California Consumer Privacy Act and the California Privacy Rights Act placed additional requirements on the handling of personal data, including employee data.
Depending on our future financial condition and results of operations, we may be unable to refinance our Notes Due 2026 on or prior to their maturity or at all.
Depending on our future financial condition and results of operations, we may be unable to refinance our Notes Due 2026 on or prior to their maturity or at all. 13 In January 2024, we entered into a Credit Agreement, as described in Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
Claims as a result of our operations could adversely impact the ability of our insurance subsidiary to respond to all claims presented.
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.
Risks Related to Our Financial Condition The financial and other covenants in our debt agreements may adversely affect us. Our Debt Facilities contain financial and other restrictive covenants.
Although no serious shortage exists at this time, growth or volatility in the global economy may exacerbate pressures on us and our suppliers, which could affect our operating and financial results. Risks Related to Our Financial Condition The financial and other covenants in our debt agreements may adversely affect us. Our Debt Facilities contain financial and other restrictive covenants.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Director of IT is supported by our Director of IT Security and Compliance, who has more than 10 years of experience in information technology and IT security. 29 Our Director of IT and Director of IT Security and Compliance assess our cybersecurity readiness through internal assessment tools as well as third-party control tests, vulnerability assessments, audits and evaluation against industry standards.
Biggest changeOur Director of IT and Manager of IT Cybersecurity, Compliance and Data Privacy assess our cybersecurity readiness through internal assessment tools as well as third-party control tests, vulnerability assessments, audits and evaluation against industry standards.
Governance of cybersecurity risk management The Board of Directors, as a whole, has oversight responsibility for our strategic and operational risks. Management is responsible for day-to-day assessment and management of cybersecurity risks. The IT Steering Committee, comprised of a cross-functional group of our executive management, leads management's oversight of the IT function, including IT risk management.
Governance of cybersecurity risk management Our Board of Directors, as a whole, has oversight responsibility for our strategic and operational risks. Management is responsible for day-to-day assessment and management of cybersecurity risks. The IT Executive Steering Committee, comprised of a cross-functional group of our executive management, leads management's oversight of the IT function, including IT risk management.
Our Director of IT meets with the IT Steering Committee monthly to review our information technology systems and discuss key cybersecurity risks. In addition, quarterly the Director of IT reviews our entire risk management program, which includes cybersecurity risks, with Executive management and the Board of Directors.
Our Director of IT meets with the IT Steering Committee monthly to review our information technology systems and discuss key cybersecurity risks. In addition, quarterly the Director of IT reviews our entire risk management program, which includes cybersecurity risks, with the IT Executive Steering Committee and the Board of Directors.
We utilize several cybersecurity processes, technologies, and controls to aid in our efforts to assess, identify, and manage material risks from cybersecurity threats, and to protect against, detect and respond to cybersecurity incidents (as defined in Item 106(a) of Regulation S-K), including, among others, the following: • maintain a global Security Operations Center to support visibility to cybersecurity incidents in real time; • require all salaried employees to complete an annual cybersecurity training program where specific threats and scenarios are highlighted based on our analysis of current risks to the organization; • provide regular cybersecurity awareness and confidential information protection training and conduct phishing email simulations for employees and contractors with access to corporate email systems to enhance awareness and responsiveness to such possible threats; • maintain a Cybersecurity Incident Response Plan, which provides a framework for handling cybersecurity incidents based on, among other factors, the potential severity of the incident and facilitates cross-functional coordination of our response to such incidents, should they occur; • maintain cybersecurity insurance and regularly review our policy and levels of coverage based on current risks; • monitor emerging data protection and cybersecurity laws, and implement changes to our processes and systems designed to comply, and through policy, practice and contract (as applicable) require employees, as well as third parties who provide services on our behalf, to treat customer information and data with care; • conduct several cyber-specific penetration tests per year; and • engage consultants and other third parties, as appropriate, in connection with our cybersecurity practices.
We utilize several cybersecurity tactics, techniques, processes and controls to aid in our efforts to assess, identify, and manage material risks from cybersecurity threats, and to protect against, detect and respond to cybersecurity incidents (as defined in Item 106(a) of Regulation S-K), including, among others, the following: • maintain a Security Operations Center to support visibility to cybersecurity incidents in real time; • require all salaried employees to complete an annual cybersecurity training program where specific threats and scenarios are highlighted based on our analysis of current risks to the organization; • provide regular cybersecurity awareness and confidential information protection training and conduct phishing email simulations for employees and contractors with access to corporate email systems to enhance awareness and responsiveness to such possible threats; • maintain a Cybersecurity Incident Response Plan, which provides a framework for handling cybersecurity incidents based on, among other factors, the potential severity of the incident and facilitates cross-functional coordination of our response to such incidents, should they occur; • maintain cybersecurity insurance and regularly review our policy and levels of coverage based on current risks; • monitor emerging data protection and cybersecurity laws, and implement changes to our processes and systems designed to comply, and through policy, practice and contract (as applicable) require employees, as well as third parties who provide services on our behalf, to treat customer information and data with care; • conduct several cyber-specific penetration tests per year; and • engage consultants and other third parties, as appropriate, in connection with our cybersecurity practices.
We have governance and compliance structures that are designed to elevate potential threats or vulnerabilities relating to cybersecurity to our Director of IT and IT Steering Committee. We also employ various defensive and continuous monitoring techniques using recognized industry frameworks and cybersecurity standards.
We have governance and compliance structures that are designed to elevate potential threats or vulnerabilities relating to cybersecurity to our Director of IT, IT Steering Committee and IT Executive Steering Committee. We also employ various defensive and continuous monitoring techniques using recognized industry frameworks and cybersecurity standards.
Our Director of IT has 20 years of experience across various software engineering, IT security and compliance, business and management roles, including serving as the Director of Engineering Applications and Data Management, leading the development and implementation of information technology strategies and roadmaps for Digital and Engineering applications group.
Our Director of IT has 20 years of experience across various software engineering, IT security and compliance, business and management roles, including 31 serving as the Director of Engineering Applications and Data Management, leading the development and implementation of information technology strategies and roadmaps for Digital and Engineering applications group.
Our Director of IT has primary oversight of material risks from cybersecurity threats.
The IT Steering Committee, comprised of operational management, provides tactical oversight of the IT function, including IT risk management Our Director of IT has primary oversight of material risks from cybersecurity threats.
Added
The Director of IT is supported by our Director of IT Security and Compliance, who has more than 10 years of experience in information technology and IT security.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeBusiness Segment and Location Principal Use Owned/Leased (Lease Expiration) B&W Renewable segment Esbjerg, Denmark Manufacturing facility / administrative office Owned Taastrup, Denmark Administrative office Leased (2029) Freeport, Illinois Administrative office Leased (2026) B&W Environmental segment Paruzzaro, Italy Administrative office Leased (2027) Ding Xiang, Xin Zhou, Shan Xi, China Manufacturing facility Leased (2025) B&W Thermal segment Akron, Ohio Administrative office Leased (2034) Lancaster, Ohio Manufacturing facility Leased (2041) Copley, Ohio Warehouse / service center Leased (2033) Dumbarton, Scotland Manufacturing facility Owned Guadalupe, NL, Mexico Manufacturing facility Leased (2024) Cambridge, Ontario, Canada Administrative office / warehouse Leased (2024) Dartmouth, Nova Scotia, Canada Manufacturing facility Leased (2029) Tucker, Georgia Administrative office Leased (2028) Chanute, Kansas Manufacturing facility Leased (2043) 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.
Biggest changeBusiness Segment and Location Principal Use Owned/Leased (Lease Expiration) B&W Renewable segment Taastrup, Denmark (1) Administrative office Leased (2029) Esbjerg, Denmark (1) Administrative office Leased (2029) Massillon, Ohio Production facility under construction Leased (2028) B&W Thermal segment Akron, Ohio Administrative office Leased (2034) Lancaster, Ohio Manufacturing facility Leased (2041) Copley, Ohio Warehouse / service center Leased (2033) Dumbarton, Scotland Manufacturing facility Owned Guadalupe, NL, Mexico Manufacturing facility Leased (2039) Cambridge, Ontario, Canada Administrative office / warehouse Leased (2029) Dartmouth, Nova Scotia, Canada Manufacturing facility Leased (2029) Tucker, Georgia Administrative office / warehouse Leased (2028) Chanute, Kansas Manufacturing facility Leased (2043) (1) Leased office space that relates to our Vølund business that is now considered discontinued operations, see Note 4 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
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 as of December 31, 2023.
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 as of December 31, 2024.
Added
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. 32

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings For information regarding ongoing investigations and litigation, see Note 21 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, which we incorporate by reference into this Item. Item 4. Mine Safety Disclosures. 30 Not Applicable. PART II
Biggest changeItem 3. Legal Proceedings For information regarding ongoing investigations and litigation, see Note 20 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, which we incorporate by reference into this Item. Item 4. Mine Safety Disclosures Not Applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following graph provides a comparison of our cumulative total shareholder return over five years through December 31, 2023 to the return of the S&P 500, the Russell 2000 and our custom peer group. Assumes initial investment of $100 on December 31, 2018. 31 The peer group used for the comparison above is comprised of the following companies: AMETEK, Inc.
Biggest changeAssumes initial investment of $100 on December 31, 2019. The Company's peer group, including the "custom peer group" used for the comparison above is comprised of the following companies: AMETEK, Inc. Dycom Industries, Inc. MasTec, Inc. CECO Environmental Corp. Enerpac Tool Group Corp. Primoris Services Corporation Chart Industries, Inc. Enviri Corporation SPX Technologies, Inc.
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. As of February 29, 2024, we had 845 stockholders of record of our common stock.
Item 5. Market for Registrant's Common Equity Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the NYSE under the symbol BW. As of February 28, 2025, we had 830 stockholders of record of our common stock. See Part III, Item 12 of this Annual Report for information about our equity compensation plans.
See Part III, Item 12 of this Annual Report for information about our equity compensation plans. In accordance with the provisions of the employee benefit plans, we can acquire shares in connection with the vesting of employee restricted stock that require us to withhold shares to satisfy employee statutory income tax withholding obligations.
In accordance with the provisions of the employee benefit plans, we can acquire shares in connection with the vesting of employee restricted stock that require us to withhold shares to satisfy employee statutory income tax withholding obligations. We did not repurchase any of our equity securities during the quarter ended December 31, 2024.
Dycom Industries, Inc. MasTec, Inc. CECO Environmental Corp. Enerpac Tool Group Corp. Primoris Services Corporation Chart Industries, Inc. Enviri Corporation SPX Technologies, Inc. Crane Company Flowserve Corporation Tetra Tech, Inc. Curtiss-Wright Corporation Idex Corporation Item 6. [Reserved]
Crane Company Flowserve Corporation Tetra Tech, Inc. Curtiss-Wright Corporation IDEX Corporation Item 6. [Reserved]
Removed
We did not repurchase any of our equity securities during the quarter ended December 31, 2023. We do not have a general share repurchase program at this time.
Added
We do not have a general share repurchase program at this time. We have a history of paying cash dividends and currently expect that comparable cash dividends will continue to be paid in the future.
Added
Decisions on whether, when and in what amounts to continue making any future dividend distributions will remain at all times entirely at the discretion of our Board of Directors, which reserves the right, in its sole discretion, to change or terminate our dividend practices at any time and for any reason without prior notice.
Added
The payment of cash dividends in the future will be based upon a number of business, legal and other considerations, including changes in our financial position, capital allocation plans (including a desire to retain or accumulate cash), capital spending plans, stock purchase plans, acquisition strategies, strategic initiatives, debt payment plans (including a desire to maintain or improve credit ratings on our debt securities), debt covenant requirements, pension funding or other benefits payments. 33 The following graph provides a comparison of our cumulative total shareholder return over five years through December 31, 2024 to the return of the S&P 500, the Russell 2000 and our custom peer group.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeControls and Procedures 105 Disclosure Controls and Procedures 105 Management's Report on Internal Control Over Financial Reporting 106 Attestation Report of Independent Registered Public Accounting Firm 106 Changes in Internal Control Over Financial Reporting 107 Report of Independent Registered Public Accounting Firm 106 Item 9B. Other Information 109
Biggest changeChanges in and Disagreements with Accountants on Accounting and Financial Disclosure 107 Item 9A. Controls and Procedures 107 Evaluation of D isclosure Controls and Procedures 107 Management's Report on Internal Control Over Financial Reporting 108 Changes in Internal Control Over Financial Reporting 110 Report of Independent Registered Public Accounting Firm 110 Item 9B. Other Information 112 Insider Trading Arrangements 112
Consolidated Financial Statements and Supplemental Data 47 Report of Independent Registered Public Accounting Firm 47 Consolidated Statements of Operations for the Years Ended December 31, 2023, 2022, and 2021 50 Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2023, 2022, and 2021 51 Consolidated Balance Sheets as of December 31, 2023 and 2022 52 Consolidated Statement of Stockholders' Equity for the Years Ended December 31, 2023, 2022, and 2021 53 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022, and 2021 54 Notes to Consolidated Financial Statements 56 Item 9A.
Consolidated Financial Statements and Supplemental Data 50 Report of Independent Registered Public Accounting Firm 50 Consolidated Statements of Operations for the Years Ended December 31, 2024, 2023, and 2022 53 Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2024, 2023, and 2022 54 Consolidated Balance Sheets as of December 31, 2024 and 2023 55 Consolidated Statement of Stockholders' (Deficit) Equity for the Years Ended December 31, 2024, 2023, and 2022 56 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023, and 2022 57 Notes to Consolidated Financial Statements 59 Item 9.
Item 6. Reserved 32 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation 32 Overview 32 Results of Operations - Years Ended December 31, 202 3 , 202 2 and 2021 34 Liquidity and Capital Resources 42 Critical Accounting Policies and Estimates 44 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 46 Item 8.
Item 6. Reserved 34 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation 34 Overview 34 Results of Operations - Years Ended December 31, 2024, 2023 and 2022 37 Liquidity and Capital Resources 45 Critical Accounting Policies and Estimates 47 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 49 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

77 edited+58 added−65 removed32 unchanged
Biggest changeYear ended December 31, (in thousands) 2023 2022 Net loss $ (196,971) $ (26,584) Loss from discontinued operations, net of tax (118,338) (6,596) Loss from continuing operations (78,633) (19,988) Interest expense, net 48,703 44,220 Income tax expense 8,481 11,059 Depreciation & amortization 19,990 21,628 EBITDA (1,459) 56,919 Benefit plans, net 37,505 (37,528) Loss (gain) on asset sales, net 57 (2,539) Stock compensation 7,121 8,654 Restructuring activities and business services transition costs 5,663 8,474 Advisory fees for settlement costs and liquidity planning 1,107 1,509 Settlement and related legal (recoveries) costs (1,474) 10,734 Acquisition pursuit and related costs 827 5,504 Product development 9,023 4,100 Foreign exchange 2,507 582 Financial advisory services — 1,424 Contract disposal 8,550 2,976 Letter of credit fees 7,702 5,204 Other - net 2,002 1,496 Adjusted EBITDA (1) $ 79,131 $ 67,509 37 (1) Adjusted EBITDA for the year ended December 31, 2022 includes a $6.2 million non-recurring gain on sale related to development rights of a renewable energy project.
Biggest changeWe present consolidated Adjusted EBITDA because we believe it is useful to investors to help facilitate comparisons of the ongoing, operating performance before corporate overhead and other expenses not attributable to the operating performance of our revenue generating segments. 39 Year ended December 31, (in thousands) 2024 2023 2022 Net loss $ (59,779) $ (196,971) $ (26,584) Income (loss) from discontinued operations, net of tax 13,183 (121,177) (12,398) Loss from continuing operations (72,962) (75,794) (14,186) Interest expense, net 45,332 41,486 39,211 Income tax expense 12,172 9,818 9,071 Depreciation & amortization 11,125 14,300 16,247 EBITDA (4,333) (10,190) 50,343 Impairment of goodwill and long-lived assets 3,729 — — Benefit plans, net 31,937 37,505 (37,528) (Gain) loss on asset sales, net (354) 134 (2,523) Stock compensation 4,509 7,121 7,487 Restructuring activities and business services transition costs 1,296 2,619 5,981 Advisory fees for settlement costs and liquidity planning 1,234 1,107 1,509 Loss on debt extinguishment 7,267 — — Settlement and related legal costs (recoveries) 4,044 (1,474) 9,109 Acquisition pursuit and related costs 643 827 5,504 Product development (1) 8,228 9,023 4,100 Foreign exchange 109 2,594 1,025 Financial advisory services — — 1,424 Letter of credit fees 7,036 7,702 5,204 Other - net 3,550 3,837 3,932 Adjusted EBITDA $ 68,895 $ 60,805 $ 55,567 (1) Costs associated with development of commercially viable products that are ready to go to market.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion of our financial position and results of operations should be read in conjunction with the financial statements and the notes thereto included in Consolidated Financial Statements and Supplemental Data in Item 8 within this Annual Report.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion of our financial position and results of operations should be read in conjunction with the financial statements and the notes thereto included in the Consolidated Financial Statements and Supplemental Data in Item 8 within this Annual Report.
Such changes could have a material effect on our financial position, results of operations and cash flows. See Note 12 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for further discussion.
Such changes could have a material effect on our consolidated financial position, results of operations and cash flows. See Note 12 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for further discussion.
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 counterparty that supports our expectations about their willingness and ability to pay for the additional cost along with a reasonable margin.
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 the relevant history with the counterparty that supports expectations about their willingness and ability to pay for the additional cost along with a reasonable margin.
Cash flows provided by financing activities was $8.6 million during the year ended December 31, 2023, primarily related to net borrowings of $25.9 million, partially offset by payments of preferred stock dividends of $11.1 million and payment of holdback funds related to an acquisition of $2.8 million.
Cash flows provided by financing activities of $8.6 million during the year ended December 31, 2023, primarily related to net borrowings of $25.9 million, partially offset by payments of preferred stock dividends of $11.1 million and payment of holdback funds related to an acquisition of $2.8 million.
For those tax positions where it is more likely than not that a tax benefit will be realized, we have recorded the 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 tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the 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.
Revenue from our operations is assessed based on our three market-facing segments. B&W Renewable, B&W Environmental and B&W Thermal. Operating income Operating income consists primarily of our revenue minus costs and expenses, including cost of operations, SG&A and advisory fees and settlement costs.
Revenue from our operations is assessed based on our three market-facing segments. B&W Renewable, B&W Environmental and B&W Thermal. Operating income (loss) Operating income (loss) consists primarily of our revenue minus costs and expenses, including cost of operations, SG&A and advisory fees and settlement costs.
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.
We record a valuation allowance to reduce 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.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have, or are reasonably expected to have, a material current or future effect on its financial condition, results of operations, liquidity, capital expenditures or capital resources as of December 31, 2023.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have, or are reasonably expected to have, a material current or future effect on its financial condition, results of operations, liquidity, capital expenditures or capital resources as of December 31, 2024.
As of December 31, 2023, 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.
As of December 31, 2024, 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.
We fund our liquidity requirements primarily through cash generated from operations, external sources of financing, including our Credit Agreement with Axos Bank and senior notes, and equity offerings, including our Preferred Stock, each of which are described below and in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report in further detail.
We fund our liquidity requirements primarily through cash generated from operations, external sources of financing, including our Credit Agreement, senior notes, and equity offerings, and our Preferred Stock, each of which are described below and in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report in further detail.
Assets and Liabilities Held for Sale and Discontinued Operations Assets and liabilities classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation and amortization of assets ceases upon designation as held for sale.
Assets and Liabilities Held for Sale and Discontinued Operations Assets and liabilities classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation and amortization of assets cease upon designation as held for sale.
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. The following discussion includes a comparison of Results of Operations and Liquidity and Capital Resources for the years ended December 31, 2023 and 2022.
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. 34 The following discussion includes a comparison of Results of Operations and Liquidity and Capital Resources for the years ended December 31, 2024 and 2023.
Customer demand is heavily affected by the variations in our customers' business cycles, power demand in their operating territories, and by the overall economies and energy, environmental and noise abatement needs of the countries in which they operate. We have manufacturing facilities in Mexico, the United States, Denmark, the United Kingdom and China.
Customer demand is heavily affected by the variations in our customers' business cycles, power demand in their operating territories, and by the overall economies and energy, environmental and noise abatement needs of the countries in which they operate. We have manufacturing facilities in Canada, Mexico, the United States and the United Kingdom.
When viewed in conjunction with GAAP results and the accompanying reconciliation, we believe that the 36 presentation of these measures provides investors with greater transparency and a greater understanding of factors affecting our financial position and results of operations than GAAP measures alone.
When viewed in conjunction with GAAP results and the accompanying reconciliations, we believe that the presentation of these measures provides investors with greater transparency and a greater understanding of factors affecting our financial position and results of operations than GAAP measures alone.
For those income tax positions where it is not more likely than not that a tax benefit will be realized, no tax benefit has been recognized in the 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 in the Consolidated Statements of Operations.
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 the 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 in the Consolidated Statements of Operations.
Claims receivable at December 31, 2023 and 2022 was not significant in the Consolidated Financial Statements. 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.
Claims receivable at December 31, 2024 and 2023 were not significant in the Consolidated Financial Statements. 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.
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 the amount can be reasonably estimated and its realization is probable.
We recognize accrued claims in contract revenues for additional work or changes in the scope of work to the extent of costs incurred when we believe we have an enforceable right to the modification or claim, the amount can be reasonably estimated and its realization is probable.
Backlog can vary significantly from period to period, particularly when large new-build conversions projects or operations and maintenance contracts are booked because they may be fulfilled over multiple years. Because we operate globally, our backlog is also affected by changes in foreign currencies each period. Bookings represent changes to the backlog.
Backlog can vary significantly from period to period, particularly when large new-build conversion projects or operations and maintenance contracts are booked because they may be fulfilled over multiple years. Because we operate globally, our backlog is also affected by changes in foreign currencies each period.
Our discussion of the financial results include non-GAAP measures (e.g., foreign currency impact, EBITDA, Adjusted EBITDA) to provide additional information concerning our financial results that we believe is useful to the readers of our financial statements in the assessment of our performance and operating trends.
Our consolidated financial statements are prepared in conformity with GAAP. Our discussion of financial results include non-GAAP measures (e.g., foreign currency impact, EBITDA, Adjusted EBITDA) to provide additional information concerning our financial results that we believe is useful to the readers of our financial statements in the assessment of our performance and operating trends.
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.
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. Disclosures are provided when there is a reasonable possibility that the ultimate loss will exceed the recorded provision or if such probable loss is not reasonably estimable.
Cash used in operations was $42.3 million in the year ended December 31, 2023, which is primarily attributable to the current year net loss, including discontinued operations, of $197.0 million, partially offset by $137.7 million in non-cash expense arising from goodwill impairment, adjustments to prior service pensions, depreciation and amortization and stock-based compensation expenses.
Cash flows used in operating activities was $42.3 million in the year ended December 31, 2023, which is primarily attributable to the current year net loss, including discontinued operations, of $197.0 million, partially offset by $137.7 million in non-cash expense arising from goodwill impairment, adjustments to prior service pensions, depreciation and amortization, amortization of deferred financing costs and debt discount, operating lease expenses and stock-based compensation expenses.
Management believes these metrics provide investors, lenders and other users of our financial statements with a leading indicator of future revenues. It is possible that our methodology for determining bookings and backlog may not be comparable to methods used by other companies.
Bookings and Backlog Bookings and backlog are our measures of remaining performance obligations under our sales contracts. Management believes these metrics provide investors, lenders and other users of our financial statements with a leading indicator of future revenues. It is possible that our methodology for determining bookings and backlog may not be comparable to methods used by other companies.
We 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.
We continue to explore other cost saving initiatives to improve cash generation and evaluate additional non-core business and asset sales to continue to strengthen our liquidity. These have been and may continue to be important factors that could cause our actual results to differ materially from those indicated in these statements.
Adjusted EBITDA in the B&W Thermal segment increased $10.4 million to $66.7 million in 2023 compared to $56.3 million in 2022. The increase is the result of the large new construction project and increased volume in our parts business described above.
Adjusted EBITDA in the B&W Thermal segment increased $8.1 million to $64.8 million in 2023 compared to $56.7 million in 2022. The increase is the result of the large new construction project and increased volume in our parts business described above.
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.
These amounts are included in Other accrued liabilities in the 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 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.
In addition, when we determine that an incomplete contract will not be 47 completed on time and the contract has liquidated damages provisions, we recognize the estimated liquidated damages at the most likely amount we will incur as a reduction of the estimated selling price in the period the change in estimate occurs.
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.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES The Consolidated Financial Statements included in Part II, Item 8 of this Annual Report are prepared in accordance with GAAP. 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.
RESULTS OF OPERATIONS–YEARS ENDED DECEMBER 31, 2023 AND 2022 34 Components of Our Results of Operations Revenue Our revenue is the total amount of income generated by our business and consists primarily of income from our renewable, environmental and thermal technology solutions and services we provide to a broad range of industrial, electric utility and other customers.
We recorded a gain of $14.1 million on this divestiture. 36 RESULTS OF OPERATIONS–YEARS ENDED DECEMBER 31, 2024 AND 2023 Components of Our Results of Operations Revenue Our revenue is the total amount of income generated by our business and consists primarily of income from our renewable, environmental and thermal technology solutions and services we provide to a broad range of industrial, electric utility and other customers.
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 Consolidated Statements of Operations and an accrual for the estimated loss on the uncompleted contract is included in Other accrued liabilities in the Consolidated Balance Sheets.
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 in Costs of operations in the Consolidated Statements of Operations and an accrual for the estimated loss on the uncompleted contract is recorded in Other accrued liabilities in the Consolidated Balance Sheets.
We have 45 included all of the revenues and expenses for the B&W Solar business as discontinued operations in the Consolidated Statements of Operations and all assets and liabilities as held for sale in the Consolidated Balance Sheets.
We have included all of the revenues and expenses for B&W Solar, BWRS, SPIG, GMAB and Vølund businesses as discontinued operations in the Consolidated Statements of Operations and all assets and liabilities as held for sale in the Consolidated Balance Sheets.
For additional comparison of the years ended December 31, 2022 and 2021, see Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as filed on March 16, 2023. Our consolidated financial statements are prepared in conformity with GAAP.
For additional comparison of the years ended December 31, 2023 and 2022, see Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as filed on March 15, 2024 and amended on March 26, 2024.
Management believes that this financial measure is useful to investors because it excludes certain expenses, allowing investors to more easily compare our operating performance period to period. A reconciliation of net (loss) income to adjusted EBITDA is included in “Non-GAAP Financial Measures” below.
Adjusted EBITDA differs from net (loss) income, the most directly comparable measure calculated in accordance with GAAP. Management believes that this financial measure is useful to investors because it excludes certain expenses, allowing investors to more easily compare our operating performance period to period. A reconciliation of net (loss) income to Adjusted EBITDA is included in "Non-GAAP Financial Measures" below.
These charges have been included in Loss from discontinued operations, net of tax in the Consolidated Statements of Operations. The impairment charges and additional contract losses during the year ended December 31, 2023 totaled $56.6 million and $44.1 million, respectively. B&W Solar had accrued loss contracts totaling $7.1 million at December 31, 2023 .
During 2023, we recognized an impairment of $56.6 million, or the entire balance of goodwill associated with B&W Solar. These charges have been included in Loss from discontinued operations, net of tax in the Consolidated Statements of Operations. The impairment charges and additional contract losses during the year ended December 31, 2023 totaled $56.6 million and $44.1 million , respectively.
We have no plans to repatriate these funds to the U.S. In addition, we had $0.6 million of restricted cash as of December 31, 2023 related to collateral for certain letters of credit.
We have no plans to repatriate these funds to the U.S. In addition, we had $89.3 million of restricted cash as of December 31, 2024 related to collateral for certain letters of credit as part of funding for several ongoing projects.
We are currently involved in some significant litigation. See Note 21 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for a discussion of this litigation.
We currently are involved in significant litigation, as discussed in Note 20 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
This is primarily attributable to the increased volume in our European Renewable parts and services business, partially offset by a $6.2 million gain on sale related to the development rights of a future renewable energy project that was sold in the prior year.
This is primarily attributable to a $6.2 million gain on sale related to the development rights of a future renewable energy project that was sold in 2022, partially offset by the increased revenue in 2023.
At a segment level, the adjusted EBITDA presented in this report is consistent with the way the our chief operating decision maker reviews the results of operations and makes strategic decisions about the business and is calculated as earnings before interest, tax, depreciation and amortization adjusted for items such as gains or losses arising from the sale of non-income producing assets, net pension benefits, restructuring activities, impairments, gains and losses on debt extinguishment, legal and settlement costs, costs related to financial consulting, research and development costs, costs and operating income from contracts in disposal, and other costs that may not be directly controllable by segment management and are not allocated to the segment.
Adjusted EBITDA is calculated as earnings before interest, tax, depreciation and amortization adjusted for items such as gains or losses arising from the sale of non-income producing assets, net pension benefits, restructuring activities, impairments, gains and losses on debt extinguishment, legal and settlement costs, costs related to financial consulting, research and development costs, and other costs that may not be directly controllable by segment management and are not allocated to the segment.
Goodwill Goodwill is generally recorded as a result of a business combination and represents the excess of the consideration transferred over the fair value of the assets acquired and liabilities assumed. We perform testing of goodwill for impairment annually on October 1 or when impairment indicators are present.
Goodwill Goodwill is generally recorded as a result of a business combination and represents the excess of purchase price over the fair value of the tangible and identifiable net assets acquired. We perform impairment testing of goodwill annually on October 1 or if we determine that impairment indicators are present.
These and other factors may have a material impact on our international and domestic operations or our business as a whole. 33 Through our restructuring efforts, we continue to make significant progress to make our cost structure more variable and to reduce costs.
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 significant progress to make our cost structure more variable and to reduce costs.
Letter of credit fees are routinely incurred in the course of executing customer contracts. A portion of the fees are included in the contract prices with our customers. These amounts represent performance guarantees akin to insurance that are not passed along to our customers and are excluded from adjusted EBITDA as they do not reflect the performance of the business.
Certain letter of credit amounts represent performance guarantees akin to insurance that are not passed along to our customers and are excluded from Adjusted EBITDA as they do not reflect the performance of the business. Letter of credit fees are not passed along to customers and included in Cost of operations.
BUSINESS OVERVIEW We are a growing, globally-focused renewable, environmental and thermal technologies provider with over 155 years of experience providing diversified energy and emissions control solutions to a broad range of industrial, electrical utility, municipal and other customers. Our innovative products and services are organized into three market-facing segments.
Unless otherwise noted, discussion of our business and results of operations refers to our continuing operations. BUSINESS OVERVIEW We are a globally focused renewable, environmental and thermal technologies provider with over 155 years of experience providing diversified energy and emissions control solutions to a broad range of industrial, electrical utility, municipal and other customers.
Variable consideration in these contracts includes estimates of contract modifications, contractual bonuses and penalties, and liquidated damages. We review contract revenue 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.
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.
Net loss from continuing operations increased by $58.6 million to $78.6 million in 2023 from $20.0 million in 2022, primarily attributable to a $75.0 million swing in benefit plans cost from a $37.5 million benefit in 2022 to a $37.5 million expense in 2023, offset slightly by the increased operating income described above . 35 Bookings and Backlog Bookings and backlog are our measures of remaining performance obligations under our sales contracts.
Net loss from continuing operations increased by $61.6 million to $75.8 million in 2023 from $14.2 million in 2022, primarily attributable to a $75.0 million swing in benefit plans cost from a $37.5 million benefit in 2022 to a $37.5 million expense in 2023, offset slightly by the increased operating income described above.
These costs include, among others, certain executive, compliance, strategic, reporting and legal expenses associated with governance of the total organization and being an SEC registrant. Corporate expenses not allocated to the reportable segments totaled $21.4 million and $16.5 million in the years ended December 31, 2023 and 2022, respectively.
Corporate Corporate costs in Adjusted EBITDA include SG&A expenses that are not allocated to the reportable segments. These costs include, among others, certain executive, compliance, strategic, reporting and legal expenses associated with governance of the total organization and being an SEC registrant, and research and development activity costs.
Our pension costs include MTM adjustments and are primarily a result of changes in the discount rate, curtailments and settlements.
Service cost is low because our plan benefits are frozen except for a small number of hourly participants. Our pension costs include MTM adjustments and are primarily a result of changes in the discount rate, curtailments and settlements.
Net (loss) income Net (loss) income consists primarily of operating income minus other income and expenses, including interest expense, foreign exchange, expense related to our benefit plans, and provision for income taxes.
Net loss Net loss consists primarily of operating income minus other income and expenses, including interest expense, foreign exchange, expense related to our benefit plans, and provision for income taxes. Consolidated Results of Operations The following discussion of our consolidated and business segment results of operations includes a discussion of Adjusted EBITDA , which is a non-GAAP financial measure.
The duration and scope of these conditions cannot be predicted, and therefore, any anticipated negative financial impact on our operating results cannot be reasonably estimated. Discontinued Operations During the third quarter of 2023, we committed to a plan to sell our B&W Solar business resulting in a significant change that would impact our operations.
B&W Solar During the third quarter of 2023, we committed to a plan to sell our B&W Solar business resulting in a significant change that would impact our operations.
Expenses related to restricted stock units are recorded at the Corporate level and are recognized on a straight-line basis over a 3-year vesting period, except for market-based restricted stock units which are recognized over a derived service period. Stock compensation was $7.1 million and $8.7 million for the years ended December 31, 2023 and 2022, respectively.
Expenses related to restricted stock units are recognized on a straight-line basis over a 3-year vesting period, except for market-based restricted stock units which are recognized over a derived service period.
The change in our income tax expense in 2023 compared to 2022 is primarily attributable to a prior year increase in the valuation allowance of $5.6 million related to net operating losses and temporary deductible benefits in certain states. Liquidity and Capital Resources Liquidity Our primary liquidity requirements include debt service, funding dividends on preferred stock and working capital needs.
The change in our income tax expense in 2024 compared to 2023 is primarily attributable to an increase in valuation allowances, a change in the Company's permanent investment assertion and an unfavorable resolution of a foreign income tax matter. Liquidity and Capital Resources Liquidity Our primary liquidity requirements include debt service, funding dividends on preferred stock and working capital needs.
The restructuring charges primarily consist of severance and related costs associated with non-recurring actions taken to transform our operations with impacts on employees and facilities used in our businesses. Business services transition costs relate to new technology implementation, expected to provide future benefit and are included in Selling, general and administrative expenses in the Consolidated Statement of Operations.
Restructuring activities and business services transition costs Restructuring activities and business services transition actions across our business units and corporate functions primarily consist of severance and related costs associated with non-recurring actions taken to transform our operations with impacts on employees and facilities used in our businesses.
Income Taxes Year ended December 31, (In thousands, except for percentages) 2023 2022 Loss from continuing operations before income tax expense (70,152) (8,929) Income tax expense 8,481 11,059 Effective tax rate (12.1) % (123.9) % Our effective tax rate reflects a valuation allowance against deferred tax assets in jurisdictions other than Mexico, Canada, Brazil, Finland, Germany, Thailand, the Philippines, Indonesia, the United Kingdom, Sweden and certain United States state jurisdictions.
The increase in interest expense in 2023, when compared to 2022 is driven by higher utilization of the revolver as well as increased other interest expense. 44 Income Taxes Year ended December 31, (in thousands, except for percentages) 2024 2023 2022 Loss from continuing operations before income tax expense $ (60,790) $ (65,976) $ (5,115) Income tax expense $ 12,172 $ 9,818 $ 9,071 Effective tax rate (20) % (15) % (177) % Our effective tax rate reflects a valuation allowance against deferred tax assets in jurisdictions other than Mexico, Canada, Brazil, Finland, Germany, Thailand, the Philippines, Indonesia, the United Kingdom, and Sweden.
Cash flows used in investing activities totaled $68.8 million in the year ended December 31, 2022, primarily due to business acquisitions of $64.9 million and $13.2 million of capital expenditures, partially offset by proceeds from the sale of business and assets of $5.5 million and net sales and maturities of available-for-sale securities of $3.4 million.
Cash flows provided by investing activities totaled $110.0 million in the year ended December 31, 2024, primarily due to proceeds from the sale of businesses and assets of $120.9 million, partially offset by $11.2 million of capital expenditures.
Of the backlog as of December 31, 2023, we expect to recognize revenues as follows: (In millions) 2024 2025 Thereafter Total B&W Renewable $ 114.6 $ 18.5 $ 0.4 $ 133.5 B&W Environmental 130.8 34.3 14.3 179.4 B&W Thermal 182.4 24.9 3.2 210.5 Other/eliminations 7.1 — — 7.1 Expected revenue from backlog $ 434.9 $ 77.7 $ 17.9 $ 530.5 Non-GAAP Financial Measures We use non-GAAP financial measures internally to evaluate our performance and in making financial and operational decisions.
Total bookings as of December 31, 2024 and 2023 was as follows: Year ended December 31, (in millions) 2024 2023 B&W Renewable $ 108.1 $ 130.1 B&W Environmental 65.2 108.3 B&W Thermal 716.6 409.9 Other/eliminations (0.3) (9.6) Total bookings $ 889.6 $ 638.7 Our backlog as of December 31, 2024 and 2023 was as follows: December 31, (in millions) 2024 2023 B&W Renewable $ 53.6 $ 62.7 B&W Environmental 42.1 87.8 B&W Thermal 437.2 210.6 Other/eliminations 7.2 7.1 Backlog $ 540.1 $ 368.2 38 Of the backlog as of December 31, 2024, we expect to recognize revenues as follows: (In millions) 2025 2026 Thereafter Total B&W Renewable $ 32.6 $ 19.8 $ 1.2 $ 53.6 B&W Environmental 25.6 15.6 0.9 42.1 B&W Thermal 287.8 140.7 8.7 437.2 Other/eliminations 7.2 — — 7.2 Expected revenue from backlog $ 353.2 $ 176.1 $ 10.8 $ 540.1 Non-GAAP Financial Measures We use non-GAAP financial measures internally to evaluate our performance and make financial and operational decisions.
The estimated fair value of the reporting unit is derived based on valuation techniques we believe market participants would use for each of the reporting units. Warranty expenses We record estimated expense in Cost of operations in the Consolidated Statements of Operations to satisfy contractual warranty requirements when we recognize the associated revenues on the related contracts.
The estimated fair value of the reporting unit is derived based on valuation techniques we believe market participants would use for each of the reporting units.
B&W Thermal Segment Results Year ended December 31, (In thousands) 2023 2022 $ Change Revenues $ 499,216 $ 415,104 $ 84,112 Adjusted EBITDA $ 66,653 $ 56,291 $ 10,362 2023 vs 2022 results Revenues in the B&W Thermal segment increased $84.1 million , to $499.2 million in the year ended December 31, 2023 compared to $415.1 million generated in 2022 .
The decrease is primarily due to lower revenue in the U.S. construction business, partially offset by a large natural gas project. 43 Year ended December 31, (in thousands) 2023 2022 $ Change Revenues $ 499,216 $ 415,104 $ 84,112 Adjusted EBITDA $ 64,775 $ 56,708 $ 8,067 2023 vs 2022 results Revenues in the B&W Thermal segment increased $84.1 million, to $499.2 million in the year ended December 31, 2023 compared to $415.1 million generated in 2022.
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.
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.
Foreign exchange We translate assets and liabilities of our foreign operations into U.S. dollars at current exchange rates, and we translate items in the Consolidated Statements 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 loss.
Management excludes these expenses from Adjusted EBITDA as they often may not correlate to revenue or other operations occurring in the current period. Foreign exchange We translate assets and liabilities of our foreign operations into U.S. dollars at current exchange rates, and we translate items in our Consolidated Statement of Operations at average exchange rates for the periods presented.
As disclosed, we have accrued estimates of the probable losses associated with these matters; however, these matters are typically resolved over long periods of time and are often difficult to estimate due to the possibility of multiple actions by third parties. Therefore, it is possible that future earnings could be affected by changes in our estimates related to these matters.
As disclosed, we have accrued estimates of the probable losses associated with these matters; however, these matters are typically resolved over long periods of time and are often difficult to estimate due to the factors included in Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
Research and development expenses totaled $4.0 million and $3.3 million in the years ended December 31, 2023 and 2022, respectively. Benefit plans, net 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 cost.
Impairment of goodwill and long-lived assets Impairment of long-lived assets relate to certain assets under construction due to changes in project status. 40 Benefit plans, net 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 cost.
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 and warranty expenses.
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.
Loss (gain) on asset sales, net We, at times, will sell or dispose of certain assets that are unrelated to our current or future operations. Therefore, we believe it is useful to exclude these gains and losses from our non-GAAP financial measures in order to highlight the performance of the continuing business.
Refer to Note 14 to the Consolidated Financial Statements for further information regarding our pension and other postretirement plans. (Gain) loss on asset sales, net We, at times, will sell or dispose of certain assets that are unrelated to our current or future operations.
Adjusted EBITDA in the B&W Environmental segment wa s $15.3 million i n December 31, 2023 compared to $9.8 million in 2022. The change is primarily driven by higher volume, as described above.
The increase primarily relates to the increase in revenue in our ash handling business. Adjusted EBITDA in the B&W Environmental segment was $4.1 million at December 31, 2023 compared to $1.6 million at 2022. The increase is primarily driven by the increased revenue described above.
We have also included a comparison of the Results of Operations for the years ended December 31, 2022 and 2021 in the B&W Renewable Segment discussion below as this is the only segment impacted by the discontinued operations.
We have also included a comparison of the Results of Operations for the years ended December 31, 2023 and 2022 for all of our segment discussions below. Unless otherwise noted, discussion of our business and results of operations in this Annual Report on Form 10-K refers to our continuing operations.
Adjusted EBITDA in the B&W Renewable segment increased $1.4 million, to $22.6 million in 2023 compared to $21.2 million in 2022.
This is primarily attributable to increased revenue of $22.9 million related to a European Renewable project that began in 2023. 42 Adjusted EBITDA in the B&W Renewable segment decreased $5.4 million, to $6.4 million in 2023 compared to $11.8 million in 2022.
Our obligations under each of the Debt Facilities were guaranteed by certain of our existing and future domestic and foreign subsidiaries. B. Riley, a related party, has provided a guaranty of payment with regard to our obligations under the Reimbursement Agreement.
Debt and Credit Facilities As described in Note 15 to our Consolidated Financial Statements included herein, we entered into a Credit Agreement in January 2024. B. Riley, a related party, has provided a guaranty of payment with regard to our obligations under the Credit Agreement.
Revolving Credit Facility 1,494 — 27,095 24,962 Components associated with amortization or accretion of: Revolving Credit Agreement 4,643 4,400 Senior notes 2,525 2,612 7,168 7,012 Components associated with interest from: Lease liabilities 2,235 2,372 Letter of Credit fees and interest 10,955 8,424 Other interest expense 2,442 2,091 15,632 12,887 Total interest expense $ 49,895 $ 44,861 The increase in interest expense in 2023, when compared to 2022 is driven by higher utilization of the revolver as well as increased incremental fees on letters of credit.
Other Expenses Impacting Operating Results Interest Expense Interest expense in our Consolidated Financial Statements consisted of the following components: Year ended December 31, (in thousands) 2024 2023 2022 Components associated with borrowings from: Senior notes $ 25,512 $ 25,601 $ 24,962 Credit Facility 4,892 1,494 — 30,404 27,095 24,962 Components associated with amortization or accretion of: Revolving Credit Agreement 6,149 4,643 4,400 Senior notes 2,606 2,525 2,612 8,755 7,168 7,012 Components associated with interest from: Lease liabilities 2,037 2,813 2,372 Letter of Credit fees and interest 3,942 3,519 3,910 Other interest expense 1,008 1,976 1,541 6,987 8,308 7,823 Total interest expense $ 46,146 $ 42,571 $ 39,797 The increase in interest expense is driven by increased borrowings in 2024 when compared to 2023.
Cash flows used in financing activities of $11.2 million during the year ended December 31, 2022, primarily related to repayments of debt of $16.9 million and payments of preferred stock dividends of $14.9 million, partially offset by combined borrowings on loans payable, issuance of senior notes and proceeds from sale-leaseback transactions of $27.4 million.
Cash flows provided by financing activities was $69.7 million during the year ended December 31, 2024, primarily related to net borrowings of $93.7 million, partially offset by payments of preferred stock dividends of $18.6 million and debt issuance costs of $8.5 million.
Our foreign business locations held $44.4 million of our total cash and cash equivalents, and restricted cash as of December 31, 2023.
As of December 31, 2024, our cash and cash equivalents, and restricted cash totaled $131.1 million, and we had total debt of $473.9 million as well as $191.7 million of gross preferred stock outstanding. Our foreign business locations held $20.8 million of our total cash and cash equivalents, and restricted cash as of December 31, 2024.
Debt and Credit Facilities As described in Note 15 to our Consolidated Financial Statements included herein, at December 31, 2023, our debt facilities include the Reimbursement Agreement, Revolving Credit Agreement and Letter of Credit Agreement (collectively, the “Debt Documents” and the facilities thereunder, the “Debt Facilities”).
Information related to our Debt and Credit Facilities is described in Note 15 to the Consolidated Financial Statements and is incorporated herein by reference.
B&W Renewable Segment Results Year ended December 31, (in thousands) 2023 2022 $ Change Revenues $ 318,605 $ 288,673 $ 29,932 Adjusted EBITDA $ 22,586 $ 21,227 $ 1,359 2023 vs 2022 results Revenues in the B&W Renewable segment increased $29.9 million, to $318.6 million in 2023 compared to $288.7 million in 2022, which is primarily the result of increased revenue of $29.5 million in our European Renewable parts and services business as we continue to expand globally.
Year ended December 31, (in thousands) 2023 2022 $ Change Revenues $ 140,835 $ 122,765 $ 18,070 Adjusted EBITDA $ 6,381 $ 11,768 $ (5,387) 2023 vs 2022 results Revenues in the B&W Renewable segment increased $18.1 million, to $140.8 million in 2023 compared to $122.8 million in 2022.
Product development Our product development activities include expenses that relate to sales, marketing, and other business development expenses for our products and services still under development and not yet widely available. Product development expenses totaled $9.0 million and $4.1 million in the year ended December 31, 2023 and 2022, respectively.
Acquisition pursuit and related costs Acquisition pursuit and related costs fluctuate based on activity. 41 Product development Our product development activities include expenses that relate to sales, marketing, and other business development expenses for our products and services still under development and not yet widely available and are primarily from the timing of specific research and increased development efforts and activities related to our BrightLoop ™ commercialization efforts and to further develop our ClimateBright ™ portfolio.
Adjusted EBITDA in the B&W Renewable segment increased $1.4 million, to $21.2 million in 2022 compared to $19.8 million in 2021, which is primarily due to the higher revenue volume from the new-build projects, partially offset by higher SG&A expenses in 2022. 40 B&W Environmental Segment Results Year ended December 31, (In thousands) 2023 2022 $ Change Revenues $ 202,927 $ 154,393 $ 48,534 Adjusted EBITDA $ 15,277 $ 9,787 $ 5,490 2023 vs 2022 results Revenues in the B&W Environmental segment increased $48.5 million to $202.9 million in 2023 compared to $154.4 million in 2022 .
Year ended December 31, (in thousands) 2023 2022 $ Change Revenues $ 108,655 $ 81,822 $ 26,833 Adjusted EBITDA $ 4,133 $ 1,641 $ 2,492 2023 vs 2022 results Revenues in the B&W Environmental segment increased $26.8 million to $108.7 million in 2023 compared to $81.8 million in 2022.
In response to the conditions, we are currently evaluating different strategies to obtain the required funding for future operations.
Plan by the PBGC, which reduced cash funding requirements in 2024 by $15.0 million and will increase contributions annually over the subsequent 5-year period (described in Note 14 to the Consolidated Financial Statements). In response to the conditions, we are currently evaluating different strategies to obtain the required funding for future debt maturities and operations.
Operating income increased $17.6 million from $2.3 million in 2022 to $19.9 million in 2023, primarily due to increased gross margin of $37.2 million from the higher revenues and a reduction of $7.6 million in advisory fees and settlement costs in 2023, partially offset by higher SG&A expenses of $10.0 million and $4.6 million in product development costs associated with BrightLoop TM .
Operating income increased $17.8 million from $(1.2) million in 2022 to $16.6 million in 2023, primarily due to increased gross margin from higher revenues.
Loss (gain) on asset sales, net totaled $0.1 million and $(2.5) million in the years ended December 31, 2023 and 2022, respectively. 38 Stock compensation The grant date fair value of stock compensation varies based on the derived stock price at the time of grant, valuation methodologies, subjective assumptions, and reward types.
Therefore, we believe it is useful to exclude these gains and losses from our non-GAAP financial measures in order to highlight the performance of the continuing business. Stock compensation The grant date fair value of stock compensation varies based on the derived stock price at the time of grant, valuation methodologies, subjective assumptions, and reward types.
Year ended December 31, (in thousands) 2023 2022 Adjusted EBITDA (1) B&W Renewable segment (2) $ 22,586 $ 21,227 B&W Environmental segment 15,277 9,787 B&W Thermal segment 66,653 56,291 Corporate (21,374) (16,477) Research and development (4,011) (3,319) $ 79,131 $ 67,509 (1) See above for reconciliation of Net loss to Adjusted EBITDA.
Year ended December 31, (in thousands) 2024 2023 2022 Adjusted EBITDA (1) B&W Renewable segment $ 15,085 $ 6,381 $ 11,768 B&W Environmental segment 10,794 4,133 1,641 B&W Thermal segment 61,370 64,775 56,708 Corporate (18,354) (14,484) (14,550) Total Adjusted EBITDA $ 68,895 $ 60,805 $ 55,567 (1) See table above for reconciliation of Net loss to Adjusted EBITDA.
Removed
Our reportable segments are as follows: • Babcock & Wilcox Renewabl e: Our innovative hydrogen generation technology (BrightLoop TM ) supports global climate goals including the decarbonization of industrial and utility steam and power producers.
Added
Our innovative products and services are organized into three market-facing reporting segments. For a description of our reportable segments see Item 1, Business of this Form 10-K.
Removed
BrightLoo p TM offers significant advantages over other hydrogen generation technologies as it generates competitively priced hydrogen from a wide range of fuels (including solid fuels such as biomass and coal) with a high rate of carbon captured resulting in low (or even negative) carbon intensity hydrogen.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe have operations in many foreign locations, and our financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in those foreign markets since the functional currency of our foreign entities is not the U.S. dollar.
Biggest changeOur investments are classified as available-for-sale. 49 We have operations in many foreign locations, and our financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in those foreign markets since the functional currency of our foreign entities is not the U.S. dollar.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 46 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.
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.
If the balances of these intercompany loans as of December 31, 2023 were to remain constant, a 100 basis point change in foreign currency exchange rates would impact our earnings by an estimated $0.2 million per year.
If the balances of these intercompany loans as of December 31, 2024 were to remain constant, a 100-basis point change in foreign currency exchange rates would impact our earnings by an estimated $0.2 million per year.
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.
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.

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