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Babcock & Wilcox News
Leading the world in clean power production technology
Babcock & Wilcox Announces Fourth Quarter 2016 Results
- Power segment in line with expectations; improves gross profit margin
- Industrial segment achieves strong revenue growth from acquisition
- Renewable segment enhancing execution model; takes charge on ongoing projects
(CHARLOTTE, N.C. – February 28, 2017) – Babcock & Wilcox Enterprises, Inc. (B&W) (NYSE:BW) announced today fourth quarter 2016 revenues of $380.0 million, a decrease of $122.7 million, or 24.4%, compared to the fourth quarter of 2015. GAAP earnings per share for the fourth quarter of 2016 were a loss of $1.47 compared to a loss per share of $0.10 for the fourth quarter of 2015. Adjusted earnings per share, which exclude the gain on sale of an equity method investment, non-cash mark-to-market adjustments for pension and other post-retirement benefits, acquisition and integration costs, litigation charges, restructuring activities, and spin-off transaction costs, were a loss of $1.60 for the three months ended December 31, 2016 compared to adjusted earnings per share of $0.47 in the prior year period.
“During our 18 months as an independent company, we have made significant progress realigning the business and executing on our strategic goals. In 2016, we focused on enhancing the profitability of our Power business and increasing revenue diversification by driving the growth of our Industrial and Renewable businesses. Through the restructuring of our Power business, we have created a leaner, more flexible organization that is better positioned to compete in the market. In our Industrial segment, we have made key acquisitions to build the business and grow our B&W-wide non-coal revenue to greater than 50% of our total revenues in 2016," said Mr. E. James Ferland, Chairman and Chief Executive Officer. "Productivity and schedule issues in our Renewable segment, however, significantly impacted our results in the fourth quarter and for the full year. We have taken specific actions to address these issues, and to enhance the resources and infrastructure of the Renewable segment, better enabling it to profitably capture long-term market opportunities. We are confident in our strategy and believe that the Company is well positioned to create long-term value for shareholders.”
Results of Operations
Consolidated revenues for
the fourth quarter of 2016 were $380.0 million, a decrease of $122.7 million,
compared to $502.7 million for the fourth quarter of 2015, due primarily to
decreased volume in the Power segment, in line with revised expectations, and
setbacks in Renewable projects, partially offset by an increase in revenues in
the Industrial segment. The GAAP operating loss for the fourth quarter of 2016
was $58.6 million as compared to an operating loss of $10.0 million in the
fourth quarter of 2015. The adjusted operating loss in the fourth quarter of
2016 was $65.0 million, a decrease of $104.5 million compared to adjusted
operating income of $39.5 million in the fourth quarter of 2015, due mainly to
charges on contracts within our Renewable segment.
Power Segment Results
Fourth quarter 2016
revenues for the Power segment decreased 33.3% to $218.1 million compared to
$327.1 million in revenues in the prior year period. Revenues decreased as a
result of lower activity in retrofits, new build utility and environmental work
and industrial steam generation, which was in line with revised expectations
and the proactive restructuring plan. Gross profit in the Power segment in the
fourth quarter 2016 was $62.6 million, compared to $71.4 million in the prior year
period. As a result of the restructuring
as well as good contract performance, gross profit margin improved year over
year.
Industrial Segment Results
The Industrial segment
contributed $106.3 million in revenues for the fourth quarter of 2016 compared
to $60.3 million in the fourth quarter of 2015, an increase of $46.0 million
due to the addition of B&W SPIG, our global cooling system and services
business, which the Company acquired on July 1, 2016. Gross profit in the
Industrial segment was $17.2 million in the fourth quarter of 2016, an
approximate $0.1 million decrease compared to $17.3 million in the prior year
period. Year over year, gross profit benefited from the contributions from
B&W SPIG, offset by the lower levels of activity for B&W MEGTEC and
overall revenue mix.
Renewable Segment Results
Revenues in the Renewable
segment were $55.6 million for the fourth quarter of 2016, versus $115.2 million
in the corresponding period in 2015, a decrease of $59.7 million driven by the
increased costs to complete and lengthened schedule on several contracts. The
Renewable segment has grown significantly over the past two years and resources
used to address previously disclosed issues at one project led to productivity
and scheduling issues at others. The Company appointed a new management team
and is taking actions to address these issues, including investing in enhanced
engineering and project management capabilities and infrastructure. The
Renewable segment gross loss of $82.6 million in the fourth quarter of 2016 was
$103.7 million lower than the $21.1 million gross profit reported in the prior
year fourth quarter due to losses on the Renewable contracts.
Liquidity
The Company’s cash and cash
equivalents balance, net of restricted cash, increased during the fourth
quarter to $95.9 million at the end of 2016, which was mainly driven by strong
cash flows from operations in the quarter. The outstanding balances under
revolving credit facilities totaled $24.0 million as of December 31, 2016.
Because of the challenges in the Renewable segment, the Company expects to use
a significant amount of cash during 2017. The Company recently amended its
credit facility to allow for continued access and capacity to meet liquidity
and letter of credit needs.
Full Year 2017 Outlook
Revenue is expected to increase from $1.6
billion in 2016 to $1.8 billion in 2017.
Full year adjusted EPS is expected to be in the
range of $0.75 to $0.95. Adjusted EPS excludes intangible asset amortization
expense, restructuring expenses, acquisition and integration costs, non-cash
mark-to-market adjustments for pension and other post-retirement benefits and
spin-off transaction costs. The reduction in the previously discussed EPS
guidance range includes approximately $0.60 of impacts from Renewable projects
and related interest expense from credit facility usage.
The adjusted tax rate for 2017 is expected to be
in the range of 32% to 34%.
As more fully described in Exhibit 1, management
is unable to reconcile without unreasonable effort the Company's forecasted
range of adjusted EPS for the full year to a comparable GAAP range.
Conference
Call to Discuss Fourth Quarter 2016 Results
Date: Wednesday, March 1, 2017,
at 8:30 a.m. EST
Live Webcast: Investor Relations section of website at
www.babcock.com
Forward-Looking Statements
B&W cautions that this release contains forward-looking statements, including, without limitation, statements relating to our strategic objectives; management’s expectations regarding the industries in which we operate; our guidance and forecasts for 2017; our projected tax rate; our projected operating margin improvements, savings and restructuring costs; project execution; and growth through acquisitions. These forward-looking statements are based on management’s current expectations and involve a number of risks and uncertainties, including, among other things, our ability to realize anticipated savings and operational benefits from our restructuring plan; our ability to successfully integrate SPIG and Universal and realize the expected synergies from the acquisitions; our ability to realize the benefits of expected cross-selling opportunities from the SPIG and Universal acquisitions; our ability to successfully address productivity and schedule issues in our Renewable segment, including our efforts to enhance its resources and infrastructure; changes in the jurisdictional mix of our income and losses; disruptions experienced with customers and suppliers; the inability to retain key personnel; adverse changes in the industries in which we operate; delays, changes or termination of contracts in backlog; the timing and amount of repurchases of our common stock, if any; and the inability to grow and diversify through acquisitions. If one or more of these risks or other risks materialize, actual results may vary materially from those expressed. For a more complete discussion of these and other risk factors, see B&W’s filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. B&W cautions not to place undue reliance on these forward-looking statements, which speak only as of the date of this release, and undertakes no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.
About B&W
Headquartered in Charlotte, N.C., Babcock & Wilcox is a global
leader in energy and environmental technologies and services for the power and
industrial markets. B&W companies employ approximately 5,000 people around
the world. Follow us on Twitter @BabcockWilcox and learn more at www.babcock.com.
# # #
Investor Contact: Media Contact:
Jude Broussard Ryan Cornell
Vice President, Investor Relations Public Relations
Babcock & Wilcox Babcock & Wilcox
704.625.4944 » investors@babcock.com 330.860.1345 » rscornell@babcock.com
Exhibit 1
Babcock & Wilcox Enterprises, Inc.
Reconciliation of Non-GAAP Operating Income and Earnings Per Share(1)(2)
(In millions, except per share amounts)
|
|
Three Months Ended December 31, 2016 |
|||||||||
|
|
GAAP |
Sale of equity method investment |
Pension & OPEB MTM (gain) / loss |
Acquisition and integration costs |
Litigation |
Restructuring |
Spin costs |
Non-GAAP |
Intangible amortization |
Non-GAAP excluding intangible amortization |
|
Operating income (loss) |
$(58.6) |
$(8.3) |
$(6.4) |
$2.4 |
$3.2 |
$2.4 |
$0.4 |
$(65.0) |
$8.0 |
$(57.0) |
|
Other income (expense) |
(5.0) |
— |
— |
— |
— |
— |
— |
(5.0) |
— |
$(5.0) |
|
Income tax (expense) benefit |
(7.7) |
— |
2.7 |
(0.2) |
(1.2) |
(1.0) |
— |
(7.4) |
(2.5) |
$(10.0) |
|
Net income (loss) |
$(71.3) |
$(8.3) |
$(3.8) |
$2.1 |
$2.0 |
$1.4 |
$0.4 |
$(77.4) |
$5.5 |
$(71.9) |
|
Net loss attributable to non-controlling interest |
(0.3) |
— |
— |
— |
— |
— |
— |
(0.3) |
— |
$(0.3) |
|
Net income (loss) attributable to shareholders |
$(71.6) |
$(8.3) |
$(3.8) |
$2.1 |
$2.0 |
$1.4 |
$0.4 |
$(77.7) |
$5.5 |
$(72.2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS - continuing operations |
$(1.47) |
$(0.17) |
$(0.08) |
$0.04 |
$0.04 |
$0.03 |
$0.01 |
$(1.60) |
$0.11 |
$(1.48) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax rate |
(12.2)% |
|
|
|
|
|
|
(10.6)% |
|
(16.1)% |
|
|
Three Months Ended December 31, 2015 |
|||||||
|
|
GAAP |
Pension & OPEB MTM (gain) / loss |
Impairments |
Restructuring |
Spin costs |
Non-GAAP |
Intangible amortization |
Non-GAAP excluding intangible amortization |
|
Operating income (loss) |
$(10.0) |
$40.2 |
$5.6 |
$3.0 |
$0.7 |
$39.5 |
$1.5 |
$41.0 |
|
Other income (expense) |
— |
— |
— |
— |
— |
— |
— |
— |
|
Income tax (expense) benefit |
4.7 |
(16.0) |
(2.1) |
(1.0) |
(0.3) |
(14.7) |
(0.5) |
(15.3) |
|
Net income (loss) |
$(5.2) |
$24.2 |
$3.4 |
$1.9 |
$0.4 |
$24.8 |
$1.0 |
$25.8 |
|
Net loss attributable to non-controlling interest |
— |
— |
— |
— |
— |
— |
— |
— |
|
Net income (loss) attributable to shareholders |
$(5.2) |
$24.2 |
$3.4 |
$1.9 |
$0.4 |
$24.8 |
$1.0 |
$25.8 |
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS - continuing operations |
$(0.10) |
$0.45 |
$0.06 |
$0.04 |
$0.01 |
$0.47 |
$0.02 |
$0.48 |
|
|
|
|
|
|
|
|
|
|
|
Income tax rate |
47.4% |
|
|
|
|
37.3% |
|
37.2% |
|
|
Year Ended December 31, 2016 |
|||||||||
|
|
GAAP |
Restructuring |
Pension & OPEB MTM (gain) / loss |
Sale of equity method investment |
Acquisition and integration costs |
Spin costs |
Litigation |
Non-GAAP |
Intangible amortization |
Non-GAAP excluding intangible amortization |
|
Operating income (loss) |
$(102.8) |
$37.0 |
$24.1 |
$(8.3) |
$5.1 |
$3.8 |
$3.2 |
$(37.9) |
$19.9 |
$(18.0) |
|
Other income (expense) |
(5.4) |
— |
— |
— |
— |
— |
— |
(5.4) |
— |
(5.4) |
|
Income tax (expense) benefit |
(6.9) |
(0.6) |
(8.4) |
— |
(0.8) |
0.3 |
(1.2) |
(17.7) |
(6.4) |
(24.1) |
|
Net income (loss) |
$(115.1) |
$36.4 |
$15.7 |
$(8.3) |
$4.3 |
$4.1 |
$2.0 |
$(60.9) |
$13.5 |
$(47.4) |
|
Net loss attributable to non-controlling interest |
(0.6) |
— |
— |
— |
— |
— |
— |
(0.6) |
— |
(0.6) |
|
Net income (loss) attributable to shareholders |
$(115.6) |
$36.4 |
$15.7 |
$(8.3) |
$4.3 |
$4.1 |
$2.0 |
$(61.5) |
$13.5 |
$(48.0) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS - continuing operations |
$(2.31) |
$0.73 |
$0.31 |
$(0.17) |
$0.09 |
$0.08 |
$0.04 |
$(1.23) |
$0.27 |
$(0.96) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax rate |
(6.4)% |
|
|
|
|
|
|
(40.9)% |
|
(103.3)% |
|
|
Year Ended December 31, 2015 |
|||||||||
|
|
GAAP |
Pension & OPEB MTM (gain) / loss |
Impairments |
Restructuring |
Litigation |
Spin costs |
NE Segment allocation |
Non-GAAP |
Intangible amortization |
Non-GAAP excluding intangible amortization |
|
Operating income (loss) |
$21.9 |
$40.2 |
$14.6 |
$11.7 |
$9.6 |
$3.3 |
$2.7 |
$103.8 |
$11.4 |
$115.3 |
|
Other income (expense) |
(1.7) |
— |
— |
— |
— |
— |
— |
(1.7) |
— |
(1.7) |
|
Income tax (expense) benefit |
(3.7) |
(16.0) |
(5.6) |
(4.2) |
(3.7) |
(1.2) |
(0.7) |
(35.1) |
(4.1) |
(39.2) |
|
Net income (loss) |
$16.5 |
$24.2 |
$9.0 |
$7.5 |
$5.8 |
$2.0 |
$2.0 |
$67.1 |
$7.4 |
$74.5 |
|
Net loss attributable to non-controlling interest |
(0.2) |
— |
— |
— |
— |
— |
— |
(0.2) |
— |
(0.2) |
|
Net income (loss) attributable to shareholders |
$16.3 |
$24.2 |
$9.0 |
$7.5 |
$5.8 |
$2.0 |
$2.0 |
$66.9 |
$7.4 |
$74.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS - continuing operations |
$0.30 |
$0.45 |
$0.17 |
$0.14 |
$0.11 |
$0.04 |
$0.04 |
$1.25 |
$0.14 |
$1.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax rate |
18.2% |
|
|
|
|
|
|
34.3% |
|
34.5% |
(1) Figures may not be clerically accurate due to rounding.
Management has provided full year adjusted earnings per diluted share ("adjusted EPS") guidance of $0.75 to $0.95. It is not possible for management to identify the amount or significance of future adjustments associated with potential mark to market adjustments to our pension and other postretirement benefit plan liabilities or other non-routine costs that we adjust in our presentation of adjusted EPS guidance. These items are dependent on future events and/or market inputs that are not reasonably estimable at this time. In addition, the estimated tax rate can have additional variability from estimate due to changes in jurisdiction mix and impacts from deferred tax asset valuation allowances. Accordingly, management is unable to reconcile without unreasonable effort the Company's forecasted range of adjusted EPS for the full year included in the 2017 Outlook section of this earnings release to a comparable GAAP range. However, items excluded from our adjusted EPS guidance include the historical adjustments noted in the tables above, and our adjusted EPS guidance also excludes future estimable adjusting items, including intangible amortization of $0.25 to $0.26 per share, charges relating to previously announced restructuring initiatives of $0.18 to $0.25 per share, additional spin costs of approximately $0.02 per share, additional acquisition and integration costs of approximately $0.04 to $0.05 per share, and benefits from asset sales of approximately $0.01.
Exhibit 2
Babcock & Wilcox Enterprises, Inc.
Condensed Consolidated and Combined Statements of Operations(1)
(In millions, except per share amounts)
|
|
Three Months Ended December, 2016 |
|
Twelve Months Ended December, 2016 |
||||||||||||
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
||||||||
|
Revenues |
$ |
380.0 |
|
|
$ |
502.7 |
|
|
$ |
1,578.3 |
|
|
$ |
1,757.3 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
|
Cost of operations |
380.8 |
|
|
437.7 |
|
|
1,399.1 |
|
|
1,449.1 |
|
||||
|
Research and development costs |
2.1 |
|
|
4.1 |
|
|
10.4 |
|
|
16.5 |
|
||||
|
Losses on asset disposals and impairments, net |
— |
|
|
5.6 |
|
|
— |
|
|
14.6 |
|
||||
|
Selling, general and administrative expenses |
64.4 |
|
|
61.4 |
|
|
247.1 |
|
|
240.0 |
|
||||
|
Restructuring activities and spin-off transaction costs |
2.8 |
|
|
3.7 |
|
|
40.8 |
|
|
14.9 |
|
||||
|
Total costs and expenses |
450.1 |
|
|
512.5 |
|
|
1,697.5 |
|
|
1,735.2 |
|
||||
|
Equity in income (loss) of investees |
11.6 |
|
|
(0.2 |
) |
|
16.4 |
|
|
(0.2 |
) |
||||
|
Operating income (loss) |
(58.6 |
) |
|
(10.0 |
) |
|
(102.8 |
) |
|
21.9 |
|
||||
|
Other income (expense): |
|
|
|
|
|
|
|
||||||||
|
Interest income |
0.2 |
|
|
0.2 |
|
|
0.8 |
|
|
0.6 |
|
||||
|
Interest expense |
(2.6 |
) |
|
(0.4 |
) |
|
(3.8 |
) |
|
(1.1 |
) |
||||
|
Other – net |
(2.5 |
) |
|
0.2 |
|
|
(2.4 |
) |
|
(1.2 |
) |
||||
|
Total other income (expense) |
(5.0 |
) |
|
0.0 |
|
|
(5.4 |
) |
|
(1.7 |
) |
||||
|
Income (loss) before income tax expense |
(63.6 |
) |
|
(9.9 |
) |
|
(108.1 |
) |
|
20.2 |
|
||||
|
Income tax expense (benefit) |
7.7 |
|
|
(4.7 |
) |
|
6.9 |
|
|
3.7 |
|
||||
|
Income (loss) from continuing operations |
(71.3 |
) |
|
(5.2 |
) |
|
(115.1 |
) |
|
16.5 |
|
||||
|
Income from discontinued operations, net of tax |
|
|
— |
|
|
— |
|
|
2.8 |
|
|||||
|
Net income (loss) |
(71.3 |
) |
|
(5.2 |
) |
|
(115.1 |
) |
|
19.3 |
|
||||
|
Net income attributable to noncontrolling interest |
(0.3 |
) |
|
— |
|
|
(0.6 |
) |
|
(0.2 |
) |
||||
|
Net income (loss) attributable to shareholders |
$ |
(71.6 |
) |
|
$ |
(5.2 |
) |
|
$ |
(115.6 |
) |
|
$ |
19.1 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Amounts attributable to shareholders: |
|
|
|
|
|
|
|
||||||||
|
Income (loss) from continuing operations |
$ |
(71.6 |
) |
|
$ |
(5.2 |
) |
|
$ |
(115.6 |
) |
|
$ |
16.3 |
|
|
Income from discontinued operations, net of tax |
— |
|
|
— |
|
|
— |
|
|
2.8 |
|
||||
|
Net income (loss) attributable to shareholders |
$ |
(71.6 |
) |
|
$ |
(5.2 |
) |
|
$ |
(115.6 |
) |
|
$ |
19.1 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Basic earnings (loss) per share - continuing operations |
$ |
(1.47 |
) |
|
$ |
(0.10 |
) |
|
$ |
(2.31 |
) |
|
$ |
0.31 |
|
|
Basic earnings per share - discontinued operations |
— |
|
|
— |
|
|
— |
|
|
0.05 |
|
||||
|
Basic earnings (loss) per share |
$ |
(1.47 |
) |
|
$ |
(0.10 |
) |
|
$ |
(2.31 |
) |
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Diluted earnings (loss) per share - continuing operations |
$ |
(1.47 |
) |
|
$ |
(0.10 |
) |
|
$ |
(2.31 |
) |
|
$ |
0.30 |
|
|
Diluted earnings per share - discontinued operations |
— |
|
|
— |
|
|
— |
|
|
0.06 |
|
||||
|
Diluted earnings (loss) per share |
$ |
(1.47 |
) |
|
$ |
(0.10 |
) |
|
$ |
(2.31 |
) |
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Shares used in the computation of earnings per share: |
|
|
|
|
|
|
|
||||||||
|
Basic |
48.7 |
|
|
53.3 |
|
|
50.1 |
|
|
53.5 |
|
||||
|
Diluted |
48.7 |
|
|
53.3 |
|
|
50.1 |
|
|
53.7 |
|
||||
(1) Figures may not be clerically accurate due to rounding.
Exhibit 3
Babcock & Wilcox Enterprises, Inc.
Condensed Consolidated and Combined Balance Sheets(1)
(In millions, except per share amount)
|
|
December 31, 2016 |
|
December 31, 2015 |
||||
|
Cash and cash equivalents |
$ |
95.9 |
|
|
$ |
365.2 |
|
|
Restricted cash and cash equivalents |
27.8 |
|
|
37.1 |
|
||
|
Accounts receivable – trade, net |
282.3 |
|
|
291.2 |
|
||
|
Accounts receivable – other |
73.8 |
|
|
44.8 |
|
||
|
Contracts in progress |
166.0 |
|
|
128.2 |
|
||
|
Inventories |
85.8 |
|
|
90.1 |
|
||
|
Other current assets |
46.0 |
|
|
21.5 |
|
||
|
Total current assets |
777.5 |
|
|
978.2 |
|
||
|
Property, plant and equipment - gross |
332.5 |
|
|
330.0 |
|
||
|
Accumulated depreciation |
(198.9 |
) |
|
(184.3 |
) |
||
|
Net property, plant and equipment |
133.6 |
|
|
145.7 |
|
||
|
Goodwill |
267.4 |
|
|
201.1 |
|
||
|
Deferred income taxes |
163.4 |
|
|
190.7 |
|
||
|
Investments in unconsolidated affiliates |
98.7 |
|
|
92.2 |
|
||
|
Intangible assets |
71.0 |
|
|
37.8 |
|
||
|
Other assets |
17.5 |
|
|
17.4 |
|
||
|
Total assets |
$ |
1,529.1 |
|
|
$ |
1,663.0 |
|
|
|
|||||||
|
Revolving debt |
$ |
14.2 |
|
|
$ |
2.0 |
|
|
Accounts payable |
220.7 |
|
|
175.2 |
|
||
|
Accrued employee benefits |
35.5 |
|
|
51.5 |
|
||
|
Advance billings on contracts |
210.6 |
|
|
229.4 |
|
||
|
Accrued warranty expense |
40.5 |
|
|
39.8 |
|
||
|
Other accrued liabilities |
96.0 |
|
|
63.5 |
|
||
|
Total current liabilities |
617.5 |
|
|
561.4 |
|
||
|
Accumulated postretirement benefit obligations |
12.8 |
|
|
27.8 |
|
||
|
Pension liabilities |
288.4 |
|
|
282.1 |
|
||
|
Other noncurrent liabilities |
49.4 |
|
|
43.4 |
|
||
|
Total liabilities |
968.2 |
|
|
914.6 |
|
||
|
Commitments and contingencies |
|
|
|
||||
|
Stockholders' equity: |
|
|
|
||||
|
Common stock, par value $0.01 per share, authorized 200.0 shares; issued 48.7 and 52.5 shares at December 31, 2016 and 2015, respectively |
0.5 |
|
|
0.5 |
|
||
|
Capital in excess of par value |
806.6 |
|
|
790.5 |
|
||
|
Treasury stock at cost, 5.6 and 1.4 shares at December 31, 2016 and 2015, respectively |
(103.8 |
) |
|
(25.4 |
) |
||
|
Retained earnings (deficit) |
(114.7 |
) |
|
1.0 |
|
||
|
Accumulated other comprehensive loss |
(36.5 |
) |
|
(18.9 |
) |
||
|
Stockholders' equity attributable to shareholders |
552.1 |
|
|
747.7 |
|
||
|
Noncontrolling interest |
8.8 |
|
|
0.7 |
|
||
|
Total stockholders' equity |
561.0 |
|
|
748.4 |
|
||
|
Total liabilities and stockholders' equity |
$ |
1,529.1 |
|
|
$ |
1,663.0 |
|
(1) Figures may not be clerically accurate due to rounding.
Exhibit 4
Babcock & Wilcox Enterprises, Inc.
Condensed Consolidated and Combined Statements of Cash Flows(1)
(In millions)
|
|
Year Ended December 31, |
||||||||||
|
|
2016 |
|
2015 |
|
2014 |
||||||
|
Cash flows from operating activities: |
|
|
|
|
|
||||||
|
Net income (loss) |
$ |
(115.1 |
) |
|
$ |
19.3 |
|
|
$ |
(26.2 |
) |
|
Non-cash items included in net income (loss): |
|
|
|
|
|
||||||
|
Depreciation and amortization |
39.6 |
|
|
34.9 |
|
|
32.4 |
|
|||
|
Debt issuance cost amortization |
1.2 |
|
|
0.6 |
|
|
— |
|
|||
|
(Income) loss of equity method investees |
(16.4 |
) |
|
0.2 |
|
|
8.7 |
|
|||
|
Losses on asset disposals and impairments |
14.9 |
|
|
16.9 |
|
|
6.0 |
|
|||
|
Write off of accrued claims receivable, net |
— |
|
|
7.8 |
|
|
— |
|
|||
|
Provision for (benefit from) deferred taxes |
(9.0 |
) |
|
(32.1 |
) |
|
(42.0 |
) |
|||
|
Recognition of losses for pension and postretirement plans |
36.3 |
|
|
40.6 |
|
|
101.8 |
|
|||
|
Stock-based compensation charges |
16.1 |
|
|
7.8 |
|
|
— |
|
|||
|
Changes in assets and liabilities: |
|
|
|
|
|
||||||
|
Accounts receivable |
58.9 |
|
|
(34.0 |
) |
|
(13.8 |
) |
|||
|
Accrued insurance receivable |
(15.0 |
) |
|
— |
|
|
— |
|
|||
|
Accounts payable |
4.5 |
|
|
17.9 |
|
|
(8.9 |
) |
|||
|
Contracts in progress and advance billings on contracts |
(13.3 |
) |
|
63.0 |
|
|
(99.2 |
) |
|||
|
Inventories |
2.9 |
|
|
6.1 |
|
|
4.3 |
|
|||
|
Income taxes |
22.6 |
|
|
9.3 |
|
|
10.1 |
|
|||
|
Accrued and other current liabilities |
25.1 |
|
|
11.5 |
|
|
9.7 |
|
|||
|
Pension liabilities, accrued postretirement and employee benefits |
(47.0 |
) |
|
(2.3 |
) |
|
(17.3 |
) |
|||
|
Other, net |
(4.2 |
) |
|
3.0 |
|
|
10.0 |
|
|||
|
Net cash from operating activities |
2.3 |
|
|
170.4 |
|
|
(24.2 |
) |
|||
|
Cash flows from investing activities: |
|
|
|
|
|
||||||
|
Decrease in restricted cash and cash equivalents |
9.4 |
|
|
6.3 |
|
|
(5.6 |
) |
|||
|
Purchase of property plant and equipment |
(22.5 |
) |
|
(35.4 |
) |
|
(15.5 |
) |
|||
|
Acquisition of businesses, net of cash acquired |
(144.8 |
) |
|
— |
|
|
(127.7 |
) |
|||
|
Proceeds from sale of equity method investment in a joint venture |
18.0 |
|
|
— |
|
|
— |
|
|||
|
Investment in equity method investee |
(26.3 |
) |
|
(7.4 |
) |
|
(4.9 |
) |
|||
|
Purchases of available-for-sale securities |
(45.2 |
) |
|
(14.0 |
) |
|
(4.5 |
) |
|||
|
Sales and maturities of available-for-sale securities |
29.8 |
|
|
5.3 |
|
|
10.1 |
|
|||
|
Other |
0.6 |
|
|
(0.6 |
) |
|
(0.6 |
) |
|||
|
Net cash from investing activities |
(180.8 |
) |
|
(45.9 |
) |
|
(148.6 |
) |
|||
|
Cash flows from financing activities: |
|
|
|
|
|
||||||
|
Borrowings under our U.S. revolving credit facility |
205.6 |
|
|
— |
|
|
— |
|
|||
|
Repayments of our U.S. revolving credit facility |
(195.8 |
) |
|
— |
|
|
— |
|
|||
|
Borrowings under our foreign revolving credit facilities |
5.7 |
|
|
— |
|
|
— |
|
|||
|
Repayments of our foreign revolving credit facilities |
(20.2 |
) |
|
(1.1 |
) |
|
(4.5 |
) |
|||
|
Payment of debt issuance costs |
— |
|
|
— |
|
|
3.0 |
|
|||
|
Net transfers from former Parent |
— |
|
|
80.6 |
|
|
213.1 |
|
|||
|
Repurchase of shares of common stock |
(78.4 |
) |
|
(25.4 |
) |
|
— |
|
|||
|
Other |
(0.2 |
) |
|
(0.5 |
) |
|
0.1 |
|
|||
|
Net cash from financing activities |
(83.4 |
) |
|
53.6 |
|
|
211.7 |
|
|||
|
Effects of exchange rate changes on cash |
(7.3 |
) |
|
(6.4 |
) |
|
(12.6 |
) |
|||
|
Cash flows from continuing operations |
(269.3 |
) |
|
171.8 |
|
|
26.2 |
|
|||
|
Operating cash flows from discontinued operations, net |
— |
|
|
(25.2 |
) |
|
(0.2 |
) |
|||
|
Investing cash flows from discontinued operations, net |
— |
|
|
— |
|
|
(1.7 |
) |
|||
|
Effects of exchange rate changes on cash |
— |
|
|
— |
|
|
3.0 |
|
|||
|
NET CASH FLOWS FROM DISCONTINUED OPERATIONS |
— |
|
|
(25.2 |
) |
|
1.1 |
|
|||
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
(269.3 |
) |
|
146.5 |
|
|
27.3 |
|
|||
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
365.2 |
|
|
218.7 |
|
|
191.3 |
|
|||
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ |
95.9 |
|
|
$ |
365.2 |
|
|
$ |
218.7 |
|
(1) Figures may not be clerically accurate due to rounding.
Babcock & Wilcox Enterprises, Inc.
Segment Information(1)
(In millions)
|
SEGMENT RESULTS: |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
||||||||
|
REVENUES: |
|
|
|
|
|
|
|
||||||||
|
Power |
$ |
218.1 |
|
|
$ |
327.1 |
|
|
$ |
975.5 |
|
|
$ |
1,235.0 |
|
|
Renewable |
55.6 |
|
|
115.2 |
|
|
349.2 |
|
|
338.6 |
|
||||
|
Industrial |
106.3 |
|
|
60.3 |
|
|
253.6 |
|
|
183.7 |
|
||||
|
|
$ |
380.0 |
|
|
$ |
502.7 |
|
|
$ |
1,578.3 |
|
|
$ |
1,757.3 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
GROSS PROFIT: |
|
|
|
|
|
|
|
||||||||
|
Power |
$ |
62.6 |
|
|
$ |
71.4 |
|
|
$ |
233.5 |
|
|
$ |
247.6 |
|
|
Renewable |
(82.6 |
) |
|
21.1 |
|
|
(68.1 |
) |
|
57.7 |
|
||||
|
Industrial |
17.2 |
|
|
17.3 |
|
|
50.7 |
|
|
54.8 |
|
||||
|
Intangible asset amortization included in cost of operations |
(7.0 |
) |
|
(0.5 |
) |
|
(15.8 |
) |
|
(7.7 |
) |
||||
|
Mark to market adjustment included in cost of operations |
8.9 |
|
|
(44.3 |
) |
|
(21.2 |
) |
|
(44.3 |
) |
||||
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
||||||||
|
AMORTIZATION EXPENSE |
|
|
|
|
|
|
|
||||||||
|
Power |
$ |
0.3 |
|
|
$ |
0.3 |
|
|
$ |
1.1 |
|
|
$ |
1.1 |
|
|
Renewable |
0.4 |
|
|
0.2 |
|
|
1.3 |
|
|
1.3 |
|
||||
|
Industrial |
7.3 |
|
|
1.0 |
|
|
17.5 |
|
|
9.1 |
|
||||
|
|
$ |
8.0 |
|
|
$ |
1.5 |
|
|
$ |
19.9 |
|
|
$ |
11.5 |
|
|
DEPRECIATION EXPENSE |
|
|
|
|
|
|
|
||||||||
|
Power |
$ |
2.5 |
|
|
$ |
2.4 |
|
|
$ |
10.1 |
|
|
$ |
17.4 |
|
|
Renewable |
0.4 |
|
|
0.3 |
|
|
1.4 |
|
|
1.3 |
|
||||
|
Industrial |
0.5 |
|
|
0.3 |
|
|
1.6 |
|
|
1.3 |
|
||||
|
Corporate |
0.7 |
|
|
1.6 |
|
|
6.6 |
|
|
3.5 |
|
||||
|
|
$ |
4.2 |
|
|
$ |
4.6 |
|
|
$ |
19.7 |
|
|
$ |
23.5 |
|
|
BOOKINGS: |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
||||||||
|
Power |
$ |
161 |
|
|
$ |
339 |
|
|
$ |
784 |
|
|
$ |
1002 |
|
|
Renewable |
12 |
|
|
15 |
|
|
135 |
|
|
657 |
|
||||
|
Industrial |
89 |
|
|
35 |
|
|
222 |
|
|
178 |
|
||||
|
|
$ |
262 |
|
|
$ |
389 |
|
|
$ |
1,141 |
|
|
$ |
1,837 |
|
|
BACKLOG: |
As of December 31, |
||||||
|
|
2016 |
|
2015 |
||||
|
Power |
$ |
615 |
|
|
$ |
803 |
|
|
Renewable |
1,241 |
|
|
1,458 |
|
||
|
Industrial |
216 |
|
|
67 |
|
||
|
|
$ |
2,072 |
|
|
$ |
2,328 |
|
(1) Figures may not be clerically accurate due to rounding.
Babcock & Wilcox Enterprises, Inc.
Quarterly Information(1)
(In millions, except per share amounts)
|
|
March 31, |
|
June 30, |
|
September 30, |
|
December 31, |
||||||||
|
Revenues |
$ |
404.1 |
|
|
$ |
383.2 |
|
|
$ |
411.0 |
|
|
$ |
380.0 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
|
Cost of operations |
324.0 |
|
|
357.2 |
|
|
337.2 |
|
|
380.8 |
|
||||
|
Research and development costs |
2.8 |
|
|
3.1 |
|
|
2.4 |
|
|
2.1 |
|
||||
|
Losses on asset disposals and impairments |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
|
Selling, general and administrative expenses |
58.7 |
|
|
63.3 |
|
|
60.7 |
|
|
64.4 |
|
||||
|
Restructuring activities and spin-off transaction costs |
4.0 |
|
|
31.6 |
|
|
2.4 |
|
|
2.8 |
|
||||
|
Total costs and expenses |
389.5 |
|
|
455.2 |
|
|
402.7 |
|
|
450.1 |
|
||||
|
Equity in income (loss) of investees |
2.7 |
|
|
(0.6 |
) |
|
2.8 |
|
|
11.6 |
|
||||
|
Operating income (loss) |
17.3 |
|
|
(72.6 |
) |
|
11.1 |
|
|
(58.5 |
) |
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Interest income |
0.3 |
|
|
0.3 |
|
|
0.1 |
|
|
0.2 |
|
||||
|
Interest expense |
(0.4 |
) |
|
(0.4 |
) |
|
(0.4 |
) |
|
(2.6 |
) |
||||
|
Other, net |
0.1 |
|
|
0.3 |
|
|
(0.2 |
) |
|
(2.5 |
) |
||||
|
Total other income (expense) |
— |
|
|
0.2 |
|
|
(0.5 |
) |
|
(4.9 |
) |
||||
|
Income before income tax expense (benefit) |
17.3 |
|
|
(72.4 |
) |
|
10.6 |
|
|
(63.4 |
) |
||||
|
Income tax expense (benefit) |
6.6 |
|
|
(9.0 |
) |
|
1.6 |
|
|
7.7 |
|
||||
|
Income (loss) from continuing operations |
10.7 |
|
|
(63.4 |
) |
|
9.0 |
|
|
(71.1 |
) |
||||
|
Income (loss) from discontinued operations, net of tax |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
|
Net income (loss) |
10.7 |
|
|
(63.4 |
) |
|
9.0 |
|
|
(71.1 |
) |
||||
|
Net income attributable to noncontrolling interest |
(0.1 |
) |
|
(0.1 |
) |
|
(0.1 |
) |
|
(0.3 |
) |
||||
|
Net income (loss) attributable to shareholders |
$ |
10.6 |
|
|
$ |
(63.5 |
) |
|
$ |
8.9 |
|
|
$ |
(71.4 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Income (loss) from continuing operations |
10.5 |
|
|
(63.5 |
) |
|
8.9 |
|
|
(71.6 |
) |
||||
|
Income (loss) from discontinued operations, net of tax |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
|
Net income (loss) attributable to shareholders |
$ |
10.5 |
|
|
$ |
(63.5 |
) |
|
$ |
8.9 |
|
|
$ |
(71.6 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings (loss) per common share |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
|
|
|
|
|
|
||||||||
|
Continuing operations |
$ |
0.20 |
|
|
$ |
(1.25 |
) |
|
$ |
0.18 |
|
|
$ |
(1.47 |
) |
|
Discontinued operations |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
|
Basic earnings (loss) per common share |
$ |
0.20 |
|
|
$ |
(1.25 |
) |
|
$ |
0.18 |
|
|
$ |
(1.47 |
) |
|
Diluted |
|
|
|
|
|
|
|
||||||||
|
Continuing operations |
$ |
0.20 |
|
|
$ |
(1.25 |
) |
|
$ |
0.18 |
|
|
$ |
(1.47 |
) |
|
Discontinued operations |
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
|
Diluted earnings (loss) per common share |
0.20 |
|
|
(1.25 |
) |
|
0.18 |
|
|
(1.47 |
) |
||||
|
|
March 31, |
|
June 30, |
|
September 30, |
|
December 31, |
||||||||
|
Revenues |
$ |
397.2 |
|
|
$ |
437.5 |
|
|
$ |
420.0 |
|
|
$ |
502.7 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
|
Cost of operations |
313.8 |
|
|
355.6 |
|
|
342.1 |
|
|
437.7 |
|
||||
|
Research and development costs |
4.5 |
|
|
4.0 |
|
|
4.0 |
|
|
4.1 |
|
||||
|
Losses on asset disposals and impairments |
— |
|
|
9.0 |
|
|
— |
|
|
5.6 |
|
||||
|
Selling, general and administrative expenses |
56.2 |
|
|
59.7 |
|
|
62.6 |
|
|
61.4 |
|
||||
|
Restructuring activities and spin-off transaction costs |
3.3 |
|
|
5.3 |
|
|
2.7 |
|
|
3.7 |
|
||||
|
Total costs and expenses |
377.8 |
|
|
433.6 |
|
|
411.4 |
|
|
512.5 |
|
||||
|
Equity in income (loss) of investees |
(2.1 |
) |
|
1.0 |
|
|
1.0 |
|
|
(0.2 |
) |
||||
|
Operating income (loss) |
17.3 |
|
|
4.9 |
|
|
9.6 |
|
|
(10.0 |
) |
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Interest income |
0.2 |
|
|
0.1 |
|
|
0.1 |
|
|
0.2 |
|
||||
|
Interest expense |
(0.1 |
) |
|
(0.1 |
) |
|
(0.4 |
) |
|
(0.4 |
) |
||||
|
Other, net |
(0.3 |
) |
|
0.2 |
|
|
(1.3 |
) |
|
0.2 |
|
||||
|
Total other income (expense) |
(0.2 |
) |
|
0.2 |
|
|
(1.6 |
) |
|
— |
|
||||
|
Income before income tax expense (benefit) |
17.1 |
|
|
5.1 |
|
|
8.0 |
|
|
(10.0 |
) |
||||
|
Income tax expense (benefit) |
5.7 |
|
|
0.9 |
|
|
1.8 |
|
|
(4.7 |
) |
||||
|
Income (loss) from continuing operations |
11.4 |
|
|
4.2 |
|
|
6.2 |
|
|
(5.3 |
) |
||||
|
Income (loss) from discontinued operations, net of tax |
1.4 |
|
|
1.4 |
|
|
— |
|
|
— |
|
||||
|
Net income (loss) |
12.8 |
|
|
5.6 |
|
|
6.2 |
|
|
(5.3 |
) |
||||
|
Net income attributable to noncontrolling interest |
(0.1 |
) |
|
(0.1 |
) |
|
(0.1 |
) |
|
— |
|
||||
|
Net income (loss) attributable to shareholders |
$ |
12.7 |
|
|
$ |
5.5 |
|
|
$ |
6.1 |
|
|
$ |
(5.3 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Income (loss) from continuing operations |
11.3 |
|
|
4.1 |
|
|
6.2 |
|
|
(5.2 |
) |
||||
|
Income (loss) from discontinued operations, net of tax |
1.4 |
|
|
1.4 |
|
|
— |
|
|
— |
|
||||
|
Net income (loss) attributable to shareholders |
$ |
12.7 |
|
|
$ |
5.5 |
|
|
$ |
6.2 |
|
|
$ |
(5.2 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings (loss) per common share |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
|
|
|
|
|
|
||||||||
|
Continuing operations |
$ |
0.21 |
|
|
$ |
0.08 |
|
|
$ |
0.11 |
|
|
$ |
(0.10 |
) |
|
Discontinued operations |
0.03 |
|
|
0.02 |
|
|
— |
|
|
— |
|
||||
|
Basic earnings (loss) per common share |
$ |
0.24 |
|
|
$ |
0.10 |
|
|
$ |
0.11 |
|
|
$ |
(0.10 |
) |
|
Diluted |
|
|
|
|
|
|
|
||||||||
|
Continuing operations |
$ |
0.21 |
|
|
$ |
0.08 |
|
|
$ |
0.11 |
|
|
$ |
(0.10 |
) |
|
Discontinued operations |
0.03 |
|
|
0.02 |
|
|
— |
|
|
— |
|
||||
|
Diluted earnings (loss) per common share |
0.24 |
|
|
0.10 |
|
|
0.11 |
|
|
(0.10 |
) |
||||
(1) Figures may not be clerically accurate due to rounding.