UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15 (d)
of
the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): August 6, 2014
THE BABCOCK & WILCOX COMPANY
|
(Exact name of registrant as
specified in its charter)
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DELAWARE
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001-34658
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80-0558025
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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13024 BALLANTYNE CORPORATE PLACE SUITE 700 CHARLOTTE, NORTH
CAROLINA
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28277
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(Address
of principal executive offices)
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(Zip
Code)
|
Registrant’s Telephone Number,
including Area Code: (704)
625-4900
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
_____________________________________________
Item 2.02
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Results of Operations and Financial Condition.
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On August 6, 2014, we issued a press release announcing our financial
results for the second quarter ended June 30, 2014. A copy of the press
release is attached as Exhibit 99.1, and the information contained in
Exhibit 99.1 is incorporated by reference.
The information furnished pursuant to this Item 2.02, including Exhibit
99.1, shall not be deemed to be “filed” for the purposes of Section 18
of the Securities Exchange Act of 1934, as amended, (the “Exchange
Act”), or otherwise subject to the liabilities of that section, nor
shall such information be deemed incorporated by reference in any filing
under the Securities Act of 1933, as amended, or the Exchange Act,
except as shall be expressly set forth by specific reference in such
filing.
Item 9.01
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Financial Statements and Exhibits.
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(d)
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Exhibits
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99.1
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Earnings Release dated August 6, 2014.
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SIGNATURES
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
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THE BABCOCK & WILCOX COMPANY
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By:
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/s/ David S. Black
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David S. Black
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Vice President and Chief Accounting
Officer
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August 6, 2014
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2
Exhibit 99.1
Babcock &
Wilcox Announces Second Quarter 2014 Results
- Solid
International and Renewables Bookings in Power Generation Segment
-
Continued Strong Operating Performance by Nuclear Operations Segment
-
Year-to-Date Share Repurchases Total $100 Million
CHARLOTTE, N.C.--(BUSINESS WIRE)--August 6, 2014--The Babcock & Wilcox
Company (NYSE: BWC) (“B&W” or the “Company”) today reported second
quarter 2014 revenues of $686.0 million, a decrease of $200.1 million,
or 22.6%, from the second quarter of 2013. GAAP earnings per share for
the second quarter of 2014 were $0.24 compared to $0.65 in the second
quarter of 2013. Adjusted earnings per share, which excludes a $0.20 per
share impact of restructuring and acquisition-related transaction costs
for the quarter, were $0.44 compared to $0.72 in the second quarter of
2013.
“Our Nuclear Operations segment continues to produce strong and steady
operating performance. In addition, we delivered significantly improved
bookings this quarter in our Power Generation segment, particularly in
international and renewables projects, which has been an area of
strategic focus. Looking forward, we have a number of solid
opportunities in the pipeline and expect to be able to announce
additional major contract awards in the coming months. Our success in
the international marketplace together with completion of the MEGTEC
acquisition are important elements of Power Generation’s strategy to
expand geographically and provide diversification from our historic
reliance on the U.S. coal market,” said E. James Ferland, President and
Chief Executive Officer. “Further, as promised, mPower development
spending has been reduced to an annual rate of $15 million giving us the
ability to develop the core technology while continuing to pursue
strategic investors.”
During the second quarter of 2014, the Company repurchased 2.6 million
shares of its common stock at a total cost of $84.0 million. During the
first six months of 2014, the Company repurchased 3.1 million shares of
its common stock at a total cost of $99.7 million. Through June 30,
2014, the Company had repurchased a total of 12.6 million shares at a
cost of $353.4 million leaving $396.6 million of capacity remaining
under its previously announced $750 million share repurchase
authorizations.
Results of Operations
Consolidated revenues for the second quarter of 2014 were $686.0
million, a decrease of $200.1 million, or 22.6%, from the second quarter
of 2013. Revenues in the Power Generation segment decreased 30.5%, or
$143.8 million, to $327.4 million in the three months ended June 30,
2014, compared to $471.2 million in the second quarter of 2013. The
decrease reflects a $70.5 million decline in new build environmental
equipment revenue driven by the completion of scrubber projects underway
last year and reduced utility spending in 2014, a $49.5 million decrease
in aftermarket services revenue principally due to a large boiler
retrofit project that was completed last year and reduced utility
spending, and a $27.5 million decrease in new build steam generation
systems revenue largely attributable to the timing of renewable energy
projects. The Nuclear Operations segment revenues decreased 11.4%, or
$37.6 million, to $293.4 million, compared to the corresponding period
in 2013, primarily due to the timing of long lead time material
purchases related to the manufacturing of nuclear components for U.S.
Government programs that led to higher revenues in the prior period.
Revenues from the Nuclear Energy segment were $44.9 million compared to
$63.2 million in the second quarter of 2013, a decrease of $18.3
million, primarily attributable to the completion and delivery of two
large steam generators that were ongoing in the prior year period.
GAAP operating income for the second quarter of 2014 was $35.1 million,
a decrease of $63.6 million compared to $98.7 million in the same period
of 2013. The mPower segment reported a $31.9 million operating loss in
the second quarter of 2014 compared to a $1.1 million loss in the
corresponding period in 2013, primarily due to a cost-share catch-up
payment in the second quarter of 2013 in combination with cost-share
expenditures incurred during the mPower slow-down that have not been
reimbursed. For the three months ended June 30, 2014, operating income
in each of the Power Generation, Nuclear Operations and Nuclear Energy
segments was lower than in the prior year quarter, primarily
attributable to lower revenue as discussed above.
Operating income for the second quarter of 2014 includes $10.4 million
of special charges for restructuring activities related to the continued
execution of our cost reduction efforts primarily in the Power
Generation and Nuclear Energy segments, $21.3 million of costs related
to the restructuring of the mPower program, and $1.5 million of
transaction costs attributable to the MEGTEC acquisition. Excluding
these charges, adjusted operating income for the second quarter of 2014
was $68.3 million compared to adjusted operating income of $110.9
million in the second quarter of 2013.
“2014 is a transitional year for B&W. We remain focused on addressing
the near-term challenges while growing and strengthening the Company for
the future,” said Ferland. “The decline in Power Generation revenue this
quarter and this year is primarily the result of a reduction in
coal-related environmental and service projects due to continuing
regulatory uncertainty and lower capital spending by our utility
customers. Our cost reduction programs are on track and the momentum we
have in the international and renewable markets positions us well for
2015 and beyond. While we expect to realize sequential improvement in
Power Generation sales and earnings, the sharp reduction we’ve seen in
utility spending on U.S. environmental and service projects will be
difficult to overcome for the balance of the year. As a result we are
revising 2014 guidance, but are confident we will produce significantly
improved results in 2015. ”
Revised Outlook
The Company is narrowing its guidance for 2014 consolidated revenues to
between $2.9 billion and $3.0 billion from the previous range of $2.9
billion to $3.1 billion. Guidance for adjusted earnings per share for
the full year 2014 is being lowered to between $1.70 and $1.85 from the
previous range of $2.00 and $2.20. Adjusted earnings per share exclude
any mark-to-market adjustment for pension and post-retirement benefits,
acquisition-related transaction costs, and restructuring charges.
Liquidity and Debt
The Company’s cash and investments position, net of restricted cash, was
$224.7 million at the end of the second quarter of 2014, a decrease of
$136.6 million compared to $361.3 million as of December 31, 2013.
Second quarter 2014 cash flow included a net use of cash from investing
activities of $146.3 million, primarily attributable to the acquisition
of MEGTEC. During the quarter, the Company repurchased common shares
totaling $84.0 million, paid dividends of $11.1 million, and contributed
$19.5 million to its pension plans.
On June 24, 2014, the Company announced it had entered into a Second
Amended and Restated Credit Agreement (the “New Credit Agreement”) that
provides for revolving credit borrowings and issuances of letters of
credit in an aggregate amount of $1.0 billion and a term loan facility
of up to $300 million, $150 million of which was drawn on the closing
date to fund the MEGTEC acquisition. The remaining $150 million
commitment for the term loan remains available until December 31, 2014
if it is not drawn before then. As of June 30, 2014, outstanding
balances under the New Credit Agreement included the $150.0 million term
loan, $113.8 million borrowed under the revolving credit facility, and
letters of credit issued under the revolving credit facility totaling
$173.0 million, resulting in $863.2 million of availability as of the
end of the second quarter.
Quarterly Dividend
On August 5, 2014, the Company declared a quarterly cash dividend of
$0.10 per common share. The dividend will be payable on September 10,
2014 to shareholders of record on August 20, 2014.
Conference Call to Discuss Second Quarter 2014 Results
Date:
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Thursday, August 7, 2014, at 8:30 a.m. EDT
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Live Webcast:
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Investor Relations section of website at www.babcock.com
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Forward-Looking Statements
B&W cautions that this release contains forward-looking statements,
including, without limitation, statements relating to additional
contract awards, expected Power Generation sales and earnings, our 2014
outlook and 2015 results. 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 achieve
bookings in our business segments, adverse changes in the industries in
which we operate and delays, changes or termination of contracts in
backlog. 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 annual report
on Form 10-K for the year ended December 31, 2013 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
The Babcock & Wilcox Company is a leader in clean energy technology and
services, primarily for the nuclear, fossil and renewable power markets
as well as a premier advanced technology and mission critical defense
contractor. B&W has locations worldwide and employs approximately 11,000
people, in addition to joint venture employees throughout the world. A
company overview presentation, which will be presented at investor
conferences and meetings throughout this quarter, is available on the
Investor Relations section of our website. For additional information
please visit our website at www.babcock.com.
EXHIBITS TO FOLLOW
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EXHIBIT 1
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THE BABCOCK & WILCOX COMPANY
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RECONCILIATION OF NON-GAAP OPERATING INCOME AND EARNINGS PER SHARE
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Three Months Ended June 30, 2014
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mPower
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Megtec
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GAAP
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Restructuring
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GCI Impact
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Acquisition
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Non-GAAP
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Operating Income
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$
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35.1
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$
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21.3
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$
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10.4
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$
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1.5
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$
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68.3
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Other Income / (Expense)
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(0.2
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)
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-
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-
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-
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(0.2
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)
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Provision for Income Taxes
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(11.5
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)
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(7.2
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)
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(3.5
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)
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(0.5
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)
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(22.8
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)
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Net Income
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|
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23.5
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14.1
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6.9
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|
1.0
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45.4
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Net Loss (Income) Attributable to Non-Controlling Interest
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2.9
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-
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-
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-
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2.9
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Net Income Attributable to The Babcock & Wilcox Company
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|
$
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26.4
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|
|
$
|
14.1
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|
|
$
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6.9
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|
|
$
|
1.0
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|
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$
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48.4
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|
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|
|
|
|
|
|
|
|
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|
Diluted Earnings per Common Share
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|
$
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0.24
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$
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0.13
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$
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0.06
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$
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0.01
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$
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0.44
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Effective Tax Rate
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32.8
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%
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33.4
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%
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Three Months Ended June 30, 2013
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mPower
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Megtec
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GAAP
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Restructuring
|
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GCI Impact
|
|
Acquisition
|
|
Non-GAAP
|
Operating Income
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$
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98.7
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$
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-
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$
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12.2
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$
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-
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$
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110.9
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Other Income / (Expense)
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0.5
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-
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-
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-
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0.5
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Provision for Income Taxes
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(29.5
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)
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-
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(4.1
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)
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-
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(33.6
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)
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Net Income
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69.7
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-
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8.1
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-
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77.8
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Net Loss (Income) Attributable to Non-Controlling Interest
|
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3.2
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-
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-
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-
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3.2
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Net Income Attributable to The Babcock & Wilcox Company
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$
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72.9
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$
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-
|
|
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$
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8.1
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|
|
$
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-
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$
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81.0
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|
|
|
|
|
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Diluted Earnings per Common Share
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$
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0.65
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|
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$
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-
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$
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0.07
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|
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$
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-
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|
|
$
|
0.72
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|
Effective Tax Rate
|
|
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29.8
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%
|
|
|
|
|
|
|
|
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30.2
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%
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|
|
|
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Six Months Ended June 30, 2014
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|
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mPower
|
|
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Megtec
|
|
|
|
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GAAP
|
|
Restructuring
|
|
GCI Impact
|
|
Acquisition
|
|
Non-GAAP
|
Operating Income
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|
$
|
88.8
|
|
|
$
|
22.1
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|
|
$
|
12.3
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|
|
$
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1.5
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|
|
$
|
124.7
|
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Other Income / (Expense)
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|
|
0.7
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|
|
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-
|
|
|
|
-
|
|
|
|
-
|
|
|
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0.7
|
|
Provision for Income Taxes
|
|
|
(24.8
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)
|
|
|
(7.5
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)
|
|
|
(4.2
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)
|
|
|
(0.5
|
)
|
|
|
(37.0
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)
|
Net Income
|
|
|
64.6
|
|
|
|
14.6
|
|
|
|
8.1
|
|
|
|
1.0
|
|
|
|
88.4
|
|
Net Loss (Income) Attributable to Non-Controlling Interest
|
|
|
6.8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6.8
|
|
Net Income Attributable to The Babcock & Wilcox Company
|
|
$
|
71.5
|
|
|
$
|
14.6
|
|
|
$
|
8.1
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|
|
$
|
1.0
|
|
|
$
|
95.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per Common Share
|
|
$
|
0.65
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|
|
$
|
0.13
|
|
|
$
|
0.07
|
|
|
$
|
0.01
|
|
|
$
|
0.86
|
|
Effective Tax Rate
|
|
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27.7
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%
|
|
|
|
|
|
|
|
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29.5
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%
|
|
|
|
|
|
Six Months Ended June 30, 2013
|
|
|
|
|
mPower
|
|
|
|
Megtec
|
|
|
|
|
GAAP
|
|
Restructuring
|
|
GCI Impact
|
|
Acquisition
|
|
Non-GAAP
|
Operating Income
|
|
$
|
158.9
|
|
|
$
|
-
|
|
|
$
|
20.7
|
|
|
$
|
-
|
|
|
$
|
179.6
|
|
Other Income / (Expense)
|
|
|
1.5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.5
|
|
Provision for Income Taxes
|
|
|
(45.8
|
)
|
|
|
-
|
|
|
|
(7.0
|
)
|
|
|
-
|
|
|
|
(52.8
|
)
|
Net Income
|
|
|
114.6
|
|
|
|
-
|
|
|
|
13.7
|
|
|
|
-
|
|
|
|
128.3
|
|
Net Loss (Income) Attributable to Non-Controlling Interest
|
|
|
5.5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5.5
|
|
Net Income Attributable to The Babcock & Wilcox Company
|
|
$
|
120.0
|
|
|
$
|
-
|
|
|
$
|
13.7
|
|
|
$
|
-
|
|
|
$
|
133.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per Common Share
|
|
$
|
1.06
|
|
|
$
|
-
|
|
|
$
|
0.12
|
|
|
$
|
-
|
|
|
$
|
1.18
|
|
Effective Tax Rate
|
|
|
28.6
|
%
|
|
|
|
|
|
|
|
|
29.2
|
%
|
*Totals may not foot due to rounding.
B&W is providing non-GAAP information regarding certain of its
historical results and guidance on future earnings per share to
supplement the results provided in accordance with GAAP and it should
not be considered superior to, or as a substitute for, the comparable
GAAP measures. B&W believes the non-GAAP measures provide meaningful
insight in the Company’s operational performance and provides these
measures to investors to help facilitate comparisons of operating
results with prior periods and to assist them in understanding B&W’s
ongoing operations.
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|
|
|
|
EXHIBIT 2
|
|
THE BABCOCK & WILCOX COMPANY
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
ASSETS
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
2014
|
|
2013
|
|
|
(Unaudited)
|
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
215,918
|
|
$
|
346,116
|
Restricted cash and cash equivalents
|
|
|
39,660
|
|
|
45,945
|
Investments
|
|
|
4,249
|
|
|
10,748
|
Accounts receivable – trade, net
|
|
|
381,761
|
|
|
360,323
|
Accounts receivable – other
|
|
|
64,325
|
|
|
45,480
|
Contracts in progress
|
|
|
341,019
|
|
|
370,820
|
Inventories
|
|
|
112,971
|
|
|
113,058
|
Deferred income taxes
|
|
|
99,123
|
|
|
97,170
|
Other current assets
|
|
|
70,645
|
|
|
47,764
|
|
|
|
|
|
Total Current Assets
|
|
|
1,329,671
|
|
|
1,437,424
|
|
|
|
|
|
Property, Plant and Equipment
|
|
|
1,178,357
|
|
|
1,126,683
|
Less accumulated depreciation
|
|
|
708,789
|
|
|
679,604
|
|
|
|
|
|
Net Property, Plant and Equipment
|
|
|
469,568
|
|
|
447,079
|
|
|
|
|
|
Investments
|
|
|
4,503
|
|
|
4,426
|
|
|
|
|
|
Goodwill
|
|
|
396,829
|
|
|
281,708
|
|
|
|
|
|
Deferred Income Taxes
|
|
|
96,811
|
|
|
127,076
|
|
|
|
|
|
Investments in Unconsolidated Affiliates
|
|
|
158,927
|
|
|
184,831
|
|
|
|
|
|
Intangible Assets
|
|
|
119,852
|
|
|
81,521
|
|
|
|
|
|
Other Assets
|
|
|
49,892
|
|
|
45,088
|
|
|
|
|
|
TOTAL
|
|
$
|
2,626,053
|
|
$
|
2,609,153
|
|
|
|
|
|
|
|
|
|
|
|
|
THE BABCOCK & WILCOX COMPANY
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
2014
|
|
2013
|
|
|
(Unaudited)
|
|
|
(In thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
Notes payable and current maturities of long-term debt
|
|
$
|
7,447
|
|
|
$
|
4,671
|
|
Accounts payable
|
|
|
199,860
|
|
|
|
319,774
|
|
Accrued employee benefits
|
|
|
98,135
|
|
|
|
163,833
|
|
Accrued liabilities – other
|
|
|
79,164
|
|
|
|
58,192
|
|
Advance billings on contracts
|
|
|
244,257
|
|
|
|
317,771
|
|
Accrued warranty expense
|
|
|
58,825
|
|
|
|
56,436
|
|
Income taxes payable
|
|
|
8,000
|
|
|
|
6,551
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
695,688
|
|
|
|
927,228
|
|
|
|
|
|
|
Long-Term Debt
|
|
|
260,050
|
|
|
|
225
|
|
|
|
|
|
|
Accumulated Postretirement Benefit Obligation
|
|
|
47,411
|
|
|
|
43,194
|
|
|
|
|
|
|
Environmental Liabilities
|
|
|
55,342
|
|
|
|
53,391
|
|
|
|
|
|
|
Pension Liability
|
|
|
376,159
|
|
|
|
336,878
|
|
|
|
|
|
|
Other Liabilities
|
|
|
54,408
|
|
|
|
65,296
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity:
|
|
|
|
|
Common stock, par value $0.01 per share, authorized 325,000,000
shares; issued 121,287,860 and 120,536,910 shares at June 30, 2014
and December 31, 2013, respectively
|
|
|
1,213
|
|
|
|
1,205
|
|
Preferred stock, par value $0.01 per share, authorized 75,000,000
shares;
|
|
|
|
|
|
|
|
|
No shares issued
|
|
|
-
|
|
|
|
-
|
|
Capital in excess of par value
|
|
|
764,668
|
|
|
|
747,189
|
|
Retained earnings
|
|
|
706,162
|
|
|
|
656,916
|
|
Treasury stock at cost, 13,728,384 and 10,068,731 shares at June 30,
2014 and December 31, 2013, respectively
|
|
|
(373,776
|
)
|
|
|
(268,971
|
)
|
Accumulated other comprehensive income
|
|
|
21,892
|
|
|
|
28,348
|
|
Stockholders’ Equity – The Babcock & Wilcox Company
|
|
|
1,120,159
|
|
|
|
1,164,687
|
|
Noncontrolling interest
|
|
|
16,836
|
|
|
|
18,254
|
|
Total Stockholders’ Equity
|
|
|
1,136,995
|
|
|
|
1,182,941
|
|
|
|
|
|
|
TOTAL
|
|
$
|
2,626,053
|
|
|
$
|
2,609,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE BABCOCK & WILCOX COMPANY
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
(Unaudited)
|
|
|
(In thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
686,006
|
|
|
$
|
886,136
|
|
|
$
|
1,348,023
|
|
|
$
|
1,691,559
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
Cost of operations
|
|
|
512,308
|
|
|
|
686,043
|
|
|
|
1,014,615
|
|
|
|
1,305,740
|
|
Research and development costs
|
|
|
30,918
|
|
|
|
837
|
|
|
|
54,914
|
|
|
|
29,183
|
|
Losses on asset disposals and impairments, net
|
|
|
1,457
|
|
|
|
156
|
|
|
|
1,457
|
|
|
|
87
|
|
Selling, general and administrative expenses
|
|
|
101,918
|
|
|
|
106,937
|
|
|
|
196,603
|
|
|
|
210,537
|
|
Special charges for restructuring activities
|
|
|
17,470
|
|
|
|
12,232
|
|
|
|
20,128
|
|
|
|
20,655
|
|
Total Costs and Expenses
|
|
|
664,071
|
|
|
|
806,205
|
|
|
|
1,287,717
|
|
|
|
1,566,202
|
|
|
|
|
|
|
|
|
|
|
Equity in Income of Investees
|
|
|
13,183
|
|
|
|
18,775
|
|
|
|
28,452
|
|
|
|
33,562
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
35,118
|
|
|
|
98,706
|
|
|
|
88,758
|
|
|
|
158,919
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
190
|
|
|
|
323
|
|
|
|
609
|
|
|
|
655
|
|
Interest expense
|
|
|
(921
|
)
|
|
|
(789
|
)
|
|
|
(1,820
|
)
|
|
|
(1,607
|
)
|
Other – net
|
|
|
580
|
|
|
|
1,005
|
|
|
|
1,902
|
|
|
|
2,411
|
|
Total Other Income (Expense)
|
|
|
(151
|
)
|
|
|
539
|
|
|
|
691
|
|
|
|
1,459
|
|
|
|
|
|
|
|
|
|
|
Income before Provision for Income Taxes
|
|
|
34,967
|
|
|
|
99,245
|
|
|
|
89,449
|
|
|
|
160,378
|
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes
|
|
|
11,475
|
|
|
|
29,544
|
|
|
|
24,803
|
|
|
|
45,801
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
23,492
|
|
|
$
|
69,701
|
|
|
$
|
64,646
|
|
|
$
|
114,577
|
|
|
|
|
|
|
|
|
|
|
Net Loss Attributable to Noncontrolling Interest
|
|
|
2,945
|
|
|
|
3,169
|
|
|
|
6,835
|
|
|
|
5,467
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to The Babcock & Wilcox Company
|
|
$
|
26,437
|
|
|
$
|
72,870
|
|
|
$
|
71,481
|
|
|
$
|
120,044
|
|
|
|
|
|
|
|
|
|
|
Earnings per Common Share:
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
Net Income Attributable to The Babcock & Wilcox Company
|
|
$
|
0.24
|
|
|
$
|
0.65
|
|
|
$
|
0.65
|
|
|
$
|
1.06
|
|
Diluted:
|
|
|
|
|
|
|
|
|
Net Income Attributable to The Babcock & Wilcox Company
|
|
$
|
0.24
|
|
|
$
|
0.65
|
|
|
$
|
0.65
|
|
|
$
|
1.06
|
|
|
|
|
|
|
|
|
|
|
Shares used in the computation of earnings per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
109,766,237
|
|
|
|
111,898,819
|
|
|
|
110,102,826
|
|
|
|
112,998,066
|
|
Diluted
|
|
|
110,116,630
|
|
|
|
112,662,563
|
|
|
|
110,501,337
|
|
|
|
113,699,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE BABCOCK & WILCOX COMPANY
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
Six Months Ended
|
|
|
June 30,
|
|
|
2014
|
|
2013
|
|
|
(Unaudited)
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
(In thousands)
|
Net Income
|
|
$
|
64,646
|
|
|
$
|
114,577
|
|
Non-cash items included in net income:
|
|
|
|
|
Depreciation and amortization
|
|
|
35,053
|
|
|
|
33,856
|
|
Income of investees, net of dividends
|
|
|
(8,517
|
)
|
|
|
(18,824
|
)
|
Losses on asset disposals and impairments
|
|
|
1,457
|
|
|
|
87
|
|
In-kind research and development costs
|
|
|
5,830
|
|
|
|
7,369
|
|
Recognition of losses for pension and postretirement plans
|
|
|
1,189
|
|
|
|
1,511
|
|
Stock-based compensation expense
|
|
|
7,411
|
|
|
|
9,076
|
|
Excess tax benefits from stock-based compensation
|
|
|
(552
|
)
|
|
|
(3
|
)
|
Changes in assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
Accounts receivable
|
|
|
(6,635
|
)
|
|
|
(37,429
|
)
|
Accounts payable
|
|
|
(129,471
|
)
|
|
|
5,972
|
|
Contracts in progress and advance billings on contracts
|
|
|
(52,142
|
)
|
|
|
(81,571
|
)
|
Inventories
|
|
|
5,666
|
|
|
|
11,608
|
|
Income taxes
|
|
|
(7,890
|
)
|
|
|
4,067
|
|
Accrued and other current liabilities
|
|
|
2,674
|
|
|
|
9,541
|
|
Pension liability, accrued postretirement benefit obligation and
employee benefits
|
|
|
(35,671
|
)
|
|
|
(44,056
|
)
|
Other, net
|
|
|
9,250
|
|
|
|
(4,005
|
)
|
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
|
|
(107,702
|
)
|
|
|
11,776
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
Decrease in restricted cash and cash equivalents
|
|
|
6,285
|
|
|
|
12,680
|
|
Purchases of property, plant and equipment
|
|
|
(37,822
|
)
|
|
|
(33,433
|
)
|
Acquisition of business, net of cash acquired
|
|
|
(127,098
|
)
|
|
|
-
|
|
Purchase of intangible assets
|
|
|
(722
|
)
|
|
|
(2,200
|
)
|
Purchases of available-for-sale securities
|
|
|
(21,225
|
)
|
|
|
(72,156
|
)
|
Sales and maturities of available-for-sale securities
|
|
|
27,802
|
|
|
|
91,749
|
|
Proceeds from asset disposals
|
|
|
10
|
|
|
|
454
|
|
Investment in equity and cost method investees
|
|
|
(4,900
|
)
|
|
|
(2,913
|
)
|
NET CASH USED IN INVESTING ACTIVITIES
|
|
|
(157,670
|
)
|
|
|
(5,819
|
)
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
Payment of short-term borrowing and long-term debt
|
|
|
(1,815
|
)
|
|
|
(104
|
)
|
Increase in short-term borrowing
|
|
|
733
|
|
|
|
651
|
|
Borrowings under Credit Agreement
|
|
|
562,300
|
|
|
|
-
|
|
Repayments under Credit Agreement
|
|
|
(298,500
|
)
|
|
|
-
|
|
Payment of debt issuance costs
|
|
|
(4,929
|
)
|
|
|
-
|
|
Repurchase of common shares
|
|
|
(99,742
|
)
|
|
|
(125,829
|
)
|
Dividends paid to common shareholders
|
|
|
(22,103
|
)
|
|
|
(18,142
|
)
|
Exercise of stock options
|
|
|
3,463
|
|
|
|
1,888
|
|
Excess tax benefits from stock-based compensation
|
|
|
552
|
|
|
|
3
|
|
Other
|
|
|
(409
|
)
|
|
|
(326
|
)
|
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
|
|
139,550
|
|
|
|
(141,859
|
)
|
EFFECTS OF EXCHANGE RATE CHANGES ON CASH
|
|
|
(4,376
|
)
|
|
|
(5,440
|
)
|
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
|
|
(130,198
|
)
|
|
|
(141,342
|
)
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
|
|
346,116
|
|
|
|
383,547
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
|
$
|
215,918
|
|
|
$
|
242,205
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
Income taxes (net of refunds)
|
|
$
|
28,099
|
|
|
$
|
38,851
|
|
SCHEDULE OF NON-CASH INVESTING ACTIVITY:
|
|
|
|
|
Accrued capital expenditures included in accounts payable
|
|
$
|
3,938
|
|
|
$
|
3,445
|
|
|
|
|
|
|
|
THE BABCOCK & WILCOX COMPANY
|
BUSINESS SEGMENT INFORMATION
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
(Unaudited)
|
|
|
(In thousands)
|
REVENUES:
|
|
|
|
|
|
|
|
|
Power Generation
|
|
$
|
327,379
|
|
|
$
|
471,191
|
|
|
$
|
639,457
|
|
|
$
|
932,654
|
|
Nuclear Operations
|
|
|
293,438
|
|
|
|
330,986
|
|
|
|
579,652
|
|
|
|
592,125
|
|
Technical Services
|
|
|
26,015
|
|
|
|
27,432
|
|
|
|
50,470
|
|
|
|
52,661
|
|
Nuclear Energy
|
|
|
44,927
|
|
|
|
63,185
|
|
|
|
92,707
|
|
|
|
126,701
|
|
mPower
|
|
|
0
|
|
|
|
333
|
|
|
|
278
|
|
|
|
637
|
|
Adjustments and Eliminations
|
|
|
(5,753
|
)
|
|
|
(6,991
|
)
|
|
|
(14,541
|
)
|
|
|
(13,219
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
686,006
|
|
|
$
|
886,136
|
|
|
$
|
1,348,023
|
|
|
$
|
1,691,559
|
|
|
|
|
|
|
|
|
|
|
SEGMENT INCOME:
|
|
|
|
|
|
|
|
|
Power Generation
|
|
$
|
15,215
|
|
|
$
|
30,535
|
|
|
$
|
25,757
|
|
|
$
|
63,865
|
|
Nuclear Operations
|
|
|
58,682
|
|
|
|
65,737
|
|
|
|
118,210
|
|
|
|
120,461
|
|
Technical Services
|
|
|
15,078
|
|
|
|
15,235
|
|
|
|
29,867
|
|
|
|
29,414
|
|
Nuclear Energy
|
|
|
1,548
|
|
|
|
7,922
|
|
|
|
2,071
|
|
|
|
10,180
|
|
mPower
|
|
|
(31,933
|
)
|
|
|
(1,104
|
)
|
|
|
(58,642
|
)
|
|
|
(28,051
|
)
|
SUBTOTAL
|
|
|
58,590
|
|
|
|
118,325
|
|
|
|
117,263
|
|
|
|
195,869
|
|
Corporate
|
|
|
(6,002
|
)
|
|
|
(7,387
|
)
|
|
|
(8,377
|
)
|
|
|
(16,295
|
)
|
Special Charges for Restructuring Activities
|
|
|
(17,470
|
)
|
|
|
(12,232
|
)
|
|
|
(20,128
|
)
|
|
|
(20,655
|
)
|
TOTAL
|
|
$
|
35,118
|
|
|
$
|
98,706
|
|
|
$
|
88,758
|
|
|
$
|
158,919
|
|
|
|
|
|
|
|
|
|
|
EQUITY IN INCOME (LOSS) OF INVESTEES:
|
|
|
|
|
|
|
|
|
Power Generation
|
|
$
|
434
|
|
|
$
|
5,202
|
|
|
$
|
2,800
|
|
|
$
|
7,309
|
|
Nuclear Operations
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Technical Services
|
|
|
12,749
|
|
|
|
13,699
|
|
|
|
25,650
|
|
|
|
26,532
|
|
Nuclear Energy
|
|
|
0
|
|
|
|
(126
|
)
|
|
|
2
|
|
|
|
(279
|
)
|
mPower
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
13,183
|
|
|
$
|
18,775
|
|
|
$
|
28,452
|
|
|
$
|
33,562
|
|
|
|
|
|
|
|
|
|
|
PENSION EXPENSE:
|
|
|
|
|
|
|
|
|
Power Generation
|
|
$
|
661
|
|
|
$
|
775
|
|
|
$
|
1,191
|
|
|
$
|
1,490
|
|
Nuclear Operations
|
|
|
872
|
|
|
|
1,133
|
|
|
|
1,744
|
|
|
|
2,266
|
|
Technical Services
|
|
|
48
|
|
|
|
72
|
|
|
|
96
|
|
|
|
144
|
|
Nuclear Energy
|
|
|
1,190
|
|
|
|
1,076
|
|
|
|
2,482
|
|
|
|
2,139
|
|
mPower
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Corporate
|
|
|
487
|
|
|
|
505
|
|
|
|
975
|
|
|
|
1,010
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
3,258
|
|
|
$
|
3,561
|
|
|
$
|
6,488
|
|
|
$
|
7,049
|
|
|
|
|
|
|
|
|
|
|
DEPRECIATION AND AMORTIZATION:
|
|
|
|
|
|
|
|
|
Power Generation
|
|
$
|
5,740
|
|
|
$
|
4,945
|
|
|
$
|
11,307
|
|
|
$
|
10,799
|
|
Nuclear Operations
|
|
|
7,299
|
|
|
|
6,724
|
|
|
|
13,657
|
|
|
|
13,413
|
|
Technical Services
|
|
|
0
|
|
|
|
48
|
|
|
|
1
|
|
|
|
96
|
|
Nuclear Energy
|
|
|
1,560
|
|
|
|
1,617
|
|
|
|
3,354
|
|
|
|
3,184
|
|
mPower
|
|
|
262
|
|
|
|
121
|
|
|
|
449
|
|
|
|
243
|
|
Corporate
|
|
|
3,179
|
|
|
|
3,043
|
|
|
|
6,285
|
|
|
|
6,121
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
18,040
|
|
|
$
|
16,498
|
|
|
$
|
35,053
|
|
|
$
|
33,856
|
|
|
|
|
|
|
|
|
|
|
RESEARCH AND DEVELOPMENT, NET:
|
|
|
|
|
|
|
|
|
Power Generation
|
|
$
|
4,282
|
|
|
$
|
5,872
|
|
|
$
|
8,293
|
|
|
$
|
11,543
|
|
Nuclear Operations
|
|
|
1
|
|
|
|
13
|
|
|
|
5
|
|
|
|
13
|
|
Technical Services
|
|
|
6
|
|
|
|
13
|
|
|
|
18
|
|
|
|
39
|
|
Nuclear Energy
|
|
|
415
|
|
|
|
1,029
|
|
|
|
910
|
|
|
|
2,200
|
|
mPower
|
|
|
26,214
|
|
|
|
(6,090
|
)
|
|
|
45,688
|
|
|
|
15,388
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
30,918
|
|
|
$
|
837
|
|
|
$
|
54,914
|
|
|
$
|
29,183
|
|
|
|
|
|
|
|
|
|
|
CAPITAL EXPENDITURES:
|
|
|
|
|
|
|
|
|
Power Generation
|
|
$
|
2,913
|
|
|
$
|
6,091
|
|
|
$
|
6,098
|
|
|
$
|
11,850
|
|
Nuclear Operations
|
|
|
8,819
|
|
|
|
5,696
|
|
|
|
17,109
|
|
|
|
13,412
|
|
Technical Services
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Nuclear Energy
|
|
|
2,095
|
|
|
|
1,556
|
|
|
|
8,237
|
|
|
|
2,978
|
|
mPower
|
|
|
392
|
|
|
|
478
|
|
|
|
1,884
|
|
|
|
1,414
|
|
Corporate
|
|
|
2,389
|
|
|
|
813
|
|
|
|
4,494
|
|
|
|
3,779
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
16,608
|
|
|
$
|
14,634
|
|
|
$
|
37,822
|
|
|
$
|
33,433
|
|
|
|
|
|
|
|
|
|
|
BACKLOG:
|
|
|
|
|
|
|
|
|
Power Generation
|
|
$
|
2,214,729
|
|
|
$
|
2,320,515
|
|
|
$
|
2,214,729
|
|
|
$
|
2,320,515
|
|
Nuclear Operations
|
|
|
2,578,591
|
|
|
|
2,831,270
|
|
|
|
2,578,591
|
|
|
|
2,831,270
|
|
Technical Services
|
|
|
12,246
|
|
|
|
8,856
|
|
|
|
12,246
|
|
|
|
8,856
|
|
Nuclear Energy
|
|
|
192,452
|
|
|
|
202,723
|
|
|
|
192,452
|
|
|
|
202,723
|
|
mPower
|
|
|
1,392
|
|
|
|
2,564
|
|
|
|
1,392
|
|
|
|
2,564
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
4,999,410
|
|
|
$
|
5,365,928
|
|
|
$
|
4,999,410
|
|
|
$
|
5,365,928
|
|
|
|
|
|
|
|
|
|
|
BOOKINGS:
|
|
|
|
|
|
|
|
|
Power Generation
|
|
$
|
471,940
|
|
|
$
|
489,198
|
|
|
$
|
691,279
|
|
|
$
|
771,637
|
|
Nuclear Operations
|
|
|
20,564
|
|
|
|
229,395
|
|
|
|
784,008
|
|
|
|
436,714
|
|
Technical Services
|
|
|
36,897
|
|
|
|
23,864
|
|
|
|
57,632
|
|
|
|
53,065
|
|
Nuclear Energy
|
|
|
61,989
|
|
|
|
23,771
|
|
|
|
138,026
|
|
|
|
48,128
|
|
mPower
|
|
|
0
|
|
|
|
59
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
591,390
|
|
|
$
|
766,287
|
|
|
$
|
1,670,945
|
|
|
$
|
1,309,544
|
|
|
|
|
|
|
|
|
|
|
CONTACT:
The Babcock & Wilcox Company
Investor Contact:
Jenny
L. Apker, Vice President, Treasurer and Investor Relations, 704-625-4944
investors@babcock.com
or
Media
Contact:
Aimee Mills, Media Relations Lead, 980-365-4583
aemills@babcock.com