– Record Fourth Quarter Revenue and Operating Income for Nuclear Operations Segment
- Adjusted EPS Increases 23%, GAAP EPS Lower Primarily Due to a Mark to Market Actuarial Loss
- Strong Bookings Continue to Fuel Growth for Power Generation Segment
- Anticipated Spin-off of Power Generation Business Remains on Schedule
CHARLOTTE, NC – February 26, 2015 – The Babcock & Wilcox Company (NYSE: BWC) (“B&W” or the “Company”) today reported fourth quarter 2014 revenues of $837.1 million, an increase of $34.3 million, or 4.3%, from the fourth quarter of 2013. GAAP earnings per share for the fourth quarter of 2014 were a loss of $0.97 compared to $1.48 in the fourth quarter of 2013. Non-GAAP, or adjusted earnings per share, which excludes a $1.61 per share net impact of non-cash mark-to-market adjustments for pension and other post-retirement benefits, restructuring and spin-related costs and higher legal reserves for the quarter, were $0.64 for the three months ended December 31, 2014 compared to $0.52 in the prior year period.
Revenues for the full year of 2014 were $2.92 billion, a decrease of 10.6% from the $3.27 billion recorded in 2013. GAAP earnings per share for the full year of 2014 were $0.27, compared to $3.07 in 2013. Full year 2014 adjusted earnings per share decreased 10.6% to $2.03 versus adjusted earnings per share of $2.27 in the prior year.
“B&W ended the year with a solid quarter and a strengthening backlog heading into 2015,” said Mr. E. James Ferland, President and Chief Executive Officer. “The Nuclear Operations business had a record year in 2014 with the highest revenue and operating income in its history. The NOG leadership team consistently drives focus on execution to create value for our customer and our shareholders. The Power Generation segment continued to deliver improved performance in the fourth quarter with strong revenues and additional international bookings for both coal and renewable power plants. Our strategy to drive international growth in the Power Generation business is generating the results we expected as demonstrated by the three projects announced since December, which puts this business in a solid position for the spin-off later this year.”
Results of Operations
Consolidated revenues for the fourth quarter of 2014 were $837.1 million, an increase of 4.3%, compared to
$802.8 million for the fourth quarter of 2013. The Nuclear Operations segment revenues increased by
$50.4 million to $343.8 million from $293.4 million in the prior year period, primarily attributable to increased activity in the manufacturing of nuclear fuel and the impact of contract change orders that favorably impacted sales and margin in the quarter. Revenues in the Power Generation segment were
$444.6 million in the final three months of 2014, versus $408.0 million in the corresponding period in 2013, an increase of 9.0%, due to industrial environmental revenue following the MEGTEC acquisition, partially offset by the completion of new build environmental projects that were ongoing in the prior year period. Revenues from the Nuclear Energy segment were $40.5 million, compared to $104.7 million in the prior year period, a decrease of $64.2 million primarily attributable to management’s decision to exit the low margin nuclear projects business.
GAAP operating income for the fourth quarter of 2014 decreased $451.8 million to a loss of $156.5 million compared to $295.3 million in the same period of 2013, primarily due to the annual recognition of the pension and other post-retirement benefits mark-to-market adjustment. This adjustment resulted in an actuarial loss of $230.1 million in the quarter compared to a $222.7 million actuarial gain in the prior year period. GAAP operating income for the fourth quarter of 2014 also included $28.7 million related to an increase in legal reserves and restructuring initiatives, as well as $6.1 million of spin-related costs in preparation for the spin-off of the Power Generation business. Excluding these charges, adjusted operating income increased 25% in the fourth quarter of 2014 to $108.3 million, compared to adjusted operating income of $86.7 million in the fourth quarter of 2013.
Fourth quarter 2014 operating income in the Nuclear Operations segment increased $36.8 million from the same period last year to $90.4 million, attributable to the impact of contract change orders and continuing strong contract execution. The Nuclear Energy segment reported a loss of $18.6 million in the fourth quarter of 2014 compared to a $1.6 million loss in the prior year period, primarily attributable to an unfavorable jury verdict. Operating income in the Power Generation segment was $37.5 million in the fourth quarter of 2014, a $16.1 million decrease from $53.6 million in the 2013 period, primarily due to favorable contract performance in the fourth quarter of 2013 and a lower level of equity income in 2014. Technical Services segment operating income decreased $10.0 million from $10.4 million in the fourth quarter of 2013, due to the loss of the Pantex and Y-12 contracts and lower fee income from sites impacted by the Waste Isolation Plant drum containment issue. The operating income for mPower improved to a loss of $5.2 million compared to a $27.7 million loss in the same period in 2013 due to restructuring of the mPower program in 2014.
“The positive performance and significant momentum of the two core businesses at the end of the year reinforces our belief that the planned spin of the Power Generation business will result in two strong businesses with opportunities for increased growth,” continued Mr. Ferland. “We are on track to execute the spin in mid–summer, which we are confident will increase value for our customers and shareholders.”
Liquidity and Debt
The Company’s cash and investments position, net of restricted cash, was $325.4 million at the end of the fourth quarter of 2014, representing a decrease of $35.9 million compared to $361.3 million as of December 31, 2013. This consolidated cash position includes $199.0 million related to foreign operations. For the full year 2014, the Company generated $74.9 million in cash from operations and borrowed $300.0 million through its Credit Agreement, using these funds to repurchase $149.8 million of its common stock, pay dividends of $43.5 million and expand its industrial environmental business through the acquisition of MEGTEC for $142.8 million, net of acquired cash.
As of December 31, 2014, outstanding balances under the Credit Agreement included a $300.0 million term loan, $0.0 million borrowed under the revolving credit facility, and letters of credit issued under the revolving credit facility totaling $171.9 million, resulting in $828.1 million of revolver availability at the end of the fourth quarter. The Company believes it maintains adequate liquidity to fund operations, which could include increased working capital requirements to fund internal growth, R&D programs, capital distribution programs, and product and geographic expansion opportunities.
Full Year 2015 Outlook
Management believes that providing 2015 full-year consolidated EPS guidance, given the planned spin-off of the Power Generation business mid-year, would not be insightful. Rather, the Company is providing the following segment guidance for 2015:
- Nuclear Operations revenues consistent with record levels achieved in the last two years and expected operating margin in the high teens;
- Technical Services operating income in the range of $15 to $20 million, mostly from equity income;
- Nuclear Energy revenues in the $150 to $175 million range with operating margins in the low single digits;
- Targeted mPower spending of approximately $15 million annually;
- Power Generation’s revenue is expected to increase approximately 15%, through a combination of core growth and the full year of the MEGTEC acquisition. Power Generation’s operating margin is anticipated to increase to approximately 8%, net of MEGTEC amortization;
- Adjusted tax rate for 2015 is expected to be in the range of 32% to 34%; and
- Approximately 60% of annual earnings are expected to be realized in the third and fourth quarters.
Additional guidance for the two separate entities will be provided in the weeks preceding the spin-off planned for mid-summer 2015.
Conference Call to Discuss Fourth Quarter 2014 Results
Date: Thursday, February 26, 2015, at 8:30 a.m. EST
Live Webcast: Investor Relations section of website atwww.babcock.com
Forward-Looking Statements
B&W cautions that this release contains forward-looking statements, including, without limitation, statements relating to expected benefits associated with the planned spin-off of our Power Generation business; bookings, to the extent they may be viewed as an indicator of future revenues; and our 2015 outlook for B&W’s segments. These forward-looking statements are based on management’s current expectations and involve a number of risks and uncertainties, including, among other things, the proposed spin-off not being completed as anticipated or at all; delays or other difficulties in completing the spin-off, including the inability to satisfy the conditions for its completion; disruptions experienced with customers and suppliers; the inability of either business to successfully operate independently; the inability to retain key personnel; 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, 2014 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.
Investor Contact: Media Contact:
Jenny L. Apker Aimee Mills
Vice President, Treasurer and Investor Relations Media Relations Lead
704-625-4944 [email protected] 980-365-4583 [email protected]
EXHIBIT 1
THE BABCOCK & WILCOX COMPANY
RECONCILIATION OF NON-GAAP OPERATING INCOME AND EARNINGS PER SHARE*
Three Months Ended December 31, 2014
GAAP | Spin Costs | Litigation | Centrus Impairment | Pension & OPEB MTM(Gain) / Loss | Restructuring & Acquisitions | Non-GAAP |
$ (156.5) | $ 6.1 | $ 16.1 | – | $ 230.1 | $ 12.6 | $ 108.3 |
| (8.5) | – | – | 4.2 | 0.5 | – | (3.8) |
| 61.5 | (2.3) | (4.3) | – | (86.7) | (4.3) | (36.1) |
| $ (103.6) | $ 3.7 | $ 11.8 | $ 4.2 | $ 143.8 | $ 8.3 | $ 68.4 |
| 0.3 | – | – | – | – | – | 0.3 |
| $ (103.3) | $ 3.7 | $ 11.8 | $ 4.2 | $ 143.8 | $ 8.3 | $ 68.6 |
$ (0.97) | $ 0.04 | $ 0.11 | $ 0.04 | $ 1.35 | $ 0.08 | $ 0.64 |
| 37.2% | 34.6% |
GAAP | Spin Costs | Litigation | Centrus Impairment | Pension & OPEB MTM(Gain) / Loss | Restructuring & Acquisitions | Non-GAAP |
$ (156.5) | $ 6.1 | $ 16.1 | – | $ 230.1 | $ 12.6 | $ 108.3 |
| (8.5) | – | – | 4.2 | 0.5 | – | (3.8) |
| 61.5 | (2.3) | (4.3) | – | (86.7) | (4.3) | (36.1) |
| $ (103.6) | $ 3.7 | $ 11.8 | $ 4.2 | $ 143.8 | $ 8.3 | $ 68.4 |
| 0.3 | – | – | – | – | – | 0.3 |
| $ (103.3) | $ 3.7 | $ 11.8 | $ 4.2 | $ 143.8 | $ 8.3 | $ 68.6 |
$ (0.97) | $ 0.04 | $ 0.11 | $ 0.04 | $ 1.35 | $ 0.08 | $ 0.64 |
| 37.2% | 34.6% |
Operating Income
Other Income / (Expense) Income Tax (Expense) / Benefit Net Income (Loss)
Net Loss Attributable to Non-Controlling Interest
Net Income (Loss) Attributable to The Babcock & Wilcox Company
Diluted Earnings per Common Share
Tax Rate
Three Months Ended December 31, 2013
GAAP | One-time tax (Benefit) / Charges | USECImpairment Charges | Pension & OPEB MTM(Gain) / Loss | Restructuring & Acquisitions | Non-GAAP |
$ 295.3 | $ – | $ – | $ (222.7) | $ 14.1 | $ 86.7 |
| (20.0) | – | 19.1 | (0.2) | – | (1.0) |
| (114.4) | 6.3 | – | 80.4 | (4.2) | (31.8) |
| $ 161.0 | $ 6.3 | $ 19.1 | $ (142.5) | $ 9.9 | 53.8 |
| 4.6 | – | – | – | – | 4.6 |
| $ 165.6 | $ 6.3 | $ 19.1 | $ (142.5) | $ 9.9 | 58.4 |
$ 1.48 | $ 0.06 | $ 0.17 | $ (1.28) | $ 0.09 | $ 0.52 |
| 41.5% | 37.2% |
GAAP | One-time tax (Benefit) / Charges | USECImpairment Charges | Pension & OPEB MTM(Gain) / Loss | Restructuring & Acquisitions | Non-GAAP |
$ 295.3 | $ – | $ – | $ (222.7) | $ 14.1 | $ 86.7 |
| (20.0) | – | 19.1 | (0.2) | – | (1.0) |
| (114.4) | 6.3 | – | 80.4 | (4.2) | (31.8) |
| $ 161.0 | $ 6.3 | $ 19.1 | $ (142.5) | $ 9.9 | 53.8 |
| 4.6 | – | – | – | – | 4.6 |
| $ 165.6 | $ 6.3 | $ 19.1 | $ (142.5) | $ 9.9 | 58.4 |
$ 1.48 | $ 0.06 | $ 0.17 | $ (1.28) | $ 0.09 | $ 0.52 |
| 41.5% | 37.2% |
Operating Income (Loss) Other Income / (Expense)
Income Tax (Expense) / Benefit Net Income (Loss)
Net Loss Attributable to Non-Controlling Interest
Net Income (Loss) Attributable to The Babcock & Wilcox Company
Diluted Earnings per Common Share
Tax Rate
Twelve Months Ended December 31, 2014
GAAP | Spin Costs | Litigation | Centrus Gain, net Impairment | Pension & OPEB MTM(Gain) / Loss | Restructuring & Acquisitions | Non-GAAP |
$ (2.6) | $ 6.1 | $ 16.1 | $ – | $ 241.2 | $ 57.7 | $ 318.4 |
| 8.1 | – | – | (14.4) | 0.5 | – | (5.8) |
| 16.0 | (2.3) | (4.3) | – | (89.6) | (19.6) | (99.8) |
| $ 21.5 | $ 3.7 | $ 11.8 | $ (14.4) | $ 152.1 | $ 38.1 | $ 212.8 |
| 7.9 | – | – | – | – | – | 7.9 |
| $ 29.4 | $ 3.7 | $ 11.8 | $ (14.4) | $ 152.1 | $ 38.1 | $ 220.7 |
$ 0.27 | $ 0.03 | $ 0.11 | $ (0.13) | $ 1.40 | $ 0.35 | $ 2.03 |
| (292.6%) | 31.9% |
GAAP | Spin Costs | Litigation | Centrus Gain, net Impairment | Pension & OPEB MTM(Gain) / Loss | Restructuring & Acquisitions | Non-GAAP |
$ (2.6) | $ 6.1 | $ 16.1 | $ – | $ 241.2 | $ 57.7 | $ 318.4 |
| 8.1 | – | – | (14.4) | 0.5 | – | (5.8) |
| 16.0 | (2.3) | (4.3) | – | (89.6) | (19.6) | (99.8) |
| $ 21.5 | $ 3.7 | $ 11.8 | $ (14.4) | $ 152.1 | $ 38.1 | $ 212.8 |
| 7.9 | – | – | – | – | – | 7.9 |
| $ 29.4 | $ 3.7 | $ 11.8 | $ (14.4) | $ 152.1 | $ 38.1 | $ 220.7 |
$ 0.27 | $ 0.03 | $ 0.11 | $ (0.13) | $ 1.40 | $ 0.35 | $ 2.03 |
| (292.6%) | 31.9% |
Operating Income
Other Income / (Expense) Income Tax (Expense) / Benefit Net Income (Loss)
Net Loss Attributable to Non-Controlling Interest
Net Income (Loss) Attributable to The Babcock & Wilcox Company
Diluted Earnings per Common Share
Tax Rate
Twelve Months Ended December 31, 2013
GAAP | One-time tax (Benefit) / Charges | USECImpairment Charges | Pension & OPEB MTM(Gain) / Loss | Restructuring & Acquisitions | Non-GAAP |
$ 536.4 | $ – | $ – | $ (222.7) | $ 39.6 | $ 353.2 |
| (19.2) | – | 19.1 | (0.2) | – | (0.2) |
| (184.6) | 6.3 | – | 80.4 | (13.2) | (111.1) |
| $ 332.6 | $ 6.3 | $ 19.1 | $ (142.5) | $ 26.4 | 241.9 |
| 13.5 | – | – | – | – | 13.5 |
| $ 346.1 | $ 6.3 | $ 19.1 | $ (142.5) | $ 26.4 | 255.3 |
$ 3.07 | $ 0.06 | $ 0.17 | $ (1.26) | $ 0.23 | $ 2.27 |
| 35.7% | 31.5% |
GAAP | One-time tax (Benefit) / Charges | USECImpairment Charges | Pension & OPEB MTM(Gain) / Loss | Restructuring & Acquisitions | Non-GAAP |
$ 536.4 | $ – | $ – | $ (222.7) | $ 39.6 | $ 353.2 |
| (19.2) | – | 19.1 | (0.2) | – | (0.2) |
| (184.6) | 6.3 | – | 80.4 | (13.2) | (111.1) |
| $ 332.6 | $ 6.3 | $ 19.1 | $ (142.5) | $ 26.4 | 241.9 |
| 13.5 | – | – | – | – | 13.5 |
| $ 346.1 | $ 6.3 | $ 19.1 | $ (142.5) | $ 26.4 | 255.3 |
$ 3.07 | $ 0.06 | $ 0.17 | $ (1.26) | $ 0.23 | $ 2.27 |
| 35.7% | 31.5% |
Operating Income
Other Income / (Expense) Income Tax (Expense) / Benefit Net Income (Loss)
Net Loss Attributable to Non-Controlling Interest
Net Income (Loss) Attributable to The Babcock & Wilcox Company
Diluted Earnings per Common Share
Tax Rate
* May not foot due to rounding.
The Company 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.
EXHIBIT 2
THE BABCOCK & WILCOX COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
| December 31, | ||
| 2014 | 2013 | |
| (In thousands) | ||
| Current Assets: | ||
| Cash and cash equivalents | $ 312,969 | $ 346,116 |
| Restricted cash and cash equivalents | 54,497 | 45,945 |
| Investments | 4,837 | 10,748 |
| Accounts receivable – trade, net | 430,600 | 360,323 |
| Accounts receivable – other | 44,299 | 45,480 |
| Contracts in progress | 398,373 | 370,820 |
| Inventories | 108,637 | 113,058 |
| Deferred income taxes | 73,479 | 97,170 |
| Other current assets | 46,111 | 47,764 |
Total Current Assets | 1,473,802 | 1,437,424 |
Property, Plant and Equipment | 1,167,581 | 1,126,683 |
| Less accumulated depreciation | 730,946 | 679,604 |
Net Property, Plant and Equipment | 436,635 | 447,079 |
Investments | 7,606 | 4,426 |
Goodwill | 379,192 | 281,708 |
Deferred Income Taxes | 245,766 | 127,076 |
Investments in Unconsolidated Affiliates | 140,504 | 184,831 |
Intangible Assets | 110,873 | 81,521 |
Other Assets | 62,558 | 45,088 |
TOTAL | $ 2,856,936 | $ 2,609,153 |
CONDENSED CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS’ EQUITY
| December 31, | |||
| 2014 | 2013 | ||
| (In thousands) | |||
| Current Liabilities: | |||
| Notes payable and current maturities of long-term debt | $ 18,215 | $ 4,671 | |
| Accounts payable | 247,629 | 319,774 | |
| Accrued employee benefits | 124,897 | 163,833 | |
| Accrued liabilities – other | 97,207 | 58,192 | |
| Advance billings on contracts | 255,535 | 317,771 | |
| Accrued warranty expense | 53,624 | 56,436 | |
| Income taxes payable | 22,529 | 6,551 | |
Total Current Liabilities | 819,636 | 927,228 | |
Long-term Debt | 285,000 | 225 | |
Accumulated Postretirement Benefit Obligation | 58,213 | 43,194 | |
Environmental Liabilities | 56,259 | 53,391 | |
Pension Liability | 563,990 | 336,878 | |
Other Liabilities | 59,637 | 65,296 | |
Commitments and Contingencies | |||
| Stockholders’ Equity: | |||
| Common stock, par value $0.01 per share, authorized 325,000,000 shares; issued 121,604,332 and 120,536,910 shares at December 31,2014 and December 31, 2013, respectively | 1,216 | 1,205 | |
| Preferred stock, par value $0.01 per share, authorized 75,000,000 shares; no shares issued | – | – | |
| Capital in excess of par value | 775,393 | 747,189 | |
| Retained earnings | 642,489 | 656,916 | |
| Treasury stock at cost, 14,915,776 and 10,068,731 shares at December 31, 2014 and December 31, 2013, respectively | (423,990) | (268,971) | |
| Accumulated other comprehensive income | 3,596 | 28,348 | |
| Stockholders’ Equity – The Babcock & Wilcox Company | 998,704 | 1,164,687 | |
| Noncontrolling interest | 15,497 | 18,254 | |
| Total Stockholders’ Equity | 1,014,201 | 1,182,941 | |
| TOTAL | $ 2,856,936 | $ 2,609,153 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended | Twelve Months Ended | |||
| December 31, | December 31, | |||
| 2014 | 2013 | 2014 | 2013 | |
| (Unaudited) | ||||
| (In thousands, except share and per share amounts) | ||||
| Revenues | $ 837,094 | $ 802,815 | $ 2,923,019 | $ 3,269,208 |
Costs and Expenses: | ||||
| Cost of operations | 840,147 | 417,514 | 2,409,376 | 2,301,648 |
| Research and development costs | 9,941 | 26,256 | 73,234 | 79,226 |
| Losses (gains) on asset disposals and impairments, net | 229 | (296) | 1,081 | 1,049 |
| Selling, general and administrative expenses | 137,025 | 66,269 | 442,615 | 379,382 |
| Special charges for restructuring activities | 12,288 | 14,095 | 41,091 | 39,599 |
| Total Costs and Expenses | 999,630 | 523,838 | 2,967,397 | 2,800,904 |
Equity in Income of Investees | 5,996 | 16,345 | 41,756 | 68,058 |
Operating Income | (156,540) | 295,322 | (2,622) | 536,362 |
Other Income (Expense): | ||||
| Interest income | 152 | 308 | 1,028 | 1,443 |
| Interest expense | (2,781) | (877) | (7,579) | (3,115) |
| Other – net | (5,888) | (19,395) | 14,639 | (17,517) |
| Total Other Income (Expense) | (8,517) | (19,964) | 8,088 | (19,189) |
Income before Provision for Income Taxes | (165,057) | 275,358 | 5,466 | 517,173 |
| Provision for Income Taxes | (61,465) | 114,366 | (15,991) | 184,583 |
Net Income | $ (103,592) | $ 160,992 | $ 21,457 | $ 332,590 |
Net Loss Attributable to Noncontrolling Interest | 285 | 4,596 | 7,931 | 13,488 |
Net Income Attributable to The Babcock & Wilcox Company | $ (103,307) | $ 165,588 | $ 29,388 | $ 346,078 |
Earnings per Common Share: | ||||
| Basic: | ||||
| Net Income Attributable to The Babcock & Wilcox Company | $ (0.97) | $ 1.50 | $ 0.27 | $ 3.09 |
| Diluted: | ||||
| Net Income Attributable to The Babcock & Wilcox Company | $ (0.97) | $ 1.48 | $ 0.27 | $ 3.07 |
Shares used in the computation of earnings per share: | ||||
| Basic | 106,597,411 | 110,679,494 | 108,477,262 | 111,901,750 |
| Diluted | 106,597,411 | 111,592,570 | 108,761,092 | 112,685,417 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended December 31, | |||
| 2014 | 2013 | 2012 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | (In thousands) | ||
| Net Income | $ 21,457 | $ 332,590 | $ 217,557 |
| Non-cash items included in net income: | |||
| Depreciation and amortization | 105,798 | 70,525 | 69,697 |
| Income of investees, net of dividends | 18,763 | 11,537 | (15,115) |
| Losses on asset disposals and impairments | 12,543 | 1,049 | 1,419 |
| Impairment of USEC investment | – | 19,139 | 27,000 |
| Gain on exchange of USEC investment | (18,647) | – | – |
| In-kind research and development costs | 5,831 | 15,794 | 17,942 |
| Provision for (benefit from) deferred taxes | (95,697) | 94,068 | 43,038 |
| Recognition of (gains) losses for pension and postretirement plans | 244,136 | (219,915) | 35,480 |
| Stock-based compensation and thrift plan expense | 23,461 | 29,006 | 31,797 |
| Excess tax benefits from stock-based compensation | (588) | (177) | (1,571) |
| Changes in assets and liabilities, net of effects from acquisitions: | |||
| Accounts receivable | (50,080) | 19,726 | (52,034) |
| Accounts payable | (81,044) | 54,895 | 30,391 |
| Contracts in progress and advance billings on contracts | (98,400) | (210,582) | 32,527 |
| Inventories | 5,044 | 11,971 | (16,448) |
| Income taxes | (1,259) | (6,364) | 5,522 |
| Accrued and other current liabilities | 18,557 | (28,499) | (30,553) |
| Pension liability, accrued postretirement benefit obligation and employee benefits | (42,264) | (68,961) | (168,004) |
| Other, net | 7,314 | 12,084 | (43,718) |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 74,925 | 137,886 | 184,927 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||
| Decrease (increase) in restricted cash and cash equivalents | (8,552) | 15,016 | 229 |
| Purchases of property, plant and equipment | (76,029) | (64,950) | (86,635) |
| Acquisition of businesses, net of cash acquired | (127,703) | – | (318) |
| Purchase of intangible assets | (722) | (2,200) | – |
| Purchases of securities | (23,622) | (90,836) | (268,929) |
| Sales and maturities of securities | 40,725 | 168,879 | 247,649 |
| Proceeds from asset disposals | 997 | 1,028 | 580 |
| Proceeds from sale of an unconsolidated affiliate | – | – | 2,091 |
| Investment in equity and cost method investees | (4,900) | (6,884) | (6,064) |
| NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (199,806) | 20,053 | (111,397) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||
| Payment of short-term borrowing and long-term debt | (4,539) | (211) | (4,643) |
| Payment of debt issuance costs | (5,473) | – | (4,902) |
| Borrowings under short-term arrangements | 2,967 | 484 | 3,815 |
| Borrowings under Credit Agreement | 1,156,100 | – | – |
| Repayments under Credit Agreement | (856,100) | – | – |
| Repurchase of common shares | (149,774) | (157,093) | (96,774) |
| Dividends paid to common shareholders | (43,469) | (38,011) | (9,485) |
| Exercise of stock options | 4,604 | 4,275 | 2,926 |
| Excess tax benefits from stock-based compensation | 588 | 177 | 1,571 |
| Other | (305) | (499) | (514) |
| NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | 104,599 | (190,878) | (108,006) |
| EFFECTS OF EXCHANGE RATE CHANGES ON CASH | (12,865) | (4,492) | 2,814 |
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (33,147) | (37,431) | (31,662) |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 346,116 | 383,547 | 415,209 |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 312,969 | $ 346,116 | $ 383,547 |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
| Cash paid during the period for: | |||
| Interest | $ 6,061 | $ 1,790 | $ 2,049 |
| Income taxes (net of refunds) | $ 74,734 | $ 86,924 | $ 83,062 |
| SCHEDULE OF NONCASH INVESTING ACTIVITY: | |||
| Accrued capital expenditures included in accounts payable | $ 7,219 | $ 8,141 | $ 7,902 |
| THE BABCOCK & WILCOX COMPANY | ||||
| BUSINESS SEGMENT INFORMATION | ||||
Three Months Ended | Twelve Months Ended | |||
| December 31, | December 31, | |||
| 2014 | 2013 | 2014 | 2013 | |
| (Unaudited) | ||||
| (In thousands) | ||||
| REVENUES: | ||||
| Power Generation | $ 444,556 | $ 408,037 | $ 1,486,029 | $ 1,767,651 |
| Nuclear Operations | 343,811 | 293,438 | 1,220,952 | 1,167,683 |
| Technical Services | 14,128 | 26,351 | 84,834 | 104,254 |
| Nuclear Energy | 40,485 | 104,686 | 154,721 | 283,857 |
| mPower | – | 543 | 278 | 1,523 |
| Adjustments and Eliminations | (5,886) | (30,240) | (23,795) | (55,760) |
TOTAL | $ 837,094 | $ 802,815 | $ 2,923,019 | $ 3,269,208 |
SEGMENT INCOME: | ||||
| Power Generation | $ 37,540 | $ 53,624 | $ 98,557 | $ 155,837 |
| Nuclear Operations | 90,433 | 53,575 | 270,536 | 237,855 |
| Technical Services | 385 | 10,422 | 35,203 | 58,234 |
| Nuclear Energy | (18,584) | (1,560) | (23,211) | 8,641 |
| mPower | (5,164) | (27,677) | (68,946) | (81,304) |
| SUBTOTAL | 104,610 | 88,384 | 312,139 | 379,263 |
| Corporate | (18,785) | (1,704) | (32,514) | (26,039) |
| Special Charges for Restructuring Activities | (12,288) | (14,095) | (41,091) | (39,599) |
| Mark to Market Adjustment | (230,077) | 222,737 | (241,156) | 222,737 |
| TOTAL | $ (156,540) | $ 295,322 | $ (2,622) | $ 536,362 |
EQUITY IN INCOME (LOSS) OF INVESTEES: | ||||
| Power Generation | $ 3,023 | $ 7,792 | $ 8,682 | $ 18,388 |
| Nuclear Operations | – | – | – | – |
| Technical Services | 2,973 | 8,686 | 33,042 | 50,281 |
| Nuclear Energy | – | (133) | 32 | (611) |
| mPower | – | – | – | – |
TOTAL | $ 5,996 | $ 16,345 | $ 41,756 | $ 68,058 |
PENSION EXPENSE (INCOME): | ||||
| Power Generation | $ (249) | $ 520 | $ 1,133 | $ 2,760 |
| Nuclear Operations | 715 | 1,307 | 3,331 | 4,706 |
| Technical Services | 64 | 72 | 208 | 288 |
| Nuclear Energy | 360 | 758 | 3,855 | 3,796 |
| mPower | – | – | – | – |
| Corporate | 701 | 89 | 2,160 | 1,604 |
| Mark to Market Adjustment | 217,974 | (202,442) | 229,053 | (202,442) |
TOTAL | $ 219,565 | $ (199,696) | $ 239,740 | $ (189,288) |
| DEPRECIATION AND AMORTIZATION: | ||||
| Power Generation | $ 9,468 | $ 7,373 | $ 30,661 | $ 23,892 |
| Nuclear Operations | 33,487 | 6,793 | 54,524 | 26,975 |
| Technical Services | 2 | 41 | 3 | 185 |
| Nuclear Energy | 1,596 | 1,688 | 6,564 | 6,520 |
| mPower | 262 | 189 | 974 | 554 |
| Corporate | 3,583 | 3,100 | 13,072 | 12,399 |
TOTAL | $ 48,398 | $ 19,184 | $ 105,798 | $ 70,525 |
RESEARCH AND DEVELOPMENT, NET: | ||||
| Power Generation | $ 5,688 | $ 4,915 | $ 18,483 | $ 21,043 |
| Nuclear Operations | 12 | 2 | 17 | 69 |
| Technical Services | 15 | 11 | 39 | 67 |
| Nuclear Energy | 172 | 511 | 1,684 | 3,590 |
| mPower | 4,054 | 20,817 | 53,011 | 54,457 |
TOTAL | $ 9,941 | $ 26,256 | $ 73,234 | $ 79,226 |
CAPITAL EXPENDITURES: | ||||
| Power Generation | $ 4,563 | $ 1,877 | $ 15,449 | $ 15,280 |
| Nuclear Operations | 10,567 | 9,973 | 34,777 | 31,572 |
| Technical Services | 66 | 32 | 66 | 98 |
| Nuclear Energy | 1,269 | 1,365 | 14,358 | 5,506 |
| mPower | – | 1,109 | 1,983 | 2,854 |
| Corporate | 3,687 | 5,306 | 9,396 | 9,640 |
TOTAL | $ 20,152 | $ 19,662 | $ 76,029 | $ 64,950 |
BACKLOG: | ||||
| Power Generation | $ 2,246,666 | $ 2,072,132 | $ 2,246,666 | $ 2,072,132 |
| Nuclear Operations | 2,778,043 | 2,369,268 | 2,778,043 | 2,369,268 |
| Technical Services | 2,691 | 5,031 | 2,691 | 5,031 |
| Nuclear Energy | 264,992 | 141,832 | 264,992 | 141,832 |
| mPower | – | 1,670 | – | 1,670 |
TOTAL | $ 5,292,392 | $ 4,589,933 | $ 5,292,392 | $ 4,589,933 |
BOOKINGS: | ||||
| Power Generation | $ 556,755 | $ 277,833 | $ 1,568,113 | $ 1,319,185 |
| Nuclear Operations | 742,372 | 130,076 | 1,619,806 | 546,314 |
| Technical Services | 12,281 | 14,845 | 82,436 | 100,965 |
| Nuclear Energy | 29,706 | 60,490 | 268,569 | 143,329 |
| mPower | – | (8) | – | (67) |
TOTAL | $ 1,341,114 | $ 483,236 | $ 3,538,924 | $ 2,109,726 |
