x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE | 47-2783641 | |
(State or other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
THE HARRIS BUILDING | ||
13024 BALLANTYNE CORPORATE PLACE, SUITE 700 | ||
CHARLOTTE, NORTH CAROLINA | 28277 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |||
Emerging growth company | ¨ |
PAGE | ||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(in thousands, except per share amounts) | 2018 | 2017 | 2018 | 2017 | |||||||||
Revenues | $ | 291,337 | $ | 306,231 | $ | 544,513 | $ | 654,303 | |||||
Costs and expenses: | |||||||||||||
Cost of operations | 332,403 | 375,824 | 609,748 | 674,282 | |||||||||
Selling, general and administrative expenses | 52,248 | 57,370 | 114,746 | 114,056 | |||||||||
Goodwill impairment | 37,540 | — | 37,540 | — | |||||||||
Restructuring activities and spin-off transaction costs | 3,826 | 1,952 | 10,688 | 4,984 | |||||||||
Research and development costs | 1,287 | 2,437 | 2,429 | 4,230 | |||||||||
Loss on asset disposals, net | 1,384 | 2 | 1,384 | 2 | |||||||||
Total costs and expenses | 428,688 | 437,585 | 776,535 | 797,554 | |||||||||
Equity in income and impairment of investees | — | (15,232 | ) | (11,757 | ) | (14,614 | ) | ||||||
Operating loss | (137,351 | ) | (146,586 | ) | (243,779 | ) | (157,865 | ) | |||||
Other income (expense): | |||||||||||||
Interest income | 107 | 125 | 260 | 237 | |||||||||
Interest expense | (11,877 | ) | (6,283 | ) | (25,329 | ) | (7,986 | ) | |||||
Loss on debt extinguishment | (49,241 | ) | — | (49,241 | ) | — | |||||||
Benefit plans, net | 7,086 | 5,249 | 14,083 | 9,462 | |||||||||
Foreign exchange | (20,198 | ) | 2,294 | (17,741 | ) | 2,339 | |||||||
Other – net | (131 | ) | 43 | 266 | 78 | ||||||||
Total other income (expense) | (74,254 | ) | 1,428 | (77,702 | ) | 4,130 | |||||||
Loss before income tax expense (benefit) | (211,605 | ) | (145,158 | ) | (321,481 | ) | (153,735 | ) | |||||
Income tax expense (benefit) | (1,934 | ) | 3,458 | 5,029 | 346 | ||||||||
Loss from continuing operations | (209,671 | ) | (148,616 | ) | (326,510 | ) | (154,081 | ) | |||||
Loss from discontinued operations, net of tax | (55,932 | ) | (2,234 | ) | (59,428 | ) | (3,610 | ) | |||||
Net loss | (265,603 | ) | (150,850 | ) | (385,938 | ) | (157,691 | ) | |||||
Net income attributable to noncontrolling interest | (165 | ) | (149 | ) | (263 | ) | (353 | ) | |||||
Net loss attributable to stockholders | $ | (265,768 | ) | $ | (150,999 | ) | $ | (386,201 | ) | $ | (158,044 | ) | |
Basic and diluted loss per share - continuing operations | $ | (1.68 | ) | $ | (3.05 | ) | $ | (3.85 | ) | $ | (3.16 | ) | |
Basic and diluted loss per share - discontinued operations | (0.44 | ) | (0.04 | ) | (0.70 | ) | (0.08 | ) | |||||
Basic and diluted loss per share | $ | (2.12 | ) | $ | (3.09 | ) | $ | (4.55 | ) | $ | (3.24 | ) | |
Shares used in the computation of earnings per share: | |||||||||||||
Basic and diluted | 125,207 | 48,854 | 84,921 | 48,797 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||
Net loss | $ | (265,603 | ) | $ | (150,850 | ) | $ | (385,938 | ) | $ | (157,691 | ) | |
Other comprehensive income (loss): | |||||||||||||
Currency translation adjustments (CTA), net of taxes | 8,517 | 6,757 | 11,740 | 12,174 | |||||||||
Reclassification adjustment for CTA gains included in net loss, net of taxes | — | — | (2,044 | ) | — | ||||||||
Derivative financial instruments: | |||||||||||||
Unrealized (gains) losses on derivative financial instruments | (602 | ) | (3,657 | ) | 999 | 2,244 | |||||||
Income taxes | (89 | ) | (1,453 | ) | 288 | (139 | ) | ||||||
Unrealized (gains) losses on derivative financial instruments, net of taxes | (513 | ) | (2,204 | ) | 711 | 2,383 | |||||||
Derivative financial instrument (gains) losses reclassified into net income | 489 | (1,550 | ) | (1,139 | ) | (6,448 | ) | ||||||
Income taxes | 108 | (892 | ) | (248 | ) | (1,947 | ) | ||||||
Reclassification adjustment for (gains) losses included in net loss, net of taxes | 381 | (658 | ) | (891 | ) | (4,501 | ) | ||||||
Benefit obligations: | |||||||||||||
Unrealized gains (losses) on benefit obligations | 112 | (97 | ) | 57 | (141 | ) | |||||||
Unrealized gains (losses) on benefit obligations, net of taxes | 112 | (97 | ) | 57 | (141 | ) | |||||||
Amortization of benefit plan benefits | (1,366 | ) | (789 | ) | (1,750 | ) | (1,662 | ) | |||||
Income taxes | 1,892 | 11 | 1,892 | 20 | |||||||||
Amortization of benefit plan benefits, net of taxes | (3,258 | ) | (800 | ) | (3,642 | ) | (1,682 | ) | |||||
Other | — | (20 | ) | (38 | ) | 14 | |||||||
Other comprehensive income | 5,239 | 2,978 | 5,893 | 8,247 | |||||||||
Total comprehensive loss | (260,364 | ) | (147,872 | ) | (380,045 | ) | (149,444 | ) | |||||
Comprehensive income (loss) attributable to noncontrolling interest | (125 | ) | 164 | (198 | ) | (26 | ) | ||||||
Comprehensive loss attributable to stockholders | $ | (260,489 | ) | $ | (147,708 | ) | $ | (380,243 | ) | $ | (149,470 | ) |
(in thousands, except per share amount) | June 30, 2018 | December 31, 2017 | ||||
Cash and cash equivalents | $ | 28,512 | $ | 43,717 | ||
Restricted cash and cash equivalents | 32,302 | 25,980 | ||||
Accounts receivable – trade, net | 236,718 | 252,508 | ||||
Accounts receivable – other | 37,807 | 78,813 | ||||
Contracts in progress | 149,040 | 135,811 | ||||
Inventories | 67,274 | 72,917 | ||||
Other current assets | 37,787 | 34,039 | ||||
Current assets of discontinued operations | 83,331 | 88,472 | ||||
Total current assets | 672,771 | 732,257 | ||||
Net property, plant and equipment | 105,765 | 114,707 | ||||
Goodwill | 47,179 | 85,678 | ||||
Deferred income taxes | 99,080 | 97,467 | ||||
Investments in unconsolidated affiliates | 8,421 | 43,278 | ||||
Intangible assets | 36,368 | 42,065 | ||||
Other assets | 28,013 | 25,741 | ||||
Noncurrent assets of discontinued operations | 106,510 | 181,036 | ||||
Total assets | $ | 1,104,107 | $ | 1,322,229 | ||
Foreign revolving credit facilities | $ | 4,124 | $ | 9,173 | ||
Second lien term loan facility | — | 160,141 | ||||
Accounts payable | 191,664 | 205,396 | ||||
Accrued employee benefits | 27,072 | 27,058 | ||||
Advance billings on contracts | 149,768 | 171,997 | ||||
Accrued warranty expense | 53,138 | 33,514 | ||||
Other accrued liabilities | 88,351 | 89,549 | ||||
Current liabilities of discontinued operations | 57,316 | 47,499 | ||||
Total current liabilities | 571,433 | 744,327 | ||||
U.S. revolving credit facility | 196,300 | 94,300 | ||||
Pension and other accumulated postretirement benefit liabilities | 235,369 | 250,002 | ||||
Other noncurrent liabilities | 37,214 | 29,897 | ||||
Noncurrent liabilities of discontinued operations | 8,236 | 13,000 | ||||
Total liabilities | 1,048,552 | 1,131,526 | ||||
Commitments and contingencies | ||||||
Stockholders' equity: | ||||||
Common stock, par value $0.01 per share, authorized 200,000 shares; issued and outstanding 168,660 and 44,065 shares at June 30, 2018 and December 31, 2017, respectively | 1,746 | 499 | ||||
Capital in excess of par value | 1,045,901 | 800,968 | ||||
Treasury stock at cost, 5,830 and 5,681 shares at June 30, 2018 and December 31, 2017, respectively | (105,531 | ) | (104,785 | ) | ||
Retained deficit | (878,823 | ) | (492,150 | ) | ||
Accumulated other comprehensive loss | (16,536 | ) | (22,429 | ) | ||
Stockholders' equity attributable to shareholders | 46,757 | 182,103 | ||||
Noncontrolling interest | 8,798 | 8,600 | ||||
Total stockholders' equity | 55,555 | 190,703 | ||||
Total liabilities and stockholders' equity | $ | 1,104,107 | $ | 1,322,229 |
Six Months Ended June 30, | |||||||
(in thousands) | 2018 | 2017 | |||||
Cash flows from operating activities: | |||||||
Net loss | $ | (385,938 | ) | $ | (157,691 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization of long-lived assets | 16,938 | 21,465 | |||||
Amortization of debt issuance costs and debt discount | 7,236 | 764 | |||||
Loss on debt extinguishment | 49,241 | — | |||||
Goodwill impairment of discontinued operations | 72,309 | — | |||||
Goodwill impairment | 37,540 | — | |||||
Income from equity method investees | (6,605 | ) | (3,579 | ) | |||
Other than temporary impairment of equity method investment in TBWES | 18,362 | 18,193 | |||||
Losses on asset disposals and impairments | 1,934 | 114 | |||||
Reserve for claims receivable | 15,523 | — | |||||
Provision for (benefit from) deferred income taxes | (1,477 | ) | (1,326 | ) | |||
Mark to market gains and prior service cost amortization for pension and postretirement plans | (1,149 | ) | (600 | ) | |||
Stock-based compensation, net of associated income taxes | 1,030 | 6,522 | |||||
Changes in assets and liabilities | |||||||
Accounts receivable | 40,641 | 6,343 | |||||
Contracts in progress and advance billings on contracts | (30,494 | ) | 6,704 | ||||
Inventories | 5,925 | 3,381 | |||||
Income taxes | (4,036 | ) | (899 | ) | |||
Accounts payable | (15,103 | ) | 25,454 | ||||
Accrued and other current liabilities | 30,051 | 13,839 | |||||
Pension liabilities, accrued postretirement benefits and employee benefits | (17,579 | ) | (13,040 | ) | |||
Other, net | 15,008 | (7,331 | ) | ||||
Net cash from operating activities | (150,643 | ) | (81,687 | ) | |||
Cash flows from investing activities: | |||||||
Purchase of property, plant and equipment | (4,350 | ) | (7,741 | ) | |||
Acquisition of business, net of cash acquired | — | (52,547 | ) | ||||
Proceeds from sale of business | 5,105 | — | |||||
Proceeds from sale of equity method investment in a joint venture | 21,078 | — | |||||
Purchases of available-for-sale securities | (11,383 | ) | (20,328 | ) | |||
Sales and maturities of available-for-sale securities | 13,578 | 21,840 | |||||
Other, net | 189 | (90 | ) | ||||
Net cash from investing activities | 24,217 | (58,866 | ) |
Six Months Ended June 30, | |||||||
(in thousands) | 2018 | 2017 | |||||
Cash flows from financing activities: | |||||||
Borrowings under our U.S. revolving credit facility | 307,300 | 423,823 | |||||
Repayments of our U.S. revolving credit facility | (205,300 | ) | (315,493 | ) | |||
Repayments of our second lien term loan facility | (212,590 | ) | — | ||||
Borrowings under our foreign revolving credit facilities | — | 240 | |||||
Repayments of our foreign revolving credit facilities | (5,022 | ) | (2,157 | ) | |||
Proceeds from rights offering | 248,375 | — | |||||
Costs related to rights offering | (3,225 | ) | — | ||||
Debt issuance costs | (6,736 | ) | (1,422 | ) | |||
Shares of our common stock returned to treasury stock | (746 | ) | (873 | ) | |||
Other, net | — | (571 | ) | ||||
Net cash from financing activities | 122,056 | 103,547 | |||||
Effects of exchange rate changes on cash | (7,026 | ) | 4,049 | ||||
Net decrease in cash, cash equivalents and restricted cash | (11,396 | ) | (32,957 | ) | |||
Less net increase (decrease) in cash and cash equivalents of discontinued operations | (2,513 | ) | 167 | ||||
Net decrease in cash, cash equivalents and restricted cash of continuing operations | (8,883 | ) | (33,124 | ) | |||
Cash, cash equivalents and restricted cash of continuing operations, beginning of period | 69,697 | 115,196 | |||||
Cash, cash equivalents and restricted cash of continuing operations, end of period | $ | 60,814 | $ | 82,072 |
• | raised gross proceeds of $248.4 million on April 30, 2018 through a rights offering as described in Note 19 (the "Rights Offering"); |
• | repaid on May 4, 2018 the Second Lien Term Loan Facility described in Note 18, which will save approximately $25 million in annual interest payments and $30 million of annual interest expense; |
• | entered into an agreement on June 5, 2018 to sell our MEGTEC and Universal businesses for $130 million (subject to adjustment); |
• | entered into an agreement on August 9, 2018 to sell a subsidiary that holds two operations and maintenance contracts for waste-to-energy facilities in West Palm Beach, Florida for $45 million (subject to adjustment), as described in Note 25; |
• | sold our equity method investments in Babcock & Wilcox Beijing Company, Ltd. ("BWBC"), a joint venture in China, and Thermax Babcock & Wilcox Energy Solutions Private Limited ("TBWES"), a joint venture in India, and settled related contractual claims, resulting in proceeds of $21.1 million in the second quarter of 2018 and $15.0 million in July 2018, respectively; |
• | sold another non-core business for $5.1 million in the first quarter of 2018; |
• | initiated restructuring actions and other additional cost reductions in the second quarter of 2018 that are designed to save approximately $34 million annually; and |
• | entered into several waivers and amendments to avoid default to our U.S. Revolving Credit Facility as described in Note 17, the most recent of which is dated August 9, 2018. As part of this latest amendment, our lenders agreed to reduce the minimum liquidity required under the facility, which has the effect of increasing the amount we may borrow by up to $25 million. Other liquidity measures that must also be completed include: a) the receipt of $30 million in net proceeds from the Last Out Loan, for which a binding commitment letter with Vintage Capital Management LLC, a related party, was executed on August 9, 2018, which is fully backstopped by B. Riley FBR, Inc., a related party; and b) obtaining $25 million of written commitments for concessions from customers on the Renewable loss contracts through a combination of cash contributions, loans and forgiveness of indebtedness and performance obligations by September 30, 2018. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||
(in thousands, except per share amounts) | 2018 | 2017 | 2018 | 2017 | |||||||||
Loss from continuing operations | $ | (209,836 | ) | $ | (148,765 | ) | $ | (326,773 | ) | $ | (154,434 | ) | |
Loss from discontinued operations, net of tax | (55,932 | ) | (2,234 | ) | (59,428 | ) | (3,610 | ) | |||||
Net loss attributable to shareholders | $ | (265,768 | ) | $ | (150,999 | ) | $ | (386,201 | ) | $ | (158,044 | ) | |
Weighted average shares used to calculate basic and diluted earnings per share | 125,207 | 48,854 | 84,921 | 48,797 | |||||||||
Basic and diluted loss per share - continuing operations | $ | (1.68 | ) | $ | (3.05 | ) | $ | (3.85 | ) | $ | (3.16 | ) | |
Basic and diluted loss per share - discontinued operations | (0.44 | ) | (0.04 | ) | (0.70 | ) | (0.08 | ) | |||||
Basic and diluted loss per share | $ | (2.12 | ) | $ | (3.09 | ) | $ | (4.55 | ) | $ | (3.24 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||
Revenue | $ | 58,257 | $ | 43,598 | $ | 116,439 | $ | 86,630 | |||||
Cost of operations | $ | 45,521 | $ | 35,076 | $ | 90,189 | $ | 69,097 | |||||
Selling, general and administrative | $ | 7,597 | $ | 11,214 | $ | 17,024 | $ | 21,444 | |||||
Goodwill impairment | $ | 72,309 | $ | — | $ | 72,309 | $ | — | |||||
Restructuring charge | $ | — | $ | 151 | $ | — | $ | 151 | |||||
Research and development | $ | 390 | $ | 464 | $ | 756 | $ | 933 | |||||
Loss on asset disposal | $ | — | $ | 2 | $ | — | $ | 2 | |||||
Operating loss | $ | (67,560 | ) | $ | (3,309 | ) | $ | (63,839 | ) | $ | (4,997 | ) | |
Net loss | $ | (55,932 | ) | $ | (2,234 | ) | $ | (59,428 | ) | $ | (3,610 | ) |
(in thousands) | June 30, 2018 | December 31, 2017 | |||||
Cash and cash equivalents | $ | 10,437 | $ | 12,950 | |||
Accounts receivable – trade, net | 37,821 | 39,196 | |||||
Accounts receivable – other | (1,430 | ) | 157 | ||||
Contracts in progress | 25,514 | 25,409 | |||||
Inventories | 8,540 | 9,245 | |||||
Other current assets | 2,449 | 1,515 | |||||
Current assets of discontinued operations | 83,331 | 88,472 | |||||
Net property, plant and equipment | 26,234 | 27,224 | |||||
Goodwill | 46,411 | 118,720 | |||||
Deferred income taxes | 1,462 | 359 | |||||
Intangible assets | 32,364 | 34,715 | |||||
Other assets | 39 | 18 | |||||
Noncurrent assets of discontinued operations | 106,510 | 181,036 | |||||
Total assets of discontinued operations | $ | 189,841 | $ | 269,508 | |||
Accounts payable | 16,520 | 19,838 | |||||
Accrued employee benefits | 3,027 | 3,095 | |||||
Advance billings on contracts | 12,521 | 9,073 | |||||
Accrued warranty expense | 5,645 | 5,506 | |||||
Other accrued liabilities | 19,603 | 9,987 | |||||
Current liabilities of discontinued operations | 57,316 | 47,499 | |||||
Pension and other accumulated postretirement benefit liabilities | 6,231 | 6,388 | |||||
Other noncurrent liabilities | 2,005 | 6,612 | |||||
Noncurrent liabilities of discontinued operations | 8,236 | 13,000 | |||||
Total liabilities of discontinued operations | $ | 65,552 | $ | 60,499 |
Six Months Ended June 30, | ||||||
(in thousands) | 2018 | 2017 | ||||
Depreciation and amortization | $ | 3,036 | $ | 5,307 | ||
Goodwill impairment | $ | 72,309 | $ | — | ||
Provision for (benefit from) deferred income taxes | $ | (815 | ) | $ | (275 | ) |
Purchase of property, plant equipment | $ | 77 | $ | 486 | ||
Acquisition of Universal, net of cash acquired | $ | — | $ | (52,547 | ) |
• | Power segment: focused on the supply of and aftermarket services for steam-generating, environmental and auxiliary equipment for power generation and other industrial applications. |
• | Renewable segment: focused on the supply of steam-generating systems, environmental and auxiliary equipment for the waste-to-energy and biomass power generation industries. |
• | Industrial segment: focused on custom-engineered cooling systems for steam applications along with related aftermarket services. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||
Revenues: | |||||||||||||
Power segment | |||||||||||||
Retrofits & continuous emissions monitoring systems | $ | 69,344 | $ | 82,070 | $ | 131,327 | $ | 143,444 | |||||
New build utility and environmental | 42,194 | 44,859 | 55,041 | 97,550 | |||||||||
Aftermarket parts and field engineering services | 63,299 | 62,448 | 136,372 | 137,581 | |||||||||
Industrial steam generation | 28,464 | 41,940 | 43,370 | 64,813 | |||||||||
Eliminations | (5,549 | ) | (17,561 | ) | (9,232 | ) | (33,336 | ) | |||||
197,752 | 213,756 | 356,878 | 410,052 | ||||||||||
Renewable segment | |||||||||||||
Renewable new build and services | 40,077 | 32,130 | 84,788 | 121,002 | |||||||||
Operations and maintenance | 14,925 | 15,944 | 30,172 | 32,608 | |||||||||
55,002 | 48,074 | 114,960 | 153,610 | ||||||||||
Industrial segment | |||||||||||||
New build cooling systems | 33,699 | 30,532 | 62,744 | 66,906 | |||||||||
Aftermarket cooling system services | 12,316 | 16,100 | 20,015 | 28,911 | |||||||||
46,015 | 46,632 | 82,759 | 95,817 | ||||||||||
Eliminations | (7,432 | ) | (2,231 | ) | (10,084 | ) | (5,176 | ) | |||||
$ | 291,337 | $ | 306,231 | $ | 544,513 | $ | 654,303 |
Three Months ended June 30, | Six Months Ended June 30, | ||||||||||||
(in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||
Gross profit (loss)(1): | |||||||||||||
Power segment | $ | 30,011 | $ | 43,852 | $ | 60,876 | $ | 81,562 | |||||
Renewable segment | (69,329 | ) | (110,894 | ) | (119,778 | ) | (100,300 | ) | |||||
Industrial segment | 79 | 187 | (2,672 | ) | 4,886 | ||||||||
Intangible amortization expense included in cost of operations | (1,827 | ) | (2,738 | ) | (3,661 | ) | (6,127 | ) | |||||
(41,066 | ) | (69,593 | ) | (65,235 | ) | (19,979 | ) | ||||||
Selling, general and administrative ("SG&A") expenses | (52,090 | ) | (57,272 | ) | (114,351 | ) | (113,852 | ) | |||||
Goodwill impairment | (37,540 | ) | — | (37,540 | ) | — | |||||||
Restructuring activities and spin-off transaction costs | (3,826 | ) | (1,952 | ) | (10,688 | ) | (4,984 | ) | |||||
Research and development costs | (1,287 | ) | (2,437 | ) | (2,429 | ) | (4,230 | ) | |||||
Intangible amortization expense included in SG&A | (158 | ) | (98 | ) | (395 | ) | (204 | ) | |||||
Equity in loss of investees | — | (15,232 | ) | (11,757 | ) | (14,614 | ) | ||||||
Loss on asset disposals, net | (1,384 | ) | (2 | ) | (1,384 | ) | (2 | ) | |||||
Operating loss | $ | (137,351 | ) | $ | (146,586 | ) | $ | (243,779 | ) | $ | (157,865 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||
Adjusted EBITDA | |||||||||||||
Power segment(1) | $ | 16,439 | $ | 27,401 | $ | 27,613 | $ | 44,810 | |||||
Renewable segment | (78,603 | ) | (123,302 | ) | (140,357 | ) | (122,375 | ) | |||||
Industrial segment | (6,222 | ) | (4,880 | ) | (13,532 | ) | (5,385 | ) | |||||
Corporate(2) | (6,194 | ) | (9,665 | ) | (17,808 | ) | (19,393 | ) | |||||
Research and development costs | (1,287 | ) | (2,437 | ) | (2,429 | ) | (4,230 | ) | |||||
Foreign exchange | (20,198 | ) | 2,294 | (17,741 | ) | 2,339 | |||||||
Other – net | (131 | ) | 43 | 266 | 78 | ||||||||
(96,196 | ) | (110,546 | ) | (163,988 | ) | (104,156 | ) | ||||||
Gain on sale of equity method investment (BWBC) | — | — | 6,509 | — | |||||||||
Other than temporary impairment of equity method investment in TBWES | — | (18,193 | ) | (18,362 | ) | (18,193 | ) | ||||||
Loss on debt extinguishment | (49,241 | ) | — | (49,241 | ) | — | |||||||
Loss on asset disposal | (1,513 | ) | — | (1,513 | ) | — | |||||||
MTM gain (loss) from benefit plans | 544 | — | 544 | (1,062 | ) | ||||||||
Financial advisory services included in SG&A | (5,142 | ) | — | (8,231 | ) | — | |||||||
Acquisition and integration costs included in SG&A | — | (535 | ) | — | (1,432 | ) | |||||||
Goodwill impairment | (37,540 | ) | — | (37,540 | ) | — | |||||||
Restructuring activities and spin-off transaction costs | (3,826 | ) | (1,952 | ) | (10,688 | ) | (4,984 | ) | |||||
Depreciation & amortization | (6,921 | ) | (7,774 | ) | (13,902 | ) | (16,159 | ) | |||||
Interest expense, net | (11,770 | ) | (6,158 | ) | (25,069 | ) | (7,749 | ) | |||||
Loss before income tax expense | (211,605 | ) | (145,158 | ) | (321,481 | ) | (153,735 | ) | |||||
Income tax expense (benefit) | (1,934 | ) | 3,458 | 5,029 | 346 | ||||||||
Loss from continuing operations | (209,671 | ) | (148,616 | ) | (326,510 | ) | (154,081 | ) | |||||
Loss from discontinued operations, net of tax | (55,932 | ) | (2,234 | ) | (59,428 | ) | (3,610 | ) | |||||
Net loss | (265,603 | ) | (150,850 | ) | (385,938 | ) | (157,691 | ) | |||||
Net income attributable to noncontrolling interest | (165 | ) | (149 | ) | (263 | ) | (353 | ) | |||||
Net loss attributable to stockholders | $ | (265,768 | ) | $ | (150,999 | ) | $ | (386,201 | ) | $ | (158,044 | ) |
June 30, | December 31, | |||||
(in thousands) | 2018 | 2017 | ||||
Contract assets - included in contracts in progress: | ||||||
Costs incurred less costs of revenue recognized | $ | 59,552 | $ | 69,576 | ||
Revenues recognized less billings to customers | 89,488 | 66,235 | ||||
Contracts in progress | $ | 149,040 | $ | 135,811 | ||
Contract liabilities - included in advance billings on contracts: | ||||||
Billings to customers less revenues recognized | $ | 148,313 | $ | 168,880 | ||
Costs of revenue recognized less cost incurred | 1,455 | 3,117 | ||||
Advance billings on contracts | $ | 149,768 | $ | 171,997 | ||
Accrued contract losses | $ | 53,699 | $ | 40,634 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||
Increases in gross profits for changes in estimates for over time contracts | $ | 6,019 | $ | 4,982 | $ | 13,946 | $ | 14,182 | |||||
Decreases in gross profits for changes in estimates for over time contracts | (50,327 | ) | (121,217 | ) | (110,498 | ) | (124,588 | ) | |||||
Net changes in gross profits for changes in estimates for over time contracts | $ | (44,308 | ) | $ | (116,235 | ) | $ | (96,552 | ) | $ | (110,406 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||
Balance at beginning of period | $ | 5,914 | $ | 558 | $ | 2,320 | $ | 1,809 | |||||
Restructuring expense | 4,276 | 1,887 | 10,164 | 3,857 | |||||||||
Payments | (2,308 | ) | (1,607 | ) | (4,602 | ) | (4,828 | ) | |||||
Balance at June 30, | $ | 7,882 | $ | 838 | $ | 7,882 | $ | 838 |
(in thousands) | Currency translation gain (loss) | Net unrealized gain (loss) on investments (net of tax)1 | Net unrealized gain (loss) on derivative instruments | Net unrecognized gain (loss) related to benefit plans (net of tax) | Total | ||||||||||
Balance at December 31, 2017 | $ | (27,837 | ) | $ | 38 | $ | 1,737 | $ | 3,633 | $ | (22,429 | ) | |||
Impact of ASU 2016-1 on changes in the components of AOCI, net of tax (1) | — | (38 | ) | — | — | (38 | ) | ||||||||
Other comprehensive income (loss) before reclassifications | 3,223 | — | 1,224 | (55 | ) | 4,392 | |||||||||
Amounts reclassified from AOCI to net income (loss) | (2,044 | ) | — | (1,272 | ) | (384 | ) | (3,700 | ) | ||||||
Net current-period other comprehensive income (loss) | 1,179 | — | (48 | ) | (439 | ) | 692 | ||||||||
Balance at March 31, 2018 | $ | (26,658 | ) | $ | — | $ | 1,689 | $ | 3,194 | $ | (21,775 | ) | |||
Other comprehensive income (loss) before reclassifications | 8,517 | — | (513 | ) | 112 | 8,116 | |||||||||
Amounts reclassified from AOCI to net income (loss) | — | — | 381 | (427 | ) | (46 | ) | ||||||||
Amounts reclassified from AOCI to pension, other accumulated postretirement benefit liabilities and deferred income taxes (2) | — | — | — | (2,831 | ) | (2,831 | ) | ||||||||
Net current-period other comprehensive income (loss) | 8,517 | — | (132 | ) | (3,146 | ) | 5,239 | ||||||||
Balance at June 30, 2018 | $ | (18,141 | ) | $ | — | $ | 1,557 | $ | 48 | $ | (16,536 | ) |
(in thousands) | Currency translation gain (loss) | Net unrealized gain (loss) on investments (net of tax) | Net unrealized gain (loss) on derivative instruments | Net unrecognized gain (loss) related to benefit plans (net of tax) | Total | ||||||||||
Balance at December 31, 2016 | $ | (43,987 | ) | $ | (37 | ) | $ | 802 | $ | 6,740 | $ | (36,482 | ) | ||
Other comprehensive income (loss) before reclassifications | 5,417 | 61 | 4,587 | (44 | ) | 10,021 | |||||||||
Amounts reclassified from AOCI to net income (loss) | — | (27 | ) | (3,843 | ) | (882 | ) | (4,752 | ) | ||||||
Net current-period other comprehensive income (loss) | 5,417 | 34 | 744 | (926 | ) | 5,269 | |||||||||
Balance at March 31, 2017 | $ | (38,570 | ) | $ | (3 | ) | $ | 1,546 | $ | 5,814 | $ | (31,213 | ) | ||
Other comprehensive income (loss) before reclassifications | 6,757 | (19 | ) | (2,204 | ) | (97 | ) | 4,437 | |||||||
Amounts reclassified from AOCI to net income (loss) | — | (1 | ) | (658 | ) | (800 | ) | (1,459 | ) | ||||||
Net current-period other comprehensive income (loss) | 6,757 | (20 | ) | (2,862 | ) | (897 | ) | 2,978 | |||||||
Balance at June 30, 2017 | $ | (31,813 | ) | $ | (23 | ) | $ | (1,316 | ) | $ | 4,917 | $ | (28,235 | ) |
AOCI component | Line items in the Condensed Consolidated Statements of Operations affected by reclassifications from AOCI | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||
Release of currency translation gain with the sale of equity method investment | Equity in income and impairment of investees | $ | — | $ | — | $ | 2,044 | $ | — | |||||
Provision for income taxes | — | — | — | — | ||||||||||
Net income (loss) | $ | — | $ | — | $ | 2,044 | $ | — | ||||||
Derivative financial instruments | Revenues | $ | (478 | ) | $ | 714 | $ | 1,138 | $ | 6,002 | ||||
Cost of operations | (11 | ) | (49 | ) | 1 | (46 | ) | |||||||
Other-net | — | 885 | — | 492 | ||||||||||
Total before tax | (489 | ) | 1,550 | 1,139 | 6,448 | |||||||||
Provision for income taxes | (108 | ) | 892 | 248 | 1,947 | |||||||||
Net income (loss) | $ | (381 | ) | $ | 658 | $ | 891 | $ | 4,501 | |||||
Amortization of prior service cost on benefit obligations | Benefit plans, net | $ | 427 | $ | 789 | $ | 811 | $ | 1,662 | |||||
Provision for income taxes | — | (11 | ) | — | (20 | ) | ||||||||
Net income (loss) | $ | 427 | $ | 800 | $ | 811 | $ | 1,682 | ||||||
Realized gain on investments | Other-net | $ | — | $ | 1 | $ | — | $ | 44 | |||||
Provision for income taxes | — | — | — | 16 | ||||||||||
Net income (loss) | $ | — | $ | 1 | $ | — | $ | 28 |
(in thousands) | June 30, 2018 | December 31, 2017 | ||||
Held by foreign entities | $ | 27,955 | $ | 42,490 | ||
Held by United States entities | 557 | 1,227 | ||||
Cash and cash equivalents | $ | 28,512 | $ | 43,717 | ||
Reinsurance reserve requirements | $ | 25,269 | $ | 21,061 | ||
Sale proceeds and claim held in escrow | 591 | — | ||||
Restricted foreign accounts | 6,442 | 4,919 | ||||
Restricted cash and cash equivalents | $ | 32,302 | $ | 25,980 | ||
Total cash, cash equivalents and restricted cash | $ | 60,814 | $ | 69,697 |
(in thousands) | June 30, 2018 | December 31, 2017 | ||||
Raw materials and supplies | $ | 49,834 | $ | 54,291 | ||
Work in progress | 5,971 | 6,918 | ||||
Finished goods | 11,469 | 11,708 | ||||
Total inventories | $ | 67,274 | $ | 72,917 |
(in thousands) | Power | Renewable | Industrial(1) | Total | |||||||||||
Balance at December 31, 2017 (2) | $ | 47,370 | $ | — | $ | 38,308 | $ | 85,678 | |||||||
Currency translation adjustments | (191 | ) | — | (768 | ) | (959 | ) | ||||||||
Second quarter 2018 impairment charges | — | — | (37,540 | ) | (37,540 | ) | |||||||||
Balance at June 30, 2018 (2) | $ | 47,179 | $ | — | $ | — | $ | 47,179 |
(in thousands) | June 30, 2018 | December 31, 2017 | ||||
Definite-lived intangible assets | ||||||
Customer relationships | $ | 24,876 | $ | 25,494 | ||
Unpatented technology | 12,454 | 12,910 | ||||
Patented technology | 6,546 | 6,542 | ||||
Tradename | 12,650 | 13,951 | ||||
Backlog | 17,760 | 18,060 | ||||
All other | 8,641 | 7,611 | ||||
Gross value of definite-lived intangible assets | 82,927 | 84,568 | ||||
Customer relationships amortization | (13,643 | ) | (12,455 | ) | ||
Unpatented technology amortization | (3,002 | ) | (2,184 | ) | ||
Patented technology amortization | (2,309 | ) | (2,213 | ) | ||
Tradename amortization | (3,372 | ) | (3,042 | ) | ||
Acquired backlog amortization | (17,760 | ) | (16,622 | ) | ||
All other amortization | (7,778 | ) | (7,292 | ) | ||
Accumulated amortization | (47,864 | ) | (43,808 | ) | ||
Net definite-lived intangible assets | $ | 35,063 | $ | 40,760 | ||
Indefinite-lived intangible assets: | ||||||
Trademarks and trade names | $ | 1,305 | $ | 1,305 | ||
Total indefinite-lived intangible assets | $ | 1,305 | $ | 1,305 |
Six months ended June 30, | ||||||
(in thousands) | 2018 | 2017 | ||||
Balance at beginning of period | $ | 42,065 | $ | 65,496 | ||
Amortization expense | (4,056 | ) | (6,334 | ) | ||
Currency translation adjustments and other | (1,641 | ) | (14,088 | ) | ||
Balance at end of the period | $ | 36,368 | $ | 45,074 |
Year ending | Amortization expense | ||
Three months ending September 30, 2018 | $ | 1,311 | |
Three months ending December 31, 2018 | $ | 1,311 | |
Twelve months ending December 31, 2019 | $ | 4,763 | |
Twelve months ending December 31, 2020 | $ | 4,002 | |
Twelve months ending December 31, 2021 | $ | 3,772 | |
Twelve months ending December 31, 2022 | $ | 3,685 | |
Twelve months ending December 31, 2023 | $ | 3,677 | |
Thereafter | $ | 12,542 |
(in thousands) | June 30, 2018 | December 31, 2017 | ||||
Land | $ | 3,590 | $ | 3,631 | ||
Buildings | 107,100 | 107,944 | ||||
Machinery and equipment | 195,276 | 205,331 | ||||
Property under construction | 2,249 | 5,979 | ||||
308,215 | 322,885 | |||||
Less accumulated depreciation | 202,450 | 208,178 | ||||
Net property, plant and equipment | $ | 105,765 | $ | 114,707 |
Six Months Ended June 30, | ||||||
(in thousands) | 2018 | 2017 | ||||
Balance at beginning of period | $ | 33,514 | $ | 36,520 | ||
Additions | 28,008 | 12,093 | ||||
Expirations and other changes | (1,592 | ) | (3,244 | ) | ||
Payments | (5,791 | ) | (6,089 | ) | ||
Translation and other | (1,001 | ) | 1,193 | |||
Balance at end of period | $ | 53,138 | $ | 40,473 |
Pension Benefits | Other Benefits | ||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in thousands) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||
Interest cost | 9,741 | 10,255 | 19,498 | 20,490 | 95 | 140 | 192 | 361 | |||||||||||||||||
Expected return on plan assets | (16,215 | ) | (14,854 | ) | (32,445 | ) | (29,710 | ) | — | — | — | — | |||||||||||||
Amortization of prior service cost | 25 | 26 | 50 | 51 | (188 | ) | (816 | ) | (834 | ) | (1,716 | ) | |||||||||||||
Recognized net actuarial loss (gain) | (544 | ) | — | (544 | ) | 1,062 | — | — | — | — | |||||||||||||||
Benefit plans, net | (6,993 | ) | (4,573 | ) | (13,441 | ) | (8,107 | ) | (93 | ) | (676 | ) | (642 | ) | (1,355 | ) | |||||||||
Service cost included in COS | $ | 187 | $ | 231 | $ | 376 | $ | 482 | $ | 4 | $ | 4 | $ | 8 | $ | 8 | |||||||||
Net periodic benefit cost (benefit) | $ | (6,806 | ) | $ | (4,342 | ) | $ | (13,065 | ) | $ | (7,625 | ) | $ | (89 | ) | $ | (672 | ) | $ | (634 | ) | $ | (1,347 | ) |
(in thousands) | June 30, 2018 | December 31, 2017 | ||||
United States | $ | 196,300 | $ | 94,300 | ||
Foreign | 4,124 | 9,173 | ||||
Total revolving debt | $ | 200,424 | $ | 103,473 |
• | 9.75:1.0 for the quarters ending June 30, 2018 and September 30, 2018, |
• | 4.00:1.0 for the quarter ending December 31, 2018, |
• | 3.50:1.0 for the quarter ending March 31, 2019, and |
• | 2.25:1.0 for the quarters ending June 30, 2019 and each quarter thereafter. |
• | 1.00:1.0 for the quarter ending June 30, 2018, |
• | 1.25:1.0 for the quarter ending September 30, 2018, |
• | 2.00:1.0 for the quarter ending December 31, 2018, |
• | 2.50:1.0 for the quarter ending March 31, 2019, and |
• | 3.50:1.0 for the quarters ending June 30, 2019 and each quarter thereafter. |
(in thousands) | Coupon Interest | Accretion of debt discount and amortization of financing costs | Total Interest Expense |
For the three months ended June 30, 2018 | $2,191 | $833 | $3,024 |
For the six months ended June 30, 2018 | $7,460 | $3,202 | $10,662 |
Asset and Liability Derivative | ||||||
(in thousands) | June 30, 2018 | December 31, 2017 | ||||
Derivatives designated as hedges: | ||||||
Foreign exchange contracts: | ||||||
Location of FX forward contracts designated as hedges: | ||||||
Accounts receivable-other | $ | 731 | $ | 1,088 | ||
Other assets | 1,631 | 312 | ||||
Accounts payable | 1 | 105 | ||||
Derivatives not designated as hedges: | ||||||
Foreign exchange contracts: | ||||||
Location of FX forward contracts not designated as hedges: | ||||||
Accounts receivable-other | $ | — | $ | 7 | ||
Accounts payable | 3 | 1,722 | ||||
Other liabilities | — | 12 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||
Derivatives designated as hedges: | |||||||||||||
Cash flow hedges | |||||||||||||
Foreign exchange contracts | |||||||||||||
Amount of gain (loss) recognized in other comprehensive income | $ | (602 | ) | $ | (3,657 | ) | $ | 999 | $ | 2,244 | |||
Effective portion of gain (loss) reclassified from AOCI into earnings by location: | |||||||||||||
Revenues | (478 | ) | 714 | 1,138 | 6,002 | ||||||||
Cost of operations | (11 | ) | (49 | ) | 1 | (46 | ) | ||||||
Other-net | — | 885 | — | 492 | |||||||||
Portion of gain (loss) recognized in income that is excluded from effectiveness testing by location: | |||||||||||||
Other-net | (412 | ) | (113 | ) | (499 | ) | (3,519 | ) | |||||
Derivatives not designated as hedges: | |||||||||||||
Forward contracts | |||||||||||||
Loss recognized in income by location: | |||||||||||||
Other-net | $ | (3 | ) | $ | (36 | ) | $ | (28 | ) | $ | (345 | ) |
(in thousands) | ||||||||||||
Available-for-sale securities | June 30, 2018 | Level 1 | Level 2 | Level 3 | ||||||||
Commercial paper | $ | 1,989 | $ | — | $ | 1,989 | $ | — | ||||
Certificates of deposit | 2,999 | — | 2,999 | — | ||||||||
Mutual funds | 1,351 | — | 1,351 | — | ||||||||
Corporate notes and bonds | 1,594 | 1,594 | — | — | ||||||||
United States Government and agency securities | 5,680 | 5,680 | — | — | ||||||||
Total fair value of available-for-sale securities | $ | 13,614 | $ | 7,274 | $ | 6,340 | $ | — |
(in thousands) | ||||||||||||
Available-for-sale securities | December 31, 2017 | Level 1 | Level 2 | Level 3 | ||||||||
Commercial paper | $ | 1,895 | $ | — | $ | 1,895 | $ | — | ||||
Certificates of deposit | 2,398 | — | 2,398 | — | ||||||||
Mutual funds | 1,331 | — | 1,331 | — | ||||||||
Corporate notes and bonds | 4,447 | 4,447 | — | — | ||||||||
United States Government and agency securities | 5,738 | 5,738 | — | — | ||||||||
Total fair value of available-for-sale securities | $ | 15,809 | $ | 10,185 | $ | 5,624 | $ | — |
Derivatives | June 30, 2018 | December 31, 2017 | ||||||
Forward contracts to purchase/sell foreign currencies | $ | 2,358 | $ | (432 | ) |
• | Cash and cash equivalents and restricted cash and cash equivalents. The carrying amounts that we have reported in the accompanying condensed consolidated balance sheets for cash and cash equivalents and restricted cash and cash equivalents approximate their fair values due to their highly liquid nature. |
• | Revolving debt. We base the fair values of debt instruments on quoted market prices. Where quoted prices are not available, we base the fair values on the present value of future cash flows discounted at estimated borrowing rates for |
(in thousands) | 2018 | 2017 | ||||
Accrued capital expenditures in accounts payable | $ | 123 | $ | 703 | ||
Accreted interest expense on our second lien term loan facility | $ | 3,202 | $ | — |
(in thousands) | 2018 | 2017 | ||||
Income tax payments | $ | 2,938 | $ | 2,657 | ||
Interest payments on our U.S. revolving credit facility | $ | 4,599 | $ | 1,389 | ||
Interest payments on our second lien term loan facility | $ | 7,627 | $ | — |
Three months ended June 30, | Six months ended June 30, | ||||||||||||
(in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||
Components associated with borrowings from: | |||||||||||||
U.S. Revolving Credit Facility | $ | 3,434 | $ | 1,428 | $ | 5,779 | $ | 2,128 | |||||
Second Lien Term Loan Facility | 2,191 | — | 7,460 | — | |||||||||
Foreign revolving credit facilities | 145 | 233 | 279 | 474 | |||||||||
5,770 | 1,661 | 13,518 | 2,602 | ||||||||||
Components associated with amortization or accretion of: | |||||||||||||
U.S. Revolving Credit Facility deferred financing fees and commitment fees | 5,113 | 872 | 8,314 | 1,588 | |||||||||
Second Lien Term Loan Facility deferred financing fees and discount | 833 | — | 3,202 | — | |||||||||
5,946 | 872 | 11,516 | 1,588 | ||||||||||
Other interest expense | 161 | 3,750 | 295 | 3,796 | |||||||||
Total interest expense | $ | 11,877 | $ | 6,283 | $ | 25,329 | $ | 7,986 |
(in thousands) | June 30, 2018 | December 31, 2017 | June 30, 2017 | December 31, 2016 | ||||||||
Cash and cash equivalents of continuing operations (1) | $ | 28,512 | $ | 43,717 | $ | 59,239 | $ | 87,426 | ||||
Restricted cash and cash equivalents | 32,302 | 25,980 | 22,833 | 27,770 | ||||||||
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows | $ | 60,814 | $ | 69,697 | $ | 82,072 | $ | 115,196 |
• | $37.5 million to fully impair goodwill related to our SPIG reporting unit in the second quarter of 2018 due to lower bookings than previously forecasted, which resulted in a reduction in the forecast for the reporting unit. See further discussion in Note 12 to the condensed consolidated financial statements. |
• | $5.1 million and $8.2 million of financial advisory services are included in selling, general and administrative expenses ("SG&A") in the three and six months ended June 30, 2018, respectively. These services are requirements of Amendments 3 and 5 to the U.S. Revolving Credit Facility, as described more fully in Note 17 to the condensed consolidated financial statements. |
• | $3.8 million and $10.7 million of restructuring and spin-off costs were recognized in the three and six months ended June 30, 2018, respectively, compared to $2.0 million and $5.0 million of restructuring and spin-off costs in the three and six months ended June 30, 2017, respectively. The actions in the first six months of 2018 are primarily related to executive severance, workforce reductions and the remaining severance costs of other restructuring initiatives. In the first six months of 2017, restructuring cost related to severance costs from prior initiatives to restructure the business serving the power generation market in advance of lower demand for power generation from coal in the United States. |
• | $6.5 million of gain on the sale of an equity method investment in China was recognized in the first quarter of 2018 and is included in Equity in income and impairment of investees. The sale was completed in early 2018 with proceeds, net of withholding tax of $19.8 million. |
• | $18.4 million and $18.2 million of other-than-temporary impairment of our equity method investment in India in the first quarter of 2018 and the second quarter of 2017, respectively, based on a change in strategy and then an agreement to sell it, which was completed in July 2018. The impairments are included in Equity in income and impairment of investees. See further discussion in Note 11 to the condensed consolidated financial statements. |
• | $1.5 million to dispose and write off unused IT equipment and cancel in-process IT projects in the second quarter of 2018. |
• | $0.5 million and $1.1 million of actuarially determined mark-to-market ("MTM") losses caused by lump sum settlement payments from our Canadian pension plan in the second quarter 2018 and the first quarter of 2017, respectively. |
• | $0.5 million and $1.4 million of acquisition and integration costs in the three and six months ended June 30, 2017, respectively, related to the acquisitions of SPIG and Universal. |
• | raised $248.4 million of equity on April 30, 2018 through the Rights Offering; |
• | repaid on May 4, 2018 the Second Lien Term Loan Facility, which will save approximately $25 million in annual interest payments and $30 million of annual interest expense; |
• | entered into an agreement on June 5, 2018 to sell our MEGTEC and Universal businesses for $130 million (subject to adjustment); |
• | entered into an agreement on August 9, 2018 to sell a subsidiary that holds two operations and maintenance contracts for waste-to-energy facilities in West Palm Beach, Florida for $45 million (subject to adjustment); |
• | sold our equity method investments in Babcock & Wilcox Beijing Company, Ltd. ("BWBC"), our former joint venture in China, and Thermax Babcock & Wilcox Energy Solutions Private Limited ("TBWES"), our former joint venture in India, resulting in proceeds of $21.1 million in the second quarter of 2018 and $15.0 million in July 2018, respectively; |
• | sold another non-core business for $5.1 million in the first quarter of 2018; |
• | initiated restructuring actions and other additional cost reductions in the second quarter of 2018 that are designed to save approximately $34 million annually; and |
• | entered into several waivers and amendments to avoid default to our U.S. Revolving Credit Facility as described in Note 17, the most recent of which is dated August 9, 2018. As part of this latest amendment, our lenders agreed to reduce the minimum liquidity required under the facility, which has the effect of increasing the amount we may borrow by up to $25 million. Other liquidity measures that must also be completed include: a) the receipt of $30 million in net proceeds from the Last Out Loan, for which a binding commitment letter with Vintage Capital Management LLC, a related party, was executed on August 9, 2018, which is fully backstopped by B. Riley FBR, Inc., a related party; and b) obtaining $25 million of written commitments for concessions from customers on the Renewable loss contracts through a combination of cash contributions, loans and forgiveness of indebtedness and performance obligations by September 30, 2018. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
(In thousands) | 2018 | 2017 | $ Change | 2018 | 2017 | $ Change | |||||||||||||
Revenues: | |||||||||||||||||||
Power segment | $ | 197,752 | $ | 213,756 | $ | (16,004 | ) | $ | 356,878 | 410,052 | $ | (53,174 | ) | ||||||
Renewable segment | 55,002 | 48,074 | 6,928 | 114,960 | 153,610 | (38,650 | ) | ||||||||||||
Industrial segment | 46,015 | 46,632 | (617 | ) | 82,759 | 95,817 | (13,058 | ) | |||||||||||
Eliminations | (7,432 | ) | (2,231 | ) | (5,201 | ) | (10,084 | ) | (5,176 | ) | (4,908 | ) | |||||||
291,337 | 306,231 | (14,894 | ) | 544,513 | 654,303 | (109,790 | ) | ||||||||||||
Gross profit (loss)(1): | |||||||||||||||||||
Power segment | 30,011 | 43,852 | (13,841 | ) | 60,876 | 81,562 | (20,686 | ) | |||||||||||
Renewable segment | (69,329 | ) | (110,894 | ) | 41,565 | (119,778 | ) | (100,300 | ) | (19,478 | ) | ||||||||
Industrial segment | 79 | 187 | (108 | ) | (2,672 | ) | 4,886 | (7,558 | ) | ||||||||||
Intangible amortization expense included in cost of operations | (1,827 | ) | (2,738 | ) | 911 | (3,661 | ) | (6,127 | ) | 2,466 | |||||||||
(41,066 | ) | (69,593 | ) | 28,527 | (65,235 | ) | (19,979 | ) | (45,256 | ) | |||||||||
Selling, general and administrative ("SG&A") expenses | (52,090 | ) | (57,272 | ) | 5,182 | (114,351 | ) | (113,852 | ) | (499 | ) | ||||||||
Goodwill impairment | (37,540 | ) | — | (37,540 | ) | (37,540 | ) | — | (37,540 | ) | |||||||||
Restructuring activities and spin-off transaction costs | (3,826 | ) | (1,952 | ) | (1,874 | ) | (10,688 | ) | (4,984 | ) | (5,704 | ) | |||||||
Research and development costs | (1,287 | ) | (2,437 | ) | 1,150 | (2,429 | ) | (4,230 | ) | 1,801 | |||||||||
Intangible amortization expense included in SG&A | (158 | ) | (98 | ) | (60 | ) | (395 | ) | (204 | ) | (191 | ) | |||||||
Equity in loss of investees | — | (15,232 | ) | 15,232 | (11,757 | ) | (14,614 | ) | 2,857 | ||||||||||
Loss on asset disposals, net | (1,384 | ) | (2 | ) | (1,382 | ) | (1,384 | ) | (2 | ) | (1,382 | ) | |||||||
Operating loss | $ | (137,351 | ) | $ | (146,586 | ) | $ | 9,235 | $ | (243,779 | ) | $ | (157,865 | ) | $ | (85,914 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
(in thousands) | 2018 | 2017 | $ Change | 2018 | 2017 | $ Change | |||||||||||||
Adjusted EBITDA | |||||||||||||||||||
Power segment(1) | $ | 16,439 | $ | 27,401 | $ | (10,962 | ) | $ | 27,613 | $ | 44,810 | $ | (17,197 | ) | |||||
Renewable segment | (78,603 | ) | (123,302 | ) | 44,699 | (140,357 | ) | (122,375 | ) | (17,982 | ) | ||||||||
Industrial segment | (6,222 | ) | (4,880 | ) | (1,342 | ) | (13,532 | ) | (5,385 | ) | (8,147 | ) | |||||||
Corporate(2) | (6,194 | ) | (9,665 | ) | 3,471 | (17,808 | ) | (19,393 | ) | 1,585 | |||||||||
Research and development costs | (1,287 | ) | (2,437 | ) | 1,150 | (2,429 | ) | (4,230 | ) | 1,801 | |||||||||
Foreign exchange | (20,198 | ) | 2,294 | (22,492 | ) | (17,741 | ) | 2,339 | (20,080 | ) | |||||||||
Other – net | (131 | ) | 43 | (174 | ) | 266 | 78 | 188 | |||||||||||
Gain on sale of equity method investment (BWBC) | — | — | — | 6,509 | — | 6,509 | |||||||||||||
Other than temporary impairment of equity method investment in TBWES | — | (18,193 | ) | 18,193 | (18,362 | ) | (18,193 | ) | (169 | ) | |||||||||
Loss on debt extinguishment | (49,241 | ) | — | (49,241 | ) | (49,241 | ) | — | (49,241 | ) | |||||||||
Loss on asset disposal | (1,513 | ) | — | (1,513 | ) | (1,513 | ) | — | (1,513 | ) | |||||||||
MTM loss from benefit plans | 544 | — | 544 | 544 | (1,062 | ) | 1,606 | ||||||||||||
Financial advisory services included in SG&A | (5,142 | ) | — | (5,142 | ) | (8,231 | ) | — | (8,231 | ) | |||||||||
Acquisition and integration costs included in SG&A | — | (535 | ) | 535 | — | (1,432 | ) | 1,432 | |||||||||||
Goodwill impairment | (37,540 | ) | — | (37,540 | ) | (37,540 | ) | — | (37,540 | ) | |||||||||
Restructuring activities and spin-off transaction costs | (3,826 | ) | (1,952 | ) | (1,874 | ) | (10,688 | ) | (4,984 | ) | (5,704 | ) | |||||||
Depreciation & amortization | (6,921 | ) | (7,774 | ) | 853 | (13,902 | ) | (16,159 | ) | 2,257 | |||||||||
Interest expense, net | (11,770 | ) | (6,158 | ) | (5,612 | ) | (25,069 | ) | (7,749 | ) | (17,320 | ) | |||||||
Loss before income tax expense | (211,605 | ) | (145,158 | ) | (66,447 | ) | (321,481 | ) | (153,735 | ) | (167,746 | ) | |||||||
Income tax expense (benefit) | (1,934 | ) | 3,458 | (5,392 | ) | 5,029 | 346 | 4,683 | |||||||||||
Income (loss) from continuing operations | (209,671 | ) | (148,616 | ) | (61,055 | ) | (326,510 | ) | (154,081 | ) | (172,429 | ) | |||||||
Income (loss) from discontinued operations, net of tax | (55,932 | ) | (2,234 | ) | (53,698 | ) | (59,428 | ) | (3,610 | ) | (55,818 | ) | |||||||
Net income (loss) | (265,603 | ) | (150,850 | ) | (114,753 | ) | (385,938 | ) | (157,691 | ) | (228,247 | ) | |||||||
Net income attributable to noncontrolling interest | (165 | ) | (149 | ) | (16 | ) | (263 | ) | (353 | ) | 90 | ||||||||
Net loss attributable to stockholders | $ | (265,768 | ) | $ | (150,999 | ) | $ | (114,769 | ) | $ | (386,201 | ) | $ | (158,044 | ) | $ | (228,157 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
(In thousands) | 2018 | 2017 | $ Change | 2018 | 2017 | $ Change | |||||||||||||
Revenues | $ | 197,752 | $ | 213,756 | $ | (16,004 | ) | $ | 356,878 | $ | 410,052 | $ | (53,174 | ) | |||||
Gross profit (loss) | $ | 30,011 | $ | 43,852 | $ | (13,841 | ) | $ | 60,876 | $ | 81,562 | $ | (20,686 | ) | |||||
Adjusted EBITDA | $ | 16,439 | $ | 27,401 | $ | (10,962 | ) | $ | 27,613 | $ | 44,810 | $ | (17,197 | ) | |||||
Gross profit % | 15.2 | % | 20.5 | % | 17.1 | % | 19.9 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
(in thousands) | 2018 | 2017 | $ Change | 2018 | 2017 | $ Change | |||||||||||||
Revenues | $ | 55,002 | $ | 48,074 | $ | 6,928 | $ | 114,960 | $ | 153,610 | $ | (38,650 | ) | ||||||
Gross profit (loss) | $ | (69,329 | ) | $ | (110,894 | ) | $ | 41,565 | $ | (119,778 | ) | $ | (100,300 | ) | $ | (19,478 | ) | ||
Adjusted EBITDA | $ | (78,603 | ) | $ | (123,302 | ) | $ | 44,699 | $ | (140,357 | ) | $ | (122,375 | ) | $ | (17,982 | ) | ||
Gross profit % | (126.0 | )% | (230.7 | )% | (104.2 | )% | (65.3 | )% |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
(In thousands) | 2018 | 2017 | $ Change | 2018 | 2017 | $ Change | |||||||||||||
Revenues | $ | 46,015 | $ | 46,632 | $ | (617 | ) | $ | 82,759 | $ | 95,817 | $ | (13,058 | ) | |||||
Gross profit (loss) | $ | 79 | $ | 187 | $ | (108 | ) | $ | (2,672 | ) | $ | 4,886 | $ | (7,558 | ) | ||||
Adjusted EBITDA | $ | (6,222 | ) | $ | (4,880 | ) | $ | (1,342 | ) | $ | (13,532 | ) | $ | (5,385 | ) | $ | (8,147 | ) | |
Gross profit % | 0.2 | % | 0.4 | % | (3.2 | )% | 5.1 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||
Power | $ | 132 | $ | 177 | $ | 403 | $ | 354 | |||||
Renewable(1) | (23 | ) | 15 | 23 | 50 | ||||||||
Industrial | 18 | 79 | 45 | 144 | |||||||||
Other/eliminations | (1 | ) | (37 | ) | (2 | ) | (38 | ) | |||||
Bookings | $ | 126 | $ | 234 | $ | 469 | $ | 510 |
(In approximate millions) | June 30, 2018 | December 31, 2017 | June 30, 2017 | ||||||
Power | $ | 500 | $ | 453 | $ | 562 | |||
Renewable(1) | 916 | 1,008 | 1,137 | ||||||
Industrial | 137 | 175 | 221 | ||||||
Other/eliminations | (35 | ) | (43 | ) | (36 | ) | |||
Backlog | $ | 1,518 | $ | 1,593 | $ | 1,884 |
(In approximate millions) | 2018 | 2019 | Thereafter | Total | ||||||||
Power | $ | 283 | $ | 123 | $ | 94 | $ | 500 | ||||
Renewable | 152 | 130 | 634 | $ | 916 | |||||||
Industrial | 91 | 25 | 21 | $ | 137 | |||||||
Other/eliminations | (19 | ) | (15 | ) | (1 | ) | $ | (35 | ) | |||
Expected revenue from backlog | $ | 507 | $ | 263 | $ | 748 | $ | 1,518 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(In thousands, except for percentages) | 2018 | 2017 | $ Change | 2018 | 2017 | $ Change | |||||||||
Loss before income taxes | (211,605 | ) | (145,158 | ) | $ | (66,447 | ) | (321,481 | ) | (153,735 | ) | $ | (167,746 | ) | |
Income tax expense (benefit) | (1,934 | ) | 3,458 | $ | (5,392 | ) | 5,029 | 346 | $ | 4,683 | |||||
Effective tax rate | 0.9 | % | (2.4 | )% | (1.6 | )% | (0.2 | )% |
Three months ended June 30, | Six months ended June 30, | ||||||||||||
(in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||
United States | $ | (66,146 | ) | $ | (27,192 | ) | $ | (91,170 | ) | $ | (33,486 | ) | |
Other than the United States | (145,459 | ) | (117,966 | ) | (230,311 | ) | (120,249 | ) | |||||
Income (loss) before provision for (benefit from) income taxes | $ | (211,605 | ) | $ | (145,158 | ) | $ | (321,481 | ) | $ | (153,735 | ) |
• | raised gross proceeds of $248.4 million on April 30, 2018 through a rights offering as described in Note 19 to the condensed consolidated financial statements; |
• | repaid on May 4, 2018 the Second Lien Term Loan Facility as described in Note 18 to the condensed consolidated financial statements, which will save approximately $25 million in annual interest payments and $30 million of annual interest expense; |
• | entered into an agreement on June 5, 2018 to sell our MEGTEC and Universal businesses for $130 million (subject to adjustment); |
• | entered into an agreement on August 9, 2018 to sell a subsidiary that holds two operations and maintenance contracts for waste-to-energy facilities in West Palm Beach, Florida for $45 million (subject to adjustment); |
• | sold our equity method investments in BWBC and TBWES and settled related contractual claims, resulting in proceeds of $21.1 million in the second quarter of 2018 and $15.0 million in July 2018, respectively; |
• | sold another non-core business for $5.1 million in the first quarter of 2018; |
• | initiated restructuring actions and other additional cost reductions in the second quarter of 2018 that are designed to save approximately $34 million annually; and |
• | entered into several waivers and amendments to avoid default to our U.S. Revolving Credit Facility as described in Note 17, the most recent of which is dated August 9, 2018. As part of this latest amendment, our lenders agreed to reduce the minimum liquidity required under the facility, which has the effect of increasing the amount we may borrow by up to $25 million. Other liquidity measures that must also be completed include: a) the receipt of $30 million in net proceeds from the Last Out Loan, for which a binding commitment letter with Vintage Capital Management LLC, a related party, was executed on August 9, 2018, which is fully backstopped by B. Riley FBR, Inc., a related party; and b) obtaining $25 million of written commitments for concessions from customers on the Renewable loss contracts through a combination of cash contributions, loans and forgiveness of indebtedness and performance obligations by September 30, 2018. |
• | 9.75:1.0 for the quarters ending June 30, 2018 and September 30, 2018, |
• | 4.00:1.0 for the quarter ending December 31, 2018, |
• | 3.50:1.0 for the quarter ending March 31, 2019, and |
• | 2.25:1.0 for the quarters ending June 30, 2019 and each quarter thereafter. |
• | 1.00:1.0 for the quarter ending June 30, 2018, |
• | 1.25:1.0 for the quarter ending September 30, 2018, |
• | 2.00:1.0 for the quarter ending December 31, 2018, |
• | 2.50:1.0 for the quarter ending March 31, 2019, and |
• | 3.50:1.0 for the quarters ending June 30, 2019 and each quarter thereafter. |
Period | Total number of shares purchased (1) | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) (2) | |||||||
April 1, 2018 - April 30, 2018 | 196 | $— | — | $100,000 | |||||||
May 1, 2018 - May 31, 2018 | 3,410 | $— | — | $100,000 | |||||||
June 1, 2018 - June 30, 2018 | 7,140 | $— | — | $100,000 | |||||||
Total | 10,746 | — |
(1) | Includes 196, 3,410 and 7,140 shares repurchased in April, May and June, respectively, pursuant to the provisions of employee benefit plans that require us to repurchase shares to satisfy employee statutory income tax withholding obligations. |
(2) | On August 4, 2016, we announced that our board of directors authorized the repurchase of an indeterminate number of our shares of common stock in the open market at an aggregate market value of up to $100 million over the next twenty-four months. As of August 7, 2018, we have not made any share repurchases under the August 4, 2016 share repurchase authorization. |
2.1* | Stock Purchase Agreement, dated as of June 5, 2018, among B&W Equity Investments, LLC, Babcock & Wilcox MEGTEC Holdings, Inc., Babcock & Wilcox MEGTEC, LLC, The Babcock & Wilcox Company, Babcock & Wilcox Enterprises, Inc., DURR, Inc., and DURR Aktiengesellschaft | |
Equity Commitment agreement, dated April 10, 2018, by and between Babcock & Wilcox Enterprises, Inc. and Vintage Capital Management, LLC (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed April 11, 2018 (File No. 001-36786)) | ||
Babcock & Wilcox Enterprises, Inc. Amended and Restated 2015 Long-Term Incentive Plan (Amended and Restated as of May 16, 2018) (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed May 21, 2018 (File No. 001-36876)) | ||
Amendment No. 6, dated April 10, 2018, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto (incorporated by reference to the Babcock & Wilcox Enterprises, Inc. Current Report on Form 8-K filed April 11, 2018 (File No. 001-36876)) | ||
Amendment No. 7, dated May 31, 2018, to Credit Agreement, dated as of May 11, 2015, among Babcock & Wilcox Enterprises, Inc., as the borrower, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto | ||
Babcock & Wilcox Enterprises, Inc. Executive Severance Plan, as revised effective June 1, 2018 | ||
Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer | ||
Rule 13a-14(a)/15d-14(a) certification of Chief Financial Officer | ||
Section 1350 certification of Chief Executive Officer | ||
Section 1350 certification of Chief Financial Officer | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
* | Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. |
August 9, 2018 | BABCOCK & WILCOX ENTERPRISES, INC. | ||
By: | /s/ Daniel W. Hoehn | ||
Daniel W. Hoehn | |||
Vice President, Controller & Chief Accounting Officer | |||
(Principal Accounting Officer and Duly Authorized Representative) |
I. | THE TRANSACTION 1 |
1.1 | Purchase and Sale 1 |
1.2 | Closing 2 |
1.3 | Deliveries at the Closing 2 |
1.4 | Payment of Transaction Expenses 3 |
1.5 | Estimated Closing Proceeds and Adjustment 3 |
1.6 | Escrow Account 5 |
1.7 | Termination of Intercompany and Related-Party Agreements 5 |
1.8 | Withholding 6 |
II. | SELLER REPRESENTATIONS AND WARRANTIES 6 |
2.1 | Organization and Good Standing 6 |
2.2 | Authorization 7 |
2.3 | Ownership of Interests 7 |
2.4 | Capitalization 7 |
2.5 | Subsidiaries 8 |
2.6 | Consents and Approvals 9 |
2.7 | Non-Contravention 9 |
2.8 | Financial Statements; Undisclosed Liabilities 10 |
2.9 | Litigation and Claims 10 |
2.10 | Permits; Compliance with Laws 10 |
2.11 | Taxes 11 |
2.12 | Real and Tangible Personal Property 13 |
2.13 | Intellectual Property 14 |
2.14 | Material Contracts 15 |
2.15 | Employee Benefits Plans 17 |
i |
2.16 | Labor 19 |
2.17 | Environmental Matters 20 |
2.18 | Financial Advisors 21 |
2.19 | Absence of Changes 21 |
2.20 | Transactions with Affiliates 21 |
2.21 | Suppliers and Customers 21 |
2.22 | Sufficiency of Assets 22 |
2.23 | Insurance 22 |
2.24 | Solvency 22 |
2.25 | No Other Representations or Warranties 22 |
III. | BUYER AND PARENT REPRESENTATIONS AND WARRANTIES 23 |
3.1 | Organization and Qualification 23 |
3.2 | Authorization 23 |
3.3 | Consents and Approvals 23 |
3.4 | Non-Contravention 24 |
3.5 | Litigation and Claims 24 |
3.6 | Financing 24 |
3.7 | Investment Representation 24 |
3.8 | No Other Representations and Warranties 25 |
IV. | COVENANTS 25 |
4.1 | Access to Information 25 |
4.2 | Conduct of the Business Pending the Closing 26 |
4.3 | Regulatory Approvals 29 |
4.4 | Reasonable Best Efforts 31 |
4.5 | Confidentiality 32 |
ii |
4.6 | Indemnification and Insurance 32 |
4.7 | Preservation of Records 33 |
4.8 | Publicity 34 |
4.9 | Employment and Employee Benefits 34 |
4.10 | Release of Liens 36 |
4.11 | Business Guarantees 36 |
4.12 | Taxes 36 |
4.13 | Non-Solicitation of Employees; Non-Competition 44 |
4.14 | Certain Intellectual Property Matters 45 |
4.15 | Beloit Early Termination Option 50 |
4.16 | Interim Services 50 |
V. | CONDITIONS TO CLOSING 50 |
5.1 | Conditions to the Obligations of the Parties 50 |
5.2 | Additional Conditions to the Obligations of Buyer 50 |
5.3 | Additional Conditions to Obligations of Seller Parent and Sellers 51 |
5.4 | Frustration of Closing Conditions 51 |
VI. | TERMINATION 52 |
6.1 | Termination of Agreement 52 |
6.2 | Effect of Termination 53 |
VII. | INDEMNITY 53 |
7.1 | Survival 53 |
7.2 | Indemnification 53 |
7.3 | Limitations on Liability 54 |
7.4 | Indemnity Escrow Amount 56 |
7.5 | Exclusivity 57 |
iii |
7.6 | Indemnification Claims 57 |
7.7 | Defense of Third-Party Claims 57 |
7.8 | Treatment of Indemnity Payments 58 |
VIII. | MISCELLANEOUS 58 |
8.1 | Disclosure Schedules 58 |
8.2 | Remedies 59 |
8.3 | Expenses 59 |
8.4 | Jurisdiction; Consent to Service of Process 59 |
8.5 | Entire Agreement; Amendments and Waivers 59 |
8.6 | Governing Law 60 |
8.7 | Notices 60 |
8.8 | Waiver of Jury Trial 61 |
8.9 | Severability 61 |
8.10 | No Third-Party Beneficiaries; No Assignment 61 |
8.11 | Non-Recourse 61 |
8.12 | Counterparts 62 |
8.13 | Provision Respecting Legal Representation 62 |
8.14 | Guarantee 62 |
IX. | DEFINITIONS AND CONSTRUCTION 62 |
9.1 | Certain Definitions 62 |
9.2 | Construction 73 |
iv |
v |
Defined Term | ||
Agreement | 1 | |
Back-to-Back Guarantee | 36 | |
Buyer | 1 | |
Buyer Indemnitees | 54 | |
Change of Control Payment | 16 | |
Closing | 2 | |
Closing Date Purchase Price | 4 | |
Closing Date. | 2 | |
Closing Schedule | 3 | |
Closing Statement | 4 | |
Companies | 1 | |
Company | 1 | |
Company Benefit Plan | 17 | |
Company Properties | 13 | |
Competing Business | 44 | |
Competition Law Approvals | 29 | |
Confidential Information | 49 | |
Confidentiality Agreement | 32 | |
Covered Person | 44 | |
D&O Indemnitees | 32 | |
De Minimis Claims Amount | 54 | |
Deductible | 55 | |
Draft Allocation Statement | 40 | |
Enforceability Exception | 7 | |
Equity Interests | 1 | |
ERISA | 17 | |
Escrow Account | 3 | |
Escrow Release Date | 56 | |
Estimated Closing Cash | 3 | |
Estimated Closing Indebtedness | 3 | |
Estimated Closing Working Capital | 3 | |
Estimated Transaction Expenses | 3 | |
Exploit | 47 | |
Final Allocation | 40 | |
Financial Advisor | 21 | |
Financial Statements | 10 | |
Holdings | 1 | |
Indemnified Persons | 32 | |
Indemnitee | 57 | |
Indemnitor | 57 | |
Independent Accountant | 4 | |
Known Legal Proceedings | 10 | |
Liability Cap | 55 | |
Licensed Field | 47 | |
Licensed IP | 47 | |
Licensed Patents | 48 | |
Management-Level Employee | 44 | |
Material Contracts | 15 | |
MEGTEC Seller | 1 | |
MEGTEC Shares | 1 | |
MEGTEC Units | 1 | |
MEGTEC US | 1 | |
New Benefits | 35 | |
Notice of Disagreement | 4 | |
Outside Date | 52 | |
Owned Property | 13 | |
Parent | 1 | |
Parties | 1 | |
Patents | 66 | |
Permit | 10 | |
Purchase Price | 1 | |
Real Property Lease | 13 | |
Related Person | 21 | |
Required Regulatory Approvals | 9 | |
Restricted Period | 44 | |
Review Period | 4 | |
Scheduled Guarantee | 36 | |
Section 338(h)(10) Elections | 43 | |
Seller | 1 | |
Seller Benefit Plan | 17 | |
Seller Group | 62 | |
Seller Indemnitees | 54 | |
Seller Marks | 45 | |
Seller Parent | 1 | |
Sellers | 1 | |
Tax Claim | 38 | |
Tax Dispute | 42 | |
Tax Referee | 42 | |
Third-Party Claim | 57 | |
Trademarks | 66 | |
Transaction | 1 | |
Universal | 1 | |
Universal Seller | 1 | |
Universal Shares | 1 |
1. | Consent. |
(a) | Notwithstanding Section 7.04 of the Credit Agreement, Babcock & Wilcox India Holdings, Inc. may consummate an Asset Sale of its Equity Interests in Thermax Babcock & Wilcock Energy Solutions, Ltd. to Thermax Limited, provided that (i) such Asset Sale is consummated, and the terms and conditions of the documentation relating to such Asset Sale are, in accordance with the materials delivered to the Administrative Agent on May 25, 2018 (the ”Lender Consent Request”) and (ii) such documentation is substantially in the same form as the draft documentation delivered to the Administrative Agent on May 25, 2018, other than any changes thereto that are reasonably satisfactory to the Administrative Agent (the “Indian JV Sale”). |
(b) | Pursuant to Section 7.04(o) of the Credit Agreement, the Administrative Agent and the Required Lenders deem the terms and conditions relating to the sale of the Selected Assets described in the Orion Plan, and the documentation relating to such Asset Sale, satisfactory, provided that (i) such Asset Sale is consummated, and the terms and conditions of the documentation relating to such Asset Sale are, in accordance with the Lender Consent Request and (ii) such documentation is substantially in the same form as the draft documentation delivered to the Administrative Agent on May 29, 2018, other than any changes thereto that are reasonably satisfactory to the Administrative Agent (the “Orion Sale”). |
2. | Amendments to the Credit Agreement. |
(a) | The definition of “Liquidity” in Section 1.01 (Defined Terms) of the Credit Agreement shall be amended by inserting the text underlined below to read in its entirety as follows: |
(b) | Section 6.33 (Chief Implementation Officer) of the Credit Agreement shall be amended by inserting the text underlined below and deleting the text stricken below to read in its entirety as follows: |
3. | Amendment to the Collateral Agreement. |
4. | Additional Acknowledgement and Agreements. |
5. | Effectiveness; Conditions Precedent. |
(a) | the Administrative Agent shall have received each of the following documents or instruments in form and substance acceptable to the Administrative Agent: |
(i) | counterparts of this Amendment executed by the Loan Parties and the Required Lenders; |
(ii) | such documentation and other information as has been reasonably requested by the Administrative Agent with respect to Orion Sale and the Indian JV Sale; |
(iii) | a certificate of the chief financial officer or treasurer of the Borrower certifying that as of the Amendment No. 7 Effective Date (A) all of the representations and warranties in this Amendment are true and correct in all material respects (or, to the extent any such representation and warranty is modified by a materiality or Material Adverse Effect standard, in all respects) as of such date (except to the extent that such representations and |
(iv) | a solvency certificate, executed by a Responsible Officer of the Borrower in form and substance reasonably acceptable to the Administrative Agent, which, among other things, shall certify that the Borrower will be Solvent after giving effect to the consummation of the Orion Sale and the Indian JV Sale on a pro forma basis. |
(b) | without prejudice to, or limiting the Borrower’s obligations under, Section 10.04 (Expenses; Indemnity; Damage Waiver) of the Credit Agreement, all outstanding fees, costs and expenses due to the Administrative Agent and the Lenders, including on account of Agent’s Legal Advisor and FTI, shall have been paid in full to the extent that the Borrower has received an invoice therefor (with reasonable and customary supporting documentation) at least two Business Days prior to the Amendment No. 7 Effective Date (without prejudice to any post-closing settlement of such fees, costs and expenses to the extent not so invoiced); |
(c) | each of the representations and warranties made by the Borrower in Section 6 hereof shall be true and correct. |
6. | Representations and Warranties. |
(a) | that both immediately prior to and immediately after giving effect to this Amendment, no Default exists; |
(b) | the representations and warranties contained in the Credit Agreement (as amended hereby) are true and correct in all material respects on and as of the date hereof (except to the extent that such representations and warranties (i) specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date and (ii) contain a materiality or Material Adverse Effect qualifier, in which case such representations and warranties shall be true and correct in all respects); |
(c) | the execution, delivery and performance by the Borrower and the other Loan Parties of this Amendment and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate, limited liability company or partnership action, including the consent of shareholders, partners and members where required, do not contravene any Loan Party or any of its Subsidiaries’ respective Constituent Documents, do not violate any Requirement of Law applicable to any Loan Party or any order or decree of any Governmental Authority or arbiter applicable to any Loan Party and do not require the consent of, authorization by, approval of, notice to, or filing or registration with, any Governmental Authority or any other Person in order to be effective and enforceable; |
(d) | this Amendment has been duly executed and delivered on behalf of the Borrower and the other Loan Parties; |
(e) | this Amendment constitutes a legal, valid and binding obligation of the Borrower and the other Loan Parties enforceable against the Borrower and the other Loan Parties in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, Debtor Relief Laws or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity; and |
(f) | as of the date hereof, all Liens, security interests, assignments and pledges encumbering the Collateral, created pursuant to and/or referred to in the Credit Agreement or the other Loan Documents, are valid, enforceable, duly perfected to the extent required by the Loan Documents, non-avoidable, first priority liens, security interests, assignments and pledges (subject to Liens permitted by Section 7.02 of the Credit Agreement), continue unimpaired, are in full force and effect and secure and shall continue to secure all of the obligations purported to be secured in the respective Security Instruments pursuant to which such Liens were granted. |
7. | Consent, Acknowledgement and Reaffirmation of Indebtedness and Liens. |
(a) | expressly consents to the amendments and modifications to the Credit Agreement and the Collateral Agreement effected hereby; |
(b) | expressly confirms and agrees that, notwithstanding the effectiveness of this Amendment, each Loan Document to which it is a party is, and all of the obligations and liabilities of such Loan Party to the Administrative Agent, the Lenders and each other Secured Party contained in the Loan Documents to which it is a party (in each case, as amended and modified by this Amendment), are and shall continue to be, in full force and effect and are hereby reaffirmed, ratified and confirmed in all respects and, without limiting the foregoing, agrees to be bound by and abide by and operate and perform under and pursuant to and comply fully with all of the terms, conditions, provisions, |
(c) | to the extent such party has granted Liens or security interests on any of its properties or assets pursuant to any of the Loan Documents to secure the prompt and complete payment, performance and/or observance of all or any part of its Obligations to the Administrative Agent, the Lenders, and/or any other Secured Party, acknowledges, ratifies, remakes, regrants, confirms and reaffirms without condition, all Liens and security interests granted by such Loan Party to the Administrative Agent for their benefit and the benefit of the Lenders, pursuant to the Credit Agreement and the other Loan Documents, and acknowledges and agrees that all of such Liens and security interests are intended and shall be deemed and construed to continue to secure the Obligations under the Loan Documents, as amended, restated, supplemented or otherwise modified and in effect from time to time, including but not limited to, the Loans made by, and Letters of Credit provided by, the Administrative Agent and the Lenders to the Borrower and/or the other Loan Parties under the Credit Agreement, and all extensions renewals, refinancings, amendments or modifications of any of the foregoing; |
(d) | agrees that this Amendment shall in no manner impair or otherwise adversely affect any of the Liens and security interests granted in or pursuant to the Loan Documents; and |
(e) | acknowledges and agrees that: (i) the Guaranty and any obligations incurred thereunder, have been provided in exchange for “reasonably equivalent value” (as such term is used under the Bankruptcy Code and applicable state fraudulent transfer laws) and “fair consideration” (as such term is used under applicable state fraudulent conveyance laws) and (ii) each grant or perfection of a Lien or security interest on any Collateral provided in connection with Loan Documents, this Amendment and/or any negotiations with the Administrative Agent and/or the Lenders in connection with a “workout” of the Obligations is intended to constitute, and does constitute, a “contemporaneous exchange for new value” (as such term is used in section 547 of the Bankruptcy Code). |
8. | Releases; Waivers. |
9. | Entire Agreement. |
10. | Full Force and Effect of Credit Agreement. |
11. | Counterparts; Effectiveness. |
12. | Governing Law; Jurisdiction; Waiver of Jury Trial. |
13. | Severability. |
14. | References. |
15. | Successors and Assigns. |
16. | Lender Acknowledgment. |
17. | Amendments. |
1.1 | Designation of Participating Employers |
1.2 | Obligations of Participating Employers |
1.3 | Withdrawal of a Participating Employer |
2.1 | Eligibility |
2.2 | Participation |
(a) | The date he is notified, in writing, that he is no longer a Participant in the Plan; |
(b) | The date he is no longer employed by the Plan Sponsor or any Participating Employer; or |
(c) | The date the Plan terminates. |
2.3 | Severance Benefits |
(a) | Salary continuation, to begin as soon as administratively practicable after the Participant’s date of termination of employment and the revocation period described in the general release, equal to 52 weeks base salary as in effect on the date of termination, net of applicable tax withholding. |
(b) | Payment of the employer share of the “Applicable Premium” for three months of “Continuation Coverage” in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended and regulations and rulings issued thereunder (“COBRA”) for the medical, dental and/or vision benefits in effect for the Participant and his Qualified Beneficiaries on the date of termination, provided that Participant is eligible for and elects Continuation Coverage in accordance with COBRA. (The Participant will be responsible for the balance of the Applicable Premium during the three month period, and will be responsible for the entire premium thereafter). |
(c) | Access to employer-paid outplacement services for the twelve (12) month period beginning on the expiration of the general release agreement revocation period. |
(d) | If the Participant is entitled to Continuation Coverage under an employer-sponsored group health plan as a result of his termination of employment, the “Maximum Required Period” for such continuation coverage for the Participant and his or her Qualified Beneficiaries shall be 18 months. |
3.1 | Funding Policy |
3.2 | Contributions |
4.1 | Plan Administrator |
4.2 | Powers and Duties of the Plan Administrator |
4.3 | Allocation and Delegation of Responsibility |
4.4 | Reliance by Plan Sponsor |
4.5 | Indemnification |
4.6 | Claims Procedure |
(a) | the specific reason or reasons for the denial of benefits; |
(b) | a specific reference to the pertinent provisions of the Plan upon which the denial is based; |
(c) | a description of any additional material or information necessary for the claimant to perfect his claim for benefits and an explanation of why such material and information is necessary; and |
(d) | an explanation of the review procedure provided below. |
5.1 | Amendment |
5.2 | Termination |
6.1 | Action by the Plan Sponsor |
6.2 | Recovery of Overpayments |
6.3 | Data |
6.4 | Headings |
6.5 | Construction and Controlling Law |
6.6 | No Waiver or Estoppel |
6.7 | Severability |
• | Babcock & Wilcox Construction Co., LLC |
• | Diamond Power International, Inc. |
• | Babcock & Wilcox MEGTEC, LLC |
• | Babcock & Wilcox Power Generation Group Canada Corp. |
• | Americon Equipment Services, Inc. |
• | Americon, Inc. |
• | Delta Power Services, LLC |
• | Palm Beach Resource Recovery Corporation |
• | Power Systems Operations, Inc. |
• | Babcock & Wilcox Universal, Inc. |
• | Babcock & Wilcox SPIG, Inc. |
• | Babcock & Wilcox Enterprises, Inc. |
1. | I have reviewed this quarterly report on Form 10-Q of Babcock & Wilcox Enterprises, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
August 9, 2018 | /s/ Leslie C. Kass |
Leslie C. Kass | |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Babcock & Wilcox Enterprises, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
August 9, 2018 | /s/ Joel K. Mostrom |
Joel K. Mostrom | |
Chief Financial Officer |
(1) | the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of B&W as of the dates and for the periods expressed in the Report. |
Dated: August 9, 2018 | /s/ Leslie C. Kass |
Leslie C. Kass | |
President and Chief Executive Officer |
(1) | the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of B&W as of the dates and for the periods expressed in the Report. |
Dated: August 9, 2018 | /s/ Joel K. Mostrom |
Joel K. Mostrom | |
Chief Financial Officer |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Aug. 03, 2018 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | BW | |
Entity Registrant Name | BABCOCK & WILCOX ENTERPRISES, INC. | |
Entity Central Index Key | 0001630805 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 168,675,097 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Statement [Abstract] | ||||
Revenues | $ 291,337 | $ 306,231 | $ 544,513 | $ 654,303 |
Costs and expenses: | ||||
Cost of operations | 332,403 | 375,824 | 609,748 | 674,282 |
Selling, general and administrative expenses | 52,248 | 57,370 | 114,746 | 114,056 |
Goodwill impairment | 37,540 | 0 | 37,540 | 0 |
Restructuring activities and spin-off transaction costs | 3,826 | 1,952 | 10,688 | 4,984 |
Research and development costs | 1,287 | 2,437 | 2,429 | 4,230 |
Loss on asset disposals, net | 1,384 | 2 | 1,384 | 2 |
Total costs and expenses | 428,688 | 437,585 | 776,535 | 797,554 |
Equity in income and impairment of investees | 0 | (15,232) | (11,757) | (14,614) |
Operating loss | (137,351) | (146,586) | (243,779) | (157,865) |
Other income (expense): | ||||
Interest income | 107 | 125 | 260 | 237 |
Interest expense | (11,877) | (6,283) | (25,329) | (7,986) |
Loss on debt extinguishment | (49,241) | 0 | (49,241) | 0 |
Benefit plans, net | 7,086 | 5,249 | 14,083 | 9,462 |
Foreign exchange | (20,198) | 2,294 | (17,741) | 2,339 |
Other – net | (131) | 43 | 266 | 78 |
Total other income (expense) | (74,254) | 1,428 | (77,702) | 4,130 |
Loss before income tax expense (benefit) | (211,605) | (145,158) | (321,481) | (153,735) |
Income tax expense (benefit) | (1,934) | 3,458 | 5,029 | 346 |
Loss from continuing operations | (209,671) | (148,616) | (326,510) | (154,081) |
Loss from discontinued operations, net of tax | (55,932) | (2,234) | (59,428) | (3,610) |
Net loss | (265,603) | (150,850) | (385,938) | (157,691) |
Net income attributable to noncontrolling interest | (165) | (149) | (263) | (353) |
Net loss attributable to stockholders | $ (265,768) | $ (150,999) | $ (386,201) | $ (158,044) |
Basic and diluted loss per share - continuing operations (in dollars per share) | $ (1.68) | $ (3.05) | $ (3.85) | $ (3.16) |
Basic and diluted loss per share - discontinued operations (in dollars per share) | (0.44) | (0.04) | (0.70) | (0.08) |
Basic and diluted loss per share (in dollars per share) | $ (2.12) | $ (3.09) | $ (4.55) | $ (3.24) |
Shares used in the computation of earnings per share: | ||||
Basic and diluted (in shares) | 125,207 | 48,854 | 84,921 | 48,797 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, issued (in shares) | 168,660,000 | 44,065,000 |
Common stock, outstanding (in shares) | 168,660,000 | 44,065,000 |
Treasury stock, at cost (in shares) | 5,830,000 | 5,681,000 |
BASIS OF PRESENTATION |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||
BASIS OF PRESENTATION | BASIS OF PRESENTATION These interim financial statements of Babcock & Wilcox Enterprises, Inc. ("B&W," "we," "us," "our" or "the Company") have been prepared in accordance with accounting principles generally accepted in the United States and Securities and Exchange Commission instructions for interim financial information, and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017 ("Annual Report"). Accordingly, significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed in our Annual Report. We have included all adjustments, in the opinion of management, consisting only of normal, recurring adjustments, necessary for a fair presentation of the interim financial statements. We have eliminated all intercompany transactions and accounts. We present the notes to our condensed consolidated financial statements on the basis of continuing operations, unless otherwise stated. Going Concern Considerations The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of the going concern uncertainty. We face liquidity challenges from additional losses recognized in the fourth quarter of 2017 and the first half of 2018 on our European renewable energy contracts described in Note 5 to the condensed consolidated financial statements, which caused us to be out of compliance with certain financial covenants in the agreements governing certain of our debt at December 31, 2017, March 31, 2018 and June 30, 2018. To avoid default, we obtained amendments and waivers to our U.S. revolving credit facility, dated May 11, 2015 (as amended, the "U.S. Revolving Credit Facility") that temporarily waived these financial covenant defaults, as described in Note 17. In an effort to address our liquidity needs and the going concern uncertainty, we have:
Additionally, we continue to evaluate further dispositions and additional opportunities for cost savings. We also continue to pursue insurance recoveries, additional relief from customers and will pursue other claims where appropriate and available. Management believes it is taking all prudent actions to address the substantial doubt about our ability to continue as a going concern, but we cannot assert that it is probable that our plans will fully mitigate the liquidity challenges we face. Our plan is designed to provide us with what we believe will be adequate liquidity to meet our obligations for at least the twelve month period following August 9, 2018; however, our remediation plan depends on conditions and matters that may be outside of our control, including regulatory approvals that may be required to sell certain assets, agreement to concessions from customers on the Renewable loss contracts as required under the amended terms of our U.S. Revolving Credit Facility and our ability to obtain and maintain sufficient capacity to support contract security requirements for current and future business. Additionally, our ability to operate within the amended covenants and borrowing limits associated with our U.S. Revolving Credit Facility are dependent on our future financial operating results. If we cannot continue as a going concern, material adjustments to the carrying values and classifications of our assets and liabilities and the reported amounts of income and expense would be required. |
EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share of our common stock, net of noncontrolling interest:
Because we incurred a net loss in the three and six months months ended June 30, 2018 and 2017, basic and diluted shares are the same. If we had net income in the three months ended June 30, 2018 and 2017, diluted shares would include an additional 0.8 million and 0.3 million shares, respectively. If we had net income in the six months ended June 30, 2018 and 2017, diluted shares would include an additional 0.9 million and 0.4 million shares, respectively. We excluded 3.2 million and 1.9 million shares related to stock options from the diluted share calculation for the three months ended June 30, 2018 and 2017, respectively, because their effect would have been anti-dilutive. We excluded 2.5 million and 1.9 million shares related to stock options from the diluted share calculation for the six months ended June 30, 2018 and 2017, respectively, because their effect would have been anti-dilutive. |
DISCONTINUED OPERATIONS |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS On June 5, 2018, we entered into a stock purchase agreement with Dürr AG and its wholly owned subsidiary, Dürr Inc., to sell our MEGTEC and Universal businesses for $130 million, subject to adjustment. As a result, the MEGTEC and Universal businesses, which were previously included in our Industrial segment, are classified as held for sale and as discontinued operations because the disposal represents a strategic shift that will have a major effect on our operations. Accordingly, we recorded a $72.3 million non-cash impairment charge in June 2018 to reduce the carrying value of the MEGTEC and Universal businesses to the fair value, less an amount of estimated sale costs; the non-cash impairment charge is included in Loss from discontinued operations, net of tax, and is presented below as a goodwill impairment. The sale is expected to close in third quarter 2018, subject to the satisfaction of customary closing conditions, including approval by the Committee on Foreign Investment in the United States. We expect to use proceeds from the transaction primarily to reduce outstanding balances under our bank credit facilities. The following table presents selected financial information regarding the discontinued operations included in the Condensed Consolidated Statement of Operations:
The following table presents the major classes of assets that have been presented as assets and liabilities held for sale in our Condensed Consolidated Balance Sheets:
The significant components included in our Condensed Consolidated Statements of Cash Flows for the discontinued operations are as follows:
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SEGMENT REPORTING |
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Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTING Our operations are assessed based on three reportable segments, which are summarized as follows:
The segment information presented in the table below reflects the product line revenues that are reviewed by each segment's manager. These gross product line revenues exclude eliminations of revenues generated from sales to other segments or to other product lines within the segment. The primary component of the Power segment elimination is revenue associated with construction services. An analysis of our operations by segment is as follows:
Beginning in 2018, we changed our primary measure of segment profitability from gross profit to adjusted earnings before interest, tax, depreciation and amortization ("EBITDA"). The presentation of the components of our gross profit and adjusted EBITDA in the tables below are consistent with the way our chief operating decision maker reviews the results of our operations and makes strategic decisions about our business. Items such as gains or losses on asset sales, mark-to-market ("MTM") pension adjustments, restructuring and spin costs, impairments, losses on debt extinguishment, costs related to financial consulting required under Amendments 3 and 5 to our U.S. Revolving Credit Facility and other costs that may not be directly controllable by segment management are not allocated to the segment. Adjusted EBITDA for each segment is presented below with a reconciliation to net income. Adjusted EBITDA is not a recognized term under GAAP and should not be considered in isolation or as an alternative to net earnings (loss), operating profit (loss) or as an alternative to cash flows from operating activities as a measure of our liquidity. Adjusted EBITDA as presented below differs from the calculation used to compute our leverage ratio and interest coverage ratio as defined by our U.S. Revolving Credit Facility. Because all companies do not use identical calculations, the amounts presented for Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.
(1) Gross profit by segment excludes intangible amortization but includes depreciation.
(1) Power segment adjusted EBITDA includes $6.4 million and $5.0 million of net benefit from pension and other postretirement benefit plans excluding MTM adjustments in the three months ended June 30, 2018 and 2017, respectively. Power segment adjusted EBITDA includes $13.2 million and $10.0 million of net benefit from pension and other postretirement benefit plans excluding MTM adjustments in the six months ended June 30, 2018 and 2017, respectively. (2) Allocations are excluded from discontinued operations. Accordingly, allocations previously absorbed by the MEGTEC and Universal businesses in the Industrial segment have been included with other unallocated costs in Corporate, and total $2.9 million and $2.2 million in the three months ended June 30, 2018 and 2017, respectively, and $5.7 million and $4.4 million in the six months ended June 30, 2018 and 2017, respectively. |
REVENUE RECOGNITION AND CONTRACTS |
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REVENUE RECOGNITION AND CONTRACTS | REVENUE RECOGNITION AND CONTRACTS Adoption of Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("Topic 606") On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to all contracts that were not completed as of January 1, 2018. Results for reporting periods beginning on or after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. We recorded a $0.5 million net increase to opening retained earnings as of January 1, 2018 from the cumulative effect of adopting Topic 606 that primarily related to transitioning the timing of certain sales commissions expense. The effect on revenue from adopting Topic 606 was not material for the six months ended June 30, 2018. Revenue Recognition A performance obligation is a contractual promise to transfer a distinct good or service to the customer. A contract's transaction price is allocated to each distinct performance obligation and is recognized as revenue when (point in time) or as (over time) the performance obligation is satisfied. Revenue from goods and services transferred to customers at a point in time, which includes certain aftermarket parts and services primarily in the Power and Industrial segments, accounted for 23% and 18% of our revenue for the three months ended June 30, 2018 and 2017, respectively, and 23% and 22% of our revenue for the six months ended June 30, 2018 and 2017, respectively. Revenue on these contracts is recognized when the customer obtains control of the asset, which is generally upon shipment or delivery and acceptance by the customer. Standard commercial payment terms generally apply to these sales. Revenue from products and services transferred to customers over time accounted for 77% and 82% of our revenue for the three months ended June 30, 2018 and 2017, respectively, and 77% and 78% of our revenue for the six months ended June 30, 2018 and 2017, respectively. Revenue recognized over time primarily relates to customized, engineered solutions and construction services from all three of our segments. Typically, revenue is recognized over time using the percentage-of-completion method that uses costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead and, when appropriate, SG&A expenses. Variable consideration in these contracts includes estimates of liquidated damages, contractual bonuses and penalties, and contract modifications. Substantially all of our revenue recognized over time under the percentage-of-completion method contain a single performance obligation as the interdependent nature of the goods and services provided prevents them from being separately identifiable within the contract. Generally, we try to structure contract milestones to mirror our expected cash outflows over the course of the contract; however, the timing of milestone receipts can greatly affect our overall cash position and have in 2018 in our Renewable segment. Refer to Note 4 for our disaggregation of revenue by product line. Contract modifications are routine in the performance of our contracts. Contracts are often modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct and, therefore, are accounted for as part of the existing contract, with cumulative adjustment to revenue. We recognize accrued claims in contract revenues for extra work or changes in scope of work to the extent of costs incurred when we believe we have an enforceable right to the modification or claim and the amount can be estimated reliably and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim. We generally recognize sales commissions in equal proportion as revenue is recognized. Our sales agreements are structured such that commissions are only payable upon receipt of payment, thus a capitalized asset at contract inception has not been recorded for sales commission as a liability has not been incurred at that point. Contract Balances Contracts in progress, a current asset in our condensed consolidated balance sheets, includes revenues and related costs so recorded, plus accumulated contract costs that exceed amounts invoiced to customers under the terms of the contracts. Advance billings, a current liability in our consolidated balance sheets, includes advance billings on contracts invoices that exceed accumulated contract costs and revenues and costs recognized under the percentage-of-completion method. Most long-term contracts contain provisions for progress payments. Our unbilled receivables do not contain an allowance for credit losses as we expect to invoice customers and collect all amounts for unbilled revenues. We review contract price and cost estimates periodically as the work progresses and reflect adjustments proportionate to the percentage-of-completion in income in the period when those estimates are revised. For all contracts, if a current estimate of total contract cost indicates a loss on a contract, the projected contract loss is recognized in full in the statement of operations and an accrual for the estimated loss on the uncompleted contract is included in other current liabilities in the balance sheet. In addition, when we determine that an uncompleted contract will not be completed on-time and the contract has liquidated damages provisions, we recognize the estimated liquidated damages we will incur and record them as a reduction of the estimated selling price in the period the change in estimate occurs. Losses accrued in advance of the percentage-of-completion of a contract are included in other accrued liabilities, a current liability, in our consolidated balance sheets. The following represent the components of our contracts in progress and advance billings on contracts included in our condensed consolidated balance sheets:
The impact of adopting Topic 606 on components of our contracts in progress and advance billings on contracts was not material at June 30, 2018. Backlog On June 30, 2018 we had $1,518 million of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 33%, 17% and 49% of our remaining performance obligations as revenue in the remainder of 2018, 2019 and thereafter, respectively. Changes in Contract Estimates As of June 30, 2018, we have estimated the costs to complete all of our in-process contracts in order to estimate revenues in accordance with the percentage-of-completion method of accounting. However, it is possible that current estimates could change due to unforeseen events, which could result in adjustments to overall contract costs. The risk on fixed-priced contracts is that revenue from the customer does not cover increases in our costs. It is possible that current estimates could materially change for various reasons, including, but not limited to, fluctuations in forecasted labor productivity, transportation, fluctuations in foreign exchange rates or steel and other raw material prices. Increases in costs on our fixed-price contracts could have a material adverse impact on our consolidated financial condition, results of operations and cash flows. Alternatively, reductions in overall contract costs at completion could materially improve our consolidated financial condition, results of operations and cash flows. Variations from estimated contract performance could result in material adjustments to operating results for any fiscal quarter or year. In the three and six months ended June 30, 2018 and 2017, we recognized changes in estimated gross profit related to long-term contracts accounted for on the percentage-of-completion basis, which are summarized as follows:
Renewable Loss Contracts We had four renewable energy contracts in Europe that were loss contracts at December 31, 2016. During the three months ended June 30, 2017, two additional renewable energy contracts in Europe became loss contracts. In the three months ended June 30, 2018 and June 30, 2017, we recorded $57.3 million and $115.2 million in net losses, respectively, inclusive of warranty expense as described in Note 15, resulting from changes in the estimated revenues and costs to complete certain European renewable energy contracts. These changes in estimates in the three months ended June 30, 2018 and 2017 included increases in our estimates of anticipated liquidated damages that reduced revenue associated with these six contracts by $3.1 million and $16.7 million, respectively. The total anticipated liquidated damages associated with these six contracts was $93.4 million and $49.6 million at June 30, 2018 and December 31, 2017, respectively. During the sixth months ended June 30, 2017 were corrections that reduced (increased) estimated contract losses at completion by $1.0 million, $(6.0) million and $1.1 million relating to the three months ended December 31, 2016, March 31, 2017 and June 30, 2017, respectively. Management has determined these amounts are immaterial to the consolidated financial statements in both previous periods. In the six months ended June 30, 2018 and June 30, 2017, we recorded $110.0 million and $112.2 million in net losses, respectively, inclusive of warranty expense as described in Note 15, resulting from changes in the estimated revenues and costs to complete certain European renewable energy contracts. These changes in estimates in the six months ended June 30, 2018 and 2017 included increases in our estimates of anticipated liquidated damages that reduced revenue associated with these six contracts by $16.3 million and $13.8 million, respectively. The charges recorded in the three and six months ended June 30, 2018 and June 30, 2017 were due to revisions in the estimated revenues and costs at completion during the period across the six loss contracts described below. Also, as described in Note 17, the August 9, 2018 amendment to the U.S. Revolving Credit Facility requires $25.0 million of concessions from customers on these Renewable loss contracts to be secured by August 31, 2018; however, these concessions have not been included in the contract estimates as of June 30, 2018 because they remained unsigned as of the filing date of these condensed consolidated financial statements. As of June 30, 2018, the status of these six loss contracts was as follows: The first contract, a waste-to-energy plant in Denmark, became a loss contract in the second quarter of 2016. As of June 30, 2018, this contract is approximately 97% complete and construction activities are complete as of the date of this report. The unit became operational during the second quarter of 2017, and is only pending completion of contractual trial operations and takeover activities and requirements, to which the customer has not yet agreed. Our estimates at June 30, 2018 assume complete takeover by the customer at the end of 2018. During the three and six months ended June 30, 2018, we recognized additional contract losses of $8.3 million and $15.3 million, respectively, on the contract as a result of differences in actual and estimated costs, schedule delays, issues encountered during trial operations and increases in expected warranty costs. Our estimate at completion as of June 30, 2018 includes $9.4 million of total expected liquidated damages. As of June 30, 2018, the reserve for estimated contract losses recorded in "other accrued liabilities" in our condensed consolidated balance sheet was $3.1 million. In the three and six months ended June 30, 2017, we recognized additional contract losses of $10.5 million as a result of differences in actual and estimated costs and schedule delays in the second quarter of 2017. As of June 30, 2017, this contract had $3.9 million of accrued losses and was 94% complete. The second contract, a biomass plant in the United Kingdom, became a loss contract in the fourth quarter of 2016. As of June 30, 2018, this contract was approximately 86% complete. Commissioning activities began in the first quarter of 2018, construction activities are substantially complete, startup activities are underway and takeover by the customer is expected early in the fourth quarter of 2018. During the three and six months ended June 30, 2018, we recognized additional contract losses of $9.3 million and $13.4 million, respectively, on this contract as a result of repairs required during startup commissioning activities in the second quarter of 2018, increases in expected warranty costs, changes in construction cost estimates, subcontractor productivity being lower than previous estimates, and additional expected punch list and other commissioning costs. Our estimate at completion as of June 30, 2018 includes $19.8 million of total expected liquidated damages due to schedule delays. Our estimate at completion as of June 30, 2018 also includes contractual bonus opportunities for guaranteed higher power output (discussed further below). As of June 30, 2018, the reserve for estimated contract losses recorded in "other accrued liabilities" in our condensed consolidated balance sheet was $10.6 million. In the three and six months ended June 30, 2017, we recognized losses of $41.2 million and $37.4 million, respectively, from changes in construction cost estimates schedule delays, and as of June 30, 2017, this contract had $16.6 million of accrued losses and was 69% complete. The third contract, a biomass plant in Denmark, became a loss contract in the fourth quarter of 2016. As of June 30, 2018, this contract was approximately 99% complete and construction activities are complete as of the date of this report. The unit became operational during the second quarter of 2017, and partial takeover was achieved in March 2018, when the contract moved into the warranty phase. Remaining activities relate to punch list finalization and are planned to be completed in the third quarter of 2018 after the customer's next planned outage. During the three and six months ended June 30, 2018, we recognized additional contract losses of $1.6 million and $3.5 million, respectively, as a result of changes in the estimated costs at completion. Our estimate at completion as of June 30, 2018 includes $7.0 million of total expected liquidated damages due to schedule delays. As of June 30, 2018, the reserve for estimated contract losses recorded in "other accrued liabilities" in our condensed consolidated balance sheet was $0.5 million. In the three and six months ended June 30, 2017, we recognized charges of $2.7 million and $5.5 million, respectively, from changes in our estimate at completion, and as of June 30, 2017, this contract had $1.5 million of accrued losses and was 95% complete. The fourth contract, a biomass plant in the United Kingdom, became a loss contract in the fourth quarter of 2016. As of June 30, 2018, this contract was approximately 88% complete. Commissioning activities began in the first quarter of 2018, construction was substantially complete at June 30, 2018. Startup of the unit occurred in May 2018, and synchronization to the electrical grid while firing on biomass fuel occurred in July 2018. We expect takeover by the customer in the third quarter after successful completion of trial operations and resolution of punchlist items. During the three and six months ended June 30, 2018, we revised our estimated revenue and costs at completion for this loss contract, which resulted in $12.8 million and $24.8 million, respectively, of additional contract losses due to challenges in startup commissioning activities in the second quarter of 2018, increases in expected warranty costs, subcontractor productivity being lower than previous estimates, additional expected punch list and other commissioning cost, estimated claim settlements and estimated liquidated damages. Our estimate at completion as of June 30, 2018 includes $19.7 million of total expected liquidated damages due to schedule delays. Our estimate at completion as of June 30, 2018 also includes contractual bonus opportunities for guaranteed higher power output (discussed further below). As of June 30, 2018, the reserve for estimated contract losses recorded in "other accrued liabilities" in our condensed consolidated balance sheet was $6.3 million. In the three and six months ended June 30, 2017, we recognized additional contract losses of $23.8 million and $21.9 million, respectively, from changes in our estimate at completion, and as of June 30, 2017, this contract had $8.8 million of accrued losses and was 66% complete. The fifth contract, a biomass plant in the United Kingdom, became a loss contract in the second quarter of 2017. As of June 30, 2018, this contract was approximately 62% complete, and we expect construction will be substantially completed on this contract in late 2018 with takeover by the customer in the third quarter of 2019. During the three and six months ended June 30, 2018, we revised our estimated revenue and costs at completion for this loss contract, which resulted in $21.4 million and $39.7 million, respectively, of additional contract losses. First quarter 2018 changes in estimate on this fifth contract relate primarily to taking over of the civil scope from our joint venture partner, which entered administration (similar to filing for bankruptcy in the U.S.) in late February 2018 and receiving regulatory release later than expected (March 29, 2018) to begin repairs to the failed steel beam, which further increased costs to complete remaining work streams in a compressed time frame. Full access to the site was obtained on June 6, 2018 after the steel beam repairs were completed. Second quarter 2018 changes in estimated costs to complete this contract reflect an extended schedule from greater challenges in restarting work on a site that had been idle pending repairs on the failed steel beam, including the extent of items that had been damaged from weather exposure, and increases in expected warranty costs. Our estimate at completion as of June 30, 2018 includes $21.0 million of total expected liquidated damages due to schedule delays. As of June 30, 2018, the reserve for estimated contract losses recorded in "other accrued liabilities" in our condensed consolidated balance sheet was $29.0 million. In the three and six months ended June 30, 2017, we recognized charges of $23.3 million from changes in our estimate at completion, and as of June 30, 2017, this contract had $9.4 million of accrued losses and was 57% complete. This fifth project also includes a rejection clause that gives the customer the option to reject the deliverable, recover all monies paid to us and our partner (up to approximately $144 million), and require us to restore the property to its original state if a certain contractual milestone is not met by September 30, 2018. As of June 30, 2018, we believe we will meet the regulatory approval requirements intended by the milestone, but do not expect to be able to meet the milestone as defined in the contract unless modified by the customer. Our June 30, 2018 estimate at completion does not assume the customer's exercise of the rejection right because management believes the customer will not exercise its rejection right; however, we cannot control whether the customer will agree to modify the contract or exercise its right to reject the contract and no assurances can be given in this regard. Additionally, meeting the regulatory approval requirements intended by the contract milestone by September 30, 2018 will require, among other things, the coordination of and cooperation from various subcontractors and the customer. Our project plans include accelerating construction work and taking other remedial actions, if necessary. Any material productivity or timing issues relating to those subcontractors may jeopardize our ability to meet the regulatory requirements intended by the contract milestone. The sixth contract, a waste-to-energy plant in the United Kingdom, became a loss contract in the second quarter of 2017. As of June 30, 2018, this contract was approximately 87% complete. Commissioning activities began in the first quarter of 2018, initial startup activities are underway, construction was substantially completed in July 2018, and customer takeover by the customer is expected early in the fourth quarter of 2018. During the three and six months ended June 30, 2018, we revised our estimated revenue and costs at completion for this loss contract, which resulted in additional contract losses of $3.9 million and $13.3 million due to additional schedule delays, inclusive of liquidated damages, estimated claim settlements, and increases in expected warranty costs. Our estimate at completion as of June 30, 2018 includes $16.4 million of total expected liquidated damages due to schedule delays. The change in the status of this contract in 2018 was primarily attributable to changes in the estimated costs at completion and schedule delays. As of June 30, 2018, the reserve for estimated contract losses recorded in "other accrued liabilities" in our condensed consolidated balance sheet was $2.6 million. In the three and six months ended June 30, 2017, we recognized additional contract losses of $18.5 million from changes in our estimate at completion, and as of June 30, 2017, this contract had $4.0 million of accrued losses and was 59% complete. In September 2017, we identified the failure of a structural steel beam on the fifth contract, which stopped work in the boiler building and other areas pending corrective actions to stabilize the structure. Provisional regulatory approval to begin structural repairs to the failed beam was obtained at the end of March 2018 (later than previously estimated), and full approval to proceed with repairs was obtained in April 2018. Full access to the site was obtained in June 2018 after completion of the repairs to the structure. The engineering, design and manufacturing of the steel structure were the responsibility of our subcontractors. A similar design was also used on the second and fourth contracts, and although no structural failure occurred on these two other contracts, work was also stopped in certain restricted areas while we added reinforcement to the structures, which also resulted in delays that lasted until late January 2018. The total costs related to the structural steel issues on these three contracts, including contract delays, are estimated to be approximately $46 million, which is included in the June 30, 2018 estimated losses at completion for these three contracts. Also during the third quarter of 2017, we implemented a design change in three of the renewable facilities to increase the guaranteed power output, which will allow us to achieve contractual bonus opportunities for the higher output. In the fourth quarter of 2017, we obtained agreement from certain customers to increase the value of these bonus opportunities and to provide partial relief on liquidated damages. The bonus opportunities and liquidated damages relief increased the estimated selling price of the three contracts by approximately $19 million in total, and this positive change in estimated cost to complete was fully recognized in 2017 because each was a loss contract. During the third quarter of 2016, we determined it was probable that we would receive a $15.5 million (DKK 100.0 million) insurance recovery for a portion of the losses on the first European renewable energy contract discussed above. In late May 2018, our insurer disputed coverage on our insurance claim. We believe that the dispute from the insurer is without merit and continue to believe we are entitled to the full value of the claim. We intend to aggressively pursue full recovery under the policy, and filed for arbitration in July 2018. However, an allowance for the entire receivable was recorded in the second quarter of 2018 based upon the dispute by the insurer, which is considered contradictory evidence in the accounting probability assessment of this loss recovery, even if it is believed to be without merit. The insurance recovery of $0 million and $15.5 million, net of allowance is recorded in accounts receivable - other in our condensed consolidated balance sheet at June 30, 2018 and December 31, 2017, respectively. |
RESTRUCTURING ACTIVITIES AND SPIN-OFF TRANSACTION COSTS |
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Restructuring Activities and Spin-Off Transaction Costs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING ACTIVITIES AND SPIN-OFF TRANSACTION COSTS | RESTRUCTURING ACTIVITIES AND SPIN-OFF TRANSACTION COSTS Restructuring Liabilities At the end of June 2018, we eliminated 74 positions, primarily in our U.S. and Canadian operations and corporate functions. These actions were intended to appropriately size our operations and support functions in response to the continuing decline in global markets for new build coal-fired power generation, the announcement of the MEGTEC and Universal sale and our liquidity needs. These severance actions are expected to result in $18.3 million of annual savings. Severance cost associated with these actions is expected to total approximately $5.5 million, of which $3.4 million was recorded in June 2018 and the remainder will be recorded in the balance of 2018 over the remaining service periods. Severance payments are expected to extend through mid-2019. Additionally, we implemented other initiatives and benefit changes expected to avoid or reduce costs totaling approximately $15.8 million annually. Restructuring also includes executive severance totaling $0.2 million and $5.1 million in the three and six months ended June 30, 2018, respectively. In the first quarter of 2018, the Senior Vice President and Chief Business Development Officer was terminated and the position eliminated as our opportunities in the Power segment continue to shift more toward aftermarket parts and service and retrofit opportunities in the Americas, and away from large international new-build prospects. This action was also in-line with our strategy to optimize the Power segment and overall cost structure for the current market environment. Also in the first quarter of 2018, the Chief Executive Officer position was transitioned to Leslie C. Kass. The remainder of the restructuring costs in the six months ended June 30, 2018 primarily relate to actions from the second half of 2017 that were intended to improve our global cost structure and increase our financial flexibility. These restructuring actions included a workforce reduction at both the business segment and corporate levels totaling approximately 9% of our global workforce, SG&A expense reductions and new cost control measures, and office closures and consolidations in non-core geographies. These actions included reduction of approximately 30% of B&W Vølund's workforce to align with a new execution model focused on B&W Vølund's core boiler, grate and environmental equipment technologies, with the balance-of-plant and civil construction scope being executed by a partner. In the three and six months ended June 30, 2017, restructuring costs relate primarily to a series of activities that took place prior to 2017 that were intended to help us maintain margins, make our costs more volume-variable and allow our business to be more flexible. These actions were primarily in the Power segment in advance of lower projected demand for power generation from coal in the United States. We made our manufacturing costs more volume-variable through the closure of manufacturing facilities and development of manufacturing arrangements with third parties. Also, we made our cost of engineering and supply chain more variable by creating a matrix organization capable of delivering products across multiple segments, and developing more volume-variable outsourcing arrangements with our joint venture partners and other third parties to meet fluctuating demand. Until the second quarter of 2018, these restructuring actions achieved the goal of maintaining gross margins in the Power segment. Quantification of cost savings, however, is significantly dependent upon volume assumptions that have changed since the restructuring actions were initiated. Restructuring liabilities are included in other accrued liabilities on our condensed consolidated balance sheets. Activity related to the restructuring liabilities is as follows:
Accrued restructuring liabilities at June 30, 2018 and 2017 relate primarily to employee termination benefits. Excluded from restructuring expense in the table above are non-cash restructuring charges that did not impact the accrued restructuring liability. In the three months ended June 30, 2018 and 2017, we recognized $0.4 million and $0.2 million, respectively, in restructuring related to gains on disposals of long-lived assets. In the six months ended June 30, 2018 and 2017, we recognized $0.2 million and $0.3 million, respectively, in non-cash restructuring expense related to losses on the disposals of long-lived assets. Spin-Off Transaction Costs Spin-off costs were primarily attributable to employee retention awards directly related to the spin-off from our former parent, The Babcock & Wilcox Company (now known as BWX Technologies, Inc.). In the three months ended June 30, 2017, spin costs were $0.5 million. In the six months ended June 30, 2018 and 2017, we recognized spin-off costs of $0.3 million and $0.9 million, respectively. |
PROVISION FOR INCOME TAXES |
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Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
PROVISION FOR INCOME TAXES | PROVISION FOR INCOME TAXES In the three months ended June 30, 2018, we recognized an income tax benefit of $1.9 million, resulting in an effective tax rate of 0.9%. Our effective tax rate for the three months ended June 30, 2018 was lower than our statutory rate primarily due to foreign losses in our Renewable segment and disallowed interest expense pursuant to the United States Tax Cuts and Jobs Act (the "Tax Act") that are subject to valuation allowances as well as the impact of the $37.5 million non-deductible goodwill impairment and other nondeductible expenses, offset by favorable discrete items of $0.4 million. The effective tax rate for the three months ended June 30, 2018 also reflects the reduced federal corporate income tax rate enacted as part of the Tax Act and the impact of a change in our mix of domestic and foreign earnings. We continue to analyze the different aspects of the Tax Act, which could potentially affect the provisional estimates that were recorded at December 31, 2017. In the three months ended June 30, 2017, income tax expense was $3.5 million, an effective tax rate of (2.4)% that was lower than our statutory rate primarily due to foreign losses in our Renewable segment that are subject to a valuation allowance, nondeductible expenses and unfavorable discrete items of $3.2 million. The discrete items include withholding tax on a forecasted distribution outside the US, partly offset by favorable adjustments to prior year foreign tax returns and the effect of vested and exercised share-based compensation awards. The tax benefit associated with the $18.2 million impairment of our equity method investment in India was offset by a valuation allowance. In the six months ended June 30, 2018, income tax expense was $5.0 million, an effective tax rate of (1.6)% that was lower than our statutory rate primarily due to the reasons noted above as well as an $18.4 million impairment of our equity method investment in India that was offset by valuation allowances and unfavorable discrete items of $1.8 million in the first quarter. The discrete items include a valuation allowance on the net deferred tax assets of one of our foreign subsidiaries and the income tax effects of vested and exercised share-based compensation awards. In the six months ended June 30, 2017, income tax benefit was $0.3 million, an effective tax rate of (0.2)% that was lower than our statutory rate primarily due to the reasons noted above and nondeductible transaction costs, which were offset by the effect of vested and exercised share-based compensation awards, both of which were discrete items in the first quarter of 2017. As a result of accumulations of the Company's stock among several large shareholders and the impact of the Rights Offering that was completed on April 30, 2018 we continue to monitor for the possibility of an ownership change as defined under Internal Revenue Code ("IRC") Section 382. Under IRC Section 382, a company has undergone an ownership change if shareholders owning at least 5% of the company have increased their holdings by more than 50% during the prior three-year period. Based on information that is publicly available, the Company does not currently believe it has experienced an ownership change. Small changes in ownership by shareholders owning at least 5% of the Company could result in an ownership change; however, if we had experienced an ownership change as of June 30, 2018, the future utilization of our federal net operating loss and credit carryforwards would be limited to approximately $9 million, annually, but quantification is dependent upon the value of the company multiplied by the long-term interest rate at the time of the ownership change. |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME | COMPREHENSIVE INCOME Gains and losses deferred in accumulated other comprehensive income (loss) ("AOCI") are reclassified and recognized in the condensed consolidated statements of operations once they are realized. The changes in the components of AOCI, net of tax, for the first two quarters in 2018 and 2017 were as follows:
(1) ASU 2016-1, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, requires investments to be measured at fair value through earnings each reporting period as opposed to changes in fair value being reported in other comprehensive income. The standard is effective as of January 1, 2018 and requires application by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. (2) Includes the reclassification of the unamortized balance of the curtailment gain, net of tax as described in Note 16. The amounts reclassified out of AOCI by component and the affected condensed consolidated statements of operations line items are as follows (in thousands):
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CASH AND CASH EQUIVALENTS |
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Cash and Cash Equivalents [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS The components of cash and cash equivalents are as follows:
Our U.S. Revolving Credit Facility described in Note 17 allows for nearly immediate borrowing of available capacity to fund cash requirements in the normal course of business, meaning that the minimum United States cash on hand is maintained to minimize borrowing costs. |
INVENTORIES |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES The components of inventories are as follows:
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EQUITY METHOD INVESTMENTS |
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Jun. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENTS | EQUITY METHOD INVESTMENTS Joint ventures in which we have significant ownership and influence, but not control, are accounted for in our consolidated financial statements using the equity method of accounting. We assess our investments in unconsolidated affiliates for other-than-temporary-impairment when significant changes occur in the investee's business or our investment philosophy. Such changes might include a series of operating losses incurred by the investee that are deemed other than temporary, the inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment or a change in the strategic reasons that were important when we originally entered into the joint venture. As noted below, an other-than-temporary-impairment occurred for our equity method investment in TBWES and we measured our investment in the unconsolidated affiliate at fair value. Our former equity method investment in BWBC had a manufacturing facility that designs, manufactures, produces and sells various power plant and industrial boilers primarily in China. During the first quarter of 2018, we sold our interest in BWBC to our joint venture partner in China for approximately $21.1 million, resulting in a gain of approximately $6.5 million. Proceeds from this sale, net of $1.3 million of withholding tax, was $19.8 million. After the sale of our interest in BWBC, our primary remaining equity method investment is in TBWES. TBWES has a manufacturing facility that produces boiler parts and equipment intended primarily for new build coal boiler contracts in India. During the second quarter of 2017, both we and our joint venture partner decided to make a strategic change in the Indian joint venture due to the decline in forecasted market opportunities in India, at which time we recorded in an $18.2 million other-than-temporary-impairment to the expected recoverable value of our investment in the joint venture. During the first quarter of 2018, based on a preliminary agreement to sell our investment in TBWES, we recognized an additional $18.4 million other-than-temporary-impairment. The impairment charge was based on the difference in the carrying value of our investment in TBWES and the preliminary sale price. In July 2018, we completed the sale of our investment in TBWES together with the settlement of related contractual claims and received $15.0 million in cash, of which $7.7 million related to our investment in TBWES. The remaining carrying value of our interest in TBWES was $7.7 million at June 30, 2018 and $26.0 million at December 31, 2017. Additionally, AOCI includes $2.6 million at June 30, 2018 for AOCI related to cumulative currency translation loss from our investment in TBWES, and is expected to be recognized as a loss in connection with closing the sale in the third quarter of 2018. |
GOODWILL |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL | GOODWILL The following summarizes the changes in the carrying amount of goodwill:
(1) Goodwill for MEGTEC and Universal are shown as part of noncurrent assets of discontinued operations. See Note 3 for a further description of discontinued operations. (2) Accumulated goodwill impairments were $50.0 million for the Renewable segment as of December 31, 2017 and $74.4 million and $36.9 for the Industrial segment as of June 30, 2018 and December 31, 2017, respectively. In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment (ASU 2017-04). The standard simplifies the subsequent measurement of goodwill by removing the requirement to perform a hypothetical purchase price allocation to compute the implied fair value of goodwill to measure impairment. Instead, goodwill impairment is measured as the difference between the fair value of the reporting unit and the carrying value of the reporting unit. The standard also clarifies the treatment of the income tax effect of tax-deductible goodwill when measuring goodwill impairment loss. This standard is effective for annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019, with early adoption permitted for impairment tests performed after January 1, 2017. We early adopted ASU 2017-04 on April 1, 2018, effective the first day of our 2018 second quarter. ASC 350-30, Goodwill and Other Intangible Assets, requires that goodwill and other unamortizable intangible assets be tested for impairment at least annually or earlier if there are impairment indicators. Interim impairment testing as of June 30, 2018 was performed at SPIG due to lower bookings in the second quarter of 2018 than previously forecasted, which resulted in a reduction in the forecast for the reporting unit. We compared the fair value of the reporting unit and the carrying value of the reporting unit to measure goodwill impairment loss as required by ASU 2017-04. Fair value was determined using the combination of a discounted cash flow method (income approach) and the guideline public company method (market comparable approach), weighted equally in determining the fair value. The market comparable approach estimates fair value using market multiples of various financial measures compared to a set of comparable public companies. In performing the valuations, significant assumptions utilized include unobservable Level 3 inputs including cash flows and long-term growth rates reflective of management’s forecasted outlook, and discount rates inclusive of risk adjustments consistent with current market conditions. A discount rate of 14.5% was used, which is based on the weighted average cost of capital using guideline public company data, factoring in current market data and company specific risk factors. As a result of the impairment test, we recognized a $37.5 million impairment of goodwill in the SPIG reporting unit. After the impairment, the SPIG reporting unit did not have any remaining goodwill. |
INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INTANGIBLE ASSETS | INTANGIBLE ASSETS Our intangible assets are as follows:
The following summarizes the changes in the carrying amount of intangible assets:
Amortization of intangible assets is included in cost of operations and SG&A in our condensed consolidated statement of operations but it is not allocated to segment results. Estimated future intangible asset amortization expense is as follows (in thousands):
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PROPERTY, PLANT & EQUIPMENT |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, PLANT & EQUIPMENT | PROPERTY, PLANT & EQUIPMENT Property, plant and equipment is stated at cost. The composition of our property, plant and equipment less accumulated depreciation is set forth below:
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WARRANTY EXPENSE |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANTY EXPENSE | WARRANTY EXPENSE We may offer assurance type warranties on products and services we sell. Changes in the carrying amount of our accrued warranty expense are as follows:
We accrue estimated expense included in cost of operations to satisfy contractual warranty requirements when we recognize the associated revenues on the related contracts, or in the case of a loss contract, the full amount of the estimated warranty costs is accrued when the contract becomes a loss contract. In addition, we record specific provisions or reductions where we expect the actual warranty costs to significantly differ from the accrued estimates. Such changes could have a material effect on our consolidated financial condition, results of operations and cash flows. Warranty expense in the three months ended June 30, 2018 includes a $15.1 million increase in expected warranty costs for the six European renewable energy loss contracts based on experience from the startup and commissioning activities in the second quarter of 2018 and $5.3 million of specific provisions on certain contracts in the Power segment for specific technical matters and customer requirements. |
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS | PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS Components of net periodic benefit cost (benefit) included in net income (loss) are as follows:
During the second quarter of 2018, lump sum payments from our Canadian pension plan resulted in a plan settlement gain of $0.1 million, which also resulted in interim mark to market accounting for the pension plan. The mark to market adjustment in the second quarter of 2018 was a gain of $0.4 million. The effect of these charges and mark to market adjustments are reflected in the "Recognized net actuarial loss (gain)" in the table above. The recognized net actuarial (gain) loss was recorded in our condensed consolidated statements of operations in the "Benefit plans, net" line item. There were no lump sum payments from our Canadian pension plan during the first quarter of 2018. During the first quarter of 2017, lump sum payments from our Canadian pension plan resulted in a plan settlement loss of $0.4 million, which also resulted in interim mark to market accounting for the pension plan. The mark to market adjustment in the first quarter of 2017 was a loss of $0.7 million. The effect of these charges and mark to market adjustments are reflected in the "Recognized net actuarial loss (gain)" in the table above. The recognized net actuarial (gain) loss was recorded in our condensed consolidated statements of operations in the "Benefit plans, net" line item. There were no lump sum payments from our Canadian pension plan during the second quarter of 2017. We terminated the Babcock & Wilcox Retiree Medical Plan (the "Retiree OPEB plan") effective December 31, 2016. The Retiree OPEB plan was originally established to provide secondary medical insurance coverage for retirees that had reached the age of 65, up to a lifetime maximum cost. In exchange for terminating the Retiree OPEB plan, the participants had the option to enroll in a third-party health care exchange, to which B&W agreed to contribute up to $750 a year for each of the next three years (beginning in 2017) to a health reimbursement account (“HRA”), provided the plan participant had not yet reached their lifetime maximum under the terminated Retiree OPEB plan. Based on the number of participants who enrolled in the new benefit plan, we recognized a curtailment gain of $10.8 million on December 31, 2016 for the actuarially determined difference in the liability for these participants in the Retiree OPEB plan and the new plan. The curtailment gain was deferred in accumulated other comprehensive income and was being recognized as income through 2020. Participants in the Retiree OPEB plan filed a class action lawsuit against B&W in 2017 asserting that the change in health care coverage breached B&W’s obligations under collective bargaining agreements. In April 2018, the court approved a settlement whereby B&W will contribute $1,000 a year for 2018 and 2019, and $1,100 a year thereafter for the life of a participant to an HRA. As a result of the settlement, the revised Retiree OPEB plan was actuarially remeasured as of April 1, 2018. The unamortized balance of the curtailment gain of $5.2 million and the related deferred tax of $1.3 million was reversed from AOCI and we recorded $5.2 million in other accumulated postretirement benefit liabilities for the actuarial value of the Retiree OPEB plan. We made contributions to our pension and other postretirement benefit plans totaling $4.7 million and $8.5 million during the three and six months ended June 30, 2018, respectively, as compared to $5.0 million and $6.4 million during the three and six months ended June 30, 2017, respectively. |
REVOLVING DEBT |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVOLVING DEBT | REVOLVING DEBT The components of our revolving debt are comprised of separate revolving credit facilities in the following locations:
U.S. Revolving Credit Facility On May 11, 2015, we entered into a credit agreement with a syndicate of lenders ("Credit Agreement") in connection with our spin-off from The Babcock & Wilcox Company which governs the U.S. Revolving Credit Facility. The Credit Agreement, which is scheduled to mature on June 30, 2020, provides for a senior secured revolving credit facility, initially in an aggregate amount of up to $600.0 million. The proceeds from loans under the Credit Agreement are available for working capital needs and other general corporate purposes, and the full amount is available to support the issuance of letters of credit, subject to the limits specified in the amendment described below. Since June 2016, we have entered into a number of amendments to the Credit Agreement (the "Amendments" and the Credit Agreement, as amended to date, the "Amended Credit Agreement"). The most recent Amendment, which we entered into on August 9, 2018, among other things, provided for the following modifications: (1) modifies the definition of adjusted EBITDA in the Amended Credit Agreement to exclude up to an additional $72.8 million of charges for certain Renewable segment contracts for periods including the quarter ended June 30, 2018 and allow further add backs to EBITDA for restructuring and other similar expenses; (2) modifies the financial covenants as described below; (3) modifies the amount of liquidity (as defined in the Amended Credit Agreement) we are required to maintain from at least $65.0 million as of the last business day of any calendar month to at least $50.0 million (or $40.0 million upon the consummation of certain asset sales and the receipt of at least $10.0 million of proceeds from the Last Out Loan described below) as of the last business day of any calendar month and on any day that a borrowing is made; (4) lowers the amount of outstanding borrowings under the U.S. Revolving Credit Facility that we are required to repay (without any reduction in commitments) with certain excess cash from $60.0 million to $50.0 million; (5) modifies the Company's ability to reinvest net cash proceeds from asset sales that trigger prepayment requirements to allow for the ability to retain up to $25.0 million of asset sale proceeds after receipt of the initial Last Out Loan funding described below; (6) permits an additional $15.0 million of cumulative net income losses attributable to eight specified Vølund contracts for the fiscal quarter ending September 30, 2018; (7) modifies certain contract completion milestones that we are required to meet in connection with six European Renewable loss contracts; (8) modifies the date by which we are required to sell at least $100 million of assets from March 31, 2019 to October 31, 2018; (9) requires us to achieve certain concessions from our renewable contract customers by September 30, 2018 that will generate at least $25.0 million of incremental benefits to us, (10) adds additional events of default related to the termination or rejection of certain contracts related to our Renewables segment; (11) permits and requires us to raise up to an additional net $30.0 million of last-out loans under the Amended Credit Agreement in connection with the Vintage Commitment described below; 12) consents to the sale of our Palm Beach Resource Recovery Corporation; and (13) eliminates a requirement to adjust on a pro forma basis our EBITDA after the sales of Megtec and Universal, and Palm Beach Resource Recovery Corporation. The Amended Credit Agreement and our obligations under certain hedging agreements and cash management agreements with our lenders and their affiliates continue to be (1) guaranteed by substantially all of our wholly owned domestic subsidiaries and certain of our foreign subsidiaries, but excluding our captive insurance subsidiary, and (2) secured by first-priority liens on certain assets owned by us and the guarantors. The Amended Credit Agreement requires interest payments on revolving loans on a periodic basis until maturity. We may prepay all loans at any time without premium or penalty (other than customary LIBOR breakage costs), subject to notice requirements. The Amended Credit Agreement requires us to make certain prepayments on any outstanding revolving loans after receipt of cash proceeds from certain asset sales or other events, subject to certain exceptions. Such prepayments may require us to reduce the commitments under the Amended Credit Agreement by a corresponding amount of such prepayments. Following the covenant relief period, such prepayments will not require us to reduce the commitments under the Amended Credit Agreement. After giving effect to the Amendments, loans outstanding under the Amended Credit Agreement bear interest at our option at either (1) the LIBOR rate plus 5.0% per annum during 2018, 6.0% per annum during 2019 and 7.0% per annum during 2020, or (2) the Base Rate plus 4.0% per annum during 2018, 5.0% per annum during 2019, and 6.0% per annum during 2020. The Base Rate is the highest of the Federal Funds rate plus 0.5%, the one month LIBOR rate plus 1.0%, or the administrative agent's prime rate. Interest expense associated with our U.S. Revolving Credit Facility loans for the six months ended June 30, 2018 was $14.1 million. Included in interest expense was $7.5 million of non-cash amortization of direct financing costs for the six months ended June 30, 2018. A commitment fee of 1.0% per annum is charged on the unused portions of the U.S. Revolving Credit Facility. A letter of credit fee of 2.5% per annum is charged with respect to the amount of each financial letter of credit outstanding, and a letter of credit fee of 1.5% per annum is charged with respect to the amount of each performance and commercial letter of credit outstanding. Additionally, an annual facility fee of $1.5 million is payable on the first business day of 2018 and 2019, and a pro rated amount is payable on the first business day of 2020. A deferred fee of 2.5% is charged, but may be reduced by up to 1.5% if the Company achieves certain asset sales. The Amended Credit Agreement includes financial covenants that are tested on a quarterly basis, based on the rolling four-quarter period that ends on the last day of each fiscal quarter. The maximum permitted senior debt leverage ratio as defined in the Amended Credit Agreement is:
The minimum consolidated interest coverage ratio as defined in the Amended Credit Agreement is:
Consolidated capital expenditures in each fiscal year are limited to $27.5 million. At June 30, 2018, borrowings under the Amended Credit Agreement and foreign facilities consisted of $200.4 million at an effective interest rate of 7.22%. Usage under the Amended Credit Agreement consisted of $196.3 million of borrowings, $20.4 million of financial letters of credit and $157.0 million of performance letters of credit. After giving effect to the Amendments, at June 30, 2018, we had approximately $28.6 million available for borrowings or to meet letter of credit requirements primarily based on our borrowing sublimit, our trailing 12 month adjusted EBITDA (as defined in the Amended Credit Agreement), and our leverage and interest coverage ratios (as defined in the Amended Credit Agreement) which were 7.51 and 1.94, respectively. As a result of the sale of our interest in TBWES, as discussed in Note 11, the U.S. Revolving Credit Facility was reduced from $450.0 million to $440.4 million in July 2018. As referenced above, our Amended Credit Agreement allows for us to incur up to $30.0 million of net proceeds of last-out loans. On August 9, 2018 we entered into a commitment letter (the “Vintage Commitment Letter”) with Vintage Capital Management LLC (the “Last Out Lender”), a related party, which provides a commitment for an aggregate principal amount of last-out loans (the “Last Out Loans”) that, when borrowed, will result in us receiving $30.0 million of aggregate net proceeds. The face principal amount of Last Out Loans is expected to be approximately $36.0 million, which includes the payment of a $2.0 million up-front fee that will be payable to the Last Out Lender on the date of the first funding of the Last Out Loans and to reflect original issue discount of 10%. The Last Out Loans will be incurred under our Amended Credit Agreement and will share on a pari passu basis with the guaranties and collateral provided thereunder to the existing lenders; provided, that the Last Out Loans will be subordinated in right of payment to the prior payment in full of all amounts owing to the existing lenders. The Last Out Loans will mature and be due in payable in full the day after the current maturity date of the U.S. Revolving Credit Facility. The Last Out Loans will be implemented by way of a further amendment to our Amended Credit Agreement prior to September 30, 2018 and, once implemented, will be available in multiple advances subject to the same conditions to borrowing as our existing U.S. Revolving Credit Facility. The first $10.0 million of Last Out Loans will be made available on the date of consummation of the sale of all of the issued and outstanding capital stock of Palm Beach Resource Recovery Corporation, as further described in Note 25. Advances of Last Out Loans thereafter will be made upon our borrowing request but in formula that results in the aggregate amount of all loans requested being funded on a 50/50 basis between the Last Out Lender and the existing lenders under our U.S. Revolving Credit Facility. Once made, Last Out Loans may be prepaid, subject to the subordination provisions, but not re-borrowed. Last Out Loans will bear interest at a rate per annum equal to the then applicable LIBOR rate plus 14.00%, with 5.50% of such interest rate to be paid in cash and the remaining 8.50% payable in kind by adding such accrued interest to the principal amount of the Last Out Loans. Subject to the subordination provisions, the Last Out Loans shall be subject to all of the other same representations and warranties, covenants and events of default under the Amended Credit Agreement. The commitment evidenced by the Vintage Commitment Letter is fully backstopped by B. Riley FBR, Inc., a related party, pursuant to a backstop commitment letter between B. Riley FBR, Inc. and the Last Out Lender. In the event that the Last Out Lender is unable to, or fails to, fund any of its commitments under the Vintage Commitment Letter, then B. Riley FBR, Inc. will be required to do so. Foreign Revolving Credit Facilities Outside of the United States, we have revolving credit facilities in Turkey that are used to provide working capital to our operations in that country. These foreign revolving credit facilities allow us to borrow up to $4.1 million in aggregate and each have less than a year remaining to maturity. At June 30, 2018, we had $4.1 million in borrowings outstanding under these foreign revolving credit facilities at an effective weighted-average interest rate of 9.57%. Letters of Credit, Bank Guarantees and Surety Bonds Certain subsidiaries primarily outside of the United States have credit arrangements with various commercial banks and other financial institutions for the issuance of letters of credit and bank guarantees in association with contracting activity. The aggregate value of all such letters of credit and bank guarantees opened outside of the U.S. Revolving Credit Facility as of June 30, 2018 and December 31, 2017 was $195.4 million and $269.1 million, respectively. The aggregate value of all such letters of credit and bank guarantees that are partially secured by the U.S. Revolving Credit Facility as of June 30, 2018 was $67.2 million. The aggregate value of the letters of credit provided by the U.S. Revolving Credit Facility in support of letters of credit outside of the United States was $38.8 million as of June 30, 2018. We have posted surety bonds to support contractual obligations to customers relating to certain contracts. We utilize bonding facilities to support such obligations, but the issuance of bonds under those facilities is typically at the surety's discretion. Although there can be no assurance that we will maintain our surety bonding capacity, we believe our current capacity is adequate to support our existing contract requirements for the next 12 months. In addition, these bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds those underwriters issue in support of some of our contracting activity. As of June 30, 2018, bonds issued and outstanding under these arrangements in support of contracts totaled approximately $426.1 million. SECOND LIEN TERM LOAN FACILITY Extinguishment of the Second Lien Term Loan Facility Using $212.6 million of the proceeds from the Rights Offering, we fully repaid the Second Lien Term Loan Facility (described below) on May 4, 2018, plus accrued interest of $2.3 million. A loss on extinguishment of this debt of approximately $49.2 million was recognized in the second quarter of 2018 as a result of the remaining $32.5 million unamortized debt discount on the date of the repayment, $16.2 million of make-whole interest, and $0.5 million of fees associated with the extinguishment. Terms of the Second Lien Term Loan Facility On August 9, 2017, we entered into a second lien credit agreement (the "Second Lien Credit Agreement") with an affiliate of AIP, governing the Second Lien Term Loan Facility. The Second Lien Term Loan Facility consisted of a second lien term loan in the principal amount of $175.9 million, all of which was borrowed on August 9, 2017, and a delayed draw term loan facility in the principal amount of up to $20.0 million, which was drawn in a single draw on December 13, 2017. Borrowings under the second lien term loan, other than the delayed draw term loan, had a coupon interest rate of 10% per annum, and borrowings under the delayed draw term loan had a coupon interest rate of 12% per annum, in each case payable quarterly. As of March 7, 2018, the interest rates increased to 12% and 14% per annum, respectively, due to the covenant default. Undrawn amounts under the delayed draw term loan accrued a commitment fee at a rate of 0.50%, which was paid at closing. The second lien term loan and the delayed draw term loan had a scheduled maturity of December 30, 2020. In connection with our entry into the Second Lien Term Loan Facility, we used $50.9 million of the proceeds to repurchase and retire approximately 4.8 million shares of our common stock (approximately 10% of our shares outstanding) held by an affiliate of AIP, which was one of the conditions precedent for the Second Lien Term Loan Facility. Based on observable and unobservable market data, we determined the fair value of the shares we repurchased from the related party on August 9, 2017 was $16.7 million. We utilized a discounted cash flow model and estimates of our weighted average cost of capital on the transaction date to derive the estimated fair value of the share repurchase. The $34.2 million difference between the share repurchase price and the fair value of the repurchased shares was recorded as a discount on the Second Lien Term Loan Facility borrowing. Non-cash amortization of the debt discount and direct financing costs were being accreted to the carrying value of the loan through interest expense utilizing the effective interest method and an effective interest rate of 20.08%. Interest expense associated with our Second Lien Credit Agreement was comprised of the following:
The Second Lien Credit Agreement contained representations and warranties, affirmative and restrictive covenants, financial covenants and events of default substantially similar to those contained in the Amended Credit Agreement, subject to certain cushions. At March 31, 2018 and December 31, 2017, we were in default of several financial covenants associated with the Second Lien Credit Agreement, which resulted in our classification of all of the net carrying value as a current liability in our condensed consolidated balance sheet. Under the terms of the intercreditor agreement among the lenders under the Amended Credit Agreement and the Second Lien Credit Agreement, the lenders under the Second Lien Credit Agreement cannot enforce remedies against the collateral until after they provide notice of enforcement and after the expiration of a 180-day standstill period. The lenders under the Second Lien Credit Agreement did not provide such notice. The March 1, 2018 and April 10, 2018 Amended Credit Agreement amendments temporarily waived all events of default, including cross-default provisions. |
SECOND LIEN TERM LOAN FACILITY |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SECOND LIEN TERM LOAN FACILITY | REVOLVING DEBT The components of our revolving debt are comprised of separate revolving credit facilities in the following locations:
U.S. Revolving Credit Facility On May 11, 2015, we entered into a credit agreement with a syndicate of lenders ("Credit Agreement") in connection with our spin-off from The Babcock & Wilcox Company which governs the U.S. Revolving Credit Facility. The Credit Agreement, which is scheduled to mature on June 30, 2020, provides for a senior secured revolving credit facility, initially in an aggregate amount of up to $600.0 million. The proceeds from loans under the Credit Agreement are available for working capital needs and other general corporate purposes, and the full amount is available to support the issuance of letters of credit, subject to the limits specified in the amendment described below. Since June 2016, we have entered into a number of amendments to the Credit Agreement (the "Amendments" and the Credit Agreement, as amended to date, the "Amended Credit Agreement"). The most recent Amendment, which we entered into on August 9, 2018, among other things, provided for the following modifications: (1) modifies the definition of adjusted EBITDA in the Amended Credit Agreement to exclude up to an additional $72.8 million of charges for certain Renewable segment contracts for periods including the quarter ended June 30, 2018 and allow further add backs to EBITDA for restructuring and other similar expenses; (2) modifies the financial covenants as described below; (3) modifies the amount of liquidity (as defined in the Amended Credit Agreement) we are required to maintain from at least $65.0 million as of the last business day of any calendar month to at least $50.0 million (or $40.0 million upon the consummation of certain asset sales and the receipt of at least $10.0 million of proceeds from the Last Out Loan described below) as of the last business day of any calendar month and on any day that a borrowing is made; (4) lowers the amount of outstanding borrowings under the U.S. Revolving Credit Facility that we are required to repay (without any reduction in commitments) with certain excess cash from $60.0 million to $50.0 million; (5) modifies the Company's ability to reinvest net cash proceeds from asset sales that trigger prepayment requirements to allow for the ability to retain up to $25.0 million of asset sale proceeds after receipt of the initial Last Out Loan funding described below; (6) permits an additional $15.0 million of cumulative net income losses attributable to eight specified Vølund contracts for the fiscal quarter ending September 30, 2018; (7) modifies certain contract completion milestones that we are required to meet in connection with six European Renewable loss contracts; (8) modifies the date by which we are required to sell at least $100 million of assets from March 31, 2019 to October 31, 2018; (9) requires us to achieve certain concessions from our renewable contract customers by September 30, 2018 that will generate at least $25.0 million of incremental benefits to us, (10) adds additional events of default related to the termination or rejection of certain contracts related to our Renewables segment; (11) permits and requires us to raise up to an additional net $30.0 million of last-out loans under the Amended Credit Agreement in connection with the Vintage Commitment described below; 12) consents to the sale of our Palm Beach Resource Recovery Corporation; and (13) eliminates a requirement to adjust on a pro forma basis our EBITDA after the sales of Megtec and Universal, and Palm Beach Resource Recovery Corporation. The Amended Credit Agreement and our obligations under certain hedging agreements and cash management agreements with our lenders and their affiliates continue to be (1) guaranteed by substantially all of our wholly owned domestic subsidiaries and certain of our foreign subsidiaries, but excluding our captive insurance subsidiary, and (2) secured by first-priority liens on certain assets owned by us and the guarantors. The Amended Credit Agreement requires interest payments on revolving loans on a periodic basis until maturity. We may prepay all loans at any time without premium or penalty (other than customary LIBOR breakage costs), subject to notice requirements. The Amended Credit Agreement requires us to make certain prepayments on any outstanding revolving loans after receipt of cash proceeds from certain asset sales or other events, subject to certain exceptions. Such prepayments may require us to reduce the commitments under the Amended Credit Agreement by a corresponding amount of such prepayments. Following the covenant relief period, such prepayments will not require us to reduce the commitments under the Amended Credit Agreement. After giving effect to the Amendments, loans outstanding under the Amended Credit Agreement bear interest at our option at either (1) the LIBOR rate plus 5.0% per annum during 2018, 6.0% per annum during 2019 and 7.0% per annum during 2020, or (2) the Base Rate plus 4.0% per annum during 2018, 5.0% per annum during 2019, and 6.0% per annum during 2020. The Base Rate is the highest of the Federal Funds rate plus 0.5%, the one month LIBOR rate plus 1.0%, or the administrative agent's prime rate. Interest expense associated with our U.S. Revolving Credit Facility loans for the six months ended June 30, 2018 was $14.1 million. Included in interest expense was $7.5 million of non-cash amortization of direct financing costs for the six months ended June 30, 2018. A commitment fee of 1.0% per annum is charged on the unused portions of the U.S. Revolving Credit Facility. A letter of credit fee of 2.5% per annum is charged with respect to the amount of each financial letter of credit outstanding, and a letter of credit fee of 1.5% per annum is charged with respect to the amount of each performance and commercial letter of credit outstanding. Additionally, an annual facility fee of $1.5 million is payable on the first business day of 2018 and 2019, and a pro rated amount is payable on the first business day of 2020. A deferred fee of 2.5% is charged, but may be reduced by up to 1.5% if the Company achieves certain asset sales. The Amended Credit Agreement includes financial covenants that are tested on a quarterly basis, based on the rolling four-quarter period that ends on the last day of each fiscal quarter. The maximum permitted senior debt leverage ratio as defined in the Amended Credit Agreement is:
The minimum consolidated interest coverage ratio as defined in the Amended Credit Agreement is:
Consolidated capital expenditures in each fiscal year are limited to $27.5 million. At June 30, 2018, borrowings under the Amended Credit Agreement and foreign facilities consisted of $200.4 million at an effective interest rate of 7.22%. Usage under the Amended Credit Agreement consisted of $196.3 million of borrowings, $20.4 million of financial letters of credit and $157.0 million of performance letters of credit. After giving effect to the Amendments, at June 30, 2018, we had approximately $28.6 million available for borrowings or to meet letter of credit requirements primarily based on our borrowing sublimit, our trailing 12 month adjusted EBITDA (as defined in the Amended Credit Agreement), and our leverage and interest coverage ratios (as defined in the Amended Credit Agreement) which were 7.51 and 1.94, respectively. As a result of the sale of our interest in TBWES, as discussed in Note 11, the U.S. Revolving Credit Facility was reduced from $450.0 million to $440.4 million in July 2018. As referenced above, our Amended Credit Agreement allows for us to incur up to $30.0 million of net proceeds of last-out loans. On August 9, 2018 we entered into a commitment letter (the “Vintage Commitment Letter”) with Vintage Capital Management LLC (the “Last Out Lender”), a related party, which provides a commitment for an aggregate principal amount of last-out loans (the “Last Out Loans”) that, when borrowed, will result in us receiving $30.0 million of aggregate net proceeds. The face principal amount of Last Out Loans is expected to be approximately $36.0 million, which includes the payment of a $2.0 million up-front fee that will be payable to the Last Out Lender on the date of the first funding of the Last Out Loans and to reflect original issue discount of 10%. The Last Out Loans will be incurred under our Amended Credit Agreement and will share on a pari passu basis with the guaranties and collateral provided thereunder to the existing lenders; provided, that the Last Out Loans will be subordinated in right of payment to the prior payment in full of all amounts owing to the existing lenders. The Last Out Loans will mature and be due in payable in full the day after the current maturity date of the U.S. Revolving Credit Facility. The Last Out Loans will be implemented by way of a further amendment to our Amended Credit Agreement prior to September 30, 2018 and, once implemented, will be available in multiple advances subject to the same conditions to borrowing as our existing U.S. Revolving Credit Facility. The first $10.0 million of Last Out Loans will be made available on the date of consummation of the sale of all of the issued and outstanding capital stock of Palm Beach Resource Recovery Corporation, as further described in Note 25. Advances of Last Out Loans thereafter will be made upon our borrowing request but in formula that results in the aggregate amount of all loans requested being funded on a 50/50 basis between the Last Out Lender and the existing lenders under our U.S. Revolving Credit Facility. Once made, Last Out Loans may be prepaid, subject to the subordination provisions, but not re-borrowed. Last Out Loans will bear interest at a rate per annum equal to the then applicable LIBOR rate plus 14.00%, with 5.50% of such interest rate to be paid in cash and the remaining 8.50% payable in kind by adding such accrued interest to the principal amount of the Last Out Loans. Subject to the subordination provisions, the Last Out Loans shall be subject to all of the other same representations and warranties, covenants and events of default under the Amended Credit Agreement. The commitment evidenced by the Vintage Commitment Letter is fully backstopped by B. Riley FBR, Inc., a related party, pursuant to a backstop commitment letter between B. Riley FBR, Inc. and the Last Out Lender. In the event that the Last Out Lender is unable to, or fails to, fund any of its commitments under the Vintage Commitment Letter, then B. Riley FBR, Inc. will be required to do so. Foreign Revolving Credit Facilities Outside of the United States, we have revolving credit facilities in Turkey that are used to provide working capital to our operations in that country. These foreign revolving credit facilities allow us to borrow up to $4.1 million in aggregate and each have less than a year remaining to maturity. At June 30, 2018, we had $4.1 million in borrowings outstanding under these foreign revolving credit facilities at an effective weighted-average interest rate of 9.57%. Letters of Credit, Bank Guarantees and Surety Bonds Certain subsidiaries primarily outside of the United States have credit arrangements with various commercial banks and other financial institutions for the issuance of letters of credit and bank guarantees in association with contracting activity. The aggregate value of all such letters of credit and bank guarantees opened outside of the U.S. Revolving Credit Facility as of June 30, 2018 and December 31, 2017 was $195.4 million and $269.1 million, respectively. The aggregate value of all such letters of credit and bank guarantees that are partially secured by the U.S. Revolving Credit Facility as of June 30, 2018 was $67.2 million. The aggregate value of the letters of credit provided by the U.S. Revolving Credit Facility in support of letters of credit outside of the United States was $38.8 million as of June 30, 2018. We have posted surety bonds to support contractual obligations to customers relating to certain contracts. We utilize bonding facilities to support such obligations, but the issuance of bonds under those facilities is typically at the surety's discretion. Although there can be no assurance that we will maintain our surety bonding capacity, we believe our current capacity is adequate to support our existing contract requirements for the next 12 months. In addition, these bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds those underwriters issue in support of some of our contracting activity. As of June 30, 2018, bonds issued and outstanding under these arrangements in support of contracts totaled approximately $426.1 million. SECOND LIEN TERM LOAN FACILITY Extinguishment of the Second Lien Term Loan Facility Using $212.6 million of the proceeds from the Rights Offering, we fully repaid the Second Lien Term Loan Facility (described below) on May 4, 2018, plus accrued interest of $2.3 million. A loss on extinguishment of this debt of approximately $49.2 million was recognized in the second quarter of 2018 as a result of the remaining $32.5 million unamortized debt discount on the date of the repayment, $16.2 million of make-whole interest, and $0.5 million of fees associated with the extinguishment. Terms of the Second Lien Term Loan Facility On August 9, 2017, we entered into a second lien credit agreement (the "Second Lien Credit Agreement") with an affiliate of AIP, governing the Second Lien Term Loan Facility. The Second Lien Term Loan Facility consisted of a second lien term loan in the principal amount of $175.9 million, all of which was borrowed on August 9, 2017, and a delayed draw term loan facility in the principal amount of up to $20.0 million, which was drawn in a single draw on December 13, 2017. Borrowings under the second lien term loan, other than the delayed draw term loan, had a coupon interest rate of 10% per annum, and borrowings under the delayed draw term loan had a coupon interest rate of 12% per annum, in each case payable quarterly. As of March 7, 2018, the interest rates increased to 12% and 14% per annum, respectively, due to the covenant default. Undrawn amounts under the delayed draw term loan accrued a commitment fee at a rate of 0.50%, which was paid at closing. The second lien term loan and the delayed draw term loan had a scheduled maturity of December 30, 2020. In connection with our entry into the Second Lien Term Loan Facility, we used $50.9 million of the proceeds to repurchase and retire approximately 4.8 million shares of our common stock (approximately 10% of our shares outstanding) held by an affiliate of AIP, which was one of the conditions precedent for the Second Lien Term Loan Facility. Based on observable and unobservable market data, we determined the fair value of the shares we repurchased from the related party on August 9, 2017 was $16.7 million. We utilized a discounted cash flow model and estimates of our weighted average cost of capital on the transaction date to derive the estimated fair value of the share repurchase. The $34.2 million difference between the share repurchase price and the fair value of the repurchased shares was recorded as a discount on the Second Lien Term Loan Facility borrowing. Non-cash amortization of the debt discount and direct financing costs were being accreted to the carrying value of the loan through interest expense utilizing the effective interest method and an effective interest rate of 20.08%. Interest expense associated with our Second Lien Credit Agreement was comprised of the following:
The Second Lien Credit Agreement contained representations and warranties, affirmative and restrictive covenants, financial covenants and events of default substantially similar to those contained in the Amended Credit Agreement, subject to certain cushions. At March 31, 2018 and December 31, 2017, we were in default of several financial covenants associated with the Second Lien Credit Agreement, which resulted in our classification of all of the net carrying value as a current liability in our condensed consolidated balance sheet. Under the terms of the intercreditor agreement among the lenders under the Amended Credit Agreement and the Second Lien Credit Agreement, the lenders under the Second Lien Credit Agreement cannot enforce remedies against the collateral until after they provide notice of enforcement and after the expiration of a 180-day standstill period. The lenders under the Second Lien Credit Agreement did not provide such notice. The March 1, 2018 and April 10, 2018 Amended Credit Agreement amendments temporarily waived all events of default, including cross-default provisions. |
RIGHTS OFFERING |
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Jun. 30, 2018 | |
Warrants and Rights Note Disclosure [Abstract] | |
RIGHTS OFFERING | RIGHTS OFFERING On March 19, 2018, we distributed to holders of our common stock one nontransferable subscription right to purchase 1.4 common shares for each common share held as of 5:00 p.m., New York City time, on March 15, 2018 at a price of $3.00 per common share. On April 10, 2018, we extended the expiration date and amended certain other terms regarding the Rights Offering. As amended, each right entitled holders to purchase 2.8 common shares at a price of $2.00 per share. The Rights Offering expired at 5:00 p.m., New York City time, on April 30, 2018. The Company did not issue fractional rights, or pay cash in lieu of fractional rights. The Rights Offering did not include an oversubscription privilege. The Rights Offering concluded on April 30, 2018, resulting in the issuance of 124.3 million common shares on April 30, 2018. Gross proceeds from the Rights Offering were $248.4 million. Of the proceeds received, $214.9 million were used to fully repay the Second Lien Credit Agreement, including $2.3 million of accrued interest, and the remainder were used for working capital purposes. Direct costs of the Rights Offering totaled $3.2 million. |
CONTINGENCIES |
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Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES Stockholder Litigation On March 3, 2017 and March 13, 2017, the Company and certain of its officers were named as defendants in two separate but largely identical complaints alleging violations of the federal securities laws. The complaints were brought on behalf of a putative class of investors who purchased the Company's common stock between July 1, 2015 and February 28, 2017 and were filed in the United States District Court for the Western District of North Carolina (collectively, the "Stockholder Litigation"). During the second quarter of 2017, the Stockholder Litigation was consolidated into a single action and a lead plaintiff was selected by the Court. Through subsequent amendments, the putative class period was expanded to include investors who purchased shares between June 17, 2015 and August 9, 2017. We filed a motion to dismiss in late 2017; the court denied the motion in early 2018. The plaintiff in the Stockholder Litigation alleges fraud, misrepresentation and a course of conduct relating to the facts surrounding certain projects underway in the Company's Renewable segment, which, according to the plaintiff, had the effect of artificially inflating the price of the Company's common stock. The plaintiff further alleges that stockholders were harmed when the Company later disclosed that it would incur losses on these projects. The plaintiff seeks an unspecified amount of damages. On February 16, 2018 and February 22, 2018, the Company and certain of its present and former officers and directors were named as defendants in three separate but substantially similar derivative lawsuits filed in the United States District Court for the District of Delaware (the “Derivative Litigation”). On April 23, 2018, the United States District Court for the District of Delaware entered an order consolidating the related derivative actions and designating co-lead and co-liaison counsel. On June 1, 2018, plaintiffs filed a consolidated derivative complaint. Plaintiffs assert a variety of claims against defendants including alleged violations of the federal securities laws, waste, breach of fiduciary duties and unjust enrichment. Plaintiffs, who all purport to be current shareholders of the Company's common stock, are suing on behalf of the Company to recover costs and an unspecified amount of damages, and force implementation of corporate governance changes. On June 28, 2018, the Derivative Litigation was transferred to the United States District Court for the Western District of North Carolina, where the Stockholder Litigation is pending. The parties have filed a motion asking the Court to stay the Derivative Litigation. We believe the allegations in the Stockholder Litigation and the Derivative Litigation are without merit, and that the respective outcomes of the Stockholder Litigation and the Derivative Litigation will not have a material adverse impact on our consolidated financial condition, results of operations or cash flows, net of any insurance coverage. Other Due to the nature of our business, we are, from time to time, involved in routine litigation or subject to disputes or claims related to our business activities, including, among other things: performance or warranty-related matters under our customer and supplier contracts and other business arrangements; and workers' compensation, premises liability and other claims. Based on our prior experience, we do not expect that any of these other litigation proceedings, disputes and claims will have a material adverse effect on our consolidated financial condition, results of operations or cash flows. |
DERIVATIVE FINANCIAL INSTRUMENTS |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Our foreign currency exchange ("FX") forward contracts that qualify for hedge accounting are designated as cash flow hedges. The hedged risk is the risk of changes in functional-currency-equivalent cash flows attributable to changes in FX spot rates of forecasted transactions related to long-term contracts. We exclude from our assessment of effectiveness the portion of the fair value of the FX forward contracts attributable to the difference between FX spot rates and FX forward rates. At June 30, 2018 and 2017, we had deferred approximately $1.6 million and $(1.3) million, respectively, of net gains (losses) on these derivative financial instruments in AOCI. At June 30, 2018, our derivative financial instruments consisted solely of FX forward contracts. The notional value of our FX forward contracts totaled $23.0 million at June 30, 2018 with maturities extending to November 2019. These instruments consist primarily of contracts to purchase or sell euros and British pounds sterling. We are exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments. We attempt to mitigate this risk by using major financial institutions with high credit ratings. The counterparties to all of our FX forward contracts are financial institutions party to our U.S. Revolving Credit Facility. Our hedge counterparties have the benefit of the same collateral arrangements and covenants as described under our U.S. Revolving Credit Facility. During the third quarter of 2017, our hedge counterparties removed the lines of credit supporting new FX forward contracts. Subsequently, we have not entered into any new FX forward contracts. The following tables summarize our derivative financial instruments:
The effects of derivatives on our financial statements are outlined below:
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following tables summarize our financial assets and liabilities carried at fair value, all of which were valued from readily available prices or using inputs based upon quoted prices for similar instruments in active markets (known as "Level 1" and "Level 2" inputs, respectively, in the fair value hierarchy established by the Financial Accounting Standards Board ("FASB") Topic, Fair Value Measurements and Disclosures).
Available-For-Sale Securities We estimate the fair value of available-for-sale securities based on quoted market prices. Our investments in available-for-sale securities are presented in "other assets" on our condensed consolidated balance sheets. Derivatives Derivative assets and liabilities currently consist of FX forward contracts. Where applicable, the value of these derivative assets and liabilities is computed by discounting the projected future cash flow amounts to present value using market-based observable inputs, including FX forward and spot rates, interest rates and counterparty performance risk adjustments. Other Financial Instruments We used the following methods and assumptions in estimating our fair value disclosures for our other financial instruments:
Non-Recurring Fair Value Measurements The measurement of the net actuarial gain or loss associated with our pension and other postretirement plans was determined using unobservable inputs (see Note 16). These inputs included the estimated discount rate, expected return on plan assets and other actuarial inputs associated with the plan participants. Our interim goodwill impairment tests and second quarter 2018 impairment charges required significant fair value measurements using unobservable inputs (see Note 12). The fair value of the reporting unit was based on an income approach using a discounted cash flow analysis, a market approach using multiples of revenue and EBITDA of guideline companies, and a market approach using multiples of revenue and EBITDA from recent, similar business combinations. Our second quarter 2018 impairment charges to assets held for sale of discontinued operations required significant fair value measurements using unobservable inputs (see Note 3). The fair value of the net assets held for sale were based on the expected net proceeds for the sale of MEGTEC and Universal. |
SUPPLEMENTAL INFORMATION |
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SUPPLEMENTAL INFORMATION | SUPPLEMENTAL INFORMATION During the six months ended June 30, 2018 and 2017, we recognized the following non-cash activity in our condensed consolidated financial statements:
During the six months ended June 30, 2018 and 2017, we recognized the following cash activity in our condensed consolidated financial statements:
During the three and six months ended June 30, 2018 and 2017, interest expense in our condensed consolidated financial statements consisted of the following components:
The following table provides a reconciliation of cash, cash equivalents and restricted cash reporting within the consolidated balance sheets that sum to the total of the same amounts in the consolidated statements of cash flows:
(1) Cash and cash equivalents of discontinued operations is included in current assets of discontinued operations in the consolidated balance sheet. See Note 3 for further information. |
NEW ACCOUNTING STANDARDS |
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Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
NEW ACCOUNTING STANDARDS | NEW ACCOUNTING STANDARDS New accounting standards that could affect our consolidated financial statements in the future are summarized as follows: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). With adoption of this standard, lessees will have to recognize long-term leases as a right-of-use asset and a lease liability on their balance sheet. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are similar to those applied in current lease accounting, but without explicit bright lines. The new accounting standard is effective for us beginning in 2019. We do not expect the new accounting standard to have a significant impact on our financial results when adopted, but will result in new balances in the consolidated balance sheets and new disclosures in the Notes. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The new guidance provides companies with the election to reclassify stranded tax effects resulting from the Tax Act from accumulated other comprehensive income to retained earnings. Existing guidance requiring the effect of a change in tax law or rates to be recorded in continuing operations is not affected. This standard is effective for all public business entities for fiscal years beginning after December 15, 2018, and any interim periods within those fiscal years. Early adoption is permitted in any interim period. We expect the impact of this standard on our financial statements would be immaterial, but we do not plan on early adopting this standard and have not determined whether we will exercise the election upon adoption. New accounting standards that were adopted during the six months ended June 30, 2018 are summarized as follows: In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The new accounting standard provides a comprehensive model to use in accounting for revenue from contracts with customers and replaces most existing revenue recognition guidance. In 2016, the FASB issued accounting standards updates to address implementation issues and to clarify the guidance for identifying performance obligations for licenses, for determining if an entity is the principal or agent in a revenue arrangement, and for technical corrections and improvements on topics including contract costs, loss provisions on construction and production contracts and disclosures for remaining and prior-period performance obligations. The new accounting standard also requires more detailed disclosures to enable financial statement users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new accounting standard is effective for interim and annual reporting periods beginning after December 15, 2017, and permits retrospectively applying the guidance to each prior reporting period presented (full retrospective method) or prospectively applying the guidance and providing additional disclosures comparing results to previous guidance, with the cumulative effect of initially applying the guidance recognized in beginning retained earnings at the date of initial application (modified retrospective method). We adopted the new accounting standard as of January 1, 2018 under the modified retrospective method. See Note 5 for additional accounting policy and transition disclosures. In January 2016, the FASB issued ASU 2016-1, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The new accounting standard is effective for us beginning in 2018, but early adoption is permitted. The new accounting standard requires investments such as available-for-sale securities to be measured at fair value through earnings each reporting period as opposed to changes in fair value being reported in other comprehensive income. We adopted the new accounting standard prospectively as of January 1, 2018, which resulted in an immaterial impact on our financial results. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. Of the eight classification-related changes this new standard will require in the statement of cash flows, only two of the classification requirements are relevant to our historical cash flow statement presentation (presentation of debt prepayments and presentation of distributions from equity method investees). However, the new classification requirements did not change our historical statement of cash flows. We adopted the new accounting standard as of January 1, 2018, which resulted in an immaterial impact on our financial results. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The new guidance requires the changes in the total of cash, cash equivalents and restricted cash to be shown together in the statement of cash flows and no longer presenting transfers between cash and cash equivalents and restricted cash in the statement of cash flows. Historically, we have presented the transfer of cash to restricted cash and cash equivalents in the investing section of the statement of cash flows. With the adoption of ASU 2016-18, changes in restricted cash are also included in statement of cash flows based on the nature of the change together with unrestricted cash flows. We retrospectively adopted the new accounting standard as of January 1, 2018. The only meaningful effect on our financial statements is related to the restricted cash received from the sale of BWBC as described in Note 11, which is reflected as investing cash flow. The detail of cash, cash equivalents, and restricted cash is included in Note 23. In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Benefit Cost and Net Periodic Postretirement Benefit Cost. The new guidance classifies service cost as the only component of net periodic benefit cost presented in cost of operations, whereas the other components will be presented in other income. Upon adoption, this affected not only how we present net periodic benefit cost, but also Power segment gross profit. We adopted the new accounting standard retrospectively as of January 1, 2018. The changes in the classification of the historical components of net periodic benefit costs from operating expense to other expense for the three and six months ended June 30, 2017 amounted to $5.2 million and $9.5 million, respectively, and are reflected in our condensed consolidated statements of operations. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The standard simplifies the subsequent measurement of goodwill by removing the requirement to perform a hypothetical purchase price allocation to compute the implied fair value of goodwill to measure impairment. Instead, goodwill impairment is measured as the difference between the fair value of the reporting unit and the carrying value of the reporting unit. The standard also clarifies the treatment of the income tax effect of tax-deductible goodwill when measuring goodwill impairment loss. This standard is effective for annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019, with early adoption permitted for impairment tests performed after January 1, 2017. We early adopted ASU 2017-04 on April 1, 2018, effective the first day of our 2018 second quarter. See Note 12 for further discussion of the goodwill impairment we recognized in the second quarter of 2018. |
SUBSEQUENT EVENT |
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Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT On August 9, 2018, the Company entered into a definitive agreement to sell all of the issued and outstanding capital stock of Palm Beach Resource Recovery Corporation, a B&W subsidiary that holds two operations and maintenance contracts for waste-to-energy facilities in West Palm Beach, Florida, to Covanta Pasco, Inc., a wholly owned subsidiary of Covanta Holding Company, for $45 million. The purchase price is subject to adjustment for net working capital at closing and other adjustments as set forth in the definitive purchase agreement. The sale is expected to close in the third quarter of 2018, subject to the satisfaction of customary closing conditions, including approval by the Solid Waste Authority of West Palm Beach. We expect to use proceeds from the transaction primarily to reduce outstanding balances under our bank credit facilities. Total assets of the subsidiary as of June 30, 2018 were $11.3 million and revenues for the six months ended June 30, 2018 were $30.2 million |
EARNINGS PER SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share of our common stock, net of noncontrolling interest:
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DISCONTINUED OPERATIONS (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Discontinued Operations | The following table presents selected financial information regarding the discontinued operations included in the Condensed Consolidated Statement of Operations:
The following table presents the major classes of assets that have been presented as assets and liabilities held for sale in our Condensed Consolidated Balance Sheets:
The significant components included in our Condensed Consolidated Statements of Cash Flows for the discontinued operations are as follows:
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SEGMENT REPORTING (Tables) |
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Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | An analysis of our operations by segment is as follows:
(1) Gross profit by segment excludes intangible amortization but includes depreciation.
(1) Power segment adjusted EBITDA includes $6.4 million and $5.0 million of net benefit from pension and other postretirement benefit plans excluding MTM adjustments in the three months ended June 30, 2018 and 2017, respectively. Power segment adjusted EBITDA includes $13.2 million and $10.0 million of net benefit from pension and other postretirement benefit plans excluding MTM adjustments in the six months ended June 30, 2018 and 2017, respectively. |
REVENUE RECOGNITION AND CONTRACTS (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Contracts in Progress and Advance Billings on Contracts | The following represent the components of our contracts in progress and advance billings on contracts included in our condensed consolidated balance sheets:
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Schedule of Recognized Changes in Estimated Gross Profit | In the three and six months ended June 30, 2018 and 2017, we recognized changes in estimated gross profit related to long-term contracts accounted for on the percentage-of-completion basis, which are summarized as follows:
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RESTRUCTURING ACTIVITIES AND SPIN-OFF TRANSACTION COSTS (Tables) |
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Restructuring Activities and Spin-Off Transaction Costs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity Related to the Restructuring Liabilities | Activity related to the restructuring liabilities is as follows:
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COMPREHENSIVE INCOME (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in the components of AOCI, net of tax, for the first two quarters in 2018 and 2017 were as follows:
(1) ASU 2016-1, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, requires investments to be measured at fair value through earnings each reporting period as opposed to changes in fair value being reported in other comprehensive income. The standard is effective as of January 1, 2018 and requires application by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. (2) Includes the reclassification of the unamortized balance of the curtailment gain, net of tax as described in Note 16. |
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Reclassification out of Accumulated Other Comprehensive Income | The amounts reclassified out of AOCI by component and the affected condensed consolidated statements of operations line items are as follows (in thousands):
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CASH AND CASH EQUIVALENTS (Tables) |
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | The components of cash and cash equivalents are as follows:
The following table provides a reconciliation of cash, cash equivalents and restricted cash reporting within the consolidated balance sheets that sum to the total of the same amounts in the consolidated statements of cash flows:
(1) Cash and cash equivalents of discontinued operations is included in current assets of discontinued operations in the consolidated balance sheet. See Note 3 for further information. |
INVENTORIES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Inventories | The components of inventories are as follows:
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GOODWILL (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following summarizes the changes in the carrying amount of goodwill:
(1) Goodwill for MEGTEC and Universal are shown as part of noncurrent assets of discontinued operations. See Note 3 for a further description of discontinued operations. (2) Accumulated goodwill impairments were $50.0 million for the Renewable segment as of December 31, 2017 and $74.4 million and $36.9 for the Industrial segment as of June 30, 2018 and December 31, 2017, respectively. |
INTANGIBLE ASSETS (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets | Our intangible assets are as follows:
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Schedule of Finite-Lived Intangible Assets | The following summarizes the changes in the carrying amount of intangible assets:
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Schedule of Indefinite-Lived Intangible Assets | The following summarizes the changes in the carrying amount of intangible assets:
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Schedule of Estimated Future Intangible Asset Amortization Expense | Estimated future intangible asset amortization expense is as follows (in thousands):
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PROPERTY, PLANT & EQUIPMENT (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | The composition of our property, plant and equipment less accumulated depreciation is set forth below:
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WARRANTY EXPENSE (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Carrying Amount of Accrued Warranty Expense | Changes in the carrying amount of our accrued warranty expense are as follows:
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PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS (Tables) |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | Components of net periodic benefit cost (benefit) included in net income (loss) are as follows:
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REVOLVING DEBT (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The components of our revolving debt are comprised of separate revolving credit facilities in the following locations:
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SECOND LIEN TERM LOAN FACILITY (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||
Schedule of Interest Expenses | Interest expense associated with our Second Lien Credit Agreement was comprised of the following:
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DERIVATIVE FINANCIAL INSTRUMENTS (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Derivative Financial Instruments | The following tables summarize our derivative financial instruments:
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Derivative Instruments, Gain (Loss) | The effects of derivatives on our financial statements are outlined below:
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FAIR VALUE MEASUREMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Financial Assets and Liabilities | The following tables summarize our financial assets and liabilities carried at fair value, all of which were valued from readily available prices or using inputs based upon quoted prices for similar instruments in active markets (known as "Level 1" and "Level 2" inputs, respectively, in the fair value hierarchy established by the Financial Accounting Standards Board ("FASB") Topic, Fair Value Measurements and Disclosures).
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SUPPLEMENTAL INFORMATION (Tables) |
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Supplemental Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Significant Noncash Transactions | During the six months ended June 30, 2018 and 2017, we recognized the following non-cash activity in our condensed consolidated financial statements:
During the six months ended June 30, 2018 and 2017, we recognized the following cash activity in our condensed consolidated financial statements:
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Summary of Interest Expenses | During the three and six months ended June 30, 2018 and 2017, interest expense in our condensed consolidated financial statements consisted of the following components:
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Schedule of Cash and Cash Equivalents | The components of cash and cash equivalents are as follows:
The following table provides a reconciliation of cash, cash equivalents and restricted cash reporting within the consolidated balance sheets that sum to the total of the same amounts in the consolidated statements of cash flows:
(1) Cash and cash equivalents of discontinued operations is included in current assets of discontinued operations in the consolidated balance sheet. See Note 3 for further information. |
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Schedule of Restricted Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reporting within the consolidated balance sheets that sum to the total of the same amounts in the consolidated statements of cash flows:
(1) Cash and cash equivalents of discontinued operations is included in current assets of discontinued operations in the consolidated balance sheet. See Note 3 for further information. |
EARNINGS PER SHARE - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Earnings Per Share [Abstract] | ||||
Loss from continuing operations | $ (209,836) | $ (148,765) | $ (326,773) | $ (154,434) |
Loss from discontinued operations, net of tax | (55,932) | (2,234) | (59,428) | (3,610) |
Net loss attributable to stockholders | $ (265,768) | $ (150,999) | $ (386,201) | $ (158,044) |
Weighted average shares used to calculate basic and diluted earnings per share (in shares) | 125,207 | 48,854 | 84,921 | 48,797 |
Basic and diluted loss per share - continuing operations (in dollars per share) | $ (1.68) | $ (3.05) | $ (3.85) | $ (3.16) |
Basic and diluted loss per share - discontinued operations (in dollars per share) | (0.44) | (0.04) | (0.70) | (0.08) |
Basic and diluted loss per share (in dollars per share) | $ (2.12) | $ (3.09) | $ (4.55) | $ (3.24) |
EARNINGS PER SHARE - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Earnings Per Share [Abstract] | ||||
Excluded shares from the WAS to calculated diluted EPS as company was in a net loss position | $ 0.8 | $ 0.3 | $ 0.9 | $ 0.4 |
Antidilutive securities excluded from computation of EPS | 3.2 | 1.9 | 2.5 | 1.9 |
REVENUE RECOGNITION AND CONTRACTS - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jan. 01, 2018 |
Dec. 31, 2017 |
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Disaggregation of Revenue [Line Items] | ||||||
Net increase in retained earnings | $ (38) | |||||
Remaining performance obligation | $ 1,518,000 | $ 1,518,000 | ||||
Transferred at Point in Time | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Percent of revenue | 23.00% | 18.00% | 23.00% | 22.00% | ||
Transferred over time | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Percent of revenue | 77.00% | 82.00% | 77.00% | 78.00% | ||
Retained Earnings | Accounting Standards Update 2014-09 | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net increase in retained earnings | $ 500 |
RESTRUCTURING ACTIVITIES AND SPIN-OFF TRANSACTION COSTS - Restructuring liabilities (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of period | $ 5,914 | $ 558 | $ 2,320 | $ 1,809 |
Restructuring expense | 4,276 | 1,887 | 10,164 | 3,857 |
Payments | (2,308) | (1,607) | (4,602) | (4,828) |
Balance at June 30, | 7,882 | 838 | 7,882 | 838 |
Restructuring related to gains on disposals of long-lived assets | $ 400 | $ 200 | $ 200 | $ 300 |
PROVISION FOR INCOME TAXES (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ (1,934) | $ 3,458 | $ 5,029 | $ 346 |
Effective tax rate | (0.90%) | 2.40% | 1.60% | (0.20%) |
Goodwill impairment | $ 37,500 | |||
Other nondeductible expenses | 400 | $ 3,200 | $ 1,800 | |
Tax benefit associated with impairment of equity method investment | $ 18,200 | 18,400 | ||
Income tax expense for partial valuation allowance | $ 9,000 | $ 9,000 |
CASH AND CASH EQUIVALENTS (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 28,512 | $ 43,717 | ||
Restricted cash and cash equivalents | 32,302 | 25,980 | $ 22,833 | $ 27,770 |
Total cash, cash equivalents and restricted cash | 60,814 | 69,697 | $ 82,072 | $ 115,196 |
Held by foreign entities | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 27,955 | 42,490 | ||
Held by United States entities | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 557 | $ 1,227 |
INVENTORIES (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 49,834 | $ 54,291 |
Work in progress | 5,971 | 6,918 |
Finished goods | 11,469 | 11,708 |
Total inventories | $ 67,274 | $ 72,917 |
INTANGIBLE ASSETS - Summary of Changes in Carrying Amount of Intangible Assets (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Intangible Assets [Roll Forward] | ||
Balance at beginning of period | $ 42,065 | $ 65,496 |
Amortization expense | (4,056) | (6,334) |
Currency translation adjustments and other | (1,641) | (14,088) |
Balance at end of the period | $ 36,368 | $ 45,074 |
INTANGIBLE ASSETS - Estimated Future Intangible Asset Amortization (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
---|---|---|---|
Finite-Lived Intangible Assets [Line Items] | |||
Twelve months ending December 31, 2019 | $ 4,763 | ||
Twelve months ending December 31, 2020 | 4,002 | ||
Twelve months ending December 31, 2021 | 3,772 | ||
Twelve months ending December 31, 2022 | 3,685 | ||
Twelve months ending December 31, 2023 | 3,677 | ||
Thereafter | $ 12,542 | ||
Forecast | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense, remainder of fiscal year | $ 1,311 | $ 1,311 |
PROPERTY, PLANT & EQUIPMENT (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - gross | $ 308,215 | $ 322,885 |
Less accumulated depreciation | 202,450 | 208,178 |
Net property, plant and equipment | 105,765 | 114,707 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - gross | 3,590 | 3,631 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - gross | 107,100 | 107,944 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - gross | 195,276 | 205,331 |
Property under construction | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - gross | $ 2,249 | $ 5,979 |
WARRANTY EXPENSE (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Movement in Extended Product Warranty Accrual [Roll Forward] | |||
Balance at beginning of period | $ 33,514 | $ 36,520 | |
Additions | 28,008 | 12,093 | |
Expirations and other changes | (1,592) | (3,244) | |
Payments | (5,791) | (6,089) | |
Translation and other | (1,001) | 1,193 | |
Balance at end of period | $ 53,138 | $ 53,138 | $ 40,473 |
Increase in expected warranty costs for the 6 European renewable energy loss contracts | 15,100 | ||
Increase in expected warranty costs for technical matters and customer requirements | $ 5,300 |
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Pension Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 9,741 | $ 10,255 | $ 19,498 | $ 20,490 |
Expected return on plan assets | (16,215) | (14,854) | (32,445) | (29,710) |
Amortization of prior service cost | 25 | 26 | 50 | 51 |
Recognized net actuarial loss (gain) | (544) | 0 | (544) | 1,062 |
Benefit plans, net | (6,993) | (4,573) | (13,441) | (8,107) |
Service cost included in COS | 187 | 231 | 376 | 482 |
Net periodic benefit cost (benefit) | (6,806) | (4,342) | (13,065) | (7,625) |
Other Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 95 | 140 | 192 | 361 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service cost | (188) | (816) | (834) | (1,716) |
Recognized net actuarial loss (gain) | 0 | 0 | 0 | 0 |
Benefit plans, net | (93) | (676) | (642) | (1,355) |
Service cost included in COS | 4 | 4 | 8 | 8 |
Net periodic benefit cost (benefit) | $ (89) | $ (672) | $ (634) | $ (1,347) |
REVOLVING DEBT - Schedule of Revolving Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Instrument [Line Items] | ||
Total revolving debt | $ 200,424 | $ 103,473 |
Senior Secured Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total revolving debt | 196,300 | 94,300 |
Foreign Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total revolving debt | $ 4,124 | $ 9,173 |
REVOLVING DEBT - Foreign Revolving Credit Facilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
Aug. 09, 2017 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Long-term Line of Credit | $ 200,424 | $ 103,473 | |
Effective interest rate | 7.22% | 20.08% | |
Foreign Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 4,100 | ||
Long-term Line of Credit | $ 4,124 | $ 9,173 | |
Effective interest rate | 9.57% |
REVOLVING DEBT - Other Credit Arrangements (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Disclosure [Abstract] | ||
Letters of credit not secured by the US Credit Facility | $ 195.4 | $ 269.1 |
Letters of credit and bank guarantees partially covered by the US Credit Facility | 67.2 | |
Letters of credit outstanding | 38.8 | |
Guarantor obligations | $ 426.1 |
RIGHTS OFFERING (Details) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |||||
---|---|---|---|---|---|---|
May 04, 2018 |
Apr. 30, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Apr. 10, 2018 |
Mar. 19, 2018 |
|
Class of Warrant or Right [Line Items] | ||||||
Number of shares issued per right | 2.8 | 1.4 | ||||
Exercise price per right (in dollars per share) | $ 2.00 | $ 3.00 | ||||
Shares issued during rights offering | 124,300,000 | |||||
Proceeds from rights offering | $ 248,500 | $ 248,375 | $ 0 | |||
Costs related to rights offering | $ 3,225 | $ 0 | ||||
Second Lien Term Loan Facility | ||||||
Class of Warrant or Right [Line Items] | ||||||
Extinguishment of debt, amount | $ 214,900 | |||||
Payments for accrued interest | $ 2,300 |
DERIVATIVE FINANCIAL INSTRUMENTS - Additional Information (Detail) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Net gains deferred on derivative financial instruments in accumulated other comprehensive income (loss) | $ 1,600,000 | $ (1,300,000) |
Cash Flow Hedging | Designated as Hedging Instrument | FX Forward Contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional amount of foreign currency forward contracts | $ 23,000,000 |
DERIVATIVE FINANCIAL INSTRUMENTS - Summary of Derivative Financial Instruments (Detail) - FX Forward Contracts - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Designated as Hedging Instrument | Accounts receivable-other | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | $ 731 | $ 1,088 |
Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 1,631 | 312 |
Designated as Hedging Instrument | Accounts payable | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability | 1 | 105 |
Derivatives Not Designated as Hedges | Accounts receivable-other | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 0 | 7 |
Derivatives Not Designated as Hedges | Accounts payable | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability | 3 | 1,722 |
Derivatives Not Designated as Hedges | Other Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability | $ 0 | $ 12 |
SUPPLEMENTAL INFORMATION - Cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 28,512 | $ 43,717 | $ 59,239 | $ 87,426 |
Restricted cash and cash equivalents | 32,302 | 25,980 | 22,833 | 27,770 |
Total cash, cash equivalents and restricted cash | $ 60,814 | $ 69,697 | $ 82,072 | $ 115,196 |
NEW ACCOUNTING STANDARDS (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Other – net | $ (131) | $ 43 | $ 266 | $ 78 |
ASU 2017-07 | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Operating expense | (5,200) | (9,500) | ||
Other – net | $ 5,200 | $ 9,500 |
SUBSEQUENT EVENT (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
Aug. 09, 2018
USD ($)
contract
|
Dec. 31, 2017
USD ($)
|
|
Subsequent Event [Line Items] | ||||||
Assets | $ 1,104,107 | $ 1,104,107 | $ 1,322,229 | |||
Revenues | 291,337 | $ 306,231 | 544,513 | $ 654,303 | ||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Agreement sales price | $ 45,000 | |||||
Palm Beach Resource Recovery Corporation | ||||||
Subsequent Event [Line Items] | ||||||
Assets | $ 11,300 | 11,300 | ||||
Revenues | $ 30,200 | |||||
Palm Beach Resource Recovery Corporation | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Number of contracts held | contract | 2 |
Label | Element | Value |
---|---|---|
Cash Held To Meet Reinsurance Reserve Requirements [Member] | ||
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 21,061,000 |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | 25,269,000 |
Sale Proceeds Held in Escrow [Member] | ||
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | 0 |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | 591,000 |
Restricted Foreign Cash [Member] | ||
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | 4,919,000 |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 6,442,000 |
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