NYSE: BW-PA

Our vast installed base of steam generation equipment includes aftermarket parts, construction, maintenance and field services. We have an extensive global base of installed equipment for utilities and general industrial applications including refining, petrochemical, food processing, metals and others. We provide aftermarket parts, construction, maintenance, engineered upgrades and field services for our installed base as well as the installed base of other original equipment manufacturers. In addition to our aftermarket offerings, we also provide complete steam generation systems including package boilers, watertube and firetube waste heat boilers, and other boilers to medium and heavy industrial customers. Our unique range of offerings, coupled with the strength of our brand, provides a competitive advantage in existing and emerging markets, including utilities and power generation, AI data centers, and other industrial markets, including oil and gas. We also offer specialized technologies in industrial energy production, including hydrogen and syngas.

Our business depends significantly on the capital, operations and maintenance expenditures of global electric power generating companies, including renewable and thermal powered heat generation industries and industrial facilities with environmental compliance policy requirements. Several factors may influence these expenditures, including:

•climate change initiatives promoting environmental policies to meet legislative requirements and clean energy portfolio standards in North America, Europe, Middle East and Asia;

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•regulations requiring environmental improvements in various industries and global markets;

•expectations regarding future governmental requirements to further limit or reduce greenhouse gas and other emissions in the United States, Europe and other international climate change sensitive countries;

•prices for electricity, along with the cost of production and distribution, including the cost of fuels, within the United States, Europe, Middle East and Asia;

•demand for electricity and other end products of steam-generating facilities;

•level of capacity utilization at operating power plants and other industrial users of steam production;

•maintenance and upkeep requirements at operating power plants, including to address the accumulated effects of usage;

•overall strength of the industrial industry;

•ability of electric power generating companies and other steam users to raise capital; and

•the impact of geopolitical conflicts, including the ongoing conflicts in Ukraine and the Middle East.

Customer demand is heavily affected by the variations in our customers' business cycles, power demand in their operating territories and by the overall economies and energy, environmental and noise abatement needs of the countries in which they operate.

Market Update

Management continues to adapt to macroeconomic conditions, including the impacts from inflation, higher interest rates and foreign exchange rate volatility, current and potential tariff actions and geopolitical conflicts. In certain instances, these situations have resulted in cost increases and delays or disruptions that have had, and could continue to have, an adverse impact on our ability to meet customers' demands. We continue to actively monitor the impact of these market conditions on current and future periods and actively manage costs and our liquidity position to provide additional flexibility while still supporting our customers and their specific needs. The duration and scope of these conditions cannot be predicted, and therefore, any anticipated negative financial impact on our operating results cannot be reasonably estimated.

Equity Capital Activities

For information regarding our equity activities, see Note 16 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Debt Capital Activities

For information regarding our debt activities, see Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Contracts

We execute our contracts through a variety of methods, including fixed-price, cost-plus, target price cost incentive, cost-reimbursable or some combination of these methods. Contracts are usually awarded through a competitive bid process. Factors that customers may consider include price, technical capabilities of equipment and personnel, plant or equipment availability, efficiency, safety record and reputation.

Fixed-price contracts are for a fixed selling price to cover all costs and any profit element for a defined scope of work. Fixed-price contracts entail more risk to us because they require us to predetermine both the quantities of work to be performed and the costs associated with executing the work.

We have contracts that extend beyond one year. Most of our long-term contracts have provisions for progress payments. We attempt to cover anticipated increases in labor, material and service costs of our long-term contracts either through an estimate of such changes, which is reflected in the original price, or through risk-sharing mechanisms, such as escalation or price adjustments for items such as labor and commodity prices. In the event of a contract deferral or cancellation without cause, we generally would be entitled to recover costs incurred, settlement expenses and profit on work completed prior to deferral or termination. Significant or numerous cancellations could adversely affect our business, financial position, results of operations and cash flows.

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From time to time, we partner with other companies to meet the needs of our customers, which can result in project-related joint venture entities or other contractual arrangements. While we carefully select our partners in these arrangements, they can subject us to risks that we may not be able to fully control and may include joint and several liability.

We generally recognize our contract revenues and related costs over time using the cost-to-cost input method that uses costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Accordingly, we review contractual sales price and cost estimates regularly as the work progresses and reflect adjustments in profit proportionate to the percentage-of-completion in the period when we revise those estimates. To the extent that these adjustments result in a reduction or an elimination of previously reported profits with respect to a contract, we would recognize a charge against current earnings, which could be material.

See further description of risks related to our customer contracts in Part I, Item 1A, "Risk Factors" of this Annual Report.

Our arrangements with customers frequently require us to provide letters of credit, bid and performance bonds or guarantees to secure bids or performance under contracts. Inability to secure such cash collateral or other contract security may preclude us from entering into certain customer arrangements.

Other sales, such as parts and certain aftermarket service activities, are not in the form of long-term contracts, and we recognize revenues as goods are delivered and work is performed. See further discussion in Note 7 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Foreign Operations

Our Canadian operations serve the Canadian industrial power, oil production and electric utility markets. We have manufacturing facilities in Mexico to serve global markets. The functional currency of our foreign operating entities is not the United States dollar, and as a result, we are subject to exchange rate fluctuations that impact our financial position, results of operations and cash flows. Although we do not currently engage in currency hedging activities to limit the risks of currency fluctuations, we evaluate opportunities to engage in hedging in order to limit the risks of currency fluctuations.

For additional information on the geographic distribution of our revenues, see Note 6 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Competition

With nearly 160 years of experience, we have a competitive advantage in our expertise and technical capabilities to reliably convert a wide range of fuels to steam. We have supplied highly engineered energy and environmental equipment in more than 90 countries. Our strong, installed base around the globe also yields competitive advantages, although our markets are highly competitive and price sensitive. We compete with a number of domestic and foreign companies specializing in power generation and environmental control equipment.

Competitors include:

Aker Carbon Capture ASA
GE Vernova, Inc.

Andritz AG
Kanadevia Inova

Babcock Power Inc.

Mitsubishi Power, Ltd.

CECO Environmental

Shell Global Cansolv

Doosan Corporation
Southern Environmental, Inc

Elessent Clean Technologies Inc.Steinmüller Engineering GmbH

Enerfab, IncValmet Oyj

Fluor Corporation

We also compete with a variety of engineering and construction companies related to installation of steam generating systems and environmental control equipment; specialized industrial equipment; and other suppliers of replacement parts, repair and alteration services and other services required to retrofit and maintain existing steam generating systems. The primary bases of competition are price, technical capabilities, quality, timeliness of performance, breadth of products and services and willingness to accept contract risks.

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Raw Materials and Suppliers

Our operations use raw materials such as carbon and alloy steels in various forms, components and accessories for assembly, which are available from numerous sources. We generally purchase these raw materials and components as needed for individual contracts. We do not depend on a single source of supply for any significant raw materials. Although shortages of some raw materials have existed from time to time, we do not believe any serious shortage presently exists.

Human Capital Resources

Human Capital Management

At December 31, 2025, we had approximately 1,650 employees worldwide, of which approximately 1,600 were full-time. Approximately 300 of our hourly employees are union-affiliated, covered by two union agreements related to active facilities in Mexico, the United States and Canada. We successfully renegotiated our union contracts in 2025 and have one that will expire in 2026. We consider our relationships with our employees and unions to be in good standing.

Workforce Engagement

We believe an engaged global workforce is critical to our success as we work to profitably grow our business as a leading supplier of reliable and efficient steam generating systems, aftermarket parts, construction, maintenance and field services, and emissions control technologies for utilities, data centers and a broad range of industries.

B&W is known for having a dedicated, long-tenured workforce, with some of the best and most experienced employees in the industries we serve. Our ability to attract and retain this exceptional talent requires a commitment to open communication about our business, strategy and results with our employees and a globally diverse, inclusive and supportive workplace that provides opportunities for growth and career development. It also requires programs that enhance employees' overall work experience. Our Responsible and Flexible Workplace Program ("ReFlex") in the U.S. provides employees with flexibility in where they work, and we have various work-from-home policies across many of our global operations. Through ReFlex, our employees have the needed flexibility and autonomy in how they work, allowing us to deliver on our projects and ensure our customers' needs are met.

Compensation and Benefits

We believe it is important to provide competitive compensation and benefits programs for our employees. In addition to competitive salaries, we offer the following benefits, among others, which vary by employee level and by the country where an employee is located:

•contributory healthcare, dental and vision benefits;

•bonuses;

•stock awards;

•retirement programs (including pension and savings plans);

•health savings and flexible spending accounts;

•paid time off;

•paid parental leave;

•disability programs; and

•employee assistance programs.

Core Values

At B&W, our values of safety, ethics, quality, integrity, respect and agility are at the foundation of our business, and we are focused on efficiently integrating new employees into that culture, whether they join through the normal recruiting and hiring process, or through strategic acquisitions. We also believe in the importance of being a good corporate citizen, providing and supporting opportunities for our employees to make a positive impact in the communities where they live and work.

Our Board of Directors is actively engaged with our workforce practices and policies and regularly receives updates and provides input on key culture topics, including employee engagement, employee development and succession planning.

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Patents and Patent Licenses

We currently hold a large number of U.S. and foreign patents and have various patent applications pending. We have acquired patents and technology licenses and granted technology licenses to others when we have considered it advantageous for us to do so. Although in the aggregate our patents and licenses are important to us, we do not regard any single patent or license or group of related patents or licenses as critical or essential to our business as a whole. In general, we depend on our technological capabilities and the application thereof, rather than patents and licenses, in the conduct of our various businesses.

Research and Development Activities

Our research and development activities improve our products through innovations to reduce the cost of our products to make them more competitive and through innovations to reduce performance risk of our products to better meet our customer expectations. Research and development costs are expensed as incurred.

Permits and Licenses

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our operations. The permits, licenses and certificates required in our operations depend on a number of factors. We are not aware of any material noncompliance and believe our operations and certifications are currently in compliance with all relevant permits, licenses and certifications.

Environmental

We have been identified as a potentially responsible party at various cleanup sites under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"). CERCLA and other environmental laws can impose liability for the entire cost of cleanup on any of the potentially responsible parties, regardless of fault or the lawfulness of the original conduct. Generally, however, where there are multiple responsible parties, a final allocation of costs is made based on the amount and type of waste disposed of by each party and the number of financially viable parties, although this may not be the case with respect to any particular site. We have not been determined to be a major contributor of waste to any of these sites. On the basis of our relative contribution of waste to each site, we expect our share of the ultimate liability for the various sites will not have a material adverse effect on our consolidated financial position, results of operations or cash flows in any given year.

Government Regulations

We are subject to a variety of laws and regulations in the United States and other countries that involve matters central to our business, including those relating to:

•the construction and manufacture of advanced technologies for energy production from coal, natural gas, hydrogen, waste and biomass, as well as environmental solutions and carbon capture systems;

•clean air and other environmental protection legislation;

•taxation of domestic and foreign earnings;

•tariffs, duties, or trade sanctions and other trade barriers imposed by foreign countries that restrict or prohibit business transactions in certain markets;

•user privacy, security, data protection, content and online-payment services;

•intellectual property;

•transactions in or with foreign countries or officials; and

•use of local employees and suppliers.

Compliance with such regulations has not had a material effect on our capital expenditures, results of operations or competitive position to date. For further discussion, see Part I, Item 1A, "Risk Factors" of this Annual Report.

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Available Information

Our website address is www.babcock.com. We make available through the Investor section of this website under "About B&W>Investors>Financial Reports," free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, our proxy statement, statements of beneficial ownership of securities on Forms 3, 4 and 5 and amendments to those reports as soon as reasonably practicable after we electronically file those materials with, or furnish those materials, to the SEC. In addition, the SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Our website also includes our: Corporate Governance Principles; Code of Business Conduct; Code of Ethics for our Chief Executive Officer and Senior Financial Officers; Related Party Transactions Policy; Amended and Restated By-laws; charters for the Audit and Finance, Governance, Compensation and Related Party Transactions Committees of our Board; Modern Slavery Transparency Statement; Conflict Minerals Policy; and Tax Strategy Statement, as well as information about our management and board members. We are not including any information contained in our website as part of or incorporating it by reference into this Annual Report.