Company: BWNB
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001630805-25-000062
Chunk: 76

Company: Babcock & Wilcox Enterprises, Inc.
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 1
Chunk 76
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 Note 13 in the Condensed Consolidated Financial Statements for further details.

Income Taxes

Three Months Ended June 30,Six Months Ended June 30,(In thousands, except for percentages)20252024$ Change20252024$ ChangeLoss from continuing operations before income tax expense$(2,160)$(15,869)$13,709 $(14,213)$(32,506)$18,293 Income tax expense$3,892 $4,678 $(786)$5,844 $5,663 $181 Effective tax rate(180.2)%(29.5)%(41.1)%(17.4)%

Deferred tax assets are evaluated each period to determine whether realization is more likely than not. Valuation allowances are established when management determines it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. Valuation allowances may be removed in the future if sufficient positive evidence exists to outweigh the negative evidence under the framework of ASC 740, Income Taxes ("ASC 740").

Our effective tax rate for the first six months of 2025 is not reflective of the U.S. statutory rate primarily due to certain foreign entities having a tax rate higher than the U.S statutory rate, valuation allowances against certain net deferred tax assets and unfavorable discrete items. In certain jurisdictions where we anticipate a loss for the year or incur a loss for the year-to-date period for which a tax benefit cannot be realized in accordance with ASC 740, we exclude the loss in that jurisdiction from the overall computation of the estimated annual effective tax rate.

Bookings and Backlog

Bookings and backlog are our measures of remaining performance obligations under our sales contracts. We believe these metrics provide investors, lenders and other users of our financial statements with a leading indicator of future revenues. It is possible that our methodology for determining bookings and backlog may not be comparable to methods used by other companies.

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We generally include expected revenue from contracts in our backlog when we receive written confirmation from our customers authorizing the performance of work and committing the customers to payment for work performed. Backlog may not be indicative of future operating results, and contracts in our backlog may be canceled, modified or otherwise altered by customers. Backlog can vary significantly from period to period, particularly when large new-build conversion projects or operations and maintenance contracts are booked because they may be fulfilled over multiple years. Because we operate globally, our backlog is also affected by changes in foreign currencies each period. 

Bookings