The following discussion of our financial position and results of operations should be read in conjunction with the financial statements and the notes thereto included in the Condensed Consolidated Financial Statements in Item 1 of this Quarterly Report. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements as a result of many factors, including those described in more detail under "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the SEC. See also "Cautionary Statement Concerning Forward-Looking Information" herein. Unless otherwise noted, discussion of our business and results of operations refers to our continuing operations. BUSINESS OVERVIEW We are a globally focused energy technologies provider with nearly 160 years of experience providing diversified energy and emissions control solutions to a broad range of industrial, electrical utility, municipal and other customers. Our innovative products and services are organized in one reportable segment. Customer demand is heavily affected by the variations in our customers' business cycles, power demand in their operating territories, and by the overall economies, energy, environmental and regulatory requirements of the countries in which they operate. We have manufacturing facilities in Canada, Mexico and the United States. Many aspects of our operations and properties could be affected by political developments, environmental regulations and operating risks. These and other factors may have a material impact on our international and domestic operations or our business as a whole. An increase in power demand has caused a nationwide boilermaker as well as other trade shortfall in skilled labor. These labor constraints have increased construction costs and affected productivity on certain projects. To the extent these conditions persist, they may adversely impact future project execution and operating results. Discontinued Operations For more information on our discontinued operations, see Notes 3 and 4 to the Condensed Consolidated Financial Statements. Vølund In April 2025, we sold our Vølund business for a base purchase price equal to $15.0 million plus $0.1 million (400,000 Danish krone). We recorded a net loss of $36.8 million, which included a write off of CTA of $52.6 million. Diamond Power In July 2025, we closed the sale of our Diamond Power business for a base purchase price of $177 million, subject to certain offsets and adjustments, and recorded a gain of $53.2 million on the sale. In the first quarter of 2026, we recorded a gain of $3.5 million as part of the settlement of certain outstanding items in accordance with the agreement. ASH In October 2025, we completed a sale of the net assets comprising our ASH business for $29 million, subject to customary fees and adjustments, and recorded a gain of $21.5 million on the sale. 33 Solar As of December 31, 2025, B&W Solar was disposed of through abandonment, as we ceased all business operations and either transferred or wrote off its remaining assets. BWRS In June 2024, we, through our B&W PGG Luxembourg Finance Sárl subsidiary, sold all issued and outstanding share capital of our Denmark-based renewable parts and services subsidiary, BWRS, to Hitachi Zosen Inova AG. In the first quarter of 2026, we recorded a loss of $0.9 million as part of settlement negotiations with the buyer. RESULTS OF OPERATIONS Condensed Consolidated Results of Operations The following discussion reflects the consolidated results of our operations as noted below. Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 $ Change 2026 2025 $ Change Revenues $ 319,716 $ 138,856 $ 180,860 $ 534,130 $ 287,454 $ 246,676 Costs and expenses: Cost of operations 273,080 97,401 175,679 444,037 218,232 225,805 Selling, general and administrative expenses 33,695 33,332 363 78,074 61,636 16,438 Research and development costs 619 942 (323) 1,422 1,290 132 Impairment of long-lived assets — — — — 950 (950) Loss on asset disposals, net 553 165 388 484 173 311 Operating income 11,769 7,016 4,753 10,113 5,173 4,940 Interest expense (5,007) (10,992) 5,985 (9,455) (22,034) 12,579 Change in fair value of customer warrants 5,858 — 5,858 (64,384) — (64,384) Income tax (benefit) expense (1,076) 4,023 (5,099) 3,078 5,945 (2,867) Income (loss) from continuing operations $ 14,255 $ (7,436) $ 21,691 $ (65,367) $ (23,068) $ (42,299) Three Months Ended June 30, 2026 and 2025 Revenues increased by $180.9 million to $319.7 million in the three months ended June 30, 2026 compared to $138.9 million in the three months ended June 30, 2025. The increase is primarily driven by an increase in large project volume, including $100.7 million from Base Electron. This improvement is primarily due to the increasing need for electricity from fossil fuels driven by the demand from AI, data centers and expanding economies. Costs of operations increased by $175.7 million to $273.1 million in the three months ended June 30, 2026 compared to $97.4 million in the three months ended June 30, 2025. The increase is primarily driven by the higher revenue as described above as well as the product mix of higher large project volume which carries higher costs needed to complete certain projects. In addition, construction costs have increased due to a nationwide shortage of skilled labor, which has caused lower than expected productivity on certain job sites. 34 SG&A expenses only slightly increased by $0.4 million to $33.7 million in the three months ended June 30, 2026 compared to $33.3 million in the three months ended June 30, 2025. SG&A expenses remained relatively consistent year over year. Research and development costs only slightly decreased by $0.3 million to $0.6 million in the three months ended June 30, 2026 compared to $0.9 million in the three months ended June 30, 2025. These costs remained relatively consistent year over year. Loss on asset disposals, net increased by $0.4 million to $0.6 million in the three months ended June 30, 2026 compared to $0.2 million in the three months ended June 30, 2025 primarily related to minor disposals in 2026. Operating income increased by $4.8 million to $11.8 million in the three months ended June 30, 2026 compared to Operating income of $7.0 million in the three months ended June 30, 2025. The increase is primarily due to the revenue increase and increased gross profit, partially offset by the increased SG&A expenses noted above. Income from continuing operations increased by $21.7 million to $14.3 million in the three months ended June 30, 2026 compared to a loss of $7.4 million in the three months ended June 30, 2025. The increase is primarily driven by the improvement in the operating income results noted above. We also benefited from a reduction to interest expense of $6.0 million, a change in fair value of customer warrants of $5.9 million and a decrease to tax expense of $5.1 million as noted below. Six Months Ended June 30, 2026 and 2025 Revenues increased by $246.7 million to $534.1 million in the six months ended June 30, 2026 compared to $287.5 million in the six months ended June 30, 2025. The increase is primarily driven by an increase in large project volume, including $131.7 million from Base Electron. This improvement is primarily due to the increasing need for electricity from fossil fuels driven by the demand from AI, data centers and expanding economies. Costs of operations increased by $225.8 million to $444.0 million in the six months ended June 30, 2026 compared to $218.2 million in the six months ended June 30, 2025. The increase is primarily driven by the mix of the business as large project volume increased, resulting in higher costs needed to complete certain projects. In addition, construction costs have increased due to a nationwide shortage of skilled labor, which has caused lower than expected productivity on certain job sites. SG&A expenses increased by $16.4 million to $78.1 million in the six months ended June 30, 2026 compared to $61.6 million in the six months ended June 30, 2025. The increase is primarily driven by an increase in share price of our common stock during the six months ended June 30, 2026, which resulted in the increase in stock-based compensation expense for grants to senior members of management, including an increase in the valuation of stock appreciation rights. Research and development costs increased by $0.1 million to $1.4 million in the six months ended June 30, 2026 compared to $1.3 million in the six months ended June 30, 2025. These costs remained relatively consistent year over year. Impairment of long-lived assets decreased by $1.0 million in 2026. The decrease relates to an impairment recognized in 2025 relating to a reduction in our real estate footprint. Loss on asset disposals increased by $0.3 million to $0.5 million in the six months ended June 30, 2026 compared to $0.2 million in the six months ended June 30, 2025 primarily related to minor disposals in 2026. Operating income increased by $4.9 million to $10.1 million in the six months ended June 30, 2026 compared to $5.2 million in the six months ended June 30, 2025, primarily due to the increased revenue increasing gross profit partially offset by the increased SG&A expenses noted above. Loss from continuing operations increased by $42.3 million to $65.4 million compared to a loss of $23.1 million in the six months ended June 30, 2025. The increase was primarily driven by non-cash change in fair value of customer warrants of $64.4 million, partially offset by a decrease in income tax expense of $2.9 million and a reduction in interest expense of $12.6 million. 35 Other Expenses Impacting Operating Results Interest Expense Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Components associated with borrowings from: Credit Agreement $ 4 $ 1,138 $ 7 $ 2,265 Senior Notes due 2026 1,135 5,201 2,307 11,521 Senior Notes due 2030 2,832 1,038 5,664 1,038 3,971 7,377 7,978 14,824 Components associated with amortization or accretion of: Credit Agreement 691 1,477 921 3,086 Senior Notes due 2026 229 488 456 1,144 Senior Notes due 2030 (1,361) (577) (3,062) (577) (441) 1,388 (1,685) 3,653 Components associated with interest from: Lease liabilities 586 645 1,148 1,236 Letter of credit interest 1,012 1,399 2,418 1,892 Other interest expense 229 183 268 429 Capitalized interest (350) — (672) — 1,477 2,227 3,162 3,557 Total interest expense $ 5,007 $ 10,992 $ 9,455 $ 22,034 Interest expense for the three and six months ended June 30, 2026 is lower compared to the three and six months ended June 30, 2025 due to the debt refinancing and paydown transactions that occurred in 2025 that results in lower base principal and will result in accretion of the gain on exchange over the life of the debt. See Note 13 to the Condensed Consolidated Financial Statements for further details. Change in Fair Value of Customer Warrants The change in the fair value of the Warrants is primarily driven by fluctuations in the Company's stock price, which slightly decreased comparative to March 31, 2026, but increased comparative to the stock price at December 31, 2025. As a result, we recorded income of $5.9 million for the three months ended June 30, 2026, and expense of $64.4 million for the six months ended June 30, 2026. Income Taxes Three Months Ended June 30, Six Months Ended June 30, (in thousands, except for percentages) 2026 2025 Change 2026 2025 Change Income (loss) from continuing operations before income tax (benefit) expense $ 13,179 $ (3,413) $ 16,592 $ (62,289) $ (17,123) $ (45,166) Income tax (benefit) expense (1,076) 4,023 (5,099) 3,078 5,945 (2,867) Effective tax rate (8.2) % (117.9) % (4.9) % (34.7) % Our effective tax rate for the three and six months ended June 30, 2026 is not reflective of the U.S. statutory rate primarily due to certain foreign countries having a tax rate higher than the U.S. statutory rate, valuation allowances against certain net deferred tax assets and favorable 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. 36 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"). 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. 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 our customers to pay 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 represent changes to the backlog. Bookings include additions related to new business or increases in project scope, subtractions due to customer cancellations or reductions in project scope, changes in estimates that affect selling price and revaluation of backlog denominated in foreign currency. We believe comparing bookings on a quarterly basis or for periods less than one year is less meaningful than for longer periods, and that shorter-term changes in bookings may not necessarily indicate a material trend. Total bookings as of June 30, 2026 and 2025 were as follows: Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 B&W (1) $ 150.5 $ 108.7 $ 2,663.0 $ 230.0 (1) Bookings of $2.4 billion were related to Base Electron for the six months ended June 30, 2026. Our backlog as of June 30, 2026 and 2025 was as follows: As of June 30, (in millions) 2026 2025 B&W $ 2,569.0 $ 405.6 Of the backlog at June 30, 2026, we expect to recognize revenues as follows: (in millions) 2026 2027 Thereafter Total B&W $ 403.8 $ 674.5 $ 1,490.7 $ 2,569.0 Non-GAAP Financial Measures In addition to Income (loss) from continuing operations, we use non-GAAP financial measures internally to evaluate our performance and make financial and operational decisions. When viewed in conjunction with GAAP results and the accompanying reconciliations, we believe that the presentation of these measures provides investors with greater transparency and a greater understanding of factors affecting our financial position and results of operations than GAAP measures alone. The presentation of non-GAAP financial measures should not be considered in isolation or as a substitute for the related financial results prepared in accordance with GAAP. The following discussion of our business segment results of operations includes a discussion of EBITDA and Adjusted EBITDA. EBITDA focuses on the earnings generated from core business operations, without considering the effects of financing, accounting decisions or tax. EBITDA and Adjusted EBITDA differ from the most directly comparable measure calculated in accordance with GAAP. A reconciliation of Income (loss) from continuing operations, the most directly 37 comparable GAAP measure, to EBITDA and Adjusted EBITDA is included below. Management believes that this financial measure is useful to investors because it excludes certain expenses, allowing investors to more easily compare our financial performance period to period. When viewed in conjunction with GAAP results, we believe the presentation of EBITDA and Adjusted EBITDA provides investors with greater transparency and a greater understanding of factors affecting our financial position and results of operations than GAAP measures alone. Adjusted EBITDA is calculated as earnings before interest, tax, depreciation and amortization, and adjusted for items such as gains or losses arising from the sale of non-income producing assets, net pension benefits, stock-based compensation, restructuring activities, impairments, gains and losses on debt extinguishment, legal and settlement costs, costs related to financial consulting and amortization and valuation of customer warrants. Additionally, the Company redefined its definition of Adjusted EBITDA to eliminate the effects of certain items including interest on letters of credit included in Cost of operations and product development costs. Prior period results have been revised to conform with the revised definition and present separate reconciling items in our reconciliation. Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Income (loss) from continuing operations $ 14,255 $ (7,436) $ (65,367) $ (23,068) Interest expense, net 4,257 10,455 8,065 21,257 Income tax (benefit) expense (1,076) 4,023 3,078 5,945 Depreciation & amortization 2,507 2,126 5,008 4,441 EBITDA 19,943 9,168 (49,216) 8,575 Impairment of long-lived assets — — — 950 Benefit plans, net (427) 776 (856) 1,555 Loss on asset disposals, net 553 165 484 173 Stock-based compensation 1,591 758 14,823 1,521 Restructuring activities 2,003 — 2,512 111 Loss on debt extinguishment 31 — 59 — Settlements and related legal costs 2 472 43 536 Foreign exchange (4) (1,590) 97 (1,188) Financial advisory services 266 3,319 721 5,167 Customer warrant amortization 3,079 — 4,143 — Change in fair value of customer warrants (5,858) — 64,384 — Other – net 591 793 653 509 Adjusted EBITDA $ 21,770 $ 13,861 $ 37,847 $ 17,909 Impairment of long-lived assets Impairment of long-lived assets refers to when the carrying amount of an asset exceeds the fair value or recoverable amount. Benefit plans, net We recognize pension and other postretirement benefit income or expense based on actuarial calculations. The net impact depends on the relationship between the expected return on plan assets and the cost of providing benefits. Benefit costs are relatively low because our plans are frozen, meaning employees are no longer earning additional benefits. Reported pension results may vary due to mark‑to‑market adjustments, which reflect changes in interest rates, asset performance, or one‑time events such as plan settlements or curtailments. These adjustments are driven by market conditions and actuarial assumptions as of the date of the event. Because mark‑to‑market impacts are inherently volatile and often event‑driven, any gain or loss recognized in a given period should not be considered indicative of future pension income or expense. 38 Refer to Note 12 to the Condensed Consolidated Financial Statements for further information regarding our pension and other postretirement plans. Loss on asset disposals, net We, at times, will sell or dispose of certain assets that are unrelated to our current or future operations. Therefore, we believe it is useful to exclude these gains and losses from our non-GAAP financial measures in order to highlight the performance of the continuing business. Stock-based compensation The grant date fair value of stock-based compensation varies based on the derived stock price at the time of grant, valuation methodologies, subjective assumptions and reward types. This may make the impact of this form of compensation on our current financial results difficult to compare to previous and future periods. Therefore, we believe it is useful to exclude stock-based compensation from our non-GAAP financial measures in order to highlight the performance of the business and to be consistent with the way many investors evaluate our performance and compare our operating results to peer companies. Restructuring activities Restructuring activities and business services transition actions across our business units and corporate functions primarily consist of severance and related costs associated with non-recurring actions taken to transform our operations with impacts on employees and facilities used in our businesses. Business services transition costs relate to new technology implementation, expected to provide future benefit and are included in Cost of operations and SG&A expenses in the Condensed Consolidated Statements of Operations. Loss on debt extinguishment Losses on debt extinguishment are due to the exit costs associated with our repurchase of outstanding Senior Notes due 2026. Settlements and related legal costs Settlements and related legal costs relate to expenses associated with resolving legal disputes, whether through negotiated settlements or court judgments. Foreign exchange Foreign exchange gains and losses are primarily related to settlement of transactions denominated in a currency different than the functional currency of the Company. We report foreign currency transaction gains (losses) in income in the Condensed Consolidated Statements of Operations. Management excludes these expenses from Adjusted EBITDA as they do not reflect the ordinary course of business and are inherently unpredictable in timing and amount. Financial advisory services Financial advisory services relate to financial and business planning and other professional services. Customer warrant amortization Customer warrants are amortized over the life of the associated agreement and recorded as a reduction to Revenues in the Condensed Consolidated Statements of Operations. Management excludes the reduction to revenue from Adjusted EBITDA as they are a non-cash transaction and do not reflect the ordinary course of business. Refer to Note 14 to the Condensed Consolidated Financial Statements for further information regarding our Customer warrant amortization. 39 Change in fair value of customer warrants Change in fair value of customer warrants is recognized as a gain or loss in the Condensed Consolidated Statements of Operations. Management excludes the expense from Adjusted EBITDA as they are a non-cash transaction and do not reflect the ordinary course of business. Refer to Note 14 to the Condensed Consolidated Financial Statements for further information regarding our Change in fair value of customer warrants. LIQUIDITY AND CAPITAL RESOURCES Liquidity Our primary liquidity requirements include debt service, funding dividends on Preferred Stock and working capital needs. We fund our liquidity requirements primarily through cash generated from operations, external sources of financing, including our Credit Agreement, senior notes, and equity offerings, and our Preferred Stock, each of which are described below and in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report in further detail. We believe that our current operating plan and borrowings available under our Credit Agreement will be sufficient to satisfy our foreseeable liquidity needs and capital expenditure requirements, including for at least the next twelve months. We may elect to raise additional capital through the sale of additional equity or debt financing to fund business activities such as strategic acquisitions, capital expenditures, working capital needs or other purposes beyond the next twelve months. Additional financing may not be available on terms favorable to us or at all, and may also be impacted by any disruptions in the financial markets. In addition, our existing indebtedness could limit our ability to obtain additional financing. Cash and Cash Flows The following discussion on our cash flows is inclusive of continued and discontinued operations, consistent with our presentation on the Condensed Consolidated Statements of Cash Flows in accordance with GAAP. At June 30, 2026, our cash and cash equivalents, and restricted cash totaled $382.8 million, and we had total debt of $276.8 million, of which $23.7 million is unamortized premium. We also had $191.7 million of gross Preferred Stock outstanding. Our foreign cash was $11.4 million of our total cash and cash equivalents and restricted cash as of June 30, 2026. In general, our foreign cash balances are not available to fund our U.S. operations unless the funds are repatriated or used to repay intercompany loans made from the U.S. to foreign entities, which could expose us to taxes we have not made a provision for in our results of operations. We have no plans to repatriate these funds to the U.S. We had $48.5 million of restricted cash as of June 30, 2026 related to collateral for certain letters of credit as part of funding for several ongoing projects. Cash flows provided by operating activities was $0.4 million in the six months ended June 30, 2026, which is primarily attributable to net loss of $62.7 million after excluding non-cash expense items such as the change in fair value of customer warrants of $64.4 million and stock compensation expense of $14.8 million. Cash flows provided by operating activities also included movements in certain operating assets and liabilities such as increases in accounts payable of $100.3 million, partially offset by increases in accounts receivable trade, net of $60.9 million and contracts in progress of $17.8 million, as well as a decrease in advance billings on contracts of $30.5 million. Advance billings on contracts and construction in progress are primarily impacted by timing differences related to progress made on ongoing projects, billings, and collections, and may fluctuate significantly period to period. Cash flows used in operating activities was $33.8 million in the six months ended June 30, 2025, which was primarily attributable to the year-to-date net loss of $80.5 million, partially offset by non-cash expenses arising from the loss on sale of business of $35.8 million and impairment of long-lived assets of $9.9 million. Cash flows used in operating activities also included movements in certain operating assets and liabilities such as decreases in inventories of $7.9 million and pension liabilities, accrued postretirement benefits and employee benefits of $6.9 million resulting from contributions made to the plan. Offsetting these decreases were increases to contracts in progress of $9.8 million and accrued and other current liabilities of $8.1 million, due to the result of timing of payments to vendors. Cash flows used in investing activities was $9.9 million in the six months ended June 30, 2026, primarily due to purchases of fixed assets relating to BrightLoop™ projects, partially offset by proceeds from the sale of businesses and other asset disposals of $3.9 million. Cash flows provided by investing activities were $10.6 million in the six months ended June 30, 2025, 40 primarily due to proceeds from the sale of our Vølund business of $20.1 million, offset by purchases of fixed assets relating to BrightLoop™ projects. Cash flows provided by financing activities was $191.4 million in the six months ended June 30, 2026, primarily related to the proceeds of $259.8 million pursuant to our equity offerings as described in Note 14 to the Condensed Consolidated Financial Statements, partially offset by buybacks of our Senior Notes due 2026 of $23.0 million and net repayments on the Credit Agreement of $18.7 million. Cash flows provided by financing activities was $2.6 million in the six months ended June 30, 2025, primarily related to the net borrowings on the Credit Agreement of $6.9 million and equity offerings of $5.5 million, partially offset by debt issuance related to the debt refinancing of $5.1 million and Preferred Stock dividend payments of $3.7 million. Debt and Credit Facility Information related to our debt and Credit Facility is described in Note 13 to the Condensed Consolidated Financial Statements and is incorporated herein by reference. CRITICAL ACCOUNTING POLICIES AND ESTIMATES For a summary of the critical accounting policies and estimates that we use in the preparation of our unaudited Condensed Consolidated Financial Statements, see "Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no significant changes to our policies during the six months ended June 30, 2026 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.