Babcock & Wilcox Enterprises, Inc.BW

Babcock & Wilcox Enterprises, Inc. Fair Value Disclosure

10-KFiled Mar 16, 20263 min read
FAIR VALUE MEASUREMENTS
The accounting guidance established by ASC 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (known as "Level 1") and the lowest priority to unobservable inputs (known as "Level 3"). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2.

The following tables summarize financial assets carried at fair value, all of which were valued from readily available prices (Level 1).

Securities

Level 1
(in thousands)December 31, 2025December 31, 2024
Corporate notes and bonds$5,334 $5,196 
United States Government and agency securities
1,806 1,598 
Total fair value of securities
$7,140 $6,794 

Investments in securities are presented as $6.5 million in Other current assets and $0.6 million Other assets as of December 31, 2025 in the Consolidated Balance Sheets with contractual maturities ranging from 0 to 2 years.

Senior Notes due 2026

See Note 15 to the Consolidated Financial Statements for a discussion of our Senior Notes due 2026. The fair value of the Senior Notes due 2026 is based on readily available quoted market prices (known as "Level 1") as of December 31, 2025.


December 31, 2025December 31, 2024
(in thousands)
8.125% Senior Notes ("BWSN") (1)
6.50% Senior Notes ("BWNB")
8.125% Senior Notes ("BWSN")
6.50% Senior Notes ("BWNB")
Carrying Value
$— $84,792 $193,035 $151,440 
Estimated Fair Value
— 83,435 170,643 120,546 
(1) We redeemed the 8.125% Senior Notes at December 31, 2025. See Note 15 to the Consolidated Financial Statements for further information.

Senior Notes due 2030

The fair value of the Senior Notes due 2030 is based on present value of future cash flows discounted at estimated borrowing rates for similar debt instruments or on estimated prices based on current yields for debt issues of similar quality and terms (known as Level 2) as of December 31, 2025.

December 31, 2025
(in thousands)Carrying ValueEstimated Fair Value
8.75% Senior Notes
$129,473 $127,359 
Other Financial Instruments

We used the following methods and assumptions in estimating fair value amounts for other financial instruments:

•Cash and cash equivalents and restricted cash and cash equivalents. The carrying amounts reported in the accompanying Consolidated Balance Sheets for cash and cash equivalents and restricted cash and cash equivalents approximate their fair value due to their highly liquid nature and are classified as Level 1.
•Revolving Debt. We base the fair value of debt instruments on quoted market prices. Where quoted prices are not available, we base the fair value on Level 2 inputs such as the present value of future cash flows discounted at estimated borrowing rates for similar debt instruments or on estimated prices based on current yields for debt issues of similar quality and terms. The fair value of Revolving Debt was calculated at $65.5 million, which is $1.3 million less than its carrying amount at December 31, 2025.

Historical Timeline

Fiscal YearFiled
2025Mar 16, 2026Showing above
2024Mar 31, 2025
2023Mar 15, 2024
2022Mar 16, 2023
2021Mar 8, 2022
2020Mar 8, 2021
2019Mar 30, 2020
2018Apr 2, 2019
2017Mar 1, 2018
2016Feb 28, 2017
2015Feb 25, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

Income TaxesRevenueEarnings Per SharePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsStock CompensationNew Standards