Good evening. Thank you for joining the Babcock & Wilcox Enterprises Third Quarter 2022 Earnings Conference Call. My name is Megan, and I will be your moderator. I would now like to hand over the call to your host, Sharyn Brooks, Director of Communications. Sharyn, please continue.

Thank you, Megan, and thanks to everyone for joining us on Babcock & Wilcox Enterprises third quarter 2022 earnings conference call. Joining the call today are Kenny Young, B&W's Chairman and Chief Executive Officer; and Lou Salamone, Chief Financial Officer, to discuss our third quarter results. During this call, certain statements we make will be forward-looking. These statements are subject to risks and uncertainties, including those set forth in our safe harbor provision for forward-looking statements that can be found at the end of our earnings press release and also in our Form 10-Q that will be filed today and our Form 10-K that is on file with the SEC and provide further detail about the risks related to our business. Additionally, except as required by law, we undertake no obligation to update any forward-looking statements. We also provide non-GAAP information regarding certain of our historical and targeted results to supplement the results provided in accordance with GAAP. This information should not be considered superior to or as a substitute for the comparable GAAP measures. A reconciliation of historical non-GAAP measures can be found in our third quarter earnings release published this afternoon and in our company overview presentation that will be filed on Form 8-K this afternoon and posted on the Investor Relations section of our website at babcock.com. I will now turn the call over to Kenny.

Thanks, Sharyn, and thanks, everyone, for joining us today. While we continue to see elevated demand directly supported by an increase in our bookings and a strong backlog, our results for the quarter and revised targets reflect many of the current market challenges and negative impacts of the industry worldwide, and the global supply chain pressures and challenges driven by geopolitical issues in the ongoing war in Ukraine, along with various lingering COVID restrictions. These ongoing issues negatively impacted the timing of revenue recognition on certain projects across our business segments. Despite these near-term headwinds, we continue to execute and progress against our long-term strategic growth strategy with an over 30% increase in both bookings and backlog at the end of the third quarter compared to the same period a year ago. More importantly, our backlog is strong and increasing. Although certain regional backlog and inventory values are reduced by currency drops in Great Britain and across Europe, we continue to have a strong and proven management team in place, and it's a team that has led this company through its most difficult losses in a number of years, followed by the challenges of a global pandemic, followed by the global geopolitical issues and the resulting impacts, especially within the energy sector as a result of the war in Ukraine. Despite all that, Babcock & Wilcox continues to perform, has strong operational capabilities and is much faster at reacting to global and regional challenges than in the past. In addition, we have maintained a high level of operational performance and remain on target in terms of our performance across our global projects. We have taken a number of steps to address these challenges, including managing our projects more conservatively to smooth out various impacts from the global supply chain and project delays, as well as the cost increases we continue to see. Importantly, we want to emphasize that our third quarter results and recently revised adjusted EBITDA target is not reflective of nor a repeat of overall project performance-related issues; it reflects the timing of revenue recognition across our project portfolio that has been adversely impacted by the ongoing market challenges that we and so many other companies continue to face. Despite the present supply chain headwinds, we remain optimistic about our current visibility for new booking opportunities which should drive growth in 2023 across all of our business segments as a result of the rising demand for thermal base load generation and clean energy technology solutions. As discussed on our prior earnings call and mentioned in our previously announced revision to our adjusted EBITDA targets, the war in Ukraine and the global supply chain disruptions continue to present ongoing challenges to our various project timings and parts delivery, which, again, is similar to the experience of so many companies around the world. These challenges also affect our customers as their infrastructure suppliers are facing delays for raw materials, industrial components and labor shortages that are required to cover the balance of plant and are outside of our scope. These have affected the timing of planned new bookings, as well as deferrals on revenues in certain projects and parts and services. We continue to work to mitigate these challenges through various supply chain efforts, our customers' efforts, and our established global resources. We remain focused on minimizing these issues where possible but recognize that we may continue to experience such adverse impacts as these global conditions persist. As best we can, we believe our revised targets reflect the currently known supply chain challenges and overall timing of new bookings, backlog runoff, investments, revenues, and EBITDA. Our operational performance on projects remains strong and on target. Our recently revised expectations are not reflective of overall project performance-related issues. Generally, we have been effective at mitigating any project issues that arise from time to time appropriately. As we look forward to the potential tailwind opportunities for our business segments, as demand for energy security and alternatives to natural gas continue to emerge, we remain committed to expanding our operations, both domestically and internationally as a global technology leader and solutions provider. Healthy and elevated demand trends along with global initiatives around hydrogen and the decarbonization future continue to position the company well to be a leader in the clean energy transition. We have over 90 patents filed around our carbon capture technology and processes, as well as exclusive rights with patents shared with Ohio State University through our joint R&D efforts over the past 10 to 15 years. Our biomass energy solutions, combined with OxyBright, our oxy-combustion technology, allows for green energy to be produced with negative carbon intensity, which allows our customers to maximize the low carbon fuel standards. We continue to develop new technologies such as green steam, long-duration storage, as well as exploring and testing various fuel alternatives for BrightLoop. We continue to progress our commercialization process for BrightLoop and are in detailed discussions to secure specific site locations, feedstock and CO2 sequestration. We are now in discussions with various industrial and utility clients regarding additional commercial opportunities and the interest and application of BrightLoop continues in earnest. Throughout the third quarter, we continued to recognize increased interest in our ClimateBright Decarbonization platform as evidenced by the recently announced contract award to study the application of B&W SolveBright, a solvent-based carbon dioxide capture solution for Consol Energy's advanced coal and biomass-based 21st-century power plant project, which is currently in development. This award followed shortly after our announced $42 million contract to provide construction and installation services for an environmental upgrade project here in the U.S. for a power plant. Together, these developments speak to the increasing demand for clean power production infrastructure and validate our growth pipeline within the environmental segment. We will discuss these recent award wins in further detail on the call today and provide updates on current scale-up BrightLoop decarbonization and hydrogen syngas production technologies. With respect to our bookings and backlog at the end of the third quarter, we experienced strong year-over-year growth, supporting our outlook for improved fourth quarter performance and our ability to reiterate our adjusted EBITDA target for the full year 2023 of $100 million to $120 million. For the third quarter of 2022, our ending backlog was $730 million, which is an increase of 35% compared to the third quarter of 2021. Additionally, when excluding the negative impact on our existing backlog related to foreign exchange rates, we saw our backlog grow sequentially during the third quarter of 2022 as compared to the second quarter of 2022. Bookings for the third quarter 2022 were $227 million, an increase of 31% as compared to the same period a year ago, demonstrating our continued success in converting our recently expanded $7.8 billion of identified global project opportunities. Our current visibility for new booking opportunities reflects an increase over the last quarter's $7.5 billion of identified pipeline opportunities, and this is expected to drive growth through 2023. We look forward to announcing additional contract awards as these prospects materialize. We anticipate an additional new build waste-to-energy announcement yet this year. That, plus our current backlog and waste-to-energy has significantly increased towards our goal of revenues being two-thirds renewable and environmental and one-third thermal in the near future. The $42 million environmental segment contract award I mentioned earlier to provide construction and installation services for the environmental upgrade highlights our strategic focus on providing the necessary equipment to enable clean and efficient processes for our customers' operational success. We strive to provide existing and new customers with the technology required to enable a sustainable future and are excited to provide our extensive expertise and solutions. Our recently announced contract award to study the application of B&W SolveBright, a solvent-based carbon dioxide capture solution for Consol Energy's advanced coal and biomass-based 21st-century power plant project, is yet another great example of how we are providing our customers with transformative technology solutions. Through this study, we aim to evaluate how our SolveBright technology would be used to treat the flue gas stream from a power plant to capture CO2 and generate clean energy with near-zero emissions. We remain intently focused on advancing the study to show how our advanced carbon capture technologies can be used on this groundbreaking clean energy project and similar projects in the future. I'll now turn the call over to Lou Salamone, who will discuss some of the financial details for the third quarter. Lou?

Thank you, Kenny. I'm pleased to review the third quarter results of the company and provide further details that can be found on the 10-K, which will be on file with the SEC later this evening. Our third quarter consolidated revenues were $214 million, which is a 34% improvement compared to the third quarter of 2021. This is primarily attributable to higher overall volumes, previously announced acquisitions that were done in the prior year and was partially offset by a lower level of construction activity in the Thermal segment. Our net operating loss in the third quarter of 2022 was $10.3 million as compared to operating income of $14.8 million in the third quarter of 2021. This variance is primarily related to the negative impact of the global supply chain challenges and geopolitical issues Kenny mentioned above, as well as several non-recurring, non-operational items, such as the non-cash impairment of goodwill, which I'll discuss in a moment, in our Solar business of $7.2 million, which was recorded this quarter, and also a gain on the sale of an asset for $13.8 million and a one-time recovery of $6.3 million, both of which occurred in the 2021 quarter and are one-time items, so they would not be repeated in the 2022 quarter. Additionally, the impact of the tariff which ended on June 30, 2022, on solar panels impacted our ability to get panels for delivery and impacted us in the third quarter slightly as panels became available, plus we had higher interest costs and income taxes. The goodwill impairment I mentioned a moment ago was a result of several factors impacting the carrying value of the solar business, including the purchase of a minority interest at a discount, the performance of certain legacy projects and the impact of the above-mentioned tariff on solar panels, which also caused reduced performance of that reporting unit. These negatively impacted the performance because of supply constraints. Our adjusted EBITDA in Q2 was $13.1 million as compared to $18.9 million in the third quarter of 2021. This variance is related primarily to the previously mentioned gain on the sale of the asset and one-time recovery, both of which occurred in the 2021 quarter. The previously mentioned tariff on solar panels, which ended June 30, 2022, as well as the continuing negative impact of the global supply chain challenges, lingering COVID issues primarily in international markets and geopolitical issues previously mentioned. Let me now move on to bookings. Bookings in the third quarter of 2022 were $227 million, which is a 31% increase compared to third quarter bookings in 2021. Our ending backlog was $730 million, which is a 35% increase compared to the backlog at the end of the third quarter 2021. Our net loss per share in the quarter was $0.24 as compared to earnings of $0.12 in the third quarter of 2021, and that variance is a result of the items that I've mentioned above. Let me now turn to our third quarter segment results within the Babcock & Wilcox renewable segment. The revenues of this segment were $81.7 million for the third quarter of 2022, which is an increase of 115% compared to the $38 million in the third quarter of 2021. The increase in revenue is primarily due to higher volumes and new build projects, as well as revenues from acquisitions, which closed on September 30 and November 30, 2021, respectively. Adjusted EBITDA in the quarter was $4.5 million as compared to $11.4 million in the third quarter of 2021. This reduction of adjusted EBITDA was primarily due to some large project improvements achieved in the prior period and due primarily to several non-recurring and non-operational items, such as the non-cash impairment of our solar business, gain on the sale of the prior year and higher interest costs in the current year, as well as a number of smaller items. The various challenges of the renewable business resulted in certain projects being delayed in the future quarters. The higher revenue levels increased shared overhead and SG&A allocations to the segments, which are made based on revenue. The negative impacts were partially offset by the reduction of an earn-out related to the solar acquisition. These delays resulted not only in revenue higher than the previous year being less than anticipated, but negatively affected gross margins and adjusted EBITDA as a result of our higher overhead costs, which were partially offset, where possible, by recoveries from customers. Within the Babcock & Wilcox environmental segment, revenues were $44.6 million in the third quarter of 2022, which is an increase of 17% compared to the $38.2 million in the third quarter of 2021. The increase is primarily driven by higher overall volume in our system product lines, which was offset by lower service volume in the current quarter. Adjusted EBITDA of this segment was $3.1 million for the quarter as compared to $3.5 million in the same period last year, primarily driven by a completion of some higher-margin projects in the prior period, along with higher levels of shared overhead and SG&A allocated to the segment and were partially offset by the higher revenue volume described above. Revenue and adjusted EBITDA were lower than anticipated in the segment due to the negative impact of global supply chain challenges and geopolitical issues, and these various challenges resulted in certain projects being delayed into the future quarters and higher costs, all of which could not be recovered from our customers. Turning to our Babcock & Wilcox Thermal segment. Revenues were $91.3 million in the third quarter of 2022, which is an increase of 9% compared to the $83.8 million in the third quarter of 2021. This was primarily due to two acquisitions, as I mentioned above. Adjusted EBITDA in the third quarter of 2022 was $10.8 million, which is an increase of 15% compared to the $9.3 million in the third quarter of 2021, and again, the increase here is primarily attributable to the two acquisitions that were closed, as I mentioned before, and improved profit margins. Revenue and adjusted EBITDA were lower than anticipated in this segment, again, due to the negative impact of supply chain challenges and geopolitical issues. These various challenges resulted in certain projects being delayed in the future quarters and the delay of the segment to deliver parts and services to certain of the international markets as we anticipated those deliveries would occur. Now let me turn to the balance sheet, cash flow and liquidity. Our total debt at September 30, 2022, was $336.3 million, and the company had cash and cash equivalents and restricted cash balance of $69.5 million. Additionally, today, we've entered into agreements with our lenders who agreed to waive a Q3 covenant, granted permission to pay the dividend on preferred stock in Q4, conditioned upon approval by our Board and modified and/or added certain covenants to future periods for the term of the loan. I'll now turn this back to Kenny.

Lou, thanks. Well, in closing, Babcock & Wilcox continues to execute, building on the significant transformation over the last couple of years. With the operational improvements we have put in place during this period, we are well-positioned to perform robustly in these more difficult markets and times compared to our peers who have not proactively taken such measures. Despite the market challenges we have outlined that continue to impact B&W's customers and the broader industry, we have continued to expand our bookings, build our backlog, and we have maintained a high level of strong operational project performance across our global operations. We have a solid balance sheet with expanding opportunities across all of our business segments. Our robust pipeline continues to expand, and we now see more than $7.8 billion of identified global opportunities over the next three years, which is an increase from the $7.5 billion figure we discussed in recent quarters. While we remain cognizant of the near-term uncertainties with the global supply chain, we are extremely excited about the level of demand we are seeing for the business. And based on our recent bookings and existing backlog, we remain confident in our ability to drive significant growth in 2023 and beyond. I would like to highlight our team of dedicated employees who remain one of the driving forces behind our ability to continue to manage through the near challenges and drive our continued success as a company. Collectively, their continued focus on safety, strong project execution, expansion of our bookings and backlog, and commitment to helping us become leaders in the global clean energy transition are unmatched across the industry. Lastly, we continue to see B&W at the forefront of the global fight against climate change, which represents an extremely important aspect of our mission as a company. We are excited about the significant advancements within our ClimateBright decarbonization and hydrogen solutions platform and the game-changing impact that they have throughout the world. We expect to be able to announce meaningful projects in that regard in the coming periods, and we continue to see expanding opportunities ahead in this area and remain excited about continuing to build upon our position as an innovative leader in carbon capture, decarbonization and hydrogen production. We remain committed to building on our advanced technologies to meet the growing demand of our customer base for long-term energy security and decarbonization technology. I will now turn the call back over to Megan, who will support us in answering any of your questions. Megan?

Thanks for taking the questions.

No problem, Aaron. Thanks for joining tonight. Appreciate it.

Yeah, you bet. Maybe first for me, just on the supply chain, can you touch on some of the key parts there, the steps you've taken, kind of the comfort that the worst is behind you there? It sounds like you're not expecting a lot to get better there as you've kind of adjusted the guidance. And then just thinking about backlog, margins that are in there and comfort you have as we look to fiscal '23 there?

Yeah, sure. I think on the supply chain aspect, first of all, when we discussed our revised targets to the best we could, we tried to be conservative on ensuring that we included a new normal, if you will, from a supply chain standpoint. Several factors impact us, one in parts and services, and that's normally what we've always talked about. We had a book-and-bill or a book-and-bill approach of about 30 to 45 days on our standard parts of business. Over the course of the year, going into the end of the year, we saw that extend out for certain parts and components of parts that make up our parts and services business are taking longer to obtain or we have to acquire those from different suppliers around the world, which creates delays in shipping and so on. That's in the parts and services business. On the project side, we see delays on the project aspect both from the raw materials and the infrastructures impacting our customers. For example, we may have a customer that is responsible for putting in various steel infrastructure and components, and that's proven to be challenging in certain projects in certain locations because of certain supply characteristics coming out of Europe. In some cases, our customers and we have had to shift some of the steel infrastructure and components in our project business from European manufacturers over to the Asian market, which adds time and delays. We also saw a certain amount of customers delaying the start-up of projects in order to leverage a little bit of reduction in steel infrastructure and raw materials pricing, with a few customers wanting to delay to see the start of that. All of those are variable issues that we are trying to navigate. Some of that impacts labor as well, particularly in the European markets, where some suppliers have labor shortages and are impacted for various geopolitical reasons. But that's an overview of a lot of the areas that we are seeing in both the parts and services business.

All right. Thank you for the color there. And then maybe second for me, on ClimateBright? Obviously, it sounds like there are some good developments coming there, and you've had some good announcements. Can you just maybe talk about timing there, as you think about Fidelis and some of these others? Is it still kind of a 2024 event there? And what are some of those gating factors for some of those projects to move forward?

Yeah. We are actively moving ahead with the commercialization project in particular in the Louisiana location, Baton Rouge that we've talked about publicly prior. That's an important step in proving the commercialization side of the project and the technology. We are moving ahead as rapidly as we can, both on the early phases of the project. We're in discussions around securing the specific site and location. We're in discussions on the offtake agreements that would be supported in that particular project, as well as early discussions around potential interest to acquire that commercial project from us once we've completed the demonstration phase. We are excited about how that's progressing. We still have a long way to go, obviously, around the execution of that, but we are well underway and our project goals around producing hydrogen sometime in the later part of 2023 to early 2024 is still intact, and we're still progressing toward that. As we've also said publicly, we're working diligently with various government agencies on the funding mechanism inside that project. Although we haven't finalized that funding aspect at this point in time, we fully anticipate that it will occur, and we're working diligently behind the scenes to ensure that all of those pieces come into place. Right now, our focus is on securing the specific land site and the lease accordingly on that project, and that's advancing as we speak.

Good. Good to hear. Thanks for the color. I'll pass it on.

Thank you. Our next question comes from the line of Brent Thielman with D.A. Davidson. Your line is now open.

Hey, thanks. Good morning, Kenny. I guess, Kenny, I want to come back to the outlook into 2023, call it kind of a $30 million bridge from 22 to 23 in EBITDA. It sounds like you've built in some contingencies around some of these issues and bottlenecks you've had to deal with, and it sounds like you're sort of expecting that to continue. So I think I'm just trying to understand where you get the incremental $30 million in EBITDA next year? Is it some abatement in these pressures? A stronger growth? I'm just trying to understand that bridge a little bit more, just given these issues sound like that could persist.

Yeah. No, it's a good comment. We are seeing a couple of areas next year. Let me back up. First and foremost, we're trying to be as conservative as we can on the targets to ensure that we have loaded in, again, the best we can. We're assuming that things stay about the same as it relates to the global supply chain and infrastructure and the timing of various parts and services. We tried to bake that into the target that we put out for obviously the rest of this year, but more importantly, into next year around that. That's one aspect to start with. The other piece from a positive perspective, as I mentioned before, for example, in the parts and services aspect, we saw the timing from book to cash really move from a 45-day-ish period. I'm not talking about book-to-bill, but out to a 60-plus day rough order of magnitude. There are various things that are longer than that in our parts business. We've modified the forecast to reflect that. However, what we're seeing now is we're catching up, if you will, more with that timing. As we go into Q4, especially within the parts and services business in North America, we're starting to see revenue rebound back. This is only because now we're catching up with where supply chain is as it relates to those parts, so we can eventually get those parts out to our sites, meet some of the outage work and service work that's starting to increase. Historically, we've talked about the plants running more full tilt because of high natural gas costs. You're starting to see many positive trends emerging, and we anticipate this to continue to drive growth.

Okay...

Yeah, Brent, the only thing I'd say, this is Lou. The only other thing I'd add is, we don't anticipate having the tariff situation again in the solar business. We lost four months of revenue in that case. We see some projected growth in the solar business that gives us a little more confidence in being able to achieve that target.

Okay. Appreciate that Lou and Kenny. And the phenomenon behind the book to cash within the parts and services business, I presume that among some other things, is what gives you the confidence in that step up you’re expecting in the fourth quarter?

It does. As we sit here, we've obviously put out the targets based on that, and we're seeing that unfold. So yeah.

Okay. And then just another question. I mean, it looks like you're booking new work at a healthy clip. I'm just wondering how these disruptions you've experienced in terms of schedule and delays have impacted the mobility of new projects coming forth to bid and book? I mean, could it have been even stronger under different circumstances? I'm just curious.

Well, it's forced us to look deeply at the overhead of the company. When we look, we have the unique challenge of seeing new bookings come in and new opportunities. We mention that we anticipate having a new waste-to-energy booking yet this year. Obviously, we wouldn't say that if we weren't heavily involved in negotiations and other aspects around that opportunity. But when we look at those bookings, one of the challenges we have to maintain is the overhead associated with supporting that. So we have not only the supply chain aspects that fall through, but we also have the engineering and other project management aspects that we have to maintain to support future bookings. It has challenged us, but we have seen some benefit from moving to more outside support from third-party companies to assist in our engineering and efforts in the company to give us better flexibility in how we manage projects. We initiated that effort a year ago, and we are seeing some of the benefits of it this quarter and going into Q4 and next year. Our activities have helped us to overcome some of these engineering and supply chain challenges. We fully anticipate that we will continue to improve. But that is always the pressure point that we have to balance on the new technology side.

Yeah, I appreciate that, Kenny. Maybe just one last one. Lou, you mentioned some maintenance covenants put in place. Can you provide any more detail on what you need to hit here going forward?

Yeah. We've got a waiver for the third quarter. We've got relief on paying the dividend in the fourth quarter. What we've done with the new targets is go back to the lenders, and we've negotiated other covenants than the ones we had. So that gives us a little more flexibility going forward with these revised estimates and targets.

Okay. All right. Thanks, guys. I'll pass it on.

Thank you.

Thank you. Our next question comes from the line of Alex Rygiel with B. Riley. Your line is now open.

Thanks for taking my questions. Kenny and Lou, good evening. A couple of questions. Is there a chance that turnarounds that were delayed in the second half of 2022 could redevelop in early 2023 such that your seasonal trends are a little bit different in 2023?

It's too early to tell on the thermal side and parts and services whether there'll be an increased number of outages. I think what we'll see is next year some normalization in the flow of the thermal parts and services, particularly here in the domestic U.S. We see that a lot from our customers right now and planning more outages and that type of work. Natural gas pricing is still high, and those plants are still running. But they're not catching up with their cycle time to have those parts and services installed. So we see that happening. I think in the waste-to-energy aspect, we're seeing more bidding opportunities around that technology. We're starting to see the decarbonization aspect come into play for next year, which is a positive trend overall. I don't believe that the work Lou mentioned in the solar side, which were impactful this year because of the tariff aspect, would bounce back specifically into next year. However, we are observing an increased demand in solar, especially in community solar front on smaller projects, which is where we're more focused on solar. We're also moving into new technologies such as green steam, which requires solar. There are some synergistic opportunities around that that we are pursuing, so I think we will see the thermal side continue strong next year.

And then can you talk a bit about how EBITDA could exceed your 2023 guidance?

For sure. We tried to be conservative on the numbers and the direction of that target next year. The upside comes more from project timing standpoint. We tried to be a little more conservative on project timings as they go into next year. If some projects that we're seeing from customers and their stated timelines actually happen, that would pull forward revenue and increase EBITDA. We're also seeing clients pulling us into engineering opportunities and granting us grants and other funding possibilities, which will also have positive impacts and timing. However, we were conservative on the parts and services, so if there is any improvement in global supply chain aspects and we can shrink the book-to-bill from the 60 to 90 days back down to the 30- to 45-day range, all of that would be upside for us next year because we based the targets on that longer timeframe.

Perfect. Thank you very much.

Yes. Thanks, Alex.

Thank you very much. Our next question comes from the line of Rob Brown with Lake Street Capital Markets. Your line is now open.

Hi. I was wondering if you could quantify the FX impact to the backlog in the quarter?

Thanks, Rob. When you say the impact of the backlog in the quarter, what are you - just to clarify the question, sorry.

Yeah. That impact was about, round numbers, about $17 million on the backlog.

Okay. Great, thank you. And maybe just wondering if you can give some more information on the pipeline of projects in the CO2 capture market. I know you're in discussions with a lot of parties. How would you characterize the pipeline of CO2 capture projects?

Yes. Well over. I think we stated publicly that it's well over 30 projects. Very active projects where we have exploration. The large one in Louisiana, which we are not talking about BrightLoop, but the biomass facility we will implement there. We have oxy-combustion, which is unique technology. We're one of the few companies that can combine the biomass capabilities of our CFPs along with the OxyBright technology to isolate and capture the CO2 associated with it. Under the IRA credit here in the U.S., this creates negative carbon intensity for the project. Our customer can leverage the low carbon fuel standard credits from states like California and Canada. Demand for green diesel in Europe now, along with the demand for other green fuels, is quite high. We're excited about that technology and in discussions around similar opportunities where the customer is interested in biomass combined with OxyBright technology to isolate the CO2. We want to leverage various sizes, but expect that our capabilities will capture interest from a number of customers looking into that aspect. We're looking toward the growth of our company in 2024, 2025, and considering multiple opportunities as we push toward hydrogen production and testing various fuel sources. We’re in communication with clients about pre-engineering, and the technology has created strong feedback up to this point.

Okay. Great. Thank you for all that color. I'll turn it over.

Thank you. Our last question comes from the line of Jamie Cook with Credit Suisse. Your line is now open.

Hi, good evening. Just a couple of quick follow-up questions. One, you talked about your pipeline of business growing to - increasing to $7.8 billion, I think from $7.5 billion. So what are the drivers behind that? Is it some of the acquisitions that you've done and just the performance of some of the acquisitions? And then my last question, Lou, how are you thinking about the company's ability to generate cash flow like the expectations for the fourth quarter? And then as we get to 2023, when earnings or EBITDA is more normalized in the $100 million to $120 million that you talked about? Thanks.

Yeah. I think on the cash flow side, Jamie, our conversion of EBITDA to cash flow was a little behind our expectations up until now. Starting in this quarter going forward, that conversion rate is much higher. There were things in there such as the acquisitions and so forth, but we should see a much more normalized view of the conversion from our EBITDA to cash flow going forward. It's one of the items that we're really focused on, getting cash in much faster and being able to utilize our balance sheet to not get as many letters of credit out there so we can pull in more cash with fewer letters backing up. We are encouraging advanced payments to improve our cash flow.

Then on the pipeline, Jamie, we're seeing it from a couple of different sources. It is coming from a little bit from the acquisitions on that. Some of the acquisitions are parts and services, which wouldn't necessarily be in the pipeline, but we are seeing it a little from some of those acquisitions. The bigger driver or the more sizable opportunities are for biomass and waste-to-energy, where we’re starting to see multiple opportunities. That technology has proven to be effective, so we are encouraged by where we see the pipeline moving as we shift them into delivery. We have seen sustained demand stemming from the IRA credits, and that’s sufficient reason to increase the pipeline from $7.5 billion to $7.8 billion.

Okay. Thank you.

Thanks, Jamie.

Thanks, Jamie.

Thank you, Megan, and thank you for joining us today. That concludes our conference call. A replay will be available for a limited time on our website later today.

That concludes the Babcock & Wilcox Enterprises third quarter 2022 earnings conference call. Thank you for your participation. You may now disconnect your lines.