Ladies and gentlemen, thank you for standing by. Welcome to the Babcock & Wilcox Third Quarter 2020 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Megan Wilson, Vice President of Investor Relations. Please go ahead.

Thank you, Natalia, and good morning, everyone. Welcome to Babcock & Wilcox Enterprises Third Quarter 2020 Earnings Conference Call. I'm Megan Wilson, Vice President of Investor Relations at B&W. Joining me this morning 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 by tomorrow evening 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 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 morning and in our company overview presentation filed on Form 8-K this morning and posted on the Investor Relations section of our website at babcock.com. With that, I will turn the call over to Kenny.

Thanks, Megan, and good morning, everyone, and thanks for joining our call. Our third quarter results were stronger, primarily due to a loss recovery related to our historical European EPC loss projects, but also reflecting the ongoing execution of our turnaround strategy. Despite the challenges presented by COVID-19 and its impact on revenues across all of our segments, adjusted EBITDA was roughly breakeven for the quarter before the benefit of the loss recovery really demonstrating the effectiveness of our cost-saving initiatives. While we continue to feel the impacts of the pandemic, a number of projects that were previously delayed or deferred due to the pandemic are now restarting. Bookings improved significantly in the quarter, reflecting both the momentum of project restarts and the effects of our recent strategic actions. Specifically, we booked $177 million of new work in the third quarter which is 106% increase over the third quarter in 2019 and 111% sequential increase compared to the second quarter of 2020. This improvement was driven by our rebranding and reorganization initiatives, our ongoing international expansion, our extended financing agreement and the value of the technology solutions we provide to our customers to support a clean, sustainable energy and industrial infrastructure. This includes our broad suite of advanced renewable and environmental and thermal technologies, such as high-performance waste-to-energy systems, innovative submerged grind conveyor systems and flexible natural gas-fired package boilers, as well as strategic partnerships to accelerate advanced energy storage solutions. Looking forward, our pipeline of over $5 billion of identified opportunities that we expect to bid through 2023, which, by the way, does not include parts and services, continues to strengthen. And the expansion of our international presence is progressing as planned. Similar to other companies impacted by the pandemic, it's really impossible for us to fully predict the…

Thank you, Kenny. Beginning with the third quarter of 2020, we're reporting our financial results under 3 new reportable segments aligned with the strategic and market-focused organizational and rebranding initiative that we announced last quarter. The segment results for prior periods have been restated for comparative purposes in our earnings release and our 10-Q, which will be filed by tomorrow evening. Our third quarter consolidated revenues were $132.5 million. Our focus on core technologies and profitability, combined with the adverse impacts of COVID-19, impacted the revenues across all segments as compared to the third quarter of 2019. Our GAAP consolidated operating income was $14.1 million, including the impact of the nonrecurring loss recovery of $26 million, recognized in the B&W Renewables segment under an October 10, 2020 settlement agreement with an insurer in connection with 5 of the 6 historical European loss contracts. This was partially offset by lower volume and the impacts of COVID-19 in all of our segments as well as restructuring and settlement costs and advisory fees of $6.2 million. GAAP net income was $34.7 million, a $91.7 million improvement compared to the third quarter of 2019, primarily driven by the nonrecurring loss recovery, favorable foreign exchange, which were partially offset by lower interest expense. Our consolidated adjusted EBITDA was $25.6 million with an adjusted EBITDA margins of approximately 19.3%. While the positive impacts of our cost savings efforts have been temporarily reduced by the adverse impacts of COVID-19, we continue to see the increasing benefits of cost-saving initiatives that we previously implemented, which affect both cost of operations and our SG&A. These cost savings initiatives helped drive a $12.5 million reduction in consolidated SG&A expense in the 9 months ended September 30, 2020. This is a 10.4% improvement compared to the first 9 months of 2019…

Thanks, Lou. While we can't fully predict how COVID will affect the timing of bookings and project progress in the near term, we are seeing a renewed -- we are seeing renewed opportunities emerging as many of our customers restart paused projects or undertake new projects and upgrades, leveraging our technology. Combined with our recent strategic actions, this momentum is now driving significantly improved bookings and a confident outlook. Based on our current visibility on COVID-19 impacts and our customer plans, we expect strong bookings through the end of 2020 and into the next year with significant earnings growth in 2021. Today, our focus is on winning and executing quality projects as well as aftermarket services to serve our customers' needs for renewable energy, environmental solutions and efficient operations. We believe strongly we have the technologies, expertise and opportunities to expand our renewable and environmental platform significantly over the next few years. Finally, as we have said before, we are keenly focused on reaching our EBITDA targets for 2021 and 2022. We recently announced the extension of contracts for various senior management, including myself, which reflects our confidence and commitment going forward. Since day one, we have been fighting for all of our stakeholders, and we look forward to accelerating the significant progress we have made to strengthen our core business as we continue to unlock the potential of our global brands, B&W Renewable, B&W Environmental and B&W Thermal. With that, I will turn the call back over to Natalia, who will assist us in taking your questions. Natalia?

[Operator Instructions] And we have a question from the line of Richard Dearnley with Longport Partners.

Could you -- the furlough salary cuts deferrals and whatnot, could you size those, and then perhaps comment on how long they might go on or to what extent they're permanent?

Yes. I'll start, and Lou can fill in. I mean we... Go ahead. It's all right, Lou, go ahead.

Well, I just -- from a quantification standpoint, we're looking at about $5 million to $6 million a quarter. Some of that gets offset by government programs that we get reimbursed for. And how long it will go, I'll let Kenny answer that because I don't know that any of us know when it will stop.

Yes. I mean we're -- as work resumes and other aspects of the impact of COVID start either to diminish or as customers begin to renew the project, obviously, we'll begin bringing people back from the furlough standpoint. But sitting here today, it's impossible to predict precisely how all that impact is going to occur over the next 3 or 4 months.

I understand that. And then the deferred financing, you said -- or the loss recovery was $26 million. And half of that would be $13 million, but your debt repayment of the net was $8 million. What's the $5 million difference?

Mainly in fees and costs to legal fees and other costs associated with recovering that cash flow. That recovery process has been going on for many, many years right now. So it's net of all of those fees.

There are no further questions. Are there any closing remarks?

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

This concludes the Babcock & Wilcox Third Quarter 2020 Earnings Conference Call. Thank you for your participation. You may now disconnect.