Document MJaxg7rnvVmRRoojQEeNNdzpV

Babcock &Wilcox Annual Report 1973 Energy Systems / Engineered Materials / Industrial Automation The Babcock & Wilcox Company/93rd Annual Report for the year ended December 31,1973 Letter to Stockholders / 3 Financial Statements /8 Ten-year Financial Comparisons /12 Financial Highlights TOTALS Sales (on percentage of completion method for long-term contracts)............................................ .. . Net income for the year..................................................... Cash dividends declared................................................. Orders received ............................................................... Unfilled orders..................................................................... Expenditures for property, plant and equipment.. Depreciation of plant and equipment.......................... Working capital............................................................. Stockholders' equity.............. .............. 1973 $1,063,741,000 22,083,000 9,684,000 1,884,344,000 3,288,551,000 36,836,000 21,640,000 134,496,000 317,136,000 1972 $ 955,885,000 24,436,000 6,833,000 1,475,326.000 2,467,948,000 41,897,000 19,403,000 151,250,000 316,909,000 Number of employes at year end Number of common stockholders at year end.................. Number of common shares issued at year end ........... 37,748 27,481 12,604,906 34,473 27,289 12,604,906 PER AVERAGE NUMBER OF SHARES OUTSTANDING* Net income for the year................................................... Cash dividends declared............................................. Stockholders' equity......................................................... $ 1.82 .80 26.11 $ 1.97 .55 25.54 *1973--12.146.573:1972--12,406.339 COVER: Babcock & Wilcox is a manufacturer of specially-engineered industrial products and materials with three main fields of interest: energy systems, engineered materials and industrial automation. The company's long-range growth plan is to expand in each of these areas by aggressive marketing, internal development of new and improved technology, and acquisitions of companies or product lines that fit into one of these categories. Chairman and President George G. Zipf inspects products made from ceramic fiber at the Refractories division plant in Augusta, Georgia. 'v ir* xU 2 Mm..x-tt.*.- To the Stockholders: Shipments exceeded $1 billion in 1973 lor the first time in the company's history. Earnings were 22.1 million or $1.82 per share compared with $24.4 million or $1.97 per share in 1972. Net income, which had been up by 7% at the end of the first six months in 1973, compared with the same period in 1972, dropped in the third quarter. This was due principally to a nine-week strike in the Power Generation Group. Another factor during most of the year was the cost-price squeeze on tubular products, resulting largely from the Cost of Living Council's regulation preventing us from passing through the higher cost of steel scrap. Despite price restrictions on tubular products, which were only partially relaxed late in December, consolidated earnings for the company did recover in the fourth quarter. Following is a summary of earnings per share by quarter: 1973 1972 1st quarter......................... ..................... $ .41 2nd quarter ....................... ............................. 75 3rd quarter......................... ..................... (.10) 4th quarter......................... ............................. 76 $1.82 $ .46 .61 .32 .58 $1.97 Last year i reported to you -for the first time that our total nuclear business for 1972 was profitable. The strike in our Power Generation Group during the third quarterof 1973 contributed to a loss in nuclear activities for the year. While our commercial nuclear business continues to show a loss, our overall nuclear activities should be profitable again in 1974. In addition to shipments for 1973 setting a record, orders and backlog of orders also set new highs. A summary of the key financial figures is as follows: , Shipments in 1973 were $1,063,741,000 compared with i $955,885,000 last year. The approximate distribution oi ship- ments for 1973 and 1972 by markets is as follows: I 1973 1972 t Electric Utilities............................. ........ 47% Government ................................. ........ 15 *. Warehouse and Distributors........ ........ 8 Machinery..................................... ........ 8 i Transportation............................... ......... 5 * Pulp and Paper............................. ........ 4 %t Fabricated Metal Products.......... ........ 3 Primary Metals............................. ........ 3 Chemical and Petroleum............. ........ 2 j Miscellaneous............................... ........ 5 49% 16 7 6 4 4 4 3 2 5 100% 100% e New orders totaled $1,884,344,000. This included increased | volume for fossil and nuclear steam generating systems, tubular | products, refractories and the Industrial Products Group. j The backlog reached $3,288,551.000, at the end of 1973. The | total nuclear backlog now amounts to approximately | $1.863,697,000. U is expected that about 29% of the current i backlog will be recorded as shipments in 1974, approximately J 51 % in 1975 through 1977 and 20% thereafter. ! ' The cash dividend was increased by the Board of Directors in * February 1973 to the annual rate of 80 cents per share from 55 cents per share. | Capital expenditures in 1973 amounted to $36,836,000. R&D expenditures were $21.028,000. A major share was devoted to further development of nuclear systems and fuel, and advances in fossil fuel steam generation, ceramic fibers, metallurgy and control systems. To date. $16,500.000 have been expended for environmental protection installations. Major projects completed include dust collection systems for our steel mills and refractory calcining kilns, waste treatment facilities at various plants, and improvement of combustion systems. The year 1973 stands out as one in which certain significant developments occurred affecting the long-range success and progress of Babcock & Wilcox. These were: 1. The first two B&W nuclear steam systems with oncethrough steam generators successfully started up at Duke Power's Oconee station. 2. The company continued to maintain a strong position in the fossil fuel utility market. Both domestic and export orders were up substantially in 1973. 3. The largest single capital expenditure program in the company's history was launched in 1973 to increase tubemaking capacity 40% by 1976. 4. B&W expanded its leadership position in the growing world market for ceramic fibers. The company acquired additional shares of the common stock of Babcock & Wilcox Limited, our British affiliate, for $10,458,000. This increased our percentage ownership from 15% to 23%. The company also purchased 500.000 shares of its own com mon stock at a cost of $12,172,000. These shares will be used for the company's stock option plan and other corporate purposes. B&W is essentially a manufacturer of specially-engineered industrial products and materials with three main fields of interest: energy systems, engineered materials and industrial automation. Following is a summary of 1973 activities: Energy Systems, nuclear power. The company achieved its objectives in terms of new orders for nuclear steam systems. Orders totaling more than $350 million were received for six nuclear steam supply systems and associated fuel from three domestic utilities. This represented about 16% of the aggregate nuclear capacity ordered by the industry, or more than 6,700 megawatts. Several divisions and subsidiaries will participate in furnishing the majority of components for these systems, including tubing, controls and instrumentation, metallic insulation and control-rod drives. At the end of 1973, Babcock & Wilcox had built, or had orders to supply, 28 nuclear steam systems with a cumulative capacity of more than 26,000 megawatts. In July 1973, the first nuclear steam system to use the B&W once-through steam generator began commercial operation at the Duke Power Company's Oconee station in Seneca, South Carolina. By November it was at 100% of licensed power, generating a gross output in excess of 900 megawatts. The second unit at Duke was placed in commercial operation on December 26,1973. Hot functional testing commenced in December at Metropolitan Edison's nuclear unit at Three Mile Island near Harrisburg, Pennsylvania, and it is scheduled to go on line in 1974. Construction of three other B&W nuclear steam systems was essentially completed during 1973 and these are also scheduled to become operational in 1974. The units will be Oconee 3 for Duke Power Company, Arkansas Nuclear 1 for Arkansas Power & Light, and the Rancho Seco unit for the Sacramento Municipal 3 r Utility District. By the end of 1974. more than 5.000 megawatts of on-line electrical capacity are expected to be supplied by B&W nuclear systems. In another nuclear operation, our subsidiary. Nuclear Materials and Equipment Corporation, is supplying plutonium fuel pins to be used in the AEC liquid metal breeder test reactor at Hanford, Washington. The company continues to be an important supplier of nuclear fuels and components for the U.S. Navy. New orders for this business amounted to more than $200 million in 1973. Both the commercial and Navy nuclear equipment operations established an excellent record for performance and on-time delivery. Energy Systems, fossil fuels. B&W orders lor large utility fossilfuel steam boilers were up substantially in 1973 compared with 1972. B&W was awarded about 35% of the capacity ordered. This included contracts from 18 domestic and foreign utilities having a capacity of approximately 13,000 megawatts and worth more than $330 million. The largest single order during the year was from Alabama Power for four 660 megawatt units. These coal-fired units wilt be installed at the utility's West Jefferson Steam Plant near Birmingham. Commercial operation of the first unit is scheduled for 1978. Other large contracts were'received from Houston Lighting and Power. Cincinnati Gas & Electric. Detroit Edison, Texas Utilities. Louisville Gas & Electric. Rochester Gas & Electric. Philadelphia Electric and Taiwan Power. Reflecting the current fuel crisis, about 98% of the present inquiries for utility fossil steam systems specify coal burning capa bility. Some previous orders for oil-fired units have been switched to coal within the past few months. B&W benefits by this move to coal because of the additional equipment and largersize boilers needed to handle the fuel. During 1973. the company added several new auxiliary products in this area including a regenerative air heater, an electrostatic precipitator, and a highly efficient type of axial-flow fan. Orders have exceeded our projections. In addition, our high-capacity coal pulverizer, which has demonstrated excellent performance on large units, continues to sell very well. Our company's engineering leadership in fossil-powered steam systems was demonstrated during 1973 as the world's three largest coal-fired power units, each with a 1300 megawatt B&W boiler, operated at peak levels. Two of these units were built for TVA and one for the American Electric Power Company. We are also fabricating and constructing three more units of the same size for AEP. More than 100 B&W Universal Pressure boilers with our once-through design concept are operating in utility installations throughout the world. In addition to the utility business, sales of fossil-fired equipment for industrial and marine steam generating systems were at an all-time high. The company obtained orders worth about $100 million and has a large share of this very competitive market. 3&W field-erected boilers and related equipment are widely used in oil refineries, steel plants and in the burning of waste products to provide heat. A system to burn municipal refuse to generate steam for power, using two B&W boilers, will soon begin operation in Nashville, Tennessee. B&W also leads as a supplier of shop-assembled package boilers for the petro chemical. pulp and paper, food and process industries and insti tutions such as schools and hospitals. The level of export orders for both our U.S. and Canadian facilities rose substantially. Bookings of export fossil boilers exceeded $100 million for a new record. In development work on coal gasification, we are supplying equipment fora 100-ton per day demonstration model of a coal gasification system being funded jointly by the U.S. Office of Coal Research and the American Gas Association. The unit, which will use the Bi-Gas process, is scheduled for operation at Homer City, Pennsylvania in early 1975 and could be a basis for the design of a targe commercial plant. The B&W Construction Company, a part of our energy systems activity, continues to grow and is now more than a $125 million business. The company experienced its biggest year ever in construction and completed erection of one of the world's largest boilers at American Electric Power's John E. Amos plant in West Virginia. Other activities include turbine installations and general mechanical work and erecting recovery boilers for the pulp and paper industry. The Construction Company discontinued marketing of wet cooling towers due to lack of sales. Engineered Materials. 1973 was a record year for shipments of the company's specialty steel and tubular products. As a result, our production facilities operated at full capacity during most of the year. A $12 million modernization and expansion program was completed at our Milwaukee, Alliance and Beaver Falls plants. This additional capacity and equipment made a significant contri bution to the shipment performance. At the end of the year a new large diameter$4 million welding mill was also started up at the Alliance facility. To meet expected market requirements, a three-year $50 million expansion program was begun by the Tube division at its Ambridge and Beaver Falls. Pennsylvania plants. When this program is completed, tubing production capacity will increase more than 40%. These major steps reflect our belief that this particular area of the steel business has excellent short and long term prospects, especially to meet pent-up demands for additional tubing to expand petroleum production and refining and electric power generation. While, with higher volume, the Tubular Products division did increase its earnings over 1972 results, several factors adversely affected its performance in 1973. Prices for steel scrap, the division's basic raw material, doubled and costs increased for other materials and labor. Combined with government price controls on our products, this caused a serious profit squeeze during the year. In late December, the Cost of Living Council issued a special temporary rule permitting us to pass along a part of the cost increase of steel scrap pending a final decision on our request for relief of higher costs for both labor and other materials. Refractories division sales increased by about 30% in 1973, rising sharply for the second consecutive year, and continuing a long term trend. There was heavy demand for all refractory products, with particular emphasis on insulating firebrick and Kaowool ceramic fibers. Our Kaowooi fiber lining, used to insulate pipes and stacks and to line furnaces, is a product of considerable importance to industry in the conservation of energy. During the year we expanded our leader ship in the markets for ceramic fiber both here and overseas. To meet rising demand, the division has undertaken an expansion of production facilities and modernization of existing ceramic fiber plants in Augusta. Georgia and Ponce. Puerto Rico. In addition, joint-venture ceramic fiber plants in Japan, England and Belgium are undergoing expansion. The Refractories division also produces a variety of other products, such as insulating firebrick and castables, needed by the petroleum industry to build new refineries and by other heat processing industries. Our advanced composites operation, which started as a new venture in 1971, received its first contract for a large volume of graphite fiber golf club shafts. Other sales included parts for office 5 copying machines and x-ray equipment. Orders in 1973 were about $1 miliion and we are expecting good growth over the next few years for this promising technology. Industrial Automation. The past year saw rising volume of business in our industrial automation area, and the outiook for the coming year promises to continue that encouraging trend. Bailey Meter Company sales were up in the basic utility and marine instrumentation markets. The new Bailey 7000 line contributed additional business in the process industries. During 1973. the second Bailey direct digital control system (DDC) for a utility plant was placed in operation. These systems provide the most complete power plant automation yet achieved and are expected to be the foundation for future generations of controls for electric power plants. Bailey has orders for four of the six DDC systems the utility industry has purchased to date. As part of its excellent year in the marine control business. Bailey has supplied the complete combustion control system for the largest American-built commercial ship, the TT Brooklyn. It is the first of a line of U.S. produced supertankers. Diamond Power Specialty Corporation shipments increased 6% over 1972. The largest volumes were in boiler cleaning equipment and metallic reflective insulation. The subsidiary sold its closed-circuit television operation in order to concentrate more fully on its basic markets. Diamond will continue to act as sales agent for this product in the utility industry, the original market. Overseas, a joint venture with a Deutsche-Babcock & Wilcox A.G. subsidiary was formed in West Germany to supply Mirror reflective insulation to the European nuclear industry. In addition, a license agreement was completed with ACC-VickersBabcock Ltd. of Bombay, India for the Indian market. Demand continued strong for the unique line of valves supplied by our subsidiary, Control Components, lnc,, and we anticipate another significant increase in business in the coming year, The basic characteristics of this valve--vibration control and low maintenance--have created a soiid market in the oil, petro chemical and powergeneration industries. Noise reducing qualities inherent in the valve's design also make it particularly well suited to meet the requirements created by the Occupational Safety and Health Act. Internationally, Control Components formed a joint venture in Japan and established a sales organization in Europe. The continued resurgence of the machine tool industry enabled the Automated Machine division to reach a record level of ship ments in 1973. Currently the upsurge in orders reflects the automobile industry's concentration on the production of smaller cars. Another new venture--the Industrial Systems departmentestablished an important position in the newly-developing market for safety equipment used on metalworking machines. More than 80 working installations of this system give promise of a good future forthis product line. Management. Major changes in our management structure luring the past year were made on the operating group level. Walter M. Vannoy was appointed group vice president and head of the Power Generation Group, succeeding A. P. Taber, who retired. Dr. John Ewing was named vice president of the Naval Nuclear Fuel division succeeding Mr.Vannoy. Within the Power Generation Group the nuclear manufacturing, engineering and marketing functions were consolidated under Louis M. Favret. who was elected corporate vies president and appointed head of Nuclear divisions, a new position. At the same time. Wiiford B. Beisel was named general manager of the Nuclear Equipment division and Jonn H. MacMillan general manager of the Nuclear Power Generation division. Edwin M. Griffin, division vice president was selected to succeed Gerald A. Profita as head of the B&W Construction Company. Mr. Profita retired after 44 years of service to the company. Donald E. Heyburn. division vice president was appointed to head the Fossil Power Generation division, succeeding Mr. Griffin. Thomas Campbell was named general manager of (he industrial and Marine division succeeding A. W. Jackson who became vice president of International Sales for the Power Generation Group. George W. Kessler, a corporate vice president, retired after more than 42 years of service. Also in 1973. the Board of Directors elected Raymond J. Cantwell, our chief financial officer, as senior vice president and named me to the additional position of Chairman of the Board. M. Nielsen, who had served as Chairman since 1965, continued as a director of the company. Outlook. The energy problem is affecting the company both internally and externally. Internally, an energy conservation program was undertaken during the year in all plants and offices. We have not had any curtailment of production due to fuel shortages, nor do we expect to have any if the government adheres to its stated allocation policies. The major internal effect of the fuel crisis has been increased operating costs caused by higher fuel prices. This will also affect the cost of raw materials and components which we purchase from other companies. While some critical materials are becoming increasingly scarce, this has been caused by the general high level of demand and we are not yet aware of any shortages directly caused by lack of fuel. Externally, we have observed an increase in inquiries for coal burning boilers, primarily from utility companies, and a pick-up in demand for products related to oil exploration and refining such as tubular products, refractories and controls. On the other hand, uncertainty of fuel supply could cause some companies to curtail expansion plans. To date, we have seen no evidence of this in our business. We enter 1974 with a backlog of $3.3 billion, mostly in long leadtime orders. The company's specially-engineered products are essential for energy extraction as well as for energy conversion and conservation. As a result, we should be in a good position to build on these strengths. However, a decline in the economy could have some impact on new orders for steel tubing, refractories, small boilers and machine tools. As for our labor situation, all plants in the Power Generation Group are now operating with labor contracts that should provide continuity of operations until mid-1976. In the Tubular Products division, our labor agreement with the steelworkers union expires in August 1974. Failure to reach a settlement on schedule could have an adverse effect on performance. We cannot predict with any certainty the impact the energy crisis or material shortages may have on us. our suppliers and our customers. Nevertheless, there is a strong demand for our products and nuclear activities should return to a profitable level. Furthermore, late in January 1974 the Cost of Living Council approved the company's request for a price increase for its tubular products. This snould partially alleviate the cost-price squeeze suffered by the Tubular Products division. If the problems mentioned are not too severe, 1974 should oe a good year. February 28,1974 7 Financial Statements Consolidated Statement of income and Retained Earnings fot Mi# Yr 1973 1972 Sales (on percentage of completion method for long-term contracts). Costs and expenses: Costs and operating expenses..... Research and development expenses ........................................ Selling, general and administrative'expenses............................... Depreciation of plant and equipment........................................... Income from operations.......................................................................... Income from investments, including equity in net earnings of affiliated companies (Note 4)........................................................ Interest expense....................................................................................... Income before taxes and minority interests.......................................... U.S. and foreign taxes on income: Current................................................................... .......................... Deferred............................................................................................ Income applicable to minority interests....................................... Net income for the year (per share: 1973--$1.82: 1972--$1.97). Cash dividends declared (per share: 1973--$.60; 1972--$.55)... Remainoer, to retained earnings.................................................... Retained earnings at beginning of year....................................... $1,063,741,075 919.517,356 21.028,084 58.478.220 21,640.224 1.020,663,884 43.077,191 3,783.483 (10,203.577) 36.657.097 1,070,000 13.380.000 14.450.000 22,207,097 (124,367) 22,082.730 9.683.925 12,398,805 228.194.096 $ 240,592.901 $955,885,195 818,570,350 20,603.198 51.721.529 19.402.891 910.297.968 45,587.227 3.157,310 (6.446.756) 42.297.781 1.426.000 16,354.000 17.780.000 24.517,781 (82.221) 24.435,560 6.832,836 17,602.724 210.591.372 $228,194,096 SltiOn Fo/th# Calendar Y*ar WORKING CAPITAL AT BEGINNING OF YEAR............................................... FINANCIAL RESOURCES WERE PROVIDED BY: Net income.......................................................................................... Add or (deduct) items not affecting working capital: Depreciation............................................................................... Deferred income taxes, noncurrent........................................ Income applicable to minority interests.................................. Equity in net earnings of affiliated companies........................ Working capital provided by operations for the period................. Fair market value of common stock issued for purchase of minority interests in subsidiary.................................................... Additional noncurrent borrowings.................................................. FINANCIAL RESOURCES WERE USED FOR: Additions to property, plant and equipment.................................... Cash dividends declared................................................................... Reductions of noncurrent indebtedness.......................................... Purchase of additional interest in Babcock & Wilcox Ltd. (Note 4) Purchases of and other changes in minority interests.................... Purchase of treasury stock (Note 8)................................................ Other, net............................................................................................ NET (DECREASE) INCREASE IN WORKING CAPITAL (Note 9)..................... WORKING CAPITAL AT END OF YEAR........................................................... 1973 $151,249,738 22.082,730 21,640,224 1,170,000 124,367 (2.709.744) 42,307.577 14.553.505 56,861.082 36,835,981 9.683.925 6.548.504 10,456.459 (329,308) 12,171.701 (1.75*249) 73.615.013 (16.753.931) $134,495,807 1972 $144,452,402 24.435.560 19.402.891 1.110.000 82.221 (624,992) 44.405.680 6.383.521 14,585.687 65.374.888 41,896.636 6.832.836 3.S9U82 3.804.868 2.352.030 58.577.552 6.797.336 $151,249,736 8 ; | 9 la Consolidated Balance Sheet ASSETS CURRENT ASSETS Cash.................................................................................................. Marketable securities, at cost (approximate market)................... Accounts receivable (net of allowance tor doubtful accounts: 1973-S3.958.935; 1972-53.729.492)...................... Unbilled sales.................................................................................... Inventories, including long-term contract costs (less progress payments on contracts) (Note 1)..................... TOTAL CURRENT ASSETS................................................... At OecemB' 31 1973 1972 $ 30,013,787 598,000 177,022,445 123,336,909 221,586,687 552,557,828 $ 21.259.147 18.290,628 141,041.136 103,445.302 170,242,514 454,278.727 NONCURRENT RECEIVABLES .................................................................... INVESTMENTS, in affiliated companies at equity (Note 4)................... PROPERTY, PLANT AND EQUIPMENT. at cost less accumulated depreciation (Note 3)........................... PREPAID EXPENSES AND OTHER ASSETS................................................. TOTAL ASSETS .................................................................. 498,618 24,168,867 253,117,493 11,125,110 $841,467.916 276.00T11,719,852 . 238,278,543 12,025,975 $716,579,104 LIABILITIES AND STOCKHOLDERS' EQUrTY CURRENT LIABILITIES Notes payable (Note 6)................................................................... Accounts payable and accrued liabilities...................................... Provision for warranty expense....................................................... Cash dividends payable................................................................. U.S. and foreign income taxes (including deferred taxes: 1973--$79,405,000; 1972-S67,195.000).................................. TOTAL CURRENT LIABILITIES............................................. $ 72,939,235 217,964,523 42,421,229 2,420,981 82,316,053 418.062,021 $ 11,670,591 192,987.900 33,803,567 1.733,227 62,833,704 303,028,989 NONCURRENT INDEBTEDNESS (Note 6).................................................. DEFERRED INCOME TAXES........................................................................ MINORITY INTERESTS tN SUBSIDIARY COMPANIES.................................. TOTAL LIABILITIES............................................................ 86,385,448 18,630,000 1,254,299 524,331,768 78,380,447 17,460,000 800,624 399,670,060 STOCKHOLDERS' EQUITY Capital Stock: Preferred, cumulative, no par; authorized and unissued 2,000,000 shares Common, par value $4.50; authorized 18,000,000 shares, issued: (1973 and 1972-12.604,906 shares)........... Capital surplus.............................................................................. Retained earnings............................................................................ Less: Treasury stock, at cost--500,000 shares (Note 8)............... TOTAL STOCKHOLDERS' EQUrTY...................................... TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................................................. 56,722,077 31,992,871 240,592,901 329,307,849 12,171,701 317,136,148 $841,467,916 56.722.077 31.992,871 228,194.096 316,909.044 316,909,044 $716.579,104 mmary of Significant Accounting Policies ncipfes of consolidation: consolidated financial statements include The Babcock & ;ox Company and ail subsidiary companies. Significant >sidiaries are principally located in the United States, estments in which the company owns 20% or more but less n a majority of voting stock, are accounted for under the equity thod. The accounts of foreign subsidiaries have been tslated into U.S. dollars at year-end exchange rates, except for 'perty. plant and equipment which has been translated at oropriate historical rates. Translation gains or losses are luded in income currently and have not been significant in ount. ng-term contracts: ignificant part of the company's business is done under ntracts requiring long periods to perform, in many cases several irs. For financial accounting purposes, the company records es and cost of sales by the percentage of completion method ited principally to shipments or, in the case of nuclear contracts, ncurred direct labor. Sales so recorded are carried in unbilled es until invoiced to customers under terms of the contracts. The costs recorded on uncompleted individual long-term -(tracts within each fiscal period-are based upon estimates to mplete. Cost estimates are reviewed periodically as the work egresses and adjustments proportionate to the percentage of mpletion are reflected in the period when such estimates 1 revised. Under the foregoing accounting for long-term contracts, entories are stated at accumulated production costs less imated cost of sales. The amount at which such inventories 5 carried does not exceed realizable value. Progress . yments applicable to these inventories are deducted for lance sheet presentation. her inventories: 'entories are stated generally at the lower of cost or market, st is determined on the average basis for raw materials and jplies and accumulated production costs for work in process d finished products. arranty expense: 3 company provides, as sales are recorded, for estimated *ure expenditures which may be required to satisfy warranties. 'predation: r financial accounting purposes, depreciation is computed on 2 straight-line method, using estimated useful lives of 10 to 40 =ars for buildings and 5 to 20 years for machinery and equipment. icome taxes: ie company provides in its income tax provision for the timing Terence's between financial and tax reporting. These relate -incipally to the use for tax purposes of the completed contract 2thod for long-term contracts, accelerated depreciation and to arranty expenses which are not deductible for income tax jrposes until incurred. The job development investment credit is recognized fully as iductions of tax provisions in the year in which qualified assets -9 placed in service. 'esearch and development: ie cost of research and development which is not performed on -ecific contracts is charged against operations as incurred. ''ension plans: ie company has several pension plans, principally nonontributory, covering substantially all employes. Benefits under ie plans are being funded and charged to operations in amounts ctuarially determined to be necessary to provide benefits jrrently earned during the year, and to amortize prior service osts over a period not to exceed 40 years. Earnings per share: Earnings per share are computed on a weighted average of shares outstanding during the year which do not include shares held in treasury. Shares under options outstanding are not used in determining earnings per share since they have had no material dilutive effect. Notes to Consolidated Financial Statements Note 1--The consolidated inventories at December 31 are summarized below: 1973 1972 Raw materials and supplies...... Work in process......................... Finished products........................ Less: Progress payments............. S 78.891.000 161,504.000 13.497,000 253.892,000 32,305.000 $221,587,000 $ 65,509,000 144,593.000 13,612.000 223.714.000 53,471.000 $170,243,000 Note 2--The company has provided when determinable for actions required to alleviate delays and the effects of delays in carrying out some long-term nuclear contracts. Costs and expenses not provided for. including claims, may result from delays but management does not expect that amounts, if any. will be material Note 3--Consolidated property, plant and equipment at December 31 are summarized below: 1973 1972 Land....... ............................... Buildings................................. Machinery and equipment....... . Construction in progress.......... Less: Accumulated depreciation S 6.509.000 134.691.000 328.568.000 24,331.000 494.099.000 240.982.000 $253,117,000 S 6.034,000 126.995.000 306.739.000 20,771,000 460.539.000 222.260.000 $238,279,000 f Rental expense and lease commitments are not material. Note 4--During August and September 1973. the company acquired for $10,456,000 an additional 3.600.000 shares of its British affiliate. Babcock & Wilcox Ltd., whose shares are publicly traded, increasing its percentage ownership to 23.1%. The company's proportionate share of publicly reported earnings of Babcock & Wilcox Ltd. is included in consolidated earnings for 1973. Prior years' income has not been restated, as the cumulative adjustment in applying the equity method was not material. Note 5--As a result of the tax timing differences, referred to under accounting policies, the company for federal income tax reporting is entitled currently to report a net operating loss which, together with unused investment credits, is applicable against taxable income or tax payable over the next five and seven years, respectively. Deferred tax provisions for the years relate principally to the use of fhe completed contract method for lax purposes-- $11.404,000 (1972--$15,060,000) and other net timing differences of $1.976.000 (1972-SI ,294.000) for accelerated depreciation, warranty provisions and other accrued expensas_ The 1973 income tax provision is net of Si ,750.000 ($1,490.000 in 1972) job development investment credits on qualifying property additions. The effective rates of the total provision for income taxes, as shown in the consolidated statement of income, are less than the United States federal statutory rates by 8.6% in 1973 (6.0% 1972). This difference arises principally from rhe job deveioprnert investment credits--4.8% (3.5% in 1972) and foreign tax credits-- 3.8% (1.8% in 1972). 4 t t*i > -r .1 Note 6--Consolidated obligations at December 31 consisted of the following: Current: 1973 1972 Bank lines of credit, at prime rate......... Other, including current portion of long-term debt.................................. Noncurrent: $ 60.000.000 12.939.000 72.939.000 $ 11.671.000 11.671.000 9% Promissory Notes, payable In annual installments of $3,300,000 beginning October 1,1977............... 50.000.000 50.000.000 Revolving credit agreement up to $20.000,000--Eurodollar or other Euro-currencies through August 1980, average interest rate. 1973--10.4%; 1972--6.7% ............................. 20.000,000 9,500,000 r industrial Revenue Mortgage for Pollution Control Equipment--4Y2% with interest adjustments related to the prime rate--payable in equal installments through 1983.................. 10.857.000 11,424.000 3Va% and 3^% Notes, due 1974........ 3.400,000 Other.......... .......................................... 5.528,000 86.385,000 $159,324,000 4.056.000 78.380.000 $90,051,000 The average short-term bank borrowings, against the bank lines of credit, during the year were $23,408,000 at an aferage interest rate of 8,9%, computed on a weighted average of obligations outstanding during the period. The company has the option until December 31.1974 to borrow up to $120.000,000 on open bank lines of credit at the prime rate 1 in effect at the time of borrowing. Additionally, the company has stand-by bank credit lines of $30,000,000 available until December 31,1974 which are related to the issuance by the company of commercial paper. Certain of the agreements contain, among other things, requirements as to consolidated working capita! as defined, and dividend declarations. At December 31,1973 and 1972, all such requirements have been met. sV Note 7--Total pension expense charged to income was $22,761.000 in 1973 and $20,054,000 in 1972. Based upon the latest actuarial valuation, unfunded prior service costs at December 31,1973 were approximately $119.400,000 (1972-3^- S111.300.000). The actuariaily computed value of vested benefits for all plans as of December 31.1973, exceeded the total of the pension fund and balance sheet accruals by approximately -.65.500,000. Note 8--The stockholders on April 26,1972 approved a hew stock option plan for key employes of the company and its subsidiaries, who have not attained the age of 60 at the time of grant. A total of 500.000 shares of either authorized but unissued or previously issued.# reacquired shares of common stock may be used for optionllfranted under this plan. The plan covers both options qualified under Section 422 of the Internal Revenue Code and nonqualified options. Options are granted at an option price equal aUeast 100% of th^air market value on the date of the grant. Qualified and non-qdJBIfied options shall expire not more than five anq ten years, respectively, after the date of grant. Options are '^cisable one year after the date of grant in installments '-:-ermined by the Board of Directors, Shares not purchased on the installment date may be purchased any time prior to final sxoiration of the option. During February 1973. the company acquired 500.000 snares of ,ls common stock at a total cost of $12.172,000 for grants under the 1972 Stock Option Plan and other corporate purposes. 11 Transactions in 1973 under the stock option plans approved by the stockholders in 1972 and 1963 are summarized as follows: Options outstanding on January 1,1973 ....................... Options granted.......................... Options lapsed............................. Options outstanding on December 31,1973.................. SHARES 1972 Plan 1963 Plan 51,700 46.800 (2.200) 137.500 (137,5001 96.300 Options which became exercisable during 1973 ............................. 12.659 No further options may be granted under the 1963 plan. Note 9--The changes in the components of working capital are summarized as follows: 1973 1972 Increase (decrease) in current assets: Cash................................................. $ 8.755,000 $(3,569,000) Marketable securities....................... (17.693,000) 17,341,000 Accounts receivable......................... 35,981,000 2,863,000 Unbilled sales.................................. 19.892,000 2,438,000 Inventories........................................ 51.344,000 98.279.000 13,045,000 32.118.000 increase (decrease) in current liabilities: Notes payable.................................. 61.269.000 Accounts payable and accrued liabilities....................................... 24.976.000 Provision for warranty expense.......... 8,618.000 Cash dividends payable..................... 668,000 U.S. and foreign income taxes............ 19.482,000 115,033,000 Net (decrease) increase in working capital................................ $(16,754,000) 24,000 10.031,000 1,273,000 189.000 13,803.000 25.320.000 $ 6,798.000 Note 10--The company performs significant amounts of workfor the government under both prime contracts and subcontracts and thus is subject to continuing reviews by governmental aget&jes. 'rv-' Report of Independent Accountants To the Stockholders and Directors of The Babcock & Wilcox Company: In our opinion, the accompanying consolidated balance sheets and the related statements of consolidated income and retained earnings and of changes in financial position present fairly the financial position of The Babcock & Wilcox Company and its subsidiaries at December 31.1973 and 1972. the results of their operations and the changes in financial position for the years then ended, in conformity with generally accepted accounting principles consistently applied. Our examinations of these statements were made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. PRICE WATERHOUSE & CO. New York, N.Y., February?, 1974 7 Sales (shipments) Mciiionso< Dollars WOO --------------1300 --------------t?00 ---------------- 1100 ---------- 1000 -------- 900 ---------------BOO ---------------700 ---------------600 ---------------- $00 -------- 400 ------- -- 000 ---------- -- 203 -------- -- IOC'-------- -- 0----- -- Fortfiayaar -64 `65 66 V? `68 "69 70 1' 72 73 Net income Millions ol Dollars SO--------------45--------------40--------------as------------- Earnings per Share and Cash Dividends Declared per Share (aoiusiad (or stock*p(lt) Doiiarr ISO - formeyaar '64 ' t7 '68 $9 16 11 li T3 Income and Retained Earnings Ten-Year Comparison (in thousands ol dollars) For (he Calendar Year 197' Sales (on percentage ol completion method tor long-term contracts) Costs and expenses except depreciation........................................ Depreciation ............................................... Income from operations...................................................................... Income from investments.................................................................... Interest expense..................................................................................... Income before taxes and minority interests........................................ U.S. and foreign taxes on income...................................................... Income applicable to minority interests.............................................. Net income lor the year........................................................................ Equity in earnings of subsidiary prior to obtaining majority control ... Cash dividends declared................................................................... Remainder, to retained earnings....................................................... Retained earnings at beginning of year.............................................. Retained earnings at end of year........................................................ $1,063,741 999,02' 21,64( 1,020.66 43.07) 3,76; (1Q,2Q< 36.65) 14.45C 22.20) Q2' 22.08; ______ 22.089,68< 12.39$ 228.194 $ 240.593 Changes in Financial Position Ten-Year Comparison (in thousands ol dollars) For tha Calendar Yost 197' WORKING CAPITAL AT BEGINNING OF YEAR......................................... FINANCIAL RESOURCES WERE PROVIDED BY: Net income................................................................................... Add or (deduct) items not affecting working capital: Depreciation ........................................ Deferred income taxes, noncurrent.................................... Income applicable to minority interests.............................. Equity in net earnings of affiliated companies................... Working capital provided by operations for the period............. Fair market value of common stock issued for purchase of minority interests in subsidiary..................... Additional noncurrent borrowings............................................. FINANCIAL RESOURCES WERE USED FOR: Additions to property, plant and equipment................................ Cash dividends declared............................................................ Reductions of noncurrent indebtedness.................................... Purchase of interest in B&W Ltd.................................................. Purchases of and other changes in minority interests............... Purchase of treasury stock.......................................................... Change in noncurrent receivables.............................................. Other, net....................................................................................... NET (DECREASE) INCREASE IN WORKING CAPITAL................................ WORKING CAPITAL AT END OF YEAR...................................................... 151.25C :-- 22.083 21.640 1.170 124 (2.71Q 42.307 14.554 56.861 36,836 9.684 6.548 10.458 (329 12.172 223 H -677 73.615 ft6.754 S 13-4.495 Statistics Income from operations--% of sales........................................ Net income for year--% stockholders' equity first of year....... Orders received--thousands of dollars................. .................. Unfilled orders--thousands of dollars........................................ Common shares issued end of year.......................................... Per average number of shares outstanding; 1973-12.146.573; 1972-12.406.339; 1964-71-12.356.626 Income foryear............................................................... Cash dividends declared.................................................... Stockholders'equity......................................... 1973 4.1% 7.0% $1,334,344 S3.2S8.55T 12.604,906 $ 1.82 .60 26.11 t 12 ' ` 1972 $955,885 890.895 1 19,403 910.298 45,587 3,157 (6.446) 42.298 1 17.780 24,518 > (82) 24.436 r 24,436 6,833 17,603 210,591 $226,194 1971 $959,092 895.697 18,396 .914.093 ^34,999 ' 1,931 (8,344) 38.586 17.170 21,416 (752) * 20,664 1970 $826,424 782,779 16.417 799,196 27.228 1,459 (11.449) 17,238 6.390 10,848 (827) 10,021 20,664 6.168 14,496 196,095 $210,591 10,021 8.810 1,211 194,884 $196,095 1969 $718,566 690,111 13.439 703,550 15.016 505 (9.022) 6,499 190 6.309 (584) 5.725 5.725 16,752 (11.027) 205,911 $194.884 1968 $647,613 584,522 10.934 595,456 52,157 928 (3.391) 49,694 23.710 25,984 (742) 25,242 25.242 16.726 8.516 197,395 $205,911 1967 $624,723 545,935 16,436 562,371 62,352 305 (1.412) 61,245 27,260 33,985 (770) 33,215 33,215 16,681 16,534 180.861 $197,395 1966 $561,627 485.628 14.778 500.406 61.221 2.095 (838) 62.478 28.710 33,768 (766) 33,002 33,002 15,313 17,689 163.172 $180.861 1965 $481.600 412.487 13.519 426.006 55,594 1,461 (715) 56,340 26.060 30.280 (830) 29,450 29,450 13,458 15,992 147,180 $163,172 1964 $430,957 370,335 12.825 383.160 47,797 2.224 (750) 49,271 23.480 25,791 (595) 25,196 1,030 26.226 12.211 . 14,015 133,165 $147.180 1972 $144,452 1971 $128,355 1970 $141.205 %69 $214,728 1968 $180,735 1967 $156,721 24,436 19.403 1,110 82 (625) 44.406 20,664 18.396 3,510 752 43,322 10,021 16,417 3,900 827 31,165 5,725 13.439 5,015 584 24.763 25,242 10,934 3.925 742 40.843 33,215 16,436 770 50.421 6,383 14.586 65.375 41.897 6.833 3.691 1 . 3.805 , (1.133) 3.484 58.577 j 6.798 ; ->151.250 ? ' 1972 f 4,8% 8.3% \ Si,475.326 ^ S2.467.948 12.604.906 72,386 115.708 13.500 44.665 ' 24,283 '4- 6.168 ... 62,200 4,771 25,340 8.810 12.200 9.499 237 2tfif| r 99.61 r 16.097 $144,452 057) 1.586 57.515 (12.850) $128,355 22.000 46.763 59,000 99,843 50.523 16.752 53,200 37,388 16.726 14,200 204 320 (669) (1.612) 276 :1 . (1.172) 120.286 65,850 (73,523) 33.993 $141,205 $214,728 1971 4.7% 7.4% $ 867,938 $1,948,507 12.366.626 1970 3.3% 3.6% $1,118,298 $2,039,661 12,366,626 1969 2.1% 2.0% $ 812,758 $1,747,787 12.366.626 1968 8.1% * 911.082 $1,653.595 12.366,626 28.000 78.421 33.509 16,681 2,200 320 1,547 150 54.407 24.014 $160,735 1967 10.0% 12.6% $1,099,295 $1,390,127 12,366,626 1966 $163,400 33.002 14,778 766 48.546 1965 $137,710 29,450 13,519 830 43,799 48.546 34.807 15.313 2,200 278 1.695 932 55.225 (6.679) .x $156,721 43.799 19,610 13,458 (40) (13,535) (1.384) 18.109 25.690 $163,400 1966 10.9% 13.4% $840,064 $915,555 12,366,626 1965 11.5% 12.8% $651,195 $637,118 12.366,626 1964 $119,851 25,196 12,825 595 36,616 38.616 12,265 12,211 2.200 (2,529) (1.877) (1.513) 20.757 17.859 $137,710 1964 11.1% 11.7% $525,814 $467,523 12,366,626 S 1.97 .55 25.54 .i $ 1.67 .50 23-69 S .81 .72 22.51 S .46 1.36 22.42 $ 2.04 1.36 23.31 $ 2.69 1.36 22.62 $ 2.67 1.25 21.28 $ 2.38 1.10 19.85 $ 2.04 1.00 18.56 13 IsKai jW?*'*- 1972 1971 1970 1969 1968 1967 1966 1965 1964 l S 21,259 18,291 141.041 103,445 17Q.243 454,279 276 11.719 238,279 12.026 S716.579 r $ 24.829 949 138.178 101,007 157.198 422,161 1,409 11,246 216,472 7.702 $658,990 $ 26,521 496 131,452 95.779 162.001 416.249 1,191 9,851 211,291 6,421 $645,003 $ 13,549 1.912 113,878 84.578 170.152 364,069 1.348 340 202.648 4.567 $592,972 $ 16,199 1,266 98,985 67,071 160,300 343,821 2,017 340 165.638 4.217 $516,033 $ 12.839 5,297 85.525 47,841 138.625 290,127 3,629 341 139,415 5.157 $438,669 $ 15.830 16,580 75.671 35,136 119.396 262.613 2,082 447 122,392 4.851 $392,385 $ 14,641 79.117 40,301 16,683 98.936 249,676 387 961 102,476 3.292 $356,794 $ 10,591 24,549 69.197 26,777 85,430 216.544 13,922 1,278 96.365 4.379 $332,488. $ 11,671 192.988 33.803 1,733 62,834 303,029 . 78.380 17,460 801 399,670 $ 11,647 182.957 32,530 1,544 49.030 277,708 67,486 16.350 4.523 366.067 $ 81.930 153.409 23,029 1.540 27.986 287,894 57,300 12,840 8,542 366.576 $ 86.340 126,762 12,605 4,188 12,969 242,864 56,000 8.940 7.952 315,756 $ 6.761 90,237 7.992 4.184 19.919 129.093 87,200 3,925 7,572 227.790 $ 3,658 75,850 4,431 4,176 21.277 109.392 42,400 7.150 158.942 $ 5,776 72,101 4,955 3.824 19.236 105.892 16,600 6,700 129.192 $ 59,512 4,354 3,368 19.044 86,278 18,800 6,212 111.290 $ 52,492 4.375 3.056 18.911 78,834 18,800 5.342 102.976 88,715 228,194 316,909 316,909 S716.579 82,332 210.591 292,923 292.923 $658,990 82.332 196.095 278,427 278,427 $645,003 82,332 194,884 277.216 277.216 $592,972 82,332 205.911 288,243 288,243 $516,033 82,332 197,395 279.727 279.727 $438,669 82,332 180.861 263,193 263.193 $392,385 82.332 163,172 245,504 245.504 $356,794 82,332 147,180 229,512 229.512 $332,488 1972 $426,381 A1,897 ,7.739) 460,539 1971 $406,685 24,283 (4,587) 426.381 1970 $383,355 25,340 131 (2.141) 406,665 1969 $334,556 50,523 (1.724) 383.355 1968 $298,317 37,388 0.149) 334.556 1967 $266,404 33,509 444 (2.040) 298.317 1966 $232,858 34.807 (1.261) 266.404 1965 $214,948 19,610 119 (1.819) 232,858 1964 $198,827 12,265 5,177 (1.321) 214.948 209,909 19.403 (7.052) 222.260 3238.279 195,394 18,396 (3.881) 209.909 $216,472 180.707 16.417 119 (1.849) 195.394 $211,291 166.918 13,439 (1,650) 180.707 $202,648 158.902 10,934 (918) 168.918 $165.638 144,012 16.436 247 (1,793) 158,902 $139.415 130,382 14,778 (1,148) 144,012 $122,392 118,583 13,519 29 (1.749) 130.382 $102,476 103,354 12.825 3,613 (1.209) 118.583 $ 96.365 15 Directors and Officers Directors GEORGE G. ZIPF, Chairman and President, The Babcock & Wilcox Company M. NIELSEN, former Chairman, The Babcock Wilcox Company ' W. 0. BAKER, President, Bell Telephone Laboratories, Inc. ' JOHN L. BURNS, President, John L. Bums & Company, Private Investments R. J. CANTWELL. Senior Vice President. The Babcock Wilcox Company * DONALD N. FREY, Chairman and Chlei Executive Officer, Bell Howell Company * GEORGE C. KERN, JR.. Partner of the law firm ol Sullivan Cromwell * JAMES C. PARLEE, Vice Chairman. International Nickel Company ot Canada. Ltd. * WILLIAM L. WEARLY, Chairman and Chief Executive Officer. Ingersoll-Rand Company * S. H. WOOLLEY, Chairman and Chief Executive Olficer, The Bank ol New York ' Member of Audit Committee Corporate Officers Chairman and President GEORGE G. ZIPF Senior Vice President R.J. CANTWELL Group Vice Presidents H.O. KURT W. M. VANNOY Vice Presidents CARL CLAUS L. M. FAVRE7 W. H. JACKSON G. W. KROSS, JR. H. H. POOR A. C. TENDLER L B. WOHLGEMUTH Vice President and Secretary MARTIN VICTOR Controller H. D. KENNEY Treasurer W. P. CATTERSON Organization Operating Groups Power Generation Group W. M. VANNOY, Group Vice Presideni Babcock-Brown Boveri Reaktor Gmu>0. K. DAVIES. Director Babcock & Wilcox Canada no. J. M. DOUGLAS. President B&W Construction Company , M, GRIFFIN. Division Vice President Fossil Power Generation Division D. E. HEYBURN, Division Vice President Industrial and Marine Division T. M. CAMPBELL, General Manager Nuclear Divisions L. M. FAVRET, Vice President Nuclear Equipment Division W. B. BEISEL. General Manager Nuclear Power Generation Division J. H. MacMILLAN. General Manager Nuclear Materials and Equipment Corporation W. A. CAMERON. President Industrial Produets Group H. D. KURT, Group Vice President Automated Machine Division S. W, BARANYK, Division Vice President Bailey Meter Company C. E. JONES. President Control Components. Inc. R. E. SELF, President Diamond Power Specially Corporation J. L. MENSON, President Other Operating Divisions and Subsidiaries Naval Nuclear Fuel Division J. F. EWING, Division Vice President Refractories Division R. P. STUNTZ, Division Vice President Tubular Produets Division G. W. KROSS. JR^ Vice President " Service Divisions Finance Accounting Division R. J. CANTWELL. Senior Vice President Research and Development Oivision H. H. POOR. Vice President Staff Division CARL CLAUS. Vice President Washington Office J. TAYLOR, JR_ Generet Manager General Offices 161 E. 42nd Street New York. N.Y. 10017 Washington, D. C. Office 1725 K Street. N.W. Washington, D.C. 20006 Stock Transfer Agent Bankers Trust Company 16 Wall Street. New York. N.Y. 10015 Registrar The Bank of New York 48 Wall Street. New York. N.Y. 10015 General Counsel Sullivan Cromwell 48 Wail Street, New York. N.Y. 10005 Independent Accountants Price.Waterhouse & Co. 60 Broad Street, New York, N.Y. 10004 Stock Listed New York Stock Exchange and Pacific Stock Exchange Notice to Stockholder* The Annual Meaon; ot Stockholder* win be held at 10 A.M.. Wednesday. April H. IS?*, in the Biltmore Head. New York City. A format notice o( the meeting wr*i e proxy statement and form pi proxy ai be mailed to each stockholder March IS. Facilities Power Generation Group BABCOCK-BROWN BOVERI REAKTOR, GmbH-Mannheim. West Germany BABCOCK A WILCOX CANADA LTD.-Cambridge. Ont.. Canada B4W CONSTRUCTION COMPANY--Canton. Ohio; Copley. Ohio DOSSIL POWER GENERATION DIVISION-Barberton, Ohio; Brunswick. Ga.; Canton. Ohio; Paris. Texas; West Point. Miss- "PNt^feTRIAL ANO MARINE DIVISION-Barbcrton, Ohio; Canton. Ohio; Wilmington, N.C. TNlICLEAR EQUIPMENT DIVISION-Barberton. Ohio; Mount Vernon, Ind. `-NUCLEAR MATERIALS AND EQUIPMENT CORPORATION-Apollo, Pa.: Parks Township, Pa. NUCLEAR POWER GENERATION DIVISION-Lymchburg. Va. Industrial Products Group AUTOMATED MACHINE DIVISION W. F. & JOHN BARNES-Rocklord. III. BSW AUTOMATION--Troy. Mich. CENTURY-DETROIT--Rochester. Mich. DETROIT BROACH & MACHINE-Greer. S.C.; Ponce, Puerto Rico; Rochester, Mich. jfLEY METER COMPANY-Cleveland, Ohio; Wickliffe. Ohio: West Lynn, Mass.; Williamsport, Pa. _ JBELFAB-DaytQna Beach. FJa% t'-sBAILEY JAPAN COMPANY. LIMlYED-Yoky'o". Japan t -BAILEY METER AUSTRALIAPTY. LTD.-Regems Park. N.S.W.. Australia BAILEY METER COMPANY LIMITED-Pointe-Claire. Que., Canada FIBRAS CERAMICAS INC.-Ponce. Puerto Rico BAILEY METER GmbH-Mannheim. West Germany CONTROL COMPONENTS. INC.-Irvine, Catil. CONTROL COMPONENTS-JAPAN-Tokyo. Japan DIAMOND POWER SPECIALTY CORPORATION-Lancaster. Ohio MIRROR tNSULATION-Lancaster. Ohio ... DIAMOND CANAPOWER LTD.-Burltngton, Ont.. Canada |-i. DIAMOND POWER SPECIALTY LTD.-Dumbarton. Scotland ill| DIAMOND SUPERIOR A.B.-Stockholm. Sweden DIAMOND POWER GmbH--Oberhausen, West Germany I Other Operating Divisions and Subsidiaries ' NAVAL NUCLEAR FUEL DIVISION-Lynchburg. Va. : REFRACTORIES DtVISlON-Augusta, Ga.: Hephzibah, Ga. BABCOCK & WILCOX REFRACTORIES UMITED-Burlington, Ont.. Canada PRODUCTOS OE CAOLtN. INC.-Ponce. Puerto Rico TUBULAR PRODUCTS DIVISION-Alliance. Ohio: Ambridge, Pa.; Beaver Falls. Pa.; ' Elkhart. Ind.; Milwaukee. Wis. BA8COCK & WILCOX TUBULAR PRODUCTS LIMITED-Toronto. Ont.. Canada Service Divisions .'|FINANCE&ACCOUNTING DlVISION-NevvYork, N.Y. ^RESEARCH AND DEVELOPMENT DIVISION-Alliance. Ohio; Lynchburg. Va. STAFF DIVISiON-New York. N.Y. Washington. O.C. Operating Departments _ . `ADVANCEDCOMPOSITES DEPARTMENT-Alliance. Ohio INDUSTRIAL SYSTEMS DEPARTMENT-Mentor, Ohio I Products Energy Systems POWER GENERATION EQUIPMENT Complete nuclear and (ossil-fuet fired steam generating systemsNuclear fuel Industrial steam generating equipment Marine boilers Regenerative and tubular air heaters Gas cleanup systems Cleaning systems tor heat transfer surfaces Control and performance computers Automatic controls and instruments Nuclear reactor control-rod drives Water-level gauges Pulverizers Axial fans Precision welded bellows Hollow forgings tor steam piping and other uses Reflective metallic thermal insulation Heavy pressure vessels and heat exchangers Alloy castings - Tubular hoods for basic oxygen end electric furnaces Centrifugal pumps * Recovery processes for the pulp industry Stud tensioners Feeding devices for loading and unloading metal forming machines NUCLEAR ENERGY SERVICES Fuel management services Advanced fuels development Irradiation and hot cell services Nuclear operations management training Simuldtbrtrainmg . ........................... .. ENVIRONMENTAL CONTROL SYSTEMS Combustion control systems Filter systems Electrostatic precipitators Smoke and dust density recorders Wet scrubber systems Dry scrubber systems Limestone scrubber systems Magnesium oxide scrubber systems Waste disposal systems for marine, industrial and municipal use CONSTRUCTION SERVICES Nuclear and conventional steam system construction Mechanical construction Maintenance services Nuclear vessel base line in-service inspection Engineered Materials TUBULAR PRODUCTS Stainless, alloy or carbon steel seamless and welded tubes and pipe for all types of pressure and mechanical applications * Extrusions--tubular and solid shapes Welding fittings and flanges Seamless rolled rings REFRACTORIES PRODUCTS Kaolin clays Ceramic fibers Insulating firebrick Specialty firebrick -Plastics, mortars, castables, ramming mixes and calcines Special oxide refractories Silicon carbide - Vacuum formed fiber element supports and platmizcd substrates ADVANCED COMPOSITES Industrial Automation AUTOMATION EQUIPMENT AND CONTROL SYSTEMS Instruments and controls tor industrial. p_rocesse_s - Fluidic control systems and components ' ' Process control computers-Special valves . Sensing and guarding devices for machine operator protection . MACHINETOOLSAND RELATED EQUIPMENT Precision boring machines - Broaching machines and tools Hydrostatic ID and OD grinders * Production tracer laities Numerical control machines Special machines Transfer and multiple-station machines * Automatic assembly machines ; The Babcock &Wilcox Company Incorporated in 1881 from a partnership formed in 1867. I