American States Water Company (NYSE:AWR) announced today that its
American States Utility Services, Inc. (“ASUS”) subsidiary has received
approval from the U.S. government of various price redeterminations and
contract modifications for additional construction projects at the
military bases it serves. ASUS currently provides water and/or
wastewater services, including construction management, to nine military
installations throughout the country under 50-year contracts. The
contract price for each of these contracts is subject to redetermination
every three years.
In September 2015, ASUS received successful resolution to its price
redeterminations related to the contracts at Fort Jackson in South
Carolina and the military bases it serves in Virginia, as well as an
asset transfer at two of the Virginia bases. The approval of these
filings will provide ASUS with additional revenues and the opportunity
to continue generating positive earnings. These modifications issued by
the U.S. government also provided for retroactive increases in
management fees through June 30, 2015 totaling approximately $3.4
million on a pretax basis, of which $2.9 million is for periods prior to
2015. These retroactive amounts will be reflected in our 2015 third
quarter results. The receipt of the modifications for the
redeterminations and the asset transfer at this level had been
anticipated in prior communications with the financial community when
discussing 2015 expectations for ASUS.
Furthermore, in addition to the renewal and replacement capital work
which is included in the 50-year contracts, ASUS continues to receive
contract modifications from the U.S. government for new construction
projects at the military bases it serves. During the third quarter of
2015, the U.S. government awarded ASUS approximately $50 million for new
construction projects, the majority of which are expected to be
completed during the next twelve months. Earnings and cash flows from
contract modifications to the original 50-year contracts with the U.S.
government for additional construction projects may or may not continue
in future periods.
"We are pleased with the U.S. government’s approval of our price
redeterminations, the asset transfer, and additional construction work
at the military bases we serve. We are proud to provide water and
wastewater services to the men and women of our nation’s military and
look forward to serving them for many more years to come," said Robert
J. Sprowls, President and CEO of American States Water Company.
Forward-Looking Statements
Certain matters discussed in this news release with regard to the
Company’s expectations may be forward-looking statements that involve
risks and uncertainties. The assumptions and risk factors that could
cause actual results to differ materially include those described in the
Company’s most recent Form 10-Q and Form 10-K filed with the Securities
and Exchange Commission.
About American States Water Company
American States Water Company is the parent of Golden State Water
Company and American States Utility Services, Inc. Through its utility
subsidiary, Golden State Water Company, AWR provides water service to
approximately 258,000 customers located within 75 communities throughout
10 counties in Northern, Coastal and Southern California. The Company
also distributes electricity to approximately 24,000 customers in the
City of Big Bear and surrounding areas in San Bernardino County,
California. Through its contracted services subsidiary, American States
Utility Services, Inc., the Company provides operations, maintenance and
construction management services for water and wastewater systems
located on military bases throughout the country through 50-year
privatization contracts with the U.S. government.
AWR has a long history of returning value to shareholders and since 1931
has paid dividends to shareholders every year, increasing the dividends
received by shareholders each calendar year since 1954.
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