March 17, 2014

URS OFFERS NEW INSIGHT INTO FINANCIAL SITUATION AT SPRU D&D PROJECT

By ExchangeMonitor

URS yesterday issued one of the most detailed reports to date of the company’s financial situation at the Separations Process Research Unit (SPRU) D&D project, where active D&D work has been largely stalled since a set of contaminated incidents occurred in the fall of 2010. According to URS’ latest earnings report, through March 31, 2012, the company has incurred total project costs at SPRU of $160.5 million and has recorded cumulative project losses of $14.7 million, including a charge of $0.7 million in the three months ended March 30, 2012. Under a contract modification reached in early 2011, the Department of Energy will cover all project costs up to $105 million, DOE and URS will split all costs incurred from $105-140 million; and URS will be fully responsible for covering all costs exceeding $145 million.

The final project cost has yet to be determined because of “continuing delays in permitting and approval of a final project plan,” URS said. The earnings report also notes, “Due to unanticipated requirements and permitting delays by federal and state agencies, as well as hurricane-caused delays and related ground stabilization activities, [URS] is required to perform work outside the scope of the Task Order Modification. Based on changes and delays to date, requests for equitable adjustment (“REA”) amounting to $47.1 million and a proposal related to the hurricane-caused impacts in the amount of $37.5 million have been submitted to the DOE for approval. Additional REAs of at least $12.6 million are expected to be submitted.” The report adds that URS “can give no assurance that it will not be obligated to pay some or all of the REAs, hurricane-caused impacts, and additional project completion costs, which would negatively impact our future results of operations.”

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