Consolidated Water Co Ltd

Previous wording

determined to have an indefinite useful life are not amortized but are tested for impairment annually or upon the identification of a triggering event. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed periodically for impairment. We evaluate the possible impairment of goodwill annually as part of our reporting process for the fourth quarter of each fiscal year. Management identifies our reporting units for goodwill impairment testing purposes, which consist of Cayman Water, the bulk segment (which is comprised of CW-Bahamas and OC-Cayman), PERC, REC, and the manufacturing segment (i.e., Aerex), and determines the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. We determine the fair value of each reporting unit and compare these fair values to the carrying amounts of the reporting units. To the extent the carrying amount of a reporting unit exceeds the fair value of the reporting unit, an impairment loss is recorded.

Current wording

Goodwill represents the excess cost of an acquired business over the fair value of the assets and liabilities of the acquired business as of the date of acquisition. Goodwill and intangible assets recorded as a result of a business combination and determined to have an indefinite useful life are not amortized but are tested for impairment annually or upon the identification of a triggering event. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed periodically for impairment. We evaluate the possible impairment of goodwill annually as part of our reporting process for the fourth quarter of each fiscal year. Management identifies our reporting units for goodwill impairment testing purposes, which consist of Cayman Water, the bulk segment (which is comprised of CW-Bahamas and OC-Cayman), PERC, REC, and the manufacturing segment (i.e., Aerex), and determines the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. We determine the fair value of each reporting unit and compare these fair values to the carrying amounts of the reporting units. To the extent the carrying amount of a reporting unit exceeds the fair value of the reporting unit, an impairment loss is recorded.

Previous wording

assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, we recognize an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measure the impairment loss based on the difference between the carrying amount and fair value.

Current wording

We review the carrying amounts of our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, we recognize an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measure the impairment loss based on the difference between the carrying amount and fair value.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and accompanying notes included under Part I, Item 1. “Financial Statements” of this Quarterly Report and our consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for our fiscal year ended December 31, 2023 (“2023 Form 10-K”) and the information set forth under Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2023 Form 10-K.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and accompanying notes included under Part I, Item 1. “Financial Statements” of this Quarterly Report and our consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for our fiscal year ended December 31, 2024 (“2024 Form 10-K”) and the

Previous wording

In 2010, we began the pursuit, through our Netherlands subsidiary, Consolidated Water Cooperatief, U.A. (“CW-Cooperatief”), and our Mexico subsidiary, N.S.C. Agua, S.A. de C.V. (“NSC”), of a project (the “Project”) that encompassed the construction, operation and minority ownership of a 100 million gallons per day seawater reverse osmosis desalination plant to be located in northern Baja California, Mexico and accompanying pipelines to deliver water to the Mexican potable water system.

Current wording

In 2010, we began the pursuit, through our Netherlands subsidiary, Consolidated Water Cooperatief, U.A. (“CW-Cooperatief”), and our Mexico subsidiary, N.S.C. Agua, S.A. de C.V. (“NSC”), of a project (the “Project”) that encompassed the construction, operation and minority ownership of a 100 million gallons per day seawater reverse osmosis desalination plant to be located in northern Baja California, Mexico and accompanying pipeline to deliver water to the Mexican potable water system.

Previous wording

In November 2015, the State of Baja California (the “State”) officially commenced the public tender for the Project. A consortium (the “Consortium”) comprised of NSC and two other parties submitted its tender for the Project in April 2016 and in June 2016, the State designated the Consortium as the winner of the tender process for the Project.

Current wording

In November 2015, the State of Baja California (the “State”) officially commenced the public tender for the Project, and in June 2016 a consortium comprised of NSC and two other parties was selected by the State as the winner of the tender process for the Project. NSC subsequently formed AdR to pursue the completion of the Project.

Previous wording

On June 29, 2020, AdR received a letter (the “Letter”) from the Director General of CEA and the Director General of CESPT terminating the APP Contract. The Letter requested that AdR provide an inventory of the assets that comprised the “Project Works” (as defined in the APP Contract) for the purpose of acknowledging and paying the non-recoverable expenses made by AdR in connection with the Project, with such reimbursement to be calculated in accordance with the terms of the APP Contract. On August 28, 2020, AdR submitted their list of non-recoverable expenses, including those of NSC, to CEA and CESPT which was comprised of 51,144,525 United States dollars and an additional 137,333,114 Mexican pesos.

Current wording

On June 29, 2020, AdR received a letter (the “Letter”) from CEA and CESPT terminating the APP Contract. The Letter requested that AdR provide an inventory of the assets that comprised the “Project Works” (as defined in the APP Contract) for the purpose of acknowledging and paying the non-recoverable expenses made by AdR in connection with the Project, with such reimbursement to be calculated in accordance with the terms of the APP Contract. On August 28, 2020, AdR submitted their list of non-recoverable expenses, including those of NSC, to CEA and CESPT which was comprised of 51,144,525 United States dollars and an additional 137,333,114 Mexican pesos.

Previous wording

We believed CW-Cooperatief, as a Netherlands company, had certain rights relating to its investments in NSC and AdR under theAgreement on Promotion, Encouragement and Reciprocal Protection of Investments between the Kingdom of the Netherlands and the United Mexican Statesentered into force as of October 1, 1999 (the “Treaty”). On April 16, 2021, CW-Cooperatief submitted a letter to the President of Mexico and other Mexican federal government officials alleging that the State’s termination of the APP Contract constituted a breach by Mexico of its international obligations under the Treaty, entitling CW-Cooperatief to full reparation, including monetary damages. This letter invited Mexico to seek a resolution of this investment dispute through consultation and negotiation but stated that if the dispute could not be resolved in this manner, CW-Cooperatief would refer the dispute to the International Centre for the Settlement of International Disputes for arbitration, as provided for in the Treaty. On June 29, 2021, the Mexican Ministry of Economy responded to CW-Cooperatief’s letter and proposed to hold a consultation meeting. Two such meetings were held on July 9, 2021 and August 2, 2021 on a confidential basis, without a resolution of our investment dispute.

Current wording

CW-Cooperatief, as a Netherlands company, had certain rights relating to its investments in NSC and AdR under theAgreement on Promotion, Encouragement and Reciprocal Protection of Investments between the Kingdom of the Netherlands and the United Mexican Statesentered into force as of October 1, 1999 (the “Treaty”). On April 16, 2021, CW-Cooperatief submitted a letter to the President of Mexico and other Mexican federal government officials alleging that the State’s termination of the APP Contract constituted a breach by Mexico of its international obligations under the Treaty, entitling CW-Cooperatief to full reparation, including monetary damages. This letter invited Mexico to seek a resolution of this investment dispute through consultation and negotiation but stated that if the dispute could not be resolved in this manner, CW-Cooperatief would refer the dispute to the International Centre for the Settlement of International Disputes for arbitration, as provided for in the Treaty.

Previous wording

On May 29, 2024, we, through CW-Cooperatief; NSC, and AdR entered into a settlement agreement (the “Settlement Agreement”) with the State and Banco Nacional de Obras y Servicios Públicos, S.N.C., as trustee under the trust agreement for the trust named Fondo Nacional de Infraestructura (the “Trust”). Under the Settlement Agreement, CW-Cooperatief requested that ICSID discontinue the arbitration and on May 31, 2024, ICSID issued an order discontinuing the arbitration. Pursuant to the Settlement Agreement, the Trust purchased the 20.1 hectares of land on which the Project’s plant was to be constructed, including related rights of way (the “Land”), on an “as-is” basis, from NSC for MXN$596,144,000. The sale of the Land to the Trust was closed on June 14, 2024 at which time the MXN$596,144,000 was paid to us and converted at the prevailing exchange rate on that date into US$31,959,685.

Current wording

for the trust named Fondo Nacional de Infraestructura (the “Trust”). Under the Settlement Agreement, CW-Cooperatief requested that ICSID discontinue the arbitration and on May 31, 2024, ICSID issued an order discontinuing the arbitration. Pursuant to the Settlement Agreement, the Trust purchased the 20.1 hectares of land on which the Project’s plant was to be constructed, including related rights of way (the “Land”), on an “as-is” basis, from NSC for MXN$596,144,000. The sale of the Land to the Trust was closed on June 14, 2024 at which time the MXN$596,144,000 was paid to us and converted at the prevailing exchange rate on that date into US$31,959,685.

Previous wording

We are presently in the process of legally terminating/dissolving CW-Cooperatief, NSC and AdR and will continue to incur expenses for these subsidiaries while such process is completed, but such expenses are not expected to be material to our consolidated results of operations.

Current wording

We are presently in the process of legally terminating/dissolving CW-Cooperatief, NSC and AdR and will continue to incur expenses for these subsidiaries while such process is completed.

Previous wording

Our net losses from discontinued operations for the three months ended September 30, 2024 and 2023 were ($502,854) and ($232,994), respectively.

Current wording

Our net losses from discontinued operations for the three months ended March 31, 2025 and 2024 were ($133,081) and ($467,066), respectively.

Previous wording

Including discontinued operations, net income attributable to Consolidated Water Co. Ltd. stockholders for 2024 was $4,454,464 ($0.28 per share on a fully diluted basis), as compared to net income of $8,605,129 ($0.54 per share on a fully diluted basis) for 2023.

Current wording

Including discontinued operations, net income attributable to Consolidated Water Co. Ltd. stockholders for 2025 was $4,791,029 ($0.30 per share on a fully diluted basis), as compared to net income of $6,474,348 ($0.40 per share on a fully diluted basis) for 2024.

Previous wording

Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders for 2024 was $4,957,318 ($0.31 per share on a fully diluted basis), as compared to net income from continuing operations of $8,838,123 ($0.55 per share on a fully diluted basis) for 2023.

Current wording

Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders for 2025 was $4,924,110 ($0.31 per share on a fully diluted basis), as compared to net income from continuing operations of $6,941,414 ($0.43 per share on a fully diluted basis) for 2024.

Previous wording

Revenue for 2024 decreased to $33,390,557 from $49,854,075 in 2023, as a result of a significant revenue decrease in the services segment and a slight revenue decrease in the manufacturing segment. Gross profit for 2024 was $11,634,658 (35% of total revenue) as compared to $16,614,428 (33% of total revenue) for 2023. For further discussion of revenue and gross profit see the “Results by Segment” discussion and analysis that follows.

Current wording

Revenue for 2025 decreased to $33,715,385 from $39,689,390 in 2024, as a result of a significant decrease in services segment revenue. Gross profit for 2025 was $12,306,287 (37% of total revenue) as compared to $13,878,023 (35% of total revenue) for 2024. For further discussion of revenue and gross profit see the “Results by Segment” discussion and analysis that follows.

Previous wording

General and administrative (“G&A”) expenses on a consolidated basis increased to $6,955,969 for 2024 as compared to $5,872,490 for 2023. The increase in G&A expenses for 2024 arises principally from additional G&A expenses of approximately $430,000 attributable to REC, which was acquired in the fourth quarter of 2023 and an increase in audit, audit related and other professional fees of approximately $374,000.

Current wording

General and administrative (“G&A”) expenses on a consolidated basis increased to $7,723,959 for 2025 as compared to $6,564,029 for 2024. The increase in G&A expenses for 2025 arises principally from (i) incremental legal costs and other professional fees totaling $491,174 (which includes $139,000 in costs related to a legal settlement); (ii) added employee costs of $356,909 attributable to new hires, salary increases and a retirement payment of $158,000 made to a former executive; and (iii) a net increase of approximately $135,000 in the provision for credit losses.

Previous wording

Other income, net, increased to $724,040 for 2024 as compared to $236,066 for 2023 primarily due to approximately $430,000 of additional interest income resulting from additional interest earned on higher balances of interest earning

Current wording

Other income, net, increased to $688,891 for 2025 as compared to $418,184 for 2024 primarily due to approximately $282,000 of additional interest income resulting from additional interest earned on higher balances of interest earning assets.

Previous wording

Revenue generated by our retail water operations increased to $7,585,992 in 2024 from $7,216,574 in 2023 due to a 4.2% increase in the volume of water sold. We believe the increase in the volume of water sold in 2024 resulted from a 4.8% increase in the number of customer accounts in our license area from September 30, 2023 to September 30, 2024.

Current wording

Revenue generated by our retail water operations increased to $9,411,342 in 2025 from $8,624,938 in 2024 due to a 13% increase in the volume of water sold.

Previous wording

Retail segment gross profit increased to $13,564,393 (56% of retail revenue) for 2024 from $12,205,181 (54% of retail revenue) for 2023 due to the revenue increase. Retail segment gross profit as a percentage of revenue increased in 2024 as compared to 2023 due to the overall increase in water volume sold.

Current wording

As a result of the revenue increase retail segment gross profit increased in both total dollars and as a percentage of revenue to $5,705,279 (61% of retail revenue) for 2025 from $5,073,594 (59% of retail revenue) for 2024.

Previous wording

Bulk segment revenue was $8,767,168 and $8,488,615 for 2024 and 2023, respectively. The slight increase in bulk revenue from 2023 to 2024 reflects the impact of OC-Cayman’s new Red Gate II contract and an amendment of its North Sound contract, both of which became effective May 1, 2024.

Current wording

Bulk segment revenue was $8,411,716 and $8,342,094 for 2025 and 2024, respectively. The slight increase in bulk revenue from 2024 to 2025 reflects the impact of OC-Cayman’s new Red Gate II contract and an amendment of its North Sound contract, both of which became effective May 1, 2024. The increase in revenue from both of these contracts offsets a decrease in revenue for CW-Bahamas resulting from lower energy prices, which decreased the pass-through energy component of CW-Bahamas rates.

Previous wording

Bulk segment G&A expenses remained relatively consistent at $381,230 for 2024 as compared to $347,668 for 2023.

Current wording

Bulk segment G&A expenses remained relatively consistent at $346,081 for 2025 as compared to $344,141 for 2024.

Previous wording

The retail segment incurred a loss from operations of ($178,846) for 2024 compared to a loss from operations of ($381,142) for 2023.

Current wording

The services segment incurred a loss from operations of ($180,488) for 2025, as compared to generating income from operations of $3,150,818 for 2025.

Previous wording

Gross profit for the services segment decreased to $11,481,116 (27% of services revenue) in 2024 from $19,776,464 (30% of services revenue) in 2023 due to the decreased revenue.

Current wording

Gross profit for the services segment decreased to $2,016,391 (20% of services revenue) in 2025 from $4,748,672 (27% of services revenue) in 2024 due to the substantial decline in construction revenue.

Previous wording

The manufacturing segment contributed $843,804 and $426,786 to our income from operations in 2024 and 2023, respectively.

Current wording

The manufacturing segment contributed $1,092,912 and $761,219 to our income from operations in 2025 and 2024, respectively.

Previous wording

Manufacturing gross profit was $1,589,222 (36% of manufacturing revenue) for 2024 as compared to a gross profit of $863,948 (18% of manufacturing revenue) for 2023. The increase in manufacturing gross profit in dollars and as a percentage of revenue results from a higher margin product mix.

Current wording

Manufacturing gross profit was $1,756,990 (30% of manufacturing revenue) for 2025 as compared to a gross profit of $1,278,921 (24% of manufacturing revenue) for 2024. The increase in manufacturing gross profit in dollars and as a percentage of revenue results from increased production activity and a higher margin product mix.

Previous wording

Accounts receivable decreased by approximately $1.0 million primarily due to a $1.7 million decrease in CW-Bahamas’ accounts receivable and a decrease in retail segment accounts receivable of $706,000. These decreases were slightly offset by an increase in Aerex’s accounts receivables.

Current wording

Accounts receivable decreased by approximately $3.4 million primarily due to a $2.9 million decrease in CW-Bahamas’ accounts receivable as well as decreases in the services and manufacturing segments accounts receivable of $618,603 and $434,779, respectively. These decreases were offset by an increase in the retail segment accounts receivable of $495,835.

Previous wording

Current inventory decreased by approximately $2.1 million primarily due to a decrease in Aerex’s inventory resulting from production activity.

Current wording

Current inventory decreased by approximately $1.8 million primarily due to a decrease of $2.6 million in Aerex’s inventory resulting from production activity, which was partially offset by an increase in PERC’s current inventory of $658,848.

Previous wording

Prepaid expenses and other current assets increased by approximately $1.6 million primarily due to an increase in prepaid insurance.

Current wording

Prepaid expenses and other current assets decreased by approximately $980,000 primarily due to a decrease in prepaid insurance.

Previous wording

Property, plant and equipment, net, decreased by approximately $2.7 million primarily due to the scheduled depreciation of fixed assets.

Current wording

Property, plant and equipment, net, increased by approximately $1.1 million primarily due to the expansion of the new West Bay plant in Cayman Islands.

Previous wording

Certain transfers from our Bahamas bank accounts to our bank accounts in other countries require the approval of the Central Bank of The Bahamas.

Current wording

Certain transfers from our bank accounts in The Bahamas to our bank accounts in other countries require the approval of the Central Bank of The Bahamas.

Previous wording

The Cayman Islands does not have a tax treaty with the United States. Consequently, should we be required (or elect) to transfer any profits generated by our U.S. operations to our parent company in the Cayman Islands, the amount of any such funds transferred would be subject to a 30% withholding tax.

Current wording

The Cayman Islands does not have a tax treaty with the United States. Consequently, should we be required (or elect) to transfer any profits generated by our U.S. subsidiaries from U.S. operations to our company in the Cayman Islands, we would be required to pay a withholding tax of 30% on the amount of any such funds transferred.

Previous wording

Our projected liquidity requirements for the balance of 2024 include capital expenditures for our existing operations of approximately $3.8 million, which includes approximately $872,000 to be incurred for our new West Bay plant. In addition, we plan to spend approximately $3.1 million during the balance of 2024 for a project in the Bahamas. We paid approximately $1.8 million for dividends in October 2024. Our liquidity requirements may also include future quarterly dividends, if such dividends are declared by our Board.

Current wording

Our projected liquidity requirements for 2025 include capital expenditures for our existing operations of approximately $9.1 million, which includes approximately $800,000 to be incurred during 2025 for a project in The Bahamas and $1.2 million for the expansion of Aerex's manufacturing facility. We paid approximately $1.8 million for dividends in April 2025. Our liquidity requirements may also include future quarterly dividends, if such dividends are declared by our Board.

Previous wording

As of September 30, 2024, we had cash and cash equivalents of $104.9 million and working capital of $133.9 million.

Current wording

As of March 31, 2025, we had cash and cash equivalents of $107.9 million and working capital of $136.2 million.

Previous wording

CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $25.1 million and $26.9 million as of September 30, 2024 and December 31, 2023, respectively. Approximately 77% and 80% of the accounts receivable balances were delinquent as of those dates, respectively. The delay in collecting these accounts receivable has adversely impacted the liquidity of this subsidiary.

Current wording

the accounts receivable balances were delinquent as of those dates, respectively. The delay in collecting these accounts receivable has adversely impacted the liquidity of this subsidiary.

Previous wording

From time to time (including presently), CW-Bahamas has experienced delays in collecting its accounts receivable from the WSC. When these delays occur, we hold discussions and meetings with representatives of the WSC and The Bahamas government, and as a result, payment schedules are developed for WSC’s delinquent accounts receivable. All previous delinquent accounts receivable from the WSC, including accrued interest thereon, were eventually paid in full. Based upon this payment history, we have not provided for a material allowance for credit losses for CW-Bahamas’ accounts receivable from the WSC as of September 30, 2024.

Current wording

From time to time (including presently), CW-Bahamas has experienced delays in collecting its accounts receivable from the WSC. When these delays occur, we hold discussions and meetings with representatives of the WSC and The Bahamas government. All previous delinquent accounts receivable from the WSC, including accrued interest thereon, were eventually paid in full. Based upon this payment history, we have not provided for a material allowance for credit losses for CW-Bahamas’ accounts receivable from the WSC as of March 31, 2025.

Previous wording

Discussion of Cash Flows for the Nine Months Ended September 30, 2024

Current wording

Discussion of Cash Flows for the Three Months Ended March 31, 2025

Previous wording

Our cash and cash equivalents increased to $104,869,627 as of September 30, 2024 from $42,621,898 as of December 31, 2023.

Current wording

Our cash and cash equivalents increased to $107,852,232 as of March 31, 2025 from $99,350,121 as of December 31, 2024.

Previous wording

Net cash provided by our operating activities was $37,257,555. This net cash reflects the net income generated for the nine months ended September 30, 2024 of $27,227,793 as adjusted for (i) various items included in the determination of net income that do not affect cash flows during the year; and (ii) changes in the other components of working capital. The more significant of such items and changes in working capital components included the gain from the sale of land and project documentation from discontinued operations of $12,134,766, depreciation and amortization of $5,020,410, a decrease in accounts receivable of $637,162, a decrease in contract assets of $19,594,696, and a decrease in accounts payable, accrued expenses and other current liabilities of $3,908,157.

Current wording

Net cash provided by our operating activities was $11,760,251. This net cash reflects the net income generated for the three months ended March 31, 2025 of $4,956,456 as adjusted for (i) various items included in the determination of net income that do not affect cash flows during the year; and (ii) changes in the other components of working capital. The more significant of such items and changes in working capital components included depreciation and amortization of $1,692,546, a decrease in accounts receivable of $3,075,968, an increase in contract assets of $5,047,425 and an increase in contract liabilities of $3,275,143.

Previous wording

Net cash provided by our investing activities was $29,960,751 primarily due to the sale of land and project documentation from discontinued operations in Mexico. The balance of our investing activities consisted of additions to property, plant and equipment and construction in progress.

Current wording

Net cash used in our investing activities was $1,568,281 primarily for additions to property, plant and equipment and construction in progress.

Previous wording

Net cash used by our financing activities was $4,892,012, almost all of which related to the payment of dividends.

Current wording

Net cash used by our financing activities was $1,788,611, almost all of which related to the payment of dividends.

Previous wording

We sell water through our retail operations under a license issued in July 1990 by the Cayman Islands government (the “1990 license”) that granted Cayman Water the exclusive right to provide potable water to customers within its licensed service area. Although the 1990 license has not been expressly extended after January 2018, we continue to supply water under the terms of the 1990 license, as discussed in the following paragraphs. Pursuant to the 1990 license, Cayman Water has the exclusive right to produce potable water and distribute it by pipeline to its licensed service area, which consists of two of the three most populated areas of Grand Cayman Island: Seven Mile Beach and West Bay. For the three months ended September 30, 2024 and 2023, we generated approximately 23% and 14%, respectively, of our consolidated revenue and 34% and 23%, respectively, of our consolidated gross profit from the retail water operations conducted under the 1990 license. For the nine months ended September 30, 2024 and 2023, we generated approximately 23% and 18%, respectively, of our consolidated revenue and 36% and 29%, respectively, of our consolidated gross profit from the retail water operations conducted under the 1990 license.

Current wording

We sell water through our retail operations under a license issued in July 1990 by the Cayman Islands government (the “1990 license”) that granted Cayman Water the exclusive right to provide potable water to customers within its licensed service area. Pursuant to the 1990 license, Cayman Water has the exclusive right to produce potable water and distribute it by pipeline to its licensed service area, which consists of two of the three most populated areas of Grand Cayman Island:

Previous wording

The 1990 license was originally scheduled to expire in July 2010 but was extended several times by the Cayman Islands government to provide the parties with additional time to negotiate the terms of a new license agreement. The most recent express extension of the license expired on January 31, 2018. We continue to operate under the terms of the 1990 license, providing water services to the level and quality specified in the 1990 license and in accordance with our understanding of its legal obligations, treating those obligations set forth in the 1990 license as operative notwithstanding the expiration of the express extension. We continue to pay a royalty of 7.5% of the revenue we collect as required under the 1990 license.

Current wording

The 1990 license was originally scheduled to expire in July 2010 but was extended several times by the Cayman Islands government to provide the parties with additional time to negotiate the terms of a new license agreement. The most recent express extension of the license expired on January 31, 2018. From that date until February 18, 2025, we continued to operate under the terms of the 1990 license, providing water services to the level and quality specified in the 1990 license and in accordance with our understanding of its legal obligations, treating those obligations set forth in the 1990 license as operative notwithstanding the expiration of the express extension. We continued to pay a royalty of 7.5% of the revenue we collect as required under the 1990 license.