Global Water Resources, Inc.

Greetings, ladies and gentlemen. Thank you for standing by. Welcome to the Global Water Resources, Inc., 2020 second quarter conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would like to remind everyone that this call is being recorded on August 6, 2020, at 1 p.m. Eastern Time. I would now like to turn the conference over to Heather Krupa, Vice President and Controller. Please go ahead.

Heather Krupa Welcome, everyone, and thank you for joining us on today's call. Yesterday, we issued our 2020 Second Quarter Financial Results by Press Release, a copy of which is available on our website, at www.gwresources.com. Speaking today is Ron Fleming, President and Chief Executive Officer, and Mike Liebman, Chief Financial Officer. Mr. Fleming will summarize the key operational events of the quarter, following which Mr. Liebman will review the financial results for the quarter. Mr. Fleming and Mr. Liebman will be available for questions at the end of the call. Before we begin, I would like to remind you that certain information presented today may include forward-looking statements. Such statements reflect the company's current expectations, estimates, projections, and assumptions regarding future events. These forward-looking statements involve a number of assumptions, risks, uncertainties, estimates, and other factors that could cause actual results to differ materially from those contained in the forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements which reflect management's views as of the dates hereof and are not guarantees of future performance. For additional information regarding factors that may affect future results, please read the sections Risk Factors and Management Discussion and Analysis of Financial Condition and Results of Operations, included within our latest Form 10-K filed with the SEC. Such filings are available at www.sec.gov. Certain non-GAAP measures may be included within today's call. For a reconciliation of these measures to the comparable GAAP financial measures, please see the tables included in yesterday's earnings release, which is available on our website. Unless otherwise stated, all amounts discussed are in U.S. dollars. I will now turn the call over to Mr. Ron Fleming.

Thank you, Heather. Good morning, everyone, and thank you for joining us today. We are very pleased to report the results for the second quarter of 2020. First and foremost, I always begin by discussing our top priority, which is the health and safety of our employees and our customers. Considering the COVID-19 pandemic we are currently navigating, it is appropriate to start here again. As an essential utility whose services are vital during a health pandemic, Our company moved quickly and early to implement all national, local, and industry-specific guidance to maximize social distancing and other measures to protect the health and safety of our employees and customers and safeguard our operations. These measures continue to be modified as guidance in the situation on the ground changes, but generally all measures remain in place and have gone well, and we have not incurred any significant disruptions throughout 2020 resulting from the pandemic either operationally or financially. However, at this point, we cannot predict the impact it could have on operations and financial results going forward. We expect some customers to eventually have difficulty paying their utility bills due to COVID-19-related unemployment, but we're ready to work with them to set up payment plans and offer other options. For example, we previously rolled out an expanded customer assistance program. In the meantime, we voluntarily have suspended disconnections for nonpayment and eliminated late fees. Moving back to our typical operational highlights, I am very pleased to announce that in accordance with our top priority, we continue to perform at an extremely high level on employee safety and regulatory compliance non-recordable incidents. As of today, our staff has only experienced two minor OSHA recordable incidents in 1,068 days. As evidence of our success, in the quarter, we were able to reduce our annual workers' comp expense despite having a higher headcount and payroll. Also, it has been 1,591 days since our last significant compliance violation. We also continue to realize benefits from bringing customer service and billing in-house last December. including better control of our long-term service costs and benefits derived from a deeper focus on the customer experience and enhanced scalability of operations as we continue to grow. This has been magnified by our proactive measures to work with customers during this challenging time. On the organic growth front, total active connections increased 4.2% to 46,573 at June 30, 2020. over the 12 months prior. Q2 annualized active connection growth rates slowed to 3.3%. While new home connections slowed a bit, development and housing activity remains very strong in our areas. Actually, I can say it hasn't felt like this since the 2006 timeframe. In fact, in July, the City of Maricopa issued 117 single-family home permits and this is the second best month since 2015. Typically, we cite specific sources for housing projection permit growth. We cannot do that right now as those projections have been suspended due to COVID-19. However, I want to read part of a quote released just this week by one of the most prominent real estate experts in Metro Phoenix. Housing demand is at its highest level since 2006 in Arizona. while supply is at low as not seen since 2005. The places with the most visible rise in demand are those on the outskirts of the Metro Phoenix area, areas where demand largely dried up following the housing bubble and the Great Recession, areas within Pinal County. At this moment, the fastest-selling Arizona communities are here in the Stanton Valley, in Casa Grande, and in Maricopa, meaning the city of Maricopa. Pinal County is about to see more growth than it has ever experienced. As Phoenix area builders seek affordable land and homebuyers seek more affordable housing, we are going to see the Pinal County building boom return rapidly over the next 30 months. So for those of you who have been following our company for a while, you know that this is what we have been preparing for and speaking about as a company, really since the beginning. This was the strategy to buy or build utilities in the path of growth along these growth corridors. This is again happening, and in short, we are well positioned to benefit from rapid growth throughout our large service areas in Pinalt County. Beyond organic growth, the addition of Chris Krygier as Chief Strategy Officer also allows for daily focus on growth through acquisitions and new business opportunities. We are very excited about this addition as Chris brings a wealth of experience and skills to the executive team of Global Water. While there is nothing we can announce today, we are now making constant progress on this front. Finally, in addition to strong organic growth and acquisitions, we have disclosed that we will be filing a new rate case with regulators later this month and will be requesting a modest rate increase to our customer rates. We don't expect a decision on rates before September of next year, and we have requested that they not be effective until January 1st, 2022 as to further assure that any rate increases beyond the current pandemic. I will now turn the call over to Mike for Financial Highlights.