Global Water Resources, Inc.

Greetings, ladies and gentlemen. Thank you for standing by. Welcome to the Global Water Resources, Inc. 2020 Third 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 FAR 0 for operator assistance at any time. I would like to remind everyone that this call is being recorded on November 6, 2020, at 1 p.m. Eastern Time. I would now like to turn the conference over to Heather Krupa, Vice President and Comptroller. Please go ahead.

Welcome, everyone, and thank you for joining us on today's call. Yesterday, we issued our 2020 Third Quarter Financial Results by Press Release, a copy of which is available on our website at www.patreon.com. Speaking today is Ron Fleming, President and Chief Executive Officer, Mike Liebman, Chief Financial Officer, and Chris Krieger, Chief Strategy Officer. Mr. Fleming will summarize the key operational events of the quarter. Mr. Fleming will review the financial results for the quarter, and Mr. Krieger will review strategic initiatives and business development for the quarter. Mr. Fleming, Mr. Liebman, and Mr. Kreger 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 reflects management's views as of the date 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 and Form 10-Q filed with the SEC. Such filings are available at www.sec.gov. Certain non-GAAP measures may be included within today's call. For 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 third 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 and 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. In the event that customers have difficulty paying their utility bills due to COVID-19, 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. We can report today that this assistance is being utilized and in 2020 alone, Through our program partners, we have distributed over $100,000 to customers in need of help to pay their utility bill. In the meantime, we voluntarily have suspended disconnections for nonpayment and eliminated late fees. Moving back to our typical operational highlights, I'm 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. on non-recordable incidents. As of today, our staff has only experienced two minor OSHA recordable incidents in 1,162 days. In fact, we have almost no related costs incurred in over four years, resulting in an experience modifier, or EMOD, of 0.65. As a reminder, an EMOD of one is considered to be industry average. So, said another way, we are performing 35% better than the industry average which results in lower actual costs and workman's comp insurance costs. Also, it has been 1,685 days since our last significant compliance violation. In fact, just this week, we received unsolicited recognition from the Arizona Department of Environmental Quality as part of their voluntary environmental stewardship program, Bronze Level. Bronze Level recognizes companies that demonstrate strong environmental compliance for the past three years and demonstrate environmental excellence and leadership in providing customers with safe drinking water. This recognition is a nice addition to the Utility of the Future Today National Award that we received and announced earlier in the quarter for the company's transformational work in community engagement, watershed stewardship, and resources recovery. On a related note, in the quarter we delivered a record volume of recycled water, 273 million gallons, which is an increase of 20.4% year over year. Full reuse of recycled water is a primary element of our total water management approach for growing communities that allows us to achieve meaningful conservation. We also continue to realize benefits from bringing customer service and billing in-house last December. including better control of long-term service costs and benefits derived from a deeper focus on customer experience and enhanced scalability of operations as we continue to grow. This has been magnified by our proactive measures to move employees to work from home because of the pandemic and our work with customers during this challenging time. I now want to highlight customer growth. On the organic growth front, total active service connections increased 5% to 47,594 at September 30, 2020. Development and housing activity remains very strong in our areas. In fact, through the end of Q3, the City of Maricopa issued 937 single-family home permits, up 23% over the prior year, and on pace to have the best year since before the Great Recession. 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 recent quote by one of the most prominent real estate experts in Metro Phoenix, Jim Bielfore. Housing demand is at its highest level since 2006 in Arizona, while supply is at its lowest 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 Santan Valley, in Casa Grande, and in Maricopa, meaning the city of Maricopa. He also continued, 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 that have been following our company for a while and know this is what we have been preparing for and speaking about as a company, it really, really since the beginning. This was the strategy to buy or build utilities in the path of growth along growth corridors. This is again happening, and in short, we are well positioned to benefit from rapid growth throughout our large service areas in Pinal County and elsewhere. Beyond organic growth, the addition of Chris Krieger earlier this year as Chief Strategy Officer has allowed for daily focus on growth through acquisitions and new business opportunities. As announced last week, we just completed our first acquisition since 2018 and are now making constant progress on business development. Chris will provide more information later in the call. Finally, in addition to strong organic growth and acquisitions, we have discussed that we filed a new rate case with regulators during the quarter and will be requesting a modest increase to customer rates. We don't expect a decision on rates before September of next year and have requested that they not be effective until January 1st, 2022, as to further assure any rate increase is well beyond the current pandemic. Putting all these elements together, Global Water is well positioned for notable growth in the years to come. Finally, the Board of Directors has approved a 1% increase to our annual dividend paid monthly as we are committed to growing the dividend along with the rest of our business. The first dividend at the new monthly rate will be paid on December 30th, 2020 to holders of record on December 16th, 2020. I will now turn the call over to Mike for financial highlights.