Global Water Resources, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the Global Water Resources, Inc. 2023 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 10, 2023, at 1 p.m. Eastern Time. I would now like to turn the conference over to Joanne Ellsworth, Executive Vice President, Corporate Affairs. Please go ahead.

Thank you. Welcome, everyone, and thank you for joining us on today's call. Yesterday, we issued our 2023 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, Mike Liebman, Chief Financial Officer, and Chris Krieger, Chief Operating Officer. Ron will summarize the key operational events of the quarter, Mike will review the financial results for the second quarter, and Chris will review strategic initiatives and the Arizona Corporation Commission activity for the quarter. Ron, Mike, and Chris 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 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's Discussion and Analysis of Financial Condition and Results of Operations, included within our latest forms 10-K and 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 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. I will now turn the call over to Ron.

Thank you, Joanne. Good morning, everyone, and thank you for joining us today. We are very pleased to report the results for the second quarter of 2023. Before discussing our normal highlights, I wanted to briefly mention a few records that occurred locally in and around Phoenix. Phoenix recently experienced a record number of consecutive days of over 110 degrees, shattering prior records for daytime highs or evening lows for days over 110 degrees, and the Global Water team maintained reliable service for its customers throughout. Because of this prolonged high temperature period, It is not just weather records that were broken, as Global Water set records for highest average volume pumped for a calendar month, repeatedly breaking highest single day pumped volume records throughout. We will discuss more specifics about these numbers next quarter, but today I want to recognize our field teams for what they do every day at a high level to ensure our customers have the essential service they need to manage such heat. More broadly, it is worth noting our total water management approach to resource conservation and utilization that allows us to be ready for unprecedented peak demands, including regional planning and permitting, maximizing the use of recycled water, automated meter reading, customer notifications, and smart water rate structures. Other highlights for the quarter include global water surpassed the 60,000 connection count for the first time ever with total active service connections increasing 8% to 60,291 at June 30, 2023, up from 55,814 12 months prior. Included in these numbers is the acquisition of Farmers Water Company that closed in February of 2023. The acquisition added a total of 3,325 active water service connections and approximately 21.5 square miles of certificate of convenience and necessity service area in the town of Sourita and the surrounding unincorporated area of Pima County. This acquisition has increased Global Water's total active water service connections in Pima County to nearly 5,000. Year to date, we have invested $13.7 million into infrastructure improvements into existing utilities to provide safe and reliable service. And a significant portion of the water and wastewater infrastructure in our Pinal County Southwest service area was put into service on or after July 1, 2023, with the remaining plan to be put into service once sufficient flows are established. The total value of this investment is approximately $38.4 million. And finally, with safety and compliance being our top mandate, we are very proud of our ongoing safety and compliance records. For the quarter, we had zero significant compliance events and no preventable OSHA reportable events, continuing our streaks from 2022 and prior. In fact, this means we have now surpassed six years and six months without a significant compliance event and have now gone over 1,130 days since our last preventable OSHA reportable event. I want to pause, highlight, and thank the team here at Global Water, whose exceptional performance allows me to provide such wonderful updates for our company. Now I want to discuss organic customer growth and what is going on in our core utilities a little bit further. Despite the local and national slowdown, development and housing activity does continue in Metro Phoenix and our service areas. In 2022, Metro Phoenix did experience a 23% reduction in single family home building permits over the same period in 2021. but this was still nearly 25,000 single-family building permits. In Maricopa, our largest utilities, we also saw a slowdown, but the city still issued 1,157 permits in 2022. Now through the first six months of 2023, we have seen 392 permits issued in Maricopa, which is more than the 245 permits we saw the entire last six months of last year. This represents a 60% increase. With that said on housing, the booming economy and net in-migration that Arizona continues to realize requires more and more places for people to live, work, and play. That is why large-scale multifamily housing, commercial, and recreational projects continue to accelerate at an extremely high pace in Metro Phoenix and in our service areas. with a record number of multifamily units being constructed in the city of Maricopa. Additionally, the industrial manufacturing boom also continues, with 2022 being the single best year for Arizona all time from an industrial economic development perspective. And that has continued into 2023. Because of this, we continue to make excellent progress on the engineering, permitting, and construction of new service areas, including for the inland port Arizona, where Nikola Motor Corp facility is located, and where Proctor and Gamble acquired land. Based on all of these trends, we believe that in the years to come, we will continue to see considerable large-scale commercial multifamily housing and industrial growth in addition to the return of strong organic housing growth. Putting all these elements together, 2023 will be another incredible year for Global Water as we continue to advance our mission of growing and aggregating water and wastewater utilities so that our customers can realize the benefits of consolidation, regionalization, and environmental stewardship in the face of water scarcity, challenging regulations, and aging infrastructure. I will now turn the call over to Mike for financial highlights.