Global Water Resources, Inc.

Ladies and gentlemen, thank you for joining today's Global Water Resources, Inc. conference call. The call will begin momentarily. We do thank you for joining. Once again, the call will begin momentarily. If anyone should need assistance while waiting, please press star and zero to signal an operator. Thank you. Thank you. Thank you. good day ladies and gentlemen thank you for standing by welcome to the global water resources inc 2023 fourth quarter and year-end 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 and zero for operator assistance at any time. I'd now like to remind everyone that this call is being recorded on March 7, 2024, at 1 p.m. Eastern Time. And I'd like to turn the floor over to Joanne Ellsworth, Executive Vice President, Corporate Affairs. Joanne, please go ahead.

Thank you. Welcome, everyone, and thank you for joining us on today's call. Yesterday, we issued our 2023 fourth quarter and year-end 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 first quarter and year end, 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, which is 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. I'll 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 fourth quarter and year-end 2023. As you can see by our earnings release, 2023 was an exceptional year for Global Water. Before discussing our normal operational highlights, I wanted to briefly summarize a few of our accomplishments from last year. We managed a record-setting heat wave in Arizona during the summer, and when combined with growth, we broke all records for water pumped and delivered to customers. Importantly, this was done without any reliability or safety issues. We recommissioned and commenced operations of our southwest plant water infrastructure and portions of our wastewater infrastructure to serve new development southwest of the City of Maricopa. This recommissioning amounts to a significant portion of the water and wastewater infrastructure in this area that had been mothballed since being constructed prior to the Great Recession. And the remaining plant will be put into service once sufficient flows are established. The total value of this investment is approximately $38.4 million. We completed the purchase and full integration of our largest utility acquisition since before the Great Recession. By all accounts, this was done seamlessly for our customers who are already benefiting from our ownership and additional investment. We filed our Saguaro District Rate Case with the proposal to consolidate all previously acquired utilities in Pima County. Subsequent to year end and after a collaborative process, we entered into a positive settlement agreement with the ACC Utilities Division staff. We released our first ever environmental, social, and governance report. Shifting now to our normal operational highlights, those include that total active service connections increased 9.8% to 61,791 as of end of year. up from 56,270 to 12 months prior. Excluding the acquisition of Farmer's Water Company in February of 23, the annualized growth rate was 3.7%. Year to date, we've invested 22.3 million into infrastructure improvements in existing utilities to provide safe and reliable service. 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 seven months without a significant compliance event, and we've now gone over three years and two months since our last preventable OSHA reportable event. So with that, I want to pause highlight and thank the team here at Global Water for their continued exceptional performance throughout 2023 that allows me to provide such wonderful updates. Now I'm going to discuss organic customer growth further and what's going on in our core utilities. 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 2021, but this was still nearly 25,000 single family building permits. In 2023, single family permits stayed strong when we realized 22,582 permits. However, the 12,462 permits issued in the second half of 2023 was 4,677 permits higher than the second half of 2022. This is an increase of 60% as the market continues to recover. In the city of Maricopa, the location of our largest utilities, it's a similar story. Maricopa issued 888 permits in 2023. This was compared to 1,149 permits for 2022. However, There were only 243 new permits issued during the second half of 2022, but there were 497 permits issued in the second half of 2023. This is an improvement of 105% as that local market accelerates and recovers as well. With that said on housing, the booming economy and net immigration 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. Previously, 2022 was the single best year for Arizona all time from an industrial economic development investment perspective, and that was eclipsed in 2023. Because of this, we continue to make excellent progress on the engineering, permitting, and construction of new service areas for industrial projects, including the Inland Port, Arizona, where Nikola Motor Corp. facility is located, and where Procter & 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, we believe 2024 will be another credible 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 infrastructure. I will now turn the call over to Mike for financial highlights. Thanks, Ron. Hello everyone.