Global Water Resources, Inc.

greetings ladies and gentlemen thank you for standing by welcome to the global water resources Inc 2024 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 difficulties hearing the conference please press star 0 and for operator assistance at any time. I would like to remind everyone that this call is being recorded on March 6, 2025 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.

Welcome, everyone, and thank you for joining us on today's call. Yesterday, we issued our 2024 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 year, Mike will review the financial results for the year end, and Chris will review strategic initiatives and Arizona Corporation Commission activity. 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 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 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 of year-end 2024. Before I get to my normal operational highlights, I want to highlight a very meaningful subsequent event that occurred just yesterday, the filing of a rate case for our largest utilities, Santa Cruz Water Company and Palo Verde Utilities Company, based on a 2024 test year. More information will be shared on the rate application later on this call and moving forward. I will now provide operational highlights. Total active service connections increased 4.4% to 64,520 as of December 30th, 2024, from the 12 months prior. In 2024, we invested 32.3 million into infrastructure improvements and existing utilities to provide safe and reliable service. And finally, with public health and safety being our top mandate, we are very proud of our compliance record. For 2024, we had zero significant compliance events continuing our strengths from 2023 and prior. In fact, this means it has been nearly eight years without a significant compliance event. Now, I want to discuss organic customer growth and what is going on in our core utilities further. The single-family dwelling unit market ended 2023 with approximately 22,582 building permits issued in the Phoenix Greater Metropolitan Statistical Area. In 2024, this market realized 27,156 building permits, representing a 20.3 percent increase from 2023. In 2023, the City of Maricopa issued 884 single-family dwelling building permits. In 2024, this Maricopa market realized 986 building permits, representing an 11.5% increase from 2023. So as you can see, the 2024 permit data was strong in both Metro Phoenix and the City of Maricopa. Some contend there remains a housing shortage in Metro Phoenix, and thus over time, Metro Phoenix will retain an annual run rate of approximately 30,000 housing units per year to keep up with net-in-migration and this job growth. This demand must be met by a combination of single-family dwelling units and multifamily. On this note, as previously reported, there is a significant shift occurring in the City of Maricopa to large-scale, high-density, multifamily dwelling complexes, along with more commercial and retail businesses. We believe this shift will be notable and at some levels supplant the reduction in single-family home growth. In fact, in 2024, multifamily housing unit data was also strong in the city of Maricopa, with 1,200 units permitted compared to just 636 units permitted for 2023. This represents an increase of 885 units permitted, or 88.7%. Looking ahead, there is a record number of additional multifamily projects in some stage of development. The fact is the booming economy and net emigration 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. Additionally, the industrial manufacturing boom also continues. Previously, looking all the way back to 2022, that was the single best year for Arizona all time from an industrial economic development investment perspective, and that was eclipsed in 2023 with $40.7 billion invested in the state. In 2024, $50 billion was invested into the state. There has been significant further announcements made in 2024 and 2025, not in those numbers yet, including the most recent $100 billion announcement on the additional plant expansions at TSMC, which is in addition to the $68 billion they previously announced. Frankly, what continues to occur here in Arizona is unprecedented. In fact, the all-in TSMC investment of $168 billion would be the single largest direct foreign investment in the history of our country. And it's just one of the many announcements not yet in the historical numbers that altogether will forever change the face of Metro Phoenix. Because of these things, we remain bullish on the future potential of our inland port Arizona service area, where Procter & Gamble acquired land. Of note, we did sign the actual special industrial contract with P&G in December of 2024, and we are awaiting their notice to proceed. And we continue discussing potential projects for several large firms that would locate adjacent to P&G. While it's hard to forecast large-scale industrial growth, we do believe it is a matter of when, not if, and it will be a meaningful utility addition to our company. Additionally, the City of Maricopa continues progress on their recently announced large industrial complex consisting of over 1,200 acres of projects. While this project is still several years away from generating revenue, it represents another opportunity for notable growth for our company. Based on all of these trends, we believe that in the years to come, we will continue to see considerable large-scale commercial, multifamily, and industrial growth in addition to the strong organic housing growth that continues year after year in our service areas. As I mentioned in our last earnings call, yes, high inflation and other cost drivers have caught up with us and are impacting our earnings growth. However, it's important to recognize that 2024 was a test year for our largest utilities, whose last test year was five years ago in 2019. We need new rates to address all the cost increases over that time period and the significant investments we have made. As you can now see from our many related announcements, between multiple dockets, we now have over $7.5 million in rate increases proposed and under consideration at the ACC. Chris will discuss this further, as well as the considerable rate-based growth captured in our rate case filings. as we have invested significantly into these growing communities. While 2024 was another solid year for Global Water, putting all of these things together, meaning the four ways we grow our utility company, one, organic connections, two, new greenfield utilities, three, acquisitions, and four, rate cases, you can see how Global Water is going to be able to grow considerably in the years to come. In fact, to close my opening portion of today's earnings call, I want to provide a five-year look back from 2024. That is our current rate case test year for our largest utilities, and that look back goes to 2019, which was the last rate case test year. From 2019 to 2024, we have grown active connections by 40.8 percent. We have grown revenue by 48.4 percent, and we have grown EPS by 119%. This was the period of COVID, supply chain issues, and historic inflation. So when you consider that current rates do not include the rate adjustment for all the expense growth and investments over those years, you can start to see how earnings can continue to outperform over the next five years as well. I will now turn the call over to Mike for financial highlights. Thanks, Ron. Hello, everyone.