Global Water Resources, Inc. (NASDAQ:GWRS) Q3 2019 Earnings Conference Call November 7, 2019 1:00 PM ET Company Participants Heather Krupa - Vice President & Controller Ron Fleming - President & Chief Executive Officer Mike Liebman - Chief Financial Officer Conference Call Participants Gerry Sweeney - ROTH Capital Operator Greetings, ladies and gentlemen. Thank you for standing by. Welcome to the Global Water Resources Inc. 2019 Third Quarter conference Call. At this time, all participants are in listen-onl ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 _____________________________________________________________ FORM 10-Q _____________________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ ...

Global Water Resources, Inc. (NASDAQ:GWRS) Q2 2019 Earnings Conference Call August 8, 2019 1:00 PM ET Company Participants Heather Krupa - Vice President & Controller Ron Fleming - President & Chief Executive Officer Mike Liebman - Chief Financial Officer Conference Call Participants Gerry Sweeney - Roth Capital Partners Operator Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Global Water Resources, Inc. 2019 Second Quarter Conference Call. At this time, all participants are i ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 _____________________________________________________________ FORM 10-Q _____________________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Co ...

Financial Data and Key Metrics Changes - Revenues increased by 4% to $7.7 million compared to Q1 2018, driven by organic connection growth and acquisitions [12][19] - Net income rose by 102.8% to $649,000 or $0.03 per share, up from $320,000 or $0.02 per share in Q1 2018 [12][23] - Adjusted EBITDA decreased by 6.8% to $3.4 million, impacted by tax reform and higher precipitation [24] Business Line Data and Key Metrics Changes - Total active connections increased by 11.7% to 44,152 as of March 31, 2019, with organic connections up 4.8% [12] - Operating expenses rose by 7.6% to $6.5 million, primarily due to increased operating and maintenance costs related to acquisitions [20][21] Market Data and Key Metrics Changes - Single-family dwelling permits in Maricopa and Pinal counties increased by 13% in 2018, with a forecast of approximately 25,000 permits for 2019 [13][14] - The City of Maricopa saw an 18% increase in permit growth in 2018, indicating a strong market for new homes [14] Company Strategy and Development Direction - The company aims to grow recurring EBITDA through revenue growth, operational efficiencies, and targeted capital improvements [15][16] - Plans to pursue accretive acquisitions to enhance core regional assets and improve industry consolidation [17] Management's Comments on Operating Environment and Future Outlook - Management noted that despite external factors like precipitation and tax reform affecting revenue, connection growth rates remain strong [27] - The company is committed to addressing utility and water resource issues in Arizona and potentially beyond [29] Other Important Information - The company extended its $8 million line of credit until April 30, 2022, previously set to expire in 2020 [25] Q&A Session Summary Question: Impact of precipitation on volumes - Management estimated a reduction of 540 gallons per month in residential usage due to precipitation, translating to a revenue impact of $150,000 to $200,000 [35] Question: Permitting activity in suburban Phoenix - Management indicated that permitting data in the specific area remains down, but overall permitting activity in Metro-Phoenix is stable or accelerating [37][38] Question: Value of FATHOM asset - The FATHOM asset is valued at less than $100,000 on the books, but management believes it holds significant potential value [45][46] Question: Acquisition activity - Management confirmed ongoing discussions with several utilities for potential acquisitions, focusing initially within Arizona [52][55]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 _____________________________________________________________ FORM 10-Q _____________________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ C ...

Financial Data and Key Metrics Changes - Revenues for 2018 increased by 13.8% to $35.5 million, up from $31.2 million, primarily driven by $2.5 million recognition of revenue under infrastructure coordination and financing agreements [12][23] - Net income for 2018 was $3.1 million, or $0.15 per share, compared to $4.6 million, or $0.23 per share in 2017 [27] - Adjusted EBITDA for 2018 was $15.6 million, down $755,000 or 4.6% compared to 2017, primarily due to the impact of tax reform and a decrease in Valencia earnout [27][28] Business Line Data and Key Metrics Changes - Active connections grew by 12%, consisting of 5.2% organic growth and acquisition growth [12] - Acquisitions in 2018 included Global Water - Turner Ranches and Global Water - Red Rock Utilities, adding a total of approximately 2,698 connections [13][14] Market Data and Key Metrics Changes - Single-family dwelling permits in Maricopa and Pinal counties increased to 22,437 units, a 13% increase over 2017 [17] - The City of Maricopa saw an 18% increase in permits issued in 2018 compared to 2017, indicating strong growth in the submarket [18] Company Strategy and Development Direction - The company aims to provide safe, reliable, and sustainable service while pursuing acquisitions for consolidation benefits [19][21] - Plans to make further capital improvements and routinely analyze the dividend policy [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the Maricopa area, citing nearly $10 billion of investment within a 10-mile radius [35] - Despite a slight decline in permits issued in early 2019, the company maintains a growth rate near 4%, which is four times the national average for utility growth [37] Other Important Information - The company completed an equity raise with net proceeds of $14.6 million to fund acquisitions and working capital [15] - A two-year revolving line of credit of up to $8 million was secured to support growth initiatives, which remains unused as of the call date [15] Q&A Session Summary Question: Comments on housing permits and infrastructure work in Maricopa - Management noted that Maricopa County is the fastest growing county in the US, with significant investments in infrastructure and corporate expansions, which supports long-term growth potential [35][36] Question: Future outlook on permit activity - Management remains optimistic about the growth rate despite a slight decline in permits, emphasizing the strong regional investment and infrastructure developments [37]

Financial Performance - Total revenues increased from $4.9 million in 2004 to $35.5 million in 2018, representing a growth of approximately 624%[14] - The company operates regulated water, wastewater, and recycled water utilities with 43,687 active service connections, generating approximately 92.9% of total revenues in 2018[34] - The company achieved a compliance rate of 99.9% for state and federal drinking water standards and 99.8% for wastewater requirements in 2018[69] - The company has experienced significant growth, with total revenues increasing from $4.9 million in 2004 to $35.5 million in 2018, representing a growth of approximately 624% over this period[127] - Total service connections rose from 8,113 as of December 31, 2004, to 44,289 as of December 31, 2018, indicating a growth of about 446%[127] Service Area and Customer Base - The company serves over 55,000 people across approximately 21,000 homes within a service area of 352 square miles[14] - Total service connections grew from 8,113 in 2004 to 44,289 in 2018, an increase of about 446%[14] - The company has added 9,920 active service connections in the Maricopa/Casa Grande region from December 2009 to December 2018, indicating continued growth despite national trends[37] - The Santa Cruz utility serves 20,385 active service connections, contributing approximately 42.5% of total revenue in 2018, while the Palo Verde utility serves 20,150 connections, contributing about 52.9%[39] Water Management and Sustainability - The company has reused 7.6 billion gallons of recycled water in the City of Maricopa, significantly reducing the demand for limited groundwater and surface water by over 40%[30] - Approximately 90% of the recycled water is utilized for non-potable irrigation and local farming, promoting sustainable water usage[30] - The company has implemented a Total Water Management model, which maximizes the use of recycled water and promotes sustainable communities, leading to increased housing density in water-scarce areas[35] - The company focuses on increasing the use of recycled water to augment groundwater supplies, although current infrastructure may limit this capability[81][82] Regulatory Environment - The company’s utilities are regulated by the Arizona Corporation Commission, ensuring predictable rate-regulated cash flows[34] - The company operates under extensive regulations, including the Safe Drinking Water Act and Clean Water Act, which govern water quality and environmental compliance[67][75] - The company is subject to regulatory oversight by the Arizona Corporation Commission (ACC), which approves rates and service areas[77] - The company is subject to comprehensive regulation by the Arizona Corporation Commission, which influences its ability to recover costs and set rates[99] Operational Efficiency and Technology - Automated meter reading technology is utilized, with over 99% of meters being read automatically, allowing for better demand modeling and leak identification[32] - The company’s automated billing technologies have minimized human labor and errors, enhancing customer service and operational efficiency[32] - The company utilizes advanced technology for water treatment and customer service, including automated meter reading and geographic information system technologies[63][64] - The company emphasizes automation and resource efficiency to enhance operational performance and reduce costs[66] Growth and Expansion Challenges - The company aims to become one of the largest investor-owned operators of integrated water and wastewater utilities in the arid western U.S.[25] - The company is subject to regulatory approvals for service area expansions, which could limit future growth if not obtained[108] - The company has faced challenges in acquiring necessary approvals and permits when expanding to states outside Arizona, which could impact profitability[109] - The growth of the customer base is heavily reliant on the success of developers in residential and commercial projects within service areas, which have been below historical rates since 2006[167] Financial Risks and Liabilities - The company may incur higher compliance or remediation costs than expected, which could adversely affect its business or results of operations[105] - New or stricter regulatory standards could increase compliance costs, potentially impacting profitability if the company cannot raise rates to offset these costs[103] - The company’s operational costs, including salaries and wages, are subject to market conditions and may rise faster than revenue, potentially affecting financial performance[134] - Total indebtedness as of December 31, 2018, was $115.1 million, which may limit the ability to respond to growth opportunities[158] Market and Competitive Landscape - The company faces competition from municipalities and investor-owned utilities for new service areas and acquisitions, which could adversely affect revenue growth[166] - The company faces no competition within existing service areas due to Arizona law granting exclusive rights, but competes for new service areas and acquisitions against companies like EPCOR Water Arizona Inc. and Arizona Water Company[92] Shareholder and Stock Performance - The concentration of stock ownership among a few individuals (approximately 59%) may limit the influence of other shareholders on corporate matters[177] - The market price of the company's common stock is likely to be volatile, influenced by various external factors including financial performance and market conditions[178] - The company intends to pay a regular monthly dividend of $0.023625 per share, totaling approximately $5.6 million annually[191] - The company's common stock began trading on NASDAQ on April 28, 2016, with no prior public market[204]