Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number: 001-37756

______________________________________________________________

Global Water Resources, Inc.

(Exact Name of Registrant as Specified in its Charter)

______________________________________________________________

Delaware

90-0632193

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

21410 N. 19th Avenue #220

Phoenix,

Arizona

85027

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (480) 360-7775

Securities registered pursuant to Section 12(b) of the Act:

______________________________________________________________


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	GWRS	The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

Smaller reporting company

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No

As of November 5, 2024, the registrant had 24,221,626 shares of common stock, $0.01 par value per share, outstanding.

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Table of Contents
PART I. FINANCIAL INFORMATION			3
ITEM 1. Financial Statements (Unaudited)			3
Condensed Consolidated Balance Sheet			3
Condensed Consolidated Statements of Operations			4
Condensed Consolidated Statements of Shareholders’ Equity			5
Condensed Consolidated Statements of Cash Flows			6
Notes to the Condensed Consolidated Financial Statements (Unaudited)			7
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
ITEM 3. Qualitative and Quantitative Disclosures About Market Risk			38
ITEM 4. Controls and Procedures			38
PART II. OTHER INFORMATION			40
ITEM 1. Legal Proceedings			40
ITEM 1A. Risk Factors			40
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			40
ITEM 3. Defaults Upon Senior Securities			40
ITEM 4. Mine Safety Disclosures			40
ITEM 5. Other Information			40
ITEM 6. Exhibits			41
Signatures			42

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PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements (Unaudited)

GLOBAL WATER RESOURCES, INC.

Condensed Consolidated Balance Sheet

(in thousands, except share and per share amounts)

(Unaudited)


	September 30, 2024		December 31, 2023
ASSETS
PROPERTY, PLANT AND EQUIPMENT:
Land	$	2,729	$	2,674
Depreciable property, plant and equipment	427,671		414,170
Construction work-in-progress	66,703		48,147
Other	697		697
Less accumulated depreciation	(151,093)		(142,367)
Net property, plant and equipment	346,707		323,321
CURRENT ASSETS:
Cash and cash equivalents	18,145		3,087
Accounts receivable, net	3,271		2,845
Customer payments in-transit	667		543
Unbilled revenue	3,403		2,755
Taxes, prepaid expenses and other current assets	2,614		2,494
Total current assets	28,100		11,724
OTHER ASSETS:
Goodwill	9,486		10,820
Intangible assets, net	8,573		8,841
Regulatory assets	4,110		2,898
Restricted cash	3,933		1,676
Right-of-use assets	1,928		1,741
Other noncurrent assets	80		74

Total other assets	28,110		26,050
TOTAL ASSETS	$	402,917	$	361,095
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	1,284	$	1,027
Accrued expenses	9,713		7,129

Customer and meter deposits	1,598		1,628
Long-term debt, current portion	3,931		3,880
Leases, current portion	766		553
Total current liabilities	17,292		14,217
NONCURRENT LIABILITIES:
Line of credit	—		2,315
Long-term debt	120,427		101,341
Long-term lease liabilities	1,359		1,370
Deferred revenue - ICFA	20,285		19,656
Regulatory liabilities	5,863		6,076
Advances in aid of construction	124,226		111,529
Contributions in aid of construction, net	39,946		36,409
Deferred income tax liabilities, net	10,063		8,284
Acquisition liabilities	2,881		3,048
Other noncurrent liabilities	11,734		8,230
Total noncurrent liabilities	336,784		298,258
Total liabilities	354,076		312,475
Commitments and contingencies (Refer to Note 13)
SHAREHOLDERS’ EQUITY:
Common stock, $0.01 par value, 60,000,000 shares authorized; 24,565,955 and 24,492,918 shares issued as of September 30, 2024 and December 31, 2023, respectively.	240		240
Treasury stock, 344,329 and 317,677 shares at September 30, 2024 and December 31, 2023, respectively.	(2)		(2)
Paid in capital	46,795		47,585
Retained earnings	1,808		797
Total shareholders’ equity	48,841		48,620
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	402,917	$	361,095

See accompanying notes to the condensed consolidated financial statements (unaudited)

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GLOBAL WATER RESOURCES, INC.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
REVENUES:
Water service	$	7,493	$	7,520	$	19,387	$	18,916
Wastewater and recycled water service	6,828		6,494		20,054		18,958
Unregulated revenues	—		518		—		2,786
Total revenues	14,321		14,532		39,441		40,660

OPERATING EXPENSES:
Operations and maintenance	3,444		3,587		10,213		9,557
General and administrative	3,960		3,923		12,317		11,934
Depreciation and amortization	2,933		3,185		8,863		8,545
Total operating expenses	10,337		10,695		31,393		30,036
OPERATING INCOME	3,984		3,837		8,048		10,624

OTHER INCOME (EXPENSE):
Interest income	240		4		744		11
Interest expense	(1,504)		(1,260)		(4,577)		(3,709)
Allowance for equity funds used during construction	238		263		682		778
Other, net	1,028		678		2,358		1,619
Total other income (expense)	2		(315)		(793)		(1,301)

INCOME BEFORE INCOME TAXES	3,986		3,522		7,255		9,323
INCOME TAX EXPENSE	(1,061)		(888)		(1,909)		(2,484)
NET INCOME	$	2,925	$	2,634	$	5,346	$	6,839

Basic earnings per common share	$	0.12	$	0.11	$	0.22	$	0.28
Diluted earnings per common share	$	0.12	$	0.11	$	0.22	$	0.28
Dividends declared per common share	$	0.08	$	0.07	$	0.23	$	0.22

Weighted average number of common shares used in the determination of:
Basic	24,219,564		24,171,228		24,198,270		24,046,493
Diluted	24,302,521		24,231,801		24,301,974		24,144,384

See accompanying notes to the condensed consolidated financial statements (unaudited)

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GLOBAL WATER RESOURCES, INC.

Condensed Consolidated Statements of Shareholders’ Equity

(in thousands, except share and per share amounts)

(Unaudited)


	Common Stock Shares	Common Stock		Treasury Stock Shares	Treasury Stock		Paid-in Capital		Retained Earnings		Total Equity
BALANCE - December 31, 2023	24,492,918	$	240	(317,677)	$	(2)	$	47,585	$	797	$	48,620
Dividend declared $0.08 per share	—	—		—	—		(1,128)		(691)		(1,819)

Stock option exercise	5,277	—		(4,405)	—		198		—		198

Net income	—	—		—	—		—		691		691
BALANCE - March 31, 2024	24,498,195	240		(322,082)	(2)		46,655		797		47,690
Dividend declared $0.075 per share	—	—		—	—		—		(1,821)		(1,821)


Stock compensation	62,840	—		(21,543)	—		16		—		16
Net income	—	—		—	—		—		1,730		1,730
BALANCE - June 30, 2024	24,561,035	240		(343,625)	(2)		46,671		706		47,615
Dividend declared $0.08 per share	—	—		—	—		—		(1,823)		(1,823)

Stock option exercise	—	—		(704)	—		—		—		—
Stock compensation	4,920	—		—	—		124		—		124
Net income	—	—		—	—		—		2,925		2,925
BALANCE - September 30, 2024	24,565,955	$	240	(344,329)	$	(2)	$	46,795	$	1,808	$	48,841







BALANCE - December 31, 2022	24,095,139	$	239	(224,093)	$	(2)	$	44,157	$	—	$	44,394
Dividend declared $0.07 per share	—	—		—	—		—		(1,778)		(1,778)


Stock compensation	—	—		—	—		299		—		299
Net income	—	—		—	—		—		2,466		2,466
BALANCE - March 31, 2023	24,095,139	239		(224,093)	(2)		44,456		688		45,381
Dividend declared $0.07 per share	—	—		—	—		(55)		(1,739)		(1,794)
Issuance of Common Stock	230,000	1		—	—		2,747		—		2,748
Stock option exercise	152,113	—		(82,642)	—		—		—		—
Stock compensation	—	—		—	—		(47)		—		(47)
Net income	—	—		—	—		—		1,739		1,739
BALANCE - June 30, 2023	24,477,252	240		(306,735)	(2)		47,101		688		48,027
Dividend declared $0.07 per share	—	—		—	—		—		(1,801)		(1,801)

Stock option exercise	1,000	—		—	—		9		—		9
Stock compensation	—	—		—	—		211		—		211
Net income	—	—		—	—		—		2,634		2,634
BALANCE - September 30, 2023	24,478,252	$	240	(306,735)	$	(2)	$	47,321	$	1,521	$	49,080

See accompanying notes to the condensed consolidated financial statements (unaudited)

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GLOBAL WATER RESOURCES, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)


	Nine Months Ended September 30,
	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	5,346	$	6,839
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	8,863		8,545
Deferred compensation	873		698
Deferred income tax expense	1,838		2,164
Allowance for equity funds used during construction	(682)		(778)




Right of use amortization	298		240
Other adjustments	6		23
Changes in assets and liabilities
Accounts receivable	(496)		(938)
Other current assets	(891)		(165)
Accounts payable and other current liabilities	705		2,261
Other noncurrent assets	38		293
Other noncurrent liabilities	(102)		3,480
Net cash provided by operating activities	15,796		22,662
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(19,171)		(18,578)
Cash paid for acquisitions, net of cash acquired	—		(6,246)


Net cash used in investing activities	(19,171)		(24,824)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid	(5,462)		(5,372)
Advances and contributions in aid of construction	10,455		8,370
Refunds of advances for construction	(1,256)		(1,076)
Payments for taxes related to net shares settlement of equity awards	(268)		(367)
Principal payments under finance leases	(183)		(388)

Repayments of notes payable	(1,952)		(1,917)
Line of credit borrowings	—		21,050
Line of credit repayments	(2,315)		(21,035)
Loan borrowings	22,137		242

Debt issuance costs paid	(418)		—
Proceeds from sale of stock	—		2,748






Other financing activities	(48)		10
Net cash provided by financing activities	20,690		2,265
INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	17,315		103
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period	4,763		7,562
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	$	22,078	$	7,665

See accompanying notes to the condensed consolidated financial statements (unaudited)

Supplemental disclosure of cash flow information:


	Nine Months Ended September 30,
	2024		2023
Cash and cash equivalents	$	18,145	$	5,289
Restricted cash	3,933		2,376
Total cash, cash equivalents, and restricted cash	$	22,078	$	7,665

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GLOBAL WATER RESOURCES, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

1. BASIS OF PRESENTATION, CORPORATE TRANSACTIONS, SIGNIFICANT ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS

Basis of Presentation and Principles of Consolidation

The condensed consolidated financial statements (unaudited) of Global Water Resources, Inc. (the “Company”, “GWRI”, “we”, “us”, or “our”) and related disclosures as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These financial statements follow the same accounting policies and methods of their application as the Company’s most recent annual consolidated financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023. In the Company’s opinion, these financial statements include all normal and recurring adjustments necessary for the fair statement of the results for the interim period. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year, due to the seasonality of our business.

The Company prepares its financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

Corporate Transactions

Asset Purchase Agreement with City of Tucson

Effective April 25, 2024, Global Water - Ocotillo Water Company, Inc. (“GW-Ocotillo”), formerly Global Water - 2024 Acquisition A, Inc. and a wholly owned subsidiary of the Company, entered into an asset purchase agreement with the City of Tucson, pursuant to which GW-Ocotillo will acquire seven isolated public water systems from the City of Tucson serving approximately 2,200 water service connections in an all-cash transaction for a purchase price of $8.4 million. The isolated public water systems are located in and around Pima County. The Company expects to complete the acquisition in the first quarter of 2025, subject to customary closing conditions and approval by the Arizona Corporation Commission (“ACC”). The estimated rate base of the seven water systems is approximately $7.8 million.

Private Placement Offering of Common Stock

On June 8, 2023, the Company entered into a securities purchase agreement for the issuance and sale by the Company of an aggregate of 230,000 shares of the Company’s common stock at a purchase price of $12.07 per share in an offering exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder. The Company received gross proceeds of approximately $2.8 million from the offering. One of the Company’s directors purchased an aggregate of 30,000 shares of common stock in the offering at the purchase price.

Farmers Water Co. Acquisition

On February 1, 2023, the Company acquired all of the equity of Farmers Water Co., an operator of a water utility with service area in Pima County, Arizona. The acquisition added approximately 3,300 active water service connections and approximately 21.5 square miles of service area in Sahuarita, Arizona and the surrounding unincorporated area of Pima County at the time of the acquisition.

Stipulated Condemnation of the Operations and Assets of Valencia Water Company, Inc.

On July 14, 2015, the Company closed the stipulated condemnation to transfer the operations and assets of Valencia Water Company, Inc. (“Valencia”) to the City of Buckeye. Terms of the condemnation were agreed upon through a settlement agreement and stipulated final judgment of condemnation wherein the City of Buckeye acquired all the operations and assets of Valencia and assumed operation of the utility upon close. The City of Buckeye is obligated to pay the Company a growth premium equal to $3,000 for each new water meter installed within Valencia’s prior service areas in the City of Buckeye, for a 20-year period ending December 31, 2034, subject to a maximum payout of $45.0 million over the term of

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the agreement. The Company received growth premiums of $0.9 million and $2.2 million for the three and nine months ended September 30, 2024, respectively. The Company received growth premiums of $0.7 million and $1.6 million for the three and nine months ended September 30, 2023, respectively. An aggregate of $12.9 million in growth premiums have been received to date. The growth premiums are included in “Other, net” on the Company’s condensed consolidated statements of operations (unaudited).

Significant Accounting Policies

Basic and Diluted Earnings per Common Share

Basic earnings per share (“EPS”) in each period of this report were calculated by dividing net income by the weighted-average number of shares during those periods. Diluted EPS includes additional weighted-average common stock equivalents (options and restricted stock awards), if dilutive. Unless otherwise noted, the term “earnings per share” refers to basic EPS. A reconciliation of the denominator used in basic and diluted EPS calculations is shown in the following table:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
(In thousands)
Basic weighted average common shares outstanding	24,220	24,171	24,198	24,046
Effect of dilutive securities:
2017 Option grant	66	54	67	72
2019 Option grant	13	7	13	14
2020 Restricted stock awards	—	—	—	6
2021 Restricted stock awards	4	—	24	6
Total dilutive securities	83	61	104	98
Diluted weighted average common shares outstanding	24,303	24,232	24,302	24,144
Anti-dilutive shares excluded from earnings per diluted shares(1)	—	138	—	94

(1) Shares excluded from the dilutive-effect calculation because the outstanding awards’ exercise prices were greater than the average market price of the Company’s common stock.

Segments

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing operating performance. The Company is not organized around specific products and services, geographic regions, or regulatory environments. The Company currently operates in one geographic region within the State of Arizona, wherein each operating utility operates within the same regulatory environment.

While the Company reports its revenue, disaggregated by service type, on the face of its condensed consolidated statements of operations (unaudited), the Company does not manage the business based on any performance measure at the individual revenue stream level. The Company does not have any customers that contribute more than 10% to the Company’s revenues or revenue streams. Additionally, the CODM uses consolidated financial information to evaluate the Company’s performance, which is the same basis on which he communicates the Company’s results and performance to the Board of Directors. It is upon this consolidated basis from which he bases all significant decisions regarding the allocation of the Company’s resources on a consolidated level. Based on the information described above and in accordance with the applicable literature, management has concluded that the Company is currently organized and operated as one operating and reportable segment.

Governmental Funding & Assistance

Occasionally, the Company participates in various U.S. federal, state and local programs under which governmental funding is received to offset certain specified costs of the Company associated with water conservation efforts, the provision of utility service or facilities in designated locations (such as unserved or underserved rural areas), and the replacement and upgrading of outdated equipment with advanced metering infrastructure. In certain instances, our receipt of awarded governmental funds may be conditioned on the Company meeting specified progress and inspection milestones during construction of associated utility infrastructure projects. Certain programs are subject to audits of compliance with

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program commitments and, subject to the outcomes of those assessments, the Company may be required to reimburse the government entity for cash previously received, or, in some cases, pay a penalty. The Company evaluates each program and establishes a liability under the principles of Accounting Standards Codification (“ASC”) 450 if it is probable support payments will be recaptured or a penalty will be imposed.

In April 2024, the Company’s Global Water - Rincon Water Company, Inc. (“GW-Rincon”) utility entered into a loan agreement with the Water Infrastructure Finance Authority of Arizona (“WIFA”) to improve the utility’s infrastructure, including enhancements to the fluoride treatment system and other projects. A portion of the loan is forgivable, which the Company accounts for as a contribution in aid of construction (“CIAC”). Refer to Note 9 - “Debt,” for additional information.

In December 2023, the Company’s GW-Farmers utility was awarded a $1.6 million grant from WIFA to replace manual read meters with advanced metering infrastructure (“AMI”) smart meters. Disbursement of the award occurs through one or more reimbursement requests submitted by the Company for costs incurred and activities performed between July 6, 2022 and June 30. 2026. Award payments are accounted for as CIAC. For the nine months ended September 30, 2024, the Company received $0.8 million in award disbursements. The Company received no award disbursements in 2023.

Recent Accounting Pronouncements

Future Adoption of Accounting Standards

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is assessing the timing and impact that adopting this new standard will have on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures that expands disclosures of significant segment expenses and includes new disclosures for entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company will implement and provide the required annual disclosures beginning in its Annual Report on Form 10-K for the year ended December 31, 2024.

2. REGULATORY DECISION AND RELATED ACCOUNTING AND POLICY CHANGES

The Company’s regulated utilities and certain other balances are subject to regulation by the ACC and meet the requirements for regulatory accounting found within ASC 980, Regulated Operations.

In accordance with ASC 980, rates charged to utility customers are intended to recover the costs of the provision of service plus a reasonable return in the same period. Changes to the rates are made through formal rate applications with the ACC, which the Company has customarily done.

2024 Farmers Rate Case

On June 27, 2024, Global Water-Farmers Water Company, Inc. (“GW-Farmers”), one of the Company’s regulated utilities, filed a rate case application with the ACC for increased water rates based on a 2023 test year with updates for changes in post-test year plant through December 31, 2024. The application requests, among other things, a revenue increase of approximately $1.3 million phased-in over two steps and recovery of the acquisition premium related to the Farmers Water Co. acquisition. On July 25, 2024, ACC Utilities Division Staff found the application administratively complete and estimates its testimony regarding the application will be filed on or about December 9, 2024.

Acquisition of Seven Systems from City of Tucson

On May 10, 2024, GW-Ocotillo filed an application with the ACC for approval to acquire seven isolated public water systems from the City of Tucson. On June 10, 2024, ACC Utilities Division Staff found the application administratively complete and estimates its testimony regarding the application will be filed on or about November 5, 2024. The Company expects to complete the acquisition in the first quarter of 2025, subject to customary closing conditions and approval by the ACC.

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2025 Santa Cruz and Palo Verde Rate Case

During the fourth quarter of 2023, the Company notified the ACC of its intention to file a rate case for Global Water-Santa Cruz Water Company, Inc. (“GW-Santa Cruz”) and Global Water-Palo Verde Utilities Company, Inc. (“GW-Palo Verde”) in 2025. The GW-Santa Cruz and GW-Palo Verde rate case is anticipated to be based on a test year ending December 31, 2024 with updates for changes in post-test year plant. The Company has begun stakeholder outreach for the rate case.

Southwest Plant Accounting Order and Bill Credit

On July 3, 2023, the Company’s GW-Palo Verde and GW-Santa Cruz utilities filed an application with the ACC for approval of an accounting order to defer and record as a regulatory asset the depreciation expense recorded for the Company’s Southwest Plant, plus the carrying cost at the authorized rate of return set in GW-Palo Verde’s and GW-Santa Cruz’s most recent rate order, until the plant is considered for recovery in the next GW-Palo Verde and GW-Santa Cruz rate case. The Southwest Plant was substantially constructed prior to 2009 to provide water, wastewater, and recycled water service for the area southwest of the City of Maricopa. Due to the unprecedented collapse of the housing market during the Great Recession, the nearly completed plant remained idle for well over a decade. The total cost of the Southwest Plant was approximately $38.4 million. Since July 2023, construction costs of $25.0 million related to the water production plant and a portion of the wastewater processing plant were placed in service, with the remaining parts of the Southwest Plant to be placed in service once sufficient flows, provided by connection growth, are established. There can be no assurance, however, that the ACC will approve the application as submitted and the ACC could take other actions regarding the application.

In January 2024, the Company discovered that approximately $7.8 million of construction costs for the Southwest Plant had been prematurely included as “plant in service” for rate making purposes in 2007 and were reflected in the calculation of customer rates in Decision No. 71878 (September 15, 2010). Those costs were also included as “plant in service” in Decision No. 74364 (February 26, 2014) and Decision No. 78644 (July 27, 2022). The Company disclosed this circumstance to the ACC on March 1, 2024, and on April 25, 2024, GW-Palo Verde filed an application with the ACC requesting a monthly bill credit for customers that would be in place until the conclusion of the next GW-Palo Verde rate case. The ACC issued Decision No. 79424 on July 18, 2024 approving the bill credit with an effective date of August 1, 2024, which will reduce revenue earned subsequent to the order by approximately $570,000 annually. The bill credit will be in place until the conclusion of the next GW-Palo Verde rate case, which Decision No. 79424 requires GW-Palo Verde to file no later than December 31, 2025. The ACC may take further action during the next GW-Palo Verde rate case. Such action may include requiring the Company to reduce rates further going forward or taking other actions that would be unfavorable to the Company.

Decision No. 79383 - Issued June 20, 2024 - Saguaro Rate Case

The ACC also approved:

(i) the consolidation of water rates to one single rate for the seven utilities;

(ii) acquisition premiums relating to the Company’s acquisitions of its Global Water-Mirabell Water Company, Inc. (“GW-Mirabell”), Global Water-Lyn Lee Water Company, Inc. (“GW-Lyn Lee”), Global Water-Francesca Water Company, Inc. (“GW-Francesca”), Global Water-Tortolita Water Company, Inc. (“GW-Tortolita”), GW-Rincon, and Global Water-Las Quintas Serenas Water Company, Inc. (“GW-Las Quintas Serenas”) utilities, each located in Pima County, which increase the rate base for such utilities and result in an increase in the annual collective revenue requirement;

(iii) the Company’s ability to annually adjust rates to flow through certain changes in tax expense, primarily related to income taxes, without the necessity of a rate case proceeding;

(iv) a sustainable water surcharge, which will allow semiannual surcharges to be added to customer bills based on verified costs of new water resources;

(v) a capital structure matching the Company’s previous rate case of 55% equity with a 9.6% return on equity; and

(vi) a depreciation expense accounting deferral for GW-Rincon.

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Decision No. 78644 - Issued July 27, 2022

On July 27, 2022, the ACC issued Decision No. 78644 pursuant to which the ACC approved, among other things, a collective annual revenue requirement increase of approximately $2.2 million (including acquisition premiums) based on 2019 test year service connections, and phased-in over approximately two years. The effective date of the final phase was January 1, 2024.

Decision No. 78644 also addressed the primary impacts of the Federal Tax Cuts and Jobs Act (the “TCJA”) on the Company, which includes the reduction of the federal income tax rate from 35 percent to 21 percent beginning on January 1, 2018. The TCJA required the Company to re-measure all existing deferred income tax assets and liabilities to reflect the reduction in the federal tax rate. For the Company’s regulated entities, substantially all of the change in deferred income taxes is recorded as an offset to either a regulatory asset or liability because the impact of changes in the rates are expected to be recovered from or refunded to customers. Decision No. 78644 approved an adjustor mechanism for income taxes (as described below) that permits the Company to flow through potential changes to state and federal income tax rates as well as refund or collect funds related to TCJA.

Regulatory Assets and Liabilities

Regulatory assets and liabilities are the result of operating in a regulated environment in which the ACC establishes rates that are designed to permit the recovery of the cost of service and a return on investment. The Company capitalizes and records regulatory assets for costs that would otherwise be charged to expense if it is probable that the incurred costs will be recovered in future rates. Regulatory assets are amortized over the future periods that the costs are expected to be recovered. Final determination of whether a regulatory asset can be recovered is decided by the ACC in regulatory proceedings. If the Company determines that a portion of the regulatory assets is not recoverable in customer rates, the Company would be required to recognize the loss of the assets disallowed.

If costs expected to be incurred in the future are currently being recovered through rates, the Company records those expected future costs as regulatory liabilities.

The Company’s regulatory assets and liabilities consist of the following (in thousands):


	Recovery Period	September 30, 2024		December 31, 2023
Regulatory Assets
Acquisition premiums(1)	25 or 50 years	$	2,616	$	1,269
Income taxes recoverable through future rates (2)	Various	1,345		1,404
Rate case expense surcharge(3)	2 years	104		221
Other regulatory assets		45		4
Total regulatory assets		$	4,110	$	2,898

Regulatory Liabilities
Acquired ICFAs(4)		$	4,708	$	4,896
Income taxes payable through future rates(2)		473		488
Depreciation adjustment(5)		682		692
Total regulatory liabilities		$	5,863	$	6,076

(1) Decision No. 78319, issued on December 3, 2021, approved an acquisition premium related to the acquisition of the Company’s GW-Rincon utility. The acquisition premium balance relating to the Company’s GW-Rincon utility as of September 30, 2024 was approximately $0.6 million. Decision No. 79383, issued on June 20, 2024, allowed the Company to begin amortization of the acquisition premium through customer rates over 50 years. Decision No. 79383 also approved acquisition premiums related to the acquisition of the Company’s GW-Francesca, GW-Las Quintas Serenas, GW-Lyn Lee, GW-Mirabell, and GW-Tortolita utilities. The acquisition premiums will be amortized through customer rates over 50 years as approved in the decision. The acquisition premium balance relating to these utilities as of September 30, 2024 was approximately $1.3 million.

Decision No. 78644, issued on July 27, 2022, approved acquisition premiums related to the acquisitions of the Company’s GW-Turner Ranches and Global Water – Red Rock Water Company, Inc. (“GW-Red Rock”) utilities. Amortization began in 2022 as the acquisition premiums were included in customer rates as approved in the decision and will continue over a 25-year period. The acquisition premium balance relating to these utilities as of September 30, 2024 was approximately $0.7 million.

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(2) The TCJA required the Company to re-measure all existing deferred income tax assets and liabilities to reflect the reduction in the federal tax rate. For the Company’s regulated entities, substantially all of the change in deferred income taxes is recorded as an offset to either a regulatory asset or liability because the impact of changes in the rates are expected to be recovered from or refunded to customers.

(3) Decision No. 78743, issued on October 24, 2022, approved approximately $0.5 million in rate case expenses to be recovered through a rate case expense surcharge over a period of up to two years.

Decision No. 79383 also approved approximately $0.1 million in rate case expenses to be recovered through a rate case expense surcharge over a period of up to a two-years.

(4) The acquired Infrastructure Coordination and Financing Agreements (“ICFA”) regulatory liability relates to the offset of intangible assets related to ICFA contracts obtained in connection with the GW-Santa Cruz, GW-Palo Verde, and Sonoran Utility Services, LLC (“Sonoran”) acquisitions. When funds are received related to the acquired ICFA, a portion of these funds reduce the acquired ICFA regulatory liability and partially offset the amortization expense recognition of the related intangible asset.

(5) Decision No. 78644 approved an adjustment to update previously approved depreciation rates. The adjustment was incorporated into rates in accordance with the rate decision.

3. REVENUE RECOGNITION

Regulated Revenue

The Company’s operating revenues are primarily attributable to regulated water, wastewater, and recycled water service based upon tariff rates approved by the ACC. Regulated service revenues consist of amounts billed to customers based on approved fixed monthly fees and consumption fees, as well as unbilled revenues estimated from the last meter reading date to the end of the accounting period utilizing historical customer data recorded as accrued revenue. The measurement of sales to customers is generally based on the reading of their meters, which occurs on a systematic basis throughout the month. At the end of each month, the Company estimates consumption since the date of the last meter reading and a corresponding unbilled revenue is recognized. The unbilled revenue estimate is based upon the number of unbilled days that month and the average daily customer billing rate from the previous month (which fluctuates based upon customer usage). The Company applies the invoice practical expedient and recognizes revenue from contracts with customers in the amount for which the Company has a right to invoice. The Company has the right to invoice for the volume of consumption, service charge, and other authorized charges.

The Company satisfies its performance obligation to provide water, wastewater, and recycled water service over time as the service is rendered. Regulated water and wastewater service may be terminated by the customers at will, and, as a result, no separate financing component is recognized for the Company’s collections from customers, which generally require payment within 15 days of billing. The Company applies judgment, based principally on historical payment experience, in estimating its customers’ ability to pay.

Total revenues do not include sales tax as the Company considers itself a pass-through conduit for collecting and remitting sales taxes.

Unregulated Revenue

Unregulated revenues represent those revenues that are not subject to the ratemaking process of the ACC. Unregulated revenues are primarily related to the revenues recognized on a portion of ICFA funds received.

ICFAs are agreements with developers and homebuilders where the Company, which owns the operating utilities, provides service to plan, coordinate, and finance the water and wastewater infrastructure that would otherwise be required to be performed or subcontracted by the developer or homebuilder. Service provided within these agreements include coordination of construction service for water and wastewater treatment facilities as well as financing, arranging, and coordinating the provision of utility service. In return, the developers and homebuilders pay the Company an agreed-upon amount per dwelling unit for the land legally described in the agreement, or a portion thereof. Under ICFA agreements, the Company has a contractual obligation to ensure physical capacity exists through its regulated utilities for the provision of water and wastewater utility service to the land when needed. This obligation persists regardless of connection growth.

Fees for this service are typically a negotiated amount per equivalent dwelling unit for the land legally described in the agreement, or a portion thereof. Payments are generally due in installments, with a portion due upon signing of the agreement, a portion due upon completion of certain milestones, and the final payment due upon final plat approval or sale of the subdivision. The payments are non-refundable. The agreements are generally recorded against the land with the appropriate recorder’s office and must be assumed in the event of a sale or transfer of the land. The regional planning and coordination of the infrastructure in the various service areas has been an important part of the Company’s business model.

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Payments for ICFAs are usually received in advance. Decision No. 74364 requires a hook-up fee (“HUF”) tariff to be established for all ICFAs that come due and are paid subsequent to December 31, 2013, which is a set amount per equivalent dwelling unit determined by the ACC based on the utility and meter size. Also pursuant to Decision No. 74364, as payments are received, 70% of the payment must be recorded as a HUF liability until the HUF liability is fully funded, with the remaining amount initially recorded to deferred revenue until earned. The Company is responsible for assuring that the full HUF tariff, which is the set amount determined by the rate decision, is funded in the HUF liability, even if it results in recording less than 30% of the overall ICFA funds as deferred revenue. ICFA revenue is recognized when the Company completes the performance obligations under the agreement. Following its issuance in February 2014, Decision No. 74364 prohibits the Company from entering into any new ICFAs.

The Company accounts for the portion of ICFA funds allocated to the HUF liability as a CIAC. However, in accordance with the ACC directives, the CIAC is not deducted from rate base until the HUF funds are expended for utility plant. Such funds are restricted and segregated in a separate bank account and used for plant. For facilities required under a HUF or ICFA, the utilities must first use the HUF moneys received, after which, it may use debt or equity financing for the remainder of construction.

As these arrangements are with developers and not with the end water or wastewater customer, revenue recognition coincides with the completion of the Company’s performance obligations under the agreement with the developer and its regulated utilities’ ability to provide fitted capacity for water and wastewater service. The Company exercises judgment when estimating the number of equivalent dwelling units that its regulated utilities have capacity to serve. The Company believes that service provided within these agreements is not distinct in the context of the contract because it is highly interdependent with its regulated utilities’ ability to provide fitted capacity for water and wastewater service. The Company concluded that the goods and service provided under ICFA contracts constitute a single performance obligation.


	December 31, 2023 Balance		Payments Allocated to Deferred Revenue		Revenue Recognized		September 30, 2024 Balance
Deferred Revenue - ICFA	$	19,656	$	629	$	—	$	20,285

Disaggregated Revenues

For the three and nine months ended September 30, 2024 and 2023, disaggregated revenues from contracts with customers by major source and customer class are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
REGULATED REVENUE
Water Service
Residential	$	5,034	$	4,900	$	14,003	$	13,261
Irrigation	1,205		1,393		2,459		2,739
Commercial	541		457		1,389		1,184
Construction	469		537		861		1,036
Other water revenues	244		233		675		696
Total water revenues	7,493		7,520		19,387		18,916
Wastewater and recycled water service
Residential	5,796		5,630		17,607		16,725
Commercial	336		317		1,034		906
Recycled water revenues	607		469		1,133		1,062
Other wastewater revenues	89		78		280		265
Total wastewater and recycled water revenues	6,828		6,494		20,054		18,958
TOTAL REGULATED REVENUE	14,321		14,014		39,441		37,874
UNREGULATED REVENUE
ICFA revenues	—		518		—		2,786



TOTAL REVENUE	$	14,321	$	14,532	$	39,441	$	40,660

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Contract Balances

The Company’s contract assets and liabilities consist of the following (in thousands):


	September 30, 2024		December 31, 2023
CONTRACT ASSETS
Accounts receivable
Water service	$	2,125	$	1,588
Wastewater and recycled water service	1,297		1,379
Total contract assets	$	3,422	$	2,967
CONTRACT LIABILITIES
Deferred revenue - ICFA	$	20,285	$	19,656


Total contract liabilities	$	20,285	$	19,656

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Deferred revenue - ICFA is recognized as revenue once the obligations specified within the applicable ICFA are met, including construction of sufficient operating capacity to serve the customers for which revenue was deferred. Due to the uncertainty of future events, the Company is unable to estimate when to expect recognition of deferred revenue - ICFA.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable as of September 30, 2024 and December 31, 2023 consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Billed receivables	$	3,422	$	2,967
Less provision for credit losses	(151)		(122)
Accounts receivable, net	$	3,271	$	2,845

The following table summarizes the allowance for credit loss activity for the nine months ended September 30, 2024 and the year ended December 31, 2023 (in thousands):


	September 30, 2024		December 31, 2023
Beginning of Period	$	(122)	$	(164)
Credit Loss Expense	(69)		(76)
Write Offs	67		124
Recoveries	(27)		(6)
End of Period	$	(151)	$	(122)

4. PROPERTY, PLANT AND EQUIPMENT

Depreciable property, plant and equipment as of September 30, 2024 and December 31, 2023 consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Equipment	$	61,519	$	60,536
Office buildings and other structures	64,622		64,084
Transmission and distribution plant	301,530		289,550
Total property, plant and equipment	$	427,671	$	414,170

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Depreciation of property, plant and equipment is computed based on the estimated useful lives as follows:


						Useful Lives
Equipment						3 to 30 years
Office buildings and other structures						30 years
Transmission and distribution plant						10 to 50 years

5. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The goodwill balance was $9.5 million as of September 30, 2024 and is related to our historical acquisitions. There were no indicators of impairment identified as a result of the Company’s review of events and circumstances related to its goodwill subsequent to the acquisitions.

As a result of Decision No. 79383 issued by the ACC on June 20, 2024, the Company reclassified $1.3 million of goodwill to regulatory assets for certain impacted utilities to establish the approved $1.8 million of acquisition premiums net of the $0.5 million that was previously recorded for GW-Rincon. Refer to Note 2 – “Regulatory Decision and Related Accounting and Policy Changes” for additional information.

As of September 30, 2024 and December 31, 2023, the goodwill balance consisted of the following (in thousands):


	December 31, 2023 Balance		Acquisition Activity		Adjustments Subsequent to Acquisition Date		September 30, 2024 Balance
Goodwill	$	10,820	$	—	$	(1,334)	$	9,486

Intangible Assets

As of September 30, 2024 and December 31, 2023, intangible assets consisted of the following (in thousands):


	September 30, 2024						December 31, 2023
	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
INDEFINITE LIVED INTANGIBLE ASSETS:
CP Water Certificate of Convenience & Necessity service area	$	1,532	$	—	$	1,532	$	1,532	$	—	$	1,532
Intangible trademark	13		—		13		13		—		13
Franchise contract rights	139		—		139		139		—		139
Organizational costs	164		—		164		163		—		163
Total indefinite lived intangible assets	1,848		—		1,848		1,847		—		1,847
DEFINITE LIVED INTANGIBLE ASSETS:
Acquired ICFAs	17,978		(16,374)		1,604		17,978		(16,105)		1,873
Sonoran contract rights	7,406		(2,285)		5,121		7,406		(2,285)		5,121
Total definite lived intangible assets	25,384		(18,659)		6,725		25,384		(18,390)		6,994
Total intangible assets	$	27,232	$	(18,659)	$	8,573	$	27,231	$	(18,390)	$	8,841

A Certificate of Convenience & Necessity (“CC&N”) is a permit issued by the ACC allowing a public service corporation to serve a specified area, and preventing other public service corporations from offering the same water and wastewater service within the specified area. The CP Water Company (“CP Water”) CC&N intangible asset was acquired through the acquisition of CP Water in 2006. This CC&N permit has no outstanding conditions that would require renewal.

Franchise contract rights and organizational costs relate to the 2018 acquisition of GW-Red Rock and the 2023 acquisition of GW-Farmers. Franchise contract rights are agreements with Pima and Pinal counties for GW-Red Rock and Pima county for GW-Farmers that allow the Company to place infrastructure in public right-of-way and permits expected to be renewable

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indefinitely. The organizational costs represent fees paid to federal or state governments for the privilege of incorporation and expenditures incident to organizing the corporation and preparing it to conduct business.

Acquired ICFAs and Sonoran contract rights relate to acquired rights under certain ICFAs through the 2004 acquisition of GW-Santa Cruz and GW-Palo Verde and the 2005 acquisition of Sonoran assets, respectively, which are amortized when cash is received in proportion to the amount of total cash expected to be received under the underlying agreements. Due to the uncertainty of the timing of when cash will be received under ICFA agreements and contract rights, the Company cannot reliably estimate when the remaining intangible assets’ amortization will be recorded. There was zero and $0.3 million of amortization recorded for these balances during the three and nine months ended September 30, 2024, respectively. There was $1.4 million of amortization recorded for these balances during the three and nine months ended September 30, 2023.

6. TRANSACTIONS WITH RELATED PARTIES

The Company provides medical benefits to employees through its participation in a pooled plan sponsored by an affiliate of a significant shareholder and director of the Company. Medical claims paid to the plan were approximately $0.3 million for both the three months ended September 30, 2024 and 2023. Medical claims paid to the plan were approximately $0.8 million for the nine months ended September 30, 2024 and $0.6 million for the nine months ended September 30, 2023.

Refer to Note 1 — “Basis of Presentation, Corporate Transactions, Significant Accounting Policies, and Recent Accounting Pronouncements — Corporate Transactions” (specifically the “Private Placement Offering of Common Stock” section) for additional information regarding other related party disclosures.

7. ACCRUED EXPENSES

Accrued expenses as of September 30, 2024 and December 31, 2023 consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Accrued project liabilities	$	2,310	$	1,001
Interest	2,003		480
Accrued bonus	981		602
Property taxes	678		1,242
Dividend payable	606		606
Accrued purchase orders	583		200
Customer prepayments	577		883
Accrued payroll	328		67
Accrued sales taxes	238		179
Deferred compensation	228		239
Accrued electric	213		109

Other accrued liabilities	968		1,521
Total accrued expenses	$	9,713	$	7,129

8. FAIR VALUE

Fair Value of Financial Instruments

ASC 820, Fair Value Measurement, establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three levels, as follows:

•Level 1 - Quoted market prices in active markets for identical assets or liabilities.

•Level 2 - Inputs other than Level 1 that are either directly or indirectly observable.

•Level 3 - Unobservable inputs developed using the Company’s estimates and assumptions, which reflect those that the Company believes market participants would use.

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Financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 were as follows (in thousands):


	September 30, 2024								December 31, 2023
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
HUF funds - restricted cash	$	2,986	$	—	$	—	$	2,986	$	822	$	—	$	—	$	822
Certificate of deposit - restricted	947		—		—		947		—		854		—		854
Demand deposit	1		—		—		1		1		—		—		1
Total	$	3,934	$	—	$	—	$	3,934	$	823	$	854	$	—	$	1,677
Liabilities:
Contingent consideration	$	—	$	—	$	1,946	$	1,946	$	—	$	—	$	2,113	$	2,113
Total	$	—	$	—	$	1,946	$	1,946	$	—	$	—	$	2,113	$	2,113

HUF Funds - restricted cash and Certificate of deposit - restricted are presented on the Restricted cash line item of the Company’s condensed consolidated balance sheets (unaudited) and are valued at amortized cost, which approximates fair value.

Demand Deposit is presented on the Cash and cash equivalents line item of the Company’s condensed consolidated balance sheets (unaudited) and is valued at amortized cost, which approximates fair value.

As part of the GW-Red Rock acquisition, the Company is required to pay to the seller a growth premium equal to $750 (not in thousands) for each new account established within specified growth premium areas, commencing in each area on the date of the first meter installation and ending on the earlier of ten years after such first installation date, or twenty years from the acquisition date. The fair value of the contingent consideration was calculated using a discounted cash flow technique which utilized unobservable inputs developed using the Company’s estimates and assumptions. Significant inputs used in the fair value calculation are as follows: year of the first meter installation, total new accounts per year, years to complete full build out, and discount rate.

In addition, as part of the GW-Farmers acquisition, the Company is required to pay the seller a growth premium equal to $1,000 (not in thousands) for each new account established in the service area, up to a total aggregate growth premium of $3.5 million. The obligation period of the growth premium commences on the closing date of the acquisition and ends (i) ten years after the first new account for residential purposes is established on land that is, at the time of the closing date of the acquisition, undeveloped or unplatted and owned by the seller within the service area or (ii) ten years after the date of closing if a new account (as previously described) has not been established. The fair value of the contingent consideration was calculated using a discounted cash flow technique which utilized unobservable inputs developed using the Company’s estimates and assumptions. Significant inputs used in the fair value calculation are as follows: year of the first meter installation, total new accounts per year, years to complete full build out, and discount rate.

Contingent consideration is included within acquisition liabilities on the condensed consolidated balance sheets (unaudited). Refer to Note 13 — “Commitments and Contingencies” for additional information about contingent consideration.

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9. DEBT

The outstanding balances and maturity dates for short-term (including the current portion of long-term debt) and long-term debt as of September 30, 2024 and December 31, 2023 are as follows (in thousands):


	September 30, 2024				December 31, 2023
	Short-term		Long-term		Short-term		Long-term
NOTES PAYABLE -
4.38% Senior Secured Notes, Series A, maturing June 2028 (“Series A Notes”)	$	—	28,750		$	—	$	28,750
4.58% Senior Secured Notes, Series B, maturing June 2036 (“Series B Notes”)	3,833		70,917		3,833		72,833
6.91% Senior Secured Notes, maturing January 2034 (“6.91% Notes”)	—		20,000		—		—
4.911% WIFA Note, maturing April 2044 (“4.911% WIFA Note”)	49		1,399		—		—

	3,882		121,066		3,833		101,583
OTHER
Debt issuance costs	—		(784)		—		(426)
Loan Payable	49		145		47		184
Total debt	$	3,931	$	120,427	$	3,880	$	101,341

Debt is measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 as follows (in thousands):


	September 30, 2024				December 31, 2023
	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Long-term debt(1)	—	124,648	—	124,648	—	100,746	—	100,746

(1) The fair value of debt was estimated based on interest rates considered available for instruments of similar terms and remaining maturities.

On April 30, 2024, the Company’s GW-Rincon utility entered into a loan agreement with WIFA for a principal amount of $2.4 million to improve the utility’s infrastructure, of which $0.7 million is forgivable. The loan is due on April 1, 2044 and bears an interest rate of 4.911%. Funding occurs through one or more draw requests submitted by the Company and the subsequent disbursement of principal by WIFA. As of September 30, 2024, the Company has received approximately $2.1 million in disbursements under this agreement.

On October 26, 2023, the Company entered into a note purchase agreement for the issuance of an aggregate principal amount of $20 million of 6.91% Senior Secured Notes due on January 3, 2034 (the “6.91% Notes”). Pursuant to the terms of the 6.91% Note purchase agreement, the Company issued the 6.91% Notes on January 3, 2024. The 6.91% Notes accrue interest at 6.91% per annum from the date of issuance, payable semi-annually on January 3 and July 3 of each year, beginning on July 3, 2024, with a balloon payment due on January 3, 2034.

As of September 30, 2024, the Company was in compliance with its financial debt covenants relating to the Series A Notes, Series B Notes, and the 6.91% Notes.

Revolving Credit Line

On April 30, 2020, the Company entered into an agreement with The Northern Trust Company, an Illinois banking corporation (“Northern Trust”), which was initially for a two-year revolving line of credit up to $10.0 million with a maturity date of April 30, 2022. This credit facility, which may be used to refinance existing indebtedness, to acquire assets to use in and/or expand the Company’s business, and for general corporate purposes, initially bore an interest rate equal to the London Interbank Offered Rate (LIBOR) plus 2.00% and had no unused line fee.

The Company and Northern Trust subsequently amended the credit facility agreement on multiple occasions (as amended, the “Northern Trust Loan Agreement”) to, among other things, (i) extend the scheduled maturity date to July 1, 2025; (ii) increase the maximum principal amount available for borrowing to $15.0 million; (iii) replace the LIBOR interest rate provisions with provisions based on the Secured Overnight Financing Rate (SOFR); and (iv) add a quarterly facility fee equal to 0.35% of the average daily unused amount of the revolving line of credit.

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On July 1, 2024, the Company and Northern Trust entered into a fifth amendment to the Northern Trust Loan Agreement, which further amended the scheduled maturity date for the revolving line of credit from July 1, 2025 to July 1, 2026.

As of September 30, 2024, the Company had no outstanding borrowings under this credit line. As of December 31, 2023, the outstanding borrowings on this credit line were approximately $2.3 million. There were less than $0.1 million of unamortized debt issuance costs as of September 30, 2024 and December 31, 2023.

As of September 30, 2024, the Company was in compliance with its financial debt covenants under the Northern Trust Loan Agreement.

Refer to Note 11 - “Debt” in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information regarding the Company’s outstanding debt.

10. INCOME TAXES

Our interim effective tax rates reflect the estimated annual effective tax rates for 2024 and 2023 applied to year-to-date pretax income, adjusted for tax expense associated with certain discrete items. The effective tax rates for the three months ended September 30, 2024 and 2023 were 26.6% and 25.2%, respectively. The effective tax rates for the nine months ended September 30, 2024 and 2023 were 26.3% and 26.6%, respectively.

The increase in the effective tax rate for the three months ended September 30, 2024 compared to the prior year period was primarily attributable to the vesting of restricted stock awards and stock options in the prior year period.

The decrease in the effective tax rate for the nine months ended September 30, 2024 compared to the prior year period was primarily attributable to a decrease in non-deductible permanent differences.

11. DEFERRED COMPENSATION AWARDS

Stock-based compensation

Stock-based compensation related to option awards is measured based on the fair value of the award. The fair value of stock option awards is determined using a Black-Scholes option-pricing model. The Company recognizes compensation expense associated with the options over the vesting period.

2017 stock option grant

In August 2017, GWRI’s Board of Directors granted stock options to acquire 465,000 shares of GWRI’s common stock to employees throughout the Company. The options were granted with an exercise price of $9.40, the market price of the Company’s common shares on the NASDAQ Global Market at the close of business on August 10, 2017. The options are fully vested and expire 10 years from the grant date. As of August 2021, these options were fully expensed. As of September 30, 2024, 125,750 options have been exercised and 70,425 options have been forfeited with 268,825 options outstanding.

2019 stock option grant

In August 2019, GWRI’s Board of directors granted stock options to acquire 250,000 shares of GWRI’s common stock to employees throughout the Company. The options were granted with an exercise price of $11.26, the market price of the Company’s common shares on the NASDAQ Global Market at the close of business on August 13, 2019. The options are fully vested and expire 10 years from the grant date. As of August 2023, these options were fully expensed. Stock-based compensation expense of $20,000 and $92,000 was recorded for the three and nine months ended September 30, 2023, respectively. As of September 30, 2024, 55,994 options have been exercised and 63,770 options have been forfeited with 130,236 options outstanding.

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Restricted stock units

Restricted stock units are granted in the first quarter based on the prior year’s performance and vest over a three-year period. The units are credited quarterly using the closing price of the Company’s common stock on the applicable record date for the respective quarter. The following table details total awards granted and the number of units outstanding as of September 30, 2024, along with the amounts paid to holders of the restricted stock units (“RSUs”) for the three and nine months ended September 30, 2024 and 2023 (in thousands, except unit amounts):


			Three Months Ended September 30,				Nine Months Ended September 30,
Grant Date	Units Granted	Units Outstanding	2024		2023		2024		2023
Q1 2021	27,403	—	$	—	$	27	$	28	$	85
Q1 2022	22,262	1,778	21		23		67		70
Q1 2023	30,366	11,852	29		31		92		62
Q1 2024	30,962	22,706	31		—		64		—
Total	110,993	36,336	$	81	$	81	$	251	$	217

These are liability awards, so when the stock price decreases, cumulative compensation expense is reduced, which can lead to negative compensation expense in a given period. Based on GWRI’s closing share price on September 30, 2024 (the last trading date of the quarter), deferred compensation expense to be recognized over future periods is estimated for the years ending December 31 as follows (in thousands):


	RSUs
2024 (remaining period)	$	84
2025	246
2026	127

Total	$	457

Stock appreciation rights

Stock appreciation rights (“SARs”) were granted to certain members of management and are fully vested. The following table details the grant date, units granted, exercise price, outstanding units as of September 30, 2024 and amounts paid during the three and nine months ended September 30, 2024 and 2023 (in thousands, except unit and per unit amounts):


					Three Months Ended September 30,				Nine Months Ended September 30,
Grant Date	Units Granted	Exercise Price		Units Outstanding	2024		2023		2024		2023
Q1 2015(1)	299,000	$	4.26	12,500	$	—	$	—	$	—	$	165
Q1 2018(2)	33,000	$	8.99	8,250	—		—		—		—
Total	332,000			20,750	$	—	$	—	$	—	$	165

(1)The exercise price was determined to be the fair market value of one share of GWR Global Water Resources Corp. stock on the grant date of February 11, 2015.

(2)The exercise price was determined to be the fair market value of one share of GWRI stock on the grant date of March 12, 2018.

Restricted stock awards

On May 7, 2020, the Company’s stockholders approved the Global Water Resources, Inc. 2020 Omnibus Incentive Plan, which allows restricted stock awards as a form of compensation. A restricted stock award (“RSA”) represents the right to receive a share of the Company’s common stock. RSAs vest over two to three years, beginning on the date of the grant. The Company assumes that forfeitures will be minimal and recognizes forfeitures as they occur, which results in a reduction in compensation expense.

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During the three and nine months ended September 30, 2024, 9,537 RSAs were issued. During the three and nine months ended September 30, 2023, 6,000 RSAs were issued. The following table details the compensation expense related to the grant and partial vesting of previously granted RSAs for the three and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Compensation expense	$	55	$	200	$	450	$	737

12. SUPPLEMENTAL CASH FLOW INFORMATION

The following is supplemental cash flow information for the nine months ended September 30, 2024 and 2023 (in thousands):


	Nine Months Ended September 30,
	2024		2023
Supplemental cash flow information:
Cash paid for interest - net of amounts capitalized	$	3,114	$	2,343


Cash paid for income taxes	107		276
Non-cash financing and investing activities:
Capital expenditures included in accounts payable and accrued liabilities	3,417		2,251
Utility Plant constructed by developers and conveyed	10,831		11,276
Business acquisition through issuance of contingent consideration payable	—		1,330
Finance lease additions	604		94

13. COMMITMENTS AND CONTINGENCIES

Commitments

The Company has operating and finance leases for vehicles, office equipment, and office space. Refer to Note 4 – “Leases” in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information.

On February 1, 2023, the Company acquired all of the equity of Farmers Water Co., an operator of a water utility with service area in Pima County, Arizona. Under the terms of the purchase agreement, the Company is obligated to pay the seller a growth premium for each new account established within the specified growth premium areas. The estimated fair value of the remaining liability was $1.2 million and $1.3 million as of September 30, 2024 and December 31, 2023, respectively, and is included in Acquisition liabilities on the condensed consolidated balance sheets (unaudited).

On October 16, 2018, the Company completed the acquisition of GW-Red Rock, an operator of a water and a wastewater utility with service areas in the Pima and Pinal counties of Arizona. Under the terms of the purchase agreement, the Company is obligated to pay to the seller a growth premium for each new account established within specified growth premium areas. During the three months ended September 30, 2024, the Company revised the fair value of the estimated liability of the contingent consideration based on modified building plans from the landowners in the growth premium areas, which resulted in a net $0.1 million gain on remeasurement, which is included in Other, net on the condensed consolidated statements of operations (unaudited) for the three and nine months ended September 30, 2024. As of September 30, 2024, no meters have been installed and no accounts have been established in any of the specified growth premium areas. The estimated fair value of the remaining liability was $0.7 million and $0.8 million as of September 30, 2024 and December 31, 2023, respectively, and is included in Acquisition liabilities on the condensed consolidated balance sheets (unaudited).

Refer to Note 8 — “Fair Value” for additional information about contingent consideration.

The Company has previously received certain ICFA advances related to its CP Water utility, which the Company is obligated to repay in the form of specified future ICFA fee reductions when those ICFA fees are due. The liability was $0.9 million as of both September 30, 2024 and December 31, 2023 and is included in Acquisition liabilities on the condensed consolidated balance sheets (unaudited).

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Contingencies

From time to time, in the ordinary course of business, the Company may be subject to pending or threatened lawsuits in which claims for monetary damages are asserted. Management is not aware of any legal proceeding of which the ultimate resolution could materially affect the Company’s financial position, results of operations, or cash flows.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management’s discussion and analysis of Global Water Resources, Inc.’s (the “Company”, “GWRI”, “we”, or “us”) financial condition and results of operations (“MD&A”) relate to the three and nine months ended September 30, 2024 and should be read together with the consolidated financial statements and accompanying notes included in Part I, Item 1 of this report.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q are forward-looking in nature and may constitute “forward-looking information” within the meaning of applicable securities laws. Often, but not always, forward-looking statements can be identified by the words “believes”, “anticipates”, “plans”, “expects”, “intends”, “projects”, “estimates”, “objective”, “goal”, “focus”, “aim”, “should”, “could”, “may”, and similar expressions. These forward-looking statements include future estimates described in “Business Outlook”, “Factors Affecting our Results of Operations”, and “Liquidity and Capital Resources”. These forward-looking statements include, but are not limited to, statements about our strategies; expectations about future business plans, prospective performance, growth, and opportunities; future financial performance; regulatory and Arizona Corporation Commission (“ACC”) proceedings, decisions, and approvals, such as the anticipated benefits resulting from rate decisions, including any collective revenue increases due to new water and wastewater rates, our beliefs and expectations pertaining to ACC actions relating to our Southwest Plant, as well as the outcome and timing of our rate case and other applications with the ACC; our plans relating to future filings of our rate cases with the ACC; acquisition plans and our ability to complete additional acquisitions, including the anticipated acquisition of seven isolated public water systems from the City of Tucson and the expected increase in active water service connections resulting from such acquisition; population and growth projections; technologies, including expected benefits from implementing such technologies; revenues; metrics; operating expenses; trends relating to our industry, market, population and job growth, and housing permits; the adequacy of our water supply to service our current demand and growth for the foreseeable future; liquidity and capital resources; plans and expectations for capital expenditures; cash flows and uses of cash; dividends; depreciation and amortization; tax payments; our ability to repay indebtedness and invest in initiatives; the anticipated impact and resolutions of legal matters; the anticipated impact of new or proposed laws, including regulatory requirements, tax changes, and judicial decisions; and the anticipated impact of accounting changes and other pronouncements.

Forward-looking statements should not be read as a guarantee of future performance or results. They are based on numerous assumptions that we believe are reasonable, but they are open to a wide range of uncertainties and business risks. Consequently, actual results may vary materially from what is contained in a forward-looking statement. Investors are cautioned not to place undue reliance on forward-looking information. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including risks related to legal, regulatory, and legislative matters; risks related to our business and operations; risks related to market and financial matters; risk related to technology; risks related to the ownership of our common stock; and certain general risks, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. These and other factors are discussed in the risk factors described in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”) as updated from time to time in our subsequent filings with the Securities and Exchange Commission (the “SEC”). Additional risks and uncertainties include, but are not limited to, whether all conditions precedent in the asset purchase agreement to acquire the seven isolated public water systems from the City of Tucson will be satisfied, including the receipt of ACC approval, and other risks to consummation of the acquisition, including circumstances that could give rise to the termination of the asset purchase agreement and the risk that the transaction will not be consummated without undue delay, cost or expense, or at all. Any forward-looking statement speaks only as of the date of this report. Except as required by law, we undertake no obligation to publicly release the results of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Overview

GWRI is a water resource management company that owns, operates, and manages thirty-two water, wastewater, and recycled water systems in strategically located communities, principally in metropolitan Phoenix and Tucson, Arizona. The Company seeks to deploy an integrated approach, referred to as “Total Water Management.” Total Water Management is a comprehensive approach to water utility management that reduces demand on scarce non-renewable water sources and costly renewable water supplies, in a manner that ensures sustainability and greatly benefits communities both environmentally and economically. This approach employs a series of principles and practices that can be tailored to each community:

•Reuse of recycled water, either directly or to non-potable uses, through aquifer recharge, or possibly direct potable reuse in the future;

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•Regional planning;

•Use of advanced technology and data;

•Employing respected subject matter experts and retaining thought and application leaders;

•Leading outreach and educational initiatives to ensure all stakeholders including customers, development partners, municipalities, regulators, and utility staff are knowledgeable on the principles and practices of the Total Water Management approach; and

•Establishing partnerships with communities, developers, and industry stakeholders to gain support of the Total Water Management principles and practices.

Business Outlook

We continue to experience an increasing rate of organic growth evidenced by our year over year organic increase in active connections (i.e., exclusive of acquisition related growth) of 4.7% as of September 30, 2024 as compared to 2.6% for the same period in 2023. According to the most recent U.S. Census estimates, the Phoenix metropolitan statistical area (“MSA”) is the 10th largest MSA in the U.S. and had an estimated population of 5.1 million, an increase of 4.6% over the 4.8 million people reported in the 2020 Census. Metropolitan Phoenix continues to grow due to its favorable employment opportunities, excellent weather, large and growing universities, a diverse employment base, and low taxes. The Employment and Population Statistics Department of the State of Arizona predicts that the Phoenix metropolitan area will have a population of 5.8 million people by 2030 and 6.5 million by 2040. Arizona’s job growth increased by 2.2% during the first nine months of 2024 as compared to the same period for the prior year, ranking the state in the top ten nationally as of September 30, 2024.

According to the W.P. Carey School of Business Greater Phoenix Blue Chip Real Estate Consensus Panel (the “Greater Phoenix Blue Chip Panel”), interest rate shock negatively impacted permit activity in the Phoenix metropolitan area, particularly between July 2022 and June 2023. Further, the Greater Phoenix Blue Chip Panel concluded that the subsequent recovery from that interest rate shock resulted in permit activity increasing by more than 44% in the first five months of 2024. The Greater Phoenix Blue Chip Panel anticipates single family permit growth by more than 27% for 2024 as a whole. Further, single family permits in the City of Maricopa increased 13% for the nine months ended September 30, 2024 as compared to the same period in the prior year. Management believes that we are well-positioned to benefit from the growth expected in the Phoenix metropolitan area due to the availability of lots, existing infrastructure in place within our service areas, and increased activity related to multi-family developments.

Factors Affecting our Results of Operations

Our financial condition and results of operations are influenced by a variety of industry-wide factors, including but not limited to:

•population and community growth;

•economic and environmental utility regulation;

•economic environment;

•the need for infrastructure investment;

•production and treatment costs;

•weather and seasonality; and

•access to and quality of water supply.

We are subject to economic regulation by the state regulator, the ACC. The U.S. federal and state governments also regulate environmental, health and safety, and water quality matters. We continue to execute on our strategy to optimize and focus the Company in order to provide greater value to our customers and shareholders by aiming to deliver predictable financial results, making prudent capital investments, and focusing our efforts on earning an appropriate rate of return on our investments.

Population and Community Growth

Population and community growth in the metropolitan Phoenix area served by our utilities have a direct impact on our earnings. An increase or decrease in our active service connections will affect our revenues and variable expenses in a corresponding manner. As of September 30, 2024, active service connections increased 2,853, or 4.7%, to 63,889 compared to 61,036 active service connections as of September 30, 2023, primarily due to organic growth in our service

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areas. Approximately 89.6% of the 63,889 active service connections are serviced by our Global Water - Santa Cruz Water Company, Inc. (“GW-Santa Cruz”) and Global Water - Palo Verde Utilities Company, Inc. (“GW-Palo Verde”) utilities as of September 30, 2024.

The graph below presents the historical change in active connections for our ongoing operations over the past five years.

Economic and Environmental Utility Regulation

We are subject to extensive regulation of our rates by the ACC, which is charged with establishing rates based on the provision of reliable service at a reasonable cost while also providing an opportunity to earn a fair rate of return on rate base for investors of utilities. The ACC uses a historical test year to evaluate whether the plant in service is used and useful, to assess whether costs were prudently incurred, and to set “just and reasonable” rates. Rate base is typically the depreciated original cost of the plant in service (net of contributions in aid of construction (“CIAC”) and advances in aid of construction (“AIAC”) which are funds or property provided to a utility under the terms of a main extension agreement, the value of which may be refundable), that has been determined to have been “prudently invested” and “used and useful”, although the reconstruction cost of the utility plant may also be considered in determining the rate base. The ACC also decides on an applicable capital structure based on actual or hypothetical analyses. The ACC determines a “rate of return” on that rate base, which includes the approved capital structure and the actual cost of debt and a fair and reasonable cost of equity based on the ACC’s judgment. The overall revenue requirement for rate making purposes is established by multiplying the rate of return by the rate base and adding reasonably incurred operating expenses for the test year, depreciation, and any applicable pro forma adjustments.

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To ensure an optimal combination of access to water and water conservation balanced with a fair rate of return for investors, our water utility operating revenue is based on two components: a fixed fee and a consumption or volumetric fee. For our water utilities, the fixed fee, or “basic service charge,” provides access to water for residential usage and has generally been set at a level to produce approximately 50% of total water revenue. The volumetric fee is based on the total volume of water supplied to a given customer after the minimum number of gallons, if any, covered by the basic service charge, multiplied by a price per gallon set by a tariff approved by the ACC. A discount to the volumetric rate applies for customers that use less than an amount specified by the ACC. For all investor-owned water utilities, the ACC has, as a policy matter, required the establishment of inverted tier conservation-oriented rates, meaning that the price of water increases as consumption increases. For wastewater utilities, wastewater collection and treatment can be based on volumetric or fixed fees. Our wastewater service is billed based solely on a fixed fee, determined by the size of the water meter installed. Recycled water is sold on a volumetric basis with no fixed fee component.

We are required to file rate cases with the ACC to obtain approval for a change in rates. Rate cases and other rate-related proceedings can take a year or more to complete. As a result, there is frequently a delay, or regulatory lag, between the time of a capital investment or incurrence of an operating expense increase and when those costs are reflected in rates. We believe it is common industry practice to file for a rate increase every three to five years. Refer to “—Rate Case and Regulatory Activity” below and Note 2 – “Regulatory Decision and Related Accounting and Policy Changes” of the Notes to the Condensed Consolidated Financial Statements (unaudited) included in Part I, Item 1 of this report for additional information.

Additionally, our water and wastewater utility operations are subject to extensive regulation by U.S. federal, state, and local regulatory agencies that enforce environmental, health, and safety requirements, which affect all of our regulated subsidiaries. Environmental, health and safety, and water quality regulations are complex, change frequently, and have tended to become more stringent over time. Although it is difficult to project the ultimate costs of complying with pending or future requirements, we do not expect requirements under current regulations to have a material impact on our operations or financial condition, though it is possible new methods of treating drinking water may be required if additional regulations become effective in the future.

On April 10, 2024, the U.S. Environmental Protection Agency (“EPA”) finalized the National Primary Drinking Water Regulation (“NPDWR”) establishing legally enforceable levels, called maximum contaminant levels (“MCLs”), for six per- and polyfluoroalkyl substances or compounds (“PFAS”) in drinking water. The EPA also finalized health-based, non-enforceable maximum contaminant level goals for these PFAS. The final rule requires that public water systems, such as the Company, must monitor for these PFAS and have three years to complete initial monitoring, followed by ongoing compliance monitoring. Public water systems must also provide the public with information on the levels of these PFAS in their drinking water beginning in 2027. Public water systems have until 2029 to implement solutions that reduce these PFAS if monitoring shows that drinking water levels exceed the applicable MCLs. Beginning in 2029, public water systems that have PFAS in drinking water which violate one or more of these MCLs must take action to reduce levels of these PFAS in their drinking water and must provide notification to the public of the violation.

We are committed to compliance with the NPDWR and are in process of complying with the first requirement of the rule mandating initial monitoring for all of our utilities. The Company expects that compliance with the NPDWR will require increased capital expenditures for PFAS-contaminated water treatment and other operating costs. If other newer or stricter standards are introduced in the future, they could also increase our operating expenses. We generally expect to recover expenses associated with compliance for environmental and health and safety standards through rate increases, but this recovery may be affected by regulatory lag.

Capital expenditures and operating costs required as a result of water quality standards have been traditionally recognized by the ACC as appropriate for inclusion in establishing rates or in a separate surcharge.

In April 2024, the federal Judicial Panel on Multidistrict Litigation approved the consolidation of approximately 500 separate cases against multiple defendant manufacturers into a single multi-district civil class action lawsuit known as Aqueous Film-Forming Foams (“AFFF”) Products Liability Litigation MDL No. 2873 (the “AFFF MDL”). The AFFF MDL was filed in the U.S. District Court for the District of South Carolina (the “Court”) and is intended to resolve claims associated with PFAS contamination in water systems from the manufacture and widespread use of AFFF, which is believed to be a significant source of PFAS contamination in water systems. AFFF containing PFAS (and until 2002, perfluorooctanoic acid (“PFOA”), a related compound) was widely used in fire suppression systems, firefighting vehicles, and at fire training facilities nationwide. The Company is in the class of plaintiffs in the AFFF MDL, and settlement talks continue to progress with several defendants. Any settlement reached in the AFFF MDL will be subject to the final approval of the Court. There can be no assurance as to the outcome of the AFFF MDL, including any decision or resolution thereof, timing, or the ultimate amounts, if any, involved.

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In October 2024, the EPA announced a final rule requiring drinking water systems to identify and replace lead pipes within ten years. In accordance with the 2021 Lead and Copper Rule Revision and in connection with the 2024 Lead and Copper Rule Improvements, the Company has conducted an inventory of its pipes. The inventory has been substantially completed and found no lead pipes in our water systems. While the Company is evaluating the full impact of this new rule, we do not believe it will have a material impact on our results of operations.

Infrastructure Investment

Capital expenditures for infrastructure investment are a component of the rate base on which our regulated utility subsidiaries are allowed to earn an equity rate of return. Capital expenditures for infrastructure provide a basis for earnings growth by expanding our “used and useful” rate base, which is a component of our permitted return on investment and revenue requirement. We are generally able to recover a rate of return on these capital expenditures (return on equity and debt), together with debt service and certain operating costs, through the rates we charge.

We have an established capital improvement plan to make targeted capital investments to repair and replace existing infrastructure as needed, address operating redundancy requirements, improve our overall financial performance and expand our infrastructure in areas where growth is occurring.

Production and Treatment Costs

Our water and wastewater service requires significant production resources and therefore results in significant production costs. Although we are permitted to recover these costs through the rates we charge, regulatory lag can decrease our margins and earnings if production costs or other operating expenses increase significantly before we are able to recover them through increased rates. Our most significant costs include labor, chemicals used to treat water and wastewater, and power used to operate pumps and other equipment. Power and chemical costs can be volatile. However, we employ a variety of technologies and methodologies to minimize costs and maximize operational efficiencies.

Weather and Seasonality

Our ability to meet the existing and future water demands of our customers depends on an adequate supply of water. Drought, overuse of sources of water, the protection of threatened species or habitats, or other factors may limit the availability of ground and surface water.

Also, customer usage of water and recycled water is affected by weather conditions, particularly during the summer. Our water systems generally experience higher demand in the summer due to the warmer temperatures and increased usage by customers for irrigation and other outdoor uses. However, summer weather that is cooler or wetter than average generally suppresses customer water demand and can have a downward effect on our operating revenue and operating income. Conversely, when weather conditions are extremely dry, our business may be affected by government-issued drought-related warnings and/or water usage restrictions that would artificially lower customer demand and reduce our operating revenue.

The limited geographic diversity of our service areas makes the results of our operations more sensitive to the effect of extreme weather patterns. The second and third quarters of the year are generally those in which water service revenue and wastewater service revenue are highest. For additional information and risks associated with weather and seasonality, see “Risk Factors,” included in Part I, Item 1A of the 2023 Form 10-K.

Access to and Quality of Water Supply

In many areas of Arizona (including certain areas that we service), water supplies are limited and, in some cases, current usage rates exceed sustainable levels for certain water resources. We currently rely predominantly (and are likely to continue to rely) on the pumping of groundwater and the generation and delivery of recycled water for non-potable uses to meet future demands in our service areas. At present, groundwater (and recycled water derived from groundwater) is the primary water supply available to us. In addition, regulatory restrictions on the use of groundwater and the development of groundwater wells, lack of available water rights, drought, overuse of local or regional sources of water, protection of threatened species or habitats, or other factors, including climate change, may limit the availability of ground or surface water. Additionally, in the majority of the Phoenix Active Management Area, the Arizona Department of Water Resources (“ADWR”) has paused the issuance of new certificates of assured water supply based on groundwater and paused modifications of any designations of assured water supply for the increase in groundwater. Approximately 1.76% of the

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Company’s water connections are located within the Phoenix Active Management Area. We believe that we have an adequate supply of water to service our current demand and growth for the foreseeable future in our service areas. For additional information and risks associated with the access to and quality of water supply, see “Risk Factors,” included in Part I, Item 1A of the 2023 Form 10-K.

Farmers Designation of Assured Water Supply (“DAWS”)

The Company’s GW-Farmers utility filed a DAWS application with the ADWR on June 30, 2023 to facilitate future growth in the utility’s service area. The Company anticipates a final decision from the ADWR in the fourth quarter of 2024.

Recent Rate Case and Regulatory Activity

Below is a summary of certain rate case and regulatory activity. Refer to Note 2 – “Regulatory Decision and Related Accounting and Policy Changes” of the Notes to the Condensed Consolidated Financial Statements (unaudited) included in Part I, Item 1 of this report for additional information regarding the Company’s rate case and regulatory activity.

2024 Farmers Rate Case

On June 27, 2024, Global Water-Farmers Water Company, Inc. (“GW-Farmers”), one of the Company’s regulated utilities, filed a rate case application with the ACC for increased water rates based on a 2023 test year with updates for changes in post-test year plant through December 31, 2024. The application requests, among other things, a revenue increase of approximately $1.3 million phased-in over two periods as well as recovery of the acquisition premium related to our Farmers Water Co. acquisition. On July 25, 2024, ACC Utilities Division Staff determined our application to be administratively complete and estimates its testimony regarding the application will be filed in early December 2024. There can be no assurance that the ACC will approve the requested rate increase or the requested recovery of the acquisition premium, and the ACC could take other actions as a result of the rate case. Further, it is possible that the ACC may determine to decrease future rates.

Acquisition of Seven Systems from City of Tucson

2025 Santa Cruz and Palo Verde Rate Case

During the fourth quarter of 2023, the Company notified the ACC of its intention to file a rate case for GW-Santa Cruz and GW-Palo Verde in 2025. The GW-Santa Cruz and GW-Palo Verde rate case is anticipated to be based on a test year ending December 31, 2024 with updates for changes in post-test year plant. There can be no assurance, however, that the ACC will approve the application as submitted and the ACC could take other actions regarding the application.

Certificate of Convenience & Necessity Extension - Maricopa Business Park

In May 2024, the Company’s GW-Santa Cruz and GW-Palo Verde utilities filed an application with the ACC for a CC&N extension. The Administrative Law Judge issued a Recommended Opinion and Order on October 18, 2024, which is scheduled to be heard by the ACC at the November 6, 2024 open meeting.

Southwest Plant Accounting Order and Bill Credit

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of customer rates in Decision No. 71878 (September 15, 2010). Those costs were also included as “plant in service” in Decision No. 74364 (February 26, 2014) and Decision No. 78644 (July 27, 2022). The Company disclosed this circumstance to the ACC on March 1, 2024, and on April 25, 2024, GW-Palo Verde filed an application with the ACC requesting a monthly bill credit for customers that would be in place until the conclusion of the next GW-Palo Verde rate case. The ACC issued Decision No. 79424 on July 18, 2024 approving the bill credit with an effective date of August 1, 2024, which will reduce revenue earned subsequent to the order by approximately $570,000 annually. The bill credit will be in place until the conclusion of the next GW-Palo Verde rate case, which Decision No. 79424 requires GW-Palo Verde to file no later than December 31, 2025. The ACC may take further action during the next GW-Palo Verde rate case. Such action may include requiring the Company to reduce rates further going forward or taking other actions that would be unfavorable to the Company.

Decision No. 79383 - Issued June 20, 2024 - Saguaro Rate Case

On June 20, 2024, the ACC issued Decision No. 79383 relating to each of the rate case applications filed by seven of the Company’s regulated utilities for increased water rates based on a 2022 test year. Decision No. 79383 approved, among other things, a collective annual revenue increase of approximately $351,000. The approved rates will be phased-in over five periods with the first increase effective July 1, 2024. The subsequent four increases will be effective on January 1 of each subsequent year, with the majority of the revenue increase phased in by January 1, 2025. To the extent that the number of active service connections has increased and continues to increase from 2022 levels, the additional revenues may be greater than the amount set forth above. On the other hand, if active connections decrease or the Company experiences declining usage per customer, the Company may not realize all of the anticipated revenues.

The ACC also approved: (i) the consolidation of water rates to one single rate for these utilities; (ii) acquisition premiums relating to the Company’s acquisitions of its Global Water-Mirabell Water Company, Inc. (“GW-Mirabell”), Global Water-Lyn Lee Water Company, Inc. (“GW-Lyn Lee”), Global Water-Francesca Water Company, Inc. (“GW-Francesca”), Global Water-Tortolita Water Company, Inc. (“GW-Tortolita”), Global Water-Rincon Water Company, Inc. (“GW-Rincon”), and Global Water-Las Quintas Serenas Water Company, Inc. (“GW-Las Quintas Serenas”) utilities, each located in Pima County, which increase the rate base for such utilities and result in an increase in the annual collective revenue requirement; (iii) the Company’s ability to annually adjust rates to flow through certain changes in tax expense, primarily related to income taxes, without the necessity of a rate case proceeding; (iv) a sustainable water surcharge, which will allow semiannual surcharges to be added to customer bills based on verified costs of new water resources; (v) a capital structure matching the Company’s previous rate case of 55% equity with a 9.6% return on equity; and (vi) a depreciation expense accounting deferral for GW-Rincon.

Decision No. 78644 - Issued July 27, 2022

Recent Acquisition Activity

Asset Purchase Agreement with City of Tucson

Effective April 25, 2024, Global Water - Ocotillo Water Company, Inc. (“GW-Ocotillo”), formerly Global Water - 2024 Acquisition A, Inc. and a wholly owned subsidiary of the Company, entered into an asset purchase agreement with the City of Tucson, pursuant to which GW-Ocotillo will acquire seven isolated public water systems from the City of Tucson serving approximately 2,200 water service connections in an all-cash transaction for a purchase price of $8.4 million. The isolated public water systems are located in and around Pima County. The Company expects to complete the acquisition in the first quarter of 2025, subject to customary closing conditions and approval by the ACC. The estimated rate base of the seven water systems is approximately $7.8 million.

Farmers Water Co. Acquisition

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Segment Reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. In consideration of the Financial Accounting Standards Board’s Accounting Standards Codification 280, Segment Reporting, the Company is not organized around specific products and services, geographic regions, or regulatory environments. The Company currently operates in one geographic region within the State of Arizona, wherein each operating utility operates within the same regulatory environment.

While the Company reports revenue, disaggregated by service type, on the face of its condensed consolidated financial statements (unaudited), the Company does not manage the business based on any performance measure at the individual revenue stream level. The Company does not have any customers that contribute more than 10% to the Company’s revenues or revenue streams. Additionally, the chief operating decision maker uses consolidated financial information to evaluate performance, which is the same basis on which he communicates results and performance to the Company’s board of directors. It is upon this consolidated basis from which he bases all significant decisions regarding the allocation of the Company’s resources on a consolidated level. Based on the information described above and in accordance with the applicable literature, management has concluded that the Company is currently organized and operated as one operating and reportable segment.

Comparison of Results of Operations for the Three Months Ended September 30, 2024 and 2023

The following table summarizes results of operations for the three months ended September 30, 2024 and 2023 (in thousands, except for share amounts):


	Three Months Ended September 30,
	2024		2023
Revenues	$	14,321	$	14,532
Operating expenses	10,337		10,695
Operating income	3,984		3,837
Total other income (expense)	2		(315)
Income before income taxes	3,986		3,522
Income tax expense	(1,061)		(888)
Net income	$	2,925	$	2,634

Basic earnings per common share	$	0.12	$	0.11
Diluted earnings per common share	$	0.12	$	0.11

Revenues – The following table summarizes revenues for the three months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,
	2024		2023
Water service	$	7,493	$	7,520
Wastewater and recycled water service	6,828		6,494
Unregulated revenues	—		518
Total revenues	$	14,321	$	14,532

Total revenues decreased $0.2 million, or 1.5%, to $14.3 million for the three months ended September 30, 2024 compared to $14.5 million for the three months ended September 30, 2023. The decrease in revenue was primarily attributable to the recognition of $0.5 million in infrastructure coordination and financing agreement (“ICFA”) related revenue during the prior year period that did not recur in the current period, partially offset by an increase of $0.3 million in regulated revenue primarily attributable to the increase in wastewater and recycled water service revenue largely as a result of a 5.0% increase in active wastewater connections.

Water Service – Water service revenue was $7.5 million for both the three months ended September 30, 2024 and 2023.

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Water service revenue associated with the basic service charge, excluding miscellaneous charges, increased $0.2 million, or 5.1%, to $3.4 million for the three months ended September 30, 2024 compared to $3.2 million for the three months ended September 30, 2023. The increase was primarily due to the 4.4% growth in active water connections and a rate increase resulting from the Saguaro Rate Case that was effective August 1, 2024.

Active water connections increased 4.4% to 35,464 as of September 30, 2024 from 33,976 as of September 30, 2023, primarily due to organic growth in our service areas.

Water service revenue based on consumption decreased $0.1 million, or 4.3%, to $4.0 million for the three months ended September 30, 2024 compared to $4.1 million for the three months ended September 30, 2023. The moderate decrease in revenue was primarily the result of reduced consumption in irrigation and construction customers, all partially offset by a rate increase from the Saguaro Rate Case that was effective August 1, 2024 and the organic growth discussed above.

Water consumption was consistent at 1.3 billion gallons for both the three months ended September 30, 2024 and 2023. The consumption decreases in irrigation, commercial and construction customers were largely offset by consumption increases in residential, multi-family and lake customers.

Wastewater and Recycled Water Service – Wastewater and recycled water service revenue increased $0.3 million, or 5.1%, to $6.8 million for the three months ended September 30, 2024 compared to $6.5 million for the three months ended September 30, 2023.

Wastewater service revenue increased $0.2 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, driven by a 5.0% increase in active wastewater connections from 27,060 as of September 30, 2023 to 28,425 as of September 30, 2024.

Recycled water service revenue, which is based on the volume of recycled gallons delivered, increased $0.1 million, or 29.4%, to $0.6 million for the three months ended September 30, 2024 compared to $0.5 million for the three months ended September 30, 2023. The increase was primarily driven by a 309.2 million gallon, or 113.8%, increase in consumption during the period.

The increase in wastewater and recycled water service revenue was partially offset by $0.1 million in bill credits related to the Company’s Southwest Plant. Refer to Note 2 - “Regulatory Decision and Related Accounting and Policy Changes” of the Notes to the Condensed Consolidated Financial Statements (unaudited) included in Part I, Item 1 of this report for additional information.

Operating Expenses – The following table summarizes operating expenses for the three months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,
	2024		2023
Operations and maintenance	$	3,444	$	3,587
General and administrative	3,960		3,923
Depreciation and amortization	2,933		3,185
Total operating expenses	$	10,337	$	10,695

Operations and Maintenance – Operations and maintenance costs, consisting of personnel costs, production costs (primarily chemicals and purchased electrical power), maintenance costs, and property tax, decreased $0.2 million, or 4.0%, to $3.4 million for the three months ended September 30, 2024 compared to $3.6 million for the three months ended September 30, 2023.

Total personnel expenses decreased $0.1 million, or 10.9%, to $1.1 million for the three months ended September 30, 2024 compared to $1.2 million for the three months ended September 30, 2023. The decrease in personnel expenses was primarily related to a decrease of 51.7% in medical insurance expenses and a 2.3% decrease in salary and wages.

General and Administrative – General and administrative costs include the day-to-day expenses of office operations, personnel costs, legal and other professional fees, insurance, rent, and regulatory fees. These costs increased less than $0.1 million, 0.9%, to $4.0 million for the three months ended September 30, 2024 compared to $3.9 million for the three months ended September 30, 2023.

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Total personnel expenses increased $0.2 million, or 7.8%, to $2.1 million for the three months ended September 30, 2024 compared to $1.9 million for the three months ended September 30, 2023. The increase was primarily related to higher hiring and relocation costs and deferred compensation expense, partially offset by lower medical insurance expenses. Refer to Note 11 — “Deferred Compensation Awards” of the Notes to the Condensed Consolidated Financial Statements (unaudited) included in Part I, Item 1 of this report for additional information.

Board compensation expense increased $0.2 million, to $0.2 million for the three months ended September 30, 2024 compared to board compensation income of less than $0.1 million for the three months ended September 30, 2023. The increase in expense was a direct result of the change in the stock price impacting certain equity-like awards (i.e., the stock price increased $0.49 during the three months ended September 30, 2024 as compared to a $3.19 decrease during the three months ended September 30, 2023). Refer to Note 11 — “Deferred Compensation Awards” of the Notes to the Condensed Consolidated Financial Statements (unaudited) included in Part I, Item 1 of this report for additional information.

These increases were partially offset by:

Information technology (“IT”) expenses decreased $0.1 million, or 48.6%, to $0.2 million for the three months ended September 30, 2024 compared to $0.3 million for the three months ended September 30, 2023. The decrease was primarily the result of lower costs for IT service agreements.

Professional fees decreased $0.1 million, or 25.8%, to $0.4 million for the three months ended September 30, 2024 compared to $0.5 million for the three months ended September 30, 2023. The decrease was primarily related to lower legal fees associated with acquisition activity.

Depreciation and amortization - Depreciation and amortization expense decreased $0.3 million, or 7.9%, to $2.9 million for the three months ended September 30, 2024, compared to $3.2 million for the three months ended September 30, 2023. The decrease was primarily driven by lower amortization of an intangible asset related to acquired ICFAs that did not recur in the same period in 2024, partially offset by additional depreciation expense recorded as a direct result of the increase in fixed assets.

Other Income (Expense) – Other income was immaterial for the three months ended September 30, 2024 compared to other expense of $0.3 million for the three months ended September 30, 2023. The increase in other income (expense) was primarily related to a $0.2 million increase in income associated with Buckeye growth premiums as a result of additional new meter connections in the area as well as a $0.1 million gain related to adjustments to our estimated contingent consideration liability. Interest income also increased $0.2 million compared to the three months ended September 30, 2023, which was mostly offset by an increase in interest expense primarily related to the senior secured notes issued in January 2024 (refer to “—Liquidity and Capital Resources—Recent Financing Activity” below for additional information).

Income Tax Expense – Income tax expense of $1.1 million was recorded for the three months ended September 30, 2024 compared to income tax expense of $0.9 million for the three months ended September 30, 2023. The primary driver for the change was the increase in pre-tax income for three months ended September 30, 2024.

Net Income – The increase in net income of $0.3 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was a result of the items discussed above.

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Comparison of Results of Operations for the Nine Months Ended September 30, 2024 and 2023

The following table summarizes results of operations for the nine months ended September 30, 2024 and 2023 (in thousands, except for share amounts):


	Nine Months Ended September 30,
	2024		2023
Revenues	$	39,441	$	40,660
Operating expenses	31,393		30,036
Operating income	8,048		10,624
Total other expense	(793)		(1,301)
Income before income taxes	7,255		9,323
Income tax expense	(1,909)		(2,484)
Net income	$	5,346	$	6,839

Basic earnings per common share	$	0.22	$	0.28
Diluted earnings per common share	$	0.22	$	0.28

Revenues – The following table summarizes revenues for the nine months ended September 30, 2024 and 2023 (in thousands):


	Nine Months Ended September 30,
	2024		2023
Water service	$	19,387	$	18,916
Wastewater and recycled water service	20,054		18,958
Unregulated revenues	—		2,786
Total revenues	$	39,441	$	40,660

Total revenues decreased approximately $1.3 million, or 3.0%, to $39.4 million for the nine months ended September 30, 2024 compared to $40.7 million for the nine months ended September 30, 2023. The decrease in revenue was primarily attributable to the recognition of $2.8 million in ICFA related revenue during the nine months ended September 30, 2023 that did not recur in the current period, partially offset by a $1.6 million increase in regulated revenue primarily from organic connection growth.

Water Service – Water service revenue increased $0.5 million, or 2.5%, to $19.4 million for the nine months ended September 30, 2024 compared to $18.9 million for the nine months ended September 30, 2023.

Water service revenue associated with the basic service charge, excluding miscellaneous charges, increased $0.6 million, or 6.7%, to $10.2 million for the nine months ended September 30, 2024 compared to $9.6 million for the nine months ended September 30, 2023.

Active water connections increased 4.4% to 35,464 as of September 30, 2024 from 33,976 as of September 30, 2023, primarily due to organic growth in our service areas.

Water service revenue based on consumption decreased $0.1 million to $8.8 million for the nine months ended September 30, 2024 from $8.9 million for the nine months ended September 30, 2023. While there was a moderate increase in overall water consumption, the increase consisted largely of lower rate water usage, primarily for residential customers. However, lower consumption of higher rate water usage, particularly for construction and irrigation, resulted in an overall decrease in water service revenue based on consumption.

Water consumption increased 0.7% to 3.12 billion gallons for the nine months ended September 30, 2024 compared to 3.10 billion for the nine months ended September 30, 2023.

Wastewater and Recycled Water Service – Wastewater and recycled water service revenue increased $1.1 million, or 5.8%, to $20.1 million for the nine months ended September 30, 2024 compared to $19.0 million for the nine months ended September 30, 2023. The increase was primarily driven by higher wastewater service revenue of $1.0 million resulting from the 5.0% increase in active wastewater connections from 27,060 as of September 30, 2023 to 28,425 as of September 30, 2024.

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Recycled water service revenue, which is based on the number of gallons delivered and directly impacted by wastewater volume, was $1.1 million for both the nine months ended September 30, 2024 and 2023. The volume of recycled water delivered increased by 40.2% with 882 million gallons delivered for the nine months ended September 30, 2024 compared to 629 million gallons delivered for the nine months ended September 30, 2023.

Operating Expenses – The following table summarizes operating expenses for the nine months ended September 30, 2024 and 2023 (in thousands):


	Nine Months Ended September 30,
	2024		2023
Operations and maintenance	$	10,213	$	9,557
General and administrative	12,317		11,934
Depreciation and amortization	8,863		8,545
Total operating expenses	$	31,393	$	30,036

Operations and Maintenance – Operations and maintenance costs, consisting of personnel costs, production costs (primarily chemicals and purchased electrical power), maintenance costs, and property tax, increased approximately $0.6 million, or 6.9%, to $10.2 million for the nine months ended September 30, 2024 compared to $9.6 million for the nine months ended September 30, 2023.

Total personnel expenses increased approximately $0.3 million, or 9.1%, to $3.6 million for the nine months ended September 30, 2024 compared to $3.3 million for the nine months ended September 30, 2023. The increase was primarily attributable to the increased medical costs of $0.1 million, an increase in headcount, and an increase in hiring and relocation costs.

Utility power and related expenses increased $0.1 million to $2.2 million for the nine months ended September 30, 2024 compared to $2.1 million for the same period in 2023. The additional power costs were attributable to pump usage for the increase in connections from organic growth.

Repairs and maintenance expenses increased $0.1 million to $0.3 million for the nine months ended September 30, 2024 compared to $0.2 million for the same period in 2023. The increased repairs and maintenance costs were primarily attributable to planned equipment maintenance.

General and Administrative – General and administrative costs include the day-to-day expenses of office operations, personnel costs, legal and other professional fees, insurance, rent, and regulatory fees. These costs increased $0.4 million, or 3.2%, to $12.3 million for the nine months ended September 30, 2024 compared to $11.9 million for the nine months ended September 30, 2023.

Personnel related costs increased $0.4 million, or 6.1%, to $6.5 million for the nine months ended September 30, 2024 compared to $6.1 million for the nine months ended September 30, 2023. The increase was primarily related to higher salary and wages as a result of an increase in headcount, increased hiring and relocation costs, partially offset by decreased deferred compensation expense of $0.1 million. Refer to Note 11 — “Deferred Compensation Awards” of the Notes to the Condensed Consolidated Financial Statements (unaudited) included in Part I, Item 1 of this report for additional information.

Board compensation expense increased $0.2 million, or 116.4%, to $0.4 million for the nine months ended September 30, 2024 compared to board compensation income of $0.2 million for the nine months ended September 30, 2023. The change in board compensation expense was a direct result of the change in the stock price impacting certain equity-like awards (i.e., the stock price decreased $0.49 during the nine months ended September 30, 2024 as compared to a decrease of $3.40 during the nine months ended September 30, 2023). Refer to Note 11 — “Deferred Compensation Awards” of the Notes to

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the Condensed Consolidated Financial Statements (unaudited) included in Part I, Item 1 of this report for additional information.

These increases were partially offset by:

Professional fees decreased $0.2 million, or 14.1%, to $1.3 million for the nine months ended September 30, 2024 compared to $1.5 million for the nine months ended September 30, 2023. The decrease was primarily related to lower legal fees associated with acquisition activity.

Depreciation and amortization - Depreciation and amortization expense increased $0.4 million, or 3.7%, to $8.9 million for the nine months ended September 30, 2024 compared to $8.5 million for the nine months ended September 30, 2023. The increase was primarily driven by additional depreciation expense recorded as a direct result of the increase in fixed assets, partially offset by lower amortization of an intangible asset related to acquired ICFAs that did not occur in the same period in 2024.

Other Expense – Other expense totaled $0.8 million for the nine months ended September 30, 2024 compared to $1.3 million for the nine months ended September 30, 2023. The decrease of $0.5 million in other expense was related to a $0.6 million increase in income associated with Buckeye growth premiums as a result of additional new meter connections in the area and a $0.7 million increase in interest income, partially offset by an increase in interest expense of $0.9 million primarily related to the senior secured notes issued in January 2024.

Income Tax Expense – Income tax expense of $1.9 million was recorded for the nine months ended September 30, 2024 compared to $2.5 million for the nine months ended September 30, 2023. The primary driver for the change was the higher pre-tax income for the nine months ended September 30, 2023 related to the ICFA revenue recognized during that period that did not recur in 2024.

Net Income – Net income totaled $5.3 million for the nine months ended September 30, 2024 compared to net income of $6.8 million for the nine months ended September 30, 2023. The $1.5 million decrease was the result of the items discussed above.

Outstanding Share Data

As of November 5, 2024, there were 24,221,626 shares of the Company’s common stock outstanding and stock-based awards outstanding to acquire an additional 399,061 shares of the Company’s common stock.

Liquidity and Capital Resources

The Company’s capital resources are provided by internally generated cash flows from operations as well as debt and equity financing. Additionally, its regulated utility subsidiaries receive advances and contributions from customers, home builders, and real estate developers to partially fund construction necessary to extend service to new areas. The Company uses capital resources primarily to:

•fund operating costs;

•fund capital requirements, including construction expenditures;

•make debt and interest payments;

•fund acquisitions; and

•pay dividends.

The Company’s utility subsidiaries operate in rate-regulated environments in which the amount of new investment recovery may be limited. Such recovery will take place over an extended period of time because recovery through rate increases is subject to regulatory lag.

As of September 30, 2024, the Company has no notable near-term cash expenditures, other than the anticipated acquisition of seven isolated public water systems from the City of Tucson and the principal payments for its Series B Notes (as defined below) in the amount of $1.9 million due in both December 2024 and June 2025. While specific facts and circumstances could change, the Company believes that with the cash on hand and the ability to draw on its $15.0 million revolving line of credit, it will be able to generate sufficient cash flows to meet its operating cash flow requirements and capital expenditure plan, including for any strategic acquisitions, as well as remain in compliance with its debt covenants, for the next twelve months and beyond.

In March 2014, the Company initiated a dividend program to declare and pay a monthly dividend. On November 30, 2023, the Company announced a monthly dividend increase to 0.02508 per share (0.30096 per share annually) from 0.02483 per share

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(0.29796 per share annually). Although the Company expects that monthly dividends will be declared and paid for the foreseeable future, the declaration of any dividends is at the discretion of the Company’s board of directors and is subject to legal requirements and debt service ratio covenant requirements (refer to “—Senior Secured Notes” and “—Revolving Credit Line”).

Cash from Operating Activities

Cash flows provided by operating activities are used for operating needs and to meet capital expenditure requirements. The Company’s future cash flows from operating activities will be affected by economic utility regulation, infrastructure investment, growth in service connections, customer usage of water, compliance with environmental health and safety standards, production costs, weather, and seasonality.

For the nine months ended September 30, 2024, net cash provided by operating activities totaled approximately $15.8 million compared to $22.7 million for the nine months ended September 30, 2023. The $6.9 million decrease in cash from operating activities was primarily driven by an increase in accounts payable and other current liabilities for the nine months ended September 30, 2024 as a result of increased accruals for capital expenditures, as well as lower net income in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Cash from Investing Activities

The net cash used in investing activities totaled approximately $19.2 million for the nine months ended September 30, 2024 compared to $24.8 million for the nine months ended September 30, 2023. The $5.7 million decrease in cash used in investing activities was primarily driven by the $6.2 million cash paid for the acquisition of GW-Farmers (net of cash acquired) in February 2023, partially offset by an increase in capital expenditures of $0.6 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

The Company continues to invest capital prudently in existing, core service areas where the Company is able to deploy the Total Water Management model as this includes any required maintenance capital expenditures and the construction of new water and wastewater treatment and delivery facilities. The projected capital expenditures and other investments are subject to periodic review and revision to reflect changes in economic conditions and other factors. As a result, the Company may adjust capital expenditures to correspond with any substantial changes in demand for new development in its service areas.

Cash from Financing Activities

The net cash provided by financing activities totaled $20.7 million for the nine months ended September 30, 2024, an $18.5 million increase, as compared to the $2.3 million in cash provided by financing activities for the nine months ended September 30, 2023. This increase was primarily driven by the $20 million received from the senior secured notes issuance in January 2024 and $2.1 million borrowings under our 2024 Water Infrastructure Finance Authority of Arizona (“WIFA”) loan in the third quarter of 2024, partially offset by $2.3 million of repayments on the Company’s revolving line of credit in the nine months ended September 30, 2024 as compared to less than $0.1 million of net borrowings against the line of credit in the nine months ended September 30, 2023.

Recent Financing Activity

The Company has entered into certain debt and equity transactions in 2024 and 2023 in order to meet its liquidity needs. Refer to Note 9 - “Debt” of the Notes to the Condensed Consolidated Financial Statements (unaudited) included in Part I, Item 1 of this report for additional details regarding our debt financing.

Debt

2024 WIFA Loan

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Senior Secured Notes

On June 24, 2016, the Company issued two series of senior secured notes with a total principal balance of $115.0 million at a blended interest rate of 4.55%. Series A carries a principal balance of $28.8 million and bears an interest rate of 4.38% over a twelve-year term, with the principal payment due on June 15, 2028 (the “Series A Notes”). Series B carries a principal balance of $86.3 million and bears an interest rate of 4.58% over a 20-year term, with the principal payment due on June 15, 2036 (the “Series B Notes”). The Series B Notes were interest only for the first five years, with $1.9 million principal payments paid semiannually thereafter beginning December 2021. The proceeds of the Series A Notes and the Series B Notes were primarily used to refinance the Company’s long-term tax exempt bonds, pursuant to an early redemption option at 103%, plus accrued interest, as a result of the Company’s U.S. initial public offering of its common stock in May 2016.

The Series A Notes and the Series B Notes require the Company to maintain a debt service coverage ratio of consolidated EBITDA to consolidated debt service of at least 1.10 to 1.00. Consolidated EBITDA is calculated as net income plus depreciation and amortization, taxes, interest, and other non-cash charges net of non-cash income. Consolidated debt service is calculated as interest expense, principal payments, and dividend or stock repurchases. The Series A Notes and the Series B Notes also contain a provision limiting the payment of dividends if the Company falls below a debt service ratio of 1.25. As of September 30, 2024, the Company was in compliance with its financial debt covenants relating to the Series A Notes and the Series B Notes.

Additionally, on January 3, 2024, the Company issued $20.0 million aggregate principal amount of 6.91% Senior Secured Notes due on January 3, 2034 (the “6.91% Notes” and collectively with the Series A Notes and the Series B Notes, the “Senior Secured Notes”). The 6.91% Notes accrue interest at 6.91% per annum from the date of issuance, payable semi-annually on January 3 and July 3 of each year, beginning on July 3, 2024, with a balloon payment due on January 3, 2034.

The 6.91% Notes require the Company to maintain a debt service coverage ratio of consolidated EBITDA to consolidated debt service of at least 1.10 to 1.00. The 6.91% Notes also contain a provision limiting the payment of dividends if the Company falls below a debt service coverage ratio of 1.25. As of September 30, 2024, the Company was in compliance with its financial debt covenants relating to 6.91% Notes.

The Senior Secured Notes are collateralized by a security interest in the Company’s equity interest in its subsidiaries, including all payments representing profits and qualifying distributions. The Senior Secured Notes also have certain restrictive covenants that limit, among other things, the Company’s ability to: create liens and other encumbrances; incur additional indebtedness; merge, liquidate or consolidate with another entity; dispose of or transfer assets; make distributions or other restricted payments; engage in certain affiliate transactions; and change the nature of the business.

Debt issuance costs as of September 30, 2024 and December 31, 2023 were $0.8 million and $0.4 million, respectively.

Revolving Credit Line

Similar to the Senior Secured Notes, the Northern Trust Loan Agreement requires the Company to maintain a debt service coverage ratio of consolidated EBITDA to consolidated debt service of at least 1.10 to 1.00. The Northern Trust Loan Agreement also contains a provision limiting the payment of dividends if the Company falls below a debt service ratio of 1.25. Additionally, the Northern Trust Loan Agreement contains certain restrictive covenants that limit, among other things, the Company’s ability to: create liens and other encumbrances; incur additional indebtedness; merge, liquidate or

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consolidate with another entity; dispose of or transfer assets; make distributions or other restricted payments (including dividends); engage in certain affiliate transactions; and change the nature of the business. The foregoing covenants are subject to various qualifications and limitations as set forth in the Northern Trust Loan Agreement. Pursuant to the Northern Trust Loan Agreement, the revolving credit facility is subject to certain customary events of default after which the revolving credit facility could be declared due and payable if not cured within the grace period or, in certain circumstances, could be declared due and payable immediately. As of September 30, 2024, the Company was in compliance with its financial debt covenants under the Northern Trust Loan Agreement.

As of September 30, 2024, the Company had no outstanding borrowings under the revolving line of credit with Northern Trust. There were less than $0.1 million of unamortized debt issuance costs as of September 30, 2024 and December 31, 2023, respectively.

Private Placement Offering of Common Stock

Insurance Coverage

The Company carries various property, casualty, and financial insurance policies with limits, deductibles, and exclusions consistent with industry standards. However, insurance coverage may not be adequate or available to cover unanticipated losses or claims. The Company is self-insured to the extent that losses are within the policy deductible or exceed the amount of insurance maintained. Such losses could have a material adverse effect on the Company’s short-term and long-term financial condition and the results of operations and cash flows.

Contractual Obligations and Off-Balance Sheet Arrangements

A summary of contractual obligations is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Contractual Obligations” of our 2023 Form 10-K. Except for our January 2024 issuance of 6.91% Notes and borrowings under our 2024 WIFA loan, there have been no additional material changes in our reported contractual obligations from those disclosed in our 2023 Form 10-K. Refer to Note 9 - “Debt” of the Notes to the Condensed Consolidated Financial Statements (unaudited) included in Part I, Item 1 of this report for additional details.

As of September 30, 2024, the Company did not have any off-balance sheet arrangements.

Critical Accounting Estimates

A summary of our critical accounting estimates is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Critical Accounting Estimates” of our 2023 Form 10-K. There were no material changes made as of September 30, 2024.

ITEM 3. Qualitative and Quantitative Disclosures About Market Risk

Not applicable

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, reviewed and evaluated the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2024, the disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

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Changes in Internal Control over Financial Reporting

There was no material change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the fiscal quarter ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

In the ordinary course of business, the Company may, from time to time, be subject to various pending and threatened lawsuits in which claims for monetary damages are asserted. To our knowledge, the Company is not involved in any legal proceeding which is expected to have a material effect on the Company.

ITEM 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in “Risk Factors” included in Part I, Item 1A of the 2023 Form 10-K. There have been no material changes to such risk factors.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

a) Sales of Unregistered Securities

No unregistered securities were sold during the three months ended September 30, 2024, other than as reported in our Current Reports on Form 8-K filed with the SEC.

b) Use of Proceeds

None.

c) Issuer Purchases of Equity Securities

The following table presents information with respect to purchases of common stock the Company made during the three months ended September 30, 2024.


Period	Total Number of Shares Purchased(1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 1 to July 31, 2024	—	$	—	—	$	—
August 1 to August 31, 2024	704	11.70		—	—
September 1 to September 30, 2024	—	—		—	—
Total	704			—	$	—

(1) Represents shares withheld from employees or board members to satisfy certain tax obligations due in connection with the vesting of restricted stock awards granted under the Global Water Resources, Inc. 2020 Omnibus Incentive Plan. The average price paid per share for the common stock withheld was based on the closing price of the Company’s common stock on the applicable vesting date.

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

Rule 10b5-1 Trading Plans

During the three months ended September 30, 2024, none of our directors or officers (as defined in Exchange Act Rule 16a-1(f)) adopted or terminated a “Rule 10b5–1 trading arrangement” or a “non-Rule 10b5–1 trading arrangement,” each as defined in Item 408 of Regulation S-K.

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ITEM 6. Exhibits


Exhibit Number	Description of Exhibit	Method of Filing





3.1	Second Amended and Restated Certificate of Incorporation of Global Water Resources, Inc.	Incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed May 4, 2016.

3.2	Amended and Restated Bylaws of Global Water Resources, Inc.	Incorporated by reference to Exhibit 3.2 of the Company’s Form 8-K filed May 4, 2016.


































































10.1	Fifth Modification Agreement, dated July 1, 2024, by and between Global Water Resources, Inc. and The Northern Trust Company	Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on July 3, 2024.

31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer	Filed herewith.

31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer	Filed herewith.

32.1	Section 1350 Certification of Chief Executive Officer and Chief Financial Officer	Furnished herewith.

101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document	Filed herewith.

101.SCH	Inline XBRL Taxonomy Extension Schema Document	Filed herewith.

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	Filed herewith.

101. PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.

104	Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)	Filed herewith.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Global Water Resources, Inc.

Date:	November 6, 2024	By:	/s/ Michael J. Liebman
			Michael J. Liebman
			Chief Financial Officer and Corporate Secretary
			(Duly Authorized Officer and Principal Financial and Accounting Officer)

-42-

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Ron L. Fleming, certify that:


1.			I have reviewed this Quarterly Report on Form 10-Q of Global Water Resources, Inc.;


2.			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.			Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.			The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


			a.			Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


			b.			Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


			c.			Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


			d.			Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.			The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


			a.			All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


			b.			Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2024



By:			/s/ Ron L. Fleming
			Ron L. Fleming
			President, Chief Executive Officer and Chairman of the Board

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Michael J. Liebman, certify that:


1.			I have reviewed this Quarterly Report on Form 10-Q of Global Water Resources, Inc.;


2.			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.			Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.			The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


			a.			Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


			b.			Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


			c.			Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


			d.			Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.			The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


			a.			All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


			b.			Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2024



By:			/s/ Michael J. Liebman
			Michael J. Liebman
			Chief Financial Officer and Corporate Secretary

EXHIBIT 32.1

Certification of Chief Executive Officer and Chief Financial Officer

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Global Water Resources, Inc. (the “Company”) for the quarter ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Ron L. Fleming, as Chief Executive Officer of the Company, and Michael J. Liebman, as Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:


1.			The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


2.			The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



By:			/s/ Ron L. Fleming
			Ron L. Fleming
			President, Chief Executive Officer and Chairman of the Board
			Date: November 6, 2024

By:			/s/ Michael J. Liebman
			Michael J. Liebman
			Chief Financial Officer and Corporate Secretary
			Date: November 6, 2024

COVER PAGE - shares	9 Months Ended
COVER PAGE - shares	Sep. 30, 2024	Nov. 05, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-37756
Entity Registrant Name	Global Water Resources, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	90-0632193
Entity Address, Address Line One	21410 N. 19th Avenue #220
Entity Address, City or Town	Phoenix,
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85027
City Area Code	480
Local Phone Number	360-7775
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	GWRS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		24,221,626
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001434728
Current Fiscal Year End Date	--12-31

Condensed Consolidated Balance Sheet - USD ($)	Sep. 30, 2024	Dec. 31, 2023
PROPERTY, PLANT AND EQUIPMENT:
Land	$ 2,729,000	$ 2,674,000
Depreciable property, plant and equipment	427,671,000	414,170,000
Construction work-in-progress	66,703,000	48,147,000
Other	697,000	697,000
Less accumulated depreciation	(151,093,000)	(142,367,000)
Net property, plant and equipment	346,707,000	323,321,000
CURRENT ASSETS:
Cash and cash equivalents	18,145,000	3,087,000
Accounts receivable, net	3,271,000	2,845,000
Customer payments in-transit	667,000	543,000
Unbilled revenue	3,403,000	2,755,000
Taxes, prepaid expenses and other current assets	2,614,000	2,494,000
Total current assets	28,100,000	11,724,000
OTHER ASSETS:
Goodwill	9,486,000	10,820,000
Intangible assets, net	8,573,000	8,841,000
Regulatory assets	4,110,000	2,898,000
Restricted cash	3,933,000	1,676,000
Right-of-use assets	1,928,000	1,741,000
Other noncurrent assets	80,000	74,000
Total other assets	28,110,000	26,050,000
TOTAL ASSETS	402,917,000	361,095,000
CURRENT LIABILITIES:
Accounts payable	1,284,000	1,027,000
Accrued expenses	9,713,000	7,129,000
Customer and meter deposits	1,598,000	1,628,000
Long-term debt, current portion	3,931,000	3,880,000
Leases, current portion	766,000	553,000
Total current liabilities	17,292,000	14,217,000
NONCURRENT LIABILITIES:
Line of credit	0	2,315,000
Long-term debt	120,427,000	101,341,000
Long-term lease liabilities	1,359,000	1,370,000
Deferred revenue - ICFA	20,285,000	19,656,000
Regulatory liabilities	5,863,000	6,076,000
Advances in aid of construction	124,226,000	111,529,000
Contributions in aid of construction, net	39,946,000	36,409,000
Deferred income tax liabilities, net	10,063,000	8,284,000
Acquisition liabilities	2,881,000	3,048,000
Other noncurrent liabilities	11,734,000	8,230,000
Total noncurrent liabilities	336,784,000	298,258,000
Total liabilities	354,076,000	312,475,000
Commitments and contingencies (Refer to Note 13)
SHAREHOLDERS’ EQUITY:
Common stock, $0.01 par value, $60,000,000 shares authorized; 24,565,955 and 24,492,918 shares issued as of September 30, 2024 and December 31, 2023, respectively.	240,000	240,000
Treasury stock, 344,329 and 317,677 shares at September 30, 2024 and December 31, 2023, respectively.	(2,000)	(2,000)
Paid in capital	46,795,000	47,585,000
Retained earnings	1,808,000	797,000
Total shareholders’ equity	48,841,000	48,620,000
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 402,917,000	$ 361,095,000

Condensed Consolidated Balance Sheet (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	60,000,000	60,000,000
Common stock, issued (in shares)	24,565,955	24,492,918
Treasury stock (in shares)	344,329	317,677

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
REVENUES:
Total revenues	$ 14,321	$ 14,532	$ 39,441	$ 40,660
OPERATING EXPENSES:
Operations and maintenance	3,444	3,587	10,213	9,557
General and administrative	3,960	3,923	12,317	11,934
Depreciation and amortization	2,933	3,185	8,863	8,545
Total operating expenses	10,337	10,695	31,393	30,036
OPERATING INCOME	3,984	3,837	8,048	10,624
OTHER INCOME (EXPENSE):
Interest income	240	4	744	11
Interest expense	(1,504)	(1,260)	(4,577)	(3,709)
Allowance for equity funds used during construction	238	263	682	778
Other, net	1,028	678	2,358	1,619
Total other income (expense)	2	(315)	(793)	(1,301)
INCOME BEFORE INCOME TAXES	3,986	3,522	7,255	9,323
INCOME TAX EXPENSE	(1,061)	(888)	(1,909)	(2,484)
NET INCOME	$ 2,925	$ 2,634	$ 5,346	$ 6,839
Basic earnings per common share (in dollars per share)	$ 0.12	$ 0.11	$ 0.22	$ 0.28
Diluted earnings per common share (in dollars per share)	0.12	0.11	0.22	0.28
Dividends declared per common share (in dollars per share)	$ 0.08	$ 0.07	$ 0.23	$ 0.22
Weighted average number of common shares used in the determination of:
Basic (in shares)	24,219,564	24,171,228	24,198,270	24,046,493
Diluted (in shares)	24,302,521	24,231,801	24,301,974	24,144,384
Water service
REVENUES:
Total revenues	$ 7,493	$ 7,520	$ 19,387	$ 18,916
Wastewater and recycled water service
REVENUES:
Total revenues	6,828	6,494	20,054	18,958
Unregulated revenues
REVENUES:
Total revenues	$ 0	$ 518	$ 0	$ 2,786

Condensed Consolidated Statements of Shareholders’ Equity - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Paid-in Capital	Retained Earnings
Balance at the beginning (in shares) at Dec. 31, 2022		24,095,139
Balance, at the beginning at Dec. 31, 2022	$ 44,394	$ 239	$ (2)	$ 44,157	$ 0
Balance at the beginning (in shares) at Dec. 31, 2022			(224,093)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared	(1,778)				(1,778)
Stock compensation	299			299
Net income	2,466				2,466
Balance at the ending (in shares) at Mar. 31, 2023		24,095,139
Balance, at the ending at Mar. 31, 2023	45,381	$ 239	$ (2)	44,456	688
Balance at the ending (in shares) at Mar. 31, 2023			(224,093)
Balance at the beginning (in shares) at Dec. 31, 2022		24,095,139
Balance, at the beginning at Dec. 31, 2022	44,394	$ 239	$ (2)	44,157	0
Balance at the beginning (in shares) at Dec. 31, 2022			(224,093)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	6,839
Balance at the ending (in shares) at Sep. 30, 2023		24,478,252
Balance, at the ending at Sep. 30, 2023	49,080	$ 240	$ (2)	47,321	1,521
Balance at the ending (in shares) at Sep. 30, 2023			(306,735)
Balance at the beginning (in shares) at Mar. 31, 2023		24,095,139
Balance, at the beginning at Mar. 31, 2023	45,381	$ 239	$ (2)	44,456	688
Balance at the beginning (in shares) at Mar. 31, 2023			(224,093)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared	(1,794)			(55)	(1,739)
Issuance of Common Stock (in shares)		230,000
Issuance of Common Stock	2,748	$ 1		2,747
Stock option exercise (in shares)		152,113	82,642
Stock compensation	(47)			(47)
Net income	1,739				1,739
Balance at the ending (in shares) at Jun. 30, 2023		24,477,252
Balance, at the ending at Jun. 30, 2023	48,027	$ 240	$ (2)	47,101	688
Balance at the ending (in shares) at Jun. 30, 2023			(306,735)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared	(1,801)				(1,801)
Stock option exercise (in shares)		1,000
Stock option exercise	9			9
Stock compensation	211			211
Net income	2,634				2,634
Balance at the ending (in shares) at Sep. 30, 2023		24,478,252
Balance, at the ending at Sep. 30, 2023	$ 49,080	$ 240	$ (2)	47,321	1,521
Balance at the ending (in shares) at Sep. 30, 2023			(306,735)
Balance at the beginning (in shares) at Dec. 31, 2023	24,492,918	24,492,918
Balance, at the beginning at Dec. 31, 2023	$ 48,620	$ 240	$ (2)	47,585	797
Balance at the beginning (in shares) at Dec. 31, 2023	(317,677)		(317,677)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared	$ (1,819)			(1,128)	(691)
Stock option exercise (in shares)		5,277	4,405
Stock option exercise	198			198
Net income	691				691
Balance at the ending (in shares) at Mar. 31, 2024		24,498,195
Balance, at the ending at Mar. 31, 2024	$ 47,690	$ 240	$ (2)	46,655	797
Balance at the ending (in shares) at Mar. 31, 2024			(322,082)
Balance at the beginning (in shares) at Dec. 31, 2023	24,492,918	24,492,918
Balance, at the beginning at Dec. 31, 2023	$ 48,620	$ 240	$ (2)	47,585	797
Balance at the beginning (in shares) at Dec. 31, 2023	(317,677)		(317,677)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 5,346
Balance at the ending (in shares) at Sep. 30, 2024	24,565,955	24,565,955
Balance, at the ending at Sep. 30, 2024	$ 48,841	$ 240	$ (2)	46,795	1,808
Balance at the ending (in shares) at Sep. 30, 2024	(344,329)		(344,329)
Balance at the beginning (in shares) at Mar. 31, 2024		24,498,195
Balance, at the beginning at Mar. 31, 2024	$ 47,690	$ 240	$ (2)	46,655	797
Balance at the beginning (in shares) at Mar. 31, 2024			(322,082)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared	(1,821)				(1,821)
Stock compensation (in shares)		62,840	21,543
Stock compensation	16			16
Net income	1,730				1,730
Balance at the ending (in shares) at Jun. 30, 2024		24,561,035
Balance, at the ending at Jun. 30, 2024	47,615	$ 240	$ (2)	46,671	706
Balance at the ending (in shares) at Jun. 30, 2024			(343,625)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared	(1,823)				(1,823)
Stock option exercise (in shares)			704
Stock compensation (in shares)		4,920
Stock compensation	124			124
Net income	$ 2,925				2,925
Balance at the ending (in shares) at Sep. 30, 2024	24,565,955	24,565,955
Balance, at the ending at Sep. 30, 2024	$ 48,841	$ 240	$ (2)	$ 46,795	$ 1,808
Balance at the ending (in shares) at Sep. 30, 2024	(344,329)		(344,329)

Condensed Consolidated Statements of Shareholders’ Equity (Parenthetical) - $ / shares	3 Months Ended						9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Statement of Stockholders' Equity [Abstract]
Dividends declared (in dollars per share)	$ 0.08	$ 0.075	$ 0.08	$ 0.07	$ 0.07	$ 0.07	$ 0.23	$ 0.22

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 5,346	$ 6,839
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	8,863	8,545
Deferred compensation	873	698
Deferred income tax expense	1,838	2,164
Allowance for equity funds used during construction	(682)	(778)
Right of use amortization	298	240
Other adjustments	6	23
Changes in assets and liabilities
Accounts receivable	(496)	(938)
Other current assets	(891)	(165)
Accounts payable and other current liabilities	705	2,261
Other noncurrent assets	38	293
Other noncurrent liabilities	(102)	3,480
Net cash provided by operating activities	15,796	22,662
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(19,171)	(18,578)
Cash paid for acquisitions, net of cash acquired	0	(6,246)
Net cash used in investing activities	(19,171)	(24,824)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid	(5,462)	(5,372)
Advances and contributions in aid of construction	10,455	8,370
Refunds of advances for construction	(1,256)	(1,076)
Payments for taxes related to net shares settlement of equity awards	(268)	(367)
Principal payments under finance leases	(183)	(388)
Repayments of notes payable	(1,952)	(1,917)
Line of credit borrowings	0	21,050
Line of credit repayments	(2,315)	(21,035)
Loan borrowings	22,137	242
Debt issuance costs paid	(418)	0
Proceeds from sale of stock	0	2,748
Other financing activities	(48)	10
Net cash provided by financing activities	20,690	2,265
INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	17,315	103
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period	4,763	7,562
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	22,078	7,665
Supplemental disclosure of cash flow information:
Cash and cash equivalents	18,145	5,289
Restricted cash	3,933	2,376
Total cash, cash equivalents, and restricted cash	$ 22,078	$ 7,665

BASIS OF PRESENTATION, CORPORATE TRANSACTIONS, SIGNIFICANT ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

BASIS OF PRESENTATION, CORPORATE TRANSACTIONS, SIGNIFICANT ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS

1. BASIS OF PRESENTATION, CORPORATE TRANSACTIONS, SIGNIFICANT ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS

Basis of Presentation and Principles of Consolidation

Corporate Transactions

Asset Purchase Agreement with City of Tucson

Private Placement Offering of Common Stock

Farmers Water Co. Acquisition

Stipulated Condemnation of the Operations and Assets of Valencia Water Company, Inc.

Significant Accounting Policies

Basic and Diluted Earnings per Common Share


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
(In thousands)
Basic weighted average common shares outstanding	24,220	24,171	24,198	24,046
Effect of dilutive securities:
2017 Option grant	66	54	67	72
2019 Option grant	13	7	13	14
2020 Restricted stock awards	—	—	—	6
2021 Restricted stock awards	4	—	24	6
Total dilutive securities	83	61	104	98
Diluted weighted average common shares outstanding	24,303	24,232	24,302	24,144
Anti-dilutive shares excluded from earnings per diluted shares(1)	—	138	—	94

(1) Shares excluded from the dilutive-effect calculation because the outstanding awards’ exercise prices were greater than the average market price of the Company’s common stock.

Segments

Governmental Funding & Assistance

Recent Accounting Pronouncements

Future Adoption of Accounting Standards

REGULATORY DECISION AND RELATED ACCOUNTING AND POLICY CHANGES

9 Months Ended

Sep. 30, 2024

Regulated Operations [Abstract]

REGULATORY DECISION AND RELATED ACCOUNTING AND POLICY CHANGES

The Company’s regulated utilities and certain other balances are subject to regulation by the ACC and meet the requirements for regulatory accounting found within ASC 980, Regulated Operations.

2024 Farmers Rate Case

Acquisition of Seven Systems from City of Tucson

2025 Santa Cruz and Palo Verde Rate Case

Southwest Plant Accounting Order and Bill Credit

Decision No. 79383 - Issued June 20, 2024 - Saguaro Rate Case

The ACC also approved:

(i) the consolidation of water rates to one single rate for the seven utilities;

(iii) the Company’s ability to annually adjust rates to flow through certain changes in tax expense, primarily related to income taxes, without the necessity of a rate case proceeding;

(iv) a sustainable water surcharge, which will allow semiannual surcharges to be added to customer bills based on verified costs of new water resources;

(v) a capital structure matching the Company’s previous rate case of 55% equity with a 9.6% return on equity; and

(vi) a depreciation expense accounting deferral for GW-Rincon.

Decision No. 78644 - Issued July 27, 2022

Regulatory Assets and Liabilities

If costs expected to be incurred in the future are currently being recovered through rates, the Company records those expected future costs as regulatory liabilities.

The Company’s regulatory assets and liabilities consist of the following (in thousands):


	Recovery Period	September 30, 2024		December 31, 2023
Regulatory Assets
Acquisition premiums(1)	25 or 50 years	$	2,616	$	1,269
Income taxes recoverable through future rates (2)	Various	1,345		1,404
Rate case expense surcharge(3)	2 years	104		221
Other regulatory assets		45		4
Total regulatory assets		$	4,110	$	2,898

Regulatory Liabilities
Acquired ICFAs(4)		$	4,708	$	4,896
Income taxes payable through future rates(2)		473		488
Depreciation adjustment(5)		682		692
Total regulatory liabilities		$	5,863	$	6,076

(3) Decision No. 78743, issued on October 24, 2022, approved approximately $0.5 million in rate case expenses to be recovered through a rate case expense surcharge over a period of up to two years.

Decision No. 79383 also approved approximately $0.1 million in rate case expenses to be recovered through a rate case expense surcharge over a period of up to a two-years.

(5) Decision No. 78644 approved an adjustment to update previously approved depreciation rates. The adjustment was incorporated into rates in accordance with the rate decision.

REVENUE RECOGNITION

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

Regulated Revenue

Total revenues do not include sales tax as the Company considers itself a pass-through conduit for collecting and remitting sales taxes.

Unregulated Revenue


	December 31, 2023 Balance		Payments Allocated to Deferred Revenue		Revenue Recognized		September 30, 2024 Balance
Deferred Revenue - ICFA	$	19,656	$	629	$	—	$	20,285

Disaggregated Revenues

For the three and nine months ended September 30, 2024 and 2023, disaggregated revenues from contracts with customers by major source and customer class are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
REGULATED REVENUE
Water Service
Residential	$	5,034	$	4,900	$	14,003	$	13,261
Irrigation	1,205		1,393		2,459		2,739
Commercial	541		457		1,389		1,184
Construction	469		537		861		1,036
Other water revenues	244		233		675		696
Total water revenues	7,493		7,520		19,387		18,916
Wastewater and recycled water service
Residential	5,796		5,630		17,607		16,725
Commercial	336		317		1,034		906
Recycled water revenues	607		469		1,133		1,062
Other wastewater revenues	89		78		280		265
Total wastewater and recycled water revenues	6,828		6,494		20,054		18,958
TOTAL REGULATED REVENUE	14,321		14,014		39,441		37,874
UNREGULATED REVENUE
ICFA revenues	—		518		—		2,786



TOTAL REVENUE	$	14,321	$	14,532	$	39,441	$	40,660

Contract Balances

The Company’s contract assets and liabilities consist of the following (in thousands):


	September 30, 2024		December 31, 2023
CONTRACT ASSETS
Accounts receivable
Water service	$	2,125	$	1,588
Wastewater and recycled water service	1,297		1,379
Total contract assets	$	3,422	$	2,967
CONTRACT LIABILITIES
Deferred revenue - ICFA	$	20,285	$	19,656


Total contract liabilities	$	20,285	$	19,656

Remaining Performance Obligations

Accounts Receivable and Allowance for Credit Losses

Accounts receivable as of September 30, 2024 and December 31, 2023 consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Billed receivables	$	3,422	$	2,967
Less provision for credit losses	(151)		(122)
Accounts receivable, net	$	3,271	$	2,845

The following table summarizes the allowance for credit loss activity for the nine months ended September 30, 2024 and the year ended December 31, 2023 (in thousands):


	September 30, 2024		December 31, 2023
Beginning of Period	$	(122)	$	(164)
Credit Loss Expense	(69)		(76)
Write Offs	67		124
Recoveries	(27)		(6)
End of Period	$	(151)	$	(122)

PROPERTY, PLANT AND EQUIPMENT

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

Depreciable property, plant and equipment as of September 30, 2024 and December 31, 2023 consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Equipment	$	61,519	$	60,536
Office buildings and other structures	64,622		64,084
Transmission and distribution plant	301,530		289,550
Total property, plant and equipment	$	427,671	$	414,170

Depreciation of property, plant and equipment is computed based on the estimated useful lives as follows:


						Useful Lives
Equipment						3 to 30 years
Office buildings and other structures						30 years
Transmission and distribution plant						10 to 50 years

GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

Goodwill

As of September 30, 2024 and December 31, 2023, the goodwill balance consisted of the following (in thousands):


	December 31, 2023 Balance		Acquisition Activity		Adjustments Subsequent to Acquisition Date		September 30, 2024 Balance
Goodwill	$	10,820	$	—	$	(1,334)	$	9,486

Intangible Assets

As of September 30, 2024 and December 31, 2023, intangible assets consisted of the following (in thousands):


	September 30, 2024						December 31, 2023
	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
INDEFINITE LIVED INTANGIBLE ASSETS:
CP Water Certificate of Convenience & Necessity service area	$	1,532	$	—	$	1,532	$	1,532	$	—	$	1,532
Intangible trademark	13		—		13		13		—		13
Franchise contract rights	139		—		139		139		—		139
Organizational costs	164		—		164		163		—		163
Total indefinite lived intangible assets	1,848		—		1,848		1,847		—		1,847
DEFINITE LIVED INTANGIBLE ASSETS:
Acquired ICFAs	17,978		(16,374)		1,604		17,978		(16,105)		1,873
Sonoran contract rights	7,406		(2,285)		5,121		7,406		(2,285)		5,121
Total definite lived intangible assets	25,384		(18,659)		6,725		25,384		(18,390)		6,994
Total intangible assets	$	27,232	$	(18,659)	$	8,573	$	27,231	$	(18,390)	$	8,841

TRANSACTIONS WITH RELATED PARTIES	9 Months Ended
TRANSACTIONS WITH RELATED PARTIES	Sep. 30, 2024
Related Party Transactions [Abstract]
TRANSACTIONS WITH RELATED PARTIES	TRANSACTIONS WITH RELATED PARTIES The Company provides medical benefits to employees through its participation in a pooled plan sponsored by an affiliate of a significant shareholder and director of the Company. Medical claims paid to the plan were approximately $0.3 million for both the three months ended September 30, 2024 and 2023. Medical claims paid to the plan were approximately $0.8 million for the nine months ended September 30, 2024 and $0.6 million for the nine months ended September 30, 2023. Refer to Note 1 — “Basis of Presentation, Corporate Transactions, Significant Accounting Policies, and Recent Accounting Pronouncements — Corporate Transactions” (specifically the “Private Placement Offering of Common Stock” section) for additional information regarding other related party disclosures.

ACCRUED EXPENSES

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

ACCRUED EXPENSES

Accrued expenses as of September 30, 2024 and December 31, 2023 consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Accrued project liabilities	$	2,310	$	1,001
Interest	2,003		480
Accrued bonus	981		602
Property taxes	678		1,242
Dividend payable	606		606
Accrued purchase orders	583		200
Customer prepayments	577		883
Accrued payroll	328		67
Accrued sales taxes	238		179
Deferred compensation	228		239
Accrued electric	213		109

Other accrued liabilities	968		1,521
Total accrued expenses	$	9,713	$	7,129

FAIR VALUE

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

FAIR VALUE

Fair Value of Financial Instruments

•Level 1 - Quoted market prices in active markets for identical assets or liabilities.

•Level 2 - Inputs other than Level 1 that are either directly or indirectly observable.

•Level 3 - Unobservable inputs developed using the Company’s estimates and assumptions, which reflect those that the Company believes market participants would use.

Financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 were as follows (in thousands):


	September 30, 2024								December 31, 2023
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
HUF funds - restricted cash	$	2,986	$	—	$	—	$	2,986	$	822	$	—	$	—	$	822
Certificate of deposit - restricted	947		—		—		947		—		854		—		854
Demand deposit	1		—		—		1		1		—		—		1
Total	$	3,934	$	—	$	—	$	3,934	$	823	$	854	$	—	$	1,677
Liabilities:
Contingent consideration	$	—	$	—	$	1,946	$	1,946	$	—	$	—	$	2,113	$	2,113
Total	$	—	$	—	$	1,946	$	1,946	$	—	$	—	$	2,113	$	2,113

DEBT

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

DEBT


	September 30, 2024				December 31, 2023
	Short-term		Long-term		Short-term		Long-term
NOTES PAYABLE -
4.38% Senior Secured Notes, Series A, maturing June 2028 (“Series A Notes”)	$	—	28,750		$	—	$	28,750
4.58% Senior Secured Notes, Series B, maturing June 2036 (“Series B Notes”)	3,833		70,917		3,833		72,833
6.91% Senior Secured Notes, maturing January 2034 (“6.91% Notes”)	—		20,000		—		—
4.911% WIFA Note, maturing April 2044 (“4.911% WIFA Note”)	49		1,399		—		—

	3,882		121,066		3,833		101,583
OTHER
Debt issuance costs	—		(784)		—		(426)
Loan Payable	49		145		47		184
Total debt	$	3,931	$	120,427	$	3,880	$	101,341

Debt is measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 as follows (in thousands):


	September 30, 2024				December 31, 2023
	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Long-term debt(1)	—	124,648	—	124,648	—	100,746	—	100,746

(1) The fair value of debt was estimated based on interest rates considered available for instruments of similar terms and remaining maturities.

As of September 30, 2024, the Company was in compliance with its financial debt covenants relating to the Series A Notes, Series B Notes, and the 6.91% Notes.

Revolving Credit Line

As of September 30, 2024, the Company was in compliance with its financial debt covenants under the Northern Trust Loan Agreement.

Refer to Note 11 - “Debt” in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information regarding the Company’s outstanding debt.

INCOME TAXES	9 Months Ended
INCOME TAXES	Sep. 30, 2024
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES Our interim effective tax rates reflect the estimated annual effective tax rates for 2024 and 2023 applied to year-to-date pretax income, adjusted for tax expense associated with certain discrete items. The effective tax rates for the three months ended September 30, 2024 and 2023 were 26.6% and 25.2%, respectively. The effective tax rates for the nine months ended September 30, 2024 and 2023 were 26.3% and 26.6%, respectively. The increase in the effective tax rate for the three months ended September 30, 2024 compared to the prior year period was primarily attributable to the vesting of restricted stock awards and stock options in the prior year period. The decrease in the effective tax rate for the nine months ended September 30, 2024 compared to the prior year period was primarily attributable to a decrease in non-deductible permanent differences.

DEFERRED COMPENSATION AWARDS

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

DEFERRED COMPENSATION AWARDS

Stock-based compensation

2017 stock option grant

2019 stock option grant

Restricted stock units


			Three Months Ended September 30,				Nine Months Ended September 30,
Grant Date	Units Granted	Units Outstanding	2024		2023		2024		2023
Q1 2021	27,403	—	$	—	$	27	$	28	$	85
Q1 2022	22,262	1,778	21		23		67		70
Q1 2023	30,366	11,852	29		31		92		62
Q1 2024	30,962	22,706	31		—		64		—
Total	110,993	36,336	$	81	$	81	$	251	$	217


	RSUs
2024 (remaining period)	$	84
2025	246
2026	127

Total	$	457

Stock appreciation rights


					Three Months Ended September 30,				Nine Months Ended September 30,
Grant Date	Units Granted	Exercise Price		Units Outstanding	2024		2023		2024		2023
Q1 2015(1)	299,000	$	4.26	12,500	$	—	$	—	$	—	$	165
Q1 2018(2)	33,000	$	8.99	8,250	—		—		—		—
Total	332,000			20,750	$	—	$	—	$	—	$	165

(1)The exercise price was determined to be the fair market value of one share of GWR Global Water Resources Corp. stock on the grant date of February 11, 2015.

(2)The exercise price was determined to be the fair market value of one share of GWRI stock on the grant date of March 12, 2018.

Restricted stock awards


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Compensation expense	$	55	$	200	$	450	$	737

SUPPLEMENTAL CASH FLOW INFORMATION

9 Months Ended

Sep. 30, 2024

Supplemental Cash Flow Elements [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION

The following is supplemental cash flow information for the nine months ended September 30, 2024 and 2023 (in thousands):


	Nine Months Ended September 30,
	2024		2023
Supplemental cash flow information:
Cash paid for interest - net of amounts capitalized	$	3,114	$	2,343


Cash paid for income taxes	107		276
Non-cash financing and investing activities:
Capital expenditures included in accounts payable and accrued liabilities	3,417		2,251
Utility Plant constructed by developers and conveyed	10,831		11,276
Business acquisition through issuance of contingent consideration payable	—		1,330
Finance lease additions	604		94

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Commitments The Company has operating and finance leases for vehicles, office equipment, and office space. Refer to Note 4 – “Leases” in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information. On February 1, 2023, the Company acquired all of the equity of Farmers Water Co., an operator of a water utility with service area in Pima County, Arizona. Under the terms of the purchase agreement, the Company is obligated to pay the seller a growth premium for each new account established within the specified growth premium areas. The estimated fair value of the remaining liability was $1.2 million and $1.3 million as of September 30, 2024 and December 31, 2023, respectively, and is included in Acquisition liabilities on the condensed consolidated balance sheets (unaudited). On October 16, 2018, the Company completed the acquisition of GW-Red Rock, an operator of a water and a wastewater utility with service areas in the Pima and Pinal counties of Arizona. Under the terms of the purchase agreement, the Company is obligated to pay to the seller a growth premium for each new account established within specified growth premium areas. During the three months ended September 30, 2024, the Company revised the fair value of the estimated liability of the contingent consideration based on modified building plans from the landowners in the growth premium areas, which resulted in a net $0.1 million gain on remeasurement, which is included in Other, net on the condensed consolidated statements of operations (unaudited) for the three and nine months ended September 30, 2024. As of September 30, 2024, no meters have been installed and no accounts have been established in any of the specified growth premium areas. The estimated fair value of the remaining liability was $0.7 million and $0.8 million as of September 30, 2024 and December 31, 2023, respectively, and is included in Acquisition liabilities on the condensed consolidated balance sheets (unaudited). Refer to Note 8 — “Fair Value” for additional information about contingent consideration. The Company has previously received certain ICFA advances related to its CP Water utility, which the Company is obligated to repay in the form of specified future ICFA fee reductions when those ICFA fees are due. The liability was $0.9 million as of both September 30, 2024 and December 31, 2023 and is included in Acquisition liabilities on the condensed consolidated balance sheets (unaudited). Contingencies From time to time, in the ordinary course of business, the Company may be subject to pending or threatened lawsuits in which claims for monetary damages are asserted. Management is not aware of any legal proceeding of which the ultimate resolution could materially affect the Company’s financial position, results of operations, or cash flows.

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 2,925	$ 1,730	$ 691	$ 2,634	$ 1,739	$ 2,466	$ 5,346	$ 6,839

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

BASIS OF PRESENTATION, CORPORATE TRANSACTIONS, SIGNIFICANT ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies)	9 Months Ended
	Sep. 30, 2024
Accounting Policies [Abstract]
Principles of Consolidation	The condensed consolidated financial statements (unaudited) of Global Water Resources, Inc. (the “Company”, “GWRI”, “we”, “us”, or “our”) and related disclosures as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These financial statements follow the same accounting policies and methods of their application as the Company’s most recent annual consolidated financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023. In the Company’s opinion, these financial statements include all normal and recurring adjustments necessary for the fair statement of the results for the interim period. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year, due to the seasonality of our business.
Basis of Presentation	The Company prepares its financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Basic and Diluted Earnings per Common Share	Basic and Diluted Earnings per Common Share Basic earnings per share (“EPS”) in each period of this report were calculated by dividing net income by the weighted-average number of shares during those periods. Diluted EPS includes additional weighted-average common stock equivalents (options and restricted stock awards), if dilutive. Unless otherwise noted, the term “earnings per share” refers to basic EPS.
Segments	Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing operating performance. The Company is not organized around specific products and services, geographic regions, or regulatory environments. The Company currently operates in one geographic region within the State of Arizona, wherein each operating utility operates within the same regulatory environment. While the Company reports its revenue, disaggregated by service type, on the face of its condensed consolidated statements of operations (unaudited), the Company does not manage the business based on any performance measure at the individual revenue stream level. The Company does not have any customers that contribute more than 10% to the Company’s revenues or revenue streams. Additionally, the CODM uses consolidated financial information to evaluate the Company’s performance, which is the same basis on which he communicates the Company’s results and performance to the Board of Directors. It is upon this consolidated basis from which he bases all significant decisions regarding the allocation of the Company’s resources on a consolidated level. Based on the information described above and in accordance with the applicable literature, management has concluded that the Company is currently organized and operated as one operating and reportable segment.
Governmental Funding & Assistance	Governmental Funding & Assistance Occasionally, the Company participates in various U.S. federal, state and local programs under which governmental funding is received to offset certain specified costs of the Company associated with water conservation efforts, the provision of utility service or facilities in designated locations (such as unserved or underserved rural areas), and the replacement and upgrading of outdated equipment with advanced metering infrastructure. In certain instances, our receipt of awarded governmental funds may be conditioned on the Company meeting specified progress and inspection milestones during construction of associated utility infrastructure projects. Certain programs are subject to audits of compliance with program commitments and, subject to the outcomes of those assessments, the Company may be required to reimburse the government entity for cash previously received, or, in some cases, pay a penalty. The Company evaluates each program and establishes a liability under the principles of Accounting Standards Codification (“ASC”) 450 if it is probable support payments will be recaptured or a penalty will be imposed.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Future Adoption of Accounting Standards In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is assessing the timing and impact that adopting this new standard will have on its consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures that expands disclosures of significant segment expenses and includes new disclosures for entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company will implement and provide the required annual disclosures beginning in its Annual Report on Form 10-K for the year ended December 31, 2024.

BASIS OF PRESENTATION, CORPORATE TRANSACTIONS, SIGNIFICANT ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Tables)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

A reconciliation of the denominator used in basic and diluted EPS calculations is shown in the following table:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
(In thousands)
Basic weighted average common shares outstanding	24,220	24,171	24,198	24,046
Effect of dilutive securities:
2017 Option grant	66	54	67	72
2019 Option grant	13	7	13	14
2020 Restricted stock awards	—	—	—	6
2021 Restricted stock awards	4	—	24	6
Total dilutive securities	83	61	104	98
Diluted weighted average common shares outstanding	24,303	24,232	24,302	24,144
Anti-dilutive shares excluded from earnings per diluted shares(1)	—	138	—	94

(1) Shares excluded from the dilutive-effect calculation because the outstanding awards’ exercise prices were greater than the average market price of the Company’s common stock.

REGULATORY DECISION AND RELATED ACCOUNTING AND POLICY CHANGES (Tables)

9 Months Ended

Sep. 30, 2024

Regulated Operations [Abstract]

Schedule of Regulatory Assets

The Company’s regulatory assets and liabilities consist of the following (in thousands):


	Recovery Period	September 30, 2024		December 31, 2023
Regulatory Assets
Acquisition premiums(1)	25 or 50 years	$	2,616	$	1,269
Income taxes recoverable through future rates (2)	Various	1,345		1,404
Rate case expense surcharge(3)	2 years	104		221
Other regulatory assets		45		4
Total regulatory assets		$	4,110	$	2,898

Regulatory Liabilities
Acquired ICFAs(4)		$	4,708	$	4,896
Income taxes payable through future rates(2)		473		488
Depreciation adjustment(5)		682		692
Total regulatory liabilities		$	5,863	$	6,076

(3) Decision No. 78743, issued on October 24, 2022, approved approximately $0.5 million in rate case expenses to be recovered through a rate case expense surcharge over a period of up to two years.

Decision No. 79383 also approved approximately $0.1 million in rate case expenses to be recovered through a rate case expense surcharge over a period of up to a two-years.

(5) Decision No. 78644 approved an adjustment to update previously approved depreciation rates. The adjustment was incorporated into rates in accordance with the rate decision.

Schedule of Regulatory Liabilities

The Company’s regulatory assets and liabilities consist of the following (in thousands):


	Recovery Period	September 30, 2024		December 31, 2023
Regulatory Assets
Acquisition premiums(1)	25 or 50 years	$	2,616	$	1,269
Income taxes recoverable through future rates (2)	Various	1,345		1,404
Rate case expense surcharge(3)	2 years	104		221
Other regulatory assets		45		4
Total regulatory assets		$	4,110	$	2,898

Regulatory Liabilities
Acquired ICFAs(4)		$	4,708	$	4,896
Income taxes payable through future rates(2)		473		488
Depreciation adjustment(5)		682		692
Total regulatory liabilities		$	5,863	$	6,076

(3) Decision No. 78743, issued on October 24, 2022, approved approximately $0.5 million in rate case expenses to be recovered through a rate case expense surcharge over a period of up to two years.

Decision No. 79383 also approved approximately $0.1 million in rate case expenses to be recovered through a rate case expense surcharge over a period of up to a two-years.

(5) Decision No. 78644 approved an adjustment to update previously approved depreciation rates. The adjustment was incorporated into rates in accordance with the rate decision.

REVENUE RECOGNITION (Tables)

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Roll forward of Deferred Revenue


	December 31, 2023 Balance		Payments Allocated to Deferred Revenue		Revenue Recognized		September 30, 2024 Balance
Deferred Revenue - ICFA	$	19,656	$	629	$	—	$	20,285

Schedule of Disaggregation of Revenue

For the three and nine months ended September 30, 2024 and 2023, disaggregated revenues from contracts with customers by major source and customer class are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
REGULATED REVENUE
Water Service
Residential	$	5,034	$	4,900	$	14,003	$	13,261
Irrigation	1,205		1,393		2,459		2,739
Commercial	541		457		1,389		1,184
Construction	469		537		861		1,036
Other water revenues	244		233		675		696
Total water revenues	7,493		7,520		19,387		18,916
Wastewater and recycled water service
Residential	5,796		5,630		17,607		16,725
Commercial	336		317		1,034		906
Recycled water revenues	607		469		1,133		1,062
Other wastewater revenues	89		78		280		265
Total wastewater and recycled water revenues	6,828		6,494		20,054		18,958
TOTAL REGULATED REVENUE	14,321		14,014		39,441		37,874
UNREGULATED REVENUE
ICFA revenues	—		518		—		2,786



TOTAL REVENUE	$	14,321	$	14,532	$	39,441	$	40,660

Schedule of Contract Assets and Liabilities

The Company’s contract assets and liabilities consist of the following (in thousands):


	September 30, 2024		December 31, 2023
CONTRACT ASSETS
Accounts receivable
Water service	$	2,125	$	1,588
Wastewater and recycled water service	1,297		1,379
Total contract assets	$	3,422	$	2,967
CONTRACT LIABILITIES
Deferred revenue - ICFA	$	20,285	$	19,656


Total contract liabilities	$	20,285	$	19,656

Schedule of Accounts Receivable

Accounts receivable as of September 30, 2024 and December 31, 2023 consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Billed receivables	$	3,422	$	2,967
Less provision for credit losses	(151)		(122)
Accounts receivable, net	$	3,271	$	2,845

Schedule of Allowance for Doubtful Accounts Activity

The following table summarizes the allowance for credit loss activity for the nine months ended September 30, 2024 and the year ended December 31, 2023 (in thousands):


	September 30, 2024		December 31, 2023
Beginning of Period	$	(122)	$	(164)
Credit Loss Expense	(69)		(76)
Write Offs	67		124
Recoveries	(27)		(6)
End of Period	$	(151)	$	(122)

PROPERTY, PLANT AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

Depreciable property, plant and equipment as of September 30, 2024 and December 31, 2023 consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Equipment	$	61,519	$	60,536
Office buildings and other structures	64,622		64,084
Transmission and distribution plant	301,530		289,550
Total property, plant and equipment	$	427,671	$	414,170

Depreciation of property, plant and equipment is computed based on the estimated useful lives as follows:


						Useful Lives
Equipment						3 to 30 years
Office buildings and other structures						30 years
Transmission and distribution plant						10 to 50 years

GOODWILL AND INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

As of September 30, 2024 and December 31, 2023, the goodwill balance consisted of the following (in thousands):


	December 31, 2023 Balance		Acquisition Activity		Adjustments Subsequent to Acquisition Date		September 30, 2024 Balance
Goodwill	$	10,820	$	—	$	(1,334)	$	9,486

Schedule of Finite-lived Intangible Assets

As of September 30, 2024 and December 31, 2023, intangible assets consisted of the following (in thousands):


	September 30, 2024						December 31, 2023
	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
INDEFINITE LIVED INTANGIBLE ASSETS:
CP Water Certificate of Convenience & Necessity service area	$	1,532	$	—	$	1,532	$	1,532	$	—	$	1,532
Intangible trademark	13		—		13		13		—		13
Franchise contract rights	139		—		139		139		—		139
Organizational costs	164		—		164		163		—		163
Total indefinite lived intangible assets	1,848		—		1,848		1,847		—		1,847
DEFINITE LIVED INTANGIBLE ASSETS:
Acquired ICFAs	17,978		(16,374)		1,604		17,978		(16,105)		1,873
Sonoran contract rights	7,406		(2,285)		5,121		7,406		(2,285)		5,121
Total definite lived intangible assets	25,384		(18,659)		6,725		25,384		(18,390)		6,994
Total intangible assets	$	27,232	$	(18,659)	$	8,573	$	27,231	$	(18,390)	$	8,841

Schedule of Indefinite-lived Intangible Assets

As of September 30, 2024 and December 31, 2023, intangible assets consisted of the following (in thousands):


	September 30, 2024						December 31, 2023
	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
INDEFINITE LIVED INTANGIBLE ASSETS:
CP Water Certificate of Convenience & Necessity service area	$	1,532	$	—	$	1,532	$	1,532	$	—	$	1,532
Intangible trademark	13		—		13		13		—		13
Franchise contract rights	139		—		139		139		—		139
Organizational costs	164		—		164		163		—		163
Total indefinite lived intangible assets	1,848		—		1,848		1,847		—		1,847
DEFINITE LIVED INTANGIBLE ASSETS:
Acquired ICFAs	17,978		(16,374)		1,604		17,978		(16,105)		1,873
Sonoran contract rights	7,406		(2,285)		5,121		7,406		(2,285)		5,121
Total definite lived intangible assets	25,384		(18,659)		6,725		25,384		(18,390)		6,994
Total intangible assets	$	27,232	$	(18,659)	$	8,573	$	27,231	$	(18,390)	$	8,841

ACCRUED EXPENSES (Tables)

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses as of September 30, 2024 and December 31, 2023 consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Accrued project liabilities	$	2,310	$	1,001
Interest	2,003		480
Accrued bonus	981		602
Property taxes	678		1,242
Dividend payable	606		606
Accrued purchase orders	583		200
Customer prepayments	577		883
Accrued payroll	328		67
Accrued sales taxes	238		179
Deferred compensation	228		239
Accrued electric	213		109

Other accrued liabilities	968		1,521
Total accrued expenses	$	9,713	$	7,129

FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities Measured on Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 were as follows (in thousands):


	September 30, 2024								December 31, 2023
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
HUF funds - restricted cash	$	2,986	$	—	$	—	$	2,986	$	822	$	—	$	—	$	822
Certificate of deposit - restricted	947		—		—		947		—		854		—		854
Demand deposit	1		—		—		1		1		—		—		1
Total	$	3,934	$	—	$	—	$	3,934	$	823	$	854	$	—	$	1,677
Liabilities:
Contingent consideration	$	—	$	—	$	1,946	$	1,946	$	—	$	—	$	2,113	$	2,113
Total	$	—	$	—	$	1,946	$	1,946	$	—	$	—	$	2,113	$	2,113

DEBT (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Outstanding Balances and Maturity Dates for Short Term and Long Term Debt


	September 30, 2024				December 31, 2023
	Short-term		Long-term		Short-term		Long-term
NOTES PAYABLE -
4.38% Senior Secured Notes, Series A, maturing June 2028 (“Series A Notes”)	$	—	28,750		$	—	$	28,750
4.58% Senior Secured Notes, Series B, maturing June 2036 (“Series B Notes”)	3,833		70,917		3,833		72,833
6.91% Senior Secured Notes, maturing January 2034 (“6.91% Notes”)	—		20,000		—		—
4.911% WIFA Note, maturing April 2044 (“4.911% WIFA Note”)	49		1,399		—		—

	3,882		121,066		3,833		101,583
OTHER
Debt issuance costs	—		(784)		—		(426)
Loan Payable	49		145		47		184
Total debt	$	3,931	$	120,427	$	3,880	$	101,341

Schedule of Liabilities Measured on Recurring Basis

Debt is measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 as follows (in thousands):


	September 30, 2024				December 31, 2023
	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Long-term debt(1)	—	124,648	—	124,648	—	100,746	—	100,746

(1) The fair value of debt was estimated based on interest rates considered available for instruments of similar terms and remaining maturities.

DEFERRED COMPENSATION AWARDS (Tables)

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Total Awards Granted, Number of Units Outstanding and Amounts Paid to PSU and RSU Holders and RSA Units Granted and Compensation Expense Related to the Grant

The following table details total awards granted and the number of units outstanding as of September 30, 2024, along with the amounts paid to holders of the restricted stock units (“RSUs”) for the three and nine months ended September 30, 2024 and 2023 (in thousands, except unit amounts):


			Three Months Ended September 30,				Nine Months Ended September 30,
Grant Date	Units Granted	Units Outstanding	2024		2023		2024		2023
Q1 2021	27,403	—	$	—	$	27	$	28	$	85
Q1 2022	22,262	1,778	21		23		67		70
Q1 2023	30,366	11,852	29		31		92		62
Q1 2024	30,962	22,706	31		—		64		—
Total	110,993	36,336	$	81	$	81	$	251	$	217

The following table details the compensation expense related to the grant and partial vesting of previously granted RSAs for the three and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Compensation expense	$	55	$	200	$	450	$	737

Schedule of Deferred Compensation Arrangement with Individual, Share-Based Payments


	RSUs
2024 (remaining period)	$	84
2025	246
2026	127

Total	$	457

Schedule of Recipients of SARs Awards, Grant Date, Units Granted, Exercise Price, Outstanding Shares and Amounts Paid

The following table details the grant date, units granted, exercise price, outstanding units as of September 30, 2024 and amounts paid during the three and nine months ended September 30, 2024 and 2023 (in thousands, except unit and per unit amounts):


					Three Months Ended September 30,				Nine Months Ended September 30,
Grant Date	Units Granted	Exercise Price		Units Outstanding	2024		2023		2024		2023
Q1 2015(1)	299,000	$	4.26	12,500	$	—	$	—	$	—	$	165
Q1 2018(2)	33,000	$	8.99	8,250	—		—		—		—
Total	332,000			20,750	$	—	$	—	$	—	$	165

(1)The exercise price was determined to be the fair market value of one share of GWR Global Water Resources Corp. stock on the grant date of February 11, 2015.

(2)The exercise price was determined to be the fair market value of one share of GWRI stock on the grant date of March 12, 2018.

SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

9 Months Ended

Sep. 30, 2024

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplemental Cash Flow Information

The following is supplemental cash flow information for the nine months ended September 30, 2024 and 2023 (in thousands):


	Nine Months Ended September 30,
	2024		2023
Supplemental cash flow information:
Cash paid for interest - net of amounts capitalized	$	3,114	$	2,343


Cash paid for income taxes	107		276
Non-cash financing and investing activities:
Capital expenditures included in accounts payable and accrued liabilities	3,417		2,251
Utility Plant constructed by developers and conveyed	10,831		11,276
Business acquisition through issuance of contingent consideration payable	—		1,330
Finance lease additions	604		94

BASIS OF PRESENTATION, CORPORATE TRANSACTIONS, SIGNIFICANT ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS - Corporate Transactions (Details) $ / shares in Units, $ in Thousands					3 Months Ended		9 Months Ended
	Apr. 25, 2024 USD ($) waterSystem service_connection	Jun. 08, 2023 USD ($) $ / shares shares	Feb. 01, 2023 USD ($) mi² service_connection	Jul. 14, 2015 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Growth premiums received					$ 900	$ 700	$ 2,200	$ 1,600
Accumulated growth premiums received					$ 12,900		$ 12,900
Farmers Water Company
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of active water connections \| service_connection			3,300
Square miles of approved service area \| mi²			21.5
Maximum payout of growth premium receivable			$ 3,500
Valencia Water Company
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Growth premium receivable for each new water meter installed				$ 3,000
Period for maximum payout of growth premium receivable				20 years
Maximum payout of growth premium receivable				$ 45,000
Private Placement Offering
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of common stock to be issued and sold (in shares) \| shares		230,000
Purchase price (in dollars per share) \| $ / shares		$ 12.07
Gross proceeds from sale of stock		$ 2,800
Affiliates \| Private Placement Offering
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of common stock issued (in shares) \| shares		30,000
Affiliates \| GW-Acquisition \| Tucson City Council, Asset Acquisition
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of water systems acquired \| waterSystem	7
Number of active water connections \| service_connection	2,200
Cash transaction	$ 8,400
Estimated rate base	$ 7,800

BASIS OF PRESENTATION, CORPORATE TRANSACTIONS, SIGNIFICANT ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS - Reconciliation of the Denominator Used in Basic and Diluted EPS Calculations (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Basic weighted average common shares outstanding (in shares)	24,219,564	24,171,228	24,198,270	24,046,493
Effect of dilutive securities (in shares)	83,000	61,000	104,000	98,000
Diluted weighted average common shares outstanding (in shares)	24,302,521	24,231,801	24,301,974	24,144,384
Anti-dilutive shares excluded from earnings per diluted share (in shares)	0	138,000	0	94,000
Option \| 2017 Option grant
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Effect of dilutive securities (in shares)	66,000	54,000	67,000	72,000
Option \| 2019 Option grant
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Effect of dilutive securities (in shares)	13,000	7,000	13,000	14,000
Restricted stock awards \| 2020 Restricted stock awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Effect of dilutive securities (in shares)	0	0	0	6,000
Restricted stock awards \| 2021 Restricted stock awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Effect of dilutive securities (in shares)	4,000	0	24,000	6,000

BASIS OF PRESENTATION, CORPORATE TRANSACTIONS, SIGNIFICANT ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS - Segments (Details)	9 Months Ended
	Sep. 30, 2024 region segment
Segment Reporting Information [Line Items]
Number of operating segments	1
Number of reportable segments	1
ARIZONA
Segment Reporting Information [Line Items]
Number of geographic regions in which operating utility operates \| region	1

BASIS OF PRESENTATION, CORPORATE TRANSACTIONS, SIGNIFICANT ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS - Governmental Funding & Assistance (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Dec. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Government Assistance [Line Items]
Advances and contributions in aid of construction		$ 10,455	$ 8,370
GW - Farmers Utility
Government Assistance [Line Items]
Advances and contributions in aid of construction	$ 0	$ 800
GW - Farmers Utility \| Government Assistance, CIAC, WIFA
Government Assistance [Line Items]
Government assistance, amount	$ 1,600

REGULATORY DECISION AND RELATED ACCOUNTING AND POLICY CHANGES - Additional Information (Details) $ in Thousands	Aug. 01, 2024 USD ($)	Jun. 27, 2024 USD ($)	Jun. 20, 2024 USD ($) utility	Jul. 27, 2022 USD ($)	Sep. 30, 2024 USD ($)	May 10, 2024 system	Jan. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)	Jul. 03, 2023 USD ($)
Public Utilities, General Disclosures [Line Items]
Requested revenue increase			$ 351
Approved collective revenue increase				$ 2,200
Number of isolated systems to acquire \| system						7
Construction work-in-progress					$ 66,703			$ 48,147
Number of regulated utilities that filed a rate case with the ACC \| utility			7
Requested equity capital structure (as a percent)			55.00%
Return on equity, percentage			9.60%
Public utilities, phase-in period				2 years
Water Plant
Public Utilities, General Disclosures [Line Items]
Construction work-in-progress									$ 38,400
Plant placed in service									$ 25,000
Construction cost included in rate base							$ 7,800
Approved bill credit, impact on revenues	$ 570
Arizona Corporation Commission (ACC)
Public Utilities, General Disclosures [Line Items]
Requested revenue increase		$ 1,300

REGULATORY DECISION AND RELATED ACCOUNTING AND POLICY CHANGES - Schedule of Regulatory Assets and Regulatory Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 20, 2024	Dec. 31, 2023	Oct. 24, 2022
Regulatory Liability [Line Items]
Regulatory Assets	$ 4,110		$ 2,898
Regulatory Liabilities	5,863		6,076
Acquired ICFAs
Regulatory Liability [Line Items]
Regulatory Liabilities	4,708		4,896
Income taxes payable through future rates
Regulatory Liability [Line Items]
Regulatory Liabilities	473		488
Depreciation adjustment
Regulatory Liability [Line Items]
Regulatory Liabilities	682		692
Acquisition premiums
Regulatory Liability [Line Items]
Regulatory Assets	2,616	$ 1,800	1,269
Acquisition premiums \| Rincon Water Company, Inc.
Regulatory Liability [Line Items]
Recovery Period		50 years
Regulatory Assets	600
Acquisition premiums \| Francesca, Las Quintas Serenas, Lyn Lee, Mirabell And Tortolita Utilities
Regulatory Liability [Line Items]
Recovery Period		50 years
Regulatory Assets	$ 1,300
Acquisition premiums \| Turner Ranches Irrigation, Inc. and Red Rock Utilities Company
Regulatory Liability [Line Items]
Recovery Period	25 years
Regulatory Assets	$ 700
Acquisition premiums \| Minimum
Regulatory Liability [Line Items]
Recovery Period	25 years
Acquisition premiums \| Maximum
Regulatory Liability [Line Items]
Recovery Period	50 years
Income taxes recoverable through future rates
Regulatory Liability [Line Items]
Regulatory Assets	$ 1,345		1,404
Rate case expense surcharge
Regulatory Liability [Line Items]
Recovery Period	2 years
Regulatory Assets	$ 104		221
Rate case expense surcharge one
Regulatory Liability [Line Items]
Recovery Period				2 years
Regulatory Assets				$ 500
Rate case expense surcharge two
Regulatory Liability [Line Items]
Recovery Period				2 years
Regulatory Assets				$ 100
Other regulatory assets
Regulatory Liability [Line Items]
Regulatory Assets	$ 45		$ 4

REVENUE RECOGNITION - Additional Information (Details)	9 Months Ended
REVENUE RECOGNITION - Additional Information (Details)	Sep. 30, 2024
Revenue from Contract with Customer [Abstract]
Required payment period	15 days
Percentage of ICFA payments, recorded as HUF liability	70.00%
Percentage of overall ICFA funds, recorded as deferred revenue	30.00%

REVENUE RECOGNITION - Schedule of Deferred Revenue - ICFA (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2024 USD ($)
Deferred Revenue Roll Forward:
Beginning balance	$ 19,656
Ending balance	20,285
Deferred Revenue - ICFA
Deferred Revenue Roll Forward:
Beginning balance	19,656
Payments Allocated to Deferred Revenue	629
Revenue Recognized	0
Ending balance	$ 20,285

REVENUE RECOGNITION - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Total revenues	$ 14,321	$ 14,532	$ 39,441	$ 40,660
Regulated Operation
Disaggregation of Revenue [Line Items]
Total revenues	14,321	14,014	39,441	37,874
Regulated Operation \| Water Service
Disaggregation of Revenue [Line Items]
Total revenues	7,493	7,520	19,387	18,916
Regulated Operation \| Water Service \| Residential
Disaggregation of Revenue [Line Items]
Total revenues	5,034	4,900	14,003	13,261
Regulated Operation \| Water Service \| Irrigation
Disaggregation of Revenue [Line Items]
Total revenues	1,205	1,393	2,459	2,739
Regulated Operation \| Water Service \| Commercial
Disaggregation of Revenue [Line Items]
Total revenues	541	457	1,389	1,184
Regulated Operation \| Water Service \| Construction
Disaggregation of Revenue [Line Items]
Total revenues	469	537	861	1,036
Regulated Operation \| Water Service \| Other water revenues
Disaggregation of Revenue [Line Items]
Total revenues	244	233	675	696
Regulated Operation \| Wastewater and recycled water service
Disaggregation of Revenue [Line Items]
Total revenues	6,828	6,494	20,054	18,958
Regulated Operation \| Wastewater and recycled water service \| Residential
Disaggregation of Revenue [Line Items]
Total revenues	5,796	5,630	17,607	16,725
Regulated Operation \| Wastewater and recycled water service \| Commercial
Disaggregation of Revenue [Line Items]
Total revenues	336	317	1,034	906
Regulated Operation \| Wastewater and recycled water service \| Recycled water revenues
Disaggregation of Revenue [Line Items]
Total revenues	607	469	1,133	1,062
Regulated Operation \| Wastewater and recycled water service \| Other wastewater revenues
Disaggregation of Revenue [Line Items]
Total revenues	89	78	280	265
Unregulated Operation \| ICFA revenues
Disaggregation of Revenue [Line Items]
Total revenues	$ 0	$ 518	$ 0	$ 2,786

REVENUE RECOGNITION - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Capitalized Contract Cost [Line Items]
Accounts receivable	$ 3,422	$ 2,967
Deferred revenue - ICFA	20,285	19,656
Total contract liabilities	20,285	19,656
Water service
Capitalized Contract Cost [Line Items]
Accounts receivable	2,125	1,588
Wastewater and recycled water service
Capitalized Contract Cost [Line Items]
Accounts receivable	$ 1,297	$ 1,379

REVENUE RECOGNITION - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Billed receivables	$ 3,422	$ 2,967
Less provision for credit losses	(151)	(122)
Accounts receivable, net	$ 3,271	$ 2,845

REVENUE RECOGNITION - Schedule of Allowance for Doubtful Accounts Activity (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Allowance for doubtful accounts [Roll Forward]
Beginning of Period	$ (122)	$ (164)
Credit Loss Expense	(69)	(76)
Write Offs	67	124
Recoveries	(27)	(6)
End of Period	$ (151)	$ (122)

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 427,671	$ 414,170
Equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 61,519	60,536
Equipment \| Minimum
Property, Plant and Equipment [Line Items]
Useful life	3 years
Equipment \| Maximum
Property, Plant and Equipment [Line Items]
Useful life	30 years
Office buildings and other structures
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 64,622	64,084
Useful life	30 years
Transmission and distribution plant
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 301,530	$ 289,550
Transmission and distribution plant \| Minimum
Property, Plant and Equipment [Line Items]
Useful life	10 years
Transmission and distribution plant \| Maximum
Property, Plant and Equipment [Line Items]
Useful life	50 years

GOODWILL AND INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Jun. 20, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Goodwill [Line Items]
Goodwill		$ 9,486		$ 9,486		$ 10,820
Goodwill reclassified	$ (1,300)			(1,334)
Regulatory assets		4,110		4,110		2,898
Amortization of intangible assets		0	$ 1,400	300	$ 1,400
Acquisition premiums
Goodwill [Line Items]
Regulatory assets	1,800	$ 2,616		$ 2,616		$ 1,269
Acquisition premiums \| GW-Rincon Utility
Goodwill [Line Items]
Regulatory assets	$ 500

GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill (Details) - USD ($) $ in Thousands		9 Months Ended
	Jun. 20, 2024	Sep. 30, 2024
Goodwill [Roll Forward]
December 31, 2023 Balance		$ 10,820
Acquisition Activity		0
Adjustments Subsequent to Acquisition Date	$ (1,300)	(1,334)
September 30, 2024 Balance		$ 9,486

GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
INDEFINITE LIVED INTANGIBLE ASSETS:
Total indefinite lived intangible assets	$ 1,848	$ 1,847
DEFINITE LIVED INTANGIBLE ASSETS:
Gross Amount	25,384	25,384
Accumulated Amortization	(18,659)	(18,390)
Net Amount	6,725	6,994
Total intangible assets, Gross Amount	27,232	27,231
Total intangible assets, Net Amount	8,573	8,841
Acquired ICFAs
DEFINITE LIVED INTANGIBLE ASSETS:
Gross Amount	17,978	17,978
Accumulated Amortization	(16,374)	(16,105)
Net Amount	1,604	1,873
Sonoran contract rights
DEFINITE LIVED INTANGIBLE ASSETS:
Gross Amount	7,406	7,406
Accumulated Amortization	(2,285)	(2,285)
Net Amount	5,121	5,121
CP Water Certificate of Convenience & Necessity service area
INDEFINITE LIVED INTANGIBLE ASSETS:
Total indefinite lived intangible assets	1,532	1,532
Intangible trademark
INDEFINITE LIVED INTANGIBLE ASSETS:
Total indefinite lived intangible assets	13	13
Franchise contract rights
INDEFINITE LIVED INTANGIBLE ASSETS:
Total indefinite lived intangible assets	139	139
Organizational costs
INDEFINITE LIVED INTANGIBLE ASSETS:
Total indefinite lived intangible assets	$ 164	$ 163

TRANSACTIONS WITH RELATED PARTIES (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Affiliates \| Medical Benefits Pool Plan
Related Party Transaction [Line Items]
Medical claims paid	$ 0.3	$ 0.3	$ 0.8	$ 0.6

ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Accrued project liabilities	$ 2,310	$ 1,001
Interest	2,003	480
Accrued bonus	981	602
Property taxes	678	1,242
Dividend payable	606	606
Accrued purchase orders	583	200
Customer prepayments	577	883
Accrued payroll	328	67
Accrued sales taxes	238	179
Deferred compensation	228	239
Accrued electric	213	109
Other accrued liabilities	968	1,521
Accrued expenses	$ 9,713	$ 7,129

FAIR VALUE (Details) - USD ($)		9 Months Ended
FAIR VALUE (Details) - USD ($)	Feb. 01, 2023	Sep. 30, 2024	Dec. 31, 2023
Assets:
Demand deposit		$ 1,000	$ 1,000
Total		3,934,000	1,677,000
Liabilities:
Contingent consideration		1,946,000	2,113,000
Total		$ 1,946,000	2,113,000
Red Rock Utilities
Liabilities:
Growth premium, obligation period, after installation		10 years
Growth premium, obligation period, from acquisition date		20 years
Farmers Water Company
Liabilities:
Growth premium payable	$ 1,000
Maximum payout of growth premium receivable	$ 3,500,000
Growth premium, obligation period	10 years	10 years
Red Rock Utilities
Liabilities:
Growth premium payable		$ 750
HUF funds - restricted cash
Assets:
Restricted cash		2,986,000	822,000
Certificate of deposit - restricted
Assets:
Restricted cash		947,000	854,000
Level 1
Assets:
Demand deposit		1,000	1,000
Total		3,934,000	823,000
Liabilities:
Contingent consideration		0	0
Total		0	0
Level 1 \| HUF funds - restricted cash
Assets:
Restricted cash		2,986,000	822,000
Level 1 \| Certificate of deposit - restricted
Assets:
Restricted cash		947,000	0
Level 2
Assets:
Demand deposit		0	0
Total		0	854,000
Liabilities:
Contingent consideration		0	0
Total		0	0
Level 2 \| HUF funds - restricted cash
Assets:
Restricted cash		0	0
Level 2 \| Certificate of deposit - restricted
Assets:
Restricted cash		0	854,000
Level 3
Assets:
Demand deposit		0	0
Total		0	0
Liabilities:
Contingent consideration		1,946,000	2,113,000
Total		1,946,000	2,113,000
Level 3 \| HUF funds - restricted cash
Assets:
Restricted cash		0	0
Level 3 \| Certificate of deposit - restricted
Assets:
Restricted cash		$ 0	$ 0

DEBT - Schedule of Outstanding Balances and Maturity Dates for Short Term and Long Term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Apr. 30, 2024	Dec. 31, 2023	Oct. 26, 2023
Short-term
Notes payable	$ 3,931		$ 3,880
Loan Payable	49		47
Total debt	3,931		3,880
Long-term
Loan Payable	145		184
Total debt	120,427		101,341
Senior Notes
Short-term
Notes payable	3,882		3,833
Debt issuance costs	0		0
Long-term
Notes payable	121,066		101,583
Debt issuance costs	$ (784)		(426)
Senior Notes \| 4.38% Senior Secured Notes, Series A, maturing June 2028 (“Series A Notes”)
Debt Instrument [Line Items]
Debt instrument, interest rate	4.38%
Short-term
Notes payable	$ 0		0
Long-term
Notes payable	$ 28,750		28,750
Senior Notes \| 4.58% Senior Secured Notes, Series B, maturing June 2036 (“Series B Notes”)
Debt Instrument [Line Items]
Debt instrument, interest rate	4.58%
Short-term
Notes payable	$ 3,833		3,833
Long-term
Notes payable	$ 70,917		72,833
Senior Notes \| 6.91% Senior Secured Notes, maturing January 2034 (“6.91% Notes”)
Debt Instrument [Line Items]
Debt instrument, interest rate	6.91%			6.91%
Short-term
Notes payable	$ 0		0
Long-term
Notes payable	20,000		0
Government Loan \| 4.911% WIFA Note, maturing April 2044 (“4.911% WIFA Note”)
Debt Instrument [Line Items]
Debt instrument, interest rate		4.911%
Short-term
Notes payable	49		0
Long-term
Notes payable	$ 1,399		$ 0

DEBT - Schedule of Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Long-term debt	$ 124,648	$ 100,746
Level 1
Debt Instrument [Line Items]
Long-term debt	0	0
Level 2
Debt Instrument [Line Items]
Long-term debt	124,648	100,746
Level 3
Debt Instrument [Line Items]
Long-term debt	$ 0	$ 0

DEBT - Additional Information (Details) - USD ($)		9 Months Ended
DEBT - Additional Information (Details) - USD ($)	Apr. 30, 2020	Sep. 30, 2024	Apr. 30, 2024	Dec. 31, 2023	Oct. 26, 2023
Debt Instrument [Line Items]
Line of credit		$ 0		$ 2,315,000
Unamortized debt issuance costs (less than)		100,000		$ 100,000
Northern Trust Loan Agreement \| Revolving Credit Facility
Debt Instrument [Line Items]
Revolving line of credit, maximum borrowing capacity	$ 10,000,000	$ 15,000,000
Facility fee on unused amount of line of credit (as a percent)		0.35%
GW-Rincon Utility \| Government Assistance, Loan
Debt Instrument [Line Items]
Government assistance, amount			$ 2,400,000
GW-Rincon Utility \| Government Assistance, Forgiveable Loan
Debt Instrument [Line Items]
Government assistance, amount			$ 700,000
Government Loan \| 4.911% WIFA Note, maturing April 2044 (“4.911% WIFA Note”)
Debt Instrument [Line Items]
Debt instrument, interest rate			4.911%
Government Loan \| GW-Rincon Utility
Debt Instrument [Line Items]
Disbursements received to date		$ 2,100,000
Senior Notes \| 6.91% Senior Secured Notes, maturing January 2034 (“6.91% Notes”)
Debt Instrument [Line Items]
Debt instrument, interest rate		6.91%			6.91%
Aggregate amount					$ 20,000,000
Line of Credit \| Northern Trust Loan Agreement \| Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, term	2 years
Basis spread on variable rate (as a percent)	2.00%
Unused line fee	$ 0

INCOME TAXES - Additional Information (Details)	3 Months Ended		9 Months Ended
INCOME TAXES - Additional Information (Details)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Effective tax rate	26.60%	25.20%	26.30%	26.60%

DEFERRED COMPENSATION AWARDS - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Aug. 31, 2019	Aug. 31, 2017	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period					3 years
Units granted (in shares)					110,993
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense			$ 55	$ 200	$ 450	$ 737
Units granted (in shares)			9,537	6,000	9,537	6,000
Restricted Stock \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period					2 years
Restricted Stock \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period					3 years
2017 stock option grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, options granted (in shares)		465,000
Split-adjusted exercise price of options (in dollars per share)		$ 9.40
Options exercised (in shares)					125,750
Options forfeited (in shares)					70,425
Number of options outstanding (in shares)			268,825		268,825
2017 stock option grant \| Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period					10 years
2019 stock option grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, options granted (in shares)	250,000
Split-adjusted exercise price of options (in dollars per share)	$ 11.26
Options exercised (in shares)					55,994
Options forfeited (in shares)					63,770
Number of options outstanding (in shares)			130,236		130,236
Compensation expense				$ 20		$ 92
2019 stock option grant \| Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period					10 years

DEFERRED COMPENSATION AWARDS - Schedule of Total Awards Granted and Number of Units Outstanding (Details) - Restricted stock units - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			110,993
Units Outstanding (in shares)	36,336		36,336
Amounts Paid	$ 81	$ 81	$ 251	$ 217
Q1 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			27,403
Units Outstanding (in shares)	0		0
Amounts Paid	$ 0	27	$ 28	85
Q1 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			22,262
Units Outstanding (in shares)	1,778		1,778
Amounts Paid	$ 21	23	$ 67	70
Q1 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			30,366
Units Outstanding (in shares)	11,852		11,852
Amounts Paid	$ 29	31	$ 92	62
Q1 2024
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			30,962
Units Outstanding (in shares)	22,706		22,706
Amounts Paid	$ 31	$ 0	$ 64	$ 0

DEFERRED COMPENSATION AWARDS - Schedule of Deferred Compensation Expense (Details) - Restricted stock units $ in Thousands	Sep. 30, 2024 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
2024 (remaining period)	$ 84
2025	246
2026	127
Total	$ 457

DEFERRED COMPENSATION AWARDS - Schedule of Recipients of SARs Awards, Grant Date, Units Granted, Exercise Price, Outstanding Shares and Amounts Paid (Details) - Stock Appreciation Rights (SARs) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			332,000
Units Outstanding (in shares)	20,750		20,750
Amounts Paid	$ 0	$ 0	$ 0	$ 165
Q1 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			299,000
Exercise Price (in dollars per share)			$ 4.26
Units Outstanding (in shares)	12,500		12,500
Amounts Paid	$ 0	0	$ 0	165
Q1 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			33,000
Exercise Price (in dollars per share)			$ 8.99
Units Outstanding (in shares)	8,250		8,250
Amounts Paid	$ 0	$ 0	$ 0	$ 0

DEFERRED COMPENSATION AWARDS - Schedule of RSA Units Granted and Compensation Expense Related to the Grant (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 55	$ 200	$ 450	$ 737

SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Supplemental cash flow information:
Cash paid for interest - net of amounts capitalized	$ 3,114	$ 2,343
Cash paid for income taxes	107	276
Non-cash financing and investing activities:
Capital expenditures included in accounts payable and accrued liabilities	3,417	2,251
Utility Plant constructed by developers and conveyed	10,831	11,276
Business acquisition through issuance of contingent consideration payable	0	1,330
Finance lease additions	$ 604	$ 94

COMMITMENTS AND CONTINGENCIES (Details) $ in Millions	3 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions	Sep. 30, 2024 USD ($) meter account	Dec. 31, 2023 USD ($)
Loss Contingencies [Line Items]
ICFA fee liability	$ (0.9)	$ (0.9)
Farmers Water Company
Loss Contingencies [Line Items]
Growth premium liability	1.2	1.3
Red Rock Utilities
Loss Contingencies [Line Items]
Growth premium liability	0.7	$ 0.8
Change in contingent consideration	$ 0.1
Number of meters installed \| meter	0
Number of accounts established \| account	0