Global Water Resources Inc (GWRS) 2024 Q4 法說會逐字稿

Greetings, ladies and gentlemen. Thank you for standing by. Welcome to the Global Water Resources, Inc. 2024 Year-End Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. (Operator Instructions) I would like to remind everyone that this call is being recorded on March 6, 2025, at 1 PM Eastern time.

女士們、先生們，大家好。感謝您的支持。歡迎參加全球水資源公司 2024 年年終電話會議。此時，所有參與者都處於只聽模式。演講結束後，我們將進行問答環節。（操作員指示）我想提醒大家，本次通話將於 2025 年 3 月 6 日東部時間下午 1 點錄製。

I would now like to turn the conference over to Joanne Ellsworth, Executive Vice President, Corporate Affairs. Please go ahead.

現在，我想將會議交給公司事務執行副總裁 Joanne Ellsworth。請繼續。

Welcome, everyone, and thank you for joining us on today's call. Yesterday, we issued our 2024 year-end financial results by press release, a copy of which is available on our website at www.gwresources.com. Speaking today is Ron Fleming, President and Chief Executive Officer, Mike Liebman, Chief Financial Officer, and Chris Krygier, Chief Operating Officer.

歡迎大家，感謝你們參加今天的電話會議。昨天，我們透過新聞稿發布了 2024 年年終財務業績，您可以在我們的網站 www.gwresources.com 上查閱該新聞稿的副本。今天發言的是總裁兼執行長 Ron Fleming、財務長 Mike Liebman 和營運長 Chris Krygier。

Ron will summarize the key operational events of the year. Mike will review the financial results for the year-end, and Chris will review strategic initiatives and Arizona Corporation Commission activity. Ron, Mike, and Chris will be available for questions at the end of the call.

羅恩將總結今年的關鍵營運事件。麥克將審查年終的財務結果，克里斯將審查戰略舉措和亞利桑那州公司委員會的活動。通話結束時，Ron、Mike 和 Chris 將會回答問題。

Before we begin, I would like to remind you that certain information presented today may include forward-looking statements. Such statements reflect the company's current expectations, estimates, projections, and assumptions regarding future events. These forward-looking statements involve a number of assumptions, risks, uncertainties, estimates, and other factors that could cause actual results to differ materially from those contained in the forward-looking statements.

在我們開始之前，我想提醒您，今天提供的某些資訊可能包含前瞻性陳述。這些聲明反映了公司對未來事件的當前預期、估計、預測和假設。這些前瞻性陳述涉及許多假設、風險、不確定性、估計和其他因素，可能導致實際結果與前瞻性陳述中的結果有重大差異。

Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements, which reflect management's views as of the date hereof and are not guarantees of future performance. For additional information regarding factors that may affect future results, please read the sections Risk Factors and Management's Discussion and Analysis of Financial Conditions and Results of Operations included within our latest Form 10-K filed with the SEC. Such filings are available at www.sec.gov.

因此，提醒投資者不要過度依賴任何前瞻性陳述，這些陳述反映了管理層截至本文發布之日的觀點，並不能保證未來的業績。有關可能影響未來結果的因素的更多信息，請閱讀我們向美國證券交易委員會提交的最新 10-K 表格中的“風險因素”和“管理層對財務狀況和經營成果的討論和分析”部分。此類文件可在 www.sec.gov 上查閱。

Certain non-GAAP measures may be included within today's call. For a reconciliation of these measures to the comparable GAAP financial measures, please see the tables included in yesterday's earnings release, which is available on our website.

今天的電話會議中可能會包含某些非公認會計準則指標。要了解這些指標與可比較 GAAP 財務指標的對照情況，請參閱昨天收益報告中的表格，該表格可在我們的網站上找到。

I will now turn the call over to Ron.

現在我將電話轉給羅恩。

Thank you, Joanne. Good morning, everyone, and thank you for joining us today. We are very pleased to report the results of year-end 2024. Before I get to my normal operational highlights, I want to highlight a very meaningful subsequent event that occurred just yesterday, the filing of a rate case for our largest utilities, Santa Cruz Water Company and Palo Verde Utilities Company, based on a 2024 test year. More information will be shared on the rate application later on this call and moving forward.

謝謝你，喬安妮。大家早安，感謝大家今天加入我們。我們非常高興地報告 2024 年底的業績。在介紹正常營運亮點之前，我想強調昨天發生的一件非常有意義的後續事件，即根據 2024 年的測試年，我們最大的公用事業公司聖克魯斯水務公司和帕洛弗迪公用事業公司提交了一份費率案。我們將在本次電話會議稍後及未來分享更多有關利率應用的資訊。

I will now provide operational highlights. Total active service connections increased 4.4% to $64,520 as of December 30, 2024, from the 12 months prior. In 2024, we invested $32.3 million into infrastructure improvements in existing utilities to provide safe and reliable service. And finally, with public health and safety being our top mandate, we are very proud of our compliance record. For 2024, we had zero significant compliance events, continuing our streaks from 2023 and prior. In fact, this means it has been nearly eight years without a significant compliance event.

我現在將介紹營運重點。截至 2024 年 12 月 30 日，活躍服務總連線數較 12 個月前成長 4.4%，達到 64,520 美元。2024 年，我們投資 3,230 萬美元用於改善現有公用事業的基礎設施，以提供安全可靠的服務。最後，公共健康和安全是我們的首要任務，我們對我們的合規記錄感到非常自豪。2024 年，我們沒有發生任何重大合規事件，延續了 2023 年及之前的狀態。事實上，這意味著已經有近八年沒有重大合規事件了。

Now, I want to discuss organic customer growth and what is going on in our core utilities further. The single-family dwelling unit market ended 2023 with approximately 22,582 building permits issued in the Phoenix Greater Metropolitan Statistical Area.

現在，我想進一步討論有機客戶成長以及我們核心實用程式的進展。截至 2023 年，鳳凰城大都會統計區單戶住宅市場共發放了約 22,582 張建築許可證。

In 2024, this market realized 27,156 building permits, representing a 20.3% increase from 2023. In 2023, the City of Maricopa issued 884 single-family dwelling building permits. In 2024, this Maricopa market realized 986 building permits, representing a 11.5% increase from 2023. So, as you can see, the 2024 permit data was strong in both Metro Phoenix and the City of Maricopa.

2024年，該市場將獲得27,156份建築許可證，比2023年成長20.3％。2023 年，馬里科帕市頒發了 884 張單戶住宅建築許可證。2024 年，馬里科帕市場獲得了 986 份建築許可證，比 2023 年增加了 11.5%。因此，如您所見，2024 年的許可數據在鳳凰城大都會區和馬里科帕市都很強勁。

Some contend there remains a housing shortage in Metro Phoenix, and thus, over time, Metro Phoenix will retain an annual run rate of approximately 30,000 housing units per year to keep up with net in-migration and this job growth. This demand must be met by a combination of single-family dwelling units and multifamily.

有些人認為，大鳳凰城地區仍然存在住房短缺，因此，隨著時間的推移，大鳳凰城地區每年將保持約 3​​0,000 套住房的運行率，以跟上淨移民和就業增長的步伐。必須透過單戶住宅和多戶住宅的結合來滿足這一需求。

On this note, as previously reported, there is a significant shift occurring in the City of Maricopa to large-scale, high-density, multifamily dwelling complexes, along with more commercial and retail businesses. We believe this shift will be notable and, at some level, supplant the reduction in single-family home growth. In fact, in 2024, multifamily housing unit data was also strong in the City of Maricopa, with 1,200 units permitted compared to just 636 units permitted for 2023. This represents an increase of 885 units permitted, or 88.7%.

就此而言，正如先前報導的那樣，馬里科帕市正在發生重大轉變，向大規模、高密度、多戶住宅綜合體轉變，同時商業和零售業務也越來越多。我們相信這種轉變將是顯著的，並且在某種程度上取代單戶住宅成長的減少。事實上，2024 年馬里科帕市的多戶住宅單元數據也很強勁，允許建造 1,200 套，而 2023 年僅允許建造 636 套。這意味著許可證數量增加了 885 個單位，即 88.7%。

Looking ahead, there is a record number of additional multifamily projects in some stage of development. The fact is, the booming economy and net in-migration that Arizona continues to realize requires more and more places for people to live, work, and play. That is why large-scale multifamily housing, commercial, and recreational projects continue to accelerate at an extremely high pace in Metro Phoenix and in our service areas.

展望未來，處於開發階段的多戶型項目數將創下紀錄。事實上，亞利桑那州蓬勃發展的經濟和不斷增長的淨移民數量需要越來越多的地方供人們居住、工作和娛樂。這就是為什麼大型多戶住宅、商業和娛樂項目在鳳凰城大都會區和我們的服務區域繼續以極高的速度加速發展的原因。

Additionally, the industrial manufacturing boom also continues. Previously, looking all the way back to 2022, that was the single best year for Arizona all the time from an industrial economic development investment perspective, and that was eclipsed in 2023, with $40.7 billion invested in the state. In 2024, $50 billion was invested into the state.

此外，工業製造業的繁榮也持續進行。先前，回顧 2022 年，從工業經濟發展投資的角度來看，這是亞利桑那州有史以來最好的一年，而 2023 年則超越了這一水平，該州的投資額達到 407 億美元。2024年，該州的投資額為500億美元。

There has been significant further announcements made in 2024 and 2025, not in those numbers yet, including the most recent $100 billion announcement on the additional plan expansions at TSMC, which is in addition to the $68 billion they previously announced. Frankly, what continues to occur here in Arizona is unprecedented. In fact, the all-in TSMC investment of $168 billion would be the single largest direct foreign investment in the history of our country, and it's just one of the many announcements not yet in the historical numbers. That all together will forever change the face of Metro Phoenix.

2024 年和 2025 年已經發布了進一步的重要公告，但尚未達到這些數字，包括最近宣布的台積電額外計劃擴張的 1000 億美元，這是在之前宣布的 680 億美元的基礎上的額外投資。坦白說，亞利桑那州持續發生的事情是前所未有的。事實上，台積電1,680億美元的全額投資將是我國史上最大的單筆外國直接投資，而這只是眾多尚未載入史冊的公告之一。這一切將永遠改變鳳凰城的面貌。

Because of these things, we remain bullish on the future potential of our Inland Port Arizona service area, where Procter & Gamble acquired land. Of note, we did sign the actual special industrial contract with P&G in December of 2024, and we are awaiting their notice to proceed.

有鑑於這些因素，我們仍然看好寶潔公司收購土地的亞利桑那州內陸港服務區的未來潛力。值得注意的是，我們確實在 2024 年 12 月與寶潔簽署了實際的特殊工業合同，我們正在等待他們的通知以繼續進行。

And we continue discussing potential projects for several large firms that would locate adjacent to P&G. While it's hard to forecast large-scale industrial growth, we do believe it is a matter of when, not if, and it will be a meaningful utility addition to our company. Additionally, the City of Maricopa continues progress on a recently announced large industrial complex consisting of over 1,200 acres of projects.

我們將繼續討論幾家位於寶潔附近的大公司的潛在項目。雖然很難預測大規模的工業成長，但我們確實相信這只是時間問題，而不是是否會發生的問題，而且它將為我們的公司帶來有意義的實用補充。此外，馬里科帕市繼續推進最近宣布的佔地超過 1,200 英畝的大型工業綜合體計畫。

While this project is still several years away from generating revenue, it represents another opportunity for notable growth for our company. Based on all of these trends, we believe that in the years to come, we will continue to see considerable large-scale commercial, multifamily, and industrial growth, in addition to the strong organic housing growth that continues year after year in our service areas. As I mentioned in our last earnings call, yes, high inflation and other cost drivers have caught up with us and are impacting our earnings growth.

雖然該專案距離產生收入還需要幾年時間，但它代表著我們公司另一個顯著成長的機會。基於所有這些趨勢，我們相信，在未來幾年，除了我們服務區域內逐年持續強勁的有機住房增長之外，我們還將繼續看到大規模商業、多戶型和工業的大幅增長。正如我在上次收益電話會議上提到的那樣，高通膨和其他成本驅動因素已經影響到我們的收益成長。

However, it's important to recognize that 2024 was a test year for our largest utilities, whose last test year was five years ago in 2019. We need new rates to address all the cost increases over that time period and the significant investments we have made.

然而，重要的是要認識到，2024 年是我們最大的公用事業公司的測試年，其上一次測試年是五年前的 2019 年。我們需要新的費率來應對那段時期內的所有成本增加以及我們所做的大量投資。

As you can now see from our many related announcements, between multiple dockets, we now have over $7.5 million in rate increases proposed and under consideration at the ACC. Chris will discuss this further, as well as the considerable rate-based growth captured in our rate case filing, as we have invested significantly into these growing communities.

正如您從我們的許多相關公告中看到的，在多個案卷之間，我們現在已經在 ACC 提議和考慮了超過 750 萬美元的費率上漲。克里斯將進一步討論這一點，以及我們在費率案例文件中記錄的基於費率的顯著增長，因為我們對這些不斷發展的社區進行了大量投資。

While 2024 was another solid year for Global Water, putting all of these things together, meaning the four ways we grow our utility company, one, organic connections, two, new greenfield utilities, three, acquisitions, and four, rate cases, you can see how Global Water is going to be able to grow considerably in the years to come. In fact, to close my opening portion of today's earnings call, I want to provide a five-year look back from 2024. That is our current rate case test year for our largest utilities, and that look back goes to 2019, which was the last rate case test year.

雖然 2024 年對 Global Water 來說又是穩健的一年，但將所有這些因素綜合起來，意味著我們發展公用事業公司的四種方式：一、有機連接，二、新的綠地公用事業，三、收購，四、費率案例，您可以看到 Global Water 將如何在未來幾年實現大幅增長。事實上，在今天的收益電話會議的開頭部分結束時，我想回顧一下 2024 年以來的五年。這是我們目前對最大的公用事業公司進行利率案例測試的年份，回顧 2019 年，這是最後一個利率案例測試年份。

From 2019 to 2024, we have grown active connections by 40.8%, we have grown revenue by 48.4%, and we have grown EPS by 119%. This was the period of COVID, supply chain issues, and historic inflation.

從 2019 年到 2024 年，我們的活躍連結數成長了 40.8%，營收成長了 48.4%，每股盈餘成長了 119%。這是新冠疫情、供應鏈問題和歷史性通貨膨脹的時期。

So when you consider that current rates do not include the rate adjustment for all of the expense growth and investments over those years, you can start to see how earnings can continue to outperform over the next five years as well.

因此，當您考慮到當前利率不包括這些年來所有費用增長和投資的利率調整時，您就可以開始看到收益在未來五年內如何繼續表現出色。

I will now turn the call over to Mike for financial highlights.

現在我將把電話轉給麥克，介紹財務要點。

Thanks, Ron. Hello, everyone.

謝謝，羅恩。大家好。

Total revenue for 2024 was 52.7 million, which was down 0.3 million, or 0.6% compared to 2023. The decrease in revenue was primarily attributable to revenue from infrastructure coordination and financing agreements, also known as ICFAs, in 2023 that did not recur in 2024, and was largely offset by an increase in regulated revenue as a result of a 4.4% increase in active service connections. A more fulsome explanation of ICFAs can be found in our quarterly and annual filings.

2024 年總營收為 5,270 萬美元，與 2023 年相比下降 30 萬美元，降幅為 0.6%。收入減少主要歸因於 2023 年基礎設施協調和融資協議（也稱為 ICFA）的收入，但 2024 年並未再次出現，並且由於活躍服務連接增加 4.4% 導致的受監管收入增加，在很大程度上抵消了這一減少。在我們的季度和年度文件中可以找到對 ICFA 更詳細的解釋。

However, just for some background, ICFAs are agreements we entered into with developers and home builders whereby Global Water provides services to plan, coordinate, and finance the water and wastewater infrastructure that would otherwise be required to be performed or subcontracted by the developer or home builder.

然而，僅供參考，ICFA 是我們與開發商和房屋建築商達成的協議，根據該協議，Global Water 提供服務來規劃、協調和資助水和廢水基礎設施，否則這些基礎設施將需要由開發商或房屋建築商執行或分包。

Revenue associated with ICFAs is variable and dependent on the timing of activities by individual developers and home builders. Regulated revenue, which excludes ICFA revenue for 2024, was $52.7 million, which was up $2.5 million, or 4.9% compared to 2023. The increase was primarily due to the increase in organic connection growth.

與 ICFA 相關的收入是可變的，取決於各個開發商和房屋建築商的活動時間。2024 年受監管收入（不包括 ICFA 收入）為 5,270 萬美元，比 2023 年增加 250 萬美元，增幅為 4.9%。這一增長主要歸因於有機連接的增長。

Operating expenses for 2024 were $43.3 million compared to $40.7 million in 2023. This is an increase of approximately $2.6 million, or 6.3%. Notable changes in operating expenses included a $1.3 million increase in depreciation and amortization, which was substantially attributable to a 10% increase in depreciable fixed assets as a result of our increased capital investments and the commissioning of related projects.

2024 年營運費用為 4,330 萬美元，而 2023 年為 4,070 萬美元。這增加了約 260 萬美元，即 6.3%。營運費用的顯著變化包括折舊和攤銷增加 130 萬美元，這主要歸因於我們增加資本投資和相關項目的調試導致折舊固定資產增加 10%。

Next, we saw increased operating and maintenance costs by $1.1 million, which was primarily attributable to increases in medical expenses and salary and wages, as well as additional costs for purchase power due to increased consumption and increases in other expenses, including phone, internet, and IT services. And lastly, we had a small increase of $245,000 in G&A expense.

其次，我們發現營運和維護成本增加了 110 萬美元，這主要歸因於醫療費用和工資的增加，以及由於消費增加而導致的購買力額外成本和其他費用的增加，包括電話、網路和 IT 服務。最後，我們的一般及行政費用小幅增加了 245,000 美元。

Now to discuss other income and expense. Other expense for 2024 was $1.5 million, which was slightly higher than other expense of $1.4 million in 2023. Net income for 2024 was $5.8 million, or $0.24 per diluted share, as compared to $8 million, or $0.33 per diluted share in 2023. Adjusted net income for 2024, which excludes impact of ICFA-related activity, was up just over $100,000, or 2%, to $6.3 million, or $0.26 per diluted share, as compared to $6.2 million, or $0.26 per diluted share in 2023.

現在討論其他收入和支出。2024 年的其他支出為 150 萬美元，略高於 2023 年的 140 萬美元。2024 年淨收入為 580 萬美元，即每股攤薄收益 0.24 美元，而 2023 年淨收入為 800 萬美元，即每股攤薄收益 0.33 美元。2024 年調整後淨收入（不包括 ICFA 相關活動的影響）上漲逾 10 萬美元，即 2%，達到 630 萬美元，即每股攤薄收益 0.26 美元，而 2023 年則為 620 萬美元，即每股攤薄收益 0.26 美元。

Lastly, to talk about adjusted EBITDA, which adjusts for non-recurring items, such as ICFA revenue as well as non-cash items, such as restricted stock expense. Adjusted EBITDA was $26.7 million in 2024, compared to $25.3 million in 2023. This is an increase of $1.3 million, or 5.2%.

最後，談談調整後的 EBITDA，它調整了非經常性項目，例如 ICFA 收入以及非現金項目，例如限制性股票費用。2024 年調整後 EBITDA 為 2,670 萬美元，而 2023 年為 2,530 萬美元。這增加了 130 萬美元，即 5.2%。

This concludes our update on the year-end 2024 financial results. I'll now pass the call to Chris to review our regulatory activity and strategic initiatives for the quarter.

這是我們對 2024 年年終財務表現的更新。我現在將電話轉給克里斯，讓他回顧我們本季的監管活動和策略舉措。

Thank you, Mike. And hello, everyone. Since the last time we spoke, we had a number of constructive developments on the acquisition and regulatory front. A big thank you to our regulatory affairs team for all of their hard work. First, on January 22, 2025, the Arizona Corporation Commission unanimously approved our proposed acquisition of the city of Tucson assets. This acquisition represents another step in building economies of scale in the region at an attractive purchase price.

謝謝你，麥克。大家好。自上次談話以來，我們在收購和監管方面取得了一些建設性進展。非常感謝我們的監管事務團隊的辛勤工作。首先，2025 年 1 月 22 日，亞利桑那州公司委員會一致批准了我們提出的收購圖森市資產的提案。此次收購代表該公司以極具吸引力的收購價格在該地區建立規模經濟的又一步。

We continue working on the acquisition finalization and are looking to close in the first half of 2025. Upon closing, this will increase our customers in this region from 5,000 connections to 7,000 connections. As many of you will recall, we had zero customers in this region when we started this campaign in 2020.

我們將繼續致力於收購的最終完成，並預計在 2025 年上半年完成。交易完成後，我們在該地區的客戶數量將從 5,000 個增加到 7,000 個。你們很多人可能還記得，當我們在 2020 年發起這項活動時，我們在該地區還沒有客戶。

Second, as you may have seen in our press release, we reached a unanimous settlement for our global water farmers' rate case. The settlement, if adopted, authorizes an approximate $1.1 million revenue increase, over 85% of our request, to be phased in in 2025 and 2026. The next step in the process is for the administrative law judge to issue what's called a recommended opinion in order for the commission to consider.

其次，正如您可能在我們的新聞稿中看到的，我們就全球水農費率案達成了一致和解。如果該協議獲得通過，將授權增加約 110 萬美元的收入，超過我們要求的 85%，並將於 2025 年和 2026 年分階段實施。流程的下一步是行政法官發布所謂的建議意見，以供委員會考慮。

This is the second rate case we have settled under the commission's new settlement policy. The settlement demonstrates our successful track record of buying troubled utilities, improving them for customers, and ultimately seeking appropriate rate relief.

這是我們根據委員會的新解決政策解決的第二起案件。這項和解證明了我們在收購問題公用事業、為客戶改善服務以及最終尋求適當的費率減免方面的成功記錄。

Finally, as you heard Ron mention earlier, yesterday afternoon, we filed the 2025 rate case for our global water Santa Cruz and global water Palo Verde utilities. The proposed rate increase requests approximately $6.5 million of new revenue, with the first phase to be implemented in May 2026 and the second phase in January 2027. The driver of the rate increase is due to three factors. First, inflation, as you heard Ron mention earlier, because our last test year that we're currently operating under is a 2019 cost structure.

最後，正如您之前聽到羅恩提到的那樣，昨天下午，我們為全球水務聖克魯斯和全球水務帕洛維德公用事業公司提交了 2025 年費率案例。擬議的加息將帶來約 650 萬美元的新收入，第一階段將於 2026 年 5 月實施，第二階段將於 2027 年 1 月實施。推動利率上漲的原因有三。首先，通貨膨脹，正如您之前聽到羅恩提到的那樣，因為我們目前正在進行的最後一個測試年是 2019 年的成本結構。

Second, continued capital investment to keep up with organic growth in the city of Maricopa, which you'll recall from previous discussions is the fifth fastest growing city in the United States. And third, rate base recognition of our Southwest plant investment. The rate case also proposes a remedy to deal with the premature revenue collection issue that we noted in 2024.

其次，持續進行資本投資以跟上馬里科帕市的有機成長，您可能還記得，從先前的討論中可以看出，馬里科帕市是美國成長速度第五快的城市。第三，對我們西南工廠投資的利率基準確認。該費率案例還提出了補救措施，以解決我們在 2024 年註意到的過早徵收收入問題。

The rate case is based on a December 31st, 2024 test year end, with post-test year plant investments through December 31st, 2025. The application requests an overall rate base for these utilities of approximately $165 million, which is an increase of approximately 47% over our prior rate case, decision number 78644 for these same utilities. The application requests an equity component of approximately 55% and a return on equity of 10.2%.

此費率案例基於 2024 年 12 月 31 日的測試年末，測試年後的工廠投資截至 2025 年 12 月 31 日。該申請要求這些公用事業的總費率基數為約 1.65 億美元，比我們先前的費率案例（針對這些公用事業的決策編號 78644）增加了約 47%。該申請要求股權成分約為 55%，股本回報率為 10.2%。

The rate case also includes an innovative proposal to implement what we are calling a Cost of Service Adjustment, or CSA, which, if approved, would create a formula rates like type approach used at FERC, the Federal Energy Regulatory Commission. If approved, this would enable us to change rates annually in between general rate cases, helping reduce regulatory lag for customers and the company.

此費率案例還包括一項創新提案，即實施我們所謂的服務成本調整（CSA），如果獲得批准，將創建一個類似於聯邦能源管理委員會 (FERC) 使用的方法的公式費率。如果獲得批准，這將使我們能夠在一般費率案例之間每年更改費率，從而有助於減少客戶和公司的監管滯後。

Lastly, just a process overview for those new to the Arizona regulatory regime. The first step in the rate case process is for the Arizona Corporation Commission Utilities Division staff to review the application for what is called sufficiency, which takes approximately 30 days. After that, Utilities Division staff and any interveners will typically issue their recommendations in a report 180 days later, which is approximately late Q3 of this year. Our goal in this rate case is to settle the rate case like we did in the Global Water Saguaro and Global Water Farmers rate cases.

最後，對於那些不熟悉亞利桑那州監管制度的人來說，這只是一個流程概述。費率個案處理過程的第一步是亞利桑那州公司委員會公用事業部門工作人員審查申請是否充分，這大約需要 30 天。此後，公用事業部門的工作人員和任何干預人員通常會在 180 天後（大約是今年第三季末）在報告中發布他們的建議。我們在此費率案中的目標是像在全球水資源 Saguaro 案和全球水資源農民費率案中所做的那樣解決費率案。

Finally, as always, please see the 10-K for additional information and disclosures related to our Arizona Corporation Commission activity. This concludes the update on acquisitions and regulatory activity for the quarter. I'll now pass the call back to Ron.

最後，與往常一樣，請參閱 10-K 以獲取與我們的亞利桑那州公司委員會活動有關的更多資訊和披露。本季收購和監管活動的最新情況到此結束。我現在將電話轉回給羅恩。

Thank you, Chris. To close today, I wanted to express how proud I am of our team. Yes, while there is an interesting mix of tailwinds and headwinds in the economy right now, and our stock price has pulled back over the last few years, I believe the last five years of performance are evidence of our ability to materially improve on all meaningful utility metrics despite such conditions.

謝謝你，克里斯。今天結束時，我想表達我對我們團隊的自豪感。是的，雖然目前經濟狀況好壞參半，而且我們的股價在過去幾年裡有所回落，但我相信過去五年的表現證明了我們有能力在各種條件下實質地改善所有有意義的效用指標。

This is because of our people, our plan, our foundation, and our unique local geographical dynamics. As we execute our growth plan, we intend to remain at the forefront of the water management industry and advance our mission of achieving efficiency and consolidation. We truly believe that expanding our total water management platform and applying our expertise throughout our regional service areas into new utilities will be beneficial to all stakeholders involved.

這是因為我們的人民、我們的計劃、我們的基礎以及我們獨特的當地地理動態。在執行成長計畫的過程中，我們打算繼續保持水管理產業的領先地位，並推動實現效率和整合的使命。我們堅信，擴大我們的整體水管理平台並將我們的專業知識應用於整個區域服務領域的新公用事業將使所有相關利益相關者受益。

We appreciate your investment in and support of us as we grow Global Water to address important utility, water resource, and economic development matters along the Arizona-Sun Corridor, allowing our communities to thrive.

我們感謝您對我們的投資和支持，我們將發展全球水務，解決亞利桑那陽光走廊沿線的重要公用業務、水資源和經濟發展問題，使我們的社區繁榮發展。

These highlights conclude our prepared remarks. Thank you. We are now available to answer your questions.

這些要點總結了我們準備好的發言。謝謝。我們現在可以回答您的問題。

(Operator Instructions)

（操作員指示）

Gerry Sweeney with ROTH Capital.

羅仕資本 (ROTH Capital) 的 Gerry Sweeney。

Good morning or good afternoon, depending on where you are. Thanks for taking my call, guys.

早上好或下午好，取決於您所在的地方。謝謝你們接聽我的電話。

I want to touch base a little bit more on the CSA or the formula rates. Obviously, I think this is a pretty big development in terms of reducing regulatory lag. And I was wondering if you could give a little bit more details. I mean, would there be certain caps on the amount you could spend or any requirements, debt equity parameters? Just a little bit more details, because I think it's an important opportunity to know?

我想進一步談談 CSA 或公式費率。顯然，我認為這在減少監管滯後方面是一個相當大的進步。我想知道您是否可以提供更多細節。我的意思是，您可以支出的金額或任何要求、債務股權參數是否會有一定的上限？再詳細說一下，因為我認為這是一個了解情況的重要機會？

Thanks, Gerry. This is Chris. Yes, happy to give some more color on there.

謝謝，格里。這是克里斯。是的，很高興能提供更多色彩。

So maybe as a first background, so at the end of 2024, the commission passed a policy statement basically making this a new tool in the toolbox that utilities can consider. And it was based on the FERC model just due to the track record at FERC and the kind of history of success that's worked for customers and the utilities to continue investing. So the way we have proposed it is we've taken some of those elements but made it more applicable to water utilities and our situation.

因此，也許作為第一個背景，在 2024 年底，委員會通過了一項政策聲明，基本上使其成為公用事業公司可以考慮的工具箱中的新工具。它基於 FERC 模型，因為 FERC 擁有良好的業績記錄以及為客戶和公用事業公司繼續投資所取得的成功歷史。因此，我們提出的方案是，我們採用了其中的一些元素，但使其更適用於水務公司和我們的情況。

And so under the proposal, each year we would essentially update our income statement for all the changes in expenses and update our balance sheet for all of the new investments that we've made and essentially put that through the formula. It would then go through a kind of expedited review under the proposal, and you'd basically be updating rates annually. And so we think that there is an increase to transparency from the customers because that's going to give the commission additional opportunities to kind of review and audit our financials each year. But it also allows us to be more contemporaneous with investments and changes to the customer's bill.

因此，根據該提案，每年我們都會根據所有支出變化更新我們的損益表，並根據我們所做的所有新投資更新我們的資產負債表，並將其納入公式。然後，根據提案，它將經過快速審查，基本上每年都會更新利率。因此，我們認為客戶的透明度有所提高，因為這將為委員會提供更多機會來每年審查和審計我們的財務狀況。但它也使我們能夠更同步地了解客戶帳單的投資和變化。

There's also elements for allowing certain components of what we decide in the rate case to basically be finalized in the formula so we don't have to update those so the capital structure from the rate case would come through to the formula and depreciation rates and some of those more typical elements so you don't have to update those. But overall, we think that there is a real benefit here to passing things through.

還有一些元素允許我們在利率案例中決定的某些組成部分基本上在公式中最終確定，所以我們不必更新這些元素，因此利率案例中的資本結構將透過公式和折舊率以及一些更典型的元素來體現，所以你不必更新這些元素。但整體而言，我們認為傳遞訊息確實有好處。

And the other last element I'll leave you with is we've proposed it as a five-year program. So essentially, we'd finish this rate case, have five years running through the formula, and then there would be a requirement for another full rate case. So we think that's another element that benefits both customers and us.

我要告訴你們的最後一點是，我們已將其作為五年計劃。因此，本質上，我們會完成這個費率案例，用五年時間運行該公式，然後就會需要另一個全費率案例。因此我們認為這是另一個對客戶和我們都有利的因素。

That's super helpful. So here's a step forward for you guys. So question maybe for Ron.

這非常有幫助。所以這對你們來說是一個進步。所以也許可以問一下羅恩。

I understand industrial business is somewhat hard to predict. But with the Procter & Gamble, if you get a notice to proceed, what does that generally mean for investment or even moving that project forward and visibility on potential revenues?

我知道工業業務有點難以預測。但是對於寶潔公司來說，如果你收到了繼續進行的通知，這對投資甚至推動該項目向前發展以及潛在收入的可見性通常意味著什麼？

Yes, I'll have to answer that, Jerry. I'll talk a little bit generically than specifically, but this is how our process works for Procter & Gamble or really anybody that locates there or other industrial customers in the future. That notice to proceed is where they finally release to us their full plans on what they are going to construct as part of their Phase 1, in addition to what they're ultimately planning longer term so we can create the right utility solution and phasing plan ourselves.

是的，我必須回答這個問題，傑瑞。我會泛泛地講一下，而不是具體地講，但這就是我們為寶潔公司或任何在那裡落戶的人或未來其他工業客戶提供的服務流程。在這份開工通知中，他們最終向我們公佈了他們第一階段的建設計劃，以及他們最終的長期規劃，以便我們能夠自己制定正確的公用事業解決方案和分階段計劃。

So the notice to proceed just means we will then move into detailed design to design and permit the infrastructure that will be required to meet those obligations. Later in the process, they'll then issue a notice to construct where then we actually go and build the utility. So even when they issue the notice to proceed, it's a two- to three-year process depending upon actually what they say they need and what we have to go design and permit and construct. But that's the process. The notice to proceed is really just the first step after the contract execution.

因此，繼續進行的通知只是意味著我們將進入詳細設計階段，以設計和允許履行這些義務所需的基礎設施。在這個過程的後期，他們會發出建造通知，然後我們才真正去建造公用設施。因此，即使他們發出了繼續進行的通知，這也需要一個兩到三年的過程，這取決於他們實際上說他們需要什麼以及我們必須進行設計、許可和建造什麼。但這就是過程。開工通知其實只是合約簽訂後的第一步。

Got it. Okay. I appreciate it. That's it for me. So great year and it's great to see great cases and the regulatory environment continue to improve.

知道了。好的。我很感激。對我來說就是這樣。這是偉大的一年，很高興看到優秀的案例和監管環境不斷改善。

Great. Thank you, Gerry.

偉大的。謝謝你，格里。

(Operator Instructions) At this time, this concludes our question and answer session. I'd now like to turn the call back over to Ron Fleming. Sir, please go ahead.

（操作員指示）至此，我們的問答環節結束。現在我想把電話轉回給羅恩·弗萊明。先生，請繼續。

Thank you, Operator. We'd just like to thank everybody for participating on the call today. And for those who continue to be interested in Global Water Resources, we look forward to speaking with you again.

謝謝您，接線生。我們只想感謝大家今天參加電話會議。對於那些繼續關注全球水資源的人，我們期待再次與您交談。

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a great rest of your day.

今天的電話會議到此結束。您可以斷開線路。感謝您的參與，祝您今天過得愉快。