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Item 1. Business

2025-03-05 compared with 2024-03-07 · 157 added, 189 removed, 245 unchanged (59% of the section changed)

GWRI is a water resource management company that owns, operates, and manages twenty-nine 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.

GWRI is a water resource management company that owns, operates, and manages thirty-two water, wastewater, and recycled water public utility systems in strategically located communities, principally in metropolitan Phoenix and Tucson, Arizona.

We seek 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:

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• 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, regulators, and utility staff are knowledgeable on the principles and practices of the Total Water Management approach;

• Employing respected subject matter experts and retaining thought 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;

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

Serving more than 82,000 people in approximately 32,000 homes within the Company’s 408 square miles of certificated service areas as of December 31, 2023, the Company provides water and wastewater utility services under the regulatory authority of the ACC.

Approximately 89.3% of the active service connections are customers of the Company’s the Company’s Global Water - Santa Cruz Water Company, Inc.

(“Santa Cruz”) and Global Water - Palo Verde Utilities Company, Inc.

(“Palo Verde”) utilities, which are located within a single service area.

Serving more than 111,000 people in approximately 36,000 homes within the Company’s 409 square miles of ACC-designated service areas as of December 31, 2024, the Company provides water and wastewater utility service under the regulatory authority of the ACC.

Approximately 89.6% of the active service connections are customers of the Company’s GW-Santa Cruz and GW-Palo Verde utilities, which are located within a single service area.

Water Industry Overview

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water industry has two main areas of business:

• Utility Services to Customers .

• Utility Service to Customers .

This business includes water and wastewater utilities, which are owned and operated by governmental subdivisions or investors in the private sector.

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The utility segment is characterized by high barriers to entry, including high capital spending requirements.

• General Water Products and Services.

• General Water Products and Service.

This business includes manufacturing, engineering and consulting companies, and numerous other fee-for-service businesses.

The activities of these businesses include the building, financing, and operating of water and wastewater utilities, utility repair services, contract operations, laboratory services, manufacturing and distribution of infrastructure and technology components, and other specialized services.

Table of Con tents

The activities of these businesses include the building, financing, and operating of water and wastewater utilities, utility repair, contract operations, laboratory service, manufacturing and distribution of infrastructure and technology components, and other specialized services.

Key Characteristics of the U.S.

Water Industry

In the U.S., the water industry is characterized by:

water industry is characterized by:

• Significant Constraints on the Availability of Fresh Water .

In Arizona, the Arizona Department of Water Resources (“ADWR”) estimates that annual water usage is 7 million acre-feet per year, as of 2017.

In Arizona, the ADWR estimates that annual water usage is 7 million acre-feet per year, as of 2017.

Arizona has the right to use 2.8 million acre-feet from the Colorado River and approximately half of that can be delivered through the Central Arizona Project, a 336-mile long system of aqueducts, tunnels, pumping plants, and pipelines from the Colorado River to central Arizona.

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is being pumped from groundwater sources faster than it is replenished naturally, a condition known as overdraft.

In areas of water scarcity, such as the arid western U.S., water recycling represents a relatively simple, inexpensive, and energy-efficient means of augmenting water supply as compared to transporting surface water, groundwater, or desalinated water from other locations.

of water scarcity, such as the arid western U.S., water recycling represents a relatively simple, inexpensive, and energy-efficient means of augmenting water supply as compared to transporting surface water, groundwater, or desalinated water from other locations.

Approximately 70% of the water provided for municipal use is currently utilized for non-potable applications where recycled water could potentially be utilized.

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water industry has traditionally not taken advantage of advances in technology available to enhance revenue, increase operating efficiencies and decrease operating costs (including labor and energy costs).

Areas of opportunity include automated meter reading, systems management, and administrative functions, such as customer billing and remittance systems.

Areas of opportunity include automated meter infrastructure, systems management, and administrative functions, such as customer billing and remittance systems.

Key drivers for the lack of investment in technology in water and wastewater utilities have been the historical lack of incentives offered or standards imposed by regulators to achieve efficiencies and lower costs and the ownership of the U.S.

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The utility segment of the U.S.

water industry is highly fragmented, with approximately 50,000 water utilities and approximately 16,000 community wastewater utilities, according to the U.S.

Environmental Protection Agency (“EPA”) .

water industry is highly fragmented, with approximately 50,000 water utilities and approximately 16,000 community wastewater utilities, according to the EPA .

The majority of the approximately 50,000 water utilities are serving a population of 5,000 or less, and 85% of the water utilities serve only 10% of the population.

• Large Public Sector Ownership .

Municipally-owned utilities provide water and wastewater services for the vast majority of the U.S.

Municipally-owned utilities provide water and wastewater service for the vast majority of the U.S.

For homes connected to a community water system, approximately 80% are provided service by municipally-owned utilities.

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Water quality standards, first introduced with the Clean Water Act in 1972 and the Safe Drinking Water Act in 1974, are becoming increasingly stringent and numerous.

For water, the American Water Works Association estimates investment needs for buried drinking water infrastructure will total more than $1 trillion over the next 25 years.

The American Society of Civil Engineers estimates capital investment needs to update and grow the nation’s drinking water and wastewater systems is expected to increase to $434 billion by 2029.

The American Water Works Association estimates investment needs for buried drinking water infrastructure will total more than $1 trillion over the next 25 years, and the American Society of Civil Engineers expects the U.S.

will need to find additional capital investments of up to $434 billion annually, in order to update and grow the nation’s drinking water and wastewater systems.

Private Sector Opportunities

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In order to meet their capital spending challenges and take advantage of technology-related operating efficiencies, many municipalities are examining a combination of outsourcing and partnerships with the private sector or outright privatizations.

• Outsourcing involves municipally-owned utilities contracting with private sector service providers to provide services, such as meter reading, billing, maintenance, or asset management services.

Table of Con tents

• Outsourcing involves municipally-owned utilities contracting with private sector service providers to provide service, such as meter reading, billing, maintenance, or asset management.

• Public-private partnerships among government, operating companies, and private investors include arrangements, such as design, build and operate contracts;

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We believe investor-owned utilities that have greater access to capital are generally more capable of making mandated and other necessary infrastructure upgrades to both water and wastewater utilities, addressing increasingly stringent environmental and human health standards, and navigating a wide variety of regulatory processes.

In addition, investor-owned utilities that achieve larger scales are able to spread overhead expenses over a larger customer base, thereby reducing the costs to serve each customer.

In addition, investor-owned utilities that achieve larger scale are able to spread overhead expenses over a larger customer base, thereby reducing the costs to serve each customer.

Since many administrative and support activities can be efficiently centralized to gain economies of scale and sharing of best practices, companies that participate in industry consolidation have the potential to improve operating efficiencies, lower costs, and improve service at the same time.

We are a water resource management company that provides water, wastewater, and recycled water utility services.

We are a water resource management company that provides water, wastewater, and recycled water utility service.

We believe we are a leader in Total Water Management practices, such as water scarcity management and advanced water recycling applications.

Our long-term goal is to become one of the largest investor-owned operators of integrated water and wastewater utilities in areas of the arid western U.S.

where water scarcity management is necessary for long-term economic sustainability and growth.

Our long-term goal is to become one of the largest investor-owned operators of integrated water and wastewater utilities in areas of the arid western U.S., where water scarcity management is necessary for long-term economic sustainability and growth.

Our growth strategy involves the elements listed below:

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• Regional planning to reduce overall design and implementation costs, leveraging the benefits of replicable designs, gaining the benefits of economies of scale, and enhancing the Company’s position as a premier water and wastewater service provider in the region.

◦ For example, the Company has secured four separate area-wide Clean Water Act Section 208 Regional Water Quality Management Plans in its major planning areas, covering more than 500 square miles of land.

◦ For example, the Company has secured six separate area-wide Clean Water Act Section 208 Regional Water Quality Management Plans in its major planning areas, covering more than 500 square miles of land.

To obtain these plans, a provider must develop, amongst other things, a regional wastewater solution, including plans for engineering, infrastructure location and size, and goals for the management of treated reclaimed water, which the Company successfully demonstrated in obtaining its plans.

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A community of this size produces an approximate annual average of 3.9 million gallons of wastewater per day.

Because the Company requires developers

Table of Con tents

to take back and utilize recycled water within their communities and invest in “purple pipe” recycled water infrastructure during the initial development of subdivisions, the Company is now able to distribute the majority of its recycled water back to the community for beneficial purposes.

Because the Company requires developers to take back and utilize recycled water within their communities and invest in “purple pipe” recycled water infrastructure during the initial development of subdivisions, the Company is now able to distribute the majority of its recycled water back to the community for beneficial purposes.

Approximately 66% of the recycled water goes towards common area non-potable irrigation and for use at a local farm, which allows for the recycled water to naturally recharge into the aquifer.

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To date, the Company has reused approximately 12.5 billion gallons of recycled water in the City of Maricopa.

• Integrating and standardizing water, wastewater, and recycled water infrastructure delivery systems using a separate distribution system of purple pipes to conserve water resources, reduce energy, treatment, and consumable costs (e.g., chemicals, filter media, other general materials, and supplies), provide operational efficiencies, and align the otherwise disparate objectives of water sales and conservation.

◦ In addition to the previous example, which related to the requirements for recycled water usage, the separate distribution system of purple pipes, and water conservation achievements, the Company believes that its model results in additional benefits from an economic perspective due to lower use of power and consumables.

• Integrating and standardizing water, wastewater and recycled water infrastructure delivery systems using a separate recycled water distribution system of purple pipe to maximize effective and safe water reuse, conserve water resources, reduce energy, treatment and consumable costs (e.g., chemicals, filter media, other general materials, and supplies), provide operational efficiencies, and align the otherwise disparate objectives of water sales and conservation.

◦ In addition to the previous example, which relates to the increasing adoption and demand for recycled water usage, the separate recycled water distribution system of purple pipe, and the Company’s water conservation achievements, the Company believes that its model results in additional benefits from an

economic perspective due to lower use of power and consumables.

For every gallon of recycled water that is directly reused while already on land surface, the need to pump additional scarce groundwater and surface water is eliminated.

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Each memorandum of understanding reflects the Company’s intent to deploy Total Water Management.

The Company also has 154 infrastructure coordination and financing agreements with landowners or developer entities that include requirements for usage of recycled water and other attributes that support the Company’s Total Water Management model.

The Company also has 154 ICFAs with landowners or developer entities that include requirements for usage of recycled water and other attributes that support the Company’s Total Water Management model.

As discussed above, the Company’s integrated provider model, which is focused on the maximum use of recycled water, underpins its Clean Water Act Section 208 Regional Water Quality Management Plans and Designations of Assured Water Supply.

In addition, the Company has won numerous awards for education, outreach and conservation in the water industry.

• Incorporating automated processes, such as supervisory control and data acquisition, automated meter reading, and back-office technologies and “green” billing, which reduce operating costs, improve system availability and reliability, and improve customer satisfaction.

• Incorporating automated processes, such as supervisory control and data acquisition, automated meter infrastructure and back-office technologies and “green” billing, which reduce operating costs, improve system availability and reliability, and improve customer satisfaction.

◦ Supervisory Control and Data Acquisition.

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troubleshoot systems;

provide for remote operations;

and allow for proactive maintenance and lower costs related to efficient real-time operations.

provide for remote operations and allow for proactive maintenance and lower costs related to efficient real-time operations.

◦ Automated Meter Infrastructure.

The Company has implemented automated meter reading for 99% of its active customers with a substantial proportion of its remaining customers in the process of or being, or planned to be, upgraded with such functionality.

The Company has implemented automated meter infrastructure for 99% of its active customers with a substantial proportion of its remaining customers in the process of being, or planned to be, upgraded with such functionality.

Currently, all meters in our Maricopa service areas allow for automated meter infrastructure.

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With this data, we can better model demand usage, identify system water loss, identify leaks on the customer side of the meter, monitor for abnormal usage and present interval, hourly, daily, weekly or monthly usage back to the customers.

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◦ Back-Office Technologies and Paperless Billing.

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The Company also provides its customers with over seven ways to pay, with the majority of options being integrated with the Company’s back-office technologies.

In combination with automated meter reading, this suite of technology has minimized the use of human labor and reduced the potential for human error for the entire billing and remittance process, while providing better customer service.

In combination with automated meter infrastructure, this suite of technology has minimized the use of human labor and reduced the potential for human error for the entire billing and remittance process, while providing better customer service.

We believe our Total Water Management-based business model provides us with a significant competitive advantage in high growth, water scarce regions.

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The application of the Total Water Management model has proven to be effective as a means of water scarcity management that promotes sustainable communities and helps achieve greater dwelling unit density in areas where the availability of sustainable water can be a key constraint on development.

Our implementation of the Total Water Management philosophy in Arizona has led to the development of relationships with key regulatory bodies.

Our implementation of the Total Water Management philosophy in Arizona has led to the development of beneficial relationships with key regulatory bodies.

Our Regulated Utilities

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As of December 31, 2024, our utilities collectively had 64,520 active service connections offering predictable rate-regulated cash flows.

Revenues from our regulated utilities accounted for approximately 94.7% of total revenues in 2023.

Revenue from our regulated utilities accounted for all of our total revenue in 2024.

Our utilities currently possess the high-level regional permits that allow us to implement our business model;

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Maricopa County, Pinal County and Pima County.

For information related to rate cases for our utilities, see “– Regulation” below, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Rate Case Activity”, included in Part II, Item 7 of this report and Note 3 – “Regulatory Matters” of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this report.

A summary description of our utilities at December 31, 2024 is set forth in the following table and described in more detail below:

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Utility Date of Acquisition (A) or Formation (F) Service Provided Square Miles of Service Area (1)

Active Service Connections

Average Monthly Rate Per Service Connection

Global Water - Santa Cruz Water Company, Inc.

2004 (A) Water 90 27,766 $ 63

Global Water - Palo Verde Utilities Company, Inc.

2004 (A) Wastewater and Recycled Water 115 27,421 77

Company Date of Acquisition (A) or Formation (F) Service Provided Square Miles of Service Area (1) Active Service Connections Average Monthly Rate Per Service Connection

GW-Santa Cruz 2004 (A) Water 91 29,121 $ 62

GW-Palo Verde 2004 (A) Wastewater and Recycled Water 116 28,721 78

MARICOPA COUNTY

Global Water - Hassayampa Utilities Company, Inc.

2005 (F) Wastewater and Recycled Water 43 0 0

Global Water - Belmont Water Company, Inc.

2006 (A) Water 111 622 142

Global Water - Turner Ranches Irrigation, Inc.

2018 (A) Water 7 962 82

Global Water - Red Rock Water Company, Inc.

2018 (A) Water 7.0 0 0

Global Water - Francesca Water Company, Inc.

2020 (A) Water 0.4 119 61

Global Water - Mirabell Water Company, Inc.

2020 (A) Water 0.4 61 82

Global Water - Lyn Lee Water Company, Inc.

2020 (A) Water 1 38 44

Global Water - Tortolita Water Company, Inc.

2020 (A) Water 0.1 23 59

Global Water - Las Quintas Serenas Water Company, Inc.

2021 (A) Water 3.0 1,238 51

Global Water - Rincon Water Company, Inc.

2022 (A) Water 9 79 77

Global Water - Farmers Water Company, Inc.

2023 (A) Water 21 3,462 27

GW-Hassayampa 2005 (F) Wastewater and Recycled Water 43 — —

GW-Belmont 2006 (A) Water 111 622 155

GW-Turner 2018 (A) Water 7 962 84

GW-Saguaro 2021 (A) Water 20 1,571 55

GW-Farmers 2023 (A) Water 21 3,494 29

GW-Ocotillo 2023 (F) Water — — —

Total 409 64,491

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Development in the area is still considered to be affordable, with the median home value being $359,000 compared to $460,000 in the Phoenix Metro area.

We operate in this region through Global Water - Santa Cruz Water Company, Inc.

(“Santa Cruz”) and Global Water - Palo Verde Utilities Company, Inc.

(“Palo Verde”).

We acquired Santa Cruz and Palo Verde in 2004.

Santa Cruz served 27,766 active service connections as of December 31, 2023 and revenues from Santa Cruz represented approximately 39.3% and 40.0% of our total revenue for the years ended December 31, 2023 and 2022, respectively.

In January 2022, Santa Cruz acquired Twin Hawks Utility, Inc., which added 18 new connections to Santa Cruz, at the time of acquisition.

Palo Verde served 27,421 active service connections as of December 31, 2023 and revenues from Palo Verde represented approximately 47.9% and 51.8% of our total revenue for the years ended December 31, 2023 and 2022, respectively.

The Santa Cruz and Palo Verde service areas include approximately 205 square miles, which we believe provide further opportunities for growth.

Most of the Santa Cruz and Palo Verde infrastructure is less than twenty years old.

Santa Cruz and Palo Verde provide water, wastewater, and recycled water services, respectively, under an innovative public-private partnership memorandum of understanding with the City of Maricopa in Pinal County for approximately 278 square miles of its planning area.

We signed a similar memorandum of understanding with the City of Casa Grande to partner in providing water, wastewater, and recycled water services to an approximate 100 square miles of its western region for anticipated growth.

Table of Con tents

Rate proceedings were completed in 2022 for both Santa Cruz and Palo Verde , which resulted, among other things, in consolidation of the following utilities into Santa Cruz:

• Global Water - Red Rock Utilities Company, Inc.

(water services only)

• Global Water - Picacho Cove Water Company, Inc.

(water services only)

In addition, the following utilities were consolidated into Palo Verde:

• Global Water - Red Rock Utilities Company, Inc.

(wastewater and recycled water services only)

• Global Water - Picacho Cove Utilities Company, Inc.

(wastewater services only)

Prior to the consolidation in 2022, Global Water - Red Rock Utilities Company, Inc.

provided water and wastewater utility services in Pinal County and had a service area for water utility service in Pima County.

Only service areas located in Pinal County were consolidated into Santa Cruz and Palo Verde.

Refer to the Pima County section for information on Global Water - Red Rock Water Company, Inc.

which holds the Pima County water utility service area.

For additional information related to the rate case, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Rate Case Activity”, included in Part II, Item 7 of this report and Note 2 – “Regulatory Decision and Related Accounting and Policy Changes” of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this report.

We operate in this region through GW-Santa Cruz and GW-Palo Verde, both of which we acquired in 2004.

GW-Santa Cruz served 29,121 active service connections as of December 31, 2024 and revenue from GW-Santa Cruz represented

approximately 41.0% and 39.3% of our total revenue for the years ended December 31, 2024 and 2023, respectively.

GW-Palo Verde served 28,721 active service connections as of December 31, 2024 and revenue from GW-Palo Verde represented approximately 50.7% and 47.9% of our total revenue for the years ended December 31, 2024 and 2023, respectively.

The GW-Santa Cruz and GW-Palo Verde service areas include approximately 207 square miles, which we believe provide further opportunities for growth.

Most of the GW-Santa Cruz and GW-Palo Verde infrastructure is less than twenty years old.

GW-Santa Cruz and GW-Palo Verde provide water, wastewater and recycled water service, respectively, under an innovative public-private partnership memorandum of understanding with the City of Maricopa in Pinal County for approximately 278 square miles of its planning area.

We signed a similar memorandum of understanding with the City of Casa Grande to partner in providing water, wastewater, and recycled water service to an approximate 100 square miles of its western region for anticipated growth.

Maricopa County

We operate in this region through Global Water - Belmont Water Company, Inc., Global Water - Hassayampa Utilities Company, Inc.

(“Hassayampa”), and Global Water - Turner Ranches Irrigation, Inc.

As a result of the rate proceedings completed in 2022, which resulted, among other things, in consolidation of the following utilities into Global Water - Greater Tonopah Water Company, Inc.:

• Global Water - Northern Scottsdale Water Company, Inc.

(“Northern Scottsdale”)

• Global Water - Eagletail Water Company, Inc.

(“Eagletail”)

Global Water - Greater Tonopah Water Company, Inc.

was then renamed Global Water - Belmont Water Company, Inc.

The rate proceedings also resulted in the consolidation of Global Water - Balterra Utilities Company, Inc.

into Hassayampa.

Belmont served 622 active service connections as of December 31, 2023.

The service areas include approximately 111 square miles and provides water services to Maricopa County west of the Hassayampa River and to two small subdivisions in northern Scottsdale.

Within the Belmont service area, we have entered into agreements with developers to serve approximately 100,000 home sites plus commercial, schools, parks, and industrial developments at full build-out.

The Belmont development is a mixed use, master planned community.

We formed Hassayampa in 2005.

Hassayampa is a wastewater utility and has a Certificate of Convenience & Necessity (“CC&N”) for approximately 43 square miles in an area in western Maricopa County known as Tonopah.

Hassayampa currently has no active service connections;

We operate in this region through GW-Hassayampa, GW-Belmont and GW-Turner.

GW-Hassayampa is a wastewater utility and has a CC&N for approximately 43 square miles in an area in western Maricopa County known as Tonopah.

GW-Hassayampa currently has no active service connections;

however, its service area lies directly in the expected path of future growth in the far west valley of metropolitan Phoenix, which we believe should provide opportunities for growth once development commences in this area.

We acquired Turner in May 2018.

Turner is a non-potable irrigation water utility located in Maricopa County, Arizona, with approximately seven square miles of service area.

Turner served 962 residential irrigation customers as of December 31, 2023.

We formerly operated additional utilities in Maricopa County through Valencia Water Company, Inc.

(“Valencia”) and Water Utility of Greater Buckeye (“Greater Buckeye”).

Valencia was consolidated with Greater Buckeye in 2008, and on July 14, 2015, we closed the stipulated condemnation to transfer the operations and assets of Valencia to the City of

Table of Con tents

See Note 1 — “Basis of Presentation, Corporate Transactions, Significant Accounting Policies, and Recent Accounting Pronouncements — Corporate Transactions — Stipulated Condemnation of the Operations and Assets of Valencia Water Company, Inc.” of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this report for additional information.

For additional information related to the rate case, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Rate Case Activity”, included in Part II, Item 7 of this report and Note 2 — “Regulatory Decision and Related Accounting and Policy Changes” of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this report.

We operate in this region through Global Water - Mirabell Water Company, Inc.

(“Mirabell”), Global Water - Francesca Water Company, Inc.

(“Francesca”), Global Water - Tortolita Water Company, Inc.

(“Tortolita”), Global Water - Lyn Lee Water Company, Inc.

(“Lyn Lee”), Global Water - Las Quintas Serenas Water Company, Inc.

(“Las Quintas Serenas”), Global Water - Rincon Water Company, Inc.

(“Rincon”), Red Rock-Pima, and Global Water - Farmers Company, Inc.

We acquired Mirabell in October 2020.

Mirabell served 61 active water connections as of December 31, 2023.

Mirabell has a CC&N for 0.4 square miles located in the southwest area of Tucson, Arizona.

We acquired Francesca, Tortolita and Lyn Lee in November 2020.

Francesca is located in the southwest area of Tucson, Arizona whereas Tortolita and Lyn Lee are located in Marana, Arizona.

As of December 31, 2023, Francesca, Tortolita, and Lyn Lee served 119, 23, and 38 active water connections, respectively.

We acquired Las Quintas Serenas in November 2021.

Las Quintas Serenas served 1,238 active water connections with approximately 3.0 square miles of service area located in Sahuarita, Arizona.

In January 2022, the Company acquired the assets of Rincon Water Company, Inc., a water utility serving the vicinity of Vail, Arizona.

As of December 31, 2023, Rincon served 79 active water connections with approximately 9.0 square miles of service area.

GW-Belmont served 622 active service connections as of December 31, 2024.

The service areas include approximately 111 square miles and provides water service to Maricopa County west of the Hassayampa River and to two small subdivisions in northern Scottsdale.

Within the GW-Belmont service area, we have entered into agreements with developers of mixed use, master planned communities to serve approximately 100,000 anticipated home sites plus commercial, schools, parks and industrial developments at full build-out.

GW-Turner is a non-potable irrigation water utility located in Maricopa County, Arizona, with approximately seven square miles of service area.

GW-Turner served 962 residential and commercial irrigation customers as of December 31, 2024.

We operate in this region through GW-Saguaro and GW-Farmers.

We also formed GW-Ocotillo in 2023, in anticipation of the acquisition of water systems in this region from the City of Tucson.

For additional information on the anticipated acquisition, refer to Note 2 – “Acquisitions” of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this report.

GW-Saguaro served 1,571 active water connections as of December 31, 2024.

The service area includes approximately 20 square miles of service area located in Sahuarita, Arizona.

Rate proceedings were completed in 2024, which resulted, among other things, in consolidation of the following Pima County subsidiary water utilities into GW-Saguaro:

• Global Water - Las Quintas Water Company, Inc.

• Global Water - Mirabell Water Company, Inc.

• Global Water - Francesca Water Company, Inc.

• Global Water - Tortolita Water Company, Inc.

• Global Water - Lyn Lee Water Company, Inc.

• Global Water - Rincon Water Company, Inc.

• Global Water - Red Rock Water Company, Inc.

(“Red Rock”) was acquired by the Company in 2018 and holds service areas located in Pima County .

At this time, Red Rock has no active service connections.

In February 2023, the Company completed the acquisition of Farmers Water Co., an operator of a water utility with service area in Sahuarita, Arizona and in unincorporated Pima County, Arizona.

As of December 31, 2023, Farmers served 3,462 active water connections with approximately 21.0 square miles of service area.

In February 2023, the Company completed the acquisition of Farmers Water Co., an operator of a Pima County water utility with a service area in Sahuarita, Arizona and in unincorporated Pima County, Arizona.

As of December 31, 2024, GW-Farmers served 3,494 active water connections with approximately 21.0 square miles of service area.

Our water and wastewater utility operations are subject to extensive regulation by U.S.

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These requirements include the Safe Drinking Water Act, the Clean Water Act and the regulations issued under these laws by the EPA.

We are also subject to state environmental laws and regulations, such as Arizona’s Aquifer Protection Program and other environmental laws and regulations enforced by the Arizona Department of Environmental Quality (“ADEQ”), and extensive regulation by the ACC, which regulates public utilities.

The ACC also has broad administrative power and authority to set rates and charges, determine service areas and conditions of service, and authorize the issuance of securities as well as authority to establish uniform systems of accounts and approve the terms of contracts with both affiliates and customers.

We are also subject to various federal, state, and local laws and regulations governing the storage of hazardous materials, the management and disposal of hazardous and solid wastes, discharges to air and water, the cleanup of contaminated sites, dam safety, fire protection services in the areas we serve, and other matters relating to the protection of the environment, health, and safety.

We are also subject to state environmental laws and regulations, such as Arizona’s Aquifer Protection Permit program and other environmental laws and regulations enforced by the ADEQ, and extensive regulation by the ACC, which regulates public utilities in Arizona.

The ACC has broad administrative power and authority to set rates and charges, determine service areas and conditions of service and authorize the issuance of securities.

The ACC also has authority to establish uniform systems of accounts and approve the terms of contracts with both affiliates and customers.

We are also subject to various federal, state and local laws and regulations governing the storage of hazardous materials, the management and disposal of hazardous and solid wastes, discharges to air and water, the cleanup of contaminated sites, dam safety, fire protection service in the areas we serve and other matters relating to the protection of the environment, health and safety.

In addition to regulation by governmental entities, our operations may also be affected by civic or consumer advocacy groups.

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Although these organizations may lack regulatory or enforcement authority, they may be influential in achieving service quality and rate improvements for customers.

Table of Con tents

We maintain a comprehensive environmental program which addresses, among other things, responsible business practices and compliance with environmental laws and regulations, including the use and conservation of natural resources.

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Compliance with governmental regulations is of utmost importance to us, and considerable time and resources are spent ensuring compliance with all applicable federal, state and local laws and regulations.

Capital expenditures and operating costs to comply with environmental mandates traditionally have been recognized by state public utility commissions as appropriate for inclusion in establishing rates.

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”, that is, the delay between the utility’s test year and the issuance of a rate order approving new rates

Safe Drinking Water Act

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Although it is difficult to project the ultimate costs of complying with the above or other pending or future requirements, we do not expect current requirements under the Safe Drinking Water Act to have a material impact on our operations or financial condition, although it is possible new methods of treating drinking water may be required if additional regulations become effective in the future.

In addition, capital expenditures and operating costs to comply with environmental mandates traditionally have been recognized by state public utility commissions as appropriate for inclusion in establishing rates, although rate recovery may be delayed by “regulatory lag”, that is, the delay between the utility’s test year and the issuance of a rate order approving new rates.

National Primary Drinking Water Regulations

The NPDWR are legally enforceable primary standards and treatment techniques that apply to public water systems and are designed to limit the levels of contaminants in drinking water.

On April 10, 2024, the EPA finalized the NPDWR establishing legally enforceable levels, called maximum contaminant levels (“MCLs”), for six per- and polyfluoroalkyl substances (“PFAS”) in drinking water.

The EPA also finalized health-based, non-enforceable MCL 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.

Lead and Copper Rule Improvements

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.

Clean Water Act

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We believe we maintain the necessary permits and approvals for the discharges from our water and wastewater facilities.

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Arizona Regulatory Agencies

Rate Regulation

The ACC is the regulatory authority in Arizona with jurisdiction over privately-held water and wastewater utilities.

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Once a CC&N is granted, the utility falls under the ACC’s jurisdiction and must abide by the rules and laws under which a public service corporation operates.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Rate Case Activity,” included in Part II, Item 7 of this report, for additional information regarding rate case activity involving the ACC.

The following table describes current rate case actions as applicable for each of our regulated utilities (in millions):

Company Approved Return on Equity Approved Incremental Annual Revenue (1) ($)

Filing Date ACC Decision # Rates Effective

Approved Rate Cases

GW-Santa Cruz (2)

9.2% 1.2 July 22, 2020 78644 July 1, 2022

GW-Palo Verde (2)

9.2% 0.7 July 22, 2020 78644 July 1, 2022

GW-Belmont (2)

9.2% 0.2 July 22, 2020 78644 July 1, 2022

GW-Turner (2)

9.2% 0.1 July 22, 2020 78644 July 1, 2022

GW-Saguaro (3)

9.6% 0.4 June 27, 2023 79383 July 1, 2024

GW-Farmers 9.6% 0.1 July 1, 2018 77269 July 1, 2019

Pending and Anticipated Rate Cases

GW-Farmers (4)

In process In process June 27, 2024 In process In process

GW-Santa Cruz (5)

— — Anticipated 2025 — Anticipated 2026

GW-Palo Verde (5)

— — Anticipated 2025 — Anticipated 2026

(1) To the extent that the number of active service connections has increased and continues to increase from a rate case’s test year levels, the additional revenues may be greater than the amounts 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.

(2) Approved incremental annual revenue represents the aggregate annual revenue increase following the final phase-in period, which was effective January 1, 2024.

(3) A pproved incremental annual revenue represents the aggregate annual revenue increase following the final phase-in period.

The first increase for GW-Saguaro was 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.

(4) On January 10, 2025, GW-Farmers filed with the ACC a unanimous settlement agreement between GW-Farmers, RUCO and the Utilities Division Staff of the ACC.

Among other elements, the unanimous settlement agreement calls for an increase in GW-Farmers’ annual revenue requirement of $1.1 million and a return on equity of 9.6%, with rates to be phased-in over three periods, starting with 50% of the increase effective on May 1, 2025, with subsequent 25% portions of the increase effective November 1, 2025 and May 1, 2026.

The unanimous settlement agreement is under advisement with the ALJ, and the Company anticipates a decision in the first half of 2025.

(5) In February 2025, the Company notified the ACC of its intention to file a rate case for its GW-Santa Cruz and GW-Palo Verde utilities in 2025.

The GW-Santa Cruz and GW-Palo Verde rate case will be based on a test year ending December 31, 2024 with updates for changes in post-test year plant.

The Company is in the process of preparing for the rate case and intends to request a net increase to its annual revenue requirement of $6.5 million, to be implemented with the first phase beginning in May 2026 and the second phase in January 2027.

For a full summary of the Company’s current regulatory activity, including other approved details of recent rate cases, refer to Note 3 – “Regulatory Matters” of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this report.

Environmental Regulation

Arizona water and wastewater utilities must also comply with state environmental regulation regarding drinking water and wastewater, including environmental regulations set by Councils of Government (such as the Central Arizona Governments and the Maricopa Association of Governments), the ADEQ and the ADWR.

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We intend to seek access to renewable water supplies as we grow our water resource portfolio.

However, we currently rely almost exclusively (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.

However, we currently rely predominantly 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.

Aside from some rights to water through the Central Arizona Project, groundwater (and recycled water derived from groundwater) is the only water supply available to us.

Although we intend to rely on recycled water to help meet water demands in areas, the infrastructure, permits, and customer base necessary to generate and deliver recycled water are not necessarily in place in most of our service areas.

Although we intend to rely on recycled water to help meet water demands in some areas, the infrastructure, permits and customer base necessary to generate and deliver recycled water are not necessarily in place in most of our service areas.

In addition, although recycling can extend a limited supply, it does not actually generate a new supply of water.

As such, although our proposed generation and delivery of recycled water is likely to help reduce the amount of groundwater that will be required to serve future customers, our ability to serve new customers will remain dependent on our ability to access groundwater.

Groundwater is a limited resource in Arizona, and access to new uses of groundwater is closely regulated in the areas served by us.

See “Risk Factors—Business and Operational Factors—Inadequate water and wastewater supplies could have a material adverse effect upon our ability to achieve the customer growth necessary to increase our revenues,” included in Part I, Item 1A of this report, for additional information.

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Nearly all of our service areas are located in “Active Management Areas” within which the use of groundwater is regulated by ADWR in order to manage ongoing problems with groundwater overdraft.

Groundwater is a limited resource in Arizona, and new uses of groundwater are closely regulated in the areas served by us.

See “Risk Factors—Business and Operational Factors— Inadequate water supplies and wastewater capacity could have a material adverse effect upon our ability to achieve the customer growth necessary to increase our revenue ,” included in Part I, Item 1A of this report, for additional information.

Nearly all of our service areas are located in “Active Management Areas” within which the use of groundwater is regulated by ADWR in order to manage ongoing challenges with groundwater overdraft.

Under Arizona’s assured water supply laws and regulations, a new subdivision inside an Active Management Area must demonstrate that it has an “assured water supply” to the satisfaction of the ADWR before the developer is permitted to sell lots.

Demonstration of an assured water supply requires, among other things, that an applicant demonstrate that water supplies will be physically, continuously, and legally available to satisfy the water needs of the proposed use for at least 100 years.

A developer may make an independent showing of an assured water supply resulting in a Certificate of Assured Water Supply (“CAWS”) for a subdivision or may obtain a written commitment for service from a designated water provider, such as a privately owned water company or a municipal water supplier.

Under the latter approach, the water provider must demonstrate satisfaction of assured water supply requirements for the developments within its service areas resulting in a Designation of Assured Water Supply (“DAWS”) for the provider.

At present, we have obtained a DAWS in the Maricopa/Casa Grande service territory (Santa Cruz) for approximately 22,900 acre-feet of water use.

A developer may make an independent showing of an assured water supply resulting in a CAWS for a subdivision or may obtain a written commitment for service from a designated water provider, such as a privately owned water company or a municipal water supplier.

Under the latter approach, the water provider must demonstrate satisfaction of assured water supply requirements for the developments within its service areas resulting in a DAWS for the provider.

A DAWS is subject to periodic review and renewal by the ADWR and can be increased as demand grows within the service territory, subject to the physical availability of existing water supplies and any additional supplies acquired for use within the DAWS.

Over time, we anticipate Santa Cruz will apply to increase the DAWS as sufficient increased demand is established in the area.

At present, we have obtained a DAWS in the Maricopa/Casa Grande service territory (GW-Santa Cruz) for approximately 22,900 acre-feet of water use.

Over time, we anticipate GW-Santa Cruz will apply to increase the DAWS as sufficient increased demand is established in the area.

Under our highly efficient Total Water Management model, we have achieved much lower per-unit potable water use rates than would be expected for average developments.

In 2024, we used approximately 9,042 acre-feet of the annually available 22,900 acre-feet already permitted in the DAWS.

In our West Valley service territory (Greater Tonopah), we are seeking a DAWS in the future.

In our West Valley service territory (GW-Belmont), we are seeking a DAWS in the future.

In our other service areas, we rely upon a CAWS obtained by developers to demonstrate an assured water supply, or will apply for a DAWS in the future when required.

There is no assurance that the ADWR would provide a new CAWS, DAWS or add any additional acre-feet to a DAWS in the future.

In December 2024, we obtained a DAWS for part of our Pima County service territory (GW-Farmers), effective January 1, 2025.

The DAWS covers approximately 5,300 acre-feet of water use, and in 2024, we pumped approximately 977 acre-feet.

Outside of Arizona’s Active Management Areas, the “adequate water supply” program requires a determination of whether there is an adequate water supply—similar to an assured water supply—but it does not necessarily foreclose development when the showing cannot be made.

Unless the county government has voted to make the requirement mandatory, a development (outside of Active Management Areas) that cannot demonstrate access to an adequate water supply is generally required only to disclose this fact, although as a practical matter few developments have proceeded on this basis.

In addition, whether a water provider to such a development has access to an adequate water supply is nevertheless relevant to its business.

Other Environmental, Health, and Safety (Including Water Quality) Matters

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In addition, communication plans have been developed as a component of our procedures.

While we do not make public comments on the details of our

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security programs, we have been in contact with federal, state, and local law enforcement agencies to coordinate and improve the security of our water delivery systems and to safeguard our water supply.

While we do not make public comments on the details of our security programs, we have been in contact with federal, state and local law enforcement agencies to coordinate and improve the security of our water delivery systems and to safeguard our water supply.

We treat water to potable standards and also treat, clean, and recycle wastewater for a variety of non-potable uses.

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Recycled water can be used for irrigation, facilities cooling, and industrial applications and in a residential setting for toilet flushing and lawn watering.

See “Risk Factors—Business and Operational Factors—There is no guaranteed source of water,” included in Part I, Item 1A of this report, for additional information.

We use sophisticated technology as a principal means of improving our margins.

We focus on technological innovations that allow us to deliver high-quality water and customer service with minimal potential for human error, delays, and inefficiencies.

The comprehensive technology platform that we use includes supervisory control and data acquisition (SCADA), automated meter reading (AMR), and geographical information system (GIS) technologies, which we use to map and monitor our physical assets and water resources on an automated, real-time basis with fewer people than the standard water utility model requires.

The comprehensive technology platform that we use includes supervisory control and data acquisition (SCADA), automated meter infrastructure, and geographical information system (GIS) technologies, which we use to map and monitor our physical assets and water resources on an automated, real-time basis with fewer people than the standard water utility model requires.

Our systems allow us to detect and resolve potential problems promptly, accurately, and efficiently before they become more serious, which both improves customer service and optimizes and extends the efficient performance and life of our assets.

The comprehensive technology platform that we use includes automated meter reading technology, which allows us to read water meters remotely rather than physically, improves water resources accounting, allows for identification of high water usage and water theft from disconnected meters.

The comprehensive technology platform that we use includes automated meter infrastructure technology, which allows us to read water meters remotely rather than physically, improves water resources accounting, allows for identification of high water usage and water theft from disconnected meters.

We also use automated voice, internet billing, payment processing, and customer service applications that contribute to additional reduced headcount and a reduction in associated personnel costs.

Decentralized Treatment Facilities

We design and build standard, decentralized facilities that are scaled to the service areas they serve in order to achieve optimum efficiency in providing both water and wastewater services.

We design and build standard, decentralized facilities that are scaled to the service areas they serve in order to achieve optimum efficiency in providing both water and wastewater service.

The replication of our standard facility also improves design, construction and operating efficiency because we are able to employ similar, proven processes and equipment and technologies at each of our facilities.

Although there has not traditionally been a significant economic incentive or other reward for automation and resource efficiency in our industry, we believe our use of automation in lieu of labor, together with our emphasis on streamlined operations and conservation, will position us well for continued profitable growth and allow us to take advantage of future incentives or rewards that may be available to water utilities that are able to successfully enhance the use of renewable resources.

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As an owner and operator of regulated utilities, we do not face competition within our existing service areas because Arizona law provides the holder of a CC&N for water and wastewater service with an exclusive right to provide that service within the certificated area, as against other public service corporations.

As an owner and operator of regulated utilities, we do not face competition within our existing service areas because Arizona law provides the holder of a CC&N for water and wastewater service with an exclusive right to provide that service within the ACC-designated service area, as against other public service corporations.

In addition, the high cost of constructing water and wastewater systems in an existing market creates a barrier to entry.

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and Liberty Utilities.

We believe competition for new service areas and acquisitions is based on relationships with municipalities and developers, experience in making acquisitions, the ability to finance and obtain regulatory approval, quality and breadth of products and services, the ability to integrate both water and wastewater services, and implement conservation practices throughout the service areas, price, speed, and ease of implementation.

If we seek to extend our services outside Arizona, we will face competition from other regional or national water utilities for these opportunities.

We believe competition for new service areas and acquisitions is based on relationships with municipalities and developers, experience in making acquisitions, the ability to finance and obtain regulatory approval, quality and breadth of products and services, the ability to integrate both water and wastewater service, and implement conservation practices throughout the service areas, price, speed, and ease of implementation.

If we seek to extend our service outside Arizona, we will face competition from other regional or national water utilities for these opportunities.

Although we believe we compete effectively in our regulated businesses, our competitors may have more resources and experience than we have and may therefore have a competitive advantage.

Segment Reporting

We currently operate in one geographic region within the State of Arizona, wherein each operating utility operates within the same regulatory environment, and is operated as one reportable segment.

We do not have any customers that contribute more than 10% to our revenues or revenue streams.

For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Segment Reporting” in Part II, Item 7 of this report.

Customer demand for our water during the warmer months is generally greater than other times of the year due primarily to additional consumption of water in connection with irrigation systems, swimming pools, cooling systems and other outside water use.

Throughout the year, and particularly during typically warmer months, demand may vary with temperature, as well as the timing and overall levels of rainfall.

In the event that temperatures during the typically warmer months are cooler than normal, or if there is more rainfall than normal, the customer demand for our water may decrease and therefore, adversely affect our revenues.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting our Results of Operations—Weather and Seasonality,” included in Part II, Item 7 of this report, for additional information .

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Our employees’ significant contributions through innovation and standardization are essential to our realized and continued success.

We offer comprehensive compensation and benefits package to attract and retain top talent.

In addition to competitive base wages, additional benefits include annual bonus opportunities, employee stock options, Company matched 401(k) plan, healthcare and insurance benefits, flexible spending accounts and paid time off.

We offer a comprehensive compensation and benefits package to attract and retain top talent.

In addition to competitive base wages, additional benefits include annual bonus opportunities, share-based compensation, Company matched 401(k) plan, healthcare and insurance benefits, flexible spending accounts and paid time off.

As of December 31, 2024, we employed 122 full-time individuals and 3 part-time employees.

This represents an increase of nine employees, or 9% from December 31, 2022 due primarily to the hiring of additional employees throughout the organization as the company continues to grow and the acquisition of Farmers in February 2023.

This represents an increase of sixteen employees, or 15% from December 31, 2023 due primarily to the hiring of additional employees throughout the organization as the company continues to grow.

Currently, none of our employees participate in collective bargaining agreements, and we consider our employee relations to be good.

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Global Water Management, LLC (“GWM”) was formed as an affiliated company to provide business development, management, construction project management, operations, and administrative services to GWR and all of its regulated subsidiaries.

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In early 2010, the members of GWR made the decision to raise money through the capital markets, and GWR and GWM were reorganized to form Global Water Resources, Inc., a Delaware corporation.

The members established a new entity, GWR Global Water Resources Corp.

(“GWRC”), which was incorporated under the Business Corporations Act (British Columbia) on March 23, 2010 to acquire shares of our common stock and to actively participate in our management, business, and operations through its representation on our board of directors and its shared management.

(“GWRC”), which was incorporated under the Business Corporations Act (British Columbia) on March 23, 2010 to acquire shares of GWRI’s common stock and to actively participate in its management, business, and operations through its representation on GWRI’s Board of Directors.

On December 30, 2010, GWRC completed its initial public offering in Canada and its common shares were listed on the Toronto Stock Exchange.

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The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov .

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business