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

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_____________________________________________________________

FORM 10-Q

_____________________________________________________________

(Mark One)


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

For the quarterly period ended June 30, 2024


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

For the transition period from _______________ to _______________

Commission File Number: 001-37756

______________________________________________________________

Global Water Resources, Inc.

(Exact Name of Registrant as Specified in its Charter)

______________________________________________________________

Delaware

90-0632193

(State or other jurisdiction of
incorporation or organization)

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

21410 N. 19th Avenue #220

Phoenix,

Arizona

85027

(Address of principal executive offices)

(Zip Code)

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

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

______________________________________________________________


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

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

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

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

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

Smaller reporting company

Emerging growth company

☐

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

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

As of August 7, 2024, the registrant had 24,217,410 shares of common stock, $0.01 par value per share, outstanding.

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TABLE OF CONTENTS



PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Shareholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39

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Table of Contents PART I—FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

GLOBAL WATER RESOURCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(in thousands, except share and per share amounts)

(Unaudited)


	June 30, 2024		December 31, 2023
ASSETS
PROPERTY, PLANT AND EQUIPMENT:
Land	$	2,674	$	2,674
Depreciable property, plant and equipment	417,463		414,170
Construction work-in-progress	59,095		48,147
Other	697		697
Less accumulated depreciation	(147,984)		(142,367)
Net property, plant and equipment	331,945		323,321
CURRENT ASSETS:
Cash and cash equivalents	18,148		3,087
Accounts receivable, net	2,848		2,845
Customer payments in-transit	604		543
Unbilled revenue	3,406		2,755
Taxes, prepaid expenses and other current assets	1,874		2,494
Total current assets	26,880		11,724
OTHER ASSETS:
Goodwill	9,486		10,820
Intangible assets, net	8,573		8,841
Regulatory assets	4,197		2,898
Restricted cash	1,548		1,676
Right-of-use assets	1,753		1,741
Other noncurrent assets	78		74

Total other assets	25,635		26,050
TOTAL ASSETS	$	384,460	$	361,095
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	1,133	$	1,027
Accrued expenses	7,168		7,129

Customer and meter deposits	1,596		1,628
Long-term debt, current portion	3,882		3,880
Leases, current portion	655		553
Total current liabilities	14,434		14,217
NONCURRENT LIABILITIES:
Line of credit	—		2,315
Long-term debt	119,070		101,341
Long-term lease liabilities	1,292		1,370
Deferred revenue - ICFA	19,974		19,656
Regulatory liabilities	5,875		6,076
Advances in aid of construction	116,389		111,529
Contributions in aid of construction, net	39,062		36,409
Deferred income tax liabilities, net	9,083		8,284
Acquisition liabilities	3,013		3,048
Other noncurrent liabilities	8,653		8,230
Total noncurrent liabilities	322,411		298,258
Total liabilities	336,845		312,475
Commitments and contingencies (Refer to Note 13)
SHAREHOLDERS’ EQUITY:
Common stock, $0.01 par value, 60,000,000 shares authorized; 24,561,035 and 24,492,918 shares issued as of June 30, 2024 and December 31, 2023, respectively.	240		240
Treasury stock, 343,625 and 317,677 shares at June 30, 2024 and December 31, 2023, respectively.	(2)		(2)
Paid in capital	46,671		47,585
Retained earnings	706		797
Total shareholders’ equity	47,615		48,620
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	384,460	$	361,095

See accompanying notes to the condensed consolidated financial statements

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GLOBAL WATER RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
REVENUES:
Water services	$	6,668	$	6,557	$	11,894	$	11,396
Wastewater and recycled water services	6,842		6,443		13,226		12,464
Unregulated revenues	—		—		—		2,268
Total revenues	13,510		13,000		25,120		26,128

OPERATING EXPENSES:
Operations and maintenance	3,485		3,181		6,769		5,970
General and administrative	4,232		4,104		8,357		8,011
Depreciation and amortization	2,996		2,705		5,930		5,360
Total operating expenses	10,713		9,990		21,056		19,341
OPERATING INCOME	2,797		3,010		4,064		6,787

OTHER INCOME (EXPENSE):
Interest income	266		2		504		7
Interest expense	(1,507)		(1,281)		(3,073)		(2,449)
Allowance for equity funds used during construction	237		216		444		515

Other, net	535		523		1,330		941
Total other expense	(469)		(540)		(795)		(986)

INCOME BEFORE INCOME TAXES	2,328		2,470		3,269		5,801
INCOME TAX EXPENSE	(598)		(731)		(848)		(1,596)
NET INCOME	$	1,730	$	1,739	$	2,421	$	4,205

Basic earnings per common share	$	0.07	$	0.07	$	0.10	$	0.18
Diluted earnings per common share	$	0.07	$	0.07	$	0.10	$	0.17
Dividends declared per common share	$	0.08	$	0.07	$	0.15	$	0.15

Weighted average number of common shares used in the determination of:
Basic	24,199,472		23,958,205		24,187,586		23,914,866
Diluted	24,308,524		24,038,902		24,306,316		24,033,994

See accompanying notes to the condensed consolidated financial statements

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GLOBAL WATER RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands, except share and per share amounts)

(Unaudited)


	Common Stock Shares	Common Stock		Treasury Stock Shares	Treasury Stock		Paid-in Capital		Retained Earnings		Total Equity
BALANCE - December 31, 2022	24,095,139	$	239	(224,093)	$	(2)	$	44,157	$	—	$	44,394
Dividend declared $0.07 per share	—	—		—	—		—		(1,778)		(1,778)


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












BALANCE - December 31, 2023	24,492,918	240		(317,677)	(2)		47,585		797		48,620
Dividend declared $0.08 per share	—	—		—	—		(1,128)		(691)		(1,819)

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

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


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

See accompanying notes to the condensed consolidated financial statements

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GLOBAL WATER RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)


	Six Months Ended June 30,
	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	2,421	$	4,205
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,930		5,360
Deferred compensation	595		734
Deferred income tax expense	838		1,090
Allowance for equity funds used during construction	(444)		(515)
Provision for credit losses	35		35
Amortization of deferred debt issuance costs and discounts	41		22
Gain on disposal of fixed assets	(17)		(66)
Right of use amortization	214		192
Changes in assets and liabilities
Accounts receivable	(38)		(885)
Other current assets	(91)		694
Accounts payable and other current liabilities	101		392
Other noncurrent assets	(21)		160
Other noncurrent liabilities	4,007		1,237
Net cash provided by operating activities	13,571		12,655

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(12,207)		(13,693)
Cash paid for acquisitions, net of cash acquired	—		(6,246)

Other	(4)		—
Net cash used in investing activities	(12,211)		(19,939)

CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid	(3,640)		(3,572)
Advances in aid of construction	2,215		420

Payments for taxes related to net shares settlement of equity awards	(268)		(357)
Principal payments under finance leases	(110)		(258)

Repayments of notes payable	(1,917)		(1,917)
Line of credit borrowings	—		18,200
Line of credit repayments	(2,315)		(11,435)
Loan borrowings	20,000		253
Loan repayments	(23)		—
Debt issuance costs paid	(369)		—
Proceeds from sale of stock	—		2,748

Refunds of developer taxes	—		(5)



Net cash provided by financing activities	13,573		4,077
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	14,933		(3,207)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period	4,763		7,562
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	$	19,696	$	4,355

See accompanying notes to the condensed consolidated financial statements

Supplemental disclosure of cash flow information:


	Six Months Ended June 30,
	2024		2023
Cash and cash equivalents	$	18,148	$	2,007
Restricted cash	1,548		2,348
Total cash, cash equivalents, and restricted cash	$	19,696	$	4,355

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GLOBAL WATER RESOURCES, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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

Basis of Presentation and Principles of Consolidation

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

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

Corporate Transactions

Asset Purchase Agreement with City of Tucson

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

Other Deferred Liability

In September 2023, the Company received $6.7 million in contributions from the City of Maricopa to facilitate the construction of infrastructure in certain areas, which is included in other noncurrent liabilities on the Company’s condensed consolidated balance sheets. As the infrastructure is constructed and placed into service, the corresponding amount will be transferred from the liability into advances in aid of construction during the applicable refund period.

Private Placement Offering of 6.91% Senior Secured Notes

Private Placement Offering of Common Stock

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

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Farmers Water Co. Acquisition

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

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

On July 14, 2015, the Company closed the stipulated condemnation to transfer the operations and assets of Valencia Water Company, Inc. (“Valencia”) to the City of Buckeye. Terms of the condemnation were agreed upon through a settlement agreement and stipulated final judgment of condemnation wherein the City of Buckeye acquired all the operations and assets of Valencia and assumed operation of the utility upon close. The City of Buckeye is obligated to pay the Company a growth premium equal to $3,000 for each new water meter installed within Valencia’s prior service areas in the City of Buckeye, for a 20-year period ending December 31, 2034, subject to a maximum payout of $45.0 million over the term of the agreement. The Company received growth premiums of $0.5 million and $1.3 million for the three and six months ended June 30, 2024, respectively. The Company received growth premiums of $0.5 million and $0.9 million for the three and six months ended June 30, 2023, respectively. An aggregate of $12.0 million in growth premiums have been received to date. The growth premiums are included in “Other, net” on the Company’s condensed consolidated financial statements of operations.

Significant Accounting Policies

Basic and Diluted Earnings per Common Share

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


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
(In thousands)
Basic weighted average common shares outstanding	24,199	23,958	24,188	23,915
Effect of dilutive securities:
2017 Option grant	66	64	65	81
2019 Option grant	13	6	13	18
2020 Restricted stock awards	—	9	—	10
2021 Restricted stock awards	31	2	40	10
Total dilutive securities	110	81	118	119
Diluted weighted average common shares outstanding	24,309	24,039	24,306	24,034
Anti-dilutive shares excluded from earnings per diluted shares(1)	—	98	—	98

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

Segments

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

While the Company reports its revenue, disaggregated by service type, on the face of its condensed consolidated financial statements of operations, the Company does not manage the business based on any performance measure at the individual

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revenue stream level. The Company does not have any customers that contribute more than 10% to the Company’s revenues or revenue streams. Additionally, the Company notes that the CODM uses consolidated financial information to evaluate the Company’s performance, which is the same basis on which he communicates the Company’s results and performance to the Board of Directors. It is upon this consolidated basis from which he bases all significant decisions regarding the allocation of the Company’s resources on a consolidated level. Based on the information described above and in accordance with the applicable literature, management has concluded that the Company is currently organized and operated as one operating and reportable segment.

Recent Accounting Pronouncements

Future Adoption of Accounting Standards

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

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures that expands disclosures of significant segment expenses and includes new disclosures for entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is assessing the timing and impact that adopting this new standard will have on its consolidated financial statements.

2. REGULATORY DECISION AND RELATED ACCOUNTING AND POLICY CHANGES

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

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

2024 Farmers Rate Case

On June 27, 2024, Global Water-Farmers Water Company, Inc. (“GW-Farmers”), one of the Company’s regulated utilities, filed a rate case application with the ACC for increased water rates based on a 2023 test year with updates for changes in post-test year plant through December 31, 2024. The application requests, among other things, a revenue increase of approximately $1.3 million phased-in over two steps and recovery of the acquisition premium related to the Farmers Water Co. acquisition. On July 25, 2024, ACC Utilities Division Staff found the application administratively complete and estimates their testimony regarding the application will be filed on or about December 9, 2024. There can be no assurance that the ACC will approve the requested rate increase or the requested recovery of the acquisition premium, and the ACC could take other actions as a result of the rate case. Further, it is possible that the ACC may determine to decrease future rates.

Acquisition of Seven Systems from City of Tucson

On May 10, 2024, GW-Ocotillo filed an Application at the ACC for approval to acquire seven isolated systems from the City of Tucson. On June 10, 2024, ACC Utilities Division Staff found the application administratively complete.

2025 Santa Cruz and Palo Verde Rate Case

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

Southwest Plant Accounting Order and Bill Credit

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

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

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

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

The ACC also approved:

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

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

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

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

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

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

Decision No. 78644 - Issued July 27, 2022

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

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

Regulatory Assets and Liabilities

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

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

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


	Recovery Period	June 30, 2024		December 31, 2023
Regulatory Assets
Income taxes recoverable through future rates (1)	Various	$	1,365	$	1,404
Rate case expense surcharge(2)	2 years	175		221
Acquisition premiums(3)	25 or 50 years	2,624		1,269
Other regulatory assets		33		4
Total regulatory assets		$	4,197	$	2,898

Regulatory Liabilities
Income taxes payable through future rates(1)		$	478	$	488
Acquired ICFAs(4)		4,708		4,896
Depreciation adjustment(5)		689		692
Total regulatory liabilities		$	5,875	$	6,076

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

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

Decision No. 79383, issued on June 20, 2024, approved approximately $0.1 million in rate case expenses to be recovered through a rate case expense surcharge over a period of up to a two-years.

(3) Decision No. 78319, issued on December 3, 2021, approved an acquisition premium related to the acquisition of the Company’s GW-Rincon utility. Decision No. 79383 was issued on June 20, 2024 allowing the Company to begin amortization of the acquisition premium through customer rates over 50 years. The acquisition premium balance as of June 30, 2024 was approximately $0.6 million.

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

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Decision No. 79383 approved acquisition premiums related to the acquisition of the Company’s GW-Francesca, GW-Las Quintas Serenas, GW-Lyn Lee, GW-Mirabell, and GW-Tortolita utilities. The acquisition premiums will be amortized through customer rates over 50 years as approved in the decision. The acquisition premium balance as of June 30, 2024 was approximately $1.3 million.

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

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

3. REVENUE RECOGNITION

Regulated Revenue

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

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

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

Unregulated Revenue

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

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

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

Payments for ICFAs are usually received in advance. Decision No. 74364 requires a hook-up fee (“HUF”) tariff to be established for all ICFAs that come due and are paid subsequent to December 31, 2013, which is a set amount per equivalent

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dwelling unit determined by the ACC based on the utility and meter size. Also pursuant to Decision No. 74364, as payments are received, 70% of the payment must be recorded as a HUF liability until the HUF liability is fully funded, with the remaining amount initially recorded to deferred revenue until earned. The Company is responsible for assuring that the full HUF tariff, which is the set amount determined by the rate decision, is funded in the HUF liability, even if it results in recording less than 30% of the overall ICFA funds as deferred revenue. ICFA revenue is recognized when the Company completes the performance obligations under the agreement. Following its issuance in February 2014, Decision No. 74364 prohibits the Company from entering into any new ICFAs.

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

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


	December 31, 2023 Balance		Payments Allocated to Deferred Revenue		Revenue Recognized		June 30, 2024 Balance
Deferred Revenue - ICFA	$	19,656	$	318	$	—	$	19,974

Disaggregated Revenues

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
REGULATED REVENUE
Water Services
Residential	$	4,807	$	4,470	$	8,969	$	8,361
Irrigation	887		983		1,254		1,347
Commercial	463		434		848		726
Construction	240		373		393		500
Other water revenues	271		297		430		462
Total water revenues	6,668		6,557		11,894		11,396
Wastewater and recycled water services
Residential	5,977		5,562		11,811		11,094
Commercial	354		301		698		589
Recycled water revenues	406		473		527		593
Other wastewater revenues	105		107		190		188
Total wastewater and recycled water revenues	6,842		6,443		13,226		12,464
TOTAL REGULATED REVENUE	13,510		13,000		25,120		23,860
UNREGULATED REVENUE
ICFA revenues	—		—		—		2,268


TOTAL UNREGULATED REVENUE	—		—		—		2,268
TOTAL REVENUE	$	13,510	$	13,000	$	25,120	$	26,128

Contract Balances

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


	June 30, 2024		December 31, 2023
CONTRACT ASSETS
Accounts receivable
Water services	$	1,689	$	1,588
Wastewater and recycled water services	1,292		1,379
Total contract assets	$	2,981	$	2,967
CONTRACT LIABILITIES
Deferred revenue - ICFA	$	19,974	$	19,656


Total contract liabilities	$	19,974	$	19,656

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted revenue expected to be recognized in future periods was approximately $20.0 million and $19.7 million as of June 30, 2024 and December 31, 2023, respectively. Deferred revenue - ICFA is recognized as revenue once the obligations specified within the applicable ICFA are met, including construction of sufficient operating capacity to serve the customers for which revenue was deferred. Due to the uncertainty of future events, the Company is unable to estimate when to expect recognition of deferred revenue - ICFA.

Accounts Receivable and Allowance for Credit Losses

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


	June 30, 2024		December 31, 2023
Billed receivables	$	2,981	$	2,967
Less provision for credit losses	(133)		(122)
Accounts receivable, net	$	2,848	$	2,845

The following table summarizes the allowance for credit loss activity for the six months ended June 30, 2024 and the twelve months ended December 31, 2023 (in thousands).


	June 30, 2024		December 31, 2023
Beginning of Period	$	(122)	$	(164)
Credit Loss Expense	(35)		(76)
Write Offs	48		124
Recoveries	(24)		(6)
End of Period	$	(133)	$	(122)

4. PROPERTY, PLANT AND EQUIPMENT

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


	June 30, 2024		December 31, 2023
Equipment	$	61,294	$	60,536
Office buildings and other structures	64,603		64,084
Transmission and distribution plant	291,566		289,550
Total property, plant and equipment	$	417,463	$	414,170

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

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

5. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The goodwill balance was $9.5 million as of June 30, 2024 and is related to the GW-Turner Ranches, GW-Red Rock, GW-Mirabell, GW-Francesca, GW-Tortolita, GW-Lyn Lee, GW-Las Quintas Serenas, GW-Rincon, Twin Hawks Utility, Inc., and GW-Farmers acquisitions. There were no indicators of impairment identified as a result of the Company’s review of events and circumstances related to its goodwill subsequent to the acquisitions.

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

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


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

Intangible Assets

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


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

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

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Franchise contract rights and organizational costs relate to the 2018 acquisition of GW-Red Rock and the 2023 acquisition of GW-Farmers. Franchise contract rights are agreements with Pima and Pinal counties for GW-Red Rock and Pima county for GW-Farmers that allow the Company to place infrastructure in public right-of-way and permits expected to be renewable indefinitely. The organizational costs represent fees paid to federal or state governments for the privilege of incorporation and expenditures incident to organizing the corporation and preparing it to conduct business.

Acquired ICFAs and Sonoran contract rights relate to acquired rights under certain ICFAs through the 2004 acquisition of GW-Santa Cruz and GW-Palo Verde and the 2005 acquisition of Sonoran assets, respectively, which are amortized when cash is received in proportion to the amount of total cash expected to be received under the underlying agreements. Due to the uncertainty of the timing of when cash will be received under ICFA agreements and contract rights, the Company cannot reliably estimate when the remaining intangible assets’ amortization will be recorded. There was $0.3 million of amortization recorded for these balances during the three and six months ended June 30, 2024. There was no amortization recorded for these balances during the three and six months ended June 30, 2023.

6. TRANSACTIONS WITH RELATED PARTIES

The Company provides medical benefits to employees through its participation in a pooled plan sponsored by an affiliate of a significant shareholder and director of the Company. Medical claims paid to the plan were approximately $0.3 million for the three months ended June 30, 2024 and $0.2 million for the three months ended June 30, 2023. Medical claims paid to the plan were approximately $0.5 million for the six months ended June 30, 2024 and $0.3 million for the six months ended June 30, 2023.

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

7. ACCRUED EXPENSES

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


	June 30, 2024		December 31, 2023
Property taxes	$	1,292	$	1,242
Interest	1,168		480
Accrued bonus	706		602
Customer prepayments	693		883
Dividend payable	606		606
Accrued project liabilities	565		1,001






Other accrued liabilities	2,138		2,315
Total accrued expenses	$	7,168	$	7,129

8. FAIR VALUE

Fair Value of Financial Instruments

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

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

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

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

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


	June 30, 2024								December 31, 2023
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Asset/Liability Type:
HUF Funds - restricted cash(1)	$	603	$	—	$	—	$	603	$	822	$	—	$	—	$	822
Demand Deposit(2)	1		—		—		1		1		—		—		1
Certificate of Deposit - Restricted(1)	944		—		—		944		—		854		—		854
Contingent Consideration(3)	—		—		2,078		2,078		—		—		2,113		2,113
Total	$	1,548	$	—	$	2,078	$	3,626	$	823	$	854	$	2,113	$	3,790

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

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

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

In addition, as part of the GW-Farmers acquisition, the Company is required to pay the seller a growth premium equal to $1,000 (not in thousands) for each new account established in the service area, up to a total aggregate growth premium of $3.5 million. The obligation period of the growth premium commences on the closing date of the acquisition and ends (i) ten years after the first new account for residential purposes is established on land that is, at the time of the closing date of the acquisition, undeveloped or unplatted and owned by the seller within the service area or (ii) ten years after the date of closing if a new account (as previously described) has not been established.

The fair value of the acquisition liability was calculated using a discounted cash flow technique which utilized unobservable inputs developed using the Company’s estimates and assumptions. Significant inputs used in the fair value calculation are as follows: year of the first meter installation, total new accounts per year, years to complete full build out, and discount rate.

9. DEBT

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


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

	3,833		119,667		3,833		101,583
OTHER
Debt issuance costs	—		(756)		—		(426)
Loan Payable	49		159		47		184
Total debt	$	3,882	$	119,070	$	3,880	$	101,341

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


	June 30, 2024				December 31, 2023
	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Long-term debt(1)	—	118,543	—	118,543	—	100,746	—	100,746

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

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

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

On April 30, 2024, the Company’s GW-Rincon utility entered into a loan agreement with the Water Infrastructure Finance Authority of Arizona (WIFA) for a principal amount of $2.4 million to improve the utility’s infrastructure, of which $0.7 million is forgivable. The loan is due on April 1, 2044 and bears an interest rate of 4.911%. The loan is funded through one or more draw requests submitted by the Company and the subsequent disbursement of principal by WIFA. As of June 30, 2024, the Company had received no disbursements of principal under this agreement.

Revolving Credit Line

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

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

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

As of June 30, 2024, the Company had no outstanding borrowings under this credit line. As of December 31, 2023, the outstanding borrowings on this credit line were approximately $2.3 million. There were approximately $12,000 and $25,000 unamortized debt issuance costs as of June 30, 2024 and December 31, 2023, respectively.

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

10. INCOME TAXES

For the three months ended June 30, 2024, tax expense of $0.6 million was recorded on pre-tax income of $2.3 million, compared to tax expense of $0.7 million recorded on pre-tax income of $2.5 million for the three months ended June 30, 2023.

For the six months ended June 30, 2024, tax expense of $0.8 million was recorded on pre-tax income of $3.3 million, compared to tax expense of $1.6 million recorded on pre-tax income of $5.8 million for the six months ended June 30, 2023.

The income tax provision was computed on the Company’s estimated effective tax rate and forecasted income expected for the full year, including the impact of any unusual, infrequent, or non-recurring items. The Company’s effective tax rate was 24.93% and 25.25% as of June 30, 2024 and 2023, respectively.

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11. DEFERRED COMPENSATION AWARDS

Stock-based compensation

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

2017 stock option grant

In August 2017, GWRI’s Board of Directors granted stock options to acquire 465,000 shares of GWRI’s common stock to employees throughout the Company. The options were granted with an exercise price of $9.40, the market price of the Company’s common shares on the NASDAQ Global Market at the close of business on August 10, 2017. The options vested over a four-year period, with 25% having vested in August 2018, 25% having vested in August 2019, 25% having vested in August 2020, and 25% having vested in August 2021. The options have a 10-year life. The Company expensed the $1.1 million fair value of the stock option grant ratably over the four-year vesting period. As of August 2021, these options were fully expensed. As of June 30, 2024, 125,750 options have been exercised and 70,425 options have been forfeited with 268,825 options outstanding.

2019 stock option grant

In August 2019, GWRI’s Board of directors granted stock options to acquire 250,000 shares of GWRI’s common stock to employees throughout the Company. The options were granted with an exercise price of $11.26, the market price of the Company’s common shares on the NASDAQ Global Market at the close of business on August 13, 2019. The options vested over a four-year period, with 25% having vested in August 2020, 25% having vested in August 2021, 25% having vested in August 2022, and 25% having vested in August 2023. The options have a 10-year life. The Company expensed the $0.8 million fair value of the stock option grant ratably over the four-year vesting period. As of August 2023, these options were fully expensed. Stock-based compensation expense of $29,000 and $72,000 was recorded for the three and six months ended June 30, 2023, respectively. As of June 30, 2024, 55,994 options have been exercised and 63,020 options have been forfeited with 130,986 options outstanding.

Restricted stock units

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


			Amounts Paid For the Three Months Ended June 30,				Amounts Paid For the Six Months Ended June 30,
Grant Date	Units Granted	Units Outstanding	2024		2023		2024		2023
Q1 2021	27,403	—	—		28		28		57
Q1 2022	22,262	5,334	23		23		46		48
Q1 2023	30,366	16,974	31		32		63		32
Q1 2024	30,962	28,382	33		—		33		—
Total	110,993	50,690	$	87	$	83	$	170	$	137

Stock appreciation rights

The following table details the recipients of the stock appreciation rights (“SARs”) awards, the grant date, units granted, exercise price, outstanding units as of June 30, 2024 and amounts paid during the three and six months ended June 30, 2024 and 2023 (in thousands, except unit and per unit amounts):

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						Amounts Paid For the Three Months Ended June 30,				Amounts Paid For the Six Months Ended June 30,
Recipients	Grant Date	Units Granted	Exercise Price		Units Outstanding	2024		2023		2024		2023
Members of Management (1)(2)	Q1 2015	299,000	$	4.26	12,500	—		—		$	—	$	165
Members of Management (1)(3)	Q1 2018	33,000	$	8.99	8,250	—		—		—		—
Total		332,000			20,750	$	—	$	—	$	—	$	165

(1)The SARs vested ratably over 16 quarters from the grant date.

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

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

For both the three months ended June 30, 2024 and 2023, the Company recorded approximately $0.1 million of compensation expense related to the RSUs and SARs. For the six months ended June 30, 2024 and 2023, the Company recorded approximately $0.2 million and $0.1 million, respectively, of compensation expense related to the RSUs and SARs. These are liability awards, so when the stock price decreases, cumulative compensation expense is reduced, which can lead to negative compensation in a given period. Based on GWRI’s closing share price on June 28, 2024 (the last trading date of the quarter), deferred compensation expense to be recognized over future periods is estimated for the years ending December 31 as follows (in thousands):


	RSUs
2024 (remaining period)	$	164
2025	263
2026	125

Total	$	552

Restricted stock awards

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

No RSAs were granted during the three and six months ended June 30, 2024 or 2023. The following table details the compensation expense related to the partial vesting of previously granted RSAs for the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				For The Six Months Ended June 30,
	2024		2023		2024		2023
Compensation expense	$	197	$	255	$	395	$	537

12. SUPPLEMENTAL CASH FLOW INFORMATION

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


	For the Six Months Ended June 30,
	2024		2023
Supplemental cash flow information:
Cash paid for interest - net of amounts capitalized	$	2,290	$	2,397



Non-cash financing and investing activities:
Capital expenditures included in accounts payable and accrued liabilities	$	710	$	2,045
Business acquisition through issuance of contingent consideration payable	$	—	1,330
Finance lease additions	$	290	$	—

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13. COMMITMENTS AND CONTINGENCIES

Commitments

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

On February 1, 2023, the Company acquired all of the equity of Farmers Water Co., an operator of a water utility with service area in Pima County, Arizona. Under the terms of the purchase agreement, the Company is obligated to pay the seller a growth premium equal to $1,000 for each new account established in the service area, up to a total aggregate growth premium of $3.5 million. The obligation period of the growth premium commences on the closing date of the acquisition and ends (i) ten years after the first new account for residential purposes is established on land that is, at the time of the closing date of the acquisition, undeveloped or unplatted and owned by the seller within the service area or (ii) ten years after the date of closing if a new account (as described above) has not been established. The assumptions and estimates used in determining the acquisition liability related to the growth premium are consistent with previous acquisitions. As of June 30, 2024, the remaining liability was $1.2 million.

On October 16, 2018, the Company completed the acquisition of GW-Red Rock, an operator of a water and a wastewater utility with service areas in the Pima and Pinal counties of Arizona. Under the terms of the purchase agreement, the Company is obligated to pay to the seller a growth premium equal to $750 for each new account established within three specified growth premium areas, commencing in each area on the date of the first meter installation and ending on the earlier of ten years after such first installation date or twenty years from the acquisition date. As of June 30, 2024, no meters have been installed and no accounts have been established in any of the three growth premium areas. As of June 30, 2024, the remaining liability was $0.8 million.

Contingencies

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

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Cautionary Statement Regarding Forward-Looking Statements

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

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

Overview

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

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

•Regional planning;

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

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

Business Outlook

We continue to experience an increasing rate of organic growth, exclusive of acquisition related growth, evidenced by our year over year increase in active connections of 4.9% as compared to 1.9% for the same period in 2023. According to the most recent U.S. Census estimates, the Phoenix metropolitan statistical area (“MSA”) is the 10th largest MSA in the U.S. and had an estimated population of 5.1 million, an increase of 4.6% over the 4.8 million people reported in the 2020 Census. Metropolitan Phoenix continues to grow due to its favorable employment opportunities, excellent weather, large and growing universities, a diverse employment base, and low taxes. The Employment and Population Statistics Department of the State of Arizona predicts that the Phoenix metropolitan area will have a population of 5.8 million people by 2030 and 6.5 million by 2040. Arizona’s job growth increased by 2.2% during the first six months of 2024 as compared to the same period for the prior year, ranking the state in the top ten nationally as of June 30, 2024.

According to the W.P. Carey School of Business Greater Phoenix Blue Chip Real Estate Consensus Panel (the “Greater Phoenix Blue Chip Panel”), interest rate shock negatively impacted permit activity in the Phoenix metropolitan area, particularly between July 2022 and June 2023. Further, the Greater Phoenix Blue Chip Panel concluded that the recovery from that interest rate shock resulted in permit activity increasing by more than 44% in the first five months of 2024. The Greater Phoenix Blue Chip Panel anticipates single family permit growth by more than 27% for 2024 as a whole. Further, single family permits in the City of Maricopa increased 43% for the first half of 2024 as compared to the same period in the prior year. Management believes that we are well-positioned to benefit from the growth expected in the Phoenix metropolitan area due to the availability of lots, existing infrastructure in place within our services areas, and increased activity related to multi-family developments.

Factors Affecting our Results of Operations

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

•population and community growth;

•economic and environmental utility regulation;

•economic environment;

•the need for infrastructure investment;

•production and treatment costs;

•weather and seasonality; and

•access to and quality of water supply.

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

Population and Community Growth

Population and community growth in the metropolitan Phoenix area served by our utilities have a direct impact on our earnings. An increase or decrease in our active service connections will affect our revenues and variable expenses in a corresponding manner. As of June 30, 2024, active service connections increased 2,965, or 4.9%, to 63,256 compared to 60,291 active service connections as of June 30, 2023, primarily due to organic growth in our service areas. Approximately 89.5% of the 63,256 active service connections are serviced by our Global Water - Santa Cruz Water Company, Inc.

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(“GW-Santa Cruz”) and Global Water - Palo Verde Utilities Company, Inc. (“GW-Palo Verde”) utilities as of June 30, 2024.

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

Economic and Environmental Utility Regulation

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

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

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

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

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

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

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

Infrastructure Investment

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

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

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Production and Treatment Costs

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

Weather and Seasonality

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

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

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

Access to and Quality of Water Supply

In many areas of Arizona (including certain areas that we service), water supplies are limited and, in some cases, current usage rates exceed sustainable levels for certain water resources. We currently rely predominantly (and are likely to continue to rely) on the pumping of groundwater and the generation and delivery of recycled water for non-potable uses to meet future demands in our service areas. At present, groundwater (and recycled water derived from groundwater) is the primary water supply available to us. In addition, regulatory restrictions on the use of groundwater and the development of groundwater wells, lack of available water rights, drought, overuse of local or regional sources of water, protection of threatened species or habitats, or other factors, including climate change, may limit the availability of ground or surface water. Additionally, in the majority of the Phoenix Active Management Area, the Arizona Department of Water Resources (“ADWR”) has paused the issuance of new certificates of assured water supply based on groundwater and paused modifications of any designations of assured water supply for the increase in groundwater. Approximately 1.76% of the Company’s water connections are located within the Phoenix Active Management Area. We believe that we have an adequate supply of water to service our current demand and growth for the foreseeable future in our service areas. For additional information and risks associated with the access to and quality of water supply, see “Risk Factors,” included in Part I, Item 1A of the 2023 Form 10-K.

Rate Case and Regulatory Activity

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

2024 Farmers Rate Case

Acquisition of Seven Systems from City of Tucson

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2025 Santa Cruz and Palo Verde Rate Case

Southwest Plant Accounting Order and Bill Credit

On July 3, 2023, the Company’s GW-Palo Verde and GW-Santa Cruz utilities filed an application with the ACC for approval of an accounting order to defer and record as a regulatory asset the depreciation expense recorded for the Company’s Southwest Plant, plus the carrying cost at the authorized rate of return set in GW-Palo Verde’s and GW-Santa Cruz’s most recent rate order, until the plant is considered for recovery in the next GW-Palo Verde and GW-Santa Cruz rate case. In January 2024, the Company discovered that approximately $7.8 million of construction costs for the Southwest Plant had been prematurely included as “plant in service” for rate making purposes in 2007 and were reflected in the calculation of customer rates in Decision No. 71878 (September 15, 2010). Those costs were also included as “plant in service” in Decision No. 74364 (February 26, 2014) and Decision No. 78644 (July 27, 2022). The Company disclosed this circumstance to the ACC on March 1, 2024, and on April 25, 2024, GW-Palo Verde filed an application with the ACC requesting a monthly bill credit for customers that would be in place until the conclusion of the next GW-Palo Verde rate case. The ACC issued Decision No. 79424 on July 18, 2024 approving the bill credit with an effective date of August 1, 2024, which will reduce revenue earned subsequent to the order by approximately $570,000 annually. The bill credit will be in place until the conclusion of the next GW-Palo Verde rate case, which Decision No. 79424 requires GW-Palo Verde to file no later than December 31, 2025.

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

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

Decision No. 78644 - Issued July 27, 2022

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

Corporate Transactions

Asset Purchase Agreement with City of Tucson

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

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Private Placement Offering of 6.91% Senior Secured Notes

Refer to Note 9 - “Debt” of the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report for additional details.

Private Placement Offering of Common Stock

Farmers Water Co. Acquisition

Stipulated Condemnation of the Operations and Assets of Valencia

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

Segment Reporting

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

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

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

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

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	For the Three Months Ended June 30,
	2024		2023
Revenues	$	13,510	$	13,000
Operating expenses	10,713		9,990
Operating income	2,797		3,010
Total other expense	(469)		(540)
Income before income taxes	2,328		2,470
Income tax expense	(598)		(731)
Net income	$	1,730	$	1,739

Basic earnings per common share	$	0.07	$	0.07
Diluted earnings per common share	$	0.07	$	0.07

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


	For the Three Months Ended June 30,
	2024		2023
Water services	$	6,668	$	6,557
Wastewater and recycled water services	6,842		6,443
Unregulated revenues	—		—
Total revenues	$	13,510	$	13,000

Total revenues increased $0.5 million, or 3.9%, to $13.5 million for the three months ended June 30, 2024 compared to $13.0 million for the three months ended June 30, 2023. The increase in revenue was primarily attributable to the 4.9% organic growth in active connections (including both water and wastewater connections), partially offset by a slight decrease in overall consumption.

Water Services – Water services revenue increased $0.1 million, or 1.7%, to $6.7 million for the three months ended June 30, 2024 compared to $6.6 million for the three months ended June 30, 2023. The increase in water services revenue was primarily related to the organic connection growth in active water connections of 4.6%, partially offset by a 2.9% decrease in consumption.

Water services revenue associated with the basic service charge, excluding miscellaneous charges, increased $0.2 million, or 7.1%, to $3.4 million for the three months ended June 30, 2024 compared to $3.2 million for the three months ended June 30, 2023. The increase was primarily due to the 4.6% growth in active water connections.

Active water connections increased 4.6% to 35,128 as of June 30, 2024 from 33,580 as of June 30, 2023, primarily due to organic growth in our service areas.

Water services revenue based on consumption decreased $0.1 million, or 2.9%, to $3.1 million for the three months ended June 30, 2024 compared to $3.2 million for the three months ended June 30, 2023. The slight decrease was primarily driven by reduced consumption.

Water consumption decreased by 0.02 billion gallons, or 1.7%, to 1.11 billion gallons for three months ended June 30, 2024 from 1.13 billion gallons for the three months June 30, 2023. While residential consumption increased 6.3% during the three months ended June 30, 2024 as compared to the same period for the prior year, such increase was more than offset by reductions in construction related consumption.

Wastewater and Recycled Water Services – Wastewater and recycled water services revenue increased $0.4 million, or 6.2%, to $6.8 million for the three months ended June 30, 2024 compared to $6.4 million for the three months ended June 30, 2023. The increase in wastewater and recycled water services revenue was primarily driven by a $0.5 million increase in wastewater services revenue, which reflects a 5.3% increase in active wastewater connections from 26,711 as of June 30, 2023 to 28,128 as of June 30, 2024, partially offset by a $0.1 million decrease in recycled water services revenue.

Recycled water services revenue, which is based on the volume of recycled gallons delivered, decreased $0.1 million, or 14.3%, to $0.4 million for the three months ended June 30, 2024 compared to $0.5 million for the three months ended June 30, 2023. The decrease was primarily driven by reduced consumption during the period.

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


	For the Three Months Ended June 30,
	2024		2023
Operations and maintenance	$	3,485	$	3,181
General and administrative	4,232		4,104
Depreciation and amortization	2,996		2,705
Total operating expenses	$	10,713	$	9,990

Operations and Maintenance – Operations and maintenance costs, consisting of personnel costs, production costs (primarily chemicals and purchased electrical power), maintenance costs, and property tax, increased $0.3 million, or 9.6%, to $3.5 million for the three months ended June 30, 2024 compared to $3.2 million for the three months ended June 30, 2023.

Total personnel expenses increased $0.1 million, or 7.8%, to $1.2 million for the three months ended June 30, 2024 compared to $1.1 million for the three months ended June 30, 2023. The increase in personnel expenses was primarily related to a 5.5% increase in salary and wages and a increase of 38.1% in medical insurance expenses.

Other notable increases were related to repairs and maintenance, office expenses related to information technology services, chemicals, consumables and supplies and office expenses, partially offset by a moderate decreases in contract services and rent expense.

General and Administrative – General and administrative costs include the day-to-day expenses of office operations, personnel costs, legal and other professional fees, insurance, rent, and regulatory fees. These costs increased $0.1 million, or 3.1%, to $4.2 million for the three months ended June 30, 2024 compared to $4.1 million for the three months ended June 30, 2023.

Total personnel expenses increased $0.2 million, or 10.9%, to $1.9 million for the three months ended June 30, 2024 compared to $1.7 million for the three months ended June 30, 2023. The increase was primarily related to higher salaries and wages and moving expenses.

Deferred compensation expense decreased $0.1 million, or 35.2%, to $0.3 million for the three months ended June 30, 2024 compared to $0.4 million for the three months ended June 30, 2023. The decrease was a direct result of the change in the stock price impacting certain equity-like awards (i.e., the stock price decreased $0.74 during the three months ended June 30, 2024 as compared to a $0.49 increase during the three months ended June 30, 2023). Refer to Note 11 — “Deferred Compensation Awards” of the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report for additional information.

Depreciation and amortization - Depreciation and amortization expense increased $0.3 million, or 10.8%, to $3.0 million for the three months ended June 30, 2024, compared to $2.7 million for the three months ended June 30, 2023. The increase was primarily driven by additional depreciation expense recorded as a direct result of the increase in fixed assets, which includes certain assets related to the Southwest Plant put into service July 2023, and $80,000 of amortization of an intangible asset related to acquired ICFAs that did not occur in the same period in 2023.

Other Expense – Other expense was $0.5 million for both the three months ended June 30, 2024 and June 30, 2023. For the the three months ended June 30, 2024, interest income increased $0.3 million compared to the three months ended June 30, 2023, which was mostly offset by an increase in interest expense primarily related to the senior secured notes issued in January 2024 (refer to “—Corporation Transactions” above for additional information).

Income Tax Expense – Income tax expense of $0.6 million was recorded for the three months ended June 30, 2024 compared to income tax expense of $0.7 million for the three months ended June 30, 2023. The primary driver for the change was due to the decrease in pre-tax income for three months ended June 30, 2024.

Net Income – Net income totaled $1.7 million for both the three months ended June 30, 2024 and 2023. The increase in regulated revenue of $0.5 million, decrease in tax expense of $0.1 million and a lower other expense for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was offset by higher operating expenses of $0.7 million in the current period.

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Comparison of Results of Operations for the Six Months Ended June 30, 2024 and 2023

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


	For the Six Months Ended June 30,
	2024		2023
Revenues	$	25,120	$	26,128
Operating expenses	21,056		19,341
Operating income	4,064		6,787
Total other expense	(795)		(986)
Income before income taxes	3,269		5,801
Income tax expense	(848)		(1,596)
Net income	$	2,421	$	4,205

Basic earnings per common share	$	0.10	$	0.18
Diluted earnings per common share	$	0.10	$	0.17

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


	For the Six Months Ended June 30,
	2024		2023
Water services	$	11,894	$	11,396
Wastewater and recycled water services	13,226		12,464
Unregulated revenues	—		2,268
Total revenues	$	25,120	$	26,128

Total revenues decreased $1.0 million, or 3.9%, to $25.1 million for the six months ended June 30, 2024 compared to $26.1 million for the six months ended June 30, 2023. The decrease in revenue was primarily attributable to the recognition of infrastructure coordination and financing agreement (“ICFA”) related revenue during the six months ended June 30, 2023 that did not recur in the current period, partially offset by an increase of $1.3 million in regulated revenue primarily from organic connection growth.

Water Services – Water services revenue increased $0.5 million, or 4.4%, to $11.9 million for the six months ended June 30, 2024 compared to $11.4 million for the six months ended June 30, 2023. The increase in water services revenue was primarily related to the organic connection growth in active water connections of 4.6%.

Water services revenue associated with the basic service charge, excluding miscellaneous charges, increased $0.5 million, or 7.6%, to $6.8 million for the six months ended June 30, 2024 compared to $6.3 million for the six months ended June 30, 2023. The increase was primarily due to the 4.6% growth in active water connections.

Active water connections increased 4.6% to 35,128 as of June 30, 2024 from 33,580 as of June 30, 2023, primarily due to organic growth in our service areas.

Water services revenue based on consumption was $4.8 million for both the six months ended June 30, 2024 and 2023.

Water consumption increased 1.3% to 1.78 billion gallons for the six months ended June 30, 2024 compared to 1.76 billion for the six months ended June 30, 2023.

Wastewater and Recycled Water Services – Wastewater and recycled water services revenue increased $0.7 million, or 6.1%, to $13.2 million for the six months ended June 30, 2024 compared to $12.5 million for the six months ended June 30, 2023. The increase was primarily driven by higher wastewater services revenue of $0.8 million resulting from the 5.3% increase in active wastewater connections from 26,711 as of June 30, 2023 to 28,128 as of June 30, 2024, partially offset by a $0.1 million decrease in recycled water services revenue.

Recycled water services revenue, which is based on the number of gallons delivered and directly impacted by wastewater volume, decreased by approximately 11.2% to $0.5 million for the six months ended June 30, 2024 from $0.6 million for the six months ended June 30, 2023. The volume of recycled water delivered decreased by 15.8% with 301 million gallons

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delivered for the six months ended June 30, 2024 compared to 357 million gallons delivered for the six months ended June 30, 2023.

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


	For the Six Months Ended June 30,
	2024		2023
Operations and maintenance	$	6,769	$	5,970
General and administrative	8,357		8,011
Depreciation and amortization	5,930		5,360
Total operating expenses	$	21,056	$	19,341

Operations and Maintenance – Operations and maintenance costs, consisting of personnel costs, production costs (primarily chemicals and purchased electrical power), maintenance costs, and property tax, increased approximately $0.8 million, or 13.4%, to $6.8 million for the six months ended June 30, 2024 compared to $6.0 million for the six months ended June 30, 2023.

Total personnel expenses increased approximately $0.4 million, or 21.2%, to $2.4 million for the six months ended June 30, 2024 compared to $2.0 million for the six months ended June 30, 2023. The increase was primarily attributable to the increased medical costs of $0.2 million, an increase in headcount, and an increase in hiring and moving costs.

Office expenses related to information technology services increased $0.1 million for the six months ended June 30, 2024 compared to the same period in 2023.

Utility power and related expenses increased $0.1 million to $1.3 million for the six months ended June 30, 2024 compared to $1.2 million for the same period in 2023. The additional power costs were attributable to pump usage for the increase in connections from organic growth.

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

General and Administrative – General and administrative costs include the day-to-day expenses of office operations, personnel costs, legal and other professional fees, insurance, rent, and regulatory fees. These costs increased $0.4 million, or 4.3%, to $8.4 million for the six months ended June 30, 2024 compared to $8.0 million for the six months ended June 30, 2023.

Personnel related costs increased $0.4 million, or 11.2%, to $3.8 million for the six months ended June 30, 2024 compared to $3.4 million for the six months ended June 30, 2023. The increase was primarily related to higher salary and wages as a result of increased personnel, increased hiring and moving costs, and higher medical expenses.

Deferred compensation expense decreased $0.2 million, or 22.8%, to $0.5 million for the six months ended June 30, 2024 compared to $0.7 million for the six months ended June 30, 2023. The decrease was a direct result of the change in the stock price impacting certain equity-like awards (i.e., the stock price decreased $0.98 during the six months ended June 30, 2024 as compared to a decrease of $0.21 during the six months ended June 30, 2023). Refer to Note 11 — “Deferred Compensation Awards” of the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report for additional information.

Depreciation and amortization - Depreciation and amortization expense increased $0.6 million, or 10.6%, to $5.9 million for the six months ended June 30, 2024 compared to $5.4 million for the six months ended June 30, 2023. The increase was primarily driven by additional depreciation expense recorded as a direct result of the increase in fixed assets, which includes certain assets related to the Southwest Plant put into service July 2023, and $80,000 of amortization of an intangible asset related to acquired ICFAs that did not occur in the same period in 2023.

Other Expense – Other expense totaled $0.8 million for the six months ended June 30, 2024 compared to $1.0 million for the six months ended June 30, 2023. The decrease of $0.2 million in other expense was related to a $0.4 million increase in income associated with Buckeye growth premiums as a result of additional new meter connections in the area and a $0.5 million increase in interest income, partially offset by an increase in interest expense of $0.6 million primarily related to the senior

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secured notes issued in January 2024 (refer to “—Corporation Transactions” above for additional information) and a decrease in the equity portion of allowance for funds used during construction of $0.1 million for the six months ended June 30, 2024.

Income Tax Expense – Income tax expense of $0.8 million was recorded for the six months ended June 30, 2024 compared to $1.6 million for the six months ended June 30, 2023. The primary driver for the change was the higher pre-tax income for the six months ended June 30, 2023 related to the ICFA revenue recognized during that period that did not recur in 2024.

Net Income – Net income totaled $2.4 million for the six months ended June 30, 2024 compared to net income of $4.2 million for the six months ended June 30, 2023. The $1.8 million decrease was primarily attributable to the recognition of $2.3 million of ICFA related revenue and an increase in operating expenses of approximately $1.7 million, partially offset by a $1.3 million increase in regulated revenue and lower tax expense of $0.7 million.

Outstanding Share Data

As of August 7, 2024, there were 24,217,410 shares of the Company’s common stock outstanding and stock-based awards outstanding to acquire an additional 399,811 shares of the Company’s common stock.

Liquidity and Capital Resources

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

•fund operating costs;

•fund capital requirements, including construction expenditures;

•make debt and interest payments;

•fund acquisitions; and

•pay dividends.

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

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

In March 2014, the Company initiated a dividend program to declare and pay a monthly dividend. On November 30, 2023, the Company announced a monthly dividend increase to 0.02508 per share (0.30096 per share annually) from 0.02483 per share (0.29796 per share annually). Although the Company expects that monthly dividends will be declared and paid for the foreseeable future, the declaration of any dividends is at the discretion of the Company’s board of directors and is subject to legal requirements and debt service ratio covenant requirements (refer to “—Senior Secured Notes” and “—Revolving Credit Line”).

Cash from Operating Activities

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

For the six months ended June 30, 2024, net cash provided by operating activities totaled approximately $13.6 million compared to $12.7 million for the six months ended June 30, 2023. The $0.9 million increase in cash from operating activities was primarily driven by an increase in noncurrent liabilities for the six months ended June 30, 2024 as a result of funds received related to ICFA payments and other developer contributions during the first six months in 2024 compared to the six months ended June 30, 2023. In addition, there were other notable fluctuations in working capital accounts.

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Cash from Investing Activities

The net cash used in investing activities totaled approximately $12.2 million for the six months ended June 30, 2024 compared to $19.9 million for the six months ended June 30, 2023. The $7.7 million decrease in cash used in investing activities was primarily driven by the $6.2 million cash paid for the acquisition of GW-Farmers (net of cash acquired) in February 2023 and a decrease in capital expenditures of $1.5 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

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

Cash from Financing Activities

The net cash provided by financing activities totaled $13.6 million for the six months ended June 30, 2024, a $9.5 million increase, as compared to the $4.1 million in cash provided by financing activities for the six months ended June 30, 2023. This increase was primarily driven by the $20 million received from the senior secured notes issuance in January 2024, partially offset by $2.3 million of repayments on the Company’s revolving line of credit in the six months ended June 30, 2024 as compared to $9.1 million of net borrowings against the line of credit in the six months ended June 30, 2023.

Debt

Senior Secured Notes

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

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

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

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

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

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

Revolving Credit Line

Similar to the Senior Secured Notes, the Northern Trust Loan Agreement requires the Company to maintain a debt service coverage ratio of consolidated EBITDA to consolidated debt service of at least 1.10 to 1.00. The Northern Trust Loan Agreement also contains a provision limiting the payment of dividends if the Company falls below a debt service ratio of 1.25. Additionally, the Northern Trust Loan Agreement contains certain restrictive covenants that limit, among other things, the Company’s ability to: create liens and other encumbrances; incur additional indebtedness; merge, liquidate or consolidate with another entity; dispose of or transfer assets; make distributions or other restricted payments (including dividends); engage in certain affiliate transactions; and change the nature of the business. The foregoing covenants are subject to various qualifications and limitations as set forth in the Northern Trust Loan Agreement. Pursuant to the Northern Trust Loan Agreement, the revolving credit facility is subject to certain customary events of default after which the revolving credit facility could be declared due and payable if not cured within the grace period or, in certain circumstances, could be declared due and payable immediately. As of June 30, 2024, the Company was in compliance with its financial debt covenants under the Northern Trust Loan Agreement.

As of June 30, 2024, the Company had no outstanding borrowings under the revolving line of credit with Northern Trust. There were approximately $12,000 and $25,000 unamortized debt issuance costs as of June 30, 2024 and December 31, 2023, respectively.

Other Recent Financing Activity

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

Insurance Coverage

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

Contractual Obligations

Except as described below, there have been no additional material changes in our reported contractual obligations from those disclosed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Contractual Obligations” in the 2023 10-K.

On January 3, 2024, the Company issued $20.0 million aggregate principal amount of 6.91% Senior Secured Notes due on January 3, 2034. Refer to additional details under “– Liquidity and Capital Resources – Debt ” above.

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Critical Accounting Estimates

The application of critical accounting policies is particularly important to the Company’s financial condition and results of operations and provides a framework for management to make significant estimates, assumptions, and other judgments. Additionally, the Company’s financial condition, results of operations, and cash flow are impacted by the methods, assumptions, and estimates used in the application of critical accounting policies. Although management believes that these estimates, assumptions, and other judgments are appropriate, they relate to matters that are inherently uncertain and that may change in subsequent periods. Accordingly, changes in the estimates, assumptions, and other judgments applied to these accounting policies could have a significant impact on the Company’s financial condition and results of operations as reflected in its financial statements.

There have been no significant changes to our critical accounting estimates from those disclosed under “Managements’ Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates” in the 2023 10-K.

Off Balance Sheet Arrangements

As of June 30, 2024 and 2023, the Company did not have any off-balance sheet arrangements.

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

Changes in Internal Control over Financial Reporting

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

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

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

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

a) Sales of Unregistered Securities

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

b) Use of Proceeds

None.

c) Issuer Purchases of Equity Securities

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


Period	Total Number of Shares Purchased(1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
April 1 to April 30, 2024	—	$	—	—	$	—
May 1 to May 31, 2024	21,543	12.82		—	—
June 1 to June 30, 2024	—	—		—	—
Total	21,543			—	$	—

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

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Plans

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

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ITEM 6. EXHIBITS


Exhibit Number	Description of Exhibit	Method of Filing





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

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






























































10.1	First Amendment to the Global Water Resources, Inc. 2020 Omnibus Incentive Plan	Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on May 15, 2024.



10.2	Fifth Modification Agreement, dated July 1, 2024, by and between Global Water Resources, Inc. and The Northern Trust Company	Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the SEC on July 3, 2024.

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

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

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

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

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

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

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

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

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

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

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SIGNATURES

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


		Global Water Resources, Inc.

Date:	August 7, 2024	By:	/s/ Michael J. Liebman
			Michael J. Liebman
			Chief Financial Officer and Corporate Secretary
			(Duly Authorized Officer and Principal Financial and Accounting Officer)

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EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Ron L. Fleming, certify that:


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


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


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


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


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


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


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


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


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


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


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

Date: August 7, 2024



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

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Michael J. Liebman, certify that:


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


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


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


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


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


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


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


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


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


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


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

Date: August 7, 2024



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

EXHIBIT 32.1

Certification of Chief Executive Officer and Chief Financial Officer

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

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

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


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


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



By:			/s/ Ron L. Fleming
			Ron L. Fleming
			President, Chief Executive Officer and Chairman of the Board
			Date: August 7, 2024

By:			/s/ Michael J. Liebman
			Michael J. Liebman
			Chief Financial Officer and Corporate Secretary
			Date: August 7, 2024

COVER PAGE - shares	6 Months Ended
COVER PAGE - shares	Jun. 30, 2024	Aug. 07, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	001-37756
Entity Registrant Name	Global Water Resources, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	90-0632193
Entity Address, Address Line One	21410 N. 19th Avenue #220
Entity Address, City or Town	Phoenix,
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85027
City Area Code	480
Local Phone Number	360-7775
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	GWRS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		24,217,410
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001434728
Current Fiscal Year End Date	--12-31

CONDENSED CONSOLIDATED BALANCE SHEET - USD ($)	Jun. 30, 2024	Dec. 31, 2023
PROPERTY, PLANT AND EQUIPMENT:
Land	$ 2,674,000	$ 2,674,000
Depreciable property, plant and equipment	417,463,000	414,170,000
Construction work-in-progress	59,095,000	48,147,000
Other	697,000	697,000
Less accumulated depreciation	(147,984,000)	(142,367,000)
Net property, plant and equipment	331,945,000	323,321,000
CURRENT ASSETS:
Cash and cash equivalents	18,148,000	3,087,000
Accounts receivable, net	2,848,000	2,845,000
Customer payments in-transit	604,000	543,000
Unbilled revenue	3,406,000	2,755,000
Taxes, prepaid expenses and other current assets	1,874,000	2,494,000
Total current assets	26,880,000	11,724,000
OTHER ASSETS:
Goodwill	9,486,000	10,820,000
Intangible assets, net	8,573,000	8,841,000
Regulatory assets	4,197,000	2,898,000
Restricted cash	1,548,000	1,676,000
Right-of-use assets	1,753,000	1,741,000
Other noncurrent assets	78,000	74,000
Total other assets	25,635,000	26,050,000
TOTAL ASSETS	384,460,000	361,095,000
CURRENT LIABILITIES:
Accounts payable	1,133,000	1,027,000
Accrued expenses	7,168,000	7,129,000
Customer and meter deposits	1,596,000	1,628,000
Long-term debt, current portion	3,882,000	3,880,000
Leases, current portion	655,000	553,000
Total current liabilities	14,434,000	14,217,000
NONCURRENT LIABILITIES:
Line of credit	0	2,315,000
Long-term debt	119,070,000	101,341,000
Long-term lease liabilities	1,292,000	1,370,000
Deferred revenue - ICFA	19,974,000	19,656,000
Regulatory liabilities	5,875,000	6,076,000
Advances in aid of construction	116,389,000	111,529,000
Contributions in aid of construction, net	39,062,000	36,409,000
Deferred income tax liabilities, net	9,083,000	8,284,000
Acquisition liabilities	3,013,000	3,048,000
Other noncurrent liabilities	8,653,000	8,230,000
Total noncurrent liabilities	322,411,000	298,258,000
Total liabilities	336,845,000	312,475,000
Commitments and contingencies (Refer to Note 13)
SHAREHOLDERS’ EQUITY:
Common stock, $0.01 par value, $60,000,000 shares authorized; 24,561,035 and 24,492,918 shares issued as of June 30, 2024 and December 31, 2023, respectively.	240,000	240,000
Treasury stock, 343,625 and 317,677 shares at June 30, 2024 and December 31, 2023, respectively.	(2,000)	(2,000)
Paid in capital	46,671,000	47,585,000
Retained earnings	706,000	797,000
Total shareholders’ equity	47,615,000	48,620,000
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 384,460,000	$ 361,095,000

CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	60,000,000	60,000,000
Common stock, issued (in shares)	24,561,035	24,492,918
Treasury stock (in shares)	343,625	317,677

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
REVENUES:
Total revenues	$ 13,510	$ 13,000	$ 25,120	$ 26,128
OPERATING EXPENSES:
Operations and maintenance	3,485	3,181	6,769	5,970
General and administrative	4,232	4,104	8,357	8,011
Depreciation and amortization	2,996	2,705	5,930	5,360
Total operating expenses	10,713	9,990	21,056	19,341
OPERATING INCOME	2,797	3,010	4,064	6,787
OTHER INCOME (EXPENSE):
Interest income	266	2	504	7
Interest expense	(1,507)	(1,281)	(3,073)	(2,449)
Allowance for equity funds used during construction	237	216	444	515
Other, net	535	523	1,330	941
Total other expense	(469)	(540)	(795)	(986)
INCOME BEFORE INCOME TAXES	2,328	2,470	3,269	5,801
INCOME TAX EXPENSE	(598)	(731)	(848)	(1,596)
NET INCOME	$ 1,730	$ 1,739	$ 2,421	$ 4,205
Basic earnings per common share (in dollars per share)	$ 0.07	$ 0.07	$ 0.10	$ 0.18
Diluted earnings per common share (in dollars per share)	0.07	0.07	0.10	0.17
Dividends declared per common share (in dollars per share)	$ 0.075	$ 0.07	$ 0.15	$ 0.15
Weighted average number of common shares used in the determination of:
Basic (in shares)	24,199,472	23,958,205	24,187,586	23,914,866
Diluted (in shares)	24,308,524	24,038,902	24,306,316	24,033,994
Water services
REVENUES:
Total revenues	$ 6,668	$ 6,557	$ 11,894	$ 11,396
Wastewater and recycled water services
REVENUES:
Total revenues	6,842	6,443	13,226	12,464
Unregulated revenues
REVENUES:
Total revenues	$ 0	$ 0	$ 0	$ 2,268

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Paid-in Capital	Retained Earnings
Balance at the beginning (in shares) at Dec. 31, 2022		24,095,139
Balance, at the beginning at Dec. 31, 2022	$ 44,394	$ 239	$ (2)	$ 44,157	$ 0
Balance at the beginning (in shares) at Dec. 31, 2022			(224,093)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared	(1,778)				(1,778)
Stock compensation	299			299
Net income	2,466				2,466
Balance at the ending (in shares) at Mar. 31, 2023		24,095,139
Balance, at the ending at Mar. 31, 2023	45,381	$ 239	$ (2)	44,456	688
Balance at the ending (in shares) at Mar. 31, 2023			(224,093)
Balance at the beginning (in shares) at Dec. 31, 2022		24,095,139
Balance, at the beginning at Dec. 31, 2022	44,394	$ 239	$ (2)	44,157	0
Balance at the beginning (in shares) at Dec. 31, 2022			(224,093)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	4,205
Balance at the ending (in shares) at Jun. 30, 2023		24,477,252
Balance, at the ending at Jun. 30, 2023	48,027	$ 240	$ (2)	47,101	688
Balance at the ending (in shares) at Jun. 30, 2023			(306,735)
Balance at the beginning (in shares) at Mar. 31, 2023		24,095,139
Balance, at the beginning at Mar. 31, 2023	45,381	$ 239	$ (2)	44,456	688
Balance at the beginning (in shares) at Mar. 31, 2023			(224,093)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared	(1,794)			(55)	(1,739)
Issuance of Common Stock (in shares)		230,000
Issuance of Common Stock	2,748	$ 1		2,747
Stock option exercise (in shares)		152,113	82,642
Stock option exercise	0		$ 0
Stock compensation	(47)			(47)
Net income	1,739				1,739
Balance at the ending (in shares) at Jun. 30, 2023		24,477,252
Balance, at the ending at Jun. 30, 2023	$ 48,027	$ 240	$ (2)	47,101	688
Balance at the ending (in shares) at Jun. 30, 2023			(306,735)
Balance at the beginning (in shares) at Dec. 31, 2023	24,492,918	24,492,918
Balance, at the beginning at Dec. 31, 2023	$ 48,620	$ 240	$ (2)	47,585	797
Balance at the beginning (in shares) at Dec. 31, 2023	(317,677)		(317,677)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared	$ (1,819)			(1,128)	(691)
Stock option exercise (in shares)		5,277	4,405
Stock option exercise	198			198
Net income	691				691
Balance at the ending (in shares) at Mar. 31, 2024		24,498,195
Balance, at the ending at Mar. 31, 2024	$ 47,690	$ 240	$ (2)	46,655	797
Balance at the ending (in shares) at Mar. 31, 2024			(322,082)
Balance at the beginning (in shares) at Dec. 31, 2023	24,492,918	24,492,918
Balance, at the beginning at Dec. 31, 2023	$ 48,620	$ 240	$ (2)	47,585	797
Balance at the beginning (in shares) at Dec. 31, 2023	(317,677)		(317,677)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 2,421
Balance at the ending (in shares) at Jun. 30, 2024	24,561,035	24,561,035
Balance, at the ending at Jun. 30, 2024	$ 47,615	$ 240	$ (2)	46,671	706
Balance at the ending (in shares) at Jun. 30, 2024	(343,625)		(343,625)
Balance at the beginning (in shares) at Mar. 31, 2024		24,498,195
Balance, at the beginning at Mar. 31, 2024	$ 47,690	$ 240	$ (2)	46,655	797
Balance at the beginning (in shares) at Mar. 31, 2024			(322,082)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared	(1,821)			0	(1,821)
Stock compensation (in shares)		62,840	21,543
Stock compensation	16			16
Net income	$ 1,730				1,730
Balance at the ending (in shares) at Jun. 30, 2024	24,561,035	24,561,035
Balance, at the ending at Jun. 30, 2024	$ 47,615	$ 240	$ (2)	$ 46,671	$ 706
Balance at the ending (in shares) at Jun. 30, 2024	(343,625)		(343,625)

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Parenthetical) - $ / shares	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Stockholders' Equity [Abstract]
Dividends declared (in dollars per share)	$ 0.075	$ 0.08	$ 0.07	$ 0.07	$ 0.15	$ 0.15

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended				6 Months Ended		12 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 1,730	$ 691	$ 1,739	$ 2,466	$ 2,421	$ 4,205
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization					5,930	5,360
Deferred compensation					595	734
Deferred income tax expense					838	1,090
Allowance for equity funds used during construction	(237)		(216)		(444)	(515)
Provision for credit losses					35	35	$ 76
Amortization of deferred debt issuance costs and discounts					41	22
Gain on disposal of fixed assets					(17)	(66)
Right of use amortization					214	192
Changes in assets and liabilities
Accounts receivable					(38)	(885)
Other current assets					(91)	694
Accounts payable and other current liabilities					101	392
Other noncurrent assets					(21)	160
Other noncurrent liabilities					4,007	1,237
Net cash provided by operating activities					13,571	12,655
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures					(12,207)	(13,693)
Cash paid for acquisitions, net of cash acquired					0	(6,246)
Other					(4)	0
Net cash used in investing activities					(12,211)	(19,939)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid					(3,640)	(3,572)
Advances in aid of construction					2,215	420
Payments for taxes related to net shares settlement of equity awards					(268)	(357)
Principal payments under finance leases					(110)	(258)
Repayments of notes payable					(1,917)	(1,917)
Line of credit borrowings					0	18,200
Line of credit repayments					(2,315)	(11,435)
Loan borrowings					20,000	253
Loan repayments					(23)	0
Debt issuance costs paid					(369)	0
Proceeds from sale of stock					0	2,748
Refunds of developer taxes					0	(5)
Net cash provided by financing activities					13,573	4,077
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH					14,933	(3,207)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period		$ 4,763		$ 7,562	4,763	7,562	7,562
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period	19,696		4,355		19,696	4,355	4,763
Supplemental disclosure of cash flow information:
Cash and cash equivalents	18,148		2,007		18,148	2,007
Restricted cash	1,548		2,348		1,548	2,348
Total cash, cash equivalents, and restricted cash	$ 19,696		$ 4,355		$ 19,696	$ 4,355	$ 4,763

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

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

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

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

Basis of Presentation and Principles of Consolidation

Corporate Transactions

Asset Purchase Agreement with City of Tucson

Other Deferred Liability

Private Placement Offering of 6.91% Senior Secured Notes

Private Placement Offering of Common Stock

Farmers Water Co. Acquisition

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

Significant Accounting Policies

Basic and Diluted Earnings per Common Share


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
(In thousands)
Basic weighted average common shares outstanding	24,199	23,958	24,188	23,915
Effect of dilutive securities:
2017 Option grant	66	64	65	81
2019 Option grant	13	6	13	18
2020 Restricted stock awards	—	9	—	10
2021 Restricted stock awards	31	2	40	10
Total dilutive securities	110	81	118	119
Diluted weighted average common shares outstanding	24,309	24,039	24,306	24,034
Anti-dilutive shares excluded from earnings per diluted shares(1)	—	98	—	98

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

Segments

Recent Accounting Pronouncements

Future Adoption of Accounting Standards

REGULATORY DECISION AND RELATED ACCOUNTING AND POLICY CHANGES

6 Months Ended

Jun. 30, 2024

Regulated Operations [Abstract]

REGULATORY DECISION AND RELATED ACCOUNTING AND POLICY CHANGES

2024 Farmers Rate Case

Acquisition of Seven Systems from City of Tucson

2025 Santa Cruz and Palo Verde Rate Case

Southwest Plant Accounting Order and Bill Credit

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

The ACC also approved:

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

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

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

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

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

Decision No. 78644 - Issued July 27, 2022

Regulatory Assets and Liabilities

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

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


	Recovery Period	June 30, 2024		December 31, 2023
Regulatory Assets
Income taxes recoverable through future rates (1)	Various	$	1,365	$	1,404
Rate case expense surcharge(2)	2 years	175		221
Acquisition premiums(3)	25 or 50 years	2,624		1,269
Other regulatory assets		33		4
Total regulatory assets		$	4,197	$	2,898

Regulatory Liabilities
Income taxes payable through future rates(1)		$	478	$	488
Acquired ICFAs(4)		4,708		4,896
Depreciation adjustment(5)		689		692
Total regulatory liabilities		$	5,875	$	6,076

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

Decision No. 79383, issued on June 20, 2024, approved approximately $0.1 million in rate case expenses to be recovered through a rate case expense surcharge over a period of up to a two-years.

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

REVENUE RECOGNITION

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

Regulated Revenue

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

Unregulated Revenue


	December 31, 2023 Balance		Payments Allocated to Deferred Revenue		Revenue Recognized		June 30, 2024 Balance
Deferred Revenue - ICFA	$	19,656	$	318	$	—	$	19,974

Disaggregated Revenues

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
REGULATED REVENUE
Water Services
Residential	$	4,807	$	4,470	$	8,969	$	8,361
Irrigation	887		983		1,254		1,347
Commercial	463		434		848		726
Construction	240		373		393		500
Other water revenues	271		297		430		462
Total water revenues	6,668		6,557		11,894		11,396
Wastewater and recycled water services
Residential	5,977		5,562		11,811		11,094
Commercial	354		301		698		589
Recycled water revenues	406		473		527		593
Other wastewater revenues	105		107		190		188
Total wastewater and recycled water revenues	6,842		6,443		13,226		12,464
TOTAL REGULATED REVENUE	13,510		13,000		25,120		23,860
UNREGULATED REVENUE
ICFA revenues	—		—		—		2,268


TOTAL UNREGULATED REVENUE	—		—		—		2,268
TOTAL REVENUE	$	13,510	$	13,000	$	25,120	$	26,128

Contract Balances

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


	June 30, 2024		December 31, 2023
CONTRACT ASSETS
Accounts receivable
Water services	$	1,689	$	1,588
Wastewater and recycled water services	1,292		1,379
Total contract assets	$	2,981	$	2,967
CONTRACT LIABILITIES
Deferred revenue - ICFA	$	19,974	$	19,656


Total contract liabilities	$	19,974	$	19,656

Remaining Performance Obligations

Accounts Receivable and Allowance for Credit Losses

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


	June 30, 2024		December 31, 2023
Billed receivables	$	2,981	$	2,967
Less provision for credit losses	(133)		(122)
Accounts receivable, net	$	2,848	$	2,845

The following table summarizes the allowance for credit loss activity for the six months ended June 30, 2024 and the twelve months ended December 31, 2023 (in thousands).


	June 30, 2024		December 31, 2023
Beginning of Period	$	(122)	$	(164)
Credit Loss Expense	(35)		(76)
Write Offs	48		124
Recoveries	(24)		(6)
End of Period	$	(133)	$	(122)

PROPERTY, PLANT AND EQUIPMENT

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

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


	June 30, 2024		December 31, 2023
Equipment	$	61,294	$	60,536
Office buildings and other structures	64,603		64,084
Transmission and distribution plant	291,566		289,550
Total property, plant and equipment	$	417,463	$	414,170

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


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

GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

Goodwill

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


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

Intangible Assets

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


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

TRANSACTIONS WITH RELATED PARTIES	6 Months Ended
TRANSACTIONS WITH RELATED PARTIES	Jun. 30, 2024
Related Party Transactions [Abstract]
TRANSACTIONS WITH RELATED PARTIES	TRANSACTIONS WITH RELATED PARTIES The Company provides medical benefits to employees through its participation in a pooled plan sponsored by an affiliate of a significant shareholder and director of the Company. Medical claims paid to the plan were approximately $0.3 million for the three months ended June 30, 2024 and $0.2 million for the three months ended June 30, 2023. Medical claims paid to the plan were approximately $0.5 million for the six months ended June 30, 2024 and $0.3 million for the six months ended June 30, 2023. Refer to Note 1 — “Basis of Presentation, Corporate Transactions, Significant Accounting Policies, and Recent Accounting Pronouncements — Corporate Transactions” (specifically the “Private Placement Offering of Common Stock” section) for additional information regarding other related party disclosures.

ACCRUED EXPENSES

6 Months Ended

Jun. 30, 2024

Payables and Accruals [Abstract]

ACCRUED EXPENSES

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


	June 30, 2024		December 31, 2023
Property taxes	$	1,292	$	1,242
Interest	1,168		480
Accrued bonus	706		602
Customer prepayments	693		883
Dividend payable	606		606
Accrued project liabilities	565		1,001






Other accrued liabilities	2,138		2,315
Total accrued expenses	$	7,168	$	7,129

FAIR VALUE

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

FAIR VALUE

Fair Value of Financial Instruments

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

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

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

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


	June 30, 2024								December 31, 2023
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Asset/Liability Type:
HUF Funds - restricted cash(1)	$	603	$	—	$	—	$	603	$	822	$	—	$	—	$	822
Demand Deposit(2)	1		—		—		1		1		—		—		1
Certificate of Deposit - Restricted(1)	944		—		—		944		—		854		—		854
Contingent Consideration(3)	—		—		2,078		2,078		—		—		2,113		2,113
Total	$	1,548	$	—	$	2,078	$	3,626	$	823	$	854	$	2,113	$	3,790

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

DEBT

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

DEBT


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

	3,833		119,667		3,833		101,583
OTHER
Debt issuance costs	—		(756)		—		(426)
Loan Payable	49		159		47		184
Total debt	$	3,882	$	119,070	$	3,880	$	101,341

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


	June 30, 2024				December 31, 2023
	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Long-term debt(1)	—	118,543	—	118,543	—	100,746	—	100,746

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

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

Revolving Credit Line

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

INCOME TAXES	6 Months Ended
INCOME TAXES	Jun. 30, 2024
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES For the three months ended June 30, 2024, tax expense of $0.6 million was recorded on pre-tax income of $2.3 million, compared to tax expense of $0.7 million recorded on pre-tax income of $2.5 million for the three months ended June 30, 2023. For the six months ended June 30, 2024, tax expense of $0.8 million was recorded on pre-tax income of $3.3 million, compared to tax expense of $1.6 million recorded on pre-tax income of $5.8 million for the six months ended June 30, 2023. The income tax provision was computed on the Company’s estimated effective tax rate and forecasted income expected for the full year, including the impact of any unusual, infrequent, or non-recurring items. The Company’s effective tax rate was 24.93% and 25.25% as of June 30, 2024 and 2023, respectively.

DEFERRED COMPENSATION AWARDS

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

DEFERRED COMPENSATION AWARDS

Stock-based compensation

2017 stock option grant

2019 stock option grant

Restricted stock units


			Amounts Paid For the Three Months Ended June 30,				Amounts Paid For the Six Months Ended June 30,
Grant Date	Units Granted	Units Outstanding	2024		2023		2024		2023
Q1 2021	27,403	—	—		28		28		57
Q1 2022	22,262	5,334	23		23		46		48
Q1 2023	30,366	16,974	31		32		63		32
Q1 2024	30,962	28,382	33		—		33		—
Total	110,993	50,690	$	87	$	83	$	170	$	137

Stock appreciation rights


						Amounts Paid For the Three Months Ended June 30,				Amounts Paid For the Six Months Ended June 30,
Recipients	Grant Date	Units Granted	Exercise Price		Units Outstanding	2024		2023		2024		2023
Members of Management (1)(2)	Q1 2015	299,000	$	4.26	12,500	—		—		$	—	$	165
Members of Management (1)(3)	Q1 2018	33,000	$	8.99	8,250	—		—		—		—
Total		332,000			20,750	$	—	$	—	$	—	$	165

(1)The SARs vested ratably over 16 quarters from the grant date.

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

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


	RSUs
2024 (remaining period)	$	164
2025	263
2026	125

Total	$	552

Restricted stock awards


	Three Months Ended June 30,				For The Six Months Ended June 30,
	2024		2023		2024		2023
Compensation expense	$	197	$	255	$	395	$	537

SUPPLEMENTAL CASH FLOW INFORMATION

6 Months Ended

Jun. 30, 2024

Supplemental Cash Flow Elements [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION

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


	For the Six Months Ended June 30,
	2024		2023
Supplemental cash flow information:
Cash paid for interest - net of amounts capitalized	$	2,290	$	2,397



Non-cash financing and investing activities:
Capital expenditures included in accounts payable and accrued liabilities	$	710	$	2,045
Business acquisition through issuance of contingent consideration payable	$	—	1,330
Finance lease additions	$	290	$	—

COMMITMENTS AND CONTINGENCIES	6 Months Ended
COMMITMENTS AND CONTINGENCIES	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Commitments The Company has operating and finance leases for vehicles, office equipment, and office space. Refer to Note 4 – “Leases” in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information. On February 1, 2023, the Company acquired all of the equity of Farmers Water Co., an operator of a water utility with service area in Pima County, Arizona. Under the terms of the purchase agreement, the Company is obligated to pay the seller a growth premium equal to $1,000 for each new account established in the service area, up to a total aggregate growth premium of $3.5 million. The obligation period of the growth premium commences on the closing date of the acquisition and ends (i) ten years after the first new account for residential purposes is established on land that is, at the time of the closing date of the acquisition, undeveloped or unplatted and owned by the seller within the service area or (ii) ten years after the date of closing if a new account (as described above) has not been established. The assumptions and estimates used in determining the acquisition liability related to the growth premium are consistent with previous acquisitions. As of June 30, 2024, the remaining liability was $1.2 million. On October 16, 2018, the Company completed the acquisition of GW-Red Rock, an operator of a water and a wastewater utility with service areas in the Pima and Pinal counties of Arizona. Under the terms of the purchase agreement, the Company is obligated to pay to the seller a growth premium equal to $750 for each new account established within three specified growth premium areas, commencing in each area on the date of the first meter installation and ending on the earlier of ten years after such first installation date or twenty years from the acquisition date. As of June 30, 2024, no meters have been installed and no accounts have been established in any of the three growth premium areas. As of June 30, 2024, the remaining liability was $0.8 million. Contingencies From time to time, in the ordinary course of business, the Company may be subject to pending or threatened lawsuits in which claims for monetary damages are asserted. Management is not aware of any legal proceeding of which the ultimate resolution could materially affect the Company’s financial position, results of operations, or cash flows.

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 1,730	$ 691	$ 1,739	$ 2,466	$ 2,421	$ 4,205

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

BASIS OF PRESENTATION, CORPORATE TRANSACTIONS, SIGNIFICANT ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies)	6 Months Ended
	Jun. 30, 2024
Accounting Policies [Abstract]
Principles of Consolidation	The condensed consolidated financial statements of Global Water Resources, Inc. (the “Company”, “GWRI”, “we”, “us”, or “our”) and related disclosures as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 are unaudited. The December 31, 2023 condensed consolidated balance sheet data was derived from the Company’s audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These financial statements follow the same accounting policies and methods of their application as the Company’s most recent annual consolidated financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023. In the Company’s opinion, these financial statements include all normal and recurring adjustments necessary for the fair statement of the results for the interim period. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full year, due to the seasonality of our business.
Basis of Presentation	The Company prepares its financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Basic and Diluted Earnings per Common Share	Basic and Diluted Earnings per Common Share Basic earnings per share (“EPS”) in each period of this report were calculated by dividing net income by the weighted-average number of shares during those periods. Diluted EPS includes additional weighted-average common stock equivalents (options and restricted stock awards), if dilutive. Unless otherwise noted, the term “earnings per share” refers to basic EPS.
Segments	Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing operating performance. In consideration of ASC 280—Segment Reporting the Company notes it is not organized around specific products and services, geographic regions, or regulatory environments. The Company currently operates in one geographic region within the State of Arizona, wherein each operating utility operates within the same regulatory environment. While the Company reports its revenue, disaggregated by service type, on the face of its condensed consolidated financial statements of operations, the Company does not manage the business based on any performance measure at the individual revenue stream level. The Company does not have any customers that contribute more than 10% to the Company’s revenues or revenue streams. Additionally, the Company notes that the CODM uses consolidated financial information to evaluate the Company’s performance, which is the same basis on which he communicates the Company’s results and performance to the Board of Directors. It is upon this consolidated basis from which he bases all significant decisions regarding the allocation of the Company’s resources on a consolidated level. Based on the information described above and in accordance with the applicable literature, management has concluded that the Company is currently organized and operated as one operating and reportable segment.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Future Adoption of Accounting Standards In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is assessing the timing and impact that adopting this new standard will have on its consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures that expands disclosures of significant segment expenses and includes new disclosures for entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is assessing the timing and impact that adopting this new standard will have on its consolidated financial statements.

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

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

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


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
(In thousands)
Basic weighted average common shares outstanding	24,199	23,958	24,188	23,915
Effect of dilutive securities:
2017 Option grant	66	64	65	81
2019 Option grant	13	6	13	18
2020 Restricted stock awards	—	9	—	10
2021 Restricted stock awards	31	2	40	10
Total dilutive securities	110	81	118	119
Diluted weighted average common shares outstanding	24,309	24,039	24,306	24,034
Anti-dilutive shares excluded from earnings per diluted shares(1)	—	98	—	98

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

REGULATORY DECISION AND RELATED ACCOUNTING AND POLICY CHANGES (Tables)

6 Months Ended

Jun. 30, 2024

Regulated Operations [Abstract]

Schedule of Regulatory Assets

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


	Recovery Period	June 30, 2024		December 31, 2023
Regulatory Assets
Income taxes recoverable through future rates (1)	Various	$	1,365	$	1,404
Rate case expense surcharge(2)	2 years	175		221
Acquisition premiums(3)	25 or 50 years	2,624		1,269
Other regulatory assets		33		4
Total regulatory assets		$	4,197	$	2,898

Regulatory Liabilities
Income taxes payable through future rates(1)		$	478	$	488
Acquired ICFAs(4)		4,708		4,896
Depreciation adjustment(5)		689		692
Total regulatory liabilities		$	5,875	$	6,076

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

Decision No. 79383, issued on June 20, 2024, approved approximately $0.1 million in rate case expenses to be recovered through a rate case expense surcharge over a period of up to a two-years.

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

Schedule of Regulatory Liabilities

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


	Recovery Period	June 30, 2024		December 31, 2023
Regulatory Assets
Income taxes recoverable through future rates (1)	Various	$	1,365	$	1,404
Rate case expense surcharge(2)	2 years	175		221
Acquisition premiums(3)	25 or 50 years	2,624		1,269
Other regulatory assets		33		4
Total regulatory assets		$	4,197	$	2,898

Regulatory Liabilities
Income taxes payable through future rates(1)		$	478	$	488
Acquired ICFAs(4)		4,708		4,896
Depreciation adjustment(5)		689		692
Total regulatory liabilities		$	5,875	$	6,076

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

Decision No. 79383, issued on June 20, 2024, approved approximately $0.1 million in rate case expenses to be recovered through a rate case expense surcharge over a period of up to a two-years.

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

REVENUE RECOGNITION (Tables)

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Roll forward of Deferred Revenue


	December 31, 2023 Balance		Payments Allocated to Deferred Revenue		Revenue Recognized		June 30, 2024 Balance
Deferred Revenue - ICFA	$	19,656	$	318	$	—	$	19,974

Schedule of Disaggregation of Revenue

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
REGULATED REVENUE
Water Services
Residential	$	4,807	$	4,470	$	8,969	$	8,361
Irrigation	887		983		1,254		1,347
Commercial	463		434		848		726
Construction	240		373		393		500
Other water revenues	271		297		430		462
Total water revenues	6,668		6,557		11,894		11,396
Wastewater and recycled water services
Residential	5,977		5,562		11,811		11,094
Commercial	354		301		698		589
Recycled water revenues	406		473		527		593
Other wastewater revenues	105		107		190		188
Total wastewater and recycled water revenues	6,842		6,443		13,226		12,464
TOTAL REGULATED REVENUE	13,510		13,000		25,120		23,860
UNREGULATED REVENUE
ICFA revenues	—		—		—		2,268


TOTAL UNREGULATED REVENUE	—		—		—		2,268
TOTAL REVENUE	$	13,510	$	13,000	$	25,120	$	26,128

Schedule of Contract Assets and Liabilities

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


	June 30, 2024		December 31, 2023
CONTRACT ASSETS
Accounts receivable
Water services	$	1,689	$	1,588
Wastewater and recycled water services	1,292		1,379
Total contract assets	$	2,981	$	2,967
CONTRACT LIABILITIES
Deferred revenue - ICFA	$	19,974	$	19,656


Total contract liabilities	$	19,974	$	19,656

Schedule of Accounts Receivable

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


	June 30, 2024		December 31, 2023
Billed receivables	$	2,981	$	2,967
Less provision for credit losses	(133)		(122)
Accounts receivable, net	$	2,848	$	2,845

Schedule of Allowance for Doubtful Accounts Activity

The following table summarizes the allowance for credit loss activity for the six months ended June 30, 2024 and the twelve months ended December 31, 2023 (in thousands).


	June 30, 2024		December 31, 2023
Beginning of Period	$	(122)	$	(164)
Credit Loss Expense	(35)		(76)
Write Offs	48		124
Recoveries	(24)		(6)
End of Period	$	(133)	$	(122)

PROPERTY, PLANT AND EQUIPMENT (Tables)

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

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


	June 30, 2024		December 31, 2023
Equipment	$	61,294	$	60,536
Office buildings and other structures	64,603		64,084
Transmission and distribution plant	291,566		289,550
Total property, plant and equipment	$	417,463	$	414,170

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


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

GOODWILL AND INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

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


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

Schedule of Finite-lived Intangible Assets

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


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

Schedule of Indefinite-lived Intangible Assets

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


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

ACCRUED EXPENSES (Tables)

6 Months Ended

Jun. 30, 2024

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

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


	June 30, 2024		December 31, 2023
Property taxes	$	1,292	$	1,242
Interest	1,168		480
Accrued bonus	706		602
Customer prepayments	693		883
Dividend payable	606		606
Accrued project liabilities	565		1,001






Other accrued liabilities	2,138		2,315
Total accrued expenses	$	7,168	$	7,129

FAIR VALUE (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities Measured on Recurring Basis

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


	June 30, 2024								December 31, 2023
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Asset/Liability Type:
HUF Funds - restricted cash(1)	$	603	$	—	$	—	$	603	$	822	$	—	$	—	$	822
Demand Deposit(2)	1		—		—		1		1		—		—		1
Certificate of Deposit - Restricted(1)	944		—		—		944		—		854		—		854
Contingent Consideration(3)	—		—		2,078		2,078		—		—		2,113		2,113
Total	$	1,548	$	—	$	2,078	$	3,626	$	823	$	854	$	2,113	$	3,790

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

DEBT (Tables)

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

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


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

	3,833		119,667		3,833		101,583
OTHER
Debt issuance costs	—		(756)		—		(426)
Loan Payable	49		159		47		184
Total debt	$	3,882	$	119,070	$	3,880	$	101,341

Schedule of Liabilities Measured on Recurring Basis

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


	June 30, 2024				December 31, 2023
	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Long-term debt(1)	—	118,543	—	118,543	—	100,746	—	100,746

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

DEFERRED COMPENSATION AWARDS (Tables)

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

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

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


			Amounts Paid For the Three Months Ended June 30,				Amounts Paid For the Six Months Ended June 30,
Grant Date	Units Granted	Units Outstanding	2024		2023		2024		2023
Q1 2021	27,403	—	—		28		28		57
Q1 2022	22,262	5,334	23		23		46		48
Q1 2023	30,366	16,974	31		32		63		32
Q1 2024	30,962	28,382	33		—		33		—
Total	110,993	50,690	$	87	$	83	$	170	$	137


	Three Months Ended June 30,				For The Six Months Ended June 30,
	2024		2023		2024		2023
Compensation expense	$	197	$	255	$	395	$	537

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


						Amounts Paid For the Three Months Ended June 30,				Amounts Paid For the Six Months Ended June 30,
Recipients	Grant Date	Units Granted	Exercise Price		Units Outstanding	2024		2023		2024		2023
Members of Management (1)(2)	Q1 2015	299,000	$	4.26	12,500	—		—		$	—	$	165
Members of Management (1)(3)	Q1 2018	33,000	$	8.99	8,250	—		—		—		—
Total		332,000			20,750	$	—	$	—	$	—	$	165

(1)The SARs vested ratably over 16 quarters from the grant date.

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

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

Schedule of Estimated Future Compensation Expense

Based on GWRI’s closing share price on June 28, 2024 (the last trading date of the quarter), deferred compensation expense to be recognized over future periods is estimated for the years ending December 31 as follows (in thousands):


	RSUs
2024 (remaining period)	$	164
2025	263
2026	125

Total	$	552

SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

6 Months Ended

Jun. 30, 2024

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplemental Cash Flow Information

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


	For the Six Months Ended June 30,
	2024		2023
Supplemental cash flow information:
Cash paid for interest - net of amounts capitalized	$	2,290	$	2,397



Non-cash financing and investing activities:
Capital expenditures included in accounts payable and accrued liabilities	$	710	$	2,045
Business acquisition through issuance of contingent consideration payable	$	—	1,330
Finance lease additions	$	290	$	—

BASIS OF PRESENTATION, CORPORATE TRANSACTIONS, SIGNIFICANT ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS - Corporate Transactions (Details)					3 Months Ended		6 Months Ended
	Apr. 25, 2024 USD ($) waterSystem service_connection	Jun. 08, 2023 USD ($) $ / shares shares	Feb. 01, 2023 USD ($) mi² service_connection	Jul. 14, 2015 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Oct. 26, 2023 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Advances in aid of construction							$ 6,700,000
Growth premiums received					$ 500,000	$ 500,000	1,300,000	$ 900,000
Accumulated growth premiums received					$ 12,000,000.0		$ 12,000,000.0
Farmers Water Company
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of active water connections \| service_connection			3,300
Square miles of approved service area \| mi²			21.5
Maximum payout of growth premium receivable			$ 3,500,000
Valencia Water Company
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Growth premium receivable for each new water meter installed				$ 3,000,000
Period for maximum payout of growth premium receivable				20 years
Maximum payout of growth premium receivable				$ 45,000,000
Private Placement Offering
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of common stock to be issued and sold (in shares) \| shares		230,000
Purchase price (in dollars per share) \| $ / shares		$ 12.07
Gross proceeds from sale of stock		$ 2,800,000
6.91% Senior Secured Notes, maturing January 2034 (“6.91% Notes”) \| Senior Notes
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Debt instrument, interest rate					6.91%		6.91%		6.91%
Aggregate amount									$ 20,000,000
Affiliates \| Private Placement Offering
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of common stock issued (in shares) \| shares		30,000
Affiliates \| GW-Acquisition \| Tucson City Council, Asset Acquisition
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of water systems acquired \| waterSystem	7
Cash transaction	$ 8,400,000
Estimated rate base	$ 7,800,000
Number of active water connections \| service_connection	2,200

BASIS OF PRESENTATION, CORPORATE TRANSACTIONS, SIGNIFICANT ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS - Reconciliation of the Denominator Used in Basic and Diluted EPS Calculations (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Basic weighted average common shares outstanding (in shares)	24,199,472	23,958,205	24,187,586	23,914,866
Effect of dilutive securities (in shares)	110,000	81,000	118,000	119,000
Diluted weighted average common shares outstanding (in shares)	24,308,524	24,038,902	24,306,316	24,033,994
Antidilutive shares excluded from earnings per diluted share (in shares)	0	98,000	0	98,000
Option \| 2017 Option grant
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Effect of dilutive securities (in shares)	66,000	64,000	65,000	81,000
Option \| 2019 Option grant
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Effect of dilutive securities (in shares)	13,000	6,000	13,000	18,000
Restricted stock awards \| 2020 Restricted stock awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Effect of dilutive securities (in shares)	0	9,000	0	10,000
Restricted stock awards \| 2021 Restricted stock awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Effect of dilutive securities (in shares)	31,000	2,000	40,000	10,000

BASIS OF PRESENTATION, CORPORATE TRANSACTIONS, SIGNIFICANT ACCOUNTING POLICIES, AND RECENT ACCOUNTING PRONOUNCEMENTS - Segments (Details)	6 Months Ended
	Jun. 30, 2024 segment region
Segment Reporting Information [Line Items]
Number of operating segments	1
Number of reportable segments	1
ARIZONA
Segment Reporting Information [Line Items]
Number of geographic regions in which operating utility operates \| region	1

REGULATORY DECISION AND RELATED ACCOUNTING AND POLICY CHANGES - Additional Information (Details) $ in Thousands					3 Months Ended		6 Months Ended
	Aug. 01, 2024 USD ($)	Jun. 27, 2024 USD ($)	Feb. 29, 2024 USD ($)	Jul. 27, 2022 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	May 10, 2024 system	Jan. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)	Jul. 03, 2023 USD ($)	Jun. 27, 2023 utility
Public Utilities, General Disclosures [Line Items]
Requested revenue increase			$ 351
Approved collective revenue increase				$ 2,200
Number of isolated systems to acquire \| system									7
Construction work-in-progress					$ 59,095		$ 59,095				$ 48,147
Total revenues					$ 13,510	$ 13,000	$ 25,120	$ 26,128
Number of regulated utilities that filed a rate case with the ACC \| utility													7
Requested equity capital structure (as a percent)			55.00%
Return on equity, percentage			9.60%
Public utilities, phase-in period				2 years
Subsequent Event
Public Utilities, General Disclosures [Line Items]
Total revenues	$ (570)
Water Plant
Public Utilities, General Disclosures [Line Items]
Construction work-in-progress												$ 38,400
Plant placed in service												$ 25,000
Construction cost included in rate base										$ 7,800
Arizona Corporation Commission (ACC)
Public Utilities, General Disclosures [Line Items]
Requested revenue increase		$ 1,300

REGULATORY DECISION AND RELATED ACCOUNTING AND POLICY CHANGES - Schedule of Regulatory Assets and Regulatory Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 20, 2024	Dec. 31, 2023	Oct. 24, 2022	Dec. 03, 2021
Regulatory Liability [Line Items]
Regulatory Assets	$ 4,197		$ 2,898
Regulatory Liabilities	5,875		6,076
Income taxes payable through future rates
Regulatory Liability [Line Items]
Regulatory Liabilities	478		488
Acquired ICFAs
Regulatory Liability [Line Items]
Regulatory Liabilities	4,708		4,896
Depreciation adjustment
Regulatory Liability [Line Items]
Regulatory Liabilities	689		692
Income taxes recoverable through future rates
Regulatory Liability [Line Items]
Regulatory Assets	$ 1,365		1,404
Rate case expense surcharge
Regulatory Liability [Line Items]
Recovery Period	2 years	2 years		2 years
Regulatory Assets	$ 175	$ 100	221	$ 500
Acquisition premiums
Regulatory Liability [Line Items]
Regulatory Assets	2,624	$ 1,800	1,269
Acquisition premiums \| Rincon Water Company, Inc.
Regulatory Liability [Line Items]
Recovery Period					50 years
Regulatory Assets	$ 600
Acquisition premiums \| Turner Ranches Irrigation, Inc. and Red Rock Utilities Company
Regulatory Liability [Line Items]
Recovery Period	25 years
Regulatory Assets	$ 700
Acquisition premiums \| Francesca, Las Quintas Serenas, Lyn Lee, Mirabell And Tortolita Utilities
Regulatory Liability [Line Items]
Recovery Period	50 years
Regulatory Assets	$ 1,300
Acquisition premiums \| Maximum
Regulatory Liability [Line Items]
Recovery Period	50 years
Acquisition premiums \| Minimum
Regulatory Liability [Line Items]
Recovery Period	25 years
Other regulatory assets
Regulatory Liability [Line Items]
Regulatory Assets	$ 33		$ 4

REVENUE RECOGNITION - Additional Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Required payment period	15 days
Percentage of ICFA payments, recorded as HUF liability	70.00%
Percentage of overall ICFA funds, recorded as deferred revenue	30.00%
Deferred revenue	$ 19,974	$ 19,656

REVENUE RECOGNITION - Schedule of Deferred Revenue - ICFA (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($)
Disaggregation of Revenue [Line Items]
Beginning balance	$ 19,656
Ending balance	19,974
Deferred Revenue - ICFA
Disaggregation of Revenue [Line Items]
Beginning balance	19,656
Payments Allocated to Deferred Revenue	318
Revenue Recognized	0
Ending balance	$ 19,974

REVENUE RECOGNITION - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation of Revenue [Line Items]
Total revenues	$ 13,510	$ 13,000	$ 25,120	$ 26,128
Regulated Operation
Disaggregation of Revenue [Line Items]
Total revenues	13,510	13,000	25,120	23,860
Regulated Operation \| Water Services
Disaggregation of Revenue [Line Items]
Total revenues	6,668	6,557	11,894	11,396
Regulated Operation \| Water Services \| Residential
Disaggregation of Revenue [Line Items]
Total revenues	4,807	4,470	8,969	8,361
Regulated Operation \| Water Services \| Irrigation
Disaggregation of Revenue [Line Items]
Total revenues	887	983	1,254	1,347
Regulated Operation \| Water Services \| Commercial
Disaggregation of Revenue [Line Items]
Total revenues	463	434	848	726
Regulated Operation \| Water Services \| Construction
Disaggregation of Revenue [Line Items]
Total revenues	240	373	393	500
Regulated Operation \| Water Services \| Other water revenues
Disaggregation of Revenue [Line Items]
Total revenues	271	297	430	462
Regulated Operation \| Wastewater and recycled water services
Disaggregation of Revenue [Line Items]
Total revenues	6,842	6,443	13,226	12,464
Regulated Operation \| Wastewater and recycled water services \| Residential
Disaggregation of Revenue [Line Items]
Total revenues	5,977	5,562	11,811	11,094
Regulated Operation \| Wastewater and recycled water services \| Commercial
Disaggregation of Revenue [Line Items]
Total revenues	354	301	698	589
Regulated Operation \| Wastewater and recycled water services \| Recycled water revenues
Disaggregation of Revenue [Line Items]
Total revenues	406	473	527	593
Regulated Operation \| Wastewater and recycled water services \| Other wastewater revenues
Disaggregation of Revenue [Line Items]
Total revenues	105	107	190	188
Unregulated Operation
Disaggregation of Revenue [Line Items]
Total revenues	0	0	0	2,268
Unregulated Operation \| ICFA revenues
Disaggregation of Revenue [Line Items]
Total revenues	$ 0	$ 0	$ 0	$ 2,268

REVENUE RECOGNITION - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Capitalized Contract Cost [Line Items]
Accounts receivable	$ 2,981	$ 2,967
Deferred revenue - ICFA	19,974	19,656
Total contract liabilities	19,974	19,656
Water services
Capitalized Contract Cost [Line Items]
Accounts receivable	1,689	1,588
Wastewater and recycled water services
Capitalized Contract Cost [Line Items]
Accounts receivable	$ 1,292	$ 1,379

REVENUE RECOGNITION - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Billed receivables	$ 2,981	$ 2,967
Less provision for credit losses	(133)	(122)
Accounts receivable, net	$ 2,848	$ 2,845

REVENUE RECOGNITION - Schedule of Allowance for Doubtful Accounts Activity (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Allowance for doubtful accounts [Roll Forward]
Beginning of Period	$ (122)	$ (164)	$ (164)
Credit Loss Expense	(35)	$ (35)	(76)
Write Offs	48		124
Recoveries	(24)		(6)
End of Period	$ (133)		$ (122)

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 417,463	$ 414,170
Equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 61,294	60,536
Equipment \| Minimum
Property, Plant and Equipment [Line Items]
Useful life	3 years
Equipment \| Maximum
Property, Plant and Equipment [Line Items]
Useful life	30 years
Office buildings and other structures
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 64,603	64,084
Useful life	30 years
Transmission and distribution plant
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 291,566	$ 289,550
Transmission and distribution plant \| Minimum
Property, Plant and Equipment [Line Items]
Useful life	10 years
Transmission and distribution plant \| Maximum
Property, Plant and Equipment [Line Items]
Useful life	50 years

GOODWILL AND INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	Jun. 20, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Goodwill [Line Items]
Goodwill		$ 9,486		$ 9,486		$ 10,820
Goodwill reclassified	$ (1,300)			(1,334)
Regulatory assets		4,197		4,197		2,898
Amortization of intangible assets		300	$ 0	300	$ 0
Acquisition premiums
Goodwill [Line Items]
Regulatory assets	1,800	$ 2,624		$ 2,624		$ 1,269
Acquisition premiums \| GW-Rincon Utility
Goodwill [Line Items]
Regulatory assets	$ 500

GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill (Details) - USD ($) $ in Thousands		6 Months Ended
	Jun. 20, 2024	Jun. 30, 2024
Goodwill [Roll Forward]
December 31, 2023 Balance		$ 10,820
Acquisition Activity		0
Adjustments Subsequent to Acquisition Date	$ (1,300)	(1,334)
June 30, 2024 Balance		$ 9,486

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

TRANSACTIONS WITH RELATED PARTIES (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Affiliates \| Medical Benefits Pool Plan
Related Party Transaction [Line Items]
Medical claims paid	$ 0.3	$ 0.2	$ 0.5	$ 0.3

ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Property taxes	$ 1,292	$ 1,242
Interest	1,168	480
Accrued bonus	706	602
Customer prepayments	693	883
Dividend payable	606	606
Accrued project liabilities	565	1,001
Other accrued liabilities	2,138	2,315
Total accrued expenses	$ 7,168	$ 7,129

FAIR VALUE (Details)	Feb. 01, 2023 USD ($)	Oct. 16, 2018 USD ($) growth_premium_area	Jun. 30, 2024 USD ($) growth_premium_area	Dec. 31, 2023 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Demand deposit			$ 1,000	$ 1,000
Contingent consideration			2,078,000	2,113,000
Total			$ 3,626,000	3,790,000
Red Rock Utilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Growth premium payable		$ 750
Number of growth premiums \| growth_premium_area		3	3
Growth premium, obligation period, after installation		10 years
Growth premium, obligation period, from acquisition date		20 years
Farmers Water Company
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Growth premium payable	$ 1,000
Maximum payout of growth premium receivable	$ 3,500,000
Growth premium, obligation period	10 years
Red Rock Utilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Growth premium payable		$ 750
HUF Funds - restricted cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Restricted cash			$ 603,000	822,000
Certificate of Deposit - Restricted
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Restricted cash			944,000	854,000
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Demand deposit			1,000	1,000
Contingent consideration			0	0
Total			1,548,000	823,000
Level 1 \| HUF Funds - restricted cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Restricted cash			603,000	822,000
Level 1 \| Certificate of Deposit - Restricted
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Restricted cash			944,000	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Demand deposit			0	0
Contingent consideration			0	0
Total			0	854,000
Level 2 \| HUF Funds - restricted cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Restricted cash			0	0
Level 2 \| Certificate of Deposit - Restricted
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Restricted cash			0	854,000
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Demand deposit			0	0
Contingent consideration			2,078,000	2,113,000
Total			2,078,000	2,113,000
Level 3 \| HUF Funds - restricted cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Restricted cash			0	0
Level 3 \| Certificate of Deposit - Restricted
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Restricted cash			$ 0	$ 0

DEBT - Schedule of Outstanding Balances and Maturity Dates for Short Term and Long Term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Oct. 26, 2023
Short-term
Notes payable	$ 3,882	$ 3,880
Loan Payable	49	47
Total debt	3,882	3,880
Long-term
Loan Payable	159	184
Total debt	119,070	101,341
Senior Notes
Short-term
Notes payable	3,833	3,833
Debt issuance costs	0	0
Long-term
Notes payable	119,667	101,583
Debt issuance costs	$ (756)	(426)
Senior Notes \| 4.38% Senior Secured Notes, Series A, maturing June 2028 (“Series A Notes”)
Debt Instrument [Line Items]
Debt instrument, interest rate	4.38%
Short-term
Notes payable	$ 0	0
Long-term
Notes payable	$ 28,750	28,750
Senior Notes \| 4.58% Senior Secured Notes, Series B, maturing June 2036 (“Series B Notes”)
Debt Instrument [Line Items]
Debt instrument, interest rate	4.58%
Short-term
Notes payable	$ 3,833	3,833
Long-term
Notes payable	$ 70,917	72,833
Senior Notes \| 6.91% Senior Secured Notes, maturing January 2034 (“6.91% Notes”)
Debt Instrument [Line Items]
Debt instrument, interest rate	6.91%		6.91%
Short-term
Notes payable	$ 0	0
Long-term
Notes payable	$ 20,000	$ 0

DEBT - Schedule of Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Long-term debt	$ 118,543	$ 100,746
Level 1
Debt Instrument [Line Items]
Long-term debt	0	0
Level 2
Debt Instrument [Line Items]
Long-term debt	118,543	100,746
Level 3
Debt Instrument [Line Items]
Long-term debt	$ 0	$ 0

DEBT - Additional Information (Details) - USD ($)		6 Months Ended
DEBT - Additional Information (Details) - USD ($)	Apr. 30, 2020	Jun. 30, 2024	Apr. 30, 2024	Dec. 31, 2023	Oct. 26, 2023
Debt Instrument [Line Items]
Line of credit		$ 0		$ 2,315,000
Unamortized debt issuance costs		12,000		$ 25,000
Government Assistance, Loan \| GW-Rincon Utility
Debt Instrument [Line Items]
Government assistance, amount			$ 2,400,000
Government Assistance, Forgiveable Loan \| GW-Rincon Utility
Debt Instrument [Line Items]
Government assistance, amount			$ 700,000
Northern Trust Loan Agreement \| Revolving Credit Facility
Debt Instrument [Line Items]
Revolving line of credit, maximum borrowing capacity	$ 10,000,000	$ 15,000,000
Facility fee on unused amount of line of credit (as a percent)		0.35%
Senior Notes \| 6.91% Senior Secured Notes, maturing January 2034 (“6.91% Notes”)
Debt Instrument [Line Items]
Debt instrument, interest rate		6.91%			6.91%
Government Loan \| GW-Rincon Utility
Debt Instrument [Line Items]
Debt instrument, interest rate			4.911%
Disbursements		$ 0
Line of Credit \| Northern Trust Loan Agreement \| Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, term	2 years
Basis spread on variable rate (as a percent)	2.00%
Unused line fee	$ 0

INCOME TAXES - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Income tax expense	$ 598	$ 731	$ 848	$ 1,596
Pre-tax income	$ 2,328	$ 2,470	$ 3,269	$ 5,801
Effective tax rate			24.93%	25.25%

DEFERRED COMPENSATION AWARDS - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended		6 Months Ended
	Aug. 31, 2019	Aug. 31, 2017	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period					3 years
RSUs and SARs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense			$ 100	$ 100	$ 200	$ 100
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense			$ 197	255	$ 395	537
Restricted Stock \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period					2 years
Restricted Stock \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period					3 years
2017 stock option grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, options granted (in shares)		465,000
Split-adjusted exercise price of options (in dollars per share)		$ 9.40
Fair value of the stock option expense					$ 1,100
Options exercised (in shares)					125,750
Options forfeited (in shares)					70,425
Number of options outstanding (in shares)			268,825		268,825
2017 stock option grant \| Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period					4 years
Expiration period					10 years
2017 stock option grant \| Stock Option \| Vesting In August 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					25.00%
2017 stock option grant \| Stock Option \| Vesting In August 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					25.00%
2017 stock option grant \| Stock Option \| Vesting In August 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					25.00%
2017 stock option grant \| Stock Option \| Vesting In August 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					25.00%
2019 stock option grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, options granted (in shares)	250,000
Split-adjusted exercise price of options (in dollars per share)	$ 11.26
Fair value of the stock option expense					$ 800
Options exercised (in shares)					55,994
Options forfeited (in shares)					63,020
Compensation expense				$ 29		$ 72
Number of options outstanding (in shares)			130,986		130,986
2019 stock option grant \| Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period					10 years
2019 stock option grant \| Stock Option \| Vesting In August 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period					4 years
Vesting percentage					25.00%
2019 stock option grant \| Stock Option \| Vesting In August 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					25.00%
2019 stock option grant \| Stock Option \| Vesting In August 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					25.00%
2019 stock option grant \| Stock Option \| Vesting In August 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					25.00%

DEFERRED COMPENSATION AWARDS - Schedule of Total Awards Granted and Number of Units Outstanding (Details) - RSUs - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			110,993
Units Outstanding (in shares)	50,690		50,690
Amounts Paid	$ 87	$ 83	$ 170	$ 137
Q1 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			27,403
Units Outstanding (in shares)	0		0
Amounts Paid	$ 0	28	$ 28	57
Q1 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			22,262
Units Outstanding (in shares)	5,334		5,334
Amounts Paid	$ 23	23	$ 46	48
Q1 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			30,366
Units Outstanding (in shares)	16,974		16,974
Amounts Paid	$ 31	32	$ 63	32
Q1 2024
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			30,962
Units Outstanding (in shares)	28,382		28,382
Amounts Paid	$ 33	$ 0	$ 33	$ 0

DEFERRED COMPENSATION AWARDS - Schedule of Recipients of SARs Awards, Grant Date, Units Granted, Exercise Price, Outstanding Shares and Amounts Paid (Details) - Stock Appreciation Rights (SARs) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024 USD ($) shares	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) qtr $ / shares shares	Jun. 30, 2023 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			332,000
Units Outstanding (in shares)	20,750		20,750
Amounts Paid \| $	$ 0	$ 0	$ 0	$ 165
Number of periods the award will vest \| qtr			16
Q1 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			299,000
Exercise Price (in dollars per share) \| $ / shares			$ 4.26
Units Outstanding (in shares)	12,500		12,500
Amounts Paid \| $	$ 0	0	$ 0	165
Q1 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units Granted (in shares)			33,000
Exercise Price (in dollars per share) \| $ / shares			$ 8.99
Units Outstanding (in shares)	8,250		8,250
Amounts Paid \| $	$ 0	$ 0	$ 0	$ 0

DEFERRED COMPENSATION AWARDS - Schedule of Deferred Compensation Expense (Details) - RSUs $ in Thousands	Jun. 30, 2024 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
2024 (remaining period)	$ 164
2025	263
2026	125
Total	$ 552

DEFERRED COMPENSATION AWARDS - Schedule of RSA Units Granted and Compensation Expense Related to the Grant (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 197	$ 255	$ 395	$ 537

SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Supplemental Cash Flow Elements [Abstract]
Cash paid for interest - net of amounts capitalized	$ 2,290	$ 2,397
Non-cash financing and investing activities:
Capital expenditures included in accounts payable and accrued liabilities	710	2,045
Business acquisition through issuance of contingent consideration payable	0	1,330
Finance lease additions	$ 290	$ 0

COMMITMENTS AND CONTINGENCIES (Details)	Feb. 01, 2023 USD ($)	Oct. 16, 2018 USD ($) growth_premium_area	Jun. 30, 2024 USD ($) account meter growth_premium_area
Farmers Water Company
Loss Contingencies [Line Items]
Growth premium payable	$ 1,000
Maximum payout of growth premium receivable	$ 3,500,000
Growth premium, obligation period	10 years
Growth premium liability			$ 1,200,000
Red Rock Utilities
Loss Contingencies [Line Items]
Growth premium payable		$ 750
Growth premium liability			$ 800,000
Number of growth premiums \| growth_premium_area		3	3
Growth premium, obligation period, after installation		10 years
Growth premium, obligation period, from acquisition date		20 years
Number of meters installed \| meter			0
Number of accounts established \| account			0