Global Water Resources, Inc.

Previous wording

The following management’s discussion and analysis of Global Water Resources, Inc.’s financial condition and results of operations (“MD&A”) relate to the three and six months ended June 30, 2025 and should be read together with the consolidated financial statements and accompanying notes included in Part I, Item 1 of this report.

Current wording

The following management’s discussion and analysis of Global Water Resources, Inc.’s financial condition and results of operations (“MD&A”) relate to the three and nine months ended September 30, 2025 and should be read together with the consolidated financial statements and accompanying notes included in Part I, Item 1 of this report.

Previous wording

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 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, timing and other statements regarding our plans, expectations and estimates relating to our rate case and other applications with the ACC, including estimated rate base; our plans relating to future filings of our rate cases with the ACC; acquisition plans and strategies, including our ability to complete additional acquisitions, and our expectations about future benefits of our acquisitions, such as projected revenue from our acquisitions, as well as our plans relating to the integration and upgrade of acquired water systems; statements concerning Arizona’s Assured Water Supply “Ag-to-Urban” program, including anticipated benefits; expectations about prospective growth and opportunities, including the company’s belief that its regionally planned service areas can ultimately serve hundreds of thousands of additional potential service connections by continuing to apply its Total Water Management stewardship practices with its existing permitted water supplies; technologies, including expected benefits from implementing such technologies; revenue; 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.

Current wording

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 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, timing and other statements regarding our plans, expectations and estimates relating to our rate cases and other applications with the ACC, including estimated rate base; our plans relating to future filings of our rate cases with the ACC; acquisition plans and strategies, including our ability to complete additional acquisitions, and our expectations about future benefits of our acquisitions, such as projected revenue from our acquisitions, as well as our plans relating to the integration and upgrade of acquired water systems; statements concerning Arizona’s Assured Water Supply “Ag-to-Urban” program, including anticipated benefits; expectations about prospective growth and opportunities, including the company’s belief that its regionally planned service areas can ultimately serve hundreds of thousands of additional potential service connections by continuing to apply its Total Water Management stewardship practices with its existing permitted water supplies; technologies, including expected benefits from implementing such technologies; revenue; 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.

Previous wording

We continue to experience organic growth exhibited through our year-over-year organic increase in active connections (i.e., exclusive of acquisition related growth) of 3.8% as of June 30, 2025. According to the 2024 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 5.2 million, an increase of 7.0% over the 4.8 million people reported in the 2020 Census. Growth in the Phoenix MSA continues as a result of its 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.

Current wording

We continue to experience organic growth exhibited through our year-over-year organic increase in active connections (i.e., exclusive of acquisition-related growth) of 3.5% as of September 30, 2025. According to the 2024 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 5.2 million, an increase of 7.0% over the 4.8 million people reported in the 2020 Census. Growth in the Phoenix MSA continues as a result of its 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.

Previous wording

Our organic growth continues to be heavily influenced by the substantially lower cost of housing in the City of Maricopa as compared to other areas in the Phoenix MSA. As of June 2025, the median home sales price was nearly 30% lower in the City of Maricopa than in the City of Phoenix. We are monitoring potential effects on our operations due to changes in the macroeconomic environment, such as the impacts of tariffs on our operational costs and construction work in progress as well as new home construction in our service areas. We continue to expect a positive long-term outlook based on forecasted performance of job growth and construction in the Phoenix MSA housing market.

Current wording

Our organic growth continues to be primarily influenced by the comparatively lower cost of housing in the City of Maricopa relative to other areas within the Phoenix MSA. As of September 2025, the median home sales price in the City of Maricopa was 26% lower than in the City of Phoenix. We continue to monitor potential effects on our operations due to changes in the macroeconomic environment, such as the impacts of tariffs on our operational costs and construction work in progress, as well as new home construction in our service areas. We continue to expect a positive long-term outlook based on forecasted performance of job growth and construction in the Phoenix MSA housing market.

Previous wording

In the second quarter of 2025, the Arizona State University - W.P. Carey School of Business Greater Phoenix Blue Chip Real Estate Consensus Panel revised its 2025 and 2026 forecasts downward for single family and multi-family permits in the Phoenix MSA, which are presented in the table below:

Current wording

In the third quarter of 2025, the Arizona State University - W.P. Carey School of Business Greater Phoenix Blue Chip Real Estate Consensus Panel revised its 2025 forecast slightly downward for single family permits, and upward for multi-family permits in the Phoenix MSA. The 2026 forecast was revised downward for both single family and multi-family permits in the Phoenix MSA. These updated forecasts are presented in the table below:

Previous wording

Single family and multi-family housing equivalent permits issued for the three and six months ended June 30, 2025 and 2024 are presented in the table below:

Current wording

Single family and multi-family housing equivalent permits issued for the three and nine months ended September 30, 2025 and 2024 are presented in the table below:

Previous wording

We continue to monitor the impact of business and macroeconomic conditions, including inflationary pressures and changes in tariff policy, on our business and operations. While these conditions did not have a material effect on our business operations, results of operations, cash flows and financial position for the three and six months ended June 30, 2025, we are unable to predict the ultimate extent to which our business operations, results of operations, cash flows, and financial position could be impacted.

Current wording

We continue to monitor the impact of business and macroeconomic conditions, including inflationary pressures and changes in tariff policy, on our business and operations. While these conditions did not have a material effect on our business operations, results of operations, cash flows and financial position for the three and nine months ended September 30, 2025, we are unable to predict the ultimate extent to which our business operations, results of operations, cash flows, and financial position could be impacted.

Previous wording

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 revenue and variable expenses in a corresponding manner. As of June 30, 2025, active service connections increased 2,383, or 3.8%, to 65,639 compared to 63,256 active service connections as of June 30, 2024, primarily due to organic growth in our service areas. Approximately 89.8% of the 65,639 active service connections are serviced by our GW-Santa Cruz and GW-Palo Verde utilities as of June 30, 2025.

Current wording

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 revenue and variable expenses in a corresponding manner. As of September 30, 2025, active service connections increased 4,241, or 6.6%, to 68,130 compared to 63,889 active service connections as of September 30, 2024, primarily due to organic growth in our service areas and the recent acquisition of seven water systems from the City of Tucson. Approximately 87.2% of the 68,130 active service connections are serviced by our GW-Santa Cruz and GW-Palo Verde utilities as of September 30, 2025.

Previous wording

On July 8, 2025, the Company’s GW-Ocotillo subsidiary completed the previously announced acquisition of seven water systems from Tucson Water, the City of Tucson’s water utility, in an all-cash transaction for an amended purchase price of approximately $8.2 million. The acquired water systems are located in and around Pima County where they serve approximately 2,200 water service connections. The current rate base of the seven water systems is approximately $7.7 million and the Company expects the acquired water systems to generate approximately $1.5 million in revenue annually. The acquisition brings the total number of Global Water customers in Pima County to approximately 7,200. The Company will integrate the acquired water systems using the same proven approach to consolidation and effective water management implemented in its other recent acquisitions in Pima County. The Company plans to update the acquired water systems over time with the installation of upgraded AMI, which will include smart meters that enable wireless usage metering, similar to the technology that Global Water has deployed for more than 95% of its existing water connections.

Current wording

On July 8, 2025, the Company’s GW-Ocotillo subsidiary completed the previously announced acquisition of seven water systems from Tucson Water, the City of Tucson’s water utility, in an all-cash transaction for an amended purchase price of approximately $8.1 million. The systems served approximately 2,200 water service connections in and around Pima County with a rate base of approximately $7.7 million at the time of acquisition. Following the acquisition, the total number of Global Water customers in Pima County exceeded 7,200. The Company expects the acquired water systems to generate approximately $1.5 million in revenue annually. The Company will integrate the acquired water systems using the same proven approach to consolidation and effective water management implemented in its other recent acquisitions in Pima County. The Company plans to update the acquired water systems over time with the installation of upgraded AMI, which will include smart meters that enable wireless usage metering, similar to the technology that Global Water has deployed for more than 95% of its existing water connections.

Previous wording

-23- 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”, that is, the delay between the utility’s test year and the issuance of a rate order approving new rates.

Current wording

For example, on April 10, 2024, the EPA finalized the NPDWR, establishing legally enforceable MCLs for six PFAS in drinking water. 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”, that is, the delay between the utility’s test year and the issuance of a rate order approving new rates.

Previous wording

In April 2024, the federal Judicial Panel on Multidistrict Litigation approved the consolidation of approximately 500 separate cases against multiple defendant manufacturers into a single multi-district civil class action lawsuit (“MDL”) known as Aqueous Film-Forming Foams (“AFFF”) Products Liability Litigation MDL No. 2873 (the “AFFF MDL”). The AFFF MDL was filed in the U.S. District Court for the District of South Carolina (the “Court”) and is intended to resolve claims associated with PFAS contamination in water systems from the manufacture and widespread use of AFFF, which is believed to be a significant source of PFAS contamination in water systems. AFFF containing PFAS (and until 2002, perfluorooctanoic acid, a related compound) was widely used in fire suppression systems, firefighting vehicles, and at fire training facilities nationwide. The Company is in the class of plaintiffs in the AFFF MDL, and 3M, one of the primary defendants in the AFFF MDL, has recently begun distributing its first annual incremental payments to the plaintiffs pursuant to the settlement reached with 3M and approved by the Court. Annual payments by 3M are expected to continue to be made to the Company through 2036 and are expected to be immaterial. Any settlement reached with any of the remaining defendants in the AFFF MDL will be subject to the final approval of the Court. There can be no assurance as to the outcome of the AFFF MDL with regard to these remaining defendants, including any decision or resolution thereof, timing, or the ultimate amounts that may be realized, if any.

Current wording

In April 2024, the federal Judicial Panel on Multidistrict Litigation approved the consolidation of approximately 500 separate cases against multiple defendant manufacturers into a single multi-district civil class action lawsuit (“MDL”) known as Aqueous Film-Forming Foams (“AFFF”) Products Liability Litigation MDL No. 2873 (the “AFFF MDL”). The AFFF MDL was filed in the U.S. District Court for the District of South Carolina (the “Court”) and is intended to resolve claims associated with PFAS contamination in water systems from the manufacture and widespread use of AFFF, which is believed to be a significant source of PFAS contamination in water systems. AFFF containing PFAS (and until 2002, perfluorooctanoic acid, a related compound) was widely used in fire suppression systems, firefighting vehicles, and at fire training facilities nationwide. The Company is in the class of plaintiffs in the AFFF MDL, and 3M, one of the primary defendants in the AFFF MDL, has recently begun distributing its first annual incremental payments to the plaintiffs pursuant to the settlement reached with 3M and approved by the Court. Annual payments by 3M are expected to continue to be made to the Company through 2036 and are expected to be immaterial. Any settlement reached with any of the remaining defendants in the AFFF MDL will be subject to the final approval of the Court. There can be no assurance as to the outcome of the AFFF MDL with regard to these remaining defendants, including any decision or resolution thereof, timing, or the ultimate amounts that may be realized, if any. As of November 10, 2025, we received two disbursements totaling approximately $0.4 million, net of attorneys’ fees and other costs.

Previous wording

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

Current wording

In October 2024, the EPA announced a final rule requiring drinking water systems to identify and replace lead pipes within ten years. In accordance with the 2021 Lead and Copper Rule Revision and in connection with the 2024 Lead and Copper Rule Improvements, the Company has conducted an inventory of its service lines. As of June 30, 2025, the inventory was substantially complete and found no lead pipes in our water systems. For the seven water systems acquired in July 2025, the

Previous wording

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.

Current wording

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 have generally been 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.

Previous wording

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 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. In particular, water resource constraints exist in certain areas within Pinal County near and around the City of Maricopa. In particular, water resource constraints exist in certain areas within Pinal County near and around the City of Maricopa. We have obtained two DAWS in the Maricopa/Casa Grande service area (GW-Santa Cruz) for approximately 22,900 acre-feet of water use in total. We have significant unused capacity provided by the large DAWS in the north, including the incorporated City of Maricopa. In Pinal County, southwest of the City of Maricopa, growth covered by the smaller DAWS is more constrained by state law and groundwater regulations, which may impact developers’ ability to obtain final plat approval if the DAWS is not expanded. While we believe we have sufficient capacity for many years to support connection growth in this area, it is the increase in land entitlement that may exceed the allocation of the smaller DAWS, which in turn may limit future plat approvals. We are working with our development partners and others to develop long-term solutions for this area. Regardless, considering the existing capacity in both DAWS, 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 II, Item 1A of this report and the 2024 10-K.

Current wording

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 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. In particular, water resource constraints exist in certain areas within Pinal County near and around the City of Maricopa. We have obtained two DAWS in the Maricopa/Casa Grande service area (GW-Santa Cruz) for approximately 22,900 acre-feet of water use in total. We have significant unused capacity provided by the large DAWS in the north, including the incorporated City of Maricopa. In Pinal County, southwest of the City of Maricopa, growth covered by the smaller DAWS is more constrained by state law and groundwater regulations, which may impact developers’ ability to obtain final plat approval if the DAWS is not expanded. While we believe we have sufficient capacity for many years to support connection growth in this area, it is the increase in land entitlement that may exceed the allocation of the smaller DAWS, which in turn may limit future plat approvals. We are working with our development partners and others to develop long-term solutions for this area. Regardless, considering the existing capacity in both DAWS, we believe that we have an adequate supply of water to service our current demand and growth for the foreseeable future in our service

Previous wording

In June 2025, Senate Bill 1611, known as the Arizona Assured Water Supply “Ag-to-Urban” program, was signed into law, which is a potentially transformative development for water sustainability, housing, and economic growth across the state. The program allows landowners who cease agricultural operations to convert their water rights for use in new development. According to the ADWR, up to 384,000 acres of agricultural land in the Phoenix and Pinal AMAs are eligible for ag-to-urban conversion, representing an area with the potential to support over 1 million new homes. We anticipate the Ag-to-Urban program will help advance our strategic focus on Total Water Management and support growth across our service areas, while also providing expected benefits to the long-term sustainability of the state’s aquifers, including the aquifer beneath the City of Maricopa.

Current wording

In June 2025, Senate Bill 1611, known as the Arizona Assured Water Supply “Ag-to-Urban” program, was signed into law, which is a potentially transformative development for water sustainability, housing, and economic growth across the state. The program allows landowners who cease agricultural operations to convert their water rights for use in new development. According to the ADWR, up to 384,000 acres of agricultural land in the Phoenix and Pinal AMAs are eligible for ag-to-urban conversion, representing an area with the potential to support over 1 million new homes. We anticipate the Ag-to-Urban program will help advance our strategic focus on Total Water Management and support growth across our service areas, while also providing expected benefits to the long-term sustainability of the state’s aquifers, including the aquifer beneath the City of Maricopa. The Ag-to-Urban program went into effect on September 26, 2025 and ADWR began accepting applications from landowners the same day.

Previous wording

On March 5, 2025, GW-Santa Cruz and GW-Palo Verde each filed a general rate case application with the ACC for water and wastewater rates, respectively. The GW-Santa Cruz and GW-Palo Verde rate case is based on a test year ending December 31, 2024, with updates for changes in post-test year plant. The rate case includes a request for rate increases that, if approved by the ACC, would result in a net annual revenue increase of approximately $6.5 million, to be implemented with the first phase beginning in May 2026 and the second phase in January 2027. The requested rate increases would reflect a proposed resolution of matters relating to the Company’s Southwest Plant with the ACC, including recovery of the Company’s investment and premature revenue collection with respect to the Southwest Plant. The Company also proposed the use of Formula Rates prospectively to address revenue increases in the future, that if approved, would allow costs and investments to be updated annually in a smaller, more gradual fashion.

Current wording

On March 5, 2025, GW-Santa Cruz and GW-Palo Verde (collectively, the “GW-Utilities”) each filed a general rate case application with the ACC for water and wastewater rates, respectively. The GW-Santa Cruz and GW-Palo Verde rate case is based on a test year ending December 31, 2024, with updates for changes in post-test year plant. The rate case includes a request for rate increases that, if approved by the ACC, would result in an adjusted rate base of approximately $164.6 million and a net annual revenue increase of approximately $6.5 million, to be implemented with the first phase beginning in May 2026 and the second phase in January 2027. The requested rate increases would reflect a proposed resolution of matters relating to the Company’s Southwest Plant with the ACC, including recovery of the Company’s investment and premature revenue collection with respect to the Southwest Plant. The Company also proposed the use of Formula Rates prospectively to address revenue increases in the future, that if approved, would allow costs and investments to be updated annually in a smaller, more gradual fashion.

Previous wording

(4)Rates are to be phased-in over three periods, starting with 50% of the increase effective on May 1, 2025. Subsequent 25% portions of the increase will be effective November 1, 2025 and May 1, 2026.

Current wording

(4)Rates are to be phased-in over three periods. 50% of the increase was effective on May 1, 2025, with another 25% effective on November 1, 2025. The final 25% increase will be phased in on May 1, 2026.

Previous wording

(5)In March 2025, the Company filed a general rate case application with the ACC related to its GW-Santa Cruz and GW-Palo Verde utilities. The GW-Santa Cruz and GW-Palo Verde rate case is based on a test year ending December 31, 2024, with updates for changes in post-test year plant. A procedural schedule has been set, with testimony expected to commence in the fourth quarter of 2025.

Current wording

(5)In March 2025, the Company filed a general rate case application with the ACC related to its GW-Santa Cruz and GW-Palo Verde utilities. The GW-Santa Cruz and GW-Palo Verde rate case is based on a test year ending December 31, 2024, with updates for changes in post-test year plant. Testimony commenced in the fourth quarter of 2025.

Previous wording

The increase in regulated revenue for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 was primarily attributable to the organic growth in active water and wastewater connections, increased water and recycled water consumption, higher rates for GW-Saguaro, resulting from the GW-Saguaro general rate case, effective July 2024 and January 2025, and higher rates for GW-Farmers resulting from the GW-Farmers general rate case, effective May 1, 2025. The increased consumption was predominantly driven by the increase in active connections and higher usage from irrigation and construction customers. The increase in wastewater and recycled water service revenue was partially offset by $0.2 million in bill credits related to the Company's Southwest Plant, which were effective beginning August 2024. Refer to Note 3 - "Regulatory Matters" of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of the 2024 Form 10-K for additional information regarding the Southwest Plant bill credits.

Current wording

The increase in revenue for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 was primarily attributable to the acquisition of seven water systems from the City of Tucson in July 2025, organic growth in active water and wastewater connections, higher rates for GW-Farmers resulting from the GW-Farmers general rate case, effective May 1, 2025, and higher rates for GW-Saguaro, resulting from the GW-Saguaro general rate case, effective January 1, 2025. The increase in wastewater and recycled water service revenue was partially offset by an increase of $0.1 million in bill credits related to the Company's Southwest Plant, which were effective beginning August 2024. Refer to Note 3 - "Regulatory Matters" of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of the 2024 Form 10-K for additional information regarding the Southwest Plant bill credits.

Previous wording

Higher personnel costs were primarily attributable to increased salaries and wages as a result of filling previously vacant positions.

Current wording

Higher personnel costs were primarily attributable to increased salaries and wages as a result of filling previously vacant positions and hiring additional employees for the newly acquired water systems from the City of Tucson, as well as increased medical costs.

Previous wording

The increase in other operations and maintenance expenses was primarily driven by additional contracts with IT service providers and one-time costs related to wastewater disposal.

Current wording

The increase in other operations and maintenance expenses was primarily driven by expenses related to a storm event with heavy, short duration precipitation.

Previous wording

The increase in other general and administrative expenses was primarily attributable to higher costs associated with various service providers.

Current wording

The increase in other general and administrative expenses was primarily attributable to higher costs associated with IT services, increased office rent, and higher general liability insurance costs.

Previous wording

Depreciation and amortization - The increase for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 was substantially attributable to an increase in depreciable fixed assets as well as additional amortization from a new office lease in Pima County in December 2024.

Current wording

Depreciation and amortization - The increase for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 was substantially attributable to an increase in depreciable fixed assets.

Previous wording

Other Expense – The decrease in other expense was substantially attributable to higher income associated with Buckeye growth premiums of $0.1 million that resulted from an increase in new meter connections in the area for the three months ended June 30, 2025 compared to the same period in 2024. Refer to Note 18 — “Other, Net” of the Notes to the Condensed Consolidated Financial Statements (unaudited) included in Part I, Item 1 of this report for additional information regarding the Buckeye growth premiums.

Current wording

Total Other Income (Expense) – The increase in other expense was substantially attributable to a $0.2 million decrease in interest income and lower income associated with Buckeye growth premiums of $0.3 million that resulted from a decrease in new meter connections in the area for the three months ended September 30, 2025 compared to the same period in 2024. Refer to Note 19 — “Other, Net” of the Notes to the Condensed Consolidated Financial Statements (unaudited) included in Part I, Item 1 of this report for additional information regarding the Buckeye growth premiums.

Previous wording

Comparison of Results of Operations for the Six Months Ended June 30, 2025 and 2024

Current wording

Comparison of Results of Operations for the Nine Months Ended September 30, 2025 and 2024

Previous wording

Financial and operational data for the six months ended June 30, 2025 and 2024 is summarized in the following table (in thousands, except for share amounts):

Current wording

Financial and operational data for the nine months ended September 30, 2025 and 2024 is summarized in the following table (in thousands, except for share amounts):

Previous wording

The following table summarizes revenue for the six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following table summarizes revenue for the nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

The increase in regulated revenue for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 was primarily attributable to the organic growth in active water and wastewater connections, increased water and recycled water consumption, higher rates for GW-Saguaro, resulting from the GW-Saguaro general rate case, effective July 2024 and January 2025, and higher rates for GW-Farmers, resulting from the GW-Farmers general rate case, effective May 1, 2025. The increased consumption was predominantly driven by the increase in active connections and higher usage from irrigation, residential, and construction customers. The increase in wastewater and recycled water service revenue was partially offset by

Current wording

The increase in revenue for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 was primarily attributable to the organic growth in active water and wastewater connections, the acquisition of seven water systems from the City of Tucson in July 2025, increased water consumption, higher rates for GW-Saguaro, resulting from the GW-Saguaro general rate case, effective July 2024 and January 2025, and higher rates for GW-Farmers, resulting from the GW-Farmers general rate case, effective May 1, 2025. The increased consumption was predominantly driven by the increase in active connections and higher usage from irrigation, construction and commercial customers. The increase in wastewater and recycled water service revenue was partially offset by an increase of $0.4 million in bill credits related to the Company's

Previous wording

$0.3 million in bill credits related to the Company's Southwest Plant, which were effective beginning August 2024. Refer to Note 3 - "Regulatory Matters" of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of the 2024 Form 10-K for additional information regarding the Southwest Plant bill credits.

Current wording

Southwest Plant, which were effective beginning August 2024. Refer to Note 3 - "Regulatory Matters" of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of the 2024 Form 10-K for additional information regarding the Southwest Plant bill credits.

Previous wording

Operating Expenses– The following table summarizes operating expenses for the six months ended June 30, 2025 and 2024 (in thousands):

Current wording

Operating Expenses– The following table summarizes operating expenses for the nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

Higher utilities, chemicals and repairs were primarily the result of a $0.2 million increase in power purchased to operate pumps and other related equipment as a result of increased consumption, additional processing equipment in operation and utility rate increases. In addition, increased consumption was also the primary driver of a $0.1 million increase in chemical costs.

Current wording

Higher utilities, chemicals and repairs were primarily the result of an increase in power purchased to operate pumps and other related equipment as a result of increased consumption, additional processing equipment in operation and utility rate increases. In addition, increased consumption was the primary driver of an increase in chemical costs.

Previous wording

The increase in other operations and maintenance expenses was primarily driven by additional contracts with IT service providers, one-time costs related to wastewater disposal, and an increase in rent expense as a result of a new office lease in Pima County in December 2024.

Current wording

The increase in other operations and maintenance expenses was primarily driven by expenses related to a storm event with heavy, short duration precipitation, additional contracts with IT service providers, and an increase in rent expense as a result of a new office lease in Pima County in December 2024.

Previous wording

The increase in other general and administrative expenses was primarily attributable to higher costs associated with various service providers and increased costs related to municipality licensing-type agreements.

Current wording

The increase in other general and administrative expenses was primarily attributable to higher costs associated with various service providers, increased costs related to municipality licensing-type agreements, higher general liability insurance costs, and increased office rent expense.

Previous wording

Depreciation and amortization - The increase for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 was substantially attributable to a 6.7% increase in depreciable fixed assets as well as additional amortization from the new office lease referred to above.

Current wording

Depreciation and amortization - The increase for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 was substantially attributable to a 11.3% increase in depreciable fixed assets.

Previous wording

Other Expense – The increase in other expense was substantially attributable to lower income associated with Buckeye growth premiums that resulted from fewer new meter connections in the area, and a $0.1 million increase in interest expense, net of interest income, partially offset by higher AFUDC-Equity of $0.1 million, for the six months ended June 30, 2025 compared to the same period in 2024. Refer to Note 18 — “Other, Net” of the Notes to the Condensed Consolidated Financial Statements (unaudited) included in Part I, Item 1 of this report for additional information regarding the Buckeye growth premiums.

Current wording

Total Other Expense – The increase in total other expense was substantially attributable to a $0.4 million decrease in interest income, partially offset by higher AFUDC-Equity of $0.2 million, as well as lower income associated with Buckeye growth premiums of $0.3 million that resulted from fewer new meter connections in the area for the nine months ended September 30, 2025 compared to the same period in 2024. Refer to Note 19 — “Other, Net” of the Notes to the Condensed Consolidated Financial Statements (unaudited) included in Part I, Item 1 of this report for additional information regarding the Buckeye growth premiums.

Previous wording

Income Tax Expense –The primary driver for the decrease in income tax expense was lower pre-tax income for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Current wording

Income Tax Expense –The primary driver for the decrease in income tax expense was lower pre-tax income for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Previous wording

On March 27, 2025, the Company completed a public offering of 3,220,000 shares of its common stock at a public offering price of $10.00 per share, which included 420,000 shares issued and sold to the underwriters following the exercise in full of their option to purchase additional shares of common stock. Certain existing stockholders, including certain directors and/or their affiliates, purchased an aggregate of 1,439,200 shares of common stock at the public offering price. The public offering resulted in approximately $32.2 million of gross proceeds or $30.8 million of net proceeds, after deducting underwriting discounts, commissions and offering expenses paid by the Company.

Current wording

On March 27, 2025, the Company completed a public offering of 3,220,000 shares of its common stock at a public offering price of $10.00 per share, which included 420,000 shares issued and sold to the underwriters following the exercise in full of their option to purchase additional shares of common stock. Certain existing shareholders, including certain directors and/or their affiliates, purchased an aggregate of 1,439,200 shares of common stock at the public offering price. The public offering resulted in approximately $32.2 million of gross proceeds or $30.8 million of net proceeds, after deducting underwriting discounts, commissions and offering expenses paid by the Company.

Previous wording

The Company maintains a revolving credit facility with Northern Trust pursuant to a loan agreement entered into between the parties (as amended, the “Northern Trust Loan Agreement”). On April 14, 2025, the Company and Northern Trust entered into a sixth amendment to the Northern Trust Loan Agreement to, among other things, (i) extend the scheduled maturity date from July 1, 2026 to May 18, 2027 and (ii) increase the maximum principal amount available for borrowing under the Revolver from $15.0 million to $20.0 million. Pursuant to the Northern Trust Loan Agreement, the amounts outstanding bear interest, payable monthly, at a rate equal to the Secured Overnight Financing Rate (“SOFR”) plus 2.00%. As of June 30, 2025, the Company had no outstanding borrowings under the Revolver.

Current wording

The Company maintains a revolving credit facility with Northern Trust pursuant to a loan agreement entered into between the parties (as amended, the “Northern Trust Loan Agreement”). On April 14, 2025, the Company and Northern Trust entered into a sixth amendment to the Northern Trust Loan Agreement to, among other things, (i) extend the scheduled maturity date from July 1, 2026 to May 18, 2027 and (ii) increase the maximum principal amount available for borrowing under the Revolver from $15.0 million to $20.0 million. Pursuant to the Northern Trust Loan Agreement, the amounts outstanding bear interest, payable monthly, at a rate equal to the SOFR plus 2.10%. As of September 30, 2025, the Company had outstanding borrowings of $6.9 million under the Revolver, and the weighted average interest rate of the borrowings was 6.43%.

Previous wording

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%. The Series A notes (the “Series A Notes”) carry a principal balance of $28.8 million and bear an interest rate of 4.38% over a twelve-year term, with the principal payment due on June 15, 2028. The Series B notes (the “Series B Notes”) carry a principal balance of $70.9 million and bear an interest rate of 4.58% over a 20-year term, with the principal payment due on June 15, 2036. 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.

Current wording

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%. The Series A notes (the “Series A Notes”) carry a principal balance of $28.8 million and bear an interest rate of 4.38% over a twelve-year term, with the principal payment due on June 15, 2028. The Series B notes (the “Series B Notes”) carry a principal balance of $70.9 million and bear an interest rate of 4.58% over a 20-year term, with the principal payment due on June 15, 2036. 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

Previous wording

On July 8, 2025, the Company completed the previously announced acquisition of seven water systems from Tucson Water, the City of Tucson’s water utility, for a purchase price of approximately $8.2 million.

Current wording

On July 8, 2025, the Company completed the previously announced acquisition of seven water systems from Tucson Water, the City of Tucson’s water utility, for a purchase price of approximately $8.1 million.