Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Global Water Resources Inc. Fourth Quarter and Full Year 2018 Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. [Operator Instructions]. I would like to remind everyone that this call is being recorded on March 7, 2019 at 1:00 P.M. Eastern time. I would now like to turn the conference over to Heather Krupa, Controller. Please go ahead.

Good morning, everyone, and thank you for joining us on today’s call. Yesterday, we issued our 2018 year-end financial results by press release, a copy of which is available on our website at www.gwresources.com. Speaking today is Ron Fleming, Chairman, President and Chief Executive Officer; and Mike Liebman, Chief Financial Officer. Mr. Fleming will summarize the key events of the quarter, following which Mr. Liebman will review the financial results for the year ended December 31, 2018. Mr. Fleming and Mr. Liebman will be available for questions at the end of the call. Before we begin, I’d like to remind you that information presented today may include forward-looking statements. These forward-looking statements involve assumptions, risks, uncertainties, estimates and other factors that could cause actual results to differ materially from those contained in the forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements, which reflects management’s views as of the date hereof, and are not guarantees of future performance. For additional information regarding the factors that may affect future results, please read the sections Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operation included within our latest Form 10-K filed with the SEC. Such filings are available at www.sec.gov. Certain non-GAAP measures may be included within today’s call. For a reconciliation of these measures to the comparable GAAP financial measures, please see the tables included in yesterday’s earnings release, which is available on our website. Unless otherwise stated, all amounts discussed are in US dollars. I’ll now turn the call over to Mr. Ron Fleming.

Thank you, Heather. Good morning, everyone, and thank you for joining us today. We are very pleased to report our fourth quarter and full year 2018 results. 2018 was an exciting year for Global Water with the company achieving successful results throughout our business including with compliance and safety, organic growth and acquisition, and completion of many significant improvement projects within the communities we serve. First and foremost our employees successfully completed the year with no recordable safety event -- incident and no environmental compliance violation. We have now achieved over 564 consecutive days without a recordable safety accident and over 1,061 days without an environmental compliance violation. These remarkable achievements show the dedication and care of our employees as we provide exceptional performance in the delivery of safe and reliable utility service. Additionally, Global Water was named finalist in 2018 Environmental Excellence Awards by Arizona Forward for our effective implementation of Total Water Management. We appreciate the recognition of our dedication to managing scarce water resources for the benefit of the communities we serve. Turning to financial performance. Revenues for the year increased 13.8% to $35.5 million, up from $31.2 million, driven primarily by a $2.5 million recognition of revenue under the infrastructure coordination and financing agreements as a result of the completion of capital improvements that increased the capacity of our Palo Verde utility’s wastewater reclamation facility. The increase in revenue was also due to growth in active connections of 12% and approved rate increases, partially offset by reductions due to tax reform. The 12% connection growth rate consists of 5.2% organic growth and acquisition. Acquisitions completed in 2018 included Global Water - Turner Ranches Irrigation, a non-potable irrigation water utility in Mesa, Arizona and Global Water - Red Rock Utilities, a water and wastewater utility with service…

Thank you Ron. Hello, everyone. Total revenues for the year were $35.5 million which was up $4.3 million or 13.8% compared to 2017. This increase is primarily driven by the $2.5 million of ICFA revenue recognized, 5.2% organic connection growth and acquisition connection growth of 2.5% and 4.3% from Turner Ranches and Red Rock, respectively. These benefits were offset by a reduction to revenue as a result of tax reform. Specifically, we reduced revenue by $790,000 in 2018 to reflect the impact of tax reform. However, if you remove the reduction to revenue from the impact of tax reform and the increase to revenue from ICFA revenues, revenue increased by $2.6 million or 8.3%. Operating expenses in 2018 were $26.2 million compared to $23.9 million in 2017. This is an increase of $2.4 million, or 10%. Notable changes in operating expenses included increased operating and maintenance cost of $680,000. This increase was primarily driven by the additional costs associated with the Turner Ranches and Red Rock acquisitions of $286,000 as well as an increase in expenses such as utilities, property taxes, contract services, which all increase as revenue increases. Secondly, we had increased general and administrative cost of $1.1 million. This increase was primarily driven by an increase in professional fees, deferred compensation, and personnel expense. And lastly, we had increased depreciation expense by $561,000 due to an increase in fixed assets associated with our capital expenditures plan as well as the added depreciation associated with the acquisitions of Red Rock and Turner Ranches. Now to discuss other expense. Other expense for 2018 was $4.4 million which was an increase of $990,000 compared to 2017. This increase was primarily due to a decrease in the Valencia earnout of $890,000. 2018's growth rate in Valencia service territory was 2.3% in 2018 compared to 6.5% in 2017. Turning to net income. Global Water had net income in 2018 of $3.1 million, or $0.15 per share, compared to $4.6 million or $0.23 per share in 2017. Adjusted EBITDA which adjusts for nonrecurring events such as ICFA revenue and also adjusts for option expense and our equity investment in Fathom was $15.6 million in 2018 which is down $755,000 or 4.6% compared to 2017. Adjusted EBITDA was down primarily due to the impact of tax reform of $790,000 and the last income from the Valencia earnout of $890,000. These reductions were offset by increases in organic growth of 5.2%, as well as the acquisition growth from Red Rock and Turner Ranches. This concludes our update on 2018 results. I'll now pass the call back to Ron.

Thank you, Mike. It is clear excluding the revenue reductions caused by federal tax reform and the corresponding corporate rate reductions and the slowdown over Valencia earnout, both of which are beyond our control, Global Water's top-line and connection growth rates continue to be very strong. As we handle this growth, we continue to remain at the forefront of the water management industry and advance our mission of achieving efficiency and consolidation. We truly believe that expanding our platform and applying our expertise throughout our regional service areas and to new utilities will be beneficial to all stakeholders involved. We appreciate your investment in and support of us as we grow Global Water to address important utility, water resource and economic development issues in Arizona and potentially beyond. These highlights conclude our prepared remarks. Thank you. Mike and I are now available to answer any questions.

[Operator Instructions]. Our first question comes from Gerry Sweeney with ROTH Capital. Please go ahead.

Good morning, Ron and Mike. Thanks for taking my call. A question on permits, a lot of talk in the media about slowing housing permits that are -- this is obviously on a national basis as the sale of real estate is local. But -- and Maricopa had some great growth the last two years and had put some permit activity in January and February, definitely strong, maybe not as strong as one or two of the years in the past. But I also know there is a bunch of infrastructure work that’s going in the city with I think the bridge over the railway track as well as some state routes. I forgot the exact number but planning around that maybe widening it et cetera. Any comment on that. And just maybe how that could position Global Water for the next several years?

So you are right. I think it is local and certainly when it comes to Maricopa that’s the way I think everybody needs to look at it. So Arizona overall is doing quite well still, and in fact Maricopa County was the fastest growing county in the US. So the more regional numbers look good. Now if you zoom into Maricopa, and to further expand on some of the points you made there, there has been nearly $10 billion of investment within a 10 mile radius of the City of Maricopa and that’s now obviously well beyond what we are doing there in the city itself. It’s the fact that Intel continues to expand their manufacturing facility that’s located up the road in Chandler. Major corporation campuses are also being located in and around that Intel area in Southern Chandler. The ADOT or the Arizona Department of Transportation is finishing a very significant transportation freeway project that's going to connect the west valley of Phoenix around what's called south mountain, so you don’t have to go through Metro Phoenix anymore to get to North Pinal County, the City of Maricopa and this area in Chandler that I'm referring to and that, that project which adds really three lanes of traffic in both directions is expected to be completed in the next 12 months. Then you got things more local to Maricopa which as you say there is a major overpass being constructed over some rail yards that runs through the center of the city today. And fortunately which is a nice asset for the City of Maricopa. There is a Native American community located next to Maricopa that just did a $200 million resort and casino expansion and then you got the $40 million we put in that city over the last couple years. So there is a lot of investment going on in that basically regional area and that’s because of the long-term belief that everybody has and there is just the growth patterns of Phoenix push out through South Chandler and the Gilbert down to the North Pinal County where we’ve got these major interests. So for all of those reasons we are very bullish on the long-term potential of the area. We do think even though January and February saw a bit of a decline in permits issued, even that decline still keeps our growth rate near 4% which is the 4 times the national average for the utility growth rate itself. So all is good on that front and we hope it’s long and sustained.

[Operator Instructions]. This concludes the question-and-answer session. I would like to turn the conference back over to Ron L. Fleming for any closing remarks.

Thank you, operator. I would just like to thank everyone for participating in our call today and for your ongoing interest in Global Water. Thanks. And we look forward to speaking with you again.

This concludes today’s conference call. You may disconnect your lines. Thank you for participating. And have a pleasant day.