EVENT: GWR SECOND QUARTER FISCAL YEAR 2011 FINANCIAL RESULTS CONFERENCE CALL

1 EVENT: GWR SECOND QUARTER FISCAL YEAR 2011 FINANCIAL RESULTS CONFERENCE CALL TIME: 16H00 E.T. REFERENCE: CNW GROUP LENGTH: APPROXIMATELY 44 MINUTES DATE: AUGUST 11, 2011

2 OPERATOR: Good morning, ladies and gentlemen, thank you for standing by. Welcome to the GWR, Global Water Resources Corp., 2011 Second Quarter Results 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. If anyone has any difficulties hearing the conference, please press star, zero for Operator assistance at any time. I would like to remind everyone that this call is being recorded on Thursday, August 11 th, 2011, at 4:00 p.m. Eastern Time. I will now turn the conference call over to Carmel Rodriguez, Director of Communications and Client Administration for Global Water Resources Inc. Please go ahead. CARMEL RODRIQUEZ (Director, Communications and Client Administration for Global Water Resources Inc.): Good afternoon, everyone, and thank you for joining us on today's call. This morning, we issued our 2011 Second Quarter Financial Results by press release and a copy of those results is available on our website at www.gwfathom.com. Speaking today are Trevor Hill, President and Chief Executive Officer, and Cindy Liles, Executive Vice-President and Chief Financial

3 Officer. Mr. Hill will summarize the key events of the second quarter and provide his insights into the remainder of 2011, then Ms. Liles will review our financial results for Q2 2011. Then both Mr. Hill and Ms. Liles will be available for questions. Before we begin, I'd like to remind you that certain information presented today may include forward-looking statements. Such statements reflect the Company's current expectations, estimate, projections and assumptions. These forward-looking statements are not guarantees of future performance and they are subject to certain risks which could cause actual performance and financial results to vary materially from those contemplated in the forward-looking statements. For additional information on these risks, please read the Company's March 25 th, 2011 Annual Information forum under the heading ''Risk Factors''. Unless otherwise stated, all amounts discussed are in U.S. dollars. As we discussed during last quarter's conference call, in 2010, Global Water Resources' coordinated the formation of GWR Global Water Resources Corp., which we'll refer to today as ''the Company'', a Canadian company organized to hold an equity investments interest, and a

4 U.S. based company Global Water Resources Inc., referred to today as Global Water. I'll now turn the call over to Mr. Trevor Hill. Resources Inc.): Thank you, Carmel. Good afternoon, everyone. Let me start by saying that despite the chaos in the markets of late, I am very pleased with the progress we're making in all operating areas and remain extremely bullish on Fathom. The second quarter was about acceleration, preparing Global for the results of our market-making and selling activities during these past two quarters. Clearly, no one could have expected the or predicted the unprecedented federal budget process and the ripple effect it has had on States and Municipalities. Most municipalities we are dealing with this year have spent most of their fourth quarter with their fiscal year typically ending on June 30 th, trying to get their budgets approved. As I suggested last time we spoke, most of the projects we expect to close in 2011 were contingent on this budgeting process, even if the Fathom offering has been demonstrated to save money. Now, since 1 July, it has been a flurry of activity. Due to increased scrutiny on budgeting processes, cities are been extra careful and we're now seeing a higher number of RFP s for Fathom

5 then expected. In 2010, we responded to five RFP's representing 48,000 meters and one fourth. In Q2 of 2011, we responded to four RFP's, representing 169,000 meters. To date, we've been shortlisted for two and two remain in process. We've already responded to one RFP in Q3 for 19,000 metres and expect to respond to five more this quarter, representing an additional 34,000 meters. In Q4, 2011, we expect to respond to an additional seven RFP's, representing 92,000 meters. This activity excludes several communities that still may sole-source their requisition to Fathom. As you can see, the momentum is picking up significantly and we continue to see very positive signs in the market. First, the two critical drivers, budget constraint and water scarcity, have never been stronger. The federal budget issues are being magnified at the municipal levels, as such cities are contemplating outsourcing to save money like never before. Also, the unprecedented heat wave this summer has broken records across the Nation, which goes to the cost and sustainability of water resources everywhere. It's the combination of these drivers, plus a desire to provide better customer service, that is driving cities to make choices on service provisions that revolutionize the sector, whereas in years past, there was

6 virtually no talk of this market for water, now this topic seems to be making every conference agenda, and those not defined nearly to the state that Fathom has been; the talks help move the market toward us. To that end, we've been approached by AMI Technology manufacturers to partner with them as their exclusive partner and distributor, and prevent (inaudible) technology provider. We believe this kind of opportunity could broaden and accelerate our national market penetration. As it's foreshadowed the end of Q1, our selling process is working. We invested in the first quarter in a national sales organization to work with us to develop the scripts and processes such that we could scale the selling process nationally. Since we last reported, we've hired two new very experienced sales reps to handle the volume of cities that have expressed a significant interest in Fathom and we have begun the market preparation phase of our rollout for five additional regions. We believe these sales office additions will add significantly to our contracting capacity and ability to scale revenues over the next two or three years. Our marketing efforts have also been significantly increased. In the next two quarters, we will participate in four legal city conferences and at

7 each, we are finding specific breakout sessions for intendees. Participation with the legal cities has worked well for us in California. All the cities which were invited to our sessions have remained engaged with us, several moving towards a decision this year. As really every participant in these conferences is a potential buyer, unlike many trade-oriented conferences, we've made a significant investment in these organizations, including sponsorship, speaking engagements and breakout sessions for the intendees, the results of which have been significant. This quarter, we continue to invest in the platform. Our GIS-based presentment tools continue to attract attention with prospective cities as do added features in our billing and customer service areas. Fathom is the only CIS sorry, GIS-centric integrated billing platform in the market and its unique ability to (inaudible) volume, metric and financial information geospatially(phon), has provided Global with our first-mover advantage, which clearly demonstrates how cities can improve service levels while saving money. Despite the fact that we're investing in our platform and growing the business, the business units are both cash flowing nicely. We expect to continue to fund our growth and investing in activities from cash flow for

8 the foreseeable future and do not anticipate the requirement for new equity at this time. And now, turning to our regulated business. Growth is continuing in Phoenix, net in-migration and affordability continues to drive vacancy rates lower in our service territories. This is a good thing as it means a higher number of occupied homes. In fact, we have observed a steady decline in vacant homes since January, 2009, with this quarter seeing our lowest vacancy rates since the summer of 2008. Job process is also improving in Arizona, putting on jobs that are greater than twice the national average. As a result of these factors, our regulated utilities grew organically year-to-date and at annualized rate of 4.6%. We continue to believe Global service territories are positioned to attract the higher proportion of new service connections than other areas as a function of fitted infrastructure. We have capacity for 88,000 service connections and only have 39,000 connections currently connected. Additionally, we expect incremental revenue growth over the year term to be fuelled by the rates that were provided to us in the 2010 regulatory rates decision. The final increments to the phase in of rates will be in place January 1 st, 2012, which will generate an approximate $2

9 million of incremental revenue annually. We expect most of this incremental revenue to follow the bottom line. The Company's currently participated in formal workshop processes with the ACC, which we expect will ultimately result in a definition and a definitive accounting policy acceptable to the commission for ICFA's. You'll recall that ICFA's are Infrastructure Coordination of Financial Agreements designed to provide an alternative means of financing regional infrastructure. The most significant workshop occurred on June 24 th, 2011, wherein we provided the ACC a comprehensive perspective of the purposes, merits and accounting policies around ICFA's. The Company is optimistic that the workshop process could result in an approval to allow ICFA funds at a minimum for acquisitions and we continue to work with the ACC staff and commissioners to advance this initiative. I will now surrender the call over to Cindy, who will discuss our second quarter's operating results. Following Ms. Cindy's remarks, we will be available to answer any questions that anyone may have. Cindy? CINDY LILES, (Executive Vice-President and Chief Financial Officer, Global Water Resources Inc.): Right. Thank you, Trevor.

10 Since the financial information of the U.S. Company Global Water is not consolidated as a public company, our discussion today refers to the consolidated financial information of Global Water. As a reminder, unless otherwise stated, all amounts assessed are in U.S. dollars. We're excited about the improvement in our results in the second quarter. Revenues were up 81% year over year, including a 68% increase in a regulated business. While Fathom grew rapidly from only a $100,000 in revenues last year to over 2.3 million in this year's second quarter, EBITDA was up 67% for the quarter. We paired our net loss for the quarter at less than $800,000, compared to last year's net loss of about 2.6 million. I will now turn to the details. Consolidated revenues for the three months ending June 30 th, 2011, totalled 9.7 million, compared to 5.4 million for the same period in 2010, that's 81%, as I mentioned. Consolidated revenues for the six months ending on June 30 th, 2011, totalled 19.3 million, up 92% from the prior period, excluding nonrecurring revenues. Consolidated net loss for the three months ending June 30 th, 2011, totalled $800,000, compared with a net loss of 2.6 million for the same

11 period in 2010, excluding non-recurring charges. The net loss for the first six months of this year totalled 1.8 million, compared to 4 million for the same period in 2010. We use a non-gap measure adjusted EBITDA to analyze operating performance, which is based on operating income less depreciation, amortization and other non-referring items. Reconciliation details are in the press release. Adjusted EBITDA for the three months ending June 30 th, 2011, was 3.5 million, up 67% from 3.1 million for the same period in 2010. And for the six months ending June 30 th, 2011, adjusted EBITDA totalled 6.8 million, up 84% from 3.7 million for the same period in 2010. Just improving in profitability stems from those higher utility rates in our regulated division and strong growth in the Fathom business. I'll now discuss some specifics of the two businesses, starting with our unregulated business. Unregulated revenues, which come mainly from our Fathom customers, total 2.4 million in a three month ending June 30 th, 2011, a dramatic increase from just $125,000 in the three months ending June 30 th, 2010. Approximately 1.4 million of the increase is attributable to Fathom product implementation fees, compared to zero for 2010.

12 Recurring Fathom revenues increased to about $400,000 in the quarter, from about $100,000 last year. And for the six months ending June 30 th, 2011, unregulated revenues totalled 5.7 million, compared to $293,000 in the six months ending June 30 th, 2010. Approximately 3.3 million of this came from Fathom product implementations versus $50,000 in the first six months of 2010. Recurring Fathom revenues for the sixmonth period were $720,000, up from about 170,000 in the prior year. We've have about.9 million remaining out of 7.3 million in implementation fees currently under contract. We expect the remainder of those fees to be recognized as revenue during the third quarter of 2011. Additionally, as part of unregulated revenues, we recognize $530,000 and 1.1 million of revenue in the three and six months ended June 30 th, 2011, respectively, related to the sale of certain contractual rights, compared to zero in 2010. You'll remember, we had purchased these contractual rights from certain developers and then we sold the rights to a third party investor. We intend to pursue more of these opportunities for similar transactions. Moving over to the regulated business; revenues from the water utilities business for the three months ending June 30 th, 2011, increased 2.1 million or 40% to 7.4 million in 2011, compared to the same period in

13 2010. For the six months ending June 30 th, 2011, regulated revenues increased 3.8 million or 39% to 13.6 million in 2011, compared to the same period in 2010. Revenues rose in our water utility business (inaudible) about the rates we can charge customers and increases in assets service connections. We report utility connections by total service connections and active service connections, with active connections excluding vacant homes. Total service connections increased by about 72 since the first quarter, so 42,803. However, active service connections increased by 331 to 39,342, representing an annual growth rate of approximately 4.6%, indicating some improvement in the market, as Trevor had noted. As Trevor also mentioned earlier, we have been actively participating in ACC's workshop process that includes the review of ICFA's as they relate to the public interest. We remain optimistic that the commission may allow a portion of previous funds used for acquisitions to be reclassified back to rate base, which would increase our rate base and increase equity for the company. I'll now pass the call back to Trevor.

14 Resources Inc.): Thank you, Cindy. So in summary, I'm very happy with the point we are at right now. The team is in great shape; our customers are delighted; and our Fathom offering continues to attract attention and a growing pipeline of opportunities. Along with our customers and many in the financial markets, we've been surprised by the resurgence of budget complexity this year but we see this as mainly a timing issue and not a change in the business fundamentals. We've had a nice positive surprise on the growth rate in our regulated business and also feel hopeful that the ICFA matter will be concluded this year, which can provide a boost to our equity and rate base. That concludes our prepared remarks, thank you. Cindy and I are now available to answer questions. I'll now turn the call to the operator for the Q & A session. OPERATOR: At this time, I would like to mind everyone that in order to ask your question, you may press star, one on your telephone keypad. We'll pause for just a moment to compile a Q&A roster. And your first question comes from the line of Robert Catellier with Clarus Security. Your line is opened.

15 ROBERT CATELLIER: (Clarus Security): Okay. First, I wasn t quite able to jot down all the RFP timeline Q3-Q4 and a number of the accounts, so I'll circle back with you after the call for that. My question has to do, really, with the continuing state of government financing and the municipal bond market. So what prior implications do you see here from the bond market and the current state of government financing on all level on the Fathom sale cycle? So do you think the RFP's could execute or could you see some further delay there? Resources Inc): A two-part answer, Rob, thanks. First of all, when -- what we've seen in this market and we talked to our conduit underwriters this week; this chaos in the market has generally led historically to a flight to safety or a flight to yield, and what we are seeing is in fact slightly reduced prices on our off balance sheet financing, in fact what we provide a quote to municipalities and no pinch point in our ability to access funds on that side. So to go to the second part of your question: Does financing impact cities going to RFP? Really, we haven t seen any weakening in the municipal at least on the water side or the enterprise fund side of the municipal budgets at all in any of the areas that we're focused on.

16 ROBERT CATELLIER: (Clarus Security): Oh, so in your MD&A you refer to all the customers that you were in advantageous negotiations having their budgets approved. So presumably, that includes the funds to be allocated for their RFP's for Fathom type products? Resources Inc): That's correct. ROBERT CATELLIER: (Clarus Security): Okay. And, you know, I guess my concern would be that, you know, you've had a heightened level of complexity surrounding the budgeting process resulting and now perhaps a higher level of RFP's as opposed to unique procurement. I'm trying to assess the likelihood that that actually ends up in further delays in having them just hesitate to make a decision at all. Resources Inc): Yeah, you know. I think it's the if that was all coupled with material improvements in the market and a weakening of the drivers we see around the municipal utilities, then I think that possibly could be true, but quite the opposite is true. What I mentioned in previous calls, and I'll say it again: Municipal entities in the budgeting process is a lagging indicator and what that means is that they really have only just begun to feel the full pain of this downturn and they are now realizing that the step

17 function change in their revenues is not a transient effect but the new normal, and as such, they are now gearing for the new normal which is the primary driver. Remember that Fathom saves municipalities money and increases service levels, so we're getting things like, this week, utilities were calling us saying: Hey, you know, we've cut back to four days a week in California but our customers are complaining because they can't now pay their bills. Even our online capabilities help them in that regard. So the drivers for Fathom are strengthening and the budget complexity, although more scrutiny is going into the process and we see more RFP's, it does not weaken the drivers and the will for these municipalities to get things done. ROBERT CATELLIER: (Clarus Security): Arguably, it makes it stronger, right? Resources Inc.): Well, we say so. ROBERT CATELLIER: (Clarus Security): Yeah. And is this the case where the funds approved for the RFP process are lost if they don t in fact issue on procurement? I mean if they don t contract or the funds lost basically, from their budgets?

18 Resources Inc).: Well, I can, you know, I'm not sure if I can give you the blanket answer for that but what we've certainly seen is that when they go to get the allocation in their budget and approval, which has been a much harder fight this year, you can imagine that internally, the cities' enterprise funds fight for ensuring that their funds don t get pulled into the general revenue category. What we see is that when they finally apportion funds to projects like this then they make sure that they get allocated in that year. ROBERT CATELLIER: (Clarus Security): Right. Resources Inc.): So I would say that's largely true. ROBERT CATELLIER: (Clarus Security): Okay. And my final question has to do with your alluding to partnerships with meter providers. I, you know, I think that that could be an interesting way to market for the company. Do you see the main benefit there in addressing the decision makers or having, I guess, a national capability, a national type partner? Resources Inc.): Well, I think the benefits for Global could be many. I think what we're also seeing is that the technology manufacturers are starting to sometimes, in some cases, realize that their product, while

19 technologically interesting, doesn t always immediately offer a benefit to the end customer and that's what Fathom does; it takes the complexity of that data and boils it down into a customer-friendly output data that either utility managers or individual customers themselves can act on or actionable information at the end user. And so what we see is that this kind of partnership could accelerate their sales and our sales by bundling the technology that makes the data useful and the technology itself. For us, it probably has the capability of pulling us into areas where the technology may have already been deployed but the customers don t have access to it. So we think it provides a new channel to market, it provides an opportunity to increment technology applications that have already been put in place and it gives us profile as a leader, maybe the leader, in presentment technologies arising from AMI Technology. ROBERT CATELLIER: (Clarus Security): Okay, great; thanks. OPERATOR: Again, if you would like to ask a question, you may press star, one on your telephone keypad. Your next question comes from the line of Marco Pencak with GMP Securities. Your line is open. MARKO PENCAK (GMP Securities): Thank you, good afternoon. A couple of questions; you mentioned in your disclosure that you expect to

20 recognize the revenues for the implementation for (inaudible) in Q3. Can you tell me how much of the revenue roughly is left for those two customers that we should expect in Q3? CINDY LILES, (Executive Vice-President and Chief Financial Officer, Global Water Resources Inc.): Hey, Marko. Thank you for your question. Exactly, it's roughly $900,000 that's remaining of revenue that'll be recognized in Q3 off the contracts that we have signed. MARKO PENCAK (GMP Securities): Okay. And of the RFP's this year, you know, you mentioned the number you re pursuing in Q3 or responding to in Q4 and how many customers those might represent. Can you just again give us the sense of timing in terms of if you're successfully awarded, when you might how long it would be until you might see first revenue flow from those awards? Resources Inc.): Hey, Marko, it's Trevor. MARKO PENCAK (GMP Securities): Hi. Resources Inc): I can give you some sense of that. I think that the way cities like to operate, and I think some of this is learning on our part, especially now, in the new normal that I spoke of, but it appears that,

21 based on the activity that we say in Q2 or and the activity we've seen since the end of that quarter, that cities are now aggressively trying to get these processes, whenever they may be done, here in the third quarter. Now in our case, if we can get it finalized and contracted, which we think we will be able to do in several cases; that will lead to us immediately moving into implementation, in which case we expect to be able to recognize some revenue in Q4. One thing that we do here is that they want these projects finished and up and running and done by the end of their fiscal year next year. So I think most times, when they look at implementation like this, they expect it to take a year. Now we can do it faster because of some of our best practices that we put in place. So what we expect to happen is that this front end, albeit a little longer, will now accelerate a bit and we'll be in heavy contracting activity in the next call it 90 days, and we're gearing our implementation teams now to be able to take on, you know, several projects concurrently in the fourth quarter and then you'll see the revenue recognition arising out of that. MARKO PENCAK (GMP Securities): Okay. The--thank you for that. My next question has to do you were talking earlier or in your previous question relating with budgets and allocations and all that sort of stuff. But

22 my understanding, though, is that the way that your municipalities or the city managers are able to sort of divert that whole process is, if you will, with the use of taxes and police financing for these types of procurements. Now is that still the case or have you seen a change or can you just give me an update on that? Resources Inc.): Absolutely. So basically, what we see is that first of all, cities don't really operate on an ROI type model; they operate on a cash basis. And at least the cities that we're dealing with and the size we're dealing with are fixated right now on operating revenues and operating expenses, and so what happens is, that even though they might be spending $10 a month for (inaudible) meters and billing customers and managing remittance and managing cash and all of those pieces that we consolidate for them, to approve even a lower budget, let's call it $8, goingforward, it still means changes in personnel; changes in processes; changes in internal recordings and things of that nature; and so we're seeing their internal budget allocation methodology change to ultimately come to a lower projected cost structure for them going forward, and yes, it still includes the tax-exempt financing, no change there. In fact, we see cities really hungry for that unique offering that's bundled in Fathom, and it

23 is sort of surprising to me too when you think about why you'd have to go through a budgeting process to save money but you're irrespective of that. It seems to me that the process that they're following these days being extra careful. Does that make sense? MARKO PENCAK (GMP Securities): Sure, but so they're still going through the rigor, even though the funding may come from different sources is basically what you're saying? Resources Inc.): Yeah. I mean the funding is part of that $8, or whatever the number is. So from a cash basis, they can demonstrate now that they're gonna save money going forward and on a P&L basis, their mission has been to show decreased costs going forward, even though the financing is bundled into that cost structure, going forward. MARKO PENCAK (GMP Securities): Okay. And have you seen much of this type of financing actually happening in the municipalities that you're dealing with, for other procurements? Resources Inc.): You know, interestingly, as you probably know, cities are not deploying a lot of capital right now. It's picked up a little bit in the last couple of quarters for basically emergency-related work. Historically, a lot

24 of this kind of funding from municipalities has been on growth related work, which we see very little of. So we do see some, but most times, the quantitative savings that arise out of Fathom aren t as clearly demonstrated with other offerings, so yeah, we see cities going out to bonding for certain capital requirements far less than historically. MARKO PENCAK (GMP Securities): Okay. I just want to talk about liquidity for a second. Can you one of your big short-term obligations is your acquisition obligations of, I guess it's 11.9 million. When specifically do those come due? Resources Inc.): That particular obligation is due at the end of the first quarter. MARKO PENCAK (GMP Securities): Of 2012? Resources Inc.): 2012, yes, Sir. MARKO PENCAK (GMP Securities): Okay. Now I mean I guess the question then becomes: How do you expect to repay that particular item? Resources Inc.): Yes. We have a plan for that, Marko. Really, it's a multi-

25 stage plan. Ultimately, we already have, as you know, a revolving line of credit. Well, first of all, our projections show that we can likely carry that obligation with cash flow to loan from existing utility operations and remembering that there's rate increases, further increases coming in 2012, plus cash flows generated from Fathom. But beyond that, we have a line of credit with Wells Fargo that was put in place earlier this year, for $5,000,000 that we may have the opportunity to expand. We've been approached by many other financial institutions on the banking side since going public, interested in banking some of part of Global's operation. And even a couple of hybrid lenders have approached us recently; cash flowtype letters, with a very attractive financing. So we got a multi-faced plan in place for that; we're watching it closely, but I'll have clarity on which path we'll take by the end of this third quarter. MARKO PENCAK (GMP Securities): Okay. Thanks. Now... OPERATOR: We will just have one more question from Mr. Pentack and then we'll move on. MARKO PENCAK (GMP Securities): Okay, yeah. I just wanted as you implement a Fathom implementation; from a working capital point of view, do you I mean is there not a sort of, a commitment that you have or any investments that you have to make before you get recoup, or is

26 the lag there, the cash conversion cycle very, very short so really it's not that big an investment that you require? Resources Inc.): Yeah, it's a good point. The way we structure the contracts today, we've been able to positive cash flow them, so you can imagine that in a deal, particularly the ones that come with finance, all the funds for the whole project are in an escrow account on the day of contracting. So we're able to make progressive draws for the project in accordance to our progress, which are reflective of our cost but also on our profits on that implementation. So, positive cash flow on the implementation and positive cash flow on the operating side. So really, there's no working capital requirement for Fathom at this time. OPERATOR: And your next question comes from the line of Ian Thorpe with CIBC World Markets. Your line is open. IAN THORPE, (CIBC World Markets): Thanks and good afternoon. So just turning, if I can turn, (inaudible), the numbers you came out earlier. You talked about Q2 just zoning on that for a moment; you have four RFP's that you were supplied (phon) to and I think you said 169,000 customers.

27 So I'm just wondering, first of all, is there one particular RFP in that group that is inordinately large compared to the others? Resources Inc.): Yes, Ian, it's Trevor; good afternoon. Yes. IAN THORPE, (CIBC World Markets): Okay. And so with this, are you including these in your wide hot list and then kind of where do we stand in terms of the number of customers and end points for the wide hot list? Resources Inc.): Well, I think we used that term in the past and I think that we're trying to make our look into the future quarters a little bit more understandable from a where we're moving to on our various contracting activities. But what I can when you look at those numbers later, after this call, you'll see that the numbers that we talked about represent about 314,000 meters, which is a number that has grown in each of the last reporting periods. About half of those are CIS only or building opportunities, really. Interestingly, we're gaining traction in two different submarkets of this total market. The other half relate to AMI technology and each of them have, between them, various degrees of interest in the asset management platform.

28 So I think the way we think about mapping our historic white hot list to this new approach is in that way, Ian. IAN THORPE, (CIBC World Markets): Okay, thanks. So essentially, the numbers that you've given before in terms of, you know, number of customers; those would be included in how you're currently describing your order backlog or your RFP backlog, if you will? Resources Inc.): Yes, and really, all of those RFPs map directly to the white hot list of the customers previously. IAN THORPE, (CIBC World Markets): Okay; good. And then have you seen any formal declines or any type of attrition in the people on those lists or is it really just all of the processes continuing to move ahead? Resources Inc.): We really haven't seen any attrition. What we do see is some time inserted into the process but, like I said before, these cities continue to move these processes forward, sometimes it's aggravatingly slowly or not quite what they represent, but they are moving forward and really, we're seeing no exits from the list. IAN THORPE, (CIBC World Markets): Okay. And then, in terms of the RFP process itself; I wonder if you could talk a bit about the due

29 diligence that the that this respective cities do in terms of, I guess, proving the credentials of Global and Fathom, you know, giving you our comparatively new or comparatively small. Do they need to see a little bit more size, perhaps, through a partnership with an AMI provider or are they able to gain comfort around the current composition of the company? Resources Inc.): That's a great question. As we speak today, we have a city and their entire senior staff in our offices and that's not uncommon. So the cities are taking this decision very seriously, and like I say, when I talk about market-making and unprecedented and revolutionary, I use these words for a purpose. Cities have historically been reticent to outsource critical back office processes. So to make light of that would be a stretch. But the good news is that Global is a utility. So even though the perception might be new or new to the market, we have been billing 40 or 50,000 bills a month for a long time. Now we're very good at this process; we have very, very good insight into how utility billing actually works. And so when they come here and they see our call center and they see the volumes that we're producing, generally, we're bigger but for the one case you been drilled on earlier; generally, we're bigger than the cities themselves and that gives them a lot of comfort. They see that we actually

30 do all of these things and then some, for ourselves. And really, if we have one sustainable competitive advantage that stands out amongst all of them, it's that. And when you ask about being supported by AMI vendors; I think that's great as far as getting, you know, warranty protection and, you know, we work with the cities to make sure we got great warranty support around the technology. But the balance sheets of those companies really haven t come into play nearly to the effect that Global's presence in the industry has differentiated us. IAN THORPE, (CIBC World Markets): Thanks; okay, helpful. And then if I may, just one more question on the regions and an apology if you did mention these, but you mentioned five new regions, which would be, I guess, your next step in your marketing plan. Is that going to be, you know, two plus two plus one or is it more kind of an introduction into five brand new markets at once? So how will you kind of stepwise grow that marketing effort around your current location? Resources Inc.): Well, it's a great question, Ian. So much activity occurring in California that we've broken California into two pieces so that the volume is supportable by two sales representatives located in that

31 region full time. The other thing of note is and I m sure you've read that Texas is in some critical state right now with respect to its water availability and we are getting pulled into Texas. You know, we've done some missionary work in Texas in 2010 and then in 2011 as well. So that's another area that we see significant opportunity arising and there are a lot of municipalities in Texas, more than 500. So drivers are strengthening; the budget situation there is worsening; scarcity is significantly worsening. You probably saw in the news this morning that Houston is going to mandatory water restrictions next week, to give you some flavour for it. So Texas will be another is another region. And then, we are now also getting pulled into Washington, certain areas in Washington, Oregon and Arizona. So that's the total of the regions that we are starting to stand up those new market penetration activities. IAN THORPE, (CIBC World Markets): I think that's it for me right now. I appreciate the details. OPERATOR: And again, if you would like to ask a question, you may press star, one on your telephone keypad. And there are no further questions at this time. I turn the call over to our presenters.

32 Resources Inc): Okay. Thank you, Operator. I appreciate the questions. I would like to thank all those who participated in the call this afternoon and your interest in Global and we look forward to speaking with you again at the end of the third quarter. Thanks, everyone. CINDY LILES, (Executive Vice-President and Chief Financial Officer, Global Water Resources Inc.): Thank you. OPERATOR: And this concludes today's conference call. You may now disconnect. *****