Middlesex Water Company · NASDAQ:MSEX
Middlesex Water — Shareholder Meeting (May 2011)
49 slides from Middlesex Water's shareholder meeting presentation, May 25, 2011
Slide 1: 2011 Annual Meeting of Shareholders
2011 Annual Meeting of Shareholders May 24, 2011
Slide 2: Forward Looking Statement
Certain matters discussed in this presentation are forward- looking statements intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the
Slide 3: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 4: $1.00 $0.96 $0.89 $0.82 $0.87 $0.80 | : $0.60 $0.40 $0.20 - ~ .
$1.00 $0.96 $0.89 $0.82 $0.87 $0.80 | : $0.60 $0.40 0 0 $0.20 - ~ . Bee S- 1 1 2006 2007 2008 2009 2010 Pitti
Slide 5: Revenue Growth
Revenue Growth ($ Millions) 13% growth in revenues
Slide 6: Record Performance
Record Performance (Millions except per share amounts) Year Ended December 31, 2010 2009 Operating Revenues $ 102.7 $ 91.2 Operating Expenses $ 76.1 $ 71.0 Net Income $ 14.3 $10.0 Diluted Earnings per Share $ 0.96 $ 0.72 Net income up 43.6%
Slide 7: Timely and Adequate Rate Increases
Timely and Adequate Rate Increases - Middlesex - $7.8 Million base rate increase Effective March 17, 2010 - Tidewater - $0.4 Million DSIC rate increase Customer Consumption - Customer Growth - Delaware - Economy - Water Use Trends Operating Costs Factors Impacting 2010 Financial Performance
Slide 8: Performance
Performance (Millions except per share amounts) First Quarter Ended March 31, 2011 2010 Operating Revenues $ 24.0 $ 21.7 Operating Expenses $ 19.2 $ 18.4 Net Income $ 2.6 $ 1.6 Diluted Earnings per Share $ 0.17 $ 0.11
Slide 9: Factors Impacting 2011 Financial Performance
Factors Impacting 2011 Financial Performance - Middlesex - 2010 Rate Increase Operating Costs - Labor and Benefits (Higher) - Water Production (Lower) - Uncollectible Accounts (Higher)
Slide 10: @ New Jersey/PA
600 400, 300 200 100 @ New Jersey/PA @ Delaware 2000 205.8 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Slide 11: 2011 Construction Program ($ Millions)
2011 Construction Program ($ Millions) 2011 Distribution System: $ 8.5 Technology: $ 2.3 MWC RENEW Program: $ 5.0 Plant Improvements: $ 5.2 Other Infrastructure Needs: $ 1.9 Total: $22.9
Slide 12: 2011 Construction Funding ($ Millions)
2011 Construction Funding ($ Millions) SRF Loans: $ 7.8 Short Term loans $ 2.0 Reinvestment Plan $ 1.4 Customer Advances $ 1.7 Net Cash Flows $10.0 TOTAL FUNDING $22.9
Slide 13: Dividends (Annual Rate)
Dividends (Annual Rate) 2010 2009 2008 2007 2006 $0.73 $0.72 $0.71 $0.70 $0.69 Ø Quarterly dividends paid since 1912 Ø Increased dividends for 38 consecutive years Ø Current Dividend Yield: 4.1% Dividend Achiever
Slide 14: $0.75 $0.65 $0.55 $0.45 $0.35 $0.25
$0.75 $0.65 $0.55 $0.45 $0.35 $0.25
Slide 15: Comparison of Five Year Cumulative Total Return
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among Middlesex Water Company, The Dow Jones Wilshire 5000 Index and a Peer Group *$100 invested on 12/31/05 in stock or index-including reinvestment of dividends. ** Peer group includes American States Water Company, American Water Works, Inc., Aqua Ame
Slide 16: Operating Highlights
OPERATING HIGHLIGHTS
Slide 17: Replaced 5,365 feet of 104-year old cast iron pipeline
Replaced 5,365 feet of 104-year old cast iron pipeline under the Raritan River in Middlesex County, NJ
Slide 18: Marsh Main Project
Water main replacement project Voted “Project of the Year” and set World Record for Longest known 24-inch Fusable PVC Pipe Installation using Horizontal Directional Drilling Special Focus: ü Pioneering Design ü Strategic Planning ü Contingency Planning ü Risk Management ü Experienced Partners Marsh
Slide 19: Project Lauded for its Technical Complexity and Teamwork
Project Lauded for its Technical Complexity and Teamwork ü AWWA OP Flow ü Trenchless Technology ü Trenchless International ü ASCE Civil Engineering Magazine ü Utility & Transportation Contractors Assn.
Slide 20: Perth Amboy 91-Year old Reservoir Rehabilitation
Perth Amboy 91-Year old Reservoir Rehabilitation
Slide 21: Million Gallon Reservoir
40 Million Gallon Reservoir
Slide 22: Ground View
Ground View
Slide 23: Aging Infrastructure: A National Issue
Aging Infrastructure: A NATIONAL ISSUE RENEW…part of the solution! RENEW 2011 (Cast iron water main cleaning and lining project) • Year 15 of a 25-Year Program • $4.0 million investment to replace water mains, valves and fire hydrants • 17,500 feet of 6-, 8 and 10--inch main in the City of South Amb
Slide 24: Southern Shores Treatment Plant Rehabilitation
Southern Shores Treatment Plant Rehabilitation
Slide 25: Water Quality…Our customers depend on it!
Water Quality…Our customers depend on it!
Slide 26: Using Technology to Improve Business Processes - ERP
General Ledger Work and Asset Management Accounts Payable Mobile Workforce Management Procurement Time and Labor Management Human Resources Customer Care and Billing COMPLETED IN PROGRESS Using Technology to Improve Business Processes - ERP Benefits • Improved operating efficiencies • Enhanced servi
Slide 27: Serving Our Customers and Our Communities
SERVING OUR CUSTOMERS AND OUR COMMUNITIES
Slide 28: Our Strength… One Enterprise Offering Many Solutions
Ownership/Operation of Assets Public/Private Partnerships Our Strength… One Enterprise Offering Many Solutions
Slide 29: (NJ and DE)
(NJ and DE) 160,000 140,000 - 120,000 100,000 80,000 60,000 40,000 20,000 0 ™ Delaware | m New Jersey. 193, 000 fl 24,000 2,000 89,000 80,000 mm82,000 Ma83,0001 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 aa
Slide 30: Regulated vs. Non-Regulated Customers
Regulated vs. Non-Regulated Customers
Slide 31: Regulated Business vs Non-Regulated Contract Services
@ Regulated Business @ Non-Regulated Contract Services
Slide 32: 40,696 Acres Approved Since 2005
40,696 Acres Approved Since 2005 11,249 10,072 9,704 8,805 4,413 866 | i 2005 2006 2007 2008 2009 2010
Slide 33: Investing in Facilities
Investing in Facilities
Slide 34: Milton Plant Dedication
Milton Plant Dedication DE Governor Jack Markell congratulates company officials upon touring Tidewater’s upgraded Wastewater Treatment facility in the Town of Milton, DE.
Slide 35: Providing Sustainable Wastewater Solutions
Providing Sustainable Wastewater Solutions Wandendale
Slide 36: Informing the Public about the Benefits of Wandendale
Informing the Public about the Benefits of Wandendale
Slide 37: Public Education
Public Education Careers in the Water Industry Prescription Drug Take Back Day 2010 Water Quality Report Facility Tours Wise Water Use
Slide 38: Involved in our Local Communities
Big Wheels Day Walk-a-thons Mayor’s Healthy Challenge Cook-Off Bowl For Hunger Sponsorships Involved in our Local Communities s
Slide 39: Eco-Ventures Summer Day Camp
Eco-Ventures Summer Day Camp Meeting with local fire professionals Raising funds for local food banks
Slide 40: Partnering with Local Schools
Partnering with Local Schools Working with students and serving as Principals for the Day
Slide 41: Receiving a Proclamation from the Mayor of Edison
Receiving a Proclamation from the Mayor of Edison for National Drinking Water Week 2011 Honoring Winners of the Company’s 2011 Student Contest
Slide 42: Corporate Governance
Corporate Governance Lead Director Role Established in 2010 Jeffries Shein, 21- year Director Named to Fill that Role in 2010
Slide 43: Board Changes
Board Changes Annette Catino President and CEO of QualCare Alliance Networks, Inc. John P. Mulkerin Retired, Former President and CEO, First Sentinel Bancorp, Inc.
Slide 44: Board Changes (New Directors)
Board Changes (New Directors) Amy B. Mansue President and CEO of Children’s Specialized Hospital James Cosgrove, Jr. P.E. Principal, Omni Environmental LLC
Slide 45: Special Thanks to J. Richard Tompkins
Special Thanks to J. Richard Tompkins Retiring after Three Decades of Service to the Company and to the Industry Chairman of the Board 1990-2010 President from 1981-2001 J. Richard Tompkins Former Chairman and President of Middlesex Water Company
Slide 46: 2011 Strategy for Shareholder Value
2011 Strategy for Shareholder Value ü Seek organic customer growth and utility infrastructure growth ü Pursue acquisitions at reasonable prices ü Continue Regulated and Non-regulated business and contracts ü Consider complementary products and services ü Prudently invest in regulated utility infrast
Slide 47: What the Analysts Are Saying…
What the Analysts Are Saying… “Overall, we view Middlesex as a well run utility, offering investors multi -state exposure and associated growth opportunities outside its core operating utility.” (Janney Montgomery Scott LLC, May 9, 2011) “At 4.0%, Middlesex boasts the highest dividend yield within t
Slide 48: Why Middlesex Water?
Why Middlesex Water? v Stable with long-term growth potential v Growing reputation for delivering sound, technical water and wastewater solutions v Experienced management team and active industry leader v Honest and ethical problem solver v History of dividend growth
Slide 49: Thank you for your interest, confidence and support!
Thank you for your interest, confidence and support! A Provider of Water, Wastewater and Related Products and Services