Slide 1: Welcome to the Annual Meeting of Shareholders May 20, 2014
Welcome to the Annual Meeting of Shareholders May 20, 2014
Slide 2: Forward-Looking Statement
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
Slide 3: Financial Highlights
FINANCIAL HIGHLIGHTS 2
Slide 4: Company Overview
Company Overview Incorporated: 1897 Market Cap: ($millions): $320.8 Million 52 - Week Range: $22.46 - $19.05 Total Shares Outstanding: 16.0 Million Dividend Yield: 3.75% Dividend Rate/Share: $0.76 Number of Employees: 279 Institutional Ownership: 40% 3
Slide 5: Middlesex Water owns and operates regulated water and wastewater systems
Middlesex Water owns and operates regulated water utility and wastewater systems in New Jersey, Delaware and Pennsylvania. 4
Slide 6: Revenues ($Millions)
Revenues ($Millions) 2011 2012 2013 $102.1 $110.4 $114.8 5
Slide 7: Net Income ($Millions)
Net Income ($Millions) 2011 2012 2013 $13.40 $14.40 $16.60 6
Slide 8: Earnings Per Share
Earnings Per Share 2011 2012 2013 $0.84 $0.90 $1.03 7
Slide 9: Return on Equity
Return on Equity 2011 2012 2013 7.6% 8.00% 8.90% 8
Slide 10: Utility Plant ($Millions)
Utility Plant ($Millions) 58.4 82.7 96.3 118.3 133.7 150.2 158.5 166.9 182.5 188 197.7 220.7 235.6 243.4 252.2 264.8 279.9 295 316.5 332.1 346.9 359.2 0 100 200 300 400 500 600 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 New Jersey Delaware 9
Slide 11: Efficiency Performance ($Millions)
Efficiency Performance ($Millions) Year Ended December 31, 2013 2012 2011 Operating Revenues $114.8 $110.4 $102.1 O & M Expenses $ 60.7 $ 60.5 $ 56.6 O & M Efficiency Ratio 47.1% 45.2% 44.6% Regulated Efficiency Ratio 50.6% 48.8% 47.8% 10
Slide 12: Performance – Changes (in $Millions)
Performance – Changes (in $Millions) Hess Corp. $ 1.6 $ 2.6 Borough of Sayreville $ 0.8 $ 3.0 Post - retirement M edical Plan $(2.6) $(2.6) Interest Savings on Refinancing $(0.9) $(0.9) (Favorable)/Unfavorable $ (1.1) $ 2.1 2013 2014 11
Slide 13: Performance – Changes (in $Millions)
Performance – Changes (in $Millions) Hess Corp. $ 2.6 Borough of Sayreville $ 3.0 Post - retirement M edical Plan $(2.6) Interest Savings on Refinancing $(0.9) Valuation Changes – All Benefit Plans $(2.6) ( Favorable) $(0.5) 2014 12
Slide 14: Q1 Performance
Q1 Performance ($Millions except per share amounts) First Quarter Ended March 31, 2014 2013 Operating Revenues $27.2 $27.0 O & M Expenses $15.4 $15.4 Net Income $ 3.2 $ 3.2 Diluted Earnings Per Share $ 0.20 $ 0.20 13
Slide 15: Rate Activity
Rate Activity Amount Filed - Middlesex $10.6 Million November 8, 2013 - Tidewater $ 3.9 Million November 25, 2013 Effective - Middlesex DSIC $0.3 Million November 5, 2013 - Middlesex DSIC $0.3 Million April 29, 2014 - Middlesex PWAC $0.1 Million May 1, 2013 - Tidewater DSIC $0.1 Million July 1, 2013
Slide 16: Distribution System Improvement Charge
Distribution System Improvement Charge DSIC: A rate mechanism that allows water utilities to recover investment in improvements to their water distribution system between base rate proceedings. NEW JERSEY DSIC Program in place since 2012. June 2014 – 2 nd Foundational Filing DELAWARE DSIC Program in
Slide 17: 2014 Construction Program – $31.4 Million
2014 Construction Program – $31.4 Million Other Infrastructure Needs Technology MWC Renew Program Plant Improvements Distribution System $1.3 $1.9 $4.0 $10.2 $14.0 16
Slide 18: Construction Funding
Customer Advances Reinvestment Plan Long-term Loans SRF Loans Net Cash Flows $0.4 $1.3 $9.0 $5.0 $ 15.7 Total Funding - $31.4 Million Construction Funding 17
Slide 19: Financing: NJSRF Loan and Tidewater Long-Term Debt
May 2014 - $4.0 million through NJSRF Program for Middlesex RENEW Project Effective interest rate - 1.0% Q3 2014 Tidewater – Up to $20.0 Million Long - Term Debt 18
Slide 20: Dividend History
DIVIDEND HISTORY $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 19
Slide 21: Operations
OPERATIONS 20
Slide 22: Highlights
Highlights ▪ Crews Endure Worst Winter Ever ▪ RENEW ▪ Disinfection By - Products Regulation ▪ Delaware Operations Table Top Exercise ▪ E - Business Suite Technology Upgrade ▪ Server Room Expansion ▪ Canal Breach Response 21
Slide 23: Service reliability never takes a snow day
Service reliability never takes a snow day! We work to ensure the protection of public health, safety and the environment. 22
Slide 24: Main Breaks Wreak Havoc in Freezing Temps
Main Breaks Wreck Havoc in Freezing Temps 24 23
Slide 25: RENEW Program
RENEW Program - $4 Million Investment in South Amboy in 2013 - $3.8 Million Upgrade Planned in Woodbridge in 2014 24
Slide 26: Maintaining Reliability Through Investments in Infrastructure
Maintaining Reliability Through Investments in Infrastructure 25
Slide 27: Stage 2 Disinfection By-Products Rule
Stage 2 Disinfection By - Products Rule x Builds upon earlier rules that addressed disinfection byproducts to improve drinking water quality and provide additional public health protection x Tightens compliance monitoring requirements for two groups of DBPs, trihalomethanes and haloacetic acids 26
Slide 28: Emergency Planning
Delaware employees participate in a simulated crisis management tabletop exercise as reviewers take notes for follow up emergency response/action plans. Emergency Planning 27
Slide 29: Spring 2014 Systems Upgrade
Financial HR Procurement Reporting Spring 2014 UPGRADE 28
Slide 30: Data Center Upgrade
Data Center Upgrade ▪ Helps to ensure power resiliency to support critical business processes ▪ Data expansion capability to support future growth ▪ Security 29
Slide 31: Breach in the Delaware & Raritan Canal
Breach in the Delaware & Raritan Canal The D & R Canal serves as a major water source for Middlesex Water Company. 30
Slide 32: Engineering Honors
Engineering Honors G. Christian Andreasen Director of Engineering George Warren Fuller Honoree AWWA is the oldest and largest educational and scientific association for drinking water professionals. 31
Slide 33: Our growth strategy in 2013 leveraged water, wastewater and energy
“Our growth strategy in 2013 leveraged the unique relationship between water, wastewater and energy.” 32
Slide 34: Growth areas: contract operations, acquisitions, renewable energy
Contract Operations/Public Private Partnerships Renewable Energy/Industrial Applications Emergency Home Repair Service Plans Military Base Acquisitions Regulated Water and Wastewater Acquisitions 33
Slide 35: Growth strategy: water, wastewater and energy
iODLESEX |ATER COMPANY Our growth strategy in 2013 leveraged the unique relationship between water wastewater and eneroy These &é: tesources ae inherently interconnected, impacting al segments of ox society We wil Continueto elyon au strengths, ou strong financial base, technical experience and Geci
Slide 36: Biogas System at Ridgewood Water Pollution Control Facility
Biogas System at the Village of Ridgewood Water Pollution Control Facility 35
Slide 37: Liquid waste receiving station increases biogas production
Liquid waste receiving station increases biogas production 36
Slide 38: 2roSeries-M }
M13 2roSeries-M } By
Slide 39: Groundbreaking for Monmouth County Leachate Pre-Treatment Facility
Groundbreaking for Construction of Monmouth County Leachate Pre - Treatment Facility Agreement to design, construct and operate a leachate pre - treatment facility at the Monmouth County Reclamation Center in Tinton Falls, NJ. 38
Slide 40: Agreement with U.S. Department of Defense for Dover Air Force Base
Agreement with U.S. Department of Defense for Privatization of Water System of Dover Air Force Base (Photo Courtesy of U.S. Air Force) 39
Slide 41: Dover Air Force Base water system agreement terms
▪ 50 - year agreement to provide potable water service ▪ TUI to own and maintain all DAFB water utility assets and make necessary capital improvements ▪ Planned integration into Tidewater’s regulated utility operations ▪ Received regulatory approval (Photo Courtesy of U.S. Air Force) 40
Slide 42: Dover Air Force Base overview
Dover Air Force Base executes hundreds of missions and provides 25% of the Nation’s strategic airlift capability, projecting global reach to over 100 countries in the world. Photo Courtesy of U.S. Air Force 41
Slide 43: Wastewater System Acquisition
Wastewater System Acquisition 42
Slide 44: Plantations Development wastewater purchase
In October 2013, TESI closed on the DEPSC approved purchase of the wastewater utility assets of the Plantations Development in Delaware. 43
Slide 45: Industry Observes World Water Day 2014 at NASDAQ
Industry Observes World Water Day 2014 at NASDAQ 44
Slide 46: Outreach & Education
Outreach & Education 45
Slide 47: Strong Community Participation
Strong Community Participation 46
Slide 48: Honors & Awards
Honors & Awards Best Tasting Water in Delaware 47
Slide 49: Management Transition
Management Transition Kenneth J. Quinn Jay. L. Kooper 48
Slide 50: Strategy For Growth & Success
▪ Build and maintain trust in all of our internal and external interactions ▪ Facilitate quality of life and economic stability and growth for current and future customers by providing a comprehensive suite of sustainable water and wastewater solutions ▪ Actively pursue sensible growth opportunities
Slide 51: Questions?
Questions? These slides will be archived on the Investor Relations section of our website at www.middlesexwater.com under Presentations. NASDAQ:MSEX 50