Middlesex Water Company · NASDAQ:MSEX
Middlesex Water — Shareholder Meeting (May 2013)
49 slides from Middlesex Water's shareholder meeting presentation, May 22, 2013
Slide 1: Welcome to the Annual Meeting of Shareholders
Welcome to the Annual Meeting of Shareholders May 21, 2013 A Trusted Provider for 115 Years
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 Financial Highlights
Slide 4: Overview
Overview Incorporated: 1897 Market Cap: ($millions) $308.6 52 - Week Range: $17.48 - $20.06 Average Volume: (3 months) 36,081 Shares Outstanding: (millions) 16.1 Dividend Yield: 3.8% Annualized Dividend: $0.75 Number of Customers: 141,000 Number of Employees: 279
Slide 5: Regulators of MWC and securities oversight
MWC Delaware Public Service Commission New Jersey Board of Public Utilities Pennsylvania Public Utilities Commission Water Quality ▪ USEPA ▪ NJDEP ▪ DNREC ▪ PADEP Securities ▪ NASDAQ ▪ SEC Regulation (Rates)
Slide 6: Operating Revenues by Segment
89% 11% 0% 0% Regulated Services Non-Regulated Services Operating Revenues by Segment MSEX owns and operates regulated water utility and wastewater systems in NJ, DE and PA
Slide 7: Revenues ($Millions)
Revenues ($Millions) 2008 2009 2010 2011 2012 91.0 91.2 102.7 102.1 110.4
Slide 8: Earnings Per Share
Earnings Per Share 2008 2009 2010 2011 2012 $0.89 $0.72 $0.96 $0.84 $0.90
Slide 9: Net Income ($Millions)
Net Income ($Millions) 2008 2009 2010 2011 2012 $ 12.2 $ 10.0 $ 14.3 $ 13.4 $ 14.4
Slide 10: Utility Plant ($Millions)
33.9 44.7 58.4 82.7 96.3 118.3 133.7 150.2 158.5 166.9 182.5 188.0 205.8 214.2 220.7 235.6 243.4 252.2 264.8 279.9 295 316.5 332.1 346.9 0 100 200 300 400 500 600 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 New Jersey Delaware Utility Plant ($Millions)
Slide 11: Performance 2012 vs 2011
Performance ($Millions except per share amounts) Year Ended December 31, 2012 2011 Operating Revenues $ 110.4 $ 102.1 O & M Expenses $ 60.5 $ 56.6 Net Income $ 14.4 $ 13.4 Diluted Earnings per Share $ 0.90 $ 0.84
Slide 12: Rate Activity 2012
Rate Activity 2012 State Amount Approved New Jersey - Middlesex $8.1 million July 2012 Delaware - Tidewater $3.9 million June 2012 - TESI $0.6 million June 2012 Pennsylvania - Twin Lakes $0.1 million March 2012
Slide 13: Other Performance Factors
Other Performance Factors x Water Use Trends Customer Demands x Customer Growth Delaware x O & M Costs Labor & Benefits
Slide 14: Performance First Quarter 2013
Performance ($Millions except per share amounts) First Quarter Ended March 31, 2013 2012 Operating Revenues $ 27.0 $ 23.5 O & M Expenses $ 15.4 $ 14.4 Net Income $ 3.2 $ 1.8 Diluted Earnings per Share $ 0.20 $ 0.11
Slide 15: Rate Activity 2013
Rate Activity 2013 State Amount Timing New Jersey - Middlesex Base Rate Filing (TBA) Filing Q4 2013 - DSIC Filing $0.3 million Filing Q3/Q4 2013 - PWAC $0.1 million Effective May 2013 - Pinelands Base Rate Filing $0.3 million Eff. March 2013 Delaware - Tidewater DSIC Filing $0.1 million Eff. January
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 November 2012 – MSEX filed Foundational Filing with NJBPU February 2013 – Foundational Filing a
Slide 17: Performance - Changes
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) 2013 2014
Slide 18: Other Infrastructure Needs
Other Infrastructure Needs Technology MWC Renew Program Plant Improvements Distribution System $1.2 $2.6 $4.0 $5.1 $8.9 Construction Program - $21.8 Million
Slide 19: Construction Funding
Construction Funding Customer Advances Reinvestment Plan Short Term Loans SRF Loans Net Cash Flows $1.2 $1.6 $3.5 $5.0 $ 10.5 Total Funding - $21.8 Million Construction Funding
Slide 20: Long-Term Debt
▪ November 2012 - Refinanced $57.5 million through the NJEDA ▪ Interest rate - 2.70%/4.35% ▪ Annual Savings - $0.9 million ▪ NPV Savings - $9.2 million ▪ May 2013 - $4.0 million issued through NJSRF Program ▪ Effective interest rate - 1.0% Long - Term Debt
Slide 21: Comparison of Five Year Cumulative Total Return
** MSEX, AWR, ARTNA, CWT, CTWS, SJW, YORW COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
Slide 22: Dividend History
DIVIDEND HISTORY $0.25 $0.35 $0.45 $0.55 $0.65 $0.75 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12
Slide 23: Operations Highlights
FINANCIAL HIGHLIGHTS Operations Highlights
Slide 24: Superstorm Sandy
SUPERSTORM SANDY…SUPERSTORM SANDY… The MSEX enterprise is expanding its emergency preparedness plans to anticipate weather events of longer duration, larger areas of impact and increasing frequency.
Slide 25: Post Sandy Recovery and Resiliency Planning
POST SANDY…RECOVERY AND RESILIENCY PLANNING Middlesex System : Increasing number of generators and exploring diversified fuel usage capabilities Perth Amboy : Rebuilding wastewater system lift stations flooded by the storm Avalon: Rebuilding lift stations and storm water pump stations impacted by th
Slide 26: Working to Ensure Water Quality
Working to Ensure Water Quality During state - wide emergencies, information is shared with the ROIC where members of the NJBPU, State Police and NJDEP are stationed to effect a rapid response to any water quality and operational incidents.
Slide 27: Keeping Customers Informed in Emergencies
Keeping Customers Informed in Emergencies MWC Customer DIRECTAlert Registration Newspaper/Radio/Television Municipal Reverse 911 Municipal Websites Company Website Service Alerts Update Center Phone Bank Messaging Company Facebook Page Company Twitter Feed
Slide 28: RENEW 2013 Water Main Cleaning and Lining Project
RENEW 2013 Water Main Cleaning and Lining Project • Year 17 of a 25 - Year Upgrade Program • $4.0 million investment to replace water mains, valves and fire hydrants in the City of South Amboy • Clean and line 11,500 linear feet of main • Funded by New Jersey Environmental Infrastructure Trust Loan
Slide 29: Enhancing Service to our Customers
Enhancing Service to our Customers Knowing the location of our crews enables field personnel to respond to customer inquiries in a more timely and efficient manner.
Slide 30: New Operations Center in Sussex County
New Operations Center in Sussex County will better meet the needs of residents in southern Delaware
Slide 31: Our Strategy, Our People and Our Partners
Our Strategy, Our People and Our Partners
Slide 32: Our Mission and Vision
We earn our reputation as a trusted water provider with every drop of high quality water that we deliver. Our Mission To provide service in the water, wastewater and related fields in a safe, reliable and efficient manner Our Vision To be the preferred choice for individuals, developers and municipa
Slide 33: Strategy for Building Shareholder Value
▪ Organic, customer and utility infrastructure growth Acquisitions at reasonable prices Regulated and non - regulated businesses and contracts Complementary products and services Invest in regulated utility infrastructure that benefits our customers Recover costs through timely rate filings Focus on
Slide 34: Managing Risk
Managing Risk Safety Training In 2012 Risk Management Oversight was formally added to the Corporate Governance and Nominating Committee’s responsibilities. Examples: • Strategic Risks • Operational Risks • Financial Risks • Brand & Reputation • Employee Health & Safety
Slide 35: Contract Operations
Borough of Avalon, NJ ▪ Utility Service Affiliates operates and manages the Borough’s water, wastewater and storm water collection systems ▪ Work includes day - to - day operations, billing, collections, customer service, emergency response and capital projects funded by Avalon. Sunoco Logistics Par
Slide 36: Ridgewood Green LLC Project
RIDGEWOOD GREEN LLC PROJECT WITH NATURAL SYSTEMS UTILITIES AND VILLAGE OF RIDGEWOOD, NJ
Slide 37: Turnkey Renewable Energy Services
Turnkey Renewable Energy Services PROJECT STATUS x Ultraviolet system install complete x Solar installations complete x Wastewater treatment plant construction complete x Training of Ridgewood employees in progress x Permits filed and issued x Full production of energy to commence in May 2013 ▪ Midd
Slide 38: USA LineCare and HomeServe
USA LineCare contracts transferred to HomeServe in August 2011 USA earns a service fee for billing, cash collection and other administrative matters Home emergency repair plans include: Water Line, Sewer/Septic Line, Water Heater, Plumbing and Drainage As of January 2013: - Active Contracts: 32,000+
Slide 39: The Plantations Lagoon
The Plantations Lagoon at Plantations Community in Sussex County - DE
Slide 40: Rutgers Leadership Development
RUTGERS LEADERSHIP DEVELOPMENT Eɭployees I�x�O�"�N�B�K�K�;�"�%� �耀(� ��"� �"� ࠀF�L�@�䵅⭆䀫� ���䀪�$���㾀��Ā��㾀�䍒ֹ䔭䀄� ���!��!�� ��K�@�0�� ��������ᝰ�ᆔ�����ᝰ�ᆔ�$�d��㾀�����㾀�䍒ֹ䴭� ������ ������[�Ű��ｪ������Ɛ���∄Caɬibri�����㾀��镔 甚猤攜ٴ門 門 䖞猚�뼀�뼀��里 㫲疧ഡ��Œࠀ���酠ܪ �ⶀ瞹�卺�Ȕ˽�˽��Œ�Ơᒶ�酠ݪ �鈐
Slide 41: Employee Engagement
Health & Safety Fair Great Adventure Family Day Diversity Luncheon Employee Engagement Special Lunches Show your Team Pride Go Red for Women
Slide 42: Giving Back To the Communities We Serve
Giving Back To the Communities We Serve Education, Outreach & Voluntarism
Slide 43: Community Involvement
MSEX co - sponsored the Bowl for Hunger which raised over $19,000 for 31 area food banks. Tidewater donated proceeds from its annual charity golf outing to Delaware Wild Lands. Employees volunteered on MSEX Cares Day at NJ Institute for Disabilities
Slide 44: Investor Education
Investor Education Panelists included: NJ State Legislature, the NJDEP, the U.S. Army Corp of Engineers, the NJ Board of Public Utilities, FEMA, and the Edward J. Bloustein School of Planning and Public Policy at Rutgers, the State University of New Jersey. It’s All Connected: Water, Infrastructure
Slide 45: Honors and Awards
Honors and Awards Environmental Achievement Award for the Ridgewood Alternative Energy Project For Support of Women in the Workplace ExecRank Names Doll “Top Small Cap CEO” Edison Municipal Alliance Volunteer Awards NAWC Living Water Award Best Tasting Water Operator of T he Year Dover AFB Honorary
Slide 46: NASDAQ Stock Market Closing Bell
NASDAQ STOCK MARKET CLOSING BELL ▪ 115 th Years in Business ▪ 100 Years of Dividend Payments ▪ 40 Years of Consecutive Dividend Increases
Slide 47: Company values over a century
The values that have guided our company for over a century are stronger than ever… ▪ Integrity ▪ A Strong Customer Focus ▪ Continual Improvement ▪ Teamwork ▪ Social Responsibility ▪ A Result - Driven Work Ethic Field work circa 1910 Field work circa 2013
Slide 48: Investment Considerations
▪ Honest and ethical problem solver ▪ Comprehensive suite of services ▪ Stable residential/commercial customer base ▪ Strong Financial Record/Balance Sheet ▪ Solid Debt Ratings (S&P A - ) Stable ▪ Successful access to capital markets ▪ Supportive Regulatory Environment ▪ Established reputation for o
Slide 49: Questions
QUESTIONS These slides will be archived on the Investor Relations section of our website at www.middlesexwater.com under Presentations.