Middlesex water13agm pres

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Middlesex water13agm pres

  1. 1. Welcome to theAnnual Meeting of ShareholdersMay 21, 2013A Trusted Provider for 115 Years
  2. 2. Forward-Looking StatementCertain matters discussed in this presentation are forward-lookingstatements intended to qualify for the “safe harbor” from liability establishedby the Private Securities Litigation Reform Act of 1995. These forward-lookingstatements can generally be identified as such because the context of thestatement will include words such as the Company “believes,” “anticipates,”“expects” or words of similar import. Similarly, statements that describe theCompany’s future plans, objectives, estimates or goals are also forward-looking statements that are subject to the risks and uncertainties that couldcause actual results to differ materially from those expressed or implied in thestatements.
  3. 3. FINANCIALHIGHLIGHTSFinancialHighlights
  4. 4. OverviewIncorporated: 1897Market Cap: ($millions) $308.652-Week Range: $17.48 - $20.06Average Volume: (3 months) 36,081Shares Outstanding: (millions) 16.1Dividend Yield: 3.8%Annualized Dividend: $0.75Number of Customers: 141,000Number of Employees: 279
  5. 5. MWCDelawarePublic ServiceCommissionNew JerseyBoard ofPublic UtilitiesPennsylvaniaPublic UtilitiesCommissionWater Quality USEPA NJDEP DNREC PADEPSecurities NASDAQ SECRegulation (Rates)
  6. 6. 89%11%0% 0%Regulated Services Non-Regulated ServicesOperating Revenues by SegmentMSEX owns andoperatesregulated waterutility andwastewatersystems in NJ, DEand PA
  7. 7. Revenues ($Millions)2008 2009 2010 2011 201291.0 91.2102.7 102.1110.4
  8. 8. Earnings Per Share2008 2009 2010 2011 2012$0.89$0.72$0.96$0.84$0.90
  9. 9. Net Income ($Millions)2008 2009 2010 2011 2012$12.2$10.0$14.3$13.4$14.4
  10. 10. 33.9 44.758.482.796.3118.3133.7150.2 158.5 166.9182.5 188.0205.8214.2220.7235.6243.4252.2264.8279.9295316.5332.1346.901002003004005006002001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012New Jersey DelawareUtility Plant ($Millions)
  11. 11. Performance ($Millions except per share amounts)Year EndedDecember 31,2012 2011Operating Revenues $ 110.4 $ 102.1O & M Expenses $ 60.5 $ 56.6Net Income $ 14.4 $ 13.4Diluted Earnings per Share $ 0.90 $ 0.84
  12. 12. Rate Activity 2012State Amount ApprovedNew Jersey-Middlesex $8.1 million July 2012Delaware-Tidewater $3.9 million June 2012-TESI $0.6 million June 2012Pennsylvania-Twin Lakes $0.1 million March 2012
  13. 13. Other Performance Factors Water Use TrendsCustomer Demands Customer GrowthDelaware O & M CostsLabor & Benefits
  14. 14. Performance ($Millions except per share amounts)First Quarter EndedMarch 31,2013 2012Operating Revenues $ 27.0 $ 23.5O & M Expenses $ 15.4 $ 14.4Net Income $ 3.2 $ 1.8Diluted Earnings per Share $ 0.20 $ 0.11
  15. 15. Rate Activity 2013State Amount TimingNew 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 2013Delaware-Tidewater DSIC Filing $0.1 million Eff. January 2013$0.1 million Effective July 2013-TESI Acquisition Decision Q3 2013
  16. 16. Distribution System Improvement ChargeDSIC: A rate mechanism that allows water utilitiesto recover investment in improvements to theirwater distribution system between base rateproceedings.NEW JERSEYNovember 2012 – MSEX filed Foundational Filing with NJBPUFebruary 2013 – Foundational Filing approved by NJBPUDELAWAREDSIC program in place since 2001.
  17. 17. Performance – Changes (in $Millions)Hess Corp. $ 1.6 $ 2.6Borough of Sayreville $ 0.8 $ 3.0Post-retirement Medical Plan $(2.6) $(2.6)Interest Savings on Refinancing $(0.9) $(0.9)2013 2014
  18. 18. OtherInfrastructureNeedsTechnology MWC RenewProgramPlantImprovementsDistributionSystem$1.2$2.6$4.0$5.1$8.9Construction Program - $21.8 Million
  19. 19. Construction FundingCustomerAdvancesReinvestmentPlanShort TermLoansSRF Loans Net CashFlows$1.2 $1.6$3.5$5.0$10.5Total Funding - $21.8 MillionConstruction Funding
  20. 20.  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 Effectiveinterest rate - 1.0%Long-Term Debt
  21. 21. ** MSEX, AWR, ARTNA, CWT, CTWS, SJW, YORWCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
  22. 22. DIVIDEND HISTORY$0.25$0.35$0.45$0.55$0.65$0.7584 86 88 90 92 94 96 98 00 02 04 06 08 10 12
  23. 23. FINANCIALHIGHLIGHTSOperationsHighlights
  24. 24. SUPERSTORM SANDY…SUPERSTORM SANDY…The MSEX enterprise is expanding its emergency preparedness plans to anticipateweather events of longer duration, larger areas of impact and increasing frequency.
  25. 25. POST SANDY…RECOVERY AND RESILIENCY PLANNINGMiddlesex System: Increasing number of generators andexploring diversified fuel usage capabilitiesPerth Amboy: Rebuilding wastewater systemlift stations flooded by the stormAvalon: Rebuilding lift stations and storm water pump stationsimpacted by the stormEnterprise-wide: Coordinating integration of existing emergencyresponse plans for all companies
  26. 26. Working to Ensure Water QualityDuring state-wideemergencies, informationis shared with the ROICwhere members of theNJBPU, State Police andNJDEP are stationed toeffect a rapid response toany water quality andoperational incidents.
  27. 27. Keeping Customers Informedin EmergenciesMWC Customer DIRECTAlert RegistrationNewspaper/Radio/TelevisionMunicipal Reverse 911Municipal WebsitesCompany WebsiteService Alerts Update CenterPhone Bank MessagingCompany Facebook PageCompany Twitter Feed
  28. 28. RENEW 2013 Water Main Cleaning and Lining Project• Year 17 of a 25-Year UpgradeProgram• $4.0 million investment to replacewater mains, valves and firehydrants in the City of SouthAmboy• Clean and line 11,500 linear feetof main• Funded by New JerseyEnvironmental Infrastructure TrustLoan
  29. 29. Enhancing Service to our CustomersKnowing the location ofour crews enables fieldpersonnel to respond tocustomer inquiries in amore timely andefficient manner.
  30. 30. New Operations Center in Sussex County will better meetthe needs of residents in southern Delaware
  31. 31. Our Strategy,Our People andOur Partners
  32. 32. We earn our reputation as a trusted waterprovider with every drop of high quality waterthat we deliver.Our MissionTo provide service in thewater, wastewater andrelated fields in a safe,reliable and efficientmannerOur VisionTo be the preferredchoice for individuals,developers andmunicipalities seekingwater, wastewater andrelated service solutions
  33. 33. Organic, customerand utilityinfrastructuregrowthAcquisitions atreasonablepricesRegulated andnon-regulatedbusinesses andcontractsComplementaryproducts andservicesInvest inregulated utilityinfrastructurethat benefits ourcustomersRecover coststhrough timelyrate filingsFocus ongeographicdiversificationStrategy for Building Shareholder Value
  34. 34. Managing RiskSafety TrainingIn 2012 Risk ManagementOversight was formally added tothe Corporate Governance andNominating Committee’sresponsibilities.Examples:• Strategic Risks• Operational Risks• Financial Risks• Brand & Reputation• Employee Health & Safety
  35. 35. Borough of Avalon, NJ Utility Service Affiliates operates andmanages the Borough’s water, wastewaterand storm water collection systems Work includes day-to-day operations,billing, collections, customer service,emergency response and capital projectsfunded by Avalon.Sunoco Logistics Partners We continue to operate the Eagle PointBiological Wastewater Treatment Facilityin Westville, NJ MSEX, through its subsidiary, UtilityService Affiliates, is responsible for dailyoperation of the industrial wastewatertreatment facility.Contract OperationsSouthampton Township, NJ: 3-year Sewer Operating Contract adjacent to Pinelands
  36. 36. RIDGEWOOD GREEN LLC PROJECT WITH NATURALSYSTEMS UTILITIES AND VILLAGE OF RIDGEWOOD, NJ
  37. 37. Turnkey Renewable Energy ServicesPROJECT STATUS Ultraviolet system install complete Solar installations complete Wastewater treatment plant construction complete Training of Ridgewood employees in progress Permits filed and issued Full production of energy to commence in May 2013 Middlesex and NSU Ridgewood, LLC, a subsidiary ofNatural Systems Utilities, LLC, formed a joint ventureRidgewood Green RME, LLC (Ridgewood Green) whichentered into a 20-year public private partnership with theVillage of Ridgewood, NJ Ridgewood Green will design, build, own and operatefacilities to optimize production of electricity atRidgewood’s municipal wastewater treatment plant
  38. 38. USA LineCare contracts transferred to HomeServe in August2011USA earns a service fee for billing, cash collection andother administrative mattersHome emergency repair plans include: Water Line,Sewer/Septic Line, Water Heater, Plumbing andDrainageAs of January 2013:- Active Contracts: 32,000+- Penetration Rate: 32%+Former NY Mayor RudyGiuliani and his team atGiuliani Partners areadvising HomeServe onenhancing awareness ofthe need for water andsewer infrastructureinvestment andconsumer protectionnationwide.
  39. 39. The PlantationsLagoon at PlantationsCommunity in SussexCounty - DE
  40. 40. RUTGERSLEADERSHIPDEVELOPMENTEmployeesgraduated from a12-course trainingprogram spanningAugust 2012through January2013Sharpening Management Skills
  41. 41. Health & Safety FairGreat Adventure Family DayDiversity LuncheonEmployee EngagementSpecial LunchesShow your Team PrideGo Red for Women
  42. 42. Giving Back To the Communities We ServeEducation, Outreach & Voluntarism
  43. 43. MSEX co-sponsored the Bowl for Hunger whichraised over $19,000 for 31 area food banks.Tidewater donated proceeds from its annualcharity golf outing to Delaware Wild Lands.Employeesvolunteered on MSEXCares Day at NJInstitute forDisabilities
  44. 44. Investor EducationPanelists included: NJ State Legislature, the NJDEP,the U.S. Army Corp of Engineers, the NJ Board ofPublic Utilities, FEMA, and the Edward J. BlousteinSchool of Planning and Public Policy at Rutgers, theState University of New Jersey.It’s All Connected: Water,Infrastructure and the EconomySpeakers discussed the link betweeneconomic stability and growth andenvironmental quality
  45. 45. Honors and AwardsEnvironmentalAchievementAward for theRidgewoodAlternativeEnergy ProjectFor Support of Women in the WorkplaceExecRank Names Doll“Top Small Cap CEO”Edison MunicipalAlliance VolunteerAwardsNAWC LivingWater AwardBest Tasting WaterOperator of The YearDover AFB HonoraryCommanderRidgewood Green Honored for Environmental Achievement
  46. 46. NASDAQ STOCK MARKET CLOSING BELL 115th Years in Business 100 Years of Dividend Payments 40 Years of ConsecutiveDividend Increases
  47. 47. The values that have guided our company forover a century are stronger than ever… Integrity A Strong CustomerFocus ContinualImprovement Teamwork Social Responsibility A Result-Driven WorkEthicField work circa 1910 Field work circa 2013
  48. 48.  Honest and ethical problem solver Comprehensive suite of services Stable residential/commercial customerbase Strong Financial Record/Balance Sheet Solid Debt Ratings (S&P A-) Stable Successful access to capital markets Supportive Regulatory Environment Established reputation for operationalexcellence Socially Responsible and focused onsustainability Focused on building and leveragingpartnerships Well positioned for growth in NJ, DEand beyondINVESTMENT CONSIDERATIONS
  49. 49. QUESTIONSThese slides will be archived on the InvestorRelations section of our website atwww.middlesexwater.com underPresentations.

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