Company Quick10K Filing
Middlesex Water
Price62.87 EPS2
Shares17 P/E32
MCap1,054 P/FCF45
Net Debt229 EBIT38
TEV1,282 TEV/EBIT34
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-05
10-K 2019-12-31 Filed 2020-02-27
10-Q 2019-09-30 Filed 2019-11-01
10-Q 2019-06-30 Filed 2019-07-31
10-Q 2019-03-31 Filed 2019-05-06
10-K 2018-12-31 Filed 2019-03-08
10-Q 2018-09-30 Filed 2018-11-02
10-Q 2018-06-30 Filed 2018-08-02
10-Q 2018-03-31 Filed 2018-05-07
10-K 2017-12-31 Filed 2018-03-09
10-Q 2017-09-30 Filed 2017-11-02
10-Q 2017-06-30 Filed 2017-08-01
10-Q 2017-03-31 Filed 2017-05-04
10-K 2016-12-31 Filed 2017-03-03
10-Q 2016-09-30 Filed 2016-11-01
10-Q 2016-06-30 Filed 2016-08-02
10-Q 2016-03-31 Filed 2016-05-03
10-K 2015-12-31 Filed 2016-03-04
10-Q 2015-09-30 Filed 2015-11-03
10-Q 2015-06-30 Filed 2015-08-03
10-Q 2015-03-31 Filed 2015-05-01
10-K 2014-12-31 Filed 2015-03-05
10-Q 2014-09-30 Filed 2014-11-06
10-Q 2014-06-30 Filed 2014-08-04
10-Q 2014-03-31 Filed 2014-05-02
10-K 2013-12-31 Filed 2014-03-05
10-Q 2013-09-30 Filed 2013-11-06
10-Q 2013-06-30 Filed 2013-08-02
10-Q 2013-03-31 Filed 2013-05-07
10-K 2012-12-31 Filed 2013-03-07
10-Q 2012-09-30 Filed 2012-10-26
10-Q 2012-06-30 Filed 2012-08-02
10-Q 2012-03-31 Filed 2012-05-04
10-K 2011-12-31 Filed 2012-03-08
10-Q 2011-09-30 Filed 2011-11-04
10-Q 2011-06-30 Filed 2011-08-04
10-Q 2011-03-31 Filed 2011-05-06
10-K 2010-12-31 Filed 2011-03-09
10-Q 2010-09-30 Filed 2010-11-03
10-Q 2010-06-30 Filed 2010-07-30
10-Q 2010-03-31 Filed 2010-05-06
10-K 2009-12-31 Filed 2010-03-08
8-K 2020-05-21 Other Events, Exhibits
8-K 2020-05-06 Officers, Exhibits
8-K 2020-05-05 Earnings, Exhibits
8-K 2020-04-23 Other Events, Exhibits
8-K 2020-03-24 Exhibits
8-K 2020-03-09 Regulation FD, Exhibits
8-K 2020-02-27 Earnings, Exhibits
8-K 2020-01-29 Other Events, Exhibits
8-K 2019-11-22 Enter Agreement, Other Events, Exhibits
8-K 2019-11-20 Other Events, Exhibits
8-K 2019-11-01 Earnings, Exhibits
8-K 2019-10-23 Exhibits
8-K 2019-10-21 Exhibits
8-K 2019-10-08 Exhibits
8-K 2019-10-03 Other Events
8-K 2019-09-25 Enter Agreement, Exhibits
8-K 2019-09-23 Amend Bylaw, Exhibits
8-K 2019-09-06 Amend Bylaw, Other Events, Exhibits
8-K 2019-09-06 Other Events, Exhibits
8-K 2019-08-05 Exhibits
8-K 2019-07-31 Earnings, Exhibits
8-K 2019-07-25 Other Events, Exhibits
8-K 2019-07-17 Regulation FD, Exhibits
8-K 2019-07-02 Officers, Exhibits
8-K 2019-05-22 Other Events, Exhibits
8-K 2019-05-06 Earnings, Exhibits
8-K 2019-04-25 Other Events, Exhibits
8-K 2019-04-22 Officers, Exhibits
8-K 2019-03-08 Earnings, Exhibits
8-K 2019-01-29 Other Events, Exhibits
8-K 2018-12-18 Exhibits
8-K 2018-11-02 Earnings, Exhibits
8-K 2018-10-29 Exhibits
8-K 2018-10-24 Other Events, Exhibits
8-K 2018-08-02 Earnings, Exhibits
8-K 2018-07-26 Other Events, Exhibits
8-K 2018-07-18 Exhibits
8-K 2018-05-24 Exhibits
8-K 2018-05-23 Other Events, Exhibits
8-K 2018-05-07 Earnings, Exhibits
8-K 2018-04-25 Other Events, Exhibits
8-K 2018-03-27 Exhibits
8-K 2018-03-09 Earnings, Exhibits
8-K 2018-01-29 Other Events, Exhibits

MSEX 10Q Quarterly Report

Note 1 – Basis of Presentation and Recent Developments
Note 2 – Rate and Regulatory Matters
Note 3 – Capitalization
Note 4 – Earnings per Share
Note 5 – Business Segment Data
Note 6 – Short - Term Borrowings
Note 7 – Commitments and Contingent Liabilities
Note 8 – Employee Benefit Plans
Note 9 – Revenue Recognition From Contracts with Customers
Note 10 – Income Taxes
Item 2.Management’S Discussion and Analysis of Financial Condition and Results of Operations
Item 3.Quantitative and Qualitative Disclosures of Market Risk
Item 4.Controls and Procedures
Part II. Other Information
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.Defaults Upon Senior Securities
Item 4.Mine Safety Disclosures
Item 5.Other Information
EX-10.32(B) msex10qex10-32b.htm
EX-31.1 msex10qex31-1.htm
EX-31.2 msex10qex31-2.htm
EX-32.1 msex10qex32-1.htm
EX-32.2 msex10qex32-2.htm

Middlesex Water Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
0.90.70.50.40.20.02012201420172020
Assets, Equity
0.10.10.10.00.00.02016201720182020
Rev, G Profit, Net Income
0.10.10.0-0.0-0.1-0.12012201420172020
Ops, Inv, Fin

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________to ___________

Commission File Number 0-422

MIDDLESEX WATER COMPANY

(Exact name of registrant as specified in its charter)

 New Jersey

22-1114430

(State of incorporation)

(IRS employer identification no.)

 

485C Route One South, Iselin, New Jersey   08830

(Address of principal executive offices, including zip code)

(732) 634-1500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

 Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

MSEX

NASDAQ

  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post files).

Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, non-accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes  No ☒

The number of shares outstanding of each of the registrant's classes of common stock, as of April 30, 2020: Common Stock, No Par Value: 17,439,780 shares outstanding.


INDEX

PAGE

PART I.FINANCIAL INFORMATION

Item 1.Financial Statements (Unaudited):

1

Condensed Consolidated Statements of Income

1

Condensed Consolidated Balance Sheets

2

Condensed Consolidated Statements of Cash Flows

3

Condensed Consolidated Statements of Capital Stock and Long-Term Debt

4

Condensed Consolidated Statements of Common Stockholders’ Equity

5

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3.Quantitative and Qualitative Disclosures of Market Risk

21

Item 4.Controls and Procedures

21

PART II.OTHER INFORMATION

Item 1.Legal Proceedings

22

Item 1A.Risk Factors

22

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

22

Item 3.Defaults upon Senior Securities

22

Item 4.Mine Safety Disclosures

22

Item 5.Other Information

22

Item 6.Exhibits

22

SIGNATURES

23


Index

 

 

MIDDLESEX WATER COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands except per share amounts)

Three Months Ended March 31,

2020

2019

 

Operating Revenues

$

31,769

$

30,698

 

Operating Expenses:

Operations and Maintenance

17,192

16,120

Depreciation

4,448

4,046

Other Taxes

3,602

3,504

 

Total Operating Expenses

25,242

23,670

 

Operating Income

6,527

7,028

 

Other Income (Expense):

Allowance for Funds Used During Construction

1,123

515

Other Income (Expense), net

385

(57

)

 

Total Other Income, net

1,508

458

 

Interest Charges

1,669

1,200

 

Income before Income Taxes

6,366

6,286

 

Income Taxes

(1,302

)

(266

)

 

Net Income

7,668

6,552

 

Preferred Stock Dividend Requirements

30

36

 

Earnings Applicable to Common Stock

$

7,638

$

6,516

 

Earnings per share of Common Stock:

Basic

$

0.44

$

0.40

Diluted

$

0.44

$

0.39

 

Average Number of Common Shares Outstanding:

Basic

17,437

16,428

Diluted

17,552

16,584

See Notes to Condensed Consolidated Financial Statements.

1


Index

MIDDLESEX WATER COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

March 31,

December 31,

ASSETS

2020

2019

UTILITY PLANT:

Water Production

$

161,269

$

160,870

Transmission and Distribution

607,682

556,517

General

82,844

83,043

Construction Work in Progress

48,267

75,520

TOTAL

900,062

875,950

Less Accumulated Depreciation

173,511

170,220

UTILITY PLANT - NET

726,551

705,730

 

CURRENT ASSETS:

Cash and Cash Equivalents

15,419

2,230

Accounts Receivable, net

10,823

11,908

Unbilled Revenues

6,702

7,183

Materials and Supplies (at average cost)

5,276

5,445

Prepayments

1,790

2,367

TOTAL CURRENT ASSETS

40,010

29,133

 

AND OTHER ASSETS:

Operating Lease Right of Use Asset

5,757

5,944

Preliminary Survey and Investigation Charges

2,208

2,054

Regulatory Assets

110,678

110,479

Restricted Cash

37,882

44,269

Non-utility Assets - Net

10,393

10,370

Other

1,837

1,899

TOTAL DEFERRED CHARGES AND OTHER ASSETS

168,755

175,015

TOTAL ASSETS

$

935,316

$

909,878

 

CAPITALIZATION AND LIABILITIES

CAPITALIZATION:

Common Stock, No Par Value

$

215,600

$

215,125

Retained Earnings

111,800

108,667

TOTAL COMMON EQUITY

327,400

323,792

Preferred Stock

2,084

2,084

Long-term Debt

234,789

230,777

TOTAL CAPITALIZATION

564,273

556,653

 

CURRENT

Current Portion of Long-term Debt

7,171

7,178

LIABILITIES:

Notes Payable

33,500

20,000

Accounts Payable

24,116

23,306

Accrued Taxes

11,165

7,635

Accrued Interest

862

2,031

Unearned Revenues and Advanced Service Fees

1,210

1,211

Other

2,515

3,620

TOTAL CURRENT LIABILITIES

80,539

64,981

 

COMMITMENTS AND CONTINGENT LIABILITIES (Note 7)

 

DEFERRED CREDITS

Customer Advances for Construction

24,146

23,905

AND OTHER LIABILITIES:

Lease Obligation

5,558

5,732

Accumulated Deferred Income Taxes

55,580

54,408

Employee Benefit Plans

34,157

34,671

Regulatory Liabilities

67,063

69,152

Other

2,500

2,546

TOTAL DEFERRED CREDITS AND OTHER LIABILITIES

189,004

190,414

 

CONTRIBUTIONS IN AID OF CONSTRUCTION

101,500

97,830

TOTAL CAPITALIZATION AND LIABILITIES

$

935,316

$

909,878

See Notes to Condensed Consolidated Financial Statements.

2


Index

MIDDLESEX WATER COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 

 

Three Months Ended March 31,

 

 

2020

 

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net Income

 

$

7,668

 

 

$

6,552

 

Adjustments to Reconcile Net Income to

 

 

 

 

 

 

 

 

Net Cash Provided by Operating Activities:

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

 

5,108

 

 

 

4,190

 

Provision for Deferred Income Taxes and Investment Tax Credits

 

 

(3,430

)

 

 

(2,319

)

Equity Portion of Allowance for Funds Used During Construction (AFUDC)

 

 

(694

)

 

 

(347

)

Cash Surrender Value of Life Insurance

 

 

205

 

 

 

(123

)

Stock Compensation Expense

 

 

162

 

 

 

229

 

Changes in Assets and Liabilities:

 

 

 

 

 

 

 

 

Accounts Receivable

 

 

1,085

 

 

 

1,780

 

Unbilled Revenues

 

 

481

 

 

 

353

 

Materials & Supplies

 

 

169

 

 

 

(68

)

Prepayments

 

 

577

 

 

 

381

 

Accounts Payable

 

 

810

 

 

 

(5,349

)

Accrued Taxes

 

 

3,530

 

 

 

3,236

 

Accrued Interest

 

 

(1,169

)

 

 

(702

)

Employee Benefit Plans

 

 

450

 

 

 

26

 

Unearned Revenue & Advanced Service Fees

 

 

(1

)

 

 

(11

)

Other Assets and Liabilities

 

 

1,187

 

 

 

(164

)

 

 

 

 

 

 

 

 

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

16,138

 

 

 

7,664

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Utility Plant Expenditures, Including AFUDC of $429 in 2020, $168 in 2019

 

 

(25,147

)

 

 

(12,324

)

 

 

 

 

 

 

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

 

 

(25,147

)

 

 

(12,324

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Redemption of Long-term Debt

 

 

(1,330

)

 

 

(1,337

)

Proceeds from Issuance of Long-term Debt

 

 

5,398

 

 

 

6,899

 

Net Short-term Bank Borrowings

 

 

13,500

 

 

 

1,000

 

Deferred Debt Issuance Expense

 

 

(24

)

 

 

 

Common Stock Issuance Expense

 

 

(37

)

 

 

(6

)

Proceeds from Issuance of Common Stock

 

 

313

 

 

 

2,559

 

Payment of Common Dividends

 

 

(4,468

)

 

 

(3,943

)

Payment of Preferred Dividends

 

 

(30

)

 

 

(36

)

Construction Advances and Contributions-Net

 

 

2,489

 

 

 

651

 

 

 

 

 

 

 

 

 

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

15,811

 

 

 

5,787

 

NET CHANGES IN CASH, CASH EQUIVALENTS AND RESTRCTED CASH

 

 

6,802

 

 

 

1,127

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD

 

 

46,499

 

 

 

5,661

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

 

$

53,301

 

 

$

6,788

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY:

 

 

 

 

 

 

 

 

Utility Plant received as Construction Advances and Contributions

 

$

1,422

 

 

$

1,605

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:

 

 

 

 

 

 

 

 

Cash Paid During the Year for:

 

 

 

 

 

 

 

 

Interest

 

$

3,022

 

 

$

2,297

 

Interest Capitalized

 

$

429

 

 

$

168

 

Income Taxes

 

$

2

 

 

$

815

 

See Notes to Condensed Consolidated Financial Statements.

3


Index

MIDDLESEX WATER COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CAPITAL STOCK AND LONG-TERM DEBT

(Unaudited)

(In thousands)

 

 

March 31,

 

December 31,

 

 

 

2020

 

2019

 

Common Stock, No Par Value

 

 

 

 

 

 

 

 

 

Shares Authorized - 40,000

 

 

 

 

 

 

 

 

 

Shares Outstanding - 2020 - 17,439; 2019 - 17,434

 

$

215,600

 

 

$

215,125

 

 

 

 

 

 

 

 

 

 

 

 

Retained Earnings

 

 

111,800

 

 

 

108,667

 

 

TOTAL COMMON EQUITY

 

$

327,400

 

 

$

323,792

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative Preferred Stock, No Par Value:

 

 

 

 

 

 

 

 

 

Shares Authorized - 120

 

 

 

 

 

 

 

 

 

Shares Outstanding - 2020 - 20: 2019 - 20

 

 

 

 

 

 

 

 

 

Convertible:

 

 

 

 

 

 

 

 

 

Shares Outstanding, $7.00 Series - 10

 

 

1,005

 

 

 

1,005

 

 

Nonredeemable:

 

 

 

 

 

 

 

 

 

Shares Outstanding, $7.00 Series - 1

 

 

79

 

 

 

79

 

 

Shares Outstanding, $4.75 Series - 10

 

 

1,000

 

 

 

1,000

 

 

TOTAL PREFERRED STOCK

 

$

2,084

 

 

$

2,084

 

 

 

 

 

 

 

 

 

 

 

 

Long-term Debt:

 

 

 

 

 

 

 

 

 

8.05%, Amortizing Secured Note, due December 20, 2021

 

$

569

 

 

$

643

 

 

6.25%, Amortizing Secured Note, due May 19, 2028

 

 

3,430

 

 

 

3,535

 

 

6.44%, Amortizing Secured Note, due August 25, 2030

 

 

2,917

 

 

 

2,987

 

 

6.46%, Amortizing Secured Note, due September 19, 2031

 

 

3,197

 

 

 

3,267

 

 

4.22%, State Revolving Trust Note, due December 31, 2022

 

 

175

 

 

 

175

 

 

3.60%, State Revolving Trust Note, due May 1, 2025

 

 

1,405

 

 

 

1,405

 

 

3.30% State Revolving Trust Note, due March 1, 2026

 

 

288

 

 

 

309

 

 

3.49%, State Revolving Trust Note, due January 25, 2027

 

 

328

 

 

 

349

 

 

4.03%, State Revolving Trust Note, due December 1, 2026

 

 

447

 

 

 

446

 

 

4.00% to 5.00%, State Revolving Trust Bond, due August 1, 2021

 

 

60

 

 

 

60

 

 

0.00%, State Revolving Fund Bond, due August 1, 2021

 

 

48

 

 

 

50

 

 

3.64%, State Revolving Trust Note, due July 1, 2028

 

 

214

 

 

 

214

 

 

3.64%, State Revolving Trust Note, due January 1, 2028

 

 

69

 

 

 

69

 

 

3.45%, State Revolving Trust Note, due August 1, 2031

 

 

822

 

 

 

851

 

 

6.59%, Amortizing Secured Note, due April 20, 2029

 

 

3,168

 

 

 

3,255

 

 

7.05%, Amortizing Secured Note, due January 20, 2030

 

 

2,458

 

 

 

2,521

 

 

5.69%, Amortizing Secured Note, due January 20, 2030

 

 

5,043

 

 

 

5,171

 

 

4.45%, Amortizing Secured Note, due April 20, 2040

 

 

8,837

 

 

 

8,946

 

 

4.47%, Amortizing Secured Note, due April 20, 2040

 

 

3,279

 

 

 

3,320

 

 

3.75%, State Revolving Trust Note, due July 1, 2031

 

 

1,829

 

 

 

1,829

 

 

2.00%, State Revolving Trust Note, due February 1, 2036

 

 

987

 

 

 

1,013

 

 

2.00%, State Revolving Trust Note, due November 1, 2038

 

 

1,539

 

 

 

1,309

 

 

3.75%, State Revolving Trust Note, due November 30, 2030

 

 

955

 

 

 

955

 

 

0.00% Construction Loans

 

 

45,635

 

 

 

40,467

 

 

First Mortgage Bonds:

 

 

 

 

 

 

 

 

 

0.00%, Series BB, due August 1, 2021

 

 

235

 

 

 

241

 

 

4.00% to 5.00%, Series CC, due August 1, 2021

 

 

331

 

 

 

331

 

 

0.00%, Series EE, due August 1, 2023

 

 

1,407

 

 

 

1,456

 

 

3.00% to 5.50%, Series FF, due August 1, 2024

 

 

2,440

 

 

 

2,440

 

 

0.00%, Series GG, due August 1, 2026

 

 

621

 

 

 

632

 

 

4.00% to 5.00%, Series HH, due August 1, 2026

 

 

710

 

 

 

710

 

 

0.00%, Series II, due August 1, 2024

 

 

416

 

 

 

429

 

 

3.40% to 5.00%, Series JJ, due August 1, 2027

 

 

588

 

 

 

588

 

 

0.00%, Series KK, due August 1, 2028

 

 

791

 

 

 

807

 

 

5.00% to 5.50%, Series LL, due August 1, 2028

 

 

928

 

 

 

928

 

 

0.00%, Series MM, due August 1, 2030

 

 

1,003

 

 

 

1,037

 

 

3.00% to 4.375%, Series NN, due August 1, 2030

 

 

1,190

 

 

 

1,190

 

 

0.00%, Series OO, due August 1, 2031

 

 

1,756

 

 

 

1,806

 

 

2.00% to 5.00%, Series PP, due August 1, 2031

 

 

660

 

 

 

660

 

 

5.00%, Series QQ, due October 1, 2023

 

 

9,915

 

 

 

9,915

 

 

3.80%, Series RR, due October 1, 2038

 

 

22,500

 

 

 

22,500

 

 

4.25%, Series SS, due October 1, 2047

 

 

23,000

 

 

 

23,000

 

 

0.00%, Series TT, due August 1, 2032

 

 

1,906

 

 

 

1,957

 

 

3.00% to 3.25%, Series UU, due August 1, 2032

 

 

755

 

 

 

755

 

 

0.00%, Series VV, due August 1, 2033

 

 

1,956

 

 

 

2,004

 

 

3.00% to 5.00%, Series WW, due August 1, 2033

 

 

755

 

 

 

755

 

 

0.00%, Series XX, due August 1, 2047

 

 

10,500

 

 

 

10,627

 

 

3.00% to 5.00%, Series YY, due August 1, 2047

 

 

3,785

 

 

 

3,785

 

 

0.00%, Series 2018A, due August 1, 2047

 

 

6,599

 

 

 

6,678

 

 

3.00%-5.00%, Series 2018B, due August 1, 2047

 

 

2,320

 

 

 

2,320

 

 

4.00%, Series 2019A, due August 1, 2059

 

 

32,500

 

 

 

32,500

 

 

5.00%, Series 2019B, due August 1, 2059

 

 

21,200

 

 

 

21,200

 

 

SUBTOTAL LONG-TERM DEBT

 

 

238,466

 

 

 

234,397

 

 

Add: Premium on Issuance of Long-term Debt

 

 

7,964

 

 

 

8,064

 

 

Less: Unamortized Debt Expense

 

 

(4,470

)

 

 

(4,506

)

 

Less: Current Portion of Long-term Debt

 

 

(7,171

)

 

 

(7,178

)

 

TOTAL LONG-TERM DEBT

 

$

234,789

 

 

$

230,777

 

 

See Notes to Condensed Consolidated Financial Statements.

4


Index

MIDDLESEX WATER COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY

(In thousands except per share amounts)

 

 

Common

 

Common

 

 

 

 

 

 

Stock

 

Stock

 

Retained

 

 

 

 

Shares

 

Amount

 

Earnings

 

Total

 

 

 

 

 

 

 

 

 

For the Three Months Ended March 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2019

 

 

16,403

 

 

$

157,354

 

 

$

91,433

 

 

$

248,787

 

Net Income

 

 

 

 

 

 

 

 

6,552

 

 

 

6,552

 

Dividend Reinvestment & Common Stock Purchase Plan

 

 

48

 

 

 

2,559

 

 

 

 

 

 

2,559

 

Restricted Stock Award Net - Employees

 

 

 

 

 

229

 

 

 

 

 

 

229

 

Cash Dividends on Common Stock ($0.2400 per share)

 

 

 

 

 

 

 

 

(3,943

)

 

 

(3,943

)

Cash Dividends on Preferred Stock

 

 

 

 

 

 

 

 

(36

)

 

 

(36

)

Common Stock Expenses

 

 

 

 

 

 

 

 

(6

)

 

 

(6

)

Balance at March 31, 2019

 

 

16,451

 

 

$

160,142

 

 

$

94,000

 

 

$

254,142

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended March 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2020

 

 

17,434

 

 

$

215,125

 

 

$

108,667

 

 

$

323,792

 

Net Income

 

 

 

 

 

 

 

 

7,668

 

 

 

7,668

 

Dividend Reinvestment & Common Stock Purchase Plan

 

 

5

 

 

 

313

 

 

 

 

 

 

313

 

Restricted Stock Award, Net - Employees

 

 

 

 

 

162

 

 

 

 

 

 

162

 

Cash Dividends on Common Stock ($0.2563 per share)

 

 

 

 

 

 

 

(4,468

)

 

 

(4,468

)

Cash Dividends on Preferred Stock

 

 

 

 

 

 

 

 

(30

)

 

 

(30

)

Common Stock Expenses

 

 

 

 

 

 

 

 

(37

)

 

 

(37

)

Balance at March 31, 2020

 

 

17,439

 

 

$

215,600

 

 

$

111,800

 

 

$

327,400

 

See Notes to Condensed Consolidated Financial Statements.

5


Index

MIDDLESEX WATER COMPANY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Basis of Presentation and Recent Developments

Middlesex Water Company (Middlesex or the Company) is the parent company and sole shareholder of Tidewater Utilities, Inc. (Tidewater), Tidewater Environmental Services, Inc. (TESI), Pinelands Water Company (Pinelands Water) and Pinelands Wastewater Company (Pinelands Wastewater) (collectively, Pinelands), Utility Service Affiliates, Inc. (USA), Utility Service Affiliates (Perth Amboy) Inc. (USA-PA), and Twin Lakes Utilities, Inc. (Twin Lakes). Southern Shores Water Company, LLC (Southern Shores) and White Marsh Environmental Systems, Inc. (White Marsh) are wholly-owned subsidiaries of Tidewater. The financial statements for Middlesex and its wholly-owned subsidiaries are reported on a consolidated basis. All significant intercompany accounts and transactions have been eliminated.

The consolidated notes within the 2019 Annual Report on Form 10-K (the 2019 Form 10-K) are applicable to these financial statements and, in the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary (including normal recurring accruals) to present fairly the financial position as of March 31, 2020 and the results of operations and cash flows for the three month periods ended March 31, 2020 and 2019. Information included in the Condensed Consolidated Balance Sheet as of December 31, 2019, has been derived from the Company’s audited financial statements for the year ended December 31, 2019 included in the 2019 Form 10-K.

Recent Developments

Novel Coronavirus (COVID-19) - On March 13, 2020, the United States declared the COVID-19 pandemic a national emergency. The impact on changing economic conditions due to COVID-19 is uncertain and could affect the Company’s results of operations, financial condition and liquidity in the future. While the Company’s operations and capital construction program have not been significantly disrupted to date from COVID-19, we are unable to accurately assess the impact that COVID-19 will have on our business, our customers and our vendors prospectively, due to numerous uncertainties, including the severity of the pandemic, the duration of the outbreak and actions which could potentially be taken by governmental and/or regulatory authorities. The Company has drawn partially on its available lines of credit to provide additional liquidity in the event there is a negative impact to the Company’s business, results of operations, financial condition or liquidity resulting from COVID-19. As of April 30, 2020, there remains $106.0 million available under these lines of credit (see Note 6, Short-term Borrowings for further information on lines of credit). In addition, while there can be no assurance regarding their outcome, the Company is an active participant in utility industry discussions with our regulators for the appropriate accounting of potential future recovery in customer rates of additional costs related to COVID-19. We will continue to monitor and evaluate the COVID-19 situation and its impact to the Company’s business, results of operations, financial condition and liquidity.

Recently Adopted Accounting Guidance

Credit Losses on Financial Instruments - The Financial Accounting Standards Board issued guidance on the measurement of credit losses on financial instruments, including trade receivables, which requires expected credit losses to be measured based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount of financial assets. The new guidance became effective January 1, 2020. For the Company, this applies primarily to accounts receivable and unbilled revenue balances. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

Expected credit losses on accounts receivable and unbilled revenues are based on historical write-offs combined with an evaluation of current conditions and reasonable and supportable forecasts. Customer accounts are written off when collection efforts have been exhausted.

There are no other new adopted or proposed accounting guidance that the Company is aware of that could have a material impact on the Company’s financial statements.

Note 2 Rate and Regulatory Matters

Middlesex – In March 2020, New Jersey Board of Public Utilities (NJBPU) approved Middlesex’s petition to reset its Purchased Water Adjustment Clause (PWAC) tariff rate to recover additional costs of $0.6 million for the purchase of treated water from a non-affiliated water utility regulated by the NJBPU. The new PWAC rate became effective on April 4, 2020. A PWAC is a rate mechanism that allows for recovery of increased purchased water costs between base rate case filings. It is reset to zero once those increased costs are included in base rates.

Tidewater - Effective January 1, 2020, Tidewater increased its Delaware Public Service Commission (DEPSC) approved Distribution System Improvement Charge (DSIC) rate, which is expected to generate revenue of approximately $0.5 million annually. A DSIC is a rate-mechanism that allows water utilities to recover investments in, and generate a return on, qualifying capital improvements made between base rate proceedings.

Southern Shores - Effective January 1, 2020, the DEPSC approved the renewal of a multi-year agreement for water service to a 2,200 unit condominium community in Sussex County, Delaware. Under the agreement, current rates will remain in effect until December 31, 2024, but should there be unanticipated capital expenditures or regulatory related changes in operating expenses exceeding certain thresholds during this time period, rates are permitted to be adjusted to reflect such cost changes. Thereafter, rate increases, if any, cannot exceed the lesser of the regional Consumer Price Index or 3%. The new agreement expires on December 31, 2029.

Twin Lakes - In March 2020, the Pennsylvania Public Utilities Commission (PAPUC) approved a $0.1 million increase in annualized base rates for Twin Lakes. In July 2019, Twin Lakes had filed a petition with the PAPUC seeking permission to increase annualized base rates by approximately $0.2 million, necessitated by capital infrastructure investments and increased operations and maintenance costs. The new rates became effective April 19, 2020.

COVID-19 - The Company is an active participant in utility industry discussions with its regulators for the appropriate accounting of potential future recovery in customer rates of additional costs related to COVID-19. There can be no assurance as to the outcome of these discussions (for further discussion of the impact of COVID-19 on the Company, see Note 1- Basis of Presentation and Recent Developments, Recent Developments).

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Note 3 – Capitalization

Common Stock - During the three months ended March 31, 2020 and 2019, there were 4,834 common shares (approximately $0.3 million) and 47,649 common shares ($2.6 million), respectively, issued under the Middlesex Water Company Investment Plan (the Investment Plan). In January 2019, the Company had activated a limited share purchase discount feature of the Investment Plan. A 5% discount was available until August 2019, when the 0.2 million share purchase limit was reached and the discount feature terminated.

Long-term Debt - Subject to regulatory approval, the Company periodically issues long-term debt to fund its investments in utility plant. To the extent possible, the Company finances qualifying capital projects under State Revolving Fund (SRF) loan programs in New Jersey and Delaware. These government programs provide financing at interest rates that are typically below rates available in the broader financial markets. A portion of the borrowings under the New Jersey SRF is interest-free. Under the New Jersey SRF program, borrowers first enter into a construction loan agreement with the New Jersey Infrastructure Bank (NJIB) at a below market interest rate. The interest rate on the Company’s current construction loan borrowings is zero percent (0%). When construction on the qualifying project is substantially complete, NJIB will coordinate the conversion of the construction loan into a long-term securitized loan with a portion of the principal balance having a stated interest rate of zero percent (0%) and a portion of the principal balance at a market interest rate at the time of closing using the credit rating of the State of New Jersey. The term of the long-term loans currently offered through the NJIB is up to thirty years.

The NJIB generally schedules its long-term debt financings in May and November. Middlesex currently has two projects that are in the construction loan phase of the New Jersey SRF program as follows:

1)

In April 2018, the NJBPU approved Middlesex’s request to participate in the NJIB loan program to fund the construction of a large-diameter transmission pipeline from the Carl J. Olsen water treatment plant and interconnect with our distribution system. Middlesex closed on a $43.5 million NJIB interest-free construction loan in August 2018. Through March 31, 2020 Middlesex has drawn a total of $37.0 million and expects to continue to draw down on this construction loan through the third quarter of 2020.

2)

In March 2018, the NJBPU approved Middlesex’s request to participate in the NJIB loan program to fund the 2018 RENEW Program, which is an ongoing initiative to eliminate unlined water distribution mains in the Middlesex system. Middlesex closed on an $8.7 million NJIB construction loan in September 2018 and completed withdrawal of the proceeds in October 2019.

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The Company expects that the large-diameter transmission pipeline and the 2018 RENEW construction loans will be included in the NJIB November 2020 long-term debt financing program.

In September 2018, the NJIB announced changes to the SRF program for project funding priority ranking, the proportions of interest free loans and market interest rate loans and overall loan limits on interest free loan balances to investor-owned water utilities. These changes affect SRF projects for which the construction loan closes after September 2018. Under the amended regulations, the principal balance having a stated interest rate of zero percent (0%) is 25% of the loan balance with the remaining 75% having a market based interest rate. This is limited to the first $10.0 million of the loan. Loan amounts above $10.0 million do not participate in the 0% rate program, but do participate at the market based interest rate. As a result of all these changes, the Company’s future capital funding plan does not include participating in the NJIB SRF program unless the terms are further amended to become more favorable to the Company.

In August 2019, Middlesex priced and closed on a New Jersey Economic Development Authority (NJEDA) debt financing transaction of $53.7 million by issuing First Mortgage Bonds (FMB) designated as Series 2019A ($32.5 million at coupon interest rate of 4.0%) and Series 2019B ($21.2 million at coupon interest rate of 5.0%). The proceeds, including an issuance premium of $7.1 million, are being used to finance several projects under the Water For Tomorrow capital program initiated by the Company to upgrade and replace aging water utility infrastructure. The total proceeds of $60.8 million, initially recorded as Restricted Cash on the balance sheet, is held in escrow by a bond trustee and are drawn down by requisition for the qualifying projects. Through March 31, 2020, Middlesex has drawn a total of $23.4 million and currently expects to draw the remaining $37.4 million of proceeds, currently included in Restricted Cash, through the third quarter of 2021.

In February 2020, Middlesex requested approval from the NJBPU to borrow up to $100.0 million, in one or more private placement transactions from qualifying banks, other financial institutions, mutual funds, insurance companies and pension funds. We cannot predict whether the NJBPU will ultimately approve or deny this request, for which a decision is expected in May 2020.

In March 2018, the DEPSC approved Tidewater’s request to borrow up to $0.9 million under the Delaware SRF program to fund the replacement of an entire water distribution system of a small Delaware community. Tidewater closed on the SRF loan in May 2018. In April 2019, Tidewater received approval from the DEPSC to increase the borrowing to $1.7 million based on revised project cost estimates. Tidewater closed on the additional SRF loan in October 2019. Through March 31, 2020, Tidewater had drawn a total of $1.5 million and completed all remaining draws in April 2020.

Fair Value of Financial Instruments - The following methods and assumptions were used by the Company in estimating its fair value disclosure for financial instruments for which it is practicable to estimate that value. The carrying amounts reflected in the condensed consolidated balance sheets for cash and cash equivalents, trade receivables, accounts payable and notes payable approximate their respective fair values due to the short-term maturities of these instruments. The fair value of FMBs and SRF Bonds (collectively, the Bonds) issued by Middlesex is based on quoted market prices for similar issues. Under the fair value hierarchy, the fair value of cash and cash equivalents is classified as a Level 1 measurement and the fair value of notes payable and the Bonds in the table below are classified as Level 2 measurements. The carrying amount and fair value of the Bonds were as follows:

March 31, 2020

December 31, 2019

Carrying

Fair

Carrying

Fair

Amount

Value

Amount

Value

Bonds

$150,876

$160,550

$151,361

$160,772

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For other long-term debt for which there was no quoted market price and there is not an active trading market, it was not practicable to estimate their fair value (for details