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What changed in MIDDLESEX WATER CO's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MIDDLESEX WATER CO's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+223 added−257 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-28)

Top changes in MIDDLESEX WATER CO's 2025 10-K

223 paragraphs added · 257 removed · 163 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

55 edited+14 added−39 removed25 unchanged
Biggest changeFullagar, a licensed professional engineer, joined the Company in 1997, was named Assistant Vice President-Operations in January 2019 and promoted to Vice President-Operations in July 2019. In 10 February 2025, Mr. Fullagar was promoted to President-New Jersey Operations. Mr. Fullagar attended the New Jersey Institute of Technology, where he received a Bachelor of Science Degree in Civil Engineering. Mr.
Biggest changeSorensen attended Wake Forest University where he received a Bachelor of Science in Accounting. Robert K. Fullagar – Mr. Fullagar, a licensed professional engineer and New Jersey T4 and W4 Licensed Operator, joined the Company in 1997, was named Assistant Vice President-Operations in January 2019 and promoted to Vice President-Operations in July 2019. In February 2025, Mr.
Regulations relating to water quality require us to perform tests to ensure our water meets state and federal quality requirements. We participate in industry-related research to identify technologies that may reduce the level of 8 organic, inorganic and synthetic compounds found in water.
Regulations relating to water quality require us to perform tests to ensure our water meets state and federal quality requirements. We participate in industry-related research to identify technologies that may reduce the level of organic, inorganic and synthetic compounds found in water.
Our mission, our business philosophy and the manner in which we deliver value for our customers, our shareholders and our employees is inherent in what we, as an enterprise, profess to be our core values of Respect, Integrity, Growth, Honesty and Teamwork. Our employees’ success is a key element of the Company’s success.
Our mission, our business philosophy and the manner in which we deliver value for our customers, our shareholders and our employees, is inherent in what we, as an enterprise, profess to be our core values of Respect, Invest, Growth, Honesty and Teamwork. Our employees’ success is a key element of the Company’s success.
Middlesex also operates water and wastewater systems under contract on behalf of municipal and private clients primarily in New Jersey and Delaware. Across our regulated utility systems, we serve approximately 128,000 customers. We operate water and wastewater systems under unregulated contracts for governmental entities and private entities.
Middlesex also operates water and wastewater systems under contract on behalf of municipal and private clients primarily in New Jersey and Delaware. Across our regulated utility systems, we serve approximately 131,000 customers. We operate water and wastewater systems under unregulated contracts for governmental entities and private entities.
Pinelands Systems Pinelands Water provides water services to approximately 2,500 residential customers in Burlington County, New Jersey. Pinelands Water is not physically interconnected with the Middlesex System. Pinelands Water produced approximately 1% of our 2024 consolidated operating revenues.
Pinelands Systems Pinelands Water provides water services to approximately 2,500 residential customers in Burlington County, New Jersey. Pinelands Water is not physically interconnected with the Middlesex System. Pinelands Water produced approximately 1% of our 2025 consolidated operating revenues.
White Marsh White Marsh operates or maintains water and/or wastewater systems that serve approximately 4,300 service connections under 28 separate contracts, primarily in New Castle, Kent and Sussex Counties, Delaware. White Marsh also owns two commercial properties that are leased to Tidewater for its administrative office campus and its field operations center.
White Marsh White Marsh operates or maintains water and/or wastewater systems that serve approximately 3,700 service connections under 28 separate contracts, primarily in New Castle, Kent and Sussex Counties, Delaware. White Marsh also owns two commercial properties that are leased to Tidewater for its administrative office campus and its field operations center.
HomeServe is a leading national provider of such home maintenance service programs. USA receives a service fee for the billing, cash collection and other administrative matters associated with HomeServe’s service contracts. USA produced approximately 3% of our 2024 consolidated operating revenues.
HomeServe is a leading national provider of such home maintenance service programs. USA receives a service fee for the billing, cash collection and other administrative matters associated with HomeServe’s service contracts. USA produced approximately 2% of our 2025 consolidated operating revenues.
Prior to joining Tidewater, he served as Kent County, Delaware Public Works Director and County Engineer where he had overall responsibility for the County’s regional wastewater facilities. Mr. Patrick also held prior positions with the Delaware Department of Natural Resources and Environmental Control as well as the Delaware Division of Public Health. Brian Hague – Mr.
Prior to joining Tidewater, he served as Kent County, Delaware Public Works Director and County Engineer where he had overall responsibility for the County’s regional wastewater facilities. Mr. Patrick also held prior positions with the Delaware Department of Natural Resources and Environmental Control as well as the Delaware Division of Public Health. Robert J. Capko – Mr.
Retail customers include a mix of residential customers, large industrial concerns and commercial and light industrial facilities. These customers are located in generally well-developed areas of central New Jersey. The contract customers of the Middlesex System comprise an area of approximately 110 square miles with a population of over 200,000.
Retail customers include a mix of residential customers, large industrial concerns and commercial and light industrial facilities. These customers are located in generally well-developed areas of central New Jersey. The contract customers of the Middlesex System comprise an area of approximately 110 square miles with a population of over 0.2 million.
The aggregate pumping capacity of the four wells is 2.2 mgd. Wastewater Facilities Pinelands Wastewater System The Pinelands Wastewater System discharges into the South Branch of the Rancocas Creek through a wastewater treatment plant that provides clarification, sedimentation, filtration and disinfection. The total capacity of the plant is 0.5 mgd, and the system treated approximately 92.6 million gallons in 2024.
The aggregate pumping capacity of the four wells is 2.2 mgd. Wastewater Facilities Pinelands Wastewater System The Pinelands Wastewater System discharges into the South Branch of the Rancocas Creek through a wastewater treatment plant that provides clarification, sedimentation, filtration and disinfection. The total capacity of the plant is 0.5 mgd, and the system treated approximately 87.0 million gallons in 2025.
As the number has grown, many of Tidewater’s individual systems have been interconnected, forming several regional systems that are served by multiple water treatment facilities owned by Tidewater. 4 Pinelands Water System Water supply to our Pinelands Water System is derived from four wells which produced approximately 141.1 million gallons in 2024.
As the number has grown, many of Tidewater’s individual systems have been interconnected, forming several regional systems that are served by multiple water treatment facilities owned by Tidewater. Pinelands Water System Water supply to our Pinelands Water System is derived from four wells which produced approximately 123 million gallons in 2025.
Olsen Surface Water Treatment Plant (CJO Plant)-10.3 billion gallons; ● Company-owned wells (ground water)-2.9 billion gallons; and ● The balance purchased from a non-affiliated water utility regulated by the New Jersey Board of Public Utilities (NJBPU) under an agreement which expires February 27, 2026.
Olsen Surface Water Treatment Plant (CJO Plant)-10.1 billion gallons; • Company-owned wells (ground water)-2.7 billion gallons; and • The balance purchased from a non-affiliated water utility regulated by the New Jersey Board of Public Utilities (NJBPU) under an agreement which expires February 27, 2031.
Tidewater augments its water production with annual purchases of up to 75.0 million gallons of treated water from the City of Dover, Delaware. Tidewater does not have a central water treatment facility for the over 480 separate communities it serves.
Tidewater augments its water production with annual purchases of approximately 75.0 million gallons of treated water from the City of Dover, Delaware. Tidewater does not have a central water treatment facility for the over 485 separate communities it serves.
The Middlesex System produced approximately 67% of our 2024 consolidated operating revenues.
The Middlesex System produced approximately 67% of our 2025 consolidated operating revenues.
In New Jersey, the Pinelands System is not interconnected with the Middlesex System. We believe we have adequate sources of water supply to meet the current service requirements of our present customers in New Jersey and Delaware. Middlesex System Our Middlesex System produced approximately 14.3 billion gallons in 2024 from: ● The Carl J.
In New Jersey, the Pinelands System is not interconnected with the Middlesex System. We believe we have adequate sources of water supply to meet the current service requirements of our present customers in New Jersey and Delaware. 3 Table of Contents Middlesex System Our Middlesex System produced approximately 13.8 billion gallons in 2025 from: • The Carl J.
Financial Information Consolidated operating revenues, operating income and net income are as follows: (Thousands of Dollars) Years Ended December 31, 2024 2023 2022 Operating Revenues $ 191,877 $ 166,274 $ 162,434 Operating Income $ 53,210 $ 39,223 $ 47,333 Net Income $ 44,351 $ 31,524 $ 42,429 3 Operating revenues were earned from the following sources: Years Ended December 31, 2024 2023 2022 Residential 51.0 % 52.1 % 52.3 % Commercial 16.6 14.4 14.0 Industrial 7.2 7.0 6.9 Fire Protection 7.4 7.6 7.8 Contract Sales 11.0 11.5 11.6 Contract Operations 6.8 7.4 7.4 Total 100.0 % 100.0 % 100.0 % Water Supplies and Contracts Our New Jersey and Delaware water supply systems are physically separate and are not interconnected.
Financial Information Consolidated operating revenues, operating income and net income are as follows: (Thousands of Dollars) Years Ended December 31, 2025 2024 2023 Operating Revenues $ 194,694 $ 191,877 $ 166,274 Operating Income $ 54,376 $ 53,210 $ 39,223 Net Income $ 42,822 $ 44,351 $ 31,524 Operating revenues were earned from the following sources: Years Ended December 31, 2025 2024 2023 Residential 52.7 % 51.0 % 52.1 % Commercial 15.6 16.6 14.4 Industrial 6.9 7.2 7.0 Fire Protection 7.8 7.4 7.6 Contract Sales 10.6 11.0 11.5 Contract Operations 6.4 6.8 7.4 Total 100.0 % 100.0 % 100.0 % Water Supplies and Contracts Our New Jersey and Delaware water supply systems are physically separate and are not interconnected.
Tidewater System Tidewater, together with its wholly-owned subsidiary, Southern Shores, provides water services to approximately 62,000 retail customers for residential, commercial and fire protection purposes in over 480 separate communities 2 in New Castle, Kent and Sussex Counties, Delaware. The Tidewater System produced approximately 24% of our 2024 consolidated operating revenues.
Tidewater System Tidewater, together with its wholly-owned subsidiary, Southern Shores, provides water services to approximately 65,000 retail customers for residential, commercial and fire protection purposes in over 485 separate communities in New Castle, Kent and Sussex Counties, Delaware. The Tidewater System produced approximately 25% of our 2025 consolidated operating revenues.
Simpson 51 Vice President -Information Technology and Chief Technology Officer Bruce E. Patrick 56 President- Delaware Operations Brian Hague 52 Vice President - Communications and Corporate Affairs Robert J. Capko 51 Corporate Controller and Principal Accounting Officer Nadine Leslie – Ms. Leslie joined the Company as President and Chief Executive Officer in March 2024. Ms.
Simpson 52 Vice President -Information Technology and Chief Technology Officer Bruce E. Patrick 57 President- Delaware Operations Robert J. Capko 52 Corporate Controller and Principal Accounting Officer Nadine Leslie – Ms. Leslie joined the Company as President and Chief Executive Officer in March 2024. Ms.
Leslie holds a Bachelor of Science degree in civil engineering from the Faculte des Sciences in Haiti and completed an internship/scholarship program in urban planning at La Cambre University in Belgium. Ms. Leslie currently serves as a Director on the Board of Directors of Provident Financial Services, Inc. (since June 2021) and Syensqo SA/NV (since December 2023). Mohammed G.
Leslie holds a Bachelor of Science degree in civil engineering from the Faculte des Sciences in Haiti and completed an internship/scholarship program in urban planning at La Cambre University in Belgium. Ms. Leslie currently serves as a Director on the Board of Directors of Provident Financial Services, Inc.
Treatment of wastewater in the Pinelands Wastewater System includes the use of rotating biological contactors. The NJDEP and DEDPH monitor our activities and review the results of water quality tests that are performed for adherence to applicable regulations.
Treatment of groundwater in the Pinelands Water System (primary disinfection only) is performed at individual well sites. Treatment of wastewater in the Pinelands Wastewater System includes the use of rotating biological contactors. The NJDEP and DEDPH monitor our activities and review the results of water quality tests that are performed for adherence to applicable regulations.
Zerhouni 49 Senior Vice President, Chief Financial Officer and Treasurer Gregory Sorensen 54 Vice President and Chief Operating Officer Robert K. Fullagar 58 President – New Jersey Operations Lorrie B. Ginegaw 49 Vice President - Human Resources Jay L. Kooper 52 Vice President - General Counsel and Secretary Georgia M.
Zerhouni 50 Senior Vice President, Chief Financial Officer and Treasurer Gregory S. Sorensen 55 Vice President and Chief Operating Officer Robert K. Fullagar 59 President – New Jersey Operations Lorrie B. Ginegaw 50 Vice President - Human Resources Jay L. Kooper 53 Vice President - General Counsel and Secretary Georgia M.
In April 2024, the USEPA finalized drinking water regulations for PFAS, establishing maximum contaminant levels (MCLs) for three PFAS compounds (Regulated PFAS) that are lower than the current New Jersey Department of Environmental Protection MCLs adhered to by the Company.
In April 2024, the USEPA finalized drinking water regulations for Perfluoroalkyl Substances (PFAS), establishing maximum contaminant levels (MCLs) for three PFAS compounds (Regulated PFAS) that are lower than the current NJDEP MCLs adhered to by the Company.
We are subject to environmental and water quality regulation by the following regulatory agencies (collectively, the Government Environmental Regulatory Agencies): ● United States Environmental Protection Agency (USEPA); ● New Jersey Department of Environmental Protection (NJDEP) with respect to operations in New Jersey; and ● Delaware Department of Natural Resources and Environmental Control, the Delaware Department of Health and Social Services-Division of Public Health (DEDPH), and the Delaware River Basin Commission with respect to operations in Delaware.
We are subject to environmental and water quality regulation by the following regulatory agencies (collectively, the Government Environmental Regulatory Agencies): • United States Environmental Protection Agency (USEPA); • New Jersey Department of Environmental Protection (NJDEP) with respect to operations in New Jersey; and • Delaware Department of Natural Resources and Environmental Control, the Delaware Department of Health and Social Services-Division of Public Health (DEDPH), and the Delaware River Basin Commission with respect to operations in Delaware. 5 Table of Contents In addition, our issuances of equity securities are subject to the prior approval of the NJBPU and require registration with the United States Securities and Exchange Commission.
Tidewater System Our Tidewater System, together with our wholly-owned subsidiary, Southern Shores, produced approximately 3.3 billion gallons in 2024, primarily from 172 wells. Tidewater expects to submit applications to Delaware regulatory authorities for the approval of additional wells as growth, customer demand and water quality warrant.
The untreated surface water is pumped to, and treated at, the CJO Plant. Tidewater System Our Tidewater System, together with our wholly-owned subsidiary, Southern Shores, produced approximately 3.2 billion gallons in 2025, primarily from 166 wells. Tidewater expects to submit applications to Delaware regulatory authorities for the approval of additional wells as growth, customer demand and water quality warrant.
In anticipation of these new USEPA standards, in 2023, the Company began implementing its strategy to meet these lower MCLs for Regulated PFAS and is currently performing preliminary engineering studies to ensure that effective PFAS treatment approaches are implemented.
In anticipation of these new USEPA standards, in 2023, the Company began implementing its strategy to meet these lower MCLs for Regulated PFAS and is finalizing preliminary engineering studies and has begun preliminary design of for PFAS treatment at the Company's largest water treatment facility in New Jersey to ensure that effective PFAS treatment approaches are implemented.
Pinelands Wastewater provides wastewater collection and treatment services to approximately 2,500 residential customers and one municipal wastewater system in Burlington County, New Jersey. Pinelands Wastewater produced approximately 1% of our 2024 consolidated operating revenues.
Pinelands Wastewater provides wastewater collection and treatment services to approximately 2,500 residential customers and one municipal wastewater system in Burlington County, New Jersey.
The principal source of surface water for the Middlesex System is the Delaware & Raritan Canal, which is owned by the State of New Jersey and operated by the New Jersey Water Supply Authority (NJWSA).
The principal source of surface water for the Middlesex System is the Delaware & Raritan Canal, which is owned by the State of New Jersey and operated by the New Jersey Water Supply Authority (NJWSA). Middlesex has an agreement with NJWSA for the purchase of untreated water through November 30, 2048.
Capko was an Audit Senior Manager with Deloitte & Touche LLP, with a focus on publicly traded regulated utilities including several regulated public utility clients subject to the jurisdiction of the NJBPU. 11
Capko was an Audit Senior Manager with Deloitte & Touche LLP, with a focus on publicly traded regulated utilities including several regulated public utility clients subject to the jurisdiction of the NJBPU. Mr. Capko serves as the Treasurer of the National Association of Water Companies’ New Jersey Chapter.
He was promoted to Vice President and General Manager in April 2012, Executive Vice President in April 2023, and President in December 2023. Mr. Patrick has extensive experience in regulatory compliance, permitting, planning and design.
Patrick, a licensed professional engineer, joined Tidewater in February 2002 as Vice President of Engineering. He was promoted to Vice President and General Manager in April 2012, Executive Vice President in April 2023, and President in December 2023. Mr. Patrick has extensive experience in regulatory compliance, permitting, planning and design.
Kooper serves as a volunteer director on selected non-profit utility industry-related Boards including the National Association of Water Companies (current Director and Chairman of the New Jersey Chapter) and the New Jersey State Bar Association’s Public Utility Law Section (current Consultor and Past Chairman) and on other non-profit boards based in New Jersey, including as President of Temple B’Nai Abraham in Livingston, New Jersey and as a Director of the Crohn’s and Colitis Foundation’s New Jersey Chapter.
Kooper serves as a volunteer director on selected non-profit utility industry-related Boards including the New Jersey State Bar Association’s Public Utility Law Section (current Consulter and Past Chairman) and serves as the Chairman of the National Association of Water Companies’ New Jersey Chapter.
Capko was appointed Principal Accounting Officer of Middlesex. Mr. Capko is also a Director and Treasurer of Tidewater and White Marsh and Controller of USA, USA-PA, Pinelands Water and Pinelands Wastewater. Prior to joining Middlesex, Mr.
Capko, a Certified Public Accountant, joined the Company in 2009 as Corporate Controller. On March 28, 2023, Mr. Capko was appointed Principal Accounting Officer of Middlesex. Mr. Capko is also a Director and Treasurer of Tidewater and White Marsh and Controller of USA, USA-PA, Pinelands Water and Pinelands Wastewater. Prior to joining Middlesex, Mr.
White Marsh produced approximately 1% of our 2024 consolidated operating revenues.
White Marsh produced approximately 0.5% of our 2025 consolidated operating revenues.
Georgia M. Simpson – Ms. Simpson joined the Company in 2009, was named Assistant Vice President-Information Technology in January 2019 and promoted to Vice President- Information Technology in July 2019. In April 2022, Ms. Simpson was named Chief Technology Officer. Prior to joining the Company, Ms.
Simpson joined the Company in 2009, was named Assistant Vice President-Information Technology in January 2019 and promoted to Vice President- Information Technology in July 2019. In April 2022, Ms. Simpson was named Chief Technology Officer. Prior to joining the Company, Ms. Simpson held various Information Technology positions and has gained an extensive array of technical and business computer certifications. Ms.
Prior to joining the Company, Mr. Sorensen served as President, West Region at Liberty Utilities where he led a team of 800 professionals delivering safe and reliable water, wastewater, and electric service in Arizona, California, Texas and Chile. At Liberty, Mr. Sorensen had nearly 20 years of progressive leadership roles including in accounting, customer service, engineering, operations and general management.
Sorensen - Mr. Sorensen joined the Company in December 2024 as Vice President and Chief Operating Officer. Prior to joining the Company, Mr. Sorensen served as President, West Region at Liberty Utilities where he led a team of 800 professionals delivering safe and reliable water, wastewater, and electric service in Arizona, California, Texas and Chile. At Liberty, Mr.
Ginegaw serves as a volunteer director on the Board of the New Jersey Utilities Association. Jay L. Kooper – Mr. Kooper joined the Company in 2014 as Vice President and General Counsel and serves as Secretary for the Company and all subsidiaries. Prior to joining the Company, Mr.
Kooper joined the Company in 2014 as Vice President and General Counsel and serves as Secretary for the Company and all subsidiaries. Prior to joining the Company, Mr.
We treat the groundwater supplies in our Middlesex System with chlorination for primary disinfection purposes and use air stripping for removal of volatile organic compounds. Surface water treatment in our Middlesex System is by conventional treatment; coagulation, sedimentation and filtration. The treatment process includes pH adjustment, ozone and chlorination for disinfection, and corrosion control for the distribution system.
In addition, we use granular activated carbon filtration for Regulated PFAS compounds treatment. Surface water treatment in our Middlesex System is by conventional treatment; coagulation, sedimentation and filtration. The treatment process includes pH adjustment, ozone and chlorination for disinfection, and corrosion control for the distribution system.
Zerhouni served in various roles of increasing responsibility up to Senior Manager in the audit practice of PricewaterhouseCoopers LLP. Mr. Zerhouni attended Franklin University, where he received a Bachelor of Science in Accounting and a Masters in Business Administration. Gregory Sorensen - Mr. Sorensen joined the Company in December 2024 as Vice President and Chief Operating Officer.
Prior to joining SJW Group, he was the Chief Financial Officer for Veolia North America’s regulated utility business. Mr. Zerhouni served in various roles of increasing responsibility up to Senior Manager in the audit practice of PricewaterhouseCoopers LLP. Mr. Zerhouni attended Franklin University, where he received a Bachelor of Science in Accounting and a Masters in Business Administration. Gregory S.
Treatment of groundwater in our Tidewater System is by chlorination for disinfection purposes and, in some cases, pH adjustment and filtration for nitrate and iron removal and granular activated carbon filtration for organics removal. Chloramination is used for final disinfection at Southern Shores. Treatment of groundwater in the Pinelands Water System (primary disinfection only) is performed at individual well sites.
Treatment of groundwater in our Tidewater System is by chlorination for disinfection purposes, ion exchange for PFAS treatment and, in some cases, pH adjustment and filtration for nitrate and iron removal. Chloramination is used for final disinfection at Southern Shores and at a Tidewater plant.
In addition, there can be no assurance that any future rate increases will be granted or, if granted, that they will be in the amounts requested.
Thus, we may not achieve the rates of return authorized by the Public Utility Commissions. In addition, there can be no assurance that any future rate increases will be granted or, if granted, that they will be in the amounts requested.
In the event that temperatures during the typically warmer months are cooler than normal, or if there is more rainfall than normal, the customer demand for our water may decrease and therefore, adversely affect our revenues. 9 Management Upon the retirements of President and Chief Executive Officer Dennis W.
In the event that temperatures during the typically warmer months are cooler than normal, or if there is more rainfall than normal, the customer demand for our water may decrease and therefore, adversely affect our revenues. 7 Table of Contents Management This table lists information concerning our executive management team: Name Age Principal Position(s) Nadine Leslie 62 President, Chief Executive Officer and Board of Directors Chair Mohammed G.
Safety The Company has implemented safety programs and management practices designed to promote a culture of safety to protect its employees. This includes required trainings for employees, as well as specific qualifications and certifications for certain operational employees.
Safety The Company has implemented safety programs and management practices designed to promote a safe work environment and protect employee health. These programs include required safety training for all employees, as well as role-specific qualifications and certifications for certain operational positions.
USA-PA USA-PA operates the City of Perth Amboy, New Jersey’s (Perth Amboy) water and wastewater systems under a ten-year agreement, which expires in December 2028. In addition to performing day-to day operations, USA-PA is also responsible for emergency responses and management of capital projects funded by Perth Amboy. USA-PA produced approximately 3% of our 2024 consolidated operating revenues.
In addition to performing day-to day operations, USA-PA is also responsible for emergency responses and management of capital projects funded by Perth Amboy. USA-PA produced approximately 4% of our 2025 consolidated operating revenues.
Simpson serves as a member of the Delaware Cyber Security Advisory Council, the Society for Information Management, New Jersey chapter and the Project Management Institute, New Jersey chapter. Bruce E. Patrick – Mr. Patrick, a licensed professional engineer, joined Tidewater in February 2002 as Vice President of Engineering.
Simpson graduated from Monroe University in New York with a Bachelor’s Degree in Information Systems. Ms. Simpson serves as a member of the Delaware Cyber Security Advisory Council, the Society for Information Management, New Jersey chapter and the Project Management Institute, New Jersey chapter. Bruce E. Patrick – Mr.
Regulation of Rates and Services For regulated rate setting purposes, we account separately for our regulated utility operations to facilitate independent rate setting by the applicable Public Utility Commissions. 6 In determining our regulated utility rates, the respective Public Utility Commissions consider the revenue, expenses and utility infrastructure used and useful in providing service to the public.
In determining our regulated utility rates, the respective Public Utility Commissions consider the revenue, expenses and utility infrastructure used and useful in providing service to the public. Rate determinations by the respective Public Utility Commissions do not guarantee achievement by our regulated utility companies of specific rates of return for our regulated utility operations.
Water systems have five years (by April 2029) to implement solutions that reduce Regulated PFAS if monitoring shows that drinking water levels exceed these MCLs.
Delaware law requires all water systems to notify their customers beginning in 2026 if PFAS levels exceed the proposed EPA MCL . Water systems have five years (by April 2029) to implement treatment solutions if monitoring shows that drinking water levels exceed these MCLs.
Workforce As of December 31, 2024, the Company had 360 employees. None of our employees is subject to a collective bargaining agreement. We believe our employee relations are positive. Employee Compensation and Benefits We offer comprehensive competitive employee compensation and benefit programs consistent with job functions, skill levels, experience, knowledge and geographic location.
Workforce As of December 31, 2025, the Company had 395 employees. None of our employees are subject to a collective bargaining agreement. We believe our employee relations are positive. Employee Compensation and Benefits The Company provides competitive compensation and benefits programs designed to attract, retain, and motivate qualified employees.
Statements on belonging and inclusion can be found on our website and are not part of this Annual Report on Form 10-K. Competition Our business in our franchised service areas is substantially free from direct competition for growth with other public utilities, municipalities and other entities.
Competition Our business in our franchised service areas is substantially free from direct competition for growth with other public utilities, municipalities and other entities.
Zerhouni – Mr. Zerhouni, a Certified Public Accountant, joined the Company in June 2024 as Senior Vice President, Chief Financial Officer and Treasurer. He was most recently the Senior Vice President of Finance and Principal Accounting Officer of SJW Group. Prior to joining SJW Group, he was the Chief Financial Officer for Veolia North America’s regulated utility business. Mr.
(since June 2021), Hackensack Meridian Health (since July 2020) and Syensqo SA/NV (from December 2023 through July 2025). Mohammed G. Zerhouni – Mr. Zerhouni, a Certified Public Accountant, joined the Company in June 2024 as Senior Vice President, Chief Financial Officer and Treasurer. He was most recently the Senior Vice President of Finance and Principal Accounting Officer of SJW Group.
Fullagar serves as Sector Chair of the New Jersey Infrastructure Advisory Committee and is a Member of the NJDEP’s Licensed Operator Advisory Committee. Lorrie B. Ginegaw – Ms. Ginegaw joined Tidewater in 2004 and in 2007 was promoted to Director of Human Resources for Middlesex. In March 2012, Ms. Ginegaw was named Vice President-Human Resources.
Fullagar was promoted to President-New Jersey Operations. Mr. Fullagar attended the New Jersey Institute of Technology, where he received a Bachelor of Science Degree in Civil Engineering. Mr. Fullagar serves as Sector Chair of the New Jersey Infrastructure Advisory Committee and is a Member of the NJDEP’s Licensed Operator Advisory Committee. Lorrie B. Ginegaw – Ms.
Employee Development and Training The Company employs various training and other educational programs and has developed company-wide and project-specific training and educational programs, including tuition assistance for full-time employees enrolled in pre-approved undergraduate or graduate courses or professional licensing courses.
The Company also offers tuition assistance for eligible full-time employees enrolled in pre-approved undergraduate, graduate, or professional licensing programs.
Beginning in April 2029, water systems that have Regulated PFAS in drinking water which exceeds one or more of these MCLs must take action to reduce levels of these PFAS compounds in their drinking water and must provide notification to the public of the violation.
The USEPA has announced its plans to issue a proposed rule extending the compliance date to 2031, however currently no rule has been published. 6 Table of Contents Beginning in April 2029 and absent an extension by the USEPA, water systems that have Regulated PFAS in drinking water which exceeds one or more of these MCLs must take action to comply with the USEPA rule and must provide notification to the public of the violation.
Prior to joining the Company, Ms. Ginegaw worked in various human resources positions in the healthcare and transportation/logistics industries and is a Society for Human Resource Management Certified Professional. Ms. Ginegaw attended Wichita State University, where she received a Bachelor of Arts in Field Studies, Business and Psychology, and Wilmington University, where she received a Master’s in Business Administration. Ms.
Ginegaw joined Tidewater in 2004 and in 2007 was promoted to Director of Human Resources for Middlesex. In March 2012, Ms. Ginegaw was named Vice President-Human Resources. Prior to joining the Company, Ms. Ginegaw worked in various human resources positions in the healthcare and transportation/logistics industries and is a Society for Human Resource Management Certified Professional. Ms.
Before joining Liberty, Mr. Sorensen worked in various roles in accounting and finance for an international call center company in Arizona and in public accounting in North Carolina and Georgia, where he maintains his Certified Public Accountant license. Mr. Sorensen attended Wake Forest University where he received a Bachelor of Science in Accounting. Robert K. Fullagar – Mr.
Sorensen had nearly 20 years of progressive leadership roles including in accounting, customer service, engineering, operations and general management. Before joining Liberty, Mr. Sorensen worked in various roles in accounting and finance for an international call center company in Arizona and in public accounting in North Carolina and Georgia. Mr.
In addition, our issuances of equity securities are subject to the prior approval of the NJBPU and require registration with the United States Securities and Exchange Commission. Our issuances of long-term debt securities are subject to the prior approval of the respective state Public Utility Commissions.
Our issuances of long-term debt securities are subject to the prior approval of the respective state Public Utility Commissions. Regulation of Rates and Services For regulated rate setting purposes, we account separately for our regulated utility operations to facilitate independent rate setting by the applicable Public Utility Commissions.
All employees receive training to identify and report operational and financial risks, as well as risks to Company brand and reputation, which fosters a personal culture of accountability and reinforces our commitment to a safe and sustainable workplace. All employees receive cybersecurity training and other education regarding their use of sensitive data.
Employees receive training to identify and report operational, financial, cybersecurity, physical security and other enterprise risks, including risks related to the protection and use of sensitive data, physical risks and risks to the Company’s brand and reputation, reinforcing accountability and responsible risk management.
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Middlesex is under contract with the NJWSA, which expires November 30, 2048, and provides for average purchases of 27.0 mgd, with a peak up to 47.0 mgd, of untreated water from the Delaware & Raritan Canal, augmented by the Round Valley/Spruce Run Reservoir System. The untreated surface water is pumped to, and treated at, the CJO Plant.
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Pinelands Wastewater produced approximately 1% of our 2025 consolidated operating revenues. 2 Table of Contents USA-PA USA-PA operates the City of Perth Amboy, New Jersey’s (Perth Amboy) water and wastewater systems under a ten-year agreement, which expires in December 2028.
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These programs are periodically independently evaluated by a nationally recognized consulting firm to gauge effectiveness and are benchmarked against industry peers and the overall markets in which we operate our businesses. Compensation increases and incentive compensation are based on merit, which is communicated to employees and documented in our bi-annual performance evaluation process.
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This agreement with the NJWSA provides for average purchases of 27 million gallons a day (mgd), with a peak up to 47.0 mgd. Pricing is set annually by the NJWSA through a public rate making process. The agreement has provisions for additional pricing in the event Middlesex overdrafts or exceeds certain monthly and annual thresholds.
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Benefits include a variety of programs to enhance employee overall physical, mental and financial health and well-being, including healthcare insurance, employer funded retirement savings plans, life insurance, disability insurance, accident insurance, tuition reimbursement, flu shots, wellness newsletters and webinars, flexible hybrid office and remote work capabilities, incentive programs for achieving fitness milestones, financial counseling, elder care assistance, substance abuse support and more.
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Compensation is structured based on job responsibilities, skill level, experience, and geographic market considerations. The Company periodically reviews and evaluates its compensation programs, including through independent benchmarking against industry peers and relevant labor markets.
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All employees have been empowered to report, and immediately stop work which, in their personal judgement, is unsafe or is not consistent with our safety policies and procedures. They can take this action without fear of reprisal.
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Compensation increases and incentive compensation are merit-based and linked to individual performance, as documented through the Company’s bi-annual performance management process. 4 Table of Contents The Company offers a range of benefits intended to support employees’ physical, mental, and financial well-being, including healthcare coverage, employer-funded retirement plans, insurance programs, and other benefits consistent with market practice.
Removed
Our Executive Management team and our Board of Directors continually assess succession plans, leadership development progress 5 and policies and strategies regarding recruitment, retention, career development, diversity, equity and inclusion. Formalized succession planning strategies have been developed for key leadership positions.
Added
Employees are encouraged to identify and report unsafe conditions and are authorized to stop work they reasonably believe presents a safety risk or does not comply with Company safety policies and procedures. The Company maintains a policy of non-retaliation for employees who raise safety concerns or exercise stop-work authority in good faith.
Removed
Belonging & Inclusion The Company is committed to fostering a workplace where employees feel valued, respected, and empowered to contribute their unique perspectives. The Company is focused on recruitment and/or development of both external and internal candidates so that all prospective and current employees are provided an opportunity to advance their careers.
Added
Employee Development and Training The Company maintains training and educational programs designed to support workforce capability, operational effectiveness, and risk awareness. These programs include company-wide and role-specific training initiatives delivered through Middlesex Water Company Academy, the Company’s internal learning and development framework that supports onboarding, role-based training, leadership development, and ongoing professional development.
Removed
Rate determinations by the respective Public Utility Commissions do not guarantee achievement by our regulated utility companies of specific rates of return for our regulated utility operations. Thus, we may not achieve the rates of return authorized by the Public Utility Commissions.
Added
Executive management and the Board of Directors regularly review leadership development progress, workforce planning, and succession planning for key leadership positions. In addition, formal succession plans have also been established for certain critical roles to support business continuity and long-term organizational needs.
Removed
Middlesex Rate Matters The approval by the NJBPU in February 2024 of the negotiated settlement of the Middlesex 2023 base rate case is expected to increase annual operating revenues by $15.4 million, effective March 1, 2024.
Added
Workplace Culture The Company seeks to maintain a professional work environment in which employees are treated with respect and provided opportunities to contribute and develop based on their skills, experience, and performance. The Company focuses on the recruitment and development of both external and internal candidates to support workforce continuity and organizational effectiveness.
Removed
The approved tariff rates were designed to recover increased operating costs as well as a return on invested capital of $563.1 million, based on an authorized return on common equity of 9.6%. Middlesex has made capital infrastructure investments to ensure prudent upgrade and replacement of its utility assets to support continued regulatory compliance, resilience and overall quality of service.
Added
Rate Matters Middlesex - In February 2026, the NJBPU approved: • $14.5 million of base rate increases for Middlesex and Pinelands, effective February 23, 2026; • A Resiliency and Environmental System Improvement Charge (RESIC) Foundational Filing, which allows for the recovery of certain costs of future Middlesex and Pinelands investments related to compliance with requirements to address existing and emerging chemical elements or compounds, installation of new plant or equipment or replacement of existing plant or equipment to further maintain, enhance, or improve resiliency, health, safety or environmental protection; and • A Distribution System Improvement System Charge (DSIC) Foundational Filing, which allows for the recovery of future Middlesex and Pinelands Water investments in qualifying capital improvements to their water distribution system.
Removed
In August 2023, Middlesex and 3M Company (3M) executed a settlement agreement (Settlement Agreement) to resolve a lawsuit Middlesex previously initiated claiming 3M introduced Perfluoroalkyl Substances (PFAS) into the Company’s water supply for its Park Avenue Wellfield Treatment Plant (Park Avenue Plant).
Added
In January 2026, the NJBPU approved the merger of Pinelands into Middlesex through a corporate reorganization. In addition to above, Middlesex is currently recovering costs associated with its Lead Service Line Replacement Plan, prior DISC eligible investments and purchased water. Tidewater - In July 2025, the DEPSC approved a $5.5 million base rate increase for Tidewater, effective July 3, 2025.
Removed
The rate case settlement provided that the net proceeds from the 3M Settlement Agreement were to be used to mitigate the increase in customer rates and reimburse Middlesex for previously incurred costs for the construction of the Park Avenue Plant PFAS treatment upgrades, including depreciation and carrying costs.
Added
In addition to the above, Tidewater is currently recovering costs associated with DSIC investments and Tidewater's obligation to identify and inventory lead service lines. For additional information on these rate matters, see Note 2, Rate and Regulatory Matters .
Removed
This resulted in the reclassification of $48.3 million from Regulatory Liabilities to Contributions in Aid of Construction from the December 31, 2023 balance sheet.
Added
Similarly, in Delaware the Company currently treats for PFAS at four locations and is implementing a strategy to treat at other locations as needed to ensure compliance with the new regulation. We treat the groundwater supplies in our Middlesex System with chlorination for primary disinfection purposes and use air stripping for removal of volatile organic compounds.
Removed
In 2024, the Company also recognized the recovery of $0.9 million for depreciation and $4.1 million for carrying costs associated with the Park Avenue Plant PFAS treatment upgrades, as well as the recovery of $2.6 million of previously incurred operating treatment costs while the Park Avenue Plant PFAS treatment upgrades were in process.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeCompliance with those laws and regulations requires us to incur costs and we are subject to fines or other sanctions for non-compliance. Government environmental regulatory agencies regulate our operations in New Jersey and Delaware with respect to water supply, treatment and distribution systems and the quality of water.
Biggest changeWe are subject to environmental laws and regulations, including water quality and wastewater effluent quality regulations, as well as other state and local regulations. Compliance with those laws and regulations requires us to incur costs and we are subject to fines or other sanctions for non-compliance.
Financial Risks We depend upon our ability to raise money in the capital markets to finance some of the costs of complying with laws and regulations, including environmental laws and regulations or to pay for some of the costs of improvements to or the expansion of our utility system assets.
Financial Risks We depend upon our ability to raise money in the capital markets to finance some of the costs of complying with laws and regulations, including environmental laws and regulations and to pay for some of the costs of improvements to or the expansion of our utility system assets.
Unexpected conditions may interfere with our water supply sources. Drought and overuse of underground aquifers may limit the availability of ground and/or surface water. Freezing weather may also contribute to water transmission interruptions caused by water main breakage. Any interruption in our water supply could cause a reduction in our revenue and profitability.
Unexpected conditions may interfere with our water supply sources. Drought and overuse of underground aquifers may limit the availability of ground and/or surface water. Freezing weather may also contribute to water transmission and distribution interruptions caused by water main breakage. Any interruption in our water supply could cause a reduction in our revenue and profitability.
Losses under these contracts, or our failure or inability to perform or renew such agreements, may have a material adverse effect on our financial condition and results of operations. 14 Capital market conditions and key assumptions may adversely impact the value of our postretirement benefit plan assets and liabilities.
Losses under these contracts, or our failure or inability to perform or renew such agreements, may have a material adverse effect on our financial condition and results of operations. Capital market conditions and key assumptions may adversely impact the value of our postretirement benefit plan assets and liabilities.
Contamination of the water supply or the water service provided to our customers could result in substantial injury or damage to our customers, employees or others and we could be exposed to substantial claims and litigation, which are inherently subject to uncertainties and are potentially subject to unfavorable regulatory and/or legal actions.
Contamination of the water supply or the water service provided to our customers could result in substantial injury or damage to our customers, employees or others and we could be exposed to substantial claims and litigation, which are 9 Table of Contents inherently subject to uncertainties and are potentially subject to unfavorable regulatory and/or legal actions.
Our computer and communications systems and operations 16 could be damaged or interrupted by natural disasters, cyber-attacks, power loss and internet, telecommunications or data network failures or acts of war or terrorism or similar events or disruptions.
Our computer and communications systems and operations could be damaged or interrupted by natural disasters, cyber-attacks, power loss and internet, telecommunications or data network failures or acts 13 Table of Contents of war or terrorism or similar events or disruptions.
We are also subject to regulations related to fire protection services in New Jersey and Delaware. In New Jersey there is no state-wide fire protection regulatory agency. However, New Jersey regulations exist as to the size of piping required regarding the provision of fire protection services.
We are also subject to regulations related to fire protection services in New Jersey and Delaware. In New Jersey there is no state-wide fire protection regulatory agency. However, New Jersey regulations exist as to the size of piping required regarding the provision of fire protection services. In Delaware, fire protection is regulated statewide by the Office of State Fire Marshal.
Similarly, the DEPSC regulates our public utility companies in Delaware. We cannot provide assurance as to when we will request approval for any such matter, nor can we predict whether these Public Utility Commissions will approve, deny or reduce the amount of such requests. Certain costs are not completely within our control.
We cannot provide assurance as to when we will request approval for any such matter, nor can we predict whether these Public Utility Commissions will approve, deny or reduce the amount of such requests. Certain costs are not completely within our control.
There are also similar NJDEP regulations for our New Jersey water systems. The NJDEP and DEDPH monitor our activities and review the results of water quality tests we perform for adherence to applicable regulations. In addition, Government Environmental Regulatory Agencies are continually reviewing regulations governing the limits of certain organic compounds found in the water as byproducts of treatment.
The NJDEP and DEDPH monitor our activities and review the results of water quality tests we perform for adherence to applicable regulations. In addition, Government Environmental Regulatory Agencies are continually reviewing regulations governing the limits of certain organic compounds found in the water as byproducts of treatment.
Our regulated utility companies cannot issue debt or equity securities without prior regulatory approval. We require financing from external sources to fund the ongoing capital program for the improvement in our utility system assets and for planned expansion of those systems. We expect to spend approximately $387 million for capital projects through 2027.
Neither we nor our regulated utility companies can issue debt or equity securities without prior regulatory approval. We require financing from external sources to fund the ongoing capital program for the improvement in our utility system assets and for planned expansion of those systems. We expect to spend approximately $506 million for capital projects through 2028.
If we lose the services of certain members of our team, or are unable to attract and retain qualified personnel in key roles, our operating results could be negatively impacted.
If we lose the services of certain members of our team, or are unable to attract and retain qualified personnel in key roles, our operating results could be negatively impacted. ITEM 1B. UNRESOLVED STAFF COMMENTS. None.
Although some or all potential expenditures and costs with respect to our regulated businesses could be recovered through rates we charge to our customers, there can be no assurance that the NJBPU or the DEPSC would authorize recovery of such costs, in whole or in part. Regulatory Risks Our revenue and earnings depend on the rates we charge our customers.
Although some or all potential expenditures and costs with respect to our regulated businesses could be recovered through rates we charge to our customers, there can be no assurance that the NJBPU or the DEPSC would authorize recovery of such costs, in whole or in part, in a timely manner or at all.
Competing entities have challenged, and may challenge in the future, our applications for new franchises. Also, third parties entering into agreements to operate municipal utility systems may adversely affect the management of our long-term agreements to supply water or wastewater services on a contract basis to those municipalities, which could adversely affect our financial results.
Also, third parties entering into agreements to operate municipal utility systems may adversely affect the management of our long-term agreements to supply water or wastewater services on a contract basis to those municipalities, which could adversely affect our financial results.
We believe cash generated from operations and, if necessary, borrowings under existing credit facilities, will be sufficient to enable us to make our debt payments as they become due.
We believe cash generated from operations and, if necessary, borrowings under existing credit facilities, will be sufficient to enable us to make our debt payments as they become due. If, however, we do not generate sufficient cash, we may be required to attempt to refinance our obligations or sell additional equity.
In Delaware, fire protection is regulated statewide by the Office of State Fire Marshal. 13 The cost of compliance with the water and wastewater effluent quality standards depends in part on the limits set in the regulations and on the methods selected to comply with these standards.
The cost of compliance with the water and wastewater effluent quality standards depends in part on the limits set in the regulations and on the methods selected to comply with these standards.
We have incurred, and will continue to incur, costs for security measures in efforts to protect against such risks. 12 Climate variability may cause weather volatility in the future, which may impact water usage and related revenue or, may require additional expenditures to reduce risk associated with any increasing storm, flood, drought or other weather occurrences.
Climate variability may cause weather volatility in the future, which may impact water usage and related revenue or, may require additional expenditures to reduce risk associated with any increasing storm, flood, drought or other weather occurrences.
If we are unable to pay the principal and interest on our indebtedness as it comes due or we default under certain other provisions of our loan documents, our indebtedness could be accelerated and our results of operations and financial condition could be adversely affected.
There can be no assurance we will continue to pay dividends in the future or, if dividends are paid, that they will be in amounts similar to past dividends. 12 Table of Contents If we are unable to pay the principal and interest on our indebtedness as it comes due or we default under certain other provisions of our loan documents, our indebtedness could be accelerated and our results of operations and financial condition could be adversely affected.
The NJBPU regulates our public utility companies in New Jersey with respect to rates and charges for service, classification of accounts, awards of new service territory, acquisitions, financings and other matters. That means, for example, that we cannot raise the utility rates we charge to our customers without first petitioning the NJBPU for approval and navigating a lengthy administrative process.
That means, for example, that we cannot raise the utility rates we charge to our customers in New Jersey without first petitioning the NJBPU for approval and navigating a lengthy administrative process. Similarly, the DEPSC regulates our public utility companies in Delaware.
If we fail to comply with environmental or other laws and regulations to which our business is subject, we could be fined or subject to other sanctions, which could adversely impact our business or results of operations.
If we fail to comply with environmental or other laws and regulations to which our business is subject, we could be subject to fines, penalties or other sanctions, as well as damage to our reputation, as a result of governmental proceedings and private litigation, which could adversely impact our business or results of operations.
We are subject to USEPA regulations under the Federal Safe Drinking Water Act and under the Federal Clean Water Act regarding wastewater services. Regulations under the Safe Drinking Water Act include the Lead and Copper Rule, the maximum contaminant levels established for various volatile organic compounds, the Federal Surface Water Treatment Rule and the Total Coliform Rule.
Regulations under the Safe Drinking Water Act include the Lead and Copper Rule, the maximum contaminant levels established for various volatile organic compounds, the Federal Surface Water Treatment Rule and the Total Coliform Rule. There are also similar NJDEP regulations for our New Jersey water systems.
Because of the uncertainty of weather volatility related to climate variability, we cannot predict its potential impact on our financial condition, results of operations, cash flows and liquidity.
Because of the uncertainty of weather volatility related to climate variability, we cannot predict its potential impact on our financial condition, results of operations, cash flows and liquidity. Reductions of or delays in weather forecasting could adversely affect our ability to plan and respond to such events, which may exacerbate the impact of such an event.
If, however, we do not generate sufficient cash, we may be required to attempt to refinance our obligations or sell additional equity. 15 No assurance can be given that any refinancing or sale of equity will be possible when needed, or that we will be able to negotiate favorable terms.
No assurance can be given that any refinancing or sale of equity will be possible when needed, or that we will be able to negotiate favorable terms.
Our Board of Directors also has the ability, subject to obtaining NJBPU approval, to issue one or more series of preferred stock having such number of shares, designation, preferences, voting rights, limitations and other rights as the Board of Directors may fix.
The Board of Directors has the authority, upon obtaining NJBPU approval, to issue preferred stock in one or more series with the number of shares, voting rights, designation, limitations and other rights determined at their discretion.
The failure to obtain any rate increase would prevent us from increasing our revenues and, unless we are able to reduce costs without degrading service quality, would result in reduced earnings. We are subject to environmental laws and regulations, including water quality and wastewater effluent quality regulations, as well as other state and local regulations.
The failure to obtain any rate increase would limit our ability to increase our revenues and, unless we are able to reduce costs without degrading service quality, would result in reduced earnings.
We provide ongoing training and communications to our employees about threats to our water supply, our assets and related systems and our employees’ personal safety.
We provide ongoing training and communications to our employees about threats to our water supply, our assets and related systems and our employees’ personal safety. We have incurred, and will continue to incur, costs for security measures in efforts to protect against such risks.
Government environmental regulatory agencies also regulate our operations in New Jersey and Delaware with respect to wastewater collection, treatment and disposal. Government environmental regulatory agencies’ regulations relating to water quality require us to perform additional testing to ensure our water meets state and federal water quality requirements.
Government environmental regulatory agencies regulate our operations in New Jersey and Delaware with respect to water supply, treatment and distribution systems and the quality of water. Government environmental regulatory agencies also regulate our operations in New Jersey and Delaware with respect to wastewater collection, treatment and disposal.
Once a state utility regulator grants a franchise to a public utility to serve a specific territory, that utility effectively has an exclusive right to service that territory. Although a new franchise offers some protection against competitors, the pursuit of franchises is often competitive, particularly in Delaware, where new franchises may be awarded to utilities based upon competitive negotiation.
Although a new franchise offers 11 Table of Contents some protection against competitors, the pursuit of franchises is often competitive, particularly in Delaware, where new franchises may be awarded to utilities based upon competitive negotiation. Competing entities have challenged, and may challenge in the future, our applications for new franchises.
Removed
There can be no assurance we will continue to pay dividends in the future or, if dividends are paid, that they will be in amounts similar to past dividends.
Added
Disruptions in our supply chain related to goods, such as pipe, chemicals, power and other fuel, equipment, water and other raw materials could adversely impact our operations, financial position, and cash flows. Our ability to serve our customers and operate our business in compliance with regulatory requirements is dependent upon purchasing or securing necessary goods from our suppliers and vendors.
Added
These items include but are not limited to chemicals, pipe, valves, hydrants, fittings, equipment (including personal protective equipment), water, and power and other fuel.
Added
Examples of supply chain disruptions include reduced quantities of goods available in the marketplace, delays in manufacturing or shipping goods, labor shortages at our suppliers or vendors, natural or other disasters and operational impacts to some of our suppliers or vendors.
Added
Disruptions in our supply chain related to goods have occurred and we anticipate may continue to occur in the future. Supply chain disruptions may cause us to be unable to purchase or otherwise obtain needed goods at a reasonable price or at all, and may significantly increase the price of goods we may obtain from suppliers and vendors.
Added
This, in turn, may adversely impact our operations and our ability to serve our customers in compliance with regulatory requirements, as well as our associated results of operations, cash flows and financial condition.
Added
While we attempt to plan for and have contingencies in place to address supply chain disruptions, our mitigation efforts may not be successful or may have further negative impacts on us. Regulatory Risks Our revenue and earnings depend on the rates we charge our customers.
Added
The NJBPU regulates our public utility companies in New Jersey with respect to rates and charges for service, classification of accounts, awards of new service territory, acquisitions, financings and other matters.
Added
Even if the rates approved are sufficient, we face the risk that we will not achieve the rates of return on equity permitted by the applicable Public Utility Commission.
Added
This could occur if certain conditions exist, including, but not limited to, (i) water usage is less than the level anticipated in establishing rates, (ii) customers increase their conservation 10 Table of Contents efforts, (iii) we experience unusual or emergent situations, events or conditions, (iv) a decrease in customers that causes a decrease in operating revenue, or (v) our investments or expenses prove to be higher than the levels estimated in establishing rates.
Added
Government environmental regulatory agencies’ regulations relating to water quality require us to perform additional testing to ensure our water meets state and federal water quality requirements. We are subject to USEPA regulations under the Federal Safe Drinking Water Act and under the Federal Clean Water Act regarding wastewater services.
Added
Once a state utility regulator grants a franchise to a public utility to serve a specific territory, that utility effectively has an exclusive right to service that territory.
Added
In addition, many acquisitions or operational arrangements involving regulated water and wastewater systems are subject to approval by one or more governmental or regulatory authorities, which may include Public Utility Commissions or similar bodies with jurisdiction over rates, service territories, ownership changes, or operating authority.
Added
There can be no assurance that such approvals will be obtained on acceptable terms, in a timely manner, or at all, and regulatory authorities may impose conditions, limitations, or requirements that increase costs, restrict operations, delay integration, or reduce the anticipated benefits of a transaction.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+3 added−2 removed14 unchanged
Biggest changeKey elements of our cybersecurity risk mitigation approach are comprised of: ● A dedicated cybersecurity team; ● Collaboration with a third-party managed detection and response company for 24/7 monitoring and response; ● Cybersecurity insurance to cover a portion of losses and damages resulting from cyber-attacks or security breaches; ● An incident response team that is comprised of various departments required for an effective response; 18 ● Conducting periodic drills and exercises, including industry collaborations and participation from the executive team; ● Continuous information security awareness training and phishing simulation exercises; ● Regular security assessments to address evolving risks and threats; ● Deployment of automation solutions to strengthen detection and response capabilities; and ● Utilizing services offered by the United States Department of Homeland Security to assist with resiliency planning.
Biggest changeKey elements of our cybersecurity risk mitigation approach are comprised of: • A dedicated cybersecurity team; • Collaboration with third-party managed detection and response resources for 24/7 monitoring and response; • Cybersecurity insurance to cover a portion of losses and damages resulting from cyber-attacks or security breaches; • An incident response team that is comprised of various departments required for an effective response; • Conducting periodic drills and exercises, including industry collaborations and participation from the executive team; • Continuous information security awareness training and phishing simulation exercises; • Regular security assessments to address evolving risks and threats; • Deployment of automation solutions to strengthen detection and response capabilities; • Utilizing services offered by the United States Department of Homeland Security to assist with resiliency planning; and • Active participation and collaboration with organizations such as the Cybersecurity and Infrastructure Security Agency, Water Information Sharing & Analysis Center, New Jersey Cybersecurity and Communications Integration Cell, Delaware Cybersecurity Advisory Council, and the NJBPU.
All employees participate in required periodic training with respect to cybersecurity risk and risk mitigation. 17 Our Chief Technology Officer (CTO), with over 25 years of experience in various disciplines of information technology, oversees the cybersecurity program.
All employees participate in required periodic training with respect to cybersecurity risk and risk mitigation. Our Chief Technology Officer (CTO), with over 25 years of experience in various disciplines of information technology, oversees the cybersecurity program.
Our cybersecurity program aims to protect the uninterrupted availability of critical information technology resources. Regular assessments, conducted both internally and by third parties, evaluate our program against industry standards, including the National Institute of Standards and Technology Cybersecurity Standard and the Risk Management Framework.
Our cybersecurity program aims to protect the uninterrupted availability of critical information technology resources. Regular assessments, conducted both internally and by third parties, evaluate our program against industry standards, 14 Table of Contents including the National Institute of Standards and Technology Cybersecurity Standard and the Risk Management Framework.
We extend our cybersecurity focus to third-party service providers by evaluating and monitoring their cybersecurity risks. High-risk vendors undergo continuous monitoring, and we maintain contractual agreements that mandate our third-party providers’ commitment to managing cybersecurity risks, providing incident notifications, and being subject to cybersecurity audits.
High-risk vendors undergo continuous monitoring, and we maintain contractual agreements that mandate our third-party providers’ commitment to managing cybersecurity risks, providing incident notifications, and being subject to cybersecurity audits. 15 Table of Contents Governance Structure and Oversight The Company’s cybersecurity governance framework is designed to ensure robust oversight, accountability, and continuous improvement in managing information technology and cybersecurity risks.
Removed
Cybersecurity Governance The Corporate Governance and Nominating Committee of the Board is tasked with serving as the Board of Director’s primary body to oversee management’s risk identification, management and mitigation strategies related to, among other risks, information technology, cybersecurity and data security risks.
Added
We extend our cybersecurity focus to third-party service providers by evaluating and monitoring their cybersecurity risks.
Removed
Management, including the CTO, provides regular reports to the Board covering aspects such as risks, threats, the evolving threat landscape, enhancements to the cybersecurity program, and the preparedness of internal responses.
Added
Governance responsibilities are distributed across several key bodies and roles: Board of Directors Oversight • The Enterprise Risk Committee (Committee) of the Board of Directors serves as the primary oversight body for management of risk identification, assessment, and mitigation strategies related to information technology, cybersecurity, and data security risks. • The Committee will regularly review and evaluate the effectiveness of the Company’s cybersecurity program, ensuring alignment with the organization’s risk appetite and strategic objectives. • The Board of Directors receives periodic briefings from executive management, including updates on the evolving threat landscape, significant incidents, program enhancements, and the preparedness of internal response capabilities.
Added
Continuous Improvement and Accountability • The governance structure supports a culture of continuous improvement, required to adapt to the rapidly changing cybersecurity landscape. • Accountability is reinforced through clearly defined roles, responsibilities, and performance metrics, ensuring that all stakeholders from the Board of Directors to operational teams are engaged in maintaining and enhancing the Company’s cybersecurity posture.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, there is a 15 mgd auxiliary pumping station on-site at the CJO Plant location. It has a dedicated substation and emergency power supply provided by a diesel-driven generator. It pumps from the 10 million gallon distribution storage reservoir directly into the distribution system.
Biggest changeThe design capacity of the CJO Plant is 55 mgd (60 mgd maximum capacity). The five electric motor-driven, vertical turbine pumps presently installed have an aggregate capacity of 88 mgd. In addition, there is a 15 mgd auxiliary pumping station on-site at the CJO Plant location. It has a dedicated substation and emergency power supply provided by a diesel-driven generator.
Water is transported to our customers through 938 miles of transmission and distribution mains. Storage facilities include 48 tanks, with an aggregate capacity of 9.9 million gallons. The Delaware office property, located on an eleven-acre parcel owned by White Marsh, consists of two office buildings totaling approximately 17,000 square feet.
Water is transported to our customers through 1,000 miles of transmission and distribution mains. Storage facilities include 48 tanks, with an aggregate capacity of 9.9 million gallons. The Delaware office property, located on an eleven-acre parcel owned by White Marsh, consists of two office buildings totaling approximately 17,000 square feet.
In New Jersey, we own the properties on which the Middlesex System’s 27 wells are located, the properties on which our storage tanks are located as well as the property where the CJO Plant is located.
In New Jersey, we own the properties on which the Middlesex System’s 24 wells are located, the properties on which our storage tanks are located as well as the property where the CJO Plant is located.
The leased space, which is under contract through December 2029, houses our corporate administrative functions including executive, accounting, communications, customer service and billing, engineering, human resources, information technology and legal. Tidewater System The Tidewater System is comprised of 85 production plants that vary in pumping capacity from 46,000 gallons per day to 4.4 mgd.
The leased space, which is under contract through December 2029, houses our corporate administrative functions including executive, accounting, communications, customer service and billing, engineering, human resources, information technology and legal. Tidewater System The Tidewater System is comprised of 83 production plants that vary in pumping capacity from 46,000 gallons per day to 3.0 mgd.
The transmission and distribution system is comprised of 746 miles of mains and includes 24,300 feet of 48-inch concrete transmission main and 23,400 feet of 42-inch ductile iron transmission main connecting the CJO Plant to our distribution pipe network and related storage facilities.
It pumps from the 10 million gallon distribution storage reservoir directly into the distribution system. The transmission and distribution system is comprised of 747 miles of mains and includes 24,300 feet of 48-inch concrete transmission main and 23,400 feet of 42-inch ductile iron transmission main connecting the CJO Plant to our distribution pipe network and related storage facilities.
Also included are a 58,600 foot transmission main and a 38,800 foot transmission main, augmented with a long-term, non-exclusive agreement with East Brunswick to transport water through the East Brunswick system to several of our other contract customers.
Also included are a 58,600 foot transmission main and a 38,800 foot transmission main, augmented with a long-term, non-exclusive agreement with East Brunswick to transport water through the East Brunswick system to several of our other contract customers. 16 Table of Contents The Middlesex System’s storage facilities consist of a 10 million gallon reservoir at the CJO Plant, 5 million gallon and 2 million gallon reservoirs in Edison and a 2 million gallon reservoir at the Park Avenue Plant.
The CJO Plant also includes a computerized Supervisory Control and Data Acquisitions system to monitor and control the CJO Plant and the water supply and distribution system in the Middlesex System.
The CJO Plant also includes a computerized Supervisory Control and Data Acquisitions system to monitor and control the CJO Plant and the water supply and distribution system in the Middlesex System. There is a State of New Jersey certified on-site laboratory capable of performing bacteriological, chemical, process control and advanced instrumental chemical sampling and analysis.
Removed
There is a State of New Jersey certified on-site laboratory capable of performing bacteriological, chemical, process control and advanced instrumental chemical sampling and analysis. 19 The design capacity of the CJO Plant is 55 mgd (60 mgd maximum capacity). The five electric motor-driven, vertical turbine pumps presently installed have an aggregate capacity of 85 mgd.
Removed
The Middlesex System’s storage facilities consist of a 10 million gallon reservoir at the CJO Plant, 5 million gallon and 2 million gallon reservoirs in Edison and a 2 million gallon reservoir at the Park Avenue Plant.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe believe the resolution of these pending claims and legal proceedings will not have a material adverse effect on the Company’s consolidated financial statements.
Biggest changeITEM 3. LEGAL PROCEEDINGS. The Company is a defendant in lawsuits in the normal course of business. We believe the resolution of pending claims and legal proceedings will not have a material adverse effect on the Company’s consolidated financial statements. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 17 Table of Contents PART II
Removed
ITEM 3. LEGAL PROCEEDINGS. In September 2021, the NJDEP issued a Notice to Middlesex based on self-reporting by Middlesex that the level of Perfluorooctanoic Acid (PFOA) in water treated at its Park Avenue Plant in New Jersey exceeded a recently promulgated NJDEP standard effective in 2021. Neither the NJDEP nor Middlesex characterized this exceedance as an acute health emergency.
Removed
However, Middlesex was required to notify its affected customers and the Company 20 complied in due course. Water currently being delivered to customers is in compliance with all USEPA and NJDEP drinking water standards, including the newly established water quality standard for PFOA.
Removed
In 2021, the Company was served with two PFOA-related class action lawsuits seeking restitution for medical, water filter replacement and other claimed related costs. On August 30, 2024, the parties to the Vera et al. v. Middlesex Water Company and Lonsk et al v.
Removed
Middlesex Water Company litigations entered into a signed Settlement Term Sheet (Term Sheet) in a step towards resolution of both matters. The parties are in the process of memorializing the settlement into a Settlement Agreement that is expected to be completed by the parties in the first quarter of 2025.
Removed
The Company does not believe that the Term Sheet and the anticipated Settlement Agreement, once executed, will have any material financial or operational impact to Middlesex. The Company is a defendant in other lawsuits in the normal course of business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+3 added−0 removed4 unchanged
Biggest changeThe S&P 500 Stock Index measures the stock performance of 500 large companies listed on stock exchanges in the United States. 22 COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Middlesex Water Company, the S&P 500 Stock Index and a Peer Group* * Peer group includes American States Water Company, Artesian Resources Corp., California Water Service Group, Global Water Resources Inc, SJW Corp., York Water Company and Middlesex. 2019 2020 2021 2022 2023 2024 Middlesex Water Company 100.00 115.79 194.55 128.86 109.30 89.61 S&P 500 Stock Index 100.00 118.40 152.39 124.79 157.59 197.02 Peer Group 100.00 101.73 132.98 120.09 103.25 91.21
Biggest changeThe S&P 500 Stock Index measures the stock performance of 500 large companies listed on stock exchanges in the United States. 18 Table of Contents COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Middlesex Water Company, the S&P 500 Stock Index and a Peer Group* * Peer group includes American States Water Company, Artesian Resources Corp., California Water Service Group, Global Water Resources Inc, H2O America, York Water Company and Middlesex. 2020 2021 2022 2023 2024 2025 Middlesex Water Company 100.00 168.02 111.29 94.40 77.39 76.09 S&P 500 Stock Index 100.00 128.71 105.40 133.10 166.40 196.16 Peer Group 100.00 130.72 118.05 101.49 89.66 87.73 ITEM 6. [RESERVED] ITEM 7.
Shares issued in connection with this plan are subject to forfeiture by the employee in the event of termination of employment for any reason within five years of the award, other than as a result of retirement at normal retirement age, death, disability or change in control.
Shares issued in connection with this plan are subject to forfeiture by the employee in the event of termination of employment for any reason within three or five years of the award, other than as a result of retirement at normal retirement age, death, disability or change in control.
Set forth below is a graph comparing the yearly change in the cumulative total return (which includes reinvestment of dividends) of a $100 investment for the Company’s common stock, a peer group of investor-owned water utilities, and the S&P 500 Stock Index for the period of five years commencing December 31, 2019.
Set forth below is a graph comparing the yearly change in the cumulative total return (which includes reinvestment of dividends) of a $100 investment for the Company’s common stock, a peer group of investor-owned water utilities, and the S&P 500 Stock Index for the period of five years commencing December 31, 2020.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. The Company’s common stock is traded on the NASDAQ Stock Market, LLC, under the symbol MSEX. As of December 31, 2024, there were 1,631 holders of record. The Company has paid dividends on its common stock each year since 1912.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. The Company’s common stock is traded on the NASDAQ Stock Market, LLC, under the symbol MSEX. As of December 31, 2025, there were 1,554 holders of record. The Company has paid dividends on its common stock each year since 1912.
In 2024, shares of the Company’s common stock valued at $0.4 million were granted and issued to the Independent Directors. The maximum number of shares authorized for grant under this plan is 0.1 million. Approximately 34% of the authorized shares remain available for future issuance as of December 31, 2024.
In 2025, shares of the Company’s common stock valued at $0.4 million were granted and issued to the Independent Directors. The maximum number of shares authorized for grant under this plan is 0.1 million. Approximately 28% of the authorized shares remain available for future issuance as of December 31, 2025.
The maximum number of shares authorized for award under this plan is 0.3 million shares, of which approximately 70% remain available for future issuance as of December 31, 2024. The Company maintains a stock plan for its independent members of the Board of Directors as a component of their compensation.
The maximum number of shares authorized for award under this plan is 0.3 million shares, of which approximately 62% remain available for future issuance as of December 31, 2025. The Company maintains a stock plan for its independent members of the Board of Directors as a component of their compensation.
In 2024, 4,275 shares of the Company’s no par $7.00 Series Cumulative and Convertible Preferred Stock were converted into 51,300 shares (approximately $0.4 million) of the Company’s common stock.
In 2025, 2,782 shares of the Company’s no par $7.00 Series Cumulative and Convertible Preferred Stock were converted into 33,384 shares (approximately $0.3 million) of the Company’s common stock.
Since the inception of the Investment Plan and its predecessor plan, the Company has periodically replenished the level of authorized shares in the plans. The Company maintains a long-term incentive compensation plan for certain management employees where awards are made in the form of restricted common stock.
Since the inception of the Investment Plan and its predecessor plan, the Company has periodically replenished the level of authorized shares in the plans.
Added
In 2025, Middlesex began an At-the-Market equity offering sales program, pursuant to which Middlesex may offer and sell shares of its common stock, no par value per share, from time to time in “at-the-market” offerings, having an aggregate gross sales price of up to $110.0 million.
Added
As of December 31, 2025, the Company has $80.0 million of aggregate gross sales remaining under the At-the-Market equity offering sales program The Company maintains a long-term incentive compensation plan for certain management employees where awards are made in the form of restricted common stock.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with the consolidated financial statements and related notes. For discussion of the year ended December 31, 2024 compared to December 31, 2023, refer to

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

58 edited+27 added−45 removed14 unchanged
Biggest changeThe segments in the tables included below are comprised of the following companies: Regulated- Middlesex, Tidewater, Pinelands and Southern Shores; Non-Regulated- USA, USA-PA, and White Marsh. 27 Results of Operations for 2024 as Compared to 2023 (In Millions) Years Ended December 31, 2024 2023 Regulated Non- Regulated Total Regulated Non- Regulated Total Revenues $ 178.8 $ 13.1 $ 191.9 $ 154.0 $ 12.3 $ 166.3 Operations and maintenance expenses 83.5 8.9 92.4 74.8 8.4 83.2 Depreciation expense 24.2 0.2 24.4 24.9 0.3 25.2 Other taxes 21.6 0.3 21.9 18.5 0.2 18.7 Operating income 49.5 3.7 53.2 35.8 3.4 39.2 Other income, net 11.8 0.3 12.1 6.3 0.2 6.5 Interest expense 14.0 — 14.0 13.1 — 13.1 Income taxes 5.7 1.2 6.9 (0.1 ) 1.1 1.0 Net income $ 41.6 $ 2.8 $ 44.4 $ 29.1 $ 2.5 $ 31.6 Operating Revenues Operating revenues for the year ended December 31, 2024 increased $25.6 million from the same period in 2023 due to the following factors: ● Middlesex System revenues increased by $19.9 million due to the base rate case increase on March 1, 2024, increased weather-driven customer demand, higher commercial and industrial customer billing and the implementation of the 2024 DSIC mechanism; ● Tidewater System revenues increased by $4.5 million due to customer growth and higher weather-driven customer demand; ● Pinelands System revenues increased $0.5 million due to scheduled rate increases from Pinelands 2023 NJBPU Order and increased weather-driven customer demand; and ● Non-regulated revenues increased $0.7 million, primarily due to higher supplemental contract services.
Biggest changeResults of Operations for 2025 as Compared to 2024 (In Millions) Years Ended December 31, 2025 2024 Regulated Non- Regulated Total Regulated Non- Regulated Total Revenues $ 182.2 $ 12.5 $ 194.7 $ 178.8 $ 13.1 $ 191.9 Operations and maintenance expenses 82.8 8.5 91.3 83.5 8.9 92.4 Depreciation expense 26.8 0.3 27.1 24.2 0.2 24.4 Other taxes 21.7 0.2 21.9 21.6 0.3 21.9 Operating income 50.9 3.5 54.4 49.5 3.7 53.2 Other income, net 7.3 0.2 7.5 11.8 0.3 12.1 Interest expense 14.3 — 14.3 14.0 — 14.0 Income taxes 3.6 1.2 4.8 5.7 1.2 6.9 Net income $ 40.3 $ 2.5 $ 42.8 $ 41.6 $ 2.8 $ 44.4 Operating Revenues Operating revenues for the year ended December 31, 2025 increased $2.8 million from the same period in 2024 due primarily to the following factors: • Middlesex System revenues increased by $1.5 million due to the increase in base rates effective March 1, 2024 and the increase in DSIC partially offset by lower consumption driven by unfavorable weather; • Tidewater System revenues increased by $1.6 million due to the increase in base rates effective July 3, 2025 and customer growth partially offset by lower consumption driven by unfavorable weather; • Pinelands System revenues increased $0.2 million due to the full year impact of base rate increases; • Non-regulated revenues decreased $0.6 million, primarily due to lower supplemental contract services; and • All other operating revenue categories increased $0.1 million.
We are regulated by state public utility commissions as to rates charged to customers for water and wastewater services, as to the quality of water and wastewater services we provide and as to certain other matters in the states in which our regulated subsidiaries operate. Only our Utility Service Affiliates, Inc. (USA), Utility Service Affiliates (Perth Amboy), Inc.
We are regulated by state public utility commissions as to rates charged to customers for water and wastewater services, as to the quality of water and wastewater service we provide and as to certain other matters in the states in which our regulated subsidiaries operate. Only our Utility Service Affiliates, Inc. (USA), Utility Service Affiliates (Perth Amboy), Inc.
Capital Construction Program The Company’s multi-year capital construction program encompasses numerous projects designed to upgrade and replace utility infrastructure as well as enhance the integrity and reliability of assets to better serve the current and future generations of water and wastewater customers.
Capital Construction Program The Company’s multi-year capital construction program encompasses numerous projects designed to upgrade and replace utility infrastructure as well as enhance the integrity and reliability of assets to better serve current and future generations of water and wastewater customers.
United States Environmental Protection Agency (USEPA) Issues Final Perfluoroalkyl (PFAS) Regulations In April 2024, the USEPA finalized drinking water regulations for PFAS, establishing maximum contaminant levels (MCLs) for three PFAS compounds (Regulated PFAS) that are lower than the current New Jersey Department of Environmental Protection MCLs adhered to by the Company.
United States Environmental Protection Agency (USEPA) Issues Final PFAS Regulations In April 2024, the USEPA finalized drinking water regulations for PFAS, establishing maximum contaminant levels (MCLs) for three PFAS compounds (Regulated PFAS) that are lower than the current New Jersey Department of Environmental Protection MCLs adhered to by the Company.
While actual usage for customers may differ from the estimate, we believe the overall total estimate of consumption and revenue for the fiscal period will not differ materially from actual consumption. Retirement Benefit Plans We maintain a noncontributory defined benefit pension plan (Pension Plan) which covers all currently active employees hired prior to April 1, 2007.
While actual usage for 26 Table of Contents customers may differ from the estimate, we believe the overall total estimate of consumption and revenue for the fiscal period will not differ materially from actual consumption. Retirement Benefit Plans We maintain a noncontributory defined benefit pension plan (Pension Plan) which covers all currently active employees hired prior to April 1, 2007.
In May 2024, Tidewater closed on four DEPSC-approved Delaware SRF loans totaling $5.6 million, all at interest rates of 2.0% with expected maturity dates in 2044. These loans are for the construction, relocation, improvement, and/or interconnection of transmission mains and construction of a water treatment facility.
In May 2024, Tidewater closed on four DEPSC-approved Delaware SRF loans totaling $5.6 million, all at interest rates of 2.0% with maturity dates in 2045. These loans are for the construction, relocation, improvement, and/or interconnection of transmission mains and construction of a water treatment facility.
Under the new USEPA regulations effective April 2024, water systems must monitor for Regulated PFAS and have three years to complete initial monitoring (by April 2027), followed by ongoing compliance monitoring. Water systems must also provide the public with information on the levels of Regulated PFAS in their drinking water beginning in 2027.
Under the new USEPA regulations effective April 2024, 20 Table of Contents water systems must monitor for Regulated PFAS and have three years to complete initial monitoring (by April 2027), followed by ongoing compliance monitoring. Water systems must also provide the public with information on the levels of Regulated PFAS in their drinking water beginning in 2027.
(Tidewater), since 1992. We are in the business of providing an essential water utility service for domestic, commercial, municipal, industrial and fire protection purposes. We operate water and wastewater systems under contract for governmental entities and private entities primarily in New Jersey and Delaware and also provide regulated wastewater services in New Jersey.
We are in the business of providing an essential water utility service for domestic, commercial, municipal, industrial and fire protection purposes. We operate water and wastewater systems under contract for governmental entities and private entities primarily in New Jersey and Delaware. We also provide regulated wastewater services in New Jersey.
SRF programs provide lower cost financing for projects meeting certain water quality and system improvement benchmarks (see discussion under “ Sources of Liquidity-Long-term Debt ” below); ● Proceeds from other long-term borrowings (see discussion under “ Sources of Liquidity-Long-term Debt ” below); and ● Proceeds from common stock sales through the Investment Plan and proceeds from sales to the public of our common stock when market conditions are favorable (see discussion under “ Sources of Liquidity-Common Stock ” below).
SRF programs provide lower cost financing for projects meeting certain water quality and system improvement benchmarks (see discussion under “ Sources of Liquidity-Long-term Debt ” below); • Proceeds from other long-term borrowings (see discussion under “ Sources of Liquidity-Long-term Debt ” below); and • Proceeds from common stock sales through the ATM equity offering program and Investment Plan and proceeds from sales to the public of our common stock when market conditions are favorable (see discussion under “ Sources of Liquidity-Common Stock ” below).
This loan is for costs associated with Tidewater’s obligation, as required by federal law and Delaware regulations, to identify and inventory lead service lines throughout Tidewater’s service area. Tidewater has drawn down $1.7 million as of December 31, 2024.
This loan is for costs associated with Tidewater’s obligation, as required by federal law and Delaware regulations, to identify and inventory lead service lines throughout Tidewater’s service area. Tidewater has drawn down $1.8 million as of December 31, 2025.
We continually monitor the need for timely rate filing to minimize the lag between the time we experience increased operating costs and capital expenditures and the time we receive appropriate rate relief. .
We continually monitor the need for timely rate case filings to minimize the lag between the time we experience increased operating costs and capital expenditures and the time we receive appropriate rate relief.
Common Stock - The Company issues shares of its common stock in connection with the Investment Plan, a direct share purchase and dividend reinvestment plan for the Company’s common stock. The Company raised approximately $1.0 million through the issuance of shares under the Investment Plan during 2024.
Common Stock - The Company issues shares of its common stock in connection with the Investment Plan, a direct share purchase and dividend reinvestment plan for the Company’s common stock. The Company raised approximately $0.9 million through the issuance of shares under the Investment Plan during 2025.
Beginning in April 2029, water systems that have Regulated PFAS in drinking water which exceeds one or more of these MCLs must take action to reduce levels of these PFAS compounds in their drinking water and must provide notification to the public of the violation.
Beginning in April 2029 and absent an extension by the USEPA, water systems that have Regulated PFAS in drinking water which exceeds one or more of these MCLs must take action to reduce levels of these PFAS compounds in their drinking water and must provide notification to the public of the violation.
The weighted average daily amounts of borrowings outstanding under the credit lines and the weighted average interest rates on those amounts were $38.7 million and $35.7 million at 6.33% and 6.13% for the years ended December 31, 2024 and 2023, respectively. Long-term Debt - Subject to regulatory approval, the Company periodically issues long-term debt to fund investments in utility plant.
The weighted average daily amounts of borrowings outstanding under the credit lines and the weighted average interest rates on those amounts were $42.1 million and $38.7 million at 5.42% and 6.33% for the years ended December 31, 2025 and 2024, respectively. Long-term Debt - Subject to regulatory approval, the Company periodically issues long-term debt to fund investments in utility plant.
Outlook Our ability to increase operating income and net income is based significantly on four factors: weather, adequate and timely rate relief, effective cost management and customer growth (which are evident in comparison discussions in the Results of Operations section below). Weather patterns which can result in lower customer demand for water may occur in 2025.
Our ability to increase earnings is based primarily on four factors: weather, adequate and timely rate relief, effective cost management and customer growth (which are evident in comparison discussions in the Results of Operations section below). Weather patterns which can result in lower customer demand for water may occur in 2026.
Capital Expenditures and Commitments To fund our capital program, we use internally generated funds, short-term and long-term debt borrowings, proceeds from sales of common stock under the Investment Plan and, when market conditions are favorable, proceeds from sales to the public of our common stock. The table below summarizes our estimated capital expenditures for the years 2025-2027.
Capital Expenditures and Commitments To fund our capital program, we use internally generated funds, short-term and long-term debt borrowings, proceeds from sales of common stock under the Middlesex Water Company Investment Plan (Investment Plan) and ATM equity offering program, and, when market conditions are favorable, proceeds from sales to the public of our common stock. 23 Table of Contents The table below summarizes our estimated capital expenditures for the years 2026-2028.
Income Taxes Income taxes for the year ended December 31, 2024 increased by $5.9 million from the same period in 2023, primarily due to higher pre-tax income and lower income tax benefits associated with decreased repair expenditures on tangible property in the Middlesex System offset by the recovery of income taxes on the taxable portion of the proceeds from the 3M Settlement Agreement .
Income Taxes Income taxes for the year ended December 31, 2025 decreased by $2.1 million from the same period in 2024, primarily due to lower pretax income and higher income tax benefits associated with increased repair expenditures on tangible property in the Middlesex System, partially offset by the 2024 recovery of income taxes on the taxable portion of the proceeds from a litigation agreement.
In addition, we expect to invest $2 million and $10 million in 2025 and 2026, respectively, for elevated storage tanks in our Tidewater System. ● Production System - Includes projects associated with our treatment plants, including approximately $3 million, $25 million and $77 million of expenditures in 2025, 2026 and 2027, respectively to install PFAS treatment at our CJO Plant. ● Information Technology (IT) Systems - Includes further upgrade of our enterprise resource planning system and hardware and software purchases for other IT systems, including approximately $2 million in both 2026 and 2027 for upgrades of our customer information system. ● Other - Includes purchase of transportation equipment, tools, furniture, laboratory equipment, security systems and other general infrastructure needs including improvements to field and inventory management facilities in Iselin, New Jersey.
Also, we expect to invest $3 million and $9 million in 2027 and 2028, respectively, for elevated storage tanks in our Tidewater System. • Production System - Includes projects associated with our treatment plants, including approximately $36 million, $119 million and $100 million of expenditures in 2026, 2027 and 2028, respectively to install PFAS treatment at our CJO Plant. • Information Technology (IT) Systems - Includes additional upgrades of our enterprise resource planning system and hardware and software purchases for other IT systems. • Other - Includes purchase of transportation equipment, tools, furniture, laboratory equipment, security systems and other general infrastructure needs including improvements to field and inventory management facilities.
Interest Charges Interest charges for the year ended December 31, 2024 increased $0.9 million from the same period in 2023 due to higher average debt outstanding and higher average interest rates.
Interest Charges Interest charges for the year ended December 31, 2025 increased $0.3 million from the same period in 2024 due to higher average debt outstanding offset by lower average interest rates.
The effect on the timing and amount of these payments resulting from potential changes in actuarial assumptions and returns on plan assets cannot be estimated. In 2024, the Company contributed $3.7 million to its retirement benefit plans and expects to contribute approximately $1.8 million in 2025.
The effect on the timing and amount of these payments resulting from potential changes in actuarial assumptions and returns on plan assets cannot be estimated. In 2025 the Company contributed $2.0 million to its postretirement benefit plans and expects to contribute approximately $2.0 million in 2026 as well.
In addition to performing day-to day operations, USA-PA is also responsible for emergency response and management of capital projects funded by Perth Amboy. USA operates the Borough of Avalon, New Jersey’s (Avalon) water utility, sewer utility and storm water system under a 10-year operations and maintenance contract expiring in 2032.
USA-PA operates the water and wastewater systems for the City of Perth Amboy, New Jersey (Perth Amboy) under a 10-year operations and maintenance contract expiring in 2028. In addition to performing day-to day operations, USA-PA is also responsible for emergency response and management of capital projects funded by Perth Amboy.
Accordingly, we have recorded costs and obligations, which will be amortized over various future periods. Any change in the assessment of the probability of rate-making treatment would require us to change the accounting treatment of the deferred item.
Accordingly, we have deferred certain costs and obligations, which will be amortized in the same periods that revenues for these costs are recognized. Any change in the assessment of the probability of rate-making treatment would require us to change the accounting treatment of the deferred item.
(HomeServe) expiring in 2031, USA offers residential customers in New Jersey and Delaware water and wastewater related services and home maintenance programs. HomeServe is a leading national provider of such home maintenance service programs. USA receives a service fee for the billing, cash collection and other administrative matters associated with HomeServe’s service contracts.
HomeServe is a leading national provider of such home maintenance service programs. USA receives a service fee for the billing, cash collection and other administrative matters associated with HomeServe’s service contracts. USA also provides unregulated water and wastewater services under contract with several New Jersey municipalities.
In anticipation of these new USEPA standards, in 2023, the Company began implementing its strategy to meet these lower MCLs for Regulated PFAS and is currently performing preliminary engineering studies to ensure that effective PFAS treatment approaches are implemented.
In anticipation of these new USEPA standards, in 2023, the Company began implementing its strategy to meet these lower MCLs for Regulated PFAS and is currently designing and implementing the most effective PFAS treatment approach.
Strategy for Growth Our strategy for selective and sustainable growth is focused on the following key areas: ● Invest in our utility infrastructure to build system resiliency and meet compliance requirements; ● Timely and adequate recovery of infrastructure investments and other costs to maintain and continually improve service quality; ● Selective acquisitions of investor and municipally-owned water and wastewater utilities; and ● Operation of municipal and industrial water and wastewater systems on a contract basis which meet our risk profile. 25 Rates Middlesex - The approval by the NJBPU in February 2024 of the negotiated settlement of the Middlesex 2023 base rate case is expected to increase annual operating revenues by $15.4 million, effective March 1, 2024.
Strategy for Growth Our strategy for selective and sustainable growth is focused on the following key areas: • Invest in our utility infrastructure to build system resiliency and meet compliance requirements; • Timely and adequate recovery of infrastructure investments and other costs to maintain and continually improve service quality; • Selective acquisitions of investor and municipally-owned water and wastewater utilities; and • Operation of municipal and industrial water and wastewater systems on a contract basis which meet our risk profile.
Payment Due by Period (Millions of Dollars) Total Less than 1 Year 2-3 Years 4-5 Years More than 5 Years Long-term Debt $ 359 $ 8 $ 15 $ 14 $ 322 Note Payable 23 23 — — — Interest on Long-Term Debt 247 12 23 22 190 Purchased Water Contracts 90 7 8 7 68 Commercial Office Leases 5 1 2 2 — TOTAL $ 724 $ 51 $ 48 $ 45 $ 580 The table above does not reflect any anticipated cash payments for retirement benefit plan obligations.
Payment Due by Period (Millions of Dollars) Total Less than 1 Year 2-3 Years 4-5 Years More than 5 Years Long-term Debt $ 386 $ 8 $ 15 $ 12 $ 351 Note Payable 28 28 — — — Interest on Long-Term Debt 285 13 25 25 222 Purchased Water Contracts 102 7 15 15 65 Commercial Office Leases 4 1 2 1 — TOTAL $ 805 $ 57 $ 57 $ 53 $ 638 The table above does not reflect any anticipated cash payments for retirement benefit plan obligations.
USA also operates the Borough of Highland Park, New Jersey’s (Highland Park) water and wastewater systems under a 10-year operations and maintenance contract expiring in 2030. In addition to performing day-to-day service operations, USA is responsible for emergency response and management of capital projects funded by Avalon and Highland Park. Under a marketing agreement with HomeServe USA Corp.
In addition to performing day-to-day service operations, USA is responsible for emergency response and management of capital projects funded by Avalon and Highland Park. Under a marketing agreement with HomeServe USA Corp. (HomeServe) expiring in 2031, USA offers residential customers in New Jersey and Delaware water and wastewater related services and home maintenance programs.
Other Taxes Other taxes for the year ended December 31, 2024 increased $3.1 million from the same period in 2023 primarily due to higher gross receipts taxes on higher revenue in Middlesex and higher payroll related taxes on increased labor costs. 28 Other Income, net Other Income, net for the year ended December 31, 2024 increased $5.6 million from the same period in 2023 primarily due to the recovery of carrying costs on the PFAS treatment upgrades at the Park Avenue Plant and higher actuarially-determined retirement benefit plans non-service benefit offset by lower allowance for funds used during construction on capital projects in construction.
Other Taxes Other taxes for the year ended December 31, 2025 are consistent with the same period in 2024. 22 Table of Contents Other Income, net Other Income, net for the year ended December 31, 2025 decreased $4.5 million from the same period in 2024 primarily due to lower actuarially-determined retirement benefit plans non-service benefit and the one-time recovery in 2024 of carrying costs on PFAS treatment upgrades at Middlesex’s Park Avenue Plant in connection with Middlesex’s 2023 rate case order, partially offset by higher allowance for funds used during construction from increased capital expenditures.
(In Millions) 2025 2026 2027 2025-2027 Distribution/Network System $ 56 $ 70 $ 62 $ 188 Production System 27 53 89 169 Information Technology (IT) Systems 3 5 2 10 Other 7 5 8 20 Total Estimated Capital Expenditures $ 93 $ 133 $ 161 $ 387 Our estimated capital expenditures for the items listed above are primarily comprised of the following: ● Distribution/Network System - Includes projects associated with replacement, installation and relocation of water mains and service lines and wastewater collection systems, construction of water storage tanks, installation and replacement of hydrants, meters and meter pits and the RENEW Program.
(In Millions) 2026 2027 2028 Total Distribution/Network System $ 53 $ 57 $ 65 $ 175 Production System 65 135 110 310 Information Technology (IT) Systems 2 2 1 5 Other 6 6 4 16 Total Estimated Capital Expenditures $ 126 $ 200 $ 180 $ 506 Our estimated capital expenditures for the items listed above are primarily comprised of the following: • Distribution/Network System - Includes projects associated with replacement, installation and relocation of water mains and service lines and wastewater collection systems, construction of water storage tanks, installation and replacement of hydrants, meters and meter pits and the RENEW Program.
We have no reason to believe any of the deferred items that are recorded will be treated differently by the regulators in the future. 34 Revenues Revenues from our regulated customers, which include amounts billed quarterly to residential customers and monthly to industrial, commercial, fire-protection and wholesale customers, also include unbilled amounts based upon estimated usage from the date of the last meter reading to the end of the accounting period.
Revenues Revenues from our regulated customers, which include amounts billed quarterly or monthly to residential customers and monthly to industrial, commercial, fire-protection and wholesale customers, also include unbilled amounts based upon estimated usage from the date of the last meter reading to the end of the accounting period.
RENEW is our ongoing initiative to replace water mains in the Middlesex System. In connection with RENEW, we expect to spend approximately $11 million in each of 2025 and 2026, and $12 million in 2027.
RENEW is our ongoing initiative to replace water mains in the Middlesex System. In connection with RENEW, we expect to spend approximately $12 million each year from 2026 to 2028. Also, we plan to replace a transmission main in Metuchen, New Jersey in our Middlesex System for approximately $8 million in 2027 and 2028.
To the extent possible and fiscally prudent, the Company finances qualifying capital projects under SRF loan programs in New Jersey and Delaware. These government programs provide financing at interest rates typically below rates available in the broader financial markets.
To the extent possible and fiscally prudent, the Company finances qualifying capital projects under SRF loan programs in New Jersey and Delaware.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with the consolidated financial statements and related notes. Operations Middlesex Water Company (Middlesex or the Company) has operated as a water utility in New Jersey since 1897 and in Delaware through our wholly-owned subsidiary, Tidewater Utilities, Inc.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in the December 31, 2024 Annual report on Form 10-K, filed on February 28, 2025. Operations Middlesex Water Company (Middlesex or the Company) has operated as a water utility in New Jersey since 1897 and in Delaware through our wholly-owned subsidiary, Tidewater Utilities, Inc. (Tidewater), since 1992.
Our other New Jersey subsidiaries, Pinelands Water Company (Pinelands Water) and Pinelands Wastewater Company (Pinelands Wastewater) (collectively, Pinelands), provide water and wastewater services to approximately 2,500 customers in Southampton Township, New Jersey. Our Delaware subsidiaries, Tidewater and Southern Shores Water Company, LLC (Southern Shores), provide water services to approximately 61,000 retail customers in New Castle, Kent and Sussex Counties, Delaware.
Our other New Jersey subsidiaries, 19 Table of Contents Pinelands Water Company (Pinelands Water) and Pinelands Wastewater Company (Pinelands Wastewater) (collectively, Pinelands) provide water and wastewater services to approximately 2,500 customers in Southampton Township, New Jersey.
Sources of Liquidity Short-term Debt - The Company has available lines of credit of $140 million. The outstanding borrowings under the credit lines at December 31, 2024 were $23.0 million, at a weighted average interest rate of 5.63%.
Sources of Liquidity Short-term Borrowings - In February 2026, the Company increased available lines of credit from $148 million to $180 million. The outstanding borrowings under the credit lines at December 31, 2025 were $28.3 million, at a weighted average interest rate of 5.03%.
The amount, the timing and the sales method of the common stock is dependent on the timing of the construction expenditures, the level of additional debt financing and financial market conditions. Common stock offerings will occur as needed to maintain a balanced capital structure as we continue on a parallel path with future debt offerings.
The amount, the timing and the sales method of the common stock is dependent on the timing of the construction expenditures, the level of additional debt financing and financial market conditions.
Olson Surface Water Treatment Plant (CJO Plant) to integrate PFAS removal from source water, $34 million on the RENEW Program, which is our ongoing initiative to replace water mains in the Middlesex System, $15 million for replacement of a transmission main in Metuchen in our Middlesex System and $12 million for elevated storage tanks in our Tidewater System.
Outlook The Company has projected to spend approximately $506 million for the 2026-2028 capital investment program, including approximately $255 million for upgrading our CJO Plant to integrate PFAS removal from source water, $34 million on the RENEW Program, which is our ongoing initiative to replace water mains in the Middlesex System, $17 million for replacement of a transmission main in Metuchen in our Middlesex System, $8 million for booster station generator replacement and electrical improvements. $9 million for construction of the Bethany Bay new water treatment facility in the Tidewater System and $13 million for elevated storage tanks in our Tidewater System.
Water systems have five years (by April 2029) to implement solutions that reduce Regulated PFAS if monitoring shows that drinking water levels exceed these MCLs.
Water systems have five years (by April 2029) to implement treatment solutions if monitoring shows that drinking water levels exceed these MCLs. The USEPA has announced its plans to issue a proposed rule extending the compliance date to 2031.
Some result in direct obligations on the Company’s balance sheet while others are commitments, some firm and some based on uncertainties, which are disclosed in the Company’s consolidated financial statements. 33 The table below presents our known contractual obligations for the periods specified as of December 31, 2024.
Contractual Obligations In the course of normal business activities, the Company enters into a variety of contractual obligations and commercial commitments. Some result in direct obligations on the Company’s balance sheet while others are commitments, some firm and some based on uncertainties, which are disclosed in the Company’s consolidated financial statements.
Middlesex has received approval from the NJBPU to borrow up to $300.0 million from the New Jersey SRF Program, the New Jersey Economic Development Authority, private placement and other financial institutions as needed through December 31, 2025.
In September 2025, the NJBPU authorized Middlesex to borrow up to $260.0 million during the period January 2026 through December 2028, in one or more negotiated transactions in the form of notes and/or first mortgage bonds through loans from the New Jersey SRF Program, the New Jersey Economic Development Authority, private placement and other financial institutions as needed.
Depreciation Depreciation expense for the year ended December 31, 2024 decreased $0.8 million from the same period in 2023 due to recovery of prior year depreciation related to upgrades at the Park Avenue Plant partially offset by a higher level of utility plant in service.
Depreciation Depreciation expense for the year ended December 31, 2025 increased $2.7 million from the same period in 2024 due to higher average utility plant in service and the one-time recovery in 2024 of previous depreciation costs related to the PFAS treatment upgrades at Middlesex’s Park Avenue Plant in connection with Middlesex’s 2023 rate case order.
Operating Results by Segment The Company has two operating segments, Regulated and Non-Regulated. Our Regulated segment contributed approximately 93% of total revenues for the years ended December 31, 2024, 2023 and 2022, respectively, and approximately 94%, 92% and 93% of net income for the years ended December 31, 2024, 2023 and 2022, respectively.
Our Regulated segment contributed approximately 94% and 93% of total revenues for the years ended December 31, 2025 and 2024, respectively, and approximately 94% of net income for each of the years ended December 31, 2025 and 2024, respectively. The discussion of the Company’s results of operations is on a consolidated basis and includes significant factors by subsidiary.
Operation and Maintenance Expense Operation and maintenance expenses for the year ended December 31, 2024 increased $9.2 million from the same period in 2023 due to increased legal, financial and regulatory matter costs, increased labor costs due to annual wage increases, an enhanced water treatment process at Middlesex’s Park Avenue Plant, and higher energy costs due to increased water demand.
Operation and Maintenance Expense Operation and maintenance expenses for the year ended December 31, 2025 decreased $1.1 million from the same period in 2024 due to higher capitalizable costs and lower legal, financial and regulatory matter costs, partially offset by increased production costs from weather-driven lower water quality, increased weather-driven main break repair costs, higher labor cost due to wage and employee headcount increases and the one-time recovery in 2024 of previous water treatment operating costs at Middlesex’s Park Avenue Plant in connection with Middlesex’s 2023 rate case order.
For the year ended December 31, 2024, cash flows from operating activities increased $5.9 million to $58.7 million. The increase in cash flows from operating activities primarily resulted from the impact of higher weather-driven customer demand and Middlesex’s approved base rate increase effective March 1, 2024. Increases in certain operating costs impact our liquidity and capital resources.
The increase in cash flows from operating activities primarily resulted from the impact of Middlesex’s approved base rate increase effective March 1, 2024, Tidewater's base rate increase effective July 3, 2025, Middlesex's increased DSIC, decreased unbilled revenues and lower federal income tax payments. Increases in certain operating costs impact our liquidity and capital resources.
Cash Flows from Investing Activities For the year ended December 31, 2024, cash flows used in investing activities decreased $15.6 million to $74.6 million due to decreased utility plant expenditures in 2024.
Cash Flows from Investing Activities For the year ended December 31, 2025, cash flows used in investing activities increased $26.3 million to $101.0 million due to increased utility plant expenditures in 2025 and Tidewater’s acquisition of the water utility assets of Ocean View.
Tidewater has drawn down less than $0.1 million on these loans as of December 31, 2024. Each project has its own construction timetable with the last spending set to occur in 2026. Tidewater also has two active construction projects funded by Delaware SRF loans totaling $8.3 million with remaining availability of funds for borrowing.
In December 2025, Tidewater closed on an additional $1.0 million, 2.0% SRF loan with a maturity date of 2045 related to these projects. Tidewater has drawn down $0.9 million on these loans as of December 31, 2025. Each project has its own construction timetable with the last spending set to occur in 2027.
The decrease in cash flows provided by financing activities is due to lower proceeds from the issuance of common stock under the Middlesex Water Company Investment Plan (Investment Plan) and long-term debt offset by proceeds received from a litigation settlement. For further discussion on the Company’s short-term and long-term debt, see “ Sources of Liquidity ” below.
The increase in cash flows provided by financing activities is due to higher long-term debt and short-term borrowings, and higher proceeds from the issuance of common stock under Middlesex’s At-the-Market (ATM) equity offering program, partially offset by proceeds received from a litigation settlement in 2024.
The discount rate, compensation increase rate and long-term rate of return used to determine future obligations of our retirement benefit plans as of December 31, 2024 are as follows: Pension Plan Other Benefits Plan Discount Rate 5.47% 5.49% Compensation Increase 3.00% 3.00% Long-term Rate of Return 7.00% 7.00% For the 2024 valuation, costs and obligations for our Other Benefits Plan assumed an 8.0% annual rate of increase in the per capita cost of covered healthcare benefits in 2025 with the annual rate of increase declining 0.15% per year for 2026-2045, resulting in an annual rate of increase in the per capita cost of covered healthcare benefits of 5.0% by year 2045. 35 The following is a sensitivity analysis for certain actuarial assumptions used in determining projected benefit obligations (PBO) and expenses for our retirement benefit plans: Pension Plan Actuarial Assumptions Estimated Increase/ (Decrease) on PBO (000s) Estimated Increase/ (Decrease) on Expense (000s) Discount Rate 1% Increase $ (8,940 ) $ (38 ) Discount Rate 1% Decrease 10,814 1,338 Other Benefits Plan Actuarial Assumptions Estimated Increase/ (Decrease) on PBO (000s) Estimated Increase/ (Decrease) on Expense (000s) Discount Rate 1% Increase $ (3,299 ) $ (454 ) Discount Rate 1% Decrease 4,075 551 Healthcare Cost Trend Rate 1% Increase 3,434 673 Healthcare Cost Trend Rate 1% Decrease (2,824 ) (549 ) Recent Accounting Standards See Note 1(q) of the Notes to Consolidated Financial Statements for a discussion of recent accounting pronouncements. 36
The discount rate, compensation increase rate and long-term rate of return used to determine future obligations of our retirement benefit plans as of December 31, 2025 are as follows: Pension Plan Other Benefits Plan Discount Rate 5.39% 5.49% Compensation Increase 3.00% 3.00% Long-term Rate of Return 6.25% 6.75% For the 2025 valuation, costs and obligations for our Other Benefits Plan assumed an 8.0% annual rate of increase in the per capita cost of covered healthcare benefits in 2026 with the annual rate of increase declining 0.15% per year for 2027-2046, resulting in an annual rate of increase in the per capita cost of covered healthcare benefits of 5.0% by year 2046.
The final maturity date for both FMBs is August 1, 2056, with scheduled debt service payments over the life of these loans. Substantially all of the utility plant of the Company is subject to the lien of its mortgage, which includes debt service and capital ratio covenants. The Company is in compliance with all of its mortgage covenants.
The interest rates and due dates on both of these notes were 6.17% and 2043, respectively. Substantially all of the utility plant of the Company is subject to the lien of its mortgage, which includes debt service and capital ratio covenants. As of December 31, 2025, the Company is in compliance with all of its mortgage covenants.
Changes in customer water usage habits, as well as increases in capital expenditures and operating costs, are significant factors in determining the timing and extent of rate increase requests. Our investments in system infrastructure continue to grow significantly and our operating costs are anticipated to increase in 2025 and 2026 in a variety of categories.
Changes in customer water usage habits, as well as increases in capital expenditures and operating costs, are significant factors in determining the timing and extent of base rate increase requests. 21 Table of Contents Operating Results by Segment The Company has two operating segments, Regulated and Non-Regulated.
Proceeds from the loan were used to pay off Tidewater’s outstanding balances under its bank lines of credit and for other general corporate purposes. In April 2023, Tidewater closed on two DEPSC-approved Delaware SRF loans totaling $6.9 million, all at interest rates of 2.0% with maturity dates in 2043 and 2044.
The net proceeds from the sale were used to repay short-term borrowings under the Company’s bank lines of credit and for other general corporate purposes. In September 2024, Tidewater closed on a $2.2 million Delaware SRF loan with a 0.0% interest rate with an expected maturity date in 2044.
The actual amount and timing of capital expenditures is dependent on the need for replacement of existing infrastructure, customer growth, residential new home construction and sales, project scheduling and continued refinement of project scope and costs. 31 To fund our capital program in 2025, we estimate we will utilize some or all of the following: ● Internally generated funds; ● Short-term borrowings, as needed, through $140 million of available lines of credit with several financial institutions.
The actual amount and timing of capital expenditures is dependent on the need for replacement of existing infrastructure, customer growth, residential new home construction and sales, project scheduling and continued refinement of project scope and costs.
Cash Flows from Financing Activities For the year ended December 31, 2024, cash flows from financing activities decreased $18.2 million to $17.7 million.
For the year ended December 31, 2025, cash flows from operating activities increased $3.9 million to $62.6 million.
The Company plans to invest approximately $93 million in 2025 in connection with this plan for projects that include, but are not limited to: ● Replacement of 19,550 linear feet of cast iron main in Woodbridge Township in our Middlesex System; ● Construction of new elevated water tanks in Delaware; and ● Various water main replacements and improvements.
The Company plans to invest approximately $126 million in 2026 in connection with this plan for projects that include, but are not limited to: • Upgrade of the Carl J.
These loans are for the construction of a one-million gallon elevated storage tank and construction, relocation, improvement, and interconnection of transmission mains. Tidewater has drawn a total of $4.9 million through December 31, 2024 and expects that the requisitions will continue through the second quarter of 2025.
Separately, Tidewater has two active construction projects funded by Delaware SRF loans totaling $8.3 million with remaining availability of funds for borrowing. These loans are for the construction of a one-million gallon elevated storage tank and construction, relocation, improvement, and interconnection of transmission mains.
As of December 31, 2024, $23.0 million was outstanding under these lines of credit (see discussion under “ Sources of Liquidity-Short-term Debt ” below); ● Proceeds from the Delaware State Revolving Fund (SRF) Program.
To fund our capital program in 2026, we estimate we will utilize some or all of the following: • Internally generated funds; • Short-term borrowings, as needed, through $148 million of available lines of credit with several financial institutions. (see discussion under “ Sources of Liquidity-Short-term Borrowings ” below); • Proceeds from the Delaware State Revolving Fund (SRF) Program.
In April 2023, Middlesex received approval from the NJBPU to issue and sell up to 1.0 million shares of its common stock, without par value, through December 31, 2025. Sales of additional shares of common stock are part of the Company’s comprehensive financing plan to fund its multi-year utility plant infrastructure investment program.
Middlesex's was previously authorized to issue and sell up to 1.0 million shares of its common stock, without par value for the period beginning in April 2023 through December 2025. In May 2025, Middlesex entered into an ATM Equity Offering Sales Agreement (Equity Sales Agreement) with BofA Securities, Inc., Robert W. Baird & Co.
Tidewater - In September 2024, the DEPSC approved Tidewater’s petition to recover up to $2.1 million of costs associated with Tidewater’s obligation to identify and inventory lead service lines throughout Tidewater’s service area, as required by federal law and Delaware regulations. Recovery of these costs began February 1, 2025 and is expected to continue through January 2028.
This loan is for costs associated with Southern Shore’s obligation, as required by federal law and Delaware regulations, to identify and inventory lead service lines in its service area. In February 2026, Pinelands Water and Pinelands Wastewater repaid in full $3.7 million and $3.4 million, respectively, of their amortizing secured notes.
Removed
Tidewater’s subsidiary, White Marsh, services approximately 4,300 customers in Kent and Sussex Counties through various operations and maintenance contracts. USA-PA operates the water and wastewater systems for the City of Perth Amboy, New Jersey (Perth Amboy) under a 10-year operations and maintenance contract expiring in 2028.
Added
Our Delaware subsidiaries, Tidewater and Southern Shores Water Company, LLC, provide water services to approximately 65,000 retail customers in New Castle, Kent and Sussex Counties, Delaware. Tidewater’s subsidiary, White Marsh, services approximately 3,700 households in Kent and Sussex Counties through various operations and maintenance contracts.
Removed
Management Update Upon the retirements of President and Chief Executive Officer Dennis W. Doll, and Senior Vice President, Treasurer and Chief Financial Officer A. Bruce O’Connor, the Company named Nadine Leslie its new President and Chief Executive Officer effective March 1, 2024 and Mohammed G.
Added
USA operates the Borough of Avalon, New Jersey’s (Avalon) water utility, sewer utility and storm water system under a ten-year operations and maintenance contract expiring in 2032. USA also operates the Borough of Highland Park, New Jersey’s (Highland Park) water and wastewater systems under a 10-year operations and maintenance contract expiring in 2030.
Removed
Zerhouni its new Senior Vice President, 24 Treasurer and Chief Financial Officer effective June 24, 2024. Ms. Leslie was also appointed to the Board of Directors effective March 1, 2024. In December 2024, the Company named Gregory Sorensen its new Vice President and Chief Operating Officer.
Added
Rates and Regulatory Matters Middlesex - In February 2026, the New Jersey Board of Public Utilities (NJBPU) approved: • $14.5 million of base rate increases for Middlesex and Pinelands, effective February 23, 2026; • A Resiliency and Environmental System Improvement Charge (RESIC) Foundational Filing, which allows for the recovery of certain costs of future Middlesex and Pinelands investments related to compliance with requirements to address existing and emerging chemical elements or compounds, installation of new plant or equipment or replacement of existing plant or equipment to further maintain, enhance, or improve resiliency, health, safety or environmental protection; and • A Distribution System Improvement System Charge (DSIC) Foundational Filing, which allows for the recovery of future Middlesex and Pinelands Water investments in qualifying capital improvements to their water distribution system.
Removed
His responsibilities include water and wastewater operations, capital program planning and delivery, safety and security, sustainability, and growth initiatives.
Added
In January 2026, the NJBPU approved the merger of Pinelands into Middlesex through a corporate reorganization. Tidewater - In July 2025, the Delaware Public Service Commission (DEPSC) approved a $5.5 million base rate increase for Tidewater, effective July 3, 2025.
Removed
Tidewater Acquisition of the Water Utility Assets of the Town of Ocean View, Delaware In February 2025, Tidewater and the Town of Ocean View, Delaware’s (Ocean View) joint application for Tidewater’s purchase of all of the rights, title, and interest in the water utility assets of Ocean View for $4.6 million was approved by the Delaware Public Service Commission (DEPSC).
Added
In April 2025 and January 2026, Tidewater completed the acquisitions of the water utility assets of the Town of Ocean View, Delaware and Pinewood Acres, LLC, respectively, as authorized by the DEPSC.
Removed
Ocean View serves approximately 900 customers in Sussex County, Delaware. Tidewater currently provides water service to most residents of Ocean View other that the 900 customers currently served by Ocean View. Closing on this purchase is expected by April 2025.
Added
For additional information, see Note 2, Rates and Regulatory Matters Perfluoroalkyl Substances (PFAS) Multi-District Litigation Settlement Several of the Company’s utility subsidiaries are parties to a multi-district litigation (MDL) lawsuit against manufacturers of certain PFAS for damages, contribution and reimbursement of costs incurred and continuing to be incurred to address the presence of such PFAS in public water supply systems owned and operated by these utility subsidiaries and throughout their service areas.
Removed
The approved tariff rates were designed to recover increased operating costs as well as a return on invested capital of $563.1 million, based on an authorized return on common equity of 9.6%. Middlesex has made capital infrastructure investments to ensure prudent upgrade and replacement of its utility assets to support continued regulatory compliance, resilience and overall quality of service.
Added
Settlements with several defendants in the MDL have received final approval by the MDL court. The Company timely submitted to the MDL court its Phase One claim forms under settlement agreements with defendants 3M Company, DuPont de Nemours, Inc., Tyco Fire Products LP and BASF Corporation.
Removed
In August 2023, Middlesex and 3M Company (3M) executed a settlement agreement (Settlement Agreement) to resolve a lawsuit Middlesex previously initiated claiming 3M introduced Perfluoroalkyl Substances (PFAS) into the Company’s water supply for its Park Avenue Wellfield Treatment Plant (Park Avenue Plant).
Added
In 2025, the Company received settlement payments from 3M Company that will ultimately be refunded to customers. The Company anticipates receiving additional settlement payments in 2026 from the defendants named above.
Removed
The rate case settlement provided that the net proceeds from the 3M Settlement Agreement were to be used to mitigate the increase in customer rates and reimburse Middlesex for previously incurred costs for the construction of the Park Avenue Plant PFAS treatment upgrades, including depreciation and carrying costs.
Added
Olson Surface Water Treatment Plant (CJO Plant) to integrate PFAS removal from source water and CJO Plant finished water pump electrical distribution system improvements in our Middlesex System; • Construction of new water treatment facilities, distribution system improvements and PFAS treatment facilities in Delaware; and • Various water main replacements and improvements.
Removed
This resulted in the reclassification of $48.3 million from Regulatory Liabilities to Contributions in Aid of Construction from the December 31, 2023 balance sheet.
Added
The Company utilizes semi-annual DSIC and RESIC filings between general rate case filings to timely recover costs for qualified capital investments related to its utility systems as well as compliance with requirements to address existing and emerging chemical elements or compounds, installation of new plant or equipment or replacement of existing plant or equipment to further maintain and enhance resiliency, health, safety or environmental protection investments.
Removed
In 2024, the Company also recognized the recovery of $0.9 million for depreciation and $4.1 million for carrying costs associated with the Park Avenue Plant PFAS treatment upgrades, as well as the recovery of $2.6 million of previously incurred operating treatment costs while the Park Avenue Plant PFAS treatment upgrades were in process.
Added
Organic residential customer growth continues in our Tidewater system (approximately 3.0% in 2025) through expansion of our franchise area.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed8 unchanged
Biggest changeThere were no material changes to our primary market risk exposures or how such exposures are managed in 2024 nor are there expected to be in the future. 37
Biggest changeThere were no material changes to our primary market risk exposures or how such exposures are managed in 2025 nor are there expected to be in the future. 28 Table of Contents
The Company’s interest rate risk related to existing fixed rate, long-term debt is not material due to the term of the majority of our First Mortgage Bonds, which have final maturity dates ranging from 2026 to 2059. Over the next twelve months, approximately $7.7 million of the current portion of existing long-term debt instruments will mature.
The Company’s interest rate risk related to existing fixed rate, long-term debt is not material due to the term of the majority of our First Mortgage Bonds, which have final maturity dates ranging from 2026 to 2059. Over the next twelve months, approximately $7.9 million of the current portion of existing long-term debt instruments will mature.
Fixed rate long-term debt and variable rate short-term debt agreements were not entered into for trading purposes. Our risks associated with commodity price increases for chemicals, electricity and other commodities are reduced through contractual arrangements and the ability to recover price increases through rates.
Fixed rate long-term debt and variable rate short-term debt agreements were not entered into for trading purposes. Our risks associated with commodity price increases for chemicals, electricity and other commodities we use are reduced through contractual arrangements and the ability to recover price increases through rates.

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