“A Provider of Water, Wastewater & Related Services”
Today’s Presenters
Dennis W. Doll, President & CEO
Bruce O’Connor, Vice President & CFO
Forward Looking Statement
Certain matters discussed in this presentation are forward-looking
statements intended to qualify for the “safe harbor” from liability
established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as
such because the context of the statement will include words such
as the Company “believes,” “anticipates,” “expects” or words of
similar import. Similarly, statements that describe the Company’s
future plans, objectives, estimates or goals are also forward-
looking statements that are subject to the risks and uncertainties
that could cause actual results to differ materially from those
expressed or implied in the statements.
© Middlesex Water Company
OVERVIEW
Serve approximately 125,000 retail and
wholesale water customers in New Jersey and
Delaware
Expanded over time to provide a full range of
regulated and non-regulated water, wastewater
and related services
Cash dividends paid in varying amounts
continually since 1912.
NASDAQ Global Select Market: MSEX
Established in 1897 to
collect, treat and
distribute water for
domestic, commercial,
industrial and fire
protection purposes
© Middlesex Water Company
STATS AT A GLANCE
52-week low/high: $16.93/$20.24
Market capitalization: $249.81 million
Common shares outstanding: 13.2 million
Average daily volume: 30,000 shares (3 months)
Current dividend yield: 3.65%
Institutional Ownership: 25%
As of September 12, 2007
© Middlesex Water Company
Investor-Owned Water/Wastewater Industry
Capital intensive, high barriers to entry
Significant need for continued capital investment on a national level
Consolidation has left only 11 publicly-traded investor owned-
companies (23 ten years ago)
54,000 community water systems in the U.S.
47,000 serve fewer than 3,000 customers each.
84% of market is government-controlled.
Consolidation and privatization is expected to continue
Rate base/rate of return methodology provides return of and
return on investments plus recovery of operating expenses
© Middlesex Water Company
- Background -
Investor-Owned Water/Wastewater Industry
Wastewater is a growing opportunity for
investor-owned water purveyors.
Skills are complementary
Non-regulated contract operations can be
an important part of the menu of services
Range of products and services continues to expand
Regulated utilities are only one component (related products and
services continue to expand).
“Water is the next oil.”
© Middlesex Water Company
- Background -
The Middlesex Story
© Middlesex Water Company
Build long-term shareholder value by being a
trusted provider of safe, reliable and
cost-effective water, wastewater and related
products and services in New Jersey,
Delaware and beyond.
Vision & Strategy
© Middlesex Water Company
Total Customers Served – 125,000
© Middlesex Water Company
What We Do
Regulated
Non-regulated
© Middlesex Water Company
What We Do
Any Combination Along the
Public/Private Partnership Continuum
Design
Bid
Build
Private
Contract
Fee (O&M)
Services
Design
Build
Build
Operate
Transfer
Design
Build
Finance
Operate
Build
Own
Operate
Public
Projects
Public Owns
We Operate
Public Owns
& Operates,
We Design
& Build
Public Owns.
We Design,
Build &
Operate
Public Owns. We
Design, Build,
Finance &
Operate
(Concession Deal)
We Do it All
(Traditional
Regulated Utility
Model)
PUBLIC
Responsibility
PRIVATE
Responsibility
© Middlesex Water Company
Our Services
Design, build, own and operate water and wastewater assets
Complementary water and wastewater products & services
Public/Private partnerships
Customers
2006
Renewable Energy: Good for the
Environment and Good for Business
Solar Panels at Our Largest Treatment Plant
Plentiful and Reliable Supply of
Surface Water and Groundwater
Building Our Reputation, Drop by Drop
Emergency Planning & Preparedness
Review emergency preparedness plans to ensure the health
and safety of our customers.
Communicate regularly with local emergency management
officials to address crisis planning.
Work with State/County Health Departments to plan for the
fixed distribution of preventive medication to employees in
an regional emergency.
Member - State Water Sector Security Task Force.
Community Anti-Terrorism Training (C.A.T. Eyes).
© Middlesex Water Company
Corporate Social Responsibility
Building Relationships
Outreach/Education
Delivering
Shareholder Value
Prudent Investment In
Regulated Utility Infrastructure
Rate Base/Rate of Return
methodology allows for a
return on prudently
incurred costs to
construct utility assets
How We Deliver
Shareholder Value
Acquisition and Development of
Regulated and Non-Regulated
Businesses and Contracts
Combine organic customer and
utility infrastructure growth with
prudent investments in
additional regulated utilities,
non-regulated contract
operations and complementary
products and services.
Maximizing Shareholder Value
Timely/adequate rate case outcomes, minimize
regulatory lag
Diligently manage costs and drive down both
capital and O&M costs between rate cases
Profitable Growth
Organic customer growth, economies of scale
Acquisitions at reasonable prices
Complementary non-regulated products and
services with returns greater than achievable in the
regulated environment
The Challenge is Careful Execution of the Plan!
Delaware and Beyond
Privatizations and
acquisitions in NJ, DE
and beyond
Significant
opportunities in both
water and wastewater in
DE and beyond
Wastewater a key
driver of growth
Reputation for sound
technical solutions
spreading beyond NJ &
DE
Complementary
products and services
continue to grow
(LineCare & LineCare
Plus)
The Growth Story
Solid retail and
wholesale revenue base
in NJ
Experience in water and
wastewater contract ops
in both NJ and DE
Purchased TUI in 1992
with 2,400 customers.
Grown to 30,000
TUI operating in 60
active districts in DE:
90+ small plants
183 wells
270+ communities
Entered the regulated
wastewater business in
2005
The Recent Past
The Future
Where’s the Wastewater Treatment Plant?
Wastewater Plant
Critical Facilities Blend into the Landscape
ATER COMPANY
IDDLESEX
FINANCIAL
OVERVIEW
Performance
(millions except per share amounts)
© Middlesex Water Company
Six Months
Ended June 30,
2007
2006
Operating Revenues
$ 40.7
$ 39.3
Operating Expenses
$ 30.7
$ 29.1
Net Income
$
5.1
$
4.8
Diluted Earnings per Share
$
0.37
$
0.40
Key Drivers of Performance
Rate increases
Utility plant investment
Customer Growth
Upgrades & Replacements
Variable production costs
Power
Chemicals
Purchased Water
Treatment Residuals
Labor and benefits costs
© Middlesex Water Company
Rate Increases
© Middlesex Water Company
Amount
Increase
($ Millions)
Approved
Pinelands
$0.1
4/13/06
Tidewater
$2.1
6/27/06
(Interim Rates – 15%)
Tidewater
$1.8
2/28/07
Customer Growth
© Middlesex Water Company
Utility Plant
($ millions)
© Middlesex Water Company
2007 Capital Investment
New Jersey
$3.9 million on
infrastructure upgrades
replacements and
RENEW Program
Delaware
$4.9 million on
infrastructure
upgrades,
replacements and
new water and
wastewater
treatment facilities
© Middlesex Water Company
Equity Financing
Issued 1,495,000 common shares on 11/02/06
for gross proceeds of $27.6 million
Dividend Reinvestment Plan
$1.2 Million Annual Inflow
© Middlesex Water Company
2007 Debt Financing
State Revolving Fund
Delaware - $1.0 Million, 20 Years
New Jersey - $4.0 Million, 20 Years
© Middlesex Water Company
Capital Structure
($ millions)
© Middlesex Water Company
% to
6/30/2007
Total
LT Debt
$ 130.4
49.3%
Preferred
4.0
1.5%
Common
130.1
49.2%
$ 264.5
100.0%
© Middlesex Water Company
2007 Construction Program
($ millions)
Delaware Water Systems
$12.1
Delaware Wastewater Systems
6.0
MWC RENEW Program
3.9
Other Scheduled Upgrades
Total
$32.1
10.1
2007 Construction Funding
($ millions)
SRF Loans
Short Term
Reinvestment Plan
Common Stock Offering
Net Cash Flows
Total Funding
6.0
6.0
1.2
8.9
10.0
$32.1
Dividends
Annual Rate
Quarterly dividends paid since 1912
© Middlesex Water Company
2004
2005
2006
$0.67
$0.68
$0.69
Dividends Paid
$0.69
© Middlesex Water Company
2007 Dividend Yield
© Middlesex Water Company
Connecticut Water
3.6%
Middlesex Water
3.6%
Artesian Resources
3.5%
California Water
2.9%
York Water
2.8%
Pennichuck Corp.
2.7%
American States Water
2.3%
Aqua America
2.0%
SJW Corp.
1.9%
Southwest Water
1.7%
2006 Total Shareholder Return*
*Dividends plus change in stock price
© Middlesex Water Company
SJW Corp.
74%
American States Water
29%
Middlesex Water
12%
California Water
9%
York Water
6%
Artesian Resources
3%
Pennichuck Corp.
2%
Southwest Water
- 2%
Connecticut Water
- 4%
Aqua America
-15%
A Quality Investment
Stable customer base & excellent regulatory relations
+
Solid balance sheet & financing capability
+
Comprehensive suite of service offerings
+
Further growth and profitability
(expanding markets in NJ, DE and beyond)
+
Experienced management team and active industry leader
+
Reputation as honest and ethical problem-
solver for developers and municipalities
=
Total Shareholder Returns
© Middlesex Water Company
For Additional Information about
Middlesex Water Company, visit
www.middlesexwater.com
For Additional Information about
Tidewater Utilities, Inc., visit
www.tuiwater.com
QUESTIONS?
© Middlesex Water Company
A Provider of Water, Wastewater and
Related Products and Services
Thank you for your interest and support!
© Middlesex Water Company