XML 64 R15.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Capitalization | 12 Months Ended
--- | ---
Dec. 31, 2014
Capitalization [Abstract] |
Capitalization | Note 6 - Capitalization All the transactions discussed below related to the issuance of securities were approved by either the NJBPU or DEPSC, except where otherwise noted. Common Stock The number of shares authorized under the Dividend Reinvestment and Common Stock Purchase Plan (DRP) is 2.3 million shares. In February 2015, the Company filed a petition with the NJBPU seeking approval to increase the number of shares authorized under the DRP from 2.3 million shares to 3.0 million shares. The cumulative number of shares issued under the DRP at December 31, 2014 is 2.2 million. For the years ended December 31, 2014, 2013 and 2012, the Company raised approximately $1.5 million, $1.7 million and $1.6 million, respectively, through the issuance of shares under the DRP. The Company issues shares under a restricted stock plan for certain management employees, which is described in Note 7 – Employee Benefit Plans. The Company maintains a stock plan for its outside directors (the Outside Director Stock Compensation Plan). For the years ended December 31, 2014, 2013 and 2012, 5,082, 5,432 shares and 5,768 shares, respectively, of common stock were granted and issued to the Company's outside directors under the Outside Director Stock Compensation Plan and 76,915 shares remain available for future awards. The maximum number of shares authorized for grant under the Outside Director Stock Compensation Plan is 100,000. In the event dividends on the preferred stock are in arrears, no dividends may be declared or paid on the common stock of the Company. At December 31, 2014, no preferred stock dividends were in arrears. Preferred Stock If four or more quarterly dividends are in arrears, the preferred shareholders, as a class, are entitled to elect two members to the Board of Directors in addition to Directors elected by holders of the common stock. At December 31, 2014 and 2013, there were 0.1 million shares of preferred stock authorized and less than 0.1 million shares of preferred stock outstanding. There were no preferred stock dividends in arrears. The Company may not pay any dividends on its common stock unless full cumulative dividends to the preceding dividend date for all outstanding shares of preferred stock have been paid or set aside for payment. All such preferred dividends have been paid. In addition, if Middlesex were to liquidate, holders of preferred stock would be paid back the stated value of their preferred shares before any distributions could be made to common stockholders. The conversion feature of the no par $7.00 Series Cumulative and Convertible Preferred Stock allows the security holders to exchange one convertible preferred share for twelve shares of the Company's common stock. In addition, the Company may redeem up to 10% of the outstanding convertible stock in any calendar year at a price equal to the fair value of twelve shares of the Company's common stock for each share of convertible stock redeemed. In 2014, 4,293 shares (approximately $0.5 million) of the Company's no par $7.00 Series Cumulative and Convertible Preferred Stock were converted into 51,516 shares of common stock. The conversion feature of the no par $8.00 Series Cumulative and Convertible Preferred Stock allows the security holders to exchange one convertible preferred share for 13.714 shares of the Company's common stock. The preferred shares are convertible into common stock at the election of the security holder or Middlesex. In 2013, 4,000 shares (approximately $0.5 million) of the Company's no par $8.00 Series Cumulative and Convertible Preferred Stock were converted into 54,856 shares of common stock. Long-term Debt In October 2014, Tidewater completed a $15.0 million debt transaction. In December 2014 and February 2015, Tidewater borrowed $8.0 million and $3.0 million, respectively, under the loan agreement, which allows Tidewater to borrow, in increments at its discretion, until April 30, 2015. The interest rate on the $11.0 million is 4.46%. The proceeds were used to pay down short-term debt and for other general corporate purposes. The interest rate on any borrowings from the remaining $4.0 million proceeds will be set at the time of the borrowing. Those funds are expected to be used to fund a portion of Tidewater's ongoing capital program. The final maturity date of all borrowings under this loan agreement is April 1, 2040. In May 2014, Middlesex borrowed approximately $3.8 million through the New Jersey Environmental Infrastructure Trust (NJEIT) under the New Jersey State Revolving Fund (SRF) loan program and issued first mortgage bonds designated as Series VV (approximately $2.8 million) and Series WW (approximately $0.9 million). The interest rate on the Series VV bond is zero and the interest rate on the Series WW bond ranges from 3.0% to 5.0% depending on the serial maturity date. The final maturity date for both bonds is August 1, 2033. Proceeds were recorded as Restricted Cash and can only be used for the Middlesex 2014 RENEW project, which is part of a program to clean and cement all unlined mains in the Middlesex system. As of December 31, 2014, there remains $1.4 million of proceeds available to Middlesex. In 2014, Tidewater borrowed $0.6 million, which represented the balance of a $1.1 million project specific loan with the Delaware SRF at an interest rate of 3.45% and final maturity of August 1, 2031. In May 2013, Middlesex borrowed $3.9 million through the NJEIT under the New Jersey SRF loan program and issued First Mortgage Bonds (Bonds) designated as Series TT ($2.9 million) and Series UU ($1.0 million). The interest rate on the Series TT Bonds is zero and the interest rate on the Series UU Bonds ranges from 3.0% to 3.25% depending on the serial maturity date. The final maturity date for both bonds is August 1, 2032. Proceeds were used for the Middlesex 2013 RENEW Program. Bond Series QQ through SS are term bonds with single maturity dates subsequent to 2019. Principal repayments for all series of the Company's long-term debt except for Bond Series X and Y extend beyond 2019. The aggregate annual principal repayment obligations for all long-term debt over the next five years are shown below:
Year |  | (Millions of Dollars) Annual Maturities
2015 |  | $5.9
2016 |  | $6.1
2017 |  | $6.2
2018 |  | $6.3
2019 |  | $6.3
The weighted average interest rate on all long-term debt at both December 31, 2014 and 2013 was 3.99% and 4.23%, respectively. Except for the Amortizing Secured Notes, all of the Company's outstanding long-term debt has been issued through the NJEDA ($55.4 million), the NJEIT program ($33.8 million) and the Delaware SRF program ($9.8 million). Restricted cash proceeds are from various New Jersey SRF loans and are held in trusts until authorized for distribution. Series VV and WW proceeds can only be used for the 2014 RENEW Program. All other restricted cash proceeds are for debt service requirements on the New Jersey SRF loans. In 2013 and 2012, the NJEIT de-obligated principal payments of $0.1 million and $0.3 million, respectively, on several series of SRF long-term debt. There were no de-obligated principal payments in 2014. 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 and restrictions. Earnings Per Share The following table presents the calculation of basic and diluted earnings per share (EPS) for the three years ended December 31, 2014. Basic EPS is computed on the basis of the weighted average number of shares outstanding. Diluted EPS assumes the conversion of both the Convertible Preferred Stock $7.00 Series and $8.00 Series.
|  | (In Thousands, Except Per Share Amounts)
|  | 2014 |  | 2013 |  | 2012
Basic: |  | Income |  | Shares |  | Income |  | Shares |  | Income |  | Shares
Net Income |  | $ | 18,445 |  |  |  | 16,052 |  |  | $ | 16,633 |  |  |  | 15,868 |  |  | $ | 14,396 |  |  |  | 15,733 |
Preferred Dividend |  |  | (151 | ) |  |  |  |  |  |  | (190 | ) |  |  |  |  |  |  | (206 | ) |  |  |  |
Earnings Applicable to Common Stock |  | $ | 18,294 |  |  |  | 16,052 |  |  | $ | 16,443 |  |  |  | 15,868 |  |  | $ | 14,190 |  |  |  | 15,733 |
Basic EPS |  | $ | 1.14 |  |  |  |  |  |  | $ | 1.04 |  |  |  |  |  |  | $ | 0.90 |  |  |  |  |
Diluted: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earnings Applicable to Common Stock |  | $ | 18,294 |  |  |  | 16,052 |  |  | $ | 16,443 |  |  |  | 15,868 |  |  | $ | 14,190 |  |  |  | 15,733 |
$7.00 Series Dividend |  |  | 74 |  |  |  | 133 |  |  |  | 97 |  |  |  | 166 |  |  |  | 97 |  |  |  | 166 |
$8.00 Series Dividend |  |  | 24 |  |  |  | 41 |  |  |  | 40 |  |  |  | 76 |  |  |  | 56 |  |  |  | 96 |
Adjusted Earnings Applicable to Common Stock |  | $ | 18,392 |  |  |  | 16,226 |  |  | $ | 16,580 |  |  |  | 16,110 |  |  | $ | 14,343 |  |  |  | 15,995 |
Diluted EPS |  | $ | 1.13 |  |  |  |  |  |  | $ | 1.03 |  |  |  |  |  |  | $ | 0.90 |  |  |  |  |
Fair Value of Financial Instruments The following methods and assumptions were used by the Company in estimating its fair value disclosure for financial instruments for which it is practicable to estimate that value. The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable and notes payable approximate their respective fair values due to the short-term maturities of these instruments. The fair value of the Company's long-term debt relating to Bonds and SRF Notes is based on quoted market prices for similar issues. Under the fair value hierarchy, the fair value of cash and cash equivalents is classified as a Level 1 measurement and the fair value of notes payable and the Bonds and SRF Bonds in the table below are classified as Level 2 measurements. The carrying amount and fair value of the Company's bonds were as follows:
|  | (Thousands of Dollars)
|  | At December 31,
|  | 2014 |  | 2013
|  | Carrying |  | Fair |  | Carrying |  | Fair
|  | Amount |  | Value |  | Amount |  | Value
Bonds |  | $ | 88,628 |  |  | $ | 90,115 |  |  | $ | 87,471 |  |  | $ | 79,733 |
State Revolving Notes |  | $ | 540 |  |  | $ | 542 |  |  | $ | 625 |  |  | $ | 628 |
For other long-term debt for which there was no quoted market price and there is not an active trading market, it was not practicable to estimate their fair value (for details, including carrying value, interest rate and due date on these series of long-term debt, please refer to those series noted as “Amortizing Secured Note” and “State Revolving Trust Note” on the Consolidated Statements of Capital Stock and Long-Term Debt). The carrying amount of these instruments was $50.8 million and $45.0 million at December 31, 2014 and 2013, respectively. Customer advances for construction have a carrying amount of $22.0 million and $21.8 million at December 31, 2014 and 2013, respectively. Their relative fair values cannot be accurately estimated since future refund payments depend on several variables, including new customer connections, customer consumption levels and future rate increases.

X
- Definition The entire disclosure for Capitalization. + References No definition available. + Details
Name: | msex_CapitalizationTextBlock
Namespace Prefix: | msex_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Details
Name: | us-gaap_CapitalizationLongtermDebtAndEquityAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration