Company: MSEX
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001628280-25-047821
Chunk: 60

Company: MIDDLESEX WATER CO
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 8
Chunk 60
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 Company determines that the arrangement gives the Company control over the use of an identified asset and obtains substantially all of the benefits from the identified asset.

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Table of Contents

The Company’s only significant operating lease is for office space for administrative purposes, which expires in January 2030. The Company has not entered into any finance leases. The exercise of a lease renewal option for the Company’s administrative offices is solely at the discretion of the Company.The right-of-use (ROU) asset recorded represents the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company’s operating lease does not provide an implicit discount rate and as such the Company used an estimated incremental borrowing rate (4.03%) based on the information available at the commencement date in determining the present value of lease payments.Given the impacts of accounting for regulated operations, and the resulting recognition of expense at the amounts recovered in customer rates, expenditures for operating leases are consistent with lease expense and were $0.2 million for each of the three months ended September 30, 2025 and 2024, respectively, and $0.6 million for each of the nine months ended September 30, 2025 and 2024, respectively.Information related to operating lease ROU assets and lease liabilities is as follows:(In Millions)As ofSeptember 30, 2025December 31, 2024ROU Asset at Lease Inception$7.3 $7.3 Accumulated Amortization(5.2)(4.7)ROU Asset$2.1 $2.6 The Company’s future minimum operating lease commitments as of September 30, 2025 are as follows:(In Millions)2025$0.2 20260.8 20270.9 20280.9 20290.9 Total Lease Payments$3.7 Imputed Interest1.1 Present Value of Lease Payments2.6 Less Current Portion*(0.6)Non-Current Lease Liability$2.0 *Included in Other Current LiabilitiesConstruction – In connection with the Company’s planned capital expenditures, the Company has entered into several contractual construction agreements that in total obligate it to expend an estimated $18.9 million in the future. The actual amount and timing of