Company: MSEX
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0001174947-25-001119
Chunk: 24

Company: MIDDLESEX WATER CO
Filing Date: 2025-07-31
Form: 10-Q
Item: Item 1
Chunk 24
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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.

15 

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 June 30, 2025 and 2024, respectively, and $0.4 million for
each of the six months ended June 30, 2025 and 2024, respectively.

Information related to operating lease ROU assets
and lease liabilities is as follows:

    (In Millions)

    As of

    June 30, 2025 
    December 31, 2024
  
    ROU Asset at Lease Inception 
    $7.3  
    $7.3 
  
    Accumulated Amortization 
     (5.0) 
     (4.7)
  
    ROU Asset 
    $2.3  
    $2.6 

The Company’s future minimum operating lease commitments as
of June 30, 2025 are as follows:

    (In Millions)
  
    2025 
    $0.3 
  
    2026 
     0.9 
  
    2027 
     0.9 
  
    2028 
     0.9 
  
    2029 
     0.9 
  
    Total Lease Payments 
    $3.9 
  
    Imputed Interest 
     (1.2)
  
    Present Value of Lease Payments 
     2.7 
  
    Less Current Portion* 
     (0