Middlesex Water (MSEX) risk factors, FY2024 10-K

Operational Risks

1. 01Weather conditions and overuse of underground aquifers may interfere with our sources of water, demand for water services and our ability to supply water to customers
2. 02The necessity for ongoing physical and technological security has resulted, and may continue to result, in increased operating costs
3. 03Climate 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

Regulatory Risks

1. 04Certain costs are not completely within our control. 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
2. 05We 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

1. 06We face competition from other utilities and service providers which might hinder our growth opportunities and mitigate our future profitability
2. 07We have short-term and long-term contractual obligations for water, wastewater and storm water system operation and maintenance under which we may incur costs in excess of payments received
3. 08Capital market conditions and key assumptions may adversely impact the value of our postretirement benefit plan assets and liabilities
4. 09An element of our growth strategy is the acquisition of water and wastewater assets, operations, contracts or companies. Any pending or future acquisitions we decide to undertake will involve risks
5. 10Our ability to achieve organic customer growth in our market area is dependent on the residential building market. New housing starts and home sale closings are one element that impacts our rate of growth and therefore, may not meet our expectations
6. 11There 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
7. 12We 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
8. 13The current concentration of our business in central New Jersey and in Delaware makes us susceptible to adverse developments in local regulatory, economic, demographic, competitive and weather conditions
9. 14We are subject to anti-takeover measures that may be used to discourage, delay or prevent changes of control that might benefit non-management shareholders

General Risks

1. 15General economic conditions may materially and adversely affect our financial condition and results of operations
2. 16We rely on our information technology systems to help manage our operations
3. 17Our information technology systems may be subject to physical and cyber attacks
4. 18We depend significantly on the technical and management services of our team, and the departure of any of certain persons could cause our operating results to temporarily be short of our expectations