MIDDLESEX WATER CO 10-Q

Item 1. Financial Statements (Unaudited): MIDDLESEX WATER COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Operating Revenues $ 54,091 $ 55,100 $ 147,715 $ 144,770 Operating Expenses: Operations and Maintenance 23,738 25,359 67,913 67,649 Depreciation 6,941 6,309 20,171 18,010 Other Taxes 5,709 5,931 16,460 16,430 Total Operating Expenses 36,388 37,599 104,544 102,089 Operating Income 17,703 17,501 43,171 42,681 Other Income (Expense): Allowance for Funds Used During Construction 432 354 1,218 787 Other Income (Expense), net 1,454 1,614 4,364 9,202 Total Other Income, net 1,886 1,968 5,582 9,989 Interest Charges 4,200 3,411 10,535 10,721 Income before Income Taxes 15,389 16,058 38,218 41,949 Income Taxes 1,431 1,739 4,001 6,402 Net Income 13,958 14,319 34,217 35,547 Preferred Stock Dividend Requirements 18 29 59 89 Earnings Applicable to Common Stock $ 13,940 $ 14,290 $ 34,158 $ 35,458 Earnings per share of Common Stock: Basic $ 0.77 $ 0.80 $ 1.90 $ 1.99 Diluted $ 0.77 $ 0.80 $ 1.90 $ 1.98 Average Number of Common Shares Outstanding : Basic 18,123 17,838 17,992 17,828 Diluted 18,154 17,952 18,023 17,943 See Accompanying Notes to Condensed Consolidated Financial Statements. 1 Table of Contents MIDDLESEX WATER COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) September 30, 2025 December 31, 2024 ASSETS UTILITY PLANT: Water Production $ 325,756 $ 314,924 Transmission and Distribution 918,455 855,497 General 108,142 105,167 Construction Work in Progress 37,444 34,209 TOTAL 1,389,797 1,309,797 Less Accumulated Depreciation 270,445 254,425 UTILITY PLANT - NET 1,119,352 1,055,372 CURRENT ASSETS: Cash and Cash Equivalents 3,384 4,226 Accounts Receivable, net of allowance for credit losses of $ 2,055 and $ 2,326 in 2025 and 2024, respectively 22,738 18,842 Unbilled Revenues 10,987 10,764 Materials and Supplies (at average cost) 7,309 6,719 Prepayments 5,184 2,422 TOTAL CURRENT ASSETS 49,602 42,973 OTHER ASSETS: Operating Lease Right of Use Asset 2,117 2,567 Restricted Cash 1,675 — Regulatory Assets 109,951 101,783 Non-utility Assets - Net 12,195 11,760 Employee Benefit Plans 40,468 36,856 Other 6,599 3,863 TOTAL OTHER ASSETS 173,005 156,829 TOTAL ASSETS $ 1,341,959 $ 1,255,174 CAPITALIZATION AND LIABILITIES CAPITALIZATION: Common Stock, No Par Value, authorized 40,000 , issued 18,337 and 17,887 in 2025 and 2024, respectively $ 269,636 $ 248,202 Retained Earnings 212,910 197,061 TOTAL COMMON EQUITY 482,546 445,263 Preferred Stock, No Par Value; authorized 120 ; issued 13 1,352 1,635 Long-term Debt 350,151 352,822 TOTAL CAPITALIZATION 834,049 799,720 CURRENT Current Portion of Long-term Debt 7,645 7,711 LIABILITIES: Notes Payable 55,000 23,000 Accounts Payable 28,143 28,050 Accrued Taxes 15,540 11,976 Accrued Interest 2,554 2,916 Unearned Revenues and Advanced Service Fees 1,497 1,476 Other 7,902 7,759 TOTAL CURRENT LIABILITIES 118,281 82,888 COMMITMENTS AND CONTINGENT LIABILITIES (Note 7) OTHER LIABILITIES: Advances for Construction 24,116 22,629 Lease Obligations 1,959 2,432 Accumulated Deferred Income Taxes 110,627 101,235 Regulatory Liabilities 63,063 64,557 Other 261 344 TOTAL OTHER LIABILITIES 200,026 191,197 CONTRIBUTIONS IN AID OF CONSTRUCTION 189,603 181,369 TOTAL CAPITALIZATION AND LIABILITIES $ 1,341,959 $ 1,255,174 See Accompanying Notes to Condensed Consolidated Financial Statements. 2 Table of Contents MIDDLESEX WATER COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Nine Months Ended September 30, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 34,217 $ 35,547 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 23,988 20,231 Provision for Deferred Income Taxes and Investment Tax Credits ( 4,361 ) 408 Equity Portion of Allowance for Funds Used During Construction (AFUDC) ( 735 ) ( 465 ) Cash Surrender Value of Life Insurance ( 134 ) ( 318 ) Stock Compensation Expense 1,119 1,227 Changes in Assets and Liabilities: Accounts Receivable ( 3,896 ) ( 4,531 ) Unbilled Revenues ( 223 ) ( 4,121 ) Materials & Supplies ( 590 ) 422 Prepayments ( 2,762 ) ( 1,298 ) Accounts Payable 2,300 4,737 Accrued Taxes 3,564 2,873 Accrued Interest ( 362 ) ( 742 ) Employee Benefit Plans ( 4,024 ) ( 5,781 ) Recovered Costs-Environmental Litigation Settlement — ( 8,774 ) Other Assets and Liabilities ( 3,967 ) ( 2,080 ) NET CASH PROVIDED BY OPERATING ACTIVITIES 44,134 37,335 CASH FLOWS FROM INVESTING ACTIVITIES: Utility Plant Expenditures, Including AFUDC-Debt of $ 483 in 2025 and $ 322 in 2024 ( 71,642 ) ( 49,480 ) Acquisition of Water Systems ( 4,607 ) — NET CASH USED IN INVESTING ACTIVITIES ( 76,249 ) ( 49,480 ) CASH FLOWS FROM FINANCING ACTIVITIES: Redemption of Long-term Debt ( 6,330 ) ( 6,438 ) Proceeds from Issuance of Long-term Debt 3,603 592 Net Short-term Bank Borrowings 32,000 ( 25,250 ) Proceeds from Litigation Settlement, Net — 63,635 Deferred Debt Issuance Expense ( 36 ) ( 54 ) Common Stock Issuance Expense ( 871 ) — Payment of Grantee Withholding Taxes in Exchange for Restricted Stock ( 379 ) ( 1,350 ) Proceeds from Issuance of Common Stock 21,281 740 Payment of Common Dividends ( 18,307 ) ( 17,326 ) Payment of Preferred Dividends ( 59 ) ( 89 ) Construction Advances and Contributions-Net 2,046 1,639 NET CASH PROVIDED BY FINANCING ACTIVITIES 32,948 16,099 NET CHANGES IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 833 3,954 CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD 4,226 2,390 CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD $ 5,059 $ 6,344 SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY: Utility Plant received as Construction Advances and Contributions $ 7,676 $ 6,959 Accrued Payables for Utility Plant $ 4,401 $ 10,927 Litigation Settlement Receivable $ — $ ( 6,237 ) Litigation Settlement Payable $ — $ ( 6,237 ) Conversion of Preferred Stock into Common Stock $ 283 $ 194 SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: Cash Paid During the Period for: Interest $ 11,070 $ 11,695 Interest Capitalized $ 483 $ 322 Income Taxes $ 946 $ 2,413 See Accompanying Notes to Condensed Consolidated Financial Statements. 3 Table of Contents MIDDLESEX WATER COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CAPITAL STOCK AND LONG-TERM DEBT (Unaudited) (In thousands) September 30, 2025 December 31, 2024 Common Stock, No Par Value $ 269,636 $ 248,202 Retained Earnings 212,910 197,061 TOTAL COMMON EQUITY $ 482,546 $ 445,263 Cumulative Preferred Stock, No Par Value: Convertible: $ 7.00 Series $ 274 $ 556 Nonredeemable: $ 7.00 Series 78 79 $ 4.75 Series 1,000 1,000 TOTAL PREFERRED STOCK $ 1,352 $ 1,635 Long-term Debt: First Mortgage Bonds, 0.00 %- 5.50 %, due 2026-2059 $ 271,172 $ 274,602 Amortizing Secured Notes, 3.94 %- 7.05 %, due 2028-2046 64,702 66,889 State Revolving Trust Notes, 0.00 %- 4.03 %, due 2026-2047 20,785 17,895 SUBTOTAL LONG-TERM DEBT 356,659 359,386 Add: Premium on Issuance of Long-term Debt 6,195 6,339 Less: Unamortized Debt Expense ( 5,058 ) ( 5,192 ) Less: Current Portion of Long-term Debt ( 7,645 ) ( 7,711 ) TOTAL LONG-TERM DEBT $ 350,151 $ 352,822 See Accompanying Notes to Condensed Consolidated Financial Statements. 4 Table of Contents MIDDLESEX WATER COMPANY CONDENSED CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY (Unaudited) (In thousands) Common Stock Shares Common Stock Amount Retained Earnings Total Balance at January 1, 2024 17,821 $ 246,764 $ 176,227 $ 422,991 Net Income — — 10,682 10,682 Middlesex Water Company Investment Plan 5 252 — 252 Restricted Stock Award - Net - Employees ( 12 ) ( 465 ) — ( 465 ) Cash Dividends on Common Stock ($ 0.3250 per share) — — ( 5,738 ) ( 5,738 ) Cash Dividends on Preferred Stock — — ( 30 ) ( 30 ) Balance at March 31, 2024 17,814 $ 246,551 $ 181,141 $ 427,692 Net Income — — 10,546 10,546 Middlesex Water Company Investment Plan 5 253 — 253 Restricted Stock Award - Net - Employees 3 ( 187 ) — ( 187 ) Restricted Stock Award - Board of Directors 7 397 — 397 Cash Dividends on Common Stock ($ 0.3250 per share) — — ( 5,793 ) ( 5,793 ) Cash Dividends on Preferred Stock — — ( 30 ) ( 30 ) Balance at June 30, 2024 17,829 $ 247,014 $ 185,864 $ 432,878 Net Income — — 14,319 14,319 Middlesex Water Company Investment Plan 4 235 — 235 Restricted Stock Award - Net - Employees — 133 — 133 Conversion of $ 7 Preferred Stock to Common Stock 22 194 — 194 Cash Dividends on Common Stock ($ 0.3250 per share) — — ( 5,795 ) ( 5,795 ) Cash Dividends on Preferred Stock — — ( 29 ) ( 29 ) Balance at September 30, 2024 17,855 $ 247,576 $ 194,359 $ 441,935 Balance at January 1, 2025 17,887 $ 248,202 $ 197,061 $ 445,263 Net Income — — 9,479 9,479 Middlesex Water Company Investment Plan 4 221 — 221 Restricted Stock Award - Net - Employees 1 167 — 167 Conversion of $ 7 Preferred Stock to Common Stock 2 21 — 21 Cash Dividends on Common Stock ($ 0.3400 per share) — — ( 6,081 ) ( 6,081 ) Cash Dividends on Preferred Stock — — ( 22 ) ( 22 ) Balance at March 31, 2025 17,894 $ 248,611 $ 200,437 $ 449,048 Net Income — — 10,778 10,778 Middlesex Water Company Investment Plan 4 229 — 229 Restricted Stock Award - Net - Employees 18 47 — 47 Restricted Stock Award - Board of Directors 6 366 — 366 Conversion of $ 7 Preferred Stock to Common Stock 30 262 — 262 At-The-Market Program Common Stock Issuance 64 3,604 — 3,604 Common Stock Issuance Expense — ( 431 ) — ( 431 ) Cash Dividends on Common Stock ($ 0.3400 per share) — — ( 6,101 ) ( 6,101 ) Cash Dividends on Preferred Stock — — ( 19 ) ( 19 ) Balance at June 30, 2025 18,016 $ 252,688 $ 205,095 $ 457,783 Net Income — — 13,958 13,958 Middlesex Water Company Investment Plan 4 235 — 235 Restricted Stock Award - Net - Employees — 161 — 161 At-The-Market Program Common Stock Issuance 317 16,992 — 16,992 Common Stock Issuance Expense — ( 440 ) — ( 440 ) Cash Dividends on Common Stock ($ 0.3400 per share) — — ( 6,125 ) ( 6,125 ) Cash Dividends on Preferred Stock — — ( 18 ) ( 18 ) Balance at September 30, 2025 18,337 $ 269,636 $ 212,910 $ 482,546 See Accompanying Notes to Condensed Consolidated Financial Statements. 5 Table of Contents MIDDLESEX WATER COMPANY NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1 – Basis of Presentation and Recent Developments Middlesex Water Company (Middlesex or the Company) is the parent company and sole shareholder of Tidewater Utilities, Inc. (Tidewater), Pinelands Water Company (Pinelands Water) and Pinelands Wastewater Company (Pinelands Wastewater) (collectively, Pinelands), Utility Service Affiliates, Inc. (USA), and Utility Service Affiliates (Perth Amboy) Inc. (USA-PA). Southern Shores Water Company, LLC (Southern Shores) and White Marsh Environmental Systems, Inc. (White Marsh) are wholly-owned subsidiaries of Tidewater. The financial statements for Middlesex and its wholly-owned subsidiaries are reported on a consolidated basis. All significant intercompany accounts and transactions have been eliminated. The consolidated notes within the 2024 Annual Report on Form 10-K (the 2024 Form 10-K) are applicable to these financial statements and, in the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary (including normal recurring accruals) to fairly state the Company’s financial position as of September 30, 2025, the results of operations for the three and nine month periods ended September 30, 2025 and 2024 and cash flows for the nine month periods ended September 30, 2025 and 2024. Information included in the Condensed Consolidated Balance Sheet as of December 31, 2024, has been derived from the Company’s December 31, 2024 audited financial statements included in the 2024 Form 10-K. Recent Developments Perfluoroalkyl Substances (PFAS) Multi-District Litigation Settlement - Several of the Company’s utility subsidiaries are parties to a multi-district litigation (MDL) lawsuit against manufacturers of certain PFAS for damages, contribution and reimbursement of costs incurred and continuing to be incurred to address the presence of such PFAS in public water supply systems owned and operated by these utility subsidiaries and throughout their service areas. Settlements with several defendants in the MDL have received final approval by the MDL court. The Company timely submitted to the MDL court its Phase One claim forms under settlement agreements with defendants 3M Company, DuPont de Nemours, Inc., Tyco Fire Products LP and BASF Corporation. In the third quarter of 2025, the Company received an initial settlement payment from defendant 3M Company of $ 0.4 million, net of legal fees and administrative costs. This was recorded as a regulatory liability as the Company intends to seek regulatory approval from its respective public utility commissions to apply the net proceeds for the benefit of customers. In October 2025, the Company received $ 0.7 million in additional settlement payments. The Company anticipates receiving additional settlement payments during the remainder of 2025 from the defendants named above. Tidewater Acquisition of the Water Utility Assets of the Town of Ocean View, Delaware - In April 2025, Tidewater completed the acquisition of the water utility assets of the Town of Ocean View, Delaware (Ocean View) for approximately $ 4.6 million. Ocean View serves approximately 900 customers in Sussex County, Delaware, who have been receiving water supply from Tidewater since the system was constructed in 2008. The pro forma effect of this acquisition is not material to the Company’s consolidated results of operations. United States Environmental Protection Agency (USEPA) Issues Final PFAS Regulations - In April 2024, the USEPA finalized drinking water regulations for PFAS, establishing maximum contaminant levels (MCLs) for three PFAS compounds (Regulated PFAS) that are lower than the current New Jersey Department of Environmental Protection MCLs adhered to by the Company. Under the new USEPA regulations effective April 2024, water systems must monitor for Regulated PFAS and have three years to complete initial monitoring (by April 2027), followed by ongoing compliance monitoring. Water systems must also provide the public with information on the levels of Regulated PFAS in their drinking water beginning in 2027. Water systems have five years (by April 2029) to implement solutions that reduce Regulated PFAS if monitoring shows that drinking water levels exceed these MCLs. The USEPA has announced its plans to issue a proposed rule in Fall 2025 extending the compliance date to 2031. Beginning in April 2029 and absent an extension by the USEPA, water systems that have Regulated PFAS in drinking water which exceeds one or more of these MCLs must take action to reduce levels of these PFAS compounds in their drinking water and must provide notification to the public of the violation. In anticipation of these new USEPA standards, in 2023, the Company began implementing its strategy to meet these lower MCLs for Regulated PFAS and is finalizing preliminary engineering studies and has began preliminary design of for PFAS treatment at the Company's largest water treatment facility in New Jersey to ensure that effective PFAS treatment approaches are implemented. Recent Accounting Guidance The recently issued accounting standards that have not yet been adopted by the Company as of September 30, 2025 are as follows: 6 Table of Contents Standard Description Date of Adoption Application Effect on the Condensed Consolidated Financial Statements Accounting Standards Update (“ASU”) ASU 2024-03 “Disaggregation of Income Statement Expenses” The ASU enhances disclosures related to income statement expenses to further disaggregate expenses in the footnotes to the financial statements. The standard requires disaggregation of any relevant expense caption presented on the face of the income statement that contains the following expense categories: purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion. Further, the standard requires disclosure of the total amount and the entity’s definition of selling expenses. The ASU is effective for the Company beginning with its annual financial statements for the year ending December 31, 2027. Early adoption is permitted. Prospective, with retrospective application also permitted. The Company is currently evaluating the requirements of ASU 2024-03. ASU 2023-09 “Improvements to Income Tax Disclosures” The ASU amends certain income tax disclosure requirements, including adding requirements to present the reconciliation of income tax expense computed at the statutory rate to actual income tax expense using both percentages and amounts and providing a disaggregation of income taxes paid. Further, certain disclosures are eliminated, including the current requirement to disclose information on changes in unrecognized tax benefits in the next 12 months. The ASU is effective for the Company beginning with its annual financial statements for the year ending December 31, 2025. Early adoption is permitted. Prospective, with retrospective application also permitted. The Company is currently evaluating the requirements of ASU 2023-09, but does not expect adoption of this ASU to have a material impact on its financial statements. ASU 2025-06 "Internal-Use Software" This ASU removes all reference to prescriptive and sequential software development stages, requiring an entity to start capitalizing software costs when the following criteria are both met: (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. Further, the standard requires disclosure for all capitalized internal-use software costs and removes the requirement for intangibles disclosures for capitalized internal-use software. The ASU is effective for the Company beginning with its annual financial statements for the year ending December 31, 2025. Early adoption is permitted. Prospective, with a modified transition or retrospective application also permitted. The Company is evaluating the impact of ASU 2025-06 on its Consolidated Financial Statements and the timing of adoption. 7 Table of Contents Note 2 – Rate and Regulatory Matters Middlesex – In May 2025, Middlesex and its Pinelands wholly owned subsidiaries filed a joint petition with the New Jersey Board of Public Utilities (NJBPU) seeking permission for consolidation between the three entities by a corporate reorganization intended to combine the joint petitioning entities into Middlesex. The combination is expected to provide efficiency and benefits to our customers in various areas. In June 2025, Middlesex and Pinelands filed a joint petition with the NJBPU to request an increase in annual base revenues by approximately $ 24.9 million or 19.3 %. The request will allow Middlesex and Pinelands recovery of prudently-incurred investments made to meet water and wastewater quality and environmental regulations and to continue to provide safe and reliable water and wastewater service to its customers. Under New Jersey statute, the NJPBU must render a decision within nine months of filing a base rate change petition. If a decision is not rendered within nine months, Middlesex can implement interim rates up to the full amount of the requested increase. In July 2025, Middlesex and Pinelands submitted a joint petition with the NJBPU seeking approval of a Resiliency and Environmental System Improvement Charge (RESIC) Foundational Filing for the recovery of certain costs of investments for the three-year period ending October 2028 related to compliance with requirements to address existing and emerging chemical elements or compound, installation of new plant or equipment or replacement of existing plant or equipment to further maintain, enhance, or improve resiliency, health, safety or environmental protection for Middlesex and Pinelands’ customers, employees or the public and addressing treatment media and related equipment for both existing and emerging chemical elements and compounds. Under the RESIC program, Middlesex and Pinelands submit semi-annual surcharge filings to the NJBPU for qualifying capital investments completed every six-months to be recovered up to $ 3.8 million or 2.5 % of total annual revenues included in their June 2025 base rate increase request. In July 2025, Middlesex and Pinelands Water filed a joint petition with the NJBPU seeking approval of a Distribution System Improvement Charge (DSIC) Foundational Filing to recover investments in qualifying capital improvements to their water distribution system for the three-year period ending October 2028. Under the DSIC program, Middlesex and Pinelands Water submit semi-annual surcharge filings to the NJBPU for qualifying capital investments completed every six-months to be recovered up to $ 7.6 million or 5 % of total annual revenues included in their June 2025 base rate increase request. In May 2025, the NJBPU approved a Middlesex DSIC rate, effective June 1, 2025, that is expected to result in $ 1.1 million of annual revenues starting June 2025. In October 2025, Middlesex filed a fourth DSIC rate application that is expected to result in $ 0.9 million of annual revenues, which is in addition to the existing $ 2.3 million of annual revenues from previous DSIC filings. In February 2025, the NJBPU approved Middlesex’s petition to reset its Purchased Water Adjustment Clause (PWAC) tariff rate to recover additional annual costs of $ 0.5 million, primarily for the purchase of treated water from a non-affiliated water utility regulated by the NJBPU. A PWAC is a rate mechanism that allows for the recovery of increased purchased water costs between base rate case filings. The PWAC is reset to zero once those increased costs are included in base rates. The new PWAC rate became effective March 1, 2025. The NJBPU-approved Middlesex Lead Service Line Replacement (LSLR) Plan continues and costs of $ 0.6 million for replacing customer-owned lead service lines, which were incurred between July 2024 through December 2024, were recovered through August 2025. Costs of $ 0.3 million incurred between January 2025 through June 2025 are expected to be recovered between September 2025 and February 2026. The LSLR surcharge is required to be reset every six months over the life of the LSLR Plan. Cost recovery for replacing Company-owned lead service lines are recoverable through traditional rate making in connection with general rate case filings. Tidewater – In October 2025, Tidewater filed an application with the Delaware Public Service Commission (DEPSC) for approval of the purchase of Pinewood Acres' water utility assets for $ 0.2 million. Pinewood Acres serves approximately 350 customers in Kent County, Delaware. In July 2025, the DEPSC approved the settlement agreement in our general base rate application between Tidewater, DEPSC Staff and the Delaware Division of the Public Advocate, with new rates effective July 3, 2025. The DEPSC order approved an increase in our annual operating revenues by $ 5.5 million based on an authorized return on common equity of 9.5 % and a common equity ratio of 53.50 %. In addition, Tidewater will refund approximately $ 1.1 million of excess 8 Table of Contents deferred income taxes associated with the Tax Cuts and Jobs Act of 2017 between July 2025 and December 2025, including $ 0.4 million of interest. In September 2024, the DEPSC approved Tidewater’s petition to recover up to $ 2.1 million of costs associated with Tidewater’s obligation to identify and inventory lead service lines throughout Tidewater’s service area, as required by federal law and Delaware regulations. Recovery of these costs began February 1, 2025 and is expected to continue through January 2028. Through September 30, 2025, Tidewater has spent $ 1.8 million to identify and inventory lead service lines. Southern Shores – Southern Shores provides water service to a 2,200 unit condominium community in Sussex County, Delaware under a DEPSC-approved agreement expiring December 31, 2029. Under the agreement, rates are increased annually by the lesser of the regional Consumer Price Index or 3 %. Additionally, when there are unanticipated capital expenditures or regulatory related changes in operating expenses exceed certain annual thresholds, rates are increased. In 2024, capital expenditures did exceed the established threshold. Effective January 1, 2025, Southern Shores rates were increased $ 0.1 million or 6.51 %. In 2025, Southern Shores capital expenditures exceeded the established threshold. Effective January 1, 2026, Southern Shores rates will be increased $ 0.1 million or 4.89 %. Note 3 – Capitalization Common Stock – During the nine months ended September 30, 2025 and 2024, there were 12,522 common shares (approximately $ 0.7 million) and 13,498 common shares (approximately $ 0.7 million) respectively, issued under the Middlesex Water Company Investment Plan. In April 2023, the NJBPU authorized Middlesex to issue and sell up to 1.0 million shares of its common stock, without par value, through December 31, 2025, through one or more traditional underwriting offerings and/or ATM offerings. In September 2025, the NJBPU authorized Middlesex to issue and sell up to 2.5 million shares of its common stock, without par value, during the period January 2026 through December 2028, through one or more traditional underwriting offerings and/or ATM offerings. On May 12, 2025, Middlesex entered into an At-the-Market (ATM) Equity Offering Sales Agreement (Equity Sales Agreement) with BofA Securities, Inc., Robert W. Baird & Co. Incorporated, and Janney Montgomery Scott LLC, pursuant to which Middlesex may offer and sell shares of its common stock, no par value per share, from time to time in “at-the-market” offerings, having an aggregate gross sales price of up to $ 110.0 million. The Company intends to use the net proceeds from these sales, after deducting commissions and offering expenses, to fund our capital expenditures, to purchase and maintain plant equipment, as well as for other general corporate purposes. For the three and nine months ended September 30, 2025, Middlesex issued and sold a total of 316,786 and 380,741 shares of common stock, respectively, at a weighted average price of $ 53.47 and $ 54.10 per share, respectively, and received $ 16.7 million and $ 20.3 million in net proceeds, respectively, under the Equity Sales Agreement. As of September 30, 2025, the Company has $ 89.4 million of aggregate gross sales remaining under the Equity Sales Agreement. Long-term Debt – Subject to regulatory approval, the Company periodically issues long-term debt to fund its investments in utility plant. To the extent possible and fiscally prudent, the Company finances qualifying capital projects under State Revolving Fund (SRF) loan programs in New Jersey and Delaware. These government programs provide financing at interest rates typically below rates available in the broader financial markets. A portion of the borrowings under the New Jersey SRF is interest-free. Middlesex is currently authorized by the BPU to borrow up to $ 300.0 million through December 31, 2025, in one or more negotiated transactions in the form of notes and/or first mortgage bonds through loans from the New Jersey SRF Program, the New Jersey Economic Development Authority (NJEDA), private placement and other financial institutions, as needed. In September 2025, the NJBPU authorized Middlesex to borrow up to $ 260.0 million during the period January 2026 through December 2028, in one or more negotiated transactions in the form of notes and/or first mortgage bonds through loans from the New Jersey SRF Program, the NJEDA, private placement and other financial institutions as needed. In October 2025, Middlesex closed on a $ 30.0 million, 5.99 % private placement of First Mortgage Bonds (FMBs) due 2055, designated as Series 2025A. The net proceeds from the sale were used to repay short-term borrowings under the Company’s bank lines of credit and for other general corporate purposes. In September 2024, Tidewater closed on a $ 2.2 million Delaware SRF loan with a 0.0 % interest rate with maturity dates in 2044. This loan is for costs associated with Tidewater’s obligation, as required by federal law and Delaware regulations, to 9 Table of Contents identify and inventory lead service lines throughout Tidewater’s service area. Tidewater has drawn down $ 1.7 million as of September 30, 2025 and expects that the requisitions will continue through the fourth quarter of 2025. In May 2024, Tidewater closed on four Delaware SRF loans totaling $ 5.6 million, all at interest rates of 2.0 % with maturity dates in 2044. These loans are for the construction, relocation, improvement, and/or interconnection of transmission mains and construction of a water treatment facility. Tidewater has drawn down $ 0.9 million on these loans as of September 30, 2025. Each project has its own construction timetable with the last spending set to occur in 2027. Separately, Tidewater has two active construction projects funded by prior year Delaware SRF loans totaling $ 8.3 million with remaining availability of funds for borrowing. These loans are for the construction of a one million gallon elevated storage tank and construction, relocation, improvement, and interconnection of transmission mains. Tidewater has drawn a total of $ 7.2 million through September 30, 2025 and expects that the requisitions will continue through the fourth quarter of 2025. 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 condensed 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 FMBs and SRF Bonds (collectively, the Bonds) issued by Middlesex 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 FMBs in the table below are classified as Level 2 measurements. The carrying amount and fair value of the FMBs were as follows: (Thousands of Dollars) September 30, 2025 December 31, 2024 Carrying Amount Fair Value Carrying Amount Fair Value FMBs $ 126,172 $ 125,545 $ 129,602 $ 125,067 It was not practicable to estimate the fair value on our outstanding long-term debt for which there is no quoted market price and there is not an active trading market. For details, including carrying value, interest rates and due dates on these series of long-term debt, please refer to those series noted as “Amortizing Secured Notes” and “State Revolving Trust Notes” on the Condensed Consolidated Statements of Capital Stock and Long-Term Debt. The carrying amount of these instruments was $ 230.5 million and $ 229.8 million at September 30, 2025 and December 31, 2024, respectively. Advances for construction have carrying amounts of $ 24.1 million and $ 22.6 million at September 30, 2025 and December 31, 2024, 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. 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. 10 Table of Contents Note 4 – Earnings Per Share Basic earnings per share (EPS) are computed on the basis of the weighted average number of shares outstanding during the period presented. Diluted EPS assumes the conversion of the Convertible Preferred Stock $ 7.00 Series. (In Thousands Except per Share Amounts) Three Months Ended September 30, 2025 2024 Basic: Income Shares Income Shares Net Income $ 13,958 18,123 $ 14,319 17,838 Preferred Dividend ( 18 ) ( 29 ) Earnings Applicable to Common Stock $ 13,940 18,123 $ 14,290 17,838 Basic EPS $ 0.77 $ 0.80 Diluted: Earnings Applicable to Common Stock $ 13,940 18,123 $ 14,290 17,838 $ 7.00 Series Preferred Dividend 5 31 17 114 Adjusted Earnings Applicable to Common Stock $ 13,945 18,154 $ 14,307 17,952 Diluted EPS $ 0.77 $ 0.80 (In Thousands Except per Share Amounts) Nine Months Ended September 30, 2025 2024 Basic: Income Shares Income Shares Net Income $ 34,217 17,992 $ 35,547 17,828 Preferred Dividend ( 59 ) ( 89 ) Earnings Applicable to Common Stock $ 34,158 17,992 $ 35,458 17,828 Basic EPS $ 1.90 $ 1.99 Diluted: Earnings Applicable to Common Stock $ 34,158 17,992 $ 35,458 17,828 $ 7.00 Series Preferred Dividend 19 31 50 115 Adjusted Earnings Applicable to Common Stock $ 34,177 18,023 $ 35,508 17,943 Diluted EPS $ 1.90 $ 1.98 Note 5 – Business Segment Data The Company’s Chief Operating Decision Maker (CODM) consists of the Company’s Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer. The CODM evaluates segment performance and profitability using net income. This metric provides a clear, consistent basis for analyzing the financial results of each segment and supports decision-making regarding the allocation of resources. Resource allocation to the Company’s regulated and non-regulated segments begins with the annual budgeting process, which establishes initial funding and resource levels for each segment. The budget incorporates key financial and operational inputs, including anticipated revenues, expenses, capital and financing requirements, aligning with the Company’s strategic objectives and regulatory obligations. The CODM reviews budget-to-actual variances on a monthly, quarterly and year to-date basis and makes interim decisions to reallocate resources among segments as needed, ensuring a 11 Table of Contents timely and effective response to changing conditions. For the regulated segment, the CODM uses this assessment to determine whether the segment is achieving its regulatory authorized rate of return. The segments follow the same accounting policies as described in Note 1 – Organization, Summary of Significant Accounting Policies and Recent Developments of the 2024 Form 10-K. Segment profit or loss is based on Net Income. Expenses used to determine operating income before taxes are charged directly to each segment or are allocated based on the applicable cost allocation factors. Assets allocated to each segment are based upon specific identification of such assets provided by Company records. The effects of all intra-segment and/or intercompany transactions are eliminated in the consolidated financial statements. The Company has identified two reportable segments. One is the regulated business of collecting, treating and distributing water on a retail and wholesale basis to residential, commercial, industrial and fire protection customers in parts of New Jersey and Delaware and includes Middlesex, Tidewater, Pinelands Water and Southern Shores. This segment also includes a regulated wastewater system in New Jersey, Pinelands Wastewater. The Company is subject to regulations as to its rates, services and other matters by the states of New Jersey and Delaware with respect to utility service within these states. The other segment is primarily comprised of non-regulated contract services for the operation and maintenance of municipal and private water and wastewater systems in New Jersey and Delaware and includes USA, USA-PA, and White Marsh. 12 Table of Contents (In Thousands) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Operation by Segments Revenues: Regulated $ 51,209 $ 52,252 $ 138,973 $ 135,682 Non – Regulated 3,305 3,325 9,509 9,940 Inter-segment Elimination ( 423 ) ( 477 ) ( 767 ) ( 852 ) Consolidated Revenues $ 54,091 $ 55,100 $ 147,715 $ 144,770 Operating Expenses Purchased Water: Regulated $ 2,353 $ 1,767 $ 6,339 $ 5,521 Non – Regulated — — — — Inter-segment Elimination ( 303 ) ( 360 ) ( 406 ) ( 502 ) Consolidated Purchased Water $ 2,050 $ 1,407 $ 5,933 $ 5,019 Other Operations and Maintenance Expenses: Regulated $ 19,624 $ 21,802 $ 56,269 $ 56,446 Non – Regulated 2,184 2,267 6,072 6,534 Inter-segment Elimination ( 120 ) ( 117 ) ( 361 ) ( 350 ) Consolidated Other Operations and Maintenance Expenses $ 21,688 $ 23,952 $ 61,980 $ 62,630 Other Taxes: Regulated $ 5,656 $ 5,881 $ 16,283 $ 16,264 Non – Regulated 53 50 177 166 Consolidated Other Taxes $ 5,709 $ 5,931 $ 16,460 $ 16,430 Depreciation: Regulated $ 6,871 $ 6,245 $ 19,973 $ 17,812 Non – Regulated 70 64 198 198 Consolidated Depreciation $ 6,941 $ 6,309 $ 20,171 $ 18,010 Operating Income: Regulated $ 16,826 $ 16,673 $ 40,470 $ 39,989 Non – Regulated 877 828 2,701 2,692 Consolidated Operating Income $ 17,703 $ 17,501 $ 43,171 $ 42,681 Other Income: Regulated $ 2,002 $ 2,038 $ 5,924 $ 10,048 Non – Regulated 61 76 154 183 Inter-segment Elimination ( 177 ) ( 146 ) ( 496 ) ( 242 ) Consolidated Other Income, Net $ 1,886 $ 1,968 $ 5,582 $ 9,989 13 Table of Contents (In Thousands) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Operation by Segments (continued) Interest Charges: Regulated $ 4,377 $ 3,557 $ 11,031 $ 10,963 Non – Regulated — — — — Inter-segment Elimination ( 177 ) ( 146 ) ( 496 ) ( 242 ) Consolidated Interest Charges $ 4,200 $ 3,411 $ 10,535 $ 10,721 Income Taxes: Regulated $ 1,116 $ 1,457 $ 3,074 $ 5,497 Non – Regulated $ 315 282 $ 927 905 Consolidated Income Taxes $ 1,431 $ 1,739 $ 4,001 $ 6,402 Net Income: Regulated $ 13,335 $ 13,697 $ 32,289 $ 33,576 Non – Regulated $ 623 622 $ 1,928 1,971 Consolidated Net Income $ 13,958 $ 14,319 $ 34,217 $ 35,547 Capital Expenditures: Regulated $ 20,785 $ 20,743 $ 71,334 $ 49,444 Non – Regulated 222 — $ 308 36 Total Capital Expenditures $ 21,007 $ 20,743 $ 71,642 $ 49,480 (Thousands of Dollars) As of September 30, 2025 As of December 31, 2024 Assets: Regulated 1,351,268 $ 1,264,472 Non – Regulated 7,679 7,671 Inter-segment Elimination ( 16,988 ) ( 16,969 ) Consolidated Assets $ 1,341,959 $ 1,255,174 Note 6 – Short-term Borrowings The Company maintains lines of credit aggregating $ 148.0 million. (Millions) As of September 30, 2025 Line of Credit Outstanding Available Maximum Credit Type Expiration Date Bank of America $ 10.0 $ 50.0 $ 60.0 Uncommitted July 31, 2026 PNC Bank 28.2 $ 39.8 68.0 Committed January 31, 2027 CoBank, ACB 16.8 3.2 20.0 Committed May 20, 2028 $ 55.0 $ 93.0 $ 148.0 14 Table of Contents In July 2025, Tidewater increased the maximum borrowing amount under its line of credit with CoBank, ACB (CoBank) to $ 20.0 million and extended the expiration date to May 2028. In September 2025, the Company amended its line of credit with Bank of America and extended the expiration date to July 2026. The maturity dates for the Notes Payable as of September 30, 2025 are all three months or less and are extendable at the discretion of the Company. The interest rates are set for borrowings under the Bank of America and PNC Bank lines of credit using the Secured Overnight Financing Rate (SOFR) and then adding a specific financial institution credit spread. The interest rate for borrowings under the CoBank line of credit are set weekly using CoBank’s internal cost of funds index that is similar to the SOFR and adding a credit spread. There is no requirement for a compensating balance under any of the established lines of credit. The weighted average interest rate on the outstanding borrowings at September 30, 2025 under these credit lines is 5.33 %. The weighted average daily amounts of borrowings outstanding under these credit lines and the weighted average interest rates on those amounts were as follows: (In Thousands) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Average Daily Amounts Outstanding $ 61,664 $ 23,476 $ 46,205 $ 44,620 Weighted Average Interest Rates 5.46 % 6.41 % 5.44 % 6.42 % Note 7 – Commitments and Contingent Liabilities Water Supply – Middlesex has an agreement with the New Jersey Water Supply Authority (NJWSA) for the purchase of untreated water through November 30, 2048. This agreement with the NJWSA provides for an average purchase of 27 million gallons a day (mgd) with a peak up to 47.0 mgd. Pricing is set annually by the NJWSA through a public rate making process. The agreement has provisions for additional pricing in the event Middlesex overdrafts or exceeds certain monthly and annual thresholds. Middlesex also has an agreement with a non-affiliated NJBPU-regulated water utility for the purchase of treated water. This agreement, which expires February 27, 2031, provides for the minimum purchase of 3.0 mgd of treated water with provisions for additional purchases if needed. Tidewater contracts with the City of Dover in Delaware to purchase treated water of up to 75.0 million gallons annually. Purchased water costs are shown below: (In Thousands) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Treated $ 1,143 $ 796 $ 3,242 $ 2,697 Untreated 907 611 2,691 2,322 Total Costs $ 2,050 $ 1,407 $ 5,933 $ 5,019 Leases – The Company determines if an arrangement is a lease at inception. Generally, a lease agreement exists if the 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. 15 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 of September 30, 2025 December 31, 2024 ROU 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 2026 0.8 2027 0.9 2028 0.9 2029 0.9 Total Lease Payments $ 3.7 Imputed Interest 1.1 Present Value of Lease Payments 2.6 Less Current Portion* ( 0.6 ) Non-Current Lease Liability $ 2.0 * Included in Other Current Liabilities Construction – 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 capital expenditures is dependent on the need for replacement of existing infrastructure, customer growth, residential new home construction and sales, project scheduling, supply chain issues and continued refinement of project scope and costs. Contingencies – Based on our operations in the heavily-regulated water and wastewater industries, the Company is routinely involved in disputes, claims, lawsuits and other regulatory and legal matters, including responsibility for fines and penalties relative to regulatory compliance. At this time, Management does not believe the final resolution of any such matters, whether asserted or unasserted, will have a material adverse effect on the Company’s financial position, results of operations or cash flows. In addition, the Company maintains business insurance coverage that may mitigate the effect of any current or future loss contingencies. 16 Table of Contents Change in Control Agreements – The Company has Change in Control Agreements with its executive officers that provide compensation and benefits in the event of termination of employment under certain conditions in connection with a change in control of the Company. Note 8 – Employee Benefit Plans Pension Benefits – The Company’s Pension Plan covers all active employees hired prior to April 1, 2007. Employees hired after March 31, 2007 are not eligible to participate in this plan, but can participate in a defined contribution profit sharing plan that provides an annual contribution at the discretion of the Company, based upon a percentage of the participants’ annual paid compensation. For each of the three-month periods ended September 30, 2025 and 2024, the Company did not make cash contributions to the Pension Plan. For the nine-month periods ended September 30, 2025 and 2024, the Company made cash contributions of $ 0 and $ 2.0 million, respectively, to the Pension Plan. The Company expects to make cash contributions of approximately $ 0.9 million over the remainder of the current year. Other Benefits – The Company’s Other Benefits Plan covers substantially all of its current retired employees. Employees hired after March 31, 2007 are not eligible to participate in this plan. Coverage includes healthcare and life insurance. For each of the three- and nine-month periods ended September 30, 2025 and 2024, the Company did not make cash contributions to its Other Benefits Plan. The Company expects to make additional Other Benefits Plan cash contributions of $ 1.0 million over the remainder of the current year. The following tables set forth information relating to the Company’s periodic costs (benefit) for its employee retirement benefit plans: (In Thousands) Pension Benefits Other Benefits Three Months Ended September 30, 2025 2024 2025 2024 Service Cost $ 242 $ 318 $ 85 $ 80 Interest Cost 1,159 1,070 430 328 Expected Return on Assets ( 1,687 ) ( 1,580 ) ( 928 ) ( 846 ) Amortization of Unrecognized Losses (Gains) 12 38 ( 153 ) ( 275 ) Net Periodic Benefit* $ ( 274 ) $ ( 154 ) $ ( 566 ) $ ( 713 ) (In Thousands) Pension Benefits Other Benefits Nine Months Ended September 30, 2025 2024 2025 2024 Service Cost $ 725 $ 953 $ 255 $ 240 Interest Cost 3,476 3,210 1,289 985 Expected Return on Assets ( 5,061 ) ( 4,741 ) ( 2,784 ) ( 2,538 ) Amortization of Unrecognized Losses (Gains) 37 114 ( 460 ) ( 824 ) Net Periodic Benefit* $ ( 823 ) $ ( 464 ) $ ( 1,700 ) $ ( 2,137 ) * Service cost is included Operations and Maintenance expense on the consolidated statements of income; all other amounts are included in Other Income (Expense), net. Note 9 – Revenue Recognition from Contracts with Customers The Company’s revenues are primarily generated from regulated tariff-based water and wastewater utility services and non-regulated operation and maintenance contracts for services on water and wastewater systems owned by others. Revenue from contracts with customers is recognized when control of a promised good or service is transferred to customers at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. 17 Table of Contents The Company’s regulated revenue results from tariff-based water and wastewater services to residential, industrial, commercial, fire-protection and wholesale customers. Residential customers are billed quarterly while most industrial, commercial, fire-protection and wholesale customers are billed monthly. Payments by customers are due between 15 and 30 days after the invoice date. Revenue is recognized as the water and wastewater services are delivered to customers which includes an accrual of unbilled revenues estimated from the last meter reading date to the end of the accounting period utilizing factors such as historical customer data and regional weather indicators. Unearned Revenues and Advance Service Fees include fixed service charge billings in advance to Tidewater customers recognized as service is provided to the customer. Non-regulated service contract revenues consist of base service fees, as well as fees for additional billable services provided to customers. Fees are billed monthly and are due within 30 days after the invoice date. The Company considers the amounts billed to represent the value of these services provided to customers. These contracts expire at various times through June 2032 and contain remaining performance obligations for which the Company expects to recognize revenue in the future. These contracts also contain termination provisions. Substantially all of the amounts included in operating revenues and accounts receivable are from contracts with customers. The Company’s contracts do not contain any significant financing components. The Company’s operating revenues are comprised of the following: (In Thousands) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Regulated Tariff Sales Residential $ 29,149 $ 28,889 $ 78,511 $ 73,955 Commercial 9,120 9,693 23,169 24,252 Industrial 3,454 3,799 9,856 10,573 Fire Protection 3,729 3,641 11,449 10,589 Wholesale 5,423 5,839 15,484 15,720 Non-Regulated Contract Operations 3,184 3,208 9,148 9,588 Total Revenue from Contracts with Customers $ 54,059 $ 55,069 $ 147,617 $ 144,677 Other Regulated Revenues 334 391 504 595 Other Non-Regulated Revenues 121 117 361 350 Inter-segment Elimination ( 423 ) ( 477 ) ( 767 ) ( 852 ) Total Revenue $ 54,091 $ 55,100 $ 147,715 $ 144,770 Note 10 – Income Taxes The Company’s effective tax rate was 9.3 % and 10.5 % for the three and nine months ended September 30, 2025, respectively, compared to 10.8 % and 15.3 % for the same periods in 2024. We evaluate and update our annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. Income Taxes for the three months ended September 30, 2025 decreased by $ 0.3 million from the same period in 2024, primarily due to lower pre-tax income and higher income tax benefits associated with increased repair expenditures on tangible property in the Middlesex System. Income Taxes for the nine months ended September 30, 2025 decreased by $ 2.4 million from the same period in 2024, primarily due to lower pretax income and higher income tax benefits associated with increased repair expenditures on tangible property in the Middlesex System offset by the 2024 recovery of income taxes on the taxable portion of the proceeds from a litigation agreement. The statutory Federal tax rate is 21.0 % for the three and nine months ended September 30, 2025 and 2024. For states with a corporate net income tax, the state corporate net income tax rates range from 8.7 % to 9.0 % for all periods presented. Our effective tax rate differs from the federal statutory tax rate primarily due to the recognition of the income tax benefits for the immediate deduction of repair expenditures on tangible property in the Middlesex System as well as other permanent book-to-tax differences. 18 Table of Contents On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act, which includes several changes to U.S. federal income tax law, including the temporary and permanent extension, of expiring provisions of the Tax Cuts and Jobs Act of 2017. The Company does not expect this to have a material impact on the Company's 2025 financial statements. 19 Table of Contents