MIDDLESEX WATER CO Revenue Disclosure
(l) Revenues - The Company’s revenues are primarily generated from regulated tariff-based sales of water and wastewater 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.
The Company’s regulated revenue results from tariff-based sales from the provision of 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 to 30 days after the invoice date. Revenue is recognized as the water and wastewater services are delivered to customers as well as from 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, regional weather indicators and general economic conditions in the relevant service territories. 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 2032 and contain remaining performance obligations for which the Company expects to recognize revenue in the future. These contracts also contain customary termination provisions.
Substantially all of the amounts included in operating revenues and accounts receivable are from contracts with customers. The Company records its allowance for doubtful accounts based on historical write-offs combined with an evaluation of current economic conditions within its service territories.
The Company’s contracts do not contain any significant financing components.
The Company’s operating revenues are comprised of the following:
| (In Thousands) | ||||||||||||
| Years Ended December 31, | ||||||||||||
| 2023 | 2022 | 2021 | ||||||||||
| Regulated Tariff Sales | ||||||||||||
| Residential | $ | 86,581 | $ | 84,950 | $ | 77,699 | ||||||
| Commercial | 23,945 | 22,689 | 16,715 | |||||||||
| Industrial | 11,586 | 11,152 | 8,990 | |||||||||
| Fire Protection | 12,582 | 12,726 | 12,608 | |||||||||
| Wholesale | 19,117 | 18,769 | 14,590 | |||||||||
| Non-Regulated Contract Operations | 12,320 | 12,006 | 12,391 | |||||||||
| Total Revenue from Contracts with Customers | $ | 166,131 | $ | 162,292 | $ | 142,993 | ||||||
| Other Regulated Revenues | 806 | 831 | 929 | |||||||||
| Other Non-Regulated Revenues | 453 | 440 | 427 | |||||||||
| Inter-segment Elimination | (1,116 | ) | (1,129 | ) | (1,208 | ) | ||||||
| Total Revenue | $ | 166,274 | $ | 162,434 | $ | 143,141 | ||||||
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.