Pennichuck Corporation and Subsidiaries
Audited Consolidated Financial Statements
December 31, 2016 and 2015
Jim Donchess
Mayor e City of Nashua
To: Board of Aldermen
From: Jim Donchess
Date: 6/16/16
Re: Award of Nashua Transit System Fixed Route CNG Bus Procurement
Pursuant to NRO § 5-90 (E) which states that approval by the Finance Committee of a contract award in
excess of $1,000,000 shall be submitted to the full Board of Aldermen at its next regularly scheduled
meeting for final approval prior to award of the contract, please consider the following. The Finance
Committee approved the award of the below referenced contract at their June 15, 2016 meeting. | request
the Board of Aldermen’s concurrence and approval for this purchase.
Award of Nashua Transit System Fixed Route CNG Bus Procurement — Attached please find Purchasing
Manager’s Memo # 16-164 regarding this contract.
229 Main Street » PO Box 2019 * Nashua, New Hampshire 03061-2019
603.589.3260 * fax 603.594.3450 » NashuaMayor@NashuaNH.gov
www. NashuaNH.gov
Contents
Independent Auditors’ Report
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statement of Changes in Stockholder’s Equity Current Year
Consolidated Statement of Changes in Stockholder’s Equity Prior Year
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
11
MELANSON| gaa
ACCOUNTANTS * AUDITORS
years
121 River Front Drive
Manchester, NH 03102
(603)669-6130
melansonheath.com
Additional Offices:
Nashua, NH
Andover, MA
Greenfield, MA
Board of Directors and Stockholder Ellsworth, ME
Pennichuck Corporation and Subsidiaries
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying consolidated financial statements of Pennichuck Corporation
and Subsidiaries, which comprise the consolidated balance sheets as of December 31, 2016 and
2015, and the related consolidated statements of income (loss), comprehensive income (loss),
changes in stockholder’s equity, and cash flows for the years then ended, and the related
notes to the consolidated financial statements.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles generally accepted in the
United States of America; this includes the design, implementation, and maintenance of
internal control relevant to the preparation and fair presentation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based
on our audits. We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on the
auditors’ judgment, including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair
presentation of the consolidated financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion.
An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Pennichuck Corporation and Subsidiaries as of
December 31, 2016 and 2015, and the results of their operations and their cash flows for the
years then ended in accordance with accounting principles generally accepted in the United
States of America.
Molensonr Haath
March 22, 2017
PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of December 31, 2016 and 2015
(in thousands, except share data)
2016 2015
ASSETS
Property, Plant and Equipment, net $ 201,698 $ 183,241
Current Assets:
Cash and cash equivalents 2,446 1,246
Restricted cash - RSF 6,530 5,729
Restricted cash - Bond Project Funds 7,568 2,542
Investments - Bond Project Funds - 17,237
Accounts receivable - billed, net 4,137 2,184
Accounts receivable - unbilled, net 1,921 2,283
Accounts receivable - other 28 35
Inventory 666 712
Prepaid expenses 532 667
Prepaid property taxes 1,163 1,334
Deferred and refundable income taxes 352 231
Total Current Assets 25,343 34,200
Other Assets:
Deferred land costs 2,248 2,255
Deferred charges and other assets 10,058 9,066
Investment in real estate partnership 104 104
Acquisition premium, net 75,144 77,028
Total Other Assets 87,554 88,453
TOTAL ASSETS $ 314,595 $ 305,894
The accompanying notes are an integral part of these consolidated financial statements.
PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - CONTINUED
As of December 31, 2016 and 2015
(in thousands, except share data)
2016 2015
STOCKHOLDER'S EQUITY AND LIABILITIES
Stockholder's Equity:
Common stock; $0.01 par value; 1,000 shares
authorized, issued and outstanding $ - $ -
Additional paid in capital 30,561 30,561
Accumulated deficit (10,241) (8,721)
Accumulated other comprehensive income 258 201
Total Stockholder's Equity 20,578 22,041
Long-Term Debt, Less Current Portion
and Unamortized Debt Issuance Costs 200,758 201,283
Current Liabilities:
Current portion of long-term debt 5,162 4,120
Accounts payable 5,975 1,492
Deferred revenue 63 66
Accrued interest payable 1,704 1,318
Other accrued expenses 980 243
Accrued wages and payroll withholding 271 220
Customer deposits and other 805 151
Total Current Liabilities 14,960 7,610
Other Liabilities and Deferred Credits:
Deferred income taxes 20,869 20,642
Accrued pension liability 9,010 8,286
Unamortized debt premium 3,082 3,243
Deferred investment tax credits 537 570
Regulatory liability 760 781
Accrued post-retirement benefits 2,578 2,242
Customer advances 84 84
Contributions in aid of construction, net 40,364 37,929
Derivative instrument 453 548
Other long-term liabilities 562 635
Total Other Liabilities and Deferred Credits 78,299 74,960
TOTAL STOCKHOLDER'S EQUITY AND LIABILITIES $ 314,595 $ 305,894
The accompanying notes are an integral part of these consolidated financial statements.
PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
For the Years Ended December 31, 2016 and 2015
(in thousands)
Operating Revenues
Operating Expenses:
Operations and maintenance
Depreciation and amortization
Taxes other than income taxes
Total Operating Expenses
Operating Income
Interest Expense
Allowance for Funds Used During Construction
Other, Net
Loss Before (Provision for) Benefit from Income Taxes
(Provision for) Benefit from Income Taxes
Net Loss
2016
$ 42,697
20,820
6,942
6,159
33,921
8,776
(10,784)
358
545
(1,105)
(135)
$ (1,240)
2015
$ 40,840
19,511
6,610
5,928
32,049
8,791
(10,775)
70
(70)
(1,984)
(308)
$ (2,292)
The accompanying notes are an integral part of these consolidated financial statements.
PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the Years Ended December 31, 2016 and 2015
(in thousands)
Net Loss
Other Comprehensive Income (Loss):
Unrealized loss on derivatives
Reclassification of net income realized in net income
Income tax expense (benefit) relating to
other comprehensive income
Other Comprehensive Income
Comprehensive Loss
2016
$ (1,240)
(28)
123
(38)
57
$ (1,183)
2015
$ (2,292)
(109)
144
(14)
21
$ (2,271)
The accompanying notes are an integral part of these consolidated financial statements.
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