Pennichuck Corporation — Quarterly Report (Quarter Ended September 30, 2020)
Operating Income has increased year-over-year as a result of the variation in revenue and
operating expense levels recognized for the quarter and year-to-date.
Interest Expense decreased in the third quarter by 3.6%, as compared to the third quarter of last
year; however, year-to-date versus last year has remained virtually unchanged as the results from
the September 2™ Pennichuck Water’s issuance of approximately $73.6 million of taxable bonds
will not be fully impactful until the 4" quarter of 2020. The taxable bond refinancing was
completed in order to: (1) advance refund and refinance Pennichuck Water’s series 2014A,
2015A, and 2015B bonds; (2) early retire an AULI bank loan set to mature on March 1, 2021;
(3) replenish the MOERR RSF account to its original imprest level; and (4) provide for
repayment of Pennichuck Corporation’s Working Capital Line of Credit (WCLOC) for monies
borrowed to maintain the Company’s RSF funds awaiting the completion of this refinancing and
the implementation of new water rates for Pennichuck Water Works, in conformity with the
Company’s key mission objectives.
The third quarter pre-tax income and year-to-date pre-tax income for 2020 versus pre-tax levels
for 2019 are due to the revenue and expense variations discussed above.
The year-to-date income tax benefit in the current year reflects the treatment for the Municipal
Acquisition Regulatory Asset as well as the inclusion of contributions-in-aid-of-construction
(“CIAC”), which are not deductible for tax purposes. Therefore, the tax benefit is -87.7% versus
the statutory rate benefit of 27.08% on a year-to-date basis.
Earnings before interest, taxes, depreciation and amortization (EBITDA) are higher than EBITDA
for the same periods last year due to increased revenues, which more than offset increased operating
expenses and relatively flat interest expense levels in comparison to 2019.
