All Bonds Test - Additionally, Pennichuck Water cannot create, issue, incur, assume or
guarantee any new funded debt, if the total outstanding funded debt (“Total Funded
Debt”) will exceed the sum of MARA {as defined in Note 14 of these consolidated financial
statements) and 85% of its Net Capital Properties (“MARA and Capital Properties”), and
unless net revenues or EBITDA (earnings before interest, taxes, depreciation and
amortization) shall equal or exceed for at least 12 consecutive months out of the 15
months preceding the issuance of the new funded debt by 1.1 times the maximum
amount for which Pennichuck Water will be obligated to pay in any future year (“Max
Amount Due”), as a result of the new funded debt being incurred. Thereby, the ratio of
Total Funded Debt to MARA and Capital Properties must be equal to or less than 1.0; as
of December 31, 2020 and 2019, this coverage ratio was 0.6 and 0.5, respectively. Also,
the ratio of EBITDA to the Max Amount Due must be equal to or greater than 1.1; as of
December 31, 2020 and 2079 this ratio was 2.6 and 1.5, respectively.
Rate Covenant Test - If during any fiscal year, the EBITDA of Pennichuck Water shall not
equal at least 1.1 times all amounts paid or required to be paid during that year
(“Amounts Paid”), then the Company shall undertake reasonable efforts to initiate a rate-
making proceeding with the NHPUC, to rectify this coverage requirement in the
succeeding fiscal years. Thereby, the ratio of EBITDA to Amounts Paid must be equal to
or greater than 1.1; as of December 31, 2020 and 2019, the Rate Covenant coverage ratio
was 3.57 and 1.98, respectively.
13. Accumulated Other Comprehensive Income
The following table presents changes in accumulated other comprehensive income by
component for the years ended December 31, 2020 and 2019:
Interest Rate Contract
(in thousands) 2020 2019
Beginning balance ) 318 «6S 372
Other comprehensive toss before reclassifications (89) (97)
Amounts reclassified from accumulated other
comprehensive income 25 43
Net current period other comprehensive income (64) (54)
Ending balance 5 254 $ 318
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