-4-
Consolidated operating expenses increased by $1.9 million from 2015 to 2016
mainly due to higher water treatment and production costs related to higher
consumption ievels, depreciation adjustments, property taxes, and pension and
labor related costs.
A decrease in interest expense from 2015 to 2016 of approximately $0.1 million is
primarily due to the overall reduction in principal amounts outstanding at year-
end, resulting from the amortization of the debt instruments relating to their
repayment over time.
Pre-tax loss for the fourth quarter remained at $2.2 million in 2016 versus 2015
due to a decrease in operating income which was offset by lower interest costs,
year-over-year.
The pre-tax loss for the year decreased from $2.0 million in 2015 to $1.1 million
in 2016 due to the higher revenues discussed previously, offset by increased
operating costs.
Dividends paid to the sole shareholder in both 2015 and 2016 were consistent
with, and were paid pursuant to, the CBFRR structure provided for in the New
Hampshire Public Utilities Commission’s Order approving the City’s ownership
of the Company.
Income Tax Expense in the current year reflects the tax accounting for the
amortization of the Municipal Acquisition Regulatory Asset, which is not
deductible for tax purposes. Therefore, the year-to-date results reflect a tax
provision of approximately -12.1% of pre-tax income compared to the statutory
tax rate expense of 39.6%,
Earnings Before Interest, Taxes, Depreciation and Amortization decreased in the
fourth quarter from $2.7 million in 2015 to $2.3 million in 2016 due to lower
revenues, and enhanced by operating expense variations (excluding depreciation
and interest).
Earnings Before Interest, Taxes, Depreciation and Amortization for 2016
increased over 2015 by approximately $0.9 million, again due to higher revenues
earned year-over-year, offset by operating expense increases, excluding
depreciation and interest expenses.
