The following table presents reclassifications out of accumulated other comprehensive
income for the years ended December 31, 2017 and 2016:
Amounts Reclassified Affected Line Item in
Details about Accumulated Other from Accumulated Other the Statement Where
Comprehensive Income Components Comprehensive Income Net Income is Presented
(in thousands) 2017 2016
Gain (loss) on cash flow hedges
Interest rate contracts $ 77 = § 123 Interest expense
(31) (49) Tax expense
Amounts reclassified from accumulated
other comprehensive income $ 46 $ 74 Net of tax
Note 11 — Transaction with the City of Nashua
On January 25, 2012, in full settlement of an ongoing Eminent Domain lawsuit filed by the
City of Nashua (“City”) and with the approval of the New Hampshire Public Utilities
Commission (“NHPUC”), the City acquired all of the outstanding shares of Pennichuck
Corporation (“Pennichuck”) and, thereby, indirect acquisition of its regulated subsidiaries.
The total amount of the acquisition was $150.6 million (“Acquisition Price”) of which
$138.4 million was for the purchase of the outstanding shares, $5.0 million for the
establishment of a Rate Stabilization Fund, $2.6 million for legal and due diligence costs,
$2.3 million for severance costs, $1.3 million for underwriting fees, and $1.0 million for
bond discount and issue costs. The entire purchase of $150.6 million was funded by General
Obligation Bonds (“Bonds”) issued by the City of Nashua. Pennichuck is not a party to the
Bonds and has not guaranteed nor is obligated in any manner for the repayment of the Bonds.
Pennichuck remains an independent corporation with an independent Board of Directors,
with the City of Nashua as its sole shareholder.
Pennichuck Water Works, Inc. (““PWW”), Pennichuck East Utility, Inc. (“PEU”), Pittsfield
Aqueduct Company, Inc. (“PAC”), Pennichuck Water Service Corporation, and The
Southwood Corporation will continue as subsidiaries of Pennichuck Corporation and PWW,
PEU and PAC will continue as regulated companies under the jurisdiction of the New
Hampshire Public Utilities Commission. The terms of the merger and the requisite account-
ing and rate-setting mechanisms were agreed to in the NHPUC Order 25,292 (“PUC Order”)
dated November 23, 2011.
Transactions with Related Party — City of Nashua
Pennichuck issued a promissory note to the City of Nashua in the amount of approximately
$120 million to be repaid over a thirty (30) year period with monthly payments of
approximately $707,000, including interest at 5.75%. Pennichuck recorded an additional
amount of approximately $30.6 million as contributed capital. The remaining outstanding
balance of the note payable to the City at December 31, 2017 and 2016 was approximately
$109 million and $111 million, respectively, as disclosed in Note 9 to these consolidated
financial statements. During 2017 and 2016, dividends of approximately $279,000 and
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