Agenda

Transactions with Related Party — City of Nashua

14.

The following table presents reclassifications out of accumulated other comprehensive
income for the years ended December 31, 2020 and 2019:

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} 2020 2019
Gain on cash flow hedges:

Interest rate contracts s 42 s) 70 Interest expense

(17) (27) Tax expense

Amounts reclassified from accumulated

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

Short-term borrowing activity under Pennichuck Water’s FALOC for the years ended
December 31, 2020 and 2019 was:

{in thousands) 2020 2019
Established line as of December 31, S$ 12,000 § 10,000
Maximum amount outstanding during period 7,223 8,850
Average amount outstanding during period 3,610 4,131
Amount outstanding as of December 31, 4,550 5,848
Weighted average interest rate during period 2.80% 4.07%
Interest rate as of December 31, 1.90% 3.55%

12.

Paycheck Protection Program Loan

Rate Covenant Test - if during any fiscal year, the EBITDA of Pennichuck Water shall not
equal at feast 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.

The aggregate principal payment requirements subsequent to December 31, 2020 are as
follows:

(in thousands) Amount

2021 § 6,018
2022 6,272
2023 7,508
2024 6,721
2025 7,013
2026 and thereafter 211,351
Total S 244,883

2019

11.

Long-Term Debt

Long-term debt as of December 31, 2020 and 2019 consisted of the following:

The Company has accumulated New Hampshire net operating losses. The New Hampshire tax
benefit of the cumulative net operating loss is approximately $1.4 million which begins to
expire in 2023 and is included in deferred income taxes in the Consolidated Balance Sheet as
of December 31, 2020.

As of December 31, 2020 and 2019, it is estimated that approximately $476,000 and
$476,000, respectively, of cumulative federal alternative minimum tax credits may be carried
forward indefinitely as a credit against our regular tax liability.