Board Of Aldermen

Inventory
Inventory is stated at the lower of cost, using the average cost method, or market.
Deferred Land Costs

Investments — Bond Project Funds

Maintenance, repairs and minor improvements are charged to expense as incurred. Improve-
ments which significantly increase the value of property, plant and equipment are capitalized.

Cash and Cash Equivalents

Cash and cash equivalents generally consist of cash, money market funds and other short-
term liquid investments with original maturities of three months or less.

Restricted Cash - RSF

PENNICHUCK CORPORATION AND SUBSIDIARIES
NGTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Description of Business and Summary of Significant Accounting Policies
Description of Business:

PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2016 and 2015
(in thousands)

2016 2015

Financing Activities:

Borrowings (payments) on line of credit, net $ - $ 7

Payments on long-term debt (4,227) (42,484)

Contributions in aid of construction 58 132

Proceeds from long-term borrowings 4,498 28,098

Debt issuance costs (59) (232)

PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2016 and 2015

(in thousands)

Operating Activities:
Net Loss

Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization
Amortization of original issue discount
Equity component of AFUDC
Amortization of deferred investment tax credits
Provision for deferred income tax
Undistributed loss in real estate partnership
Gain on disposition of property

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PENNICHUCK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the Years Ended December 31, 2016 and 2015

(in thousands)

Net Loss

Other Comprehensive Income (Loss):
Unrealized loss on derivatives
Reclassification of net income realized in net income
Income tax expense (benefit) relating to
other comprehensive income

Other Comprehensive Income

Comprehensive Loss

2016

$ (1,240)

(28)
123

(38)
57
$ (1,183)

2015
$ (2,292)

PENNICHUCK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

For the Years Ended December 31, 2016 and 2015

(in thousands)

Operating Revenues

Operating Expenses:
Operations and maintenance
Depreciation and amortization
Taxes other than income taxes

Total Operating Expenses
Operating Income

Interest Expense
Allowance for Funds Used During Construction
Other, Net

Loss Before (Provision for) Benefit from Income Taxes
(Provision for) Benefit from Income Taxes

Net Loss