Board Of Aldermen

PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - CONTINUED
As of December 31, 2016 and 2015
(in thousands, except share data)

PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of December 31, 2016 and 2015
(in thousands, except share data)

2016 2015
ASSETS

Property, Plant and Equipment, net $ 201,698 $ 183,241

We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Pennichuck Corporation and Subsidiaries as of
December 31, 2016 and 2015, and the results of their operations and their cash flows for the
years then ended in accordance with accounting principles generally accepted in the United
States of America.

Molensonr Haath

MELANSON| gaa

ACCOUNTANTS * AUDITORS

years

121 River Front Drive
Manchester, NH 03102
(603)669-6130

melansonheath.com

Additional Offices:

Nashua, NH
Andover, MA
Greenfield, MA

Board of Directors and Stockholder Ellsworth, ME
Pennichuck Corporation and Subsidiaries

INDEPENDENT AUDITORS' REPORT

Contents

Independent Auditors’ Report

Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Statement of Changes in Stockholder’s Equity Current Year

Consolidated Statement of Changes in Stockholder’s Equity Prior Year

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

11

Pennichuck Corporation and Subsidiaries
Audited Consolidated Financial Statements

December 31, 2016 and 2015

-10-

case of the service lines) going forward. Additionally, the Company has been asked by NHDES
to contract for similar design services with SGPP for expansion of its public water system in
southern Bedford as weii as an additional 38 residences in Litchfield, due to this contamination
Site.

-9-

On June 16, 2016, Pennichuck East Utility, Inc. completed a financing transaction with CoBank,
ACB in the amount of $2,200,000 for a term of 25 years at an interest rate of 4.2% to be used for
non-SRF funded capitai improvement projects being completed in 2016, and early 2017. Of this
amount, $1.25 million was drawn down at closing, while the remaining $950,000 was drawn
down in the fourth quarter of 2016.

Other Events

Operations Facility

-8-

Notes to Balance Sheet

Note 1 (Other Current Assets) ~ At December 31, 2016, approximately $1.2 million of this
balance is comprised of prepaid property taxes, which will be expensed in the first quarter of
2017, relating to taxes paid in November and December of 2016 for the second half of the
property tax year ended March 31, 2017.

Note 2 — In accordance with GAAP, the Acquisition Premium is being written-off over the
30-year life of the principal of the City Acquisition Debt.