Board Of Aldermen

Contract Combination

Contributions in Aid of Construction

Under construction contracts with real estate developers and others, the Company’s utility
subsidiaries may receive non-refundable advances for the cost of installing new water mains.
These advances are recorded as CIAC. The Company’s utility subsidiaries also record to plant
and CIAC the fair market value of developer installed mains and any excess of fair market
value over the cost of community water systems purchased from developers. CIAC are
amortized over the life of the related properties.

Accounts Receivable ~ Unbilled, Net

We read our customer meters on a monthly basis and record revenues based on meter
reading results. Information from the last meter reading date is used to estimate the value of
unbilled revenues through the end of the accounting period. Estimates of water utility
revenues for water delivered to customers but not yet billed are accrued at the end of each
accounting period. Actual results could differ from those estimates.

Restricted Cash — 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

Notes to the Consolidated Financial Statements

Description of Business and Summary of Significant Accounting Policies

Description of Business

PENNICHUCK CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows - Continued
For the Years Ended December 31, 2020 and 2019
(in thousands)

2020 2019

Cash Flows From Financing Activities:

Borrowings (payments) on lines of credit, net S (3,803) $ 2,657

Payments on long-term debt (65,649) (6,034)

Contributions in aid of construction 35 48

Proceeds from long-term borrowings 87,290 18,692

Debt issuance costs (11,922) (327)

PENNICHUCK CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows
For the Years Ended December 31, 2020 and 2019
(in thousands)

Balance as of
January 1, 2019

PENNICHUCK CORPORATION AND SUBSIDIARIES

Consolidated Statement of Changes in Stockholder's Equity

For the Year Ended December 31, 2019
(in thousands, except per share data)

Accumulated

Common dividends declared - -

Net loss

Other comprehensive income:

Unrealized gain on derivatives,

net of taxes of $(63)

Reclassification of net income
realized in net income, net of

taxes of $27

Balance as of
December 31, 2019

Balance as of
January 1, 2020

Common dividends declared
Net loss
Other comprehensive income:

Unrealized loss on derivatives,
net of taxes of $(60)

Reclassification of net income
realized in net loss, net of
taxes of $17

Balance as of
December 31, 2020

PENNICHUCK CORPORATION AND SUBSIDIARIES
Consolidated Statement of Changes in Stockholder's Equity

For the Year Ended December 31, 2020
(in thousands, except per share data)

Accumulated