Agenda

Accounts Receivable — Billed, Net

Accounts receivable are recorded at the invoiced amounts. The allowance for doubtful
accounts is our best estimate of the amount of probable credit losses in our existing accounts
receivable, and is determined based on historical write-off experience and the aging of
account balances. We review the allowance for doubtful accounts quarterly. Account bal-
ances are written off against the allowance when it is probable the receivable will not be
recovered.

Accounts Receivable — Unbilled, Net

the entire balance in this account, which included $23.4 million of principal due on the bonds
being refunded, as well as approximately $375,000 of accrued interest due on these bonds,
was paid out to the holders of those debt instruments.

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

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, 2015 and 2014

(in thousands)
2015 2014

Financing Activities:

Borrowings (payments) on line of credit, net $ - $ (1,966)

Payments on long-term debt (42,484) (3,036)

Contributions in aid of construction 132 78

Proceeds from long-term borrowings 28,098 49,935

Debt issuance costs (232) (1,275)

PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2015 and 2014
(in thousands)

PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
For the Year Ended December 31, 2014
(in thousands, except per share data)

PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
For the Year Ended December 31, 2015
(in thousands, except per share data)

Accumulated
Additional Other
Common Stock Paid in Retained Comprehensive
Shares Amount Capital Earnings/(Deficit) Income (Loss) Total

PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Years Ended December 31, 2015 and 2014
(in thousands)

2015 2014

Net Loss $ (2,292) $ (1,775)
Other Comprehensive Income:

Unrealized loss on derivatives (109) (349)

Reclassification of net loss realized in net income 144 152

Income tax expense (benefit) relating to other

other comprehensive income (14) 79

Other Comprehensive Income (Loss) 21 (118)
Comprehensive Loss $ (2,271) $ (1,893)

PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31, 2015 and 2014