Agenda

PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - CONTINUED
As of December 31, 2015 and 2014
{in thousands, except share data)

2015 2014

STOCKHOLDER'S EQUITY AND LIABILITIES

PENNICHUCK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of December 31, 2015 and 2014
(in thousands, except share data)

ASSETS
Property, Plant and Equipment, net

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, 2015 and 2014, 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.

Molenosn Haath

MELANSONI| sigan

ACCOUNTANTS » AUGITORS

\2) River Front Drive

Manchester, NH 03702
(603}669-6'30
melansonheath.com

i ffices:
INDEPENDENT AUDITORS’ REPORT onal Offices
Nashua, NH

Andover, MA
Greenfield, MA

Board of Directors and Stockholder Ellsworth, ME

Pennichuck Corporation and Subsidiaries

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

I]

Pennichuck Corporation and Subsidiaries
Audited Consolidated Financial Statements

December 31, 2015 and 2014

Company Goals - 2016

The Company’s main goals for 2016 are as follows:

Complete the construction of the new operations facility
Complete construction of the Merrimack River raw water main
Continued “roll-out” of the Company’s asset management system

Evaluate and upgrade the Company’s fixed asset tracking system in support
of the asset management system

Complete the reconstruction of the Harris Dam Spillway

Review and redevelopment of the Company’s IT and Safety and Security
Policies and Procedures

-8-

Water Infrastructure and Conservation Adjustment (WICA)

On April 30, 2015, the Public Utilities Commission issued Order No. 25,784 approving a WICA
surcharge of 1.81% for customers of Pennichuck Water Works, Inc. in the Nashua Core System.
The surcharge is effective for service rendered on and after June 1, 2015. The order was
effective May 20, 2015.

Financing

Notes to Balance Sheet

Note | (Other Current Assets) - At December 31, 2015, approximately $1,335,000 of this
balance is comprised of prepaid property taxes, which will be expensed in the first quarter of
2016, relating to taxes paid in November and December of 2015 for the second half of the
property tax year ended March 31, 2016.

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.

Balance Sheet ($000’s)
As of As of
December 31, 2015 December 31, 2014
(Audited) (Audited)
Assets:

Property, Plant & Equipment, Net $ 183,241 $ 173,287
Current Assets:

Cash 1,246 2,987

Restricted Cash 5,729 5,264

Investments — 2014 and 2015 Bond Project Funds 19,779 16,847

Investments — Bond Refund Escrow - 23,725

Accounts Receivable 4,502 4,631

Inventory 712 802

Other Current Assets “°*! 2.232 1,682
Total Current Assets 34,200 55,938
Other Assets: