Investor Info 2000

August 15, 2000

Dear Shareholder:

The cool, damp weather which we experienced in the northeast during April and June this year was in stark contrast to the near drought conditions experienced in the same months last year. Unfortunately, this change in weather conditions adversely affected our water utilities’ earnings for the first six months of this year. For the six months ended June 30, 2000, our consolidated net income was $1,056,000 or $0.60 per share, compared to $1,233,000 or $0.71 for the same period in 1999. Net income for the second quarter of 2000 was $596,000 or $0.34 per share compared to $777,000 or $0.45 per share in 1999.

For the six months ended June 30, 2000, consolidated revenues were $8,588,000 compared to $8,602,000 last year. For the second quarter of 2000, consolidated revenues were $4,453,000 versus $4,710,000 reported for 1999. Revenues from our regulated water utilities were $7,581,000 compared to $7,847,000 in 1999. That decrease resulted from a 23% reduction in pumpage during the months of May and June 2000 from May and June 1999. It’s interesting to note that, as a result of last year’s hot and dry conditions, Pennichuck achieved a record level of sustained, average daily pumpage which did not materialize again this year.

Revenues from real estate and other activities for the six month period this year increased to $1,007,000 versus $755,000 last year. Thus far in 2000, real estate revenues include (i) approximately $521,000 from the sale of homes in our “Heron Cove” and “Ayer’s Crossing” residential subdivisions, (ii) the sale of a one-half interest in a 6.3 acre land parcel and (iii) option fees generated from Southwood Corporate Park. Revenues from other operating activities during the six months ended June 30, 2000 include $282,000 for contract operations performed by our Service Corporation and $64,000 for miscellaneous lease and rental income.

On June 9, 2000, the Company's Board of Directors declared a dividend of $0.24 per share payable on August 15, 2000. Your dividend check is enclosed with this report unless you participate in the dividend reinvestment plan, in which case, you will receive a statement of your account from our transfer agent within the next few days.

Thank you for your continuing support.

Sincerely,

Maurice L. Arel

President and Chief Executive Officer

Condensed Consolidated Statements of Income

Pennichuck Corporation and Subsidiaries

(In thousands, except per share amounts)

Three Months Ended Six Months Ended

June 30 June 30

2000 1999 2000 1999

Revenues:

Water utility operations $3,941 $4,284 $7,581 $7,847

Real estate operations and other 512 426 1,007 755

4,453 4,710 8,588 8,602

Expenses:

Water utility operations 2,852 2,832 5,572 5,384

Real estate operations and other 218 156 436 319

3,070 2,988 6,008 5,703

Operating Income 1,383 1,722 2,580 2,899

Other income 50 45 90 89

Interest expense (500) (510) (1,000) (1,013)

Pretax Income 933 1,257 1,670 1,975

Provision for income taxes 347 483 630 760

Net income before minority interest 586 774 1,040 1,215

Minority interest in (loss) Westwood Park (10) (3) (16) (18)

Net Income $596 $ 777 $1,056 $1,233

Basic Earnings Per Share $ .34 $ .45 $ .60 $ .71

Dividends Per Share $ .24 $ .23 $ 48 $ .45

Condensed Consolidated Balance Sheets

(In thousands)

June 30 December 31

2000 1999

Assets

Plant in service $85,541 $83,071

Accumulated depreciation (21,192) (20,066)

64,349 63,005

Current assets 4,806 5,998

Land development costs 3,801 3,753

Other assets 3,117 2,825

Total Assets $76,073 $75,581

Stockholders’ Equity and Liabilities

Common stock $ 1,770 $ 1,761

Paid in capital 14,633 14,458

Retained earnings 10,577 10,361

Treasury stock (358) (323)

26,622 26,257

Minority interest 279 295

Long-term debt 27,154 27,223

Current liabilities 2,379 3,130

Other liabilities and deferred credits 19,639 18,676

Total Stockholders’ Equity and Liabilities $76,073 $75,581

The Company's Form 10-QSB filed quarterly with the Securities and Exchange Commission is available to shareholders upon request. Shareholders who are interested in the Company's dividend reinvestment and common stock purchase plan may obtain a prospectus by writing directly to the Company. For additional information about the Company, please visit our website at www.pennichuck.com.

4370 2QTR00