Investor Info 2002

January 7, 2002

As we noted on April 29, 2002, Philadelphia Suburban Corporation (NYSE:PSC), the nation’s second largest water utility holding company, and Pennichuck Corporation (NASDAQ:PNNW) the largest investor-owned water utility in New Hampshire, announced that they had entered a definitive agreement to merge in a stock transaction whereby Pennichuck shareholders would receive shares of PSC stock in exchange for their Pennichuck shares. Details concerning the merger consideration can be found in our April 29, 2002 press release and in our preliminary proxy statement/prospectus on file with the Securities and Exchange Commission.

The Transaction Approval Process.

The conditions to closing the merger include the receipt of a final order from the New Hampshire Public Utilities Commission approving the merger and the approval of our shareholders.

The PUC Process.  The process of approval from the New Hampshire Public Utilities Commission was commenced by a filing in June 2002, and the discovery process is currently underway.  In early December 2002, the NHPUC staff and interveners gave testimony concerning their thoughts on the transaction. On December 10, the NHPUC staff stated that the transaction with PSC meets the applicable standards for approval by the full Commission, subject to the Commission's adoption of certain conditions as part of its approval. Hearings are currently scheduled for February 17, 18 and 19, 2002. A decision from the NHPUC is expected February 28, 2003. After the decision is rendered, interveners will have the opportunity to request a rehearing and appeal of the decision, which we anticipate could delay the closing of the merger beyond March 31, 2003. As noted below, a delay in the closing beyond March 31, 2003 may jeopardize the merger.

Shareholder Approval. Pennichuck and PSC have filed a proxy statement - prospectus concerning the transaction with the SEC. After review by the SEC, the proxy statement - prospectus along with a proxy card will be mailed to Pennichuck shareholders for their review. At that time, shareholders will be asked to return a proxy card with their vote concerning the merger with PSC.

We expect to hold a special meeting of the shareholders early in 2003 to vote on the merger with PSC and will schedule a specific date as soon as the proxy statement/prospectus is declared effective by the SEC.

The Municipalization Effort

As you may be aware, two efforts are underway to municipalize the Pennichuck Water Systems. The City of Nashua and a group composed of representatives of towns in which Pennichuck provides water service have begun independent efforts to acquire the company by eminent domain.

City of Nashua. The City of Nashua has hired a consulting firm that performed what we believe to be a cursory evaluation of our core system and compared water rates under the private versus municipal ownership scenarios. Based on the information in this study, the City’s Board of Aldermen have voted to hold a non-binding resolution requesting the citizens of Nashua to express their opinion on whether or not the city should proceed with the acquisition process. This referendum vote will be held on January 14, 2003.

If a majority of the votes cast on January 14^th supports the acquisition, the City may proceed with the lengthy eminent domain process.  The whole process is non-binding, however, until a vote of the Board of Aldermen approved by two-thirds of the members voting approves the final terms of the transaction. We expect that it could take over a year before the City is in a position to proceed with such a vote. In addition, the City would also need to raise millions of dollars, most likely through the offering of public debt.

Regional Water Authority. The regionalization effort would likely be a longer process. Legislation must first be enacted to form a regional authority and to give that authority bonding capacity so that it can raise the millions of dollars that it will cost to acquire Pennichuck. Legislation has been introduced for the next session of the New Hampshire Legislature that begins in January. If and when the legislation is adopted and signed by the governor, the regional group would have to follow the process as prescribed by the state.

Our Thoughts on the Merger and Municipalization

The acquisition of Pennichuck assets by either the City of Nashua or a regional authority would result in a governmental takeover or “municipalization” of a private enterprise that has served its customers well for over 150 years. We continue to believe that the merger with PSC is the best option for our customers and our shareholders. The combination is the best alternative to meet our corporate objectives:

• to provide quality water at a reasonable price,

• to continue to upgrade our services and infrastructure to provide stability in our water supply for years to come,

• to provide employee growth opportunities, and

• to enhance shareholder value through stable growth in earnings and dividends.

Any acquisition of Pennichuck by eminent domain would be highly uncertain and likely involve protracted proceedings before the NHPUC, especially if Pennichuck objects to the acquisition. If the City of Nashua is the acquirer, the NHPUC would have to address a number of unprecedented issues related to Pennichuck’s assets and operations outside the City of Nashua. If a regional authority is the acquirer, each of the communities involved would need to reach agreement as to how Pennichuck’s operations would be run. As of January __, 2003, the City of Nashua had not reached an agreement with the surrounding communities. In either set of circumstances, a great deal of money would have to be raised to complete the transaction.  In neither set of circumstances can we forecast the likelihood of success by the City or a regional authority or the value that would be received by Pennichuck shareholders.

Risks Relating to the Merger That Are Associated with the Municipalization Process

The municipalization effort creates the risk that PSC may determine not to proceed with the transaction. Under the merger agreement, after March 31, 2003, either PSC or Pennichuck may unilaterally terminate the merger agreement (provided that the company terminating the agreement has done nothing to prevent the merger from closing prior to that date). As we noted above, we expect that interveners in the NHPUC process will prevent us from having a final order from the NHPUC by March 31, 2003. PSC may seek to terminate the merger agreement after that date for any reason, including for example, if PSC concludes, based upon all of the facts and circumstances, that the prospect of municipalization presents an unacceptable business risk for it. Therefore, we cannot assure you that the merger will proceed as long as the municipalization efforts continue to proceed and gain further momentum. Moreover, if the merger with PSC is not completed, we cannot assure you that the City or a regional authority would ultimately be successful in acquiring some or all of Pennichuck’s assets or that either would provide the shareholders with value equal to or greater than that provided under the merger agreement with PSC.