BrightView EXEMPT Consolidated Financial Statements l

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BrightView Acquisition Holdings, Inc. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2016 and 2015 (in thousands) periods March 18, 2016 through December 31, 2020. The notional amount of interest rate contracts was $2,850,000 at December 31, 2016 and December 31, 2015. The net deferred losses on the interest rate swaps as of December 31, 2016 of $7,342, net of taxes, are expected to be recognized in interest expense over the next 12 months. The effects on the consolidated financial statements of the interest-rate swaps which were designated as cash flow hedges were as follows (in thousands): For the Year Ended December 31, 2016 2015 (Loss) income recognized in other comprehensive loss - effective portion (8,331) (12,951) (Loss) income recognized in interest expense - ineffective portion -(24) Loss reclassified from accumulated other compressive loss into interest expense (4,947) - Fuel Swap Contracts (Loss) income recognized in costs of services provided - ineffective portion 301 (301) Loss reclassified from accumulated other compressive loss into cost of services provided (3,767) (3,728) 9. Income Taxes Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities, and are measured by applying enacted tax rates and laws for the taxable years in which those differences are expected to reverse. Deferred tax assets are evaluated for the estimated future tax effects of deductible temporary differences and tax operating loss carryovers. A valuation allowance is recorded when it is more-likely-than-not that a deferred tax asset will not be realized. The Company operates a large fleet of vehicles and mowers and has entered into gasoline and diesel hedge contracts in an effort to reduce its exposure to volatility in the fuel markets. As of December 31, 2016 the Company had two outstanding fuel contracts covering the periods January 1, 2017 through December 31, 2017 with notional amounts of 4,228 gallons. As of December 31, 2015 the Company had twelve outstanding fuel contracts covering the periods January 1, 2016 through December 31, 2017 with notional amounts of 16,471 gallons. The net commodity losses of $119 net of taxes as of December 31, 2016 are expected to be recognized in cost of services provided over the next 12 months. The effects on the consolidated financial statements of the fuel swaps which were designated as cash flow hedges were as follows (in thousands): For the Year Ended December 31, 2016 2015 (Loss) income recognized in other comprehensive loss - effective portion 666 (4,780) 18 Confidential