Earnings per Share/Capital Stock

3 Months Ended

Mar. 31, 2020

In accordance with the accounting guidance for participating securities and earnings per share (“EPS”), Registrant uses the “two-class” method of computing EPS. The “two-class” method is an earnings allocation formula that determines EPS for each class of common stock and participating security. AWR has participating securities related to restricted stock units that earn dividend equivalents on an equal basis with AWR’s Common Shares, and that have been issued under AWR's stock incentive plans for employees and the non-employee directors stock plans. In applying the “two-class” method, undistributed earnings are allocated to both common shares and participating securities.

The following is a reconciliation of Registrant’s net income and weighted average Common Shares outstanding used for calculating basic net income per share:


Basic:	For The Three Months Ended March 31,
(in thousands, except per share amounts)	2021		2020
Net income	$	19,268	$	14,072
Less: (a) Distributed earnings to common shareholders	12,361		11,242
Distributed earnings to participating securities	37		37
Undistributed earnings	6,870		2,793

(b) Undistributed earnings allocated to common shareholders	6,850		2,784
Undistributed earnings allocated to participating securities	20		9

Total income available to common shareholders, basic (a)+(b)	$	19,211	$	14,026

Weighted average Common Shares outstanding, basic	36,898		36,860

Basic earnings per Common Share	$	0.52	$	0.38

Diluted EPS is based upon the weighted average number of Common Shares, including both outstanding shares and shares potentially issuable in connection with restricted stock units granted under AWR’s stock incentive plans for employees and the non-employee directors stock plans, and net income. There were no options outstanding as of March 31, 2021 and 2020 under these plans. At March 31, 2021 and 2020, there were 120,973 and 129,637 restricted stock units outstanding, respectively, including performance shares awarded to officers of the Registrant.

The following is a reconciliation of Registrant’s net income and weighted average Common Shares outstanding for calculating diluted net income per share:


Diluted:	For The Three Months Ended March 31,
(in thousands, except per share amounts)	2021		2020
Common shareholders earnings, basic	$	19,211	$	14,026
Undistributed earnings for dilutive stock-based awards	20		9
Total common shareholders earnings, diluted	$	19,231	$	14,035

Weighted average common shares outstanding, basic	36,898		36,860
Stock-based compensation (1)	95		109
Weighted average common shares outstanding, diluted	36,993		36,969

Diluted earnings per Common Share	$	0.52	$	0.38

(1) All of the 120,973 and 129,637 restricted stock units at March 31, 2021 and 2020, respectively, were included in the calculation of diluted EPS for the three months ended March 31, 2021 and 2020.

During the three months ended March 31, 2021, AWR issued 23,914 related to restricted stock units. During the three months ended March 31, 2020, AWR issued 37,157 common shares related to restricted stock units and stock options for approximately $30,000, under Registrant’s stock incentive plans for employees.

During the three months ended March 31, 2021 and 2020, AWR paid $1.3 million and $1.8 million, respectively, to taxing authorities on employees' behalf for shares withheld related to net share settlements. During the three months ended March 31, 2021 and 2020, GSWC paid $1.2 million and $1.6 million, respectively, to taxing authorities on employees' behalf for

shares withheld related to net share settlements. These payments are included in the stock-based compensation caption of the statements of equity.

During the three months ended March 31, 2021 and 2020, AWR paid quarterly dividends of approximately $12.4 million, or $0.335 per share, and $11.2 million, or $0.305 per share, respectively. During the three months ended March 31, 2021 and 2020, GSWC paid dividends of $12.4 million and $11.3 million, respectively, to AWR during these periods.