Earnings per Share/Capital Stock

9 Months Ended

Sep. 30, 2021

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 September 30,				For The Nine Months Ended September 30,
(in thousands, except per share amounts)	2021		2020		2021		2020
Net income	$	28,153	$	26,530	$	73,997	$	66,214
Less: (a) Distributed earnings to common shareholders	13,480		12,356		38,207		34,848
Distributed earnings to participating securities	37		43		100		116
Undistributed earnings	14,636		14,131		35,690		31,250

(b) Undistributed earnings allocated to common shareholders	14,596		14,083		35,597		31,146
Undistributed earnings allocated to participating securities	40		48		93		104

Total income available to common shareholders, basic (a)+(b)	$	28,076	$	26,439	$	73,804	$	65,994

Weighted average Common Shares outstanding, basic	36,933		36,886		36,916		36,877

Basic earnings per Common Share	$	0.76	$	0.72	$	2.00	$	1.79

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 September 30, 2021 and 2020 under these plans. At September 30, 2021 and 2020, there were 101,267 and 127,234 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 September 30,				For The Nine Months Ended September 30,
(in thousands, except per share amounts)	2021		2020		2021		2020
Common shareholders earnings, basic	$	28,076	$	26,439	$	73,804	$	65,994
Undistributed earnings for dilutive stock-based awards	40		48		93		104
Total common shareholders earnings, diluted	$	28,116	$	26,487	$	73,897	$	66,098

Weighted average common shares outstanding, basic	36,933		36,886		36,916		36,877
Stock-based compensation (1)	92		116		88		113
Weighted average common shares outstanding, diluted	37,025		37,002		37,004		36,990

Diluted earnings per Common Share	$	0.76	$	0.72	$	2.00	$	1.79

(1) All of the 101,267 and 127,234 restricted stock units at September 30, 2021 and 2020, respectively, were included in the calculation of diluted EPS for the three and nine months ended September 30, 2021 and 2020.

During the nine months ended September 30, 2021, AWR issued 47,149 common shares related to restricted stock units. During the nine months ended September 30, 2020, AWR issued 42,447 common shares related to restricted stock units and stock options for approximately $30,000, under Registrant’s stock incentive plans for employees.

During the nine months ended September 30, 2021 and 2020, AWR paid $1.3 million and $1.9 million, respectively, to taxing authorities on employees' behalf for shares withheld related to net share settlements. During the nine months ended September 30, 2021 and 2020, GSWC paid $1.2 million and $1.7 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 September 30, 2021 and 2020, AWR paid quarterly dividends of approximately $13.5 million, or $0.365 per share, and $12.4 million, or $0.335 per share, respectively. During the nine months ended September 30, 2021 and 2020, AWR paid quarterly dividends of approximately $38.2 million, or $1.035 per share, and $34.8 million, or $0.945 per share, respectively.

During the three months ended September 30, 2021, GSWC paid dividends of $13.5 million to AWR. GSWC did not pay a dividend to AWR during the three months ended September 30, 2020. During the nine months ended September 30, 2021 and 2020, GSWC paid dividends of $38.3 million and $22.5 million, respectively, to AWR during these periods.