Earnings per Share/Capital Stock

6 Months Ended

Jun. 30, 2022

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 June 30,				For The Six Months Ended June 30,
(in thousands, except per share amounts)	2022		2021		2022		2021
Net income	$	19,951	$	26,576	$	34,113	$	45,844
Less: (a) Distributed earnings to common shareholders	13,489		12,366		26,974		24,727
Distributed earnings to participating securities	36		35		67		65
Undistributed earnings	6,426		14,175		7,072		21,052

(b) Undistributed earnings allocated to common shareholders	6,409		14,135		7,055		20,997
Undistributed earnings allocated to participating securities	17		40		17		55

Total income available to common shareholders, basic (a)+(b)	$	19,898	$	26,501	$	34,029	$	45,724

Weighted average Common Shares outstanding, basic	36,956		36,916		36,950		36,907

Basic earnings per Common Share	$	0.54	$	0.72	$	0.92	$	1.24

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 June 30, 2022 and 2021 under these plans. At June 30, 2022 and 2021, there were 100,820 and 107,772 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 June 30,				For The Six Months Ended June 30,
(in thousands, except per share amounts)	2022		2021		2022		2021
Common shareholders earnings, basic	$	19,898	$	26,501	$	34,029	$	45,724
Undistributed earnings for dilutive stock-based awards	17		40		17		55
Total common shareholders earnings, diluted	$	19,915	$	26,541	$	34,046	$	45,779

Weighted average common shares outstanding, basic	36,956		36,916		36,950		36,907
Stock-based compensation (1)	83		91		79		86
Weighted average common shares outstanding, diluted	37,039		37,007		37,029		36,993

Diluted earnings per Common Share	$	0.54	$	0.72	$	0.92	$	1.24

(1) All of the 100,820 and 107,772 restricted stock units at June 30, 2022 and 2021, respectively, were included in the calculation of diluted EPS for the three and six months ended June 30, 2022 and 2021.

During the six months ended June 30, 2022 and 2021, AWR issued 19,742 and 42,668 of common shares related to restricted stock units, respectively.

During the six months ended June 30, 2022 and 2021, AWR paid $1.2 million and $1.3 million, respectively, to taxing authorities on employees' behalf for shares withheld related to net share settlements. During the six months ended June 30, 2022 and 2021, GSWC paid $1.1 million and $1.2 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 June 30, 2022 and 2021, 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 six months ended June 30, 2022 and 2021, AWR paid quarterly dividends of approximately $27.0 million, or $0.730 per share, and $24.7 million, or $0.670 per share, respectively.

During the three months ended June 30, 2022 and 2021, GSWC paid dividends of $13.5 million and $12.4 million, respectively, to AWR during these periods. During the six months ended June 30, 2022 and 2021, GSWC paid dividends of $27.0 million and $24.8 million, respectively, to AWR during these periods.