Earnings per Share/Capital Stock

3 Months Ended

Mar. 31, 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 March 31,
(in thousands, except per share amounts)	2022		2021
Net income	$	14,162	$	19,268
Less: (a) Distributed earnings to common shareholders	13,485		12,361
Distributed earnings to participating securities	31		37
Undistributed earnings	646		6,870

(b) Undistributed earnings allocated to common shareholders	644		6,850
Undistributed earnings allocated to participating securities	2		20
Total income available to common shareholders, basic (a)+(b)	$	14,129	$	19,211

Weighted average Common Shares outstanding, basic	36,944		36,898
Basic earnings per Common Share	$	0.38	$	0.52

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, 2022 and 2021 under these plans. At March 31, 2022 and 2021, there were 96,586 and 120,973 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)	2022		2021
Common shareholders earnings, basic	$	14,129	$	19,211
Undistributed earnings for dilutive stock-based awards	2		20
Total common shareholders earnings, diluted	$	14,131	$	19,231

Weighted average common shares outstanding, basic	36,944		36,898
Stock-based compensation (1)	75		95
Weighted average common shares outstanding, diluted	37,019		36,993

Diluted earnings per Common Share	$	0.38	$	0.52

(1) All of the 96,586 and 120,973 restricted stock units at March 31, 2022 and 2021, respectively, were included in the calculation of diluted EPS for the three months ended March 31, 2022 and 2021.

During the three months ended March 31, 2022, AWR issued 19,348 common shares related to restricted stock units. During the three months ended March 31, 2021, AWR issued 23,914 common shares related to restricted stock units under Registrant’s stock incentive plans for employees and the non-employee directors' plans.

During the three months ended March 31, 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 three months ended March 31, 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 March 31, 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 three months ended March 31, 2022, GSWC paid dividends of $13.5 million and $12.4 million, respectively, to AWR during these periods.