Earnings per Share/Capital Stock

6 Months Ended

Jun. 30, 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 June 30,				For The Six Months Ended June 30,
(in thousands, except per share amounts)	2021		2020		2021		2020
Net income	$	26,576	$	25,612	$	45,844	$	39,684
Less: (a) Distributed earnings to common shareholders	12,366		11,250		24,727		22,492
Distributed earnings to participating securities	35		40		65		77
Undistributed earnings	14,175		14,322		21,052		17,115

(b) Undistributed earnings allocated to common shareholders	14,135		14,271		20,997		17,057
Undistributed earnings allocated to participating securities	40		51		55		58

Total income available to common shareholders, basic (a)+(b)	$	26,501	$	25,521	$	45,724	$	39,549

Weighted average Common Shares outstanding, basic	36,916		36,884		36,907		36,872

Basic earnings per Common Share	$	0.72	$	0.69	$	1.24	$	1.07

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, 2021 and 2020 under these plans. At June 30, 2021 and 2020, there were 107,772 and 133,863 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)	2021		2020		2021		2020
Common shareholders earnings, basic	$	26,501	$	25,521	$	45,724	$	39,549
Undistributed earnings for dilutive stock-based awards	40		51		55		58
Total common shareholders earnings, diluted	$	26,541	$	25,572	$	45,779	$	39,607

Weighted average common shares outstanding, basic	36,916		36,884		36,907		36,872
Stock-based compensation (1)	91		116		86		113
Weighted average common shares outstanding, diluted	37,007		37,000		36,993		36,985

Diluted earnings per Common Share	$	0.72	$	0.69	$	1.24	$	1.07

(1) All of the 107,772 and 133,863 restricted stock units at June 30, 2021 and 2020, respectively, were included in the calculation of diluted EPS for the three and six months ended June 30, 2021 and 2020.

During the six months ended June 30, 2021, AWR issued 42,668 common shares related to restricted stock units. During the six months ended June 30, 2020, AWR issued 37,260 common shares related to restricted stock units and stock options for approximately $30,000, under Registrant’s stock incentive plans for employees.

During the six months ended June 30, 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 six months ended June 30, 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 June 30, 2021 and 2020, AWR paid quarterly dividends of approximately $12.4 million, or $0.335 per share, and $11.3 million, or $0.305 per share, respectively. During the six months ended June 30, 2021 and 2020, AWR paid quarterly dividends of approximately $24.7 million, or $0.670 per share, and $22.5 million, or $0.610 per share, respectively.

During the three months ended June 30, 2021 and 2020, GSWC paid dividends of $12.4 million and $11.3 million, respectively, to AWR during these periods. During the six months ended June 30, 2021 and 2020, GSWC paid dividends of $24.8 million and $22.5 million, respectively, to AWR during these periods.