Completion of Electric Utility Reorganization Plan

9 Months Ended

Sep. 30, 2021

Restructuring and Related Activities [Abstract]

Completion of Electric Utility Reorganization Plan

Completion of Electric Utility Reorganization PlanOn July 1, 2020, GSWC completed the transfer of approximately $71.3 million in net assets and equity (based on their recorded amounts) from its electric utility division to BVESI in exchange for common shares of BVESI of equal value. This was a non-cash transaction, and no gain or loss was recognized. GSWC then immediately distributed all of BVESI's common shares to AWR, whereupon BVESI became wholly owned directly by AWR. The reorganization did not result in any substantive changes to AWR's operations or business segments. In addition, pursuant to federal and state tax law, the exchange and distribution

qualify as a tax-free reorganization; consequently, no income tax liability was triggered for the AWR consolidated group or any of its members.

The transfer between GSWC and BVESI, both wholly owned subsidiaries of AWR, was considered a common control transaction. Although the electric utility division was considered a separate business segment and component of GSWC, the transfer did not qualify as a discontinued operation based on management's assessment of the applicable accounting guidance. As a result of this transfer, from July 1, 2020 onward, operating results and cash flows of the electric segment, as well as its assets and liabilities, are no longer included in GSWC's financial statements, but continue to be included in AWR's consolidated financial statements. GSWC's statements of income and cash flows for the three and six months ended June 30, 2020 include the electric segment's results.

The table below sets forth selected information relating to the electric segment's results of operations for the nine months ended September 30, 2021 as a subsidiary of AWR, and for the six months ended June 30, 2020 while a division of GSWC plus the three months ended September 30, 2020 as a new subsidiary of AWR:

	Nine Months Ended		Six Months Ended		Three Months Ended
	September 30, 2021		June 30, 2020		September 30, 2020		Nine Months Ended
(in thousands)	(Subsidiary of AWR)		(Division of GSWC)		(Subsidiary of AWR)		September 30, 2020
Electric revenues	$	28,211	$	18,647	$	8,288	$	26,935
Operating expenses	20,915		13,647		6,423		20,070
Operating income	7,296		5,000		1,865		6,865
Net income	$	5,310	$	3,409	$	1,308	$	4,717

The table below sets forth the electric segment's post-spinoff cash flows for the nine months ended September 30, 2021, and for the three months ended September 30, 2020.

	Nine Months Ended September 30, 2021		Three Months Ended September 30, 2020
(in thousands)	(Subsidiary of AWR)		(Subsidiary of AWR)
Net cash provided from operating activities	$	7,215	$	603
Net cash used in investing activities	(15,139)		(3,039)
Net cash provided from financing activities (1)	7,824		2,999
Net change in cash and cash equivalents	(100)		563
Cash and cash equivalents, beginning of period	367		20
Cash and cash equivalents, end of period	$	267	$	583

(1)    Effective July 1, 2020, BVESI has a 3-year, $35 million revolving credit facility agreement. As of September 30, 2021, there was $28.0 million outstanding under this facility. Under the terms of the credit agreement, BVESI has the option to request an increase in the facility of an additional $15.0 million subject to approval by the financial institution.