x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
for the quarterly period ended March 31, 2016 |
or |
¨ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
for the transition period from to |
California | 95-4676679 | |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) | |
630 E. Foothill Blvd, San Dimas, CA | 91773-1212 | |
(Address of Principal Executive Offices) | (Zip Code) |
California | 95-1243678 | |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) | |
630 E. Foothill Blvd, San Dimas, CA | 91773-1212 | |
(Address of Principal Executive Offices) | (Zip Code) |
American States Water Company | Yes x No ¨ | |
Golden State Water Company | Yes x No ¨ |
American States Water Company | Yes x No ¨ | |
Golden State Water Company | Yes x No ¨ |
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ |
Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer x | Smaller reporting company ¨ |
American States Water Company | Yes ¨ Nox | |
Golden State Water Company | Yes ¨ Nox |
• | the outcomes of pending and future regulatory, legislative or other proceedings, investigations or audits, including decisions in GSWC's general rate cases and the results of independent audits of GSWC's construction contracting procurement practices or other independent audits of our costs; |
• | changes in the policies and procedures of the California Public Utilities Commission ("CPUC"); |
• | timeliness of CPUC action on rates; |
• | availability of water supplies, which may be adversely affected by the California drought, changes in weather patterns in the West, contamination, and court decisions or other governmental actions restricting the use of water from the Colorado River, the California State Water Project, and/or pumping of groundwater; |
• | our ability to efficiently manage GSWC capital expenditures and operating and maintenance expenses within CPUC authorized levels, and timely recover our costs through rates; |
• | the impact of opposition to GSWC rate increases on our ability to recover our costs through rates, including costs associated with construction of pipelines to connect to alternative sources of water, new wells to replace wells that are no longer in service (or are otherwise inadequate to meet the needs of our customers), and other facilities to conserve or reclaim water; |
• | the impact of opposition by GSWC customers to rate increases associated with the implementation of tiered rate structures and restrictions on water use mandated in California as a result of the California drought; |
• | the impact of condemnation actions on future revenues and other aspects of our business if we do not receive adequate compensation for the assets acquired, or recovery of all charges associated with the condemnation of these assets, and the impact on future revenues if we are no longer entitled to any portion of the revenues generated from these assets; |
• | liabilities associated with the inherent risks of damage to private property and injuries to employees and the general public if they should come into contact with electrical current or equipment, including through downed power lines or equipment malfunctions, or we fail to maintain safe construction and maintenance work sites; |
• | our ability to forecast the costs of maintaining GSWC’s aging water and electric infrastructure; |
• | our ability to recover increases in permitting costs and in costs associated with negotiating and complying with the terms of our franchise agreements with cities and counties, and other demands made upon us by the cities and counties in which GSWC operates; |
• | changes in accounting valuations and estimates, including changes resulting from our assessment of anticipated recovery of GSWC's regulatory assets, liabilities and revenues subject to refund or regulatory disallowances and the timing of such recovery, and the amounts set aside for uncollectible accounts receivable, inventory obsolescence, pensions and post-retirement liabilities, taxes and uninsured losses and claims, including general liability and workers' compensation claims; |
• | changes in environmental laws, health and safety laws and water and wastewater quality requirements and increases in costs associated with complying with these laws and requirements, including costs associated with upgrading and building new water treatment plants, disposing of residuals from our water treatment plants, handling and storing hazardous chemicals, compliance monitoring activities and securing alternative supplies of water when necessary; |
• | our ability to obtain adequate, reliable and cost-effective supplies of chemicals, electricity, fuel, water and other raw materials that are needed for our water and wastewater operations; |
• | our ability to attract, retain, train, motivate, develop and transition key employees; |
• | our ability to recover the costs associated with the contamination of GSWC’s groundwater supplies from parties responsible for the contamination or through the ratemaking process, and the time and expense incurred by us in obtaining recovery of such costs; |
• | adequacy of our electric division's power supplies and the extent to which we can manage and respond to the volatility of electricity and natural gas prices; |
• | our electric operation's ability to comply with the CPUC’s renewable energy procurement requirements; |
• | changes in GSWC long-term customer demand due to changes in customer usage patterns as a result of conservation efforts, regulatory changes affecting demand such as mandatory restrictions on water use, new landscaping or irrigation requirements, recycling of water by customers or purchase of recycled water supplied by other parties, unanticipated population growth or decline, changes in climate conditions, general economic and financial market conditions and cost increases, which may impact our long-term operating revenues if we are unable to secure rate increases, if growth in the residential customer base does not occur to the extent necessary to offset the decline in per-customer residential usage or GSWC's customer base declines as a result of condemnation actions or the use of recycled or reclaimed water from other third-party sources; |
• | changes in accounting treatment for regulated utilities; |
• | effects of changes in or interpretations of tax laws, rates or policies; |
• | changes in estimates used in ASUS’s revenue recognition under the percentage-of-completion method of accounting for construction activities; |
• | termination, in whole or in part, of one or more of our military utility privatization contracts to provide water and/or wastewater services at military bases for the convenience of the U.S. government or for default; |
• | suspension or debarment for a period of time from contracting with the government due to violations of federal law or regulations in connection with military utility privatization activities; |
• | delays by the U.S. government in making timely payments to ASUS for water and/or wastewater services at military bases as a result of fiscal uncertainties over the funding of the U.S. government or otherwise; |
• | delays in obtaining redetermination of prices or economic price or equitable adjustments to our prices on one or more of our contracts to provide water and/or wastewater services at military bases; |
• | disallowance of costs on any of our contracts to provide water and/or wastewater services at military bases as a result of audits, cost reviews or investigations by contracting agencies; |
• | inaccurate assumptions used in preparing bids in our contracted services business or negotiating periodic price adjustments; |
• | failure of the wastewater systems that we operate on military bases resulting in untreated wastewater or contaminants spilling into nearby properties, streams or rivers; |
• | failure to comply with the terms of our military privatization contracts; |
• | failure of any of our subcontractors or manufacturers to perform services for us in accordance with the terms of our military privatization contracts; |
• | issues with the implementation, maintenance or upgrading of information technology systems; |
• | general economic conditions which may impact our ability to recover infrastructure investments and operating costs from customers; |
• | explosions, fires, accidents, mechanical breakdowns, disruption of information technology and telecommunication systems, human error and similar events that may occur while operating and maintaining water and electric systems in California or operating and maintaining water and/or wastewater systems on military bases under varying geographic conditions; |
• | the impact of storms, earthquakes, floods, mudslides, droughts, wildfires, disease and similar natural disasters, or acts of terrorism or vandalism, that affect customer demand or that damage or disrupt facilities, operations or information technology systems owned by us, our customers or third parties on whom we rely; |
• | potential costs, lost revenues, or other consequences resulting from misappropriation of assets or sensitive information, corruption of data, or operational disruption in connection with a cyber-attack or other cyber incident; |
• | increases in the cost of obtaining insurance or in uninsured losses that may not be recovered in rates, including increase due to difficulties in obtaining insurance for certain risks, such as wildfires and earthquakes in California; |
• | restrictive covenants in our debt instruments or changes to our credit ratings on current or future debt that may increase our financing costs or affect our ability to borrow or make payments on our debt; and |
• | our ability to access capital markets and other sources of credit in a timely manner on acceptable terms. |
(in thousands) | March 31, 2016 | December 31, 2015 | ||||||
Property, Plant and Equipment | ||||||||
Regulated utility plant, at cost | $ | 1,607,283 | $ | 1,578,865 | ||||
Non-utility property, at cost | 12,127 | 11,627 | ||||||
Total | 1,619,410 | 1,590,492 | ||||||
Less - Accumulated depreciation | (540,092 | ) | (529,698 | ) | ||||
Net property, plant and equipment | 1,079,318 | 1,060,794 | ||||||
Other Property and Investments | ||||||||
Goodwill | 1,116 | 1,116 | ||||||
Other property and investments | 18,687 | 18,710 | ||||||
Total other property and investments | 19,803 | 19,826 | ||||||
Current Assets | ||||||||
Cash and cash equivalents | 8,457 | 4,364 | ||||||
Accounts receivable — customers (less allowance for doubtful accounts of $730 in 2016 and $790 in 2015) | 16,183 | 18,940 | ||||||
Unbilled receivable | 18,233 | 19,490 | ||||||
Receivable from the U.S. government | 4,076 | 5,861 | ||||||
Other accounts receivable (less allowance for doubtful accounts of $59 in 2016 and $154 in 2015) | 1,448 | 2,302 | ||||||
Income taxes receivable | 7,571 | 10,793 | ||||||
Materials and supplies, at average cost | 5,180 | 5,415 | ||||||
Regulatory assets — current | 33,555 | 30,134 | ||||||
Prepayments and other current assets | 5,453 | 3,229 | ||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 30,969 | 32,169 | ||||||
Total current assets | 131,125 | 132,697 | ||||||
Regulatory and Other Assets | ||||||||
Regulatory assets | 110,643 | 102,562 | ||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 21,253 | 21,330 | ||||||
Other | 6,749 | 6,750 | ||||||
Total regulatory and other assets | 138,645 | 130,642 | ||||||
Total Assets | $ | 1,368,891 | $ | 1,343,959 |
(in thousands) | March 31, 2016 | December 31, 2015 | ||||||
Capitalization | ||||||||
Common shares, no par value | $ | 244,568 | $ | 245,022 | ||||
Earnings reinvested in the business | 222,833 | 220,923 | ||||||
Total common shareholders’ equity | 467,401 | 465,945 | ||||||
Long-term debt | 320,910 | 320,900 | ||||||
Total capitalization | 788,311 | 786,845 | ||||||
Current Liabilities | ||||||||
Notes payable to banks | 43,000 | 28,000 | ||||||
Long-term debt — current | 318 | 312 | ||||||
Accounts payable | 47,856 | 50,585 | ||||||
Income taxes payable | 454 | 68 | ||||||
Accrued other taxes | 5,882 | 8,142 | ||||||
Accrued employee expenses | 11,966 | 11,748 | ||||||
Accrued interest | 6,623 | 3,626 | ||||||
Unrealized loss on purchased power contracts | 7,245 | 7,053 | ||||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 5,540 | 3,764 | ||||||
Other | 10,167 | 10,209 | ||||||
Total current liabilities | 139,051 | 123,507 | ||||||
Other Credits | ||||||||
Advances for construction | 68,802 | 68,041 | ||||||
Contributions in aid of construction - net | 117,386 | 117,810 | ||||||
Deferred income taxes | 195,511 | 192,852 | ||||||
Unamortized investment tax credits | 1,591 | 1,612 | ||||||
Accrued pension and other postretirement benefits | 47,653 | 42,666 | ||||||
Other | 10,586 | 10,626 | ||||||
Total other credits | 441,529 | 433,607 | ||||||
Commitments and Contingencies (Note 8) | ||||||||
Total Capitalization and Liabilities | $ | 1,368,891 | $ | 1,343,959 |
Three Months Ended March 31, | ||||||||
(in thousands, except per share amounts) | 2016 | 2015 | ||||||
Operating Revenues | ||||||||
Water | $ | 66,312 | $ | 71,504 | ||||
Electric | 10,573 | 10,969 | ||||||
Contracted services | 16,642 | 18,460 | ||||||
Total operating revenues | 93,527 | 100,933 | ||||||
Operating Expenses | ||||||||
Water purchased | 13,799 | 12,291 | ||||||
Power purchased for pumping | 1,632 | 2,017 | ||||||
Groundwater production assessment | 2,700 | 3,389 | ||||||
Power purchased for resale | 2,871 | 2,499 | ||||||
Supply cost balancing accounts | (3,415 | ) | 1,813 | |||||
Other operation | 6,966 | 6,160 | ||||||
Administrative and general | 20,773 | 19,527 | ||||||
Depreciation and amortization | 9,791 | 10,548 | ||||||
Maintenance | 4,070 | 3,477 | ||||||
Property and other taxes | 4,378 | 4,276 | ||||||
ASUS construction | 8,729 | 10,046 | ||||||
Total operating expenses | 72,294 | 76,043 | ||||||
Operating Income | 21,233 | 24,890 | ||||||
Other Income and Expenses | ||||||||
Interest expense | (5,623 | ) | (5,228 | ) | ||||
Interest income | 172 | 112 | ||||||
Other, net | 181 | 273 | ||||||
Total other income and expenses | (5,270 | ) | (4,843 | ) | ||||
Income from operations before income tax expense | 15,963 | 20,047 | ||||||
Income tax expense | 5,813 | 7,898 | ||||||
Net Income | $ | 10,150 | $ | 12,149 | ||||
Weighted Average Number of Common Shares Outstanding | 36,521 | 38,205 | ||||||
Basic Earnings Per Common Share | $ | 0.28 | $ | 0.32 | ||||
Weighted Average Number of Diluted Shares | 36,697 | 38,408 | ||||||
Fully Diluted Earnings Per Common Share | $ | 0.28 | $ | 0.32 | ||||
Dividends Paid Per Common Share | $ | 0.224 | $ | 0.213 |
Three Months Ended March 31, | ||||||||
(in thousands) | 2016 | 2015 | ||||||
Cash Flows From Operating Activities: | ||||||||
Net income | $ | 10,150 | $ | 12,149 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 9,965 | 10,771 | ||||||
Provision for doubtful accounts | 41 | 112 | ||||||
Deferred income taxes and investment tax credits | 2,266 | 1,255 | ||||||
Stock-based compensation expense | 786 | 853 | ||||||
Other — net | 191 | 339 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable — customers | 2,625 | 1,958 | ||||||
Unbilled receivable | 1,257 | 4,497 | ||||||
Other accounts receivable | 945 | 1,507 | ||||||
Receivables from the U.S. government | 1,785 | (1,235 | ) | |||||
Materials and supplies | 235 | (316 | ) | |||||
Prepayments and other assets | (2,236 | ) | (3,310 | ) | ||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 1,277 | 8,055 | ||||||
Regulatory assets | (5,897 | ) | (4,612 | ) | ||||
Accounts payable | (3,091 | ) | (2,765 | ) | ||||
Income taxes receivable/payable | 3,608 | 6,589 | ||||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 1,776 | (386 | ) | |||||
Accrued pension and other post-retirement benefits | 1,088 | 2,099 | ||||||
Other liabilities | 873 | 935 | ||||||
Net cash provided | 27,644 | 38,495 | ||||||
Cash Flows From Investing Activities: | ||||||||
Capital expenditures | (29,454 | ) | (17,390 | ) | ||||
Other investing activities | (79 | ) | (71 | ) | ||||
Net cash used | (29,533 | ) | (17,461 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
Proceeds from stock option exercises | 126 | 292 | ||||||
Repurchase of Common Shares | — | (13,891 | ) | |||||
Receipt of advances for and contributions in aid of construction | 1,054 | 714 | ||||||
Refunds on advances for construction | (443 | ) | (429 | ) | ||||
Retirement or repayments of long-term debt | (77 | ) | (69 | ) | ||||
Proceeds from notes payable to banks | 15,000 | — | ||||||
Dividends paid | (8,181 | ) | (8,155 | ) | ||||
Other | (1,497 | ) | (809 | ) | ||||
Net cash (used) provided | 5,982 | (22,347 | ) | |||||
Net change in cash and cash equivalents | 4,093 | (1,313 | ) | |||||
Cash and cash equivalents, beginning of period | 4,364 | 75,988 | ||||||
Cash and cash equivalents, end of period | $ | 8,457 | $ | 74,675 | ||||
Non-cash transactions: | ||||||||
Accrued payables for investment in utility plant | $ | 21,017 | $ | 11,003 | ||||
Property installed by developers and conveyed | $ | 806 | $ | 289 |
(in thousands) | March 31, 2016 | December 31, 2015 | ||||||
Utility Plant | ||||||||
Utility plant, at cost | $ | 1,607,283 | $ | 1,578,865 | ||||
Less - Accumulated depreciation | (532,885 | ) | (522,749 | ) | ||||
Net utility plant | 1,074,398 | 1,056,116 | ||||||
Other Property and Investments | 16,561 | 16,581 | ||||||
Current Assets | ||||||||
Cash and cash equivalents | 3,486 | 2,501 | ||||||
Accounts receivable-customers (less allowance for doubtful accounts of $730 in 2016 and $790 in 2015) | 16,183 | 18,940 | ||||||
Unbilled receivable | 16,497 | 18,181 | ||||||
Inter-company receivable | 329 | 54 | ||||||
Other accounts receivable (less allowance for doubtful accounts of $59 in 2016 and $129 in 2015) | 928 | 1,455 | ||||||
Income taxes receivable from Parent | 7,852 | 11,000 | ||||||
Materials and supplies, at average cost | 4,345 | 4,860 | ||||||
Regulatory assets — current | 33,555 | 30,134 | ||||||
Prepayments and other current assets | 4,546 | 2,793 | ||||||
Total current assets | 87,721 | 89,918 | ||||||
Regulatory and Other Assets | ||||||||
Regulatory assets | 110,643 | 102,562 | ||||||
Other | 6,714 | 6,702 | ||||||
Total regulatory and other assets | 117,357 | 109,264 | ||||||
Total Assets | $ | 1,296,037 | $ | 1,271,879 |
(in thousands) | March 31, 2016 | December 31, 2015 | ||||||
Capitalization | ||||||||
Common shares, no par value | $ | 238,233 | $ | 238,795 | ||||
Earnings reinvested in the business | 185,567 | 184,935 | ||||||
Total common shareholder’s equity | 423,800 | 423,730 | ||||||
Long-term debt | 320,910 | 320,900 | ||||||
Total capitalization | 744,710 | 744,630 | ||||||
Current Liabilities | ||||||||
Inter-company payable | 27,033 | 12,000 | ||||||
Long-term debt — current | 318 | 312 | ||||||
Accounts payable | 40,039 | 39,610 | ||||||
Accrued other taxes | 5,522 | 7,830 | ||||||
Accrued employee expenses | 10,657 | 10,630 | ||||||
Accrued interest | 6,352 | 3,599 | ||||||
Unrealized loss on purchased power contracts | 7,245 | 7,053 | ||||||
Other | 9,895 | 9,921 | ||||||
Total current liabilities | 107,061 | 90,955 | ||||||
Other Credits | ||||||||
Advances for construction | 68,802 | 68,041 | ||||||
Contributions in aid of construction — net | 117,386 | 117,810 | ||||||
Deferred income taxes | 198,362 | 195,658 | ||||||
Unamortized investment tax credits | 1,591 | 1,612 | ||||||
Accrued pension and other postretirement benefits | 47,653 | 42,666 | ||||||
Other | 10,472 | 10,507 | ||||||
Total other credits | 444,266 | 436,294 | ||||||
Commitments and Contingencies (Note 8) | ||||||||
Total Capitalization and Liabilities | $ | 1,296,037 | $ | 1,271,879 |
Three Months Ended March 31, | ||||||||
(in thousands) | 2016 | 2015 | ||||||
Operating Revenues | ||||||||
Water | $ | 66,312 | $ | 71,504 | ||||
Electric | 10,573 | 10,969 | ||||||
Total operating revenues | 76,885 | 82,473 | ||||||
Operating Expenses | ||||||||
Water purchased | 13,799 | 12,291 | ||||||
Power purchased for pumping | 1,632 | 2,017 | ||||||
Groundwater production assessment | 2,700 | 3,389 | ||||||
Power purchased for resale | 2,871 | 2,499 | ||||||
Supply cost balancing accounts | (3,415 | ) | 1,813 | |||||
Other operation | 6,083 | 5,458 | ||||||
Administrative and general | 16,516 | 15,557 | ||||||
Depreciation and amortization | 9,530 | 10,241 | ||||||
Maintenance | 3,539 | 2,817 | ||||||
Property and other taxes | 3,987 | 3,918 | ||||||
Total operating expenses | 57,242 | 60,000 | ||||||
Operating Income | 19,643 | 22,473 | ||||||
Other Income and Expenses | ||||||||
Interest expense | (5,570 | ) | (5,218 | ) | ||||
Interest income | 170 | 104 | ||||||
Other, net | 181 | 273 | ||||||
Total other income and expenses | (5,219 | ) | (4,841 | ) | ||||
Income from operations before income tax expense | 14,424 | 17,632 | ||||||
Income tax expense | 5,440 | 7,247 | ||||||
Net Income | $ | 8,984 | $ | 10,385 |
Three Months Ended March 31, | ||||||||
(in thousands) | 2016 | 2015 | ||||||
Cash Flows From Operating Activities: | ||||||||
Net income | $ | 8,984 | $ | 10,385 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 9,705 | 10,464 | ||||||
Provision for doubtful accounts | 62 | 112 | ||||||
Deferred income taxes and investment tax credits | 2,308 | 1,361 | ||||||
Stock-based compensation expense | 578 | 627 | ||||||
Other — net | 180 | 329 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable — customers | 2,625 | 1,958 | ||||||
Unbilled receivable | 1,684 | 1,096 | ||||||
Other accounts receivable | 597 | 989 | ||||||
Materials and supplies | 515 | (433 | ) | |||||
Prepayments and other assets | (1,765 | ) | (2,558 | ) | ||||
Regulatory assets | (5,897 | ) | (4,612 | ) | ||||
Accounts payable | 74 | 558 | ||||||
Inter-company receivable/payable | (242 | ) | 188 | |||||
Income taxes receivable/payable from/to Parent | 3,148 | 5,898 | ||||||
Accrued pension and other post-retirement benefits | 1,088 | 2,099 | ||||||
Other liabilities | 411 | 377 | ||||||
Net cash provided | 24,055 | 28,838 | ||||||
Cash Flows From Investing Activities: | ||||||||
Capital expenditures | (28,961 | ) | (17,318 | ) | ||||
Note receivable from AWR parent | (4,000 | ) | — | |||||
Receipt of payment of note receivable from AWR parent | 4,000 | — | ||||||
Other investing activities | (79 | ) | (79 | ) | ||||
Net cash used | (29,040 | ) | (17,397 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
Receipt of advances for and contributions in aid of construction | 1,054 | 714 | ||||||
Refunds on advances for construction | (443 | ) | (429 | ) | ||||
Retirement or repayments of long-term debt | (77 | ) | (69 | ) | ||||
Net change in inter-company borrowings | 15,000 | — | ||||||
Dividends paid | (8,300 | ) | (13,000 | ) | ||||
Other | (1,264 | ) | (689 | ) | ||||
Net cash (used) provided | 5,970 | (13,473 | ) | |||||
Net change in cash and cash equivalents | 985 | (2,032 | ) | |||||
Cash and cash equivalents, beginning of period | 2,501 | 44,005 | ||||||
Cash and cash equivalents, end of period | $ | 3,486 | $ | 41,973 | ||||
Non-cash transactions: | ||||||||
Accrued payables for investment in utility plant | $ | 21,010 | $ | 10,989 | ||||
Property installed by developers and conveyed | $ | 806 | $ | 289 |
(dollars in thousands) | March 31, 2016 | December 31, 2015 | ||||||
GSWC | ||||||||
Water Revenue Adjustment Mechanism, net of Modified Cost Balancing Account | $ | 53,948 | $ | 45,171 | ||||
Costs deferred for future recovery on Aerojet case | 12,567 | 12,699 | ||||||
Pensions and other post-retirement obligations (Note 7) | 25,538 | 21,996 | ||||||
Derivative unrealized loss (Note 4) | 7,245 | 7,053 | ||||||
Flow-through taxes, net (Note 6) | 16,551 | 16,176 | ||||||
Low income rate assistance balancing accounts | 8,810 | 8,699 | ||||||
Other regulatory assets | 25,298 | 25,668 | ||||||
Various refunds to customers | (5,759 | ) | (4,766 | ) | ||||
Total | $ | 144,198 | $ | 132,696 |
Basic: | For The Three Months Ended March 31, | |||||||
(in thousands, except per share amounts) | 2016 | 2015 | ||||||
Net income | $ | 10,150 | $ | 12,149 | ||||
Less: (a) Distributed earnings to common shareholders | 8,181 | 8,138 | ||||||
Distributed earnings to participating securities | 45 | 45 | ||||||
Undistributed earnings | 1,924 | 3,966 | ||||||
(b) Undistributed earnings allocated to common shareholders | 1,914 | 3,945 | ||||||
Undistributed earnings allocated to participating securities | 10 | 21 | ||||||
Total income available to common shareholders, basic (a)+(b) | $ | 10,095 | $ | 12,083 | ||||
Weighted average Common Shares outstanding, basic | 36,521 | 38,205 | ||||||
Basic earnings per Common Share | $ | 0.28 | $ | 0.32 |
Diluted: | For The Three Months Ended March 31, | |||||||
(in thousands, except per share amounts) | 2016 | 2015 | ||||||
Common shareholders earnings, basic | $ | 10,095 | $ | 12,083 | ||||
Undistributed earnings for dilutive stock-based awards | 10 | 21 | ||||||
Total common shareholders earnings, diluted | $ | 10,105 | $ | 12,104 | ||||
Weighted average common shares outstanding, basic | 36,521 | 38,205 | ||||||
Stock-based compensation (1) | 176 | 203 | ||||||
Weighted average common shares outstanding, diluted | 36,697 | 38,408 | ||||||
Diluted earnings per Common Share | $ | 0.28 | $ | 0.32 |
(dollars in thousands) | 2016 | 2015 | ||||||
Fair value at beginning of the period | $ | (7,053 | ) | $ | (3,339 | ) | ||
Unrealized loss on purchased power contracts | (192 | ) | (2,837 | ) | ||||
Fair value at end of the period | $ | (7,245 | ) | $ | (6,176 | ) |
March 31, 2016 | December 31, 2015 | |||||||||||||||
(dollars in thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Financial liabilities: | ||||||||||||||||
Long-term debt—GSWC (1) | $ | 325,776 | $ | 418,104 | $ | 325,853 | $ | 403,844 |
For The Three Months Ended March 31, | ||||||||||||||||||||||||
Pension Benefits | Other Postretirement Benefits | SERP | ||||||||||||||||||||||
(dollars in thousands) | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Components of Net Periodic Benefits Cost: | ||||||||||||||||||||||||
Service cost | $ | 1,232 | $ | 1,686 | $ | 68 | $ | 95 | $ | 200 | $ | 204 | ||||||||||||
Interest cost | 1,930 | 1,939 | 97 | 114 | 186 | 163 | ||||||||||||||||||
Expected return on plan assets | (2,460 | ) | (2,446 | ) | (122 | ) | (123 | ) | — | — | ||||||||||||||
Amortization of transition | — | — | — | — | — | — | ||||||||||||||||||
Amortization of prior service cost (benefit) | 12 | 30 | (9 | ) | (50 | ) | 6 | 29 | ||||||||||||||||
Amortization of actuarial (gain) loss | 127 | 469 | (150 | ) | (53 | ) | 73 | 108 | ||||||||||||||||
Net periodic pension cost under accounting standards | 841 | 1,678 | (116 | ) | (17 | ) | 465 | 504 | ||||||||||||||||
Regulatory adjustment — deferred | 359 | 11 | — | — | — | — | ||||||||||||||||||
Total expense recognized, before allocation to overhead pool | $ | 1,200 | $ | 1,689 | $ | (116 | ) | $ | (17 | ) | $ | 465 | $ | 504 |
As Of And For The Three Months Ended March 31, 2016 | ||||||||||||||||||||
GSWC | AWR | Consolidated | ||||||||||||||||||
(dollars in thousands) | Water | Electric | ASUS | Parent | AWR | |||||||||||||||
Operating revenues | $ | 66,312 | $ | 10,573 | $ | 16,642 | $ | — | $ | 93,527 | ||||||||||
Operating income (loss) | 17,408 | 2,235 | 1,592 | (2 | ) | 21,233 | ||||||||||||||
Interest expense, net | 5,075 | 325 | 7 | 44 | 5,451 | |||||||||||||||
Utility plant | 1,022,525 | 51,873 | 4,920 | — | 1,079,318 | |||||||||||||||
Depreciation and amortization expense (1) | 9,023 | 507 | 261 | — | 9,791 | |||||||||||||||
Income tax expense (benefit) | 4,586 | 854 | 573 | (200 | ) | 5,813 | ||||||||||||||
Capital additions | 28,141 | 820 | 493 | — | 29,454 |
As Of And For The Three Months Ended March 31, 2015 | ||||||||||||||||||||
GSWC | AWR | Consolidated | ||||||||||||||||||
(dollars in thousands) | Water | Electric | ASUS | Parent | AWR | |||||||||||||||
Operating revenues | $ | 71,504 | $ | 10,969 | $ | 18,460 | $ | — | $ | 100,933 | ||||||||||
Operating income (loss) | 19,741 | 2,732 | 2,420 | (3 | ) | 24,890 | ||||||||||||||
Interest expense, net | 4,801 | 313 | 8 | (6 | ) | 5,116 | ||||||||||||||
Utility plant | 958,270 | 44,871 | 4,422 | — | 1,007,563 | |||||||||||||||
Depreciation and amortization expense (1) | 9,941 | 300 | 307 | — | 10,548 | |||||||||||||||
Income tax expense (benefit) | 6,144 | 1,103 | 871 | (220 | ) | 7,898 | ||||||||||||||
Capital additions | 16,244 | 1,074 | 72 | — | 17,390 |
March 31, | ||||||||
2016 | 2015 | |||||||
Total utility plant | $ | 1,079,318 | $ | 1,007,563 | ||||
Other assets | 289,573 | 354,939 | ||||||
Total consolidated assets (2) | $ | 1,368,891 | $ | 1,362,502 |
Diluted Earnings per Share | ||||||||||||
Three Months Ended | ||||||||||||
3/31/2016 | 3/31/2015 | CHANGE | ||||||||||
Water | $ | 0.22 | $ | 0.24 | $ | (0.02 | ) | |||||
Electric | 0.03 | 0.03 | — | |||||||||
Contracted services | 0.03 | 0.04 | (0.01 | ) | ||||||||
AWR (parent) | — | 0.01 | (0.01 | ) | ||||||||
Consolidated diluted earnings per share, as reported | $ | 0.28 | $ | 0.32 | $ | (0.04 | ) |
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | $ CHANGE | % CHANGE | ||||||||||||
OPERATING REVENUES | |||||||||||||||
Water | $ | 66,312 | $ | 71,504 | $ | (5,192 | ) | (7.3 | )% | ||||||
Electric | 10,573 | 10,969 | (396 | ) | (3.6 | )% | |||||||||
Contracted services | 16,642 | 18,460 | (1,818 | ) | (9.8 | )% | |||||||||
Total operating revenues | 93,527 | 100,933 | (7,406 | ) | (7.3 | )% | |||||||||
OPERATING EXPENSES | |||||||||||||||
Water purchased | 13,799 | 12,291 | 1,508 | 12.3 | % | ||||||||||
Power purchased for pumping | 1,632 | 2,017 | (385 | ) | (19.1 | )% | |||||||||
Groundwater production assessment | 2,700 | 3,389 | (689 | ) | (20.3 | )% | |||||||||
Power purchased for resale | 2,871 | 2,499 | 372 | 14.9 | % | ||||||||||
Supply cost balancing accounts | (3,415 | ) | 1,813 | (5,228 | ) | (288.4 | )% | ||||||||
Other operation | 6,966 | 6,160 | 806 | 13.1 | % | ||||||||||
Administrative and general | 20,773 | 19,527 | 1,246 | 6.4 | % | ||||||||||
Depreciation and amortization | 9,791 | 10,548 | (757 | ) | (7.2 | )% | |||||||||
Maintenance | 4,070 | 3,477 | 593 | 17.1 | % | ||||||||||
Property and other taxes | 4,378 | 4,276 | 102 | 2.4 | % | ||||||||||
ASUS construction | 8,729 | 10,046 | (1,317 | ) | (13.1 | )% | |||||||||
Total operating expenses | 72,294 | 76,043 | (3,749 | ) | (4.9 | )% | |||||||||
OPERATING INCOME | 21,233 | 24,890 | (3,657 | ) | (14.7 | )% | |||||||||
OTHER INCOME AND EXPENSES | |||||||||||||||
Interest expense | (5,623 | ) | (5,228 | ) | (395 | ) | 7.6 | % | |||||||
Interest income | 172 | 112 | 60 | 53.6 | % | ||||||||||
Other, net | 181 | 273 | (92 | ) | (33.7 | )% | |||||||||
(5,270 | ) | (4,843 | ) | (427 | ) | 8.8 | % | ||||||||
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE | 15,963 | 20,047 | (4,084 | ) | (20.4 | )% | |||||||||
Income tax expense | 5,813 | 7,898 | (2,085 | ) | (26.4 | )% | |||||||||
NET INCOME | $ | 10,150 | $ | 12,149 | $ | (1,999 | ) | (16.5 | )% | ||||||
Basic earnings per Common Share | $ | 0.28 | $ | 0.32 | $ | (0.04 | ) | (12.5 | )% | ||||||
Fully diluted earnings per Common Share | $ | 0.28 | $ | 0.32 | $ | (0.04 | ) | (12.5 | )% |
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | $ CHANGE | % CHANGE | ||||||||||||
WATER OPERATING REVENUES (1) | $ | 66,312 | $ | 71,504 | $ | (5,192 | ) | (7.3 | )% | ||||||
WATER SUPPLY COSTS: | |||||||||||||||
Water purchased (1) | $ | 13,799 | $ | 12,291 | $ | 1,508 | 12.3 | % | |||||||
Power purchased for pumping (1) | 1,632 | 2,017 | (385 | ) | (19.1 | )% | |||||||||
Groundwater production assessment (1) | 2,700 | 3,389 | (689 | ) | (20.3 | )% | |||||||||
Water supply cost balancing accounts (1) | (4,513 | ) | (488 | ) | (4,025 | ) | 824.8 | % | |||||||
TOTAL WATER SUPPLY COSTS | $ | 13,618 | $ | 17,209 | $ | (3,591 | ) | (20.9 | )% | ||||||
WATER GROSS MARGIN (2) | $ | 52,694 | $ | 54,295 | $ | (1,601 | ) | (2.9 | )% | ||||||
PERCENT MARGIN - WATER | 79.5 | % | 75.9 | % | |||||||||||
ELECTRIC OPERATING REVENUES (1) | $ | 10,573 | $ | 10,969 | $ | (396 | ) | (3.6 | )% | ||||||
ELECTRIC SUPPLY COSTS: | |||||||||||||||
Power purchased for resale (1) | $ | 2,871 | $ | 2,499 | $ | 372 | 14.9 | % | |||||||
Electric supply cost balancing accounts (1) | 1,098 | 2,301 | (1,203 | ) | (52.3 | )% | |||||||||
TOTAL ELECTRIC SUPPLY COSTS | $ | 3,969 | $ | 4,800 | $ | (831 | ) | (17.3 | )% | ||||||
ELECTRIC GROSS MARGIN (2) | $ | 6,604 | $ | 6,169 | $ | 435 | 7.1 | % | |||||||
PERCENT MARGIN - ELECTRIC | 62.5 | % | 56.2 | % |
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | $ CHANGE | % CHANGE | ||||||||||||
Water Services | $ | 4,987 | $ | 4,792 | $ | 195 | 4.1 | % | |||||||
Electric Services | 1,096 | 666 | 430 | 64.6 | % | ||||||||||
Contracted Services | 883 | 702 | 181 | 25.8 | % | ||||||||||
Total other operation | $ | 6,966 | $ | 6,160 | $ | 806 | 13.1 | % |
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | $ CHANGE | % CHANGE | ||||||||||||
Water Services | $ | 14,253 | $ | 13,539 | $ | 714 | 5.3 | % | |||||||
Electric Services | 2,263 | 2,018 | 245 | 12.1 | % | ||||||||||
Contracted Services | 4,255 | 3,967 | 288 | 7.3 | % | ||||||||||
AWR (parent) | 2 | 3 | (1 | ) | (33.3 | )% | |||||||||
Total administrative and general | $ | 20,773 | $ | 19,527 | $ | 1,246 | 6.4 | % |
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | $ CHANGE | % CHANGE | ||||||||||||
Water Services | $ | 9,023 | $ | 9,941 | $ | (918 | ) | (9.2 | )% | ||||||
Electric Services | 507 | 300 | 207 | 69.0 | % | ||||||||||
Contracted Services | 261 | 307 | (46 | ) | (15.0 | )% | |||||||||
Total depreciation and amortization | $ | 9,791 | $ | 10,548 | $ | (757 | ) | (7.2 | )% |
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | $ CHANGE | % CHANGE | ||||||||||||
Water Services | $ | 3,353 | $ | 2,647 | $ | 706 | 26.7 | % | |||||||
Electric Services | 186 | 170 | 16 | 9.4 | % | ||||||||||
Contracted Services | 531 | 660 | (129 | ) | (19.5 | )% | |||||||||
Total maintenance | $ | 4,070 | $ | 3,477 | $ | 593 | 17.1 | % |
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | $ CHANGE | % CHANGE | ||||||||||||
Water Services | $ | 3,670 | $ | 3,635 | $ | 35 | 1.0 | % | |||||||
Electric Services | 317 | 283 | 34 | 12.0 | % | ||||||||||
Contracted Services | 391 | 358 | 33 | 9.2 | % | ||||||||||
Total property and other taxes | $ | 4,378 | $ | 4,276 | $ | 102 | 2.4 | % |
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | $ CHANGE | % CHANGE | ||||||||||||
Water Services | $ | 5,240 | $ | 4,903 | $ | 337 | 6.9 | % | |||||||
Electric Services | 330 | 315 | 15 | 4.8 | % | ||||||||||
Contracted Services | 8 | 10 | (2 | ) | (20.0 | )% | |||||||||
AWR (parent) | 45 | — | 45 | 100.0 | % | ||||||||||
Total interest expense | $ | 5,623 | $ | 5,228 | $ | 395 | 7.6 | % |
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | $ CHANGE | % CHANGE | ||||||||||||
Water Services | $ | 165 | $ | 102 | $ | 63 | 61.8 | % | |||||||
Electric Services | 5 | 2 | 3 | 150.0 | % | ||||||||||
Contracted Services | 1 | 2 | (1 | ) | (50.0 | )% | |||||||||
AWR (parent) | 1 | 6 | (5 | ) | (83.3 | )% | |||||||||
Total interest income | $ | 172 | $ | 112 | $ | 60 | 53.6 | % |
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | $ CHANGE | % CHANGE | ||||||||||||
Water Services | $ | 4,586 | $ | 6,144 | $ | (1,558 | ) | (25.4 | )% | ||||||
Electric Services | 854 | 1,103 | (249 | ) | (22.6 | )% | |||||||||
Contracted Services | 573 | 871 | (298 | ) | (34.2 | )% | |||||||||
AWR (parent) | (200 | ) | (220 | ) | 20 | (9.1 | )% | ||||||||
Total income tax expense | $ | 5,813 | $ | 7,898 | $ | (2,085 | ) | (26.4 | )% |
• | FBWS - The fourth price redetermination for Fort Bliss was filed in the third quarter of 2015 and is expected to be finalized in the second quarter of 2016. |
• | TUS - The third price redetermination, for the period February 2014 through January 2017, was finalized through the issuance of a contract modification in July 2015 and provided for an annualized increase in operations and maintenance and renewal and replacement fees. |
• | ODUS - The second and third price redeterminations for the Fort Lee privatization contract in Virginia, for the six-year period beginning February 2011, and for the other bases that ODUS operates in Virginia, for the six-year period beginning April 2011, were finalized through the issuance of contract modifications in September 2015. |
• | PSUS - The second redetermination for Fort Jackson, covering the period mid-February 2013 through mid-February 2016, was finalized through the issuance of a contract modification in September 2015. |
• | ONUS - The third price redetermination for the period covering March 2016 through February 2019 was filed in February 2016 and is expected to be resolved in the third quarter of 2016. |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | Maximum Number of Shares That May Yet Be Purchased under the Plans or Programs (3) | |||||||||
January 1 – 31, 2016 | 68,255 | $ | 40.77 | — | — | ||||||||
February 1 – 29, 2016 | 1,296 | $ | 45.79 | — | — | ||||||||
March 1 – 31, 2016 | 74,884 | $ | 40.68 | — | — | ||||||||
Total | 144,435 | (2) | $ | 40.77 | — |
3.1 | By-Laws of American States Water Company incorporated by reference to Exhibit 3.1 of Registrant's Form 10-Q, filed August 6, 2012 (File No. 1-14431) | |
3.2 | By-laws of Golden State Water Company incorporated by reference to Exhibit 3.1 of Registrant's Form 8-K filed May 13, 2011 (File No. 1-14431) | |
3.3 | Amended and Restated Articles of Incorporation of American States Water Company, as amended, incorporated by reference to Exhibit 3.1 of Registrant's Form 8-K filed June 19, 2013 | |
3.4 | Restated Articles of Incorporation of Golden State Water Company, as amended, incorporated herein by reference to Exhibit 3.1 of Registrant's Form 10-Q for the quarter ended September 30, 2005 (File No. 1-14431) | |
4.1 | Indenture, dated September 1, 1993 between Golden State Water Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, as supplemented, incorporated herein by reference to Exhibit 4.01 of Golden State Water Company Form S-3 filed December 12, 2008 (File No. 333-156112) | |
4.2 | Note Purchase Agreement dated as of October 11, 2005 between Golden State Water Company and Co-Bank, ACB incorporated by reference to Exhibit 4.1 of Registrant's Form 8-K filed October 13, 2005 (File No. 1-14431) | |
4.3 | Note Purchase Agreement dated as of March 10, 2009 between Golden State Water Company and Co-Bank, ACB, incorporated herein by reference to Exhibit 10.16 to Registrant's Form 10-K filed on March 13, 2009 (File No. 1-14431) | |
4.4 | Indenture dated as of December 1, 1998 between American States Water Company and The Bank of New York Mellon Trust Company, N.A., as supplemented by the First Supplemental Indenture dated as of July 31, 2009 incorporated herein by reference to Exhibit 4.1 of American States Water Company's Form 10-Q for the quarter ended June 30, 2009 (File No. 1-14431) | |
10.1 | Second Sublease dated October 5, 1984 between Golden State Water Company and Three Valleys Municipal Water District incorporated herein by reference to Registrant's Registration Statement on Form S-2, Registration No. 33-5151 | |
10.2 | Note Agreement dated as of May 15, 1991 between Golden State Water Company and Transamerica Occidental Life Insurance Company incorporated herein by reference to Registrant's Form 10-Q with respect to the quarter ended June 30, 1991 (File No. 1-14431) | |
10.3 | Schedule of omitted Note Agreements, dated May 15, 1991, between Golden State Water Company and Transamerica Annuity Life Insurance Company, and Golden State Water Company and First Colony Life Insurance Company incorporated herein by reference to Registrant's Form 10-Q with respect to the quarter ended June 30, 1991 (File No. 1-14431) |
10.4 | Loan Agreement between California Pollution Control Financing Authority and Golden State Water Company, dated as of December 1, 1996 incorporated by reference to Exhibit 10.7 of Registrant's Form 10-K for the year ended December 31, 1998 (File No. 1-14431) | |
10.5 | Agreement for Financing Capital Improvement dated as of June 2, 1992 between Golden State Water Company and Three Valleys Municipal Water District incorporated herein by reference to Registrant's Form 10-K with respect to the year ended December 31, 1992 (File No. 1-14431) | |
10.6 | Water Supply Agreement dated as of June 1, 1994 between Golden State Water Company and Central Coast Water Authority incorporated herein by reference to Exhibit 10.15 of Registrant's Form 10-K with respect to the year ended December 31, 1994 (File No. 1-14431) | |
10.7 | 2003 Non-Employee Directors Stock Purchase Plan, as amended, incorporated herein by reference to Exhibit 10.4 to Registrant's Form 8-K filed on May 20, 2015 (File No. 1-14431) (2) | |
10.8 | Dividend Reinvestment and Common Share Purchase Plan incorporated herein by reference to American States Water Company Registrant's Form S-3D filed November 12, 2008 (File No. 1-14431) | |
10.9 | Form of Amended and Restated Change in Control Agreement between American States Water Company or a subsidiary and certain executives incorporated herein by reference to Exhibit 10.5 to Registrant's Form 8-K filed on November 5, 2008 (File No. 1-14431) (2) | |
10.10 | Golden State Water Company Pension Restoration Plan, as amended, incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on May 21, 2009 (File No. 1-14431) (2) | |
10.11 | American States Water Company 2000 Stock Incentive Plan, as amended, incorporated by reference to Exhibit 10.2 of Registrant's Form 8-K filed May 20, 2015 (File No. 1-14431) (2) | |
10.12 | Amended and Restated Credit Agreement between American States Water Company dated June 3, 2005 with Wells Fargo Bank, N.A., as Administrative Agent, as amended, incorporated by reference to Exhibit 10.1 to Registrant's Form 8-K filed March 27, 2014 | |
10.13 | Form of Indemnification Agreement for executive officers incorporated by reference to Exhibit 10.21 to Registrant's Form 10-K for the year ended December 31, 2006 (File No. 1-14431) (2) | |
10.14 | Form of Non-Qualified Stock Option Plan Agreement for officers and key employees for the 2000 Stock Incentive Plan incorporated by reference to Exhibit 10.1 to Registrant's Form 8-K filed on January 7, 2005 (File No. 1-14431) (2) | |
10.15 | Form of Non-Qualified Stock Option Plan Agreement for officers and key employees for the 2000 Stock Incentive Plan incorporated by reference to Exhibit 10.1 of Registrant's Form 10-Q for the period ended March 31, 2006 (File No. 1-14431) (2) | |
10.16 | Form of Directors Non-Qualified Stock Option Agreement incorporated by reference to Exhibit 10.1 to Registrant's Form 10-Q for the period ended September 30, 2006 (File No. 1-14431) (2) |
10.17 | Form of Restricted Stock Unit Award Agreement for officers and key employees under the 2008 Stock Incentive Plan for restricted stock unit awards prior to January 1, 2011 incorporated by reference to Exhibit 10.4 of Registrant's Form 8-K filed on November 5, 2008 (File No. 1-14431) (2) | |
10.18 | 2008 Stock Incentive Plan, as amended, incorporated by reference to Exhibit 10.1 to Registrant's Form 8-K filed March 25, 2016 (2) | |
10.19 | Form of Nonqualified Stock Option Agreement for officers and key employees for the 2008 Stock Incentive Plan incorporated herein by reference to Exhibit 10.3 to Registrant's Form 8-K filed November 21, 2014 (2) | |
10.20 | Policy Regarding the Recoupment of Certain Performance-Based Compensation Payments incorporated herein by reference to Exhibit 10.3 to the Registrant's Form 8-K filed on April 2, 2014 (2) | |
10.21 | Performance Incentive Plan incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on May 21, 2015 (File No. 1-14431) (2) | |
10.22 | Officer Relocation Policy incorporated herein by reference to Exhibit 10.5 to the Registrant's Form 8-K filed on July 31, 2009 (2) | |
10.23 | Form of Non-Qualified Stock Option Award Agreement for officers and key employees under the 2008 Stock Incentive Plan for stock options granted after December 31, 2010 incorporated by reference to Exhibit 10.2 of Registrant's Form 8-K filed on February 4, 2011 (File No. 1-14431) (2) | |
10.24 | Form of Restricted Stock Unit Award Agreement for officers and key employees under the 2008 Stock Incentive Plan for restricted stock unit awards granted after December 31, 2010 but prior to January 1, 2015 incorporated by reference to Exhibit 10.1 to Registrant's Form 8-K filed on February 4, 2011 (File No. 1-14431) (2) | |
10.25 | Form of Indemnification Agreement for directors incorporated by reference herein to Exhibit 10.35 to the Registrant's Form 10-K for the period ended December 31, 2012 (1) (2) | |
10.26 | 2013 Short-Term Incentive Program incorporated by reference herein to Exhibit 10.1 to Registrant’s Form 8-K filed on March 28, 2013 (2) | |
10.27 | Form of 2013 Short-Term Incentive Award Agreement incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed March 28, 2013 (2) | |
10.28 | Form of 2013 Performance Award Agreement incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed on March 15, 2013 (2) | |
10.29 | Form of 2014 Performance Award Agreement incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed January 1, 2014 (2) | |
10.3 | 2013 Non-Employee Directors Plan incorporated by reference herein to Exhibit 10.2 to the Registrant's Form 8-K filed on March 25, 2016 (2) | |
10.31 | 2014 Short-Term Incentive Program incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed April 2, 2014 (2) | |
10.32 | Form of 2014 Short-Term Incentive Agreement incorporated by reference to Exhibit 10.2 to Registrant’s Form 8-K filed April 2, 2014 (2) | |
10.33 | Form of Restricted Stock Unit Agreement for grants after December 31, 2014 incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed November 21, 2014 (2) | |
10.34 | Form of 2015 Performance Award Agreement incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed January 30, 2015 (2) | |
10.35 | 2015 Short-Term Incentive Program incorporated by reference herein to Exhibit 10.1 to the Registrant’s Form 8-K filed on March 27, 2015 (2) | |
10.36 | Form of 2015 Performance Award Agreement incorporated by reference to Exhibit 10.1 to Registrant's Form 8-K filed January 30, 2015 (2) | |
10.37 | 2016 Short-Term Incentive Program incorporated by reference to Exhibit 10.1 to Registrant's Form 8-K filed March 25, 2016 (2) | |
10.38 | Form of 2016 Performance Award Agreement incorporated by reference to Exhibit 10.1 of Registrant's Form 8-K filed March 25, 2016 (2) | |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for AWR (1) | |
31.1.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for GSWC (1) | |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for AWR (1) | |
31.2.1 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for GSWC (1) | |
32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (3) | |
32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (3) | |
101.INS | XBRL Instance Document (3) | |
101.SCH | XBRL Taxonomy Extension Schema (3) | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase (3) | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase (3) | |
101.LAB | XBRL Taxonomy Extension Label Linkbase (3) | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase (3) |
AMERICAN STATES WATER COMPANY (“AWR”): | |||
By: | /s/ EVA G. TANG | ||
Eva G. Tang | |||
Senior Vice President-Finance, Chief Financial | |||
Officer, Corporate Secretary and Treasurer | |||
GOLDEN STATE WATER COMPANY (“GSWC”): | |||
By: | /s/ EVA G. TANG | ||
Eva G. Tang | |||
Senior Vice President-Finance, Chief Financial | |||
Officer and Secretary | |||
Date: | May 4, 2016 |
Dated: | May 4, 2016 | By: | /s/ ROBERT J. SPROWLS | |
Robert J. Sprowls | ||||
President and Chief Executive Officer |
Dated: | May 4, 2016 | By: | /s/ EVA G. TANG | |
Eva G. Tang | ||||
Senior Vice President-Finance, Chief Financial | ||||
Officer, Corporate Secretary and Treasurer |
Dated: | May 4, 2016 | By: | /s/ ROBERT J. SPROWLS | |
Robert J. Sprowls | ||||
President and Chief Executive Officer |
Dated: | May 4, 2016 | By: | /s/ EVA G. TANG | |
Eva G. Tang | ||||
Senior Vice President-Finance, Chief Financial | ||||
Officer and Secretary |
/s/ ROBERT J. SPROWLS | |||
Robert J. Sprowls | |||
President and Chief Executive Officer | |||
Date: | May 4, 2016 |
/s/ EVA G. TANG | |||
Eva G. Tang | |||
Senior Vice President-Finance, Chief Financial Officer, | |||
Corporate Secretary and Treasurer | |||
Date: | May 4, 2016 |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
May. 02, 2016 |
|
Document and Entity Information | ||
Entity Registrant Name | AMERICAN STATES WATER CO | |
Entity Central Index Key | 0001056903 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 36,554,067 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Accounts receivable - customers, allowance for doubtful accounts | $ 730 | $ 790 |
Other accounts receivable, allowance for doubtful accounts | 59 | 154 |
GOLDEN STATE WATER COMPANY | ||
Accounts receivable - customers, allowance for doubtful accounts | 730 | 790 |
Other accounts receivable, allowance for doubtful accounts | $ 59 | $ 129 |
Summary of Significant Accounting Policies: |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies: Nature of Operations: American States Water Company (“AWR”) is the parent company of Golden State Water Company (“GSWC”) and American States Utility Services, Inc. (“ASUS”) (and its subsidiaries, Fort Bliss Water Services Company (“FBWS”), Terrapin Utility Services, Inc. (“TUS”), Old Dominion Utility Services, Inc. (“ODUS”), Palmetto State Utility Services, Inc. (“PSUS”) and Old North Utility Services, Inc. (“ONUS”)). The subsidiaries of ASUS are collectively referred to as the “Military Utility Privatization Subsidiaries.” GSWC is a public utility engaged principally in the purchase, production, distribution and sale of water in California serving approximately 260,000 customers. GSWC also distributes electricity in several San Bernardino County mountain communities in California serving approximately 24,000 customers through its Bear Valley Electric Service (“BVES”) division. Although Registrant has a diversified base of residential, industrial and other customers, revenues derived from commercial and residential water customers accounted for approximately 90% of total water revenues during the three months ended March 31, 2016 and 2015. The California Public Utilities Commission (“CPUC”) regulates GSWC’s water and electric businesses in matters including properties, rates, services, facilities and transactions by GSWC with its affiliates. AWR’s assets and operating income are primarily those of GSWC. ASUS, through its wholly owned subsidiaries, operates, maintains and performs construction activities (including renewal and replacement capital work) on water and/or wastewater systems at various United States military bases pursuant to 50-year firm fixed-price contracts. These contracts are subject to periodic price redeterminations or economic price adjustments and modifications for changes in circumstances, changes in laws and regulations and additions to the contract value for new construction of facilities at the military bases. There is no direct regulatory oversight by the CPUC over AWR or the operations, rates or services provided by ASUS or any of its wholly owned subsidiaries. Basis of Presentation: The consolidated financial statements and notes thereto are presented in a combined report filed by two separate Registrants: AWR and GSWC. References in this report to “Registrant” are to AWR and GSWC, collectively, unless otherwise specified. AWR owns all of the outstanding Common Shares of GSWC and ASUS. ASUS owns all of the outstanding Common Shares of the Military Utility Privatization Subsidiaries. The consolidated financial statements of AWR include the accounts of AWR and its subsidiaries, all of which are wholly owned. These financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. Inter-company transactions and balances have been eliminated in the AWR consolidated financial statements. The consolidated financial statements included herein have been prepared by Registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The December 31, 2015 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles ("GAAP") in the United States of America. The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. In the opinion of management, all adjustments consisting of normal, recurring items and estimates necessary for a fair statement of the results for the interim periods have been made. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Form 10-K for the year ended December 31, 2015 filed with the SEC. GSWC's Related Party Transactions: GSWC and ASUS provide and/or receive various support services to and from their parent, AWR, and among themselves. GSWC also allocates certain corporate office administrative and general costs to its affiliate, ASUS, using allocation factors approved by the CPUC. During the three months ended March 31, 2016 and 2015, GSWC allocated to ASUS approximately $1.0 million and $707,000, respectively, of corporate office administrative and general costs. In addition, AWR has a $100.0 million syndicated credit facility. AWR borrows under this facility and provides funds to its subsidiaries, including GSWC, in support of their operations. The interest rate charged to GSWC and ASUS is sufficient to cover AWR’s interest cost under the credit facility. In October 2015, AWR issued interest bearing promissory notes (the "Notes") to GSWC and ASUS for $40 million and $10 million, respectively, which expire on May 23, 2018. Under the terms of these Notes, AWR may borrow from GSWC and ASUS amounts up to $40 million and $10 million, respectively, for working capital purposes. AWR agrees to pay any unpaid principal amounts outstanding under these notes, plus accrued interest. As of March 31, 2016, there were no amounts outstanding under these Notes. Sales and Use Taxes: GSWC bills certain sales and use taxes levied by state or local governments to its customers. Included in these sales and use taxes are franchise fees, which GSWC pays to various municipalities (based on ordinances adopted by these municipalities) in order to use public rights of way for utility purposes. GSWC bills these franchise fees to its customers based on a CPUC-authorized rate for each rate-making area as applicable. These franchise fees, which are required to be paid regardless of GSWC’s ability to collect them from its customer, are accounted for on a gross basis. GSWC’s franchise fees billed to customers and recorded as operating revenue were approximately $867,000 and $871,000 for the three months ended March 31, 2016 and 2015, respectively. When GSWC acts as an agent, and the tax is not required to be remitted if it is not collected from the customer, the taxes are accounted for on a net basis. Depending on the states in which their operations are conducted, the Military Utility Privatization Subsidiaries are also subject to certain state non-income tax assessments generally computed on a “gross receipts” or “gross revenues” basis. These non-income tax assessments are required to be paid regardless of whether the U.S. government reimburses these assessments under the 50-year contracts. The non-income tax assessments are accounted for on a gross basis and totaled $62,000 and $32,000 during the three months ended March 31, 2016 and 2015, respectively. Recently Issued Accounting Pronouncements: In May 2014, the Financial Accounting Standards Board ("FASB") issued updated accounting guidance on revenue recognition. The guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. Under this guidance, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what the entity expects in exchange for the goods or services. The guidance also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and adoption is not permitted earlier than the original effective date, that is, no earlier than 2017. The guidance allows entities to select one of two methods of adoption, either the full retrospective approach, meaning the guidance would be applied to all periods presented, or modified retrospective approach, meaning the cumulative effect of applying the guidance would be recognized as an adjustment to opening retained earnings at January 1, 2018, along with providing certain additional disclosures. Registrant will adopt this guidance in the fiscal year beginning January 1, 2018. Management has not yet selected a transition method nor has it determined the effect of the standard on the Company's ongoing financial reporting. In April 2015, the FASB issued Accounting Standard Update 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, rather than as an asset. The standard does not affect the recognition and measurement of debt issuance costs. This guidance was adopted January 1, 2016. Accordingly, as of March 31, 2016 and December 31, 2015, Registrant had debt issuance costs, excluding credit facility costs, of $4.5 million and $4.6 million, respectively, reflected in "Long-term debt." Prior to the adoption of this new guidance, debt issuance costs, excluding credit facility costs, of $4.6 million as of December 31, 2015 were reported in noncurrent "Other Assets." On February 25, 2016, the FASB issued a new lease accounting standard, Leases (ASC 842). Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). Extensive quantitative and qualitative disclosures, including significant judgments made by management, will be required in order to provide greater insight into the extent of revenue and expense recognized, and expected to be recognized, from existing contracts. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management has not yet determined the effect of the standard on the Company's ongoing financial reporting. On March 30, 2016, the FASB issued Accounting Standard Update 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC Topic 718, Compensation - Stock Compensation. Under the new guidance, the tax effects related to share-based payments at settlement (or expiration) will be required to be recorded through the income statement rather than through equity, further increasing the volatility of income tax expense. The new standard also removes the requirement to delay recognition of a windfall tax benefit until an employer reduces its current taxes payable. It also permits entities to make an accounting policy election for the impact of forfeitures on the recognition of expense for shared-based payment awards. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Management has not yet determined the effect of the standard on the Company's ongoing financial reporting. |
Regulatory Matters: |
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Regulatory Matters | Regulatory Matters: In accordance with accounting principles for rate-regulated enterprises, Registrant records regulatory assets, which represent probable future recovery of costs from customers through the ratemaking process, and regulatory liabilities, which represent probable future refunds that are to be credited to customers through the ratemaking process. At March 31, 2016, Registrant had approximately $54.0 million of regulatory assets, net of regulatory liabilities, not accruing carrying costs. Of this amount, $23.7 million relates to the underfunded position in Registrant's pension and other post-retirement obligations, $7.2 million relates to a memorandum account authorized by the CPUC to track unrealized gains and losses on BVES' purchase power contracts over the term of the contracts, and $16.6 million relates to deferred income taxes representing accelerated tax benefits flowed through to customers, which will be included in rates concurrently with recognition of the associated future tax expense. The remainder relates to other items that do not provide for or incur carrying costs. Regulatory assets represent costs incurred by GSWC for which it has received or expects to receive rate recovery in the future. In determining the probability of costs being recognized in other periods, GSWC considers regulatory rules and decisions, past practices, and other facts or circumstances that would indicate if recovery is probable. If the CPUC determines that a portion of GSWC’s assets are not recoverable in customer rates, GSWC must determine if it has suffered an asset impairment that requires it to write-down the assets’ value. Regulatory assets are offset against regulatory liabilities within each rate-making area. Amounts expected to be collected or refunded in the next 12-months have been classified as current assets and current liabilities by rate-making area. Regulatory assets, less regulatory liabilities, included in the consolidated balance sheets are as follows:
Regulatory matters are discussed in detail in the consolidated financial statements and the notes thereto included in the Form 10-K for the year ended December 31, 2015 filed with the SEC. The discussion below focuses on significant matters and developments since December 31, 2015. Alternative-Revenue Programs: GSWC records the difference between what it bills its water customers and that which is authorized by the CPUC using the Water Revenue Adjustment Mechanism (“WRAM”) and Modified Cost Balancing Account (“MCBA”) accounts approved by the CPUC. The over- or under-collection of the WRAM is netted against the MCBA over- or under-collection for the corresponding rate-making area and bears interest at the current 90-day commercial paper rate. GSWC has implemented surcharges to recover its WRAM/MCBA balances as of December 31, 2015. For the three months ended March 31, 2016 and 2015, surcharges (net of surcredits) of approximately $1.4 million and $600,000, respectively, were billed to customers to recover previously incurred under-collections in the WRAM/MCBA accounts. During the three months ended March 31, 2016, GSWC recorded additional net under-collections in the WRAM/MCBA accounts of $10.1 million using 2015 adopted revenues since the CPUC has not approved the pending water rate case, which will set new rates for the years 2016 - 2018 as discussed below. As of March 31, 2016, GSWC had a net aggregated regulatory asset of $53.9 million which is comprised of a $55.0 million under-collection in the WRAM accounts and $1.1 million over-collection in the MCBA accounts. As required by the accounting guidance for alternative revenue programs, GSWC is required to collect its WRAM balances, net of its MCBA, within 24 months following the year in which an under-collection is recorded. In April 2012, the CPUC issued a final decision which, among other things, sets the recovery period for under-collected balances that are up to 15% of adopted annual revenues at 18 months or less. For under-collected balances greater than 15%, the recovery period is 19 to 36 months. In addition to adopting a new amortization schedule, the final decision sets a cap on total net WRAM/MCBA surcharges in any given calendar year of 10% of the last authorized revenue requirement. As of March 31, 2016, the recovery periods for the majority of GSWC's WRAM/MCBA balances are primarily within the 12 to 18-month period; however, there were some ratemaking areas that had recovery periods related to the 2015 WRAM balances greater than 24 months. As a result, during the fourth quarter of 2015, GSWC did not record $1.4 million of the 2015 WRAM under-collection balance as revenue. This amount will be recognized as revenue in future periods when it is determined that the amounts will be collected within 24 months. In February 2016, GSWC filed with the CPUC for recovery of the 2015 WRAM balances, including the $1.4 million. Other Regulatory Matters: Pending Water General Rate Case: In 2014, GSWC filed a general rate case (“GRC”) for all of its water regions and the general office to determine new rates for the years 2016-2018. A final decision is expected sometime during 2016. Once the decision is issued, the rates will be retroactive to January 1, 2016. GSWC has settled with the CPUC's Office of Ratepayer Advocates ("ORA") the majority of GSWC’s operating expenses, as well as the consumption levels used to calculate rates for 2016-2018, which reflect the state-mandated conservation targets. The primary unresolved issues relate to GSWC’s capital budget requests and compensation for managerial level employees. At this time, GSWC cannot predict the final outcome of this GRC. The final decision, once issued, could result in a material change to GSWC's net income recorded during the first quarter of 2016, which would need to be adjusted in the quarter that the final decision is issued. Year-to-date 2016 billed revenue has been based on 2015 adopted rates established in the prior GRC. The adopted revenues for 2016, once the CPUC issues a final decision in the current GRC, are expected to be lower than the 2015 adopted levels due primarily to decreases in supply costs caused by lower consumption, depreciation expense resulting from an updated depreciation study, and other operating expenses. As a result of the anticipated reduction in the 2016 adopted revenue level, GSWC has adjusted its water revenues downward for the three months ended March 31, 2016 with corresponding decreases to supply costs, depreciation expense and certain other expenses, to reflect the settled positions with ORA. The adjustment to 2016 recorded water revenues also reflects GSWC’s positions on unresolved capital budget and compensation related issues in the pending GRC. These adjustments did not have a significant impact to pretax operating income for the three months ended March 31, 2016 as the overall reduction in the water margin is mostly offset by the lower depreciation and other operating expenses. Procurement Audits: In December 2011, the CPUC issued a final decision adopting a settlement between GSWC and the CPUC on its investigation of certain work orders and charges paid to a specific contractor used previously for numerous construction projects primarily in one of GSWC's three main geographic water regions. As part of the settlement reached with the CPUC on this matter, GSWC agreed to be subject to three separate independent audits of its procurement practices over a period of 10 years from the date the settlement was approved by the CPUC. The audits cover GSWC’s procurement practices for contracts with other contractors from 1994 forward. The first audit started in 2014 and covered almost a 20-year period from January 1, 1994 through September 30, 2013. In March 2015, the accounting firm engaged by the CPUC to conduct the first independent audit issued its final report to the CPUC’s Division of Water and Audits (“DWA”). The final report, which was issued on a confidential basis, included GSWC's responses to the accounting firm’s findings, as well as the firm’s responses to GSWC's comments. DWA informed GSWC that it does not intend to pursue further investigation, refunds, or penalties in respect of past procurement activities as a result of the final report. Furthermore, in June 2015 the CPUC's Office of Ratepayer Advocates ("ORA") notified the administrative law judge in the ongoing general rate case that, having reviewed the final audit report, its potential concerns with the audit report were satisfied and, as such, ORA withdrew its request to have further review of this matter in the pending general rate case. At this time, GSWC does not believe that a loss associated with any disallowances and/or penalties from this first audit is likely. |
Earnings per Share/Capital Stock: |
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Earnings per Share/Capital Stock | Earnings per Share/Capital Stock: 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 that have been issued under AWR's 2000 and 2008 Stock Incentive Plans and the 2003 and 2013 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:
Diluted EPS is based upon the weighted average number of Common Shares, including both outstanding shares and shares potentially issuable in connection with stock options and restricted stock units granted under AWR’s 2000 and 2008 Stock Incentive Plans, and the 2003 and 2013 Non-Employee Directors Stock Plans, and net income. At March 31, 2016 and 2015, there were 142,402 and 198,764 options outstanding, respectively, under these Plans. At March 31, 2016 and 2015, there were also 215,129 and 226,319 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:
(1) In applying the treasury stock method of reflecting the dilutive effect of outstanding stock-based compensation in the calculation of diluted EPS, 142,402 and 198,764 stock options at March 31, 2016 and 2015, respectively, were deemed to be outstanding in accordance with the accounting guidance on earnings per share. All of the 215,129 and 226,319 restricted stock units at March 31, 2016 and 2015, respectively, were included in the calculation of diluted EPS for the three months ended March 31, 2016 and 2015. No stock options outstanding at March 31, 2016 had an exercise price greater than the average market price of AWR’s Common Shares for the three months ended March 31, 2016. There were no stock options outstanding at March 31, 2016 or 2015 that were anti-dilutive. During the three months ended March 31, 2016 and 2015, AWR issued 52,153 and 47,422 common shares for approximately $126,000 and $292,000, respectively, under Registrant’s Common Share Purchase and Dividend Reinvestment Plan, the 401(k) Plan, the 2000 and 2008 Stock Incentive Plans and the 2003 and 2013 Non-Employee Directors Stock Plans. On March 27, 2014, AWR's Board of Directors approved a stock repurchase program, authorizing AWR to repurchase up to 1.25 million shares of its Common Shares from time to time through June 30, 2016. Pursuant to this program, Registrant repurchased 356,769 Common Shares on the open market during the three months ended March 31, 2015. This stock repurchase program was completed in 2015. During the three months ended March 31, 2016 and 2015, AWR paid quarterly dividends of approximately $8.2 million, or $0.224 per share, and $8.2 million, or $0.213 per share, respectively. |
Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments: Derivative financial instruments are used to manage exposure to commodity price risk. Commodity price risk represents the potential impact that can be caused by a change in the market value of a particular commodity. BVES purchases power under long-term contracts at a fixed cost depending on the amount of power and the period during which the power is purchased under such contracts. In December 2014, the CPUC approved an application that allowed BVES to immediately execute new long-term purchased power contracts with energy providers on December 9, 2014. BVES began taking power under these long-term contracts effective January 1, 2015 at a fixed cost over three and five year terms depending on the amount of power and period during which the power is purchased under the contracts. The long-term contracts executed in December 2014 are subject to the accounting guidance for derivatives and require mark-to-market derivative accounting. Among other things, the CPUC also authorized GSWC to establish a regulatory asset and liability memorandum account to offset the mark-to-market entries required by the accounting guidance. Accordingly, all unrealized gains and losses generated from the purchased power contracts executed in December 2014 are deferred on a monthly basis into a non-interest bearing regulatory memorandum account that tracks the changes in fair value of the derivative throughout the term of the contract. As a result, these unrealized gains and losses do not impact GSWC’s earnings. As of March 31, 2016, there was a $7.2 million unrealized loss in the memorandum account for the purchased power contracts as a result of the recent drop in energy prices. The notional volume of derivatives remaining under these long-term contracts as of March 31, 2016 was approximately 457,000 megawatt hours. The accounting guidance for fair value measurements applies to all financial assets and financial liabilities that are being measured and reported on a fair value basis. Under the accounting guidance, GSWC makes fair value measurements that are classified and disclosed in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; or Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). To value the contract, Registrant applies the Black-76 model, utilizing various inputs that include quoted market prices for energy over the duration of the contract. The market prices used to determine the fair value for this derivative instrument were estimated based on independent sources such as broker quotes and publications that are not observable in or corroborated by the market. Registrant received one broker quote to determine the fair value of its derivative instrument. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. Accordingly, the valuation of the derivative on Registrant’s purchased power contract has been classified as Level 3 for all periods presented. The following table presents changes in the fair value of GSWC’s Level 3 derivatives for the three months ended March 31, 2016 and 2015:
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Fair Value of Financial Instruments: |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments: For cash and cash equivalents, accounts receivable, accounts payable and short-term debt, the carrying amount is assumed to approximate fair value due to the short-term nature of the amounts. Investments held in a Rabbi Trust for the supplemental executive retirement plan are measured at fair value and totaled $10.0 million as of March 31, 2016. All equity investments in the Rabbi Trust are Level 1 investments in mutual funds. The investments held in the Rabbi Trust are included in Other Property and Investments on Registrant's balance sheets. The table below estimates the fair value of long-term debt held by GSWC. The fair values as of March 31, 2016 and December 31, 2015 were determined using rates for similar financial instruments of the same duration utilizing Level 2 methods and assumptions. The interest rates used for the March 31, 2016 valuation decreased as compared to December 31, 2015, increasing the fair value of long-term debt as of March 31, 2016. Changes in the assumptions will produce differing results.
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Income Taxes: |
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Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: As a regulated utility, GSWC treats certain temporary differences as flow-through adjustments in computing its income tax provision consistent with the income tax approach approved by the CPUC for ratemaking purposes. Flow-through adjustments increase or decrease tax expense in one period, with an offsetting decrease or increase occurring in another period. Giving effect to these temporary differences as flow-through adjustments typically results in a greater variance between the effective tax rate (“ETR”) and the statutory federal income tax rate in any given period than would otherwise exist if GSWC were not required to account for its income taxes as a regulated enterprise. The GSWC ETR was 37.7% and 41.1% for the three months ended March 31, 2016 and 2015, respectively. The GSWC ETRs deviate from the statutory rate primarily due to state tax and differences between book and taxable income that are treated as flow-through adjustments in accordance with regulatory requirements (principally plant-, rate-case- and compensation-related items). The ETR at the AWR consolidated level may also fluctuate as a result of certain permanent differences recorded at AWR (parent) and ASUS and its subsidiaries, as well as state taxes recorded at AWR (parent) and ASUS and its subsidiaries (where the amounts of state taxes vary among the jurisdictions in which they operate). Changes in Tax Law: In December 2015, the Protecting Americans From Tax Hikes Act of 2015 extended bonus depreciation for qualifying property through 2019. For 2015 through 2017, bonus depreciation was extended at a 50% rate. For 2018-2019, bonus depreciation will be phased down to 40% and 30%, respectively. Although the change in law reduces AWR’s current taxes payable over these years, it does not reduce its total income tax expense or ETR. |
Employee Benefit Plans: |
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Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans: The components of net periodic benefit costs, before allocation to the overhead pool, for Registrant’s pension plan, postretirement plan and Supplemental Executive Retirement Plan ("SERP") for the three months ended March 31, 2016 and 2015 are as follows:
Registrant expects to contribute approximately $5.5 million to its pension plan during 2016. During 2015, Registrant updated key assumptions used for the valuation of the pension, post-retirement and supplemental executive retirement plans. These updates included: (i) an increase in the discount rates; (ii) updates in demographic assumptions, such as retirement and termination rates, to reflect recent changes in participant behavior, and (iii) salary increases based on Registrant’s recent and future expected experience. As a result of these updates in actuarial assumptions, as well as the pension plan closure to new employees hired after December 31, 2010, net periodic benefit costs decreased for the three months ended March 31, 2016 as compared to the same period in 2015. Regulatory Adjustment: As authorized by the CPUC in the most recent water and electric general rate case decisions, GSWC utilizes two-way balancing accounts for its water and electric regions and the general office to track differences between the forecasted annual pension expenses in rates or expected to be in rates and the actual annual expense recorded by GSWC in accordance with the accounting guidance for pension costs. As of March 31, 2016, GSWC has a total $1.8 million net under-collection in the two-way pension balancing accounts included as part of the pension regulatory asset (Note 2). |
Contingencies: |
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Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies: Condemnation of Properties: The laws of the State of California provide for the acquisition of public utility property by governmental agencies through their power of eminent domain, also known as condemnation, where doing so is necessary and in the public interest. In addition, these laws provide that the owner of utility property (i) may contest whether the condemnation is actually necessary and in the public interest, and (ii) is entitled to receive the fair market value of its property if the property is ultimately taken. Claremont System: In December 2014, the City of Claremont filed a complaint in eminent domain against GSWC. GSWC plans to vigorously defend against the eminent domain action. The trial determining the City’s rights to seize the system by eminent domain is scheduled to begin on June 13, 2016. At this time, management cannot predict the outcome of the eminent domain proceeding. The Claremont water system has a net book value of approximately $49.1 million. GSWC serves approximately 11,000 customers in Claremont. Ojai System: In March 2013, Casitas Municipal Water District ("CMWD") passed resolutions under the Mello-Roos Communities Facilities District Act of 1982 ("Mello-Roos Act") authorizing the establishment of a Community Facilities District, and the issuance of bonds to finance the potential acquisition of GSWC’s Ojai system through eminent domain. In February 2016, CMWD made an offer to acquire GSWC's water system servicing Ojai. GSWC rejected the offer and informed CMWD that the system is not for sale. At this time, management cannot predict the outcome of the eminent domain proceeding; however, management believes that it is likely that CMWD will file an eminent domain lawsuit in the near future. In April 2016, CMWD adopted a resolution of necessity to acquire the water system. GSWC serves approximately 3,000 customers in Ojai. Environmental Clean-Up and Remediation: GSWC has been involved in environmental remediation and cleanup at a plant site ("Chadron Plant") that contained an underground storage tank which was used to store gasoline for its vehicles. This tank was removed from the ground in July 1990 along with the dispenser and ancillary piping. Since then, GSWC has been involved in various remediation activities at this site. Analysis indicates that offsite monitoring wells may also be necessary to document effectiveness of remediation. As of March 31, 2016, the total spent to clean-up and remediate GSWC’s plant facility was approximately $5 million, of which $1.5 million has been paid by the State of California Underground Storage Tank Fund. Amounts paid by GSWC have been included in rate base and approved by the CPUC for recovery. As of March 31, 2016, GSWC has a regulatory asset and an accrued liability for the estimated additional cost of $1.4 million to complete the cleanup at the site. The estimate includes costs for two years of continued activities of groundwater cleanup and monitoring, future soil treatment and site-closure-related activities. The ultimate cost may vary as there are many unknowns in remediation of underground gasoline spills and this is an estimate based on currently available information. Management also believes it is probable that the estimated additional costs will be approved in rate base by the CPUC. Other Litigation: Registrant is also subject to other ordinary routine litigation incidental to its business. Management believes that rate recovery, proper insurance coverage and reserves are in place to insure against property, general liability and workers’ compensation claims incurred in the ordinary course of business. Registrant is unable to predict an estimate of the loss, if any, resulting from any pending suits or administrative proceedings. |
Business Segments: |
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Business Segments | Business Segments: AWR has three reportable segments, water, electric and contracted services, whereas GSWC has two segments, water and electric. On a stand-alone basis, AWR has no material assets other than its investments in its subsidiaries on a stand-alone basis. All activities of GSWC, a rate-regulated utility, are geographically located within California. Activities of ASUS and its subsidiaries are conducted in California, Georgia, Maryland, New Mexico, North Carolina, South Carolina, Texas and Virginia. Each of ASUS’s wholly-owned subsidiaries is regulated by the state in which the subsidiary primarily conducts water and/or wastewater operations. Fees charged for operations and maintenance and renewal and replacement services are based upon the terms of the contracts with the U.S. government which have been filed, as appropriate, with the commissions in the states in which ASUS’s subsidiaries are incorporated. The tables below set forth information relating to GSWC’s operating segments, ASUS and its subsidiaries and other matters. Total assets by segment are not presented below, as certain of Registrant’s assets are not tracked by segment. The utility plant amounts are net of respective accumulated provisions for depreciation. Capital additions reflect capital expenditures paid in cash and exclude U.S. government-funded and third-party prime contractor funded capital expenditures for ASUS and property installed by developers and conveyed to GSWC.
(1) Depreciation computed on GSWC’s transportation equipment is recorded in other operating expenses and totaled $175,000 and $223,000 for the three months ended March 31, 2016 and 2015, respectively. The following table reconciles total utility plant (a key figure for rate-making) to total consolidated assets (in thousands):
(2) Total consolidated assets shown as of March 31, 2015 exclude $4.9 million of debt issuance costs, (except for credit facility costs), which were previously reported as "Other assets" prior to adoption of Accounting Standard Update 2015-03, Simplifying the Presentation of Debt Issuance Costs as disclosed in Note 1. Credit facility costs continue to be reported as "Other assets." |
Summary of Significant Accounting Policies: (Policies) |
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Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations: American States Water Company (“AWR”) is the parent company of Golden State Water Company (“GSWC”) and American States Utility Services, Inc. (“ASUS”) (and its subsidiaries, Fort Bliss Water Services Company (“FBWS”), Terrapin Utility Services, Inc. (“TUS”), Old Dominion Utility Services, Inc. (“ODUS”), Palmetto State Utility Services, Inc. (“PSUS”) and Old North Utility Services, Inc. (“ONUS”)). The subsidiaries of ASUS are collectively referred to as the “Military Utility Privatization Subsidiaries.” GSWC is a public utility engaged principally in the purchase, production, distribution and sale of water in California serving approximately 260,000 customers. GSWC also distributes electricity in several San Bernardino County mountain communities in California serving approximately 24,000 customers through its Bear Valley Electric Service (“BVES”) division. Although Registrant has a diversified base of residential, industrial and other customers, revenues derived from commercial and residential water customers accounted for approximately 90% of total water revenues during the three months ended March 31, 2016 and 2015. The California Public Utilities Commission (“CPUC”) regulates GSWC’s water and electric businesses in matters including properties, rates, services, facilities and transactions by GSWC with its affiliates. AWR’s assets and operating income are primarily those of GSWC. ASUS, through its wholly owned subsidiaries, operates, maintains and performs construction activities (including renewal and replacement capital work) on water and/or wastewater systems at various United States military bases pursuant to 50-year firm fixed-price contracts. These contracts are subject to periodic price redeterminations or economic price adjustments and modifications for changes in circumstances, changes in laws and regulations and additions to the contract value for new construction of facilities at the military bases. There is no direct regulatory oversight by the CPUC over AWR or the operations, rates or services provided by ASUS or any of its wholly owned subsidiaries. Basis of Presentation: The consolidated financial statements and notes thereto are presented in a combined report filed by two separate Registrants: AWR and GSWC. References in this report to “Registrant” are to AWR and GSWC, collectively, unless otherwise specified. AWR owns all of the outstanding Common Shares of GSWC and ASUS. ASUS owns all of the outstanding Common Shares of the Military Utility Privatization Subsidiaries. The consolidated financial statements of AWR include the accounts of AWR and its subsidiaries, all of which are wholly owned. These financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. Inter-company transactions and balances have been eliminated in the AWR consolidated financial statements. The consolidated financial statements included herein have been prepared by Registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The December 31, 2015 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles ("GAAP") in the United States of America. The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. In the opinion of management, all adjustments consisting of normal, recurring items and estimates necessary for a fair statement of the results for the interim periods have been made. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Form 10-K for the year ended December 31, 2015 filed with the SEC. |
GSWC's Related Party Transactions | GSWC's Related Party Transactions: GSWC and ASUS provide and/or receive various support services to and from their parent, AWR, and among themselves. GSWC also allocates certain corporate office administrative and general costs to its affiliate, ASUS, using allocation factors approved by the CPUC. During the three months ended March 31, 2016 and 2015, GSWC allocated to ASUS approximately $1.0 million and $707,000, respectively, of corporate office administrative and general costs. In addition, AWR has a $100.0 million syndicated credit facility. AWR borrows under this facility and provides funds to its subsidiaries, including GSWC, in support of their operations. The interest rate charged to GSWC and ASUS is sufficient to cover AWR’s interest cost under the credit facility. In October 2015, AWR issued interest bearing promissory notes (the "Notes") to GSWC and ASUS for $40 million and $10 million, respectively, which expire on May 23, 2018. Under the terms of these Notes, AWR may borrow from GSWC and ASUS amounts up to $40 million and $10 million, respectively, for working capital purposes. AWR agrees to pay any unpaid principal amounts outstanding under these notes, plus accrued interest. As of March 31, 2016, there were no amounts outstanding under these Notes. |
Sales and Use Taxes | Sales and Use Taxes: GSWC bills certain sales and use taxes levied by state or local governments to its customers. Included in these sales and use taxes are franchise fees, which GSWC pays to various municipalities (based on ordinances adopted by these municipalities) in order to use public rights of way for utility purposes. GSWC bills these franchise fees to its customers based on a CPUC-authorized rate for each rate-making area as applicable. These franchise fees, which are required to be paid regardless of GSWC’s ability to collect them from its customer, are accounted for on a gross basis. GSWC’s franchise fees billed to customers and recorded as operating revenue were approximately $867,000 and $871,000 for the three months ended March 31, 2016 and 2015, respectively. When GSWC acts as an agent, and the tax is not required to be remitted if it is not collected from the customer, the taxes are accounted for on a net basis. Depending on the states in which their operations are conducted, the Military Utility Privatization Subsidiaries are also subject to certain state non-income tax assessments generally computed on a “gross receipts” or “gross revenues” basis. These non-income tax assessments are required to be paid regardless of whether the U.S. government reimburses these assessments under the 50-year contracts. The non-income tax assessments are accounted for on a gross basis and totaled $62,000 and $32,000 during the three months ended March 31, 2016 and 2015, respectively. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements: In May 2014, the Financial Accounting Standards Board ("FASB") issued updated accounting guidance on revenue recognition. The guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. Under this guidance, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what the entity expects in exchange for the goods or services. The guidance also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and adoption is not permitted earlier than the original effective date, that is, no earlier than 2017. The guidance allows entities to select one of two methods of adoption, either the full retrospective approach, meaning the guidance would be applied to all periods presented, or modified retrospective approach, meaning the cumulative effect of applying the guidance would be recognized as an adjustment to opening retained earnings at January 1, 2018, along with providing certain additional disclosures. Registrant will adopt this guidance in the fiscal year beginning January 1, 2018. Management has not yet selected a transition method nor has it determined the effect of the standard on the Company's ongoing financial reporting. In April 2015, the FASB issued Accounting Standard Update 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, rather than as an asset. The standard does not affect the recognition and measurement of debt issuance costs. This guidance was adopted January 1, 2016. Accordingly, as of March 31, 2016 and December 31, 2015, Registrant had debt issuance costs, excluding credit facility costs, of $4.5 million and $4.6 million, respectively, reflected in "Long-term debt." Prior to the adoption of this new guidance, debt issuance costs, excluding credit facility costs, of $4.6 million as of December 31, 2015 were reported in noncurrent "Other Assets." On February 25, 2016, the FASB issued a new lease accounting standard, Leases (ASC 842). Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). Extensive quantitative and qualitative disclosures, including significant judgments made by management, will be required in order to provide greater insight into the extent of revenue and expense recognized, and expected to be recognized, from existing contracts. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management has not yet determined the effect of the standard on the Company's ongoing financial reporting. On March 30, 2016, the FASB issued Accounting Standard Update 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC Topic 718, Compensation - Stock Compensation. Under the new guidance, the tax effects related to share-based payments at settlement (or expiration) will be required to be recorded through the income statement rather than through equity, further increasing the volatility of income tax expense. The new standard also removes the requirement to delay recognition of a windfall tax benefit until an employer reduces its current taxes payable. It also permits entities to make an accounting policy election for the impact of forfeitures on the recognition of expense for shared-based payment awards. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Management has not yet determined the effect of the standard on the Company's ongoing financial reporting. |
Regulatory Matters: (Tables) |
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Schedule of regulatory assets, less regulatory liabilities in the consolidated balance sheets for continuing operations | Regulatory assets, less regulatory liabilities, included in the consolidated balance sheets are as follows:
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Earnings per Share/Capital Stock: (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of Registrant's net income and weighted average Common Shares outstanding for calculating basic net income per share | The following is a reconciliation of Registrant’s net income and weighted average Common Shares outstanding used for calculating basic net income per share:
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Schedule of reconciliation of Registrant's net income and weighted average Common Shares outstanding for calculating diluted net income per share | The following is a reconciliation of Registrant’s net income and weighted average Common Shares outstanding for calculating diluted net income per share:
(1) In applying the treasury stock method of reflecting the dilutive effect of outstanding stock-based compensation in the calculation of diluted EPS, 142,402 and 198,764 stock options at March 31, 2016 and 2015, respectively, were deemed to be outstanding in accordance with the accounting guidance on earnings per share. All of the 215,129 and 226,319 restricted stock units at March 31, 2016 and 2015, respectively, were included in the calculation of diluted EPS for the three months ended March 31, 2016 and 2015. |
Derivative Instruments (Tables) |
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents changes in the fair value of GSWC’s Level 3 derivatives for the three months ended March 31, 2016 and 2015:
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Fair Value of Financial Instruments: (Tables) |
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GSWC | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of financial instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of estimates of the fair value of long-term debt | The table below estimates the fair value of long-term debt held by GSWC. The fair values as of March 31, 2016 and December 31, 2015 were determined using rates for similar financial instruments of the same duration utilizing Level 2 methods and assumptions. The interest rates used for the March 31, 2016 valuation decreased as compared to December 31, 2015, increasing the fair value of long-term debt as of March 31, 2016. Changes in the assumptions will produce differing results.
(1) Excludes debt issuance costs and redemption premiums. |
Employee Benefit Plans: (Tables) |
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Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of net periodic benefit costs, before allocation to the overhead pool, for Registrant's pension plan, postretirement plan, and SERP | The components of net periodic benefit costs, before allocation to the overhead pool, for Registrant’s pension plan, postretirement plan and Supplemental Executive Retirement Plan ("SERP") for the three months ended March 31, 2016 and 2015 are as follows:
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Business Segments: (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reporting segments information | The tables below set forth information relating to GSWC’s operating segments, ASUS and its subsidiaries and other matters. Total assets by segment are not presented below, as certain of Registrant’s assets are not tracked by segment. The utility plant amounts are net of respective accumulated provisions for depreciation. Capital additions reflect capital expenditures paid in cash and exclude U.S. government-funded and third-party prime contractor funded capital expenditures for ASUS and property installed by developers and conveyed to GSWC.
(1) Depreciation computed on GSWC’s transportation equipment is recorded in other operating expenses and totaled $175,000 and $223,000 for the three months ended March 31, 2016 and 2015, respectively. |
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Schedule of reconciliation of total utility plant (a key figure for rate-making) to total consolidated assets | The following table reconciles total utility plant (a key figure for rate-making) to total consolidated assets (in thousands):
(2) Total consolidated assets shown as of March 31, 2015 exclude $4.9 million of debt issuance costs, (except for credit facility costs), which were previously reported as "Other assets" prior to adoption of Accounting Standard Update 2015-03, Simplifying the Presentation of Debt Issuance Costs as disclosed in Note 1. Credit facility costs continue to be reported as "Other assets." |
Regulatory Matters: CPUC Rehearing Matter and Procurement Audits (Details) - Audit |
1 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2011 |
Dec. 31, 2014 |
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Regulatory matters: | ||
Separate independent audits | 3 | |
Number of Years of Separate Independent Audits of Procurement Practices Agreed under Settlement Agreement | 10 years | |
GOLDEN STATE WATER COMPANY | ||
Regulatory matters: | ||
Period of Separate Independent Audits of Procurement Practices Covered by Report | 20 years |
Earnings per Share/Capital Stock: (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|||
Basic | ||||
Net income | $ 10,150 | $ 12,149 | ||
Less: Distributed earnings to common shareholders | 8,181 | 8,138 | ||
Less: Distributed earnings to participating securities | 45 | 45 | ||
Undistributed earnings | 1,924 | 3,966 | ||
Undistributed earnings allocated to common shareholders | 1,914 | 3,945 | ||
Undistributed earnings allocated to participating securities | 10 | 21 | ||
Total income available to common shareholders, basic | $ 10,095 | $ 12,083 | ||
Weighted average Common Shares outstanding, basic (in shares) | 36,521 | 38,205 | ||
Basic earnings per Common Share (in dollars per share) | $ 0.28 | $ 0.32 | ||
Diluted | ||||
Total income available to common shareholders, basic | $ 10,095 | $ 12,083 | ||
Undistributed earnings for dilutive stock-based awards | 10 | 21 | ||
Total common shareholders earnings, diluted | $ 10,105 | $ 12,104 | ||
Weighted average Common Shares outstanding, basic (in shares) | 36,521 | 38,205 | ||
Stock-based compensation (in shares) | [1] | 176 | 203 | |
Weighted average common shares outstanding, diluted (in shares) | 36,697 | 38,408 | ||
Diluted earnings per Common Share (in dollars per share) | $ 0.28 | $ 0.32 | ||
|
Earnings per Share/Capital Stock: (Details 2) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 27, 2014 |
|
Additional disclosure | |||
Options outstanding (in shares) | 142,402 | 198,764 | |
Stock options not included in the calculation of diluted EPS (in shares) | 0 | ||
Anti-dilutive stock options not included in the computation of diluted EPS (in shares) | 0 | 0 | |
Common Shares issued under DRP and the 2000 and 2008 Employee Plans | 52,153 | 47,422 | |
Value of Common Shares issued under DRP and the 2000 and 2008 Employee Plans | $ 126 | $ 292 | |
Dividends paid | $ 8,181 | $ 8,155 | |
Quarterly dividends paid, per share of common stock (in dollars per share) | $ 0.224 | $ 0.213 | |
Restricted Stock Units | |||
Additional disclosure | |||
Restricted stock units outstanding (in shares) | 215,129 | 226,319 | |
AWR | |||
Additional disclosure | |||
Authorized shares to be repurchased | 1,250,000.00 | ||
AWR | |||
Additional disclosure | |||
Common Shares repurchased in the open market under DRP and 401(k) Plan | 356,769 |
Derivative Instruments (Details) - GOLDEN STATE WATER COMPANY MWh in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016
USD ($)
MWh
|
Mar. 31, 2015
USD ($)
|
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Description of derivative activity volume | MWh | 457 | |
Commodity Contract | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Number of broker quotes received to determine fair value of derivative instrument | 1 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value at end of the period | $ (7,053) | $ (3,339) |
Unrealized loss on purchased power contracts | (192) | (2,837) |
Fair value at end of the period | $ (7,245) | $ (6,176) |
Minimum | Commodity Contract | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Term of derivative contract | 3 years | |
Maximum | Commodity Contract | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Term of derivative contract | 5 years |
Fair Value of Financial Instruments: (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
GSWC | Carrying Amount | ||
Financial liabilities: | ||
Long-term debt-GSWC | $ 325,776 | $ 325,853 |
GSWC | Fair Value | ||
Financial liabilities: | ||
Long-term debt-GSWC | 418,104 | $ 403,844 |
Mutual Funds | Level 1 | ||
Fair value of financial instruments | ||
Investments | $ 10,000 |
Income Taxes: (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
GSWC | ||
Effective income tax rate | ||
ETRs (as a percent) | 37.70% | 41.10% |
Business Segments: (Details 2) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
Mar. 31, 2015 |
---|---|---|---|
Details of reportable segment | |||
Unamortized Debt Issuance Expense | $ 4,500 | $ 4,600 | $ 4,900 |
Total utility plant | 1,079,318 | 1,060,794 | 1,007,563 |
Other assets | 289,573 | 354,939 | |
Total Assets | 1,368,891 | 1,343,959 | $ 1,362,502 |
GOLDEN STATE WATER COMPANY | |||
Details of reportable segment | |||
Total utility plant | 1,074,398 | 1,056,116 | |
Total Assets | $ 1,296,037 | $ 1,271,879 |
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