SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended ~~March~~September 3130, ~~2013~~2015 or

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from to

Commission file number 001-14431

American States Water Company

(Exact Name of Registrant as Specified in Its Charter)

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)

630 E. Foothill Blvd, San Dimas, CA		91773-1212
(Address of Principal Executive Offices)		(Zip Code)

(909) 394-3600

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Commission file number 001-12008

Golden State Water Company

(Exact Name of Registrant as Specified in Its Charter)

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)

630 E. Foothill Blvd, San Dimas, CA		91773-1212
(Address of Principal Executive Offices)		(Zip Code)

(909) 394-3600

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

American States Water Company Yes x No o¨ Golden State Water Company Yes x No o¨

Indicate by check mark whether Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or such shorter period that the Registrant was required to submit and post such files).

~~American~~Table ~~States~~of ~~Water Company Yes x No o Golden State Water Company Yes x No o~~Contents



American States Water Company		Yes x No ¨
Golden State Water Company		Yes x No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

American States Water Company

~~American~~Large ~~States~~accelerated ~~Water~~filer ~~Company~~x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨

Golden State Water Company

Large accelerated filer x¨ Accelerated filer o¨ Non-accelerated filer ox Smaller reporting company o¨

Golden State Water Company

Large accelerated filer o Accelerated filer o Non-accelerated filer x Smaller reporting company o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)



American States Water Company		Yes ¨ Nox
Golden State Water Company		Yes ¨ Nox

As of ~~May~~November 72, ~~2013~~2015, the number of Common Shares outstanding, of American States Water Company was 1936,~~284~~728,~~804~~248 shares. As of ~~May~~November 72, ~~2013~~2015, all of the 146 outstanding Common Shares of Golden State Water Company were owned by American States Water Company.

Golden State Water Company meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this Form, in part, with the reduced disclosure format for Golden State Water Company.

Table of Contents

AMERICAN STATES WATER COMPANY

and

GOLDEN STATE WATER COMPANY

FORM 10-Q

INDEX

Part I	Financial Information
Item 1:	Financial Statements	1
	Consolidated Balance Sheets of American States Water Company as of March 31, 2013 and December 31, 2012	4
	Consolidated Balance Sheets of American States Water Company as of September 30, 2015 and December 31, 2014	4
	Consolidated Statements of Income of American States Water Company for the Three Months Ended March 31, 2013 and 2012	6
	Consolidated Statements of Income of American States Water Company for the Three Months Ended September 30, 2015 and 2014	6
	Consolidated Statements of Cash Flow of American States Water Company for the Three Months Ended March 31, 2013 and 2012	7
	Consolidated Statements of Income of American States Water Company for the Nine Months Ended September 30, 2015 and 2014	7
	Balance Sheets of Golden State Water Company as of March 31, 2013 and December 31, 2012	8
	Consolidated Statements of Cash Flow of American States Water Company for the Nine Months Ended September 30, 2015 and 2014	8
	Statements of Income of Golden State Water Company for the Three Months Ended March 31, 2013 and 2012	10
	Balance Sheets of Golden State Water Company as of September 30, 2015 and December 31, 2014	9
	Statements of Cash Flow of Golden State Water Company for the Three Months Ended March 31, 2013 and 2012	11
	Statements of Income of Golden State Water Company for the Three Months Ended September 30, 2015 and 2014	11
	Notes to Consolidated Financial Statements	12
	Statements of Income of Golden State Water Company for the Nine Months Ended September 30, 2015 and 2014	12
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Statements of Cash Flow of Golden State Water Company for the Nine Months Ended September 30, 2015 and 2014	13
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	40
	Notes to Consolidated Financial Statements	14
Item 4:	Controls and Procedures	40
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	52
Item 4:	Controls and Procedures	52
Part II	Other Information
Item 1:	Legal Proceedings	4153
Item 1A:	Risk Factors	4153
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	4153
Item 3:	Defaults Upon Senior Securities	4153
Item 4:	Mine Safety Disclosure	4153
Item 5:	Other Information	4253
Item 6:	Exhibits	4253
	Signatures	4558

Table of Contents

PART I

Item 1. Financial Statements

General

The basic financial statements included herein have been prepared by Registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.

Certain information and footnote disclosures normally included in financial statements, prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments consisting of normal recurring items and estimates necessary for a fair statement of results for the interim period have been made.

It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto in the latest Annual Report on Form 10-K of American States Water Company and its wholly owned subsidiary, Golden State Water Company.

Filing Format

American States Water Company (~~hereinafter~~ “AWR”) is the parent company of Golden State Water Company (~~hereinafter~~ “GSWC”) and American States Utility Services, Inc. ~~(hereinafter “ASUS”)~~ and its subsidiaries (“ASUS”).

This quarterly report on Form 10-Q is a combined report being filed by two separate Registrants: AWR and GSWC. For more information, please see Note 1 of the Notes to Consolidated Financial Statements and the heading entitled General in Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations. References in this report to “Registrant” are to AWR and GSWC collectively, unless otherwise specified. GSWC makes no representations as to the information contained in this report ~~relating~~other tothan ~~AWR~~with ~~and~~respect ~~its~~to ~~subsidiaries, other than GSWC~~itself.

Forward-Looking Information

This Form 10-Q and the documents incorporated herein contain forward-looking statements intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current estimates, expectations and projections about future events and assumptions regarding these events and include statements regarding management’s goals, beliefs, plans or current expectations, taking into account the information currently available to management. Forward-looking statements are not statements of historical facts. For example, when we use words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “may” and other words that convey uncertainty of future events or outcomes, we are making forward-looking statements. We are not able to predict all the factors that may affect future results. We caution you that any forward-looking statements made by us are not guarantees of future performance and ~~those~~the actual results may differ materially from those in our forward-looking statements. Some of the factors that could cause future results to differ materially from those expressed or implied by our forward-looking statements, or from historical results, include, but are not limited to:

~~· The~~• the outcome of pending and future regulatory, legislative or other proceedings, investigations or audits, including decisions in ~~our~~GSWC's general rate cases and the results of independent audits of ~~our~~GSWC's construction contracting procurement practices or other independent audits of our costs;

~~· Changes~~• changes in the policies and procedures of the California Public Utilities Commission (“"CPUC”");

~~· Timeliness~~• timeliness of CPUC action on rates;

~~· Our~~• ~~ability~~availability toof ~~efficiently~~water ~~manage~~supplies, ~~capital~~which ~~expenditures~~may ~~and~~be ~~operating~~adversely ~~and~~affected ~~maintenance~~by ~~expenses~~the ~~within~~California ~~CPUC~~drought, ~~authorized~~changes ~~levels~~in weather patterns in the West, contamination, and ~~timely~~court ~~recovery~~decisions or other governmental actions restricting the use of ~~our~~water ~~costs~~from ~~through~~the ~~rates~~Colorado River, the California State Water Project, and/or pumping of groundwater;

~~· The~~• ~~impact~~our ofability ~~increasing~~to ~~opposition~~efficiently tomanage GSWC ~~rate~~capital ~~increases~~expenditures onand ~~our~~operating ~~ability~~and tomaintenance ~~recover~~expenses ~~our~~within ~~costs~~CPUC ~~through~~authorized ~~rates~~levels and ontimely ~~the~~recovery ~~size~~ of our ~~customer~~costs ~~base~~through rates;

~~· Our~~• ~~ability~~the impact of opposition to ~~forecast~~GSWC ~~the~~rate ~~costs~~increases ofon ~~maintaining~~our ~~GSWC’s~~ability ~~aging~~to ~~water~~recover ~~and~~our ~~electric~~costs ~~infrastructure~~through rates;

1• the impact of condemnation actions on the size of our customer base;

~~Table of Contents~~1

~~· Our~~Table ~~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~~Contents

~~· Changes~~• inour ~~accounting~~ability ~~valuations~~to ~~and~~forecast ~~estimates,~~the ~~including~~costs ~~changes resulting from changes in our assessment~~ of ~~anticipated~~maintaining ~~recovery~~GSWC’s ofaging ~~regulatory~~water ~~assets, liabilities~~ and ~~revenues~~electric ~~subject to refund or regulatory disallowances~~infrastructure;

~~· Changes~~• inour ~~environmental~~ability ~~laws~~to ~~and~~recover ~~water~~increases ~~and~~in ~~wastewater~~permitting ~~quality~~costs ~~requirements~~ and ~~increases~~ in costs associated with negotiating and complying with ~~these~~the ~~laws~~terms of our franchise agreements with cities and ~~requirements~~counties and other demands made upon us by the cities and counties in which GSWC operates;

~~· Availability~~• ~~of water supplies, which may be adversely affected by~~ changes in ~~weather~~accounting ~~patterns,~~valuations ~~contamination~~ and ~~court~~estimates, ~~decisions~~including orchanges ~~other~~resulting ~~governmental~~from ~~actions~~our ~~restricting~~assessment ~~use~~ of ~~water~~anticipated ~~from~~recovery ~~the Colorado River, transportation~~ of ~~water to~~ GSWC’'s ~~service~~regulatory ~~areas~~assets, ~~through~~liabilities ~~the~~and ~~California~~revenues ~~State~~subject ~~Water~~to ~~Project~~refund or ~~pumping~~regulatory ~~of groundwater~~disallowances;

~~· Our~~• ~~ability~~changes toin ~~obtain~~environmental ~~adequate,~~laws ~~reliable~~ and ~~cost-effective~~water ~~supplies~~and ofwastewater ~~chemicals,~~quality ~~electricity,~~requirements ~~fuel, water~~ and ~~other~~increases ~~raw~~in ~~materials~~costs ~~that~~associated ~~are~~with ~~needed~~complying ~~for~~with ~~our~~these ~~water~~laws and ~~wastewater operations~~requirements;

~~· Our~~• our ability to ~~recover~~obtain ~~the~~adequate, ~~costs~~reliable ~~associated~~and ~~with~~cost-effective ~~the~~supplies ~~contamination~~ of ~~GSWC’s~~chemicals, ~~groundwater~~electricity, ~~supplies~~fuel, ~~from~~water ~~parties~~and ~~responsible~~other ~~for~~raw ~~the~~materials ~~contamination~~that orare ~~through~~needed ~~the~~for ~~ratemaking~~our ~~process~~water and ~~the~~wastewater ~~time and expense incurred by us in obtaining recovery of such costs~~operations;

~~· Adequacy~~• of our ~~power~~ability ~~supplies~~to ~~for~~recover the costs associated with the contamination of GSWC’s ~~Bear~~groundwater ~~Valley~~supplies ~~Electric~~from ~~Service~~parties ~~division~~responsible ~~and~~for the ~~extent~~contamination toor ~~which~~through wethe ~~can~~ratemaking ~~manage~~process, and ~~respond~~the totime ~~the~~and ~~volatility~~expense ofincurred ~~electric~~by ~~and~~us ~~natural~~in ~~gas~~obtaining ~~prices~~recovery of such costs;

~~· Our~~• ~~ability~~adequacy of our electric division's power supplies and the extent to ~~comply~~which ~~with~~we can manage and respond to the ~~CPUC’s~~volatility ~~renewable~~of ~~energy~~electric ~~procurement~~and ~~requirements~~natural gas prices;

~~· Changes~~• inour ~~GSWC~~electric ~~customer~~division's ~~demand~~ability ~~due~~ to ~~unanticipated~~comply ~~population~~with ~~growth~~the orCPUC’s ~~decline,~~renewable ~~changes~~energy inprocurement ~~climate conditions, general economic and financial market conditions, cost increases and conservation~~requirements;

~~· Changes~~• changes in ~~accounting~~GSWC ~~treatment~~long-term ~~for~~customer ~~regulated~~demand ~~utilities~~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;

~~· Changes~~• inchanges ~~estimates used~~ in ~~ASUS’s revenue recognition under the percentage of completion method of~~ accounting treatment for ~~our~~regulated ~~construction activities at our contracted services business~~utilities;

~~· Termination,~~• ineffects ~~whole~~of orchanges in ~~part, of our contracts to provide water and/~~or ~~wastewater~~interpretations ~~services at military bases for the convenience~~ of ~~the~~tax ~~U.S.~~laws, ~~government~~rates or ~~for default~~policies;

~~· Delays~~• changes in ~~filing~~estimates ~~for~~used orin ~~obtaining~~ASUS’s ~~redetermination~~revenue ofrecognition ~~prices~~under orthe ~~equitable~~percentage ~~adjustments~~of tocompletion ~~our~~method ~~prices~~of onaccounting ~~our~~for ~~contracts~~construction ~~to provide water and/or wastewater services at military bases~~activities;

~~· Disallowance~~• termination, in whole or in part, of ~~costs~~one onor more of our military utility privatization contracts to provide water and/or wastewater services at military bases asfor athe ~~result~~convenience of ~~audits,~~the ~~cost~~U.S. ~~review~~government or ~~investigations~~for ~~by contracting agencies~~default;

~~· Inaccurate~~• ~~assumptions~~termination ~~used~~of incontracts ~~preparing~~and ~~bids~~suspension or debarment for a period of time from contracting with the government due to violations of federal law or regulations in ~~our~~connection ~~contracted~~with ~~services~~ASUS's ~~business~~military utility privatization activities;

~~· Failure~~• ofdelays by the ~~collection~~U.S. orgovernment ~~sewage~~in ~~systems~~making ~~that~~timely wepayments ~~operate~~to onASUS for water and/or wastewater services at military bases ~~resulting~~as ina ~~untreated~~result ~~wastewater~~of orfiscal ~~contaminants~~uncertainties ~~spilling~~over ~~into~~the ~~nearby~~funding ~~properties,~~of ~~streams~~the orU.S. ~~rivers~~government;

~~· Failure~~• delays in obtaining redetermination of prices or equitable adjustments to ~~comply~~our ~~with~~prices ~~the~~for ~~terms~~one or more of our ~~military~~contracts ~~privatization~~to ~~contracts~~provide water and/or wastewater services at military bases;

~~· Failure~~• disallowance of costs on any of our ~~subcontractors~~contracts to ~~perform~~provide ~~services~~water ~~for~~and/or uswastewater inservices ~~accordance~~at ~~with~~military ~~the~~bases ~~terms~~as a result of ~~our~~audits, ~~military~~cost ~~privatization~~reviews ~~contracts~~or investigations by contracting agencies;

~~· Implementation,~~• ~~maintenance~~inaccurate ~~and~~assumptions ~~upgrading~~used ofin preparing bids in our ~~information~~contracted ~~technology~~services ~~systems~~business;

~~· General~~• ~~economic~~failure ~~conditions~~of ~~which~~the ~~may~~wastewater ~~impact~~systems ~~our~~that ~~ability~~we tooperate ~~recover~~on ~~infrastructure~~military ~~investments~~bases ~~and~~resulting ~~operating~~in ~~costs~~untreated ~~from~~wastewater ~~customers~~or contaminants spilling into nearby properties, streams or rivers;

~~· Explosions,~~• ~~fires,~~failure ~~accidents,~~to ~~mechanical~~comply ~~breakdowns,~~with the ~~disruption~~terms of ~~information~~our 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 wastewater systems on military ~~bases~~privatization ~~under varying geographic conditions~~contracts;

Table of Contents

~~· The~~• ~~impact~~failure of ~~storms,~~any ~~earthquakes,~~subcontractors ~~floods,~~to ~~mudslides,~~perform ~~drought,~~services ~~wildfires,~~for ~~disease~~us ~~and~~in ~~similar~~accordance ~~natural~~with ~~disasters,~~the orterms ~~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~~military orprivatization ~~third parties on whom we rely~~contracts;

~~· Potential~~• ~~costs,~~issues ~~lost~~with ~~revenues~~the implementation, maintenance and/or ~~other~~upgrading ~~consequences resulting from misappropriation~~ of ~~assets~~our ~~or sensitive~~ information, ~~corruption~~technology ~~of data, or operational disruption in connection with a cyber attack or other cyber incident~~systems;

~~· Restrictive~~• ~~covenants~~general ineconomic ~~our~~conditions ~~debt~~which ~~instruments or changes to our credit ratings on current or future debt that~~ may ~~increase~~impact our ~~financing costs or affect our~~ ability to ~~borrow~~recover orinfrastructure ~~make~~investments ~~payments~~and onoperating ~~our~~costs ~~debt~~from customers;

~~· Our~~• ~~ability~~explosions, tofires, ~~access~~accidents, ~~capital~~mechanical ~~markets~~breakdowns, the disruption of information technology and ~~other~~telecommunication ~~sources~~systems, ofhuman ~~credit~~error and similar events that may occur while operating and maintaining water and electric systems in aCalifornia ~~timely~~or ~~manner~~operating and maintaining water and wastewater systems on ~~acceptable~~military ~~terms~~bases under varying geographic conditions;

~~Please~~• ~~consider~~the ~~our~~impact ~~forward-looking~~of ~~statements~~storms, inearthquakes, ~~light~~floods, ofmudslides, ~~these~~drought, ~~risks~~wildfires, ~~(which~~disease ~~are~~and ~~more~~similar ~~fully~~natural ~~disclosed~~disasters, inor ~~our~~acts ~~2012~~of ~~Annual~~terrorism ~~Report~~or onvandalism, ~~Form 10-K)~~that asaffect ~~you~~customer ~~read~~demand ~~this~~or ~~Form 10-Q. We~~that ~~qualify~~damage ~~all~~or ofdisrupt ~~our~~facilities, ~~forward-looking~~operations ~~statements~~or information technology systems owned by ~~these~~us, ~~cautionary~~our ~~statements.~~customers or third parties on whom we rely;

3• 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;

~~Table~~• ofrestrictive ~~Contents~~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

~~AMERICAN~~• ~~STATES~~our ~~WATER~~ability ~~COMPANY~~to access capital markets and other sources of credit in a timely manner on acceptable terms.

~~CONSOLIDATED~~Please ~~BALANCE~~consider ~~SHEETS~~our forward-looking statements in light of these risks (which are more fully disclosed in our 2014 Annual Report on Form 10-K) as you read this Form 10-Q. We qualify all of our forward-looking statements by these cautionary statements.

~~ASSETS~~3

~~(Unaudited)~~Table of Contents

(in thousands)	March 31, 2013			December 31, 2012
Property, Plant and Equipment
Regulated utility plant, at cost	$	1,367,474		$	1,351,086
Non utility property, at cost	9,329			9,021
Total	1,376,803			1,360,107
Less - Accumulated depreciation	(447,265		)	(442,316		)
Net property, plant and equipment	929,538			917,791
Other Property and Investments
Goodwill	1,116			1,116
Other property and investments	13,835			13,755
Total other property and investments	14,951			14,871
Current Assets
Cash and cash equivalents	32,794			23,486
Accounts receivable — customers (less allowance for doubtful accounts of $753 in 2013 and $797 in 2012)	17,315			19,491
Unbilled revenue	14,522			16,147
Receivable from the U.S. government (less allowance for doubtful accounts of $0 in 2013 and $8 in 2012)	5,377			12,905
Other accounts receivable (less allowance for doubtful accounts of $413 in 2013 and $423 in 2012)	5,467			7,062
Income taxes receivable	1,675			16,547
Materials and supplies, at average cost	7,210			5,348
Regulatory assets — current	34,376			32,336
Prepayments and other current assets	4,251			4,391
Costs and estimated earnings in excess of billings on uncompleted contracts	42,154			37,703
Deferred income taxes — current	8,731			8,617
Total current assets	173,872			184,033
Regulatory and Other Assets
Regulatory assets	150,853			143,679
Costs and estimated earnings in excess of billings on uncompleted contracts	1,065			436
Receivable from the U.S. government (less allowance for doubtful accounts of $0 in 2013 and 2012)	3,812			4,535
Deferred income taxes	11			11
Other	15,412			15,587
Total regulatory and other assets	171,153			164,248
Total Assets	$	1,289,514		$	1,280,943

AMERICAN STATES WATER COMPANY

~~The~~CONSOLIDATED ~~accompanying~~BALANCE ~~notes are an integral part of these consolidated financial statements~~SHEETS

4ASSETS

~~Table of Contents~~(Unaudited)

AMERICAN STATES WATER COMPANY



(in thousands)	September 30, 2015			December 31, 2014
Property, Plant and Equipment
Regulated utility plant, at cost	$	1,547,330		$	1,492,880
Non-utility property, at cost	11,078			10,879
Total	1,558,408			1,503,759
Less - Accumulated depreciation	(526,289		)	(500,239		)
Net property, plant and equipment	1,032,119			1,003,520

Other Property and Investments
Goodwill	1,116			1,116
Other property and investments	18,301			17,536
Total other property and investments	19,417			18,652

Current Assets
Cash and cash equivalents	27,254			75,988
Accounts receivable — customers (less allowance for doubtful accounts of $849 in 2015 and $803 in 2014)	22,112			18,814
Unbilled receivable	21,909			21,422
Receivable from the U.S. government	4,934			6,709
Other accounts receivable (less allowance for doubtful accounts of $129 in 2015 and $89 in 2014)	7,385			4,843
Income taxes receivable	174			20,993
Materials and supplies, at average cost	5,874			3,588
Regulatory assets — current	10,557			12,379
Prepayments and other current assets	3,931			2,745
Costs and estimated earnings in excess of billings on contracts	22,345			34,535
Deferred income taxes — current	8,988			7,435
Total current assets	135,463			209,451

Regulatory and Other Assets
Regulatory assets	144,800			118,829
Costs and estimated earnings in excess of billings on contracts	20,856			15,741
Other	9,509			12,105
Total regulatory and other assets	175,165			146,675

Total Assets	$	1,362,164		$	1,378,298

~~CONSOLIDATED~~The ~~BALANCE~~accompanying ~~SHEETS~~notes are an integral part of these consolidated financial statements

~~CAPITALIZATION AND LIABILITIES~~4

~~(Unaudited)~~Table of Contents

(in thousands)	March 31, 2013		December 31, 2012
Capitalization
Common shares, no par value	$	249,874	$	249,322
Earnings reinvested in the business	211,847		205,257
Total common shareholders’ equity	461,721		454,579
Long-term debt	332,446		332,463
Total capitalization	794,167		787,042
Current Liabilities
Long-term debt — current	3,383		3,328
Accounts payable	46,605		40,569
Income taxes payable	750		511
Accrued other taxes	4,125		8,167
Accrued employee expenses	10,952		9,919
Accrued interest	6,240		3,909
Unrealized loss on purchased power contracts	1,540		3,060
Billings in excess of costs and estimated earnings on uncompleted contracts	2,702		12,572
Other	13,547		11,662
Total current liabilities	89,844		93,697
Other Credits
Advances for construction	70,580		70,781
Contributions in aid of construction - net	109,923		106,450
Deferred income taxes	142,598		142,597
Unamortized investment tax credits	1,859		1,881
Accrued pension and other postretirement benefits	73,718		71,618
Other	6,825		6,877
Total other credits	405,503		400,204
Commitments and Contingencies (Note 8)	—		—
Total Capitalization and Liabilities	$	1,289,514	$	1,280,943

AMERICAN STATES WATER COMPANY

~~The~~CONSOLIDATED ~~accompanying~~BALANCE ~~notes are an integral part of these consolidated financial statements~~SHEETS

5CAPITALIZATION AND LIABILITIES

~~Table of Contents~~(Unaudited)

AMERICAN STATES WATER COMPANY



(in thousands)	September 30, 2015		December 31, 2014
Capitalization
Common shares, no par value	$	244,327	$	253,199
Earnings reinvested in the business	225,696		253,602
Total common shareholders’ equity	470,023		506,801
Long-term debt	325,550		325,798
Total capitalization	795,573		832,599

Current Liabilities
Notes payable to banks	15,000		—
Long-term debt — current	312		292
Accounts payable	46,517		41,855
Income taxes payable	2,858		638
Accrued other taxes	8,329		8,602
Accrued employee expenses	11,684		10,519
Accrued interest	6,282		3,549
Unrealized loss on purchased power contracts	7,246		3,339
Billings in excess of costs and estimated earnings on contracts	7,504		11,736
Other	18,244		18,760
Total current liabilities	123,976		99,290

Other Credits
Advances for construction	67,104		68,328
Contributions in aid of construction	116,207		116,629
Deferred income taxes	191,825		191,209
Unamortized investment tax credits	1,632		1,699
Accrued pension and other postretirement benefits	59,190		61,773
Other	6,657		6,771
Total other credits	442,615		446,409

Commitments and Contingencies (Note 8)

Total Capitalization and Liabilities	$	1,362,164	$	1,378,298

~~CONSOLIDATED~~The ~~STATEMENTS~~accompanying OFnotes ~~INCOME~~are an integral part of these consolidated financial statements

~~FOR THE THREE MONTHS~~5

~~ENDED~~Table ~~MARCH 31,~~of ~~2013 AND 2012~~Contents

~~(Unaudited)~~AMERICAN STATES WATER COMPANY

	Three Months Ended March 31,
(in thousands, except per share amounts)	2013			2012
Operating Revenues
Water	$	69,233		$	66,201
Electric	10,734			10,813
Contracted services	30,585			29,878
Total operating revenues	110,552			106,892
Operating Expenses
Water purchased	10,732			9,552
Power purchased for pumping	1,639			1,556
Groundwater production assessment	3,187			3,323
Power purchased for resale	3,680			3,191
Supply cost balancing accounts	1,371			3,437
Other operation expenses	5,454			7,426
Administrative and general expenses	17,907			16,829
Depreciation and amortization	9,816			10,490
Maintenance	3,934			3,331
Property and other taxes	4,148			4,105
ASUS construction expenses	20,733			20,285
Net gain on sale of property	(12		)	—
Total operating expenses	82,589			83,525
Operating Income	27,963			23,367
Other Income and Expenses
Interest expense	(5,778		)	(6,070		)
Interest income	187			215
Other, net	342			229
Total other income and expenses	(5,249		)	(5,626		)
Income from operations before income tax expense	22,714			17,741
Income tax expense	9,249			7,626
Net Income	$	13,465		$	10,115
Weighted Average Number of Common Shares Outstanding	19,265			18,831
Basic Earnings Per Common Share	$	0.69		$	0.53
Weighted Average Number of Diluted Shares	19,311			18,973
Fully Diluted Earnings Per Common Share	$	0.69		$	0.53
Dividends Declared Per Common Share	$	0.355		$	0.280

CONSOLIDATED STATEMENTS OF INCOME

~~The~~FOR ~~accompanying~~THE ~~notes~~THREE ~~are an integral part of these consolidated financial statements~~MONTHS

6ENDED SEPTEMBER 30, 2015 AND 2014

~~Table of Contents~~(Unaudited)

AMERICAN STATES WATER COMPANY



	Three Months Ended September 30,
(in thousands, except per share amounts)	2015			2014
Operating Revenues
Water	$	97,273		$	96,700
Electric	7,946			8,614
Contracted services	27,756			33,013
Total operating revenues	132,975			138,327

Operating Expenses
Water purchased	18,127			17,837
Power purchased for pumping	2,982			3,914
Groundwater production assessment	3,146			4,291
Power purchased for resale	2,299			2,383
Supply cost balancing accounts	4,824			3,179
Other operation	7,056			6,958
Administrative and general	19,272			20,142
Depreciation and amortization	10,512			10,549
Maintenance	4,393			4,390
Property and other taxes	4,326			4,359
ASUS construction	14,853			20,430
Total operating expenses	91,790			98,432

Operating Income	41,185			39,895

Other Income and Expenses
Interest expense	(5,484		)	(5,519		)
Interest income	118			224
Other, net	(346		)	47
Total other income and expenses	(5,712		)	(5,248		)

Income from operations before income tax expense	35,473			34,647

Income tax expense	14,394			13,476

Net Income	$	21,079		$	21,171

Weighted Average Number of Common Shares Outstanding	37,063			38,704
Basic Earnings Per Common Share	$	0.57		$	0.54

Weighted Average Number of Diluted Shares	37,266			38,930
Fully Diluted Earnings Per Common Share	$	0.56		$	0.54

Dividends Paid Per Common Share	$	0.2240		$	0.2130

~~CONSOLIDATED~~The ~~STATEMENTS~~accompanying OFnotes ~~CASH~~are ~~FLOW~~an integral part of these consolidated financial statements

~~FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012~~6

~~(Unaudited)~~Table of Contents

	Three Months Ended March 31,
(in thousands)	2013			2012
Cash Flows From Operating Activities:
Net income	$	13,465		$	10,115
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	10,066			11,067
Provision for doubtful accounts	188			653
Deferred income taxes and investment tax credits	270			(2		)
Stock-based compensation expense	661			542
Other — net	(172		)	(140		)
Changes in assets and liabilities:
Accounts receivable — customers	1,998			911
Unbilled revenue	1,625			(781		)
Other accounts receivable	1,585			1,989
Receivable from the U.S. government	8,251			(5,110		)
Materials and supplies	(1,862		)	(1,727		)
Prepayments and other current assets	140			(1,480		)
Regulatory assets — supply cost balancing accounts	1,371			3,437
Costs and estimated earnings in excess of billings on uncompleted contracts	(5,080		)	(1,362		)
Other assets (including other regulatory assets)	(13,147		)	(5,697		)
Accounts payable	2,229			2,745
Income taxes receivable/payable	15,111			7,603
Billings in excess of costs and estimated earnings on uncompleted contracts	(9,870		)	(1,154		)
Accrued pension and other postretirement benefits	3,021			3,145
Other liabilities	1,155			1,836
Net cash provided	31,005			26,590
Cash Flows From Investing Activities:
Construction expenditures	(18,425		)	(14,967		)
Proceed from sale of property	12			—
Net cash used	(18,413		)	(14,967		)
Cash Flows From Financing Activities:
Proceeds from issuance of Common Shares and stock option exercises	625			1,403
Receipt of advances for and contributions in aid of construction	4,151			538
Refunds on advances for construction	(430		)	(499		)
Repayments of long-term debt	(22		)	(65		)
Net change in notes payable to banks	—			(2,000		)
Dividends paid	(6,838		)	(5,277		)
Other — net	(770		)	(480		)
Net cash used	(3,284		)	(6,380		)
Net increase in cash and cash equivalents	9,308			5,243
Cash and cash equivalents, beginning of period	23,486			1,315
Cash and cash equivalents, end of period	$	32,794		$	6,558

AMERICAN STATES WATER COMPANY

~~The~~CONSOLIDATED ~~accompanying~~STATEMENTS ~~notes~~OF ~~are an integral part of these consolidated financial statements~~INCOME

7FOR THE NINE MONTHS

~~Table~~ENDED ofSEPTEMBER 30, ~~Contents~~2015 AND 2014

~~GOLDEN STATE WATER COMPANY~~(Unaudited)

BALANCE SHEETS



	Nine Months Ended September 30,
(in thousands, except per share amounts)	2015			2014
Operating Revenues
Water	$	256,358		$	253,689
Electric	26,804			27,398
Contracted services	65,364			74,826
Total operating revenues	348,526			355,913

Operating Expenses
Water purchased	46,833			45,324
Power purchased for pumping	7,122			8,448
Groundwater production assessment	10,657			12,684
Power purchased for resale	7,364			7,070
Supply cost balancing accounts	8,453			3,891
Other operation	20,578			20,990
Administrative and general	59,270			59,733
Depreciation and amortization	31,596			31,604
Maintenance	12,075			12,206
Property and other taxes	12,662			12,649
ASUS construction	35,311			47,651
Total operating expenses	251,921			262,250

Operating Income	96,605			93,663

Other Income and Expenses
Interest expense	(16,239		)	(16,924		)
Interest income	332			459
Other, net	4			443
Total other income and expenses	(15,903		)	(16,022		)

Income from operations before income tax expense	80,702			77,641

Income tax expense	31,826			30,095

Net Income	$	48,876		$	47,546

Weighted Average Number of Common Shares Outstanding	37,653			38,744
Basic Earnings Per Common Share	$	1.29		$	1.22

Weighted Average Number of Diluted Shares	37,853			38,963
Fully Diluted Earnings Per Common Share	$	1.29		$	1.22

Dividends Paid Per Common Share	$	0.650		$	0.618

~~ASSETS~~The accompanying notes are an integral part of these consolidated financial statements

~~(Unaudited)~~7

(in thousands)	March 31, 2013			December 31, 2012
Utility Plant
Utility plant, at cost	$	1,367,474		$	1,351,086
Less - Accumulated depreciation	(442,648		)	(437,949		)
Net utility plant	924,826			913,137
Other Property and Investments	11,673			11,590
Current Assets
Cash and cash equivalents	32,135			22,578
Accounts receivable-customers (less allowance for doubtful accounts of $753 in 2013 and $797 in 2012)	17,315			19,491
Unbilled revenue	14,522			16,147
Inter-company receivable	5,330			2,508
Other accounts receivable (less allowance for doubtful accounts of $371 in 2013 and $380 in 2012)	3,926			6,377
Income taxes receivable from Parent	2,788			16,442
Materials and supplies, at average cost	2,324			2,244
Regulatory assets — current	34,376			32,336
Prepayments and other current assets	3,618			4,162
Deferred income taxes — current	7,682			7,577
Total current assets	124,016			129,862
Regulatory and Other Assets
Regulatory assets	150,853			143,679
Other accounts receivable	1,445			1,445
Other	14,153			14,339
Total regulatory and other assets	166,451			159,463
Total Assets	$	1,226,966		$	1,214,052

Table of Contents

~~The~~AMERICAN ~~accompanying~~STATES ~~notes~~WATER ~~are an integral part of these financial statements~~COMPANY

8CONSOLIDATED STATEMENTS OF CASH FLOW

~~Table~~FOR ofTHE ~~Contents~~NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

~~GOLDEN STATE WATER COMPANY~~(Unaudited)

BALANCE SHEETS



	Nine Months Ended September 30,
(in thousands)	2015			2014
Cash Flows From Operating Activities:
Net income	$	48,876		$	47,546
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	32,110			32,302
Provision for doubtful accounts	620			781
Deferred income taxes and investment tax credits	1,187			(3,236		)
Stock-based compensation expense	2,117			1,961
Other — net	1,047			288
Changes in assets and liabilities:
Accounts receivable — customers	(3,870		)	(3,345		)
Unbilled receivable	(487		)	(14,077		)
Other accounts receivable	(3,294		)	2,559
Receivables from the U.S. government	1,775			3,564
Materials and supplies	(2,286		)	635
Prepayments and other assets	1,116			(579		)
Costs and estimated earnings in excess of billings on contracts	7,075			6,036
Regulatory assets	(25,907		)	18,143
Accounts payable	3,936			5,450
Income taxes receivable/payable	23,039			14,213
Billings in excess of costs and estimated earnings on contracts	(4,232		)	8,847
Accrued pension and other post-retirement benefits	(1,128		)	(3,623		)
Other liabilities	4,404			2,604
Net cash provided	86,098			120,069

Cash Flows From Investing Activities:
Capital expenditures	(59,848		)	(53,714		)
Other investing activities	(1,456		)	(1,696		)
Net cash used	(61,304		)	(55,410		)

Cash Flows From Financing Activities:
Proceeds from stock option exercises	746			370
Repurchase of Common Shares	(63,234		)	(7,101		)
Receipt of advances for and contributions in aid of construction	2,928			5,157
Refunds on advances for construction	(3,161		)	(3,062		)
Retirement or repayments of long-term debt	(228		)	(15,278		)
Dividends paid	(24,497		)	(23,931		)
Net change in notes payable to banks	15,000			—
Other financing activities	(1,082		)	(1,178		)
Net cash used	(73,528		)	(45,023		)
Net change in cash and cash equivalents	(48,734		)	19,636
Cash and cash equivalents, beginning of period	75,988			38,226
Cash and cash equivalents, end of period	$	27,254		$	57,862

Non-cash transactions:
Accrued payables for investment in utility plant	$	13,866		$	14,018
Property installed by developers and conveyed	$	1,705		$	388

~~CAPITALIZATION~~The ~~AND~~accompanying ~~LIABILITIES~~notes are an integral part of these consolidated financial statements

~~(Unaudited)~~8

(in thousands)	March 31, 2013		December 31, 2012
Capitalization
Common shares, no par value	$	231,309	$	231,480
Earnings reinvested in the business	188,648		184,777
Total common shareholder’s equity	419,957		416,257
Long-term debt	332,446		332,463
Total capitalization	752,403		748,720
Current Liabilities
Long-term debt — current	3,383		3,328
Accounts payable	31,829		27,292
Accrued other taxes	3,628		7,720
Accrued employee expenses	9,552		8,786
Accrued interest	6,240		3,909
Unrealized loss on purchased power contracts	1,540		3,060
Other	13,462		11,606
Total current liabilities	69,634		65,701
Other Credits
Advances for construction	70,580		70,781
Contributions in aid of construction — net	109,923		106,450
Deferred income taxes	142,083		142,082
Unamortized investment tax credits	1,859		1,881
Accrued pension and other postretirement benefits	73,718		71,618
Other	6,766		6,819
Total other credits	404,929		399,631
Commitments and Contingencies (Note 8)	—		—
Total Capitalization and Liabilities	$	1,226,966	$	1,214,052

Table of Contents

~~The~~GOLDEN ~~accompanying~~STATE ~~notes~~WATER ~~are an integral part of these financial statements~~COMPANY

9BALANCE SHEETS

~~Table of Contents~~ASSETS

~~GOLDEN STATE WATER COMPANY~~(Unaudited)

STATEMENTS OF INCOME



(in thousands)	September 30, 2015			December 31, 2014
Utility Plant
Utility plant, at cost	$	1,547,330		$	1,492,880
Less - Accumulated depreciation	(519,487		)	(494,000		)
Net utility plant	1,027,843			998,880

Other Property and Investments	16,169			15,395

Current Assets
Cash and cash equivalents	19,286			44,005
Accounts receivable-customers (less allowance for doubtful accounts of $849 in 2015 and $803 in 2014)	22,112			18,814
Unbilled receivable	17,730			17,733
Inter-company receivable	171			499
Other accounts receivable (less allowance for doubtful accounts of $129 in 2015 and $89 in 2014)	1,121			3,795
Income taxes receivable from Parent	444			29,580
Note receivable from Parent	15,000			—
Materials and supplies, at average cost	5,264			2,791
Regulatory assets — current	10,557			12,379
Prepayments and other current assets	3,479			2,507
Deferred income taxes — current	8,533			6,500
Total current assets	103,697			138,603

Regulatory and Other Assets
Regulatory assets	144,800			118,829
Other	9,719			10,667
Total regulatory and other assets	154,519			129,496

Total Assets	$	1,302,228		$	1,282,374

~~FOR~~The ~~THE~~accompanying ~~THREE~~notes ~~MONTHS~~are an integral part of these financial statements

~~ENDED MARCH 31, 2013 AND 2012~~9

~~(Unaudited)~~Table of Contents

	Three Months Ended March 31,
(in thousands)	2013			2012
Operating Revenues
Water	$	69,233		$	66,201
Electric	10,734			10,813
Total operating revenues	79,967			77,014
Operating Expenses
Water purchased	10,732			9,552
Power purchased for pumping	1,639			1,556
Groundwater production assessment	3,187			3,323
Power purchased for resale	3,680			3,191
Supply cost balancing accounts	1,371			3,437
Other operation expenses	4,797			6,649
Administrative and general expenses	14,234			13,696
Depreciation and amortization	9,522			10,220
Maintenance	3,493			2,940
Property and other taxes	3,716			3,743
Total operating expenses	56,371			58,307
Operating Income	23,596			18,707
Other Income and Expenses
Interest expense	(5,748		)	(6,009		)
Interest income	178			210
Other, net	342			229
Total other income and expenses	(5,228		)	(5,570		)
Income from operations before income tax expense	18,368			13,137
Income tax expense	7,663			5,755
Net Income	$	10,705		$	7,382

GOLDEN STATE WATER COMPANY

~~The~~BALANCE ~~accompanying notes are an integral part of these financial statements~~SHEETS

10CAPITALIZATION AND LIABILITIES

~~Table of Contents~~(Unaudited)

GOLDEN STATE WATER COMPANY



(in thousands)	September 30, 2015		December 31, 2014
Capitalization
Common shares, no par value	$	237,056	$	235,607
Earnings reinvested in the business	195,032		199,583
Total common shareholder’s equity	432,088		435,190
Long-term debt	325,550		325,798
Total capitalization	757,638		760,988

Current Liabilities
Inter-company Payables	15,000		—
Long-term debt — current	312		292
Accounts payable	34,929		29,619
Accrued other taxes	7,966		8,442
Accrued employee expenses	10,583		9,591
Accrued interest	6,282		3,593
Unrealized loss on purchased power contracts	7,246		3,339
Other	17,990		18,659
Total current liabilities	100,308		73,535

Other Credits
Advances for construction	67,104		68,328
Contributions in aid of construction	116,207		116,629
Deferred income taxes	193,597		192,787
Unamortized investment tax credits	1,632		1,699
Accrued pension and other postretirement benefits	59,190		61,773
Other	6,552		6,635
Total other credits	444,282		447,851

Commitments and Contingencies (Note 8)

Total Capitalization and Liabilities	$	1,302,228	$	1,282,374

~~STATEMENTS~~The OFaccompanying ~~CASH~~notes ~~FLOW~~are an integral part of these financial statements

~~FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012~~10

~~(Unaudited)~~Table of Contents

	Three Months Ended March 31,
(in thousands)	2013			2012
Cash Flows From Operating Activities:
Net income	$	10,705		$	7,382
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	9,772			10,797
Provision for doubtful accounts	188			619
Deferred income taxes and investment tax credits	279			(5		)
Stock-based compensation expense	400			341
Other — net	(159		)	(174		)
Changes in assets and liabilities:
Accounts receivable — customers	1,998			911
Unbilled revenue	1,625			(781		)
Other accounts receivable	2,441			1,543
Materials and supplies	(80		)	(77		)
Prepayments and other current assets	544			(1,273		)
Regulatory assets — supply cost balancing accounts	1,371			3,437
Other assets (including other regulatory assets)	(13,102		)	(5,615		)
Accounts payable	730			(2,633		)
Inter-company receivable/payable	(2,822		)	(502		)
Income taxes receivable/payable from/to Parent	13,654			5,760
Accrued pension and other postretirement benefits	3,021			3,145
Other liabilities	808			1,614
Net cash provided	31,373			24,489
Cash Flows From Investing Activities:
Construction expenditures	(18,111		)	(14,479		)
Net cash used	(18,111		)	(14,479		)
Cash Flows From Financing Activities:
Receipt of advances for and contributions in aid of construction	4,151			538
Refunds on advances for construction	(430		)	(499		)
Repayments of long-term debt	(22		)	(65		)
Dividends paid	(6,800		)	(5,000		)
Other — net	(604		)	(389		)
Net cash used	(3,705		)	(5,415		)
Net increase in cash and cash equivalents	9,557			4,595
Cash and cash equivalents, beginning of period	22,578			—
Cash and cash equivalents, end of period	$	32,135		$	4,595

GOLDEN STATE WATER COMPANY

~~The~~STATEMENTS ~~accompanying~~OF ~~notes are an integral part of these financial statements~~INCOME

11FOR THE THREE MONTHS

~~Table~~ENDED ofSEPTEMBER ~~Contents~~30, 2015 AND 2014

~~AMERICAN STATES WATER COMPANY AND SUBSIDIARIES~~(Unaudited)

AND



	Three Months Ended September 30,
(in thousands)	2015			2014
Operating Revenues
Water	$	97,273		$	96,700
Electric	7,946			8,614
Total operating revenues	105,219			105,314

Operating Expenses
Water purchased	18,127			17,837
Power purchased for pumping	2,982			3,914
Groundwater production assessment	3,146			4,291
Power purchased for resale	2,299			2,383
Supply cost balancing accounts	4,824			3,179
Other operation	6,109			6,223
Administrative and general	15,690			17,261
Depreciation and amortization	10,241			10,236
Maintenance	3,878			3,765
Property and other taxes	3,842			3,879
Total operating expenses	71,138			72,968

Operating Income	34,081			32,346

Other Income and Expenses
Interest expense	(5,499		)	(5,509		)
Interest income	115			214
Other, net	(345		)	47
Total other income and expenses	(5,729		)	(5,248		)

Income from operations before income tax expense	28,352			27,098

Income tax expense	12,109			11,019

Net Income	$	16,243		$	16,079

~~GOLDEN~~The ~~STATE~~accompanying ~~WATER~~notes ~~COMPANY~~are an integral part of these consolidated financial statements

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~11

~~(Unaudited)~~Table of Contents

~~Note~~GOLDEN 1STATE —WATER ~~Summary of Significant Accounting Policies:~~COMPANY

~~Nature~~STATEMENTS ofOF 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 may be collectively referred to herein as the “Military Utility Privatization Subsidiaries.”INCOME

~~GSWC~~FOR isTHE aNINE public utility engaged principally in the purchase, production, distribution and sale of water in California serving approximately 256,000 customers. GSWC also distributes electricity in several San Bernardino County mountain communities in California serving approximately 23,000 customers through its Bear Valley Electric Service (“BVES”) division. The California Public Utilities Commission (“CPUC”) regulates GSWC’s water and electric businesses, including properties, rates, services, facilities and other matters, and transactions by GSWC with its affiliates. AWR’s assets and operating income are primarily those of GSWC.MONTHS

~~ASUS~~ENDED ~~performs~~SEPTEMBER ~~water and wastewater services~~30, ~~including~~2015 ~~the~~AND operation, maintenance, renewal and replacement of water and/or wastewater systems on a contract basis. Through its wholly owned subsidiaries, ASUS operates and maintains the water and/or wastewater systems at various military bases pursuant to 50-year firm, fixed-price contracts, which are subject to periodic price redeterminations and modifications for changes in circumstances, and changes in laws and regulations. There is no direct regulatory oversight by the CPUC over AWR or the operation, rates or services provided by ASUS or any of its wholly owned subsidiaries.2014

Basis of Presentation: The consolidated financial statements and notes thereto are being presented in a combined report being filed by two separate Registrants: AWR and GSWC. References in this report to “Registrant” are to AWR and GSWC, collectively, unless otherwise specified. Certain prior period amounts have been reclassified to conform to the 2013 financial statement presentation.(Unaudited)

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.



	Nine Months Ended September 30,
(in thousands)	2015			2014
Operating Revenues
Water	$	256,358		$	253,689
Electric	26,804			27,398
Total operating revenues	283,162			281,087

Operating Expenses
Water purchased	46,833			45,324
Power purchased for pumping	7,122			8,448
Groundwater production assessment	10,657			12,684
Power purchased for resale	7,364			7,070
Supply cost balancing accounts	8,453			3,891
Other operation	18,107			19,027
Administrative and general	48,250			50,670
Depreciation and amortization	30,717			30,708
Maintenance	10,362			10,609
Property and other taxes	11,508			11,305
Total operating expenses	199,373			199,736

Operating Income	83,789			81,351

Other Income and Expenses
Interest expense	(16,233		)	(16,841		)
Interest income	316			436
Other, net	(139		)	443
Total other income and expenses	(16,056		)	(15,962		)

Income from operations before income tax expense	67,733			65,389

Income tax expense	28,156			26,507

Net Income	$	39,577		$	38,882

The ~~consolidated~~accompanying ~~financial~~notes ~~statements~~are ~~included~~an ~~herein~~integral ~~have been prepared by Registrant, without audit, pursuant to the rules~~part ~~and regulations~~ of the Securities and Exchange Commission (“SEC”). The December 31, 2012 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. 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 those 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, 2012 filed with the SEC.~~

GSWC’s Related Party Transactions: GSWC and other subsidiaries provide and receive various services to and from their parent, AWR, and among themselves. 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 other affiliates is sufficient to cover AWR’s interest cost under the credit facility. GSWC also allocates certain corporate office administrative and general costs to its affiliate, ASUS, using allocation factors approved by the CPUC. Amounts owed to GSWC by its parent, AWR, or for allocated expenses are included in inter-company receivables as of March 31, 2013 and December 31, 2012.12

~~Sales~~Table ~~and~~of 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 municipalitiesContents

12GOLDEN STATE WATER COMPANY

~~Table~~STATEMENTS ofOF ~~Contents~~CASH FLOW

~~(based~~FOR onTHE ~~ordinances~~NINE ~~adopted~~MONTHS byENDED ~~these~~SEPTEMBER ~~municipalities) in order to use public right of way for utility purposes. GSWC bills these franchise fees to its customers based on a CPUC-authorized rate. These franchise fees~~30, ~~which~~2015 ~~are~~AND required to be paid regardless of GSWC’s ability to collect from the customer, are accounted for on a gross basis. GSWC’s franchise fees billed to customers and recorded as operating revenue were approximately $811,000 and $784,000 for the three months ended March 31, 2013 and 2012, 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.2014

Depending on the state in which the operations are conducted, ASUS and its 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 subsidiary is reimbursed by the U.S. government for these assessments under its 50-year contracts with the U.S. government. The non-income tax assessments are accounted for on a gross basis and totaled $162,000 and $155,000 during the three months ended March 31, 2013 and 2012, respectively.(Unaudited)

Accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on Registrant’s consolidated financial statements upon adoption.



	Nine Months Ended September 30,
(in thousands)	2015			2014
Cash Flows From Operating Activities:
Net income	$	39,577		$	38,882
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	31,231			31,406
Provision for doubtful accounts	620			844
Deferred income taxes and investment tax credits	901			(3,110		)
Stock-based compensation expense	1,823			1,513
Other — net	1,036			273
Changes in assets and liabilities:
Accounts receivable — customers	(3,870		)	(3,345		)
Unbilled receivable	3			(2,269		)
Other accounts receivable	1,922			2,438
Materials and supplies	(2,473		)	(606		)
Prepayments and other assets	(272		)	(579		)
Regulatory assets	(25,907		)	18,143
Accounts payable	4,584			2,941
Inter-company receivable/payable	328			541
Income taxes receivable/payable from/to Parent	29,136			10,354
Accrued pension and other post-retirement benefits	(1,128		)	(3,623		)
Other liabilities	3,862			2,616
Net cash provided	81,373			96,419

Cash Flows From Investing Activities:
Capital expenditures	(59,330		)	(52,150		)
Note receivable from AWR parent	(15,000		)	(8,300		)
Receipt of payment of note receivable from AWR parent	—			8,800
Other investing activities	(1,506		)	(1,739		)
Net cash used	(75,836		)	(53,389		)

Cash Flows From Financing Activities:
Receipt of advances for and contributions in aid of construction	2,928			5,157
Refunds on advances for construction	(3,161		)	(3,062		)
Retirement or repayments of long-term debt	(228		)	(15,278		)
Dividends paid	(44,000		)	(39,000		)
Net change in inter-company borrowings	15,000			—
Other financing activities	(795		)	(995		)
Net cash used	(30,256		)	(53,178		)

Net change in cash and cash equivalents	(24,719		)	(10,148		)
Cash and cash equivalents, beginning of period	44,005			37,875
Cash and cash equivalents, end of period	$	19,286		$	27,727

Non-cash transactions:
Accrued payables for investment in utility plant	$	13,866		$	14,017
Property installed by developers and conveyed	$	1,705		$	388

~~Note~~The 2accompanying —notes ~~Regulatory~~are ~~Matters:~~an integral part of these financial statements

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, 2013, Registrant had approximately $75.4 million of regulatory assets, net of regulatory liabilities not accruing carrying costs. Of this amount, $51.6 million relates to the underfunded positions of the pension and other post-retirement obligations, $16.0 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, and $1.5 million relates to a memorandum account authorized by the CPUC to track unrealized gains and losses on GSWC’s purchase power contract over the life of the contract. The remainder relates to other items that do not provide for or incur carrying costs.13

~~Regulatory~~Table ~~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 determined that a portion of GSWC’s assets were not recoverable in customer rates, GSWC would be required to determine if it had suffered an asset impairment that would require a write-down in the assets’ valuation. Regulatory assets, less regulatory liabilities, included in the consolidated balance sheets are as follows:Contents

(dollars in thousands)	March 31, 2013			December 31, 2012
Water Revenue Adjustment Mechanism, net of Modified Cost Balancing Account	$	44,449		$	42,574
Base Revenue Requirement Adjustment Mechanism	7,270			6,833
Costs deferred for future recovery on Aerojet case	15,831			16,030
Pensions and other post-retirement obligations (Note 7)	56,484			56,894
Flow-through taxes, net (Note 6)	16,010			16,415
General rate case memorandum accounts	11,427			4,495
Other regulatory assets	40,280			40,332
Various refunds to customers	(6,522		)	(7,558		)
Total	$	185,229		$	176,015

AMERICAN STATES WATER COMPANY AND SUBSIDIARIES

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, 2012 filed with the SEC. The discussion below focuses on significant matters and changes since December 31, 2012.AND

~~Alternative-Revenue~~GOLDEN ~~Programs:~~STATE WATER COMPANY

~~GSWC~~NOTES ~~records~~TO ~~the~~CONSOLIDATED ~~difference~~FINANCIAL 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. GSWC has implemented surcharges to recover all of its WRAM balances, net of the MCBA. The recovery or refund of the WRAM is netted against the MCBA over- or under-collection for the corresponding rate-making area and is interest bearing at the current 90-day commercial paper rate. For the three months ended March 31, 2013 and 2012, surcharges of $3.6 million and $3.4 million, respectively, were billed to customers to decrease previously incurred under-collections in the WRAM, net of MCBA accounts. For the three months ended March 31, 2013, the WRAM and MCBA accounts also reflect the effects of the authorized 2013 adopted revenue and supply cost amounts approved in the CPUC’s final decision issued in May 2013 on GSWC’s water general rate case, discussed later under General Rate Case MemorandumSTATEMENTS

13(Unaudited)

~~Table~~Note 1 — Summary of ~~Contents~~Significant Accounting Policies:

~~Accounts. As~~Nature of ~~March 31,~~Operations: ~~2013,~~American ~~GSWC~~States ~~has~~Water aCompany ~~net~~(“AWR”) ~~aggregated~~is ~~regulatory~~the ~~asset~~parent company of ~~$44~~Golden State Water Company (“GSWC”) and American States Utility Services, Inc.4 ~~million~~(“ASUS”) ~~which~~(and isits ~~comprised~~subsidiaries, ofFort aBliss ~~$61~~Water Services Company (“FBWS”), Terrapin Utility Services, Inc.9 ~~million~~(“TUS”), ~~under-collection~~Old inDominion ~~the~~Utility ~~WRAM~~Services, Inc. ~~accounts~~(“ODUS”), Palmetto State Utility Services, Inc. (“PSUS”) and ~~$17~~Old North Utility Services, Inc.5 ~~million~~(“ONUS”)). The ~~over-collection~~subsidiaries inof ASUS are collectively referred to as the ~~MCBA~~“Military ~~accounts~~Utility Privatization Subsidiaries.”

~~Based~~GSWC onis ~~CPUC~~a ~~guidelines,~~public ~~recovery~~utility ~~periods~~engaged ~~relating~~principally toin the ~~majority~~purchase, ofproduction, ~~GSWC’s~~distribution ~~WRAM/MCBA balances range between 18~~ and 24sale ~~months. In~~of ~~April 2012,~~water ~~the~~in ~~CPUC~~California ~~issued~~serving aapproximately ~~final decision which~~260,000 ~~among~~customers. GSWC ~~other~~also ~~things,~~distributes ~~set~~electricity ~~the~~in ~~recovery~~several ~~periods~~San ~~for~~Bernardino ~~under-collection~~County ~~balances~~mountain ~~that~~communities ~~are~~in upCalifornia toserving ~~15%~~approximately of24,000 ~~adopted~~customers ~~annual~~through ~~revenues~~its atBear 18Valley ~~months~~Electric orService ~~less~~(“BVES”) division. In Although ~~addition~~Registrant tohas ~~adopting~~ a ~~new~~diversified ~~amortization~~base ~~schedule~~of residential, ~~the~~industrial ~~final~~and ~~decision~~other ~~sets~~customers, arevenues ~~cap~~derived onfrom ~~total~~commercial ~~net~~and ~~WRAM/MCBA~~residential ~~surcharges~~water incustomers ~~any~~accounted ~~given~~for ~~calendar~~approximately ~~year of 10~~90% of ~~the~~total ~~last~~water ~~authorized~~revenues ~~revenue~~during ~~requirement. The cap is effective following~~ the ~~first~~three ~~test~~and ~~year~~nine ofmonths ~~each~~ended ~~applicant’s~~September ~~pending~~30, or2015 ~~next~~and ~~general rate case~~2014. ~~For~~ The ~~GSWC,~~California ~~the~~Public ~~cap~~Utilities ~~will~~Commission be(“CPUC”) ~~applied~~regulates toGSWC’s ~~its~~water ~~2013~~and ~~WRAM~~electric ~~balances~~businesses ~~filed~~ in ~~early~~matters ~~2014. The~~including ~~cap~~properties, ~~requirement~~rates, ~~set~~services, ~~forth~~facilities, inand ~~the~~transactions ~~final~~by ~~decision~~GSWC ~~will~~with ~~not~~its ~~impact GSWC~~affiliates. AWR’s ~~2012~~assets and ~~prior~~operating ~~year~~income ~~WRAM/MCBA~~are ~~balances~~primarily those of GSWC.

~~For BVES~~ASUS, ~~the~~through ~~CPUC~~its ~~approved~~wholly ~~the~~owned ~~Base Revenue Requirement Adjustment Mechanism (“BRRAM”)~~subsidiaries, ~~which adjusts certain revenues to adopted levels. In March 2013~~operates, ~~the~~maintains ~~CPUC~~and ~~approved~~performs ~~surcharges~~construction ~~for~~activities ~~recovery~~(including ofrenewal ~~BVES’~~and ~~2012~~replacement ~~BRRAM~~capital ~~balance.~~work) ~~The~~on ~~CPUC~~water and/or ~~approved~~wastewater asystems ~~36-month~~at ~~surcharge,~~various ~~with~~United ~~the~~States ~~amounts~~military ~~collected~~bases ~~through~~pursuant ~~December 2014~~ to ~~be applied to the 2012 BRRAM under~~50-~~collection. Surcharges~~year ~~collected~~firm ~~during the remainder of the 36~~fixed-~~month~~price ~~period will recover a $1~~contracts.6 These ~~million~~contracts ~~increase~~are insubject ~~the~~to ~~BVES~~periodic ~~revenue~~price ~~requirement~~redeterminations ~~representing~~or ~~the~~economic ~~difference~~price ~~between~~adjustments ~~the~~and ~~allocated~~modifications ~~general~~for ~~office~~changes ~~costs authorized by the CPUC~~ in ~~its November 2010 decision on the Region II~~circumstances, ~~Region~~changes ~~III~~in laws and ~~general~~regulations ~~office rate case,~~ and ~~what~~additions ~~was~~to ~~then~~the incontract ~~BVES’~~value ~~rates~~ for ~~allocated~~new ~~general~~construction ~~office~~of ~~costs. As~~facilities ~~authorized~~at by the ~~CPUC,~~military ~~the $1~~bases.~~6 million was combined in the BRRAM for recovery through the surcharge; however, these costs are not considered an alternative revenue program.~~

~~General~~There ~~Rate~~is ~~Case~~no ~~Memorandum~~direct ~~Accounts:~~regulatory oversight by the CPUC over AWR or the operations, rates or services provided by ASUS or any of ASUS's wholly owned subsidiaries.

~~The~~Basis ~~balance~~of inPresentation: ~~the~~The ~~general~~consolidated ~~rate~~financial ~~case~~statements ~~memorandum~~and ~~accounts~~notes ~~represents~~thereto ~~the~~are ~~revenue~~presented ~~differences~~in ~~between~~a ~~interim~~combined ~~rates~~report ~~and~~filed ~~final rates authorized~~ by ~~the~~two ~~CPUC~~separate ~~due~~Registrants: toAWR ~~delays~~and GSWC. References in ~~receiving~~this ~~decisions~~report onto ~~various~~“Registrant” ~~general~~are ~~rate~~to ~~case~~AWR ~~applications.~~and AsGSWC ~~of March 31~~collectively, ~~2013,~~unless ~~there~~otherwise ~~is an aggregate of $11~~specified.4 Certain ~~million~~prior-period amounts in the ~~general~~Consolidated ~~rate~~and ~~case~~GSWC ~~memorandum~~Statements ~~accounts, the majority~~ of ~~which~~Cash isFlow ~~for~~have ~~retroactive~~been ~~rate~~reclassified ~~increases~~to ~~effective~~conform ~~January 1,~~to ~~2013,~~the as2015 apresentation ~~result~~ of ~~the~~"Regulatory ~~final~~assets" ~~decision~~as ~~issued~~a byseparate ~~the~~line ~~CPUC in May 2013 on GSWC’s general rate case~~item.

OnThe ~~May 9,~~consolidated ~~2013,~~financial ~~the~~statements ~~CPUC~~of ~~issued~~AWR ainclude ~~final decision on GSWC’s general water rate case approving new rates for 2013 — 2015 at GSWC’s three water regions and~~ the ~~general~~accounts ~~office.~~of ~~The~~AWR ~~new rates were retroactive to January 1, 2013~~ and ~~have~~its ~~been reflected in the 2013 first quarter results. Accordingly~~subsidiaries, ~~for~~all ~~the~~of ~~three~~which ~~months~~are ~~ended~~wholly ~~March 31, 2013, GSWC recorded a $7~~owned.3 These ~~million~~financial ~~regulatory~~statements ~~asset~~are ~~representing~~prepared ~~the~~in ~~difference~~conformity ~~between~~with ~~interim~~accounting ~~rates~~principles ~~and~~generally ~~the~~accepted ~~final~~in ~~rates authorized by~~ the ~~CPUC~~United ~~for~~States ~~the~~of ~~period January 1, 2013 through March 31, 2013~~America. Inter-company Atransactions ~~surcharge~~and tobalances ~~recover~~have ~~this~~been ~~difference~~eliminated isin ~~expected to be implemented during~~ the ~~second~~AWR ~~quarter~~consolidated offinancial ~~2013~~statements.

~~Other~~The ~~Regulatory~~consolidated ~~Assets:~~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, 2014 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 those 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, 2014 filed with the SEC.

~~Among~~GSWC's ~~other~~Related ~~things,~~Party ~~the~~Transactions: ~~final~~In ~~CPUC~~May ~~decision~~2013, AWR issued inan ~~May 2013~~interest ~~approved~~bearing ~~the~~promissory ~~recovery~~note ofto ~~various~~GSWC ~~memorandum~~for ~~accounts~~$20.0 million which ~~tracked~~expires ~~certain~~on ~~previously~~May ~~incurred~~23, ~~costs~~2018. As The aamount ~~result~~of this note was increased to $40.0 million on October 27, ~~for~~2015. Under the ~~three~~terms ~~months~~of ~~ended~~this ~~March 31~~note, ~~2013,~~AWR may borrow from GSWC ~~recorded~~amounts up to $340.20 million infor ~~other~~working ~~regulatory~~capital ~~assets,~~purposes. AWR ~~the~~agreed ~~majority~~to ofpay ~~which~~any ~~was~~unpaid ~~reflected~~principal asamounts aoutstanding ~~decrease~~under inthis ~~certain~~note, ~~operating~~plus ~~expenses~~accrued ~~related~~interest. As toof ~~the~~September 30, ~~approval~~2015, ofAWR ~~these~~had ~~memorandum~~$15.0 ~~accounts~~million inoutstanding ~~the~~and ~~final~~owed ~~decision~~to GSWC under this note.

~~Other Regulatory Matters:~~14

~~CPUC~~Table ~~Rehearing~~of ~~Matter:~~Contents

In ~~July 2011~~October 2015, ~~the~~AWR ~~CPUC~~ issued an ~~order~~interest ~~granting~~bearing ~~DRA’s~~promissory ~~request~~note to ~~rehear~~ASUS ~~certain~~for ~~issues~~$10.0 ~~from~~million ~~the~~which ~~Region~~expires ~~II,~~on ~~Region III and general office rate case approved in November~~May ~~2010~~23, 2018. ~~Among~~ Under the ~~issues~~terms inof ~~the~~this ~~rehearing~~note, ~~was~~AWR ~~the~~may Laborrow ~~Serena~~from ~~plant~~ASUS ~~improvement~~amounts ~~project~~up ~~included~~to ~~in rate base totaling approximately~~ $310.50 million~~. As~~ afor ~~result~~working ofcapital ~~the~~purposes. AWR ~~CPUC’s~~agreed ~~decision~~to inpay ~~November 2010,~~any ~~GSWC~~unpaid ~~had~~principal ~~recorded~~amounts aoutstanding ~~pretax~~under ~~charge~~this ~~of $2.2 million during 2010~~note, ~~which~~plus ~~included~~accrued ~~the~~interest. ~~disallowance of a portion of the La Serena capital costs and the related revenues earned on those capital~~

14GSWC and ASUS provide and 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. GSWC allocated corporate office administrative and general costs to ASUS of approximately $659,000 and $658,000 during the three months ended September 30, 2015 and 2014, respectively, and approximately $2.0 million during the nine months ended September 30, 2015 and 2014. 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. Amounts owed to GSWC by AWR, including for allocated expenses, are included in GSWC's inter-company receivables as of September 30, 2015 and December 31, 2014.

~~Table~~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 ~~Contents~~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 customers, are accounted for on a gross basis. GSWC’s franchise fees billed to customers and recorded as operating revenue were approximately $1.1 million for the three months ended September 30, 2015 and 2014, and $3 million and $2.9 million for the nine months ended September 30, 2015 and 2014, 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.

~~costs~~Depending toon bethe ~~refunded~~state toin ~~customers. In~~which ~~March 2013,~~its ~~GSWC~~operations ~~and~~are ~~DRA~~conducted, ~~reached~~ASUS ais ~~settlement~~also ~~agreement,~~ subject to ~~CPUC~~certain ~~approval,~~state tonon-income ~~resolve~~tax ~~all~~assessments ~~the~~generally ~~issues~~computed inon ~~the~~a ~~rehearing. In~~“gross ~~March 2013,~~receipts” ~~GSWC~~or ~~filed~~“gross ~~for~~revenues” ~~CPUC~~basis. These ~~approval~~non-income oftax ~~the~~assessments ~~settlement~~are ~~agreement.~~required Into ~~anticipation~~be paid regardless of ~~this~~whether ~~settlement,~~the ~~GSWC~~subsidiary ~~recorded~~is anreimbursed ~~additional~~by ~~pretax~~the ~~charge~~U.S. ofgovernment ~~$416,000~~for inthese ~~2012,~~assessments ~~representing~~under ~~disallowed~~its ~~plant~~50-year ~~improvement~~contracts. The ~~project~~non-income ~~costs~~tax ~~and~~assessments ~~related~~are ~~revenues~~accounted ~~earned~~for on ~~those~~a ~~costs~~gross ~~that~~basis itand ~~expects~~totaled ~~will~~$265,000 beand ~~refunded~~$248,000 toduring ~~customers~~the ~~based~~three ~~upon~~months ~~the~~ended ~~terms~~September 30, of2015 ~~the~~and ~~settlement~~2014, ~~being~~respectively, ~~discussed.~~and ~~The~~$351,000 ~~settlement~~and ~~agreement~~$554,000 iffor ~~approved,~~the ~~would~~nine ~~resolve~~months ~~all~~ended ~~issues~~September 30, ~~arising~~2015 ~~from~~and ~~the~~2014, ~~rehearing~~respectively.

~~BVES~~Recently ~~General~~Issued ~~Rate~~Accounting ~~Case~~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. On July 9, 2015, the FASB decided to delay the effective date of the new revenue standard by one year. 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 intends to 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 ~~February 2012~~April 2015, ~~BVES~~the ~~filed~~FASB ~~its~~issued ~~general~~Accounting ~~rate~~Standard ~~case~~Update ~~(“GRC”)~~2015-03, ~~for~~Simplifying ~~new~~the ~~rates~~Presentation inof ~~years~~Debt ~~2013~~Issuance ~~through 2016. In August 2012~~Costs, ~~the~~which ~~Division~~requires ofdebt ~~Ratepayer~~issuance ~~Advocates~~costs ~~(“DRA”)~~to ~~issued~~be ~~its~~presented ~~report~~in on the ~~GRC. Included~~balance insheet ~~DRA’s~~as ~~recommendations was~~ a ~~$2.0~~direct ~~million~~deduction ~~retroactive~~from ~~ratemaking~~the ~~proposal~~carrying tovalue ~~increase~~of ~~BVES’ accumulated depreciation balance to reflect adopted depreciation expense for~~ the ~~years~~associated ~~2009~~debt ~~through~~liability, ~~2012~~ rather than ~~actual depreciation expense~~ as ~~recorded~~an inasset. The ~~accordance~~standard ~~with~~does ~~GAAP. DRA~~not ~~also~~affect ~~recommended~~the ~~that~~recognition ~~one-half~~and measurement of ~~deferred~~debt ~~rate~~issuance ~~case~~ costs. The beguidance ~~borne~~is byeffective ~~shareholders~~January 1, ~~rather~~2016. In ~~than~~August ~~entirely by customers~~2015, asthe ~~has~~FASB ~~been~~issued ~~authorized~~Accounting byStandard ~~the~~Update ~~CPUC~~2015-15, inPresentation ~~prior~~and ~~rate~~Subsequent ~~cases. As~~Measurement of ~~March 31,~~Debt ~~2013,~~Issuance ~~GSWC~~Costs ~~has~~Associated awith ~~$2.2~~Line-of-Credit ~~million~~Arrangements, ~~regulatory~~which ~~asset~~provided ~~representing~~additional ~~deferred~~guidance ~~rate case costs~~ for ~~the~~presentation ~~current~~of ~~BVES~~debt ~~general~~issuance ~~rate~~costs ~~case,~~related ~~which~~to ~~the~~line-of-credit ~~CPUC~~arrangements. Under ~~has~~this ~~historically~~guidance, ~~allowed~~entities ~~utilities~~may topresent ~~recover.~~debt Ifissuance ~~DRA~~costs ~~prevails,~~as ~~GSWC~~an ~~may~~asset beand ~~required~~subsequently toamortize ~~record~~the adeferred ~~charge~~debt toissuance ~~adjust~~costs ~~accumulated~~ratably ~~depreciation~~over ~~and~~the toterm ~~write-off~~of ~~half~~the line-of-credit ~~its~~arrangement, ~~deferred~~regardless ~~rate~~of ~~case~~whether ~~costs.~~there ~~GSWC believes DRA’s recommendations~~ are ~~without~~any ~~merit~~outstanding ~~and~~borrowings ~~intends~~on tothe ~~vigorously~~line-of-credit ~~defend~~arrangement. ~~its~~As ~~positions. At~~of ~~this~~September 30, ~~time~~2015, ~~GSWC~~Registrant ~~does~~had ~~not~~$4.8 ~~believe~~million ain ~~potential~~debt ~~loss~~issuance iscosts ~~probable,~~reflected ~~but~~under is"Other ~~unable~~Noncurrent toAssets," ~~predict~~including ~~the~~$113,000 ~~final~~associated ~~outcome~~with ofRegistrant's ~~these~~syndicated ~~matters~~credit ~~in the pending rate case~~facility.

Hearings on BVES’s GRC, including the matters discussed above, were held in September 2012. In November 2012, GSWC filed a motion to introduce new information regarding the results of a study on mandatory testing recently received on BVES’s transmission and distribution poles. Bringing this new study data to the CPUC will help support the requests for capital expenditures. The administrative law judge assigned to this GRC re-opened the record to receive additional testimony on this study, and to conduct additional evidentiary hearings. DRA has challenged the results of the study, and requested that BVES provide additional information. A proposed decision for this GRC is now expected later in 2013.15

~~Renewable~~Table ~~Portfolio~~of ~~Standard~~Contents

InNote ~~December 2011,~~2 a new renewable standards procurement standards (“RPS”) law went into effect which changed, among other things, the prior RPS requirement based upon annual procurement targets to multi-year procurement targets. Under the new RPS law, BVES must procure sufficient RPS-eligible resources to meet: (i) any RPS procurement requirement deficit for any year prior to 2011, and (ii) RPS procurement requirements for the 2011 — ~~2013~~Regulatory compliance period by no later than December 31, 2013. BVES’ latest RPS reports under the new law were submitted to the CPUC in December 2012, and did not reflect any RPS procurement deficiencies nor any potential or actual penalties. Accordingly, no provision for loss has been recorded in the financial statements as of March 31, 2013.Matters:

In ~~December 2012,~~accordance ~~GSWC~~with ~~entered~~accounting ~~into~~principles afor ~~ten~~rate-~~year~~regulated ~~agreement~~enterprises, ~~with~~Registrant arecords ~~third~~regulatory ~~party~~assets, towhich ~~purchase~~represent ~~renewable~~probable ~~energy~~future ~~credits~~recovery ~~(“RECs”).~~of ~~Under~~costs ~~the~~from ~~terms~~customers ofthrough the ~~agreement~~ratemaking process, and regulatory liabilities, which isrepresent ~~subject~~probable future refunds that are to ~~CPUC~~be ~~approval~~credited to customers through the ratemaking process. At September 30, ~~GSWC~~2015, ~~would~~Registrant ~~purchase~~had approximately ~~582~~$67.9 million of regulatory assets,~~000~~ ~~RECs~~net ~~over~~of aregulatory ~~ten~~liabilities, not accruing carrying costs. Of this amount, $39.3 million relates to the underfunded position in Registrant's pension and other post-~~year~~retirement ~~period~~obligations, ~~which~~$7.2 ~~would~~million berelates ~~used~~to ~~towards~~a ~~meeting~~memorandum account authorized by the CPUC’ to track unrealized gains and losses on BVES's ~~RPS~~purchase ~~procurement~~power ~~requirements~~contracts over the term of the contracts, and $15. In4 ~~February 2013~~million relates to deferred income taxes representing accelerated tax benefits flowed through to customers, ~~GSWC~~which ~~filed~~will ~~for~~be ~~CPUC~~included ~~approval~~in rates concurrently with recognition of ~~this~~the ~~agreement~~associated future tax expense. The remainder relates to other items that do not provide for or incur carrying costs.

InRegulatory ~~November 2011,~~assets ~~GSWC~~represent ~~filed~~costs ~~for~~incurred ~~CPUC~~by ~~approval~~GSWC for ~~the~~which ~~purchase~~it ofhas ~~RECs~~received ~~from~~or ~~the~~expects ~~Los~~to ~~Angeles~~receive ~~County~~rate ~~Sanitation~~recovery ~~District~~in the future. In ~~July~~determining the probability of costs being recognized in other periods, GSWC considers regulatory rules ~~2012~~and decisions, past practices, and other facts or circumstances that would indicate if recovery is probable. If the CPUC ~~approved~~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 ~~purchase~~asset's value. ~~BVES~~ Regulatory ~~intends~~assets toare ~~apply~~offset ~~these~~against ~~RECS~~regulatory ~~towards~~liabilities ~~either~~within ~~its~~each ~~pre~~rate-~~2011~~making ~~RPS~~area. Amounts ~~requirements~~expected to be collected or ~~its~~refunded ~~2011-2013~~in ~~requirements The~~the ~~RECs~~next ~~will~~twelve bemonths ~~included~~have been classified as ~~part~~current ofassets ~~the~~and ~~electric~~current ~~supply~~liabilities ~~cost~~by ~~balancing~~rate-making ~~account~~area. As ~~when~~of ~~the~~September 30, ~~RECs~~2015, ~~are~~GSWC ~~applied~~had ~~towards~~a ~~the~~total ~~RPS~~of ~~requirements~~$151.3 ~~during~~million ~~the~~in ~~fourth~~net ~~quarter~~regulatory assets, of ~~2013~~which $4.1 million of regulatory liabilities were included in “Other Current Liabilities.” Regulatory assets, less regulatory liabilities, included in the consolidated balance sheets are as follows:

Note 3 — Earnings per Share/Capital Stock:



(dollars in thousands)	September 30, 2015			December 31, 2014
GSWC
Water Revenue Adjustment Mechanism, net of Modified Cost Balancing Account	$	43,645		$	9,369
Base Revenue Requirement Adjustment Mechanism	4,652			7,761
Costs deferred for future recovery on Aerojet case	12,930			13,629
Pensions and other post-retirement obligations (Note 7)	41,582			43,426
Derivative unrealized loss (Note 4)	7,246			3,339
Flow-through taxes, net (Note 6)	15,421			17,612
Low income rate assistance balancing accounts	8,645			9,109
Other regulatory assets	22,390			23,259
Various refunds to customers	(5,249		)	(1,800		)
Total	$	151,262		$	125,704

InRegulatory ~~accordance~~matters ~~with~~are ~~the~~discussed ~~accounting~~in ~~guidance~~detail ~~for~~in ~~participating~~the ~~securities~~consolidated ~~and~~financial ~~earnings~~statements ~~per~~and ~~share (“EPS”), Registrant uses~~ the ~~“two-class”~~notes ~~method~~thereto ofincluded ~~computing~~in ~~EPS.~~the ~~The “two~~Form 10-~~class”~~K ~~method is an earnings allocation formula that determines EPS~~ for ~~each~~the ~~class~~year ofended ~~common~~December 31, ~~stock~~2014 ~~and~~filed ~~participating security. AWR has participating securities related to its stock-based awards that earn dividend equivalents on an equal basis~~ with ~~AWR’s Common Shares (~~the ~~“Common Shares”)~~SEC. In The ~~applying~~discussion ~~the~~below ~~“two-class”~~focuses ~~method,~~on ~~undistributed~~significant ~~earnings~~matters ~~are~~and ~~allocated~~developments tosince ~~both~~December 31, ~~common shares and participating securities~~2014.

15Alternative-Revenue Programs:

~~Table~~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 ~~Contents~~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. Based on CPUC guidelines, recovery periods relating to the majority of GSWC’s WRAM/MCBA balances range between 18 and 24 months.

~~The~~GSWC ~~following~~has isimplemented asurcharges ~~reconciliation~~to recover its WRAM/MCBA balances as of ~~Registrant’s~~December 31, 2014. For the three and nine months ended September 30, 2015, surcharges (net ~~income~~of surcredits) of approximately $1,586,000 and ~~weighted~~$1,676,000, ~~average~~respectively, ~~Common~~were ~~Shares~~billed ~~outstanding~~to ~~for~~customers ~~calculating~~to ~~basic~~recover previously incurred under-collections in the WRAM/MCBA accounts. During the nine months ended September 30, 2015, GSWC recorded additional net ~~income~~under-collections ~~per~~in ~~share:~~the WRAM/MCBA accounts of $36 million. The increase in the WRAM balance in 2015 is due to water conservation by our customers in response to the ongoing drought conditions in California. Lower water usage results in an increase in under-collections recorded in the WRAM accounts. As of September 30, 2015, GSWC had a net aggregated regulatory asset of $43.6 million which is comprised of a $45.6 million under-collection in the WRAM accounts and a $2.0 million over-collection in the MCBA accounts.

Basic:			For The Three Months Ended March 31,
(in thousands, except per share amounts)			2013		2012
Net income			$	13,465	$	10,115
Less: (a)		Distributed earnings to common shareholders	6,839		5,273
		Distributed earnings to participating securities	107		35
Undistributed earnings			6,519		4,807
(b)	Undistributed earnings allocated to common shareholders		6,419		4,775
	Undistributed earnings allocated to participating securities		100		32
Total income available to common shareholders, basic (a)+(b)			$	13,258	$	10,048
Weighted average Common Shares outstanding, basic			19,265		18,831
Basic earnings per Common Share			$	0.69	$	0.53

~~Diluted~~Table ~~EPS is based upon the weighted average number~~ of Common Shares, including both outstanding shares and shares potentially issuable in connection with stock options granted under Registrant’s 2000 and 2008 Employee Plans, and the 2003 Directors Plan, and net income. At March 31, 2013 and 2012, there were 176,048 and 566,406 options outstanding, respectively, under these Plans. At March 31, 2013 and 2012, there were also 145,208 and 147,078 restricted stock units outstanding, respectively.Contents

~~The~~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 they are recorded. Due to the state-mandated water conservation targets, which are in effect through the end of February 2016, GSWC has recorded significant amounts in the WRAM under-collection during the nine months ended September 30, 2015. If GSWC continues to experience decreases in water consumption, the 2015 WRAM under-collection balances may not be fully collectible within 24 months under current CPUC amortization guidelines. There is also a ~~reconciliation~~CPUC-stipulated ofcap ~~Registrant’s~~on total net ~~income~~WRAM/MCBA surcharges in a given calendar year of 10% of the last authorized revenue requirement. This cap and/or ~~weighted~~the ~~average~~current ~~Common~~amortization ~~Shares~~guidelines ~~outstanding~~could result in GSWC deferring the recognition of revenue for ~~calculating~~portions ~~diluted~~of ~~net~~the ~~income~~WRAM/MCBA, ~~per~~which ~~share:~~we estimate to be collected subsequent to 24 months following the end of the fiscal year.

Diluted:	For The Three Months Ended March 31,
(in thousands, except per share amounts)	2013		2012
Common shareholders earnings, basic	$	13,258	$	10,048
Undistributed earnings for dilutive stock options	—		32
Total common shareholders earnings, diluted	$	13,258	$	10,080
Weighted average common shares outstanding, basic	19,265		18,831
Stock-based compensation (1)	46		142
Weighted average common shares outstanding, diluted	19,311		18,973
Diluted earnings per Common Share	$	0.69	$	0.53

For BVES, the CPUC approved the Base Revenue Requirement Adjustment Mechanism (“BRRAM”), which adjusts base revenues to adopted levels. In November 2014, the CPUC issued a final decision on BVES's general rate case, setting rates and adopted revenues for the years 2013 through 2016. In March 2015, surcharges were implemented to collect the 2014 BRRAM under-collection of $3.1 million over 24 months. As of September 30, 2015, GSWC had a regulatory asset of $4.7 million under-collection in the BRRAM.

~~(1) In~~Other ~~applying~~Regulatory the treasury stock method of reflecting the dilutive effect of outstanding stock-based compensation in the calculation of diluted EPS, 176,048 and 456,318 stock options at March 31, 2013 and 2012, respectively, were deemed to be outstanding in accordance with accounting guidance on earnings per share. All of the 145,208 and 147,078 restricted stock units at March 31, 2013 and 2012, respectively, were included in the calculation of diluted EPS for the three months ended March 31, 2013 and 2012.Matters:

NoProcurement stock options outstanding as of March 31, 2013 had an exercise price greater than the average market price of AWR’s Common Shares for the three months ended March 31, 2013. As of March 31, 2012, 110,013 stock options were outstanding but not included in the computation of diluted EPS because the related option exercise price was greater than the average market price of AWR’s Common Shares for the three months ended March 31, 2012. There were 75 stock options outstanding at March 31, 2012, but not included in the computation of diluted EPS because they were anti-dilutive. There were no stock options outstanding at March 31, 2013 that were anti-dilutive.Audits:

~~During~~In December 2011, the ~~three~~CPUC ~~months~~issued ~~ended~~a ~~March 31,~~final ~~2013~~decision adopting a settlement between GSWC and ~~2012,~~the ~~Registrant~~CPUC ~~issued~~on ~~46,293~~its investigation of certain work orders and ~~69,512~~charges ~~Common~~paid ~~Shares,~~to a specific contractor used previously for ~~approximately~~numerous ~~$625,000~~construction ~~and~~projects ~~$1,403,000,~~primarily ~~respectively,~~in ~~under~~one ~~Registrant’~~of GSWC's ~~Common~~three ~~Share~~main ~~Purchase~~geographic ~~and~~water ~~Dividend~~regions. As ~~Reinvestment~~part ~~Plan~~of ~~(“DRP”),~~ the ~~401(k) Plan,~~settlement ~~the~~reached ~~2000~~with ~~and~~the ~~2008~~CPUC ~~Employee~~on ~~Plans~~this matter, ~~and~~GSWC ~~the~~agreed ~~2003~~to ~~Directors~~be ~~Plan.~~subject Into ~~addition,~~three ~~Registrant~~separate ~~purchased~~independent ~~42,597~~audits ~~and~~of ~~221,932~~its ~~Common~~procurement ~~Shares~~practices onover ~~the~~a ~~open~~period ~~market~~of ~~during~~ten years from the ~~three~~date ~~months~~the ~~ended~~settlement ~~March 31,~~was ~~2013~~approved ~~and~~by ~~2012,~~the ~~respectively,~~CPUC. The ~~under~~audits ~~Registrant~~cover GSWC’s ~~401(k) Plan~~procurement ~~and~~practices ~~the~~for ~~DRP.~~contracts with other contractors from 1994 forward. The ~~Common~~first ~~Shares~~audit ~~purchased~~started byin ~~Registrant~~2014 ~~were~~and ~~used~~covered toalmost ~~satisfy~~a ~~the~~20-year ~~requirements~~period offrom ~~these~~January ~~plans~~1, 1994 through September 30, 2013.

~~During~~In March 2015, the ~~three~~accounting ~~months~~firm ~~ended~~engaged ~~March 31,~~by ~~2013~~the CPUC to conduct the first independent audit issued its final report to the CPUC’s Division of Water and ~~2012~~Audits (“DWA”). The final report, ~~AWR~~which ~~paid~~was ~~quarterly~~issued ~~dividends~~on ofa ~~approximately~~confidential $6basis, included GSWC's responses to the accounting firm’s findings, as well as the firm’s responses to GSWC's comments.8 DWA ~~million~~informed GSWC that it does not intend to pursue further investigation, refunds, or $0penalties in respect of past procurement activities as a result of the final report.~~355~~ Furthermore, ~~per~~in ~~share~~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, ~~$5.3~~as ~~million~~such, orORA $0withdrew its request to have further review of this matter in the pending general rate case.28 At ~~per~~this ~~share~~time, ~~respectively~~GSWC does not believe that a loss associated with any disallowances and/or penalties from this first audit is likely.

16Rural Acquisition

~~Table~~In June 2013, GSWC entered into an Asset Purchase Agreement (the "Agreement") to acquire all of ~~Contents~~the operating water assets of Rural Water Company (“Rural”). In June 2015, the CPUC approved the acquisition of Rural, including GSWC's recovery of the purchase price through customer rates. On October 14, 2015, GSWC completed the transaction for an aggregate purchase price of $1.7 million and, as a result, GSWC will serve approximately 960 new customers near the City of Arroyo Grande in the county of San Luis Obispo, California, which is near GSWC's Santa Maria customer service area in Coastal California. GSWC is in the process of evaluating the purchase price allocation; however, the acquisition is not material to Registrant’s financial position or results of operations.

~~Note 4 — Derivative Instruments:~~17

~~GSWC~~Table ~~purchases certain power at a fixed cost depending on the amount~~ of power and the period during which the power is purchased under a purchased power contract. The contract is subject to the accounting guidance for derivatives and requires mark-to-market derivative accounting. The CPUC has authorized GSWC to establish a regulatory asset and liability memorandum account to offset the entries required by the accounting guidance. Accordingly, all unrealized gains and losses generated from the purchased power contract 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, having no impact on GSWC’s earnings. Upon expiration of the purchased power contract, the balance in this regulatory memorandum account will be zero. As of March 31, 2013 there was a $1.5 million cumulative unrealized loss which has been included in the memorandum account.Contents

InNote ~~January 2012,~~3 ~~GSWC~~— ~~executed~~Earnings aper ~~new~~Share/Capital purchased power master agreement. The agreement is subject to CPUC approval. If approved, GSWC will be able to purchase 12 megawatts (“MWs”) of base load energy at a fixed price to be negotiated upon CPUC approval of the agreement. GSWC plans to file for approval of the agreement with the CPUC in the second quarter of 2013. GSWC also intends to request CPUC approval of a regulatory asset and liability memorandum account for the new contract to offset the entries required by the accounting guidance on derivatives.Stock:

~~The~~In accordance with the accounting guidance for ~~fair~~participating ~~value~~securities ~~measurements~~and ~~applies~~earnings toper ~~all~~share ~~financial~~(“EPS”), ~~assets~~Registrant ~~and~~uses ~~financial~~the ~~liabilities~~“two-class” method of computing EPS. The “two-class” method is an earnings allocation formula that ~~are~~determines ~~being~~EPS ~~measured~~for ~~and~~each ~~reported~~class onof acommon ~~fair~~stock ~~value~~and ~~basis~~participating security. AWR ~~Under~~has ~~the~~participating ~~accounting~~securities ~~guidance,~~related ~~GSWC~~to ~~makes~~restricted ~~fair~~stock ~~value~~units ~~measurements~~that earn dividend equivalents on an equal basis with AWR’s Common Shares that ~~are~~have ~~classified~~been issued under AWR's 2000 and ~~disclosed~~2008 inStock ~~one~~Incentive ofPlans and the ~~following~~2003 ~~three~~and ~~categories:~~2013 Non-Employee Directors Stock Plans. In applying the “two-class” method, undistributed earnings are allocated to both common shares and participating securities.

~~Level~~The 1:following ~~Unadjusted~~is ~~quoted~~a ~~prices~~reconciliation inof ~~active~~Registrant’s ~~markets~~net ~~that~~income ~~are~~and ~~accessible~~weighted ataverage ~~the~~Common ~~measurement~~Shares ~~date~~outstanding used for ~~identical,~~calculating ~~unrestricted~~basic ~~assets~~net orincome ~~liabilities;~~per share:

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



Basic:	For The Three Months Ended September 30,				For The Nine Months Ended September 30,
(in thousands, except per share amounts)	2015		2014		2015		2014
Net income	$	21,079	$	21,171	48,876		47,546
Less: (a) Distributed earnings to common shareholders	8,326		8,244		24,497		23,944
Distributed earnings to participating securities	47		48		134		133
Undistributed earnings	12,706		12,879		24,245		23,469

(b) Undistributed earnings allocated to common shareholders	12,633		12,805		24,114		23,340
Undistributed earnings allocated to participating securities	73		74		131		129

Total income available to common shareholders, basic (a)+(b)	$	20,959	$	21,049	$	48,611	$	47,284

Weighted average Common Shares outstanding, basic	37,063		38,704		37,653		38,744

Basic earnings per Common Share	$	0.57	$	0.54	$	1.29	$	1.22

~~Level~~Diluted 3:EPS ~~Prices~~is orbased ~~valuation~~upon ~~techniques~~the ~~that~~weighted ~~require~~average ~~inputs~~number ~~that~~of ~~are~~Common Shares, including both ~~significant~~outstanding toshares 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 ~~fair~~2003 ~~value~~and ~~measurement~~2013 Non-Employee Directors Stock Plans, and ~~unobservable~~net (iincome.e At September 30, 2015 and 2014, there were 174,306 and 235,584 options outstanding, respectively, under these Plans. At September 30, ~~supported~~2015 byand ~~little~~2014, orthere nowere ~~market~~also ~~activity)~~211,406 and 224,543 restricted stock units outstanding, respectively, including performance shares awarded to officers of the Registrant.

Registrant’s valuation model utilizes 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 receives 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 in Level 3. Accordingly, the valuation of the derivative on Registrant’s purchased power contract has been classified as Level 3 for all periods presented.18

~~The~~Table ~~following table presents changes in the fair value~~ of ~~the derivative for the three months ended March 31, 2013 and 2012.~~Contents

The following is a reconciliation of Registrant’s net income and weighted average Common Shares outstanding for calculating diluted net income per share:

	For the Three Months Ended March 31,
Diluted:	For The Three Months Ended September 30,						For The Nine Months Ended September 30,
(dollars in thousands)	2013			2012
(in thousands, except per share amounts)	2015				2014		2015		2014
Balance, at beginning of the period	$	(3,060	)	$	(7,611	)
Common shareholders earnings, basic	$	20,959			$	21,049	$	48,611	$	47,284
Unrealized gain on purchased power contracts	1,520			105
Undistributed earnings for dilutive stock-based awards	73				74		131		129
Balance, at end of the period	$	(1,540	)	$	(7,506	)
Total common shareholders earnings, diluted	$	21,032			$	21,123	$	48,742	$	47,413
Weighted average common shares outstanding, basic	37,063				38,704		37,653		38,744
Stock-based compensation (1)	203				226		200		219
Weighted average common shares outstanding, diluted	37,266				38,930		37,853		38,963
Diluted earnings per Common Share	$	0.56			$	0.54	$	1.29	$	1.22

~~Note~~(1) In 5applying —the ~~Fair~~treasury ~~Value~~stock method of ~~Financial~~reflecting ~~Instruments:~~the dilutive effect of outstanding stock-based compensation in the calculation of diluted EPS, 174,306 and 235,584 stock options at September 30, 2015 and 2014, respectively, were deemed to be outstanding in accordance with accounting guidance on earnings per share. All of the 211,406 and 224,543 restricted stock units at September 30, 2015 and 2014, respectively, were included in the calculation of diluted EPS for the nine months ended September 30, 2015 and 2014.

~~For~~No ~~cash~~stock ~~and~~options ~~cash~~outstanding ~~equivalents,~~at ~~accounts receivable~~September 30, ~~accounts~~2015 ~~payable~~had ~~and~~an ~~short-term~~exercise ~~debt,~~price ~~the~~greater ~~carrying~~than ~~amount is assumed to approximate fair value due to~~ the ~~short-term~~average ~~nature~~market price of ~~the~~AWR’s ~~amounts.~~Common ~~The~~Shares ~~table~~for ~~below estimates~~ the ~~fair~~nine ~~value~~months ofended ~~long-term debt held by GSWC. Rates available to GSWC at March~~September 3130, ~~2013~~ ~~and~~2015. There ~~December 31, 2012 for debt with similar terms and remaining maturities~~ were ~~used~~no tostock ~~estimate~~options ~~fair~~outstanding ~~value~~at ~~for long-term debt. The interest rates used for the March~~September 3130, ~~2013~~2015 ~~valuation~~or ~~increased~~2014 asthat ~~compared~~were ~~to December, 31, 2012, decreasing the fair value of long~~anti-~~term debt as of March 31, 2013~~dilutive. ~~Changes in the assumptions will produce differing results.~~

	March 31, 2013				December 31, 2012
(dollars in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities:
Long-term debt—GSWC	$	335,829	$	425,443	$	335,791	$	456,792

During the nine months ended September 30, 2015 and 2014, AWR issued 96,157 and 95,331 common shares, for approximately $746,000 and $370,000, respectively, under Registrant’s Common Share Purchase and Dividend Reinvestment Plan (“DRP”), the 401(k) Plan, the 2000 and 2008 Stock Incentive Plans and the 2003 and 2013 Non-Employee Directors Stock Plans.

17On May 19, 2015, AWR's Board of Directors approved a stock repurchase program, authorizing AWR to repurchase up to 1.2 million shares of its Common Shares from time to time through June 30, 2017. Pursuant to this program, Registrant repurchased 574,832 and 961,853 Common Shares on the open market during the three and nine months ended September 30, 2015, respectively. 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 704,782 Common Shares on the open market during 2015. The 2014 stock repurchase program was completed in May 2015. The repurchase of Common Shares is restricted by California law under the same standards which apply to dividend distributions.

~~Table~~During the three months ended September 30, 2015 and 2014, AWR paid quarterly dividends of ~~Contents~~approximately $8.3 million, or $0.224 per share, and $8.2 million, or $0.213 per share, respectively. During the nine months ended September 30, 2015 and 2014, AWR paid quarterly dividends to shareholders of approximately $24.5 million, or $0.65 per share, and $23.9 million, or $0.618 per share, respectively.

~~As previously discussed in~~ Note 4, ~~the~~— ~~accounting~~Derivative guidance for fair value measurements establishes a framework for measuring fair value and requires fair value measurements to be classified and disclosed in one of three levels. The following tables set forth by level, within the fair value hierarchy, GSWC’s long-term debt measured at fair value as of March 31, 2013Instruments:

(dollars in thousands)		Level 1		Level 2			Level 3		Total
Long-term debt—GSWC		—		$	425,443		—		$	425,443

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. These contracts are generally subject to the accounting guidance for derivatives and require mark-to-market derivative accounting. 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.

~~Note 6 — Income Taxes:~~19

AsTable aof 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 ETRs deviated from the statutory rate primarily due to state taxes 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), as well as nondeductible permanent items.Contents

~~Changes~~The long-term contracts executed in ~~Tax~~December ~~Law:~~2014 are subject to the accounting guidance for derivatives and require mark-to-market derivative accounting. Among other things, the CPUC approval in December 2014 also authorized BVES 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 September 30, 2015, there was a $7.2 million unrealized loss in the memorandum account for the purchased power contracts as a result of the recent decrease in energy prices. There were no derivatives as of September 30, 2014. The notional volume of derivatives remaining under these long-term contracts as of September 30, 2015 was approximately 498,000 megawatt hours.

InThe ~~January 2013,~~accounting ~~the~~guidance ~~American~~for ~~Taxpayer~~fair ~~Relief~~value ~~Act~~measurements ofapplies ~~2012~~to ~~extended~~all ~~50%~~financial ~~bonus~~assets ~~depreciation~~and ~~for~~financial ~~qualifying~~liabilities ~~property~~that ~~through~~are ~~2013. Although~~being ~~this~~measured ~~law~~and ~~change~~reported ~~reduces~~on ~~AWR’s~~a ~~current~~fair ~~taxes~~value ~~payable~~basis. Under the accounting guidance, itGSWC ~~does~~makes ~~not~~fair ~~reduce~~value ~~its~~measurements ~~total~~that ~~income~~are ~~tax~~classified ~~expense~~and ordisclosed ~~ETR.~~in one of the following three categories:

~~Note~~Level 71: —Unadjusted ~~Employee~~quoted ~~Benefit~~prices ~~Plans:~~in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

~~The~~Level ~~components~~2: ofQuoted ~~net~~prices ~~periodic~~in ~~benefit~~markets ~~costs,~~that ~~before~~are ~~allocation~~not toactive ~~the~~or ~~overhead~~inputs ~~pool,~~which ~~for~~are ~~Registrant’s~~observable, ~~pension~~either ~~plan,~~directly ~~postretirement~~or ~~plan~~indirectly, ~~and~~for ~~Supplemental~~substantially ~~Executive~~the ~~Retirement~~full ~~Plan~~term ~~(“SERP”)~~of ~~for~~ the ~~three~~asset ~~months~~or ~~ended~~liability; ~~March 31, 2013 and 2012 are as follows:~~or

	Pension Benefits						Other Postretirement Benefits						SERP
(dollars in thousands)	2013			2012			2013			2012			2013		2012
Components of Net Periodic Benefits Cost:
Service cost	$	1,864		$	1,719		$	106		$	112		$	201	$	183
Interest cost	1,731			1,676			113			136			129		122
Expected return on plan assets	(1,893		)	(1,636		)	(95		)	(90		)	—		—
Amortization of transition	—			—			105			105			—		—
Amortization of prior service cost (benefit)	30			30			(50		)	(50		)	40		40
Amortization of actuarial loss	711			778			—			—			85		77
Net periodic pension cost under accounting standards	2,443			2,567			179			213			455		422
Regulatory adjustment — deferred	(510		)	(566		)	—			—			—		—
Total expense recognized, before allocation to overhead pool	$	1,933		$	2,001		$	179		$	213		$	455	$	422

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 ~~expects~~applies tothe ~~contribute~~Black-76 ~~approximately~~model, $6utilizing various inputs that include quoted market prices for energy over the duration of the contract.6 The ~~million~~market ~~and~~prices ~~$150,000~~used to determine the ~~pension~~fair value for this derivative instrument were estimated based on independent sources such as broker quotes and ~~postretirement~~publications ~~medical~~that ~~plans~~are not observable in ~~2013,~~or ~~respectively~~corroborated by the market. NoRegistrant ~~contributions~~received ~~were~~one ~~made~~broker quote to ~~these~~determine ~~plans during~~ the ~~three~~fair ~~months~~value ~~ended~~of ~~March 31,~~its ~~2013~~derivative instrument. InWhen ~~April 2013~~such inputs have a significant impact on the measurement of fair value, ~~Registrant~~the ~~contributed~~instrument $2is categorized as Level 3.1 Accordingly, ~~million~~the tovaluation of the ~~pension~~derivative ~~plan~~on Registrant’s purchased power contract has been classified as Level 3 for all periods presented.

~~Regulatory~~ The ~~Adjustment~~following table presents changes in the fair value of GSWC’s Level 3 derivatives for the three and nine months ended September 30, 2015 and 2014:

In May 2013, the CPUC issued a final decision that once again authorized GSWC to establish a two-way balancing account for its water regions and the general office to track differences between the forecasted annual pension expenses adopted in rates and the actual annual expense recorded by GSWC in accordance with the accounting guidance for pension costs. As of March 31, 2013, GSWC has included a $4.9 million under-collection in the two-way pension balancing account recorded as a regulatory asset (Note 2).



	For The Three Months Ended September 30,					For The Nine Months Ended September 30,
(dollars in thousands)	2015			2014		2015			2014
Fair value at beginning of the period	$	(5,662	)	$	—	$	(3,339	)	$	—
Unrealized loss on purchased power contracts	(1,584		)	—		(3,907		)	—
Fair value at end of the period	$	(7,246	)	$	—	$	(7,246	)	$	—

18Note 5 — Fair Value of Financial Instruments:

~~Table~~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 ~~Contents~~the amounts.

~~Note~~Investments 8held —in ~~Contingencies:~~a Rabbi Trust for the supplemental executive retirement plan are measured at fair value and totaled $9.7 million as of September 30, 2015. 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.

~~Barstow~~The ~~Perchlorate~~table ~~Contamination:~~below estimates the fair value of long-term debt held by GSWC. The fair values as of September 30, 2015 and December 31, 2014 were determined using rates for similar financial instruments of the same duration utilizing Level 2 methods and assumptions. The interest rates used for the September 30, 2015 valuation increased as compared to December 31, 2014, decreasing the fair value of long-term debt as of September 30, 2015. Changes in the assumptions will produce differing results.

On March 8, 2013, the Company was served with four toxic tort lawsuits arising out of the November 19, 2010 detection of perchlorate in one of GSWC’s active production wells in the Barstow service area. The plaintiffs assert that they were affected by the perchlorate, claim negligence by GSWC and seek, among other things, punitive and compensatory damages. GSWC is the only named defendant in all four lawsuits. GSWC believes that these lawsuits are without merit and intends to vigorously defend itself in this matter. At this time, management is unable to estimate a loss or range of loss, if any, resulting from these pending lawsuits, but does not believe a loss is probable.20

~~Condemnation~~Table of ~~Properties:~~Contents

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: (i) that the owner of utility property may contest whether the condemnation is actually necessary and in the public interest, and (ii) that the owner is entitled to receive the fair market value of its property if the property is ultimately taken.



	September 30, 2015				December 31, 2014
(dollars in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities:
Long-term debt—GSWC	$	325,862	$	397,598	$	326,090	$	417,057

~~The~~Note ~~City~~6 of— ~~Claremont~~Income (“Claremont”) located in GSWC’s Region III, has expressed various concerns to GSWC about rates charged by GSWC and the effectiveness of the CPUC’s rate-setting procedures. In January 2012, the Claremont City council members directed staff to pursue analyses required for potential acquisition of the water system and allocated funds from its general reserve for such analyses. In November 2012, Claremont made an offer to acquire GSWC’s water system servicing Claremont. GSWC rejected the offer and informed the City that the system is not for sale. Claremont continues to express a desire to potentially take the system by eminent domain; however, Claremont and GSWC have agreed to hold meetings to further discuss alternatives, rates and other concerns of the City. GSWC serves approximately 11,000 customers in Claremont.Taxes:

InAs ~~April 2011,~~a anregulated ~~organization~~utility, GSWC ~~called~~treats certain ~~Ojai~~temporary ~~FLOW~~differences ~~(Friends~~as offlow-through ~~Locally~~adjustments ~~Owned~~in ~~Water)~~computing its income ~~started~~tax aprovision ~~local~~consistent ~~campaign~~with ~~for~~ the ~~Casitas~~income ~~Municipal~~tax ~~Water~~approach ~~District~~approved ~~(“CMWD”)~~by tothe ~~purchase~~CPUC ~~GSWC’s~~for ~~Ojai~~ratemaking ~~water system~~purposes. In Flow-through ~~March 2013,~~adjustments ~~the~~increase ~~CMWD~~or ~~passed~~decrease tax ~~resolutions~~expense ~~authorizing~~in ~~the~~one ~~establishment~~period, ofwith aan ~~Community~~offsetting decrease ~~Facilities~~or ~~District~~increase ~~(“CFD”)~~occurring ~~and,~~in ~~among~~another ~~other~~period. Giving ~~things,~~effect ~~authorized~~to athese ~~special~~temporary ~~election~~differences ~~for~~as ~~the~~flow-through ~~purposes~~adjustments oftypically results ~~levying~~in a ~~special~~greater variance between the effective tax ~~via~~rate ~~the~~(“ETR”) ~~Mello-Roos~~and ~~Community~~the ~~Facilities~~statutory ~~District~~federal ~~Act~~income oftax ~~1982~~rate ~~(“Mello-Roos~~in ~~Act”). The~~any ~~special~~given ~~tax~~period than would beotherwise ~~used~~exist toif ~~provide~~GSWC ~~funding~~were not required to account for ~~the~~its ~~potential~~income ~~acquisition~~taxes ofas a regulated enterprise. GSWC’'s ~~Ojai~~ETR ~~system~~was by42.7% ~~eminent~~and ~~domain~~40.7% Onfor ~~March~~the three months ended September 2630, ~~2013~~2015 and 2014, ~~GSWC~~respectively, ~~filed~~and a41.6% ~~petition~~and in40.5% for the ~~Superior~~nine ~~Court~~months ended September 30, ~~Ventura~~2015 ~~County~~and ~~which~~2014, ~~among~~respectively. GSWC's ~~other~~ETRs ~~things,~~deviated ~~challenges~~from the ~~CMWD’s~~statutory ~~ability~~rate primarily due to ~~utilize~~state ~~the~~taxes ~~Mello-Roos~~and ~~Act~~differences tobetween ~~fund~~book ~~such~~and ~~action. At~~taxable ~~this~~income ~~time,~~that ~~GSWC~~are istreated ~~unable~~as toflow-through ~~predict~~adjustments ~~the~~in ~~outcome~~accordance ofwith ~~that~~regulatory ~~petition.~~requirements ~~GSWC~~(primarily ~~serves~~related ~~approximately~~to 3plant,~~000~~ ~~customers~~rate-case inand ~~Ojai~~compensation items), as well as permanent items.

~~Except~~AWR's consolidated ETR was 40.6% for the ~~City~~three ofmonths ~~Claremont~~ended ~~and~~September ~~the~~30, ~~City~~2015 ofas ~~Ojai,~~compared ~~Registrant~~to is38.9% ~~currently~~for ~~not~~the ~~involved~~three inmonths ~~activities~~ended ~~related~~September to30, 2014, and was 39.4% for the ~~potential~~nine ~~condemnation~~months ofended ~~any~~September of30, ~~its~~2015 ~~water~~as ~~customer~~compared ~~service~~to ~~areas~~38.8% orfor inthe ~~its~~nine ~~BVES~~months ~~customer~~ended ~~service~~September ~~area~~30, 2014. The NoETR ~~formal~~at ~~condemnation~~the ~~proceedings~~AWR ~~have~~consolidated ~~been~~level ~~filed~~also ~~against~~fluctuated ~~any~~as ofa ~~the~~result ~~Registrant’~~of ASUS's ~~service~~state ~~areas~~income ~~during~~taxes, which vary among the ~~past~~jurisdictions ~~three~~in ~~years~~which it operates.

~~Santa~~Changes ~~Maria~~in ~~Groundwater~~Tax ~~Basin Adjudication~~Law:

InDuring ~~1997~~the fourth quarter of 2014, the ~~Santa~~Company ~~Maria~~reflected ~~Valley~~a ~~Water~~change ~~Conservation~~in ~~District~~its ~~(“plaintiff”)~~tax ~~filed~~method aof ~~lawsuit~~accounting ~~against~~for ~~multiple~~certain ~~defendants,~~repair ~~including~~and ~~GSWC,~~maintenance ~~the~~expenditures ~~City~~pursuant ofto ~~Santa~~regulations ~~Maria,~~issued ~~and~~by ~~several~~the ~~other~~U.S. ~~public~~Treasury ~~water~~Department ~~purveyors~~in September 2013. In ~~The~~connection ~~plaintiff’s~~with ~~lawsuit~~filing ~~sought~~its an2014 ~~adjudication~~federal oftax return during the ~~Santa~~third ~~Maria~~quarter ~~Groundwater~~of ~~Basin~~2015, (the ~~“Basin”).~~Company Afiled ~~stipulated~~an ~~settlement~~application offor ~~the~~an ~~lawsuit~~automatic ~~has~~change ~~been~~in ~~reached~~tax ~~and~~accounting ~~was~~method ~~approved~~with by the ~~courts~~Internal inRevenue ~~February 2008. Among~~Service ~~other~~("IRS") ~~things,~~for the ~~settlement,~~2014 ~~which~~tax ~~was~~year ~~also~~to ~~approved~~implement by the ~~CPUC~~new inmethod ~~May 2013,~~(effective ~~preserves~~January ~~GSWC’s~~1, ~~historical~~2014). The ~~pumping~~tax ~~rights~~accounting ~~and~~method ~~secures~~change ~~supplemental~~included ~~water~~a ~~rights~~cumulative adjustment for ~~use~~2013 inand ~~case~~prior ofyears, ~~drought~~and orpermits ~~other~~the ~~reductions~~expensing inof ~~the~~certain ~~natural~~utility ~~yield~~asset ofreplacement ~~the~~costs ~~Basin. GSWC,~~that ~~under~~were ~~the~~previously ~~stipulation,~~being ~~has~~capitalized aand ~~right~~depreciated tofor ~~10,000~~book ~~acre-feet~~and oftax ~~groundwater~~purposes. As ~~replenishment~~a ~~provided~~result byof the ~~Twitchell Project~~change, the Company will deduct a ~~storage~~significant ~~and~~amount ~~flood~~of ~~control~~asset ~~reservoir~~costs, ~~project~~which ~~operated~~consist byprimarily ~~the~~of ~~plaintiff~~water mains and connections.

~~The~~During ~~court~~the ~~judgment~~fourth ~~also~~quarter ~~awarded~~of 2014, GSWC ~~prescriptive~~recorded ~~rights~~a tocumulative ~~groundwater~~adjustment ~~against~~for ~~the~~2013 ~~non-stipulating~~and ~~parties~~prior ~~and~~years ~~granted~~as ~~GSWC~~well as the ~~right~~2014 toestimated ~~use~~deduction, ~~the~~and ~~Basin~~recognized ~~for~~a ~~temporary~~total ~~storage~~deferred ~~and~~income totax ~~recapture~~liability ~~45 percent~~ of ~~the~~$30.8 ~~return~~million ~~flows~~for ~~that~~federal ~~are~~and ~~generated~~state ~~from~~repair-and-maintenance ~~its~~deductions ~~importation~~as of ~~State~~December ~~Water~~31, ~~Project water~~2014. ~~Pursuant~~ Although to this ~~judgment,~~change ~~the~~reduces ~~court~~AWR’s ~~retained~~current ~~jurisdiction~~taxes ~~over~~payable, ~~all~~it ofdoes ~~the~~not ~~parties~~reduce tototal ~~make~~income ~~supplemental~~tax ~~orders~~expense or ~~to amend~~ the ~~judgment as necessary~~ETR. In

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~~March 2008,~~Note ~~the~~7 ~~non-stipulating~~— ~~parties~~Employee ~~filed~~Benefit notices of appeal. In November 2012, the Appellate Court upheld the Santa Maria judgment, with a remand to the trial court to clarify the narrow issue that non-stipulating parties retained their overlying rights. There is no dispute on this clarification and the required filings will be made with the court in 2013. In December 2012, the Appellate Court further modified the decision clarifying the basis for the overdraft finding that precipitated the prescriptive right finding. In December 2012, the non-stipulating parties filed a request with the California Supreme Court for a review of the Appellate Court findings. In February 2013, the California Supreme Court denied the parties’ request for review of the Appellate Court findings.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 and nine months ended September 30, 2015 and 2014 are as follows:

Environmental Clean-Up and Remediation:



	For The Three Months Ended September 30,
	Pension Benefits						Other Postretirement Benefits						SERP
(dollars in thousands)	2015			2014			2015			2014			2015		2014
Components of Net Periodic Benefits Cost:
Service cost	$	1,569		$	1,411		$	65		$	63		$	204	$	192
Interest cost	1,922			1,880			99			111			163		154
Expected return on plan assets	(2,449		)	(2,225		)	(123		)	(114		)	—		—
Amortization of transition	—			—			—			105			—		—
Amortization of prior service cost (benefit)	30			30			(50		)	(50		)	29		40
Amortization of actuarial (gain) loss	448			—			(131		)	(115		)	108		35
Net periodic pension cost under accounting standards	1,520			1,096			(140		)	—			504		421
Regulatory adjustment — deferred	130			374			—			—			—		—
Total expense recognized, before allocation to overhead pool	$	1,650		$	1,470		$	(140	)	$	—		$	504	$	421

Chadron Plant: GSWC has been involved in environmental remediation and clean-up 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. Recent site assessments have been conducted which showed that there was more gasoline at higher concentrations spread over a larger area than previously measured. Remediation is estimated to take two more years, followed by at least one year of monitoring and reporting. As of March 31, 2013, the total spent to clean-up and remediate GSWC’s plant facility was approximately $3.5 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.



	For The Nine Months Ended September 30,
	Pension Benefits						Other Postretirement Benefits						SERP
(dollars in thousands)	2015			2014			2015			2014			2015		2014
Components of Net Periodic Benefits Cost:
Service cost	$	4,707		$	4,233		$	255		$	261		$	612	$	576
Interest cost	5,766			5,640			327			371			489		462
Expected return on plan assets	(7,347		)	(6,675		)	(369		)	(340		)	—		—
Amortization of transition	—			—			—			313			—		—
Amortization of prior service cost (benefit)	90			89			(150		)	(150		)	87		120
Amortization of actuarial (gain) loss	1,344			—			(237		)	(247		)	324		105
Net periodic pension cost under accounting standards	4,560			3,287			(174		)	208			1,512		1,263
Regulatory adjustment — deferred	392			1,123			—			—			—		—
Total expense recognized, before allocation to overhead pool	$	4,952		$	4,410		$	(174	)	$	208		$	1,512	$	1,263

AsFor ofthe ~~March 31,~~three ~~2013,~~and ~~GSWC~~nine ~~has~~months anended ~~accrued~~September 30, ~~liability~~2015, ~~for~~Registrant ~~the~~contributed ~~estimated additional cost of~~ $15.28 million ~~to complete the clean-up at the site. 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~~$6.7 ~~Management~~million, ~~also~~respectively, ~~believes~~to ~~it is probable that~~ the ~~estimated~~pension ~~additional costs will be approved in rate base by the CPUC~~plan.

~~Other~~Regulatory ~~Litigation~~Adjustment:

~~Registrant~~As isauthorized ~~also~~by ~~subject~~the toCPUC ~~other~~in ~~ordinary~~the ~~routine~~most ~~litigation~~recent ~~incidental~~water toand ~~its~~electric ~~business.~~general ~~Management~~rate ~~believes~~case ~~that~~decisions, ~~rate~~GSWC ~~recovery,~~utilizes ~~proper~~two-way ~~insurance~~balancing ~~coverage~~accounts for its water and ~~reserves~~electric ~~are~~regions inand ~~place~~the general office to ~~insure~~track ~~against~~differences ~~property,~~between ~~general~~the ~~liability~~forecasted annual pension expenses adopted in rates and ~~workers’~~the ~~compensation~~actual ~~claims~~annual ~~incurred~~expense recorded by GSWC in accordance with the ~~ordinary~~accounting ~~course~~guidance offor ~~business~~pension costs. As ~~Registrant~~of isSeptember 30, ~~unable~~2015, toGSWC ~~predict~~had ana ~~estimate~~total of$2.3 million net under-collection in the ~~loss,~~two-way ifpension ~~any,~~balancing ~~resulting~~accounts ~~from~~included ~~any~~as ~~pending~~part ~~suits~~of orthe ~~administrative~~pension ~~proceedings~~regulatory asset (Note 2).

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Note 98 — ~~Business Segments~~Contingencies:

~~AWR~~Condemnation has three reportable segments, water, electric and contracted services, whereas GSWC has two segments, water and electric. AWR has no material assets other than its investments in its subsidiaries on a stand-alone basis. All activities of ~~GSWC are geographically located within California.~~Properties:

~~Activities~~The laws of ~~ASUS~~the ~~and~~State ~~its~~of ~~subsidiaries~~California ~~are~~provide ~~conducted~~for inthe ~~California,~~acquisition ~~Georgia,~~of ~~Maryland,~~public ~~New~~utility ~~Mexico,~~property ~~North~~by ~~Carolina,~~governmental ~~South~~agencies ~~Carolina,~~through ~~Texas~~their ~~and~~power ~~Virginia. Each~~ of ~~ASUS’s~~eminent ~~wholly-owned~~domain, ~~subsidiaries~~also isknown ~~regulated~~as bycondemnation, ~~the~~where ~~state~~doing inso ~~which~~is ~~the~~necessary ~~subsidiary~~and ~~primarily~~in ~~conducts~~the ~~water~~public ~~and/or wastewater operations~~interest. ~~Fees~~ In ~~charged~~addition, ~~for~~these ~~operations~~laws ~~and~~provide ~~maintenance,~~that ~~and~~the ~~renewal~~owner ~~and~~of ~~replacement~~utility ~~services~~property ~~are~~(i) ~~based~~may ~~upon~~contest whether the ~~terms~~condemnation ofis ~~the~~actually ~~contracts~~necessary ~~with~~and in the ~~U.S.~~public ~~government~~interest, ~~which~~and ~~have~~(ii) is ~~been~~entitled ~~filed~~to ~~with~~receive the ~~commissions~~fair inmarket ~~the~~value ~~states~~of inits ~~which~~property ~~ASUS’s~~if ~~subsidiaries~~the ~~are~~property ~~incorporated~~is ultimately taken.

~~The~~Claremont 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 plants are net of respective accumulated provisions for depreciation. Capital additions reflect capital expenditures paid in cash and exclude property installed by developers and conveyed to GSWC.System:

	As Of And For The Three Months Ended March 31, 2013
	GSWC				ASUS		AWR			Consolidated
(dollars in thousands)	Water		Electric		Contracts		Parent			AWR
Operating revenues	$	69,233	$	10,734	$	30,585	$	—		$	110,552
Operating income	21,763		1,833		4,367		—			27,963
Interest expense, net	5,194		376		60		(39		)	5,591
Utility Plant	883,863		40,963		4,712		—			929,538
Depreciation and amortization expense (1)	8,930		592		294		—			9,816
Income tax expense	6,941		722		1,666		(80		)	9,249
Capital additions	17,878		233		314		—			18,425

On November 4, 2014, voters in the City of Claremont ("Claremont" or "the City") approved a measure authorizing the issuance of $135 million in water revenue bonds by the City to finance the acquisition of GSWC's Claremont water system. On December 9, 2014, the City filed an eminent domain lawsuit against GSWC. GSWC does not believe the seizure is necessary and intends to vigorously defend against the potential condemnation. The eminent domain Right to Take trial is scheduled to begin on March 7, 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.

	As Of And For The Three Months Ended March 31, 2012
	GSWC				ASUS		AWR			Consolidated
(dollars in thousands)	Water		Electric		Contracts		Parent			AWR
Operating revenues	$	66,201	$	10,813	$	29,878	$	—		$	106,892
Operating income (loss)	14,851		3,856		4,741		(81		)	23,367
Interest expense, net	5,406		393		54		2			5,855
Utility Plant	853,533		39,526		4,776		—			897,835
Depreciation and amortization expense (1)	9,597		623		270		—			10,490
Income tax expense	4,355		1,400		1,829		42			7,626
Capital additions	13,940		539		488		—			14,967

Ojai System:

In March 2013, Casitas Municipal Water District (1"CMWD") ~~Depreciation~~ ~~computed~~passed onresolutions under the Mello-Roos Community 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 ~~transportation~~Ojai ~~equipment~~system by eminent domain. GSWC filed a petition in the Superior Court and eventually the Court of ~~$250~~Appeals in Ventura County,~~000~~ ~~and~~which, ~~$577~~among other things,~~000~~ ~~for~~challenged the ~~three~~legality ~~months~~of ~~ended~~CMWD’s ~~March~~effort ~~31,~~to ~~2013~~utilize the Mello-Roos Act to acquire property by eminent domain and ~~2012~~to fund legal and expert costs of the planned condemnation. On April 14, ~~respectively~~2015, isthe ~~recorded~~California inCourt ~~administrative~~of Appeals affirmed a prior court's ruling allowing the use of Mello-Roos funding. In May 2015, GSWC filed a petition for review at the Supreme Court of California, which the Supreme Court subsequently denied. Ojai FLOW ("Friends of Locally Owned Water") members were also granted class status by the Superior Court to later file action against GSWC should they be able to prove GSWC’s motions delayed the condemnation action and ~~general~~resulted ~~expenses~~in higher costs for Ojai residents should the system be ultimately taken. GSWC serves approximately 3,000 customers in Ojai.

~~The~~Artesia ~~following table reconciles total utility plant (a key figure for rate-making) to total consolidated assets (in thousands)~~System:

	March 31,
	2013		2012
Total utility plant	$	929,538	$	897,835
Other assets	359,976		348,794
Total consolidated assets	$	1,289,514	$	1,246,629

On October 13, 2014, the City of Artesia's City Council approved a request for a feasibility study on the potential acquisition of GSWC's water system in Artesia. GSWC serves approximately 3,300 customers in Artesia.

21Environmental Clean-Up and Remediation:

~~Table~~ GSWC has been involved in environmental remediation and clean-up 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 ~~Contents~~remediation.

~~Item~~ As 2.of ~~Management~~September 30, 2015, the total spent to clean-up and remediate GSWC’s ~~Discussion~~plant facility was approximately $4.8 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 ~~Analysis~~approved by the CPUC for recovery. As of ~~Financial~~September 30, ~~Condition~~2015, GSWC has a regulatory asset and ~~Results~~an accrued liability for the estimated additional cost of ~~Operations~~$1.4 million to complete the clean-up 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.

~~General~~Other Litigation:

~~The~~Registrant ~~following~~is ~~discussion~~also ~~and~~subject ~~analysis~~to ~~provides~~other ~~information~~ordinary onroutine ~~AWR’s~~litigation ~~consolidated~~incidental ~~operations and assets and where necessary, includes specific references~~ to ~~AWR’s~~its ~~individual~~business. Management ~~segments~~believes ~~and/or~~that ~~other~~rate ~~subsidiaries:~~recovery, ~~GSWC~~proper ~~and~~insurance ~~ASUS~~coverage and ~~its~~reserves ~~subsidiaries. Included~~are in ~~the~~place ~~following~~to ~~analysis~~insure isagainst aproperty, ~~discussion~~general ofliability ~~water~~ and ~~electric~~workers’ ~~gross~~compensation ~~margins. Water~~claims ~~and~~incurred ~~electric~~in ~~gross~~the ~~margins~~ordinary ~~are~~course ~~computed~~of ~~by taking total revenues, less total supply costs~~business. Registrant ~~uses~~is ~~these~~unable ~~gross~~to ~~margins~~predict ~~and~~an ~~related~~estimate ~~percentages~~of asthe ~~important~~loss, ~~measures~~if inany, ~~evaluating~~resulting ~~its~~from ~~operating~~any ~~results. Registrant~~pending ~~believes~~suits ~~these~~or ~~measures~~administrative ~~are useful internal benchmarks in evaluating the performance of GSWC~~proceedings.

The discussions and tables included in the following analysis also present Registrant’s operations in terms of earnings per share by business segment. Registrant believes that the disclosure of earnings per share by business segment provides investors with clarity surrounding the performance of its differing services and information that could be indicative of future performance for each business segment. Registrant reviews these measurements regularly and compares them to historical periods and to its operating budget as approved.23

~~However,~~Table these measures, which are not presented in accordance with Generally Accepted Accounting Principles (“GAAP”), may not be comparable to similarly titled measures used by other entities and should not be considered as an alternative to operating income or earnings per share, which are determined in accordance with GAAP. A reconciliation of water and electric gross margins to the most directly comparable GAAP measures are included in the table under the section titled “Operating Expenses: Supply Costs.” Reconciliations to AWR’s diluted earnings per share are included in the discussions under the section titled “Summary of First Quarter Results by Segment.”Contents

~~Overview~~Note 9 — Business Segments:

~~Registrant’s~~AWR ~~revenues,~~has ~~operating~~three ~~income~~reportable ~~and~~segments, ~~cash flows are earned primarily through delivering potable~~ water, toelectric ~~homes~~ and ~~businesses~~contracted inservices, ~~California~~whereas ~~and the delivery of electricity in the Big Bear area of San Bernardino County. Rates charged to~~ GSWC ~~customers~~has ~~are~~two ~~determined~~segments, bywater ~~the~~and ~~CPUC~~electric. On ~~These rates are intended to allow recovery of operating costs and~~ a ~~reasonable~~stand-alone ~~rate~~basis, ofAWR ~~return~~has onno ~~capital. Registrant~~material ~~plans~~assets toother ~~continue~~than tocash ~~seek additional rate increases in future years from the CPUC to recover operating~~ and ~~supply~~its ~~costs~~investments ~~and receive reasonable returns on invested capital. Capital expenditures~~ in ~~future~~its ~~years at GSWC are expected to remain at much higher levels than depreciation expense~~subsidiaries. ~~When necessary, Registrant obtains funds from external sources in the capital markets and through bank borrowings.~~

~~Through~~All ~~its~~activities ~~contracted~~of ~~services business~~GSWC, ~~Registrant’s~~a ~~revenues~~rate-regulated utility, ~~operating~~are ~~expenses~~geographically ~~and~~located ~~cash~~within ~~flows~~California. Activities ~~are~~of ~~also~~ASUS ~~earned~~and byits ~~providing~~subsidiaries ~~water~~are ~~and/or~~conducted ~~wastewater~~in ~~services~~California, ~~including~~Georgia, ~~the~~Maryland, ~~operation~~New Mexico, ~~maintenance~~North Carolina, ~~renewal~~South Carolina, Texas and ~~replacement~~Virginia. Each of ~~the~~ASUS’s ~~water~~wholly ~~and/or~~owned ~~wastewater~~subsidiaries ~~systems,~~is atregulated ~~various~~by ~~military~~the ~~installations~~state ~~pursuant~~in towhich ~~50-year~~the ~~firm,~~subsidiary ~~fixed-price~~primarily ~~contracts.~~conducts ~~The~~water ~~contract~~and/or ~~price~~wastewater ~~for~~operations. Fees ~~each~~charged offor ~~these~~operations ~~contracts~~and ismaintenance ~~subject~~and torenewal ~~prospective~~and ~~price~~replacement ~~redeterminations.~~services ~~Additional~~are ~~revenues~~based ~~generated~~upon bythe ~~contract~~terms ~~operations~~of ~~are~~the ~~primarily~~contracts ~~dependent~~with onthe ~~new~~U.S. ~~construction~~government, ~~activities~~which ~~under~~have ~~contract~~been ~~modifications. As~~filed aas ~~result,~~necessary ~~ASUS~~with isthe ~~subject~~regulatory tocommissions ~~risks~~in ~~that~~the ~~are~~states ~~different~~in ~~than~~which ~~those~~ASUS’s ofsubsidiaries ~~GSWC~~are incorporated.

OnThe ~~May 9,~~tables ~~2013,~~below ~~the~~set ~~CPUC~~forth ~~issued~~information arelating ~~final~~to ~~decision on~~ GSWC’s ~~general~~operating ~~water~~segments, ~~rate~~ASUS ~~case~~and ~~approving~~its ~~new~~subsidiaries ~~rates for 2013 — 2015 at GSWC’s three water regions~~ and ~~the~~other ~~general office~~matters. ~~The~~ Total ~~new~~assets ~~rates~~by ~~are~~segment ~~retroactive to January 1, 2013 and~~ are ~~expected~~not topresented ~~generate approximately $10 million in additional annual revenues in 2013~~ below, as ~~compared~~certain toof ~~2012~~Registrant’s ~~adopted~~assets ~~revenues. The~~are ~~2013~~not ~~adopted~~tracked ~~water gross margin is projected to increase~~ by ~~approximately $14 million, or 6~~segment.~~6%, as compared to the 2012 adopted water gross margin.~~ The ~~new~~utility ~~rates~~plant ~~have~~amounts ~~been~~are ~~reflected~~net inof ~~the~~respective ~~results~~accumulated ofprovisions ~~operations~~ for ~~the first quarter of 2013~~depreciation. ~~Among~~ Capital ~~other~~additions ~~things,~~reflect ~~the~~capital ~~final~~expenditures ~~decision~~paid ~~also~~in ~~reduced~~cash ~~the overall composite depreciation rates~~ and ~~approved~~exclude ~~the~~government-funded ~~recovery~~capital ofexpenditures ~~various memorandum accounts which tracked certain costs that were previously expensed as incurred. As a result,~~ for ~~the~~ASUS ~~three~~and ~~months~~property ~~ended~~installed ~~March 31,~~by ~~2013,~~developers ~~GSWC~~and ~~recorded~~conveyed ~~a decrease of approximately $3.0 million in certain operating expenses related~~ to ~~the approval of these memorandum accounts in the final decision~~GSWC.



	As Of And For The Three Months Ended September 30, 2015
	GSWC						AWR			Consolidated
(dollars in thousands)	Water		Electric		ASUS		Parent			AWR
Operating revenues	$	97,273	$	7,946	$	27,756	$	—		$	132,975
Operating income (loss)	33,178		903		7,108		(4		)	41,185
Interest expense, net	5,117		267		7		(25		)	5,366
Utility plant	977,549		50,294		4,276		—			1,032,119
Depreciation and amortization expense (1)	9,773		468		271		—			10,512
Income tax expense (benefit)	11,819		290		2,590		(305		)	14,394
Capital additions	22,608		2,881		152		—			25,641

Table of Contents



	As Of And For The Three Months Ended September 30, 2014
	GSWC						AWR			Consolidated
(dollars in thousands)	Water		Electric		ASUS		Parent			AWR
Operating revenues	$	96,700	$	8,614	$	33,013	$	—		$	138,327
Operating income	31,185		1,161		7,549		—			39,895
Interest expense, net	4,976		319		10		(10		)	5,295
Utility plant	950,256		40,333		4,854		—			995,443
Depreciation and amortization expense (1)	9,643		593		313		—			10,549
Income tax expense (benefit)	10,749		270		2,857		(400		)	13,476
Capital additions	17,093		726		275		—			18,094

The pretax impact of the final decision related to the first quarter of 2013 is summarized as follows (in thousands, except per share amounts):



	As Of And For The Nine Months Ended September 30, 2015
	GSWC				AWR			Consolidated
(dollars in thousands)	Water		Electric	ASUS	Parent			AWR
Operating revenues	$	256,358	26,804	65,364	$	—		$	348,526
Operating income (loss)	79,391		4,398	12,825	(9		)	96,605
Interest expense, net	15,026		891	23	(33		)	15,907
Utility plant	977,549		50,294	4,276	—			1,032,119
Depreciation and amortization expense (1)	29,482		1,235	879	—			31,596
Income tax expense (benefit)	26,550		1,606	4,349	(679		)	31,826
Capital additions	52,770		6,560	518	—			59,848

	Pretax Income		EPS
Increase in water gross margin due to rate changes	$	2,928	$	0.09
Decrease in depreciation due to lower composite rates*	1,244		0.04
One-time recovery of previously incurred costs**	3,057		0.09
Pretax operating income increase	$	7,229	$	0.22

*Table ~~$0.01~~of ~~per share decreased administrative and general expenses~~Contents

**$0.01 per share impacted the water gross margin



	As Of And For The Nine Months Ended September 30, 2014
	GSWC					AWR			Consolidated
(dollars in thousands)	Water		Electric	ASUS		Parent			AWR
Operating revenues	$	253,689	27,398	$	74,826	$	—		$	355,913
Operating income (loss)	76,762		4,589	12,358		(46		)	93,663
Interest expense, net	15,415		990	132		(72		)	16,465
Utility plant	950,256		40,333	4,854		—			995,443
Depreciation and amortization expense (1)	28,840		1,868	896		—			31,604
Income tax expense (benefit)	25,081		1,426	4,603		(1,015		)	30,095
Capital additions	50,744		1,406	1,564		—			53,714

~~Summary~~(1) Depreciation expense computed on GSWC’s transportation equipment of ~~First~~$140,000 ~~Quarter~~and ~~Results~~$201,000 byfor ~~Segment~~the three months ended September 30, 2015 and 2014, respectively, and $514,000 and $698,000 for the nine months ended September 30, 2015 and 2014, respectively, is recorded in administrative and general expenses.

The following table ~~below~~reconciles ~~sets~~total ~~forth~~utility ~~the~~plant ~~first~~(a ~~quarter~~key ~~diluted~~figure ~~earnings~~for ~~per~~rate-making) ~~share~~to bytotal ~~business~~consolidated ~~segment~~assets (in thousands):

	Diluted Earnings per Share
	September 30,
	3 Months Ended
	2015			2014
	3/31/2013		3/31/2012			CHANGE
Total utility plant	$	1,032,119		$	995,443
Water	$	0.51	$	0.28		$	0.23
Other assets	330,045			330,672
Electric	0.04		0.11			(0.07		)
Total consolidated assets	$	1,362,164		$	1,326,115
Contracted services	0.14		0.15			(0.01		)
AWR (parent)	—		(0.01		)	0.01
Consolidated diluted earnings per share, as reported	$	0.69	$	0.53		$	0.16

~~For~~Note ~~the~~10 ~~three~~— ~~months~~Military ended March 31, 2013, diluted earnings per share from the water segment increased by $0.23 to $0.51 per share, as compared to $0.28 per share for the same period of 2012. Impacting the comparability of the two periods were the following itemsPrivatization:

~~· An~~The ~~increase~~50-year incontracts with the ~~water gross margin of approximately $3~~U.~~7 million, or $0~~S.11 ~~per~~government ~~share~~to operate, ~~during~~maintain ~~the~~and ~~three~~perform ~~months~~construction ~~ended~~activities ~~March 31,~~on ~~2013~~the aswater ~~compared~~and/or towastewater ~~the~~systems ~~same~~at ~~period~~various inmilitary ~~2012,~~bases ~~due~~are ~~primarily~~subject to ~~new~~periodic ~~rates~~price ~~effective~~redeterminations ~~January 1,~~or ~~2013~~economic ~~approved~~price byadjustments ~~the~~and ~~CPUC~~modifications onfor ~~May 9,~~changes ~~2013,~~in ~~as discussed above~~circumstances. ASUS ~~There~~has ~~was~~experienced ~~also~~delays ~~an increase~~ in ~~the~~redetermining ~~water~~prices ~~gross~~as ~~margin~~required ofby ~~approximately~~the ~~$361,000,~~terms orof $0these contracts.01 As ~~per~~a ~~share~~result, ~~due~~price toredeterminations, ~~rate~~when ~~increases~~finally ~~for certain pre-~~approved, ~~capital~~can ~~projects~~be ~~filed~~retrospective ~~with the CPUC during 2012~~ and ~~2013~~prospective.

~~· A~~During ~~decrease~~the inthird ~~operating~~quarter ~~expenses~~of ~~(other~~2015, ~~than~~the ~~supply costs) of $3~~U.2S. ~~million,~~government orapproved ~~$0.10~~price ~~per~~redeterminations ~~share,~~related ~~during~~to the ~~three~~operations ~~months~~at ~~ended~~Andrews ~~March 31,~~Air ~~2013,~~Force ~~due~~Base in ~~large part~~Maryland, toFort ~~the~~Jackson ~~CPUC’s~~in ~~approval~~South ofCarolina ~~memorandum~~and ~~accounts~~the ~~totaling~~military ~~$2.7~~bases ~~million,~~in ~~or $0.08 per share~~Virginia, ~~primarily~~as ~~for~~well ~~certain~~as ~~previously~~an ~~expensed~~asset ~~operating~~transfer ~~costs,~~at ~~and~~two of the ~~approval~~Virginia ofbases. ASUS ~~lower~~received ~~depreciation~~contract ~~expense~~modifications ~~resulting~~ from athe ~~decrease~~U.S. ingovernment ~~the~~for ~~composite~~these ~~rates,~~price asredeterminations ~~discussed~~and ~~above. Excluding~~asset ~~the~~transfer, ~~impact~~which ofincluded ~~these~~retroactive ~~memorandum~~operation ~~accounts~~ and ~~the~~maintenance ~~lower~~management ~~depreciation~~fees ~~expense,~~for ~~operating~~prior ~~expenses~~periods. Revenues ~~increased~~from byoperation ~~approximately~~and ~~$674,000,~~maintenance ormanagement ~~$0.02~~fees ~~per~~are ~~share,~~recognized ~~due~~when ~~primarily~~services toare ~~increases~~rendered. Accordingly, ~~in:~~ASUS ~~(i) maintenance~~recorded ~~expense~~approximately ~~for~~$3.5 ~~planned~~million ~~maintenance~~of ~~work,~~retroactive ~~and~~revenues ~~(ii) administrative~~ and ~~general~~pretax ~~expenses~~operating ~~related~~income toin ~~legal~~connection ~~and~~with ~~other~~these ~~outside~~contract ~~services~~modifications ~~costs. These~~during ~~increases~~the ~~were~~three ~~partially~~months ~~offset~~ended bySeptember a30, ~~decrease~~2015, inof ~~operation~~which ~~expenses~~$3.0 ~~resulting~~million ~~primarily~~is ~~from~~for ~~lower~~periods ~~bad~~prior ~~debt~~to ~~expense~~2015.

~~· An~~In ~~overall~~September ~~decrease~~2014, inthe ~~interest~~U.S. ~~expense~~government ~~(net~~approved ofprice ~~interest~~redeterminations ~~income~~related ~~and~~to ~~other~~the ~~non-operating~~operations ~~items)~~at ofFort ~~$323~~Bragg in North Carolina,~~000~~ Fort Jackson and Andrews Air Force Base, orwhich also included retroactive operation and maintenance management fees and retroactive renewal and replacement fees for prior periods. ASUS recorded approximately $02.014 ~~per~~million ~~share,~~of ~~due~~retroactive ~~primarily~~revenues toand ~~GSWC’s~~pretax ~~October 2012~~operating ~~redemption~~income ofin connection with these contract modifications during the three months ended September 30, 2014. In addition, approximately $86.0 million related to renewal and replacement funds was also recorded in "billings in excess of ~~its~~costs 7and estimated earnings on contracts", which will be recognized in construction revenues (along with the related construction costs) when the work is performed.~~55%~~ Unbilled ~~notes~~receivables for ASUS represent completed construction revenues and operation and maintenance management fees earned but not yet billed, and ~~lower~~also ~~short-term~~renewal ~~bank~~and ~~loan~~replacement ~~balances~~fees ~~during~~due from the ~~first~~U.S. ~~three~~government ~~months~~but ofnot ~~2013~~yet billed.

· A decrease in the effective income tax rate for the three months ended March 31, 2013 as compared to the same period in 2012, increasing earnings by $0.01 per share. The change in the tax rate is primarily due to changes between book and taxable income that are treated as flow-through adjustments in accordance with regulatory requirements.25

23Table of Contents

~~Table~~Item 2. Management’s Discussion and Analysis of ~~Contents~~Financial Condition and Results of Operations

For the three months ended March 31, 2013, diluted earnings from electric operations decreased by $0.07 per share due, in large part, to CPUC approval in March 2012 for the recovery of legal and outside services costs previously expensed as incurred during the period September 1, 2007 through March 31, 2011 in connection with GSWC’s efforts to procure renewable energy resources. As a result, GSWC recorded a $1.2 million, or $0.04 per share, reduction in operating expenses in 2012, with no similar decrease during the three months ended March 31, 2013. Excluding the impact of this item, diluted earnings from electric operations decreased by $0.03 per share due primarily to: (i) a decrease in the electric gross margin of $317,000, or $0.01 per share, as compared to the same period in 2012, (ii) an increase of approximately $457,000, or $0.01 per share, in other operating expenses resulting from higher legal and other outside services incurred in connection with the pending rate case, and higher maintenance costs during the three months ended March 31, 2013, and (iii) an increase in the effective income tax rate for the three months ended March 31, 2013 as compared to the same period in 2012, decreasing earnings by $0.01 per share.General

~~GSWC’s~~The ~~electric~~following ~~division~~discussion ~~continues~~and ~~its~~analysis ~~efforts~~provides toinformation ~~comply~~on ~~with~~AWR’s ~~the~~consolidated ~~renewable~~operations ~~energy~~and ~~portfolio~~assets ~~standards. In~~and, ~~March~~where ~~2013~~necessary, ~~GSWC~~includes ~~filed~~specific anreferences ~~application~~to ~~with~~AWR’s ~~the~~individual ~~CPUC~~segments toand/or ~~recover~~other ~~additional~~subsidiaries: ~~costs~~GSWC ~~incurred~~and ~~from~~ASUS ~~April~~and 1,its ~~2011~~subsidiaries. Included ~~through~~in ~~December~~the ~~31,~~following ~~2012~~analysis ~~totaling~~is ~~approximately~~a ~~$835,000,~~discussion ~~which~~of ~~have~~GSWC's ~~been~~water ~~expensed~~and aselectric ~~incurred~~gross margins. InWater ~~May~~and ~~2013,~~electric ~~the~~gross ~~CPUC~~margins ~~approved~~are ~~the~~each ~~recovery~~computed ofby ~~these~~subtracting ~~additional~~total supply costs from total revenues. Registrant uses these gross margins and ~~accordingly,~~related ~~GSWC~~percentages ~~will~~as ~~record~~an aimportant ~~regulatory~~measure ~~asset~~in ~~and~~evaluating aits ~~corresponding~~operating ~~decrease~~results. Registrant tobelieves ~~legal~~these ~~and~~measures ~~outside~~are ~~services~~useful ~~costs~~internal ~~during~~benchmarks ~~the~~in ~~second~~evaluating ~~quarter~~the performance of ~~2013~~GSWC.

~~For~~The discussions and tables included in the ~~three~~following ~~months~~analysis ~~ended~~also ~~March 31,~~present ~~2013,~~Registrant’s ~~diluted~~operations in terms of earnings ~~from~~per ~~contracted~~share by business segment. Registrant believes that the disclosure of earnings per share by business segment provides investors with clarity surrounding the performance of our different services. Registrant ~~remained~~reviews ~~relatively~~these ~~unchanged~~measurements asregularly ~~compared~~and compares them to ~~prior~~historical ~~year.~~periods ~~There~~and ~~was~~to anour ~~increase~~operating budget; however, these measures, which are not presented in ~~renewal~~accordance with generally accepted accounting principles (“GAAP”), may not be comparable to similarly titled measures used by other entities and ~~replacement~~should ~~work~~not atbe ~~Fort~~considered ~~Bliss~~as an alternative to operating income or earnings per share, which are determined in ~~Texas~~accordance with GAAP. A reconciliation of water and ~~Fort~~electric ~~Jackson~~gross inmargins ~~South~~to ~~Carolina~~the ~~under~~most directly comparable GAAP measures are included in the ~~terms~~table ofunder the ~~respective~~section ~~50-year~~titled ~~contracts~~“Operating ~~with~~Expenses: ~~the~~Supply UCosts.S.” Reconciliations ~~government~~to ~~which~~AWR’s ~~was~~diluted ~~offset~~earnings byper ashare ~~decrease~~are included in ~~construction~~the ~~activity~~discussions atunder ~~Fort~~the ~~Bragg~~section intitled ~~North~~“Summary ~~Carolina~~of Third Quarter Results by Segment.”

The following discussion and analysis provide information on AWR’s consolidated operations and where necessary, includes specific references to AWR’s individual segments and/or other subsidiaries: GSWC and ASUS and its subsidiaries.Overview

24GSWC's revenues, operating income and cash flows are earned primarily through delivering potable water to homes and businesses in California and the delivery of electricity in the Big Bear area of San Bernardino County, California. Rates charged to GSWC customers are determined by the California Public Utilities Commission ("CPUC"). These rates are intended to allow recovery of operating costs and a reasonable rate of return on capital. Factors affecting the financial performance of GSWC are described under Forward-Looking Information and include: the process and timing of setting rates charged to customers; the ability to recover, and the process for recovering in rates, the costs of distributing water and electricity and overhead costs; pressures on water supply caused by the drought in California, changing weather patterns in the West, population growth, more stringent water quality standards and deterioration in water quality and water supply from a variety of causes; fines, penalties and disallowances by the CPUC arising from failures to comply with regulatory requirements; the impact of increased water quality standards and environmental regulations on the cost of operations and capital expenditures; changes in long-term customer demand due to changes in usage patterns as a result of conservation efforts, mandatory regulatory changes impacting the use of water, such as mandatory restrictions on water use, new landscaping or irrigation requirements, recycling of water by customers and purchases of recycled water by customers from other third parties; capital expenditures needed to upgrade water systems; and increased costs and risks associated with litigation relating to water quality and water supply, including suits initiated by GSWC to protect its water supply and condemnation actions initiated by municipalities. GSWC plans to continue to seek additional rate increases in future years from the CPUC to recover operating and supply costs and receive reasonable returns on invested capital. Capital expenditures in future years at GSWC are expected to remain at higher levels than depreciation expense. When necessary, GSWC obtains funds from external sources in the capital markets and through bank borrowings.

~~Table~~ASUS's revenues, operating income and cash flows are earned by providing water and/or wastewater services, including the operation, maintenance, renewal and replacement of ~~Contents~~the water and/or wastewater systems at various military installations pursuant to 50-year firm, fixed-price contracts. The contract price for each of these contracts is subject to prospective price redeterminations or economic price adjustments. Additional revenues generated by contract operations are primarily dependent on new construction activities under contract modifications with the U.S. government or agreements with other third-party prime contractors. As a result, ASUS is subject to risks that are different from those of GSWC. Factors affecting the financial performance of the Military Utility Privatization Subsidiaries are described under Forward-Looking Information and include delays in receiving payments from and the redetermination and equitable adjustment of prices under contracts with the U.S. government; fines, penalties or disallowance of costs by the U.S. government; and termination of contracts and suspension or debarment for a period of time from contracting with the government due to violations of federal law and regulations in connection with military utility privatization activities. ASUS's financial performance is also dependent upon its ability to accurately estimate costs in bidding on firm fixed-price contracts for additional construction work at existing bases and the costs of seeking new contracts for the operation and maintenance and renewal and replacement of water and/or wastewater services at military bases. ASUS is actively pursuing utility privatization contracts of other military bases to expand the contracted services segment.

~~Consolidated Results of Operations — Three Months Ended March 31, 2013 and 2012 (amounts in thousands, except per share amounts):~~26

	3 Months			3 Months
	Ended			Ended			$			%
	3/31/2013			3/31/2012			CHANGE			CHANGE
OPERATING REVENUES
Water	$	69,233		$	66,201		$	3,032		4.6	%
Electric	10,734			10,813			(79		)	-0.7	%
Contracted services	30,585			29,878			707			2.4	%
Total operating revenues	110,552			106,892			3,660			3.4	%
OPERATING EXPENSES
Water purchased	10,732			9,552			1,180			12.4	%
Power purchased for pumping	1,639			1,556			83			5.3	%
Groundwater production assessment	3,187			3,323			(136		)	-4.1	%
Power purchased for resale	3,680			3,191			489			15.3	%
Supply cost balancing accounts	1,371			3,437			(2,066		)	-60.1	%
Other operation expenses	5,454			7,426			(1,972		)	-26.6	%
Administrative and general expenses	17,907			16,829			1,078			6.4	%
Depreciation and amortization	9,816			10,490			(674		)	-6.4	%
Maintenance	3,934			3,331			603			18.1	%
Property and other taxes	4,148			4,105			43			1.0	%
ASUS construction expenses	20,733			20,285			448			2.2	%
Gain on sale of property	(12		)	—			(12		)	100	%
Total operating expenses	82,589			83,525			(936		)	-1.1	%
OPERATING INCOME	27,963			23,367			4,596			19.7	%
OTHER INCOME AND EXPENSES
Interest expense	(5,778		)	(6,070		)	292			-4.8	%
Interest income	187			215			(28		)	-13.0	%
Other, net	342			229			113			49.3	%
	(5,249		)	(5,626		)	377			-6.7	%
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE	22,714			17,741			4,973			28.0	%
Income tax expense	9,249			7,626			1,623			21.3	%
NET INCOME	$	13,465		$	10,115		$	3,350		33.1	%
Basic earnings per common share	$	0.69		$	0.53		$	0.16		30.2	%
Fully diluted earnings per common share	$	0.69		$	0.53		$	0.16		30.2	%

Table of Contents

25During the third quarter of 2015, ASUS received retroactive contract modifications from the U.S. government for price redeterminations related to Andrews Air Force Base, Fort Jackson and the military bases in Virginia. As a result, included in earnings for the three and nine months ended September 30, 2015 was approximately $3.5 million and $3.0 million, respectively, in retroactive revenues related to these redeterminations for prior periods.

~~Table~~Summary of ~~Contents~~Third Quarter Results by Segment

~~Operating~~The ~~Revenues~~table below sets forth the third quarter diluted earnings per share by business segment:

General



	Diluted Earnings per Share
	Three Months Ended
	9/30/2015		9/30/2014		CHANGE
Water	$	0.43	$	0.40	$	0.03
Electric	0.01		0.01		—
Contracted services	0.12		0.12		—
AWR (parent)	—		0.01		(0.01		)
Consolidated diluted earnings per share, as reported	$	0.56	$	0.54	$	0.02

~~Registrant~~Water relies upon rate approvals by the CPUC to recover operating expenses and to provide for a return on invested and borrowed capital used to fund utility plant for GSWC. Registrant relies on price redeterminations and equitable adjustments by the U.S. government in order to recover operating expenses and provide a profit margin for ASUS. If adequate rate relief and price redeterminations and adjustments are not granted in a timely manner, operating revenues and earnings can be negatively impacted. ASUS’s earnings have also been positively impacted by additional construction projects at the Military Utility Privatization Subsidiaries.Segment:

~~Water~~For the three months ended September 30, 2015, diluted earnings from the water segment increased by $0.03 to $0.43 per share as compared to $0.40 per share for the same period in 2014. Excluding surcharges approved by the CPUC for the recovery of previously incurred costs, which have no impact on operating income, the following items impacted the comparability of the two periods:

~~For~~• ~~the~~An ~~three~~increase ~~months~~in ~~ended~~the ~~March 31, 2013, revenues from~~ water ~~operations~~gross ~~increased~~margin ~~$3.0~~of ~~million to~~ $~~69.2 million~~672,000, asor ~~compared to~~ $660.201 ~~million~~per ~~for the three months ended March 31~~share, ~~2012. The increase in water revenues is primarily~~ due to ~~higher water rates~~ CPUC-approved bythird-year ~~the CPUC effective January 1, 2013 in connection with the general~~ rate ~~case~~increases ~~for all three water regions~~ and ~~the~~advice ~~general~~letter ~~office,~~filings asfor ~~previously discussed. The revenue increase adopted by~~ the ~~CPUC~~completion ~~for~~of ~~2013~~certain iscapital ~~approximately~~projects ~~$10~~not ~~million~~previously ~~over~~included ~~2012~~in ~~on a normalized sales basis~~rates.

~~Billed~~• ~~water~~Excluding ~~consumption~~supply ~~for~~costs, ~~the~~a ~~first~~decrease ~~quarter~~in ofoperating ~~2013~~expenses ~~decreased~~of ~~by approximately 4~~$1.0%3 asmillion, ~~compared~~or to$0.02 ~~the~~per ~~same~~share, ~~period~~due inprimarily ~~2012.~~to Alower ~~change~~administrative inand ~~consumption~~general ~~does~~expenses, ~~not~~which ~~have~~declined aby ~~significant~~$1.4 ~~impact~~million onresulting ~~earnings~~mostly ~~due~~from tolower ~~the~~legal ~~CPUC-approved~~and ~~Water~~other ~~Revenue~~outside ~~Adjustment~~service ~~Mechanism~~costs ~~(“WRAM”)~~related ~~account~~to incondemnation ~~place~~and inother ~~all~~activities, ~~three~~as ~~water~~compared ~~regions.~~to ~~GSWC records~~ the ~~difference~~same ~~between~~period ~~what~~in it2014. ~~bills~~However, ~~its~~GSWC ~~water~~expects ~~customers~~to ~~and~~incur ~~that~~additional ~~which~~legal iscosts ~~authorized~~to bydefend ~~the~~two ~~CPUC~~of inits ~~the~~water ~~WRAM~~systems ~~accounts~~from ascondemnation ~~regulatory assets or liabilities~~actions.

~~Electric~~• A decrease in other income, net of other expenses of $534,000, or $0.01 per share, due to a decrease in interest income, as well as losses recorded on investments held for a retirement benefit plan resulting from market conditions during the third quarter of 2015.

~~For~~• ~~the~~An ~~three~~increase ~~months~~in ~~ended~~the ~~March 31,~~effective ~~2013,~~income ~~revenues~~tax ~~from~~rate ~~electric~~("ETR"), ~~operations~~decreasing ~~decreased~~earnings ~~slightly~~by to $100.701 ~~million~~per share as compared to ~~$10.8 million for~~ the same period in ~~2012~~2014. In ~~February 2012,~~The ~~GSWC~~increase ~~filed~~in ~~its~~the ~~BVES~~ETR ~~rate~~was ~~case~~due ~~for~~primarily ~~rates~~to inchanges ~~years~~between ~~2013~~book ~~through~~and ~~2016.~~taxable Ifincome ~~rates~~that are ~~approved~~treated as ~~filed,~~flow-through ~~the~~adjustments ~~rate increases are expected to generate approximately $1.3 million~~ in ~~annual~~accordance ~~revenues~~with onregulatory ~~a normalized sales basis~~requirements. ~~A final decision on this rate case is expected from the CPUC in late 2013.~~

~~Billed~~• ~~electric~~The ~~usage~~cumulative ~~increased~~impact byof ~~4.5%~~lower ~~during~~common ~~the~~shares ~~three~~outstanding ~~months~~resulting ~~ended~~from ~~March 31,~~the ~~2013~~2014 asand ~~compared~~2015 tostock ~~the~~repurchase ~~three months ended March 31~~programs, ~~2012. Due~~increasing towater ~~the~~earnings ~~CPUC~~by ~~approved~~approximately ~~Base~~$0.02 ~~Revenue~~per ~~Requirement~~share ~~Adjustment~~as ~~Mechanism,~~compared ~~which adjusts certain revenues~~ to ~~adopted levels authorized by~~ the ~~CPUC,~~third ~~this~~quarter ~~change~~of ~~in usage did not have a significant impact on earnings~~2014.

~~Contracted~~Billed ~~Services~~water consumption for the third quarter of 2015 decreased by approximately 24% as compared to the same period in 2014 due to water conservation by our customers in response to the ongoing drought conditions in California. Mandatory water conservation and rationing have been implemented across all of GSWC's water systems to help the communities it serves meet the state's reduction mandates; therefore, water consumption is expected to continue to be lower during the remainder of 2015 as compared to the same period last year. GSWC records the difference between what it bills its water customers and that which is authorized by the CPUC in the WRAM accounts, as regulatory assets for future recovery. Excluding surcharges, which again have no impact on operating income, GSWC's water gross margin approximates the authorized gross margin approved by the CPUC.

~~Revenues~~As ~~from~~required ~~contracted~~by ~~services~~the ~~are~~accounting ~~composed~~guidance offor ~~construction~~alternative ~~revenues~~revenue ~~(including~~programs, ~~renewals~~GSWC ~~and~~is ~~replacements)~~required ~~and~~to ~~management~~collect ~~fees~~its ~~for~~WRAM ~~operating~~balances, ~~and~~net ~~maintaining~~of ~~the~~its ~~water~~MCBA, ~~and/or~~within ~~wastewater~~24 ~~systems~~months atfollowing ~~military bases. For~~ the ~~three~~year ~~months~~in ~~ended~~which ~~March 31,~~they ~~2013,~~are ~~revenues~~recorded. Due ~~from~~to ~~contracted~~the ~~services~~state-mandated ~~were~~water ~~$30.6~~conservation ~~million~~targets, aswhich ~~compared~~are toin ~~$29.9~~effect ~~million~~through ~~for~~ the ~~three~~end ~~months~~of ~~ended~~February ~~March 31~~2016, ~~2012.~~GSWC ~~There~~has ~~was~~recorded ana ~~increase~~$36 inmillion ~~renewal~~WRAM ~~and~~under-collection ~~replacement~~for ~~work~~the atnine ~~Fort~~months ~~Bliss~~ended inSeptember ~~Texas~~30, ~~and~~2015. ~~Fort~~If ~~Jackson~~GSWC incontinues ~~South~~to ~~Carolina~~experience ~~under~~decreases ~~the~~in ~~terms~~water ofconsumption, the ~~respective~~2015 50WRAM under-~~year~~collection ~~contracts~~balances ~~with~~may ~~the~~not ~~U.S.~~be ~~government.~~fully ~~This~~collectible ~~increase~~within ~~was~~24 ~~primarily~~months ~~offset~~under bycurrent aCPUC ~~decrease~~amortization inguidelines. This ~~construction~~could ~~activity~~result ~~at Fort Bragg~~ in ~~North~~GSWC ~~Carolina,~~deferring ~~largely~~the ~~due~~recognition toof ~~favorable~~revenue ~~weather~~for ~~conditions~~portions ~~experienced~~of ~~during~~ the ~~first quarter of 2012~~WRAM, which ~~allowed~~we ~~for~~estimate ~~more construction~~ to be ~~performed~~collected ~~during~~subsequent ~~that~~to ~~period. Weather~~24 ~~conditions~~months ~~for~~following the ~~three~~end ~~months~~of ~~ended~~the ~~March 31,~~fiscal ~~2013 were not as favorable~~year.

~~Operating Expenses:~~27

~~Supply~~Table ~~Costs~~of Contents

~~Supply~~Electric costs for the water segment consist of purchased water, purchased power for pumping, groundwater production assessments and water supply cost balancing accounts. Supply costs for the electric segment consist of purchased power for resale, the cost of natural gas used by BVES’ generating unit and the electric supply cost balancing account. Water and electric gross margins are computed by taking total revenues, less total supply costs. Registrant uses these gross margins and related percentages as an important measure in evaluating its operating results. Registrant believes this measure is a useful internal benchmark in evaluating the utility business performance within its water and electric segments. Registrant reviews these measurements regularly and compares Segment:

26For the three months ended September 30, 2015 and 2014, diluted earnings from the electric segment were $0.01 per share. A decrease in depreciation expense resulting from lower depreciation composite rates approved by the CPUC also resulted in a lower revenue requirement, resulting in no significant impact to earnings.

~~Table~~Contracted ofServices ~~Contents~~Segment:

~~them~~For tothe ~~historical~~three ~~periods~~months ~~and~~ended toSeptember 30, ~~its~~2015 ~~operating~~and ~~budget~~2014, asdiluted ~~approved.~~earnings ~~However,~~from ~~this~~contracted ~~measure,~~services ~~which~~were is$0.12 ~~not~~per ~~presented~~share. There inwas ~~accordance~~an ~~with~~increase ~~Generally~~in ~~Accepted~~monthly ~~Accounting~~operations ~~Principles~~and maintenance (“~~GAAP~~O&M”) management fees as a result of successful resolutions of various price redeterminations received during the third quarter of 2015, ~~may~~increasing ~~not~~earnings beby ~~comparable~~$0.01 per share. These price redeterminations also included a $0.02 per share increase in retroactive O&M management fees, as compared to ~~similarly~~the ~~titled~~retroactive ~~measures~~impact ~~used~~for the price redeterminations received in the same period of 2014. The increase in O&M management fees was offset mostly by ~~other~~an ~~entities~~increase in operating expenses and ~~should~~a ~~not~~decrease bein ~~considered~~construction activity as ancompared ~~alternative~~to the same period in 2014. The lower construction activity as compared to ~~operating~~the ~~income~~third quarter of 2014 was due largely to the completion of several large capital projects during 2014, which isdid ~~determined~~not recur in ~~accordance~~2015. However, ~~with~~during ~~GAAP~~the third quarter of 2015, the U.S. government awarded ASUS approximately $50 million in new construction projects, the majority of which are expected to be completed during the next twelve months.

~~Total~~AWR ~~supply costs comprise the largest segment of total operating expenses. Supply costs accounted for approximately 25% of total operating expenses for the three months ended March 31, 2013 and 2012.~~(parent):

~~The~~Diluted ~~table~~earnings ~~below~~from ~~provides~~AWR ~~the~~(parent) ~~amount~~decreased ofby ~~increases~~$0.01 ~~(decreases),~~per ~~percent~~share ~~changes~~during inthe ~~supply~~third ~~costs,~~quarter ~~and~~of ~~margins~~2015 ~~during~~as compared to the ~~three~~same ~~months~~period ~~ended~~in ~~March 31,~~2014 ~~2013~~due ~~and~~primarily ~~2012~~to ~~(amounts~~higher instate ~~thousands):~~income taxes.

3 Months

Ended

3/31/2013

3/31/2012

Filing Compare · Golden State Water CO