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United States securities and exchange commission logo
November 3, 2021
Eva G. Tang
Chief Financial Officer
American States Water Company
630 E. Foothill Blvd.
San Dimas, CA 91773-1212
Re: American States
Water Company
Form 10-K for the
Fiscal Year ended December 31, 2020
Response Letter
dated October 14, 2021
File No. 001-14431
Dear Ms. Tang:
We have reviewed your October 14, 2021 response to our comment
letter and have the
following comment. In some of our comments, we may ask you to provide us
with information
so we may better understand your disclosure.
Please respond to this comment within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your response to this comment, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
September 20, 2021 letter.
Form 10-K for the Fiscal Year ended December 31, 2020
Management's Discussion and Analysis, page 27
1. We note that you have
proposed to re-label your non-GAAP measures of Water Gross
Margin and Electric
Gross Margin in response to prior comment one, to replace the term
Gross Margin with
"Operating Revenues, less Supply Costs (non-GAAP)," and we see
that you have made this
change in your third quarter interim report.
However, you propose to
retain your compilation of the measure, deducting supply costs
from revenues, in lieu
of providing a reconciliation using Gross Margin in accordance
with GAAP, as you
believe the most directly comparable GAAP measure is Operating
Revenues. You indicate
that you do not believe a reconciliation to GAAP gross margin is
warranted because the
purpose of your measure is to remove the effects of "pass-through
Eva G. Tang
American States Water Company
November 3, 2021
Page 2
costs" that do not impact profitability, although you have
historically presented your
measures using the gross margin GAAP terminology and disclose that the
company "uses
these gross margins and related percentages as an important measure in
evaluating its
operating results..., [and] believes these measures are useful
internal benchmarks in
evaluating the utility business performance within its water and
electric segments..., [and]
provide investors with clarity surrounding the performance of its
segments."
We continue to believe that you should present gross margin in
accordance with GAAP,
as defined in the FASB Master Glossary, as the most directly
comparable measure for use
in the reconciliation that is required by Item 10(e) of Regulation
S-K. Unless you are able
to show how a measure that is unburdened by any expense would be more
comparable
than gross margin to your Water and Electric non-GAAP measures, please
further revise
your non-GAAP disclosures as requested in prior comment one.
Please also revise your various disclosures pertaining to rate cases
having references to
margin-based measures or changes therein, such as "authorized water
gross margin"
and "adopted electric gross margin," to clarify how the authorized or
adopted measures
correspond to the pass-through costs and your non-GAAP measures.
You may contact Jenifer Gallagher, Staff Accountant at (202) 551-3706 or
Karl Hiller,
Branch Chief at (202) 551-3686 if you have any questions.
FirstName LastNameEva G. Tang Sincerely,
Comapany NameAmerican States Water Company
Division of
Corporation Finance
November 3, 2021 Page 2 Office of Energy
& Transportation
FirstName LastName