Artesian Resources (ARTNA) 10-Q 7 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	6 Months Ended
	Jun. 30, 2015	Aug. 03, 2015	Jun. 30, 2014
Entity Information [Line Items]
Entity Registrant Name	Artesian Resources Corporation
Entity Central Index Key	863,110
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Class A Stock [Member]
Entity Information [Line Items]
Entity Public Float			$ 174,721,000
Entity Common Stock, Shares Outstanding		8,048,802
Class B Stock [Member]
Entity Information [Line Items]
Entity Public Float			$ 6,052,000
Entity Common Stock, Shares Outstanding		881,452

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
ASSETS
Utility plant, at original cost (less accumulated depreciation 2015-$102,091; 2014-$97,932)	$ 398,923	$ 393,793
Current assets
Cash and cash equivalents	360	243
Accounts receivable (less allowance for doubtful accounts 2015 - $339; 2014 - $250)	5,943	5,065
Income tax receivable	1,784	3,068
Unbilled operating revenues	1,954	3,314
Materials and supplies	1,759	1,890
Prepaid property taxes	3	1,401
Prepaid expenses and other	2,032	1,667
Total current assets	13,835	16,648
Other assets
Non-utility property (less accumulated depreciation 2015 - $497; 2014 - $468)	3,997	4,030
Other deferred assets, net	5,277	5,181
Total other assets	9,274	9,211
Regulatory assets, net	2,538	2,561
Total Assets	424,570	422,213
Stockholders' equity
Common stock	8,929	8,912
Preferred stock	0	0
Additional paid-in capital	92,938	92,545
Retained earnings	26,053	24,148
Total stockholders' equity	127,920	125,605
Long-term debt, net of current portion	104,295	104,954
Total stockholders' equity and long term debt	232,215	230,559
Current liabilities
Lines of credit	13,816	18,491
Overdraft payable	537	141
Current portion of long-term debt	1,276	1,245
Accounts payable	2,617	3,783
Accrued expenses	1,731	1,513
Deferred income taxes	397	812
Accrued interest	1,036	1,428
Customer deposits	726	713
Other	3,583	2,066
Total current liabilities	25,719	30,192
Commitments and contingencies	0	0
Deferred credits and other liabilities
Net advances for construction	9,671	10,228
Postretirement benefit obligation	268	268
Deferred investment tax credits	572	581
Utility plant retirement cost obligation	919	913
Deferred income taxes	59,306	57,043
Total deferred credits and other liabilities	70,736	69,033
Net contributions in aid of construction	95,900	92,429
Liabilities and Stockholders' equity	$ 424,570	$ 422,213

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS Parenthetical - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
ASSETS
Utility plant, at original cost (less accumulated depreciation)	$ 102,091	$ 97,932
Current assets
Accounts receivable (allowance for doubtful accounts)	339	250
Other assets
Non utility property (less accumulated depreciation)	$ 497	$ 468

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Operating revenues
Water sales	$ 17,474	$ 15,950	$ 33,512	$ 31,034
Other utility operating revenue	894	893	1,756	1,686
Non-utility operating revenue	1,168	1,048	2,229	2,071
Total Operating Revenues	19,536	17,891	37,497	34,791
Operating expenses
Utility operating expenses	8,501	9,070	17,162	17,587
Non-utility operating expenses	607	632	1,127	1,190
Depreciation and amortization	2,192	2,155	4,401	4,293
State and federal income taxes	2,191	1,312	3,955	2,713
Property and other taxes	1,060	1,073	2,195	2,213
Total Operating Expenses	14,551	14,242	28,840	27,996
Operating income	4,985	3,649	8,657	6,795
Other income (expense), net
Allowance for funds used during construction (AFUDC)	43	95	67	146
Miscellaneous	(41)	(39)	549	583
Income before interest charges	4,987	3,705	9,273	7,524
Interest charges	1,754	1,743	3,503	3,479
Net income	$ 3,233	$ 1,962	$ 5,770	$ 4,045
Income per common share:
Basic (in dollars per share)	$ 0.36	$ 0.22	$ 0.65	$ 0.46
Diluted (in dollars per share)	$ 0.36	$ 0.22	$ 0.64	$ 0.45
Weighted average common shares outstanding
Basic (in shares)	8,926	8,884	8,922	8,865
Diluted (in shares)	8,960	8,928	8,958	8,914
Cash dividends per share of common stock	$ 0.2183	$ 0.2119	$ 0.4334	$ 0.4207

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 5,770	$ 4,045
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,401	4,293
Deferred income taxes, net	1,839	558
Stock compensation	46	67
AFUDC, equity portion	(44)	(94)
Changes in assets and liabilities:
Accounts receivable, net of allowance for doubtful accounts	(878)	(411)
Income taxes receivable	1,284	255
Unbilled operating revenues	1,360	158
Materials and supplies	131	(261)
Prepaid property taxes	1,398	1,488
Prepaid expenses and other	(365)	(388)
Other deferred assets	(178)	(173)
Regulatory assets	(6)	(45)
Accounts payable	(1,166)	(798)
Accrued expenses	218	1,583
Accrued interest	(392)	(17)
Customer deposits and other, net	1,530	(232)
NET CASH PROVIDED BY OPERATING ACTIVITIES	14,948	10,028
CASH FLOWS USED IN INVESTING ACTIVITIES
Capital expenditures (net of AFUDC, equity portion)	(9,581)	(9,704)
Proceeds from sale of assets	17	13
NET CASH USED IN INVESTING ACTIVITIES	(9,564)	(9,691)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (repayments) borrowings under lines of credit agreements	(4,675)	307
Increase in overdraft payable	396	136
Net advances and contributions in aid of construction	3,080	1,655
Change in deferred debt issuance costs	61	60
Net proceeds from issuance of common stock	364	1,216
Dividends paid	(3,865)	(3,724)
Issuance of long-term debt	0	548
Principal repayments of long-term debt	(628)	(563)
NET CASH USED IN FINANCING ACTIVITIES	(5,267)	(365)
NET INCREASE IN CASH AND CASH EQUIVALENTS	117	(28)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	243	422
CASH AND CASH EQUIVALENTS AT END OF PERIOD	360	394
Supplemental Disclosures of Cash Flow Information:
Utility plant received as construction advances and contributions	695	50
Interest paid	3,895	3,496
Income taxes paid	$ 718	$ 1,573

GENERAL

GENERAL	6 Months Ended
	Jun. 30, 2015
GENERAL [Abstract]
GENERAL	NOTE 1 Artesian Resources Corporation, or Artesian Resources, includes income from the earnings of our eight wholly owned subsidiaries and the income derived from our Service Line Protection Plans described below. The terms "we", "our", "Artesian" and the "Company" as used herein refer to Artesian Resources and its subsidiaries. DELAWARE REGULATED SUBSIDIARIES Artesian Water Company, Inc., or Artesian Water, our principal subsidiary, is the oldest and largest public water utility in the State of Delaware and has been providing water service within the state since 1905. Artesian Wastewater Management, Inc., or Artesian Wastewater, is a regulated entity that owns wastewater collection and treatment infrastructure and provides wastewater services to customers in Delaware as a regulated public wastewater service company. As of June 30, 2015 , million MARYLAND REGULATED SUBSIDIARIES Artesian Water Maryland, Inc., or Artesian Water Maryland, began operations in August 2007. Artesian Water Maryland distributes and sells water to residential, commercial, industrial and municipal customers in Cecil County, Maryland. Artesian Wastewater Maryland, Inc., or Artesian Wastewater Maryland, is a regulated wastewater entity in the State of Maryland and was incorporated on June 3, 2008. Artesian Wastewater Maryland is able to provide public wastewater services to customers in the State of Maryland. PENNSYLVANIA REGULATED SUBSIDIARY Artesian Water Pennsylvania, Inc., or Artesian Water Pennsylvania, began operations upon receiving recognition as a regulated public water utility by the Pennsylvania Public Utility Commission, or PAPUC, in 2002. It provides water service to a residential community in Chester County. Artesian Water Pennsylvania filed an application with the PAP 4, 2005. OTHER SUBSIDIARIES Our three other subsidiaries, none of which are regulated, are Artesian Utility Development, Inc., or Artesian Utility, Artesian Development Corporation, or Artesian Development, and Artesian Consulting Engineers, Inc., or Artesian Consulting Engineers. Artesian Utility was formed in 1996. We currently operate wastewater treatment facilities for the town of Middletown, in southern New Castle County, or Middletown, under a 20-year contract that expires in July 2022. Artesian Utility has operated the WSLP Plan and the SSLP Plan since April 2012. Artesian Resources initiated the WSLP Plan in M arch 2005. The s expanded in the second quarter of 2008 to include maintenance or repair to customers' sewer lines. The SSLP Plan covers all parts, material and labor required to repair or replace participating customers' leaking or clogged sewer lines up to an annual limit. Also, in the second quarter of 2010, the WSLP Pla , Artesian Development is a real estate holding company that owns properties, including land zoned for office buildings, a water treatment plant and wastewater facility, as well as property for current operations, including an office facility in Sussex County, Delaware. The facility consists of approximately 10,000 square feet of office space along with nearly 10,000 square feet of warehouse space. This facility allows all of our Sussex County, Delaware operations to be house d in one central location. Artesian Consulting Engineers no longer offers development and architectural services to outside third parties.

BASIS OF PRESENTATION AND ADJUS

BASIS OF PRESENTATION AND ADJUSTMENTS	6 Months Ended
	Jun. 30, 2015
BASIS OF PRESENTATION [Abstract]
BASIS OF PRESENTATION AND ADJUSTMENTS	NOTE 2 – BASIS OF PRESENTATION Basis of Presentation The unaudited condensed consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all the disclosures required in the financial statements included in the Company's annual report on Form 10-K. Accordingly, these financial statements and related notes should be read in conjunction with the financial statements and related notes in the Company's annual report on Form 10-K for fiscal year 2014 as filed with the Securities and Exchange Commission on March 13, 2015. The condensed consolidated financial statements include the accounts of Artesian Resources Corporation and its wholly owned subsidiaries, including its principal operating company, Artesian Water. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments (unless otherwise noted) necessary to present fairly the Company's balance sheet position as of June 30, 2015, the results of operations for the three and six month periods ended June 30, 2015 and 2014 and the cash flows for the six month periods ended June 30, 2015 and 2014. The results of operations for the interim periods presented are not necessarily indicative of the results for the full year or for future periods. NOTE 3 – STOCK COMPENSATION PLANS

STOCK COMPENSATION PLANS

STOCK COMPENSATION PLANS	6 Months Ended
	Jun. 30, 2015
STOCK COMPENSATION PLANS [Abstract]
STOCK COMPENSATION PLANS	On May 25, 2005, -Voting Common Stock, or Class A Stock, for issuance. The Company accounts for stock options issued after January 1, 2006 under Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC Topic, 718. For the three and six months ended June 30, 2015, compensation expense of approximately $13,000 and $46,000 was recorded for stock options granted in May 2014. Approximately $34,000 and $67,000 in compensation expense was recorded during the three and six months ended June 30, 2014 for stock options granted in May 201 Costs were determined based on the fair value at the grant dates and those costs are being charged to income over the service period associated with the grants. There was no stock compensation cost capitalized as part of an asset. The fair value of each option grant is estimated using the Black-Scholes-Merton option pricing model with the following weighted-average assumptions used for grants issued in 2014. 2014 Expected Dividend Yield 3.88 % Expected Stock Price Volatility 26.50 % Weighted Average Risk-Free Interest Rate 2.24 % Weighted Average Expected Life of Options (in years) 7.52 The expected dividend yield is the dividend yield at grant. The expected volatility is the standard deviation of the change in the natural logarithm of the stock price (expressed as an annual rate) for the expected term shown above. The expected term was based on historic exercise patterns for similar grants. The risk-free interest rate is calculated from the Treasury Constant Maturity rates as of the date of the grants. The following summary reflects changes in the shares of Class A Stock underlying options for the six months ended June 30, 2015: Option Shares Weighted Average Exercise Price Weighted Average Remaining Life (Yrs.) Aggregate Intrinsic Value Plan options Outstanding at January 1, 2015 376,250 $ 19.52 $ 1,157,000 Granted – – – Exercised (176 ) 19.70 324 Expired – – – Outstanding at June 30, 2015 376,074 $ 19.52 3.99 $ 669,600 Options exercisable at June 30, 2015 376,074 $ 19.52 3.99 $ 669,600 The total intrinsic value of options exercised during the six months ended June 30, 2015 was approximately $324. The following summary reflects changes in the non-vested shares of Class A Stock underlying options for the six months ended June 30, 2015: Non-vested Shares Option Shares Weighted Average Grant – Date Fair Value Per Option Non-vested at January 1, 2015 33,750 $ 3.95 Granted – – Vested (33,750 ) 3.95 Canceled – – Non-vested at June 30, 2015 – $ – As of June 30, 2015, there was no unrecognized expense related to non-vested option shares granted under the Plan.

REGULATORY ASSETS

REGULATORY ASSETS	6 Months Ended
	Jun. 30, 2015
REGULATORY ASSETS [Abstract]
REGULATORY ASSETS	N OTE 4 - REGULATORY ASSETS FASB ASC Topic 980 stipu by a third-party regulatory agency. Ce August 2008 and is currently he December 2011 purchase of water assets in Cecil County, Maryland and the November 2010 purchase of the Port Deposit, Maryland water assets. Amortization of these deferred acquisition costs began once the acquired assets were placed into service. The amortization of the Port Deposit acquisition began in November 2010 and the amortization of the Cecil County acquisition began in December 2011. These acquisition costs will be amortized over a Regulatory assets, net of amortization, comprise: (in thousands) June 30, 2015 December 31, 2014 Postretirement benefit obligation $ 384 $ 384 Deferred income taxes 453 461 Goodwill 322 325 Deferred acquisition and franchise costs 738 756 Expense of rate and regulatory proceedings 641 635 $ 2,538 $ 2,561 Artesian Water contributed $57,000 to its postretirement benefit plan in the first six months of 2015. These co

NET INCOME PER COMMON SHARE AND

NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE	6 Months Ended
	Jun. 30, 2015
NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE [Abstract]
NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE	NOTE 5 Basic net income per share is based on the weighted average number of common shares outstanding. Diluted net income per share is based on the weighted average number of common shares outstanding and the potentially dilutive effect of employee stock options. The following table summarizes the shares used in computing basic and diluted net income per share: For the Three Months For the Six Months Ended June 30, Ended June 30, 2015 2014 2015 2014 (in thousands) (in thousands) Weighted average common shares outstanding during the period for Basic computation 8,926 8,884 8,922 8,865 Dilutive effect of employee stock options 34 44 36 49 Weighted average common shares outstanding during the period for Diluted computation 8,960 8,928 8,958 8,914 For th e three and six months ended June 30, 2015, emplo The Company has 15,000,000 authorized shares of Class A Stock and 1,040,000 authorized shares of Class B Stock. As of June 30, 2015 , , $1.00 per three months ended June 30, 2015 and June 30, 2014, th the six months ended June 30, 2015 and June 30, 2014, the Equity per common share was $14.34 and $14.14 at June 30, 2015 and December 31, 2014, respectively. These amounts were computed by dividing common stockholders' equity by the number of weighted average shares of common stock outstanding on June 30, 2015 and December 31, 2014, respectively. N OTE 6 - REGULATO

REGULATORY PROCEEDINGS

REGULATORY PROCEEDINGS	6 Months Ended
	Jun. 30, 2015
REGULATORY PROCEEDINGS [Abstract]
REGULATORY PROCEEDINGS	Our water and wastewater utilities generate operating revenue from customers based on rates that are established by state Public Service Commissions through a rate setting process that may include public hearings, evidentiary hearings and the submission of evidence and testimony in support of the requested level of rates by the Company. We are subject to regulation by the following state regulatory commissions: The DEPSC regulates both Artesian Water and Artesian Wastewater. Artesian Water Maryland and Artesian Wastewater Maryland are subject to the regulatory jurisdiction of the MDPSC, and Artesian Water Pennsylvania is subject to the regulatory jurisdiction of the PAPUC. Rate Proceedings Our regulated utilities periodically seek rate increases to cover the cost of increased operating expenses, increased financing expenses due to additional investments in utility plant and other costs of doing business. In Delaware, utilities are permitted by law to place rates into effect, under bond, on a temporary basis pending completion of a rate increase proceeding. Th e first t ser of $2.5 million on an On April 11, 2014, Artesian Water filed a request with the DEPSC to implement new rates to meet a requested increase in revenue of 15.90% or approximately $10.0 million, on an annualized basis. The actual effective requested increase is less than 15.90%, since, in accordance with applicable law, Artesian Water had been permitted to recover specific investments made in infrastructure through the assessment of a cumulative 3.32% Distribution System Improvement Charge, or DSIC. Since the DSIC rate is required to be set to zero when temporary rates are placed into effect, customers would experience an incremental increase of 12.58%, the net of the overall 15.90% requested increase less the DSIC rate of 3.32% previously On Janu ary 18, 2013, Artesi $343,000, or 34.80%, o December 31, 2014. Other Proceedings Delaware law permits water utilities to put into effect, on a semi-annual basis, increases related to specific types of distribution system improvements through a Distribution System Improvement Charge, or DSIC. This charge may be implemented by water utilities between general rate increase applications that normally recognize changes in a water utility's overall financial position. The DSIC approval process is less costly when compared to the approval process for general rate increase requests. The DSIC rate applied between base rate filings is capped at 7.5% of the amount billed to customers under otherwise applicable rates and charges, and the DSIC rate increase applied cannot exceed 5% within an y 12-month period. On December 17, 2013, the DEPSC approved Artesian Water's application to collect a cumulative DSIC rate of 3.32%, effective January 1, 2014, subject to audit at a later date. This rate was based on approximately $12.9 million in eligible plant improvements since September 30, 2011. The DSIC rate of 3.32% was set to zero when the first step of temporary rates designed to generate an increase of 3.98%, or $2.5 million on an annual basis, was placed into effect on June 10, 2014. In November 2014, Artesian Water filed an application with the DEPSC for approval to collect a DSIC rate of 0.34% effective January 1, 2015. This rate was based on approximately $1.3 million in eligible plant improvements since September 30, 2014. On December 16, 2014, the DEPSC approved the DSIC effective January 1, 2015, subject to audit at a later date. In May 2015, Artesian Water filed an application with the DEPSC for approval to collect an additional DSIC rate of 0.81% effective July 1, 2015. This rate was based on approximately $3.3 million in eligible plant improvements. On June 16, 2015 the DEPSC approved the DSIC effective July 1, 2015, subject to audit at a later date. NOTE 7 – INCOME TAXES

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jun. 30, 2015
INCOME TAXES [Abstract]
INCOME TAXES	Under FASB ASC Topic 740, an uncertain tax position represents our expected treatment of a tax position taken, or planned to be taken in the future, that has not been reflected in measuring income tax expense for financial reporting purposes. In 2014, the Company changed its tax method of accounting for qualifying utility system repairs effective with the tax year ended December 31, 2014 and for prior tax years. The tax accounting method was changed to permit the expensing of qualifying utility asset improvement costs that were previously being capitalized and depreciated for book and tax purposes. The Company establishes reserves for uncertain tax positions based upon management's judgment as to the sustainability of these positions. These accounting estimates related to the uncertain tax position reserve require judgments to be made as to the sustainability of each uncertain tax position based on its technical merits. The Company believes its tax positions comply with applicable law and that it has adequately recorded reserves as required. However, to the extent the final tax outcome of these matters is different than the estimates recorded, the Company would then adjust its tax reserves or unrecognized tax benefits in the period that this information becomes known. The Company has elected to recognize accrued interest (net of related tax benefits) and penalties related to uncertain tax positions as a component of its income tax expense. The Company ha s accrued approximately $5,000 and $6,000 in penalties and interest for the three and months ended June 30, 2015, respectively. The Company remains subject to examination by federal and state authorities for tax years 2011 through 2014.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	6 Months Ended
	Jun. 30, 2015
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]
FAIR VALUE OF FINANCIAL INSTRUMENTS	N OTE 8 – FAIR VALUE OF FINANC The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value. Current Assets and Liabilities For those current assets and liabilities that are considered financial instruments, the carrying amounts approximate fair value because of the short maturity of those instruments. Long-term Financial Liabilities All of Artesian Resources' outstanding lo ng-term debt as of June 30, 2015 and December 31, 2014 was fixed-rate. The fair value of the Company's long-term debt is determined by discounting their future cash flows using current market interest rates on similar instruments with comparable maturities consistent with FASB ASC 825. Under the fair value hierarchy, the fair value of the long-term debt in the table below is classified as Level 2 measurements. The fair values for long-term debt differ from the carrying values primarily due to interest rates that differ from the current market interest rates. The carrying amount and fair value of Artesian Resources' long-term debt are shown below: In thousands June 30, 2015 December 31, 2014 Carrying amount $ 105,571 $ 106,199 Estimated fair value $ 127,704 $ 129,243 The fair value of Advances for Construction cannot be reasonably estimated due to the inability to accurately estimate the timing and amounts of future refunds expected to be paid over the life of the contracts. Refund payments are based on the water sales to new customers in the particular development constructed. The fair value of Advances for Construction would be less than the carrying amount because these financial instruments are non-interest bearing.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2015
RELATED PARTY TRANSACTIONS [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 9 – RELATED PARTY TRANSACTIONS In September 2013, Artesian Water entered into a contract in the normal course of business with W.F. Construction, a related party, for work associated with structural improvements to a water treatment plant . The total contract was approximately The owner of W.F. Construction is the husband of Mrs. Jennifer Finch, Vice President and Assistant Treasurer of Artesian Resources. Approximately $122,000 and $211,000 were paid to W.F. Construction for Approximately $48,000 was paid to W.F. Construction for the six months ended June 30, 2015. NOTE 10 – LEGAL PROCEEDINGS

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS	6 Months Ended
	Jun. 30, 2015
Legal Proceedings [Abstract]
LEGAL PROCEEDINGS [Text Block]	On September 30, 2014, the United States District Court for the Eastern District of Pennsylvania, or the Court, issued an Order regarding the complaint filed on December 22, 2010 by Artesian Water, against Chester Water Authority, or CWA. The complaint claimed breach of contract, unjust enrichment, and requested declaratory judgment in relation to an interconnection agreement with CWA to supply bulk water supplies to Artesian Water. According to the Order of the Court, Artesian Water was required to pay CWA amounts withheld related to CWA rate increases from 2008, 2009, and 2010 totaling approximately $3.1 million. The $3.1 million withheld from Artesian Water's previous payments to CWA were accrued by Artesian Water when originally invoiced by CWA and were paid by Artesian Water to CWA in October 2014. In addition, CWA requested approximately $379,000 in prejudgment and post judgment interest related to amounts withheld, which was accrued by Artesian Water as of December 31, 2014 and subsequently paid in January 2015. This amount was calculated at 6% per annum on outstanding amounts withheld. Periodically, we are involved in other proceedings or litigation arising in the ordinary course of business. We do not believe that the ultimate resolution of these matters will materially affect our business, financial position or results of operations. However, we cannot assure that we will prevail in any litigation and, regardless of the outcome, may incur significant litigation expense and may have significant diversion of management attention.

IMPACT OF RECENT ACCOUNTING PRO

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	Jun. 30, 2015
IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS [Abstract]
IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS	NOTE 11 - IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS )

STOCK COMPENSATION PLANS (Table

STOCK COMPENSATION PLANS (Tables)	6 Months Ended
	Jun. 30, 2015
STOCK COMPENSATION PLANS [Abstract]
Weighted-average assumptions used for grants option	The fair value of each option grant is estimated using the Black-Scholes-Merton option pricing model with the following weighted-average assumptions used for grants issued in 2014. 2014 Expected Dividend Yield 3.88 % Expected Stock Price Volatility 26.50 % Weighted Average Risk-Free Interest Rate 2.24 % Weighted Average Expected Life of Options (in years) 7.52
Shares of Class A Non-Voting Common Stock under option	Option Shares Weighted Average Exercise Price Weighted Average Remaining Life (Yrs.) Aggregate Intrinsic Value Plan options Outstanding at January 1, 2015 376,250 $ 19.52 $ 1,157,000 Granted – – – Exercised (176 ) 19.70 324 Expired – – – Outstanding at June 30, 2015 376,074 $ 19.52 3.99 $ 669,600 Options exercisable at June 30, 2015 376,074 $ 19.52 3.99 $ 669,600
Non-vested shares of Class A Stock under option	Non-vested Shares Option Shares Weighted Average Grant – Date Fair Value Per Option Non-vested at January 1, 2015 33,750 $ 3.95 Granted – – Vested (33,750 ) 3.95 Canceled – – Non-vested at June 30, 2015 – $ –

REGULATORY ASSETS (Tables)

REGULATORY ASSETS (Tables)	6 Months Ended
	Jun. 30, 2015
REGULATORY ASSETS [Abstract]
Regulatory assets, net of amortization, comprise	Regulatory assets, net of amortization, comprise: (in thousands) June 30, 2015 December 31, 2014 Postretirement benefit obligation $ 384 $ 384 Deferred income taxes 453 461 Goodwill 322 325 Deferred acquisition and franchise costs 738 756 Expense of rate and regulatory proceedings 641 635 $ 2,538 $ 2,561

NET INCOME PER COMMON SHARE A19

NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE (Tables)	6 Months Ended
	Jun. 30, 2015
NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE [Abstract]
Shares used in computing basic and diluted net income per share	The following table summarizes the shares used in computing basic and diluted net income per share: For the Three Months For the Six Months Ended June 30, Ended June 30, 2015 2014 2015 2014 (in thousands) (in thousands) Weighted average common shares outstanding during the period for Basic computation 8,926 8,884 8,922 8,865 Dilutive effect of employee stock options 34 44 36 49 Weighted average common shares outstanding during the period for Diluted computation 8,960 8,928 8,958 8,914

FAIR VALUE OF FINANCIAL INSTR20

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	6 Months Ended
	Jun. 30, 2015
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]
Fair value of long-term debt	All of Artesian Resources' outstanding lo ng-term debt as of June 30, 2015 and December 31, 2014 was fixed-rate. The fair value of the Company's long-term debt is determined by discounting their future cash flows using current market interest rates on similar instruments with comparable maturities consistent with FASB ASC 825. Under the fair value hierarchy, the fair value of the long-term debt in the table below is classified as Level 2 measurements. The fair values for long-term debt differ from the carrying values primarily due to interest rates that differ from the current market interest rates. The carrying amount and fair value of Artesian Resources' long-term debt are shown below: In thousands June 30, 2015 December 31, 2014 Carrying amount $ 105,571 $ 106,199 Estimated fair value $ 127,704 $ 129,243

GENERAL (Details)

GENERAL (Details) - Jun. 30, 2015	SubsidiaryFacilitySquarefeetCustomergal
Number of wholly owned subsidiaries | Subsidiary	8
Number of subsidiaries not regulated | Subsidiary	3
Artesian Development purchased area of office space (in square feet) | Squarefeet	10,000
Artesian Development purchased area of warehouse space (in square feet) | Squarefeet	10,000
Artesian Wastewater [Member]
Number of wastewater treatment facilities owned and operated | Facility	4
Capacity of wastewater treatment facilities, minimum (in gallons per day)	730,000
Capacity of waste water treatment facilities, maximum (in gallons per day)	1,600,000
Artesian Utility [Member]
Initial contract period of operating wastewater treatment facilities in Middletown (in years)	20 years
Number of wastewater treatment station facility operations in Middletown | Facility	2
Number of wastewater treatment facilities in Middletown providing reclaimed wastewater | Facility	1
Volume of water save by Artesian Water Management Partnership in Middletown, maximum (in gallons per day)	3,000,000
Number of Water Service Line Protection Plan customers | Customer	19,450
Number of Sewer Service Line Protection Plan customers | Customer	14,770
Percentage of Water Service Line Protection Plan customers signed up (in hundredths)	27.95%
Percentage Of Sewer Service Protection Plan customer signed up (in hundredths)	21.22%
Number of non-customers signed up with either Water Service Line Protection Plan or Service Line Protection Plan | Customer	1,200
Artesian Utility [Member] | Wastewater treatment facility first of two [Member]
Capacity of waste water treatment facilities, maximum (in gallons per day)	2,500,000
Artesian Utility [Member] | Wastewater treatment facility second of two [Member]
Capacity of waste water treatment facilities, maximum (in gallons per day)	250,000

STOCK COMPENSATION PLANS (Detai

STOCK COMPENSATION PLANS (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	May. 25, 2005
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Granted, option shares (in shares)			0
Share Based Compensation Arrangement By Share Based Payment Award Nonvested Options Outstanding [Roll Forward]
Granted, option shares (in shares)			0
Non-vested shares of Class A Stock under option [Abstract]
Vesting period for granted option (in years)			1 year
Options granted term (in years)			10 years
Weighted-average assumptions used for grants issued [Abstract]
Expected Dividend Yield (in hundredths)				3.88%
Expected Stock Price Volatility (in hundredths)				26.50%
Weighted Average Risk-Free Interest Rate (in hundredths)				2.24%
Weighted Average Expected Life of Options (in years)			7 years 6 months 7 days
Class A Stock [Member] | 2005 Equity Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorizes for new issues					500,000
Compensation expense	$ 13,000	$ 34,000	$ 46,000	$ 67,000
Class A Stock [Member] | Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at beginning of period, option shares (in shares)			376,250
Granted, option shares (in shares)			0
Exercised, option shares (in shares)			(176)
Outstanding at end of period, option shares (in shares)	376,074		376,074
Options exercisable at end of period, option share (in shares)	376,074		376,074
Shares of Class A Non-Voting Common Stock under option [Abstract]
Outstanding at beginning of period, weighted average exercise price (in dollars per shares)			$ 19.52
Granted, weighted average exercise price (in dollars per shares)			0
Exercised, weighted average exercise price (in dollars per shares)			19.70
Outstanding at end of period, weighted average exercise price (in dollars per shares)	$ 19.52		19.52
Options exercisable at end of period, weighted average exercise price (in dollars per shares)	$ 19.52		$ 19.52
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2			3 years 11 months 26 days
Options exercisable at end of period, weighted average remaining life (in years)			3 years 11 months 26 days
Options exercisable at beginning of period, aggregate intrinsic value			$ 1,157,000
Exercised, aggregate intrinsic value			324
Outstanding at end of period, aggregate intrinsic value	$ 669,600		669,600
Options exercisable at end of period, aggregate intrinsic value	$ 669,600		$ 669,600
Share Based Compensation Arrangement By Share Based Payment Award Nonvested Options Outstanding [Roll Forward]
Granted, option shares (in shares)			0
Class A Stock [Member] | Non-Vested Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Granted, option shares (in shares)			0
Share Based Compensation Arrangement By Share Based Payment Award Nonvested Options Outstanding [Roll Forward]
Outstanding at beginning of period, Non-vested option shares (in shares)			33,750
Granted, option shares (in shares)			0
Vested, option shares (in shares)			(33,750)
Canceled, option shares (in shares)			0
Outstanding at end of period, Non-vested option shares (in shares)	0		0
Non-vested shares of Class A Stock under option [Abstract]
Outstanding at beginning of period, weighted average grant - date fair value per option (in dollars per shares)			$ 3.95
Granted, weighted average grant - date fair value per option (in dollars per shares)			0
Vested, weighted average grant - date fair value per option (in dollars per shares)			3.95
Canceled, weighted average grant - date fair value per option (in dollars per shares)			0
Outstanding at end of period, weighted average grant - date fair value per option (in dollars per shares)	$ 0		$ 0

REGULATORY ASSETS (Details)

REGULATORY ASSETS (Details) - USD ($)	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Regulatory Assets [Line Items]
Regulatory assets, net	$ 2,538,000	$ 2,561,000
Period over which depreciation and salary study expenses amortized (in years)	5
Period over which Delaware rate proceedings and applications expenses amortized (in years)	2 years
Period over which Maryland rate proceedings and applications expenses amortized	five years or until the next rate increase application
Period over which goodwill amortized (in years)	50 years
Period over which Port Deposit and Cecil County deferred acquisition costs amortized (in years)	20 years
Period over which Cecil County deferred franchise costs amortized (in years)	80 years
Artesian Water contributed to its postretirement benefit plan	$ 57,000
Postretirement benefit obligation [Member]
Regulatory Assets [Line Items]
Regulatory assets, net	384,000	384,000
Deferred income taxes recoverable in future rates [Member]
Regulatory Assets [Line Items]
Regulatory assets, net	453,000	461,000
Goodwill A R T N A [Member]
Regulatory Assets [Line Items]
Regulatory assets, net	322,000	325,000
Deferred acquisition and franchise costs [Member]
Regulatory Assets [Line Items]
Regulatory assets, net	738,000	756,000
Expense of rate and regulatory proceedings [Member]
Regulatory Assets [Line Items]
Regulatory assets, net	$ 641,000	$ 635,000

NET INCOME PER COMMON SHARE A24

NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE (Details) - $ / shares	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Shares used in computing basic and diluted net income per share [Abstract]
Weighted average common shares outstanding during the period for Basic computation (in shares)	8,926,000	8,884,000	8,922,000	8,865,000
Dilutive effect of employee stock options (in shares)	34,000	44,000	36,000	49,000
Weighted average common shares outstanding during the period for Diluted computation (in shares)	8,960,000	8,928,000	8,958,000	8,914,000
Common stock excluded from calculations of diluted net income per share (in shares)			67,500
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	15,000,000		15,000,000
Common stock, shares issued (in shares)	8,860	27,874	16,904	61,622
Common stock, shares outstanding (in shares)	8,047,581	8,010,191	8,047,581	8,010,191
Common stock, par value (in dollars per share)	$ 1		$ 1
Common stock, shares issued during period (in shares)	8,860	27,874	16,904	61,622
Equity per common share (in dollars per share)			$ 14.34		$ 14.14
Class B Stock [Member]
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	1,040,000		1,040,000
Common stock, shares outstanding (in shares)	881,452	881,452	881,452	881,452
Common stock, par value (in dollars per share)	$ 1		$ 1

REGULATORY PROCEEDINGS (Details

REGULATORY PROCEEDINGS (Details) - USD ($)

May. 31, 2015

Nov. 30, 2014

Nov. 13, 2014

Dec. 17, 2013

Jun. 30, 2015

Mar. 31, 2015

Jun. 30, 2014

Jun. 30, 2015

Jun. 30, 2014

Jun. 10, 2014

Apr. 11, 2014

Jan. 18, 2013

Rate Proceedings [Abstract]

Percentage of gross water sales maximum temporary annual rate increase subject to $2.5 million limitation (in hundredths)

15.00%

Percentage of rate relief allowed should a rate case not complete, maximum (in hundredths)

15.00%

Recover specific investments made in infrastructure through DSIC

3.32%

3.32%

Other Proceedings [Abstract]

Percentage of Distribution System Improvement Charges annual rate increase application filed by company to regulatory (in hundredths)

7.17%

Increase in revenue due to DSIC rate increase application, annually

$ 4,500,000

Delaware [Member]

Rate Proceedings [Abstract]

Maximum temporary annual rate increase subject to 15% gross water sales limitation

$ 2,500,000

Period to complete rate case by law (in months)

7 months

Other Proceedings [Abstract]

Distribution System Improvement Charge rate increase applied between base rate filings, maximum (in hundredths)

7.50%

Distribution System Improvement Charge rate increase maximum within a 12-month period (in hundredths)

5.00%

Artesian Water [Member]

Rate Proceedings [Abstract]

Percentage of revenue increase in a filed request to implement new rates (in hundredths)

15.90%

Amount of annual revenue increase in a filed request to implement new rates

$ 10,000,000

Incremental Increase to Customers

12.58%

Percentage increase in annual operating revenue due to temp rate increase in effect

3.98%

Annualized operating revenue increase due to temp rate increase in effect

$ 2,500,000

Other Proceedings [Abstract]

Percentage of Distribution System Improvement Charges annual rate increase application filed by company to regulatory (in hundredths)

0.81%

0.34%

3.32%

Increase in revenue due to DSIC rate increase application, annually

$ 3,300,000

$ 1,300,000

$ 12,900,000

Revenue earned in DSIC rate increases

$ 59,000

$ 294,000

$ 122,000

$ 789,000

Artesian Wastewater [Member]

Rate Proceedings [Abstract]

Percentage of revenue increase in a filed request to implement new rates (in hundredths)

34.80%

Amount of annual revenue increase in a filed request to implement new rates

$ 343,000

Increase in annual revenue expected from rate increase application approval

$ 174,000

Return on Equity (in hundredths)

10.00%

INCOME TAXES (Details)

INCOME TAXES (Details) - Jun. 30, 2015 - USD ($)	Total	Total
Income Tax Examination [Line Items]
Income Tax Penalties and Interest Accrued for Unrecognized tax position	$ 5,000	$ 6,000
State Authorities [Member]
Income Tax Examination [Line Items]
Income tax examination description		for tax years 2011 through 2014
Federal Authorities [Member]
Income Tax Examination [Line Items]
Income tax examination description		for tax years 2011 through 2014

FAIR VALUE OF FINANCIAL INSTR27

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Carrying Amount [Member]
Long-term Financial Liabilities [Abstract]
Long-term Debt, Fair Value	$ 105,571	$ 106,199
Estimated fair value [Member]
Long-term Financial Liabilities [Abstract]
Long-term Debt, Fair Value	$ 127,704	$ 129,243

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Related Party Transaction [Line Items]
Stock ownership required to be disclosed, minimum (in hundredths)		5.00%
W.F. Construction [Member]
Related Party Transaction [Line Items]
Contract to repair water treatment plant		$ 325,000
Amounts paid	$ 122,000	48,000	$ 211,000
Accounts payable balance due		$ 0		$ 0

LEGAL PROCEEDINGS (Details)

LEGAL PROCEEDINGS (Details) - 6 months ended Jun. 30, 2015 - USD ($)	Total
Legal Proceedings [Abstract]
Amounts paid to Chester Authority for amounts withheld related to specific rate increases	$ 3,100,000
Prejudgment and post judgment interest	$ 379,000
Interest rate used for prejudgment interest accrued	6.00%