Artesian Resources (ARTNA) 10-Q 5 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	3 Months Ended
	Mar. 31, 2017	May 01, 2017	Jun. 30, 2016
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	2,017
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Class A Stock [Member]
Entity Information [Line Items]
Entity Public Float			$ 269,178,000
Entity Common Stock, Shares Outstanding		8,264,375
Class B Stock [Member]
Entity Information [Line Items]
Entity Public Float			$ 8,328,000
Entity Common Stock, Shares Outstanding		881,452

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
ASSETS
Utility plant, at original cost (less accumulated depreciation 2017-$112,008; 2016-$109,684)	$ 430,749	$ 425,502
Current assets
Cash and cash equivalents	209	226
Accounts receivable (less allowance for doubtful accounts 2017 - $265; 2016-$263)	6,181	7,796
Income tax receivable	223	150
Unbilled operating revenues	1,499	1,403
Materials and supplies	1,612	1,564
Prepaid property taxes	828	1,669
Prepaid expenses and other	1,629	1,827
Total current assets	12,181	14,635
Other assets
Non-utility property (less accumulated depreciation 2017 - $632; 2016 - $611)	3,898	3,881
Other deferred assets	3,735	3,584
Total other assets	7,633	7,465
Regulatory assets, net	7,922	3,374
Total Assets	458,485	450,976
Stockholders' equity
Common stock	9,145	9,127
Preferred stock	0	0
Additional paid-in capital	97,910	97,480
Retained earnings	33,418	32,416
Total stockholders' equity	140,473	139,023
Long-term debt, net of current portion	81,533	102,331
Total stockholders' equity and long term debt	222,006	241,354
Current liabilities
Lines of credit	3,892	7,130
Overdraft payable	774	32
Current portion of long-term debt	26,326	1,316
Accounts payable	4,341	5,532
Accrued expenses	2,506	1,309
Accrued interest	1,250	1,000
Customer deposits	901	864
Other	2,976	2,145
Total current liabilities	42,966	19,328
Commitments and contingencies
Deferred credits and other liabilities
Net advances for construction	7,925	8,169
Postretirement benefit obligation	149	149
Deferred investment tax credits	539	544
Utility plant retirement cost obligation	853	873
Deferred income taxes	69,695	68,453
Total deferred credits and other liabilities	79,161	78,188
Net contributions in aid of construction	114,352	112,106
Total Liabilities and Stockholders' equity	$ 458,485	$ 450,976

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS Parenthetical - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
ASSETS
Less - accumulated depreciation	$ 112,008	$ 109,684
Current assets
Accounts receivable (allowance for doubtful accounts)	265	263
Other assets
Non utility property (accumulated depreciation)	$ 632	$ 611

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating revenues
Water sales	$ 16,935	$ 16,436
Other utility operating revenue	1,020	865
Non-utility operating revenue	1,235	1,148
Total operating revenues	19,190	18,449
Operating expenses
Utility operating expenses	8,905	8,546
Non-utility operating expenses	686	635
Depreciation and amortization	2,319	2,315
State and federal income taxes	2,095	1,952
Property and other taxes	1,194	1,148
Total operating expenses	15,199	14,596
Operating income	3,991	3,853
Other income, net
Allowance for funds used during construction (AFUDC)	70	24
Miscellaneous	582	656
Income before interest charges	4,643	4,533
Interest charges	1,557	1,703
Net income applicable to common stock	$ 3,086	$ 2,830
Income per common share:
Basic (in dollars per share)	$ 0.34	$ 0.31
Diluted (in dollars per share)	$ 0.34	$ 0.31
Weighted average common shares outstanding:
Basic (in shares)	9,135	9,066
Diluted (in shares)	9,204	9,130
Cash dividends paid per share of common stock (in dollars per share)	$ 0.2283	$ 0.2216

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 3,086	$ 2,830
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,319	2,315
Deferred income taxes, net	1,237	543
Stock compensation	34	0
AFUDC, equity portion	(47)	(16)
Changes in assets and liabilities:
Accounts receivable, net of allowance for doubtful accounts	1,615	541
Income taxes receivable	(73)	1,300
Unbilled operating revenues	(96)	(123)
Materials and supplies	(48)	(52)
Prepaid property taxes	841	784
Prepaid expenses and other	198	206
Other deferred assets	(160)	(175)
Regulatory assets	84	163
Accounts payable	(1,191)	(1,862)
Accrued expenses	1,197	247
Accrued interest	250	133
Customer deposits and other, net	868	104
NET CASH PROVIDED BY OPERATING ACTIVITIES	10,114	6,938
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (net of AFUDC, equity portion)	(7,664)	(4,270)
Proceeds from sale of assets	9	19
NET CASH USED IN INVESTING ACTIVITIES	(7,655)	(4,251)
CASH FLOWS FROM FINANCING ACTIVITIES
Net repayments under lines of credit agreements	(3,238)	(4,021)
Increase in overdraft payable	742	425
Net advances and contributions in aid of construction	2,128	3,214
Net proceeds from issuance of common stock	414	386
Dividends paid	(2,084)	(2,010)
Debt issuance costs	(148)	0
Principal repayments of long-term debt	(290)	(379)
NET CASH USED IN FINANCING ACTIVITIES	(2,476)	(2,385)
NET (DECREASE)INCREASE IN CASH AND CASH EQUIVALENTS	(17)	302
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	226	209
CASH AND CASH EQUIVALENTS AT END OF PERIOD	209	511
Supplemental Disclosures of Cash Flow Information:
Utility plant received as construction advances and contributions	443	0
Interest paid	1,307	1,570
Income taxes paid	$ 515	$ 106

GENERAL

GENERAL	3 Months Ended
	Mar. 31, 2017
GENERAL [Abstract]
GENERAL	NOTE 1 Artesian Resources Corporation, or Artesian Resources, includes income from the earnings of our nine wholly owned subsidiaries. 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 March 31, 2017 Artesian Wastewater owned and operated four wastewater treatment facilities, which are capable of treating approximately 500,000 gallons per day. In August 2016, Artesian Wastewater and Sussex County, a political subdivision of Delaware, entered into an agreement to provide wastewater treatment and disposal services for each other in order to address the periodic need of additional wastewater treatment and disposal capacities and facilities in Sussex County, beyond those under their own ownership and control, to assure the timely, efficient and cost effective transmission and management of wastewater. There are numerous locations in Sussex County where Artesian Wastewater's and Sussex County's facilities are capable of being connected or integrated to allow for the movement and disposal of wastewater generated by one or the other's system. On September 27, 2016, Artesian Wastewater entered into a wastewater services agreement with Allen Harim Foods, LLC, or Allen Harim, for Artesian Wastewater to provide treatment and disposal services for sanitary wastewater discharged from Allen Harim's properties located in Sussex County, Delaware upon completion of a pipeline to transfer the sanitary wastewater. The completion of the pipeline should occur during the second quarter of 2017. On January 27, 2017, Artesian Wastewater entered into a second wastewater agreement with Allen Harim for Artesian Wastewater to provide disposal services for approximately 1.5 million gallons per day of treated industrial and/or process wastewater upon completion of an approximately eight-mile pipeline that will transfer the wastewater from Allen Harim's properties to a 67 million gallon storage lagoon at Artesian's Northern Sussex Regional Water Recycling Facility. Artesian will use the reclaimed wastewater for spray irrigation on agricultural land in the area. The completion of the industrial and/or process wastewater pipeline and storage lagoon should occur during the first quarter of 2018. 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. OTHER SUBSIDIARIES Our four other subsidiaries, none of which are regulated, are Artesian Utility Development, Inc., or Artesian Utility, Artesian Development Corporation, or Artesian Development, Artesian Storm Water Services, Inc., or Artesian Storm Water, 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, Delaware 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. In November 2015, a third plan was added, the ISLP Plan. 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 Storm Water, incorporated on January 17, 2017, was formed to provide design, installation, maintenance and repair services related to existing or proposed storm water management systems in Delaware and the surrounding areas. The ability to offer storm water services will complement the primary water and wastewater services that we provide. Artesian Consulting Engineers no longer offers development and architectural services to outside third parties.

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2017
BASIS OF PRESENTATION [Abstract]
BASIS OF PRESENTATION	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 2016 as filed with the Securities and Exchange Commission on March 10, 2017. 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 March 31, 2017, the results of operations for the three month periods ended March 31, 2017 and 2016 and the cash flows for the three month periods ended March 31, 2017 and 2016. The results of operations for the interim periods presented are not necessarily indicative of the results for the full year or for future periods.

STOCK COMPENSATION PLANS

STOCK COMPENSATION PLANS	3 Months Ended
	Mar. 31, 2017
STOCK COMPENSATION PLANS [Abstract]
STOCK COMPENSATION PLANS	NOTE 3 – STOCK COMPENSATION PLANS On December 9, 2015, the Company's stockholders approved the 2015 Equity Compensation Plan, or the 2015 Plan, which replaced the 2005 Equity Compensation Plan, or the 2005 Plan, that expired on May 24, 2015. The 2015 Plan provides that grants may be in any of the following forms: incentive stock options, nonqualified stock options, stock units, stock awards, dividend equivalents and other stock-based awards. The 2015 Plan is administered and interpreted by the Compensation Committee of the Board of Directors, or the Committee. The Committee has the authority to determine the individuals to whom grants will be made under the 2015 Plan, the type, size and terms of the grants, the time when grants will be made and the duration of any applicable exercise or restriction period (subject to the limitations of the 2015 Plan), and deal with any other matters arising under the 2015 Plan. The Committee presently consists of three directors, each of whom is a non-employee director of the Company. All of the employees of the Company and its subsidiaries and non-employee directors of the Company are eligible for grants under the 2015 Plan. A compensation expense of $34,000 related to the May 2016 issue of restricted stock awards was recorded for the three months ended March 31, 2017. Costs were determined based on the fair value on date of the award and those costs were charged to income over the service period associated with the award. There was no recorded expense associated with equity compensation for the three month period ended March 31, 2016. There was no stock compensation cost capitalized as part of an asset. On May 4, 2016, 5,000 shares of Class A common stock, or Class A Stock, were granted as restricted stock awards. The fair value per share was 27.70, the closing price of the Class A Stock as recorded on the Nasdaq Global Market on May 4, 2016. The restricted shares are subject to a one year vesting period from the date of grant. Prior to their release date, these restricted stock awards may be subject to forfeiture in the event of the recipient's termination of employment. On December 18, 2015, 5,000 shares of Class A Stock were issued as fully vested unrestricted stock awards. The fair value per share was $27.38, the closing price of the Class A Stock as recorded on the Nasdaq Global Market on December 18, 2015. The following summary reflects changes in the shares of Class A Stock underlying options and restricted stock awards for the three months ended March 31, 2017: Options Restricted Awards Option Shares Weighted Average Exercise Price Weighted Average Remaining Life (Yrs.) Aggregate Intrinsic Value (in thousands) Outstanding Restricted Stock Awards Weighted Average Grant Date Fair Value Plan options/restricted stock awards Outstanding at January 1, 2017 231,755 $ 19.32 $ 2,925 5,000 27.70 Granted – – – – $ – Exercised/vested and released (11,500 ) 19.09 158 – – Expired/cancelled – – – – – Outstanding at March 31, 2017 220,255 $ 19.33 4.34 $ 2,914 5,000 $ 27.70 Exercisable/vested at March 31, 2017 220,255 $ 19.33 4.34 $ 2,914 – – The total intrinsic value of options exercised during the three months ended March 31, 2017 was approximately $158,000. There were no unvested option shares outstanding under the 2015 Plan during the three months ended March 31, 2017. As of March 31, 2017, there was no unrecognized expense related to non-vested option shares granted under the 2015 Plan. As of March 31, 2017, there was $12,500 total unrecognized expense related to non-vested awards of restricted shares awarded under the 2015 Plan. The cost will be recognized over 0.09 years, the remaining vesting period for the restricted stock awards.

REGULATORY ASSETS

REGULATORY ASSETS	3 Months Ended
	Mar. 31, 2017
REGULATORY ASSETS [Abstract]
REGULATORY ASSETS	N OTE 4 - REGULATORY ASSETS The The postretirement benefit obligation is the recognition of an offsetting regulatory asset as it relates to the accrual of the expected cost of providing postretirement health care and life insurance benefits to retired employees when they render the services necessary to earn the benefits. Artesian Water contributed $9,000 to its postretirement benefit plan in the first three months of 2017. These contributions consist of insurance premium payments for medical, dental and life insurance benefits made on behalf of the Company's eligible retired employees. The deferred income taxes will Debt related costs include debt issuance costs and other debt related expense. The DEPSC has allowed rate recovery on unamortized issuance costs and make-whole premiums associated with the early retirement of Series O and Q First Mortgage bonds as the replacement of that debt in January 2017 with Series T First Mortgage bonds was deemed to be more favorable for the ratepayers. These amounts are recovered over the term of the new long-term debt issued. Regulatory expenses amortized on a straight-line basis are noted below: Expense Years Amortized Debt related costs 15 to 25 (based on term of related debt) Depreciation and salary studies 5 Delaware rate proceedings 2.5 Maryland rate proceedings 5 Goodwill (resulting from acquisition of Mountain Hill Water Company in 2008) 50 Deferred acquisition costs (resulting from purchase of water assets in Cecil County, Maryland in 2011 and Port Deposit, Maryland in 2010) 20 Franchise Costs (resulting from purchase of water assets in Cecil County, Maryland in 2011) 80 Regulatory assets, net of amortization, comprise: (in thousands) March 31, 2017 December 31, 2016 Postretirement benefit obligation $ 186 $ 186 Deferred income taxes 427 431 Debt related costs 6,221 1,648 Expense of rate and regulatory proceedings 105 116 Goodwill 309 310 Deferred acquisition and franchise costs 674 683 $ 7,922 $ 3,374

NET INCOME PER COMMON SHARE AND

NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE	3 Months Ended
	Mar. 31, 2017
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: Three Months Ended March 31, 2017 2016 (in thousands) Weighted average common shares outstanding during the period for Basic computation 9,135 9,066 Dilutive effect of employee stock options 69 64 Weighted average common shares outstanding during the period for Diluted computation 9,204 9,130 For th e three months ended March 31, 2017 and March 31, 2016, The Company has 15,000,000 authorized shares of Class A Stock and 1,040,000 authorized shares of Class B Stock. As of March 31, 2017, 8,263,579 shares of Class A Stock and 881,452 shares of Class B Stock were issued and outstanding. As of March 31, 2016 , $1.00 per three months ended March 31, 2017 and March 31, 2016, th Equity per common share was $15.38 and $15.28 at March 31, 2017 and December 31, 2016, respectively. These amounts were computed by dividing common stockholders' equity by the number of weighted average shares of common stock outstanding on March 31, 2017 and December 31, 2016, respectively.

REGULATORY PROCEEDINGS

REGULATORY PROCEEDINGS	3 Months Ended
	Mar. 31, 2017
REGULATORY PROCEEDINGS [Abstract]
REGULATORY PROCEEDINGS	N OTE 6 - REGULATO 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. The first temporary increase may be up to the lesser of $2.5 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 7.50% of the amount billed to customers under otherwise applicable rates and charges, and the DSIC rate increase applied cannot exceed 5.0 % within an y 12-month period. The following table summarizes Artesian Water's applications with the DEPSC to collect DSIC rates and the eligible plant improvements the rates are based on: Application Date 11/24/2015 05/31/2016 11/29/2016 Effective Date 01/01/2016 07/01/2016 01/01/2017 DEPSC Approval Date 12/15/2015 06/28/2016 12/20/2016 Cumulative DSIC Rate 1.57 % 2.30 % 4.71 % Eligible Plant Improvements – Cumulative Dollars (in millions) $ 7.0 $ 10.3 $ 16.6 Eligible Plant Improvements – Installed Beginning Date 10/01/2014 10/01/2014 10/01/2014 Eligible Plant Improvements – Installed Ending Date 10/31/2015 04/30/2016 10/31/2016 All DEPSC approvals noted in the table above are subject to audit at a later date. For the three months ended March 31, 2017 and March 31, 2016, we earned approximately $756,000 and $249,000 in DSIC revenue, respectively.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2017
INCOME TAXES [Abstract]
INCOME TAXES	NOTE 7 – 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 recognized a tax deduction of $1.4 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. In December 2015, the Company was notified by the IRS that its Federal tax filing for 2014 would be reviewed along with the effects of the net operating loss generated in 2014 and carryback to the 2012 and 2013 tax years. This review, which began in the first quarter of 2016 and was completed in the second quarter of 2016, resulted in no change to the tax liability. Because the Company had previously recorded a provision for the possible disallowance of a portion of the repair deduction in prior periods, the completion of the audit resulted in the reversal of the reserves in the amount of approximately $201,000. While the Company maintains the belief that the deduction taken on its tax return is appropriate, the methodology for determining the deduction has not been agreed to by the tax authorities. Therefore, as required by FASB ASC 740, the Company has accrued approximately $1,500 in penalties and interest for the three months ended March 31, 2017, for any disallowance pertaining to the 2015 tax filing. The Company remains subject to examination by federal authorities for the tax years 2015 through 2016 and state authorities for the tax years 2013 through 2016.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	3 Months Ended
	Mar. 31, 2017
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 and 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 March 31, 2017 December 31, 2016 Carrying amount $ 107,859 $ 103,647 Estimated fair value $ 111,515 $ 111,864 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	3 Months Ended
	Mar. 31, 2017
RELATED PARTY TRANSACTIONS [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 9 – RELATED PARTY TRANSACTIONS In February 2017 and July 2016, Artesian Water entered into agreements in the normal course of business with W.F. Construction, Inc. for work associated with building modification to water treatment plants. The amounts of these agreements were approximately $100,000 and $131,000, respectively. The owner of W.F. Construction, Inc. is the husband of Mrs. Jennifer Finch, Vice President and Assistant Treasurer of Artesian Resources. Approximately $44,000 was paid to W.F. Construction, Inc. during the three months ended March 31, 2017. No amounts were paid to W.F. Construction, Inc. for the three months ended March 31, 2016. As of March 31, 2017, the Company had an accrued liability of approximately $33,000 for work completed by W.F. Construction, Inc. under contract. As of March 31, 2016, the Company had no liability to W. F. Construction, Inc. As set forth in the Charter of the Audit Committee of the Board of Directors of Artesian Resources, the Audit Committee is responsible for reviewing and, if appropriate, approving all related party transactions between us and any officer, director, any person known to be the beneficial owner of more than 5% of any class of the Company's voting securities or any other related person that would potentially require disclosure. In its review and approval of both the 2017 and 2016 related party transactions with W.F. Construction, Inc., the Audit Committee considered the nature of the related person's interest in the transaction; the satisfactory performance of work contracted with the related party prior to our employment of Mrs. Finch; and the material terms of the transaction, including, without limitation, the amount and type of transaction, the importance of the transaction to the related person, the importance of the transaction to the Company and whether the transaction would impair the judgment of a director or officer to act in the best interest of the Company. The Audit Committee approves only those related person transactions that are in, or are consistent with, the best interests of the Company and its stockholders.

IMPACT OF RECENT ACCOUNTING PRO

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS	3 Months Ended
	Mar. 31, 2017
IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS [Abstract]
IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS	NOTE 10 - IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued amended guidance for reporting revenue from contracts with customers. This guidance affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and the related cash flows arising from contracts with customers. For a public entity, the amendments in this guidance are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The majority of the Company's revenue should not be affected by this new standard. Water and wastewater revenue is based on service provided to customers at rates subject to approval by regulatory commissions without a defined contract. The Company continues to evaluate the impact of adoption of this new standard and implementation issues specific to utilities identified by The American Institute of Certified Public Accountants Revenue Recognition Task Force. In February 2016, the FASB issued new guidance on Leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. Management is currently evaluating the impact of our pending adoption of the new standard, which includes compiling a list of all contracts that meet the definitions of a lease under the new standard and determine the proper classification and accounting treatment to determine the ultimate impact the new standard will have on our consolidated financial statements. In January 2017, the FASB issued new guidance on Business Combinations. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendments in this update should be applied prospectively on or after the effective date. Management is currently evaluating the impact on the financial statements due to the adoption of this guidance. In February 2017, the FASB issued new guidance on Other Income – Gains and Losses from derecognition of Nonfinancial Assets to clarify the scope and application of the sale or transfer of nonfinancial assets to noncustomers, including partial sales and also defines what constitutes an "in substance nonfinancial asset" which can include financial assets. The new guidance eliminates several accounting differences between transactions involving assets and transactions involving businesses. Further, the guidance aligns the accounting for derecognition of a nonfinancial asset with that of a business. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. Management does not expect a material impact on the Company's financial statement due to the adoption of this guidance.

STOCK COMPENSATION PLANS (Table

STOCK COMPENSATION PLANS (Tables)	3 Months Ended
	Mar. 31, 2017
STOCK COMPENSATION PLANS [Abstract]
Shares of Class A Non-Voting Common Stock under option	The following summary reflects changes in the shares of Class A Stock underlying options and restricted stock awards for the three months ended March 31, 2017: Options Restricted Awards Option Shares Weighted Average Exercise Price Weighted Average Remaining Life (Yrs.) Aggregate Intrinsic Value (in thousands) Outstanding Restricted Stock Awards Weighted Average Grant Date Fair Value Plan options/restricted stock awards Outstanding at January 1, 2017 231,755 $ 19.32 $ 2,925 5,000 27.70 Granted – – – – $ – Exercised/vested and released (11,500 ) 19.09 158 – – Expired/cancelled – – – – – Outstanding at March 31, 2017 220,255 $ 19.33 4.34 $ 2,914 5,000 $ 27.70 Exercisable/vested at March 31, 2017 220,255 $ 19.33 4.34 $ 2,914 – –

REGULATORY ASSETS (Tables)

REGULATORY ASSETS (Tables)	3 Months Ended
	Mar. 31, 2017
REGULATORY ASSETS [Abstract]
Amortization period of other regulatory expense	Regulatory expenses amortized on a straight-line basis are noted below: Expense Years Amortized Debt related costs 15 to 25 (based on term of related debt) Depreciation and salary studies 5 Delaware rate proceedings 2.5 Maryland rate proceedings 5 Goodwill (resulting from acquisition of Mountain Hill Water Company in 2008) 50 Deferred acquisition costs (resulting from purchase of water assets in Cecil County, Maryland in 2011 and Port Deposit, Maryland in 2010) 20 Franchise Costs (resulting from purchase of water assets in Cecil County, Maryland in 2011) 80
Regulatory assets, net of amortization, comprise	Regulatory assets, net of amortization, comprise: (in thousands) March 31, 2017 December 31, 2016 Postretirement benefit obligation $ 186 $ 186 Deferred income taxes 427 431 Debt related costs 6,221 1,648 Expense of rate and regulatory proceedings 105 116 Goodwill 309 310 Deferred acquisition and franchise costs 674 683 $ 7,922 $ 3,374

NET INCOME PER COMMON SHARE A18

NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE (Tables)	3 Months Ended
	Mar. 31, 2017
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: Three Months Ended March 31, 2017 2016 (in thousands) Weighted average common shares outstanding during the period for Basic computation 9,135 9,066 Dilutive effect of employee stock options 69 64 Weighted average common shares outstanding during the period for Diluted computation 9,204 9,130

REGULATORY PROCEEDINGS (Tables)

REGULATORY PROCEEDINGS (Tables)	3 Months Ended
	Mar. 31, 2017
REGULATORY PROCEEDINGS [Abstract]
Eligible plant improvements	The following table summarizes Artesian Water's applications with the DEPSC to collect DSIC rates and the eligible plant improvements the rates are based on: Application Date 11/24/2015 05/31/2016 11/29/2016 Effective Date 01/01/2016 07/01/2016 01/01/2017 DEPSC Approval Date 12/15/2015 06/28/2016 12/20/2016 Cumulative DSIC Rate 1.57 % 2.30 % 4.71 % Eligible Plant Improvements – Cumulative Dollars (in millions) $ 7.0 $ 10.3 $ 16.6 Eligible Plant Improvements – Installed Beginning Date 10/01/2014 10/01/2014 10/01/2014 Eligible Plant Improvements – Installed Ending Date 10/31/2015 04/30/2016 10/31/2016

FAIR VALUE OF FINANCIAL INSTR20

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	3 Months Ended
	Mar. 31, 2017
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]
Fair value of long-term debt	All of Artesian Resources' outstanding lo ng-term debt as of and 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 March 31, 2017 December 31, 2016 Carrying amount $ 107,859 $ 103,647 Estimated fair value $ 111,515 $ 111,864

GENERAL (Details)

GENERAL (Details)	Jan. 27, 2017galmi	Mar. 31, 2017SubsidiaryFacilitySquarefeetCustomergal
Number of wholly owned subsidiaries | Subsidiary		9
Number of subsidiaries not regulated | Subsidiary		4
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		500,000
Allen Harim Foods, LLC [Member]
Capacity of wastewater treatment facilities	1,500,000
Approximate pipeline mileage | mi	8
Volume of storage lagoon	67,000,000
Artesian Utility [Member]
Initial contract period of operating wastewater treatment facilities in Middletown		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
Number of water service line protection plan customers | Customer		19,700
Number of sewer service line protection plan customers | Customer		15,400
Percentage of water service line protection plan customers signed up		25.10%
Percentage of sewer service protection plan customer signed up		19.70%
Number of internal service line protection plan customers | Customer		3,900
Number Of Non Customers Signed Up With Plan | Customer		1,500
Artesian Utility [Member] | Wastewater treatment facility first of two [Member] | Maximum [Member]
Capacity of wastewater treatment facilities		2,500,000
Artesian Utility [Member] | Wastewater treatment facility second of two [Member] | Maximum [Member]
Capacity of wastewater treatment facilities		250,000

STOCK COMPENSATION PLANS (Detai

STOCK COMPENSATION PLANS (Details)	3 Months Ended
	Mar. 31, 2017USD ($)Director$ / sharesshares	Mar. 31, 2016USD ($)	May 04, 2016$ / sharesshares	Dec. 18, 2015$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of directors in committee | Director	3
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	1 year
Class A Stock [Member] | 2015 Equity Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense | $	$ 34,000	$ 0
Unrecognized expense related to non-vested option shares | $	$ 0
Number of shares authorizes under the plan (in shares) | shares			5,000	5,000
Fair market value (in dollars per share) | $ / shares			$ 27.70	$ 27.38
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) | shares	231,755
Granted, option shares (in shares) | shares	0
Exercised/vested and released, option shares (in shares) | shares	(11,500)
Expired, option shares (in shares) | shares	0
Outstanding at end of period, option shares (in shares) | shares	220,255
Exercisable/vested at end of period, option share (in shares) | shares	220,255
Shares of Class A Non-Voting Common Stock under option [Abstract]
Outstanding at beginning of period, weighted average exercise price (in dollars per shares) | $ / shares	$ 19.32
Granted, weighted average exercise price (in dollars per share) | $ / shares	0
Exercised/vested and released, weighted average exercise price (in dollars per shares) | $ / shares	19.09
Expired/cancelled, weighted average exercise price (in dollars per share) | $ / shares	0
Outstanding at end of period, weighted average exercise price (in dollars per shares) | $ / shares	19.33
Exercisable/vested at end of period, weighted average exercise price (in dollars per shares) | $ / shares	$ 19.33
Outstanding at end of period, weighted average remaining life	4 years 4 months 2 days
Exercisable/vested at end of period, weighted average remaining life	4 years 4 months 2 days
Outstanding at beginning of period, aggregate intrinsic value | $	$ 2,925,000
Granted, aggregate intrinsic value | $	0
Exercised/ vested and released, aggregate intrinsic value | $	158,000
Expired/cancelled, aggregate intrinsic value | $	0
Outstanding at end of period, aggregate intrinsic value | $	2,914,000
Exercisable/vested at end of period, aggregate intrinsic value | $	$ 2,914,000
Class A Stock [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at beginning of period, option shares (in shares) | shares	5,000
Granted, option shares (in shares) | shares	0
Exercised/vested and released, option shares (in shares) | shares	0
Expired, option shares (in shares) | shares	0
Outstanding at end of period, option shares (in shares) | shares	5,000
Exercisable/vested at end of period, option share (in shares) | shares	0
Shares of Class A Non-Voting Common Stock under option [Abstract]
Outstanding at beginning of period, weighted average exercise price (in dollars per shares) | $ / shares	$ 27.70
Granted, weighted average exercise price (in dollars per share) | $ / shares	0
Exercised/vested and released, weighted average exercise price (in dollars per shares) | $ / shares	0
Expired/cancelled, weighted average exercise price (in dollars per share) | $ / shares	0
Outstanding at end of period, weighted average exercise price (in dollars per shares) | $ / shares	27.70
Exercisable/vested at end of period, weighted average exercise price (in dollars per shares) | $ / shares	$ 0
Class A Stock [Member] | Restricted Stock [Member] | 2015 Equity Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized expense related to non-vested option shares | $	$ 12,500
Period over which unvested options cost will recognized	1 month 2 days

REGULATORY ASSETS (Details)

REGULATORY ASSETS (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Regulatory Assets [Line Items]
Artesian Water contributed to its postretirement benefit plan	$ 9,000
Amortization period of other regulatory expense [Abstract]
Depreciation and salary studies	5 years
Goodwill	50 years
Deferred acquisition costs	20 years
Franchise costs	80 years
Summary of regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	$ 7,922,000	$ 3,374,000
Maximum [Member]
Amortization period of other regulatory expense [Abstract]
Amortization period of debt related cost	25 years
Minimum [Member]
Amortization period of other regulatory expense [Abstract]
Amortization period of debt related cost	15 years
Maryland [Member]
Amortization period of other regulatory expense [Abstract]
Regulatory rate proceedings	5 years
Delaware [Member]
Amortization period of other regulatory expense [Abstract]
Regulatory rate proceedings	2 years 6 months
Postretirement Benefit Obligation [Member]
Summary of regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	$ 186,000	186,000
Debt Related Costs [Member]
Summary of regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	6,221,000	1,648,000
Deferred Income Taxes [Member]
Summary of regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	427,000	431,000
Goodwill [Member]
Summary of regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	309,000	310,000
Deferred Acquisition and Franchise Costs [Member]
Summary of regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	674,000	683,000
Expense of Rate and Regulatory Proceedings [Member]
Summary of regulatory assets net of amortization, comprise [Abstract]
Regulatory assets, net	$ 105,000	$ 116,000

NET INCOME PER COMMON SHARE A24

NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE (Details) - $ / shares	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
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)	9,135,000	9,066,000
Dilutive effect of employee stock options (in shares)	69,000	64,000
Weighted average common shares outstanding during the period for Diluted computation (in shares)	9,204,000	9,130,000
Common stock excluded from calculations of diluted net income per share (in shares)	0
Class A Stock [Member]
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	15,000,000
Common stock, shares issued (in shares)	8,263,579	8,191,397
Common stock, shares outstanding (in shares)	8,263,579	8,191,397
Common stock, par value (in dollars per share)	$ 1
Common stock, shares issued during period (in shares)	17,565	15,184
Equity per common share (in dollars per share)	$ 15.38		$ 15.28
Class B Stock [Member]
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	1,040,000
Common stock, shares issued (in shares)	881,452	881,452
Common stock, shares outstanding (in shares)	881,452	881,452
Common stock, par value (in dollars per share)	$ 1

REGULATORY PROCEEDINGS (Details

REGULATORY PROCEEDINGS (Details) - USD ($)	Nov. 29, 2016	May 31, 2016	Nov. 24, 2015	Mar. 31, 2017	Mar. 31, 2016
Other Proceedings [Abstract]
Percentage of Distribution System Improvement Charges annual rate increase application filed by company to regulatory	4.71%	2.30%	1.57%
Increase Amount Based On Eligible Plant Improvements Since Last Rate Increase	$ 16,600,000	$ 10,300,000	$ 7,000,000
Delaware [Member]
Rate Proceedings [Abstract]
Percentage of gross water sales				15.00%
Period to complete rate case by law				7 months
Delaware [Member] | Maximum [Member]
Rate Proceedings [Abstract]
Temporary annual rate increase subject to 15% gross water sales limitation				$ 2,500,000
Percentage of rate relief allowed should a rate case not complete				15.00%
Other Proceedings [Abstract]
Distribution System Improvement Charge rate increase applied between base rate filings				7.50%
Distribution System Improvement Charge rate increase within a 12-month period				5.00%
Artesian Water [Member]
Other Proceedings [Abstract]
Revenue earned in DSIC rate increases				$ 756,000	$ 249,000

INCOME TAXES (Details)

INCOME TAXES (Details)	3 Months Ended
	Mar. 31, 2017USD ($)
Income Tax Examination [Line Items]
Income tax penalties and interest accrued for unrecognized tax position	$ 1,500
Deferred tax assets, net	$ 201,000
State Authorities [Member] | Tax Year 2013 [Member] | Minimum [Member]
Income Tax Examination [Line Items]
Open tax year	2,013
State Authorities [Member] | Tax Year 2016 [Member] | Maximum [Member]
Income Tax Examination [Line Items]
Open tax year	2,016
Federal Authorities [Member]
Income Tax Examination [Line Items]
Additions based on tax positions related to the current year	$ 1,400,000
Federal Authorities [Member] | Tax Year 2015 [Member] | Minimum [Member]
Income Tax Examination [Line Items]
Open tax year	2,015
Federal Authorities [Member] | Tax Year 2016 [Member] | Maximum [Member]
Income Tax Examination [Line Items]
Open tax year	2,016

FAIR VALUE OF FINANCIAL INSTR27

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Carrying Amount [Member]
Long-term Financial Liabilities [Abstract]
Long-term debt	$ 107,859	$ 103,647
Estimated Fair Value [Member]
Long-term Financial Liabilities [Abstract]
Long-term debt	$ 111,515	$ 111,864

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($)	Feb. 28, 2017	Jul. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Related Party Transaction [Line Items]
Stock ownership required to be disclosed, minimum			5.00%
W.F. Construction [Member]
Related Party Transaction [Line Items]
Contract to modify water treatment plant	$ 100,000	$ 131,000
Amounts paid			$ 44,000	$ 0
Accrued liabilities			$ 33,000	$ 0