HONOLULU, May 4, 2016 /PRNewswire/ -- Hawaiian
Electric Industries, Inc. (NYSE - HE) (HEI) today reported
consolidated net income for common stock for the first quarter of
2016 of $32.4 million and diluted
earnings per share (EPS) of $0.30 compared to $31.9 million and EPS of $0.31 for the first quarter of 2015.
Excluding after-tax costs associated with the pending merger with
NextEra Energy, Inc. and the spin-off of ASB Hawaii, Inc. of
$1.6 million and $4.7 million in the first quarter of 2016 and
2015, respectively, core earnings1 for the first quarter
of 2016 were $33.9 million and core
EPS1 of $0.31 compared to
$36.6 million and $0.35, respectively for the first quarter of
2015.
"Hawaii continues to be a
national leader in clean energy, with Hawaiian Electric achieving
over 23 percent renewable energy in 2015 across the five island
electric grids we serve. Recently, our utilities filed
updated energy plans charting a course to achieve our state's goal
of 100 percent renewable energy by 2045, the most ambitious energy
goal in the country. A 100% renewable energy future is an
exciting prospect, and we look forward to collaborating with others
to make it happen," said Constance H.
Lau, HEI president and chief executive officer.
"In the near term, it's critical for our utilities to continue
executing initial action plans that lay the foundation for
Hawaii's renewable future,
including modernizing the power grid and plans for smart meters and
other smart grid technologies; pursuing energy storage to support
renewable energy integration; increasing customer options to manage
energy use; and supporting electrification of transportation to
help reduce reliance on fossil fuels for our cars and other
vehicles."
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1 Non-GAAP
measure which excludes merger-related and spin-off costs
after-tax. See the "Explanation of HEI's Use of Certain
Unaudited Non-GAAP measures" and the related
reconciliation.
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"American Savings Bank continued to deliver solid results with
excellent deposit growth and higher net interest income and margins
in a strong Hawaii economy.
American's solid results enabled it to pay dividends of
$9.0 million to HEI in the
quarter while maintaining healthy capital levels," added Lau.
"With regard to our bank spin and utility merger transactions,
our bank accomplished an important step towards its planned
spin-off by filing its updated Form 10 with the Securities and
Exchange Commission on April 1st. And both NextEra Energy and
the Hawaiian Electric companies just filed their post-evidentiary
hearing reply briefs with the Hawaii Public Utilities Commission on
May 2nd which was the
final step before the PUC can render its decision. We
continue to believe that the right partner for Hawaiian Electric is
NextEra Energy, which brings a powerful combination of renewable
energy experience, operational and technological know-how and
financial strength necessary for achieving Hawaii's 100 percent renewable energy
goal."
HAWAIIAN ELECTRIC COMPANY EARNINGS
Hawaiian Electric Company's2 net income for the first
quarter of 2016 was $25.4 million
compared to $26.9 million in the
first quarter of 2015. The $1.5
million net income decline was mainly the result of higher
depreciation expense as a result of increasing investments for
improved customer reliability and greater system efficiency, and
the integration of more renewable energy.
Operations and maintenance expenses were relatively flat
compared to the prior year quarter. The first quarter of 2016
included higher than expected power supply improvement plan and
liquefied natural gas consulting expenses compared to the first
quarter of 2015 which included higher storm repair costs, bad debt
reserves for one customer account and costs related to the damage
to a combined heat and power generating unit.
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Note: Amounts indicated as "after-tax" in this
earnings release are based upon adjusting items for the composite
statutory tax rates of 39% for the utilities and 40% for the
bank.
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2 Hawaiian Electric Company, unless
otherwise defined, refers to the three utilities, Hawaiian Electric
Company, Inc. on Oahu, Maui Electric Company, Limited, and Hawaii
Electric Light Company, Inc.
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AMERICAN SAVINGS BANK EARNINGS
American Savings Bank's (American) net income for the first
quarter of 2016 was $12.7 million compared to $15.0 million in the fourth (or linked) quarter
of 2015 and $13.5 million in the
first quarter of 2015. First quarter 2016 net income was
$2.3 million lower than the linked
quarter primarily driven by the following on an after-tax
basis:
- $2 million higher provision for
loan losses mainly due to growth in lending in commercial real
estate and a commercial credit charge-off in the first quarter of
2016 compared to lower provisioning during the fourth quarter of
2015 attributable to net recoveries on previously charged-off
loans; and
- $1 million lower noninterest
income compared to the fourth quarter of 2015, which included gains
from the sale of mortgage serving rights.
These were partially offset by $1
million (after-tax) higher net interest income primarily
attributable to loan and investment portfolio growth and higher
yields on interest-earning assets in the first quarter of 2016.
Compared to the first quarter of 2015, net income declined by
$0.8 million primarily driven by the
following on an after-tax basis:
- $2 million higher provision for
loan losses mainly driven by commercial real estate loan growth and
a commercial credit charge-off in the first quarter of 2016;
and
- $1 million higher noninterest
expense primarily due to investment in our electronic banking
platform and higher compensation expense.
These were offset by $3 million
(after-tax) higher net interest income in the first quarter of 2016
due to loan and investment portfolio growth and higher yields on
interest-earning assets.
Loan growth was 2.2% annualized in the first quarter of 2016
driven largely by increases in commercial real estate and consumer
loans. American continues to expect to meet its target of
mid-single digit loan growth for the full year.
Total deposits were $5.1 billion
at March 31, 2016, up $115 million or 9.1% annualized from
December 31, 2015, primarily driven by the 6.5%
annualized increase in low-cost core deposits. Average cost
of funds remained low at 0.23% for the first quarter of 2016, 1
basis point higher than the linked quarter and the prior year
quarter.
Overall, American achieved solid profitability in the first
quarter of 2016 with a return on average equity of 8.9% and a
return on average assets of 0.84%.
For additional information, refer to the American news release
issued on April 29, 2016.
HOLDING AND OTHER COMPANIES
The holding and other companies' net losses were $5.7 million in the first quarter of 2016
compared to $8.5 million in the first
quarter of 2015. Excluding after-tax costs of $1.5 million associated with the pending merger
with NextEra Energy, Inc. and the spin-off of ASB Hawaii, Inc. in
the first quarter of 2016 and $4.4
million in the first quarter of 2015, the holding and other
companies' net losses in 2016 and 2015 were $4.2 million and $4.0
million, respectively.
BOARD DECLARES QUARTERLY DIVIDEND
On May 3, 2016, the board of
directors maintained HEI's quarterly cash dividend of $0.31 cents per share, payable on June 15, 2016, to shareholders of record at the
close of business on May 31, 2016
(ex-dividend date is May 26, 2016).
The dividend is equivalent to an annual rate of $1.24 per
share.
Dividends have been paid continuously since 1901. At the
indicated annual dividend rate and the closing share price on
May 3, 2016 of $32.74, HEI's yield is 3.8%.
WEBCAST AND CONFERENCE CALL TO DISCUSS EARNINGS AND EPS
GUIDANCE
Hawaiian Electric Industries, Inc. will conduct a webcast and
conference call to review its first quarter of 2016 earnings on
Wednesday, May 4, 2016, at 8:00
a.m. Hawaii time
(2:00 p.m. Eastern time).
Interested parties within the United
States may listen to the conference by calling (888)
311-8190 and entering passcode: 70436517. International
parties may listen to the conference by calling (330) 863-3378 and
entering passcode: 70436517 or by accessing the webcast on HEI's
website at www.hei.com under the heading "Investor
Relations." HEI and Hawaiian Electric Company intend to
continue to use HEI's website, www.hei.com, as a means of
disclosing additional information. Such disclosures will be
included on HEI's website in the Investor Relations section.
Accordingly, investors should routinely monitor such portions of
HEI's website, in addition to following HEI's, Hawaiian Electric
Company's and American's press releases, HEI's and Hawaiian
Electric Company's Securities and Exchange Commission (SEC) filings
and HEI's public conference calls and webcasts. The
information on HEI's website is not incorporated by reference in
this document or in HEI's and Hawaiian Electric Company's SEC
filings unless, and except to the extent, specifically incorporated
by reference. Investors may also wish to refer to the Public
Utilities Commission of the State of
Hawaii (PUC) website at dms.puc.hawaii.gov/dms in order to
review documents filed with and issued by the PUC. No
information on the PUC website is incorporated by reference in this
document or in HEI's and Hawaiian Electric Company's SEC
filings.
An online replay of the webcast will be available at the same
website beginning about two hours after the event. Replays of
the conference call will also be available approximately two hours
after the event through May 18, 2016,
by dialing (855) 859-2056 or (404) 537-3406 and entering
passcode: 70436517.
HEI supplies power to approximately 95% of Hawaii's population through its electric
utilities, Hawaiian Electric Company, Inc., Hawaii Electric Light
Company, Inc. and Maui Electric Company, Limited and provides a
wide array of banking and other financial services to consumers and
businesses through American Savings Bank, one of Hawaii's largest financial institutions.
NON-GAAP MEASURES
See "Explanation of HEI's Use of Certain Unaudited Non-GAAP
Measures" and related reconciliations on pages 13 and 14 of this
release.
FORWARD-LOOKING STATEMENTS
This release may contain "forward-looking statements," which
include statements that are predictive in nature, depend upon or
refer to future events or conditions, and usually include words
such as "expects," "anticipates," "intends," "plans," "believes,"
"predicts," "estimates" or similar expressions. In addition, any
statements concerning future financial performance, ongoing
business strategies or prospects or possible future actions are
also forward-looking statements. Forward-looking statements are
based on current expectations and projections about future events
and are subject to risks, uncertainties and the accuracy of
assumptions concerning HEI and its subsidiaries, the performance of
the industries in which they do business and economic and market
factors, among other things. These forward-looking statements are
not guarantees of future performance.
Forward-looking statements in this release should be read in
conjunction with the "Forward-Looking Statements" and "Risk
Factors" discussions (which are incorporated by reference herein)
set forth in HEI's Annual Report on Form 10-K for the year ended
December 31, 2015 and HEI's future
periodic reports that discuss important factors that could cause
HEI's results to differ materially from those anticipated in such
statements. These forward-looking statements speak only as of the
date of the report, presentation or filing in which they are made.
Except to the extent required by the federal securities laws, HEI,
Hawaiian Electric Company, American and their subsidiaries
undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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Hawaiian Electric
Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
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Three months ended
March 31
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(in thousands, except per share amounts)
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|
2016
|
|
2015
|
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Revenues
|
|
|
|
|
|
Electric
utility
|
|
$
|
482,052
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|
|
$
|
573,442
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|
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Bank
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|
68,840
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|
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64,348
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Other
|
|
68
|
|
|
72
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|
Total
revenues
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|
550,960
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|
|
637,862
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Expenses
|
|
|
|
|
|
Electric
utility
|
|
426,726
|
|
|
515,806
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|
|
Bank
|
|
49,246
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|
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43,717
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|
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Other
|
|
6,137
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|
|
8,833
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|
|
Total
expenses
|
|
482,109
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|
|
568,356
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Operating income
(loss)
|
|
|
|
|
|
Electric
utility
|
|
55,326
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|
|
57,636
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|
|
Bank
|
|
19,594
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|
|
20,631
|
|
|
Other
|
|
(6,069)
|
|
|
(8,761)
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Total operating
income
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|
68,851
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|
|
69,506
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Interest expense,
net—other than on deposit liabilities and other bank
borrowings
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|
(20,126)
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|
(19,100)
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Allowance for
borrowed funds used during construction
|
|
662
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|
|
499
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|
|
Allowance for equity
funds used during construction
|
|
1,739
|
|
|
1,413
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|
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Income before
income taxes
|
|
51,126
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|
|
52,318
|
|
|
Income
taxes
|
|
18,301
|
|
|
19,979
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|
|
Net
income
|
|
32,825
|
|
|
32,339
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Preferred stock
dividends of subsidiaries
|
|
473
|
|
|
473
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|
|
Net income for
common stock
|
|
$
|
32,352
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|
|
$
|
31,866
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|
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Basic earnings per
common share
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|
$
|
0.30
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|
|
$
|
0.31
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Diluted earnings
per common share
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|
$
|
0.30
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|
|
$
|
0.31
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Dividends per
common share
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|
$
|
0.31
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|
|
$
|
0.31
|
|
|
Weighted-average
number of common shares outstanding
|
|
107,620
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|
|
103,281
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|
|
Adjusted
weighted-average shares
|
|
107,781
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|
|
103,567
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|
|
Net income (loss)
for common stock by segment
|
|
|
|
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|
Electric
utility
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|
$
|
25,367
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|
|
$
|
26,874
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|
|
Bank
|
|
12,673
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|
|
13,475
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|
|
Other
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|
(5,688)
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|
|
(8,483)
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|
|
Net income for
common stock
|
|
$
|
32,352
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|
|
$
|
31,866
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|
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Comprehensive income
attributable to Hawaiian Electric Industries, Inc.
|
|
$
|
41,152
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|
|
$
|
35,924
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|
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Return on average
common equity (twelve months ended)1
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|
8.4
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%
|
|
8.5
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%
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This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in HEI and ASB Hawaii, Inc.
filings with the SEC. Results of operations for interim periods are
not necessarily indicative of results to be expected for future
interim periods or the full year.
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1 On
a core basis, 2016 and 2015 returns on average common equity
(twelve months ended March 31) were 9.0%. See reconciliation
of GAAP to non-GAAP measures.
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Hawaiian Electric
Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
(dollars in thousands)
|
|
March 31,
2016
|
|
December 31,
2015
|
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
334,743
|
|
|
$
|
300,478
|
|
|
Accounts receivable
and unbilled revenues, net
|
|
210,280
|
|
|
242,766
|
|
|
Available-for-sale
investment securities, at fair value
|
|
906,295
|
|
|
820,648
|
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
11,218
|
|
|
10,678
|
|
|
Loans receivable held
for investment, net
|
|
4,589,950
|
|
|
4,565,781
|
|
|
Loans held for sale,
at lower of cost or fair value
|
|
7,900
|
|
|
4,631
|
|
|
Property, plant and
equipment, net of accumulated depreciation of $2,355,984 and
$2,339,319 at the respective dates
|
|
4,423,567
|
|
|
4,377,658
|
|
|
Regulatory
assets
|
|
888,408
|
|
|
896,731
|
|
|
Other
|
|
415,955
|
|
|
480,457
|
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
|
Total
assets
|
|
$
|
11,870,506
|
|
|
$
|
11,782,018
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
|
119,288
|
|
|
$
|
138,523
|
|
|
Interest and
dividends payable
|
|
27,890
|
|
|
26,042
|
|
|
Deposit
liabilities
|
|
5,139,932
|
|
|
5,025,254
|
|
|
Short-term
borrowings—other than bank
|
|
95,485
|
|
|
103,063
|
|
|
Other bank
borrowings
|
|
329,081
|
|
|
328,582
|
|
|
Long-term debt,
net—other than bank
|
|
1,578,618
|
|
|
1,578,368
|
|
|
Deferred income
taxes
|
|
700,782
|
|
|
680,877
|
|
|
Regulatory
liabilities
|
|
383,793
|
|
|
371,543
|
|
|
Contributions in aid
of construction
|
|
513,520
|
|
|
506,087
|
|
|
Defined benefit
pension and other postretirement benefit plans liability
|
|
584,490
|
|
|
589,918
|
|
|
Other
|
|
421,155
|
|
|
471,828
|
|
|
Total
liabilities
|
|
9,894,034
|
|
|
9,820,085
|
|
|
Preferred stock of
subsidiaries - not subject to mandatory redemption
|
|
34,293
|
|
|
34,293
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Preferred stock, no
par value, authorized 10,000,000 shares; issued: none
|
|
—
|
|
|
—
|
|
|
Common stock, no par
value, authorized 200,000,000 shares; issued and outstanding:
107,875,779 shares and 107,460,406 shares at the respective
dates
|
|
1,635,890
|
|
|
1,629,136
|
|
|
Retained
earnings
|
|
323,751
|
|
|
324,766
|
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
(17,462)
|
|
|
(26,262)
|
|
|
Total
shareholders' equity
|
|
1,942,179
|
|
|
1,927,640
|
|
|
Total liabilities
and shareholders' equity
|
|
$
|
11,870,506
|
|
|
$
|
11,782,018
|
|
|
|
The Consolidated
Balance Sheet as of December 31, 2015 reflects the retrospective
application of ASU No. 2015-03, "Interest - Imputation of Interest
(Subtopic 835-30): Simplifying the Presentation of Debt Issuance
Costs," which was adopted in first quarter 2016.
|
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in HEI and ASB Hawaii, Inc.
filings with the SEC.
|
|
Hawaiian Electric
Company, Inc. (Hawaiian Electric) and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
|
|
|
Three months ended
March 31
|
|
(dollars
in thousands, except per barrel amounts)
|
|
2016
|
|
2015
|
|
Revenues
|
|
$
|
482,052
|
|
|
$
|
573,442
|
|
|
Expenses
|
|
|
|
|
|
Fuel oil
|
|
113,740
|
|
|
176,806
|
|
|
Purchased
power
|
|
115,859
|
|
|
136,007
|
|
|
Other operation and
maintenance
|
|
103,908
|
|
|
104,002
|
|
|
Depreciation
|
|
46,781
|
|
|
44,243
|
|
|
Taxes, other than
income taxes
|
|
46,438
|
|
|
54,748
|
|
|
Total
expenses
|
|
426,726
|
|
|
515,806
|
|
|
Operating
income
|
|
55,326
|
|
|
57,636
|
|
|
Allowance for equity
funds used during construction
|
|
1,739
|
|
|
1,413
|
|
|
Interest expense and
other charges, net
|
|
(17,308)
|
|
|
(16,325)
|
|
|
Allowance for
borrowed funds used during construction
|
|
662
|
|
|
499
|
|
|
Income before income
taxes
|
|
40,419
|
|
|
43,223
|
|
|
Income
taxes
|
|
14,553
|
|
|
15,850
|
|
|
Net
income
|
|
25,866
|
|
|
27,373
|
|
|
Preferred stock
dividends of subsidiaries
|
|
229
|
|
|
229
|
|
|
Net income
attributable to Hawaiian Electric
|
|
25,637
|
|
|
27,144
|
|
|
Preferred stock
dividends of Hawaiian Electric
|
|
270
|
|
|
270
|
|
|
Net income for
common stock
|
|
$
|
25,367
|
|
|
$
|
26,874
|
|
|
Comprehensive
income attributable to Hawaiian Electric
|
|
$
|
26,383
|
|
|
$
|
26,896
|
|
|
OTHER ELECTRIC
UTILITY INFORMATION
|
|
|
|
|
|
Kilowatthour sales
(millions)
|
|
|
|
|
|
Hawaiian
Electric
|
|
1,557
|
|
|
1,527
|
|
|
Hawaii
Electric Light
|
|
258
|
|
|
253
|
|
|
Maui
Electric
|
|
270
|
|
|
264
|
|
|
|
2,085
|
|
|
2,044
|
|
|
Wet-bulb temperature
(Oahu average; degrees Fahrenheit)
|
|
67.3
|
|
|
66.5
|
|
|
Cooling degree days
(Oahu)
|
|
884
|
|
|
795
|
|
|
Average fuel oil cost
per barrel
|
|
$
|
53.99
|
|
|
$
|
86.60
|
|
|
|
|
|
|
|
|
Twelve months
ended March 31
|
|
|
2016
|
|
2015
|
|
Return on average
common equity (%) (simple average)
|
|
|
|
|
|
Hawaiian
Electric
|
|
7.85
|
|
|
8.03
|
|
|
Hawaii
Electric Light
|
|
7.26
|
|
|
6.18
|
|
|
Maui
Electric
|
|
8.53
|
|
|
8.87
|
|
|
Hawaiian
Electric Consolidated
|
|
7.85
|
|
|
7.84
|
|
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in Hawaiian Electric filings with
the SEC. Results of operations for interim periods are not
necessarily indicative of results to be expected for future interim
periods or the full year.
|
|
Hawaiian Electric
Company, Inc. (Hawaiian Electric) and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
(dollars in
thousands, except par value)
|
|
March 31,
2016
|
|
December 31,
2015
|
|
Assets
|
|
|
|
|
|
Property, plant
and equipment
|
|
|
|
|
|
Utility property,
plant and equipment
|
|
|
|
|
|
Land
|
|
$
|
53,207
|
|
|
$
|
52,792
|
|
|
Plant and
equipment
|
|
6,356,006
|
|
|
6,315,698
|
|
|
Less accumulated
depreciation
|
|
(2,284,928)
|
|
|
(2,266,004)
|
|
|
Construction in
progress
|
|
198,004
|
|
|
175,309
|
|
|
Utility property,
plant and equipment, net
|
|
4,322,289
|
|
|
4,277,795
|
|
|
Nonutility property,
plant and equipment, less accumulated depreciation of $1,230 and
$1,229 at respective dates
|
|
7,375
|
|
|
7,272
|
|
|
Total property,
plant and equipment, net
|
|
4,329,664
|
|
|
4,285,067
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
49,042
|
|
|
24,449
|
|
|
Customer accounts
receivable, net
|
|
103,739
|
|
|
132,778
|
|
|
Accrued unbilled
revenues, net
|
|
85,367
|
|
|
84,509
|
|
|
Other accounts
receivable, net
|
|
6,773
|
|
|
10,408
|
|
|
Fuel oil stock, at
average cost
|
|
48,404
|
|
|
71,216
|
|
|
Materials and
supplies, at average cost
|
|
54,256
|
|
|
54,429
|
|
|
Prepayments and
other
|
|
21,803
|
|
|
36,640
|
|
|
Regulatory
assets
|
|
89,192
|
|
|
72,231
|
|
|
Total current
assets
|
|
458,576
|
|
|
486,660
|
|
|
Other long-term
assets
|
|
|
|
|
|
Regulatory
assets
|
|
799,216
|
|
|
824,500
|
|
|
Unamortized debt
expense
|
|
420
|
|
|
497
|
|
|
Other
|
|
74,495
|
|
|
75,486
|
|
|
Total other
long-term assets
|
|
874,131
|
|
|
900,483
|
|
|
Total
assets
|
|
$
|
5,662,371
|
|
|
$
|
5,672,210
|
|
|
Capitalization and
liabilities
|
|
|
|
|
|
Capitalization
|
|
|
|
|
|
Common stock ($6 2/3
par value, authorized 50,000,000 shares; outstanding
15,805,327)
|
|
$
|
105,388
|
|
|
$
|
105,388
|
|
|
Premium on capital
stock
|
|
578,926
|
|
|
578,930
|
|
|
Retained
earnings
|
|
1,045,049
|
|
|
1,043,082
|
|
|
Accumulated other
comprehensive income, net of income taxes
|
|
1,941
|
|
|
925
|
|
|
Common stock
equity
|
|
1,731,304
|
|
|
1,728,325
|
|
|
Cumulative preferred
stock — not subject to mandatory redemption
|
|
34,293
|
|
|
34,293
|
|
|
Long-term debt,
net
|
|
1,278,916
|
|
|
1,278,702
|
|
|
Total
capitalization
|
|
3,044,513
|
|
|
3,041,320
|
|
|
Current
liabilities
|
|
|
|
|
|
Short-term borrowings
from non-affiliates
|
|
12,998
|
|
|
—
|
|
|
Accounts
payable
|
|
95,090
|
|
|
114,846
|
|
|
Interest and
preferred dividends payable
|
|
27,015
|
|
|
23,111
|
|
|
Taxes
accrued
|
|
129,239
|
|
|
191,084
|
|
|
Regulatory
liabilities
|
|
5,416
|
|
|
2,204
|
|
|
Other
|
|
75,006
|
|
|
54,079
|
|
|
Total current
liabilities
|
|
344,764
|
|
|
385,324
|
|
|
Deferred credits
and other liabilities
|
|
|
|
|
|
Deferred income
taxes
|
|
670,126
|
|
|
654,806
|
|
|
Regulatory
liabilities
|
|
378,377
|
|
|
369,339
|
|
|
Unamortized tax
credits
|
|
85,902
|
|
|
84,214
|
|
|
Defined benefit
pension and other postretirement benefit plans liability
|
|
547,517
|
|
|
552,974
|
|
|
Other
|
|
77,652
|
|
|
78,146
|
|
|
Total deferred
credits and other liabilities
|
|
1,759,574
|
|
|
1,739,479
|
|
|
Contributions in aid
of construction
|
|
513,520
|
|
|
506,087
|
|
|
Total
capitalization and liabilities
|
|
$
|
5,662,371
|
|
|
$
|
5,672,210
|
|
|
|
The Consolidated
Balance Sheet as of December 31, 2015 reflects the retrospective
application of ASU No. 2015-03, "Interest - Imputation of Interest
(Subtopic 835-30): Simplifying the Presentation of Debt Issuance
Costs," which was adopted in first quarter 2016.
|
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in Hawaiian Electric filings with
the SEC.
|
|
American Savings
Bank, F.S.B.
STATEMENTS OF INCOME DATA
(Unaudited)
|
|
|
|
Three months
ended
|
|
(in thousands)
|
|
March 31,
2016
|
|
December 31,
2015
|
|
March 31,
2015
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
48,437
|
|
|
$
|
47,136
|
|
|
$
|
45,198
|
|
|
Interest and
dividends on investment securities
|
|
5,017
|
|
|
4,550
|
|
|
3,051
|
|
|
Total interest and
dividend income
|
|
53,454
|
|
|
51,686
|
|
|
48,249
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
1,592
|
|
|
1,467
|
|
|
1,260
|
|
|
Interest on other
borrowings
|
|
1,485
|
|
|
1,510
|
|
|
1,466
|
|
|
Total interest
expense
|
|
3,077
|
|
|
2,977
|
|
|
2,726
|
|
|
Net interest
income
|
|
50,377
|
|
|
48,709
|
|
|
45,523
|
|
|
Provision for loan
losses
|
|
4,766
|
|
|
839
|
|
|
614
|
|
|
Net interest
income after provision for loan losses
|
|
45,611
|
|
|
47,870
|
|
|
44,909
|
|
|
Noninterest
income
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,499
|
|
|
5,667
|
|
|
5,355
|
|
|
Fee income on deposit
liabilities
|
|
5,156
|
|
|
5,746
|
|
|
5,315
|
|
|
Fee income on other
financial products
|
|
2,205
|
|
|
2,006
|
|
|
1,889
|
|
|
Bank-owned life
insurance
|
|
998
|
|
|
1,016
|
|
|
983
|
|
|
Mortgage banking
income
|
|
1,195
|
|
|
1,003
|
|
|
1,822
|
|
|
Other income,
net
|
|
333
|
|
|
1,387
|
|
|
735
|
|
|
Total noninterest
income
|
|
15,386
|
|
|
16,825
|
|
|
16,099
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
22,434
|
|
|
23,705
|
|
|
21,766
|
|
|
Occupancy
|
|
4,138
|
|
|
4,115
|
|
|
4,113
|
|
|
Data
processing
|
|
3,172
|
|
|
3,002
|
|
|
3,116
|
|
|
Services
|
|
2,911
|
|
|
2,474
|
|
|
2,341
|
|
|
Equipment
|
|
1,663
|
|
|
1,578
|
|
|
1,701
|
|
|
Office supplies,
printing and postage
|
|
1,365
|
|
|
1,452
|
|
|
1,483
|
|
|
Marketing
|
|
861
|
|
|
844
|
|
|
841
|
|
|
FDIC
insurance
|
|
884
|
|
|
881
|
|
|
811
|
|
|
Other
expense
|
|
3,975
|
|
|
3,991
|
|
|
4,205
|
|
|
Total noninterest
expense
|
|
41,403
|
|
|
42,042
|
|
|
40,377
|
|
|
Income before
income taxes
|
|
19,594
|
|
|
22,653
|
|
|
20,631
|
|
|
Income
taxes
|
|
6,921
|
|
|
7,700
|
|
|
7,156
|
|
|
Net
income
|
|
$
|
12,673
|
|
|
$
|
14,953
|
|
|
$
|
13,475
|
|
|
Comprehensive
income
|
|
$
|
20,310
|
|
|
$
|
9,477
|
|
|
$
|
17,318
|
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
Return on average
assets
|
|
0.84
|
|
|
1.01
|
|
|
0.96
|
|
|
Return on average
equity
|
|
8.89
|
|
|
10.66
|
|
|
9.96
|
|
|
Return on average
tangible common equity
|
|
10.39
|
|
|
12.48
|
|
|
11.74
|
|
|
Net interest
margin
|
|
3.62
|
|
|
3.55
|
|
|
3.52
|
|
|
Net charge-offs to
average loans outstanding
|
|
0.21
|
|
|
(0.08)
|
|
|
0.04
|
|
|
As of period
end
|
|
|
|
|
|
|
|
Nonperforming assets
to loans outstanding and real estate owned
|
|
1.03
|
|
|
1.02
|
|
|
0.80
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.13
|
|
|
1.08
|
|
|
1.03
|
|
|
Tangible common
equity to tangible assets
|
|
8.08
|
|
|
8.05
|
|
|
8.18
|
|
|
Tier-1 leverage
ratio
|
|
8.7
|
|
|
8.8
|
|
|
8.9
|
|
|
Total capital
ratio
|
|
13.2
|
|
|
13.3
|
|
|
13.2
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
|
9.0
|
|
|
$
|
7.5
|
|
|
$
|
7.5
|
|
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in HEI and ASB Hawaii, Inc.
filings with the SEC. Results of operations for interim periods are
not necessarily indicative of results to be expected for future
interim periods or the full year.
|
|
American Savings
Bank, F.S.B.
BALANCE SHEETS DATA
(Unaudited)
|
|
|
March 31,
2016
|
December 31,
2015
|
|
(in
thousands)
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
110,200
|
|
|
$
|
127,201
|
|
|
Interest-bearing
deposits
|
|
120,428
|
|
|
93,680
|
|
|
Available-for-sale
investment securities, at fair value
|
|
906,295
|
|
|
820,648
|
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
11,218
|
|
|
10,678
|
|
|
Loans receivable held
for investment
|
|
4,642,276
|
|
|
4,615,819
|
|
|
Allowance for loan
losses
|
|
(52,326)
|
|
|
(50,038)
|
|
|
Net loans
|
|
4,589,950
|
|
|
4,565,781
|
|
|
Loans held for sale,
at lower of cost or fair value
|
|
7,900
|
|
|
4,631
|
|
|
Other
|
|
312,333
|
|
|
309,946
|
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
|
Total
assets
|
|
$
|
6,140,514
|
|
|
$
|
6,014,755
|
|
|
Liabilities and
shareholder's equity
|
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
|
1,541,402
|
|
|
$
|
1,520,374
|
|
|
Deposit
liabilities–interest-bearing
|
|
3,598,530
|
|
|
3,504,880
|
|
|
Other
borrowings
|
|
329,081
|
|
|
328,582
|
|
|
Other
|
|
99,605
|
|
|
101,029
|
|
|
Total
liabilities
|
|
5,568,618
|
|
|
5,454,865
|
|
|
Common
stock
|
|
1
|
|
|
1
|
|
|
Additional paid in
capital
|
|
341,192
|
|
|
340,496
|
|
|
Retained
earnings
|
|
240,337
|
|
|
236,664
|
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
|
|
|
|
Net unrealized gains
(losses) on securities
|
$
|
5,556
|
|
|
$
|
(1,872)
|
|
|
|
Retirement benefit
plans
|
(15,190)
|
|
(9,634)
|
|
(15,399)
|
|
(17,271)
|
|
|
Total
shareholder's equity
|
|
571,896
|
|
|
559,890
|
|
|
Total liabilities
and shareholder's equity
|
|
$
|
6,140,514
|
|
|
$
|
6,014,755
|
|
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in HEI and ASB Hawaii, Inc.
filings with the SEC.
|
EXPLANATION OF HEI'S USE OF CERTAIN UNAUDITED NON-GAAP
MEASURES
HEI and Hawaiian Electric Company management use certain
non-GAAP measures to evaluate the performance of the utility and
HEI. Management believes these non-GAAP measures provide
useful information and are a better indicator of the companies'
core operating activities. Core earnings and other financial
measures as presented here may not be comparable to similarly
titled measures used by other companies. The accompanying
tables provide a reconciliation of reported GAAP1
earnings to non-GAAP core earnings and the adjusted return on
average common equity (ROACE) for the utility and HEI
consolidated.
The reconciling adjustment from GAAP earnings to core earnings
is limited to the costs related to the pending merger between HEI
and NextEra Energy, Inc. and the spin-off of ASB Hawaii, Inc.
For more information on the pending merger, see HEI's definitive
proxy statement on Form DEFM14A filed on March 26, 2015. Management does not
consider these items to be representative of the company's
fundamental core earnings.
The accompanying table also provides the calculation of utility
GAAP O&M adjusted for costs related to the pending merger
discussed above. "O&M-related net income neutral items" which
are O&M expenses covered by specific surcharges or by third
parties have also been excluded. These "O&M-related net
income neutral items" are grossed-up in revenue and expense and do
not impact net income.
|
RECONCILIATION OF
GAAP1 TO NON-GAAP MEASURES
|
|
|
Hawaiian Electric
Industries, Inc. and Subsidiaries
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
($ in millions,
except per share amounts)
|
|
|
|
Three months ended
March 31
|
|
2016
|
2015
|
|
HEI CONSOLIDATED
NET INCOME
|
|
|
|
GAAP (as
reported)
|
$
|
32.4
|
|
$
|
31.9
|
|
|
Excluding special
items (after-tax):
|
|
|
|
Costs related to
pending merger with NextEra Energy, Inc. and spin-off of ASB
Hawaii, Inc
|
1.6
|
|
4.7
|
|
|
Non-GAAP
(core)
|
$
|
33.9
|
|
$
|
36.6
|
|
|
HEI CONSOLIDATED
DILUTED EARNINGS PER SHARE
|
|
|
GAAP (as
reported)
|
$
|
0.30
|
|
$
|
0.31
|
|
|
Excluding special
items (after-tax):
|
|
|
|
Costs related to
pending merger with NextEra Energy, Inc. and spin-off of ASB
Hawaii, Inc
|
0.01
|
|
0.05
|
|
|
Non-GAAP
(core)
|
$
|
0.31
|
|
$
|
0.35
|
|
|
|
|
Twelve months
ended March 31
|
|
2016
|
2015
|
|
HEI CONSOLIDATED
RETURN ON AVERAGE COMMON EQUITY (ROACE) (simple
average)
|
|
|
|
Based on
GAAP
|
8.4
|
%
|
8.5
|
%
|
|
Based on non-GAAP
(core)2
|
9.0
|
%
|
9.0
|
%
|
|
|
|
|
Note: Columns
may not foot due to rounding
|
|
|
|
|
|
|
1
Accounting principles generally accepted in the United States of
America
|
|
|
|
|
2
Calculated as core net income divided by average GAAP common
equity
|
|
|
|
|
|
|
|
RECONCILIATION OF
GAAP1 TO NON-GAAP MEASURES
|
|
|
Hawaiian Electric
Company, Inc. and Subsidiaries
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
($ in
millions)
|
|
|
|
Three months ended
March 31
|
|
2016
|
2015
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED NET INCOME
|
|
|
|
GAAP (as
reported)
|
$
|
25.4
|
|
$
|
26.9
|
|
|
Excluding special
items (after-tax):
|
|
|
|
Costs related to
pending merger with NextEra Energy, Inc.
|
—
|
|
0.3
|
|
|
Non-GAAP
(core)
|
$
|
25.4
|
|
$
|
27.1
|
|
|
|
|
|
Twelve months
ended March 31
|
|
2016
|
2015
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED RETURN ON AVERAGE COMMON EQUITY (ROACE) (simple
average)
|
|
|
|
Based on
GAAP
|
7.9
|
%
|
7.8
|
%
|
|
Based on non-GAAP
(core)2
|
7.9
|
%
|
7.9
|
%
|
|
|
|
|
Three months ended
March 31
|
|
2016
|
2015
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED OTHER OPERATION AND MAINTENANCE (O&M)
EXPENSE
|
|
|
|
GAAP (as
reported)
|
$
|
103.9
|
|
$
|
104.0
|
|
|
Excluding
O&M-related net income neutral items3
|
1.6
|
|
1.9
|
|
|
Excluding costs
related to pending merger with NextEra Energy,
Inc.
|
0.1
|
|
0.4
|
|
|
Non-GAAP (Adjusted
other O&M expense)
|
$
|
102.2
|
|
$
|
101.7
|
|
|
|
|
|
Note: Columns
may not foot due to rounding
|
|
|
|
|
|
|
1
Accounting principles generally accepted in the United States of
America
|
|
|
|
|
2
Calculated as core net income divided by average GAAP common
equity
|
|
|
|
|
3
Expenses covered by surcharges or by third parties recorded in
revenues
|
|
Contact:
|
Clifford H.
Chen
|
Telephone: (808)
543-7300
|
|
Manager, Investor
Relations &
Strategic Planning
|
E-mail:
ir@hei.com
|
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visit:http://www.prnewswire.com/news-releases/hawaiian-electric-industries-reports-first-quarter-2016-earnings-300262845.html
SOURCE Hawaiian Electric Industries, Inc.