HONOLULU, Nov. 4, 2016 /PRNewswire/ -- Hawaiian
Electric Industries, Inc.(NYSE - HE) (HEI) today reported
consolidated net income for common stock for the third quarter of
2016 of $127.1 million and diluted
earnings per share (EPS) of $1.17 compared to $50.7 million and EPS of $0.47 for the third quarter of 2015.
Financial results for the third quarter of 2016 include the
one-time increase to net income of $63.8 million related to the recently
terminated merger with NextEra Energy, Inc. and related spin-off of
ASB Hawaii, Inc., as compared to $1.7
million net expense in the third quarter of 2015.
Excluding these items, core earnings1 for the third
quarter of 2016 were $63.3 million
and core EPS1 of $0.58
compared to $52.4 million and
$0.49 respectively for the third
quarter of 2015.
"The NextEra Energy termination payment will support HEI's
investments in our community and projects our utility is
undertaking to reliably integrate more renewable energy for its
customers. Through the first nine months of this year,
Hawaiian Electric invested $230
million in local infrastructure projects to modernize the
electric grid and to reliably integrate more renewable energy,
moving us closer to our renewable energy goals. And in
October, Hawaiian Electric marked its 125th year of
serving the people of Hawaii. At American Savings Bank, we
continued to deliver solid earnings growth and strong year-to-date
annualized deposit growth of 9.4%," said Constance H. Lau, HEI president and chief
executive officer.
|
________________________
|
|
1
|
Non-GAAP measure
which excludes fees, reimbursements and other related costs to the
recently terminated merger between HEI and NextEra Energy, Inc. and
the terminated spin-off of ASB Hawaii, Inc. and costs related to
the recently terminated LNG contract which required PUC approval of
the merger with NextEra Energy, Inc. See the "Explanation of
HEI's Use of Certain Unaudited Non-GAAP measures" and the related
reconciliation.
|
HAWAIIAN ELECTRIC COMPANY EARNINGS
Hawaiian Electric Company's2 net income for the third
quarter of 2016 was $47.0 million
compared to $43.0 million in the
third quarter of 2015. The increase was largely due to the
non-recurrence of one-time items recorded in 2015.
O&M expenses were $5 million
(after-tax) lower compared to the prior year quarter as the third
quarter of 2015 was impacted by one-time items including the
$3 million after-tax adjustment for
enterprise resource planning software costs. In addition,
third quarter 2016 O&M costs were $2
million (after-tax) lower due to fewer overhauls
performed.
Lower O&M expenses were partially offset by $1 million higher depreciation expense as a
result of increased investments for improved customer reliability
and greater system efficiency, and the integration of more
renewable energy.
Net revenues were relatively flat as $2
million (after-tax) higher recovery of costs for clean
energy and reliability investments were offset by $2 million (after-tax) lower fuel efficiency.
AMERICAN SAVINGS BANK EARNINGS
American Savings Bank's (American) net income for the third
quarter of 2016 was $15.1 million compared to $13.3 million in the second (or linked) quarter
of 2016 and $13.5 million in the
third quarter of 2015. Third quarter 2016 net income was
$1.8 million higher than the linked
quarter primarily driven by $2 million (after-tax) higher
revenues due to higher noninterest income and net interest income,
partially offset by higher provision for loan losses.
Compared to the third quarter of 2015, net income improved by
$1.7 million primarily driven by
$2 million (after-tax) higher net interest income due to
growth in the commercial real estate and consumer loan
portfolios. Higher net interest income was partially offset
by higher provision for loan losses.
|
_________________________
|
|
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.
|
|
|
|
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.
|
Total loans were $4.7 billion at
September 30, 2016, essentially flat
compared to the linked quarter and increased $118 million year-to-date 2016.
Year-to-date annualized loan growth was 3.4%, on track for
American's target of mid-single digit loan growth for the full
year.
Total deposits were $5.4 billion
at September 30, 2016, an increase of
$149 million and $355 million in the third quarter and
year-to-date 2016, respectively. Year-to-date annualized
deposit growth of 9.4% was primarily driven by the $190 million (5.6% year-to-date annualized)
increase in low-cost core deposits. Average cost of
funds remained low at 0.24% for the third quarter of 2016, 1 basis
point higher than the linked quarter and 2 basis points higher than
the prior year quarter.
Overall, American achieved solid profitability in the third
quarter of 2016 with a return on average equity of 10.4% and a
return on average assets of 0.97%.
For additional information, refer to the American news release
issued on October 28, 2016.
HOLDING AND OTHER COMPANIES
The holding and other companies' net income (loss) were
$65.1 million net income in the third
quarter of 2016 compared to ($5.8)
million net loss in the third quarter of 2015.
Excluding one-time merger-related items of $63.8 million net income in the third quarter of
2016 and $1.7 million net expenses in
the third quarter of 2015, the holding and other companies' net
income (loss) in the third quarter of 2016 and 2015 were
$1.2 million net income and
($4.1) million net loss,
respectively. The holding company's third quarter 2016
results included favorable tax adjustments as HEI moved out of a
federal net operating loss position, enabling the recognition of
tax benefits.
WEBCAST AND CONFERENCE CALL TO DISCUSS EARNINGS AND EPS
GUIDANCE
Hawaiian Electric Industries, Inc. will conduct a webcast and
conference call to review its third quarter of 2016 earnings on
Friday, November 4, 2016, at 11:00
a.m. Hawaii time
(5:00 p.m. Eastern time).
Interested parties within the United
States may listen to the conference by calling (888)
317-6016. International parties may listen to the conference
by calling (412) 317-6016 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 November 18,
2016, by dialing (877) 344-7529 or (412) 317-0088 and
entering passcode: 10094997.
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 12 and 13 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 "will," "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, HEI's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2016 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.
|
Hawaiian Electric
Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
|
|
|
Three months
ended
September 30
|
|
Nine months
ended
September 30
|
|
(in thousands, except per share amounts)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
$
|
572,253
|
|
|
$
|
648,127
|
|
|
$
|
1,549,700
|
|
|
$
|
1,779,732
|
|
|
Bank
|
|
73,708
|
|
|
69,091
|
|
|
213,297
|
|
|
199,222
|
|
|
Other
|
|
94
|
|
|
(42)
|
|
|
262
|
|
|
(4)
|
|
|
Total
revenues
|
|
646,055
|
|
|
717,176
|
|
|
1,763,259
|
|
|
1,978,950
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
482,441
|
|
|
565,470
|
|
|
1,333,876
|
|
|
1,573,278
|
|
|
Bank
|
|
50,981
|
|
|
48,289
|
|
|
150,752
|
|
|
138,063
|
|
|
Other
|
|
7,191
|
|
|
6,322
|
|
|
18,883
|
|
|
28,278
|
|
|
Total
expenses
|
|
540,613
|
|
|
620,081
|
|
|
1,503,511
|
|
|
1,739,619
|
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
89,812
|
|
|
82,657
|
|
|
215,824
|
|
|
206,454
|
|
|
Bank
|
|
22,727
|
|
|
20,802
|
|
|
62,545
|
|
|
61,159
|
|
|
Other
|
|
(7,097)
|
|
|
(6,364)
|
|
|
(18,621)
|
|
|
(28,282)
|
|
|
Total operating
income
|
|
105,442
|
|
|
97,095
|
|
|
259,748
|
|
|
239,331
|
|
|
Merger termination
fee
|
|
90,000
|
|
|
—
|
|
|
90,000
|
|
|
—
|
|
|
Interest expense,
net—other than on deposit liabilities and other bank
borrowings
|
|
(19,365)
|
|
|
(19,229)
|
|
|
(56,792)
|
|
|
(57,235)
|
|
|
Allowance for
borrowed funds used during construction
|
|
854
|
|
|
737
|
|
|
2,276
|
|
|
1,918
|
|
|
Allowance for equity
funds used during construction
|
|
2,274
|
|
|
2,057
|
|
|
6,010
|
|
|
5,366
|
|
|
Income before
income taxes
|
|
179,205
|
|
|
80,660
|
|
|
301,242
|
|
|
189,380
|
|
|
Income
taxes
|
|
51,592
|
|
|
29,516
|
|
|
96,203
|
|
|
70,406
|
|
|
Net
income
|
|
127,613
|
|
|
51,144
|
|
|
205,039
|
|
|
118,974
|
|
|
Preferred stock
dividends of subsidiaries
|
|
471
|
|
|
471
|
|
|
1,417
|
|
|
1,417
|
|
|
Net income for
common stock
|
|
$
|
127,142
|
|
|
$
|
50,673
|
|
|
$
|
203,622
|
|
|
$
|
117,557
|
|
|
Basic earnings per
common share
|
|
$
|
1.17
|
|
|
$
|
0.47
|
|
|
$
|
1.89
|
|
|
$
|
1.11
|
|
|
Diluted earnings
per common share
|
|
$
|
1.17
|
|
|
$
|
0.47
|
|
|
$
|
1.88
|
|
|
$
|
1.11
|
|
|
Dividends per
common share
|
|
$
|
0.31
|
|
|
$
|
0.31
|
|
|
$
|
0.93
|
|
|
$
|
0.93
|
|
|
Weighted-average
number of common shares outstanding
|
|
108,268
|
|
|
107,457
|
|
|
107,951
|
|
|
106,067
|
|
|
Adjusted
weighted-average shares
|
|
108,472
|
|
|
107,738
|
|
|
108,171
|
|
|
106,347
|
|
|
Net income (loss)
for common stock by segment
|
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
$
|
46,974
|
|
|
$
|
43,006
|
|
|
$
|
108,198
|
|
|
$
|
102,721
|
|
|
Bank
|
|
15,104
|
|
|
13,451
|
|
|
41,062
|
|
|
39,777
|
|
|
Other
|
|
65,064
|
|
|
(5,784)
|
|
|
54,362
|
|
|
(24,941)
|
|
|
Net income for
common stock
|
|
$
|
127,142
|
|
|
$
|
50,673
|
|
|
$
|
203,622
|
|
|
$
|
117,557
|
|
|
Comprehensive income
attributable to Hawaiian Electric Industries, Inc.
|
|
$
|
125,473
|
|
|
$
|
55,103
|
|
|
$
|
212,861
|
|
|
$
|
122,918
|
|
|
Return on average
common equity (twelve months ended)1
|
|
|
|
|
|
12.3
|
%
|
|
8.1
|
%
|
|
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in HEI 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.
|
|
|
|
1 On a core basis, 2016 and 2015 returns on average
common equity (twelve months ended September 30) were 9.5% and
9.1%. See reconciliation of GAAP to non-GAAP
measures.
|
|
Hawaiian Electric
Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
(dollars in thousands)
|
|
September 30,
2016
|
|
December 31,
2015
|
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
284,355
|
|
|
$
|
300,478
|
|
|
Accounts receivable
and unbilled revenues, net
|
|
250,076
|
|
|
242,766
|
|
|
Available-for-sale
investment securities, at fair value
|
|
996,984
|
|
|
820,648
|
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
11,218
|
|
|
10,678
|
|
|
Loans receivable held
for investment, net
|
|
4,675,901
|
|
|
4,565,781
|
|
|
Loans held for sale,
at lower of cost or fair value
|
|
26,743
|
|
|
4,631
|
|
|
Property, plant and
equipment, net of accumulated depreciation of $2,416,937 and
$2,339,319 at the respective dates
|
|
4,532,556
|
|
|
4,377,658
|
|
|
Regulatory
assets
|
|
879,775
|
|
|
896,731
|
|
|
Other
|
|
459,187
|
|
|
480,457
|
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
|
Total
assets
|
|
$
|
12,198,985
|
|
|
$
|
11,782,018
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
|
134,176
|
|
|
$
|
138,523
|
|
|
Interest and
dividends payable
|
|
27,115
|
|
|
26,042
|
|
|
Deposit
liabilities
|
|
5,380,721
|
|
|
5,025,254
|
|
|
Short-term
borrowings—other than bank
|
|
—
|
|
|
103,063
|
|
|
Other bank
borrowings
|
|
265,388
|
|
|
328,582
|
|
|
Long-term debt,
net—other than bank
|
|
1,579,065
|
|
|
1,578,368
|
|
|
Deferred income
taxes
|
|
721,470
|
|
|
680,877
|
|
|
Regulatory
liabilities
|
|
400,479
|
|
|
371,543
|
|
|
Contributions in aid
of construction
|
|
525,491
|
|
|
506,087
|
|
|
Defined benefit
pension and other postretirement benefit plans liability
|
|
572,933
|
|
|
589,918
|
|
|
Other
|
|
489,466
|
|
|
471,828
|
|
|
Total
liabilities
|
|
10,096,304
|
|
|
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:
108,503,210 shares and 107,460,406 shares at the respective
dates
|
|
1,657,421
|
|
|
1,629,136
|
|
|
Retained
earnings
|
|
427,990
|
|
|
324,766
|
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
(17,023)
|
|
|
(26,262)
|
|
|
Total
shareholders' equity
|
|
2,068,388
|
|
|
1,927,640
|
|
|
Total liabilities
and shareholders' equity
|
|
$
|
12,198,985
|
|
|
$
|
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 filings with the
SEC.
|
|
Hawaiian Electric
Company, Inc. (Hawaiian Electric) and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
|
|
|
Three months
ended
September 30
|
|
Nine months
ended
September 30
|
|
(dollars
in thousands, except per barrel amounts)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Revenues
|
|
$
|
572,253
|
|
|
$
|
648,127
|
|
|
$
|
1,549,700
|
|
|
$
|
1,779,732
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Fuel oil
|
|
128,624
|
|
|
195,633
|
|
|
334,263
|
|
|
518,670
|
|
|
Purchased
power
|
|
157,750
|
|
|
160,518
|
|
|
412,667
|
|
|
445,809
|
|
|
Other operation and
maintenance
|
|
94,789
|
|
|
103,653
|
|
|
298,260
|
|
|
306,519
|
|
|
Depreciation
|
|
46,759
|
|
|
44,356
|
|
|
140,300
|
|
|
132,840
|
|
|
Taxes, other than
income taxes
|
|
54,519
|
|
|
61,310
|
|
|
148,386
|
|
|
169,440
|
|
|
Total
expenses
|
|
482,441
|
|
|
565,470
|
|
|
1,333,876
|
|
|
1,573,278
|
|
|
Operating
income
|
|
89,812
|
|
|
82,657
|
|
|
215,824
|
|
|
206,454
|
|
|
Allowance for equity
funds used during construction
|
|
2,274
|
|
|
2,057
|
|
|
6,010
|
|
|
5,366
|
|
|
Interest expense and
other charges, net
|
|
(17,323)
|
|
|
(16,557)
|
|
|
(49,734)
|
|
|
(49,170)
|
|
|
Allowance for
borrowed funds used during construction
|
|
854
|
|
|
737
|
|
|
2,276
|
|
|
1,918
|
|
|
Income before income
taxes
|
|
75,617
|
|
|
68,894
|
|
|
174,376
|
|
|
164,568
|
|
|
Income
taxes
|
|
28,145
|
|
|
25,390
|
|
|
64,682
|
|
|
60,351
|
|
|
Net
income
|
|
47,472
|
|
|
43,504
|
|
|
109,694
|
|
|
104,217
|
|
|
Preferred stock
dividends of subsidiaries
|
|
228
|
|
|
228
|
|
|
686
|
|
|
686
|
|
|
Net income
attributable to Hawaiian Electric
|
|
47,244
|
|
|
43,276
|
|
|
109,008
|
|
|
103,531
|
|
|
Preferred stock
dividends of Hawaiian Electric
|
|
270
|
|
|
270
|
|
|
810
|
|
|
810
|
|
|
Net income for
common stock
|
|
$
|
46,974
|
|
|
$
|
43,006
|
|
|
$
|
108,198
|
|
|
$
|
102,721
|
|
|
Comprehensive
income attributable to Hawaiian Electric
|
|
$
|
47,125
|
|
|
$
|
43,010
|
|
|
$
|
108,610
|
|
|
$
|
102,732
|
|
|
OTHER ELECTRIC
UTILITY INFORMATION
|
|
|
|
|
|
|
|
|
|
Kilowatthour sales
(millions)
|
|
|
|
|
|
|
|
|
|
Hawaiian
Electric
|
|
1,800
|
|
|
1,874
|
|
|
4,982
|
|
|
5,016
|
|
|
Hawaii
Electric Light
|
|
277
|
|
|
282
|
|
|
795
|
|
|
792
|
|
|
Maui
Electric
|
|
295
|
|
|
312
|
|
|
836
|
|
|
848
|
|
|
|
2,372
|
|
|
2,468
|
|
|
6,613
|
|
|
6,656
|
|
|
Wet-bulb temperature
(Oahu average; degrees Fahrenheit)
|
|
72.3
|
|
|
74.9
|
|
|
69.8
|
|
|
70.2
|
|
|
Cooling degree days
(Oahu)
|
|
1,496
|
|
|
1,711
|
|
|
3,637
|
|
|
3,687
|
|
|
Average fuel oil cost
per barrel
|
|
$
|
57.72
|
|
|
$
|
81.35
|
|
|
$
|
52.06
|
|
|
$
|
79.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months
ended
September
30
|
|
|
|
|
|
|
2016
|
|
2015
|
|
Return on average
common equity (%) (simple average)
|
|
|
|
|
|
|
|
|
|
Hawaiian
Electric
|
|
|
|
|
|
7.94
|
|
|
7.95
|
|
|
Hawaii
Electric Light
|
|
|
|
|
|
8.46
|
|
|
6.30
|
|
|
Maui
Electric
|
|
|
|
|
|
8.45
|
|
|
9.21
|
|
|
Hawaiian
Electric Consolidated1
|
|
|
|
|
|
8.11
|
|
|
7.86
|
|
|
|
|
|
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.
|
|
|
|
|
1 On
a core basis, 2016 and 2015 returns on average common equity
(twelve months ended September 30) were 8.2% and 7.9%. See
reconciliation of GAAP to non-GAAP measures.
|
|
Hawaiian Electric
Company, Inc. (Hawaiian Electric) and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
(dollars in
thousands, except par value)
|
|
September 30,
2016
|
|
December 31,
2015
|
|
Assets
|
|
|
|
|
|
Property, plant
and equipment
|
|
|
|
|
|
Utility property,
plant and equipment
|
|
|
|
|
|
Land
|
|
$
|
53,175
|
|
|
$
|
52,792
|
|
|
Plant and
equipment
|
|
6,483,562
|
|
|
6,315,698
|
|
|
Less accumulated
depreciation
|
|
(2,343,601)
|
|
|
(2,266,004)
|
|
|
Construction in
progress
|
|
236,608
|
|
|
175,309
|
|
|
Utility property,
plant and equipment, net
|
|
4,429,744
|
|
|
4,277,795
|
|
|
Nonutility property,
plant and equipment, less accumulated depreciation of $1,231 and
$1,229 at respective dates
|
|
7,374
|
|
|
7,272
|
|
|
Total property,
plant and equipment, net
|
|
4,437,118
|
|
|
4,285,067
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
22,977
|
|
|
24,449
|
|
|
Customer accounts
receivable, net
|
|
134,418
|
|
|
132,778
|
|
|
Accrued unbilled
revenues, net
|
|
95,167
|
|
|
84,509
|
|
|
Other accounts
receivable, net
|
|
4,629
|
|
|
10,408
|
|
|
Fuel oil stock, at
average cost
|
|
64,480
|
|
|
71,216
|
|
|
Materials and
supplies, at average cost
|
|
57,356
|
|
|
54,429
|
|
|
Prepayments and
other
|
|
35,645
|
|
|
36,640
|
|
|
Regulatory
assets
|
|
74,681
|
|
|
72,231
|
|
|
Total current
assets
|
|
489,353
|
|
|
486,660
|
|
|
Other long-term
assets
|
|
|
|
|
|
Regulatory
assets
|
|
805,094
|
|
|
824,500
|
|
|
Unamortized debt
expense
|
|
267
|
|
|
497
|
|
|
Other
|
|
68,994
|
|
|
75,486
|
|
|
Total other
long-term assets
|
|
874,355
|
|
|
900,483
|
|
|
Total
assets
|
|
$
|
5,800,826
|
|
|
$
|
5,672,210
|
|
|
Capitalization and
liabilities
|
|
|
|
|
|
Capitalization
|
|
|
|
|
|
Common stock ($6 2/3
par value, authorized 50,000,000 shares; outstanding 15,805,327
shares)
|
|
$
|
105,388
|
|
|
$
|
105,388
|
|
|
Premium on capital
stock
|
|
578,921
|
|
|
578,930
|
|
|
Retained
earnings
|
|
1,081,081
|
|
|
1,043,082
|
|
|
Accumulated other
comprehensive income, net of income taxes
|
|
1,337
|
|
|
925
|
|
|
Common stock
equity
|
|
1,766,727
|
|
|
1,728,325
|
|
|
Cumulative preferred
stock — not subject to mandatory redemption
|
|
34,293
|
|
|
34,293
|
|
|
Long-term debt,
net
|
|
1,279,327
|
|
|
1,278,702
|
|
|
Total
capitalization
|
|
3,080,347
|
|
|
3,041,320
|
|
|
Current
liabilities
|
|
|
|
|
|
Short-term borrowings
from affiliates
|
|
21,000
|
|
|
—
|
|
|
Accounts
payable
|
|
107,497
|
|
|
114,846
|
|
|
Interest and
preferred dividends payable
|
|
25,934
|
|
|
23,111
|
|
|
Taxes
accrued
|
|
167,276
|
|
|
191,084
|
|
|
Regulatory
liabilities
|
|
2,987
|
|
|
2,204
|
|
|
Other
|
|
56,753
|
|
|
54,079
|
|
|
Total current
liabilities
|
|
381,447
|
|
|
385,324
|
|
|
Deferred credits
and other liabilities
|
|
|
|
|
|
Deferred income
taxes
|
|
714,559
|
|
|
654,806
|
|
|
Regulatory
liabilities
|
|
397,492
|
|
|
369,339
|
|
|
Unamortized tax
credits
|
|
87,794
|
|
|
84,214
|
|
|
Defined benefit
pension and other postretirement benefit plans liability
|
|
535,912
|
|
|
552,974
|
|
|
Other
|
|
77,784
|
|
|
78,146
|
|
|
Total deferred
credits and other liabilities
|
|
1,813,541
|
|
|
1,739,479
|
|
|
Contributions in aid
of construction
|
|
525,491
|
|
|
506,087
|
|
|
Total
capitalization and liabilities
|
|
$
|
5,800,826
|
|
|
$
|
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
|
|
Nine months ended
September 30
|
|
(in thousands)
|
|
September 30,
2016
|
|
June 30,
2016
|
|
September 30,
2015
|
|
2016
|
|
2015
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
50,444
|
|
|
$
|
49,690
|
|
|
$
|
46,413
|
|
|
$
|
148,571
|
|
|
$
|
137,646
|
|
|
Interest and
dividends on investment securities
|
|
4,759
|
|
|
4,443
|
|
|
4,213
|
|
|
14,219
|
|
|
10,570
|
|
|
Total interest and
dividend income
|
|
55,203
|
|
|
54,133
|
|
|
50,626
|
|
|
162,790
|
|
|
148,216
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
1,871
|
|
|
1,691
|
|
|
1,355
|
|
|
5,154
|
|
|
3,881
|
|
|
Interest on other
borrowings
|
|
1,464
|
|
|
1,467
|
|
|
1,515
|
|
|
4,416
|
|
|
4,468
|
|
|
Total interest
expense
|
|
3,335
|
|
|
3,158
|
|
|
2,870
|
|
|
9,570
|
|
|
8,349
|
|
|
Net interest
income
|
|
51,868
|
|
|
50,975
|
|
|
47,756
|
|
|
153,220
|
|
|
139,867
|
|
|
Provision for loan
losses
|
|
5,747
|
|
|
4,753
|
|
|
2,997
|
|
|
15,266
|
|
|
5,436
|
|
|
Net interest
income after provision for loan losses
|
|
46,121
|
|
|
46,222
|
|
|
44,759
|
|
|
137,954
|
|
|
134,431
|
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,599
|
|
|
5,701
|
|
|
5,639
|
|
|
16,799
|
|
|
16,544
|
|
|
Fee income on deposit
liabilities
|
|
5,627
|
|
|
5,262
|
|
|
5,883
|
|
|
16,045
|
|
|
16,622
|
|
|
Fee income on other
financial products
|
|
2,151
|
|
|
2,207
|
|
|
2,096
|
|
|
6,563
|
|
|
6,088
|
|
|
Bank-owned life
insurance
|
|
1,616
|
|
|
1,006
|
|
|
1,021
|
|
|
3,620
|
|
|
3,062
|
|
|
Mortgage banking
income
|
|
2,347
|
|
|
1,554
|
|
|
1,437
|
|
|
5,096
|
|
|
5,327
|
|
|
Gains on sale of
investment securities, net
|
|
—
|
|
|
598
|
|
|
—
|
|
|
598
|
|
|
—
|
|
|
Other income,
net
|
|
1,165
|
|
|
288
|
|
|
2,389
|
|
|
1,786
|
|
|
3,363
|
|
|
Total noninterest
income
|
|
18,505
|
|
|
16,616
|
|
|
18,465
|
|
|
50,507
|
|
|
51,006
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
22,844
|
|
|
21,919
|
|
|
22,728
|
|
|
67,197
|
|
|
66,813
|
|
|
Occupancy
|
|
3,991
|
|
|
4,115
|
|
|
4,128
|
|
|
12,244
|
|
|
12,250
|
|
|
Data
processing
|
|
3,150
|
|
|
3,277
|
|
|
3,032
|
|
|
9,599
|
|
|
9,101
|
|
|
Services
|
|
2,427
|
|
|
2,755
|
|
|
2,556
|
|
|
8,093
|
|
|
7,730
|
|
|
Equipment
|
|
1,759
|
|
|
1,771
|
|
|
1,608
|
|
|
5,193
|
|
|
4,999
|
|
|
Office supplies,
printing and postage
|
|
1,483
|
|
|
1,583
|
|
|
1,511
|
|
|
4,431
|
|
|
4,297
|
|
|
Marketing
|
|
747
|
|
|
899
|
|
|
934
|
|
|
2,507
|
|
|
2,619
|
|
|
FDIC
insurance
|
|
907
|
|
|
913
|
|
|
809
|
|
|
2,704
|
|
|
2,393
|
|
|
Other
expense
|
|
4,591
|
|
|
5,382
|
|
|
5,116
|
|
|
13,948
|
|
|
14,076
|
|
|
Total noninterest
expense
|
|
41,899
|
|
|
42,614
|
|
|
42,422
|
|
|
125,916
|
|
|
124,278
|
|
|
Income before
income taxes
|
|
22,727
|
|
|
20,224
|
|
|
20,802
|
|
|
62,545
|
|
|
61,159
|
|
|
Income
taxes
|
|
7,623
|
|
|
6,939
|
|
|
7,351
|
|
|
21,483
|
|
|
21,382
|
|
|
Net
income
|
|
$
|
15,104
|
|
|
$
|
13,285
|
|
|
$
|
13,451
|
|
|
$
|
41,062
|
|
|
$
|
39,777
|
|
|
Comprehensive
income
|
|
$
|
13,176
|
|
|
$
|
16,051
|
|
|
$
|
17,678
|
|
|
$
|
49,537
|
|
|
$
|
44,540
|
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
0.97
|
|
|
0.86
|
|
|
0.92
|
|
|
0.89
|
|
|
0.92
|
|
|
Return on average
equity
|
|
10.36
|
|
|
9.22
|
|
|
9.73
|
|
|
9.50
|
|
|
9.69
|
|
|
Return on average
tangible common equity
|
|
12.06
|
|
|
10.75
|
|
|
11.43
|
|
|
11.07
|
|
|
11.4
|
|
|
Net interest
margin
|
|
3.57
|
|
|
3.58
|
|
|
3.53
|
|
|
3.59
|
|
|
3.52
|
|
|
Efficiency
ratio
|
|
59.54
|
|
|
63.05
|
|
|
64.06
|
|
|
61.81
|
|
|
65.11
|
|
|
Net charge-offs to
average loans outstanding
|
|
0.20
|
|
|
0.15
|
|
|
0.10
|
|
|
0.19
|
|
|
0.08
|
|
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets
to loans outstanding and real estate owned
|
|
1.12
|
|
|
1.02
|
|
|
1.00
|
|
|
|
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.24
|
|
|
1.16
|
|
|
1.06
|
|
|
|
|
|
|
Tangible common
equity to tangible assets
|
|
8.03
|
|
|
8.15
|
|
|
8.23
|
|
|
|
|
|
|
Tier-1 leverage
ratio
|
|
8.6
|
|
|
8.7
|
|
|
8.8
|
|
|
|
|
|
|
Total capital
ratio
|
|
13.3
|
|
|
13.2
|
|
|
13.4
|
|
|
|
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
|
9.0
|
|
|
$
|
9.0
|
|
|
$
|
7.5
|
|
|
|
|
|
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in HEI 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)
|
|
|
(in
thousands)
|
September 30,
2016
|
December 31,
2015
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
109,591
|
|
|
$
|
127,201
|
|
|
Interest-bearing
deposits
|
|
103,989
|
|
|
93,680
|
|
|
Available-for-sale
investment securities, at fair value
|
|
996,984
|
|
|
820,648
|
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
11,218
|
|
|
10,678
|
|
|
Loans receivable held
for investment
|
|
4,734,638
|
|
|
4,615,819
|
|
|
Allowance for loan
losses
|
|
(58,737)
|
|
|
(50,038)
|
|
|
Net loans
|
|
4,675,901
|
|
|
4,565,781
|
|
|
Loans held for sale,
at lower of cost or fair value
|
|
26,743
|
|
|
4,631
|
|
|
Other
|
|
330,054
|
|
|
309,946
|
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
|
Total
assets
|
|
$
|
6,336,670
|
|
|
$
|
6,014,755
|
|
|
Liabilities and
shareholder's equity
|
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
|
1,570,613
|
|
|
$
|
1,520,374
|
|
|
Deposit
liabilities–interest-bearing
|
|
3,810,108
|
|
|
3,504,880
|
|
|
Other
borrowings
|
|
265,388
|
|
|
328,582
|
|
|
Other
|
|
106,396
|
|
|
101,029
|
|
|
Total
liabilities
|
|
5,752,505
|
|
|
5,454,865
|
|
|
Common
stock
|
|
1
|
|
|
1
|
|
|
Additional paid in
capital
|
|
342,234
|
|
|
340,496
|
|
|
Retained
earnings
|
|
250,726
|
|
|
236,664
|
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
|
|
|
|
Net unrealized gains
(losses) on securities
|
$
|
5,965
|
|
|
$
|
(1,872)
|
|
|
|
Retirement benefit
plans
|
(14,761)
|
|
(8,796)
|
|
(15,399)
|
|
(17,271)
|
|
|
Total
shareholder's equity
|
|
584,165
|
|
|
559,890
|
|
|
Total liabilities
and shareholder's equity
|
|
$
|
6,336,670
|
|
|
$
|
6,014,755
|
|
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in HEI 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 HEI and the
utility. 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 HEI and the utility.
The reconciling adjustments from GAAP earnings to core earnings
is limited to the fees, reimbursements costs and associated taxes
related to the recently terminated merger between HEI and NextEra
Energy, Inc., and the cancelled spin-off of ASB Hawaii, Inc., and
the recently terminated liquefied natural gas (LNG) contract which
required the Hawaii Public Utilities Commission approval of the
merger with NextEra Energy, Inc. For more information on the
transactions, see HEI's Form 8-K filed on July 18, 2016 and HEI's Form 8-K filed on
July 19, 2016, respectively.
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 terminated 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 (HEI)
|
|
|
|
|
|
Unaudited
|
Three months
ended
September 30
|
|
Nine months
ended
September 30
|
|
($ in millions,
except per share amounts)
|
2016
|
2015
|
|
2016
|
2015
|
|
HEI CONSOLIDATED
(INCOME) EXPENSES RELATED TO THE TERMINATED MERGER WITH NEXTERA
ENERGY AND CANCELLED SPIN-OFF OF ASB HAWAII
|
|
|
|
|
|
|
Pre-tax (income)
expenses
|
$
|
(88.5)
|
|
$
|
1.8
|
|
|
$
|
(84.9)
|
|
$
|
15.7
|
|
|
Current income taxes
(benefits)
|
24.7
|
|
(0.1)
|
|
|
24.7
|
|
(2.1)
|
|
|
After-tax (income)
expenses
|
$
|
(63.8)
|
|
$
|
1.7
|
|
|
$
|
(60.3)
|
|
$
|
13.6
|
|
|
HEI CONSOLIDATED
LNG CONTRACT COSTS2
|
|
|
|
|
|
|
Pre-tax
expenses
|
$
|
—
|
|
$
|
—
|
|
|
$
|
3.4
|
|
$
|
—
|
|
|
Current income taxes
(benefits)
|
—
|
|
—
|
|
|
(1.3)
|
|
—
|
|
|
After-tax (income)
expenses
|
$
|
—
|
|
$
|
—
|
|
|
$
|
2.1
|
|
$
|
—
|
|
|
HEI CONSOLIDATED
NET INCOME
|
|
|
|
|
|
|
GAAP (as
reported)
|
$
|
127.1
|
|
$
|
50.7
|
|
|
$
|
203.6
|
|
$
|
117.6
|
|
|
Excluding special
items (after-tax):
|
|
|
|
|
|
|
(Income) expenses
related to the terminated merger with NextEra Energy and cancelled
spin-off of ASB Hawaii
|
(63.8)
|
|
1.7
|
|
|
(60.3)
|
|
13.6
|
|
|
Costs related to the
terminated LNG contract2
|
—
|
|
—
|
|
|
2.1
|
|
—
|
|
|
Non-GAAP (core)
net income
|
$
|
63.3
|
|
$
|
52.4
|
|
|
$
|
145.4
|
|
$
|
131.1
|
|
|
HEI CONSOLIDATED
DILUTED EARNINGS PER COMMON SHARE
|
|
|
|
|
|
GAAP (as
reported)
|
$
|
1.17
|
|
$
|
0.47
|
|
|
$
|
1.88
|
|
$
|
1.11
|
|
|
Excluding special
items (after-tax):
|
|
|
|
|
|
|
(Income) expenses
related to the terminated merger with NextEra Energy and cancelled
spin-off of ASB Hawaii
|
(0.59)
|
|
0.02
|
|
|
(0.56)
|
|
0.13
|
|
|
Costs related to the
terminated LNG contract2
|
—
|
|
—
|
|
|
0.02
|
|
—
|
|
|
Non-GAAP (core)
diluted earnings per common share
|
$
|
0.58
|
|
$
|
0.49
|
|
|
$
|
1.34
|
|
$
|
1.23
|
|
|
|
|
|
Twelve months
ended
September 30
|
|
|
|
|
2016
|
2015
|
|
HEI CONSOLIDATED
RETURN ON AVERAGE COMMON EQUITY (ROACE) (simple
average)
|
|
|
|
|
Based on
GAAP
|
|
|
|
12.3
|
%
|
8.1
|
%
|
|
Based on non-GAAP
(core)3
|
|
|
|
9.5
|
%
|
9.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
Columns may not foot due to
rounding
|
|
1
|
Accounting principles
generally accepted in the United States of America
|
|
2
|
The LNG contract was
terminated as it was conditioned on the merger with NextEra Energy
closing
|
|
3
|
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
|
Three months
ended
September 30
|
|
Nine months
ended
September 30
|
|
($ in
millions)
|
2016
|
2015
|
|
2016
|
2015
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED COSTS RELATED TO THE TERMINATED MERGER WITH NEXTERA
ENERGY
|
|
|
|
|
|
|
Pre-tax
expenses
|
$
|
—
|
|
$
|
—
|
|
|
$
|
0.1
|
|
$
|
0.4
|
|
|
Current income taxes
(benefits)
|
—
|
|
—
|
|
|
—
|
|
(0.2)
|
|
|
After-tax
expenses
|
$
|
—
|
|
$
|
—
|
|
|
$
|
0.1
|
|
$
|
0.3
|
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED LNG CONTRACT COSTS2
|
|
|
|
|
|
Pre-tax
expenses
|
$
|
—
|
|
$
|
—
|
|
|
$
|
3.4
|
|
$
|
—
|
|
|
Current income taxes
(benefits)
|
—
|
|
—
|
|
|
(1.3)
|
|
—
|
|
|
After-tax
expenses
|
$
|
—
|
|
$
|
—
|
|
|
$
|
2.1
|
|
$
|
—
|
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED NET INCOME
|
|
|
|
|
|
|
GAAP (as
reported)
|
$
|
47.0
|
|
$
|
43.0
|
|
|
$
|
108.2
|
|
$
|
102.7
|
|
|
Excluding special
items (after-tax):
|
|
|
|
|
|
|
Costs related to the
terminated merger with NextEra Energy
|
—
|
|
—
|
|
|
0.1
|
|
0.3
|
|
|
Costs related to the
terminated LNG contract2
|
—
|
|
—
|
|
|
2.1
|
|
—
|
|
|
Non-GAAP (core)
net income
|
$
|
47.0
|
|
$
|
43.0
|
|
|
$
|
110.3
|
|
$
|
103.0
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months
ended
September 30
|
|
|
|
|
2016
|
2015
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED RETURN ON AVERAGE COMMON EQUITY (ROACE) (simple
average)
|
|
|
|
|
|
|
Based on
GAAP
|
|
|
|
8.11
|
%
|
7.86
|
%
|
|
Based on non-GAAP
(core)3
|
|
|
|
8.24
|
%
|
7.88
|
%
|
|
|
|
|
|
|
|
Three months
ended
September 30
|
|
Nine months
ended
September 30
|
|
($ in
millions)
|
2016
|
2015
|
|
2016
|
2015
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED OTHER OPERATION AND MAINTENANCE (O&M)
EXPENSE
|
|
|
|
|
|
|
GAAP (as
reported)
|
$
|
94.8
|
|
$
|
103.7
|
|
|
$
|
298.3
|
|
$
|
306.5
|
|
|
Excluding
O&M-related net income neutral items4
|
1.4
|
|
1.9
|
|
|
4.6
|
|
5.4
|
|
|
Excluding costs
related to the terminated merger with NextEra Energy
|
—
|
|
—
|
|
|
0.1
|
|
0.4
|
|
|
Excluding costs
related to the terminated LNG contract2
|
—
|
|
—
|
|
|
3.4
|
|
—
|
|
|
Non-GAAP (Adjusted
other O&M expense)
|
$
|
93.4
|
|
$
|
101.8
|
|
|
$
|
290.2
|
|
$
|
300.7
|
|
|
|
|
|
|
|
|
Note:
Columns may not foot due to
rounding
|
|
1
|
Accounting principles
generally accepted in the United States of America
|
|
2
|
The LNG contract was
terminated as it was conditioned on the merger with NextEra Energy
closing
|
|
3
|
Calculated as core
net income divided by average GAAP common equity
|
|
4
|
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
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/hawaiian-electric-industries-reports-third-quarter-2016-earnings-300357869.html
SOURCE Hawaiian Electric Industries, Inc.