HONOLULU, May 5, 2017 /PRNewswire/ --
Diluted Earnings Per Share (EPS) of $0.31
Hawaiian Electric Industries, Inc. (HEI) (NYSE - HE) today
reported consolidated net income for common stock for the first
quarter of 2017 of $34.2 million and
diluted earnings per share (EPS) of $0.31 compared to $32.4 million and EPS of $0.30 for the first quarter of 2016. Core
earnings1 were $34.2
million and core EPS1 of $0.31 in the first quarter of 2017 compared to
$35.3 million and $0.33, respectively, in the first quarter of
2016.
"Our utilities continue to be leaders in the transformation to
clean energy and we're making significant upgrades to our grids to
make them more resilient, reliable and renewable-ready. At
American Savings Bank, we continue to deliver solid year over year
earnings growth and strong first quarter annualized deposit growth
of 9.1% while maintaining healthy capital levels," said
Constance H. Lau, HEI president and
chief executive officer.
HAWAIIAN ELECTRIC COMPANY EARNINGS
Hawaiian Electric Company's2 net income for the first
quarter of 2017 was $21.5 million
compared to $25.4 million in the
first quarter of 2016. Core earnings were $21.5 million and $26.7 million in the first quarters of 2017
and 2016, respectively. The $5.3 million core net income decrease from
the prior year quarter was primarily driven by the following
after-tax items:
_________________
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.
1 Non-GAAP measure that excludes income and costs
after-tax related to the terminated merger with NextEra Energy,
Inc., the cancelled spin-off of ASB Hawaii, Inc., and the
termination of the liquefied natural gas (LNG) contract which
required PUC approval of the merger with NextEra Energy, Inc. (the
"Transaction Adjustments"). See the "Explanation of HEI's Use
of Certain Unaudited Non-GAAP measures" and the related
reconciliation.
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.
- $5 million lower net
revenues3 mainly due to the expiration of the Hawaii
Public Utilities Commission-approved 2013 settlement agreement with
the Consumer Advocate that had allowed Hawaiian Electric to record
calendar year rate adjustment mechanism revenues from
January 1, 2014 - December 31,
20164; and
- $1 million higher depreciation
expense as a result of increasing investments for the integration
of more renewable energy and improved customer reliability.
These items were partially offset by $1
million (after-tax) lower operations and maintenance
expenses5 compared to the prior year quarter which
included power supply improvement plan consulting expenses of
$2 million (after-tax). The
first quarter of 2017 also included additional reserves for
environmental costs of $1 million
(after-tax).
AMERICAN SAVINGS BANK EARNINGS
American Savings Bank's (American) net income for the first
quarter of 2017 was $15.8 million compared to $16.2 million in the fourth (or linked) quarter
of 2016 and $12.7 million in the
first quarter of 2016.
Compared to the first quarter of 2016, the $3.1 million increase was primarily driven by
$3 million (after-tax) higher net interest income mainly due
to growth in the commercial real estate and consumer loan
portfolios as well as the deployment of strong deposit growth into
our investment portfolio.
_________________
3 Net revenues represent the after-tax
impact of "Revenues" less the following expenses which are largely
pass through items in revenues: "fuel oil," "purchased power" and
"taxes, other than income taxes" as shown on the Hawaiian Electric
Company, Inc. and Subsidiaries' Condensed Consolidated Statements
of Income.
4 With the expiration of the 2013 settlement
agreement with the Consumer Advocate that was approved by the PUC,
in 2017 the Oahu rate adjustment
mechanism (RAM) revenues revert to being recorded for accounting
purposes from a calendar year recognition period to a period
beginning on June 1 of each year
through May 31 of the subsequent
year. The periods in which the cash reflecting RAM revenues
is collected did not change as a result of the settlement agreement
and have always been aligned to the June 1
to May 31 periods. Therefore, the expiration of the 2013
settlement agreement will have no impact on Hawaiian Electric
Company cash collections.
5 Excludes net income neutral expenses
covered by surcharges or by third parties and merger-related costs
including the terminated LNG contract costs. See the
"Explanation of HEI's Use of Certain Unaudited Non-GAAP measures"
and the related reconciliation.
Compared to the linked fourth quarter of 2016, the $0.4 million decrease was primarily driven by the
following on an after-tax basis:
- $1 million higher net interest
income driven mainly by higher yields in our investment portfolio
and growth in our consumer portfolio; and
- $1 million lower noninterest
expense.
These increases were offset by the following on an after-tax
basis:
- $1 million higher provision for
loan losses including additional reserves for a commercial real
estate relationship in the first quarter of 2017; and
- $1 million lower noninterest
income primarily due to lower mortgage banking income as a result
of a reduction in residential mortgage refinancing activity.
Total loans were $4.7 billion at
March 31, 2017, and included growth
in the residential and consumer loan portfolio during the first
quarter of 2017. The reduction in our exposure to national
credits, a loan payoff connected with a completed construction
project, and the resolution and payoff of a prior nonperforming
commercial loan contributed to the 1.2% annualized decline in our
loan portfolio in the first quarter of 2017.
Total deposits were $5.7 billion
at March 31, 2017, an increase of
$126 million or 9.1% annualized
increase from December 31,
2016. Low-cost core deposits increased $140 million or 11.4% annualized increase from
December 31, 2016. The average
cost of funds was 0.20% for the first quarter of 2017 compared to
0.22% for the fourth quarter of 2016 and 0.23% for the first
quarter of 2016.
Overall, American achieved solid profitability in the first
quarter of 2017 with a return on average equity of 10.8% and a
return on average assets of 0.98%.
For additional information, refer to the American news release
issued on April 28, 2017.
HOLDING AND OTHER COMPANIES
The holding and other companies' net losses were $3.1 million in the first quarter of 2017
compared to the $5.7 million net loss
in the first quarter of 2016. Excluding the Transaction
Adjustments which totaled $1.5
million in the first quarter of 2016, holding and other
companies' net losses were $3.1 million and $4.2
million in the first quarters of 2017 and 2016,
respectively. The lower net loss was primarily driven by tax
benefits in the first quarter of 2017 related to the adoption of an
accounting standard update on share-based compensation.
WEBCAST AND CONFERENCE CALL TO DISCUSS EARNINGS AND EPS
GUIDANCE
HEI will conduct a webcast and conference call to review its
first quarter of 2017 earnings and 2017 EPS guidance on Friday, May
5, 2017, 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 (844)
834-0652 and international parties may listen to the conference by
calling (412) 317-5198 or by accessing the webcast on HEI's
website, www.hei.com under the heading "Investor Relations."
HEI and Hawaiian Electric Company intend to continue to use HEI's
website 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 19, 2017,
by dialing (877) 344-7529 or (412) 317-0088 and entering
passcode: 10104146.
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, F.S.B., 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 to 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 "Cautionary Note Regarding 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, 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
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
|
|
Three months ended
March 31
|
|
(in thousands, except per share amounts)
|
|
2017
|
|
2016
|
|
Revenues
|
|
|
|
|
|
Electric
utility
|
|
$
|
518,611
|
|
|
$
|
482,052
|
|
|
Bank
|
|
72,856
|
|
|
68,840
|
|
|
Other
|
|
95
|
|
|
68
|
|
|
Total
revenues
|
|
591,562
|
|
|
550,960
|
|
|
Expenses
|
|
|
|
|
|
Electric
utility
|
|
469,673
|
|
|
426,726
|
|
|
Bank
|
|
48,696
|
|
|
49,246
|
|
|
Other
|
|
5,331
|
|
|
6,137
|
|
|
Total
expenses
|
|
523,700
|
|
|
482,109
|
|
|
Operating income
(loss)
|
|
|
|
|
|
Electric
utility
|
|
48,938
|
|
|
55,326
|
|
|
Bank
|
|
24,160
|
|
|
19,594
|
|
|
Other
|
|
(5,236)
|
|
|
(6,069)
|
|
|
Total operating
income
|
|
67,862
|
|
|
68,851
|
|
|
Interest expense,
net—other than on deposit liabilities and other bank
borrowings
|
|
(19,568)
|
|
|
(20,126)
|
|
|
Allowance for
borrowed funds used during construction
|
|
889
|
|
|
662
|
|
|
Allowance for equity
funds used during construction
|
|
2,399
|
|
|
1,739
|
|
|
Income before
income taxes
|
|
51,582
|
|
|
51,126
|
|
|
Income
taxes
|
|
16,916
|
|
|
18,301
|
|
|
Net
income
|
|
34,666
|
|
|
32,825
|
|
|
Preferred stock
dividends of subsidiaries
|
|
473
|
|
|
473
|
|
|
Net income for
common stock
|
|
$
|
34,193
|
|
|
$
|
32,352
|
|
|
Basic earnings per
common share
|
|
$
|
0.31
|
|
|
$
|
0.30
|
|
|
Diluted earnings
per common share
|
|
$
|
0.31
|
|
|
$
|
0.30
|
|
|
Dividends per
common share
|
|
$
|
0.31
|
|
|
$
|
0.31
|
|
|
Weighted-average
number of common shares outstanding
|
|
108,674
|
|
|
107,620
|
|
|
Weighted-average
shares assuming dilution
|
|
108,858
|
|
|
107,781
|
|
|
Net income (loss)
for common stock by segment
|
|
|
|
|
|
Electric
utility
|
|
$
|
21,465
|
|
|
$
|
25,367
|
|
|
Bank
|
|
15,813
|
|
|
12,673
|
|
|
Other
|
|
(3,085)
|
|
|
(5,688)
|
|
|
Net income for
common stock
|
|
$
|
34,193
|
|
|
$
|
32,352
|
|
|
Comprehensive income
attributable to Hawaiian Electric Industries, Inc.
|
|
$
|
35,178
|
|
|
$
|
41,152
|
|
|
Return on average
common equity (twelve months ended)1
|
|
12.5
|
%
|
|
8.4
|
%
|
|
|
|
This information
should be read in conjunction with the condensed 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, 2017 and 2016 returns on
average common equity (twelve months ended March 31) were 9.4% and
9.1%, respectively. See reconciliation of GAAP to non-GAAP
measures.
|
|
Hawaiian Electric
Industries, Inc. (HEI) and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
(dollars in thousands)
|
|
March 31,
2017
|
|
December 31,
2016
|
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
234,230
|
|
|
$
|
278,452
|
|
|
Accounts receivable
and unbilled revenues, net
|
|
252,416
|
|
|
237,950
|
|
|
Available-for-sale
investment securities, at fair value
|
|
1,228,922
|
|
|
1,105,182
|
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
11,706
|
|
|
11,218
|
|
|
Loans receivable held
for investment, net
|
|
4,669,274
|
|
|
4,683,160
|
|
|
Loans held for sale,
at lower of cost or fair value
|
|
10,454
|
|
|
18,817
|
|
|
Property, plant and
equipment, net of accumulated depreciation of $2,475,562 and
$2,444,348 at March 31, 2017 and December 31, 2016,
respectively
|
|
4,641,514
|
|
|
4,603,465
|
|
|
Regulatory
assets
|
|
945,409
|
|
|
957,451
|
|
|
Other
|
|
467,160
|
|
|
447,621
|
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
|
Total
assets
|
|
$
|
12,543,275
|
|
|
$
|
12,425,506
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
|
160,819
|
|
|
$
|
143,279
|
|
|
Interest and
dividends payable
|
|
27,407
|
|
|
25,225
|
|
|
Deposit
liabilities
|
|
5,675,090
|
|
|
5,548,929
|
|
|
Short-term
borrowings—other than bank
|
|
2,300
|
|
|
—
|
|
|
Other bank
borrowings
|
|
200,154
|
|
|
192,618
|
|
|
Long-term debt,
net—other than bank
|
|
1,618,651
|
|
|
1,619,019
|
|
|
Deferred income
taxes
|
|
740,506
|
|
|
728,806
|
|
|
Regulatory
liabilities
|
|
419,940
|
|
|
410,693
|
|
|
Contributions in aid
of construction
|
|
541,574
|
|
|
543,525
|
|
|
Defined benefit
pension and other postretirement benefit plans liability
|
|
632,964
|
|
|
638,854
|
|
|
Other
|
|
423,989
|
|
|
473,512
|
|
|
Total
liabilities
|
|
10,443,394
|
|
|
10,324,460
|
|
|
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:
108,745,265 shares and 108,583,413 shares at March 31, 2017
and December 31, 2016, respectively
|
|
1,658,280
|
|
|
1,660,910
|
|
|
Retained
earnings
|
|
439,452
|
|
|
438,972
|
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
(32,144)
|
|
|
(33,129)
|
|
|
Total
shareholders' equity
|
|
2,065,588
|
|
|
2,066,753
|
|
|
Total liabilities
and shareholders' equity
|
|
$
|
12,543,275
|
|
|
$
|
12,425,506
|
|
|
|
This information
should be read in conjunction with the condensed consolidated
financial statements and the notes thereto in HEI filings with the
SEC.
|
|
Hawaiian Electric
Company, Inc. (Hawaiian Electric) and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
|
|
|
Three months ended
March 31
|
|
(dollars
in thousands, except per barrel amounts)
|
|
2017
|
|
2016
|
|
Revenues
|
|
$
|
518,611
|
|
|
$
|
482,052
|
|
|
Expenses
|
|
|
|
|
|
Fuel oil
|
|
144,270
|
|
|
113,740
|
|
|
Purchased
power
|
|
127,124
|
|
|
115,859
|
|
|
Other operation and
maintenance
|
|
100,240
|
|
|
103,908
|
|
|
Depreciation
|
|
48,216
|
|
|
46,781
|
|
|
Taxes, other than
income taxes
|
|
49,823
|
|
|
46,438
|
|
|
Total
expenses
|
|
469,673
|
|
|
426,726
|
|
|
Operating
income
|
|
48,938
|
|
|
55,326
|
|
|
Allowance for equity
funds used during construction
|
|
2,399
|
|
|
1,739
|
|
|
Interest expense and
other charges, net
|
|
(17,504)
|
|
|
(17,308)
|
|
|
Allowance for
borrowed funds used during construction
|
|
889
|
|
|
662
|
|
|
Income before income
taxes
|
|
34,722
|
|
|
40,419
|
|
|
Income
taxes
|
|
12,758
|
|
|
14,553
|
|
|
Net
income
|
|
21,964
|
|
|
25,866
|
|
|
Preferred stock
dividends of subsidiaries
|
|
229
|
|
|
229
|
|
|
Net income
attributable to Hawaiian Electric
|
|
21,735
|
|
|
25,637
|
|
|
Preferred stock
dividends of Hawaiian Electric
|
|
270
|
|
|
270
|
|
|
Net income for
common stock
|
|
$
|
21,465
|
|
|
$
|
25,367
|
|
|
Comprehensive
income attributable to Hawaiian Electric
|
|
$
|
21,924
|
|
|
$
|
26,383
|
|
|
OTHER ELECTRIC
UTILITY INFORMATION
|
|
|
|
|
|
Kilowatthour sales
(millions)
|
|
|
|
|
|
Hawaiian
Electric
|
|
1,525
|
|
|
1,557
|
|
|
Hawaii
Electric Light
|
|
253
|
|
|
258
|
|
|
Maui
Electric
|
|
260
|
|
|
270
|
|
|
|
2,038
|
|
|
2,085
|
|
|
Cooling degree days
(Oahu)
|
|
884
|
|
|
884
|
|
|
Average fuel oil cost
per barrel
|
|
$
|
65.85
|
|
|
$
|
53.99
|
|
|
|
|
|
|
|
Twelve months ended
March 31
|
|
2017
|
|
2016
|
|
Return on average
common equity (%) (simple average)
|
|
|
|
|
|
Hawaiian
Electric
|
|
7.88
|
|
|
7.85
|
|
|
Hawaii
Electric Light
|
|
7.47
|
|
|
7.26
|
|
|
Maui
Electric
|
|
8.07
|
|
|
8.53
|
|
|
Hawaiian
Electric Consolidated
|
|
7.84
|
|
|
7.85
|
|
|
|
This information
should be read in conjunction with the condensed 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
(dollars in
thousands, except par value)
|
|
March 31,
2017
|
|
December 31,
2016
|
|
Assets
|
|
|
|
|
|
Property, plant
and equipment
|
|
|
|
|
|
Utility property,
plant and equipment
|
|
|
|
|
|
Land
|
|
$
|
53,157
|
|
|
$
|
53,153
|
|
|
Plant and
equipment
|
|
6,651,094
|
|
|
6,605,732
|
|
|
Less
accumulated depreciation
|
|
(2,399,222)
|
|
|
(2,369,282)
|
|
|
Construction
in progress
|
|
230,072
|
|
|
211,742
|
|
|
Utility property,
plant and equipment, net
|
|
4,535,101
|
|
|
4,501,345
|
|
|
Nonutility property,
plant and equipment, less accumulated depreciation of $1,232
at March 31, 2017 and December 31, 2016
|
|
7,410
|
|
|
7,407
|
|
|
Total property,
plant and equipment, net
|
|
4,542,511
|
|
|
4,508,752
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
13,207
|
|
|
74,286
|
|
|
Customer accounts
receivable, net
|
|
117,990
|
|
|
123,688
|
|
|
Accrued unbilled
revenues, net
|
|
97,632
|
|
|
91,693
|
|
|
Other accounts
receivable, net
|
|
20,388
|
|
|
5,233
|
|
|
Fuel oil stock, at
average cost
|
|
73,874
|
|
|
66,430
|
|
|
Materials and
supplies, at average cost
|
|
57,045
|
|
|
53,679
|
|
|
Prepayments and
other
|
|
28,934
|
|
|
23,100
|
|
|
Regulatory
assets
|
|
81,952
|
|
|
66,032
|
|
|
Total current
assets
|
|
491,022
|
|
|
504,141
|
|
|
Other long-term
assets
|
|
|
|
|
|
Regulatory
assets
|
|
863,457
|
|
|
891,419
|
|
|
Unamortized debt
expense
|
|
183
|
|
|
208
|
|
|
Other
|
|
71,869
|
|
|
70,908
|
|
|
Total other
long-term assets
|
|
935,509
|
|
|
962,535
|
|
|
Total
assets
|
|
$
|
5,969,042
|
|
|
$
|
5,975,428
|
|
|
Capitalization and
liabilities
|
|
|
|
|
|
Capitalization
|
|
|
|
|
|
Common stock ($6 2/3
par value, authorized 50,000,000 shares; outstanding 16,019,785
shares at March 31, 2017 and December 31, 2016)
|
|
$
|
106,818
|
|
|
$
|
106,818
|
|
|
Premium on capital
stock
|
|
601,491
|
|
|
601,491
|
|
|
Retained
earnings
|
|
1,091,323
|
|
|
1,091,800
|
|
|
Accumulated other
comprehensive income (loss), net of income taxes
|
|
137
|
|
|
(322)
|
|
|
Common stock
equity
|
|
1,799,769
|
|
|
1,799,787
|
|
|
Cumulative preferred
stock — not subject to mandatory redemption
|
|
34,293
|
|
|
34,293
|
|
|
Long-term debt,
net
|
|
1,318,871
|
|
|
1,319,260
|
|
|
Total
capitalization
|
|
3,152,933
|
|
|
3,153,340
|
|
|
Current
liabilities
|
|
|
|
|
|
Short-term borrowings
from non-affiliates
|
|
1,500
|
|
|
—
|
|
|
Accounts
payable
|
|
129,863
|
|
|
117,814
|
|
|
Interest and
preferred dividends payable
|
|
26,174
|
|
|
22,838
|
|
|
Taxes
accrued
|
|
131,330
|
|
|
172,730
|
|
|
Regulatory
liabilities
|
|
2,691
|
|
|
3,762
|
|
|
Other
|
|
56,235
|
|
|
55,221
|
|
|
Total current
liabilities
|
|
347,793
|
|
|
372,365
|
|
|
Deferred credits
and other liabilities
|
|
|
|
|
|
Deferred income
taxes
|
|
746,017
|
|
|
733,659
|
|
|
Regulatory
liabilities
|
|
417,249
|
|
|
406,931
|
|
|
Unamortized tax
credits
|
|
91,012
|
|
|
88,961
|
|
|
Defined benefit
pension and other postretirement benefit plans liability
|
|
593,856
|
|
|
599,726
|
|
|
Other
|
|
78,608
|
|
|
76,921
|
|
|
Total deferred
credits and other liabilities
|
|
1,926,742
|
|
|
1,906,198
|
|
|
Contributions in aid
of construction
|
|
541,574
|
|
|
543,525
|
|
|
Total
capitalization and liabilities
|
|
$
|
5,969,042
|
|
|
$
|
5,975,428
|
|
|
|
This information
should be read in conjunction with the condensed 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,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
50,742
|
|
|
$
|
51,203
|
|
|
$
|
48,437
|
|
|
Interest and
dividends on investment securities
|
|
6,980
|
|
|
4,965
|
|
|
5,017
|
|
|
Total interest and
dividend income
|
|
57,722
|
|
|
56,168
|
|
|
53,454
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
2,103
|
|
|
2,013
|
|
|
1,592
|
|
|
Interest on other
borrowings
|
|
816
|
|
|
1,172
|
|
|
1,485
|
|
|
Total interest
expense
|
|
2,919
|
|
|
3,185
|
|
|
3,077
|
|
|
Net interest
income
|
|
54,803
|
|
|
52,983
|
|
|
50,377
|
|
|
Provision for loan
losses
|
|
3,907
|
|
|
1,497
|
|
|
4,766
|
|
|
Net interest
income after provision for loan losses
|
|
50,896
|
|
|
51,486
|
|
|
45,611
|
|
|
Noninterest
income
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,610
|
|
|
5,585
|
|
|
5,499
|
|
|
Fee income on deposit
liabilities
|
|
5,428
|
|
|
5,714
|
|
|
5,156
|
|
|
Fee income on other
financial products
|
|
1,866
|
|
|
2,144
|
|
|
2,205
|
|
|
Bank-owned life
insurance
|
|
983
|
|
|
1,017
|
|
|
998
|
|
|
Mortgage banking
income
|
|
789
|
|
|
1,529
|
|
|
1,195
|
|
|
Other income,
net
|
|
458
|
|
|
470
|
|
|
333
|
|
|
Total noninterest
income
|
|
15,134
|
|
|
16,459
|
|
|
15,386
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
23,237
|
|
|
22,920
|
|
|
22,434
|
|
|
Occupancy
|
|
4,154
|
|
|
4,077
|
|
|
4,138
|
|
|
Data
processing
|
|
3,280
|
|
|
3,431
|
|
|
3,172
|
|
|
Services
|
|
2,360
|
|
|
2,961
|
|
|
2,911
|
|
|
Equipment
|
|
1,748
|
|
|
1,745
|
|
|
1,663
|
|
|
Office supplies,
printing and postage
|
|
1,535
|
|
|
1,644
|
|
|
1,365
|
|
|
Marketing
|
|
517
|
|
|
982
|
|
|
861
|
|
|
FDIC
insurance
|
|
728
|
|
|
839
|
|
|
884
|
|
|
Other
expense
|
|
4,311
|
|
|
4,539
|
|
|
3,975
|
|
|
Total noninterest
expense
|
|
41,870
|
|
|
43,138
|
|
|
41,403
|
|
|
Income before
income taxes
|
|
24,160
|
|
|
24,807
|
|
|
19,594
|
|
|
Income
taxes
|
|
8,347
|
|
|
8,590
|
|
|
6,921
|
|
|
Net
income
|
|
$
|
15,813
|
|
|
$
|
16,217
|
|
|
$
|
12,673
|
|
|
Comprehensive
income
|
|
$
|
16,648
|
|
|
$
|
2,540
|
|
|
$
|
20,310
|
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
Return on average
assets
|
|
0.98
|
|
|
1.02
|
|
|
0.84
|
|
|
Return on average
equity
|
|
10.82
|
|
|
11.09
|
|
|
8.89
|
|
|
Return on average
tangible common equity
|
|
12.58
|
|
|
12.90
|
|
|
10.39
|
|
|
Net interest
margin
|
|
3.68
|
|
|
3.59
|
|
|
3.62
|
|
|
Efficiency
ratio
|
|
59.87
|
|
|
62.12
|
|
|
62.96
|
|
|
Net charge-offs to
average loans outstanding
|
|
0.29
|
|
|
0.40
|
|
|
0.21
|
|
|
As of period
end
|
|
|
|
|
|
|
|
Nonaccrual loans to
loans receivable held for investment
|
|
0.41
|
|
|
0.49
|
|
|
1.01
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.19
|
|
|
1.17
|
|
|
1.13
|
|
|
Tangible common
equity to tangible assets
|
|
7.78
|
|
|
7.82
|
|
|
8.08
|
|
|
Tier-1 leverage
ratio
|
|
8.5
|
|
|
8.6
|
|
|
8.7
|
|
|
Total capital
ratio
|
|
13.6
|
|
|
13.4
|
|
|
13.2
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
|
9.4
|
|
|
$
|
9.0
|
|
|
$
|
9.0
|
|
|
|
This information
should be read in conjunction with the condensed 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)
|
March 31,
2017
|
December 31,
2016
|
|
Assets
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
125,901
|
|
|
$
|
137,083
|
|
|
Interest-bearing
deposits
|
|
94,573
|
|
|
52,128
|
|
|
Restricted
cash
|
|
—
|
|
|
1,764
|
|
|
Available-for-sale
investment securities, at fair value
|
|
1,228,922
|
|
|
1,105,182
|
|
|
Stock in Federal Home
Loan Bank, at cost
|
|
11,706
|
|
|
11,218
|
|
|
Loans receivable held
for investment
|
|
4,725,271
|
|
|
4,738,693
|
|
|
Allowance for loan
losses
|
|
(55,997)
|
|
|
(55,533)
|
|
|
Net loans
|
|
4,669,274
|
|
|
4,683,160
|
|
|
Loans held for sale,
at lower of cost or fair value
|
|
10,454
|
|
|
18,817
|
|
|
Other
|
|
336,626
|
|
|
329,815
|
|
|
Goodwill
|
|
82,190
|
|
|
82,190
|
|
|
Total
assets
|
|
$
|
6,559,646
|
|
|
$
|
6,421,357
|
|
|
Liabilities and
shareholder's equity
|
|
|
|
|
|
Deposit
liabilities–noninterest-bearing
|
|
$
|
1,696,390
|
|
|
$
|
1,639,051
|
|
|
Deposit
liabilities–interest-bearing
|
|
3,978,700
|
|
|
3,909,878
|
|
|
Other
borrowings
|
|
200,154
|
|
|
192,618
|
|
|
Other
|
|
98,223
|
|
|
101,635
|
|
|
Total
liabilities
|
|
5,973,467
|
|
|
5,843,182
|
|
|
Common
stock
|
|
1
|
|
|
1
|
|
|
Additional paid in
capital
|
|
343,435
|
|
|
342,704
|
|
|
Retained
earnings
|
|
264,381
|
|
|
257,943
|
|
|
Accumulated other
comprehensive loss, net of tax benefits
|
|
|
|
|
|
Net unrealized losses on
securities
|
$
|
(7,708)
|
|
|
$
|
(7,931)
|
|
|
|
Retirement benefit
plans
|
(13,930)
|
|
(21,638)
|
|
(14,542)
|
|
(22,473)
|
|
|
Total
shareholder's equity
|
|
586,179
|
|
|
578,175
|
|
|
Total liabilities
and shareholder's equity
|
|
$
|
6,559,646
|
|
|
$
|
6,421,357
|
|
|
|
This information
should be read in conjunction with the condensed 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 given the non-recurring nature of these
items. 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
are limited to income, costs and associated taxes related to the
terminated merger between HEI and NextEra Energy, Inc., the
cancelled spin-off of ASB Hawaii, Inc., and the termination of the
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. 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
March 31
|
|
($ in millions,
except per share amounts)
|
|
2017
|
2016
|
|
HEI CONSOLIDATED
COSTS RELATED TO THE TERMINATED MERGER WITH NEXTERA ENERGY AND
CANCELLED SPIN-OFF OF ASB HAWAII
|
|
|
|
|
Pre-tax
expenses
|
|
$
|
—
|
|
$
|
1.6
|
|
|
Current income tax
benefits
|
|
—
|
|
—
|
|
|
After-tax
expenses
|
|
$
|
—
|
|
$
|
1.6
|
|
|
HEI CONSOLIDATED
LNG CONTRACT COSTS2
|
|
|
|
|
Pre-tax
expenses
|
|
$
|
—
|
|
$
|
2.2
|
|
|
Current income tax
benefits
|
|
—
|
|
(0.9)
|
|
|
After-tax
expenses
|
|
$
|
—
|
|
$
|
1.3
|
|
|
HEI CONSOLIDATED
NET INCOME
|
|
|
|
|
GAAP (as
reported)
|
|
$
|
34.2
|
|
$
|
32.4
|
|
|
Excluding special
items (after-tax):
|
|
|
|
|
Costs related to the
terminated merger with NextEra Energy and cancelled spin-off of ASB
Hawaii
|
|
—
|
|
1.6
|
|
|
Costs related to the
terminated LNG contract2
|
|
—
|
|
1.3
|
|
|
Non-GAAP (core)
net income
|
|
$
|
34.2
|
|
$
|
35.3
|
|
|
HEI CONSOLIDATED
DILUTED EARNINGS PER COMMON SHARE
|
|
|
|
GAAP (as
reported)
|
|
$
|
0.31
|
|
$
|
0.30
|
|
|
Excluding special
items (after-tax):
|
|
|
|
|
Costs related to the
terminated merger with NextEra Energy and cancelled spin-off of ASB
Hawaii
|
|
—
|
|
0.01
|
|
|
Costs related to the
terminated LNG contract2
|
|
—
|
|
0.01
|
|
|
Non-GAAP (core)
diluted earnings per common share
|
|
$
|
0.31
|
|
$
|
0.33
|
|
|
|
Twelve months ended
March 31
|
|
|
2017
|
2016
|
|
HEI CONSOLIDATED
RETURN ON AVERAGE COMMON EQUITY (ROACE) (simple
average)
|
|
|
|
|
Based on
GAAP
|
|
12.5
|
%
|
8.4
|
%
|
|
Based on non-GAAP
(core)3
|
|
9.4
|
%
|
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
March 31
|
|
($ in
millions)
|
|
2017
|
2016
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED COSTS RELATED TO THE TERMINATED MERGER WITH NEXTERA
ENERGY
|
|
|
|
|
Pre-tax
expenses
|
|
$
|
—
|
|
$
|
0.1
|
|
|
Current income tax
benefits
|
|
—
|
|
—
|
|
|
After-tax
expenses
|
|
$
|
—
|
|
$
|
—
|
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED LNG CONTRACT COSTS2
|
|
|
|
|
Pre-tax
expenses
|
|
$
|
—
|
|
$
|
2.2
|
|
|
Current income tax
benefits
|
|
—
|
|
(0.9)
|
|
|
After-tax
expenses
|
|
$
|
—
|
|
$
|
1.3
|
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED NET INCOME
|
|
|
|
|
GAAP (as
reported)
|
|
$
|
21.5
|
|
$
|
25.4
|
|
|
Excluding special
items (after-tax):
|
|
|
|
|
Costs related to the
terminated merger with NextEra Energy
|
|
—
|
|
—
|
|
|
Costs related to the
terminated LNG contract2
|
|
—
|
|
1.3
|
|
|
Non-GAAP (core)
net income
|
|
$
|
21.5
|
|
$
|
26.7
|
|
|
|
|
|
|
|
Twelve months ended
March 31
|
|
|
2017
|
2016
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED RETURN ON AVERAGE COMMON EQUITY (ROACE) (simple
average)
|
|
|
|
|
Based on
GAAP
|
|
7.84
|
%
|
7.85
|
%
|
|
Based on non-GAAP
(core)3
|
|
7.88
|
%
|
7.95
|
%
|
|
|
|
|
|
|
Three months ended
March 31
|
|
($ in
millions)
|
|
2017
|
2016
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED OTHER OPERATION AND MAINTENANCE (O&M)
EXPENSE
|
|
|
|
|
GAAP (as
reported)
|
|
$
|
100.2
|
|
$
|
103.9
|
|
|
Excluding
O&M-related net income neutral items4
|
|
1.1
|
|
1.6
|
|
|
Excluding costs
related to the terminated merger with NextEra Energy
|
|
—
|
|
0.1
|
|
|
Excluding costs
related to the terminated LNG contract2
|
|
—
|
|
2.2
|
|
|
Non-GAAP (Adjusted
other O&M expense)
|
|
$
|
99.1
|
|
$
|
100.0
|
|
|
|
|
|
|
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
|
|
Treasurer &
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/hei-reports-first-quarter-2017-earnings-300452132.html
SOURCE Hawaiian Electric Industries, Inc.