HONOLULU, Feb. 14, 2018 /PRNewswire/ --
Selected 2017 Highlights:
- Consolidated Reported net income of $165.3 million in 2017 vs $248.3 million in 2016, down 33% primarily due to
the merger and spin-off related items in 2016 and the impact of the
federal tax reform and related items in 2017
Core net income of $179.5
million in 2017 vs $190.1
million in 2016, down 6%
- Consolidated Reported EPS of $1.52 in 2017 vs $2.29 in 2016, down 34%;
Consolidated Core EPS of $1.65
in 2017 vs $1.75 in 2016, down
6%
- Consolidated Reported ROE of 7.9%; Consolidated
Core ROE of 8.6%
-
- Utility Reported ROE of 6.6%; Utility Core ROE of 7.1%
- Bank Reported ROE of 11.3%
- Record 27% of electricity on Hawaiian Electric's grid was from
renewable sources2
-
- Led the nation in customer-sited solar: Largest annual
increase of installed solar since 2013 with more than 100 megawatts
of solar installed, up 19% from 2016
- 30% of single-family homes have installed or have been approved
to install PV systems on Oahu,
Maui and Hawaii Island
- Avoided-oil equivalent of 2.2 million barrels in 2017, saving
our state more than $150 million3 in fuel cost
____________________________
|
|
Note: All
Return on Equity (ROE) results calculated using net income divided
by average GAAP common equity, simple average method.
|
1
|
Non-GAAP measure that
excludes the tax reform act and related items in 2017 and merger
and spin-off-related income and costs, after-tax, including costs
related to the terminated LNG contract, which required PUC approval
of the merger with NextEra Energy, Inc. in 2016. See the
"Explanation of HEI's Use of Certain Unaudited Non-GAAP measures"
and the related reconciliation.
|
2
|
Based upon Renewable
Portfolio Standard information as of 12/31/17.
|
3
|
Estimate based on the
2017 average price per barrel of $68.78 and as compared to 2008 oil
usage levels.
|
- Progress on key regulatory initiatives:
-
- Utility power supply improvement plan accepted by the public
utilities commission (PUC); grid modernization plan accepted by the
PUC in early 2018; community based renewable energy plan
approved
- Received interim decisions on the Hawaiian Electric 2017 and
Hawaii Electric Light 2016 rate cases; Maui Electric 2018 rate case
filed
- Bank provided approximately $1.4
billion of credit to consumers and businesses and originated
over 3,500 mortgages
- Bank broke ground on new Oahu
bank-campus that will bring together approximately 600 teammates at
one of the most innovative, collaborative and modern worksites in
the state
- Bank named one of Hawaii Business Magazine's "Best Places to
Work" for the 8th consecutive year
- Consolidated company contributed more than 23,000 volunteer
hours and more than $2.4 million of
charitable contributions to community organizations
- Continuation of uninterrupted dividends since 1901
Hawaiian Electric Industries, Inc. (NYSE: HE) (HEI) today
reported 2017 year-end consolidated net income for common stock of
$165.3 million and diluted earnings
per share (EPS) of $1.52 compared to
$248.3 million and EPS of
$2.29 for 2016. For the fourth
quarter of 2017, consolidated net income for common stock was
$32.4 million and EPS of $0.30 compared to $44.6 million and EPS of $0.41 for the fourth quarter of 2016. The
financial results for 2017 include $14.2
million for the reduction of the unregulated net deferred
tax asset balances for the consolidated enterprise to reflect the
lower rates enacted by federal tax reform and other tax reform
related items, including the $1,000
cash bonuses paid to American Savings Bank employees, excluding the
senior management team. The financial results for 2016
include the increase to net income of $58.2
million due to the terminated merger with NextEra Energy,
Inc., net of the impacts of the related terminated liquefied
natural gas (LNG) contract and the associated cancelled spin-off of
ASB Hawaii, Inc. Excluding the above mentioned items, core
earnings for 2017 were $179.5 million
and core EPS of $1.65 compared to
$190.1 million and $1.75, respectively, for 2016.
The financial results for the fourth quarter of 2017 include the
impacts of federal tax reform and related items previously
referenced. Excluding these items, core earnings1
for the fourth quarter of 2017 were $46.5 million and core EPS of $0.43 compared to $44.6
million and EPS of $0.41 for
the fourth quarter of 2016.
"Hawaii's economy had a very
strong year in 2017 and the HEI companies were proud to provide
essential energy and financial services to our communities and to
deliver a consolidated core return on equity of 8.6%," said
Constance H. Lau, president and CEO
of HEI.
"To help meet our electric company's mission to provide clean,
reliable and resilient electric energy safely to our customers and
to stay ahead of the needs of Hawaii's economic and real property
development, we invested over $400
million (more than three times the utility's earnings) to
modernize and strengthen the electric systems and grid on
Oahu, Maui, Hawaii Island, Molokai and Lanai. Hawaiian Electric and
its subsidiaries have supported Hawaii's economic development while helping
our state toward its goal of 100% renewable energy by 2045.
Hawaiian Electric continues to lead the nation in the efficient
integration of renewable resources, which have nearly doubled on
our islands in five years."
"American Savings Bank closed 2017 with a strong fourth quarter,
and we are excited about the construction of its new campus in
Honolulu. The bank is well
positioned to continue to grow in 2018, as it works continually to
deliver value to its customers and shareholders," said Lau.
HAWAIIAN ELECTRIC COMPANY
Full Year Results:
Hawaiian Electric Company's4 full-year 2017 net
income was $120.0 million compared to
$142.3 million in 2016.
Excluding the impact of federal tax reform in 2017 of $9.2 million in tax expense due primarily to the
reduction of the unregulated net deferred tax asset balances, and
2016 after-tax costs related to the terminated merger with NextEra
Energy, Inc. and the related terminated LNG contract totaling
$2.1 million, Hawaiian Electric
Company's core net income was $129.1
million in 2017 and $144.5 million in 2016. The
$15.4 million core net income
decrease from the prior year 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.
|
|
4
|
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
revenues5 primarily due to the expiration of the Hawaii
Public Utilities Commission-approved 2013 settlement agreement with
the Consumer Advocate that had allowed Hawaiian Electric Company,
Inc. to record annual rate adjustment mechanism revenues commencing
January 16 instead of
June 1, partially offset by the
recovery of costs for clean energy, reliability and system
efficiency investments and Hawaii Electric Light's 2016 test year
interim rate relief effective August 31,
2017; and
- $11 million higher O&M
expenses7 compared to 2016, primarily due to higher
overhaul and maintenance expenses, enterprise resource planning
(ERP) costs, partial write-off of deferred geothermal RFP costs,
grid modernization consultant costs and additional reserves for
environmental costs, partially offset by higher power supply
improvement consultant costs in 2016; and
- $3 million higher depreciation
expense as a result of increasing investments for the integration
of more renewable energy, improved customer reliability and greater
system efficiency; partially offset by
- $5 million higher allowance for
funds used during construction.
Fourth Quarter Results:
Fourth quarter 2017 net income of $25.4
million was $8.8 million lower
than the fourth quarter of 2016 primarily driven by the
$9.2 million higher tax expense due
to federal tax reform. $2
million (after-tax) higher net revenues in 2017 primarily
attributable to the recovery of costs for clean energy, reliability
and system efficiency investments and Hawaii Electric Light's 2016
test year interim rate relief were offset by higher other
operations and maintenance expense primarily due to higher
overhauls,
___________________________
|
|
|
5
|
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'
Consolidated Statements of Income.
|
|
|
6
|
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 are 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 had no impact on
Hawaiian Electric Company cash collections.
|
|
|
7
|
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.
|
ERP and grid modernization costs in the fourth quarter of
2017. Higher depreciation expense in the fourth quarter
of 2017 as a result of increasing investments for the integration
of more renewable energy, improved customer reliability and greater
system efficiency was offset by higher allowance for funds used
during construction.
AMERICAN SAVINGS BANK
Full Year Results:
American Savings Bank's (American) full-year 2017 net income was
$67.0 million compared to
$57.3 million in 2016. The
$9.7 million increase from the prior
year was primarily driven by the following after-tax items:
- $11 million higher net interest
income driven primarily by strong deposit growth that funded
earning asset growth in the investment and retail loan
portfolios;
- $4 million lower provision for
loan losses reflects the strategic decision to improve American's
credit risk profile through the reduction in the syndicated
national credit portfolio and resolution of specific problem loans,
partially offset by reserves required for growth in the retail loan
portfolio; and
- $1 million net positive impact of
federal tax reform, including $1,000
cash bonuses to employees.
These items were partially offset by the following on an
after-tax basis:
- $3 million higher noninterest
expense primarily due to higher performance-based incentive costs,
excluding $1,000 cash bonuses related
to federal tax reform; and
- $3 million lower noninterest
income primarily due to lower mortgage banking income.
Total loans were $4.7 billion at
December 31, 2017, a decrease of
$72 million or 1.5% decline from
December 31, 2016. This
decrease reflects our work to improve American's credit risk
profile through the strategic reduction in our exposure to national
syndicated credits by $75 million as
well as the resolution of specific problem loans.
Total deposits were $5.9 billion
at December 31, 2017, an increase of
$342 million or 6.2% from
December 31, 2016. The average
cost of funds was 0.21% for the full year 2017, down 2 basis points
from the prior year.
Overall, American's return on average equity8 for the
full year remained solid at 11.20% in 2017 compared to 9.90% in
2016, and the return on average assets for the full year was 1.02%
in 2017 compared to 0.92% in 2016.
Fourth Quarter Results:
Fourth quarter of 2017 net income of $16.9 million was $0.7
million lower than the third, or linked quarter and
$0.6 million higher than the
fourth quarter of 2016.
Compared to the linked quarter of 2017, the $0.7 million net income decrease in the fourth
quarter of 2017 was primarily driven by $2
million (after-tax) higher provision for loan losses
principally related to the release of reserves in the linked
quarter attributed to our strategic reduction of our syndicated
national credit loan portfolio and the resolution of specific
problem loans; partially offset by the $1
million (after-tax) favorable net impact of federal tax
reform and related changes discussed above.
Compared to the fourth quarter of 2016, the $0.6 million higher net income in the fourth
quarter of 2017 was primarily driven by $2
million (after-tax) higher net interest income mainly due to
higher yields and growth in earning assets and the $1 million impact of the federal tax reform
related changes discussed above. These items were partially
offset by $1 million (after-tax)
higher provision for loan losses, $1
million (after-tax) lower noninterest income primarily due
to lower mortgage banking income and $1
million (after-tax) higher noninterest expense.
American's fourth quarter of 2017 return on average
equity8 was 11.09%, compared to 11.64% in the linked
quarter and 11.09% in the fourth quarter of 2016. Return on
average assets was 1.01% for the fourth quarter of 2017, compared
to 1.07% in the linked quarter and 1.02% in the same quarter last
year.
_____________________________
|
|
|
8
|
Bank return on
average equity calculated using weighted average daily common
equity.
|
Please refer to American's news release issued on January 30, 2018 for additional information on
American.
HOLDING AND OTHER COMPANIES
The holding and other companies' net loss was $21.7 million in 2017 compared to net income
of $48.7 million in 2016.
Excluding tax reform related tax expense of $6.0 million in 2017 and merger-related net
income of $60.3 million in 2016, the
holding and other companies' adjusted net loss was $15.7 million and $11.7 million in 2017 and 2016, respectively. The
holding company's adjusted 2016 results included favorable tax
adjustments as HEI moved out of a federal net operating loss
position, enabling the recognition of tax benefits of approximately
$4 million.
Fourth quarter net losses were $9.8
million in 2017 compared to $5.7 million in the fourth quarter of
2016. Excluding tax reform related tax expense of
$6.0 million in 2017, the holding and
other companies' net losses in 2017 and 2016 were $3.9 million and $5.7
million, respectively. The higher 2016 net loss was
primarily driven by an adjustment to tax benefits of approximately
$2 million in the fourth quarter of
2016.
BOARD DECLARES QUARTERLY DIVIDEND
On February 1, 2018, the board of
directors maintained HEI's quarterly cash dividend of $0.31 cents per share, payable on March 13, 2018, to shareholders of record at the
close of business on February 22,
2018 (ex-dividend date is February
21, 2018). The dividend is equivalent to an annual
rate of $1.24 per share.
Dividends have been paid uninterrupted since 1901. At the
indicated annual dividend rate and the closing price per share on
February 13, 2018 of $32.76, HEI's dividend yield is 3.8%.
WEBCAST AND CONFERENCE CALL
HEI TO ANNOUNCE 2018 EPS GUIDANCE IN EARNINGS CONFERENCE
CALL
Hawaiian Electric Industries, Inc. will conduct a webcast and
conference call to review its 2017 earnings on Wednesday, February
14, 2018, at 11:00 a.m.
Hawaii time (4:00 p.m. Eastern time). HEI will announce 2018
EPS guidance during the scheduled webcast and conference call.
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
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, 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
www.hei.com beginning about two hours after the event. Replays
of the conference call will also be available approximately two
hours after the event through February 28,
2018, by dialing (877) 344-7529 or (412) 317-0088 and
entering passcode: 10116187.
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 to 15 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 Quarterly Report on Form
10-Q for the quarter ended September 30, 2017 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 DATA
(Unaudited)
|
|
|
Three months ended
December 31
|
|
Years ended
December 31
|
(in thousands, except per share amounts)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
$
|
583,311
|
|
|
$
|
544,668
|
|
|
$
|
2,257,566
|
|
|
$
|
2,094,368
|
|
Bank
|
|
75,166
|
|
|
72,627
|
|
|
297,640
|
|
|
285,924
|
|
Other
|
|
120
|
|
|
100
|
|
|
419
|
|
|
362
|
|
Total
revenues
|
|
658,597
|
|
|
617,395
|
|
|
2,555,625
|
|
|
2,380,654
|
|
Expenses
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
516,851
|
|
|
476,024
|
|
|
2,000,045
|
|
|
1,809,900
|
|
Bank
|
|
52,170
|
|
|
47,820
|
|
|
198,924
|
|
|
198,572
|
|
Other
|
|
4,588
|
|
|
5,124
|
|
|
18,365
|
|
|
24,007
|
|
Total
expenses
|
|
573,609
|
|
|
528,968
|
|
|
2,217,334
|
|
|
2,032,479
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
66,460
|
|
|
68,644
|
|
|
257,521
|
|
|
284,468
|
|
Bank
|
|
22,996
|
|
|
24,807
|
|
|
98,716
|
|
|
87,352
|
|
Other
|
|
(4,468)
|
|
|
(5,024)
|
|
|
(17,946)
|
|
|
(23,645)
|
|
Total operating
income
|
|
84,988
|
|
|
88,427
|
|
|
338,291
|
|
|
348,175
|
|
Merger termination
fee
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90,000
|
|
Interest expense,
net—other than on deposit liabilities and other bank
borrowings
|
|
(19,737)
|
|
|
(19,011)
|
|
|
(78,972)
|
|
|
(75,803)
|
|
Allowance for
borrowed funds used during construction
|
|
1,407
|
|
|
868
|
|
|
4,778
|
|
|
3,144
|
|
Allowance for equity
funds used during construction
|
|
3,575
|
|
|
2,315
|
|
|
12,483
|
|
|
8,325
|
|
Income before
income taxes
|
|
70,233
|
|
|
72,599
|
|
|
276,580
|
|
|
373,841
|
|
Income
taxes
|
|
37,390
|
|
|
27,492
|
|
|
109,393
|
|
|
123,695
|
|
Net
income
|
|
32,843
|
|
|
45,107
|
|
|
167,187
|
|
|
250,146
|
|
Preferred stock
dividends of subsidiaries
|
|
473
|
|
|
473
|
|
|
1,890
|
|
|
1,890
|
|
Net income for
common stock
|
|
$
|
32,370
|
|
|
$
|
44,634
|
|
|
$
|
165,297
|
|
|
$
|
248,256
|
|
Basic earnings per
common share
|
|
$
|
0.30
|
|
|
$
|
0.41
|
|
|
$
|
1.52
|
|
|
$
|
2.30
|
|
Diluted earnings
per common share
|
|
$
|
0.30
|
|
|
$
|
0.41
|
|
|
$
|
1.52
|
|
|
$
|
2.29
|
|
Dividends declared
per common share
|
|
$
|
0.31
|
|
|
$
|
0.31
|
|
|
$
|
1.24
|
|
|
$
|
1.24
|
|
Weighted-average
number of common shares outstanding
|
|
108,786
|
|
|
108,553
|
|
|
108,749
|
|
|
108,102
|
|
Weighted-average
shares assuming dilution
|
|
108,912
|
|
|
108,769
|
|
|
108,933
|
|
|
108,309
|
|
Net income (loss)
for common stock by segment
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
$
|
25,355
|
|
|
$
|
34,119
|
|
|
$
|
119,951
|
|
|
$
|
142,317
|
|
Bank
|
|
16,859
|
|
|
16,217
|
|
|
66,997
|
|
|
57,279
|
|
Other
|
|
(9,844)
|
|
|
(5,702)
|
|
|
(21,651)
|
|
|
48,660
|
|
Net income for
common stock
|
|
$
|
32,370
|
|
|
$
|
44,634
|
|
|
$
|
165,297
|
|
|
$
|
248,256
|
|
Comprehensive income
attributable to Hawaiian Electric Industries, Inc.
|
|
$
|
27,089
|
|
|
$
|
118,471
|
|
|
$
|
163,925
|
|
|
$
|
241,389
|
|
Return on average
common equity (twelve months ended)1
|
|
|
|
7.9
|
%
|
|
12.4
|
%
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in HEI filings with the
SEC.
|
1 On
a core basis, 2017 and 2016 returns on average common equity were
8.6% and 9.5%, respectively. See reconciliation of GAAP to
non-GAAP measures.
|
Hawaiian Electric
Company, Inc. (Hawaiian Electric) and Subsidiaries
|
CONSOLIDATED
STATEMENTS OF INCOME DATA
|
(Unaudited)
|
|
|
Three months ended
December 31
|
|
Years ended
December 31
|
(dollars
in thousands, except per barrel amounts)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues
|
|
$
|
583,311
|
|
|
$
|
544,668
|
|
|
$
|
2,257,566
|
|
|
$
|
2,094,368
|
|
Expenses
|
|
|
|
|
|
|
|
|
Fuel oil
|
|
155,981
|
|
|
120,441
|
|
|
587,768
|
|
|
454,704
|
|
Purchased
power
|
|
146,096
|
|
|
150,073
|
|
|
586,634
|
|
|
562,740
|
|
Other operation and
maintenance
|
|
111,194
|
|
|
107,273
|
|
|
417,910
|
|
|
405,533
|
|
Depreciation
|
|
48,206
|
|
|
46,761
|
|
|
192,784
|
|
|
187,061
|
|
Taxes, other than
income taxes
|
|
55,374
|
|
|
51,476
|
|
|
214,949
|
|
|
199,862
|
|
Total
expenses
|
|
516,851
|
|
|
476,024
|
|
|
2,000,045
|
|
|
1,809,900
|
|
Operating
income
|
|
66,460
|
|
|
68,644
|
|
|
257,521
|
|
|
284,468
|
|
Allowance for equity
funds used during construction
|
|
3,575
|
|
|
2,315
|
|
|
12,483
|
|
|
8,325
|
|
Interest expense and
other charges, net
|
|
(17,012)
|
|
|
(17,090)
|
|
|
(69,637)
|
|
|
(66,824)
|
|
Allowance for
borrowed funds used during construction
|
|
1,407
|
|
|
868
|
|
|
4,778
|
|
|
3,144
|
|
Income before
income taxes
|
|
54,430
|
|
|
54,737
|
|
|
205,145
|
|
|
229,113
|
|
Income
taxes
|
|
28,576
|
|
|
20,119
|
|
|
83,199
|
|
|
84,801
|
|
Net
income
|
|
25,854
|
|
|
34,618
|
|
|
121,946
|
|
|
144,312
|
|
Preferred stock
dividends of subsidiaries
|
|
229
|
|
|
229
|
|
|
915
|
|
|
915
|
|
Net income
attributable to Hawaiian Electric
|
|
25,625
|
|
|
34,389
|
|
|
121,031
|
|
|
143,397
|
|
Preferred stock
dividends of Hawaiian Electric
|
|
270
|
|
|
270
|
|
|
1,080
|
|
|
1,080
|
|
Net income for
common stock
|
|
$
|
25,355
|
|
|
$
|
34,119
|
|
|
$
|
119,951
|
|
|
$
|
142,317
|
|
Comprehensive
income attributable to Hawaiian Electric
|
|
$
|
24,146
|
|
|
$
|
32,460
|
|
|
$
|
119,263
|
|
|
$
|
141,070
|
|
OTHER ELECTRIC
UTILITY INFORMATION
|
|
|
|
|
|
|
|
|
Kilowatthour sales
(millions)
|
|
|
|
|
|
|
|
|
Hawaiian
Electric
|
|
1,624
|
|
|
1,678
|
|
|
6,548
|
|
|
6,660
|
|
Hawaii
Electric Light
|
|
266
|
|
|
272
|
|
|
1,047
|
|
|
1,067
|
|
Maui
Electric
|
|
273
|
|
|
282
|
|
|
1,095
|
|
|
1,118
|
|
|
|
2,163
|
|
|
2,232
|
|
|
8,690
|
|
|
8,845
|
|
Average fuel oil cost
per barrel
|
|
$
|
72.84
|
|
|
$
|
57.90
|
|
|
$
|
68.78
|
|
|
$
|
53.49
|
|
Return on average
common equity (twelve months ended)1
|
|
6.58
|
%
|
|
8.07
|
%
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in Hawaiian Electric filings with
the SEC.
|
1
Simple average. On a core basis, 2017 and 2016 returns on average
common equity were 7.1% and 8.2%, respectively. See
reconciliation of GAAP to non-GAAP measures.
|
American Savings
Bank, F.S.B.
|
STATEMENTS OF INCOME
DATA
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
Years ended December
31
|
(in thousands)
|
|
December 31,
2017
|
|
September 30,
2017
|
|
December 31,
2016
|
|
2017
|
|
2016
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
51,986
|
|
|
$
|
52,210
|
|
|
$
|
51,203
|
|
|
$
|
207,255
|
|
|
$
|
199,774
|
|
Interest and
dividends on investment securities
|
|
8,230
|
|
|
6,850
|
|
|
4,965
|
|
|
28,823
|
|
|
19,184
|
|
Total interest and
dividend income
|
|
60,216
|
|
|
59,060
|
|
|
56,168
|
|
|
236,078
|
|
|
218,958
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
2,802
|
|
|
2,444
|
|
|
2,013
|
|
|
9,660
|
|
|
7,167
|
|
Interest on other
borrowings
|
|
386
|
|
|
470
|
|
|
1,172
|
|
|
2,496
|
|
|
5,588
|
|
Total interest
expense
|
|
3,188
|
|
|
2,914
|
|
|
3,185
|
|
|
12,156
|
|
|
12,755
|
|
Net interest
income
|
|
57,028
|
|
|
56,146
|
|
|
52,983
|
|
|
223,922
|
|
|
206,203
|
|
Provision for loan
losses
|
|
3,670
|
|
|
490
|
|
|
1,497
|
|
|
10,901
|
|
|
16,763
|
|
Net interest
income after provision for loan losses
|
|
53,358
|
|
|
55,656
|
|
|
51,486
|
|
|
213,021
|
|
|
189,440
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
5,741
|
|
|
5,635
|
|
|
5,585
|
|
|
22,796
|
|
|
22,384
|
|
Fee income on deposit
liabilities
|
|
5,678
|
|
|
5,533
|
|
|
5,714
|
|
|
22,204
|
|
|
21,759
|
|
Fee income on other
financial products
|
|
1,464
|
|
|
1,904
|
|
|
2,144
|
|
|
7,205
|
|
|
8,707
|
|
Bank-owned life
insurance
|
|
1,374
|
|
|
1,257
|
|
|
1,017
|
|
|
5,539
|
|
|
4,637
|
|
Mortgage banking
income
|
|
305
|
|
|
520
|
|
|
1,529
|
|
|
2,201
|
|
|
6,625
|
|
Gains on sale of
investment securities, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
598
|
|
Other income,
net
|
|
388
|
|
|
380
|
|
|
470
|
|
|
1,617
|
|
|
2,256
|
|
Total noninterest
income
|
|
14,950
|
|
|
15,229
|
|
|
16,459
|
|
|
61,562
|
|
|
66,966
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
24,048
|
|
|
23,724
|
|
|
22,920
|
|
|
95,751
|
|
|
90,117
|
|
Occupancy
|
|
4,076
|
|
|
4,284
|
|
|
4,077
|
|
|
16,699
|
|
|
16,321
|
|
Data
processing
|
|
3,531
|
|
|
3,262
|
|
|
3,431
|
|
|
13,280
|
|
|
13,030
|
|
Services
|
|
3,005
|
|
|
2,863
|
|
|
2,961
|
|
|
10,994
|
|
|
11,054
|
|
Equipment
|
|
1,899
|
|
|
1,814
|
|
|
1,745
|
|
|
7,232
|
|
|
6,938
|
|
Office supplies,
printing and postage
|
|
1,676
|
|
|
1,444
|
|
|
1,644
|
|
|
6,182
|
|
|
6,075
|
|
Marketing
|
|
1,211
|
|
|
934
|
|
|
982
|
|
|
3,501
|
|
|
3,489
|
|
FDIC
insurance
|
|
608
|
|
|
746
|
|
|
839
|
|
|
2,904
|
|
|
3,543
|
|
Other
expense
|
|
5,258
|
|
|
5,050
|
|
|
4,539
|
|
|
19,324
|
|
|
18,487
|
|
Total noninterest
expense
|
|
45,312
|
|
|
44,121
|
|
|
43,138
|
|
|
175,867
|
|
|
169,054
|
|
Income before
income taxes
|
|
22,996
|
|
|
26,764
|
|
|
24,807
|
|
|
98,716
|
|
|
87,352
|
|
Income
taxes
|
|
6,137
|
|
|
9,172
|
|
|
8,590
|
|
|
31,719
|
|
|
30,073
|
|
Net
income
|
|
$
|
16,859
|
|
|
$
|
17,592
|
|
|
$
|
16,217
|
|
|
$
|
66,997
|
|
|
$
|
57,279
|
|
Comprehensive
income
|
|
$
|
10,245
|
|
|
$
|
18,009
|
|
|
$
|
2,540
|
|
|
$
|
63,858
|
|
|
$
|
52,077
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.01
|
|
|
1.07
|
|
|
1.02
|
|
|
1.02
|
|
|
0.92
|
|
Return on average
equity
|
|
11.09
|
|
|
11.64
|
|
|
11.09
|
|
|
11.20
|
|
|
9.90
|
|
Return on average
tangible common equity
|
|
12.82
|
|
|
13.47
|
|
|
12.90
|
|
|
12.99
|
|
|
11.53
|
|
Net interest
margin
|
|
3.68
|
|
|
3.69
|
|
|
3.59
|
|
|
3.69
|
|
|
3.59
|
|
Efficiency
ratio
|
|
62.95
|
|
|
61.82
|
|
|
62.12
|
|
|
61.60
|
|
|
61.89
|
|
Net charge-offs to
average loans outstanding
|
|
0.26
|
|
|
0.32
|
|
|
0.40
|
|
|
0.27
|
|
|
0.24
|
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans to
loans receivable held for investment
|
|
0.51
|
|
|
0.50
|
|
|
0.49
|
|
|
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.15
|
|
|
1.13
|
|
|
1.17
|
|
|
|
|
|
Tangible common
equity to tangible assets
|
|
7.81
|
|
|
8.01
|
|
|
7.82
|
|
|
|
|
|
Tier-1 leverage
ratio
|
|
8.6
|
|
|
8.7
|
|
|
8.6
|
|
|
|
|
|
Total capital
ratio
|
|
14.2
|
|
|
13.9
|
|
|
13.4
|
|
|
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
|
9.4
|
|
|
$
|
9.4
|
|
|
$
|
9.0
|
|
|
$
|
37.5
|
|
|
$
|
36.0
|
|
|
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 given the non-recurring nature of certain
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
include 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. In addition, the reconciling adjustments from GAAP
earnings to core earnings also exclude the impact of the federal
tax reform act due to the adjustment of the deferred tax balances
and the $1,000 employee bonuses paid
by the bank related to federal tax reform. Management does not
consider these items to be representative of the company's
fundamental core earnings. Management has shown adjusted non-GAAP
(core) net income, adjusted non-GAAP (core) diluted earnings per
common share and adjusted non-GAAP (core) ROACE in order to
provide better comparability of core net income, EPS and ROACE
between periods.
The accompanying table also provides the calculation of utility
GAAP other operation and maintenance (O&M) expense adjusted for
costs related to the terminated merger discussed above.
"O&M-related net income neutral items" which are O&M
expenses covered by specific surcharges or by third parties have
also been excluded. These "O&M-related net income neutral
items" are grossed-up in revenue and expense and do not impact net
income.
RECONCILIATION OF
GAAP1 TO NON-GAAP MEASURES
|
Hawaiian Electric
Industries, Inc. and Subsidiaries (HEI)
|
Unaudited
|
Three months
ended
December 31
|
|
Years ended
December 31
|
($ in millions,
except per share amounts)
|
2017
|
2016
|
|
2017
|
2016
|
HEI CONSOLIDATED
(INCOME) EXPENSES RELATED TO THE TERMINATED MERGER WITH NEXTERA
ENERGY AND CANCELLED SPIN-OFF OF ASB HAWAII
|
|
|
|
|
|
Pre-tax (income)
expenses
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
(84.9)
|
Current income taxes
(benefits)
|
—
|
|
—
|
|
|
—
|
|
24.7
|
After-tax (income)
expenses
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
(60.3)
|
HEI CONSOLIDATED
LNG CONTRACT COSTS2
|
|
|
|
|
|
Pre-tax
expenses
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
3.4
|
Current income taxes
(benefits)
|
—
|
|
—
|
|
|
—
|
|
(1.3)
|
After-tax (income)
expenses
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
2.1
|
HEI CONSOLIDATED
BONUSES3
|
|
|
|
|
|
Pre-tax
expenses
|
$
|
1.2
|
|
$
|
—
|
|
|
$
|
1.2
|
|
$
|
—
|
Current income taxes
(benefits)
|
(0.5)
|
|
—
|
|
|
(0.5)
|
|
—
|
After-tax (income)
expenses
|
$
|
0.7
|
|
$
|
—
|
|
|
$
|
0.7
|
|
$
|
—
|
HEI CONSOLIDATED
NET INCOME
|
|
|
|
|
|
GAAP (as
reported)
|
$
|
32.4
|
|
$
|
44.6
|
|
|
$
|
165.3
|
|
$
|
248.3
|
Excluding special
items (after-tax):
|
|
|
|
|
|
(Income) expenses
related to the terminated merger with NextEra Energy and cancelled
spin-off of ASB Hawaii
|
—
|
|
—
|
|
|
—
|
|
(60.3)
|
Costs related to the
terminated LNG contract2
|
—
|
|
—
|
|
|
—
|
|
2.1
|
Bonus related to
enactment of federal tax reform3
|
0.7
|
|
—
|
|
|
0.7
|
|
—
|
Federal tax reform
impacts4
|
13.4
|
|
—
|
|
|
13.4
|
|
—
|
Non-GAAP (core)
net income
|
$
|
46.5
|
|
$
|
44.6
|
|
|
$
|
179.5
|
|
$
|
190.1
|
HEI CONSOLIDATED
DILUTED EARNINGS PER COMMON SHARE
|
|
|
|
|
GAAP (as
reported)
|
$
|
0.30
|
|
$
|
0.41
|
|
|
$
|
1.52
|
|
$
|
2.29
|
Excluding special
items (after-tax):
|
|
|
|
|
|
(Income) expenses
related to the terminated merger with NextEra Energy and cancelled
spin-off of ASB Hawaii
|
—
|
|
—
|
|
|
—
|
|
(0.56)
|
Costs related to the
terminated LNG contract2
|
—
|
|
—
|
|
|
—
|
|
0.02
|
Bonus related to
enactment of federal tax reform3
|
0.01
|
|
—
|
|
|
0.01
|
|
—
|
Federal tax reform
impacts4
|
0.12
|
|
—
|
|
|
0.12
|
|
—
|
Non-GAAP (core)
diluted earnings per common share
|
$
|
0.43
|
|
$
|
0.41
|
|
|
$
|
1.65
|
|
$
|
1.75
|
|
|
|
|
Years ended
December 31
|
|
|
|
|
2017
|
2016
|
HEI CONSOLIDATED
RETURN ON AVERAGE COMMON EQUITY (ROACE) (simple
average)
|
|
|
|
Based on
GAAP
|
|
|
|
7.9
|
%
|
12.4
|
%
|
Based on non-GAAP
(core)5
|
|
|
|
8.6
|
%
|
9.5
|
%
|
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 Bonus paid by American
Savings Bank related to enactment of federal tax reform
|
4 Reflects the lower
rates enacted by federal tax reform, primarily the adjustments to
reduce the unregulated net deferred tax asset balances
|
5
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
December 31
|
|
Years ended
December 31
|
($ in
millions)
|
2017
|
2016
|
|
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
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
0.1
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED LNG CONTRACT COSTS2
|
|
|
|
|
Pre-tax
expenses
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
3.4
|
|
Current income tax
benefits
|
—
|
|
—
|
|
|
—
|
|
(1.3)
|
|
After-tax
expenses
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
2.1
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED NET INCOME
|
|
|
|
|
|
GAAP (as
reported)
|
$
|
25.4
|
|
$
|
34.1
|
|
|
$
|
120.0
|
|
$
|
142.3
|
|
Excluding special
items (after-tax):
|
|
|
|
|
|
Costs related to the
terminated merger with NextEra Energy
|
—
|
|
—
|
|
|
—
|
|
0.1
|
|
Costs related to the
terminated LNG contract2
|
—
|
|
—
|
|
|
—
|
|
2.1
|
|
Federal tax reform
impacts3
|
9.2
|
|
—
|
|
|
9.2
|
|
—
|
|
Non-GAAP (core)
net income
|
$
|
34.5
|
|
$
|
34.1
|
|
|
$
|
129.1
|
|
$
|
144.5
|
|
|
|
|
|
|
|
|
|
|
|
Years ended
December 31
|
|
|
|
|
2017
|
2016
|
HAWAIIAN ELECTRIC
CONSOLIDATED RETURN ON AVERAGE COMMON EQUITY (ROACE) (simple
average)
|
|
|
|
|
|
Based on
GAAP
|
|
|
|
6.58
|
%
|
8.07
|
%
|
Based on non-GAAP
(core)4
|
|
|
|
7.08
|
%
|
8.19
|
%
|
|
|
|
|
|
|
|
Three months
ended
December 31
|
|
Years ended
December 31
|
($ in
millions)
|
2017
|
2016
|
|
2017
|
2016
|
HAWAIIAN ELECTRIC
CONSOLIDATED OTHER OPERATION AND MAINTENANCE (O&M)
EXPENSE
|
|
|
|
|
|
GAAP (as
reported)
|
$
|
111.2
|
|
$
|
107.3
|
|
|
$
|
417.9
|
|
$
|
405.5
|
|
Excluding other
O&M-related net income neutral items5
|
1.1
|
|
1.3
|
|
|
3.8
|
|
5.9
|
|
Excluding costs
related to the terminated merger with NextEra Energy
|
—
|
|
—
|
|
|
—
|
|
0.1
|
|
Excluding costs
related to the terminated LNG contract2
|
—
|
|
—
|
|
|
—
|
|
3.4
|
|
Non-GAAP (Adjusted
other O&M expense)
|
$
|
110.1
|
|
$
|
106.0
|
|
|
$
|
414.1
|
|
$
|
396.2
|
|
|
|
|
|
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 Reflects the lower rates
enacted by federal tax reform, primarily the adjustments to reduce
the unregulated net deferred tax asset balances
|
4
Calculated as core net income divided by average GAAP common
equity
|
5
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
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/hawaiian-electric-industries-reports-2017-year-end--fourth-quarter-earnings-300598505.html
SOURCE Hawaiian Electric Industries, Inc.