Exact Name of Registrant as
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Commission
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I.R.S. Employer
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Specified in Its Charter
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File Number
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Identification No.
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HAWAIIAN ELECTRIC INDUSTRIES, INC.
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1-8503
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99-0208097
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and Principal Subsidiary
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HAWAIIAN ELECTRIC COMPANY, INC.
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1-4955
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99-0040500
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Hawaiian Electric Industries, Inc. Yes
x
No
o
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Hawaiian Electric Company, Inc. Yes
x
No
o
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Hawaiian Electric Industries, Inc. Yes
x
No
o
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Hawaiian Electric Company, Inc. Yes
x
No
o
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Hawaiian Electric Industries, Inc. Yes
o
No
x
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Hawaiian Electric Company, Inc. Yes
o
No
x
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Hawaiian Electric Industries, Inc.
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Large accelerated filer
x
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Hawaiian Electric Company, Inc.
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Large accelerated filer
o
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Accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
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Non-accelerated filer
x
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(Do not check if a smaller reporting company)
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Smaller reporting company
o
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Class of Common Stock
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Outstanding April 28, 2016
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Hawaiian Electric Industries, Inc. (Without Par Value)
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107,890,279 Shares
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Hawaiian Electric Company, Inc. ($6-2/3 Par Value)
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15,805,327 Shares (not publicly traded)
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Terms
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Definitions
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AES Hawaii
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AES Hawaii, Inc.
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AFUDC
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Allowance for funds used during construction
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AOCI
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Accumulated other comprehensive income/(loss)
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ARO
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Asset retirement obligation
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ASB
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American Savings Bank, F.S.B., a wholly-owned subsidiary of ASB Hawaii, Inc.
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ASB Hawaii
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ASB Hawaii, Inc. (formerly American Savings Holdings, Inc.), a wholly owned subsidiary of Hawaiian Electric Industries, Inc. and the parent company of American Savings Bank, F.S.B.
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ASC
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Accounting Standards Codification
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ASU
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Accounting Standards Update
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CIP CT-1
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Campbell Industrial Park 110 MW combustion turbine No. 1
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CIS
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Customer Information System
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Company
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Hawaiian Electric Industries, Inc. and its direct and indirect subsidiaries, including, without limitation, Hawaiian Electric Company, Inc. and its subsidiaries (listed under Hawaiian Electric); ASB Hawaii, Inc. and its subsidiary, American Savings Bank, F.S.B.; HEI Properties, Inc. (dissolved in 2015); and The Old Oahu Tug Service, Inc. (formerly Hawaiian Tug & Barge Corp.).
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Consumer Advocate
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Division of Consumer Advocacy, Department of Commerce and Consumer Affairs of the State of Hawaii
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DER
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Distributed Energy Resources
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D&O
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Decision and order
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DG
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Distributed generation
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Dodd-Frank Act
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Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
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DOH
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Department of Health of the State of Hawaii
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DRIP
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HEI Dividend Reinvestment and Stock Purchase Plan
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DSM
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Demand-side management
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ECAC
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Energy cost adjustment clause
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EGU
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Electrical generating unit
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EIP
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2010 Equity and Incentive Plan, as amended and restated
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EPA
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Environmental Protection Agency — federal
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EPS
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Earnings per share
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ERISA
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Employee Retirement Income Security Act of 1974, as amended
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EVE
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Economic value of equity
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Exchange Act
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Securities Exchange Act of 1934
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FASB
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Financial Accounting Standards Board
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FDIC
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Federal Deposit Insurance Corporation
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federal
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U.S. Government
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FERC
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Federal Energy Regulatory Commission
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FHLB
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Federal Home Loan Bank
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FHLMC
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Federal Home Loan Mortgage Corporation
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FNMA
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Federal National Mortgage Association
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FRB
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Federal Reserve Board
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GAAP
|
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Accounting principles generally accepted in the United States of America
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GHG
|
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Greenhouse gas
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Terms
|
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Definitions
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GNMA
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Government National Mortgage Association
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Hawaii Electric Light
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Hawaii Electric Light Company, Inc., an electric utility subsidiary of Hawaiian Electric Company, Inc.
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Hawaiian Electric
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Hawaiian Electric Company, Inc., an electric utility subsidiary of Hawaiian Electric Industries, Inc. and parent company of Hawaii Electric Light Company, Inc., Maui Electric Company, Limited, HECO Capital Trust III (unconsolidated financing subsidiary), Renewable Hawaii, Inc. and Uluwehiokama Biofuels Corp.
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HIE
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Hawaii Independent Energy, LLC
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HEI
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Hawaiian Electric Industries, Inc., direct parent company of Hawaiian Electric Company, Inc., ASB Hawaii, Inc., HEI Properties, Inc. (dissolved in 2015) and The Old Oahu Tug Service, Inc. (formerly Hawaiian Tug & Barge Corp.)
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HEIRSP
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Hawaiian Electric Industries Retirement Savings Plan
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HELOC
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Home equity line of credit
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Hpower
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City and County of Honolulu with respect to a power purchase agreement for a refuse-fired plant
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IPP
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Independent power producer
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Kalaeloa
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Kalaeloa Partners, L.P.
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KWH
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Kilowatthour/s (as applicable)
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LNG
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Liquefied natural gas
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LTIP
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Long-term incentive plan
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MATS
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Mercury and Air Toxics Standards
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Maui Electric
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Maui Electric Company, Limited, an electric utility subsidiary of Hawaiian Electric Company, Inc.
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Merger
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As provided in the Merger Agreement, merger of Merger Sub I with and into HEI, with HEI surviving, and then merger of HEI with and into Merger Sub II, with Merger Sub II surviving as a wholly owned subsidiary of NEE
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Merger Agreement
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Agreement and Plan of Merger by and among HEI, NEE, Merger Sub II and Merger Sub I, dated December 3, 2014
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Merger Sub I
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NEE Acquisition Sub II, Inc., a Delaware corporation and a wholly owned subsidiary of NEE
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Merger Sub II
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NEE Acquisition Sub I, LLC, a Delaware limited liability company and a wholly owned subsidiary of NEE
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MW
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Megawatt/s (as applicable)
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NEE
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NextEra Energy, Inc.
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NEM
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Net energy metering
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NII
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Net interest income
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O&M
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Other operation and maintenance
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OCC
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Office of the Comptroller of the Currency
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OPEB
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Postretirement benefits other than pensions
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PPA
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Power purchase agreement
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PPAC
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Purchased power adjustment clause
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PSIPs
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Power Supply Improvement Plans
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PUC
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Public Utilities Commission of the State of Hawaii
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PV
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Photovaltaic
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RAM
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Rate adjustment mechanism
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RBA
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Revenue balancing account
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RFP
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Request for proposals
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ROACE
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Return on average common equity
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RORB
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Return on rate base
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RPS
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Renewable portfolio standards
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SAR
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Stock appreciation right
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SEC
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Securities and Exchange Commission
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See
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Means the referenced material is incorporated by reference
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Spin-Off
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The distribution to HEI shareholders of all of the common stock of ASB Hawaii immediately prior to the Merger
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TDR
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Troubled debt restructuring
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Trust III
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HECO Capital Trust III
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Utilities
|
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Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited
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VIE
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Variable interest entity
|
•
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the successful and timely completion of the proposed Merger with NextEra Energy, Inc. (NEE), which could be materially and adversely affected by, among other things, resolving the litigation brought in connection with the proposed Merger, obtaining (and the timing and terms and conditions of) required governmental and regulatory approvals, and the ability to maintain relationships with employees, customers or suppliers and to integrate the businesses;
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•
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the ability of ASB Hawaii, Inc. (ASB Hawaii) and its subsidiary, American Savings Bank, F.S.B. (ASB), to operate successfully after the Spin-Off;
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•
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international, national and local economic conditions, including the state of the Hawaii tourism, defense and construction industries, the strength or weakness of the Hawaii and continental U.S. real estate markets (including the fair value and/or the actual performance of collateral underlying loans held by ASB, which could result in higher loan loss provisions and write-offs), decisions concerning the extent of the presence of the federal government and military in Hawaii, the implications and potential impacts of U.S. and foreign capital and credit market conditions and federal, state and international responses to those conditions, and the potential impacts of global developments (including global economic conditions and uncertainties, unrest, the conflict in Syria, terrorist acts by ISIS or others, potential conflict or crisis with North Korea and potential pandemics);
|
•
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the effects of future actions or inaction of the U.S. government or related agencies, including those related to the U.S. debt ceiling and monetary policy;
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•
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weather and natural disasters (e.g., hurricanes, earthquakes, tsunamis, lightning strikes, lava flows and the potential effects of climate change, such as more severe storms and rising sea levels), including their impact on the Company's and Utilities' operations and the economy;
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•
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the timing and extent of changes in interest rates and the shape of the yield curve;
|
•
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the ability of the Company and the Utilities to access the credit and capital markets (e.g., to obtain commercial paper and other short-term and long-term debt financing, including lines of credit, and, in the case of HEI, to issue common stock) under volatile and challenging market conditions, and the cost of such financings, if available;
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•
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the risks inherent in changes in the value of the Company’s pension and other retirement plan assets and ASB’s securities available for sale;
|
•
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changes in laws, regulations, market conditions and other factors that result in changes in assumptions used to calculate retirement benefits costs and funding requirements;
|
•
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the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) and of the rules and regulations that the Dodd-Frank Act requires to be promulgated;
|
•
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increasing competition in the banking industry (e.g., increased price competition for deposits, or an outflow of deposits to alternative investments, which may have an adverse impact on ASB’s cost of funds);
|
•
|
the potential delay by the Public Utilities Commission of the State of Hawaii (PUC) in considering (and potential disapproval of actual or proposed) renewable energy proposals and related costs; reliance by the Utilities on outside parties such as the state, independent power producers (IPPs) and developers; and uncertainties surrounding technologies, solar power, wind power, proposed undersea cables, biofuels, environmental assessments required to meet renewable portfolio standards (RPS) goals and the impacts of implementation of the renewable energy proposals on future costs of electricity;
|
•
|
the ability of the Utilities to develop, implement and recover the costs of implementing the Utilities’ action plans and business model changes proposed and being developed in response to the four orders that the PUC issued in April 2014, in which the PUC: directed the Utilities to develop, among other things, Power Supply Improvement Plans, a Demand Response Portfolio Plan and a Distributed Generation Interconnection Plan; described the PUC’s inclinations on the future of Hawaii’s electric utilities and the vision, business strategies and regulatory policy changes required to align the Utilities’ business model with customer interests and the state’s public policy goals; and emphasized the need to “leap ahead” of other states in creating a 21st century generation system and modern transmission and distribution grids;
|
•
|
capacity and supply constraints or difficulties, especially if generating units (utility-owned or IPP-owned) fail or measures such as demand-side management (DSM), distributed generation (DG), combined heat and power or other firm capacity supply-side resources fall short of achieving their forecasted benefits or are otherwise insufficient to reduce or meet peak demand;
|
•
|
fuel oil price changes, delivery of adequate fuel by suppliers and the continued availability to the electric utilities of their energy cost adjustment clauses (ECACs);
|
•
|
the continued availability to the electric utilities or modifications of other cost recovery mechanisms, including the purchased power adjustment clauses (PPACs), rate adjustment mechanisms (RAMs) and pension and postretirement benefits other than pensions (OPEB) tracking mechanisms, and the continued decoupling of revenues from sales to mitigate the effects of declining kilowatthour sales;
|
•
|
the impact of fuel price volatility on customer satisfaction and political and regulatory support for the Utilities;
|
•
|
the risks associated with increasing reliance on renewable energy, including the availability and cost of non-fossil fuel supplies for renewable energy generation and the operational impacts of adding intermittent sources of renewable energy to the electric grid;
|
•
|
the growing risk that energy production from renewable generating resources may be curtailed and the interconnection of additional resources will be constrained as more generating resources are added to the Utilities' electric systems and as customers reduce their energy usage;
|
•
|
the ability of IPPs to deliver the firm capacity anticipated in their power purchase agreements (PPAs);
|
•
|
the potential that, as IPP contracts near the end of their terms, there may be less economic incentive for the IPPs to make investments in their units to ensure the availability of their units;
|
•
|
the ability of the Utilities to negotiate, periodically, favorable agreements for significant resources such as fuel supply contracts and collective bargaining agreements;
|
•
|
new technological developments that could affect the operations and prospects of the Utilities and ASB or their competitors;
|
•
|
new technological developments, such as the commercial development of energy storage and microgrids, that could affect the operations of the Utilities;
|
•
|
cyber security risks and the potential for cyber incidents, including potential incidents at HEI, ASB and the Utilities (including at ASB branches and electric utility plants) and incidents at data processing centers they use, to the extent not prevented by intrusion detection and prevention systems, anti-virus software, firewalls and other general information technology controls;
|
•
|
federal, state, county and international governmental and regulatory actions, such as existing, new and changes in laws, rules and regulations applicable to HEI, the Utilities and ASB (including changes in taxation, increases in capital requirements, regulatory policy changes, environmental laws and regulations (including resulting compliance costs and risks of fines and penalties and/or liabilities), the regulation of greenhouse gas (GHG) emissions, governmental fees and assessments (such as Federal Deposit Insurance Corporation assessments), and potential carbon “cap and trade” legislation that may fundamentally alter costs to produce electricity and accelerate the move to renewable generation);
|
•
|
developments in laws, regulations and policies governing protections for historic, archaeological and cultural sites, and plant and animal species and habitats, as well as developments in the implementation and enforcement of such laws, regulations and policies;
|
•
|
discovery of conditions that may be attributable to historical chemical releases, including any necessary investigation and remediation, and any associated enforcement, litigation or regulatory oversight;
|
•
|
decisions by the PUC in rate cases and other proceedings (including the risks of delays in the timing of decisions, adverse changes in final decisions from interim decisions and the disallowance of project costs as a result of adverse regulatory audit reports or otherwise);
|
•
|
decisions by the PUC and by other agencies and courts on land use, environmental and other permitting issues (such as required corrective actions, restrictions and penalties that may arise, such as with respect to environmental conditions or RPS);
|
•
|
potential enforcement actions by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (FRB), the Federal Deposit Insurance Corporation (FDIC) and/or other governmental authorities (such as consent orders, required corrective actions, restrictions and penalties that may arise, for example, with respect to compliance deficiencies under existing or new banking and consumer protection laws and regulations or with respect to capital adequacy);
|
•
|
the ability of the Utilities to recover increasing costs and earn a reasonable return on capital investments not covered by RAMs;
|
•
|
the risks associated with the geographic concentration of HEI’s businesses and ASB’s loans, ASB’s concentration in a single product type (i.e., first mortgages) and ASB’s significant credit relationships (i.e., concentrations of large loans and/or credit lines with certain customers);
|
•
|
changes in accounting principles applicable to HEI, the Utilities and ASB, including the adoption of new U.S. accounting standards, the potential discontinuance of regulatory accounting and the effects of potentially required consolidation of variable interest entities (VIEs) or required capital lease accounting for PPAs with IPPs;
|
•
|
changes by securities rating agencies in their ratings of the securities of HEI and Hawaiian Electric and the results of financing efforts;
|
•
|
faster than expected loan prepayments that can cause an acceleration of the amortization of premiums on loans and investments and the impairment of mortgage-servicing assets of ASB;
|
•
|
changes in ASB’s loan portfolio credit profile and asset quality which may increase or decrease the required level of provision for loan losses, allowance for loan losses and charge-offs;
|
•
|
changes in ASB’s deposit cost or mix which may have an adverse impact on ASB’s cost of funds;
|
•
|
the final outcome of tax positions taken by HEI, the Utilities and ASB;
|
•
|
the risks of suffering losses and incurring liabilities that are uninsured (e.g., damages to the Utilities’ transmission and distribution system and losses from business interruption) or underinsured (e.g., losses not covered as a result of insurance deductibles or other exclusions or exceeding policy limits); and
|
•
|
other risks or uncertainties described elsewhere in this report and in other reports (e.g., “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K) previously and subsequently filed by HEI and/or Hawaiian Electric with the Securities and Exchange Commission (SEC).
|
|
|
Three months ended March 31
|
||||||
(in thousands, except per share amounts)
|
|
2016
|
|
2015
|
||||
Revenues
|
|
|
|
|
|
|
||
Electric utility
|
|
$
|
482,052
|
|
|
$
|
573,442
|
|
Bank
|
|
68,840
|
|
|
64,348
|
|
||
Other
|
|
68
|
|
|
72
|
|
||
Total revenues
|
|
550,960
|
|
|
637,862
|
|
||
Expenses
|
|
|
|
|
|
|
||
Electric utility
|
|
426,726
|
|
|
515,806
|
|
||
Bank
|
|
49,246
|
|
|
43,717
|
|
||
Other
|
|
6,137
|
|
|
8,833
|
|
||
Total expenses
|
|
482,109
|
|
|
568,356
|
|
||
Operating income (loss)
|
|
|
|
|
|
|
||
Electric utility
|
|
55,326
|
|
|
57,636
|
|
||
Bank
|
|
19,594
|
|
|
20,631
|
|
||
Other
|
|
(6,069
|
)
|
|
(8,761
|
)
|
||
Total operating income
|
|
68,851
|
|
|
69,506
|
|
||
Interest expense, net—other than on deposit liabilities and other bank borrowings
|
|
(20,126
|
)
|
|
(19,100
|
)
|
||
Allowance for borrowed funds used during construction
|
|
662
|
|
|
499
|
|
||
Allowance for equity funds used during construction
|
|
1,739
|
|
|
1,413
|
|
||
Income before income taxes
|
|
51,126
|
|
|
52,318
|
|
||
Income taxes
|
|
18,301
|
|
|
19,979
|
|
||
Net income
|
|
32,825
|
|
|
32,339
|
|
||
Preferred stock dividends of subsidiaries
|
|
473
|
|
|
473
|
|
||
Net income for common stock
|
|
$
|
32,352
|
|
|
$
|
31,866
|
|
Basic earnings per common share
|
|
$
|
0.30
|
|
|
$
|
0.31
|
|
Diluted earnings per common share
|
|
$
|
0.30
|
|
|
$
|
0.31
|
|
Dividends per common share
|
|
$
|
0.31
|
|
|
$
|
0.31
|
|
Weighted-average number of common shares outstanding
|
|
107,620
|
|
|
103,281
|
|
||
Net effect of potentially dilutive shares
|
|
161
|
|
|
286
|
|
||
Adjusted weighted-average shares
|
|
107,781
|
|
|
103,567
|
|
|
|
Three months ended March 31
|
||||||
(in thousands)
|
|
2016
|
|
2015
|
||||
Net income for common stock
|
|
$
|
32,352
|
|
|
$
|
31,866
|
|
Other comprehensive income, net of taxes:
|
|
|
|
|
|
|
||
Net unrealized gains on available-for-sale investment securities:
|
|
|
|
|
|
|
||
Net unrealized gains on available-for-sale investment securities arising during the period, net of tax benefits of $4,905 and 2,278 for the respective periods
|
|
7,428
|
|
|
3,451
|
|
||
Derivatives qualified as cash flow hedges:
|
|
|
|
|
|
|
||
Effective portion of foreign currency hedge net unrealized gain, net of taxes of $638 and nil for the respective periods
|
|
1,002
|
|
|
—
|
|
||
Less: reclassification adjustment to net income, net of tax benefits of $35 and $37 for the respective periods
|
|
54
|
|
|
59
|
|
||
Retirement benefit plans:
|
|
|
|
|
|
|
||
Less: amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $2,257 and $3,486 for the respective periods
|
|
3,538
|
|
|
5,459
|
|
||
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes of $2,052 and $3,127 for the respective periods
|
|
(3,222
|
)
|
|
(4,911
|
)
|
||
Other comprehensive income, net of taxes
|
|
8,800
|
|
|
4,058
|
|
||
Comprehensive income attributable to Hawaiian Electric Industries, Inc.
|
|
$
|
41,152
|
|
|
$
|
35,924
|
|
(dollars in thousands)
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
334,743
|
|
|
$
|
300,478
|
|
Accounts receivable and unbilled revenues, net
|
|
210,280
|
|
|
242,766
|
|
||
Available-for-sale investment securities, at fair value
|
|
906,295
|
|
|
820,648
|
|
||
Stock in Federal Home Loan Bank, at cost
|
|
11,218
|
|
|
10,678
|
|
||
Loans receivable held for investment, net
|
|
4,589,950
|
|
|
4,565,781
|
|
||
Loans held for sale, at lower of cost or fair value
|
|
7,900
|
|
|
4,631
|
|
||
Property, plant and equipment, net of accumulated depreciation of $2,355,984 and $2,339,319 at the respective dates
|
|
4,423,567
|
|
|
4,377,658
|
|
||
Regulatory assets
|
|
888,408
|
|
|
896,731
|
|
||
Other
|
|
415,955
|
|
|
480,457
|
|
||
Goodwill
|
|
82,190
|
|
|
82,190
|
|
||
Total assets
|
|
$
|
11,870,506
|
|
|
$
|
11,782,018
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
119,288
|
|
|
$
|
138,523
|
|
Interest and dividends payable
|
|
27,890
|
|
|
26,042
|
|
||
Deposit liabilities
|
|
5,139,932
|
|
|
5,025,254
|
|
||
Short-term borrowings—other than bank
|
|
95,485
|
|
|
103,063
|
|
||
Other bank borrowings
|
|
329,081
|
|
|
328,582
|
|
||
Long-term debt, net—other than bank
|
|
1,578,618
|
|
|
1,578,368
|
|
||
Deferred income taxes
|
|
700,782
|
|
|
680,877
|
|
||
Regulatory liabilities
|
|
383,793
|
|
|
371,543
|
|
||
Contributions in aid of construction
|
|
513,520
|
|
|
506,087
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
|
584,490
|
|
|
589,918
|
|
||
Other
|
|
421,155
|
|
|
471,828
|
|
||
Total liabilities
|
|
9,894,034
|
|
|
9,820,085
|
|
||
Preferred stock of subsidiaries - not subject to mandatory redemption
|
|
34,293
|
|
|
34,293
|
|
||
Commitments and contingencies (Notes 4 and 5)
|
|
|
|
|
|
|
||
Shareholders’ equity
|
|
|
|
|
|
|
||
Preferred stock, no par value, authorized 10,000,000 shares; issued: none
|
|
—
|
|
|
—
|
|
||
Common stock, no par value, authorized 200,000,000 shares; issued and outstanding: 107,875,779 shares and 107,460,406 shares at the respective dates
|
|
1,635,890
|
|
|
1,629,136
|
|
||
Retained earnings
|
|
323,751
|
|
|
324,766
|
|
||
Accumulated other comprehensive loss, net of tax benefits
|
|
(17,462
|
)
|
|
(26,262
|
)
|
||
Total shareholders’ equity
|
|
1,942,179
|
|
|
1,927,640
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
11,870,506
|
|
|
$
|
11,782,018
|
|
|
|
Common stock
|
|
Retained
|
|
Accumulated
other
comprehensive
|
|
|
|||||||||||
(in thousands, except per share amounts)
|
|
Shares
|
|
Amount
|
|
Earnings
|
|
income (loss)
|
|
Total
|
|||||||||
Balance, December 31, 2015
|
|
107,460
|
|
|
$
|
1,629,136
|
|
|
$
|
324,766
|
|
|
$
|
(26,262
|
)
|
|
$
|
1,927,640
|
|
Net income for common stock
|
|
—
|
|
|
—
|
|
|
32,352
|
|
|
—
|
|
|
32,352
|
|
||||
Other comprehensive income, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,800
|
|
|
8,800
|
|
||||
Issuance of common stock, net
|
|
416
|
|
|
6,754
|
|
|
—
|
|
|
—
|
|
|
6,754
|
|
||||
Common stock dividends ($0.31 per share)
|
|
—
|
|
|
—
|
|
|
(33,367
|
)
|
|
—
|
|
|
(33,367
|
)
|
||||
Balance, March 31, 2016
|
|
107,876
|
|
|
$
|
1,635,890
|
|
|
$
|
323,751
|
|
|
$
|
(17,462
|
)
|
|
$
|
1,942,179
|
|
Balance, December 31, 2014
|
|
102,565
|
|
|
$
|
1,521,297
|
|
|
$
|
296,654
|
|
|
$
|
(27,378
|
)
|
|
$
|
1,790,573
|
|
Net income for common stock
|
|
—
|
|
|
—
|
|
|
31,866
|
|
|
—
|
|
|
31,866
|
|
||||
Other comprehensive income, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,058
|
|
|
4,058
|
|
||||
Issuance of common stock, net
|
|
4,853
|
|
|
103,252
|
|
|
—
|
|
|
—
|
|
|
103,252
|
|
||||
Common stock dividends ($0.31 per share)
|
|
—
|
|
|
—
|
|
|
(31,840
|
)
|
|
—
|
|
|
(31,840
|
)
|
||||
Balance, March 31, 2015
|
|
107,418
|
|
|
$
|
1,624,549
|
|
|
$
|
296,680
|
|
|
$
|
(23,320
|
)
|
|
$
|
1,897,909
|
|
Three months ended March 31
|
|
2016
|
|
2015
|
||||
(in thousands)
|
|
|
|
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
||
Net income
|
|
$
|
32,825
|
|
|
$
|
32,339
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
||
Depreciation of property, plant and equipment
|
|
48,594
|
|
|
45,865
|
|
||
Other amortization
|
|
1,928
|
|
|
2,371
|
|
||
Provision for loan losses
|
|
4,766
|
|
|
614
|
|
||
Loans receivable originated and purchased, held for sale
|
|
(42,719
|
)
|
|
(79,070
|
)
|
||
Proceeds from sale of loans receivable, held for sale
|
|
40,363
|
|
|
78,332
|
|
||
Increase in deferred income taxes
|
|
13,008
|
|
|
3,828
|
|
||
Share-based compensation expense
|
|
1,013
|
|
|
1,754
|
|
||
Excess tax benefits from share-based payment arrangements
|
|
(380
|
)
|
|
(968
|
)
|
||
Allowance for equity funds used during construction
|
|
(1,739
|
)
|
|
(1,413
|
)
|
||
Changes in assets and liabilities
|
|
|
|
|
|
|
||
Decrease in accounts receivable and unbilled revenues, net
|
|
28,108
|
|
|
58,331
|
|
||
Decrease in fuel oil stock
|
|
22,812
|
|
|
20,731
|
|
||
Decrease (increase) in regulatory assets
|
|
1,585
|
|
|
(10,827
|
)
|
||
Increase in accounts, interest and dividends payable
|
|
30,135
|
|
|
22,053
|
|
||
Change in prepaid and accrued income taxes and utility revenue taxes
|
|
(14,343
|
)
|
|
(9,461
|
)
|
||
Increase in defined benefit pension and other postretirement benefit plans liability
|
|
137
|
|
|
123
|
|
||
Change in other assets and liabilities
|
|
4,499
|
|
|
(25,992
|
)
|
||
Net cash provided by operating activities
|
|
170,592
|
|
|
138,610
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
||
Available-for-sale investment securities purchased
|
|
(122,387
|
)
|
|
(63,370
|
)
|
||
Principal repayments on available-for-sale investment securities
|
|
48,819
|
|
|
28,486
|
|
||
Purchase of stock from Federal Home Loan Bank
|
|
(1,373
|
)
|
|
—
|
|
||
Redemption of stock from Federal Home Loan Bank
|
|
833
|
|
|
5,590
|
|
||
Net increase in loans held for investment
|
|
(28,137
|
)
|
|
(12,524
|
)
|
||
Proceeds from sale of real estate acquired in settlement of loans
|
|
232
|
|
|
606
|
|
||
Capital expenditures
|
|
(127,818
|
)
|
|
(123,527
|
)
|
||
Contributions in aid of construction
|
|
13,761
|
|
|
9,145
|
|
||
Other
|
|
819
|
|
|
3,549
|
|
||
Net cash used in investing activities
|
|
(215,251
|
)
|
|
(152,045
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
||
Net increase in deposit liabilities
|
|
114,678
|
|
|
127,913
|
|
||
Net decrease in short-term borrowings with original maturities of three months or less
|
|
(7,578
|
)
|
|
(88,472
|
)
|
||
Net increase in retail repurchase agreements
|
|
19,041
|
|
|
21,451
|
|
||
Proceeds from other bank borrowings
|
|
20,835
|
|
|
—
|
|
||
Repayments of other bank borrowings
|
|
(39,369
|
)
|
|
—
|
|
||
Proceeds from issuance of long-term debt
|
|
75,000
|
|
|
—
|
|
||
Repayment of long-term debt
|
|
(75,000
|
)
|
|
—
|
|
||
Excess tax benefits from share-based payment arrangements
|
|
380
|
|
|
968
|
|
||
Net proceeds from issuance of common stock
|
|
3,022
|
|
|
104,468
|
|
||
Common stock dividends
|
|
(27,716
|
)
|
|
(31,829
|
)
|
||
Preferred stock dividends of subsidiaries
|
|
(473
|
)
|
|
(473
|
)
|
||
Other
|
|
(3,896
|
)
|
|
(3,965
|
)
|
||
Net cash provided by financing activities
|
|
78,924
|
|
|
130,061
|
|
||
Net increase in cash and cash equivalents
|
|
34,265
|
|
|
116,626
|
|
||
Cash and cash equivalents, beginning of period
|
|
300,478
|
|
|
175,542
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
334,743
|
|
|
$
|
292,168
|
|
|
|
Three months ended March 31
|
||||||
(in thousands)
|
|
2016
|
|
2015
|
||||
Revenues
|
|
$
|
482,052
|
|
|
$
|
573,442
|
|
Expenses
|
|
|
|
|
|
|
||
Fuel oil
|
|
113,740
|
|
|
176,806
|
|
||
Purchased power
|
|
115,859
|
|
|
136,007
|
|
||
Other operation and maintenance
|
|
103,908
|
|
|
104,002
|
|
||
Depreciation
|
|
46,781
|
|
|
44,243
|
|
||
Taxes, other than income taxes
|
|
46,438
|
|
|
54,748
|
|
||
Total expenses
|
|
426,726
|
|
|
515,806
|
|
||
Operating income
|
|
55,326
|
|
|
57,636
|
|
||
Allowance for equity funds used during construction
|
|
1,739
|
|
|
1,413
|
|
||
Interest expense and other charges, net
|
|
(17,308
|
)
|
|
(16,325
|
)
|
||
Allowance for borrowed funds used during construction
|
|
662
|
|
|
499
|
|
||
Income before income taxes
|
|
40,419
|
|
|
43,223
|
|
||
Income taxes
|
|
14,553
|
|
|
15,850
|
|
||
Net income
|
|
25,866
|
|
|
27,373
|
|
||
Preferred stock dividends of subsidiaries
|
|
229
|
|
|
229
|
|
||
Net income attributable to Hawaiian Electric
|
|
25,637
|
|
|
27,144
|
|
||
Preferred stock dividends of Hawaiian Electric
|
|
270
|
|
|
270
|
|
||
Net income for common stock
|
|
$
|
25,367
|
|
|
$
|
26,874
|
|
|
|
Three months ended March 31
|
||||||
(in thousands)
|
|
2016
|
|
2015
|
||||
Net income for common stock
|
|
$
|
25,367
|
|
|
$
|
26,874
|
|
Other comprehensive income, net of taxes:
|
|
|
|
|
|
|
||
Derivatives qualified as cash flow hedges:
|
|
|
|
|
||||
Effective portion of foreign currency hedge net unrealized gain, net of taxes of $638 and nil for the respective periods
|
|
1,002
|
|
|
—
|
|
||
Retirement benefit plans:
|
|
|
|
|
|
|
||
Less: amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $2,061 and $3,141 for the respective periods
|
|
3,236
|
|
|
4,933
|
|
||
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes of $2,052 and $3,127 for the respective periods
|
|
(3,222
|
)
|
|
(4,911
|
)
|
||
Other comprehensive income, net of taxes
|
|
1,016
|
|
|
22
|
|
||
Comprehensive income attributable to Hawaiian Electric Company, Inc.
|
|
$
|
26,383
|
|
|
$
|
26,896
|
|
(dollars in thousands, except par value)
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
Assets
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
|
||||
Utility property, plant and equipment
|
|
|
|
|
|
|
||
Land
|
|
$
|
53,207
|
|
|
$
|
52,792
|
|
Plant and equipment
|
|
6,356,006
|
|
|
6,315,698
|
|
||
Less accumulated depreciation
|
|
(2,284,928
|
)
|
|
(2,266,004
|
)
|
||
Construction in progress
|
|
198,004
|
|
|
175,309
|
|
||
Utility property, plant and equipment, net
|
|
4,322,289
|
|
|
4,277,795
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation of $1,230 and $1,229 at respective dates
|
|
7,375
|
|
|
7,272
|
|
||
Total property, plant and equipment, net
|
|
4,329,664
|
|
|
4,285,067
|
|
||
Current assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
49,042
|
|
|
24,449
|
|
||
Customer accounts receivable, net
|
|
103,739
|
|
|
132,778
|
|
||
Accrued unbilled revenues, net
|
|
85,367
|
|
|
84,509
|
|
||
Other accounts receivable, net
|
|
6,773
|
|
|
10,408
|
|
||
Fuel oil stock, at average cost
|
|
48,404
|
|
|
71,216
|
|
||
Materials and supplies, at average cost
|
|
54,256
|
|
|
54,429
|
|
||
Prepayments and other
|
|
21,803
|
|
|
36,640
|
|
||
Regulatory assets
|
|
89,192
|
|
|
72,231
|
|
||
Total current assets
|
|
458,576
|
|
|
486,660
|
|
||
Other long-term assets
|
|
|
|
|
|
|
||
Regulatory assets
|
|
799,216
|
|
|
824,500
|
|
||
Unamortized debt expense
|
|
420
|
|
|
497
|
|
||
Other
|
|
74,495
|
|
|
75,486
|
|
||
Total other long-term assets
|
|
874,131
|
|
|
900,483
|
|
||
Total assets
|
|
$
|
5,662,371
|
|
|
$
|
5,672,210
|
|
Capitalization and liabilities
|
|
|
|
|
|
|
||
Capitalization
|
|
|
|
|
|
|
||
Common stock ($6 2/3 par value, authorized 50,000,000 shares; outstanding 15,805,327 shares)
|
|
$
|
105,388
|
|
|
$
|
105,388
|
|
Premium on capital stock
|
|
578,926
|
|
|
578,930
|
|
||
Retained earnings
|
|
1,045,049
|
|
|
1,043,082
|
|
||
Accumulated other comprehensive income, net of income taxes
|
|
1,941
|
|
|
925
|
|
||
Common stock equity
|
|
1,731,304
|
|
|
1,728,325
|
|
||
Cumulative preferred stock — not subject to mandatory redemption
|
|
34,293
|
|
|
34,293
|
|
||
Long-term debt, net
|
|
1,278,916
|
|
|
1,278,702
|
|
||
Total capitalization
|
|
3,044,513
|
|
|
3,041,320
|
|
||
Commitments and contingencies (Note 4)
|
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
|
||
Short-term borrowings from non-affiliates
|
|
12,998
|
|
|
—
|
|
||
Accounts payable
|
|
95,090
|
|
|
114,846
|
|
||
Interest and preferred dividends payable
|
|
27,015
|
|
|
23,111
|
|
||
Taxes accrued
|
|
129,239
|
|
|
191,084
|
|
||
Regulatory liabilities
|
|
5,416
|
|
|
2,204
|
|
||
Other
|
|
75,006
|
|
|
54,079
|
|
||
Total current liabilities
|
|
344,764
|
|
|
385,324
|
|
||
Deferred credits and other liabilities
|
|
|
|
|
|
|
||
Deferred income taxes
|
|
670,126
|
|
|
654,806
|
|
||
Regulatory liabilities
|
|
378,377
|
|
|
369,339
|
|
||
Unamortized tax credits
|
|
85,902
|
|
|
84,214
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
|
547,517
|
|
|
552,974
|
|
||
Other
|
|
77,652
|
|
|
78,146
|
|
||
Total deferred credits and other liabilities
|
|
1,759,574
|
|
|
1,739,479
|
|
||
Contributions in aid of construction
|
|
513,520
|
|
|
506,087
|
|
||
Total capitalization and liabilities
|
|
$
|
5,662,371
|
|
|
$
|
5,672,210
|
|
|
|
Common stock
|
|
Premium
on
capital
|
|
Retained
|
|
Accumulated
other
comprehensive
|
|
|
|||||||||||||
(in thousands)
|
|
Shares
|
|
Amount
|
|
stock
|
|
earnings
|
|
income (loss)
|
|
Total
|
|||||||||||
Balance, December 31, 2015
|
|
15,805
|
|
|
$
|
105,388
|
|
|
$
|
578,930
|
|
|
$
|
1,043,082
|
|
|
$
|
925
|
|
|
$
|
1,728,325
|
|
Net income for common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,367
|
|
|
—
|
|
|
25,367
|
|
|||||
Other comprehensive income, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,016
|
|
|
1,016
|
|
|||||
Common stock dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,400
|
)
|
|
—
|
|
|
(23,400
|
)
|
|||||
Common stock issuance expenses
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Balance, March 31, 2016
|
|
15,805
|
|
|
$
|
105,388
|
|
|
$
|
578,926
|
|
|
$
|
1,045,049
|
|
|
$
|
1,941
|
|
|
$
|
1,731,304
|
|
Balance, December 31, 2014
|
|
15,805
|
|
|
$
|
105,388
|
|
|
$
|
578,938
|
|
|
$
|
997,773
|
|
|
$
|
45
|
|
|
$
|
1,682,144
|
|
Net income for common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,874
|
|
|
—
|
|
|
26,874
|
|
|||||
Other comprehensive income, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
22
|
|
|||||
Common stock dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,601
|
)
|
|
—
|
|
|
(22,601
|
)
|
|||||
Common stock issuance expenses
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Balance, March 31, 2015
|
|
15,805
|
|
|
$
|
105,388
|
|
|
$
|
578,933
|
|
|
$
|
1,002,046
|
|
|
$
|
67
|
|
|
$
|
1,686,434
|
|
Three months ended March 31
|
|
2016
|
|
2015
|
||||
(in thousands)
|
|
|
|
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
||
Net income
|
|
$
|
25,866
|
|
|
$
|
27,373
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
||
Depreciation of property, plant and equipment
|
|
46,781
|
|
|
44,243
|
|
||
Other amortization
|
|
1,774
|
|
|
1,698
|
|
||
Increase in deferred income taxes
|
|
13,558
|
|
|
15,132
|
|
||
Change in tax credits, net
|
|
1,702
|
|
|
2,576
|
|
||
Allowance for equity funds used during construction
|
|
(1,739
|
)
|
|
(1,413
|
)
|
||
Changes in assets and liabilities
|
|
|
|
|
|
|
||
Decrease in accounts receivable
|
|
28,297
|
|
|
29,104
|
|
||
Decrease (increase) in accrued unbilled revenues
|
|
(858
|
)
|
|
27,880
|
|
||
Decrease in fuel oil stock
|
|
22,812
|
|
|
20,731
|
|
||
Decrease (increase) in materials and supplies
|
|
173
|
|
|
(1,357
|
)
|
||
Decrease (increase) in regulatory assets
|
|
1,585
|
|
|
(10,827
|
)
|
||
Increase in accounts payable
|
|
27,766
|
|
|
15,380
|
|
||
Change in prepaid and accrued income taxes and revenue taxes
|
|
(42,018
|
)
|
|
(63,696
|
)
|
||
Increase in defined benefit pension and other postretirement benefit plans liability
|
|
205
|
|
|
110
|
|
||
Change in other assets and liabilities
|
|
20,967
|
|
|
(9,774
|
)
|
||
Net cash provided by operating activities
|
|
146,871
|
|
|
97,160
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
||
Capital expenditures
|
|
(125,183
|
)
|
|
(118,874
|
)
|
||
Contributions in aid of construction
|
|
13,761
|
|
|
9,145
|
|
||
Other
|
|
45
|
|
|
243
|
|
||
Net cash used in investing activities
|
|
(111,377
|
)
|
|
(109,486
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
||
Common stock dividends
|
|
(23,400
|
)
|
|
(22,601
|
)
|
||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
|
(499
|
)
|
|
(499
|
)
|
||
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
|
12,998
|
|
|
30,000
|
|
||
Other
|
|
—
|
|
|
(216
|
)
|
||
Net cash provided by (used in) financing activities
|
|
(10,901
|
)
|
|
6,684
|
|
||
Net increase (decrease) in cash and cash equivalents
|
|
24,593
|
|
|
(5,642
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
24,449
|
|
|
13,762
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
49,042
|
|
|
$
|
8,120
|
|
•
|
subject to PUC approval, completing full smart meter deployment to all customers by December 31, 2019
|
•
|
reflecting
100%
of all net non-fuel O&M savings achieved by the Utilities and limiting non-fuel O&M expenses to levels no higher than the non-fuel O&M expenses in 2014, adjusted for inflation, in the revenue requirements in the first rate case following the
four
-year rate case moratorium
|
•
|
establishing a funding mechanism of
$2.5 million
per year during the
four
-year rate case moratorium to be used for purposes in the public interest at the PUC’s discretion and direction
|
•
|
committing to corporate giving of at least
$2.2 million
for a minimum of
10
years post-closing
|
•
|
committing to not selling the Utilities or their holding company for at least
10
years post-closing
|
•
|
committing to undertake good faith efforts to achieve a consolidated renewable portfolio standard of
thirty-five
percent of net electricity sales by December 31, 2020, and
fifty
percent of net electricity sales by December 31, 2030;
|
•
|
committing to and specifying in detail how
$60 million
in total rate credits will be provided over the four-year base rate moratorium period; and
|
•
|
committing to (i) establish a new intermediate holding company, Hawaiian Electric Utility Holdings, which will have a voting board of directors and a majority of the members of the board of directors who will be residents of Hawaii, (ii) implement a suite of additional ring fencing commitments, and (iii) develop employees from within the Companies to fill executive vacancies.
|
(in thousands)
|
|
Electric utility
|
|
Bank
|
|
Other
|
|
Total
|
||||||||
Three months ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues from external customers
|
|
$
|
482,045
|
|
|
$
|
68,840
|
|
|
$
|
75
|
|
|
$
|
550,960
|
|
Intersegment revenues (eliminations)
|
|
7
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
||||
Revenues
|
|
482,052
|
|
|
68,840
|
|
|
68
|
|
|
550,960
|
|
||||
Income (loss) before income taxes
|
|
40,419
|
|
|
19,594
|
|
|
(8,887
|
)
|
|
51,126
|
|
||||
Income taxes (benefit)
|
|
14,553
|
|
|
6,921
|
|
|
(3,173
|
)
|
|
18,301
|
|
||||
Net income (loss)
|
|
25,866
|
|
|
12,673
|
|
|
(5,714
|
)
|
|
32,825
|
|
||||
Preferred stock dividends of subsidiaries
|
|
499
|
|
|
—
|
|
|
(26
|
)
|
|
473
|
|
||||
Net income (loss) for common stock
|
|
25,367
|
|
|
12,673
|
|
|
(5,688
|
)
|
|
32,352
|
|
||||
Total assets (at March 31, 2016)
|
|
5,662,371
|
|
|
6,140,514
|
|
|
67,621
|
|
|
11,870,506
|
|
||||
Three months ended March 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues from external customers
|
|
$
|
573,431
|
|
|
$
|
64,348
|
|
|
$
|
83
|
|
|
$
|
637,862
|
|
Intersegment revenues (eliminations)
|
|
11
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
||||
Revenues
|
|
573,442
|
|
|
64,348
|
|
|
72
|
|
|
637,862
|
|
||||
Income (loss) before income taxes
|
|
43,223
|
|
|
20,631
|
|
|
(11,536
|
)
|
|
52,318
|
|
||||
Income taxes (benefit)
|
|
15,850
|
|
|
7,156
|
|
|
(3,027
|
)
|
|
19,979
|
|
||||
Net income (loss)
|
|
27,373
|
|
|
13,475
|
|
|
(8,509
|
)
|
|
32,339
|
|
||||
Preferred stock dividends of subsidiaries
|
|
499
|
|
|
—
|
|
|
(26
|
)
|
|
473
|
|
||||
Net income (loss) for common stock
|
|
26,874
|
|
|
13,475
|
|
|
(8,483
|
)
|
|
31,866
|
|
||||
Total assets (at December 31, 2015)*
|
|
5,672,210
|
|
|
6,014,755
|
|
|
95,053
|
|
|
11,782,018
|
|
|
|
Three months ended March 31
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
AES Hawaii
|
|
$
|
38
|
|
|
$
|
34
|
|
Kalaeloa
|
|
29
|
|
|
44
|
|
||
HEP
|
|
11
|
|
|
11
|
|
||
Hpower
|
|
16
|
|
|
16
|
|
||
Puna Geothermal Venture
|
|
7
|
|
|
7
|
|
||
Hawaiian Commercial & Sugar (HC&S)
|
|
—
|
|
|
2
|
|
||
Other IPPs
|
|
15
|
|
|
22
|
|
||
Total IPPs
|
|
$
|
116
|
|
|
$
|
136
|
|
|
|
Three months ended March 31
|
||||||
(in thousands)
|
|
2016
|
|
2015
|
||||
Balance, beginning of period
|
|
$
|
26,848
|
|
|
$
|
29,419
|
|
Accretion expense
|
|
3
|
|
|
6
|
|
||
Liabilities incurred
|
|
—
|
|
|
—
|
|
||
Liabilities settled
|
|
(138
|
)
|
|
(1,614
|
)
|
||
Revisions in estimated cash flows
|
|
—
|
|
|
—
|
|
||
Balance, end of period
|
|
$
|
26,713
|
|
|
$
|
27,811
|
|
•
|
An adjustment to the Rate Base RAM Adjustment to include
90%
of the amount of the current RAM Period Rate Base RAM Adjustment that exceeds the Rate Base RAM Adjustment from the prior year, to be effective with the Utilities’ 2014 decoupling filing.
|
•
|
Effective March 1, 2014, the interest rate to be applied on the outstanding RBA balances to be the short term debt rate used in each Utilities last rate case (ranging from
1.25%
to
3.25%
), instead of the
6%
that had been previously approved.
|
($ in millions)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
||||||
2016 Annual incremental RAM adjusted revenues
|
|
$
|
11.0
|
|
|
$
|
2.9
|
|
|
$
|
2.4
|
|
Annual change in accrued earnings sharing credits
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
Annual change in accrued RBA balance as of December 31, 2015 (and associated revenue taxes) (refunded)
|
|
$
|
(13.6
|
)
|
|
$
|
(2.5
|
)
|
|
$
|
(4.3
|
)
|
Net annual incremental amount to be collected (refunded) under the tariffs
|
|
$
|
(2.6
|
)
|
|
$
|
0.4
|
|
|
$
|
(1.4
|
)
|
Impact on typical residential customer monthly bill (in dollars) *
|
|
$
|
0.01
|
|
|
$
|
0.41
|
|
|
$
|
(0.95
|
)
|
•
|
Distributed Generation Interconnection Plan - the Utilities’ Plan was filed in August 2014.
|
•
|
Plan to implement an on-going distribution circuit monitoring program to measure real-time voltage and other power quality parameters - the Utilities’ Plan was filed in June 2014.
|
•
|
Action Plan for improving efficiencies in the interconnection requirements studies - the Utilities’ Plan was filed in May 2014.
|
•
|
The Utilities are to file monthly reports providing details about interconnection requirements studies.
|
•
|
Integrated interconnection queue for each distribution circuit for each island grid - the Utilities’ integrated interconnection queue plan was filed in August 2014 and the integrated interconnection queues were implemented in January 2015.
|
(1)
|
new pricing provisions for future rooftop photovoltaic (PV) systems,
|
(2)
|
technical standards for advanced inverters,
|
(3)
|
new options for customers including battery-equipped rooftop PV systems,
|
(4)
|
a pilot time-of-use rate,
|
(5)
|
an improved method of calculating the amount of rooftop PV that can be safely installed, and
|
(6)
|
a streamlined and standardized PV application process.
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||
(dollars in thousands)
|
|
Notional amount
|
|
Fair value
|
|
Notional amount
|
|
Fair value
|
||||||||
Window forward contract
|
|
$
|
31,335
|
|
|
$
|
1,640
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Revenues
|
|
$
|
337,175
|
|
|
73,183
|
|
|
71,706
|
|
|
—
|
|
|
(12
|
)
|
|
$
|
482,052
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel oil
|
|
74,085
|
|
|
14,374
|
|
|
25,281
|
|
|
—
|
|
|
—
|
|
|
113,740
|
|
||
Purchased power
|
|
91,917
|
|
|
16,797
|
|
|
7,145
|
|
|
—
|
|
|
—
|
|
|
115,859
|
|
||
Other operation and maintenance
|
|
69,558
|
|
|
16,441
|
|
|
17,909
|
|
|
—
|
|
|
—
|
|
|
103,908
|
|
||
Depreciation
|
|
31,522
|
|
|
9,449
|
|
|
5,810
|
|
|
—
|
|
|
—
|
|
|
46,781
|
|
||
Taxes, other than income taxes
|
|
32,684
|
|
|
6,891
|
|
|
6,863
|
|
|
—
|
|
|
—
|
|
|
46,438
|
|
||
Total expenses
|
|
299,766
|
|
|
63,952
|
|
|
63,008
|
|
|
—
|
|
|
—
|
|
|
426,726
|
|
||
Operating income
|
|
37,409
|
|
|
9,231
|
|
|
8,698
|
|
|
—
|
|
|
(12
|
)
|
|
55,326
|
|
||
Allowance for equity funds used during construction
|
|
1,406
|
|
|
127
|
|
|
206
|
|
|
—
|
|
|
—
|
|
|
1,739
|
|
||
Equity in earnings of subsidiaries
|
|
7,929
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,929
|
)
|
|
—
|
|
||
Interest expense and other charges, net
|
|
(11,865
|
)
|
|
(2,965
|
)
|
|
(2,490
|
)
|
|
—
|
|
|
12
|
|
|
(17,308
|
)
|
||
Allowance for borrowed funds used during construction
|
|
529
|
|
|
49
|
|
|
84
|
|
|
—
|
|
|
—
|
|
|
662
|
|
||
Income before income taxes
|
|
35,408
|
|
|
6,442
|
|
|
6,498
|
|
|
—
|
|
|
(7,929
|
)
|
|
40,419
|
|
||
Income taxes
|
|
9,771
|
|
|
2,346
|
|
|
2,436
|
|
|
—
|
|
|
—
|
|
|
14,553
|
|
||
Net income
|
|
25,637
|
|
|
4,096
|
|
|
4,062
|
|
|
—
|
|
|
(7,929
|
)
|
|
25,866
|
|
||
Preferred stock dividends of subsidiaries
|
|
—
|
|
|
134
|
|
|
95
|
|
|
—
|
|
|
—
|
|
|
229
|
|
||
Net income attributable to Hawaiian Electric
|
|
25,637
|
|
|
3,962
|
|
|
3,967
|
|
|
—
|
|
|
(7,929
|
)
|
|
25,637
|
|
||
Preferred stock dividends of Hawaiian Electric
|
|
270
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
270
|
|
||
Net income for common stock
|
|
$
|
25,367
|
|
|
3,962
|
|
|
3,967
|
|
|
—
|
|
|
(7,929
|
)
|
|
$
|
25,367
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consolidating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Net income for common stock
|
|
$
|
25,367
|
|
|
3,962
|
|
|
3,967
|
|
|
—
|
|
|
(7,929
|
)
|
|
$
|
25,367
|
|
Other comprehensive income, net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Derivatives qualified as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Effective portion of foreign currency hedge net unrealized gain, net of taxes
|
|
1,002
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,002
|
|
||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Less: amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits
|
|
3,236
|
|
|
458
|
|
|
418
|
|
|
—
|
|
|
(876
|
)
|
|
3,236
|
|
||
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes
|
|
(3,222
|
)
|
|
(458
|
)
|
|
(418
|
)
|
|
—
|
|
|
876
|
|
|
(3,222
|
)
|
||
Other comprehensive income, net of taxes
|
|
1,016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,016
|
|
||
Comprehensive income attributable to common shareholder
|
|
$
|
26,383
|
|
|
3,962
|
|
|
3,967
|
|
|
—
|
|
|
(7,929
|
)
|
|
$
|
26,383
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Revenues
|
|
$
|
399,741
|
|
|
88,055
|
|
|
85,674
|
|
|
—
|
|
|
(28
|
)
|
|
$
|
573,442
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel oil
|
|
118,403
|
|
|
23,385
|
|
|
35,018
|
|
|
—
|
|
|
—
|
|
|
176,806
|
|
||
Purchased power
|
|
103,250
|
|
|
21,893
|
|
|
10,864
|
|
|
—
|
|
|
—
|
|
|
136,007
|
|
||
Other operation and maintenance
|
|
70,084
|
|
|
16,399
|
|
|
17,519
|
|
|
—
|
|
|
—
|
|
|
104,002
|
|
||
Depreciation
|
|
29,389
|
|
|
9,313
|
|
|
5,541
|
|
|
—
|
|
|
—
|
|
|
44,243
|
|
||
Taxes, other than income taxes
|
|
38,201
|
|
|
8,384
|
|
|
8,163
|
|
|
—
|
|
|
—
|
|
|
54,748
|
|
||
Total expenses
|
|
359,327
|
|
|
79,374
|
|
|
77,105
|
|
|
—
|
|
|
—
|
|
|
515,806
|
|
||
Operating income
|
|
40,414
|
|
|
8,681
|
|
|
8,569
|
|
|
—
|
|
|
(28
|
)
|
|
57,636
|
|
||
Allowance for equity funds used during construction
|
|
1,123
|
|
|
145
|
|
|
145
|
|
|
—
|
|
|
—
|
|
|
1,413
|
|
||
Equity in earnings of subsidiaries
|
|
7,692
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,692
|
)
|
|
—
|
|
||
Interest expense and other charges, net
|
|
(11,238
|
)
|
|
(2,680
|
)
|
|
(2,435
|
)
|
|
—
|
|
|
28
|
|
|
(16,325
|
)
|
||
Allowance for borrowed funds used during construction
|
|
388
|
|
|
53
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
499
|
|
||
Income before income taxes
|
|
38,379
|
|
|
6,199
|
|
|
6,337
|
|
|
—
|
|
|
(7,692
|
)
|
|
43,223
|
|
||
Income taxes
|
|
11,235
|
|
|
2,277
|
|
|
2,338
|
|
|
—
|
|
|
—
|
|
|
15,850
|
|
||
Net income
|
|
27,144
|
|
|
3,922
|
|
|
3,999
|
|
|
—
|
|
|
(7,692
|
)
|
|
27,373
|
|
||
Preferred stock dividends of subsidiaries
|
|
—
|
|
|
134
|
|
|
95
|
|
|
—
|
|
|
—
|
|
|
229
|
|
||
Net income attributable to Hawaiian Electric
|
|
27,144
|
|
|
3,788
|
|
|
3,904
|
|
|
—
|
|
|
(7,692
|
)
|
|
27,144
|
|
||
Preferred stock dividends of Hawaiian Electric
|
|
270
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
270
|
|
||
Net income for common stock
|
|
$
|
26,874
|
|
|
3,788
|
|
|
3,904
|
|
|
—
|
|
|
(7,692
|
)
|
|
$
|
26,874
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consolidating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Net income
for common stock
|
|
$
|
26,874
|
|
|
3,788
|
|
|
3,904
|
|
|
—
|
|
|
(7,692
|
)
|
|
$
|
26,874
|
|
Other comprehensive income, net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Less: amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits
|
|
4,933
|
|
|
651
|
|
|
600
|
|
|
—
|
|
|
(1,251
|
)
|
|
4,933
|
|
||
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes
|
|
(4,911
|
)
|
|
(651
|
)
|
|
(600
|
)
|
|
—
|
|
|
1,251
|
|
|
(4,911
|
)
|
||
Other comprehensive income, net of taxes
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||
Comprehensive income attributable to common shareholder
|
|
$
|
26,896
|
|
|
3,788
|
|
|
3,904
|
|
|
—
|
|
|
(7,692
|
)
|
|
$
|
26,896
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consoli-
dating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Utility property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Land
|
|
$
|
43,972
|
|
|
6,219
|
|
|
3,016
|
|
|
—
|
|
|
—
|
|
|
$
|
53,207
|
|
Plant and equipment
|
|
4,059,986
|
|
|
1,213,924
|
|
|
1,082,096
|
|
|
—
|
|
|
—
|
|
|
6,356,006
|
|
||
Less accumulated depreciation
|
|
(1,325,559
|
)
|
|
(490,883
|
)
|
|
(468,486
|
)
|
|
—
|
|
|
—
|
|
|
(2,284,928
|
)
|
||
Construction in progress
|
|
163,196
|
|
|
16,648
|
|
|
18,160
|
|
|
—
|
|
|
—
|
|
|
198,004
|
|
||
Utility property, plant and equipment, net
|
|
2,941,595
|
|
|
745,908
|
|
|
634,786
|
|
|
—
|
|
|
—
|
|
|
4,322,289
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation
|
|
5,762
|
|
|
82
|
|
|
1,531
|
|
|
—
|
|
|
—
|
|
|
7,375
|
|
||
Total property, plant and equipment, net
|
|
2,947,357
|
|
|
745,990
|
|
|
636,317
|
|
|
—
|
|
|
—
|
|
|
4,329,664
|
|
||
Investment in wholly owned subsidiaries, at equity
|
|
557,885
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(557,885
|
)
|
|
—
|
|
||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
29,307
|
|
|
12,070
|
|
|
7,564
|
|
|
101
|
|
|
—
|
|
|
49,042
|
|
||
Advances to affiliates
|
|
—
|
|
|
12,500
|
|
|
7,000
|
|
|
—
|
|
|
(19,500
|
)
|
|
—
|
|
||
Customer accounts receivable, net
|
|
69,744
|
|
|
18,399
|
|
|
15,596
|
|
|
—
|
|
|
—
|
|
|
103,739
|
|
||
Accrued unbilled revenues, net
|
|
60,022
|
|
|
12,857
|
|
|
12,488
|
|
|
—
|
|
|
—
|
|
|
85,367
|
|
||
Other accounts receivable, net
|
|
13,180
|
|
|
1,271
|
|
|
1,269
|
|
|
—
|
|
|
(8,947
|
)
|
|
6,773
|
|
||
Fuel oil stock, at average cost
|
|
34,553
|
|
|
5,688
|
|
|
8,163
|
|
|
—
|
|
|
—
|
|
|
48,404
|
|
||
Materials and supplies, at average cost
|
|
30,543
|
|
|
6,892
|
|
|
16,821
|
|
|
—
|
|
|
—
|
|
|
54,256
|
|
||
Prepayments and other
|
|
18,430
|
|
|
2,223
|
|
|
2,436
|
|
|
—
|
|
|
(1,286
|
)
|
|
21,803
|
|
||
Regulatory assets
|
|
80,918
|
|
|
5,563
|
|
|
2,711
|
|
|
—
|
|
|
—
|
|
|
89,192
|
|
||
Total current assets
|
|
336,697
|
|
|
77,463
|
|
|
74,048
|
|
|
101
|
|
|
(29,733
|
)
|
|
458,576
|
|
||
Other long-term assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Regulatory assets
|
|
586,873
|
|
|
112,052
|
|
|
100,291
|
|
|
—
|
|
|
—
|
|
|
799,216
|
|
||
Unamortized debt expense
|
|
304
|
|
|
60
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
420
|
|
||
Other
|
|
47,516
|
|
|
14,129
|
|
|
12,850
|
|
|
—
|
|
|
—
|
|
|
74,495
|
|
||
Total other long-term assets
|
|
634,693
|
|
|
126,241
|
|
|
113,197
|
|
|
—
|
|
|
—
|
|
|
874,131
|
|
||
Total assets
|
|
$
|
4,476,632
|
|
|
949,694
|
|
|
823,562
|
|
|
101
|
|
|
(587,618
|
)
|
|
$
|
5,662,371
|
|
Capitalization and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capitalization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock equity
|
|
$
|
1,731,304
|
|
|
293,358
|
|
|
264,426
|
|
|
101
|
|
|
(557,885
|
)
|
|
$
|
1,731,304
|
|
Cumulative preferred stock—not subject to mandatory redemption
|
|
22,293
|
|
|
7,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
34,293
|
|
||
Long-term debt, net
|
|
875,308
|
|
|
213,608
|
|
|
190,000
|
|
|
—
|
|
|
—
|
|
|
1,278,916
|
|
||
Total capitalization
|
|
2,628,905
|
|
|
513,966
|
|
|
459,426
|
|
|
101
|
|
|
(557,885
|
)
|
|
3,044,513
|
|
||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Short-term borrowings from non-affiliates
|
|
12,998
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,998
|
|
||
Short-term borrowings from affiliate
|
|
19,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,500
|
)
|
|
—
|
|
||
Accounts payable
|
|
73,021
|
|
|
12,391
|
|
|
9,678
|
|
|
—
|
|
|
—
|
|
|
95,090
|
|
||
Interest and preferred dividends payable
|
|
18,543
|
|
|
4,173
|
|
|
4,301
|
|
|
—
|
|
|
(2
|
)
|
|
27,015
|
|
||
Taxes accrued
|
|
87,303
|
|
|
22,787
|
|
|
20,435
|
|
|
—
|
|
|
(1,286
|
)
|
|
129,239
|
|
||
Regulatory liabilities
|
|
—
|
|
|
4,063
|
|
|
1,353
|
|
|
—
|
|
|
—
|
|
|
5,416
|
|
||
Other
|
|
62,307
|
|
|
9,019
|
|
|
12,625
|
|
|
—
|
|
|
(8,945
|
)
|
|
75,006
|
|
||
Total current liabilities
|
|
273,672
|
|
|
52,433
|
|
|
48,392
|
|
|
—
|
|
|
(29,733
|
)
|
|
344,764
|
|
||
Deferred credits and other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Deferred income taxes
|
|
477,446
|
|
|
102,039
|
|
|
90,353
|
|
|
—
|
|
|
288
|
|
|
670,126
|
|
||
Regulatory liabilities
|
|
259,907
|
|
|
87,514
|
|
|
30,956
|
|
|
—
|
|
|
—
|
|
|
378,377
|
|
||
Unamortized tax credits
|
|
55,446
|
|
|
15,555
|
|
|
14,901
|
|
|
—
|
|
|
—
|
|
|
85,902
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
|
405,024
|
|
|
69,103
|
|
|
73,390
|
|
|
—
|
|
|
—
|
|
|
547,517
|
|
||
Other
|
|
49,944
|
|
|
13,625
|
|
|
14,371
|
|
|
—
|
|
|
(288
|
)
|
|
77,652
|
|
||
Total deferred credits and other liabilities
|
|
1,247,767
|
|
|
287,836
|
|
|
223,971
|
|
|
—
|
|
|
—
|
|
|
1,759,574
|
|
||
Contributions in aid of construction
|
|
326,288
|
|
|
95,459
|
|
|
91,773
|
|
|
—
|
|
|
—
|
|
|
513,520
|
|
||
Total capitalization and liabilities
|
|
$
|
4,476,632
|
|
|
949,694
|
|
|
823,562
|
|
|
101
|
|
|
(587,618
|
)
|
|
$
|
5,662,371
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consoli-
dating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Utility property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Land
|
|
$
|
43,557
|
|
|
6,219
|
|
|
3,016
|
|
|
—
|
|
|
—
|
|
|
$
|
52,792
|
|
Plant and equipment
|
|
4,026,079
|
|
|
1,212,195
|
|
|
1,077,424
|
|
|
—
|
|
|
—
|
|
|
6,315,698
|
|
||
Less accumulated depreciation
|
|
(1,316,467
|
)
|
|
(486,028
|
)
|
|
(463,509
|
)
|
|
—
|
|
|
—
|
|
|
(2,266,004
|
)
|
||
Construction in progress
|
|
147,979
|
|
|
11,455
|
|
|
15,875
|
|
|
—
|
|
|
—
|
|
|
175,309
|
|
||
Utility property, plant and equipment, net
|
|
2,901,148
|
|
|
743,841
|
|
|
632,806
|
|
|
—
|
|
|
—
|
|
|
4,277,795
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation
|
|
5,659
|
|
|
82
|
|
|
1,531
|
|
|
—
|
|
|
—
|
|
|
7,272
|
|
||
Total property, plant and equipment, net
|
|
2,906,807
|
|
|
743,923
|
|
|
634,337
|
|
|
—
|
|
|
—
|
|
|
4,285,067
|
|
||
Investment in wholly owned subsidiaries,
at equity
|
|
556,528
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(556,528
|
)
|
|
—
|
|
||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
16,281
|
|
|
2,682
|
|
|
5,385
|
|
|
101
|
|
|
—
|
|
|
24,449
|
|
||
Advances to affiliates
|
|
—
|
|
|
15,500
|
|
|
7,500
|
|
|
—
|
|
|
(23,000
|
)
|
|
—
|
|
||
Customer accounts receivable, net
|
|
93,515
|
|
|
20,508
|
|
|
18,755
|
|
|
—
|
|
|
—
|
|
|
132,778
|
|
||
Accrued unbilled revenues, net
|
|
60,080
|
|
|
12,531
|
|
|
11,898
|
|
|
—
|
|
|
—
|
|
|
84,509
|
|
||
Other accounts receivable, net
|
|
16,421
|
|
|
1,275
|
|
|
1,674
|
|
|
—
|
|
|
(8,962
|
)
|
|
10,408
|
|
||
Fuel oil stock, at average cost
|
|
49,455
|
|
|
8,310
|
|
|
13,451
|
|
|
—
|
|
|
—
|
|
|
71,216
|
|
||
Materials and supplies, at average cost
|
|
30,921
|
|
|
6,865
|
|
|
16,643
|
|
|
—
|
|
|
—
|
|
|
54,429
|
|
||
Prepayments and other
|
|
25,505
|
|
|
9,091
|
|
|
2,295
|
|
|
—
|
|
|
(251
|
)
|
|
36,640
|
|
||
Regulatory assets
|
|
63,615
|
|
|
4,501
|
|
|
4,115
|
|
|
—
|
|
|
—
|
|
|
72,231
|
|
||
Total current assets
|
|
355,793
|
|
|
81,263
|
|
|
81,716
|
|
|
101
|
|
|
(32,213
|
)
|
|
486,660
|
|
||
Other long-term assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Regulatory assets
|
|
608,957
|
|
|
114,562
|
|
|
100,981
|
|
|
—
|
|
|
—
|
|
|
824,500
|
|
||
Unamortized debt expense
|
|
359
|
|
|
74
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
497
|
|
||
Other
|
|
47,731
|
|
|
14,693
|
|
|
13,062
|
|
|
—
|
|
|
—
|
|
|
75,486
|
|
||
Total other long-term assets
|
|
657,047
|
|
|
129,329
|
|
|
114,107
|
|
|
—
|
|
|
—
|
|
|
900,483
|
|
||
Total assets
|
|
$
|
4,476,175
|
|
|
954,515
|
|
|
830,160
|
|
|
101
|
|
|
(588,741
|
)
|
|
$
|
5,672,210
|
|
Capitalization and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capitalization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock equity
|
|
$
|
1,728,325
|
|
|
292,702
|
|
|
263,725
|
|
|
101
|
|
|
(556,528
|
)
|
|
$
|
1,728,325
|
|
Cumulative preferred stock—not subject to mandatory redemption
|
|
22,293
|
|
|
7,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
34,293
|
|
||
Long-term debt, net
|
|
875,163
|
|
|
213,580
|
|
|
189,959
|
|
|
—
|
|
|
—
|
|
|
1,278,702
|
|
||
Total capitalization
|
|
2,625,781
|
|
|
513,282
|
|
|
458,684
|
|
|
101
|
|
|
(556,528
|
)
|
|
3,041,320
|
|
||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Short-term borrowings from affiliate
|
|
23,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,000
|
)
|
|
—
|
|
||
Accounts payable
|
|
84,631
|
|
|
17,702
|
|
|
12,513
|
|
|
—
|
|
|
—
|
|
|
114,846
|
|
||
Interest and preferred dividends payable
|
|
15,747
|
|
|
4,255
|
|
|
3,113
|
|
|
—
|
|
|
(4
|
)
|
|
23,111
|
|
||
Taxes accrued
|
|
131,668
|
|
|
30,342
|
|
|
29,325
|
|
|
—
|
|
|
(251
|
)
|
|
191,084
|
|
||
Regulatory liabilities
|
|
—
|
|
|
1,030
|
|
|
1,174
|
|
|
—
|
|
|
—
|
|
|
2,204
|
|
||
Other
|
|
41,083
|
|
|
8,760
|
|
|
13,194
|
|
|
—
|
|
|
(8,958
|
)
|
|
54,079
|
|
||
Total current liabilities
|
|
296,129
|
|
|
62,089
|
|
|
59,319
|
|
|
—
|
|
|
(32,213
|
)
|
|
385,324
|
|
||
Deferred credits and other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Deferred income taxes
|
|
466,133
|
|
|
100,681
|
|
|
87,706
|
|
|
—
|
|
|
286
|
|
|
654,806
|
|
||
Regulatory liabilities
|
|
254,033
|
|
|
84,623
|
|
|
30,683
|
|
|
—
|
|
|
—
|
|
|
369,339
|
|
||
Unamortized tax credits
|
|
54,078
|
|
|
15,406
|
|
|
14,730
|
|
|
—
|
|
|
—
|
|
|
84,214
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
|
409,021
|
|
|
69,893
|
|
|
74,060
|
|
|
—
|
|
|
—
|
|
|
552,974
|
|
||
Other
|
|
51,273
|
|
|
13,243
|
|
|
13,916
|
|
|
—
|
|
|
(286
|
)
|
|
78,146
|
|
||
Total deferred credits and other liabilities
|
|
1,234,538
|
|
|
283,846
|
|
|
221,095
|
|
|
—
|
|
|
—
|
|
|
1,739,479
|
|
||
Contributions in aid of construction
|
|
319,727
|
|
|
95,298
|
|
|
91,062
|
|
|
—
|
|
|
—
|
|
|
506,087
|
|
||
Total capitalization and liabilities
|
|
$
|
4,476,175
|
|
|
954,515
|
|
|
830,160
|
|
|
101
|
|
|
(588,741
|
)
|
|
$
|
5,672,210
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consolidating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Balance, December 31, 2015
|
|
$
|
1,728,325
|
|
|
292,702
|
|
|
263,725
|
|
|
101
|
|
|
(556,528
|
)
|
|
$
|
1,728,325
|
|
Net income for common stock
|
|
25,367
|
|
|
3,962
|
|
|
3,967
|
|
|
—
|
|
|
(7,929
|
)
|
|
25,367
|
|
||
Other comprehensive income, net of taxes
|
|
1,016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,016
|
|
||
Common stock dividends
|
|
(23,400
|
)
|
|
(3,302
|
)
|
|
(3,265
|
)
|
|
—
|
|
|
6,567
|
|
|
(23,400
|
)
|
||
Common stock issuance expenses
|
|
(4
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
—
|
|
|
5
|
|
|
(4
|
)
|
||
Balance, March 31, 2016
|
|
$
|
1,731,304
|
|
|
293,358
|
|
|
264,426
|
|
|
101
|
|
|
(557,885
|
)
|
|
$
|
1,731,304
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consolidating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Balance, December 31, 2014
|
|
$
|
1,682,144
|
|
|
281,846
|
|
|
256,692
|
|
|
101
|
|
|
(538,639
|
)
|
|
$
|
1,682,144
|
|
Net income for common stock
|
|
26,874
|
|
|
3,788
|
|
|
3,904
|
|
|
—
|
|
|
(7,692
|
)
|
|
26,874
|
|
||
Other comprehensive income, net of taxes
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||
Common stock dividends
|
|
(22,601
|
)
|
|
(2,505
|
)
|
|
(3,794
|
)
|
|
—
|
|
|
6,299
|
|
|
(22,601
|
)
|
||
Common stock issuance expenses
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||
Balance, March 31, 2015
|
|
$
|
1,686,434
|
|
|
283,129
|
|
|
256,802
|
|
|
101
|
|
|
(540,032
|
)
|
|
$
|
1,686,434
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries
|
|
Consolidating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net income
|
|
$
|
25,637
|
|
|
4,096
|
|
|
4,062
|
|
|
—
|
|
|
(7,929
|
)
|
|
$
|
25,866
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Equity in earnings of subsidiaries
|
|
(7,954
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,929
|
|
|
(25
|
)
|
||
Common stock dividends received from subsidiaries
|
|
6,592
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,567
|
)
|
|
25
|
|
||
Depreciation of property, plant and equipment
|
|
31,522
|
|
|
9,449
|
|
|
5,810
|
|
|
—
|
|
|
—
|
|
|
46,781
|
|
||
Other amortization
|
|
1,045
|
|
|
268
|
|
|
461
|
|
|
—
|
|
|
—
|
|
|
1,774
|
|
||
Increase in deferred income taxes
|
|
9,764
|
|
|
1,277
|
|
|
2,517
|
|
|
—
|
|
|
—
|
|
|
13,558
|
|
||
Change in tax credits, net
|
|
1,386
|
|
|
154
|
|
|
162
|
|
|
—
|
|
|
—
|
|
|
1,702
|
|
||
Allowance for equity funds used during construction
|
|
(1,406
|
)
|
|
(127
|
)
|
|
(206
|
)
|
|
—
|
|
|
—
|
|
|
(1,739
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Decrease in accounts receivable
|
|
22,606
|
|
|
2,113
|
|
|
3,563
|
|
|
—
|
|
|
15
|
|
|
28,297
|
|
||
Decrease (increase) in accrued unbilled revenues
|
|
58
|
|
|
(326
|
)
|
|
(590
|
)
|
|
—
|
|
|
—
|
|
|
(858
|
)
|
||
Decrease in fuel oil stock
|
|
14,902
|
|
|
2,622
|
|
|
5,288
|
|
|
—
|
|
|
—
|
|
|
22,812
|
|
||
Decrease (increase) in materials and supplies
|
|
378
|
|
|
(27
|
)
|
|
(178
|
)
|
|
—
|
|
|
—
|
|
|
173
|
|
||
Decrease in regulatory assets
|
|
79
|
|
|
397
|
|
|
1,109
|
|
|
—
|
|
|
—
|
|
|
1,585
|
|
||
Increase in accounts payable
|
|
24,827
|
|
|
1,652
|
|
|
1,287
|
|
|
—
|
|
|
—
|
|
|
27,766
|
|
||
Change in prepaid and accrued income and utility revenue taxes
|
|
(31,916
|
)
|
|
(1,634
|
)
|
|
(8,466
|
)
|
|
—
|
|
|
(2
|
)
|
|
(42,018
|
)
|
||
Increase in defined benefit pension and other postretirement benefit plans liability
|
|
177
|
|
|
13
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
205
|
|
||
Change in other assets and liabilities
|
|
15,249
|
|
|
5,562
|
|
|
169
|
|
|
—
|
|
|
(13
|
)
|
|
20,967
|
|
||
Net cash provided by operating activities
|
|
112,946
|
|
|
25,489
|
|
|
15,003
|
|
|
—
|
|
|
(6,567
|
)
|
|
146,871
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capital expenditures
|
|
(97,363
|
)
|
|
(16,649
|
)
|
|
(11,171
|
)
|
|
—
|
|
|
—
|
|
|
(125,183
|
)
|
||
Contributions in aid of construction
|
|
11,585
|
|
|
969
|
|
|
1,207
|
|
|
—
|
|
|
—
|
|
|
13,761
|
|
||
Other
|
|
22
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
||
Advances from affiliates
|
|
—
|
|
|
3,000
|
|
|
500
|
|
|
—
|
|
|
(3,500
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
|
(85,756
|
)
|
|
(12,657
|
)
|
|
(9,464
|
)
|
|
—
|
|
|
(3,500
|
)
|
|
(111,377
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock dividends
|
|
(23,400
|
)
|
|
(3,302
|
)
|
|
(3,265
|
)
|
|
—
|
|
|
6,567
|
|
|
(23,400
|
)
|
||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
|
(270
|
)
|
|
(134
|
)
|
|
(95
|
)
|
|
—
|
|
|
—
|
|
|
(499
|
)
|
||
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
|
9,498
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,500
|
|
|
12,998
|
|
||
Other
|
|
8
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Net cash used in financing activities
|
|
(14,164
|
)
|
|
(3,444
|
)
|
|
(3,360
|
)
|
|
—
|
|
|
10,067
|
|
|
(10,901
|
)
|
||
Net increase in cash and cash equivalents
|
|
13,026
|
|
|
9,388
|
|
|
2,179
|
|
|
—
|
|
|
—
|
|
|
24,593
|
|
||
Cash and cash equivalents, beginning of period
|
|
16,281
|
|
|
2,682
|
|
|
5,385
|
|
|
101
|
|
|
—
|
|
|
24,449
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
29,307
|
|
|
12,070
|
|
|
7,564
|
|
|
101
|
|
|
—
|
|
|
$
|
49,042
|
|
(in thousands)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other
subsidiaries |
|
Consolidating
adjustments |
|
Hawaiian Electric
Consolidated |
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net income
|
|
$
|
27,144
|
|
|
3,922
|
|
|
3,999
|
|
|
—
|
|
|
(7,692
|
)
|
|
$
|
27,373
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Equity in earnings of subsidiaries
|
|
(7,717
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,692
|
|
|
(25
|
)
|
||
Common stock dividends received from subsidiaries
|
|
6,324
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,299
|
)
|
|
25
|
|
||
Depreciation of property, plant and equipment
|
|
29,389
|
|
|
9,313
|
|
|
5,541
|
|
|
—
|
|
|
—
|
|
|
44,243
|
|
||
Other amortization
|
|
590
|
|
|
500
|
|
|
608
|
|
|
—
|
|
|
—
|
|
|
1,698
|
|
||
Increase in deferred income taxes
|
|
12,048
|
|
|
719
|
|
|
2,365
|
|
|
—
|
|
|
—
|
|
|
15,132
|
|
||
Change in tax credits, net
|
|
2,246
|
|
|
200
|
|
|
130
|
|
|
—
|
|
|
—
|
|
|
2,576
|
|
||
Allowance for equity funds used during construction
|
|
(1,123
|
)
|
|
(145
|
)
|
|
(145
|
)
|
|
—
|
|
|
—
|
|
|
(1,413
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Decrease in accounts receivable
|
|
21,703
|
|
|
2,147
|
|
|
4,408
|
|
|
—
|
|
|
846
|
|
|
29,104
|
|
||
Decrease in accrued unbilled revenues
|
|
21,726
|
|
|
1,426
|
|
|
4,728
|
|
|
—
|
|
|
—
|
|
|
27,880
|
|
||
Decrease in fuel oil stock
|
|
8,654
|
|
|
5,817
|
|
|
6,260
|
|
|
—
|
|
|
—
|
|
|
20,731
|
|
||
Decrease (increase) in materials and supplies
|
|
(1,115
|
)
|
|
75
|
|
|
(317
|
)
|
|
—
|
|
|
—
|
|
|
(1,357
|
)
|
||
Increase in regulatory assets
|
|
(8,903
|
)
|
|
(1,522
|
)
|
|
(402
|
)
|
|
—
|
|
|
—
|
|
|
(10,827
|
)
|
||
Increase (decrease) in accounts payable
|
|
16,520
|
|
|
(2,548
|
)
|
|
1,408
|
|
|
—
|
|
|
—
|
|
|
15,380
|
|
||
Change in prepaid and accrued income and utility revenue taxes
|
|
(52,273
|
)
|
|
(1,807
|
)
|
|
(9,616
|
)
|
|
—
|
|
|
—
|
|
|
(63,696
|
)
|
||
Increase in defined benefit pension and other postretirement benefit plans liability
|
|
—
|
|
|
—
|
|
|
110
|
|
|
—
|
|
|
—
|
|
|
110
|
|
||
Change in other assets and liabilities
|
|
(8,614
|
)
|
|
203
|
|
|
(517
|
)
|
|
—
|
|
|
(846
|
)
|
|
(9,774
|
)
|
||
Net cash provided by operating activities
|
|
66,599
|
|
|
18,300
|
|
|
18,560
|
|
|
—
|
|
|
(6,299
|
)
|
|
97,160
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capital expenditures
|
|
(92,242
|
)
|
|
(14,902
|
)
|
|
(11,730
|
)
|
|
—
|
|
|
—
|
|
|
(118,874
|
)
|
||
Contributions in aid of construction
|
|
8,121
|
|
|
758
|
|
|
266
|
|
|
—
|
|
|
—
|
|
|
9,145
|
|
||
Other
|
|
175
|
|
|
26
|
|
|
42
|
|
|
—
|
|
|
—
|
|
|
243
|
|
||
Advances from (to) affiliates
|
|
3,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,500
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
|
(80,446
|
)
|
|
(14,118
|
)
|
|
(11,422
|
)
|
|
—
|
|
|
(3,500
|
)
|
|
(109,486
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Common stock dividends
|
|
(22,601
|
)
|
|
(2,505
|
)
|
|
(3,794
|
)
|
|
—
|
|
|
6,299
|
|
|
(22,601
|
)
|
||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
|
(270
|
)
|
|
(134
|
)
|
|
(95
|
)
|
|
—
|
|
|
—
|
|
|
(499
|
)
|
||
Net increase (decrease) in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
|
30,000
|
|
|
(500
|
)
|
|
(3,000
|
)
|
|
—
|
|
|
3,500
|
|
|
30,000
|
|
||
Other
|
|
(214
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(216
|
)
|
||
Net cash provided by (used in) financing activities
|
|
6,915
|
|
|
(3,140
|
)
|
|
(6,890
|
)
|
|
—
|
|
|
9,799
|
|
|
6,684
|
|
||
Net increase (decrease) in cash and cash equivalents
|
|
(6,932
|
)
|
|
1,042
|
|
|
248
|
|
|
—
|
|
|
—
|
|
|
(5,642
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
12,416
|
|
|
612
|
|
|
633
|
|
|
101
|
|
|
—
|
|
|
13,762
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
5,484
|
|
|
1,654
|
|
|
881
|
|
|
101
|
|
|
—
|
|
|
$
|
8,120
|
|
|
|
Three months ended March 31
|
||||||
(in thousands)
|
|
2016
|
|
2015
|
||||
Interest and dividend income
|
|
|
|
|
|
|
||
Interest and fees on loans
|
|
$
|
48,437
|
|
|
$
|
45,198
|
|
Interest and dividends on investment securities
|
|
5,017
|
|
|
3,051
|
|
||
Total interest and dividend income
|
|
53,454
|
|
|
48,249
|
|
||
Interest expense
|
|
|
|
|
|
|
||
Interest on deposit liabilities
|
|
1,592
|
|
|
1,260
|
|
||
Interest on other borrowings
|
|
1,485
|
|
|
1,466
|
|
||
Total interest expense
|
|
3,077
|
|
|
2,726
|
|
||
Net interest income
|
|
50,377
|
|
|
45,523
|
|
||
Provision for loan losses
|
|
4,766
|
|
|
614
|
|
||
Net interest income after provision for loan losses
|
|
45,611
|
|
|
44,909
|
|
||
Noninterest income
|
|
|
|
|
|
|
||
Fees from other financial services
|
|
5,499
|
|
|
5,355
|
|
||
Fee income on deposit liabilities
|
|
5,156
|
|
|
5,315
|
|
||
Fee income on other financial products
|
|
2,205
|
|
|
1,889
|
|
||
Bank-owned life insurance
|
|
998
|
|
|
983
|
|
||
Mortgage banking income
|
|
1,195
|
|
|
1,822
|
|
||
Other income, net
|
|
333
|
|
|
735
|
|
||
Total noninterest income
|
|
15,386
|
|
|
16,099
|
|
||
Noninterest expense
|
|
|
|
|
|
|
||
Compensation and employee benefits
|
|
22,434
|
|
|
21,766
|
|
||
Occupancy
|
|
4,138
|
|
|
4,113
|
|
||
Data processing
|
|
3,172
|
|
|
3,116
|
|
||
Services
|
|
2,911
|
|
|
2,341
|
|
||
Equipment
|
|
1,663
|
|
|
1,701
|
|
||
Office supplies, printing and postage
|
|
1,365
|
|
|
1,483
|
|
||
Marketing
|
|
861
|
|
|
841
|
|
||
FDIC insurance
|
|
884
|
|
|
811
|
|
||
Other expense
|
|
3,975
|
|
|
4,205
|
|
||
Total noninterest expense
|
|
41,403
|
|
|
40,377
|
|
||
Income before income taxes
|
|
19,594
|
|
|
20,631
|
|
||
Income taxes
|
|
6,921
|
|
|
7,156
|
|
||
Net income
|
|
$
|
12,673
|
|
|
$
|
13,475
|
|
|
|
Three months ended March 31
|
||||||
(in thousands)
|
|
2016
|
|
2015
|
||||
Net income
|
|
$
|
12,673
|
|
|
$
|
13,475
|
|
Other comprehensive income, net of taxes:
|
|
|
|
|
|
|
||
Net unrealized gains on available-for-sale investment securities:
|
|
|
|
|
|
|
||
Net unrealized gains on available-for-sale investment securities arising during the period, net of tax benefits of $4,905 and $2,278 for the respective periods
|
|
7,429
|
|
|
3,451
|
|
||
Retirement benefit plans:
|
|
|
|
|
|
|
||
Less: amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $137 and $259 for the respective periods
|
|
208
|
|
|
392
|
|
||
Other comprehensive income, net of taxes
|
|
7,637
|
|
|
3,843
|
|
||
Comprehensive income
|
|
$
|
20,310
|
|
|
$
|
17,318
|
|
(in thousands)
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and due from banks
|
|
|
|
|
$
|
110,200
|
|
|
|
|
|
$
|
127,201
|
|
||
Interest-bearing deposits
|
|
|
|
120,428
|
|
|
|
|
93,680
|
|
||||||
Available-for-sale investment securities, at fair value
|
|
|
|
|
906,295
|
|
|
|
|
|
820,648
|
|
||||
Stock in Federal Home Loan Bank, at cost
|
|
|
|
|
11,218
|
|
|
|
|
|
10,678
|
|
||||
Loans receivable held for investment
|
|
|
|
|
4,642,276
|
|
|
|
|
|
4,615,819
|
|
||||
Allowance for loan losses
|
|
|
|
|
(52,326
|
)
|
|
|
|
|
(50,038
|
)
|
||||
Net loans
|
|
|
|
|
4,589,950
|
|
|
|
|
|
4,565,781
|
|
||||
Loans held for sale, at lower of cost or fair value
|
|
|
|
|
7,900
|
|
|
|
|
|
4,631
|
|
||||
Other
|
|
|
|
|
312,333
|
|
|
|
|
|
309,946
|
|
||||
Goodwill
|
|
|
|
|
82,190
|
|
|
|
|
|
82,190
|
|
||||
Total assets
|
|
|
|
|
$
|
6,140,514
|
|
|
|
|
|
$
|
6,014,755
|
|
||
|
|
|
|
|
|
|
|
|
||||||||
Liabilities and shareholder’s equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposit liabilities—noninterest-bearing
|
|
|
|
|
$
|
1,541,402
|
|
|
|
|
|
$
|
1,520,374
|
|
||
Deposit liabilities—interest-bearing
|
|
|
|
|
3,598,530
|
|
|
|
|
|
3,504,880
|
|
||||
Other borrowings
|
|
|
|
|
329,081
|
|
|
|
|
|
328,582
|
|
||||
Other
|
|
|
|
|
99,605
|
|
|
|
|
|
101,029
|
|
||||
Total liabilities
|
|
|
|
|
5,568,618
|
|
|
|
|
|
5,454,865
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stock
|
|
|
|
|
1
|
|
|
|
|
|
1
|
|
||||
Additional paid in capital
|
|
|
|
341,192
|
|
|
|
|
340,496
|
|
||||||
Retained earnings
|
|
|
|
|
240,337
|
|
|
|
|
|
236,664
|
|
||||
Accumulated other comprehensive loss, net of tax benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized gains (losses) on securities
|
|
$
|
5,556
|
|
|
|
|
|
$
|
(1,872
|
)
|
|
|
|
||
Retirement benefit plans
|
|
(15,190
|
)
|
|
(9,634
|
)
|
|
(15,399
|
)
|
|
(17,271
|
)
|
||||
Total shareholder’s equity
|
|
|
|
|
571,896
|
|
|
|
|
|
559,890
|
|
||||
Total liabilities and shareholder’s equity
|
|
|
|
|
$
|
6,140,514
|
|
|
|
|
|
$
|
6,014,755
|
|
||
|
|
|
|
|
|
|
|
|
||||||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bank-owned life insurance
|
|
|
|
|
$
|
138,732
|
|
|
|
|
|
$
|
138,139
|
|
||
Premises and equipment, net
|
|
|
|
|
89,525
|
|
|
|
|
|
88,077
|
|
||||
Prepaid expenses
|
|
|
|
|
5,329
|
|
|
|
|
|
3,550
|
|
||||
Accrued interest receivable
|
|
|
|
|
15,723
|
|
|
|
|
|
15,192
|
|
||||
Mortgage-servicing rights
|
|
|
|
|
8,857
|
|
|
|
|
|
8,884
|
|
||||
Low-income housing equity investments
|
|
|
|
36,450
|
|
|
|
|
37,793
|
|
||||||
Real estate acquired in settlement of loans, net
|
|
|
|
|
797
|
|
|
|
|
|
1,030
|
|
||||
Other
|
|
|
|
|
16,920
|
|
|
|
|
|
17,281
|
|
||||
|
|
|
|
|
$
|
312,333
|
|
|
|
|
|
$
|
309,946
|
|
||
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued expenses
|
|
|
|
|
$
|
26,055
|
|
|
|
|
|
$
|
30,705
|
|
||
Federal and state income taxes payable
|
|
|
|
|
22,324
|
|
|
|
|
|
13,448
|
|
||||
Cashier’s checks
|
|
|
|
|
21,542
|
|
|
|
|
|
21,768
|
|
||||
Advance payments by borrowers
|
|
|
|
|
6,403
|
|
|
|
|
|
10,311
|
|
||||
Other
|
|
|
|
|
23,281
|
|
|
|
|
|
24,797
|
|
||||
|
|
|
|
|
$
|
99,605
|
|
|
|
|
|
$
|
101,029
|
|
|
|
Amortized cost
|
|
Gross unrealized gains
|
|
Gross unrealized losses
|
|
Estimated fair
value
|
|
|
|
Gross unrealized losses
|
||||||||||||||||||||||||||
|
|
|
|
|
|
Less than 12 months
|
|
12 months or longer
|
||||||||||||||||||||||||||||||
(dollars in thousands)
|
|
|
|
|
|
Number of issues
|
|
Fair
value
|
|
Amount
|
|
Number of issues
|
|
Fair
value
|
|
Amount
|
||||||||||||||||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
U.S. Treasury and federal agency obligations
|
|
$
|
215,716
|
|
|
$
|
3,078
|
|
|
$
|
(97
|
)
|
|
$
|
218,697
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2
|
|
|
$
|
9,511
|
|
|
$
|
(97
|
)
|
Mortgage-related securities- FNMA, FHLMC and GNMA
|
|
681,354
|
|
|
7,852
|
|
|
(1,608
|
)
|
|
687,598
|
|
|
9
|
|
|
67,217
|
|
|
(256
|
)
|
|
21
|
|
|
100,991
|
|
|
(1,352
|
)
|
||||||||
|
|
$
|
897,070
|
|
|
$
|
10,930
|
|
|
$
|
(1,705
|
)
|
|
$
|
906,295
|
|
|
9
|
|
|
$
|
67,217
|
|
|
$
|
(256
|
)
|
|
23
|
|
|
$
|
110,502
|
|
|
$
|
(1,449
|
)
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
U.S. Treasury and federal agency obligations
|
|
$
|
213,234
|
|
|
$
|
1,025
|
|
|
$
|
(1,300
|
)
|
|
$
|
212,959
|
|
|
13
|
|
|
$
|
83,053
|
|
|
$
|
(866
|
)
|
|
3
|
|
|
$
|
17,378
|
|
|
$
|
(434
|
)
|
Mortgage-related securities- FNMA, FHLMC and GNMA
|
|
610,522
|
|
|
3,564
|
|
|
(6,397
|
)
|
|
607,689
|
|
|
38
|
|
|
305,785
|
|
|
(2,866
|
)
|
|
25
|
|
|
125,817
|
|
|
(3,531
|
)
|
||||||||
|
|
$
|
823,756
|
|
|
$
|
4,589
|
|
|
$
|
(7,697
|
)
|
|
$
|
820,648
|
|
|
51
|
|
|
$
|
388,838
|
|
|
$
|
(3,732
|
)
|
|
28
|
|
|
$
|
143,195
|
|
|
$
|
(3,965
|
)
|
March 31, 2016
|
|
Amortized cost
|
|
Fair value
|
||||
(in thousands)
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
—
|
|
|
$
|
—
|
|
Due after one year through five years
|
|
111,299
|
|
|
112,991
|
|
||
Due after five years through ten years
|
|
66,398
|
|
|
67,413
|
|
||
Due after ten years
|
|
38,019
|
|
|
38,293
|
|
||
|
|
215,716
|
|
|
218,697
|
|
||
Mortgage-related securities-FNMA,FHLMC and GNMA
|
|
681,354
|
|
|
687,598
|
|
||
Total available-for-sale securities
|
|
$
|
897,070
|
|
|
$
|
906,295
|
|
(in thousands)
|
|
Residential
1-4 family
|
|
Commercial real
estate
|
|
Home
equity line of credit |
|
Residential land
|
|
Commercial construction
|
|
Residential construction
|
|
Commercial loans
|
|
Consumer loans
|
|
Unallocated
|
|
Total
|
||||||||||||||||||||
Three months ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance
|
|
$
|
4,186
|
|
|
$
|
11,342
|
|
|
$
|
7,260
|
|
|
$
|
1,671
|
|
|
$
|
4,461
|
|
|
$
|
13
|
|
|
$
|
17,208
|
|
|
$
|
3,897
|
|
|
$
|
—
|
|
|
$
|
50,038
|
|
Charge-offs
|
|
(45
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,343
|
)
|
|
(1,570
|
)
|
|
—
|
|
|
(2,958
|
)
|
||||||||||
Recoveries
|
|
17
|
|
|
—
|
|
|
15
|
|
|
103
|
|
|
—
|
|
|
—
|
|
|
135
|
|
|
210
|
|
|
—
|
|
|
480
|
|
||||||||||
Provision
|
|
435
|
|
|
464
|
|
|
(103
|
)
|
|
(34
|
)
|
|
1,703
|
|
|
(1
|
)
|
|
991
|
|
|
1,311
|
|
|
—
|
|
|
4,766
|
|
||||||||||
Ending balance
|
|
$
|
4,593
|
|
|
$
|
11,806
|
|
|
$
|
7,172
|
|
|
$
|
1,740
|
|
|
$
|
6,164
|
|
|
$
|
12
|
|
|
$
|
16,991
|
|
|
$
|
3,848
|
|
|
$
|
—
|
|
|
$
|
52,326
|
|
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Ending balance: individually evaluated for impairment
|
|
$
|
1,653
|
|
|
$
|
50
|
|
|
$
|
629
|
|
|
$
|
841
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,643
|
|
|
$
|
7
|
|
|
|
|
$
|
6,823
|
|
||
Ending balance: collectively evaluated for impairment
|
|
$
|
2,940
|
|
|
$
|
11,756
|
|
|
$
|
6,543
|
|
|
$
|
899
|
|
|
$
|
6,164
|
|
|
$
|
12
|
|
|
$
|
13,348
|
|
|
$
|
3,841
|
|
|
$
|
—
|
|
|
$
|
45,503
|
|
Financing Receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ending balance
|
|
$
|
2,055,020
|
|
|
$
|
703,661
|
|
|
$
|
846,467
|
|
|
$
|
18,940
|
|
|
$
|
130,487
|
|
|
$
|
16,241
|
|
|
$
|
740,596
|
|
|
$
|
136,244
|
|
|
|
|
$
|
4,647,656
|
|
||
Ending balance: individually evaluated for impairment
|
|
$
|
22,585
|
|
|
$
|
3,727
|
|
|
$
|
3,820
|
|
|
$
|
4,477
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,099
|
|
|
$
|
13
|
|
|
|
|
$
|
60,721
|
|
||
Ending balance: collectively evaluated for impairment
|
|
$
|
2,032,435
|
|
|
$
|
699,934
|
|
|
$
|
842,647
|
|
|
$
|
14,463
|
|
|
$
|
130,487
|
|
|
$
|
16,241
|
|
|
$
|
714,497
|
|
|
$
|
136,231
|
|
|
|
|
$
|
4,586,935
|
|
||
Three months ended March 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance
|
|
$
|
4,662
|
|
|
$
|
8,954
|
|
|
$
|
6,982
|
|
|
$
|
1,875
|
|
|
$
|
5,471
|
|
|
$
|
28
|
|
|
$
|
14,017
|
|
|
$
|
3,629
|
|
|
$
|
—
|
|
|
$
|
45,618
|
|
Charge-offs
|
|
(156
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
(942
|
)
|
|
—
|
|
|
(1,147
|
)
|
||||||||||
Recoveries
|
|
12
|
|
|
—
|
|
|
31
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
341
|
|
|
277
|
|
|
—
|
|
|
710
|
|
||||||||||
Provision
|
|
403
|
|
|
2,274
|
|
|
(487
|
)
|
|
362
|
|
|
(2,634
|
)
|
|
(7
|
)
|
|
268
|
|
|
435
|
|
|
—
|
|
|
614
|
|
||||||||||
Ending balance
|
|
$
|
4,921
|
|
|
$
|
11,228
|
|
|
$
|
6,523
|
|
|
$
|
2,286
|
|
|
$
|
2,837
|
|
|
$
|
21
|
|
|
$
|
14,580
|
|
|
$
|
3,399
|
|
|
$
|
—
|
|
|
$
|
45,795
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Ending balance: individually evaluated for impairment
|
|
$
|
1,453
|
|
|
$
|
—
|
|
|
$
|
442
|
|
|
$
|
891
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,527
|
|
|
$
|
7
|
|
|
|
|
$
|
6,320
|
|
||
Ending balance: collectively evaluated for impairment
|
|
$
|
2,733
|
|
|
$
|
11,342
|
|
|
$
|
6,818
|
|
|
$
|
780
|
|
|
$
|
4,461
|
|
|
$
|
13
|
|
|
$
|
13,681
|
|
|
$
|
3,890
|
|
|
$
|
—
|
|
|
$
|
43,718
|
|
Financing Receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ending balance
|
|
$
|
2,069,665
|
|
|
$
|
690,561
|
|
|
$
|
846,294
|
|
|
$
|
18,229
|
|
|
$
|
100,796
|
|
|
$
|
14,089
|
|
|
$
|
758,659
|
|
|
$
|
123,775
|
|
|
|
|
$
|
4,622,068
|
|
||
Ending balance: individually evaluated for impairment
|
|
$
|
22,457
|
|
|
$
|
1,188
|
|
|
$
|
3,225
|
|
|
$
|
5,683
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,119
|
|
|
$
|
13
|
|
|
|
|
$
|
53,685
|
|
||
Ending balance: collectively evaluated for impairment
|
|
$
|
2,047,208
|
|
|
$
|
689,373
|
|
|
$
|
843,069
|
|
|
$
|
12,546
|
|
|
$
|
100,796
|
|
|
$
|
14,089
|
|
|
$
|
737,540
|
|
|
$
|
123,762
|
|
|
|
|
$
|
4,568,383
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
(in thousands)
|
|
Commercial
real estate
|
|
Commercial
construction
|
|
Commercial
|
|
Commercial
real estate
|
|
Commercial
construction
|
|
Commercial
|
||||||||||||
Grade:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Pass
|
|
$
|
655,307
|
|
|
$
|
110,744
|
|
|
$
|
679,370
|
|
|
$
|
642,410
|
|
|
$
|
86,991
|
|
|
$
|
703,208
|
|
Special mention
|
|
16,096
|
|
|
—
|
|
|
12,662
|
|
|
7,710
|
|
|
13,805
|
|
|
7,029
|
|
||||||
Substandard
|
|
32,258
|
|
|
19,743
|
|
|
48,302
|
|
|
40,441
|
|
|
—
|
|
|
47,975
|
|
||||||
Doubtful
|
|
—
|
|
|
—
|
|
|
262
|
|
|
—
|
|
|
—
|
|
|
447
|
|
||||||
Loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
703,661
|
|
|
$
|
130,487
|
|
|
$
|
740,596
|
|
|
$
|
690,561
|
|
|
$
|
100,796
|
|
|
$
|
758,659
|
|
(in thousands)
|
|
30-59
days
past due
|
|
60-89
days
past due
|
|
Greater
than
90 days
|
|
Total
past due
|
|
Current
|
|
Total
financing
receivables
|
|
Recorded
investment>
90 days and
accruing
|
||||||||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
|
$
|
5,537
|
|
|
$
|
2,215
|
|
|
$
|
10,626
|
|
|
$
|
18,378
|
|
|
$
|
2,036,642
|
|
|
$
|
2,055,020
|
|
|
$
|
—
|
|
Commercial real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
703,661
|
|
|
703,661
|
|
|
—
|
|
|||||||
Home equity line of credit
|
|
1,218
|
|
|
508
|
|
|
340
|
|
|
2,066
|
|
|
844,401
|
|
|
846,467
|
|
|
—
|
|
|||||||
Residential land
|
|
—
|
|
|
—
|
|
|
148
|
|
|
148
|
|
|
18,792
|
|
|
18,940
|
|
|
—
|
|
|||||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
130,487
|
|
|
130,487
|
|
|
—
|
|
|||||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,241
|
|
|
16,241
|
|
|
—
|
|
|||||||
Commercial
|
|
391
|
|
|
984
|
|
|
308
|
|
|
1,683
|
|
|
738,913
|
|
|
740,596
|
|
|
—
|
|
|||||||
Consumer
|
|
1,249
|
|
|
579
|
|
|
446
|
|
|
2,274
|
|
|
133,970
|
|
|
136,244
|
|
|
—
|
|
|||||||
Total loans
|
|
$
|
8,395
|
|
|
$
|
4,286
|
|
|
$
|
11,868
|
|
|
$
|
24,549
|
|
|
$
|
4,623,107
|
|
|
$
|
4,647,656
|
|
|
$
|
—
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
|
$
|
4,967
|
|
|
$
|
3,289
|
|
|
$
|
11,503
|
|
|
$
|
19,759
|
|
|
$
|
2,049,906
|
|
|
$
|
2,069,665
|
|
|
$
|
—
|
|
Commercial real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
690,561
|
|
|
690,561
|
|
|
—
|
|
|||||||
Home equity line of credit
|
|
896
|
|
|
706
|
|
|
477
|
|
|
2,079
|
|
|
844,215
|
|
|
846,294
|
|
|
—
|
|
|||||||
Residential land
|
|
—
|
|
|
—
|
|
|
415
|
|
|
415
|
|
|
17,814
|
|
|
18,229
|
|
|
—
|
|
|||||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,796
|
|
|
100,796
|
|
|
—
|
|
|||||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,089
|
|
|
14,089
|
|
|
—
|
|
|||||||
Commercial
|
|
125
|
|
|
223
|
|
|
878
|
|
|
1,226
|
|
|
757,433
|
|
|
758,659
|
|
|
—
|
|
|||||||
Consumer
|
|
1,383
|
|
|
593
|
|
|
644
|
|
|
2,620
|
|
|
121,155
|
|
|
123,775
|
|
|
—
|
|
|||||||
Total loans
|
|
$
|
7,371
|
|
|
$
|
4,811
|
|
|
$
|
13,917
|
|
|
$
|
26,099
|
|
|
$
|
4,595,969
|
|
|
$
|
4,622,068
|
|
|
$
|
—
|
|
(in thousands)
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Real estate:
|
|
|
|
|
|
|
||
Residential 1-4 family
|
|
$
|
21,028
|
|
|
$
|
20,554
|
|
Commercial real estate
|
|
3,727
|
|
|
1,188
|
|
||
Home equity line of credit
|
|
2,801
|
|
|
2,254
|
|
||
Residential land
|
|
698
|
|
|
970
|
|
||
Commercial construction
|
|
—
|
|
|
—
|
|
||
Residential construction
|
|
—
|
|
|
—
|
|
||
Commercial
|
|
17,862
|
|
|
20,174
|
|
||
Consumer
|
|
797
|
|
|
895
|
|
||
Total nonaccrual loans
|
|
$
|
46,913
|
|
|
$
|
46,035
|
|
Real estate:
|
|
|
|
|
||||
Residential 1-4 family
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial real estate
|
|
—
|
|
|
—
|
|
||
Home equity line of credit
|
|
—
|
|
|
—
|
|
||
Residential land
|
|
—
|
|
|
—
|
|
||
Commercial construction
|
|
—
|
|
|
—
|
|
||
Residential construction
|
|
—
|
|
|
—
|
|
||
Commercial
|
|
—
|
|
|
—
|
|
||
Consumer
|
|
—
|
|
|
—
|
|
||
Total accruing loans 90 days or more past due
|
|
$
|
—
|
|
|
$
|
—
|
|
Real estate:
|
|
|
|
|
||||
Residential 1-4 family
|
|
$
|
13,803
|
|
|
$
|
13,962
|
|
Commercial real estate
|
|
—
|
|
|
—
|
|
||
Home equity line of credit
|
|
2,643
|
|
|
2,467
|
|
||
Residential land
|
|
3,779
|
|
|
4,713
|
|
||
Commercial construction
|
|
—
|
|
|
—
|
|
||
Residential construction
|
|
—
|
|
|
—
|
|
||
Commercial
|
|
8,400
|
|
|
1,104
|
|
||
Consumer
|
|
—
|
|
|
—
|
|
||
Total troubled debt restructured loans not included above
|
|
$
|
28,625
|
|
|
$
|
22,246
|
|
|
|
March 31, 2016
|
|
Three months ended March 31, 2016
|
||||||||||||||||
(in thousands)
|
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Related
Allowance
|
|
Average
recorded
investment
|
|
Interest
income
recognized*
|
||||||||||
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
|
$
|
10,502
|
|
|
$
|
11,606
|
|
|
$
|
—
|
|
|
$
|
10,392
|
|
|
$
|
51
|
|
Commercial real estate
|
|
1,166
|
|
|
1,429
|
|
|
—
|
|
|
1,173
|
|
|
—
|
|
|||||
Home equity line of credit
|
|
913
|
|
|
1,159
|
|
|
—
|
|
|
849
|
|
|
—
|
|
|||||
Residential land
|
|
1,489
|
|
|
2,185
|
|
|
—
|
|
|
1,590
|
|
|
16
|
|
|||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commercial
|
|
5,079
|
|
|
5,831
|
|
|
—
|
|
|
4,999
|
|
|
6
|
|
|||||
Consumer
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
$
|
19,149
|
|
|
$
|
22,210
|
|
|
$
|
—
|
|
|
$
|
19,003
|
|
|
$
|
73
|
|
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
|
$
|
12,083
|
|
|
$
|
12,286
|
|
|
$
|
1,653
|
|
|
$
|
12,018
|
|
|
$
|
122
|
|
Commercial real estate
|
|
2,561
|
|
|
2,570
|
|
|
50
|
|
|
854
|
|
|
—
|
|
|||||
Home equity line of credit
|
|
2,907
|
|
|
2,977
|
|
|
629
|
|
|
2,944
|
|
|
27
|
|
|||||
Residential land
|
|
2,988
|
|
|
2,988
|
|
|
841
|
|
|
3,378
|
|
|
67
|
|
|||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commercial
|
|
21,020
|
|
|
21,714
|
|
|
3,643
|
|
|
16,970
|
|
|
30
|
|
|||||
Consumer
|
|
13
|
|
|
13
|
|
|
7
|
|
|
13
|
|
|
—
|
|
|||||
|
|
$
|
41,572
|
|
|
$
|
42,548
|
|
|
$
|
6,823
|
|
|
$
|
36,177
|
|
|
$
|
246
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
|
$
|
22,585
|
|
|
$
|
23,892
|
|
|
$
|
1,653
|
|
|
$
|
22,410
|
|
|
$
|
173
|
|
Commercial real estate
|
|
3,727
|
|
|
3,999
|
|
|
50
|
|
|
2,027
|
|
|
—
|
|
|||||
Home equity line of credit
|
|
3,820
|
|
|
4,136
|
|
|
629
|
|
|
3,793
|
|
|
27
|
|
|||||
Residential land
|
|
4,477
|
|
|
5,173
|
|
|
841
|
|
|
4,968
|
|
|
83
|
|
|||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commercial
|
|
26,099
|
|
|
27,545
|
|
|
3,643
|
|
|
21,969
|
|
|
36
|
|
|||||
Consumer
|
|
13
|
|
|
13
|
|
|
7
|
|
|
13
|
|
|
—
|
|
|||||
|
|
$
|
60,721
|
|
|
$
|
64,758
|
|
|
$
|
6,823
|
|
|
$
|
55,180
|
|
|
$
|
319
|
|
|
|
December 31, 2015
|
|
Three months ended March 31, 2015
|
||||||||||||||||
(in thousands)
|
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Related
allowance
|
|
Average
recorded
investment
|
|
Interest
income
recognized*
|
||||||||||
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
|
$
|
10,596
|
|
|
$
|
11,805
|
|
|
$
|
—
|
|
|
$
|
11,552
|
|
|
$
|
89
|
|
Commercial real estate
|
|
1,188
|
|
|
1,436
|
|
|
—
|
|
|
555
|
|
|
—
|
|
|||||
Home equity line of credit
|
|
707
|
|
|
948
|
|
|
—
|
|
|
400
|
|
|
1
|
|
|||||
Residential land
|
|
1,644
|
|
|
2,412
|
|
|
—
|
|
|
2,637
|
|
|
52
|
|
|||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commercial
|
|
5,671
|
|
|
6,333
|
|
|
—
|
|
|
7,295
|
|
|
2
|
|
|||||
Consumer
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
$
|
19,806
|
|
|
$
|
22,934
|
|
|
$
|
—
|
|
|
$
|
22,439
|
|
|
$
|
144
|
|
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
|
$
|
11,861
|
|
|
$
|
11,914
|
|
|
$
|
1,453
|
|
|
$
|
11,510
|
|
|
$
|
126
|
|
Commercial real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,482
|
|
|
—
|
|
|||||
Home equity line of credit
|
|
2,518
|
|
|
2,579
|
|
|
442
|
|
|
626
|
|
|
6
|
|
|||||
Residential land
|
|
4,039
|
|
|
4,117
|
|
|
891
|
|
|
5,189
|
|
|
83
|
|
|||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commercial
|
|
15,448
|
|
|
16,073
|
|
|
3,527
|
|
|
4,982
|
|
|
50
|
|
|||||
Consumer
|
|
13
|
|
|
13
|
|
|
7
|
|
|
15
|
|
|
—
|
|
|||||
|
|
$
|
33,879
|
|
|
$
|
34,696
|
|
|
$
|
6,320
|
|
|
$
|
26,804
|
|
|
$
|
265
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
|
$
|
22,457
|
|
|
$
|
23,719
|
|
|
$
|
1,453
|
|
|
$
|
23,062
|
|
|
$
|
215
|
|
Commercial real estate
|
|
1,188
|
|
|
1,436
|
|
|
—
|
|
|
5,037
|
|
|
—
|
|
|||||
Home equity line of credit
|
|
3,225
|
|
|
3,527
|
|
|
442
|
|
|
1,026
|
|
|
7
|
|
|||||
Residential land
|
|
5,683
|
|
|
6,529
|
|
|
891
|
|
|
7,826
|
|
|
135
|
|
|||||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Commercial
|
|
21,119
|
|
|
22,406
|
|
|
3,527
|
|
|
12,277
|
|
|
52
|
|
|||||
Consumer
|
|
13
|
|
|
13
|
|
|
7
|
|
|
15
|
|
|
—
|
|
|||||
|
|
$
|
53,685
|
|
|
$
|
57,630
|
|
|
$
|
6,320
|
|
|
$
|
49,243
|
|
|
$
|
409
|
|
*
|
Since loan was classified as impaired.
|
|
|
Three months ended March 31, 2016
|
|||||||||||||
|
|
Number of contracts
|
|
Outstanding recorded
investment
1
|
|
Net increase in allowance
|
|||||||||
(dollars in thousands)
|
|
|
Pre-modification
|
|
Post-modification
|
|
(as of period end)
|
||||||||
Troubled debt restructurings
|
|
|
|
|
|
|
|
|
|
|
|
||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Residential 1-4 family
|
|
4
|
|
|
$
|
1,097
|
|
|
$
|
1,215
|
|
|
$
|
161
|
|
Commercial real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Home equity line of credit
|
|
10
|
|
|
669
|
|
|
669
|
|
|
74
|
|
|||
Residential land
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial
|
|
3
|
|
|
16,200
|
|
|
16,200
|
|
|
525
|
|
|||
Consumer
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
17
|
|
|
$
|
17,966
|
|
|
$
|
18,084
|
|
|
$
|
760
|
|
|
|
Three months ended March 31, 2015
|
|||||||||||||
|
|
Number of contracts
|
|
Outstanding recorded
investment 1 |
|
Net increase in allowance
|
|||||||||
(dollars in thousands)
|
|
|
Pre-modification
|
|
Post-modification
|
|
(as of period end)
|
||||||||
Troubled debt restructurings
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
|
5
|
|
|
$
|
877
|
|
|
$
|
895
|
|
|
$
|
47
|
|
Commercial real estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Home equity line of credit
|
|
9
|
|
|
429
|
|
|
429
|
|
|
55
|
|
|||
Residential land
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Residential construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial
|
|
1
|
|
|
92
|
|
|
92
|
|
|
—
|
|
|||
Consumer
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
15
|
|
|
$
|
1,398
|
|
|
$
|
1,416
|
|
|
$
|
102
|
|
1
|
The reported balances include loans that became TDR during the period, and were fully paid-off, charged-off, or sold prior to period end.
|
Three months ended March 31
|
|
2016
|
|
2015
|
||||||||
(dollars in thousands)
|
|
Number of contracts
|
|
Recorded investment
|
|
Number of contracts
|
|
Recorded investment
|
||||
Troubled debt restructurings that
subsequently defaulted
|
|
|
|
|
|
|
|
|
||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
||
Residential 1-4 family
|
|
1
|
|
$
|
488
|
|
|
—
|
|
$
|
—
|
|
Commercial real estate
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Home equity line of credit
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Residential land
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Commercial construction
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Residential construction
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Commercial
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
Consumer
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
|
|
1
|
|
$
|
488
|
|
|
—
|
|
$
|
—
|
|
(in thousands)
|
|
Gross
carrying amount 1 |
|
Accumulated amortization
1
|
|
Valuation allowance
|
|
Net
carrying amount |
||||||||
March 31, 2016
|
|
$
|
14,986
|
|
|
$
|
(6,129
|
)
|
|
$
|
—
|
|
|
$
|
8,857
|
|
December 31, 2015
|
|
14,531
|
|
|
(5,647
|
)
|
|
—
|
|
|
8,884
|
|
(in thousands)
|
2016
|
|
|
2015
|
|
||
Mortgage servicing rights
|
|
|
|
||||
Balance, January 1
|
$
|
8,884
|
|
|
$
|
11,749
|
|
Amount capitalized
|
455
|
|
|
906
|
|
||
Amortization
|
(482
|
)
|
|
(647
|
)
|
||
Other-than-temporary impairment
|
—
|
|
|
(2
|
)
|
||
Carrying amount before valuation allowance, March 31
|
8,857
|
|
|
12,006
|
|
||
Valuation allowance for mortgage servicing rights
|
|
|
|
||||
Balance, January 1
|
—
|
|
|
209
|
|
||
Provision (recovery)
|
—
|
|
|
(166
|
)
|
||
Other-than-temporary impairment
|
—
|
|
|
(2
|
)
|
||
Balance, March 31
|
—
|
|
|
41
|
|
||
Net carrying value of mortgage servicing rights
|
$
|
8,857
|
|
|
$
|
11,965
|
|
(dollars in thousands)
|
|
March 31, 2016
|
|
|
December 31, 2015
|
|
||
Unpaid principal balance
|
|
$
|
1,114,800
|
|
|
$
|
1,097,314
|
|
Weighted average note rate
|
|
4.04
|
%
|
|
4.05
|
%
|
||
Weighted average discount rate
|
|
9.6
|
%
|
|
9.6
|
%
|
||
Weighted average prepayment speed
|
|
10.8
|
%
|
|
9.3
|
%
|
(dollars in thousands)
|
|
March 31, 2016
|
|
|
December 31, 2015
|
|
||
Prepayment rate:
|
|
|
|
|
||||
25 basis points adverse rate change
|
|
$
|
(537
|
)
|
|
$
|
(561
|
)
|
50 basis points adverse rate change
|
|
(1,008
|
)
|
|
(1,104
|
)
|
||
Discount rate:
|
|
|
|
|
||||
25 basis points adverse rate change
|
|
(99
|
)
|
|
(111
|
)
|
||
50 basis points adverse rate change
|
|
(196
|
)
|
|
(220
|
)
|
(in millions)
|
|
Gross amount of
recognized liabilities
|
|
Gross amount offset in
the Balance Sheet
|
|
Net amount of liabilities presented
in the Balance Sheet
|
Repurchase agreements
|
|
|
|
|
|
|
March 31, 2016
|
|
$229
|
|
$—
|
|
$229
|
December 31, 2015
|
|
229
|
|
—
|
|
229
|
|
|
Gross amount not offset in the Balance Sheet
|
||||||||||
(in millions)
|
|
Liabilities presented
in the Balance Sheet
|
|
Financial
instruments
|
|
Cash
collateral
pledged
|
||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|||
Financial institution
|
|
$
|
50
|
|
|
$
|
57
|
|
|
$
|
—
|
|
Government entities
|
|
37
|
|
|
44
|
|
|
—
|
|
|||
Commercial account holders
|
|
142
|
|
|
161
|
|
|
—
|
|
|||
Total
|
|
$
|
229
|
|
|
$
|
262
|
|
|
$
|
—
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|||
Financial institution
|
|
$
|
50
|
|
|
$
|
56
|
|
|
$
|
—
|
|
Government entities
|
|
56
|
|
|
61
|
|
|
—
|
|
|||
Commercial account holders
|
|
123
|
|
|
144
|
|
|
—
|
|
|||
Total
|
|
$
|
229
|
|
|
$
|
261
|
|
|
$
|
—
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||
(in thousands)
|
|
Notional amount
|
|
Fair value
|
|
Notional amount
|
|
Fair value
|
||||||||
Interest rate lock commitments
|
|
$
|
32,135
|
|
|
$
|
655
|
|
|
$
|
22,241
|
|
|
$
|
384
|
|
Forward commitments
|
|
30,516
|
|
|
(192
|
)
|
|
23,644
|
|
|
(29
|
)
|
Derivative Financial Instruments Not Designated as Hedging Instruments
1
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||
(in thousands)
|
|
Asset derivatives
|
|
Liability
derivatives
|
|
Asset derivatives
|
|
Liability
derivatives |
||||||||
Interest rate lock commitments
|
|
$
|
655
|
|
|
$
|
—
|
|
|
$
|
384
|
|
|
$
|
—
|
|
Forward commitments
|
|
—
|
|
|
192
|
|
|
1
|
|
|
30
|
|
||||
|
|
$
|
655
|
|
|
$
|
192
|
|
|
$
|
385
|
|
|
$
|
30
|
|
Derivative Financial Instruments Not Designated as Hedging Instruments
|
Location of net gains (losses) recognized in
the Statement of Income
|
|
Three months ended March 31
|
||||||
(in thousands)
|
|
2016
|
|
2015
|
|||||
Interest rate lock commitments
|
Mortgage banking income
|
|
$
|
271
|
|
|
$
|
445
|
|
Forward commitments
|
Mortgage banking income
|
|
(163
|
)
|
|
(159
|
)
|
||
|
|
|
$
|
108
|
|
|
$
|
286
|
|
|
|
Three months ended March 31
|
||||||||||||||
|
|
Pension benefits
|
|
Other benefits
|
||||||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
HEI consolidated
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
15,391
|
|
|
$
|
16,466
|
|
|
$
|
836
|
|
|
$
|
869
|
|
Interest cost
|
|
20,277
|
|
|
19,139
|
|
|
2,474
|
|
|
2,235
|
|
||||
Expected return on plan assets
|
|
(24,664
|
)
|
|
(22,151
|
)
|
|
(3,052
|
)
|
|
(2,907
|
)
|
||||
Amortization of net prior service loss (gain)
|
|
(14
|
)
|
|
1
|
|
|
(448
|
)
|
|
(448
|
)
|
||||
Amortization of net actuarial loss
|
|
5,969
|
|
|
8,962
|
|
|
287
|
|
|
430
|
|
||||
Net periodic benefit cost
|
|
16,959
|
|
|
22,417
|
|
|
97
|
|
|
179
|
|
||||
Impact of PUC D&Os
|
|
(4,046
|
)
|
|
(9,513
|
)
|
|
189
|
|
|
98
|
|
||||
Net periodic benefit cost (adjusted for impact of PUC D&Os)
|
|
$
|
12,913
|
|
|
$
|
12,904
|
|
|
$
|
286
|
|
|
$
|
277
|
|
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
14,933
|
|
|
$
|
15,983
|
|
|
$
|
822
|
|
|
$
|
855
|
|
Interest cost
|
|
18,603
|
|
|
17,516
|
|
|
2,389
|
|
|
2,159
|
|
||||
Expected return on plan assets
|
|
(22,932
|
)
|
|
(20,632
|
)
|
|
(3,003
|
)
|
|
(2,859
|
)
|
||||
Amortization of net prior service loss (gain)
|
|
4
|
|
|
10
|
|
|
(451
|
)
|
|
(451
|
)
|
||||
Amortization of net actuarial loss
|
|
5,461
|
|
|
8,094
|
|
|
284
|
|
|
422
|
|
||||
Net periodic benefit cost
|
|
16,069
|
|
|
20,971
|
|
|
41
|
|
|
126
|
|
||||
Impact of PUC D&Os
|
|
(4,046
|
)
|
|
(9,513
|
)
|
|
189
|
|
|
98
|
|
||||
Net periodic benefit cost (adjusted for impact of PUC D&Os)
|
|
$
|
12,023
|
|
|
$
|
11,458
|
|
|
$
|
230
|
|
|
$
|
224
|
|
|
|
Three months ended March 31
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
HEI consolidated
|
|
|
|
|
||||
Share-based compensation expense
1
|
|
$
|
1.0
|
|
|
$
|
1.8
|
|
Income tax benefit
|
|
0.3
|
|
|
0.6
|
|
||
Hawaiian Electric consolidated
|
|
|
|
|
||||
Share-based compensation expense
1
|
|
0.3
|
|
|
0.5
|
|
||
Income tax benefit
|
|
0.1
|
|
|
0.2
|
|
1
|
For the three months ended March 31, 2016, the Company has not capitalized any share-based compensation.
$0.04 million
of this share-based compensation expense was capitalized in the
three
months ended
March 31, 2015
.
|
|
|
Three months ended
|
||
(dollars in thousands, except prices)
|
|
March 31, 2015
|
||
Shares underlying SARs exercised
|
|
80,000
|
|
|
Weighted-average price of shares exercised
|
|
$
|
26.18
|
|
Intrinsic value of shares exercised
1
|
|
502
|
|
|
Tax benefit realized for the deduction of exercises
|
|
162
|
|
|
|
Three months ended March 31
|
||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||
|
|
Shares
|
|
(1)
|
|
Shares
|
|
(1)
|
||||||||
Outstanding, beginning of period
|
|
210,634
|
|
|
$
|
28.82
|
|
|
261,235
|
|
|
$
|
25.77
|
|
||
Granted
|
|
94,282
|
|
|
29.90
|
|
|
84,294
|
|
|
33.74
|
|
||||
Vested
|
|
(78,379
|
)
|
|
27.92
|
|
|
(79,219
|
)
|
|
25.77
|
|
||||
Forfeited
|
|
—
|
|
|
—
|
|
|
(4,619
|
)
|
|
25.83
|
|
||||
Outstanding, end of period
|
|
226,537
|
|
|
$
|
29.59
|
|
|
261,691
|
|
|
$
|
28.33
|
|
||
Total weighted-average grant-date fair value of shares granted ($ millions)
|
|
$
|
2.8
|
|
|
|
|
$
|
2.8
|
|
|
|
(1)
|
Weighted-average grant-date fair value per share based on the average price of HEI common stock on the date of grant.
|
|
|
Three months ended March 31
|
||||||||||||
|
|
2016
|
|
2015
|
||||||||||
|
|
Shares
|
|
(1)
|
|
Shares
|
|
(1)
|
||||||
Outstanding, beginning of period
|
|
162,500
|
|
|
$
|
27.66
|
|
|
257,956
|
|
|
$
|
28.45
|
|
Granted (target level)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Vested (issued or unissued and cancelled)
|
|
(78,553
|
)
|
|
32.69
|
|
|
(75,915
|
)
|
|
30.71
|
|
||
Forfeited
|
|
—
|
|
|
—
|
|
|
(13,264
|
)
|
|
26.00
|
|
||
Outstanding, end of period
|
|
83,947
|
|
|
$
|
22.95
|
|
|
168,777
|
|
|
$
|
27.63
|
|
(1)
|
Weighted-average grant-date fair value per share determined using a Monte Carlo simulation model.
|
|
|
Three months ended March 31
|
||||||||||||
|
|
2016
|
|
2015
|
||||||||||
|
|
Shares
|
|
(1)
|
|
Shares
|
|
(1)
|
||||||
Outstanding, beginning of period
|
|
222,647
|
|
|
$
|
26.02
|
|
|
364,731
|
|
|
$
|
26.01
|
|
Granted (target level)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Vested (issued)
|
|
(109,097
|
)
|
|
26.89
|
|
|
(121,249
|
)
|
|
26.05
|
|
||
Forfeited
|
|
—
|
|
|
—
|
|
|
(13,263
|
)
|
|
25.72
|
|
||
Outstanding, end of period
|
|
113,550
|
|
|
$
|
25.18
|
|
|
230,219
|
|
|
$
|
26.00
|
|
(1)
|
Weighted-average grant-date fair value per share based on the average price of HEI common stock on the date of grant.
|
|
HEI Consolidated
|
|
Hawaiian Electric Consolidated
|
||||||||||||||||||||||||
(in thousands)
|
Net unrealized gains (losses) on securities
|
|
Unrealized gains (losses) on derivatives
|
|
Retirement benefit plans
|
|
AOCI
|
|
Unrealized gains on derivatives
|
|
Retirement benefit plans
|
|
AOCI
|
||||||||||||||
Balance, December 31, 2015
|
$
|
(1,872
|
)
|
|
$
|
(54
|
)
|
|
$
|
(24,336
|
)
|
|
$
|
(26,262
|
)
|
|
$
|
—
|
|
|
$
|
925
|
|
|
$
|
925
|
|
Current period other comprehensive income
|
7,428
|
|
|
1,056
|
|
|
316
|
|
|
8,800
|
|
|
1,002
|
|
|
14
|
|
|
1,016
|
|
|||||||
Balance, March 31, 2016
|
$
|
5,556
|
|
|
$
|
1,002
|
|
|
$
|
(24,020
|
)
|
|
$
|
(17,462
|
)
|
|
$
|
1,002
|
|
|
$
|
939
|
|
|
$
|
1,941
|
|
Balance, December 31, 2014
|
$
|
462
|
|
|
$
|
(289
|
)
|
|
$
|
(27,551
|
)
|
|
$
|
(27,378
|
)
|
|
$
|
—
|
|
|
$
|
45
|
|
|
$
|
45
|
|
Current period other comprehensive income
|
3,451
|
|
|
59
|
|
|
548
|
|
|
4,058
|
|
|
—
|
|
|
22
|
|
|
22
|
|
|||||||
Balance, March 31, 2015
|
$
|
3,913
|
|
|
$
|
(230
|
)
|
|
$
|
(27,003
|
)
|
|
$
|
(23,320
|
)
|
|
$
|
—
|
|
|
$
|
67
|
|
|
$
|
67
|
|
|
|
Amount reclassified from AOCI
|
|
|
||||||
|
|
Three months ended March 31
|
|
Affected line item in the
|
||||||
(in thousands)
|
|
2016
|
|
2015
|
|
Statement of Income
|
||||
HEI consolidated
|
|
|
|
|
|
|
||||
Derivatives qualified as cash flow hedges
|
|
|
|
|
|
|
|
|
||
Interest rate contracts (settled in 2011)
|
|
$
|
54
|
|
|
$
|
59
|
|
|
Interest expense
|
Retirement benefit plan items
|
|
|
|
|
|
|
|
|
||
Amortization of prior service credit and net losses recognized during the period in net periodic benefit cost
|
|
3,537
|
|
|
5,459
|
|
|
See Note 6 for additional details
|
||
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets
|
|
(3,222
|
)
|
|
(4,911
|
)
|
|
See Note 6 for additional details
|
||
Total reclassifications
|
|
$
|
369
|
|
|
$
|
607
|
|
|
|
Hawaiian Electric consolidated
|
|
|
|
|
|
|
||||
Retirement benefit plan items
|
|
|
|
|
|
|
|
|||
Amortization of prior service credit and net losses recognized during the period in net periodic benefit cost
|
|
$
|
3,236
|
|
|
$
|
4,933
|
|
|
See Note 6 for additional details
|
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets
|
|
(3,222
|
)
|
|
(4,911
|
)
|
|
See Note 6 for additional details
|
||
Total reclassifications
|
|
$
|
14
|
|
|
$
|
22
|
|
|
|
|
|
|
|
Estimated fair value
|
||||||||||||||||
|
|
Carrying or notional amount
|
|
Quoted
prices in
active markets
for identical assets
|
|
Significant
other observable
inputs
|
|
Significant
unobservable
inputs
|
|
|
||||||||||
(in thousands)
|
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
|||||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Money market funds
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
10
|
|
Available-for-sale investment securities
|
|
906,295
|
|
|
—
|
|
|
906,295
|
|
|
—
|
|
|
906,295
|
|
|||||
Stock in Federal Home Loan Bank
|
|
11,218
|
|
|
—
|
|
|
11,218
|
|
|
—
|
|
|
11,218
|
|
|||||
Loans receivable, net
|
|
4,597,850
|
|
|
—
|
|
|
7,938
|
|
|
4,837,177
|
|
|
4,845,115
|
|
|||||
Mortgage servicing rights
|
|
8,857
|
|
|
—
|
|
|
—
|
|
|
11,231
|
|
|
11,231
|
|
|||||
Bank-owned life insurance
|
|
138,732
|
|
|
—
|
|
|
138,732
|
|
|
—
|
|
|
138,732
|
|
|||||
Derivative assets
|
|
63,470
|
|
|
—
|
|
|
2,295
|
|
|
—
|
|
|
2,295
|
|
|||||
The Utilities’ derivative assets (included in amount above)
|
|
31,335
|
|
|
—
|
|
|
1,640
|
|
|
—
|
|
|
1,640
|
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Deposit liabilities
|
|
5,139,932
|
|
|
—
|
|
|
5,144,128
|
|
|
—
|
|
|
5,144,128
|
|
|||||
Short-term borrowings—other than bank
|
|
95,485
|
|
|
—
|
|
|
95,485
|
|
|
—
|
|
|
95,485
|
|
|||||
The Utilities’ short-term borrowings (included in amount above)
|
|
12,998
|
|
|
—
|
|
|
12,998
|
|
|
—
|
|
|
12,998
|
|
|||||
Other bank borrowings
|
|
329,081
|
|
|
—
|
|
|
333,743
|
|
|
—
|
|
|
333,743
|
|
|||||
Long-term debt, net—other than bank
|
|
1,578,618
|
|
|
—
|
|
|
1,704,567
|
|
|
—
|
|
|
1,704,567
|
|
|||||
The Utilities’ long-term debt, net (included in amount above)
|
|
1,278,916
|
|
|
—
|
|
|
1,397,598
|
|
|
—
|
|
|
1,397,598
|
|
|||||
Derivative liabilities
|
|
30,516
|
|
|
139
|
|
|
53
|
|
|
—
|
|
|
192
|
|
|||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Money market funds
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
10
|
|
Available-for-sale investment securities
|
|
820,648
|
|
|
—
|
|
|
820,648
|
|
|
—
|
|
|
820,648
|
|
|||||
Stock in Federal Home Loan Bank
|
|
10,678
|
|
|
—
|
|
|
10,678
|
|
|
—
|
|
|
10,678
|
|
|||||
Loans receivable, net
|
|
4,570,412
|
|
|
—
|
|
|
4,639
|
|
|
4,744,886
|
|
|
4,749,525
|
|
|||||
Mortgage servicing rights
|
|
8,884
|
|
|
—
|
|
|
—
|
|
|
11,790
|
|
|
11,790
|
|
|||||
Bank-owned life insurance
|
|
138,139
|
|
|
—
|
|
|
138,139
|
|
|
—
|
|
|
138,139
|
|
|||||
Derivative assets
|
|
22,616
|
|
|
—
|
|
|
385
|
|
|
—
|
|
|
385
|
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Deposit liabilities
|
|
5,025,254
|
|
|
—
|
|
|
5,024,500
|
|
|
—
|
|
|
5,024,500
|
|
|||||
Short-term borrowings—other than bank
|
|
103,063
|
|
|
—
|
|
|
103,063
|
|
|
—
|
|
|
103,063
|
|
|||||
Other bank borrowings
|
|
328,582
|
|
|
—
|
|
|
333,392
|
|
|
—
|
|
|
333,392
|
|
|||||
Long-term debt, net—other than bank*
|
|
1,578,368
|
|
|
—
|
|
|
1,669,087
|
|
|
—
|
|
|
1,669,087
|
|
|||||
The Utilities’ long-term debt, net (included in amount above)*
|
|
1,278,702
|
|
|
—
|
|
|
1,363,766
|
|
|
—
|
|
|
1,363,766
|
|
|||||
Derivative liabilities
|
|
23,269
|
|
|
15
|
|
|
15
|
|
|
—
|
|
|
30
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
|
Fair value measurements using
|
|
Fair value measurements using
|
||||||||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Money market funds (“other” segment)
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
Available-for-sale investment securities (bank segment)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Mortgage-related securities-FNMA, FHLMC and GNMA
|
|
$
|
—
|
|
|
$
|
687,598
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
607,689
|
|
|
$
|
—
|
|
U.S. Treasury and federal agency obligations
|
|
—
|
|
|
218,697
|
|
|
—
|
|
|
—
|
|
|
212,959
|
|
|
—
|
|
||||||
|
|
$
|
—
|
|
|
$
|
906,295
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
820,648
|
|
|
$
|
—
|
|
Derivative assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate lock commitments
1
|
|
$
|
—
|
|
|
$
|
655
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
384
|
|
|
$
|
—
|
|
Forward commitments
1
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||
Window forward contract
2
|
|
—
|
|
|
1,640
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
$
|
—
|
|
|
$
|
2,295
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
385
|
|
|
$
|
—
|
|
Derivative liabilities
1
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate lock commitments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward commitments
|
|
139
|
|
|
53
|
|
|
—
|
|
|
15
|
|
|
15
|
|
|
—
|
|
||||||
|
|
$
|
139
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
|
|
|
Fair value measurements
|
||||||||||||
(in thousands)
|
|
Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
March 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Loans
|
|
$
|
82
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
82
|
|
Real estate acquired in settlement of loans
|
|
797
|
|
|
—
|
|
|
—
|
|
|
797
|
|
||||
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Loans
|
|
178
|
|
|
—
|
|
|
—
|
|
|
178
|
|
||||
Real estate acquired in settlement of loans
|
|
1,030
|
|
|
—
|
|
|
—
|
|
|
1,030
|
|
|
|
|
|
|
|
|
|
Significant unobservable
input value
(1)
|
||||
($ in thousands)
|
|
Fair value
|
|
Valuation technique
|
|
Significant unobservable input
|
|
Range
|
|
Weighted
Average
|
||
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||
Residential loans
|
|
$
|
82
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling costs
|
|
42-66%
|
|
54%
|
Real estate acquired in settlement of loans
|
|
$
|
797
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling costs
|
|
100%
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||
Residential loans
|
|
$
|
50
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling costs
|
|
|
|
N/A (2)
|
Home equity lines of credit
|
|
128
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling costs
|
|
|
|
N/A (2)
|
|
Total loans
|
|
$
|
178
|
|
|
|
|
|
|
|
|
|
Real estate acquired in settlement of loans
|
|
$
|
1,030
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling cost
|
|
100%
|
|
100%
|
(2)
|
N/A - Not applicable. There is one loan in each fair value measurement type.
|
Three months ended March 31
|
|
2016
|
|
2015
|
||||
(in millions)
|
|
|
|
|
||||
Supplemental disclosures of cash flow information
|
|
|
|
|
|
|
||
HEI consolidated
|
|
|
|
|
||||
Interest paid to non-affiliates
|
|
$
|
20
|
|
|
$
|
21
|
|
Income taxes paid
|
|
1
|
|
|
1
|
|
||
Income taxes refunded
|
|
45
|
|
|
47
|
|
||
Hawaiian Electric consolidated
|
|
|
|
|
||||
Interest paid to non-affiliates
|
|
12
|
|
|
13
|
|
||
Income taxes refunded
|
|
20
|
|
|
6
|
|
||
Supplemental disclosures of noncash activities
|
|
|
|
|
|
|
||
HEI consolidated
|
|
|
|
|
||||
Common stock dividends reinvested in HEI common stock
1
|
|
6
|
|
|
—
|
|
||
Real estate transferred from property, plant and equipment to other assets held-for-sale (investing)
|
|
—
|
|
|
5
|
|
||
HEI consolidated and Hawaiian Electric consolidated
|
|
|
|
|
||||
Additions to electric utility property, plant and equipment - unpaid invoices and accruals (investing)
|
|
(48
|
)
|
|
(41
|
)
|
(in thousands)
|
As
previously
filed
|
Adjustment from adoption of ASU No. 2015-03
|
As
currently reported
|
|||||||
December 31, 2015
|
|
|
|
|||||||
HEI Consolidated Balance Sheet and Note 3 - Segment financial information (Total assets)
|
|
|
|
|||||||
Other assets
|
$
|
488,635
|
|
$
|
(8,178
|
)
|
$
|
480,457
|
|
|
Total assets and Total liabilities and shareholders’ equity
|
11,790,196
|
|
(8,178
|
)
|
11,782,018
|
|
||||
Long-term debt, net-other than bank
|
1,586,546
|
|
(8,178
|
)
|
1,578,368
|
|
||||
Total liabilities
|
9,828,263
|
|
(8,178
|
)
|
9,820,085
|
|
||||
Hawaiian Electric Consolidated Balance Sheet and Note 3 - Segment financial information (Total assets)
|
|
|
|
|||||||
Unamortized debt expense
|
8,341
|
|
(7,844
|
)
|
497
|
|
||||
Total other long-term assets
|
908,327
|
|
(7,844
|
)
|
900,483
|
|
||||
Total assets and Total capitalization and liabilities
|
5,680,054
|
|
(7,844
|
)
|
5,672,210
|
|
||||
Long-term debt, net
|
1,286,546
|
|
(7,844
|
)
|
1,278,702
|
|
||||
Total capitalization
|
3,049,164
|
|
(7,844
|
)
|
3,041,320
|
|
||||
Note 4 - Hawaiian Electric Consolidating Balance Sheet
|
|
|
|
|||||||
Hawaiian Electric (parent only)
|
|
|
|
|||||||
Unamortized debt expense
|
5,742
|
|
(5,383
|
)
|
359
|
|
||||
Total other long-term assets
|
662,430
|
|
(5,383
|
)
|
657,047
|
|
||||
Total assets and Total capitalization and liabilities
|
4,481,558
|
|
(5,383
|
)
|
4,476,175
|
|
||||
Long-term debt, net
|
880,546
|
|
(5,383
|
)
|
875,163
|
|
||||
Total capitalization
|
2,631,164
|
|
(5,383
|
)
|
2,625,781
|
|
||||
Hawaii Electric Light
|
|
|
|
|||||||
Unamortized debt expense
|
1,494
|
|
(1,420
|
)
|
74
|
|
||||
Total other long-term assets
|
130,749
|
|
(1,420
|
)
|
129,329
|
|
||||
Total assets and Total capitalization and liabilities
|
955,935
|
|
(1,420
|
)
|
954,515
|
|
||||
Long-term debt, net
|
215,000
|
|
(1,420
|
)
|
213,580
|
|
||||
Total capitalization
|
514,702
|
|
(1,420
|
)
|
513,282
|
|
||||
Maui Electric
|
|
|
|
|||||||
Unamortized debt expense
|
1,105
|
|
(1,041
|
)
|
64
|
|
||||
Total other long-term assets
|
115,148
|
|
(1,041
|
)
|
114,107
|
|
||||
Total assets and Total capitalization and liabilities
|
831,201
|
|
(1,041
|
)
|
830,160
|
|
||||
Long-term debt, net
|
191,000
|
|
(1,041
|
)
|
189,959
|
|
||||
Total capitalization
|
459,725
|
|
(1,041
|
)
|
458,684
|
|
•
|
Requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income.
|
•
|
Requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes.
|
•
|
Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables).
|
•
|
Eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost.
|
|
|
Three months ended March 31
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
HEI consolidated
|
|
|
|
|
||||
HMSA costs
|
|
$
|
7
|
|
|
$
|
7
|
|
HMSA expense*
|
|
5
|
|
|
5
|
|
||
HDS costs
|
|
1
|
|
|
1
|
|
||
HDS expense*
|
|
1
|
|
|
1
|
|
||
Hawaiian Electric consolidated
|
|
|
|
|
||||
HMSA costs
|
|
6
|
|
|
6
|
|
||
HMSA expense*
|
|
3
|
|
|
4
|
|
||
HDS costs
|
|
1
|
|
|
1
|
|
||
HDS expense*
|
|
—
|
|
|
—
|
|
(in thousands, except per
|
|
Three months ended March 31
|
|
%
|
|
|
|||||||
share amounts)
|
|
2016
|
|
2015
|
|
change
|
|
Primary reason(s)*
|
|||||
Revenues
|
|
$
|
550,960
|
|
|
$
|
637,862
|
|
|
(14
|
)
|
|
Decrease for the electric utility segment, partly offset by increase for the bank segment
|
Operating income
|
|
68,851
|
|
|
69,506
|
|
|
(1
|
)
|
|
Decreases for the electric utility and bank segments, partly offset by lower loss for the “other” segment
|
||
Net income for common stock
|
|
32,352
|
|
|
31,866
|
|
|
2
|
|
|
Lower net loss for the “other” segment, partly offset by lower net income for the electric utility and bank segments
|
||
Basic earnings per common share
|
|
$
|
0.30
|
|
|
$
|
0.31
|
|
|
(3
|
)
|
|
Higher net income, more than offset by the impact of higher weighted average shares outstanding
|
Weighted-average number of common shares outstanding
|
|
107,620
|
|
|
103,281
|
|
|
4
|
|
|
Issuances of shares under the HEI Dividend Reinvestment and Stock Purchase Plan and other plans
|
*
|
Also, see segment discussions which follow.
|
|
|
Three months ended March 31
|
|
|
||||||
(in thousands)
|
|
2016
|
|
2015
|
|
Primary reason(s)
|
||||
Revenues
|
|
$
|
68
|
|
|
$
|
72
|
|
|
|
Operating loss
|
|
(6,069
|
)
|
|
(8,761
|
)
|
|
Lower administrative and general expenses due to lower merger- and spin-off-related expenses
|
||
Net loss
|
|
(5,688
|
)
|
|
(8,483
|
)
|
|
Lower operating loss and higher tax benefits relative to the losses in first quarter 2016 (due to non-deductibility of certain merger- and spin-off-related expenses)
|
(dollars in millions)
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||
Short-term borrowings—other than bank
|
|
$
|
95
|
|
|
3
|
%
|
|
$
|
103
|
|
|
3
|
%
|
Long-term debt, net—other than bank
|
|
1,579
|
|
|
43
|
|
|
1,578
|
|
|
43
|
|
||
Preferred stock of subsidiaries
|
|
34
|
|
|
1
|
|
|
34
|
|
|
1
|
|
||
Common stock equity
|
|
1,942
|
|
|
53
|
|
|
1,928
|
|
|
53
|
|
||
|
|
$
|
3,650
|
|
|
100
|
%
|
|
$
|
3,643
|
|
|
100
|
%
|
|
|
Average balance
|
|
Balance
|
||||||||
(in millions)
|
|
Three months ended March 31, 2016
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||
Short-term borrowings
1
|
|
|
|
|
|
|
|
|
|
|||
Commercial paper
|
|
$
|
88
|
|
|
$
|
83
|
|
|
$
|
103
|
|
Line of credit draws
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Undrawn capacity under HEI’s line of credit facility
|
|
|
|
150
|
|
|
150
|
|
Three months ended March 31
|
|
Increase
|
|
|
|||||||||||
2016
|
|
2015
|
|
(decrease)
|
|
(dollars in millions, except per barrel amounts)
|
|||||||||
$
|
482
|
|
|
$
|
573
|
|
|
$
|
(91
|
)
|
|
|
Revenues.
Net decrease largely due to:
|
||
|
|
|
|
|
$
|
(81
|
)
|
|
lower fuel prices
|
||||||
|
|
|
|
|
(18
|
)
|
|
lower purchased power energy costs
|
|||||||
|
|
|
|
|
(6
|
)
|
|
lower KWH purchased
|
|||||||
|
|
|
|
|
13
|
|
|
higher KWH generated
|
|||||||
114
|
|
|
177
|
|
|
(63
|
)
|
|
|
Fuel oil expense.
Decrease largely due to lower fuel prices, partly offset by higher KWH generated
|
|||||
116
|
|
|
136
|
|
|
(20
|
)
|
|
|
Purchased power expense.
Decrease due to lower purchased power energy prices and lower KWH purchased
|
|||||
104
|
|
|
104
|
|
|
—
|
|
|
|
Operation and maintenance expenses
. Net decrease due to:
|
|||||
|
|
|
|
|
(1
|
)
|
|
2015 costs for damage to combined heat and power generating unit
|
|||||||
|
|
|
|
|
(1
|
)
|
|
storm repair costs incurred in 2015
|
|||||||
|
|
|
|
|
(1
|
)
|
|
bad debt reserve for one customer account in 2015
|
|||||||
|
|
|
|
|
3
|
|
|
higher PSIP costs incurred in 2016
|
|||||||
|
|
|
|
|
1
|
|
|
higher LNG consulting costs incurred in 2016
|
|||||||
93
|
|
|
99
|
|
|
(6
|
)
|
|
|
Other expenses.
Decrease in revenue taxes due to lower revenue, partly offset by higher depreciation expense for plant investments
|
|||||
55
|
|
|
58
|
|
|
(3
|
)
|
|
|
Operating income.
Decrease due to higher depreciation
|
|||||
25
|
|
|
27
|
|
|
(2
|
)
|
|
|
Net income for common stock.
Decrease due to lower operating income
|
|||||
|
|
|
|
|
|
|
|
||||||||
2,085
|
|
|
2,044
|
|
|
41
|
|
|
|
Kilowatthour sales (millions)
|
|||||
67.3
|
|
|
66.5
|
|
|
0.8
|
|
|
|
Wet-bulb temperature (Oahu average; degrees Fahrenheit)
|
|||||
884
|
|
|
795
|
|
|
89
|
|
|
|
Cooling degree days (Oahu)
|
|||||
$
|
53.99
|
|
|
$
|
86.60
|
|
|
$
|
(32.61
|
)
|
|
|
Average fuel oil cost per barrel
|
||
458,464
|
|
|
456,171
|
|
|
2,293
|
|
|
|
Customer accounts (end of period)
|
%
|
|
Return on rate base (RORB)*
|
|
ROACE**
|
|
Rate-making ROACE***
|
|||||||||||||||||||||
Twelve months ended March 31, 2016
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|||||||||
Utility returns
|
|
7.28
|
|
|
6.80
|
|
|
7.32
|
|
|
7.85
|
|
|
7.26
|
|
|
8.53
|
|
|
9.00
|
|
|
7.66
|
|
|
8.88
|
|
PUC-allowed returns
|
|
8.11
|
|
|
8.31
|
|
|
7.34
|
|
|
10.00
|
|
|
10.00
|
|
|
9.00
|
|
|
10.00
|
|
|
10.00
|
|
|
9.00
|
|
Difference
|
|
(0.83
|
)
|
|
(1.51
|
)
|
|
(0.02
|
)
|
|
(2.15
|
)
|
|
(2.74
|
)
|
|
(0.47
|
)
|
|
(1.00
|
)
|
|
(2.34
|
)
|
|
(0.12
|
)
|
•
|
the effective date of June 1 (rather than January 1) for the RAMs for Hawaii Electric Light and Maui Electric currently, and for Hawaiian Electric beginning in 2017,
|
•
|
the modification to the RBA interest rate per the PUC's February 2014 decision on decoupling (as discussed in Note
4
of the Consolidated Financial Statements), and
|
Test year
(dollars in millions)
|
|
Date
(filed/
implemented)
|
|
Amount
|
|
% over
rates in
effect
|
|
ROACE
(%)
|
|
RORB
(%)
|
|
Rate
base
|
|
Common
equity
%
|
|
Stipulated
agreement
reached with
Consumer
Advocate
|
||||||||
Hawaiian Electric
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2011
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Request
|
|
7/30/10
|
|
$
|
113.5
|
|
|
6.6
|
|
|
10.75
|
|
|
8.54
|
|
|
$
|
1,569
|
|
|
56.29
|
|
|
Yes
|
Interim increase
|
|
7/26/11
|
|
53.2
|
|
|
3.1
|
|
|
10.00
|
|
|
8.11
|
|
|
1,354
|
|
|
56.29
|
|
|
|
||
Interim increase (adjusted)
|
|
4/2/12
|
|
58.2
|
|
|
3.4
|
|
|
10.00
|
|
|
8.11
|
|
|
1,385
|
|
|
56.29
|
|
|
|
||
Interim increase (adjusted)
|
|
5/21/12
|
|
58.8
|
|
|
3.4
|
|
|
10.00
|
|
|
8.11
|
|
|
1,386
|
|
|
56.29
|
|
|
|
||
Final increase
|
|
9/1/12
|
|
58.1
|
|
|
3.4
|
|
|
10.00
|
|
|
8.11
|
|
|
1,386
|
|
|
56.29
|
|
|
|
||
2014
(2)
|
|
6/27/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Hawaii Electric Light
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2010
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Request
|
|
12/9/09
|
|
$
|
20.9
|
|
|
6.0
|
|
|
10.75
|
|
|
8.73
|
|
|
$
|
487
|
|
|
55.91
|
|
|
Yes
|
Interim increase
|
|
1/14/11
|
|
6.0
|
|
|
1.7
|
|
|
10.50
|
|
|
8.59
|
|
|
465
|
|
|
55.91
|
|
|
|
||
Interim increase (adjusted)
|
|
1/1/12
|
|
5.2
|
|
|
1.5
|
|
|
10.50
|
|
|
8.59
|
|
|
465
|
|
|
55.91
|
|
|
|
||
Final increase
|
|
4/9/12
|
|
4.5
|
|
|
1.3
|
|
|
10.00
|
|
|
8.31
|
|
|
465
|
|
|
55.91
|
|
|
|
||
2013
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Request
|
|
8/16/12
|
|
$
|
19.8
|
|
|
4.2
|
|
|
10.25
|
|
|
8.30
|
|
|
$
|
455
|
|
|
57.05
|
|
|
|
Closed
|
|
3/27/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2016
(5)
|
|
6/17/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Maui Electric
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2012
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Request
|
|
7/22/11
|
|
$
|
27.5
|
|
|
6.7
|
|
|
11.00
|
|
|
8.72
|
|
|
$
|
393
|
|
|
56.85
|
|
|
Yes
|
Interim increase
|
|
6/1/12
|
|
13.1
|
|
|
3.2
|
|
|
10.00
|
|
|
7.91
|
|
|
393
|
|
|
56.86
|
|
|
|
||
Final increase
|
|
8/1/13
|
|
5.3
|
|
|
1.3
|
|
|
9.00
|
|
|
7.34
|
|
|
393
|
|
|
56.86
|
|
|
|
||
2015
(7)
|
|
12/30/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Hawaii Electric Light’s request was primarily to cover investments for system upgrade projects, two major transmission line upgrades and increasing O&M expenses. On February 8, 2012, the PUC issued a final D&O, which reflected the approval of decoupling and cost-recovery mechanisms, and on February 21, 2012, Hawaii Electric Light filed its revised tariffs to reflect the increase in rates. On April 4, 2012, the PUC issued an order approving the revised tariffs, which became effective April 9, 2012. Hawaii Electric Light implemented the decoupling mechanism and began tracking the target revenues and actual recorded revenues via a revenue balancing account. Hawaii Electric Light also reset the heat rates and implemented heat rate deadbands and the PPAC, which provides a surcharge mechanism that more closely aligns cost recovery with costs incurred. The revised tariffs reflect a lower increase in annual revenue requirement compared to the interim increase due to factors that became effective concurrently with the revised tariffs (lower depreciation rates and lower ROACE) and therefore, no refund to customers was required.
|
(5)
|
See “Hawaii Electric Light 2016 test year rate case” below.
|
(7)
|
See “Maui Electric 2015 test year rate case” below.
|
•
|
In July 2011, the PUC directed Hawaiian Electric to submit a draft RFP for the PUC’s consideration for a competitive bidding process for 200 MW or more of renewable energy to be delivered to, or to be sited on, the island of Oahu. In October 2011, Hawaiian Electric filed a draft RFP with the PUC. In July 2013, the PUC issued orders related to the 200-MW RFP, ordering that Hawaiian Electric shall amend its current draft of the Oahu 200-MW RFP to remove references to the Lanai Wind Project, eliminate solicitations for an undersea transmission cable, and amend the draft RFP to reflect other guidance provided in the order.
|
•
|
In May 2012, Hawaii Electric Light signed a PPA, which the PUC approved in December 2013, with Hu Honua Bioenergy, LLC (Hu Honua) for 21.5 MW of renewable, dispatchable firm capacity fueled by locally grown biomass from a facility on the island of Hawaii. Per the terms of the PPA, the Hu Honua plant was scheduled to be in service in 2016. However, Hu Honua encountered construction delays, failed to meet its current obligations under the PPA and failed to provide adequate assurances that it could perform or had the financial means to perform. Hawaii Electric Light terminated the PPA on March 1, 2016. Hawaii Electric Light and Hu Honua are currently in discussions regarding the possibility of reinstating the PPA under revised terms and conditions.
|
•
|
In August 2012, the battery facility at a 30-MW Kahuku wind farm experienced a fire. After the interconnection infrastructure was rebuilt and voltage regulation equipment was installed, the facility came up to full output in January 2014 to perform control system acceptance testing, and energy is being purchased at a base rate until PUC approval of an amendment to the PPA. An application for PUC approval of an amendment to the PPA was filed in April 2014.
|
•
|
In August 2012, the PUC approved a waiver from the competitive bidding framework to allow Hawaiian Electric to negotiate with the U.S. Army for construction of a 50-MW utility-owned and operated firm, renewable and dispatchable generation facility at Schofield Barracks on the island of Oahu. In September 2015, the PUC approved Hawaiian Electric's application with conditions and limitations. See "Schofield Generating Station Project" in Note 4 of the Consolidated Financial Statements.
|
•
|
In May 2013, Maui Electric requested a waiver from the PUC Competitive Bidding Framework to conduct negotiations for a PPA for approximately 4.5 to 6.0 MW of firm power from a proposed Mahinahina Energy Park, LLC project, fueled with biofuel. The PUC approved the waiver request, provided that an executed PPA must be filed for PUC approval by February 2015. The parties did not execute a PPA by the PUC deadline. In September 2015, Anaergia Services, Maui Energy park and Maui Resource Recovery Facility filed a Petition for Declaratory Order, asking the PUC to find that Hawaiian Electric and Maui Electric have violated Hawaii state law and clear legislative policy by wrongfully refusing and failing to forward several bona fide requests for preferential rates for the purchase
|
•
|
In December 2013, Hawaiian Electric requested PUC approval for a waiver of the Na Pua Makani Power Partners, LLC’s (NPM) proposed 24-MW wind farm located in the Kahuku area on Oahu from the competitive bidding process and the PPA for Renewable As-Available Energy dated October 3, 2013 between Hawaiian Electric and NPM for the proposed 24-MW wind farm. In December 2014, the PUC approved both the waiver request and the PPA. Hawaiian Electric and NPM are currently working on an amendment to the PPA to incorporate the results of the interconnection requirements study.
|
•
|
In July 2015, the PUC issued orders approving (with conditions) four PPAs for a combined 137 MW of solar projects. In January 2016, two of the four approved projects (which are SunEdison projects) received notices of default from Hawaiian Electric for failure to meet guaranteed project milestones, and in February 2016 a third project (also a SunEdison project) received a notice of failure to meet a substantial commitment milestone. In January 2016, the PUC reopened proceedings for the three SunEdison projects. In February 2016, Hawaiian Electric filed project status reports with the PUC and terminated the three SunEdison PPAs totaling 109.6 MW. SunEdison maintains that the terminations were improper. SunEdison and the Consumer Advocate filed responses with the PUC regarding Hawaiian Electric’s status reports, and a technical conference was held on March 18, 2016. On April 12, 2016, the PUC issued a staff report concerning the termination of the PPAs. The staff report stated that Hawaiian Electric acted too hastily and without an in-depth analysis, however, the staff report acknowledged that it is within Hawaiian Electric’s management discretion to determine whether or not to terminate the PPAs. The PUC has not yet closed the dockets for these projects. On April 21, 2016, SunEdison filed for Chapter 11 bankruptcy protection.
|
•
|
In July 2015, Maui Electric signed two PPAs, with Kuia Solar and South Maui Renewable Resources (which subsequently assigned its PPA to SSA Solar of HI 3, LLC), each for a 2.87-MW solar facility. In February 2016, the PUC approved both PPAs, subject to certain conditions and modifications.
|
•
|
In September 2015, the PUC approved Hawaiian Electric’s 2-year biodiesel supply contract with Pacific Biodiesel Technologies, LLC to supply 2 million to 3 million gallons of biodiesel at CIP CT-1 and the Honolulu International Airport Emergency Power Facility beginning in November 2015. Renewable Energy Group has supplied 3 million to 7 million gallons per year to CIP CT-1 under its contract with Hawaiian Electric originally set to expire November 2015. The contract has been extended from November 2015 to November 2016 as a contingency supply contract with no volume purchase requirements.
|
•
|
In October 2015, the Utilities filed with the PUC a proposal for a Community-Based Renewable Energy program and tariff that would allow customers who cannot, or chose not to, take advantage of rooftop solar to receive the benefits of renewable energy to help offset their monthly electric bills and support clean energy for Hawaii. In November 2015, the PUC suspended the filing and opened a docket to investigate the matter.
|
•
|
The Utilities began accepting energy from feed-in tariff projects in 2011. As of
March 31, 2016
, there were 14 MW, 3 MW and 4 MW of installed feed-in tariff capacity from renewable energy technologies at Hawaiian Electric, Hawaii Electric Light and Maui Electric, respectively.
|
•
|
As of
March 31, 2016
, there were approximately 269 MW, 63 MW and 70 MW of installed NEM capacity from renewable energy technologies (mainly PV) at Hawaiian Electric, Hawaii Electric Light and Maui Electric, respectively.
|
•
|
The Utilities began accepting applications for Customer Grid Supply (CGS) and Customer Self Supply (CSS) in October 2015. As of March 31, 2016 there were 0 kW, 36 kW and 0 kW of installed CGS and CSS capacity from renewable energy technologies at Hawaiian Electric, Hawaii Electric Light and Maui Electric, respectively.
|
(dollars in millions)
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||
Short-term borrowings
|
|
$
|
13
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Long-term debt, net
|
|
1,279
|
|
|
42
|
|
|
1,279
|
|
|
42
|
|
||
Preferred stock
|
|
34
|
|
|
1
|
|
|
34
|
|
|
1
|
|
||
Common stock equity
|
|
1,731
|
|
|
57
|
|
|
1,728
|
|
|
57
|
|
||
|
|
$
|
3,057
|
|
|
100
|
%
|
|
$
|
3,041
|
|
|
100
|
%
|
|
|
Average balance
|
|
Balance
|
||||||||
(in millions)
|
|
Three months ended March 31, 2016
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||
Short-term borrowings
1
|
|
|
|
|
|
|
|
|
|
|||
Commercial paper
|
|
$
|
26
|
|
|
$
|
13
|
|
|
$
|
—
|
|
Line of credit draws
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Borrowings from HEI
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Undrawn capacity under line of credit facility
|
|
|
|
200
|
|
|
200
|
|
|
|
Three months ended March 31
|
|
Increase
|
|
|
||||||||
(in millions)
|
|
2016
|
|
2015
|
|
(decrease)
|
|
Primary reason(s)
|
||||||
Interest income
|
|
$
|
53
|
|
|
$
|
48
|
|
|
$
|
5
|
|
|
The increase in interest income was the result of higher average earning asset balances and an increase in yields on earning assets. ASB’s average loan portfolio balance for the three months ended March 31, 2016 increased by $188 million compared to the same period in 2015 as average commercial real estate, home equity lines of credit and residential balances increased by $174 million, $29 million, and $16 million, respectively. The growth in these loan portfolios was reflective of ASB’s portfolio mix target and loan growth strategy. The yield on earning assets increased by 11 basis points as the adjustable rate loans repriced upward with the increase in the prime rate at end of 2015, which resulted in an increase in loan portfolio yields of 10 basis points. The average investment securities portfolio balance increased by $305 million due to the purchase of investments with excess liquidity. The average FHLB stock balance decreased by $58 million as FHLB stock in excess of the required holdings was repurchased by the FHLB.
|
Noninterest income
|
|
16
|
|
|
16
|
|
|
—
|
|
|
Noninterest income was relatively flat for the three months ended March 31, 2016 compared to noninterest income for the three months ended March 31, 2015. Mortgage banking income decreased $0.6 million as result of a decrease in residential mortgage loan sales volume in first quarter of 2016 compared to the same period in 2015.
|
|||
Revenues
|
|
69
|
|
|
64
|
|
|
5
|
|
|
|
|||
Interest expense
|
|
3
|
|
|
3
|
|
|
—
|
|
|
Interest expense was relatively flat as growth in the deposit liabilities was primarily in low rate core deposits, which had a minimal impact to interest expense. Average deposit balances for the three months ended March 31, 2016 increased by $363 million compared to the same period in 2015 due to an increase in core deposits and term certificates of $297 million and $66 million, respectively. Other borrowings increased by $10 million primarily due to an increase in repurchase agreements. The interest-bearing liability rate increased by 2 basis points.
|
|||
Provision for loan losses
|
|
5
|
|
|
1
|
|
|
4
|
|
|
The provision for loan losses increased by $4.2 million primarily due to increased reserves for growth in the loan portfolio, additional loan loss reserves for the consumer loan portfolio and loan loss reserves for two commercial loans. Credit quality and trends continued to be stable and good, reflecting prudent credit risk management and a strong Hawaii economy. Delinquency rates have decreased from 0.60% at March 31, 2015 to 0.53% at March 31, 2016. The net charge-off ratio for the three months ended March 31, 2016 was 0.21% compared to a net charge-off ratio of 0.04% for the same period in 2015. The increase in net charge-offs were due to an increase in consumer loan portfolio charge-offs as a result of ASB’s strategic expansion of its unsecured consumer loan product offering with risk-based pricing and a loan charge-off related to one commercial borrower.
|
|||
Noninterest expense
|
|
41
|
|
|
40
|
|
|
1
|
|
|
Noninterest expense for the three months ended March 31, 2016 was $1.0 million higher than the noninterest expense for the same period in 2015 primarily due to higher compensation and benefit expenses and higher services expenses for ASB’s electronic banking platform project to enhance online and mobile services for both consumer and business customers.
|
|||
Expenses
|
|
49
|
|
|
44
|
|
|
5
|
|
|
|
|||
Operating income
|
|
20
|
|
|
21
|
|
|
(1
|
)
|
|
Higher net interest income was more than offset by higher provision loan losses, lower noninterest income and higher noninterest expense.
|
|||
Net income
|
|
13
|
|
|
13
|
|
|
—
|
|
|
|
|
|
Three months ended March 31
|
||||
(percent)
|
|
2016
|
|
2015
|
||
Return on average assets
|
|
0.84
|
|
|
0.96
|
|
Return on average equity
|
|
8.89
|
|
|
9.96
|
|
Net interest margin
|
|
3.62
|
|
|
3.52
|
|
Three months ended March 31
|
|
2016
|
|
2015
|
||||||||||||||||||
(dollars in thousands)
|
|
Average
balance |
|
Interest
income/
expense
|
|
Yield/
rate (%) |
|
Average
balance |
|
Interest
income/
expense |
|
Yield/
rate (%) |
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest-earning deposits
|
|
$
|
79,320
|
|
|
$
|
99
|
|
|
0.49
|
|
|
$
|
130,294
|
|
|
$
|
81
|
|
|
0.25
|
|
FHLB Stock
|
|
10,779
|
|
|
44
|
|
|
1.64
|
|
|
68,626
|
|
|
18
|
|
|
0.11
|
|
||||
Available-for-sale investment securities
|
|
854,401
|
|
|
4,874
|
|
|
2.28
|
|
|
549,125
|
|
|
2,952
|
|
|
2.15
|
|
||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential 1-4 family
|
|
2,076,525
|
|
|
22,320
|
|
|
4.30
|
|
|
2,060,485
|
|
|
22,661
|
|
|
4.40
|
|
||||
Commercial real estate
|
|
808,407
|
|
|
8,164
|
|
|
4.03
|
|
|
634,251
|
|
|
6,062
|
|
|
3.84
|
|
||||
Home equity line of credit
|
|
851,329
|
|
|
6,865
|
|
|
3.24
|
|
|
822,510
|
|
|
6,476
|
|
|
3.19
|
|
||||
Residential land
|
|
18,206
|
|
|
276
|
|
|
6.06
|
|
|
16,381
|
|
|
274
|
|
|
6.69
|
|
||||
Commercial
|
|
748,774
|
|
|
7,372
|
|
|
3.94
|
|
|
789,329
|
|
|
7,068
|
|
|
3.62
|
|
||||
Consumer
|
|
128,189
|
|
|
3,440
|
|
|
10.79
|
|
|
120,602
|
|
|
2,657
|
|
|
8.93
|
|
||||
Total loans
1,2
|
|
4,631,430
|
|
|
48,437
|
|
|
4.19
|
|
|
4,443,558
|
|
|
45,198
|
|
|
4.09
|
|
||||
Total interest-earning assets
1
|
|
5,575,930
|
|
|
53,454
|
|
|
3.84
|
|
|
5,191,603
|
|
|
48,249
|
|
|
3.73
|
|
||||
Allowance for loan losses
|
|
(50,449
|
)
|
|
|
|
|
|
|
|
(45,929
|
)
|
|
|
|
|
|
|
||||
Non-interest-earning assets
|
|
497,204
|
|
|
|
|
|
|
|
|
487,233
|
|
|
|
|
|
|
|
||||
Total assets
|
|
$
|
6,022,685
|
|
|
|
|
|
|
|
|
$
|
5,632,907
|
|
|
|
|
|
|
|
||
Liabilities and shareholder’s equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Savings
|
|
$
|
2,048,157
|
|
|
$
|
333
|
|
|
0.07
|
|
|
$
|
1,943,466
|
|
|
$
|
300
|
|
|
0.06
|
|
Interest-bearing checking
|
|
821,868
|
|
|
42
|
|
|
0.02
|
|
|
765,172
|
|
|
33
|
|
|
0.02
|
|
||||
Money market
|
|
167,244
|
|
|
53
|
|
|
0.13
|
|
|
163,737
|
|
|
50
|
|
|
0.12
|
|
||||
Time certificates
|
|
499,617
|
|
|
1,164
|
|
|
0.93
|
|
|
433,747
|
|
|
877
|
|
|
0.82
|
|
||||
Total interest-bearing deposits
|
|
3,536,886
|
|
|
1,592
|
|
|
0.18
|
|
|
3,306,122
|
|
|
1,260
|
|
|
0.15
|
|
||||
Advances from Federal Home Loan Bank
|
|
102,061
|
|
|
786
|
|
|
3.05
|
|
|
100,000
|
|
|
775
|
|
|
3.10
|
|
||||
Securities sold under agreements to repurchase
|
|
207,033
|
|
|
699
|
|
|
1.34
|
|
|
198,939
|
|
|
691
|
|
|
1.39
|
|
||||
Total interest-bearing liabilities
|
|
3,845,980
|
|
|
3,077
|
|
|
0.32
|
|
|
3,605,061
|
|
|
2,726
|
|
|
0.30
|
|
||||
Non-interest bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deposits
|
|
1,506,595
|
|
|
|
|
|
|
|
|
1,374,311
|
|
|
|
|
|
|
|
||||
Other
|
|
100,175
|
|
|
|
|
|
|
|
|
112,344
|
|
|
|
|
|
|
|
||||
Shareholder’s equity
|
|
569,935
|
|
|
|
|
|
|
|
|
541,191
|
|
|
|
|
|
|
|
||||
Total liabilities and shareholder’s equity
|
|
$
|
6,022,685
|
|
|
|
|
|
|
|
|
$
|
5,632,907
|
|
|
|
|
|
|
|
||
Net interest income
|
|
|
|
|
$
|
50,377
|
|
|
|
|
|
|
|
|
$
|
45,523
|
|
|
|
|
||
Net interest margin (%)
3
|
|
|
|
|
|
|
|
3.62
|
|
|
|
|
|
|
|
|
3.52
|
|
1
|
Includes loans held for sale, at lower of cost or fair value.
|
2
|
Includes loan fees of $0.8 million and $0.5 million for the three months ended
March 31, 2016
and 2015, respectively, together with interest accrued prior to suspension of interest accrual on nonaccrual loans.
|
3
|
Defined as net interest income as a percentage of average total interest-earning assets.
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||
(dollars in thousands)
|
|
Balance
|
|
% of total
|
|
Balance
|
|
% of total
|
||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Residential 1-4 family
|
|
$
|
2,055,020
|
|
|
44.2
|
|
|
$
|
2,069,665
|
|
|
44.8
|
|
Commercial real estate
|
|
703,661
|
|
|
15.1
|
|
|
690,561
|
|
|
14.9
|
|
||
Home equity line of credit
|
|
846,467
|
|
|
18.2
|
|
|
846,294
|
|
|
18.3
|
|
||
Residential land
|
|
18,940
|
|
|
0.4
|
|
|
18,229
|
|
|
0.4
|
|
||
Commercial construction
|
|
130,487
|
|
|
2.8
|
|
|
100,796
|
|
|
2.2
|
|
||
Residential construction
|
|
16,241
|
|
|
0.4
|
|
|
14,089
|
|
|
0.3
|
|
||
Total real estate, net
|
|
3,770,816
|
|
|
81.1
|
|
|
3,739,634
|
|
|
80.9
|
|
||
Commercial
|
|
740,596
|
|
|
16.0
|
|
|
758,659
|
|
|
16.4
|
|
||
Consumer
|
|
136,244
|
|
|
2.9
|
|
|
123,775
|
|
|
2.7
|
|
||
|
|
4,647,656
|
|
|
100.0
|
|
|
4,622,068
|
|
|
100.0
|
|
||
Less: Deferred fees and discounts
|
|
(5,380
|
)
|
|
|
|
|
(6,249
|
)
|
|
|
|
||
Allowance for loan losses
|
|
(52,326
|
)
|
|
|
|
|
(50,038
|
)
|
|
|
|
||
Total loans, net
|
|
$
|
4,589,950
|
|
|
|
|
|
$
|
4,565,781
|
|
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Outstanding balance (in thousands)
|
$
|
846,467
|
|
|
$
|
846,294
|
|
Percent of portfolio in first lien position
|
43.2
|
%
|
|
42.9
|
%
|
||
Net charge-off (recovery) ratio
|
(0.01
|
)%
|
|
0.02
|
%
|
||
Delinquency ratio
|
0.24
|
%
|
|
0.25
|
%
|
|
|
|
|
|
|
End of draw period – interest only
|
|
Current
|
||||||||||||||||
March 31, 2016
|
|
Total
|
|
Interest only
|
|
2016-2017
|
|
2018-2020
|
|
Thereafter
|
|
amortizing
|
||||||||||||
Outstanding balance (in thousands)
|
|
$
|
846,467
|
|
|
$
|
649,102
|
|
|
$
|
10,254
|
|
|
$
|
145,561
|
|
|
$
|
493,287
|
|
|
$
|
197,365
|
|
% of total
|
|
100
|
%
|
|
77
|
%
|
|
1
|
%
|
|
17
|
%
|
|
59
|
%
|
|
23
|
%
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||
(dollars in thousands)
|
|
Balance
|
|
% of total
|
|
Balance
|
|
% of total
|
||||||
U.S. Treasury and federal agency obligations
|
|
$
|
218,697
|
|
|
24
|
%
|
|
$
|
212,959
|
|
|
26
|
%
|
Mortgage-related securities — FNMA, FHLMC and GNMA
|
|
687,598
|
|
|
76
|
|
|
607,689
|
|
|
74
|
|
||
Total available-for-sale investment securities
|
|
$
|
906,295
|
|
|
100
|
%
|
|
$
|
820,648
|
|
|
100
|
%
|
|
|
Three months ended March 31
|
|
Year ended
December 31,
|
||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
2015
|
||||||
Allowance for loan losses, January 1
|
|
$
|
50,038
|
|
|
$
|
45,618
|
|
|
$
|
45,618
|
|
Provision for loan losses
|
|
4,766
|
|
|
614
|
|
|
6,275
|
|
|||
Less: net charge-offs
|
|
2,478
|
|
|
437
|
|
|
1,855
|
|
|||
Allowance for loan losses, end of period
|
|
$
|
52,326
|
|
|
$
|
45,795
|
|
|
$
|
50,038
|
|
Ratio of net charge-offs during the period to average loans outstanding (annualized)
|
|
0.21
|
%
|
|
0.04
|
%
|
|
0.04
|
%
|
Effective dates
|
|
1/1/2015
|
|
1/1/2016
|
|
1/1/2017
|
|
1/1/2018
|
|
1/1/2019
|
|||||
Capital conservation buffer
|
|
|
|
|
0.625
|
%
|
|
1.25
|
%
|
|
1.875
|
%
|
|
2.50
|
%
|
Common equity Tier-1 ratio + conservation buffer
|
|
4.50
|
%
|
|
5.125
|
%
|
|
5.75
|
%
|
|
6.375
|
%
|
|
7.00
|
%
|
Tier-1 capital ratio + conservation buffer
|
|
6.00
|
%
|
|
6.625
|
%
|
|
7.25
|
%
|
|
7.875
|
%
|
|
8.50
|
%
|
Total capital ratio + conservation buffer
|
|
8.00
|
%
|
|
8.625
|
%
|
|
9.25
|
%
|
|
9.875
|
%
|
|
10.50
|
%
|
Tier-1 leverage ratio
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
Countercyclical capital buffer — not applicable to ASB
|
|
|
|
|
0.625
|
%
|
|
1.25
|
%
|
|
1.875
|
%
|
|
2.50
|
%
|
(dollars in millions)
|
|
March 31, 2016
|
|
December 31, 2015
|
|
% change
|
||||
Total assets
|
|
$
|
6,141
|
|
|
$
|
6,015
|
|
|
2
|
Available-for-sale investment securities
|
|
906
|
|
|
821
|
|
|
10
|
||
Loans receivable held for investment, net
|
|
4,590
|
|
|
4,566
|
|
|
1
|
||
Deposit liabilities
|
|
5,140
|
|
|
5,025
|
|
|
2
|
||
Other bank borrowings
|
|
329
|
|
|
329
|
|
|
—
|
Change in interest rates
|
|
Change in NII
(gradual change in interest rates)
|
|
Change in EVE
(instantaneous change in interest rates)
|
||||||||
(basis points)
|
|
March 31, 2016
|
|
December 31, 2015
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
+300
|
|
2.0
|
%
|
|
1.6
|
%
|
|
(9.6
|
)%
|
|
(9.3
|
)%
|
+200
|
|
0.8
|
|
|
0.6
|
|
|
(5.2
|
)
|
|
(5.3
|
)
|
+100
|
|
—
|
|
|
(0.1
|
)
|
|
(1.5
|
)
|
|
(1.9
|
)
|
-100
|
|
(0.3
|
)
|
|
(0.5
|
)
|
|
(3.3
|
)
|
|
(1.2
|
)
|
|
Three months ended March 31
|
|
Years ended December 31
|
|||||||||||||||||
|
2016
|
|
2015
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|||||||
HEI and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding interest on ASB deposits
|
3.07
|
|
|
3.21
|
|
|
3.68
|
|
|
3.80
|
|
|
3.55
|
|
|
3.30
|
|
|
3.24
|
|
Including interest on ASB deposits
|
2.94
|
|
|
3.10
|
|
|
3.54
|
|
|
3.65
|
|
|
3.42
|
|
|
3.15
|
|
|
3.04
|
|
Hawaiian Electric and Subsidiaries
|
3.12
|
|
|
3.39
|
|
|
3.97
|
|
|
4.04
|
|
|
3.72
|
|
|
3.37
|
|
|
3.52
|
|
HEI Exhibit 12.1
|
|
Hawaiian Electric Industries, Inc. and Subsidiaries
Computation of ratio of earnings to fixed charges, three months ended March 31, 2016 and 2015 and years ended December 31, 2015, 2014, 2013, 2012 and 2011
|
|
|
|
HEI Exhibit 31.1
|
|
Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of Constance H. Lau (HEI Chief Executive Officer)
|
|
|
|
HEI Exhibit 31.2
|
|
Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of James A. Ajello (HEI Chief Financial Officer)
|
|
|
|
HEI Exhibit 32.1
|
|
HEI Certification Pursuant to 18 U.S.C. Section 1350
|
|
|
|
HEI Exhibit 101.INS
|
|
XBRL Instance Document
|
|
|
|
HEI Exhibit 101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
HEI Exhibit 101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
HEI Exhibit 101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
HEI Exhibit 101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
HEI Exhibit 101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
Hawaiian Electric Exhibit 10.1
|
|
Inter-island Supply Contract for Petroleum Fuels by and between Chevron U.S.A. Inc.
and Hawaiian Electric, Hawaii Electric Light and Maui Electric dated February 18, 2016 (confidential treatment has been requested for portions of this exhibit)
|
|
|
|
Hawaiian Electric Exhibit 10.2
|
|
Supply Contract for LSFO, Diesel and MATS Fuel by and between Hawaiian Electric and Chevron U.S.A. Inc. dated February 18, 2016 (confidential treatment has been requested for portions of this exhibit)
|
|
|
|
Hawaiian Electric Exhibit 10.3
|
|
Fuels Terminalling Agreement by and between Chevron U.S.A. Inc. and Hawaii Electric Light dated February 18, 2016 (confidential treatment has been requested for portions of this exhibit)
|
|
|
|
Hawaiian Electric Exhibit 12.2
|
|
Hawaiian Electric Company, Inc. and Subsidiaries
Computation of ratio of earnings to fixed charges, three months ended March 31, 2016 and 2015 and years ended December 31, 2015, 2014, 2013, 2012 and 2011
|
|
|
|
Hawaiian Electric Exhibit 31.3
|
|
Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of Alan M. Oshima (Hawaiian Electric Chief Executive Officer)
|
|
|
|
Hawaiian Electric Exhibit 31.4
|
|
Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of Tayne S. Y. Sekimura (Hawaiian Electric Chief Financial Officer)
|
|
|
|
Hawaiian Electric Exhibit 32.2
|
|
Hawaiian Electric Certification Pursuant to 18 U.S.C. Section 1350
|
HAWAIIAN ELECTRIC INDUSTRIES, INC.
|
|
HAWAIIAN ELECTRIC COMPANY, INC.
|
||
(Registrant)
|
|
(Registrant)
|
||
|
|
|
||
|
|
|
||
By
|
/s/ Constance H. Lau
|
|
By
|
/s/ Alan M. Oshima
|
|
Constance H. Lau
|
|
|
Alan M. Oshima
|
|
President and Chief Executive Officer
|
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer of HEI)
|
|
|
(Principal Executive Officer of Hawaiian Electric)
|
|
|
|
||
|
|
|
||
By
|
/s/ James A. Ajello
|
|
By
|
/s/ Tayne S. Y. Sekimura
|
|
James A. Ajello
|
|
|
Tayne S. Y. Sekimura
|
|
Executive Vice President and
|
|
|
Senior Vice President
|
|
Chief Financial Officer
|
|
|
and Chief Financial Officer
|
|
(Principal Financial and Accounting
|
|
|
(Principal Financial Officer of Hawaiian Electric)
|
|
Officer of HEI)
|
|
|
|
|
|
|
||
|
|
|
||
Date: May 4, 2016
|
|
Date: May 4, 2016
|
1.1.
|
“
Affiliate
”, except where otherwise expressly provided, means an entity controlling, controlled by or under common control with Seller or Hawaiian Electric, Hawaii Electric Light and Maui Electric, as the case may be. For the purpose of this definition “control” (including with correlative meanings, “controlling,” “controlled by,” and “under common control with”) means the power to direct or cause the direction of the management and policies of such entity, directly or indirectly, whether through the ownership of a majority of voting securities, by contract or otherwise, and it being understood and agreed that with respect to a corporation, limited liability company, or partnership, control shall mean direct or indirect ownership of equal to or more than 50% of the voting stock or limited liability company interest or general partnership interest or voting interest in any such corporation, limited liability company or partnership.
|
1.2.
|
“
API
” means American Petroleum Institute, a long-established petroleum industry organization.
|
1.3.
|
“
API Gravity
” refers to the API’s standard measurement of gravity for petroleum products using ASTM test method.
|
1.4.
|
“
ASTM
” means the American Society for Testing and Materials, a long-established source of standard testing and evaluation methods for petroleum.
|
1.5.
|
“
barrel
” means 42 American bulk gallons at 60 degrees Fahrenheit (“
DF
”).
|
1.6.
|
“
BTU
” and “
BTU content
” means British Thermal Unit and refers to the standard assessment of fuel’s gross heating value or gross heat content.
|
1.7.
|
“
business day
” shall mean Monday through Friday, except for a day as to which physical locations of commercial banks in Honolulu, Hawaii are closed for business to the public due to a scheduled holiday.
|
1.8.
|
“
Certificate of Quality
” or “
Quality Certificate
” means the formal document recording the Seller’s laboratory determination of quality and BTU content of a particular sample which represents a specific Delivery, said laboratory determinations having been performed in accordance with the test methods specified herein.
|
1.9.
|
“
Commission
” means the State of Hawaii Public Utilities Commission
|
1.10.
|
“
Commission Approval Order
” is defined in
Section 2.2
below.
|
1.11.
|
“
Consumer Advocate
” means the Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs of the State of Hawaii.
|
1.12.
|
“
Contract
” means this Inter-island Petroleum Fuel Supply Contract between Seller and the Companies.
|
1.13.
|
“
day
” or “
days
” means a calendar day of 24 hours.
|
1.14.
|
“
Deliver
”, “
Delivery
”, “
Deliveries
” or “
Delivered
” refers to the transfer of title or physical movement of Fuel by Seller and purchased by the Companies.
|
1.15.
|
“
DF
” means degrees Fahrenheit.
|
1.16.
|
“
Diesel
” means No. 2 Diesel produced in conformity with the provisions of the quality in the Specification which are set forth herein.
|
1.17.
|
“
DOT
” means the Department of Transportation of the State of Hawaii and/or of the United States, as the case may be.
|
1.18.
|
“
Effective Date
” is defined in
Section 2.3
below.
|
1.19.
|
“
ETA
” means estimated time of arrival.
|
1.20.
|
“
Extension
” means any Contract term in addition to and after the Original Term, each of which is a 12-Month period beginning January 1.
|
1.21.
|
“
Fuel
” means singularly and collectively IFO, Diesel and/or ULSD suitable for use as a fuel for utility power generation of the quality specifications described herein.
|
1.22.
|
“
gallon
” means a United States liquid gallon of 231 cubic inches at 60 DF.
|
1.23.
|
“
Governmental Authority
” means any international, foreign, federal, state, regional, county, or local Person having governmental or quasi-governmental authority or subdivision thereof, including recognized courts of Law, or other body or entity of competent jurisdiction.
|
1.24.
|
“
G.S.V.
” means gross standard volume in U.S. Barrels at 60 DF.
|
1.25.
|
“
IFO
” means Industrial Fuel Oil produced in conformity with the provisions of the quality in the Specifications which are set forth herein.
|
1.26.
|
[...]
|
1.27.
|
“
Independent Inspector
” means a qualified third-party petroleum inspection contractor acceptable to both Parties providing petroleum sampling, measurement and other services before, during and after a Delivery.
|
1.28.
|
“
Law
” means any law, decree, directive, judgment, order, decision, interpretation, enforcement, statute, code, ordinance, rule, regulation, treaty, convention, or any action, direction or intervention or other requirement of any Governmental Authority.
|
1.29.
|
“
month
” means a calendar month.
|
1.30.
|
“
Nominated
” and “Nomination” means the amount of Fuel specified by the Companies to be sold and Delivered by Seller and purchased and received by the Companies for a specified Month.
|
1.31.
|
“
Original Term
” is defined in
Section 2.1
below.
|
1.32.
|
“
Party
” and “
Parties
” are defined in the first paragraph above
|
1.33.
|
“
Receiving Facility
” means any of the Companies’ generating facilities, storage facilities and/or other facilities used to receive, transport, store, or otherwise handle Fuel located on the islands of Oahu, Hawaii, Maui, or Molokai as designated by the Companies.
|
1.34.
|
“
Refinery
” means Seller’s oil refining, and related facilities located in the Barbers Point area of Oahu, in the Campbell Estate Industrial Park, Kapolei, Hawaii.
|
1.35.
|
“
Specification
” means the fuel quality specifications applicable to Fuel as set forth herein and described in
Exhibit A
.
|
1.36.
|
“
Tank Final Sample
” is defined in
Section 6.5
below.
|
1.37.
|
“
Term
” means the Original Term and any Extension(s).
|
1.38.
|
“
Terminalling Agreement
” means that certain Fuels Terminalling Agreement, dated February 18, 2016, by and between Chevron U.S.A. Inc. (through its division Chevron Products Company) and Hawaii Electric Light Company, Inc.
|
1.39.
|
“
ULSD
” means Ultra-Low Sulfur Diesel produced in conformity with the provisions of the quality in the Specification which are set forth herein.
|
1.40.
|
“
USD
” means currency denominated in U.S. dollars.
|
1.41.
|
“
Year
” means a calendar year.
|
1.
|
Liftings from truck rack:
Seller agrees to Deliver and the Companies agree to receive ULSD into the Companies’ Nominated tanker trucks from Seller’s nominated terminal truck rack as listed in
Exhibit B
at a minimum Delivery rate of 190 barrels per hour.
|
2.
|
Deliveries by Seller to Company Sites
: Seller agrees to Deliver and the Companies agree to receive Diesel Delivered by pipeline, or Diesel and/or ULSD Delivered by Seller’s barge to Companies designated storage as listed in
Exhibit B
, provided however that the size and capability of Seller’s delivery equipment is satisfactory to the Companies. […]
|
(i)
|
For Truck Rack Deliveries, Seller shall own, lease or have the right to use facilities sufficient to meet Seller’s Delivery obligations under this Contract.
|
(ii)
|
For Barge Deliveries, Seller and Companies shall own, lease, or have the right to use vessels/barges to meet each Party’s Delivery or receipt obligations under this Contract. Each nominated vessel employed to Deliver or receive Fuel shall comply with all regulations, pier and terminal operator’s standards for vessel acceptance quality, pollution mitigation, required pollution liability, Protection and Indemnity Insurance (“P&I”) and other insurance coverages, pier operators Operations Manual and accept liability for dues and other charges on said vessel.
|
(iii)
|
[…]
|
HAWAIIAN ELECTRIC COMPANY, INC.
|
CHEVRON PRODUCTS COMPANY
,
|
Item
|
|
Specifications
|
|
ASTM Test Method
|
Gravity @ 60° F, API
|
|
6.5 min.
|
|
D1298 or D4052-86
|
Flash, °F
|
|
150 min.
|
|
D93, D6450
|
Viscosity, SSF @ 122°F
|
|
179 min., 226 max.
|
|
D445/D2161
|
Pour Point, °F
|
|
55 max.
|
|
D97
|
Sulfur, % Wt.
|
|
2.00 max.
|
|
D1552, D2622 or D4294
|
Sediment & Water, % Vol.
|
|
0.5 max.
|
|
D1796
|
BTU content *, MM BTU/BBL
|
|
6.0
|
|
D240
|
Vanadium **, PPM wt.
|
|
100
|
|
D5863
|
Nitrogen ***, PPM wt.
|
|
6500
|
|
D5762 or D4629
|
|
|
|
|
|
* Typical Value is 6.3 MM BTU/bbl, value is typical; it is not guaranteed.
|
||||
** Typical Value is shown, value is not a specification limit.
|
||||
*** Typical Value is shown, value is not a specification limit.
|
Item
|
|
Units
|
|
Specification Limits
|
|
Test Method
|
Gravity @ 60°F
|
|
°API, Specific
|
|
30.0 min., .88 min.
|
|
D1298 or D4052-86
|
Viscosity @ 100 DF
|
|
SSU
|
|
32.3 - 40.0
|
|
D445, D2161
|
BTU content *
|
|
MM BTU/BBL
|
|
5.84
|
|
Calculated or D240
|
Heat Value, Net
|
|
MM BTU/BBL
|
|
Report
|
|
Calculated or D240
|
Flash Point, PM
|
|
°F
|
|
150 min.
|
|
D93, D6450
|
Pour Point *
|
|
°F
|
|
35
|
|
D97
|
Ash
|
|
PPM, wt.
|
|
100 max.
|
|
D482
|
Cetane Index
|
|
|
|
40 min.
|
|
D4737
|
Carbon Residue,
|
|
|
|
|
|
|
10% Residuum
|
|
%, wt.
|
|
0.35 max.
|
|
D524
|
Sediment & Water
|
|
%, vol.
|
|
0.05 max.
|
|
D1796
|
Sulfur
|
|
%, wt.
|
|
0.40 max.
|
|
D1552, D2622 or
|
|
|
|
|
|
|
D4294
|
Distillation
|
|
|
|
|
|
|
90% Recovered
|
|
°F
|
|
540 - 650
|
|
D86
|
Sodium+Potassium
|
|
PPM, wt.
|
|
0.5 max.
|
|
D3605
|
Sodium+Pot+Lithium
|
|
PPM, wt.
|
|
Report
|
|
D3605
|
Vanadium **
|
|
PPM, wt.
|
|
0.8
|
|
D3605
|
Nitrogen ***
|
|
PPM, wt.
|
|
120
|
|
D4629 or D5762
|
|
|
|
|
|
|
|
* Typical values is shown.
|
||||||
** Typical values is shown.
|
||||||
*** Typical values is shown.
|
Test Property
|
Test Method
|
Unit of Measure
|
Min
|
Max
|
||
|
|
|
|
|
||
APPEARANCE
|
(None)
|
Visual
|
|
|
||
|
|
|
|
|
||
ASH
|
ASTM D482
|
% mass
|
|
0.01
|
|
|
|
|
|
|
|
||
CARBON RESIDUE: RAMS 10%
|
|
|
|
|
||
BOTTOMS
|
ASTM D524-04
|
% mass
|
|
0.35
|
|
|
|
|
|
|
|
||
CETANE INDEX
|
ASTM D4737-04
|
Number
|
40.0
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
||
One of the following must be met:
|
|
|
|
|
||
CETANE INDEX
|
ASTM D976-06
|
Number
|
40.0
|
|
|
|
Or
|
|
|
|
|
||
AROMATICITY
|
ASTM D1319
|
Vol %
|
|
35
|
|
|
|
|
|
|
|
||
COPPER STRIP CORROSION: 3 HR
|
|
|
|
|
||
@ 50C
|
ASTM D130-04e1
|
Classification
|
|
3
|
|
|
|
|
|
|
|
||
|
|
|
|
|
||
DISTILLATION: 90% RECOVERED
|
ASTM D86-07a
|
*C
|
282
|
|
338
|
|
|
|
|
|
|
||
DYE
|
|
|
|
|
||
|
|
|
|
|
||
FLASH POINT: P-M
|
ASTM D93-07
|
*C
|
52
|
|
|
|
|
|
|
|
|
||
FLASH POINT: P-M
|
ASTM D93-07
|
*F
|
125
|
|
|
|
|
|
|
|
|
||
LUBRICITY, 60C, WSD
|
ASTM D6079
|
Mcrons
|
|
520
|
|
|
|
|
|
|
|
||
SULFUR
|
ASTM D5453
|
ppm by WT
|
|
15
|
|
|
|
|
|
|
|
||
CONDUCTIVITY
|
ASTM D2624/D 4308
|
pS/m pr C.U.
|
25
|
|
|
|
|
|
|
|
|
||
VISCOSITY: KIN @ 40C
|
ASTM D445-06
|
eSt
|
1.9
|
|
4.1
|
|
|
|
|
|
|
||
WATER & SEDIMENT
|
ASTM D1796-04
|
% vol
|
|
0.05
|
|
|
|
|
|
|
|
||
|
|
|
|
|
||
|
|
|
|
|
1.1
|
“
Affiliate
”, except where otherwise expressly provided, means an entity controlling, controlled by or under common control with Seller or Hawaiian Electric, as the case may be. For the purposes of this definition “control” (including with correlative meanings, “controlling,” “controlled by,” and “under common control with”) means the power to direct or cause the direction of the management and policies of such entity, directly or indirectly, whether through the ownership of a majority of voting securities, by contract or otherwise, and it being understood and agreed that with respect to a corporation, limited liability company, or partnership, control shall mean direct or indirect ownership of equal to or more than 50% of the voting stock or limited liability company interest or general partnership interest or voting interest in any such corporation, limited liability company or partnership.
|
1.2
|
“
API
” means American Petroleum Institute, a long-established petroleum industry organization.
|
1.3
|
“
ASTM
” means the American Society for Testing and Materials, a long-established source of standard testing and evaluation methods for petroleum.
|
1.4
|
“
barrel
” means 42 American bulk gallons at 60 degrees Fahrenheit (“
DF
”).
|
1.5
|
“
BPTF
” means Hawaiian Electric’s Barbers Point Tank Farm, a fuel receiving, storage and
|
1.6
|
“
BTU
” and “
BTU content
” means British Thermal Unit and refers to the standard assessment of Fuel’s gross heating value or gross heat content of Fuel determined in accordance with the test method specified in this Contract.
|
1.7
|
“
business day
” shall mean Monday through Friday, except for a day as to which physical locations of commercial banks in Honolulu, Hawaii are closed for business to the public due to a scheduled holiday.
|
1.8
|
“
Certificate of Quality
” or “
Quality Certificat
e” means the formal document recording the Seller’s laboratory determination of quality and BTU content of a particular sample which represents a specific Delivery, said laboratory determinations having been performed in accordance with the test methods described herein.
|
1.9
|
“
Commission
” means the State of Hawaii Public Utilities Commission.
|
1.10
|
“
Commission Approval Order
” is defined in
Section 2.2
below.
|
1.11
|
“
Consumer Advocate
” means the Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs of the State of Hawaii.
|
1.12
|
“
Contract
” means this Supply Contract for LSFO, Diesel and MATS Fuel between Seller and Hawaiian Electric.
|
1.13
|
“
day
” or “
days
“ means a calendar day of 24 hours.
|
1.14
|
“
Delive
r”, “
Delivery
”, “
Deliveries
” or “
Delivered
” refers to the transfer of title or physical movement of Fuel by Seller and purchased by Hawaiian Electric.
|
1.15
|
“
Delivery Status Against Ratable
” means the calculated figure equal to cumulative Deliveries of Fuel as of a specific day in a month where said Deliveries for the month which includes the specified day less the cumulative Nominations on a Contract-to-date basis as of that same specific day in a month.
|
1.16
|
“
DF
” means degrees Fahrenheit.
|
1.17
|
“
Diesel
” means low sulfur diesel, of the quality specified herein, which may be blended with LSFO to produce MATS Fuel.
|
1.18
|
“
DOT
” means the Department of Transportation of the State of Hawaii and/or of the United States, as the case may be.
|
1.19
|
“
Effective Date
” is defined in
Section 2.3
below.
|
1.20
|
“
Extensio
n” means any Contract term in addition to and after the Original Term, each of which is a consecutive 12-month period beginning January 1.
|
1.21
|
“
Final Sample
” is defined by the mode of delivery which is detailed in
Section 6.4
below.
|
1.22
|
“
Fuel
” means singularly and collectively LSFO, Diesel, and MATS Fuel suitable for use as a boiler fuel of the quality specifications described herein.
|
1.23
|
“
gallon
” means a United States liquid gallon of 231 cubic inches at 60 DF.
|
1.24
|
“
Governmental Authority
” means any international, foreign, federal, state, regional, county, or local Person having governmental or quasi-governmental authority or subdivision thereof, including recognized courts of Law, or other body or entity of competent jurisdiction.
|
1.25
|
“
G.S.V.
” means gross standard volume in U.S. Barrels at 60 DF.
|
1.26
|
“
Independent Inspector
” means a qualified third-party petroleum inspection contractor acceptable to both Parties providing petroleum sampling, measurement and other services before, during and after a Delivery.
|
1.27
|
“
Inter-island Supply Contract
” means that certain Inter-island Supply Contract for Petroleum Fuels, dated February 18, 2016, by and between Hawaiian Electric Co., Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited, and Chevron U.S.A. Inc. (through its division Chevron Products Company).
|
1.28
|
“
Law
” means any law, decree, directive, judgment, order, decision, interpretation, enforcement, statute, code, ordinance, rule, regulation, treaty, convention or any action, direction or intervention or other requirement of any Governmental Authority.
|
1.29
|
“
Line Displacement Stock
” means Fuel Delivered (i) to displace Fuel from BPTF piping to Hawaiian Electric’s Kahe or Waiau pipelines during any shutdown of operations of such facilities for reasons including but not limited to emergency, inspection, repair, or maintenance; (ii) to heat up BPTF piping, Hawaiian Electric’s Kahe or Waiau Pipelines subsequent to any shutdown; or (iii) to be used as reasonably required for the use or operation of such facilities in order to facilitate the movement of Fuel into Hawaiian Electric’s tankage at BPTF, Kahe and Waiau.
|
1.30
|
“
LSFO
” means low sulfur fuel oil produced in conformity with the provisions of the quality specified herein.
|
1.31
|
“
Marine Delivery
” or “
Marine Deliveries
” means a Delivery of Fuel and/or the components thereof, including blendstock, all or part of which are Delivered by Seller from a marine vessel to Hawaiian Electric’s receiving and storage tanks.
|
1.32
|
“
MATS Fue
l” means a liquid-based fuel, namely LSFO proportionately blended with Diesel, intended by Hawaiian Electric to satisfy the Environmental Protection Agency’s MATS rules and regulations or any similar rules and/or regulations.
|
1.33
|
“
month
” means a calendar month.
|
1.34
|
“
Nominated
” and “
Nomination
” means the amount of Fuel specified by Hawaiian Electric to be sold and Delivered by Seller and purchased and received by Hawaiian Electric for a specified month. All Nominated volumes shall specify the type and quantity, including the ratio of LSFO and Diesel for MATS Fuel required.
|
1.35
|
“
Original Term
” is defined in
Section 2.1
below.
|
1.36
|
“
Person
” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity.
|
1.37
|
“
Party
” and “
Parties
” are defined in the first paragraph above.
|
1.38
|
“
Pipeline Blend
” means a mixture of Seller’s Pipeline Fill and Fuel.
|
1.39
|
“
Pipeline Delivery
” or “
Pipeline Deliveries
” means a Delivery of Fuel and/or the components thereof, including blendstock, all or part of which are Delivered by Seller to Hawaiian Electric’s receiving and storage tanks at BPTF.
|
1.40
|
“
Pipeline Fill
” means the petroleum residing in the pipelines through which Seller makes Delivery of Fuel to Hawaiian Electric.
|
1.41
|
“
Ratable
” means a volume that is proportional, able to be rated or estimated.
|
1.42
|
“
Representatives
” of a Party shall mean the respective officers, directors, members, managers, employees, and agents of such Party or its Affiliates.
|
1.43
|
“
Refinery
” means Seller’s oil refining and related facilities located in the Barbers Point area of O’ahu, in Campbell Estate Industrial Park, Kapolei, Hawaii.
|
1.44
|
“
Reverse Line Displacement
” means an operation where Hawaiian Electric pumps Hawaiian Electric’s Fuel into the pipeline which Seller uses to Deliver Fuel to Hawaiian Electric in order to displace Seller’s Pipeline Fill.
|
1.45
|
“
Specification
” means the fuel quality specifications applicable to Fuel as described herein and stated in Exhibit A.
|
1.46
|
“
Term
” means the Original Term and any Extension(s).
|
1.47
|
“
Terminalling Agreement
” means that certain Fuels Terminalling Agreement, dated February 18, 2016, by and between Chevron U.S.A. Inc. (through its division Chevron Products Company) and Hawaii Electric Light Company, Inc.
|
1.48
|
“
USD
” means currency denominated in U.S. dollars.
|
1.49
|
“
Year
” means a calendar year.
|
(1)
|
A change in the volume of an individual Pipeline Delivery, if such change is in excess of […] of the previously advised Delivery volume or a change in the
|
(2)
|
A change in the date of an individual Delivery, if such change is greater than […] from the previously advised date.
|
1.
|
Hawaiian Electric may reject Seller’s proposed […]upon providing Seller notice no later than […] from the receipt of Seller’s notification.
|
2.
|
Seller may propose an alternate […] period, where such alternate shipment period is within five (5) days of the date of Seller’s first proposed […] day shipment period. Notice may be given by email or telephone.
|
3.
|
Seller shall provide Hawaiian Electric the intended volume of Fuel to be Delivered to Hawaiian Electric via marine vessel subject to a variation of […] with respect to the actual physical volume Delivered and a proposed […]. Notices may be given by email or telephone.
|
1.
|
Seller may Deliver LSFO, LSFO blendstock, MATS Fuel, MATS Fuel blendstock, or Diesel Fuel from Seller’s vessel into Hawaiian Electric’s BPTF. The volume of Seller’s Marine Delivery shall conform to the provisions of
Section 3.3
herein unless
|
2.
|
If requested by Hawaiian Electric and in order to verify proper line-ups and procedures, for the first Marine Delivery under the Term of this Contract, Seller’s control operator shall be present at Hawaiian Electric’s control room for the entire duration of the Marine Delivery, at no cost to Hawaiian Electric. For all subsequent Marine Deliveries and at Hawaiian Electric’s option and cost, Seller’s control operator shall be present at Hawaiian Electric’s control room for the entire duration of the Marine Delivery, or at Hawaiian Electric’s option, the control operator may be present only for the beginning and end of the Marine Delivery. […].
|
1.
|
Seller agrees to advise the Independent Inspector, prior to commencing a Marine Delivery of Fuel or any component thereof from Seller’s vessel, the API gravity and flash point in degrees Fahrenheit shown on the port of loading Quality Certificate representing the quality of said Fuel or component thereof.
|
2.
|
In order to reduce the likelihood of Seller’s Marine Delivery of Fuel, Fuel blendstock, or component thereof resulting in quality problems occurring in Hawaiian Electric’s receiving tank(s), Seller agrees to test a volumetric weighted average composite of samples representative of the Fuel, Fuel blendstock or component thereof to be shipped to Hawaiian Electric’s receiving tanks (“
Precautionary Sample
”). The Precautionary Sample shall be drawn after the arrival of the vessel in Hawaii state waters, but prior to the commencement of the Marine Delivery, and shall be tested by Refinery’s laboratory. Seller agrees that should a pre-discharge computer blend simulation representing the quality of a volumetric weighted average mixture of the Precautionary Sample, components of the Marine Delivery in questions previously shipped to Hawaiian Electric’s receiving tanks and other Fuel, Fuel blendstock or components available to be shipped from the Refinery reasonably indicate the Marine Delivery in question will not conform to the quality specified in
Exhibit A
. Seller will instruct the vessel operator not to commence Delivery of its cargo to Hawaiian Electric’s receiving tanks without Hawaiian Electric’s express permission.
|
3.
|
The quality and BTU content of the Fuel Delivered shall be determined on the basis of a volumetric weighted average composite of samples drawn from Hawaiian Electric’s receiving tank(s) in such manner as to be representative of the entire Marine Delivery (“
Tank Final Sample
”). The Tank Final Sample shall be divided and otherwise handled in accordance with the provisions of
Section 6.4(c)
.
|
4.
|
Quantity of the Fuel Delivered via a Marine Delivery shall be determined at the time of each Marine Delivery by gauging Hawaiian Electric’s tank(s) before and after pumping. Quantities sold and Delivered pursuant to this
Section 6.1
. shall be calculated in accordance with the current measurement standards adopted by industry, ASTM, API and other recognized standard-setting bodies as are applicable in the opinion of the Independent Inspector and shall be expressed in G.S.V., U.S. barrels at 60 DF.
|
1.
|
A change in the volume of an individual Pipeline Delivery if such change […] of the previously advised Delivery volume; or
|
2.
|
A change in the date of an individual Delivery, if such change is […]from the previously advised date; or
|
3.
|
[…].
|
1.
|
One part shall be provided to Seller’s laboratory for analysis to determine quality including BTU Content per barrel.
|
2.
|
One part shall be provided to Hawaiian Electric for the purpose of verifying Seller’s determinations.
|
3.
|
At least one part shall be sealed and provided to the Independent Inspector to be retained for a period of at least three (3) months.
|
1.
|
The quality of Fuel sold and Delivered to Hawaiian Electric shall be determined on the basis of Seller’s Certificate of Quality of the Fuel provided by the Seller. Each shipment of Fuel to Hawaiian Electric shall comply with the Specifications subject to
Section 4.1
.
|
2.
|
The official BTU Content determination shall be as reported in Seller’s Certificate of Quality, provided that the arithmetic difference between Seller’s and Hawaiian Electric’s laboratory results is equal to or less than the then existing ASTM reproducibility standard (currently 0.4 MJ/kg, which the Parties shall deem to be equivalent to a fixed standard of 60,000 BTU per barrel) for test D-240. If the difference between Seller’s and Hawaiian Electric’s determinations of BTU Content
|
3.
|
If Seller or Hawaiian Electric has reason to believe that the quality of Fuel stated for a specific Delivery fails to conform to the Specifications in
Article IV
or the fuel specifications in Exhibit A, that Party shall within five (5) days after the later of the date of the completed Certificate of Quality or the date of the final determination of BTU Content, present the other Party with documents supporting such determination and the Parties will confer, in good faith, on the causes for the discrepancy and shall proceed to correct such causes and adjust the quality, if justified, for the Delivery in question. In the event of an unresolved difference between Seller and Hawaiian Electric, the sealed part of the representative sample in the possession of the Independent Inspector shall be provided to an independent laboratory for an official determination, which shall be final. Seller and Hawaiian Electric shall share equally the cost for such independent laboratory determination.
|
4.
|
If the quality of the Fuel received by Hawaiian Electric fails to conform to the quality Specifications, both Hawaiian Electric and Seller shall attempt to minimize the impact of any quality problem. […]. Or, Seller may attempt to remedy the quality problem by Delivering higher quality Fuel in a timely manner to produce a Specifications quality blend in Hawaiian Electric’s storage tank(s) at Hawaiian Electric’s BPTF or at Hawaiian Electric’s O’ahu generating plants. If all such and similar efforts fail to resolve the quality problem, then Hawaiian Electric may return non-Specifications Fuel to Seller, in which case Seller shall replace the non-Specifications Fuel by Delivering an equal volume of Hawaiian Electric verified on-Specifications Fuel to Hawaiian Electric in a timely manner. Notwithstanding the preceding, Hawaiian Electric shall always have the right to refuse Delivery of any Fuel with prior written notice to Seller or its permitted agents if Hawaiian Electric in good faith shall have reason to believe that the Fuel does not meet the Specifications. […].
|
5.
|
All reasonable costs and expenses concerning testing, transportation, re-refining, and handling incurred in returning, replacing or otherwise correcting off-Specification Fuel shall be for the account of Seller.
|
1.
|
Marine and War Risk Hull & Machinery coverage (including 4/4ths Collision Liability) subject to an Amount Insured not less than the full value of the vessel.
|
2.
|
Full form Protection & Indemnity Insurance, including Excess Collision, pollution/ environmental risk coverage, upon the vessel pursuant to a standard Protection & Indemnity Club entry, with a Club which is a member of the International Group of Protection and Indemnity Clubs, with minimum limits for pollution/environmental risks to be [...] per occurrence or the maximum commercially available, whichever is greater. Such insurance shall cover all of the risks covered under a
|
3.
|
Standard Workers Compensation and Employers Liability Insurance endorsed to be applicable to the State of Hawaii as well as the Longshore Act, with statutory limits for workers compensation and limits of [...] per occurrence for employers liability.
|
4.
|
Commercial General Liability Insurance with a bodily injury and property damage combined single limit per occurrence of at least [...].
|
5.
|
Automobile Liability Insurance on all owned, non-owned and hired vehicles used in conjunction with the Delivery of Fuel to Hawaiian Electric with a bodily injury and property damage combined single limit per occurrence of at least [...].
|
6.
|
Other Coverage. Seller and anyone acting under its direction or control or on its behalf shall at its own expense procure and maintain in full force and effect at all times during the Term of this Contract on all owned, non-owned and hired vehicles used in conjunction with the Delivery of Fuel to Hawaiian Electric, any other insurance or surety bonding that may be required under the laws, ordinances and regulations of any governmental authority, including the Federal Motor Carrier Act of 1980 and all rules and regulations of the DOT and/or the USDOT.
|
CHEVRON PRODUCTS COMPANY
,
a division of Chevron U.S.A. Inc
|
|
|
Signature:
|
|
|
/s/ Billy Liu
|
|
|
Name:
Billy Liu
Title:
Hawaii VCO Coordinator
|
|
|
|
|
|
HAWAIIAN ELECTRIC COMPANY, INC.
|
|
HAWAIIAN ELECTRIC COMPANY, INC.
|
Signature:
|
|
Signature:
|
/s/ Jay Ignacio
|
|
/s/ Ronald Cox
|
Name:
Jay Ignacio
Title:
Assistant Secretary
|
|
Name:
Ronald R. Cox
Title:
Vice President, Power Supply
|
Test Property
|
Test Method
|
Unit Of Measure
|
LSFO Fuel
Min Max
|
|
Gravity @ 60 Degrees F.
|
ASTM D-4052
|
Degrees API
|
12
|
24
|
Viscosity
|
ASTM D-445,
D-2161
|
SSU at 210 DF
|
100
|
450
|
Heat Value, Gross
|
ASTM D-240,
D-4868
|
MM BTU/BBL
|
6.0
|
|
Flash Point
|
ASTM D-93
|
Degrees F.
|
150
|
|
Pour Point
|
ASTM D-97,
D-5949
|
Degrees F.
|
|
125
|
Ash
|
ASTM D-482
|
Percent, Weight
|
|
0.05
|
Sediment & Water***
|
ASTM D-1796
|
Percent, Weight
|
|
0.50
|
Sulfur
|
ASTM D-4294
|
Percent, Weight
|
|
0.50
|
Nitrogen
|
ASTM D-4629, D5762
|
Percent, Weight
|
|
0.50
|
Vanadium
|
ASTM D-5863,
AES, Oxford Test Method MDMET017
|
PPM, Weight
|
|
50.0
|
Carbon Residue
|
ASTM D-4530
|
Percent, Weight
|
|
[…]
|
Sediment & Water***
|
%, vol.
|
0.05 max.
|
D2709
|
Sulfur
|
%, wt.
|
0.10 max.
|
D1552, D2622 or D4294
|
Distillation 90% Recovered
|
°F
|
540 - 698
|
D86
|
Water by Distillation*1
|
PPM, wt.
|
Report
|
D95
|
Nitrogen*
|
PPM, wt.
|
Report
|
D5762 or D4629
|
1.1
|
“
Affiliate
”, except where otherwise expressly provided, means an entity controlling, controlled by or under common control with Chevron or Hawaii Electric Light, as the case may be. For the purposes of this definition “control” (including with correlative meanings, “controlling,” “controlled by,” and “under common control with”) means the power to direct or cause the direction of the management and policies of such entity, directly or indirectly, whether through the ownership of a majority of voting securities, by contract or otherwise, and it being understood and agreed that with respect to a corporation, limited liability company, or partnership, control shall mean direct or indirect ownership of equal to or more than 50% of the voting stock or limited liability company interest or general partnership interest or voting interest in any such corporation, limited liability company or partnership.
|
1.2
|
“
API
” means American Petroleum Institute, a long-established petroleum industry organization.
|
1.3
|
“
ASTM
” means the American Society for Testing and Materials, a long-established source of standard testing and evaluation methods for petroleum.
|
1.4
|
“
barrel
” “
BBLS
” means 42 American bulk gallons at 60 degrees Fahrenheit (“
DF
”).
|
1.5
|
“
BTU
” and “BTU Content” means
British Thermal Unit and refers to the standard assessment of Fuel’s gross heating value or gross heat content of Fuel determined in accordance with the test method specified in this Agreement.
|
1.6
|
“
business day
” shall mean Monday through Friday, except for a day as to which physical locations of commercial banks in Honolulu, Hawaii are closed for business to the public due to a scheduled holiday.
|
1.7
|
“
Certificate of Quality
” means the formal document recording the Chevron’s laboratory determination of quality and BTU content of a particular sample which represents a specific delivery, said laboratory determinations having been performed in accordance with the test methods described herein.
|
1.8
|
“
Chevron Facility
” means the Chevron’s Hilo, Hawaii Terminal, located at 666 Kalanianaole Ave., Hilo, Hawaii 96720.
|
1.9
|
“
Commissio
n” means the State of Hawaii Public Utilities Commission.
|
1.10
|
“
Commission Approval Order
” is defined in
Section 2.2
below.
|
1.11
|
“
Consumer Advocate
” means the Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs of the State of Hawaii.
|
1.12
|
“
day
” or “
days
” means a calendar day of 24 hours.
|
1.13
|
“
Diesel
” means No. 2 Diesel produced in conformity with the provisions of the quality in the Specification which are set forth herein.
|
1.14
|
“
DOT
” means the Department of Transportation of the State of Hawaii and/or of the United States, as the case may be.
|
1.15
|
“
Effective Date
” is defined in
Section 2.3
below.
|
1.16
|
“
Extension
” means any Agreement term in addition to and after the Original Term, each of which is a 12-Month period beginning January 1.
|
1.17
|
“
Fuel
” means singularly and collectively Industrial Fuel Oil (“IFO”) and No. 2 Diesel (“Diesel”) meeting the Specifications described in Exhibit A.
|
1.18
|
“
gallon
” means a United States liquid gallon of 231 cubic inches at 60 DF.
|
1.19
|
“
Governmental Authority
” means any international, foreign, federal, state, regional, county, or local Person having governmental or quasi-governmental authority or subdivision thereof, including recognized courts of Law, or other body or entity of competent jurisdiction.
|
1.20
|
“
Independent Inspector
” means a qualified third-party petroleum inspection contractor acceptable to both Parties providing petroleum sampling, measurement and other services before, during and after a delivery.
|
1.21
|
“
Inter-island Supply Contract
” means that certain Inter-island Supply Contract for Petroleum Fuels, dated February 18, 2016, by and between Hawaiian Electric Co., Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited, and Chevron U.S.A. Inc. (through its division Chevron Products Company).
|
1.22
|
“
Law
” means any law, decree, directive, judgment, order, decision, interpretation, enforcement, statute, code, ordinance, rule, regulation, treaty, convention, or any action, direction or intervention or other requirement of any Governmental Authority.
|
1.23
|
“
Line Displacement Stock
” means Fuel used to displace or flush or move existing Fuel in a pipeline.
|
1.24
|
“
LSFO Supply Contract
” means that certain Supply Contract for LSFO, Diesel and MATS Fuel, dated February 18, 2016, by and between Hawaiian Electric Company, Inc. and Chevron U.S.A. Inc. (through its division Chevron Products Company).
|
1.25
|
“
MATS Fuel
” means Fuel that is compliant with the Environmental Protection Agency’s (“EPA”) rule to reduce emissions of toxic air pollutants from power plants, specifically Mercury and Air Toxics Standards (MATS).
|
1.26
|
“
month
” means a calendar month.
|
1.27
|
“
Original Term
” is defined in
Section 2.1
below.
|
1.28
|
“
Party
” and “
Parties
” are defined in the first paragraph above.
|
1.29
|
“
Person
” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity.
|
1.30
|
“
Pipeline Delivery
” means a delivery of Product which is delivered by pipeline from the Chevron Facility to Hawaii Electric Light’s power plants.
|
1.31
|
“
Product(s)
” means Industrial Fuel Oil (“IFO”) and/or No. 2 Diesel (“Diesel”) which shall be stored, received, delivered or piped into and from the Chevron Facility.
|
1.32
|
“
Representatives
” of a Party shall mean the respective officers, directors, members, managers, employees, and agents of such Party or its Affiliates.
|
1.33
|
“
Specification”
means the fuel quality specifications applicable to Fuel as described herein and stated in Exhibit A.
|
1.34
|
“
Term
” means the Original Term and any Extension(s).
|
1.35
|
“
Terminalling Services
” means the receipt, storage, delivery, blending and handling of Hawaii Electric Light’s Products, as further described in
Article III
.
|
1.36
|
“
Terminalling Services Fee
” or [ … ] means the per barrel fee (set forth on
Exhibit B
) paid in exchange for Chevron’s storage and handling of fuel products which includes all associated services, Chevron Facility personnel costs, operations and maintenance, and any miscellaneous expenses, excluding taxes.
|
1.37
|
“
Unavailable Day
” means each 24 consecutive hour period during which Chevron is unable (other than due to the fault of Hawaii Electric Light) to provide any of the Terminalling Services including (but not limited to): (i) receive Products at the Chevron Facility and/or (ii) deliver Hawaii Electric Light’s Product at the Chevron Facility.
|
1.38
|
“
USD
” means currency denominated in U.S. dollars.
|
1.39
|
“
year
” means a calendar year.
|
1.
|
Storage tanks shall be available for incoming barge deliveries of Product.
|
2.
|
Subject to
Section 7.1
and
Section 7.2
, Operators and Chevron Facility personnel shall be available for any and all incoming and outgoing Product receipts and deliveries, including loading of Hawaii Electric Light’s tanker trucks at the truck rack and the operation of the pipeline from the Chevron Facility to Hawaii Electric Light’s power plant(s). Once the barge unloading begins, the Chevron
|
1.
|
Commercial General Liability Insurance (including but not limited to coverage for each Party’s obligation hereunder to defend and/or indemnify each Party) with limits of not less than [...] each occurrence and [...] general aggregate; CG 2503, or its equivalent, amending aggregate limits shall apply.
|
2.
|
Business Automobile Liability Insurance covering all vehicles used by each Party in their operations with a limit of liability of not less than: [...] each occurrence for bodily injury and property damage combined, such policy to be endorsed with MCS-90 and CA 99 48, or its equivalent, when hazardous material transportation is involved.
|
3.
|
Workers’ Compensation Insurance and/or Longshoremen’s and Harbor workers’ Compensation Insurance as required by laws and regulations applicable to and covering employees of each Party performing under this Agreement.
|
4.
|
Employers’ Liability Insurance protecting each Party against common law liability, in the absence of statutory liability, for employee bodily injury arising out of the master-servant relationship with a limit of not less than [...] Each Accident, [...] Disease-Policy Limit, [...] Disease-Each Employee.
|
CHEVRON PRODUCTS COMPANY
,
a division of Chevron U.S.A. Inc.
|
|
Signature:
/s/ Billy Liu
Name: Billy Liu
Title: Hawaii VCO Coordinator
|
|
|
|
HAWAII ELECTRIC LIGHT, INC.
|
HAWAII ELECTRIC LIGHT, INC.
|
Signature:
/s/ Jay Ignacio ___________________________________
Name: Jay Ignacio
Title: President
|
Signature:
/s/ Tayne Sekimura ________________________________________
Name: Tayne Sekimura
Title: Sr. VP & Chief Financial Officer
|
Item
|
|
Units
|
|
Specification Limits
|
|
Test Method
|
Gravity @ 60°F
|
|
°API, Specific
|
|
30.0 min., .88 min.
|
|
D1298 or D4052-86
|
Viscosity @ 100 DF
|
|
SSU
|
|
32.3 - 40.0
|
|
D445, D2161
|
BTU content *
|
|
MM BTU/BBL
|
|
5.84
|
|
Calculated or D240
|
Heat Value, Net
|
|
MM BTU/BBL
|
|
Report
|
|
Calculated or D240
|
Flash Point, PM
|
|
°F
|
|
150 min.
|
|
D93, D6450
|
Pour Point *
|
|
°F
|
|
35
|
|
D97
|
Ash
|
|
PPM, wt.
|
|
100 max.
|
|
D482
|
Cetane Index
|
|
|
|
40 min.
|
|
D4737
|
Carbon Residue,
|
|
|
|
|
|
|
10% Residuum
|
|
%, wt.
|
|
0.35 max.
|
|
D524
|
Sediment & Water
|
|
%, vol.
|
|
0.05 max.
|
|
D1796
|
Sulfur
|
|
%, wt.
|
|
0.40 max.
|
|
D1552, D2622 or
|
|
|
|
|
|
|
D4294
|
Distillation
|
|
|
|
|
|
|
90% Recovered
|
|
°F
|
|
540 - 650
|
|
D86
|
Sodium+Potassium
|
|
PPM, wt.
|
|
0.5 max.
|
|
D3605
|
Sodium+Pot+Lithium
|
|
PPM, wt.
|
|
Report
|
|
D3605
|
Vanadium **
|
|
PPM, wt.
|
|
0.8
|
|
D3605
|
Nitrogen ***
|
|
PPM, wt.
|
|
120
|
|
D4629 or D5762
|
Item
|
|
Specifications
|
|
ASTM Test Method
|
Gravity @ 60°F, API
|
|
6.5 min.
|
|
D1298 or D4052-86
|
Flash, °F
|
|
150 min.
|
|
D93, D6450
|
Viscosity, SSF @ 122°F
|
|
179 min., 226 max.
|
|
D445/D2161
|
Pour Point, °F
|
|
55 max.
|
|
D97
|
Sulfur, % Wt.
|
|
2.00 max
|
|
D1552, D2622 or D4294
|
Sediment & Water, % Vol.
|
|
0.5 max.
|
|
D1796
|
BTU content *, MM BTU/BBL
|
|
6.0
|
|
D240
|
Vanadium **, PPM wt.
|
|
100
|
|
D5863
|
Nitrogen ***, PPM wt.
|
|
6500
|
|
D5762 or D4629
|
Three months ended March 31
|
|
2016 (1)
|
|
2016 (2)
|
|
2015 (1)
|
|
2015 (2)
|
||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Fixed charges
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total interest charges
|
|
$
|
21,772
|
|
|
$
|
23,364
|
|
|
$
|
20,788
|
|
|
$
|
22,048
|
|
Interest component of rentals
|
|
1,546
|
|
|
1,546
|
|
|
1,548
|
|
|
1,548
|
|
||||
Pretax preferred stock dividend requirements of subsidiaries
|
|
737
|
|
|
737
|
|
|
765
|
|
|
765
|
|
||||
Total fixed charges
|
|
$
|
24,055
|
|
|
$
|
25,647
|
|
|
$
|
23,101
|
|
|
$
|
24,361
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Pretax income from continuing operations
|
|
$
|
50,653
|
|
|
$
|
50,653
|
|
|
$
|
51,845
|
|
|
$
|
51,845
|
|
Fixed charges, as shown
|
|
24,055
|
|
|
25,647
|
|
|
23,101
|
|
|
24,361
|
|
||||
Interest capitalized
|
|
(823
|
)
|
|
(823
|
)
|
|
(721
|
)
|
|
(721
|
)
|
||||
Earnings available for fixed charges
|
|
$
|
73,885
|
|
|
$
|
75,477
|
|
|
$
|
74,225
|
|
|
$
|
75,485
|
|
Ratio of earnings to fixed charges
|
|
3.07
|
|
|
2.94
|
|
|
3.21
|
|
|
3.10
|
|
Years ended December 31
|
|
2015 (1)
|
|
2015 (2)
|
|
2014 (1)
|
|
2014 (2)
|
|
2013 (1)
|
|
2013 (2)
|
||||||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total interest charges
|
|
$
|
83,936
|
|
|
$
|
89,284
|
|
|
$
|
83,458
|
|
|
$
|
88,535
|
|
|
$
|
85,315
|
|
|
$
|
90,407
|
|
Interest component of rentals
|
|
6,065
|
|
|
6,065
|
|
|
6,366
|
|
|
6,366
|
|
|
6,345
|
|
|
6,345
|
|
||||||
Pretax preferred stock dividend requirements of subsidiaries
|
|
2,977
|
|
|
2,977
|
|
|
2,952
|
|
|
2,952
|
|
|
2,886
|
|
|
2,886
|
|
||||||
Total fixed charges
|
|
$
|
92,978
|
|
|
$
|
98,326
|
|
|
$
|
92,776
|
|
|
$
|
97,853
|
|
|
$
|
94,546
|
|
|
$
|
99,638
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Pretax income from continuing operations
|
|
$
|
252,898
|
|
|
$
|
252,898
|
|
|
$
|
263,708
|
|
|
$
|
263,708
|
|
|
$
|
247,946
|
|
|
$
|
247,946
|
|
Fixed charges, as shown
|
|
92,978
|
|
|
98,326
|
|
|
92,776
|
|
|
97,853
|
|
|
94,546
|
|
|
99,638
|
|
||||||
Interest capitalized
|
|
(3,265
|
)
|
|
(3,265
|
)
|
|
(3,954
|
)
|
|
(3,954
|
)
|
|
(7,097
|
)
|
|
(7,097
|
)
|
||||||
Earnings available for fixed charges
|
|
$
|
342,611
|
|
|
$
|
347,959
|
|
|
$
|
352,530
|
|
|
$
|
357,607
|
|
|
$
|
335,395
|
|
|
$
|
340,487
|
|
Ratio of earnings to fixed charges
|
|
3.68
|
|
|
3.54
|
|
|
3.80
|
|
|
3.65
|
|
|
3.55
|
|
|
3.42
|
|
Years ended December 31
|
|
2012 (1)
|
|
2012 (2)
|
|
2011 (1)
|
|
2011 (2)
|
||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Fixed charges
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total interest charges (3)
|
|
$
|
83,020
|
|
|
$
|
89,443
|
|
|
$
|
87,592
|
|
|
$
|
96,575
|
|
Interest component of rentals
|
|
6,493
|
|
|
6,493
|
|
|
4,757
|
|
|
4,757
|
|
||||
Pretax preferred stock dividend requirements of subsidiaries
|
|
2,943
|
|
|
2,943
|
|
|
2,944
|
|
|
2,944
|
|
||||
Total fixed charges
|
|
$
|
92,456
|
|
|
$
|
98,879
|
|
|
$
|
95,293
|
|
|
$
|
104,276
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Pretax income from continuing operations
|
|
$
|
217,064
|
|
|
$
|
217,064
|
|
|
$
|
215,686
|
|
|
$
|
215,686
|
|
Fixed charges, as shown
|
|
92,456
|
|
|
98,879
|
|
|
95,293
|
|
|
104,276
|
|
||||
Interest capitalized
|
|
(4,355
|
)
|
|
(4,355
|
)
|
|
(2,498
|
)
|
|
(2,498
|
)
|
||||
Earnings available for fixed charges
|
|
$
|
305,165
|
|
|
$
|
311,588
|
|
|
$
|
308,481
|
|
|
$
|
317,464
|
|
Ratio of earnings to fixed charges
|
|
3.30
|
|
|
3.15
|
|
|
3.24
|
|
|
3.04
|
|
(1)
|
Excluding interest on ASB deposits.
|
(2)
|
Including interest on ASB deposits.
|
|
|
Three months ended March 31
|
|
Years ended December 31
|
||||||||||||||||||||||||
(dollars in thousands)
|
|
2016
|
|
2015
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||||
Fixed charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total interest charges
|
|
$
|
17,469
|
|
|
$
|
16,547
|
|
|
$
|
67,178
|
|
|
$
|
66,132
|
|
|
$
|
64,130
|
|
|
$
|
62,056
|
|
|
$
|
60,031
|
|
Interest component of rentals
|
|
777
|
|
|
798
|
|
|
3,060
|
|
|
3,244
|
|
|
2,793
|
|
|
2,690
|
|
|
2,152
|
|
|||||||
Pretax preferred stock dividend requirements of subsidiaries
|
|
357
|
|
|
361
|
|
|
1,443
|
|
|
1,444
|
|
|
1,421
|
|
|
1,467
|
|
|
1,468
|
|
|||||||
Total fixed charges
|
|
$
|
18,603
|
|
|
$
|
17,706
|
|
|
$
|
71,681
|
|
|
$
|
70,820
|
|
|
$
|
68,344
|
|
|
$
|
66,213
|
|
|
$
|
63,651
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net income attributable to Hawaiian Electric
|
|
$
|
25,637
|
|
|
$
|
27,144
|
|
|
$
|
136,794
|
|
|
$
|
138,721
|
|
|
$
|
124,009
|
|
|
$
|
100,356
|
|
|
$
|
101,066
|
|
Fixed charges, as shown
|
|
18,603
|
|
|
17,706
|
|
|
71,681
|
|
|
70,820
|
|
|
68,344
|
|
|
66,213
|
|
|
63,651
|
|
|||||||
Income taxes
|
|
14,553
|
|
|
15,850
|
|
|
79,422
|
|
|
80,725
|
|
|
69,117
|
|
|
61,048
|
|
|
61,584
|
|
|||||||
Interest capitalized
|
|
(823
|
)
|
|
(721
|
)
|
|
(3,265
|
)
|
|
(3,954
|
)
|
|
(7,097
|
)
|
|
(4,355
|
)
|
|
(2,498
|
)
|
|||||||
Earnings available for fixed charges
|
|
$
|
57,970
|
|
|
$
|
59,979
|
|
|
$
|
284,632
|
|
|
$
|
286,312
|
|
|
$
|
254,373
|
|
|
$
|
223,262
|
|
|
$
|
223,803
|
|
Ratio of earnings to fixed charges
|
|
3.12
|
|
|
3.39
|
|
|
3.97
|
|
|
4.04
|
|
|
3.72
|
|
|
3.37
|
|
|
3.52
|
|
Date: May 4, 2016
|
|
|
/s/ Constance H. Lau
|
|
Constance H. Lau
|
|
President and Chief Executive Officer
|
Date: May 4, 2016
|
|
|
/s/ James A. Ajello
|
|
James A. Ajello
|
|
Executive Vice President and Chief Financial Officer
|
Date: May 4, 2016
|
|
|
/s/ Alan M. Oshima
|
|
Alan M. Oshima
|
|
President and Chief Executive Officer
|
Date: May 4, 2016
|
|
|
/s/ Tayne S. Y. Sekimura
|
|
Tayne S. Y. Sekimura
|
|
Senior Vice President and Chief Financial Officer
|
Date: May 4, 2016
|
|
/s/ Constance H. Lau
|
Constance H. Lau
|
President and Chief Executive Officer
|
|
/s/ James A. Ajello
|
James A. Ajello
|
Executive Vice President and Chief Financial Officer
|
Date: May 4, 2016
|
|
/s/ Alan M. Oshima
|
Alan M. Oshima
|
President and Chief Executive Officer
|
|
/s/ Tayne S. Y. Sekimura
|
Tayne S. Y. Sekimura
|
Senior Vice President and Chief Financial Officer
|