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Commission
File Number
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Registrant; State of Incorporation;
Address; and Telephone Number
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I.R.S. Employer
Identification No.
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1-8503
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HAWAIIAN ELECTRIC INDUSTRIES, INC.
, a Hawaii corporation
1001 Bishop Street, Suite 2900, Honolulu, Hawaii 96813
Telephone (808) 543-5662
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99-0208097
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1-4955
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HAWAIIAN ELECTRIC COMPANY, INC.
, a Hawaii corporation
900 Richards Street, Honolulu, Hawaii 96813
Telephone (808) 543-7771
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99-0040500
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Registrant
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Title of each class
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Name of each exchange
on which registered
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Hawaiian Electric Industries, Inc.
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Common Stock, Without Par Value
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New York Stock Exchange
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Hawaiian Electric Company, Inc.
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Guarantee with respect to 6.50% Cumulative Quarterly
Income Preferred Securities Series 2004 (QUIPS
SM
)
of HECO Capital Trust III
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New York Stock Exchange
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Registrant
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Title of each class
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Hawaiian Electric Industries, Inc.
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None
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Hawaiian Electric Company, Inc.
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Cumulative Preferred Stock
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Hawaiian Electric Industries Inc. Yes
X
No
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Hawaiian Electric Company, Inc. Yes
No
X
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Hawaiian Electric Industries Inc. Yes
No
X
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Hawaiian Electric Company, Inc. Yes
No
X
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Hawaiian Electric Industries Inc. Yes
X
No
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Hawaiian Electric Company, Inc. Yes
X
No
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Hawaiian Electric Industries Inc. Yes
X
No
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Hawaiian Electric Company, Inc. Yes
X
No
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Hawaiian Electric Industries Inc.
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Large accelerated filer
X
Accelerated filer
Non-accelerated filer
(Do not check if a smaller reporting company)
Smaller reporting company
Emerging growth company
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Hawaiian Electric Company, Inc.
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Large accelerated filer
Accelerated filer
Non-accelerated filer
X
(Do not check if a smaller reporting company)
Smaller reporting company
Emerging growth company
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Hawaiian Electric Industries Inc. Yes
No
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Hawaiian Electric Company, Inc. Yes
No
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Hawaiian Electric Industries Inc. Yes
No
X
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Hawaiian Electric Company, Inc. Yes
No
X
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Aggregate market value
of the voting and non-
voting common equity
held by non-affiliates of
the registrants as of
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Number of shares of common stock
outstanding of the registrants as of
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||
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June 30, 2017
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June 30, 2017
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February 13, 2018
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Hawaiian Electric Industries, Inc. (HEI)
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$3,522,474,037
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108,785,486
(Without par value)
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108,841,157
(Without par value)
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Hawaiian Electric Company, Inc. (Hawaiian Electric)
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None
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16,019,785
($6 2/3 par value)
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16,142,216
($6 2/3 par value)
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This combined Form 10-K represents separate filings by Hawaiian Electric Industries, Inc. and Hawaiian Electric Company, Inc. Information contained herein relating to any individual registrant is filed by each registrant on its own behalf. Hawaiian Electric makes no representations as to any information not relating to it or its subsidiaries.
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Page
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Cautionary Note Regarding
Forward-Looking Statements
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Executive Officers of the Registrant (HEI)
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Terms
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Definitions
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ABO
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Accumulated benefit obligation
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ADIT
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Accumulated deferred income tax balances
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AES Hawaii
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AES Hawaii, Inc.
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AFS
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Available-for-sale
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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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AOS
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Adequacy of supply
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APBO
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Accumulated postretirement benefit obligation
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ARO
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Asset retirement obligations
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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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Btu
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British thermal unit
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CAA
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Clean Air Act
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CERCLA
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Comprehensive Environmental Response, Compensation and Liability Act
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Chevron
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Chevron Products Company, which assigned their fuel oil supply contracts with the Utilities to Island Energy Services, LLC.
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CIAC
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Contributions in aid of construction
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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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When used in Hawaiian Electric Industries, Inc. sections and in the Notes to Consolidated Financial Statements, “Company” refers to 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 wound up in 2017); The Old Oahu Tug Service, Inc. (formerly Hawaiian Tug & Barge Corp.); and Pacific Current, LLC and its subsidiaries, Hamakua Holdings, LLC (and its subsidiary, Hamakua Energy, LLC) and Mauo Holdings, LLC (and its subsidiary, Mauo, LLC)
When used in Hawaiian Electric Company, Inc. sections, “Company” refers to Hawaiian Electric Company, Inc. and its direct subsidiaries.
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Consolidated Financial Statements
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HEI’s and Hawaiian Electric's combined Consolidated Financial Statements, including notes, in Item 8 of this Form 10-K
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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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CBRE
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Community-based renewable energy
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D&O
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Decision and order from the PUC
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DBEDT
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State of Hawaii Department of Business Economic Development and Tourism
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DBF
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State of Hawaii Department of Budget and Finance
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DG
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Distributed generation
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DER
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Distributed energy resources
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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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EEPS
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Energy Efficiency Portfolio Standards
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EGU
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Electrical generating unit
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EIP
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2010 Executive Incentive Plan, as amended
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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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ERL
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Environmental Response Law of the State of Hawaii
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ERP/EAM
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Enterprise Resource Planning/Enterprise Asset Management
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Terms
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Definitions
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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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FDICIA
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Federal Deposit Insurance Corporation Improvement Act of 1991
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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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FICO
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Fair Isaac Corporation
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Fitch
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Fitch Ratings, Inc.
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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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GNMA
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Government National Mortgage Association
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Gramm Act
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Gramm-Leach-Bliley Act of 1999
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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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Hawaiian Electric’s MD&A
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Hawaiian Electric Company, Inc.’s Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K
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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 wound up in 2017), The Old Oahu Tug Service, Inc. (formerly Hawaiian Tug & Barge Corp.) and Pacific Current, LLC
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HEI's 2018 Proxy Statement
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Selected sections of Proxy Statement for the 2018 Annual Meeting of Shareholders of Hawaiian Electric Industries, Inc. to be filed after the date of this Form 10-K, which are incorporated in this Form 10-K by reference
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HEI’s MD&A
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Hawaiian Electric Industries, Inc.’s Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K
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HEIPI
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HEI Properties, Inc. (dissolved in 2015 and wound up in 2017), a wholly-owned subsidiary of Hawaiian Electric Industries, Inc.
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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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Hamakua Energy
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Hamakua Energy, LLC, an indirect subsidiary of HEI
and successor in interest to
Hamakua Energy Partners, L.P., an affiliate of Arclight Capital Partners (a Boston based private equity firm focused on energy infrastructure investments) and successor in interest to Encogen Hawaii, L.P.
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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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HTB
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Hawaiian Tug & Barge Corp. On November 10, 1999, HTB sold substantially all of its operating assets and the stock of its subsidiary, Young Brothers, Limited, and changed its name to The Old Oahu Tug Services, Inc.
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HTM
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Held-to-maturity
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IPP
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Independent power producer
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IRP
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Integrated resource plan
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IRR
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Interest rate risk
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Island Energy
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Island Energy Services, LLC (a fuel oil supplier and subsidiary of One Rock Capital Partners, L.P.), who purchased Chevron's Hawaii assets on November 1, 2016 and was assigned Chevron's fuel oil supply contracts with the Utilities.
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Kalaeloa
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Kalaeloa Partners, L.P.
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kV
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Kilovolt
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kW
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Kilowatt/s (as applicable)
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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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LSFO
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Low sulfur fuel oil
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LTIP
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Long-term incentive plan
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Terms
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Definitions
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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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MBtu
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Million British thermal unit
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MD&A
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Merger
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As provided in the Merger Agreement (see below), merger of NEE Acquisition Sub II, Inc. with and into HEI, with HEI surviving, and then merger of HEI with and into NEE Acquisition Sub I, LLC, with NEE Acquisition Sub I, LLC surviving as a wholly owned subsidiary of NextEra Energy, Inc.
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Merger Agreement
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Agreement and Plan of Merger by and among HEI, NextEra Energy, Inc., NEE Acquisition Sub II, Inc. and NEE Acquisition Sub I, LLC, dated December 3, 2014 and terminated July 16, 2016
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Moody’s
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Moody’s Investors Service’s
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MOU
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Memorandum of Understanding
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MPIR
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Major Project Interim Recovery
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MSFO
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Medium sulfur fuel oil
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MSR
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Mortgage servicing right
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MW
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Megawatt/s (as applicable)
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MWh
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Megawatthour/s (as applicable)
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NA
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Not applicable
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NAAQS
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National Ambient Air Quality Standard
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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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NM
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Not meaningful
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NPBC
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Net periodic benefits costs
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NPPC
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Net periodic pension costs
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NQSO
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Nonqualified stock options
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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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OTS
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Office of Thrift Supervision, Department of Treasury
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OTTI
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Other-than-temporary impairment
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PBO
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Projected benefit obligation
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PCB
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Polychlorinated biphenyls
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PGV
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Puna Geothermal Venture
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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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PSD
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Prevention of Significant Deterioration
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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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PURPA
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Public Utility Regulatory Policies Act of 1978
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PV
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Photovoltaic
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QF
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Qualifying Facility under the Public Utility Regulatory Policies Act of 1978
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QTL
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Qualified Thrift Lender
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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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Registrant
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Each of Hawaiian Electric Industries, Inc. and Hawaiian Electric Company, Inc.
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REIP
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Renewable Energy Infrastructure Program
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RFP
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Request for proposals
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RHI
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Renewable Hawaii, Inc., a wholly-owned nonregulated subsidiary of Hawaiian Electric Company, Inc.
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ROA
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Return on assets
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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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S&P
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Standard & Poor’s
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SAR
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Stock appreciation right
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Terms
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Definitions
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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 (or means refer to the referenced section in this document or the referenced exhibit or other document)
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SLHCs
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Savings & Loan Holding Companies
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SOIP
|
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1987 Stock Option and Incentive Plan, as amended. Shares of HEI common stock reserved for issuance under the SOIP were deregistered and delisted in 2015.
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Spin-Off
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The previously planned distribution to HEI shareholders of all of the common stock of ASB Hawaii immediately prior to the Merger, which was terminated
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SPRBs
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Special Purpose Revenue Bonds
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ST
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Steam turbine
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state
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State of Hawaii
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Tax Act
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2017 Tax Cuts and Jobs Act (H.R. 1, An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018)
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TDR
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Troubled debt restructuring
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Tesoro
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Tesoro Hawaii Corporation dba BHP Petroleum Americas Refining Inc., a fuel oil supplier
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TOOTS
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The Old Oahu Tug Service, Inc., a wholly-owned subsidiary of Hawaiian Electric Industries, Inc.
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Trust III
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HECO Capital Trust III
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UBC
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Uluwehiokama Biofuels Corp., a wholly-owned nonregulated subsidiary of Hawaiian Electric Company, Inc.
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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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Cautionary Note Regarding Forward-Looking Statements
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•
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international, national and local economic and political 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; the effects of changes that have or may occur in U.S. policy, such as with respect to immigration and trade; terrorist acts by ISIS or others; potential conflict or crisis with North Korea; and potential pandemics);
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•
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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, monetary policy and policy and regulation changes advanced or proposed by President Trump and his administration;
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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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•
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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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•
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changes in laws, regulations (including tax 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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•
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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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•
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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);
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•
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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, 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;
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•
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the ability of the Utilities to develop, implement and recover the costs of implementing the Utilities’ action plans included in their updated Power Supply Improvement Plans (PSIPs), Demand Response Portfolio Plan, Distributed Generation Interconnection Plan, Grid Modernization Plans, and business model changes, which have been and are continuing to be developed and updated in response to the orders issued by the PUC in April 2014, its April 2014 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 subsequent orders of the PUC;
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•
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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;
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•
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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);
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•
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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;
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•
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the impact of fuel price volatility on customer satisfaction and political and regulatory support for the Utilities;
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•
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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;
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•
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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;
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•
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the ability of IPPs to deliver the firm capacity anticipated in their power purchase agreements (PPAs);
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•
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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;
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•
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the ability of the Utilities to negotiate, periodically, favorable agreements for significant resources such as fuel supply contracts and collective bargaining agreements;
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•
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new technological developments that could affect the operations and prospects of the Utilities and ASB or their competitors such as the commercial development of energy storage and microgrids and banking through alternative channels;
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•
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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;
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•
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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 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);
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•
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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;
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•
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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;
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•
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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);
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•
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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);
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•
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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);
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•
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the ability of the Utilities to recover increasing costs and earn a reasonable return on capital investments not covered by RAMs;
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•
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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);
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•
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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;
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•
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changes by securities rating agencies in their ratings of the securities of HEI and Hawaiian Electric and the results of financing efforts;
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•
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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;
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•
|
the final outcome of tax positions taken by HEI, the Utilities and ASB;
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•
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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 (e.g., Item 1A. Risk Factors) and in other reports previously and subsequently filed by HEI and/or Hawaiian Electric with the Securities and Exchange Commission (SEC).
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ITEM 1.
|
BUSINESS
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December 31
|
2017
|
|
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2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
HEI
|
41
|
|
|
41
|
|
|
39
|
|
|
44
|
|
|
43
|
|
Hawaiian Electric and its subsidiaries
|
2,724
|
|
|
2,662
|
|
|
2,727
|
|
|
2,759
|
|
|
2,764
|
|
ASB
|
1,115
|
|
|
1,093
|
|
|
1,152
|
|
|
1,162
|
|
|
1,159
|
|
|
3,880
|
|
|
3,796
|
|
|
3,918
|
|
|
3,965
|
|
|
3,966
|
|
Years ended December 31
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
(dollars in thousands)
|
Customer accounts*
|
|
Electric sales revenues
|
|
Customer accounts*
|
|
Electric sales revenues
|
|
Customer accounts*
|
|
Electric sales revenues
|
|||||||||
Hawaiian Electric
|
304,948
|
|
|
$
|
1,592,016
|
|
|
304,261
|
|
|
$
|
1,466,225
|
|
|
302,958
|
|
|
$
|
1,636,245
|
|
Hawaii Electric Light
|
85,925
|
|
|
331,697
|
|
|
85,029
|
|
|
309,521
|
|
|
84,309
|
|
|
343,843
|
|
|||
Maui Electric
|
71,352
|
|
|
323,882
|
|
|
70,872
|
|
|
306,767
|
|
|
70,533
|
|
|
343,722
|
|
|||
|
462,225
|
|
|
$
|
2,247,595
|
|
|
460,162
|
|
|
$
|
2,082,513
|
|
|
457,800
|
|
|
$
|
2,323,810
|
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||||
KWH sales (millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential
|
2,334.5
|
|
|
2,332.7
|
|
|
2,396.5
|
|
|
2,379.7
|
|
|
2,450.9
|
|
|||||
Commercial
|
2,867.9
|
|
|
2,911.5
|
|
|
2,977.8
|
|
|
3,022.0
|
|
|
3,105.9
|
|
|||||
Large light and power
|
3,443.3
|
|
|
3,555.1
|
|
|
3,532.9
|
|
|
3,524.5
|
|
|
3,462.7
|
|
|||||
Other
|
44.7
|
|
|
46.0
|
|
|
49.3
|
|
|
50.0
|
|
|
50.0
|
|
|||||
|
8,690.4
|
|
|
8,845.3
|
|
|
8,956.5
|
|
|
8,976.2
|
|
|
9,069.5
|
|
|||||
KWH net generated and purchased (millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net generated
|
4,888.4
|
|
|
4,940.4
|
|
|
5,124.5
|
|
|
5,131.3
|
|
|
5,352.0
|
|
|||||
Purchased
|
4,247.1
|
|
|
4,349.1
|
|
|
4,308.3
|
|
|
4,306.7
|
|
|
4,195.2
|
|
|||||
|
9,135.5
|
|
|
9,289.5
|
|
|
9,432.8
|
|
|
9,438.0
|
|
|
9,547.2
|
|
|||||
Losses and system uses (%)
|
4.7
|
|
|
4.6
|
|
|
4.8
|
|
|
4.7
|
|
|
4.8
|
|
|||||
Energy supply (December 31)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net generating capability—MW
|
1,673
|
|
|
1,669
|
|
|
1,669
|
|
|
1,787
|
|
|
1,787
|
|
|||||
Firm and other purchased capability—MW
|
551
|
|
|
551
|
|
|
555
|
|
|
575
|
|
|
567
|
|
|||||
|
2,224
|
|
|
2,220
|
|
|
2,224
|
|
|
2,362
|
|
|
2,354
|
|
|||||
Net peak demand—MW
1
|
1,584
|
|
|
1,593
|
|
|
1,610
|
|
|
1,554
|
|
|
1,535
|
|
|||||
Btu per net KWH generated
|
10,812
|
|
|
10,710
|
|
|
10,632
|
|
|
10,613
|
|
|
10,570
|
|
|||||
Average fuel oil cost per MBtu (cents)
|
1,114.3
|
|
|
862.3
|
|
|
1,206.5
|
|
|
2,087.6
|
|
|
2,103.2
|
|
|||||
Customer accounts (December 31)
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential
|
406,241
|
|
|
402,818
|
|
|
400,655
|
|
|
398,256
|
|
|
394,910
|
|
|||||
Commercial
|
53,732
|
|
|
55,089
|
|
|
54,878
|
|
|
54,924
|
|
|
54,616
|
|
|||||
Large light and power
|
656
|
|
|
670
|
|
|
659
|
|
|
596
|
|
|
556
|
|
|||||
Other
|
1,596
|
|
|
1,585
|
|
|
1,608
|
|
|
1,640
|
|
|
1,660
|
|
|||||
|
462,225
|
|
|
460,162
|
|
|
457,800
|
|
|
455,416
|
|
|
451,742
|
|
|||||
Electric revenues (thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential
|
$
|
691,857
|
|
|
$
|
638,776
|
|
|
$
|
709,886
|
|
|
$
|
879,605
|
|
|
$
|
892,438
|
|
Commercial
|
766,921
|
|
|
711,553
|
|
|
798,202
|
|
|
1,027,588
|
|
|
1,044,166
|
|
|||||
Large light and power
|
776,808
|
|
|
720,878
|
|
|
802,366
|
|
|
1,051,119
|
|
|
1,015,079
|
|
|||||
Other
|
12,009
|
|
|
11,306
|
|
|
13,356
|
|
|
17,163
|
|
|
17,008
|
|
|||||
|
$
|
2,247,595
|
|
|
$
|
2,082,513
|
|
|
$
|
2,323,810
|
|
|
$
|
2,975,475
|
|
|
$
|
2,968,691
|
|
Average revenue per KWH sold (cents)
|
25.86
|
|
|
23.54
|
|
|
25.90
|
|
|
33.15
|
|
|
32.73
|
|
|||||
Residential
|
29.64
|
|
|
27.38
|
|
|
29.62
|
|
|
36.96
|
|
|
36.41
|
|
|||||
Commercial
|
26.74
|
|
|
24.44
|
|
|
26.81
|
|
|
34.00
|
|
|
33.62
|
|
|||||
Large light and power
|
22.56
|
|
|
20.28
|
|
|
22.71
|
|
|
29.82
|
|
|
29.31
|
|
|||||
Other
|
26.82
|
|
|
24.61
|
|
|
27.05
|
|
|
34.36
|
|
|
34.02
|
|
|||||
Residential statistics
|
|
|
|
|
|
|
|
|
|
||||||||||
Average annual use per customer account (KWH)
|
5,779
|
|
|
5,806
|
|
|
5,996
|
|
|
6,000
|
|
|
6,220
|
|
|||||
Average annual revenue per customer account
|
$
|
1,713
|
|
|
$
|
1,590
|
|
|
$
|
1,776
|
|
|
$
|
2,218
|
|
|
$
|
2,265
|
|
Average number of customer accounts
|
403,983
|
|
|
401,796
|
|
|
399,674
|
|
|
396,640
|
|
|
394,024
|
|
1
|
Sum of the net peak demands on all islands served, noncoincident and nonintegrated.
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
|
|
||||||||||
|
Island of
Oahu |
|
Island of
Hawaii |
|
Island of
Maui |
|
Island of
Lanai |
|
Island of
Molokai |
|
Total
|
|
||||||
Net generating and firm purchased capability (MW) as of December 31, 2017
1
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Conventional oil-fired steam units
|
999.5
|
|
|
50.1
|
|
|
35.9
|
|
|
—
|
|
|
—
|
|
|
1,085.5
|
|
|
Diesel
|
—
|
|
|
29.5
|
|
|
96.8
|
|
|
10.1
|
|
|
9.6
|
|
|
146.0
|
|
|
Combustion turbines (peaking units)
|
101.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101.8
|
|
|
Other combustion turbines
|
—
|
|
|
46.3
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|
48.5
|
|
|
Combined-cycle unit
|
—
|
|
|
56.3
|
|
|
113.6
|
|
|
—
|
|
|
—
|
|
|
169.9
|
|
|
Biodiesel
|
121.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
121.0
|
|
|
Firm contract power
2
|
456.5
|
|
|
94.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
551.1
|
|
|
|
1,678.8
|
|
|
276.8
|
|
|
246.3
|
|
|
10.1
|
|
|
11.8
|
|
|
2,223.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net peak demand (MW)
3
|
1,184.0
|
|
|
190.5
|
|
|
198.5
|
|
|
5.4
|
|
|
5.9
|
|
|
1,584.3
|
|
|
Reserve margin
|
41.0
|
%
|
|
45.3
|
%
|
|
25.0
|
%
|
|
87.0
|
%
|
|
100.0
|
%
|
|
42.0
|
%
|
|
Annual load factor
|
66.1
|
%
|
|
67.3
|
%
|
|
63.0
|
%
|
|
66.2
|
%
|
|
60.2
|
%
|
|
65.8
|
%
|
|
KWH net generated and purchased (millions)
|
6,854.7
|
|
|
1,123.6
|
|
|
1,094.7
|
|
|
31.4
|
|
|
31.1
|
|
|
9,135.5
|
|
|
1
|
Hawaiian Electric units at normal ratings; Hawaii Electric Light and Maui Electric units at reserve ratings.
|
2
|
Nonutility generators - Hawaiian Electric: 208 MW (Kalaeloa Partners, L.P., oil-fired), 180 MW (AES Hawaii, Inc., coal-fired) and 68.5 MW (HPOWER, refuse-fired); Hawaii Electric Light: 34.6 MW (Puna Geothermal Venture, geothermal) and 60 MW (Hamakua Energy, LLC, oil-fired).
|
3
|
Noncoincident and nonintegrated.
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Consolidated
|
||||||||||||||||
|
$/Barrel
|
|
¢/MBtu
|
|
$/Barrel
|
|
¢/MBtu
|
|
$/Barrel
|
|
¢/MBtu
|
|
$/Barrel
|
|
¢/MBtu
|
||||||||
2017
|
67.96
|
|
|
1,087.1
|
|
|
68.02
|
|
|
1,125.2
|
|
|
72.29
|
|
|
1,214.6
|
|
|
68.78
|
|
|
1,114.3
|
|
2016
|
51.30
|
|
|
815.2
|
|
|
53.27
|
|
|
876.9
|
|
|
62.21
|
|
|
1,048.6
|
|
|
53.49
|
|
|
862.3
|
|
2015
|
71.86
|
|
|
1,144.8
|
|
|
79.03
|
|
|
1,307.3
|
|
|
84.38
|
|
|
1,425.7
|
|
|
74.71
|
|
|
1,206.5
|
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
||||||||||||
|
% LSFO
|
|
|
% Biodiesel/Diesel
|
|
|
% IFO
|
|
|
% Diesel
|
|
|
% IFO
|
|
|
% Diesel
|
|
2017
|
95
|
|
|
5
|
|
|
43
|
|
|
57
|
|
|
23
|
|
|
77
|
|
2016
|
97
|
|
|
3
|
|
|
49
|
|
|
51
|
|
|
19
|
|
|
81
|
|
2015
|
96
|
|
|
4
|
|
|
43
|
|
|
57
|
|
|
16
|
|
|
84
|
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
Common equity to assets ratio
|
|
|
|
|
|
|
|
|
Average common equity divided by average total assets
|
9.10
|
%
|
|
9.34
|
%
|
|
9.53
|
%
|
Return on assets
|
|
|
|
|
|
|||
Net income divided by average total assets
|
1.02
|
|
|
0.92
|
|
|
0.95
|
|
Return on common equity
|
|
|
|
|
|
|||
Net income divided by average common equity
|
11.20
|
|
|
9.90
|
|
|
9.93
|
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||||||||
(in thousands)
|
Rate
|
|
Volume
|
|
Total
|
|
Rate
|
|
Volume
|
|
Total
|
||||||||||||
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-earning deposits
|
$
|
488
|
|
|
$
|
27
|
|
|
$
|
515
|
|
|
$
|
228
|
|
|
$
|
(169
|
)
|
|
$
|
59
|
|
FHLB stock
|
24
|
|
|
(7
|
)
|
|
17
|
|
|
192
|
|
|
(148
|
)
|
|
44
|
|
||||||
Investment securities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Taxable
|
1,691
|
|
|
7,008
|
|
|
8,699
|
|
|
(1,018
|
)
|
|
4,961
|
|
|
3,943
|
|
||||||
Non-taxable
|
3
|
|
|
624
|
|
|
627
|
|
|
14
|
|
|
14
|
|
|
28
|
|
||||||
Total investment securities
|
1,694
|
|
|
7,632
|
|
|
9,326
|
|
|
(1,004
|
)
|
|
4,975
|
|
|
3,971
|
|
||||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential 1-4 family
|
(1,488
|
)
|
|
148
|
|
|
(1,340
|
)
|
|
(2,103
|
)
|
|
444
|
|
|
(1,659
|
)
|
||||||
Commercial real estate
|
1,234
|
|
|
632
|
|
|
1,866
|
|
|
1,037
|
|
|
8,345
|
|
|
9,382
|
|
||||||
Home equity line of credit
|
781
|
|
|
971
|
|
|
1,752
|
|
|
686
|
|
|
1,052
|
|
|
1,738
|
|
||||||
Residential land
|
13
|
|
|
(120
|
)
|
|
(107
|
)
|
|
(77
|
)
|
|
94
|
|
|
17
|
|
||||||
Commercial
|
2,395
|
|
|
(4,733
|
)
|
|
(2,338
|
)
|
|
2,538
|
|
|
(2,077
|
)
|
|
461
|
|
||||||
Consumer
|
1,134
|
|
|
6,514
|
|
|
7,648
|
|
|
1,908
|
|
|
3,145
|
|
|
5,053
|
|
||||||
Total loans
|
4,069
|
|
|
3,412
|
|
|
7,481
|
|
|
3,989
|
|
|
11,003
|
|
|
14,992
|
|
||||||
Total increase in interest income
|
6,275
|
|
|
11,064
|
|
|
17,339
|
|
|
3,405
|
|
|
15,661
|
|
|
19,066
|
|
||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Savings
|
—
|
|
|
(165
|
)
|
|
(165
|
)
|
|
(103
|
)
|
|
(42
|
)
|
|
(145
|
)
|
||||||
Interest-bearing checking
|
(56
|
)
|
|
(9
|
)
|
|
(65
|
)
|
|
—
|
|
|
(34
|
)
|
|
(34
|
)
|
||||||
Money market
|
13
|
|
|
21
|
|
|
34
|
|
|
(5
|
)
|
|
8
|
|
|
3
|
|
||||||
Time certificates
|
(928
|
)
|
|
(1,369
|
)
|
|
(2,297
|
)
|
|
(589
|
)
|
|
(1,054
|
)
|
|
(1,643
|
)
|
||||||
Advances from Federal Home Loan Bank
|
267
|
|
|
648
|
|
|
915
|
|
|
21
|
|
|
(35
|
)
|
|
(14
|
)
|
||||||
Securities sold under agreements to repurchase
|
1,433
|
|
|
744
|
|
|
2,177
|
|
|
(285
|
)
|
|
689
|
|
|
404
|
|
||||||
Total decrease (increase) in interest expense
|
729
|
|
|
(130
|
)
|
|
599
|
|
|
(961
|
)
|
|
(468
|
)
|
|
(1,429
|
)
|
||||||
Increase in net interest income
|
$
|
7,004
|
|
|
$
|
10,934
|
|
|
$
|
17,938
|
|
|
$
|
2,444
|
|
|
$
|
15,193
|
|
|
$
|
17,637
|
|
December 31
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||||||||||||
(dollars in thousands)
|
Balance
|
|
% of
total
|
|
|
Balance
|
|
% of
total |
|
|
Balance
|
|
% of
total |
|
|
Balance
|
|
% of
total |
|
|
Balance
|
|
% of
total |
|
||||||||||
Real estate:
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
$
|
2,118,047
|
|
|
45.3
|
|
|
$
|
2,048,051
|
|
|
43.2
|
|
|
$
|
2,069,665
|
|
|
44.8
|
|
|
$
|
2,044,205
|
|
|
46.0
|
|
|
$
|
2,006,007
|
|
|
48.2
|
|
Commercial real estate
|
733,106
|
|
|
15.7
|
|
|
800,395
|
|
|
16.9
|
|
|
690,561
|
|
|
14.9
|
|
|
531,917
|
|
|
12.0
|
|
|
440,443
|
|
|
10.6
|
|
|||||
Home equity line of credit
|
913,052
|
|
|
19.6
|
|
|
863,163
|
|
|
18.2
|
|
|
846,294
|
|
|
18.3
|
|
|
818,815
|
|
|
18.4
|
|
|
739,331
|
|
|
17.8
|
|
|||||
Residential land
|
15,797
|
|
|
0.3
|
|
|
18,889
|
|
|
0.4
|
|
|
18,229
|
|
|
0.4
|
|
|
16,240
|
|
|
0.4
|
|
|
16,176
|
|
|
0.4
|
|
|||||
Commercial construction
|
108,273
|
|
|
2.3
|
|
|
126,768
|
|
|
2.7
|
|
|
100,796
|
|
|
2.2
|
|
|
96,438
|
|
|
2.2
|
|
|
52,112
|
|
|
1.3
|
|
|||||
Residential construction
|
14,910
|
|
|
0.3
|
|
|
16,080
|
|
|
0.3
|
|
|
14,089
|
|
|
0.3
|
|
|
18,961
|
|
|
0.4
|
|
|
12,774
|
|
|
0.3
|
|
|||||
Total real estate
|
3,903,185
|
|
|
83.5
|
|
|
3,873,346
|
|
|
81.7
|
|
|
3,739,634
|
|
|
80.9
|
|
|
3,526,576
|
|
|
79.4
|
|
|
3,266,843
|
|
|
78.6
|
|
|||||
Commercial
|
544,828
|
|
|
11.7
|
|
|
692,051
|
|
|
14.6
|
|
|
758,659
|
|
|
16.4
|
|
|
791,757
|
|
|
17.8
|
|
|
783,388
|
|
|
18.8
|
|
|||||
Consumer
|
223,564
|
|
|
4.8
|
|
|
178,222
|
|
|
3.7
|
|
|
123,775
|
|
|
2.7
|
|
|
122,656
|
|
|
2.8
|
|
|
108,722
|
|
|
2.6
|
|
|||||
Total loans
|
4,671,577
|
|
|
100.0
|
|
|
4,743,619
|
|
|
100.0
|
|
|
4,622,068
|
|
|
100.0
|
|
|
4,440,989
|
|
|
100.0
|
|
|
4,158,953
|
|
|
100.0
|
|
|||||
Less: Deferred fees and discounts
|
(809
|
)
|
|
|
|
|
(4,926
|
)
|
|
|
|
|
(6,249
|
)
|
|
|
|
|
(6,338
|
)
|
|
|
|
|
(8,724
|
)
|
|
|
|
|||||
Allowance for loan losses
|
(53,637
|
)
|
|
|
|
|
(55,533
|
)
|
|
|
|
|
(50,038
|
)
|
|
|
|
|
(45,618
|
)
|
|
|
|
|
(40,116
|
)
|
|
|
|
|||||
Total loans, net
|
$
|
4,617,131
|
|
|
|
|
|
$
|
4,683,160
|
|
|
|
|
|
$
|
4,565,781
|
|
|
|
|
|
$
|
4,389,033
|
|
|
|
|
|
$
|
4,110,113
|
|
|
|
|
1
|
Includes renegotiated loans.
|
December 31
|
2017
|
||||||||||||||
Due
|
In
1 year
or less
|
|
|
After 1 year
through
5 years
|
|
|
After
5 years
|
|
|
Total
|
|
||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial – Fixed
|
$
|
53
|
|
|
$
|
121
|
|
|
$
|
18
|
|
|
$
|
192
|
|
Commercial – Adjustable
|
153
|
|
|
172
|
|
|
28
|
|
|
353
|
|
||||
Total commercial
|
206
|
|
|
293
|
|
|
46
|
|
|
545
|
|
||||
Commercial construction – Fixed
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial construction – Adjustable
|
59
|
|
|
22
|
|
|
27
|
|
|
108
|
|
||||
Total commercial construction
|
59
|
|
|
22
|
|
|
27
|
|
|
108
|
|
||||
Residential construction – Fixed
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||
Residential construction – Adjustable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total residential construction
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||
Total loans – Fixed
|
68
|
|
|
121
|
|
|
18
|
|
|
207
|
|
||||
Total loans – Adjustable
|
212
|
|
|
194
|
|
|
55
|
|
|
461
|
|
||||
Total loans
|
$
|
280
|
|
|
$
|
315
|
|
|
$
|
73
|
|
|
$
|
668
|
|
December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Nonaccrual loans—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
$
|
12,598
|
|
|
$
|
11,154
|
|
|
$
|
20,554
|
|
|
$
|
19,253
|
|
|
$
|
19,679
|
|
Commercial real estate
|
—
|
|
|
223
|
|
|
1,188
|
|
|
5,112
|
|
|
4,439
|
|
|||||
Home equity line of credit
|
4,466
|
|
|
3,080
|
|
|
2,254
|
|
|
1,087
|
|
|
2,060
|
|
|||||
Residential land
|
841
|
|
|
878
|
|
|
970
|
|
|
720
|
|
|
3,161
|
|
|||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total real estate
|
17,905
|
|
|
15,335
|
|
|
24,966
|
|
|
26,172
|
|
|
29,339
|
|
|||||
Commercial
|
3,069
|
|
|
6,708
|
|
|
20,174
|
|
|
10,053
|
|
|
18,781
|
|
|||||
Consumer
|
2,617
|
|
|
1,282
|
|
|
895
|
|
|
661
|
|
|
401
|
|
|||||
Total nonaccrual loans
|
$
|
23,591
|
|
|
$
|
23,325
|
|
|
$
|
46,035
|
|
|
$
|
36,886
|
|
|
$
|
48,521
|
|
Troubled debt restructured loans not included above—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
$
|
10,982
|
|
|
$
|
14,450
|
|
|
$
|
13,962
|
|
|
$
|
13,525
|
|
|
$
|
9,744
|
|
Commercial real estate
|
1,016
|
|
|
1,346
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Home equity line of credit
|
6,584
|
|
|
4,934
|
|
|
2,467
|
|
|
480
|
|
|
171
|
|
|||||
Residential land
|
425
|
|
|
2,751
|
|
|
4,713
|
|
|
7,130
|
|
|
7,476
|
|
|||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total real estate
|
19,007
|
|
|
23,481
|
|
|
21,142
|
|
|
21,135
|
|
|
17,391
|
|
|||||
Commercial
|
1,741
|
|
|
14,146
|
|
|
1,104
|
|
|
2,972
|
|
|
1,649
|
|
|||||
Consumer
|
66
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total troubled debt restructured loans
|
$
|
20,814
|
|
|
$
|
37,637
|
|
|
$
|
22,246
|
|
|
$
|
24,107
|
|
|
$
|
19,040
|
|
(dollars in millions)
|
Year ended December 31, 2017
|
||
Gross amount of interest income that would have been recorded if the loans had been current in accordance with original contractual terms, and had been outstanding throughout the period or since origination, if held for only part of the period
1
|
$
|
2
|
|
Interest income actually recognized
|
1
|
|
|
Total interest income foregone
|
$
|
1
|
|
1
|
Based on the contractual rate that was being charged at the time the loan was restructured or placed on nonaccrual status.
|
(dollars in thousands)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||||
Allowance for loan losses, January 1
|
$
|
55,533
|
|
|
$
|
50,038
|
|
|
$
|
45,618
|
|
|
$
|
40,116
|
|
|
$
|
41,985
|
|
Provision for loan losses
|
10,901
|
|
|
16,763
|
|
|
6,275
|
|
|
6,126
|
|
|
1,507
|
|
|||||
Charge-offs
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential 1-4 family
|
826
|
|
|
639
|
|
|
356
|
|
|
987
|
|
|
1,162
|
|
|||||
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Home equity line of credit
|
14
|
|
|
112
|
|
|
205
|
|
|
196
|
|
|
782
|
|
|||||
Residential land
|
210
|
|
|
138
|
|
|
—
|
|
|
81
|
|
|
485
|
|
|||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total real estate
|
1,050
|
|
|
889
|
|
|
561
|
|
|
1,264
|
|
|
2,429
|
|
|||||
Commercial
|
4,006
|
|
|
5,943
|
|
|
1,074
|
|
|
1,872
|
|
|
3,056
|
|
|||||
Consumer
|
11,757
|
|
|
7,413
|
|
|
4,791
|
|
|
2,414
|
|
|
2,717
|
|
|||||
Total charge-offs
|
16,813
|
|
|
14,245
|
|
|
6,426
|
|
|
5,550
|
|
|
8,202
|
|
|||||
Recoveries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential 1-4 family
|
157
|
|
|
421
|
|
|
226
|
|
|
1,180
|
|
|
1,881
|
|
|||||
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Home equity line of credit
|
308
|
|
|
59
|
|
|
80
|
|
|
752
|
|
|
358
|
|
|||||
Residential land
|
482
|
|
|
461
|
|
|
507
|
|
|
469
|
|
|
868
|
|
|||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total real estate
|
947
|
|
|
941
|
|
|
813
|
|
|
2,401
|
|
|
3,107
|
|
|||||
Commercial
|
1,852
|
|
|
1,093
|
|
|
2,773
|
|
|
1,636
|
|
|
1,089
|
|
|||||
Consumer
|
1,217
|
|
|
943
|
|
|
985
|
|
|
889
|
|
|
630
|
|
|||||
Total recoveries
|
4,016
|
|
|
2,977
|
|
|
4,571
|
|
|
4,926
|
|
|
4,826
|
|
|||||
Net charge-offs
|
12,797
|
|
|
11,268
|
|
|
1,855
|
|
|
624
|
|
|
3,376
|
|
|||||
Allowance for loan losses, December 31
|
$
|
53,637
|
|
|
$
|
55,533
|
|
|
$
|
50,038
|
|
|
$
|
45,618
|
|
|
$
|
40,116
|
|
Ratio of allowance for loan losses to loans receivable held for investment
|
1.15
|
%
|
|
1.17
|
%
|
|
1.08
|
%
|
|
1.03
|
%
|
|
0.97
|
%
|
|||||
Ratio of provision for loan losses during the year to average total loans
|
0.23
|
%
|
|
0.36
|
%
|
|
0.14
|
%
|
|
0.14
|
%
|
|
0.04
|
%
|
|||||
Ratio of net charge-offs during the year to average total loans
|
0.27
|
%
|
|
0.24
|
%
|
|
0.04
|
%
|
|
0.01
|
%
|
|
0.09
|
%
|
December 31
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||||||
(dollars in thousands)
|
Allow-ance balance
|
|
Allowance
to loan
receivable
%
|
|
Loan
receivable
% of
total
|
|
Allow-ance balance
|
|
Allowance
to loan receivable % |
|
Loan
receivable % of total |
|
Allow-ance balance
|
|
Allowance
to loan receivable % |
|
Loan
receivable % of total |
||||||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Residential 1-4 family
|
$
|
2,902
|
|
|
0.14
|
|
|
45.3
|
|
|
$
|
2,873
|
|
|
0.14
|
|
|
43.2
|
|
|
$
|
4,186
|
|
|
0.20
|
|
|
44.8
|
|
Commercial real estate
|
15,796
|
|
|
2.15
|
|
|
15.7
|
|
|
16,004
|
|
|
2.00
|
|
|
16.9
|
|
|
11,342
|
|
|
1.64
|
|
|
14.9
|
|
|||
Home equity line of credit
|
7,522
|
|
|
0.82
|
|
|
19.6
|
|
|
5,039
|
|
|
0.58
|
|
|
18.2
|
|
|
7,260
|
|
|
0.86
|
|
|
18.3
|
|
|||
Residential land
|
896
|
|
|
5.67
|
|
|
0.3
|
|
|
1,738
|
|
|
9.20
|
|
|
0.4
|
|
|
1,671
|
|
|
9.17
|
|
|
0.4
|
|
|||
Commercial construction
|
4,671
|
|
|
4.31
|
|
|
2.3
|
|
|
6,449
|
|
|
5.09
|
|
|
2.7
|
|
|
4,461
|
|
|
4.43
|
|
|
2.2
|
|
|||
Residential construction
|
12
|
|
|
0.08
|
|
|
0.3
|
|
|
12
|
|
|
0.07
|
|
|
0.3
|
|
|
13
|
|
|
0.09
|
|
|
0.3
|
|
|||
Total real estate
|
31,799
|
|
|
0.81
|
|
|
83.5
|
|
|
32,115
|
|
|
0.83
|
|
|
81.7
|
|
|
28,933
|
|
|
0.77
|
|
|
80.9
|
|
|||
Commercial
|
10,851
|
|
|
1.99
|
|
|
11.7
|
|
|
16,618
|
|
|
2.40
|
|
|
14.6
|
|
|
17,208
|
|
|
2.27
|
|
|
16.4
|
|
|||
Consumer
|
10,987
|
|
|
4.91
|
|
|
4.8
|
|
|
6,800
|
|
|
3.82
|
|
|
3.7
|
|
|
3,897
|
|
|
3.15
|
|
|
2.7
|
|
|||
|
53,637
|
|
|
1.15
|
|
|
100.0
|
|
|
55,533
|
|
|
1.17
|
|
|
100.0
|
|
|
50,038
|
|
|
1.08
|
|
|
100.0
|
|
|||
Unallocated
|
—
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|||
Total allowance for loan losses
|
$
|
53,637
|
|
|
|
|
|
|
|
|
$
|
55,533
|
|
|
|
|
|
|
|
|
$
|
50,038
|
|
|
|
|
|
|
|
December 31
|
2014
|
|
2013
|
||||||||||||||||
(dollars in thousands)
|
Allowance balance
|
|
Allowance
to loan receivable % |
|
Loan
receivable % of total |
|
Allowance balance
|
|
Allowance
to loan receivable % |
|
Loan
receivable % of total |
||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Residential 1-4 family
|
$
|
4,662
|
|
|
0.23
|
|
|
46.0
|
|
|
$
|
5,534
|
|
|
0.28
|
|
|
48.2
|
|
Commercial real estate
|
8,954
|
|
|
1.68
|
|
|
12.0
|
|
|
5,059
|
|
|
1.15
|
|
|
10.6
|
|
||
Home equity line of credit
|
6,982
|
|
|
0.85
|
|
|
18.4
|
|
|
5,229
|
|
|
0.71
|
|
|
17.8
|
|
||
Residential land
|
1,875
|
|
|
11.55
|
|
|
0.4
|
|
|
1,817
|
|
|
11.23
|
|
|
0.4
|
|
||
Commercial construction
|
5,471
|
|
|
5.67
|
|
|
2.2
|
|
|
2,397
|
|
|
4.60
|
|
|
1.3
|
|
||
Residential construction
|
28
|
|
|
0.15
|
|
|
0.4
|
|
|
19
|
|
|
0.15
|
|
|
0.3
|
|
||
Total real estate
|
27,972
|
|
|
0.79
|
|
|
79.4
|
|
|
20,055
|
|
|
0.61
|
|
|
78.6
|
|
||
Commercial
|
14,017
|
|
|
1.77
|
|
|
17.8
|
|
|
15,803
|
|
|
2.02
|
|
|
18.8
|
|
||
Consumer
|
3,629
|
|
|
2.96
|
|
|
2.8
|
|
|
2,367
|
|
|
2.18
|
|
|
2.6
|
|
||
|
45,618
|
|
|
1.03
|
|
|
100.0
|
|
|
38,225
|
|
|
0.92
|
|
|
100.0
|
|
||
Unallocated
|
—
|
|
|
|
|
|
|
|
|
1,891
|
|
|
|
|
|
|
|
||
Total allowance for loan losses
|
$
|
45,618
|
|
|
|
|
|
|
|
|
$
|
40,116
|
|
|
|
|
|
|
|
|
In 1 year
or less
|
|
After 1 year
through 5 years
|
|
After 5 years
through 10 years
|
|
After
10 years
|
|
Mortgage-Related Securities
|
|
Total
1
|
||||||||||||
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Treasury and federal agency obligations
|
$
|
5
|
|
|
$
|
87
|
|
|
$
|
80
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
186
|
|
Mortgage-related securities - FNMA, FHLMC and GNMA
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,265
|
|
|
1,265
|
|
||||||
Mortgage revenue bond
2
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||||
|
$
|
5
|
|
|
$
|
87
|
|
|
$
|
80
|
|
|
$
|
29
|
|
|
$
|
1,265
|
|
|
$
|
1,466
|
|
Weighted average yield
|
1.63
|
%
|
|
1.85
|
%
|
|
2.30
|
%
|
|
3.31
|
%
|
|
2.24
|
%
|
|
2.24
|
%
|
1
|
As of
December 31, 2017
, no investment exceeded 10% of shareholder's equity.
|
2
|
Weighted average yield on the mortgage revenue bond is computed on a tax equivalent basis using a federal statutory tax rate of 35%.
|
Years ended December 31
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||||||
(dollars in thousands)
|
Average
balance
|
|
|
% of
total interest-bearing
deposits
|
|
|
Weighted
average
rate %
|
|
|
Average
balance
|
|
|
% of
total interest-bearing deposits |
|
|
Weighted
average
rate %
|
|
|
Average
balance |
|
|
% of
total interest-bearing deposits |
|
|
Weighted
average rate % |
|
|||
Interest-bearing deposit liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Savings
|
$
|
2,278,396
|
|
|
56.7
|
%
|
|
0.07
|
%
|
|
$
|
2,117,186
|
|
|
57.5
|
%
|
|
0.07
|
%
|
|
$
|
1,980,151
|
|
|
58.6
|
%
|
|
0.06
|
%
|
Checking
|
902,678
|
|
|
22.5
|
|
|
0.03
|
|
|
839,339
|
|
|
22.8
|
|
|
0.02
|
|
|
782,811
|
|
|
23.2
|
|
|
0.02
|
|
|||
Money market
|
142,068
|
|
|
3.5
|
|
|
0.12
|
|
|
160,700
|
|
|
4.4
|
|
|
0.13
|
|
|
164,568
|
|
|
4.9
|
|
|
0.12
|
|
|||
Certificate
|
696,799
|
|
|
17.3
|
|
|
1.10
|
|
|
565,135
|
|
|
15.3
|
|
|
0.95
|
|
|
449,179
|
|
|
13.3
|
|
|
0.83
|
|
|||
Total interest-bearing deposit liabilities
|
$
|
4,019,941
|
|
|
100.0
|
%
|
|
0.24
|
%
|
|
$
|
3,682,360
|
|
|
100.0
|
%
|
|
0.19
|
%
|
|
$
|
3,376,709
|
|
|
100.0
|
%
|
|
0.16
|
%
|
Total noninterest-bearing demand deposit liabilities
|
1,672,780
|
|
|
|
|
|
|
1,559,132
|
|
|
|
|
|
|
1,426,962
|
|
|
|
|
|
|||||||||
Total deposit liabilities
|
$
|
5,692,721
|
|
|
|
|
|
|
$
|
5,241,492
|
|
|
|
|
|
|
$
|
4,803,671
|
|
|
|
|
|
(in thousands)
|
Amount
|
|
|
Three months or less
|
$
|
163,207
|
|
Greater than three months through six months
|
84,595
|
|
|
Greater than six months through twelve months
|
32,723
|
|
|
Greater than twelve months
|
152,872
|
|
|
|
$
|
433,397
|
|
|
Number of branches
|
|||||||
December 31, 2017
|
Owned
|
|
Leased
|
|
Total
|
|||
Oahu
|
8
|
|
|
26
|
|
|
34
|
|
Maui
|
3
|
|
|
3
|
|
|
6
|
|
Hawaii
|
3
|
|
|
2
|
|
|
5
|
|
Kauai
|
2
|
|
|
1
|
|
|
3
|
|
Molokai
|
—
|
|
|
1
|
|
|
1
|
|
|
16
|
|
|
33
|
|
|
49
|
|
ITEM 1A.
|
RISK FACTORS
|
•
|
the provisions of an HEI agreement with the PUC, which could limit the ability of HEI’s principal electric public utility subsidiary, Hawaiian Electric, to pay dividends to HEI in the event that the consolidated common stock equity of the Utilities falls below 35% of total capitalization of the electric utilities;
|
•
|
the provisions of an HEI agreement entered into with federal bank regulators in connection with its acquisition of its bank subsidiary, ASB, which require HEI to contribute additional capital to ASB (up to a maximum amount of additional capital of $28.3 million as of
December 31, 2017
) upon request of the regulators in order to maintain ASB’s regulatory capital at the level required by regulation;
|
•
|
the minimum capital and capital distribution regulations of the OCC that are applicable to ASB and capital regulations that become applicable to HEI and ASB Hawaii;
|
•
|
the receipt of a letter from the FRB communicating to the OCC and FRB's non-objection to the payment of any dividend ASB proposes to declare and pay to ASB Hawaii and HEI; and
|
•
|
the provisions of preferred stock resolutions and debt instruments of HEI and its subsidiaries.
|
•
|
ASB, one of the largest financial institutions in the state, is in direct competition for deposits and loans not only with two larger institutions that have substantial capital, technology and marketing resources, but also with smaller Hawaii institutions and other U.S. institutions, including credit unions, mutual funds, mortgage brokers, finance companies and investment banking firms. Larger financial institutions may have greater access to capital at lower costs, which could impair ASB’s ability to compete effectively. Significant advances in technology could render the operations of ASB less competitive or obsolete.
|
•
|
The Utilities face competition from IPPs; customer self-generation, with or without cogeneration; customer energy storage; and the potential formation of community-based, cooperative ownership or municipality structures for electrical service on all islands it serves. With the exception of certain identified projects, the Utilities are required to use competitive bidding to acquire a future generation resource unless the PUC finds competitive bidding to be unsuitable. The PUC set policies for distributed generation (DG) interconnection agreements and standby rates. The results of competitive bidding, competition from IPPs, customer self-generation, and potential cooperative ownership or municipality structures for electric utility service, and the rate at which technological developments facilitating nonutility generation of electricity, combined heat and power technology, off-grid microgrids, and customer energy storage may adversely affect the Utilities and the results of their operations.
|
•
|
New technological developments, such as the commercial development of energy storage and microgrids, may render the operations of the Utilities less competitive or outdated.
|
•
|
local, regional, national and other economic and political conditions that could result in declines in employment and real estate values, which in turn could adversely affect the ability of borrowers to make loan payments and the ability of ASB to recover the full amounts owing to it under defaulted loans;
|
•
|
the ability of borrowers to obtain insurance and the ability of ASB to place insurance where borrowers fail to do so, particularly in the event of catastrophic damage to collateral securing loans made by ASB;
|
•
|
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 profiles and asset quality, which may increase or decrease the required level of allowance for loan losses;
|
•
|
technological disruptions affecting ASB’s operations or financial or operational difficulties experienced by any outside vendor on whom ASB relies to provide key components of its business operations, such as business processing, network access or internet connections;
|
•
|
the impact of legislative and regulatory changes, including changes affecting capital requirements, increasing oversight of and reporting by banks, or affecting the lending programs or other business activities of ASB;
|
•
|
additional legislative changes regulating the assessment of overdraft, interchange and credit card fees, which can have a negative impact on noninterest income;
|
•
|
public opinion about ASB and financial institutions in general, which, if negative, could impact the public’s trust and confidence in ASB and adversely affect ASB’s ability to attract and retain customers and expose ASB to adverse legal and regulatory consequences;
|
•
|
increases in operating costs (including employee compensation expense and benefits and regulatory compliance costs), inflation and other factors, that exceed increases in ASB’s net interest, fee and other income; and
|
•
|
the ability of ASB to maintain or increase the level of deposits, ASB’s lowest costing funds.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
Name
|
|
Age
|
|
Business experience for last 5 years and prior positions with the Company
|
Constance H. Lau
|
|
65
|
|
HEI President and Chief Executive Officer since 5/06
HEI Director, 6/01 to 12/04 and since 5/06 Hawaiian Electric Chairman of the Board since 5/06
ASB Hawaii Director since 5/06
ASB Chairman of the Board since 5/06, Risk Committee member since 2012 and Director since 1999
· ASB Chief Executive Officer, 6/01 to 11/10, and President, 6/01 to 1/08
· ASB Senior Executive Vice President and Chief Operating Officer and Director, 12/99 to 5/01
· HEI Power Corp. Financial Vice President and Treasurer, 5/97 to 8/99
· HEI Treasurer, 4/89 to 10/99, and HEI Assistant Treasurer, 12/87 to 4/89
· Hawaiian Electric Treasurer 12/87 to 4/89 and Assistant Corporate Counsel, 9/84 to 12/87
|
Gregory C. Hazelton
|
|
53
|
|
HEI Executive Vice President and Chief Financial Officer since 4/17
HEI Senior Vice President, Finance, 10/16 to 4/17
· Prior to rejoining the Company in 2016: Northwest Natural Gas Company, Senior Vice President, Chief Financial Officer and Treasurer, 2/16 to 9/16, and Northwest Natural Gas Company, Senior Vice President and Chief Financial Officer, 6/15 to 2/16
· HEI Vice President, Finance, Treasurer and Controller, 8/13 to 6/15
·
Prior to joining the Company in 2013: UBS Investment Bank, Managing Director, Global Power & Utilities Group 3/11 to 5/13
|
Alan M. Oshima
|
|
70
|
|
Hawaiian Electric President and Chief Executive Officer since 10/14
Hawaiian Electric Director, 2008 to 10/11 and since 10/14
HEI Charitable Foundation President since 10/11
· Hawaiian Electric Senior Executive Officer on loan from HEI, 5/14 to 9/14
· HEI Executive Vice President, Corporate and Community Advancement, 10/11 to 5/14
|
Richard F. Wacker
|
|
55
|
|
ASB President and Chief Executive Officer since 11/10
ASB Director since 11/10
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Quarters ended
|
2017
|
|
2016
|
||||||||||
|
High
|
|
Low
|
|
|
High
|
|
Low
|
|
||||
(in thousands)
|
|
|
|
|
|
||||||||
March 31
|
$
|
33.94
|
|
$
|
32.32
|
|
|
$
|
32.69
|
|
$
|
27.30
|
|
June 30
|
34.08
|
|
32.01
|
|
|
34.98
|
|
31.35
|
|
||||
September 30
|
34.64
|
|
31.71
|
|
|
33.57
|
|
29.14
|
|
||||
December 31
|
38.72
|
|
33.30
|
|
|
34.08
|
|
28.31
|
|
Quarters ended
|
2017
|
|
|
2016
|
|
||
(in thousands)
|
|
|
|
||||
March 31
|
$
|
33,713
|
|
|
$
|
33,367
|
|
June 30
|
33,713
|
|
|
33,481
|
|
||
September 30
|
33,723
|
|
|
33,550
|
|
||
December 31
|
33,724
|
|
|
33,652
|
|
Period*
|
Total Number
of Shares Purchased **
|
|
Average
Price Paid
per Share **
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||
October 1 to 31, 2017
|
23,311
|
|
|
$
|
34.69
|
|
—
|
|
|
NA
|
November 1 to 30, 2017
|
20,261
|
|
|
$
|
37.74
|
|
—
|
|
|
NA
|
December 1 to 31, 2017
|
171,481
|
|
|
$
|
37.68
|
|
—
|
|
|
NA
|
Quarters ended
|
2017
|
|
|
2016
|
|
||
(in thousands)
|
|
|
|
||||
March 31
|
$
|
21,942
|
|
|
$
|
23,400
|
|
June 30
|
21,942
|
|
|
23,400
|
|
||
September 30
|
21,941
|
|
|
23,399
|
|
||
December 31
|
21,942
|
|
|
23,400
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
Selected Financial Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Hawaiian Electric Industries, Inc. and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||||
(dollars in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Results of operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
2,555,625
|
|
|
$
|
2,380,654
|
|
|
$
|
2,602,982
|
|
|
$
|
3,239,542
|
|
|
$
|
3,238,470
|
|
Net income for common stock
|
$
|
165,297
|
|
|
$
|
248,256
|
|
|
$
|
159,877
|
|
|
$
|
168,129
|
|
|
$
|
161,709
|
|
Basic earnings per common share
|
$
|
1.52
|
|
|
$
|
2.30
|
|
|
$
|
1.50
|
|
|
$
|
1.65
|
|
|
$
|
1.63
|
|
Diluted earnings per common share
|
$
|
1.52
|
|
|
$
|
2.29
|
|
|
$
|
1.50
|
|
|
$
|
1.63
|
|
|
$
|
1.62
|
|
Return on average common equity
|
7.9
|
%
|
|
12.4
|
%
|
|
8.6
|
%
|
|
9.6
|
%
|
|
9.7
|
%
|
|||||
Financial position *
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
13,099,828
|
|
|
$
|
12,425,506
|
|
|
$
|
11,782,018
|
|
|
$
|
11,177,143
|
|
|
$
|
10,331,921
|
|
Deposit liabilities
|
5,890,597
|
|
|
5,548,929
|
|
|
5,025,254
|
|
|
4,623,415
|
|
|
4,372,477
|
|
|||||
Other bank borrowings
|
190,859
|
|
|
192,618
|
|
|
328,582
|
|
|
290,656
|
|
|
244,514
|
|
|||||
Long-term debt, net—other than bank
|
1,683,797
|
|
|
1,619,019
|
|
|
1,578,368
|
|
|
1,498,547
|
|
|
1,483,960
|
|
|||||
Preferred stock of subsidiaries – not subject to mandatory redemption
|
34,293
|
|
|
34,293
|
|
|
34,293
|
|
|
34,293
|
|
|
34,293
|
|
|||||
Common stock equity
|
2,097,386
|
|
|
2,066,753
|
|
|
1,927,640
|
|
|
1,790,573
|
|
|
1,726,406
|
|
|||||
Common stock
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Book value per common share *
|
$
|
19.28
|
|
|
$
|
19.03
|
|
|
$
|
17.94
|
|
|
$
|
17.46
|
|
|
$
|
17.05
|
|
Market price per common share
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
38.72
|
|
|
34.98
|
|
|
34.86
|
|
|
35.00
|
|
|
28.30
|
|
|||||
Low
|
31.71
|
|
|
27.30
|
|
|
27.02
|
|
|
22.71
|
|
|
23.84
|
|
|||||
December 31
|
36.15
|
|
|
33.07
|
|
|
28.95
|
|
|
33.48
|
|
|
26.06
|
|
|||||
Dividends declared per common share
|
1.24
|
|
|
1.24
|
|
|
1.24
|
|
|
1.24
|
|
|
1.24
|
|
|||||
Dividend payout ratio
|
82
|
%
|
|
54
|
%
|
|
82
|
%
|
|
75
|
%
|
|
76
|
%
|
|||||
Market price to book value per common share *
|
188
|
%
|
|
174
|
%
|
|
161
|
%
|
|
192
|
%
|
|
153
|
%
|
|||||
Price earnings ratio **
|
23.8x
|
|
|
14.4x
|
|
|
19.3x
|
|
|
20.3
|
x
|
|
16.0
|
x
|
|||||
Common shares outstanding (thousands) *
|
108,788
|
|
|
108,583
|
|
|
107,460
|
|
|
102,565
|
|
|
101,260
|
|
|||||
Weighted-average-basic
|
108,749
|
|
|
108,102
|
|
|
106,418
|
|
|
101,968
|
|
|
98,968
|
|
|||||
Shareholders ***
|
26,064
|
|
|
26,831
|
|
|
27,927
|
|
|
29,415
|
|
|
30,653
|
|
|||||
Employees *
|
3,880
|
|
|
3,796
|
|
|
3,918
|
|
|
3,965
|
|
|
3,966
|
|
*
|
At December 31.
|
**
|
Calculated using December 31 market price per common share divided by basic earnings per common share. The principal trading market for HEI’s common stock is the New York Stock Exchange (NYSE).
|
***
|
At December 31. Represents registered shareholders plus participants in the HEI Dividend Reinvestment and Stock Purchase Plan (DRIP) who are not registered shareholders. As of February 13, 2018, HEI had 6,133 registered shareholders (i.e., holders of record of HEI common stock), 23,111 DRIP participants and total shareholders of 25,977.
|
Years ended December 31
|
2017
|
2016
|
2015
|
2014
|
2013
|
||||||||||
(in thousands)
|
|
|
|
|
|
||||||||||
Results of operations
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
2,257,566
|
|
$
|
2,094,368
|
|
$
|
2,335,166
|
|
$
|
2,987,323
|
|
$
|
2,980,172
|
|
Net income for common stock
|
119,951
|
|
142,317
|
|
135,714
|
|
137,641
|
|
122,929
|
|
|||||
|
|
|
|
|
|
||||||||||
Financial position *
|
|
|
|
|
|
||||||||||
Utility plant
|
$
|
7,282,979
|
|
$
|
6,870,627
|
|
$
|
6,543,799
|
|
$
|
6,220,397
|
|
$
|
5,896,991
|
|
Accumulated depreciation
|
(2,476,352
|
)
|
(2,369,282
|
)
|
(2,266,004
|
)
|
(2,175,510
|
)
|
(2,111,229
|
)
|
|||||
Net utility plant
|
$
|
4,806,627
|
|
$
|
4,501,345
|
|
$
|
4,277,795
|
|
$
|
4,044,887
|
|
$
|
3,785,762
|
|
Total assets
|
$
|
6,196,281
|
|
$
|
5,975,428
|
|
$
|
5,672,210
|
|
$
|
5,550,021
|
|
$
|
5,058,065
|
|
Current portion of long-term debt
|
$
|
49,963
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
11,383
|
|
Short-term borrowings from non-affiliates
|
4,999
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Long-term debt, net
|
1,318,516
|
|
1,319,260
|
|
1,278,702
|
|
1,199,025
|
|
1,198,200
|
|
|||||
Common stock equity
|
1,845,283
|
|
1,799,787
|
|
1,728,325
|
|
1,682,144
|
|
1,593,564
|
|
|||||
Cumulative preferred stock-not
subject to mandatory redemption
|
34,293
|
|
34,293
|
|
34,293
|
|
34,293
|
|
34,293
|
|
|||||
Capital structure
|
$
|
3,253,054
|
|
$
|
3,153,340
|
|
$
|
3,041,320
|
|
$
|
2,915,462
|
|
$
|
2,837,440
|
|
Capital structure ratios (%)
|
|
|
|
|
|
||||||||||
Debt (short-term borrowings, and long-term debt, net, including current portion)
|
42.2
|
|
41.8
|
|
42.1
|
|
41.1
|
|
42.6
|
|
|||||
Cumulative preferred stock
|
1.1
|
|
1.1
|
|
1.1
|
|
1.2
|
|
1.2
|
|
|||||
Common stock equity
|
56.7
|
|
57.1
|
|
56.8
|
|
57.7
|
|
56.2
|
|
*
|
At December 31.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
HEI Consolidated
|
(dollars in millions, except per share amounts)
|
2017
|
|
|
% change
|
|
|
2016
|
|
|
% change
|
|
|
2015
|
|
|||
Revenues
|
$
|
2,556
|
|
|
7
|
|
|
$
|
2,381
|
|
|
(9
|
)
|
|
$
|
2,603
|
|
Operating income
|
338
|
|
|
(3
|
)
|
|
348
|
|
|
8
|
|
|
323
|
|
|||
Merger termination fee
|
—
|
|
|
(100
|
)
|
|
90
|
|
|
NM
|
|
|
—
|
|
|||
Net income for common stock
|
165
|
|
|
(33
|
)
|
|
248
|
|
|
55
|
|
|
160
|
|
|||
Net income (loss) by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Electric utility
|
$
|
120
|
|
|
(16
|
)
|
|
$
|
142
|
|
|
5
|
|
|
$
|
136
|
|
Bank
|
67
|
|
|
17
|
|
|
57
|
|
|
5
|
|
|
55
|
|
|||
Other
|
(22
|
)
|
|
NM
|
|
|
49
|
|
|
NM
|
|
|
(31
|
)
|
|||
Net income for common stock
|
$
|
165
|
|
|
(33
|
)
|
|
$
|
248
|
|
|
55
|
|
|
$
|
160
|
|
Basic earnings per share
|
$
|
1.52
|
|
|
(34
|
)
|
|
$
|
2.30
|
|
|
53
|
|
|
$
|
1.50
|
|
Diluted earnings per share
|
$
|
1.52
|
|
|
(34
|
)
|
|
$
|
2.29
|
|
|
53
|
|
|
$
|
1.50
|
|
Dividends per share
|
$
|
1.24
|
|
|
—
|
|
|
$
|
1.24
|
|
|
—
|
|
|
$
|
1.24
|
|
Weighted-average number of common shares outstanding (millions)
|
108.7
|
|
|
1
|
|
|
108.1
|
|
|
2
|
|
|
106.4
|
|
|||
Dividend payout ratio
|
82
|
%
|
|
|
|
|
54
|
%
|
|
|
|
|
82
|
%
|
NM
|
Not meaningful.
|
December 31
|
2017
|
|
2016
|
||||||||||
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||
Short-term borrowings—other than bank
|
$
|
118
|
|
|
3
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Long-term debt, net—other than bank
|
1,684
|
|
|
43
|
|
|
1,619
|
|
|
43
|
|
||
Preferred stock of subsidiaries
|
34
|
|
|
1
|
|
|
34
|
|
|
1
|
|
||
Common stock equity
|
2,097
|
|
|
53
|
|
|
2,067
|
|
|
56
|
|
||
|
$
|
3,933
|
|
|
100
|
%
|
|
$
|
3,720
|
|
|
100
|
%
|
|
Year ended
December 31, 2017
|
|
|
||||||||
(in millions)
|
Average
balance
|
|
End-of-period
balance
|
|
December 31,
2016
|
||||||
Commercial paper
|
$
|
13
|
|
|
$
|
63
|
|
|
$
|
—
|
|
Line of credit draws
|
—
|
|
|
—
|
|
|
—
|
|
|||
Undrawn capacity under HEI’s line of credit facility
|
—
|
|
|
150
|
|
|
150
|
|
|
Fitch
|
Moody’s
|
S&P
|
Long-term issuer default and senior unsecured; long term rating*; and corporate credit; respectively
|
BBB
|
WR*
|
BBB-
|
Commercial paper
|
F3
|
P-3
|
A-3
|
Outlook
|
Stable
|
Stable
|
Stable
|
December 31, 2017
|
|
||||||||||||||||||
(in millions)
|
Less than
1 year
|
|
1-3
years
|
|
3-5
years
|
|
More than
5 years
|
|
Total
|
||||||||||
Contractual obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment in qualifying affordable housing projects
|
$
|
12
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
16
|
|
Time certificates
|
402
|
|
|
238
|
|
|
124
|
|
|
3
|
|
|
767
|
|
|||||
Other bank borrowings
|
191
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
191
|
|
|||||
Short-term borrowings
|
118
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118
|
|
|||||
Long-term debt
|
54
|
|
|
103
|
|
|
260
|
|
|
1,277
|
|
|
1,694
|
|
|||||
Interest on certificates of deposit, other bank borrowings, short-term loan and long-term debt
|
85
|
|
|
155
|
|
|
140
|
|
|
790
|
|
|
1,170
|
|
|||||
Operating leases, service bureau contract, maintenance and ASB construction-related agreements
|
99
|
|
|
42
|
|
|
30
|
|
|
44
|
|
|
215
|
|
|||||
Hawaiian Electric open purchase order obligations
1
|
114
|
|
|
12
|
|
|
9
|
|
|
—
|
|
|
135
|
|
|||||
Hawaiian Electric fuel oil purchase obligations (estimate based on December 31, 2017 fuel oil prices)
|
130
|
|
|
130
|
|
|
—
|
|
|
—
|
|
|
260
|
|
|||||
Hawaiian Electric power purchase obligations–minimum fixed capacity charges
|
118
|
|
|
235
|
|
|
212
|
|
|
854
|
|
|
1,419
|
|
|||||
Liabilities for uncertain tax positions
|
—
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
4
|
|
|||||
Total (estimated)
|
$
|
1,323
|
|
|
$
|
921
|
|
|
$
|
776
|
|
|
$
|
2,969
|
|
|
$
|
5,989
|
|
1
|
Includes contractual obligations and commitments for capital expenditures and expense amounts.
|
1.
|
obligations under guarantee contracts,
|
2.
|
retained or contingent interests in assets transferred to an unconsolidated entity or similar arrangements that serve as credit, liquidity or market risk support to that entity for such assets,
|
3.
|
obligations under derivative instruments, and
|
4.
|
obligations under a material variable interest held by the Company or the Utilities in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the Company or the Utilities, or engages in leasing, hedging or research and development services with the Company or the Utilities.
|
Actuarial assumption
|
Change in assumption
in basis points
|
Impact on HEI Consolidated
PBO or APBO
|
|
Impact on Consolidated Hawaiian Electric
PBO or APBO
|
(dollars in millions)
|
|
|
|
|
Pension benefits
|
|
|
|
|
Discount rate
|
+/- 50
|
(161)/181
|
|
(150)/170
|
Other benefits
|
|
|
|
|
Discount rate
|
'
+/- 50
|
(14)/15
|
|
(13)/15
|
Health care cost trend rate
|
'
+/- 100
|
3/(3)
|
|
3/(3)
|
Electric utility
|
%
|
|
Rate-making Return on rate base (RORB)*
|
|
ROACE**
|
|
Rate-making ROACE***
|
|||||||||||||||||||||
Year ended December 31, 2017
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|||||||||
Utility returns
|
|
6.08
|
|
|
6.54
|
|
|
6.10
|
|
|
6.46
|
|
|
6.97
|
|
|
6.76
|
|
|
6.83
|
|
|
7.30
|
|
|
6.84
|
|
PUC-allowed returns
|
|
7.57
|
|
|
7.80
|
|
|
7.34
|
|
|
9.50
|
|
|
9.50
|
|
|
9.00
|
|
|
9.50
|
|
|
9.50
|
|
|
9.00
|
|
Difference
|
|
(1.49
|
)
|
|
(1.26
|
)
|
|
(1.24
|
)
|
|
(3.04
|
)
|
|
(2.53
|
)
|
|
(2.24
|
)
|
|
(2.67
|
)
|
|
(2.20
|
)
|
|
(2.16
|
)
|
•
|
2017 vs. 2016
|
2017
|
|
2016
|
|
Increase (decrease)
|
|
(dollars in millions, except per barrel amounts)
|
||||||||||
$
|
2,258
|
|
|
$
|
2,094
|
|
|
$
|
164
|
|
|
|
|
|
Revenues.
Net increase largely due to:
|
|
|
|
|
|
|
|
|
$
|
150
|
|
|
higher fuel prices
1
|
|||||
|
|
|
|
|
|
40
|
|
|
higher purchased power energy costs
2
|
|||||||
|
|
|
|
|
|
|
15
|
|
|
higher RAM revenue and interim rate increase at Hawaii Electric Light
|
||||||
|
|
|
|
|
|
(2
|
)
|
|
lower purchased power non-energy costs
2
|
|||||||
|
|
|
|
|
|
|
(5
|
)
|
|
lower KWH generated
|
||||||
|
|
|
|
|
|
(12
|
)
|
|
lower KWH purchased
|
|||||||
|
|
|
|
|
|
(20
|
)
|
|
lower RAM revenues due to expiration of 2013 settlement agreement that allowed the accrual of RAM revenues on January 1 (vs. June 1) for years 2014 to 2016 at Hawaiian Electric
|
|||||||
588
|
|
|
455
|
|
|
133
|
|
|
|
|
Fuel oil expense.
Increase due to higher fuel oil prices, partially offset by lower KWH generated
|
|||||
587
|
|
|
563
|
|
|
24
|
|
|
|
|
|
Purchased power expense.
Increase due to higher purchased power energy prices largely due to higher fuel prices, partly offset by lower KWH purchased
2
|
||||
418
|
|
|
406
|
|
|
12
|
|
|
|
|
|
Operation and maintenance expense
. Net increase due to:
|
||||
|
|
|
|
|
|
|
9
|
|
|
higher overhaul costs due to more overhauls being performed in 2017
|
||||||
|
|
|
|
|
|
5
|
|
|
higher ERP project costs (project commenced in 2017)
|
|||||||
|
|
|
|
|
|
3
|
|
|
higher transmission and distribution operation and maintenance costs
|
|||||||
|
|
|
|
|
|
1
|
|
|
higher Grid modernization consultant cost (none in 2016)
|
|||||||
|
|
|
|
|
|
1
|
|
|
write off of portion of deferred Geothermal RFP costs
|
|||||||
|
|
|
|
|
|
(3
|
)
|
|
higher LNG consulting costs to negotiate LNG contract in 2016, which was subsequently terminated following HEI/Nextera merger termination
|
|||||||
|
|
|
|
|
|
(4
|
)
|
|
higher PSIP consulting costs incurred in 2016, in order to complete the PSIP update in April 2016 and December 2016
|
|||||||
408
|
|
|
387
|
|
|
21
|
|
|
|
|
|
Other expenses
. Increase due to higher revenue taxes from higher revenue, coupled with higher depreciation expense for plant investments in 2016
|
||||
258
|
|
|
284
|
|
|
(26
|
)
|
|
|
|
|
Operating income.
Decrease due to lower RAM revenues and higher operation and maintenance and other expenses
|
||||
120
|
|
|
142
|
|
|
(22
|
)
|
|
|
|
|
Net income for common stock.
Decrease due to lower operating income and higher income taxes due to to write-down of deferred tax assets to reflect the lower tax rates enacted by the Tax Act
|
||||
6.6
|
%
|
|
8.1
|
%
|
|
(1.5
|
)%
|
|
|
|
Return on average common equity
|
|||||
68.78
|
|
|
53.49
|
|
|
15.29
|
|
|
|
|
Average fuel oil cost per barrel
1
|
|||||
8,690
|
|
|
8,845
|
|
|
(155
|
)
|
|
|
|
Kilowatthour sales (millions)
3
|
|||||
2,724
|
|
|
2,662
|
|
|
62
|
|
|
|
|
Number of employees (at December 31)
|
1
|
The rate schedules of the electric utilities currently contain energy cost adjustment clauses (ECACs) through which changes in fuel oil prices and certain components of purchased energy costs are passed on to customers.
|
2
|
The rate schedule of the electric utilities currently contain purchase power adjustment clauses (PPACs) through which changes in purchase power expenses (except purchased energy costs) are passed on to customers.
|
3
|
KWH sales were lower in 2017 when compared to the prior year due largely to continued energy efficiency and conservation efforts by customers and increasing levels of private customer-sited renewable generation.
|
•
|
2016 vs. 2015
|
2016
|
|
2015
|
|
Increase (decrease)
|
|
(dollars in millions, except per barrel amounts)
|
||||||||||
$
|
2,094
|
|
|
$
|
2,335
|
|
|
$
|
(241
|
)
|
|
|
|
|
Revenues.
Net decrease largely due to:
|
|
|
|
|
|
|
|
|
$
|
(198
|
)
|
|
lower fuel prices
1
|
|||||
|
|
|
|
|
|
|
(33
|
)
|
|
lower purchased power expense
2
|
||||||
|
|
|
|
|
|
|
(25
|
)
|
|
lower KWH generated
|
||||||
|
|
|
|
|
|
15
|
|
|
higher RAM revenues
|
|||||||
455
|
|
|
655
|
|
|
(200
|
)
|
|
|
|
Fuel oil expense.
Decrease due to lower fuel cost and lower KWH generated
|
|||||
563
|
|
|
594
|
|
|
(31
|
)
|
|
|
|
|
Purchased power expense.
Decrease due to lower purchased power energy prices, largely due to lower fuel prices
2
|
||||
406
|
|
|
413
|
|
|
(7
|
)
|
|
|
|
|
Operation and maintenance expense
. Net decrease due to:
|
||||
|
|
|
|
|
|
|
(5
|
)
|
|
write off of ERP software costs in 2015, as a result of a PUC ERP/EAM decision
|
||||||
|
|
|
|
|
|
|
(4
|
)
|
|
additional reserve for environmental costs in 2015
3
|
||||||
|
|
|
|
|
|
(1
|
)
|
|
lower storm weather repairs
|
|||||||
|
|
|
|
|
|
3
|
|
|
higher PSIP consulting costs incurred in 2016, in order to complete the PSIP update in April 2016 and December 2016
|
|||||||
|
|
|
|
|
|
1
|
|
|
higher LNG consulting costs to negotiate LNG contract in 2016, which was subsequently terminated following HEI/Nextera merger termination
|
|||||||
387
|
|
|
399
|
|
|
(12
|
)
|
|
|
|
|
Other expenses
. Decrease in revenue taxes due to lower revenue, partly offset by higher depreciation expense for plant investments
|
||||
284
|
|
|
274
|
|
|
10
|
|
|
|
|
|
Operating income.
Increase due to an overall decrease in expenses
|
||||
142
|
|
|
136
|
|
|
6
|
|
|
|
|
|
Net income for common stock.
Increase due to higher operating income
|
||||
8.1
|
%
|
|
8.0
|
%
|
|
0.1
|
%
|
|
|
|
Return on average common equity
|
|||||
53.49
|
|
|
74.71
|
|
|
(21.22
|
)
|
|
|
|
Average fuel oil cost per barrel
1
|
|||||
8,845
|
|
|
8,957
|
|
|
(112
|
)
|
|
|
|
Kilowatthour sales (millions)
4
|
|||||
4,788
|
|
|
5,082
|
|
|
(294
|
)
|
|
|
|
Cooling degree days (Oahu)
|
|||||
2,662
|
|
|
2,727
|
|
|
(65
|
)
|
|
|
|
Number of employees (at December 31)
|
1
|
The rate schedules of the electric utilities currently contain energy cost adjustment clauses (ECACs) through which changes in fuel oil prices and certain components of purchased energy costs are passed on to customers.
|
2
|
The rate schedule of the electric utilities currently contain purchase power adjustment clauses (PPACs) through which changes in purchase power expenses (except purchased energy costs) are passed on to customers.
|
3
|
Costs to complete Waiau Power Plant's onshore and offshore investigations and the remediation of PCB contamination in the offshore sediment in 2015.
|
4
|
KWH sales were lower in 2016 when compared to the prior year due largely to continued energy efficiency and conservation efforts by customers and increasing levels of private customer-sited renewable generation.
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Request
|
|
12/16/16
|
|
$
|
106.4
|
|
|
6.9
|
|
|
10.60
|
|
|
8.28
|
|
|
$
|
2,002
|
|
|
57.36
|
|
|
Yes
|
Interim increase
|
|
2/16/18
|
|
36.0
|
|
|
2.3
|
|
|
9.50
|
|
|
7.57
|
|
|
1,980
|
|
|
57.10
|
|
|
|
||
Hawaii Electric Light
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Request
|
|
9/19/16
|
|
$
|
19.3
|
|
|
6.5
|
|
|
10.60
|
|
|
8.44
|
|
|
$
|
479
|
|
|
57.12
|
|
|
Yes
|
Interim increase
|
|
8/31/17
|
|
9.9
|
|
|
3.4
|
|
|
9.50
|
|
|
7.80
|
|
|
482
|
|
|
56.69
|
|
|
|
||
Maui Electric
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Request
|
|
10/12/17
|
|
$
|
30.1
|
|
|
9.3
|
|
|
10.60
|
|
|
8.05
|
|
|
$
|
473
|
|
|
56.94
|
|
|
|
•
|
In July 2015, the PUC approved a PPA for the 27.6 MW Waianae Solar project that was developed by Eurus Energy America. The project achieved commercial operations in January 2017 and is now the largest solar project in Hawaii.
|
•
|
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 2, LLC and SSA Solar of HI 3, LLC, respectively), each for a 2.87-MW solar facility. In February 2016, the PUC approved both PPAs, subject to certain conditions and modifications. The guaranteed commercial operations date for the facilities was December 31, 2016, however both projects are experiencing delays and now expected to be completed by the first half of 2018.
|
•
|
In December 2014, the PUC approved a PPA for Renewable As-Available Energy dated October 3, 2013 between Hawaiian Electric and Na Pua Makani Power Partners, LLC (NPM) for a proposed 24-MW wind farm on Oahu. The NPM wind farm is expected to be placed into service by August 31, 2019.
|
•
|
Hawaiian Electric terminated PPAs to purchase solar energy with three affiliates of SunEdison, which affiliates were acquired by an affiliate of NRG Energy, Inc. (NRG) during SunEdison’s Chapter 11 bankruptcy proceedings. Hawaiian Electric then negotiated with NRG and its newly acquired affiliates and entered into amended and restated PPAs for
|
•
|
In February 2018, NRG and GIP III Zephyr Acquisition Partners, a subsidiary of Global Infrastructure Partners (GIP), entered into an agreement where GIP has agreed to purchase substantially all of NRG’s renewable platform, including NRG’s renewable operations, maintenance and development businesses. Kawailoa Solar, LLC, Lahikuhana Solar, LLC, and Waipio PV, LLC, along with NRG Renew LLC, are included in the sale transaction. NRG Renew has confirmed that this transaction will not in any way affect the completion or success of the three PV Projects.
|
•
|
In January 2018, Maui Electric signed a PPA, subject to PUC approval, with Molokai New Energy Partners to purchase solar energy from a PV plus battery storage project. The 4.9 MW project will deliver no more than 2.7 MW at any time to the Molokai system and is expected to be in service by end of 2019.
|
•
|
As of December 31, 2017, there were approximately 337 MW, 78 MW and 89 MW of installed distributed renewable energy technologies (mainly PV) at Hawaiian Electric, Hawaii Electric Light and Maui Electric, respectively, for tariff-based private customer generation programs, namely NEM, Customer Grid Supply and Customer Self Supply. As of December 31, 2017, an estimated 27% of single family homes on the islands of Oahu, Hawaii and Maui have installed private rooftop solar systems, and an estimated 30% of single family homes have installed, or have been approved to install, private rooftop solar systems. As of December 31, 2017, approximately 16% of the Utilities' total customers have solar systems.
|
•
|
The Utilities began accepting energy from feed-in tariff projects in 2011. As of December 31, 2017, there were 30 MW, 3 MW and 5 MW of installed feed-in tariff capacity from renewable energy technologies at Hawaiian Electric, Hawaii Electric Light and Maui Electric, respectively.
|
•
|
In September 2015, the PUC approved Hawaiian Electric’s 2-year biodiesel supply contract with Pacific Biodiesel Technologies, LLC (PBT) to supply 2 million to 3 million gallons of biodiesel at Campbell Industrial Park combustion turbine No. 1 (CIP CT-1) and the Honolulu International Airport Emergency Power Facility beginning in November 2015. The PBT contract is set to expire on November 2, 2018. PBT also has a spot buy contract with Hawaiian Electric to purchase additional quantities of biodiesel at or below the price of diesel. Some purchases of “at parity” biodiesel have been made under the spot purchase contract, which was recently extended through June 2018. REG Marketing & Logistics Group, LLC has a contingency supply contract with Hawaiian Electric to also supply biodiesel to CIP CT-1 in the event PBT is not able to supply necessary quantities. This contingency contract has been extended to November 2018, and will continue with no volume purchase requirements.
|
•
|
On October 27, 2017, Hawaiian Electric entered into a new biodiesel supply contract with PBT, subject to PUC approval, to supply 2 million to 4 million gallons of biodiesel per year for three years. The new PBT contract is expected to commence as early as November 2018 to be used as fuel for power generation at Hawaiian Electric’s Schofield Generating Station, the Honolulu International Airport Emergency Power Facility and any other generating unit on Oahu, as necessary.
|
•
|
In response to requests filed by the Utilities, on October 6, 2017, the PUC opened a docket to receive filings, review approval requests, and resolve disputes, if necessary, related to the Utilities' plan to proceed with a competitive bidding process for dispatchable firm renewable generation and variable renewable generation. On October 23, 2017, the Utilities filed draft requests for proposals for 220 MW of renewable generation on Oahu (Oahu Variable RFP), 50 MW of renewable generation on Hawaii Island (Hawaii Variable RFP), and 100 MW of renewable generation on Maui, including 40 MW of firm renewable generation, comprising the Maui Variable RFP and Maui Firm RFP (all resources to be in service by the end of 2022). With this filing, the Utilities also filed proposed model power purchase agreements and timelines for each proposed procurement. In January 2018, the PUC issued an order appointing Independent Observers for the RFPs and directed the Utilities to move forward with the three Variable RFPs. On February 20, 2018, the PUC approved, with minor modification, the proposed Variable RFPs and directed the Utilities to issue the RFPs, as modified. On February 27, 2018, the Utilities opened the RFPs to receive proposals. The PUC indicated it would provide further guidance on the Maui Firm RFP in the first quarter of 2018.
|
•
|
On January 5, 2017, Hawaiian Electric issued requests for Onshore Wind Expression of Interest to developers that are capable of developing utility scale onshore wind projects that are eligible to capture the federal Investment Tax Credit for Large Wind on the island of Oahu. Hawaiian Electric is in non-binding confidential negotiations with a developer that responded.
|
•
|
On December 12, 2016, the Utilities issued a request for information asking interested landowners to provide information about properties available for utility-scale renewable energy projects or for growing biofuel feedstock on the islands of Oahu, Hawaii, Maui, Molokai and Lanai. Responses have been made available to developers interested in developing renewable energy projects on these five islands.
|
December 31
|
2017
|
|
2016
|
||||||||||
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||
Short-term borrowings
|
$
|
5
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Long-term debt, net
|
1,369
|
|
|
42
|
|
|
1,319
|
|
|
42
|
|
||
Preferred stock
|
34
|
|
|
1
|
|
|
34
|
|
|
1
|
|
||
Common stock equity
|
1,845
|
|
|
57
|
|
|
1,800
|
|
|
57
|
|
||
|
$
|
3,253
|
|
|
100
|
%
|
|
$
|
3,153
|
|
|
100
|
%
|
|
Year ended
December 31, 2017
|
|
|
||||||||
(in millions)
|
Average
balance
|
|
End-of-period
balance
|
|
December 31,
2016
|
||||||
Short-term borrowings
1
|
|
|
|
|
|
||||||
Commercial paper
|
$
|
7
|
|
|
$
|
5
|
|
|
$
|
—
|
|
Line of credit draws
|
—
|
|
|
—
|
|
|
—
|
|
|||
Borrowings from HEI
|
2
|
|
|
—
|
|
|
—
|
|
|||
Undrawn capacity under line of credit facility
|
—
|
|
|
200
|
|
|
200
|
|
1
|
The maximum amount of external short-term borrowings by Hawaiian Electric during 2017 was
$48 million
. At December 31, 2017, Hawaiian Electric had short-term borrowings from Hawaii Electric Light and Maui Electric of
nil
and
$12 million
, respectively, which intercompany borrowings are eliminated in consolidation. At
February 13, 2018
, Hawaiian Electric had
$90 million
outstanding commercial paper, its line of credit facility was undrawn and it had
no
borrowings from HEI. Also, at
February 13, 2018
, Hawaii Electric Light and Maui Electric had short-term borrowings from Hawaiian Electric of
$4.5 million
and
$1.5 million
, respectively.
|
|
Fitch
|
Moody’s
|
S&P
|
Long-term issuer default, long-term issuer and corporate credit, respectively
|
BBB+
|
Baa2
|
BBB-
|
Commercial paper
|
F2
|
P-2
|
A-3
|
Senior unsecured debt/special purpose revenue bonds
|
A-
|
Baa2
|
BBB-
|
Hawaiian Electric-obligated preferred securities of trust subsidiary
|
*
|
Baa3
|
BB
|
Cumulative preferred stock (selected series)
|
*
|
Ba1
|
*
|
Subordinated debt
|
BBB
|
*
|
*
|
Outlook
|
Stable
|
Stable
|
Stable
|
|
Years ended December 31
|
||||||||||||||||||
(in thousands)
|
2017
|
|
Change
|
|
2016
|
|
Change
|
|
2015
|
||||||||||
Net cash provided by operating activities
|
$
|
335,186
|
|
|
$
|
(34,731
|
)
|
|
$
|
369,917
|
|
|
$
|
36,511
|
|
|
$
|
333,406
|
|
Net cash used in investing activities
|
(372,287
|
)
|
|
(84,088
|
)
|
|
(288,199
|
)
|
|
20,583
|
|
|
(308,782
|
)
|
|||||
Net cash used in financing activities
|
(24,668
|
)
|
|
7,213
|
|
|
(31,881
|
)
|
|
(17,944
|
)
|
|
(13,937
|
)
|
•
|
Lower cash from an increase in fuel oil stock due to an increase in fuel prices
|
•
|
Lower cash from an increase in unbilled revenues due to higher fuel prices
|
•
|
Lower cash due to refund of federal income taxes in 2016 based on bonus depreciation enacted in the fourth quarter of 2015 (similar treatment was not granted in the fourth quarter of 2016).
|
•
|
Higher cash from a refund of federal income taxes in 2016 due to the extension of bonus depreciation enacted in the fourth quarter of 2015 and lower revenue taxes paid resulting from lower revenues due largely to lower fuel prices.
|
•
|
Lower unbilled revenues due to timing and lower fuel prices.
|
December 31, 2017
|
Payments due by period
|
||||||||||||||||||
(in millions)
|
Less than 1 year
|
|
1-3
years
|
|
3-5
years
|
|
More than
5 years
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Long-term debt
|
50
|
|
|
96
|
|
|
52
|
|
|
1,179
|
|
|
1,377
|
|
|||||
Interest on long-term debt
|
65
|
|
|
123
|
|
|
119
|
|
|
780
|
|
|
1,087
|
|
|||||
Operating leases
|
9
|
|
|
15
|
|
|
11
|
|
|
32
|
|
|
67
|
|
|||||
Open purchase order obligations ¹
|
114
|
|
|
12
|
|
|
9
|
|
|
—
|
|
|
135
|
|
|||||
Fuel oil purchase obligations (estimate based on December 31, 2017 fuel oil prices)
|
130
|
|
|
130
|
|
|
—
|
|
|
—
|
|
|
260
|
|
|||||
Purchase power obligations-minimum fixed capacity charges
|
118
|
|
|
235
|
|
|
212
|
|
|
854
|
|
|
1,419
|
|
|||||
Liabilities for uncertain tax positions
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Total (estimated)
|
$
|
491
|
|
|
$
|
614
|
|
|
$
|
403
|
|
|
$
|
2,845
|
|
|
$
|
4,353
|
|
Bank
|
1.
|
deepening customer relationships;
|
2.
|
building out product and service offerings to open new segments;
|
3.
|
fully deploying online and remotely-assisted account opening capabilities; and
|
4.
|
prioritizing efficiency actions to gain earnings leverage on organic growth.
|
1.
|
attracting and retaining low-cost deposits, particularly those in non-interest bearing transaction accounts;
|
2.
|
diversifying the loan portfolio with higher-spread, shorter-maturity loans and/or variable rate loans;
|
3.
|
focusing investment growth in securities that exhibit less extension risk (i.e., risk of longer average lives) as rates rise.
|
•
|
2017 vs. 2016
|
(in millions)
|
|
2017
|
|
2016
|
|
Increase
(decrease)
|
|
Primary reason(s)
|
||||||
Interest income
|
|
$
|
236
|
|
|
$
|
219
|
|
|
$
|
17
|
|
|
Higher interest income was due to higher average earning asset balances and an increase in yields on earning assets. ASB's average investment and mortgage-related securities portfolio balance for 2017 increased by $345 million compared to the average balance in 2016 as ASB purchased investments with liquidity not used to fund the loan portfolio. The average loan portfolio balance for 2017 was $11 million lower than 2016 primarily due to a decrease in the average commercial loan portfolio balance of $112 million. The decrease was due to the strategic reduction of the national syndicated lending portfolio ($88 million decrease in average balance) and paydowns in the commercial portfolio. The average consumer, HELOC and commercial real estate loan balances increased by $56 million, $29 million and $15 million, respectively. The growth in these loan portfolios was consistent with ASB’s portfolio mix targets and loan growth strategy. The yield on earning assets increased 8 basis points as the increase in short-term interest rates during the year repriced the adjustable rate loans upward and increased the yields for the investment securities.
|
Noninterest income
|
|
62
|
|
|
67
|
|
|
(5
|
)
|
|
Noninterest income was lower due to a decrease in mortgage banking income and lower fee income from other financial products. The lower mortgage banking income was due to lower residential loan production and ASB's decision to portfolio a larger portion of the residential loan production.
|
|||
Revenues
|
|
298
|
|
|
286
|
|
|
12
|
|
|
|
|||
Interest expense
|
|
12
|
|
|
13
|
|
|
(1
|
)
|
|
Lower interest expense was due to the payoff of a maturing other borrowing, partly offset by higher interest expense from an increase in average interest-bearing liabilities. Average deposit balances for 2017 increased by $451 million compared to 2016 due to an increase in core deposits and time certificates of $319 million and $132 million, respectively. The other borrowings average balance decreased by $94 million primarily due to a decrease in repurchase agreements.
|
|||
Provision for loan losses
|
|
11
|
|
|
17
|
|
|
(6
|
)
|
|
Lower provision for loan losses for 2017 was primarily due to a decrease in reserves for the commercial and commercial real estate loan portfolios as a result of lower portfolio balances and improving credit trends, partly offset by increased provision for loan losses for the consumer loan portfolio as a result of growth and increased charge-offs. The provision for loan losses in 2016 was used primarily to establish loan loss reserves for the growth in the commercial real estate and consumer loan portfolios and additional reserve levels for specific commercial credits.
|
|||
Noninterest expense
|
|
176
|
|
|
169
|
|
|
7
|
|
|
Higher noninterest expense was primarily due to higher compensation and employee benefit costs.
|
|||
Expenses
|
|
199
|
|
|
199
|
|
|
—
|
|
|
|
|||
Operating income
|
|
99
|
|
|
87
|
|
|
12
|
|
|
Higher interest income and lower provision for loan losses, partly offset by lower noninterest income and higher noninterest expenses.
|
|||
Net income
|
|
67
|
|
|
57
|
|
|
10
|
|
|
Higher operating income and tax benefit from the Tax Act.
|
|||
Return on average common equity
1
|
|
11.2
|
%
|
|
9.9
|
%
|
|
1.3
|
%
|
|
|
•
|
2016 vs. 2015
|
(in millions)
|
|
2016
|
|
2015
|
|
Increase
(decrease)
|
|
Primary reason(s)
|
||||||
Interest income
|
|
$
|
219
|
|
|
$
|
200
|
|
|
$
|
19
|
|
|
Higher interest income was due to higher average earning asset balances and higher loan yields. ASB’s average loan portfolio balance for 2016 was $223 million higher than 2015 as the average commercial real estate, HELOC and consumer loan balances increased by $204 million, $32 million and $30 million, respectively. The growth in these loan portfolios was consistent with ASB’s portfolio mix targets and loan growth strategy. The commercial loan average balance decreased $55 million due to the strategic reduction of the national syndicated lending portfolio. The loan portfolio yield benefited from a shift in the mix of the loan portfolio and the repricing of the adjustable rate loans with the increase in the prime rate. The average investment and mortgage-related securities portfolio balance increased by $248 million as ASB purchased investments with liquidity in excess of loan growth funding.
|
Noninterest income
|
|
67
|
|
|
67
|
|
|
—
|
|
|
Noninterest income was flat as higher gains on sales of investment securities and insurance proceeds in 2016 were offset by lower gains on sales of real estate and mortgage servicing rights.
|
|||
Revenues
|
|
286
|
|
|
267
|
|
|
19
|
|
|
|
|||
Interest expense
|
|
13
|
|
|
12
|
|
|
1
|
|
|
Higher interest expense was due to an increase in average interest-bearing liabilities. Average deposit balances for 2016 increased by $438 million compared to 2015 due to an increase in core deposits and time certificates of $322 million and $116 million, respectively. The other borrowings average balance decreased by $48 million due to a decrease in repurchase agreements.
|
|||
Provision for loan losses
|
|
17
|
|
|
6
|
|
|
11
|
|
|
Higher provision for loan losses for 2016 was primarily due to growth in the commercial real estate and consumer loan portfolios and additional reserves for specific commercial credits. The provision for loan losses in 2015 was used primarily to establish loan loss reserves for the growth in the loan portfolio and additional reserve levels for the commercial and unsecured consumer loan portfolios.
|
|||
Noninterest expense
|
|
169
|
|
|
166
|
|
|
3
|
|
|
Higher noninterest expense was primarily due to costs related to replacement and upgrade of ASB's electronic banking platform in mid 2016 to enhance the Bank's online and mobile banking services to consumer and business customers as well as expand its distribution channels.
|
|||
Expenses
|
|
199
|
|
|
184
|
|
|
15
|
|
|
|
|||
Operating income
|
|
87
|
|
|
83
|
|
|
4
|
|
|
Higher interest income, partly offset by higher provision for loan losses and noninterest expenses.
|
|||
Net income
|
|
57
|
|
|
55
|
|
|
2
|
|
|
Higher operating income, partly offset by higher taxes.
|
|||
Return on average common equity
1
|
|
9.9
|
%
|
|
9.9
|
%
|
|
—
|
%
|
|
|
1
|
Calculated using the average daily balances.
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||||||||
(dollars in thousands)
|
Average
balance
|
|
Interest
1
income/
expense
|
|
Yield/
rate
(%)
|
|
Average
balance |
|
Interest
1
income/ expense |
|
Yield/
rate (%) |
|
Average
balance |
|
Interest
1
income/ expense |
|
Yield/
rate (%) |
|||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-earning deposits
|
$
|
79,927
|
|
|
$
|
898
|
|
|
1.12
|
|
|
$
|
75,092
|
|
|
$
|
383
|
|
|
0.51
|
|
|
$
|
124,874
|
|
|
$
|
323
|
|
|
0.26
|
|
FHLB stock
|
10,770
|
|
|
208
|
|
|
1.93
|
|
|
11,153
|
|
|
191
|
|
|
1.72
|
|
|
32,140
|
|
|
148
|
|
|
0.46
|
|
||||||
Investment securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Taxable
|
1,265,240
|
|
|
27,291
|
|
|
2.16
|
|
|
934,469
|
|
|
18,592
|
|
|
1.99
|
|
|
687,215
|
|
|
14,649
|
|
|
2.13
|
|
||||||
Non-taxable
|
15,427
|
|
|
655
|
|
|
4.24
|
|
|
717
|
|
|
28
|
|
|
3.87
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total investment securities
|
1,280,667
|
|
|
27,946
|
|
|
2.18
|
|
|
935,186
|
|
|
18,620
|
|
|
1.99
|
|
|
687,215
|
|
|
14,649
|
|
|
2.13
|
|
||||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Residential 1-4 family
|
2,077,705
|
|
|
86,934
|
|
|
4.18
|
|
|
2,074,564
|
|
|
88,274
|
|
|
4.26
|
|
|
2,064,170
|
|
|
89,933
|
|
|
4.36
|
|
||||||
Commercial real estate
|
887,890
|
|
|
37,806
|
|
|
4.26
|
|
|
872,694
|
|
|
35,940
|
|
|
4.12
|
|
|
669,184
|
|
|
26,558
|
|
|
3.97
|
|
||||||
Home equity line of credit
|
889,360
|
|
|
30,001
|
|
|
3.37
|
|
|
859,955
|
|
|
28,249
|
|
|
3.28
|
|
|
828,129
|
|
|
26,511
|
|
|
3.20
|
|
||||||
Residential land
|
16,837
|
|
|
1,011
|
|
|
6.00
|
|
|
18,850
|
|
|
1,118
|
|
|
5.93
|
|
|
17,304
|
|
|
1,101
|
|
|
6.36
|
|
||||||
Commercial
|
631,170
|
|
|
27,405
|
|
|
4.34
|
|
|
743,586
|
|
|
29,743
|
|
|
4.00
|
|
|
798,182
|
|
|
29,282
|
|
|
3.67
|
|
||||||
Consumer
|
205,334
|
|
|
24,098
|
|
|
11.74
|
|
|
149,287
|
|
|
16,450
|
|
|
11.02
|
|
|
119,267
|
|
|
11,397
|
|
|
9.56
|
|
||||||
Total loans
2,3
|
4,708,296
|
|
|
207,255
|
|
|
4.40
|
|
|
4,718,936
|
|
|
199,774
|
|
|
4.23
|
|
|
4,496,236
|
|
|
184,782
|
|
|
4.11
|
|
||||||
Total interest-earning assets
|
6,079,660
|
|
|
236,307
|
|
|
3.89
|
|
|
5,740,367
|
|
|
218,968
|
|
|
3.81
|
|
|
5,340,465
|
|
|
199,902
|
|
|
3.74
|
|
||||||
Allowance for loan losses
|
(55,629
|
)
|
|
|
|
|
|
|
|
(54,338
|
)
|
|
|
|
|
|
|
|
(46,881
|
)
|
|
|
|
|
|
|
||||||
Noninterest-earning assets
|
546,523
|
|
|
|
|
|
|
|
|
507,850
|
|
|
|
|
|
|
|
|
490,187
|
|
|
|
|
|
|
|
||||||
Total Assets
|
$
|
6,570,554
|
|
|
|
|
|
|
|
|
$
|
6,193,879
|
|
|
|
|
|
|
|
|
$
|
5,783,771
|
|
|
|
|
|
|
|
|||
Liabilities and Shareholder’s Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Savings
|
$
|
2,278,396
|
|
|
1,567
|
|
|
0.07
|
|
|
$
|
2,117,186
|
|
|
1,402
|
|
|
0.07
|
|
|
$
|
1,980,151
|
|
|
1,257
|
|
|
0.06
|
|
|||
Interest-bearing checking
|
902,678
|
|
|
238
|
|
|
0.03
|
|
|
839,339
|
|
|
173
|
|
|
0.02
|
|
|
782,811
|
|
|
139
|
|
|
0.02
|
|
||||||
Money market
|
142,068
|
|
|
168
|
|
|
0.12
|
|
|
160,700
|
|
|
202
|
|
|
0.13
|
|
|
164,568
|
|
|
205
|
|
|
0.12
|
|
||||||
Time certificates
|
696,799
|
|
|
7,687
|
|
|
1.10
|
|
|
565,135
|
|
|
5,390
|
|
|
0.95
|
|
|
449,179
|
|
|
3,747
|
|
|
0.83
|
|
||||||
Total interest-bearing deposits
|
4,019,941
|
|
|
9,660
|
|
|
0.24
|
|
|
3,682,360
|
|
|
7,167
|
|
|
0.19
|
|
|
3,376,709
|
|
|
5,348
|
|
|
0.16
|
|
||||||
Advances from Federal Home Loan Bank
|
79,374
|
|
|
2,245
|
|
|
2.83
|
|
|
101,597
|
|
|
3,160
|
|
|
3.11
|
|
|
100,438
|
|
|
3,146
|
|
|
3.13
|
|
||||||
Securities sold under agreements to repurchase
|
97,535
|
|
|
251
|
|
|
0.26
|
|
|
169,730
|
|
|
2,428
|
|
|
1.43
|
|
|
219,351
|
|
|
2,832
|
|
|
1.29
|
|
||||||
Total interest-bearing liabilities
|
4,196,850
|
|
|
12,156
|
|
|
0.29
|
|
|
3,953,687
|
|
|
12,755
|
|
|
0.32
|
|
|
3,696,498
|
|
|
11,326
|
|
|
0.31
|
|
||||||
Noninterest bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Deposits
|
1,672,780
|
|
|
|
|
|
|
|
|
1,559,132
|
|
|
|
|
|
|
|
|
1,426,962
|
|
|
|
|
|
|
|
||||||
Other
|
102,789
|
|
|
|
|
|
|
|
|
102,302
|
|
|
|
|
|
|
|
|
109,386
|
|
|
|
|
|
|
|
||||||
Shareholder’s equity
|
598,135
|
|
|
|
|
|
|
|
|
578,758
|
|
|
|
|
|
|
|
|
550,925
|
|
|
|
|
|
|
|
||||||
Total Liabilities and Shareholder’s Equity
|
$
|
6,570,554
|
|
|
|
|
|
|
|
|
$
|
6,193,879
|
|
|
|
|
|
|
|
|
$
|
5,783,771
|
|
|
|
|
|
|
|
|||
Net interest income
|
|
|
|
$
|
224,151
|
|
|
|
|
|
|
|
|
$
|
206,213
|
|
|
|
|
|
|
|
|
$
|
188,576
|
|
|
|
|
|||
Net interest margin (%)
4
|
|
|
|
|
|
|
3.69
|
|
|
|
|
|
|
|
|
3.59
|
|
|
|
|
|
|
|
|
3.53
|
|
1
|
Interest income includes taxable equivalent basis adjustments, based upon a federal statutory tax rate of 35%, of $0.2 million, $0.01 million and nil for 2017, 2016 and 2015, respectively.
|
2
|
Includes loans held for sale, at lower of cost or fair value, of $7.4 million, $5.4 million and $5.6 million as of December 31, 2017, 2016 and 2015, respectively.
|
3
|
Includes recognition of net deferred loan fees of $1.7 million, $2.8 million and $2.7 million for 2017, 2016 and 2015 respectively, together with interest accrued prior to suspension of interest accrual on nonaccrual loans.
|
4
|
Defined as net interest income, on a fully taxable equivalent basis, as a percentage of average total interest-earning assets.
|
December 31
|
|
2017
|
|
2016
|
||||
Outstanding balance of home equity loans (in thousands)
|
|
$
|
913,052
|
|
|
$
|
863,163
|
|
Percent of portfolio in first lien position
|
|
48.0
|
%
|
|
45.1
|
%
|
||
Net charge-off (recovery) ratio
|
|
(0.03
|
)%
|
|
0.01
|
%
|
||
Delinquency ratio
|
|
0.28
|
%
|
|
0.35
|
%
|
|
|
|
|
|
|
End of draw period – interest only
|
|
Current
|
||||||||||||||||
December 31, 2017
|
|
Total
|
|
Interest only
|
|
2018-2019
|
|
2020-2022
|
|
Thereafter
|
|
amortizing
|
||||||||||||
Outstanding balance (in thousands)
|
|
$
|
913,052
|
|
|
$
|
718,231
|
|
|
$
|
70,443
|
|
|
$
|
116,936
|
|
|
$
|
530,852
|
|
|
$
|
194,821
|
|
% of total
|
|
100
|
%
|
|
79
|
%
|
|
8
|
%
|
|
13
|
%
|
|
58
|
%
|
|
21
|
%
|
December 31
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
(dollars in thousands)
|
|
Balance
|
|
% of total
|
|
Balance
|
|
% of total
|
|
Balance
|
|
% of total
|
|||||||||
U.S. Treasury and federal agency obligations
|
|
$
|
184,298
|
|
|
13
|
%
|
|
$
|
192,281
|
|
|
18
|
%
|
|
$
|
212,959
|
|
|
26
|
%
|
Mortgage-related securities — FNMA, FHLMC and GNMA
|
|
1,245,988
|
|
|
86
|
|
|
897,474
|
|
|
81
|
|
|
607,689
|
|
|
74
|
|
|||
Mortgage revenue bond
|
|
15,427
|
|
|
1
|
|
|
15,427
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||
Total investment securities
|
|
$
|
1,445,713
|
|
|
100
|
%
|
|
$
|
1,105,182
|
|
|
100
|
%
|
|
820,648
|
|
|
100
|
%
|
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
|
%
|
December 31
|
2017
|
|
|
% change
|
|
|
2016
|
|
|
% change
|
|
||
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||
Total assets
|
$
|
6,799
|
|
|
6
|
|
|
$
|
6,421
|
|
|
7
|
|
Investment securities
|
1,446
|
|
|
31
|
|
|
1,105
|
|
|
35
|
|
||
Loans receivable held for investment, net
|
4,617
|
|
|
(1
|
)
|
|
4,683
|
|
|
3
|
|
||
Deposit liabilities
|
5,891
|
|
|
6
|
|
|
5,549
|
|
|
10
|
|
||
Other bank borrowings
|
191
|
|
|
(1
|
)
|
|
193
|
|
|
(41
|
)
|
•
|
ASB met applicable minimum regulatory capital requirements (noted in parentheses) as of December 31, 2017 with a Tier 1 leverage ratio of 8.6% (4.0%), a common equity Tier 1 capital ratio of 13.0% (4.5%), a Tier 1 capital ratio of 13.0% (6.0%) and a total capital ratio of 14.2% (8.0%).
|
•
|
ASB met the capital requirements to be generally considered “well-capitalized” (noted in parentheses) as of December 31, 2017 with a Tier 1 leverage ratio of 8.6% (5.0%), a common equity Tier 1 capital ratio of 13.0% (6.5%), a Tier 1 capital ratio of 13.0% (8.0%) and a total capital ratio of 14.2% (10.0%).
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Bank interest rate risk
|
|
|
Change in NII
(gradual change in interest rates)
|
|
Change in EVE
(instantaneous change in interest rates)
|
||||||||
Change in interest rates
(basis points)
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
+300
|
|
3.0
|
%
|
|
1.9
|
%
|
|
(8.0
|
)%
|
|
(8.0
|
)%
|
+200
|
|
2.4
|
|
|
0.8
|
|
|
(4.0
|
)
|
|
(4.6
|
)
|
+100
|
|
1.6
|
|
|
—
|
|
|
(0.6
|
)
|
|
(1.6
|
)
|
-100
|
|
(2.7
|
)
|
|
(0.5
|
)
|
|
(6.0
|
)
|
|
(1.6
|
)
|
Other than bank interest rate risk
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Index to Consolidated Financial Statements
|
Page
|
Reports of Independent Registered Public Accounting Firms - HEI
|
|
Reports of Independent Registered Public Accounting Firms - Hawaiian Electric
|
|
HEI
|
|
Consolidated Statements of Income for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Balance Sheets at December 31, 2017 and 2016
|
|
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015
|
|
Hawaiian Electric
|
|
Consolidated Statements of Income for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Balance Sheets at December 31, 2017 and 2016
|
|
Consolidated Statements of Capitalization at December 31, 2017 and 2016
|
|
Consolidated Statements of Changes in Common Stock Equity for the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015
|
|
Notes to Consolidated Financial Statements
|
Report of Independent Registered Public Accounting Firm
|
Report of Independent Registered Public Accounting Firm
|
Report of Independent Registered Public Accounting Firm
|
Report of Independent Registered Public Accounting Firm
|
Consolidated Statements of Income
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|||
Revenues
|
|
|
|
|
|
|
|
|
|||
Electric utility
|
$
|
2,257,566
|
|
|
$
|
2,094,368
|
|
|
$
|
2,335,166
|
|
Bank
|
297,640
|
|
|
285,924
|
|
|
267,733
|
|
|||
Other
|
419
|
|
|
362
|
|
|
83
|
|
|||
Total revenues
|
2,555,625
|
|
|
2,380,654
|
|
|
2,602,982
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|||
Electric utility
|
2,000,045
|
|
|
1,809,900
|
|
|
2,061,050
|
|
|||
Bank
|
198,924
|
|
|
198,572
|
|
|
183,921
|
|
|||
Other
|
18,365
|
|
|
24,007
|
|
|
35,458
|
|
|||
Total expenses
|
2,217,334
|
|
|
2,032,479
|
|
|
2,280,429
|
|
|||
Operating income (loss)
|
|
|
|
|
|
|
|
|
|||
Electric utility
|
257,521
|
|
|
284,468
|
|
|
274,116
|
|
|||
Bank
|
98,716
|
|
|
87,352
|
|
|
83,812
|
|
|||
Other
|
(17,946
|
)
|
|
(23,645
|
)
|
|
(35,375
|
)
|
|||
Total operating income
|
338,291
|
|
|
348,175
|
|
|
322,553
|
|
|||
Merger termination fee
|
—
|
|
|
90,000
|
|
|
—
|
|
|||
Interest expense, net – other than on deposit liabilities and other bank borrowings
|
(78,972
|
)
|
|
(75,803
|
)
|
|
(77,150
|
)
|
|||
Allowance for borrowed funds used during construction
|
4,778
|
|
|
3,144
|
|
|
2,457
|
|
|||
Allowance for equity funds used during construction
|
12,483
|
|
|
8,325
|
|
|
6,928
|
|
|||
Income before income taxes
|
276,580
|
|
|
373,841
|
|
|
254,788
|
|
|||
Income taxes
|
109,393
|
|
|
123,695
|
|
|
93,021
|
|
|||
Net income
|
167,187
|
|
|
250,146
|
|
|
161,767
|
|
|||
Preferred stock dividends of subsidiaries
|
1,890
|
|
|
1,890
|
|
|
1,890
|
|
|||
Net income for common stock
|
$
|
165,297
|
|
|
$
|
248,256
|
|
|
$
|
159,877
|
|
Basic earnings per common share
|
$
|
1.52
|
|
|
$
|
2.30
|
|
|
$
|
1.50
|
|
Diluted earnings per common share
|
$
|
1.52
|
|
|
$
|
2.29
|
|
|
$
|
1.50
|
|
Weighted-average number of common shares outstanding
|
108,749
|
|
|
108,102
|
|
|
106,418
|
|
|||
Net effect of potentially dilutive shares
|
184
|
|
|
207
|
|
|
303
|
|
|||
Weighted-average shares assuming dilution
|
108,933
|
|
|
108,309
|
|
|
106,721
|
|
Consolidated Statements of Comprehensive Income
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Net income for common stock
|
$
|
165,297
|
|
|
$
|
248,256
|
|
|
$
|
159,877
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|||
Net unrealized losses on available-for sale investment securities:
|
|
|
|
|
|
|
|
|
|||
Net unrealized losses on available-for sale investment securities arising during the period, net of tax benefits of $2,886, $3,763 and $1,541 for 2017, 2016 and 2015, respectively
|
(4,370
|
)
|
|
(5,699
|
)
|
|
(2,334
|
)
|
|||
Reclassification adjustment for net realized gains included in net income, net of taxes of nil, $238 and nil for 2017, 2016 and 2015, respectively
|
—
|
|
|
(360
|
)
|
|
—
|
|
|||
Derivatives qualified as cash flow hedges:
|
|
|
|
|
|
|
|
|
|||
Effective portion of foreign currency hedge net unrealized gains (losses) arising during the period, net of (taxes) benefits of nil, $179 and nil for 2017, 2016 and 2015, respectively
|
—
|
|
|
(281
|
)
|
|
—
|
|
|||
Reclassification adjustment to net income, net of (taxes) benefits of $289, $(76) and $150 for 2017, 2016 and 2015, respectively
|
454
|
|
|
(119
|
)
|
|
235
|
|
|||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|||
Net gains (losses) arising during the period, net of (taxes) benefits of $(41,129), $27,703 and $(3,753) for 2017, 2016 and 2015, respectively
|
65,531
|
|
|
(43,510
|
)
|
|
5,889
|
|
|||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $10,041, $9,267 and $14,344 for 2017, 2016 and 2015, respectively
|
15,737
|
|
|
14,518
|
|
|
22,465
|
|
|||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of (taxes) benefits of $49,523, $(18,206) and $16,011 for 2017, 2016 and 2015, respectively
|
(78,724
|
)
|
|
28,584
|
|
|
(25,139
|
)
|
|||
Other comprehensive income (loss), net of taxes
|
(1,372
|
)
|
|
(6,867
|
)
|
|
1,116
|
|
|||
Comprehensive income attributable to Hawaiian Electric Industries, Inc.
|
$
|
163,925
|
|
|
$
|
241,389
|
|
|
$
|
160,993
|
|
Consolidated Balance Sheets
|
December 31
|
|
|
|
2017
|
|
|
|
|
|
2016
|
|
||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
|
|
$
|
261,881
|
|
|
|
|
|
$
|
278,452
|
|
||
Accounts receivable and unbilled revenues, net
|
|
|
|
263,209
|
|
|
|
|
|
237,950
|
|
||||
Available-for-sale investment securities, at fair value
|
|
|
|
1,401,198
|
|
|
|
|
|
1,105,182
|
|
||||
Held-to-maturity investment securities, at amortized cost
|
|
|
44,515
|
|
|
|
|
—
|
|
||||||
Stock in Federal Home Loan Bank, at cost
|
|
|
|
9,706
|
|
|
|
|
|
11,218
|
|
||||
Loans receivable held for investment, net
|
|
|
|
4,617,131
|
|
|
|
|
|
4,683,160
|
|
||||
Loans held for sale, at lower of cost or fair value
|
|
|
|
11,250
|
|
|
|
|
|
18,817
|
|
||||
Property, plant and equipment, net
|
|
|
|
|
|
|
|
|
|
|
|
||||
Land
|
$
|
106,435
|
|
|
|
|
|
$
|
97,423
|
|
|
|
|
||
Plant and equipment
|
7,140,427
|
|
|
|
|
|
6,727,935
|
|
|
|
|
||||
Construction in progress
|
332,349
|
|
|
|
|
|
222,455
|
|
|
|
|
||||
|
7,579,211
|
|
|
|
|
|
7,047,813
|
|
|
|
|
||||
Less – accumulated depreciation
|
(2,553,295
|
)
|
|
5,025,916
|
|
|
(2,444,348
|
)
|
|
4,603,465
|
|
||||
Regulatory assets
|
|
|
|
869,297
|
|
|
|
|
|
957,451
|
|
||||
Other
|
|
|
|
513,535
|
|
|
|
|
|
447,621
|
|
||||
Goodwill
|
|
|
|
82,190
|
|
|
|
|
|
82,190
|
|
||||
Total assets
|
|
|
|
$
|
13,099,828
|
|
|
|
|
|
$
|
12,425,506
|
|
||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accounts payable
|
|
|
|
$
|
193,714
|
|
|
|
|
|
$
|
143,279
|
|
||
Interest and dividends payable
|
|
|
|
25,837
|
|
|
|
|
|
25,225
|
|
||||
Deposit liabilities
|
|
|
|
5,890,597
|
|
|
|
|
|
5,548,929
|
|
||||
Short-term borrowings—other than bank
|
|
|
|
117,945
|
|
|
|
|
|
—
|
|
||||
Other bank borrowings
|
|
|
|
190,859
|
|
|
|
|
|
192,618
|
|
||||
Long-term debt, net—other than bank
|
|
|
|
1,683,797
|
|
|
|
|
|
1,619,019
|
|
||||
Deferred income taxes
|
|
|
|
388,430
|
|
|
|
|
|
728,806
|
|
||||
Regulatory liabilities
|
|
|
|
880,770
|
|
|
|
|
|
410,693
|
|
||||
Contributions in aid of construction
|
|
|
|
565,668
|
|
|
|
|
|
543,525
|
|
||||
Defined benefit pension and other postretirement benefit plans liability
|
|
|
|
509,514
|
|
|
|
|
|
638,854
|
|
||||
Other
|
|
|
|
521,018
|
|
|
|
|
|
473,512
|
|
||||
Total liabilities
|
|
|
|
10,968,149
|
|
|
|
|
|
10,324,460
|
|
||||
Preferred stock of subsidiaries - not subject to mandatory redemption
|
|
|
|
34,293
|
|
|
|
|
|
34,293
|
|
||||
Commitments and contingencies (Notes 3 and 4)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
||||
Preferred stock, no par value, authorized 10,000,000 shares; issued: none
|
|
|
|
—
|
|
|
|
|
|
—
|
|
||||
Common stock, no par value, authorized 200,000,000 shares; issued and outstanding: 108,787,807 shares and 108,583,413 shares at December 31, 2017 and 2016, respectively
|
|
|
|
1,662,491
|
|
|
|
|
|
1,660,910
|
|
||||
Retained earnings
|
|
|
|
476,836
|
|
|
|
|
|
438,972
|
|
||||
Accumulated other comprehensive loss, net of tax benefits
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized losses on securities
|
$
|
(14,951
|
)
|
|
|
|
|
$
|
(7,931
|
)
|
|
|
|
||
Unrealized losses on derivatives
|
—
|
|
|
|
|
|
(454
|
)
|
|
|
|
||||
Retirement benefit plans
|
(26,990
|
)
|
|
(41,941
|
)
|
|
(24,744
|
)
|
|
(33,129
|
)
|
||||
Total shareholders’ equity
|
|
|
|
2,097,386
|
|
|
|
|
|
2,066,753
|
|
||||
Total liabilities and shareholders’ equity
|
|
|
|
$
|
13,099,828
|
|
|
|
|
|
$
|
12,425,506
|
|
Consolidated Statements of Changes in Shareholders’ Equity
|
|
Common stock
|
|
Retained
|
|
Accumulated
other
comprehensive
|
|
|
|||||||||||
(in thousands, except per share amounts)
|
Shares
|
|
Amount
|
|
earnings
|
|
income (loss)
|
|
Total
|
|||||||||
Balance, December 31, 2014
|
102,565
|
|
|
$
|
1,521,297
|
|
|
$
|
296,654
|
|
|
$
|
(27,378
|
)
|
|
$
|
1,790,573
|
|
Net income for common stock
|
—
|
|
|
—
|
|
|
159,877
|
|
|
—
|
|
|
159,877
|
|
||||
Other comprehensive income, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
1,116
|
|
|
1,116
|
|
||||
Issuance of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Partial settlement of equity forward
|
4,700
|
|
|
109,183
|
|
|
—
|
|
|
—
|
|
|
109,183
|
|
||||
Retirement savings and other plans
|
195
|
|
|
5,578
|
|
|
—
|
|
|
—
|
|
|
5,578
|
|
||||
Expenses and other, net
|
—
|
|
|
(6,922
|
)
|
|
—
|
|
|
—
|
|
|
(6,922
|
)
|
||||
Common stock dividends ($1.24 per share)
|
—
|
|
|
—
|
|
|
(131,765
|
)
|
|
—
|
|
|
(131,765
|
)
|
||||
Balance, December 31, 2015
|
107,460
|
|
|
1,629,136
|
|
|
324,766
|
|
|
(26,262
|
)
|
|
1,927,640
|
|
||||
Net income for common stock
|
—
|
|
|
—
|
|
|
248,256
|
|
|
—
|
|
|
248,256
|
|
||||
Other comprehensive loss, net of tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,867
|
)
|
|
(6,867
|
)
|
||||
Issuance of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dividend reinvestment and stock purchase plan
|
859
|
|
|
26,844
|
|
|
—
|
|
|
—
|
|
|
26,844
|
|
||||
Retirement savings and other plans
|
264
|
|
|
9,298
|
|
|
—
|
|
|
—
|
|
|
9,298
|
|
||||
Expenses and other, net
|
—
|
|
|
(4,368
|
)
|
|
—
|
|
|
—
|
|
|
(4,368
|
)
|
||||
Common stock dividends ($1.24 per share)
|
—
|
|
|
—
|
|
|
(134,050
|
)
|
|
—
|
|
|
(134,050
|
)
|
||||
Balance, December 31, 2016
|
108,583
|
|
|
1,660,910
|
|
|
438,972
|
|
|
(33,129
|
)
|
|
2,066,753
|
|
||||
Net income for common stock
|
—
|
|
|
—
|
|
|
165,297
|
|
|
—
|
|
|
165,297
|
|
||||
Other comprehensive loss, net of tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,372
|
)
|
|
(1,372
|
)
|
||||
Reclass of AOCI for tax rate reduction impact
|
—
|
|
|
—
|
|
|
7,440
|
|
|
(7,440
|
)
|
|
—
|
|
||||
Issuance of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Retirement savings and other plans
|
205
|
|
|
4,664
|
|
|
—
|
|
|
—
|
|
|
4,664
|
|
||||
Expenses and other, net
|
—
|
|
|
(3,083
|
)
|
|
—
|
|
|
—
|
|
|
(3,083
|
)
|
||||
Common stock dividends ($1.24 per share)
|
—
|
|
|
—
|
|
|
(134,873
|
)
|
|
—
|
|
|
(134,873
|
)
|
||||
Balance, December 31, 2017
|
108,788
|
|
|
$
|
1,662,491
|
|
|
$
|
476,836
|
|
|
$
|
(41,941
|
)
|
|
$
|
2,097,386
|
|
Consolidated Statements of Cash Flows
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
167,187
|
|
|
$
|
250,146
|
|
|
$
|
161,767
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|||
Depreciation of property, plant and equipment
|
200,658
|
|
|
194,273
|
|
|
183,966
|
|
|||
Other amortization
|
21,340
|
|
|
10,473
|
|
|
11,619
|
|
|||
Provision for loan losses
|
10,901
|
|
|
16,763
|
|
|
6,275
|
|
|||
Impairment of utility assets
|
—
|
|
|
—
|
|
|
6,021
|
|
|||
Loans receivable originated and purchased, held for sale
|
(115,104
|
)
|
|
(236,769
|
)
|
|
(268,279
|
)
|
|||
Proceeds from sale of loans receivable, held for sale
|
127,951
|
|
|
236,062
|
|
|
275,296
|
|
|||
Deferred income taxes
|
37,835
|
|
|
47,118
|
|
|
41,432
|
|
|||
Share-based compensation expense
|
5,404
|
|
|
4,789
|
|
|
6,542
|
|
|||
Allowance for equity funds used during construction
|
(12,483
|
)
|
|
(8,325
|
)
|
|
(6,928
|
)
|
|||
Other
|
(3,324
|
)
|
|
(12,422
|
)
|
|
1,672
|
|
|||
Changes in assets and liabilities
|
|
|
|
|
|
|
|
|
|||
Decrease (increase) in accounts receivable and unbilled revenues, net
|
(12,875
|
)
|
|
(898
|
)
|
|
62,304
|
|
|||
Decrease (increase) in fuel oil stock
|
(20,794
|
)
|
|
4,786
|
|
|
34,830
|
|
|||
Increase in regulatory assets
|
(17,256
|
)
|
|
(18,273
|
)
|
|
(24,182
|
)
|
|||
Increase (decrease) in accounts, interest and dividends payable
|
34,985
|
|
|
(9,643
|
)
|
|
(52,663
|
)
|
|||
Change in prepaid and accrued income taxes, tax credits and utility revenue taxes
|
20,685
|
|
|
39,109
|
|
|
(42,596
|
)
|
|||
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability
|
882
|
|
|
1,587
|
|
|
852
|
|
|||
Change in other assets and liabilities
|
(25,551
|
)
|
|
(23,118
|
)
|
|
(41,070
|
)
|
|||
Net cash provided by operating activities
|
420,441
|
|
|
495,658
|
|
|
356,858
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Available-for-sale investment securities purchased
|
(528,379
|
)
|
|
(533,956
|
)
|
|
(429,262
|
)
|
|||
Principal repayments on available-for-sale investment securities
|
220,231
|
|
|
219,845
|
|
|
153,271
|
|
|||
Proceeds from sale of available-for-sale investment securities
|
—
|
|
|
16,423
|
|
|
—
|
|
|||
Purchases of held-to-maturity investment securities
|
(44,515
|
)
|
|
—
|
|
|
—
|
|
|||
Purchase of stock from Federal Home Loan Bank
|
(2,868
|
)
|
|
(7,773
|
)
|
|
(1,600
|
)
|
|||
Redemption of stock from Federal Home Loan Bank
|
4,380
|
|
|
7,233
|
|
|
60,223
|
|
|||
Net decrease (increase) in loans held for investment
|
15,887
|
|
|
(194,042
|
)
|
|
(181,343
|
)
|
|||
Proceeds from sale of commercial loans
|
36,760
|
|
|
52,299
|
|
|
—
|
|
|||
Proceeds from sale of real estate acquired in settlement of loans
|
1,019
|
|
|
829
|
|
|
1,329
|
|
|||
Proceeds from sale of real estate held for sale
|
—
|
|
|
1,764
|
|
|
7,283
|
|
|||
Capital expenditures
|
(495,187
|
)
|
|
(330,043
|
)
|
|
(363,804
|
)
|
|||
Contributions in aid of construction
|
64,733
|
|
|
30,100
|
|
|
40,239
|
|
|||
Contributions to low income housing investments
|
(17,505
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition of business
|
(76,323
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
6,468
|
|
|
856
|
|
|
7,940
|
|
|||
Net cash used in investing activities
|
(815,299
|
)
|
|
(736,465
|
)
|
|
(705,724
|
)
|
Consolidated Statements of Cash Flows (continued)
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Net increase in deposit liabilities
|
341,668
|
|
|
523,675
|
|
|
401,839
|
|
|||
Net increase (decrease) in short-term borrowings with original maturities of three months or less
|
67,992
|
|
|
(103,063
|
)
|
|
(15,909
|
)
|
|||
Proceeds from issuance of short-term debt
|
125,000
|
|
|
—
|
|
|
—
|
|
|||
Repayment of short-term debt
|
(75,000
|
)
|
|
—
|
|
|
—
|
|
|||
Net increase (decrease) in retail repurchase agreements
|
61,776
|
|
|
(43,601
|
)
|
|
37,925
|
|
|||
Proceeds from other bank borrowings
|
59,500
|
|
|
180,835
|
|
|
50,000
|
|
|||
Repayments of other bank borrowings
|
(123,034
|
)
|
|
(272,902
|
)
|
|
(50,000
|
)
|
|||
Proceeds from issuance of long-term debt
|
532,325
|
|
|
115,000
|
|
|
80,000
|
|
|||
Repayment of long-term debt and funds transferred for redemption of special purpose revenue bonds
|
(465,000
|
)
|
|
(75,000
|
)
|
|
—
|
|
|||
Withheld shares for employee taxes on vested share-based compensation
|
(3,828
|
)
|
|
(2,416
|
)
|
|
(3,260
|
)
|
|||
Net proceeds from issuance of common stock
|
—
|
|
|
13,220
|
|
|
104,435
|
|
|||
Common stock dividends
|
(134,873
|
)
|
|
(117,274
|
)
|
|
(131,765
|
)
|
|||
Preferred stock dividends of subsidiaries
|
(1,890
|
)
|
|
(1,890
|
)
|
|
(1,890
|
)
|
|||
Other
|
(6,349
|
)
|
|
2,197
|
|
|
2,427
|
|
|||
Net cash provided by financing activities
|
378,287
|
|
|
218,781
|
|
|
473,802
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
(16,571
|
)
|
|
(22,026
|
)
|
|
124,936
|
|
|||
Cash and cash equivalents, January 1
|
278,452
|
|
|
300,478
|
|
|
175,542
|
|
|||
Cash and cash equivalents, December 31
|
$
|
261,881
|
|
|
$
|
278,452
|
|
|
$
|
300,478
|
|
Consolidated Statements of Income
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Revenues
|
$
|
2,257,566
|
|
|
$
|
2,094,368
|
|
|
$
|
2,335,166
|
|
Expenses
|
|
|
|
|
|
|
|
|
|||
Fuel oil
|
587,768
|
|
|
454,704
|
|
|
654,600
|
|
|||
Purchased power
|
586,634
|
|
|
562,740
|
|
|
594,096
|
|
|||
Other operation and maintenance
|
417,910
|
|
|
405,533
|
|
|
413,089
|
|
|||
Depreciation
|
192,784
|
|
|
187,061
|
|
|
177,380
|
|
|||
Taxes, other than income taxes
|
214,949
|
|
|
199,862
|
|
|
221,885
|
|
|||
Total expenses
|
2,000,045
|
|
|
1,809,900
|
|
|
2,061,050
|
|
|||
Operating income
|
257,521
|
|
|
284,468
|
|
|
274,116
|
|
|||
Allowance for equity funds used during construction
|
12,483
|
|
|
8,325
|
|
|
6,928
|
|
|||
Interest expense and other charges, net
|
(69,637
|
)
|
|
(66,824
|
)
|
|
(66,370
|
)
|
|||
Allowance for borrowed funds used during construction
|
4,778
|
|
|
3,144
|
|
|
2,457
|
|
|||
Income before income taxes
|
205,145
|
|
|
229,113
|
|
|
217,131
|
|
|||
Income taxes
|
83,199
|
|
|
84,801
|
|
|
79,422
|
|
|||
Net income
|
121,946
|
|
|
144,312
|
|
|
137,709
|
|
|||
Preferred stock dividends of subsidiaries
|
915
|
|
|
915
|
|
|
915
|
|
|||
Net income attributable to Hawaiian Electric
|
121,031
|
|
|
143,397
|
|
|
136,794
|
|
|||
Preferred stock dividends of Hawaiian Electric
|
1,080
|
|
|
1,080
|
|
|
1,080
|
|
|||
Net income for common stock
|
$
|
119,951
|
|
|
$
|
142,317
|
|
|
$
|
135,714
|
|
Consolidated Statements of Comprehensive Income
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
(in thousands)
|
|
|
|
|
|
||||||
Net income for common stock
|
$
|
119,951
|
|
|
$
|
142,317
|
|
|
$
|
135,714
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|||
Derivatives qualified as cash flow hedges:
|
|
|
|
|
|
||||||
Effective portion of foreign currency hedge net unrealized losses arising during the period, net of tax benefits of nil, $179 and nil for 2017, 2016 and 2015, respectively
|
—
|
|
|
(281
|
)
|
|
—
|
|
|||
Reclassification adjustment to net income, net of taxes of $289, $110 and nil for 2017, 2016 and 2015, respectively
|
454
|
|
|
(173
|
)
|
|
—
|
|
|||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|||
Net gains (losses) arising during the period, net of (taxes) benefits of $(39,587), $27,153 and $(3,590) for 2017, 2016 and 2015, respectively
|
63,105
|
|
|
(42,631
|
)
|
|
5,638
|
|
|||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $9,221, $8,442 and $12,981 for 2017, 2016 and 2015, respectively
|
14,477
|
|
|
13,254
|
|
|
20,381
|
|
|||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of (taxes) benefits of $49,523, $(18,206) and $16,011 for 2017, 2016 and 2015, respectively
|
(78,724
|
)
|
|
28,584
|
|
|
(25,139
|
)
|
|||
Other comprehensive income (loss), net of taxes
|
(688
|
)
|
|
(1,247
|
)
|
|
880
|
|
|||
Comprehensive income attributable to Hawaiian Electric Company, Inc.
|
$
|
119,263
|
|
|
$
|
141,070
|
|
|
$
|
136,594
|
|
Consolidated Balance Sheets
|
December 31
|
2017
|
|
|
2016
|
|
||
(in thousands)
|
|
|
|
|
|
||
Assets
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
||||
Utility property, plant and equipment
|
|
|
|
|
|
||
Land
|
$
|
53,177
|
|
|
$
|
53,153
|
|
Plant and equipment
|
6,946,563
|
|
|
6,605,732
|
|
||
Less accumulated depreciation
|
(2,476,352
|
)
|
|
(2,369,282
|
)
|
||
Construction in progress
|
283,239
|
|
|
211,742
|
|
||
Utility property, plant and equipment, net
|
4,806,627
|
|
|
4,501,345
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation of $1,251 as of December 31, 2017 and $1,232 as of December 31, 2016
|
7,580
|
|
|
7,407
|
|
||
Total property, plant and equipment, net
|
4,814,207
|
|
|
4,508,752
|
|
||
Current assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
12,517
|
|
|
74,286
|
|
||
Customer accounts receivable, net
|
127,889
|
|
|
123,688
|
|
||
Accrued unbilled revenues, net
|
107,054
|
|
|
91,693
|
|
||
Other accounts receivable, net
|
7,163
|
|
|
5,233
|
|
||
Fuel oil stock, at average cost
|
86,873
|
|
|
66,430
|
|
||
Materials and supplies, at average cost
|
54,397
|
|
|
53,679
|
|
||
Prepayments and other
|
25,355
|
|
|
23,100
|
|
||
Regulatory assets
|
88,390
|
|
|
66,032
|
|
||
Total current assets
|
509,638
|
|
|
504,141
|
|
||
Other long-term assets
|
|
|
|
|
|
||
Regulatory assets
|
780,907
|
|
|
891,419
|
|
||
Unamortized debt expense
|
611
|
|
|
208
|
|
||
Other
|
90,918
|
|
|
70,908
|
|
||
Total other long-term assets
|
872,436
|
|
|
962,535
|
|
||
Total assets
|
$
|
6,196,281
|
|
|
$
|
5,975,428
|
|
Capitalization and liabilities
|
|
|
|
|
|
||
Capitalization
(see Consolidated Statements of Capitalization)
|
|
|
|
|
|
||
Common stock equity
|
$
|
1,845,283
|
|
|
$
|
1,799,787
|
|
Cumulative preferred stock – not subject to mandatory redemption
|
34,293
|
|
|
34,293
|
|
||
Commitments and contingencies (Note 3)
|
|
|
|
|
|
||
Long-term debt, net
|
1,318,516
|
|
|
1,319,260
|
|
||
Total capitalization
|
3,198,092
|
|
|
3,153,340
|
|
||
Current liabilities
|
|
|
|
|
|
||
Current portion of long-term debt
|
49,963
|
|
|
—
|
|
||
Short-term borrowings from non-affiliate
|
4,999
|
|
|
—
|
|
||
Accounts payable
|
159,610
|
|
|
117,814
|
|
||
Interest and preferred dividends payable
|
22,575
|
|
|
22,838
|
|
||
Taxes accrued, including revenue taxes
|
199,101
|
|
|
172,730
|
|
||
Regulatory liabilities
|
3,401
|
|
|
3,762
|
|
||
Other
|
59,456
|
|
|
55,221
|
|
||
Total current liabilities
|
499,105
|
|
|
372,365
|
|
||
Deferred credits and other liabilities
|
|
|
|
|
|
||
Deferred income taxes
|
394,041
|
|
|
733,659
|
|
||
Regulatory liabilities
|
877,369
|
|
|
406,931
|
|
||
Unamortized tax credits
|
90,369
|
|
|
88,961
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
472,948
|
|
|
599,726
|
|
||
Other
|
98,689
|
|
|
76,921
|
|
||
Total deferred credits and other liabilities
|
1,933,416
|
|
|
1,906,198
|
|
||
Contributions in aid of construction
|
565,668
|
|
|
543,525
|
|
||
Total capitalization and liabilities
|
$
|
6,196,281
|
|
|
$
|
5,975,428
|
|
Consolidated Statements of Capitalization
|
December 31
|
2017
|
|
2016
|
||||||||||
(dollars in thousands, except par value)
|
|
|
|
|
|
|
|
|
|
||||
Common stock equity
|
|
|
|
|
|
|
|
|
|
||||
Common stock of $6 2/3 par value
|
|
|
|
|
|
|
|
|
|
||||
Authorized: 50,000,000 shares. Outstanding: 16,142,216 shares and
|
|
|
|
|
|
|
|
|
|
||||
16,019,785 shares at December 31, 2017 and 2016, respectively
|
|
|
$
|
107,634
|
|
|
|
|
$
|
106,818
|
|
||
Premium on capital stock
|
|
|
614,675
|
|
|
|
|
601,491
|
|
||||
Retained earnings
|
|
|
1,124,193
|
|
|
|
|
1,091,800
|
|
||||
Accumulated other comprehensive income (loss), net of taxes
|
|
|
|
|
|
|
|
||||||
Unrealized losses on derivatives
|
—
|
|
|
|
|
(454
|
)
|
|
|
||||
Retirement benefit plans
|
(1,219
|
)
|
|
(1,219
|
)
|
|
132
|
|
|
(322
|
)
|
||
Common stock equity
|
|
|
1,845,283
|
|
|
|
|
1,799,787
|
|
||||
Cumulative preferred stock not subject to mandatory redemption
|
|
|
|
|
|
|
|
|
|
||||
Authorized: 5,000,000 shares of $20 par value and 7,000,000 shares of $100 par value.
|
|
|
|
|
|
|
|
|
|
Series
|
|
Par Value
|
|
|
|
Shares outstanding December 31, 2017 and 2016
|
|
2017
|
|
2016
|
|||||||
(dollars in thousands, except par value and shares outstanding)
|
|
|
|
|
|||||||||||||
C-4 1/4%
|
|
$
|
20
|
|
|
(Hawaiian Electric)
|
|
150,000
|
|
|
$
|
3,000
|
|
|
$
|
3,000
|
|
D-5%
|
|
20
|
|
|
(Hawaiian Electric)
|
|
50,000
|
|
|
1,000
|
|
|
1,000
|
|
|||
E-5%
|
|
20
|
|
|
(Hawaiian Electric)
|
|
150,000
|
|
|
3,000
|
|
|
3,000
|
|
|||
H-5 1/4%
|
|
20
|
|
|
(Hawaiian Electric)
|
|
250,000
|
|
|
5,000
|
|
|
5,000
|
|
|||
I-5%
|
|
20
|
|
|
(Hawaiian Electric)
|
|
89,657
|
|
|
1,793
|
|
|
1,793
|
|
|||
J-4 3/4%
|
|
20
|
|
|
(Hawaiian Electric)
|
|
250,000
|
|
|
5,000
|
|
|
5,000
|
|
|||
K-4.65%
|
|
20
|
|
|
(Hawaiian Electric)
|
|
175,000
|
|
|
3,500
|
|
|
3,500
|
|
|||
G-7 5/8%
|
|
100
|
|
|
(Hawaii Electric Light)
|
|
70,000
|
|
|
7,000
|
|
|
7,000
|
|
|||
H-7 5/8%
|
|
100
|
|
|
(Maui Electric)
|
|
50,000
|
|
|
5,000
|
|
|
5,000
|
|
|||
|
|
|
|
|
|
|
1,234,657
|
|
|
34,293
|
|
|
34,293
|
|
Consolidated Statements of Capitalization (continued)
|
December 31
|
2017
|
|
2016
|
||||
(in thousands)
|
|
|
|
|
|
||
Long-term debt
|
|
|
|
|
|
||
Obligations to the State of Hawaii for the repayment of Special Purpose Revenue Bonds (subsidiary obligations unconditionally guaranteed by Hawaiian Electric):
|
|
|
|
||||
3.10%, Refunding series 2017A, due 2026
|
$
|
125,000
|
|
|
$
|
—
|
|
4.00%, Refunding series 2017B, due 2037
|
140,000
|
|
|
—
|
|
||
3.25%, Refunding series 2015, due 2025
|
47,000
|
|
|
47,000
|
|
||
6.50%, Series 2009, due 2039
|
150,000
|
|
|
150,000
|
|
||
4.65%, Series 2007A, paid in 2017
|
—
|
|
|
140,000
|
|
||
4.60%, Refunding series 2007B, paid in 2017
|
—
|
|
|
125,000
|
|
||
Total obligations to the State of Hawaii
|
$
|
462,000
|
|
|
$
|
462,000
|
|
Other long-term debt – unsecured:
|
|
|
|
|
|
||
Taxable senior notes:
|
|
|
|
||||
4.31%, Series 2017A, due 2047
|
$
|
50,000
|
|
|
$
|
—
|
|
4.54%, Series 2016A, due 2046
|
40,000
|
|
|
40,000
|
|
||
5.23%, Series 2015A, due 2045
|
80,000
|
|
|
80,000
|
|
||
3.83%, Series 2013A, due 2020
|
14,000
|
|
|
14,000
|
|
||
4.45%, Series 2013A and 2013B, due 2022
|
52,000
|
|
|
52,000
|
|
||
4.84%, Series 2013A, 2013B and 2013C, due 2027
|
100,000
|
|
|
100,000
|
|
||
5.65%, Series 2013B and 2013C, due 2043
|
70,000
|
|
|
70,000
|
|
||
3.79%, Series 2012A, due 2018
|
50,000
|
|
|
50,000
|
|
||
4.03%, Series 2012B, due 2020
|
82,000
|
|
|
82,000
|
|
||
4.55%, Series 2012B and 2012C, due 2023
|
100,000
|
|
|
100,000
|
|
||
4.72%, Series 2012D, due 2029
|
35,000
|
|
|
35,000
|
|
||
5.39%, Series 2012E, due 2042
|
150,000
|
|
|
150,000
|
|
||
4.53%, Series 2012F, due 2032
|
40,000
|
|
|
40,000
|
|
||
Total taxable senior notes
|
863,000
|
|
|
813,000
|
|
||
6.50 %, series 2004, Junior subordinated deferrable interest debentures, due 2034
|
51,546
|
|
|
51,546
|
|
||
Total other long-term debt – unsecured
|
914,546
|
|
|
864,546
|
|
||
Total long-term debt
|
1,376,546
|
|
|
1,326,546
|
|
||
Less unamortized debt issuance costs
|
8,067
|
|
|
7,286
|
|
||
Less current portion long-term debt, net of unamortized debt issuance costs
|
49,963
|
|
|
—
|
|
||
Long-term debt, net
|
1,318,516
|
|
|
1,319,260
|
|
||
Total capitalization
|
$
|
3,198,092
|
|
|
$
|
3,153,340
|
|
Consolidated Statements of Changes in Common Stock Equity
|
|
Common stock
|
|
Premium
on
capital
|
|
Retained
|
|
Accumulated
other
comprehensive
|
|
|
|||||||||||||
(in thousands)
|
Shares
|
|
Amount
|
|
stock
|
|
earnings
|
|
income (loss)
|
|
Total
|
|||||||||||
Balance, December 31, 2014
|
15,805
|
|
|
$
|
105,388
|
|
|
$
|
578,938
|
|
|
$
|
997,773
|
|
|
$
|
45
|
|
|
$
|
1,682,144
|
|
Net income for common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
135,714
|
|
|
—
|
|
|
135,714
|
|
|||||
Other comprehensive income, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
880
|
|
|
880
|
|
|||||
Issuance of common stock, net of expenses
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(90,405
|
)
|
|
—
|
|
|
(90,405
|
)
|
|||||
Balance, December 31, 2015
|
15,805
|
|
|
105,388
|
|
|
578,930
|
|
|
1,043,082
|
|
|
925
|
|
|
1,728,325
|
|
|||||
Net income for common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
142,317
|
|
|
—
|
|
|
142,317
|
|
|||||
Other comprehensive loss, net of tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,247
|
)
|
|
(1,247
|
)
|
|||||
Issuance of common stock, net of expenses
|
215
|
|
|
1,430
|
|
|
22,561
|
|
|
—
|
|
|
—
|
|
|
23,991
|
|
|||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(93,599
|
)
|
|
—
|
|
|
(93,599
|
)
|
|||||
Balance, December 31, 2016
|
16,020
|
|
|
106,818
|
|
|
601,491
|
|
|
1,091,800
|
|
|
(322
|
)
|
|
1,799,787
|
|
|||||
Net income for common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
119,951
|
|
|
—
|
|
|
119,951
|
|
|||||
Other comprehensive loss, net of tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(688
|
)
|
|
(688
|
)
|
|||||
Reclass of AOCI for tax rate reduction impact
|
—
|
|
|
—
|
|
|
—
|
|
|
209
|
|
|
(209
|
)
|
|
—
|
|
|||||
Issuance of common stock, net of expenses
|
122
|
|
|
816
|
|
|
13,184
|
|
|
—
|
|
|
—
|
|
|
14,000
|
|
|||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(87,767
|
)
|
|
—
|
|
|
(87,767
|
)
|
|||||
Balance, December 31, 2017
|
16,142
|
|
|
$
|
107,634
|
|
|
$
|
614,675
|
|
|
$
|
1,124,193
|
|
|
$
|
(1,219
|
)
|
|
$
|
1,845,283
|
|
Consolidated Statements of Cash Flows
|
Years ended December 31
|
2017
|
|
2016
|
|
2015
|
||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
121,946
|
|
|
$
|
144,312
|
|
|
$
|
137,709
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|||
Depreciation of property, plant and equipment
|
192,784
|
|
|
187,061
|
|
|
177,380
|
|
|||
Other amortization
|
8,498
|
|
|
6,935
|
|
|
8,939
|
|
|||
Impairment of utility assets
|
—
|
|
|
—
|
|
|
6,021
|
|
|||
Deferred income taxes
|
38,037
|
|
|
74,386
|
|
|
75,626
|
|
|||
Allowance for equity funds used during construction
|
(12,483
|
)
|
|
(8,325
|
)
|
|
(6,928
|
)
|
|||
Other
|
(1,066
|
)
|
|
(3,700
|
)
|
|
6,516
|
|
|||
Changes in assets and liabilities
|
|
|
|
|
|
|
|
|
|||
Decrease in accounts receivable
|
2,914
|
|
|
8,551
|
|
|
23,727
|
|
|||
Decrease (increase) in accrued unbilled revenues
|
(15,361
|
)
|
|
(7,184
|
)
|
|
40,093
|
|
|||
Decrease (increase) in fuel oil stock
|
(20,443
|
)
|
|
4,786
|
|
|
34,830
|
|
|||
Decrease (increase) in materials and supplies
|
(718
|
)
|
|
750
|
|
|
2,821
|
|
|||
Increase in regulatory assets
|
(17,256
|
)
|
|
(18,273
|
)
|
|
(24,182
|
)
|
|||
Increase (decrease) in accounts payable
|
25,734
|
|
|
(10,614
|
)
|
|
(54,555
|
)
|
|||
Change in prepaid and accrued income taxes, tax credits and revenue taxes
|
29,862
|
|
|
2,123
|
|
|
(63,096
|
)
|
|||
Increase in defined benefit pension and other postretirement
benefit plans liability |
604
|
|
|
484
|
|
|
1,125
|
|
|||
Change in other assets and liabilities
|
(17,866
|
)
|
|
(11,375
|
)
|
|
(32,620
|
)
|
|||
Net cash provided by operating activities
|
335,186
|
|
|
369,917
|
|
|
333,406
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
(441,598
|
)
|
|
(320,437
|
)
|
|
(350,161
|
)
|
|||
Contributions in aid of construction
|
64,733
|
|
|
30,100
|
|
|
40,239
|
|
|||
Other
|
4,578
|
|
|
2,138
|
|
|
1,140
|
|
|||
Net cash used in investing activities
|
(372,287
|
)
|
|
(288,199
|
)
|
|
(308,782
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Common stock dividends
|
(87,767
|
)
|
|
(93,599
|
)
|
|
(90,405
|
)
|
|||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
(1,995
|
)
|
|
(1,995
|
)
|
|
(1,995
|
)
|
|||
Proceeds from issuance of common stock
|
14,000
|
|
|
24,000
|
|
|
—
|
|
|||
Proceeds from issuance of long-term debt
|
315,000
|
|
|
40,000
|
|
|
80,000
|
|
|||
Funds transferred for redemption of special purpose revenue bonds
|
(265,000
|
)
|
|
—
|
|
|
—
|
|
|||
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
4,999
|
|
|
—
|
|
|
—
|
|
|||
Other
|
(3,905
|
)
|
|
(287
|
)
|
|
(1,537
|
)
|
|||
Net cash used in financing activities
|
(24,668
|
)
|
|
(31,881
|
)
|
|
(13,937
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(61,769
|
)
|
|
49,837
|
|
|
10,687
|
|
|||
Cash and cash equivalents, January 1
|
74,286
|
|
|
24,449
|
|
|
13,762
|
|
|||
Cash and cash equivalents, December 31
|
$
|
12,517
|
|
|
$
|
74,286
|
|
|
$
|
24,449
|
|
1
·
Summary of significant accounting policies
|
General
|
(in millions)
|
HEI
|
|
Hawaiian Electric
|
||||
2018
|
$
|
11
|
|
|
$
|
6
|
|
2019
|
10
|
|
|
5
|
|
||
2020
|
8
|
|
|
5
|
|
||
2021
|
7
|
|
|
5
|
|
||
2022
|
4
|
|
|
3
|
|
||
Thereafter
|
36
|
|
|
29
|
|
||
|
$
|
76
|
|
|
$
|
53
|
|
Level 1:
|
Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and is used to measure fair value whenever available.
|
Level 2:
|
Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; inputs to the valuation methodology include quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs to the valuation methodology that are derived principally from or can be corroborated by observable market data by correlation or other means.
|
Level 3:
|
Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
|
•
|
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.
|
Electric utility
|
Bank (HEI only)
|
•
|
changes in lending policies and procedures;
|
•
|
changes in economic and business conditions and developments that affect the collectability of the portfolio;
|
•
|
changes in the nature, volume and terms of the loan portfolio;
|
•
|
changes in lending management and other relevant staff;
|
•
|
changes in loan quality (past due, non-accrual, classified loans);
|
•
|
changes in the quality of the loan review system;
|
•
|
changes in the value of underlying collateral;
|
•
|
effect of, and changes in the level of, any concentrations of credit; and
|
•
|
effect of other external and internal factors.
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
(in millions)
|
|
|
|
|
|
|
|
|
|||
Amounts in income taxes related to investments in qualifying affordable housing projects
|
|
|
|
|
|
|
|
|
|||
Amortization recognized in the provision for income taxes
|
$
|
(7.4
|
)
|
|
$
|
(5.8
|
)
|
|
$
|
(5.4
|
)
|
Tax credits and other tax benefits recognized in the provision for income taxes
|
10.7
|
|
|
8.4
|
|
|
8.0
|
|
|||
Net benefit to income tax expense
|
$
|
3.3
|
|
|
$
|
2.6
|
|
|
$
|
2.6
|
|
2
·
Segment financial information
|
Electric utility
|
Bank
|
Other
|
(in thousands)
|
Electric utility
|
|
Bank
|
|
|
Other
|
|
|
Total
|
|
|||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues from external customers
|
$
|
2,257,455
|
|
|
$
|
297,640
|
|
|
$
|
530
|
|
|
$
|
2,555,625
|
|
Intersegment revenues (eliminations)
|
111
|
|
|
—
|
|
|
(111
|
)
|
|
—
|
|
||||
Revenues
|
2,257,566
|
|
|
297,640
|
|
|
419
|
|
|
2,555,625
|
|
||||
Depreciation and amortization
|
201,282
|
|
|
19,416
|
|
|
1,300
|
|
|
221,998
|
|
||||
Interest expense, net
|
69,637
|
|
|
12,156
|
|
|
9,335
|
|
|
91,128
|
|
||||
Income (loss) before income taxes
|
205,145
|
|
|
98,716
|
|
|
(27,281
|
)
|
|
276,580
|
|
||||
Income taxes (benefit)
|
83,199
|
|
|
31,719
|
|
|
(5,525
|
)
|
|
109,393
|
|
||||
Net income (loss)
|
121,946
|
|
|
66,997
|
|
|
(21,756
|
)
|
|
167,187
|
|
||||
Preferred stock dividends of subsidiaries
|
1,995
|
|
|
—
|
|
|
(105
|
)
|
|
1,890
|
|
||||
Net income (loss) for common stock
|
119,951
|
|
|
66,997
|
|
|
(21,651
|
)
|
|
165,297
|
|
||||
Capital expenditures
|
441,598
|
|
|
53,272
|
|
|
317
|
|
|
495,187
|
|
||||
Assets (at December 31, 2017)
|
6,196,281
|
|
|
6,798,659
|
|
|
104,888
|
|
|
13,099,828
|
|
||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues from external customers
|
$
|
2,094,224
|
|
|
$
|
285,924
|
|
|
$
|
506
|
|
|
$
|
2,380,654
|
|
Intersegment revenues (eliminations)
|
144
|
|
|
—
|
|
|
(144
|
)
|
|
—
|
|
||||
Revenues
|
2,094,368
|
|
|
285,924
|
|
|
362
|
|
|
2,380,654
|
|
||||
Depreciation and amortization
|
193,996
|
|
|
9,813
|
|
|
937
|
|
|
204,746
|
|
||||
Interest expense, net
|
66,824
|
|
|
12,755
|
|
|
8,979
|
|
|
88,558
|
|
||||
Income before income taxes
|
229,113
|
|
|
87,352
|
|
|
57,376
|
|
|
373,841
|
|
||||
Income taxes
|
84,801
|
|
|
30,073
|
|
|
8,821
|
|
|
123,695
|
|
||||
Net income
|
144,312
|
|
|
57,279
|
|
|
48,555
|
|
|
250,146
|
|
||||
Preferred stock dividends of subsidiaries
|
1,995
|
|
|
—
|
|
|
(105
|
)
|
|
1,890
|
|
||||
Net income for common stock
|
142,317
|
|
|
57,279
|
|
|
48,660
|
|
|
248,256
|
|
||||
Capital expenditures
|
320,437
|
|
|
9,394
|
|
|
212
|
|
|
330,043
|
|
||||
Assets (at December 31, 2016)
|
5,975,428
|
|
|
6,421,357
|
|
|
28,721
|
|
|
12,425,506
|
|
||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues from external customers
|
$
|
2,335,135
|
|
|
$
|
267,733
|
|
|
$
|
114
|
|
|
$
|
2,602,982
|
|
Intersegment revenues (eliminations)
|
31
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
||||
Revenues
|
2,335,166
|
|
|
267,733
|
|
|
83
|
|
|
2,602,982
|
|
||||
Depreciation and amortization
|
186,319
|
|
|
7,928
|
|
|
1,338
|
|
|
195,585
|
|
||||
Interest expense, net
|
66,370
|
|
|
11,326
|
|
|
10,780
|
|
|
88,476
|
|
||||
Income (loss) before income taxes
|
217,131
|
|
|
83,812
|
|
|
(46,155
|
)
|
|
254,788
|
|
||||
Income taxes (benefit)
|
79,422
|
|
|
29,082
|
|
|
(15,483
|
)
|
|
93,021
|
|
||||
Net income (loss)
|
137,709
|
|
|
54,730
|
|
|
(30,672
|
)
|
|
161,767
|
|
||||
Preferred stock dividends of subsidiaries
|
1,995
|
|
|
—
|
|
|
(105
|
)
|
|
1,890
|
|
||||
Net income (loss) for common stock
|
135,714
|
|
|
54,730
|
|
|
(30,567
|
)
|
|
159,877
|
|
||||
Capital expenditures
|
350,161
|
|
|
13,470
|
|
|
173
|
|
|
363,804
|
|
||||
Assets (at December 31, 2015)
|
5,672,210
|
|
|
6,014,755
|
|
|
95,053
|
|
|
11,782,018
|
|
3
·
Electric utility segment
|
December 31
|
2017
|
|
|
2016
|
|
||
(in thousands)
|
|
|
|
|
|
||
Retirement benefit plans (balance primarily varies with plans’ funded statuses)
|
$
|
637,204
|
|
|
$
|
745,367
|
|
Income taxes (1 to 55 years)
|
118,201
|
|
|
90,100
|
|
||
Decoupling revenue balancing account and RAM regulatory asset (1 to 2 years)
|
64,087
|
|
|
73,485
|
|
||
Unamortized expense and premiums on retired debt and equity issuances (19 to 30 years; 6 to 18 years remaining)
|
11,993
|
|
|
12,299
|
|
||
Vacation earned, but not yet taken (1 year)
|
11,224
|
|
|
10,970
|
|
||
Other (1 to 50 years; 1 to 46 years remaining)
|
26,588
|
|
|
25,230
|
|
||
|
$
|
869,297
|
|
|
$
|
957,451
|
|
Included in:
|
|
|
|
|
|
||
Current assets
|
$
|
88,390
|
|
|
$
|
66,032
|
|
Long-term assets
|
780,907
|
|
|
891,419
|
|
||
|
$
|
869,297
|
|
|
$
|
957,451
|
|
December 31
|
2017
|
|
|
2016
|
|
||
(in thousands)
|
|
|
|
|
|
||
Cost of removal in excess of salvage value (1 to 60 years)
|
$
|
453,986
|
|
|
$
|
394,072
|
|
Income taxes (1 to 55 years)
|
406,324
|
|
|
—
|
|
||
Retirement benefit plans (5 years beginning with respective utility’s next rate case)
|
9,961
|
|
|
10,824
|
|
||
Other (5 years; 1 to 2 years remaining)
|
10,499
|
|
|
5,797
|
|
||
|
$
|
880,770
|
|
|
$
|
410,693
|
|
Included in:
|
|
|
|
||||
Current liabilities
|
$
|
3,401
|
|
|
$
|
3,762
|
|
Long-term liabilities
|
877,369
|
|
|
406,931
|
|
||
|
$
|
880,770
|
|
|
$
|
410,693
|
|
December 31, 2017
|
Voluntary
liquidation price
|
|
Redemption
price
|
||||
Series
|
|
|
|
|
|
||
C, D, E, H, J and K (Hawaiian Electric)
|
$
|
20
|
|
|
$
|
21
|
|
I (Hawaiian Electric)
|
20
|
|
|
20
|
|
||
G (Hawaii Electric Light)
|
100
|
|
|
100
|
|
||
H (Maui Electric)
|
100
|
|
|
100
|
|
Years ended December 31
|
|
2017
|
|
2016
|
|
2015
|
||||||
(in millions)
|
|
|
|
|
|
|
||||||
Kalaeloa
|
|
$
|
180
|
|
|
$
|
152
|
|
|
$
|
187
|
|
AES Hawaii
|
|
140
|
|
|
149
|
|
|
134
|
|
|||
HPOWER
|
|
67
|
|
|
71
|
|
|
66
|
|
|||
Puna Geothermal Venture
|
|
38
|
|
|
28
|
|
|
29
|
|
|||
Hamakua Energy
|
|
35
|
|
|
29
|
|
|
44
|
|
|||
Hawaiian Commercial & Sugar
|
|
—
|
|
|
1
|
|
|
8
|
|
|||
Other IPPs
|
|
127
|
|
|
133
|
|
|
126
|
|
|||
Total IPPs
|
|
$
|
587
|
|
|
$
|
563
|
|
|
$
|
594
|
|
(in thousands)
|
2017
|
|
2016
|
||||
Balance, January 1
|
$
|
25,589
|
|
|
$
|
26,848
|
|
Accretion expense
|
10
|
|
|
10
|
|
||
Liabilities incurred
|
5,370
|
|
|
—
|
|
||
Liabilities settled
|
(527
|
)
|
|
(1,269
|
)
|
||
Revisions in estimated cash flows
|
(24,407
|
)
|
|
—
|
|
||
Balance, December 31
|
$
|
6,035
|
|
|
$
|
25,589
|
|
•
|
Hawaiian Electric's RAM revenues were limited to the RAM Cap in 2015, 2016 and 2017.
|
•
|
Maui Electric's RAM revenues were limited to the RAM Cap in 2015 and 2016; however, the 2017 RAM revenues were below the RAM Cap.
|
•
|
Hawaii Electric Light’s RAM revenues were below the RAM Cap in 2015, 2016 and 2017.
|
•
|
Service Reliability Performance measured by System Average Interruption Duration and Frequency Indexes (penalties only). Target performance is based on each utility’s historical
10
-year average performance with a deadband of one standard deviation. The maximum penalty for each performance index is 20 basis points applied to the common equity share of each respective utility’s rate base (or approximately
$6 million
penalty for both in total for the three utilities).
|
•
|
Call Center Performance measured by the percentage of calls answered within 30 seconds. Target performance is based on the annual average performance for each utility for the most recent 8 quarters with a deadband of
3%
above and below the target. The maximum penalty or incentive is 8 basis points applied to the common equity share of each respective utility’s rate base (or approximately
$1.2 million
penalty or incentive in total for the three utilities).
|
($ in millions)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
||||||
2017 Annual incremental RAM adjusted revenues
|
|
$
|
12.7
|
|
|
$
|
3.2
|
|
|
$
|
1.6
|
|
Annual change in accrued RBA balance as of December 31, 2016 (and associated revenue taxes) (refunded)
|
|
$
|
(2.4
|
)
|
|
$
|
(2.5
|
)
|
|
$
|
(0.2
|
)
|
Net annual incremental amount to be collected under the tariffs
|
|
$
|
10.3
|
|
|
$
|
0.7
|
|
|
$
|
1.4
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Revenues
|
$
|
1,598,504
|
|
|
333,467
|
|
|
325,678
|
|
|
—
|
|
|
(83
|
)
|
[1]
|
|
$
|
2,257,566
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel oil
|
408,204
|
|
|
63,894
|
|
|
115,670
|
|
|
—
|
|
|
—
|
|
|
|
587,768
|
|
||
Purchased power
|
454,189
|
|
|
87,772
|
|
|
44,673
|
|
|
—
|
|
|
—
|
|
|
|
586,634
|
|
||
Other operation and maintenance
|
279,440
|
|
|
66,277
|
|
|
72,193
|
|
|
—
|
|
|
—
|
|
|
|
417,910
|
|
||
Depreciation
|
130,889
|
|
|
38,741
|
|
|
23,154
|
|
|
—
|
|
|
—
|
|
|
|
192,784
|
|
||
Taxes, other than income taxes
|
152,933
|
|
|
31,184
|
|
|
30,832
|
|
|
—
|
|
|
—
|
|
|
|
214,949
|
|
||
Total expenses
|
1,425,655
|
|
|
287,868
|
|
|
286,522
|
|
|
—
|
|
|
—
|
|
|
|
2,000,045
|
|
||
Operating income
|
172,849
|
|
|
45,599
|
|
|
39,156
|
|
|
—
|
|
|
(83
|
)
|
|
|
257,521
|
|
||
Allowance for equity funds used during construction
|
10,896
|
|
|
554
|
|
|
1,033
|
|
|
—
|
|
|
—
|
|
|
|
12,483
|
|
||
Equity in earnings of subsidiaries
|
38,057
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,057
|
)
|
[2]
|
|
—
|
|
||
Interest expense and other charges, net
|
(48,277
|
)
|
|
(11,799
|
)
|
|
(9,644
|
)
|
|
—
|
|
|
83
|
|
[1]
|
|
(69,637
|
)
|
||
Allowance for borrowed funds used during construction
|
4,089
|
|
|
238
|
|
|
451
|
|
|
—
|
|
|
—
|
|
|
|
4,778
|
|
||
Income before income taxes
|
177,614
|
|
|
34,592
|
|
|
30,996
|
|
|
—
|
|
|
(38,057
|
)
|
|
|
205,145
|
|
||
Income taxes
|
56,583
|
|
|
13,912
|
|
|
12,704
|
|
|
—
|
|
|
—
|
|
|
|
83,199
|
|
||
Net income
|
121,031
|
|
|
20,680
|
|
|
18,292
|
|
|
—
|
|
|
(38,057
|
)
|
|
|
121,946
|
|
||
Preferred stock dividends of subsidiaries
|
—
|
|
|
534
|
|
|
381
|
|
|
—
|
|
|
—
|
|
|
|
915
|
|
||
Net income attributable to Hawaiian Electric
|
121,031
|
|
|
20,146
|
|
|
17,911
|
|
|
—
|
|
|
(38,057
|
)
|
|
|
121,031
|
|
||
Preferred stock dividends of Hawaiian Electric
|
1,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,080
|
|
||
Net income for common stock
|
$
|
119,951
|
|
|
20,146
|
|
|
17,911
|
|
|
—
|
|
|
(38,057
|
)
|
|
|
$
|
119,951
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Net income for common stock
|
$
|
119,951
|
|
|
20,146
|
|
|
17,911
|
|
|
—
|
|
|
(38,057
|
)
|
|
|
$
|
119,951
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives qualified as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reclassification adjustment to net income, net of taxes
|
454
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
454
|
|
||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net gains arising during the period, net of taxes
|
63,105
|
|
|
3,093
|
|
|
7,329
|
|
|
—
|
|
|
(10,422
|
)
|
[1]
|
|
63,105
|
|
||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits
|
14,477
|
|
|
1,903
|
|
|
1,619
|
|
|
—
|
|
|
(3,522
|
)
|
[1]
|
|
14,477
|
|
||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes
|
(78,724
|
)
|
|
(4,994
|
)
|
|
(9,003
|
)
|
|
—
|
|
|
13,997
|
|
[1]
|
|
(78,724
|
)
|
||
Other comprehensive income (loss), net of taxes
|
(688
|
)
|
|
2
|
|
|
(55
|
)
|
|
—
|
|
|
53
|
|
|
|
(688
|
)
|
||
Comprehensive income attributable to common shareholder
|
$
|
119,263
|
|
|
20,148
|
|
|
17,856
|
|
|
—
|
|
|
(38,004
|
)
|
|
|
$
|
119,263
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Revenues
|
$
|
1,474,384
|
|
|
311,385
|
|
|
308,705
|
|
|
—
|
|
|
(106
|
)
|
[1]
|
|
$
|
2,094,368
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel oil
|
305,359
|
|
|
55,094
|
|
|
94,251
|
|
|
—
|
|
|
—
|
|
|
|
454,704
|
|
||
Purchased power
|
431,009
|
|
|
81,018
|
|
|
50,713
|
|
|
—
|
|
|
—
|
|
|
|
562,740
|
|
||
Other operation and maintenance
|
273,176
|
|
|
63,897
|
|
|
68,460
|
|
|
—
|
|
|
—
|
|
|
|
405,533
|
|
||
Depreciation
|
126,086
|
|
|
37,797
|
|
|
23,178
|
|
|
—
|
|
|
—
|
|
|
|
187,061
|
|
||
Taxes, other than income taxes
|
141,615
|
|
|
29,017
|
|
|
29,230
|
|
|
—
|
|
|
—
|
|
|
|
199,862
|
|
||
Total expenses
|
1,277,245
|
|
|
266,823
|
|
|
265,832
|
|
|
—
|
|
|
—
|
|
|
|
1,809,900
|
|
||
Operating income
|
197,139
|
|
|
44,562
|
|
|
42,873
|
|
|
—
|
|
|
(106
|
)
|
|
|
284,468
|
|
||
Allowance for equity funds used
during construction
|
6,659
|
|
|
765
|
|
|
901
|
|
|
—
|
|
|
—
|
|
|
|
8,325
|
|
||
Equity in earnings of subsidiaries
|
42,391
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,391
|
)
|
[2]
|
|
—
|
|
||
Interest expense and other charges, net
|
(45,839
|
)
|
|
(11,555
|
)
|
|
(9,536
|
)
|
|
|
|
106
|
|
[1]
|
|
(66,824
|
)
|
|||
Allowance for borrowed funds used during construction
|
2,484
|
|
|
294
|
|
|
366
|
|
|
—
|
|
|
—
|
|
|
|
3,144
|
|
||
Income before income taxes
|
202,834
|
|
|
34,066
|
|
|
34,604
|
|
|
—
|
|
|
(42,391
|
)
|
|
|
229,113
|
|
||
Income taxes
|
59,437
|
|
|
12,277
|
|
|
13,087
|
|
|
—
|
|
|
—
|
|
|
|
84,801
|
|
||
Net income
|
143,397
|
|
|
21,789
|
|
|
21,517
|
|
|
—
|
|
|
(42,391
|
)
|
|
|
144,312
|
|
||
Preferred stock dividends of subsidiaries
|
—
|
|
|
534
|
|
|
381
|
|
|
—
|
|
|
—
|
|
|
|
915
|
|
||
Net income attributable to Hawaiian Electric
|
143,397
|
|
|
21,255
|
|
|
21,136
|
|
|
—
|
|
|
(42,391
|
)
|
|
|
143,397
|
|
||
Preferred stock dividends of Hawaiian Electric
|
1,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,080
|
|
||
Net income for common stock
|
$
|
142,317
|
|
|
21,255
|
|
|
21,136
|
|
|
—
|
|
|
(42,391
|
)
|
|
|
$
|
142,317
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Net income for common stock
|
$
|
142,317
|
|
|
21,255
|
|
|
21,136
|
|
|
—
|
|
|
(42,391
|
)
|
|
|
$
|
142,317
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives qualified as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Effective portion of foreign currency hedge net unrealized losses arising during the period, net of tax benefits
|
(281
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(281
|
)
|
||
Reclassification adjustment to net income, net of taxes
|
(173
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(173
|
)
|
||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net losses arising during the period, net of tax benefits
|
(42,631
|
)
|
|
(5,141
|
)
|
|
(5,447
|
)
|
|
—
|
|
|
10,588
|
|
[1]
|
|
(42,631
|
)
|
||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits
|
13,254
|
|
|
1,718
|
|
|
1,549
|
|
|
—
|
|
|
(3,267
|
)
|
[1]
|
|
13,254
|
|
||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes
|
28,584
|
|
|
3,269
|
|
|
3,852
|
|
|
—
|
|
|
(7,121
|
)
|
[1]
|
|
28,584
|
|
||
Other comprehensive loss, net of tax benefits
|
(1,247
|
)
|
|
(154
|
)
|
|
(46
|
)
|
|
—
|
|
|
200
|
|
|
|
(1,247
|
)
|
||
Comprehensive income attributable to common shareholder
|
$
|
141,070
|
|
|
21,101
|
|
|
21,090
|
|
|
—
|
|
|
(42,191
|
)
|
|
|
$
|
141,070
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Revenues
|
$
|
1,644,181
|
|
|
345,549
|
|
|
345,517
|
|
|
—
|
|
|
(81
|
)
|
[1]
|
|
$
|
2,335,166
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel oil
|
458,069
|
|
|
71,851
|
|
|
124,680
|
|
|
—
|
|
|
—
|
|
|
|
654,600
|
|
||
Purchased power
|
440,983
|
|
|
97,503
|
|
|
55,610
|
|
|
—
|
|
|
—
|
|
|
|
594,096
|
|
||
Other operation and maintenance
|
284,583
|
|
|
63,098
|
|
|
65,408
|
|
|
—
|
|
|
—
|
|
|
|
413,089
|
|
||
Depreciation
|
117,682
|
|
|
37,250
|
|
|
22,448
|
|
|
—
|
|
|
—
|
|
|
|
177,380
|
|
||
Taxes, other than income taxes
|
156,871
|
|
|
32,312
|
|
|
32,702
|
|
|
—
|
|
|
—
|
|
|
|
221,885
|
|
||
Total expenses
|
1,458,188
|
|
|
302,014
|
|
|
300,848
|
|
|
—
|
|
|
—
|
|
|
|
2,061,050
|
|
||
Operating income
|
185,993
|
|
|
43,535
|
|
|
44,669
|
|
|
—
|
|
|
(81
|
)
|
|
|
274,116
|
|
||
Allowance for equity funds used
during construction
|
5,641
|
|
|
604
|
|
|
683
|
|
|
—
|
|
|
—
|
|
|
|
6,928
|
|
||
Equity in earnings of subsidiaries
|
42,920
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,920
|
)
|
[2]
|
|
—
|
|
||
Interest expense and other charges, net
|
(45,899
|
)
|
|
(10,773
|
)
|
|
(9,779
|
)
|
|
—
|
|
|
81
|
|
[1]
|
|
(66,370
|
)
|
||
Allowance for borrowed funds used during construction
|
1,967
|
|
|
215
|
|
|
275
|
|
|
—
|
|
|
—
|
|
|
|
2,457
|
|
||
Income before income taxes
|
190,622
|
|
|
33,581
|
|
|
35,848
|
|
|
—
|
|
|
(42,920
|
)
|
|
|
217,131
|
|
||
Income taxes
|
53,828
|
|
|
12,292
|
|
|
13,302
|
|
|
—
|
|
|
—
|
|
|
|
79,422
|
|
||
Net income
|
136,794
|
|
|
21,289
|
|
|
22,546
|
|
|
—
|
|
|
(42,920
|
)
|
|
|
137,709
|
|
||
Preferred stock dividends of subsidiaries
|
—
|
|
|
534
|
|
|
381
|
|
|
—
|
|
|
—
|
|
|
|
915
|
|
||
Net income attributable to Hawaiian Electric
|
136,794
|
|
|
20,755
|
|
|
22,165
|
|
|
—
|
|
|
(42,920
|
)
|
|
|
136,794
|
|
||
Preferred stock dividends of Hawaiian Electric
|
1,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,080
|
|
||
Net income for common stock
|
$
|
135,714
|
|
|
20,755
|
|
|
22,165
|
|
|
—
|
|
|
(42,920
|
)
|
|
|
$
|
135,714
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Net income for common stock
|
$
|
135,714
|
|
|
20,755
|
|
|
22,165
|
|
|
—
|
|
|
(42,920
|
)
|
|
|
$
|
135,714
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net gains (losses) arising during the period, net of taxes
|
5,638
|
|
|
(2,710
|
)
|
|
(1,352
|
)
|
|
—
|
|
|
4,062
|
|
[1]
|
|
5,638
|
|
||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits
|
20,381
|
|
|
2,728
|
|
|
2,503
|
|
|
—
|
|
|
(5,231
|
)
|
[1]
|
|
20,381
|
|
||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of tax benefits
|
(25,139
|
)
|
|
104
|
|
|
(1,107
|
)
|
|
—
|
|
|
1,003
|
|
[1]
|
|
(25,139
|
)
|
||
Other comprehensive income, net of taxes
|
880
|
|
|
122
|
|
|
44
|
|
|
—
|
|
|
(166
|
)
|
|
|
880
|
|
||
Comprehensive income attributable to common shareholder
|
$
|
136,594
|
|
|
20,877
|
|
|
22,209
|
|
|
—
|
|
|
(43,086
|
)
|
|
|
$
|
136,594
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Utility property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Land
|
$
|
43,972
|
|
|
6,189
|
|
|
3,016
|
|
|
—
|
|
|
—
|
|
|
|
$
|
53,177
|
|
Plant and equipment
|
4,492,568
|
|
|
1,299,920
|
|
|
1,154,075
|
|
|
—
|
|
|
—
|
|
|
|
6,946,563
|
|
||
Less accumulated depreciation
|
(1,451,612
|
)
|
|
(528,024
|
)
|
|
(496,716
|
)
|
|
—
|
|
|
—
|
|
|
|
(2,476,352
|
)
|
||
Construction in progress
|
245,995
|
|
|
11,922
|
|
|
25,322
|
|
|
—
|
|
|
—
|
|
|
|
283,239
|
|
||
Utility property, plant and equipment, net
|
3,330,923
|
|
|
790,007
|
|
|
685,697
|
|
|
—
|
|
|
—
|
|
|
|
4,806,627
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation
|
5,933
|
|
|
115
|
|
|
1,532
|
|
|
—
|
|
|
—
|
|
|
|
7,580
|
|
||
Total property, plant and equipment, net
|
3,336,856
|
|
|
790,122
|
|
|
687,229
|
|
|
—
|
|
|
—
|
|
|
|
4,814,207
|
|
||
Investment in wholly-owned subsidiaries, at equity
|
557,013
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(557,013
|
)
|
[2]
|
|
—
|
|
||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
2,059
|
|
|
4,025
|
|
|
6,332
|
|
|
101
|
|
|
—
|
|
|
|
12,517
|
|
||
Advances to affiliates
|
—
|
|
|
—
|
|
|
12,000
|
|
|
—
|
|
|
(12,000
|
)
|
[1]
|
|
—
|
|
||
Customer accounts receivable, net
|
86,987
|
|
|
22,510
|
|
|
18,392
|
|
|
—
|
|
|
—
|
|
|
|
127,889
|
|
||
Accrued unbilled revenues, net
|
77,176
|
|
|
15,940
|
|
|
13,938
|
|
|
—
|
|
|
—
|
|
|
|
107,054
|
|
||
Other accounts receivable, net
|
11,376
|
|
|
2,268
|
|
|
1,210
|
|
|
—
|
|
|
(7,691
|
)
|
[1]
|
|
7,163
|
|
||
Fuel oil stock, at average cost
|
64,972
|
|
|
8,698
|
|
|
13,203
|
|
|
—
|
|
|
—
|
|
|
|
86,873
|
|
||
Materials and supplies, at average cost
|
28,325
|
|
|
8,041
|
|
|
18,031
|
|
|
—
|
|
|
—
|
|
|
|
54,397
|
|
||
Prepayments and other
|
17,928
|
|
|
4,514
|
|
|
2,913
|
|
|
—
|
|
|
—
|
|
|
|
25,355
|
|
||
Regulatory assets
|
76,203
|
|
|
5,038
|
|
|
7,149
|
|
|
—
|
|
|
—
|
|
|
|
88,390
|
|
||
Total current assets
|
365,026
|
|
|
71,034
|
|
|
93,168
|
|
|
101
|
|
|
(19,691
|
)
|
|
|
509,638
|
|
||
Other long-term assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Regulatory assets
|
557,464
|
|
|
122,783
|
|
|
100,660
|
|
|
—
|
|
|
—
|
|
|
|
780,907
|
|
||
Unamortized debt expense
|
436
|
|
|
77
|
|
|
98
|
|
|
—
|
|
|
—
|
|
|
|
611
|
|
||
Other
|
59,721
|
|
|
16,234
|
|
|
14,963
|
|
|
—
|
|
|
—
|
|
|
|
90,918
|
|
||
Total other long-term assets
|
617,621
|
|
|
139,094
|
|
|
115,721
|
|
|
—
|
|
|
—
|
|
|
|
872,436
|
|
||
Total assets
|
$
|
4,876,516
|
|
|
1,000,250
|
|
|
896,118
|
|
|
101
|
|
|
(576,704
|
)
|
|
|
$
|
6,196,281
|
|
Capitalization and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capitalization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock equity
|
$
|
1,845,283
|
|
|
286,647
|
|
|
270,265
|
|
|
101
|
|
|
(557,013
|
)
|
[2]
|
|
$
|
1,845,283
|
|
Cumulative preferred stock–not subject to mandatory redemption
|
22,293
|
|
|
7,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
|
34,293
|
|
||
Long-term debt, net
|
924,979
|
|
|
202,701
|
|
|
190,836
|
|
|
—
|
|
|
—
|
|
|
|
1,318,516
|
|
||
Total capitalization
|
2,792,555
|
|
|
496,348
|
|
|
466,101
|
|
|
101
|
|
|
(557,013
|
)
|
|
|
3,198,092
|
|
||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Current portion of long-term debt
|
29,978
|
|
|
10,992
|
|
|
8,993
|
|
|
—
|
|
|
—
|
|
|
|
49,963
|
|
||
Short-term borrowings-non-affiliate
|
4,999
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
4,999
|
|
||
Short-term borrowings-affiliate
|
12,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,000
|
)
|
[1]
|
|
—
|
|
||
Accounts payable
|
121,328
|
|
|
17,855
|
|
|
20,427
|
|
|
—
|
|
|
—
|
|
|
|
159,610
|
|
||
Interest and preferred dividends payable
|
15,677
|
|
|
4,174
|
|
|
2,735
|
|
|
—
|
|
|
(11
|
)
|
[1]
|
|
22,575
|
|
||
Taxes accrued
|
133,839
|
|
|
34,950
|
|
|
30,312
|
|
|
—
|
|
|
—
|
|
|
|
199,101
|
|
||
Regulatory liabilities
|
607
|
|
|
1,245
|
|
|
1,549
|
|
|
—
|
|
|
—
|
|
|
|
3,401
|
|
||
Other
|
43,121
|
|
|
9,818
|
|
|
14,197
|
|
|
—
|
|
|
(7,680
|
)
|
[1]
|
|
59,456
|
|
||
Total current liabilities
|
361,549
|
|
|
79,034
|
|
|
78,213
|
|
|
—
|
|
|
(19,691
|
)
|
|
|
499,105
|
|
||
Deferred credits and other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Deferred income taxes
|
281,223
|
|
|
56,955
|
|
|
55,863
|
|
|
—
|
|
|
—
|
|
|
|
394,041
|
|
||
Regulatory liabilities
|
613,329
|
|
|
169,139
|
|
|
94,901
|
|
|
—
|
|
|
—
|
|
|
|
877,369
|
|
||
Unamortized tax credits
|
59,039
|
|
|
16,167
|
|
|
15,163
|
|
|
—
|
|
|
—
|
|
|
|
90,369
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
340,983
|
|
|
66,447
|
|
|
65,518
|
|
|
—
|
|
|
—
|
|
|
|
472,948
|
|
||
Other
|
61,738
|
|
|
19,276
|
|
|
17,675
|
|
|
—
|
|
|
—
|
|
|
|
98,689
|
|
||
Total deferred credits and other liabilities
|
1,356,312
|
|
|
327,984
|
|
|
249,120
|
|
|
—
|
|
|
—
|
|
|
|
1,933,416
|
|
||
Contributions in aid of construction
|
366,100
|
|
|
96,884
|
|
|
102,684
|
|
|
—
|
|
|
—
|
|
|
|
565,668
|
|
||
Total capitalization and liabilities
|
$
|
4,876,516
|
|
|
1,000,250
|
|
|
896,118
|
|
|
101
|
|
|
(576,704
|
)
|
|
|
$
|
6,196,281
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Utility property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Land
|
$
|
43,956
|
|
|
6,181
|
|
|
3,016
|
|
|
—
|
|
|
—
|
|
|
|
$
|
53,153
|
|
Plant and equipment
|
4,241,060
|
|
|
1,255,185
|
|
|
1,109,487
|
|
|
—
|
|
|
—
|
|
|
|
6,605,732
|
|
||
Less accumulated depreciation
|
(1,382,972
|
)
|
|
(507,666
|
)
|
|
(478,644
|
)
|
|
—
|
|
|
—
|
|
|
|
(2,369,282
|
)
|
||
Construction in progress
|
180,194
|
|
|
12,510
|
|
|
19,038
|
|
|
—
|
|
|
—
|
|
|
|
211,742
|
|
||
Utility property, plant and equipment, net
|
3,082,238
|
|
|
766,210
|
|
|
652,897
|
|
|
—
|
|
|
—
|
|
|
|
4,501,345
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation
|
5,760
|
|
|
115
|
|
|
1,532
|
|
|
—
|
|
|
—
|
|
|
|
7,407
|
|
||
Total property, plant and equipment, net
|
3,087,998
|
|
|
766,325
|
|
|
654,429
|
|
|
—
|
|
|
—
|
|
|
|
4,508,752
|
|
||
Investment in wholly-owned subsidiaries, at equity
|
550,946
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(550,946
|
)
|
[2]
|
|
—
|
|
||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
61,388
|
|
|
10,749
|
|
|
2,048
|
|
|
101
|
|
|
—
|
|
|
|
74,286
|
|
||
Advances to affiliates
|
—
|
|
|
3,500
|
|
|
10,000
|
|
|
—
|
|
|
(13,500
|
)
|
[1]
|
|
—
|
|
||
Customer accounts receivable, net
|
86,373
|
|
|
20,055
|
|
|
17,260
|
|
|
—
|
|
|
—
|
|
|
|
123,688
|
|
||
Accrued unbilled revenues, net
|
65,821
|
|
|
13,564
|
|
|
12,308
|
|
|
—
|
|
|
—
|
|
|
|
91,693
|
|
||
Other accounts receivable, net
|
7,652
|
|
|
2,445
|
|
|
1,416
|
|
|
—
|
|
|
(6,280
|
)
|
[1]
|
|
5,233
|
|
||
Fuel oil stock, at average cost
|
47,239
|
|
|
8,229
|
|
|
10,962
|
|
|
—
|
|
|
—
|
|
|
|
66,430
|
|
||
Materials and supplies, at average cost
|
29,928
|
|
|
7,380
|
|
|
16,371
|
|
|
—
|
|
|
—
|
|
|
|
53,679
|
|
||
Prepayments and other
|
16,502
|
|
|
5,352
|
|
|
2,179
|
|
|
—
|
|
|
(933
|
)
|
[3]
|
|
23,100
|
|
||
Regulatory assets
|
60,185
|
|
|
3,483
|
|
|
2,364
|
|
|
—
|
|
|
—
|
|
|
|
66,032
|
|
||
Total current assets
|
375,088
|
|
|
74,757
|
|
|
74,908
|
|
|
101
|
|
|
(20,713
|
)
|
|
|
504,141
|
|
||
Other long-term assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Regulatory assets
|
662,232
|
|
|
120,863
|
|
|
108,324
|
|
|
—
|
|
|
—
|
|
|
|
891,419
|
|
||
Unamortized debt expense
|
151
|
|
|
23
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
|
208
|
|
||
Other
|
43,743
|
|
|
13,573
|
|
|
13,592
|
|
|
—
|
|
|
—
|
|
|
|
70,908
|
|
||
Total other long-term assets
|
706,126
|
|
|
134,459
|
|
|
121,950
|
|
|
—
|
|
|
—
|
|
|
|
962,535
|
|
||
Total assets
|
$
|
4,720,158
|
|
|
975,541
|
|
|
851,287
|
|
|
101
|
|
|
(571,659
|
)
|
|
|
$
|
5,975,428
|
|
Capitalization and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capitalization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock equity
|
$
|
1,799,787
|
|
|
291,291
|
|
|
259,554
|
|
|
101
|
|
|
(550,946
|
)
|
[2]
|
|
$
|
1,799,787
|
|
Cumulative preferred stock–not subject to mandatory redemption
|
22,293
|
|
|
7,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
|
34,293
|
|
||
Long-term debt, net
|
915,437
|
|
|
213,703
|
|
|
190,120
|
|
|
—
|
|
|
—
|
|
|
|
1,319,260
|
|
||
Total capitalization
|
2,737,517
|
|
|
511,994
|
|
|
454,674
|
|
|
101
|
|
|
(550,946
|
)
|
|
|
3,153,340
|
|
||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Short-term borrowings-affiliate
|
13,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,500
|
)
|
[1]
|
|
—
|
|
||
Accounts payable
|
86,369
|
|
|
18,126
|
|
|
13,319
|
|
|
—
|
|
|
—
|
|
|
|
117,814
|
|
||
Interest and preferred dividends payable
|
15,761
|
|
|
4,206
|
|
|
2,882
|
|
|
—
|
|
|
(11
|
)
|
[1]
|
|
22,838
|
|
||
Taxes accrued
|
120,176
|
|
|
28,100
|
|
|
25,387
|
|
|
—
|
|
|
(933
|
)
|
[3]
|
|
172,730
|
|
||
Regulatory liabilities
|
—
|
|
|
2,219
|
|
|
1,543
|
|
|
—
|
|
|
—
|
|
|
|
3,762
|
|
||
Other
|
41,352
|
|
|
7,637
|
|
|
12,501
|
|
|
—
|
|
|
(6,269
|
)
|
[1]
|
|
55,221
|
|
||
Total current liabilities
|
277,158
|
|
|
60,288
|
|
|
55,632
|
|
|
—
|
|
|
(20,713
|
)
|
|
|
372,365
|
|
||
Deferred credits and other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Deferred income taxes
|
524,433
|
|
|
108,052
|
|
|
100,911
|
|
|
—
|
|
|
263
|
|
[1]
|
|
733,659
|
|
||
Regulatory liabilities
|
281,112
|
|
|
93,974
|
|
|
31,845
|
|
|
—
|
|
|
—
|
|
|
|
406,931
|
|
||
Unamortized tax credits
|
57,844
|
|
|
15,994
|
|
|
15,123
|
|
|
—
|
|
|
—
|
|
|
|
88,961
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
444,458
|
|
|
75,005
|
|
|
80,263
|
|
|
—
|
|
|
—
|
|
|
|
599,726
|
|
||
Other
|
49,191
|
|
|
13,024
|
|
|
14,969
|
|
|
—
|
|
|
(263
|
)
|
[1]
|
|
76,921
|
|
||
Total deferred credits and other liabilities
|
1,357,038
|
|
|
306,049
|
|
|
243,111
|
|
|
—
|
|
|
—
|
|
|
|
1,906,198
|
|
||
Contributions in aid of construction
|
348,445
|
|
|
97,210
|
|
|
97,870
|
|
|
—
|
|
|
—
|
|
|
|
543,525
|
|
||
Total capitalization and liabilities
|
$
|
4,720,158
|
|
|
975,541
|
|
|
851,287
|
|
|
101
|
|
|
(571,659
|
)
|
|
|
$
|
5,975,428
|
|
(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
|
135,714
|
|
|
20,755
|
|
|
22,165
|
|
|
—
|
|
|
(42,920
|
)
|
|
135,714
|
|
||
Other comprehensive income, net of taxes
|
880
|
|
|
122
|
|
|
44
|
|
|
—
|
|
|
(166
|
)
|
|
880
|
|
||
Issuance of common stock, net of expenses
|
(8
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
(8
|
)
|
||
Common stock dividends
|
(90,405
|
)
|
|
(10,021
|
)
|
|
(15,175
|
)
|
|
—
|
|
|
25,196
|
|
|
(90,405
|
)
|
||
Balance, December 31, 2015
|
$
|
1,728,325
|
|
|
292,702
|
|
|
263,725
|
|
|
101
|
|
|
(556,528
|
)
|
|
$
|
1,728,325
|
|
Net income for common stock
|
142,317
|
|
|
21,255
|
|
|
21,136
|
|
|
—
|
|
|
(42,391
|
)
|
|
142,317
|
|
||
Other comprehensive loss, net of tax benefits
|
(1,247
|
)
|
|
(154
|
)
|
|
(46
|
)
|
|
—
|
|
|
200
|
|
|
(1,247
|
)
|
||
Issuance of common stock, net of expenses
|
23,991
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
5
|
|
|
23,991
|
|
||
Common stock dividends
|
(93,599
|
)
|
|
(22,507
|
)
|
|
(25,261
|
)
|
|
—
|
|
|
47,768
|
|
|
(93,599
|
)
|
||
Balance, December 31, 2016
|
$
|
1,799,787
|
|
|
291,291
|
|
|
259,554
|
|
|
101
|
|
|
(550,946
|
)
|
|
$
|
1,799,787
|
|
Net income for common stock
|
119,951
|
|
|
20,146
|
|
|
17,911
|
|
|
—
|
|
|
(38,057
|
)
|
|
119,951
|
|
||
Other comprehensive income (loss), net of taxes
|
(688
|
)
|
|
2
|
|
|
(55
|
)
|
|
—
|
|
|
53
|
|
|
(688
|
)
|
||
Issuance of common stock, net of expenses
|
14,000
|
|
|
4
|
|
|
4,801
|
|
|
—
|
|
|
(4,805
|
)
|
|
14,000
|
|
||
Common stock dividends
|
(87,767
|
)
|
|
(24,796
|
)
|
|
(11,946
|
)
|
|
—
|
|
|
36,742
|
|
|
(87,767
|
)
|
||
Balance, December 31, 2017
|
$
|
1,845,283
|
|
|
286,647
|
|
|
270,265
|
|
|
101
|
|
|
(557,013
|
)
|
|
$
|
1,845,283
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net income
|
$
|
121,031
|
|
|
20,680
|
|
|
18,292
|
|
|
—
|
|
|
(38,057
|
)
|
[2]
|
|
$
|
121,946
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Equity in earnings of subsidiaries
|
(38,157
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,057
|
|
[2]
|
|
(100
|
)
|
||
Common stock dividends received from subsidiaries
|
36,867
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,742
|
)
|
[2]
|
|
125
|
|
||
Depreciation of property, plant and equipment
|
130,889
|
|
|
38,741
|
|
|
23,154
|
|
|
—
|
|
|
—
|
|
|
|
192,784
|
|
||
Other amortization
|
2,398
|
|
|
3,225
|
|
|
2,875
|
|
|
—
|
|
|
—
|
|
|
|
8,498
|
|
||
Deferred income taxes
|
26,342
|
|
|
3,954
|
|
|
8,004
|
|
|
—
|
|
|
(263
|
)
|
[1]
|
|
38,037
|
|
||
Allowance for equity funds used during construction
|
(10,896
|
)
|
|
(554
|
)
|
|
(1,033
|
)
|
|
—
|
|
|
—
|
|
|
|
(12,483
|
)
|
||
Other
|
(1,154
|
)
|
|
430
|
|
|
(342
|
)
|
|
—
|
|
|
—
|
|
|
|
(1,066
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Decrease (increase) in accounts receivable
|
1,817
|
|
|
(359
|
)
|
|
45
|
|
|
—
|
|
|
1,411
|
|
[1]
|
|
2,914
|
|
||
Increase in accrued unbilled revenues
|
(11,355
|
)
|
|
(2,376
|
)
|
|
(1,630
|
)
|
|
—
|
|
|
—
|
|
|
|
(15,361
|
)
|
||
Increase in fuel oil stock
|
(17,733
|
)
|
|
(469
|
)
|
|
(2,241
|
)
|
|
—
|
|
|
—
|
|
|
|
(20,443
|
)
|
||
Decrease (increase) in materials and supplies
|
1,603
|
|
|
(661
|
)
|
|
(1,660
|
)
|
|
—
|
|
|
—
|
|
|
|
(718
|
)
|
||
Increase in regulatory assets
|
(8,395
|
)
|
|
(4,007
|
)
|
|
(4,854
|
)
|
|
—
|
|
|
—
|
|
|
|
(17,256
|
)
|
||
Increase (decrease) in accounts payable
|
23,519
|
|
|
(3,547
|
)
|
|
5,762
|
|
|
—
|
|
|
—
|
|
|
|
25,734
|
|
||
Change in prepaid and accrued income taxes, tax credits and revenue taxes
|
16,716
|
|
|
7,961
|
|
|
5,362
|
|
|
—
|
|
|
(177
|
)
|
[1]
|
|
29,862
|
|
||
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability
|
709
|
|
|
52
|
|
|
(157
|
)
|
|
—
|
|
|
—
|
|
|
|
604
|
|
||
Change in other assets and liabilities
|
(16,213
|
)
|
|
(433
|
)
|
|
166
|
|
|
—
|
|
|
(1,411
|
)
|
[1]
|
|
(17,891
|
)
|
||
Net cash provided by operating activities
|
257,988
|
|
|
62,637
|
|
|
51,743
|
|
|
—
|
|
|
(37,182
|
)
|
|
|
335,186
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capital expenditures
|
(339,279
|
)
|
|
(52,077
|
)
|
|
(50,242
|
)
|
|
—
|
|
|
—
|
|
|
|
(441,598
|
)
|
||
Contributions in aid of construction
|
57,527
|
|
|
4,293
|
|
|
2,913
|
|
|
—
|
|
|
—
|
|
|
|
64,733
|
|
||
Advances from (to) affiliates
|
—
|
|
|
3,500
|
|
|
(2,000
|
)
|
|
—
|
|
|
(1,500
|
)
|
[1]
|
|
—
|
|
||
Other
|
(1,711
|
)
|
|
649
|
|
|
400
|
|
|
—
|
|
|
5,240
|
|
[1], [2]
|
|
4,578
|
|
||
Net cash used in investing activities
|
(283,463
|
)
|
|
(43,635
|
)
|
|
(48,929
|
)
|
|
—
|
|
|
3,740
|
|
|
|
(372,287
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock dividends
|
(87,767
|
)
|
|
(24,796
|
)
|
|
(11,946
|
)
|
|
—
|
|
|
36,742
|
|
[2]
|
|
(87,767
|
)
|
||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
(1,080
|
)
|
|
(534
|
)
|
|
(381
|
)
|
|
—
|
|
|
—
|
|
|
|
(1,995
|
)
|
||
Proceeds from issuance of common stock
|
14,000
|
|
|
—
|
|
|
4,800
|
|
|
—
|
|
|
(4,800
|
)
|
[2]
|
|
14,000
|
|
||
Proceeds from issuance of long-term debt
|
202,000
|
|
|
28,000
|
|
|
85,000
|
|
|
—
|
|
|
—
|
|
|
|
315,000
|
|
||
Funds transferred for redemption of special purpose revenue bonds
|
(162,000
|
)
|
|
(28,000
|
)
|
|
(75,000
|
)
|
|
—
|
|
|
—
|
|
|
|
(265,000
|
)
|
||
Net increase in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
3,499
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,500
|
|
[1]
|
|
4,999
|
|
||
Other
|
(2,506
|
)
|
|
(396
|
)
|
|
(1,003
|
)
|
|
—
|
|
|
—
|
|
|
|
(3,905
|
)
|
||
Net cash used in financing activities
|
(33,854
|
)
|
|
(25,726
|
)
|
|
1,470
|
|
|
—
|
|
|
33,442
|
|
|
|
(24,668
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
(59,329
|
)
|
|
(6,724
|
)
|
|
4,284
|
|
|
—
|
|
|
—
|
|
|
|
(61,769
|
)
|
||
Cash and cash equivalents, January 1
|
61,388
|
|
|
10,749
|
|
|
2,048
|
|
|
101
|
|
|
—
|
|
|
|
74,286
|
|
||
Cash and cash equivalents, December 31
|
$
|
2,059
|
|
|
4,025
|
|
|
6,332
|
|
|
101
|
|
|
—
|
|
|
|
$
|
12,517
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net income
|
$
|
143,397
|
|
|
21,789
|
|
|
21,517
|
|
|
—
|
|
|
(42,391
|
)
|
[2]
|
|
$
|
144,312
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Equity in earnings of subsidiaries
|
(42,491
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,391
|
|
[2]
|
|
(100
|
)
|
||
Common stock dividends received from subsidiaries
|
47,843
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47,768
|
)
|
[2]
|
|
75
|
|
||
Depreciation of property, plant and equipment
|
126,086
|
|
|
37,797
|
|
|
23,178
|
|
|
—
|
|
|
—
|
|
|
|
187,061
|
|
||
Other amortization
|
2,979
|
|
|
1,817
|
|
|
2,139
|
|
|
—
|
|
|
—
|
|
|
|
6,935
|
|
||
Deferred income taxes
|
54,721
|
|
|
7,027
|
|
|
12,661
|
|
|
—
|
|
|
(23
|
)
|
[1]
|
|
74,386
|
|
||
Allowance for equity funds used during construction
|
(6,659
|
)
|
|
(765
|
)
|
|
(901
|
)
|
|
—
|
|
|
—
|
|
|
|
(8,325
|
)
|
||
Other
|
(2,517
|
)
|
|
(750
|
)
|
|
(433
|
)
|
|
—
|
|
|
—
|
|
|
|
(3,700
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Decrease (increase) in accounts receivable
|
10,175
|
|
|
(718
|
)
|
|
1,776
|
|
|
—
|
|
|
(2,682
|
)
|
[1]
|
|
8,551
|
|
||
Increase in accrued unbilled revenues
|
(5,741
|
)
|
|
(1,033
|
)
|
|
(410
|
)
|
|
—
|
|
|
—
|
|
|
|
(7,184
|
)
|
||
Decrease in fuel oil stock
|
2,216
|
|
|
81
|
|
|
2,489
|
|
|
—
|
|
|
—
|
|
|
|
4,786
|
|
||
Decrease (increase) in materials and supplies
|
993
|
|
|
(515
|
)
|
|
272
|
|
|
—
|
|
|
—
|
|
|
|
750
|
|
||
Increase in regulatory assets
|
(16,161
|
)
|
|
(1,243
|
)
|
|
(869
|
)
|
|
—
|
|
|
—
|
|
|
|
(18,273
|
)
|
||
Increase (decrease) in accounts payable
|
(10,247
|
)
|
|
768
|
|
|
(1,135
|
)
|
|
—
|
|
|
—
|
|
|
|
(10,614
|
)
|
||
Change in prepaid and accrued income taxes, tax credits and revenue taxes
|
2,933
|
|
|
2,645
|
|
|
(3,478
|
)
|
|
—
|
|
|
23
|
|
[1]
|
|
2,123
|
|
||
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability
|
599
|
|
|
53
|
|
|
(168
|
)
|
|
—
|
|
|
—
|
|
|
|
484
|
|
||
Change in other assets and liabilities
|
(11,682
|
)
|
|
(78
|
)
|
|
(2,272
|
)
|
|
—
|
|
|
2,682
|
|
[1]
|
|
(11,350
|
)
|
||
Net cash provided by operating activities
|
296,444
|
|
|
66,875
|
|
|
54,366
|
|
|
—
|
|
|
(47,768
|
)
|
|
|
369,917
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capital expenditures
|
(236,425
|
)
|
|
(51,344
|
)
|
|
(32,668
|
)
|
|
—
|
|
|
—
|
|
|
|
(320,437
|
)
|
||
Contributions in aid of construction
|
23,611
|
|
|
3,412
|
|
|
3,077
|
|
|
—
|
|
|
—
|
|
|
|
30,100
|
|
||
Advances from (to) affiliates
|
—
|
|
|
12,000
|
|
|
(2,500
|
)
|
|
—
|
|
|
(9,500
|
)
|
[1]
|
|
—
|
|
||
Other
|
1,932
|
|
|
175
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
|
2,138
|
|
||
Net cash used in investing activities
|
(210,882
|
)
|
|
(35,757
|
)
|
|
(32,060
|
)
|
|
—
|
|
|
(9,500
|
)
|
|
|
(288,199
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock dividends
|
(93,599
|
)
|
|
(22,507
|
)
|
|
(25,261
|
)
|
|
—
|
|
|
47,768
|
|
[2]
|
|
(93,599
|
)
|
||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
(1,080
|
)
|
|
(534
|
)
|
|
(381
|
)
|
|
—
|
|
|
—
|
|
|
|
(1,995
|
)
|
||
Proceeds from the issuance of common stock
|
24,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
24,000
|
|
||
Proceeds from the issuance of long-term debt
|
40,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
40,000
|
|
||
Net decrease in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
(9,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,500
|
|
[1]
|
|
—
|
|
||
Other
|
(276
|
)
|
|
(10
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
|
(287
|
)
|
||
Net cash used in financing activities
|
(40,455
|
)
|
|
(23,051
|
)
|
|
(25,643
|
)
|
|
—
|
|
|
57,268
|
|
|
|
(31,881
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
45,107
|
|
|
8,067
|
|
|
(3,337
|
)
|
|
—
|
|
|
—
|
|
|
|
49,837
|
|
||
Cash and cash equivalents, January 1
|
16,281
|
|
|
2,682
|
|
|
5,385
|
|
|
101
|
|
|
—
|
|
|
|
24,449
|
|
||
Cash and cash equivalents, December 31
|
$
|
61,388
|
|
|
10,749
|
|
|
2,048
|
|
|
101
|
|
|
—
|
|
|
|
$
|
74,286
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments |
|
|
Hawaiian Electric
Consolidated |
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net income
|
$
|
136,794
|
|
|
21,289
|
|
|
22,546
|
|
|
—
|
|
|
(42,920
|
)
|
[2]
|
|
$
|
137,709
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Equity in earnings of subsidiaries
|
(43,020
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,920
|
|
[2]
|
|
(100
|
)
|
||
Common stock dividends received from subsidiaries
|
25,296
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,196
|
)
|
[2]
|
|
100
|
|
||
Depreciation of property, plant and equipment
|
117,682
|
|
|
37,250
|
|
|
22,448
|
|
|
—
|
|
|
—
|
|
|
|
177,380
|
|
||
Other amortization
|
4,678
|
|
|
2,124
|
|
|
2,137
|
|
|
—
|
|
|
—
|
|
|
|
8,939
|
|
||
Impairment of assets
|
4,573
|
|
|
724
|
|
|
724
|
|
|
—
|
|
|
—
|
|
|
|
6,021
|
|
||
Deferred income taxes
|
53,338
|
|
|
8,295
|
|
|
13,707
|
|
|
—
|
|
|
286
|
|
[1]
|
|
75,626
|
|
||
Allowance for equity funds used during construction
|
(5,641
|
)
|
|
(604
|
)
|
|
(683
|
)
|
|
—
|
|
|
—
|
|
|
|
(6,928
|
)
|
||
Other
|
8,687
|
|
|
(1,949
|
)
|
|
(222
|
)
|
|
—
|
|
|
—
|
|
|
|
6,516
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Decrease in accounts receivable
|
15,652
|
|
|
3,420
|
|
|
4,617
|
|
|
—
|
|
|
38
|
|
[1]
|
|
23,727
|
|
||
Decrease in accrued unbilled revenues
|
29,733
|
|
|
4,593
|
|
|
5,767
|
|
|
—
|
|
|
—
|
|
|
|
40,093
|
|
||
Decrease in fuel oil stock
|
25,060
|
|
|
5,490
|
|
|
4,280
|
|
|
—
|
|
|
—
|
|
|
|
34,830
|
|
||
Decrease (increase) in materials and supplies
|
2,233
|
|
|
(201
|
)
|
|
789
|
|
|
—
|
|
|
—
|
|
|
|
2,821
|
|
||
Decrease (increase) in regulatory assets
|
(20,356
|
)
|
|
(3,930
|
)
|
|
104
|
|
|
—
|
|
|
—
|
|
|
|
(24,182
|
)
|
||
Decrease in accounts payable
|
(42,751
|
)
|
|
(6,425
|
)
|
|
(5,379
|
)
|
|
—
|
|
|
—
|
|
|
|
(54,555
|
)
|
||
Change in prepaid and accrued income taxes, tax credits and revenue taxes
|
(50,382
|
)
|
|
(6,166
|
)
|
|
(6,548
|
)
|
|
—
|
|
|
—
|
|
|
|
(63,096
|
)
|
||
Decrease in defined benefit pension and other postretirement benefit plans liability
|
870
|
|
|
(161
|
)
|
|
416
|
|
|
—
|
|
|
—
|
|
|
|
1,125
|
|
||
Change in other assets and liabilities
|
(24,197
|
)
|
|
(3,545
|
)
|
|
(4,554
|
)
|
|
—
|
|
|
(324
|
)
|
[1]
|
|
(32,620
|
)
|
||
Net cash provided by operating activities
|
238,249
|
|
|
60,204
|
|
|
60,149
|
|
|
—
|
|
|
(25,196
|
)
|
|
|
333,406
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capital expenditures
|
(267,621
|
)
|
|
(48,645
|
)
|
|
(33,895
|
)
|
|
—
|
|
|
—
|
|
|
|
(350,161
|
)
|
||
Contributions in aid of construction
|
35,955
|
|
|
2,160
|
|
|
2,124
|
|
|
—
|
|
|
—
|
|
|
|
40,239
|
|
||
Advances from (to) affiliates
|
16,100
|
|
|
(15,500
|
)
|
|
(7,500
|
)
|
|
—
|
|
|
6,900
|
|
[1]
|
|
—
|
|
||
Other
|
924
|
|
|
132
|
|
|
84
|
|
|
—
|
|
|
—
|
|
|
|
1,140
|
|
||
Net cash used in investing activities
|
(214,642
|
)
|
|
(61,853
|
)
|
|
(39,187
|
)
|
|
—
|
|
|
6,900
|
|
|
|
(308,782
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock dividends
|
(90,405
|
)
|
|
(10,021
|
)
|
|
(15,175
|
)
|
|
—
|
|
|
25,196
|
|
[2]
|
|
(90,405
|
)
|
||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
(1,080
|
)
|
|
(534
|
)
|
|
(381
|
)
|
|
—
|
|
|
—
|
|
|
|
(1,995
|
)
|
||
Proceeds from the issuance of long-term debt
|
50,000
|
|
|
25,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
|
80,000
|
|
||
Net increase (decrease) in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
23,000
|
|
|
(10,500
|
)
|
|
(5,600
|
)
|
|
—
|
|
|
(6,900
|
)
|
[1]
|
|
—
|
|
||
Other
|
(1,257
|
)
|
|
(226
|
)
|
|
(54
|
)
|
|
—
|
|
|
—
|
|
|
|
(1,537
|
)
|
||
Net cash used in financing activities
|
(19,742
|
)
|
|
3,719
|
|
|
(16,210
|
)
|
|
—
|
|
|
18,296
|
|
|
|
(13,937
|
)
|
||
Net increase in cash and cash equivalents
|
3,865
|
|
|
2,070
|
|
|
4,752
|
|
|
—
|
|
|
—
|
|
|
|
10,687
|
|
||
Cash and cash equivalents, January 1
|
12,416
|
|
|
612
|
|
|
633
|
|
|
101
|
|
|
—
|
|
|
|
13,762
|
|
||
Cash and cash equivalents, December 31
|
$
|
16,281
|
|
|
2,682
|
|
|
5,385
|
|
|
101
|
|
|
—
|
|
|
|
$
|
24,449
|
|
[1]
|
Eliminations of intercompany receivables and payables and other intercompany transactions.
|
[2]
|
Elimination of investment in subsidiaries, carried at equity.
|
[3]
|
Reclassification of accrued income taxes for financial statement presentation.
|
4
·
Bank segment (HEI only)
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Interest and dividend income
|
|
|
|
|
|
|
|
|
|||
Interest and fees on loans
|
$
|
207,255
|
|
|
$
|
199,774
|
|
|
$
|
184,782
|
|
Interest and dividends on investment securities
|
28,823
|
|
|
19,184
|
|
|
15,120
|
|
|||
Total interest and dividend income
|
236,078
|
|
|
218,958
|
|
|
199,902
|
|
|||
Interest expense
|
|
|
|
|
|
|
|
|
|||
Interest on deposit liabilities
|
9,660
|
|
|
7,167
|
|
|
5,348
|
|
|||
Interest on other borrowings
|
2,496
|
|
|
5,588
|
|
|
5,978
|
|
|||
Total interest expense
|
12,156
|
|
|
12,755
|
|
|
11,326
|
|
|||
Net interest income
|
223,922
|
|
|
206,203
|
|
|
188,576
|
|
|||
Provision for loan losses
|
10,901
|
|
|
16,763
|
|
|
6,275
|
|
|||
Net interest income after provision for loan losses
|
213,021
|
|
|
189,440
|
|
|
182,301
|
|
|||
Noninterest income
|
|
|
|
|
|
|
|
|
|||
Fees from other financial services
|
22,796
|
|
|
22,384
|
|
|
22,211
|
|
|||
Fee income on deposit liabilities
|
22,204
|
|
|
21,759
|
|
|
22,368
|
|
|||
Fee income on other financial products
|
7,205
|
|
|
8,707
|
|
|
8,094
|
|
|||
Bank-owned life insurance
|
5,539
|
|
|
4,637
|
|
|
4,078
|
|
|||
Mortgage banking income
|
2,201
|
|
|
6,625
|
|
|
6,330
|
|
|||
Gains on sale of investment securities, net
|
—
|
|
|
598
|
|
|
—
|
|
|||
Other income, net
|
1,617
|
|
|
2,256
|
|
|
4,750
|
|
|||
Total noninterest income
|
61,562
|
|
|
66,966
|
|
|
67,831
|
|
|||
Noninterest expense
|
|
|
|
|
|
|
|
|
|||
Compensation and employee benefits
|
95,751
|
|
|
90,117
|
|
|
90,518
|
|
|||
Occupancy
|
16,699
|
|
|
16,321
|
|
|
16,365
|
|
|||
Data processing
|
13,280
|
|
|
13,030
|
|
|
12,103
|
|
|||
Services
|
10,994
|
|
|
11,054
|
|
|
10,204
|
|
|||
Equipment
|
7,232
|
|
|
6,938
|
|
|
6,577
|
|
|||
Office supplies, printing and postage
|
6,182
|
|
|
6,075
|
|
|
5,749
|
|
|||
Marketing
|
3,501
|
|
|
3,489
|
|
|
3,463
|
|
|||
FDIC insurance
|
2,904
|
|
|
3,543
|
|
|
3,274
|
|
|||
Other expense
|
19,324
|
|
|
18,487
|
|
|
18,067
|
|
|||
Total noninterest expense
|
175,867
|
|
|
169,054
|
|
|
166,320
|
|
|||
Income before income taxes
|
98,716
|
|
|
87,352
|
|
|
83,812
|
|
|||
Income taxes
|
31,719
|
|
|
30,073
|
|
|
29,082
|
|
|||
Net income
|
$
|
66,997
|
|
|
$
|
57,279
|
|
|
$
|
54,730
|
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Interest and dividend income
|
$
|
236,078
|
|
|
$
|
218,958
|
|
|
$
|
199,902
|
|
Noninterest income
|
61,562
|
|
|
66,966
|
|
|
67,831
|
|
|||
*Revenues-Bank
|
297,640
|
|
|
285,924
|
|
|
267,733
|
|
|||
Total interest expense
|
12,156
|
|
|
12,755
|
|
|
11,326
|
|
|||
Provision for loan losses
|
10,901
|
|
|
16,763
|
|
|
6,275
|
|
|||
Total noninterest expense
|
175,867
|
|
|
169,054
|
|
|
166,320
|
|
|||
*Expenses-Bank
|
198,924
|
|
|
198,572
|
|
|
183,921
|
|
|||
Income before income taxes/*Operating income-Bank
|
$
|
98,716
|
|
|
$
|
87,352
|
|
|
$
|
83,812
|
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
66,997
|
|
|
$
|
57,279
|
|
|
$
|
54,730
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|||
Net unrealized losses on available-for sale investment securities:
|
|
|
|
|
|
|
|
|
|||
Net unrealized losses on available-for sale investment securities arising during the period, net of tax benefits of $2,886, $3,763 and $1,541 for 2017, 2016 and 2015, respectively
|
(4,370
|
)
|
|
(5,699
|
)
|
|
(2,334
|
)
|
|||
Reclassification adjustment for net realized gains included in net income, net of taxes of nil, $238 and nil for 2017, 2016 and 2015, respectively
|
—
|
|
|
(360
|
)
|
|
—
|
|
|||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|||
Net gains arising during the period, net of taxes of nil, nil and $59 for 2017, 2016 and 2015, respectively
|
—
|
|
|
—
|
|
|
90
|
|
|||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $812, $566 and $1,011 for 2017, 2016 and 2015, respectively
|
1,231
|
|
|
857
|
|
|
1,531
|
|
|||
Other comprehensive loss, net of tax benefits
|
(3,139
|
)
|
|
(5,202
|
)
|
|
(713
|
)
|
|||
Comprehensive income
|
$
|
63,858
|
|
|
$
|
52,077
|
|
|
$
|
54,017
|
|
December 31
|
|
2017
|
|
|
2016
|
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Cash and due from banks
|
|
$
|
140,934
|
|
|
$
|
137,083
|
|
||||
Interest-bearing deposits
|
|
93,165
|
|
|
52,128
|
|
||||||
Restricted cash
|
|
—
|
|
|
1,764
|
|
||||||
Investment securities
|
|
|
|
|
||||||||
Available-for-sale, at fair value
|
|
1,401,198
|
|
|
1,105,182
|
|
||||||
Held-to-maturity, at amortized cost (fair value of $44,412 and nil, respectively)
|
|
44,515
|
|
|
—
|
|
||||||
Stock in Federal Home Loan Bank, at cost
|
|
9,706
|
|
|
11,218
|
|
||||||
Loans receivable held for investment
|
|
4,670,768
|
|
|
4,738,693
|
|
||||||
Allowance for loan losses
|
|
(53,637
|
)
|
|
(55,533
|
)
|
||||||
Net loans
|
|
4,617,131
|
|
|
4,683,160
|
|
||||||
Loans held for sale, at lower of cost or fair value
|
|
11,250
|
|
|
18,817
|
|
||||||
Other
|
|
398,570
|
|
|
329,815
|
|
||||||
Goodwill
|
|
82,190
|
|
|
82,190
|
|
||||||
Total assets
|
|
$
|
6,798,659
|
|
|
$
|
6,421,357
|
|
||||
Liabilities and shareholder’s equity
|
|
|
|
|
|
|
||||||
Deposit liabilities–noninterest-bearing
|
|
$
|
1,760,233
|
|
|
$
|
1,639,051
|
|
||||
Deposit liabilities–interest-bearing
|
|
4,130,364
|
|
|
3,909,878
|
|
||||||
Other borrowings
|
|
190,859
|
|
|
192,618
|
|
||||||
Other
|
|
110,356
|
|
|
101,635
|
|
||||||
Total liabilities
|
|
6,191,812
|
|
|
5,843,182
|
|
||||||
Commitments and contingencies
|
|
|
|
|
|
|
||||||
Common stock
|
|
1
|
|
|
1
|
|
||||||
Additional paid in capital
|
|
345,018
|
|
|
342,704
|
|
||||||
Retained earnings
|
|
292,957
|
|
|
257,943
|
|
||||||
Accumulated other comprehensive loss, net of tax benefits
|
|
|
|
|
||||||||
Net unrealized losses on securities
|
$
|
(14,951
|
)
|
|
$
|
(7,931
|
)
|
|
||||
Retirement benefit plans
|
(16,178
|
)
|
(31,129
|
)
|
(14,542
|
)
|
(22,473
|
)
|
||||
Total shareholder’s equity
|
|
606,847
|
|
|
578,175
|
|
||||||
Total liabilities and shareholder’s equity
|
|
$
|
6,798,659
|
|
|
$
|
6,421,357
|
|
December 31
|
|
2017
|
|
|
2016
|
|
||
(in thousands)
|
|
|
|
|
|
|
||
Other assets
|
|
|
|
|
|
|
||
Bank-owned life insurance
|
|
$
|
148,775
|
|
|
$
|
143,197
|
|
Premises and equipment, net
|
|
136,270
|
|
|
90,570
|
|
||
Prepaid expenses
|
|
3,961
|
|
|
3,348
|
|
||
Accrued interest receivable
|
|
18,724
|
|
|
16,824
|
|
||
Mortgage-servicing rights
|
|
8,639
|
|
|
9,373
|
|
||
Low-income housing investments
|
|
59,016
|
|
|
47,081
|
|
||
Real estate acquired in settlement of loans, net
|
|
133
|
|
|
1,189
|
|
||
Other
|
|
23,052
|
|
|
18,233
|
|
||
|
|
$
|
398,570
|
|
|
$
|
329,815
|
|
Other liabilities
|
|
|
|
|
|
|
||
Accrued expenses
|
|
$
|
39,312
|
|
|
$
|
36,754
|
|
Federal and state income taxes payable
|
|
3,736
|
|
|
4,728
|
|
||
Cashier’s checks
|
|
27,000
|
|
|
24,156
|
|
||
Advance payments by borrowers
|
|
10,245
|
|
|
10,335
|
|
||
Other
|
|
30,063
|
|
|
25,662
|
|
||
|
|
$
|
110,356
|
|
|
$
|
101,635
|
|
|
|
|
|
|
|
|
|
|
Gross unrealized losses
|
||||||||||||||||||||||||||
|
|
|
Gross
|
|
Gross
|
|
Estimated
|
|
Less than 12 months
|
|
12 months or longer
|
||||||||||||||||||||||||
(dollars in thousands)
|
Amortized
cost
|
|
unrealized
gains
|
|
unrealized
losses
|
|
fair
value
|
|
Number of issues
|
|
Fair value
|
|
Amount
|
|
Number of issues
|
|
Fair value
|
|
Amount
|
||||||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and federal agency obligations
|
$
|
185,891
|
|
|
$
|
438
|
|
|
$
|
(2,031
|
)
|
|
$
|
184,298
|
|
|
15
|
|
$
|
83,137
|
|
|
$
|
(825
|
)
|
|
8
|
|
$
|
62,296
|
|
|
$
|
(1,206
|
)
|
Mortgage-related securities- FNMA, FHLMC and GNMA
|
1,220,304
|
|
|
793
|
|
|
(19,624
|
)
|
|
1,201,473
|
|
|
67
|
|
653,635
|
|
|
(6,839
|
)
|
|
77
|
|
459,912
|
|
|
(12,785
|
)
|
||||||||
Mortgage revenue bond
|
15,427
|
|
|
—
|
|
|
—
|
|
|
15,427
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
||||||||
|
$
|
1,421,622
|
|
|
$
|
1,231
|
|
|
$
|
(21,655
|
)
|
|
$
|
1,401,198
|
|
|
82
|
|
$
|
736,772
|
|
|
$
|
(7,664
|
)
|
|
85
|
|
$
|
522,208
|
|
|
$
|
(13,991
|
)
|
Held-to-maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage-related securities- FNMA, FHLMC and GNMA
|
$
|
44,515
|
|
|
$
|
1
|
|
|
$
|
(104
|
)
|
|
$
|
44,412
|
|
|
2
|
|
$
|
35,744
|
|
|
$
|
(104
|
)
|
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44,515
|
|
|
$
|
1
|
|
|
$
|
(104
|
)
|
|
$
|
44,412
|
|
|
2
|
|
$
|
35,744
|
|
|
$
|
(104
|
)
|
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and federal agency obligations
|
$
|
193,515
|
|
|
$
|
920
|
|
|
$
|
(2,154
|
)
|
|
$
|
192,281
|
|
|
18
|
|
$
|
123,475
|
|
|
$
|
(2,010
|
)
|
|
1
|
|
$
|
3,485
|
|
|
$
|
(144
|
)
|
Mortgage-related securities- FNMA, FHLMC and GNMA
|
909,408
|
|
|
1,742
|
|
|
(13,676
|
)
|
|
897,474
|
|
|
88
|
|
709,655
|
|
|
(12,143
|
)
|
|
13
|
|
47,485
|
|
|
(1,533
|
)
|
||||||||
Mortgage revenue bond
|
15,427
|
|
|
—
|
|
|
—
|
|
|
15,427
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
||||||||
|
$
|
1,118,350
|
|
|
$
|
2,662
|
|
|
$
|
(15,830
|
)
|
|
$
|
1,105,182
|
|
|
106
|
|
$
|
833,130
|
|
|
$
|
(14,153
|
)
|
|
14
|
|
$
|
50,970
|
|
|
$
|
(1,677
|
)
|
|
Amortized
|
|
Fair
|
||||
December 31, 2017
|
Cost
|
|
value
|
||||
(in thousands)
|
|
|
|
||||
Available-for-sale
|
|
|
|
||||
Due in one year or less
|
$
|
5,000
|
|
|
$
|
4,992
|
|
Due after one year through five years
|
87,404
|
|
|
87,020
|
|
||
Due after five years through ten years
|
80,161
|
|
|
79,358
|
|
||
Due after ten years
|
28,753
|
|
|
28,355
|
|
||
|
201,318
|
|
|
199,725
|
|
||
Mortgage-related securities-FNMA, FHLMC and GNMA
|
1,220,304
|
|
|
1,201,473
|
|
||
|
$
|
1,421,622
|
|
|
$
|
1,401,198
|
|
Held-to-maturity
|
|
|
|
||||
Mortgage-related securities-FNMA, FHLMC and GNMA
|
$
|
44,515
|
|
|
$
|
44,412
|
|
|
$
|
44,515
|
|
|
$
|
44,412
|
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
(in millions)
|
|
|
|
|
|
||||||
Proceeds
|
$
|
—
|
|
|
$
|
16.4
|
|
|
$
|
—
|
|
Gross gains
|
—
|
|
|
0.6
|
|
|
—
|
|
|||
Gross losses
|
—
|
|
|
—
|
|
|
—
|
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
(in thousands)
|
|
|
|
|
|
||||||
Taxable
|
$
|
28,398
|
|
|
$
|
19,166
|
|
|
$
|
15,120
|
|
Non-taxable
|
425
|
|
|
18
|
|
|
—
|
|
|||
|
$
|
28,823
|
|
|
$
|
19,184
|
|
|
$
|
15,120
|
|
December 31
|
2017
|
|
|
2016
|
|
||
(in thousands)
|
|
|
|
|
|
||
Real estate:
|
|
|
|
|
|
||
Residential 1-4 family
|
$
|
2,118,047
|
|
|
$
|
2,048,051
|
|
Commercial real estate
|
733,106
|
|
|
800,395
|
|
||
Home equity line of credit
|
913,052
|
|
|
863,163
|
|
||
Residential land
|
15,797
|
|
|
18,889
|
|
||
Commercial construction
|
108,273
|
|
|
126,768
|
|
||
Residential construction
|
14,910
|
|
|
16,080
|
|
||
Total real estate
|
3,903,185
|
|
|
3,873,346
|
|
||
Commercial
|
544,828
|
|
|
692,051
|
|
||
Consumer
|
223,564
|
|
|
178,222
|
|
||
Total loans
|
4,671,577
|
|
|
4,743,619
|
|
||
Less: Deferred fees and discounts
|
(809
|
)
|
|
(4,926
|
)
|
||
Allowance for loan losses
|
(53,637
|
)
|
|
(55,533
|
)
|
||
Total loans, net
|
$
|
4,617,131
|
|
|
$
|
4,683,160
|
|
(in thousands)
|
Residential 1-4 family
|
|
Commercial
real estate |
|
Home equity
line of credit |
|
Residential land
|
|
Commercial construction
|
|
Residential construction
|
|
Commercial
|
|
Consumer
|
|
Unallo- cated
|
|
Total
|
||||||||||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning balance
|
$
|
2,873
|
|
|
$
|
16,004
|
|
|
$
|
5,039
|
|
|
$
|
1,738
|
|
|
$
|
6,449
|
|
|
$
|
12
|
|
|
$
|
16,618
|
|
|
$
|
6,800
|
|
|
$
|
—
|
|
|
$
|
55,533
|
|
Charge-offs
|
(826
|
)
|
|
—
|
|
|
(14
|
)
|
|
(210
|
)
|
|
—
|
|
|
—
|
|
|
(4,006
|
)
|
|
(11,757
|
)
|
|
—
|
|
|
(16,813
|
)
|
||||||||||
Recoveries
|
157
|
|
|
—
|
|
|
308
|
|
|
482
|
|
|
—
|
|
|
—
|
|
|
1,852
|
|
|
1,217
|
|
|
—
|
|
|
4,016
|
|
||||||||||
Provision
|
698
|
|
|
(208
|
)
|
|
2,189
|
|
|
(1,114
|
)
|
|
(1,778
|
)
|
|
—
|
|
|
(3,613
|
)
|
|
14,727
|
|
|
—
|
|
|
10,901
|
|
||||||||||
Ending balance
|
$
|
2,902
|
|
|
$
|
15,796
|
|
|
$
|
7,522
|
|
|
$
|
896
|
|
|
$
|
4,671
|
|
|
$
|
12
|
|
|
$
|
10,851
|
|
|
$
|
10,987
|
|
|
$
|
—
|
|
|
$
|
53,637
|
|
Ending balance: individually evaluated for impairment
|
$
|
1,248
|
|
|
$
|
65
|
|
|
$
|
647
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
694
|
|
|
$
|
29
|
|
|
|
|
|
$
|
2,730
|
|
|
Ending balance: collectively evaluated for impairment
|
$
|
1,654
|
|
|
$
|
15,731
|
|
|
$
|
6,875
|
|
|
$
|
849
|
|
|
$
|
4,671
|
|
|
$
|
12
|
|
|
$
|
10,157
|
|
|
$
|
10,958
|
|
|
$
|
—
|
|
|
$
|
50,907
|
|
Financing Receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ending balance
|
$
|
2,118,047
|
|
|
$
|
733,106
|
|
|
$
|
913,052
|
|
|
$
|
15,797
|
|
|
$
|
108,273
|
|
|
$
|
14,910
|
|
|
$
|
544,828
|
|
|
$
|
223,564
|
|
|
|
|
|
$
|
4,671,577
|
|
|
Ending balance: individually evaluated for impairment
|
$
|
18,284
|
|
|
$
|
1,016
|
|
|
$
|
8,188
|
|
|
$
|
1,265
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,574
|
|
|
$
|
66
|
|
|
|
|
|
$
|
33,393
|
|
|
Ending balance: collectively evaluated for impairment
|
$
|
2,099,763
|
|
|
$
|
732,090
|
|
|
$
|
904,864
|
|
|
$
|
14,532
|
|
|
$
|
108,273
|
|
|
$
|
14,910
|
|
|
$
|
540,254
|
|
|
$
|
223,498
|
|
|
|
|
|
$
|
4,638,184
|
|
|
December 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
|
(639
|
)
|
|
—
|
|
|
(112
|
)
|
|
(138
|
)
|
|
—
|
|
|
—
|
|
|
(5,943
|
)
|
|
(7,413
|
)
|
|
—
|
|
|
(14,245
|
)
|
||||||||||
Recoveries
|
421
|
|
|
—
|
|
|
59
|
|
|
461
|
|
|
—
|
|
|
—
|
|
|
1,093
|
|
|
943
|
|
|
—
|
|
|
2,977
|
|
||||||||||
Provision
|
(1,095
|
)
|
|
4,662
|
|
|
(2,168
|
)
|
|
(256
|
)
|
|
1,988
|
|
|
(1
|
)
|
|
4,260
|
|
|
9,373
|
|
|
—
|
|
|
16,763
|
|
||||||||||
Ending balance
|
$
|
2,873
|
|
|
$
|
16,004
|
|
|
$
|
5,039
|
|
|
$
|
1,738
|
|
|
$
|
6,449
|
|
|
$
|
12
|
|
|
$
|
16,618
|
|
|
$
|
6,800
|
|
|
$
|
—
|
|
|
$
|
55,533
|
|
Ending balance: individually evaluated for impairment
|
$
|
1,352
|
|
|
$
|
80
|
|
|
$
|
215
|
|
|
$
|
789
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,641
|
|
|
$
|
6
|
|
|
|
|
|
$
|
4,083
|
|
|
Ending balance: collectively evaluated for impairment
|
$
|
1,521
|
|
|
$
|
15,924
|
|
|
$
|
4,824
|
|
|
$
|
949
|
|
|
$
|
6,449
|
|
|
$
|
12
|
|
|
$
|
14,977
|
|
|
$
|
6,794
|
|
|
$
|
—
|
|
|
$
|
51,450
|
|
Financing Receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ending balance
|
$
|
2,048,051
|
|
|
$
|
800,395
|
|
|
$
|
863,163
|
|
|
$
|
18,889
|
|
|
$
|
126,768
|
|
|
$
|
16,080
|
|
|
$
|
692,051
|
|
|
$
|
178,222
|
|
|
|
|
|
$
|
4,743,619
|
|
|
Ending balance: individually evaluated for impairment
|
$
|
19,854
|
|
|
$
|
1,569
|
|
|
$
|
6,158
|
|
|
$
|
3,629
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,539
|
|
|
$
|
10
|
|
|
|
|
|
$
|
51,759
|
|
|
Ending balance: collectively evaluated for impairment
|
$
|
2,028,197
|
|
|
$
|
798,826
|
|
|
$
|
857,005
|
|
|
$
|
15,260
|
|
|
$
|
126,768
|
|
|
$
|
16,080
|
|
|
$
|
671,512
|
|
|
$
|
178,212
|
|
|
|
|
|
$
|
4,691,860
|
|
|
December 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
|
(356
|
)
|
|
—
|
|
|
(205
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,074
|
)
|
|
(4,791
|
)
|
|
—
|
|
|
(6,426
|
)
|
||||||||||
Recoveries
|
226
|
|
|
—
|
|
|
80
|
|
|
507
|
|
|
—
|
|
|
—
|
|
|
2,773
|
|
|
985
|
|
|
—
|
|
|
4,571
|
|
||||||||||
Provision
|
(346
|
)
|
|
2,388
|
|
|
403
|
|
|
(711
|
)
|
|
(1,010
|
)
|
|
(15
|
)
|
|
1,492
|
|
|
4,074
|
|
|
—
|
|
|
6,275
|
|
||||||||||
Ending balance
|
$
|
4,186
|
|
|
$
|
11,342
|
|
|
$
|
7,260
|
|
|
$
|
1,671
|
|
|
$
|
4,461
|
|
|
$
|
13
|
|
|
$
|
17,208
|
|
|
$
|
3,897
|
|
|
$
|
—
|
|
|
$
|
50,038
|
|
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
|
|
December 31
|
2017
|
|
2016
|
||||||||||||||||||||||||||||
(in thousands)
|
Commercial
real estate
|
|
Commercial
construction
|
|
Commercial
|
|
Total
|
|
Commercial
real estate
|
|
Commercial
construction
|
|
Commercial
|
|
Total
|
||||||||||||||||
Grade:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pass
|
$
|
630,877
|
|
|
$
|
83,757
|
|
|
$
|
492,942
|
|
|
$
|
1,207,576
|
|
|
$
|
701,657
|
|
|
$
|
102,955
|
|
|
$
|
614,139
|
|
|
$
|
1,418,751
|
|
Special mention
|
49,347
|
|
|
22,500
|
|
|
27,997
|
|
|
99,844
|
|
|
65,541
|
|
|
—
|
|
|
25,229
|
|
|
90,770
|
|
||||||||
Substandard
|
52,882
|
|
|
2,016
|
|
|
23,421
|
|
|
78,319
|
|
|
33,197
|
|
|
23,813
|
|
|
52,683
|
|
|
109,693
|
|
||||||||
Doubtful
|
—
|
|
|
—
|
|
|
468
|
|
|
468
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
$
|
733,106
|
|
|
$
|
108,273
|
|
|
$
|
544,828
|
|
|
$
|
1,386,207
|
|
|
$
|
800,395
|
|
|
$
|
126,768
|
|
|
$
|
692,051
|
|
|
$
|
1,619,214
|
|
(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
|
||||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
$
|
1,532
|
|
|
$
|
1,715
|
|
|
$
|
5,071
|
|
|
$
|
8,318
|
|
|
$
|
2,109,729
|
|
|
$
|
2,118,047
|
|
|
$
|
—
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
733,106
|
|
|
733,106
|
|
|
—
|
|
|||||||
Home equity line of credit
|
425
|
|
|
114
|
|
|
2,051
|
|
|
2,590
|
|
|
910,462
|
|
|
913,052
|
|
|
—
|
|
|||||||
Residential land
|
23
|
|
|
—
|
|
|
625
|
|
|
648
|
|
|
15,149
|
|
|
15,797
|
|
|
—
|
|
|||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
108,273
|
|
|
108,273
|
|
|
—
|
|
|||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,910
|
|
|
14,910
|
|
|
—
|
|
|||||||
Commercial
|
1,825
|
|
|
2,025
|
|
|
730
|
|
|
4,580
|
|
|
540,248
|
|
|
544,828
|
|
|
—
|
|
|||||||
Consumer
|
3,432
|
|
|
2,159
|
|
|
1,876
|
|
|
7,467
|
|
|
216,097
|
|
|
223,564
|
|
|
—
|
|
|||||||
Total loans
|
$
|
7,237
|
|
|
$
|
6,013
|
|
|
$
|
10,353
|
|
|
$
|
23,603
|
|
|
$
|
4,647,974
|
|
|
$
|
4,671,577
|
|
|
$
|
—
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
$
|
5,467
|
|
|
$
|
2,338
|
|
|
$
|
3,505
|
|
|
$
|
11,310
|
|
|
$
|
2,036,741
|
|
|
$
|
2,048,051
|
|
|
$
|
—
|
|
Commercial real estate
|
2,416
|
|
|
—
|
|
|
—
|
|
|
2,416
|
|
|
797,979
|
|
|
800,395
|
|
|
—
|
|
|||||||
Home equity line of credit
|
1,263
|
|
|
381
|
|
|
1,342
|
|
|
2,986
|
|
|
860,177
|
|
|
863,163
|
|
|
—
|
|
|||||||
Residential land
|
—
|
|
|
—
|
|
|
255
|
|
|
255
|
|
|
18,634
|
|
|
18,889
|
|
|
—
|
|
|||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126,768
|
|
|
126,768
|
|
|
—
|
|
|||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,080
|
|
|
16,080
|
|
|
—
|
|
|||||||
Commercial
|
413
|
|
|
510
|
|
|
1,303
|
|
|
2,226
|
|
|
689,825
|
|
|
692,051
|
|
|
—
|
|
|||||||
Consumer
|
1,945
|
|
|
1,001
|
|
|
963
|
|
|
3,909
|
|
|
174,313
|
|
|
178,222
|
|
|
—
|
|
|||||||
Total loans
|
$
|
11,504
|
|
|
$
|
4,230
|
|
|
$
|
7,368
|
|
|
$
|
23,102
|
|
|
$
|
4,720,517
|
|
|
$
|
4,743,619
|
|
|
$
|
—
|
|
December 31
|
2017
|
|
2016
|
||||
(in thousands)
|
|
|
|
||||
Real estate:
|
|
|
|
|
|
||
Residential 1-4 family
|
$
|
12,598
|
|
|
$
|
11,154
|
|
Commercial real estate
|
—
|
|
|
223
|
|
||
Home equity line of credit
|
4,466
|
|
|
3,080
|
|
||
Residential land
|
841
|
|
|
878
|
|
||
Commercial construction
|
—
|
|
|
—
|
|
||
Residential construction
|
—
|
|
|
—
|
|
||
Commercial
|
3,069
|
|
|
6,708
|
|
||
Consumer
|
2,617
|
|
|
1,282
|
|
||
Total nonaccrual loans
|
$
|
23,591
|
|
|
$
|
23,325
|
|
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
|
$
|
10,982
|
|
|
$
|
14,450
|
|
Commercial real estate
|
1,016
|
|
|
1,346
|
|
||
Home equity line of credit
|
6,584
|
|
|
4,934
|
|
||
Residential land
|
425
|
|
|
2,751
|
|
||
Commercial construction
|
—
|
|
|
—
|
|
||
Residential construction
|
—
|
|
|
—
|
|
||
Commercial
|
1,741
|
|
|
14,146
|
|
||
Consumer
|
66
|
|
|
10
|
|
||
Total troubled debt restructured loans not included above
|
$
|
20,814
|
|
|
$
|
37,637
|
|
December 31
|
2017
|
|
2016
|
||||||||||||||||||||
(in thousands)
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Related
allowance
|
|
Recorded
investment
|
|
Unpaid
principal
balance
|
|
Related
allowance
|
||||||||||||
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential 1-4 family
|
$
|
9,097
|
|
|
$
|
9,644
|
|
|
$
|
—
|
|
|
$
|
9,571
|
|
|
$
|
10,400
|
|
|
$
|
—
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
223
|
|
|
228
|
|
|
—
|
|
||||||
Home equity line of credit
|
1,496
|
|
|
1,789
|
|
|
—
|
|
|
1,500
|
|
|
1,900
|
|
|
—
|
|
||||||
Residential land
|
1,143
|
|
|
1,434
|
|
|
—
|
|
|
1,218
|
|
|
1,803
|
|
|
—
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
2,328
|
|
|
3,166
|
|
|
—
|
|
|
6,299
|
|
|
8,869
|
|
|
—
|
|
||||||
Consumer
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
14,072
|
|
|
16,041
|
|
|
—
|
|
|
18,811
|
|
|
23,200
|
|
|
—
|
|
||||||
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential 1-4 family
|
9,187
|
|
|
9,390
|
|
|
1,248
|
|
|
10,283
|
|
|
10,486
|
|
|
1,352
|
|
||||||
Commercial real estate
|
1,016
|
|
|
1,016
|
|
|
65
|
|
|
1,346
|
|
|
1,346
|
|
|
80
|
|
||||||
Home equity line of credit
|
6,692
|
|
|
6,736
|
|
|
647
|
|
|
4,658
|
|
|
4,712
|
|
|
215
|
|
||||||
Residential land
|
122
|
|
|
122
|
|
|
47
|
|
|
2,411
|
|
|
2,411
|
|
|
789
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
2,246
|
|
|
2,252
|
|
|
694
|
|
|
14,240
|
|
|
14,240
|
|
|
1,641
|
|
||||||
Consumer
|
58
|
|
|
58
|
|
|
29
|
|
|
10
|
|
|
10
|
|
|
6
|
|
||||||
|
19,321
|
|
|
19,574
|
|
|
2,730
|
|
|
32,948
|
|
|
33,205
|
|
|
4,083
|
|
||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential 1-4 family
|
18,284
|
|
|
19,034
|
|
|
1,248
|
|
|
19,854
|
|
|
20,886
|
|
|
1,352
|
|
||||||
Commercial real estate
|
1,016
|
|
|
1,016
|
|
|
65
|
|
|
1,569
|
|
|
1,574
|
|
|
80
|
|
||||||
Home equity line of credit
|
8,188
|
|
|
8,525
|
|
|
647
|
|
|
6,158
|
|
|
6,612
|
|
|
215
|
|
||||||
Residential land
|
1,265
|
|
|
1,556
|
|
|
47
|
|
|
3,629
|
|
|
4,214
|
|
|
789
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
4,574
|
|
|
5,418
|
|
|
694
|
|
|
20,539
|
|
|
23,109
|
|
|
1,641
|
|
||||||
Consumer
|
66
|
|
|
66
|
|
|
29
|
|
|
10
|
|
|
10
|
|
|
6
|
|
||||||
|
$
|
33,393
|
|
|
$
|
35,615
|
|
|
$
|
2,730
|
|
|
$
|
51,759
|
|
|
$
|
56,405
|
|
|
$
|
4,083
|
|
December 31
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
(in thousands)
|
Average
recorded investment |
|
Interest
income recognized* |
|
Average
recorded investment |
|
Interest
income recognized* |
|
Average
recorded investment |
|
Interest
income recognized* |
||||||||||||
With no related allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential 1-4 family
|
$
|
9,440
|
|
|
$
|
316
|
|
|
$
|
10,136
|
|
|
$
|
324
|
|
|
$
|
11,215
|
|
|
$
|
332
|
|
Commercial real estate
|
91
|
|
|
11
|
|
|
1,124
|
|
|
—
|
|
|
370
|
|
|
74
|
|
||||||
Home equity line of credit
|
1,976
|
|
|
101
|
|
|
1,105
|
|
|
23
|
|
|
484
|
|
|
4
|
|
||||||
Residential land
|
1,094
|
|
|
117
|
|
|
1,518
|
|
|
66
|
|
|
2,397
|
|
|
137
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
2,776
|
|
|
54
|
|
|
8,694
|
|
|
370
|
|
|
5,185
|
|
|
157
|
|
||||||
Consumer
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
15,378
|
|
|
599
|
|
|
22,579
|
|
|
783
|
|
|
19,651
|
|
|
704
|
|
||||||
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential 1-4 family
|
9,818
|
|
|
493
|
|
|
11,589
|
|
|
457
|
|
|
11,578
|
|
|
562
|
|
||||||
Commercial real estate
|
1,241
|
|
|
54
|
|
|
1,962
|
|
|
15
|
|
|
1,699
|
|
|
—
|
|
||||||
Home equity line of credit
|
5,045
|
|
|
251
|
|
|
3,765
|
|
|
137
|
|
|
1,597
|
|
|
49
|
|
||||||
Residential land
|
1,308
|
|
|
97
|
|
|
2,964
|
|
|
206
|
|
|
4,337
|
|
|
318
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
3,691
|
|
|
723
|
|
|
16,106
|
|
|
456
|
|
|
12,507
|
|
|
211
|
|
||||||
Consumer
|
57
|
|
|
3
|
|
|
12
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||||
|
21,160
|
|
|
1,621
|
|
|
36,398
|
|
|
1,271
|
|
|
31,732
|
|
|
1,140
|
|
||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential 1-4 family
|
19,258
|
|
|
809
|
|
|
21,725
|
|
|
781
|
|
|
22,793
|
|
|
894
|
|
||||||
Commercial real estate
|
1,332
|
|
|
65
|
|
|
3,086
|
|
|
15
|
|
|
2,069
|
|
|
74
|
|
||||||
Home equity line of credit
|
7,021
|
|
|
352
|
|
|
4,870
|
|
|
160
|
|
|
2,081
|
|
|
53
|
|
||||||
Residential land
|
2,402
|
|
|
214
|
|
|
4,482
|
|
|
272
|
|
|
6,734
|
|
|
455
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
6,467
|
|
|
777
|
|
|
24,800
|
|
|
826
|
|
|
17,692
|
|
|
368
|
|
||||||
Consumer
|
58
|
|
|
3
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||||
|
$
|
36,538
|
|
|
$
|
2,220
|
|
|
$
|
58,977
|
|
|
$
|
2,054
|
|
|
$
|
51,383
|
|
|
$
|
1,844
|
|
(dollars in thousands)
|
Number of contracts
|
|
Outstanding recorded investment
|
|
Net increase in ALLL
|
|||||||||
Years ended
|
|
Pre-modification
|
|
Post-modification
|
|
|||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
||||
Residential 1-4 family
|
7
|
|
|
$
|
742
|
|
|
$
|
750
|
|
|
$
|
45
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Home equity line of credit
|
46
|
|
|
3,016
|
|
|
3,002
|
|
|
557
|
|
|||
Residential land
|
1
|
|
|
92
|
|
|
92
|
|
|
—
|
|
|||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial
|
9
|
|
|
889
|
|
|
889
|
|
|
248
|
|
|||
Consumer
|
1
|
|
|
59
|
|
|
59
|
|
|
27
|
|
|||
|
64
|
|
|
$
|
4,798
|
|
|
$
|
4,792
|
|
|
$
|
877
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
14
|
|
|
$
|
3,131
|
|
|
$
|
3,245
|
|
|
$
|
337
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Home equity line of credit
|
36
|
|
|
3,337
|
|
|
3,337
|
|
|
554
|
|
|||
Residential land
|
2
|
|
|
203
|
|
|
204
|
|
|
—
|
|
|||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial
|
15
|
|
|
20,266
|
|
|
20,266
|
|
|
865
|
|
|||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
67
|
|
|
$
|
26,937
|
|
|
$
|
27,052
|
|
|
$
|
1,756
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
19
|
|
|
$
|
3,594
|
|
|
$
|
3,668
|
|
|
$
|
87
|
|
Commercial real estate
|
1
|
|
|
1,500
|
|
|
1,500
|
|
|
—
|
|
|||
Home equity line of credit
|
39
|
|
|
2,441
|
|
|
2,441
|
|
|
370
|
|
|||
Residential land
|
1
|
|
|
218
|
|
|
218
|
|
|
—
|
|
|||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial
|
8
|
|
|
2,267
|
|
|
2,267
|
|
|
486
|
|
|||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
68
|
|
|
$
|
10,020
|
|
|
$
|
10,094
|
|
|
$
|
943
|
|
Years ended December 31
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
(dollars in thousands)
|
Number of
contracts
|
|
Recorded
investment
|
|
Number of
contracts
|
|
Recorded
investment
|
|
Number of
contracts |
|
Recorded
investment |
|||||||||
Troubled debt restructurings that subsequently defaulted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
1
|
|
|
$
|
222
|
|
|
1
|
|
|
$
|
239
|
|
|
—
|
|
|
$
|
—
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Home equity line of credit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
6
|
|
|||
Residential land
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial
|
—
|
|
|
—
|
|
|
1
|
|
|
24
|
|
|
1
|
|
|
1,056
|
|
|||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
1
|
|
|
$
|
222
|
|
|
2
|
|
|
$
|
263
|
|
|
2
|
|
|
$
|
1,062
|
|
(in thousands)
|
Gross
carrying amount 1 |
|
Accumulated amortization
1
|
|
Valuation allowance
|
|
Net
carrying amount |
||||||||
December 31, 2017
|
$
|
17,511
|
|
|
$
|
(8,872
|
)
|
|
$
|
—
|
|
|
$
|
8,639
|
|
December 31, 2016
|
$
|
17,271
|
|
|
$
|
(7,898
|
)
|
|
$
|
—
|
|
|
$
|
9,373
|
|
(in thousands)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Mortgage servicing rights
|
|
|
|
|
|
||||||
Balance, January 1
|
$
|
9,373
|
|
|
$
|
8,884
|
|
|
$
|
11,749
|
|
Amount capitalized
|
1,239
|
|
|
2,740
|
|
|
3,123
|
|
|||
Amortization
|
(1,973
|
)
|
|
(2,251
|
)
|
|
(2,682
|
)
|
|||
Sale of mortgage servicing rights
|
—
|
|
|
—
|
|
|
(3,302
|
)
|
|||
Other-than-temporary impairment
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||
Carrying amount before valuation allowance, December 31
|
8,639
|
|
|
9,373
|
|
|
8,884
|
|
|||
Valuation allowance for mortgage servicing rights
|
|
|
|
|
|
||||||
Balance, January 1
|
—
|
|
|
—
|
|
|
209
|
|
|||
Provision (recovery)
|
—
|
|
|
—
|
|
|
(205
|
)
|
|||
Other-than-temporary impairment
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||
Balance, December 31
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net carrying value of mortgage servicing rights
|
$
|
8,639
|
|
|
$
|
9,373
|
|
|
$
|
8,884
|
|
December 31
|
2017
|
|
2016
|
||||
(dollars in thousands)
|
|
|
|
||||
Unpaid principal balance
|
$
|
1,195,454
|
|
|
$
|
1,188,380
|
|
Weighted average note rate
|
3.94
|
%
|
|
3.96
|
%
|
||
Weighted average discount rate
|
10.0
|
%
|
|
9.4
|
%
|
||
Weighted average prepayment speed
|
9.0
|
%
|
|
8.5
|
%
|
December 31
|
2017
|
|
2016
|
||||
(in thousands)
|
|
|
|
||||
Prepayment rate:
|
|
|
|
||||
25 basis points adverse rate change
|
$
|
(869
|
)
|
|
$
|
(567
|
)
|
50 basis points adverse rate change
|
(1,828
|
)
|
|
(1,154
|
)
|
||
Discount rate:
|
|
|
|
||||
25 basis points adverse rate change
|
(111
|
)
|
|
(128
|
)
|
||
50 basis points adverse rate change
|
(220
|
)
|
|
(254
|
)
|
December 31
|
2017
|
|
2016
|
||||||||||
(dollars in thousands)
|
Weighted-average stated rate
|
|
|
Amount
|
|
|
Weighted-average stated rate
|
|
|
Amount
|
|
||
Savings
|
0.07
|
%
|
|
$
|
2,303,450
|
|
|
0.07
|
%
|
|
$
|
2,208,594
|
|
Checking
|
|
|
|
|
|
|
|
|
|
||||
Interest-bearing
|
0.03
|
|
|
944,833
|
|
|
0.02
|
|
|
890,633
|
|
||
Noninterest-bearing
|
—
|
|
|
896,292
|
|
|
—
|
|
|
817,867
|
|
||
Commercial checking
|
—
|
|
|
863,941
|
|
|
—
|
|
|
821,184
|
|
||
Money market
|
0.09
|
|
|
114,797
|
|
|
0.12
|
|
|
153,126
|
|
||
Time certificates
|
1.26
|
|
|
767,284
|
|
|
1.00
|
|
|
657,525
|
|
||
|
0.20
|
%
|
|
$
|
5,890,597
|
|
|
0.15
|
%
|
|
$
|
5,548,929
|
|
(in thousands)
|
|
||
2018
|
$
|
401,650
|
|
2019
|
114,434
|
|
|
2020
|
123,310
|
|
|
2021
|
71,729
|
|
|
2022
|
52,860
|
|
|
Thereafter
|
3,301
|
|
|
|
$
|
767,284
|
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
(in thousands)
|
|
|
|
|
|
||||||
Time certificates
|
$
|
7,687
|
|
|
$
|
5,390
|
|
|
$
|
3,747
|
|
Savings
|
1,567
|
|
|
1,402
|
|
|
1,257
|
|
|||
Money market
|
168
|
|
|
202
|
|
|
205
|
|
|||
Interest-bearing checking
|
238
|
|
|
173
|
|
|
139
|
|
|||
|
$
|
9,660
|
|
|
$
|
7,167
|
|
|
$
|
5,348
|
|
(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
|
|
|
|
|
|
|
|
|
|
|||
December 31, 2017
|
|
$
|
141
|
|
|
$
|
—
|
|
|
$
|
141
|
|
December 31, 2016
|
|
93
|
|
|
—
|
|
|
93
|
|
|
|
Gross amount not offset in the Balance Sheet
|
||||||||||
(in millions)
|
|
Net amount of
liabilities presented
in the Balance Sheet
|
|
Financial
instruments
|
|
Cash
collateral
pledged
|
||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||
Commercial account holders
|
|
$
|
141
|
|
|
$
|
165
|
|
|
$
|
—
|
|
Total
|
|
$
|
141
|
|
|
$
|
165
|
|
|
$
|
—
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|||
Government entities
|
|
$
|
14
|
|
|
$
|
15
|
|
|
$
|
—
|
|
Commercial account holders
|
|
79
|
|
|
101
|
|
|
—
|
|
|||
Total
|
|
$
|
93
|
|
|
$
|
116
|
|
|
$
|
—
|
|
(dollars in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Amount outstanding as of December 31
|
$
|
141
|
|
|
$
|
93
|
|
|
$
|
229
|
|
Average amount outstanding during the year
|
$
|
98
|
|
|
$
|
170
|
|
|
$
|
219
|
|
Maximum amount outstanding as of any month-end
|
$
|
141
|
|
|
$
|
229
|
|
|
$
|
277
|
|
Weighted-average interest rate as of December 31
|
0.65
|
%
|
|
0.23
|
%
|
|
1.24
|
%
|
|||
Weighted-average interest rate during the year
|
0.26
|
%
|
|
1.43
|
%
|
|
1.29
|
%
|
|||
Weighted-average remaining days to maturity as of December 31
|
1
|
|
|
6
|
|
|
117
|
|
December 31
|
2017
|
|
2016
|
||||||||||||||||||
Maturity
|
Repurchase liability
|
|
|
Weighted-average
interest rate
|
|
|
Collateralized by
mortgage-related
securities and federal
agency obligations at fair value plus
accrued interest
|
|
|
Repurchase liability
|
|
|
Weighted-average
interest rate |
|
|
Collateralized by
mortgage-related securities and federal agency obligations at fair value plus accrued interest |
|
||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Overnight
|
$
|
140,859
|
|
|
0.65
|
%
|
|
$
|
165,464
|
|
|
$
|
79,083
|
|
|
0.15
|
%
|
|
$
|
100,305
|
|
1 to 29 days
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
30 to 90 days
|
—
|
|
|
—
|
|
|
—
|
|
|
13,535
|
|
|
0.70
|
|
|
15,239
|
|
||||
Over 90 days
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
140,859
|
|
|
0.65
|
%
|
|
$
|
165,464
|
|
|
$
|
92,618
|
|
|
0.23
|
%
|
|
$
|
115,544
|
|
December 31, 2017
|
Weighted-average
stated rate
|
|
Amount
|
|||
(dollars in thousands)
|
|
|
|
|
|
|
Due in
|
|
|
|
|
|
|
2018
|
1.95
|
%
|
|
$
|
50,000
|
|
2019
|
—
|
|
|
—
|
|
|
2020
|
—
|
|
|
—
|
|
|
2021
|
—
|
|
|
—
|
|
|
2022
|
—
|
|
|
—
|
|
|
Thereafter
|
—
|
|
|
—
|
|
|
|
1.95
|
%
|
|
$
|
50,000
|
|
|
Actual
|
|
Minimum required
|
|
Required to be well capitalized
|
||||||||||||
(dollars in thousands)
|
Capital
|
|
Ratio
|
|
Capital
|
|
Ratio
|
|
Capital
|
|
Ratio
|
||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tier 1 leverage
|
571,810
|
|
|
8.58
|
%
|
|
266,430
|
|
|
4.00
|
%
|
|
333,038
|
|
|
5.00
|
%
|
Common equity tier 1
|
571,810
|
|
|
12.95
|
%
|
|
198,628
|
|
|
4.50
|
%
|
|
286,907
|
|
|
6.50
|
%
|
Tier 1 capital
|
571,810
|
|
|
12.95
|
%
|
|
264,838
|
|
|
6.00
|
%
|
|
353,117
|
|
|
8.00
|
%
|
Total capital
|
626,987
|
|
|
14.20
|
%
|
|
353,117
|
|
|
8.00
|
%
|
|
441,396
|
|
|
10.00
|
%
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tier 1 leverage
|
542,239
|
|
|
8.59
|
%
|
|
252,515
|
|
|
4.00
|
%
|
|
315,644
|
|
|
5.00
|
%
|
Common equity tier 1
|
542,239
|
|
|
12.17
|
%
|
|
200,455
|
|
|
4.50
|
%
|
|
289,545
|
|
|
6.50
|
%
|
Tier 1 capital
|
542,239
|
|
|
12.17
|
%
|
|
267,273
|
|
|
6.00
|
%
|
|
356,364
|
|
|
8.00
|
%
|
Total capital
|
597,940
|
|
|
13.42
|
%
|
|
356,364
|
|
|
8.00
|
%
|
|
445,455
|
|
|
10.00
|
%
|
December 31
|
2017
|
|
2016
|
||||||||||||
(in thousands)
|
Notional amount
|
|
Fair value
|
|
Notional amount
|
|
Fair value
|
||||||||
Interest rate lock commitments
|
$
|
13,669
|
|
|
$
|
131
|
|
|
$
|
25,883
|
|
|
$
|
421
|
|
Forward commitments
|
14,465
|
|
|
(24
|
)
|
|
30,813
|
|
|
(177
|
)
|
Derivative Financial Instruments Not Designated
|
Location of net gains
|
|
|
|
|
|
|
||||||
as Hedging Instruments
|
(losses) recognized in
|
|
Years ended December 31
|
||||||||||
(in thousands)
|
the Statements of Income
|
|
2017
|
|
2016
|
|
2015
|
||||||
Interest rate lock commitments
|
Mortgage banking income
|
|
$
|
(290
|
)
|
|
$
|
37
|
|
|
$
|
(6
|
)
|
Forward commitments
|
Mortgage banking income
|
|
153
|
|
|
(148
|
)
|
|
77
|
|
|||
|
|
|
$
|
(137
|
)
|
|
$
|
(111
|
)
|
|
$
|
71
|
|
December 31
|
2017
|
|
|
2016
|
|
||
(in thousands)
|
|
|
|
||||
Unfunded commitments to extend credit:
|
|
|
|
|
|||
Home equity line of credit
|
$
|
1,214,103
|
|
|
$
|
1,146,339
|
|
Commercial and commercial real estate
|
466,510
|
|
|
577,410
|
|
||
Consumer
|
68,053
|
|
|
64,762
|
|
||
Residential 1-4 family
|
18,635
|
|
|
38,271
|
|
||
Commercial and financial standby letters of credit
|
13,136
|
|
|
16,017
|
|
||
Total
|
$
|
1,780,437
|
|
|
$
|
1,842,799
|
|
5
·
Short-term borrowings
|
6
·
Long-term debt
|
December 31
|
2017
|
|
|
2016
|
|
||
(dollars in thousands)
|
|
|
|
|
|
||
Long-term debt of Utilities, net of unamortized debt issuance costs
1
|
$
|
1,368,479
|
|
|
$
|
1,319,260
|
|
Hamakua Energy 4.02% notes, due 2030
|
67,325
|
|
|
—
|
|
||
HEI 2.99% term loan, due 2022
|
150,000
|
|
|
—
|
|
||
HEI 5.67% senior notes, due 2021
|
50,000
|
|
|
50,000
|
|
||
HEI 3.99% senior notes, due 2023
|
50,000
|
|
|
50,000
|
|
||
HEI term loans LIBOR + 0.75%, paid 2017
|
—
|
|
|
200,000
|
|
||
Less unamortized debt issuance costs
|
(2,007
|
)
|
|
(241
|
)
|
||
|
$
|
1,683,797
|
|
|
$
|
1,619,019
|
|
1
|
See components of “Total long-term debt” and unamortized debt issuance costs in Hawaiian Electric and subsidiaries’ Consolidated Statements of Capitalization.
|
|
Refunding Series 2017A Special Purpose Revenue Bonds
|
Refunding Series 2017B Special Purpose Revenue Bonds
|
Aggregate principal amount
|
$125 million
|
$140 million
|
Fixed coupon interest rate
|
3.10%
|
4.00%
|
Maturity date
|
May 1, 2026
|
March 1, 2037
|
DBF loaned the proceeds to:
|
|
|
Hawaiian Electric
|
$62 million
|
$100 million
|
Hawaii Electric Light
|
$8 million
|
$20 million
|
Maui Electric
|
$55 million
|
$20 million
|
|
Refunding Series 2007B Special Purpose Revenue Bonds
|
Series 2007A Special Purpose Revenue Bonds
|
Aggregate principal amount
|
$125 million
|
$140 million
|
Fixed coupon interest rate
|
4.60%
|
4.65%
|
Maturity date
|
May 1, 2026
|
March 1, 2037
|
7
·
Shareholders’ equity
|
|
HEI Consolidated
|
|
Hawaiian Electric Consolidated
|
||||||||||||||||||||||||
(in thousands)
|
Net unrealized gains (losses) on securities
|
|
Unrealized gains (losses) on derivatives
|
|
Retirement benefit plans
|
|
AOCI
|
|
Unrealized gains (losses) on derivatives
|
|
Retirement benefit plans
|
|
AOCI
|
||||||||||||||
Balance, December 31, 2014
|
$
|
462
|
|
|
$
|
(289
|
)
|
|
$
|
(27,551
|
)
|
|
$
|
(27,378
|
)
|
|
$
|
—
|
|
|
$
|
45
|
|
|
$
|
45
|
|
Current period other comprehensive income (loss), net of taxes
|
(2,334
|
)
|
|
235
|
|
|
3,215
|
|
|
1,116
|
|
|
—
|
|
|
880
|
|
|
880
|
|
|||||||
Balance, December 31, 2015
|
(1,872
|
)
|
|
(54
|
)
|
|
(24,336
|
)
|
|
(26,262
|
)
|
|
—
|
|
|
925
|
|
|
925
|
|
|||||||
Current period other comprehensive income (loss), net of taxes
|
(6,059
|
)
|
|
(400
|
)
|
|
(408
|
)
|
|
(6,867
|
)
|
|
(454
|
)
|
|
(793
|
)
|
|
(1,247
|
)
|
|||||||
Balance, December 31, 2016
|
(7,931
|
)
|
|
(454
|
)
|
|
(24,744
|
)
|
|
(33,129
|
)
|
|
(454
|
)
|
|
132
|
|
|
(322
|
)
|
|||||||
Current period other comprehensive income (loss), net of taxes
|
(4,370
|
)
|
|
454
|
|
|
2,544
|
|
|
(1,372
|
)
|
|
454
|
|
|
(1,142
|
)
|
|
(688
|
)
|
|||||||
Reclass of AOCI for tax rate reduction impact
|
(2,650
|
)
|
|
—
|
|
|
(4,790
|
)
|
|
(7,440
|
)
|
|
—
|
|
|
(209
|
)
|
|
(209
|
)
|
|||||||
Balance, December 31, 2017
|
$
|
(14,951
|
)
|
|
$
|
—
|
|
|
$
|
(26,990
|
)
|
|
$
|
(41,941
|
)
|
|
$
|
—
|
|
|
$
|
(1,219
|
)
|
|
(1,219
|
)
|
|
|
Amount reclassified from AOCI
|
|
Affected line item in the Statement of
|
||||||||||
Years ended December 31
|
|
2017
|
|
2016
|
|
2015
|
|
Income/Balance Sheet
|
||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||
HEI consolidated
|
|
|
|
|
|
|
|
|
||||||
Net realized gains on securities included in net income
|
|
$
|
—
|
|
|
$
|
(360
|
)
|
|
$
|
—
|
|
|
Revenues-bank (gains on sale of investment securities, net)
|
Derivatives qualifying as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
||||
Window forward contracts
|
|
454
|
|
|
(173
|
)
|
|
—
|
|
|
Property, plant and equipment-electric utilities (2017); Revenues-electric utilities (gains on window forward contracts (2016)
|
|||
Interest rate contracts (settled in 2011)
|
|
—
|
|
|
54
|
|
|
235
|
|
|
Interest expense
|
|||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Amortization of prior service credit and net losses recognized during the period in net periodic benefit cost
|
|
15,737
|
|
|
14,518
|
|
|
22,465
|
|
|
See Note 8 for additional details
|
|||
Impact of D&Os of the PUC included in regulatory assets
|
|
(78,724
|
)
|
|
28,584
|
|
|
(25,139
|
)
|
|
See Note 8 for additional details
|
|||
Total reclassifications
|
|
$
|
(62,533
|
)
|
|
$
|
42,623
|
|
|
$
|
(2,439
|
)
|
|
|
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
||||||
Derivatives qualifying as cash flow hedges
|
|
|
|
|
|
|
|
|
||||||
Window forward contracts
|
|
454
|
|
|
(173
|
)
|
|
—
|
|
|
Property, plant and equipment (2017); Revenues (gains on window forward contracts (2016)
|
|||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Amortization of prior service credit and net losses recognized during the period in net periodic benefit cost
|
|
$
|
14,477
|
|
|
$
|
13,254
|
|
|
$
|
20,381
|
|
|
See Note 8 for additional details
|
Impact of D&Os of the PUC included in regulatory assets
|
|
(78,724
|
)
|
|
28,584
|
|
|
(25,139
|
)
|
|
See Note 8 for additional details
|
|||
Total reclassifications
|
|
$
|
(63,793
|
)
|
|
$
|
41,665
|
|
|
$
|
(4,758
|
)
|
|
|
8 · Retirement benefits
|
|
2017
|
|
2016
|
||||||||||||
(in thousands)
|
Pension
benefits
|
|
Other
benefits
|
|
Pension
benefits
|
|
Other
benefits
|
||||||||
HEI consolidated
|
|
|
|
|
|
|
|
||||||||
Benefit obligation, January 1
|
$
|
1,935,494
|
|
|
$
|
233,835
|
|
|
$
|
1,798,030
|
|
|
$
|
221,540
|
|
Service cost
|
64,906
|
|
|
3,374
|
|
|
60,555
|
|
|
3,331
|
|
||||
Interest cost
|
81,185
|
|
|
9,453
|
|
|
81,549
|
|
|
9,670
|
|
||||
Actuarial losses (gains)
|
87,399
|
|
|
(25,557
|
)
|
|
67,741
|
|
|
7,831
|
|
||||
Participants contributions
|
—
|
|
|
2,078
|
|
|
—
|
|
|
1,405
|
|
||||
Benefits paid and expenses
|
(74,628
|
)
|
|
(10,582
|
)
|
|
(72,381
|
)
|
|
(9,942
|
)
|
||||
Benefit obligation, December 31
|
2,094,356
|
|
|
212,601
|
|
|
1,935,494
|
|
|
233,835
|
|
||||
Fair value of plan assets, January 1
|
1,369,701
|
|
|
174,251
|
|
|
1,271,474
|
|
|
170,687
|
|
||||
Actual return on plan assets
|
255,324
|
|
|
28,248
|
|
|
103,836
|
|
|
11,352
|
|
||||
Employer contributions
|
66,983
|
|
|
—
|
|
|
65,463
|
|
|
42
|
|
||||
Participants contributions
|
—
|
|
|
2,078
|
|
|
—
|
|
|
1,405
|
|
||||
Benefits paid and expenses
|
(73,305
|
)
|
|
(10,582
|
)
|
|
(71,072
|
)
|
|
(9,235
|
)
|
||||
Fair value of plan assets, December 31
|
1,618,703
|
|
|
193,995
|
|
|
1,369,701
|
|
|
174,251
|
|
||||
Accrued benefit asset (liability), December 31
|
$
|
(475,653
|
)
|
|
$
|
(18,606
|
)
|
|
$
|
(565,793
|
)
|
|
$
|
(59,584
|
)
|
Other assets
|
$
|
15,443
|
|
|
$
|
—
|
|
|
$
|
13,477
|
|
|
$
|
—
|
|
Defined benefit pension and other postretirement benefit plans liability
|
(491,096
|
)
|
|
(18,606
|
)
|
|
(579,270
|
)
|
|
(59,584
|
)
|
||||
Accrued benefit asset (liability), December 31
|
$
|
(475,653
|
)
|
|
$
|
(18,606
|
)
|
|
$
|
(565,793
|
)
|
|
$
|
(59,584
|
)
|
AOCI debit, January 1 (excluding impact of PUC D&Os)
|
$
|
619,451
|
|
|
$
|
42,290
|
|
|
$
|
581,763
|
|
|
$
|
32,550
|
|
Recognized during year – prior service credit
|
55
|
|
|
1,793
|
|
|
57
|
|
|
1,793
|
|
||||
Recognized during year – net actuarial losses
|
(26,496
|
)
|
|
(1,130
|
)
|
|
(24,832
|
)
|
|
(804
|
)
|
||||
Occurring during year – net actuarial losses (gains)
|
(65,180
|
)
|
|
(41,479
|
)
|
|
62,463
|
|
|
8,751
|
|
||||
AOCI debit before cumulative impact of PUC D&Os, December 31
|
527,830
|
|
|
1,474
|
|
|
619,451
|
|
|
42,290
|
|
||||
Cumulative impact of PUC D&Os
|
(489,894
|
)
|
|
(2,767
|
)
|
|
(576,933
|
)
|
|
(43,974
|
)
|
||||
AOCI debit/(credit), December 31
|
$
|
37,936
|
|
|
$
|
(1,293
|
)
|
|
$
|
42,518
|
|
|
$
|
(1,684
|
)
|
Net actuarial loss
|
$
|
527,907
|
|
|
$
|
10,183
|
|
|
$
|
619,582
|
|
|
$
|
52,792
|
|
Prior service gain
|
(77
|
)
|
|
(8,709
|
)
|
|
(131
|
)
|
|
(10,502
|
)
|
||||
AOCI debit before cumulative impact of PUC D&Os, December 31
|
527,830
|
|
|
1,474
|
|
|
619,451
|
|
|
42,290
|
|
||||
Cumulative impact of PUC D&Os
|
(489,894
|
)
|
|
(2,767
|
)
|
|
(576,933
|
)
|
|
(43,974
|
)
|
||||
AOCI debit/(credit), December 31
|
37,936
|
|
|
(1,293
|
)
|
|
42,518
|
|
|
(1,684
|
)
|
||||
Income taxes (benefits)
|
(9,986
|
)
|
|
333
|
|
|
(16,746
|
)
|
|
656
|
|
||||
AOCI debit/(credit), net of taxes (benefits), December 31
|
$
|
27,950
|
|
|
$
|
(960
|
)
|
|
$
|
25,772
|
|
|
$
|
(1,028
|
)
|
As of December 31, 2017 and 2016, the other postretirement benefit plans shown in the table above had ABOs in excess of plan assets.
|
|
|
|
|
|
|
|
|
||||||||
|
2017
|
|
2016
|
||||||||||||
(in thousands)
|
Pension
benefits
|
|
Other
benefits
|
|
Pension
benefits
|
|
Other
benefits
|
||||||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
||||||||
Benefit obligation, January 1
|
$
|
1,779,626
|
|
|
$
|
225,723
|
|
|
$
|
1,649,690
|
|
|
$
|
213,990
|
|
Service cost
|
63,059
|
|
|
3,353
|
|
|
58,796
|
|
|
3,284
|
|
||||
Interest cost
|
74,632
|
|
|
9,115
|
|
|
74,808
|
|
|
9,337
|
|
||||
Actuarial losses (gains)
|
80,186
|
|
|
(25,172
|
)
|
|
63,121
|
|
|
7,545
|
|
||||
Participants contributions
|
—
|
|
|
2,047
|
|
|
—
|
|
|
1,389
|
|
||||
Benefits paid and expenses
|
(68,691
|
)
|
|
(10,419
|
)
|
|
(66,789
|
)
|
|
(9,822
|
)
|
||||
Transfers
|
(164
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
||||
Benefit obligation, December 31
|
1,928,648
|
|
|
204,644
|
|
|
1,779,626
|
|
|
225,723
|
|
||||
Fair value of plan assets, January 1
|
1,233,184
|
|
|
171,383
|
|
|
1,141,833
|
|
|
167,930
|
|
||||
Actual return on plan assets
|
237,830
|
|
|
27,806
|
|
|
93,441
|
|
|
11,168
|
|
||||
Employer contributions
|
65,669
|
|
|
—
|
|
|
64,236
|
|
|
11
|
|
||||
Participants contributions
|
—
|
|
|
2,047
|
|
|
—
|
|
|
1,389
|
|
||||
Benefits paid and expenses
|
(68,225
|
)
|
|
(10,419
|
)
|
|
(66,326
|
)
|
|
(9,115
|
)
|
||||
Other
|
(55
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets, December 31
|
1,468,403
|
|
|
190,814
|
|
|
1,233,184
|
|
|
171,383
|
|
||||
Accrued benefit liability, December 31
|
$
|
(460,245
|
)
|
|
$
|
(13,830
|
)
|
|
$
|
(546,442
|
)
|
|
$
|
(54,340
|
)
|
Other liabilities (short-term)
|
(494
|
)
|
|
(633
|
)
|
|
(460
|
)
|
|
(596
|
)
|
||||
Defined benefit pension and other postretirement benefit plans liability
|
(459,751
|
)
|
|
(13,197
|
)
|
|
(545,982
|
)
|
|
(53,744
|
)
|
||||
Accrued benefit liability, December 31
|
$
|
(460,245
|
)
|
|
$
|
(13,830
|
)
|
|
$
|
(546,442
|
)
|
|
$
|
(54,340
|
)
|
AOCI debit, January 1 (excluding impact of PUC D&Os)
|
$
|
579,725
|
|
|
$
|
40,967
|
|
|
$
|
541,118
|
|
|
$
|
31,485
|
|
Recognized during year – prior service credit (cost)
|
(8
|
)
|
|
1,804
|
|
|
(13
|
)
|
|
1,803
|
|
||||
Recognized during year – net actuarial losses
|
(24,392
|
)
|
|
(1,102
|
)
|
|
(22,693
|
)
|
|
(793
|
)
|
||||
Occurring during year – net actuarial losses (gains)
|
(61,861
|
)
|
|
(40,830
|
)
|
|
61,313
|
|
|
8,472
|
|
||||
AOCI debit before cumulative impact of PUC D&Os, December 31
|
493,464
|
|
|
839
|
|
|
579,725
|
|
|
40,967
|
|
||||
Cumulative impact of PUC D&Os
|
(489,894
|
)
|
|
(2,767
|
)
|
|
(576,933
|
)
|
|
(43,974
|
)
|
||||
AOCI debit/(credit), December 31
|
$
|
3,570
|
|
|
$
|
(1,928
|
)
|
|
$
|
2,792
|
|
|
$
|
(3,007
|
)
|
Net actuarial loss
|
$
|
493,439
|
|
|
$
|
9,531
|
|
|
$
|
579,691
|
|
|
$
|
51,463
|
|
Prior service cost (gain)
|
25
|
|
|
(8,692
|
)
|
|
34
|
|
|
(10,496
|
)
|
||||
AOCI debit before cumulative impact of PUC D&Os, December 31
|
493,464
|
|
|
839
|
|
|
579,725
|
|
|
40,967
|
|
||||
Cumulative impact of PUC D&Os
|
(489,894
|
)
|
|
(2,767
|
)
|
|
(576,933
|
)
|
|
(43,974
|
)
|
||||
AOCI debit/(credit), December 31
|
3,570
|
|
|
(1,928
|
)
|
|
2,792
|
|
|
(3,007
|
)
|
||||
Income taxes (benefits)
|
(920
|
)
|
|
497
|
|
|
(1,087
|
)
|
|
1,170
|
|
||||
AOCI debit/(credit), net of taxes (benefits), December 31
|
$
|
2,650
|
|
|
$
|
(1,431
|
)
|
|
$
|
1,705
|
|
|
$
|
(1,837
|
)
|
|
Pension benefits
1
|
|
Other benefits
2
|
||||||||||||||||||
|
|
|
|
|
Investment policy
|
|
|
|
|
|
Investment policy
|
||||||||||
December 31
|
2017
|
|
|
2016
|
|
|
Target
|
|
|
Range
|
|
2017
|
|
|
2016
|
|
|
Target
|
|
|
Range
|
Assets held by category
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
73
|
%
|
|
71
|
%
|
|
70
|
%
|
|
65-75
|
|
73
|
%
|
|
70
|
%
|
|
70
|
%
|
|
65-75
|
Fixed income securities
|
27
|
|
|
29
|
|
|
30
|
|
|
25-35
|
|
27
|
|
|
30
|
|
|
30
|
|
|
25-35
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
1
|
Asset allocation is applicable to only HEI and the Utilities. As of December 31, 2017 and 2016, nearly all of ASB's pension assets were invested in fixed income securities.
|
2
|
Asset allocation is applicable to only HEI and the Utilities. ASB does not fund its other benefits.
|
|
Pension benefits
|
|
Other benefits
|
||||||||||||||||||||||||||||
|
|
|
Fair value measurements using
|
|
|
|
Fair value measurements using
|
||||||||||||||||||||||||
(in millions)
|
December 31
|
|
Quoted prices in active markets for identical assets
(Level 1) |
|
Significant other observable inputs
(Level 2) |
|
Significant unobservable inputs
(Level 3) |
|
December 31
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
568
|
|
|
$
|
568
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75
|
|
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity index funds
|
435
|
|
|
435
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
52
|
|
|
—
|
|
|
—
|
|
||||||||
Equity investments at net asset value (NAV)
|
76
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total equity investments
|
1,079
|
|
|
1,003
|
|
|
—
|
|
|
—
|
|
|
139
|
|
|
127
|
|
|
—
|
|
|
—
|
|
||||||||
Fixed income securities and public mutual funds
|
297
|
|
|
81
|
|
|
216
|
|
|
—
|
|
|
46
|
|
|
43
|
|
|
3
|
|
|
—
|
|
||||||||
Fixed income investments at NAV
|
203
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total fixed income investments
|
500
|
|
|
81
|
|
|
216
|
|
|
—
|
|
|
50
|
|
|
43
|
|
|
3
|
|
|
—
|
|
||||||||
Cash equivalents at NAV
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
$
|
1,615
|
|
|
$
|
1,084
|
|
|
$
|
216
|
|
|
$
|
—
|
|
|
$
|
194
|
|
|
$
|
170
|
|
|
$
|
3
|
|
|
$
|
—
|
|
Cash, receivables and payables, net
|
4
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets
|
$
|
1,619
|
|
|
|
|
|
|
|
|
|
|
|
$
|
194
|
|
|
|
|
|
|
|
|
|
|
||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
692
|
|
|
$
|
692
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
94
|
|
|
$
|
94
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity index funds
|
129
|
|
|
129
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
17
|
|
|
—
|
|
|
—
|
|
||||||||
Equity investments at NAV
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total equity investments
|
877
|
|
|
821
|
|
|
—
|
|
|
—
|
|
|
120
|
|
|
111
|
|
|
—
|
|
|
—
|
|
||||||||
Fixed income securities and public mutual funds
|
276
|
|
|
84
|
|
|
192
|
|
|
—
|
|
|
44
|
|
|
42
|
|
|
2
|
|
|
—
|
|
||||||||
Fixed income investments at NAV
|
180
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total fixed income investments
|
456
|
|
|
84
|
|
|
192
|
|
|
—
|
|
|
48
|
|
|
42
|
|
|
2
|
|
|
—
|
|
||||||||
Cash equivalents at NAV
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
1,366
|
|
|
$
|
905
|
|
|
$
|
192
|
|
|
$
|
—
|
|
|
174
|
|
|
$
|
153
|
|
|
$
|
2
|
|
|
$
|
—
|
|
||
Cash, receivables and payables, net
|
4
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets
|
$
|
1,370
|
|
|
|
|
|
|
|
|
|
|
|
$
|
174
|
|
|
|
|
|
|
|
|
|
|
|
Pension benefits
|
|
Other benefits
|
||||||||||||
Measured at net asset value
|
December 31
|
|
|
Redemption frequency
|
|
Redemption notice period
|
|
December 31
|
|
|
Redemption frequency
|
|
Redemption notice period
|
||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non U.S. equity funds (a)
|
76
|
|
|
Daily-Monthly
|
|
5 - 30 days
|
|
12
|
|
|
Daily-Monthly
|
|
5-30 days
|
||
Fixed income investments (b)
|
203
|
|
|
Monthly
|
|
15 days
|
|
4
|
|
|
Monthly
|
|
15 days
|
||
Cash equivalents (c)
|
36
|
|
|
Daily
|
|
0-1 day
|
|
5
|
|
|
Daily
|
|
0-1 day
|
||
|
$
|
315
|
|
|
|
|
|
|
$
|
21
|
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non U.S. equity funds (a)
|
56
|
|
|
Daily - Quarterly
|
|
0 - 30 days
|
|
9
|
|
|
Monthly - Quarterly
|
|
10-30 days
|
||
Fixed income investments (b)
|
180
|
|
|
Monthly
|
|
10 days
|
|
4
|
|
|
Monthly
|
|
10 days
|
||
Cash equivalents (c)
|
33
|
|
|
Daily
|
|
0-1 day
|
|
6
|
|
|
Daily
|
|
0-1 day
|
||
|
$
|
269
|
|
|
|
|
|
|
$
|
19
|
|
|
|
|
|
(a)
|
Represents investments in funds that primarily invest in non-U.S., emerging markets equities. Redemption frequency for pension benefits assets as of December 31, 2017 were: daily,
32%
and monthly,
68%
and as of December 31, 2016 were: daily,
31%
; monthly,
31%
; and quarterly,
38%
. Redemption frequency for other benefits assets as of December 31, 2017 were: daily,
26%
and monthly,
74%
and as of December 31, 2016 were: monthly,
57%
; and quarterly,
42%
.
|
(b )
|
Represents investments in fixed income securities invested in a US-dollar denominated fund that seeks to exceed the Barclays Capital Long Corporate A or better Index through investments in US-dollar denominated fixed income securities and commingled vehicles.
|
(c)
|
Represents investments in cash equivalent funds. This class includes funds that invest primarily in securities issued or guaranteed by the U.S. government or its agencies or instrumentalities. For pension benefits, the fund may also invest in fixed income securities of investment grade issuers.
|
|
Pension benefits
|
|
Other benefits
|
||||||||||||||
December 31
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||
Benefit obligation
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.74
|
%
|
|
4.26
|
%
|
|
4.60
|
%
|
|
3.72
|
%
|
|
4.22
|
%
|
|
4.57
|
%
|
Rate of compensation increase
|
3.5
|
|
|
3.5
|
|
|
3.5
|
|
|
NA
|
|
|
NA
|
|
|
NA
|
|
Net periodic pension/benefit cost (years ended)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.26
|
|
|
4.60
|
|
|
4.22
|
|
|
4.22
|
|
|
4.57
|
|
|
4.17
|
|
Expected return on plan assets
1
|
7.50
|
|
|
7.75
|
|
|
7.75
|
|
|
7.50
|
|
|
7.75
|
|
|
7.75
|
|
Rate of compensation increase
2
|
3.5
|
|
|
3.5
|
|
|
3.5
|
|
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
Pension benefits
|
|
Other benefits
|
||||||||||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
64,906
|
|
|
$
|
60,555
|
|
|
$
|
66,260
|
|
|
$
|
3,374
|
|
|
$
|
3,331
|
|
|
$
|
3,927
|
|
Interest cost
|
81,185
|
|
|
81,549
|
|
|
76,960
|
|
|
9,453
|
|
|
9,670
|
|
|
9,011
|
|
||||||
Expected return on plan assets
|
(102,745
|
)
|
|
(98,559
|
)
|
|
(88,554
|
)
|
|
(12,326
|
)
|
|
(12,273
|
)
|
|
(11,664
|
)
|
||||||
Amortization of net prior service (gain) cost
|
(55
|
)
|
|
(57
|
)
|
|
4
|
|
|
(1,793
|
)
|
|
(1,793
|
)
|
|
(1,793
|
)
|
||||||
Amortization of net actuarial losses
|
26,496
|
|
|
24,832
|
|
|
36,800
|
|
|
1,130
|
|
|
804
|
|
|
1,796
|
|
||||||
Net periodic pension/benefit cost
|
69,787
|
|
|
68,320
|
|
|
91,470
|
|
|
(162
|
)
|
|
(261
|
)
|
|
1,277
|
|
||||||
Impact of PUC D&Os
|
(18,004
|
)
|
|
(18,117
|
)
|
|
(40,011
|
)
|
|
1,211
|
|
|
1,343
|
|
|
(240
|
)
|
||||||
Net periodic pension/benefit cost (adjusted for impact of PUC D&Os)
|
$
|
51,783
|
|
|
$
|
50,203
|
|
|
$
|
51,459
|
|
|
$
|
1,049
|
|
|
$
|
1,082
|
|
|
$
|
1,037
|
|
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
63,059
|
|
|
$
|
58,796
|
|
|
$
|
64,262
|
|
|
$
|
3,353
|
|
|
$
|
3,284
|
|
|
$
|
3,870
|
|
Interest cost
|
74,632
|
|
|
74,808
|
|
|
70,529
|
|
|
9,115
|
|
|
9,337
|
|
|
8,700
|
|
||||||
Expected return on plan assets
|
(95,892
|
)
|
|
(91,633
|
)
|
|
(82,541
|
)
|
|
(12,147
|
)
|
|
(12,096
|
)
|
|
(11,495
|
)
|
||||||
Amortization of net prior service (gain) cost
|
8
|
|
|
13
|
|
|
40
|
|
|
(1,804
|
)
|
|
(1,803
|
)
|
|
(1,804
|
)
|
||||||
Amortization of net actuarial losses
|
24,392
|
|
|
22,693
|
|
|
33,371
|
|
|
1,102
|
|
|
793
|
|
|
1,754
|
|
||||||
Net periodic pension/benefit cost
|
66,199
|
|
|
64,677
|
|
|
85,661
|
|
|
(381
|
)
|
|
(485
|
)
|
|
1,025
|
|
||||||
Impact of PUC D&Os
|
(18,004
|
)
|
|
(18,117
|
)
|
|
(40,011
|
)
|
|
1,211
|
|
|
1,343
|
|
|
(240
|
)
|
||||||
Net periodic pension/benefit cost (adjusted for impact of PUC D&Os)
|
$
|
48,195
|
|
|
$
|
46,560
|
|
|
$
|
45,650
|
|
|
$
|
830
|
|
|
$
|
858
|
|
|
$
|
785
|
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||
(in millions)
|
Pension benefits
|
|
Other benefits
|
|
Pension benefits
|
|
Other benefits
|
||||||||
Estimated prior service credit
|
$
|
—
|
|
|
$
|
(1.8
|
)
|
|
$
|
—
|
|
|
$
|
(1.8
|
)
|
Net actuarial loss
|
29.6
|
|
|
—
|
|
|
26.8
|
|
|
—
|
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||
December 31
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
(in billions)
|
|
|
|
|
|
|
|
||||||||
Defined benefit plans -
ABOs
|
$
|
1.8
|
|
|
$
|
1.7
|
|
|
$
|
1.7
|
|
|
$
|
1.5
|
|
Defined benefit plans with ABO in excess of plan assets
|
|
|
|
|
|
|
|
||||||||
ABOs
|
1.7
|
|
|
1.6
|
|
|
1.7
|
|
|
1.5
|
|
||||
Plan assets
|
1.5
|
|
|
1.3
|
|
|
1.5
|
|
|
1.2
|
|
||||
Defined benefit plans with PBOs in excess of plan assets
|
|
|
|
|
|
|
|
||||||||
PBOs
|
2.0
|
|
|
1.8
|
|
|
1.9
|
|
|
1.8
|
|
||||
Plan assets
|
1.5
|
|
|
1.3
|
|
|
1.5
|
|
|
1.2
|
|
9
·
Share-based compensation
|
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
HEI consolidated
|
|
|
|
|
|
||||||
Share-based compensation expense
1
|
$
|
5.4
|
|
|
$
|
4.8
|
|
|
$
|
6.5
|
|
Income tax benefit
|
1.9
|
|
|
1.6
|
|
|
2.3
|
|
|||
Hawaiian Electric consolidated
|
|
|
|
|
|
||||||
Share-based compensation expense
1
|
1.9
|
|
|
1.4
|
|
|
1.9
|
|
|||
Income tax benefit
|
0.7
|
|
|
0.5
|
|
|
0.7
|
|
1
|
For 2017 and 2016, the Company has not capitalized any share-based compensation. In 2015,
$0.15 million
of this share-based compensation expense was capitalized.
|
(dollars in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Shares granted
|
35,770
|
|
|
19,846
|
|
|
28,246
|
|
|||
Fair value
|
$
|
1.2
|
|
|
$
|
0.6
|
|
|
$
|
0.8
|
|
Income tax benefit
|
0.5
|
|
|
0.2
|
|
|
0.3
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|||||||||
Outstanding, January 1
|
220,683
|
|
|
$
|
29.57
|
|
|
210,634
|
|
|
$
|
28.82
|
|
|
261,235
|
|
|
$
|
25.77
|
|
|||
Granted
|
97,873
|
|
|
33.47
|
|
|
114,431
|
|
|
29.70
|
|
|
85,772
|
|
|
33.69
|
|
||||||
Vested
|
(92,147
|
)
|
|
28.88
|
|
|
(85,003
|
)
|
|
27.84
|
|
|
(102,173
|
)
|
|
25.67
|
|
||||||
Forfeited
|
(29,362
|
)
|
|
31.57
|
|
|
(19,379
|
)
|
|
29.82
|
|
|
(34,200
|
)
|
|
27.09
|
|
||||||
Outstanding, December 31
|
197,047
|
|
|
$
|
31.53
|
|
|
220,683
|
|
|
$
|
29.57
|
|
|
210,634
|
|
|
$
|
28.82
|
|
|||
Total weighted-average grant-date fair value of shares granted ($ millions)
|
$
|
3.3
|
|
|
|
|
$
|
3.4
|
|
|
|
|
$
|
2.9
|
|
|
|
(1)
|
Weighted-average grant-date fair value per share based on the average price of HEI common stock on the date of grant.
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|||||||||
Outstanding, January 1
|
83,106
|
|
|
$
|
22.95
|
|
|
162,500
|
|
|
$
|
27.66
|
|
|
257,956
|
|
|
$
|
28.45
|
|
|||
Granted
|
37,204
|
|
|
39.51
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vested (issued or unissued and cancelled)
|
(83,106
|
)
|
|
22.95
|
|
|
(78,553
|
)
|
|
32.69
|
|
|
(75,915
|
)
|
|
30.71
|
|
||||||
Forfeited
|
(4,300
|
)
|
|
39.51
|
|
|
(841
|
)
|
|
22.95
|
|
|
(19,541
|
)
|
|
26.25
|
|
||||||
Outstanding, December 31
|
32,904
|
|
|
$
|
39.51
|
|
|
83,106
|
|
|
$
|
22.95
|
|
|
162,500
|
|
|
$
|
27.66
|
|
|||
Total weighted-average grant-date fair value of shares granted ($ millions)
|
$
|
1.5
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
(1)
|
Weighted-average grant-date fair value per share determined using a Monte Carlo simulation model.
|
|
|
2017
|
|
|
Risk-free interest rate
|
|
1.46
|
%
|
|
Expected life in years
|
|
3
|
|
|
Expected volatility
|
|
20.1
|
%
|
|
Range of expected volatility for Peer Group
|
|
15.4% to 26.0%
|
|
|
Grant date fair value (per share)
|
|
$
|
39.51
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|||||||||
Outstanding, January 1
|
109,816
|
|
|
$
|
25.18
|
|
|
222,647
|
|
|
$
|
26.02
|
|
|
364,731
|
|
|
$
|
26.01
|
|
|||
Granted
|
148,818
|
|
|
33.47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vested
|
(109,816
|
)
|
|
25.18
|
|
|
(109,097
|
)
|
|
26.89
|
|
|
(121,249
|
)
|
|
26.05
|
|
||||||
Increase above target (cancelled)
|
—
|
|
|
—
|
|
|
(1,989
|
)
|
|
25.26
|
|
|
3,412
|
|
|
26.89
|
|
||||||
Forfeited
|
(17,202
|
)
|
|
33.48
|
|
|
(1,745
|
)
|
|
25.19
|
|
|
(24,247
|
)
|
|
25.82
|
|
||||||
Outstanding, December 31
|
131,616
|
|
|
$
|
33.47
|
|
|
109,816
|
|
|
$
|
25.18
|
|
|
222,647
|
|
|
$
|
26.02
|
|
|||
Total weighted-average grant-date fair value of shares granted (at target performance levels) ($ millions)
|
$
|
5.0
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
(1)
|
Weighted-average grant-date fair value per share based on the average price of HEI common stock on the date of grant.
|
10
·
Income taxes
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||||||||||
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Federal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Current
|
$
|
61,534
|
|
|
$
|
59,873
|
|
|
$
|
44,343
|
|
|
$
|
36,267
|
|
|
$
|
952
|
|
|
$
|
—
|
|
Deferred*
|
33,967
|
|
|
43,666
|
|
|
36,664
|
|
|
35,229
|
|
|
70,513
|
|
|
68,757
|
|
||||||
Deferred tax credits, net
|
(20
|
)
|
|
268
|
|
|
318
|
|
|
(20
|
)
|
|
268
|
|
|
318
|
|
||||||
|
95,481
|
|
|
103,807
|
|
|
81,325
|
|
|
71,476
|
|
|
71,733
|
|
|
69,075
|
|
||||||
State
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current
|
10,076
|
|
|
16,473
|
|
|
2,402
|
|
|
8,947
|
|
|
9,232
|
|
|
(1,048
|
)
|
||||||
Deferred
|
3,868
|
|
|
3,452
|
|
|
4,768
|
|
|
2,808
|
|
|
3,873
|
|
|
6,869
|
|
||||||
Deferred tax credits, net
|
(32
|
)
|
|
(37
|
)
|
|
4,526
|
|
|
(32
|
)
|
|
(37
|
)
|
|
4,526
|
|
||||||
|
13,912
|
|
|
19,888
|
|
|
11,696
|
|
|
11,723
|
|
|
13,068
|
|
|
10,347
|
|
||||||
Total
|
$
|
109,393
|
|
|
$
|
123,695
|
|
|
$
|
93,021
|
|
|
$
|
83,199
|
|
|
$
|
84,801
|
|
|
$
|
79,422
|
|
*
|
Included in the amounts for 2017 are federal deferred income tax expenses of
$13.4 million
and
$9.2 million
for the Company and Hawaiian Electric consolidated, respectively, primarily to reduce federal accumulated deferred income tax net asset balances (not accounted for under Utility regulatory ratemaking) to reflect the impact of the Tax Act. See “Lower tax rate” below.
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||||||||||
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amount at the federal statutory income tax rate
|
$
|
96,796
|
|
|
$
|
130,844
|
|
|
$
|
89,176
|
|
|
$
|
71,801
|
|
|
$
|
80,190
|
|
|
$
|
75,996
|
|
Increase (decrease) resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
State income taxes, net of federal income tax benefit
|
9,789
|
|
|
13,915
|
|
|
8,097
|
|
|
7,584
|
|
|
8,494
|
|
|
6,726
|
|
||||||
Net deferred tax asset adjustment related to the Tax Act
|
13,420
|
|
|
—
|
|
|
—
|
|
|
9,168
|
|
|
—
|
|
|
—
|
|
||||||
Other, net
|
(10,612
|
)
|
|
(21,064
|
)
|
|
(4,252
|
)
|
|
(5,354
|
)
|
|
(3,883
|
)
|
|
(3,300
|
)
|
||||||
Total
|
$
|
109,393
|
|
|
$
|
123,695
|
|
|
$
|
93,021
|
|
|
$
|
83,199
|
|
|
$
|
84,801
|
|
|
$
|
79,422
|
|
Effective income tax rate
|
39.6
|
%
|
|
33.1
|
%
|
|
36.5
|
%
|
|
40.6
|
%
|
|
37.0
|
%
|
|
36.6
|
%
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||
December 31
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||
Deferred tax assets
|
|
|
|
|
|
|
|
|
|
||||||
Regulatory liabilities, excluding amounts attributable to property, plant and equipment
|
$
|
104,984
|
|
|
$
|
—
|
|
|
$
|
104,984
|
|
|
$
|
—
|
|
Net operating loss
1
|
—
|
|
|
—
|
|
|
—
|
|
|
9,158
|
|
||||
Allowance for bad debts
|
16,192
|
|
|
24,500
|
|
|
1,812
|
|
|
2,364
|
|
||||
Other
|
24,397
|
|
|
47,201
|
|
|
11,253
|
|
|
18,720
|
|
||||
Total deferred tax assets
|
145,573
|
|
|
71,701
|
|
|
118,049
|
|
|
30,242
|
|
||||
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
||||||
Property, plant and equipment related
|
415,452
|
|
|
642,266
|
|
|
413,891
|
|
|
640,667
|
|
||||
Regulatory assets, excluding amounts attributable to property, plant and equipment
|
38,314
|
|
|
35,107
|
|
|
38,314
|
|
|
35,107
|
|
||||
Deferred RAM and RBA revenues
|
15,038
|
|
|
26,053
|
|
|
15,038
|
|
|
26,053
|
|
||||
Retirement benefits
|
32,952
|
|
|
48,400
|
|
|
38,020
|
|
|
51,445
|
|
||||
Other
|
32,247
|
|
|
48,681
|
|
|
6,827
|
|
|
10,629
|
|
||||
Total deferred tax liabilities
|
534,003
|
|
|
800,507
|
|
|
512,090
|
|
|
763,901
|
|
||||
Net deferred income tax liability
|
$
|
388,430
|
|
|
$
|
728,806
|
|
|
$
|
394,041
|
|
|
$
|
733,659
|
|
1
|
The Hawaiian Electric deferred tax asset for 2016 includes the tax effect of the federal net operating loss carryforward of
$9 million
, which was utilized in 2017, and federal general business credit carryforwards of
$3 million
utilized in 2017, net of unrecognized federal tax benefits of
$3 million
due to uncertain tax positions.
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||||||||||
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
||||||
Unrecognized tax benefits, January 1
|
$
|
3.8
|
|
|
$
|
3.6
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
3.6
|
|
|
—
|
|
|
Additions based on tax positions taken during the year
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
||||||
Reductions based on tax positions taken during the year
|
(0.2
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
—
|
|
||||||
Additions for tax positions of prior years
|
—
|
|
|
0.3
|
|
|
3.6
|
|
|
—
|
|
|
0.3
|
|
|
3.6
|
|
||||||
Reductions for tax positions of prior years
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
||||||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Unrecognized tax benefits, December 31
|
$
|
4.0
|
|
|
$
|
3.8
|
|
|
$
|
3.6
|
|
|
$
|
3.5
|
|
|
$
|
3.8
|
|
|
$
|
3.6
|
|
11
·
Cash flows
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
(in millions)
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information
|
|
|
|
|
|
|
|
|
|||
HEI consolidated
|
|
|
|
|
|
||||||
Interest paid to non-affiliates
|
$
|
83
|
|
|
$
|
84
|
|
|
$
|
83
|
|
Income taxes paid (including refundable credits)
|
55
|
|
|
55
|
|
|
75
|
|
|||
Income taxes refunded (including refundable credits)
|
1
|
|
|
45
|
|
|
55
|
|
|||
Hawaiian Electric consolidated
|
|
|
|
|
|
||||||
Interest paid to non-affiliates
|
63
|
|
|
62
|
|
|
61
|
|
|||
Income taxes paid (including refundable credits)
|
26
|
|
|
1
|
|
|
13
|
|
|||
Income taxes refunded (including refundable credits)
|
—
|
|
|
20
|
|
|
12
|
|
|||
Supplemental disclosures of noncash activities
|
|
|
|
|
|
|
|
|
|||
HEI consolidated
|
|
|
|
|
|
||||||
Property, plant and equipment
|
|
|
|
|
|
||||||
Unpaid invoices and accruals for capital expenditures,
|
|
|
|
|
|
||||||
balance, end of period (investing)
|
38
|
|
|
84
|
|
|
70
|
|
|||
Common stock dividends reinvested in HEI common stock (financing)
1
|
—
|
|
|
17
|
|
|
—
|
|
|||
Loans transferred from held for investment to held for sale (investing)
|
41
|
|
|
24
|
|
|
—
|
|
|||
Real estate acquired in settlement of loans (investing)
|
—
|
|
|
1
|
|
|
1
|
|
|||
Real estate transferred from property, plant and equipment to other assets held-for-sale (investing)
|
—
|
|
|
1
|
|
|
5
|
|
|||
Common stock issued (gross) for director and executive/management compensation (financing)
2
|
11
|
|
|
7
|
|
|
10
|
|
|||
Obligations to fund low income housing investments, net (investing)
|
13
|
|
|
—
|
|
|
—
|
|
|||
Hawaiian Electric consolidated
|
|
|
|
|
|
||||||
Electric utility property, plant and equipment
|
|
|
|
|
|
|
|
|
|||
Unpaid invoices and accruals for capital expenditures,
|
|
|
|
|
|
||||||
balance, end of period (investing)
|
38
|
|
|
84
|
|
|
70
|
|
|||
HEI Consolidated and Hawaiian Electric consolidated
|
|
|
|
|
|
||||||
Electric utility property, plant and equipment
|
|
|
|
|
|
||||||
Estimated fair value of noncash contributions in aid of construction (investing)
|
18
|
|
|
28
|
|
|
3
|
|
|||
Refinancing of long-term debt (financing)
|
—
|
|
|
—
|
|
|
47
|
|
1
|
The amounts shown represents common stock dividends reinvested in HEI common stock under the HEI DRIP in noncash transactions.
|
12
·
Regulatory restrictions on net assets
|
13
·
Significant group concentrations of credit risk
|
14
·
Fair value measurements
|
|
|
|
Estimated fair value
|
||||||||||||||||
(in thousands)
|
Carrying or notional
amount
|
|
Quoted prices in active markets for identical assets
(Level 1)
|
|
Significant other observable inputs
(Level 2)
|
|
Significant unobservable inputs
(Level 3) |
|
Total
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale investment securities
|
$
|
1,401,198
|
|
|
$
|
—
|
|
|
$
|
1,385,771
|
|
|
$
|
15,427
|
|
|
$
|
1,401,198
|
|
Held-to-maturity investment securities
|
44,515
|
|
|
—
|
|
|
44,412
|
|
|
—
|
|
|
44,412
|
|
|||||
Stock in Federal Home Loan Bank
|
9,706
|
|
|
—
|
|
|
9,706
|
|
|
—
|
|
|
9,706
|
|
|||||
Loans receivable, net
|
4,628,381
|
|
|
—
|
|
|
11,254
|
|
|
4,770,497
|
|
|
4,781,751
|
|
|||||
Mortgage servicing rights
|
8,639
|
|
|
—
|
|
|
—
|
|
|
12,052
|
|
|
12,052
|
|
|||||
Derivative assets
|
17,812
|
|
|
—
|
|
|
393
|
|
|
—
|
|
|
393
|
|
|||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative assets-window forward contracts
|
3,240
|
|
|
—
|
|
|
256
|
|
|
—
|
|
|
256
|
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposit liabilities
|
5,890,597
|
|
|
—
|
|
|
5,884,071
|
|
|
—
|
|
|
5,884,071
|
|
|||||
Short-term borrowings—other than bank
|
117,945
|
|
|
—
|
|
|
117,945
|
|
|
—
|
|
|
117,945
|
|
|||||
Other bank borrowings
|
190,859
|
|
|
—
|
|
|
190,829
|
|
|
—
|
|
|
190,829
|
|
|||||
Long-term debt, net—other than bank
|
1,683,797
|
|
|
—
|
|
|
1,813,295
|
|
|
—
|
|
|
1,813,295
|
|
|||||
Derivative liabilities
|
13,562
|
|
|
20
|
|
|
10
|
|
|
—
|
|
|
30
|
|
|||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
4,999
|
|
|
—
|
|
|
4,999
|
|
|
—
|
|
|
4,999
|
|
|||||
Long-term debt, net
|
1,368,479
|
|
|
—
|
|
|
1,497,079
|
|
|
—
|
|
|
1,497,079
|
|
|||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market funds
|
$
|
13,085
|
|
|
$
|
—
|
|
|
$
|
13,085
|
|
|
$
|
—
|
|
|
$
|
13,085
|
|
Available-for-sale investment securities
|
1,105,182
|
|
|
—
|
|
|
1,089,755
|
|
|
15,427
|
|
|
1,105,182
|
|
|||||
Stock in Federal Home Loan Bank
|
11,218
|
|
|
—
|
|
|
11,218
|
|
|
—
|
|
|
11,218
|
|
|||||
Loans receivable, net
|
4,701,977
|
|
|
—
|
|
|
13,333
|
|
|
4,839,493
|
|
|
4,852,826
|
|
|||||
Mortgage servicing rights
|
9,373
|
|
|
—
|
|
|
—
|
|
|
13,216
|
|
|
13,216
|
|
|||||
Derivative assets
|
23,578
|
|
|
—
|
|
|
453
|
|
|
—
|
|
|
453
|
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposit liabilities
|
5,548,929
|
|
|
—
|
|
|
5,546,644
|
|
|
—
|
|
|
5,546,644
|
|
|||||
Other bank borrowings
|
192,618
|
|
|
—
|
|
|
193,991
|
|
|
—
|
|
|
193,991
|
|
|||||
Long-term debt, net—other than bank
|
1,619,019
|
|
|
—
|
|
|
1,704,717
|
|
|
—
|
|
|
1,704,717
|
|
|||||
Derivative liabilities
|
53,852
|
|
|
129
|
|
|
823
|
|
|
—
|
|
|
952
|
|
|||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt, net
|
1,319,260
|
|
|
—
|
|
|
1,399,490
|
|
|
—
|
|
|
1,399,490
|
|
|||||
Derivative liabilities—window forward contracts
|
20,734
|
|
|
—
|
|
|
743
|
|
|
—
|
|
|
743
|
|
December 31
|
2017
|
|
2016
|
||||||||||||||||||||
|
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)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,085
|
|
|
$
|
—
|
|
Available-for-sale investment securities (bank segment)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Mortgage-related securities-FNMA, FHLMC and GNMA
|
$
|
—
|
|
|
$
|
1,201,473
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
897,474
|
|
|
$
|
—
|
|
U.S. Treasury and federal agency obligations
|
—
|
|
|
184,298
|
|
|
—
|
|
|
—
|
|
|
192,281
|
|
|
—
|
|
||||||
Mortgage revenue bond
|
—
|
|
|
—
|
|
|
15,427
|
|
|
—
|
|
|
—
|
|
|
15,427
|
|
||||||
|
$
|
—
|
|
|
$
|
1,385,771
|
|
|
$
|
15,427
|
|
|
$
|
—
|
|
|
$
|
1,089,755
|
|
|
$
|
15,427
|
|
Derivative assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate lock commitments (bank segment)
1
|
$
|
—
|
|
|
$
|
133
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
445
|
|
|
$
|
—
|
|
Forward commitments (bank segment)
1
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||||
Window forward contracts (electric utility segment)
2
|
—
|
|
|
256
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
$
|
—
|
|
|
$
|
393
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
453
|
|
|
$
|
—
|
|
Derivative liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate lock commitments (bank segment)
1
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
—
|
|
Forward commitments (bank segment)
1
|
20
|
|
|
8
|
|
|
—
|
|
|
129
|
|
|
56
|
|
|
—
|
|
||||||
Window forward contracts (electric utility segment)
2
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
743
|
|
|
—
|
|
||||||
|
$
|
20
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
129
|
|
|
$
|
823
|
|
|
$
|
—
|
|
1
|
Derivatives are carried at fair value with changes in value reflected in the balance sheet in other assets or other liabilities and included in mortgage banking income.
|
2
|
Derivatives are included in regulatory assets and/or liabilities in the balance sheets.
|
(in thousands)
|
2017
|
|
2016
|
|
||
Mortgage revenue bond
|
|
|
||||
Balance, January 1
|
$
|
15,427
|
|
$
|
—
|
|
Principal payments received
|
—
|
|
—
|
|
||
Purchases
|
—
|
|
15,427
|
|
||
Unrealized gain (loss) included in other comprehensive income
|
—
|
|
—
|
|
||
Balance, December 31
|
$
|
15,427
|
|
$
|
15,427
|
|
|
|
|
Fair value measurements using
|
||||||||||||
(in thousands)
|
Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans
|
$
|
2,621
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,621
|
|
December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Loans
|
2,767
|
|
|
—
|
|
|
—
|
|
|
2,767
|
|
||||
Real estate acquired in settlement of loans
|
1,189
|
|
|
—
|
|
|
—
|
|
|
1,189
|
|
|
|
|
|
|
|
|
Significant unobservable
input value (1)
|
||||
(dollars in thousands)
|
Fair value
|
|
Valuation technique
|
|
Significant unobservable input
|
|
Range
|
|
Weighted
Average |
||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||
Residential loans
|
$
|
613
|
|
|
Fair value of collateral
|
|
Appraised value less 7% selling cost
|
|
71-92%
|
|
84%
|
Commercial loans
|
2,008
|
|
|
Fair value of collateral
|
|
Appraised value
|
|
71-76%
|
|
75%
|
|
Total loans
|
$
|
2,621
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
||
Residential loans
|
$
|
2,468
|
|
|
Sales price
|
|
Sales price
|
|
95-100%
|
|
97%
|
Residential loans
|
$
|
287
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling cost
|
|
42-65%
|
|
61%
|
Home equity lines of credit
|
12
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling cost
|
|
|
|
N/A (2)
|
|
Total loans
|
$
|
2,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Real estate acquired in settlement of loans
|
$
|
1,189
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling cost
|
|
100%
|
|
100%
|
(1)
|
Represent percent of outstanding principal balance.
|
(2)
|
N/A - Not applicable. There is one loan in each fair value measurement type.
|
15
·
Termination of proposed merger and other matters
|
16
·
Quarterly information (unaudited)
|
|
Quarters ended
|
|
Years ended
|
||||||||||||||||
(in thousands, except per share amounts)
|
March 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
|
December 31
|
||||||||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
2017
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
591,562
|
|
|
$
|
632,281
|
|
|
$
|
673,185
|
|
|
$
|
658,597
|
|
|
$
|
2,555,625
|
|
Operating income
|
67,862
|
|
|
75,896
|
|
|
109,545
|
|
|
84,988
|
|
|
338,291
|
|
|||||
Net income
|
34,666
|
|
|
39,134
|
|
|
60,544
|
|
|
32,843
|
|
|
167,187
|
|
|||||
Net income for common stock
|
34,193
|
|
|
38,661
|
|
|
60,073
|
|
|
32,370
|
|
|
165,297
|
|
|||||
Basic earnings per common share
3
|
0.31
|
|
|
0.36
|
|
|
0.55
|
|
|
0.30
|
|
|
1.52
|
|
|||||
Diluted earnings per common share
4
|
0.31
|
|
|
0.36
|
|
|
0.55
|
|
|
0.30
|
|
|
1.52
|
|
|||||
Dividends per common share
|
0.31
|
|
|
0.31
|
|
|
0.31
|
|
|
0.31
|
|
|
1.24
|
|
|||||
2016
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
550,960
|
|
|
$
|
566,244
|
|
|
$
|
646,055
|
|
|
$
|
617,395
|
|
|
$
|
2,380,654
|
|
Operating income
|
68,851
|
|
|
85,455
|
|
|
105,442
|
|
|
88,427
|
|
|
348,175
|
|
|||||
Net income
|
32,825
|
|
|
44,601
|
|
|
127,613
|
|
|
45,107
|
|
|
250,146
|
|
|||||
Net income for common stock
|
32,352
|
|
|
44,128
|
|
|
127,142
|
|
|
44,634
|
|
|
248,256
|
|
|||||
Basic earnings per common share
3
|
0.30
|
|
|
0.41
|
|
|
1.17
|
|
|
0.41
|
|
|
2.30
|
|
|||||
Diluted earnings per common share
4
|
0.30
|
|
|
0.41
|
|
|
1.17
|
|
|
0.41
|
|
|
2.29
|
|
|||||
Dividends per common share
|
0.31
|
|
|
0.31
|
|
|
0.31
|
|
|
0.31
|
|
|
1.24
|
|
|||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
2017
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
518,611
|
|
|
$
|
556,875
|
|
|
$
|
598,769
|
|
|
$
|
583,311
|
|
|
$
|
2,257,566
|
|
Operating income
|
48,938
|
|
|
55,047
|
|
|
87,076
|
|
|
66,460
|
|
|
257,521
|
|
|||||
Net income
|
21,964
|
|
|
26,143
|
|
|
47,985
|
|
|
25,854
|
|
|
121,946
|
|
|||||
Net income for common stock
|
21,465
|
|
|
25,644
|
|
|
47,487
|
|
|
25,355
|
|
|
119,951
|
|
|||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
482,052
|
|
|
495,395
|
|
|
572,253
|
|
|
544,668
|
|
|
2,094,368
|
|
|||||
Operating income
|
55,326
|
|
|
70,686
|
|
|
89,812
|
|
|
68,644
|
|
|
284,468
|
|
|||||
Net income
|
25,866
|
|
|
36,356
|
|
|
47,472
|
|
|
34,618
|
|
|
144,312
|
|
|||||
Net income for common stock
|
25,367
|
|
|
35,857
|
|
|
46,974
|
|
|
34,119
|
|
|
142,317
|
|
1
|
In the fourth quarter of 2017, the Company recorded a
$14.2 million
adjustment, primarily to reduce deferred tax net asset balances (not accounted for under Utility regulatory ratemaking) to reflect the lower rates enacted by the Tax Act. Also included in this adjustment is
$0.7 million
(net of tax) of non-executive bonuses paid by ASB related to the enactment of federal tax reform. See below for the impact of the Utilities lower RAM revenues due to the expiration of the 2013 settlement agreement.
|
2
|
In the third quarter of 2016, HEI received a
$90 million
termination fee from NEE and in 2016 received and incurred other merger and spin-off-related amounts (see Note
15
to the Consolidated Financial Statements). For the first quarter of 2016, second quarter of 2016 and third quarter of 2016, the Company recorded merger- and spin-off-related income/(expenses), net of tax impacts of
$(2) million
,
$(2) million
and
$64 million
, respectively.
|
3
|
The quarterly basic earnings per common share are based upon the weighted-average number of shares of common stock outstanding in each quarter.
|
4
|
The quarterly diluted earnings per common share are based upon the weighted-average number of shares of common stock outstanding in each quarter plus the dilutive incremental shares at quarter end.
|
5
|
In the fourth quarter of 2017, Hawaiian Electric consolidated recorded a
$9.2 million
adjustment to reduce deferred tax net asset balances (not accounted for under regulatory ratemaking) to reflect the lower rates enacted by the Tax Act. In the first five months of 2017, the Utilities recorded lower RAM revenues due to the expiration of the 2013 settlement agreement that allowed the accrual of RAM revenues on January 1 (vs. June 1) for years 2014 to 2016 at Hawaiian Electric. For the first and second quarters of 2017, the Utilities recorded lower revenues of
$12 million
(
$7 million
, net of tax impacts) and
$8 million
(
$4 million
, net of tax impacts) due to this RAM lag, respectively.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
(1)
|
is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and
|
(2)
|
is accumulated and communicated to HEI management, including HEI’s CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
|
(1)
|
is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and
|
(2)
|
is accumulated and communicated to Hawaiian Electric management, including Hawaiian Electric’s CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
•
|
“Nominees for Class I directors whose terms expire at the 2021 Annual Meeting”
|
•
|
“Continuing Class II directors whose terms expire at the 2019 Annual Meeting”
|
•
|
“Continuing Class III directors whose terms expire at the 2020 Annual Meeting”
|
•
|
“Committees of the Board” (portions regarding whether HEI has an audit committee and identifying its members; no other portion of the Committees of the Board section is incorporated herein by reference)
|
•
|
“Audit Committee Report” (portion identifying audit committee financial experts who serve on the HEI Audit Committee only; no other portion of the Audit Committee Report is incorporated herein by reference)
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
•
|
Pages 8 to 31 of Hawaiian Electric Exhibit 99.1 to this Form 10-K;
|
•
|
The discussion of “2016-18 Long-Term Incentive Plan” at pages 15-16 of Hawaiian Electric’s Exhibit 99.1 to Annual Report on Form 10-K for the year ended December 31, 2016; and
|
•
|
Information concerning compensation paid to directors of Hawaiian Electric who are also directors of HEI under the section of HEI's 2018 Proxy Statement entitled, “Director Compensation.”
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Plan category
|
(a)
Number of
securities
to be issued upon
exercise of
outstanding
options, warrants
and rights (1)
|
|
(b)
Weighted-average
exercise price of
outstanding
options,
warrants and
rights
|
|
(c)
Number of securities
remaining available for
future issuance
under equity
compensation plans
(excluding securities
reflected in column (a)) (2)
|
||||
Equity compensation plans approved by shareholders
|
351,191
|
|
|
$
|
—
|
|
|
3,000,172
|
|
Equity compensation plans not approved by shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
351,191
|
|
|
$
|
—
|
|
|
3,000,172
|
|
EIP
|
|
|
137,186
|
|
Restricted stock units plus estimated compounded dividend equivalents (if applicable) *
|
214,005
|
|
Shares to be issued in February 2020 under the 2017-2019 LTIP plus compounded dividend equivalents
|
351,191
|
|
|
*
|
Under the amended EIP as of
December 31, 2017
, RSUs count as one share against shares available for issuance less estimated shares withheld for taxes under net share settlement which again become available for the issuance of new shares on a one-to-one basis.
|
(2)
|
This represents the number of shares available as of
December 31, 2017
for future awards, including 2,914,744 shares available for future awards under the amended EIP and 85,428 shares available for future awards under the 2011 Nonemployee Director Plan.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
Page/s in Form 10-K
|
|||
|
HEI
|
|
Hawaiian Electric
|
|
Schedule I
|
Condensed Financial Information of Registrant, Hawaiian Electric Industries, Inc. (Parent Company) at December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015
|
|
NA
|
|
Schedule II
|
Valuation and Qualifying Accounts, Hawaiian Electric Industries, Inc. and subsidiaries and Hawaiian Electric Company, Inc. and subsidiaries for the years ended December 31, 2017, 2016 and 2015
|
|
||
NA Not applicable.
|
|
|
|
|
December 31
|
2017
|
|
2016
|
||||
(dollars in thousands)
|
|
|
|
|
|
||
Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
11,702
|
|
|
$
|
14,924
|
|
Accounts receivable
|
2,347
|
|
|
3,788
|
|
||
Property, plant and equipment, net
|
3,910
|
|
|
4,143
|
|
||
Deferred income tax assets
|
8,710
|
|
|
17,280
|
|
||
Other assets
|
15,480
|
|
|
9,858
|
|
||
Investments in subsidiaries, at equity
|
2,466,342
|
|
|
2,383,405
|
|
||
Total assets
|
$
|
2,508,491
|
|
|
$
|
2,433,398
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
561
|
|
|
$
|
379
|
|
Interest payable
|
2,319
|
|
|
1,735
|
|
||
Notes payable to subsidiaries
|
1,918
|
|
|
5,373
|
|
||
Commercial paper
|
62,993
|
|
|
—
|
|
||
Short-term debt, net
|
49,953
|
|
|
—
|
|
||
Long-term debt, net
|
249,588
|
|
|
299,759
|
|
||
Retirement benefits liability
|
31,518
|
|
|
33,939
|
|
||
Other
|
12,255
|
|
|
25,460
|
|
||
Total liabilities
|
411,105
|
|
|
366,645
|
|
||
Shareholders’ equity
|
|
|
|
|
|
||
Preferred stock, no par value, authorized 10,000,000 shares; issued: none
|
—
|
|
|
—
|
|
||
Common stock, no par value, authorized 200,000,000 shares; issued and outstanding: 108,787,807
shares and 108,583,413 shares at December 31, 2017 and 2016, respectively |
1,662,491
|
|
|
1,660,910
|
|
||
Retained earnings
|
476,836
|
|
|
438,972
|
|
||
Accumulated other comprehensive loss
|
(41,941
|
)
|
|
(33,129
|
)
|
||
Total shareholders' equity
|
2,097,386
|
|
|
2,066,753
|
|
||
Total liabilities and shareholders' equity
|
$
|
2,508,491
|
|
|
$
|
2,433,398
|
|
Years ended December 31
|
2017
|
|
2016
|
|
2015
|
||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Revenues
|
$
|
798
|
|
|
$
|
647
|
|
|
$
|
327
|
|
Equity in net income of subsidiaries
|
187,097
|
|
|
199,485
|
|
|
190,033
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Operating, administrative and general
|
17,697
|
|
|
18,701
|
|
|
34,350
|
|
|||
Depreciation of property, plant and equipment
|
548
|
|
|
566
|
|
|
576
|
|
|||
Taxes, other than income taxes
|
496
|
|
|
4,726
|
|
|
440
|
|
|||
Total expenses
|
18,741
|
|
|
23,993
|
|
|
35,366
|
|
|||
Income before merger termination fee, interest expense and income (taxes) benefits
|
169,154
|
|
|
176,139
|
|
|
154,994
|
|
|||
Merger termination fee
|
—
|
|
|
90,000
|
|
|
—
|
|
|||
Income before interest expense and income (taxes) benefits
|
169,154
|
|
|
266,139
|
|
|
154,994
|
|
|||
Interest expense
|
9,389
|
|
|
9,037
|
|
|
10,788
|
|
|||
Income before income (taxes) benefits
|
159,765
|
|
|
257,102
|
|
|
144,206
|
|
|||
Income (taxes) benefits
|
5,532
|
|
|
(8,846
|
)
|
|
15,671
|
|
|||
Net income
|
$
|
165,297
|
|
|
$
|
248,256
|
|
|
$
|
159,877
|
|
Years ended December 31
|
2017
|
|
2016
|
|
2015
|
||||||
(in thousands)
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
99,600
|
|
|
$
|
191,710
|
|
|
$
|
98,119
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Increase in note receivable from subsidiary
|
(70,000
|
)
|
|
—
|
|
|
—
|
|
|||
Decrease in note receivable from subsidiary
|
66,391
|
|
|
—
|
|
|
—
|
|
|||
Capital expenditures
|
(317
|
)
|
|
(212
|
)
|
|
(173
|
)
|
|||
Investments in subsidiaries
|
(22,353
|
)
|
|
(24,000
|
)
|
|
—
|
|
|||
Other
|
(177
|
)
|
|
1
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(26,456
|
)
|
|
(24,211
|
)
|
|
(173
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Net increase (decrease) in notes payable to subsidiaries with original maturities of three months or less
|
98
|
|
|
(618
|
)
|
|
87
|
|
|||
Net increase (decrease) in short-term borrowings with original maturities of three months or less
|
62,993
|
|
|
(103,063
|
)
|
|
(15,909
|
)
|
|||
Proceeds from issuance of short-term debt
|
125,000
|
|
|
—
|
|
|
—
|
|
|||
Repayment of short-term debt
|
(75,000
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of long-term debt
|
150,000
|
|
|
75,000
|
|
|
—
|
|
|||
Repayment of long-term debt
|
(200,000
|
)
|
|
(75,000
|
)
|
|
—
|
|
|||
Withheld shares for employee taxes on vested share-based compensation
|
(3,828
|
)
|
|
(2,416
|
)
|
|
(3,260
|
)
|
|||
Net proceeds from issuance of common stock
|
—
|
|
|
13,220
|
|
|
104,435
|
|
|||
Common stock dividends
|
(134,873
|
)
|
|
(117,274
|
)
|
|
(131,765
|
)
|
|||
Other
|
(756
|
)
|
|
2,460
|
|
|
3,306
|
|
|||
Net cash used in financing activities
|
(76,366
|
)
|
|
(207,691
|
)
|
|
(43,106
|
)
|
|||
Net increase (decrease) in cash and equivalents
|
(3,222
|
)
|
|
(40,192
|
)
|
|
54,840
|
|
|||
Cash and cash equivalents, January 1
|
14,924
|
|
|
55,116
|
|
|
276
|
|
|||
Cash and cash equivalents, December 31
|
$
|
11,702
|
|
|
$
|
14,924
|
|
|
$
|
55,116
|
|
December 31
|
2017
|
|
2016
|
||||
(dollars in thousands)
|
|
|
|
|
|
||
HEI 2.99% term loan, due 2022
|
$
|
150,000
|
|
|
$
|
—
|
|
HEI 5.67% senior note, due 2021
|
50,000
|
|
|
50,000
|
|
||
HEI 3.99% senior note, due 2023
|
50,000
|
|
|
50,000
|
|
||
HEI Term loans (LIBOR + 0.75%), paid in 2017
|
—
|
|
|
200,000
|
|
||
Less unamortized debt issuance costs
|
(412
|
)
|
|
(241
|
)
|
||
Long-term debt, net
|
$
|
249,588
|
|
|
$
|
299,759
|
|
Col. A
|
Col. B
|
|
Col. C
|
|
|
Col. D
|
|
|
Col. E
|
||||||||||||
(in thousands)
|
|
|
Additions
|
|
|
|
|
|
|
||||||||||||
Description
|
Balance
at begin-
ning of
period
|
|
Charged to
costs and
expenses
|
|
Charged
to other
accounts
|
|
|
Deductions
|
|
|
Balance at
end of
period
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for uncollectible accounts – electric utility
|
$
|
1,121
|
|
|
$
|
1,810
|
|
|
$
|
785
|
|
(a)
|
|
$
|
2,538
|
|
(b),(c)
|
|
$
|
1,178
|
|
Allowance for uncollectible interest – bank
|
$
|
1,834
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
1,467
|
|
|
|
$
|
367
|
|
Allowance for losses for loans receivable – bank
|
$
|
55,533
|
|
|
$
|
10,901
|
|
(d)
|
$
|
4,016
|
|
(a)
|
|
$
|
16,813
|
|
(b)
|
|
$
|
53,637
|
|
Deferred tax valuation allowance – HEI
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
38
|
|
|
|
$
|
—
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for uncollectible accounts – electric utility
|
$
|
1,699
|
|
|
$
|
2,383
|
|
|
$
|
877
|
|
(a)
|
|
$
|
3,838
|
|
(b),(c)
|
|
$
|
1,121
|
|
Allowance for uncollectible interest – bank
|
$
|
1,679
|
|
|
$
|
—
|
|
|
$
|
155
|
|
|
|
$
|
—
|
|
|
|
$
|
1,834
|
|
Allowance for losses for loans receivable – bank
|
$
|
50,038
|
|
|
$
|
16,763
|
|
(d)
|
$
|
2,977
|
|
(a)
|
|
$
|
14,245
|
|
(b)
|
|
$
|
55,533
|
|
Deferred tax valuation allowance – HEI
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
16
|
|
|
|
$
|
38
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for uncollectible accounts – electric utility
|
$
|
1,959
|
|
|
$
|
3,653
|
|
|
$
|
977
|
|
(a)
|
|
$
|
4,890
|
|
(b),(c)
|
|
$
|
1,699
|
|
Allowance for uncollectible interest – bank
|
$
|
1,514
|
|
|
$
|
—
|
|
|
$
|
165
|
|
|
|
$
|
—
|
|
|
|
$
|
1,679
|
|
Allowance for losses for loans receivable – bank
|
$
|
45,618
|
|
|
$
|
6,275
|
|
(d)
|
$
|
4,571
|
|
(a)
|
|
$
|
6,426
|
|
(b)
|
|
$
|
50,038
|
|
Allowance for mortgage-servicing assets – bank
|
$
|
209
|
|
|
$
|
—
|
|
|
$
|
(205
|
)
|
|
|
$
|
4
|
|
|
|
$
|
—
|
|
Deferred tax valuation allowance – HEI
|
$
|
45
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
54
|
|
(a)
|
Primarily recoveries.
|
(b)
|
Bad debts charged off.
|
(c)
|
Reclass of allowance for one customer account into other long term assets in 2017, 2016 and 2015 were
$841
,
$1,790
and
$2,303
, respectively.
|
(d)
|
Represents provision for loan loss.
|
Exhibit no.
|
Description
|
Form
|
File Number
|
Exhibit #
|
Filing date
|
|
|
4.6
|
8-K
|
1-4955
|
4(g)
|
3/22/04
|
|
|
4.7
|
8-K
|
1-4955
|
4(l)
|
3/22/04
|
|
|
4.8
|
8-K
|
1-4955
|
4(h)
|
3/22/04
|
|
|
4.9
|
8-K
|
1-4955
|
4(j)
|
3/22/04
|
|
|
4.10
|
8-K
|
1-4955
|
4(i)
|
3/22/04
|
|
|
4.11
|
8-K
|
1-4955
|
4(k)
|
3/22/04
|
|
|
4.12
|
8-K
|
1-4955
|
4(m)
|
3/22/04
|
|
|
4.13
|
8-K
|
1-4955
|
4(a)
|
4/23/12
|
|
|
4.14
|
8-K
|
1-4955
|
4(b)
|
4/23/12
|
|
|
4.15
|
8-K
|
1-4955
|
4(c)
|
4/23/12
|
|
|
4.16
|
8-K
|
1-4955
|
4
|
9/14/12
|
|
|
4.17
|
8-K
|
1-4955
|
4(a)
|
10/7/13
|
|
|
4.18
|
8-K
|
1-4955
|
4(b)
|
10/7/13
|
|
|
4.19
|
10-Q
|
1-4955
|
4
|
11/7/13
|
|
|
4.20
|
8-K
|
1-4955
|
4(a)
|
10/16/15
|
|
|
4.21
|
8-K
|
1-4955
|
4(b)
|
10/16/15
|
|
|
4.22
|
8-K
|
1-4955
|
4(c)
|
10/16/15
|
|
|
4.23
|
8-K
|
1-4955
|
4
|
12/19/16
|
|
|
10.1(a)
|
Power Purchase Agreement between Kalaeloa Partners, L.P., and Hawaiian Electric dated October 14, 1988.
|
10-Q
|
1-4955
|
10(a)
|
11/14/88
|
|
10.1(b)
|
Amendment No. 1 to Power Purchase Agreement between Hawaiian Electric and Kalaeloa Partners, L.P., dated June 15, 1989.
|
10-Q
|
1-4955
|
10(c)
|
8/14/89
|
|
10.1(c)
|
Lease Agreement between Kalaeloa Partners, L.P., as Lessor, and Hawaiian Electric, as Lessee, dated February 27, 1989.
|
10-Q
|
1-4955
|
10(d)
|
8/14/89
|
|
10.1(d)
|
Restated and Amended Amendment No. 2 to Power Purchase Agreement between Hawaiian Electric and Kalaeloa Partners, L.P., dated February 9, 1990.
|
10-K
|
1-4955
|
10.2(c)
|
3/27/90**
|
|
10.1(e)
|
Amendment No. 3 to Power Purchase Agreement between Hawaiian Electric and Kalaeloa Partners, L.P., dated December 10, 1991.
|
10-K
|
1-4955
|
10.2(e)
|
3/24/92
|
|
10.1(f)
|
10-Q
|
1-4955
|
10.1
|
11/8/00
|
|
|
10.1(g)
|
10-Q
|
1-4955
|
10.3
|
11/5/04
|
|
|
10.1(h)
|
10-Q
|
1-4955
|
10.4
|
11/5/04
|
Exhibit no.
|
Description
|
Form
|
File Number
|
Exhibit #
|
Filing date
|
|
|
10.1(i)
|
10-Q
|
1-4955
|
10
|
11/4/16
|
|
|
10.2(a)
|
Power Purchase Agreement between AES Barbers Point, Inc. and Hawaiian Electric, entered into on March 25, 1988.
|
10-Q
|
1-4955
|
10(a)
|
5/16/88
|
|
10.2(b)
|
Agreement between Hawaiian Electric and AES Barbers Point, Inc., pursuant to letters dated May 10, 1988 and April 20, 1988.
|
10-K
|
1-4955
|
10.4
|
3/31/89
|
|
10.2(c)
|
Amendment No. 1, entered into as of August 28, 1988, to Power Purchase Agreement between AES Barbers Point, Inc. and Hawaiian Electric.
|
10-Q
|
1-4955
|
10
|
11/13/89
|
|
10.2(d)
|
Hawaiian Electric’s Conditional Notice of Acceptance to AES Barbers Point, Inc. dated January 15, 1990.
|
10-K
|
1-4955
|
13(c)
|
3/27/90**
|
|
10.2(e)
|
10-K
|
1-4955
|
10.2(e)
|
3/9/04
|
|
|
10.3(a)
|
Purchase Power Contract between Hawaii Electric Light and Thermal Power Company dated March 24, 1986.
|
10-Q
|
1-4955
|
10(a)
|
8/14/89
|
|
10.3(b)
|
Firm Capacity Amendment between Hawaii Electric Light and Puna Geothermal Venture (assignee of AMOR VIII, who is the assignee of Thermal Power Company) dated July 28, 1989 to Purchase Power Contract between Hawaii Electric Light and Thermal Power Company dated March 24, 1986.
|
10-Q
|
1-4955
|
10(b)
|
8/14/89
|
|
10.3(c)
|
Amendment made in October 1993 to Purchase Power Contract between Hawaii Electric Light and Puna Geothermal Venture dated March 24, 1986, as amended.
|
10-K
|
1-4955
|
10.5(b)
|
3/27/98
|
|
10.3(d)
|
Third Amendment dated March 7, 1995 to the Purchase Power Contract between Hawaii Electric Light and Puna Geothermal Venture dated March 24, 1986, as amended.
|
10-K
|
1-4955
|
10.5(c)
|
3/27/98
|
|
10.3(e)
|
Performance Agreement and Fourth Amendment dated February 12, 1996 to the Purchase Power Contract between Hawaii Electric Light and Puna Geothermal Venture dated March 24, 1986, as amended.
|
10-K
|
1-4955
|
10.5(b)
|
3/25/96
|
|
10.3(f)
|
10-K
|
1-4955
|
10.4(f)
|
2/17/12
|
|
|
10.3(g)
|
10-K
|
1-4955
|
10.4(g)
|
2/17/12
|
|
|
10.4(a)
|
Power Purchase Agreement between Encogen Hawaii, L.P. and Hawaii Electric Light dated October 22, 1997 (but with the following attachments omitted: Attachment C, “Selected portions of the North American Electric Reliability Council Generating Availability Data System Data Reporting Instructions dated October 1996” and Attachment E, “Form of the Interconnection Agreement between Encogen Hawaii, L.P. and Hawaii Electric Light,” which is provided in final form as Exhibit 10.6(b)).
|
10-K
|
1-4955
|
10.7
|
3/27/98
|
|
10.4(b)
|
Interconnection Agreement between Encogen Hawaii, L.P. and Hawaii Electric Light dated October 22, 1997.
|
10-K
|
1-4955
|
10.7(a)
|
3/27/98
|
|
10.4(c)
|
Amendment No. 1, executed on January 14, 1999, to Power Purchase Agreement between Encogen Hawaii, L.P. and Hawaii Electric Light dated October 22, 1997.
|
10-K
|
1-4955
|
10.7(b)
|
3/23/99
|
*
|
10.4(d)
|
|
|
|
|
|
|
10.5
|
10-Q
|
1-4955
|
10.1
|
5/4/16
|
|
|
10.6
|
10-Q
|
1-4955
|
10.2
|
5/4/16
|
|
|
10.7
|
10-Q
|
1-4955
|
10.3
|
5/4/16
|
|
|
10.8(a)
|
10-K
|
1-4955
|
10.13
|
3/23/01
|
HAWAIIAN ELECTRIC INDUSTRIES, INC.
|
|
HAWAIIAN ELECTRIC COMPANY, INC.
|
||||
|
|
(Registrant)
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By
|
|
/s/ Gregory C. Hazelton
|
|
By
|
|
/s/ Tayne S. Y. Sekimura
|
|
|
Gregory C. Hazelton
|
|
|
|
Tayne S. Y. Sekimura
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer of HEI)
|
|
|
|
(Principal Financial Officer of Hawaiian Electric)
|
|
|
|
|
|
|
|
Date:
|
|
March 1, 2018
|
|
Date:
|
|
March 1, 2018
|
Signature
|
|
Title
|
|
|
|
/s/ Constance H. Lau
|
|
President of HEI and Director of HEI
|
Constance H. Lau
|
|
Chairman of the Board of Directors of Hawaiian Electric
|
|
|
(Chief Executive Officer of HEI)
|
|
|
|
/s/ Alan M. Oshima
|
|
President and Director of Hawaiian Electric
|
Alan M. Oshima
|
|
(Chief Executive Officer of Hawaiian Electric)
|
|
|
|
|
|
|
/s/ Gregory C. Hazelton
|
|
Executive Vice President and Chief Financial Officer of HEI
|
Gregory C. Hazelton
|
|
(Principal Financial and Accounting Officer of HEI)
|
|
|
|
|
|
|
/s/ Tayne S. Y. Sekimura
|
|
Senior Vice President and
|
Tayne S. Y. Sekimura
|
|
Chief Financial Officer of Hawaiian Electric
|
|
|
(Principal Financial Officer of Hawaiian Electric)
|
|
|
|
/s/ Patsy H. Nanbu
|
|
Controller of Hawaiian Electric
|
Patsy H. Nanbu
|
|
(Principal Accounting Officer of Hawaiian Electric)
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
/s/ Kevin M. Burke
|
|
Director of Hawaiian Electric
|
Kevin M. Burke
|
|
|
|
|
|
|
|
|
/s/ Richard J. Dahl
|
|
Director of HEI and Hawaiian Electric
|
Richard J. Dahl
|
|
|
|
|
|
|
|
|
/s/ Thomas B. Fargo
|
|
Director of HEI
|
Thomas B. Fargo
|
|
|
|
|
|
|
|
|
/s/ Peggy Y. Fowler
|
|
Director of HEI
|
Peggy Y. Fowler
|
|
|
|
|
|
|
|
|
/s/ Timothy E. Johns
|
|
Director of Hawaiian Electric
|
Timothy E. Johns
|
|
|
|
|
|
|
|
|
/s/ Micah A. Kane
|
|
Director of Hawaiian Electric
|
Micah A. Kane
|
|
|
|
|
|
|
|
|
/s/ Bert A. Kobayashi, Jr.
|
|
Director of Hawaiian Electric
|
Bert A. Kobayashi, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Keith P. Russell
|
|
Director of HEI
|
Keith P. Russell
|
|
|
|
|
|
|
|
|
/s/ James K. Scott
|
|
Director of HEI
|
James K. Scott
|
|
|
|
|
|
|
|
|
/s/ Kelvin H. Taketa
|
|
Director of HEI and Hawaiian Electric
|
Kelvin H. Taketa
|
|
|
|
|
|
|
|
|
/s/ Barry K. Taniguchi
|
|
Director of HEI
|
Barry K. Taniguchi
|
|
|
|
|
|
|
|
|
/s/ Jeffrey N. Watanabe
|
|
Chairman of the Board of Directors of HEI and director of Hawaiian Electric
|
Jeffrey N. Watanabe
|
|
|
Legal Plan Name
|
FPRS Plan Number
|
Plan Type
(reference only)
|
Hawaiian Electric Industries Retirement Savings Plan
|
56566
|
Qualified Plan
|
American Savings Bank 401(k) Plan
|
75615
|
Qualified Plan
|
By:
/s/ James A. Ajello
|
|
By:
/s/ Chester A. Richardson
|
(Signature of Authorized Individual)
|
|
(Signature of Authorized Individual)
|
Name:
James A. Ajello
|
|
Name:
Chester A. Richardson
|
(Printed Name)
|
|
(Printed Name)
|
Title:
Chairman
|
|
Title:
Secretary
|
Date:
6/12/15
|
|
Date:
6/12/15
|
By:
/s/ Danny T. Dolan
|
(Signature of Fidelity Authorized Individual)
|
Name:
Danny T. Dolan
|
(Printed Name)
|
Title:
V. P.
|
Date:
6/23/2015
|
Plan #
|
Live Date
|
Ticker
|
Legal Fund Name
|
FPRS Code
|
VRS Code
|
Redemption/Short-Term Trading Fees
|
56566
|
08/03/2015
|
FVLKX
|
Fidelity® Value Fund - Class K
|
2102
|
02102
|
N/A
|
75615
|
08/03/2015
|
FVLKX
|
Fidelity® Value Fund - Class K
|
2102
|
02102
|
N/A
|
•
|
Except to the extent specifically indicated otherwise herein with respect to a fund or funds, all of the new investment options will be opened for all money-in and money-out transactions, and will not be restricted from any transaction.
|
•
|
Fund Performance will be made available on NetBenefits and in participant statements.
|
•
|
Fidelity displays certain investment performance-related and holdings-based data for investment products on NetBenefits that may be based on data received from various third-party sources including but not limited to Morningstar, LLC, investment managers, trustees or plan sponsors. Depending on such source and type of underlying data and the particular investment product, information may not be available or updated on NetBenefits for several days after receipt; for custom investment options where past performance is not available, at least thirty days may be required for performance history to be generated and calculated.
|
•
|
The Standard Performance will be made available:
|
Standard Performance Options
|
NetBenefits
|
1, 3, 5, 10 Year Average Annual
|
Life of Fund Average Annual
|
3 Month Cumulative
|
Year to Date Cumulative
|
•
|
The new funds will be added to the redemption methods for all withdrawals, loans and/or fee processing, as currently provided in the Agreement and Plan Administration Manual:
|
•
|
For redemption methods and/or fee processing using a hierarchal method, the new funds will be added in the last position; and/or,
|
•
|
For redemption methods and/or fee processing using a pro-rata method, the new funds will be added to the list.
|
Plan #
|
Request Type- Redirection/ Reallocation/ Both
|
Re-Direct Trade Date
|
Re-Allocate Trade Date
|
Fidelity (FROM) FPRS Code & Ticker
|
From Legal Name
|
è
|
To Legal Name
|
Fidelity (TO) FPRS Code & Ticker
|
Redemption/ Short-Term Trading Fees on From Fund
|
56566
|
Both
|
08/03/2015
|
08/03/2015
|
OLSU PIMVX
|
Virtus Contrarian Value Fund Class I
|
è
|
Fidelity® Value Fund - Class K
|
2102 FVLKX
|
N/A
|
75615
|
Both
|
08/03/2015
|
08/03/2015
|
OLSU PIMVX
|
Virtus Contrarian Value Fund Class I
|
è
|
Fidelity® Value Fund - Class K
|
2102 FVLKX
|
N/A
|
•
|
Except to the extent specifically indicated otherwise herein with respect to a fund or funds, all of the “From Fund” investment options will be closed for all money-in and money-out transactions, and will be restricted from all transactions.
|
•
|
Prospectus, if available, will be automatically generated according to the participants’ mail preference as a result of this reallocation.
|
•
|
All assets will be liquidated and processed as a cash transaction.
|
•
|
Participants enrolled in the Auto Rebalance service offered by the Plan will need to re-enroll if any of the closing funds are included in their rebalance order. A notification of this service will be included in the participant communication.
|
(1)
|
Effective January 1, 2018
, amending Schedule B,
Fee Schedule
, to restate the “Annual Administration Fee for Core Services” section, in its entirety, as follows:
|
Core Fees
|
Fixed Basis Points Fee
|
Annual Administration Fee for Core Services
This fee is billed quarterly.
|
5.5 basis points on total Plan assets, subject to the offsets described below
|
(2)
|
Effective January 1, 2018
, amending Schedule B,
Fee Schedule
, to restate the first paragraph in the “Offsets” section, in its entirety, as follows:
|
(3)
|
Effective January 1, 2018
, amending Schedule B,
Fee Schedule
, to restate the first paragraph in the “Revenue Credit” section, in its entirety, as follows:
|
(4)
|
Effective at the close of business (4:00p.m. ET) on January 1, 2018
, amending the “investment options” section of Schedule C,
Investment Options
, to add the following:
|
•
|
Fidelity
®
Diversified International K6 Fund (2947)
|
(5)
|
Effective at the close of business (4:00p.m. ET) on January 2, 2018
, amending the “investment options” section of Schedule C,
Investment Options
, to delete the following:
|
•
|
Fidelity
®
Diversified International Fund - Class K (2082)
|
(6)
|
Effective January 2, 2018
, restating Schedule C,
Investment Options
, in its entirety, as attached hereto.
|
HAWAIIAN ELECTRIC INDUSTRIES, INC.
|
FIDELITY MANAGEMENT TRUST
|
||
AND AMERICAN SAVINGS BANK, F.S.B
|
COMPANY
|
|
|
BY: HAWAIIAN ELECTRIC INDUSTRIES,
|
|
|
|
INC. PENSION INVESTMENT COMMITTEE
|
|
|
|
|
|
|
|
By:
/s/ Greg C. Hazelton
|
11/20/2017
|
By:
/s/ Greg Gardiner
|
11/21/2017
|
Authorized Signatory
|
Date
|
FMTC Authorized Signatory
|
Date
|
Name: Greg C. Hazelton
|
|
|
|
Title: EVP and Chief Financial Officer
|
|
|
|
|
|
|
|
By:
/s/ Kurt Murao
_
|
11/20/2017
|
|
|
Authorized Signatory
|
Date
|
|
|
Name: Kurt Murao
|
|
|
|
Title: Secretary
|
|
|
|
•
|
Fidelity
®
500 Index Fund - Institutional Class (2327)
|
•
|
Fidelity
®
Diversified International K6 Fund (2947)
|
•
|
Fidelity
®
Extended Market Index Fund - Premium Class (1521)
|
•
|
Fidelity Freedom
®
Index 2005 Fund - Institutional Premium Class (2765)
|
•
|
Fidelity Freedom
®
Index 2010 Fund - Institutional Premium Class (2766)
|
•
|
Fidelity Freedom
®
Index 2015 Fund - Institutional Premium Class (2767)
|
•
|
Fidelity Freedom
®
Index 2020 Fund - Institutional Premium Class (2768)
|
•
|
Fidelity Freedom
®
Index 2025 Fund - Institutional Premium Class (2769)
|
•
|
Fidelity Freedom
®
Index 2030 Fund - Institutional Premium Class (2770)
|
•
|
Fidelity Freedom
®
Index 2035 Fund - Institutional Premium Class (2771)
|
•
|
Fidelity Freedom
®
Index 2040 Fund - Institutional Premium Class (2772)
|
•
|
Fidelity Freedom
®
Index 2045 Fund - Institutional Premium Class (2773)
|
•
|
Fidelity Freedom
®
Index 2050 Fund - Institutional Premium Class (2774)
|
•
|
Fidelity Freedom
®
Index 2055 Fund - Institutional Premium Class (2775)
|
•
|
Fidelity Freedom
®
Index 2060 Fund - Institutional Premium Class (2776)
|
•
|
Fidelity Freedom
®
Index Income Fund - Institutional Premium Class (2764)
|
•
|
Fidelity
®
Government Money Market Fund - Premium Class (2741)
|
•
|
Fidelity
®
Puritan
®
Fund - Class K (2100)
|
•
|
Fidelity
®
U.S. Bond Index Fund - Institutional Class (2325)
|
•
|
Fidelity
®
Value Fund - Class K (2102)
|
•
|
HEI Common Stock Fund (TCHE) (Hawaiian Electric Industries Retirement Savings Plan only)
|
•
|
HEI Common Stock Fund (TVFM) (American Savings Bank 401(k) Plan only)
|
•
|
Invesco Comstock Fund Class R6 (OKM4)
|
•
|
Morgan Stanley Institutional Fund, Inc. International Equity Portfolio Class I (OFAI)
|
•
|
Nuveen Mid Cap Growth Opportunities Fund Class I (OKJY)
|
•
|
PIMCO Total Return Fund Institutional Class (OF1P)
|
•
|
T. Rowe Price Growth Stock Fund (OF4J)
|
•
|
T. Rowe Price Small-Cap Stock Fund (OFTH)
|
•
|
Vanguard Total International Stock Index Fund Admiral Shares (OS4X)
|
Legal Plan Name
|
FPRS Plan Number
|
Plan Type
(reference only)
|
Hawaiian Electric Industries Retirement Savings Plan
|
56566
|
Qualified Plan
|
American Savings Bank 401(k) Plan
|
75615
|
Qualified Plan
|
HAWAIIAN ELECTRIC INDUSTRIES, INC. AND AMERICAN SAVINGS BANK, F.S.B
|
|
BY: HAWAIIAN ELECTRIC INDUSTRIES, INC. PENSION INVESTMENT COMMITTEE
|
|
|
|
By:
/s/ Kurt Murao
|
By:
/s/ Greg C. Hazelton
|
(Signature of Authorized Individual)
|
(Signature of Authorized Individual)
|
Name: Kurt Murao
|
Name: Greg C. Hazelton
|
(Printed Name)
|
(Printed Name)
|
Title: VP - Legal & Administration and
|
Title: EVP and Chief Financial Officer
|
Corporate Secretary
|
|
Date: 11/20/2017
|
Date: 11/20/2017
|
Fidelity Management Trust Company
|
|
By:
/s/ Jake Beil
|
|
(Signature of Fidelity Authorized Individual)
|
|
Name: Jake Beil
|
|
(Printed Name)
|
|
Title: Director, Implementation
|
|
Date: 12/4/2017
|
|
Plan
#
|
Live Date
|
Ticker
|
Legal Fund Name
|
FPRS
Code
|
VRS
Code
|
Redemption/Short-Term
Trading Fees
|
56566
|
1/2/2018
|
FKIDX
|
Fidelity® Diversified International K6 Fund
|
2947
|
02947
|
N/A
|
75615
|
1/2/2018
|
FKIDX
|
Fidelity® Diversified International K6 Fund
|
2947
|
02947
|
N/A
|
•
|
Except to the extent specifically indicated otherwise herein with respect to a fund or funds, all of the new investment options will be opened for all money-in and money-out transactions, and will not be restricted from any transaction.
|
•
|
Fund Performance will be made available on NetBenefits and in participant statements. Fund Performance is also available through a Customer Service Representative.
|
•
|
Fidelity displays certain investment performance-related and holdings-based data for investment products on NetBenefits that may be based on data received from various third-party sources including but not limited to Morningstar, LLC, investment managers, trustees or plan sponsors. Depending on such source and type of underlying data and the particular investment product, information may not be available or updated on NetBenefits for several days after receipt; for custom investment options where past performance is not available, at least thirty days may be required for performance history to be generated and calculated.
|
•
|
The following Standard Performance will be made available, where applicable:
|
•
|
1, 3, 5, 10 Year Average Annual
|
•
|
Life of Fund Average Annual
|
•
|
3 Month Cumulative
|
•
|
Year-To-Date Cumulative
|
•
|
52 Week High
|
•
|
52 Week Low
|
•
|
The new fund(s) will be added to the redemption methods for all withdrawals, loans and/or fee processing, as currently provided in the Master Trust Agreement and Plan Administration Manual:
|
•
|
For redemption methods and/or fee processing using hierarchal method, the new fund(s) will be added in the last position; and/or,
|
•
|
For redemption methods and/or fee processing using a pro-rata method, the new fund(s) will be added to the list.
|
Plan
#
|
Request
Type-
Redirection/
Reallocation/
Both
|
Re-Direct
Trade
Date
|
Re-
Allocate
Trade
Date
|
Fidelity
(FROM)
FPRS
Code &
Ticker
|
From
Legal
Name
|
ð
|
To
Legal
Name
|
Fidelity
(TO)
FPRS
Code &
Ticker
|
Redemption/
Short-Term
Trading Fees
on From
Fund
|
56566
|
Both
|
1/2/2018
|
1/2/2018
|
2082 FDIKX
|
Fidelity® Diversified International Fund - Class K
|
ð
|
Fidelity® Diversified International K6 Fund
|
2947 FKIDX
|
N/A
|
75615
|
Both
|
1/2/2018
|
1/2/2018
|
2082 FDIKX
|
Fidelity® Diversified International Fund - Class K
|
ð
|
Fidelity® Diversified International K6 Fund
|
2947 FKIDX
|
N/A
|
•
|
Except to the extent specifically indicated otherwise herein with respect to a fund or funds, all of the “From Fund” investment options will be closed for all money-in and money-out transactions, and will be restricted from all transactions.
|
•
|
All assets will be liquidated and processed as a cash transaction.
|
•
|
If participants have an investment option(s) included in an Automatic Rebalance mix that is subsequently replaced by another investment option(s), their Automatic Rebalance mix will automatically be updated to replace the old investment option(s) with the new investment option(s).
|
•
|
If participants have an investment option included in Automatic Rebalance mix which no longer accepts new contributions (commonly known as a “Frozen Fund”), they will be unenrolled from the service at the time of the fund change. Participants can always re-enroll in the service in the future
|
Attachment A.
|
|
Diagram of Interconnection
|
Attachment B.
|
|
Milestone Events
|
Attachment C.
|
|
Selected Portions of NERC GADS
|
Attachment D.
|
|
Facility Functional Description
|
Attachment E.
|
|
Interconnection Agreement
|
Attachment F.
|
|
Facility Location and Layout
|
Attachment G.
|
|
(Reserved)
|
Attachment H.
|
|
Qualified Independent Engineering Companies
|
Attachment I.
|
|
Adjustment of Charges
|
Attachment J.
|
|
Required Insurance
|
Attachment K.
|
|
Acceptance and Capacity Testing Procedures
|
Attachment L.
|
|
Unit Incident Report
|
Attachment M.
|
|
Design Information
|
Attachment N.
|
|
[RESERVED]
|
Attachment O.
|
|
Seller’s Permits
|
Attachment P.
|
|
Form of Irrevocable Letter of Credit
|
Attachment Q.
|
|
Form of Nondisturbance and Recognition Agreement
|
Attachment R.
|
|
Seller’s Litigation Schedule
|
Attachment S.
|
|
(Reserved)
|
Attachment T.
|
|
Form of Monthly Progress Report
|
Attachment U.
|
|
Renewable Portfolio Standards
|
1.15 pu ≤ V
|
|
By:
|
/s/ Jay M. Ignacio
|
|
Name:
|
Jay M. Ignacio
|
|
Its:
|
President
|
|
|
|
|
|
|
|
By:
|
/s/ Susan A. Li
|
|
Name:
|
Susan A. Li
|
|
Its:
|
Vice President
|
By:
|
/s/ Harold H. Robinson
|
|
Name:
|
Harold H. Robinson
|
|
Its:
|
Member Board of Managers and Executive VP
|
EVENT
|
MONTHS AFTER
PUC APPROVAL OF AMENDMENT DATE |
Pass boiler hydro test
|
14-Months
|
Commercial Operation Date Deadline
|
18-Months
|
EVENT
|
MONTHS AFTER
PUC APPROVAL OF AMENDMENT DATE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Completion of necessary Emissions Testing
|
18-Months
|
•
|
Fuel processing facility including equipment for handling and storage of logs, chippers, and processed fuel storage.
|
•
|
Biomass boiler, fans, steam turbine, generator with condenser, baghouse, electrostatic precipitator, urea injection system, continuous emissions monitoring system, heat-exchangers, pumps, motor control centers, and condenser cooling water system.
|
•
|
Interconnection equipment including breakers, relays, switches, synchronizing equipment, monitoring equipment, transformers, metering devices and other
|
1.
|
Parallel Operation
|
2.
|
Company-Owned Interconnection Facilities
|
(A)
|
General
. Company shall furnish or construct (or may allow Seller to furnish or construct, in whole or in part), own, operate and maintain all Interconnection Facilities required to interconnect Company System with Facility at 69 kV, up to the Point of Interconnection (collectively, the “
Company‑Owned Interconnection Facilities
”) as described in this Interconnection Agreement.
|
(B)
|
Site
. Where any Company-Owned Interconnection Facilities are to be located on the Site (as defined in PPA), Seller shall provide, at no expense to Company, a location and access acceptable to Company for all such Company-Owned Interconnection Facilities, as well as an easement, license or right of entry to access such Company-Owned Interconnection Facilities. If power sources (120/240VAC) are required, Seller shall provide such sources, at no expense to Company. Two other locations with Company-Owned Interconnection Facilities:
|
(i)
|
Pepeekeo Substation (“
Substation
”): The existing substation presently serving as the connection between Seller’s Facility and the Company System (hereinafter referred to as “
Substation
”). The Substation may serve as the potential “Temporary” Interconnection Facility, if needed, as set forth in this Interconnection Agreement.
|
(ii)
|
Upper Pepeekeo Switchyard (“
Switchyard
”): This new switchyard is being built as a Company-Owned Interconnection Facility for the Facility and shall be designated herein as the “
Switchyard
” in order to differentiate the scope of work requirements as between the Swithchyard and the Substation.
|
(C)
|
Interconnection Requirements Study dated July 16, 2010 and Addendum dated March 29, 2012 (“IRS”)
. The IRS was performed in accordance with the terms of the IRS Letter Agreement to assess the projected interaction of the Facility with the Company System and the results thereof have been incorporated in this Interconnection Agreement as appropriate. Further analysis of the protection requirements will need to be performed by Company or its consultant once Seller updates its electrical plan and single-line diagram, including protection for the possible temporary interconnection.
|
(D)
|
Seller’s Payment Obligations
. Company-Owned Interconnection Facilities for which Seller has agreed to pay in accordance with
Section 4
(Seller Payment to Company for Company-Owned Interconnection Facilities and Review of Facility) include:
|
(i)
|
Acquisition of an approximate 5-acre site at the corner of Hawaii Belt Road and Sugar Mill Road identified as portion of TMK (3) 2-8-007-085, which will be the site for the Switchyard (“
Switchyard Site
”). Such funding shall include the costs of the environmental site assessment, land subdivision work, and any and all costs to acquire the Switchyard Site;
|
(ii)
|
Design and construction of the 69kV drops to interconnect the Switchyard to the existing Puueo-Pepeekeo (“8400”), Wailuku-Pepeekeo (“7400”), Honokaa-Pepeekeo (“7600”), and Hu Honua (Old “8400” line section from Mamalahoa Highway to Pepeekeo Substation) lines. Company shall submit to the PUC an application for a satisfactory PUC Approval of Amendment Order. Part of the procedural schedule for the PUC docket opened for this application may include a public hearing pursuant to HRS 269-27 with regard to the overhead line interconnection. Company shall provide information to the PUC in relation to the public hearing.
|
(iii)
|
Design, construction, and testing of the Switchyard in accordance with
Attachment A
,
Schedule 1
, (New Switchyard Single-Line Drawing (4/13/12)), excluding the 69-34.5kV step-up transformer installation and associated structures, breaker, switches, and relays. The Switchyard shall include items such as the 69kV outdoor circuit breakers, bus, station power systems, enclosed auto-transfer station power switch, 69kV group operated disconnect switches, 69kV dry type potential transformers, 69kV dry type current transformers, bus tubing and/or conductors, connectors, control building with provisions to mount indoor relay panels, 125 volt DC system for controls and protective relaying, control circuits, grounding, support structures, foundations, ductline, handholes, grounding, fencing, and landscaping in accordance with
Section 4
(Seller Payment to Company for Company-Owned Interconnection Facilities and Review of Facility). Protective relay equipment, communication, and setting changes at other substations as determined by the IRS.
|
(a)
|
If needed, interconnection to and testing of a temporary connection at the Substation to allow start-up and operation of Seller’s Facility prior to Commercial Operation Date with completion of the Switchyard to follow as soon as practicable but Switchyard to be completed within 6-months of start of work on temporary connection;
|
(iv)
|
Construction of a 69 kV line extension from the existing Pepeekeo Substation to the Point of Interconnection at the Site;
|
(v)
|
Supervisory control and communications equipment (including but not limited to, SCADA/RTU, microwave, satellite, dedicated phone line(s) and/or any other acceptable communications means (determined by Company), fiber optics, copper cabling, installation of batteries and charger system, etc.);
|
(vi)
|
Protective relays, instrument transformers, and other devices shown in
Attachment A
,
Schedule 1
(New Switchyard Single-Line Drawing (4/13/12)) and
Attachment A
,
Schedule 2
(New Switchyard Relay List and Trip Scheme (4/11/12)). A relay coordination study will be performed by the Company’s engineering consultant and paid by Seller to determine the relay settings for the Switchyard and remote Company switching stations affected by the additional ground fault current contribution and power flow from Seller’s Facility;
|
(vii)
|
69kV revenue meter support infrastructure;
|
(viii)
|
Any additional Interconnection Facilities needed to be installed as a result of final determination of Facility step-up transformer site, final electrical plan and single-line drawings along with the design of Facility to enable Company to complete the protection requirements for the Interconnection Facilities, and be compatible with Good Engineering and Operating Practices.
|
(E)
|
Reserved
|
(F)
|
Reserved
|
(G)
|
Construction of Company-Owned Interconnection Facilities By Seller
:
|
(i)
|
Procurement of the Switchyard Site, including site survey, development of land subdivision application, purchase of the land, fees,
|
(ii)
|
The design, procurement of equipment and material, and construction of the Switchyard at the Switchyard Site. A detailed description of Seller’s responsibilities and scope of Work are set forth in
Attachment B
(Seller’s Responsibilities and Work Scope) to this Interconnection Agreement.
|
(iii)
|
Seller shall submit conceptual drawings, layout, grading plan, equipment and material lists, construction specifications and drawings, equipment documentation and warranties, and a detailed Interconnection Acceptance Test plan to Company for approval on or before 9 months after the PUC Approval of Amendment Date; Company will either approve such submittals and/or provide requested revisions within thirty (30) days.
|
(iv)
|
Seller shall complete site acquisition and use commercially reasonable efforts to obtain permits and approvals and start construction of the Switchyard on or before 12 months after the PUC Approval of Amendment Date.
|
(v)
|
When ready, Seller shall request Company’s Final Inspection of Switchyard. If accepted by Company, Seller shall turn over sufficiently completed, but de-energized, Switchyard to Company upon the Transfer Date, on or before 18 months after the PUC Approval of Amendment Date.
|
(vi)
|
Seller shall be responsible for calibration, assisting with Interconnection Acceptance Test and corrective work related to completion of the commissioning of the Switchyard with such work to be performed after the Transfer Date and energizing of the Facility.
|
(vii)
|
Seller shall design and construct overhead 69 kV lines and poles between Seller’s Facility and Substation, and, upon completion, transfer title, care, custody, and control of such overhead 69kV lines and poles to Company no later than the Transfer Date. Company shall be responsible for the termination of these 69 kV lines.
|
(H)
|
Coordination of Construction
. Prior to initiating work on the plans for the Company-Owned Interconnection Facilities, including civil, structural, and construction drawings, specifications to vendors, vendor approved final drawings and materials lists (collectively, the “
Plans
”), Seller shall meet with Company to discuss the construction of such Company-Owned Interconnection Facilities, including but not limited to subjects concerning coordination of construction milestone dates, agreement on areas of interface design, and Company's design/drawing layout and symbols standards, equipment specifications and construction
|
(I)
|
Plans
. No later than thirty (30) Days before Seller orders materials and equipment for Company-Owned Interconnection Facilities to be constructed by Seller, Seller shall provide Company with the Plans for review and approval. The Plans for Company-Owned Interconnection Facilities to be constructed by Seller shall comply with: (i) all applicable Laws and Hawaii County building code IBC 2006; (ii) Company's design/drawing layout and symbol standards, equipment specifications, and construction specifications and standards, which shall be provided by Company to Seller within forty-five (45) Days of Seller’s request thereof; and (iii) Good Engineering and Operating Practices (collectively, the “
Standards
”).
|
(i)
|
Company Review/Approval of Equipment Orders:
Seller shall provide for Company’s review and approval the detailed specifications for key equipment such as gas circuit breakers, disconnects, transformers, etc., including manufacturer, cost, options, warranties, O&M manuals, drawings, and shipping and handling details.
|
(ii)
|
Company Review/Approval of Construction Drawings and Specifications:
Seller shall provide for Company’s review and approval the construction bid packages for the Switchyard, including drawings and specifications to be included in the construction bid packages.
|
(J)
|
Company’s Approval of the Plans
. Unless otherwise agreed to by the Parties, Company shall have thirty (30) Days following receipt of the Plans to review, comment on, and approve the Plans, including but not limited to verification in writing to Seller that the Plans comply with the Standards, which verification shall not be unreasonably withheld. Company may request in writing a response from Seller to its comments and Seller shall respond in writing within thirty (30) Days of such request by providing: (i) its justification for why its Plans are acceptable; or (ii) changes in the Plans responsive to Company's comments. Seller shall not commence procurement and/or construction of the Company-Owned Interconnection Facilities to be constructed by Seller before the Company approves and accepts in writing each set of Plans.
|
(K)
|
Company Inspection
. Seller’s Work shall be subject to Company inspections to ensure that the Work is done in accordance with the Standards. Company inspectors will be allowed access to the construction sites for inspections and to monitor the Work at all times. Company inspectors shall have the authority to work with Seller’s appropriate construction supervisor to stop any work that does not meet the Standards. All equipment and materials used in Company-Owned Interconnection Facilities to be constructed by Seller and/or its Contractors shall meet the Standards.
|
(L)
|
Workmanship
. In selecting employees to undertake the Work under this Interconnection Agreement, Seller and/or its Contractors shall select only those persons who are qualified by the necessary education, training and experience to provide high quality performance of the particular Work for which each such employee is responsible. Seller and Contractor personnel shall perform their Work in a responsible and quality workmanship manner.
|
(M)
|
Materials and Equipment
. All materials and equipment used in the construction of the Company-Owned Interconnection Facilities shall be subject to Company’s approval in accordance with Section 2.(J) Company’s Approval of the Plans, shall be new, utility grade, of first class quality, and guaranteed by Seller and Contractors to be fit for the specific purpose for which the material is used. Materials and/or equipment not approved by Company may be rejected and require replacement with Company approved materials and/or equipment.
|
(N)
|
Warranty - Correction of Defective Work
. Seller acknowledges its absolute responsibility for insuring that the materials and procedures used in the performance of its obligations under this Interconnection Agreement are sufficient to satisfactorily accomplish the Work, and that review and approval by Company of any drawings, specifications or other documents prepared by Seller in the performance of the Work shall not relieve Seller, its Contractor(s) or any of its subcontractors or vendors of its or their professional responsibility for the Work. Seller shall promptly correct without expense to Company all defective Work caused by: (a) inadequate or defective materials or workmanship furnished by Seller or its Contractor; (b) any failures of materials or workmanship to meet the Standards established herein; or (c) any other act or omission by Seller or its Contractors. Seller shall make such corrections of defective Work upon written notice thereof for any such defects that appear within two (2) years of Company's acceptance of the Work performed hereunder. If any of the Work fails to withstand reasonably anticipated operating conditions encountered within one (1) year of Company's acceptance of the Work, then such failure shall be presumed to be the result of defects in materials and workmanship for which Contractor is responsible.
|
(O)
|
Right to Reject.
Due to the critical nature of Company’s operations, Seller agrees that if Company, in its sole discretion and after reasonable consultation with Seller, determines that any of Seller’s employees, Seller’s Contractors or Contractors’ employee, or material or equipment provided under this Interconnection Agreement shall be unsuitable for the performance of the Work, or that the continued presence of such employee, material or equipment at the Work site is not consistent with the best interests of Company, then in such an instance Company may request that Seller remove such employee, material or equipment from the Work and Seller shall forthwith comply with this request. Seller will then immediately replace such employee, material or equipment with an employee, material or equipment that fully meets the standards under this Interconnection Agreement and will do so at no cost to Company.
|
(P)
|
Reserved
.
|
(Q)
|
Interconnection Acceptance Test Procedures
.
|
(i)
|
No later than thirty (30) Days prior to conducting the Interconnection Acceptance Test, Company and Seller shall agree on a written protocol setting out the detailed procedure and criteria for passing the Interconnection Acceptance Test.
Schedule 4
(Interconnection Acceptance Test General Criteria) provides general criteria to be included in the written protocol for the Interconnection Acceptance Test. Seller shall provide Company with at least seven (7) Days advance written notice of the Interconnection Acceptance Test. Seller shall provide a final set of as-built drawings prior to the Interconnection Acceptance Test. No electric energy will be delivered from Seller to Company during this Interconnection Acceptance Test. Within fifteen (15) Business Days of successful completion of the Interconnection Acceptance Test, Seller shall provide Company with complete written results of the Interconnection Acceptance Test. Within seven (7) Business days of receipt of the written results of the Interconnection Acceptance Test, Company shall notify Seller in writing whether the Interconnection Acceptance Test has been passed and the date upon which the Interconnection Acceptance Test was passed.
|
(ii)
|
Company will coordinate and conduct the Interconnection Acceptance Test with Seller, and Seller shall timely correct any deficiencies identified during the Interconnection Acceptance Test. Seller will be responsible for the cost of Company personnel (and/or Company contractors) performing the duties (such as reviewing the Plans and reviewing the construction) necessary for Company-Owned Interconnection Facilities to be constructed by Seller (and/or its Contractors). If Company (i) does not make any inspection or test, (ii) does not discover defective workmanship, materials or equipment, or (iii) accepts Company-Owned Interconnection Facilities (that were constructed by Seller and or its Contractors), such action or inaction shall not relieve Seller from its obligation to do and complete the work in accordance with the Plans approved by Company
|
(iii)
|
A separate Interconnection Acceptance Test will be required for the temporary connection, if needed, following the same protocols of the Interconnection Acceptance Test.
|
(R)
|
Commercial Operation Date Deadline
. Construction of the Interconnection Facilities and Interconnection Acceptance Test shall be completed in accordance with the requirements of this Interconnection Agreement and the PPA by 60-days prior to the Commercial Operation Date Deadline, as extended for Force Majeure, if applicable.
|
(i)
|
Seller agrees to use commercially reasonable efforts to complete Switchyard and turn-over to Company for energizing and the Interconnection Acceptance Test in advance of the Facility’s Acceptance Test.
|
(ii)
|
If Seller and Company agree that the Switchyard will not be complete by the Commercial Operation Date Deadline, Company shall make temporary provisions for the interconnection of the Facility through the use of the Substation at least 60-days prior to energizing the Facility to the grid, in a manner satisfactory to Company, until such Interconnection Facility is completed.
|
(iii)
|
Seller must notify Company at least one hundred twenty (120) Days prior to the Commercial Operation Date Deadline that the use of the Substation for a temporary interconnection of the Facility will be required.
|
(iv)
|
Construction and testing of the Switchyard shall be completed as soon as practicable; in any event, the Switchyard must be completed within six (6) months of the start of work on the temporary connection.
|
3.
|
Seller-Owned Interconnection Facilities
|
(A)
|
Single-Line Diagram, Relay List, Relay Settings and Trip Scheme
. A preliminary single-line diagram, relay list, relay settings, and trip scheme of the Switchyard has been attached to this Interconnection Agreement as
Attachment A, Schedule 1
(New Switchyard Single-Line Drawing (4/13/12)) and
Attachment A, Schedule 2
( New Switchyard Relay List And Trip Scheme (4/11/12)). The Facility’s single-line diagram has not been finalized as of the Execution Date and when provided, the protection schemes and trip settings shall conform with the requirements of
Section 3.2(A)(6)
(Facility Protection Equipment) and
Section 3.2(B)(3)
(Protective Equipment) of the PPA. A final single-line drawing, relay list and trip scheme of the Facility shall, after having obtained prior written consent from Company, be attached as labeled "Final"
Attachment A, Schedule 3
(Facility Single-Line Drawing) and “Final”
Attachment A, Schedule 4
(Facility Relay List and Trip Scheme) to this Agreement and made a part hereof on the Commercial Operation Date. After the Commercial Operation Date, no changes shall be made to the "Final"
Attachment A, Schedule 3
(Facility Single-Line Drawing) and “Final”
Attachment A, Schedule 4
(Facility Relay List and Trip Scheme) without the prior written consent of Seller and Company. The single-line diagrams shall expressly identify the Point of Interconnection of Facility to Company System. Seller agrees that no material changes or additions to Facility as reflected in the final single-line diagram, relay list and trip scheme shall be made without Seller first having obtained prior written consent from Company. If any changes in or additions to the Facility, records and operating procedures are required by Company, Company shall specify such changes or additions to Seller in writing,
|
(B)
|
Certain Specifications for the Facility
|
(i)
|
Seller shall furnish, install, operate and maintain the Facility including breakers, relays, switches, synchronizing equipment, monitoring equipment and control and protective devices approved by Company as suitable for parallel operation of the Facility with Company System in accordance with the terms of the PPA and this Agreement. The Facility shall be accessible at all times to authorized Company personnel.
|
(ii)
|
The Facility shall include:
|
(a)
|
The Fuel processing, biomass boiler and electrical equipment as described in
Attachment D
of the Power Purchase Agreement.
|
(b)
|
13.8 kV circuit breaker capable of three (3) cycle clearing and equipped with MRCTs as shown on Schedule 1 with 2000:5 ratio and C400 accuracy class or higher.
|
(c)
|
13.8kV/69kV Step up transformer, 20/27/33MVA OA/OA/FA rating, Wye-grounded high voltage to Delta low voltage connected windings, with adequate high voltage taps to allow generator to export power at a power factor range indicated in Article 2. Transformer shall have one set of 600/5 multi-ratio current transformers with accuracy C800 for the ground neutral overcurrent relay protection (Device 50/51N); step-up transformer equipped with high voltage and low voltage lightning arresters mounted on brackets close to the transformer terminals.
|
(d)
|
Lightning arresters mounted on the 69KV deadline line structure or metering structure (3) rated at 54kV.
|
(e)
|
Dial-up telephone line installed close to 69 kV metering cabinet to allow remote metering reading by Company. Seller will be responsible for the installation and maintenance cost of the telephone line. This telephone line may be shared with other existing telephone lines
|
(f)
|
69 kV manual disconnect at step-up transformer enclosure
|
(g)
|
69 kV metering devices (Primary & Backup) connected to one set of 69kV potential transformers (“PTs”) and
|
(a)
|
Seller to provide documentation on dry type metering PTs and dry type CTs to verify metering class construction and accuracy.
|
(h)
|
25 kV class cable with normal insulation or 15 kV class cable with 100% insulation required for reliable generator operation on the delta configured side of the step-up transformer. Additional insulation required to withstand the rise in potential on the un-faulted phases during a single-line to ground fault. Install associated ductline and handhold from Seller’s step-up transformer to Seller’s plant switchgear.
|
(i)
|
Communication system including fiber cable and communication equipment to interface to Seller’s Control System to allow Company to remotely monitor and control the load and power factor of the Facility. Seller’s Control System shall include, but not be limited to, a demarcation cabinet, ancillary equipment and software necessary for Seller to connect to Company’s Remote Terminal Unit (“
RTU
”), which shall provide the control signals to Facility and send feedback status and analogs to Company’s EMS including, at a minimum, the following outputs: net generating facility separate MW and Mvar transducers (measured at the Point of Interconnection), separate generator gross MW and Mvar transducers, upper MW limit for remote dispatch control (equal to Available Capacity), low MW limit for remote dispatch control, ramp rate under remote dispatch control, Mvar high and low limit based on unit capability curve at present MW, enable/disable status for remote dispatch control, meter loss of potential alarm, Seller’s 13.8 kV breaker open/close status, and other control functions that need to be interfaced with the RTU (MW raise/lower input from Company EMS, Voltage Target Setpoint Raise/Lower from Company EMS). The separate MW
|
(j)
|
A power source to Seller’s Control System that is immune to system transients which may be the plant battery, a separate Uninterruptible Power Supply, or equivalent.
|
(k)
|
Protective relays at Seller's Facility per
Attachment A, Schedule 1
(New Switchyard Single-Line Drawing (4/13/12)) and
Attachment A, Schedule 2
( New Switchyard Relay List And Trip Scheme (4/11/12)). In the event of any conflict between the specifications, the aforesaid Attachment A, Schedule 1 and Attachment A, Schedule 2 shall control. All relay settings to shall be stamped by Seller's State of Hawaii licensed electrical engineer. Relay setting to be implemented by Seller's licensed electrical contractor and verified by Company. The relays are:
|
(1)
|
Step up transformer differential relay to detect electrical faults within the step up transformer (SEL-387E) which will trip the 69 kV breakers in the Switchyard and the 13.8 kV breaker in Seller's Facility.
|
(2)
|
Step up transformer neutral ground overcurrent relay (device 350N/351N) and transformer sudden pressure relay (device 63) to detect faults within the step up transformer and trip the 69 kV breakers in the Switchyard and the 13.8 kV breaker in Seller's Facility.
|
(3)
|
Phase overcurrent relays (3) on the low voltage side of the step-up transformer (device 350/351) to trip the 13.8 kV circuit breaker for faults below the low voltage bushing.
|
(4)
|
Breaker failure relaying as shown on Schedule 1 and 2. These devices are SEL-501 breaker failure relays or equivalent.
|
(l)
|
Seller's generating facility switchgear and protective relays including phase overvoltage (device 59), undervoltage (device 27), voltage unbalance (device 47), reverse phase or phase unbalance (device 46), automatic lockout (device 86) set at "no restart mode", anti-
|
(m)
|
Tie breaker status and generator breaker status signals to Company supervisory control system.
|
(iii)
|
The Facility will comply with the recommendations of the updated February 2012 Interconnection Requirements Study and the following:
|
(C)
|
Design Drawings, List of Equipment, Relay Settings and Fuse Selection
. Seller shall provide to Company for its review the design drawings, a list of equipment to be installed at the Facility (including, but not necessarily limited to, items such as relays, breakers, and switches), relay settings and fuse selection for the Facility and Company shall have the right, but not the obligation, to specify the type of electrical equipment, the interconnection wiring, the type of protective relaying equipment, including, but not limited to, the control circuits connected to it and the disconnecting devices, and the settings that affect the reliability and safety of operation of Company's and Seller's interconnected system. Seller shall provide the relay settings, fuse selection, and AC/DC Schematic Trip Scheme (part of design drawings) for the Facility to Company at least sixty (60) Days prior to the Acceptance Test. Company, at its option, may, with reasonable frequency, witness Seller's operation of control, synchronizing, and protection schemes and shall have the right to periodically re-specify the settings. Seller shall utilize relay settings prescribed by Company, which may be changed over time as Company System requirements change.
|
(D)
|
Disconnect Device
. Seller shall provide a manually operated disconnect device which provides a visible break to separate Facility from Company System. Such disconnect device shall be lockable in the OPEN position and be readily accessible to Company personnel at all times.
|
(E)
|
Other Equipment
. Seller shall furnish, install and maintain in accordance with Company's requirements all conductors, service switches, fuses, meter sockets, meter (includes revenue metering structure, CTs and PTs and accessories) and instrument transformer housing and mountings, switchboard meter test buses, meter panels and similar devices required for service connections and meter installations at the Site.
|
(F)
|
Maintenance of Seller-Owned Interconnection Facilities
. Seller shall be responsible for the inspection, maintenance and repairs of Seller-Owned Interconnection Facilities.
|
4.
|
Seller Payment to Company for Company-Owned Interconnection Facilities and Review of Facility
|
(A)
|
Seller Payment to Company
|
(i)
|
For Company-Owned Interconnection Facilities to be designed, engineered and constructed by Company, Seller shall pay the Total Estimated Interconnection Cost which is comprised of the estimated costs of (aa) acquiring and installing such Company-Owned Interconnection Facilities, (bb) the engineering and design work (including but not limited to Company, affiliated Company and contracted engineering and design work) associated with (i) developing such Company-Owned Interconnection Facilities and (ii) reviewing and specifying those portions of Facility which allow interconnected operations as such are described in
Attachment C
(Company Responsibilities and Work Scope), and (cc) conducting the Interconnection Acceptance Test.
|
(ii)
|
Summary List of Company-Owned Interconnection Facilities and Related Services engineered and constructed by Company:
|
(a)
|
New 69 kV wooden poles and overhead lines to connect Company System circuits to the Switchyard.
|
(b)
|
Fiber communication line with associated communication equipment within the control room at the Switchyard including, Remote Terminal Unit (RTU) and other associated communication equipment.
|
(c)
|
Fiber communication line, communication equipment, RTU, protective relay equipment, setting changes at other substations, UPS, revenue meters and other equipment within the control house at Hu Honua step up transformer site.
|
(d)
|
A more detailed description of Company responsibilities and work scope is provided in
Attachment C
(
Company Responsibilities and Work Scope
). Any additional Company-Owned Interconnection Facilities which may be identified in the detailed design.
|
(e)
|
Costs related to a potential temporary interconnection of Seller’s Facility through the Substation are not included in the following cost estimate, and such costs, if required, would be recovered from Seller as provided in Section 4(C) (True-Up) of this Interconnection Agreement.
|
(iii)
|
The following summarizes the Total Estimated Interconnection Cost:
|
Description
|
|
HELCO
|
||
Switching Station
|
|
$
|
1,009,410.00
|
|
Total Communications
|
|
$
|
334,650.00
|
|
Remote Relay Upgrades
|
|
$
|
172,550.00
|
|
69K V Line Work
|
|
$
|
281,390.00
|
|
New Swtichyard Site
|
|
$
|
25,000.00
|
|
Accept Test/Proj Manage
|
|
$
|
110,000.00
|
|
Total Estimated Cost:
|
|
$
|
1,933,000.00
|
|
(B)
|
Payment of Total Estimated Interconnection Costs
. The Total Estimated Interconnection Cost, which, except as otherwise provided herein, is non-refundable and shall be paid in accordance with the following schedule:
|
(i)
|
Within 7-Days following the Execution Date, $83,000.00 is due and payable by Seller to Company to initiate project coordination and design work, meetings, preparation of Switchyard design specifications, environmental site assessment for the Switchyard Site, and design reviews;
|
(ii)
|
Seller shall provide incremental payments with Notification to Proceed for Company’s work on the subject segment of Interconnection work by Company as follows:
|
(a)
|
Company shall not be obligated to perform engineering and design work, procurement, or construction on the specific segments of the Company-Owned Interconnection Facilities until Seller’s payment for said segment is received; and
|
(b)
|
Seller to provide Company with scheduled payments and Notification to Proceed instructions on each of the work segments below:
|
(1)
|
Notification to Proceed with preparation of design specifications for the Switchyard and preliminary design and project coordination work. Company estimates an approximate period of 12 weeks from Notification to Proceed to completion of design specifications,
|
(2)
|
Payment of $150,000 on or before June 5, 2012 and Seller’s Notification to Proceed with Company’s preliminary design work. Company estimates an approximate period of 20 weeks from Notification to Proceed to completion of this task.
|
(3)
|
Payment of $700,000 on or before August 31, 2012 and Seller’s Notification to Proceed with Company’s design work, and procurement of long-lead items and prefabrication work. Company estimates an approximate period of 30 weeks from Notification to Proceed to completion of this task.
|
(4)
|
Payment of $700,000 on or before January 30, 2013 and Seller’s Notification to Proceed with Company’s procurement, construction and testing to complete work scope on Company-owned interconnection components. Company estimates an approximate period of 30 weeks from Notification to Proceed to completion of this task.
|
(5)
|
Payment of $300,000 on or before May 31, 2013 and Seller’s Notification to Proceed with the completion of construction, commissioning work and Interconnection Acceptance Test. Company
|
(C)
|
True-Up
. A final accounting with respect to the Total Estimated Interconnection Cost shall take place within sixty (60) Days of the Commercial Operation Date or termination of Power Purchase Agreement. Within thirty (30) Days of such final accounting,Seller shall remit to Company the difference between the Total Estimated Interconnection Cost paid to date and the documented Total Actual Interconnection Cost. If in fact the documented Total Actual Interconnection Cost is less than the payments received by Company as the Total Estimated Interconnection Cost, Company shall repay the difference to Seller within thirty (30) Days of the final accounting.
|
(D)
|
Termination of the Power Purchase Agreement
. If the PUC does not approve of the Power Purchase Agreement or if any Event of Default by Seller occurs such that termination of the Power Purchase Agreement results, or if the Power Purchase Agreement is declared null and void by either Party pursuant to
Section 2.2(C)
(PUC Approval ) of the PPA or as otherwise provided herein, Seller shall notify Company to stop work on any portion of the work which may be in progress at the point of termination. Company, at its sole discretion, shall have the following options upon such termination:
|
(i)
|
If no equipment, assets, or land have been acquired at the point of termination, then a True-Up of actual costs would be determined to that point as provided in
Section 4(C)
(True-Up) of this Interconnection Agreement , or
|
(ii)
|
If equipment, assets, and/or land have been acquired at the point of termination, Seller shall notify Company to stop work and each Party shall develop an accounting of its respective work to date and costs. The general disposition of partially completed work and assets is as follows:
|
(a)
|
Company will retain all equipment and work products as described in
Attachment C
(Company Responsibilities and Work Scope
)
up to the point of stop work notification and perform a true-up of actual costs.
|
(b)
|
Seller will perform an inventory of all assets, equipment and work products for its work as described in
Attachment B
(Seller’s Responsibilities and Work Scope
)
including the new Switchyard Site, Switchyard and 69 kV overhead line up to the point of stop work. Seller shall
|
(c)
|
Should Company choose to purchase the Switchyard Site, Switchyard equipment and work products in an as-is condition Company will be responsible to complete the construction of the Switchyard at Company’s cost. If Company is required to seek PUC approval due to the purchase cost and estimated cost to complete the construction total being greater than $2.5 million, the purchase cannot be completed until Company receives such approval.
|
(E)
|
Ownership
. All Company-Owned Interconnection Facilities including those portions, if any, provided, or provided and constructed, by Seller shall be deeded and transferred by Schedule 2 (Bill of Sale and Assignment) to Company and become the property of Company upon Transfer Date.
|
5.
|
Ongoing Operation and Maintenance Charges
|
(A)
|
Prior to the Transfer Date
. Seller shall maintain, at its cost, Company-Owned Interconnection Facilities that it or its Contractors constructed, if any, prior to the Transfer Date. Company shall not use or operate the Company-Owned Interconnection Facilities constructed by Seller prior to the Transfer Date.
|
(B)
|
On or After the Transfer Date
. On and after the Transfer Date, Company shall own, operate and maintain all Company-Owned Interconnection Facilities.
|
6.
|
RESERVED
|
7.
|
RESERVED
|
8.
|
Land Restoration
|
(A)
|
Land to be Restored
. For the purposes of this Interconnection Agreement there are three (3) different locations with Company-Owned Interconnection Facilities. To differentiate these locations for the purpose of this Section 8 (Land Restoration), 1) “Site” means that portion of Seller’s Site where any Company-Owned Interconnection Facilities are located, 2) “Substation” relates real estate on which the existing Pepeekeo Substation and remaining improvements, and 3) “Switchyard Site” relates to the land for the new Switchyard.
|
(B)
|
Removal of Interconnection Facilities from Site
. After termination of this Interconnection Agreement , Seller shall, at its expense, remove all (i) Company-Owned Interconnection Facilities from the Site and (ii) Seller-Owned Interconnection Facilities from the Site, as designated by Company; provided, however, that, Company may elect to remove all or part of the Company-Owned Interconnection Facilities and/or Seller-Owned Interconnection Facilities from the Site because of operational concerns over the removal of such Interconnection Facilities, in which case Seller shall reimburse Company for its costs to remove such Company-Owned Interconnection Facilities and/or Seller-Owned Interconnection Facilities.
|
9.
|
Transfer of Ownership/Title
|
(A)
|
Transfer of Ownership and Title
. On the Transfer Date, Seller shall transfer to Company all right, title and interest in and to Company-Owned Interconnection Facilities to the extent such facilities were procured, designed and constructed by Seller and/or its Contractors as described in
Attachment B
(Seller’s Responsibilities and Work Scope
)
. In connection with the transfer of Company-Owned Interconnection Facilities, Seller shall transfer and assign to Company all applicable manufacturers' or Contractors' warranties which are assignable. Seller shall provide a written list of the manufacturers' and Contractors' warranties which will be assigned to Company and the expiration dates of such warranties no later than thirty (30) Days before the Transfer Date.
|
(B)
|
No Liens or Encumbrances
. Company's title to and ownership of Company-Owned Interconnection Facilities that were designed and constructed by Seller and/or its Contractors shall be free and clear of liens and encumbrances.
|
(C)
|
Land Rights
. In connection with the transfer of Company-Owned Interconnection Facilities to Company, Seller shall grant, transfer or assign to Company, such Land Rights as are necessary to operate and maintain Company-Owned Interconnection Facilities on the Transfer Date. If Company removes Company-Owned Interconnection Facilities in a portion or all of the easement areas provided in
Section 2(B)
(Site) of this Interconnection Agreement and such areas are no longer necessary to the operation of the Company-Owned Interconnection Facilities, such easements shall be terminated for those unused areas, including but not limited to, the easement for the overhead lines at the Substation site. Seller shall transfer the deed and title to Company for the Switchyard Site on the Transfer Date.
|
(D)
|
Form of Documents
. The transfers to be made to Company pursuant to this
Section 9
(Transfer of Ownership/Title) shall not require any further payment by Company. The form of the document to be used to convey title to the Company-Owned Interconnection Facilities that were designed and constructed by or on behalf of Seller shall be substantially in the form set forth in
Schedule 2
(Form of Bill of Sale and Assignment). The form of the document(s) to be used to assign leases shall be substantially in the form set forth in
Schedule 3
(Form of Assignment of Lease and Assumption). To the extent Land Rights, other than leases are granted to Company, appropriate modifications will be made to
Schedule 3
(Form of Assignment of Lease and Assumption) to effectuate the granting of such Land Rights.
|
10.
|
Government Approvals for Any Company-Owned Interconnection Facilities Constructed by Seller
|
11.
|
Land Rights
|
12.
|
Contracts for Company-Owned Interconnection Facilities
|
13.
|
Indemnification
|
14.
|
Dismantling and Transfer of Existing Pepeekeo Substation to Seller
|
(A)
|
Seller shall acquire the Switchyard Site and construct the new Switchyard as described in Attachment B in exchange for Company’s existing Pepeekeo Substation.
|
(B)
|
The retirement and transfer of the existing Pepeekeo Substation to Seller shall occur not more than 6-months after the Switchyard is operational or Hu Honua Facility’s Commercial Operation Date, whichever is later, provided the PUC approved the land transfer. Under no circumstances shall the Substation be transferred to Seller without PUC approval.
|
(C)
|
Company shall de-energize Substation and disconnect and remove all overhead power lines. Company shall remove any and all equipment, material and structures, of Company’s choice, then transfer title and site improvements of Substation to Seller in an as-found condition.
|
(D)
|
Seller shall accept the Substation as-is and be responsible for the dismantling, demolition and disposal of the remaining equipment, structures and improvements and any and all clearing of all improvements and site restoration work.
|
(E)
|
Company will transfer ownership and title of the existing Pepeekeo Substation to Seller per
Section 14(C)
above, provided that Seller grants Company with an easement and access as necessary to operate and maintain the overhead 69 kV lines and poles above the Substation site.
|
15.
|
Miscellaneous
|
(A)
|
Notices
|
(B)
|
Entire Agreement
|
(C)
|
Binding Effect
.
|
(D)
|
Relationship of the Parties
.
|
(E)
|
Further Assurances
|
(F)
|
Severability
|
(G)
|
No Waiver
|
(H)
|
Modification or Amendment
|
(I)
|
Governing Law, Jurisdiction and Venue
|
(J)
|
Facsimile Signatures and Counterparts
|
(K)
|
Computation of Time
|
(L)
|
PUC Approval
|
(M)
|
Change in Standard System or Organization
|
(N)
|
Headings
|
(O)
|
No Third Party Beneficiaries
|
(P)
|
Proprietary Rights
|
(Q)
|
Settlement of Disputes
|
(R)
|
Schedules
|
(S)
|
Hawaii General Excise Tax
.
|
(T)
|
Survival of Obligations
|
HAWAII ELECTRIC LIGHT COMPANY, INC.
|
|||
Company
|
|||
|
|
|
|
By:
|
/s/ Jay M. Ignacio
|
|
|
Name:
|
Jay M. Ignacio
|
|
|
Title:
|
President
|
|
|
|
|
|
|
|
|
|
|
HU HONUA BIOENERGY, LLC
|
|||
Seller:
|
|
|
|
|
|
|
|
By:
|
/s/ Harold H. Robinson
|
||
Name:
|
Harold H. Robinson
|
||
Title:
|
Member Board of Managers and Executive VP
|
||
|
|
|
|
|
|
|
|
By:
|
|
||
Name:
|
|
||
Title:
|
|
1.
|
Switchyard Site acquisition:
|
a.
|
Execute purchase contract with land owner to acquire the approximate 5-acre Switchyard Site.
|
b.
|
Work with civil engineering consultant to prepare subdivision application drawings to establish the Switchyard Site boundaries
|
c.
|
Work with Surveyor to provide metes and bounds property description.
|
d.
|
Purchase and/or secure property prior to construction and provide property in fee after the County Code section 23-11 subdivision is completed
|
e.
|
Transfer Switchyard land rights to Company on Transfer Date
|
2.
|
Switchyard design, construction specifications and drawings, permitting, project management and testing
|
a.
|
The design, equipment and construction specifications and standards shall be in accordance with Company standards and Hawaii County building codes as specified in Section 2 (Company-Owned Interconnection Facilities), as applicable.
|
i.
|
Company is to review all equipment and construction specifications and drawings, including bid packages.
|
b.
|
Civil, Structural and Architectural Design: layout, grading plan, access road, water, sewer, poles, foundations, support structures, control building, ductlines, handholes, and fencing design drawings
|
c.
|
Electrical: 69kV outdoor circuit breakers, bus, station power systems, enclosed auto-transfer station power switch, 69kV group operated disconnect switches, 69kV dry type potential transformers, 69kV dry type current transformers, bus tubing and/or conductors, connectors, control building with provisions to mount indoor relay panels, 125 volt DC system, control circuits, and grounding.
|
d.
|
Communication: Work to be performed by Company
|
e.
|
Protection: Work to be performed by Company
|
f.
|
Security: security access equipment and monitoring equipment
|
g.
|
Outside lighting and power: entrance and area lighting (per Hawaii County ordinances) and outside 120V outlets
|
h.
|
Permitting: Seller shall be responsible for the grading permit, building permit, State National Pollutant Discharge Elimination System (NPDES) permit
|
i.
|
and other permits and approvals as required for construction of the Switchyard.
|
j.
|
Project management, commissioning and testing
|
k.
|
Construction insurance
|
3.
|
Switchyard
|
a.
|
Civil, Structural and Architectural work
|
i.
|
Grading: grub, grade, and gravel – including laydown area – with temporary and permanent erosion and run-off controls as required.
|
v.
|
Underground duct lines with hand holes for low voltage power, control and communications, and lighting
|
b.
|
Mechanical work
|
i.
|
Sewer: connection to County sewer line, if available, or County approved septic system
|
c.
|
Low Voltage Electrical Work
|
i.
|
Station Power transformers; outside installation with stainless-steel housing
|
v.
|
Outside lighting and outlets
|
d.
|
69kV Electrical work
|
i.
|
Major equipment for 69kV circuits includes (7) SF6 gas circuit breakers with (4)1200:5 MR current transformers each, (15) 69kV group operated disconnect switches, (14) 40.25/69.0Y KV 350/600:1 dry type potential transformers, (9) lighting arresters, (2) station power transformers, and numerous 550 kBIL station post insulators, bus tubing, and bus connectors
|
1.
|
Install support structures, station post insulators, lightning arresters, lighting arrester counter, stands and cabinets
|
2.
|
Install disconnect switches
|
3.
|
Install gas circuit breakers
|
4.
|
Install wiring and cabling to control building
|
5.
|
Install PTs, CTs, and other equipment.
|
6.
|
Install station power transformers
|
7.
|
Install bus work.
|
e.
|
Switchyard Control House Electrical
|
i.
|
Provide and install two (2) 200A AC distribution panels
|
f.
|
Commissioning and Testing
|
i.
|
Commissioning; phase rotation, calibration, communications check, trip tests, etc.
|
4.
|
Control House at Hu Honua
|
a.
|
Control house for communications equipment, remote terminal unit (RTU) for monitoring and control, RTU demarcation cabinet, meter cabinet, and lighting
|
b.
|
Provide AC electric power for equipment, air conditioning and lighting
|
c.
|
Provide and install two air conditioners
|
5.
|
Metering Equipment
|
a.
|
Metering cabinet within control house
|
b.
|
Dry type metering PTs and CTs with dual output
|
c.
|
Dual meter sockets in metering cabinet
|
d.
|
Phone line for remote data download
|
6.
|
Extend 69kV line to Hu Honua with approximately four (4) poles and lines from existing Pepeekeo Substation to Hu Honua in accordance with Company specifications
|
a.
|
Company to perform terminations on Company-side of Seller 69 kV manual disconnect
|
1.
|
Site acquisition:
|
a.
|
Provide reasonable assistance to Seller regarding its acquisition of the Switchyard Site.
|
b.
|
Conduct a Phase 1 and Phase 2 Environmental Site Assessment (ESA)
|
c.
|
Provide reasonable assistance to Seller in its effort to seek expedited subdivision process using the Hawaii County Code 23-11, public utility or public right-of-way subdivision.
|
2.
|
Design, reviews & inspections, project management & testing
|
a.
|
Development of overall interconnection plan, single-line diagram, and relay list
|
b.
|
Review and approvals of Hu Honua consultants, design specifications, drawings, equipment specifications, and construction specifications and drawings for the new Switchyard
|
c.
|
Engineering, design, specifications and drawings for HELCO’s portion of the interconnection work
|
d.
|
Project management, inspections and testing of HELCO’s portion of the work and coordination with Hu Honua
|
e.
|
Coordination, inspections, and testing of Hu Honua’s portion of the work including the Interconnection Acceptance Test
|
3.
|
Switchyard
|
a.
|
Approvals, permits, etc.
|
i.
|
Prepare PUC application submittal for HRS 269-27.6, Construction of high-voltage electric transmission lines; overhead or underground
|
b.
|
Consultant, design, construction documents, and construction reviews
|
i.
|
Review and approval of consultants to be used by Hu Honua
|
v.
|
Provide guidance for layout and configuration of new switchyard equipment and review/approve design criteria, construction specs and drawings, equipment specs, calibration and testing, and documentation requirements
|
c.
|
Switchyard Control Room
|
i.
|
Develop layout, equipment inventory, and air conditioning load estimate
|
d.
|
Landscaping: irrigation system and plants
|
4.
|
Design, procure and install new 69kV polelines to terminate the “8400”, “7400”, “7600”, and Hu Honua (Old “8400” section from Mamalahoa Highway to the existing Pepeekeo Substation) lines in the new switchyard
|
a.
|
Provide and install new 69kV wood poles, insulators, and anchors from the existing lines to the new switchyard deadend structures
|
b.
|
String and terminate phase conductors and static wire from the existing poles to the Switchyard dead end structures sequenced one at a time
|
c.
|
Provide switching orders, schedules, and sequence of work for transition from existing system to new switchyard
|
5.
|
Communication Systems, Puueo-Pepeekeo Switchyard, Wailuku-Pepeekeo Switchyard, Honokaa-Pepeekeo Switchyard, and Pepeekeo Switchyard-Hu Honua
|
a.
|
Fiber;
|
i.
|
Tap existing fiber for drop to new switchyard control house
|
b.
|
Communication equipment within new Upper Pepeekeo control house; RTU, mux, etc.
|
c.
|
Communication equipment within new Hu Honua control house; RTU, mux, etc;
|
d.
|
Communication to Hu Honua control room and meters
|
e.
|
UPS systems for communication equipment
|
f.
|
Calibration and commissioning
|
6.
|
Protection
|
a.
|
Design; protective relay coordination and settings
|
b.
|
Procure, shop assembly and pre-wiring, calibrate and install protective relays, cabinets, test switches and equipment
|
i.
|
Puueo Circuit – #8402
|
c.
|
Installation and connection of communication
|
d.
|
Bench testing and commissioning of relays
|
e.
|
Testing
|
7.
|
Tap the new Hu Honua 69kV overhead line to the existing 69kV line located immediately above the existing Pepeekeo Substation. This termination will be completed after the cut-over of the new Switchyard. The Hu Honua 69 kV manual disconnect switch located close to the step up transformer site will be padlocked in the open position.and the 69kV switches terminating the Hu Honua line to the Switchyard will be padlocked in the open position as well.
|
8.
|
Meters; provide meters, installation and hook-up phone line
|
9.
|
Existing Pepeekeo Substation Transfer (Performed immediately before 7. above)
|
a.
|
De-energize substation and swing over to Hu Honua 69kV line or remove overhead wiring. Remove disconnects, switches and breakers
|
b.
|
Remove equipment, material and/or structures, at Company’s discretion
|
c.
|
Transfer to Seller pending PUC approval and Seller’s providing of easement
|
10.
|
Pole removals
|
a.
|
Removal of any existing overhead lines and poles are Company responsibility at Company’s cost.
|
b.
|
Cut and remove upper section of wooden poles with shared distribution lines and/or secondary service conductors
|
11.
|
Temporary Interconnection – if required
|
a.
|
Company to perform terminations of Seller provided overhead 69 kV lines at Substation manual disconnect upon mutual agreement to implement the temporary interconnection.
|
b.
|
Installation and/or reconfiguration of protective relays to be performed by Company for temporary configuration
|
c.
|
Interconnection Acceptance Test to be successfully demonstrated prior to Seller Facility operation using the temporary interconnection
|
d.
|
Seller to continue construction at Switchyard and transfer to Company as soon as practicable.
|
e.
|
Seller and Company to coordinate and schedule the transfer and testing of interconnection from temporary configuration to permanent configuration within 6-months of the Transfer Date of Switchyard
|
____________________________,
a __________________________
By________________________
Name _____________________
Its________________________
“Transferor”
|
______________________________, a Hawaii corporation
By ____________________________
Name _________________________
Its ____________________________
By____________________________
Name _________________________
Its____________________________
“Transferee”
|
|
|
|
By:
__________________________________
Name:
Title:
By:
__________________________________
Name:
Title:
“Assignor”
______________________________________
By:
__________________________________
Name:
Title:
By:
__________________________________
Name:
Title:
“Assignee”
|
|
|
(A)
|
A visual inspection of all Interconnection equipment and verification of as-built drawings.
|
(B)
|
Phase rotation testing to verify proper phase connections.
|
(C)
|
Based on manufacturer’s specification, test the local operation of the Facility’s 13.8 kV generator breaker and 69 kV inter-tie breaker, which connect the Facility to Company System – must open and close locally using the local controls.
|
(D)
|
Relay test engineers to connect equipment and simulate certain inputs to test and ensure that the protection schemes such as any under/over frequency and under/over voltage protection or the Direct Transfer Trip operate as designed. (For example, a fault condition may be simulated to confirm that the breaker opens to sufficiently clear the fault. Additional scenarios may be tested and would be outlined in the final test criteria and procedures.) Seller to also test the synchronizing mechanisms to which the Facility would be synchronizing and closing into the Company System to ensure correct operation. Other relaying also to be tested as specified in the protection review of the IRS and on the single line diagram, PPA Attachment A (Diagram of Interconnection) for the Facility
|
(E)
|
All 69 kV breaker disconnects and other high voltage switches will be inspected to ensure they are properly aligned and operated manually or automatically (if designed).
|
(F)
|
Step-Up Transformer Enclosure inspections – The Step-Up Transformer Enclosure may be inspected to test and ensure that the equipment that Seller has installed is installed and operating correctly based upon agreed to design. Wiring may be field verified on a sample basis against the wiring diagrams to ensure that the installed equipment is wired properly . The grounding mat at the Step-Up Transformer Enclosure may be tested to make sure there is adequate grounding of equipment.
|
(G)
|
Communication testing – Communication System testing to occur to ensure correct operation. Detailed scope of testing will be agreed by Company and
|
(H)
|
Various contingency scenarios to be tested to ensure adequate operation, including testing contingencies such as loss of communications, and fault simulations to ensure that the Facility’s 69 kV breakers, if any, open as they are designed to open. (Back up relay testing)
|
(I)
|
Metering section inspection; verification of metering PTs, CTs, and cabinet and the installation of the two Company meters
|
(A)
|
Company may have someone on-site when Seller performs any testing dealing with Seller’s protection schemes such as any under/over voltage or under/over frequency protection schemes to ensure they meet the performance requirements of this Agreement and the IRS.
|
(A)
|
Test to confirm Company has a direct line to the Facility control room at all times and that it is programmed correctly.
|
(B)
|
Test to confirm that the Facility operators can sufficiently reach Company System Operator
|
(C)
|
Verification of dial-up telephone connection for 69 kV metering cabinet.
|
(A)
|
Electronic and three (3) hard copies of all Upper Pepeekeo Switchyard construction drawings, specifications, calibrations, and settings including as-built drawings.
|
(B)
|
Equipment operating and maintenance manuals, spare parts lists, commissioning notes, as-built equipment settings, and other information related to the switchyard equipment.
|
(C)
|
Contractor construction warranties and equipment warranties
|
(D)
|
Phase rotation testing to verify proper phase connections.
|
New Charge
|
=
|
adjusted charge
|
Base Charge
|
=
|
charge (in Dollars) calculated per this Agreement
|
GDPIPD
CURRENT
|
=
|
The “Third” estimate of the GDPIPD for the Third Quarter of the Calendar Year prior to the current Year.
|
GDPIPD
BASE
|
=
|
The “Third” estimate of the GDPIPD for the Third Quarter of the Calendar Year prior to the Reference Year.
|
Bodily Injury & Property Damage
|
$10,000,000 combined single limit per occurrence and $20,000,000 annual aggregate.
|
1.
|
Acceptance Test
|
a.
|
The Acceptance Test for the Facility will be conducted, following installation of the Facility. The Acceptance Test procedures will be in accordance with criteria set forth herein. The Acceptance Test shall be performed in accordance with Good Engineering and Operating Practices and demonstrate to Company’s satisfaction that the Facility and the interconnection portion of the Facility, including Company-Owned Interconnection Facilities, has met the provisions of
Section 3.2(C)
(Delivery of Power to Company),
Attachment A
(Diagram of Interconnection), and the Interconnection Agreement.
|
b.
|
Acceptance Test procedures will be developed by Company for the Seller’s review at least sixty (60) Days in advance of performing the tests based on the date provided by Seller.
|
c.
|
The procedures will include, but not be limited to, demonstration of the functional requirements of the Facility defined in
Section 3.2(C)
(Delivery of Power to the Company) and
Section 3.3(A)
(Dispatch of Facility Power). such as:
|
i.
|
Interconnection equipment and communications to support remote monitoring of the Facility and control of Facility breakers
|
ii.
|
Droop characteristic
|
iii.
|
Real power delivery under remote Company Dispatch
|
iv.
|
Minimum load capability
|
v.
|
Ramp rates
|
vi.
|
Control of Facility breakers
|
vii.
|
Voltage regulation
|
d.
|
Testing of primary and redundant communications between Company System Operator and Facility Operator
|
e.
|
The actual dynamic response of the unit will be confirmed to allow Company transient stability model to reflect the as-left conditions of the unit. During the commissioning the following will be required:
|
i.
|
A final review by Company engineers of the equipment installed to control the operation and protect the plant will be needed upon installation and prior to the start of commercial operation.
|
ii.
|
The review will include off-line tuning and testing results of the excitation and governor control system and the IEEE block diagram utilized for the PSS/E dynamics program.
|
iii.
|
During the commissioning of the actual unit, governor and excitation system testing will be conducted to ensure that similar, well damped, expected responses will be produced by the project. The as-left parameters obtained from governor and exciter tuning will be determined for use in the Company planning model.
|
f.
|
The Seller will provide an estimate of the earliest date for the Acceptance Test at least ninety (90) Days before the date.
|
g.
|
The Acceptance Test procedures for the Facility will be mutually agreed upon between Seller and Company prior to conducting the test.
|
h.
|
When the Facility is ready for the Acceptance Test, Seller shall notify Company at least seven (7) Days prior to the test and shall coordinate with Company. Seller shall perform and Company shall monitor such test no earlier than seven (7) Days of Company’s receipt of such notice.
|
i.
|
The Acceptance Test must be conducted, and necessary sections completed to the satisfaction of Company, prior to conducting the first Capacity Test. The Company shall designate which sections are necessary to complete prior to the first Capacity Test.
|
j.
|
The Acceptance Test is to be successfully completed prior to the Commercial Operation Date.
|
2.
|
Capacity Test
|
a.
|
Capacity testing is used to establish the Firm Capacity according to the procedures defined here.
|
b.
|
At least one (1) successful Capacity Test must be completed prior to the Commercial Operation Date.
|
c.
|
Acceptance Testing must be completed prior to the first Capacity Test in accordance with
Section A.e.
of this
Attachment K
.
|
d.
|
When the Facility is ready for a Capacity Test, Seller shall notify the Company at least seven (7) Days prior to such test and shall coordinate with Company. Seller
|
e.
|
The Capacity Test shall be performed as follows:
|
i.
|
The test shall last for forty-eight (48) hours and shall be scheduled on the start-up plan provided by Seller to Company in accordance with
Section 5.1(B)
(Seller’s Start-up Plan).
|
ii.
|
During the test period, Seller will operate all equipment in accordance with normal operational parameters practices.
|
iii.
|
During the test period, the Facility shall operate in accordance with the dispatch instructions of the Company’s System Operator, subject in all cases to Good Engineering and Operating Practices, Seller’s permit limits, and the safety and design limits of the Facility as specified by the applicable equipment manufacturers.
|
iv.
|
If, during the Capacity Test period, the Company’s System Operator specifies less than maximum output, the period of testing will be extended to achieve forty-eight (48) hours with no reduction by the System Operator. The Firm Capacity will be declared including only the hours where the Facility was dispatched at maximum output.
|
v.
|
If Seller and Company are satisfied with the Capacity Test, Firm Capacity shall be designated by Seller as follows:
|
1.
|
If the test was performed prior to the Commercial Operation Date, or was performed during the Corrective Period, the Firm Capacity shall be designated by Seller as up to the minimum average capacity level that the Facility is able to sustain over a fifteen (15) minute interval in which the Facility is being dispatched at maximum capacity; provided that Seller may not set the Firm Capacity at a level in excess of the Committed Capacity in accordance with the terms of this Agreement.
|
2.
|
If the test is being done after the Corrective Period, the Firm Capacity shall be designated by Seller as up to the minimum average capacity level that the Facility is able to sustain over a fifteen (15) minute interval in which the Facility is being dispatched at maximum capacity; provided that Seller may not set the Firm Capacity at a level in excess of the prior Firm Capacity in accordance with the terms of this Agreement and may not be set to a level greater than the Committed Capacity.
|
vi.
|
For the purpose of defining the Firm Capacity, the minimum average capacity level shall be obtained from the metering used for measuring the integrated Net Real Power as discussed in
Section 3.2E(1)
(Meters).
|
vii.
|
The Capacity test is successful if it is agreed by Seller and Company and the Firm Capacity is greater than ten (10) MW.
|
viii.
|
If either Seller or Company reasonably believes that an abnormal condition occurred which may have adversely impacted the Capacity Test, such Capacity Test shall be deemed to be invalid and a re-test shall be done. Seller shall pay all costs associated with any retest, unless the abnormal condition was caused by Company, in which case Company shall pay such retest costs.
|
ix.
|
If, following two (2) re-tests, the Parties cannot agree that such Capacity Test produced accurate and reliable results, the Parties shall hire a Qualified Independent Engineering Company, from the list set forth in
Attachment H
(Qualified Independent Engineering Companies), to observe a third test and declare the Firm Capacity. The cost of such Qualified Independent Engineering Company shall be shared equally by the Parties.
|
x.
|
The Parties shall not hire a Qualified Independent Engineering Company if following two (2) or more re-tests both Parties agree that such Capacity Test produced inaccurate or unreliable results; provided that the provisions regarding the hiring of a Qualified Independent Engineering Company shall apply if the Parties fail to agree to the results of any subsequent test.
|
xi.
|
If Seller is unable to complete the Capacity Test or a subsequent test for any reason, it shall be permitted to re-conduct such test.
|
3.
|
Commercial Operation Date
|
4.
|
Subsequent Capacity Test
|
|
ST
|
|
[ ] Unit Trip
|
Start
|
|
|
[ ] Test
|
End
|
|
|
[ ] Forced Outage
|
Duration
|
|
|
[ ] Failure to Start
|
Derating
|
|
|
[ ] Risk Condition
|
|
|
|
[ ] Force Majeure
|
|
|
|
[ ] Other
|
|
|
|
[ ] Derating
|
1.
|
Specific Drawings of Following::
|
a.
|
Plot plan
|
b.
|
Site plan
|
c.
|
Grading plan
|
d.
|
Plan views and elevations
|
e.
|
Piping and instrument diagrams
|
f.
|
Fuel system drawings, including fuel preparation and storage
|
g.
|
Electrical single-line diagrams
|
i.
|
For plant showing auxiliary power system from 13.8 kV to 480V systems
|
ii.
|
For 13.8 kV system
|
h.
|
Control house, if provided, for metering cabinet and RTU
|
2.
|
Design and Specifications for Following Major Equipment Components:
|
a.
|
Main step-up transformer
|
b.
|
GSU switchgear
|
c.
|
Protective relay list, specifications
|
3.
|
Detailed project schedule
|
a.
|
Identify guaranteed milestones
|
b.
|
Identify reporting milestones
|
c.
|
Identify key equipment start-up dates
|
d.
|
Identify coordination requirements with HELCO
|
4.
|
List of consultants and contractors
|
5.
|
Long-lead time equipment
|
[Bank's Name]:
|
|
|
|
|
|
By:
|
|
|
[Authorized Signature]
|
Financing Party:
|
|
|
By:
|
|
|
Name:
|
|
|
Its:
|
|
|
By:
|
|
|
Name:
|
|
|
Its:
|
|
|
|
|
|
By:
|
|
|
Name:
|
|
|
Its:
|
|
|
1
|
Instructions
|
2
|
Major activities recently performed
|
3
|
Remedial Action Plan (if applicable)
|
4
|
Project Schedule
|
5
|
Permits
|
5.1
|
Please describe each of the Permits to be obtained by Seller and the status of each
:
|
Agency / Approval
|
Status Summary
e.g., dates of application / hearing / notice / etc. (note whether dates are anticipated or actual); major activities (indicate whether planned, in progress and/or completed); primary reasons for possible delay, etc.
|
|
|
|
|
6
|
Land Rights for the Company-Owned Interconnection Facilities
|
6.1
|
Table of Land Rights schedule for Company-Owned Interconnection Facilities
|
Activity
|
Completion Date
|
|
__/__/____ (expected / actual)
|
|
__/__/____ (expected / actual)
|
7
|
Design and Engineering
|
Name of EPC Contractor / Subcontractor
|
Activity
|
Completion Date
|
|
|
__/__/____ (expected / actual)
|
|
|
__/__/____ (expected / actual)
|
8
|
Major Equipment Procurement.
|
Equipment Description
|
Manufacturer
|
Delivery Date
(indicate whether expected or actual)
|
Installation Date
(indicate whether expected or actual)
|
|
|
__/__/____
(expected / actual)
|
__/__/____
(expected / actual)
|
|
|
__/__/____
(expected / actual)
|
__/__/____
(expected / actual)
|
9
|
Construction
|
Activity
|
EPC Contractor / Subcontractor
|
Completion Date
|
|
|
__/__/____ (expected / actual)
|
|
|
__/__/____ (expected / actual)
|
10
|
Interconnection
|
Activity
|
Name of EPC Contractor / Subcontractor
|
Completion Date
|
|
|
__/__/____ (expected / actual)
|
|
|
__/__/____ (expected / actual)
|
11
|
Startup Testing and Commissioning
|
Activity
|
Name of EPC Contractor / Subcontractor
|
Completion Date
|
|
|
__/__/____ (expected / actual)
|
|
|
__/__/____ (expected / actual)
|
12
|
Safety and Health Reports
|
13
|
Certification
|
1.
|
Definitions
.
|
(a)
|
“
Performance Standards
” – The various performance standards for the operation of the Facility and the delivery of electric energy from the Facility to Company specified in
Section 3.2(C) (Delivery of Power to Company) of the Agreement.
|
(b)
|
“
PUC RPS Order
” – Shall have the meaning set forth in Section 4 (RPS Modifications Document) of this
Attachment U
(Renewable Portfolio Standards).
|
(c)
|
“
RPS Modifications
” – Any capital improvements, additions, enhancements, replacements, repairs or other operational modifications to the Facility and/or to changes in Seller's operations or maintenance practices necessary to enable the electric energy delivered from the Facility to come within the revised definition of "renewable electrical energy" resulting from a RPS Amendment.
|
(d)
|
“
RPS Modifications Document
” – Shall have the meaning set forth in
Section 4
(RPS Modifications Document) of this
Attachment U
(Renewable Portfolio Standards).
|
(e)
|
“
RPS Pricing Impact
” – Any adjustment in Energy Charge and/or Capacity Charge necessary to specifically reflect the recovery of the net costs and/or net lost revenues specifically attributable to any RPS Modification, which shall consist of the following: (i) recovery of, and return on, any capital investment (aa) made over a cost recovery period starting after the RPS Modification is made effective following a PUC RPS Order through the end of the Initial Term and (bb) based on a proposed capital structure that is commercially reasonable for such an investment and the return on investment is at market rates for such an investment or similar investment); (ii) recovery of reasonably expected net additional operating and maintenance costs; and (iii) an adjustment in pricing necessary to compensate Seller for reasonably expected reductions, if any, in the delivery of electric energy to Company under this Agreement, which shall consist of (yy) an increase in payments necessary to compensate Seller for expected reduced electric energy payments under this Agreement; and (zz) to the extent applicable, an increase in payments necessary to compensate Seller for reasonably expected reductions in receipt of federal, state or local tax credits, which may be in the form of governmental subsidies, rebates or refunds, calculated on an after-tax basis, earned by Seller resulting from its operation or ownership of the Facility.
|
2.
|
Renewable Portfolio Standards
. Pursuant to
Section 2.1(G)
of the Agreement, Seller shall develop Seller’s RFP Modifications Proposal in the event that as a result of any RPS Amendment, the electric energy delivered from the Facility should no longer qualify as “renewable electrical energy”.
|
3.
|
Seller’s RPS Modifications Proposal
. Upon receipt of Seller's RPS Modifications Proposal, Company will evaluate Seller's RPS Modifications Proposal. Seller shall assist Company in performing such evaluation as and to the extent reasonably requested by Company (including, but not limited to, providing such additional information as Company may reasonably request and participating in meetings with Company as Company may reasonably request).
|
4.
|
RPS Modifications Document
. If, following Company's evaluation of Seller's RPS Modifications Proposal, Company desires to consider the implementation by Seller of the changes recommended in Seller's RPS Modifications Proposal, Company shall provide Seller with written notice to that effect, such notice to be issued to Seller within 180 Days of receipt of Seller's RPS Modifications Proposal, and Company and Seller shall proceed to negotiate in good faith a document setting forth the specific changes to the Agreement that are necessary to implement such RPS Modifications Proposal (the "
RPS Modifications Document
"). A decision by Company to initiate negotiations with Seller as aforesaid shall not constitute an acceptance by Company of any of the details set forth in Seller's RPS Modifications Proposal, including but not limited to the RPS Modifications and the RPS Pricing Impact. Any adjustment to the Energy Charge and Capacity Charge pursuant to such RPS Modifications Document shall be limited to the RPS Pricing Impact. The time periods set forth in such RPS Modifications Document as to the effective date for the RPS Modifications shall be measured from the date the PUC order with respect to such RPS Modifications becomes non-appealable as provided in
Section 6
(PUC RPS Order) of this
Attachment U
(Renewable Portfolio Standards) (“PUC RPS Order”).
|
5.
|
Failure to Reach Agreement
. If Company and Seller are unable to agree upon and execute a RPS Modifications Document within 180 Days of Company's written notice to Seller pursuant to
Section 4
(RPS Modifications Document) of this
Attachment U
(Renewable Portfolio Standards), Company shall have the option of declaring the failure to reach agreement on and execute such Document to be a dispute and submit such dispute to an Independent Evaluator for the conduct of a determination pursuant to
Section 9
(Dispute) of this
Attachment U
(Renewable Portfolio Standards). Any decision of the Independent Evaluator, rendered as a result of such dispute shall include a form of a RPS Modifications Document as described in
Section 4
(RPS Modifications Document) of this
Attachment U
(Renewable Portfolio Standards).
|
6.
|
PUC RPS Order
. No RPS Modifications Document shall constitute an amendment to the Agreement unless and until a PUC RPS Order issued with respect to such Document has become non-appealable. Once the condition of the preceding sentence has been satisfied, such RPS Modifications Document shall constitute an amendment to this Agreement. To be "non-appealable" under this
Section 6
(PUC RPS Order), such PUC RPS Order shall be either (i) not subject to appeal to any Circuit Court of the State of Hawai‘i or the Supreme Court of the State of Hawai‘i, because the thirty (30) Day period (accounting for weekends and holidays as appropriate) permitted for such an appeal has passed without the filing of notice of such an appeal, or (ii) affirmed on appeal to any Circuit Court of the State of Hawai‘i or the Supreme Court, or the Intermediate Appellate Court upon assignment by the Supreme Court, of the State of Hawai‘i, or affirmed upon further
|
7.
|
Company’s Rights
. The rights granted to Company under
Section 4
(RPS Modifications Document) of this
Attachment U
(Renewable Portfolio Standards) and
Section 5
(Failure to Reach Agreement) of this
Attachment U
(Renewable Portfolio Standards) above are exclusive to Company. Seller shall not have a right to initiate negotiations of a RPS Modifications Document or to initiate dispute resolution under
Section 9
(Dispute) of this
Attachment U
(Renewable Portfolio Standards), as a result of a failure to agree upon and execute any RPS Modifications Document.
|
i.
|
Limited Purpose
. This
Attachment U
(Renewable Portfolio Standards) is intended to specifically address the implementation of reasonable measures to cause the electric energy delivered from the Facility to come within the revised definition of "renewable electrical energy" under any RPS Amendment and is not intended for either Party to provide a means for renegotiating any other terms of the Agreement. Revisions to the Agreement in accordance with the provisions of this
Attachment U
(Renewable Portfolio Standards) are not intended to increase Seller's risk of non-performance or default.
|
8.
|
Dispute
. If Company decides to declare a dispute as a result of the failure to reach agreement and execute a RPS Modifications Document pursuant to
Section 5
(Failure to Reach Agreement) of this
Attachment U
(Renewable Portfolio Standards), it shall provide written notice to that effect to Seller. Within 20 Days of delivery of such notice Seller and Company shall agree upon an Independent Evaluator to resolve the dispute regarding a RPS Modifications Document. The Independent Evaluator shall be reasonably qualified and expert in renewable energy power generation, matters relating to the Performance Standards, financing, and power purchase agreements. If the Parties are unable to agree upon an Independent Evaluator within such 20-Day period, Company shall apply to the PUC for the appointment of an Independent Evaluator In its application, Company shall ask the PUC to appoint an Independent Evaluator within 30 Days of the application.
|
(a)
|
Promptly upon appointment, the Independent Evaluator shall request the Parties to address the following matters within the next 15 days:
|
i.
|
The reasonable measures required to be taken by Seller to cause the electric energy delivered from the Facility to come within such revised definition of "renewable electrical energy" under the RPS Amendment in question;
|
v.
|
Contractual consequences for non-performance that are commercially reasonable under the circumstances.
|
(b)
|
Within 90 Days of appointment, the Independent Evaluator shall render a decision unless the Independent Evaluator determines it needs to have additional time, not to exceed 45 Days, to render a decision.
|
(c)
|
The Parties shall assist the Independent Evaluator throughout the process of preparing its review, including making key personnel and records available to the Independent Evaluator, but neither Party shall be entitled to participate in any meetings with personnel of the other Party or review of the other Party's records. However, the Independent Evaluator will have the right to conduct meetings, hearings or oral arguments in which both Parties are represented. The Parties may meet with each other during the review process to explore means of resolving the matter on mutually acceptable terms.
|
(d)
|
The following standards shall be applied by the Independent Evaluator in rendering his or her decision: (i) if it is not technically or operationally feasible for Seller to implement reasonable measures required to cause the electric energy delivered from the Facility to come within such revised definition of "renewable electrical energy" under the RPS Amendment in question, the Independent Evaluator shall determine that the Agreement shall not be amended to comply with such changes in RPS (unless the Parties agree otherwise); (ii) if it is technically or operationally feasible for Seller to implement reasonable measures required to cause the electric energy delivered from the Facility to come within such revised definition of "renewable electrical energy" under RPS, the Independent Evaluator shall incorporate such required changes into a RPS Modifications Document including (aa) Seller's RPS Modifications, (bb) pricing terms that incorporate the RPS Pricing Impact, and (cc) contract terms and conditions that are commercially reasonable under the circumstances, especially with respect to the consequences of non-performance by Seller as to the RPS Modifications. In addition to the RPS Modifications Document, the Independent Evaluator shall render a decision which sets forth the positions of the Parties and Independent Evaluator's rationale for his or her decisions on disputed issues.
|
(e)
|
The fees and costs of the Independent Evaluator shall be paid by Company up to the first $30,000 of such fees and costs; above those amounts, the Party that is not the prevailing Party shall be responsible for any such fees and costs; provided, if neither Party is the prevailing Party, then the fees and costs of the Independent Evaluator above $30,000, shall be borne equally by the Parties. The Independent Evaluator in rendering his or her decision shall also state which Party prevailed
|
|
|
PAGE
|
|
|
|
|
|
ARTICLE 1 -
|
DEFINITIONS……………………………………………………………….
|
2
|
|
ARTICLE 2 -
|
SCOPE OF AGREEMENT……………………………………………..........
|
17
|
|
ARTICLE 3 -
|
SPECIFIC RIGHTS AND OBLIGATIONS OF THE PARTIES………….....
|
28
|
|
ARTICLE 4 -
|
SUSPENSION OR REDUCTION OF DELIVERIES………………….........
|
60
|
|
ARTICLE 5 -
|
RATES FOR PURCHASE…………………...…………………………........
|
63
|
|
ARTICLE 6 -
|
BILLING AND PAYMENT…………………………………………….........
|
68
|
|
ARTICLE 7 -
|
CREDIT ASSURANCE AND SECURITY…………………………….........
|
70
|
|
ARTICLE 8 -
|
DEFAULT………………………………….......…………………….............
|
73
|
|
ARTICLE 9 -
|
LIQUIDATED DAMAGES………………………………...………..............
|
83
|
|
ARTICLE 10 -
|
COMPANY’S USE OF AND ACCESS TO FACILITY……...…………......
|
87
|
|
ARTICLE 11 -
|
AUDIT RIGHTS………………………...…………………….……..............
|
89
|
|
ARTICLE 12 -
|
REPRESENTATIONS, WARRANTIES AND COVENANTS………….......
|
90
|
|
ARTICLE 13 -
|
INDEMNIFICATION………………………………………………………..
|
93
|
|
ARTICLE 14 -
|
CONSEQUENTIAL DAMAGES……………………...…………………....
|
96
|
|
ARTICLE 15 -
|
INSURANCE………………………………………………………………..
|
97
|
|
ARTICLE 16 -
|
SET OFF………………………………………………………………..........
|
99
|
|
ARTICLE 17 -
|
DISPUTE RESOLUTION………………………………...…………...........
|
100
|
|
ARTICLE 18 -
|
FORCE MAJEURE…………………………………………………….........
|
104
|
|
ARTICLE 19 -
|
ELECTRIC SERVICE SUPPLIED BY COMPANY……………………......
|
108
|
|
ARTICLE 20 -
|
ASSIGNMENT………………………………………………………….......
|
109
|
|
ARTICLE 21 -
|
SALE OF FACILITY BY SELLER…...…….…………………………........
|
110
|
|
ARTICLE 22 -
|
REIMBURSEMENT OF CERTAIN COMPANY COSTS…………….........
|
113
|
|
ARTICLE 23 -
|
EQUAL EMPLOYMENT OPPORTUNITY…………………...….........…..
|
114
|
|
ARTICLE 24 -
|
RESERVED………………………………………………………………....
|
115
|
|
ARTICLE 25 -
|
MISCELLANEOUS………………………………………………................
|
116
|
|
1.
|
Purpose and Explanation.
This Amendment is adopted to change the eligibility criteria for the Plan and to reflect that the Bank performs the duties of the Committee.
|
a.
|
Eligibility.
Under the current terms of the Plan and Amendment No. 1, eligibility is restricted to the Bank’s Leadership Council. The Bank’s Leadership Council has been discontinued. The Bank wishes to confer on the Bank the authority to designate eligible employees, as provided under the original 2009 Restatement.
|
b.
|
“Committee”
. Under the current terms of the Plan, the Committee (defined as the Hawaiian Electric Industries, Inc. Total Compensation Administration Committee) performs certain administrative functions under the Plan. The Committee has been disbanded. The Committee’s duties are performed by the Company.
|
2.
|
Supersession
. This Amendment No. 4 shall supersede the provisions of the SDCP to the extent that those provisions are inconsistent with this Amendment.
|
3.
|
Effective Date.
This Amendment No. 4 is effective for Plan Years beginning on or after January 1, 2018.
|
4.
|
Section 3.1(a) and (b).
Sections 3.1(a) and (b) are amended in their entirety, as follows:
|
(a)
|
General. Employees who are determined by the Bank to be includable in a select group of management or highly compensated employees of the Bank within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA, and are specifically approved for participation by the Bank, in its sole discretion, shall be eligible to make Deferral Elections under this Plan. Continued eligibility to make Deferral Elections, year-by-year, shall be conditioned upon a Participant’s continuing to meet the requirements of the Plan, including, but not limited to, continuing to be includable in a select group of management or highly compensated employees of the Bank.
|
(b)
|
Effective Date of Eligibility for Newly Eligible Employees. The effective date of eligibility for newly eligible employees shall be either the date on which the employee is given notice of eligibility to participate by the Bank or, in the discretion of the Bank, the date of commencement of the enrollment period for Regular Deferral Elections for the Plan Year next following the date on which the employee is given notice of eligibility to participate.
|
5.
|
Section 2.1(n).
Section 2.1(n) is deleted and replaced by the following language:
|
6.
|
Except as modified herein, all of the terms and provisions of the SDCP, as amended, shall continue in full force and effect.
|
|
AMERICAN SAVINGS BANK
|
By:
|
/s/ Richard F. Wacker
|
|
President & CEO
|
|
HAMAKUA ENERGY, LLC
|
|
|
|
|
|
By: /s/ Kurt Murao
|
|
Kurt Murao
|
|
Its Authorized Signatory
|
|
HAWAII ELECTRIC LIGHT COMPANY, INC.
|
|
|
|
|
|
/s/ Jay Ignacio
|
|
Jay Ignacio
|
|
Its President
|
(in thousands,
except per share amounts)
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||||
Net income for common stock
|
|
$
|
165,297
|
|
|
$
|
248,256
|
|
|
$
|
159,877
|
|
|
$
|
168,129
|
|
|
$
|
161,709
|
|
Weighted-average number of common shares outstanding
|
|
108,749
|
|
|
108,102
|
|
|
106,418
|
|
|
101,968
|
|
|
98,968
|
|
|||||
Adjusted weighted-average number of common shares outstanding
|
|
108,933
|
|
|
108,309
|
|
|
106,721
|
|
|
102,937
|
|
|
99,623
|
|
|||||
Basic earnings per common share
|
|
$
|
1.52
|
|
|
$
|
2.30
|
|
|
$
|
1.50
|
|
|
$
|
1.65
|
|
|
$
|
1.63
|
|
Diluted earnings per common share
|
|
$
|
1.52
|
|
|
$
|
2.29
|
|
|
$
|
1.50
|
|
|
$
|
1.63
|
|
|
$
|
1.62
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
Years ended December 31
|
(1)
|
|
(2)
|
|
(1)
|
|
(2)
|
|
(1)
|
|
(2)
|
||||||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fixed charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total interest charges
|
$
|
82,065
|
|
|
$
|
91,725
|
|
|
$
|
81,974
|
|
|
$
|
89,141
|
|
|
$
|
83,936
|
|
|
$
|
89,284
|
|
Interest component of rentals
|
6,607
|
|
|
6,607
|
|
|
6,200
|
|
|
6,200
|
|
|
6,065
|
|
|
6,065
|
|
||||||
Pretax preferred stock dividend requirements of subsidiaries
|
3,127
|
|
|
3,127
|
|
|
2,825
|
|
|
2,825
|
|
|
2,977
|
|
|
2,977
|
|
||||||
Total fixed charges
|
$
|
91,799
|
|
|
$
|
101,459
|
|
|
$
|
90,999
|
|
|
$
|
98,166
|
|
|
$
|
92,978
|
|
|
$
|
98,326
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Pretax income from continuing operations
|
$
|
274,690
|
|
|
$
|
274,690
|
|
|
$
|
371,951
|
|
|
$
|
371,951
|
|
|
$
|
252,898
|
|
|
$
|
252,898
|
|
Fixed charges, as shown
|
91,799
|
|
|
101,459
|
|
|
90,999
|
|
|
98,166
|
|
|
92,978
|
|
|
98,326
|
|
||||||
Interest capitalized
|
(5,375
|
)
|
|
(5,375
|
)
|
|
(3,727
|
)
|
|
(3,727
|
)
|
|
(3,265
|
)
|
|
(3,265
|
)
|
||||||
Earnings available for fixed charges
|
$
|
361,114
|
|
|
$
|
370,774
|
|
|
$
|
459,223
|
|
|
$
|
466,390
|
|
|
$
|
342,611
|
|
|
$
|
347,959
|
|
Ratio of earnings to
fixed charges
|
3.93
|
|
|
3.65
|
|
|
5.05
|
|
|
4.75
|
|
|
3.68
|
|
|
3.54
|
|
|
2014
|
|
2013
|
||||||||||||
Years ended December 31
|
(1)
|
|
(2)
|
|
(1)
|
|
(2)
|
||||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed charges
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total interest charges
|
$
|
83,458
|
|
|
$
|
88,535
|
|
|
$
|
85,315
|
|
|
$
|
90,407
|
|
Interest component of rentals
|
6,366
|
|
|
6,366
|
|
|
6,345
|
|
|
6,345
|
|
||||
Pretax preferred stock dividend requirements of subsidiaries
|
2,952
|
|
|
2,952
|
|
|
2,886
|
|
|
2,886
|
|
||||
Total fixed charges
|
$
|
92,776
|
|
|
$
|
97,853
|
|
|
$
|
94,546
|
|
|
$
|
99,638
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
||||
Pretax income from continuing operations
|
$
|
263,708
|
|
|
$
|
263,708
|
|
|
$
|
247,946
|
|
|
$
|
247,946
|
|
Fixed charges, as shown
|
92,776
|
|
|
97,853
|
|
|
94,546
|
|
|
99,638
|
|
||||
Interest capitalized
|
(3,954
|
)
|
|
(3,954
|
)
|
|
(7,097
|
)
|
|
(7,097
|
)
|
||||
Earnings available for fixed charges
|
$
|
352,530
|
|
|
$
|
357,607
|
|
|
$
|
335,395
|
|
|
$
|
340,487
|
|
Ratio of earnings to fixed charges
|
3.80
|
|
|
3.65
|
|
|
3.55
|
|
|
3.42
|
|
(1)
|
Excluding interest on ASB deposits.
|
(2)
|
Including interest on ASB deposits.
|
Years ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total interest charges
|
$
|
70,234
|
|
|
$
|
67,407
|
|
|
$
|
67,178
|
|
|
$
|
66,132
|
|
|
$
|
64,130
|
|
Interest component of rentals
|
3,618
|
|
|
3,249
|
|
|
3,060
|
|
|
3,244
|
|
|
2,793
|
|
|||||
Pretax preferred stock dividend requirements of subsidiaries
|
1,539
|
|
|
1,453
|
|
|
1,443
|
|
|
1,444
|
|
|
1,421
|
|
|||||
Total fixed charges
|
$
|
75,391
|
|
|
$
|
72,109
|
|
|
$
|
71,681
|
|
|
$
|
70,820
|
|
|
$
|
68,344
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to Hawaiian Electric
|
$
|
121,031
|
|
|
$
|
143,397
|
|
|
$
|
136,794
|
|
|
$
|
138,721
|
|
|
$
|
124,009
|
|
Fixed charges, as shown
|
75,391
|
|
|
72,109
|
|
|
71,681
|
|
|
70,820
|
|
|
68,344
|
|
|||||
Income taxes
|
83,199
|
|
|
84,801
|
|
|
79,422
|
|
|
80,725
|
|
|
69,117
|
|
|||||
Interest capitalized
|
(5,375
|
)
|
|
(3,727
|
)
|
|
(3,265
|
)
|
|
(3,954
|
)
|
|
(7,097
|
)
|
|||||
Earnings available for fixed charges
|
$
|
274,246
|
|
|
$
|
296,580
|
|
|
$
|
284,632
|
|
|
$
|
286,312
|
|
|
$
|
254,373
|
|
Ratio of earnings to fixed charges
|
3.64
|
|
|
4.11
|
|
|
3.97
|
|
|
4.04
|
|
|
3.72
|
|
(1)
|
I have reviewed this report on Form 10-K for the year ended December 31, 2017 of Hawaiian Electric Industries, Inc. (“registrant”);
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
(4)
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(5)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 1, 2018
|
|
|
/s/ Constance H. Lau
|
|
Constance H. Lau
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-K for the year ended December 31, 2017 of Hawaiian Electric Industries, Inc. (“registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 1, 2018
|
|
|
/s/ Gregory C. Hazelton
|
|
Gregory C. Hazelton
|
|
Executive Vice President and Chief Financial Officer
|
|
|
1.
|
I have reviewed this report on Form 10-K for the year ended December 31, 2017 of Hawaiian Electric Company, Inc. (“registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 1, 2018
|
|
|
/s/ Alan M. Oshima
|
|
Alan M. Oshima
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-K for the year ended December 31, 2017 of Hawaiian Electric Company, Inc. (“registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 1, 2018
|
|
|
/s/ Tayne S. Y. Sekimura
|
|
Tayne S. Y. Sekimura
|
|
Senior Vice President and Chief Financial Officer
|
(1)
|
The Report complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; as amended, and
|
(2)
|
The consolidated information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of HEI and its subsidiaries as of, and for, the periods presented in this report.
|
/s/ Constance H. Lau
|
|
Constance H. Lau
|
|
President and Chief Executive Officer
|
|
/s/ Gregory C. Hazelton
|
|
Gregory C. Hazelton
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(1)
|
The Hawaiian Electric Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; as amended, and
|
(2)
|
The Hawaiian Electric information contained in the Hawaiian Electric Report fairly presents, in all material respects, the financial condition and results of operations of Hawaiian Electric and its subsidiaries as of, and for, the periods presented in this report.
|
/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
|
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Name
|
Age
|
Business experience for last 5 years and prior positions
with Hawaiian Electric and its affiliates |
Alan M. Oshima
|
70
|
Hawaiian Electric President and Chief Executive Officer since 10/14
Hawaiian Electric Director, 2008 to 10/11 and since 10/14
HEI Charitable Foundation President since 10/11
· Hawaiian Electric Senior Executive Officer on loan from HEI, 5/14 to 9/14
· HEI Executive Vice President, Corporate and Community Advancement, 10/11 to 5/14
|
Jimmy D. Alberts
|
57
|
Hawaiian Electric Senior Vice President, Customer Service since 8/12
· Prior to joining the Company: Kansas City Power & Light, Vice President – Customer Service, 2007-12
|
Colton K. Ching
|
50
|
Hawaiian Electric Senior Vice President, Planning & Technology since 1/17
· Hawaiian Electric Vice President, Energy Delivery, 1/13 to 1/17
· Hawaiian Electric Vice President, Systems Operation & Planning, 8/10 to 12/12
· Hawaiian Electric Manager, Corporate Planning Department, 8/08 to 8/10
· Hawaiian Electric Director, Strategic Initiatives, 12/06 to 8/08
· Hawaiian Electric Director, Transmission Planning Division, 2/05 to 12/06
· Hawaiian Electric Senior Planning Engineer, 4/00 to 2/05
· Hawaiian Electric Electric Engineer II, 9/96 to 4/00
· Hawaiian Electric Designer II, 1/94 to 9/96
· Hawaiian Electric Designer I, 1/91 to 1/94
|
Ronald R. Cox
|
61
|
Hawaiian Electric Senior Vice President, Operations since 1/17
· Hawaiian Electric Vice President, Power Supply, 8/11 to 1/17
· Hawaiian Electric Vice President, Generation & Fuels, 8/10 to 7/11
· Hawaiian Electric Manager, Energy Solutions, 3/09 to 8/10
· Hawaiian Electric Manager, Power Supply Services Department, 1/07 to 3/09
· Hawaiian Electric Manager, Operations Strategic Planning, 11/05 to 1/07
|
Shelee M. T. Kimura
|
44
|
Hawaiian Electric Senior Vice President, Business Development & Strategic Planning since 1/17
· Hawaiian Electric Vice President, Corporate Planning & Business Development, 5/14 to 1/17
· HEI Manager, Investor Relations & Strategic Planning, 11/09 to 5/14
· HEI Director, Corporate Finance and Investments, 8/04 to 10/09
|
Susan A. Li
|
60
|
Hawaiian Electric Senior Vice President, General Counsel, Chief Compliance and Administrative Officer and Corporate Secretary since 12/15
· Hawaiian Electric Senior Vice President, General Counsel, Chief Compliance Officer and Secretary, 12/13 to 12/15 · Hawaiian Electric Vice President, General Counsel, 10/07 to 12/13 · Hawaiian Electric Manager, Legal, 5/98 to 10/07
· Hawaiian Electric Associate General Counsel, 3/90 to 5/98
|
Name
|
Age
|
Business experience for last 5 years and prior positions
with Hawaiian Electric and its affiliates |
Tayne S. Y. Sekimura
|
55
|
Hawaiian Electric Senior Vice President and Chief Financial Officer since 9/09
· Hawaiian Electric Senior Vice President, Finance and Administration, 2/08 to 9/09 · Hawaiian Electric Financial Vice President, 10/04 to 2/08 · Hawaiian Electric Assistant Financial Vice President, 8/04 to 10/04 · Hawaiian Electric Director, Corporate & Property Accounting, 2/01 to 8/04 · Hawaiian Electric Director, Internal Audit, 7/97 to 2/01 · Hawaiian Electric Capital Budgets Administrator, 5/93 to 7/97 · Hawaiian Electric Capital Budgets Supervisor, 10/92 to 5/93 · Hawaiian Electric Auditor (internal), 5/91 to 10/92 |
Scott W. H. Seu
|
52
|
Hawaiian Electric Senior Vice President, Public Affairs since 1/17
· Hawaiian Electric Vice President, System Operation, 5/14 to 1/17
· Hawaiian Electric Vice President, Energy Resources and Operations, 1/13 to 5/14
· Hawaiian Electric Vice President, Energy Resources, 8/10 to 12/12
· Hawaiian Electric Manager, Resource Acquisition Department, 3/09 to 8/10
· Hawaiian Electric Manager, Energy Projects Department, 5/04 to 3/09
· Hawaiian Electric Manager, Customer Installations Department, 1/03 to 5/04
· Hawaiian Electric Manager, Environmental Department, 4/98 to 12/02
· Hawaiian Electric Principal Environmental Scientist, 1/97 to 4/98
· Hawaiian Electric Senior Environmental Scientist, 5/96 to 12/96
· Hawaiian Electric Environmental Scientist, 8/93 to 5/96
|
Jay M. Ignacio
|
58
|
Hawaii Electric Light President and Senior Operations Advisor to the Hawaiian Electric President and Chief Executive Officer since 8/15
· Hawaii Electric Light President, 3/08 to 8/15
· Hawaii Electric Light Manager, Distribution and Transmission, 11/96 to 3/08 · Hawaii Electric Light Superintendent, Construction & Maintenance, 4/94 to 11/96 · Hawaii Electric Light Electrical Engineer, 4/90 to 4/94 |
Sharon M. Suzuki
|
59
|
Maui Electric President since 5/12
· Maui Electric CIS Project Resource Manager, 8/11 to 5/12 · Maui Electric Manager, Renewable Energy Services, 3/08 to 5/12 · Maui Electric Manager, Customer Service, 5/04 to 3/08 · Hawaiian Electric Director, Customer Account Services, 8/02 to 5/04 · Hawaiian Electric Residential Energy Efficiency Program Manager, 5/00 to 8/02 · Hawaiian Electric Commercial and Industrial Energy Efficiency Program
Manager, 6/96 to 5/00
· Hawaiian Electric Demand-Side Management Analyst, 7/92 to 6/96 |
•
|
Chief Marketing Officer, Square, Inc., 2015 to Present
|
•
|
Chief Marketing Officer, Visa, Inc, 2012 - 2014
|
•
|
Executive management, leadership and strategic planning skills from his service as Chief Marketing Officer for Square, Inc., where he is responsible for driving brand leadership, customer acquisition, product development and overall business growth, as well as from his 14 years as a senior executive for Visa, Inc., where he was responsible for transforming Visa's marketing organization and overseeing key strategic initiatives which included global campaigns.
|
•
|
Extensive finance and investment expertise gained through his positions at Square, Inc. and Visa, Inc., where he sets overall investment strategy and directed investment of a budget of over $800 million across more than 70 markets, including emerging markets in South America.
|
•
|
Substantial experience working across a range of industries, including financial services, technology and energy gained from his over 30 years in the marketing industry, including serving as President of JWT San Francisco (marketing and communications agency).
|
•
|
Skilled business leader who has built and led high-performing organizations from start-up to establishing regional as well as global markets, including founding a successful full-service advertising agency that focused on emerging digital brands.
|
•
|
Non-Executive Chairman, DineEquity, Inc. since March 2017; Chairman & Interim CEO March - September 2017
|
•
|
Non-Executive Chairman, James Campbell Company LLC (privately held real estate investment and development company), since 2010
|
•
|
Chairman, President and CEO, James Campbell Company LLC, 2010-16
|
•
|
Director and Audit Committee Member, HEI (parent company of Hawaiian Electric), since 2017
|
•
|
Director since 2008, Audit Committee Chair and Executive Committee Member, IDACORP, Inc./Idaho Power Company
|
•
|
Lead Independent Director 2010-17, former Audit Committee Chair, and Director since 2004, DineEquity, Inc.
|
•
|
Non-Executive Chairman, International Rectifier Corporation, 2008-15
|
•
|
Broad leadership and strategic and operational management experience from serving as a senior executive for private and publicly traded companies, including as Chairman, President and CEO of James Campbell Company LLC, President, Chief Operating Officer and Director of Dole Food Company, Inc., and President, Chief Operating Officer and Director of Bank of Hawaii Corporation.
|
•
|
In-depth understanding of electric utility industry from his current service as a director of IDACORP, Inc. and its principal subsidiary, Idaho Power Company.
|
•
|
Audit, risk management and financial expertise from his chairmanship of the IDACORP, Inc. audit committee, prior chairmanship of the DineEquity, Inc. audit committee, previous work experience with accounting firm Ernst & Young, and prior licensure as a Certified Public Accountant and Certified Bank Auditor.
|
•
|
Substantial governance and board leadership experience from his public company board service, including through his prior role as Lead Independent Director of DineEquity, Inc. and through leading the International Rectifier, Inc. board through a successful corporate turnaround.
|
•
|
Chief Consumer Officer, Hawaii Medical Service Association (leading health insurer in Hawaii), 2011 to 6/2017
|
•
|
Executive management, leadership and strategic planning skills developed over three decades as a businessperson and lawyer and most recently as Chief Consumer Officer of Hawaii Medical Service Association (HMSA).
|
•
|
Business, regulatory, financial stewardship and legal experience from his prior roles as President and CEO of the Bishop Museum, Chief Operating Officer for the Estate of Samuel Mills Damon (former private trust with assets valued at over $900 million prior to its dissolution), Chairperson of the Hawaii State Board of Land and Natural Resources, Director of the Hawaii State Department of Land and Natural Resources and Vice President and General Counsel at Amfac Property Development Corp.
|
•
|
Corporate governance knowledge and familiarity with financial oversight and fiduciary responsibilities from overseeing the HMSA Internal Audit department, from his prior service as a director for The Gas Company LLC (now Hawaii Gas) and his current service as a trustee of the Parker Ranch Foundation Trust (charitable trust with assets valued at over $350 million), as a director and Audit Committee Chair for Parker Ranch, Inc., as a director and Audit Committee member for Grove Farm Company, Inc. (privately-held community and real estate development firm
|
•
|
President and Chief Executive Officer, Hawaii Community Foundation (statewide charitable foundation), since July 2017
|
•
|
President and Chief Operating Officer, Hawaii Community Foundation, 2016 to June 2017
|
•
|
Chief Operating Officer, Pacific Links Hawaii LLC (golf course owner, developer and operator), 2011-15
|
•
|
Principal, The KANE Group LLC (Hawaii-based company focused on land and financing matters for planned community infrastructure and general business development), since 2010
|
•
|
Trustee, Kamehameha Schools ($11.5 billion Native Hawaiian trust with more than 363,000 acres of land holdings in Hawaii), since 2009
|
•
|
Executive management, leadership and strategic planning skills from prior service as Chief Operating Officer of Pacific Links Hawaii and Trustee of Kamehameha Schools and from prior role as Chairman/Director of the Department of Hawaiian Home Lands.
|
•
|
Finance and investment expertise gained through oversight of $11.5 billion asset portfolio as trustee of Kamehameha Schools and through spearheading bond transactions as Chairman/Director of Department of Hawaiian Home Lands.
|
•
|
Experience managing complex capital expenditure projects from overseeing development of master planned communities and from managing annual $150 million capital improvement budget for the Department of Hawaiian Home Lands.
|
•
|
Skilled in government affairs, policy development, public relations and crisis management from prior service as Chairman/Executive Director of the Hawaii Republican Party.
|
•
|
Managing Partner, BlackSand Capital, LLC (real estate investment firm), since 2010
|
•
|
President and CEO, Kobayashi Group, LLC, 2001-10, and Partner, since 2001
|
•
|
From his leadership of BlackSand Capital, LLC and Kobayashi Group, LLC, Hawaii-based real estate investment and development firms he co-founded, he has extensive experience in private equity investment, real estate acquisitions, project origination, procurement of construction and permanent debt facilities and subordinate/mezzanine financing, in addition to planning, financing and leading large real estate development projects and experience with executive management, marketing and government relations.
|
•
|
Organizational governance and financial oversight experience from his current service as a trustee for mutual funds (Hawaiian Tax Free Trusts, from the Aquila Group of Funds) and as a current or past director of several non-profit organizations, including the Shane Victorino Foundation, Inspire the Keiki Foundation, East-West Center Foundation and GIFT Foundation of Hawaii, which he co-founded.
|
•
|
President and CEO and Director, HEI (parent company of Hawaiian Electric), since 2006
|
•
|
Director, ASB Hawaii (affiliate of Hawaiian Electric), since 2006
|
•
|
Chairman of the Board since 2006, Risk Committee member since 2012 and Director since 1999, ASB (affiliate of Hawaiian Electric)
|
•
|
CEO, 2001-10, President, 2001-08, and Senior Executive Vice President and Chief Operating Officer, 1999-2001, ASB
|
•
|
Financial Vice President & Treasurer, 1997-99, HEI Power Corp. (former affiliate of Hawaiian Electric)
|
•
|
Treasurer, 1989-99, and Assistant Treasurer,1987-89, HEI
|
•
|
Treasurer, 1987-89, and Assistant Corporate Counsel, 1984-87, Hawaiian Electric
|
•
|
Director, HEI, 2001-04 and since 2006
|
•
|
Director, Audit Committee Chair and Nominating and Corporate Governance Committee Member, Matson, Inc., since 2012
|
•
|
Intimate understanding of the Company from serving in various chief executive, chief operating and other executive, finance and legal positions at HEI and its operating subsidiaries for more than 30 years.
|
•
|
Familiarity with current management and corporate governance practices from her current service as a director, Audit Committee Chair and Nominating and Corporate Governance Committee member for Matson, Inc., as a former director of Alexander & Baldwin, Inc., and as a director and Underwriting Committee chair for AEGIS Insurance Services, Inc.
|
•
|
Experience with financial oversight and expansive knowledge of the Hawaii business community and the local communities that comprise the Company’s customer bases from serving as a director for various local industry, business development, educational and nonprofit organizations.
|
•
|
Utility industry knowledge from serving as a director or task force member of the Edison Electric Institute, Electric Power Research Institute and federal Electricity Subsector Coordinating Council.
|
•
|
Nationally recognized leader in the fields of critical infrastructure, resilience and physical and cyber security, and energy, demonstrated by her chairmanship of the National Infrastructure Advisory Council, membership on the federal Electricity Subsector Coordinating Council, and her naming as a C3E Energy Ambassador by the U.S. Department of Energy.
|
•
|
President and CEO, Hawaiian Electric, since October 2014
|
•
|
President, HEI Charitable Foundation (affiliate of Hawaiian Electric), since 2011
|
•
|
Senior Executive Officer on loan from HEI (parent company of Hawaiian Electric) to Hawaiian Electric, May-September 2014
|
•
|
Executive Vice President, Corporate and Community Advancement, HEI, 2011-May 2014
|
•
|
Deep understanding of Hawaiian Electric from his prior service on the Company's board and from his roles as HEI Executive Vice President, Corporate and Community Advancement and President, HEI Charitable Foundation, and from his service as a loaned executive to Hawaiian Electric from May to October 2014.
|
•
|
More than three decades of public utilities regulatory experience in Hawaii, including through overseeing regulatory matters for Hawaiian Telcom, and from his years of private law practice, in which he specialized in public utility regulation and was named one of America’s Best Lawyers in public utility law.
|
•
|
Longstanding involvement in and knowledge of the communities Hawaiian Electric and its subsidiaries serve, having served on the boards of several community organizations and having worked for many years to strengthen public education in Hawaii, including through his service as Chairman of Hawaii 3Rs, a director of The Learning Coalition, a director of Hawaii Institute of Public Affairs, and a Hawaii commissioner on the Education Commission of the States.
|
•
|
Experienced in executive management from his service on the boards of Hawaiian Electric and Hawaiian Telcom and from his executive roles at Hawaiian Telcom and HEI, and skilled in complex change management, having served as Senior Advisor to Hawaiian Telcom and a member of the Hawaiian Telcom special independent board committee that oversaw the company’s plan of reorganization and successful emergence from reorganization proceedings in 2010.
|
•
|
Senior Fellow, Hawaii Community Foundation (statewide charitable foundation), since July 2017
|
•
|
CEO, Hawaii Community Foundation, Jan 2016 to June 2017
|
•
|
President and CEO, Hawaii Community Foundation, 1998-2015
|
•
|
Director since 1993 and Nominating and Corporate Governance Committee Chair, HEI (parent company of Hawaiian Electric)
|
•
|
Executive management experience with responsibility for overseeing more than $500 million in charitable assets through his leadership of the Hawaii Community Foundation.
|
•
|
Proficiency in risk assessment, strategic planning and organizational leadership as well as marketing and public relations from his current position at the Hawaii Community Foundation and his prior experience as Vice President and Executive Director of the Asia/Pacific Region for The Nature Conservancy and as Founder, Managing Partner and Director of Sunrise Capital Inc.
|
•
|
Knowledge of corporate and nonprofit governance issues gained from his prior service as a director for Grove Farm Company, Inc. and the Independent Sector, his current service on the boards of Feeding America, the Stupski Foundation and the Hawaii Leadership Forum, and through publishing articles and lecturing on governance of tax-exempt organizations.
|
•
|
Director, Nominating and Corporate Governance Committee Chair and Compensation Committee Member, Matson, Inc., since 2012
|
•
|
Director since 1988 and Executive and Risk Committee Member, ASB (affiliate of Hawaiian Electric)
|
•
|
Lead Independent Director, 2012-15 and director 2003-15, Alexander & Baldwin, Inc. (A&B)
|
•
|
Director since 1987, Chairman of the Board since 2006, Executive Committee Chair and Compensation Committee member, HEI (parent company of Hawaiian Electric)
|
•
|
Broad business, legal, corporate governance and leadership experience from serving as Managing Partner of the law firm he helped found in 1972 until his retirement in 2007, advising clients on a variety of business and legal matters for 35 years and from serving on more than a dozen public and private company and nonprofit boards and committees, including his current service on the Matson Nominating and Corporate Governance and Compensation Committees and past service on the A&B Nominating & Corporate Governance Committee.
|
•
|
Specific experience with strategic planning from providing strategic counsel to local business clients and prospective investors from the continental United States and the Asia Pacific region for 25 years of his law practice.
|
•
|
Recognized by a number of organizations for his accomplishments, including by the Financial Times-Outstanding Directors Exchange, which selected him as a 2013 Outstanding Director.
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
Name
|
Title
|
Alan M. Oshima
|
Hawaiian Electric President and Chief Executive Officer (CEO)
|
Tayne S. Y. Sekimura
|
Hawaiian Electric Senior Vice President and Chief Financial Officer
|
Jimmy D. Alberts
|
Hawaiian Electric Senior Vice President, Customer Service
|
Susan A. Li
|
Hawaiian Electric Senior Vice President, General Counsel, Chief Compliance & Administrative Officer
|
Jay M. Ignacio
|
Hawaii Electric Light President and Senior Operations Advisor to the Hawaiian Electric President and CEO
|
•
|
Pay should reflect Company performance, particularly over the long-term,
|
•
|
Compensation programs should align executives' interests with those of our shareholders, customers and employees,
|
•
|
Programs should be designed to attract, motivate and retain talented executives who can drive the Company’s success, and
|
•
|
The cost of programs should be reasonable while maintaining their purpose and benefit.
|
•
|
For 2017 annual incentive performance, the following metrics applied to all Hawaiian Electric named executive officers: Hawaiian Electric net income, operation and maintenance expense, reliability, customer satisfaction, safety and utility transformation, each on a consolidated basis.
|
•
|
Long-term incentives comprise a significant portion of each Hawaiian Electric named executive officer’s pay opportunity. For the three-year period that ended December 31, 2017, the Hawaiian Electric named executive officer performance metrics were HEI three-year average annual EPS Growth and Hawaiian Electric three-year return on average common equity (ROACE) as a percentage of the ROACE allowed by the Hawaii Public Utilities Commission (PUC) for the period.
|
•
|
Engages in extensive deliberations in meetings held over several months
|
•
|
Consults with its independent compensation consultant during and outside of meetings
|
•
|
Focuses on Hawaiian Electric’s long-term strategy and nearer-term goals to achieve such strategy in setting performance metrics and goals
|
•
|
Reviews tally sheets for each named executive officer to understand how the elements of compensation relate to each other and to the compensation package as a whole (the tally sheets include fixed and variable compensation, minimal perquisites and change in pension value for current and past periods)
|
•
|
Examines data and analyses prepared by its independent compensation consultant concerning peer group selection, comparative compensation data and evolving best practices
|
•
|
Reviews Hawaiian Electric performance and discusses assessments of the individual performance of senior members of management
|
•
|
Analyzes the reasonableness of incentive payouts in light of the long-term benefits to all stakeholders
|
•
|
Considers trends in payouts to determine whether incentive programs are working effectively
|
•
|
Reviews risk assessments conducted by the HEI and Hawaiian Electric Enterprise Risk Management functions to determine whether compensation programs and practices carry undue risk
|
•
|
Financial performance objectives for the annual incentive program are linked to Board-approved budget guidelines, and nonfinancial measures (such as customer satisfaction, reliability and safety) are aligned with the interests of all Hawaiian Electric stakeholders.
|
•
|
An executive compensation recovery policy (“clawback policy”) permits recoupment of performance-based compensation paid to executives found personally responsible for fraud, gross negligence or intentional misconduct that causes a significant restatement of Hawaiian Electric’s financial statements.
|
•
|
Annual and long term incentive awards are capped at maximum performance levels.
|
•
|
Financial opportunities under long-term incentives are greater than those under annual incentives, emphasizing the importance of long-term outcomes.
|
•
|
Share ownership and retention guidelines requiring Mr. Oshima to hold certain amounts of HEI common stock ensure that Hawaiian Electric’s chief executive has a substantial personal stake in the long-term performance of Hawaiian Electric and HEI. The guidelines specific to Mr. Oshima are discussed in "Share ownership and retention are required throughout employment with the Company" in HEI's 2018 Proxy Statement.
|
•
|
In typical circumstances, long-term incentive payouts have been 100% equity-based, so executives share in the same upside potential and downside risk as all HEI shareholders. In light of the then pending merger with NextEra Energy, however, the HEI Compensation Committee decided to provide for the 2015-17 and 2016-18 LTIPs to be settled in cash in lieu of HEI common stock. The Committee determined that HEI's stock price might be affected at least in part by merger considerations unrelated to HEI's true operating performance and that, as a result, the compensatory goals of the LTIPs would be better served by a cash settlement. Since the merger did not occur and the merger agreement between HEI and NextEra Energy was terminated in July 2016, the Committee determined that the 2017-19 LTIP would be settled 100% in HEI common stock.
|
•
|
Annual grants of RSUs and long-term incentives vest over a period of years to encourage sustained performance and executive retention.
|
•
|
Performance-based plans use a variety of financial metrics (e.g., net income, return on average common equity) and nonfinancial performance metrics (e.g., customer satisfaction, reliability and safety) that correlate with long-term value creation for all stakeholders and are impacted by management decisions.
|
•
|
The Hawaiian Electric Board and HEI Compensation Committee continuously monitor risks faced by the enterprise, including through management presentations at quarterly meetings and through periodic written reports from management.
|
Compensation Element
|
Summary
|
Objectives
|
Base Salary*
|
Fixed level of cash compensation set in reference to peer group median (may vary based on performance, experience, responsibilities and other factors).
|
Attract and retain talented executives by providing competitive fixed cash compensation.
|
Annual Performance-Based Incentives
|
Variable cash award based on achievement of pre-set performance goals for the year. Award opportunity is a percentage of base salary. Performance below threshold levels yields no incentive payment.
|
Drive achievement of key business results linked to short-term and long-term strategy and reward executives for their contributions to such results. Balance compensation cost and return by paying awards based on performance.
|
Long-Term Performance-Based Incentives
|
Variable equity** award based on meeting pre-set performance objectives over a 3-year period. Award opportunity is a percentage of base salary. Performance below threshold levels yields no incentive payment.
|
Motivate executives and align their interests with those of all stakeholders by promoting long-term value growth and by paying awards in the form of equity.*
Balance compensation cost and return by paying awards based on performance.
|
Annual Restricted Stock Unit (RSU) Grant
|
Annual equity grants in the form of RSUs that vest in equal installments over 4 years. Amount of grant is a percentage of base salary.
|
Promote alignment of executive and shareholder interests by ensuring executives have significant ownership of HEI stock.
Retain talented leaders through multi-year vesting.
|
Benefits
|
Includes defined benefit pension plans and retirement savings plan, deferred compensation plans, minimal perquisites and an executive death benefit plan (frozen since 2009).
|
Enhance total compensation with meaningful and competitive benefits that promote retention, peace of mind and contribute to financial security.
|
|
Base Salary
($)
|
|
Performance-Based Annual Incentive
(Target Opportunity 1 as % of Base Salary) |
|
Performance-Based Long-term Incentive
(Target Opportunity 1 as % of Base Salary) |
|
Restricted Stock Units (Grant Value as % of Base Salary)
|
||||
Name
|
2016
|
2017*
|
|
2016
|
2017
|
|
2016-18
|
2017-19
|
|
2016
|
2017
|
Alan M. Oshima
|
583,500
|
655,583
|
|
75
|
same
|
|
95
|
same
|
|
65
|
same
|
Tayne S. Y. Sekimura
|
342,000
|
350,583
|
|
50
|
same
|
|
50
|
same
|
|
35
|
same
|
Jimmy D. Alberts
|
262,700
|
269,283
|
|
45
|
same
|
|
45
|
same
|
|
35
|
same
|
Susan A. Li
|
270,000
|
276,750
|
|
45
|
same
|
|
45
|
same
|
|
35
|
same
|
Jay M. Ignacio
|
278,100
|
285,100
|
|
45
|
same
|
|
50
|
same
|
|
35
|
same
|
1
|
The threshold and maximum opportunities are 0.5 times target and 2 times target, respectively.
|
2017 Annual Incentive Performance Metrics & Why We Use Them
|
|
Goals
|
|
||||
Weight-ing
|
Threshold
|
Target
|
Maximum
|
Result
|
|||
Consolidated Adjusted Net Income
1
focuses on fundamental earnings
|
45%
|
$128.3M
|
$135.0M
|
$148.5M
|
$129.1M
|
||
Consolidated Operation and Maintenance Expense
2
measures operational efficiency
|
15%
|
$437M
|
$426M
|
N/A
|
$414M
|
||
Consolidated System Average Interruption Duration Index (SAIDI)
3
promotes system reliability for customers
|
10%
|
105 minutes
|
102 minutes
|
99 minutes
|
112 minutes
|
||
Consolidated Customer Satisfaction
4
focuses on improving the customer experience through all points of contact with the utility
|
5%
|
Consolidated score of 66 in 2 of 4 quarters
|
Consolidated score of 66 in 3 of 4 quarters
|
Consolidated score of 66 in 4 of 4 quarters
|
Consolidated score of 66 in 4 of 4 quarters
|
||
Consolidated Safety/TCIR
5
rewards improvements in workplace safety, promoting employee well-being and reducing expense
|
5%
|
1.25 TCIR
|
1.03 TCIR
|
0.92 TCIR
|
1.84 TCIR
|
||
Transformation Metrics
6
promote achievement of utility transformation initiatives
|
20%
|
Threshold
|
Target
|
Maximum
|
Target
|
1
|
Consolidated Adjusted Net Income represents Hawaiian Electric’s consolidated GAAP net income for 2017, adjusted for the item described further below. This Adjusted Net Income metric is a non-GAAP measure
.
For a reconciliation of the GAAP and non-GAAP results, see "Reconciliation of GAAP to Non-GAAP Measures" in Appendix B.
|
2
|
Consolidated Operation and Maintenance Expense represents non-fuel expenses of the consolidated utilities excluding expenses covered by surcharges or that are otherwise neutral to net income.
|
3
|
Consolidated SAIDI is measured by the average outage duration for each customer served, exclusive of catastrophic events and outages caused by independent power producers, over whose plant maintenance and reliability the utility has limited real-time control.
|
4
|
Consolidated Customer Satisfaction is based on quarterly results of customer surveys conducted by an outside vendor.
|
5
|
Consolidated Safety is measured by Total Cases Incident Rate (TCIR), a standard measure of employee safety. TCIR equals the number of Occupational Safety and Health Administration recordable cases as of 12/31/17 × 200,000 productive hours divided by productive hours for the year. The lower the TCIR the better.
|
6
|
Transformation Metrics focus on achievement of the utility’s transformation goals. For 2017, the milestones focused on the areas of culture transformation, customer experience, distribution circuit reliability, electrification of transportation and communication. Achievement at target indicates that all milestones were achieved.
|
Name
|
2017 Annual Incentive Payout ($)
|
||
Alan M. Oshima
|
$
|
345,164
|
|
Tayne S. Y. Sekimura
|
123,054
|
|
|
Jimmy D. Alberts
|
85,067
|
|
|
Susan A. Li
|
87,426
|
|
|
Jay M. Ignacio
|
90,063
|
|
1
|
Hawaiian Electric 3-year Average Annual EPS Growth is calculated by taking the sum of each full calendar year's (2017, 2018 and 2019, respectively) EPS percentage growth over the EPS of the prior year and dividing that sum by three. For purposes of this goal, Hawaiian Electric EPS is calculated using Hawaiian Electric net income divided by weighted average HEI common stock outstanding.
|
2
|
3-year ROACE as a % of Allowed Return is Hawaiian Electric's consolidated average ROACE for the performance period compared to the weighted average of the allowed ROACE for Hawaiian Electric, Maui Electric and Hawaii Electric Light as determined by the PUC for the same period.
|
3
|
HEI Relative TSR compares HEI’s TSR to that of the companies in the Edison Electric Institute (EEI) Index (see Appendix A). For LTIP purposes, TSR is the sum of the growth in price per share of HEI common stock as measured at the beginning of the performance period to the end, calculated using the share price on the last trading day of December at the end of the performance period, plus dividends during the period, assuming reinvestment, divided by the share price on the last trading day of December immediately prior to the beginning of the performance period.
|
Name
|
2015-17 Target Opportunity
*
(as % of Base Salary)
|
Alan M. Oshima
|
90%
|
Tayne S. Y. Sekimura
|
45%
|
Jimmy D. Alberts
|
45%
|
Susan A. Li
|
45%
|
Jay M. Ignacio
|
45%
|
*
|
The threshold and maximum opportunities were 0.5 times target and 2 times target, respectively.
|
2015-17 Long-Term Incentive
|
|
Goals**
|
|
||
Performance Metrics & Why We Use Them
|
Weighting
|
Threshold
|
Target
|
Maximum
|
Result
|
HEI 3-year Average Annual EPS Growth
1
promotes shareholder value by focusing on EPS growth over a three-year period.
|
50%
|
2.2%
|
3.5%
|
4.5%
|
2.9%
|
3-year ROACE as a % of Allowed Return
2
measures Hawaiian Electric’s performance in attaining the level of ROACE it is permitted to earn by its regulator.
|
50%
|
73%
|
83%
|
93%
|
85%
|
1
|
HEI's 3-year Average Annual EPS Growth is calculated by taking the sum of each full calendar year's (2015, 2016 and 2017, respectively) EPS percentage growth over the EPS of the prior year and dividing that sum by 3. Non‑GAAP adjusted net income, upon which EPS used for LTIP purposes is calculated, differs from what is reported under GAAP because it excludes the impact of the unusual events in 2014 through 2017 described below under “Adjustments for unusual events - 2015‑17 LTIP.” For a reconciliation of the GAAP and non‑GAAP results, see “Reconciliation of GAAP to Non‑GAAP Measures” attached as Appendix B.
|
2
|
3-year ROACE as a % of Allowed Return is Hawaiian Electric's consolidated average ROACE for the performance period compared to the weighted average of the allowed ROACE for Hawaiian Electric, Maui Electric and Hawaii Electric Light as determined by the PUC for the same period. Non‑GAAP adjusted net income used in the computation of ROACE, differs from what is reported under GAAP because it excludes the impact of the unusual events in 2015 through 2017 described below under “Adjustments for unusual events - 2015‑17 LTIP.” For a reconciliation of the GAAP and non‑GAAP results, see “Reconciliation of GAAP to Non‑GAAP Measures” attached as Appendix B.
|
Name
|
2015-17 LTIP Payout
|
|
|
Alan M. Oshima
|
$
|
502,006
|
|
Tayne S. Y. Sekimura
|
147,102
|
|
|
Jimmy D. Alberts
|
112,985
|
|
|
Susan A. Li
|
104,123
|
|
|
Jay M. Ignacio
|
108,554
|
|
•
|
Hawaiian Electric Chairman of the Board Constance H. Lau, who is also HEI President & CEO and an HEI director and is not compensated by Hawaiian Electric, participated in deliberations of the HEI Compensation Committee in recommending, and of the Hawaiian Electric Board in determining, compensation for Hawaiian Electric’s President & CEO and other Hawaiian Electric named executive officers.
|
•
|
Hawaiian Electric President & CEO Alan M. Oshima, also a Hawaiian Electric director, is responsible for evaluating the performance of the other Hawaiian Electric named executive officers and other Hawaiian Electric senior officers, and for proposing compensation for those officers to the HEI Compensation Committee for recommendation to the Hawaiian Electric Board. Mr. Oshima did not participate in the deliberations of the HEI Compensation Committee to recommend, or of the Hawaiian Electric Board to determine, his own compensation, but did participate in deliberations of the Hawaiian Electric Board to determine the compensation of the other Hawaiian Electric named executive officers.
|
•
|
Cash compensation earned for the applicable year is reported in the "Salary," "Nonequity Incentive Plan Compensation" and "All Other Compensation" columns (except see explanation in the following paragraph regarding disclosure of the 2015-17 LTIP awards).
|
•
|
For 2017, the "Stock Awards" column is composed of: (i) the opportunity to earn shares of HEI common stock in the future under the 2017-19 LTIP if performance metrics are achieved and (ii) RSUs that vest over 2017-2020 and may be forfeited in whole or in part if the executive leaves before the vesting period ends. For 2015 and 2016, the "Stock Awards" column reflects only RSUs granted in 2015 and 2016 since the 2015-17 and 2016-18 LTIPs were denominated in cash rather than in stock; this was due to the NextEra merger that was pending when the applicable award opportunities were established. Hawaiian Electric's transition back to exclusively equity-based long-term incentive compensation in 2017 impacts the comparative compensation amounts disclosed in the 2017 Summary Compensation Table. SEC rules require the 2015-2017 LTIP cash payouts to be included in the Summary Compensation Table in 2017, the last year of the performance period (not the year in which awards are granted as is the case with equity-based awards). As a result, the 2017 compensation amounts in the Summary Compensation Table include
both
the 2015-2017 LTIP cash payouts and the 2017-2019 equity-based LTIP and RSUs awards granted in 2017, which is not reflective of the target compensation provided to our NEOs for 2017. By contrast, the 2015 and 2016 compensation amounts do not include any LTIP amounts because there were no LTIP cash payouts or equity-based LTIP awards granted in 2015 and 2016. Our LTIP programs and practices have not changed (one LTIP award covering a 3-year performance period is granted each year), however, as a result of the disclosure timing differences between cash-based and equity-based LTIPs, the reported compensation amounts in the Summary Compensation Table for 2017 are notably higher than, and not comparable to, the reported amounts for 2015 and 2016, and are not reflective of the target compensation provided to our NEOs for 2017.
|
•
|
In accordance with SEC rules, the 2016-18 LTIP cash payouts, if any, will be reported in the 2018 Summary Compensation Table.
|
•
|
The "Change in Pension Value and Nonqualified Deferred Compensation Earnings" column sets forth the change in value of pension and executive death benefits, which can fluctuate significantly--from year to year based on changes in discount rates and other actuarial assumptions. It is important to note that the method of calculating the benefit to be received by the executive upon retirement (see p. 27) did not change in 2017, only the valuation of the benefit at the required valuation date. "Total Without Change in Pension Value" shows total compensation as determined under SEC rules minus the change in pension value and executive death benefits.
|
Name and 2017
Principal Positions
|
Year
|
|
Salary
($) (1)
|
|
Stock
Awards
($) (2)
|
|
Nonequity
Incentive
Plan
Compen-
sation
($) (3)
|
|
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings ($) (4)
|
|
All Other
Compen-
sation
($) (5)
|
|
Total
Without
Change in
Pension
Value
($) (6)
|
|
Total ($)
|
|||||||
Alan M. Oshima
|
2017
|
|
655,583
|
|
|
1,071,359
|
|
|
847,170
|
|
|
187,506
|
|
|
13,230
|
|
|
2,587,342
|
|
|
2,774,848
|
|
President and Chief Executive Officer
|
2016
|
|
583,500
|
|
|
379,282
|
|
|
445,939
|
|
|
153,231
|
|
|
21,296
|
|
|
1,430,017
|
|
|
1,583,248
|
|
|
2015
|
|
566,500
|
|
|
283,247
|
|
|
427,168
|
|
|
111,620
|
|
|
23,632
|
|
|
1,300,547
|
|
|
1,412,167
|
|
Tayne S. Y. Sekimura
|
2017
|
|
350,583
|
|
|
304,319
|
|
|
270,156
|
|
|
560,716
|
|
|
—
|
|
|
925,058
|
|
|
1,485,774
|
|
Senior Vice President and Chief Financial Officer
|
2016
|
|
342,000
|
|
|
119,690
|
|
|
173,061
|
|
|
400,247
|
|
|
—
|
|
|
634,751
|
|
|
1,034,998
|
|
2015
|
|
332,000
|
|
|
116,201
|
|
|
166,896
|
|
|
110,227
|
|
|
—
|
|
|
615,097
|
|
|
725,324
|
|
|
Jimmy D. Alberts
|
2017
|
|
269,283
|
|
|
219,776
|
|
|
198,052
|
|
|
68,705
|
|
|
18,214
|
|
|
705,325
|
|
|
774,030
|
|
Senior Vice President, Customer Service
|
2016
|
|
262,700
|
|
|
91,943
|
|
|
119,640
|
|
|
49,950
|
|
|
22,639
|
|
|
496,922
|
|
|
546,872
|
|
2015
|
|
255,000
|
|
|
89,242
|
|
|
115,369
|
|
|
28,616
|
|
|
24,674
|
|
|
484,285
|
|
|
512,901
|
|
|
Susan A. Li
|
2017
|
|
276,750
|
|
|
225,889
|
|
|
191,549
|
|
|
437,303
|
|
|
—
|
|
|
694,188
|
|
|
1,131,491
|
|
Senior Vice President, General Counsel, Chief Compliance & Administrative Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Jay M. Ignacio
|
2017
|
|
285,100
|
|
|
247,466
|
|
|
198,617
|
|
|
526,579
|
|
|
—
|
|
|
731,183
|
|
|
1,257,762
|
|
President, Hawaii Electric Light and Senior Operations Advisor to the Hawaiian Electric President and CEO
|
2016
|
|
278,100
|
|
|
97,325
|
|
|
126,654
|
|
|
391,590
|
|
|
—
|
|
|
502,079
|
|
|
893,669
|
|
2015
|
|
255,417
|
|
|
85,733
|
|
|
115,596
|
|
|
115,118
|
|
|
—
|
|
|
456,746
|
|
|
571,864
|
|
1.
|
Salary.
This column represents cash base salary received for the year.
|
2.
|
Stock Awards
. These amounts represent the aggregate grant date fair value of stock awards granted in the years shown computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (FASB ASC Topic 718). For 2017, these amounts are composed of: (i) the opportunity (based on probable outcome of performance conditions (in this case, target) as of the grant date) to earn shares of HEI common stock in the future pursuant to the 2017-19 LTIP if pre-established performance goals are achieved and (ii) RSUs vesting in installments over a four-year period. For 2015 and 2016, these amounts were comprised of RSUs granted in the year shown and vesting in installments over a four-year period, and excludes the value of the 2015-2017 and 2016-2018 LTIP granted in those years. Since the 2015-17 LTIP is denominated in cash rather than in stock, in accordance with SEC rules, the cash payout is reported in the "Nonequity Incentive Plan Compensation" column in this Summary Compensation Table for 2017. Since the 2016-18 LTIP is denominated in cash rather than in stock, in accordance with SEC rules, the cash payout (if any) will be reported in the "Nonequity Incentive Plan Compensation" column in the 2018 Summary Compensation Table. See the 2017 Grants of Plan-Based Awards table below for the portion of the amount in the Stock Awards column above that is composed of 2017 grants of RSUs and performance award opportunities under the 2017-19 LTIP. Assuming achievement of the highest level of performance conditions, the maximum value of the performance awards payable in 2020 under the 2017-19 LTIP would be: Mr. Oshima $1,290,493; Ms. Sekimura $363,196; Mr. Alberts $251,093; Ms. Li $258,064; and Mr. Ignacio $295,385. For a discussion of the assumptions underlying the amounts set out for the RSUs and and 2017-2019 LTIP, see Note
9
to the Consolidated Financial Statements in the Annual Report on Form 10-K to which this Exhibit 99.1 is attached.
|
3.
|
Nonequity Incentive Plan Compensation
. These amounts represent cash payouts to named executive officers under the annual incentive plan, the Executive Incentive Compensation Plan (EICP), earned for the years shown. For 2017, the amount in this column also included the cash payout from the 2015-17 LTIP.
|
4.
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings
. These amounts represent the change in present value of the accrued pension and executive death benefits from beginning of year to end of year for 2015, 2016 and 2017. These amounts are not current payments; pension and executive death benefits are only paid after retirement or death, as applicable. The amounts in this column depend heavily on changes in actuarial assumptions, such as discount rates. The increase in 2017 present value of pensions (and, for Ms. Sekimura, Ms. Li and Mr. Ignacio, executive death benefits) from 2016 was magnified by the decrease in discount rate and was partially offset by lower expected rates of improvement in the mortality tables based on Scale MP-2017 published by the Society of Actuaries. The 2016 present value of pensions (and, for Ms. Sekimura and Mr. Ignacio, executive death benefits) increased from 2015 due to a lower discount rate and lower expected rates of improvement in the mortality tables based on Scale MP-2017 published by the Society of Actuaries. For a further discussion of the applicable plans, see the 2017 Pension Benefits table and related notes below. No Hawaiian Electric named executive officer had above-market or preferential earnings on nonqualified deferred compensation for the periods covered in the table above.
|
5.
|
All Other Compensation
. The following table summarizes the components of “All Other Compensation” with respect to 2017:
|
Name
|
Contributions to Defined Contribution
Plans ($)
a
|
|
Other
($)
b
|
|
Total All Other
Compensation
($)
|
|
Alan M. Oshima
|
8,100
|
|
5,130
|
|
13,230
|
|
Tayne S.Y. Sekimura*
|
—
|
|
—
|
|
—
|
|
Jimmy D. Alberts
|
7,915
|
|
10,299
|
|
18,214
|
|
Susan A. Li*
|
—
|
|
—
|
|
—
|
|
Jay M. Ignacio*
|
—
|
|
—
|
|
—
|
|
a
|
Messrs. Oshima and Alberts received matching contributions to their accounts in the HEI 401(k) Plan up to the amount permitted based on eligible compensation ($270,000 in 2017).
|
b
|
Mr. Oshima received club membership dues. Mr. Alberts received club membership dues and had one more week of vacation than employees with similar length of service would usually receive.
|
*
|
The total value of perquisites and other personal benefits for Ms. Sekimura, Ms. Li and Mr. Ignacio was less than $10,000 for 2017 and is therefore not included in the table above.
|
6.
|
Total Without
Change in Pension Value
. Total Without Change in Pension Value represents total compensation as determined under SEC rules, minus the change in pension value and executive death benefits amount reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column. We include this column because the magnitude of the change in pension value and death benefits in a given year is largely determined by actuarial assumptions, such as discount rates and mortality assumptions set by the Society of Actuaries, and does not reflect decisions made by the HEI Compensation Committee or Hawaiian Electric Board for that year or the actual benefit necessarily to be received by the recipient. The amounts reported in the Total Without Change in Pension Value column may differ substantially from the amounts reported in the Total column and are not a substitute for the Total column.
|
|
|
|
Estimated Future Payouts
Under Nonequity Incentive
Plan Awards (1)
|
|
Estimated Future Payouts
Under Equity Incentive Plan
Awards (2)
|
|
All Other
Stock Awards: Number of Shares
of Stock
or Units
(#) (3)
|
|
Grant Date Fair Value
of Stock
Awards
($) (4)
|
||||||||||||||||
Name
|
Grant
Date
|
|
Thres-
hold ($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Thres-
hold (#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|
||||||||||
Alan M. Oshima
|
1/31/17 EICP
|
|
245,844
|
|
|
491,687
|
|
|
983,375
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1/31/17 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,301
|
|
|
18,602
|
|
|
37,205
|
|
|
—
|
|
|
645,226
|
|
|
1/31/17 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,728
|
|
|
426,133
|
|
Tayne S. Y. Sekimura
|
1/31/17 EICP
|
|
87,646
|
|
|
175,292
|
|
|
350,583
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1/31/17 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,618
|
|
|
5,236
|
|
|
10,471
|
|
|
—
|
|
|
181,615
|
|
|
1/31/17 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,665
|
|
|
122,704
|
|
Jimmy D. Alberts
|
1/31/17 EICP
|
|
60,589
|
|
|
121,177
|
|
|
242,355
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1/31/17 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,810
|
|
|
3,619
|
|
|
7,239
|
|
|
—
|
|
|
125,530
|
|
|
1/31/17 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,815
|
|
|
94,246
|
|
Susan A. Li
|
1/31/17 EICP
|
|
62,269
|
|
|
124,538
|
|
|
249,075
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1/31/17 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,860
|
|
|
3,720
|
|
|
7,440
|
|
|
—
|
|
|
129,031
|
|
|
1/31/17 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,893
|
|
|
96,858
|
|
Jay M. Ignacio
|
1/31/17 EICP
|
|
64,148
|
|
|
128,295
|
|
|
256,590
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1/31/17 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,129
|
|
|
4,258
|
|
|
8,516
|
|
|
—
|
|
|
147,696
|
|
|
1/31/17 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,980
|
|
|
99,770
|
|
EICP
|
Executive Incentive Compensation Plan (annual incentive)
|
LTIP
|
Long-Term Incentive Plan (2017-19 period)
|
RSU
|
Restricted stock units
|
1.
|
Estimated Future Payouts Under Nonequity Incentive Plan Awards
. Shows possible cash payouts under the 2017 EICP based on meeting performance goals set in January 2017 at threshold, target and maximum levels. Actual payouts for the 2017 EICP are reported in the 2017 Summary Compensation Table above.
|
2.
|
Estimated Future Payouts Under Equity Incentive Plan Awards
. Represents number of shares of stock that may be issued under the 2017-19 LTIP based upon the achievement of performance goals set in January 2017 at threshold, target and maximum levels and vesting at the end of the three-year performance period. LTIP awards are forfeited for terminations of employment during the vesting period, except for terminations due to death, disability or retirement, which allow for pro-rata participation based upon completed months of service after a minimum number of months of service in the performance period. Dividend equivalent shares, not included in the chart, compounded over the period at the actual dividend rate and are paid at the end of the performance period based on actual shares earned.
|
3.
|
All Other Stock Awards: Number of Shares of Stock or Units
. Represents number of RSUs awarded in 2017 that will vest and be issued as unrestricted stock in four equal annual installments on the grant date anniversaries. Unvested awards are forfeited for terminations of employment during the vesting period, except for terminations due to death, disability or retirement, which allow for pro-rata vesting up to the date of termination. Receipt of RSU awards is generally subject to continued employment and expiration of the applicable vesting period. Dividend equivalent shares, not included in the chart, compound over the period at the actual dividend rate and are paid in HEI stock on RSUs vesting in a given year.
|
4.
|
Grant Date Fair Value of Stock Awards
. Grant date fair value for shares under the 2017-19 LTIP is estimated in accordance with the fair-value based measurement of accounting as described in FASB ASC Topic 718 based upon the probable (in this case, target) outcome of the performance conditions as of the grant date. For a discussion of the assumptions and methodologies used to calculate the amounts reported, see the discussion of performance awards contained in Note
9
(Share-based compensation) to the Consolidated Financial Statements in the 2017 Annual Report on Form 10-K. Grant date fair value for RSUs is based on the closing price of HEI common stock on the NYSE on the date of the grant of the award.
|
|
|
Stock Awards
|
|||||||||||
|
|
|
|
|
Equity Incentive Plan Awards
|
||||||||
|
|
|
Shares or Units of Stock That Have Not Vested (1)
|
|
Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3)
|
|
Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (2)
|
||||||
Name
|
Grant Year
|
|
Number (#)
|
|
Market Value ($) (2)
|
|
|
||||||
Alan M. Oshima
|
2014
|
|
1,479
|
|
|
53,466
|
|
|
—
|
|
|
—
|
|
|
2015
|
|
4,197
|
|
|
151,722
|
|
|
—
|
|
|
—
|
|
|
2016
|
|
9,514
|
|
|
343,931
|
|
|
—
|
|
|
—
|
|
|
2017
|
|
12,728
|
|
|
460,117
|
|
|
—
|
|
|
—
|
|
|
2017
|
|
—
|
|
|
—
|
|
|
18,602
|
|
|
672,462
|
|
|
Total
|
|
27,918
|
|
|
1,009,236
|
|
|
18,602
|
|
|
672,462
|
|
Tayne S. Y. Sekimura
|
2014
|
|
1,117
|
|
|
40,380
|
|
|
—
|
|
|
—
|
|
2015
|
|
1,722
|
|
|
62,250
|
|
|
—
|
|
|
—
|
|
|
|
2016
|
|
3,002
|
|
|
108,522
|
|
|
—
|
|
|
—
|
|
|
2017
|
|
3,665
|
|
|
132,490
|
|
|
—
|
|
|
—
|
|
|
2017
|
|
—
|
|
|
—
|
|
|
5,236
|
|
|
189,281
|
|
|
Total
|
|
9,506
|
|
|
343,642
|
|
|
5,236
|
|
|
189,281
|
|
Jimmy D. Alberts
|
2014
|
|
867
|
|
|
31,342
|
|
|
—
|
|
|
—
|
|
2015
|
|
1,323
|
|
|
47,826
|
|
|
—
|
|
|
—
|
|
|
|
2016
|
|
2,306
|
|
|
83,362
|
|
|
—
|
|
|
—
|
|
|
2017
|
|
2,815
|
|
|
101,762
|
|
|
—
|
|
|
—
|
|
|
2017
|
|
—
|
|
|
—
|
|
|
3,619
|
|
|
130,827
|
|
|
Total
|
|
7,311
|
|
|
264,292
|
|
|
3,619
|
|
|
130,827
|
|
Susan A. Li
|
2014
|
|
787
|
|
|
28,450
|
|
|
—
|
|
|
—
|
|
2015
|
|
1,218
|
|
|
44,031
|
|
|
—
|
|
|
—
|
|
|
|
2016
|
|
2,371
|
|
|
85,712
|
|
|
—
|
|
|
—
|
|
|
2017
|
|
2,893
|
|
|
104,582
|
|
|
—
|
|
|
—
|
|
|
2017
|
|
—
|
|
|
—
|
|
|
3,720
|
|
|
134,478
|
|
|
Total
|
|
7,269
|
|
|
262,775
|
|
|
3,720
|
|
|
134,478
|
|
Jay M. Ignacio
|
2014
|
|
801
|
|
|
28,956
|
|
|
—
|
|
|
—
|
|
2015
|
|
1,271
|
|
|
45,947
|
|
|
—
|
|
|
—
|
|
|
|
2016
|
|
2,441
|
|
|
88,242
|
|
|
—
|
|
|
—
|
|
|
2017
|
|
2,980
|
|
|
107,727
|
|
|
—
|
|
|
—
|
|
|
2017
|
|
—
|
|
|
—
|
|
|
4,258
|
|
|
153,927
|
|
|
Total
|
|
7,493
|
|
|
270,872
|
|
|
4,258
|
|
|
153,927
|
|
1.
|
Shares or Units of Stock That Have Not Vested
. The remaining installments of the 2014 RSUs vested on February 5, 2018. Of the remaining installments of the 2015 RSUs, one installment vested on February 6, 2018 and the remainder will vest on February 6, 2019. Of the remaining installments of the 2016 RSUs, one installment vested on February 5, 2018 and the remainder will vest in equal annual installments on February 5, 2019 and 2020. For the 2017 RSUs, one installment vested on January 31, 2018 and the remainder will vest in equal annual installments on January 31, 2019, 2020 and 2021.
|
2.
|
Market Value
. Market value is based upon the closing per‑share trading price of HEI common stock on the NYSE of $36.15 as of December 29, 2017.
|
3.
|
Number of Unearned Shares, Units or Other Rights That Have Not Vested
. Represents number of shares of HEI common stock that would be issued under the 2017-19 LTIP if performance goals are met at the target level at the end of the three-year performance period.
|
|
|
Stock Awards
|
|||||
Name
|
|
Number of Shares Acquired on Vesting (#)
|
|
Value Realized on Vesting ($)
|
|||
Alan M. Oshima
|
|
8,868
|
|
(1)
|
|
299,561
|
|
Tayne S. Y. Sekimura
|
|
4,456
|
|
(1)
|
|
150,524
|
|
Jimmy D. Alberts
|
|
3,455
|
|
(1)
|
|
116,710
|
|
Susan A. Li
|
|
2,379
|
|
(1)
|
|
80,363
|
|
Jay M. Ignacio
|
|
3,316
|
|
(1)
|
|
112,015
|
|
Name
|
|
Number of Shares Acquired on Vesting
|
|
Compounded Dividend Equivalents
|
|
Total Shares Acquired on Vesting
|
Alan M. Oshima
|
|
8,104
|
|
764
|
|
8,868
|
Tayne S. Y. Sekimura
|
|
3,997
|
|
459
|
|
4,456
|
Jimmy D. Alberts
|
|
3,097
|
|
358
|
|
3,455
|
Susan A. Li
|
|
2,189
|
|
190
|
|
2,379
|
Jay M. Ignacio
|
|
2,981
|
|
335
|
|
3,316
|
Name
|
Plan Name
|
|
Number of
Years of Credited
Service (#)
|
|
Present Value of
Accumulated
Benefit ($) (4)
|
|
Payments During
the Last Fiscal
Year ($)
|
||
Alan M. Oshima
|
HEI Retirement Plan (1)
|
|
6.2
|
|
|
306,686
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
6.2
|
|
|
386,222
|
|
|
—
|
Tayne S. Y. Sekimura
|
HEI Retirement Plan (1)
|
|
26.6
|
|
|
2,408,070
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
26.6
|
|
|
679,436
|
|
|
—
|
|
HEI Executive Death Benefit (3)
|
|
—
|
|
|
166,476
|
|
|
—
|
Jimmy D. Alberts
|
HEI Retirement Plan (1)
|
|
5.3
|
|
|
239,090
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
5.3
|
|
|
125
|
|
|
—
|
Susan A. Li
|
HEI Retirement Plan (1)
|
|
27.8
|
|
|
2,787,710
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
27.8
|
|
|
45,508
|
|
|
—
|
|
HEI Executive Death Benefit (3)
|
|
—
|
|
|
150,030
|
|
|
—
|
Jay M. Ignacio
|
HEI Retirement Plan (1)
|
|
27.8
|
|
|
2,586,123
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
27.8
|
|
|
100,937
|
|
|
—
|
|
HEI Executive Death Benefit (3)
|
|
—
|
|
|
156,193
|
|
|
—
|
1.
|
The HEI Retirement Plan is the standard retirement plan for HEI and Hawaiian Electric employees. Normal retirement benefits under the HEI Retirement Plan for management employees hired before May 1, 2011, including all of the named executive officers other than Messrs. Oshima and Alberts, are calculated based on a formula of 2.04% × Credited Service (maximum 67%) × Final Average Compensation (average monthly base salary for highest thirty-six consecutive months out of the last ten years). Credited service is generally the same as the years of service with HEI and other participating companies (Hawaiian Electric, Hawaii Electric Light and Maui Electric). Credited service is also provided for limited unused sick leave and for the period a vested participant is on long-term disability. The normal form of benefit is a joint and 50% survivor annuity for married participants and a single life annuity for unmarried participants. Actuarially equivalent optional forms of benefit are also available. Participants who qualify to receive retirement benefits immediately upon termination of employment may also elect a single sum distribution of up to $100,000 with the remaining benefit payable as an annuity. Single sum distributions are not eligible for early retirement subsidies, and so may not be as valuable as an annuity at early retirement. Retirement benefits are increased by an amount equal to approximately 1.4% of the initial benefit every twelve months following retirement. The plan provides benefits at early retirement (prior to age 65), normal retirement (age 65), deferred retirement (over age 65) and death. Subsidized early retirement benefits are available for participants who meet certain age and service requirements at ages 50-64. The accrued normal retirement benefit is reduced by an applicable percentage, which ranges from 30% for early retirement at age 50 with at least 15 years of service to 1% at age 59. Accrued benefits are not reduced for eligible employees who retire at age 60 and above. The early retirement subsidies are not available to employees who terminate employment with vested benefits but prior to satisfying the age and service requirements for the early retirement subsidies.
|
2.
|
As of December 31, 2017, all of the named executive officers were participants in the HEI Excess Pay Plan. Benefits under the HEI Excess Pay Plan are determined using the same formula as the HEI Retirement Plan, but are not subject to the Internal Revenue Code limits on the amount of annual compensation that can be used for calculating benefits under qualified retirement plans ($270,000 in 2017 as indexed for inflation) and on the amount of annual benefits that can be paid from qualified retirement plans (the lesser of $215,000 in 2017 as indexed for inflation, or the participant’s highest average compensation over three consecutive calendar years). Benefits payable under the HEI Excess Pay Plan are reduced by the benefit payable from the HEI Retirement Plan. Early retirement, death benefits and vesting provisions are similar to the HEI Retirement Plan.
|
3.
|
Ms. Sekimura, Ms. Li and Mr. Ignacio are covered by the Executive Death Benefit Plan of HEI and Participating Subsidiaries. The plan was amended effective September 9, 2009 to close participation to new participants and freeze the benefit for existing participants. Under the amendment, death benefits will be paid based on salaries as of September 9, 2009. The plan provides death benefits equal to two times the executive’s base salary as of September 9, 2009 if the executive dies while actively employed or, if disabled, dies prior to age 65, and one times the executive’s base salary as of September 9, 2009 if the executive dies following retirement. The amounts shown in the table above assume death following retirement. Death benefits are grossed up by the amount necessary to pay income taxes on the grossed up benefit amount as an equivalent to the tax exclusion for death benefits paid from a life insurance policy. Messrs. Oshima and Alberts were not employed by the companies at the time the plan was frozen and therefore are not entitled to any benefits under the plan.
|
4.
|
The present value of accumulated benefits for the Hawaiian Electric named executive officers included in the 2017 Pension Benefits table was determined based on the following:
|
a.
|
Discount Rate – The discount rate is the interest rate used to discount future benefit payments in order to reflect the time value of money. The discount rates used in the present value calculations are 3.74% for retirement benefits and 3.72% for executive death benefits as of December 31, 2017.
|
b.
|
Mortality Table – The RP-2017 Mortality Table (separate male and female rates) with generational projection using scale MP-2017 is used to discount future pension benefit payments in order to reflect the probability of survival to any given future date. For the calculation of the executive death benefit present values, the mortality table rates are multiplied by the death benefit to capture the death benefit payments assumed to occur at all future dates. Mortality is applied post-retirement only.
|
c.
|
Retirement Age – A Hawaiian Electric named executive officer included in the table is assumed to remain in active employment until, and assumed to retire at, the later of (a) the earliest age when unreduced pension benefits would be payable or (b) attained age as of December 31, 2017.
|
d.
|
Pre-Retirement Decrements – Pre-retirement decrements refer to events that could occur between the measurement date and the retirement age (such as withdrawal, early retirement and death) that would impact the present value of benefits. No pre-retirement decrements are assumed in the calculation of pension benefit table present values. Pre-retirement decrements are assumed for financial statement purposes.
|
e.
|
Unused Sick Leave – Each Hawaiian Electric named executive officer who participates in the HEI Retirement Plan is assumed to have accumulated 1,160 unused sick leave hours at retirement age.
|
Name
|
Executive
Contributions
in Last FY ($)
1
|
|
Registrant
Contributions
in Last FY ($)
|
|
Aggregate
Earnings/(Losses)
in Last FY ($)
|
|
Aggregate
Withdrawals/
Distributions ($)
|
|
Aggregate
Balance at
Last FYE ($)
2
|
|
Alan M. Oshima
|
—
|
|
—
|
|
139,801
|
|
—
|
|
772,831
|
|
Tayne S.Y. Sekimura
|
138,449
|
|
—
|
|
16,634
|
|
—
|
|
155,083
|
|
Jay M. Ignacio
|
—
|
|
—
|
|
64,813
|
|
—
|
|
285,616
|
|
1.
|
Represents salary and incentive compensation deferrals under the HEI Deferred Compensation Plan, a contributory nonqualified deferred compensation plan implemented in 2011. The plan allows certain HEI and Hawaiian Electric executives to defer 100% of annual base salary in excess of the compensation limit set forth in Internal Revenue Code Section 401(a)(17) ($270,000 in 2017, as indexed for inflation) and up to 80% of any incentive compensation paid in cash. There are no matching or other employer contributions under the plan. The deferred amounts are credited with gains/losses of deemed investments chosen by the participant from a designated list of publicly traded mutual funds and other investment offerings. Earnings are not above-market or preferential and therefore are not included in the 2017 Summary Compensation Table above. The distribution of accounts from the plan is triggered by disability, death or separation from service (including retirement) and will be delayed for a 6-month period to the extent necessary to comply with Internal Revenue Code Section 409A. A participant may elect to receive distributions triggered by separation from service in a lump sum or in substantially equal payments spread over a period not to exceed 15 years. Lump sum benefits are payable in the event of disability or death. Messrs. Oshima and Ignacio and Ms. Sekimura participated in the HEI Deferred Compensation Plan in 2017. The amount listed in the "Executive Contributions in Last FY" column for Ms. Sekimura is reported as compensation in the 2017 Summary Compensation Table for the year 2016.
|
2.
|
Amounts in this column include contributions reported in the Summary Compensation Table for each year in which each executive listed above was a named executive officer.
|
Name/
Benefit Plan or Program
|
Retirement on 12/31/17
($) (1)
|
|
Voluntary Termination on 12/31/17 ($) (2)
|
|
Termination for Cause on 12/31/2017 ($) (3)
|
|
Termination without Cause on 12/31/17 ($) (4)
|
|
Qualifying Termination after Change in Control on 12/31/17
($) (5)
|
|||||
Alan M. Oshima
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Incentive Compensation Plan (6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (7)
|
601,976
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
601,976
|
|
Restricted Stock Units (8)
|
368,548
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,081,355
|
|
TOTAL
|
970,524
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,683,331
|
|
Tayne S. Y. Sekimura
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Incentive Compensation Plan (6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (7)
|
179,438
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
179,438
|
|
Restricted Stock Units (8)
|
145,793
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
371,910
|
|
TOTAL
|
325,231
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
551,348
|
|
Jimmy D. Alberts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Incentive Compensation Plan (6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (7)
|
124,038
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124,038
|
|
Restricted Stock Units (8)
|
112,314
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
286,019
|
|
TOTAL
|
236,352
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
410,057
|
|
Susan A. Li
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Incentive Compensation Plan (6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (7)
|
127,493
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127,493
|
|
Restricted Stock Units (8)
|
108,750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
283,813
|
|
TOTAL
|
236,243
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
411,306
|
|
Jay M. Ignacio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Incentive Compensation Plan (6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (7)
|
145,918
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
145,918
|
|
Restricted Stock Units (8)
|
111,949
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
292,562
|
|
TOTAL
|
257,867
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
438,480
|
|
1.
|
Retirement Payments & Benefits
. All named executive officers were eligible for retirement as of December 31, 2017. Amounts in this column do not include amounts payable under the 2017 EICP and 2015-17 LTIP because those amounts would have vested without regard to retirement since December 31, 2017 was the end of the applicable performance periods. In addition to the amounts shown in this column, retired executives are entitled to receive their vested retirement plan and deferred compensation benefits under all termination scenarios. See the 2017 Pension Benefits and the 2017 Nonqualified Deferred Compensation tables above.
|
2.
|
Voluntary Termination Payments & Benefits
. If a Hawaiian Electric named executive officer voluntarily terminates employment, he or she could lose any annual or long-term incentives based upon the HEI Compensation Committee’s right to amend, suspend or terminate any incentive award or any portion of it at any time. Voluntary termination results in the forfeiture of unvested RSUs and participation in incentive plans. Amounts in this column do not include amounts payable under the 2017 EICP or the 2015-17 LTIP because those amounts would have vested without regard to voluntary termination since December 31, 2017 was the end of the applicable performance periods.
|
3.
|
Termination for Cause Payments & Benefits.
If the executive is terminated for cause, he or she could lose any annual or long-term incentives based upon the HEI Compensation Committee’s right to amend, suspend or terminate any incentive award or any portion of it at any time. “Cause” generally means a violation of the HEI Corporate Code of Conduct, which is available for review at www.hei.com/govdocs, or, for purposes of awards under the 2010 Equity and Incentive Plan, as amended (EIP), has the meaning set forth in such plans. Termination for cause results in the forfeiture of all unvested RSUs and participation in incentive plans.
|
4.
|
Termination without Cause Payments & Benefits.
If the executive is terminated without cause, he or she could lose any annual or long-term incentives based upon the HEI Compensation Committee’s right to amend, suspend or terminate any incentive award or any portion of it at any time. Termination without cause results in the forfeiture of unvested RSUs.
|
5.
|
Qualifying Termination after Change-in-Control Payments & Benefits.
None of the Hawaiian Electric named executive officers were party to a change-in-control agreement on December 31, 2017.
|
6.
|
Executive Incentive Compensation Plan (EICP).
Upon death, disability or retirement, executives continue to participate in the EICP on a pro-rata basis if the executive has met applicable minimum service requirements, with lump sum payment to be made by Hawaiian Electric if the applicable performance goals are achieved. The EIP provides that in the event of an involuntary termination following a change in control, the EICP award would be immediately paid out at target level, pro-rated for completed months of service in the performance period. If there is no termination or a voluntary termination following a change in control, the EIP provides that: (i) the acquiring entity shall assume all outstanding EICP awards or substitute similar awards or (ii) to the extent the acquiring entity refuses to assume or substitute such awards, such awards shall become fully vested (with all performance goals deemed achieved at 100% of target levels).
|
7.
|
Long-Term Incentive Plan (LTIP).
Upon death, disability or retirement, executives continue to participate in each ongoing LTIP cycle on a pro-rata basis if the executive has met applicable minimum service requirements, with lump sum payment to be made by Hawaiian Electric if performance goals are achieved. The amounts shown are at target for goals deemed achievable (or at below the threshold, if deemed unachievable at the date of termination) for all applicable plan years, pro-rated based upon service through December 31, 2017; actual payouts will depend upon performance achieved at the end of the plan cycle. The EIP provides that in the event of an involuntary termination following a change in control, the LTIP award would be immediately paid out at target level, pro-rated for completed months of service in the performance period. If there is no termination or a voluntary termination following a change in control, the EIP provides that: (i) the acquiring entity shall assume all outstanding LTIP awards or substitute similar awards or (ii) to the extent the acquiring entity refuses to assume or substitute such awards, such awards shall become fully vested (with all performance goals deemed achieved at 100% of target levels).
|
8.
|
Restricted Stock Units (RSUs).
Termination for or without cause results in the forfeiture of unvested RSUs. Termination due to death, disability or retirement results in pro-rata vesting of RSUs. If there is a change in control, either (i) the acquiring entity shall assume all outstanding RSUs or substitute similar awards and such awards would vest in full upon a qualifying termination of employment within two years following the change in control or (ii) to the extent the acquiring entity refuses to assume or substitute such awards, such awards shall become fully vested.
|
(1)
|
These amounts are attributable to a change in the value of each individual’s defined benefit pension account balance and do not represent earned or paid compensation. Despite the fact that these amounts are not paid, they are required to be taken into account for purposes of calculating total annual compensation for SEC reporting purposes. Pension values fluctuate over time - they can rise or fall year-to-year and are dependent on many variables including market conditions, years of service, earnings, and actuarial assumptions such as discount rates.
|
|
2017
|
||
Hawaiian Electric Director (who is not also an HEI director)
|
$
|
45,000
|
|
Hawaiian Electric Audit Committee Chair
|
10,000
|
|
|
Hawaiian Electric Audit Committee Member
|
4,000
|
|
|
Hawaiian Electric Non-Voting Representative to HEI Compensation Committee
|
6,000
|
|
Name
|
Fees Earned or
Paid in Cash
($) (1)
|
|
Stock
Awards
($) (2)
|
|
Total
($)
|
|||
Don E. Carroll (3)
|
19,038
|
|
|
—
|
|
|
19,038
|
|
Richard J. Dahl (4)
|
6,000
|
|
|
—
|
|
|
6,000
|
|
Timothy E. Johns
Chairman, Audit Committee
|
57,000
|
|
|
55,000
|
|
|
112,000
|
|
Micah A. Kane
|
47,626
|
|
|
55,000
|
|
|
102,626
|
|
Bert A. Kobayashi, Jr.
|
48,940
|
|
|
55,000
|
|
|
103,940
|
|
Kelvin H. Taketa (4)
|
—
|
|
|
—
|
|
|
—
|
|
Jeffrey N. Watanabe (4)
|
—
|
|
|
—
|
|
|
—
|
|
1.
|
Represents cash retainers for board and committee service (as detailed in the chart below).
|
2.
|
Represents an HEI stock award in the value of $55,000, as described above under “Stock Awards.” These equity grants were made on June 30, 2017.
|
3.
|
Mr. Carroll retired effective May 5, 2017.
|
4.
|
Messrs. Dahl, Taketa and Watanabe also served on the HEI Board for all or part of 2017. Information concerning their compensation for such service will be set forth in HEI's 2018 Proxy Statement.
|
Name
|
Hawaiian Electric Board ($) (1)
|
|
Hawaiian Electric Audit
Committee ($) |
|
Hawaiian Electric
Nonvoting Representative
to HEI Compensation Committee ($) |
|
Extra Meeting Fees ($) (2)
|
|
Total Fees Earned
or Paid in
Cash ($)
|
|||||
Don E. Carroll
|
15,577
|
|
|
1,384
|
|
|
2,077
|
|
|
—
|
|
|
19,038
|
|
Richard J. Dahl
|
—
|
|
|
4,000
|
|
|
—
|
|
|
2,000
|
|
|
6,000
|
|
Timothy E. Johns
|
45,000
|
|
|
10,000
|
|
|
—
|
|
|
2,000
|
|
|
57,000
|
|
Micah A. Kane
|
45,000
|
|
|
2,626
|
|
|
—
|
|
|
—
|
|
|
47,626
|
|
Bert A. Kobayashi, Jr.
|
45,000
|
|
|
—
|
|
|
3,940
|
|
|
—
|
|
|
48,940
|
|
Kelvin H. Taketa
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Jeffrey N. Watanabe
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
1.
|
Represents $45,000 annual cash retainer for board service.
|
2.
|
Extra meeting fees earned for attending audit committee meetings in excess of number of meetings specified.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
|
Amount and Nature of Beneficial Ownership of HEI Common Stock
|
|||||||||||||
Name of Individual
or Group
|
Sole Voting or
Investment
Power
(1)
|
|
Shared Voting
or Investment
Power
(2)
|
|
Other
Beneficial
Ownership
(3)
|
|
Restricted
Stock Units
(4)
|
|
Total
(5)
|
|||||
Nonemployee directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard J. Dahl
|
3,990
|
|
|
|
|
|
|
|
|
3,990
|
|
|||
Timothy E. Johns
|
39,168
|
|
|
|
|
|
|
|
|
39,168
|
|
|||
Micah A. Kane
|
8,758
|
|
|
|
|
|
|
|
|
8,758
|
|
|||
Bert A. Kobayashi, Jr.
|
4,408
|
|
|
|
|
|
|
|
|
4,408
|
|
|||
Kelvin H. Taketa
|
37,487
|
|
|
|
|
|
|
|
|
37,487
|
|
|||
Jeffrey N. Watanabe
|
51,721
|
|
|
|
|
5
|
|
|
|
|
51,726
|
|
||
Employee director
|
|
|
|
|
|
|
|
|
|
|||||
Constance H. Lau
|
514,410
|
|
|
|
|
|
|
27,867
|
|
|
542,277
|
|
||
Employee director and Named Executive Officer
|
|
|
|
|
|
|
|
|
|
|||||
Alan M. Oshima
|
|
|
38,403
|
|
|
|
|
13,446
|
|
|
51,849
|
|
||
Other Named Executive Officers
|
|
|
|
|
|
|
|
|
|
|||||
Jimmy D. Alberts
|
13,911
|
|
|
|
|
|
|
3,950
|
|
|
17,861
|
|
||
Jay M. Ignacio
|
20,574
|
|
|
|
|
|
|
3,960
|
|
|
24,534
|
|
||
Susan A. Li
|
9,144
|
|
|
|
|
|
|
3,845
|
|
|
12,989
|
|
||
Tayne S. Y. Sekimura
|
41,245
|
|
|
|
|
|
|
5,128
|
|
|
46,373
|
|
||
All directors and executive officers as a group (17 persons)
|
772,021
|
|
|
39,501
|
|
|
445
|
|
|
64,221
|
|
|
876,188
|
|
(1)
|
Includes the following shares held as of February 5, 2018 in the form of stock units in the HEI common stock fund pursuant to the HEI Retirement Savings Plan: approximately 113 shares for Ms. Lau; 1,707 shares for Ms. Li; 1,111 shares for Ms. Sekimura; 163 shares for Mr. Ignacio; and 8,186 shares for all directors and executive officers as a group. The value of a unit is measured by the closing price of HEI common stock on the measurement date.
|
(2)
|
Includes (i) shares registered in name of the individual and spouse and/or (ii) shares registered in trust with the individual and spouse serving as co-trustees.
|
(3)
|
Shares owned by spouse, children or other relatives sharing the home of the director or officer in which the director or officer disclaims beneficial interest.
|
(4)
|
Includes the number of shares that the individuals named above had a right to acquire as of or within 60 days after February 5, 2018 pursuant to restricted stock units and related dividend equivalent rights thereon, including shares which retirement eligible individuals have a right to acquire upon retirement. These shares are included for purposes of calculating the percentage ownership of each individual named above and all directors and executive officers as a group as described in footnote (5) below, but are not deemed to be outstanding as to any other person.
|
(5)
|
As of February 5, 2018, the directors and executive officers of Hawaiian Electric as a group and each individual named above beneficially owned less than one percent of the record number of outstanding shares of HEI common stock as of that date and no shares were pledged as security.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
1.
|
With respect to Messrs. Johns, Kane, Taketa and Watanabe, the Hawaiian Electric Board considered amounts paid during the last three fiscal years to purchase electricity from Hawaiian Electric (the sole public utility providing electricity to the island of Oahu) by entities by which the director was employed or a family member of the director was an executive officer. None of the amounts paid by these entities for electricity (excluding pass-through charges for fuel, purchased power and Hawaii state revenue taxes) within the last three fiscal years exceeded the NYSE threshold that would automatically result in a director not being independent. The Hawaiian Electric Board also considered that Hawaiian Electric is the sole source of electric power on the island of Oahu and that the rates Hawaiian Electric charges for electricity are fixed by state regulatory authority. Since purchasers of electricity from Hawaiian Electric have no choice as to supplier and no ability to negotiate rates or other terms, the Hawaiian Electric Board determined that these relationships do not impair the independence of Messrs. Johns, Kane, Taketa or Watanabe.
|
2.
|
With respect to Mr. Kane, the Hawaiian Electric Board considered the amount of charitable contributions during the last three fiscal years from HEI and its subsidiaries to the nonprofit organization where he served as an executive officer and modest fees paid during the last three fiscal years to such organization for management of grant and scholarship programs. In concluding that such charitable donations and management fees did not affect Mr. Kane's independence, the Hawaiian Electric Board considered that none of the foregoing amounts within the last three fiscal years exceeded the NYSE threshold that would automatically result in a director not being independent. The Hawaiian Electric Board also considered the fact that Company policy requires that charitable contributions from HEI or its subsidiaries to entities where a director serves as an executive officer, and where the director has a direct or indirect material interest, and the aggregate amount would exceed $120,000 in any single fiscal year, be pre-approved by the HEI Nominating and Corporate Governance Committee and ratified by the Board.
|
3.
|
With respect to Messrs. Johns, Kane and Watanabe, the Hawaiian Electric Board considered other director or officer positions held by those directors at entities for which a Hawaiian Electric officer serves or served as a director and determined that none of these relationships affected the independence of these directors. None of these relationships resulted in a compensation committee interlock or would automatically preclude independence under the NYSE standards.
|
4.
|
With respect to Mr. Johns, the Hawaiian Electric Board considered modest fees paid during the last three fiscal years by HEI and its subsidiaries for banking-related services to a bank where a relative of Mr. Johns is an executive. The Hawaiian Electric Board considered that none of the foregoing amounts within the last three fiscal years exceeded the NYSE threshold that would automatically result in a director not being independent.
|
5.
|
With respect to Mr. Kobayashi, the Hawaiian Electric Board determined that the service of his father as an ASB director; ordinary course of business, market term loans between ASB and certain entities in which Mr. Kobayashi or his family members have an ownership interest; and the participation in a utility electric vehicle charging station pilot project of a property in which Mr. Kobayashi has an ownership interest did not impair Mr. Kobayashi’s independence as a Hawaiian Electric director.
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
|
2017
|
2016
|
|||||
Audit fees (principally consisted of fees associated with the audit of the consolidated financial statements and internal control over financial reporting (Sarbanes-Oxley Act of 2002, Section 404), quarterly reviews, issuances of letters to underwriters, statutory audits, review of registration statements and issuance of consents)
|
$
|
1,375,000
|
|
|
$
|
1,304,000
|
|
Audit-related fees (primarily consisted of fees associated with the audit of the financial statements of certain employee benefit plans in 2016, agreed upon procedures in 2016 and 2017, and consultation on financial accounting and reporting standards and pre-implementation assessment of controls in 2017)
|
468,000
|
|
|
77,775
|
|
||
Tax fees (consisted of review of income tax returns
,
generation repair studies and tax compliance and technical support)
|
—
|
|
|
123,404
|
|
||
All other fees
|
—
|
|
|
—
|
|
||
|
$
|
1,843,000
|
|
|
$
|
1,505,179
|
|
ALLETTE, Inc.
|
MDU Resources Group Inc.
|
Alliant Energy Corp.
|
MGE Energy Inc.
|
Ameren Corp.
|
NextEra Energy Inc.
|
American Electric Power Co.
|
NiSource Inc.
|
Avista Corp.
|
Northwestern Corp.
|
Black Hills Corp.
|
OGE Energy Corp.
|
Centerpoint Energy Inc.
|
Otter Tail Corp.
|
CMS Energy Corp.
|
PG&E Corp.
|
Consolidated Edison Inc.
|
Pinnacle West Capital Corp.
|
Dominion Resources Inc.
|
PNM Resources Inc.
|
DTE Energy Co.
|
Portland General Electric
|
Duke Energy Corp.
|
PPL Corp.
|
Edison International
|
Public Service Enterprise Group Inc.
|
El Paso Electric Co.
|
SCANA Corp.
|
Empire District Electric Co.
|
Sempra Energy
|
Entergy Corp.
|
Southern Co.
|
Eversource Energy
|
Unitil Corp.
|
Exelon Corp.
|
Vectren Corp.
|
FirstEnergy Corp.
|
WEC Energy Group Inc.
|
Great Plains Energy Inc.
|
Westar Energy Inc.
|
Hawaiian Electric Industries Inc.
|
Xcel Energy Inc.
|
IDACORP Inc.
|
|
|
Years ended December 31
|
|||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
||||
UTILITY NET INCOME
|
|
|
|
|
||||||||
GAAP (as reported)
|
$
|
120.0
|
|
$
|
142.3
|
|
$
|
135.7
|
|
|
||
Excluding special items (after‑tax) for EICP and LTIP purposes:
|
|
|
|
|
||||||||
Federal tax reform impacts
2
|
9.2
|
|
—
|
|
—
|
|
|
|||||
Non‑GAAP (adjusted) net income for 2017 EICP purposes
|
129.1
|
|
|
|
|
|
||||||
Excluding special items (after‑tax) for LTIP purposes only:
|
|
|
|
|
||||||||
Rate adjustment mechanism reversion to lagged method
3
|
13.9
|
|
|
|
|
|||||||
Costs related to the terminated merger with NextEra Energy
|
—
|
|
0.1
|
|
0.5
|
|
|
|||||
Costs related to the terminated LNG contract
|
—
|
|
2.1
|
|
—
|
|
|
|||||
PUC decoupling order imposing changes in Hawaiian Electric's RAM
|
7.7
|
|
7.7
|
|
7.7
|
|
|
|||||
Non‑GAAP (adjusted) net income for 2015-17 LTIP purposes
|
$
|
150.7
|
|
$
|
152.2
|
|
$
|
143.9
|
|
|
|
|
UTILITY RETURN ON AVERAGE COMMON EQUITY (%)
|
|
|
|
|
||||||||
Based on GAAP
|
6.6
|
|
8.1
|
|
8.0
|
|
|
|||||
Based on non‑GAAP (adjusted) for 2015‑17 LTIP purposes
|
8.2
|
|
8.6
|
|
8.4
|
|
|
|||||
HEI CONSOLIDATED NET INCOME
|
|
|
|
|
||||||||
GAAP (as reported)
|
$
|
165.3
|
|
$
|
248.3
|
|
$
|
159.9
|
|
$
|
168.1
|
|
Excluding special items (after‑tax) for LTIP purposes:
|
|
|
|
|
||||||||
Federal tax reform and related impacts
2
|
14.2
|
|
—
|
|
—
|
|
—
|
|
||||
Rate adjustment mechanism reversion to lagged method
3
|
13.9
|
|
—
|
|
—
|
|
—
|
|
||||
(Income) expenses relating to terminated merger with NextEra Energy
|
—
|
|
(60.3
|
)
|
15.8
|
|
4.9
|
|
||||
Costs related to the terminated LNG contract
|
—
|
|
2.1
|
|
—
|
|
—
|
|
||||
PUC decoupling order imposing changes in Hawaiian Electric’s RAM
|
7.7
|
|
7.7
|
|
7.7
|
|
—
|
|
||||
ASB Pension defeasement
|
0.7
|
|
0.3
|
|
0.4
|
|
—
|
|
||||
Non‑GAAP (adjusted) net income for 2015‑17 LTIP purposes
|
$
|
201.7
|
|
$
|
198.0
|
|
$
|
183.8
|
|
$
|
173.0
|
|
HEI CONSOLIDATED BASIC EARNINGS PER SHARE
|
|
|
|
|
||||||||
Based on GAAP
|
$
|
1.52
|
|
$
|
2.30
|
|
$
|
1.50
|
|
$
|
1.65
|
|
Based on non‑GAAP (adjusted) for 2015‑17 LTIP purposes
|
$
|
1.85
|
|
$
|
1.83
|
|
$
|
1.73
|
|
$
|
1.70
|
|