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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
|
Registrant
|
|
Title of each class
|
Hawaiian Electric Industries, Inc.
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None
|
Hawaiian Electric Company, Inc.
|
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Cumulative Preferred Stock
|
|
|
|
Hawaiian Electric Industries Inc. Yes
X
No
|
Hawaiian Electric Company, Inc. Yes
No
X
|
Hawaiian Electric Industries Inc. Yes
No
X
|
Hawaiian Electric Company, Inc. Yes
No
X
|
Hawaiian Electric Industries Inc. Yes
X
No
|
Hawaiian Electric Company, Inc. Yes
X
No
|
Hawaiian Electric Industries Inc. Yes
X
No
|
Hawaiian Electric Company, Inc. Yes
X
No
|
Hawaiian Electric Industries Inc.
|
Large accelerated filer
X
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
|
Hawaiian Electric Company, Inc.
|
Large accelerated filer
Accelerated filer
Non-accelerated filer
X
Smaller reporting company
Emerging growth company
|
Hawaiian Electric Industries Inc. Yes
No
|
Hawaiian Electric Company, Inc. Yes
No
|
Hawaiian Electric Industries Inc. Yes
No
X
|
Hawaiian Electric Company, Inc. Yes
No
X
|
|
|
|
|
Aggregate market value
of the voting and non-
voting common equity
held by non-affiliates of
the registrants as of
|
|
Number of shares of common stock
outstanding of the registrants as of
|
||
|
|
June 30, 2018
|
|
June 30, 2018
|
|
February 13, 2019
|
Hawaiian Electric Industries, Inc. (HEI)
|
|
$3,734,558,104
|
|
108,879,245
(Without par value)
|
|
108,936,902
(Without par value)
|
Hawaiian Electric Company, Inc. (Hawaiian Electric)
|
|
None
|
|
16,142,216
($6 2/3 par value)
|
|
16,751,488
($6 2/3 par value)
|
|
|
|
|
|
|
|
|
|
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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||
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Terms
|
|
Definitions
|
|
|
|
ABO
|
|
Accumulated benefit obligation
|
ADIT
|
|
Accumulated deferred income tax balances
|
AES Hawaii
|
|
AES Hawaii, Inc.
|
AFS
|
|
Available-for-sale
|
AFUDC
|
|
Allowance for funds used during construction
|
AOCI
|
|
Accumulated other comprehensive income (loss)
|
AOS
|
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Adequacy of supply
|
APBO
|
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Accumulated postretirement benefit obligation
|
ARO
|
|
Asset retirement obligations
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ASB
|
|
American Savings Bank, F.S.B., a wholly-owned subsidiary of ASB Hawaii Inc.
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ASB Hawaii
|
|
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
|
ASU
|
|
Accounting Standards Update
|
Btu
|
|
British thermal unit
|
CAA
|
|
Clean Air Act
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CERCLA
|
|
Comprehensive Environmental Response, Compensation and Liability Act
|
Chevron
|
|
Chevron Products Company, which assigned their fuel oil supply contracts with the Utilities to Island Energy Services, LLC.
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CIAC
|
|
Contributions in aid of construction
|
CIP CT-1
|
|
Campbell Industrial Park 110 MW combustion turbine No. 1
|
CIS
|
|
Customer Information System
|
Company
|
|
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.; Pacific Current, LLC and its subsidiaries, Hamakua Holdings, LLC (and its subsidiary, Hamakua Energy, LLC) and Mauo Holdings, LLC (and its subsidiary, Mauo, LLC); The Old Oahu Tug Service, Inc. (formerly Hawaiian Tug & Barge Corp.) and HEI Properties, Inc. (dissolved in 2015 and wound up in 2017).
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
|
|
HEI’s or Hawaiian Electric’s 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
|
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
|
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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State of Hawaii Department of Health
|
DRIP
|
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HEI Dividend Reinvestment and Stock Purchase Plan
|
ECAC
|
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Energy cost adjustment clause
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ECRC
|
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Energy cost recovery 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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Terms
|
|
Definitions
|
|
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ERP/EAM
|
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Enterprise Resource Planning/Enterprise Asset Management
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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
|
|
Fitch Ratings, Inc.
|
FNMA
|
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Federal National Mortgage Association
|
FRB
|
|
Federal Reserve Board
|
GAAP
|
|
Accounting principles generally accepted in the United States of America
|
GHG
|
|
Greenhouse gas
|
GNMA
|
|
Government National Mortgage Association
|
Gramm Act
|
|
Gramm-Leach-Bliley Act of 1999
|
Hamakua Energy
|
|
Hamakua Energy, LLC, an indirect subsidiary of Pacific Current
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.
|
Hawaii Electric Light
|
|
Hawaii Electric Light Company, Inc., an electric utility subsidiary of Hawaiian Electric Company, Inc.
|
Hawaiian Electric
|
|
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.
|
Hawaiian Electric’s MD&A
|
|
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
|
HEI
|
|
Hawaiian Electric Industries, Inc., direct parent company of Hawaiian Electric Company, Inc., ASB Hawaii, Inc., Pacific Current, LLC, The Old Oahu Tug Service, Inc. (formerly Hawaiian Tug & Barge Corp.) and HEI Properties, Inc. (dissolved in 2015 and wound up in 2017)
|
HEI’s 2019 Proxy Statement
|
|
Selected sections of Proxy Statement for the 2019 Annual Meeting of Shareholders of Hawaiian Electric Industries, Inc. to be filed after the date of this Form 10-K and not later than 120 days after December 31, 2018, which are incorporated in this Form 10-K by reference
|
HEI’s MD&A
|
|
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
|
HEIPI
|
|
HEI Properties, Inc. (dissolved in 2015 and wound up in 2017), a wholly-owned subsidiary of Hawaiian Electric Industries, Inc.
|
HEIRSP
|
|
Hawaiian Electric Industries Retirement Savings Plan
|
HELOC
|
|
Home equity line of credit
|
HPOWER
|
|
City and County of Honolulu with respect to a power purchase agreement for a refuse-fired plant
|
HTB
|
|
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.
|
HTM
|
|
Held-to-maturity
|
IPP
|
|
Independent power producer
|
IRP
|
|
Integrated resource plan
|
IRR
|
|
Interest rate risk
|
Island Energy
|
|
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
|
|
Kalaeloa Partners, L.P.
|
kV
|
|
Kilovolt
|
kW
|
|
Kilowatt/s (as applicable)
|
kWh
|
|
Kilowatthour/s (as applicable)
|
LNG
|
|
Liquefied natural gas
|
LSFO
|
|
Low sulfur fuel oil
|
Terms
|
|
Definitions
|
|
|
|
LTIP
|
|
Long-term incentive plan
|
MATS
|
|
Mercury and Air Toxics Standards
|
Maui Electric
|
|
Maui Electric Company, Limited, an electric utility subsidiary of Hawaiian Electric Company, Inc.
|
Mauo
|
|
Mauo, LLC, an indirect subsidiary of Pacific Current
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MBtu
|
|
Million British thermal unit
|
MD&A
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Merger
|
|
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.
|
Merger Agreement
|
|
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
|
Moody’s
|
|
Moody’s Investors Service’s
|
MOU
|
|
Memorandum of Understanding
|
MPIR
|
|
Major Project Interim Recovery
|
MSFO
|
|
Medium sulfur fuel oil
|
MSR
|
|
Mortgage servicing right
|
MW
|
|
Megawatt/s (as applicable)
|
MWh
|
|
Megawatthour/s (as applicable)
|
NA
|
|
Not applicable
|
NAAQS
|
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National Ambient Air Quality Standard
|
NEE
|
|
NextEra Energy, Inc.
|
NEM
|
|
Net energy metering
|
NII
|
|
Net interest income
|
NM
|
|
Not meaningful
|
NPBC
|
|
Net periodic benefits costs
|
NPPC
|
|
Net periodic pension costs
|
O&M
|
|
Other operation and maintenance
|
OCC
|
|
Office of the Comptroller of the Currency
|
OPEB
|
|
Postretirement benefits other than pensions
|
OTS
|
|
Office of Thrift Supervision, Department of Treasury
|
OTTI
|
|
Other-than-temporary impairment
|
Pacific Current
|
|
Pacific Current, LLC, a wholly owned subsidiary of HEI and indirect parent company of Hamakua Energy and Mauo
|
PBO
|
|
Projected benefit obligation
|
PCB
|
|
Polychlorinated biphenyls
|
PGV
|
|
Puna Geothermal Venture
|
PIMs
|
|
Performance incentive mechanisms
|
PPA
|
|
Power purchase agreement
|
PPAC
|
|
Purchased power adjustment clause
|
PSD
|
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Prevention of Significant Deterioration
|
PSIPs
|
|
Power Supply Improvement Plans
|
PUC
|
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Public Utilities Commission of the State of Hawaii
|
PURPA
|
|
Public Utility Regulatory Policies Act of 1978
|
PV
|
|
Photovoltaic
|
QF
|
|
Qualifying Facility under the Public Utility Regulatory Policies Act of 1978
|
QTL
|
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Qualified Thrift Lender
|
RAM
|
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Rate adjustment mechanism
|
RBA
|
|
Revenue balancing account
|
Registrant
|
|
Each of Hawaiian Electric Industries, Inc. and Hawaiian Electric Company, Inc.
|
REIP
|
|
Renewable Energy Infrastructure Program
|
RFP
|
|
Request for proposals
|
RHI
|
|
Renewable Hawaii, Inc., a wholly-owned nonregulated subsidiary of Hawaiian Electric Company, Inc.
|
ROA
|
|
Return on assets
|
ROACE
|
|
Return on average common equity
|
Terms
|
|
Definitions
|
|
|
|
RORB
|
|
Return on rate base
|
RPS
|
|
Renewable portfolio standards
|
S&P
|
|
Standard & Poor’s
|
SEC
|
|
Securities and Exchange Commission
|
See
|
|
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)
|
SLHCs
|
|
Savings & Loan Holding Companies
|
SOIP
|
|
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.
|
Spin-Off
|
|
The previously planned distribution to HEI shareholders of all of the common stock of ASB Hawaii immediately prior to the Merger, which was terminated
|
SPRBs
|
|
Special Purpose Revenue Bonds
|
ST
|
|
Steam turbine
|
state
|
|
State of Hawaii
|
Tax Act
|
|
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)
|
TDR
|
|
Troubled debt restructuring
|
Tesoro
|
|
Tesoro Hawaii Corporation dba BHP Petroleum Americas Refining Inc., a fuel oil supplier
|
TOOTS
|
|
The Old Oahu Tug Service, Inc., a wholly-owned subsidiary of Hawaiian Electric Industries, Inc.
|
Trust III
|
|
HECO Capital Trust III
|
UBC
|
|
Uluwehiokama Biofuels Corp., a wholly-owned nonregulated subsidiary of Hawaiian Electric Company, Inc.
|
Utilities
|
|
Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited
|
VIE
|
|
Variable interest entity
|
Cautionary Note Regarding Forward-Looking Statements
|
•
|
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 the Federal government partial shutdown, including the impact to our customers to pay their electric bills and/or bank loans and the impact on the state of Hawaii economy; 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; conflicts or other crisis; the effects of changes that have or may occur in U.S. policy, such as with respect to immigration and trade; terrorist acts; and potential pandemics);
|
•
|
the effects of future actions or inaction of the U.S. government or related agencies, including those related to the U.S. debt ceiling or budget funding, monetary policy, trade policy and tariffs, and other policy and regulation changes advanced or proposed by President Trump and his administration;
|
•
|
weather, natural disasters (e.g., hurricanes, earthquakes, tsunamis, lightning strikes, lava flows and the potential effects of climate change, such as more severe storms, droughts, heat waves, and rising sea levels) and wildfires, including their impact on the Company’s and Utilities’ operations and the economy;
|
•
|
the timing, speed and extent of changes in interest rates and the shape of the yield curve;
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
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, as amended by the Economic Growth, Regulatory Relief and Consumer Protection Act;
|
•
|
increasing competition in the banking industry (e.g., increased price competition for deposits, or an outflow of deposits to alternative investments, which may have an adverse impact on ASB’s cost of funds);
|
•
|
the potential delay by the Public Utilities Commission of the State of Hawaii (PUC) in considering (and potential disapproval of actual or proposed) renewable energy proposals and related costs; reliance by the Utilities on outside parties such as the state, independent power producers (IPPs) and developers; and uncertainties surrounding technologies, solar power, wind power, biofuels, environmental assessments required to meet renewable portfolio standards (RPS) goals and the impacts of implementation of the renewable energy proposals on future costs of electricity;
|
•
|
the ability of the Utilities to develop, implement and recover the costs of implementing the Utilities’ action plans 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, the PUC’s April 2014 statement of its 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;
|
•
|
capacity and supply constraints or difficulties, especially if generating units (utility-owned or IPP-owned) fail or measures such as demand-side management, distributed generation (DG), combined heat and power or other firm capacity supply-side resources fall short of achieving their forecasted benefits or are otherwise insufficient to reduce or meet peak demand;
|
•
|
fuel oil price changes, delivery of adequate fuel by suppliers and the continued availability to the electric utilities of their energy cost adjustment clauses (ECACs) and energy cost recovery clauses (ECRC);
|
•
|
the continued availability to the electric utilities or modifications of other cost recovery mechanisms, including the purchased power adjustment clauses (PPACs), rate adjustment mechanisms (RAMs) and pension and postretirement benefits other than pensions (OPEB) tracking mechanisms, and the continued decoupling of revenues from sales to mitigate the effects of declining kilowatthour sales;
|
•
|
the ability of the Utilities to achieve performance incentive goals currently in place;
|
•
|
the impact from the PUC’s implementation of performance-based ratemaking for the Utilities pursuant to Act 005, Session Laws 2018, including the potential addition of new performance incentive mechanisms, third party proposals adopted by the PUC in its implementation of PBR, and the implications of not achieving performance incentive goals;
|
•
|
the impact of fuel price levels and volatility on customer satisfaction and political and regulatory support for the Utilities;
|
•
|
the risks associated with increasing reliance on renewable energy, including the availability and cost of non-fossil fuel supplies for renewable energy generation and the operational impacts of adding intermittent sources of renewable energy to the electric grid;
|
•
|
the growing risk that energy production from renewable generating resources may be curtailed and the interconnection of additional resources will be constrained as more generating resources are added to the Utilities’ electric systems and as customers reduce their energy usage;
|
•
|
the ability of IPPs to deliver the firm capacity anticipated in their power purchase agreements (PPAs);
|
•
|
the potential that, as IPP contracts near the end of their terms, there may be less economic incentive for the IPPs to make investments in their units to ensure the availability of their units;
|
•
|
the ability of the Utilities to negotiate, periodically, favorable agreements for significant resources such as fuel supply contracts and collective bargaining agreements;
|
•
|
new technological developments that could affect the operations and prospects of the Utilities and ASB or their competitors such as the commercial development of energy storage and microgrids and banking through alternative channels;
|
•
|
cyber security risks and the potential for cyber incidents, including potential incidents at HEI, its third-party vendors, and its subsidiaries (including at ASB branches and electric utility plants) and incidents at data processing centers used, to the extent not prevented by intrusion detection and prevention systems, anti-virus software, firewalls and other general IT controls;
|
•
|
failure in addressing issues in the stabilization of the Enterprise Resource Planning/Enterprise Asset Management (ERP/EAM) (ERP/EAM) system implementation could adversely affect the Utilities’ ability to timely and accurately report financial information and make payments to vendors and employees;
|
•
|
failure to achieve cost savings consistent with the minimum $244 million in ERP/EAM project-related benefits (including $141 million in operation and maintenance (O&M) benefits) to be delivered to customers over its 12-year estimated useful life;
|
•
|
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);
|
•
|
developments in laws, regulations and policies governing protections for historic, archaeological and cultural sites, and plant and animal species and habitats, as well as developments in the implementation and enforcement of such laws, regulations and policies;
|
•
|
discovery of conditions that may be attributable to historical chemical releases, including any necessary investigation and remediation, and any associated enforcement, litigation or regulatory oversight;
|
•
|
decisions by the PUC in rate cases and other proceedings (including the risks of delays in the timing of decisions, adverse changes in final decisions from interim decisions and the disallowance of project costs as a result of adverse regulatory audit reports or otherwise);
|
•
|
decisions by the PUC and by other agencies and courts on land use, environmental and other permitting issues (such as required corrective actions, restrictions and penalties that may arise, such as with respect to environmental conditions or RPS);
|
•
|
potential enforcement actions by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (FRB), the Federal Deposit Insurance Corporation (FDIC) and/or other governmental authorities (such as consent orders, required corrective actions, restrictions and penalties that may arise, for example, with respect to compliance deficiencies under existing or new banking and consumer protection laws and regulations or with respect to capital adequacy);
|
•
|
the ability of the Utilities to recover increasing costs and earn a reasonable return on capital investments not covered by RAMs;
|
•
|
the risks associated with the geographic concentration of HEI’s businesses and ASB’s loans, ASB’s concentration in a single product type (i.e., first mortgages) and ASB’s significant credit relationships (i.e., concentrations of large loans and/or credit lines with certain customers);
|
•
|
changes in accounting principles applicable to HEI and its subsidiaries, including the adoption of new U.S. accounting standards, the potential discontinuance of regulatory accounting, the effects of potentially required consolidation of variable interest entities (VIEs), or required capital/finance lease or on-balance-sheet operating lease accounting for PPAs with IPPs;
|
•
|
downgrades by securities rating agencies in their ratings of the securities of HEI and Hawaiian Electric and their impact on results of financing efforts;
|
•
|
faster than expected loan prepayments that can cause an acceleration of the amortization of premiums on loans and investments and the impairment of mortgage-servicing assets of ASB;
|
•
|
changes in ASB’s loan portfolio credit profile and asset quality and/or mix which may increase or decrease the required level of provision for loan losses, allowance for loan losses and charge-offs;
|
•
|
changes in ASB’s deposit cost or mix which may have an adverse impact on ASB’s cost of funds;
|
•
|
the final outcome of tax positions taken by HEI and its subsidiaries;
|
•
|
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);
|
•
|
the ability of the Company’s non-regulated subsidiary, Pacific Current, LLC, to achieve its performance and growth objectives, which in turn could affect its ability to service its non-recourse debt;
|
•
|
the Company’s reliance on third parties and the risk of their non-performance; 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).
|
ITEM 1.
|
BUSINESS
|
December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
HEI
|
46
|
|
|
41
|
|
|
41
|
|
|
39
|
|
|
44
|
|
Hawaiian Electric and its subsidiaries
|
2,704
|
|
|
2,724
|
|
|
2,662
|
|
|
2,727
|
|
|
2,759
|
|
ASB
|
1,148
|
|
|
1,115
|
|
|
1,093
|
|
|
1,152
|
|
|
1,162
|
|
|
3,898
|
|
|
3,880
|
|
|
3,796
|
|
|
3,918
|
|
|
3,965
|
|
Years ended December 31
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
(dollars in thousands)
|
Customer accounts*
|
|
Electric sales revenues
|
|
Customer accounts*
|
|
Electric sales revenues
|
|
Customer accounts*
|
|
Electric sales revenues
|
|||||||||
Hawaiian Electric
|
305,456
|
|
|
$
|
1,789,527
|
|
|
304,948
|
|
|
$
|
1,592,016
|
|
|
304,261
|
|
|
$
|
1,466,225
|
|
Hawaii Electric Light
|
85,758
|
|
|
371,713
|
|
|
85,925
|
|
|
331,697
|
|
|
85,029
|
|
|
309,521
|
|
|||
Maui Electric
|
71,875
|
|
|
364,967
|
|
|
71,352
|
|
|
323,882
|
|
|
70,872
|
|
|
306,767
|
|
|||
|
463,089
|
|
|
$
|
2,526,207
|
|
|
462,225
|
|
|
$
|
2,247,595
|
|
|
460,162
|
|
|
$
|
2,082,513
|
|
Mechanism
|
Description
|
Sales decoupling
|
Provides predictable revenue stream by fixing net revenues at the level approved in last rate case (revenues not linked to kWh sales)
|
Revenue adjustment mechanism (RAM)
|
Annually adjusts revenue to recover general inflation of operations and maintenance expenses and baseline plant additions between rate cases
|
Major Projects Interim Recovery adjustment mechanism (MPIR)
|
Reduces regulatory lag and permits recovery through the revenue balancing account (RBA) of costs (net of benefits) for major capital projects including, but not restricted to, projects to advance renewable energy
|
Energy cost and purchased power recovery/adjustment clauses
|
Allows for timely recovery of fuel and purchased power costs to reduce earnings volatility. Symmetrical fossil fuel cost risk sharing (98% customer/2% utility) mechanism established for Hawaiian Electric (Oahu) and utility upside/downside capped at $2.5 million (beginning in 2019)
|
Pension and post-employment benefit trackers
|
Allow tracking of pension and post-employment benefit costs and contributions above or below the cost included in rates in a separate regulatory asset/liability account
|
Renewable energy infrastructure program
|
Permits recovery of renewable energy infrastructure projects through a surcharge
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||||
kWh sales (millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential
|
2,410.8
|
|
|
2,334.5
|
|
|
2,332.7
|
|
|
2,396.5
|
|
|
2,379.7
|
|
|||||
Commercial
|
2,810.8
|
|
|
2,867.9
|
|
|
2,911.5
|
|
|
2,977.8
|
|
|
3,022.0
|
|
|||||
Large light and power
|
3,425.1
|
|
|
3,443.3
|
|
|
3,555.1
|
|
|
3,532.9
|
|
|
3,524.5
|
|
|||||
Other
|
42.1
|
|
|
44.7
|
|
|
46.0
|
|
|
49.3
|
|
|
50.0
|
|
|||||
|
8,688.8
|
|
|
8,690.4
|
|
|
8,845.3
|
|
|
8,956.5
|
|
|
8,976.2
|
|
|||||
kWh net generated and purchased (millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net generated
|
4,966.4
|
|
|
4,888.4
|
|
|
4,940.4
|
|
|
5,124.5
|
|
|
5,131.3
|
|
|||||
Purchased
|
4,139.3
|
|
|
4,247.1
|
|
|
4,349.1
|
|
|
4,308.3
|
|
|
4,306.7
|
|
|||||
|
9,105.7
|
|
|
9,135.5
|
|
|
9,289.5
|
|
|
9,432.8
|
|
|
9,438.0
|
|
|||||
Losses and system uses (%)
|
4.4
|
|
|
4.7
|
|
|
4.6
|
|
|
4.8
|
|
|
4.7
|
|
|||||
Energy supply (December 31)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net generating capability—MW
|
1,739
|
|
|
1,673
|
|
|
1,669
|
|
|
1,669
|
|
|
1,787
|
|
|||||
Firm and other purchased capability—MW
1
|
517
|
|
|
551
|
|
|
551
|
|
|
555
|
|
|
575
|
|
|||||
|
2,256
|
|
|
2,224
|
|
|
2,220
|
|
|
2,224
|
|
|
2,362
|
|
|||||
Net peak demand—MW
2
|
1,598
|
|
|
1,584
|
|
|
1,593
|
|
|
1,610
|
|
|
1,554
|
|
|||||
Btu per net kWh generated
|
10,826
|
|
|
10,812
|
|
|
10,710
|
|
|
10,632
|
|
|
10,613
|
|
|||||
Average fuel oil cost per MBtu (cents)
|
1,420.2
|
|
|
1,114.3
|
|
|
862.3
|
|
|
1,206.5
|
|
|
2,087.6
|
|
|||||
Customer accounts (December 31)
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential
|
407,505
|
|
|
406,241
|
|
|
402,818
|
|
|
400,655
|
|
|
398,256
|
|
|||||
Commercial
|
54,075
|
|
|
53,732
|
|
|
55,089
|
|
|
54,878
|
|
|
54,924
|
|
|||||
Large light and power
|
696
|
|
|
656
|
|
|
670
|
|
|
659
|
|
|
596
|
|
|||||
Other
|
813
|
|
|
1,596
|
|
|
1,585
|
|
|
1,608
|
|
|
1,640
|
|
|||||
|
463,089
|
|
|
462,225
|
|
|
460,162
|
|
|
457,800
|
|
|
455,416
|
|
|||||
Electric revenues (thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential
|
$
|
788,028
|
|
|
$
|
691,857
|
|
|
$
|
638,776
|
|
|
$
|
709,886
|
|
|
$
|
879,605
|
|
Commercial
|
843,326
|
|
|
766,921
|
|
|
711,553
|
|
|
798,202
|
|
|
1,027,588
|
|
|||||
Large light and power
|
882,443
|
|
|
776,808
|
|
|
720,878
|
|
|
802,366
|
|
|
1,051,119
|
|
|||||
Other
|
12,410
|
|
|
12,009
|
|
|
11,306
|
|
|
13,356
|
|
|
17,163
|
|
|||||
|
$
|
2,526,207
|
|
|
$
|
2,247,595
|
|
|
$
|
2,082,513
|
|
|
$
|
2,323,810
|
|
|
$
|
2,975,475
|
|
Average revenue per kWh sold (cents)
|
29.07
|
|
|
25.86
|
|
|
23.54
|
|
|
25.90
|
|
|
33.15
|
|
|||||
Residential
|
32.69
|
|
|
29.64
|
|
|
27.38
|
|
|
29.62
|
|
|
36.96
|
|
|||||
Commercial
|
30.00
|
|
|
26.74
|
|
|
24.44
|
|
|
26.81
|
|
|
34.00
|
|
|||||
Large light and power
|
25.76
|
|
|
22.56
|
|
|
20.28
|
|
|
22.71
|
|
|
29.82
|
|
|||||
Other
|
29.47
|
|
|
26.82
|
|
|
24.61
|
|
|
27.05
|
|
|
34.36
|
|
|||||
Residential statistics
|
|
|
|
|
|
|
|
|
|
||||||||||
Average annual use per customer account (kWh)
|
5,923
|
|
|
5,779
|
|
|
5,806
|
|
|
5,996
|
|
|
6,000
|
|
|||||
Average annual revenue per customer account
|
$
|
1,936
|
|
|
$
|
1,713
|
|
|
$
|
1,590
|
|
|
$
|
1,776
|
|
|
$
|
2,218
|
|
Average number of customer accounts
|
407,044
|
|
|
403,983
|
|
|
401,796
|
|
|
399,674
|
|
|
396,640
|
|
1
|
Since May 2018, PGV has been offline due to lava flow on Hawaii Island; therefore, PGV’s capability has not been incorporated into the utility’s firm contract power capability as of December 31, 2018.
|
2
|
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, 2018
1
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Conventional oil-fired steam units
|
999.5
|
|
|
50.1
|
|
|
35.9
|
|
|
—
|
|
|
—
|
|
|
1,085.5
|
|
Diesel
|
—
|
|
|
29.5
|
|
|
96.8
|
|
|
10.2
|
|
|
9.8
|
|
|
146.3
|
|
Combustion turbines (peaking units)
|
231.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
231.8
|
|
Other combustion turbines
|
—
|
|
|
46.3
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|
48.5
|
|
Combined-cycle unit
|
—
|
|
|
56.3
|
|
|
113.6
|
|
|
—
|
|
|
—
|
|
|
169.9
|
|
Biodiesel
|
57.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57.4
|
|
Firm contract power
2
|
456.5
|
|
|
60.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
516.5
|
|
|
1,745.2
|
|
|
242.2
|
|
|
246.3
|
|
|
10.2
|
|
|
12.0
|
|
|
2,255.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net peak demand (MW)
3
|
1,190.0
|
|
|
190.8
|
|
|
206.2
|
|
|
5.4
|
|
|
6.0
|
|
|
1,598.4
|
|
Reserve margin
|
45.7
|
%
|
|
26.9
|
%
|
|
19.4
|
%
|
|
88.9
|
%
|
|
100.0
|
%
|
|
42.0
|
%
|
Annual load factor
|
63.5
|
%
|
|
68.1
|
%
|
|
60.7
|
%
|
|
65.4
|
%
|
|
60.7
|
%
|
|
65.0
|
%
|
kWh net generated and purchased (millions)
|
6,807.8
|
|
|
1,138.2
|
|
|
1,096.9
|
|
|
30.9
|
|
|
31.9
|
|
|
9,105.7
|
|
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: 60 MW (Hamakua Energy, LLC, oil-fired). Hawaii Electric Light also has a firm capacity PPA with PGV for 34.6 MW. However, since May 2018, PGV has been offline due to lava flow on Hawaii Island; therefore, PGV’s capability has not been incorporated into the utility’s firm contract power capability as of December 31, 2018.
|
3
|
Noncoincident and nonintegrated.
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Consolidated
|
||||||||||||||||
|
$/Barrel
|
|
¢/MBtu
|
|
$/Barrel
|
|
¢/MBtu
|
|
$/Barrel
|
|
¢/MBtu
|
|
$/Barrel
|
|
¢/MBtu
|
||||||||
2018
|
86.11
|
|
|
1,371.8
|
|
|
89.81
|
|
|
1,489.5
|
|
|
93.60
|
|
|
1,573.6
|
|
|
87.90
|
|
|
1,420.2
|
|
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
|
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
||||||||||||
|
% LSFO
|
|
|
% Biodiesel/Diesel
|
|
|
% IFO
|
|
|
% Diesel
|
|
|
% IFO
|
|
|
% Diesel
|
|
2018
|
96
|
|
|
4
|
|
|
39
|
|
|
61
|
|
|
23
|
|
|
77
|
|
2017
|
95
|
|
|
5
|
|
|
43
|
|
|
57
|
|
|
23
|
|
|
77
|
|
2016
|
97
|
|
|
3
|
|
|
49
|
|
|
51
|
|
|
19
|
|
|
81
|
|
Property
|
Location (island)
|
Principal Fuel Type
|
Generating Capacity (MW)
|
Status
|
Hawaiian Electric:
|
|
|
|
|
Waiau
1
|
Oahu
|
LSFO / Diesel
|
480.8
|
Active
|
Kahe
1
|
Oahu
|
LSFO
|
620.5
|
Active
|
Campbell Industrial Park (CIP)
1
|
Oahu
|
Diesel
|
130.0
|
Active
|
Honolulu Power Plant
1
|
Oahu
|
N/A
|
—
|
Deactivated in 2014
|
Schofield Generating Station
2
|
Oahu
|
Biodiesel / Ultra low sulfur diesel
|
49.4
|
Active
|
West Loch PV Project
3
|
Oahu
|
Renewable
|
20.0
|
Under construction
|
|
|
|
|
|
Hawaii Electric Light
4
:
|
|
|
|
|
Shipman
|
Hawaii
|
N/A
|
—
|
Retired in 2015
|
Waimea
|
Hawaii
|
Ultra low sulfur diesel
|
7.5
|
Active
|
Keahole
|
Hawaii
|
Diesel / Ultra low sulfur diesel
|
77.6
|
Active
|
Puna
|
Hawaii
|
MSFO / Diesel
|
36.7
|
Active
|
Kanoelehua
|
Hawaii
|
MSFO / Ultra low sulfur diesel
|
55.4
|
Active
|
Distributed generators at substation sites
|
Hawaii
|
Ultra low sulfur diesel
|
5.0
|
Active
|
|
|
|
|
|
Maui Electric
5
:
|
|
|
|
|
Kahului
|
Maui
|
MSFO
|
35.9
|
Active
|
Maalaea
|
Maui
|
Diesel
|
210.4
|
Active
|
Miki Basin
|
Lanai
|
Ultra low sulfur diesel
|
9.4
|
Active
|
Palaau
|
Molokai
|
Ultra low sulfur diesel
|
12.0
|
Active
|
3
|
Hawaiian Electric has a 37-year lease, effective July 1, 2017, with the Secretary of the Navy to install, operate and maintain a 20 MW renewable generation site on 102 acres.
|
5
|
The four plants are situated on Maui Electric-owned land having a combined area of 60.7 acres.
|
Facility
|
Location (island)
|
Fuel Type
|
Capacity (barrels in thousands)
|
Generation Serviced
|
Hawaiian Electric:
|
|
|
|
|
Barbers Point Tank Farm
|
Oahu
|
Low sulfur fuel oil
|
1,000
|
Kahe, Waiau
|
Generation sites - various (in aggregate)
|
Oahu
|
Low sulfur fuel oil
|
770
|
Various
|
Generation sites - various (in aggregate)
|
Oahu
|
Diesel
|
44
|
Various
|
Generation sites - various (in aggregate)
|
Oahu
|
Biodiesel
|
88
|
Various
|
|
|
|
|
|
Hawaii Electric Light
1
:
|
|
|
|
|
Generation sites - various (in aggregate)
|
Hawaii
|
Medium sulfur fuel oil
|
48
|
Various
|
Generation sites - various (in aggregate)
|
Hawaii
|
Diesel
|
82
|
Various
|
|
|
|
|
|
Maui Electric
2
:
|
|
|
|
|
Generation sites - various (in aggregate)
|
Maui
|
Medium sulfur fuel oil
|
81
|
Various
|
Generation sites - various (in aggregate)
|
Maui
|
Diesel
|
95
|
Various
|
2
|
There are an additional 56,358 barrels of diesel oil storage capacity off-site at Aloha Petroleum, Ltd. (Aloha Petroleum)-owned terminalling facilities.
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
Equity to assets ratio
|
|
|
|
|
|
|
|
|
Average equity divided by average total assets
|
8.86
|
%
|
|
9.10
|
%
|
|
9.34
|
%
|
Return on assets
|
|
|
|
|
|
|||
Net income divided by average total assets
|
1.20
|
|
|
1.02
|
|
|
0.92
|
|
Return on equity
|
|
|
|
|
|
|||
Net income divided by average equity
|
13.51
|
|
|
11.20
|
|
|
9.90
|
|
•
|
ASB met applicable minimum regulatory capital requirements (noted in parentheses) as of December 31, 2018 with a Tier 1 leverage ratio of 8.7% (4.0%), a common equity Tier 1 capital ratio of 12.8% (4.5%), a Tier 1 capital ratio of 12.8% (6.0%) and a total capital ratio of 13.9% (8.0%).
|
•
|
ASB met the capital requirements to be generally considered “well-capitalized” (noted in parentheses) as of December 31, 2018 with a Tier 1 leverage ratio of 8.7% (5.0%), a common equity Tier 1 capital ratio of 12.8% (6.5%), a Tier 1 capital ratio of 12.8% (8.0%) and a total capital ratio of 13.9% (10.0%).
|
|
Number of branches
|
|||||||
December 31, 2018
|
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, 2018
under the Regulatory Capital Maintenance/Dividend Agreement dated May 26, 1988, between HEI, HEIDI and the Federal Savings and Loan Insurance Corporation) 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 the OCC’s 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. New or significant advances in technology (e.g., significant advances in internet banking) 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
|
•
|
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;
|
•
|
events of default and foreclosure of loans whereby ASB becomes the owner of a mortgage properties that presents environmental risk or potential clean up liability;
|
•
|
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
|
|
66
|
|
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
|
|
54
|
|
HEI Executive Vice President, Chief Financial Officer and Treasurer since 3/18
HEI Executive Vice President and Chief Financial Officer, 4/17 to 3/18
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
|
|
71
|
|
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
|
|
56
|
|
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
|
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, 2018
|
33,983
|
|
|
$
|
36.11
|
|
—
|
|
|
NA
|
November 1 to 30, 2018
|
14,796
|
|
|
$
|
37.49
|
|
—
|
|
|
NA
|
December 1 to 31, 2018
|
181,966
|
|
|
$
|
38.73
|
|
—
|
|
|
NA
|
Quarters ended
|
2018
|
|
|
2017
|
|
||
(in thousands)
|
|
|
|
||||
March 31
|
$
|
25,826
|
|
|
$
|
21,942
|
|
June 30
|
25,826
|
|
|
21,942
|
|
||
September 30
|
25,827
|
|
|
21,941
|
|
||
December 31
|
25,826
|
|
|
21,942
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
Selected Financial Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Hawaiian Electric Industries, Inc. and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||||
(dollars in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Results of operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
2,860,849
|
|
|
$
|
2,555,625
|
|
|
$
|
2,380,654
|
|
|
$
|
2,602,982
|
|
|
$
|
3,239,542
|
|
Net income for common stock
|
201,774
|
|
|
165,297
|
|
|
248,256
|
|
|
159,877
|
|
|
168,129
|
|
|||||
Basic earnings per common share
|
1.85
|
|
|
1.52
|
|
|
2.30
|
|
|
1.50
|
|
|
1.65
|
|
|||||
Diluted earnings per common share
|
1.85
|
|
|
1.52
|
|
|
2.29
|
|
|
1.50
|
|
|
1.63
|
|
|||||
Return on average common equity
|
9.5
|
%
|
|
7.9
|
%
|
|
12.4
|
%
|
|
8.6
|
%
|
|
9.6
|
%
|
|||||
Financial position *
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
13,104,051
|
|
|
$
|
12,534,160
|
|
|
$
|
11,881,981
|
|
|
$
|
11,275,931
|
|
|
$
|
10,710,711
|
|
Deposit liabilities
|
6,158,852
|
|
|
5,890,597
|
|
|
5,548,929
|
|
|
5,025,254
|
|
|
4,623,415
|
|
|||||
Other bank borrowings
|
110,040
|
|
|
190,859
|
|
|
192,618
|
|
|
328,582
|
|
|
290,656
|
|
|||||
Long-term debt, net—other than bank
|
1,879,641
|
|
|
1,683,797
|
|
|
1,619,019
|
|
|
1,578,368
|
|
|
1,498,547
|
|
|||||
Preferred stock of subsidiaries – not subject to mandatory redemption
|
34,293
|
|
|
34,293
|
|
|
34,293
|
|
|
34,293
|
|
|
34,293
|
|
|||||
Common stock equity
|
2,162,280
|
|
|
2,097,386
|
|
|
2,066,753
|
|
|
1,927,640
|
|
|
1,790,573
|
|
|||||
Common equity ratio
|
52
|
%
|
|
53
|
%
|
|
56
|
%
|
|
53
|
%
|
|
52
|
%
|
|||||
Common stock
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Book value per common share *
|
$
|
19.86
|
|
|
$
|
19.28
|
|
|
$
|
19.03
|
|
|
$
|
17.94
|
|
|
$
|
17.46
|
|
Dividends declared per common share
|
1.24
|
|
|
1.24
|
|
|
1.24
|
|
|
1.24
|
|
|
1.24
|
|
|||||
Dividend payout ratio
|
67
|
%
|
|
82
|
%
|
|
54
|
%
|
|
82
|
%
|
|
75
|
%
|
|||||
Market price to book value per common share *
|
184
|
%
|
|
188
|
%
|
|
174
|
%
|
|
161
|
%
|
|
192
|
%
|
|||||
Price earnings ratio **
|
19.8x
|
|
|
23.8x
|
|
|
14.4x
|
|
|
19.3x
|
|
|
20.3
|
x
|
|||||
Common shares outstanding (thousands) *
|
108,879
|
|
|
108,788
|
|
|
108,583
|
|
|
107,460
|
|
|
102,565
|
|
|||||
Weighted-average-basic
|
108,855
|
|
|
108,749
|
|
|
108,102
|
|
|
106,418
|
|
|
101,968
|
|
|||||
Shareholders ***
|
25,369
|
|
|
26,064
|
|
|
26,831
|
|
|
27,927
|
|
|
29,415
|
|
|||||
Employees *
|
3,898
|
|
|
3,880
|
|
|
3,796
|
|
|
3,918
|
|
|
3,965
|
|
*
|
At December 31.
|
**
|
Calculated using December 31 market price per common share divided by basic earnings per common share.
|
***
|
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, 2019
, HEI had
5,840
registered shareholders (i.e., holders of record of HEI common stock), 22,601 DRIP participants and total shareholders of 25,318.
|
Years ended December 31
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
(in thousands)
|
|
|
|
|
|
||||||||||
Results of operations
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
2,546,525
|
|
$
|
2,257,566
|
|
$
|
2,094,368
|
|
$
|
2,335,166
|
|
$
|
2,987,323
|
|
Net income for common stock
|
143,653
|
|
119,951
|
|
142,317
|
|
135,714
|
|
137,641
|
|
|||||
|
|
|
|
|
|
||||||||||
Financial position *
|
|
|
|
|
|
||||||||||
Utility plant
|
$
|
7,092,483
|
|
$
|
6,717,311
|
|
$
|
6,327,102
|
|
$
|
6,037,712
|
|
$
|
5,753,965
|
|
Accumulated depreciation
|
(2,577,342
|
)
|
(2,476,352
|
)
|
(2,369,282
|
)
|
(2,266,004
|
)
|
(2,175,510
|
)
|
|||||
Net utility plant
|
$
|
4,515,141
|
|
$
|
4,240,959
|
|
$
|
3,957,820
|
|
$
|
3,771,708
|
|
$
|
3,578,455
|
|
Total assets
|
$
|
5,967,503
|
|
$
|
5,630,613
|
|
$
|
5,431,903
|
|
$
|
5,166,123
|
|
$
|
5,083,589
|
|
Current portion of long-term debt
|
$
|
—
|
|
$
|
49,963
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Short-term borrowings from non-affiliates
|
25,000
|
|
4,999
|
|
—
|
|
—
|
|
—
|
|
|||||
Long-term debt, net
|
1,418,802
|
|
1,318,516
|
|
1,319,260
|
|
1,278,702
|
|
1,199,025
|
|
|||||
Common stock equity
|
1,957,641
|
|
1,845,283
|
|
1,799,787
|
|
1,728,325
|
|
1,682,144
|
|
|||||
Cumulative preferred stock-not
subject to mandatory redemption
|
34,293
|
|
34,293
|
|
34,293
|
|
34,293
|
|
34,293
|
|
|||||
Capital structure
|
$
|
3,435,736
|
|
$
|
3,253,054
|
|
$
|
3,153,340
|
|
$
|
3,041,320
|
|
$
|
2,915,462
|
|
Capital structure ratios (%)
|
|
|
|
|
|
||||||||||
Debt (short-term borrowings, and long-term debt, net, including current portion)
|
42.0
|
|
42.2
|
|
41.8
|
|
42.1
|
|
41.1
|
|
|||||
Cumulative preferred stock
|
1.0
|
|
1.1
|
|
1.1
|
|
1.1
|
|
1.2
|
|
|||||
Common stock equity
|
57.0
|
|
56.7
|
|
57.1
|
|
56.8
|
|
57.7
|
|
*
|
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)
|
2018
|
|
|
% change
|
|
|
2017
|
|
|
% change
|
|
|
2016
|
|
|||
Revenues
|
$
|
2,861
|
|
|
12
|
|
|
$
|
2,556
|
|
|
7
|
|
|
$
|
2,381
|
|
Operating income
|
333
|
|
|
(4
|
)
|
|
346
|
|
|
(3
|
)
|
|
356
|
|
|||
Merger termination fee
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
90
|
|
|||
Net income for common stock
|
202
|
|
|
22
|
|
|
165
|
|
|
(33
|
)
|
|
248
|
|
|||
Net income (loss) by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Electric utility
|
$
|
144
|
|
|
20
|
|
|
$
|
120
|
|
|
(16
|
)
|
|
$
|
142
|
|
Bank
|
83
|
|
|
23
|
|
|
67
|
|
|
17
|
|
|
57
|
|
|||
Other
|
(24
|
)
|
|
(13
|
)
|
|
(22
|
)
|
|
NM
|
|
|
49
|
|
|||
Net income for common stock
|
$
|
202
|
|
|
20
|
|
|
$
|
165
|
|
|
(33
|
)
|
|
$
|
248
|
|
Basic earnings per share
|
$
|
1.85
|
|
|
22
|
|
|
$
|
1.52
|
|
|
(34
|
)
|
|
$
|
2.30
|
|
Diluted earnings per share
|
$
|
1.85
|
|
|
22
|
|
|
$
|
1.52
|
|
|
(34
|
)
|
|
$
|
2.29
|
|
Dividends per share
|
$
|
1.24
|
|
|
—
|
|
|
$
|
1.24
|
|
|
—
|
|
|
$
|
1.24
|
|
Weighted-average number of common shares outstanding (millions)
|
108.9
|
|
|
—
|
|
|
108.7
|
|
|
1
|
|
|
108.1
|
|
|||
Dividend payout ratio
|
67
|
%
|
|
|
|
|
82
|
%
|
|
|
|
|
54
|
%
|
NM
|
Not meaningful.
|
(in millions)
|
|
2018
|
|
2017
|
|
Increase
(decrease)
|
|
Primary reason(s)
|
|||
Operating loss
1
|
|
(16
|
)
|
|
(17
|
)
|
|
1
|
|
|
Higher 2018 corporate operating, general and administrative expenses ($19 million in 2018 vs $17 million in 2017) related to higher compensation, offset by higher Pacific Current (Hamakua Energy) operating income.
|
Interest expense & other
|
|
(16
|
)
|
|
(10
|
)
|
|
(6
|
)
|
|
Increase due to higher average borrowings and higher average interest rates. Average borrowings increased due to $67 million of secured debt at Hamakua Energy (drawn in December 2017), higher commercial paper balances (primarily related to Mauo project construction), and a $100 million tranche B private placement drawn in December 2018 to fund a contribution of utility equity.
|
Income tax benefit
|
|
8
|
|
|
5
|
|
|
3
|
|
|
Higher tax benefit due to an increase in pretax operating losses and interest expense, partially offset by a lower tax rate due to the Tax Act, excluding a one-time charge for the remeasurement of deferred tax assets ($5.7 million) related to the Tax Act in 2017.
|
Net loss
|
|
(24
|
)
|
|
(22
|
)
|
|
(2
|
)
|
|
|
(in millions)
|
|
2017
|
|
2016
|
|
Increase
(decrease)
|
|
Primary reason(s)
|
|||
Operating loss
|
|
(17
|
)
|
|
(22
|
)
|
|
5
|
|
|
Lower operating, general and administrative expenses ($17 million in 2017 vs $18 million in 2016) as in 2016, HEI had approximately $1 million (expenses, net of reimbursements of expenses from NEE and insurance) of expenses related to the previously proposed merger with NEE.
|
Merger termination
|
|
—
|
|
|
90
|
|
|
(90
|
)
|
|
|
Interest expense & other
|
|
(10
|
)
|
|
(10
|
)
|
|
—
|
|
|
Lower average borrowings in 2017 compared to 2016. In November 2017, a 2.99% $150 million term loan was used to retire term loans with resetting interest periods based on LIBOR rates. In 2016, a 4.41% senior note was refinanced to a lower rate Eurodollar term loan. In late December 2017, Hamakua Energy closed on $67 million of 4.02% senior secured notes.
|
Income tax benefit (expense)
|
|
5
|
|
|
(9
|
)
|
|
14
|
|
|
In 2017, HEI’s other segment included $5.7 million of tax reform-related tax expense, primarily to reduce net deferred tax asset balances to reflect the lower federal tax rate. In 2016, HEI’s other segment included $25 million of tax expense relating to the previously proposed merger and spin-off (net of taxes), comprised of taxes on merger termination fee and reimbursements of expenses from NEE and insurance ($34 million), partly offset by additional tax benefits on the previously non-tax-deductible merger- and spin-off-related expenses incurred in previous years ($6 million) and tax on 2016 merger-related expenses ($3 million). In 2016, HEI’s results also included other tax benefits recognized as a result of moving out of a federal net operating loss position.
|
Net income (loss)
|
|
(22
|
)
|
|
49
|
|
|
(71
|
)
|
|
|
December 31
|
2018
|
|
2017
|
||||||||||
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|||
Short-term borrowings—other than bank
|
$
|
74
|
|
|
2
|
%
|
|
$
|
118
|
|
|
3
|
%
|
Long-term debt, net—other than bank
|
1,880
|
|
|
45
|
|
|
1,684
|
|
|
43
|
|
||
Preferred stock of subsidiaries
|
34
|
|
|
1
|
|
|
34
|
|
|
1
|
|
||
Common stock equity
|
2,162
|
|
|
52
|
|
|
2,097
|
|
|
53
|
|
||
|
$
|
4,150
|
|
|
100
|
%
|
|
$
|
3,933
|
|
|
100
|
%
|
|
Year ended
December 31, 2018
|
|
|
||||||||
(in millions)
|
Average
balance
|
|
End-of-period
balance
|
|
December 31,
2017
|
||||||
Commercial paper
|
$
|
50
|
|
|
$
|
49
|
|
|
$
|
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; corporate credit; respectively
|
BBB
|
WR*
|
BBB-
|
Commercial paper
|
F3
|
P-3
|
A-3
|
Outlook
|
Stable
|
Stable
|
Stable
|
December 31, 2018
|
|
||||||||||||||||||
(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
|
$
|
6
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
18
|
|
Time certificates
|
509
|
|
|
236
|
|
|
80
|
|
|
3
|
|
|
828
|
|
|||||
Other bank borrowings
|
110
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
110
|
|
|||||
Short-term borrowings
|
74
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|||||
Long-term debt
|
4
|
|
|
154
|
|
|
360
|
|
|
1,372
|
|
|
1,890
|
|
|||||
Interest on CDs, other bank borrowings, short-term loan and long-term debt
|
95
|
|
|
170
|
|
|
150
|
|
|
797
|
|
|
1,212
|
|
|||||
Operating leases, service bureau contract, and maintenance agreements
|
24
|
|
|
34
|
|
|
15
|
|
|
11
|
|
|
84
|
|
|||||
Hawaiian Electric open purchase order obligations
1
|
75
|
|
|
7
|
|
|
3
|
|
|
—
|
|
|
85
|
|
|||||
Hawaiian Electric fuel oil purchase obligations (estimate based on December 31, 2018 fuel oil prices)
|
140
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
156
|
|
|||||
Hawaiian Electric power purchase–minimum fixed capacity obligations
|
119
|
|
|
195
|
|
|
118
|
|
|
279
|
|
|
711
|
|
|||||
Liabilities for uncertain tax positions
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Total (estimated)
|
$
|
1,156
|
|
|
$
|
825
|
|
|
$
|
726
|
|
|
$
|
2,463
|
|
|
$
|
5,170
|
|
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
|
(147)/166
|
|
(137)/156
|
Other benefits
|
|
|
|
|
Discount rate
|
‘
+/- 50
|
(12)/13
|
|
(11)/12
|
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, 2018
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|||||||||
Utility returns
|
|
6.55
|
|
|
6.98
|
|
|
6.26
|
|
|
7.36
|
|
|
8.41
|
|
|
7.59
|
|
|
7.89
|
|
|
8.08
|
|
|
7.38
|
|
PUC-allowed returns
|
|
7.57
|
|
|
7.80
|
|
|
7.43
|
|
|
9.50
|
|
|
9.50
|
|
|
9.50
|
|
|
9.50
|
|
|
9.50
|
|
|
9.50
|
|
Difference
|
|
(1.02
|
)
|
|
(0.82
|
)
|
|
(1.17
|
)
|
|
(2.14
|
)
|
|
(1.09
|
)
|
|
(1.91
|
)
|
|
(1.61
|
)
|
|
(1.42
|
)
|
|
(2.12
|
)
|
•
|
2018
vs.
2017
|
2018
|
|
2017
|
|
Increase (decrease)
|
|
(dollars in millions, except per barrel amounts)
|
||||||||||
$
|
2,547
|
|
|
$
|
2,258
|
|
|
$
|
289
|
|
|
|
|
|
Revenues.
Net increase largely due to:
|
|
|
|
|
|
|
|
|
$
|
180
|
|
|
higher fuel prices
1
|
|||||
|
|
|
|
|
|
70
|
|
|
higher purchased power energy costs
2
|
|||||||
|
|
|
|
|
|
|
46
|
|
|
higher rate relief
|
||||||
|
|
|
|
|
|
39
|
|
|
higher RAM and MPIR revenues
|
|||||||
|
|
|
|
|
|
|
(46
|
)
|
|
Tax reform adjustment
|
||||||
761
|
|
|
588
|
|
|
173
|
|
|
|
|
Fuel oil expense
. Increase due to higher fuel oil prices and higher kWh generated
|
|||||
639
|
|
|
587
|
|
|
52
|
|
|
|
|
|
Purchased power expense
. Net increase due to:
|
||||
|
|
|
|
|
|
63
|
|
|
higher purchased power energy price
|
|||||||
|
|
|
|
|
|
(9
|
)
|
|
lower kWh purchased
|
|||||||
|
|
|
|
|
|
(3
|
)
|
|
lower PGV capacity charges
|
|||||||
461
|
|
|
412
|
|
|
49
|
|
|
|
|
|
Operation and maintenance expense
. Increase largely due to:
|
||||
|
|
|
|
|
|
|
24
|
|
|
reset of pension costs included in rates as part of rate case decisions
|
||||||
|
|
|
|
|
|
4
|
|
|
higher ERP costs related to outside consultants
|
|||||||
|
|
|
|
|
|
3
|
|
|
25KV underground circuit repair work
|
|||||||
|
|
|
|
|
|
3
|
|
|
higher operation and maintenance expense for generation plants
|
|||||||
|
|
|
|
|
|
2
|
|
|
higher corrective maintenance for transmission and distribution facilities
|
|||||||
|
|
|
|
|
|
2
|
|
|
write-off of preliminary engineering costs for LNG projects
|
|||||||
|
|
|
|
|
|
2
|
|
|
write-off of smart grid costs
|
|||||||
|
|
|
|
|
|
2
|
|
|
higher medical premium costs
|
|||||||
|
|
|
|
|
|
2
|
|
|
higher workers’ compensation claims
|
|||||||
|
|
|
|
|
|
2
|
|
|
operation expense for Schofield Generating Station placed in service in June
|
|||||||
|
|
|
|
|
|
2
|
|
|
Increased IT and cyber security costs
|
|||||||
|
|
|
|
|
|
1
|
|
|
one-time rent expense adjustment for existing substation land
|
|||||||
444
|
|
|
408
|
|
|
36
|
|
|
|
|
|
Other expenses
. Increase due to higher revenue taxes from higher revenue, coupled with higher depreciation expense for plant investments in 2017
|
||||
242
|
|
|
264
|
|
|
(22
|
)
|
|
|
|
|
Operating income.
Decrease due to higher operation and maintenance and other expenses, and tax reform revenue adjustment, offset in part by higher RAM and MPIR revenues and rate relief
|
||||
144
|
|
|
120
|
|
|
24
|
|
|
|
|
|
Net income for common stock.
Increase due to higher RAM and MPIR revenues, rate relief and lower taxes, offset in part by higher expenses. See below for discussion on effective tax rate
|
||||
7.6
|
%
|
|
6.6
|
%
|
|
1
|
%
|
|
|
|
Return on average common equity
|
|||||
87.90
|
|
|
68.78
|
|
|
19.12
|
|
|
|
|
Average fuel oil cost per barrel
1
|
|||||
8,689
|
|
|
8,690
|
|
|
(1
|
)
|
|
|
|
Kilowatthour sales (millions)
|
|||||
2,704
|
|
|
2,724
|
|
|
(20
|
)
|
|
|
|
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.
|
•
|
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
|
||||
412
|
|
|
400
|
|
|
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
|
||||
264
|
|
|
290
|
|
|
(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 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 contains 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.
|
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
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
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
|
|
|
|
||
Interim increase with Tax Act
|
|
4/13/18
|
|
(0.6
|
)
|
|
—
|
|
|
9.50
|
|
|
7.57
|
|
|
1,993
|
|
|
57.10
|
|
|
|
||
Final increase
|
|
9/1/18
|
|
(0.6
|
)
|
|
—
|
|
|
9.50
|
|
|
7.57
|
|
|
1,993
|
|
|
57.10
|
|
|
|
||
Hawaii Electric Light
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2016
2
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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
|
|
|
|
||
Interim increase with Tax Act
|
|
5/1/18
|
|
1.5
|
|
|
0.5
|
|
|
9.50
|
|
|
7.80
|
|
|
481
|
|
|
56.69
|
|
|
|
||
Final increase
|
|
10/1/18
|
|
—
|
|
|
—
|
|
|
9.50
|
|
|
7.80
|
|
|
481
|
|
|
56.69
|
|
|
|
||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Request
|
|
12/14/18
|
|
$
|
13.4
|
|
|
3.4
|
|
|
10.50
|
|
|
8.30
|
|
|
$
|
537
|
|
|
56.91
|
|
|
|
Maui Electric
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Request
|
|
10/12/17
|
|
$
|
30.1
|
|
|
9.3
|
|
|
10.60
|
|
|
8.05
|
|
|
$
|
473
|
|
|
56.94
|
|
|
Yes
|
Interim increase
|
|
8/23/18
|
|
12.5
|
|
|
3.82
|
|
|
9.50
|
|
|
7.43
|
|
|
462
|
|
|
57.02
|
|
|
|
1
|
Final decision and order was issued on June 22, 2018.
|
•
|
Authorized the use of consolidated depreciation and amortization rates rather than separate depreciation and amortization rates for the three utilities
|
•
|
Established revised depreciation and amortization rates for the three utilities
|
•
|
Approved the implementation of the new depreciation and amortization rates and other changes to coincide with the effective date of the interim or final base rates approved in the subsequent rate case for each utility, beginning with Maui Electric’s ongoing 2018 test year rate case
|
•
|
South Maui Renewable Resources (2.87 MW solar) reached commercial operations on May 5, 2018, and Kuia Solar (2.87 MW solar) reached commercial operations on October 4, 2018. Each project’s PPA with Maui Electric was approved by the PUC in February 2016, subject to certain modifications and conditions.
|
•
|
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 was expected to be placed into service by August 31, 2019, but has been delayed due to an appeal of the decision in the Habitat Conservation Permit contested case.
|
•
|
In July 2017, the PUC approved, with certain modifications and conditions, three PPAs for solar energy on Oahu with Waipio PV, LLC for 45.9 MW, Lanikuhana Solar, LLC for 14.7 MW and Kawailoa Solar, LLC for 49.0 MW. The three projects are now owned by Clearway Energy Group LLC, which is an investment of Global Infrastructure Partners. The three projects are expected to be in service by the end of 2019.
|
•
|
In July 2018, the PUC approved Maui Electric’s PPA with Molokai New Energy Partners to purchase solar energy from a PV plus battery storage project. The 4.88 MW project will deliver no more than 2.64 MW at any time to the Molokai system and is expected to be in service by January 2020.
|
•
|
As of December 31, 2018, there were approximately 461 MW, 98 MW and 108 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 Standard Interconnection Agreement, Net Energy Metering, Net Energy Metering Plus, Customer Grid Supply, Customer Self Supply, Customer Grid Supply Plus and Interim Smart Export. As of
December 31, 2018
, an estimated 28% of single-family homes on the islands of Oahu, Hawaii and Maui have installed private rooftop solar systems, and approximately 17% of the Utilities’ total customers have solar systems.
|
•
|
The Utilities began accepting energy from feed-in tariff projects in 2011. As of
December 31, 2018
, there were 33 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 July 2018, the PUC approved Hawaiian Electric’s 3-year biodiesel supply contract with Pacific Biodiesel Technologies, LLC (PBT) to supply 2 million to 4 million gallons of biodiesel at Hawaiian Electric’s Schofield Generating Station and the Honolulu International Airport Emergency Power Facility (HIA Facility) and any other generating unit on Oahu, as necessary. The PBT contract became effective on November 1, 2018. Hawaiian Electric also has a spot buy contract with PBT 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 2019.
|
•
|
Hawaiian Electric has a contingency supply contract with REG Marketing & Logistics Group, LLC to also supply biodiesel to any generating unit on Oahu in the event PBT is not able to supply necessary quantities. This contingency contract has been extended to November 2019, and will continue with no volume purchase requirements.
|
•
|
Under a request for proposal process governed by the PUC and monitored by independent observers, in February 2018, the Utilities issued RFPs for 220 MW of renewable generation on Oahu, 50 MW of renewable generation on Hawaii Island, and 60 MW of renewable generation on Maui. The Utilities selected a final award group for Hawaii Island in August 2018 and for Maui and Oahu in September 2018.
|
Utilities
|
|
Number of contracts
|
|
Total photovoltaic size (MW)
|
|
BESS Size (MW/MWh)
|
|
Guaranteed commercial operation dates
|
|
Contract term (years)
|
|
Total projected annual payment (in millions)
|
||
Hawaiian Electric
|
|
3
|
|
127
|
|
127 / 508
|
|
12/31/2021
|
|
20
|
|
$
|
27.9
|
|
Hawaii Electric Light
|
|
2
|
|
60
|
|
60 / 240
|
|
7/20/2021 & 6/30/2022
|
|
25
|
|
14.1
|
|
|
Maui Electric
|
|
2
|
|
75
|
|
75 / 300
|
|
7/20/2021 & 6/30/2022
|
|
25
|
|
17.6
|
|
|
Total
|
|
7
|
|
262
|
|
262 / 1048
|
|
|
|
|
|
$
|
59.6
|
|
•
|
In October 2017, the Utilities filed a draft request for proposal with the PUC for 40 MW of firm renewable generation on Maui (Maui Firm RFP) to be in service by the end of 2022. The Utilities are currently working with the independent observer for the Maui Firm RFP to update and revise the draft Maui Firm RFP for filing with the PUC for approval.
|
•
|
In January 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. In October 2018, Hawaiian Electric entered into a power purchase agreement with Eurus for a 46.8 MW onshore wind project, subject to PUC approval.
|
December 31
|
2018
|
|
2017
|
||||||||||
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||
Short-term borrowings
|
$
|
25
|
|
|
1
|
%
|
|
$
|
5
|
|
|
—
|
%
|
Long-term debt, net
|
1,419
|
|
|
41
|
|
|
1,369
|
|
|
42
|
|
||
Preferred stock
|
34
|
|
|
1
|
|
|
34
|
|
|
1
|
|
||
Common stock equity
|
1,958
|
|
|
57
|
|
|
1,845
|
|
|
57
|
|
||
|
$
|
3,436
|
|
|
100
|
%
|
|
$
|
3,253
|
|
|
100
|
%
|
|
Year ended
December 31, 2018
|
|
|
||||||||
(in millions)
|
Average
balance
|
|
End-of-period
balance
|
|
December 31,
2017
|
||||||
Short-term borrowings
1
|
|
|
|
|
|
||||||
Commercial paper
|
$
|
85
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Line of credit draws
|
—
|
|
|
—
|
|
|
—
|
|
|||
Borrowings from HEI
|
—
|
|
|
—
|
|
|
—
|
|
|||
Undrawn capacity under line of credit facility
|
—
|
|
|
200
|
|
|
200
|
|
1
|
The maximum amount of external short-term borrowings by Hawaiian Electric during 2018 was
$157 million
. At
December 31, 2018
, Hawaiian Electric had
no
short-term borrowings from Hawaii Electric Light or Maui Electric.
|
|
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)
|
2018
|
|
Change
|
|
2017
|
|
Change
|
|
2016
|
||||||||||
Net cash provided by operating activities
|
$
|
393,613
|
|
|
$
|
58,427
|
|
|
$
|
335,186
|
|
|
$
|
(34,731
|
)
|
|
$
|
369,917
|
|
Net cash used in investing activities
|
(405,182
|
)
|
|
(32,895
|
)
|
|
(372,287
|
)
|
|
(84,088
|
)
|
|
(288,199
|
)
|
|||||
Net cash provided by (used in) financing activities
|
34,929
|
|
|
59,597
|
|
|
(24,668
|
)
|
|
7,213
|
|
|
(31,881
|
)
|
•
|
Higher cash receipts from customers due to increased customer bills as a result of higher rates and higher fuel prices;
|
•
|
Lower cash contributions made to retirement benefit plans in 2018 due to the application of the 2011 contributions in excess of NPPC to reduce the 2018 contributions to an amount less than NPPC; and
|
•
|
Offset by higher revenue taxes paid due to higher revenues resulting from higher rates and higher fuel prices, and higher income taxes paid due to lower deductions recognized in 2018.
|
•
|
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; and
|
•
|
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).
|
December 31, 2018
|
Payments due by period
|
||||||||||||||||||
(in millions)
|
Less than 1 year
|
|
1-3
years
|
|
3-5
years
|
|
More than
5 years
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25
|
|
Long-term debt
|
—
|
|
|
96
|
|
|
152
|
|
|
1,179
|
|
|
1,427
|
|
|||||
Interest on long-term debt
|
68
|
|
|
128
|
|
|
125
|
|
|
761
|
|
|
1,082
|
|
|||||
Operating leases
|
6
|
|
|
11
|
|
|
4
|
|
|
3
|
|
|
24
|
|
|||||
Open purchase order obligations ¹
|
75
|
|
|
7
|
|
|
3
|
|
|
—
|
|
|
85
|
|
|||||
Fuel oil purchase obligations (estimate based on December 31, 2018 fuel oil prices)
|
140
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
156
|
|
|||||
Purchase power obligations-minimum fixed capacity charges
|
119
|
|
|
195
|
|
|
118
|
|
|
279
|
|
|
711
|
|
|||||
Liabilities for uncertain tax positions
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Total (estimated)
|
$
|
433
|
|
|
$
|
455
|
|
|
$
|
402
|
|
|
$
|
2,222
|
|
|
$
|
3,512
|
|
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.
|
•
|
2018 vs. 2017
|
(in millions)
|
|
2018
|
|
2017
|
|
Increase
(decrease)
|
|
Primary reason(s)
|
||||||
Interest income
|
|
$
|
258
|
|
|
$
|
236
|
|
|
$
|
22
|
|
|
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-backed securities portfolio balance for 2018 increased by $240 million compared to the average balance in 2017 as ASB purchased investments with liquidity not used to fund the loan portfolio. The average loan portfolio balance for 2018 was $54 million higher than 2017 primarily due to increases in the average HELOC, residential and consumer loan portfolio balances of $55 million, $45 million and $35 million, respectively. The growth in these loan portfolios was consistent with ASB’s portfolio mix targets and loan growth strategy. The average commercial and commercial real estate loan portfolio balances decreased by $51 million and $28 million, respectively, primarily due to ASB’s strategic decision to reduce the balances in certain commercial and national loan portfolios to improve credit quality in those portfolios. The yield on earning assets increased 18 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
|
|
56
|
|
|
62
|
|
|
(6
|
)
|
|
Noninterest income was lower in 2018 compared to 2017 primarily due to lower fees from other financial services as a result of debit card interchange expenses being netted against income beginning in 2018. Prior year’s debit card interchange expenses were recorded in other noninterest expense. This change was in accordance with the new revenue recognition accounting standard. See Note 8 of the Consolidated Financial Statements for additional information on the new revenue recognition standard. ASB also had lower fee income on deposit products and mortgage banking income. 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
|
|
314
|
|
|
298
|
|
|
16
|
|
|
The increase in revenues was due to higher interest income, partly offset by lower noninterest income.
|
|||
Interest expense
|
|
15
|
|
|
12
|
|
|
3
|
|
|
Higher interest expense was due to an increase in term certificate balances and increased rates for term certificates, money market accounts and repurchase agreements, partly offset by the payoff of a matured FHLB advance. Average deposit balances for 2018 increased by $342 million compared to 2017 due to an increase in core deposits and time certificates of $249 million and $93 million, respectively. The other borrowings average balance decreased by $36 million primarily due to the payoff of a matured FHLB advance.
|
|||
Provision for loan losses
|
|
15
|
|
|
11
|
|
|
4
|
|
|
The provision for loan losses for 2018 was primarily due to an increase in reserves for the consumer loan portfolio as a result of growth and increased net charge-offs. The provision for loan losses benefited from the release of reserves in the commercial, commercial real estate and HELOC loan portfolios as a result of improving credit trends. The provision for loan losses for 2017 was primarily due to an increase in reserves for the consumer loan portfolio as a result of growth and increased net charge-offs. The commercial and commercial real estate loan portfolios released reserves as a result of lower portfolio balances and improved credit trends.
|
|||
Noninterest expense
|
|
176
|
|
|
175
|
|
|
1
|
|
|
Higher noninterest expense was primarily due to higher compensation and employee benefit costs partly offset by lower other noninterest expenses as a result of debit card interchange expenses for 2018 being netted against debit card interchange income within noninterest income.
|
|||
Expenses
|
|
206
|
|
|
198
|
|
|
8
|
|
|
The increase in expenses was primarily due to increases in interest expense and higher provision for loan losses.
|
|||
Operating income
|
|
108
|
|
|
100
|
|
|
8
|
|
|
Higher interest income was partly offset by lower noninterest income, higher provision for loan losses, higher interest expense and higher noninterest expenses.
|
|||
Net income
|
|
83
|
|
|
67
|
|
|
16
|
|
|
The increase in net income was the result of higher operating income and lower income tax expense due to the Tax Act.
|
|||
Return on average equity
1
|
|
13.5
|
%
|
|
11.2
|
%
|
|
2.3
|
%
|
|
|
•
|
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-backed 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
|
|
|
The increase in revenues was due to higher interest income, partly offset by lower noninterest income.
|
|||
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
|
|
175
|
|
|
168
|
|
|
7
|
|
|
Higher noninterest expense was primarily due to higher compensation and employee benefit costs.
|
|||
Expenses
|
|
198
|
|
|
198
|
|
|
—
|
|
|
Expenses were flat as higher noninterest expense was offset by lower interest expense and provision for loan losses.
|
|||
Operating income
|
|
100
|
|
|
88
|
|
|
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
|
|
|
The increase in net income was the result of higher operating income and lower income tax expense due to the Tax Act.
|
|||
Return on average equity
1
|
|
11.2
|
%
|
|
9.9
|
%
|
|
1.3
|
%
|
|
|
1
|
Calculated using the average daily balances.
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||||||||||||||
(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
|
$
|
50,658
|
|
|
$
|
940
|
|
|
1.86
|
|
|
$
|
79,927
|
|
|
$
|
898
|
|
|
1.12
|
|
|
$
|
75,092
|
|
|
$
|
383
|
|
|
0.51
|
|
FHLB stock
|
9,726
|
|
|
351
|
|
|
3.60
|
|
|
10,770
|
|
|
208
|
|
|
1.93
|
|
|
11,153
|
|
|
191
|
|
|
1.72
|
|
||||||
Investment securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Taxable
|
1,503,036
|
|
|
35,862
|
|
|
2.39
|
|
|
1,265,240
|
|
|
27,291
|
|
|
2.16
|
|
|
934,469
|
|
|
18,592
|
|
|
1.99
|
|
||||||
Non-taxable
|
17,485
|
|
|
771
|
|
|
4.41
|
|
|
15,427
|
|
|
655
|
|
|
4.24
|
|
|
717
|
|
|
28
|
|
|
3.87
|
|
||||||
Total investment securities
|
1,520,521
|
|
|
36,633
|
|
|
2.41
|
|
|
1,280,667
|
|
|
27,946
|
|
|
2.18
|
|
|
935,186
|
|
|
18,620
|
|
|
1.99
|
|
||||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Residential 1-4 family
|
2,122,895
|
|
|
86,936
|
|
|
4.10
|
|
|
2,077,705
|
|
|
86,934
|
|
|
4.18
|
|
|
2,074,564
|
|
|
88,274
|
|
|
4.26
|
|
||||||
Commercial real estate
|
860,155
|
|
|
39,579
|
|
|
4.60
|
|
|
887,890
|
|
|
37,806
|
|
|
4.26
|
|
|
872,694
|
|
|
35,940
|
|
|
4.12
|
|
||||||
Home equity line of credit
|
944,065
|
|
|
34,634
|
|
|
3.67
|
|
|
889,360
|
|
|
30,001
|
|
|
3.37
|
|
|
859,955
|
|
|
28,249
|
|
|
3.28
|
|
||||||
Residential land
|
14,935
|
|
|
823
|
|
|
5.51
|
|
|
16,837
|
|
|
1,011
|
|
|
6.00
|
|
|
18,850
|
|
|
1,118
|
|
|
5.93
|
|
||||||
Commercial
|
579,765
|
|
|
26,689
|
|
|
4.60
|
|
|
631,170
|
|
|
27,405
|
|
|
4.34
|
|
|
743,586
|
|
|
29,743
|
|
|
4.00
|
|
||||||
Consumer
|
240,414
|
|
|
31,802
|
|
|
13.23
|
|
|
205,334
|
|
|
24,098
|
|
|
11.74
|
|
|
149,287
|
|
|
16,450
|
|
|
11.02
|
|
||||||
Total loans
2,3
|
4,762,229
|
|
|
220,463
|
|
|
4.63
|
|
|
4,708,296
|
|
|
207,255
|
|
|
4.40
|
|
|
4,718,936
|
|
|
199,774
|
|
|
4.23
|
|
||||||
Total interest-earning assets
|
6,343,134
|
|
|
258,387
|
|
|
4.07
|
|
|
6,079,660
|
|
|
236,307
|
|
|
3.89
|
|
|
5,740,367
|
|
|
218,968
|
|
|
3.81
|
|
||||||
Allowance for loan losses
|
(53,593
|
)
|
|
|
|
|
|
|
(55,629
|
)
|
|
|
|
|
|
|
|
(54,338
|
)
|
|
|
|
|
|
|
|||||||
Noninterest-earning assets
|
606,304
|
|
|
|
|
|
|
|
546,523
|
|
|
|
|
|
|
|
|
507,850
|
|
|
|
|
|
|
|
|||||||
Total Assets
|
$
|
6,895,845
|
|
|
|
|
|
|
|
$
|
6,570,554
|
|
|
|
|
|
|
|
|
$
|
6,193,879
|
|
|
|
|
|
|
|
||||
Liabilities and Shareholder’s Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Savings
|
$
|
2,334,681
|
|
|
1,639
|
|
|
0.07
|
|
|
$
|
2,278,396
|
|
|
1,567
|
|
|
0.07
|
|
|
$
|
2,117,186
|
|
|
1,402
|
|
|
0.07
|
|
|||
Interest-bearing checking
|
1,006,839
|
|
|
706
|
|
|
0.07
|
|
|
902,678
|
|
|
238
|
|
|
0.03
|
|
|
839,339
|
|
|
173
|
|
|
0.02
|
|
||||||
Money market
|
140,225
|
|
|
602
|
|
|
0.43
|
|
|
142,068
|
|
|
168
|
|
|
0.12
|
|
|
160,700
|
|
|
202
|
|
|
0.13
|
|
||||||
Time certificates
|
789,926
|
|
|
11,044
|
|
|
1.40
|
|
|
696,799
|
|
|
7,687
|
|
|
1.10
|
|
|
565,135
|
|
|
5,390
|
|
|
0.95
|
|
||||||
Total interest-bearing deposits
|
4,271,671
|
|
|
13,991
|
|
|
0.33
|
|
|
4,019,941
|
|
|
9,660
|
|
|
0.24
|
|
|
3,682,360
|
|
|
7,167
|
|
|
0.19
|
|
||||||
Advances from Federal Home Loan Bank
|
41,855
|
|
|
845
|
|
|
2.02
|
|
|
79,374
|
|
|
2,245
|
|
|
2.83
|
|
|
101,597
|
|
|
3,160
|
|
|
3.11
|
|
||||||
Securities sold under agreements to repurchase
|
99,162
|
|
|
703
|
|
|
0.71
|
|
|
97,535
|
|
|
251
|
|
|
0.26
|
|
|
169,730
|
|
|
2,428
|
|
|
1.43
|
|
||||||
Total interest-bearing liabilities
|
4,412,688
|
|
|
15,539
|
|
|
0.35
|
|
|
4,196,850
|
|
|
12,156
|
|
|
0.29
|
|
|
3,953,687
|
|
|
12,755
|
|
|
0.32
|
|
||||||
Noninterest bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Deposits
|
1,763,331
|
|
|
|
|
|
|
|
|
1,672,780
|
|
|
|
|
|
|
|
|
1,559,132
|
|
|
|
|
|
|
|
||||||
Other
|
108,976
|
|
|
|
|
|
|
|
|
102,789
|
|
|
|
|
|
|
|
|
102,302
|
|
|
|
|
|
|
|
||||||
Shareholder’s equity
|
610,850
|
|
|
|
|
|
|
|
|
598,135
|
|
|
|
|
|
|
|
|
578,758
|
|
|
|
|
|
|
|
||||||
Total Liabilities and Shareholder’s Equity
|
$
|
6,895,845
|
|
|
|
|
|
|
|
|
$
|
6,570,554
|
|
|
|
|
|
|
|
|
$
|
6,193,879
|
|
|
|
|
|
|
|
|||
Net interest income
|
|
|
|
$
|
242,848
|
|
|
|
|
|
|
|
|
$
|
224,151
|
|
|
|
|
|
|
|
|
$
|
206,213
|
|
|
|
|
|||
Net interest margin (%)
4
|
|
|
|
|
|
|
3.83
|
|
|
|
|
|
|
|
|
3.69
|
|
|
|
|
|
|
|
|
3.59
|
|
1
|
Interest income includes taxable equivalent basis adjustments of $0.2 million for 2018 based upon a federal statutory tax rate of 21%, and $0.2 million and $0.01 million for 2017 and 2016, respectively, based upon a federal statutory rate of 35%.
|
2
|
Includes loans held for sale, at lower of cost or fair value, of $2.3 million, $7.4 million and $5.4 million as of December 31, 2018, 2017 and 2016, respectively.
|
3
|
Includes recognition of net deferred loan fees of $0.1 million, $1.7 million and $2.8 million for 2018, 2017 and 2016 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.
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||||||||||||
(in thousands)
|
Rate
|
|
Volume
|
|
Total
|
|
Rate
|
|
Volume
|
|
Total
|
||||||||||||
Interest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-earning deposits
|
$
|
455
|
|
|
$
|
(413
|
)
|
|
$
|
42
|
|
|
$
|
488
|
|
|
$
|
27
|
|
|
$
|
515
|
|
FHLB stock
|
165
|
|
|
(22
|
)
|
|
143
|
|
|
24
|
|
|
(7
|
)
|
|
17
|
|
||||||
Investment securities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Taxable
|
3,100
|
|
|
5,471
|
|
|
8,571
|
|
|
1,691
|
|
|
7,008
|
|
|
8,699
|
|
||||||
Non-taxable
|
27
|
|
|
89
|
|
|
116
|
|
|
3
|
|
|
624
|
|
|
627
|
|
||||||
Total investment securities
|
3,127
|
|
|
5,560
|
|
|
8,687
|
|
|
1,694
|
|
|
7,632
|
|
|
9,326
|
|
||||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential 1-4 family
|
(1,768
|
)
|
|
1,770
|
|
|
2
|
|
|
(1,488
|
)
|
|
148
|
|
|
(1,340
|
)
|
||||||
Commercial real estate
|
2,972
|
|
|
(1,199
|
)
|
|
1,773
|
|
|
1,234
|
|
|
632
|
|
|
1,866
|
|
||||||
Home equity line of credit
|
2,740
|
|
|
1,893
|
|
|
4,633
|
|
|
781
|
|
|
971
|
|
|
1,752
|
|
||||||
Residential land
|
(79
|
)
|
|
(109
|
)
|
|
(188
|
)
|
|
13
|
|
|
(120
|
)
|
|
(107
|
)
|
||||||
Commercial
|
1,587
|
|
|
(2,303
|
)
|
|
(716
|
)
|
|
2,395
|
|
|
(4,733
|
)
|
|
(2,338
|
)
|
||||||
Consumer
|
3,284
|
|
|
4,420
|
|
|
7,704
|
|
|
1,134
|
|
|
6,514
|
|
|
7,648
|
|
||||||
Total loans
|
8,736
|
|
|
4,472
|
|
|
13,208
|
|
|
4,069
|
|
|
3,412
|
|
|
7,481
|
|
||||||
Total increase in interest income
|
12,483
|
|
|
9,597
|
|
|
22,080
|
|
|
6,275
|
|
|
11,064
|
|
|
17,339
|
|
||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Savings
|
—
|
|
|
(72
|
)
|
|
(72
|
)
|
|
—
|
|
|
(165
|
)
|
|
(165
|
)
|
||||||
Interest-bearing checking
|
(431
|
)
|
|
(37
|
)
|
|
(468
|
)
|
|
(56
|
)
|
|
(9
|
)
|
|
(65
|
)
|
||||||
Money market
|
(436
|
)
|
|
2
|
|
|
(434
|
)
|
|
13
|
|
|
21
|
|
|
34
|
|
||||||
Time certificates
|
(2,253
|
)
|
|
(1,104
|
)
|
|
(3,357
|
)
|
|
(928
|
)
|
|
(1,369
|
)
|
|
(2,297
|
)
|
||||||
Advances from Federal Home Loan Bank
|
528
|
|
|
872
|
|
|
1,400
|
|
|
267
|
|
|
648
|
|
|
915
|
|
||||||
Securities sold under agreements to repurchase
|
(448
|
)
|
|
(4
|
)
|
|
(452
|
)
|
|
1,433
|
|
|
744
|
|
|
2,177
|
|
||||||
Total decrease (increase) in interest expense
|
(3,040
|
)
|
|
(343
|
)
|
|
(3,383
|
)
|
|
729
|
|
|
(130
|
)
|
|
599
|
|
||||||
Increase in net interest income
|
$
|
9,443
|
|
|
$
|
9,254
|
|
|
$
|
18,697
|
|
|
$
|
7,004
|
|
|
$
|
10,934
|
|
|
$
|
17,938
|
|
December 31
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||||||||||||
(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
|
$
|
2,143,397
|
|
|
44.3
|
|
|
$
|
2,118,047
|
|
|
45.3
|
|
|
$
|
2,048,051
|
|
|
43.2
|
|
|
$
|
2,069,665
|
|
|
44.8
|
|
|
$
|
2,044,205
|
|
|
46.0
|
|
Commercial real estate
|
748,398
|
|
|
15.4
|
|
|
733,106
|
|
|
15.7
|
|
|
800,395
|
|
|
16.9
|
|
|
690,561
|
|
|
14.9
|
|
|
531,917
|
|
|
12.0
|
|
|||||
Home equity line of credit
|
978,237
|
|
|
20.2
|
|
|
913,052
|
|
|
19.6
|
|
|
863,163
|
|
|
18.2
|
|
|
846,294
|
|
|
18.3
|
|
|
818,815
|
|
|
18.4
|
|
|||||
Residential land
|
13,138
|
|
|
0.3
|
|
|
15,797
|
|
|
0.3
|
|
|
18,889
|
|
|
0.4
|
|
|
18,229
|
|
|
0.4
|
|
|
16,240
|
|
|
0.4
|
|
|||||
Commercial construction
|
92,264
|
|
|
1.9
|
|
|
108,273
|
|
|
2.3
|
|
|
126,768
|
|
|
2.7
|
|
|
100,796
|
|
|
2.2
|
|
|
96,438
|
|
|
2.2
|
|
|||||
Residential construction
|
14,307
|
|
|
0.3
|
|
|
14,910
|
|
|
0.3
|
|
|
16,080
|
|
|
0.3
|
|
|
14,089
|
|
|
0.3
|
|
|
18,961
|
|
|
0.4
|
|
|||||
Total real estate
|
3,989,741
|
|
|
82.4
|
|
|
3,903,185
|
|
|
83.5
|
|
|
3,873,346
|
|
|
81.7
|
|
|
3,739,634
|
|
|
80.9
|
|
|
3,526,576
|
|
|
79.4
|
|
|||||
Commercial
|
587,891
|
|
|
12.1
|
|
|
544,828
|
|
|
11.7
|
|
|
692,051
|
|
|
14.6
|
|
|
758,659
|
|
|
16.4
|
|
|
791,757
|
|
|
17.8
|
|
|||||
Consumer
|
266,002
|
|
|
5.5
|
|
|
223,564
|
|
|
4.8
|
|
|
178,222
|
|
|
3.7
|
|
|
123,775
|
|
|
2.7
|
|
|
122,656
|
|
|
2.8
|
|
|||||
Total loans
|
4,843,634
|
|
|
100.0
|
|
|
4,671,577
|
|
|
100.0
|
|
|
4,743,619
|
|
|
100.0
|
|
|
4,622,068
|
|
|
100.0
|
|
|
4,440,989
|
|
|
100.0
|
|
|||||
Less: Deferred fees and discounts
|
(613
|
)
|
|
|
|
|
(809
|
)
|
|
|
|
|
(4,926
|
)
|
|
|
|
|
(6,249
|
)
|
|
|
|
|
(6,338
|
)
|
|
|
|
|||||
Allowance for loan losses
|
(52,119
|
)
|
|
|
|
|
(53,637
|
)
|
|
|
|
|
(55,533
|
)
|
|
|
|
|
(50,038
|
)
|
|
|
|
|
(45,618
|
)
|
|
|
|
|||||
Total loans, net
|
$
|
4,790,902
|
|
|
|
|
|
$
|
4,617,131
|
|
|
|
|
|
$
|
4,683,160
|
|
|
|
|
|
$
|
4,565,781
|
|
|
|
|
|
$
|
4,389,033
|
|
|
|
|
1
|
Includes renegotiated loans.
|
December 31
|
2018
|
||||||||||||||
Due
|
In
1 year
or less
|
|
|
After 1 year
through
5 years
|
|
|
After
5 years
|
|
|
Total
|
|
||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial – Fixed
|
$
|
66
|
|
|
$
|
111
|
|
|
$
|
23
|
|
|
$
|
200
|
|
Commercial – Adjustable
|
157
|
|
|
213
|
|
|
18
|
|
|
388
|
|
||||
Total commercial
|
223
|
|
|
324
|
|
|
41
|
|
|
588
|
|
||||
Commercial construction – Fixed
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial construction – Adjustable
|
28
|
|
|
26
|
|
|
38
|
|
|
92
|
|
||||
Total commercial construction
|
28
|
|
|
26
|
|
|
38
|
|
|
92
|
|
||||
Residential construction – Fixed
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||
Residential construction – Adjustable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total residential construction
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||
Total loans – Fixed
|
80
|
|
|
111
|
|
|
23
|
|
|
214
|
|
||||
Total loans – Adjustable
|
185
|
|
|
239
|
|
|
56
|
|
|
480
|
|
||||
Total loans
|
$
|
265
|
|
|
$
|
350
|
|
|
$
|
79
|
|
|
$
|
694
|
|
December 31
|
|
2018
|
|
|
2017
|
|
||
Outstanding balance of home equity loans (in thousands)
|
|
$
|
978,237
|
|
|
$
|
913,052
|
|
Percent of portfolio in first lien position
|
|
49.2
|
%
|
|
48.0
|
%
|
||
Net charge-off (recovery) ratio
|
|
0.01
|
%
|
|
(0.03
|
)%
|
||
Delinquency ratio
|
|
0.46
|
%
|
|
0.28
|
%
|
|
|
|
|
|
|
End of draw period – interest only
|
|
Current
|
||||||||||||||||
December 31, 2018
|
|
Total
|
|
Interest only
|
|
2019-2020
|
|
2021-2023
|
|
Thereafter
|
|
amortizing
|
||||||||||||
Outstanding balance (in thousands)
|
|
$
|
978,237
|
|
|
$
|
740,431
|
|
|
$
|
38,912
|
|
|
$
|
133,819
|
|
|
$
|
567,700
|
|
|
$
|
237,806
|
|
% of total
|
|
100
|
%
|
|
76
|
%
|
|
4
|
%
|
|
14
|
%
|
|
58
|
%
|
|
24
|
%
|
December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Nonaccrual loans—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
$
|
12,037
|
|
|
$
|
12,598
|
|
|
$
|
11,154
|
|
|
$
|
20,554
|
|
|
$
|
19,253
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
223
|
|
|
1,188
|
|
|
5,112
|
|
|||||
Home equity line of credit
|
6,348
|
|
|
4,466
|
|
|
3,080
|
|
|
2,254
|
|
|
1,087
|
|
|||||
Residential land
|
436
|
|
|
841
|
|
|
878
|
|
|
970
|
|
|
720
|
|
|||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total real estate
|
18,821
|
|
|
17,905
|
|
|
15,335
|
|
|
24,966
|
|
|
26,172
|
|
|||||
Commercial
|
4,278
|
|
|
3,069
|
|
|
6,708
|
|
|
20,174
|
|
|
10,053
|
|
|||||
Consumer
|
4,196
|
|
|
2,617
|
|
|
1,282
|
|
|
895
|
|
|
661
|
|
|||||
Total nonaccrual loans
|
$
|
27,295
|
|
|
$
|
23,591
|
|
|
$
|
23,325
|
|
|
$
|
46,035
|
|
|
$
|
36,886
|
|
Troubled debt restructured loans not included above—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Residential 1-4 family
|
$
|
10,194
|
|
|
$
|
10,982
|
|
|
$
|
14,450
|
|
|
$
|
13,962
|
|
|
$
|
13,525
|
|
Commercial real estate
|
915
|
|
|
1,016
|
|
|
1,346
|
|
|
—
|
|
|
—
|
|
|||||
Home equity line of credit
|
11,597
|
|
|
6,584
|
|
|
4,934
|
|
|
2,467
|
|
|
480
|
|
|||||
Residential land
|
1,622
|
|
|
425
|
|
|
2,751
|
|
|
4,713
|
|
|
7,130
|
|
|||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total real estate
|
24,328
|
|
|
19,007
|
|
|
23,481
|
|
|
21,142
|
|
|
21,135
|
|
|||||
Commercial
|
1,527
|
|
|
1,741
|
|
|
14,146
|
|
|
1,104
|
|
|
2,972
|
|
|||||
Consumer
|
62
|
|
|
66
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|||||
Total troubled debt restructured loans
|
$
|
25,917
|
|
|
$
|
20,814
|
|
|
$
|
37,637
|
|
|
$
|
22,246
|
|
|
$
|
24,107
|
|
(dollars in millions)
|
Year ended December 31, 2018
|
||
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)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||||
Allowance for loan losses, January 1
|
$
|
53,637
|
|
|
$
|
55,533
|
|
|
$
|
50,038
|
|
|
$
|
45,618
|
|
|
$
|
40,116
|
|
Provision for loan losses
|
14,745
|
|
|
10,901
|
|
|
16,763
|
|
|
6,275
|
|
|
6,126
|
|
|||||
Charge-offs
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential 1-4 family
|
128
|
|
|
826
|
|
|
639
|
|
|
356
|
|
|
987
|
|
|||||
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Home equity line of credit
|
353
|
|
|
14
|
|
|
112
|
|
|
205
|
|
|
196
|
|
|||||
Residential land
|
18
|
|
|
210
|
|
|
138
|
|
|
—
|
|
|
81
|
|
|||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total real estate
|
499
|
|
|
1,050
|
|
|
889
|
|
|
561
|
|
|
1,264
|
|
|||||
Commercial
|
2,722
|
|
|
4,006
|
|
|
5,943
|
|
|
1,074
|
|
|
1,872
|
|
|||||
Consumer
|
17,296
|
|
|
11,757
|
|
|
7,413
|
|
|
4,791
|
|
|
2,414
|
|
|||||
Total charge-offs
|
20,517
|
|
|
16,813
|
|
|
14,245
|
|
|
6,426
|
|
|
5,550
|
|
|||||
Recoveries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential 1-4 family
|
74
|
|
|
157
|
|
|
421
|
|
|
226
|
|
|
1,180
|
|
|||||
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Home equity line of credit
|
257
|
|
|
308
|
|
|
59
|
|
|
80
|
|
|
752
|
|
|||||
Residential land
|
179
|
|
|
482
|
|
|
461
|
|
|
507
|
|
|
469
|
|
|||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total real estate
|
510
|
|
|
947
|
|
|
941
|
|
|
813
|
|
|
2,401
|
|
|||||
Commercial
|
2,136
|
|
|
1,852
|
|
|
1,093
|
|
|
2,773
|
|
|
1,636
|
|
|||||
Consumer
|
1,608
|
|
|
1,217
|
|
|
943
|
|
|
985
|
|
|
889
|
|
|||||
Total recoveries
|
4,254
|
|
|
4,016
|
|
|
2,977
|
|
|
4,571
|
|
|
4,926
|
|
|||||
Net charge-offs
|
16,263
|
|
|
12,797
|
|
|
11,268
|
|
|
1,855
|
|
|
624
|
|
|||||
Allowance for loan losses, December 31
|
$
|
52,119
|
|
|
$
|
53,637
|
|
|
$
|
55,533
|
|
|
$
|
50,038
|
|
|
$
|
45,618
|
|
Ratio of allowance for loan losses to loans held for investment
|
1.08
|
%
|
|
1.15
|
%
|
|
1.17
|
%
|
|
1.08
|
%
|
|
1.03
|
%
|
|||||
Ratio of provision for loan losses during the year to average total loans
|
0.31
|
%
|
|
0.23
|
%
|
|
0.36
|
%
|
|
0.14
|
%
|
|
0.14
|
%
|
|||||
Ratio of net charge-offs during the year to average total loans
|
0.34
|
%
|
|
0.27
|
%
|
|
0.24
|
%
|
|
0.04
|
%
|
|
0.01
|
%
|
December 31
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||
(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
|
$
|
1,976
|
|
|
0.09
|
|
|
44.3
|
|
|
$
|
2,902
|
|
|
0.14
|
|
|
45.3
|
|
|
$
|
2,873
|
|
|
0.14
|
|
|
43.2
|
|
Commercial real estate
|
14,505
|
|
|
1.94
|
|
|
15.4
|
|
|
15,796
|
|
|
2.15
|
|
|
15.7
|
|
|
16,004
|
|
|
2.00
|
|
|
16.9
|
|
|||
Home equity line of credit
|
6,371
|
|
|
0.65
|
|
|
20.2
|
|
|
7,522
|
|
|
0.82
|
|
|
19.6
|
|
|
5,039
|
|
|
0.58
|
|
|
18.2
|
|
|||
Residential land
|
479
|
|
|
3.65
|
|
|
0.3
|
|
|
896
|
|
|
5.67
|
|
|
0.3
|
|
|
1,738
|
|
|
9.20
|
|
|
0.4
|
|
|||
Commercial construction
|
2,790
|
|
|
3.02
|
|
|
1.9
|
|
|
4,671
|
|
|
4.31
|
|
|
2.3
|
|
|
6,449
|
|
|
5.09
|
|
|
2.7
|
|
|||
Residential construction
|
4
|
|
|
0.03
|
|
|
0.3
|
|
|
12
|
|
|
0.08
|
|
|
0.3
|
|
|
12
|
|
|
0.07
|
|
|
0.3
|
|
|||
Total real estate
|
26,125
|
|
|
0.65
|
|
|
82.4
|
|
|
31,799
|
|
|
0.81
|
|
|
83.5
|
|
|
32,115
|
|
|
0.83
|
|
|
81.7
|
|
|||
Commercial
|
9,225
|
|
|
1.57
|
|
|
12.1
|
|
|
10,851
|
|
|
1.99
|
|
|
11.7
|
|
|
16,618
|
|
|
2.40
|
|
|
14.6
|
|
|||
Consumer
|
16,769
|
|
|
6.30
|
|
|
5.5
|
|
|
10,987
|
|
|
4.91
|
|
|
4.8
|
|
|
6,800
|
|
|
3.82
|
|
|
3.7
|
|
|||
Total allowance for loan losses
|
$
|
52,119
|
|
|
1.08
|
|
|
100.0
|
|
|
$
|
53,637
|
|
|
1.15
|
|
|
100.0
|
|
|
$
|
55,533
|
|
|
1.17
|
|
|
100.0
|
|
December 31
|
2015
|
|
2014
|
||||||||||||||||
(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
|
$
|
4,186
|
|
|
0.20
|
|
|
44.8
|
|
|
$
|
4,662
|
|
|
0.23
|
|
|
46.0
|
|
Commercial real estate
|
11,342
|
|
|
1.64
|
|
|
14.9
|
|
|
8,954
|
|
|
1.68
|
|
|
12.0
|
|
||
Home equity line of credit
|
7,260
|
|
|
0.86
|
|
|
18.3
|
|
|
6,982
|
|
|
0.85
|
|
|
18.4
|
|
||
Residential land
|
1,671
|
|
|
9.17
|
|
|
0.4
|
|
|
1,875
|
|
|
11.55
|
|
|
0.4
|
|
||
Commercial construction
|
4,461
|
|
|
4.43
|
|
|
2.2
|
|
|
5,471
|
|
|
5.67
|
|
|
2.2
|
|
||
Residential construction
|
13
|
|
|
0.09
|
|
|
0.3
|
|
|
28
|
|
|
0.15
|
|
|
0.4
|
|
||
Total real estate
|
28,933
|
|
|
0.77
|
|
|
80.9
|
|
|
27,972
|
|
|
0.79
|
|
|
79.4
|
|
||
Commercial
|
17,208
|
|
|
2.27
|
|
|
16.4
|
|
|
14,017
|
|
|
1.77
|
|
|
17.8
|
|
||
Consumer
|
3,897
|
|
|
3.15
|
|
|
2.7
|
|
|
3,629
|
|
|
2.96
|
|
|
2.8
|
|
||
Total allowance for loan losses
|
$
|
50,038
|
|
|
1.08
|
|
|
100.0
|
|
|
$
|
45,618
|
|
|
1.03
|
|
|
100.0
|
|
December 31
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
(dollars in thousands)
|
|
Balance
|
|
% of total
|
|
Balance
|
|
% of total
|
|
Balance
|
|
% of total
|
|||||||||
U.S. Treasury and federal agency obligations
|
|
$
|
154,349
|
|
|
10
|
%
|
|
$
|
184,298
|
|
|
13
|
%
|
|
$
|
192,281
|
|
|
18
|
%
|
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
|
1,303,291
|
|
|
85
|
|
|
1,245,988
|
|
|
86
|
|
|
897,474
|
|
|
81
|
|
|||
Corporate bonds
|
|
49,132
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Mortgage revenue bonds
|
|
23,636
|
|
|
2
|
|
|
15,427
|
|
|
1
|
|
|
15,427
|
|
|
1
|
|
|||
Total investment securities
|
|
$
|
1,530,408
|
|
|
100
|
%
|
|
$
|
1,445,713
|
|
|
100
|
%
|
|
$
|
1,105,182
|
|
|
100
|
%
|
(dollars in millions)
|
In 1 year
or less
|
|
After 1 year
through 5 years
|
|
After 5 years
through 10 years
|
|
After
10 years
|
|
Mortgage-backed securities
|
|
Total
1
|
||||||||||||
U.S. Treasury and federal agency obligations
|
$
|
20
|
|
|
$
|
78
|
|
|
$
|
59
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
157
|
|
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,334
|
|
|
1,334
|
|
||||||
Corporate bonds
|
—
|
|
|
32
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
50
|
|
||||||
Mortgage revenue bonds
2
|
—
|
|
|
8
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
23
|
|
||||||
|
$
|
20
|
|
|
$
|
118
|
|
|
$
|
77
|
|
|
$
|
15
|
|
|
$
|
1,334
|
|
|
$
|
1,564
|
|
Weighted average yield
|
1.52
|
%
|
|
2.60
|
%
|
|
2.67
|
%
|
|
4.68
|
%
|
|
2.50
|
%
|
|
2.53
|
%
|
1
|
As of
December 31, 2018
, no investment exceeded 10% of ASB’s shareholder’s equity.
|
2
|
Weighted average yield on the mortgage revenue bonds is computed on a tax equivalent basis using a federal statutory tax rate of 21%.
|
Years ended December 31
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||
(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
|
$
|
2,334,681
|
|
|
54.6
|
%
|
|
0.07
|
%
|
|
$
|
2,278,396
|
|
|
56.7
|
%
|
|
0.07
|
%
|
|
$
|
2,117,186
|
|
|
57.5
|
%
|
|
0.07
|
%
|
Checking
|
1,006,839
|
|
|
23.6
|
|
|
0.07
|
|
|
902,678
|
|
|
22.5
|
|
|
0.03
|
|
|
839,339
|
|
|
22.8
|
|
|
0.02
|
|
|||
Money market
|
140,225
|
|
|
3.3
|
|
|
0.43
|
|
|
142,068
|
|
|
3.5
|
|
|
0.12
|
|
|
160,700
|
|
|
4.4
|
|
|
0.13
|
|
|||
Certificate
|
789,926
|
|
|
18.5
|
|
|
1.40
|
|
|
696,799
|
|
|
17.3
|
|
|
1.10
|
|
|
565,135
|
|
|
15.3
|
|
|
0.95
|
|
|||
Total interest-bearing deposit liabilities
|
$
|
4,271,671
|
|
|
100.0
|
%
|
|
0.33
|
%
|
|
$
|
4,019,941
|
|
|
100.0
|
%
|
|
0.24
|
%
|
|
$
|
3,682,360
|
|
|
100.0
|
%
|
|
0.19
|
%
|
Total noninterest-bearing demand deposit liabilities
|
1,763,331
|
|
|
|
|
|
|
1,672,780
|
|
|
|
|
|
|
1,559,132
|
|
|
|
|
|
|||||||||
Total deposit liabilities
|
$
|
6,035,002
|
|
|
|
|
|
|
$
|
5,692,721
|
|
|
|
|
|
|
$
|
5,241,492
|
|
|
|
|
|
(in thousands)
|
Amount
|
|
|
Three months or less
|
$
|
237,347
|
|
Greater than three months through six months
|
84,572
|
|
|
Greater than six months through twelve months
|
41,447
|
|
|
Greater than twelve months
|
136,861
|
|
|
|
$
|
500,227
|
|
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
|
2018
|
|
|
% change
|
|
|
2017
|
|
|
% change
|
|
||
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||
Total assets
|
$
|
7,028
|
|
|
3
|
|
|
$
|
6,799
|
|
|
6
|
|
Investment securities
|
1,530
|
|
|
6
|
|
|
1,446
|
|
|
31
|
|
||
Loans held for investment, net
|
4,791
|
|
|
4
|
|
|
4,617
|
|
|
(1
|
)
|
||
Deposit liabilities
|
6,159
|
|
|
5
|
|
|
5,891
|
|
|
6
|
|
||
Other bank borrowings
|
110
|
|
|
(42
|
)
|
|
191
|
|
|
(1
|
)
|
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, 2018
|
|
December 31, 2017
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
+300
|
|
2.5
|
%
|
|
3.0
|
%
|
|
10.0
|
%
|
|
(8.0
|
)%
|
+200
|
|
1.9
|
|
|
2.4
|
|
|
8.1
|
|
|
(4.0
|
)
|
+100
|
|
1.1
|
|
|
1.6
|
|
|
5.1
|
|
|
(0.6
|
)
|
-100
|
|
(2.3
|
)
|
|
(2.7
|
)
|
|
(11.0
|
)
|
|
(6.0
|
)
|
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, 2018, 2017 and 2016
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017 and 2016
|
|
Consolidated Balance Sheets at December 31, 2018 and 2017
|
|
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016
|
|
Hawaiian Electric
|
|
Consolidated Statements of Income for the years ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017 and 2016
|
|
Consolidated Balance Sheets at December 31, 2018 and 2017
|
|
Consolidated Statements of Capitalization at December 31, 2018 and 2017
|
|
Consolidated Statements of Changes in Common Stock Equity for the years ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016
|
|
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
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|||
Revenues
|
|
|
|
|
|
|
|
|
|||
Electric utility
|
$
|
2,546,525
|
|
|
$
|
2,257,566
|
|
|
$
|
2,094,368
|
|
Bank
|
314,275
|
|
|
297,640
|
|
|
285,924
|
|
|||
Other
|
49
|
|
|
419
|
|
|
362
|
|
|||
Total revenues
|
2,860,849
|
|
|
2,555,625
|
|
|
2,380,654
|
|
|||
Expenses
|
|
|
|
|
|
|
|
|
|||
Electric utility
|
2,304,864
|
|
|
1,994,042
|
|
|
1,804,298
|
|
|||
Bank
|
206,040
|
|
|
198,104
|
|
|
197,697
|
|
|||
Other
|
16,589
|
|
|
17,246
|
|
|
22,821
|
|
|||
Total expenses
|
2,527,493
|
|
|
2,209,392
|
|
|
2,024,816
|
|
|||
Operating income (loss)
|
|
|
|
|
|
|
|
|
|||
Electric utility
|
241,661
|
|
|
263,524
|
|
|
290,070
|
|
|||
Bank
|
108,235
|
|
|
99,536
|
|
|
88,227
|
|
|||
Other
|
(16,540
|
)
|
|
(16,827
|
)
|
|
(22,459
|
)
|
|||
Total operating income
|
333,356
|
|
|
346,233
|
|
|
355,838
|
|
|||
Merger termination fee
|
—
|
|
|
—
|
|
|
90,000
|
|
|||
Retirement defined benefits expense—other than service costs
|
(5,962
|
)
|
|
(7,942
|
)
|
|
(7,663
|
)
|
|||
Interest expense, net – other than on deposit liabilities and other bank borrowings
|
(88,677
|
)
|
|
(78,972
|
)
|
|
(75,803
|
)
|
|||
Allowance for borrowed funds used during construction
|
4,867
|
|
|
4,778
|
|
|
3,144
|
|
|||
Allowance for equity funds used during construction
|
10,877
|
|
|
12,483
|
|
|
8,325
|
|
|||
Income before income taxes
|
254,461
|
|
|
276,580
|
|
|
373,841
|
|
|||
Income taxes
|
50,797
|
|
|
109,393
|
|
|
123,695
|
|
|||
Net income
|
203,664
|
|
|
167,187
|
|
|
250,146
|
|
|||
Preferred stock dividends of subsidiaries
|
1,890
|
|
|
1,890
|
|
|
1,890
|
|
|||
Net income for common stock
|
$
|
201,774
|
|
|
$
|
165,297
|
|
|
$
|
248,256
|
|
Basic earnings per common share
|
$
|
1.85
|
|
|
$
|
1.52
|
|
|
$
|
2.30
|
|
Diluted earnings per common share
|
$
|
1.85
|
|
|
$
|
1.52
|
|
|
$
|
2.29
|
|
Weighted-average number of common shares outstanding
|
108,855
|
|
|
108,749
|
|
|
108,102
|
|
|||
Net effect of potentially dilutive shares
|
291
|
|
|
184
|
|
|
207
|
|
|||
Weighted-average shares assuming dilution
|
109,146
|
|
|
108,933
|
|
|
108,309
|
|
Consolidated Statements of Comprehensive Income
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Net income for common stock
|
$
|
201,774
|
|
|
$
|
165,297
|
|
|
$
|
248,256
|
|
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 $3,468, $2,886 and $3,763 for 2018, 2017 and 2016, respectively
|
(9,472
|
)
|
|
(4,370
|
)
|
|
(5,699
|
)
|
|||
Reclassification adjustment for net realized gains included in net income, net of taxes of nil, nil and $238 for 2018, 2017 and 2016, respectively
|
—
|
|
|
—
|
|
|
(360
|
)
|
|||
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, nil and $179 for 2018, 2017 and 2016, respectively
|
—
|
|
|
—
|
|
|
(281
|
)
|
|||
Unrealized interest rate hedging gain (loss), net of tax (expense) benefit of $151, nil and nil for 2018, 2017 and 2016, respectively
|
(436
|
)
|
|
—
|
|
|
—
|
|
|||
Reclassification adjustment to net income, net of (taxes) benefits of nil, $289 and $(76) for 2018, 2017 and 2016, respectively
|
—
|
|
|
454
|
|
|
(119
|
)
|
|||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|||
Net gains (losses) arising during the period, net of (taxes) benefits of $9,810, $(41,129) and $27,703 for 2018, 2017 and 2016, respectively
|
(28,101
|
)
|
|
65,531
|
|
|
(43,510
|
)
|
|||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $7,317, $10,041 and $9,267 for 2018, 2017 and 2016, respectively
|
21,015
|
|
|
15,737
|
|
|
14,518
|
|
|||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of (taxes) benefits of $(2,887), $49,523 and $(18,206) for 2018, 2017 and 2016, respectively
|
8,325
|
|
|
(78,724
|
)
|
|
28,584
|
|
|||
Other comprehensive loss, net of taxes
|
(8,669
|
)
|
|
(1,372
|
)
|
|
(6,867
|
)
|
|||
Comprehensive income attributable to Hawaiian Electric Industries, Inc.
|
$
|
193,105
|
|
|
$
|
163,925
|
|
|
$
|
241,389
|
|
Consolidated Balance Sheets
|
December 31
|
|
|
|
2018
|
|
|
|
|
|
2017
|
|
||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
|
|
$
|
169,208
|
|
|
|
|
|
$
|
261,881
|
|
||
Accounts receivable and unbilled revenues, net
|
|
|
|
325,672
|
|
|
|
|
|
263,209
|
|
||||
Available-for-sale investment securities, at fair value
|
|
|
|
1,388,533
|
|
|
|
|
|
1,401,198
|
|
||||
Held-to-maturity investment securities, at amortized cost
|
|
|
141,875
|
|
|
|
|
44,515
|
|
||||||
Stock in Federal Home Loan Bank, at cost
|
|
|
|
9,958
|
|
|
|
|
|
9,706
|
|
||||
Loans held for investment, net
|
|
|
|
4,790,902
|
|
|
|
|
|
4,617,131
|
|
||||
Loans held for sale, at lower of cost or fair value
|
|
|
|
1,805
|
|
|
|
|
|
11,250
|
|
||||
Property, plant and equipment, net
|
|
|
|
|
|
|
|
|
|
|
|
||||
Land
|
$
|
102,925
|
|
|
|
|
|
$
|
102,588
|
|
|
|
|
||
Plant and equipment
|
7,118,709
|
|
|
|
|
|
6,598,751
|
|
|
|
|
||||
Construction in progress
|
267,714
|
|
|
|
|
|
312,204
|
|
|
|
|
||||
|
7,489,348
|
|
|
|
|
|
7,013,543
|
|
|
|
|
||||
Less – accumulated depreciation
|
(2,659,230
|
)
|
|
4,830,118
|
|
|
(2,553,295
|
)
|
|
4,460,248
|
|
||||
Regulatory assets
|
|
|
|
833,426
|
|
|
|
|
|
869,297
|
|
||||
Other
|
|
|
|
530,364
|
|
|
|
|
|
513,535
|
|
||||
Goodwill
|
|
|
|
82,190
|
|
|
|
|
|
82,190
|
|
||||
Total assets
|
|
|
|
$
|
13,104,051
|
|
|
|
|
|
$
|
12,534,160
|
|
||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accounts payable
|
|
|
|
$
|
214,773
|
|
|
|
|
|
$
|
193,714
|
|
||
Interest and dividends payable
|
|
|
|
28,254
|
|
|
|
|
|
25,837
|
|
||||
Deposit liabilities
|
|
|
|
6,158,852
|
|
|
|
|
|
5,890,597
|
|
||||
Short-term borrowings—other than bank
|
|
|
|
73,992
|
|
|
|
|
|
117,945
|
|
||||
Other bank borrowings
|
|
|
|
110,040
|
|
|
|
|
|
190,859
|
|
||||
Long-term debt, net—other than bank
|
|
|
|
1,879,641
|
|
|
|
|
|
1,683,797
|
|
||||
Deferred income taxes
|
|
|
|
372,518
|
|
|
|
|
|
388,430
|
|
||||
Regulatory liabilities
|
|
|
|
950,236
|
|
|
|
|
|
880,770
|
|
||||
Defined benefit pension and other postretirement benefit plans liability
|
|
|
|
538,384
|
|
|
|
|
|
509,514
|
|
||||
Other
|
|
|
|
580,788
|
|
|
|
|
|
521,018
|
|
||||
Total liabilities
|
|
|
|
10,907,478
|
|
|
|
|
|
10,402,481
|
|
||||
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: 108,879,245 shares and 108,787,807 shares at December 31, 2018 and 2017, respectively
|
|
|
|
1,669,267
|
|
|
|
|
|
1,662,491
|
|
||||
Retained earnings
|
|
|
|
543,623
|
|
|
|
|
|
476,836
|
|
||||
Accumulated other comprehensive loss, net of tax benefits
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized losses on securities
|
$
|
(24,423
|
)
|
|
|
|
|
$
|
(14,951
|
)
|
|
|
|
||
Unrealized losses on derivatives
|
(436
|
)
|
|
|
|
|
—
|
|
|
|
|
||||
Retirement benefit plans
|
(25,751
|
)
|
|
(50,610
|
)
|
|
(26,990
|
)
|
|
(41,941
|
)
|
||||
Total shareholders’ equity
|
|
|
|
2,162,280
|
|
|
|
|
|
2,097,386
|
|
||||
Total liabilities and shareholders’ equity
|
|
|
|
$
|
13,104,051
|
|
|
|
|
|
$
|
12,534,160
|
|
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, 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
|
|
||||
Share-based 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
|
|
||||
Share-based 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
|
|
||||
Net income for common stock
|
—
|
|
|
—
|
|
|
201,774
|
|
|
—
|
|
|
201,774
|
|
||||
Other comprehensive loss, net of tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,669
|
)
|
|
(8,669
|
)
|
||||
Issuance of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Retirement savings and other plans
|
91
|
|
|
2,650
|
|
|
—
|
|
|
—
|
|
|
2,650
|
|
||||
Share-based expenses and other, net
|
—
|
|
|
4,126
|
|
|
—
|
|
|
—
|
|
|
4,126
|
|
||||
Common stock dividends ($1.24 per share)
|
—
|
|
|
—
|
|
|
(134,987
|
)
|
|
—
|
|
|
(134,987
|
)
|
||||
Balance, December 31, 2018
|
108,879
|
|
|
$
|
1,669,267
|
|
|
$
|
543,623
|
|
|
$
|
(50,610
|
)
|
|
$
|
2,162,280
|
|
Consolidated Statements of Cash Flows
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
203,664
|
|
|
$
|
167,187
|
|
|
$
|
250,146
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|||
Depreciation of property, plant and equipment
|
214,036
|
|
|
200,658
|
|
|
194,273
|
|
|||
Other amortization
|
41,593
|
|
|
21,340
|
|
|
10,473
|
|
|||
Provision for loan losses
|
14,745
|
|
|
10,901
|
|
|
16,763
|
|
|||
Loans originated and purchased, held for sale
|
(109,537
|
)
|
|
(115,104
|
)
|
|
(236,769
|
)
|
|||
Proceeds from sale of loans, held for sale
|
112,182
|
|
|
127,951
|
|
|
236,062
|
|
|||
Deferred income taxes
|
(9,368
|
)
|
|
37,835
|
|
|
47,118
|
|
|||
Share-based compensation expense
|
7,792
|
|
|
5,404
|
|
|
4,789
|
|
|||
Allowance for equity funds used during construction
|
(10,877
|
)
|
|
(12,483
|
)
|
|
(8,325
|
)
|
|||
Other
|
(4,219
|
)
|
|
(3,324
|
)
|
|
(12,422
|
)
|
|||
Changes in assets and liabilities
|
|
|
|
|
|
|
|
|
|||
Increase in accounts receivable and unbilled revenues, net
|
(64,321
|
)
|
|
(12,875
|
)
|
|
(898
|
)
|
|||
Decrease (increase) in fuel oil stock
|
7,054
|
|
|
(20,794
|
)
|
|
4,786
|
|
|||
Decrease (increase) in regulatory assets
|
9,252
|
|
|
(17,256
|
)
|
|
(18,273
|
)
|
|||
Increase (decrease) in accounts, interest and dividends payable
|
21,528
|
|
|
34,985
|
|
|
(9,643
|
)
|
|||
Change in prepaid and accrued income taxes, tax credits and utility revenue taxes
|
29,429
|
|
|
20,685
|
|
|
39,109
|
|
|||
Increase in defined benefit pension and other postretirement benefit plans liability
|
20,871
|
|
|
882
|
|
|
1,587
|
|
|||
Change in other assets and liabilities, net
|
15,488
|
|
|
(25,551
|
)
|
|
(23,118
|
)
|
|||
Net cash provided by operating activities
|
499,312
|
|
|
420,441
|
|
|
495,658
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Available-for-sale investment securities purchased
|
(224,335
|
)
|
|
(528,379
|
)
|
|
(533,956
|
)
|
|||
Principal repayments on available-for-sale investment securities
|
218,930
|
|
|
220,231
|
|
|
219,845
|
|
|||
Proceeds from sale of available-for-sale investment securities
|
—
|
|
|
—
|
|
|
16,423
|
|
|||
Purchases of held-to-maturity investment securities
|
(103,184
|
)
|
|
(44,515
|
)
|
|
—
|
|
|||
Proceeds from repayments or maturities of held-to-maturity investment securities
|
5,720
|
|
|
—
|
|
|
—
|
|
|||
Purchase of stock from Federal Home Loan Bank
|
(28,292
|
)
|
|
(2,868
|
)
|
|
(7,773
|
)
|
|||
Redemption of stock from Federal Home Loan Bank
|
28,040
|
|
|
4,380
|
|
|
7,233
|
|
|||
Net decrease (increase) in loans held for investment
|
(189,352
|
)
|
|
15,887
|
|
|
(194,042
|
)
|
|||
Proceeds from sale of commercial loans
|
7,149
|
|
|
36,760
|
|
|
52,299
|
|
|||
Proceeds from sale of real estate acquired in settlement of loans
|
589
|
|
|
1,019
|
|
|
829
|
|
|||
Proceeds from sale of real estate held for sale
|
—
|
|
|
—
|
|
|
1,764
|
|
|||
Capital expenditures
|
(537,369
|
)
|
|
(495,187
|
)
|
|
(330,043
|
)
|
|||
Contributions in aid of construction
|
30,599
|
|
|
64,733
|
|
|
30,100
|
|
|||
Contributions to low income housing investments
|
(14,499
|
)
|
|
(17,505
|
)
|
|
—
|
|
|||
Acquisition of business
|
—
|
|
|
(76,323
|
)
|
|
—
|
|
|||
Other, net
|
13,945
|
|
|
6,468
|
|
|
856
|
|
|||
Net cash used in investing activities
|
(792,059
|
)
|
|
(815,299
|
)
|
|
(736,465
|
)
|
Consolidated Statements of Cash Flows (continued)
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Net increase in deposit liabilities
|
165,880
|
|
|
341,668
|
|
|
523,675
|
|
|||
Net increase (decrease) in short-term borrowings with original maturities of three months or less
|
(18,999
|
)
|
|
67,992
|
|
|
(103,063
|
)
|
|||
Proceeds from issuance of short-term debt
|
25,000
|
|
|
125,000
|
|
|
—
|
|
|||
Repayment of short-term debt
|
(50,000
|
)
|
|
(75,000
|
)
|
|
—
|
|
|||
Net increase (decrease) in retail repurchase agreements
|
26,556
|
|
|
61,776
|
|
|
(43,601
|
)
|
|||
Proceeds from other bank borrowings
|
696,000
|
|
|
59,500
|
|
|
180,835
|
|
|||
Repayments of other bank borrowings
|
(701,000
|
)
|
|
(123,034
|
)
|
|
(272,902
|
)
|
|||
Proceeds from issuance of long-term debt
|
250,000
|
|
|
532,325
|
|
|
115,000
|
|
|||
Repayment of long-term debt and funds transferred for redemption of special purpose revenue bonds
|
(53,887
|
)
|
|
(465,000
|
)
|
|
(75,000
|
)
|
|||
Withheld shares for employee taxes on vested share-based compensation
|
(996
|
)
|
|
(3,828
|
)
|
|
(2,416
|
)
|
|||
Net proceeds from issuance of common stock
|
—
|
|
|
—
|
|
|
13,220
|
|
|||
Common stock dividends
|
(134,987
|
)
|
|
(134,873
|
)
|
|
(117,274
|
)
|
|||
Preferred stock dividends of subsidiaries
|
(1,890
|
)
|
|
(1,890
|
)
|
|
(1,890
|
)
|
|||
Other
|
(1,603
|
)
|
|
(6,349
|
)
|
|
2,197
|
|
|||
Net cash provided by financing activities
|
200,074
|
|
|
378,287
|
|
|
218,781
|
|
|||
Net decrease in cash and cash equivalents
|
(92,673
|
)
|
|
(16,571
|
)
|
|
(22,026
|
)
|
|||
Cash and cash equivalents, January 1
|
261,881
|
|
|
278,452
|
|
|
300,478
|
|
|||
Cash and cash equivalents, December 31
|
$
|
169,208
|
|
|
$
|
261,881
|
|
|
$
|
278,452
|
|
Consolidated Statements of Income
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Revenues
|
$
|
2,546,525
|
|
|
$
|
2,257,566
|
|
|
$
|
2,094,368
|
|
Expenses
|
|
|
|
|
|
|
|
|
|||
Fuel oil
|
760,528
|
|
|
587,768
|
|
|
454,704
|
|
|||
Purchased power
|
639,307
|
|
|
586,634
|
|
|
562,740
|
|
|||
Other operation and maintenance
|
461,491
|
|
|
411,907
|
|
|
399,931
|
|
|||
Depreciation
|
203,626
|
|
|
192,784
|
|
|
187,061
|
|
|||
Taxes, other than income taxes
|
239,912
|
|
|
214,949
|
|
|
199,862
|
|
|||
Total expenses
|
2,304,864
|
|
|
1,994,042
|
|
|
1,804,298
|
|
|||
Operating income
|
241,661
|
|
|
263,524
|
|
|
290,070
|
|
|||
Allowance for equity funds used during construction
|
10,877
|
|
|
12,483
|
|
|
8,325
|
|
|||
Retirement defined benefits expense—other than service costs
|
(3,631
|
)
|
|
(6,003
|
)
|
|
(5,602
|
)
|
|||
Interest expense and other charges, net
|
(73,348
|
)
|
|
(69,637
|
)
|
|
(66,824
|
)
|
|||
Allowance for borrowed funds used during construction
|
4,867
|
|
|
4,778
|
|
|
3,144
|
|
|||
Income before income taxes
|
180,426
|
|
|
205,145
|
|
|
229,113
|
|
|||
Income taxes
|
34,778
|
|
|
83,199
|
|
|
84,801
|
|
|||
Net income
|
145,648
|
|
|
121,946
|
|
|
144,312
|
|
|||
Preferred stock dividends of subsidiaries
|
915
|
|
|
915
|
|
|
915
|
|
|||
Net income attributable to Hawaiian Electric
|
144,733
|
|
|
121,031
|
|
|
143,397
|
|
|||
Preferred stock dividends of Hawaiian Electric
|
1,080
|
|
|
1,080
|
|
|
1,080
|
|
|||
Net income for common stock
|
$
|
143,653
|
|
|
$
|
119,951
|
|
|
$
|
142,317
|
|
Consolidated Statements of Comprehensive Income
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in thousands)
|
|
|
|
|
|
||||||
Net income for common stock
|
$
|
143,653
|
|
|
$
|
119,951
|
|
|
$
|
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 of nil, nil and $179 for
2018, 2017 and 2016
, respectively
|
—
|
|
|
—
|
|
|
(281
|
)
|
|||
Reclassification adjustment to net income, net of (taxes) benefits of nil, $289 and $(110) for
2018, 2017 and 2016
, respectively
|
—
|
|
|
454
|
|
|
(173
|
)
|
|||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|||
Net gains (losses) arising during the period, net of (taxes) benefits of $9,024, $(39,587) and $27,153 for
2018, 2017 and 2016
, respectively
|
(26,019
|
)
|
|
63,105
|
|
|
(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 of $6,594, $9,221 and $8,442 for
2018, 2017 and 2016
, respectively
|
19,012
|
|
|
14,477
|
|
|
13,254
|
|
|||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of (taxes) benefits of $(2,887), $49,523 and $(18,206) for
2018, 2017 and 2016
, respectively
|
8,325
|
|
|
(78,724
|
)
|
|
28,584
|
|
|||
Other comprehensive income (loss), net of taxes
|
1,318
|
|
|
(688
|
)
|
|
(1,247
|
)
|
|||
Comprehensive income attributable to Hawaiian Electric Company, Inc.
|
$
|
144,971
|
|
|
$
|
119,263
|
|
|
$
|
141,070
|
|
Consolidated Balance Sheets
|
December 31
|
2018
|
|
|
2017
|
|
||
(in thousands)
|
|
|
|
|
|
||
Assets
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
||||
Utility property, plant and equipment
|
|
|
|
|
|
||
Land
|
$
|
49,667
|
|
|
$
|
49,330
|
|
Plant and equipment
|
6,809,671
|
|
|
6,404,887
|
|
||
Less accumulated depreciation
|
(2,577,342
|
)
|
|
(2,476,352
|
)
|
||
Construction in progress
|
233,145
|
|
|
263,094
|
|
||
Utility property, plant and equipment, net
|
4,515,141
|
|
|
4,240,959
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation of $1,255 and $1,251 as of December 31, 2018 and 2017, respectively
|
6,961
|
|
|
7,580
|
|
||
Total property, plant and equipment, net
|
4,522,102
|
|
|
4,248,539
|
|
||
Current assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
35,877
|
|
|
12,517
|
|
||
Customer accounts receivable, net
|
177,896
|
|
|
127,889
|
|
||
Accrued unbilled revenues, net
|
121,738
|
|
|
107,054
|
|
||
Other accounts receivable, net
|
6,215
|
|
|
7,163
|
|
||
Fuel oil stock, at average cost
|
79,935
|
|
|
86,873
|
|
||
Materials and supplies, at average cost
|
55,204
|
|
|
54,397
|
|
||
Prepayments and other
|
32,118
|
|
|
25,355
|
|
||
Regulatory assets
|
71,016
|
|
|
88,390
|
|
||
Total current assets
|
579,999
|
|
|
509,638
|
|
||
Other long-term assets
|
|
|
|
|
|
||
Regulatory assets
|
762,410
|
|
|
780,907
|
|
||
Other
|
102,992
|
|
|
91,529
|
|
||
Total other long-term assets
|
865,402
|
|
|
872,436
|
|
||
Total assets
|
$
|
5,967,503
|
|
|
$
|
5,630,613
|
|
Capitalization and liabilities
|
|
|
|
|
|
||
Capitalization
(see Consolidated Statements of Capitalization)
|
|
|
|
|
|
||
Common stock equity
|
$
|
1,957,641
|
|
|
$
|
1,845,283
|
|
Cumulative preferred stock – not subject to mandatory redemption
|
34,293
|
|
|
34,293
|
|
||
Commitments and contingencies (Note 3)
|
|
|
|
|
|
||
Long-term debt, net
|
1,418,802
|
|
|
1,318,516
|
|
||
Total capitalization
|
3,410,736
|
|
|
3,198,092
|
|
||
Current liabilities
|
|
|
|
|
|
||
Current portion of long-term debt
|
—
|
|
|
49,963
|
|
||
Short-term borrowings from non-affiliate
|
25,000
|
|
|
4,999
|
|
||
Accounts payable
|
171,791
|
|
|
159,610
|
|
||
Interest and preferred dividends payable
|
23,215
|
|
|
22,575
|
|
||
Taxes accrued, including revenue taxes
|
233,333
|
|
|
199,101
|
|
||
Regulatory liabilities
|
17,977
|
|
|
3,401
|
|
||
Other
|
60,003
|
|
|
59,456
|
|
||
Total current liabilities
|
531,319
|
|
|
499,105
|
|
||
Deferred credits and other liabilities
|
|
|
|
|
|
||
Deferred income taxes
|
383,197
|
|
|
394,041
|
|
||
Regulatory liabilities
|
932,259
|
|
|
877,369
|
|
||
Unamortized tax credits
|
91,522
|
|
|
90,369
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
503,659
|
|
|
472,948
|
|
||
Other
|
114,811
|
|
|
98,689
|
|
||
Total deferred credits and other liabilities
|
2,025,448
|
|
|
1,933,416
|
|
||
Total capitalization and liabilities
|
$
|
5,967,503
|
|
|
$
|
5,630,613
|
|
Consolidated Statements of Capitalization
|
December 31
|
2018
|
|
|
2017
|
|
||||
(dollars in thousands, except par value)
|
|
|
|
|
|
|
|
||
Common stock equity
|
|
|
|
|
|
|
|
||
Common stock of $6 2/3 par value
|
|
|
|
|
|
|
|
||
Authorized: 50,000,000 shares. Outstanding: 16,751,488 shares and
|
|
|
|
|
|
|
|
||
16,142,216 shares at December 31, 2018 and 2017, respectively
|
|
$
|
111,696
|
|
|
|
$
|
107,634
|
|
Premium on capital stock
|
|
681,305
|
|
|
|
614,675
|
|
||
Retained earnings
|
|
1,164,541
|
|
|
|
1,124,193
|
|
||
Accumulated other comprehensive income (loss), net of taxes-retirement benefit plans
|
|
99
|
|
|
|
(1,219
|
)
|
||
Common stock equity
|
|
1,957,641
|
|
|
|
1,845,283
|
|
||
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, 2018 and 2017
|
|
2018
|
|
|
2017
|
|
|||||
(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
|
2018
|
|
|
2017
|
|
||
(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
|
|
|
$
|
125,000
|
|
4.00%, Refunding series 2017B, due 2037
|
140,000
|
|
|
140,000
|
|
||
3.25%, Refunding series 2015, due 2025
|
47,000
|
|
|
47,000
|
|
||
6.50%, Series 2009, due 2039
|
150,000
|
|
|
150,000
|
|
||
Total obligations to the State of Hawaii
|
$
|
462,000
|
|
|
$
|
462,000
|
|
Other long-term debt – unsecured:
|
|
|
|
|
|
||
Taxable senior notes:
|
|
|
|
||||
4.38%, Series 2018A, due 2028
|
$
|
67,500
|
|
|
$
|
—
|
|
4.53%, Series 2018B, due 2033
|
17,500
|
|
|
—
|
|
||
4.72%, Series 2018C, due 2048
|
15,000
|
|
|
—
|
|
||
4.31%, Series 2017A, due 2047
|
50,000
|
|
|
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, paid in 2018
|
—
|
|
|
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
|
913,000
|
|
|
863,000
|
|
||
6.50 %, series 2004, Junior subordinated deferrable interest debentures, due 2034
|
51,546
|
|
|
51,546
|
|
||
Total other long-term debt – unsecured
|
964,546
|
|
|
914,546
|
|
||
Total long-term debt
|
1,426,546
|
|
|
1,376,546
|
|
||
Less unamortized debt issuance costs
|
7,744
|
|
|
8,067
|
|
||
Less current portion long-term debt, net of unamortized debt issuance costs
|
—
|
|
|
49,963
|
|
||
Long-term debt, net
|
1,418,802
|
|
|
1,318,516
|
|
||
Total capitalization
|
$
|
3,410,736
|
|
|
$
|
3,198,092
|
|
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, 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
|
|
|||||
Net income for common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
143,653
|
|
|
—
|
|
|
143,653
|
|
|||||
Other comprehensive income, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,318
|
|
|
1,318
|
|
|||||
Issuance of common stock, net of expenses
|
609
|
|
|
4,062
|
|
|
66,630
|
|
|
—
|
|
|
—
|
|
|
70,692
|
|
|||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(103,305
|
)
|
|
—
|
|
|
(103,305
|
)
|
|||||
Balance, December 31, 2018
|
16,751
|
|
|
$
|
111,696
|
|
|
$
|
681,305
|
|
|
$
|
1,164,541
|
|
|
$
|
99
|
|
|
$
|
1,957,641
|
|
Consolidated Statements of Cash Flows
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
145,648
|
|
|
$
|
121,946
|
|
|
$
|
144,312
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|||
Depreciation of property, plant and equipment
|
203,626
|
|
|
192,784
|
|
|
187,061
|
|
|||
Other amortization
|
26,602
|
|
|
8,498
|
|
|
6,935
|
|
|||
Deferred income taxes
|
(7,982
|
)
|
|
38,037
|
|
|
74,386
|
|
|||
Allowance for equity funds used during construction
|
(10,877
|
)
|
|
(12,483
|
)
|
|
(8,325
|
)
|
|||
Other
|
(1,570
|
)
|
|
(1,066
|
)
|
|
(3,700
|
)
|
|||
Changes in assets and liabilities
|
|
|
|
|
|
|
|
|
|||
Decrease (increase) in accounts receivable
|
(50,917
|
)
|
|
2,914
|
|
|
8,551
|
|
|||
Increase in accrued unbilled revenues
|
(14,684
|
)
|
|
(15,361
|
)
|
|
(7,184
|
)
|
|||
Decrease (increase) in fuel oil stock
|
6,938
|
|
|
(20,443
|
)
|
|
4,786
|
|
|||
Decrease (increase) in materials and supplies
|
(807
|
)
|
|
(718
|
)
|
|
750
|
|
|||
Decrease (increase) in regulatory assets
|
9,252
|
|
|
(17,256
|
)
|
|
(18,273
|
)
|
|||
Increase (decrease) in accounts payable
|
24,358
|
|
|
25,734
|
|
|
(10,614
|
)
|
|||
Change in prepaid and accrued income taxes, tax credits and revenue taxes
|
25,036
|
|
|
29,862
|
|
|
2,123
|
|
|||
Increase in defined benefit pension and other postretirement
benefit plans liability |
18,746
|
|
|
604
|
|
|
484
|
|
|||
Change in other assets and liabilities
|
20,244
|
|
|
(17,866
|
)
|
|
(11,375
|
)
|
|||
Net cash provided by operating activities
|
393,613
|
|
|
335,186
|
|
|
369,917
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
(445,863
|
)
|
|
(441,598
|
)
|
|
(320,437
|
)
|
|||
Contributions in aid of construction
|
30,599
|
|
|
64,733
|
|
|
30,100
|
|
|||
Other
|
10,082
|
|
|
4,578
|
|
|
2,138
|
|
|||
Net cash used in investing activities
|
(405,182
|
)
|
|
(372,287
|
)
|
|
(288,199
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Common stock dividends
|
(103,305
|
)
|
|
(87,767
|
)
|
|
(93,599
|
)
|
|||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
(1,995
|
)
|
|
(1,995
|
)
|
|
(1,995
|
)
|
|||
Proceeds from issuance of common stock
|
70,700
|
|
|
14,000
|
|
|
24,000
|
|
|||
Proceeds from issuance of long-term debt
|
100,000
|
|
|
315,000
|
|
|
40,000
|
|
|||
Repayment of long-term debt and funds transferred for redemption of special purpose revenue bonds
|
(50,000
|
)
|
|
(265,000
|
)
|
|
—
|
|
|||
Net increase (decrease) in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
(4,999
|
)
|
|
4,999
|
|
|
—
|
|
|||
Proceeds from other borrowings
|
25,000
|
|
|
—
|
|
|
—
|
|
|||
Other
|
(472
|
)
|
|
(3,905
|
)
|
|
(287
|
)
|
|||
Net cash provided by (used in) financing activities
|
34,929
|
|
|
(24,668
|
)
|
|
(31,881
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
23,360
|
|
|
(61,769
|
)
|
|
49,837
|
|
|||
Cash and cash equivalents, January 1
|
12,517
|
|
|
74,286
|
|
|
24,449
|
|
|||
Cash and cash equivalents, December 31
|
$
|
35,877
|
|
|
$
|
12,517
|
|
|
$
|
74,286
|
|
Note 1
·
Summary of significant accounting policies
|
General
|
(in millions)
|
HEI
|
|
Hawaiian Electric
|
||||
2019
|
$
|
11
|
|
|
$
|
6
|
|
2020
|
9
|
|
|
6
|
|
||
2021
|
8
|
|
|
5
|
|
||
2022
|
5
|
|
|
2
|
|
||
2023
|
4
|
|
|
2
|
|
||
Thereafter
|
12
|
|
|
3
|
|
||
|
$
|
49
|
|
|
$
|
24
|
|
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.
|
|
2017
|
|
2016
|
||||||||||||||||
(in thousands)
|
As previously filed
|
Adjustment from adoption of ASU No. 2017-07
|
As currently reported
|
|
As previously filed
|
Adjustment from adoption of ASU No. 2017-07
|
As currently reported
|
||||||||||||
HEI Consolidated Statements of Income
|
|
|
|
|
|
||||||||||||||
Expenses
|
|
|
|
|
|
|
|
||||||||||||
Electric utility
|
$
|
2,000,045
|
|
$
|
(6,003
|
)
|
$
|
1,994,042
|
|
|
$
|
1,809,900
|
|
$
|
(5,602
|
)
|
$
|
1,804,298
|
|
Bank
|
198,924
|
|
(820
|
)
|
198,104
|
|
|
198,572
|
|
(875
|
)
|
197,697
|
|
||||||
Other
|
18,365
|
|
(1,119
|
)
|
17,246
|
|
|
24,007
|
|
(1,186
|
)
|
22,821
|
|
||||||
Total expenses
|
$
|
2,217,334
|
|
$
|
(7,942
|
)
|
$
|
2,209,392
|
|
|
$
|
2,032,479
|
|
$
|
(7,663
|
)
|
$
|
2,024,816
|
|
Operating income
|
|
|
|
|
|
|
|
||||||||||||
Electric utility
|
$
|
257,521
|
|
$
|
6,003
|
|
$
|
263,524
|
|
|
$
|
284,468
|
|
$
|
5,602
|
|
$
|
290,070
|
|
Bank
|
98,716
|
|
820
|
|
99,536
|
|
|
87,352
|
|
875
|
|
88,227
|
|
||||||
Other
|
(17,946
|
)
|
1,119
|
|
(16,827
|
)
|
|
(23,645
|
)
|
1,186
|
|
(22,459
|
)
|
||||||
Total operating income
|
$
|
338,291
|
|
$
|
7,942
|
|
$
|
346,233
|
|
|
$
|
348,175
|
|
$
|
7,663
|
|
$
|
355,838
|
|
Retirement defined benefits expense--other than service costs
|
$
|
—
|
|
$
|
(7,942
|
)
|
$
|
(7,942
|
)
|
|
$
|
—
|
|
$
|
(7,663
|
)
|
$
|
(7,663
|
)
|
Hawaiian Electric Consolidated Statements of Income
|
|
|
|
|
|||||||||||||||
Other operation and maintenance
|
$
|
417,910
|
|
$
|
(6,003
|
)
|
$
|
411,907
|
|
|
$
|
405,533
|
|
$
|
(5,602
|
)
|
$
|
399,931
|
|
Total expense
|
2,000,045
|
|
(6,003
|
)
|
1,994,042
|
|
|
1,809,900
|
|
(5,602
|
)
|
1,804,298
|
|
||||||
Operating income
|
257,521
|
|
6,003
|
|
263,524
|
|
|
284,468
|
|
5,602
|
|
290,070
|
|
||||||
Retirement defined benefits expense--other than service costs
|
—
|
|
(6,003
|
)
|
(6,003
|
)
|
|
—
|
|
(5,602
|
)
|
(5,602
|
)
|
||||||
Hawaiian Electric Consolidating Statements of Income (in Note 3)
|
|
|
|
|
|||||||||||||||
Hawaiian Electric (parent only)
|
|
|
|
|
|
|
|
||||||||||||
Other operation and maintenance
|
279,440
|
|
(5,049
|
)
|
274,391
|
|
|
273,176
|
|
(5,058
|
)
|
268,118
|
|
||||||
Total expense
|
1,425,655
|
|
(5,049
|
)
|
1,420,606
|
|
|
1,277,245
|
|
(5,058
|
)
|
1,272,187
|
|
||||||
Operating income
|
172,849
|
|
5,049
|
|
177,898
|
|
|
197,139
|
|
5,058
|
|
202,197
|
|
||||||
Retirement defined benefits expense--other than service costs
|
—
|
|
(5,049
|
)
|
(5,049
|
)
|
|
—
|
|
(5,058
|
)
|
(5,058
|
)
|
|
2017
|
|
2016
|
||||||||||||||||
(in thousands)
|
As previously filed
|
Adjustment from adoption of ASU No. 2017-07
|
As currently reported
|
|
As previously filed
|
Adjustment from adoption of ASU No. 2017-07
|
As currently reported
|
||||||||||||
Hawaiian Electric Consolidating Statements of Income (in Note 3)
|
|
|
|
|
|||||||||||||||
Hawaii Electric Light
|
|
|
|
|
|
|
|
||||||||||||
Other operation and maintenance
|
$
|
66,277
|
|
$
|
(93
|
)
|
$
|
66,184
|
|
|
$
|
63,897
|
|
$
|
319
|
|
$
|
64,216
|
|
Total expense
|
287,868
|
|
(93
|
)
|
287,775
|
|
|
266,823
|
|
319
|
|
267,142
|
|
||||||
Operating income
|
45,599
|
|
93
|
|
45,692
|
|
|
44,562
|
|
(319
|
)
|
44,243
|
|
||||||
Retirement defined benefits expense--other than service costs
|
—
|
|
(93
|
)
|
(93
|
)
|
|
—
|
|
319
|
|
319
|
|
||||||
Maui Electric
|
|
|
|
|
|
|
|
||||||||||||
Other operation and maintenance
|
72,193
|
|
(861
|
)
|
71,332
|
|
|
68,460
|
|
(863
|
)
|
67,597
|
|
||||||
Total expense
|
286,522
|
|
(861
|
)
|
285,661
|
|
|
265,832
|
|
(863
|
)
|
264,969
|
|
||||||
Operating income
|
39,156
|
|
861
|
|
40,017
|
|
|
42,873
|
|
863
|
|
43,736
|
|
||||||
Retirement defined benefits expense--other than service costs
|
—
|
|
(861
|
)
|
(861
|
)
|
|
—
|
|
(863
|
)
|
(863
|
)
|
||||||
ASB Statements of Income Data (in Note 4)
|
|
|
|
|
|
|
|||||||||||||
Compensation and employee benefits
|
95,751
|
|
(820
|
)
|
94,931
|
|
|
90,117
|
|
(875
|
)
|
89,242
|
|
||||||
Other expense
|
19,324
|
|
820
|
|
20,144
|
|
|
18,487
|
|
875
|
|
19,362
|
|
Electric utility
|
Bank (HEI only)
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in millions)
|
|
|
|
|
|
|
|
|
|||
Amounts in income taxes related to low-income housing tax credit investments
|
|
|
|
|
|
|
|
|
|||
Amortization recognized in the provision for income taxes
|
$
|
(7.7
|
)
|
|
$
|
(7.4
|
)
|
|
$
|
(5.8
|
)
|
Tax credits and other tax benefits recognized in the provision for income taxes
|
10.9
|
|
|
10.7
|
|
|
8.4
|
|
|||
Net benefit to income tax expense
|
$
|
3.2
|
|
|
$
|
3.3
|
|
|
$
|
2.6
|
|
Note 2
·
Segment financial information
|
Electric utility
|
Bank
|
Other
|
(in thousands)
|
Electric utility
|
|
|
Bank
|
|
|
Other
|
|
|
Total
|
|
||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues from external customers
|
$
|
2,546,472
|
|
|
$
|
314,275
|
|
|
$
|
102
|
|
|
$
|
2,860,849
|
|
Intersegment revenues (eliminations)
|
53
|
|
|
—
|
|
|
(53
|
)
|
|
—
|
|
||||
Revenues
|
2,546,525
|
|
|
314,275
|
|
|
49
|
|
|
2,860,849
|
|
||||
Depreciation and amortization
|
230,228
|
|
|
21,443
|
|
|
3,958
|
|
|
255,629
|
|
||||
Interest expense, net
|
73,348
|
|
|
15,539
|
|
|
15,329
|
|
|
104,216
|
|
||||
Income (loss) before income taxes
|
180,426
|
|
|
106,578
|
|
|
(32,543
|
)
|
|
254,461
|
|
||||
Income taxes (benefit)
|
34,778
|
|
|
24,069
|
|
|
(8,050
|
)
|
|
50,797
|
|
||||
Net income (loss)
|
145,648
|
|
|
82,509
|
|
|
(24,493
|
)
|
|
203,664
|
|
||||
Preferred stock dividends of subsidiaries
|
1,995
|
|
|
—
|
|
|
(105
|
)
|
|
1,890
|
|
||||
Net income (loss) for common stock
|
143,653
|
|
|
82,509
|
|
|
(24,388
|
)
|
|
201,774
|
|
||||
Capital expenditures
|
445,863
|
|
|
72,666
|
|
|
18,840
|
|
|
537,369
|
|
||||
Assets (at December 31, 2018)
|
5,967,503
|
|
|
7,027,894
|
|
|
108,654
|
|
|
13,104,051
|
|
||||
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)
1
|
5,630,613
|
|
|
6,798,659
|
|
|
104,888
|
|
|
12,534,160
|
|
||||
|
|
|
|
|
|
|
|
(in thousands)
|
Electric utility
|
|
|
Bank
|
|
|
Other
|
|
|
Total
|
|
||||
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)
1
|
5,431,903
|
|
|
6,421,357
|
|
|
28,721
|
|
|
11,881,981
|
|
1
|
Contributions in aid of construction balances were reclassified from liabilities to “Property, plant and equipment, net” and “Total property, plant and equipment, net” for the Company and Hawaiian Electric, respectively, which reduced the amounts of the respective balances.
|
Note 3
·
Electric utility segment
|
December 31
|
2018
|
|
|
2017
|
|
||
(in thousands)
|
|
|
|
|
|
||
Retirement benefit plans (balance primarily varies with plans’ funded statuses)
|
$
|
624,126
|
|
|
$
|
637,204
|
|
Income taxes (1-55 years)
|
114,076
|
|
|
118,201
|
|
||
Decoupling revenue balancing account and RAM regulatory asset (1-2 years)
|
49,560
|
|
|
64,087
|
|
||
Unamortized expense and premiums on retired debt and equity issuances (19-30 years; 6-18 years remaining)
|
10,065
|
|
|
11,993
|
|
||
Vacation earned, but not yet taken (1 year)
|
10,820
|
|
|
11,224
|
|
||
Other (1-50 years; 1-46 years remaining)
|
24,779
|
|
|
26,588
|
|
||
|
$
|
833,426
|
|
|
$
|
869,297
|
|
Included in:
|
|
|
|
|
|
||
Current assets
|
$
|
71,016
|
|
|
$
|
88,390
|
|
Long-term assets
|
762,410
|
|
|
780,907
|
|
||
|
$
|
833,426
|
|
|
$
|
869,297
|
|
December 31
|
2018
|
|
|
2017
|
|
||
(in thousands)
|
|
|
|
|
|
||
Cost of removal in excess of salvage value (1-60 years)
|
$
|
491,006
|
|
|
$
|
453,986
|
|
Income taxes (1-55 years)
|
413,339
|
|
|
406,324
|
|
||
Retirement benefit plans (5 years beginning with respective utility’s next rate case)
|
9,546
|
|
|
9,961
|
|
||
Other (5 years; 1-2 years remaining)
|
36,345
|
|
|
10,499
|
|
||
|
$
|
950,236
|
|
|
$
|
880,770
|
|
Included in:
|
|
|
|
||||
Current liabilities
|
$
|
17,977
|
|
|
$
|
3,401
|
|
Long-term liabilities
|
932,259
|
|
|
877,369
|
|
||
|
$
|
950,236
|
|
|
$
|
880,770
|
|
December 31, 2018
|
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
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in millions)
|
|
|
|
|
|
|
||||||
Kalaeloa
|
|
$
|
216
|
|
|
$
|
180
|
|
|
$
|
152
|
|
AES Hawaii
|
|
140
|
|
|
140
|
|
|
149
|
|
|||
HPOWER
|
|
69
|
|
|
67
|
|
|
71
|
|
|||
Puna Geothermal Venture
|
|
15
|
|
|
38
|
|
|
28
|
|
|||
Hamakua Energy
|
|
56
|
|
|
35
|
|
|
29
|
|
|||
Hawaiian Commercial & Sugar
|
|
—
|
|
|
—
|
|
|
1
|
|
|||
Wind IPPs
|
|
107
|
|
|
97
|
|
|
113
|
|
|||
Solar IPPs
|
|
29
|
|
|
27
|
|
|
15
|
|
|||
Other IPPs
1
|
|
7
|
|
|
3
|
|
|
5
|
|
|||
Total IPPs
|
|
$
|
639
|
|
|
$
|
587
|
|
|
$
|
563
|
|
(in thousands)
|
2018
|
|
|
2017
|
|
||
Balance, January 1
|
$
|
6,035
|
|
|
$
|
25,589
|
|
Accretion expense
|
282
|
|
|
10
|
|
||
Liabilities incurred
|
1,058
|
|
|
5,370
|
|
||
Liabilities settled
|
(74
|
)
|
|
(527
|
)
|
||
Revisions in estimated cash flows
|
1,125
|
|
|
(24,407
|
)
|
||
Balance, December 31
|
$
|
8,426
|
|
|
$
|
6,035
|
|
•
|
Hawaiian Electric’s RAM revenues were limited to the RAM Cap in 2017 and 2018.
|
•
|
Maui Electric’s RAM revenues in 2017 and 2018 were below the RAM Cap.
|
•
|
Hawaii Electric Light’s RAM revenues in 2017 and 2018 were below the RAM Cap.
|
•
|
Service Quality performance incentives are measured on a calendar-year basis beginning in 2018. The PIM tariff requires the performance targets, deadbands and the amount of maximum financial incentives used to determine the PIM financial incentive levels for each of the PIMs to be re-determined upon issuance of an interim or final order in a general rate case for each utility.
|
•
|
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 approved rate base (or maximum penalties of approximately
$6.7 million
- for both indices 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 approved rate base (or maximum penalties or incentives of approximately
$1.3 million
- in total for the three utilities).
|
•
|
The Utilities accrued
$2.1 million
in estimated net service quality penalties for 2018, which will be reflected in the 2019 annual decoupling filing and will reduce customer rates in the period June 1, 2019 through May 31, 2020.
|
•
|
Demand Response measured by the demand response resources acquired in 2018. The award is up to
5%
of the aggregate annual contract value for cost-effective demand response capability contracted with aggregators by December 31, 2018. The maximum award is
$0.5 million
for the three utilities in total and there are
no
penalties. This incentive applied to one-time performance in 2018 only. No reward is expected for 2018 performance.
|
•
|
Procurement of low-cost variable renewable resources through the request for proposal process in 2018 measured by comparison of the procurement price to target prices. The incentive is a percentage of the savings determined by
|
(in millions)
|
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
||||||
2018 Annual incremental RAM adjusted revenues*
|
|
$
|
13.8
|
|
|
$
|
3.4
|
|
|
$
|
2.0
|
|
Annual change in accrued RBA balance as of December 31, 2017 (and associated revenue taxes)
|
|
$
|
6.6
|
|
|
$
|
0.7
|
|
|
$
|
3.2
|
|
2017 Tax Act Adjustment
**
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2.8
|
)
|
Net annual incremental amount to be collected under the tariffs
|
|
$
|
20.4
|
|
|
$
|
4.1
|
|
|
$
|
2.4
|
|
*
|
The 2018 annual RAM adjusted revenues for Maui Electric terminated on August 23, 2018, the effective date of interim increase tariff rates that were implemented pursuant to the Interim D&O issued in the Maui Electric consolidated 2015 and 2018 rate case.
|
**
|
Maui Electric incorporated a
$2.8 million
adjustment into its 2018 annual decoupling filing to incorporate the impact of the lower corporate income tax rate and the exclusion of the domestic production activities deduction, as a result of the 2017 Tax Cuts and Jobs Act (the Tax Act). Tax adjustments for Hawaiian Electric and Hawaii Electric Light are described in the discussion below of their respective on-going rate cases.
|
•
|
Greater cost control and reduced rate volatility;
|
•
|
Efficient investment and allocation of resources regardless of classification as capital or operating expense;
|
•
|
Fair distribution of risks between utilities and customers; and
|
•
|
Fulfillment of State policy goals.
|
•
|
Hawaiian Electric (based on the 2017 test year rate case) - effective April 13, 2018.
|
•
|
Hawaii Electric Light (based on the 2016 test year rate case) - effective May 1, 2018.
|
•
|
Maui Electric’s rates were adjusted for the Tax Act as follows:
|
•
|
adjustments for the period January 1, 2018 through May 31, 2018 are in the annual Revenue Balancing Account adjustment, which became effective on June 1, 2018,
|
•
|
adjustments for the period June 1, 2018 through August 22, 2018 are embedded in the Revenue Balancing Account, which will be incorporated in rates on June 1, 2019, and
|
•
|
adjustments from August 23, 2018 and thereafter are incorporated in interim rates as a result of the 2018 test year rate case.
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Revenues
|
$
|
1,802,550
|
|
|
375,493
|
|
|
368,700
|
|
|
—
|
|
|
(218
|
)
|
[1]
|
|
$
|
2,546,525
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel oil
|
523,706
|
|
|
90,792
|
|
|
146,030
|
|
|
—
|
|
|
—
|
|
|
|
760,528
|
|
||
Purchased power
|
494,450
|
|
|
95,838
|
|
|
49,019
|
|
|
—
|
|
|
—
|
|
|
|
639,307
|
|
||
Other operation and maintenance
|
313,346
|
|
|
70,396
|
|
|
77,749
|
|
|
—
|
|
|
—
|
|
|
|
461,491
|
|
||
Depreciation
|
137,410
|
|
|
40,235
|
|
|
25,981
|
|
|
—
|
|
|
—
|
|
|
|
203,626
|
|
||
Taxes, other than income taxes
|
170,363
|
|
|
34,850
|
|
|
34,699
|
|
|
—
|
|
|
—
|
|
|
|
239,912
|
|
||
Total expenses
|
1,639,275
|
|
|
332,111
|
|
|
333,478
|
|
|
—
|
|
|
—
|
|
|
|
2,304,864
|
|
||
Operating income
|
163,275
|
|
|
43,382
|
|
|
35,222
|
|
|
—
|
|
|
(218
|
)
|
|
|
241,661
|
|
||
Allowance for equity funds used during construction
|
9,208
|
|
|
478
|
|
|
1,191
|
|
|
—
|
|
|
—
|
|
|
|
10,877
|
|
||
Equity in earnings of subsidiaries
|
45,393
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45,393
|
)
|
[2]
|
|
—
|
|
||
Retirement defined benefits expense—other than service costs
|
(2,649
|
)
|
|
(417
|
)
|
|
(565
|
)
|
|
—
|
|
|
—
|
|
|
|
(3,631
|
)
|
||
Interest expense and other charges, net
|
(52,180
|
)
|
|
(11,836
|
)
|
|
(9,550
|
)
|
|
—
|
|
|
218
|
|
[1]
|
|
(73,348
|
)
|
||
Allowance for borrowed funds used during construction
|
4,019
|
|
|
276
|
|
|
572
|
|
|
—
|
|
|
—
|
|
|
|
4,867
|
|
||
Income before income taxes
|
167,066
|
|
|
31,883
|
|
|
26,870
|
|
|
—
|
|
|
(45,393
|
)
|
|
|
180,426
|
|
||
Income taxes
|
22,333
|
|
|
6,868
|
|
|
5,577
|
|
|
—
|
|
|
—
|
|
|
|
34,778
|
|
||
Net income
|
144,733
|
|
|
25,015
|
|
|
21,293
|
|
|
—
|
|
|
(45,393
|
)
|
|
|
145,648
|
|
||
Preferred stock dividends of subsidiaries
|
—
|
|
|
534
|
|
|
381
|
|
|
—
|
|
|
—
|
|
|
|
915
|
|
||
Net income attributable to Hawaiian Electric
|
144,733
|
|
|
24,481
|
|
|
20,912
|
|
|
—
|
|
|
(45,393
|
)
|
|
|
144,733
|
|
||
Preferred stock dividends of Hawaiian Electric
|
1,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,080
|
|
||
Net income for common stock
|
$
|
143,653
|
|
|
24,481
|
|
|
20,912
|
|
|
—
|
|
|
(45,393
|
)
|
|
|
$
|
143,653
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Net income for common stock
|
$
|
143,653
|
|
|
24,481
|
|
|
20,912
|
|
|
—
|
|
|
(45,393
|
)
|
|
|
$
|
143,653
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net losses arising during the period, net of tax benefits
|
(26,019
|
)
|
|
(6,090
|
)
|
|
(5,004
|
)
|
|
—
|
|
|
11,094
|
|
[1]
|
|
(26,019
|
)
|
||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits
|
19,012
|
|
|
2,819
|
|
|
2,423
|
|
|
—
|
|
|
(5,242
|
)
|
[1]
|
|
19,012
|
|
||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes
|
8,325
|
|
|
3,305
|
|
|
2,788
|
|
|
—
|
|
|
(6,093
|
)
|
[1]
|
|
8,325
|
|
||
Other comprehensive income, net of taxes
|
1,318
|
|
|
34
|
|
|
207
|
|
|
—
|
|
|
(241
|
)
|
|
|
1,318
|
|
||
Comprehensive income attributable to common shareholder
|
$
|
144,971
|
|
|
24,515
|
|
|
21,119
|
|
|
—
|
|
|
(45,634
|
)
|
|
|
$
|
144,971
|
|
(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
|
274,391
|
|
|
66,184
|
|
|
71,332
|
|
|
—
|
|
|
—
|
|
|
|
411,907
|
|
||
Depreciation
|
130,889
|
|
|
38,741
|
|
|
23,154
|
|
|
—
|
|
|
—
|
|
|
|
192,784
|
|
||
Taxes, other than income taxes
|
152,933
|
|
|
31,184
|
|
|
30,832
|
|
|
—
|
|
|
—
|
|
|
|
214,949
|
|
||
Total expenses
|
1,420,606
|
|
|
287,775
|
|
|
285,661
|
|
|
—
|
|
|
—
|
|
|
|
1,994,042
|
|
||
Operating income
|
177,898
|
|
|
45,692
|
|
|
40,017
|
|
|
—
|
|
|
(83
|
)
|
|
|
263,524
|
|
||
Allowance for equity funds used
during construction
|
10,896
|
|
|
554
|
|
|
1,033
|
|
|
—
|
|
|
—
|
|
|
|
12,483
|
|
||
Equity in earnings of subsidiaries
|
38,057
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,057
|
)
|
[2]
|
|
—
|
|
||
Retirement defined benefits expense—other than service costs
|
(5,049
|
)
|
|
(93
|
)
|
|
(861
|
)
|
|
—
|
|
|
—
|
|
|
|
(6,003
|
)
|
||
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 tax benefits
|
454
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
454
|
|
||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net losses arising during the period, net of tax benefits
|
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
|
268,118
|
|
|
64,216
|
|
|
67,597
|
|
|
—
|
|
|
—
|
|
|
|
399,931
|
|
||
Depreciation
|
126,086
|
|
|
37,797
|
|
|
23,178
|
|
|
—
|
|
|
—
|
|
|
|
187,061
|
|
||
Taxes, other than income taxes
|
141,615
|
|
|
29,017
|
|
|
29,230
|
|
|
—
|
|
|
—
|
|
|
|
199,862
|
|
||
Total expenses
|
1,272,187
|
|
|
267,142
|
|
|
264,969
|
|
|
—
|
|
|
—
|
|
|
|
1,804,298
|
|
||
Operating income
|
202,197
|
|
|
44,243
|
|
|
43,736
|
|
|
—
|
|
|
(106
|
)
|
|
|
290,070
|
|
||
Allowance for equity funds used
during construction
|
6,659
|
|
|
765
|
|
|
901
|
|
|
—
|
|
|
—
|
|
|
|
8,325
|
|
||
Equity in earnings of subsidiaries
|
42,391
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,391
|
)
|
[2]
|
|
—
|
|
||
Retirement defined benefits expense—other than service costs
|
(5,058
|
)
|
|
319
|
|
|
(863
|
)
|
|
—
|
|
|
—
|
|
|
|
(5,602
|
)
|
||
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
|
)
|
||
Less: 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 tax benefits
|
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 |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Utility property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Land
|
$
|
40,449
|
|
|
5,606
|
|
|
3,612
|
|
|
—
|
|
|
—
|
|
|
|
$
|
49,667
|
|
Plant and equipment
|
4,456,090
|
|
|
1,259,553
|
|
|
1,094,028
|
|
|
—
|
|
|
—
|
|
|
|
6,809,671
|
|
||
Less accumulated depreciation
|
(1,523,861
|
)
|
|
(547,848
|
)
|
|
(505,633
|
)
|
|
—
|
|
|
—
|
|
|
|
(2,577,342
|
)
|
||
Construction in progress
|
193,677
|
|
|
8,781
|
|
|
30,687
|
|
|
—
|
|
|
—
|
|
|
|
233,145
|
|
||
Utility property, plant and equipment, net
|
3,166,355
|
|
|
726,092
|
|
|
622,694
|
|
|
—
|
|
|
—
|
|
|
|
4,515,141
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation
|
5,314
|
|
|
115
|
|
|
1,532
|
|
|
—
|
|
|
—
|
|
|
|
6,961
|
|
||
Total property, plant and equipment, net
|
3,171,669
|
|
|
726,207
|
|
|
624,226
|
|
|
—
|
|
|
—
|
|
|
|
4,522,102
|
|
||
Investment in wholly-owned subsidiaries, at equity
|
576,838
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(576,838
|
)
|
[2]
|
|
—
|
|
||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
16,732
|
|
|
15,623
|
|
|
3,421
|
|
|
101
|
|
|
—
|
|
|
|
35,877
|
|
||
Customer accounts receivable, net
|
125,960
|
|
|
26,483
|
|
|
25,453
|
|
|
—
|
|
|
—
|
|
|
|
177,896
|
|
||
Accrued unbilled revenues, net
|
88,060
|
|
|
17,051
|
|
|
16,627
|
|
|
—
|
|
|
—
|
|
|
|
121,738
|
|
||
Other accounts receivable, net
|
21,962
|
|
|
3,131
|
|
|
3,033
|
|
|
—
|
|
|
(21,911
|
)
|
[1]
|
|
6,215
|
|
||
Fuel oil stock, at average cost
|
54,262
|
|
|
11,027
|
|
|
14,646
|
|
|
—
|
|
|
—
|
|
|
|
79,935
|
|
||
Materials and supplies, at average cost
|
30,291
|
|
|
7,155
|
|
|
17,758
|
|
|
—
|
|
|
—
|
|
|
|
55,204
|
|
||
Prepayments and other
|
23,214
|
|
|
5,212
|
|
|
3,692
|
|
|
—
|
|
|
—
|
|
|
|
32,118
|
|
||
Regulatory assets
|
60,093
|
|
|
3,177
|
|
|
7,746
|
|
|
—
|
|
|
—
|
|
|
|
71,016
|
|
||
Total current assets
|
420,574
|
|
|
88,859
|
|
|
92,376
|
|
|
101
|
|
|
(21,911
|
)
|
|
|
579,999
|
|
||
Other long-term assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Regulatory assets
|
537,708
|
|
|
120,658
|
|
|
104,044
|
|
|
—
|
|
|
—
|
|
|
|
762,410
|
|
||
Other
|
69,749
|
|
|
15,944
|
|
|
17,299
|
|
|
—
|
|
|
—
|
|
|
|
102,992
|
|
||
Total other long-term assets
|
607,457
|
|
|
136,602
|
|
|
121,343
|
|
|
—
|
|
|
—
|
|
|
|
865,402
|
|
||
Total assets
|
$
|
4,776,538
|
|
|
951,668
|
|
|
837,945
|
|
|
101
|
|
|
(598,749
|
)
|
|
|
$
|
5,967,503
|
|
Capitalization and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capitalization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock equity
|
$
|
1,957,641
|
|
|
295,874
|
|
|
280,863
|
|
|
101
|
|
|
(576,838
|
)
|
[2]
|
|
$
|
1,957,641
|
|
Cumulative preferred stock–not subject to mandatory redemption
|
22,293
|
|
|
7,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
|
34,293
|
|
||
Long-term debt, net
|
1,000,137
|
|
|
217,749
|
|
|
200,916
|
|
|
—
|
|
|
—
|
|
|
|
1,418,802
|
|
||
Total capitalization
|
2,980,071
|
|
|
520,623
|
|
|
486,779
|
|
|
101
|
|
|
(576,838
|
)
|
|
|
3,410,736
|
|
||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Short-term borrowings-non-affiliate
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
25,000
|
|
||
Accounts payable
|
126,384
|
|
|
20,045
|
|
|
25,362
|
|
|
—
|
|
|
—
|
|
|
|
171,791
|
|
||
Interest and preferred dividends payable
|
16,203
|
|
|
4,203
|
|
|
2,841
|
|
|
—
|
|
|
(32
|
)
|
[1]
|
|
23,215
|
|
||
Taxes accrued
|
164,747
|
|
|
34,128
|
|
|
34,458
|
|
|
—
|
|
|
—
|
|
|
|
233,333
|
|
||
Regulatory liabilities
|
7,699
|
|
|
4,872
|
|
|
5,406
|
|
|
—
|
|
|
—
|
|
|
|
17,977
|
|
||
Other
|
46,391
|
|
|
15,077
|
|
|
20,414
|
|
|
—
|
|
|
(21,879
|
)
|
[1]
|
|
60,003
|
|
||
Total current liabilities
|
386,424
|
|
|
78,325
|
|
|
88,481
|
|
|
—
|
|
|
(21,911
|
)
|
|
|
531,319
|
|
||
Deferred credits and other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Deferred income taxes
|
271,438
|
|
|
54,936
|
|
|
56,823
|
|
|
—
|
|
|
—
|
|
|
|
383,197
|
|
||
Regulatory liabilities
|
657,210
|
|
|
176,101
|
|
|
98,948
|
|
|
—
|
|
|
—
|
|
|
|
932,259
|
|
||
Unamortized tax credits
|
60,271
|
|
|
16,217
|
|
|
15,034
|
|
|
—
|
|
|
—
|
|
|
|
91,522
|
|
||
Defined benefit pension and other postretirement benefit plans liability
|
359,174
|
|
|
73,147
|
|
|
71,338
|
|
|
—
|
|
|
—
|
|
|
|
503,659
|
|
||
Other
|
61,950
|
|
|
32,319
|
|
|
20,542
|
|
|
—
|
|
|
—
|
|
|
|
114,811
|
|
||
Total deferred credits and other liabilities
|
1,410,043
|
|
|
352,720
|
|
|
262,685
|
|
|
—
|
|
|
—
|
|
|
|
2,025,448
|
|
||
Total capitalization and liabilities
|
$
|
4,776,538
|
|
|
951,668
|
|
|
837,945
|
|
|
101
|
|
|
(598,749
|
)
|
|
|
$
|
5,967,503
|
|
(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
|
$
|
40,392
|
|
|
5,922
|
|
|
3,016
|
|
|
—
|
|
|
—
|
|
|
|
$
|
49,330
|
|
Plant and equipment
|
4,144,472
|
|
|
1,207,043
|
|
|
1,053,372
|
|
|
—
|
|
|
—
|
|
|
|
6,404,887
|
|
||
Less accumulated depreciation
|
(1,451,612
|
)
|
|
(528,024
|
)
|
|
(496,716
|
)
|
|
—
|
|
|
—
|
|
|
|
(2,476,352
|
)
|
||
Construction in progress
|
231,571
|
|
|
8,182
|
|
|
23,341
|
|
|
—
|
|
|
—
|
|
|
|
263,094
|
|
||
Utility property, plant and equipment, net
|
2,964,823
|
|
|
693,123
|
|
|
583,013
|
|
|
—
|
|
|
—
|
|
|
|
4,240,959
|
|
||
Nonutility property, plant and equipment, less accumulated depreciation
|
5,933
|
|
|
115
|
|
|
1,532
|
|
|
—
|
|
|
—
|
|
|
|
7,580
|
|
||
Total property, plant and equipment, net
|
2,970,756
|
|
|
693,238
|
|
|
584,545
|
|
|
—
|
|
|
—
|
|
|
|
4,248,539
|
|
||
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
|
|
||
Other
|
60,157
|
|
|
16,311
|
|
|
15,061
|
|
|
—
|
|
|
—
|
|
|
|
91,529
|
|
||
Total other long-term assets
|
617,621
|
|
|
139,094
|
|
|
115,721
|
|
|
—
|
|
|
—
|
|
|
|
872,436
|
|
||
Total assets
|
$
|
4,510,416
|
|
|
903,366
|
|
|
793,434
|
|
|
101
|
|
|
(576,704
|
)
|
|
|
$
|
5,630,613
|
|
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
|
|
||
Total capitalization and liabilities
|
$
|
4,510,416
|
|
|
903,366
|
|
|
793,434
|
|
|
101
|
|
|
(576,704
|
)
|
|
|
$
|
5,630,613
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments
|
|
Hawaiian Electric
Consolidated |
||||||||
Balance, December 31, 2015
|
$
|
1,728,325
|
|
|
292,702
|
|
|
263,725
|
|
|
101
|
|
|
(556,528
|
)
|
|
$
|
1,728,325
|
|
Net income for common stock
|
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
|
|
||
Net income for common stock
|
143,653
|
|
|
24,481
|
|
|
20,912
|
|
|
—
|
|
|
(45,393
|
)
|
|
143,653
|
|
||
Other comprehensive income, net of taxes
|
1,318
|
|
|
34
|
|
|
207
|
|
|
—
|
|
|
(241
|
)
|
|
1,318
|
|
||
Issuance of common stock, net of expenses
|
70,692
|
|
|
1
|
|
|
1,498
|
|
|
—
|
|
|
(1,499
|
)
|
|
70,692
|
|
||
Common stock dividends
|
(103,305
|
)
|
|
(15,289
|
)
|
|
(12,019
|
)
|
|
—
|
|
|
27,308
|
|
|
(103,305
|
)
|
||
Balance, December 31, 2018
|
$
|
1,957,641
|
|
|
295,874
|
|
|
280,863
|
|
|
101
|
|
|
(576,838
|
)
|
|
$
|
1,957,641
|
|
(in thousands)
|
Hawaiian Electric
|
|
Hawaii Electric Light
|
|
Maui Electric
|
|
Other subsidiaries
|
|
Consolidating
adjustments
|
|
|
Hawaiian Electric
Consolidated |
||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net income
|
$
|
144,733
|
|
|
25,015
|
|
|
21,293
|
|
|
—
|
|
|
(45,393
|
)
|
[2]
|
|
$
|
145,648
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Equity in earnings of subsidiaries
|
(45,493
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,393
|
|
[2]
|
|
(100
|
)
|
||
Common stock dividends received from subsidiaries
|
27,408
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,308
|
)
|
[2]
|
|
100
|
|
||
Depreciation of property, plant and equipment
|
137,410
|
|
|
40,235
|
|
|
25,981
|
|
|
—
|
|
|
—
|
|
|
|
203,626
|
|
||
Other amortization
|
20,956
|
|
|
5,069
|
|
|
577
|
|
|
—
|
|
|
—
|
|
|
|
26,602
|
|
||
Deferred income taxes
|
(9,806
|
)
|
|
(341
|
)
|
|
2,165
|
|
|
—
|
|
|
—
|
|
|
|
(7,982
|
)
|
||
Allowance for equity funds used during construction
|
(9,208
|
)
|
|
(478
|
)
|
|
(1,191
|
)
|
|
—
|
|
|
—
|
|
|
|
(10,877
|
)
|
||
Other
|
(1,033
|
)
|
|
(213
|
)
|
|
(324
|
)
|
|
—
|
|
|
—
|
|
|
|
(1,570
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Increase in accounts receivable
|
(51,656
|
)
|
|
(4,867
|
)
|
|
(8,614
|
)
|
|
—
|
|
|
14,220
|
|
[1]
|
|
(50,917
|
)
|
||
Increase in accrued unbilled revenues
|
(10,884
|
)
|
|
(1,111
|
)
|
|
(2,689
|
)
|
|
—
|
|
|
—
|
|
|
|
(14,684
|
)
|
||
Decrease (increase) in fuel oil stock
|
10,710
|
|
|
(2,329
|
)
|
|
(1,443
|
)
|
|
—
|
|
|
—
|
|
|
|
6,938
|
|
||
Decrease (increase) in materials and supplies
|
(1,966
|
)
|
|
886
|
|
|
273
|
|
|
—
|
|
|
—
|
|
|
|
(807
|
)
|
||
Decrease (increase) in regulatory assets
|
12,192
|
|
|
71
|
|
|
(3,011
|
)
|
|
—
|
|
|
—
|
|
|
|
9,252
|
|
||
Increase in accounts payable
|
14,748
|
|
|
6,104
|
|
|
3,506
|
|
|
—
|
|
|
—
|
|
|
|
24,358
|
|
||
Change in prepaid and accrued income taxes, tax credits and revenue taxes
|
24,438
|
|
|
(2,118
|
)
|
|
3,047
|
|
|
—
|
|
|
(331
|
)
|
[1]
|
|
25,036
|
|
||
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability
|
17,178
|
|
|
(760
|
)
|
|
2,328
|
|
|
—
|
|
|
—
|
|
|
|
18,746
|
|
||
Change in other assets and liabilities
|
18,484
|
|
|
8,186
|
|
|
7,794
|
|
|
—
|
|
|
(14,220
|
)
|
[1]
|
|
20,244
|
|
||
Net cash provided by operating activities
|
298,211
|
|
|
73,349
|
|
|
49,692
|
|
|
—
|
|
|
(27,639
|
)
|
|
|
393,613
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capital expenditures
|
(330,531
|
)
|
|
(54,553
|
)
|
|
(60,779
|
)
|
|
—
|
|
|
—
|
|
|
|
(445,863
|
)
|
||
Contributions in aid of construction
|
24,828
|
|
|
3,499
|
|
|
2,272
|
|
|
—
|
|
|
—
|
|
|
|
30,599
|
|
||
Advances from (to) affiliates
|
—
|
|
|
—
|
|
|
12,000
|
|
|
—
|
|
|
(12,000
|
)
|
[1]
|
|
—
|
|
||
Other
|
3,226
|
|
|
1,182
|
|
|
3,843
|
|
|
—
|
|
|
1,831
|
|
[1], [2]
|
|
10,082
|
|
||
Net cash used in investing activities
|
(302,477
|
)
|
|
(49,872
|
)
|
|
(42,664
|
)
|
|
—
|
|
|
(10,169
|
)
|
|
|
(405,182
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Common stock dividends
|
(103,305
|
)
|
|
(15,289
|
)
|
|
(12,019
|
)
|
|
—
|
|
|
27,308
|
|
[2]
|
|
(103,305
|
)
|
||
Preferred stock dividends of Hawaiian Electric and subsidiaries
|
(1,080
|
)
|
|
(534
|
)
|
|
(381
|
)
|
|
—
|
|
|
—
|
|
|
|
(1,995
|
)
|
||
Proceeds from issuance of common stock
|
70,700
|
|
|
—
|
|
|
1,500
|
|
|
—
|
|
|
(1,500
|
)
|
[2]
|
|
70,700
|
|
||
Proceeds from issuance of long-term debt
|
75,000
|
|
|
15,000
|
|
|
10,000
|
|
|
—
|
|
|
—
|
|
|
|
100,000
|
|
||
Repayment of long-term debt
|
(30,000
|
)
|
|
(11,000
|
)
|
|
(9,000
|
)
|
|
—
|
|
|
—
|
|
|
|
(50,000
|
)
|
||
Net decrease in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less
|
(16,999
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,000
|
|
[1]
|
|
(4,999
|
)
|
||
Proceeds from other bank borrowings
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
25,000
|
|
||
Other
|
(377
|
)
|
|
(56
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
|
(472
|
)
|
||
Net cash provided by (used in) financing activities
|
18,939
|
|
|
(11,879
|
)
|
|
(9,939
|
)
|
|
—
|
|
|
37,808
|
|
|
|
34,929
|
|
||
Net increase (decrease) in cash and cash equivalents
|
14,673
|
|
|
11,598
|
|
|
(2,911
|
)
|
|
—
|
|
|
—
|
|
|
|
23,360
|
|
||
Cash and cash equivalents, January 1
|
2,059
|
|
|
4,025
|
|
|
6,332
|
|
|
101
|
|
|
—
|
|
|
|
12,517
|
|
||
Cash and cash equivalents, December 31
|
$
|
16,732
|
|
|
15,623
|
|
|
3,421
|
|
|
101
|
|
|
—
|
|
|
|
$
|
35,877
|
|
(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 the issuance of common stock
|
14,000
|
|
|
—
|
|
|
4,800
|
|
|
—
|
|
|
(4,800
|
)
|
[2]
|
|
14,000
|
|
||
Proceeds from the 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 provided by (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
|
|
[1]
|
Eliminations of intercompany receivables and payables and other intercompany transactions.
|
[2]
|
Elimination of investment in subsidiaries, carried at equity.
|
Note 4
·
Bank segment (HEI only)
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Interest and dividend income
|
|
|
|
|
|
|
|
|
|||
Interest and fees on loans
|
$
|
220,463
|
|
|
$
|
207,255
|
|
|
$
|
199,774
|
|
Interest and dividends on investment securities
|
37,762
|
|
|
28,823
|
|
|
19,184
|
|
|||
Total interest and dividend income
|
258,225
|
|
|
236,078
|
|
|
218,958
|
|
|||
Interest expense
|
|
|
|
|
|
|
|
|
|||
Interest on deposit liabilities
|
13,991
|
|
|
9,660
|
|
|
7,167
|
|
|||
Interest on other borrowings
|
1,548
|
|
|
2,496
|
|
|
5,588
|
|
|||
Total interest expense
|
15,539
|
|
|
12,156
|
|
|
12,755
|
|
|||
Net interest income
|
242,686
|
|
|
223,922
|
|
|
206,203
|
|
|||
Provision for loan losses
|
14,745
|
|
|
10,901
|
|
|
16,763
|
|
|||
Net interest income after provision for loan losses
|
227,941
|
|
|
213,021
|
|
|
189,440
|
|
|||
Noninterest income
|
|
|
|
|
|
|
|
|
|||
Fees from other financial services
|
18,937
|
|
|
22,796
|
|
|
22,384
|
|
|||
Fee income on deposit liabilities
|
21,311
|
|
|
22,204
|
|
|
21,759
|
|
|||
Fee income on other financial products
|
7,052
|
|
|
7,205
|
|
|
8,707
|
|
|||
Bank-owned life insurance
|
5,057
|
|
|
5,539
|
|
|
4,637
|
|
|||
Mortgage banking income
|
1,493
|
|
|
2,201
|
|
|
6,625
|
|
|||
Gains on sale of investment securities, net
|
—
|
|
|
—
|
|
|
598
|
|
|||
Other income, net
|
2,200
|
|
|
1,617
|
|
|
2,256
|
|
|||
Total noninterest income
|
56,050
|
|
|
61,562
|
|
|
66,966
|
|
|||
Noninterest expense
|
|
|
|
|
|
|
|
|
|||
Compensation and employee benefits
|
98,387
|
|
|
94,931
|
|
|
89,242
|
|
|||
Occupancy
|
17,073
|
|
|
16,699
|
|
|
16,321
|
|
|||
Data processing
|
14,268
|
|
|
13,280
|
|
|
13,030
|
|
|||
Services
|
10,847
|
|
|
10,994
|
|
|
11,054
|
|
|||
Equipment
|
7,186
|
|
|
7,232
|
|
|
6,938
|
|
|||
Office supplies, printing and postage
|
6,134
|
|
|
6,182
|
|
|
6,075
|
|
|||
Marketing
|
3,567
|
|
|
3,501
|
|
|
3,489
|
|
|||
FDIC insurance
|
2,713
|
|
|
2,904
|
|
|
3,543
|
|
|||
Other expense
|
17,238
|
|
|
20,144
|
|
|
19,362
|
|
|||
Total noninterest expense
|
177,413
|
|
|
175,867
|
|
|
169,054
|
|
|||
Income before income taxes
|
106,578
|
|
|
98,716
|
|
|
87,352
|
|
|||
Income taxes
|
24,069
|
|
|
31,719
|
|
|
30,073
|
|
|||
Net income
|
$
|
82,509
|
|
|
$
|
66,997
|
|
|
$
|
57,279
|
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in thousands)
|
|
|
|
|
|
||||||
Interest and dividend income
|
$
|
258,225
|
|
|
$
|
236,078
|
|
|
$
|
218,958
|
|
Noninterest income
|
56,050
|
|
|
61,562
|
|
|
66,966
|
|
|||
*Revenues-Bank
|
314,275
|
|
|
297,640
|
|
|
285,924
|
|
|||
Total interest expense
|
15,539
|
|
|
12,156
|
|
|
12,755
|
|
|||
Provision for loan losses
|
14,745
|
|
|
10,901
|
|
|
16,763
|
|
|||
Total noninterest expense
|
177,413
|
|
|
175,867
|
|
|
169,054
|
|
|||
Less: Retirement defined benefits expense—other than service costs
|
(1,657
|
)
|
|
(820
|
)
|
|
(875
|
)
|
|||
*Expenses-Bank
|
206,040
|
|
|
198,104
|
|
|
197,697
|
|
|||
*Operating income-Bank
|
108,235
|
|
|
99,536
|
|
|
88,227
|
|
|||
Add back: Retirement defined benefits expense—other than service costs
|
1,657
|
|
|
820
|
|
|
875
|
|
|||
Income before income taxes
|
$
|
106,578
|
|
|
$
|
98,716
|
|
|
$
|
87,352
|
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
82,509
|
|
|
$
|
66,997
|
|
|
$
|
57,279
|
|
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 $3,468, $2,886 and $3,763 for 2018, 2017 and 2016, respectively
|
(9,472
|
)
|
|
(4,370
|
)
|
|
(5,699
|
)
|
|||
Reclassification adjustment for net realized gains included in net income, net of taxes of nil, nil and $238 for 2018, 2017 and 2016, respectively
|
—
|
|
|
—
|
|
|
(360
|
)
|
|||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|||
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $1,108, $812 and $566 for 2018, 2017 and 2016, respectively
|
2,353
|
|
|
1,231
|
|
|
857
|
|
|||
Other comprehensive loss, net of tax benefits
|
(7,119
|
)
|
|
(3,139
|
)
|
|
(5,202
|
)
|
|||
Comprehensive income
|
$
|
75,390
|
|
|
$
|
63,858
|
|
|
$
|
52,077
|
|
December 31
|
|
2018
|
|
|
2017
|
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Cash and due from banks
|
|
$
|
122,059
|
|
|
$
|
140,934
|
|
||||
Interest-bearing deposits
|
|
4,225
|
|
|
93,165
|
|
||||||
Investment securities
|
|
|
|
|
||||||||
Available-for-sale, at fair value
|
|
1,388,533
|
|
|
1,401,198
|
|
||||||
Held-to-maturity, at amortized cost (fair value of $142,057 and $44,412 at December 31, 2018 and 2017, respectively)
|
|
141,875
|
|
|
44,515
|
|
||||||
Stock in Federal Home Loan Bank, at cost
|
|
9,958
|
|
|
9,706
|
|
||||||
Loans held for investment
|
|
4,843,021
|
|
|
4,670,768
|
|
||||||
Allowance for loan losses
|
|
(52,119
|
)
|
|
(53,637
|
)
|
||||||
Net loans
|
|
4,790,902
|
|
|
4,617,131
|
|
||||||
Loans held for sale, at lower of cost or fair value
|
|
1,805
|
|
|
11,250
|
|
||||||
Other
|
|
486,347
|
|
|
398,570
|
|
||||||
Goodwill
|
|
82,190
|
|
|
82,190
|
|
||||||
Total assets
|
|
$
|
7,027,894
|
|
|
$
|
6,798,659
|
|
||||
Liabilities and shareholder’s equity
|
|
|
|
|
|
|
||||||
Deposit liabilities–noninterest-bearing
|
|
$
|
1,800,727
|
|
|
$
|
1,760,233
|
|
||||
Deposit liabilities–interest-bearing
|
|
4,358,125
|
|
|
4,130,364
|
|
||||||
Other borrowings
|
|
110,040
|
|
|
190,859
|
|
||||||
Other
|
|
124,613
|
|
|
110,356
|
|
||||||
Total liabilities
|
|
6,393,505
|
|
|
6,191,812
|
|
||||||
Commitments and contingencies
|
|
|
|
|
|
|
||||||
Common stock
|
|
1
|
|
|
1
|
|
||||||
Additional paid in capital
|
|
347,170
|
|
|
345,018
|
|
||||||
Retained earnings
|
|
325,286
|
|
|
292,957
|
|
||||||
Accumulated other comprehensive loss, net of tax benefits
|
|
|
|
|
||||||||
Net unrealized losses on securities
|
$
|
(24,423
|
)
|
|
$
|
(14,951
|
)
|
|
||||
Retirement benefit plans
|
(13,645
|
)
|
(38,068
|
)
|
(16,178
|
)
|
(31,129
|
)
|
||||
Total shareholder’s equity
|
|
634,389
|
|
|
606,847
|
|
||||||
Total liabilities and shareholder’s equity
|
|
$
|
7,027,894
|
|
|
$
|
6,798,659
|
|
December 31
|
|
2018
|
|
|
2017
|
|
||
(in thousands)
|
|
|
|
|
|
|
||
Other assets
|
|
|
|
|
|
|
||
Bank-owned life insurance
|
|
$
|
151,172
|
|
|
$
|
148,775
|
|
Premises and equipment, net
|
|
214,415
|
|
|
136,270
|
|
||
Accrued interest receivable
|
|
20,140
|
|
|
18,724
|
|
||
Mortgage servicing rights
|
|
8,062
|
|
|
8,639
|
|
||
Low-income housing investments
|
|
67,626
|
|
|
59,016
|
|
||
Real estate acquired in settlement of loans, net
|
|
406
|
|
|
133
|
|
||
Other
|
|
24,526
|
|
|
27,013
|
|
||
|
|
$
|
486,347
|
|
|
$
|
398,570
|
|
Other liabilities
|
|
|
|
|
|
|
||
Accrued expenses
|
|
$
|
54,084
|
|
|
$
|
39,312
|
|
Federal and state income taxes payable
|
|
2,012
|
|
|
3,736
|
|
||
Cashier’s checks
|
|
26,906
|
|
|
27,000
|
|
||
Advance payments by borrowers
|
|
10,183
|
|
|
10,245
|
|
||
Other
|
|
31,428
|
|
|
30,063
|
|
||
|
|
$
|
124,613
|
|
|
$
|
110,356
|
|
|
|
|
|
|
|
|
|
|
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, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and federal agency obligations
|
$
|
156,694
|
|
|
$
|
62
|
|
|
$
|
(2,407
|
)
|
|
$
|
154,349
|
|
|
5
|
|
$
|
25,882
|
|
|
$
|
(208
|
)
|
|
19
|
|
$
|
118,405
|
|
|
$
|
(2,199
|
)
|
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
1,192,169
|
|
|
789
|
|
|
(31,542
|
)
|
|
1,161,416
|
|
|
22
|
|
129,011
|
|
|
(1,330
|
)
|
|
145
|
|
947,890
|
|
|
(30,212
|
)
|
||||||||
Corporate bonds
|
49,398
|
|
|
103
|
|
|
(369
|
)
|
|
49,132
|
|
|
6
|
|
23,175
|
|
|
(369
|
)
|
|
—
|
|
—
|
|
|
—
|
|
||||||||
Mortgage revenue bonds
|
23,636
|
|
|
—
|
|
|
—
|
|
|
23,636
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
||||||||
|
$
|
1,421,897
|
|
|
$
|
954
|
|
|
$
|
(34,318
|
)
|
|
$
|
1,388,533
|
|
|
33
|
|
$
|
178,068
|
|
|
$
|
(1,907
|
)
|
|
164
|
|
$
|
1,066,295
|
|
|
$
|
(32,411
|
)
|
Held-to-maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
$
|
141,875
|
|
|
$
|
1,446
|
|
|
$
|
(1,264
|
)
|
|
$
|
142,057
|
|
|
3
|
|
$
|
29,814
|
|
|
$
|
(400
|
)
|
|
2
|
|
$
|
31,505
|
|
|
$
|
(864
|
)
|
|
$
|
141,875
|
|
|
$
|
1,446
|
|
|
$
|
(1,264
|
)
|
|
$
|
142,057
|
|
|
3
|
|
$
|
29,814
|
|
|
$
|
(400
|
)
|
|
2
|
|
$
|
31,505
|
|
|
$
|
(864
|
)
|
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-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
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-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
$
|
44,515
|
|
|
$
|
1
|
|
|
$
|
(104
|
)
|
|
$
|
44,412
|
|
|
2
|
|
$
|
35,744
|
|
|
$
|
(104
|
)
|
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44,515
|
|
|
$
|
1
|
|
|
$
|
(104
|
)
|
|
$
|
44,412
|
|
|
2
|
|
$
|
35,744
|
|
|
$
|
(104
|
)
|
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Amortized
|
|
Fair
|
||||
December 31, 2018
|
Cost
|
|
value
|
||||
(in thousands)
|
|
|
|
||||
Available-for-sale
|
|
|
|
||||
Due in one year or less
|
$
|
20,002
|
|
|
$
|
19,955
|
|
Due after one year through five years
|
117,549
|
|
|
116,508
|
|
||
Due after five years through ten years
|
76,750
|
|
|
75,227
|
|
||
Due after ten years
|
15,427
|
|
|
15,427
|
|
||
|
229,728
|
|
|
227,117
|
|
||
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
1,192,169
|
|
|
1,161,416
|
|
||
Total available-for-sale securities
|
$
|
1,421,897
|
|
|
$
|
1,388,533
|
|
Held-to-maturity
|
|
|
|
||||
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
$
|
141,875
|
|
|
$
|
142,057
|
|
Total held-to-maturity securities
|
$
|
141,875
|
|
|
$
|
142,057
|
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in millions)
|
|
|
|
|
|
||||||
Proceeds
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16.4
|
|
Gross gains
|
—
|
|
|
—
|
|
|
0.6
|
|
|||
Gross losses
|
—
|
|
|
—
|
|
|
—
|
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in thousands)
|
|
|
|
|
|
||||||
Taxable
|
$
|
37,153
|
|
|
$
|
28,398
|
|
|
$
|
19,166
|
|
Non-taxable
|
609
|
|
|
425
|
|
|
18
|
|
|||
|
$
|
37,762
|
|
|
$
|
28,823
|
|
|
$
|
19,184
|
|
December 31
|
2018
|
|
|
2017
|
|
||
(in thousands)
|
|
|
|
|
|
||
Real estate:
|
|
|
|
|
|
||
Residential 1-4 family
|
$
|
2,143,397
|
|
|
$
|
2,118,047
|
|
Commercial real estate
|
748,398
|
|
|
733,106
|
|
||
Home equity line of credit
|
978,237
|
|
|
913,052
|
|
||
Residential land
|
13,138
|
|
|
15,797
|
|
||
Commercial construction
|
92,264
|
|
|
108,273
|
|
||
Residential construction
|
14,307
|
|
|
14,910
|
|
||
Total real estate
|
3,989,741
|
|
|
3,903,185
|
|
||
Commercial
|
587,891
|
|
|
544,828
|
|
||
Consumer
|
266,002
|
|
|
223,564
|
|
||
Total loans
|
4,843,634
|
|
|
4,671,577
|
|
||
Less: Deferred fees and discounts
|
(613
|
)
|
|
(809
|
)
|
||
Allowance for loan losses
|
(52,119
|
)
|
|
(53,637
|
)
|
||
Total loans, net
|
$
|
4,790,902
|
|
|
$
|
4,617,131
|
|
(in thousands)
|
Residential 1-4 family
|
|
Commercial
real estate |
|
Home equity
line of credit |
|
Residential land
|
|
Commercial construction
|
|
Residential construction
|
|
Commercial
|
|
Consumer
|
|
Total
|
||||||||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Beginning balance
|
$
|
2,902
|
|
|
$
|
15,796
|
|
|
$
|
7,522
|
|
|
$
|
896
|
|
|
$
|
4,671
|
|
|
$
|
12
|
|
|
$
|
10,851
|
|
|
$
|
10,987
|
|
|
$
|
53,637
|
|
Charge-offs
|
(128
|
)
|
|
—
|
|
|
(353
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(2,722
|
)
|
|
(17,296
|
)
|
|
(20,517
|
)
|
|||||||||
Recoveries
|
74
|
|
|
—
|
|
|
257
|
|
|
179
|
|
|
—
|
|
|
—
|
|
|
2,136
|
|
|
1,608
|
|
|
4,254
|
|
|||||||||
Provision
|
(872
|
)
|
|
(1,291
|
)
|
|
(1,055
|
)
|
|
(578
|
)
|
|
(1,881
|
)
|
|
(8
|
)
|
|
(1,040
|
)
|
|
21,470
|
|
|
14,745
|
|
|||||||||
Ending balance
|
$
|
1,976
|
|
|
$
|
14,505
|
|
|
$
|
6,371
|
|
|
$
|
479
|
|
|
$
|
2,790
|
|
|
$
|
4
|
|
|
$
|
9,225
|
|
|
$
|
16,769
|
|
|
$
|
52,119
|
|
Ending balance: individually evaluated for impairment
|
$
|
876
|
|
|
$
|
7
|
|
|
$
|
701
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
628
|
|
|
$
|
4
|
|
|
$
|
2,222
|
|
Ending balance: collectively evaluated for impairment
|
$
|
1,100
|
|
|
$
|
14,498
|
|
|
$
|
5,670
|
|
|
$
|
473
|
|
|
$
|
2,790
|
|
|
$
|
4
|
|
|
$
|
8,597
|
|
|
$
|
16,765
|
|
|
$
|
49,897
|
|
Financing Receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ending balance
|
$
|
2,143,397
|
|
|
$
|
748,398
|
|
|
$
|
978,237
|
|
|
$
|
13,138
|
|
|
$
|
92,264
|
|
|
$
|
14,307
|
|
|
$
|
587,891
|
|
|
$
|
266,002
|
|
|
$
|
4,843,634
|
|
Ending balance: individually evaluated for impairment
|
$
|
16,494
|
|
|
$
|
915
|
|
|
$
|
14,800
|
|
|
$
|
2,059
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,340
|
|
|
$
|
89
|
|
|
$
|
39,697
|
|
Ending balance: collectively evaluated for impairment
|
$
|
2,126,903
|
|
|
$
|
747,483
|
|
|
$
|
963,437
|
|
|
$
|
11,079
|
|
|
$
|
92,264
|
|
|
$
|
14,307
|
|
|
$
|
582,551
|
|
|
$
|
265,913
|
|
|
$
|
4,803,937
|
|
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
|
2018
|
|
2017
|
||||||||||||||||||||||||||||
(in thousands)
|
Commercial
real estate
|
|
Commercial
construction
|
|
Commercial
|
|
Total
|
|
Commercial
real estate
|
|
Commercial
construction
|
|
Commercial
|
|
Total
|
||||||||||||||||
Grade:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pass
|
$
|
658,288
|
|
|
$
|
89,974
|
|
|
$
|
547,640
|
|
|
$
|
1,295,902
|
|
|
$
|
630,877
|
|
|
$
|
83,757
|
|
|
$
|
492,942
|
|
|
$
|
1,207,576
|
|
Special mention
|
32,871
|
|
|
—
|
|
|
11,598
|
|
|
44,469
|
|
|
49,347
|
|
|
22,500
|
|
|
27,997
|
|
|
99,844
|
|
||||||||
Substandard
|
57,239
|
|
|
2,290
|
|
|
28,653
|
|
|
88,182
|
|
|
52,882
|
|
|
2,016
|
|
|
23,421
|
|
|
78,319
|
|
||||||||
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
468
|
|
|
468
|
|
||||||||
Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
$
|
748,398
|
|
|
$
|
92,264
|
|
|
$
|
587,891
|
|
|
$
|
1,428,553
|
|
|
$
|
733,106
|
|
|
$
|
108,273
|
|
|
$
|
544,828
|
|
|
$
|
1,386,207
|
|
(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, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Residential 1-4 family
|
$
|
3,757
|
|
|
$
|
2,773
|
|
|
$
|
2,339
|
|
|
$
|
8,869
|
|
|
$
|
2,134,528
|
|
|
$
|
2,143,397
|
|
|
$
|
—
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
748,398
|
|
|
748,398
|
|
|
—
|
|
|||||||
Home equity line of credit
|
1,139
|
|
|
681
|
|
|
2,720
|
|
|
4,540
|
|
|
973,697
|
|
|
978,237
|
|
|
—
|
|
|||||||
Residential land
|
9
|
|
|
—
|
|
|
319
|
|
|
328
|
|
|
12,810
|
|
|
13,138
|
|
|
—
|
|
|||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92,264
|
|
|
92,264
|
|
|
—
|
|
|||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,307
|
|
|
14,307
|
|
|
—
|
|
|||||||
Commercial
|
315
|
|
|
281
|
|
|
548
|
|
|
1,144
|
|
|
586,747
|
|
|
587,891
|
|
|
—
|
|
|||||||
Consumer
|
5,220
|
|
|
3,166
|
|
|
2,702
|
|
|
11,088
|
|
|
254,914
|
|
|
266,002
|
|
|
—
|
|
|||||||
Total loans
|
$
|
10,440
|
|
|
$
|
6,901
|
|
|
$
|
8,628
|
|
|
$
|
25,969
|
|
|
$
|
4,817,665
|
|
|
$
|
4,843,634
|
|
|
$
|
—
|
|
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
|
2018
|
|
|
2017
|
|
||
(in thousands)
|
|
|
|
||||
Real estate:
|
|
|
|
|
|
||
Residential 1-4 family
|
$
|
12,037
|
|
|
$
|
12,598
|
|
Commercial real estate
|
—
|
|
|
—
|
|
||
Home equity line of credit
|
6,348
|
|
|
4,466
|
|
||
Residential land
|
436
|
|
|
841
|
|
||
Commercial construction
|
—
|
|
|
—
|
|
||
Residential construction
|
—
|
|
|
—
|
|
||
Commercial
|
4,278
|
|
|
3,069
|
|
||
Consumer
|
4,196
|
|
|
2,617
|
|
||
Total nonaccrual loans
|
$
|
27,295
|
|
|
$
|
23,591
|
|
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
|
$
|
10,194
|
|
|
$
|
10,982
|
|
Commercial real estate
|
915
|
|
|
1,016
|
|
||
Home equity line of credit
|
11,597
|
|
|
6,584
|
|
||
Residential land
|
1,622
|
|
|
425
|
|
||
Commercial construction
|
—
|
|
|
—
|
|
||
Residential construction
|
—
|
|
|
—
|
|
||
Commercial
|
1,527
|
|
|
1,741
|
|
||
Consumer
|
62
|
|
|
66
|
|
||
Total troubled debt restructured loans not included above
|
$
|
25,917
|
|
|
$
|
20,814
|
|
December 31
|
2018
|
|
2017
|
||||||||||||||||||||
(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
|
$
|
7,822
|
|
|
$
|
8,333
|
|
|
$
|
—
|
|
|
$
|
9,097
|
|
|
$
|
9,644
|
|
|
$
|
—
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Home equity line of credit
|
2,743
|
|
|
3,004
|
|
|
—
|
|
|
1,496
|
|
|
1,789
|
|
|
—
|
|
||||||
Residential land
|
2,030
|
|
|
2,228
|
|
|
—
|
|
|
1,143
|
|
|
1,434
|
|
|
—
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
3,722
|
|
|
4,775
|
|
|
—
|
|
|
2,328
|
|
|
3,166
|
|
|
—
|
|
||||||
Consumer
|
32
|
|
|
32
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
—
|
|
||||||
|
16,349
|
|
|
18,372
|
|
|
—
|
|
|
14,072
|
|
|
16,041
|
|
|
—
|
|
||||||
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential 1-4 family
|
8,672
|
|
|
8,875
|
|
|
876
|
|
|
9,187
|
|
|
9,390
|
|
|
1,248
|
|
||||||
Commercial real estate
|
915
|
|
|
915
|
|
|
7
|
|
|
1,016
|
|
|
1,016
|
|
|
65
|
|
||||||
Home equity line of credit
|
12,057
|
|
|
12,086
|
|
|
701
|
|
|
6,692
|
|
|
6,736
|
|
|
647
|
|
||||||
Residential land
|
29
|
|
|
29
|
|
|
6
|
|
|
122
|
|
|
122
|
|
|
47
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
1,618
|
|
|
1,618
|
|
|
628
|
|
|
2,246
|
|
|
2,252
|
|
|
694
|
|
||||||
Consumer
|
57
|
|
|
57
|
|
|
4
|
|
|
58
|
|
|
58
|
|
|
29
|
|
||||||
|
23,348
|
|
|
23,580
|
|
|
2,222
|
|
|
19,321
|
|
|
19,574
|
|
|
2,730
|
|
||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential 1-4 family
|
16,494
|
|
|
17,208
|
|
|
876
|
|
|
18,284
|
|
|
19,034
|
|
|
1,248
|
|
||||||
Commercial real estate
|
915
|
|
|
915
|
|
|
7
|
|
|
1,016
|
|
|
1,016
|
|
|
65
|
|
||||||
Home equity line of credit
|
14,800
|
|
|
15,090
|
|
|
701
|
|
|
8,188
|
|
|
8,525
|
|
|
647
|
|
||||||
Residential land
|
2,059
|
|
|
2,257
|
|
|
6
|
|
|
1,265
|
|
|
1,556
|
|
|
47
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
5,340
|
|
|
6,393
|
|
|
628
|
|
|
4,574
|
|
|
5,418
|
|
|
694
|
|
||||||
Consumer
|
89
|
|
|
89
|
|
|
4
|
|
|
66
|
|
|
66
|
|
|
29
|
|
||||||
|
$
|
39,697
|
|
|
$
|
41,952
|
|
|
$
|
2,222
|
|
|
$
|
33,393
|
|
|
$
|
35,615
|
|
|
$
|
2,730
|
|
December 31
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
(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
|
$
|
8,595
|
|
|
$
|
445
|
|
|
$
|
9,440
|
|
|
$
|
316
|
|
|
$
|
10,136
|
|
|
$
|
324
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
91
|
|
|
11
|
|
|
1,124
|
|
|
—
|
|
||||||
Home equity line of credit
|
2,206
|
|
|
75
|
|
|
1,976
|
|
|
101
|
|
|
1,105
|
|
|
23
|
|
||||||
Residential land
|
1,532
|
|
|
40
|
|
|
1,094
|
|
|
117
|
|
|
1,518
|
|
|
66
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
3,275
|
|
|
28
|
|
|
2,776
|
|
|
54
|
|
|
8,694
|
|
|
370
|
|
||||||
Consumer
|
22
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||
|
15,630
|
|
|
588
|
|
|
15,378
|
|
|
599
|
|
|
22,579
|
|
|
783
|
|
||||||
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential 1-4 family
|
8,878
|
|
|
363
|
|
|
9,818
|
|
|
493
|
|
|
11,589
|
|
|
457
|
|
||||||
Commercial real estate
|
982
|
|
|
42
|
|
|
1,241
|
|
|
54
|
|
|
1,962
|
|
|
15
|
|
||||||
Home equity line of credit
|
10,617
|
|
|
440
|
|
|
5,045
|
|
|
251
|
|
|
3,765
|
|
|
137
|
|
||||||
Residential land
|
37
|
|
|
3
|
|
|
1,308
|
|
|
97
|
|
|
2,964
|
|
|
206
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
1,789
|
|
|
122
|
|
|
3,691
|
|
|
723
|
|
|
16,106
|
|
|
456
|
|
||||||
Consumer
|
57
|
|
|
4
|
|
|
57
|
|
|
3
|
|
|
12
|
|
|
—
|
|
||||||
|
22,360
|
|
|
974
|
|
|
21,160
|
|
|
1,621
|
|
|
36,398
|
|
|
1,271
|
|
||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential 1-4 family
|
17,473
|
|
|
808
|
|
|
19,258
|
|
|
809
|
|
|
21,725
|
|
|
781
|
|
||||||
Commercial real estate
|
982
|
|
|
42
|
|
|
1,332
|
|
|
65
|
|
|
3,086
|
|
|
15
|
|
||||||
Home equity line of credit
|
12,823
|
|
|
515
|
|
|
7,021
|
|
|
352
|
|
|
4,870
|
|
|
160
|
|
||||||
Residential land
|
1,569
|
|
|
43
|
|
|
2,402
|
|
|
214
|
|
|
4,482
|
|
|
272
|
|
||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial
|
5,064
|
|
|
150
|
|
|
6,467
|
|
|
777
|
|
|
24,800
|
|
|
826
|
|
||||||
Consumer
|
79
|
|
|
4
|
|
|
58
|
|
|
3
|
|
|
14
|
|
|
—
|
|
||||||
|
$
|
37,990
|
|
|
$
|
1,562
|
|
|
$
|
36,538
|
|
|
$
|
2,220
|
|
|
$
|
58,977
|
|
|
$
|
2,054
|
|
(dollars in thousands)
|
Number of contracts
|
|
Outstanding recorded investment
|
|
Net increase in ALLL
|
|||||||||
Years ended
|
|
Pre-modification
|
|
Post-modification
|
|
|||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|||||||
Real estate:
|
|
|
|
|
|
|
|
|
|
|
||||
Residential 1-4 family
|
5
|
|
|
$
|
1,107
|
|
|
$
|
1,133
|
|
|
$
|
17
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Home equity line of credit
|
58
|
|
|
7,487
|
|
|
7,492
|
|
|
1,220
|
|
|||
Residential land
|
5
|
|
|
1,776
|
|
|
1,786
|
|
|
—
|
|
|||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial
|
13
|
|
|
2,550
|
|
|
2,550
|
|
|
176
|
|
|||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
81
|
|
|
$
|
12,920
|
|
|
$
|
12,961
|
|
|
$
|
1,413
|
|
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
|
|
Years ended December 31
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
(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
|
|
|
81
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Residential land
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Residential construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commercial
|
1
|
|
|
246
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
24
|
|
|||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
2
|
|
|
$
|
327
|
|
|
1
|
|
|
$
|
222
|
|
|
2
|
|
|
$
|
263
|
|
(in thousands)
|
Gross
carrying amount 1 |
|
Accumulated amortization
1
|
|
Valuation allowance
|
|
Net
carrying amount |
||||||||
December 31, 2018
|
$
|
18,556
|
|
|
$
|
(10,494
|
)
|
|
$
|
—
|
|
|
$
|
8,062
|
|
December 31, 2017
|
$
|
17,511
|
|
|
$
|
(8,872
|
)
|
|
$
|
—
|
|
|
$
|
8,639
|
|
(in thousands)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Mortgage servicing rights
|
|
|
|
|
|
||||||
Balance, January 1
|
$
|
8,639
|
|
|
$
|
9,373
|
|
|
$
|
8,884
|
|
Amount capitalized
|
1,045
|
|
|
1,239
|
|
|
2,740
|
|
|||
Amortization
|
(1,622
|
)
|
|
(1,973
|
)
|
|
(2,251
|
)
|
|||
Sale of mortgage servicing rights
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other-than-temporary impairment
|
—
|
|
|
—
|
|
|
—
|
|
|||
Carrying amount before valuation allowance, December 31
|
8,062
|
|
|
8,639
|
|
|
9,373
|
|
|||
Valuation allowance for mortgage servicing rights
|
|
|
|
|
|
||||||
Balance, January 1
|
—
|
|
|
—
|
|
|
—
|
|
|||
Provision (recovery)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other-than-temporary impairment
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance, December 31
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net carrying value of mortgage servicing rights
|
$
|
8,062
|
|
|
$
|
8,639
|
|
|
$
|
9,373
|
|
December 31
|
2018
|
|
|
2017
|
|
||
(dollars in thousands)
|
|
|
|
||||
Unpaid principal balance
|
$
|
1,188,514
|
|
|
$
|
1,195,454
|
|
Weighted average note rate
|
3.98
|
%
|
|
3.94
|
%
|
||
Weighted average discount rate
|
10.0
|
%
|
|
10.0
|
%
|
||
Weighted average prepayment speed
|
6.5
|
%
|
|
9.0
|
%
|
December 31
|
2018
|
|
|
2017
|
|
||
(in thousands)
|
|
|
|
||||
Prepayment rate:
|
|
|
|
||||
25 basis points adverse rate change
|
$
|
(250
|
)
|
|
$
|
(869
|
)
|
50 basis points adverse rate change
|
(566
|
)
|
|
(1,828
|
)
|
||
Discount rate:
|
|
|
|
||||
25 basis points adverse rate change
|
(139
|
)
|
|
(111
|
)
|
||
50 basis points adverse rate change
|
(275
|
)
|
|
(220
|
)
|
December 31
|
2018
|
|
2017
|
||||||||||
(dollars in thousands)
|
Weighted-average stated rate
|
|
|
Amount
|
|
|
Weighted-average stated rate
|
|
|
Amount
|
|
||
Savings
|
0.07
|
%
|
|
$
|
2,322,552
|
|
|
0.07
|
%
|
|
$
|
2,303,450
|
|
Checking
|
|
|
|
|
|
|
|
|
|
||||
Interest-bearing
|
0.09
|
|
|
1,055,019
|
|
|
0.03
|
|
|
944,833
|
|
||
Noninterest-bearing
|
—
|
|
|
932,608
|
|
|
—
|
|
|
896,292
|
|
||
Commercial checking
|
—
|
|
|
868,119
|
|
|
—
|
|
|
863,941
|
|
||
Money market
|
0.63
|
|
|
152,713
|
|
|
0.09
|
|
|
114,797
|
|
||
Time certificates
|
1.61
|
|
|
827,841
|
|
|
1.26
|
|
|
767,284
|
|
||
|
0.27
|
%
|
|
$
|
6,158,852
|
|
|
0.20
|
%
|
|
$
|
5,890,597
|
|
(in thousands)
|
|
||
2019
|
$
|
508,833
|
|
2020
|
128,613
|
|
|
2021
|
107,095
|
|
|
2022
|
49,329
|
|
|
2023
|
30,456
|
|
|
Thereafter
|
3,515
|
|
|
|
$
|
827,841
|
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in thousands)
|
|
|
|
|
|
||||||
Time certificates
|
$
|
11,044
|
|
|
$
|
7,687
|
|
|
$
|
5,390
|
|
Savings
|
1,639
|
|
|
1,567
|
|
|
1,402
|
|
|||
Money market
|
602
|
|
|
168
|
|
|
202
|
|
|||
Interest-bearing checking
|
706
|
|
|
238
|
|
|
173
|
|
|||
|
$
|
13,991
|
|
|
$
|
9,660
|
|
|
$
|
7,167
|
|
(in millions)
|
|
Gross amount of
recognized liabilities
|
|
Gross amount
offset in the
Balance Sheets
|
|
Net amount of
liabilities presented
in the Balance Sheets
|
||||||
Repurchase agreements
|
|
|
|
|
|
|
|
|
|
|||
December 31, 2018
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
65
|
|
December 31, 2017
|
|
141
|
|
|
—
|
|
|
141
|
|
|
|
Gross amount not offset in the Balance Sheets
|
||||||||||
(in millions)
|
|
Net amount of
liabilities presented
in the Balance Sheets
|
|
Financial
instruments
|
|
Cash
collateral
pledged
|
||||||
Commercial account holders
|
|
|
|
|
|
|
|
|
|
|||
December 31, 2018
|
|
$
|
65
|
|
|
$
|
92
|
|
|
$
|
—
|
|
December 31, 2017
|
|
141
|
|
|
165
|
|
|
—
|
|
(dollars in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Amount outstanding as of December 31
|
$
|
65
|
|
|
$
|
141
|
|
|
$
|
93
|
|
Average amount outstanding during the year
|
$
|
99
|
|
|
$
|
98
|
|
|
$
|
170
|
|
Maximum amount outstanding as of any month-end
|
$
|
152
|
|
|
$
|
141
|
|
|
$
|
229
|
|
Weighted-average interest rate as of December 31
|
0.75
|
%
|
|
0.65
|
%
|
|
0.23
|
%
|
|||
Weighted-average interest rate during the year
|
0.71
|
%
|
|
0.26
|
%
|
|
1.43
|
%
|
|||
Weighted-average remaining days to maturity as of December 31
|
1
|
|
|
1
|
|
|
6
|
|
December 31
|
2018
|
|
2017
|
||||||||||||||||||
Maturity
|
Repurchase liability
|
|
|
Weighted-average
interest rate
|
|
|
Collateralized by
mortgage-backed
securities and federal
agency obligations at fair value plus
accrued interest
|
|
|
Repurchase liability
|
|
|
Weighted-average
interest rate |
|
|
Collateralized by
mortgage-backed securities and federal agency obligations at fair value plus accrued interest |
|
||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Overnight
|
$
|
65,040
|
|
|
0.75
|
%
|
|
$
|
92,290
|
|
|
$
|
140,859
|
|
|
0.65
|
%
|
|
$
|
165,464
|
|
1 to 29 days
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
30 to 90 days
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Over 90 days
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
65,040
|
|
|
0.75
|
%
|
|
$
|
92,290
|
|
|
$
|
140,859
|
|
|
0.65
|
%
|
|
$
|
165,464
|
|
December 31, 2018
|
Weighted-average
stated rate
|
|
Amount
|
|||
(dollars in thousands)
|
|
|
|
|
|
|
Due in
|
|
|
|
|
|
|
2019
|
2.63
|
%
|
|
$
|
45,000
|
|
2020
|
—
|
|
|
—
|
|
|
2021
|
—
|
|
|
—
|
|
|
2022
|
—
|
|
|
—
|
|
|
2023
|
—
|
|
|
—
|
|
|
Thereafter
|
—
|
|
|
—
|
|
|
|
2.63
|
%
|
|
$
|
45,000
|
|
|
Actual
|
|
Minimum required
|
|
Required to be well capitalized
|
||||||||||||
(dollars in thousands)
|
Capital
|
|
Ratio
|
|
Capital
|
|
Ratio
|
|
Capital
|
|
Ratio
|
||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tier 1 leverage
|
606,291
|
|
|
8.70
|
%
|
|
278,811
|
|
|
4.00
|
%
|
|
348,514
|
|
|
5.00
|
%
|
Common equity tier 1
|
606,291
|
|
|
12.80
|
%
|
|
213,190
|
|
|
4.50
|
%
|
|
307,941
|
|
|
6.50
|
%
|
Tier 1 capital
|
606,291
|
|
|
12.80
|
%
|
|
284,253
|
|
|
6.00
|
%
|
|
379,004
|
|
|
8.00
|
%
|
Total capital
|
660,151
|
|
|
13.93
|
%
|
|
379,004
|
|
|
8.00
|
%
|
|
473,755
|
|
|
10.00
|
%
|
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
|
2018
|
|
2017
|
||||||||||||
(in thousands)
|
Notional amount
|
|
Fair value
|
|
Notional amount
|
|
Fair value
|
||||||||
Interest rate lock commitments
|
$
|
10,180
|
|
|
$
|
91
|
|
|
$
|
13,669
|
|
|
$
|
131
|
|
Forward commitments
|
10,132
|
|
|
(43
|
)
|
|
14,465
|
|
|
(24
|
)
|
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
|
|
2018
|
|
2017
|
|
2016
|
||||||
Interest rate lock commitments
|
Mortgage banking income
|
|
$
|
(40
|
)
|
|
$
|
(290
|
)
|
|
$
|
37
|
|
Forward commitments
|
Mortgage banking income
|
|
(19
|
)
|
|
153
|
|
|
(148
|
)
|
|||
|
|
|
$
|
(59
|
)
|
|
$
|
(137
|
)
|
|
$
|
(111
|
)
|
December 31
|
2018
|
|
|
2017
|
|
||
(in thousands)
|
|
|
|
||||
Unfunded commitments to extend credit:
|
|
|
|
|
|||
Home equity line of credit
|
$
|
1,242,804
|
|
|
$
|
1,214,103
|
|
Commercial and commercial real estate
|
515,058
|
|
|
466,510
|
|
||
Consumer
|
70,292
|
|
|
68,053
|
|
||
Residential 1-4 family
|
17,552
|
|
|
18,635
|
|
||
Commercial and financial standby letters of credit
|
13,340
|
|
|
13,136
|
|
||
Total
|
$
|
1,859,046
|
|
|
$
|
1,780,437
|
|
Note 5
·
Short-term borrowings
|
Note 6
·
Long-term debt
|
December 31
|
2018
|
|
|
2017
|
|
||
(dollars in thousands)
|
|
|
|
|
|
||
Long-term debt of Utilities, net of unamortized debt issuance costs
1
|
$
|
1,418,802
|
|
|
$
|
1,368,479
|
|
Hamakua Energy 4.02% notes, due 2030
|
63,438
|
|
|
67,325
|
|
||
HEI 2.99% term loan, due 2022
|
150,000
|
|
|
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 4.58% senior notes, due 2025
|
50,000
|
|
|
—
|
|
||
HEI 4.72% senior notes, due 2028
|
100,000
|
|
|
—
|
|
||
Less unamortized debt issuance costs
|
(2,599
|
)
|
|
(2,007
|
)
|
||
|
$
|
1,879,641
|
|
|
$
|
1,683,797
|
|
1
|
See components of “Total long-term debt” and unamortized debt issuance costs in Hawaiian Electric and subsidiaries’ Consolidated Statements of Capitalization.
|
|
HEI Series 2018A
|
HEI Series 2018B
|
||
Aggregate principal amount due at maturity
|
$50 million
|
$100 million
|
||
Fixed coupon interest rate
|
4.58%
|
4.72%
|
||
Maturity date
|
December 15, 2025
|
December 15, 2028
|
||
Draw date
|
October 4, 2018
|
December 18, 2018
|
|
Series 2018A
|
Series 2018B
|
Series 2018C
|
Aggregate principal amount
|
$67.5 million
|
$17.5 million
|
$15 million
|
Fixed coupon interest rate
|
4.38%
|
4.53%
|
4.72%
|
Maturity date
|
May 30, 2028
|
May 30, 2033
|
May 30, 2048
|
State of Hawaii Department of Budget and Finance loaned the proceeds to:
|
|
|
|
Hawaiian Electric
|
$52 million
|
$12.5 million
|
$10.5 million
|
Hawaii Electric Light
|
$9 million
|
$3 million
|
$3 million
|
Maui Electric
|
$6.5 million
|
$2 million
|
$1.5 million
|
Note 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, 2015
|
$
|
(1,872
|
)
|
|
$
|
(54
|
)
|
|
$
|
(24,336
|
)
|
|
$
|
(26,262
|
)
|
|
$
|
—
|
|
|
$
|
925
|
|
|
$
|
925
|
|
Current period other comprehensive 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
|
)
|
|||||||
Current period other comprehensive income (loss), net of taxes
|
(9,472
|
)
|
|
(436
|
)
|
|
1,239
|
|
|
(8,669
|
)
|
|
—
|
|
|
1,318
|
|
|
1,318
|
|
|||||||
Balance, December 31, 2018
|
$
|
(24,423
|
)
|
|
$
|
(436
|
)
|
|
$
|
(25,751
|
)
|
|
$
|
(50,610
|
)
|
|
$
|
—
|
|
|
$
|
99
|
|
|
$
|
99
|
|
|
|
Amount reclassified from AOCI
|
|
Affected line item in the Statement of
|
||||||||||
Years ended December 31
|
|
2018
|
|
2017
|
|
2016
|
|
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
|
|
|
Interest expense
|
|||
Retirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Amortization of prior service credit and net losses recognized during the period in net periodic benefit cost
|
|
21,015
|
|
|
15,737
|
|
|
14,518
|
|
|
See Note 9 for additional details
|
|||
Impact of D&Os of the PUC included in regulatory assets
|
|
8,325
|
|
|
(78,724
|
)
|
|
28,584
|
|
|
See Note 9 for additional details
|
|||
Total reclassifications
|
|
$
|
29,340
|
|
|
$
|
(62,533
|
)
|
|
$
|
42,623
|
|
|
|
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
|
|
19,012
|
|
|
14,477
|
|
|
13,254
|
|
|
See Note 9 for additional details
|
|||
Impact of D&Os of the PUC included in regulatory assets
|
|
8,325
|
|
|
(78,724
|
)
|
|
28,584
|
|
|
See Note 9 for additional details
|
|||
Total reclassifications
|
|
$
|
27,337
|
|
|
$
|
(63,793
|
)
|
|
$
|
41,665
|
|
|
|
Note 8
·
Revenues
|
|
|
Year ended December 31, 2018
|
||||||||||||||
(in thousands)
|
|
Electric utility
|
|
Bank
|
|
Other
|
|
Total
|
||||||||
Revenues from contracts with customers
|
|
|
|
|
|
|
|
|
||||||||
Electric energy sales - residential
|
|
$
|
801,846
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
801,846
|
|
Electric energy sales - commercial
|
|
853,672
|
|
|
—
|
|
|
—
|
|
|
853,672
|
|
||||
Electric energy sales - large light and power
|
|
894,770
|
|
|
—
|
|
|
—
|
|
|
894,770
|
|
||||
Electric energy sales - other
|
|
17,243
|
|
|
—
|
|
|
—
|
|
|
17,243
|
|
||||
Bank fees
|
|
—
|
|
|
47,300
|
|
|
—
|
|
|
47,300
|
|
||||
Total revenues from contracts with customers
|
|
2,567,531
|
|
|
47,300
|
|
|
—
|
|
|
2,614,831
|
|
||||
Revenues from other sources
|
|
|
|
|
|
|
|
|
||||||||
Regulatory revenue
|
|
(37,687
|
)
|
|
—
|
|
|
—
|
|
|
(37,687
|
)
|
||||
Bank interest and dividend income
|
|
—
|
|
|
258,225
|
|
|
—
|
|
|
258,225
|
|
||||
Other bank noninterest income
|
|
—
|
|
|
8,750
|
|
|
—
|
|
|
8,750
|
|
||||
Other
|
|
16,681
|
|
|
—
|
|
|
49
|
|
|
16,730
|
|
||||
Total revenues from other sources
|
|
(21,006
|
)
|
|
266,975
|
|
|
49
|
|
|
246,018
|
|
||||
Total revenues
|
|
$
|
2,546,525
|
|
|
$
|
314,275
|
|
|
$
|
49
|
|
|
$
|
2,860,849
|
|
Timing of revenue recognition
|
|
|
|
|
|
|
|
|
||||||||
Services/goods transferred at a point in time
|
|
$
|
—
|
|
|
$
|
47,300
|
|
|
$
|
—
|
|
|
$
|
47,300
|
|
Services/goods transferred over time
|
|
2,567,531
|
|
|
—
|
|
|
—
|
|
|
2,567,531
|
|
||||
Total revenues from contracts with customers
|
|
$
|
2,567,531
|
|
|
$
|
47,300
|
|
|
$
|
—
|
|
|
$
|
2,614,831
|
|
Note 9 · Retirement benefits
|
|
2018
|
|
2017
|
||||||||||||
(in thousands)
|
Pension
benefits
|
|
Other
benefits
|
|
Pension
benefits
|
|
Other
benefits
|
||||||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
||||||||
Benefit obligation, January 1
|
$
|
1,928,648
|
|
|
$
|
204,644
|
|
|
$
|
1,779,626
|
|
|
$
|
225,723
|
|
Service cost
|
67,359
|
|
|
2,704
|
|
|
63,059
|
|
|
3,353
|
|
||||
Interest cost
|
71,294
|
|
|
7,628
|
|
|
74,632
|
|
|
9,115
|
|
||||
Actuarial losses (gains)
|
(158,258
|
)
|
|
(25,330
|
)
|
|
80,186
|
|
|
(25,172
|
)
|
||||
Participants contributions
|
—
|
|
|
2,472
|
|
|
—
|
|
|
2,047
|
|
||||
Benefits paid and expenses
|
(71,535
|
)
|
|
(10,958
|
)
|
|
(68,691
|
)
|
|
(10,419
|
)
|
||||
Transfers
|
145
|
|
|
2
|
|
|
(164
|
)
|
|
(3
|
)
|
||||
Benefit obligation, December 31
|
1,837,653
|
|
|
181,162
|
|
|
1,928,648
|
|
|
204,644
|
|
||||
Fair value of plan assets, January 1
|
1,468,403
|
|
|
190,814
|
|
|
1,233,184
|
|
|
171,383
|
|
||||
Actual return on plan assets
|
(91,836
|
)
|
|
(11,625
|
)
|
|
237,830
|
|
|
27,806
|
|
||||
Employer contributions
|
37,550
|
|
|
—
|
|
|
65,669
|
|
|
—
|
|
||||
Participants contributions
|
—
|
|
|
2,472
|
|
|
—
|
|
|
2,047
|
|
||||
Benefits paid and expenses
|
(71,060
|
)
|
|
(10,801
|
)
|
|
(68,225
|
)
|
|
(10,419
|
)
|
||||
Other
|
56
|
|
|
2
|
|
|
(55
|
)
|
|
(3
|
)
|
||||
Fair value of plan assets, December 31
|
1,343,113
|
|
|
170,862
|
|
|
1,468,403
|
|
|
190,814
|
|
||||
Accrued benefit liability, December 31
|
$
|
(494,540
|
)
|
|
$
|
(10,300
|
)
|
|
$
|
(460,245
|
)
|
|
$
|
(13,830
|
)
|
Other liabilities (short-term)
|
(512
|
)
|
|
(669
|
)
|
|
(494
|
)
|
|
(633
|
)
|
||||
Defined benefit pension and other postretirement benefit plans liability
|
(494,028
|
)
|
|
(9,631
|
)
|
|
(459,751
|
)
|
|
(13,197
|
)
|
||||
Accrued benefit liability, December 31
|
$
|
(494,540
|
)
|
|
$
|
(10,300
|
)
|
|
$
|
(460,245
|
)
|
|
$
|
(13,830
|
)
|
AOCI debit, January 1 (excluding impact of PUC D&Os)
|
$
|
493,464
|
|
|
$
|
839
|
|
|
$
|
579,725
|
|
|
$
|
40,967
|
|
Recognized during year – prior service credit (cost)
|
(8
|
)
|
|
1,803
|
|
|
(8
|
)
|
|
1,804
|
|
||||
Recognized during year – net actuarial losses
|
(27,302
|
)
|
|
(98
|
)
|
|
(24,392
|
)
|
|
(1,102
|
)
|
||||
Occurring during year – net actuarial losses (gains)
|
36,035
|
|
|
(993
|
)
|
|
(61,861
|
)
|
|
(40,830
|
)
|
||||
AOCI debit before cumulative impact of PUC D&Os, December 31
|
502,189
|
|
|
1,551
|
|
|
493,464
|
|
|
839
|
|
||||
Cumulative impact of PUC D&Os
|
(498,944
|
)
|
|
(4,929
|
)
|
|
(489,894
|
)
|
|
(2,767
|
)
|
||||
AOCI debit/(credit), December 31
|
$
|
3,245
|
|
|
$
|
(3,378
|
)
|
|
$
|
3,570
|
|
|
$
|
(1,928
|
)
|
Net actuarial loss
|
$
|
502,173
|
|
|
$
|
8,439
|
|
|
$
|
493,439
|
|
|
$
|
9,531
|
|
Prior service cost (gain)
|
16
|
|
|
(6,888
|
)
|
|
25
|
|
|
(8,692
|
)
|
||||
AOCI debit before cumulative impact of PUC D&Os, December 31
|
502,189
|
|
|
1,551
|
|
|
493,464
|
|
|
839
|
|
||||
Cumulative impact of PUC D&Os
|
(498,944
|
)
|
|
(4,929
|
)
|
|
(489,894
|
)
|
|
(2,767
|
)
|
||||
AOCI debit/(credit), December 31
|
3,245
|
|
|
(3,378
|
)
|
|
3,570
|
|
|
(1,928
|
)
|
||||
Income taxes (benefits)
|
(836
|
)
|
|
870
|
|
|
(920
|
)
|
|
497
|
|
||||
AOCI debit/(credit), net of taxes (benefits), December 31
|
$
|
2,409
|
|
|
$
|
(2,508
|
)
|
|
$
|
2,650
|
|
|
$
|
(1,431
|
)
|
|
Pension benefits
1
|
|
Other benefits
2
|
||||||||||||||||||
|
|
|
|
|
Investment policy
|
|
|
|
|
|
Investment policy
|
||||||||||
December 31
|
2018
|
|
|
2017
|
|
|
Target
|
|
|
Range
|
|
2018
|
|
|
2017
|
|
|
Target
|
|
|
Range
|
Assets held by category
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
69
|
%
|
|
73
|
%
|
|
70
|
%
|
|
65-75
|
|
70
|
%
|
|
73
|
%
|
|
70
|
%
|
|
65-75
|
Fixed income securities
|
31
|
|
|
27
|
|
|
30
|
|
|
25-35
|
|
30
|
|
|
27
|
|
|
30
|
|
|
25-35
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
1
|
Asset allocation is applicable to only HEI and the Utilities. As of December 31,
2018
and
2017
, 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
|
||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
507
|
|
|
$
|
507
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
65
|
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity index and exchange-traded funds
|
348
|
|
|
348
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|
42
|
|
|
—
|
|
|
—
|
|
||||||||
Equity investments at net asset value (NAV)
|
65
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total equity investments
|
920
|
|
|
855
|
|
|
—
|
|
|
—
|
|
|
117
|
|
|
107
|
|
|
—
|
|
|
—
|
|
||||||||
Fixed income securities and public mutual funds
|
310
|
|
|
123
|
|
|
187
|
|
|
—
|
|
|
47
|
|
|
45
|
|
|
2
|
|
|
—
|
|
||||||||
Fixed income investments at NAV
|
208
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total fixed income investments
|
518
|
|
|
123
|
|
|
187
|
|
|
—
|
|
|
51
|
|
|
45
|
|
|
2
|
|
|
—
|
|
||||||||
Cash equivalents at NAV
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
1,474
|
|
|
$
|
978
|
|
|
$
|
187
|
|
|
$
|
—
|
|
|
173
|
|
|
$
|
152
|
|
|
$
|
2
|
|
|
$
|
—
|
|
||
Cash, receivables and payables, net
|
5
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets
|
$
|
1,479
|
|
|
|
|
|
|
|
|
|
|
|
$
|
174
|
|
|
|
|
|
|
|
|
|
|
||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
568
|
|
|
$
|
568
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75
|
|
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity index and exchange-traded funds
|
435
|
|
|
435
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
52
|
|
|
—
|
|
|
—
|
|
||||||||
Equity investments at 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
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non U.S. equity funds (a)
|
$
|
65
|
|
|
Daily-Monthly
|
|
5 - 30 days
|
|
$
|
10
|
|
|
Daily-Monthly
|
|
5-30 days
|
Fixed income investments (b)
|
208
|
|
|
Monthly
|
|
15 days
|
|
4
|
|
|
Monthly
|
|
15 days
|
||
Cash equivalents (c)
|
36
|
|
|
Daily
|
|
0-1 day
|
|
5
|
|
|
Daily
|
|
0-1 day
|
||
|
$
|
309
|
|
|
|
|
|
|
$
|
19
|
|
|
|
|
|
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
|
|
|
|
|
|
(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, 2018
and 2017 both were: daily,
32%
and monthly,
68%
. Redemption frequency for other benefits assets as of
December 31, 2018
were: daily,
27%
and monthly,
73%
and as of
December 31, 2017
were: daily,
26%
and monthly,
74%
.
|
(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
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||
Benefit obligation
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.31
|
%
|
|
3.74
|
%
|
|
4.26
|
%
|
|
4.34
|
%
|
|
3.72
|
%
|
|
4.22
|
%
|
Rate of compensation increase
|
3.50
|
|
|
3.50
|
|
|
3.50
|
|
|
NA
|
|
|
NA
|
|
|
NA
|
|
Net periodic pension/benefit cost (years ended)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.74
|
|
|
4.26
|
|
|
4.60
|
|
|
3.72
|
|
|
4.22
|
|
|
4.57
|
|
Expected return on plan assets
1
|
7.50
|
|
|
7.50
|
|
|
7.75
|
|
|
7.50
|
|
|
7.50
|
|
|
7.75
|
|
Rate of compensation increase
2
|
3.50
|
|
|
3.50
|
|
|
3.50
|
|
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
Pension benefits
|
|
Other benefits
|
||||||||||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
68,987
|
|
|
$
|
64,906
|
|
|
$
|
60,555
|
|
|
$
|
2,721
|
|
|
$
|
3,374
|
|
|
$
|
3,331
|
|
Interest cost
|
77,374
|
|
|
81,185
|
|
|
81,549
|
|
|
7,933
|
|
|
9,453
|
|
|
9,670
|
|
||||||
Expected return on plan assets
|
(108,953
|
)
|
|
(102,745
|
)
|
|
(98,559
|
)
|
|
(12,908
|
)
|
|
(12,326
|
)
|
|
(12,273
|
)
|
||||||
Amortization of net prior service (gain) cost
|
(42
|
)
|
|
(55
|
)
|
|
(57
|
)
|
|
(1,805
|
)
|
|
(1,793
|
)
|
|
(1,793
|
)
|
||||||
Amortization of net actuarial losses
|
30,084
|
|
|
26,496
|
|
|
24,832
|
|
|
95
|
|
|
1,130
|
|
|
804
|
|
||||||
Net periodic pension/benefit cost
|
67,450
|
|
|
69,787
|
|
|
68,320
|
|
|
(3,964
|
)
|
|
(162
|
)
|
|
(261
|
)
|
||||||
Impact of PUC D&Os
|
25,828
|
|
|
(18,004
|
)
|
|
(18,117
|
)
|
|
3,842
|
|
|
1,211
|
|
|
1,343
|
|
||||||
Net periodic pension/benefit cost (adjusted for impact of PUC D&Os)
|
$
|
93,278
|
|
|
$
|
51,783
|
|
|
$
|
50,203
|
|
|
$
|
(122
|
)
|
|
$
|
1,049
|
|
|
$
|
1,082
|
|
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
67,359
|
|
|
$
|
63,059
|
|
|
$
|
58,796
|
|
|
$
|
2,704
|
|
|
$
|
3,353
|
|
|
$
|
3,284
|
|
Interest cost
|
71,294
|
|
|
74,632
|
|
|
74,808
|
|
|
7,628
|
|
|
9,115
|
|
|
9,337
|
|
||||||
Expected return on plan assets
|
(102,368
|
)
|
|
(95,892
|
)
|
|
(91,633
|
)
|
|
(12,713
|
)
|
|
(12,147
|
)
|
|
(12,096
|
)
|
||||||
Amortization of net prior service (gain) cost
|
8
|
|
|
8
|
|
|
13
|
|
|
(1,803
|
)
|
|
(1,804
|
)
|
|
(1,803
|
)
|
||||||
Amortization of net actuarial losses
|
27,302
|
|
|
24,392
|
|
|
22,693
|
|
|
98
|
|
|
1,102
|
|
|
793
|
|
||||||
Net periodic pension/benefit cost
|
63,595
|
|
|
66,199
|
|
|
64,677
|
|
|
(4,086
|
)
|
|
(381
|
)
|
|
(485
|
)
|
||||||
Impact of PUC D&Os
|
25,828
|
|
|
(18,004
|
)
|
|
(18,117
|
)
|
|
3,842
|
|
|
1,211
|
|
|
1,343
|
|
||||||
Net periodic pension/benefit cost (adjusted for impact of PUC D&Os)
|
$
|
89,423
|
|
|
$
|
48,195
|
|
|
$
|
46,560
|
|
|
$
|
(244
|
)
|
|
$
|
830
|
|
|
$
|
858
|
|
|
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
|
15.4
|
|
|
—
|
|
|
14.3
|
|
|
—
|
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||
December 31
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
(in billions)
|
|
|
|
|
|
|
|
||||||||
Defined benefit plans -
ABOs
|
$
|
1.7
|
|
|
$
|
1.8
|
|
|
$
|
1.6
|
|
|
$
|
1.7
|
|
Defined benefit plans with ABO in excess of plan assets
|
|
|
|
|
|
|
|
||||||||
ABOs
|
1.6
|
|
|
1.7
|
|
|
1.6
|
|
|
1.7
|
|
||||
Plan assets
|
1.4
|
|
|
1.5
|
|
|
1.3
|
|
|
1.5
|
|
||||
Defined benefit plans with PBOs in excess of plan assets
|
|
|
|
|
|
|
|
||||||||
PBOs
|
1.9
|
|
|
2.0
|
|
|
1.8
|
|
|
1.9
|
|
||||
Plan assets
|
1.4
|
|
|
1.5
|
|
|
1.3
|
|
|
1.5
|
|
Note 10
·
Share-based compensation
|
(in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
HEI consolidated
|
|
|
|
|
|
||||||
Share-based compensation expense
1
|
$
|
7.8
|
|
|
$
|
5.4
|
|
|
$
|
4.8
|
|
Income tax benefit
|
1.1
|
|
|
1.9
|
|
|
1.6
|
|
|||
Hawaiian Electric consolidated
|
|
|
|
|
|
||||||
Share-based compensation expense
1
|
2.7
|
|
|
1.9
|
|
|
1.4
|
|
|||
Income tax benefit
|
0.5
|
|
|
0.7
|
|
|
0.5
|
|
1
|
For 2018, 2017 and 2016, the Company has not capitalized any share-based compensation.
|
(dollars in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Shares granted
|
38,821
|
|
|
35,770
|
|
|
19,846
|
|
|||
Fair value
|
$
|
1.3
|
|
|
$
|
1.2
|
|
|
$
|
0.6
|
|
Income tax benefit
|
0.3
|
|
|
0.5
|
|
|
0.2
|
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|||||||||
Outstanding, January 1
|
197,047
|
|
|
$
|
31.53
|
|
|
220,683
|
|
|
$
|
29.57
|
|
|
210,634
|
|
|
$
|
28.82
|
|
|||
Granted
|
93,853
|
|
|
34.12
|
|
|
97,873
|
|
|
33.47
|
|
|
114,431
|
|
|
29.70
|
|
||||||
Vested
|
(75,683
|
)
|
|
30.56
|
|
|
(92,147
|
)
|
|
28.88
|
|
|
(85,003
|
)
|
|
27.84
|
|
||||||
Forfeited
|
(14,859
|
)
|
|
32.35
|
|
|
(29,362
|
)
|
|
31.57
|
|
|
(19,379
|
)
|
|
29.82
|
|
||||||
Outstanding, December 31
|
200,358
|
|
|
$
|
33.05
|
|
|
197,047
|
|
|
$
|
31.53
|
|
|
220,683
|
|
|
$
|
29.57
|
|
|||
Total weighted-average grant-date fair value of shares granted (in millions)
|
$
|
3.2
|
|
|
|
|
$
|
3.3
|
|
|
|
|
$
|
3.4
|
|
|
|
(1)
|
Weighted-average grant-date fair value per share based on the average price of HEI common stock on the date of grant.
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|||||||||
Outstanding, January 1
|
32,904
|
|
|
$
|
39.51
|
|
|
83,106
|
|
|
$
|
22.95
|
|
|
162,500
|
|
|
$
|
27.66
|
|
|||
Granted
|
37,832
|
|
|
38.21
|
|
|
37,204
|
|
|
39.51
|
|
|
—
|
|
|
—
|
|
||||||
Vested (issued or unissued and cancelled)
|
—
|
|
|
—
|
|
|
(83,106
|
)
|
|
22.95
|
|
|
(78,553
|
)
|
|
32.69
|
|
||||||
Forfeited
|
(5,158
|
)
|
|
38.84
|
|
|
(4,300
|
)
|
|
39.51
|
|
|
(841
|
)
|
|
22.95
|
|
||||||
Outstanding, December 31
|
65,578
|
|
|
$
|
38.81
|
|
|
32,904
|
|
|
$
|
39.51
|
|
|
83,106
|
|
|
$
|
22.95
|
|
|||
Total weighted-average grant-date fair value of shares granted (in millions)
|
$
|
1.4
|
|
|
|
|
$
|
1.5
|
|
|
|
|
$
|
—
|
|
|
|
(1)
|
Weighted-average grant-date fair value per share determined using a Monte Carlo simulation model.
|
|
|
2018
|
|
|
2017
|
|
||
Risk-free interest rate
|
|
2.29
|
%
|
|
1.46
|
%
|
||
Expected life in years
|
|
3
|
|
|
3
|
|
||
Expected volatility
|
|
17.0
|
%
|
|
20.1
|
%
|
||
Range of expected volatility for Peer Group
|
|
15.1% to 26.2%
|
|
|
15.4% to 26.0%
|
|
||
Grant date fair value (per share)
|
|
$
|
38.20
|
|
|
$
|
39.51
|
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|
Shares
|
|
|
(1)
|
|||||||||
Outstanding, January 1
|
131,616
|
|
|
$
|
33.47
|
|
|
109,816
|
|
|
$
|
25.18
|
|
|
222,647
|
|
|
$
|
26.02
|
|
|||
Granted
|
151,328
|
|
|
34.12
|
|
|
148,818
|
|
|
33.47
|
|
|
—
|
|
|
—
|
|
||||||
Vested
|
—
|
|
|
—
|
|
|
(109,816
|
)
|
|
25.18
|
|
|
(109,097
|
)
|
|
26.89
|
|
||||||
Increase above target (cancelled)
|
13,858
|
|
|
33.49
|
|
|
—
|
|
|
—
|
|
|
(1,989
|
)
|
|
25.26
|
|
||||||
Forfeited
|
(20,633
|
)
|
|
33.80
|
|
|
(17,202
|
)
|
|
33.48
|
|
|
(1,745
|
)
|
|
25.19
|
|
||||||
Outstanding, December 31
|
276,169
|
|
|
$
|
33.80
|
|
|
131,616
|
|
|
$
|
33.47
|
|
|
109,816
|
|
|
$
|
25.18
|
|
|||
Total weighted-average grant-date fair value of shares granted (at target performance levels) (in millions)
|
$
|
5.2
|
|
|
|
|
$
|
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.
|
Note 11
·
Income taxes
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||||||||||
Years ended December 31
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Federal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Current
|
$
|
42,903
|
|
|
$
|
61,534
|
|
|
$
|
59,873
|
|
|
$
|
29,649
|
|
|
$
|
36,267
|
|
|
$
|
952
|
|
Deferred*
|
(6,099
|
)
|
|
33,967
|
|
|
43,666
|
|
|
(5,245
|
)
|
|
35,229
|
|
|
70,513
|
|
||||||
Deferred tax credits, net
|
(12
|
)
|
|
(20
|
)
|
|
268
|
|
|
(12
|
)
|
|
(20
|
)
|
|
268
|
|
||||||
|
36,792
|
|
|
95,481
|
|
|
103,807
|
|
|
24,392
|
|
|
71,476
|
|
|
71,733
|
|
||||||
State
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current
|
17,361
|
|
|
10,076
|
|
|
16,473
|
|
|
13,210
|
|
|
8,947
|
|
|
9,232
|
|
||||||
Deferred
|
(3,269
|
)
|
|
3,868
|
|
|
3,452
|
|
|
(2,737
|
)
|
|
2,808
|
|
|
3,873
|
|
||||||
Deferred tax credits, net
|
(87
|
)
|
|
(32
|
)
|
|
(37
|
)
|
|
(87
|
)
|
|
(32
|
)
|
|
(37
|
)
|
||||||
|
14,005
|
|
|
13,912
|
|
|
19,888
|
|
|
10,386
|
|
|
11,723
|
|
|
13,068
|
|
||||||
Total
|
$
|
50,797
|
|
|
$
|
109,393
|
|
|
$
|
123,695
|
|
|
$
|
34,778
|
|
|
$
|
83,199
|
|
|
$
|
84,801
|
|
*
|
The 2018 deferred income tax expense includes the final adjustment to reduce the provisional amount recorded in 2017 pursuant to Staff Accounting Bulletin No. 118 (SAB No. 118). See SAB No. 118 disclosure below for details of the accounting for the enactment of the Tax Act.
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||||||||||
Years ended December 31
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Amount at the federal statutory income tax rate
|
$
|
53,437
|
|
|
$
|
96,796
|
|
|
$
|
130,844
|
|
|
$
|
37,889
|
|
|
$
|
71,801
|
|
|
$
|
80,190
|
|
Increase (decrease) resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
State income taxes, net of federal income tax benefit
|
11,832
|
|
|
9,789
|
|
|
13,915
|
|
|
8,080
|
|
|
7,584
|
|
|
8,494
|
|
||||||
Net deferred tax asset (liability) adjustment related to the Tax Act
|
(9,540
|
)
|
|
13,420
|
|
|
—
|
|
|
(9,285
|
)
|
|
9,168
|
|
|
—
|
|
||||||
Other, net
|
(4,932
|
)
|
|
(10,612
|
)
|
|
(21,064
|
)
|
|
(1,906
|
)
|
|
(5,354
|
)
|
|
(3,883
|
)
|
||||||
Total
|
$
|
50,797
|
|
|
$
|
109,393
|
|
|
$
|
123,695
|
|
|
$
|
34,778
|
|
|
$
|
83,199
|
|
|
$
|
84,801
|
|
Effective income tax rate
|
20.0
|
%
|
|
39.6
|
%
|
|
33.1
|
%
|
|
19.3
|
%
|
|
40.6
|
%
|
|
37.0
|
%
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||
December 31
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||
Deferred tax assets
|
|
|
|
|
|
|
|
|
|
||||||
Regulatory liabilities, excluding amounts attributable to property, plant and equipment
|
$
|
104,868
|
|
|
$
|
104,984
|
|
|
$
|
104,868
|
|
|
$
|
104,984
|
|
Allowance for bad debts
|
14,647
|
|
|
16,192
|
|
|
659
|
|
|
1,812
|
|
||||
Other
|
46,036
|
|
|
24,397
|
|
|
26,522
|
|
|
11,253
|
|
||||
Total deferred tax assets
|
165,551
|
|
|
145,573
|
|
|
132,049
|
|
|
118,049
|
|
||||
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
||||||
Property, plant and equipment related
|
437,644
|
|
|
415,452
|
|
|
434,831
|
|
|
413,891
|
|
||||
Regulatory assets, excluding amounts attributable to property, plant and equipment
|
37,345
|
|
|
38,314
|
|
|
37,345
|
|
|
38,314
|
|
||||
Deferred RAM and RBA revenues
|
11,278
|
|
|
15,038
|
|
|
11,278
|
|
|
15,038
|
|
||||
Retirement benefits
|
20,173
|
|
|
32,952
|
|
|
25,430
|
|
|
38,020
|
|
||||
Other
|
31,629
|
|
|
32,247
|
|
|
6,362
|
|
|
6,827
|
|
||||
Total deferred tax liabilities
|
538,069
|
|
|
534,003
|
|
|
515,246
|
|
|
512,090
|
|
||||
Net deferred income tax liability
|
$
|
372,518
|
|
|
$
|
388,430
|
|
|
$
|
383,197
|
|
|
$
|
394,041
|
|
|
HEI consolidated
|
|
Hawaiian Electric consolidated
|
||||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Unrecognized tax benefits, January 1
|
$
|
4.0
|
|
|
$
|
3.8
|
|
|
$
|
3.6
|
|
|
$
|
3.5
|
|
|
$
|
3.8
|
|
|
3.6
|
|
|
Additions based on tax positions taken during the year
|
0.3
|
|
|
0.9
|
|
|
—
|
|
|
0.3
|
|
|
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
|
0.1
|
|
|
—
|
|
|
0.3
|
|
|
0.1
|
|
|
—
|
|
|
0.3
|
|
||||||
Reductions for tax positions of prior years
|
(0.1
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
(0.5
|
)
|
|
—
|
|
||||||
Lapses of statute of limitations
|
(2.2
|
)
|
|
—
|
|
|
—
|
|
|
(2.2
|
)
|
|
—
|
|
|
—
|
|
||||||
Unrecognized tax benefits, December 31
|
$
|
2.1
|
|
|
$
|
4.0
|
|
|
$
|
3.8
|
|
|
$
|
1.6
|
|
|
$
|
3.5
|
|
|
$
|
3.8
|
|
Note 12
·
Cash flows
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in millions)
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information
|
|
|
|
|
|
|
|
|
|||
HEI consolidated
|
|
|
|
|
|
||||||
Interest paid to non-affiliates, net of amounts capitalized
|
$
|
102
|
|
|
$
|
83
|
|
|
$
|
84
|
|
Income taxes paid (including refundable credits)
|
72
|
|
|
55
|
|
|
55
|
|
|||
Income taxes refunded (including refundable credits)
|
34
|
|
|
1
|
|
|
45
|
|
|||
Hawaiian Electric consolidated
|
|
|
|
|
|
||||||
Interest paid to non-affiliates, net of amounts capitalized
|
73
|
|
|
63
|
|
|
62
|
|
|||
Income taxes paid (including refundable credits)
|
64
|
|
|
26
|
|
|
1
|
|
|||
Income taxes refunded (including refundable credits)
|
31
|
|
|
—
|
|
|
20
|
|
|||
Supplemental disclosures of noncash activities
|
|
|
|
|
|
|
|
|
|||
HEI consolidated
|
|
|
|
|
|
||||||
Property, plant and equipment
|
|
|
|
|
|
||||||
Unpaid invoices and accruals for capital expenditures,
|
|
|
|
|
|
||||||
balance, end of period (investing)
|
59
|
|
|
38
|
|
|
84
|
|
|||
Common stock dividends reinvested in HEI common stock (financing)
1
|
—
|
|
|
—
|
|
|
17
|
|
|||
Loans transferred from held for investment to held for sale (investing)
|
1
|
|
|
41
|
|
|
24
|
|
|||
Real estate acquired in settlement of loans (investing)
|
—
|
|
|
—
|
|
|
1
|
|
|||
Real estate transferred from property, plant and equipment to other assets held-for-sale (investing)
|
—
|
|
|
—
|
|
|
1
|
|
|||
Common stock issued (gross) for director and executive/management compensation (financing)
2
|
4
|
|
|
11
|
|
|
7
|
|
|||
Obligations to fund low income housing investments, net (investing)
|
12
|
|
|
13
|
|
|
—
|
|
|||
Transfer of retail repurchase agreements to deposit liabilities (financing)
|
102
|
|
|
—
|
|
|
—
|
|
|||
Hawaiian Electric consolidated
|
|
|
|
|
|
||||||
Electric utility property, plant and equipment
|
|
|
|
|
|
|
|
|
|||
Unpaid invoices and accruals for capital expenditures,
|
|
|
|
|
|
||||||
balance, end of period (investing)
|
44
|
|
|
38
|
|
|
84
|
|
|||
HEI Consolidated and Hawaiian Electric consolidated
|
|
|
|
|
|
||||||
Electric utility property, plant and equipment
|
|
|
|
|
|
||||||
Estimated fair value of noncash contributions in aid of construction (investing)
|
14
|
|
|
18
|
|
|
28
|
|
|||
Acquisition of Hawaiian Telcom’s interest in joint poles (investing)
|
48
|
|
|
—
|
|
|
—
|
|
1
|
The amounts shown represents common stock dividends reinvested in HEI common stock under the HEI DRIP in noncash transactions.
|
Note 13
·
Regulatory restrictions on net assets
|
Note 14
·
Significant group concentrations of credit risk
|
Note 15
·
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, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale investment securities
|
$
|
1,388,533
|
|
|
$
|
—
|
|
|
$
|
1,364,897
|
|
|
$
|
23,636
|
|
|
$
|
1,388,533
|
|
Held-to-maturity investment securities
|
141,875
|
|
|
—
|
|
|
142,057
|
|
|
—
|
|
|
142,057
|
|
|||||
Stock in Federal Home Loan Bank
|
9,958
|
|
|
—
|
|
|
9,958
|
|
|
—
|
|
|
9,958
|
|
|||||
Loans, net
|
4,792,707
|
|
|
—
|
|
|
1,809
|
|
|
4,800,244
|
|
|
4,802,053
|
|
|||||
Mortgage servicing rights
|
8,062
|
|
|
—
|
|
|
—
|
|
|
13,618
|
|
|
13,618
|
|
|||||
Derivative assets
|
10,180
|
|
|
—
|
|
|
91
|
|
|
—
|
|
|
91
|
|
|||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
HEI consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposit liabilities
1
|
827,841
|
|
|
—
|
|
|
817,667
|
|
|
—
|
|
|
817,667
|
|
|||||
Short-term borrowings—other than bank
|
73,992
|
|
|
—
|
|
|
73,992
|
|
|
—
|
|
|
73,992
|
|
|||||
Other bank borrowings
|
110,040
|
|
|
—
|
|
|
110,037
|
|
|
—
|
|
|
110,037
|
|
|||||
Long-term debt, net—other than bank
|
1,879,641
|
|
|
—
|
|
|
1,904,261
|
|
|
—
|
|
|
1,904,261
|
|
|||||
Derivative liabilities
|
34,132
|
|
|
34
|
|
|
596
|
|
|
—
|
|
|
630
|
|
|||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
25,000
|
|
|
—
|
|
|
25,000
|
|
|
—
|
|
|
25,000
|
|
|||||
Long-term debt, net
|
1,418,802
|
|
|
—
|
|
|
1,443,968
|
|
|
—
|
|
|
1,443,968
|
|
|||||
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, 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
1
|
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
|
2018
|
|
2017
|
||||||||||||||||||||
|
Fair value measurements using
|
|
Fair value measurements using
|
||||||||||||||||||||
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Available-for-sale investment securities (bank segment)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies
|
$
|
—
|
|
|
$
|
1,161,416
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,201,473
|
|
|
$
|
—
|
|
U.S. Treasury and federal agency obligations
|
—
|
|
|
154,349
|
|
|
—
|
|
|
—
|
|
|
184,298
|
|
|
—
|
|
||||||
Corporate bonds
|
—
|
|
|
49,132
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Mortgage revenue bonds
|
—
|
|
|
—
|
|
|
23,636
|
|
|
—
|
|
|
—
|
|
|
15,427
|
|
||||||
|
$
|
—
|
|
|
$
|
1,364,897
|
|
|
$
|
23,636
|
|
|
$
|
—
|
|
|
$
|
1,385,771
|
|
|
$
|
15,427
|
|
Derivative assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate lock commitments (bank segment)
1
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
133
|
|
|
$
|
—
|
|
Forward commitments (bank segment)
1
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||||
Window forward contracts (electric utility segment)
2
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
256
|
|
|
—
|
|
||||||
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
393
|
|
|
$
|
—
|
|
Derivative liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate lock commitments (bank segment)
1
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
Forward commitments (bank segment)
1
|
34
|
|
|
9
|
|
|
—
|
|
|
20
|
|
|
8
|
|
|
—
|
|
||||||
Interest rate swap (Other segment)
3
|
—
|
|
|
587
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
$
|
34
|
|
|
$
|
596
|
|
|
$
|
—
|
|
|
$
|
20
|
|
|
$
|
10
|
|
|
$
|
—
|
|
1
|
Derivatives are carried at fair value in other assets or other liabilities in the balance sheets with changes in value included in mortgage banking income.
|
2
|
Derivatives were included in regulatory assets and/or liabilities in the balance sheets in 2017.
|
3
|
Derivatives are included in Other liabilities in the balance sheets.
|
(in thousands)
|
2018
|
|
2017
|
|
||
Mortgage revenue bonds
|
|
|
||||
Balance, January 1
|
$
|
15,427
|
|
$
|
15,427
|
|
Principal payments received
|
—
|
|
—
|
|
||
Purchases
|
8,209
|
|
—
|
|
||
Unrealized gain (loss) included in other comprehensive income
|
—
|
|
—
|
|
||
Balance, December 31
|
$
|
23,636
|
|
$
|
15,427
|
|
|
|
|
Fair value measurements using
|
||||||||||||
(in thousands)
|
Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
77
|
|
Real estate acquired in settlement of loans
|
186
|
|
|
—
|
|
|
—
|
|
|
186
|
|
||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Loans
|
2,621
|
|
|
—
|
|
|
—
|
|
|
2,621
|
|
|
|
|
|
|
|
|
Significant unobservable
input value (1)
|
||||
(dollars in thousands)
|
Fair value
|
|
Valuation technique
|
|
Significant unobservable input
|
|
Range
|
|
Weighted
Average |
||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||
Home equity line of credit
|
$
|
77
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling cost
|
|
|
|
N/A (2)
|
Total loans
|
$
|
77
|
|
|
|
|
|
|
|
|
|
Real estate acquired in settlement of loans
|
$
|
186
|
|
|
Fair value of property or collateral
|
|
Appraised value less 7% selling cost
|
|
|
|
N/A (2)
|
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
|
|
|
|
|
|
|
|
|
|
(1)
|
Represent percent of outstanding principal balance.
|
(2)
|
N/A - Not applicable. There is one asset in each fair value measurement type.
|
Note 16
·
Termination of proposed merger and other matters
|
Note 17
·
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
|
|
|
|
|
|
|
|
|
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
645,874
|
|
|
$
|
685,277
|
|
|
$
|
768,048
|
|
|
$
|
761,650
|
|
|
$
|
2,860,849
|
|
Operating income
1
|
71,889
|
|
|
78,799
|
|
|
98,064
|
|
|
84,604
|
|
|
333,356
|
|
|||||
Net income
|
40,720
|
|
|
46,527
|
|
|
66,371
|
|
|
50,046
|
|
|
203,664
|
|
|||||
Net income for common stock
|
40,247
|
|
|
46,054
|
|
|
65,900
|
|
|
49,573
|
|
|
201,774
|
|
|||||
Basic earnings per common share
2
|
0.37
|
|
|
0.42
|
|
|
0.61
|
|
|
0.46
|
|
|
1.85
|
|
|||||
Diluted earnings per common share
3
|
0.37
|
|
|
0.42
|
|
|
0.60
|
|
|
0.45
|
|
|
1.85
|
|
|||||
Dividends per common share
|
0.31
|
|
|
0.31
|
|
|
0.31
|
|
|
0.31
|
|
|
1.24
|
|
|||||
2017
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
591,562
|
|
|
$
|
632,281
|
|
|
$
|
673,185
|
|
|
$
|
658,597
|
|
|
$
|
2,555,625
|
|
Operating income
1
|
69,738
|
|
|
77,802
|
|
|
111,473
|
|
|
87,220
|
|
|
346,233
|
|
|||||
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
2
|
0.31
|
|
|
0.36
|
|
|
0.55
|
|
|
0.30
|
|
|
1.52
|
|
|||||
Diluted earnings per common share
3
|
0.31
|
|
|
0.36
|
|
|
0.55
|
|
|
0.30
|
|
|
1.52
|
|
|||||
Dividends per common share
|
0.31
|
|
|
0.31
|
|
|
0.31
|
|
|
0.31
|
|
|
1.24
|
|
|||||
Hawaiian Electric consolidated
|
|
|
|
|
|
|
|
|
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
570,427
|
|
|
$
|
608,126
|
|
|
$
|
687,409
|
|
|
$
|
680,563
|
|
|
$
|
2,546,525
|
|
Operating income
1
|
51,369
|
|
|
55,144
|
|
|
74,036
|
|
|
61,112
|
|
|
241,661
|
|
|||||
Net income
|
27,974
|
|
|
31,668
|
|
|
50,210
|
|
|
35,796
|
|
|
145,648
|
|
|||||
Net income for common stock
|
27,475
|
|
|
31,169
|
|
|
49,712
|
|
|
35,297
|
|
|
143,653
|
|
|||||
2017
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
518,611
|
|
|
$
|
556,875
|
|
|
$
|
598,769
|
|
|
$
|
583,311
|
|
|
2,257,566
|
|
|
Operating income
1
|
50,361
|
|
|
56,482
|
|
|
88,497
|
|
|
68,184
|
|
|
263,524
|
|
|||||
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
|
|
1
|
The Company and Hawaiian Electric adopted ASU No. 2017-07 in the first quarter of 2018: (1) retrospectively for the presentation in the income statement of the service cost component and the other components of NPPC and NPBC, and (2) prospectively for the capitalization in assets of the service cost component of NPPC and NPBC for Hawaiian Electric and its subsidiaries. See Note 1.
|
2
|
The quarterly basic earnings per common share are based upon the weighted-average number of shares of common stock outstanding in each quarter.
|
3
|
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.
|
4
|
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.
|
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 II directors whose terms expire at the 2022 Annual Meeting”
|
•
|
“Nominee for Class III director whose term expires at the 2020 Annual Meeting”
|
•
|
“Continuing Class III directors whose terms expire at the 2020 Annual Meeting”
|
•
|
“Continuing Class I directors whose terms expire at the 2021 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 “2017-19 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, 2017; and
|
•
|
Information concerning compensation paid to directors of Hawaiian Electric who are also directors of HEI under the section of HEI’s 2019 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
|
555,172
|
|
|
$
|
—
|
|
|
2,704,852
|
|
Equity compensation plans not approved by shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
555,172
|
|
|
$
|
—
|
|
|
2,704,852
|
|
EIP
|
|
|
142,100
|
|
Restricted stock units plus estimated compounded dividend equivalents (if applicable) *
|
413,072
|
|
Shares to be issued in February 2020 and 2021 under the 2017-2019 and 2018-2020 LTIPs, respectively, plus compounded dividend equivalents
|
555,172
|
|
|
*
|
Under the amended EIP as of
December 31, 2018
, 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, 2018
for future awards, including 2,658,245 shares available for future awards under the amended EIP and 46,607 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, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016
|
|
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, 2018, 2017 and 2016
|
|
||
NA Not applicable.
|
|
|
|
|
December 31
|
2018
|
|
|
2017
|
|
||
(dollars in thousands)
|
|
|
|
|
|
||
Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
3,742
|
|
|
$
|
11,702
|
|
Accounts receivable
|
2,604
|
|
|
2,347
|
|
||
Notes receivable
|
20,789
|
|
|
—
|
|
||
Property, plant and equipment, net
|
3,456
|
|
|
3,910
|
|
||
Deferred income tax assets
|
10,147
|
|
|
8,710
|
|
||
Other assets
|
11,963
|
|
|
15,480
|
|
||
Investments in subsidiaries, at equity
|
2,605,038
|
|
|
2,466,342
|
|
||
Total assets
|
$
|
2,657,739
|
|
|
$
|
2,508,491
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
2,001
|
|
|
$
|
561
|
|
Interest payable
|
3,476
|
|
|
2,319
|
|
||
Notes payable to subsidiaries
|
34
|
|
|
1,918
|
|
||
Commercial paper
|
48,992
|
|
|
62,993
|
|
||
Short-term debt, net
|
—
|
|
|
49,953
|
|
||
Long-term debt, net
|
398,874
|
|
|
249,588
|
|
||
Retirement benefits liability
|
29,565
|
|
|
31,518
|
|
||
Other
|
12,517
|
|
|
12,255
|
|
||
Total liabilities
|
495,459
|
|
|
411,105
|
|
||
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: 108,879,245
shares and 108,787,807 shares at December 31, 2018 and 2017, respectively |
1,669,267
|
|
|
1,662,491
|
|
||
Retained earnings
|
543,623
|
|
|
476,836
|
|
||
Accumulated other comprehensive loss
|
(50,610
|
)
|
|
(41,941
|
)
|
||
Total shareholders’ equity
|
2,162,280
|
|
|
2,097,386
|
|
||
Total liabilities and shareholders’ equity
|
$
|
2,657,739
|
|
|
$
|
2,508,491
|
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in thousands)
|
|
|
|
|
|
|
|
|
|||
Revenues
|
$
|
429
|
|
|
$
|
798
|
|
|
$
|
647
|
|
Equity in net income of subsidiaries
|
226,972
|
|
|
187,097
|
|
|
199,485
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
||||
Operating, administrative and general
|
19,515
|
|
|
16,578
|
|
|
17,515
|
|
|||
Depreciation of property, plant and equipment
|
597
|
|
|
548
|
|
|
566
|
|
|||
Taxes, other than income taxes
|
509
|
|
|
496
|
|
|
4,726
|
|
|||
Total expenses
|
20,621
|
|
|
17,622
|
|
|
22,807
|
|
|||
Income before merger termination fee, interest expense and income (taxes) benefits
|
206,780
|
|
|
170,273
|
|
|
177,325
|
|
|||
Merger termination fee
|
—
|
|
|
—
|
|
|
90,000
|
|
|||
Income before interest expense and income (taxes) benefits
|
206,780
|
|
|
170,273
|
|
|
267,325
|
|
|||
Retirement defined benefits expense—other than service costs
|
674
|
|
|
1,119
|
|
|
1,186
|
|
|||
Interest expense
|
12,664
|
|
|
9,389
|
|
|
9,037
|
|
|||
Income before income (taxes) benefits
|
193,442
|
|
|
159,765
|
|
|
257,102
|
|
|||
Income (taxes) benefits
|
8,332
|
|
|
5,532
|
|
|
(8,846
|
)
|
|||
Net income
|
$
|
201,774
|
|
|
$
|
165,297
|
|
|
$
|
248,256
|
|
Years ended December 31
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(in thousands)
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
135,470
|
|
|
$
|
99,600
|
|
|
$
|
191,710
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Increase in note receivable from subsidiary
|
(20,596
|
)
|
|
(70,000
|
)
|
|
—
|
|
|||
Decrease in note receivable from subsidiary
|
—
|
|
|
66,391
|
|
|
—
|
|
|||
Capital expenditures
|
(143
|
)
|
|
(317
|
)
|
|
(212
|
)
|
|||
Investments in subsidiaries
|
(71,970
|
)
|
|
(22,353
|
)
|
|
(24,000
|
)
|
|||
Other
|
140
|
|
|
(177
|
)
|
|
1
|
|
|||
Net cash used in investing activities
|
(92,569
|
)
|
|
(26,456
|
)
|
|
(24,211
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Net increase (decrease) in notes payable to subsidiaries with original maturities of three months or less
|
(30
|
)
|
|
98
|
|
|
(618
|
)
|
|||
Net increase (decrease) in short-term borrowings with original maturities of three months or less
|
(14,000
|
)
|
|
62,993
|
|
|
(103,063
|
)
|
|||
Proceeds from issuance of short-term debt
|
—
|
|
|
125,000
|
|
|
—
|
|
|||
Repayment of short-term debt
|
(50,000
|
)
|
|
(75,000
|
)
|
|
—
|
|
|||
Proceeds from issuance of long-term debt
|
150,000
|
|
|
150,000
|
|
|
75,000
|
|
|||
Repayment of long-term debt
|
—
|
|
|
(200,000
|
)
|
|
(75,000
|
)
|
|||
Withheld shares for employee taxes on vested share-based compensation
|
(996
|
)
|
|
(3,828
|
)
|
|
(2,416
|
)
|
|||
Net proceeds from issuance of common stock
|
—
|
|
|
—
|
|
|
13,220
|
|
|||
Common stock dividends
|
(134,987
|
)
|
|
(134,873
|
)
|
|
(117,274
|
)
|
|||
Other
|
(848
|
)
|
|
(756
|
)
|
|
2,460
|
|
|||
Net cash used in financing activities
|
(50,861
|
)
|
|
(76,366
|
)
|
|
(207,691
|
)
|
|||
Net decrease in cash and equivalents
|
(7,960
|
)
|
|
(3,222
|
)
|
|
(40,192
|
)
|
|||
Cash and cash equivalents, January 1
|
11,702
|
|
|
14,924
|
|
|
55,116
|
|
|||
Cash and cash equivalents, December 31
|
$
|
3,742
|
|
|
$
|
11,702
|
|
|
$
|
14,924
|
|
December 31
|
2018
|
|
|
2017
|
|
||
(dollars in thousands)
|
|
|
|
|
|
||
HEI 2.99% term loan, due 2022
|
$
|
150,000
|
|
|
$
|
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 4.58% senior notes, due 2025
|
50,000
|
|
|
—
|
|
||
HEI 4.72% senior notes, due 2028
|
100,000
|
|
|
—
|
|
||
Less unamortized debt issuance costs
|
(1,126
|
)
|
|
(412
|
)
|
||
Long-term debt, net
|
$
|
398,874
|
|
|
$
|
249,588
|
|
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
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for uncollectible accounts – electric utility
|
$
|
1,178
|
|
|
$
|
2,474
|
|
|
$
|
(4,099
|
)
|
(a), (c)
|
|
$
|
(1,927
|
)
|
(b),(c)
|
|
$
|
1,480
|
|
Allowance for uncollectible interest – bank
|
$
|
367
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
|
$
|
—
|
|
|
|
$
|
373
|
|
Allowance for losses for loans – bank
|
$
|
53,637
|
|
|
$
|
14,745
|
|
(d)
|
$
|
4,254
|
|
(a)
|
|
$
|
20,517
|
|
(b)
|
|
$
|
52,119
|
|
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 – 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 – bank
|
$
|
50,038
|
|
|
$
|
16,763
|
|
(d)
|
$
|
2,977
|
|
(a)
|
|
$
|
14,245
|
|
(b)
|
|
$
|
55,533
|
|
Deferred tax valuation allowance – HEI
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
16
|
|
|
|
$
|
38
|
|
(a)
|
Primarily recoveries.
|
(b)
|
Bad debts charged off.
|
(c)
|
Reclass (reversal) of allowance for one customer account into other long term assets in 2018, 2017 and 2016 were
$(4,934)
,
$841
, and
$1,790
, respectively.
|
(d)
|
Represents provision for loan loss.
|
Exhibit no.
|
Description
|
Form
|
File Number
|
Exhibit #
|
Filing date
|
|
|
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
|
|
|
10.1(i)
|
10-Q
|
1-4955
|
10
|
11/4/16
|
Exhibit no.
|
Description
|
Form
|
File Number
|
Exhibit #
|
Filing date
|
|
|
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
|
|
|
10.2(f)
|
10-Q
|
1-4955
|
10
|
5/10/18
|
|
|
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-K
|
1-4955
|
10.4(d)
|
3/1/18
|
|
|
10.5
|
10-Q
|
1-4955
|
10.1
|
5/4/16
|
|
*
|
10.5(a)
|
|
|
|
|
|
|
10.6
|
10-Q
|
1-4955
|
10.2
|
5/4/16
|
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, Chief Financial Officer
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
and Treasurer
|
|
|
|
(Principal Financial Officer of Hawaiian Electric)
|
|
|
(Principal Financial Officer of HEI)
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
|
February 28, 2019
|
|
Date:
|
|
February 28, 2019
|
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, Chief Financial Officer and
|
Gregory C. Hazelton
|
|
Treasurer of HEI (Principal Financial Officer)
|
|
|
|
|
|
|
/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/ Paul K. Ito
|
|
Vice President, Tax, Controller & Assistant Treasurer
|
Paul K. Ito
|
|
of HEI (Chief Accounting Officer of HEI)
|
|
|
|
|
|
|
/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
|
|
|
Preamble
|
1
|
Article 1 - General
|
1-1
|
1.1. Plan
|
1-1
|
1.2. Effective Dates
|
1-1
|
1.3. Amounts Not Subject to Code Section 409A
|
1-1
|
Article 2 - Definitions
|
2-1
|
2.1. Account
|
2-1
|
2.2. Administrator
|
2-1
|
2.3. Adoption Agreement
|
2-1
|
2.4. Beneficiary
|
2-1
|
2.5. Board of Directors
|
2-1
|
2.6. Bonus
|
2-1
|
2.7. Change in Control
|
2-1
|
2.8. Code
|
2-1
|
2.9. Compensation
|
2-1
|
2.10. Director
|
2-2
|
2.11. Disability
|
2-2
|
2.12. Eligible Employee
|
2-2
|
2.13. Employer
|
2-2
|
2.14. ERISA
|
2-2
|
2.15. Identification Date
|
2-2
|
2.16. Key Employee
|
2-2
|
2.17. Participant
|
2-2
|
2.18. Plan
|
2-2
|
2.19. Plan Sponsor
|
2-2
|
2.20. Plan Year
|
2-2
|
2.21. Related Employer
|
2-3
|
2.22. Retirement
|
2-3
|
2.23. Separation from Service
|
2-3
|
2.24. Unforeseeable Emergency
|
2-4
|
2.25. Valuation Date
|
2-4
|
2.26. Years of Service
|
2-4
|
Article 3 - Participation
|
3-1
|
3.1. Participation
|
3-1
|
3.2. Termination of Participation
|
3-1
|
Article 4 - Participant Elections
|
4-1
|
4.1. Deferral Agreement
|
4-1
|
4.2. Amount of Deferral
|
4-1
|
4.3. Timing of Election to Defer
|
4-1
|
4.4. Election of Payment Schedule and Form of Payment
|
4-2
|
Article 5 - Employer Contributions
|
5-1
|
5.1. Matching Contributions
|
5-1
|
5.2. Other Contributions
|
5-1
|
Article 6 - Accounts and Credits
|
6-1
|
6.1. Establishment of Account
|
6-1
|
6.2. Credits to Account
|
6-1
|
Article 7 - Investment of Contributions
|
7-1
|
7.1. Investment Options
|
7-1
|
7.2. Adjustment of Accounts
|
7-1
|
Article 8 - Right to Benefits
|
8-1
|
8.1. Vesting
|
8-1
|
8.2. Death
|
8-1
|
8.3. Disability
|
8-1
|
Article 9 - Distribution of Benefits
|
9-1
|
9.1. Amount of Benefits
|
9-1
|
9.2. Method and Timing of Distributions
|
9-1
|
9.3. Unforeseeable Emergency
|
9-1
|
9.4. Payment Election Overrides
|
9-2
|
9.5. Cashouts of Amounts Not Exceeding Stated Limit
|
9-2
|
9.6. Required Delay in Payment to Key Employees
|
9-2
|
9.7. Change in Control
|
9-3
|
9.8. Permissible Delays in Payment
|
9-6
|
9.9. Permitted Acceleration of Payment
|
9-7
|
Article 10 - Amendment and Termination
|
10-1
|
10.1. Amendment by Plan Sponsor
|
10-1
|
10.2. Plan Termination Following Change in Control or Corporate Dissolution
|
10-1
|
10.3. Other Plan Terminations
|
10-1
|
Article 11 - The Trust
|
11-1
|
11.1. Establishment of Trust
|
11-1
|
11.2. Rabbi Trust
|
11-1
|
11.3. Investment of Trust Funds
|
11-1
|
Article 12 - Plan Administration
|
12-1
|
12.1. Powers and Responsibilities of the Administrator
|
12-1
|
12.2. Claims and Review Procedures
|
12-2
|
12.3. Plan Administrative Costs
|
12-3
|
Article 13 - Miscellaneous
|
13-1
|
13.1. Unsecured General Creditor of the Employer
|
13-1
|
13.2. Employer’s Liability
|
13-1
|
13.3. Limitation of Rights
|
13-1
|
13.4. Anti-Assignment
|
13-1
|
13.5. Facility of Payment
|
13-2
|
13.6. Notices
|
13-2
|
13.7. Tax Withholding
|
13-2
|
13.8. Indemnification
|
13-3
|
13.9. Successors
|
13-4
|
13.10. Disclaimer
|
13-4
|
13.11. Governing Law
|
13-4
|
(a)
|
Original Effective Date.
The Original Effective Date is the date as of which the Plan was initially adopted.
|
(b)
|
Amendment Effective Date.
The Amendment Effective Date is the date specified in the Adoption Agreement as of which the Plan is amended and restated. Except to the extent otherwise provided herein or in the Adoption Agreement, the Plan shall apply to amounts deferred and benefit payments made on or after the Amendment Effective Date.
|
(c)
|
Special Effective Date.
A Special Effective Date may apply to any given provision if so specified in Appendix A of the Adoption Agreement. A Special Effective Date will control over the Original Effective Date or Amendment Effective Date, whichever is applicable, with respect to such provision of the Plan.
|
(a)
|
If the Plan Sponsor has elected to permit annual distribution elections in accordance with Section 6.01(h) of the Adoption Agreement the following rules apply. At the time an Eligible Employee or Director completes a deferral agreement, the Eligible Employee or Director must elect a distribution event (which includes a specified time) and a form of payment for the Compensation subject to the deferral agreement from among the options the Plan Sponsor has made available for this purpose and which are specified in 6.01(b) of the Adoption Agreement. Prior to the time required by Treas. Reg. § 1.409A-2, the Eligible Employee or Director shall elect a distribution event (which includes a specified time) and a form of payment for any Employer contributions that may be credited to the Participant’s Account during the Plan Year. If an Eligible Employee or Director fails to elect a distribution event, he or she shall be deemed to have elected Separation from Service as the distribution event. If he or she fails to elect a form of payment, he or she shall be deemed to have elected a lump sum form of payment.
|
(b)
|
If the Plan Sponsor has elected not to permit annual distribution elections in accordance with Section 6.01(h) of the Adoption Agreement the following rules apply. At the time an Eligible Employee or Director first completes a deferral agreement but in no event later than the time required by Treas. Reg. § 1.409A-2, the Eligible Employee or Director must elect a distribution event (which includes a specified time) and a form of payment for amounts credited to his or her Account from among the options the Plan Sponsor has made available for this purpose and which are specified in Section 6.01(b) of the Adoption Agreement. If an Eligible Employee or Director fails to elect a distribution event, he or she shall be deemed to have elected Separation from Service in the distribution event. If he or she fails to elect a form of payment, he or she shall be deemed to have elected a lump sum form of payment.
|
(a)
|
A Participant is treated as a Key Employee if: (i) he or she is employed by a Related Employer any of whose stock is publicly traded on an established securities market, and (ii) he or she satisfies the requirements of Code Section 416(i)(1)(A)(i), (ii) or (iii), determined without regard to Code Section 416(i)(5), at any time during the twelve month period ending on the Identification Date.
|
(b)
|
A Participant who is a Key Employee on an Identification Date shall be treated as a Key Employee for purposes of the six month delay in distributions for the twelve month period beginning on the first day of a month no later than the fourth month following the Identification Date. The Identification Date and the effective date of the delay in distributions shall be determined in accordance with Section 1.06 of the Adoption Agreement.
|
(c)
|
The Plan Sponsor may elect to apply an alternative method to identify Participants who will be treated as Key Employees for purposes of the six month delay in distributions if the method satisfies each of the following requirements: (i) is reasonably designed to include all Key Employees, (ii) is an objectively determinable standard providing no direct or indirect election to any Participant regarding its application, and (iii) results in either all Key Employees or no more than 200 Key Employees being identified in the class as of any date. Use of an alternative method that satisfies the requirements of this Section 9.6(c) will not be treated as a change in the time and form of payment for purposes of Treas. Reg. § 1.409A-2(b).
|
(d)
|
The six month delay does not apply to payments described in Section 9.9(a), (b) or (d) or to payments that occur after the death of the Participant. If the payment of all or any portion of the Participant’s vested Account is being delayed in accordance with this Section 9.6 at the time he or she incurs a Disability which would otherwise require a distribution under the terms of the Plan, no amount shall be paid until the expiration of the six month period of delay required by this Section 9.6.
|
(a)
|
Relevant Corporations.
To constitute a Change in Control for purposes of the Plan, the event must relate to: (i) the corporation for whom the Participant is performing services at the time of the Change in Control, (ii) the corporation that is liable for the payment of the Participant’s benefits under the Plan (or all corporations liable if more than one corporation is liable) but only if either the deferred compensation is attributable to the performance of services by the Participant for such corporation (or corporations) or there is a bona fide business purpose for such corporation (or corporations) to be liable for such payment and, in either case, no significant purpose of making such corporation (or corporations) liable for such payment is the avoidance of federal income tax, or (iii) a corporation that is a majority shareholder of a corporation identified in (i) or (ii), or any corporation in a chain of corporations in which each corporation is a majority shareholder of another corporation in the chain, ending in a corporation identified in (i) or (ii). A majority shareholder is defined as a shareholder owning more than fifty percent (50%) of the total fair market value and voting power of such corporation.
|
(b)
|
Stock Ownership.
Code Section 318(a) applies for purposes of determining stock ownership. Stock underlying a vested option is considered owned by the individual who owns the vested option (and the stock underlying an unvested option is not considered owned by the individual who holds the unvested option). If, however, a vested option is exercisable for stock that is not substantially vested (as defined by Treas. Reg. § 1.83-3(b) and (j)) the stock underlying the option is not treated as owned by the individual who holds the option.
|
(c)
|
Change in the Ownership of a Corporation.
A change in the ownership of a corporation occurs on the date that any one person or more than one person acting as a group, acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of such corporation. If any one person or more than one person acting as a group is considered to own more than fifty percent (50%) of the total fair market value or total voting power of the stock of a corporation, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the corporation (or to cause a change in the effective control of the corporation as discussed below in Section 9.7(d)). An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the corporation acquires its stock in exchange for property will be treated as an acquisition of stock. Section 9.7(c) applies only when there is a transfer of stock of a corporation (or issuance of stock of a corporation) and stock in such corporation remains outstanding after the transaction. For purposes of this Section 9.7(c), persons will not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time or as a result of a public offering. Persons will, however, be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the corporation. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only with respect to ownership in that corporation prior to the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
|
(d)
|
Change in the Effective Control of a Corporation.
A change in the effective control of a corporation occurs on the date that either (i) any one person, or more than one person acting as a group, acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the corporation possessing thirty percent (30%) or more of the total voting power of the stock of such corporation, or (ii) a majority of members of the corporation’s Board of Directors is replaced during any twelve month period by Directors whose appointment or election is not endorsed by a majority of the members of the corporation’s Board of Directors prior to the date of the appointment or election, provided that for purposes of this paragraph (ii), the term corporation refers solely to the relevant corporation identified in Section 9.7(a) for which no other corporation is a majority shareholder for purposes of Section 9.7(a). In the absence of an event described in Section 9.7(d)(i) or (ii), a change in the effective control of a corporation will not have occurred. A change in effective control may also occur in any transaction in which either of the two corporations involved in the transaction has a change in the ownership of such corporation as described in Section 9.7(c) or a change in the ownership of a substantial portion of the assets of such corporation as described in Section 9.7(e). If any one person, or more than one person acting as a group, is considered to effectively control a corporation within the meaning of this Section 9.7(d), the acquisition of additional control of the corporation by the same person or persons is not considered to cause a change in the effective control of the corporation or to cause a change in the ownership of the corporation within the meaning of Section 9.7(c). For purposes of this Section 9.7(d), persons will or will not be considered to be acting as a group in accordance with rules similar to those set forth in Section 9.7(c) with the following exception. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only with respect to the ownership in that corporation prior to the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
|
(e)
|
Change in the Ownership of a Substantial Portion of a Corporation’s Assets.
A change in the ownership of a substantial portion of a corporation’s assets occurs on the date that any one person, or more than one person acting as a group (as determined in accordance with rules similar to those set forth in Section 9.7(d)), acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the corporation immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the corporation or the value of the assets being disposed of determined without regard to any liabilities associated with such assets. There is no Change in Control event under this Section 9.7(e) when there is a transfer to an entity that is controlled by the shareholders of the transferring corporation immediately after the transfer. A transfer of assets by a corporation is not treated as a change in ownership of such assets if the assets are transferred to (i) a shareholder of the corporation (immediately before the asset transfer) in exchange for or with respect to its stock, (ii) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the corporation, (iii) a person, or more than one person acting as a group, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the corporation, or (iv) an entity, at least fifty (50%) of the total value or voting power of which is owned, directly or indirectly, by a person described in Section 9.7(e)(iii). For purposes of the foregoing, and except as otherwise provided, a person’s status is determined immediately after the transfer of assets.
|
(a)
|
The Employer may delay payment if it reasonably anticipates that its deduction with respect to such payment would be limited or eliminated by the application of Code Section 162(m). Payment must be made during the Participant’s first taxable year in which the Employer reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year the deduction of such payment will not be barred by the application of Code Section 162(m) or during the period beginning with the Participant’s Separation from Service and ending on the later of the last day of the Employer’s taxable year in which the Participant separates from service or the 15
th
day of the third month following the Participant’s Separation from Service. If a scheduled payment to a Participant is delayed in accordance with this Section 9.8(a), all scheduled payments to the Participant that could be delayed in accordance with this Section 9.8(a) will also be delayed.
|
(b)
|
The Employer may also delay payment if it reasonably anticipates that the making of the payment will violate federal securities laws or other applicable laws provided payment is made at the earliest date on which the Employer reasonably anticipates that the making of the payment will not cause such violation.
|
(c)
|
The Employer reserves the right to amend the Plan to provide for a delay in payment upon such other events and conditions as the Secretary of the Treasury may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.
|
(a)
|
Domestic Relations Order.
A payment may be accelerated if such payment is made to an alternate payee pursuant to and following the receipt and qualification of a domestic relations order as defined in Code Section 414(p).
|
(b)
|
Compliance with Ethics Agreement and Legal Requirements.
A payment may be accelerated as may be necessary to comply with ethics agreements with the Federal government or as may be reasonably necessary to avoid the violation of Federal, state, local or foreign ethics law or conflicts of laws, in accordance with the requirements of Code Section 409A.
|
(c)
|
De Minimis Amounts.
A payment will be accelerated if (i) the amount of the payment is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), (ii) at the time the payment is made the amount constitutes the Participant’s entire interest under the Plan and all other plans that are aggregated with the Plan under Treas. Reg. § 1.409A-1(c)(2).
|
(d)
|
FICA Tax.
A payment may be accelerated to the extent required to pay the Federal Insurance Contributions Act tax imposed under Code Sections 3101, 3121(a) and 3121(v)(2) of the Code with respect to compensation deferred under the Plan (the “FICA Amount”). Additionally, a payment may be accelerated to pay the income tax on wages imposed under Code Section 3401 of the Code on the FICA Amount and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes. The total payment under this subsection (d) may not exceed the aggregate of the FICA Amount and the income tax withholding related to the FICA Amount.
|
(e)
|
Section 409A Additional Tax.
A payment may be accelerated if the Plan fails to meet the requirements of Code Section 409A; provided that such payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Code Section 409A.
|
(f)
|
Offset.
A payment may be accelerated in the Employer’s discretion as satisfaction of a debt of the Participant to the Employer, where such debt is incurred in the ordinary course of the service relationship between the Participant and the Employer, the entire amount of the reduction in any of the Employer’s taxable years does not exceed $5,000, and the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant.
|
(g)
|
Other Events.
A payment may be accelerated in the Administrator’s discretion in connection with such other events and conditions as permitted by Code Section 409A.
|
(a)
|
To make and enforce such rules and procedures as it deems necessary or proper for the efficient administration of the Plan;
|
(b)
|
To interpret the Plan, its interpretation thereof to be final, except as provided in Section 12.2, on all persons claiming benefits under the Plan;
|
(c)
|
To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan;
|
(d)
|
To administer the claims and review procedures specified in Section 12.2;
|
(e)
|
To compute the amount of benefits which will be payable to any Participant, former Participant or Beneficiary in accordance with the provisions of the Plan;
|
(f)
|
To determine the person or persons to whom such benefits will be paid;
|
(g)
|
To authorize the payment of benefits;
|
(h)
|
To make corrections and recover the overpayment of any benefits;
|
(i)
|
To comply with the reporting and disclosure requirements of Part 1 of Subtitle B of Title I of ERISA;
|
(j)
|
To appoint such agents, counsel, accountants, and consultants as may be required to assist in administering the Plan;
|
(k)
|
By written instrument, to allocate and delegate its responsibilities, including the formation of an Administrative Committee to administer the Plan.
|
(a)
|
Claims Procedure.
If any person believes he or she is being denied any rights or benefits under the Plan or wishes to clarify his or her rights under the Plan, such person may file a claim in writing with the Administrator. If any such claim is wholly or partially denied, the Administrator will notify such person of its decision in writing. Such notification will contain (i) specific reasons for the denial, (ii) specific reference to pertinent Plan provisions, (iii) a description of any additional material or information necessary for such person to perfect such claim and an explanation of why such material or information is necessary, and (iv) a description of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the person’s right to bring a civil action following an adverse decision on review. If the claim involves a Disability, the denial must also include the standards that governed the decision, including the basis for disagreeing with any health care professionals, vocational professionals or the Social Security Administration as well as an explanation of the scientific or clinical judgement underlying the denial. Such notification will be given within 90 days (45 days in the case of a claim regarding Disability) after the claim is received by the Administrator. The Administrator may extend the period for providing the notification by 90 days (30 days in the case of a claim regarding Disability, which may be extended an additional 30 days) if special circumstances require an extension of time for processing the claim and if written notice of such extension and circumstance is given to such person within the initial 90 day period (45 day period in the case of a claim regarding Disability). If such notification is not given within such period, the claim will be considered denied as of the last day of such period and such person may request a review of his or her claim.
|
(b)
|
Review Procedure.
Within 90 days (180 days in the case of a claim regarding Disability) after the date on which a person receives a written notification of denial of claim (or, if written notification is not provided, within 90 days (180 days in the case of a claim regarding Disability) of the date denial is considered to have occurred), such person (or his or her duly authorized representative) may (i) file a written request with the Administrator for a review of his or her denied claim and of pertinent documents and (ii) submit written issues and comments to the Administrator. The Administrator will notify such person of its decision in writing. Such notification will be written in a manner calculated to be understood by such person and will contain specific reasons for the decision as well as specific references to pertinent Plan provisions. The notification will explain that the person is entitled to receive, upon request and free of charge, reasonable access to and copies of all pertinent documents and has the right to bring a civil action following an adverse decision on review. The decision on review will be made within 60 days (45 days in the case of a claim regarding Disability). The Administrator may extend the period for making the decision on review by 60 days (45 days in the case of a claim regarding Disability) if special circumstances require an extension of time for processing the request such as an election by the Administrator to hold a hearing, and if written notice of such extension and circumstances is given to such person within the initial 60-day period (45 days in the case of a claim regarding Disability). If the decision on review is not made within such period, the claim will be considered denied.
|
(i)
|
Any new or additional evidence considered, relied upon, or generated by the Administrator or other person making the decision; and
|
(ii)
|
A new or addition rationale if the decision will be based on that rationale.
|
(c)
|
Exhaustion of Claims Procedures and Right to Bring Legal Claim.
No action at law or equity shall be brought more than one year after the Administrator’s affirmation of a denial of a claim, or, if earlier, more than four years after the facts or events giving rising to the claimant’s allegation(s) or claim(s) first occurred.
|
(a)
|
Each Indemnitee (as defined in Section 13.8(e)) shall be indemnified and held harmless by the Employer for all actions taken by him or her and for all failures to take action (regardless of the date of any such action or failure to take action), to the fullest extent permitted by the law of the jurisdiction in which the Employer is incorporated, against all expense, liability, and loss (including, without limitation, attorneys’ fees, judgments, fines, taxes, penalties, and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Indemnitee in connection with any Proceeding (as defined in subsection (e)). No indemnification pursuant to this Section shall be made, however, in any case where (1) the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness or (2) there is a settlement to which the Employer does not consent.
|
(b)
|
The right to indemnification provided in this Section shall include the right to have the expenses incurred by the Indemnitee in defending any Proceeding paid by the Employer in advance of the final disposition of the Proceeding, to the fullest extent permitted by the law of the jurisdiction in which the Employer is incorporated; provided that, if such law requires, the payment of such expenses incurred by the Indemnitee in advance of the final disposition of a Proceeding shall be made only on delivery to the Employer of an undertaking, by or on behalf of the Indemnitee, to repay all amounts so advanced without interest if it shall ultimately be determined that the Indemnitee is not entitled to be indemnified under this Section or otherwise.
|
(c)
|
Indemnification pursuant to this Section shall continue as to an Indemnitee who has ceased to be such and shall inure to the benefit of his or her heirs, executors, and admin-istrators. The Employer agrees that the undertakings made in this Section shall be binding on its successors or assigns and shall survive the termination, amendment or restatement of the Plan.
|
(d)
|
The foregoing right to indemnification shall be in addition to such other rights as the Indemnitee may enjoy as a matter of law or by reason of insurance coverage of any kind and is in addition to and not in lieu of any rights to indemnification to which the Indemnitee may be entitled pursuant to the by-laws of the Employer.
|
(e)
|
For the purposes of this Section, the following definitions shall apply:
|
(i)
|
“Indemnitee” shall mean each person serving as an Administrator (or any other person who is an employee, Director, or officer of the Employer) who was or is a party to, or is threatened to be made a party to, or is otherwise involved in, any Proceeding, by reason of the fact that he or she is or was performing administrative functions under the Plan.
|
(ii)
|
“Proceeding” shall mean any threatened, pending, or completed action, suit, or proceeding (including, without limitation, an action, suit, or proceeding by or in the right of the Employer), whether civil, criminal, administrative, investigative, or through arbitration.
|
1.
|
TERMINATION OF THE INTER-ISLAND SUPPLY CONTRACT
.
Notwithstanding anything set forth in the Inter-Island Supply Contract, the Inter-Island Supply Contract shall terminate in its entirety if, on or before May 3, 2019, Hawaiian Electric provides to IES written notification of termination with a termination effective date of May 3, 2019 or earlier. Otherwise, Hawaiian Electric’s obligation to purchase IFO from IES pursuant to the Inter-Island Supply contract shall terminate effective August 31, 2019 and Hawaiian Electric’s obligation to purchase Diesel from IES pursuant to the Supply Contract shall terminate in its entirety effective December 31, 2019, at which time, the Inter-Island Supply Contract shall terminate in its entirety and, except as explicitly provided thereunder, the parties shall have no further obligation to each other.
|
2.
|
REPRESENTATIONS
.
The parties represent and acknowledge that no statement of fact or opinion has been made by any party, or anyone acting on behalf of the parties, to induce the execution of this Agreement, other than as expressly set forth in this Agreement, and that this Agreement is executed freely on the part of each party hereto. The parties also represent and agree that they may hereafter discover facts in addition to or different from those they now know or believe to be true with respect to the subject matters of this Agreement, but that this Agreement shall remain in effect, notwithstanding the subsequent discovery or existence of any such additional or different facts or opinions.
|
3.
|
AUTHORITY
.
Each party represents and warrants to the other that no other person or entity has or has had any interest, right, or title in and to the claims, demands, obligations, or causes of action referred to in this Agreement. Each party has the sole right and exclusive authority to execute this Agreement; and that it has not sold, assigned, transferred, conveyed, or otherwise disposed of any of the claims, demands, obligations, or causes of action referred to in this Agreement.
|
4.
|
SEVERABILITY
.
If any provision or any part of any provision of this Agreement is for any reason held to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby and shall remain valid and fully enforceable.
|
5.
|
NO WAIVER
.
The failure at any time of either party to enforce any of the provisions of this Agreement, or to require at any time performance by the other party of any of the provisions hereof, shall in no way be construed to be a waiver of such provisions, nor in any way construed to affect the validity of this Agreement or any part hereof, or the right of any party thereafter to enforce each and every such provision.
|
6.
|
PREPARATION OF AGREEMENT
.
The parties specifically acknowledge and agree that this Agreement has been prepared, reviewed, studied and executed without compulsion, fraud, duress or undue influence and without circumstances which would overcome the free will of the signatories, and that it is expressly made by the parties with the requisite experience and advice of independent counsel, each party acting as equals in bargaining the terms of this Agreement and, accordingly, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendment to it.
|
7.
|
APPLICABLE LAW/FORUM
.
This Agreement is made under and shall be governed by and construed in accordance with the laws of the State of Hawaii. Each party agrees and consents that any dispute arising out of this Agreement, however defined, shall be brought in the State of Hawaii in a court of competent jurisdiction; provided, however, that Companies, at its option, may elect to submit any such dispute to binding arbitration pursuant to the arbitration rules of the Dispute Prevention & Resolution, Inc. then in effect, in which case the Parties agree that any alternative dispute resolution shall take place in the State of Hawaii.
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8.
|
ATTORNEY FEES & COSTS
.
Each party shall bear its own attorneys’ fees and costs in connection with this Agreement. However, if any party shall commence any legal or other proceedings against the other party hereto with respect to any of the terms and conditions of this Agreement, the non-prevailing party shall pay to the prevailing party all expenses of said proceedings, including reasonable attorneys’ fees and costs.
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9.
|
ENTIRE AGREEMENT
.
Except as otherwise provided herein, this Agreement contains the entire agreement between the parties with respect to the matters set forth herein and supersedes and replaces any and all prior or contemporaneous agreements or understandings, written or oral, with regard to the matters set forth in it. This Agreement
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10.
|
BINDING EFFECT
.
This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective officers, directors, shareholders, employees, agents, representatives, partners, predecessors, successors, assigns, divisions, subdivisions, parent companies, subsidiaries, affiliates, insurers, indemnitors, legal representatives, and related entities.
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11.
|
HEADINGS
.
The headings of paragraphs and sections in this Agreement are included for convenience only and shall not be considered by either party in construing the meaning of this Agreement.
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12.
|
COOPERATION
.
The parties agree to work cooperatively with one another to carry out the intent of this Agreement.
|
13.
|
COUNTERPARTS
.
The parties agree that this Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which shall together constitute one and the same instrument binding all parties notwithstanding that all of the Parties are not signatories to the same counterparts. For all purposes, duplicate unexecuted and unacknowledged pages of the counterparts may be discarded and the remaining pages assembled as one document. This Agreement may also be executed by exchange of executed copies via facsimile or other electronic means, such as PDF, in which case, but not as a condition to the validity of the Agreement, each Party shall subsequently send the other party by mail the original executed copy. A party’s signature transmitted by facsimile or similar electronic means shall be considered an “original” signature for purposes of this Agreement.
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By:
|
/s/ Robert C. Isler
|
|
Name:
|
Robert C. Isler
|
|
Title:
|
Vice President, Power Supply
|
|
Date:
|
11/29/2018
|
|
By:
|
/s/ Robert C. Isler
|
|
Name:
|
Robert C. Isler
|
|
Title:
|
Vice President, Power Supply
|
|
Date:
|
11/29/2018
|
|
By:
|
/s/ Robert C. Isler
|
|
Name:
|
Robert C. Isler
|
|
Title:
|
Vice President, Power Supply
|
|
Date:
|
11/29/2018
|
|
By:
|
/s/ Timothy J. Parker
|
|
Name:
|
Robert C. Isler
|
|
Title:
|
Vice President & General Counsel
|
|
Date:
|
12/10/2018
|
|
By:
|
/s/ Robert C. Isler
|
|
Name:
|
Robert C. Isler
|
|
Title:
|
Vice President, Power Supply
|
|
Date:
|
11/29/2018
|
|
By:
|
/s/ Timothy J. Parker
|
|
Name:
|
Timothy J. Parker
|
|
Title:
|
Vice President & General Counsel
|
|
Date:
|
12/10/2018
|
|
By:
|
/s/ Robert C. Isler
|
|
Name:
|
Robert C. Isler
|
|
Title:
|
Vice President, Power Supply
|
|
Date:
|
11/29/2018
|
|
By:
|
/s/ Timothy J. Parker
|
|
Name:
|
Timothy J. Parker
|
|
Title:
|
Vice President & General Counsel
|
|
Date:
|
12/10/2018
|
|
(in thousands,
except per share amounts)
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||||
Net income for common stock
|
|
$
|
201,774
|
|
|
$
|
165,297
|
|
|
$
|
248,256
|
|
|
$
|
159,877
|
|
|
$
|
168,129
|
|
Weighted-average number of common shares outstanding
|
|
108,855
|
|
|
108,749
|
|
|
108,102
|
|
|
106,418
|
|
|
101,968
|
|
|||||
Adjusted weighted-average number of common shares outstanding
|
|
109,146
|
|
|
108,933
|
|
|
108,309
|
|
|
106,721
|
|
|
102,937
|
|
|||||
Basic earnings per common share
|
|
$
|
1.85
|
|
|
$
|
1.52
|
|
|
$
|
2.30
|
|
|
$
|
1.50
|
|
|
$
|
1.65
|
|
Diluted earnings per common share
|
|
$
|
1.85
|
|
|
$
|
1.52
|
|
|
$
|
2.29
|
|
|
$
|
1.50
|
|
|
$
|
1.63
|
|
(1)
|
I have reviewed this report on Form 10-K for the year ended December 31, 2018 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: February 28, 2019
|
|
|
/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, 2018 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: February 28, 2019
|
|
|
/s/ Gregory C. Hazelton
|
|
Gregory C. Hazelton
|
|
Executive Vice President, Chief Financial Officer
|
|
and Treasurer
|
1.
|
I have reviewed this report on Form 10-K for the year ended December 31, 2018 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: February 28, 2019
|
|
|
/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, 2018 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: February 28, 2019
|
|
|
/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, Chief Financial Officer
|
|
and Treasurer
|
|
(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
|
71
|
Hawaiian Electric President and Chief Executive Officer since 10/14
Hawaiian Electric Director, 6/08 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
|
58
|
Hawaiian Electric Senior Vice President, Business Development & Strategic Planning since 2/19
· Hawaiian Electric Senior Vice President, Customer Service, 8/12 to 2/19
· Prior to joining the Company: Kansas City Power & Light, Vice President – Customer Service, 2007-12
|
Colton K. Ching
|
51
|
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
|
62
|
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
|
45
|
Hawaiian Electric Senior Vice President, Customer Service since 2/19
· Hawaiian Electric Senior Vice President, Business Development & Strategic Planning, 1/17 to 2/19
· 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
|
61
|
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
|
56
|
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
|
53
|
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
|
Sharon M. Suzuki
|
60
|
President, Maui County and Hawaii Island Utilities since 2/19
· Maui Electric President, 5/12 to 2/19
· 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, overall product and business growth, as well as from his 10 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 Visa, Inc., where he set overall investment strategy and directed investment of a budget of over $800 million across more than 70 markets, including emerging markets.
|
•
|
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, Dine Brands Global, Inc. (formerly known as 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), 2010 - May 2018; currently a director
|
•
|
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, Executive Committee Member and Nominating and Governance 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.
|
•
|
President and Chief Executive Officer, Zephyr Insurance Company, Inc. (hurricane insurance provider in Hawaii), 4/2018 to present
|
•
|
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 currently as President and Chief Executive Officer of Zephyr Insurance Company.
|
•
|
Business, regulatory, financial stewardship and legal experience from his prior roles as Chief Consumer Officer of HMSA, President and Chief Executive Officer 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 his prior experience overseeing the HMSA Internal Audit department, 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. (largest ranch in Hawaii with significant real estate assets), as a director and Audit Committee member for Grove Farm Company, Inc. (privately-
|
•
|
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 ($11.9 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 current service as President and Chief Executive Officer of Hawaii Community Foundation, 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 $10 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)
|
•
|
Director, ASB Hawaii (affiliate of Hawaiian Electric)
|
•
|
Chairman of the Board, 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
|
•
|
Director, Matson, Inc.
|
•
|
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 director, Audit Committee Chair and Nominating and Corporate Governance Committee member for Matson, Inc., and as a director and Risk and Capital Committee chair of 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 or having served 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), July 2017 - December 2018
|
•
|
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, the Hawaii Leadership Forum, Elemental Excelerator and the Center for Effective Philanthropy, and through publishing articles and lecturing on governance of tax-exempt organizations.
|
•
|
Extensive experience in conservation/environmental matters in Hawaii and Asia Pacific Region.
|
•
|
Director, HEI (parent company of Hawaiian Electric)
|
•
|
Director, ASB (affiliate of Hawaiian Electric)
|
•
|
Director, Matson, Inc. (2003-2018)
|
•
|
Lead Independent Director, 2012-15 and director 2003-15, Alexander & Baldwin, Inc. (A&B)
|
•
|
Broad business, legal, corporate governance and leadership experience from serving as Managing Partner of the law firm he helped found, 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 2018 annual incentive performance, the following metrics applied to all Hawaiian Electric named executive officers: Hawaiian Electric consolidated adjusted net income, operation and maintenance expense, customer satisfaction, reliability, 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, 2018, 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; and
|
•
|
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 named executive officers to hold certain amounts of HEI common stock ensure that Hawaiian Electric’s named executive officers have a substantial personal stake in the long-term performance of Hawaiian Electric and HEI. The guidelines specific to the named executive officers are discussed in "Share ownership and retention are required throughout employment with the Company" below.
|
•
|
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.
|
Position
|
Value of Stock to be Owned
|
Hawaiian Electric President & CEO
|
2x base salary
|
Other Named Executive Officers
|
1x base salary
|
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, expertise 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
|
2017
|
2018
|
|
2017
|
2018
|
|
2017-19
|
2018-20
|
|
2017
|
2018
|
Alan M. Oshima
|
655,583
|
686,750
|
|
75
|
same
|
|
95
|
same
|
|
65
|
same
|
Tayne S. Y. Sekimura
|
350,583
|
361,133
|
|
50
|
same
|
|
50
|
same
|
|
35
|
same
|
Jimmy D. Alberts
|
269,283
|
277,350
|
|
45
|
same
|
|
45
|
same
|
|
35
|
same
|
Susan A. Li
|
276,750
|
285,017
|
|
45
|
same
|
|
45
|
same
|
|
35
|
same
|
Jay M. Ignacio
|
285,100
|
293,667
|
|
45
|
same
|
|
50
|
same
|
|
35
|
same
|
1
|
The threshold and maximum opportunities are 0.5 times target and 2 times target, respectively.
|
2018 Annual Incentive Performance Metrics & Why We Use Them
|
|
Goals
|
|
||||
Weight-ing
|
Threshold
|
Target
|
Maximum
|
Result
|
|||
Consolidated Adjusted Net Income
1
focuses on fundamental earnings
|
30%
|
$151.0M
|
$158.9M
|
$174.8M
|
$151.3M
|
||
Consolidated Operation and Maintenance Expense
2
measures operational efficiency
|
15%
|
$460M
|
$447M
|
N/A
|
$461M
|
||
Consolidated Customer Satisfaction
3
focuses on improving the customer experience through all points of contact with the utility
|
15%
|
Consolidated score of 69 in 2 of 4 quarters
|
Consolidated score of 69 in 3 of 4 quarters
|
Consolidated score of 69 in 4 of 4 quarters
|
Consolidated score of 69 in 4 of 4 quarters
|
||
Consolidated Reliability/System Average Interruption Duration Index (SAIDI)
4
promotes system reliability for customers
|
5%
|
102 minutes
|
99 minutes
|
97 minutes
|
149 minutes
|
||
Consolidated Safety/Total Cases Incident Rate (TCIR)
5
rewards improvements in workplace safety, promoting employee well-being and reducing expense
|
2%
|
1.37 TCIR
|
1.03 TCIR
|
0.92 TCIR
|
Below Threshold
|
||
Consolidated Safety/Severity Rate
6
rewards improvements in workplace safety, promoting employee well-being and reducing expense
|
3%
|
18.53
|
16.00
|
13.46
|
Below Threshold
|
||
Transformation Metrics
7
promote achievement of utility transformation initiatives
|
30%
|
Threshold
|
Target
|
Maximum
|
Target
|
1
|
Consolidated Adjusted Net Income represents Hawaiian Electric’s consolidated GAAP net income for 2018, adjusted for the items 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: Incentive Compensation Adjustments" in Appendix B.
|
2
|
Consolidated Operation and Maintenance Expense represents non-fuel expenses of the consolidated utilities, including retirement defined benefits expense - other than service costs, and excludes expenses covered by surcharges or otherwise neutral to net income and adjustments relating to LNG project costs.
|
3
|
Consolidated Customer Satisfaction is based on quarterly results of customer surveys conducted by an outside vendor.
|
4
|
Consolidated Reliability/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.
|
5
|
Consolidated Safety/TCIR is a standard measure of employee safety. TCIR equals the number of Occupational Safety and Health Administration recordable cases as of 12/31/18 × 200,000 productive hours divided by productive hours for the year. Lower TCIR scores reflect better safety performance.
|
6
|
Consolidated Safety/Severity Rate is a measure of the significance of the safety incidents a company experienced based on the number of lost work days incurred. Lost work days occur when an occupational injury or illness prevents an employee from working a full, assigned work shift. Severity rate is calculated by taking the number days away from work due to a work place injury (maximum of 180 days) multiplied by 200,000 and divided by number of hours worked by all employees.
|
7
|
Transformation Metrics focus on achievement of the utility’s transformation goals. For 2018, the Utility Transformation milestones focused on the areas of PSIP execution, electrification of transportation, new products and services, customer/community engagement, ERP/EAM Project, grid modernization implementation, integrated grid planning proposal, one company initiative, and regulatory/policy. The Utility Transformation goal was achieved at target for 2018, meaning that all milestones were achieved.
|
Name
|
2018 Annual Incentive Payout
|
||
Alan M. Oshima
|
$
|
389,182
|
|
Tayne S. Y. Sekimura
|
136,400
|
|
|
Jimmy D. Alberts
|
94,354
|
|
|
Susan A. Li
|
96,962
|
|
|
Jay M. Ignacio
|
99,905
|
|
1
|
Hawaiian Electric Average Annual EPS Growth is calculated by taking the sum of each full calendar year's (2019 and 2020, respectively) EPS percentage growth over the EPS of the prior year and dividing that sum by two. For purposes of this goal, Hawaiian Electric EPS is calculated using Hawaiian Electric net income divided by weighted average HEI common stock outstanding.
|
2
|
ROACE as a % of Allowed Return is Hawaiian Electric's consolidated average ROACE based on the last two years of 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
|
2016-18 Target Opportunity
*
(as % of Base Salary)
|
Alan M. Oshima
|
95%
|
Tayne S. Y. Sekimura
|
50%
|
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.
|
2016-18 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%
|
3.0%
|
4.0%
|
6.0%
|
4.7%
|
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%
|
74%
|
84%
|
94%
|
82%
|
1
|
HEI's 3-year Average Annual EPS Growth is calculated by taking the sum of each full calendar year's (2016, 2017 and 2018, 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 2015 through 2018 described below under “Adjustments for unusual events - 2016‑18 LTIP.” For a reconciliation of the GAAP and non‑GAAP results, see “Reconciliation of GAAP to Non‑GAAP Measures: Incentive Compensation Adjustments” 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 2016 through 2018 described below under “Adjustments for unusual events - 2016‑18 LTIP.” For a reconciliation of the GAAP and non‑GAAP results, see “Reconciliation of GAAP to Non‑GAAP Measures: Incentive Compensation Adjustments” attached as Appendix B.
|
Name
|
2016-18 LTIP Payout
|
|
|
Alan M. Oshima
|
$
|
623,615
|
|
Tayne S. Y. Sekimura
|
192,375
|
|
|
Jimmy D. Alberts
|
132,992
|
|
|
Susan A. Li
|
136,688
|
|
|
Jay M. Ignacio
|
156,432
|
|
•
|
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 the 2015-17 and 2016-18 LTIP awards).
|
•
|
For 2017 and 2018, the "Stock Awards" column reflects: (i) the opportunity to earn shares of HEI common stock under the 2017-19 and 2018-20 LTIP, respectively, if performance metrics are achieved and (ii) RSUs that vest over 2017-20 and 2018-21, respectively, and may be forfeited in whole or in part if the executive leaves before the vesting period ends.
|
•
|
For 2016, the "Stock Awards" column reflects only RSUs granted in 2016 since the 2016-18 LTIP was 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 return to exclusively equity-based long-term incentive compensation in 2017 impacts the amounts in the 2018 Summary Compensation Table. SEC rules require the 2015-17 LTIP and 2016-18 LTIP cash payouts to be included in the table in 2017 and 2018, respectively, 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 and 2018 amounts in the table include
both
the 2015-17 LTIP and 2016-18 LTIP, respectively, cash payouts and the 2017-19 and 2018-20 equity-based LTIP, respectively, and RSU awards granted in 2017 and 2018, respectively, which are not reflective of 2017 and 2018 target NEO compensation. By contrast, the 2016 compensation amounts do not include any LTIP amounts because there were no LTIP cash payouts or equity-based LTIP awards granted in 2016. Our LTIP programs and practices have not changed (i.e., one LTIP award covering a 3-year performance period is granted each year), however, due to the disclosure timing differences between cash and equity-based LTIPs, the amounts in the Summary Compensation Table for 2017 and 2018 are notably higher than, and not comparable to, the reported amount for 2016, and are not reflective of 2017 and 2018 NEO target compensation.
|
•
|
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 and do not necessarily reflect the benefit to be received by the executive. "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 2018
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
|
2018
|
|
686,750
|
|
|
1,114,464
|
|
|
1,012,797
|
|
|
91,578
|
|
|
13,635
|
|
|
2,827,646
|
|
|
2,919,224
|
|
President and Chief Executive Officer
|
2017
|
|
655,583
|
|
|
1,071,359
|
|
|
847,170
|
|
|
187,506
|
|
|
13,230
|
|
|
2,587,342
|
|
|
2,774,848
|
|
2016
|
|
583,500
|
|
|
379,282
|
|
|
445,939
|
|
|
153,231
|
|
|
21,296
|
|
|
1,430,017
|
|
|
1,583,248
|
|
|
Tayne S. Y. Sekimura
|
2018
|
|
361,133
|
|
|
311,322
|
|
|
328,775
|
|
|
—
|
|
|
—
|
|
|
1,001,230
|
|
|
1,001,230
|
|
Senior Vice President and Chief Financial Officer
|
2017
|
|
350,583
|
|
|
304,319
|
|
|
270,156
|
|
|
560,716
|
|
|
—
|
|
|
925,058
|
|
|
1,485,774
|
|
2016
|
|
342,000
|
|
|
119,690
|
|
|
173,061
|
|
|
400,247
|
|
|
—
|
|
|
634,751
|
|
|
1,034,998
|
|
|
Jimmy D. Alberts
|
2018
|
|
277,350
|
|
|
224,879
|
|
|
227,346
|
|
|
31,731
|
|
|
18,964
|
|
|
748,539
|
|
|
780,270
|
|
Senior Vice President, Customer Service
|
2017
|
|
269,283
|
|
|
219,776
|
|
|
198,052
|
|
|
68,705
|
|
|
18,214
|
|
|
705,325
|
|
|
774,030
|
|
2016
|
|
262,700
|
|
|
91,943
|
|
|
119,640
|
|
|
49,950
|
|
|
22,639
|
|
|
496,922
|
|
|
546,872
|
|
|
Susan A. Li
|
2018
|
|
285,017
|
|
|
231,101
|
|
|
233,650
|
|
|
—
|
|
|
—
|
|
|
749,768
|
|
|
749,768
|
|
Senior Vice President, General Counsel, Chief Compliance & Administrative Officer
|
2017
|
|
276,750
|
|
|
225,889
|
|
|
191,549
|
|
|
437,303
|
|
|
—
|
|
|
694,188
|
|
|
1,131,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Jay M. Ignacio
|
2018
|
|
293,667
|
|
|
253,138
|
|
|
256,337
|
|
|
108,113
|
|
|
—
|
|
|
803,142
|
|
|
911,255
|
|
President, Hawaii Electric Light and Senior Operations Advisor to the Hawaiian Electric President and CEO
|
2017
|
|
285,100
|
|
|
247,466
|
|
|
198,617
|
|
|
526,579
|
|
|
—
|
|
|
731,183
|
|
|
1,257,762
|
|
2016
|
|
278,100
|
|
|
97,325
|
|
|
126,654
|
|
|
391,590
|
|
|
—
|
|
|
502,079
|
|
|
893,669
|
|
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 and 2018, 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 and 2018-20 LTIPs, respectively, if pre-established performance goals are achieved and (ii) RSUs vesting in installments over a four-year period. For 2016, these amounts were composed of RSUs granted in 2016 and vesting in installments over a four-year period. Since the 2015-17 and 2016-18 LTIPs are denominated in cash rather than in stock, in accordance with SEC rules, the cash payouts are reported in the "Nonequity Incentive Plan Compensation" column in this Summary Compensation Table for 2017 and 2018, respectively. See the 2018 Grants of Plan-Based Awards table below for the portion of the amount in the Stock Awards column above that is composed of 2018 grants of RSUs and performance award opportunities under the 2018-20 LTIP. Assuming achievement of the highest level of performance conditions, the maximum value of the performance awards payable in 2021 under the 2018-20 LTIP would be: Mr. Oshima $1,336,102; Ms. Sekimura $369,781; Mr. Alberts $255,605; Ms. Li $262,659; and Mr. Ignacio $300,696. For a discussion of the assumptions underlying the amounts set out for the RSUs and and 2018-2020 LTIP, see Note
10
to the Consolidated Financial Statements in the Annual Report on Form 10-K to which this Exhibit 99.1 is attached.
|
3.
|
Nonequity Incentive Plan Compensation
. These amounts represent cash payouts to named executive officers under the annual incentive plan, the Executive Incentive Compensation Plan (EICP), earned for the years shown. For 2017 and 2018, the amounts in this column also include the cash payout from the 2015-17 and 2016-18 LTIPs, respectively.
|
4.
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings
. These amounts represent the change in present value of the accrued pension and executive death benefits from beginning of year to end of year for 2016, 2017 and 2018. These amounts are not current payments; pension and executive death benefits are only paid after retirement or death, as applicable. The amounts in this column depend heavily on changes in actuarial assumptions, such as discount rates, and also are impacted by years of service and age. In accordance with SEC rules, the negative change in value for Ms. Sekimura and Ms. Li is shown as no change in the table above. For a further discussion of the applicable plans, see the 2018 Pension Benefits table and related notes below. No Hawaiian Electric named executive officer had above-market or preferential earnings on nonqualified deferred compensation for the periods covered in the table above.
|
5.
|
All Other Compensation
. The following table summarizes the components of “All Other Compensation” with respect to 2018:
|
Name
|
Contributions to Defined Contribution
Plans ($)
a
|
|
Other
($)
b
|
|
Total All Other
Compensation
($)
|
|
Alan M. Oshima
|
8,250
|
|
5,385
|
|
13,635
|
|
Tayne S.Y. Sekimura*
|
—
|
|
—
|
|
—
|
|
Jimmy D. Alberts
|
8,221
|
|
10,743
|
|
18,964
|
|
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 ($275,000 in 2018).
|
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 $10,000 for 2018 and is therefore not included in the table above.
|
6.
|
Total Without
Change in Pension Value
. Total Without Change in Pension Value represents total compensation as determined under SEC rules, minus the change in pension value and executive death benefits amount reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column. We include this column because the magnitude of the change in pension value and death benefits in a given year is largely determined by actuarial assumptions, such as discount rates and mortality assumptions set by the Society of Actuaries, and does not reflect decisions made by the HEI Compensation Committee or Hawaiian Electric Board for that year or the actual benefit necessarily to be received by the recipient. The amounts reported in the Total Without Change in Pension Value column may differ substantially from the amounts reported in the Total column and are not a substitute for the Total column.
|
|
|
|
Estimated Future Payouts
Under Nonequity Incentive
Plan Awards (1)
|
|
Estimated Future Payouts
Under Equity Incentive Plan
Awards (2)
|
|
All Other
Stock Awards: Number of Shares
of Stock
or Units
(#) (3)
|
|
Grant Date Fair Value
of Stock
Awards
($) (4)
|
||||||||||||||||
Name
|
Grant
Date
|
|
Threshold ($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold (#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|
||||||||||
Alan M. Oshima
|
1/31/18 EICP
|
|
257,531
|
|
|
515,063
|
|
|
1,030,125
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1/31/18 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,563
|
|
|
19,127
|
|
|
38,253
|
|
|
—
|
|
|
668,066
|
|
|
1/31/18 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,087
|
|
|
446,398
|
|
Tayne S. Y. Sekimura
|
1/31/18 EICP
|
|
90,283
|
|
|
180,567
|
|
|
361,133
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1/31/18 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,647
|
|
|
5,294
|
|
|
10,587
|
|
|
—
|
|
|
184,910
|
|
|
1/31/18 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,706
|
|
|
126,412
|
|
Jimmy D. Alberts
|
1/31/18 EICP
|
|
62,404
|
|
|
124,808
|
|
|
249,615
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1/31/18 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,829
|
|
|
3,659
|
|
|
7,318
|
|
|
—
|
|
|
127,802
|
|
|
1/31/18 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,846
|
|
|
97,077
|
|
Susan A. Li
|
1/31/18 EICP
|
|
64,129
|
|
|
128,258
|
|
|
256,515
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1/31/18 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,880
|
|
|
3,760
|
|
|
7,520
|
|
|
—
|
|
|
131,329
|
|
|
1/31/18 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,925
|
|
|
99,772
|
|
Jay M. Ignacio
|
1/31/18 EICP
|
|
66,075
|
|
|
132,150
|
|
|
264,300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1/31/18 LTIP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,152
|
|
|
4,305
|
|
|
8,609
|
|
|
—
|
|
|
150,365
|
|
|
1/31/18 RSU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,013
|
|
|
102,773
|
|
EICP
|
Executive Incentive Compensation Plan (annual incentive)
|
LTIP
|
Long-Term Incentive Plan (2018-20 period)
|
RSU
|
Restricted stock units
|
1.
|
Estimated Future Payouts Under Nonequity Incentive Plan Awards
. Shows possible cash payouts under the 2018 EICP based on meeting performance goals set in January 2018 at threshold, target and maximum levels. Actual payouts for the 2018 EICP are reported in the 2018 Summary Compensation Table above.
|
2.
|
Estimated Future Payouts Under Equity Incentive Plan Awards
. Represents number of shares of HEI stock that may be issued under the 2018-20 LTIP based upon the achievement of performance goals set in January 2018 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 2018 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, are compounded 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 2018-20 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
10
(Share-based compensation) to the Consolidated Financial Statements in the 2018 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
|
2015
|
|
2,098
|
|
|
76,829
|
|
|
—
|
|
|
—
|
|
|
2016
|
|
6,343
|
|
|
232,281
|
|
|
—
|
|
|
—
|
|
|
2017
|
|
9,546
|
|
|
349,575
|
|
|
18,602
|
|
|
681,205
|
|
|
2018
|
|
13,087
|
|
|
479,246
|
|
|
19,127
|
|
|
700,431
|
|
|
Total
|
|
31,074
|
|
|
1,137,931
|
|
|
37,729
|
|
|
1,381,636
|
|
Tayne S. Y. Sekimura
|
2015
|
|
861
|
|
|
31,530
|
|
|
—
|
|
|
—
|
|
2016
|
|
2,001
|
|
|
73,277
|
|
|
—
|
|
|
—
|
|
|
|
2017
|
|
2,749
|
|
|
100,668
|
|
|
5,236
|
|
|
191,742
|
|
|
2018
|
|
3,706
|
|
|
135,714
|
|
|
5,294
|
|
|
193,866
|
|
|
Total
|
|
9,317
|
|
|
341,189
|
|
|
10,530
|
|
|
385,608
|
|
Jimmy D. Alberts
|
2015
|
|
662
|
|
|
24,242
|
|
|
—
|
|
|
—
|
|
2016
|
|
1,537
|
|
|
56,285
|
|
|
—
|
|
|
—
|
|
|
|
2017
|
|
2,111
|
|
|
77,305
|
|
|
3,619
|
|
|
132,528
|
|
|
2018
|
|
2,846
|
|
|
104,221
|
|
|
3,659
|
|
|
133,993
|
|
|
Total
|
|
7,156
|
|
|
262,053
|
|
|
7,278
|
|
|
266,521
|
|
Susan A. Li
|
2015
|
|
608
|
|
|
22,265
|
|
|
—
|
|
|
—
|
|
2016
|
|
1,581
|
|
|
57,896
|
|
|
—
|
|
|
—
|
|
|
|
2017
|
|
2,170
|
|
|
79,465
|
|
|
3,720
|
|
|
136,226
|
|
|
2018
|
|
2,925
|
|
|
107,114
|
|
|
3,760
|
|
|
137,691
|
|
|
Total
|
|
7,284
|
|
|
266,740
|
|
|
7,480
|
|
|
273,917
|
|
Jay M. Ignacio
|
2015
|
|
636
|
|
|
23,290
|
|
|
—
|
|
|
—
|
|
2016
|
|
1,627
|
|
|
59,581
|
|
|
—
|
|
|
—
|
|
|
|
2017
|
|
2,235
|
|
|
81,846
|
|
|
4,258
|
|
|
155,928
|
|
|
2018
|
|
3,013
|
|
|
110,336
|
|
|
4,305
|
|
|
157,649
|
|
|
Total
|
|
7,511
|
|
|
275,053
|
|
|
8,563
|
|
|
313,577
|
|
1.
|
Shares or Units of Stock That Have Not Vested
. The remaining installments of the 2015 RSUs vested on February 6, 2019. Of the remaining installments of the 2016 RSUs, one installment vested on February 5, 2019 and the remainder will vest on February 5, 2020. Of the remaining installments of the 2017 RSUs, one installment vested on January 31, 2019 and the remainder will vest in equal annual installments on January 31, 2020 and 2021. For the 2018 RSUs, one installment vested on January 31, 2019 and the remainder will vest in equal annual installments on January 31, 2020, 2021 and 2022.
|
2.
|
Market Value
. Market value is based upon the closing per‑share trading price of HEI Common Stock on the NYSE of $36.62 as of December 31, 2018.
|
3.
|
Number of Unearned Shares, Units or Other Rights That Have Not Vested
. Represents number of shares of HEI Common Stock that would be issued under the 2017-19 and 2018-20 LTIPs if performance goals are met at the target level at the end of the respective three-year performance periods.
|
|
|
Stock Awards
|
|||||
Name
|
|
Number of Shares Acquired on Vesting (#)
|
|
Value Realized on Vesting ($)
|
|||
Alan M. Oshima
|
|
10,818
|
|
(1)
|
|
352,450
|
|
Tayne S. Y. Sekimura
|
|
4,312
|
|
(1)
|
|
140,485
|
|
Jimmy D. Alberts
|
|
3,322
|
|
(1)
|
|
108,231
|
|
Susan A. Li
|
|
3,214
|
|
(1)
|
|
104,712
|
|
Jay M. Ignacio
|
|
3,307
|
|
(1)
|
|
107,742
|
|
Name
|
|
Number of Shares Acquired on Vesting
|
|
Compounded Dividend Equivalents
|
|
Total Shares Acquired on Vesting
|
Alan M. Oshima
|
|
9,931
|
|
887
|
|
10,818
|
Tayne S. Y. Sekimura
|
|
3,895
|
|
417
|
|
4,312
|
Jimmy D. Alberts
|
|
3,001
|
|
321
|
|
3,322
|
Susan A. Li
|
|
2,910
|
|
304
|
|
3,214
|
Jay M. Ignacio
|
|
2,995
|
|
312
|
|
3,307
|
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)
|
|
7.2
|
|
|
329,217
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
7.2
|
|
|
455,269
|
|
|
—
|
Tayne S. Y. Sekimura
|
HEI Retirement Plan (1)
|
|
27.6
|
|
|
2,384,453
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
27.6
|
|
|
723,938
|
|
|
—
|
|
HEI Executive Death Benefit (3)
|
|
—
|
|
|
141,843
|
|
|
—
|
Jimmy D. Alberts
|
HEI Retirement Plan (1)
|
|
6.3
|
|
|
269,770
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
6.3
|
|
|
1,176
|
|
|
—
|
Susan A. Li
|
HEI Retirement Plan (1)
|
|
28.8
|
|
|
2,761,659
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
28.8
|
|
|
80,182
|
|
|
—
|
|
HEI Executive Death Benefit (3)
|
|
—
|
|
|
130,966
|
|
|
—
|
Jay M. Ignacio
|
HEI Retirement Plan (1)
|
|
28.8
|
|
|
2,653,608
|
|
|
—
|
|
HEI Excess Pay Plan (2)
|
|
28.8
|
|
|
159,438
|
|
|
—
|
|
HEI Executive Death Benefit (3)
|
|
—
|
|
|
138,320
|
|
|
—
|
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, 2018, 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 ($275,000 in 2018 as indexed for inflation) and on the amount of annual benefits that can be paid from qualified retirement plans (the lesser of $220,000 in 2018 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 Hawaiian Electric 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 2018 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 4.31% for retirement benefits and 4.34% for executive death benefits as of December 31, 2018.
|
b.
|
Mortality Table – The RP-2018 Mortality Table (separate male and female rates) with generational projection using scale MP-2018 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, 2018.
|
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
|
—
|
|
—
|
|
(89,141
|
)
|
—
|
|
683,690
|
|
Tayne S.Y. Sekimura
|
—
|
|
—
|
|
(6,918
|
)
|
—
|
|
148,166
|
|
Jay M. Ignacio
|
—
|
|
—
|
|
(13,427
|
)
|
—
|
|
272,188
|
|
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 up to 100% of annual base salary in excess of the compensation limit set forth in Internal Revenue Code Section 401(a)(17) ($275,000 in 2018, as indexed for inflation) and up to 80% of any incentive compensation paid in cash. In 2018, there were no matching or other employer contributions under the plan. The deferred amounts are credited with gains/losses of deemed investments chosen by the participant from a designated list of publicly traded mutual funds and other investment offerings. Earnings are not above-market or preferential and therefore are not included in the 2018 Summary Compensation Table above. The distribution of accounts from the plan is triggered by disability, death or separation from service (including retirement) and will be delayed for a 6-month period to the extent necessary to comply with Internal Revenue Code Section 409A. A participant may elect to receive distributions triggered by separation from service in a lump sum or in substantially equal payments spread over a period not to exceed 15 years. Lump sum benefits are payable in the event of disability or death.
|
2.
|
Amounts in this column include contributions reported in the Summary Compensation Table for each year in which each executive listed above was a named executive officer.
|
Name/
Benefit Plan or Program
|
Retirement on 12/31/18
($) (1)
|
|
Termination due to death or disability
on 12/31/18 ($) (2)
|
|
Voluntary termination, termination for and without cause on
12/31/2018
($) (3)
|
|
Termination after change in control on 12/31/18
($) (4)
|
||||
Alan M. Oshima
|
|
|
|
|
|
|
|
|
|
|
|
Executive Incentive Compensation Plan (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (6)
|
729,654
|
|
|
729,654
|
|
|
—
|
|
|
1,457,261
|
|
Restricted Stock Units (7)
|
449,875
|
|
|
449,875
|
|
|
—
|
|
|
1,220,581
|
|
TOTAL
|
1,179,529
|
|
|
1,179,529
|
|
|
—
|
|
|
2,677,842
|
|
Tayne S. Y. Sekimura
|
|
|
|
|
|
|
|
|
|
|
|
Executive Incentive Compensation Plan (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (6)
|
204,303
|
|
|
204,303
|
|
|
—
|
|
|
406,777
|
|
Restricted Stock Units (7)
|
142,243
|
|
|
142,243
|
|
|
—
|
|
|
367,151
|
|
TOTAL
|
346,546
|
|
|
346,546
|
|
|
—
|
|
|
773,928
|
|
Jimmy D. Alberts
|
|
|
|
|
|
|
|
|
|
|
|
Executive Incentive Compensation Plan (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (6)
|
141,207
|
|
|
141,207
|
|
|
—
|
|
|
281,151
|
|
Restricted Stock Units (7)
|
109,289
|
|
|
109,289
|
|
|
—
|
|
|
282,011
|
|
TOTAL
|
250,496
|
|
|
250,496
|
|
|
—
|
|
|
563,162
|
|
Susan A. Li
|
|
|
|
|
|
|
|
|
|
|
|
Executive Incentive Compensation Plan (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (6)
|
145,124
|
|
|
145,124
|
|
|
—
|
|
|
288,955
|
|
Restricted Stock Units (7)
|
109,526
|
|
|
109,526
|
|
|
—
|
|
|
286,845
|
|
TOTAL
|
254,650
|
|
|
254,650
|
|
|
—
|
|
|
575,800
|
|
Jay M. Ignacio
|
|
|
|
|
|
|
|
|
|
|
|
Executive Incentive Compensation Plan (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Long-Term Incentive Plan (6)
|
166,071
|
|
|
166,071
|
|
|
—
|
|
|
330,791
|
|
Restricted Stock Units (7)
|
113,148
|
|
|
113,148
|
|
|
—
|
|
|
295,780
|
|
TOTAL
|
279,219
|
|
|
279,219
|
|
|
—
|
|
|
626,571
|
|
1.
|
Retirement payments & benefits
. All named executive officers were eligible for retirement as of December 31, 2018. 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 2018 Pension Benefits and 2018 Nonqualified Deferred Compensation tables above.
|
2.
|
Termination due to death or disability payments & benefits.
All named executive officers were eligible for death or disability payments & benefits as of December 31, 2018.
|
3.
|
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.
|
4.
|
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, 2018.
|
5.
|
Executive Incentive Compensation Plan (EICP).
Excludes amounts payable under the 2018 EICP because those amounts would have vested without regard to termination because the applicable performance period ended on December 31, 2018. 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 a lump sum payment to be made by Hawaiian Electric if the applicable performance goals are achieved. The plan documents provide that in the event of a change in control as defined by the EIP, the EICP award would be immediately paid out in cash at target level, pro-rated for completed months of service in the performance period. For the remaining unvested portion of the award, if there is no termination following a change in control, the EIP provides that: (i) the surviving entity or acquiring entity will assume all awards outstanding under the EICP or will substitute similar awards and such awards would vest in full upon a termination within 24 months following the change in control without cause or by the participant with good reason, as each term is defined by the EIP or (ii) to the extent the surviving 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).
|
6.
|
Long-Term Incentive Plan (LTIP).
Excludes amounts payable under the 2016-18 LTIP because those amounts would have vested without regard to termination because the applicable performance period ended on December 31, 2018. 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 a lump sum payment to be made by Hawaiian Electric if performance goals are achieved. The amounts shown are at target for all applicable plan years, pro-rated based upon service through December 31, 2018; actual payouts will depend upon performance achieved at the end of the plan cycle. The plan documents provide that in the event of a change in control as defined by the EIP, the LTIP award would be immediately paid out in cash at target level, pro-rated for completed months of service in the performance period. For the remaining unvested portion of the award, if there is no termination following a change in control, the EIP provides that: (i) the surviving entity or acquiring entity will assume all awards outstanding under the LTIP or will substitute similar awards and such awards would vest in full upon a termination within 24 months following the change in control without cause or by the participant with good reason, as each term is defined by the EIP or (ii) to the extent the surviving 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.
|
Restricted Stock Units (RSUs) not granted under LTIP.
Termination for or without cause results in the forfeiture of unvested RSUs not granted under LTIP. Termination due to death, disability or retirement results in pro-rata vesting of RSUs not granted under LTIP. The EIP provides that in the event of a change in control as defined by the EIP, either (i) the surviving or acquiring entity will assume all outstanding RSUs not granted under LTIP or will substitute similar awards and such awards would vest in full upon a termination within 24 months following the change in control without cause or by the participant with good reason, as defined by the EIP 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, 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.
|
|
2018
|
||
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
($)
|
|||
Kevin M. Burke (3)
|
45,000
|
|
|
74,438
|
|
|
119,438
|
|
Richard J. Dahl (4)
|
4,000
|
|
|
—
|
|
|
4,000
|
|
Timothy E. Johns, Chairman, Audit Committee
|
55,000
|
|
|
55,000
|
|
|
110,000
|
|
Micah A. Kane
|
49,000
|
|
|
55,000
|
|
|
104,000
|
|
Bert A. Kobayashi, Jr.
|
49,957
|
|
|
55,000
|
|
|
104,957
|
|
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 $55,000, as described above under “Stock Awards.” These equity grants were made on June 29, 2018.
|
3.
|
In addition to the annual stock award granted on June 29, 2018, Mr. Burke also received a new director stock grant on January 1, 2018 when he joined the Hawaiian Electric Board.
|
4.
|
Messrs. Dahl, Taketa and Watanabe also served on the HEI Board for all of 2018. Information concerning their compensation for such service will be set forth in HEI's 2019 Proxy Statement.
|
Name
|
Hawaiian Electric Board ($) (1)
|
|
Hawaiian Electric Audit
Committee ($) |
|
Hawaiian Electric
Nonvoting Representative
to HEI Compensation Committee ($) |
|
Total Fees Earned
or Paid in
Cash ($)
|
||||
Kevin M. Burke
|
45,000
|
|
|
—
|
|
|
—
|
|
|
45,000
|
|
Richard J. Dahl
|
—
|
|
|
4,000
|
|
|
—
|
|
|
4,000
|
|
Timothy E. Johns
|
45,000
|
|
|
10,000
|
|
|
—
|
|
|
55,000
|
|
Micah A. Kane
|
45,000
|
|
|
4,000
|
|
|
—
|
|
|
49,000
|
|
Bert A. Kobayashi, Jr.
|
45,000
|
|
|
—
|
|
|
4,957
|
|
|
49,957
|
|
Kelvin H. Taketa
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Jeffrey N. Watanabe
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
1.
|
Represents $45,000 annual cash retainer for board service.
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin M. Burke
|
2,157
|
|
|
|
|
|
|
|
|
2,157
|
|
|||
Richard J. Dahl
|
6,774
|
|
|
|
|
|
|
|
|
6,774
|
|
|||
Timothy E. Johns
|
41,785
|
|
|
|
|
|
|
|
|
41,785
|
|
|||
Micah A. Kane
|
10,392
|
|
|
|
|
|
|
|
|
10,392
|
|
|||
Bert A. Kobayashi, Jr.
|
6,194
|
|
|
|
|
|
|
|
|
6,194
|
|
|||
Kelvin H. Taketa
|
40,402
|
|
|
|
|
|
|
|
|
40,402
|
|
|||
Jeffrey N. Watanabe
|
43,031
|
|
|
|
|
5
|
|
|
|
|
43,036
|
|
||
Employee director
|
|
|
|
|
|
|
|
|
|
|||||
Constance H. Lau
|
586,871
|
|
|
|
|
|
|
4,470
|
|
|
591,341
|
|
||
Employee director and Named Executive Officer
|
|
|
|
|
|
|
|
|
|
|||||
Alan M. Oshima
|
|
|
55,637
|
|
|
|
|
2,824
|
|
|
58,461
|
|
||
Other Named Executive Officers
|
|
|
|
|
|
|
|
|
|
|||||
Jimmy D. Alberts
|
16,818
|
|
|
|
|
|
|
631
|
|
|
17,449
|
|
||
Jay M. Ignacio
|
22,893
|
|
|
|
|
|
|
|
|
22,893
|
|
|||
Susan A. Li
|
11,776
|
|
|
|
|
|
|
653
|
|
|
12,429
|
|
||
Tayne S. Y. Sekimura
|
45,806
|
|
|
|
|
|
|
823
|
|
|
46,629
|
|
||
All directors and executive officers as a group (17 persons)
|
862,504
|
|
|
56,774
|
|
|
461
|
|
|
10,895
|
|
|
930,634
|
|
(1)
|
Includes the following shares held as of February 14, 2019 in the form of stock units in the HEI common stock fund pursuant to the HEI Retirement Savings Plan: approximately 115 shares for Ms. Lau; 1,741 shares for Ms. Li; 1,134 shares for Ms. Sekimura; 166 shares for Mr. Ignacio and 8,351 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 14, 2019 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 14, 2019, 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
|
|
2018
|
2017
|
|||||
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, review of registration statements and issuance of consents)
|
$
|
1,170,000
|
|
|
$
|
1,375,000
|
|
Audit-related fees (primary consisted of fees associated with agreed upon procedures in 2017 and 2018, statutory audits, consultation on accounting and reporting matters and pre-implementation assessment of controls in 2017 and 2018)
|
1,370,000
|
|
|
468,000
|
|
||
Tax fees (consisted of tax return review)
|
26,000
|
|
|
—
|
|
||
All other fees
|
—
|
|
|
—
|
|
||
|
$
|
2,566,000
|
|
|
$
|
1,843,000
|
|
ALLETTE, Inc.
|
MDU Resources Group Inc.
|
Alliant Energy Corp.
|
MGE Energy Inc.
|
Ameren Corp.
|
NextEra Energy Inc.
|
American Electric Power Co.
|
NiSource Inc.
|
Avangrid
|
Northwestern Corp.
|
Avista Corp.
|
OGE Energy Corp.
|
Black Hills Corp.
|
Otter Tail Corp.
|
Centerpoint Energy Inc.
|
PG&E Corp.
|
CMS Energy Corp.
|
Pinnacle West Capital Corp.
|
Consolidated Edison Inc.
|
PNM Resources Inc.
|
Dominion Energy Inc.
|
Portland General Electric
|
DTE Energy Co.
|
PPL Corp.
|
Duke Energy Corp.
|
Public Service Enterprise Group Inc.
|
Edison International
|
SCANA Corp.
|
El Paso 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 ¹
|
Westar Energy ¹
|
Hawaiian Electric Industries Inc.
|
Xcel Energy Inc.
|
IDACORP Inc.
|
|
1.
|
After peer data was established for 2018 compensation, Great Plains Energy and Westar Energy announced they were merging. The combined entity remains in the EEI Index as Evergy, Inc.
|
|
Years ended December 31
|
|||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
||||
UTILITY NET INCOME
|
|
|
|
|
||||||||
GAAP (as reported)
|
$
|
143.7
|
|
$
|
120.0
|
|
$
|
142.3
|
|
|
||
Excluding special items (after‑tax) for EICP and LTIP purposes:
|
|
|
|
|
||||||||
Ongoing impacts relating to the termination of merger
2
|
12.4
|
|
|
|
|
|||||||
Federal tax reform and related impacts
3
|
(4.7
|
)
|
9.2
|
|
—
|
|
|
|||||
Non‑GAAP (adjusted) net income for 2018 EICP purposes
|
151.3
|
|
|
|
|
|
||||||
Excluding special items (after‑tax) for LTIP purposes only:
|
|
|
|
|
||||||||
Rate adjustment mechanism reversion to lagged method
4
|
—
|
|
13.9
|
|
—
|
|
|
|||||
Costs related to the terminated merger with NextEra Energy
|
—
|
|
—
|
|
0.1
|
|
|
|||||
Costs related to the terminated LNG contract
|
—
|
|
—
|
|
2.1
|
|
|
|||||
Non‑GAAP (adjusted) net income for 2016-18 LTIP purposes
|
$
|
151.3
|
|
$
|
143.0
|
|
$
|
144.5
|
|
|
|
|
UTILITY RETURN ON AVERAGE COMMON EQUITY (%)
|
|
|
|
|
||||||||
Based on GAAP
|
7.6
|
|
6.6
|
|
8.1
|
|
|
|||||
Based on non‑GAAP (adjusted) for 2016‑18 LTIP purposes
|
7.9
|
|
7.8
|
|
8.2
|
|
|
|||||
HEI CONSOLIDATED NET INCOME
|
|
|
|
|
||||||||
GAAP (as reported)
|
$
|
201.8
|
|
$
|
165.3
|
|
$
|
248.3
|
|
$
|
159.9
|
|
Excluding special items (after‑tax) for LTIP purposes:
|
|
|
|
|
||||||||
Ongoing impacts relating to the termination of merger
2
|
12.4
|
|
—
|
|
—
|
|
—
|
|
||||
ASB corporate campus transition costs
|
0.7
|
|
—
|
|
—
|
|
—
|
|
||||
Consulting fees
|
1.0
|
|
—
|
|
—
|
|
—
|
|
||||
Federal tax reform and related impacts
3
|
(11.2
|
)
|
14.2
|
|
—
|
|
—
|
|
||||
Rate adjustment mechanism reversion to lagged method
4
|
—
|
|
13.9
|
|
—
|
|
—
|
|
||||
(Income) expenses relating to terminated merger with NextEra Energy
|
—
|
|
—
|
|
(60.3
|
)
|
15.8
|
|
||||
Costs related to the terminated LNG contract
|
—
|
|
—
|
|
2.1
|
|
—
|
|
||||
ASB pension defeasement
|
1.0
|
|
0.3
|
|
—
|
|
—
|
|
||||
Non‑GAAP (adjusted) net income for 2016‑18 LTIP purposes
|
$
|
205.7
|
|
$
|
193.6
|
|
$
|
190.1
|
|
$
|
175.7
|
|
HEI CONSOLIDATED BASIC EARNINGS PER SHARE
|
|
|
|
|
||||||||
Based on GAAP
|
$
|
1.85
|
|
$
|
1.52
|
|
$
|
2.30
|
|
$
|
1.50
|
|
Based on non‑GAAP (adjusted) for 2016‑18 LTIP purposes
|
1.89
|
|
1.78
|
|
1.76
|
|
1.65
|
|
1
|
Accounting principles generally accepted in the United States of America
|
2
|
Primarily reflects certain expenses related to the termination of the proposed merger with NextEra Energy, including Hawaiian Electric's liquid natural gas (LNG) project costs and adjustments to test year revenue requirements for customer benefit adjustments in the Hawaiian Electric and Maui Electric rate case decisions
|
3
|
For 2017, primarily reflects the impacts of lower rates enacted by federal tax reform on the deferred tax net asset balances in 2017. For 2018 EICP and LTIP purposes, reflects various tax adjustments for tax reform and related impacts.
|
4
|
Reflects reversion of the rate adjustment mechanism (RAM) to the lagged method of revenue recognition
|