HEI Reports First Quarter 2017 Earnings

Company Release - 5/5/2017 1:15 PM ET

HONOLULU, May 5, 2017 /PRNewswire/ --

Diluted Earnings Per Share (EPS) of $0.31

Hawaiian Electric Industries, Inc. (HEI) (NYSE - HE) today reported consolidated net income for common stock for the first quarter of 2017 of $34.2 million and diluted earnings per share (EPS) of $0.31 compared to $32.4 million and EPS of $0.30 for the first quarter of 2016.  Core earnings1 were $34.2 million and core EPS1 of $0.31 in the first quarter of 2017 compared to $35.3 million and $0.33, respectively, in the first quarter of 2016.

"Our utilities continue to be leaders in the transformation to clean energy and we're making significant upgrades to our grids to make them more resilient, reliable and renewable-ready.  At American Savings Bank, we continue to deliver solid year over year earnings growth and strong first quarter annualized deposit growth of 9.1% while maintaining healthy capital levels," said Constance H. Lau, HEI president and chief executive officer.

HAWAIIAN ELECTRIC COMPANY EARNINGS

Hawaiian Electric Company's2 net income for the first quarter of 2017 was $21.5 million compared to $25.4 million in the first quarter of 2016.  Core earnings were $21.5 million and $26.7 million in the first quarters of 2017 and 2016, respectively.  The $5.3 million core net income decrease from the prior year quarter was primarily driven by the following after-tax items:

_________________
Note:  Amounts indicated as "after-tax" in this earnings release are based upon adjusting items for the composite statutory tax rates of 39% for the utilities and 40% for the bank.
1  Non-GAAP measure that excludes income and costs after-tax related to the terminated merger with NextEra Energy, Inc., the cancelled spin-off of ASB Hawaii, Inc., and the termination of the liquefied natural gas (LNG) contract which required PUC approval of the merger with NextEra Energy, Inc. (the "Transaction Adjustments").  See the "Explanation of HEI's Use of Certain Unaudited Non-GAAP measures" and the related reconciliation.
2    Hawaiian Electric Company, unless otherwise defined, refers to the three utilities, Hawaiian Electric Company, Inc. on Oahu, Maui Electric Company, Limited, and Hawaii Electric Light Company, Inc.

  • $5 million lower net revenues3 mainly due to the expiration of the Hawaii Public Utilities Commission-approved 2013 settlement agreement with the Consumer Advocate that had allowed Hawaiian Electric to record calendar year rate adjustment mechanism revenues from January 1, 2014  - December 31, 20164; and
  • $1 million higher depreciation expense as a result of increasing investments for the integration of more renewable energy and improved customer reliability.

These items were partially offset by $1 million (after-tax) lower operations and maintenance expenses5 compared to the prior year quarter which included power supply improvement plan consulting expenses of $2 million (after-tax).  The first quarter of 2017 also included additional reserves for environmental costs of $1 million (after-tax). 

AMERICAN SAVINGS BANK EARNINGS

American Savings Bank's (American) net income for the first quarter of 2017 was $15.8 million compared to $16.2 million in the fourth (or linked) quarter of 2016 and $12.7 million in the first quarter of 2016.

Compared to the first quarter of 2016, the $3.1 million increase was primarily driven by $3 million (after-tax) higher net interest income mainly due to growth in the commercial real estate and consumer loan portfolios as well as the deployment of strong deposit growth into our investment portfolio.

_________________
3   Net revenues represent the after-tax impact of "Revenues" less the following expenses which are largely pass through items in revenues: "fuel oil," "purchased power" and "taxes, other than income taxes" as shown on the Hawaiian Electric Company, Inc. and Subsidiaries' Condensed Consolidated Statements of Income.
4   With the expiration of the 2013 settlement agreement with the Consumer Advocate that was approved by the PUC, in 2017 the Oahu rate adjustment mechanism (RAM) revenues revert to being recorded for accounting purposes from a calendar year recognition period to a period beginning on June 1 of each year through May 31 of the subsequent year.  The periods in which the cash reflecting RAM revenues is collected did not change as a result of the settlement agreement and have always been aligned to the June 1 to May 31 periods. Therefore, the expiration of the 2013 settlement agreement will have no impact on Hawaiian Electric Company cash collections.
5   Excludes net income neutral expenses covered by surcharges or by third parties and merger-related costs including the terminated LNG contract costs.  See the "Explanation of HEI's Use of Certain Unaudited Non-GAAP measures" and the related reconciliation.

Compared to the linked fourth quarter of 2016, the $0.4 million decrease was primarily driven by the following on an after-tax basis:

  • $1 million higher net interest income driven mainly by higher yields in our investment portfolio and growth in our consumer portfolio; and
  • $1 million lower noninterest expense.

These increases were offset by the following on an after-tax basis:

  • $1 million higher provision for loan losses including additional reserves for a commercial real estate relationship in the first quarter of 2017; and
  • $1 million lower noninterest income primarily due to lower mortgage banking income as a result of a reduction in residential mortgage refinancing activity.

Total loans were $4.7 billion at March 31, 2017, and included growth in the residential and consumer loan portfolio during the first quarter of 2017.  The reduction in our exposure to national credits, a loan payoff connected with a completed construction project, and the resolution and payoff of a prior nonperforming commercial loan contributed to the 1.2% annualized decline in our loan portfolio in the first quarter of 2017.                  

Total deposits were $5.7 billion at March 31, 2017, an increase of $126 million or 9.1% annualized increase from December 31, 2016.  Low-cost core deposits increased $140 million or 11.4% annualized increase from December 31, 2016.  The average cost of funds was 0.20% for the first quarter of 2017 compared to 0.22% for the fourth quarter of 2016 and 0.23% for the first quarter of 2016.

Overall, American achieved solid profitability in the first quarter of 2017 with a return on average equity of 10.8% and a return on average assets of 0.98%.

For additional information, refer to the American news release issued on April 28, 2017.

HOLDING AND OTHER COMPANIES

The holding and other companies' net losses were $3.1 million in the first quarter of 2017 compared to the $5.7 million net loss in the first quarter of 2016.  Excluding the Transaction Adjustments which totaled $1.5 million in the first quarter of 2016, holding and other companies' net losses were $3.1 million and $4.2 million in the first quarters of 2017 and 2016, respectively.  The lower net loss was primarily driven by tax benefits in the first quarter of 2017 related to the adoption of an accounting standard update on share-based compensation.

WEBCAST AND CONFERENCE CALL TO DISCUSS EARNINGS AND EPS GUIDANCE

HEI will conduct a webcast and conference call to review its first quarter of 2017 earnings and 2017 EPS guidance on Friday, May 5, 2017, at 8:00 a.m. Hawaii time (2:00 p.m. Eastern time).

Interested parties within the United States may listen to the conference by calling (844) 834-0652 and international parties may listen to the conference by calling (412) 317-5198 or by accessing the webcast on HEI's website, www.hei.com under the heading "Investor Relations."  HEI and Hawaiian Electric Company intend to continue to use HEI's website as a means of disclosing additional information.  Such disclosures will be included on HEI's website in the Investor Relations section.  Accordingly, investors should routinely monitor such portions of HEI's website, in addition to following HEI's, Hawaiian Electric Company's and American's press releases, HEI's and Hawaiian Electric Company's Securities and Exchange Commission (SEC) filings and HEI's public conference calls and webcasts. The information on HEI's website is not incorporated by reference in this document or in HEI's and Hawaiian Electric Company's SEC filings unless, and except to the extent, specifically incorporated by reference. Investors may also wish to refer to the Public Utilities Commission of the State of Hawaii (PUC) website at dms.puc.hawaii.gov/dms in order to review documents filed with and issued by the PUC. No information on the PUC website is incorporated by reference in this document or in HEI's and Hawaiian Electric Company's SEC filings.

An online replay of the webcast will be available at the same website beginning about two hours after the event. Replays of the conference call will also be available approximately two hours after the event through May 19, 2017, by dialing (877) 344-7529 or (412) 317-0088 and entering passcode: 10104146.

HEI supplies power to approximately 95% of Hawaii's population through its electric utilities, Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited and provides a wide array of banking and other financial services to consumers and businesses through American Savings Bank, F.S.B., one of Hawaii's largest financial institutions.

NON-GAAP MEASURES

See "Explanation of HEI's Use of Certain Unaudited Non-GAAP Measures" and related reconciliations on pages 12 to 13 of this release.

FORWARD-LOOKING STATEMENTS

This release may contain "forward-looking statements," which include statements that are predictive in nature, depend upon or refer to future events or conditions, and usually include words such as "will," "expects," "anticipates," "intends," "plans," "believes," "predicts," "estimates" or similar expressions. In addition, any statements concerning future financial performance, ongoing business strategies or prospects or possible future actions are also forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are subject to risks, uncertainties and the accuracy of assumptions concerning HEI and its subsidiaries, the performance of the industries in which they do business and economic and market factors, among other things. These forward-looking statements are not guarantees of future performance.

Forward-looking statements in this release should be read in conjunction with the "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" discussions (which are incorporated by reference herein) set forth in HEI's Annual Report on Form 10-K for the year ended December 31, 2016 and HEI's future periodic reports that discuss important factors that could cause HEI's results to differ materially from those anticipated in such statements. These forward-looking statements speak only as of the date of the report, presentation or filing in which they are made. Except to the extent required by the federal securities laws, HEI, Hawaiian Electric Company, American and their subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



Three months ended March 31

(in thousands, except per share amounts)


2017


2016

Revenues





Electric utility


$

518,611



$

482,052


Bank


72,856



68,840


Other


95



68


Total revenues


591,562



550,960


Expenses





Electric utility


469,673



426,726


Bank


48,696



49,246


Other


5,331



6,137


Total expenses


523,700



482,109


Operating income (loss)





Electric utility


48,938



55,326


Bank


24,160



19,594


Other


(5,236)



(6,069)


Total operating income


67,862



68,851


Interest expense, net—other than on deposit liabilities and other bank borrowings


(19,568)



(20,126)


Allowance for borrowed funds used during construction


889



662


Allowance for equity funds used during construction


2,399



1,739


Income before income taxes


51,582



51,126


Income taxes


16,916



18,301


Net income


34,666



32,825


Preferred stock dividends of subsidiaries


473



473


Net income for common stock


$

34,193



$

32,352


Basic earnings per common share


$

0.31



$

0.30


Diluted earnings per common share


$

0.31



$

0.30


Dividends per common share


$

0.31



$

0.31


Weighted-average number of common shares outstanding


108,674



107,620


Weighted-average shares assuming dilution


108,858



107,781


Net income (loss) for common stock by segment





Electric utility


$

21,465



$

25,367


Bank


15,813



12,673


Other


(3,085)



(5,688)


Net income for common stock


$

34,193



$

32,352


Comprehensive income attributable to Hawaiian Electric Industries, Inc.


$

35,178



$

41,152


Return on average common equity (twelve months ended)1


12.5

%


8.4

%



This information should be read in conjunction with the condensed consolidated financial statements and the notes thereto in HEI filings with the SEC. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.



1 On a core basis, 2017 and 2016 returns on average common equity (twelve months ended March 31) were 9.4% and 9.1%, respectively.  See reconciliation of GAAP to non-GAAP measures.

 

Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)


(dollars in thousands)


March 31, 2017


December 31, 2016

Assets





Cash and cash equivalents


$

234,230



$

278,452


Accounts receivable and unbilled revenues, net


252,416



237,950


Available-for-sale investment securities, at fair value


1,228,922



1,105,182


Stock in Federal Home Loan Bank, at cost


11,706



11,218


Loans receivable held for investment, net


4,669,274



4,683,160


Loans held for sale, at lower of cost or fair value


10,454



18,817


Property, plant and equipment, net of accumulated depreciation of $2,475,562 and $2,444,348 at March 31, 2017 and December 31, 2016, respectively


4,641,514



4,603,465


Regulatory assets


945,409



957,451


Other


467,160



447,621


Goodwill


82,190



82,190


Total assets


$

12,543,275



$

12,425,506


Liabilities and shareholders' equity





Liabilities





Accounts payable


$

160,819



$

143,279


Interest and dividends payable


27,407



25,225


Deposit liabilities


5,675,090



5,548,929


Short-term borrowings—other than bank


2,300




Other bank borrowings


200,154



192,618


Long-term debt, net—other than bank


1,618,651



1,619,019


Deferred income taxes


740,506



728,806


Regulatory liabilities


419,940



410,693


Contributions in aid of construction


541,574



543,525


Defined benefit pension and other postretirement benefit plans liability


632,964



638,854


Other


423,989



473,512


Total liabilities


10,443,394



10,324,460


Preferred stock of subsidiaries - not subject to mandatory redemption


34,293



34,293


Shareholders' equity





Preferred stock, no par value, authorized 10,000,000 shares; issued: none





Common stock, no par value, authorized 200,000,000 shares; issued and outstanding: 108,745,265 shares and 108,583,413 shares  at March 31, 2017 and December 31, 2016, respectively


1,658,280



1,660,910


Retained earnings


439,452



438,972


Accumulated other comprehensive loss, net of tax benefits


(32,144)



(33,129)


Total shareholders' equity


2,065,588



2,066,753


Total liabilities and shareholders' equity


$

12,543,275



$

12,425,506



This information should be read in conjunction with the condensed consolidated financial statements and the notes thereto in HEI filings with the SEC.

 

 

Hawaiian Electric Company, Inc. (Hawaiian Electric) and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)




Three months ended March 31

(dollars in thousands, except per barrel amounts)


2017


2016

Revenues


$

518,611



$

482,052


Expenses





Fuel oil


144,270



113,740


Purchased power


127,124



115,859


Other operation and maintenance


100,240



103,908


Depreciation


48,216



46,781


Taxes, other than income taxes


49,823



46,438


Total expenses


469,673



426,726


Operating income


48,938



55,326


Allowance for equity funds used during construction


2,399



1,739


Interest expense and other charges, net


(17,504)



(17,308)


Allowance for borrowed funds used during construction


889



662


Income before income taxes


34,722



40,419


Income taxes


12,758



14,553


Net income


21,964



25,866


Preferred stock dividends of subsidiaries


229



229


Net income attributable to Hawaiian Electric


21,735



25,637


Preferred stock dividends of Hawaiian Electric


270



270


Net income for common stock


$

21,465



$

25,367


Comprehensive income attributable to Hawaiian Electric


$

21,924



$

26,383


OTHER ELECTRIC UTILITY INFORMATION





Kilowatthour sales (millions)





   Hawaiian Electric


1,525



1,557


   Hawaii Electric Light


253



258


   Maui Electric


260



270




2,038



2,085


Cooling degree days (Oahu)


884



884


Average fuel oil cost per barrel


$

65.85



$

53.99







Twelve months ended March 31


2017


2016

Return on average common equity (%) (simple average)





   Hawaiian Electric


7.88



7.85


   Hawaii Electric Light


7.47



7.26


   Maui Electric


8.07



8.53


   Hawaiian Electric Consolidated


7.84



7.85



This information should be read in conjunction with the condensed consolidated financial statements and the notes thereto in Hawaiian Electric filings with the SEC. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.

 

Hawaiian Electric Company, Inc. (Hawaiian Electric) and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)


(dollars in thousands, except par value)


March 31, 2017


December 31, 2016

Assets





Property, plant and equipment





Utility property, plant and equipment





  Land


$

53,157



$

53,153


  Plant and equipment


6,651,094



6,605,732


  Less accumulated depreciation


(2,399,222)



(2,369,282)


  Construction in progress


230,072



211,742


Utility property, plant and equipment, net


4,535,101



4,501,345


Nonutility property, plant and equipment, less accumulated depreciation of $1,232  at March 31, 2017 and December 31, 2016


7,410



7,407


Total property, plant and equipment, net


4,542,511



4,508,752


Current assets





Cash and cash equivalents


13,207



74,286


Customer accounts receivable, net


117,990



123,688


Accrued unbilled revenues, net


97,632



91,693


Other accounts receivable, net


20,388



5,233


Fuel oil stock, at average cost


73,874



66,430


Materials and supplies, at average cost


57,045



53,679


Prepayments and other


28,934



23,100


Regulatory assets


81,952



66,032


Total current assets


491,022



504,141


Other long-term assets





Regulatory assets


863,457



891,419


Unamortized debt expense


183



208


Other


71,869



70,908


Total other long-term assets


935,509



962,535


Total assets


$

5,969,042



$

5,975,428


Capitalization and liabilities





Capitalization





Common stock ($6 2/3 par value, authorized 50,000,000 shares; outstanding 16,019,785 shares  at March 31, 2017 and December 31, 2016)


$

106,818



$

106,818


Premium on capital stock


601,491



601,491


Retained earnings


1,091,323



1,091,800


Accumulated other comprehensive income (loss), net of income taxes


137



(322)


Common stock equity


1,799,769



1,799,787


Cumulative preferred stock — not subject to mandatory redemption


34,293



34,293


Long-term debt, net


1,318,871



1,319,260


Total capitalization


3,152,933



3,153,340


Current liabilities





Short-term borrowings from non-affiliates


1,500




Accounts payable


129,863



117,814


Interest and preferred dividends payable


26,174



22,838


Taxes accrued


131,330



172,730


Regulatory liabilities


2,691



3,762


Other


56,235



55,221


Total current liabilities


347,793



372,365


Deferred credits and other liabilities





Deferred income taxes


746,017



733,659


Regulatory liabilities


417,249



406,931


Unamortized tax credits


91,012



88,961


Defined benefit pension and other postretirement benefit plans liability


593,856



599,726


Other


78,608



76,921


Total deferred credits and other liabilities


1,926,742



1,906,198


Contributions in aid of construction


541,574



543,525


Total capitalization and liabilities


$

5,969,042



$

5,975,428



This information should be read in conjunction with the condensed consolidated financial statements and the notes thereto in Hawaiian Electric filings with the SEC.

 

American Savings Bank, F.S.B.
STATEMENTS OF INCOME DATA
(Unaudited)




Three months ended

(in thousands)


March 31,
2017


December 31,
2016


March 31,
2016

Interest and dividend income







Interest and fees on loans


$

50,742



$

51,203



$

48,437


Interest and dividends on investment securities


6,980



4,965



5,017


Total interest and dividend income


57,722



56,168



53,454


Interest expense







Interest on deposit liabilities


2,103



2,013



1,592


Interest on other borrowings


816



1,172



1,485


Total interest expense


2,919



3,185



3,077


Net interest income


54,803



52,983



50,377


Provision for loan losses


3,907



1,497



4,766


Net interest income after provision for loan losses


50,896



51,486



45,611


Noninterest income







Fees from other financial services


5,610



5,585



5,499


Fee income on deposit liabilities


5,428



5,714



5,156


Fee income on other financial products


1,866



2,144



2,205


Bank-owned life insurance


983



1,017



998


Mortgage banking income


789



1,529



1,195


Other income, net


458



470



333


Total noninterest income


15,134



16,459



15,386


Noninterest expense







Compensation and employee benefits


23,237



22,920



22,434


Occupancy


4,154



4,077



4,138


Data processing


3,280



3,431



3,172


Services


2,360



2,961



2,911


Equipment


1,748



1,745



1,663


Office supplies, printing and postage


1,535



1,644



1,365


Marketing


517



982



861


FDIC insurance


728



839



884


Other expense


4,311



4,539



3,975


Total noninterest expense


41,870



43,138



41,403


Income before income taxes


24,160



24,807



19,594


Income taxes


8,347



8,590



6,921


Net income


$

15,813



$

16,217



$

12,673


Comprehensive income


$

16,648



$

2,540



$

20,310


OTHER BANK INFORMATION (annualized %, except as of period end)





Return on average assets


0.98



1.02



0.84


Return on average equity


10.82



11.09



8.89


Return on average tangible common equity


12.58



12.90



10.39


Net interest margin


3.68



3.59



3.62


Efficiency ratio


59.87



62.12



62.96


Net charge-offs to average loans outstanding


0.29



0.40



0.21


As of period end







Nonaccrual loans to loans receivable held for investment


0.41



0.49



1.01


Allowance for loan losses to loans outstanding


1.19



1.17



1.13


Tangible common equity to tangible assets


7.78



7.82



8.08


Tier-1 leverage ratio


8.5



8.6



8.7


Total capital ratio


13.6



13.4



13.2


Dividend paid to HEI (via ASB Hawaii, Inc.) ($ in millions)


$

9.4



$

9.0



$

9.0



This information should be read in conjunction with the condensed consolidated financial statements and the notes thereto in HEI filings with the SEC. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.

 

American Savings Bank, F.S.B.
BALANCE SHEETS DATA
(Unaudited)


(in thousands)

March 31, 2017

December 31, 2016

Assets





Cash and due from banks


$

125,901



$

137,083


Interest-bearing deposits


94,573



52,128


Restricted cash




1,764


Available-for-sale investment securities, at fair value


1,228,922



1,105,182


Stock in Federal Home Loan Bank, at cost


11,706



11,218


Loans receivable held for investment


4,725,271



4,738,693


Allowance for loan losses


(55,997)



(55,533)


Net loans


4,669,274



4,683,160


Loans held for sale, at lower of cost or fair value


10,454



18,817


Other


336,626



329,815


Goodwill


82,190



82,190


Total assets


$

6,559,646



$

6,421,357


Liabilities and shareholder's equity





Deposit liabilities–noninterest-bearing


$

1,696,390



$

1,639,051


Deposit liabilities–interest-bearing


3,978,700



3,909,878


Other borrowings


200,154



192,618


Other


98,223



101,635


Total liabilities


5,973,467



5,843,182


Common stock


1



1


Additional paid in capital


343,435



342,704


Retained earnings


264,381



257,943


Accumulated other comprehensive loss, net of tax benefits





     Net unrealized losses on securities

$

(7,708)



$

(7,931)



     Retirement benefit plans

(13,930)


(21,638)


(14,542)


(22,473)


Total shareholder's equity


586,179



578,175


Total liabilities and shareholder's equity


$

6,559,646



$

6,421,357



This information should be read in conjunction with the condensed consolidated financial statements and the notes thereto in HEI filings with the SEC.


EXPLANATION OF HEI'S USE OF CERTAIN UNAUDITED NON-GAAP MEASURES

HEI and Hawaiian Electric Company management use certain non-GAAP measures to evaluate the performance of HEI and the utility.  Management believes these non-GAAP measures provide useful information and are a better indicator of the companies' core operating activities given the non-recurring nature of these items.  Core earnings and other financial measures as presented here may not be comparable to similarly titled measures used by other companies.  The accompanying tables provide a reconciliation of reported GAAP1 earnings to non-GAAP core earnings and the adjusted return on average common equity (ROACE) for HEI and the utility.

The reconciling adjustments from GAAP earnings to core earnings are limited to income, costs and associated taxes related to the terminated merger between HEI and NextEra Energy, Inc., the cancelled spin-off of ASB Hawaii, Inc., and the termination of the liquefied natural gas (LNG) contract which required the Hawaii Public Utilities Commission approval of the merger with NextEra Energy, Inc.  For more information on the transactions, see HEI's Form 8-K filed on July 18, 2016 and HEI's Form 8-K filed on July 19, 2016.  Management does not consider these items to be representative of the company's fundamental core earnings.

The accompanying table also provides the calculation of utility GAAP O&M adjusted for costs related to the terminated merger discussed above. "O&M-related net income neutral items" which are O&M expenses covered by specific surcharges or by third parties have also been excluded.  These "O&M-related net income neutral items" are grossed-up in revenue and expense and do not impact net income.

RECONCILIATION OF GAAP1 TO NON-GAAP MEASURES




Hawaiian Electric Industries, Inc. and Subsidiaries (HEI)

Unaudited


Three months ended March 31

($ in millions, except per share amounts)


2017

2016

HEI CONSOLIDATED COSTS RELATED TO THE TERMINATED MERGER WITH NEXTERA ENERGY AND CANCELLED SPIN-OFF OF ASB HAWAII




Pre-tax expenses


$


$

1.6


Current income tax benefits




After-tax expenses


$


$

1.6


HEI CONSOLIDATED LNG CONTRACT COSTS2




Pre-tax expenses


$


$

2.2


Current income tax benefits



(0.9)


After-tax expenses


$


$

1.3


HEI CONSOLIDATED NET INCOME




GAAP (as reported)


$

34.2


$

32.4


Excluding special items (after-tax):




Costs related to the terminated merger with NextEra Energy and cancelled spin-off of ASB Hawaii



1.6


Costs related to the terminated LNG contract2



1.3


Non-GAAP (core) net income


$

34.2


$

35.3


HEI CONSOLIDATED DILUTED EARNINGS PER COMMON SHARE



GAAP (as reported)


$

0.31


$

0.30


Excluding special items (after-tax):




Costs related to the terminated merger with NextEra Energy and cancelled spin-off of ASB Hawaii



0.01


Costs related to the terminated LNG contract2



0.01


Non-GAAP (core) diluted earnings per common share


$

0.31


$

0.33




Twelve months ended March 31



2017

2016

HEI CONSOLIDATED RETURN ON AVERAGE COMMON EQUITY (ROACE) (simple average)




Based on GAAP


12.5

%

8.4

%

Based on non-GAAP (core)3


9.4

%

9.1

%






Note:  Columns may not foot due to rounding

1  Accounting principles generally accepted in the United States of America

2  The LNG contract was terminated as it was conditioned on the merger with NextEra Energy closing

3  Calculated as core net income divided by average GAAP common equity

 

RECONCILIATION OF GAAP1 TO NON-GAAP MEASURES


Hawaiian Electric Company, Inc. and Subsidiaries

Unaudited


Three months ended March 31

($ in millions)


2017

2016

HAWAIIAN ELECTRIC CONSOLIDATED COSTS RELATED TO THE TERMINATED MERGER WITH NEXTERA ENERGY




Pre-tax expenses


$


$

0.1


Current income tax benefits




After-tax expenses


$


$


HAWAIIAN ELECTRIC CONSOLIDATED LNG CONTRACT COSTS2




Pre-tax expenses


$


$

2.2


Current income tax benefits



(0.9)


After-tax expenses


$


$

1.3


HAWAIIAN ELECTRIC CONSOLIDATED NET INCOME




GAAP (as reported)


$

21.5


$

25.4


Excluding special items (after-tax):




Costs related to the terminated merger with NextEra Energy




Costs related to the terminated LNG contract2



1.3


Non-GAAP (core) net income


$

21.5


$

26.7








Twelve months ended March 31



2017

2016

HAWAIIAN ELECTRIC CONSOLIDATED RETURN ON AVERAGE COMMON EQUITY (ROACE) (simple average)




Based on GAAP


7.84

%

7.85

%

Based on non-GAAP (core)3


7.88

%

7.95

%







Three months ended March 31

($ in millions)


2017

2016

HAWAIIAN ELECTRIC CONSOLIDATED OTHER OPERATION AND MAINTENANCE (O&M) EXPENSE




GAAP (as reported)


$

100.2


$

103.9


Excluding O&M-related net income neutral items4


1.1


1.6


Excluding costs related to the terminated merger with NextEra Energy



0.1


Excluding costs related to the terminated LNG contract2



2.2


Non-GAAP (Adjusted other O&M expense)


$

99.1


$

100.0






Note:  Columns may not foot due to rounding

1  Accounting principles generally accepted in the United States of America

2  The LNG contract was terminated as it was conditioned on the merger with NextEra Energy closing

3  Calculated as core net income divided by average GAAP common equity

4  Expenses covered by surcharges or by third parties recorded in revenues

 

Contact:

Clifford H. Chen

Telephone: (808) 543-7300


Treasurer & Manager, Investor Relations & Strategic Planning

E-mail:  ir@hei.com

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hei-reports-first-quarter-2017-earnings-300452132.html

SOURCE Hawaiian Electric Industries, Inc.