Hawaiian Electric Industries Reports First Quarter 2016 Earnings

Diluted Earnings Per Share (EPS) of $0.30 and Core EPS[1] of $0.31

Board Declares Dividend of $0.31 Per Share

Company Release - 5/4/2016 1:15 PM ET

HONOLULU, May 4, 2016 /PRNewswire/ -- Hawaiian Electric Industries, Inc. (NYSE - HE) (HEI) today reported consolidated net income for common stock for the first quarter of 2016 of $32.4 million and diluted earnings per share (EPS) of $0.30 compared to $31.9 million and EPS of $0.31 for the first quarter of 2015.  Excluding after-tax costs associated with the pending merger with NextEra Energy, Inc. and the spin-off of ASB Hawaii, Inc. of $1.6 million and $4.7 million in the first quarter of 2016 and 2015, respectively, core earnings1 for the first quarter of 2016 were $33.9 million and core EPS1 of $0.31 compared to $36.6 million and $0.35, respectively for the first quarter of 2015.

"Hawaii continues to be a national leader in clean energy, with Hawaiian Electric achieving over 23 percent renewable energy in 2015 across the five island electric grids we serve.  Recently, our utilities filed updated energy plans charting a course to achieve our state's goal of 100 percent renewable energy by 2045, the most ambitious energy goal in the country.  A 100% renewable energy future is an exciting prospect, and we look forward to collaborating with others to make it happen," said Constance H. Lau, HEI president and chief executive officer.

"In the near term, it's critical for our utilities to continue executing initial action plans that lay the foundation for Hawaii's renewable future, including modernizing the power grid and plans for smart meters and other smart grid technologies; pursuing energy storage to support renewable energy integration; increasing customer options to manage energy use; and supporting electrification of transportation to help reduce reliance on fossil fuels for our cars and other vehicles."  




1 Non-GAAP measure which excludes merger-related and spin-off costs after-tax.  See the "Explanation of HEI's Use of Certain Unaudited Non-GAAP measures" and the related reconciliation.

"American Savings Bank continued to deliver solid results with excellent deposit growth and higher net interest income and margins in a strong Hawaii economy.  American's solid results enabled it to pay dividends of $9.0 million to HEI in the quarter while maintaining healthy capital levels," added Lau.

"With regard to our bank spin and utility merger transactions, our bank accomplished an important step towards its planned spin-off by filing its updated Form 10 with the Securities and Exchange Commission on April 1st.  And both NextEra Energy and the Hawaiian Electric companies just filed their post-evidentiary hearing reply briefs with the Hawaii Public Utilities Commission on May 2nd which was the final step before the PUC can render its decision.  We continue to believe that the right partner for Hawaiian Electric is NextEra Energy, which brings a powerful combination of renewable energy experience, operational and technological know-how and financial strength necessary for achieving Hawaii's 100 percent renewable energy goal."

HAWAIIAN ELECTRIC COMPANY EARNINGS

Hawaiian Electric Company's2 net income for the first quarter of 2016 was $25.4 million compared to $26.9 million in the first quarter of 2015.  The $1.5 million net income decline was mainly the result of higher depreciation expense as a result of increasing investments for improved customer reliability and greater system efficiency, and the integration of more renewable energy. 

Operations and maintenance expenses were relatively flat compared to the prior year quarter.  The first quarter of 2016 included higher than expected power supply improvement plan and liquefied natural gas consulting expenses compared to the first quarter of 2015 which included higher storm repair costs, bad debt reserves for one customer account and costs related to the damage to a combined heat and power generating unit.

 




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.


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.

 

AMERICAN SAVINGS BANK EARNINGS

American Savings Bank's (American) net income for the first quarter of 2016 was $12.7 million compared to $15.0 million in the fourth (or linked) quarter of 2015 and $13.5 million in the first quarter of 2015.  First quarter 2016 net income was $2.3 million lower than the linked quarter primarily driven by the following on an after-tax basis:

  • $2 million higher provision for loan losses mainly due to growth in lending in commercial real estate and a commercial credit charge-off in the first quarter of 2016 compared to lower provisioning during the fourth quarter of 2015 attributable to net recoveries on previously charged-off loans; and
  • $1 million lower noninterest income compared to the fourth quarter of 2015, which included gains from the sale of mortgage serving rights. 

These were partially offset by $1 million (after-tax) higher net interest income primarily attributable to loan and investment portfolio growth and higher yields on interest-earning assets in the first quarter of 2016.

Compared to the first quarter of 2015, net income declined by $0.8 million primarily driven by the following on an after-tax basis:

  • $2 million higher provision for loan losses mainly driven by commercial real estate loan growth and a commercial credit charge-off in the first quarter of 2016; and
  • $1 million higher noninterest expense primarily due to investment in our electronic banking platform and higher compensation expense. 

These were offset by $3 million (after-tax) higher net interest income in the first quarter of 2016 due to loan and investment portfolio growth and higher yields on interest-earning assets.

Loan growth was 2.2% annualized in the first quarter of 2016 driven largely by increases in commercial real estate and consumer loans.  American continues to expect to meet its target of mid-single digit loan growth for the full year. 

Total deposits were $5.1 billion at March 31, 2016, up $115 million or 9.1% annualized from December 31, 2015, primarily driven by the 6.5% annualized increase in low-cost core deposits.  Average cost of funds remained low at 0.23% for the first quarter of 2016, 1 basis point higher than the linked quarter and the prior year quarter.

Overall, American achieved solid profitability in the first quarter of 2016 with a return on average equity of 8.9% and a return on average assets of 0.84%.

For additional information, refer to the American news release issued on April 29, 2016.

HOLDING AND OTHER COMPANIES

The holding and other companies' net losses were $5.7 million in the first quarter of 2016 compared to $8.5 million in the first quarter of 2015.  Excluding after-tax costs of $1.5 million associated with the pending merger with NextEra Energy, Inc. and the spin-off of ASB Hawaii, Inc. in the first quarter of 2016 and $4.4 million in the first quarter of 2015, the holding and other companies' net losses in 2016 and 2015 were $4.2 million and $4.0 million, respectively.

BOARD DECLARES QUARTERLY DIVIDEND

On May 3, 2016, the board of directors maintained HEI's quarterly cash dividend of $0.31 cents per share, payable on June 15, 2016, to shareholders of record at the close of business on May 31, 2016 (ex-dividend date is May 26, 2016). The dividend is equivalent to an annual rate of $­­1.24 per share.

Dividends have been paid continuously since 1901. At the indicated annual dividend rate and the closing share price on May 3, 2016 of $32.74, HEI's yield is 3.8%.

WEBCAST AND CONFERENCE CALL TO DISCUSS EARNINGS AND EPS GUIDANCE

Hawaiian Electric Industries, Inc. will conduct a webcast and conference call to review its first quarter of 2016 earnings on Wednesday, May 4, 2016, 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 (888) 311-8190 and entering passcode: 70436517.  International parties may listen to the conference by calling (330) 863-3378 and entering passcode: 70436517 or by accessing the webcast on HEI's website at www.hei.com under the heading "Investor Relations."  HEI and Hawaiian Electric Company intend to continue to use HEI's website, www.hei.com, as a means of disclosing additional information.  Such disclosures will be included on HEI's website in the Investor Relations section.  Accordingly, investors should routinely monitor such portions of HEI's website, in addition to following HEI's, Hawaiian Electric Company's and American's press releases, HEI's and Hawaiian Electric Company's Securities and Exchange Commission (SEC) filings and HEI's public conference calls and webcasts.  The information on HEI's website is not incorporated by reference in this document or in HEI's and Hawaiian Electric Company's SEC filings unless, 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 18, 2016, by dialing (855) 859-2056 or (404) 537-3406 and entering passcode: 70436517.

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

NON-GAAP MEASURES

See "Explanation of HEI's Use of Certain Unaudited Non-GAAP Measures" and related reconciliations on pages 13 and 14 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 "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 "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, 2015 and HEI's future periodic reports that discuss important factors that could cause HEI's results to differ materially from those anticipated in such statements. These forward-looking statements speak only as of the date of the report, presentation or filing in which they are made. Except to the extent required by the federal securities laws, HEI, Hawaiian Electric Company, American and their subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



Three months ended March 31

(in thousands, except per share amounts)


2016


2015

Revenues





Electric utility


$

482,052



$

573,442


Bank


68,840



64,348


Other


68



72


Total revenues


550,960



637,862


Expenses





Electric utility


426,726



515,806


Bank


49,246



43,717


Other


6,137



8,833


Total expenses


482,109



568,356


Operating income (loss)





Electric utility


55,326



57,636


Bank


19,594



20,631


Other


(6,069)



(8,761)


Total operating income


68,851



69,506


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


(20,126)



(19,100)


Allowance for borrowed funds used during construction


662



499


Allowance for equity funds used during construction


1,739



1,413


Income before income taxes


51,126



52,318


Income taxes


18,301



19,979


Net income


32,825



32,339


Preferred stock dividends of subsidiaries


473



473


Net income for common stock


$

32,352



$

31,866


Basic earnings per common share


$

0.30



$

0.31


Diluted earnings per common share


$

0.30



$

0.31


Dividends per common share


$

0.31



$

0.31


Weighted-average number of common shares outstanding


107,620



103,281


Adjusted weighted-average shares


107,781



103,567


Net income (loss) for common stock by segment





Electric utility


$

25,367



$

26,874


Bank


12,673



13,475


Other


(5,688)



(8,483)


Net income for common stock


$

32,352



$

31,866


Comprehensive income attributable to Hawaiian Electric Industries, Inc.


$

41,152



$

35,924


Return on average common equity (twelve months ended)1


8.4

%


8.5

%


This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI and ASB Hawaii, Inc. 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, 2016 and 2015 returns on average common equity (twelve months ended March 31) were 9.0%.  See reconciliation of GAAP to non-GAAP measures.

 

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


(dollars in thousands)


March 31, 2016


December 31, 2015

Assets





Cash and cash equivalents


$

334,743



$

300,478


Accounts receivable and unbilled revenues, net


210,280



242,766


Available-for-sale investment securities, at fair value


906,295



820,648


Stock in Federal Home Loan Bank, at cost


11,218



10,678


Loans receivable held for investment, net


4,589,950



4,565,781


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


7,900



4,631


Property, plant and equipment, net of accumulated depreciation of $2,355,984 and $2,339,319 at the respective dates


4,423,567



4,377,658


Regulatory assets


888,408



896,731


Other


415,955



480,457


Goodwill


82,190



82,190


Total assets


$

11,870,506



$

11,782,018


Liabilities and shareholders' equity





Liabilities





Accounts payable


$

119,288



$

138,523


Interest and dividends payable


27,890



26,042


Deposit liabilities


5,139,932



5,025,254


Short-term borrowings—other than bank


95,485



103,063


Other bank borrowings


329,081



328,582


Long-term debt, net—other than bank


1,578,618



1,578,368


Deferred income taxes


700,782



680,877


Regulatory liabilities


383,793



371,543


Contributions in aid of construction


513,520



506,087


Defined benefit pension and other postretirement benefit plans liability


584,490



589,918


Other


421,155



471,828


Total liabilities


9,894,034



9,820,085


Preferred stock of subsidiaries - not subject to mandatory redemption


34,293



34,293


Shareholders' equity





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





Common stock, no par value, authorized 200,000,000 shares; issued and outstanding: 107,875,779 shares and 107,460,406 shares at the respective dates


1,635,890



1,629,136


Retained earnings


323,751



324,766


Accumulated other comprehensive loss, net of tax benefits


(17,462)



(26,262)


Total shareholders' equity


1,942,179



1,927,640


Total liabilities and shareholders' equity


$

11,870,506



$

11,782,018



The Consolidated Balance Sheet as of December 31, 2015 reflects the retrospective application of ASU No. 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs," which was adopted in first quarter 2016.


This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI and ASB Hawaii, Inc. filings with the SEC.

 

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




Three months ended March 31

(dollars in thousands, except per barrel amounts)


2016


2015

Revenues


$

482,052



$

573,442


Expenses





Fuel oil


113,740



176,806


Purchased power


115,859



136,007


Other operation and maintenance


103,908



104,002


Depreciation


46,781



44,243


Taxes, other than income taxes


46,438



54,748


Total expenses


426,726



515,806


Operating income


55,326



57,636


Allowance for equity funds used during construction


1,739



1,413


Interest expense and other charges, net


(17,308)



(16,325)


Allowance for borrowed funds used during construction


662



499


Income before income taxes


40,419



43,223


Income taxes


14,553



15,850


Net income


25,866



27,373


Preferred stock dividends of subsidiaries


229



229


Net income attributable to Hawaiian Electric


25,637



27,144


Preferred stock dividends of Hawaiian Electric


270



270


Net income for common stock


$

25,367



$

26,874


Comprehensive income attributable to Hawaiian Electric


$

26,383



$

26,896


OTHER ELECTRIC UTILITY INFORMATION





Kilowatthour sales (millions)





   Hawaiian Electric


1,557



1,527


   Hawaii Electric Light


258



253


   Maui Electric


270



264




2,085



2,044


Wet-bulb temperature (Oahu average; degrees Fahrenheit)


67.3



66.5


Cooling degree days (Oahu)


884



795


Average fuel oil cost per barrel


$

53.99



$

86.60









Twelve months ended March 31



2016


2015

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





   Hawaiian Electric


7.85



8.03


   Hawaii Electric Light


7.26



6.18


   Maui Electric


8.53



8.87


   Hawaiian Electric Consolidated


7.85



7.84



This information should be read in conjunction with the 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
CONSOLIDATED BALANCE SHEETS
(Unaudited)


(dollars in thousands, except par value)


March 31,
2016


December 31,
2015

Assets





Property, plant and equipment





Utility property, plant and equipment





Land


$

53,207



$

52,792


Plant and equipment


6,356,006



6,315,698


Less accumulated depreciation


(2,284,928)



(2,266,004)


Construction in progress


198,004



175,309


Utility property, plant and equipment, net


4,322,289



4,277,795


Nonutility property, plant and equipment, less accumulated depreciation of $1,230 and $1,229 at respective dates


7,375



7,272


Total property, plant and equipment, net


4,329,664



4,285,067


Current assets





Cash and cash equivalents


49,042



24,449


Customer accounts receivable, net


103,739



132,778


Accrued unbilled revenues, net


85,367



84,509


Other accounts receivable, net


6,773



10,408


Fuel oil stock, at average cost


48,404



71,216


Materials and supplies, at average cost


54,256



54,429


Prepayments and other


21,803



36,640


Regulatory assets


89,192



72,231


Total current assets


458,576



486,660


Other long-term assets





Regulatory assets


799,216



824,500


Unamortized debt expense


420



497


Other


74,495



75,486


Total other long-term assets


874,131



900,483


Total assets


$

5,662,371



$

5,672,210


Capitalization and liabilities





Capitalization





Common stock ($6 2/3 par value, authorized 50,000,000 shares; outstanding 15,805,327)


$

105,388



$

105,388


Premium on capital stock


578,926



578,930


Retained earnings


1,045,049



1,043,082


Accumulated other comprehensive income, net of income taxes


1,941



925


Common stock equity


1,731,304



1,728,325


Cumulative preferred stock — not subject to mandatory redemption


34,293



34,293


Long-term debt, net


1,278,916



1,278,702


Total capitalization


3,044,513



3,041,320


Current liabilities





Short-term borrowings from non-affiliates


12,998




Accounts payable


95,090



114,846


Interest and preferred dividends payable


27,015



23,111


Taxes accrued


129,239



191,084


Regulatory liabilities


5,416



2,204


Other


75,006



54,079


Total current liabilities


344,764



385,324


Deferred credits and other liabilities





Deferred income taxes


670,126



654,806


Regulatory liabilities


378,377



369,339


Unamortized tax credits


85,902



84,214


Defined benefit pension and other postretirement benefit plans liability


547,517



552,974


Other


77,652



78,146


Total deferred credits and other liabilities


1,759,574



1,739,479


Contributions in aid of construction


513,520



506,087


Total capitalization and liabilities


$

5,662,371



$

5,672,210



The Consolidated Balance Sheet as of December 31, 2015 reflects the retrospective application of ASU No. 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs," which was adopted in first quarter 2016.


This information should be read in conjunction with the 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, 2016


December 31, 2015


March 31, 2015

Interest and dividend income







Interest and fees on loans


$

48,437



$

47,136



$

45,198


Interest and dividends on investment securities


5,017



4,550



3,051


Total interest and dividend income


53,454



51,686



48,249


Interest expense







Interest on deposit liabilities


1,592



1,467



1,260


Interest on other borrowings


1,485



1,510



1,466


Total interest expense


3,077



2,977



2,726


Net interest income


50,377



48,709



45,523


Provision for loan losses


4,766



839



614


Net interest income after provision for loan losses


45,611



47,870



44,909


Noninterest income







Fees from other financial services


5,499



5,667



5,355


Fee income on deposit liabilities


5,156



5,746



5,315


Fee income on other financial products


2,205



2,006



1,889


Bank-owned life insurance


998



1,016



983


Mortgage banking income


1,195



1,003



1,822


Other income, net


333



1,387



735


Total noninterest income


15,386



16,825



16,099


Noninterest expense







Compensation and employee benefits


22,434



23,705



21,766


Occupancy


4,138



4,115



4,113


Data processing


3,172



3,002



3,116


Services


2,911



2,474



2,341


Equipment


1,663



1,578



1,701


Office supplies, printing and postage


1,365



1,452



1,483


Marketing


861



844



841


FDIC insurance


884



881



811


Other expense


3,975



3,991



4,205


Total noninterest expense


41,403



42,042



40,377


Income before income taxes


19,594



22,653



20,631


Income taxes


6,921



7,700



7,156


Net income


$

12,673



$

14,953



$

13,475


Comprehensive income


$

20,310



$

9,477



$

17,318


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





Return on average assets


0.84



1.01



0.96


Return on average equity


8.89



10.66



9.96


Return on average tangible common equity


10.39



12.48



11.74


Net interest margin


3.62



3.55



3.52


Net charge-offs to average loans outstanding


0.21



(0.08)



0.04


As of period end







Nonperforming assets to loans outstanding and real estate owned


1.03



1.02



0.80


Allowance for loan losses to loans outstanding


1.13



1.08



1.03


Tangible common equity to tangible assets


8.08



8.05



8.18


Tier-1 leverage ratio


8.7



8.8



8.9


Total capital ratio


13.2



13.3



13.2


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


$

9.0



$

7.5



$

7.5



This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI and ASB Hawaii, Inc. 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)



March 31, 2016

December 31, 2015

(in thousands)





Assets





Cash and due from banks


$

110,200



$

127,201


Interest-bearing deposits


120,428



93,680


Available-for-sale investment securities, at fair value


906,295



820,648


Stock in Federal Home Loan Bank, at cost


11,218



10,678


Loans receivable held for investment


4,642,276



4,615,819


Allowance for loan losses


(52,326)



(50,038)


Net loans


4,589,950



4,565,781


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


7,900



4,631


Other


312,333



309,946


Goodwill


82,190



82,190


Total assets


$

6,140,514



$

6,014,755


Liabilities and shareholder's equity





Deposit liabilities–noninterest-bearing


$

1,541,402



$

1,520,374


Deposit liabilities–interest-bearing


3,598,530



3,504,880


Other borrowings


329,081



328,582


Other


99,605



101,029


Total liabilities


5,568,618



5,454,865


Common stock


1



1


Additional paid in capital


341,192



340,496


Retained earnings


240,337



236,664


Accumulated other comprehensive loss, net of tax benefits





     Net unrealized gains (losses) on securities

$

5,556



$

(1,872)



     Retirement benefit plans

(15,190)


(9,634)


(15,399)


(17,271)


Total shareholder's equity


571,896



559,890


Total liabilities and shareholder's equity


$

6,140,514



$

6,014,755



This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI and ASB Hawaii, Inc. 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 the utility and HEI.  Management believes these non-GAAP measures provide useful information and are a better indicator of the companies' core operating activities.  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 the utility and HEI consolidated.

The reconciling adjustment from GAAP earnings to core earnings is limited to the costs related to the pending merger between HEI and NextEra Energy, Inc. and the spin-off of ASB Hawaii, Inc.  For more information on the pending merger, see HEI's definitive proxy statement on Form DEFM14A filed on March 26, 2015.  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 pending 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




Unaudited






($ in millions, except per share amounts)




Three months ended March 31


2016

2015

HEI CONSOLIDATED NET INCOME



GAAP (as reported)

$

32.4


$

31.9


Excluding special items (after-tax):



Costs related to pending merger with NextEra Energy, Inc. and spin-off of ASB Hawaii, Inc

1.6


4.7


Non-GAAP (core)

$

33.9


$

36.6


HEI CONSOLIDATED DILUTED EARNINGS PER SHARE


GAAP (as reported)

$

0.30


$

0.31


Excluding special items (after-tax):



Costs related to pending merger with NextEra Energy, Inc. and spin-off of ASB Hawaii, Inc

0.01


0.05


Non-GAAP (core)

$

0.31


$

0.35





Twelve months ended March 31


2016

2015

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



Based on GAAP

8.4

%

8.5

%

Based on non-GAAP (core)2

9.0

%

9.0

%




Note:  Columns may not foot due to rounding






1 Accounting principles generally accepted in the United States of America




2 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






($ in millions)




Three months ended March 31


2016

2015

HAWAIIAN ELECTRIC CONSOLIDATED NET INCOME



GAAP (as reported)

$

25.4


$

26.9


Excluding special items (after-tax):



Costs related to pending merger with NextEra Energy, Inc.


0.3


Non-GAAP (core)

$

25.4


$

27.1






Twelve months ended March 31


2016

2015

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



Based on GAAP

7.9

%

7.8

%

Based on non-GAAP (core)2

7.9

%

7.9

%





Three months ended March 31


2016

2015

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



GAAP (as reported)

$

103.9


$

104.0


Excluding O&M-related net income neutral items3

1.6


1.9


Excluding costs related to pending merger with  NextEra Energy, Inc.

0.1


0.4


Non-GAAP (Adjusted other O&M expense)

$

102.2


$

101.7





Note:  Columns may not foot due to rounding






1  Accounting principles generally accepted in the United States of America




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




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

 

Contact:         

Clifford H. Chen                               

Telephone: (808) 543-7300


Manager, Investor Relations &
Strategic Planning

E-mail: ir@hei.com

Logo - http://photos.prnewswire.com/prnh/20110411/LA80136LOGO

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hawaiian-electric-industries-reports-first-quarter-2016-earnings-300262845.html

SOURCE Hawaiian Electric Industries, Inc.