HONOLULU, Nov. 7, 2018 /PRNewswire/ -- Hawaiian
Electric Industries, Inc. (NYSE - HE) (HEI) today reported
consolidated net income for common stock for the third quarter of
2018 of $65.9 million and diluted
earnings per share (EPS) of $0.60
compared to $60.1 million and EPS of
$0.55 for the third quarter of
2017.
"We are pleased to report solid third quarter results from both
our utility and bank and are excited about the progress we're
making on our strategies across the company," said Constance H. Lau, president and CEO of HEI.
"Our utilities are quickly advancing Hawaii's clean energy transition now that key
foundational frameworks are in place, including for 100% renewable
power and grid modernization. For example, we're negotiating
contracts for seven solar-plus-storage projects across our three
utilities to add 260 megawatts of solar and more than a
gigawatt-hour of storage in the state's largest-ever renewable
energy procurement. As we advance toward 100% clean energy, we're
focused on ensuring we all move forward together, and that all
customers have access to affordable, reliable renewable
energy."
"Our bank delivered strong financial performance in the third
quarter, expanding its margin and improving profitability, while at
the same time continuing its focus on making banking easier for
customers and improving operational efficiency."
HAWAIIAN ELECTRIC COMPANY EARNINGS
Hawaiian Electric
Company's1 net income for the third quarter of 2018 was
$49.7 million compared to
$47.5 million in the third
quarter of 2017, an increase of $2.2
million primarily driven by the following after-tax
items:
- $12 million higher revenues from
rate adjustment mechanism (RAM) revenues, major projects interim
recovery (MPIR) revenues for the Schofield Generating Station that
was completed in June and rate relief from the interim decision in
Maui Electric's 2018 test year rate case and final decisions in
Hawaiian Electric's 2017 and Hawaii Electric Light's 2016 test year
rate cases;
- $5 million higher net income from
net favorable tax adjustments primarily related to differences
between the 2017 year-end tax accrual and the filing of the 2017
tax return (differences are largely related to the acceleration of
the deduction of 2018 pension contributions into the 2017 tax
year); and
- $1 million higher net income for
the quarter, representing the difference between actual third
quarter tax savings and the reduction in revenue requirement from
tax reform, which was based on test-year projections. Year to date,
the reduction in revenue requirement from tax reform was
approximately $3 million higher than
actual tax savings.
These items were partially offset by the following after-tax
items:
- $11 million higher O&M
expenses2 compared to 2017, primarily due to the reset
of pension costs as part of rate case decisions, and higher costs
for underground circuit repair work, generating station operation
and maintenance, and workers' compensation claims;
- $2 million higher depreciation
expense as a result of increasing investments for the integration
of more renewable energy, improved reliability and greater system
efficiency;
- $2 million lower allowance for
funds used during construction; and
- $1 million higher interest
expense from higher interest rates and increased borrowings.
|
___________________
|
|
|
Note: Amounts
indicated as after-tax in this earnings release are based upon
adjusting items using the current year composite statutory tax
rates of 25.75% for the utilities and 26.79% for the
bank.
|
|
|
|
1
|
Hawaiian Electric
Company, unless otherwise defined, refers to the three utilities,
Hawaiian Electric Company, Inc. on Oahu, Maui Electric Company,
Limited for Maui County, and Hawaii Electric Light Company, Inc. on
Hawaii Island.
|
|
|
|
2
|
Excludes net income
neutral expenses covered by surcharges or by third parties.
See the "Explanation of HEI's Use of Certain Unaudited Non-GAAP
Measures" and the related reconciliation accompanying this
release.
|
AMERICAN SAVINGS BANK EARNINGS
American Savings Bank's
(American) third quarter of 2018 net income was $21.2 million compared to $20.6 million in the second, or linked, quarter
and $17.6 million in the prior
year quarter.
Compared to the linked quarter of 2018, the $0.7 million net income increase in the third
quarter was primarily driven by higher net interest income, mainly
due to higher yields on interest earning assets, higher bank-owned
life insurance income and lower noninterest expense, which offset
higher provision expense that was primarily due to additional loan
loss reserves for the consumer loan portfolio.
Compared to the third quarter of 2017, the $3.6 million higher net income in the third
quarter of 2018 was primarily driven by higher net interest income
and $3.6 million lower income tax
expense in the third quarter of 2018 compared to the third quarter
of 2017, primarily due to the benefits of the lower federal
corporate tax rate from tax reform. These items were partially
offset by higher provision for loan losses due to increased
reserves for loan growth and additional loan loss reserves for the
consumer loan portfolio.
Total loans were $4.8 billion at
September 30, 2018, up $83 million or 2.4% annualized from December 31, 2017, driven mainly by increases in
home equity lines of credit and commercial and consumer loans of
$90 million.
Total deposits were $6.1 billion
at September 30, 2018, an increase of
$240 million or 5.4% annualized from
December 31, 2017, including $100
million in repurchase agreements that were transferred into
deposit accounts. Excluding such transfer, total deposits
increased by 3.1% annualized. Cost of funds was 26 basis
points for the third quarter of 2018, up 2 basis points from the
linked quarter and up 6 basis points from the prior year
quarter.
American's return on average equity3 for the third
quarter of 2018 was 13.80%, compared to 13.56% in the linked
quarter and 11.64% in the third quarter of 2017. Return on
average assets was 1.22% for the third quarter of 2018, compared to
1.20% in the linked quarter and 1.07% in the same quarter last
year.
Please refer to American's news release issued on October 30, 2018 for additional information on
American.
|
____________________
|
|
|
|
3
|
Bank return on
average equity calculated using weighted average daily common
equity.
|
HOLDING AND OTHER COMPANIES
The holding and other
companies' net loss was $5.0 million
in both the third quarter of 2018 and the prior year quarter.
WEBCAST AND CONFERENCE CALL TO DISCUSS EARNINGS AND EPS
GUIDANCE
Hawaiian Electric Industries, Inc. will conduct a
webcast and conference call to review its third quarter 2018
earnings and 2018 EPS guidance on Wednesday, November 7, 2018,
at 11:00 a.m. Hawaii time (4:00 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
at www.hei.com under the "Investor Relations" section, sub-heading
"News and Events." 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 at www.hei.com 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 www.hei.com
beginning about two hours after the event. Replays of the
conference call will also be available approximately two hours
after the event through November 21,
2018, by dialing (877) 344-7529 or (412) 317-0088 and
entering passcode: 10125059.
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; 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; and
helps advance Hawaii's clean
energy and sustainability goals through investments by its
non-regulated subsidiary, Pacific Current, LLC.
NON-GAAP MEASURES
See "Explanation of HEI's Use of
Certain Unaudited Non-GAAP Measures" and related reconciliations on
page 8 of this release.
|
Hawaiian Electric
Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED
STATEMENTS OF INCOME DATA
(Unaudited)
|
|
|
Three months
ended
September 30
|
|
Nine months ended
September 30
|
|
(in thousands, except per share amounts)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
$
|
687,409
|
|
|
$
|
598,769
|
|
|
$
|
1,865,962
|
|
|
$
|
1,674,255
|
|
|
Bank
|
|
80,496
|
|
|
74,289
|
|
|
233,019
|
|
|
222,474
|
|
|
Other
|
|
143
|
|
|
127
|
|
|
218
|
|
|
299
|
|
|
Total
revenues
|
|
768,048
|
|
|
673,185
|
|
|
2,099,199
|
|
|
1,897,028
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
613,373
|
|
|
510,272
|
|
|
1,685,413
|
|
|
1,478,915
|
|
|
Bank
|
|
53,232
|
|
|
47,313
|
|
|
153,951
|
|
|
146,146
|
|
|
Other
|
|
3,379
|
|
|
4,127
|
|
|
11,083
|
|
|
12,954
|
|
|
Total
expenses
|
|
669,984
|
|
|
561,712
|
|
|
1,850,447
|
|
|
1,638,015
|
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
74,036
|
|
|
88,497
|
|
|
180,549
|
|
|
195,340
|
|
|
Bank
|
|
27,264
|
|
|
26,976
|
|
|
79,068
|
|
|
76,328
|
|
|
Other
|
|
(3,236)
|
|
|
(4,000)
|
|
|
(10,865)
|
|
|
(12,655)
|
|
|
Total operating
income
|
|
98,064
|
|
|
111,473
|
|
|
248,752
|
|
|
259,013
|
|
|
Retirement defined
benefits expense—other than service costs
|
|
(1,276)
|
|
|
(1,928)
|
|
|
(4,673)
|
|
|
(5,710)
|
|
|
Interest expense,
net—other than on deposit liabilities and other bank
borrowings
|
|
(22,523)
|
|
|
(19,227)
|
|
|
(66,042)
|
|
|
(59,235)
|
|
|
Allowance for
borrowed funds used during construction
|
|
1,006
|
|
|
1,339
|
|
|
3,815
|
|
|
3,371
|
|
|
Allowance for equity
funds used during construction
|
|
1,962
|
|
|
3,482
|
|
|
8,239
|
|
|
8,908
|
|
|
Income before
income taxes
|
|
77,233
|
|
|
95,139
|
|
|
190,091
|
|
|
206,347
|
|
|
Income
taxes
|
|
10,862
|
|
|
34,595
|
|
|
36,473
|
|
|
72,003
|
|
|
Net
income
|
|
66,371
|
|
|
60,544
|
|
|
153,618
|
|
|
134,344
|
|
|
Preferred stock
dividends of subsidiaries
|
|
471
|
|
|
471
|
|
|
1,417
|
|
|
1,417
|
|
|
Net income for
common stock
|
|
$
|
65,900
|
|
|
$
|
60,073
|
|
|
$
|
152,201
|
|
|
$
|
132,927
|
|
|
Basic earnings per
common share
|
|
$
|
0.61
|
|
|
$
|
0.55
|
|
|
$
|
1.40
|
|
|
$
|
1.22
|
|
|
Diluted earnings
per common share
|
|
$
|
0.60
|
|
|
$
|
0.55
|
|
|
$
|
1.40
|
|
|
$
|
1.22
|
|
|
Dividends declared
per common share
|
|
$
|
0.31
|
|
|
$
|
0.31
|
|
|
$
|
0.93
|
|
|
$
|
0.93
|
|
|
Weighted-average
number of common shares outstanding
|
|
108,879
|
|
|
108,786
|
|
|
108,847
|
|
|
108,737
|
|
|
Weighted-average
shares assuming dilution
|
|
109,055
|
|
|
108,865
|
|
|
109,090
|
|
|
108,909
|
|
|
Net income (loss)
for common stock by segment
|
|
|
|
|
|
|
|
|
|
Electric
utility
|
|
$
|
49,712
|
|
|
$
|
47,487
|
|
|
$
|
108,356
|
|
|
$
|
94,596
|
|
|
Bank
|
|
21,221
|
|
|
17,592
|
|
|
60,742
|
|
|
50,138
|
|
|
Other
|
|
(5,033)
|
|
|
(5,006)
|
|
|
(16,897)
|
|
|
(11,807)
|
|
|
Net income for
common stock
|
|
$
|
65,900
|
|
|
$
|
60,073
|
|
|
$
|
152,201
|
|
|
$
|
132,927
|
|
|
Comprehensive income
attributable to Hawaiian Electric Industries, Inc.
|
|
$
|
61,311
|
|
|
$
|
60,627
|
|
|
$
|
131,014
|
|
|
$
|
136,836
|
|
|
Return on average
common equity (twelve months ended)1
|
|
|
|
|
|
8.7
|
%
|
|
8.5
|
%
|
|
|
The Consolidated
Statements of Income Data reflects the retrospective application of
ASU No. 2017-07, "Compensation-Retirement Benefits (Topic 715):
Improving the Presentation of Net Periodic Pension Cost and Net
Periodic Postretirement Benefit Cost," which was adopted in the
first quarter of 2018. Nonservice cost was reclassified from
"Expenses" to "Retirement defined benefits expense—other than
service costs."
|
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in HEI filings with the
SEC.
|
|
|
1 On
a core basis, 2018 and 2017 returns on average common equity
(twelve months ended September 30) were 9.4% and 8.5%,
respectively. See reconciliation of GAAP to non-GAAP
measures.
|
|
Hawaiian Electric
Company, Inc. (Hawaiian Electric) and Subsidiaries
CONSOLIDATED
STATEMENTS OF INCOME DATA
(Unaudited)
|
|
|
Three months
ended
September 30
|
|
Nine months ended
September 30
|
|
(dollars
in thousands, except per barrel amounts)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Revenues
|
|
$
|
687,409
|
|
|
$
|
598,769
|
|
|
$
|
1,865,962
|
|
|
$
|
1,674,255
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Fuel oil
|
|
206,551
|
|
|
146,258
|
|
|
545,236
|
|
|
431,787
|
|
|
Purchased
power
|
|
177,590
|
|
|
160,347
|
|
|
478,238
|
|
|
440,538
|
|
|
Other operation and
maintenance
|
|
113,553
|
|
|
98,681
|
|
|
333,805
|
|
|
302,437
|
|
|
Depreciation
|
|
50,983
|
|
|
48,206
|
|
|
151,810
|
|
|
144,578
|
|
|
Taxes, other than
income taxes
|
|
64,696
|
|
|
56,780
|
|
|
176,324
|
|
|
159,575
|
|
|
Total
expenses
|
|
613,373
|
|
|
510,272
|
|
|
1,685,413
|
|
|
1,478,915
|
|
|
Operating
income
|
|
74,036
|
|
|
88,497
|
|
|
180,549
|
|
|
195,340
|
|
|
Allowance for equity
funds used during construction
|
|
1,962
|
|
|
3,482
|
|
|
8,239
|
|
|
8,908
|
|
|
Retirement defined
benefits expense—other than service costs
|
|
(682)
|
|
|
(1,421)
|
|
|
(2,934)
|
|
|
(4,279)
|
|
|
Interest expense and
other charges, net
|
|
(18,968)
|
|
|
(16,907)
|
|
|
(54,822)
|
|
|
(52,625)
|
|
|
Allowance for
borrowed funds used during construction
|
|
1,006
|
|
|
1,339
|
|
|
3,815
|
|
|
3,371
|
|
|
Income before
income taxes
|
|
57,354
|
|
|
74,990
|
|
|
134,847
|
|
|
150,715
|
|
|
Income
taxes
|
|
7,144
|
|
|
27,005
|
|
|
24,995
|
|
|
54,623
|
|
|
Net
income
|
|
50,210
|
|
|
47,985
|
|
|
109,852
|
|
|
96,092
|
|
|
Preferred stock
dividends of subsidiaries
|
|
228
|
|
|
228
|
|
|
686
|
|
|
686
|
|
|
Net income
attributable to Hawaiian Electric
|
|
49,982
|
|
|
47,757
|
|
|
109,166
|
|
|
95,406
|
|
|
Preferred stock
dividends of Hawaiian Electric
|
|
270
|
|
|
270
|
|
|
810
|
|
|
810
|
|
|
Net income for
common stock
|
|
$
|
49,712
|
|
|
$
|
47,487
|
|
|
$
|
108,356
|
|
|
$
|
94,596
|
|
|
Comprehensive
income attributable to Hawaiian Electric
|
|
$
|
49,740
|
|
|
$
|
47,509
|
|
|
$
|
108,441
|
|
|
$
|
95,117
|
|
|
OTHER ELECTRIC
UTILITY INFORMATION
|
|
|
|
|
|
|
|
|
|
Kilowatthour sales
(millions)
|
|
|
|
|
|
|
|
|
|
Hawaiian
Electric
|
|
1,761
|
|
|
1,775
|
|
|
4,855
|
|
|
4,924
|
|
|
Hawaii
Electric Light
|
|
277
|
|
|
272
|
|
|
796
|
|
|
782
|
|
|
Maui
Electric
|
|
291
|
|
|
293
|
|
|
818
|
|
|
822
|
|
|
|
2,329
|
|
|
2,340
|
|
|
6,469
|
|
|
6,528
|
|
|
Average fuel oil cost
per barrel
|
|
$
|
90.93
|
|
|
$
|
66.73
|
|
|
$
|
84.67
|
|
|
$
|
67.42
|
|
|
Return on average
common equity (twelve months ended)1
|
|
|
|
|
|
7.22
|
%
|
|
7.16
|
%
|
|
|
The Consolidated
Statements of Income Data reflects the retrospective application of
ASU No. 2017-07, "Compensation-Retirement Benefits (Topic 715):
Improving the Presentation of Net Periodic Pension Cost and Net
Periodic Postretirement Benefit Cost," which was adopted in the
first quarter of 2018. Nonservice cost was reclassified from "Other
operation and maintenance" to "Retirement defined benefits
expense—other than service costs."
|
|
|
This information
should be read in conjunction with the consolidated financial
statements and the notes thereto in Hawaiian Electric filings with
the SEC.
|
|
|
1
Simple average. On a core basis, 2018 and 2017 returns on average
common equity (twelve months ended September 30) were 7.7%
and 7.2%, respectively. See reconciliation of GAAP to
non-GAAP measures.
|
|
American Savings
Bank, F.S.B.
STATEMENTS OF INCOME
DATA
(Unaudited)
|
|
|
Three months
ended
|
|
Nine months ended
September 30
|
|
(in thousands)
|
|
September 30,
2018
|
|
June 30,
2018
|
|
September 30,
2017
|
|
2018
|
|
2017
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
|
55,885
|
|
|
$
|
54,633
|
|
|
$
|
52,210
|
|
|
$
|
163,318
|
|
|
$
|
155,269
|
|
|
Interest and
dividends on investment securities
|
|
9,300
|
|
|
8,628
|
|
|
6,850
|
|
|
27,130
|
|
|
20,593
|
|
|
Total interest and
dividend income
|
|
65,185
|
|
|
63,261
|
|
|
59,060
|
|
|
190,448
|
|
|
175,862
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposit
liabilities
|
|
3,635
|
|
|
3,284
|
|
|
2,444
|
|
|
9,876
|
|
|
6,858
|
|
|
Interest on other
borrowings
|
|
404
|
|
|
393
|
|
|
470
|
|
|
1,293
|
|
|
2,110
|
|
|
Total interest
expense
|
|
4,039
|
|
|
3,677
|
|
|
2,914
|
|
|
11,169
|
|
|
8,968
|
|
|
Net interest
income
|
|
61,146
|
|
|
59,584
|
|
|
56,146
|
|
|
179,279
|
|
|
166,894
|
|
|
Provision for loan
losses
|
|
6,033
|
|
|
2,763
|
|
|
490
|
|
|
12,337
|
|
|
7,231
|
|
|
Net interest
income after provision for loan losses
|
|
55,113
|
|
|
56,821
|
|
|
55,656
|
|
|
166,942
|
|
|
159,663
|
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
|
Fees from other
financial services
|
|
4,543
|
|
|
4,744
|
|
|
5,635
|
|
|
13,941
|
|
|
17,055
|
|
|
Fee income on deposit
liabilities
|
|
5,454
|
|
|
5,138
|
|
|
5,533
|
|
|
15,781
|
|
|
16,526
|
|
|
Fee income on other
financial products
|
|
1,746
|
|
|
1,675
|
|
|
1,904
|
|
|
5,075
|
|
|
5,741
|
|
|
Bank-owned life
insurance
|
|
2,663
|
|
|
1,133
|
|
|
1,257
|
|
|
4,667
|
|
|
4,165
|
|
|
Mortgage banking
income
|
|
169
|
|
|
617
|
|
|
520
|
|
|
1,399
|
|
|
1,896
|
|
|
Other income,
net
|
|
736
|
|
|
536
|
|
|
380
|
|
|
1,708
|
|
|
1,229
|
|
|
Total noninterest
income
|
|
15,311
|
|
|
13,843
|
|
|
15,229
|
|
|
42,571
|
|
|
46,612
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
23,952
|
|
|
23,655
|
|
|
23,512
|
|
|
72,047
|
|
|
71,095
|
|
|
Occupancy
|
|
4,363
|
|
|
4,194
|
|
|
4,284
|
|
|
12,837
|
|
|
12,623
|
|
|
Data
processing
|
|
3,583
|
|
|
3,540
|
|
|
3,262
|
|
|
10,587
|
|
|
9,749
|
|
|
Services
|
|
2,485
|
|
|
3,028
|
|
|
2,863
|
|
|
8,560
|
|
|
7,989
|
|
|
Equipment
|
|
1,783
|
|
|
1,874
|
|
|
1,814
|
|
|
5,385
|
|
|
5,333
|
|
|
Office supplies,
printing and postage
|
|
1,556
|
|
|
1,491
|
|
|
1,444
|
|
|
4,554
|
|
|
4,506
|
|
|
Marketing
|
|
993
|
|
|
1,085
|
|
|
934
|
|
|
2,723
|
|
|
2,290
|
|
|
FDIC
insurance
|
|
638
|
|
|
727
|
|
|
746
|
|
|
2,078
|
|
|
2,296
|
|
|
Other
expense
|
|
4,240
|
|
|
4,556
|
|
|
5,262
|
|
|
12,897
|
|
|
14,674
|
|
|
Total noninterest
expense
|
|
43,593
|
|
|
44,150
|
|
|
44,121
|
|
|
131,668
|
|
|
130,555
|
|
|
Income before
income taxes
|
|
26,831
|
|
|
26,514
|
|
|
26,764
|
|
|
77,845
|
|
|
75,720
|
|
|
Income
taxes
|
|
5,610
|
|
|
5,953
|
|
|
9,172
|
|
|
17,103
|
|
|
25,582
|
|
|
Net
income
|
|
$
|
21,221
|
|
|
$
|
20,561
|
|
|
$
|
17,592
|
|
|
$
|
60,742
|
|
|
$
|
50,138
|
|
|
Comprehensive
income
|
|
$
|
16,480
|
|
|
$
|
16,579
|
|
|
$
|
18,009
|
|
|
$
|
39,944
|
|
|
$
|
53,613
|
|
|
OTHER BANK
INFORMATION (annualized %, except as of period end)
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.22
|
|
|
1.20
|
|
|
1.07
|
|
|
1.18
|
|
|
1.02
|
|
|
Return on average
equity
|
|
13.80
|
|
|
13.56
|
|
|
11.64
|
|
|
13.32
|
|
|
11.24
|
|
|
Return on average
tangible common equity
|
|
15.93
|
|
|
15.68
|
|
|
13.47
|
|
|
15.40
|
|
|
13.04
|
|
|
Net interest
margin
|
|
3.81
|
|
|
3.76
|
|
|
3.69
|
|
|
3.78
|
|
|
3.68
|
|
|
Efficiency
ratio
|
|
57.02
|
|
|
60.13
|
|
|
61.82
|
|
|
59.35
|
|
|
61.15
|
|
|
Net charge-offs to
average loans outstanding
|
|
0.40
|
|
|
0.32
|
|
|
0.32
|
|
|
0.33
|
|
|
0.27
|
|
|
As of period
end
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans to
loans receivable held for investment
|
|
0.59
|
|
|
0.57
|
|
|
0.50
|
|
|
|
|
|
|
Allowance for loan
losses to loans outstanding
|
|
1.14
|
|
|
1.11
|
|
|
1.13
|
|
|
|
|
|
|
Tangible common
equity to tangible assets
|
|
7.75
|
|
|
7.64
|
|
|
8.01
|
|
|
|
|
|
|
Tier-1 leverage
ratio
|
|
8.6
|
|
|
8.6
|
|
|
8.7
|
|
|
|
|
|
|
Total capital
ratio
|
|
13.8
|
|
|
13.9
|
|
|
13.9
|
|
|
|
|
|
|
Dividend paid to HEI
(via ASB Hawaii, Inc.) ($ in millions)
|
|
$
|
14.0
|
|
|
$
|
11.1
|
|
|
$
|
9.4
|
|
|
$
|
36.0
|
|
|
$
|
28.1
|
|
|
|
The Statements of
Income Data reflects the retrospective application of ASU No.
2017-07, "Compensation-Retirement Benefits (Topic 715): Improving
the Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost," which was adopted in the first
quarter of 2018. Nonservice cost was reclassified from
"Compensation and employee benefits" to "Other expense."
|
|
|
This information
should be read in conjunction with the 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 than the corresponding GAAP
measures given the non-recurring nature of certain items.
Non-GAAP core measures presented here may not be comparable to
similarly titled measures used by other companies. The
accompanying tables provide the return on average common equity
(ROACE) and adjusted non-GAAP core ROACE for HEI and the
utility.
The reconciling adjustments from GAAP earnings to core earnings
used in the calculation of the twelve months ended September 30, 2018 ROACE exclude the impact of
the federal tax reform act recorded in the fourth quarter of 2017
due to the adjustment of deferred tax balances and the $1,000 employee bonuses paid by the bank related
to federal tax reform. Management does not consider these
items to be representative of the company's fundamental core
earnings and has shown the non-GAAP (core) ROACE in order to
provide better comparability between periods.
The accompanying table also provides the calculation of utility
GAAP other operation and maintenance (O&M) expense adjusted for
"O&M-related net income neutral items," which are O&M
expenses covered by specific surcharges or by third parties.
These "O&M-related net income neutral items" are grossed-up in
revenue and expense and do not impact net income.
|
RECONCILIATION OF
GAAP1 TO NON-GAAP MEASURES
|
|
Hawaiian Electric
Industries, Inc. and Subsidiaries (HEI)
|
|
(Unaudited)
|
|
Twelve months
ended September 30
|
|
2018
|
|
2017
|
|
HEI CONSOLIDATED
RETURN ON AVERAGE COMMON EQUITY (ROACE) (simple
average)
|
|
|
|
|
|
Based on
GAAP
|
8.7
|
%
|
|
8.5
|
%
|
|
Based on non-GAAP
(core)2
|
9.4
|
%
|
|
8.5
|
%
|
|
|
|
|
|
|
Hawaiian Electric
Company, Inc. and Subsidiaries
|
|
|
|
|
Twelve months
ended September 30
|
|
|
|
|
2018
|
|
2017
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED RETURN ON AVERAGE COMMON EQUITY (ROACE) (simple
average)
|
|
|
|
|
|
|
|
Based on
GAAP
|
|
|
|
7.22
|
%
|
|
7.16
|
%
|
|
Based on non-GAAP
(core)2
|
|
|
|
7.71
|
%
|
|
7.16
|
%
|
|
|
|
|
|
|
|
|
Three months ended
September 30
|
|
Nine months ended
September 30
|
|
($ in
millions)
|
2018
|
2017
|
|
2018
|
|
2017
|
|
HAWAIIAN ELECTRIC
CONSOLIDATED OTHER OPERATION AND MAINTENANCE (O&M)
EXPENSE
|
|
|
|
|
|
|
|
GAAP (as
reported)
|
$
|
113.6
|
|
$
|
98.7
|
|
|
$
|
333.8
|
|
|
$
|
302.4
|
|
|
Excluding other
O&M-related net income neutral items3
|
0.2
|
|
0.7
|
|
|
0.7
|
|
|
2.7
|
|
|
Non-GAAP (Adjusted
other O&M expense)
|
$
|
113.3
|
|
$
|
98.0
|
|
|
$
|
333.1
|
|
|
$
|
299.7
|
|
|
|
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:
|
Julie R.
Smolinski
|
Telephone:
(808) 543-7300
|
|
Director, Investor
Relations
|
E-mail:
ir@hei.com
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/hei-reports-third-quarter-2018-earnings-300745300.html
SOURCE Hawaiian Electric Industries, Inc.