Consolidating financial information (Tables) - HECO

3 Months Ended

Mar. 31, 2013

Schedule of consolidating statements of income (Loss)

Three months ended March 31	2013		2012
(in thousands)
Interest income
Interest and fees on loans	$	42,603	$	44,888
Interest on investment and mortgage-related securities	3,464		3,805
Total interest income	46,067		48,693
Interest expense
Interest on deposit liabilities	1,312		1,779
Interest on other borrowings	1,164		1,261
Total interest expense	2,476		3,040
Net interest income	43,591		45,653
Provision for loan losses	1,858		3,546
Net interest income after provision for loan losses	41,733		42,107
Noninterest income
Fees from other financial services	7,643		7,337
Fee income on deposit liabilities	4,314		4,278
Fee income on other financial products	1,794		1,549
Gain on sale of loans	3,346		2,035
Other income, net	1,592		1,360
Total noninterest income	18,689		16,559
Noninterest expense
Compensation and employee benefits	20,088		18,646
Occupancy	4,123		4,225
Data processing	2,987		2,111
Services	2,103		1,783
Equipment	1,774		1,730
Other expense	7,595		6,707
Total noninterest expense	38,670		35,202
Income before income taxes	21,752		23,464
Income taxes	7,597		7,587
Net income	$	14,155	$	15,877

Schedule of consolidating balance sheets

(in thousands)				March 31, 2013						December 31, 2012
Assets
Cash and cash equivalents				$	224,870					$	184,430
Available-for-sale investment and mortgage-related securities				659,400						671,358
Investment in stock of Federal Home Loan Bank of Seattle				95,152						96,022
Loans receivable held for investment				3,845,732						3,779,218
Allowance for loan losses				(42,730		)				(41,985		)
Loans receivable held for investment, net				3,803,002						3,737,233
Loans held for sale, at lower of cost or fair value				5,351						26,005
Other				246,420						244,435
Goodwill				82,190						82,190
Total assets				$	5,116,385					$	5,041,673
Liabilities and shareholder’s equity
Deposit liabilities—noninterest-bearing				$	1,223,921					$	1,164,308
Deposit liabilities—interest-bearing				3,088,699						3,065,608
Other borrowings				193,233						195,926
Other				106,337						117,752
Total liabilities				4,612,190						4,543,594
Commitments and contingencies (see “Litigation” below)
Common stock				334,344						333,712
Retained earnings				183,918						179,763
Accumulated other comprehensive income (loss), net of taxes
Net unrealized gains on securities	$	9,933					$	10,761
Retirement benefit plans	(24,000		)	(14,067		)	(26,157		)	(15,396		)
Total shareholder’s equity				504,195						498,079
Total liabilities and shareholder’s equity				$	5,116,385					$	5,041,673
Other assets
Bank-owned life insurance				$	126,798					$	125,726
Premises and equipment, net				64,217						62,458
Prepaid expenses				13,189						13,199
Accrued interest receivable				13,773						13,228
Mortgage-servicing rights				11,400						10,818
Real estate acquired in settlement of loans, net				3,785						6,050
Other				13,258						12,956
				$	246,420					$	244,435
Other liabilities
Accrued expenses				$	13,723					$	17,103
Federal and state income taxes payable				42,205						35,408
Cashier’s checks				21,810						23,478
Advance payments by borrowers				6,443						9,685
Other				22,156						32,078
				$	106,337					$	117,752

Hawaiian Electric Company, Inc. and Subsidiaries

Schedule of consolidating statements of income (Loss)

Three months ended March 31, 2013

(in thousands)	HECO			HELCO		MECO		Other subsidiaries	Consolidating adjustments		HECO Consolidated
Operating revenues	$	505,829		106,016		104,352		—	—		$	716,197
Operating expenses
Fuel oil	221,967			32,936		50,197		—	—		305,100
Purchased power	111,155			30,122		12,087		—	—		153,364
Other operation	50,111			11,064		10,248		—	—		71,423
Maintenance	21,652			3,806		4,244		—	—		29,702
Depreciation	24,707			8,547		5,026		—	—		38,280
Taxes, other than income taxes	48,085			9,686		9,916		—	—		67,687
Income taxes	7,311			2,714		4,070		—	—		14,095
Total operating expenses	484,988			98,875		95,788		—	—		679,651
Operating income	20,841			7,141		8,564		—	—		36,546
Other income (loss)
Allowance for equity funds used during construction	983			138		94		—	—		1,215
Equity in earnings of subsidiaries	10,985			—		—		—	(10,985	)	—
Other, net	2,021			142		177		—	(28	)	2,312
Income tax benefits	(230		)	(23	)	(46	)	—	—		(299		)
Total other income (loss)	13,759			257		225		—	(11,013	)	3,228
Interest and other charges
Interest on long-term debt	9,902			2,750		1,962		—	—		14,614
Amortization of net bond premium and expense	410			117		120		—	—		647
Other interest charges	157			69		117		—	(28	)	315
Allowance for borrowed funds used during construction	(568		)	(92	)	(70	)	—	—		(730		)
Total interest and other charges	9,901			2,844		2,129		—	(28	)	14,846
Net income	24,699			4,554		6,660		—	(10,985	)	24,928
Preferred stock dividend of subsidiaries	—			134		95		—	—		229
Net income attributable to HECO	24,699			4,420		6,565		—	(10,985	)	24,699
Preferred stock dividends of HECO	270			—		—		—	—		270
Net income for common stock	$	24,429		4,420		6,565		—	(10,985	)	$	24,429

Three months ended March 31, 2012

(in thousands)	HECO			HELCO		MECO		Other subsidiaries		Consolidating adjustments		HECO Consolidated
Operating revenues	$	530,613		112,327		104,998		—		—		$	747,938
Operating expenses
Fuel oil	235,026			32,410		60,403		—		—		327,839
Purchased power	124,780			33,908		6,101		—		—		164,789
Other operation	39,948			9,015		12,886		—		—		61,849
Maintenance	20,836			4,249		4,953		—		—		30,038
Depreciation	22,571			8,436		5,475		—		—		36,482
Taxes, other than income taxes	50,553			10,463		9,979		—		—		70,995
Income taxes	11,963			4,223		1,179		—		—		17,365
Total operating expenses	505,677			102,704		100,976		—		—		709,357
Operating income	24,936			9,623		4,022		—		—		38,581
Other income (loss)
Allowance for equity funds used during construction	1,581			125		234		—		—		1,940
Equity in earnings of subsidiaries	8,490			—		—		—		(8,490	)	—
Other, net	1,094			116		110		(1	)	(10	)	1,309
Income tax benefits	(30		)	(15	)	1		—		—		(44		)
Total other income (loss)	11,135			226		345		(1	)	(8,500	)	3,205
Interest and other charges
Interest on long-term debt	9,130			2,985		2,268		—		—		14,383
Amortization of net bond premium and expense	483			137		125		—		—		745
Other interest charges	(387		)	33		93		—		(10	)	(271		)
Allowance for borrowed funds used during construction	(725		)	(51	)	(94	)	—		—		(870		)
Total interest and other charges	8,501			3,104		2,392		—		(10	)	13,987
Net income (loss)	27,570			6,745		1,975		(1	)	(8,490	)	27,799
Preferred stock dividend of subsidiaries	—			134		95		—		—		229
Net income (loss) attributable to HECO	27,570			6,611		1,880		(1	)	(8,490	)	27,570
Preferred stock dividends of HECO	270			—		—		—		—		270
Net income (loss) for common stock	$	27,300		6,611		1,880		(1	)	(8,490	)	$	27,300

Schedule of consolidating statement of comprehensive income

Three months ended March 31, 2013

(in thousands)	HECO			HELCO		MECO		Other subsidiaries	Consolidating adjustments		HECO Consolidated
Net income for common stock	$	24,429		4,420		6,565		—	(10,985	)	$	24,429
Other comprehensive income (loss), net of taxes:
Retirement benefit plans:
Less: amortization of transition obligation, prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits	5,331			759		657		—	(1,416	)	5,331
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes	(5,313		)	(761	)	(656	)	—	1,417		(5,313		)
Other comprehensive income (loss), net of taxes	18			(2	)	1		—	1		18
Comprehensive income attributable to common shareholder	$	24,447		4,418		6,566		—	(10,984	)	$	24,447

Three months ended March 31, 2012

(in thousands)	HECO			HELCO		MECO		Other subsidiaries		Consolidating adjustments		HECO Consolidated
Net income (loss) for common stock	$	27,300		6,611		1,880		(1	)	(8,490	)	$	27,300
Other comprehensive income (loss), net of taxes:
Retirement benefit plans:
Less: amortization of transition obligation, prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits	3,472			532		473		—		(1,005	)	3,472
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes	(3,395		)	(526	)	(467	)	—		993		(3,395		)
Other comprehensive income (loss), net of taxes	77			6		6		—		(12	)	77
Comprehensive income (loss) attributable to common shareholder	$	27,377		6,617		1,886		(1	)	(8,502	)	$	27,377

Schedule of consolidating balance sheets

March 31, 2013

(in thousands)	HECO			HELCO		MECO		Other subsidiaries	Consolidating adjustments		HECO Consolidated
Assets
Utility plant, at cost
Land	$	43,400		5,182		3,016		—	—		$	51,598
Plant and equipment	3,377,351			1,089,414		961,168		—	—		5,427,933
Less accumulated depreciation	(1,198,256		)	(439,184	)	(425,370	)	—	—		(2,062,810		)
Construction in progress	123,898			17,623		12,148		—	—		153,669
Net utility plant	2,346,393			673,035		550,962		—	—		3,570,390
Investment in wholly owned subsidiaries, at equity	501,871			—		—		—	(501,871	)	—
Current assets
Cash and cash equivalents	32,661			2,770		1,405		104	—		36,940
Advances to affiliates	13,000			16,650		—		—	(29,650	)	—
Customer accounts receivable, net	139,540			30,046		24,871		—	—		194,457
Accrued unbilled revenues, net	102,307			16,484		16,824		—	—		135,615
Other accounts receivable, net	13,437			861		1,341		—	(9,844	)	5,795
Fuel oil stock, at average cost	153,331			13,429		23,931		—	—		190,691
Materials and supplies, at average cost	33,632			5,950		14,848		—	—		54,430
Prepayments and other	26,668			3,133		2,663		—	(209	)	32,255
Regulatory assets	50,315			5,412		6,077		—	—		61,804
Total current assets	564,891			94,735		91,960		104	(39,703	)	711,987
Other long-term assets
Regulatory assets	601,447			109,547		101,353		—	—		812,347
Unamortized debt expense	6,844			2,004		1,397		—	—		10,245
Other	45,348			9,057		14,861		—	—		69,266
Total other long-term assets	653,639			120,608		117,611		—	—		891,858
Total assets	$	4,066,794		888,378		760,533		104	(541,574	)	$	5,174,235
Capitalization and liabilities
Capitalization
Common stock equity	$	1,476,513		269,716		232,051		104	(501,871	)	$	1,476,513
Cumulative preferred stock—not subject to mandatory redemption	22,293			7,000		5,000		—	—		34,293
Long-term debt, net	780,547			201,328		166,000		—	—		1,147,875
Total capitalization	2,279,353			478,044		403,051		104	(501,871	)	2,658,681
Current liabilities
Current portion of long-term debt	43,052			—		—		—	—		43,052
Short-term borrowings-affiliate	16,650			—		13,000		—	(29,650	)	—
Accounts payable	181,266			26,534		20,626		—	—		228,426
Interest and preferred dividends payable	14,643			3,789		3,274		—	(13	)	21,693
Taxes accrued	138,681			30,586		30,292		—	(209	)	199,350
Other	49,186			11,989		16,586		—	(9,831	)	67,930
Total current liabilities	443,478			72,898		83,778		—	(39,703	)	560,451
Deferred credits and other liabilities
Deferred income taxes	316,153			71,233		48,212		—	—		435,598
Regulatory liabilities	220,715			68,878		35,934		—	—		325,527
Unamortized tax credits	41,111			13,428		13,400		—	—		67,939
Retirement benefits liability	453,573			79,421		78,684		—	—		611,678
Other	67,362			16,937		14,267		—	—		98,566
Total deferred credits and other liabilities	1,098,914			249,897		190,497		—	—		1,539,308
Contributions in aid of construction	245,049			87,539		83,207		—	—		415,795
Total capitalization and liabilities	$	4,066,794		888,378		760,533		104	(541,574	)	$	5,174,235

December 31, 2012

(in thousands)	HECO			HELCO		MECO		Other subsidiaries	Consolidating adjustments		HECO Consolidated
Assets
Utility plant, at cost
Land	$	43,370		5,182		3,016		—	—		$	51,568
Plant and equipment	3,325,862			1,086,048		952,490		—	—		5,364,400
Less accumulated depreciation	(1,185,899		)	(433,531	)	(421,359	)	—	—		(2,040,789		)
Construction in progress	130,143			12,126		9,109		—	—		151,378
Net utility plant	2,313,476			669,825		543,256		—	—		3,526,557
Investment in wholly owned subsidiaries, at equity	497,939			—		—		—	(497,939	)	—
Current assets
Cash and cash equivalents	8,265			5,441		3,349		104	—		17,159
Advances to affiliates	9,400			18,050		—		—	(27,450	)	—
Customer accounts receivable, net	154,316			29,772		26,691		—	—		210,779
Accrued unbilled revenues, net	100,600			14,393		19,305		—	—		134,298
Other accounts receivable, net	33,313			1,122		3,016		—	(9,275	)	28,176
Fuel oil stock, at average cost	123,176			15,485		22,758		—	—		161,419
Materials and supplies, at average cost	31,779			5,336		13,970		—	—		51,085
Prepayments and other	21,708			5,146		6,011		—	—		32,865
Regulatory assets	42,675			4,056		4,536		—	—		51,267
Total current assets	525,232			98,801		99,636		104	(36,725	)	687,048
Other long-term assets
Regulatory assets	601,451			109,815		102,063		—	—		813,329
Unamortized debt expense	7,042			2,066		1,446		—	—		10,554
Other	46,586			9,871		14,848		—	—		71,305
Total other long-term assets	655,079			121,752		118,357		—	—		895,188
Total assets	$	3,991,726		890,378		761,249		104	(534,664	)	$	5,108,793
Capitalization and liabilities
Capitalization
Common stock equity	$	1,472,136		268,908		228,927		104	(497,939	)	$	1,472,136
Cumulative preferred stock—not subject to mandatory redemption	22,293			7,000		5,000		—	—		34,293
Long-term debt, net	780,546			201,326		166,000		—	—		1,147,872
Total capitalization	2,274,975			477,234		399,927		104	(497,939	)	2,654,301
Current liabilities
Current portion of long-term debt	—			—		—		—	—		—
Short-term borrowings-affiliate	18,050			—		9,400		—	(27,450	)	—
Accounts payable	134,651			27,457		24,716		—	—		186,824
Interest and preferred dividends payable	14,479			4,027		2,593		—	(7	)	21,092
Taxes accrued	174,477			38,778		37,811		—	—		251,066
Other	47,203			10,310		14,634		—	(9,268	)	62,879
Total current liabilities	388,860			80,572		89,154		—	(36,725	)	521,861
Deferred credits and other liabilities
Deferred income taxes	302,569			68,479		46,563		—	—		417,611
Regulatory liabilities	218,437			67,359		36,278		—	—		322,074
Unamortized tax credits	39,827			13,450		13,307		—	—		66,584
Retirement benefits liability	459,765			80,686		79,754		—	—		620,205
Other	68,783			17,799		14,055		—	—		100,637
Total deferred credits and other liabilities	1,089,381			247,773		189,957		—	—		1,527,111
Contributions in aid of construction	238,510			84,799		82,211		—	—		405,520
Total capitalization and liabilities	$	3,991,726		890,378		761,249		104	(534,664	)	$	5,108,793

Schedule of consolidating statement of changes in common stock equity

Three months ended March 31, 2013

(in thousands)	HECO			HELCO		MECO		Other subsidiaries	Consolidating adjustments		HECO Consolidated
Balance, December 31, 2012	$	1,472,136		268,908		228,927		104	(497,939	)	$	1,472,136
Net income for common stock	24,429			4,420		6,565		—	(10,985	)	24,429
Other comprehensive income, net of taxes	18			(2	)	1		—	1		18
Common stock dividends	(20,070		)	(3,610	)	(3,442	)	—	7,052		(20,070		)
Balance, March 31, 2013	$	1,476,513		269,716		232,051		104	(501,871	)	$	1,476,513

Three months ended March 31, 2012

(in thousands)	HECO			HELCO		MECO		Other subsidiaries		Consolidating adjustments		HECO Consolidated
Balance, December 31, 2011	$	1,402,841		280,468		235,568		107		(516,143	)	$	1,402,841
Net income (loss) for common stock	27,300			6,611		1,880		(1	)	(8,490	)	27,300
Other comprehensive income, net of taxes	77			6		6		—		(12	)	77
Common stock dividends	(18,261		)	(3,284	)	(2,187	)	—		5,471		(18,261		)
Balance, March 31, 2012	$	1,411,957		283,801		235,267		106		(519,174	)	$	1,411,957

Schedule of Condensed consolidating statement of cash flows

Three months ended March 31, 2013

(in thousands)	HECO			HELCO		MECO		Other subsidiaries	Consolidating adjustments		HECO Consolidated
Cash flows from operating activities:
Net income	$	24,699		4,554		6,660		—	(10,985	)	$	24,928
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of subsidiaries	(11,010		)	—		—		—	10,985		(25		)
Common stock dividends received from subsidiaries	7,052			—		—		—	(7,052	)	—
Depreciation of property, plant and equipment	24,707			8,547		5,026		—	—		38,280
Other amortization	(8		)	358		607		—	—		957
Change in deferred income taxes	13,572			2,755		1,648		—	—		17,975
Change in tax credits, net	1,299			(17	)	100		—	—		1,382
Allowance for equity funds used during construction	(983		)	(138	)	(94	)	—	—		(1,215		)
Changes in assets and liabilities:
Decrease (increase) in accounts receivable	34,652			(13	)	3,495		—	569		38,703
Decrease (increase) in accrued unbilled revenues	(1,707		)	(2,091	)	2,481		—	—		(1,317		)
Decrease (increase) in fuel oil stock	(30,155		)	2,056		(1,173	)	—	—		(29,272		)
Increase in materials and supplies	(1,853		)	(614	)	(878	)	—	—		(3,345		)
Increase in regulatory assets	(13,071		)	(2,464	)	(2,211	)	—	—		(17,746		)
Increase (decrease) in accounts payable	44,887			(903	)	(5,050	)	—	—		38,934
Change in prepaid and accrued income and utility revenue taxes	(41,093		)	(8,078	)	(4,495	)	—	—		(53,666		)
Contributions to defined benefit pension and other postretirement benefit plans	(15,530		)	(2,763	)	(2,717	)	—	—		(21,010		)
Change in other assets and liabilities	11,117			5,170		4,220		—	(569	)	19,938
Net cash provided by operating activities	46,575			6,359		7,619		—	(7,052	)	53,501
Cash flows from investing activities:
Capital expenditures	(47,709		)	(10,118	)	(10,088	)	—	—		(67,915		)
Contributions in aid of construction	7,816			3,432		462		—	—		11,710
Advances from (to) affiliates	(3,600		)	1,400		—		—	2,200		—
Net cash used in investing activities	(43,493		)	(5,286	)	(9,626	)	—	2,200		(56,205		)
Cash flows from financing activities:
Common stock dividends	(20,070		)	(3,610	)	(3,442	)	—	7,052		(20,070		)
Preferred stock dividends of HECO and subsidiaries	(270		)	(134	)	(95	)	—	—		(499		)
Net increase in short-term borrowings from nonaffiliates and affiliate with original maturities of three months or less	41,652			—		3,600		—	(2,200	)	43,052
Other	2			—		—		—	—		2
Net cash provided by (used in) financing activities	21,314			(3,744	)	63		—	4,852		22,485
Net increase (decrease) in cash and cash equivalents	24,396			(2,671	)	(1,944	)	—	—		19,781
Cash and cash equivalents, beginning of period	8,265			5,441		3,349		104	—		17,159
Cash and cash equivalents, end of period	$	32,661		2,770		1,405		104	—		$	36,940

Three months ended March 31, 2012

(in thousands)	HECO			HELCO		MECO		Other subsidiaries		Consolidating adjustments		HECO Consolidated
Cash flows from operating activities:
Net income (loss)	$	27,570		6,745		1,975		(1	)	(8,490	)	$	27,799
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity in earnings of subsidiaries	(8,515		)	—		—		—		8,490		(25		)
Common stock dividends received from subsidiaries	5,471			—		—		—		(5,471	)	—
Depreciation of property, plant and equipment	22,571			8,436		5,475		—		—		36,482
Other amortization	485			622		454		—		—		1,561
Change in deferred income taxes	13,721			2,563		3,777		—		—		20,061
Change in tax credits, net	1,320			36		—		—		—		1,356
Allowance for equity funds used during construction	(1,581		)	(125	)	(234	)	—		—		(1,940		)
Changes in assets and liabilities:
Decrease (increase) in accounts receivable	19,978			343		2,431		—		2,249		25,001
Decrease (increase) in accrued unbilled revenues	11,188			57		(61	)	—		—		11,184
Decrease (increase) in fuel oil stock	(11,819		)	(2,058	)	(581	)	—		—		(14,458		)
Increase in materials and supplies	(2,320		)	(1,128	)	(113	)	—		—		(3,561		)
Increase in regulatory assets	(11,612		)	(1,039	)	(1,297	)	—		—		(13,948		)
Increase (decrease) in accounts payable	(27,400		)	(2,941	)	(2,833	)	—		—		(33,174		)
Change in prepaid and accrued income and utility revenue taxes	(29,011		)	(5,741	)	(9,809	)	—		—		(44,561		)
Contributions to defined benefit pension and other postretirement benefit plans	(19,428		)	(3,279	)	(3,476	)	—		—		(26,183		)
Change in other assets and liabilities	(2,190		)	2,320		5,589		(1	)	(2,249	)	3,469
Net cash provided by (used in) operating activities	(11,572		)	4,811		1,297		(2	)	(5,471	)	(10,937		)
Cash flows from investing activities:
Capital expenditures	(51,026		)	(6,727	)	(5,683	)	—		—		(63,436		)
Contributions in aid of construction	20,748			1,579		528		—		—		22,855
Advances from (to) affiliates	—			10,250		14,500		—		(24,750	)	—
Net cash used in investing activities	(30,278		)	5,102		9,345		—		(24,750	)	(40,581		)
Cash flows from financing activities:
Common stock dividends	(18,261		)	(3,284	)	(2,187	)	—		5,471		(18,261		)
Preferred stock dividends of HECO and subsidiaries	(270		)	(134	)	(95	)	—		—		(499		)
Repayment of long-term debt	(42,580		)	(7,200	)	(7,720	)	—		—		(57,500		)
Net increase in short-term borrowings from nonaffiliates and affiliate with original maturities of three months or less	60,192			—		—		—		24,750		84,942
Other	(70		)	(2	)	(48	)	—		—		(120		)
Net cash provided by (used in) financing activities	(989		)	(10,620	)	(10,050	)	—		30,221		8,562
Net increase (decrease) in cash and cash equivalents	(42,839		)	(707	)	592		(2	)	—		(42,956		)
Cash and cash equivalents, beginning of period	44,819			3,383		496		108		—		48,806
Cash and cash equivalents, end of period	$	1,980		2,676		1,088		106		—		$	5,850