Electric utility subsidiary (Tables)

12 Months Ended

Dec. 31, 2012

Electric utility subsidiary

Schedule of consolidating statements of income (Loss)

Consolidated Statements of Income Data

Years ended December 31	2012	2011	2010
(in thousands)
Interest income
Interest and fees on loans	$176,057	$184,485	$195,192
Interest on investment and mortgage-related securities	13,822	14,568	14,946
Total interest income	189,879	199,053	210,138
Interest expense
Interest on deposit liabilities	6,423	8,983	14,696
Interest on other borrowings	4,869	5,486	5,653
Total interest expense	11,292	14,469	20,349
Net interest income	178,587	184,584	189,789
Provision for loan losses	12,883	15,009	20,894
Net interest income after provision for loan losses	165,704	169,575	168,895
Noninterest income
Fees from other financial services	31,361	28,881	27,280
Fee income on deposit liabilities	17,775	18,026	26,369
Fee income on other financial products	6,577	6,704	6,487
Gain on sale of loans	14,628	5,028	6,338
Net gains on sale of securities	134	371	–
Other income, net	5,185	6,344	6,081
Total noninterest income	75,660	65,354	72,555
Noninterest expense
Compensation and employee benefits	75,979	71,137	71,476
Occupancy	17,179	17,154	16,548
Data processing	10,098	8,155	13,213
Services	9,866	7,396	6,594
Equipment	7,105	6,903	6,620
Office supplies, printing and postage	3,870	3,934	3,928
Marketing	3,260	3,001	2,418
Communication	1,809	1,764	2,221
Other expense	23,177	23,949	25,920
Total noninterest expense	152,343	143,393	148,938
Income before income taxes	89,021	91,536	92,512
Income taxes	30,384	31,693	34,056
Net income	$58,637	$  59,843	$  58,456

Schedule of consolidating balance sheets

Consolidated Balance Sheet Data

December 31	2012		2011
(in thousands)
Assets
Cash and cash equivalents	$   184,430		$   219,678
Available-for-sale investment and mortgage-related securities	671,358		624,331
Investment in stock of Federal Home Loan Bank of Seattle	96,022		97,764
Loans receivable held for investment	3,779,218		3,680,724
Allowance for loan losses	(41,985	)	(37,906	)
Loans receivable held for investment, net	3,737,233		3,642,818
Loans held for sale, at lower of cost or fair value	26,005		9,601
Other	244,435		233,592
Goodwill	82,190		82,190
Total assets	$5,041,673		$4,909,974
Liabilities and shareholder’s equity
Deposit liabilities–noninterest-bearing	$1,164,308		$  993,828
Deposit liabilities–interest-bearing	3,065,608		3,076,204
Other borrowings	195,926		233,229
Other	117,752		118,078
Total liabilities	4,543,594		4,421,339
Commitments and contingencies (see “Litigation” below)
Common stock	333,712		331,880
Retained earnings	179,763		166,126
Accumulated other comprehensive loss, net of tax benefits	(15,396	)	(9,371	)
Total shareholder’s equity	498,079		488,635
Total liabilities and shareholder’s equity	$5,041,673		$4,909,974
Other assets
Bank-owned life insurance	$125,726		$121,470
Premises and equipment, net	62,458		52,940
Prepaid expenses	13,199		15,297
Accrued interest receivable	13,228		14,190
Mortgage-servicing rights	10,818		8,227
Real estate acquired in settlement of loans, net	6,050		7,260
Other	12,956		14,208
	$244,435		$233,592
Other liabilities
Accrued expenses	$17,103		$21,216
Federal and state income taxes payable	35,408		35,002
Cashier’s checks	23,478		22,802
Advance payments by borrowers	9,685		10,100
Other	32,078		28,958
	$117,752		$118,078

Hawaiian Electric Company, Inc. and Subsidiaries

Electric utility subsidiary

Schedule of consolidating statements of income (Loss)

Consolidated Statements of Income Data

Years ended December 31	2012		2011		2010
(in thousands)
Revenues
Operating revenues	$3,101,998		$2,973,764		$2,367,441
Other – nonregulated	7,441		4,926		14,925
Total revenues	3,109,439		2,978,690		2,382,366
Expenses
Fuel oil	1,297,419		1,265,126		900,408
Purchased power	724,240		689,652		548,800
Other operation	272,117		257,065		251,027
Maintenance	122,312		121,219		127,487
Depreciation	144,498		142,975		149,708
Taxes, other than income taxes	292,841		276,504		222,117
Impairment of utility assets	40,000		9,215		–
Other – nonregulated	3,000		1,800		4,431
Total expenses	2,896,427		2,763,556		2,203,978
Operating income from regulated and nonregulated activities	213,012		215,134		178,388
Allowance for equity funds used during construction	7,007		5,964		6,016
Interest expense and other charges	(62,055	)	(60,031	)	(61,510)
Allowance for borrowed funds used during construction	4,355		2,498		2,558
Income before income taxes	162,319		163,565		125,452
Income taxes	61,048		61,584		46,868
Net income	101,271		101,981		78,584
Preferred stock dividends of subsidiaries	915		915		915
Net income attributable to HECO	100,356		101,066		77,669
Preferred stock dividends of HECO	1,080		1,080		1,080
Net income for common stock	$    99,276		$    99,986		$    76,589

Schedule of consolidating statement of comprehensive income

Consolidated Statements of Comprehensive Income

Years ended December 31	2012		2011		2010
(in thousands)
Net income for common stock	$  99,276		$  99,986		$  76,589
Other comprehensive income (loss), net of taxes:
Retirement benefit plans:
Prior service credit arising during the period, net of taxes of nil, $4,408 and $3,001 for 2012, 2011 and 2010, respectively	–		6,921		4,712
Net losses arising during the period, net of tax benefits of $57,375, $74,346 and $27,408 for 2012, 2011 and 2010, respectively	(90,082	)	(116,726	)	(43,031)
Less: amortization of transition obligation, prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits of $8,709, $5,332 and $2,387 for 2012, 2011 and 2010, respectively	13,673		8,372		3,747
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes of $48,069, $64,134 and $21,336 for 2012, 2011 and 2010, respectively	75,471		100,692		33,499
Other comprehensive loss, net of tax benefits	(938	)	(741	)	(1,073)
Comprehensive income attributable to Hawaiian Electric Company, Inc.	$  98,338		$  99,245		$  75,516

Schedule of consolidating balance sheets

Consolidated Balance Sheet Data

December 31	2012		2011
(in thousands, except share data)
Assets
Utility plant, at cost
Property, plant and equipment	$  5,415,968		$  5,103,541
Less accumulated depreciation	(2,040,789	)	(1,966,894	)
Construction in progress	151,378		138,838
Net utility plant	3,526,557		3,275,485
Regulatory assets	864,596		669,389
Other	717,640		729,133
Total assets	$  5,108,793		$  4,674,007
Capitalization and liabilities
Common stock ($6 2/3 par value, authorized 50,000,000 shares, outstanding 14,665,264 shares and 14,233,723 shares in 2012 and 2011, respectively)	$       97,788		$       94,911
Premium on common stock	468,045		426,921
Retained earnings	907,273		881,041
Accumulated other comprehensive loss, net of tax benefits	(970	)	(32	)
Common stock equity	1,472,136		1,402,841
Cumulative preferred stock – not subject to mandatory redemption (authorized 5,000,000 shares, $20 par value (1,114,657 shares outstanding), and 7,000,000 shares, $100 par value (120,000 shares outstanding); dividend rates of 4.25-7.625%)	34,293		34,293
Commitments and contingencies (see below)
Long-term debt, net	1,147,872		1,000,570
Total capitalization	2,654,301		2,437,704
Current portion of long-term debt	–		57,500
Taxes accrued	251,066		230,076
Deferred income taxes	417,611		337,863
Regulatory liabilities	322,074		315,466
Retirement benefits liability	620,591		495,134
Contributions in aid of construction	405,520		356,203
Other	437,630		444,061
Total capitalization and liabilities	$  5,108,793		$  4,674,007

Schedule of regulatory assets

December 31	2012	2011
(in thousands)
Retirement benefit plans (balance primarily varies with plans’ funded statuses)	$660,835	$523,640
Income taxes, net (1 to 55 years)	84,931	83,386
Decoupling revenue balancing account (1 to 2 years)	66,076	20,780
Unamortized expense and premiums on retired debt and equity issuances (14 to 30 years; 2 to 20 years remaining)	17,130	12,267
Vacation earned, but not yet taken (1 year)	8,493	8,161
Postretirement benefits other than pensions (18 years; 1 year remaining)	249	1,861
Other (1 to 50 years; 1 to 47 years remaining)	26,882	19,294
	$864,596	$669,389

Schedule of regulatory liabilities

December 31	2012	2011
(in thousands)
Cost of removal in excess of salvage value (1 to 60 years)	$305,978	$294,817
Retirement benefit plans (5 years beginning with respective utility’s next rate case; primarily 5 years remaining)	15,563	20,000
Other (5 years; 1 to 2 years remaining)	533	649
	$322,074	$315,466

Schedule of changes in asset retirement obligation

(in thousands)	2012		2011
Balance, January 1	$ 50,871		$ 48,630
Accretion expense	1,563		2,202
Liabilities incurred	–		256
Liabilities settled	(4,003	)	(835	)
Revisions in estimated cash flows	–		618
Balance, December 31	$ 48,431		$ 50,871