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Segment financial information | 12 Months Ended
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Dec. 31, 2017
Segment Reporting [Abstract] |
Segment financial information |
2 · Segment financial information
The electric utility and bank segments are strategic business units of the Company that offer different products and services and operate in different regulatory environments. The accounting policies of the segments are the same as those described for the Company in the summary of significant accounting policies, except as otherwise indicated and except that federal and state income taxes for each segment are calculated on a “stand-alone” basis. HEI evaluates segment performance based on net income. Each segment accounts for intersegment sales and transfers as if the sales and transfers were to third parties, that is, at current market prices. Intersegment revenues consist primarily of Hamakua Energy revenues, interest, rent and preferred stock dividends.
Electric utility
Hawaiian Electric and its wholly-owned operating subsidiaries, Hawaii Electric Light and Maui Electric, are public electric utilities in the business of generating, purchasing, transmitting, distributing and selling electric energy on all major islands in Hawaii other than Kauai, and are regulated by the PUC. The utility subsidiaries are aggregated within the electric utility segment because they: (1) are involved in the business of supplying electric energy in the same geographical location (i.e., the State of Hawaii), (2) have similar production processes that include electric generators (e.g., conventional oil-fired steam units and combustion turbines), (3) serve similar customers within their franchise territories (e.g., residential, commercial and industrial customers), (4) use similar electric grids to distribute the energy to their customers, (5) are regulated by the PUC and undergo similar rate-making processes, (6) have similar economic characteristics and (7) perform financial reporting oversight and management of the business at the consolidated level.
Bank
ASB is a federally chartered savings bank providing a full range of banking services to individual and business customers through its branch system in Hawaii. ASB is subject to examination and comprehensive regulation by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), and is subject to reserve requirements established by the Board of Governors of the Federal Reserve System.
Other
“Other” includes amounts for the holding companies (HEI and ASB Hawaii, Inc.), other subsidiaries not qualifying as reportable segments and intercompany eliminations. Acquisition of Hamakua power plant. In September 2017, HEI formed new 100% owned subsidiaries--Pacific Current, LLC and its subsidiary Hamakua Holdings, LLC and its subsidiary, Hamakua Energy, LLC. On November 24, 2017, Hamakua Energy, LLC acquired Hamakua Energy Partners, L.P.’s 60-MW combined cycle power plant and other assets from affiliates of ArcLight Capital Partners, a private equity firm focused on energy infrastructure investments. The plant sells the power it produces only to Hawaii Electric Light under an existing power purchase agreement (PPA) that expires in 2030. On December 26, 2017, Hamakua Energy, LLC closed on $67 million of non-recourse project financing in the form of 4.02% senior secured notes due December 31, 2030. Acquisition of a Solar + Storage Power Purchase Agreement (PPA). In November 2017, HEI, through its wholly-owned subsidiary Pacific Current, LLC, formed a new subsidiary, Mauo Holdings, LLC and its subsidiary Mauo, LLC. On February 2, 2018, Mauo, LLC executed definitive agreements to acquire a solar-plus-storage PPA for a multi-site, commercial-scale project that will provide 8.6 MW of solar capacity and 42.3 MWH of storage capacity on the islands of Maui and Oahu. The PPA has a 15-year term with an option to extend for an additional five years. The system will be constructed by a third party contractor under an Engineering, Procurement and Construction (EPC) contract that was contemporaneously negotiated and executed by Mauo, LLC. The EPC contract provides a fixed price for the purchase of the completed system, a project completion schedule and performance obligations designed to match the requirements of the PPA. Mauo, LLC plans to fund the construction of the project with a construction facility that will be repaid at the commercial operation date (ultimately with cash from investment tax credits, state renewable tax credits and non-recourse project debt). The facilities are expected to be operational in 2019. Segment financial information was as follows:
(in thousands) | Electric utility |  | Bank |  |  | Other |  |  | Total |
2017 |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers | $ | 2,257,455 |  |  | $ | 297,640 |  |  | $ | 530 |  |  | $ | 2,555,625 |
Intersegment revenues (eliminations) | 111 |  |  | — |  |  | (111 | ) |  | — |
Revenues | 2,257,566 |  |  | 297,640 |  |  | 419 |  |  | 2,555,625 |
Depreciation and amortization | 201,282 |  |  | 19,416 |  |  | 1,300 |  |  | 221,998 |
Interest expense, net | 69,637 |  |  | 12,156 |  |  | 9,335 |  |  | 91,128 |
Income (loss) before income taxes | 205,145 |  |  | 98,716 |  |  | (27,281 | ) |  | 276,580 |
Income taxes (benefit) | 83,199 |  |  | 31,719 |  |  | (5,525 | ) |  | 109,393 |
Net income (loss) | 121,946 |  |  | 66,997 |  |  | (21,756 | ) |  | 167,187 |
Preferred stock dividends of subsidiaries | 1,995 |  |  | — |  |  | (105 | ) |  | 1,890 |
Net income (loss) for common stock | 119,951 |  |  | 66,997 |  |  | (21,651 | ) |  | 165,297 |
Capital expenditures | 441,598 |  |  | 53,272 |  |  | 317 |  |  | 495,187 |
Assets (at December 31, 2017) | 6,196,281 |  |  | 6,798,659 |  |  | 104,888 |  |  | 13,099,828 |
2016 |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers | $ | 2,094,224 |  |  | $ | 285,924 |  |  | $ | 506 |  |  | $ | 2,380,654 |
Intersegment revenues (eliminations) | 144 |  |  | — |  |  | (144 | ) |  | — |
Revenues | 2,094,368 |  |  | 285,924 |  |  | 362 |  |  | 2,380,654 |
Depreciation and amortization | 193,996 |  |  | 9,813 |  |  | 937 |  |  | 204,746 |
Interest expense, net | 66,824 |  |  | 12,755 |  |  | 8,979 |  |  | 88,558 |
Income before income taxes | 229,113 |  |  | 87,352 |  |  | 57,376 |  |  | 373,841 |
Income taxes | 84,801 |  |  | 30,073 |  |  | 8,821 |  |  | 123,695 |
Net income | 144,312 |  |  | 57,279 |  |  | 48,555 |  |  | 250,146 |
Preferred stock dividends of subsidiaries | 1,995 |  |  | — |  |  | (105 | ) |  | 1,890 |
Net income for common stock | 142,317 |  |  | 57,279 |  |  | 48,660 |  |  | 248,256 |
Capital expenditures | 320,437 |  |  | 9,394 |  |  | 212 |  |  | 330,043 |
Assets (at December 31, 2016) | 5,975,428 |  |  | 6,421,357 |  |  | 28,721 |  |  | 12,425,506 |
2015 |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers | $ | 2,335,135 |  |  | $ | 267,733 |  |  | $ | 114 |  |  | $ | 2,602,982 |
Intersegment revenues (eliminations) | 31 |  |  | — |  |  | (31 | ) |  | — |
Revenues | 2,335,166 |  |  | 267,733 |  |  | 83 |  |  | 2,602,982 |
Depreciation and amortization | 186,319 |  |  | 7,928 |  |  | 1,338 |  |  | 195,585 |
Interest expense, net | 66,370 |  |  | 11,326 |  |  | 10,780 |  |  | 88,476 |
Income (loss) before income taxes | 217,131 |  |  | 83,812 |  |  | (46,155 | ) |  | 254,788 |
Income taxes (benefit) | 79,422 |  |  | 29,082 |  |  | (15,483 | ) |  | 93,021 |
Net income (loss) | 137,709 |  |  | 54,730 |  |  | (30,672 | ) |  | 161,767 |
Preferred stock dividends of subsidiaries | 1,995 |  |  | — |  |  | (105 | ) |  | 1,890 |
Net income (loss) for common stock | 135,714 |  |  | 54,730 |  |  | (30,567 | ) |  | 159,877 |
Capital expenditures | 350,161 |  |  | 13,470 |  |  | 173 |  |  | 363,804 |
Assets (at December 31, 2015) | 5,672,210 |  |  | 6,014,755 |  |  | 95,053 |  |  | 11,782,018 |
Intercompany electricity sales of the Utilities to the bank and “other” segments are not eliminated because those segments would need to purchase electricity from another source if it were not provided by the Utilities and the profit on such sales is nominal. Bank fees that ASB charges the Utilities and “other” segments are not eliminated because those segments would pay fees to another financial institution if they were to bank with another institution and the profit on such fees is nominal. Hamakua Energy's profit on electricity sales to Hawaii Electric Light are not eliminated because profit on sales to regulated affiliates is not required to be eliminated because the PPA was approved by the PUC and it is probable that, through the ratemaking process, future revenue from Hawaii Electric Light’s sale of the electricity will approximate its purchase price from Hamakua Energy under the PPA.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
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