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Income taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Components of income taxes attributable to net income for common stock

The components of income taxes attributable to net income for common stock were as follows:

	HEI consolidated												Hawaiian Electric consolidated
Years ended December 31	2017				2016				2015				2017				2016				2015
(in thousands)
Federal
Current	$	61,534			$	59,873			$	44,343			$	36,267			$	952			$	—
Deferred*	33,967				43,666				36,664				35,229				70,513				68,757
Deferred tax credits, net	(20		)		268				318				(20		)		268				318
	95,481				103,807				81,325				71,476				71,733				69,075
State
Current	10,076				16,473				2,402				8,947				9,232				(1,048		)
Deferred	3,868				3,452				4,768				2,808				3,873				6,869
Deferred tax credits, net	(32		)		(37		)		4,526				(32		)		(37		)		4,526
	13,912				19,888				11,696				11,723				13,068				10,347
Total	$	109,393			$	123,695			$	93,021			$	83,199			$	84,801			$	79,422

* Included in the amounts for 2017 are federal deferred income tax expenses of $13.4 million and $9.2 million for the Company and Hawaiian Electric consolidated, respectively, primarily to reduce federal accumulated deferred income tax net asset balances (not accounted for under Utility regulatory ratemaking) to reflect the impact of the Tax Act. See “Lower tax rate” below.

Schedule of reconciliation of amount of income taxes computed at federal statutory rate

A reconciliation of the amount of income taxes computed at the federal statutory rate of 35% to the amount provided in the consolidated statements of income was as follows:

	HEI consolidated												Hawaiian Electric consolidated
Years ended December 31	2017				2016				2015				2017				2016				2015
(in thousands)
Amount at the federal statutory income tax rate	$	96,796			$	130,844			$	89,176			$	71,801			$	80,190			$	75,996
Increase (decrease) resulting from:
State income taxes, net of federal income tax benefit	9,789				13,915				8,097				7,584				8,494				6,726
Net deferred tax asset adjustment related to the Tax Act	13,420				—				—				9,168				—				—
Other, net	(10,612		)		(21,064		)		(4,252		)		(5,354		)		(3,883		)		(3,300		)
Total	$	109,393			$	123,695			$	93,021			$	83,199			$	84,801			$	79,422
Effective income tax rate	39.6		%		33.1		%		36.5		%		40.6		%		37.0		%		36.6		%

Schedule of deferred tax assets and liabilities

The tax effects of book and tax basis differences that give rise to deferred tax assets and liabilities were as follows:

	HEI consolidated								Hawaiian Electric consolidated
December 31	2017				2016				2017				2016
(in thousands)
Deferred tax assets
Regulatory liabilities, excluding amounts attributable to property, plant and equipment	$	104,984			$	—			$	104,984			$	—
Net operating loss1	—				—				—				9,158
Allowance for bad debts	16,192				24,500				1,812				2,364
Other	24,397				47,201				11,253				18,720
Total deferred tax assets	145,573				71,701				118,049				30,242
Deferred tax liabilities
Property, plant and equipment related	415,452				642,266				413,891				640,667
Regulatory assets, excluding amounts attributable to property, plant and equipment	38,314				35,107				38,314				35,107
Deferred RAM and RBA revenues	15,038				26,053				15,038				26,053
Retirement benefits	32,952				48,400				38,020				51,445
Other	32,247				48,681				6,827				10,629
Total deferred tax liabilities	534,003				800,507				512,090				763,901
Net deferred income tax liability	$	388,430			$	728,806			$	394,041			$	733,659

¹ The Hawaiian Electric deferred tax asset for 2016 includes the tax effect of the federal net operating loss carryforward of $9 million, which was utilized in 2017, and federal general business credit carryforwards of $3 million utilized in 2017, net of unrecognized federal tax benefits of $3 million due to uncertain tax positions.

Schedule of changes in total unrecognized tax benefits

The following is a reconciliation of the Company’s liability for unrecognized tax benefits for 2017, 2016 and 2015.

	HEI consolidated												Hawaiian Electric consolidated
(in millions)	2017				2016				2015				2017				2016				2015
Unrecognized tax benefits, January 1	$	3.8			$	3.6			$	—			$	3.8			$	3.6			—
Additions based on tax positions taken during the year	0.9				—				—				0.4				—				—
Reductions based on tax positions taken during the year	(0.2		)		(0.1		)		—				(0.2		)		(0.1		)		—
Additions for tax positions of prior years	—				0.3				3.6				—				0.3				3.6
Reductions for tax positions of prior years	(0.5		)		—				—				(0.5		)		—				—
Settlements	—				—				—				—				—				—
Unrecognized tax benefits, December 31	$	4.0			$	3.8			$	3.6			$	3.5			$	3.8			$	3.6

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months.

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