XML 54 R31.htm IDEA: XBRL DOCUMENT
v3.22.4

Income taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income taxes |
Note 12 · Income taxes
The components of income taxes attributable to net income for common stock were as follows:
| HEI consolidated |  | Hawaiian Electric consolidated
Years ended December 31 | 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
(in thousands) |  |  |  |  |  |  |  |  |  |  |
Federal |  |  |  |  |  |  |  |  |  |  |
Current | $ | 77,595 |  |  | $ | 51,455 |  |  | $ | 23,207 |  |  | $ | 75,118 |  |  | $ | 42,794 |  |  | $ | 31,950 |
Deferred | (37,410) |  |  | (11,689) |  |  | (4,215) |  |  | (39,646) |  |  | (12,109) |  |  | (5,408) |
Deferred tax credits, net* | 4,031 |  |  | 4,611 |  |  | 10,979 |  |  | 137 |  |  | 302 |  |  | 1,549 |
| 44,216 |  |  | 44,377 |  |  | 29,971 |  |  | 35,609 |  |  | 30,987 |  |  | 28,091 |
State |  |  |  |  |  |  |  |  |  |  |
Current | 11,981 |  |  | 12,119 |  |  | 8,430 |  |  | 15,780 |  |  | 4,861 |  |  | 3,768 |
Deferred | 4,914 |  |  | 6,290 |  |  | 2,509 |  |  | (1,769) |  |  | 8,279 |  |  | 8,559 |
Deferred tax credits, net* | 56 |  |  | 21 |  |  | — |  |  | 56 |  |  | 21 |  |  | — |
| 16,951 |  |  | 18,430 |  |  | 10,939 |  |  | 14,067 |  |  | 13,161 |  |  | 12,327 |
Total | $ | 61,167 |  |  | $ | 62,807 |  |  | $ | 40,910 |  |  | $ | 49,676 |  |  | $ | 44,148 |  |  | $ | 40,418 |
* In 2022, 2021 and 2020, primarily represents federal tax credits related to Mauo’s solar-plus-storage project, deferred and amortized starting in 2022, 2021 and 2020, respectively. A reconciliation of the amount of income taxes computed at the federal statutory rate to the amount provided in the consolidated statements of income was as follows:
| HEI consolidated |  | Hawaiian Electric consolidated
Years ended December 31 | 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
(in thousands) |  |  |  |  |  |  |  |  |  |  |
Amount at the federal statutory income tax rate | $ | 63,881 |  |  | $ | 65,281 |  |  | $ | 50,531 |  |  | $ | 50,526 |  |  | $ | 46,995 |  |  | $ | 44,468 |
Increase (decrease) resulting from: |  |  |  |  |  |  |  |  |  |  |
State income taxes, net of federal income tax benefit | 14,438 |  |  | 15,735 |  |  | 9,448 |  |  | 11,026 |  |  | 10,323 |  |  | 9,658 |
Net deferred tax asset (liability) adjustment related to the Tax Act | (9,886) |  |  | (9,886) |  |  | (11,267) |  |  | (9,886) |  |  | (9,886) |  |  | (11,267) |
Other, net | (7,266) |  |  | (8,323) |  |  | (7,802) |  |  | (1,990) |  |  | (3,284) |  |  | (2,441) |
Total | $ | 61,167 |  |  | $ | 62,807 |  |  | $ | 40,910 |  |  | $ | 49,676 |  |  | $ | 44,148 |  |  | $ | 40,418 |
Effective income tax rate (%) | 20.1 |  |  | 20.2 |  |  | 17.0 |  |  | 20.6 |  |  | 19.7 |  |  | 19.1 |
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 | 2022 |  | 2021 |  | 2022 |  | 2021
(in thousands) |  |  |  |  |  |  |
Deferred tax assets |  |  |  |  |  |  |
Regulatory liabilities, excluding amounts attributable to property, plant and equipment | $ | 82,488 |  |  | $ | 87,817 |  |  | $ | 82,488 |  |  | $ | 87,817 |
Operating lease liabilities | 45,016 |  |  | 35,449 |  |  | 37,472 |  |  | 29,661 |
Retirement benefits | 7,692 |  |  | — |  |  | 6,852 |  |  | — |
Revenue taxes | 51,392 |  |  | 35,040 |  |  | 51,392 |  |  | 35,040 |
Allowance for bad debts | 22,734 |  |  | 26,217 |  |  | 2,195 |  |  | 7,156 |
Available-for-sale investments | 120,405 |  |  | 11,728 |  |  | — |  |  | — |
Other 1 | 39,399 |  |  | 46,790 |  |  | 20,287 |  |  | 20,529 |
Total deferred tax assets | 369,126 |  |  | 243,041 |  |  | 200,686 |  |  | 180,203 |
Deferred tax liabilities |  |  |  |  |  |  |
Property, plant and equipment related | 511,832 |  |  | 500,659 |  |  | 497,929 |  |  | 490,713 |
Operating lease right-of-use assets | 44,461 |  |  | 35,271 |  |  | 37,472 |  |  | 29,661 |
Regulatory assets, excluding amounts attributable to property, plant and equipment | 22,183 |  |  | 23,700 |  |  | 22,183 |  |  | 23,700 |
Retirement benefits | — |  |  | 6,863 |  |  | — |  |  | 8,261 |
Other | 53,112 |  |  | 61,308 |  |  | 27,532 |  |  | 36,502 |
Total deferred tax liabilities | 631,588 |  |  | 627,801 |  |  | 585,116 |  |  | 588,837 |
Net deferred income tax liability | $ | 262,462 |  |  | $ | 384,760 |  |  | $ | 384,430 |  |  | $ | 408,634 |
1 As of December 31, 2022, HEI consolidated has deferred tax assets of $4.3 million relating to the benefit of state tax credit carryforwards of $5.6 million. These state tax credit carryforwards primarily relate to the West Loch PV project and do not expire. The Company concluded that as of December 31, 2022, a valuation allowance is not required. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are deductible. Based upon historical taxable income and projections for future taxable income, management believes it is more likely than not the Company and the Utilities will realize substantially all of the benefits of the deferred tax assets. As of December 31, 2022 and 2021, valuation allowances for deferred tax benefits were nil. The Utilities are included in the consolidated federal and Hawaii income tax returns of HEI and are subject to the provisions of HEI’s tax sharing agreement, which determines each subsidiary’s (or subgroup’s) income tax return liabilities and refunds on a standalone basis as if it filed a separate return (or subgroup consolidated return). The following is a reconciliation of the Company’s liability for unrecognized tax benefits for 2022, 2021 and 2020.
| HEI consolidated |  | Hawaiian Electric consolidated
(in millions) | 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
Unrecognized tax benefits, January 1 | $ | 17.1 |  |  | $ | 12.7 |  |  | $ | 2.2 |  |  | $ | 11.6 |  |  | $ | 12.7 |  |  | $ | 1.7 |
Additions based on tax positions taken during the year | 19.0 |  |  | 2.8 |  |  | 0.2 |  |  | 0.1 |  |  | 0.3 |  |  | 0.2 |
Reductions based on tax positions taken during the year | (3.5) |  |  | (0.5) |  |  | — |  |  | — |  |  | — |  |  | — |
Additions for tax positions of prior years | 0.6 |  |  | 7.6 |  |  | 11.6 |  |  | 0.2 |  |  | 0.2 |  |  | 11.6 |
Reductions for tax positions of prior years | (2.6) |  |  | (5.5) |  |  | (0.1) |  |  | (0.2) |  |  | (1.6) |  |  | (0.1) |
Lapses of statute of limitations | — |  |  | — |  |  | (0.2) |  |  | — |  |  | — |  |  | (0.2) |
Settlement | — |  |  | — |  |  | (1.0) |  |  | — |  |  | — |  |  | (0.5) |
Unrecognized tax benefits, December 31 | $ | 30.6 |  |  | $ | 17.1 |  |  | $ | 12.7 |  |  | $ | 11.7 |  |  | $ | 11.6 |  |  | $ | 12.7 |
At December 31, 2022 and 2021, there were $10.2 million of unrecognized tax benefits that, if recognized, would affect the Company’s and Utilities’ annual effective tax rate. HEI consolidated. The Company recognizes interest accrued related to unrecognized tax benefits in “Interest expense-other than on deposit liabilities and other bank borrowings” and penalties, if any, in operating expenses. In 2022, 2021 and 2020, the Company recognized approximately $0.4 million, $0.2 million and $(0.5) million, respectively, in interest expense. The Company had $0.6 million and $0.3 million of interest accrued as of December 31, 2022 and 2021, respectively. Hawaiian Electric consolidated. The Utilities recognize interest accrued related to unrecognized tax benefits in “Interest expense and other charges, net” and penalties, if any, in operating expenses. In 2022, 2021 and 2020, the Utilities recognized approximately $0.1 million, $0.1 million and $(0.3) million, respectively, in interest expense. The Utilities had $0.2 million and $0.1 million of interest accrued as of December 31, 2022 and 2021, respectively. As of December 31, 2022, the disclosures above present the Company’s and the Utilities’ accruals for potential tax liabilities, which involve management’s judgment regarding the likelihood of the benefits being sustained under governmental review. While the Company and the Utilities currently do not expect material changes to occur in the next twelve months, the Company and the Utilities are generally unable to estimate the range of impacts on the balance of uncertain tax positions or the impact on the effective tax rate from the resolution of these issues until the Internal Revenue Service addresses them in the current examination process, and therefore, it is possible that the amount of unrecognized benefit with respect to the Company’s and the Utilities’ uncertain tax positions could increase or decrease within the next 12 months. The final resolution of uncertain tax positions could result in adjustments to recorded amounts. Based on information currently available, the Company and the Utilities believe these accruals have adequately provided for potential income tax issues with federal and state tax authorities, and that the ultimate resolution of tax issues for all open tax periods will not have a material adverse effect on its results of operations, financial condition or liquidity. The statute of limitations for IRS examinations has expired for years prior to 2017. The Company is currently under IRS examination for the tax years 2017 and 2018. In the fourth quarter of 2020, the Company and the Hawaii Department of Taxation agreed to a final assessment of tax liabilities for the years 2011 through 2018, however, the statute of limitations for Hawaii remains open for tax years 2017 and subsequent. Tax developments. The Inflation Reduction Act of 2022 (IRA) was signed by President Biden on August 16, 2022. Key provisions under the IRA include a 15% corporate alternative minimum tax (CAMT) imposed on certain large corporations and a 1% excise tax on stock repurchases after December 31, 2022. Based on current interpretation of the law and current guidance available we do not believe HEI will be impacted by the CAMT or stock repurchase excise tax provisions. The IRA also creates new tax credits and enhances others to stimulate investment in renewable energy sources. Certain provisions of the IRA will become effective beginning tax year 2023. The Company continues to monitor guidance and assess related tax planning opportunities.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration