HEI Reports Third Quarter 2019 Earnings

HONOLULU, Nov. 1, 2019 /PRNewswire/ -- Hawaiian Electric Industries, Inc. (NYSE: HE) (HEI) today reported consolidated net income for common stock for the third quarter of 2019 of $63.4 million and diluted earnings per share of $0.58 compared to $65.9 million and EPS of $0.60 for the third quarter of 2018.

"HEI's third quarter earnings were consistent with our expectations, and we continue to execute well on key initiatives across our enterprise," said Constance H. Lau, president and CEO of HEI. "Our utilities continue to work together with our communities and other stakeholders toward achieving a renewable energy future that's affordable, reliable and resilient. This work includes the ongoing performance-based regulation process and our latest renewable energy and grid services request for proposals."

"Our bank's results and earnings growth reflect good performance in a volatile market environment. American continued to deliver strong loan growth and steady net interest margins despite the continued challenges of lower interest rates. In October, American completed the sale of its former headquarters," said Lau.

HAWAIIAN ELECTRIC COMPANY EARNINGS

Hawaiian Electric Company's (Hawaiian Electric)(1) net income for the third quarter of 2019 was $46.8 million compared to $49.7 million in the third quarter of 2018, primarily driven by the following after-tax items:

    --  $6 million revenue increase resulting from rate increases and higher
        rate adjustment mechanism (RAM) revenues, including $2 million from
        Hawaiian Electric (Oahu), $3 million from Maui Electric (Maui County),
        and $1 million from Hawaii Electric Light (Hawaii Island);
    --  $2 million revenue increase from recovery of the Schofield generation
        project under the major project interim recovery (MPIR) mechanism;
    --  $2 million from higher AFUDC and lower interest expense; and

    --  $1 million in revenues from pole attachment fees. These items were
        partially offset by the following after-tax items:
    --  $8 million higher operations and maintenance expenses(2) compared to the
        third quarter of 2018, primarily due to higher overhaul and maintenance
        expenses for generating facilities and higher vegetation management
        expenses;
    --  $5 million in net income impact experienced in the third quarter of 2018
        due to net favorable tax adjustments primarily related to differences
        between the 2017 year-end tax accrual and the filing of the 2017 tax
        return. There were no significant differences between the 2018 year-end
        tax accrual and the filing of the 2018 tax return that impacted net
        income in 2019; and
    --  $2 million higher depreciation expense due to increasing investments for
        the integration of more renewable energy, improved customer reliability
        and greater system efficiency.

Note: Amounts indicated as after-tax in this earnings release are based upon adjusting items using the current year composite statutory tax rates of 25.75% for the utilities and 26.79% for the bank.

(1) Hawaiian Electric, unless otherwise defined, refers to the three utilities, Hawaiian Electric Company, Inc. on Oahu, Hawaii Electric Light Company, Inc. on Hawaii Island, and Maui Electric Company, Limited, serving Maui County.

(2) Includes pension but excludes other net income neutral expenses covered by surcharges or by third parties. See the "Explanation of HEI's Use of Certain Unaudited Non-GAAP Measures" and the related reconciliation accompanying this release.

AMERICAN SAVINGS BANK EARNINGS

American Savings Bank's (American) third quarter 2019 net income was $22.9 million compared to $17.0 million in the second, or linked, quarter and $21.2 million in the prior year quarter. The increase in net income compared to the linked and prior year quarters was driven by a lower provision expense, higher non-interest income, higher net interest income and, compared to the linked quarter, lower non-interest expense.

Total loans were $5.1 billion as of September 30, 2019, up $240.0 million or 6.6% annualized from December 31, 2018, driven mainly by increases in the home equity lines of credit, commercial, and commercial real estate portfolios.

Total deposits were $6.2 billion at September 30, 2019, an increase of $37.4 million or 0.8% annualized from December 31, 2018. Low-cost core deposits were $5.4 billion as of September 30, 2019.

American's return on average equity(3) was 13.7% in the third quarter of 2019 compared to 10.5% in the second quarter of 2019 and 13.8% in the prior year quarter. Return on average assets was 1.29% in the third quarter of 2019 compared to 0.96% in the second quarter of 2019 and 1.22% in the third quarter of 2018.

Please refer to American's news release issued on October 30, 2019 for additional information on American.

HOLDING AND OTHER COMPANIES

The holding and other companies' net loss was $6.2 million in the third quarter of 2019 compared to $5.0 million in the prior year quarter. The higher net loss was primarily due to higher interest expense associated with long-term debt issued in the fourth quarter of 2018.

BOARD DECLARES QUARTERLY DIVIDEND

On October 31, 2019, the Board of Directors maintained HEI's quarterly cash dividend of $0.32 per share, payable on December 10, 2019, to shareholders of record at the close of business on November 22, 2019 (ex-dividend date is November 21, 2019). The dividend would be equivalent to an annual rate of $1.28 per share. Dividends have been paid uninterrupted since 1901. At the indicated annual dividend rate and based on the closing price per share on October 31, 2019 of $45.15, HEI's dividend yield is 2.8%.

(3) Bank return on average equity calculated using weighted average daily common equity.

WEBCAST AND CONFERENCE CALL TO DISCUSS EARNINGS AND EPS GUIDANCE

HEI will conduct a webcast and conference call to review its third quarter 2019 earnings and 2019 EPS guidance on Friday, November 1, 2019, at 10:15 a.m. Hawaii time (4:15 p.m. Eastern time).

Interested parties within the United States may listen to the conference by calling (844) 834-0652 and international parties may listen to the conference by calling (412) 317-5198 or by accessing the webcast on HEI's website at www.hei.com under the "Investor Relations" section, sub-heading "News and Events." HEI and Hawaiian Electric intend to continue to use HEI's website, www.hei.com, as a means of disclosing additional information. Such disclosures will be included on HEI's website in the Investor Relations section.

Accordingly, investors should routinely monitor the Investor Relations section of HEI's website at www.hei.com in addition to following HEI's, Hawaiian Electric's and American's press releases, HEI's and Hawaiian Electric's Securities and Exchange Commission (SEC) filings and HEI's public conference calls and webcasts. The information on HEI's website is not incorporated by reference in this document or in HEI's and Hawaiian Electric's SEC filings unless, and except to the extent, specifically incorporated by reference. Investors may also wish to refer to the Public Utilities Commission of the State of Hawaii (PUC) website at dms.puc.hawaii.gov/dms in order to review documents filed with and issued by the PUC. No information on the PUC website is incorporated by reference in this document or in HEI's and Hawaiian Electric's SEC filings.

An online replay of the November 1, 2019 webcast will be available on HEI's website beginning about two hours after the event. Audio replays of the conference call will also be available approximately two hours after the event through November 15, 2019, by dialing (877) 344-7529 or (412) 317-0088 and entering passcode: 10134898.

HEI supplies power to approximately 95% of Hawaii's population through its electric utilities, Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited; provides a wide array of banking and other financial services to consumers and businesses through American Savings Bank, one of Hawaii's largest financial institutions; and helps advance Hawaii's clean energy and sustainability goals through investments by its non-regulated subsidiary, Pacific Current, LLC.

FORWARD-LOOKING STATEMENTS

This release may contain "forward-looking statements," which include statements that are predictive in nature, depend upon or refer to future events or conditions, and usually include words such as "will," "expects," "anticipates," "intends," "plans," "believes," "predicts," "estimates" or similar expressions. In addition, any statements concerning future financial performance, ongoing business strategies or prospects or possible future actions are also forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are subject to risks, uncertainties and the accuracy of assumptions concerning HEI and its subsidiaries, the performance of the industries in which they do business and economic, political and market factors, among other things. These forward-looking statements are not guarantees of future performance.

Forward-looking statements in this release should be read in conjunction with the "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" discussions (which are incorporated by reference herein) set forth in HEI's Annual Report on Form 10-K for the year ended December 31, 2018 and HEI's other periodic reports that discuss important factors that could cause HEI's results to differ materially from those anticipated in such statements. These forward-looking statements speak only as of the date of the report, presentation or filing in which they are made. Except to the extent required by the federal securities laws, HEI, Hawaiian Electric, American and their subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

NON-GAAP MEASURES

See "Explanation of HEI's Use of Certain Unaudited Non-GAAP Measures" and related reconciliations on pages 9 and 10 of this release.



       Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries


       CONSOLIDATED STATEMENTS OF INCOME DATA


       (Unaudited)


                                                                                                         Three months ended September 30                   Nine months ended September 30



       
              (in thousands, except per share amounts)                                   2019                                   2018                       2019                     2018

    ---


       
              Revenues



       Electric utility                                                                           $
           688,330                         $
          687,409                                   $
           1,900,609  $
          1,865,962



       Bank                                                                                83,201                                   80,496                      247,940                                  233,019



       Other                                                                                    4                                      143                           86                                      218




       Total revenues                                                                     771,535                                  768,048                    2,148,635                                2,099,199

    ---


       
              Expenses



       Electric utility                                                                   616,537                                  613,373                    1,716,562                                1,685,413



       Bank                                                                                54,240                                   53,232                      171,605                                  153,951



       Other                                                                                3,450                                    3,379                       12,589                                   11,083



       Total expenses                                                                     674,227                                  669,984                    1,900,756                                1,850,447

    ---


       
              Operating income (loss)



       Electric utility                                                                    71,793                                   74,036                      184,047                                  180,549



       Bank                                                                                28,961                                   27,264                       76,335                                   79,068



       Other                                                                              (3,446)                                 (3,236)                    (12,503)                                (10,865)



       Total operating income                                                              97,308                                   98,064                      247,879                                  248,752

    ---


       Retirement defined benefits expense-other than service costs                         (648)                                 (1,276)                     (2,172)                                 (4,673)



       Interest expense, net-other than on deposit liabilities and other bank borrowings (22,425)                                (22,523)                     (69,081)                                (66,042)



       Allowance for borrowed funds used during construction                                1,208                                    1,006                        3,465                                    3,815



       Allowance for equity funds used during construction                                  3,250                                    1,962                        9,335                                    8,239

    ---


       
              Income before income taxes                                               78,693                                   77,233                      189,426                                  190,091



       Income taxes                                                                        14,803                                   10,862                       36,390                                   36,473

    ---


       
              Net income                                                               63,890                                   66,371                      153,036                                  153,618



       Preferred stock dividends of subsidiaries                                              471                                      471                        1,417                                    1,417




       
              Net income for common stock                                                      $
           63,419                          $
          65,900                                     $
           151,619    $
          152,201

    ===


       
              Basic earnings per common share                                                    $
           0.58                            $
          0.61                                        $
           1.39       $
          1.40

    ===


       
              Diluted earnings per common share                                                  $
           0.58                            $
          0.60                                        $
           1.39       $
          1.40

    ===


       
              Dividends declared per common share                                                $
           0.32                            $
          0.31                                        $
           0.96       $
          0.93

    ===


       
              Weighted-average number of common shares outstanding                    108,973                                  108,879                      108,941                                  108,847

    ===


       
              Weighted-average shares assuming dilution                               109,363                                  109,055                      109,378                                  109,090

    ===


       
              Net income (loss) for common stock by segment



       Electric utility                                                                            $
           46,779                          $
          49,712                                     $
           111,479    $
          108,356



       Bank                                                                                22,888                                   21,221                       60,743                                   60,742



       Other                                                                              (6,248)                                 (5,033)                    (20,603)                                (16,897)




       
              Net income for common stock                                                      $
           63,419                          $
          65,900                                     $
           151,619    $
          152,201

    ===


       Comprehensive income attributable to Hawaiian Electric Industries, Inc.                     $
           66,716                          $
          61,311                                     $
           177,856    $
          131,014

    ===


       Return on average common equity (twelve months ended)(1)                                                                               9.2
        %                         8.7
          %

    ===



               This information should be read
                in conjunction with the
                consolidated financial
                statements and the notes thereto
                in HEI filings with the SEC.


               Results of operations for interim
                periods are not necessarily
                indicative of results to be
                expected for future interim
                periods or the full year.




                            (1)  On a core basis, 2019 and
                             2018 returns on average common
                             equity (twelve months ended
                             September 30) were 9.2% and
                             9.4%, respectively.  See
                             reconciliation of GAAP to non-
                             GAAP measures.



       Hawaiian Electric Company, Inc. (Hawaiian Electric) and Subsidiaries



       CONSOLIDATED STATEMENTS OF INCOME DATA



       (Unaudited)


                                                                                           Three months ended September 30                  Nine months ended September 30



       
                ($ in thousands, except per barrel amounts)                 2019                                2018                    2019                       2018

    ---


       
                Revenues                                                         $
        688,330                         $
          687,409                                  $
         1,900,609  $
         1,865,962

    ---


       
                Expenses



       Fuel oil                                                              199,093                               206,551                   541,322                                  545,236



       Purchased power                                                       175,037                               177,590                   472,336                                  478,238



       Other operation and maintenance                                       124,415                               113,553                   361,805                                  333,805



       Depreciation                                                           53,935                                50,983                   161,795                                  151,810



       Taxes, other than income taxes                                         64,057                                64,696                   179,304                                  176,324



       Total expenses                                                        616,537                               613,373                 1,716,562                                1,685,413

    ---


       
                Operating income                                          71,793                                74,036                   184,047                                  180,549



       Allowance for equity funds used during construction                     3,250                                 1,962                     9,335                                    8,239



       Retirement defined benefits expense-other than service costs            (723)                                (682)                  (2,127)                                 (2,934)



       Interest expense and other charges, net                              (17,429)                             (18,968)                  (53,945)                                (54,822)



       Allowance for borrowed funds used during construction                   1,208                                 1,006                     3,465                                    3,815

    ---


       
                Income before income taxes                                58,099                                57,354                   140,775                                  134,847



       Income taxes                                                           10,822                                 7,144                    27,800                                   24,995

    ---


       
                Net income                                                47,277                                50,210                   112,975                                  109,852



       Preferred stock dividends of subsidiaries                                 228                                   228                       686                                      686

    ---


       
                Net income attributable to Hawaiian Electric              47,049                                49,982                   112,289                                  109,166



       Preferred stock dividends of Hawaiian Electric                            270                                   270                       810                                      810



       
                Net income for common stock                                       $
        46,779                          $
          49,712                                    $
         111,479    $
         108,356

    ===


       
                Comprehensive income attributable to Hawaiian Electric            $
        46,805                          $
          49,740                                    $
         111,552    $
         108,441

    ===


       OTHER ELECTRIC UTILITY INFORMATION



       Kilowatthour sales (millions)



          Hawaiian Electric                                                    1,823                                 1,761                     4,840                                    4,855



          Hawaii Electric Light                                                  279                                   277                       777                                      796



          Maui Electric                                                          312                                   291                       832                                      818


                                                                                2,414                                 2,329                     6,449                                    6,469




       Average fuel oil cost per barrel                                                $
        82.30                           $
          90.93                                      $
         83.64      $
         84.67



       Return on average common equity (twelve months ended)(1)                                                               7.6
        %                      7.2
            %



               This information should be read
                in conjunction with the
                consolidated financial
                statements and the notes thereto
                in Hawaiian Electric filings
                with the SEC. Results of
                operations for interim periods
                are not necessarily indicative
                of results to be expected for
                future interim periods or the
                full year.




                            (1)  Simple average. On a core
                             basis, 2019 and 2018 returns on
                             average common equity (twelve
                             months ended September 30) were
                             7.6% and 7.7%, respectively.
                             See reconciliation of GAAP to
                             non-GAAP measures.



       American Savings Bank, F.S.B.



       STATEMENTS OF INCOME DATA



       (Unaudited)


                                                                                            
       Three months ended                                                          Nine months ended September 30



       ($ in thousands)                                                 September 30,                             June 30,         September 30,                          2019                                         2018
                                                                                  2019                                  2019                   2018

    ---


       
                Interest and dividend income



       Interest and fees on loans                                                         $
       59,260                                                  $
       58,620                                         $
       55,885                 $
        175,740    $
        163,318



       Interest and dividends on investment securities                          7,599                                        7,535                                  9,300                                        25,762      27,130



       Total interest and dividend income                                      66,859                                       66,155                                 65,185                                       201,502     190,448

    ---


       
                Interest expense



       Interest on deposit liabilities                                          4,384                                        4,287                                  3,635                                        12,923       9,876



       Interest on other borrowings                                               422                                          411                                    404                                         1,361       1,293



       Total interest expense                                                   4,806                                        4,698                                  4,039                                        14,284      11,169

    ---


       
                Net interest income                                        62,053                                       61,457                                 61,146                                       187,218     179,279



       Provision for loan losses                                                3,315                                        7,688                                  6,033                                        17,873      12,337




       
                Net interest income after provision for loan losses        58,738                                       53,769                                 55,113                                       169,345     166,942

    ---


       
                Noninterest income



       Fees from other financial services                                       5,085                                        4,798                                  4,543                                        14,445      13,941



       Fee income on deposit liabilities                                        5,320                                        5,004                                  5,454                                        15,402      15,781



       Fee income on other financial products                                   1,706                                        1,830                                  1,746                                         5,129       5,075



       Bank-owned life insurance                                                1,660                                        2,390                                  2,663                                         6,309       4,667



       Mortgage banking income                                                  1,490                                          976                                    169                                         3,080       1,399



       Gains on sale of investment securities, net                                653                                                                                                                             653



       Other income, net                                                          428                                          534                                    736                                         1,420       1,708



       Total noninterest income                                                16,342                                       15,532                                 15,311                                        46,438      42,571

    ---


       
                Noninterest expense



       Compensation and employee benefits                                      25,364                                       25,750                                 23,952                                        76,626      72,047



       Occupancy                                                                5,694                                        5,479                                  4,363                                        15,843      12,837



       Data processing                                                          3,763                                        3,852                                  3,583                                        11,353      10,587



       Services                                                                 2,829                                        2,606                                  2,485                                         7,861       8,560



       Equipment                                                                2,163                                        2,189                                  1,783                                         6,416       5,385



       Office supplies, printing and postage                                    1,297                                        1,663                                  1,556                                         4,320       4,554



       Marketing                                                                1,142                                        1,323                                    993                                         3,455       2,723



       FDIC insurance                                                             (5)                                         628                                    638                                         1,249       2,078



       Other expense                                                            3,676                                        4,519                                  4,240                                        12,049      12,897



       Total noninterest expense                                               45,923                                       48,009                                 43,593                                       139,172     131,668

    ---


       
                Income before income taxes                                 29,157                                       21,292                                 26,831                                        76,611      77,845



       Income taxes                                                             6,269                                        4,276                                  5,610                                        15,868      17,103



       
                Net income                                                        $
     
         22,888                                              $
     
         17,016                                $
          
         21,221              $
     
          60,743 $
     
          60,742

    ===


       
                Comprehensive income                                              $
     
         26,697                                              $
     
         31,291                                $
          
         16,480              $
     
          85,079 $
     
          39,944

    ===


       OTHER BANK INFORMATION (annualized %, except as of period end)



       Return on average assets                                                  1.29                                         0.96                                   1.22                                          1.14        1.18



       Return on average equity                                                 13.75                                        10.46                                  13.80                                         12.44       13.32



       Return on average tangible common equity                                 15.68                                        11.97                                  15.93                                         14.23       15.40



       Net interest margin                                                       3.82                                         3.82                                   3.81                                          3.87        3.78



       Efficiency ratio                                                         58.58                                        62.36                                  57.02                                         59.56       59.35



       Net charge-offs to average loans outstanding                              0.69                                         0.29                                   0.40                                          0.46        0.33



       As of period end



       Nonaccrual loans to loans receivable held for investment                  0.63                                         0.79                                   0.59



       Allowance for loan losses to loans outstanding                            1.04                                         1.17                                   1.14



       Tangible common equity to tangible assets                                  8.4                                          8.2                                    7.7



       Tier-1 leverage ratio                                                      8.8                                          8.7                                    8.6



       Total capital ratio                                                       14.0                                         14.0                                   13.8



       Dividend paid to HEI (via ASB Hawaii, Inc.) ($ in millions)                          $
       14.0                                                    $
       15.0                                           $
       14.0                    $
        47.0       $
        36.0



               This information should be read
                in conjunction with the
                consolidated financial
                statements and the notes
                thereto in HEI filings with the
                SEC.


               Results of operations for
                interim periods are not
                necessarily indicative of
                results to be expected for
                future interim periods or the
                full year.

EXPLANATION OF HEI'S USE OF CERTAIN UNAUDITED NON-GAAP MEASURES

HEI and Hawaiian Electric management use certain non-GAAP measures, which exclude certain items that are not reflective of ongoing operations or that are not expected to reoccur, to evaluate the performance of HEI and the utility. Management believes these non-GAAP measures provide useful supplemental information and are a better indicator of the companies' core operating activities. Core earnings and other financial measures as presented below may not be comparable to similarly titled measures used by other companies. The accompanying tables provide a reconciliation of reported GAAP(1) earnings to non-GAAP core earnings and the adjusted return on average common equity (ROACE) for HEI and the utility.

The reconciling adjustments from GAAP earnings to core earnings exclude the 2017 impact of the federal tax reform act due to the adjustment of the deferred tax balances and the $1,000 non-executive employee bonuses paid by the bank related to federal tax reform. Management does not consider these items to be representative of the company's fundamental core earnings. Management has shown adjusted non-GAAP (core) net income, adjusted non-GAAP (core) ROACE in order to provide better comparability of ROACE between periods.

The accompanying table also provides the calculation of utility GAAP other operation and maintenance (O&M) expense adjusted for "O&M-related net income neutral items," which are O&M expenses covered by specific surcharges or by third parties. These "O&M-related net income neutral items" are grossed-up in revenue and expense and do not impact net income.


                     RECONCILIATION OF GAAP(1) TO NON-GAAP MEASURES

    ---


       
                Hawaiian Electric Industries, Inc. and Subsidiaries (HEI)



       Unaudited                                                                  Twelve months ended September 30


                     ($ in millions)                            2019                                         2018

    ---                                                                                                      ---

                     HEI CONSOLIDATED NET INCOME


                     GAAP (as reported)                                  $
          
                201.2                               $
       
       184.6



       Excluding special items (after-tax):


        One-time non-executive bank
         employee bonus related to
         federal tax reform                                        -                                                   0.7


        Federal tax reform impacts(2)                              -                                                  13.4



                     Non-GAAP (core) net income                          $
          
                201.2                               $
       
       198.7

    ---

                     HEI CONSOLIDATED AVERAGE COMMON
                      EQUITY                                           $
          
                2,187.4                             $
       
       2,117.5

    ---

                     HEI CONSOLIDATED RETURN ON AVERAGE COMMON
                      EQUITY (ROACE) (simple average)


                     Based on GAAP                               9.2                                                    8.7
                                                          
            %                                                
        %


                     Based on non-GAAP (core)(3)                 9.2                                                    9.4
                                                          
            %                                                
        %

    ---                                                                                                                     ---



     Note:  Columns may not foot due
      to rounding




                  (1)  Accounting principles
                   generally accepted in the
                   United States of America




                  2    Reflects the lower rates enacted by federal tax
                   reform, primarily the adjustments to reduce the
                   unregulated net deferred tax asset balances




                  (3)  Calculated as core net
                   income divided by average GAAP
                   common equity



       
                RECONCILIATION OF GAAP(1) TO NON-GAAP MEASURES

    ---


       
                Hawaiian Electric Company, Inc. (Hawaiian Electric) and Subsidiaries



       Unaudited


                                                                                                                                                                          Twelve months ended September 30



       
                ($ in millions)                                                                                                        2019                                                               2018



                     HAWAIIAN ELECTRIC CONSOLIDATED NET INCOME



       
                GAAP (as reported)                                                                                                            $
        
        146.8                                                     $
        
       133.7


        Excluding special items (after-tax):



       Federal tax reform impacts(2)                                                                                                                                                                            9.2


                     Non-GAAP (core) net income                                                                                                    $
        
        146.8                                                     $
        
       142.9

    ---


       
                HAWAIIAN ELECTRIC CONSOLIDATED AVERAGE COMMON EQUITY                  $
              
                1,934.7                                              $
              
                1,852.7




       
                HAWAIIAN ELECTRIC CONSOLIDATED RETURN ON AVERAGE COMMON EQUITY (ROACE) (simple average)



       
                Based on GAAP                                                                                                           7.6                                                                  7.2
                                                                                                                                          
          %                                                           
           %


                     Based on non-GAAP (core)                                                                                                7.6                                                                  7.7
                             (3)                                                                                                        
          %                                                           
           %

    ---



                                                                                                     Three months ended September 30                         Nine months ended September 30


                     (in millions)                                                  2019                                2018                    2019                                                               2018

    ---                                                                                                                                                                                                          ---

                     HAWAIIAN ELECTRIC CONSOLIDATED OTHER
                      OPERATION AND MAINTENANCE (O&M) EXPENSE


                     GAAP (as reported)                                                      $
              
                124.4                           $
       
         113.6                                                     $
       
        361.8  $
     
     333.8


        Excluding other O&M-related
         net income neutral items4                                                   0.4                                            0.2                                                                0.5                              0.7



                     Non-GAAP (Adjusted other
                      O&M expense)                                                           $
              
                124.0                           $
       
         113.3                                                     $
       
        361.3  $
     
     333.1

    ---



               Note:  Columns may not foot due
                to rounding




                            (1)  Accounting principles
                             generally accepted in the
                             United States of America




                            2  Reflects the lower rates
                             enacted by federal tax reform,
                             primarily the adjustments to
                             reduce the unregulated net
                             deferred tax asset balances




                            (3)  Calculated as core net
                             income divided by average GAAP
                             common equity




                            4  Expenses covered by
                             surcharges or by third parties
                             recorded in revenues



     Contact: Julie R. Smolinski     Telephone: (808) 543-7300


               Director, Investor
                Relations & Strategic
                Planning                         E-mail:  ir@hei.com

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SOURCE Hawaiian Electric Industries, Inc.