Hawaiian Electric Industries · NYSE:HE

Hawaiian Electric Industries — Wells Fargo Utility Symposium 2016

68 slides from Hawaiian Electric Industries's conference presentation, Dec 6, 2016

  1. Slide 1: Wells Fargo Utility Symposium, December 2016

    8FMMT'BSHP6UJMJUZ4ZNQPTJVN %FDFNCFS Hawaiian Electric Industries, Inc.

  2. Slide 2: Building strength through Leadership

    Building strength through Leadership

  3. Slide 3: Constance H. Lau

    Constance H. Lau President and Chief Executive OfÄcer Chairman Chairman Hawaiian Electric Industries, Inc. Hawaiian Electric Company, Inc. American Savings Bank, F.S.B. Ms. Lau was named President and Chief Executive OfÄcer of Hawaiian Electric Industries, Inc. (HEI) in May 2006. She also serves as

  4. Slide 4: Alan M. Oshima

    Alan M. Oshima President and Chief Executive OfÄcer Hawaiian Electric Company, Inc. Mr. Oshima was named President and Chief Executive OfÄcer of the Hawaiian Electric Company, Inc. effective Oct. 1, 2014. Mr. Oshima Ärst joined Hawaiian Electric as a member of the board of directors in 2008. In 2011

  5. Slide 5: Richard F. Wacker

    Richard F. Wacker President and Chief Executive OfÄcer American Savings Bank, F.S.B. Mr. Wacker was named President and Chief Executive OfÄcer of American Savings Bank (ASB) in November 2010 and serves as a director on the ASB Board. Prior to joining ASB, Mr. Wacker was Chairman of Korea Exchange Ba

  6. Slide 6: James A. Ajello

    James A. Ajello Executive Vice President and Chief Financial OfÄcer Hawaiian Electric Industries, Inc. Mr. Ajello joined Hawaiian Electric Industries, Inc. in January 2009. Prior to joining HEI, Mr. Ajello was Senior Vice President - Business Development at Reliant Energy, Inc. (Reliant). He joined

  7. Slide 7: Greg C. Hazelton

    Greg C. Hazelton Senior Vice President, Finance Hawaiian Electric Industries, Inc. Mr. Hazelton re-joined the Hawaiian Electric Industries, Inc. (HEI) leadership team as Senior Vice President, Finance in October 2016. Prior to assuming his current position at HEI, Mr. Hazelton was NW Natural’s Senio

  8. Slide 8: Clifford H. Chen

    Clifford H. Chen Treasurer, Manager of Investor Relations and Strategic Planning Hawaiian Electric Industries, Inc. Mr. Chen joined Hawaiian Electric Industries, Inc. in June 2014. Mr. Chen has a strong investment banking/corporate Änancial markets background, working for approximately 10 years at U

  9. Slide 9: Cautionary Note Regarding Forward-Looking Statements

    &$87,21$5<127(5(*$5',1*)25:$5'/22.,1*67$7(0(176 7KLVSUHVHQWDWLRQPDGHE\+DZDLLDQ(OHFWULF,QGXVWULHV,QF +(, DQG+DZDLLDQ(OHFWULF&RPSDQ\,QF +DZDLLDQ(OHFWULF DQGWKHLU VXEVLGLDULHVFRQWDLQ³IRUZDUGORRNLQJVWDWHPHQWV´ZKLFKLQFOXGHVWDWHPHQWVWKDWDUHSUHGLFWLYHLQQDWXUHGHSHQGXSRQRUUHIHUWRIXWXUH HYHQWVRUFRQGLWLRQVDQGX

  10. Slide 10: Forward-looking statements (continued)

    ‡ WKHDELOLW\RIWKH&RPSDQ\DQGWKH8WLOLWLHVWRDFFHVVWKHFUHGLWDQGFDSLWDOPDUNHWV HJWRREWDLQFRPPHUFLDOSDSHUDQGRWKHUVKRUWWHUP DQGORQJWHUPGHEWILQDQFLQJLQFOXGLQJOLQHVRIFUHGLWDQGLQWKHFDVHRI+(,WRLVVXHFRPPRQVWRFN XQGHUYRODWLOHDQGFKDOOHQJLQJ PDUNHWFRQGLWLRQVDQGWKHFRVWRIVXFKILQDQFLQJVLIDYDLODEOH ‡ WKHULVNVLQKHUHQWL

  11. Slide 11: Forward-looking statements (continued)

    ‡ FDSDFLW\DQGVXSSO\FRQVWUDLQWVRUGLIILFXOWLHVHVSHFLDOO\LIJHQHUDWLQJXQLWV XWLOLW\RZQHGRU,33RZQHG IDLORUPHDVXUHVVXFKDVGHPDQG VLGHPDQDJHPHQW '60 GLVWULEXWHGJHQHUDWLRQ '* FRPELQHGKHDWDQGSRZHURURWKHUILUPFDSDFLW\VXSSO\VLGHUHVRXUFHVIDOOVKRUWRI DFKLHYLQJWKHLUIRUHFDVWHGEHQHILWVRUDUHRWKHUZLVHLQVXIILFLHQWWRUHGX

  12. Slide 12: Forward-looking statements (continued)

    ‡ IHGHUDOVWDWHFRXQW\DQGLQWHUQDWLRQDOJRYHUQPHQWDODQGUHJXODWRU\DFWLRQVVXFKDVH[LVWLQJQHZDQGFKDQJHVLQODZVUXOHVDQG UHJXODWLRQVDSSOLFDEOHWR+(,WKH8WLOLWLHVDQG$6% LQFOXGLQJFKDQJHVLQWD[DWLRQLQFUHDVHVLQFDSLWDOUHTXLUHPHQWVUHJXODWRU\SROLF\ FKDQJHVHQYLURQPHQWDOODZVDQGUHJXODWLRQV LQFOXGLQJUHVXOWLQJFRPSOLDQFHFRVWV

  13. Slide 13: Forward-looking statements (continued)

    ‡ IDVWHUWKDQH[SHFWHGORDQSUHSD\PHQWVWKDWFDQFDXVHDQDFFHOHUDWLRQRIWKHDPRUWL]DWLRQRISUHPLXPVRQORDQVDQGLQYHVWPHQWVDQGWKH LPSDLUPHQWRIPRUWJDJHVHUYLFLQJDVVHWVRI$6% ‡ FKDQJHVLQ$6%¶VORDQSRUWIROLRFUHGLWSURILOHDQGDVVHWTXDOLW\ZKLFKPD\LQFUHDVHRUGHFUHDVHWKHUHTXLUHGOHYHORISURYLVLRQIRUORDQ ORVVHVDOORZDQFHIRUORDQORV

  14. Slide 14: Explanation of HEI's Use of Certain Unaudited Non-GAAP Measures

    (;3/$1$7,212)+(,¶686(2)&(57$,181$8',7('121*$$30($685(6 +(,DQG+DZDLLDQ(OHFWULF&RPSDQ\PDQDJHPHQWXVHFHUWDLQQRQ*$$3PHDVXUHVWRHYDOXDWHWKHSHUIRUPDQFHRI+(,DQGWKHXWLOLW\ 0DQDJHPHQWEHOLHYHVWKHVHQRQ*$$3PHDVXUHVSURYLGHXVHIXOLQIRUPDWLRQDQGDUHDEHWWHULQGLFDWRURIWKHFRPSDQLHV¶FRUHRSHUDWLQJDFWLYLWLHV &RUHHDUQLQJVDQG

  15. Slide 15: Reconciliation of GAAP to Non-GAAP Measures (HEI)

    1 RECONCILIATION OF GAAP TO NON-GAAP MEASURES Hawaiian Electric Industries, Inc. and Subsidiaries (HEI) Unaudited Three months ended September 30 Nine months ended September 30 ($ in millions, except per share amounts) 2016 2015 2016 2015 HEI CONSOLIDATED (INCOME) EXPENSES RELATED TO THE TERMINATED

  16. Slide 16: Reconciliation of GAAP to Non-GAAP Measures (Hawaiian Electric)

    1 RECONCILIATION OF GAAP TO NON-GAAP MEASURES Hawaiian Electric Company, Inc. and Subsidiaries Unaudited Three months ended September 30 Nine months ended September 30 ($ in millions) 2016 2015 2016 2015 HAWAIIAN ELECTRIC CONSOLIDATED COSTS RELATED TO THE TERMINATED MERGER WITH NEXTERA ENERGY Pre-ta

  17. Slide 17: Reconciliation of Non-GAAP Core EPS Guidance to GAAP EPS Guidance

    5(&21&,/,$7,212)121*$$3 &25( (36*8,'$1&(72*$$3(36*8,'$1&( 7KHUHFRQFLOLQJDGMXVWPHQWVIURP*$$3GLOXWHGHDUQLQJVSHUFRPPRQVKDUH (36 WRFRUH(36DUHOLPLWHGWRWKHFRVWVIHHVDQG UHLPEXUVHPHQWV LQFOXGHV\HDUWRGDWHDFWXDOUHVXOWVWKURXJK UHODWHGWRWKHUHFHQWO\WHUPLQDWHGPHUJHUEHWZHHQ+(,DQG1H[W(UD(QHUJ\ ,QFDQGWKHFDQFHOOHGVSL

  18. Slide 18: Company Overview

    Company Overview Providing Essential Electric and Financial Services Ensuring a Brighter and Greener Future for the Communities We Serve 1

  19. Slide 19: YTD 2016 Highlights

    YTD 2016 Highlights  Third quarter results significantly impacted by the NEE merger termination fee  Hawaiian Electric marks 125 years of serving Hawaii  Comprehensive Update to  Excellent deposit growth Power Supply Improvement and higher net interest Plans income  Focused on opportunities to

  20. Slide 20: HEI Profile

    HEI Profile Subsidiary Company 1 Contributions to Net Income Bank 28% Utility 72% 2 Market capitalization $3.4B 2 Total enterprise value $4.7B Capital structure: consolidated common equity to total capitalization 56% LTM 3Q16 Consolidated GAAP ROE / Core ROE 12.3% / 9.5% 2 Dividend yield 4.0% 2015 D

  21. Slide 21: Hawaiian Electric Company and American Savings Bank Service Area

    Hawaiian Electric Company and American Savings Bank Service Area  Utility: 100% Market Share for 95% of state; 2015 Rate Base of $2.75B  Bank: 3rd Largest Bank in the State1; ~$6B in assets Maui Electric Kauai 4 Customers: 70,533 Generating capability: 268 MW Oahu 39 IPP firm contract power: 4 MW

  22. Slide 22: HEI Historical Financial Performance (GAAP)

    HEI Historical Financial Performance (GAAP) Net Income Diluted Earnings (in millions) 5-Year EPS CAGR: Per Share (EPS) $200 4.4% $2.00 1 $1.62 $1.63 1 $1.50 $1.60 $1.44 $1.42 $150 $1.21 $1.20 $100 $0.80 $50 $0.40 $114 $138 $139 $162 $168 $160 $0 $0.00 2010 2011 2012 2013 2014 2015 ROE 7.8% 9.2% 8.9%

  23. Slide 23: HEI Historical Total Assets and Common Equity %

    HEI Historical Total Assets and Common Equity % Total Assets Common Equity % 1 (in billions) $14.0 53.0% 52.8% $12.0 52.5% $10.0 52.0% 51.9% $8.0 51.5% 51.4% 51.4% $6.0 51.0% 50.8% $4.0 50.5% $2.0 50.0% $9.6 $10.2 $10.3 $11.2 $11.8 $0.0 49.5% 2011 2012 2013 2014 2015 6 1 Common equity as a percent o

  24. Slide 24: Oil is the Primary Driver of Volatile Rates in Hawaii

    Oil is the Primary Driver of Volatile Rates in Hawaii Breakdown of Hawaiian Electric Rates 1 Typical 40 Residential Bill Dec 2012 $163.64 35 Typical 31.8 Residential 30.9 31.5 Bill Oct 2016 29.1 30 $130.77 Typical Residential Bill 24.3 12.1 24.1 25 Dec 2009 13.5 12.4 $122.42 22.6 12.6 ¢/kWh 18.7 6.8

  25. Slide 25: Reducing Customer Bills By Addressing Every Part of the Bill

    Reducing Customer Bills By Addressing Every Part of the Bill 30.0 1 Increase plant efficiency 24.3 Increase “ramp” and “turndown rates” 25.0 Provide less back-up Demand response programs Substitute lower cost fuel and renewables (e.g., LNG) Fuel, 6.8 (28%) Deactivate older generating units 20.0 Purs

  26. Slide 26: Renewable Energy Can Be Cost Competitive in Hawaii

    Renewable Energy Can Be Cost Competitive in Hawaii Depending on Oil Price Volatility 0.40 Energy costs subject to volatile oil Renewables: long-term fixed price prices contracts with predetermined escalators 0.35 Solar 0.30 Biomass Energy Cost ($/kWh) 0.25 Wind Dec 2014 0.20 0.15 Dec 2010 Sep 2016 E

  27. Slide 27: Committed to Achieve Hawaii's 100% Renewable Energy Goal by 2045

    Committed to Achieve Hawaii’s 100% Renewable Energy Goal by 2045  National leader in clean energy  Hawaiian Electric achieved 23%1 integration, particularly in renewables in 2015 -- exceeded rooftop PV 2015 RPS target of 15%  At times, renewable energy has powered up to ~50% of  Working to achie

  28. Slide 28: Clean Energy & Reliability Projects Drive Capital Investments

    Clean Energy & Reliability Projects Drive Capital Investments Year End Rate Base Forecast ($ in millions) = Top of Range $3,250 = Bottom of Range $3,070 $3,000 $2,900 $2,950 $2,750 $2,830 $2,750 $2,750 $2,500 2015 2016 2017 2018 Rate Base Growth 0% 3-5% 5-7% 2 Capex (net of CIAC) $319 $340 $470 $500

  29. Slide 29: Plant Additions – Baseline by Co. & Consolidated Major Projects

    Plant Additions – Baseline by Co. & Consolidated Major Projects Major Projects = PUC approved projects > $2.5M 5-year (2011-2015) historical average baseline projects: (in millions) HE: $218 $500 HL: $48 ME: $42 $450 Total $308 $390 $400 $371 $350 $21 $350 $33 $26 $55 $299 $50 $300 $48 $2 $59 $28 $2

  30. Slide 30: Rate Case Schedule

    Rate Case Schedule As required by decoupling mechanism Hawaiian Electric 2014 Abbreviated Rate Case filed 6/27/14 Maui Electric 2015 Abbreviated Rate Case Filed 12/30/14 Hawaii Electric Light 2016 Test Year Rate Case Filed 9/19/16 Hawaiian Electric 2017 Test Year Rate Case to be filed1 Maui Electric

  31. Slide 31: Utility Regulatory Model Highlights

    Utility Regulatory Model Highlights Mechanisms Details of Mechanisms Sales decoupling via Predictable revenue stream a revenue balancing • Net revenues fixed at the level approved in the last rate case account • Revenues are no longer linked to KWH sales/electricity usage Rate adjustment Annual esca

  32. Slide 32: Utility ROE

    Utility ROE 1 Consolidated Utility ROE Twelve Months Ended September 30 10% 5% GAAP GAAP 7.9% 8.1% 0% 2015 2016 Consolidated Hawaiian Hawaii Maui Utility Electric Electric Light Electric 2015 7.9% 7.9% 6.3% 9.2%* 2016 8.1% 7.9% 8.5% 8.4% 2 Allowed 9.8% 10.0% 10.0% 9.0% 1 Calculated using net income

  33. Slide 33: 2015 Consolidated Utility ROE Lag

    2015 Consolidated Utility ROE Lag 0.5 0.2 0.4 0.4 9.8 0.3 9.1 8.0 1 2 3 4 5 Allowed ROE Non-recoverable PUC D&O ROE less Plant Adds PUC May 2015 No return on Actual items (ie. lowered interest and Over Decoupling Order pension assets 2015 ROE 1 2 incentive rate on RAM Cap treatment of above the comp

  34. Slide 34: HEI ROE

    HEI ROE 1 Consolidated ROE Twelve Months Ended September 30 15.0% 12.3% (GAAP) 9.1% (Core) 9.5% (Core) 8.1% (GAAP) 0.0% 2015 2016 Core Earnings Adjustment 2015 2016 GAAP GAAP Utility 7.9% 8.1% Bank 9.5% 9.8% See the reconciliation of GAAP to Non-GAAP (Core) measures preceding this presentation 1 Cal

  35. Slide 35: Power Supply Improvement Plans (PSIP)

    Power Supply Improvement Plans (PSIP) Docket No. 2014-0183 (update submitted April 1, 2016)  Vision of how our islands could achieve 100% renewable energy by 2045  April 1, 2016 PSIP highlights:  Achieves 100% renewable energy for Oahu by 2045, Molokai and Lanai by 2030 and Hawaii Island and Maui

  36. Slide 36: Regulatory Response Framework: Response to D&Os

    Regulatory Response Framework: Response to D&Os Regulatory Response Framework Demand Response (DR) Distributed Generation (DG) 2.0 Resource Portfolio Integrated Demand Response Integrated Interconnection Distributed Generation Power Supply Improvement Portfolio Plan (IDRPP) Queue Interconnection Pla

  37. Slide 37: Bank YTD Performance On Track to Meet 2016 Targets

    Bank YTD Performance On Track to Meet 2016 Targets Return on Assets (%) Loan Growth (%) 11.2 1.20 1.05 8.0 0.97 mid- ~0.90 0.89 single digit 3.4 -1.7 Target ASB ASB Peers YTD Target ASB ASB Peers YTD 3Q16 YTD 3Q16 YTD Net Interest Margin (%) Net Charge-offs (%) ~0.15 to 0.20 0.19 3.57 3.59 0.20 ~3.5

  38. Slide 38: Quality Balance Sheet

    Quality Balance Sheet  Overall loan-to-deposit ratio of 89%  100% of ASB loans funded with low-cost core deposits Peer Banks1 ASB 9/30/16 (%) 9/30/16 (%) Core Deposits Loans Core 59 74 Deposits Loans 75 72 Certificates of Deposit 17 Investment Investment Certificates of Securities Securities Depos

  39. Slide 39: Credit Quality

    Credit quality Quarter Revised Annual Target* (in millions) 0.60% $21.0 0.50% $16 to $19 0.40% $16.0 $12 0.30% $11.0 $7 to $9 0.20% 0.21% 0.15% 0.20% $6 $6.0 0.10% $5.7 0.10% $4.8 $4.8 $3.0 $2.5 $2.3 $1.0 0.00% $1.1 $0.8 $1.7 ($0.9) NCO ~0.15% -0.08% to 0.20% -0.10% ($4.0) 3Q15 4Q15 1Q16 2Q16 3Q16 2

  40. Slide 40: Low Risk Loan Mix

    Low Risk Loan Mix  Maintaining targeted loan mix to improve interest rate risk  Overall asset quality remains strong (Nonperforming assets to total loans and real estate owned of 1.12%) September 30, 2016 Commercial Construction $141 Commercial 3% Residential 1-4 real estate $2,055 $774 44% 16% HE

  41. Slide 41: Nonperforming Assets Ratio

    Nonperforming Assets Ratio Percentages Dollars in millions 1.75% $60.0 $53.2 1.50% $48.8 $50.0 $47.7 $47.1 $45.6 1.25% 1.12% $40.0 1.02% 1.03% 1.02% 1.00% 1.00% $30.0 0.75% $20.0 0.50% $10.0 0.25% 0.00% $0.0 3Q15 4Q15 1Q16 2Q16 3Q16 3Q15 4Q15 1Q16 2Q16 3Q16 1 2 ASB Loans Peers High Performing Peers

  42. Slide 42: Pretax Noninterest Income

    Pretax Noninterest Income (in millions) $20.0 $18.5 $18.5 $16.8 $16.6 $15.4 $5.7 $5.6 $5.7 $5.7 $5.5 $10.0 $5.9 $5.6 $5.7 $5.3 $5.2 $2.2 $2.1 $2.0 $2.2 $1.4 $2.3 $2.2 $1.0 $1.5 $3.4 $1.2 $0.6 $2.8 $2.4 $1.3 $1.3 $0.0 3Q15 4Q15 1Q16 2Q16 3Q16 Other Income Gains on sale of securities Mortgage banking

  43. Slide 43: In Summary

    In Summary  HEI remains a strong company that is well- positioned to achieve its goals of providing long- term value for our customers, community, employees and shareholders  Hawaiian Electric Company  Industry leader for integrating renewables and distributed generation  Focused on expanding cu

  44. Slide 44: 2016 Core EPS Guidance

    2016 Core EPS Guidance1 (as of November 4, 2016) HEI Core EPS: $1.72 – $1.78 per share  No new equity issuances other than DRIP estimated at ~$35 million Utility Core EPS: $1.28 – $1.36 Bank: $0.50 – $0.54 Key Assumptions: Key Assumptions:  Decoupling model: March 2015 D&O  Net interest income: m

  45. Slide 45: Appendix

    Appendix 28

  46. Slide 46: Consolidated 3Q Earnings – Net Income

    Consolidated 3Q Earnings – Net Income (in millions) GAAP Net Income HC Non-Core Adjustments Core Net Income $127.1 (merger/spin-related) $47.0 $15.1 $63.3 $50.7 $52.4 $47.0 $43.0 $65.1 $43.0 $63.8 $13.5 $13.5 $15.1 ($5.8) ($4.1) $1.2 * ($1.7) 3Q15 3Q16 3Q15 3Q16 3Q15 3Q16 Utility Bank Holding Co (HC

  47. Slide 47: Consolidated 3Q Earnings - EPS

    Consolidated 3Q Earnings - EPS GAAP EPS (Diluted) HC Non-Core Adjustments Core EPS (Diluted) Per Share (Diluted) $1.17 (merger/spin-related) $0.43 $0.14 $0.58 $0.47 $0.49 $0.43 $0.40 $0.60 $0.59 $0.40 $0.12 $0.12 $0.14 $0.01* ($0.05) ($0.02) ($0.04) 3Q15 3Q16 3Q15 3Q16 3Q15 3Q16 Utility Bank Holding

  48. Slide 48: Debt Maturities & Credit Ratings

    Debt Maturities* & Credit Ratings (in millions) $1,400 $1,200 $1,000 $800 $600 $1,141 $400 $200 $50 $125 $75 $96 $50 $50 $0 2017 2018 2019 2020 2021 Thereafter HEI HECO to 2045 Credit Ratings HEI HECO ASB 1 S&P BBB-/Stable/A-3 BBB-/Stable/A-3 BBB/Stable/A-2 2 Moody’s Not rated/Stable/P-3 Baa2/Stable

  49. Slide 49: 3Q16 Utility & Bank Financial Highlights

    3Q16 Utility & Bank Financial Highlights (in millions) Utility Net Income Key utility core earnings 3Q16 $90 drivers fav/(unfav) vs ($ in millions after-tax) 3Q15 Net revenues*: Recovery of investments & costs 2 Fuel efficiency (2) $45 Net revenues -- O&M, excluding net income $43 $47 neutral items

  50. Slide 50: Net Interest Margin

    Net Interest Margin 4.50 Asset Yield % 4.25 4.00 3.84 3.80 Net Interest Margin (NIM) % 3.76 3.81 3.74 4.00 3.75 3.50 3.25 3.00 3.50 3Q15 4Q15 1Q16 2Q16 3Q16 0.60 Liability Cost % 3.62 3.58 3.57 3.53 3.55 0.40 3.00 0.23 0.23 0.24 0.22 0.22 3Q15 4Q15 1Q16 2Q16 3Q16 0.20 0.00 3Q15 4Q15 1Q16 2Q16 3Q16 1

  51. Slide 51: ASB Peer Group – 2016

    ASB Peer Group – 2016 * 1st Source Corporation SRCE Heritage Financial Corporation HFWA Ameris Bancorp ABCB HomeStreet, Inc. HMST BancFirst Corporation BANF Independent Bank Corp. INDB * BBCN Bancorp, Inc. BBCN Independent Bank Group, Inc. IBTX Berkshire Hills Bancorp, Inc. BHLB Lakeland Bancorp, In

  52. Slide 52: Components of Decoupling

    Components of Decoupling (Hawaii PUC Docket number: 2008-0274) (Hawaii PUC Docket number for the Decoupling Review: 2013-0141) Components 1. Sales Delinks utility revenues from electricity usage decoupling  GAAP revenue = revenue approved in the last rate case (interim or final) via a Revenue  Rec

  53. Slide 53: Components of Decoupling

    Components of Decoupling (Hawaii PUC Docket number: 2008-0274) (Hawaii PUC Docket number for the Decoupling Review: 2013-0141) Components 2. RAM Revenue Lesser of: Adjustment  2a - RAM Revenue Adjustment based on the RAM provisions in place prior to Allowed Order No. 32735* –or- (Order No. 32735) 

  54. Slide 54: Components of Decoupling

    Components of Decoupling (Hawaii PUC Docket number: 2008-0274) (Hawaii PUC Docket number for the Decoupling Review: 2013-0141) Components 2a. RAM Revenue RAM for Rate Base – Component 2 Adjustment  Change in rate base compared to test year levels in last rate case, for Determined certain items incl

  55. Slide 55: Components of Decoupling

    Components of Decoupling (Hawaii PUC Docket number: 2008-0274) (Hawaii PUC Docket number for the Decoupling Review: 2013-0141) Components 2b. RAM Revenue Cumulative RAM for 2016 RAM Revenue Adjustment – Adjustment  Prior year RAM Cap Target Revenues times GDPPI (1.5% for 2016) + prior year Cap RAM

  56. Slide 56: Hawai'i Electric Light Rate Case: 2016 Test Year

    Hawai‘i Electric Light Rate Case: 2016 Test Year (Hawaii PUC Docket number: 2015-0170) Application (9/19/16) $19.3M Amount requested (6.5% increase over revenues at current effective rates) 1 Deprec. & amort. Expenses $37.8M 10.60% Return on average common with mechanisms equity Common equity capita

  57. Slide 57: Hawai'i Electric Light Rate Case: 2010 Test Year

    Hawai‘i Electric Light Rate Case: 2010 Test Year (Hawaii PUC Docket number: 2009-0164) Application Interim D&O Adj Interim D&O3 Final D&O4 (12/9/09) (1/14/11) (1/1/12) (4/9/12) $20.9M1 $6.0M2 $5.2M2 $4.5M2) Amount requested (6% increase) (1.7% increase) (1.5% increase) (1.3% increase) Deprec. & amor

  58. Slide 58: Hawaiian Electric Rate Case: 2011 Test Year

    Hawaiian Electric Rate Case: 2011 Test Year (Hawaii PUC Docket number: 2010-0080) Interim Adjusted Application D&O Interim D&O Final D&O (7/30/10) (7/26/11) (5/21/12) (9/1/12) Base Request $74M $53.2M2 $58.8M2,3 $58.1M4 (4.3% increase) (3.1% increase) (3.4% increase) (3.4% increase) $40M New Program

  59. Slide 59: Maui Electric Rate Case: 2012 Test Year

    Maui Electric Rate Case: 2012 Test Year (Hawaii PUC Docket number: 2011-0092) Application Interim D&O Final D&O (7/22/11) (6/1/12) ( 8/1/13) Base Request $27.5M1 $13.1M3 $5.3M4 (6.7% increase) (3.2% increase) (1.3% increase) $19.8M $19.7M $19.7M Depr. & amort. expenses Without Mechanism With Mechani

  60. Slide 60: Utility Developments

    Utility Developments Hawaii Electric Light  Hawaii Electric Light 2016 test year rate case 2016 Rate Case application filed on Sept 19, 2016 (Docket No. 2015-0170)  Requested $19.3 million (6.5% increase) Hawaiian Electric  Interim decision estimated in Q3 2017 Company  Hawaiian Electric Company

  61. Slide 61: Hawaii's Oil Situation

    Hawaii’s Oil Situation Low Sulfur Fuel Oil vs. Crude Oil Price per BBL December 2010 to September 2016 $145 $125 HAWAII OIL PRICES $105 HAWAII OIL PRICES HAWAII OIL PRICES $85 $65 $45 CRUDE OIL PRICES $25 Hawaii oil prices based on Hawaiian Electric low sulfur fuel oil inventory prices Crude oil pri

  62. Slide 62: Hawaii Economic Trends

    Hawaii Economic Trends Year-over-year Sep YTD Sep percent change 2016 2016 Tourism Arrivals +3.0% +2.6% Expenditures +10.4% +3.7% Unemployment  Oct 2016 – Hawaii: 3.2%; U.S.: 4.9%  YTD Oct 2016 Oahu single family home sales Real Estate up 4.9%  Oahu median single family home price for Oct 2016 up

  63. Slide 63: Outlook for Continued Improvement in Hawaii's Economy

    Outlook for Continued Improvement in Hawaii’s Economy Year-over-year percent change unless noted 2015 2016 2017 Real state GDP 3.3 2.0 2.4 Real personal income 3.6 2.2 1.7 Unemployment (%) 3.6 3.1 3.0 Non-farm payroll jobs 1.7 1.4 0.8 Visitor arrivals 4.5 2.3 1.5 Source: University of Hawaii Economi

  64. Slide 64: YTD Hawaii Visitor Arrivals up 2.6% and Visitor Expenditures up 3.7%

    YTD Hawaii Visitor Arrivals up 2.6% and Visitor Expenditures up 3.7% 1400 30.00% Visitor arrivals (in thousands) Year vs. Year % Change Year vs. Year % Change 1200 15.00% 1000 0.00% Monthly Visitor Arrivals 800 -15.00% 600 -30.00% 400 -45.00% Sep-13 Sep-14 Sep-15 Sep-16 Yr-Yr% Change Visitor Arrival

  65. Slide 65: Hawaii Unemployment Rate Remains Low at 3.2%

    Hawaii Unemployment Rate Remains Low at 3.2% 12 Seasonally adjusted 8 US: 4.9% 4 Hawaii: 3.2% 0 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Hawaii U.S. 12 Not seasonally Not adjusted seasonally adjusted 8 Hawaii County: 3.7% Kauai County: 3.3% 4 Maui County: 3.3% Hon

  66. Slide 66: Hawaii Real Estate

    Hawaii Real Estate Oahu Number of Sales and Median Sales Price Oct 2009 – Oct 2016 $800,000 400 $600,000 300 Number of sales Median price $400,000 200 $200,000 100 $0 0 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Number of Sales Median Sales Price Median Sales Price Oahu, Maui, Hawaii, K

  67. Slide 67: Public Utilities Commission of the State of Hawaii

    Public Utilities Commission of the State of Hawaii The Governor, with the consent of the Senate, appoints three full-time commissioners to staggered six-year terms. Commissioners can serve no more than 12 consecutive years. Randall Y. Iwase, Chair (Appointed by Governor David Y. Ige)  Appointed Cha

  68. Slide 68: Corporate Headquarters and Investor Inquiries

    HAWAIIAN ELECTRIC INDUSTRIES, INC. Institutional Investor Corporate Headquarters and Securities Analyst Inquiries Hawaiian Electric Industries, Inc. Please direct inquiries to: 1001 Bishop , Suite 2900 Clifford Chen Manager of Investor Relations & Strategic Planning Telephone: 808-543-7384 E-mail: c

Hawaiian Electric Industries — Wells Fargo Utility Symposium 2016 on 6ix