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Hawaiian Electric (HAWEL)

Filed: 9 Aug 21, 4:02pm
0000354707he:HawaiianElectricCompanyAndSubsidiariesMemberus-gaap:PensionPlansDefinedBenefitMember2021-04-012021-06-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
 FORM 10-Q
 
     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
 OR
             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Exact Name of Registrant as Specified in Its Charter Commission File Number I.R.S. Employer Identification No.
HAWAIIAN ELECTRIC INDUSTRIES, INC. 1-8503 99-0208097
and Principal Subsidiary
HAWAIIAN ELECTRIC COMPANY, INC. 1-4955 99-0040500
State of Hawaii
(State or other jurisdiction of incorporation or organization)
 
Hawaiian Electric Industries, Inc. – 1001 Bishop Street, Suite 2900, Honolulu, Hawaii  96813
Hawaiian Electric Company, Inc. – 1001 Bishop Street, Suite, 2500, Honolulu, Hawaii  96813
(Address of principal executive offices and zip code)
 
Hawaiian Electric Industries, Inc. – (808) 543-5662
Hawaiian Electric Company, Inc. – (808) 543-7771
(Registrant’s telephone number, including area code) 
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
RegistrantTitle of each classTrading Symbol(s)Name of each exchange on which registered
Hawaiian Electric Industries, Inc.Common Stock, Without Par ValueHENew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Hawaiian Electric Industries, Inc.YesNo Hawaiian Electric Company, Inc.YesNo
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Hawaiian Electric Industries, Inc.YesNo Hawaiian Electric Company, Inc.YesNo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.
Hawaiian Electric Industries, Inc.: Hawaiian Electric Company, Inc.:
Large accelerated filerSmaller reporting companyLarge accelerated filerSmaller reporting company
Accelerated filerEmerging growth companyAccelerated filerEmerging growth company
Non-accelerated filerNon-accelerated filer
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Hawaiian Electric Industries, Inc.Hawaiian Electric Company, Inc.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Hawaiian Electric Industries, Inc.YesNoHawaiian Electric Company, Inc.YesNo
Securities registered pursuant to 12(b) of the Act:
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuers’ classes of common stock, as of the latest practicable date.
Class of Common Stock Outstanding July 23, 2021
Hawaiian Electric Industries, Inc. (Without Par Value) 109,311,034 Shares
Hawaiian Electric Company, Inc. ($6-2/3 Par Value) 17,324,376 Shares (not publicly traded)
Hawaiian Electric Industries, Inc. (HEI) is the sole holder of Hawaiian Electric Company, Inc. (Hawaiian Electric) common stock.
This combined Form 10-Q is separately filed by HEI and Hawaiian Electric. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. No registrant makes any representation as to information relating to the other registrant, except that information relating to Hawaiian Electric is also attributed to HEI.



Hawaiian Electric Industries, Inc. and Subsidiaries
Hawaiian Electric Company, Inc. and Subsidiaries
Form 10-Q—Quarter ended June 30, 2021
 
TABLE OF CONTENTS
 
Page No. 
  
 
  
 
three and six months ended June 30, 2021 and 2020
 
three and six months ended June 30, 2021 and 2020
 
 
three and six months ended June 30, 2021 and 2020
 
six months ended June 30, 2021 and 2020
  
 
three and six months ended June 30, 2021 and 2020
 
three and six months ended June 30, 2021 and 2020
 
 
three and six months ended June 30, 2021 and 2020
 
six months ended June 30, 2021 and 2020
 
 
 
 
  
 
 
i


Hawaiian Electric Industries, Inc. and Subsidiaries
Hawaiian Electric Company, Inc. and Subsidiaries
Form 10-Q—Quarter ended June 30, 2021
GLOSSARY OF TERMS
Terms Definitions
ACLAllowance for credit losses, which is the current credit loss standard, requires recording the allowance based on the expected loss model
AES HawaiiAES Hawaii, Inc.
AOCI Accumulated other comprehensive income/(loss)
ARAAnnual revenue adjustment
ASB American Savings Bank, F.S.B., a wholly owned subsidiary of ASB Hawaii, Inc.
ASB Hawaii ASB Hawaii, Inc., a wholly owned subsidiary of Hawaiian Electric Industries, Inc. and the parent company of American Savings Bank, F.S.B.
ASU Accounting Standards Update
CARES ActThe Coronavirus Aid, Relief, and Economic Security Act enacted March 27, 2020
CBRECommunity-based renewable energy
Company Hawaiian Electric Industries, Inc. and its direct and indirect subsidiaries, including, without limitation, Hawaiian Electric Company, Inc. and its subsidiaries (listed under Hawaiian Electric); ASB Hawaii, Inc. and its subsidiary, American Savings Bank, F.S.B.; Pacific Current, LLC and its subsidiaries (listed under Pacific Current); and The Old Oahu Tug Service, Inc. (formerly Hawaiian Tug & Barge Corp.)
Consumer Advocate Division of Consumer Advocacy, Department of Commerce and Consumer Affairs of the State of Hawaii
D&O Decision and order from the PUC
Dodd-Frank Act Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
DOH Department of Health of the State of Hawaii
DRIP HEI Dividend Reinvestment and Stock Purchase Plan
ECRCEnergy cost recovery clause
EIP 2010 Equity and Incentive Plan, as amended and restated
EPA Environmental Protection Agency — federal
EPRMExceptional Project Recovery Mechanism
ERP/EAMEnterprise Resource Planning/Enterprise Asset Management
EPS Earnings per share
ESGEnvironmental, Social & Governance
ESMEarnings Sharing Mechanism
EVE Economic value of equity
Exchange Act Securities Exchange Act of 1934
FASB Financial Accounting Standards Board
FDIC Federal Deposit Insurance Corporation
federal U.S. Government
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FitchFitch Ratings, Inc.
FNMA Federal National Mortgage Association
FRB Federal Reserve Board
GAAP Accounting principles generally accepted in the United States of America
GNMA Government National Mortgage Association
Hamakua EnergyHamakua Energy, LLC, an indirect subsidiary of HEI
Hawaii Electric Light Hawaii Electric Light Company, Inc., an electric utility subsidiary of Hawaiian Electric Company, Inc.

ii

GLOSSARY OF TERMS, continued
Terms Definitions
Hawaiian Electric Hawaiian Electric Company, Inc., an electric utility subsidiary of Hawaiian Electric Industries, Inc. and parent company of Hawaii Electric Light Company, Inc., Maui Electric Company, Limited and Renewable Hawaii, Inc. Uluwehiokama Biofuels Corp. was dissolved effective as of July 14, 2020
HEI Hawaiian Electric Industries, Inc., direct parent company of Hawaiian Electric Company, Inc., ASB Hawaii, Inc., Pacific Current, LLC and The Old Oahu Tug Service, Inc. (formerly Hawaiian Tug & Barge Corp.)
HEIRSP Hawaiian Electric Industries Retirement Savings Plan
HELOCHome equity line of credit
HPOWER City and County of Honolulu with respect to a power purchase agreement for a refuse-fired plant
IPP Independent power producer
Kalaeloa Kalaeloa Partners, L.P.
kWh Kilowatthour/s (as applicable)
LTIP Long-term incentive plan
Maui Electric Maui Electric Company, Limited, an electric utility subsidiary of Hawaiian Electric Company, Inc.
MauoMauo, LLC, an indirect subsidiary of HEI
Moody’sMoody’s Investors Service’s
MPIRMajor Project Interim Recovery
MW Megawatt/s (as applicable)
MRPMulti-year rate period
NII Net interest income
NPBCNet periodic benefit costs
NPPCNet periodic pension costs
O&M Other operation and maintenance
OCC Office of the Comptroller of the Currency
OPEB Postretirement benefits other than pensions
Pacific CurrentPacific Current, LLC, a wholly owned subsidiary of HEI and parent company of Hamakua Holdings, LLC, Mauo, LLC, Alenuihaha Developments, LLC and Ka‘ie‘ie Waho Company, LLC
PBRPerformance-based regulation
PGVPuna Geothermal Venture
PIMsPerformance incentive mechanisms
PPA Power purchase agreement
PPAC Purchased power adjustment clause
PUC Public Utilities Commission of the State of Hawaii
PVPhotovoltaic
RAM Rate adjustment mechanism
RBA Revenue balancing account
REIPRenewable Energy Infrastructure Program
RFP Request for proposals
ROACE Return on average common equity
RORB Return on rate base
RPS Renewable portfolio standards
S&PStandard & Poor’s
SEC Securities and Exchange Commission
See Means the referenced material is incorporated by reference
Tax Act2017 Tax Cuts and Jobs Act (H.R. 1, An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018)
TDR Troubled debt restructuring
UtilitiesHawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited
VIEs Variable interest entities
 
iii


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report and other presentations made by Hawaiian Electric Industries, Inc. (HEI) and Hawaiian Electric Company, Inc. (Hawaiian Electric) and their subsidiaries 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 (collectively, the Company), 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 and actual results and financial condition may differ materially from those indicated in the forward-looking statements.
Risks, uncertainties and other important factors that could cause actual results to differ materially from those described in forward-looking statements and from historical results include, but are not limited to, the following:
international, national and local economic and political conditions—including the state of the Hawaii tourism, defense and construction industries; the strength or weakness of the Hawaii and continental U.S. real estate markets (including the fair value and/or the actual performance of collateral underlying loans held by ASB, which could result in higher loan loss provisions and write-offs); decisions concerning the extent of the presence of the federal government and military in Hawaii; the implications and potential impacts of future Federal government shutdowns, including the impact to our customers to pay their electric bills and/or bank loans and the impact on the state of Hawaii economy; the implications and potential impacts of U.S. and foreign capital and credit market conditions and federal, state and international responses to those conditions; the potential impacts of global and local developments (including global economic conditions and uncertainties, unrest, terrorist acts, wars, conflicts, political protests, deadly virus epidemic or other crisis); the effects of changes that have or may occur in U.S. policy, such as with respect to immigration and trade; and pandemics;
the extent of the impact of the COVID-19 pandemic, including the duration, spread, severity and any recurrence of the COVID-19 pandemic due to new variants or insufficient vaccinations, the duration and scope of related government orders and restrictions, the impact on our employees, customers and suppliers, and the impact of the COVID-19 pandemic on the overall demand for the Company’s goods and services, all of which could be affected by the pace of distribution, administration, and efficacy of COVID-19 vaccines over the short- and long-term, as well as the proportion of the population vaccinated;
ability to adequately address risks and capitalize on opportunities related to our environmental, social and governance (ESG) priority areas, which currently include decarbonization, economic health and affordability, reliability and resilience, secure digitalization, diversity, equity and inclusion, employee engagement, and climate-related risks and opportunities;
citizen activism, including civil unrest, especially in times of severe economic depression and social divisiveness, which could negatively impact customers and employees, impair the ability of the Company and the Utilities to operate and maintain its facilities in an effective and safe manner, and citizen activism and stakeholder activism could delay the construction, increase project costs or preclude the completion, of third-party or Utility projects that are required to meet electricity demand, reliability objectives and renewable portfolio standards (RPS) goals;
the effects of future actions or inaction of the U.S. government or related agencies, including those related to the U.S. debt ceiling or budget funding, monetary policy, trade policy and tariffs, energy and environmental policy, and other policy and regulatory changes advanced or proposed by President Biden and his administration;
weather, natural disasters (e.g., hurricanes, earthquakes, tsunamis, lightning strikes, lava flows and the increasing effects of climate change, such as more severe storms, flooding, droughts, heat waves, and rising sea levels) and wildfires, including their impact on the resilience and reliability of the Company’s and Utilities’ operations and the economy;
the timing, speed and extent of changes in interest rates and the shape of the yield curve, which could result in lower portfolio yields and net interest margin;
the ability of the Company and the Utilities to access the credit and capital markets (e.g., to obtain commercial paper and other short-term and long-term debt financing, including lines of credit, and, in the case of HEI, to issue common stock) under volatile and challenging market conditions, and the cost of such financings, if available;
the risks inherent in changes in the value of the Company’s pension and other retirement plan assets and ASB’s securities available for sale, and the risks inherent in changes in the value of the Company’s pension liabilities, including changes driven by interest rates;
changes in laws, regulations (including tax regulations), market conditions, interest rates and other factors that result in changes in assumptions used to calculate retirement benefits costs and funding requirements;
the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) and of the rules and regulations that the Dodd-Frank Act requires to be promulgated, as amended by the Economic Growth, Regulatory Relief and Consumer Protection Act;
increasing competition in the banking industry (e.g., increased price competition for deposits, or an outflow of deposits to alternative investments, which may have an adverse impact on ASB’s cost of funds);
iv


the potential delay by the Public Utilities Commission of the State of Hawaii (PUC) in considering (and potential disapproval of actual or proposed) renewable energy proposals and related costs; reliance by the Utilities on outside parties such as the state, independent power producers (IPPs) and developers; and uncertainties surrounding technologies, solar power, wind power, biofuels, environmental assessments required to meet RPS goals; the impacts of implementation of the renewable energy proposals on future costs of electricity and potential penalties imposed by the PUC for delays in the commercial operations of renewable energy projects;
the ability of the Utilities to develop, implement and recover the costs of implementing the Utilities’ action plans included in their updated Power Supply Improvement Plans, Demand Response Portfolio Plan, Distributed Generation Interconnection Plan, Grid Modernization Plans, and business model changes, which have been and are continuing to be developed and updated in response to the orders issued by the PUC, the PUC’s April 2014 statement of its inclinations on the future of Hawaii’s electric utilities and the vision, business strategies and regulatory policy changes required to align the Utilities’ business model with customer interests and the state’s public policy goals, and subsequent orders of the PUC;
the ability of the Utilities to recover undepreciated cost of fossil fuel generating units, if they are retired before the end of their expected useful life;
capacity and supply constraints or difficulties, especially if generating units (utility-owned or IPP-owned) fail or measures such as demand-side management, distributed generation, combined heat and power or other firm capacity supply-side resources fall short of achieving their forecasted benefits or are otherwise insufficient to reduce or meet peak demand;
fuel oil price changes, delivery of adequate fuel by suppliers and the continued availability to the electric utilities of their energy cost recovery clauses (ECRCs);
the continued availability to the electric utilities or modifications of other cost recovery mechanisms, including the purchased power adjustment clauses (PPACs), rate adjustment mechanisms (RAMs) and pension and postretirement benefits other than pensions (OPEB) tracking mechanisms, and the continued decoupling of revenues from sales to mitigate the effects of declining kilowatthour sales;
the ability of the Utilities to recover increasing costs and earn a reasonable return on capital investments not covered by the annual revenue adjustment (ARA);
the ability of the Utilities to achieve performance incentive goals currently in place;
the impact from the PUC’s implementation of performance-based ratemaking for the Utilities pursuant to Act 005, Session Laws 2018, including the potential addition of new performance incentive mechanisms (PIMs), third-party proposals adopted by the PUC in its implementation of performance-based regulation (PBR), and the implications of not achieving performance incentive goals;
the impact of fuel price levels and volatility on customer satisfaction and political and regulatory support for the Utilities;
the risks associated with increasing reliance on renewable energy, including the availability and cost of non-fossil fuel supplies for renewable energy generation and the operational impacts of adding intermittent sources of renewable energy to the electric grid;
the growing risk that energy production from renewable generating resources may be curtailed and the interconnection of additional resources will be constrained as more generating resources are added to the Utilities’ electric systems and as customers reduce their energy usage;
the ability of IPPs to deliver the firm capacity anticipated in their power purchase agreements (PPAs);
the potential that, as IPP contracts near the end of their terms, there may be less economic incentive for the IPPs to make investments in their units to ensure the availability of their units;
the ability of the Utilities to negotiate, periodically, favorable agreements for significant resources such as fuel supply contracts and collective bargaining agreements and avoid or mitigate labor disputes and work stoppages;
new technological developments that could affect the operations and prospects of the Utilities and ASB or their competitors such as the commercial development of energy storage and microgrids and banking through alternative channels, including use of digital currencies, which could include a central bank digital currency;
cybersecurity risks and the potential for cyber incidents, including potential incidents at HEI, its third-party vendors, and its subsidiaries (including at ASB branches and electric utility plants) and incidents at data processing centers used, to the extent not prevented by intrusion detection and prevention systems, anti-virus software, firewalls and other general IT controls;
failure to achieve remaining cost savings commitment related to the Enterprise Resource Planning/Enterprise Asset Management (ERP/EAM) project-related benefits and the management audit committed savings of $33 million over the 2021 to 2025 multi-year rate period (MRP);
federal, state, county and international governmental and regulatory actions, such as existing, new and changes in laws, rules and regulations applicable to HEI, the Utilities and ASB (including changes in taxation and tax rates, increases in capital requirements, regulatory policy changes, environmental laws and regulations (including resulting compliance costs and risks of fines and penalties and/or liabilities), the regulation of greenhouse gas emissions, governmental fees and assessments (such as Federal Deposit Insurance Corporation assessments), and potential carbon “cap and trade” legislation that may fundamentally alter costs to produce electricity and accelerate the move to renewable generation);
v


developments in laws, regulations and policies governing protections for historic, archaeological and cultural sites, and plant and animal species and habitats, as well as developments in the implementation and enforcement of such laws, regulations and policies;
discovery of conditions that may be attributable to historical chemical releases, including any necessary investigation and remediation, and any associated enforcement, litigation or regulatory oversight;
decisions by the PUC in rate cases and other proceedings (including the risks of delays in the timing of decisions, adverse changes in final decisions from interim decisions and the disallowance of project costs as a result of adverse regulatory audit reports or otherwise);
decisions by the PUC and by other agencies and courts on land use, environmental and other permitting issues (such as required corrective actions, restrictions and penalties that may arise, such as with respect to environmental conditions or RPS);
potential enforcement actions by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (FRB), the Federal Deposit Insurance Corporation (FDIC) and/or other governmental authorities (such as consent orders, required corrective actions, restrictions and penalties that may arise, for example, with respect to compliance deficiencies under existing or new banking and consumer protection laws and regulations or with respect to capital adequacy);
the risks associated with the geographic concentration of HEI’s businesses and ASB’s loans, ASB’s concentration in a single product type (i.e., first mortgages) and ASB’s significant credit relationships (i.e., concentrations of large loans and/or credit lines with certain customers);
changes in accounting principles applicable to HEI and its subsidiaries, including the adoption of new U.S. accounting standards, the potential discontinuance of regulatory accounting related to PBR or other regulatory changes, the effects of potentially required consolidation of variable interest entities (VIEs), or required finance lease or on-balance-sheet operating lease accounting for PPAs with IPPs;
downgrades by securities rating agencies in their ratings of the securities of HEI and Hawaiian Electric and their impact on results of financing efforts;
faster than expected loan prepayments that can cause an acceleration of the amortization of premiums on loans and investments and the impairment of mortgage-servicing assets of ASB;
changes in ASB’s loan portfolio credit profile and asset quality and/or mix, which may increase or decrease the required level of provision for credit losses, allowance for credit losses (ACL) and charge-offs;
changes in ASB’s deposit cost or mix which may have an adverse impact on ASB’s cost of funds;
unanticipated changes from the expected discontinuance of LIBOR and the transition to an alternative reference rate, which may include adverse impacts to the Company’s cost of capital, loan portfolio and interest income on loans;
the final outcome of tax positions taken by HEI and its subsidiaries;
the risks of suffering losses and incurring liabilities that are uninsured (e.g., damages to the Utilities’ transmission and distribution system and losses from business interruption) or underinsured (e.g., losses not covered as a result of insurance deductibles or other exclusions or exceeding policy limits), and the risks associated with the operation of transmission and distribution assets and power generation facilities, including public and employee safety issues, and assets causing or contributing to wildfires;
the ability of the Company’s non-regulated subsidiary, Pacific Current, LLC (Pacific Current), to achieve its performance and growth objectives, which in turn could affect its ability to service its non-recourse debt;
the Company’s reliance on third parties and the risk of their non-performance, which has increased due to the impact from the COVID-19 pandemic; and
other risks or uncertainties described elsewhere in this report and in other reports (e.g., “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K) previously and subsequently filed by HEI and/or Hawaiian Electric with the Securities and Exchange Commission.
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, ASB, Pacific Current and their subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether written or oral and whether as a result of new information, future events or otherwise.
vi


PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

Hawaiian Electric Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (unaudited)
Three months ended June 30Six months ended June 30
(in thousands, except per share amounts)2021202020212020
Revenues    
Electric utility$601,879 $534,215 $1,166,743 $1,131,657 
Bank77,260 74,714 154,391 154,452 
Other1,118 16 2,069 22 
Total revenues680,257 608,945 1,323,203 1,286,131 
Expenses    
Electric utility534,195 466,414 1,029,945 1,019,898 
Bank37,454 66,221 79,289 126,556 
Other6,752 4,754 14,082 8,419 
Total expenses578,401 537,389 1,123,316 1,154,873 
Operating income (loss)    
Electric utility67,684 67,801 136,798 111,759 
Bank39,806 8,493 75,102 27,896 
Other(5,634)(4,738)(12,013)(8,397)
Total operating income101,856 71,556 199,887 131,258 
Retirement defined benefits credit (expense)—other than service costs1,216 (934)3,651 (1,868)
Interest expense, net—other than on deposit liabilities and other bank borrowings(23,317)(22,613)(47,053)(44,388)
Allowance for borrowed funds used during construction812 752 1,559 1,440 
Allowance for equity funds used during construction2,377 2,194 4,568 4,209 
Gain on sale of investment securities, net9,275 528 9,275 
Income before income taxes82,944 60,230 163,140 99,926 
Income taxes18,599 10,870 33,964 16,673 
Net income64,345 49,360 129,176 83,253 
Preferred stock dividends of subsidiaries473 473 946 946 
Net income for common stock$63,872 $48,887 $128,230 $82,307 
Basic earnings per common share$0.58 $0.45 $1.17 $0.75 
Diluted earnings per common share$0.58 $0.45 $1.17 $0.75 
Weighted-average number of common shares outstanding109,282 109,146 109,252 109,098 
Net effect of potentially dilutive shares233 159 305 276 
Weighted-average shares assuming dilution109,515 109,305 109,557 109,374 
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2020 Form 10-K.

1


Hawaiian Electric Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (unaudited)
 Three months ended June 30Six months ended June 30
(in thousands)2021202020212020
Net income for common stock$63,872 $48,887 $128,230 $82,307 
Other comprehensive income (loss), net of taxes:    
Net unrealized gains (losses) on available-for-sale investment securities:    
Net unrealized gains (losses) on available-for-sale investment securities arising during the period, net of taxes of $6,214, $356, $(10,402) and $7,476, respectively16,976 973 (28,414)20,421 
Reclassification adjustment for net realized gains included in net income, net of taxes of NaN, $(599), $(142) and $(599), respectively(1,638)(387)(1,638)
Derivatives qualifying as cash flow hedges:    
Unrealized interest rate hedging gains (losses) arising during the period, net of taxes of $(243), $(69), $299 and $(688), respectively(701)(198)861 (1,982)
Retirement benefit plans:    
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of taxes of $2,086, $1,981, $4,170 and $3,967, respectively6,008 5,690 12,018 11,396 
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes of $(2,016), $(1,789), $(4,031) and $(3,578), respectively(5,811)(5,159)(11,622)(10,317)
Other comprehensive income (loss), net of taxes16,472 (332)(27,544)17,880 
Comprehensive income attributable to Hawaiian Electric Industries, Inc.$80,344 $48,555 $100,686 $100,187 
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2020 Form 10-K.

2


Hawaiian Electric Industries, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited) 
(dollars in thousands)June 30, 2021December 31, 2020
Assets  
Cash and cash equivalents$247,443 $341,421 
Restricted cash10,618 17,558 
Accounts receivable and unbilled revenues, net312,727 281,216 
Available-for-sale investment securities, at fair value2,509,906 1,970,417 
Held-to-maturity investment securities, at amortized cost375,655 226,947 
Stock in Federal Home Loan Bank, at cost10,000 8,680 
Loans held for investment, net5,106,207 5,232,642 
Loans held for sale, at lower of cost or fair value50,877 28,275 
Property, plant and equipment, net of accumulated depreciation of $2,995,484 and $2,903,144 at June 30, 2021 and December 31, 2020, respectively5,310,162 5,265,735 
Operating lease right-of-use assets154,720 153,069 
Regulatory assets767,856 766,708 
Other668,368 629,149 
Goodwill82,190 82,190 
Total assets$15,606,729 $15,004,007 
Liabilities and shareholders’ equity  
Liabilities  
Accounts payable$175,060 $182,347 
Interest and dividends payable20,284 23,547 
Deposit liabilities7,873,430 7,386,957 
Short-term borrowings—other than bank95,748 129,379 
Other bank borrowings129,665 89,670 
Long-term debt, net—other than bank2,258,043 2,119,129 
Deferred income taxes384,953 395,089 
Operating lease liabilities167,997 160,432 
Regulatory liabilities966,477 959,786 
Defined benefit pension and other postretirement benefit plans liability548,840 567,438 
Other584,610 618,438 
Total liabilities13,205,107 12,632,212 
Preferred stock of subsidiaries - not subject to mandatory redemption34,293 34,293 
Commitments and contingencies (Notes 3 and 4)00
Shareholders’ equity  
Preferred stock, 0 par value, authorized 10,000,000 shares; issued: NaN
Common stock, 0 par value, authorized 200,000,000 shares; issued and outstanding: 109,311,034 shares and 109,181,124 shares at June 30, 2021 and December 31, 2020, respectively1,681,820 1,678,368 
Retained earnings714,317 660,398 
Accumulated other comprehensive loss, net of tax benefits(28,808)(1,264)
Total shareholders’ equity2,367,329 2,337,502 
Total liabilities and shareholders’ equity$15,606,729 $15,004,007 
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2020 Form 10-K.

3


Hawaiian Electric Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited) 
 Common stockRetainedAccumulated
other
comprehensive
 
(in thousands)SharesAmountEarningsincome (loss)Total
Balance, December 31, 2020109,181 $1,678,368 $660,398 $(1,264)$2,337,502 
Net income for common stock— — 64,358 — 64,358 
Other comprehensive loss, net of tax benefits— — — (44,016)(44,016)
Share-based expenses and other, net100 605 — — 605 
Common stock dividends (34¢ per share)— — (37,156)— (37,156)
Balance, March 31, 2021109,281 1,678,973 687,600 (45,280)2,321,293 
Net income for common stock— — 63,872 — 63,872 
Other comprehensive income, net of taxes— — — 16,472 16,472 
Share-based expenses and other, net30 2,847 — — 2,847 
Common stock dividends (34¢ per share)— — (37,155)— (37,155)
Balance, June 30, 2021109,311 $1,681,820 $714,317 $(28,808)$2,367,329 
Balance, December 31, 2019108,973 $1,678,257 $622,042 $(20,039)$2,280,260 
Impact of adoption of ASU No. 2016-13— — (15,372)— (15,372)
Balance, January 1, 2020 after adoption of
ASU No. 2016-13
108,973 1,678,257 606,670 (20,039)2,264,888 
Net income for common stock— — 33,420 — 33,420 
Other comprehensive income, net of taxes— — — 18,212 18,212 
Share-based expenses and other, net172 (3,996)— — (3,996)
Common stock dividends (33¢ per share)— — (36,019)— (36,019)
Balance, March 31, 2020109,145 1,674,261 604,071 (1,827)2,276,505 
Net income for common stock— — 48,887 — 48,887 
Other comprehensive loss, net of tax benefits— — — (332)(332)
Share-based expenses and other, net36 2,355 — — 2,355 
Common stock dividends (33¢ per share)— — (36,017)— (36,017)
Balance, June 30, 2020109,181 $1,676,616 $616,941 $(2,159)$2,291,398 
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2020 Form 10-K.

4


Hawaiian Electric Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
Six months ended June 30
(in thousands)20212020
Cash flows from operating activities  
Net income$129,176 $83,253 
Adjustments to reconcile net income to net cash provided by operating activities  
Depreciation of property, plant and equipment122,921 119,367 
Other amortization17,896 26,055 
Provision for credit losses(20,642)25,534 
Loans originated, held for sale(239,761)(277,738)
Proceeds from sale of loans, held for sale266,497 259,268 
Gain on sale of investment securities, net(528)(9,275)
Gain on sale of loans, net(6,225)(8,252)
Deferred income taxes(7,355)(21,565)
Share-based compensation expense5,454 4,059 
Allowance for equity funds used during construction(4,568)(4,209)
Other(5,037)(3,854)
Changes in assets and liabilities  
Decrease (increase) in accounts receivable and unbilled revenues, net(41,884)23,458 
Decrease (increase) in fuel oil stock(43,681)31,583 
Decrease (increase) in regulatory assets(17,731)9,432 
Increase in regulatory liabilities5,824 1,717 
Increase (decrease) in accounts, interest and dividends payable2,683 (48,336)
Change in prepaid and accrued income taxes, tax credits and utility revenue taxes(1,818)(12,306)
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability(3,834)16,312 
Change in other assets and liabilities(39,800)(17,120)
Net cash provided by operating activities117,587 197,383 
Cash flows from investing activities  
Available-for-sale investment securities purchased(1,101,289)(476,582)
Principal repayments on available-for-sale investment securities320,597 181,451 
Proceeds from sale of available-for-sale investment securities197,354 169,157 
Purchases of held-to-maturity investment securities(187,172)
Proceeds from repayments or maturities of held-to-maturity investment securities38,401 15,093 
Purchase of stock from Federal Home Loan Bank(32,780)(22,966)
Redemption of stock from Federal Home Loan Bank31,460 21,520 
Net decrease (increase) in loans held for investment91,686 (328,356)
Proceeds from sale of residential loans17,398 
Capital expenditures(148,414)(197,816)
Proceeds from sale of low-income housing investments6,725 
Contributions to low income housing investments(6,478)(1,951)
Other7,805 4,469 
Net cash used in investing activities(771,432)(629,256)
(continued)

5


Hawaiian Electric Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited) (continued)
Six months ended June 30
(in thousands)20212020
Cash flows from financing activities  
Net increase in deposit liabilities486,473 758,050 
Net increase (decrease) in short-term borrowings with original maturities of three months or less31,257 (119,211)
Net increase (decrease) in other bank borrowings with original maturities of three months or less39,995 (20,135)
Proceeds from issuance of short-term debt165,000 
Repayment of short-term debt(65,000)(100,000)
Proceeds from issuance of other bank borrowings30,000 
Proceeds from issuance of long-term debt191,487 351,942 
Repayment of long-term debt and funds transferred for repayment of long-term debt(51,989)(177,245)
Withheld shares for employee taxes on vested share-based compensation(2,002)(5,700)
Common stock dividends(74,311)(72,037)
Preferred stock dividends of subsidiaries(946)(946)
Other(2,037)(1,672)
Net cash provided by financing activities552,927 808,046 
Net increase (decrease) in cash, cash equivalents and restricted cash(100,918)376,173 
Cash, cash equivalents and restricted cash, beginning of period358,979 227,685 
Cash, cash equivalents and restricted cash, end of period258,061 603,858 
Less: Restricted cash(10,618)(29,376)
Cash and cash equivalents, end of period$247,443 $574,482 
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2020 Form 10-K.
6


Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (unaudited)
Three months ended June 30Six months ended June 30
(in thousands)2021202020212020
Revenues$601,879 $534,215 $1,166,743 $1,131,657 
Expenses    
Fuel oil139,136 112,451 266,563 285,672 
Purchased power162,465 136,838 304,761 276,654 
Other operation and maintenance118,142 110,041 232,712 237,588 
Depreciation57,381 55,696 114,736 111,546 
Taxes, other than income taxes57,071 51,388 111,173 108,438 
Total expenses534,195 466,414 1,029,945 1,019,898 
Operating income67,684 67,801 136,798 111,759 
Allowance for equity funds used during construction2,377 2,194 4,568 4,209 
Retirement defined benefits credit (expense)—other than service costs1,020 (382)2,041 (763)
Interest expense and other charges, net(17,995)(17,338)(35,978)(33,932)
Allowance for borrowed funds used during construction812 752 1,559 1,440 
Income before income taxes53,898 53,027 108,988 82,713 
Income taxes11,498 10,199 22,731 15,481 
Net income42,400 42,828 86,257 67,232 
Preferred stock dividends of subsidiaries229 229 458 458 
Net income attributable to Hawaiian Electric42,171 42,599 85,799 66,774 
Preferred stock dividends of Hawaiian Electric270 270 540 540 
Net income for common stock$41,901 $42,329 $85,259 $66,234 
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2020 Form 10-K.
HEI owns all of the common stock of Hawaiian Electric. Therefore, per share data with respect to shares of common stock of Hawaiian Electric are not meaningful.

Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (unaudited)
 Three months ended June 30Six months ended June 30
(in thousands)2021202020212020
Net income for common stock$41,901 $42,329 $85,259 $66,234 
Other comprehensive income, net of taxes:    
Retirement benefit plans:    
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of taxes of $2,028, $1,798, $4,055 and $3,596, respectively5,846 5,184 11,691 10,368 
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes of $(2,016), $(1,789), $(4,031) and $(3,578), respectively(5,811)(5,159)(11,622)(10,317)
Other comprehensive income, net of taxes35 25 69 51 
Comprehensive income attributable to Hawaiian Electric Company, Inc.$41,936 $42,354 $85,328 $66,285 
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2020 Form 10-K.
7


Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)
(dollars in thousands, except par value)June 30, 2021December 31, 2020
Assets  
Property, plant and equipment
Utility property, plant and equipment  
Land$51,612 $51,611 
Plant and equipment7,619,886 7,509,343 
Less accumulated depreciation(2,903,421)(2,819,079)
Construction in progress201,802 188,342 
Utility property, plant and equipment, net4,969,879 4,930,217 
Nonutility property, plant and equipment, less accumulated depreciation of $57 and $115 as of June 30, 2021 and December 31, 2020, respectively6,951 6,953 
Total property, plant and equipment, net4,976,830 4,937,170 
Current assets  
Cash and cash equivalents23,666 47,360 
Restricted cash8,968 15,966 
Customer accounts receivable, net152,392 147,832 
Accrued unbilled revenues, net132,978 101,036 
Other accounts receivable, net5,168 7,673 
Fuel oil stock, at average cost102,066 58,238 
Materials and supplies, at average cost72,959 67,344 
Prepayments and other31,913 44,083 
Regulatory assets59,905 30,435 
Total current assets590,015 519,967 
Other long-term assets  
Operating lease right-of-use assets131,622 127,654 
Regulatory assets707,951 736,273 
Other141,556 136,309 
Total other long-term assets981,129 1,000,236 
Total assets$6,547,974 $6,457,373 
Capitalization and liabilities  
Capitalization  
Common stock ($6 2/3 par value, authorized 50,000,000 shares; outstanding 17,324,376 shares at
June 30, 2021 and December 31, 2020)
$115,515 $115,515 
Premium on capital stock746,987 746,987 
Retained earnings1,311,744 1,282,335 
Accumulated other comprehensive loss, net of tax benefits-retirement benefit plans(2,850)(2,919)
Common stock equity2,171,396 2,141,918 
Cumulative preferred stock — not subject to mandatory redemption34,293 34,293 
Long-term debt, net1,676,043 1,561,302 
Total capitalization3,881,732 3,737,513 
Commitments and contingencies (Note 3)00
Current liabilities  
Current portion of operating lease liabilities68,090 64,730 
Short-term borrowings from non-affiliates37,999 49,979 
Accounts payable131,633 133,849 
Interest and preferred dividends payable17,827 20,350 
Taxes accrued, including revenue taxes175,814 192,524 
Regulatory liabilities31,713 37,301 
Other60,951 74,262 
Total current liabilities524,027 572,995 
Deferred credits and other liabilities  
Operating lease liabilities76,066 69,494 
Deferred income taxes393,275 397,798 
Regulatory liabilities934,764 922,485 
Unamortized tax credits108,286 111,915 
Defined benefit pension and other postretirement benefit plans liability514,075 530,532 
Other115,749 114,641 
Total deferred credits and other liabilities2,142,215 2,146,865 
Total capitalization and liabilities$6,547,974 $6,457,373 
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2020 Form 10-K.
8


Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Common Stock Equity (unaudited)
 
 Common stockPremium
on
capital
RetainedAccumulated
other
comprehensive
 
(in thousands)SharesAmountstockearningsincome (loss)Total
Balance, December 31, 202017,324 $115,515 $746,987 $1,282,335 $(2,919)$2,141,918 
Net income for common stock— — — 43,358 — 43,358 
Other comprehensive income, net of taxes— — — — 34 34 
Common stock dividends— — — (27,925)— (27,925)
Balance, March 31, 202117,324 115,515 746,987 1,297,768 (2,885)2,157,385 
Net income for common stock— — — 41,901 — 41,901 
Other comprehensive income, net of taxes— — — — 35 35 
Common stock dividends— — — (27,925)— (27,925)
Balance, June 30, 202117,324 $115,515 $746,987 $1,311,744 $(2,850)$2,171,396 
Balance, December 31, 201917,048 $113,678 $714,824 $1,220,129 $(1,279)$2,047,352 
Net income for common stock— — — 23,905 — 23,905 
Other comprehensive income, net of taxes— — — — 26 26 
Common stock dividends— — — (26,784)— (26,784)
Balance, March 31, 202017,048 113,678 714,824 1,217,250 (1,253)2,044,499 
Net income for common stock— — — 42,329 — 42,329 
Other comprehensive income, net of taxes— — — — 25 25 
Common stock dividends— — — (26,784)— (26,784)
Balance, June 30, 202017,048 $113,678 $714,824 $1,232,795 $(1,228)$2,060,069 
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2020 Form 10-K.


9


Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
Six months ended June 30
(in thousands)20212020
Cash flows from operating activities  
Net income$86,257 $67,232 
Adjustments to reconcile net income to net cash provided by operating activities  
Depreciation of property, plant and equipment114,736 111,546 
Other amortization12,245 16,275 
Deferred income taxes(11,871)(16,237)
State refundable credit(5,309)(5,060)
Bad debt expense810 1,089 
Allowance for equity funds used during construction(4,568)(4,209)
Other810 116 
Changes in assets and liabilities  
Decrease (increase) in accounts receivable(12,972)10,730 
Decrease (increase) in accrued unbilled revenues(31,398)15,780 
Decrease (increase) in fuel oil stock(43,828)31,458 
Increase in materials and supplies(5,615)(5,542)
Decrease (increase) in regulatory assets(17,731)9,432 
Increase in regulatory liabilities5,824 1,717 
Increase (decrease) in accounts payable12,297 (48,209)
Change in prepaid and accrued income taxes, tax credits and revenue taxes(9,051)(14,700)
Increase (decrease) in defined benefit pension and other postretirement benefit plans liability(2,549)14,968 
Change in other assets and liabilities(30,634)(4,918)
Net cash provided by operating activities57,453 181,468 
Cash flows from investing activities  
Capital expenditures(138,025)(186,532)
Other4,670 5,441 
Net cash used in investing activities(133,355)(181,091)
Cash flows from financing activities  
Common stock dividends(55,850)(53,568)
Preferred stock dividends of Hawaiian Electric and subsidiaries(998)(998)
Proceeds from issuance of short-term debt100,000 
Repayment of short-term debt(50,000)(100,000)
Proceeds from issuance of long-term debt115,000 255,000 
Repayment of long-term debt and funds transferred for repayment of long-term debt(109,000)
Net Increase (decrease) in short-term borrowings from non-affiliates and affiliates with original maturities of three months or less37,999 (38,987)
Other(941)(1,347)
Net cash provided by financing activities45,210 51,100 
Net increase (decrease) in cash and cash equivalents(30,692)51,477 
Cash, cash equivalents and restricted cash, beginning of period63,326 41,894 
Cash, cash equivalents and restricted cash, end of period32,634 93,371 
Less: Restricted cash(8,968)(29,376)
Cash and cash equivalents, end of period$23,666 $63,995 
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2020 Form 10-K.

10


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Note 1 · Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) for interim financial information, the instructions to SEC Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In preparing the unaudited condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenues and expenses for the period. Actual results could differ significantly from those estimates. The accompanying unaudited condensed consolidated financial statements and the following notes should be read in conjunction with the audited consolidated financial statements and the notes thereto in HEI’s and Hawaiian Electric’s Form 10-K for the year ended December 31, 2020.
In the opinion of HEI’s and Hawaiian Electric’s management, the accompanying unaudited condensed consolidated financial statements contain all material adjustments required by GAAP to fairly state consolidated HEI’s and Hawaiian Electric’s financial positions as of June 30, 2021 and December 31, 2020 and the results of their operations for the three and six months ended June 30, 2021 and 2020 and cash flows for the six months ended June 30, 2021 and 2020. All such adjustments are of a normal recurring nature, unless otherwise disclosed below or in other referenced material. Results of operations for interim periods are not necessarily indicative of results for the full year.
Recent accounting pronouncements.
Income Taxes. In December 2019, Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which removes specific exceptions to the general principles in Topic 740, improves financial statement preparers’ application of income tax-related guidance and simplifies GAAP under certain situations. ASU No. 2019-12 is effective for public business entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted the ASU as of January 1, 2021 with no material impact on its consolidated financial statements and related disclosures.
Leases. On July 19, 2021 FASB issued ASU No. 2021-05, “Leases (Topic 842): Lessors–Certain Leases with Variable Lease Payments.” The ASU allows lessors to treat sales-type leases with variable payments to be classified as operating leases if the sales-type lease treatment under Topic 842 would result in a selling loss at lease commencement (day-one loss). The Company plans to early adopt ASU No. 2021-05 as of September 30, 2021 retrospectively to leases that commenced on or after the adoption of ASU No. 2016-02. The impact of the adoption of ASU No. 2021-05 on the Company’s consolidated financial statements is not expected to be material.
11


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)
Note 2 · Segment financial information
(in thousands) Electric utilityBankOtherTotal
Three months ended June 30, 2021    
Revenues from external customers$601,869 $77,260 $1,128 $680,257 
Intersegment revenues (eliminations)10 (10)
Revenues$601,879 $77,260 $1,118 $680,257 
Income (loss) before income taxes$53,898 $39,992 $(10,946)$82,944 
Income taxes (benefit)11,498 9,708 (2,607)18,599 
Net income (loss)42,400 30,284 (8,339)64,345 
Preferred stock dividends of subsidiaries499 (26)473 
Net income (loss) for common stock$41,901 $30,284 $(8,313)$63,872 
Six months ended June 30, 2021    
Revenues from external customers$1,166,724 $154,391 $2,088 $1,323,203 
Intersegment revenues (eliminations)19 (19)
Revenues$1,166,743 $154,391 $2,069 $1,323,203 
Income (loss) before income taxes$108,988 $77,094 $(22,942)$163,140 
Income taxes (benefit)22,731 17,254 (6,021)33,964 
Net income (loss)86,257 59,840 (16,921)129,176 
Preferred stock dividends of subsidiaries998 (52)946 
Net income (loss) for common stock$85,259 $59,840 $(16,869)$128,230 
Total assets (at June 30, 2021)$6,547,974 $8,909,904 $148,851 $15,606,729 
Three months ended June 30, 2020    
Revenues from external customers$534,206 $74,714 $25 $608,945 
Intersegment revenues (eliminations)(9)
Revenues$534,215 $74,714 $16 $608,945 
Income (loss) before income taxes$53,027 $17,334 $(10,131)$60,230 
Income taxes (benefit)10,199 3,320 (2,649)10,870 
Net income (loss)42,828 14,014 (7,482)49,360 
Preferred stock dividends of subsidiaries499 (26)473 
Net income (loss) for common stock$42,329 $14,014 $(7,456)$48,887 
Six months ended June 30, 2020    
Revenues from external customers$1,131,636 $154,452 $43 $1,286,131 
Intersegment revenues (eliminations)21 (21)
Revenues$1,131,657 $154,452 $22 $1,286,131 
Income (loss) before income taxes$82,713 $36,303 $(19,090)$99,926 
Income taxes (benefit)15,481 6,528 (5,336)16,673 
Net income (loss)67,232 29,775 (13,754)83,253 
Preferred stock dividends of subsidiaries998 (52)946 
Net income (loss) for common stock$66,234 $29,775 $(13,702)$82,307 
Total assets (at December 31, 2020)$6,457,373 $8,396,533 $150,101 $15,004,007 
 
Intercompany electricity sales of the Utilities to ASB 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.
Hamakua Energy, LLC’s (Hamakua Energy’s) sales to Hawaii Electric Light (a regulated affiliate) are eliminated in consolidation.
12


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)
Note 3 · Electric utility segment
Unconsolidated variable interest entities.
Power purchase agreements.  As of June 30, 2021, the Utilities had 5 PPAs for firm capacity (including the Puna Geothermal Venture (PGV) PPA that went offline in May 2018 due to lava flow on Hawaii Island, but returned to service with firm capacity of 13 MW in the first quarter of 2021 and ramped up to 23.9 MW in the second quarter of 2021) and other PPAs with independent power producers (IPPs) and Schedule Q providers (i.e., customers with cogeneration and/or power production facilities who buy power from or sell power to the Utilities), none of which are currently required to be consolidated as VIEs.
Pursuant to the current accounting standards for VIEs, the Utilities are deemed to have a variable interest in Kalaeloa Partners, L.P. (Kalaeloa), AES Hawaii, Inc. (AES Hawaii) and Hamakua Energy by reason of the provisions of the PPA that the Utilities have with the 3 IPPs. However, management has concluded that the Utilities are not the primary beneficiary of Kalaeloa, AES Hawaii and Hamakua Energy because the Utilities do not have the power to direct the activities that most significantly impact the 3 IPPs’ economic performance nor the obligation to absorb their expected losses, if any, that could potentially be significant to the IPPs. Thus, the Utilities have not consolidated Kalaeloa, AES Hawaii and Hamakua Energy in its condensed consolidated financial statements. Hamakua Energy is an indirect subsidiary of Pacific Current and is consolidated in HEI’s condensed consolidated financial statements.
For the other PPAs with IPPs, the Utilities have concluded that the consolidation of the IPPs was not required because either the Utilities do not have variable interests in the IPPs due to the absence of an obligation in the PPAs for the Utilities to absorb any variability of the IPPs, or the IPP was considered a “governmental organization,” and thus excluded from the scope of accounting standards for VIEs. The consolidation of any significant IPP could have a material effect on the unaudited condensed consolidated financial statements, including the recognition of a significant amount of assets and liabilities and, if such a consolidated IPP were operating at a loss and had insufficient equity, the potential recognition of such losses. If the Utilities determine they are required to consolidate the financial statements of such an IPP and the consolidation has a material effect, the Utilities would retrospectively apply accounting standards for VIEs to the IPP.
Commitments and contingencies.
Contingencies. The Utilities are subject in the normal course of business to pending and threatened legal proceedings. Management does not anticipate that the aggregate ultimate liability arising out of these pending or threatened legal proceedings will be material to its financial position. However, the Utilities cannot rule out the possibility that such outcomes could have a material effect on the results of operations or liquidity for a particular reporting period in the future.
Power purchase agreements.  Purchases from all IPPs were as follows:
 Three months ended June 30Six months ended June 30
(in millions)2021202020212020
Kalaeloa$49 $34 $86 $72 
AES Hawaii36 32 66 63 
HPOWER14 17 31 34 
Hamakua Energy12 11 23 24 
Puna Geothermal Venture11 
Wind IPPs28 25 57 53 
Solar IPPs16 17 28 28 
Other IPPs 1
Total IPPs$163 $137 $305 $277 
1Includes hydro power and other PPAs
Kalaeloa Partners, L.P.  Under a 1988 PPA, as amended, Hawaiian Electric is committed to purchase 208 MW of firm capacity from Kalaeloa. Hawaiian Electric and Kalaeloa continue negotiations to address the PPA term that ended on May 23, 2016. The PPA automatically extends on a month-to-month basis as long as the parties are still negotiating in good faith. Hawaiian Electric and Kalaeloa have agreed that neither party will give notice of termination of negotiation prior to October 31, 2021, to allow for a negotiated resolution. As a result, since the PPA provides for a 60-day notice of termination of the PPA, the PPA will remain in full force and effect through October 31, 2021, and from month to month thereafter, subject to termination on not less than 60 days notice.
13


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)
AES Hawaii, Inc. Under a PPA entered into in March 1988, as amended (through Amendment No. 2) for a period of 30 years ending September 2022, Hawaiian Electric agreed to purchase 180 MW of firm capacity from AES Hawaii. Hawaiian Electric and AES Hawaii have been in dispute over an additional 9 MW of capacity. In February 2018, Hawaiian Electric reached agreement with AES Hawaii on an amendment to the PPA. However, in June 2018, the PUC issued an order suspending review of the amendment pending a Department of Health of the State of Hawaii (DOH) decision on AES Hawaii’s request for approval of its Emission Reduction Plan and partnership with Hawaiian Electric. If approved by the PUC, the amendment will resolve AES Hawaii’s claims related to the additional capacity. Hawaiian Electric does not intend to extend the term of the PPA which will expire on September 1, 2022.
Hu Honua Bioenergy, LLC (Hu Honua). In May 2012, Hawaii Electric Light signed a PPA, which the PUC approved in December 2013, with Hu Honua for 21.5 MW of renewable, dispatchable firm capacity fueled by locally grown biomass from a facility on the island of Hawaii. Under the terms of the PPA, the Hu Honua plant was scheduled to be in service in 2016. However, Hu Honua encountered construction and litigation delays, which resulted in an amended and restated PPA between Hawaii Electric Light and Hu Honua dated May 9, 2017. In July 2017, the PUC approved the amended and restated PPA, which becomes effective once the PUC’s order is final and non-appealable. In August 2017, the PUC’s approval was appealed by a third party. On May 10, 2019, the Hawaii Supreme Court issued a decision remanding the matter to the PUC for further proceedings consistent with the court’s decision which must include express consideration of greenhouse gas (GHG) emissions that would result from approving the PPA, whether the cost of energy under the PPA is reasonable in light of the potential for GHG emissions, and whether the terms of the PPA are prudent and in the public interest, in light of its potential hidden and long-term consequences. As a result, the PUC reopened the docket for further proceedings, including re-examining all of the issues in the proceedings. On July 9, 2020, the PUC issued an order denying Hawaii Electric Light’s request to waive the amended and restated PPA from the PUC’s competitive bidding requirements and therefore, dismissed the request for approval of the amended and restated PPA without prejudice to possible participation in any future competitive bidding process. On September 9, 2020, the PUC denied Hu Honua’s motion for reconsideration of the PUC’s order. Hu Honua filed its notice of appeal to the Hawaii Supreme Court of the PUC’s order denying Hu Honua’s motion for reconsideration. On May 24, 2021, the Hawaii Supreme Court vacated the PUC’s decision and remanded the matter back to the PUC for further proceedings. On June 30, 2021, the PUC issued an order reopening the docket consistent with the Hawaii Supreme Court’s order.
Molokai New Energy Partners (MNEP). In July 2018, the PUC approved Maui Electric’s PPA with MNEP to purchase solar energy from a photovoltaic (PV) plus battery storage project. The 4.88 MW PV and 3 MW Battery Energy Storage System project was to deliver no more than 2.64 MW at any time to the Molokai system. On March 25, 2020, MNEP filed a complaint in the United Stated District Court for the District of Hawaii against Maui Electric claiming breach of contract. On June 3, 2020, Maui Electric provided Notice of Default and Termination of the PPA to MNEP terminating the PPA with an effective date of July 10, 2020. Thereafter, MNEP filed an amended Complaint to include claims relating to the termination and Hawaiian Electric filed its Answer to the Amended Complaint on September 11, 2020, disputing the facts presented by MNEP and all claims within the original and amended complaint.
Utility projects.  Many public utility projects require PUC approval and various permits from other governmental agencies. Difficulties in obtaining, or the inability to obtain, the necessary approvals or permits or community support can result in significantly increased project costs or even cancellation of projects. In the event a project does not proceed, or if it becomes probable the PUC will disallow cost recovery for all or part of a project, or if PUC-imposed caps on project costs are expected to be exceeded, project costs may need to be written off in amounts that could result in significant reductions in Hawaiian Electric’s consolidated net income.
Enterprise Resource Planning/Enterprise Asset Management (ERP/EAM) implementation project. The ERP/EAM Implementation Project went live in October 2018. Hawaii Electric Light and Hawaiian Electric began to incorporate their portion of the deferred project costs in rate base and started the amortization over a 12-year period in January 2020 and November 2020, respectively. The PUC required the benefit savings of the project to be passed on to customers.
In February 2019, the PUC approved a methodology for passing the future cost saving benefits of the new ERP/EAM system to customers developed by the Utilities in collaboration with the Consumer Advocate. The Utilities filed a benefits clarification document on June 10, 2019, reflecting $150 million in future net O&M expense reductions and cost avoidance, and $96 million in capital cost reductions and tax savings over the 12-year service life. To the extent the reduction in O&M expense relates to amounts reflected in electric rates, the Utilities would reduce future rates for such amounts. In October 2019, the PUC approved the Utilities and the Consumer Advocate’s Stipulated Performance Metrics and Tracking Mechanism. As of June 30, 2021, the Utilities’ regulatory liability was $11.1 million ($6.1 million for Hawaiian Electric, $2.0 million for Hawaii Electric Light and $3.0 million for Maui Electric) for the O&M expense savings that are being amortized or to be included in future rates. As part of the settlement agreement approved in the Hawaiian Electric 2020 test year rate case, the regulatory liability for Hawaiian Electric will be amortized over five years, beginning in November 2020, and the O&M benefits for Hawaiian Electric
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was considered flowed through to customers. As part of the PBR proceeding, the regulatory liability as of December 31, 2020 of approximately $1.6 million and $2.3 million, respectively, for Hawaii Electric Light and Maui Electric was flowed to customers as part of the customer dividend in the annual revenue adjustment in 2021.
At the PUC’s direction, the Utilities have been filing Semi-Annual Enterprise System Benefits (SAESB) reports on the achieved benefits savings. The most recent SAESB report was filed on February 26, 2021 for the period July 1 through December 31, 2020.
Environmental regulation.  The Utilities are subject to environmental laws and regulations that regulate the operation of existing facilities, the construction and operation of new facilities and the proper cleanup and disposal of hazardous waste and toxic substances.
Hawaiian Electric, Hawaii Electric Light and Maui Electric, like other utilities, periodically encounter petroleum or other chemical releases associated with current or previous operations. The Utilities report and take action on these releases when and as required by applicable law and regulations. The Utilities believe the costs of responding to such releases identified to date will not have a material effect, individually or in the aggregate, on Hawaiian Electric’s consolidated results of operations, financial condition or liquidity.
Former Molokai Electric Company generation site.  In 1989, Maui Electric acquired Molokai Electric Company. Molokai Electric Company had sold its former generation site (Site) in 1983, but continued to operate at the Site under a lease until 1985. The federal Environmental Protection Agency (EPA) has since identified environmental impacts in the subsurface soil at the Site. In cooperation with the DOH and EPA, Maui Electric further investigated the Site and the Adjacent Parcel to determine the extent of impacts of polychlorinated biphenyls (PCBs), residual fuel oils and other subsurface contaminants. Maui Electric has a reserve balance of $2.7 million as of June 30, 2021, representing the probable and reasonably estimable undiscounted cost for remediation of the Site and the Adjacent Parcel; however, final costs of remediation will depend on the cleanup approach implemented.
Pearl Harbor sediment study. In July 2014, the U.S. Navy notified Hawaiian Electric of the Navy’s determination that Hawaiian Electric is a Potentially Responsible Party responsible for the costs of investigation and cleanup of PCBs contamination in sediment in the area offshore of the Waiau Power Plant as part of the Pearl Harbor Superfund Site. Hawaiian Electric was also required by the EPA to assess potential sources and extent of PCB contamination onshore at Waiau Power Plant.
As of June 30, 2021, the reserve account balance recorded by Hawaiian Electric to address the PCB contamination was $10.5 million. The reserve balance represents the probable and reasonably estimable undiscounted cost for the onshore and offshore investigation and remediation. The final remediation costs will depend on the actual onshore and offshore cleanup costs.
Regulatory proceedings
Decoupling. Decoupling is a regulatory model that is intended to provide the Utilities with financial stability and facilitate meeting the State of Hawaii’s goals to transition to a clean energy economy and achieve an aggressive renewable portfolio standard. Prior to the implementation of the performance-based regulation framework (PBR Framework), the decoupling mechanism had the following major components: (1) monthly revenue balancing account (RBA) revenues or refunds for the difference between PUC-approved target revenues and recorded adjusted revenues, which delinks revenues from kWh sales, (2) rate adjustment mechanism (RAM) revenues for escalation in certain O&M expenses and rate base changes, (3) major project interim recovery (MPIR) adjustment mechanism, (4) performance incentive mechanisms (PIMs), and (5) an earnings sharing mechanism (ESM), which would provide for a reduction of revenues between rate cases in the event the utility exceeds the return on average common equity (ROACE) allowed in its most recent rate case.
Performance-based regulation framework. On December 23, 2020, the PUC issued a D&O (PBR D&O) approving the new PBR Framework. Under the PBR Framework, the Utilities’ decoupling will continue to be used with modifications, as described below. The existing cost recovery mechanisms will continue as currently implemented (e.g., the Energy Cost Recovery Clause (ECRC), Purchased Power Adjustment Clause (PPAC), Demand Side Management surcharge (DSM), Renewable Energy Infrastructure Program (REIP), Demand Response Adjustment Clause (DRAC), Pension and Other Post-Employment Benefits (OPEB) tracking mechanisms). In addition to annual revenues provided by the annual revenue adjustment (ARA), the Utilities may seek relief for extraordinary projects or programs through the Exceptional Project Recovery Mechanism (EPRM) (formerly known as the MPIR adjustment mechanism) and earn financial rewards for exemplary performance as provided through a portfolio of PIMs and Shared Savings Mechanisms (SSMs). The PBR Framework will incorporate a variety of other performance mechanisms, including Scorecards, Reported Metrics, and an expedited Pilot Process. The PBR Framework also contains a number of safeguards, including a symmetric ESM which protects the Utilities
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and customers from excessive earnings or losses, as measured by the Utilities’ Return on Equity (ROE) and a Re-Opener mechanism, under which the PUC will open an examination, at its discretion, to determine if adjustments or modifications to specific PBR mechanisms are appropriate.
Rate adjustment mechanism. The RAM is based on the lesser of: a) an inflationary adjustment for certain O&M expenses and return on investment for certain rate base changes, or b) cumulative annual compounded increase in Gross Domestic Product Price Index applied to annualized target revenues (the RAM Cap). All Utilities were limited to the RAM Cap in 2020. Under the PBR Framework, the ARA mechanism replaced the RAM, and became effective on June 1, 2021. The transition to the ARA includes the continuation of the 2020 RAM revenue adjustment.
Annual revenue adjustment mechanism. The PBR Framework established a five-year multi-year rate period during which there will be no general rate cases. Target revenues will be adjusted according to an index-driven ARA based on (i) an inflation factor, (ii) a predetermined X-factor to encompass productivity, which is set at zero, (iii) a Z-factor to account for exceptional circumstances not in the Utilities’ control and (iv) a customer dividend consisting of a negative adjustment of 0.22% compounded annually and a flow through of the “pre-PBR” savings commitment from the management audit recommendations developed in a prior docket.
As a result of an Order issued by the PUC pursuant to a motion for partial reconsideration the customer dividend for “pre-PBR” savings commitment portion to be delivered to customers will be at a rate of $6.6 million per year from 2021 to 2025, and the Enterprise Resource Planning system benefits savings of $3.9 million, to be delivered to customers in 2021. The implementation of the ARA occurred on June 1, 2021.
Earnings sharing mechanism. A symmetrical ESM for actual return on equity outside of a 300 basis points dead band above and below a target ROE of 9.5%, which is the current authorized ROE for the Utilities. There is a 50/50 sharing between customers and Utilities for the actual earnings falling within 150 basis points outside of the dead band in either direction, and a 90/10 sharing for any further difference. A reopening or review of the PBR terms will be triggered if the Utilities credit rating outlook indicates a potential credit downgrade below investment grade status, or if its earned ROE enters the outer most tier of the ESM.
Major project interim recovery. On April 27, 2017, the PUC issued an order that provided guidelines for interim recovery of revenues to support major projects placed in service between general rate cases.
Projects eligible for recovery through the MPIR adjustment mechanism are major projects (i.e., projects with capital expenditures net of customer contributions in excess of $2.5 million), including, but not restricted to, renewable energy, energy efficiency, utility scale generation, grid modernization and smaller qualifying projects grouped into programs for review. The MPIR adjustment mechanism provides the opportunity to recover revenues for approved costs of eligible projects placed in service between general rate cases wherein cost recovery is limited by a revenue cap and is not provided by other effective recovery mechanisms. The request for PUC approval must include a business case, and all costs that are allowed to be recovered through the MPIR adjustment mechanism must be offset by any related benefits. The guidelines provide for accrual of revenues approved for recovery upon in-service date to be collected from customers through the annual RBA tariff. Capital projects that are not recovered through the MPIR would be included in the RAM and be subject to the RAM Cap, until the next rate case when the Utilities would request recovery in base rates.
On May 26, 2021, the PUC approved 2021 MPIR amounts totaling $21.8 million, including revenue taxes, for the Schofield Generating Station ($17.6 million), West Loch PV Project ($3.3 million), and Grid Modernization Strategy Phase 1 project ($0.9 million for all three utilities) for the accrual of revenues effective January 1, 2021, that included the 2021 return on project amount (based on approved amounts) in rate base, depreciation and incremental O&M expenses. Under the PBR framework, the Utilities began recovery of the annualized 2021 MPIR amounts effective June 1, 2021 through the RBA rate adjustment.
Exceptional project recovery mechanism. Under the PBR framework, the existing MPIR adjustment mechanism was renamed EPRM to include deferred and O&M expense projects and to permit the Utilities to include the full amount of approved costs in the EPRM for recovery in the first year the project goes into service, pro-rated for the portion of the year the project is in service. Any pending application for MPIR relief submitted by the Utilities prior to the PBR D&O, will be grandfathered under the MPIR Guidelines. The Utilities may alternatively request that pending MPIR applications be reviewed under EPRM Guidelines. EPRM recovery will be in accordance with the EPRM Guidelines limited to the lesser of actual incurred project costs or PUC-approved amounts, net of savings. Currently, the Utilities are seeking EPRM recovery of 7 projects with total project costs of $245 million, subject to PUC approval.

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Pilot process. The PBR D&O approved a Pilot Process to foster innovation by establishing an expedited implementation process for pilots that test new technologies, programs, business models, and other arrangements. This is intended to support initiatives by the Utilities to test new programs and ideas quickly and elevate any successful pilots for consideration of full-scale implementation. The proposed pilots would be subject to PUC approval with a total annual cap of $10 million. The Pilot Process will feature the two primary activities: an initial “Workplan Development” phase, during which the Utilities identify and scope areas of interests, so as to inform the subsequent “Implementation” phase, during which the Utilities submit specific pilot proposals for expedited review by the PUC and implement the pilot upon approval. The PUC will issue an order, approving, denying, or modifying a proposed Pilot within 45 days of receiving notice of a specific pilot project.
On July 9, 2021, the PUC issued an order approving the Utilities’ proposed Pilot Process submitted in April 2021, including a cost recovery process that generally allows the Utilities to defer and recover total annual expenditures of approved pilot projects in full over twelve months beginning June 1 of the year following implementation through the RBA rate adjustment, although the Utilities may determine on a case-by-case basis that a particular project’s deferred costs should be amortized over a period greater than twelve months.
Performance incentive mechanisms. The PUC has established the following PIMs: (1) Service Quality performance incentives, (2) Phase 1 Request for proposal (RFP) PIM for procurement of low-cost renewable energy, (3) Phase 2 RFP PIMs for generation and generation plus storage project, and Grid Services and standalone storage.
Service Quality performance incentives (ongoing). Service Quality performance incentives are measured on a calendar-year basis. The PIM tariff requires the performance targets, deadbands and the amount of maximum financial incentives used to determine the PIM financial incentive levels for each of the PIMs to be re-determined upon issuance of an interim or final order in a general rate case for each utility.
Service Reliability Performance measured by System Average Interruption Duration and Frequency Indexes (penalties only). Target performance is based on each utility’s historical 10-year average performance with a deadband of one standard deviation. The maximum penalty for each performance index is 20 basis points applied to the common equity share of each respective utility’s approved rate base (or maximum penalties of approximately $6.8 million - for both indices in total for the three utilities).
Call Center Performance measured by the percentage of calls answered within 30 seconds. Target performance is based on the annual average performance for each utility for the most recent 8 quarters with a deadband of 3% above and below the target. The maximum penalty or reward is 8 basis points applied to the common equity share of each respective utility’s approved rate base (or maximum penalties or rewards of approximately $1.4 million - in total for the three utilities).
In December 2020, the Utilities accrued $0.9 million in estimated rewards for call center performance, net of service reliability penalties, for 2020. The net service quality performance rewards related to 2020 was reflected in the 2021 annual decoupling filing which was approved by the PUC on May 26, 2021, resulting in an increase to customer rates effective June 1, 2021.
Phase 1 RFP PIM. Procurement of low-cost variable renewable resources through the RFP process in 2018 is measured by comparison of the procurement price to target prices. Half of the incentive was earned upon PUC approval of the PPAs. Based on the 7 PPAs approved in 2019, the Utilities recognized $1.7 million in 2019 with the remaining award to be recognized in the year following the in-service date of the projects, which is estimated to occur from 2023 to 2024.
Phase 2 RFP PIMs. The PUC order issued on October 9, 2019 establishes pricing thresholds, timelines to complete contracting, and other performance criteria for the performance incentive eligibility. The PIMs provide incentives only without penalties. The order requires contracts under the Grid Service RFP be filed for approval by May 2020 (subsequently extended to July 9, 2020), and by September 2020 under the Renewable RFPs, with a declining PIM for projects that are not filed by these deadlines. On July 9, 2020, the Utilities filed 2 Grid Service Purchase Agreements for the Grid Service RFP that potentially qualify for a demand response PIM, however, details of the incentive metrics will be determined by the PUC. On September 15, 2020, the Utilities filed 8 power purchase agreements for the Phase 2 RFP. Of those 8, only 1 project qualified for a potential PIM incentive. On February 16, 2021, the Utilities filed 1 additional power purchase agreement that qualifies for the declining PIM. On December 31, 2020, the PUC approved the 2 Grid Services Purchase Agreements without further clarification regarding the demand response PIM. The Utility filed a letter in January 2021 with the PUC seeking guidance on the next steps to define the demand response incentive metric details.
The PUC established the following 2 new PIMs in its PBR D&O, which were approved in an order issued on March 23, 2021 and became effective on June 1, 2021.
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Renewable portfolio standard (RPS)-A PIM that provides a financial reward for accelerating the achievement of RPS goals. The Utilities may earn a reward for the amount of system generation above the interpolated statutory RPS goal at $20/MWh in 2021 and 2022, $15/MWh in 2023, and $10/MWh for the remainder of the multi-year rate period (MRP). Penalties are already prescribed in the RPS as $20/MWh for failing to meet RPS targets in 2030, 2040 and 2045. The evaluation period commenced on January 1, 2021.
Grid Services Procurement PIM that provides financial rewards for grid services acquired in 2021 and 2022. The Utilities can earn a total maximum reward of $1.5 million over 2021 and 2022. The evaluation period commenced on January 1, 2021.
The PUC also established the following 3 new PIMs in its PBR D&O, which were approved by the PUC on May 17, 2021 and became effective on June 1, 2021.
Interconnection Approval PIM that provides financial rewards and penalties for interconnection times for distributed energy resources systems <100 kW in size. The Utilities can earn a total annual maximum reward of $3.0 million or a total annual maximum penalty of $0.9 million. The evaluation period commenced on January 1, 2021.
Low-to-Moderate Income (LMI) Energy Efficiency PIM that provides financial reward for collaboration between the Utilities and the third-party Public Benefits Fee Administrator to deliver energy savings for low- and moderate-income customers. The Utilities can earn a total annual maximum reward of $2.0 million. The PIM will initially have a duration of three years and be subject to an annual review. The evaluation period is based on Hawaii Energy’s program year with the initial evaluation year being the period of July 1, 2021 through June 30, 2022.
Advanced Metering Infrastructure Utilization PIM that provides financial rewards for leveraging grid modernization investments and engaging customers beyond what is already planned in the Phase 1 Grid Modernization program. The Utilities can earn a total annual maximum reward of $2.0 million. The PIM will initially have a duration of three years after which it will be re-evaluated. The evaluation period commenced on January 1, 2021.
Annual decoupling filings. The filing reflected ARA revenues for 2021 to be collected from June 1 through December 31, 2021, as follows:
(in millions)Hawaiian ElectricHawaii Electric LightMaui ElectricTotal
2021 ARA revenues$6.9 $1.7 $1.7 $10.3 
Management Audit savings commitment(4.6)(1.0)(1.0)(6.6)
Net incremental revenues$2.3 $0.7 $0.7 $3.7 

The net incremental amounts to be collected (refunded) from June 1, 2021 through December 31, 2021 under the RBA rate tariffs are as follows:
(in millions)Hawaiian ElectricHawaii Electric LightMaui ElectricTotal
Incremental RAM revenues and ARA revenues$(14.7)$(2.2)$(6.1)$(23.0)
Annual change in accrued RBA balance as of December 31, 2020 (and associated revenue taxes)10.4 5.7 8.9 25.0 
Incremental Performance Incentive Mechanisms (net)0.2 0.5 0.7 
Incremental MPIR/EPRM Revenue Adjustment12.6 0.1 0.1 12.8
Incremental Affiliate Transaction Refund/PUC Ordered AdjustmentN/A2.0 2.0
Net incremental amount to be collected under the RBA rate tariffs$8.3 $3.8 $5.3 $17.4 
Note: Columns may not foot due to rounding.
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Most recent rate proceedings.
Hawaiian Electric 2020 test year rate case. On October 22, 2020, the PUC issued a final D&O approving the stipulated settlement agreement filed in the proceeding. As a result, there will be no increase in base electric rates established in the 2017 test year rate case. In the final D&O, the PUC approved the capital structure that consists of a 58% total equity ratio, and a ROACE of 9.5% for the 2020 test year. The resulting return on rate base (RORB) is 7.37%. The D&O approved the agreement to implement the overall lower depreciation rates approved in the last depreciation study proceeding, effective January 1, 2020. See “Annual revenue adjustment mechanism” under “Performance-based regulation framework” above, regarding the PUC’s decision on the treatment of Hawaiian Electric’s Management Audit savings commitment. Hawaiian Electric’s proposed RBA provision tariff and ECRC tariff submitted on November 6, 2020 were approved by the PUC on December 11, 2020 and took effect on January 1, 2021.
Hawaii Electric Light 2019 test year rate case. On July 28, 2020, the PUC issued a final D&O, approving the Stipulated Partial Settlement Letter in part and ordering final rates for the 2019 test year to remain at current effective rates such that there is a zero increase in rates. The PUC determined that an appropriate ROACE for the 2019 test year is 9.5%, approved a capital structure of 58% total equity and approved as fair a 7.52% RORB. In addition, the order, among others, (1) approved a 10-year amortization period for the state investment tax credit; and (2) approved a modification to Hawaii Electric Light’s ECRC to incorporate a 98%/2% risk-sharing split between customers and Hawaii Electric Light with an annual maximum exposure cap of +/- $600,000. The proposed final tariffs and PIM tariffs took effect on November 1, 2020, and the ECRC tariff took effect on January 1, 2021.
Regulatory assets for COVID-19 related costs. On May 4, 2020, the PUC issued an order, authorizing all utilities, including the Utilities, to establish regulatory assets to record costs resulting from the suspension of disconnections of service during the pendency of the Governor’s Emergency Proclamation and until otherwise ordered by the PUC. In future proceedings, the PUC will consider the reasonableness of the costs, the appropriate period of recovery, any amount of carrying costs thereon, and any savings directly attributable to suspension of disconnects, and other related matters. As part of the order, the PUC prohibits the Utilities from charging late payment fees on past due payments. On June 30, 2020, the PUC issued an order approving the Utilities’ request made in April 2020 for deferral treatment of COVID-19 related costs through December 31, 2020. On March 8, 2021, the PUC approved the Utilities’ request to extend the deferral period to June 30, 2021. The Utilities’ request to extend the deferral period to December 31, 2021 is pending PUC approval. The Utilities are required to file quarterly reports to update the Utilities’ financial condition, report measures in place to assist their customers during the COVID-19 emergency situation, identify the planned deferred costs and details for the deferred costs, and identify funds received or benefits received that have resulted from the COVID-19 emergency period. The recovery of the regulatory assets would be determined in a subsequent proceeding and management believes the deferred costs are probable of recovery. In addition, starting in December 2020 and monthly moving forward until otherwise ordered by the PUC, the Utilities are required to file information on, among other things, number of customers, arrears balances, payment arrangements entered into, and available assistance used to assists customer bill payment. The monthly report is intended to assist the PUC in determining next steps regarding appropriate regulatory measures. As of June 30, 2021, the Utilities recorded a total of $25.6 million in regulatory assets pursuant to the orders.
Collective bargaining agreement. As of June 30, 2021, approximately 47% of the Utilities’ employees are members of the International Brotherhood of Electrical Workers, AFL-CIO, Local 1260. The current collective bargaining agreement with the union is set to expire on October 31, 2021. The Utilities are currently renegotiating the contract with the union.
Condensed consolidating financial information. Condensed consolidating financial information for Hawaiian Electric and its subsidiaries are presented for the three and six month periods ended June 30, 2021 and 2020, and as of June 30, 2021 and December 31, 2020.
Hawaiian Electric unconditionally guarantees Hawaii Electric Light’s and Maui Electric’s obligations (a) to the State of Hawaii for the repayment of principal and interest on Special Purpose Revenue Bonds issued for the benefit of Hawaii Electric Light and Maui Electric, and (b) under their respective private placement note agreements and the Hawaii Electric Light notes and Maui Electric notes issued thereunder. Hawaiian Electric is also obligated, after the satisfaction of its obligations on its own preferred stock, to make dividend, redemption and liquidation payments on Hawaii Electric Light’s and Maui Electric’s preferred stock if the respective subsidiary is unable to make such payments.
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Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Income
Three months ended June 30, 2021
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther subsidiariesConsolidating adjustments
Hawaiian Electric
Consolidated
Revenues$422,697 91,512 87,670 $601,879 
Expenses
Fuel oil91,345 19,586 28,205 139,136 
Purchased power124,948 24,236 13,281 162,465 
Other operation and maintenance77,903 19,474 20,765 118,142 
Depreciation38,907 10,053 8,421 57,381 
Taxes, other than income taxes40,301 8,539 8,231 57,071 
   Total expenses373,404 81,888 78,903 534,195 
Operating income49,293 9,624 8,767 67,684 
Allowance for equity funds used during construction1,930 140 307 2,377 
Equity in earnings of subsidiaries10,744 (10,744)
Retirement defined benefits expense—other than service costs884 169 (33)1,020 
Interest expense and other charges, net(12,829)(2,573)(2,593)(17,995)
Allowance for borrowed funds used during construction654 48 110 812 
Income before income taxes50,676 7,408 6,558 (10,744)53,898 
Income taxes8,505 1,668 1,325 0011,498 
Net income42,171 5,740 5,233 (10,744)42,400 
Preferred stock dividends of subsidiaries133 96 0229 
Net income attributable to Hawaiian Electric42,171 5,607 5,137 (10,744)42,171 
Preferred stock dividends of Hawaiian Electric270 270 
Net income for common stock$41,901 5,607 5,137 (10,744)$41,901 


Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Comprehensive Income
Three months ended June 30, 2021
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther
subsidiaries
Consolidating
adjustments
Hawaiian Electric
Consolidated
Net income for common stock$41,901 5,607 5,137 (10,744)$41,901 
Other comprehensive income, net of taxes:      
Retirement benefit plans:      
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits5,846 834 761 (1,595)5,846 
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes(5,811)(834)(761)1,595 (5,811)
Other comprehensive income, net of taxes35 35 
Comprehensive income attributable to common shareholder$41,936 5,607 5,137 (10,744)$41,936 


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Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Income
Three months ended June 30, 2020
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther subsidiariesConsolidating adjustments
Hawaiian Electric
Consolidated
Revenues$380,634 78,505 75,216 (140)$534,215 
Expenses
Fuel oil77,290 16,254 18,907 112,451 
Purchased power108,946 15,846 12,046 136,838 
Other operation and maintenance74,274 17,581 18,186 110,041 
Depreciation37,860 9,761 8,075 55,696 
Taxes, other than income taxes36,673 7,470 7,245 51,388 
   Total expenses335,043 66,912 64,459 466,414 
Operating income45,591 11,593 10,757 (140)67,801 
Allowance for equity funds used during construction1,807 193 194 2,194 
Equity in earnings of subsidiaries13,776 (13,776)
Retirement defined benefits expense—other than service costs(546)193 (29)(382)
Interest expense and other charges, net(12,499)(2,533)(2,446)140 (17,338)
Allowance for borrowed funds used during construction626 62 64 752 
Income before income taxes48,755 9,508 8,540 (13,776)53,027 
Income taxes6,156 2,196 1,847 0010,199 
Net income42,599 7,312 6,693 (13,776)42,828 
Preferred stock dividends of subsidiaries133 96 0229 
Net income attributable to Hawaiian Electric42,599 7,179 6,597 (13,776)42,599 
Preferred stock dividends of Hawaiian Electric270 270 
Net income for common stock$42,329 7,179 6,597 (13,776)$42,329 


Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Comprehensive Income
Three months ended June 30, 2020
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther
subsidiaries
Consolidating
adjustments
Hawaiian Electric
Consolidated
Net income for common stock$42,329 7,179 6,597 (13,776)$42,329 
Other comprehensive income (loss), net of taxes:      
Retirement benefit plans:      
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits5,184 751 650 (1,401)5,184 
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes(5,159)(748)(653)1,401 (5,159)
Other comprehensive income (loss), net of taxes25 (3)25 
Comprehensive income attributable to common shareholder$42,354 7,182 6,594 (13,776)$42,354 



21


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)

Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Income
Six months ended June 30, 2021
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther subsidiariesConsolidating adjustmentsHawaiian Electric
Consolidated
Revenues$823,251 176,661 166,851 (20)$1,166,743 
Expenses
Fuel oil180,073 36,071 50,419 266,563 
Purchased power233,552 45,833 25,376 304,761 
Other operation and maintenance155,238 37,386 40,088 232,712 
Depreciation77,821 20,101 16,814 114,736 
Taxes, other than income taxes78,928 16,532 15,713 111,173 
   Total expenses725,612 155,923 148,410 1,029,945 
Operating income97,639 20,738 18,441 (20)136,798 
Allowance for equity funds used during construction3,678 272 618 4,568 
Equity in earnings of subsidiaries23,254 (23,254)
Retirement defined benefits expense—other than service costs1,770 337 (66)2,041 
Interest expense and other charges, net(25,661)(5,154)(5,183)20 (35,978)
Allowance for borrowed funds used during construction1,245 92 222 1,559 
Income before income taxes101,925 16,285 14,032 (23,254)108,988 
Income taxes16,126 3,719 2,886 22,731 
Net income85,799 12,566 11,146 (23,254)86,257 
Preferred stock dividends of subsidiaries267 191 458 
Net income attributable to Hawaiian Electric85,799 12,299 10,955 (23,254)85,799 
Preferred stock dividends of Hawaiian Electric540 540 
Net income for common stock$85,259 12,299 10,955 (23,254)$85,259 


Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Comprehensive Income
Six months ended June 30, 2021
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther subsidiariesConsolidating adjustmentsHawaiian Electric Consolidated
Net income for common stock$85,259 12,299 10,955 (23,254)$85,259 
Other comprehensive income, net of taxes:
Retirement benefit plans:
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of taxes11,691 1,669 1,522 (3,191)11,691 
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes(11,622)(1,668)(1,522)3,190 (11,622)
Other comprehensive income, net of taxes69 (1)69 
Comprehensive income attributable to common shareholder$85,328 12,300 10,955 (23,255)$85,328 

22


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)

Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Income
Six months ended June 30, 2020

(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther subsidiariesConsolidating adjustmentsHawaiian Electric
Consolidated
Revenues$801,800 167,798 162,414 (355)$1,131,657 
Expenses
Fuel oil197,825 38,686 49,161 285,672 
Purchased power216,897 35,367 24,390 276,654 
Other operation and maintenance159,911 36,685 40,992 237,588 
Depreciation75,871 19,521 16,154 111,546 
Taxes, other than income taxes77,174 15,812 15,452 108,438 
   Total expenses727,678 146,071 146,149 1,019,898 
Operating income74,122 21,727 16,265 (355)111,759 
Allowance for equity funds used during construction3,550 312 347 4,209 
Equity in earnings of subsidiaries22,580 (22,580)
Retirement defined benefits expense—other than service costs(1,092)387 (58)(763)
Interest expense and other charges, net(24,501)(5,017)(4,769)355 (33,932)
Allowance for borrowed funds used during construction1,228 98 114 1,440 
Income before income taxes75,887 17,507 11,899 (22,580)82,713 
Income taxes9,113 3,994 2,374 15,481 
Net income66,774 13,513 9,525 (22,580)67,232 
Preferred stock dividends of subsidiaries267 191 458 
Net income attributable to Hawaiian Electric66,774 13,246 9,334 (22,580)66,774 
Preferred stock dividends of Hawaiian Electric540 540 
Net income for common stock$66,234 13,246 9,334 (22,580)$66,234 


Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Comprehensive Income
Six months ended June 30, 2020
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther subsidiariesConsolidating adjustmentsHawaiian Electric Consolidated
Net income for common stock$66,234 13,246 9,334 (22,580)$66,234 
Other comprehensive income (loss), net of taxes:
Retirement benefit plans:
Adjustment for amortization of prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits10,368 1,499 1,302 (2,801)10,368 
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes(10,317)(1,495)(1,305)2,800 (10,317)
Other comprehensive income (loss), net of taxes51 (3)(1)51 
Comprehensive income attributable to common shareholder$66,285 13,250 9,331 (22,581)$66,285 

23


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Balance Sheet
June 30, 2021
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther
subsi-
diaries
Consoli-
dating
adjustments
Hawaiian Electric
Consolidated
Assets      
Property, plant and equipment
Utility property, plant and equipment      
Land$42,412 5,606 3,594 $51,612 
Plant and equipment5,030,706 1,368,603 1,220,577 7,619,886 
Less accumulated depreciation(1,735,717)(612,065)(555,639)(2,903,421)
Construction in progress159,300 12,961 29,541 201,802 
Utility property, plant and equipment, net3,496,701 775,105 698,073 4,969,879 
Nonutility property, plant and equipment, less accumulated depreciation5,304 115 1,532 6,951 
Total property, plant and equipment, net3,502,005 775,220 699,605 4,976,830 
Investment in wholly owned subsidiaries, at equity635,296 (635,296)
Current assets      
Cash and cash equivalents17,367 3,754 2,468 77 23,666 
Restricted cash8,968 8,968 
Advances to affiliates3,800 (3,800)
Customer accounts receivable, net104,190 25,316 22,886 152,392 
Accrued unbilled revenues, net98,422 17,169 17,387 132,978 
Other accounts receivable, net13,370 4,036 4,661 (16,899)5,168 
Fuel oil stock, at average cost74,673 11,193 16,200 102,066 
Materials and supplies, at average cost42,641 10,326 19,992 72,959 
Prepayments and other25,319 4,510 2,084 31,913 
Regulatory assets47,934 3,911 8,060 59,905 
Total current assets436,684 80,215 93,738 77 (20,699)590,015 
Other long-term assets      
Operating lease right-of-use assets107,191 24,095 336 131,622 
Regulatory assets494,195 109,656 104,100 707,951 
Other110,278 18,970 18,290 (5,982)141,556 
Total other long-term assets711,664 152,721 122,726 (5,982)981,129 
Total assets$5,285,649 1,008,156 916,069 77 (661,977)$6,547,974 
Capitalization and liabilities      
Capitalization      
Common stock equity$2,171,396 322,451 312,768 77 (635,296)$2,171,396 
Cumulative preferred stock—not subject to mandatory redemption22,293 7,000 5,000 34,293 
Long-term debt, net1,176,353 246,335 253,355 1,676,043 
Total capitalization3,370,042 575,786 571,123 77 (635,296)3,881,732 
Current liabilities      
Current portion of operating lease liabilities64,725 3,331 34 68,090 
Short-term borrowings from non-affiliates37,999 37,999 
Short-term borrowings from affiliate3,100 700 (3,800)
Accounts payable90,840 18,624 22,169 131,633 
Interest and preferred dividends payable12,801 2,694 2,333 (1)17,827 
Taxes accrued, including revenue taxes122,268 27,743 25,803 175,814 
Regulatory liabilities18,306 5,653 7,754 31,713 
Other50,487 11,508 16,004 — (17,048)60,951 
Total current liabilities397,426 72,653 74,797 (20,849)524,027 
Deferred credits and other liabilities      
Operating lease liabilities54,992 20,764 310 76,066 
Deferred income taxes280,920 53,115 59,240 393,275 
Regulatory liabilities666,554 175,771 92,439 934,764 
Unamortized tax credits79,867 14,890 13,529 108,286 
Defined benefit pension and other postretirement benefit plans liability367,530 75,010 77,367 (5,832)514,075 
Other68,318 20,167 27,264 115,749 
Total deferred credits and other liabilities1,518,181 359,717 270,149 (5,832)2,142,215 
Total capitalization and liabilities$5,285,649 1,008,156 916,069 77 (661,977)$6,547,974 

24


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Balance Sheet
December 31, 2020
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther
subsi-diaries
Consoli-
dating
adjustments
Hawaiian Electric
Consolidated
Assets      
Property, plant and equipment
Utility property, plant and equipment      
Land$42,411 5,606 3,594 $51,611 
Plant and equipment4,960,470 1,352,885 1,195,988 7,509,343 
Less accumulated depreciation(1,677,256)(597,606)(544,217)(2,819,079)
Construction in progress143,616 13,043 31,683 188,342 
Utility property, plant and equipment, net3,469,241 773,928 687,048 4,930,217 
Nonutility property, plant and equipment, less accumulated depreciation5,306 115 1,532 6,953 
Total property, plant and equipment, net3,474,547 774,043 688,580 4,937,170 
Investment in wholly owned subsidiaries, at equity
626,890 (626,890)
Current assets      
Cash and cash equivalents42,205 3,046 2,032 77 47,360 
Restricted cash15,966 15,966 
Advances to affiliates26,700 (26,700)
Customer accounts receivable, net102,736 23,989 21,107 147,832 
Accrued unbilled revenues, net73,628 13,631 13,777 101,036 
Other accounts receivable, net17,984 3,028 2,856 (16,195)7,673 
Fuel oil stock, at average cost38,777 8,471 10,990 58,238 
Materials and supplies, at average cost38,786 9,896 18,662 67,344 
Prepayments and other34,306 5,197 4,580 44,083 
Regulatory assets22,095 1,954 6,386 30,435 
Total current assets413,183 69,212 80,390 77 (42,895)519,967 
Other long-term assets      
Operating lease right-of-use assets125,858 1,443 353 127,654 
Regulatory assets513,192 114,461 108,620 736,273 
Other98,307 17,992 20,010 136,309 
Total other long-term assets737,357 133,896 128,983 1,000,236 
Total assets$5,251,977 977,151 897,953 77 (669,785)$6,457,373 
Capitalization and liabilities      
Capitalization
Common stock equity$2,141,918 317,451 309,363 77 (626,891)$2,141,918 
Cumulative preferred stock—not subject to mandatory redemption22,293 7,000 5,000 34,293 
Long-term debt, net1,116,426 216,447 228,429 1,561,302 
Total capitalization3,280,637 540,898 542,792 77 (626,891)3,737,513 
Current liabilities     
Current portion of operating lease liabilities64,599 98 33 64,730 
Short-term borrowings-non-affiliate49,979 49,979 
Short-term borrowings-affiliate18,800 7,900 (26,700)
Accounts payable97,102 19,570 17,177 133,849 
Interest and preferred dividends payable14,480 3,138 2,790 (58)20,350 
Taxes accrued, including revenue taxes135,018 29,869 27,637 192,524 
Regulatory liabilities20,224 8,785 8,292 37,301 
Other57,926 13,851 18,621 (16,136)74,262 
Total current liabilities439,328 94,111 82,450 (42,894)572,995 
Deferred credits and other liabilities     
Operating lease liabilities67,824 1,344 326 69,494 
Deferred income taxes282,685 54,108 61,005 397,798 
Regulatory liabilities656,270 173,938 92,277 922,485 
Unamortized tax credits82,563 15,363 13,989 111,915 
Defined benefit pension and other postretirement benefit plans liability373,112 77,679 79,741 530,532 
Other69,558 19,710 25,373 114,641 
Total deferred credits and other liabilities1,532,012 342,142 272,711 2,146,865 
Total capitalization and liabilities$5,251,977 977,151 897,953 77 (669,785)$6,457,373 

25


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)

Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Changes in Common Stock Equity
Six months ended June 30, 2021
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther
subsidiaries
Consolidating
adjustments
Hawaiian Electric
Consolidated
Balance, December 31, 2020$2,141,918 317,451 309,363 77 (626,891)$2,141,918 
Net income for common stock85,259 12,299 10,955 — (23,254)85,259 
Other comprehensive income, net of taxes69 — — (1)69 
Common stock dividends(55,850)(7,300)(7,550)— 14,850 (55,850)
Balance, June 30, 2021$2,171,396 322,451 312,768 77 (635,296)$2,171,396 
 
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Changes in Common Stock Equity
Six months ended June 30, 2020
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther
subsidiaries
Consolidating
adjustments
Hawaiian Electric
Consolidated
Balance, December 31, 2019$2,047,352 298,998 292,870 101 (591,969)$2,047,352 
Net income for common stock66,234 13,246 9,334 — (22,580)66,234 
Other comprehensive income (loss), net of taxes51 (3)— (1)51 
Common stock dividends(53,568)(8,160)(7,192)— 15,352 (53,568)
Balance, June 30, 2020$2,060,069 304,088 295,009 101 (599,198)$2,060,069 

26


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)

Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Cash Flows
Six months ended June 30, 2021
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther
subsidiaries
Consolidating
adjustments
Hawaiian Electric
Consolidated
Net cash provided by operating activities$43,623 15,315 13,365 (14,850)$57,453 
Cash flows from investing activities      
Capital expenditures(92,352)(22,135)(23,538)(138,025)
Advances from affiliates22,900 (22,900)
Other3,087 911 672 4,670 
Net cash used in investing activities(66,365)(21,224)(22,866)(22,900)(133,355)
Cash flows from financing activities      
Common stock dividends(55,850)(7,300)(7,550)14,850 (55,850)
Preferred stock dividends of Hawaiian Electric and subsidiaries(540)(267)(191)(998)
Repayment of short-term debt(50,000)(50,000)
Proceeds from issuance of long-term debt60,000 30,000 25,000 115,000 
Net increase (decrease) in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less37,999 (15,700)(7,200)22,900 37,999 
Other(703)(116)(122)(941)
Net cash provided by (used in) financing activities(9,094)6,617 9,937 37,750 45,210 
Net increase (decrease) in cash and cash equivalents(31,836)708 436 (30,692)
Cash, cash equivalents and restricted cash, beginning of period58,171 3,046 2,032 77 63,326 
Cash, cash equivalents and restricted cash, end of period26,335 3,754 2,468 77 32,634 
Less: Restricted cash(8,968)(8,968)
Cash and cash equivalents, end of period$17,367 3,754 2,468 77 $23,666 

27


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)

Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Cash Flows
Six months ended June 30, 2020
(in thousands)Hawaiian ElectricHawaii Electric LightMaui ElectricOther
subsidiaries
Consolidating
adjustments
Hawaiian Electric
Consolidated
Net cash provided by operating activities$154,967 20,307 21,601 (15,407)$181,468 
Cash flows from investing activities     
Capital expenditures(129,829)(30,785)(25,918)(186,532)
Advances from affiliates14,200 8,000 (22,200)
Other4,354 552 480 55 5,441 
Net cash used in investing activities(111,275)(22,233)(25,438)(22,145)(181,091)
Cash flows from financing activities     
Common stock dividends(53,568)(8,160)(7,192)15,352 (53,568)
Preferred stock dividends of Hawaiian Electric and subsidiaries(540)(267)(191)(998)
Proceeds from issuance of short-term debt100,000 100,000 
Repayment of short-term debt(100,000)(100,000)
Proceeds from issuance of long-term debt205,000 10,000 40,000 255,000 
Repayment of long-term debt and funds transferred for repayment of long-term debt(95,000)(14,000)(109,000)
Net increase (decrease) in short-term borrowings from non-affiliates and affiliate with original maturities of three months or less(46,987)12,000 (26,200)22,200 (38,987)
Other(1,039)(61)(247)(1,347)
Net cash provided by (used in) financing activities7,866 (488)6,170 37,552 51,100 
Net increase (decrease) in cash and cash equivalents51,558 (2,414)2,333 51,477 
Cash, cash equivalents and restricted cash, beginning of period32,988 7,008 1,797 101 41,894 
Cash, cash equivalents and restricted cash, end of period84,546 4,594 4,130 101 93,371 
Less: Restricted cash(29,376)(29,376)
Cash and cash equivalents, end of period$55,170 4,594 4,130 101 $63,995 

28


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)
Note 4 · Bank segment
Selected financial information
American Savings Bank, F.S.B.
Statements of Income and Comprehensive Income Data
 Three months ended June 30Six months ended June 30
(in thousands)2021202020212020
Interest and dividend income    
Interest and fees on loans$51,026 $53,541 $100,973 $109,086 
Interest and dividends on investment securities11,040 6,288 19,713 15,718 
Total interest and dividend income62,066 59,829 120,686 124,804 
Interest expense    
Interest on deposit liabilities1,281 3,071 2,743 6,658 
Interest on other borrowings23 75 50 388 
Total interest expense1,304 3,146 2,793 7,046 
Net interest income60,762 56,683 117,893 117,758 
Provision for credit losses(12,207)15,133 (20,642)25,534 
Net interest income after provision for credit losses72,969 41,550 138,535 92,224 
Noninterest income    
Fees from other financial services5,464 3,102 10,537 7,673 
Fee income on deposit liabilities3,904 2,897 7,767 8,010 
Fee income on other financial products2,201 1,212 4,643 3,084 
Bank-owned life insurance1,624 1,673 4,185 2,467 
Mortgage banking income1,925 6,252 6,225 8,252 
Gain on sale of investment securities, net9,275 528 9,275 
Other income, net76 (251)348 162 
Total noninterest income15,194 24,160 34,233 38,923 
Noninterest expense    
Compensation and employee benefits27,670 25,079 55,707 50,856 
Occupancy5,100 5,442 10,069 10,709 
Data processing4,533 3,849 8,884 7,686 
Services2,475 2,474 5,337 5,283 
Equipment2,394 2,290 4,616 4,629 
Office supplies, printing and postage978 1,049 2,022 2,390 
Marketing665 379 1,313 1,181 
FDIC insurance788 751 1,604 853 
Other expense1
3,568 7,063 6,122 11,257 
Total noninterest expense48,171 48,376 95,674 94,844 
Income before income taxes39,992 17,334 77,094 36,303 
Income taxes9,708 3,320 17,254 6,528 
Net income30,284 14,014 59,840 29,775 
Other comprehensive income (loss), net of taxes16,999 (280)(28,755)19,567 
Comprehensive income$47,283 $13,734 $31,085 $49,342 

1 The three- and six-month periods ended June 30, 2021 include approximately $0.1 million and $0.4 million, respectively, of certain direct and incremental COVID-19 related costs. The three- and six-month periods ended June 30, 2020 include approximately $3.7 million and $3.8 million, respectively, of certain significant direct and incremental COVID-19 related costs. These costs for the first six months of 2020, which have been recorded in Other expense, include $2.3 million of compensation expense and $1.1 million of enhanced cleaning and sanitation costs.
29


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)

Reconciliation to amounts per HEI Condensed Consolidated Statements of Income*:
 Three months ended June 30,Six months ended June 30
(in thousands)2021202020212020
Interest and dividend income$62,066 $59,829 $120,686 $124,804 
Noninterest income15,194 24,160 34,233 38,923 
Less: Gain on sale of investment securities, net9,275 528 9,275 
*Revenues-Bank77,260 74,714 154,391 154,452 
Total interest expense1,304 3,146 2,793 7,046 
Provision for credit losses(12,207)15,133 (20,642)25,534 
Noninterest expense48,171 48,376 95,674 94,844 
Less: Retirement defined benefits expense (credit)—other than service costs(186)434 (1,464)868 
*Expenses-Bank37,454 66,221 79,289 126,556 
*Operating income-Bank39,806 8,493 75,102 27,896 
Add back: Retirement defined benefits expense (credit)—other than service costs(186)434 (1,464)868 
Add back: Gain on sale of investment securities, net9,275 528 9,275 
Income before income taxes$39,992 $17,334 $77,094 $36,303 


30


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)
American Savings Bank, F.S.B.
Balance Sheets Data
(in thousands)June 30, 2021December 31, 2020
Assets    
Cash and due from banks $115,567  $178,422 
Interest-bearing deposits105,800 114,304 
Cash and cash equivalents221,367 292,726 
Investment securities
Available-for-sale, at fair value 2,509,906  1,970,417 
Held-to-maturity, at amortized cost (fair value of $374,141 and $229,963, respectively)375,655 226,947 
Stock in Federal Home Loan Bank, at cost 10,000  8,680 
Loans held for investment 5,184,459  5,333,843 
Allowance for credit losses (78,252) (101,201)
Net loans 5,106,207  5,232,642 
Loans held for sale, at lower of cost or fair value 50,877  28,275 
Other 553,702  554,656 
Goodwill 82,190  82,190 
Total assets $8,909,904  $8,396,533 
Liabilities and shareholder’s equity    
Deposit liabilities—noninterest-bearing $2,868,770  $2,598,500 
Deposit liabilities—interest-bearing 5,004,660  4,788,457 
Other borrowings 129,665  89,670 
Other 166,419  183,731 
Total liabilities 8,169,514  7,660,358 
Commitments and contingencies 0 0
Common stock  
Additional paid-in capital352,888 351,758 
Retained earnings 401,310  369,470 
Accumulated other comprehensive income (loss), net of taxes    
Net unrealized gains (losses) on securities$(8,815) $19,986 
Retirement benefit plans(4,994)(13,809)(5,040)14,946 
Total shareholder’s equity740,390  736,175 
Total liabilities and shareholder’s equity $8,909,904  $8,396,533 
Other assets    
Bank-owned life insurance $164,453  $163,265 
Premises and equipment, net 205,917  206,134 
Accrued interest receivable 23,064  24,616 
Mortgage-servicing rights 10,754  10,020 
Low-income housing investments87,371 83,435 
Other 62,143  67,186 
  $553,702  $554,656 
Other liabilities    
Accrued expenses $61,156  $62,694 
Federal and state income taxes payable 1,508  6,582 
Cashier’s checks 30,818  38,011 
Advance payments by borrowers 10,374  10,207 
Other 62,563  66,237 
  $166,419  $183,731 
    
31


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)
Bank-owned life insurance is life insurance purchased by ASB on the lives of certain key employees, with ASB as the beneficiary. The insurance is used to fund employee benefits through tax-free income from increases in the cash value of the policies and insurance proceeds paid to ASB upon an insured’s death.
Other borrowings consisted of securities sold under agreements to repurchase of $129.7 million and $89.7 million at June 30, 2021 and December 31, 2020, respectively.
Investment securities.  The major components of investment securities were as follows:
 Amortized costGross unrealized gainsGross unrealized lossesEstimated fair
value
Gross unrealized losses
 Less than 12 months12 months or longer
(dollars in thousands)Number of issuesFair 
value
AmountNumber of issuesFair 
value
Amount
June 30, 2021        
Available-for-sale
U.S. Treasury and federal agency obligations$94,716 $1,612 $(19)$96,309 $19,920 $(19)$$
Mortgage-backed securities*2,381,062 15,932 (30,693)2,366,301 76 1,301,202 (30,679)771 (14)
Corporate bonds30,743 1,126 31,869 
Mortgage revenue bonds15,427 15,427 
 $2,521,948 $18,670 $(30,712)$2,509,906 77 $1,321,122 $(30,698)$771 $(14)
Held-to-maturity
U.S. Treasury and Federal agency obligations$40,065 $316 $$40,381 $$$$
Mortgage-backed securities*335,590 3,463 (5,293)333,760 14 191,612 (5,293)
 $375,655 $3,779 $(5,293)$374,141 14 $191,612 $(5,293)$$
December 31, 2020
Available-for-sale
U.S. Treasury and federal agency obligations$60,260 $2,062 $$62,322 $$$$
Mortgage-backed securities*1,825,893 26,817 (3,151)1,849,559 22 373,924 (3,151)
Corporate bonds29,776 1,575 31,351 
Mortgage revenue bonds27,185 27,185 
 $1,943,114 $30,454 $(3,151)$1,970,417 22 $373,924 $(3,151)$$
Held-to-maturity
Mortgage-backed securities*$226,947 $3,846 $(830)$229,963 $114,152 $(830)$$
 $226,947 $3,846 $(830)$229,963 $114,152 $(830)$$
* Issued or guaranteed by U.S. Government agencies or sponsored agencies
ASB does not believe that the investment securities that were in an unrealized loss position at June 30, 2021 and December 31, 2020, represent a credit loss. Total gross unrealized losses were primarily attributable to change in market conditions. On a quarterly basis the investment securities are evaluated for changes in financial condition of the issuer. Based upon ASB’s evaluation, all securities held within the investment portfolio continue to be investment grade by one or more agencies. The contractual cash flows of the U.S. Treasury, federal agency obligations and agency mortgage-backed securities are backed by the full faith and credit guaranty of the United States government or an agency of the government. ASB does not intend to sell the securities before the recovery of its amortized cost basis and there have been no adverse changes in the timing of the contractual cash flows for the securities. ASB’s investment securities portfolio did not require an allowance for credit losses at June 30, 2021 and December 31, 2020.
U.S. Treasury, federal agency obligations, corporate bonds, and mortgage revenue bonds have contractual terms to maturity. Mortgage-backed securities have contractual terms to maturity, but require periodic payments to reduce principal. In addition, expected maturities will differ from contractual maturities because borrowers have the right to prepay the underlying mortgages.
32


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)
The contractual maturities of investment securities were as follows:
June 30, 2021Amortized costFair value
(in thousands)  
Available-for-sale
Due in one year or less$$
Due after one year through five years79,832 81,989 
Due after five years through ten years45,627 46,189 
Due after ten years15,427 15,427 
 140,886 143,605 
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies2,381,062 2,366,301 
Total available-for-sale securities$2,521,948 $2,509,906 
Held-to-maturity
Due in one year or less$$
Due after one year through five years
Due after five years through ten years40,065 40,381 
Due after ten years
40,065 40,381 
Mortgage-backed securities — issued or guaranteed by U.S. Government agencies or sponsored agencies335,590 333,760 
Total held-to-maturity securities$375,655 $374,141 
The proceeds, gross gains and losses from sales of available-for-sale securities were as follows:
Three months ended June 30Six months ended June 30
2021202020212020
(in thousands)
Proceeds$$169,157 $197,354 $169,157 
Gross gains9,312 975 9,312 
Gross losses37 447 37 
Tax expense on realized gains2,492 142 2,492 
The components of loans were summarized as follows:
June 30, 2021December 31, 2020
(in thousands)  
Real estate:  
Residential 1-4 family$2,122,873 $2,144,239 
Commercial real estate1,071,716 983,865 
Home equity line of credit870,182 963,578 
Residential land18,865 15,617 
Commercial construction115,625 121,424 
Residential construction10,574 11,022 
Total real estate4,209,835 4,239,745 
Commercial856,336 936,748 
Consumer132,855 168,733 
Total loans5,199,026 5,345,226 
Less: Deferred fees and discounts(14,567)(11,383)
          Allowance for credit losses(78,252)(101,201)
Total loans, net$5,106,207 $5,232,642 
ASB's policy is to require private mortgage insurance on all real estate loans when the loan-to-value ratio of the property exceeds 80% of the lower of the appraised value or purchase price at origination. For non-owner occupied residential
33


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)
property purchases, the loan-to-value ratio may not exceed 75% of the lower of the appraised value or purchase price at origination.
Allowance for credit losses. The allowance for credit losses (balances and changes) by portfolio segment were as follows:
(in thousands)Residential
1-4 family
Commercial real
estate
Home
equity line of credit
Residential landCommercial constructionResidential constructionCommercial loansConsumer loansTotal
Three months ended June 30, 2021        
Allowance for credit losses:         
Beginning balance$5,261 $34,345 $5,901 $573 $1,453 $16 $24,504 $19,740 $91,793 
Charge-offs(20)10 (319)(1,931)(2,260)
Recoveries51 61 11 366 1,187 1,676 
Provision226 (5,637)(637)34 176 (4,493)(2,626)(12,957)
Ending balance$5,518 $28,708 $5,335 $618 $1,629 $16 $20,058 $16,370 $78,252 
Three months ended June 30, 2020        
Allowance for credit losses:         
Beginning balance$4,476 $16,587 $6,225 $352 $3,446 $14 $12,977 $33,007 $77,084 
Charge-offs(7)(343)(699)(6,331)(7,380)
Recoveries106 657 770 
Provision(560)4,513 (11)342 1,311 1,484 3,754 10,833 
Ending balance$3,911 $21,100 $6,214 $356 $4,757 $14 $13,868 $31,087 $81,307 
Six months ended June 30, 2021        
Allowance for credit losses:         
Beginning balance$4,600 $35,607 $6,813 $609 $4,149 $11 $25,462 $23,950 $101,201 
Charge-offs(20)(40)(1,090)(4,791)(5,941)
Recoveries54 76 21 639 2,194 2,984 
Provision884 (6,899)(1,514)(12)(2,520)(4,953)(4,983)(19,992)
Ending balance$5,518 $28,708 $5,335 $618 $1,629 $16 $20,058 $16,370 $78,252 
Six months ended June 30, 2020        
Allowance for credit losses:         
Beginning balance, prior to adoption of ASU No. 2016-13$2,380 $15,053 $6,922 $449 $2,097 $$10,245 $16,206 $53,355 
Impact of adopting ASU No. 2016-132,150 208 (541)(64)289 14 922 16,463 19,441 
Charge-offs(7)(351)(1,068)(12,585)(14,011)
Recoveries55 14 292 1,421 1,788 
Provision(667)5,839 (173)308 2,371 (3)3,477 9,582 20,734 
Ending balance$3,911 $21,100 $6,214 $356 $4,757 $14 $13,868 $31,087 $81,307 

34


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)
Allowance for loan commitments. The allowance for loan commitments by portfolio segment were as follows:
(in thousands)Home equity
 line of credit
Commercial constructionCommercial loansTotal
Three months ended June 30, 2021
Allowance for loan commitments:
Beginning balance$400 $1,300 $1,200 $2,900 
Provision1,100 (350)750 
Ending balance$400 $2,400 $850 $3,650 
Three months ended June 30, 2020
Allowance for loan commitments:
Beginning balance$300 $3,191 $309 $3,800 
Provision4,309 (9)4,300 
Ending balance$300 $7,500 $300 $8,100 
Six months ended June 30, 2021
Allowance for loan commitments:
Beginning balance$300 $3,000 $1,000 $4,300 
Provision100 (600)(150)(650)
Ending balance$400 $2,400 $850 $3,650 
Six months ended June 30, 2020
Allowance for loan commitments:
Beginning balance, prior to adoption of ASU No. 2016-13$392 $931 $418 $1,741 
Impact of adopting ASU No. 2016-13(92)1,745 (94)1,559 
Provision4,824 (24)4,800 
Ending balance$300 $7,500 $300 $8,100 
Credit quality.  ASB performs an internal loan review and grading on an ongoing basis. The review provides management with periodic information as to the quality of the loan portfolio and effectiveness of its lending policies and procedures. The objectives of the loan review and grading procedures are to identify, in a timely manner, existing or emerging credit trends so that appropriate steps can be initiated to manage risk and avoid or minimize future losses. Loans subject to grading include commercial, commercial real estate and commercial construction loans.
Each commercial and commercial real estate loan is assigned an Asset Quality Rating (AQR) reflecting the likelihood of repayment or orderly liquidation of that loan transaction pursuant to regulatory credit classifications:  Pass, Special Mention, Substandard, Doubtful, and Loss. The AQR is a function of the probability of default model rating, the loss given default, and possible non-model factors which impact the ultimate collectability of the loan such as character of the business owner/guarantor, interim period performance, litigation, tax liens and major changes in business and economic conditions. Pass exposures generally are well protected by the current net worth and paying capacity of the obligor or by the value of the asset or underlying collateral. Special Mention loans have potential weaknesses that, if left uncorrected, could jeopardize the liquidation of the debt. Substandard loans have well-defined weaknesses that jeopardize the liquidation of the debt and are characterized by the distinct possibility that ASB may sustain some loss. An asset classified Doubtful has the weaknesses of those classified Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. An asset classified Loss is considered uncollectible and has such little value that its continuance as a bankable asset is not warranted.
35


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)
The credit risk profile by vintage date based on payment activity or internally assigned grade for loans was as follows:
Term Loans by Origination YearRevolving Loans
(in thousands)20212020201920182017PriorRevolvingConverted to term loansTotal
June 30, 2021
Residential 1-4 family
Current$362,487 $492,182 $166,552 $85,279 $157,993 $844,110 $$$2,108,603 
30-59 days past due278 2,920 3,198 
60-89 days past due1,813 1,813 
Greater than 89 days past due3,960 430 4,869 9,259 
362,487 492,460 170,512 85,709 157,993 853,712 2,122,873 
Home equity line of credit
Current829,421 38,267 867,688 
30-59 days past due484 397 881 
60-89 days past due104 104 
Greater than 89 days past due1,035 474 1,509 
831,044 39,138 870,182 
Residential land
Current5,586 8,055 2,524 892 523 289 17,869 
30-59 days past due
60-89 days past due696 696 
Greater than 89 days past due300 300 
5,586 8,055 2,524 892 523 1,285 18,865 
Residential construction
Current2,148 5,264 2,883 279 10,574 
30-59 days past due
60-89 days past due
Greater than 89 days past due
2,148 5,264 2,883 279 10,574 
Consumer
Current15,289 21,974 48,127 22,699 2,138 356 14,764 4,027 129,374 
30-59 days past due172 139 558 349 77 157 76 1,528 
60-89 days past due85 443 319 63 62 51 1,023 
Greater than 89 days past due100 308 248 44 106 124 930 
15,461 22,298 49,436 23,615 2,322 356 15,089 4,278 132,855 
Commercial real estate
Pass90,683 280,206 68,625 64,694 31,668 255,806 11,000 802,682 
Special Mention1,360 4,254 29,642 53,347 47,653 61,926 198,182 
Substandard14,098 1,883 1,859 53,012 70,852 
Doubtful
92,043 284,460 112,365 119,924 81,180 370,744 11,000 1,071,716 
Commercial construction
Pass10,260 30,287 31,553 11,342 28,698 112,140 
Special Mention650 2,835 3,485 
Substandard
Doubtful
10,910 33,122 31,553 11,342 28,698 115,625 
Commercial
Pass199,625 182,533 87,875 60,800 21,238 50,243 97,465 17,412 717,191 
Special Mention58 35,160 12,433 448 6,204 29,376 25,297 23 108,999 
Substandard244 7,309 1,915 3,135 9,075 6,677 1,791 30,146 
Doubtful
199,683 217,937 107,617 63,163 30,577 88,694 129,439 19,226 856,336 
Total loans$688,318 $1,063,596 $476,890 $304,645 $272,874 $1,314,791 $1,015,270 $62,642 $5,199,026 
36


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)
Term Loans by Origination YearRevolving Loans
(in thousands)20202019201820172016PriorRevolvingConverted to term loansTotal
December 31, 2020
Residential 1-4 family
Current$567,282 $218,988 $111,243 $203,916 $184,888 $849,788 $$$2,136,105 
30-59 days past due2,629 2,629 
60-89 days past due476 2,314 2,790 
Greater than 89 days past due353 2,362 2,715 
567,282 219,464 111,243 204,269 184,888 857,093 2,144,239 
Home equity line of credit
Current927,106 33,228 960,334 
30-59 days past due552 298 850 
60-89 days past due267 75 342 
Greater than 89 days past due1,463 589 2,052 
929,388 34,190 963,578 
Residential land
Current8,357 3,427 1,598 939 22 272 14,615 
30-59 days past due702 702 
60-89 days past due
Greater than 89 days past due300 300 
8,357 3,427 1,598 939 22 1,274 15,617 
Residential construction
Current6,919 3,093 385 625 11,022 
30-59 days past due
60-89 days past due
Greater than 89 days past due
6,919 3,093 385 625 11,022 
Consumer
Current28,818 67,159 37,072 7,207 293 348 18,351 3,758 163,006 
30-59 days past due406 1,085 727 155 138 90 2,605 
60-89 days past due191 549 427 165 97 59 1,491 
Greater than 89 days past due131 532 409 119 262 171 1,631 
29,546 69,325 38,635 7,646 307 348 18,848 4,078 168,733 
Commercial real estate
Pass270,603 63,301 62,168 28,432 55,089 155,654 11,000 646,247 
Special Mention10,261 36,405 57,952 33,763 68,287 48,094 254,762 
Substandard14,720 4,181 1,892 4,423 57,640 82,856 
Doubtful
280,864 114,426 124,301 64,087 127,799 261,388 11,000 983,865 
Commercial construction
Pass14,480 31,965 26,990 5,562 22,517 101,514 
Special Mention1,910 18,000 19,910 
Substandard
Doubtful
16,390 31,965 26,990 18,000 5,562 22,517 121,424 
Commercial
Pass392,088 117,791 75,533 29,211 12,520 35,770 74,520 11,004 748,437 
Special Mention37,836 23,087 1,920 6,990 30,264 13,250 31,362 11,218 155,927 
Substandard304 7,785 2,043 4,017 7,542 3,113 5,265 1,928 31,997 
Doubtful387 387 
430,228 148,663 79,496 40,218 50,326 52,133 111,534 24,150 936,748 
Total loans$1,339,586 $590,363 $382,648 $335,784 $368,904 $1,172,236 $1,093,287 $62,418 $5,345,226 
37


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited)
Revolving loans converted to term loans during the six months ended June 30, 2021 in the commercial, home equity line of credit and consumer portfolios were $0.6 million, $9.8 million and $1.5 million, respectively. Revolving loans converted to term loans during the six months ended June 30, 2020 in the commercial, home equity line of credit and consumer portfolios were $13.7 million, $8.7 million and $1.4 million, respectively.
The credit risk profile based on payment activity for loans was as follows:
(in thousands)30-59
days
past due
60-89
days
past due
 
Greater than
90 days
Total
past due
CurrentTotal
financing
receivables
Amortized cost>
90 days and
accruing
June 30, 2021       
Real estate:       
Residential 1-4 family$3,198 $1,813 $9,259 $14,270 $2,108,603 $2,122,873 $
Commercial real estate170 170 1,071,546 1,071,716 
Home equity line of credit881 104 1,509 2,494 867,688 870,182 
Residential land696 300 996 17,869 18,865 
Commercial construction115,625 115,625 
Residential construction10,574 10,574 
Commercial298 224 116 638 855,698 856,336 
Consumer1,528 1,023 930 3,481 129,374 132,855 
Total loans$5,905 $3,860 $12,284 $22,049 $5,176,977 $5,199,026 $
December 31, 2020       
Real estate:       
Residential 1-4 family$2,629 $2,790 $2,715 $8,134 $2,136,105 $2,144,239 $
Commercial real estate488 488 983,377 983,865 
Home equity line of credit850 342 2,052 3,244 960,334 963,578 
Residential land702 300 1,002 14,615 15,617 
Commercial construction121,424 121,424 
Residential construction11,022 11,022 
Commercial608 300 132 1,040 935,708 936,748 
Consumer2,605 1,491 1,631 5,727 163,006 168,733 
Total loans$7,394 $5,411 $6,830 $19,635 $5,325,591 $5,345,226 $

The credit risk profile based on nonaccrual loans were as follows: