HAWAIIAN ELECTRIC INDUSTRIES INCHE
HAWAIIAN ELECTRIC INDUSTRIES INC Fair Value Disclosure
Note 17 · Fair value measurements | ||
Fair value measurement and disclosure valuation methodology. The following are descriptions of the valuation methodologies used for assets and liabilities recorded at fair value and for estimating fair value for financial instruments not carried at fair value:
Money market mutual funds. The Company considers all liquid investments purchased with an initial maturity of three months or less and deposits in money market mutual funds that are readily convertible into cash to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value due to the short-term nature of these instruments.
Short-term borrowings. The carrying amount of short-term borrowings approximated fair value because of the short maturity of these instruments.
Long-term debt. Fair value of fixed-rate long-term debt was obtained from third-party financial services providers based on the current rates offered for debt of the same or similar remaining maturities and from discounting the future cash flows using the current rates offered for debt of the same or similar risks, terms, and remaining maturities. The carrying amount of floating rate long-term debt approximated fair value because of the short-term interest reset periods. Long-term debt is classified in Level 2 of the valuation hierarchy.
Interest rate swaps. The Company measures its interest rate swaps at fair value. The fair values of the Company's interest rate swaps are based on the estimated amounts that the Company would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and interest rate related observable inputs. The fair values of the Company's interest rate swaps are classified as a Level 2 measurements.
The sale of solar and BESS facilities (See Note 3) included variable interest rate debt assumed by the buyer as part of the transaction. As a result of the sale, the interest rate swap agreements that had been designated as cash flow hedges of interest payments were terminated. The derivatives had a notional amount of $28 million and a fair value of $1.0 million at termination. $0.8 million, net of taxes, was reclassified from other comprehensive income to earnings. The terminated swaps were previously classified as Level 2 instruments under the fair value hierarchy. Derivatives measured at fair value on a recurring basis were previously included in “Other noncurrent assets” and “Other noncurrent liabilities” in the Consolidated Balance Sheets.
The following table presents the carrying or notional amount, fair value and placement in the fair value hierarchy of the Company’s financial instruments.
| Estimated fair value | |||||||||||||||||||||||
| (in thousands) | Carrying or notional amount | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Total | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Financial assets | |||||||||||||||||||||||
| HEI consolidated | |||||||||||||||||||||||
| Money market mutual funds | $ | 839,380 | $ | 839,380 | $ | — | $ | 839,380 | |||||||||||||||
| Hawaiian Electric consolidated | |||||||||||||||||||||||
Money market mutual funds | 345,510 | 345,510 | — | 345,510 | |||||||||||||||||||
| Financial liabilities | |||||||||||||||||||||||
| HEI consolidated | |||||||||||||||||||||||
Long-term debt, net1 | 2,409,975 | — | 2,098,593 | 2,098,593 | |||||||||||||||||||
| Hawaiian Electric consolidated | |||||||||||||||||||||||
Long-term debt, net | 2,182,833 | — | 1,895,680 | 1,895,680 | |||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Financial assets | |||||||||||||||||||||||
| HEI consolidated | |||||||||||||||||||||||
Money market mutual funds | $ | 1,162,259 | $ | 1,162,259 | $ | — | $ | 1,162,259 | |||||||||||||||
| 29,312 | — | 1,629 | 1,629 | ||||||||||||||||||||
| Hawaiian Electric consolidated | |||||||||||||||||||||||
Money market mutual funds | 115,599 | 115,599 | — | 115,599 | |||||||||||||||||||
| Financial liabilities | |||||||||||||||||||||||
| HEI consolidated | |||||||||||||||||||||||
Short-term borrowings | 48,623 | — | 48,623 | 48,623 | |||||||||||||||||||
Long-term debt, net | 2,799,558 | — | 2,196,403 | 2,196,403 | |||||||||||||||||||
| Hawaiian Electric consolidated | |||||||||||||||||||||||
Short-term borrowings | 48,623 | — | 48,623 | 48,623 | |||||||||||||||||||
Long-term debt, net | 1,901,214 | — | 1,446,316 | 1,446,316 | |||||||||||||||||||
1 Carrying or notional amount does not include $51.6 million related to Mahipapa long term debt, net which is included in liabilities held for sale as of December 31, 2025. See Note 3 for more information.
2 Amounts relate to derivatives which were included in Pacific Current’s Solar Asset Disposition. See Note 3 for more information.
Assets and liabilities measured at fair value on a recurring basis include money market mutual funds and derivative assets as included in the table above. Money market mutual funds are included in “Cash and cash equivalents” and “Restricted cash” in the Consolidated Balance Sheets. Derivatives assets are included in “Other noncurrent assets” in the Consolidated Balance Sheets.
There were no transfers of financial assets and liabilities between Level 1 and Level 2 of the fair value hierarchy during the years ended December 31, 2025 and 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 23, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.