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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 23, 2002
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Exact Name of Registrant Commission I.R.S. Employer
as Specified in Its Charter File Number Identification No.
--------------------------- ----------- ------------------
Hawaiian Electric Industries, Inc. 1-8503 99-0208097
Hawaiian Electric Company, Inc. 1-4955 99-0040500
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State of Hawaii
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(State or other jurisdiction of incorporation)
900 Richards Street, Honolulu, Hawaii 96813
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(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(808) 543-5662 - Hawaiian Electric Industries, Inc. (HEI)
(808) 543-7771 - Hawaiian Electric Company, Inc. (HECO)
None
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
News release
------------
On January 23, 2002, HEI issued the following news release:
HAWAIIAN ELECTRIC INDUSTRIES, INC. ANNOUNCES 2001 YEAREND EARNINGS
HONOLULU -- Hawaiian Electric Industries, Inc. (HEI) (NYSE - HE) announced
2001 net income from continuing operations of $107.7 million, or $3.19 per share
compared with $109.3 million, or $3.36 per share for 2000. The Company's net
income from continuing operations reflect strong results from the electric
utilities and bank, offset by investment losses at the holding company.
"The downturn in Hawaii tourism post-September 11 continues to present
challenges to maintaining earnings. We managed to meet these challenges in 2001
through cost containment efforts at the utility and active asset and liability
management at the bank," said Robert F. Clarke, HEI chairman, president and
chief executive officer.
Utility net income was up 1.2% to $88.3 million for 2001 from $87.3 million
for 2000. "An increase in kilowatthour sales pre-September 11, a concerted
effort to contain costs and continued productivity improvements helped the
utility increase earnings in 2001," said Clarke.
Kilowatthour sales were up 1.1% in 2001 compared with 2000 largely due to
warmer weather and a growing state economy pre-September 11. "Looking forward,
we anticipate kilowatthour sales will increase by 1.1% in 2002, slightly greater
than the growth in the state economy, which local economists expect will be
about 0.6%. Supporting our outlook is the recent rebound in visitor counts,
which have increased to approximately 90% of prior year levels as of December
31, 2001," said Clarke.
Purchased power costs were up in 2001 due to greater availability of
purchased power in the supply mix as a result of shorter overhaul schedules and
maintenance downtime by independent power producers. However, maintenance
expenses were lower in 2001 due to ongoing cost management and completion of
reliability improvements in 2000.
American Savings Bank posted solid results this year with net income
growing 19.4% to $48.5 million versus $40.6 million in 2000. "American Savings
Bank was able to execute several key investment sales in 2001 that generated
$5.2 million in net income for the bank," said Clarke. "With the unprecedented
11 Federal Funds Rate cuts, there was some downward pressure on our interest
rate spread. However, the sales and increased fee income helped propel the bank
to record earnings."
Interest rate spread--the difference between yield on interest-earning
assets and the rate paid on interest-bearing liabilities--was slightly lower for
2001 at 3.17%, compared with 3.20% for 2000. Average interest-earning assets
increased slightly in 2001 to $5.6 billion.
Net income for 2001 was $83.7 million, or $2.48 per share, compared with
$45.7 million, or $1.41 per share for 2000. Losses from discontinued operations
for 2001 were $24.0 million or $0.71 per share, compared with $63.6 million or
$1.95 per share for 2000 and primarily reflect charges related to the
discontinuance of HEI's international power subsidiary in the third quarter of
2001.
HEI is the largest Hawaii-based company, providing electric utility
services to 95% of Hawaii's residents and a full array of banking services to
consumers and businesses through the state's third largest bank.
1
Forward-looking Statements
This release may contain "forward-looking statements," that are subject to
risks and uncertainties. Forward-looking statements are statements that are
predictive in nature, depend upon or refer to future events or conditions, and
usually include words such as expects, anticipates, intends, plans, believes,
predicts, estimates or similar expressions. Forward-looking statements in this
release should be read in conjunction with "Forward-looking statements" set
forth on page v of HEI's Form 10-Q for the quarter ended September 30, 2001
(incorporated by reference herein) and in HEI's future periodic reports that
discuss important factors that could cause HEI's results to differ materially
from those anticipated in such statements. Forward-looking statements speak only
as of the date of this release.
###
2
Hawaiian Electric Industries, Inc. and subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Quarters ended Years ended
(in thousands, December 31, December 31,
except per share amounts) 2001 2000 2001 2000
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Revenues
Electric utility $ 315,844 $ 342,596 $ 1,289,304 $ 1,277,170
Bank 108,564 117,616 444,602 450,882
Other (5,099) 2,381 (6,629) 4,259
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419,309 462,593 1,727,277 1,732,311
--------- --------- ----------- -----------
Expenses
Electric utility 274,259 306,043 1,095,359 1,084,079
Bank 83,674 100,059 362,503 380,841
Other 3,888 3,148 13,242 9,858
--------- --------- ----------- -----------
361,821 409,250 1,471,104 1,474,778
--------- --------- ----------- -----------
Operating income (loss)
Electric utility 41,585 36,553 193,945 193,091
Bank 24,890 17,557 82,099 70,041
Other (8,987) (767) (19,871) (5,599)
--------- --------- ----------- -----------
57,488 53,343 256,173 257,533
--------- --------- ----------- -----------
Interest expense-
other than bank (19,265) (19,711) (78,726) (77,298)
Allowance for borrowed funds
used during construction 547 702 2,258 2,922
Preferred stock dividends of
subsidiaries (502) (502) (2,006) (2,007)
Preferred securities distributions of
trust subsidiaries (4,009) (4,009) (16,035) (16,035)
Allowance for equity funds
used during construction 1,021 1,278 4,239 5,380
--------- --------- ----------- -----------
Income from continuing operations
before income taxes 35,280 31,101 165,903 170,495
Income taxes 10,076 9,687 58,157 61,159
--------- --------- ----------- -----------
Income from continuing operations 25,204 21,414 107,746 109,336
Discontinued operations, net of income taxes
Loss from operations - (45,791) (1,254) (63,592)
Net loss on disposals (1,966) - (22,787) -
---------- --------- ----------- -----------
Loss from discontinued operations (1,966) (45,791) (24,041) (63,592)
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Net income (loss) $ 23,238 $ (24,377) $ 83,705 $ 45,744
========== ========= =========== ===========
Per common share
Basic earnings (loss)
Continuing operations $ 0.73 $ 0.65 $ 3.19 $ 3.36
Discontinued operations (0.06) (1.39) (0.71) (1.95)
--------- --------- ----------- -----------
$ 0.67 $ (0.74) $ 2.48 $ 1.41
========= ========= =========== ===========
Diluted earnings (loss)
Continuing operations $ 0.73 $ 0.65 $ 3.18 $ 3.35
Discontinued operations (0.06) (1.39) (0.71) (1.95)
--------- --------- ----------- -----------
$ 0.67 $ (0.74) $ 2.47 $ 1.40
========= ========= =========== ===========
Dividends $ 0.62 $ 0.62 $ 2.48 $ 2.48
========= ========= =========== ===========
Weighted-average number of
common shares outstanding 34,644 32,864 33,754 32,545
========= ========= =========== ===========
Adjusted weighted-average shares 34,851 33,013 33,942 32,687
========= ========= =========== ===========
Income (loss) from continuing operations by segment
Electric utility $ 18,464 $ 14,527 $ 88,300 $ 87,286
Bank 15,377 10,198 48,531 40,630
Other (8,637) (3,311) (29,085) (18,580)
--------- --------- ------------ ------------
Income from continuing operations $ 25,204 $ 21,414 $ 107,746 $ 109,336
========= ========= ============ ============
This information should be read in conjunction with the consolidated financial
statements and the notes thereto incorporated by reference in HEI's Annual
Report on SEC Form 10-K for the year ended December 31, 2000 and 2001 (when
filed) and the consolidated financial statements and the notes thereto in HEI's
Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2001, June
30, 2001 and September 30, 2001.
3
HAWAIIAN ELECTRIC INDUSTRIES, INC.
SUPPLEMENTAL DATA TO 4TH QUARTER 2001 EARNINGS RELEASE
(Unaudited)
Hawaiian Electric Company, Inc. (HECO) and subsidiaries Years ended
Consolidated Statements of Income December 31,
--------------------------------------------------------------- -----------------------------
(in thousands) 2001 2000
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Operating revenues $ 1,284,312 $ 1,270,635
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Operating expenses
Fuel oil 346,728 362,905
Purchased power 337,844 311,207
Other operation 125,565 123,779
Maintenance 61,801 66,069
Depreciation 100,714 98,517
Taxes, other than income taxes 120,894 119,784
Income taxes 55,434 55,213
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1,148,980 1,137,474
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Operating income 135,332 133,161
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Other income
Allowance for equity funds used during construction 4,239 5,380
Other, net 3,197 4,555
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7,436 9,935
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Income before interest and other charges 142,768 143,096
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Interest and other charges
Interest on long-term debt 40,296 40,134
Amortization of net bond premium and expense 2,063 1,938
Other interest charges 4,697 6,990
Allowance for borrowed funds used during construction (2,258) (2,922)
Preferred stock dividends of subsidiaries 915 915
Preferred securities distributions of trust subsidiaries 7,675 7,675
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53,388 54,730
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Income before preferred stock dividends of HECO 89,380 88,366
Preferred stock dividends of HECO 1,080 1,080
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Net income for common stock $ 88,300 $ 87,286
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Other electric utility information
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Kilowatthour sales (millions) 9,370 9,272
Cooling degree days (Oahu) 4,911 4,707
Fuel cost per barrel $ 33.49 $ 33.44
4
Hawaiian Electric Industries, Inc.
Supplemental Data to 4th Quarter Earnings Release
Page 2
Years ended
American Savings Bank, F.S.B. and subsidiaries December 31,
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Consolidated Income statement data 2001 2000
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(in thousands)
Interest income $ 399,651 $ 423,575
Interest expense 213,585 238,875
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Net interest income 186,066 184,700
Provision for loan losses (12,500) (13,050)
Other income 44,951 27,307
Operating, administrative and general expenses (136,418) (128,916)
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Operating income 82,099 70,041
Minority interest 213 225
Income taxes 27,944 23,774
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Income before preferred stock dividends 53,942 46,042
Preferred stock dividends 5,411 5,412
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Net income $ 48,531 $ 40,630
============= ============
Interest rate spread (%) 3.17 3.20
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized. The signature of the undersigned
companies shall be deemed to relate only to matters having reference to such
companies and any subsidiaries thereof.
HAWAIIAN ELECTRIC INDUSTRIES, INC. HAWAIIAN ELECTRIC COMPANY, INC.
(Registrant) (Registrant)
/s/ Robert F. Mougeot /s/ Richard A. von Gnechten
------------------------------------- -------------------------------------
Robert F. Mougeot Richard A. von Gnechten
Financial Vice President, Treasurer Financial Vice President
and Chief Financial Officer
(Principal Financial Officer of HEI) (Principal Financial Officer of HECO)
Date: January 23, 2002 Date: January 23, 2002
6