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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: April 22, 2002
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Exact Name of Registrant Commission I.R.S. Employer
as Specified in Its Charter File Number Identification No.
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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 April 22, 2002, HEI issued the following news release:
HAWAIIAN ELECTRIC INDUSTRIES, INC. REPORTS FIRST QUARTER 2002 EARNINGS
HONOLULU -- Hawaiian Electric Industries, Inc. (NYSE - HE) today reported
net income for the three months ended March 31, 2002 of $26.9 million, or 75
cents per share, compared with $27.7 million, or 84 cents per share, in the same
quarter of 2001. Net income was down 3% for the quarter due to lower utility net
income and holding company losses that were partially offset by a 12% increase
in bank net income. Earnings per share were down 11% primarily due to an
increase in the number of shares outstanding resulting from HEI's November 2001
common stock offering.
Electric utility net income for the first quarter was $20.4 million
compared to $21.4 million for the same quarter last year due to higher
depreciation expense and lower kilowatthour sales, partially offset by lower
other operation, maintenance and interest expenses.
"We had anticipated that the Hawaii economic downturn post-September 11
would have a negative impact on kilowatthour sales. However, first quarter sales
were down mainly because of cooler weather," said Robert F. Clarke, HEI
chairman, president and chief executive officer. Cooling degree days were 10%
lower in the first quarter of 2002 compared with the same quarter last year.
Other operation and maintenance expenses were down quarter over quarter due
to post-September 11 cost containment efforts. "Our utilities made an extra
effort to lower expenses to offset the lower sales," said Clarke.
Savings bank net income in the first quarter was $13.4 million compared to
$11.9 million in the same quarter last year. The increase in net income was
partly due to increases in both net interest and other noninterest income. Also,
the adoption of new accounting rules calling for the discontinuation of goodwill
amortization resulted in $1 million of net income. These increases were
partially offset by increases in operating, administrative and general expenses.
Net interest income increased due to an increase in the interest rate
spread -the difference between the yield on earning assets and cost of funds.
The interest rate spread was 3.27% in the recent quarter versus 3.01% for the
same period in 2001.
HEI will hold its annual meeting tomorrow at 9:30 a.m. in Honolulu, Hawaii
to elect four directors and to ratify an independent auditor.
HEI is the largest Hawaii-based company, providing electric utility
services to 95% of Hawaii's residents and a wide 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," which include
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. In addition, any
statements concerning future financial performance (including future revenues,
expenses, earnings or losses or growth rates), ongoing business strategies or
prospects and possible future actions, which may be provided by management, 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 assumptions about HEI and its subsidiaries, the performance of
the industries in which they do business and economic and market factors, among
other things. These forward-looking statements are not guarantees of future
performance.
Forward-looking statements in this release should be read in conjunction
with "Forward-looking statements" (which is incorporated by reference herein)
set forth on page vi of HEI's Annual Report on Form 10-K for the year ended
December 31, 2001 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)
Three months ended Twelve months ended
March 31, March 31,
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(in thousands, except per share amounts) 2002 2001 2002 2001
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Revenues
Electric utility $ 278,331 $ 318,423 $ 1,249,212 $ 1,306,188
Bank 98,842 115,754 427,690 456,369
Other 263 (840) (5,526) 2,679
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377,436 433,337 1,671,376 1,765,236
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Expenses
Electric utility 232,727 270,413 1,057,673 1,116,717
Bank 76,671 95,605 343,569 385,369
Other 4,169 2,385 15,026 9,517
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313,567 368,403 1,416,268 1,511,603
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Operating income (loss)
Electric utility 45,604 48,010 191,539 189,471
Bank 22,171 20,149 84,121 71,000
Other (3,906) (3,225) (20,552) (6,838)
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63,869 64,934 255,108 253,633
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Interest expense--other than bank (18,527) (19,585) (77,668) (78,020)
Allowance for borrowed funds used during construction 355 676 1,937 2,907
Preferred stock dividends of subsidiaries (501) (502) (2,005) (2,011)
Preferred securities distributions of trust subsidiaries (4,009) (4,009) (16,035) (16,035)
Allowance for equity funds used during construction 773 1,265 3,747 5,376
------------- ------------- ------------- -------------
Income from continuing operations
before income taxes 41,960 42,779 165,084 165,850
Income taxes 15,041 15,015 58,183 58,384
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Income from continuing operations 26,919 27,764 106,901 107,466
Discontinued operations, net of income taxes
Loss from operations - (19) (1,235) (62,953)
Net loss on disposals - - (22,787) -
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Loss from discontinued operations - (19) (24,022) (62,953)
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Net income $ 26,919 $ 27,745 $ 82,879 $ 44,513
============= ============= ============= =============
Per common share
Basic earnings (loss)
Continuing operations $ 0.75 $ 0.84 $ 3.11 $ 3.28
Discontinued operations - - (0.70) (1.92)
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$ 0.75 $ 0.84 $ 2.41 $ 1.36
============= ============= ============= =============
Diluted earnings (loss)
Continuing operations $ 0.75 $ 0.83 $ 3.09 $ 3.26
Discontinued operations - - (0.69) (1.91)
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$ 0.75 $ 0.83 $ 2.40 $ 1.35
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Dividends $ 0.62 $ 0.62 $ 2.48 $ 2.48
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Weighted average number of common shares outstanding 35,818 33,159 34,410 32,766
============= ============= ============= =============
Adjusted weighted average shares 36,014 33,312 34,573 32,904
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Income (loss) from continuing operations by segment
Electric utility $ 20,359 $ 21,425 $ 87,234 $ 84,986
Bank 13,351 11,875 50,007 41,284
Other (6,791) (5,536) (30,340) (18,804)
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Income from continuing operations $ 26,919 $ 27,764 $ 106,901 $ 107,466
============= ============= ============= =============
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, 2001 and the
consolidated financial statements and the notes thereto in HEI's Quarterly
Report on SEC Form 10-Q for the quarter ended March 31, 2002 (when filed).
Results of operations for interim periods are not necessarily indicative of
results to be expected for future interim periods or the full year.
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Hawaiian Electric Industries, Inc. and Subsidiaries
GOODWILL
(Unaudited)
The Company adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets" on January 1,
2002. The Company's goodwill is in the bank segment and was tested for
impairment as of January 1, 2002 and will be tested for impairment annually in
the third quarter. As of January 1, 2002, there was no impairment of goodwill.
Application of the nonamortization provisions of SFAS No. 142 has affected the
comparability of current period results of operations with prior periods. Thus,
the following "transitional" disclosures present "adjusted" net income and
earnings per common share:
Three months ended Twelve months ended
March 31, March 31,
--------------------------------- --------------------------------
(in thousands, except per share amounts) 2002 2001 2002 2001
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Consolidated
Reported net income $ 26,919 $ 27,745 $ 82,879 $ 44,513
Add back: goodwill amortization - 954 2,862 3,816
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Adjusted net income $ 26,919 $ 28,699 $ 85,741 $ 48,329
============== ============== ============== ==============
Basic earnings per common share
Reported net income $ 0.75 $ 0.84 $ 2.41 $ 1.36
Goodwill amortization - 0.03 0.08 0.12
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Adjusted net income $ 0.75 $ 0.87 $ 2.49 $ 1.48
============== ============== ============== ==============
Diluted earnings per common share
Reported net income $ 0.75 $ 0.83 $ 2.40 $ 1.35
Goodwill amortization - 0.03 0.08 0.12
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Adjusted net income $ 0.75 $ 0.86 $ 2.48 $ 1.47
============== ============== ============== ==============
Weighted average number of
common shares outstanding 35,818 33,159 34,410 32,766
============== ============== ============== ==============
Adjusted weighted average shares 36,014 33,312 34,573 32,904
============== ============== ============== ==============
Bank
Reported net income $ 13,351 $ 11,875 $ 50,007 $ 41,284
Add back: goodwill amortization - 954 2,862 3,816
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Adjusted net income $ 13,351 $ 12,829 $ 52,869 $ 45,100
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Hawaiian Electric Company, Inc. (HECO) and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended
March 31,
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(in thousands) 2002 2001
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Operating revenues $ 277,333 $ 317,293
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Operating expenses
Fuel oil 59,235 88,245
Purchased power 77,101 81,916
Other operation 29,223 29,774
Maintenance 14,012 15,197
Depreciation 26,360 24,609
Taxes, other than income taxes 26,690 30,491
Income taxes 12,791 13,604
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245,412 283,836
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Operating income 31,921 33,457
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Other income
Allowance for equity funds used during construction 773 1,265
Other, net 815 977
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1,588 2,242
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Income before interest and other charges 33,509 35,699
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Interest and other charges
Interest on long-term debt 10,136 9,929
Amortization of net bond premium and expense 500 530
Other interest charges 451 2,073
Allowance for borrowed funds used during construction (355) (676)
Preferred stock dividends of subsidiaries 229 229
Preferred securities distributions of trust subsidiaries 1,919 1,919
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12,880 14,004
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Income before preferred stock dividends of HECO 20,629 21,695
Preferred stock dividends of HECO 270 270
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Net income for common stock $ 20,359 $ 21,425
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OTHER ELECTRIC UTILITY INFORMATION
Kilowatthour sales (millions) 2,223 2,241
Cooling degree days (Oahu) 819 910
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American Savings Bank, F.S.B. and Subsidiaries
CONSOLIDATED INCOME STATEMENT DATA
(Unaudited)
Three months ended
March 31,
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(in thousands) 2002 2001
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Interest income $ 85,654 $ 107,601
Interest expense 38,116 60,500
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Net interest income 47,538 47,101
Provision for loan losses (3,500) (3,000)
Other income 13,188 8,153
Operating, administrative and general expenses (35,055) (32,105)
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Operating income 22,171 20,149
Minority interest 45 59
Income taxes 7,422 6,862
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Income before preferred stock dividends 14,704 13,228
Preferred stock dividends 1,353 1,353
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Net income $ 13,351 $ 11,875
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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
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Robert F. Mougeot Richard A. von Gnechten
Financial Vice President, Treasurer and Financial Vice President
Chief Financial Officer (Principal Financial Officer of HECO)
(Principal Financial Officer of HEI)
Date: April 22, 2002 Date: April 22, 2002
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