================================================================================ 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: October 31, 2001 ================================================================================ 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 ================================================================================ State of Hawaii ---------------------------------------------- (State or other jurisdiction of incorporation) 900 Richards Street, Honolulu, Hawaii 96813 ----------------------------------------------------- (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 -------------------------------------------------------------- (Former name or former address, if changed since last report.) ================================================================================ Item 5. Other Events News release ------------ On October 31, 2001, HEI issued the following news release: HAWAIIAN ELECTRIC INDUSTRIES, INC. REPORTS THIRD QUARTER 2001 EARNINGS AND DISCONTINUATION OF ITS INTERNATIONAL SUBSIDIARY AND PROVIDES NOTICE OF ITS PROPOSED REGISTERED OFFERING OF COMMON STOCK HONOLULU -- Hawaiian Electric Industries, Inc. (NYSE - HE) reported net income from continuing operations for the three months ended September 30, 2001 of $28.7 million, or 85 cents per share, compared with $31.2 million, or 96 cents per share, in the same quarter of 2000. For the nine months ended September 30, 2001, net income from continuing operations was $82.5 million, or $2.47 per share, compared with $87.9 million, or $2.71 per share, in the same period last year. "Although results were down this quarter as compared with the same quarter in 2000, our core businesses, the utilities and bank, turned in solid results," said Robert F. Clarke, HEI chairman, president and chief executive officer. The Company also announced that it has discontinued its international power operations effective September 30, 2001. "After evaluating strategic alternatives for our international operations, we believe it is in the best interest of our shareholders to exit this business and focus resources on our Hawaii operations," said Clarke. Over the next year, HEI Power Corp. will wind down its operations and manage the disposition of its assets. Net losses from discontinued operations during the third quarter, including the discontinued international operations, were $21.5 million or 64 cents per share, compared to $9.2 million, or 28 cents per share, in the same quarter last year. Net losses from discontinued operations for the nine months ended September 30, 2001 were $22.1 million, or 66 cents per share, versus $17.8 million, or 55 cents per share, in the same period of 2000. Electric utility net income during the quarter was $25.7 million versus $25.0 million in the same quarter last year. Net income for the nine months was $69.8 million versus $72.8 million in the same period of 2000. "Utility net income was up slightly this quarter as compared with the same quarter last year. Warmer weather drove kilowatthour sales higher by 1.6% this quarter," said Clarke. "Increased sales, along with decreased maintenance costs, were partially offset by increases in purchased power capacity charges and depreciation expense for the quarter as compared to the same period in 2000." Bank net income in the third quarter was $11.1 million, compared to $9.8 million in the same quarter last year. Net income for the nine months was $33.2 million, versus $30.4 million in the same period of 2000. "Our bank earnings were 12.8% higher this quarter compared with the same quarter last year due largely to increases in other income," said Clarke. Lower losses from investing activities, along with increased credit card interchange and ATM fees, contributed to higher other income in the third quarter. Investment activity losses were lower due to the disposition of certain trust securities. The bank's interest rate spread - the difference between the yield on earning assets and the cost of funds declined 3 basis points to 3.08% in the quarter and 8 basis points for the nine months to 3.10%. The financial results of HEI's other nonutility subsidiaries and the corporate parent reflect a larger net loss for the quarter and nine months ended September 30, 2001 than in the same periods last year due to higher losses from investments acquired in connection with the disposition by the bank of certain trust securities and increased interest expense. 1 "While we are pleased with our third quarter results from our core businesses, the September 11 attacks, as well as the ensuing responses, have greatly affected the people of Hawaii and will undoubtedly impact our operations. Resulting declines in Hawaii tourism will have an effect on our utilities' kilowatthour sales and may eventually lead to increased delinquencies at our bank," said Clarke. "Volatility in U.S. capital markets may also negatively impact net pension income, the bank's interest rate spread and investments at the corporate parent. While the magnitude and duration of the economic impacts of the September 11 attacks are now unknown, HEI's core operations have been stable and have generated good cash flows even in difficult times." HEI is a diversified holding company. Its core businesses are electric utilities and a bank. Notice of Proposed Registered Offering of Common Stock HEI also announced that it plans to offer in an underwritten, registered public offering 1.5 million shares of its common stock (or 1.725 million shares if the underwriters' over-allotment option is exercised). Proceeds from the sale will be used to repay debt and for other general corporate purposes. This notice does not constitute an offer of common stock or any other securities for sale. ### 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 June 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) Three months Nine months Twelve months (in thousands, ended September 30, ended September 30, ended September 30, except per share amounts) 2001 2000 2001 2000 2001 2000 -------------------------------------------------------------------------------------------------------------------------------- Revenues Electric utility $ 341,386 $ 337,324 $ 973,460 $ 934,574 $ 1,316,056 $ 1,222,432 Bank 108,034 114,300 336,038 333,266 453,654 438,516 Other (2,128) 383 (1,530) 1,878 851 16,468 ----------- ----------- ----------- ----------- ----------- ----------- 447,292 452,007 1,307,968 1,269,718 1,770,561 1,677,416 ----------- ----------- ----------- ----------- ----------- ----------- Expenses Electric utility 287,064 284,031 821,100 778,036 1,127,143 1,022,889 Bank 88,546 97,321 278,829 280,782 378,888 371,519 Other 2,631 1,011 9,354 6,710 12,502 13,003 ----------- ----------- ----------- ----------- ----------- ----------- 378,241 382,363 1,109,283 1,065,528 1,518,533 1,407,411 ----------- ----------- ----------- ----------- ----------- ----------- Operating income (loss) Electric utility 54,322 53,293 152,360 156,538 188,913 199,543 Bank 19,488 16,979 57,209 52,484 74,766 66,997 Other (4,759) (628) (10,884) (4,832) (11,651) 3,465 ----------- ----------- ----------- ----------- ----------- ----------- 69,051 69,644 198,685 204,190 252,028 270,005 ----------- ----------- ----------- ----------- ----------- ----------- Interest expense- other than bank (19,937) (18,842) (59,461) (57,587) (79,172) (75,530) Allowance for borrowed funds used during construction 524 807 1,711 2,220 2,413 2,841 Preferred stock dividends of subsidiaries (501) (501) (1,504) (1,505) (2,006) (2,016) Preferred securities distributions of trust subsidiaries (4,008) (4,008) (12,026) (12,026) (16,035) (16,035) Allowance for equity funds used during construction 998 1,505 3,218 4,102 4,496 5,128 ----------- ----------- ----------- ----------- ----------- ----------- Income from continuing operations before income taxes 46,127 48,605 130,623 139,394 161,724 184,393 Income taxes 17,461 17,404 48,081 51,472 57,768 67,736 ----------- ----------- ----------- ----------- ----------- ----------- Income from continuing operations 28,666 31,201 82,542 87,922 103,956 116,657 Discontinued operations, net of income taxes Loss from operations (711) (9,152) (1,254) (17,801) (47,045) (18,784) Net gain (loss) on disposals (20,821) -- (20,821) -- (20,821) 3,953 ----------- ----------- ----------- ----------- ----------- ----------- Loss from discontinued operations (21,532) (9,152) (22,075) (17,801) (67,866) (14,831) ----------- ----------- ----------- ----------- ----------- ----------- Net income $ 7,134 $ 22,049 $ 60,467 $ 70,121 $ 36,090 $ 101,826 =========== =========== =========== =========== =========== =========== Per common share Basic earnings (loss) Continuing operations $ 0.85 $ 0.96 $ 2.47 $ 2.71 $ 3.12 $ 3.60 Discontinued operations (0.64) (0.28) (0.66) (0.55) (2.04) (0.46) ----------- ----------- ----------- ----------- ----------- ----------- $ 0.21 $ 0.68 $ 1.81 $ 2.16 $ 1.08 $ 3.14 =========== =========== =========== =========== =========== =========== Diluted earnings (loss) Continuing operations $ 0.84 $ 0.95 $ 2.46 $ 2.70 $ 3.11 $ 3.59 Discontinued operations (0.63) (0.28) (0.66) (0.55) (2.03) (0.46) ----------- ----------- ----------- ----------- ----------- ----------- $ 0.21 $ 0.67 $ 1.80 $ 2.15 $ 1.08 $ 3.13 =========== =========== =========== =========== =========== =========== Dividends $ 0.62 $ 0.62 $ 1.86 $ 1.86 $ 2.48 $ 2.48 =========== =========== =========== =========== =========== =========== Weighted-average number of common shares outstanding 33,716 32,642 33,454 32,438 33,305 32,381 =========== =========== =========== =========== =========== =========== Adjusted weighted-average shares 33,925 32,777 33,634 32,570 33,471 32,513 =========== =========== =========== =========== =========== =========== Income (loss) from continuing operations by segment Electric utility $ 25,695 $ 25,020 $ 69,836 $ 72,759 $ 84,363 $ 91,361 Bank 11,072 9,815 33,154 30,432 43,352 39,763 Other (8,101) (3,634) (20,448) (15,269) (23,759) (14,467) ----------- ----------- ----------- ----------- ----------- ----------- Income from continuing operations $ 28,666 $ 31,201 $ 82,542 $ 87,922 $ 103,956 $ 116,657 =========== =========== =========== =========== =========== =========== 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 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 (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. 3 HAWAIIAN ELECTRIC INDUSTRIES, INC. SUPPLEMENTAL DATA TO 3RD QUARTER 2001 EARNINGS RELEASE (Unaudited) Hawaiian Electric Company, Inc. (HECO) and subsidiaries Three months ended Nine months ended Consolidated Statements of Income September 30, September 30, ------------------------------------------------------------ ------------------------------ -------------------------------- (in thousands) 2001 2000 2001 2000 ------------- -------------- --------------- ------------- Operating revenues $ 340,231 $ 335,263 $ 969,979 $ 930,167 ------------- -------------- --------------- ------------- Operating expenses Fuel oil 96,665 95,883 266,995 262,130 Purchased power 87,670 85,092 253,067 225,762 Other operation 30,729 30,582 90,599 85,787 Maintenance 14,540 16,156 42,752 42,311 Depreciation 25,363 24,605 75,335 73,269 Taxes, other than income taxes 31,494 31,615 91,411 87,981 Income taxes 16,244 15,828 44,210 46,222 ------------- -------------- --------------- ------------- 302,705 299,761 864,369 823,462 ------------- -------------- --------------- ------------- Operating income 37,526 35,502 105,610 106,705 ------------- -------------- --------------- ------------- Other income Allowance for equity funds used during construction 998 1,505 3,218 4,102 Other, net 530 1,856 2,467 3,569 ------------- -------------- --------------- ------------- 1,528 3,361 5,685 7,671 ------------- -------------- --------------- ------------- Income before interest and other charges 39,054 38,863 111,295 114,376 ------------- -------------- --------------- ------------- Interest and other charges Interest on long-term debt 10,126 10,024 30,127 29,876 Amortization of net bond premium and expense 509 485 1,546 1,452 Other interest charges 832 1,725 4,245 5,257 Allowance for borrowed funds used during construction (524) (807) (1,711) (2,220) Preferred stock dividends of subsidiaries 228 228 686 686 Preferred securities distributions of trust subsidiaries 1,918 1,918 5,756 5,756 ------------- -------------- --------------- ------------- 13,089 13,573 40,649 40,807 ------------- -------------- --------------- ------------- Income before preferred stock dividends of HECO 25,965 25,290 70,646 73,569 Preferred stock dividends of HECO 270 270 810 810 ------------- -------------- --------------- ------------- Net income for common stock $ 25,695 $ 25,020 $ 69,836 $ 72,759 ============= ============== =============== ============= Other electric utility information -------------------------------------------------------- Kilowatthour sales (millions) 2,471 2,433 7,010 6,902 Cooling degree days (Oahu) 1,578 1,501 3,711 3,536 4 Three months ended Nine months ended American Savings Bank, F.S.B. and subsidiaries September 30, September 30, ------------------------------ -------------------------------- Consolidated Income statement data 2001 2000 2001 2000 ------------------------------------------------------- ------------- -------------- --------------- ------------- (in thousands) Interest income $ 96,967 $ 108,326 $ 307,159 $ 314,110 Interest expense 52,118 61,885 169,430 175,937 ------------- -------------- --------------- ------------- Net interest income 44,849 46,441 137,729 138,173 Provision for loan losses (3,000) (3,000) (9,000) (9,400) Other income 11,067 5,974 28,879 19,156 Operating, administrative and general expenses (33,428) (32,436) (100,399) (95,445) ------------- -------------- --------------- ------------- Operating income 19,488 16,979 57,209 52,484 Minority interest 48 58 162 168 Income taxes 7,015 5,753 19,835 17,825 ------------- -------------- --------------- ------------- Income before preferred stock dividends 12,425 11,168 37,212 34,491 Preferred stock dividends 1,353 1,353 4,058 4,059 ------------- -------------- --------------- ------------- Net income $ 11,072 $ 9,815 $ 33,154 $ 30,432 ============= ============== =============== ============= Interest rate spread (%) 3.08 3.11 3.10 3.18 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 of HECO and Chief Financial Officer (Principal Financial Officer of HEI) (Principal Financial Officer of HECO) Date: October 31, 2001 Date: October 31, 2001 6