Hawaiian Electric Industries Reports Second Quarter 2013 Earnings Earnings Per Share of $0.41

Hawaiian Electric Company Continues to Integrate More Renewable Energy Sources

American Savings Bank Delivers Solid Results

HONOLULU, Aug. 8, 2013 /PRNewswire/ -- Hawaiian Electric Industries, Inc. (NYSE - HE) (HEI) today reported consolidated net income for common stock for the second quarter of 2013 of $40.6 million, or $0.41 diluted earnings per share (EPS), compared to $38.8 million, or $0.40 diluted EPS for the second quarter of 2012. 

"HEI's stable financial results in the quarter were consistent with our expectations. Higher bank earnings compared to the same quarter last year helped offset slightly lower utility earnings which were primarily driven by a customer refund recorded in the quarter.  At American Savings Bank, higher earnings were supported by good loan growth and declining credit costs in an improving local economy.  This helped offset the continued impact of low interest rates.  As a result, the bank continued to deliver strong profitability metrics while maintaining solid capital levels," said Constance H. Lau, HEI president and chief executive officer.

At Hawaiian Electric Company, year-to-date renewable energy provided nearly 18% of customers' electricity usage, already greater than the 2015 renewable portfolio standard of 15%, and even higher on Hawaii Island at 49% and Maui County at 28%.  "A key element of our utility strategy is to seek to lower our customers' bills by aggressively acquiring and integrating local renewable energy at lower and more stable prices than oil.  As a result, and consistent with our state's energy policies, our utilities have achieved unprecedented levels of renewable energy, and we recognize the importance of further accelerating our move to less costly renewables," said Lau. In order to add even more lower-cost renewable energy as quickly as possible, Hawaiian Electric Company is seeking accelerated approval for five purchase power agreements totaling 64 MW that are priced lower than the existing cost of oil-fired generation.

"In addition to moving to a renewable energy future, we are pursuing many other strategies to better serve customers.  To ensure safe and reliable service, we made $140 million of infrastructure investments in the first half of 2013.  This includes the ongoing execution of our asset management program which is designed to modernize our grid in a cost effective manner and improve service levels.  Our utilities have also been focused on achieving operational and cost efficiencies and have been exploring the possibility of using lower cost liquefied natural gas to help reduce customer bills.  We have to keep pushing the envelope to lower the cost for our customers.  It's what our companies are committed to and what our utility customers deserve," added Lau.

HAWAIIAN ELECTRIC COMPANY CONTINUES INVESTMENTS TO INTEGRATE MORE RENEWABLE ENERGY AND BETTER SERVE CUSTOMERS

Hawaiian Electric Company's1 net income for the second quarter of 2013 was $28.7 million compared to $29.4 million in the second quarter of 2012.  The following items were significant factors in the quarter (on an after-tax basis): 

  • Net revenues2 were flat compared to the second quarter of 2012 as $3 million for additional recovery of costs at the Oahu utility was offset by a net $3 million decrease at the Maui County utility primarily due to the customer refund granted in its recent final rate case decision.
  • Depreciation expense was $2 million higher with increasing investments for improved customer reliability, greater system efficiency and integration of more renewable energy.
  • Operations and maintenance (O&M) expenses3 were $2 million lower in the second quarter of 2013 compared to the same quarter last year largely due to temporary delays in overhauls and reversals of previously expensed costs.  These reductions in expenses were partially offset by higher customer service costs. 

1 Hawaiian Electric Company, unless otherwise defined, refers to the three utilities, Hawaiian Electric Company, Inc. on Oahu, Maui Electric Company, Limited, and Hawaii Electric Light Company, Inc.

2 Net revenues represent the after-tax impact of "Operating revenues" less the following operating expenses which are largely pass through items in revenues: "fuel oil", "purchased power" and "taxes, other than income taxes" as shown on the Hawaiian Electric Company Consolidated Statements of Income.

3 Excludes expenses covered by surcharges or by third parties. In the second quarter of 2013 and 2012, these expenses were $2 million and $1 million, respectively.

AMERICAN SAVINGS BANK CONTINUES TO DELIVER SOLID PERFORMANCE

American Savings Bank's (American) net income for the second quarter of 2013 was $15.9 million compared to $14.2 million in both the first, or linked, quarter of 2013 and in the second quarter of 2012.  Second quarter 2013 net income was $1.8 million higher than the linked quarter primarily driven by (on an after-tax basis) a lower provision for loan losses of $2 million, $1 million of which related to the strategic third quarter sale of American's credit card portfolio, and $1 million higher gains on sales of investment securities.  These increases were largely offset by lower mortgage banking income and higher noninterest expense. 

Compared to the second quarter of 2012, net income improved by $1.7 million.  The increase was primarily driven by a lower provision for loan losses and higher gains on sales of investment securities as discussed above.  These increases were partially offset by higher noninterest expense due to targeted staffing and information technology expense increases.

Overall, American achieved solid profitability in the second quarter of 2013 with a return on average equity of 12.6% and a return on average assets of 1.25%. 

Also, refer to the American news release issued on July 30, 2013.

HOLDING AND OTHER COMPANIES

The holding and other companies' net losses were $4.0 million in the second quarter of 2013 compared to $4.8 million in the second quarter of 2012.   The lower net loss was due to lower administrative and general expenses and interest expense.

WEBCAST AND CONFERENCE CALL

Hawaiian Electric Industries, Inc. will conduct a webcast and conference call to review its second quarter 2013 earnings on Thursday, August 8, 2013, at 11:00 a.m. Hawaii time (5:00 p.m. Eastern time).  The event can be accessed through HEI's website at www.hei.com or by dialing (877) 415-3186, passcode:  97287517 for the teleconference call.  The presentation for the webcast will be on HEI's website under the headings "Investor Relations," "News & Events" and "Presentations & Webcasts."  HEI and Hawaiian Electric Company, Inc. (HECO) intend to continue to use HEI's website, www.hei.com, as a means of disclosing material information, as well as other important information.  Such disclosures will be included on HEI's website in the Investor Relations section.  Accordingly, investors should routinely monitor such portions of HEI's website, in addition to following HEI's, HECO's and American's press releases, HEI's and HECO's Securities and Exchange Commission (SEC) filings and HEI's public conference calls and webcasts.  Also, at the Investor Relations section of HEI's website, investors may sign up to receive e-mail alerts (based on each investor's selected preferences).  The information on HEI's website is not incorporated by reference in this document or in HEI's and HECO's SEC filings unless, and except to the extent, specifically incorporated by reference.  Investors may also wish to refer to the Public Utilities Commission of the State of Hawaii (PUC) website at dms.puc.hawaii.gov/dms in order to review documents filed with and issued by the PUC.  No information on the PUC website is incorporated by reference in this document or in HEI's and HECO's SEC filings.

An online replay of the webcast will be available at the same website beginning about two hours after the event.  Replays of the teleconference call will also be available approximately two hours after the event through August 22, 2013, by dialing (888) 286-8010, passcode: 60955453.

HEI supplies power to approximately 450,000 customers or 95% of Hawaii's population through its electric utilities, HECO, Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited and provides a wide array of banking and other financial services to consumers and businesses through American, one of Hawaii's largest financial institutions.

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, 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, 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 the "Forward-Looking Statements" and "Risk Factors" discussions (which are incorporated by reference herein) set forth in HEI's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 and HEI's subsequent periodic reports that discuss important factors that could cause HEI's results to differ materially from those anticipated in such statements.  These 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, HECO, American and their subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

 


Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries









CONSOLIDATED STATEMENTS OF INCOME









(Unaudited)


Three months


Six months





ended June 30


ended June 30

(in thousands, except per share amounts) 


2013


2012


2013


2012

Revenues









Electric utility


$  730,688


$  789,552


$1,449,961


$1,539,162

Bank



66,027


64,721


130,783


129,973

Other


15


(5)


50


(7)

    Total revenues


796,730


854,268


1,580,794


1,669,128

Expenses









Electric utility


669,550


728,056


1,335,870


1,420,412

Bank



41,322


42,847


84,327


85,187

Other


3,488


3,959


7,570


8,307

    Total expenses


714,360


774,862


1,427,767


1,513,906

Operating income (loss)









Electric utility


61,138


61,496


114,091


118,750

Bank



24,705


21,874


46,456


44,786

Other


(3,473)


(3,964)


(7,520)


(8,314)

     Total operating income 


82,370


79,406


153,027


155,222

Interest expense–other than on deposit liabilities 










and other bank borrowings


(19,613)


(20,199)


(39,401)


(38,738)

Allowance for borrowed funds used during construction


398


893


1,128


1,763

Allowance for equity funds used during construction


1,560


1,997


2,775


3,937

Income before income taxes


64,715


62,097


117,529


122,184

Income taxes


23,654


22,824


42,316


44,122

Net income 


41,061


39,273


75,213


78,062

Preferred stock dividends of subsidiaries


473


473


946


946

Net income for common stock


$    40,588


$    38,800


$     74,267


$     77,116

Basic earnings per common share


$        0.41


$        0.40


$         0.75


$         0.80

Diluted earnings per common share


$        0.41


$        0.40


$         0.75


$         0.80

Dividends per common share


$        0.31


$        0.31


$         0.62


$         0.62

Weighted-average number of common shares outstanding


98,660


96,693


98,399


96,430

Adjusted weighted-average shares


99,249


96,979


98,961


96,819












Net income (loss) for common stock by segment










Electric utility


$    28,693


$    29,376


$     53,122


$     56,676


Bank


15,919


14,189


30,074


30,066


Other


(4,024)


(4,765)


(8,929)


(9,626)

Net income for common stock


$    40,588


$    38,800


$     74,267


$     77,116

Comprehensive income attributable to Hawaiian Electric Industries, Inc.


$    32,283


$    40,350


$     65,901


$     78,977

Return on average common equity (twelve months ended)1






8.5%


10.4%

This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and HEI's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2013 and June 30, 2013 (when filed), as updated by SEC Forms 8-K. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.


1

On a core basis, 2013 and 2012 return on average common equity (twelve months ended June 30) were 10.0% and 10.7%, respectively.  See reconciliation of GAAP to non-GAAP measures.

 


Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries



CONSOLIDATED BALANCE SHEETS



(Unaudited)




June 30,

December 31,

(dollars in thousands)

2013

2012

Assets



Cash and cash equivalents

$       153,712

$       219,662

Accounts receivable and unbilled revenues, net

359,259

362,823

Available-for-sale investment and mortgage-related securities

560,172

671,358

Investment in stock of Federal Home Loan Bank of Seattle 

94,281

96,022

Loans receivable held for investment, net

3,912,630

3,737,233

Loans held for sale, at lower of cost or fair value

34,073

26,005

Property, plant and equipment, net of accumulated depreciation of



      $2,161,681 in 2013 and $2,125,286 in 2012

3,701,905

3,594,829

Regulatory assets

885,025

864,596

Other

454,898

494,414

Goodwill

82,190

82,190

     Total assets

$  10,238,145

$  10,149,132

Liabilities and shareholders' equity



Liabilities



Accounts payable

$       175,038

$       212,379

Interest and dividends payable

25,503

26,258

Deposit liabilities

4,276,243

4,229,916

Short-term borrowings—other than bank

125,786

83,693

Other bank borrowings

187,884

195,926

Long-term debt, net—other than bank

1,422,877

1,422,872

Deferred income taxes

474,197

439,329

Regulatory liabilities

336,065

322,074

Contributions in aid of construction

419,337

405,520

Defined benefit pension and other postretirement benefit plans liability

639,898

656,394

Other

496,375

526,613

     Total liabilities

8,579,203

8,520,974




Preferred stock of subsidiaries - not subject to mandatory redemption

34,293

34,293




Shareholders' equity



Preferred stock, no par value, authorized 10,000,000 shares; issued:  none

-

-

Common stock, no par value, authorized 200,000,000 shares; issued



    and outstanding:  99,044,053 shares in 2013 and 97,928,403 shares in 2012  

1,429,371

1,403,484

Retained earnings

230,067

216,804

Accumulated other comprehensive loss, net of tax benefits

(34,789)

(26,423)

     Total shareholders' equity

1,624,649

1,593,865

     Total liabilities and shareholders' equity

$  10,238,145

$  10,149,132




This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and HEI's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2013 and June 30, 2013 (when filed), as updated by SEC Forms 8-K. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.

 

 


Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries



CONSOLIDATED STATEMENTS OF CASH FLOWS



(Unaudited)



Six months ended June 30

2013

2012

(in thousands)



Cash flows from operating activities



Net income 

$          75,213

$          78,062

Adjustments to reconcile net income to net cash provided by (used in) operating activities



      Depreciation of property, plant and equipment

79,843

75,517

      Other amortization

2,868

2,999

      Provision for loan losses

899

5,924

      Loans receivable originated and purchased, held for sale

(128,276)

(161,344)

      Proceeds from sale of loans receivable, held for sale

148,243

161,713

      Change in deferred income taxes

40,403

41,541

      Change in excess tax benefits from share-based payment arrangements

(445)

(40)

      Allowance for equity funds used during construction

(2,775)

(3,937)

      Changes in assets and liabilities



           Decrease (increase) in accounts receivable and unbilled revenues, net

3,564

(42,428)

           Decrease (increase) in fuel oil stock

43,974

(35,893)

           Increase in regulatory assets

(37,586)

(35,476)

           Increase (decrease) in accounts, interest and dividends payable

(43,384)

3,578

           Change in prepaid and accrued income taxes and utility revenue taxes

(33,822)

(12,998)

           Contributions to defined benefit pension and other postretirement benefit plans

(41,521)

(53,356)

           Other increase in defined benefit pension and other postretirement benefit plans liability

41,191

31,204

           Change in other assets and liabilities

(17,597)

(58,638)

Net cash provided by (used in) operating activities

130,792

(3,572)

Cash flows from investing activities



Available-for-sale investment and mortgage-related securities purchased

(39,721)

(93,808)

Principal repayments on available-for-sale investment and mortgage-related securities

62,819

75,407

Proceeds from sale of available-for-sale investment and mortgage-related ssecurities

71,367

3,548

Net increase in loans held for investment

(201,184)

(61,214)

Proceeds from sale of real estate acquired in settlement of loans

5,712

6,036

Capital expenditures

(158,830)

(145,263)

Contributions in aid of construction

17,188

26,981

Other

2,364

-

Net cash used in investing activities

(240,285)

(188,313)

Cash flows from financing activities



Net increase in deposit liabilities

46,326

66,709

Net increase in short-term borrowings with original maturities of three months or less

42,093

27,419

Net decrease in retail repurchase agreements

(8,054)

(14,556)

Proceeds from other bank borrowings

25,000

-

Repayments of other bank borrowings

(25,000)

-

Proceeds from issuance of long-term debt

50,000

417,000

Repayment of long-term debt

(50,000)

(328,500)

Change in excess tax benefits from share-based payment arrangements

445

40

Net proceeds from issuance of common stock

11,994

11,909

Common stock dividends

(48,921)

(47,851)

Preferred stock dividends of subsidiaries

(946)

(946)

Other

606

(2,055)

Net cash provided by financing activities

43,543

129,169

Net decrease in cash and cash equivalents 

(65,950)

(62,716)

Cash and cash equivalents, beginning of period

219,662

270,265

Cash and cash equivalents, end of period

$        153,712

$        207,549




This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and HEI's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2013 and June 30, 2013 (when filed), as updated by SEC Forms 8-K. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.

 

 


Hawaiian Electric Company, Inc. (HECO) and Subsidiaries








CONSOLIDATED STATEMENTS OF INCOME









(Unaudited)


Three months ended


Six months ended




June 30


June 30

(dollars in thousands, except per barrel amounts)


2013


2012


2013


2012











Operating revenues


$      728,793


$      787,685


$    1,444,990


$      1,535,623

Operating expenses









Fuel oil


289,278


331,064


594,378


658,903

Purchased power


178,444


188,352


331,808


353,141

Other operation 


66,184


64,516


137,607


126,365

Maintenance


27,340


31,235


57,042


61,273

Depreciation


38,590


36,133


76,870


72,615

Taxes, other than income taxes


68,759


76,304


136,446


147,299

Income taxes


18,333


18,574


32,428


35,939

     Total operating expenses


686,928


746,178


1,366,579


1,455,535

Operating income


41,865


41,507


78,411


80,088

Other income









Allowance for equity funds used during construction


1,560


1,997


2,775


3,937

Other, net


940


1,414


3,252


2,723

Income tax benefit (expense)


8


(51)


(291)


(95)

     Total other income


2,508


3,360


5,736


6,565

Interest and other charges









Interest on long-term debt


14,614


15,323


29,228


29,706

Amortization of net bond premium and expense


647


661


1,294


1,406

Other interest charges (credits)


318


(99)


633


(370)

Allowance for borrowed funds used during construction


(398)


(893)


(1,128)


(1,763)

     Total interest and other charges


15,181


14,992


30,027


28,979

Net income 


29,192


29,875


54,120


57,674

Preferred stock dividends of subsidiaries


229


229


458


458

Net income attributable to HECO


28,963


29,646


53,662


57,216

Preferred stock dividends of HECO


270


270


540


540

Net income for common stock


$        28,693


$        29,376


$        53,122


$          56,676

Comprehensive income attributable to HECO


$        28,710


$        29,451


$        53,157


$          56,828

OTHER ELECTRIC UTILITY INFORMATION









Kilowatthour sales (millions)









   HECO


1,702


1,713


3,293


3,409

   HELCO


265


265


528


536

   MECO


280


279


549


563




2,247


2,257


4,370


4,508

Wet-bulb temperature (Oahu average; degrees Fahrenheit)

69.3


68.0


67.6


67.6

Cooling degree days (Oahu)


1,114


1,150


1,903


2,011

Average fuel oil cost per barrel


$129.94


$145.27


$131.49


$139.63








 Twelve months ended  








June 30

Return on average common equity (%) (simple average)1





2013


2012

   HECO






6.80


9.44

   HELCO






5.18


8.77

   MECO






7.39


6.11

   HECO Consolidated






6.58


8.73











This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HECO's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and the consolidated financial statements and the notes thereto in HECO's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2013 and June 30, 2013 (when filed), as updated by SEC Forms 8-K. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.













1

On a core basis, the 2013 and 2012 return on average common equity (twelve months ended June 30) were 8.7% and 10.1%, respectively for HECO;  6.4% and 8.8%, respectively for HELCO; 8.8% and 6.1%, respectively for MECO and 8.3% and 9.1% respectively, for HECO Consolidated.  See reconciliation of GAAP to non-GAAP measures. 



 


Hawaiian Electric Company, Inc. (HECO) and Subsidiaries



CONSOLIDATED BALANCE SHEETS



(Unaudited)




June 30,

December 31,

(dollars in thousands, except par value)

2013

2012

Assets



Utility plant, at cost



Land

$             51,622

$             51,568

Plant and equipment

5,492,118

5,364,400

Less accumulated depreciation

(2,082,532)

(2,040,789)

Construction in progress

166,902

151,378

     Net utility plant

3,628,110

3,526,557

Current assets



Cash and cash equivalents

8,617

17,159

Customer accounts receivable, net 

196,643

210,779

Accrued unbilled revenues, net

139,187

134,298

Other accounts receivable, net

10,059

28,176

Fuel oil stock, at average cost

117,445

161,419

Materials and supplies, at average cost

58,224

51,085

Prepayments and other

38,301

32,865

Regulatory assets

63,672

51,267

     Total current assets 

632,148

687,048

Other long-term assets



Regulatory assets

821,353

813,329

Unamortized debt expense

9,948

10,554

Other

70,260

71,305

     Total other long-term assets

901,561

895,188

          Total assets

$        5,161,819

$        5,108,793

Capitalization and liabilities



Capitalization



Common stock, $6 2/3 par value, authorized 50,000,000 shares; outstanding 



    14,665,264 in 2013 and 2012

$             97,788

$             97,788

Premium on capital stock

468,045

468,045

Retained earnings

919,606

907,273

Accumulated other comprehensive loss, net of tax benefits

(935)

(970)

     Common stock equity

1,484,504

1,472,136

Cumulative preferred stock – not subject to mandatory redemption

34,293

34,293

Long-term debt, net

1,147,877

1,147,872

     Total capitalization

2,666,674

2,654,301

Current liabilities



Short-term borrowings from nonaffiliates

53,992

-

Accounts payable

150,877

186,824

Interest and preferred dividends payable

20,325

21,092

Taxes accrued

218,850

251,066

Other

77,895

62,879

     Total current liabilities

521,939

521,861

Deferred credits and other liabilities



Deferred income taxes

456,952

417,611

Regulatory liabilities

327,254

322,074

Unamortized tax credits

69,526

66,584

Defined benefit pension and other postretirement benefit plans liability

605,026

620,205

Other

95,111

100,637

     Total deferred credits and other liabilities

1,553,869

1,527,111

Contributions in aid of construction

419,337

405,520

          Total capitalization and liabilities

$        5,161,819

$        5,108,793




This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HECO's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and the consolidated financial statements and the notes thereto in HECO's Quarterly Reports on SEC Form 10-Q for the quarter ended March 31, 2013 and June 30, 2013 (when filed), as updated by SEC Forms 8-K. Results of operations for interim periods are not  necessarily indicative of results to be expected for future interim periods or the full year.

 

 


Hawaiian Electric Company, Inc. (HECO) and Subsidiaries



CONSOLIDATED STATEMENTS OF CASH FLOWS



(Unaudited)



Six months ended June 30

2013

2012

(in thousands)



Cash flows from operating activities



Net income

$    54,120

$    57,674

Adjustments to reconcile net income to net cash provided by (used in) 



   operating activities



      Depreciation of property, plant and equipment

76,870

72,615

      Other amortization

2,884

2,770

      Change in deferred income taxes

38,780

42,524

      Change in tax credits, net

2,997

2,880

      Allowance for equity funds used during construction

(2,775)

(3,937)

      Changes in assets and liabilities



           Decrease (increase) in accounts receivable

32,253

(10,958)

           Increase in accrued unbilled revenues

(4,889)

(32,053)

           Decrease (increase) in fuel oil stock

43,974

(35,893)

           Increase in materials and supplies

(7,139)

(7,599)

           Increase in regulatory assets

(37,586)

(35,476)

           Increase (decrease) in accounts payable

(41,234)

5,931

           Change in prepaid and accrued income taxes and utility revenue taxes

(38,123)

(21,141)

           Contributions to defined benefit pension and other postretirement benefit plans

(40,586)

(52,086)

           Other increase in defined benefit pension and other postretirement benefit plans liability

41,575

31,166

           Change in other assets and liabilities

(9,419)

(37,942)

Net cash provided by (used in) operating activities

111,702

(21,525)

Cash flows from investing activities



Capital expenditures

(150,251)

(141,618)

Contributions in aid of construction

17,188

26,981

Other

623

-

Net cash used in investing activities

(132,440)

(114,637)

Cash flows from financing activities



Common stock dividends

(40,789)

(36,522)

Preferred stock dividends of HECO and subsidiaries

(998)

(998)

Proceeds from issuance of long-term debt

-

417,000

Repayment of long-term debt

-

(328,500)

Net increase in short-term borrowings from nonaffiliates and 



   affiliate with original maturities of three months or less

53,992

44,242

Other

(9)

(1,929)

Net cash provided by financing activities

12,196

93,293

Net decrease in cash and cash equivalents

(8,542)

(42,869)

Cash and cash equivalents, beginning of the period

17,159

48,806

Cash and cash equivalents, end of period

$      8,617

$      5,937




This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HECO's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and the consolidated financial statements and the notes thereto in HECO's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2013 and June 30, 2013 (when filed), as updated by SEC Forms 8-K. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.

 


American Savings Bank, F.S.B. 











STATEMENTS OF INCOME DATA











(Unaudited)


Three months ended


Six months ended



June 30, 


March 31, 


June 30, 


June 30

(in thousands)


2013


2013


2012


2013


2012

Interest income











Interest and fees on loans


$   43,624


$   42,603


$   44,473


$ 86,227


$ 89,361

Interest on investment and mortgage-related securities


3,234


3,464


3,297


6,698


7,102

     Total interest income


46,858


46,067


47,770


92,925


96,463

Interest expense











Interest on deposit liabilities


1,296


1,312


1,696


2,608


3,475

Interest on other borrowings


1,178


1,164


1,214


2,342


2,475

     Total interest expense


2,474


2,476


2,910


4,950


5,950

Net interest income


44,384


43,591


44,860


87,975


90,513

Provision (credit) for loan losses


(959)


1,858


2,378


899


5,924

Net interest income after provision (credit) for loan losses


45,343


41,733


42,482


87,076


84,589

Noninterest income











Fees from other financial services


7,996


7,643


7,463


15,639


14,800

Fee income on deposit liabilities


4,433


4,314


4,322


8,747


8,600

Fee income on other financial products


1,780


1,794


1,532


3,574


3,081

Mortgage banking income


2,003


3,346


2,185


5,349


4,220

Gain on sale of securities


1,226


-


134


1,226


134

Other income


1,731


1,592


1,315


3,323


2,675

     Total noninterest income


19,169


18,689


16,951


37,858


33,510

Noninterest expense











Compensation and employee benefits


20,063


20,088


18,696


40,151


37,342

Occupancy


4,219


4,123


4,241


8,342


8,466

Data processing


2,827


2,987


2,489


5,814


4,600

Services


2,328


2,103


2,221


4,431


4,004

Equipment


1,870


1,774


1,807


3,644


3,537

Other expense


8,500


7,595


8,106


16,095


14,813

     Total noninterest expense


39,807


38,670


37,560


78,477


72,762

Income before income taxes


24,705


21,752


21,873


46,457


45,337

Income taxes 


8,786


7,597


7,684


16,383


15,271

Net income


$   15,919


$   14,155


$   14,189


$ 30,074


$ 30,066

Comprehensive income


$     7,340


$   15,484


$   15,456


$ 22,824


$ 31,355












OTHER BANK INFORMATION (annualized %, except as of period end)









Return on average assets 


1.25


1.12


1.15


1.19


1.22

Return on average equity  


12.56


11.28


11.35


11.93


12.11

Return on average tangible common equity


15.00


13.49


13.58


14.25


14.50

Net interest margin


3.79


3.78


3.97


3.79


4.01

Net charge-offs to average loans outstanding


0.08


0.12


0.19


0.10


0.24

Efficiency ratio


62


61


60


62


58

As of period end











Nonperforming assets to loans outstanding and real estate owned *

1.56


1.89


1.84





Allowance for loan losses to loans outstanding 


1.04


1.11


1.06





Tier-1 leverage ratio *


9.3


9.1


9.2





Total risk-based capital ratio *


12.5


12.8


12.8





Tangible common equity to total assets


8.42


8.38


8.58





Dividend paid to HEI (via ASHI) ($ in millions) 


10


10


10


20


20

*  Regulatory basis






















This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and HEI's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2013 and June 30, 2013 (when filed), as updated by SEC Forms 8-K. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.

 

American Savings Bank, F.S.B. 



BALANCE SHEETS DATA



(Unaudited)




June 30,

December 31,

(in thousands)

2013

2012

Assets



Cash and cash equivalents

$      143,912

$      184,430

Available-for-sale investment and mortgage-related securities

560,172

671,358

Investment in stock of Federal Home Loan Bank of Seattle

94,281

96,022

Loans receivable held for investment

3,953,634

3,779,218

   Allowance for loan losses

(41,004)

(41,985)

      Loans receivable held for investment, net

3,912,630

3,737,233

Loans held for sale, at lower of cost or fair value

34,073

26,005

Other

241,513

244,435

Goodwill

82,190

82,190

     Total assets

$    5,068,771

$    5,041,673




Liabilities and shareholder's equity



Deposit liabilities–noninterest-bearing

$    1,168,937

$    1,164,308

Deposit liabilities–interest-bearing

3,107,306

3,065,608

Other borrowings

187,884

195,926

Other

102,516

117,752

     Total liabilities

4,566,643

4,543,594




Common stock

334,937

333,712

Retained earnings

189,837

179,763

Accumulated other comprehensive loss, net of tax benefits

(22,646)

(15,396)

     Total shareholder's equity

502,128

498,079

     Total liabilities and shareholder's equity

$    5,068,771

$    5,041,673




This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI's Annual Report on SEC Form 10-K for the year ended December 31, 2012 and HEI's Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2013 and June 30, 2013 (when filed), as updated by SEC Forms 8-K. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.

EXPLANATION OF HEI'S USE OF CERTAIN UNAUDITED NON-GAAP MEASURES

HEI and HECO management use certain non-GAAP measures to evaluate the performance of the utility. Management believes these non-GAAP measures provide useful information and are a better indicator of the utility's core operating activities. Core earnings as presented here may not be comparable to similarly titled measures used by other companies. The accompanying tables provide a reconciliation of reported GAAP1 earnings to non-GAAP core earnings for both the utility and HEI consolidated and the corresponding adjusted return on average common equity (ROACE).

The reconciling adjustments from GAAP earnings to core earnings are limited to the settlement charges for the partial write-off of utility assets in 2012 and 2011. For more information on the settlement charge recorded in 2012, see the Form 8-K filed on March 20, 2013.  Management does not consider these items to be representative of the company's fundamental core earnings. 




Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries

RECONCILIATION OF GAAPTO NON-GAAP MEASURES

(Unaudited)





Net Income


Twelve months ended


June 30,

(in millions)

2013

2012




GAAP (as reported)

$            135.8

$            159.7




Excluding special items (after-tax):



Settlement agreement for the partial writedown of certain utility assets

24.4

-




Settlement agreement for the partial writedown of the East Oahu Transmission Project (EOTP) Phase I costs

-

5.7




Non-GAAP (core)

$            160.2

$            165.5




Note:  Columns may not foot due to rounding






Twelve months ended


June 30,

Other measures:

2013

2012




Return on average common equity (ROACE) (simple average):

Based on GAAP 

8.5%

10.4%

Based on non-GAAP (core)2

10.0%

10.7%




1 U.S. Generally Accepted Accounting Principles.

2 Calculated as core net income divided by average GAAP common equity.

 


Hawaiian Electric Company, Inc. (HECO) and Subsidiaries

RECONCILIATION OF GAAP1TO NON-GAAP MEASURES

(Unaudited)













Net Income









Twelve months ended









June 30, 







(in millions)


2013

2012

















GAAP (as reported)


$      95.7

$    120.4

















Excluding special items (after-tax):










Settlement agreement for the partial writedown of certain utility assets


24.4

-

















Settlement agreement for the partial writedown of the EOTP Phase I costs


-

5.7

















Non-GAAP (core)


$     120.2

$    126.2

















Note:  Columns may not foot due to rounding






















Twelve months ended









June 30, 







Other measures:


2013

2012







Return on average common equity (ROACE) (simple average):







Based on GAAP 


6.6%

8.7%







Based on non-GAAP (core)2


8.3%

9.1%







































Hawaiian Electric Company, Inc. (HECO, Oahu)


Hawaii Electric Light Company, Inc. (HELCO)


Maui Electric Company, Limited (MECO)



Net Income


Net Income


Net Income



Twelve months ended


Twelve months ended


Twelve months ended



June 30, 


June 30, 


June 30, 

(in millions)


2013

2012


2013

2012


2013

2012











GAAP (as reported)


$      64.0

$     81.5


$     14.4

$       24.6


$   17.3

$         14.3











Excluding special items (after-tax):










Settlement agreement for the partial writedown of certain utility assets


17.7

-


3.4

-


3.4

-











Settlement agreement for the partial writedown of the EOTP Phase I costs


-

5.7


-

-


-

-











Non-GAAP (core)


$      81.7

$     87.3


$     17.8

$       24.6


$   20.7

$         14.3











Note:  Columns may not foot due to rounding






















Twelve months ended


Twelve months ended


Twelve months ended



June 30, 


June 30, 


June 30, 

Other measures:


2013

2012


2013

2012


2013

2012











Return on average common equity (ROACE) (simple average):







Based on GAAP 


6.8%

9.4%


5.2%

8.8%


7.4%

6.1%

Based on non-GAAP (core)2


8.7%

10.1%


6.4%

8.8%


8.8%

6.1%











1 U.S. Generally Accepted Accounting Principles.

2 Calculated as core net income divided by average GAAP common equity.

 

Contact:

Shelee M.T. Kimura



Manager, Investor Relations &   

Telephone: (808) 543-7384


Strategic Planning  

E-mail: skimura@hei.com

(Logo:  http://photos.prnewswire.com/prnh/20110411/LA80136LOGO)

SOURCE Hawaiian Electric Industries, Inc.



RELATED LINKS
http://www.hei.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.