-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O1qFwwG2ZjztsZ7lsD7b+tQFc7lkQ4Z+N2AJJlUZoYybPDnLxuwzgOfmZxytSrUf MJusCWsWRQUaAJ7xlQLHEg== 0000898430-97-004336.txt : 19971017 0000898430-97-004336.hdr.sgml : 19971017 ACCESSION NUMBER: 0000898430-97-004336 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971016 ITEM INFORMATION: FILED AS OF DATE: 19971016 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAWAIIAN ELECTRIC INDUSTRIES INC CENTRAL INDEX KEY: 0000354707 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 990208097 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08503 FILM NUMBER: 97697004 BUSINESS ADDRESS: STREET 1: 900 RICHARDS ST CITY: HONOLULU STATE: HI ZIP: 96813 BUSINESS PHONE: 8085435662 MAIL ADDRESS: STREET 1: 900 RICHARDS STREET CITY: HONOLULU STATE: HI ZIP: 96813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAWAIIAN ELECTRIC CO INC CENTRAL INDEX KEY: 0000046207 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 990040500 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-04955 FILM NUMBER: 97697005 BUSINESS ADDRESS: STREET 1: 900 RICHARDS ST CITY: HONOLULU STATE: HI ZIP: 96813 BUSINESS PHONE: 8085437771 MAIL ADDRESS: STREET 1: 900 RICHARDS STREET CITY: HONOLULU STATE: HI ZIP: 96813 FORMER COMPANY: FORMER CONFORMED NAME: HAWAIIAN ELECTRIC CO LTD DATE OF NAME CHANGE: 19670212 8-K 1 CURRENT REPORT ON FORM 8-K 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 16, 1997
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. (808) 543-7771 - Hawaiian Electric Company, Inc. None -------------------------------------------------------------- (Former name or former address, if changed since last report.) ITEM 5. OTHER EVENTS On October 16, 1997, HEI issued the following news release: HONOLULU -- Hawaiian Electric Industries, Inc. (HEI) (NYSE - HE) reported net income for the three months ended September 30, 1997 of $24.1 million, or 77 cents per share, compared to $17.4 million, or 57 cents per share, in the same period of 1996. Excluding a nonrecurring charge by the company's savings bank subsidiary for a special assessment on thrifts by the Federal Deposit Insurance Corporation (FDIC), net income for the third quarter of 1996 would have been $25.7 million, or 84 cents per share. For the nine months ended September 30, 1997 net income was $63.6 million, or $2.04 per share, compared with $57.6 million, or $1.91 per share, in the same period last year. Excluding the FDIC special assessment, 1996 year-to-date net income would have been $65.9 million, or $2.18 per share. "Tough economic conditions in Hawaii dampened our utilities' kilowatthour sales this quarter," said Robert F. Clarke, HEI president and chief executive officer. "Our savings bank continues to perform well despite difficult market conditions and is close to concluding its purchase of Bank of America's Hawaii operations." Kilowatthour sales for the quarter and nine months were down 0.3% and 0.5%, respectively, from the same periods of 1996. Hawaii's tourism industry saw a 0.9% decrease in visitor arrivals in Hawaii through August compared with the same period of 1996, which impacted kilowatthour sales for the quarter and first nine months. In addition, cooler temperatures on Oahu through September resulted in lower residential and commercial air conditioning usage. Electric utility operating income during the quarter declined 4% to $48.1 million compared with $50.1 million in the same quarter of 1996. Operating income for the nine months was $127.1 million versus $132.2 million in the same period last year. In addition to lower kilowatthour sales, higher maintenance costs and depreciation from plant additions also contributed to the decline in year-to-date operating income. The recent twelve month return on average common equity for the Oahu utility declined to 10.0% compared to 11.5% for the twelve months ended September 30, 1996. HEI's savings bank subsidiary reported a 21% increase in operating income to $11.8 million for the quarter compared with $9.8 million in the same quarter of 1996, excluding the nonrecurring FDIC assessment. Operating income for the nine months was $36.4 million versus $30.0 million in the same period last year without the FDIC assessment. Results in 1997 are up due to increased net interest income, lower deposit insurance premiums and expense controls, partly offset by larger additions to the provision for loan losses. The bank's interest rate spread -- the difference between the yield on earning assets and cost of funds -- was 2.96% for the nine months versus 2.80% in the same period last year. The bank's year-to-date average earning assets were up 5% from the same period of 1996. In May 1997, American Savings Bank signed a definitive agreement to acquire substantially all of the Hawaii deposits of Bank of America and most of its branches and its Hawaii-based loans. "We are pleased that regulatory review of the acquisition is proceeding smoothly," Clarke said. "Subject to all conditions being met, the acquisition looks like it will close by the end of this year. At closing, we expect to incur acquisition related expenses of approximately $1.9 million after tax." HEI's real estate development subsidiary has been negatively impacted by the soft Hawaii real estate market. This quarter, the company took a $2.5 million noncash after-tax charge on its investment in a real estate project, which was mostly offset by an investment gain recognized by HEI's passive investment company. Last week, HEI's maritime freight transportation subsidiary received a final decision and order from the Hawaii Public Utilities Commission in its 1997 general rate case. The order authorized a 4.7%, or $1.7 million increase in annual revenues, based on a 14.1% return on average common equity. 1 Hawaiian Electric Industries, Inc. is a diversified holding company that delivers essential services to the people of Hawaii. Its core businesses are electric utilities and a savings bank. Other smaller businesses include maritime freight transportation, residential real estate development and passive investments. A subsidiary was formed in 1995 to pursue independent power projects in Asia and the Pacific. NOTE: THIS REPORT AND OTHER PRESENTATIONS MADE BY HEI AND ITS SUBSIDIARIES CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE EXCHANGE ACT. EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS SET FORTH ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS. POTENTIAL RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, SUCH FACTORS AS THE EFFECT OF ECONOMIC CONDITIONS; PRODUCT DEMAND AND MARKET ACCEPTANCE RISKS; COMPETITIVE PRODUCTS AND PRICING; CAPACITY AND SUPPLY CONSTRAINTS OR DIFFICULTIES; NEW TECHNOLOGICAL DEVELOPMENTS; GOVERNMENTAL AND REGULATORY ACTIONS; ACTUAL PURCHASES UNDER AGREEMENTS; THE RESULTS OF FINANCING EFFORTS; THE TIMING AND EXTENT OF CHANGES IN INTEREST RATES; THE FINAL PURCHASE PRICE AND RELATED ADJUSTMENTS MADE PURSUANT TO THE BANK OF AMERICA, FSB - HAWAII OPERATIONS PURCHASE AND ASSUMPTION AGREEMENT; AND THE RESULTS OF INTEGRATION OF THE BANK OF AMERICA, FSB - HAWAII OPERATIONS WITH THE OPERATIONS OF ASB. INVESTORS ARE ALSO DIRECTED TO CONSIDER OTHER RISKS AND UNCERTAINTIES DISCUSSED IN OTHER PERIODIC REPORTS PREVIOUSLY AND SUBSEQUENTLY FILED BY HEI AND/OR HAWAIIAN ELECTRIC COMPANY, INC. WITH THE SECURITIES AND EXCHANGE COMMISSION. Hawaiian Electric Industries, Inc. and subsidiaries CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Three months Nine months Twelve months (in thousands, except ended September 30, ended September 30, ended September 30, per share amounts) 1997 1996 1997 1996 1997 1996 - -------------------------------------------------------------------------------------------------------------------- REVENUES Electric utility $282,234 $284,417 $ 831,314 $ 797,241 $1,114,941 $1,047,050 Savings bank 71,625 68,281 210,211 200,351 281,262 269,494 Other 13,262 15,460 45,042 43,978 59,366 57,898 -------- -------- ---------- ---------- ---------- ---------- 367,121 368,158 1,086,567 1,041,570 1,455,569 1,374,442 -------- -------- ---------- ---------- ---------- ---------- EXPENSES Electric utility 234,089 234,285 704,179 664,995 946,439 880,144 Savings bank 59,778 58,461 173,843 170,373 234,816 229,229 FDIC special assessment* -- 13,835 -- 13,835 -- 13,835 Other 16,942 16,834 52,711 49,477 73,124 67,734 -------- -------- ---------- ---------- ---------- ---------- 310,809 323,415 930,733 898,680 1,254,379 1,190,942 -------- -------- ---------- ---------- ---------- ---------- OPERATING INCOME (LOSS) Electric utility 48,145 50,132 127,135 132,246 168,502 166,906 Savings bank 11,847 (4,015) 36,368 16,143 46,446 26,430 Other (3,680) (1,374) (7,669) (5,499) (13,758) (9,836) -------- -------- ---------- ---------- --------- ---------- 56,312 44,743 155,834 142,890 201,190 183,500 -------- -------- ---------- ---------- --------- ----------
2 Hawaiian Electric Industries, Inc. and subsidiaries CONSOLIDATED STATEMENTS OF INCOME (continued) (unaudited)
Three months Nine months Twelve months (in thousands, except ended September 30, ended September 30, ended September 30, per share amounts) 1997 1996 1997 1996 1997 1996 - ---------------------------------------------------------------------------------------------------------------------- Interest expense-- electric utility and other (15,929) (16,060) (48,074) (48,309) (65,597) (64,771) Allowance for borrowed funds used during construction 1,522 1,098 4,658 3,602 6,918 4,882 Preferred stock dividends of electric utility subsidiaries (1,563) (1,667) (4,697) (5,008) (6,218) (6,710) Preferred securities distributions of trust subsidiaries (3,064) -- (7,503) -- (7,503) -- Allowance for equity funds used during construction 2,654 2,399 8,079 7,197 12,623 9,824 -------- -------- -------- -------- ------- -------- INCOME BEFORE INCOME TAXES 39,932 30,513 108,297 100,372 141,413 126,725 Income taxes 15,794 13,141 44,701 42,768 56,763 53,506 -------- -------- -------- -------- -------- -------- NET INCOME $ 24,138 $ 17,372 $ 63,596 $ 57,604 $ 84,650 $ 73,219 ======== ======== ======== ======== ======== ======== Per common share Earnings $ 0.77 $ 0.57 $ 2.04 $ 1.91 $ 2.72 $ 2.44 ======== ======== ======== ======== ======== ======== Dividends $ 0.61 $ 0.60 $ 1.83 $ 1.80 $ 2.44 $ 2.40 ======== ======== ======== ======== ======== ======== Book value (end of period) $ 25.35 $ 24.89 ======== ======== Market price (end of period) $ 37.44 $ 34.13 ======== ======== Weighted average number of common shares outstanding 31,528 30,465 31,244 30,178 31,108 30,025 ======== ======== ======== ======== ======== ========
* On September 30, 1996, President Clinton signed the omnibus appropriations bill, which included a special one-time assessment by the Federal Deposit Insurance Corporation (FDIC) on all deposits insured by the Savings Association Insurance Fund held as of March 31, 1995. ASB's assessment was $8.3 million after-tax and was accrued in September 1996. 3
Hawaiian Electric Industries, Inc. and subsidiaries CONSOLIDATED STATEMENTS OF INCOME (continued) (unaudited) Three months Nine months Twelve months (in thousands, except ended September 30, ended September 30, ended September 30, per share amounts) 1997 1996 1997 1996 1997 1996 - ---------------------------------------------------------------------------------------------------------------------------- NET INCOME EXCLUDING FDIC SPECIAL ASSESSMENT $24,138 $25,705 $63,596 $65,937 $84,650 $81,552 ======= ======= ======= ======== ======= ========= EARNINGS PER COMMON SHARE EXCLUDING FDIC SPECIAL ASSESSMENT $0.77 $0.84 $2.04 $2.18 $2.72 $2.72 ======= ======= ======= ======= ======= =========
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, 1996 and the consolidated financial statements and the notes thereto in HEI's Quarterly Report on SEC Form 10-Q for the quarters ended March 31, 1997, June 30, 1997 and September 30, 1997 (when filed). Results of operations for interim periods are not necessarily indicative of results to be expected for the full year. 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/ Ernest T. Shiraki - --------------------------------- ------------------------------------ Robert F. Mougeot Ernest T. Shiraki Financial Vice President and Controller of HECO Chief Financial Officer of HEI (Principal Accounting Officer of HECO) (Principal Financial Officer of HEI) Date: October 16, 1997 Date: October 16, 1997 4 -----END PRIVACY-ENHANCED MESSAGE-----