-----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, Iy2CueHgXyXAZkIdciah8AY+8lbYlOKNyJfvWtVLLG/Mu0P7iFdnUrLKTKQFgudu iWLXp8uSwMEJMecDcM6TWA== 0001104659-10-012425.txt : 20100305 0001104659-10-012425.hdr.sgml : 20100305 20100305142149 ACCESSION NUMBER: 0001104659-10-012425 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20100305 ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20100305 DATE AS OF CHANGE: 20100305 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: 1934 Act SEC FILE NUMBER: 001-04955 FILM NUMBER: 10660162 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 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: 1934 Act SEC FILE NUMBER: 001-08503 FILM NUMBER: 10660161 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 8-K 1 a10-5252_18k.htm 8-K

 

 

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:  March 5, 2010

 


 

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.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 7.01.  Regulation FD Disclosure and Item 8.01.  Other Events.

 

2009 Statistical Supplement and Utility Forecast

 

On March 5, 2010, HEI filed its unaudited 2009 Statistical Supplement and Utility Forecast (see Exhibit 99). This document includes certain selected financial information for consolidated HEI, HECO and its subsidiaries and American Savings Bank, F.S.B. and its subsidiaries along with other selected data. In addition, this document includes the financial forecast for years 2010 through 2014 for HECO and its subsidiaries along with other selected forecast data.

 

HEI will post the 2009 Statistical Supplement and Utility Forecast on its website, www.hei.com, as well as a presentation entitled “HEI Financial Community Meetings, March 8-19, 2010.”

 

HEI intends to use its website, www.hei.com, as a means of disclosing material information and for complying with its disclosure obligations under SEC Regulation FD. Such disclosures will be included on HEI’s website under the heading “Financial Information”, “Other Reports” in the Investor Relations section. Accordingly, investors should routinely monitor such portions of the HEI website, in addition to following HEI’s press releases, SEC filings and public conference calls and webcasts. Also, for documents filed with the Public Utilities Commission of the State of Hawaii (PUC), investors can refer to the PUC website at http://dms.puc.hawaii.gov/dms/.

 

Item 9.01.  Financial Statements and Exhibits.

 

(d)  Exhibits

 

Exhibit 99

 

2009 Statistical Supplement and Utility Forecast

 

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/ James A. Ajello

 

/s/ Tayne S. Y. Sekimura

James A. Ajello

 

Tayne S. Y. Sekimura

Senior Financial Vice President, Treasurer, and
Chief Financial Officer

 

Senior Vice President and
Chief Financial Officer

(Principal Financial Officer of HEI)

 

(Principal Financial Officer of HECO)

Date: March 5, 2010

 

Date: March 5, 2010

 

1


EX-99 2 a10-5252_1ex99.htm EX-99

HEI Exhibit 99

 

[HEI logo]

 

2009 Statistical Supplement and Utility Forecast

 

Shelee M.T. Kimura

Manager, Investor Relations and Strategic Planning

Phone: 808-543-7384

Fax: 808-203-1164

E-mail: skimura@hei.com

 



 

Forward-Looking Statements

 

This report and other presentations made by Hawaiian Electric Industries, Inc. (HEI) and Hawaiian Electric Company, Inc. (HECO) and their subsidiaries 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 (collectively, the Company), 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.

 

Risks, uncertainties and other important factors that could cause actual results to differ materially from those in forward-looking statements and from historical results include, but are not limited to, the following:

 

·                  international, national and local economic conditions, including the state of the Hawaii tourism and construction industries, the strength or weakness of the Hawaii and continental U.S. real estate markets (including the fair value and/or the actual performance of collateral underlying loans held by American Savings Bank, F.S.B. (ASB), which could result in higher loan loss provisions and write-offs), decisions concerning the extent of the presence of the federal government and military in Hawaii, and the implications and potential impacts of current capital and credit market conditions and federal and state responses to those conditions, such as the Emergency Economic Stabilization Act of 2008 and the American Economic Recovery and Reinvestment Act of 2009;

·                  weather and natural disasters, such as hurricanes, earthquakes, tsunamis, lightning strikes and the potential effects of global warming (such as more severe storms and rising sea levels);

·                  global developments, including terrorist acts, the war on terrorism, continuing U.S. presence in Iraq and Afghanistan, potential conflict or crisis with North Korea or in the Middle East, Iran’s nuclear activities and potential H1N1 and avian flu pandemics;

·                  the timing and extent of changes in interest rates and the shape of the yield curve;

·                  the ability of the Company to access credit markets to obtain commercial paper and other short-term and long-term debt financing (including lines of credit) and to access capital markets to issue HEI common stock under volatile and challenging market conditions, and the cost of such financings, if available;

·                  the risks inherent in changes in the value of and market for securities available for sale and in the value of pension and other retirement plan assets;

·                  changes in laws, regulations, market conditions and other factors that result in changes in assumptions used to calculate retirement benefits costs and funding requirements and the fair value of ASB used to test goodwill for impairment;

·                  the impact of potential legislative and regulatory changes increasing oversight of and reporting by banks in response to the recent financial crisis and federal bailout of financial institutions;

·                  increasing competition in the electric utility and banking industries (e.g., increased self-generation of electricity may have an adverse impact on HECO’s revenues and increased price competition for deposits, or an outflow of deposits to alternative investments, may have an adverse impact on ASB’s cost of funds);

·                  the implementation of the Energy Agreement with the State of Hawaii and Consumer Advocate (Energy Agreement) setting forth the goals and objectives of a Hawaii Clean Energy Initiative (HCEI), revenue decoupling and the fulfillment by the utilities of their commitments under the Energy Agreement (given the Public Utilities Commission of the State of Hawaii (PUC) approvals needed; the PUC’s potential delay in considering HCEI-related costs; reliance by the Company on outside parties like the state, independent power producers (IPPs) and developers; potential changes in political support for the HCEI; and uncertainties surrounding wind power, the proposed undersea cable, biofuels, environmental assessments and the impacts of implementation of the HCEI on future costs of electricity);

·                  capacity and supply constraints or difficulties, especially if generating units (utility-owned or IPP-owned) fail or measures such as demand-side management (DSM), distributed generation (DG), combined heat and power (CHP) or other firm capacity supply-side resources fall short of achieving their forecasted benefits or are otherwise insufficient to reduce or meet peak demand;

·                  the risk to generation reliability when generation peak reserve margins on Oahu are strained;

·                  fuel oil price changes, performance by suppliers of their fuel oil delivery obligations and the continued availability to the electric utilities of their energy cost adjustment clauses (ECACs);

·                  the impact of fuel price volatility on customer satisfaction and political and regulatory support for the utilities;

 



 

·                  the risks associated with increasing reliance on renewable energy, as contemplated under the Energy Agreement, including the availability and cost of non-fossil fuel supplies for renewable generation and the operational impacts of adding intermittent sources of renewable energy to the electric grid;

·                  the ability of IPPs to deliver the firm capacity anticipated in their power purchase agreements (PPAs);

·                  the ability of the electric utilities to negotiate, periodically, favorable fuel supply and collective bargaining agreements;

·                  new technological developments that could affect the operations and prospects of HEI and its subsidiaries (including HECO and its subsidiaries and ASB and its subsidiaries) or their competitors;

·                  federal, state, county and international governmental and regulatory actions, such as changes in laws, rules and regulations applicable to HEI, HECO, ASB and their subsidiaries (including changes in taxation, regulatory changes resulting from the HCEI, environmental laws and regulations, the regulation of greenhouse gas emissions (GHG), healthcare reform, governmental fees and assessments (such as Federal Deposit Insurance Corporation assessments), potential carbon “cap and trade” legislation that may fundamentally alter costs to produce electricity and accelerate the move to renewable generation, and the potential elimination of the Office of Thrift Supervision (OTS) and the grandfathering provisions of the Gramm-Leach-Bliley Act of 1999 (Gramm Act) that have permitted HEI to own ASB);

·                  decisions by the PUC in rate cases (including the risks of delays in the timing of decisions, adverse changes in final decisions from interim decisions and the disallowance of project costs);

·                  decisions in other proceedings by the PUC and by other agencies and courts on land use, environmental and other permitting issues (such as required corrective actions, restrictions and penalties that may arise, for example with respect to environmental conditions or renewable portfolio standards (RPS));

·                  enforcement actions by the OTS and other governmental authorities (such as consent orders, required corrective actions, restrictions and penalties that may arise, for example, with respect to compliance deficiencies under banking regulations or with respect to capital adequacy);

·                  increasing operation and maintenance expenses and investment in infrastructure for the electric utilities, resulting in the need for more frequent rate cases;

·                  the ability of ASB to execute its performance improvement project, including the reduction of expenses through the conversion to the Fiserv Inc. bank platform system;

·                  the risks associated with the geographic concentration of HEI’s businesses and ASB’s loans, ASB’s concentration in a single product type (first mortgages) and ASB’s significant credit relationships (i.e., concentrations of large loans and/or credit lines with certain customers);

·                  changes in accounting principles applicable to HEI, HECO, ASB and their subsidiaries, including the adoption of International Financial Reporting Standards (IFRS) or new U.S. accounting standards, the potential discontinuance of regulatory accounting and the effects of potentially required consolidation of variable interest entities or required capital lease accounting for PPAs with IPPs;

·                  changes by securities rating agencies in their ratings of the securities of HEI and HECO and the results of financing efforts;

·                  faster than expected loan prepayments that can cause an acceleration of the amortization of premiums on loans and investments and the impairment of mortgage servicing assets of ASB;

·                  changes in ASB’s loan portfolio credit profile and asset quality which may increase or decrease the required level of allowance for loan losses and charge-offs;

·                  changes in ASB’s deposit cost or mix which may have an adverse impact on ASB’s cost of funds;

·                  the final outcome of tax positions taken by HEI, HECO, ASB and their subsidiaries;

·                  the risks of suffering losses and incurring liabilities that are uninsured; and

·                  other risks or uncertainties described elsewhere in this report and in other reports (e.g., Item 1A. Risk Factors) previously and subsequently filed by HEI and/or HECO with the Securities and Exchange Commission (SEC).

 

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, ASB 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.

 



 

SELECTED FINANCIAL INFORMATION

Hawaiian Electric Industries, Inc. and Subsidiaries

Unaudited

 

Years ended December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

2,309,590

 

$

3,218,920

 

$

2,536,418

 

$

2,460,904

 

$

2,215,564

 

Net income (loss) for common stock

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

83,011

 

$

90,278

 

$

84,779

 

$

108,001

 

$

127,444

 

Discontinued operations

 

 

 

 

 

(755

)

 

 

$

83,011

 

$

90,278

 

$

84,779

 

$

108,001

 

$

126,689

 

Basic earnings (loss) per common share

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.91

 

$

1.07

 

$

1.03

 

$

1.33

 

$

1.58

 

Discontinued operations

 

 

 

 

 

(0.01

)

 

 

$

0.91

 

$

1.07

 

$

1.03

 

$

1.33

 

$

1.57

 

Diluted earnings per common share

 

$

0.91

 

$

1.07

 

$

1.03

 

$

1.33

 

$

1.56

 

Dividends per common share

 

$

1.24

 

$

1.24

 

$

1.24

 

$

1.24

 

$

1.24

 

Operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

Electric utility

 

$

169,671

 

$

191,359

 

$

130,585

 

$

166,718

 

$

161,703

 

Bank

 

31,764

 

26,952

 

84,010

 

88,558

 

104,901

 

Other

 

(13,771

)

(14,154

)

(10,863

)

(15,880

)

4,818

 

 

 

$

187,664

 

$

204,157

 

$

203,732

 

$

239,396

 

$

271,422

 

Assets *

 

 

 

 

 

 

 

 

 

 

 

Electric utility

 

$

3,978,392

 

$

3,856,109

 

$

3,423,888

 

$

3,063,134

 

$

3,081,460

 

Bank

 

4,940,985

 

5,437,120

 

6,861,493

 

6,808,499

 

6,835,335

 

Other

 

5,625

 

1,853

 

8,535

 

19,576

 

34,782

 

 

 

$

8,925,002

 

$

9,295,082

 

$

10,293,916

 

$

9,891,209

 

$

9,951,577

 

Capital structure * **

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings - other than bank

 

$

41,989

 

$

 

$

91,780

 

$

176,272

 

$

141,758

 

Long-term debt, net - other than bank

 

1,364,815

 

1,211,501

 

1,242,099

 

1,133,185

 

1,142,993

 

Noncontrolling interest: cumulative preferred stock of subsidiaries

 

34,293

 

34,293

 

34,293

 

34,293

 

34,293

 

Common stock equity

 

1,441,648

 

1,389,454

 

1,275,427

 

1,095,240

 

1,216,630

 

 

 

$

2,882,745

 

$

2,635,248

 

$

2,643,599

 

$

2,438,990

 

$

2,535,674

 

Capital structure ratios * **

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings - other than bank

 

1.5

%

%

3.5

%

7.2

%

5.6

%

Long-term debt, net - other than bank

 

47.3

 

46.0

 

47.0

 

46.5

 

45.1

 

Noncontrolling interest: cumulative preferred stock of subsidiaries

 

1.2

 

1.3

 

1.3

 

1.4

 

1.3

 

Common stock equity

 

50.0

 

52.7

 

48.2

 

44.9

 

48.0

 

 

 

100.0

%

100.0

%

100.0

%

100.0

%

100.0

%

Key financial ratios

 

 

 

 

 

 

 

 

 

 

 

Market price to book value per common share *

 

134

%

144

%

149

%

202

%

172

%

Price earnings ratio ***

 

23.0

x

20.7

x

22.1

x

20.4

x

16.4

x

Return on average common equity

 

5.9

%

6.8

%

7.2

%

9.3

%

10.4

%

Return on average common equity - continuing operations ****

 

5.9

%

6.8

%

7.2

%

9.3

%

10.5

%

Indicated annual yield *

 

5.9

%

5.6

%

5.4

%

4.6

%

4.8

%

Dividend payout ratio

 

137

%

116

%

120

%

93

%

79

%

Dividend payout ratio - continuing operations

 

137

%

116

%

120

%

93

%

78

%

 


*

At December 31. (Note: Stockholders’ equity since December 31, 2006 includes a charge to accumulated other comprehensive income relating to retirement benefits pursuant to FASB Accounting Standards CodificationTM (ASC) Topic 715, as adjusted by the impact of decisions of the PUC. See Note 8, “Retirement benefits,” of HEI’s “Notes to Consolidated Financial Statements” incorporated in HEI’s 2009 Form 10-K.)

**

Excludes ASB’s deposit liabilities and other borrowings.

***

Calculated using December 31 market price per common share divided by basic earnings per common share from continuing operations.

****

Net income from continuing operations divided by average common equity.

 

See “Commitments and contingencies” in Note 3 and “Balance sheet restructure” and “Private-issue mortgage-related securities” in Note 4 of HEI’s “Notes to Consolidated Financial Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included or incorporated in HEI’s Form 10-K for discussions of certain contingencies that could adversely affect future results of operations and factors that affected reported results of operations.

 

On December 8, 2008, HEI completed the issuance and sale of 5 million shares of HEI’s common stock (without par value) under an omnibus shelf registration statement. The net proceeds from the sale amounted to approximately $110 million and were primarily used to repay HEI’s outstanding short-term debt and to make loans to HECO (principally to permit HECO to repay its short-term debt).

 

1



 

CONSOLIDATED BALANCE SHEETS

Hawaiian Electric Industries, Inc. and Subsidiaries

Unaudited

 

December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Cash and equivalents

 

$

502,443

 

$

182,903

 

$

145,855

 

$

177,630

 

$

151,513

 

Federal funds sold

 

1,479

 

532

 

64,000

 

79,671

 

57,434

 

Accounts receivable and unbilled revenues, net

 

241,116

 

300,666

 

294,447

 

248,639

 

249,473

 

Available-for-sale investment and mortgage-related securities

 

432,881

 

657,717

 

2,140,772

 

2,367,427

 

2,629,351

 

Investment in stock of Federal Home Loan Bank of Seattle

 

97,764

 

97,764

 

97,764

 

97,764

 

97,764

 

Loans receivable, net

 

3,670,493

 

4,206,492

 

4,101,193

 

3,780,461

 

3,566,834

 

Property, plant and equipment, net

 

3,088,611

 

2,907,376

 

2,743,410

 

2,647,490

 

2,542,776

 

Regulatory assets

 

426,862

 

530,619

 

284,990

 

112,349

 

110,718

 

Other

 

381,163

 

328,823

 

338,405

 

296,698

 

462,634

 

Goodwill, net

 

82,190

 

82,190

 

83,080

 

83,080

 

83,080

 

 

 

$

8,925,002

 

$

9,295,082

 

$

10,293,916

 

$

9,891,209

 

$

9,951,577

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

186,994

 

$

183,584

 

$

202,299

 

$

165,505

 

$

183,336

 

Deposit liabilities

 

4,058,760

 

4,180,175

 

4,347,260

 

4,575,548

 

4,557,419

 

Short-term borrowings - other than bank

 

41,989

 

 

91,780

 

176,272

 

141,758

 

Other bank borrowings

 

297,628

 

680,973

 

1,810,669

 

1,568,585

 

1,622,294

 

Long-term debt, net - other than bank

 

1,364,815

 

1,211,501

 

1,242,099

 

1,133,185

 

1,142,993

 

Deferred income taxes

 

188,875

 

143,308

 

155,337

 

106,780

 

207,997

 

Regulatory liabilities

 

288,214

 

288,602

 

261,606

 

240,619

 

219,204

 

Contributions in aid of construction

 

321,544

 

311,716

 

299,737

 

276,728

 

256,263

 

Other

 

700,242

 

871,476

 

573,409

 

518,454

 

369,390

 

 

 

7,449,061

 

7,871,335

 

8,984,196

 

8,761,676

 

8,700,654

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

1,265,157

 

1,231,629

 

1,072,101

 

1,028,101

 

1,018,966

 

Retained earnings

 

184,213

 

210,840

 

225,168

 

242,667

 

235,394

 

Accumulated other comprehensive loss, net of income tax benefits

 

(7,722

)

(53,015

)

(21,842

)

(175,528

)

(37,730

)

Common stock equity

 

1,441,648

 

1,389,454

 

1,275,427

 

1,095,240

 

1,216,630

 

Preferred stock

 

 

 

 

 

 

Noncontrolling interest: cumulative preferred stock of subsidiaries - not subject to mandatory redemption

 

34,293

 

34,293

 

34,293

 

34,293

 

34,293

 

 

 

1,475,941

 

1,423,747

 

1,309,720

 

1,129,533

 

1,250,923

 

 

 

$

8,925,002

 

$

9,295,082

 

$

10,293,916

 

$

9,891,209

 

$

9,951,577

 

 

Note: See HEI’s “Notes to Consolidated Financial Statements” included or incorporated in HEI’s Form 10-K for each year.

 

2



 

CONSOLIDATED STATEMENTS OF INCOME

Hawaiian Electric Industries, Inc. and Subsidiaries

Unaudited

 

Years ended December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

Electric utility

 

$

2,035,009

 

$

2,860,350

 

$

2,106,314

 

$

2,054,890

 

$

1,806,384

 

Bank

 

274,719

 

358,553

 

425,495

 

408,365

 

387,910

 

Other

 

(138

)

17

 

4,609

 

(2,351

)

21,270

 

 

 

2,309,590

 

3,218,920

 

2,536,418

 

2,460,904

 

2,215,564

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

Electric utility

 

1,865,338

 

2,668,991

 

1,975,729

 

1,888,172

 

1,644,681

 

Bank

 

242,955

 

331,601

 

341,485

 

319,807

 

283,009

 

Other

 

13,633

 

14,171

 

15,472

 

13,529

 

16,452

 

 

 

2,121,926

 

3,014,763

 

2,332,686

 

2,221,508

 

1,944,142

 

Operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

Electric utility

 

169,671

 

191,359

 

130,585

 

166,718

 

161,703

 

Bank

 

31,764

 

26,952

 

84,010

 

88,558

 

104,901

 

Other

 

(13,771

)

(14,154

)

(10,863

)

(15,880

)

4,818

 

 

 

187,664

 

204,157

 

203,732

 

239,396

 

271,422

 

Interest expense - other than on deposit liabilities and other bank borrowings

 

(76,330

)

(76,142

)

(78,556

)

(75,678

)

(75,309

)

Allowance for borrowed funds used during construction

 

5,268

 

3,741

 

2,552

 

2,879

 

2,020

 

Allowance for equity funds used during construction

 

12,222

 

9,390

 

5,219

 

6,348

 

5,105

 

Income from continuing operations before income taxes

 

128,824

 

141,146

 

132,947

 

172,945

 

203,238

 

Income taxes

 

43,923

 

48,978

 

46,278

 

63,054

 

73,900

 

Income from continuing operations

 

84,901

 

92,168

 

86,669

 

109,891

 

129,338

 

Less net income attributable to noncontrolling interest-preferred stock of subsidiaries

 

1,890

 

1,890

 

1,890

 

1,890

 

1,894

 

Income from continuing operations for common stock

 

83,011

 

90,278

 

84,779

 

108,001

 

127,444

 

DIscontinued operations - loss on disposal, net of income taxes

 

 

 

 

 

(755

)

Net income for common stock

 

$

83,011

 

$

90,278

 

$

84,779

 

$

108,001

 

$

126,689

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.91

 

$

1.07

 

$

1.03

 

$

1.33

 

$

1.58

 

Discontinued operations

 

 

 

 

 

(0.01

)

 

 

$

0.91

 

$

1.07

 

$

1.03

 

$

1.33

 

$

1.57

 

Diluted earnings per common share

 

$

0.91

 

$

1.07

 

$

1.03

 

$

1.33

 

$

1.56

 

Dividends per common share

 

$

1.24

 

$

1.24

 

$

1.24

 

$

1.24

 

$

1.24

 

Weighted-average number of common shares outstanding

 

91,396

 

84,631

 

82,215

 

81,145

 

80,828

 

Adjusted weighted-average shares

 

91,516

 

84,720

 

82,419

 

81,373

 

81,200

 

 

Note: See HEI’s “Notes to Consolidated Financial Statements” included or incorporated in HEI’s Form 10-K for each year.

 

3



 

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY INFORMATION

Hawaiian Electric Industries, Inc. and Subsidiaries

Unaudited

 

Years ended December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1

 

$

1,423,747

 

$

1,309,720

 

$

1,129,533

 

$

1,250,923

 

$

1,245,238

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

Net income

 

84,901

 

92,168

 

86,669

 

109,891

 

128,583

 

Net unrealized gains (losses) on securities:

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gains (losses) on securities arising during the period, net of taxes

 

12,938

 

(30,124

)

18,087

 

2,059

 

(29,335

)

Less: reclassification adjustment for net realized losses (gains) on securities included in net income, net of taxes

 

28,596

 

15,142

 

(668

)

(1,045

)

(105

)

Retirement benefit plans:

 

 

 

 

 

 

 

 

 

 

 

Net transition asset arising during the period, net of taxes

 

6,549

 

 

 

 

 

Prior service credit arising during the period, net of taxes

 

1,446

 

992

 

10,584

 

 

 

Net gains (losses) arising during the period, net of taxes

 

64,547

 

(175,240

)

17,825

 

 

 

Less: amortization of transition obligation, prior service credit and net losses recognized during the period in net periodic benefit cost, net of tax benefits

 

10,754

 

5,801

 

8,694

 

 

 

Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory asset, net of taxes

 

(75,756

)

152,256

 

(17,282

)

 

 

Less: reclassification adjustment for curtailment gain included in net income, net of taxes

 

 

 

(5,305

)

 

 

Minimum pension liability adjustment, net of taxes

 

 

 

 

1,254

 

(147

)

Comprehensive income

 

133,975

 

60,995

 

118,604

 

112,159

 

98,996

 

Adjustment to initially apply PUC D&Os related to retirement benefit plans, net of taxes

 

 

 

121,751

 

 

 

Adjustment to initially apply FIN 48

 

 

 

(228

)

 

 

Adjustment to initially apply SFAS No. 158, net of tax benefits

 

 

 

 

(140,066

)

 

Issuance of common stock:

 

 

 

 

 

 

 

 

 

 

 

Common stock offering

 

 

115,000

 

 

 

 

Dividend reinvestment and stock purchase plan

 

27,701

 

34,607

 

34,443

 

 

 

Retirement savings and other plans

 

4,771

 

15,267

 

10,804

 

10,270

 

6,095

 

Expenses and other, net

 

1,056

 

(5,346

)

(1,247

)

(1,135

)

2,781

 

Common stock dividends

 

(113,419

)

(104,606

)

(102,050

)

(100,728

)

(100,293

)

Preferred stock dividends

 

(1,890

)

(1,890

)

(1,890

)

(1,890

)

(1,894

)

Balance, December 31

 

$

1,475,941

 

$

1,423,747

 

$

1,309,720

 

$

1,129,533

 

$

1,250,923

 

 

Note: See HEI’s “Notes to Consolidated Financial Statements” included or incorporated in HEI’s Form 10-K for each year.

 

4



 

CONSOLIDATED CAPITALIZATION

Hawaiian Electric Industries, Inc. and Subsidiaries

Unaudited

 

December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(dollars in thousands, except par values)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings - other than bank (1)

 

$

41,989

 

$

 

$

91,780

 

$

176,272

 

$

141,758

 

Long-term debt - other than bank (1)

 

 

 

 

 

 

 

 

 

 

 

Long-term debt of electric utility subsidiaries (2)

 

1,057,815

 

904,501

 

885,099

 

766,185

 

765,993

 

HEI, medium-term notes, Series B 6.545 - 7.13% due in various years through 2012

 

7,000

 

7,000

 

7,000

 

17,000

 

27,000

 

HEI, medium-term notes, Series C 6.51% due in 2014

 

100,000

 

100,000

 

100,000

 

100,000

 

100,000

 

HEI, medium-term notes, Series C 7.56% paid in 2006

 

 

 

 

 

100,000

 

HEI, medium-term notes, Series D 4.00% paid in 2008

 

 

 

50,000

 

50,000

 

50,000

 

HEI, medium-term notes, Series D 5.25% due in 2013

 

50,000

 

50,000

 

50,000

 

50,000

 

50,000

 

HEI, medium-term notes, Series D 4.23% due in 2011

 

50,000

 

50,000

 

50,000

 

50,000

 

50,000

 

HEI, medium-term notes, Series D 6.141% due in 2011

 

100,000

 

100,000

 

100,000

 

100,000

 

 

 

 

1,364,815

 

1,211,501

 

1,242,099

 

1,133,185

 

1,142,993

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

1,265,157

 

1,231,629

 

1,072,101

 

1,028,101

 

1,018,966

 

Retained earnings

 

184,213

 

210,840

 

225,168

 

242,667

 

235,394

 

Accumulated other comprehensive income (loss)

 

(7,722

)

(53,015

)

(21,842

)

(175,528

)

(37,730

)

 

 

1,441,648

 

1,389,454

 

1,275,427

 

1,095,240

 

1,216,630

 

Preferred stock

 

 

 

 

 

 

Noncontrolling interest: cumulative preferred stock of subsidiaries - not subject to mandatory redemption

 

34,293

 

34,293

 

34,293

 

34,293

 

34,293

 

Total capitalization

 

$

2,882,745

 

$

2,635,248

 

$

2,643,599

 

$

2,438,990

 

$

2,535,674

 

 

LONG-TERM DEBT MATURITIES

Hawaiian Electric Industries, Inc. and Subsidiaries

Unaudited

 

(in thousands)

 

2010

 

2011

 

2012

 

2013

 

2014

 

Thereafter

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt - other than bank (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electric utilities

 

$

 

$

 

$

57,500

 

$

 

$

11,400

 

$

988,915

 

$

1,057,815

 

HEI

 

 

150,000

 

7,000

 

50,000

 

100,000

 

 

307,000

 

 

 

$

 

$

150,000

 

$

64,500

 

$

50,000

 

$

111,400

 

$

988,915

 

$

1,364,815

 

 


(1)

Excludes ASB’s deposit liabilities, other borrowings and intercompany borrowings.

(2)

See pages 14 and 15 for additional information.

 

Note: See HEI’s “Notes to Consolidated Financial Statements” included or incorporated in HEI’s Form 10-K for each year.

 

5


 


 

CONSOLIDATED STATEMENTS OF CASH FLOWS INFORMATION

Hawaiian Electric Industries, Inc. and Subsidiaries

Unaudited

 

Years ended December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

84,901

 

$

92,168

 

$

86,669

 

$

109,891

 

$

128,583

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

 

 

 

 

 

 

 

 

Depreciation of property, plant and equipment

 

151,282

 

150,977

 

147,881

 

141,184

 

133,892

 

Other amortization

 

5,389

 

5,085

 

11,878

 

10,778

 

8,269

 

Provision (reversal of allowance) for loan losses

 

32,000

 

10,334

 

5,700

 

1,400

 

(3,100

)

Writedown of utility plant

 

 

 

11,701

 

 

 

Gain on pension curtailment

 

 

(472

)

(8,809

)

 

 

Net losses (gains) on sale of investment and mortgage-related securities

 

32,034

 

17,376

 

(1,109

)

(1,735

)

(175

)

Other-than-temporary impairment on available-for-sale mortgage-related securities

 

15,444

 

7,764

 

 

 

 

Change in deferred income taxes

 

12,787

 

5,134

 

(34,624

)

(12,946

)

43

 

Change in excess tax benefits from share-based payment arrangements

 

310

 

(405

)

(195

)

(1,052

)

 

Allowance for equity funds used during construction

 

(12,222

)

(9,390

)

(5,219

)

(6,348

)

(5,105

)

Changes in assets and liabilities, net of effects from the disposal of businesses

 

 

 

 

 

 

 

 

 

 

 

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

 

59,550

 

(6,219

)

(45,808

)

834

 

(40,940

)

Increase (decrease) in accounts payable

 

3,410

 

(18,715

)

36,794

 

(17,831

)

36,282

 

Changes in other assets and liabilities

 

(100,417

)

6,177

 

14,372

 

63,767

 

(37,417

)

Net cash provided by operating activities

 

284,468

 

259,814

 

219,231

 

287,942

 

220,332

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

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

 

(297,864

)

(489,264

)

(402,071

)

(343,927

)

(486,432

)

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

 

357,233

 

610,521

 

652,083

 

542,702

 

727,901

 

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

 

185,134

 

1,311,596

 

1,109

 

61,131

 

28,039

 

Proceeds from sale of other investments

 

 

17

 

35,920

 

 

33,809

 

Net decrease (increase) in loans held for investment

 

484,960

 

(92,241

)

(315,786

)

(211,872

)

(304,212

)

Proceeds from sale of real estate acquired in settlement of loans

 

1,555

 

 

 

403

 

624

 

Capital expenditures

 

(304,761

)

(282,051

)

(218,297

)

(210,529

)

(223,675

)

Contributions in aid of construction

 

14,170

 

17,319

 

19,011

 

19,707

 

21,083

 

Other

 

1,199

 

1,116

 

5,902

 

1,708

 

909

 

Net cash provided by (used in) investing activities

 

$

441,626

 

$

1,077,013

 

$

(222,129

)

$

(140,677

)

$

(201,954

)

 

6



 

CONSOLIDATED STATEMENTS OF CASH FLOWS INFORMATION (Continued)

Hawaiian Electric Industries, Inc. and Subsidiaries

Unaudited

 

Years ended December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in deposit liabilities

 

$

(121,415

)

$

(167,085

)

$

(228,288

)

$

18,129

 

$

261,247

 

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

 

41,989

 

(91,780

)

(84,492

)

35,213

 

65,147

 

Proceeds from short-term borrowings with original maturities of greater than three months

 

 

 

 

44,891

 

 

Repayment of short-term borrowings with original maturities of greater than three months

 

 

 

 

(45,590

)

 

Net increase (decrease) in retail repurchase agreements

 

(3,829

)

(37,142

)

71,205

 

60,596

 

18,519

 

Proceeds from other bank borrowings

 

310,000

 

2,592,635

 

1,338,432

 

1,331,559

 

1,068,256

 

Repayments of other bank borrowings

 

(689,517

)

(3,682,119

)

(1,166,112

)

(1,446,995

)

(1,265,376

)

Proceeds from issuance of long-term debt

 

153,186

 

19,275

 

242,539

 

100,000

 

59,462

 

Repayment of long-term debt

 

 

(50,000

)

(136,000

)

(110,000

)

(84,000

)

Change in excess tax benefits from share-based payment arrangements

 

(310

)

405

 

195

 

1,052

 

 

Net proceeds from issuance of common stock

 

15,329

 

136,443

 

21,072

 

5,481

 

3,689

 

Common stock dividends

 

(96,843

)

(83,604

)

(81,489

)

(100,673

)

(100,238

)

Preferred stock dividends of noncontrolling interest

 

(1,890

)

(1,890

)

(1,890

)

(1,890

)

(1,894

)

Other

 

(12,307

)

1,615

 

(19,720

)

1,786

 

(5,015

)

Net cash provided by (used in) financing activities

 

(405,607

)

(1,363,247

)

(44,548

)

(106,441

)

19,797

 

Net cash provided by (used in) discontinued operations

 

 

 

 

7,530

 

(2,857

)

Net increase (decrease) in cash and equivalents and federal funds sold

 

320,487

 

(26,420

)

(47,446

)

48,354

 

35,318

 

Cash and equivalents and federal funds sold, January 1

 

183,435

 

209,855

 

257,301

 

208,947

 

173,629

 

Cash and equivalents and federal funds sold, December 31

 

$

503,922

 

$

183,435

 

$

209,855

 

$

257,301

 

$

208,947

 

 

Note: See HEI’s “Notes to Consolidated Financial Statements” included or incorporated in HEI’s Form 10-K for each year.

 

7



 

NET INCOME AND RETURN ON AVERAGE COMMON EQUITY BY COMPANY

Hawaiian Electric Industries, Inc. and Subsidiaries

Unaudited

 

Years ended December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) for common stock by company

 

 

 

 

 

 

 

 

 

 

 

Electric utilities

 

 

 

 

 

 

 

 

 

 

 

HECO

 

$

53,621

 

$

54,966

 

$

32,249

 

$

49,364

 

$

41,850

 

HELCO

 

15,761

 

19,641

 

8,252

 

6,947

 

12,623

 

MECO

 

10,224

 

17,792

 

11,785

 

18,789

 

18,505

 

Renewable Hawaii, Inc.

 

(11

)

(77

)

(83

)

(153

)

(176

)

Uluwehiokama Biofuels Corp.

 

(149

)

(347

)

(47

)

 

 

 

 

79,446

 

91,975

 

52,156

 

74,947

 

72,802

 

ASB consolidated

 

21,767

(1)

17,827

(2)

53,107

 

55,782

 

64,883

 

HEI and other

 

(18,202

)

(19,524

)

(20,484

)

(22,728

)

(10,241

)

Continuing operations

 

83,011

(1)

90,278

(2)

84,779

 

108,001

 

127,444

 

Discontinued operations

 

 

 

 

 

(755

)

Consolidated HEI

 

$

83,011

(1)

$

90,278

(2)

$

84,779

 

$

108,001

 

$

126,689

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average common equity by company

 

 

 

 

 

 

 

 

 

 

 

Electric utilities

 

 

 

 

 

 

 

 

 

 

 

HECO

 

6.7

%

7.6

%

5.0

%

7.9

%

6.5

%

HELCO

 

6.8

 

9.3

 

4.4

 

3.8

 

6.7

 

MECO

 

4.7

 

8.4

 

5.9

 

9.7

 

9.6

 

 

 

6.4

 

8.0

 

5.0

 

7.5

 

7.1

 

ASB consolidated

 

4.5

(1)

3.3

(2)

9.2

 

10.0

 

11.7

 

Consolidated HEI

 

5.9

%(1)

6.8

%(2)

7.2

%

9.3

%

10.4

%

Consolidated HEI–continuing operations (3)

 

5.9

%(1)

6.8

%(2)

7.2

%

9.3

%

10.5

%

 


(1)          Includes a $19.3 million after-tax charge related to ASB’s private-issue mortgage-related securities.  Excluding this $19.3 million charge, ASB consolidated net income would have been $41 million and return on average common equity would have been 8.3% and HEI consolidated net income would have been $102 million and return on average common equity would have been 7.2%.

 

(2)          Includes a $35.6 million after-tax charge related to ASB’s balance sheet restructuring in June 2008. Excluding this $35.6 million charge, ASB consolidated net income would have been $53 million and return on average common equity would have been 9.6% and HEI consolidated net income would have been $126 million and return on average common equity would have been 9.3%.

 

(3)          Net income from continuing operations divided by average common equity.

 

8



 

STATE OF HAWAII DATA

Unaudited

 

Years ended December 31, except as noted

 

2009

 

2008

 

2007

 

2006

 

2005

 

 

 

 

 

 

 

 

 

 

 

 

 

POPULATION BY COUNTY (thousands)*

 

 

 

 

 

 

 

 

 

 

 

Honolulu

 

na

 

905

 

900

 

904

 

900

 

Hawaii

 

na

 

176

 

173

 

169

 

164

 

Maui

 

na

 

144

 

141

 

140

 

139

 

Kauai

 

na

 

63

 

63

 

62

 

61

 

 

 

1,295

 

1,288

 

1,277

 

1,275

 

1,264

 

 

 

 

 

 

 

 

 

 

 

 

 

VISITOR DATA

 

 

 

 

 

 

 

 

 

 

 

Visitor arrivals by air (thousands)

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

4,671

 

4,902

 

5,583

 

5,550

 

5,313

 

International

 

1,748

 

1,811

 

1,914

 

1,978

 

2,103

 

 

 

6,419

 

6,713

 

7,497

 

7,528

 

7,416

 

Visitor arrivals by air, by county (thousands)**

 

 

 

 

 

 

 

 

 

 

 

Honolulu

 

3,974

 

4,194

 

4,695

 

4,688

 

4,732

 

Hawaii

 

1,201

 

1,321

 

1,622

 

1,614

 

1,522

 

Maui

 

1,907

 

2,129

 

2,522

 

2,498

 

2,346

 

Kauai

 

916

 

1,031

 

1,299

 

1,204

 

1,090

 

 

 

7,998

 

8,675

 

10,138

 

10,004

 

9,690

 

Visitor days (thousands)

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

47,109

 

49,497

 

55,100

 

54,584

 

52,705

 

International

 

13,445

 

13,633

 

14,035

 

14,562

 

14,983

 

 

 

60,554

 

63,130

 

69,135

 

69,146

 

67,688

 

 

 

 

 

 

 

 

 

 

 

 

 

Visitor expenditures by air (billions)

 

$

9.9

 

$

11.2

 

$

12.6

 

$

12.2

 

$

11.7

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSTRUCTION INDUSTRY DATA (millions)

 

 

 

 

 

 

 

 

 

 

 

Value of private building permits authorized***

 

$

1,999

 

$

2,907

 

$

3,585

 

$

3,770

 

$

3,492

 

Contracting tax base

 

na

 

$

7,987

 

$

8,073

 

$

7,223

 

$

6,024

 

 

 

 

 

 

 

 

 

 

 

 

 

FEDERAL GOVERNMENT DATA (millions)

 

 

 

 

 

 

 

 

 

 

 

Department of Defense expenditures

 

na

 

$

6,107

 

$

5,467

 

$

5,379

 

$

5,015

 

Other federal agencies expenditures

 

na

 

8,902

 

8,595

 

8,116

 

7,684

 

Total federal government expenditures

 

na

 

$

15,009

 

$

14,062

 

$

13,495

 

$

12,699

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER DATA

 

 

 

 

 

 

 

 

 

 

 

Real gross state product (billions of 2000 $s)

 

$

49.3

e

$

49.8

 

$

49.4

 

$

48.7

 

$

46.9

 

Honolulu Consumer Price Index (%)

 

0.5

 

4.3

 

4.8

 

5.9

 

3.8

 

Total wage and salary jobs (thousands)

 

603.9

 

625.4

 

631.4

 

624.0

 

608.6

 

Unemployment rate (average annual %)

 

7.0

 

3.9

 

2.6

 

2.5

 

2.7

 

 

Sources:  State of Hawaii Data Book 2008 (prior years), Hawaii State Department of Business, Economic Development & Tourism and Hawai’i Tourism Authority

 


*

Resident population estimates, including military personnel, excluding visitors, as of July 1

**

Visitors visiting more than one county are included in each county’s visitor arrival count. Visitor arrivals by county include domestic and international visitors.

***

Excludes public construction

e

Estimate

na

Not available

 

9



 

SELECTED DATA

Hawaiian Electric Company, Inc. and Subsidiaries

Unaudited

 

Years ended December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CAPITAL STRUCTURE *

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

$

 

$

41,550

 

$

28,791

 

$

113,107

 

$

136,165

 

Long-term debt, net

 

1,057,815

 

904,501

 

885,099

 

766,185

 

765,993

 

Preferred stock

 

34,293

 

34,293

 

34,293

 

34,293

 

34,293

 

Common stock equity

 

1,306,408

 

1,188,842

 

1,110,462

 

958,203

 

1,039,259

 

 

 

$

2,398,516

 

$

2,169,186

 

$

2,058,645

 

$

1,871,788

 

$

1,975,710

 

CAPITAL STRUCTURE RATIOS (%) *

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

 

1.9

 

1.4

 

6.1

 

6.9

 

Long-term debt, net

 

44.1

 

41.7

 

43.0

 

40.9

 

38.8

 

Preferred stock

 

1.4

 

1.6

 

1.7

 

1.8

 

1.7

 

Common stock equity

 

54.5

 

54.8

 

53.9

 

51.2

 

52.6

 

 

 

100.0

 

100.0

 

100.0

 

100.0

 

100.0

 

KEY FINANCIAL RATIOS (%)

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges (SEC method)

 

2.99

 

3.48

 

2.43

 

3.14

 

3.23

 

Authorized return on rate base **

 

 

 

 

 

 

 

 

 

 

 

HECO

 

8.66

 

8.66

 

9.16

 

9.16

 

9.16

 

HELCO

 

9.14

 

9.14

 

9.14

 

9.14

 

9.14

 

MECO

 

8.83

 

8.83

 

8.83

 

8.83

 

8.83

 

Earned return on simple average rate base ***

 

 

 

 

 

 

 

 

 

 

 

HECO

 

6.12

 

7.05

 

4.92

 

6.78

 

6.20

 

HELCO

 

5.70

 

7.21

 

6.68

 

4.47

 

6.08

 

MECO

 

4.99

 

7.03

 

5.59

 

7.21

 

8.21

 

Authorized return on simple average common equity **

 

 

 

 

 

 

 

 

 

 

 

HECO

 

10.70

 

10.70

 

11.40

 

11.40

 

11.40

 

HELCO

 

11.50

 

11.50

 

11.50

 

11.50

 

11.50

 

MECO

 

10.94

 

10.94

 

10.94

 

10.94

 

10.94

 

Earned return on simple average common equity ***

 

 

 

 

 

 

 

 

 

 

 

HECO

 

7.02

 

8.07

 

4.52

 

7.61

 

6.92

 

HELCO

 

6.89

 

9.39

 

7.79

 

3.70

 

6.86

 

MECO

 

4.76

 

8.54

 

5.78

 

9.51

 

9.81

 

RATE BASE (in millions, December 31)

 

 

 

 

 

 

 

 

 

 

 

HECO

 

$

1,371

 

$

1,180

 

$

1,175

 

$

1,149

 

$

1,140

 

HELCO

 

463

 

372

 

367

 

388

 

369

 

MECO

 

386

 

386

 

388

 

377

 

324

 

 

 

$

2,220

 

$

1,938

 

$

1,930

 

$

1,914

 

$

1,833

 

RATE BASE (in millions, simple average)

 

 

 

 

 

 

 

 

 

 

 

HECO

 

$

1,276

 

$

1,178

 

$

1,162

 

$

1,145

 

$

1,122

 

HELCO

 

417

 

369

 

378

 

379

 

359

 

MECO

 

386

 

387

 

382

 

350

 

329

 

 

 

$

2,079

 

$

1,934

 

$

1,922

 

$

1,874

 

$

1,810

 

DEPRECIATION AND AFUDC (%)

 

 

 

 

 

 

 

 

 

 

 

Composite annual depreciation rate

 

3.8

 

3.8

 

3.8

 

3.9

 

3.9

 

Accumulated depreciation as percent of gross plant *

 

37.9

 

38.0

 

38.1

 

37.7

 

37.1

 

Weighted-average AFUDC rate

 

8.1

 

8.1

 

8.1

 

8.4

 

8.5

 

NUMBER OF FULL-TIME EQUIVALENT EMPLOYEES *

 

 

 

 

 

 

 

 

 

 

 

HECO

 

1,601

 

1,525

 

1,474

 

1,438

 

1,432

 

HELCO

 

358

 

348

 

344

 

340

 

330

 

MECO

 

338

 

330

 

327

 

307

 

304

 

 

 

2,297

 

2,203

 

2,145

 

2,085

 

2,066

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATION AND MAINTENANCE EXPENSE BREAKDOWN BETWEEN LABOR AND NONLABOR FOR DECOUPLING REVENUE ADJUSTMENT MECHANISM****

 

 

 

 

 

 

 

 

 

 

 

 

(in millions, approximately)

 

LABOR

 

NONLABOR

 

 

 

 

 

 

 

HECO (per 2009 rate case second interim decision & order)

 

$

96

 

$

122

 

 

 

 

 

 

 

HELCO (per 2010 rate case request)

 

$

22

 

$

39

 

 

 

 

 

 

 

MECO (per 2010 rate case request)

 

$

21

 

$

42

 

 

 

 

 

 

 

 


*

At December 31

**

Reflects latest final decision and order. The return on rate base used by the PUC for purposes of the interim decision and orders in the HECO, HELCO and MECO rate cases is 8.45%, 8.33% and 8.67%, respectively. The return on average common equity used by the PUC in those interim decision and orders for the HECO, HELCO and MECO rate cases is 10.50%, 10.70%, 10.70%, respectively.

***

Calculated on a rate-making basis. For 2006 and subsequent years, excludes the amounts that were charged to accumulated other comprehensive income (AOCI) under SFAS No. 158.

****

Labor and Nonlabor amounts are from the working cash calculation for the respective company’s rate case docket for use as a proxy for estimating the revenue adjustment mechanism for O&M expenses.  The final amounts are subject to a final decision and order detailing implementation of revenue decoupling.

 

10



 

CONSOLIDATED BALANCE SHEETS

Hawaiian Electric Company, Inc. and Subsidiaries

Unaudited

 

December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Utility plant, at cost

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

$

4,748,787

 

$

4,320,040

 

$

4,169,428

 

$

4,038,264

 

$

3,782,565

 

Less accumulated depreciation

 

(1,848,416

)

(1,741,453

)

(1,647,113

)

(1,558,913

)

(1,456,537

)

Construction in progress

 

132,980

 

266,628

 

151,179

 

95,619

 

147,756

 

 

 

3,033,351

 

2,845,215

 

2,673,494

 

2,574,970

 

2,473,784

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

Cash and equivalents

 

73,578

 

6,901

 

4,678

 

3,859

 

143

 

Customer accounts receivable, net

 

133,286

 

166,422

 

146,112

 

125,524

 

123,895

 

Accrued unbilled revenues, net

 

84,276

 

106,544

 

114,274

 

92,195

 

91,321

 

Other accounts receivable, net

 

8,449

 

7,918

 

6,915

 

4,423

 

14,761

 

Fuel oil stock, at average cost

 

78,661

 

77,715

 

91,871

 

64,312

 

85,450

 

Materials and supplies, at average cost

 

35,908

 

34,532

 

34,258

 

30,540

 

26,974

 

Prepayments and other

 

16,201

 

12,626

 

9,490

 

9,695

 

114,902

 

 

 

430,359

 

412,658

 

407,598

 

330,548

 

457,446

 

Other long-term assets

 

 

 

 

 

 

 

 

 

 

 

Regulatory assets

 

426,862

 

530,619

 

284,990

 

112,349

 

110,718

 

Unamortized debt expense

 

14,288

 

14,503

 

15,635

 

13,722

 

14,361

 

Other

 

73,532

 

53,114

 

42,171

 

31,545

 

25,152

 

 

 

514,682

 

598,236

 

342,796

 

157,616

 

150,231

 

 

 

$

3,978,392

 

$

3,856,109

 

$

3,423,888

 

$

3,063,134

 

$

3,081,461

 

CAPITALIZATION AND LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

Capitalization

 

 

 

 

 

 

 

 

 

 

 

Common stock equity

 

$

1,306,408

 

$

1,188,842

 

$

1,110,462

 

$

958,203

 

$

1,039,259

 

Cumulative preferred stock - not subject to mandatory redemption

 

22,293

 

22,293

 

22,293

 

22,293

 

22,293

 

Noncontrolling interest - cumulative preferred stock of subsidiaires - not subject to mandatory redemption

 

12,000

 

12,000

 

12,000

 

12,000

 

12,000

 

Long-term debt, net

 

1,057,815

 

904,501

 

885,099

 

766,185

 

765,993

 

 

 

2,398,516

 

2,127,636

 

2,029,854

 

1,758,681

 

1,839,545

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings - nonaffiliates

 

 

 

28,791

 

113,107

 

136,165

 

Short-term borrowings - affiliate

 

 

41,550

 

 

 

 

Accounts payable

 

132,711

 

122,994

 

137,895

 

102,512

 

122,201

 

Interest and preferred dividends payable

 

21,223

 

15,397

 

14,719

 

10,645

 

9,990

 

Taxes accrued

 

156,092

 

220,046

 

189,637

 

152,182

 

133,583

 

Other

 

48,192

 

55,268

 

57,799

 

43,120

 

37,132

 

 

 

358,218

 

455,255

 

428,841

 

421,566

 

439,071

 

Deferred credits and other liabilities

 

 

 

 

 

 

 

 

 

 

 

Deferred income taxes

 

180,603

 

166,310

 

162,113

 

118,055

 

208,374

 

Regulatory liabilities

 

288,214

 

288,602

 

261,606

 

240,619

 

219,204

 

Unamortized tax credits

 

56,870

 

58,796

 

58,419

 

57,879

 

55,327

 

Other

 

374,427

 

447,794

 

183,318

 

189,606

 

63,677

 

 

 

900,114

 

961,502

 

665,456

 

606,159

 

546,582

 

Contributions in aid of construction

 

321,544

 

311,716

 

299,737

 

276,728

 

256,263

 

 

 

$

3,978,392

 

$

3,856,109

 

$

3,423,888

 

$

3,063,134

 

$

3,081,461

 

 

Note: See HECO’s “Notes to Consolidated Financial Statements” included or incorporated in HEI’s and HECO’s Form 10-K for each year.

 

11



 

CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS

Hawaiian Electric Company, Inc. and Subsidiaries

Unaudited

 

Years ended December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

$

2,026,672

 

$

2,853,639

 

$

2,096,958

 

$

2,050,412

 

$

1,801,710

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Fuel oil

 

671,970

 

1,229,193

 

774,119

 

781,740

 

639,650

 

Purchased power

 

499,804

 

689,828

 

536,960

 

506,893

 

458,120

 

Other operation

 

248,515

 

243,249

 

214,047

 

186,449

 

172,962

 

Maintenance

 

107,531

 

101,624

 

105,743

 

90,217

 

82,242

 

Depreciation

 

144,533

 

141,678

 

137,081

 

130,164

 

122,870

 

Taxes, other than income taxes

 

191,699

 

261,823

 

194,607

 

190,413

 

167,295

 

Income taxes

 

48,212

 

56,307

 

34,126

 

47,381

 

45,029

 

 

 

1,912,264

 

2,723,702

 

1,996,683

 

1,933,257

 

1,688,168

 

Operating income

 

114,408

 

129,937

 

100,275

 

117,155

 

113,542

 

Other income

 

 

 

 

 

 

 

 

 

 

 

Allowance for equity funds used during construction

 

12,222

 

9,390

 

5,219

 

6,348

 

5,105

 

Other, net

 

7,487

 

5,659

 

(627

)

3,123

 

3,538

 

 

 

19,709

 

15,049

 

4,592

 

9,471

 

8,643

 

Interest and other charges

 

 

 

 

 

 

 

 

 

 

 

Interest on long-term debt

 

51,820

 

47,302

 

45,964

 

43,109

 

43,063

 

Amortization of net bond premium and expense

 

3,254

 

2,530

 

2,440

 

2,198

 

2,212

 

Other interest charges

 

2,870

 

4,925

 

4,864

 

7,256

 

4,133

 

Allowance for borrowed funds used during construction

 

(5,268

)

(3,741

)

(2,552

)

(2,879

)

(2,020

)

 

 

52,676

 

51,016

 

50,716

 

49,684

 

47,388

 

Net income

 

81,441

 

93,970

 

54,151

 

76,942

 

74,797

 

Less net income attributable to noncontrolling interest - preferred stock of subsidiaries

 

915

 

915

 

915

 

915

 

915

 

Net income attributable to HECO

 

80,526

 

93,055

 

53,236

 

76,027

 

73,882

 

Preferred stock dividends of HECO

 

1,080

 

1,080

 

1,080

 

1,080

 

1,080

 

Net income for common stock

 

79,446

 

91,975

 

52,156

 

74,947

 

72,802

 

Retained earnings, January 1

 

802,590

 

724,704

 

700,252

 

654,686

 

632,779

 

Adjustment to initially apply FIN 48

 

 

 

(620

)

 

 

Common stock dividends

 

(55,000

)

(14,089

)

(27,084

)

(29,381

)

(50,895

)

Retained earnings, December 31

 

$

827,036

 

$

802,590

 

$

724,704

 

$

700,252

 

$

654,686

 

 

Note: See HECO’s “Notes to Consolidated Financial Statements” included or incorporated in HEI’s and HECO’s Form 10-K for each year.

 

12



 

CUMULATIVE PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION

Hawaiian Electric Company, Inc. and Subsidiaries

Unaudited

 

December 31

 

 

 

2009

 

2008

 

2007

 

2006

 

2005

 

(dollars in thousands, except par values)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Par value

 

 

 

12/31/09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C

 

4.25

%  

$

20

 

HECO

 

150,000

 

$

3,000

 

$

3,000

 

$

3,000

 

$

3,000

 

$

3,000

 

D

 

5.00

 

20

 

HECO

 

50,000

 

1,000

 

1,000

 

1,000

 

1,000

 

1,000

 

E

 

5.00

 

20

 

HECO

 

150,000

 

3,000

 

3,000

 

3,000

 

3,000

 

3,000

 

H

 

5.25

 

20

 

HECO

 

250,000

 

5,000

 

5,000

 

5,000

 

5,000

 

5,000

 

I

 

5.00

 

20

 

HECO

 

89,657

 

1,793

 

1,793

 

1,793

 

1,793

 

1,793

 

J

 

4.75

 

20

 

HECO

 

250,000

 

5,000

 

5,000

 

5,000

 

5,000

 

5,000

 

K

 

4.65

 

20

 

HECO

 

175,000

 

3,500

 

3,500

 

3,500

 

3,500

 

3,500

 

G

 

7.625

 

100

 

HELCO

 

70,000

 

7,000

 

7,000

 

7,000

 

7,000

 

7,000

 

H

 

7.625

 

100

 

MECO

 

50,000

 

5,000

 

5,000

 

5,000

 

5,000

 

5,000

 

 

 

 

 

 

 

 

 

1,234,657

 

$

34,293

 

$

34,293

 

$

34,293

 

$

34,293

 

$

34,293

 

 

Note: See HECO’s “Notes to Consolidated Financial Statements” included or incorporated in HEI’s and HECO’s Form 10-K for each year.

 

13



 

LONG-TERM DEBT

Hawaiian Electric Company, Inc. and Subsidiaries

Unaudited

 

December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OBLIGATIONS TO THE STATE OF HAWAII FOR THE REPAYMENT OF SPECIAL PURPOSE REVENUE BONDS

 

 

 

 

 

 

 

 

 

 

 

HECO

 

 

 

 

 

 

 

 

 

 

 

Series 1993, 5.45%, due 2023

 

$

50,000

 

$

50,000

 

$

50,000

 

$

50,000

 

$

50,000

 

Series 1996A, 6.20%, due 2026 *

 

 

 

 

48,000

 

48,000

 

Series 1996B, 5.875%, due 2026 *

 

 

 

 

14,000

 

14,000

 

Series 1997A, 5.65%, due 2027

 

50,000

 

50,000

 

50,000

 

50,000

 

50,000

 

Refunding series 1998A, 4.95%, due 2012

 

42,580

 

42,580

 

42,580

 

42,580

 

42,580

 

Refunding series 1999B, 5.75%, due 2018

 

30,000

 

30,000

 

30,000

 

30,000

 

30,000

 

Series 1999C, 6.20%, due 2029

 

35,000

 

35,000

 

35,000

 

35,000

 

35,000

 

Refunding series 1999D, 6.15%, due 2020

 

16,000

 

16,000

 

16,000

 

16,000

 

16,000

 

Refunding series 2000, 5.70%, due 2020

 

46,000

 

46,000

 

46,000

 

46,000

 

46,000

 

Series 2002A, 5.10%, due 2032

 

40,000

 

40,000

 

40,000

 

40,000

 

40,000

 

Refunding series 2003B, 5.00%, due 2022

 

40,000

 

40,000

 

40,000

 

40,000

 

40,000

 

Refunding series 2005A, 4.80%, due 2025

 

40,000

 

40,000

 

40,000

 

40,000

 

40,000

 

Series, 2007A, 4.65%, due 2037

 

100,000

 

100,000

 

100,000

 

 

 

Refunding series 2007B, 4.60%, due 2026

 

62,000

 

62,000

 

62,000

 

 

 

Series 2009, 6.50%, due 2039

 

90,000

 

 

 

 

 

 

 

$

641,580

 

$

551,580

 

$

551,580

 

$

451,580

 

$

451,580

 

 


* The proceeds from the Refunding Series 2007B SPRB were applied to refund this series of SPRB on March 27, 2007.

 

(Continued on next page)

 

14



 

LONG-TERM DEBT (Continued)

Hawaiian Electric Company, Inc. and Subsidiaries

Unaudited

 

December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OBLIGATIONS TO THE STATE OF HAWAII FOR THE REPAYMENT OF SPECIAL PURPOSE REVENUE BONDS

 

 

 

 

 

 

 

 

 

 

 

HELCO

 

 

 

 

 

 

 

 

 

 

 

Series 1993, 5.45%, due 2023

 

$

20,000

 

$

20,000

 

$

20,000

 

$

20,000

 

$

20,000

 

Series 1996A, 6.20%, due 2026 *

 

 

 

 

7,000

 

7,000

 

Series 1996B, 5.875%, due 2026 *

 

 

 

 

1,000

 

1,000

 

Series 1997A, 5.65%, due 2027

 

30,000

 

30,000

 

30,000

 

30,000

 

30,000

 

Refunding series 1998A, 4.95%, due 2012

 

7,200

 

7,200

 

7,200

 

7,200

 

7,200

 

Refunding series 1999A, 5.50%, due 2014

 

11,400

 

11,400

 

11,400

 

11,400

 

11,400

 

Refunding series 1999B, 5.75%, due 2018

 

11,000

 

11,000

 

11,000

 

11,000

 

11,000

 

Refunding series 1999D, 6.15%, due 2020

 

3,000

 

3,000

 

3,000

 

3,000

 

3,000

 

Refunding series 2003A, 4.75%, due 2020

 

14,000

 

14,000

 

14,000

 

14,000

 

14,000

 

Refunding series 2003B, 5.00%, due 2022

 

12,000

 

12,000

 

12,000

 

12,000

 

12,000

 

Refunding series 2005A, 4.8%, due 2025

 

5,000

 

5,000

 

5,000

 

5,000

 

5,000

 

Series 2007A, 4.65%, due 2037

 

20,000

 

20,000

 

20,000

 

 

 

Refunding series 2007B, 4.60%, due 2026

 

8,000

 

8,000

 

8,000

 

 

 

Series 2009, 6.50%, due 2039

 

60,000

 

 

 

 

 

 

 

201,600

 

141,600

 

141,600

 

121,600

 

121,600

 

 

 

 

 

 

 

 

 

 

 

 

 

MECO

 

 

 

 

 

 

 

 

 

 

 

Series 1993, 5.45%, due 2023

 

30,000

 

30,000

 

30,000

 

30,000

 

30,000

 

Series 1996A, 6.20%, due 2026 *

 

 

 

 

20,000

 

20,000

 

Series 1996B, 5.875%, due 2026 *

 

 

 

 

35,000

 

35,000

 

Series 1997A, 5.65%, due 2027

 

20,000

 

20,000

 

20,000

 

20,000

 

20,000

 

Refunding series 1998A, 4.95%, due 2012

 

7,720

 

7,720

 

7,720

 

7,720

 

7,720

 

Refunding series 1999B, 5.75%, due 2018

 

9,000

 

9,000

 

9,000

 

9,000

 

9,000

 

Refunding series 1999D, 6.15%, due 2020

 

1,000

 

1,000

 

1,000

 

1,000

 

1,000

 

Refunding series 2000, 5.70%, due 2020

 

20,000

 

20,000

 

20,000

 

20,000

 

20,000

 

Refunding series 2005A, 4.8%, due 2025

 

2,000

 

2,000

 

2,000

 

2,000

 

2,000

 

Series 2007A, 4.65%, due 2037

 

20,000

 

20,000

 

20,000

 

 

 

Refunding series 2007B, 4.60%, due 2026

 

55,000

 

55,000

 

55,000

 

 

 

 

 

164,720

 

164,720

 

164,720

 

144,720

 

144,720

 

 

 

1,007,900

 

857,900

 

857,900

 

717,900

 

717,900

 

Less funds on deposit with trustees

 

 

(3,186

)

(22,461

)

 

 

 

 

1,007,900

 

854,714

 

835,439

 

717,900

 

717,900

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER LONG-TERM DEBT (UNSECURED)

 

 

 

 

 

 

 

 

 

 

 

6.50%, series 2004, Junior subordinated deferrable interest debentures, due 2034

 

51,546

 

51,546

 

51,546

 

51,546

 

51,546

 

Long-term debt, including amounts due within one year

 

1,059,446

 

906,260

 

886,985

 

769,446

 

769,446

 

Less unamortized discount

 

(1,631

)

(1,759

)

(1,886

)

(3,261

)

(3,453

)

Long-term debt, net

 

$

1,057,815

 

$

904,501

 

$

885,099

 

$

766,185

 

$

765,993

 

 


*                 The proceeds from the Refunding Series 2007B SPRB were applied to refund this series of SPRB on March 27, 2007.

Note: See HECO’s “Notes to Consolidated Financial Statements” included or incorporated in HEI’s and HECO’s Form 10-K for each year.

 

15



 

CONSOLIDATED STATEMENTS OF CASH FLOWS

Hawaiian Electric Company, Inc. and Subsidiaries

Unaudited

 

 

Years ended December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

81,441

 

$

93,970

 

$

54,151

 

$

76,942

 

$

74,797

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation of utility plant

 

144,533

 

141,678

 

137,081

 

130,164

 

122,870

 

Other amortization

 

10,045

 

8,619

 

8,230

 

7,932

 

8,479

 

Writedown of utility plant

 

 

 

11,701

 

 

 

Deferred income taxes

 

14,762

 

3,882

 

(31,888

)

(9,671

)

19,086

 

Tax credits, net

 

(1,332

)

1,470

 

1,992

 

3,810

 

3,471

 

Allowance for equity funds used during construction

 

(12,222

)

(9,390

)

(5,219

)

(6,348

)

(5,105

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

Decrease (increase) in accounts receivable

 

32,605

 

(21,313

)

(23,080

)

8,709

 

(30,150

)

Decrease (increase) in accrued unbilled revenues

 

22,268

 

7,730

 

(22,079

)

(874

)

(12,293

)

Decrease (increase) in fuel oil stock

 

(946

)

14,156

 

(27,559

)

21,138

 

(26,880

)

Increase in materials and supplies

 

(1,376

)

(274

)

(3,718

)

(3,566

)

(3,206

)

Increase in regulatory assets

 

(17,597

)

(3,229

)

(1,968

)

(6,123

)

(5,036

)

Increase (decrease) in accounts payable

 

9,717

 

(14,901

)

35,383

 

(19,689

)

28,186

 

Changes in prepaid and accrued income and utility revenue taxes

 

(61,951

)

28,055

 

37,455

 

18,599

 

27,658

 

Other *

 

(2,571

)

(5,445

)

16,108

 

7,423

 

(16,244

)

Net cash provided by operating activities

 

217,376

 

245,008

 

186,590

 

228,446

 

185,633

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(302,327

)

(278,476

)

(209,821

)

(195,072

)

(217,610

)

Contributions in aid of construction

 

14,170

 

17,319

 

19,011

 

19,707

 

21,083

 

Other

 

340

 

1,157

 

5,440

 

407

 

1,680

 

Net cash used in investing activities

 

(287,817

)

(260,000

)

(185,370

)

(174,958

)

(194,847

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in short-term borrowings from nonaffiliates and affiliate with original

maturities of three months or less

 

(10,464

)

12,759

 

(84,316

)

(23,058

)

47,597

 

Proceeds from issuance of long-term debt

 

153,186

 

19,275

 

242,538

 

 

59,462

 

Repayment of long-term debt

 

 

 

(126,000

)

 

(47,000

)

Proceeds from issuance of common stock

 

61,914

 

 

 

 

 

Preferred stock dividends

 

(1,995

)

(1,995

)

(1,995

)

(1,995

)

(1,995

)

Common stock dividends

 

(55,000

)

(14,089

)

(27,084

)

(29,381

)

(50,895

)

Other

 

(10,523

)

1,265

 

(3,544

)

4,662

 

1,861

 

Net cash provided by (used in) financing activities

 

137,118

 

17,215

 

(401

)

(49,772

)

9,030

 

Net increase (decrease) in cash and equivalents

 

66,677

 

2,223

 

819

 

3,716

 

(184

)

Cash and equivalents, January 1

 

6,901

 

4,678

 

3,859

 

143

 

327

 

Cash and equivalents, December 31

 

$

73,578

 

$

6,901

 

$

4,678

 

$

3,859

 

$

143

 

 


* For years 2006 and prior, includes changes in prepaid pension benefit cost

Note: See HECO’s “Notes to Consolidated Financial Statements” included or incorporated in HEI’s and HECO’s Form 10-K for each year.

 

16



 

CUSTOMER, SALES AND REVENUE DATA

Hawaiian Electric Company, Inc. and Subsidiaries

Unaudited

 

Years ended December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

SERVICE AREA

 

 

 

 

 

 

 

 

 

 

 

Service area (square miles)

 

5,766

 

5,766

 

5,766

 

5,766

 

5,766

 

Service area population (estimated, in thousands)

 

1,231

 

1,224

 

1,214

 

1,213

 

1,203

 

CUSTOMER ACCOUNTS *

 

 

 

 

 

 

 

 

 

 

 

Residential

 

385,886

 

383,042

 

381,964

 

376,783

 

372,638

 

Commercial

 

54,527

 

55,243

 

55,869

 

55,493

 

54,647

 

Large light and power

 

558

 

543

 

554

 

567

 

559

 

Other

 

1,613

 

1,583

 

1,510

 

1,499

 

1,472

 

 

 

442,584

 

440,411

 

439,897

 

434,342

 

429,316

 

CUSTOMER ACCOUNTS BY COMPANY *

 

 

 

 

 

 

 

 

 

 

 

HECO

 

295,282

 

293,740

 

294,591

 

292,988

 

291,580

 

HELCO

 

79,813

 

79,606

 

78,983

 

76,417

 

73,835

 

MECO

 

67,489

 

67,065

 

66,323

 

64,937

 

63,901

 

Consolidated

 

442,584

 

440,411

 

439,897

 

434,342

 

429,316

 

KILOWATTHOUR SALES (millions)

 

 

 

 

 

 

 

 

 

 

 

Residential

 

2,893

 

2,925

 

3,035

 

3,022

 

3,008

 

Commercial

 

3,222

 

3,326

 

3,341

 

3,313

 

3,289

 

Large light and power

 

3,525

 

3,633

 

3,690

 

3,729

 

3,742

 

Other

 

50

 

52

 

52

 

52

 

51

 

 

 

9,690

 

9,936

 

10,118

 

10,116

 

10,090

 

KILOWATTHOUR SALES MIX (%)

 

 

 

 

 

 

 

 

 

 

 

Residential

 

29.9

 

29.4

 

30.0

 

29.9

 

29.8

 

Commercial

 

33.2

 

33.5

 

33.0

 

32.7

 

32.6

 

Large light and power

 

36.4

 

36.6

 

36.5

 

36.9

 

37.1

 

Other

 

0.5

 

0.5

 

0.5

 

0.5

 

0.5

 

 

 

100.0

 

100.0

 

100.0

 

100.0

 

100.0

 

KILOWATTHOUR SALES BY COMPANY (millions)

 

 

 

 

 

 

 

 

 

 

 

HECO

 

7,378

 

7,556

 

7,675

 

7,701

 

7,721

 

HELCO

 

1,120

 

1,141

 

1,163

 

1,149

 

1,117

 

MECO

 

1,192

 

1,239

 

1,280

 

1,266

 

1,252

 

Consolidated

 

9,690

 

9,936

 

10,118

 

10,116

 

10,090

 

KILOWATTHOUR SALES GROWTH BY COMPANY (%)

 

 

 

 

 

 

 

 

 

 

 

HECO

 

(2.4

)

(1.6

)

(0.3

)

(0.3

)

(0.2

)

HELCO

 

(1.8

)

(1.9

)

1.2

 

2.9

 

3.1

 

MECO

 

(3.8

)

(3.2

)

1.1

 

1.2

 

0.4

 

Consolidated

 

(2.5

)

(1.8

)

0.0

 

0.3

 

0.3

 

 


*                 At December 31

 

17



 

CUSTOMER, SALES AND REVENUE DATA (Continued)

Hawaiian Electric Company, Inc. and Subsidiaries

Unaudited

 

Years ended December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

ELECTRIC OPERATING REVENUES (thousands)

 

 

 

 

 

 

 

 

 

 

 

Electric sales revenue

 

 

 

 

 

 

 

 

 

 

 

Residential

 

$

690,656

 

$

935,061

 

$

713,241

 

$

690,425

 

$

607,031

 

Commercial

 

694,087

 

973,048

 

714,218

 

695,247

 

611,403

 

Large light and power

 

623,159

 

921,321

 

652,298

 

648,066

 

569,016

 

Other

 

10,721

 

15,069

 

10,791

 

10,530

 

9,200

 

 

 

2,018,623

 

2,844,499

 

2,090,548

 

2,044,268

 

1,796,650

 

Other revenues

 

8,049

 

9,140

 

6,410

 

6,144

 

5,060

 

 

 

$

2,026,672

 

$

2,853,639

 

$

2,096,958

 

$

2,050,412

 

$

1,801,710

 

ELECTRIC OPERATING REVENUES BY COMPANY (thousands)

 

 

 

 

 

 

 

 

 

 

 

HECO

 

$

1,384,885

 

$

1,954,772

 

$

1,385,136

 

$

1,365,593

 

$

1,204,220

 

HELCO

 

343,943

 

446,297

 

361,412

 

339,554

 

294,411

 

MECO

 

297,844

 

452,570

 

350,410

 

345,265

 

303,079

 

Consolidated

 

$

2,026,672

 

$

2,853,639

 

$

2,096,958

 

$

2,050,412

 

$

1,801,710

 

AVERAGE REVENUE PER KWH SOLD (cents)

 

 

 

 

 

 

 

 

 

 

 

Residential

 

23.87

 

31.97

 

23.50

 

22.85

 

20.18

 

Commercial

 

21.54

 

29.25

 

21.38

 

20.98

 

18.59

 

Large light and power

 

17.68

 

25.36

 

17.68

 

17.38

 

15.21

 

Other

 

21.36

 

28.81

 

20.81

 

20.44

 

17.92

 

 

 

20.83

 

28.63

 

20.66

 

20.21

 

17.81

 

AVERAGE REVENUE PER KWH SOLD BY COMPANY (cents)

 

 

 

 

 

 

 

 

 

 

 

HECO

 

18.70

 

25.78

 

17.99

 

17.68

 

15.56

 

HELCO

 

30.63

 

39.02

 

31.02

 

29.49

 

26.31

 

MECO

 

24.86

 

36.40

 

27.27

 

27.16

 

24.10

 

Consolidated

 

20.83

 

28.63

 

20.66

 

20.21

 

17.81

 

AVERAGE ANNUAL RESIDENTIAL USE PER CUSTOMER BY COMPANY (KWH)

 

 

 

 

 

 

 

 

 

 

 

HECO

 

7,759

 

7,868

 

8,214

 

8,248

 

8,360

 

HELCO

 

6,613

 

6,703

 

7,024

 

7,142

 

7,087

 

MECO

 

7,503

 

7,681

 

8,101

 

8,185

 

8,266

 

Consolidated

 

7,523

 

7,640

 

7,996

 

8,056

 

8,141

 

Average monthly electric sales revenue per residential customer

 

$

150

 

$

204

 

$

157

 

$

153

 

$

137

 

 

18



 

POWER SUPPLY DATA

Hawaiian Electric Company, Inc. and Subsidiaries

Unaudited

 

Years ended December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

ENERGY NET GENERATED AND PURCHASED (millions of KWH)

 

 

 

 

 

 

 

 

 

 

 

Net generated

 

 

 

 

 

 

 

 

 

 

 

Fuel oil

 

 

 

 

 

 

 

 

 

 

 

Steam-conventional (1)

 

4,972

 

5,193

 

5,379

 

5,430

 

5,239

 

Combustion turbine (1), (2)

 

98

 

125

 

134

 

294

 

361

 

Diesel

 

295

 

264

 

280

 

375

 

442

 

Combined-cycle (1)

 

723

 

662

 

671

 

488

 

432

 

 

 

6,088

 

6,244

 

6,464

 

6,587

 

6,474

 

Hydro and wind

 

29

 

18

 

15

 

24

 

11

 

Total net generated

 

6,117

 

6,262

 

6,479

 

6,611

 

6,485

 

Purchased

 

4,120

 

4,248

 

4,228

 

4,094

 

4,168

 

 

 

10,237

 

10,510

 

10,707

 

10,705

 

10,653

 

GENERATION MIX (%)

 

 

 

 

 

 

 

 

 

 

 

Fuel oil

 

 

 

 

 

 

 

 

 

 

 

Steam-conventional (1)

 

48.6

 

49.4

 

50.2

 

50.7

 

49.2

 

Combustion turbine (1),(2)

 

0.9

 

1.2

 

1.3

 

2.7

 

3.4

 

Diesel

 

2.9

 

2.5

 

2.6

 

3.5

 

4.1

 

Combined-cycle (1)

 

7.1

 

6.3

 

6.3

 

4.6

 

4.1

 

 

 

59.5

 

59.4

 

60.4

 

61.5

 

60.8

 

Hydro and wind

 

0.3

 

0.2

 

0.1

 

0.2

 

0.1

 

Total generation

 

59.8

 

59.6

 

60.5

 

61.7

 

60.9

 

Purchased

 

40.2

 

40.4

 

39.5

 

38.3

 

39.1

 

 

 

100.0

 

100.0

 

100.0

 

100.0

 

100.0

 

SYSTEM CAPABILITY (MW) * **

 

 

 

 

 

 

 

 

 

 

 

Company-owned generation

 

 

 

 

 

 

 

 

 

 

 

Steam-conventional (1)

 

1,205

 

1,205

 

1,205

 

1,205

 

1,205

 

Combustion turbine (1)

 

263

 

193

 

193

 

193

 

234

 

Diesel

 

177

 

176

 

174

 

158

 

148

 

Combined-cycle (1)

 

170

 

113

 

113

 

113

 

57

 

 

 

1,815

 

1,687

 

1,685

 

1,669

 

1,644

 

Firm purchase power contracts

 

532

 

540

 

538

 

535

 

540

 

 

 

2,347

 

2,227

 

2,223

 

2,204

 

2,184

 

SYSTEM CAPABILITY BY COMPANY (MW) * **

 

 

 

 

 

 

 

 

 

 

 

HECO

 

1,785

 

1,672

 

1,672

 

1,667

 

1,657

 

HELCO

 

278

 

272

 

270

 

267

 

272

 

MECO

 

284

 

283

 

281

 

270

 

255

 

 

 

2,347

 

2,227

 

2,223

 

2,204

 

2,184

 

SYSTEM PEAK LOAD BY COMPANY (MW) ***

 

 

 

 

 

 

 

 

 

 

 

HECO

 

1,213

 

1,186

 

1,216

 

1,266

 

1,230

 

HELCO

 

195

 

198

 

203

 

201

 

197

 

MECO

 

210

 

206

 

216

 

218

 

214

 

 

 

1,618

 

1,590

 

1,635

 

1,685

 

1,641

 

FUEL OIL DATA

 

 

 

 

 

 

 

 

 

 

 

Barrels of fuel oil consumed (thousands)

 

10,514

 

10,735

 

11,207

 

11,474

 

11,300

 

Average fuel oil cost per barrel

 

$

63.91

 

$

114.50

 

$

69.08

 

$

68.13

 

$

56.61

 

Average fuel oil cost per million BTU (cents)

 

1,026.4

 

1,840.0

 

1,108.2

 

1,094.1

 

908.6

 

Fuel oil cost per net KWH generated (cents)

 

11.036

 

19.687

 

11.977

 

11.869

 

9.880

 

BTU per net KWH generated by company

 

 

 

 

 

 

 

 

 

 

 

HECO

 

10,590

 

10,496

 

10,649

 

10,582

 

10,690

 

HELCO

 

13,085

 

13,984

 

13,903

 

13,823

 

13,443

 

MECO

 

10,323

 

10,240

 

10,190

 

10,580

 

10,493

 

Consolidated

 

10,753

 

10,700

 

10,807

 

10,848

 

10,873

 

OTHER DATA

 

 

 

 

 

 

 

 

 

 

 

Losses and system uses (%)

 

5.1

 

5.2

 

5.3

 

5.3

 

5.1

 

Reserve margin (%) ***

 

50.0

 

44.5

 

38.6

 

32.3

 

34.0

 

Annual load factor (%) ***

 

72.2

 

75.3

 

74.7

 

72.5

 

74.1

 

Cost per KWH purchased (cents)

 

12.132

 

16.238

 

12.700

 

12.380

 

10.993

 

 


*

At December 31

**

Excludes hydro run-of-river units

*** 

Net; noncoincident and nonintegrated

(1)

Combined-cycle data previously reported as steam-conventional and combustion turbine

(2)

Includes biodiesel

 

19



 

FORECAST: 2010 - 2014 ELECTRIC UTILITY COMPANIES

Hawaiian Electric Company, Inc. and Subsidiaries

Unaudited

Forecast as of December 14, 2009

 

Years ended December 31

 

2009

 

2010

 

2011

 

2012

 

2013

 

2014

 

2010-2014

 

(dollars in millions)

 

actual

 

 

 

 

 

 

 

 

 

 

 

 

 

USES OF CAPITAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transmission and distribution

 

$

140.8

 

$

156.5

 

$

169.6

 

$

188.1

 

$

178.2

 

$

153.5

 

$

845.9

 

Production

 

165.1

 

57.0

 

59.0

 

57.0

 

81.0

 

89.0

 

343.0

 

General

 

19.0

 

55.0

 

58.0

 

55.0

 

89.0

 

136.0

 

393.0

 

Total capital expenditures, including AFUDC

 

324.9

 

268.5

 

286.6

 

300.1

 

348.2

 

378.5

 

1,581.9

(1)

Less: AFUDC

 

16.3

 

9.7

 

11.6

 

11.0

 

13.2

 

17.2

 

62.7

 

Contributions in aid of construction

 

20.2

 

35.6

 

28.0

 

27.3

 

34.5

 

22.9

 

148.3

 

Net capital expenditures

 

288.4

 

223.2

 

247.0

 

261.8

 

300.5

 

338.4

 

1,370.9

 

Other requirements (2)

 

 

 

 

57.5

 

 

11.4

 

68.9

 

Total net requirements

 

$

288.4

 

$

223.2

 

$

247.0

 

$

319.3

 

$

300.5

 

$

349.8

 

$

1,439.8

 

SOURCES OF CAPITAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Internal funds after dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

158.1

 

$

169.2

 

$

169.6

 

$

177.9

 

$

181.9

 

$

191.5

 

$

890.1

 

Deferred income taxes and tax credits, net

 

13.4

 

(9.5

)

1.9

 

3.6

 

(1.7

)

(0.6

)

(6.3

)

Retained earnings and other, excluding AFUDC

 

(87.7

)

(23.8

)

(6.2

)

43.0

 

17.2

 

30.2

 

60.4

 

Total internal sources, excluding AFUDC

 

83.8

 

135.9

 

165.3

 

224.5

 

197.4

 

221.1

 

944.2

 

External financing sources

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt

 

(41.6

)

32.0

 

6.0

 

94.8

 

71.7

 

80.9

 

285.4

 

Drawdown of revenue bond proceeds

 

153.2

 

 

 

 

 

 

 

Common Stock Issuance

 

93.0

 

55.3

 

75.7

 

 

31.4

 

47.8

 

210.2

 

Total external financing sources

 

204.6

 

87.3

 

81.7

 

94.8

 

103.1

 

128.7

 

495.6

 

Total sources

 

$

288.4

 

$

223.2

 

$

247.0

 

$

319.3

 

$

300.5

 

$

349.8

 

$

1,439.8

 

Internal sources as a percent of Net capital expenditures

 

29

 

61

 

67

 

86

 

66

 

65

 

69

 

Total net requirements

 

29

 

61

 

67

 

70

 

66

 

63

 

66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CAPITAL STRUCTURE (at December 31)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total debt

 

$

1,057.8

 

$

1,092.0

 

$

1,098.1

 

$

1,135.4

 

$

1,207.1

 

$

1,276.6

 

 

 

Preferred stock

 

34.3

 

34.3

 

34.3

 

34.3

 

34.3

 

34.3

 

 

 

Common stock

 

1,306.4

 

1,385.1

 

1,504.9

 

1,553.2

 

1,639.8

 

1,745.5

 

 

 

Total capitalization

 

$

2,398.5

 

$

2,511.4

 

$

2,637.3

 

$

2,722.9

 

$

2,881.2

 

$

3,056.4

 

 

 

Capitalization ratios (%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total debt

 

44.1

 

43.5

 

41.6

 

41.7

 

41.9

 

41.8

 

 

 

Preferred stock

 

1.4

 

1.4

 

1.3

 

1.3

 

1.2

 

1.1

 

 

 

Common stock

 

54.5

 

55.1

 

57.1

 

57.0

 

56.9

 

57.1

 

 

 

Total capitalization

 

100.0

 

100.0

 

100.0

 

100.0

 

100.0

 

100.0

 

 

 

EPS SENSITIVITY TO CHANGES IN HECO CONSOLIDATED RETURN ON AVERAGE COMMON EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EPS impact of 100 bps improvement of ROE(3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EPS impact

 

$

0.14

 

$0.14 - $0.15

 

$0.15 - $0.16

 

$0.15 - $0.16

 

$0.16 - $0.17

 

$0.17 - $0.18

 

 

 

Common equity levels (dollars in billions)

 

$

1.3

 

$1.3 - $1.4

 

$1.4 - $1.5

 

$1.5 - $1.6

 

$1.6 - $1.7

 

$1.7 - $1.8

 

 

 

 


(1)  5-year capital investment plan of $1.6 billion.  Year over year rate base growth of approximately 5% per year.

(2)  May not include those securities sold at company’s option, the proceeds of which are used to repay long-term obligations prior to their maturity.

(3)  Assumes approximately 2 million shares added each year, based upon historical trends, from the Dividend reinvestment and stock purchase and other plans.

 

20



 

FORECAST: 2010 - 2014  ELECTRIC UTILITY COMPANIES

Hawaiian Electric Company, Inc. and Subsidiaries

Unaudited

Forecast as of December 14, 2009

 

 

Years ended December 31

 

2009

 

2010

 

2011

 

2012

 

2013

 

2014

 

 

 

actual

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED SALES AND GENERATION DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales (millions of KWH)(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

HECO (Oahu)

 

7,378

 

7,056

 

7,088

 

7,235

 

7,318

 

7,426

 

HELCO (Hawaii)

 

1,120

 

1,122

 

1,137

 

1,153

 

1,175

 

1,196

 

MECO (Maui, Lanai, Molokai)

 

1,192

 

1,131

 

1,139

 

1,148

 

1,153

 

1,164

 

Total

 

9,690

 

9,309

 

9,364

 

9,536

 

9,646

 

9,786

 

Increase (decrease) from previous year

 

(2.5

)%

(3.9

)%

0.6

%

1.8

%

1.1

%

1.5

%

Peak load (MW) (2)

 

1,618

 

1,552

 

1,564

 

1,598

 

1,612

 

1,640

 

Increase (decrease) from previous year

 

1.8

%

(4.1

)%

0.8

%

2.2

%

0.8

%

1.7

%

Generating capability at year-end (MW)

 

1,815

 

1,815

 

1,815

 

1,815

 

1,815

 

1,815

 

Firm purchased capacity at year-end (MW)

 

532

 

540

 

540

 

540

 

540

 

540

 

Generating capability and firm purchased capacity at year-end (MW)

 

2,347

 

2,355

 

2,355

 

2,355

 

2,355

 

2,355

 

Firm purchased capacity (%)

 

22.7

 

22.9

 

22.9

 

22.9

 

22.9

 

22.9

 

Reserve margin (%) (2)

 

50.0

 

51.8

 

50.5

 

47.4

 

46.1

 

43.6

 

Load factor (%) (2)

 

72.2

 

72.3

 

72.1

 

71.7

 

72.1

 

71.9

 

Net KWH generated and purchased (millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Company generated

 

6,117

 

5,734

 

5,634

 

5,537

 

5,503

 

5,305

 

Purchased power

 

4,120

 

4,089

 

4,247

 

4,529

 

4,677

 

5,022

 

Total

 

10,237

 

9,823

 

9,881

 

10,066

 

10,180

 

10,327

 

CONSOLIDATED GENERATION MIX BY SOURCE (%) (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

Fuel oil

 

76.9

 

74.4

 

73.1

 

70.6

 

69.6

 

66.2

 

Coal

 

14.7

 

15.5

 

14.8

 

15.5

 

15.7

 

15.0

 

Solid waste

 

3.2

 

3.4

 

3.2

 

4.1

 

4.9

 

5.0

 

Geothermal and other

 

5.2

 

6.7

 

8.9

 

9.8

 

9.8

 

13.8

 

Total

 

100.0

 

100.0

 

100.0

 

100.0

 

100.0

 

100.0

 

 


(1)          The Electric Utilities’ December 14, 2009 forecast, as provided on page 20, reflects the sales forecast shown above.  Subsequently, HECO Oahu's sales forecast was updated (HELCO and MECO sales forecast remained unchanged) and indicates that consolidated year-over-year changes in sales for 2010 thru 2014 are expected to be (0.9%), 0.3%, 0.6%, 0.6% and 1.0%, respectively.

 

Although the HECO Oahu sales forecast has changed, the forecast provided on page 20 assumes Revenue Decoupling (see "Decoupling proceeding" in the 2009 Annual Report) for Oahu.  As such, there is no significant impact to forecasted sales revenues.  Other potential impacts of changes in the sales forecast may include, but are not limited to cashflow timing, heat rate and other operation and maintenance expense variances.  These impacts are not expected to be significant to net income.

 

(2)          Noncoincident and nonintegrated

 

(3)          Includes company-owned and purchased generation

 

HAWAII PUBLIC UTILITIES COMMISSION

 

The Governor, with the consent of the Senate, appoints three full-time commissioners to staggered six-year terms. Commissioners can serve no more than 12 consecutive years. Statutes provide for the rendering of an “interim decision” in rate cases within 11 months of the filing of a complete application by the company. There is no statutory deadline for rendering a final decision.

 

Carlito P. Caliboso (an attorney previously in private practice) has been chairman of the PUC since April 30, 2003, and is serving in his second term which will expire on June 30, 2010.  Also serving as commissioners are John E. Cole (term expiring June 30, 2012) who previously served as the executive director of the Division of Consumer Advocacy, Department of Commerce and Consumer Affairs, and Leslie Kondo (term expiring June 30, 2014) who previously served as the director of the State Office of Information Practices.

 

CONSUMER ADVOCATE

 

Dean Nishina was appointed executive director of the Division of Consumer Advocacy effective December 7, 2009.  Prior to becoming the executive director, Mr. Nishina served as the public utilities/transportation administrator for the Division of Consumer Advocacy.

 

21



 

SELECTED DATA

American Savings Bank, F.S.B. and Subsidiaries

Unaudited

 

Years ended December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

 

 

 

 

 

 

 

 

 

 

 

 

REGULATORY CAPITAL (%)

 

 

 

 

 

 

 

 

 

 

 

Tangible capital

 

 

 

 

 

 

 

 

 

 

 

ASB

 

8.99

 

8.48

 

7.78

 

7.55

 

7.43

 

OTS requirement

 

1.50

 

1.50

 

1.50

 

1.50

 

1.50

 

Core (leverage) capital

 

 

 

 

 

 

 

 

 

 

 

ASB

 

8.99

 

8.48

 

7.78

 

7.55

 

7.43

 

OTS requirement

 

4.00

 

4.00

 

4.00

 

4.00

 

4.00

 

Risk-based capital

 

 

 

 

 

 

 

 

 

 

 

ASB

 

14.06

 

12.76

 

14.68

 

14.69

 

15.07

 

OTS requirement

 

8.00

 

8.00

 

8.00

 

8.00

 

8.00

 

KEY STATISTICS (%)

 

 

 

 

 

 

 

 

 

 

 

Return on assets (1)

 

 

 

 

 

 

 

 

 

 

 

ASB

 

0.43

 

0.29

 

0.78

 

0.82

 

0.95

 

Peers (2)

 

0.16

 

0.65

 

0.92

 

1.13

 

1.10

 

High performing peers (2)

 

0.85

 

0.99

 

1.14

 

1.37

 

1.36

 

Net interest margin

 

 

 

 

 

 

 

 

 

 

 

ASB

 

4.19

 

3.62

 

3.05

 

3.13

 

3.26

 

Peers (2)

 

3.43

 

3.53

 

3.52

 

3.67

 

3.81

 

High performing peers (2)

 

3.89

 

3.88

 

3.73

 

3.80

 

3.88

 

Efficiency ratio

 

 

 

 

 

 

 

 

 

 

 

ASB

 

72

 

85

 

66

 

65

 

61

 

Peers (2)

 

64

 

60

 

60

 

58

 

56

 

High performing peers (2)

 

54

 

54

 

54

 

55

 

54

 

Revenue growth

 

 

 

 

 

 

 

 

 

 

 

ASB

 

(8.67

)

(4.69

)

1.27

 

(1.58

)

5.96

 

Peers (2)

 

12.19

 

3.29

 

3.59

 

4.35

 

8.24

 

High performing peers (2)

 

14.43

 

8.00

 

3.89

 

3.20

 

7.13

 

Net charge-offs to loans outstanding

 

 

 

 

 

 

 

 

 

 

 

ASB

 

0.66

 

0.11

 

0.17

 

0.02

 

0.00

 

Peers (2)

 

1.18

 

0.58

 

0.22

 

0.09

 

0.11

 

High performing peers (2)

 

0.70

 

0.57

 

0.21

 

0.06

 

0.16

 

OTHER DATA

 

 

 

 

 

 

 

 

 

 

 

Branch locations *

 

60

 

63

 

63

 

64

 

64

 

Employees *

 

1,117

 

1,313

 

1,330

 

1,318

 

1,272

 

 


* At December 31

(1)          2009 net income included $19 million after tax charge related to the sale of private-issue mortgage-related securities. 2008 net income included $36 million after tax charge related to the balance sheet restructuring.

(2)          2009 peer group includes all publicly traded banks and thrifts between $3.5 billion and $8.0 billion in total assets.  2005-2008 peer group includes all publicly traded banks and thrifts between $4.0 and $9.0 billion in total assets.

 

22



 

CONSOLIDATED BALANCE SHEETS

American Savings Bank, F.S.B. and Subsidiaries

Unaudited

 

 

December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Cash and equivalents

 

$

427,375

 

$

169,298

 

$

204,023

 

$

252,041

 

$

207,564

 

Available-for-sale investment and mortgage-related securities

 

432,881

 

657,717

 

2,140,772

 

2,367,427

 

2,629,351

 

Investment in stock of Federal Home Loan Bank of Seattle, at cost

 

97,764

 

97,764

 

97,764

 

97,764

 

97,764

 

Loans receivable, net

 

3,670,493

 

4,206,492

 

4,101,193

 

3,780,461

 

3,566,834

 

Real estate acquired in settlement of loans, net

 

3,959

 

1,492

 

 

 

 

Other

 

222,123

 

220,290

 

232,656

 

223,666

 

244,443

 

Goodwill and other intangibles, net

 

86,390

 

84,067

 

85,085

 

87,140

 

89,379

 

 

 

$

4,940,985

 

$

5,437,120

 

$

6,861,493

 

$

6,808,499

 

$

6,835,335

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Deposit liabilities

 

$

4,058,760

 

$

4,180,175

 

$

4,347,260

 

$

4,575,548

 

$

4,557,419

 

Other borrowings

 

297,628

 

680,973

 

1,810,669

 

1,568,585

 

1,622,294

 

Other

 

92,129

 

98,598

 

108,800

 

104,470

 

98,189

 

 

 

4,448,517

 

4,959,746

 

6,266,729

 

6,248,603

 

6,277,902

 

 

 

 

 

 

 

 

 

 

 

 

 

Minority interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

329,439

 

328,162

 

325,467

 

323,154

 

321,538

 

Retained earnings

 

172,655

 

197,235

 

287,710

 

280,046

 

272,545

 

Accumulated other comprehensive income (loss)

 

(9,626

)

(48,023

)

(18,413

)

(43,304

)

(36,650

)

 

 

492,468

 

477,374

 

594,764

 

559,896

 

557,433

 

 

 

$

4,940,985

 

$

5,437,120

 

$

6,861,493

 

$

6,808,499

 

$

6,835,335

 

 

Note: See Note 4 to HEI’s “Notes to Consolidated Financial Statements” included or incorporated in HEI’s Form 10-K for each year.

 

23



 

CONSOLIDATED STATEMENTS OF INCOME

American Savings Bank, F.S.B. and Subsidiaries

Unaudited

 

Years ended December 31

 

2009

 

2008

 

2007

 

2006

 

2005

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

217,838

 

$

247,210

 

$

245,593

 

$

231,610

 

$

205,084

 

Interest and dividends on investment and mortgage-related securities

 

26,977

 

65,208

 

111,470

 

117,160

 

125,924

 

 

 

244,815

 

312,418

 

357,063

 

348,770

 

331,008

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

Interest on deposit liabilities

 

34,046

 

61,483

 

81,879

 

73,614

 

52,064

 

Interest on other borrowings

 

9,497

 

43,941

 

78,019

 

72,482

 

69,362

 

 

 

43,543

 

105,424

 

159,898

 

146,096

 

121,426

 

Net interest income

 

201,272

 

206,994

 

197,165

 

202,674

 

209,582

 

Provision (reversal of allowance) for loan losses

 

32,000

 

10,334

 

5,700

 

1,400

 

(3,100

)

Net interest income after provision (reversal of allowance) for loan losses

 

169,272

 

196,660

 

191,465

 

201,274

 

212,682

 

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

Fee income on deposit liabilities

 

30,713

 

28,332

 

26,342

 

18,779

 

16,989

 

Fees from other financial services

 

25,267

 

24,846

 

27,916

 

26,385

 

25,790

 

Fee income on other financial products

 

5,833

 

6,683

 

7,418

 

8,025

 

9,058

 

Gain (loss) on sale of securities

 

(32,034

)

(17,376

)

1,109

 

1,735

 

175

 

Loss on investments

 

(15,444

)

(7,764

)

 

 

 

Other income

 

15,569

 

11,414

 

5,647

 

4,671

 

4,890

 

 

 

29,904

 

46,135

 

68,432

 

59,595

 

56,902

 

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

73,990

 

77,858

 

61,937

 

68,478

 

69,082

 

Loss on early extinguishment of debt

 

760

 

39,843

 

 

 

 

Occupancy and equipment

 

30,906

 

34,434

 

35,468

 

33,529

 

30,777

 

Services

 

11,189

 

16,706

 

29,173

 

21,484

 

15,466

 

Data processing

 

14,382

 

10,678

 

10,458

 

10,164

 

10,598

 

Other expense

 

36,244

 

36,485

 

38,872

 

38,656

 

38,760

 

 

 

167,471

 

216,004

 

175,908

 

172,311

 

164,683

 

Income before minority interests and income taxes

 

31,705

 

26,791

 

83,989

 

88,558

 

104,901

 

Minority interests

 

 

 

 

 

45

 

Income taxes

 

9,938

 

8,964

 

30,882

 

32,776

 

39,969

 

Income before preferred stock dividends

 

21,767

 

17,827

 

53,107

 

55,782

 

64,887

 

Preferred stock dividends

 

 

 

 

 

4

 

Net income for common stock

 

$

21,767

(1)

$

17,827

(2)

$

53,107

 

$

55,782

 

$

64,883

 

 


(1)   Includes $19 million after tax charge related to the sale of private-issue mortgage-related securities.

(2)   Includes $36 million after tax charge related to the balance sheet restructuring.

 

Note: See Note 4 to HEI’s “Notes to Consolidated Financial Statements” included or incorporated in HEI’s Form 10-K for each year.

 

24


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