EX-12.2 3 dex122.htm HECO SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES HECO Subsidiaries Computation of ratio of earnings to fixed charges

HECO Exhibit 12.2

Hawaiian Electric Company, Inc. and Subsidiaries

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(unaudited)

 

    

Nine months ended

September 30

    Years ended December 31  
      2006     2005     2005     2004     2003     2002     2001  
(dollars in thousands)                                           

Fixed charges

              

Total interest charges

   $ 39,406     $ 37,137     $ 49,408     $ 49,588     $ 44,341     $ 44,232     $ 47,056  

Interest component of rentals

     1,420       928       1,311       909       820       663       728  

Pretax preferred stock dividend requirements of subsidiaries

     1,102       1,098       1,461       1,459       1,430       1,434       1,433  

Preferred securities distributions of trust

subsidiaries

     —         —         —         —         7,675       7,675       7,675  
                                                        

Total fixed charges

   $ 41,928     $ 39,163     $ 52,180     $ 51,956     $ 54,266     $ 54,004     $ 56,892  
                                                        

Earnings

              

Income before preferred stock dividends of HECO

   $ 62,750     $ 55,426     $ 73,882     $ 82,257     $ 79,991     $ 91,285     $ 89,380  

Fixed charges, as shown

     41,928       39,163       52,180       51,956       54,266       54,004       56,892  

Income taxes (see note below)

     38,468       33,671       44,623       49,479       49,824       56,658       55,416  

Allowance for borrowed funds used during construction

     (2,259 )     (1,460 )     (2,020 )     (2,542 )     (1,914 )     (1,855 )     (2,258 )
                                                        

Earnings available for fixed charges

   $ 140,887     $ 126,800     $ 168,665     $ 181,150     $ 182,167     $ 200,092     $ 199,430  
                                                        

Ratio of earnings to fixed charges

     3.36       3.24       3.23       3.49       3.36       3.71       3.51  
                                                        

Note:

              

Income taxes is comprised of the following:

              

Income tax expense relating to operating income from regulated activities

   $ 38,909     $ 33,785     $ 45,029     $ 50,059     $ 50,175     $ 56,729     $ 55,434  

Income tax benefits relating to results from nonregulated activities

     (441 )     (114 )     (406 )     (580 )     (351 )     (71 )     (18 )
                                                        
   $ 38,468     $ 33,671     $ 44,623     $ 49,479     $ 49,824     $ 56,658     $ 55,416  
                                                        

For purposes of calculating the ratio of earnings to fixed charges, “earnings” represent the sum of (i) pretax income before preferred stock dividends of HECO and before adjustment for undistributed income or loss from equity investees and (ii) fixed charges (as hereinafter defined, but excluding the allowance for borrowed funds used during construction). “Fixed charges” represent the sum of (i) interest, whether capitalized or expensed, (ii) amortization of debt expense and discount or premium related to any indebtedness, whether capitalized or expensed, (iii) the estimate of the interest within rental expense, (iv) the preferred stock dividend requirements of HELCO and MECO, increased to an amount representing the pretax earnings required to cover such dividend requirements, and (v) in 2003 and prior years when the trust subsidiaries were consolidated, the preferred securities distribution requirements of the trust subsidiaries.