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: February 11, 2010

Exact Name of Registrant as Specified in Its Charter	Commission File Number	I.R.S. Employer 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:

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

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

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

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

Item 2.02 Results of Operations and Financial Condition.

On February 11, 2010, HEI issued a news release, “HEI Reports Lower Earnings for 2009 and Flat Earnings for the Fourth Quarter”. This news release is furnished as HEI Exhibit 99.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On February 11, 2010, Ms. Diane J. Plotts announced her retirement from the Boards of Directors of HEI and its subsidiary, American Savings Bank, F.S.B. (ASB), to be effective upon the expiration of her current term as an HEI director at the Annual Meeting of HEI Shareholders on May 11, 2010. Ms. Plotts is currently Chairperson of the HEI and ASB Audit Committees and also serves as a member of the HEI Executive and Compensation Committees.

Ms. Plotts reached the mandatory retirement age under HEI’s Corporate Governance Guidelines in 2007. In accordance with the Corporate Governance Guidelines, the HEI Board of Directors requested that Ms. Plotts postpone her retirement, and Ms. Plotts has agreed to do so until the expiration of her current term as an HEI director at the Annual Meeting of HEI Shareholders on May 11, 2010.

Ms. Plotts has no disagreement with HEI or ASB on any matter relating to the Company’s operations, policies or practices, and she has not been removed from either the HEI or ASB Board of Directors for cause. Ms. Plotts has reviewed this disclosure.

In connection with the announcement of the retirement of Ms. Plotts from the HEI Board of Directors, the HEI Board has determined to the reduce the size of the HEI Board from 12 to 11 concurrent with the retirement of Ms. Plotts from the HEI Board.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

HEI Exhibit 99 News release, dated February 11, 2010, “HEI Reports Lower Earnings for 2009 and Flat Earnings for the Fourth Quarter”

1

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.                                                         (Registrant)	HAWAIIAN ELECTRIC COMPANY, INC.                                                      (Registrant)
/s/    JAMES A. AJELLO	/s/    TAYNE S. Y. SEKIMURA
James A. Ajello	Tayne S. Y. Sekimura
Senior Financial Vice President, Treasurer, and	Senior Vice President and
Chief Financial Officer	Chief Financial Officer
(Principal Financial Officer of HEI)	(Principal Financial Officer of HECO)
Date: February 11, 2010	Date: February 11, 2010

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EX-99

HEI Exhibit 99

February 11, 2010

Contact:	Shelee M.T. Kimura	(808) 543-7384 Telephone
	Manager, Investor Relations &	(808) 203-1164 Facsimile
	Strategic Planning	E-mail: skimura@hei.com

HEI REPORTS LOWER EARNINGS FOR 2009 AND FLAT EARNINGS FOR THE FOURTH QUARTER

HONOLULU — Hawaiian Electric Industries, Inc. (NYSE - HE) today reported consolidated net income for common stock for the full year of 2009 of $83.0 million, or $0.91 per share, compared to $90.3 million, or $1.07 per share for 2008. In both years, the earnings were affected by losses related to specific strategic transactions at the bank. Excluding the $19.3 million, or $0.21 per share of after-tax losses related to the previously disclosed liquidation of the bank’s private-issue mortgage-related securities (PMRS) portfolio, adjusted 2009 earnings were $102.3 million or $1.12 per share. In 2008, excluding the after-tax impact of the bank’s previously disclosed balance sheet restructuring charge of $35.6 million, net income was $125.9 million or $1.49 per share.

Net income for the fourth quarter of 2009 was $13.7 million, or $0.15 per share, compared to $13.9 million, or $0.16 per share for the fourth quarter of 2008. Fourth quarter 2009 results include the $19.3 million after-tax losses related to the liquidation of the bank’s PMRS portfolio discussed above. Excluding the PMRS losses, adjusted 2009 fourth quarter earnings were $33.0 million or $0.36 per share, reflecting primarily a full quarter of utility rate relief and aggressive cost control efforts at both the utility and the bank.

Hawaiian Electric Industries, Inc. News Release

February 11, 2010

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“2009 was a challenging year and we made difficult decisions to curb spending and reduce risk, while continuing to progress forward with long-term strategic initiatives to move Hawaii toward a clean energy future and improved performance and profitability at both our utility and bank,” said Constance H. Lau, HEI president and chief executive officer.

“Although our utility encountered lower sales and lower and later-than-expected rate relief, management was able to substantially offset the impact to earnings through prudent cost control and deferral strategies. The majority of these savings cannot be sustained over the long term. And at the bank, despite historically high credit costs driven by the economic recession and significant losses from electing to liquidate our private-issue mortgage-related securities portfolio, our bank remained profitable and exceeded our expectations of cost savings from the ongoing Performance Improvement Project,” said Lau.

FULL YEAR RESULTS

Full year 2009 earnings were down $7.3 million or $0.16 per share to $83.0 million or $0.91 per share compared with 2008. Excluding the PMRS and balance sheet restructuring charges in 2009 and 2008, respectively, earnings in 2009 were down by $23.6 million or $0.37 per share to $102.3 million or $1.12 per share. The overall decrease in year-over-year earnings was due to lower kilowatthour sales and increases in utility operation and maintenance and bank credit expenses, partially offset by five months of utility rate relief.

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February 11, 2010

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UTILITY

Electric utility earnings were $79.4 million in 2009 versus $92.0 million in 2008. “At the onset of 2009, we expected utility earnings to be lower in the first half of the year as we awaited rate relief in the second half of the year; however, full-year earnings were further depressed due to lower kilowatthour sales and to lower and later-than-expected rate relief” said Lau.

Kilowatthour sales were down 2.5% year over year, with the decrease coming primarily in the first half of the year, due largely to the effects of weather, soft economic conditions and on-going energy efficiency and conservation efforts. “In 2010, we expect sales to continue to decline by about 0.9% compared to 2009 due to the continued effects of a weak Hawaii economy, rising fuel prices, and positive efforts by Hawaii residents and businesses to conserve energy,” said Lau.

Operation expense increased by $5.3 million largely due to: 1) $9 million higher administrative and general expenses primarily from higher employee retirement benefit cost; 2) $5 million higher production operation expense due to the addition of a new peaking unit, CT-1, and work to support the acquisition of renewable resources; and 3) $2 million higher transmission and distribution operation expense to support our aging infrastructure; offset by 4) $11 million lower demand-side management (DSM) program costs that are recovered in a surcharge. The energy efficiency DSM programs were transferred to a third-party administrator at the end of the second quarter of 2009.

Maintenance expense increased by $5.9 million primarily due to higher transmission and distribution maintenance expenses resulting from increased substation

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February 11, 2010

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maintenance, vegetation management and increased spending on maintenance of overhead and underground lines.

“As a result of the increased work to address our aging infrastructure, 2009 short-term cost reductions and deferrals, higher retirement benefit costs which are largely being recovered and full-year CT-1 costs, we expect operation and maintenance expense to increase by approximately 11% in 2010,” said Lau.

Depreciation expense in 2009 increased $2.9 million over 2008 due to plant additions in 2008.

BANK

Bank net income for 2009 was $21.8 million compared with $17.8 million for 2008. Results for 2009 include $19.3 million of PMRS after-tax charges that occurred in the fourth quarter 2009. Results for 2008 include the $35.6 million after-tax charge related to the balance sheet restructuring executed in June 2008. Excluding the PMRS after-tax charge in 2009 and the balance sheet restructuring charge in 2008, adjusted bank net income was $41.1 million and $53.4 million in 2009 and 2008, respectively.

“Like many banks across the country, our bank was affected by the economic pressures in 2009. However, as we have done throughout the economic crisis, we kept capital healthy and depositors’ money safe. At the same time, we increased our prospects for improved performance in the future.” said Lau.

Bank net interest income decreased by $5.7 million or 2.8% in 2009 compared with 2008 as a result of lower balances and yields on earning assets, partly offset by lower funding costs. However, the bank’s net interest margin increased to 4.19% compared to 3.62% in 2008, primarily due to the balance sheet restructuring and the

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February 11, 2010

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reduction of higher-costing term certificates. During 2009, the bank added $393 million of core deposits, its lowest-costing source of funds. In 2009, the weighted average cost of core deposits was 0.22% compared with 0.43% in 2008.

Results for 2009 included provision for loan losses of $32.0 million, compared to $10.3 million in 2008. The increased level of provisions in 2009 was primarily due to an increase in nonperforming residential lot loans and 1-4 family mortgages mainly on the neighbor islands and a $10 million provision for one commercial loan that was subsequently sold during the year. Nonperforming assets to loans outstanding and real estate owned at the end of the year was 1.85%, compared with 0.48% at the end of 2008. Net charge-offs to average loans outstanding were 0.66%, compared with 0.11% for 2008. The allowance for loan losses increased by $5.9 million in 2009, ending the year at $42 million.

Noninterest income was $16.2 million lower in 2009 than in 2008 primarily due to higher losses on the sales of securities, including the sale of the PMRS portfolio, and higher other-than-temporary impairment (OTTI) charges. Excluding the losses on the sales of securities and the OTTI charges, noninterest income for 2009 was $6.1 million higher than 2008, primarily due to higher gains on sale of loans and deposit account fees.

Noninterest expense decreased by $48.5 million year-over-year, primarily due to the charges from the early extinguishment of debt related to the balance sheet restructuring of $39.8 million in 2008, and despite a $2.3 million special assessment by the Federal Deposit Insurance Corporation in 2009 to replenish the deposit insurance fund. Services expense was $5.5 million lower in 2009 due primarily to lower consulting and contract services, and compensation and benefits expense were lower by $3.9 million.

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February 11, 2010

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HOLDING AND OTHER COMPANIES

The holding and other companies’ net loss was $18.2 million in 2009, compared with $19.5 million in 2008 due to lower general and administrative expenses and lower borrowing costs.

FOURTH QUARTER RESULTS

UTILITY

Electric utility net income for common stock for the fourth quarter of 2009 was $23.3 million compared to $14.0 million in the fourth quarter of 2008. “Interim rate relief and primarily short-term cost control efforts enabled the utility to produce better results quarter over quarter, although earned returns remained significantly below allowed returns,” said Lau.

In the third quarter of 2009, the Public Utilities Commission of the State of Hawaii (PUC) approved the implementation of a partial interim increase of $61.1 million in HECO’s 2009 test year rate case proceeding, which contributed an additional $8.6 million to utility net income in the fourth quarter of 2009 compared to the fourth quarter of 2008.

Although kilowatthour sales were down for the year, sales for the quarter were up 1.1% compared with the same quarter of 2008, increasing utility net income by an estimated $1.5 million over the same quarter last year. “Soft sales in the fourth quarter of 2008, lower fuel prices and warmer weather in the fourth quarter of 2009 contributed to the quarter-over-quarter increase in sales,” said Lau.

Hawaiian Electric Industries, Inc. News Release

February 11, 2010

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Operations and maintenance expenses (O&M) were down $7.8 million or 8.1% quarter over quarter. Included in fourth quarter 2008 O&M were $9 million of DSM program costs that were recovered through a surcharge. The energy efficiency DSM programs were transferred to a third-party administrator at the end of the second quarter of 2009 and, thus, there were only $2 million related to DSM programs in the fourth quarter of 2009. The remaining difference in quarter-over-quarter O&M is primarily due to the company’s cost reduction efforts. “Due to management’s ongoing efforts to seek cost containment opportunities through reductions and deferrals, we were able to keep O&M essentially flat for the quarter,” said Lau.

BANK

Bank net income for the fourth quarter of 2009 was a net loss of $4.5 million, compared to net income of $11.3 million in the third quarter of 2009 and $5.9 million for the same quarter last year. Fourth quarter 2009 results include the after-tax losses of $19.3 million related to the liquidation of the PMRS portfolio.

“We made a strategic decision to liquidate our PMRS portfolio in the fourth quarter of 2009 when we saw a market opportunity. As a result, we eliminated the risk of future charges from these securities and improved our prospects for more stable earnings from the bank,” said Lau.

Excluding the $19.3 million after-tax charge from the PMRS liquidation, adjusted fourth quarter 2009 earnings were $14.9 million. On an adjusted annualized basis, the bank achieved a 1.27% return on average assets and a 56% efficiency ratio in the fourth

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February 11, 2010

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quarter of 2009.¹ Comparatively, the adjusted annualized return on average assets was 1.34% in the third quarter of 2009 and 0.92% in the fourth quarter 2008, and the adjusted annualized efficiency ratio was 53% in the third quarter of 2009 and 62% in the fourth quarter of 2008.¹ The unfavorable change in the adjusted annualized return on average assets and efficiency ratios between the third and fourth quarters of 2009 is primarily due to $1 million of year-end adjustments to noninterest expense and $1 million lower net interest income in the fourth quarter of 2009. However, the improvement in the fourth quarter of 2009 compared with the same quarter last year reflects the year’s progress in the bank’s Performance Improvement Project. Part of the improvement in the adjusted efficiency ratio was due to branch consolidation, with the bank finishing 2009 with 3 less branches than it had at the end of 2008.

“Excluding the effects of the PMRS sale, the bank performed relatively well in the fourth quarter reflecting the achievements to date on the ongoing Performance Improvement Project,” said Lau.

The bank continues to be well capitalized with a strong Tier-1 core leverage ratio of 9.0%. The bank’s total risk-based ratio increased to 14.1% at quarter-end, following the de-risking of the bank’s securities portfolio with the PMRS sale.

Net interest income in the fourth quarter of 2009 was $49.4 million compared to $51.5 million in the fourth quarter of 2008. Lower average earning asset balances and yields were partially offset by lower funding costs. In the quarter, core deposits grew by $144 million and had a weighted-average cost of 0.16% compared with 0.41% in the fourth

¹ Refer to page 23 of the accompanying schedules of this release for a reconciliation of noninterest income and expense based on U.S. generally accepted accounting principles to adjusted noninterest income and expense, and the resulting annualized amounts.

Hawaiian Electric Industries, Inc. News Release

February 11, 2010

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quarter of 2008. Net interest margin grew to 4.27% in the fourth quarter of 2009, compared with 4.23% in the third quarter of 2009 and 4.07% in the fourth quarter of 2008.

The bank recorded a $5.0 million provision for loan losses for the fourth quarter of 2009 compared with $5.2 million in the third quarter of 2009 and $6.3 million in the fourth quarter of 2008. The majority of the provision in the fourth quarter of 2009 reflected the additional provision for commercial market loans and home equity lines of credit. Nonperforming assets to loans outstanding and real estate owned at the end of the fourth quarter was 1.85%, compared with 1.61% and 0.48% for the third quarter of 2009 and the fourth quarter of 2008, respectively. Annualized net charge-offs to average loans outstanding for the quarter were 0.98% compared with 0.19% and 0.20% for the third quarter of 2009 and the fourth quarter of 2008, respectively. The increase in the fourth quarter of 2009 was partially related to charge-offs on loans we had already provisioned for in prior periods.

Noninterest income for the fourth quarter of 2009 was a loss of $11.3 million, compared with income of $11.9 million for the third quarter of 2009 and $10.1 million in the fourth quarter of 2008. Fourth quarter 2009 noninterest income was reduced by $32.1 million for the PMRS losses. Third quarter 2009 and fourth quarter 2008 noninterest income were reduced by $9.9 million and $7.8 million, respectively, for OTTI charges of certain PMRS. Excluding the effects of the PMRS sales, OTTI charges and other nonrecurring noninterest income, adjusted noninterest income increased 4% from the fourth quarter of 2008 to the fourth quarter of 2009 and decreased 2% from the third quarter of 2009 to the fourth quarter 2009.¹

Noninterest expense for the fourth quarter of 2009 was $41.7 million, compared with $39.6 million in the third quarter of 2009 and $45.4 million for the same quarter in

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February 11, 2010

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2008. On an adjusted basis, noninterest expense decreased by $5.0 million quarter over quarter and increased by $1.0 million over the third quarter of 2009 due to the timing of certain year-end adjustments.¹ “The bank’s adjusted annualized noninterest expense for the fourth quarter of 2009 was $152 million, and is on track to meeting its target of $140 to $145 million by the end of 2010,” said Lau.¹

HOLDING AND OTHER COMPANIES

The holding and other companies’ net losses were $5.2 million in the fourth quarter of 2009, compared with $6.1 million in the fourth quarter of 2008 reflecting lower general and administrative expenses and lower borrowing costs.

WEBCAST AND TELECONFERENCE

Hawaiian Electric Industries, Inc. will conduct a webcast and teleconference call to review its fourth quarter 2009 earnings on Friday, February 12, 2010, at 8:00 a.m. Hawaii time (1:00 p.m. Eastern time). The event can be accessed through HEI’s website at http://www.hei.com or by dialing (866) 543-6408, passcode: 76441244 for the teleconference call.

An online replay of the webcast will be available at the same website beginning about two hours after the event. Replays of the teleconference call will also be available approximately two hours after the event through February 26, 2010, by dialing
(888) 286-8010, passcode: 11951714.

HEI supplies power to over 400,000 customers or 95% of Hawaii’s population through its electric utilities, Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited and provides a wide array of banking and other

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February 11, 2010

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financial services to consumers and businesses through American Savings Bank, F.S.B., one of Hawaii’s largest financial institutions.

EXPLANATION OF HEI’S USE OF CERTAIN UNAUDITED NON-GAAP FINANCIAL MEASURES

HEI and bank management use certain non-GAAP measures in their evaluation of the bank’s performance and believe the presentations of such financial measures on this basis provide useful supplemental information and a clearer picture of the bank’s operating performance, and are better indicators of the bank’s ongoing core operating activities. Management also uses such measures to assist investors/analysts in better understanding the bank’s progress on the execution of its Performance Improvement Project. These measures are also useful in understanding performance trends and in facilitating comparisons with the performance of others in the financial services industry.

Management utilizes non-GAAP financial measures of noninterest income and expense in the calculation of certain of the bank’s metrics/ratios, such as (i) efficiency, (ii) pretax, preprovision income, and (iii) return on average assets, in order to analyze on a consistent basis and over a longer period of time the performance of the bank’s core operating activities and its progress on the execution of the Performance Improvement Project. Management also annualizes the non-GAAP measure of noninterest expense by multiplying such measure by 4 to develop an estimate of adjusted noninterest expense for a year-long period. This annualized adjusted noninterest expense metric (non-GAAP measure) is a forward-looking statement based on only a quarter’s results and may not reflect actual results. See schedule on page 23 of this release for a tabular reconciliation between the bank’s GAAP and non-GAAP measures.

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February 11, 2010

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Certain reconciling items—real estate transactions, professional services, FISERV conversion costs, severance, technology write-offs, prepayment penalties on early extinguishment of debt, and a loss on sale of Bishop Insurance Agency—are being incurred pursuant to the bank management’s Performance Improvement Project which was announced in June 2008 and is expected to conclude by the end of 2010. These costs are being incurred with the objective of increasing the bank’s operating efficiency and profitability in the long term. Accordingly, bank management believes that these costs will remain temporarily elevated while the Performance Improvement Project is being executed and will be reduced or eliminated once the project has ended.

Management also adjusts noninterest expense to exclude a special assessment levied by the Federal Deposit Insurance Corporation (FDIC) pursuant to the FDIC’s plan to recapitalize the deposit insurance fund. Excluding the FDIC charge is consistent with the financial measures used by other banks and enhances the comparison of operating performance. The FDIC is now requiring banks to prepay estimated quarterly assessments for the fourth quarter of 2009 and for all of 2010, 2011 and 2012. Such prepaid assessments would be amortized over these periods.

Reported noninterest income is being adjusted by a gain on sale of a commercial loan, gains on sales of other assets and other nonrecurring income items. Bank management believes that it would not be appropriate to assume that the bank would realize material gains of this type on a quarterly basis.

Likewise, bank management also adds back to noninterest income charges related to the other-than-temporary impairment (OTTI) of private-issue mortgage-related securities

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February 11, 2010

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because of the material nature of the charge and the inconsistency of when those charges occurred. The bank incurred material OTTI in the fourth quarter of 2008 and the second and third quarters of 2009, impacting the comparability of noninterest income for those quarters. Management believes that adjusting noninterest income to exclude the effects of OTTI helps the comparability of noninterest income quarter to quarter and quarter over quarter.

In addition, management adjusts noninterest income for net gains (losses) on sales of certain securities which includes the fourth quarter 2009 loss on the liquidation of the PMRS portfolio and the first quarter 2008 sale of stock in VISA, Inc., because management believes that such transactions are unlikely to recur on a regular basis and impacts the comparability of noninterest income between periods.

Limitations associated with utilizing non-GAAP measures are the risks of disagreement over the appropriateness of adjustments comprising these measures and the risk that other companies might calculate these measures differently. Management addresses these limitations by providing detailed reconciliations between GAAP information and non-GAAP measures. See reconciliation on page 23.

FORWARD-LOOKING STATEMENTS

This release may contain “forward-looking statements,” which include statements that are predictive in nature, depend upon or refer to future events or conditions, and usually include words such as expects, anticipates, intends, plans, believes, predicts, estimates or similar expressions. In addition, any statements concerning future financial performance (including future revenues, expenses, earnings or losses or growth rates), ongoing business strategies or prospects and possible future actions, which may be provided by management,

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February 11, 2010

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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 assumptions about HEI and its subsidiaries, the performance of the industries in which they do business and economic and market factors, among other things. These forward-looking statements are not guarantees of future performance.

Forward-looking statements in this release should be read in conjunction with the “Forward-Looking Statements” discussion (which is incorporated by reference herein) set forth on pages iv and v of HEI’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, and in HEI’s future periodic reports that discuss important factors that could cause HEI’s results to differ materially from those anticipated in such statements. Forward-looking statements speak only as of the date of this release.

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Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three months ended December 31,						Years ended December 31,
(in thousands, except per share amounts)	2009			2008			2009			2008
Revenues
Electric utility	$	574,355		$	720,552		$	2,035,009		$	2,860,350
Bank		45,241			79,084			274,719			358,553
Other		(17	)		181			(138	)		17
		619,579			799,817			2,309,590			3,218,920
Expenses
Electric utility		522,088			687,419			1,865,338			2,668,991
Bank		53,793			69,195			242,955			331,601
Other		4,386			5,523			13,633			14,171
		580,267			762,137			2,121,926			3,014,763
Operating income (loss)
Electric utility		52,267			33,133			169,671			191,359
Bank		(8,552	)		9,889			31,764			26,952
Other		(4,403	)		(5,342	)		(13,771	)		(14,154	)
		39,312			37,680			187,664			204,157
Interest expense-other than on deposit liabilities and other bank borrowings		(20,909	)		(19,362	)		(76,330	)		(76,142	)
Allowance for borrowed funds used during construction		801			1,177			5,268			3,741
Allowance for equity funds used during construction		1,869			2,958			12,222			9,390
Income before income taxes		21,073			22,453			128,824			141,146
Income taxes		6,946			8,086			43,923			48,978
Net income		14,127			14,367			84,901			92,168
Less net income attributable to noncontrolling interest-preferred stock of subsidiaries		473			473			1,890			1,890
Net income for common stock	$	13,654		$	13,894		$	83,011		$	90,278
Basic earnings per common share	$	0.15		$	0.16		$	0.91		$	1.07
Diluted earnings per common share	$	0.15		$	0.16		$	0.91		$	1.07
Dividends per common share	$	0.31		$	0.31		$	1.24		$	1.24
Weighted-average number of common shares outstanding		92,056			86,355			91,396			84,631
Adjusted weighted-average shares		92,345			86,538			91,516			84,720
Income (loss) by segment
Electric utility	$	23,305		$	14,026		$	79,446		$	91,975
Bank		(4,459	)		5,939			21,767			17,827
Other		(5,192	)		(6,071	)		(18,202	)		(19,524	)
Net income for common stock	$	13,654		$	13,894		$	83,011		$	90,278

This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HEI’s for Annual Reports on SEC Form 10-K for the years ended December 31, 2008 and 2009 (when filed) and the consolidated financial statements and the notes thereto in HEI’s Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009.

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Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(Unaudited)

December 31	2009			2008
(dollars in thousands)
Assets
Cash and equivalents	$	502,443		$	182,903
Federal funds sold		1,479			532
Accounts receivable and unbilled revenues, net		241,116			300,666
Available-for-sale investment and mortgage-related securities		432,881			657,717
Investment in stock of Federal Home Loan Bank of Seattle		97,764			97,764
Loans receivable, net		3,670,493			4,206,492
Property, plant and equipment, net of accumulated depreciation of $1,945,482 and $1,851,813		3,088,611			2,907,376
Regulatory assets		426,862			530,619
Other		381,163			328,823
Goodwill, net		82,190			82,190
	$	8,925,002		$	9,295,082
Liabilities and stockholders’ equity
Liabilities
Accounts payable	$	186,994		$	183,584
Deposit liabilities		4,058,760			4,180,175
Short-term borrowings—other than bank		41,989			—
Other bank borrowings		297,628			680,973
Long-term debt, net—other than bank		1,364,815			1,211,501
Deferred income taxes		188,875			143,308
Regulatory liabilities		288,214			288,602
Contributions in aid of construction		321,544			311,716
Other		700,242			871,476
		7,449,061			7,871,335
Stockholders’ equity
Common stock, no par value, authorized 200,000,000 shares; issued and outstanding: 92,520,638 shares and 90,515,573 shares		1,265,157			1,231,629
Retained earnings		184,213			210,840
Accumulated other comprehensive loss, net of income tax benefits		(7,722	)		(53,015	)
Common stock equity		1,441,648			1,389,454
Preferred stock, no par value, authorized 10,000,000 shares; issued: none		—			—
Noncontrolling interest: cumulative preferred stock of subsidiaries - not subject to mandatory redemption		34,293			34,293
		1,475,941			1,423,747
	$	8,925,002		$	9,295,082

This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HEI’s for Annual Reports on SEC Form 10-K for the years ended December 31, 2008 and 2009 (when filed) and the consolidated financial statements and the notes thereto in HEI’s Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009.

16

Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

Years ended December 31	2009			2008
(in thousands)
Cash flows from operating activities
Net income	$	84,901		$	92,168
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation of property, plant and equipment		151,282			150,977
Other amortization		5,389			5,085
Provision for loan losses		32,000			10,334
Gain on pension curtailment		—			(472	)
Loans receivable originated and purchased, held for sale		(443,843	)		(204,457	)
Proceeds from sale of loans receivable, held for sale		471,194			185,291
Net losses on sale of investment and mortgage-related securities		32,034			17,376
Other-than-temporary impairment on available-for-sale mortgage-related securities		15,444			7,764
Changes in deferred income taxes		12,787			5,134
Changes in excess tax benefits from share-based payment arrangements		310			(405	)
Allowance for equity funds used during construction		(12,222	)		(9,390	)
Changes in assets and liabilities
Decrease (increase) in accounts receivable and unbilled revenues, net		59,550			(6,219	)
Decrease (increase) in fuel oil stock		(946	)		14,157
Increase (decrease) in accounts payable		3,410			(18,715	)
Changes in prepaid and accrued income taxes and utility revenue taxes		(61,977	)		16,466
Changes in other assets and liabilities		(64,845	)		(5,280	)
Net cash provided by operating activities		284,468			259,814
Cash flows from investing activities
Available-for-sale investment and mortgage-related securities purchased		(297,864	)		(489,264	)
Principal repayments on available-for-sale investment and mortgage-related securities		357,233			610,521
Proceeds from sale of available-for-sale investment and mortgage-related securities		185,134			1,311,596
Proceeds from sale of other investments		—			17
Net decrease (increase) in loans held for investment		484,960			(92,241	)
Proceeds from sale of real estate acquired in settlement of loans		1,555			—
Capital expenditures		(304,761	)		(282,051	)
Contributions in aid of construction		14,170			17,319
Other		1,199			1,116
Net cash provided by investing activities		441,626			1,077,013
Cash flows from financing activities
Net decrease in deposit liabilities		(121,415	)		(167,085	)
Net increase (decrease) in short-term borrowings with original maturities of three months or less		41,989			(91,780	)
Net decrease in retail repurchase agreements		(3,829	)		(37,142	)
Proceeds from other bank borrowings		310,000			2,592,635
Repayments of other bank borrowings		(689,517	)		(3,682,119	)
Proceeds from issuance of long-term debt		153,186			19,275
Repayment of long-term debt		—			(50,000	)
Changes in excess tax benefits from share-based payment arrangements		(310	)		405
Net proceeds from issuance of common stock		15,329			136,443
Common stock dividends		(96,843	)		(83,604	)
Preferred stock dividends of noncontrolling interest		(1,890	)		(1,890	)
Increase (decrease) in cash overdraft		(9,545	)		1,265
Other		(2,762	)		350
Net cash used in financing activities		(405,607	)		(1,363,247	)
Net increase (decrease) in cash and equivalents and federal funds sold		320,487			(26,420	)
Cash and equivalents and federal funds sold, January 1		183,435			209,855
Cash and equivalents and federal funds sold, December 31	$	503,922		$	183,435

This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HEI’s for Annual Reports on SEC Form 10-K for the years ended December 31, 2008 and 2009 (when filed) and the consolidated financial statements and the notes thereto in HEI’s Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009.

17

Hawaiian Electric Company, Inc. (HECO) and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three months ended December 31,						Years ended December 31,
(dollars in thousands, except per barrel amounts)	2009			2008			2009			2008
Operating revenues	$	573,049		$	718,374		$	2,026,672		$	2,853,639
Operating expenses
Fuel oil		208,077			328,738			671,970			1,229,193
Purchased power		135,684			159,682			499,804			689,828
Other operation		61,764			66,649			248,515			243,249
Maintenance		25,969			28,847			107,531			101,624
Depreciation		36,127			35,424			144,533			141,678
Taxes, other than income taxes		53,958			67,765			191,699			261,823
Income taxes		14,984			8,800			48,212			56,307
		536,563			695,905			1,912,264			2,723,702
Operating income		36,486			22,469			114,408			129,937
Other income
Allowance for equity funds used during construction		1,869			2,958			12,222			9,390
Other, net		994			1,966			7,487			5,659
		2,863			4,924			19,709			15,049
Interest and other charges
Interest on long-term debt		14,362			11,889			51,820			47,302
Amortization of net bond premium and expense		1,162			628			3,254			2,530
Other interest charges		822			1,528			2,870			4,925
Allowance for borrowed funds used during construction		(801	)		(1,177	)		(5,268	)		(3,741	)
		15,545			12,868			52,676			51,016
Net income		23,804			14,525			81,441			93,970
Less net income attributable to noncontrolling interest - preferred stock of subsidiaries		229			229			915			915
Net income attributable to HECO		23,575			14,296			80,526			93,055
Preferred stock dividends of HECO		270			270			1,080			1,080
Net income for common stock	$	23,305		$	14,026		$	79,446		$	91,975
OTHER ELECTRIC UTILITY INFORMATION
Kilowatthour sales (millions)		2,487			2,458			9,690			9,936
Wet-bulb temperature (Oahu average; degrees Fahrenheit)		69.7			69.4			68.8			68.8
Cooling degree days (Oahu)		1,224			1,164			4,815			4,943
Average fuel oil cost per barrel	$	77.65		$	124.08		$	63.91		$	114.50
							Twelve months ended December 31, 2009
							Allowed %1			Actual %
Return on average common equity
(rate-making, simple average method)
HECO								10.50			7.02
HELCO								10.70			6.89
MECO								10.70			4.76

¹ Based on interim decisions which are subject to final PUC decisions. Allowed ROACEs for HECO, HELCO and MECO based on their last final rate case decisions were 10.70, 11.50 and 10.94, respectively.

This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HECO’s Annual Reports on SEC Form 10-K for the years ended December 31, 2008 and 2009 (when filed) and the consolidated financial statements and the notes thereto in HECO’s Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009.

18

Hawaiian Electric Company, Inc. (HECO) and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(Unaudited)

December 31	2009			2008
(in thousands, except par value)
Assets
Utility plant, at cost
Land	$	52,530		$	42,541
Plant and equipment		4,696,257			4,277,499
Less accumulated depreciation		(1,848,416	)		(1,741,453	)
Construction in progress		132,980			266,628
Net utility plant		3,033,351			2,845,215
Current assets
Cash and equivalents		73,578			6,901
Customer accounts receivable, net		133,286			166,422
Accrued unbilled revenues, net		84,276			106,544
Other accounts receivable, net		8,449			7,918
Fuel oil stock, at average cost		78,661			77,715
Materials and supplies, at average cost		35,908			34,532
Prepayments and other		16,201			12,626
Total current assets		430,359			412,658
Other long-term assets
Regulatory assets		426,862			530,619
Unamortized debt expense		14,288			14,503
Other		73,532			53,114
Total other long-term assets		514,682			598,236
	$	3,978,392		$	3,856,109
Capitalization and liabilities
Capitalization
Common stock, $6 2/3 par value, authorized 50,000,000 shares; outstanding 13,786,959 and 12,805,843 shares	$	91,931		$	85,387
Premium on capital stock		385,659			299,214
Retained earnings		827,036			802,590
Accumulated other comprehensive income, net of income taxes		1,782			1,651
Common stock equity		1,306,408			1,188,842
Cumulative preferred stock – not subject to mandatory redemption		22,293			22,293
Noncontrolling interest – cumulative preferred stock of subsidiaries – not subject to mandatory redemption		12,000			12,000
Stockholders’ equity		1,340,701			1,223,135
Long-term debt, net		1,057,815			904,501
Total capitalization		2,398,516			2,127,636
Current liabilities
Short-term borrowings–affiliate		—			41,550
Accounts payable		132,711			122,994
Interest and preferred dividends payable		21,223			15,397
Taxes accrued		156,092			220,046
Other		48,192			55,268
Total current liabilities		358,218			455,255
Deferred credits and other liabilities
Deferred income taxes		180,603			166,310
Regulatory liabilities		288,214			288,602
Unamortized tax credits		56,870			58,796
Retirement benefits liability		296,623			392,845
Other		77,804			54,949
Total deferred credits and other liabilities		900,114			961,502
Contributions in aid of construction		321,544			311,716
	$	3,978,392		$	3,856,109

This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HECO’s Annual Reports on SEC Form 10-K for the years ended December 31, 2008 and 2009 (when filed) and the consolidated financial statements and the notes thereto in HECO’s Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009.

19

Hawaiian Electric Company, Inc. (HECO) and Subsidiaries

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

Years ended December 31	2009			2008
(in thousands)
Cash flows from operating activities
Net income	$	81,441		$	93,970
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation of property, plant and equipment		144,533			141,678
Other amortization		10,045			8,619
Changes in deferred income taxes		14,762			3,882
Changes in tax credits, net		(1,332	)		1,470
Allowance for equity funds used during construction		(12,222	)		(9,390	)
Changes in assets and liabilities
Decrease (increase) in accounts receivable		32,605			(21,313	)
Decrease in accrued unbilled revenues		22,268			7,730
Decrease (increase) in fuel oil stock		(946	)		14,156
Increase in materials and supplies		(1,376	)		(274	)
Increase in regulatory assets		(17,597	)		(3,229	)
Increase (decrease) in accounts payable		9,717			(14,901	)
Changes in prepaid and accrued income taxes and utility revenue taxes		(61,951	)		28,055
Changes in other assets and liabilities		(2,571	)		(5,445	)
Net cash provided by operating activities		217,376			245,008
Cash flows from investing activities
Capital expenditures		(302,327	)		(278,476	)
Contributions in aid of construction		14,170			17,319
Other		340			1,157
Net cash used in investing activities		(287,817	)		(260,000	)
Cash flows from financing activities
Common stock dividends		(55,000	)		(14,089	)
Preferred stock dividends of noncontrolling interest		(1,995	)		(1,995	)
Proceeds from issuance of long-term debt		153,186			19,275
Net increase (decrease) in short-term borrowings from nonaffiliates and affiliate with original maturities of three months or less		(10,464	)		12,759
Net proceeds from issuance of common stock		61,914			—
Increase (decrease) in cash overdraft		(9,545	)		1,265
Other		(978	)		—
Net cash provided by financing activities		137,118			17,215
Net increase in cash and equivalents		66,677			2,223
Cash and equivalents, beginning of period		6,901			4,678
Cash and equivalents, end of period	$	73,578		$	6,901

This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HECO’s Annual Reports on SEC Form 10-K for the years ended December 31, 2008 and 2009 (when filed) and the consolidated financial statements and the notes thereto in HECO’s Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009.

20

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

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three months ended									Years ended December 31,
	December 31, 2009			September 30, 2009			December 31, 2008
(dollars in thousands)										2009			2008
Interest and dividend income
Interest and fees on loans	$	51,303		$	53,080		$	60,898		$	217,838		$	247,210
Interest and dividends on investment and mortgage-related securities		5,215			6,943			8,130			26,977			65,208
		56,518			60,023			69,028			244,815			312,418
Interest expense
Interest on deposit liabilities		5,293			7,286			13,574			34,046			61,483
Interest on other borrowings		1,787			2,205			3,911			9,497			43,941
		7,080			9,491			17,485			43,543			105,424
Net interest income		49,438			50,532			51,543			201,272			206,994
Provision for loan losses		5,000			5,200			6,300			32,000			10,334
Net interest income after provision for loan losses		44,438			45,332			45,243			169,272			196,660
Noninterest income
Fee income on deposit liabilities		8,329			8,211			7,443			30,713			28,332
Fees from other financial services		6,520			6,385			6,292			25,267			24,846
Fee income on other financial products		1,548			1,613			1,469			5,833			6,683
Net gains (losses) on sale of securities *		(32,078	)		—			12			(32,034	)		(17,376	)
Losses on available-for-sale securities		—			(9,863	)		(7,764	)		(15,444	)		(7,764	)
Other income		4,404			5,578			2,604			15,569			11,414
		(11,277	)		11,924			10,056			29,904			46,135
Noninterest expense
Compensation and employee benefits		18,918			17,721			21,407			73,990			77,858
Occupancy		6,101			4,905			5,614			22,057			21,890
Data processing		4,030			3,684			2,659			14,382			10,678
Services		1,533			2,437			3,175			11,189			16,706
Equipment		1,737			1,782			3,034			8,849			12,544
Loss on early extinguishment of debt *		659			—			—			760			39,843
Other expense		8,717			9,062			9,553			36,244			36,485
		41,695			39,591			45,442			167,471			216,004
Income (loss) before income taxes		(8,534	)		17,665			9,857			31,705			26,791
Income taxes (benefits) *		(4,075	)		6,342			3,918			9,938			8,964
Net income (loss)	$	(4,459	)	$	11,323		$	5,939		$	21,767		$	17,827
OTHER BANK INFORMATION (%)
Return on average assets		(0.36	)		0.89			0.44			0.43			0.29
Return on average equity		(3.64	)		9.40			4.69			4.54			3.17
Net interest margin		4.27			4.23			4.07			4.19			3.62
Net charge-offs to average loans outstanding (annualized)		0.98			0.19			0.20			0.66			0.11
Efficiency ratio		109			63			74			72			85
As of period end
Nonperforming assets to loans outstanding and real estate owned **		1.85			1.61			0.48
Allowance for loan losses to loans outstanding		1.12			1.21			0.84
Tier-1 leverage ratio		9.0			9.1			8.5
Total risk-based capital ratio		14.1			13.2			12.8

* 2009 net income included a $19.3 million after-tax charge related to ASB’s sale of private-issued mortgage-related securities (PMRS) in the fourth quarter of 2009. The $32.1 million loss on sale of PMRS is included in “Noninterest income-Net loss on sale of securities” and the related income tax benefits of $12.8 million is included in “Income taxes (benefits).” 2008 net income included a $35.6 million after-tax charge ASB’s balance sheet restructuring in June 2008. The $35.6 million is comprised of: (1) realized losses on the sale of mortgage-related securities and agency notes of $19.3 million included in “Noninterest income-Net loss on sale of securities,” (2) fees associated with the early retirement of other bank borrowings of $39.8 million included in “Noninterest expense-Loss on early extinguishment of debt” and (3) income tax benefits of $23.5 million included in “Income taxes (benefits).”

** Regulatory basis

This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HEI’s Annual Reports on SEC Form 10-K for the years ended December 31, 2008 and 2009 (when filed) and the consolidated financial statements and the notes thereto in HEI’s Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009.

21

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

CONSOLIDATED BALANCE SHEETS DATA

(Unaudited)

December 31	2009			2008
(in thousands)
Assets
Cash and equivalents	$	425,896		$	168,766
Federal funds sold		1,479			532
Available-for-sale investment and mortgage-related securities		432,881			657,717
Investment in stock of Federal Home Loan Bank of Seattle		97,764			97,764
Loans receivable, net		3,670,493			4,206,492
Other		230,282			223,659
Goodwill, net		82,190			82,190
	$	4,940,985		$	5,437,120
Liabilities and stockholder’s equity
Deposit liabilities–noninterest-bearing	$	808,474		$	701,090
Deposit liabilities–interest-bearing		3,250,286			3,479,085
Other borrowings		297,628			680,973
Other		92,129			98,598
		4,448,517			4,959,746
Common stock		329,439			328,162
Retained earnings		172,655			197,235
Accumulated other comprehensive loss, net of tax benefits		(9,626	)		(48,023	)
		492,468			477,374
	$	4,940,985		$	5,437,120

This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HEI’s Annual Reports on SEC Form 10-K for the years ended December 31, 2008 and 2009 (when filed) and the consolidated financial statements and the notes thereto in HEI’s Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009.

22

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

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(Unaudited)

(in thousands)	1Q08			4Q08			1Q09			2Q09			3Q09			4Q09
Noninterest income
Per income statement - GAAP	$	17,928		$	10,056		$	16,264		$	12,993		$	11,924		$	(11,277	)
Other-than-temporary impairment of private-issue mortgage-related securities		—			7,764			—			5,581			9,863			—
Net (gains) losses on sale of securities		(935	)		—			—			—			—			32,078
Gain on sale of a commercial loan		—			—			—			—			(2,951	)		—
Gain on sale of other assets		—			—			—			—			—			(1,772	)
Other nonrecurring income		(384	)		—			—			—			—			(500	)
Adjusted noninterest income	$	16,609		$	17,820		$	16,264		$	18,574		$	18,836		$	18,529
Noninterest expense
Per income statement - GAAP	$	44,234		$	45,442		$	41,811		$	44,374		$	39,591		$	41,695
Real estate transactions		—			—			—			(1,180	)		(1,076	)		(1,633	)
Professional services		—			—			(616	)		(1,238	)		(600	)		—
FISERV conversion costs		—			—			—			(159	)		(572	)		(972	)
Severance		—			(1,560	)		(673	)		(393	)		(301	)		(390	)
FDIC special assessment		—			—			—			(2,338	)		—			—
Technology write-offs		—			—			—			(145	)		—			(35	)
Prepayment penalty on early extinguishment of debt		—			—			(41	)		(60	)		—			(659	)
Bishop Insurance Agency sale		—			(890	)		—			—			—			—
Adjusted noninterest expense	$	44,234		$	42,992		$	40,481		$	38,861		$	37,042		$	38,006
Other bank information
Noninterest expense (annualized)
Reported	$	176,936		$	181,768		$	167,244		$	177,496		$	158,364		$	166,780
Adjusted		176,936			171,968			161,924			155,444			148,168			152,024
Efficiency ratio
Reported		65	%		74	%		62	%		70	%		63	%		109	%
Adjusted		66	%		62	%		60	%		56	%		53	%		56	%
Pretax, preprovision income (annualized)
Reported	$	96,964		$	64,628		$	101,568		$	75,928		$	91,460		$	(14,136	)
Adjusted		91,688			105,484			106,888			120,304			129,304			119,844
Return on average assets
Reported		0.85	%		0.44	%		0.82	%		0.31	%		0.89	%		(0.36	)%
Adjusted		0.81	%		0.92	%		0.88	%		0.83	%		1.34	%		1.27	%

23