HEI Exhibit 99
May 9, 2011
Contact: | Shelee M.T. Kimura | | |
| Manager, Investor Relations & | | Telephone: (808) 543-7384 |
| Strategic Planning | | E-mail: skimura@hei.com |
HEI REPORTS FIRST QUARTER 2011 EARNINGS & DECLARES DIVIDEND
Diluted Earnings Per Share $0.30 in 1Q 2011 vs $0.29 in 1Q 2010
Sales Decoupling Implemented at Largest Utility
Bank Continues Strong Performance
Board of Directors Declares Dividend of $0.31 Per Share
HONOLULU — Hawaiian Electric Industries, Inc. (NYSE - HE) (HEI) today reported consolidated net income for common stock for the first quarter of 2011 was $28.5 million, or $0.30 diluted EPS, compared to $27.1 million, or $0.29 diluted EPS for the first quarter of 2010.
“This was a solid quarter for HEI. We achieved another significant milestone in the implementation of our new regulatory model at our largest utility, advanced several clean energy projects, and delivered continued strong performance at the bank,” said Constance H. Lau, HEI president and chief executive officer.
“At the utility, although earnings and returns on equity remain depressed pending the outcome of the Oahu 2011 rate case and other regulatory proceedings, we are pleased that we were able to implement sales decoupling for HECO Oahu to further align our financial business model with our state’s public policy to promote energy efficiency and conservation. At the bank, we are pleased to report another quarter of solid performance with a return on assets of 1.15%, net interest margin of 4.16%, lower credit costs, and loan growth for the second consecutive quarter,” added Lau.
UTILITY NET INCOME SLIGHTLY HIGHER ON WEATHER
Electric utility net income for the first quarter of 2011 was $19.2 million compared to $18.1 million in the first quarter of 2010. The $1.1 million net income improvement resulted primarily from (on an after-tax basis):
· Approximately $4 million of higher kilowatthour sales, largely due to warmer and more humid weather; and
· $3 million of rate relief granted in our 2010 Hawaii Island and Maui County rate cases and the 2009 Oahu rate case.
These were partially offset by:
· $4 million higher operations and maintenance (O&M) expenses(1); and
· $1 million lower allowance for funds used during construction as a result of projects put into service in 2010.
Our Hawaii Island and Maui County utilities will continue to be impacted by changes in sales levels as they await decoupling implementation. Kilowatthour sales were up 0.4% and 2.0% for our Hawaii Island and Maui County utilities, respectively, in the first quarter.
For our Oahu utility, kilowatthour sales for the first two months of 2011 were 3.2% higher than the same period last year. Subsequently, sales decoupling became effective on March 1, 2011 and starting from that date, actual kilowatthour sales are no longer a net income driver.
O&M expenses(1) (pretax) were up 8% over the same quarter last year. This increase resulted primarily from higher emission fees (fees were waived in 2010), and higher vegetation and substation maintenance expenses. This level of increase is consistent with our guidance for a 7% annual increase in 2011.
BANK MAINTAINS PROFITABILITY AND LOWER COST STRUCTURE AND RESULTS REFLECT LOWER CREDIT COSTS
Bank net income for the first quarter of 2011 was $13.9 million compared to $13.7 million for the same quarter last year and $13.3 million in the fourth quarter of 2010.
(1) Excludes demand-side management (DSM) program costs. DSM program costs were $2 million in the first quarter of 2011 compared to $1 million in the first quarter of 2010. DSM program costs are recovered through a surcharge.
2
The bank was able to hold first quarter 2011 net income essentially flat with the same quarter last year as lower expenses offset lower revenues. The major variances over the same quarter last year were (on an after-tax basis):
· $2 million reduction in noninterest expense derived from the completion of the performance improvement project; offset by
· $1 million reduction in noninterest income due to lower fees as a result of regulatory changes related to overdraft fees which became effective in the third quarter of 2010; and
· $1 million reduction in net interest income due to lower yields and lower earning asset balances largely in the residential loan portfolio.
The $0.6 million increase in first quarter 2011 net income compared to the fourth quarter of 2010 was primarily due to (on an after-tax basis): $2 million lower provision for loan losses partially offset by $1 million lower noninterest income.
Net interest margin was 4.16% in the first quarter of 2011, down slightly from 4.18% in the first quarter of 2010 and 4.21% in the fourth quarter 2010. The decline in net interest margin from the fourth quarter 2010 to the first quarter 2011 was predominantly attributable to lower deferred loan fees recognized in the first quarter 2011 because of declining mortgage prepayments. However, earning assets increased by approximately $60 million in the quarter and reflected the second consecutive quarter of loan growth.
Provision for loan losses (pretax) improved to $4.6 million in the first quarter of 2011 compared to $5.4 million in the first quarter of 2010 and $8.6 million in the fourth quarter of 2010. The decline in the provision from fourth quarter 2010 was primarily due to the fourth quarter’s provision including a $1.2 million charge-off of one commercial loan and a $1.4 million one-time adjustment to enhance our reserve methodology for the declining portfolio of residential lot loans. The majority of the provision in the first quarter 2011 reflected net charge-offs in the following loan categories: the neighbor island and mainland residential loans and vacant lot loans. We continue to expect provision to be in the range of $15 to $20 million for the year.
The first quarter 2011 net charge-off ratio remains low and declined further to 0.49%, from the 0.62% in the first quarter last year and from 0.72% reported last quarter.
3
Noninterest expense (pretax) for the first quarter 2011 of $35.1 million was down from the $38.0 million in the first quarter of 2010 and flat compared to the fourth quarter of 2010 as the bank continued to maintain the savings and efficiencies it achieved from the performance improvement project.
The bank remains strongly capitalized with a Tier 1 leverage ratio of 9.1% and total risk-based capital ratio of 13.5% as of the end of the first quarter of 2011.
HOLDING AND OTHER COMPANIES
The holding and other companies’ net losses were $4.6 million in the first quarter of 2011, which was relatively flat compared to $4.7 million in the first quarter of 2010.
BOARD DECLARES QUARTERLY DIVIDEND
On May 9, 2011, the board of directors of HEI maintained the regular quarterly cash dividend of 31 cents per share, payable on June 14, 2011, to shareholders of record at the close of business on May 20, 2011 (ex-dividend date is May 18, 2011). The dividend is equivalent to an annual rate of $1.24 per share.
Dividends have been paid continuously since 1901. At the indicated annual dividend rate and the closing share price on May 6, 2011 of $26.00, HEI’s yield is 4.8%.
WEBCAST AND TELECONFERENCE
Hawaiian Electric Industries, Inc. will conduct a webcast and teleconference call to review its first quarter 2011 earnings on Tuesday, May 10, 2011, at 7:00 a.m. Hawaii time (1:00 p.m. Eastern time). The event can be accessed through HEI’s website at www.hei.com or by dialing (866) 202-3048, passcode: 29544086 for the teleconference call. HEI and Hawaiian Electric Company, Inc. (HECO) intend to continue to use HEI’s website, www.hei.com, as a means of disclosing additional information. Such disclosures will be included on HEI’s website in the Investor Relations section. Accordingly, investors should routinely monitor such portions of HEI’s website, in addition to following HEI’s, HECO’s and ASB’s press releases, SEC filings and public conference calls and webcasts. Investors may also wish to refer to the Public Utilities Commission of the State of Hawaii (PUC) website at dms.puc.hawaii.gov/dms in order to review documents filed with and issued by the PUC.
4
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 May 24, 2011, by dialing (888) 286-8010, passcode: 72028574.
HEI supplies power to over 400,000 customers or 95% of Hawaii’s population through its electric utilities, HECO, Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited and provides a wide array of banking and other financial services to consumers and businesses through ASB, one of Hawaii’s largest financial institutions.
FORWARD-LOOKING STATEMENTS
This release may contain “forward-looking statements,” which include statements that are predictive in nature, depend upon or refer to future events or conditions, and usually include words such as expects, anticipates, intends, plans, believes, predicts, estimates or similar expressions. In addition, any statements concerning future financial performance (including future revenues, expenses, earnings or losses or growth rates), ongoing business strategies or prospects or possible future actions, which may be provided by management, 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 v and vi of HEI’s Annual Report on Form 10-K for the year ended December 31, 2010, 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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5
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| | Three months ended | |
| | March 31, | |
(in thousands, except per share amounts) | | 2011 | | 2010 | |
Revenues | | | | | |
Electric utility | | $ | 645,335 | | $ | 548,111 | |
Bank | | 65,313 | | 70,914 | |
Other | | (15 | ) | 15 | |
| | 710,633 | | 619,040 | |
Expenses | | | | | |
Electric utility | | 600,127 | | 505,502 | |
Bank | | 43,559 | | 49,143 | |
Other | | 3,572 | | 3,688 | |
| | 647,258 | | 558,333 | |
Operating income (loss) | | | | | |
Electric utility | | 45,208 | | 42,609 | |
Bank | | 21,754 | | 21,771 | |
Other | | (3,587 | ) | (3,673 | ) |
| | 63,375 | | 60,707 | |
Interest expense—other than on deposit liabilities and other bank borrowings | | (20,140 | ) | (20,381 | ) |
Allowance for borrowed funds used during construction | | 520 | | 779 | |
Allowance for equity funds used during construction | | 1,244 | | 1,773 | |
Income before income taxes | | 44,999 | | 42,878 | |
Income taxes | | 16,064 | | 15,279 | |
Net income | | 28,935 | | 27,599 | |
Preferred stock dividends of subsidiaries | | 473 | | 473 | |
Net income for common stock | | $ | 28,462 | | $ | 27,126 | |
Basic earnings per common share | | $ | 0.30 | | $ | 0.29 | |
Diluted earnings per common share | | $ | 0.30 | | $ | 0.29 | |
Dividends per common share | | $ | 0.31 | | $ | 0.31 | |
Weighted-average number of common shares outstanding | | 94,817 | | 92,572 | |
Adjusted weighted-average shares | | 95,182 | | 92,848 | |
Income (loss) by segment | | | | | |
Electric utility | | $ | 19,189 | | $ | 18,052 | |
Bank | | 13,851 | | 13,736 | |
Other | | (4,578 | ) | (4,662 | ) |
Net income for common stock | | $ | 28,462 | | $ | 27,126 | |
This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference and included in HEI’s Annual Report on SEC Form 10-K for the year ended December 31, 2010 and the consolidated financial statements and the notes thereto in HEI’s Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2011 (when filed). Results of operations for interim periods are not necessarily indicative of results to be expected for future interim
periods or the full year.
6
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | March 31, | | December 31, | |
(dollars in thousands) | | 2011 | | 2010 | |
| | | | | |
Assets | | | | | |
Cash and cash equivalents | | $ | 316,254 | | $ | 330,651 | |
Accounts receivable and unbilled revenues, net | | 286,876 | | 266,996 | |
Available-for-sale investment and mortgage-related securities | | 670,949 | | 678,152 | |
Investment in stock of Federal Home Loan Bank of Seattle | | 97,764 | | 97,764 | |
Loans receivable held for investment, net | | 3,549,750 | | 3,489,880 | |
Loans held for sale, at lower of cost or fair value | | 4,308 | | 7,849 | |
Property, plant and equipment, net of accumulated depreciation of $2,032,500 in 2011 and $2,037,598 in 2010 | | 3,175,375 | | 3,165,918 | |
Regulatory assets | | 481,812 | | 478,330 | |
Other | | 462,258 | | 487,614 | |
Goodwill | | 82,190 | | 82,190 | |
Total assets | | $ | 9,127,536 | | $ | 9,085,344 | |
Liabilities and shareholders’ equity | | | | | |
Liabilities | | | | | |
Accounts payable | | $ | 162,748 | | $ | 202,446 | |
Interest and dividends payable | | 27,496 | | 27,814 | |
Deposit liabilities | | 4,035,255 | | 3,975,372 | |
Short-term borrowings—other than bank | | — | | 24,923 | |
Other bank borrowings | | 244,674 | | 237,319 | |
Long-term debt, net—other than bank | | 1,439,974 | | 1,364,942 | |
Deferred income taxes | | 291,470 | | 278,958 | |
Regulatory liabilities | | 304,375 | | 296,797 | |
Contributions in aid of construction | | 338,070 | | 335,364 | |
Other | | 752,630 | | 823,479 | |
Total liabilities | | 7,596,692 | | 7,567,414 | |
| | | | | |
Preferred stock of subsidiaries - not subject to mandatory redemption | | 34,293 | | 34,293 | |
| | | | | |
Shareholders’ equity | | | | | |
Preferred stock, no par value, authorized 10,000,000 shares; issued: none | | — | | — | |
Common stock, no par value, authorized 200,000,000 shares; issued and outstanding: 95,288,966 share in 2011 and 94,690,932 shares in 2010 | | 1,329,901 | | 1,314,199 | |
Retained earnings | | 180,960 | | 181,910 | |
Accumulated other comprehensive loss, net of tax benefits | | (14,310 | ) | (12,472 | ) |
Total shareholders’ equity | | 1,496,551 | | 1,483,637 | |
Total liabilities and shareholders’ equity | | $ | 9,127,536 | | $ | 9,085,344 | |
This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference and included in HEI’s Annual Report on SEC Form 10-K for the year ended December 31, 2010 and the consolidated financial statements and the notes thereto in HEI’s Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2011 (when filed). Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.
7
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March 31 | | 2011 | | 2010 | |
(in thousands) | | | | | |
Cash flows from operating activities | | | | | |
Net income | | $ | 28,935 | | $ | 27,599 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities | | | | | |
Depreciation of property, plant and equipment | | 37,708 | | 39,798 | |
Other amortization | | 2,354 | | 1,565 | |
Provision for loan losses | | 4,550 | | 5,359 | |
Loans receivable originated and purchased, held for sale | | (35,015 | ) | (78,685 | ) |
Proceeds from sale of loans receivable, held for sale | | 43,048 | | 82,814 | |
Changes in deferred income taxes | | 16,687 | | (129 | ) |
Changes in excess tax benefits from share-based payment arrangements | | (22 | ) | (43 | ) |
Allowance for equity funds used during construction | | (1,244 | ) | (1,773 | ) |
Increase (decrease) in cash overdraft | | (2,688 | ) | 681 | |
Changes in assets and liabilities | | | | | |
Decrease (increase) in accounts receivable and unbilled revenues, net | | (19,880 | ) | 7,231 | |
Increase in fuel oil stock | | (3,513 | ) | (26,506 | ) |
Increase (decrease) in accounts, interest and dividends payable | | (40,016 | ) | 2,155 | |
Changes in prepaid and accrued income taxes and utility revenue taxes | | (1,594 | ) | (48,689 | ) |
Changes in other assets and liabilities | | (42,544 | ) | (1,508 | ) |
Net cash provided by (used in) operating activities | | (13,234 | ) | 9,869 | |
Cash flows from investing activities | | | | | |
Available-for-sale investment and mortgage-related securities purchased | | (109,307 | ) | (170,385 | ) |
Principal repayments on available-for-sale investment and mortgage-related securities | | 114,529 | | 48,338 | |
Net decrease (increase) in loans held for investment | | (70,269 | ) | 38,072 | |
Proceeds from sale of real estate acquired in settlement of loans | | 1,253 | | 1,279 | |
Capital expenditures | | (38,491 | ) | (34,816 | ) |
Contributions in aid of construction | | 5,749 | | 3,729 | |
Other | | 145 | | — | |
Net cash used in investing activities | | (96,391 | ) | (113,783 | ) |
Cash flows from financing activities | | | | | |
Net increase (decrease) in deposit liabilities | | 59,883 | | (50,369 | ) |
Net increase (decrease) in short-term borrowings with original maturities of three months or less | | (24,923 | ) | 18,249 | |
Net increase (decrease) in retail repurchase agreements | | 7,368 | | (3,461 | ) |
Proceeds from issuance of long-term debt | | 125,000 | | — | |
Repayment of long-term debt | | (50,000 | ) | — | |
Changes in excess tax benefits from share-based payment arrangements | | 22 | | 43 | |
Net proceeds from issuance of common stock | | 5,674 | | 5,557 | |
Common stock dividends | | (23,593 | ) | (23,048 | ) |
Preferred stock dividends of subsidiaries | | (473 | ) | (473 | ) |
Other | | (3,730 | ) | (4,474 | ) |
Net cash provided by (used in) financing activities | | 95,228 | | (57,976 | ) |
Net decrease in cash and cash equivalents | | (14,397 | ) | (161,890 | ) |
Cash and cash equivalents, beginning of period | | 330,651 | | 503,922 | |
Cash and cash equivalents, end of period | | $ | 316,254 | | $ | 342,032 | |
This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference and included in HEI’s Annual Report on SEC Form 10-K for the year ended December 31, 2010 and the consolidated financial statements and the notes thereto in HEI’s Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2011 (when filed). Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.
8
Hawaiian Electric Company, Inc. (HECO) and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| | Three months ended
March 31, | |
(dollars in thousands, except per barrel amounts) | | 2011 | | 2010 | |
| | | | | |
Operating revenues | | $ | 644,301 | | $ | 546,712 | |
| | | | | |
Operating expenses | | | | | |
Fuel oil | | 260,860 | | 211,752 | |
Purchased power | | 147,958 | | 116,782 | |
Other operation | | 65,531 | | 59,244 | |
Maintenance | | 29,196 | | 27,053 | |
Depreciation | | 36,432 | | 38,642 | |
Taxes, other than income taxes | | 59,995 | | 51,791 | |
Income taxes | | 11,610 | | 11,041 | |
| | 611,582 | | 516,305 | |
Operating income | | 32,719 | | 30,407 | |
| | | | | |
Other income | | | | | |
Allowance for equity funds used during construction | | 1,244 | | 1,773 | |
Other, net | | 910 | | 1,241 | |
| | 2,154 | | 3,014 | |
Interest and other charges | | | | | |
Interest on long-term debt | | 14,383 | | 14,383 | |
Amortization of net bond premium and expense | | 783 | | 667 | |
Other interest charges | | 539 | | 599 | |
Allowance for borrowed funds used during construction | | (520 | ) | (779 | ) |
| | 15,185 | | 14,870 | |
Net income | | 19,688 | | 18,551 | |
Preferred stock dividends of subsidiaries | | 229 | | 229 | |
Net income attributable to HECO | | 19,459 | | 18,322 | |
Preferred stock dividends of HECO | | 270 | | 270 | |
Net income for common stock | | $ | 19,189 | | $ | 18,052 | |
| | | | | |
OTHER ELECTRIC UTILITY INFORMATION | | | | | |
Kilowatthour sales (millions) | | 2,350 | | 2,273 | |
Wet-bulb temperature (Oahu average; degrees Fahrenheit) | | 67.1 | | 65.7 | |
Cooling degree days (Oahu) | | 920 | | 857 | |
Average fuel oil cost per barrel | | $ | 101.03 | | $ | 81.95 | |
Customer accounts (end of period) | | 445,151 | | 443,294 | |
| | Twelve months ended | |
Return on average common equity | | March 31, 2011 | |
(rate-making, simple average method) | | Allowed %(1) | | Actual % | |
HECO | | 10.00 | | 5.63 | |
HELCO | | 10.50 | | 7.26 | |
MECO | | 10.50 | | 5.59 | |
(1) Based on the decisions applicable to rates in effect on March 31, 2011 (interim decisions for HELCO and MECO; final decision for HECO, which reflects the approval of decoupling and other cost-recovery mechanisms). MECO’s interim rates became effective in August 2010. HELCO’s interim rates became effective in January 2011. HECO’s interim rates are expected to become effective in summer 2011.
This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HECO’s Annual Report on SEC Form 10-K for the year ended December 31, 2010 and the consolidated financial statements and the notes thereto in HECO’s Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2011 (when filed). Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.
9
Hawaiian Electric Company, Inc. (HECO) and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | March 31, | | December 31, | |
(in thousands, except share data) | | 2011 | | 2010 | |
Assets | | | | | |
Utility plant, at cost | | | | | |
Land | | $ | 51,440 | | $ | 51,364 | |
Plant and equipment | | 4,909,393 | | 4,896,974 | |
Less accumulated depreciation | | (1,946,072 | ) | (1,941,059 | ) |
Construction in progress | | 104,300 | | 101,562 | |
Net utility plant | | 3,119,061 | | 3,108,841 | |
Current assets | | | | | |
Cash and cash equivalents | | 45,354 | | 122,936 | |
Customer accounts receivable, net | | 149,486 | | 138,171 | |
Accrued unbilled revenues, net | | 113,786 | | 104,384 | |
Other accounts receivable, net | | 9,332 | | 9,376 | |
Fuel oil stock, at average cost | | 156,218 | | 152,705 | |
Materials and supplies, at average cost | | 37,782 | | 36,717 | |
Prepayments and other | | 18,931 | | 55,216 | |
Regulatory assets | | 8,320 | | 7,349 | |
Total current assets | | 539,209 | | 626,854 | |
Other long-term assets | | | | | |
Regulatory assets | | 473,492 | | 470,981 | |
Unamortized debt expense | | 13,583 | | 14,030 | |
Other | | 66,215 | | 64,974 | |
Total other long-term assets | | 553,290 | | 549,985 | |
Total assets | | $ | 4,211,560 | | $ | 4,285,680 | |
Capitalization and liabilities | | | | | |
Capitalization | | | | | |
Common stock, $6 2/3 par value, authorized 50,000,000 shares; outstanding 13,830,823 shares | | $ | 92,224 | | $ | 92,224 | |
Premium on capital stock | | 389,609 | | 389,609 | |
Retained earnings | | 856,405 | | 854,856 | |
Accumulated other comprehensive income, net of income taxes | | 736 | | 709 | |
Common stock equity | | 1,338,974 | | 1,337,398 | |
Cumulative preferred stock — not subject to mandatory redemption | | 34,293 | | 34,293 | |
Long-term debt, net | | 1,057,974 | | 1,057,942 | |
Total capitalization | | 2,431,241 | | 2,429,633 | |
Current liabilities | | | | | |
Accounts payable | | 137,956 | | 178,959 | |
Interest and preferred dividends payable | | 20,476 | | 20,603 | |
Taxes accrued | | 146,136 | | 175,960 | |
Other | | 50,078 | | 56,354 | |
Total current liabilities | | 354,646 | | 431,876 | |
Deferred credits and other liabilities | | | | | |
Deferred income taxes | | 281,422 | | 269,286 | |
Regulatory liabilities | | 304,375 | | 296,797 | |
Unamortized tax credits | | 59,454 | | 58,810 | |
Retirement benefits liability | | 333,518 | | 355,844 | |
Other | | 108,834 | | 108,070 | |
Total deferred credits and other liabilities | | 1,087,603 | | 1,088,807 | |
Contributions in aid of construction | | 338,070 | | 335,364 | |
Total capitalization and liabilities | | $ | 4,211,560 | | $ | 4,285,680 | |
This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HECO’s Annual Report on SEC Form 10-K for the year ended December 31, 2010 and the consolidated financial statements and the notes thereto in HECO’s Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2011 (when filed). Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.
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Hawaiian Electric Company, Inc. (HECO) and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March 31 | | 2011 | | 2010 | |
(in thousands) | | | | | |
| | | | | |
Cash flows from operating activities | | | | | |
Net income | | $ | 19,688 | | $ | 18,551 | |
Adjustments to reconcile net income to net cash used in operating activities | | | | | |
Depreciation of property, plant and equipment | | 36,432 | | 38,642 | |
Other amortization | | 2,288 | | 2,097 | |
Changes in deferred income taxes | | 13,521 | | (1,834 | ) |
Changes in tax credits, net | | 755 | | 776 | |
Allowance for equity funds used during construction | | (1,244 | ) | (1,773 | ) |
Increase (decrease) in cash overdraft | | (2,688 | ) | 681 | |
Changes in assets and liabilities | | | | | |
Decrease (increase) in accounts receivable | | (11,271 | ) | 7,328 | |
Increase in accrued unbilled revenues | | (9,402 | ) | (486 | ) |
Increase in fuel oil stock | | (3,513 | ) | (26,506 | ) |
Increase in materials and supplies | | (1,065 | ) | (1,248 | ) |
Increase in regulatory assets | | (7,872 | ) | (1,143 | ) |
Increase (decrease) in accounts payable | | (42,123 | ) | 3,175 | |
Changes in prepaid and accrued income taxes and utility revenue taxes | | 240 | | (51,243 | ) |
Changes in other assets and liabilities | | (21,378 | ) | 3,276 | |
Net cash used in operating activities | | (27,632 | ) | (9,707 | ) |
Cash flows from investing activities | | | | | |
Capital expenditures | | (37,556 | ) | (34,189 | ) |
Contributions in aid of construction | | 5,749 | | 3,729 | |
Net cash used in investing activities | | (31,807 | ) | (30,460 | ) |
Cash flows from financing activities | | | | | |
Common stock dividends | | (17,640 | ) | (15,150 | ) |
Preferred stock dividends of HECO and subsidiaries | | (499 | ) | (499 | ) |
Net increase in short-term borrowings from nonaffiliates and affiliate with original maturities of three months or less | | — | | 13,748 | |
Other | | (4 | ) | — | |
Net cash used in financing activities | | (18,143 | ) | (1,901 | ) |
Net decrease in cash and cash equivalents | | (77,582 | ) | (42,068 | ) |
Cash and cash equivalents, beginning of the period | | 122,936 | | 73,578 | |
Cash and cash equivalents, end of period | | $ | 45,354 | | $ | 31,510 | |
This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference in HECO’s Annual Report on SEC Form 10-K for the year ended December 31, 2010 and the consolidated financial statements and the notes thereto in HECO’s Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2011 (when filed). Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.
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American Savings Bank, F.S.B. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME DATA
(Unaudited)
| | Three months ended | |
| | March 31, | | December 31, | | March 31, | |
(in thousands) | | 2011 | | 2010 | | 2010 | |
Interest and dividend income | | | | | | | |
Interest and fees on loans | | $ | 46,097 | | $ | 46,898 | | $ | 49,745 | |
Interest and dividends on investment and mortgage-related securities | | 3,769 | | 4,131 | | 3,317 | |
| | 49,866 | | 51,029 | | 53,062 | |
Interest expense | | | | | | | |
Interest on deposit liabilities | | 2,593 | | 3,031 | | 4,423 | |
Interest on other borrowings | | 1,367 | | 1,395 | | 1,426 | |
| | 3,960 | | 4,426 | | 5,849 | |
Net interest income | | 45,906 | | 46,603 | | 47,213 | |
Provision for loan losses | | 4,550 | | 8,584 | | 5,359 | |
Net interest income after provision for loan losses | | 41,356 | | 38,019 | | 41,854 | |
Noninterest income | | | | | | | |
Fees from other financial services | | 6,946 | | 7,436 | | 6,414 | |
Fee income on deposit liabilities | | 4,449 | | 4,849 | | 7,520 | |
Fee income on other financial products | | 1,673 | | 1,530 | | 1,525 | |
Other income | | 2,379 | | 3,874 | | 2,393 | |
| | 15,447 | | 17,689 | | 17,852 | |
Noninterest expense | | | | | | | |
Compensation and employee benefits | | 17,505 | | 16,999 | | 17,402 | |
Occupancy | | 4,240 | | 3,931 | | 4,225 | |
Data processing | | 1,970 | | 2,292 | | 4,338 | |
Services | | 1,771 | | 1,477 | | 1,728 | |
Equipment | | 1,657 | | 1,671 | | 1,709 | |
Other expense | | 7,933 | | 8,668 | | 8,568 | |
| | 35,076 | | 35,038 | | 37,970 | |
Income before income taxes | | 21,727 | | 20,670 | | 21,736 | |
Income taxes | | 7,876 | | 7,374 | | 8,000 | |
Net income | | $ | 13,851 | | $ | 13,296 | | $ | 13,736 | |
| | | | | | | |
OTHER BANK INFORMATION (%) | | | | | | | |
Return on average assets | | 1.15 | | 1.10 | | 1.12 | |
Return on average equity | | 11.20 | | 10.59 | | 11.02 | |
Net interest margin | | 4.16 | | 4.21 | | 4.18 | |
Net charge-offs to average loans outstanding (annualized) | | 0.49 | | 0.72 | | 0.62 | |
Efficiency ratio | | 57 | | 54 | | 58 | |
| | | | | | | |
As of period end | | | | | | | |
Nonperforming assets to loans outstanding and real estate owned ** | | 1.82 | | 1.77 | | 2.13 | |
Allowance for loan losses to loans outstanding | | 1.14 | | 1.15 | | 1.13 | |
Tier-1 leverage ratio | | 9.1 | | 9.2 | | 9.1 | |
Total risk-based capital ratio | | 13.5 | | 13.9 | | 14.0 | |
Tangible common equity to total assets | | 8.4 | | 8.6 | | 8.6 | |
** Regulatory basis
This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference and included in HEI’s Annual Report on SEC Form 10-K for the year ended December 31, 2010 and the consolidated financial statements and the notes thereto in HEI’s Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2011 (when filed). Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.
12
American Savings Bank, F.S.B. and Subsidiaries
CONSOLIDATED BALANCE SHEETS DATA
(Unaudited)
| | March 31, | | December 31, | |
(in thousands) | | 2011 | | 2010 | |
| | | | | |
Assets | | | | | |
Cash and cash equivalents | | $ | 220,066 | | $ | 204,397 | |
Federal funds sold | | 374 | | 1,721 | |
Available-for-sale investment and mortgage-related securities | | 670,949 | | 678,152 | |
Investment in stock of Federal Home Loan Bank of Seattle | | 97,764 | | 97,764 | |
Loans receivable held for investment, net | | 3,549,750 | | 3,489,880 | |
Loans held for sale, lower of cost or fair value | | 4,308 | | 7,849 | |
Other | | 232,865 | | 234,806 | |
Goodwill | | 82,190 | | 82,190 | |
Total assets | | $ | 4,858,266 | | $ | 4,796,759 | |
| | | | | |
Liabilities and shareholder’s equity | | | | | |
Deposit liabilities—noninterest-bearing | | $ | 907,444 | | $ | 865,642 | |
Deposit liabilities—interest-bearing | | 3,127,811 | | 3,109,730 | |
Other borrowings | | 244,674 | | 237,319 | |
Other | | 87,030 | | 90,683 | |
Total liabilities | | 4,366,959 | | 4,303,374 | |
| | | | | |
Common stock | | 330,898 | | 330,562 | |
Retained earnings | | 168,962 | | 169,111 | |
Accumulated other comprehensive loss, net of tax benefits | | (8,553 | ) | (6,288 | ) |
Total shareholder’s equity | | 491,307 | | 493,385 | |
Total liabilities and shareholder’s equity | | $ | 4,858,266 | | $ | 4,796,759 | |
This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated by reference and included in HEI’s Annual Report on SEC Form 10-K for the year ended December 31, 2010 and the consolidated financial statements and the notes thereto in HEI’s Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2011 (when filed). Results of operations for interim periods are not necessarily indicative of results to be expected for future interim
periods or the full year.
13
