HEI Exhibit 99
August 2, 2012
Contact: | Shelee M.T. Kimura | | | |
| Manager, Investor Relations & | | Telephone: (808) 543-7384 | |
| Strategic Planning | | E-mail: skimura@hei.com | |
HAWAIIAN ELECTRIC INDUSTRIES REPORTS SECOND QUARTER 2012 EARNINGS
& DECLARES DIVIDEND
Earnings Per Share of $0.40 Consistent with First Quarter 2012
Hawaiian Electric Company Invests Over $74 Million in Infrastructure
American Savings Bank Delivers Solid Results and Continues Loan Growth
Board 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 second quarter of 2012 of $38.8 million, or $0.40 diluted earnings per share (EPS), consistent with $38.3 million, or $0.40 diluted EPS in the first, or linked, quarter of 2012. In the second quarter of 2011, net income was $27.1 million, or $0.28 diluted EPS.
“HEI delivered consistent results in the first half of the year as we continued to invest in Hawaii’s economy and clean energy future. This quarter, our utilities invested another $74 million, two and a half times its earnings, in local infrastructure projects to continue to modernize the electric grid. Our utilities’ use of renewable energy – now at more than 13% of electric sales – continues to grow, reflecting our ongoing commitment to moving Hawaii to clean, locally produced energy. American Savings Bank (American) again reported solid results and total loans to customers grew over $110 million from last year, marking the seventh consecutive quarter of growth. Hawaii’s gradual economic recovery continues to be reflected in American’s declining credit costs as asset quality continued to improve,” said Constance H. Lau, HEI president and chief executive officer.
“Reducing our dependence on oil is critical to the future of Hawaii, our company and our customers,” said Lau. Since the end of 2010, close to 90% of the increase in the typical Oahu customer’s bill was due to the increase in the cost of oil. “With the ongoing impact of high oil prices on customer bills, our utilities’ rate of renewable integration remains a critical priority to help stabilize customer bills,” said Lau.
Hawaiian Electric Industries, Inc. News Release
August 2, 2012
Page 2
HAWAIIAN ELECTRIC COMPANY CONTINUES TO INVEST IN CLEAN ENERGY AND RELIABILITY
Hawaiian Electric Company’s1 net income for the second quarter of 2012 was $29.4 million, compared to $27.3 million in the linked quarter and $17.0 million in the second quarter of 2011.
Compared to the second quarter of 2011, the main driver of the improvement was the recovery of costs for reliability and clean energy investments on Oahu which became effective in July 2011. As indicated last quarter, in 2011 the Oahu utility continued to spend in advance of revenues to recover the costs for its clean energy and reliability initiatives which put pressure on earnings for the first half of 2011.
Operations and maintenance (O&M) expenses2 (after-tax) were $2 million lower for the second quarter of 2012 compared to the second quarter of 2011 largely due to $2 million (after-tax) lower administrative and general expenses from a regulatory change in the capitalization of costs which became effective in July 2011. Due to the timing of projects planned in the second half of the year, management continues to expect O&M expenses to be 6% higher for the full year 2012 compared to 2011.
AMERICAN SAVINGS BANK CONTINUES TO DELIVER SOLID RESULTS
American’s net income for the second quarter of 2012 was $14.2 million compared to $15.9 million in the first, or linked, quarter of 2012 and $15.2 million in the second quarter of 2011. Net income declined by $1.7 million compared to the linked quarter which included the release of tax-related reserves of approximately $1 million (after-tax). The remainder of the decrease was largely due to higher noninterest expenses for new products and business projects, some of which were originally expected to be incurred in the first quarter. These were partially offset by $1 million lower provision for loan losses from continued improvement in credit quality and portfolio mix.
1 Hawaiian Electric Company, unless otherwise defined, refers to the three utilities, Hawaiian Electric Company, Inc. on Oahu, Maui Electric Company, Limited, and Hawaii Electric Light Company, Inc.
2 Excludes demand side management (DSM) program costs. DSM program costs were $2 million in second quarter of 2012 compared to $1 million in second quarter of 2011. DSM program costs are recovered through a surcharge.
Hawaiian Electric Industries, Inc. News Release
August 2, 2012
Page 3
Compared to the same quarter of 2011, net income declined by $1.0 million due to the non-recurring insurance gain in the second quarter of 2011.
Overall, American continued to deliver solid results in second quarter 2012 with a return on average equity of 11.35% and a return on average assets of 1.15%.
Also refer to the American news release issued on July 30, 2012.
HOLDING AND OTHER COMPANIES
The holding and other companies’ net losses were $4.8 million in the second quarter of 2012 compared to $5.1 million in the second quarter of 2011.
BOARD DECLARES QUARTERLY DIVIDEND
On August 2, 2012, the board of directors maintained HEI’s quarterly cash dividend of 31 cents per share, payable on September 12, 2012, to shareholders of record at the close of business on August 15, 2012 (ex-dividend date is August 13, 2012). 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 August 1, 2012 of $28.38, HEI’s yield is 4.4%.
WEBCAST AND TELECONFERENCE
Hawaiian Electric Industries, Inc. will conduct a webcast and teleconference call to review its second quarter 2012 earnings on Friday, August 3, 2012, at 8:00 a.m. Hawaii time (2:00 p.m. Eastern time). The event can be accessed through HEI’s website at www.hei.com or by dialing (800) 706-7748, passcode: 32260721 for the teleconference call. The presentation for the webcast will be on HEI’s website under the headings “Investor Relations,” “News & Events” and “Presentations & Webcasts.” 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 American’s press releases, Securities and Exchange Commission (SEC) filings and public conference calls and webcasts. The information on HEI’s website is not incorporated by reference in this document or in HEI’s and HECO’s SEC filings unless, and except to the extent, specifically incorporated by reference. Investors may also wish to refer to the Public Utilities
Hawaiian Electric Industries, Inc. News Release
August 2, 2012
Page 4
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. No information on the PUC website is incorporated by reference in this document or in HEI’s and HECO’s SEC filings.
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 August 17, 2012, by dialing (888) 286-8010, passcode: 61628408.
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 American, 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, 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, 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” and “Risk Factors” discussions (which are incorporated by reference herein) set forth in HEI’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 and 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 the report, presentation or filing in which they are made. Except to the extent required by the federal securities laws, HEI, HECO, American 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.
###
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) | | Three months | | Six months | |
| | ended June 30, | | ended June 30, | |
(in thousands, except per share amounts) | | 2012 | | 2011 | | 2012 | | 2011 | |
Revenues | | | | | | | | | |
Electric utility | | $ | 789,552 | | $ | 728,738 | | $ | 1,539,162 | | $ | 1,374,073 | |
Bank | | 64,721 | | 66,318 | | 129,973 | | 131,631 | |
Other | | (5 | ) | (737 | ) | (7 | ) | (752 | ) |
Total revenues | | 854,268 | | 794,319 | | 1,669,128 | | 1,504,952 | |
Expenses | | | | | | | | | |
Electric utility | | 728,056 | | 686,220 | | 1,420,412 | | 1,286,347 | |
Bank | | 42,847 | | 42,498 | | 85,187 | | 86,057 | |
Other | | 3,959 | | 1,940 | | 8,307 | | 5,512 | |
Total expenses | | 774,862 | | 730,658 | | 1,513,906 | | 1,377,916 | |
Operating income (loss) | | | | | | | | | |
Electric utility | | 61,496 | | 42,518 | | 118,750 | | 87,726 | |
Bank | | 21,874 | | 23,820 | | 44,786 | | 45,574 | |
Other | | (3,964 | ) | (2,677 | ) | (8,314 | ) | (6,264 | ) |
Total operating income | | 79,406 | | 63,661 | | 155,222 | | 127,036 | |
Interest expense–other than on deposit liabilities and other bank borrowings | | (20,199 | ) | (24,177 | ) | (38,738 | ) | (44,317 | ) |
Allowance for borrowed funds used during construction | | 893 | | 553 | | 1,763 | | 1,073 | |
Allowance for equity funds used during construction | | 1,997 | | 1,317 | | 3,937 | | 2,561 | |
Income before income taxes | | 62,097 | | 41,354 | | 122,184 | | 86,353 | |
Income taxes | | 22,824 | | 13,742 | | 44,122 | | 29,806 | |
Net income | | 39,273 | | 27,612 | | 78,062 | | 56,547 | |
Preferred stock dividends of subsidiaries | | 473 | | 473 | | 946 | | 946 | |
Net income for common stock | | $ | 38,800 | | $ | 27,139 | | $ | 77,116 | | $ | 55,601 | |
Basic earnings per common share | | $ | 0.40 | | $ | 0.28 | | $ | 0.80 | | $ | 0.58 | |
Diluted earnings per common share | | $ | 0.40 | | $ | 0.28 | | $ | 0.80 | | $ | 0.58 | |
Dividends per common share | | $ | 0.31 | | $ | 0.31 | | $ | 0.62 | | $ | 0.62 | |
Weighted-average number of common shares outstanding | | 96,693 | | 95,393 | | 96,430 | | 95,107 | |
Adjusted weighted-average shares | | 96,979 | | 95,555 | | 96,819 | | 95,394 | |
| | | | | | | | | |
Net income (loss) for common stock by segment | | | | | | | | | |
Electric utility | | $ | 29,376 | | $ | 17,024 | | $ | 56,676 | | $ | 36,213 | |
Bank | | 14,189 | | 15,195 | | 30,066 | | 29,046 | |
Other | | (4,765 | ) | (5,080 | ) | (9,626 | ) | (9,658 | ) |
Net income for common stock | | $ | 38,800 | | $ | 27,139 | | $ | 77,116 | | $ | 55,601 | |
Comprehensive income attributable to common shareholders | | $ | 40,350 | | $ | 31,606 | | $ | 78,977 | | $ | 58,230 | |
This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI’s Annual Report on SEC Form 10-K for the year ended December 31, 2011 and HEI’s Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012 (when filed), as updated by SEC Forms 8-K. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.
5
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | June 30, | | December 31, | |
(dollars in thousands) | | 2012 | | 2011 | |
Assets | | | | | |
Cash and cash equivalents | | $ | 207,549 | | $ | 270,265 | |
Accounts receivable and unbilled revenues, net | | 386,750 | | 344,322 | |
Available-for-sale investment and mortgage-related securities | | 639,112 | | 624,331 | |
Investment in stock of Federal Home Loan Bank of Seattle | | 97,764 | | 97,764 | |
Loans receivable held for investment, net | | 3,695,474 | | 3,642,818 | |
Loans held for sale, at lower of cost or fair value | | 11,915 | | 9,601 | |
Property, plant and equipment, net of accumulated depreciation of $2,086,098 in 2012 and $2,049,821 in 2011 | | 3,436,021 | | 3,334,501 | |
Regulatory assets | | 698,448 | | 669,389 | |
Other | | 566,734 | | 519,296 | |
Goodwill | | 82,190 | | 82,190 | |
Total assets | | $ | 9,821,957 | | $ | 9,594,477 | |
Liabilities and shareholders’ equity | | | | | |
Liabilities | | | | | |
Accounts payable | | $ | 231,871 | | $ | 216,176 | |
Interest and dividends payable | | 24,897 | | 25,041 | |
Deposit liabilities | | 4,136,741 | | 4,070,032 | |
Short-term borrowings—other than bank | | 96,240 | | 68,821 | |
Other bank borrowings | | 218,673 | | 233,229 | |
Long-term debt, net—other than bank | | 1,429,653 | | 1,340,070 | |
Deferred income taxes | | 396,806 | | 354,051 | |
Regulatory liabilities | | 317,958 | | 315,466 | |
Contributions in aid of construction | | 381,206 | | 356,203 | |
Retirement benefits liability | | 497,687 | | 530,410 | |
Other | | 480,156 | | 521,979 | |
Total liabilities | | 8,211,888 | | 8,031,478 | |
| | | | | |
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: 97,023,148 shares in 2012 and 96,038,328 shares in 2011 | | 1,377,426 | | 1,349,446 | |
Retained earnings | | 215,626 | | 198,397 | |
Accumulated other comprehensive loss, net of tax benefits | | (17,276 | ) | (19,137 | ) |
Total shareholders’ equity | | 1,575,776 | | 1,528,706 | |
Total liabilities and shareholders’ equity | | $ | 9,821,957 | | $ | 9,594,477 | |
This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI’s Annual Report on SEC Form 10-K for the year ended December 31, 2011 and HEI’s Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012 (when filed), as updated by SEC Forms 8-K. 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 Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30 | | 2012 | | 2011 | |
(in thousands) | | | | | |
Cash flows from operating activities | | | | | |
Net income | | $ | 78,062 | | $ | 56,547 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities | | | | | |
Depreciation of property, plant and equipment | | 75,517 | | 75,243 | |
Other amortization | | 2,999 | | 11,965 | |
Provision for loan losses | | 5,924 | | 7,105 | |
Loans receivable originated and purchased, held for sale | | (161,344 | ) | (64,028 | ) |
Proceeds from sale of loans receivable, held for sale | | 161,713 | | 71,829 | |
Change in deferred income taxes | | 41,541 | | 39,051 | |
Change in excess tax benefits from share-based payment arrangements | | (40 | ) | (55 | ) |
Allowance for equity funds used during construction | | (3,937 | ) | (2,561 | ) |
Change in cash overdraft | | - | | (2,305 | ) |
Changes in assets and liabilities | | | | | |
Increase in accounts receivable and unbilled revenues, net | | (42,428 | ) | (52,537 | ) |
Increase in fuel oil stock | | (35,893 | ) | (6,509 | ) |
Increase (decrease) in accounts, interest and dividends payable | | 3,578 | | (41,989 | ) |
Change in prepaid and accrued income taxes and utility revenue taxes | | (12,998 | ) | 8,333 | |
Contributions to defined benefit pension and other postretirement benefit plans | | (53,356 | ) | (37,556 | ) |
Change in other assets and liabilities | | (62,910 | ) | (7,352 | ) |
Net cash provided by (used in) operating activities | | (3,572 | ) | 55,181 | |
Cash flows from investing activities | | | | | |
Available-for-sale investment and mortgage-related securities purchased | | (93,808 | ) | (193,119 | ) |
Principal repayments on available-for-sale investment and mortgage-related securities | | 75,407 | | 161,526 | |
Proceeds from sale of available-for-sale investment and mortgage-related securities | | 3,548 | | 2,066 | |
Net increase in loans held for investment | | (61,214 | ) | (104,824 | ) |
Proceeds from sale of real estate acquired in settlement of loans | | 6,036 | | 3,977 | |
Capital expenditures | | (145,263 | ) | (89,088 | ) |
Contributions in aid of construction | | 26,981 | | 8,153 | |
Other | | - | | (2,911 | ) |
Net cash used in investing activities | | (188,313 | ) | (214,220 | ) |
Cash flows from financing activities | | | | | |
Net increase in deposit liabilities | | 66,709 | | 79,577 | |
Net increase (decrease) in short-term borrowings with original maturities of three months or less | | 27,419 | | (24,923 | ) |
Net increase (decrease) in retail repurchase agreements | | (14,556 | ) | 1,803 | |
Proceeds from issuance of long-term debt | | 417,000 | | 125,000 | |
Repayment of long-term debt | | (328,500 | ) | (50,000 | ) |
Change in excess tax benefits from share-based payment arrangements | | 40 | | 55 | |
Net proceeds from issuance of common stock | | 11,909 | | 12,071 | |
Common stock dividends | | (47,851 | ) | (47,331 | ) |
Preferred stock dividends of subsidiaries | | (946 | ) | (946 | ) |
Other | | (2,055 | ) | (172 | ) |
Net cash provided by financing activities | | 129,169 | | 95,134 | |
Net decrease in cash and cash equivalents | | (62,716 | ) | (63,905 | ) |
Cash and cash equivalents, beginning of period | | 270,265 | | 330,651 | |
Cash and cash equivalents, end of period | | $ | 207,549 | | $ | 266,746 | |
This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI’s Annual Report on SEC Form 10-K for the year ended December 31, 2011 and HEI’s Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012 (when filed), as updated by SEC Forms 8-K. 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 INCOME
(Unaudited) | | Three months ended | | Six months ended | |
| | June 30, | | June 30, | |
(dollars in thousands, except per barrel amounts) | | 2012 | | 2011 | | 2012 | | 2011 | |
| | | | | | | | | |
Operating revenues | | $ | 787,685 | | $ | 727,652 | | $ | 1,535,623 | | $ | 1,371,953 | |
Operating expenses | | | | | | | | | |
Fuel oil | | 331,064 | | 312,141 | | 658,903 | | 573,001 | |
Purchased power | | 188,352 | | 171,737 | | 353,141 | | 319,695 | |
Other operation | | 64,516 | | 67,388 | | 126,365 | | 132,919 | |
Maintenance | | 31,235 | | 31,276 | | 61,273 | | 60,472 | |
Depreciation | | 36,133 | | 36,258 | | 72,615 | | 72,690 | |
Taxes, other than income taxes | | 76,304 | | 67,152 | | 147,299 | | 127,147 | |
Income taxes | | 18,574 | | 11,160 | | 35,939 | | 22,770 | |
Total operating expenses | | 746,178 | | 697,112 | | 1,455,535 | | 1,308,694 | |
Operating income | | 41,507 | | 30,540 | | 80,088 | | 63,259 | |
Other income | | | | | | | | | |
Allowance for equity funds used during construction | | 1,997 | | 1,317 | | 3,937 | | 2,561 | |
Other, net | | 1,363 | | 898 | | 2,628 | | 1,808 | |
Total other income | | 3,360 | | 2,215 | | 6,565 | | 4,369 | |
Interest and other charges | | | | | | | | | |
Interest on long-term debt | | 15,323 | | 14,383 | | 29,706 | | 28,766 | |
Amortization of net bond premium and expense | | 661 | | 766 | | 1,406 | | 1,549 | |
Other interest charges (credits) | | (99 | ) | 636 | | (370 | ) | 1,175 | |
Allowance for borrowed funds used during construction | | (893 | ) | (553) | | (1,763 | ) | (1,073 | ) |
Total interest and other charges | | 14,992 | | 15,232 | | 28,979 | | 30,417 | |
Net income | | 29,875 | | 17,523 | | 57,674 | | 37,211 | |
Preferred stock dividends of subsidiaries | | 229 | | 229 | | 458 | | 458 | |
Net income attributable to HECO | | 29,646 | | 17,294 | | 57,216 | | 36,753 | |
Preferred stock dividends of HECO | | 270 | | 270 | | 540 | | 540 | |
Net income for common stock | | $ | 29,376 | | $ | 17,024 | | $ | 56,676 | | $ | 36,213 | |
Comprehensive income attributable to common shareholder | | $ | 29,451 | | $ | 17,071 | | $ | 56,828 | | $ | 36,287 | |
OTHER ELECTRIC UTILITY INFORMATION | | | | | | | | | |
Kilowatthour sales (millions) | | | | | | | | | |
HECO | | 1,713 | | 1,793 | | 3,409 | | 3,578 | |
HELCO | | 265 | | 272 | | 536 | | 545 | |
MECO | | 279 | | 296 | | 563 | | 588 | |
| | 2,257 | | 2,361 | | 4,508 | | 4,711 | |
Wet-bulb temperature (Oahu average; degrees Fahrenheit) | | 68.0 | | 70.5 | | 67.6 | | 69.3 | |
Cooling degree days (Oahu) | | 1,150 | | 1,257 | | 2,011 | | 2,177 | |
Average fuel oil cost per barrel | | | $145.27 | | | $123.69 | | | $139.63 | | | $112.23 | |
| | | | | | | | | | | | | |
| | | | Twelve months ended June 30 | |
Return on average common equity (%) (simple average) | | | | 2012 | | 2011 | |
HECO | | | | 9.44 | | 4.50 | |
HELCO | | | | 8.77 | | 9.01 | |
MECO | | | | 6.11 | | 7.11 | |
HECO Consolidated | | | | 8.73 | | 5.83 | |
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, 2011 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, 2012 and June 30, 2012 (when filed), as updated by SEC Forms 8-K. 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 BALANCE SHEETS
(Unaudited)
| | June 30, | | December 31, | |
(dollars in thousands, except par value) | | 2012 | | 2011 | |
Assets | | | | | |
Utility plant, at cost | | | | | |
Land | | $ | 51,537 | | $ | 51,514 | |
Plant and equipment | | 5,156,323 | | 5,052,027 | |
Less accumulated depreciation | | (2,004,465 | ) | (1,966,894 | ) |
Construction in progress | | 172,986 | | 138,838 | |
Net utility plant | | 3,376,381 | | 3,275,485 | |
Current assets | | | | | |
Cash and cash equivalents | | 5,937 | | 48,806 | |
Customer accounts receivable, net | | 200,444 | | 183,328 | |
Accrued unbilled revenues, net | | 169,879 | | 137,826 | |
Other accounts receivable, net | | 2,465 | | 8,623 | |
Fuel oil stock, at average cost | | 207,441 | | 171,548 | |
Materials and supplies, at average cost | | 50,787 | | 43,188 | |
Prepayments and other | | 43,401 | | 36,667 | |
Regulatory assets | | 30,372 | | 20,283 | |
Total current assets | | 710,726 | | 650,269 | |
Other long-term assets | | | | | |
Regulatory assets | | 668,076 | | 649,106 | |
Unamortized debt expense | | 11,267 | | 12,786 | |
Other | | 91,100 | | 86,361 | |
Total other long-term assets | | 770,443 | | 748,253 | |
Total assets | | $ | 4,857,550 | | $ | 4,674,007 | |
Capitalization and liabilities | | | | | |
Capitalization | | | | | |
Common stock, $6 2/3 par value, authorized 50,000,000 shares; outstanding 14,233,723 shares in 2012 and 2011 | | $ | 94,911 | | $ | 94,911 | |
Premium on capital stock | | 426,922 | | 426,921 | |
Retained earnings | | 901,195 | | 881,041 | |
Accumulated other comprehensive income (loss), net of income taxes | | 120 | | (32 | ) |
Common stock equity | | 1,423,148 | | 1,402,841 | |
Cumulative preferred stock – not subject to mandatory redemption | | 34,293 | | 34,293 | |
Long-term debt, net | | 1,147,653 | | 1,000,570 | |
Total capitalization | | 2,605,094 | | 2,437,704 | |
Current liabilities | | | | | |
Short-term borrowings – nonaffiliates | | 44,242 | | - | |
Current portion of long-term debt | | - | | 57,500 | |
Accounts payable | | 206,484 | | 188,580 | |
Interest and preferred dividends payable | | 19,014 | | 19,483 | |
Taxes accrued | | 217,321 | | 230,076 | |
Other | | 55,447 | | 69,353 | |
Total current liabilities | | 542,508 | | 564,992 | |
Deferred credits and other liabilities | | | | | |
Deferred income taxes | | 380,484 | | 337,863 | |
Regulatory liabilities | | 317,958 | | 315,466 | |
Unamortized tax credits | | 63,437 | | 60,614 | |
Retirement benefits liability | | 463,630 | | 495,121 | |
Other | | 103,233 | | 106,044 | |
Total deferred credits and other liabilities | | 1,328,742 | | 1,315,108 | |
Contributions in aid of construction | | 381,206 | | 356,203 | |
Total capitalization and liabilities | | $ | 4,857,550 | | $ | 4,674,007 | |
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, 2011 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, 2012 and June 30, 2012 (when filed), as updated by SEC Forms 8-K. 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 STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30 | | 2012 | | 2011 | |
(in thousands) | | | | | |
| | | | | |
Cash flows from operating activities | | | | | |
Net income | | $ | 57,674 | | $ | 37,211 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities | | | | | |
Depreciation of property, plant and equipment | | 72,615 | | 72,690 | |
Other amortization | | 2,770 | | 10,833 | |
Change in deferred income taxes | | 42,524 | | 33,456 | |
Change in tax credits, net | | 2,880 | | 1,556 | |
Allowance for equity funds used during construction | | (3,937 | ) | (2,561 | ) |
Change in cash overdraft | | - | | (2,305 | ) |
Changes in assets and liabilities | | | | | |
Increase in accounts receivable | | (10,958 | ) | (33,312 | ) |
Increase in accrued unbilled revenues | | (32,053 | ) | (18,479 | ) |
Increase in fuel oil stock | | (35,893 | ) | (6,509 | ) |
Increase in materials and supplies | | (7,599 | ) | (1,490 | ) |
Increase in regulatory assets | | (35,476 | ) | (14,498 | ) |
Increase (decrease) in accounts payable | | 5,931 | | (48,288 | ) |
Change in prepaid and accrued income taxes and utility revenue taxes | | (21,141 | ) | 12,178 | |
Contributions to defined benefit pension and other postretirement benefit plans | | (52,086 | ) | (37,021 | ) |
Change in other assets and liabilities | | (6,776 | ) | 12,596 | |
Net cash provided by (used in) operating activities | | (21,525 | ) | 16,057 | |
Cash flows from investing activities | | | | | |
Capital expenditures | | (141,618 | ) | (85,395 | ) |
Contributions in aid of construction | | 26,981 | | 8,153 | |
Other | | - | | 77 | |
Net cash used in investing activities | | (114,637 | ) | (77,165 | ) |
Cash flows from financing activities | | | | | |
Common stock dividends | | (36,522 | ) | (35,279 | ) |
Preferred stock dividends of HECO and subsidiaries | | (998 | ) | (998 | ) |
Proceeds from issuance of long-term debt | | 417,000 | | - | |
Repayment of long-term debt | | (328,500 | ) | - | |
Net increase in short-term borrowings from nonaffiliates and affiliate with original maturities of three months or less | | 44,242 | | - | |
Other | | (1,929 | ) | (17 | ) |
Net cash provided by (used in) financing activities | | 93,293 | | (36,294 | ) |
Net decrease in cash and cash equivalents | | (42,869 | ) | (97,402 | ) |
Cash and cash equivalents, beginning of the period | | 48,806 | | 122,936 | |
Cash and cash equivalents, end of period | | $ | 5,937 | | $ | 25,534 | |
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, 2011 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, 2012 and June 30, 2012 (when filed), as updated by SEC Forms 8-K. Results of operations for interim periods are not necessarily indicative of results to be expected for future interim periods or the full year.
10
American Savings Bank, F.S.B. |
STATEMENTS OF INCOME DATA |
(Unaudited) | | Three months ended | | Six months ended | |
| | June 30, | | March 31, | | June 30, | | | June 30, | |
(in thousands) | | 2012 | | 2012 | | 2011 | | | 2012 | | 2011 | |
Interest income | | | | | | | | | | | | |
Interest and fees on loans | | $ | 44,473 | | $ | 44,888 | | $ | 45,648 | | | $ | 89,361 | | $ | 91,745 | |
Interest on investment and mortgage-related securities | | 3,297 | | 3,805 | | 3,793 | | | 7,102 | | 7,562 | |
Total interest income | | 47,770 | | 48,693 | | 49,441 | | | 96,463 | | 99,307 | |
Interest expense | | | | | | | | | | | | |
Interest on deposit liabilities | | 1,696 | | 1,779 | | 2,387 | | | 3,475 | | 4,980 | |
Interest on other borrowings | | 1,214 | | 1,261 | | 1,382 | | | 2,475 | | 2,749 | |
Total interest expense | | 2,910 | | 3,040 | | 3,769 | | | 5,950 | | 7,729 | |
Net interest income | | 44,860 | | 45,653 | | 45,672 | | | 90,513 | | 91,578 | |
Provision for loan losses | | 2,378 | | 3,546 | | 2,555 | | | 5,924 | | 7,105 | |
Net interest income after provision for loan losses | | 42,482 | | 42,107 | | 43,117 | | | 84,589 | | 84,473 | |
Noninterest income | | | | | | | | | | | | |
Fees from other financial services | | 7,463 | | 7,337 | | 7,240 | | | 14,800 | | 14,186 | |
Fee income on deposit liabilities | | 4,322 | | 4,278 | | 4,599 | | | 8,600 | | 9,048 | |
Fee income on other financial products | | 1,532 | | 1,549 | | 1,861 | | | 3,081 | | 3,534 | |
Other income | | 3,634 | | 3,395 | | 3,177 | | | 7,029 | | 5,556 | |
Total noninterest income | | 16,951 | | 16,559 | | 16,877 | | | 33,510 | | 32,324 | |
Noninterest expense | | | | | | | | | | | | |
Compensation and employee benefits | | 18,696 | | 18,646 | | 18,166 | | | 37,342 | | 35,671 | |
Occupancy | | 4,241 | | 4,225 | | 4,288 | | | 8,466 | | 8,528 | |
Data processing | | 2,489 | | 2,111 | | 2,058 | | | 4,600 | | 4,028 | |
Services | | 2,221 | | 1,783 | | 1,949 | | | 4,004 | | 3,720 | |
Equipment | | 1,807 | | 1,730 | | 1,772 | | | 3,537 | | 3,429 | |
Other expense | | 8,106 | | 6,707 | | 7,955 | | | 14,813 | | 15,888 | |
Total noninterest expense | | 37,560 | | 35,202 | | 36,188 | | | 72,762 | | 71,264 | |
Income before income taxes | | 21,873 | | 23,464 | | 23,806 | | | 45,337 | | 45,533 | |
Income taxes | | 7,684 | | 7,587 | | 8,611 | | | 15,271 | | 16,487 | |
Net income | | $ | 14,189 | | $ | 15,877 | | $ | 15,195 | | | $ | 30,066 | | $ | 29,046 | |
Comprehensive income | | $ | 15,456 | | $ | 15,899 | | $ | 19,439 | | | $ | 31,355 | | $ | 31,025 | |
| | | | | | | | | | | | |
OTHER BANK INFORMATION (%) | | | | | | | | | | | | |
Return on average assets | | 1.15 | | 1.29 | | 1.24 | | | 1.22 | | 1.20 | |
Return on average equity | | 11.35 | | 12.87 | | 12.19 | | | 12.11 | | 11.70 | |
Return on average tangible common equity | | 13.58 | | 15.44 | | 14.59 | | | 14.50 | | 14.02 | |
Net interest margin | | 3.97 | | 4.04 | | 4.07 | | | 4.01 | | 4.11 | |
Net charge-offs to average loans outstanding (annualized) | | 0.19 | | 0.28 | | 0.45 | | | 0.24 | | 0.47 | |
Efficiency ratio | | 60 | | 56 | | 57 | | | 58 | | 57 | |
| | | | | | | | | | | | |
As of period end | | | | | | | | | | | | |
Nonperforming assets to loans outstanding and real estate owned ** | | 1.84 | | 2.02 | | 1.69 | | | | | | |
Allowance for loan losses to loans outstanding | | 1.06 | | 1.05 | | 1.09 | | | | | | |
Tier-1 leverage ratio ** | | 9.2 | | 9.1 | | 9.1 | | | | | | |
Total risk-based capital ratio ** | | 12.8 | | 12.9 | | 13.3 | | | | | | |
Tangible common equity to total assets | | 8.58 | | 8.46 | | 8.63 | | | | | | |
** Regulatory basis
This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI’s Annual Report on SEC Form 10-K for the year ended December 31, 2011 and HEI’s Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012 (when filed), as updated by SEC Forms 8-K. 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. |
BALANCE SHEETS DATA |
(Unaudited) |
| | June 30, | | December 31, | |
(in thousands) | | 2012 | | 2011 | |
| | | | | |
Assets | | | | | |
Cash and cash equivalents | | $ | 201,193 | | $ | 219,678 | |
Available-for-sale investment and mortgage-related securities | | 639,112 | | 624,331 | |
Investment in stock of Federal Home Loan Bank of Seattle | | 97,764 | | 97,764 | |
Loans receivable held for investment | | 3,734,937 | | 3,680,724 | |
Allowance for loan losses | | (39,463 | ) | (37,906 | ) |
Loans receivable held for investment, net | | 3,695,474 | | 3,642,818 | |
Loans held for sale, at lower of cost or fair value | | 11,915 | | 9,601 | |
Other | | 236,547 | | 233,592 | |
Goodwill | | 82,190 | | 82,190 | |
Total assets | | $ | 4,964,195 | | $ | 4,909,974 | |
| | | | | |
Liabilities and shareholder’s equity | | | | | |
Deposit liabilities–noninterest-bearing | | $ | 1,076,579 | | $ | 993,828 | |
Deposit liabilities–interest-bearing | | 3,060,162 | | 3,076,204 | |
Other borrowings | | 218,673 | | 233,229 | |
Other | | 107,902 | | 118,078 | |
Total liabilities | | 4,463,316 | | 4,421,339 | |
| | | | | |
Common stock | | 332,769 | | 331,880 | |
Retained earnings | | 176,192 | | 166,126 | |
Accumulated other comprehensive loss, net of tax benefits | | (8,082 | ) | (9,371 | ) |
Total shareholder’s equity | | 500,879 | | 488,635 | |
Total liabilities and shareholder’s equity | | $ | 4,964,195 | | $ | 4,909,974 | |
This information should be read in conjunction with the consolidated financial statements and the notes thereto in HEI’s Annual Report on SEC Form 10-K for the year ended December 31, 2011 and HEI’s Quarterly Reports on SEC Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012 (when filed), as updated by SEC Forms 8-K. 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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