HEI Exhibit 99
August 3, 2011
Contact: | Shelee M.T. Kimura |
|
| Manager, Investor Relations & | Telephone: (808) 543-7384 |
| Strategic Planning | E-mail: skimura@hei.com |
HEI REPORTS SECOND QUARTER 2011 EARNINGS & DECLARES DIVIDEND
Diluted Earnings Per Share $0.28 in 2Q 2011 vs $0.31 in 2Q 2010
Interim Rate Increase Granted to Oahu Utility in July
Bank Continues Solid 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 second quarter of 2011 was $27.1 million, or $0.28 diluted EPS, compared to $29.3 million, or $0.31 diluted EPS for the second quarter of 2010.
“Earnings were lower in the second quarter as our utilities invested in their clean energy and reliability strategies which required additional capital investments and higher operating expenses. Now that rate relief has recently been approved for our largest utility, earnings should improve in the second half of the year,” said Constance H. Lau, HEI president and chief executive officer.
“At our bank, we had another solid quarter with continued improvement in credit quality and loan growth for the third consecutive quarter. Performance continued to exceed peer banks with a return on assets of 1.24%, net interest margin of 4.07% and efficiency ratio of 57%,” added Lau.
UTILITY CONTINUES TO INVEST IN CLEAN ENERGY STRATEGIES
Electric utility net income for the second quarter of 2011 was $17.0 million compared to $17.6 million in the second quarter of 2010. The $0.6 million net income decline resulted primarily from (on an after-tax basis):
· $3 million higher planned operations and maintenance (O&M) expenses(1);
· $2 million of unusual items that are unlikely to recur including a 2011 billing adjustment and 2010 fuel cost recovery of previously recognized biofuels costs;
· $1 million lower fuel efficiency savings attributable to the implementation of the heat rate deadband which became effective with decoupling; and
· $1 million lower allowance for funds used during construction as a result of projects put into service in 2010.
The quarter benefitted from several key developments, including:
· $2 million of rate relief granted in late 2010 and early 2011 for our Maui County and Hawaii Island utilities, respectively;
· $2 million lower depreciation expense from the change in depreciation rates and methods for our Hawaii Island and Maui County utilities; and
· $1 million write-down of our investment in the combined heat and power system in 2010.
Our Oahu utility implemented sales decoupling earlier this year, and its second quarter decoupling revenues were essentially flat with sales revenues in the second quarter of 2010. For our Hawaii Island and Maui County utilities which are awaiting decoupling implementation, their combined kilowatthour sales were flat compared with the same quarter last year.
As planned, O&M expenses(1) increased 6% over the same quarter last year to safely and responsibly operate our systems, invest in our clean energy strategies and serve our customers. This is in line with our previous guidance of a full year increase of 7% over the prior year. The second quarter increase was primarily due to higher transmission and distribution operations, vegetation, substation maintenance and administrative and general expenses. We are now targeting O&M to be
(1) Excludes demand-side management (DSM) program costs. DSM program costs were $1 million in the second quarter of 2011 compared to nil in the second quarter of 2010. DSM program costs are recovered through a surcharge.
flat with 2010. Oahu expenses in 2011 are expected to be higher than in 2010, but consistent with the levels included in our recent rate decision. Hawaii Island and Maui County expenses in 2011 are expected to be slightly lower than in 2010.
Effective July 26, 2011, the Public Utilities Commission granted HECO a net interim increase of $38.2 million in annual revenues, or 2.2% increase, net of revenues previously being recovered through the decoupling Revenue Adjustment Mechanism.
SOLID BANK PERFORMANCE: CONTINUED IMPROVEMENT IN CREDIT QUALITY AND MODERATE LOAN GROWTH
Bank net income for the second quarter of 2011 was $15.2 million, compared to $13.9 million in the first, or linked, quarter of 2011. Loans and total assets increased $31 million and $32 million, respectively, over the same period, representing the third consecutive quarter of loan growth and second consecutive quarter of asset growth.
The $1.3 million increase in second quarter 2011 net income compared to the linked quarter was primarily due to (on an after-tax basis):
· $1 million lower provision for loan losses from continued improvement in credit quality and portfolio mix; and
· $1 million higher noninterest income from a non-recurring insurance gain and higher fee income.
These were partially offset by $1 million higher noninterest expense.
Compared to the same quarter of 2010, net income decreased by $0.9 million as a $2 million after-tax reduction in noninterest expense was more than offset by (on an after-tax basis):
· $1 million reduction in noninterest income due to lower overdraft fees of $2 million as a result of regulatory changes which became effective in the third quarter of 2010, partially offset by the non-recurring insurance gain and higher fees for other products and services;
· $1 million reduction in net interest income principally due to the year-over-year runoff in the residential loan portfolio; and
· $1 million higher provision for loan losses (as the current quarter had no comparable significant reserve reversal as was realized in the second quarter of 2010).
Net interest margin was 4.07% in the second quarter of 2011, down from 4.16% in the linked quarter and 4.22% in the second quarter of 2010. The decline in net interest margin from the linked quarter was attributable primarily to lower deferred loan fees associated with lower loan prepayments, as well as lower yields on newly originated assets.
Provision for loan losses (pretax) was $2.6 million in the second quarter of 2011 compared to $1.0 million in the second quarter of 2010 and $4.6 million in the linked quarter. The provision in the second quarter 2010 was lower due to $2.4 million of loan loss reserves that were released attributable to two specific loans. The company continues to expect loan loss provision expense to be in the range of $15 to $20 million for the full year of 2011.
The second quarter 2011 net charge-off ratio remains low and declined further to 0.45%, from 0.49% reported in the linked quarter and from the 0.57% in the second quarter last year.
Noninterest expense (pretax) for the second quarter 2011 of $36.2 million was down from $39.6 million in the second quarter of 2010 and up $1.1 million compared to the linked quarter. This is in line with our annual noninterest expense target of $145 million for 2011.
The bank remains well-capitalized with a Tier 1 leverage ratio of 9.1% and total risk-based capital ratio of 13.3% as of the end of the second quarter of 2011.
HOLDING AND OTHER COMPANIES
The holding and other companies’ net losses were $5.1 million in the second quarter of 2011 compared to $4.5 million in the second quarter of 2010.
BOARD DECLARES QUARTERLY DIVIDEND
On August 2, 2011, the board of directors of HEI maintained the regular quarterly cash dividend of 31 cents per share, payable on September 13, 2011, to shareholders of record at the close of business on August 15, 2011 (ex-dividend date is August 11, 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 August 2, 2011 of $23.11, HEI’s yield is 5.4%.
WEBCAST AND TELECONFERENCE
Hawaiian Electric Industries, Inc. will conduct a webcast and teleconference call to review its second quarter 2011 earnings on Thursday, August 4, 2011, 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) 901-5241, passcode: 40101562 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 American Savings Bank, F.S.B.’s (ASB) press releases, SEC filings and public conference calls and webcasts. Investors may also wish to refer to the PUC website at dms.puc.hawaii.gov/dms in order to review documents filed with and issued by the PUC. The HEI and PUC websites, and the information included on those websites, are not incorporated into HEI and HECO filings with the SEC.
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 18, 2011, by dialing (888) 286-8010, passcode: 78587296.
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 iv and v of HEI’s Quarterly Report on Form 10-Q for the quarters ended March 31, 2011 and June 30, 2011 (when filed), 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.
###
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) |
| 2011 |
| 2010 |
| 2011 |
| 2010 |
| ||||
Revenues |
|
|
|
|
|
|
|
|
| ||||
Electric utility |
| $ | 728,738 |
| $ | 584,095 |
| $ | 1,374,073 |
| $ | 1,132,206 |
|
Bank |
| 66,318 |
| 71,632 |
| 131,631 |
| 142,546 |
| ||||
Other |
| (737 | ) | (63 | ) | (752 | ) | (48 | ) | ||||
|
| 794,319 |
| 655,664 |
| 1,504,952 |
| 1,274,704 |
| ||||
Expenses |
|
|
|
|
|
|
|
|
| ||||
Electric utility |
| 686,220 |
| 542,660 |
| 1,286,347 |
| 1,048,162 |
| ||||
Bank |
| 42,498 |
| 45,857 |
| 86,057 |
| 95,000 |
| ||||
Other |
| 1,940 |
| 3,516 |
| 5,512 |
| 7,204 |
| ||||
|
| 730,658 |
| 592,033 |
| 1,377,916 |
| 1,150,366 |
| ||||
Operating income (loss) |
|
|
|
|
|
|
|
|
| ||||
Electric utility |
| 42,518 |
| 41,435 |
| 87,726 |
| 84,044 |
| ||||
Bank |
| 23,820 |
| 25,775 |
| 45,574 |
| 47,546 |
| ||||
Other |
| (2,677 | ) | (3,579 | ) | (6,264 | ) | (7,252 | ) | ||||
|
| 63,661 |
| 63,631 |
| 127,036 |
| 124,338 |
| ||||
Interest expense–other than on deposit liabilities and other bank borrowings |
| (24,177 | ) | (20,520 | ) | (44,317 | ) | (40,901 | ) | ||||
Allowance for borrowed funds used during construction |
| 553 |
| 790 |
| 1,073 |
| 1,569 |
| ||||
Allowance for equity funds used during construction |
| 1,317 |
| 1,847 |
| 2,561 |
| 3,620 |
| ||||
Income before income taxes |
| 41,354 |
| 45,748 |
| 86,353 |
| 88,626 |
| ||||
Income taxes |
| 13,742 |
| 16,013 |
| 29,806 |
| 31,292 |
| ||||
Net income |
| 27,612 |
| 29,735 |
| 56,547 |
| 57,334 |
| ||||
Preferred stock dividends of subsidiaries |
| 473 |
| 473 |
| 946 |
| 946 |
| ||||
Net income for common stock |
| $ | 27,139 |
| $ | 29,262 |
| $ | 55,601 |
| $ | 56,388 |
|
Basic earnings per common share |
| $ | 0.28 |
| $ | 0.31 |
| $ | 0.58 |
| $ | 0.61 |
|
Diluted earnings per common share |
| $ | 0.28 |
| $ | 0.31 |
| $ | 0.58 |
| $ | 0.61 |
|
Dividends per common share |
| $ | 0.31 |
| $ | 0.31 |
| $ | 0.62 |
| $ | 0.62 |
|
Weighted-average number of common shares outstanding |
| 95,393 |
| 93,159 |
| 95,107 |
| 92,867 |
| ||||
Adjusted weighted-average shares |
| 95,555 |
| 93,414 |
| 95,394 |
| 93,159 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income (loss) by segment |
|
|
|
|
|
|
|
|
| ||||
Electric utility |
| $ | 17,024 |
| $ | 17,642 |
| $ | 36,213 |
| $ | 35,694 |
|
Bank |
| 15,195 |
| 16,131 |
| 29,046 |
| 29,867 |
| ||||
Other |
| (5,080 | ) | (4,511 | ) | (9,658 | ) | (9,173 | ) | ||||
Net income for common stock |
| $ | 27,139 |
| $ | 29,262 |
| $ | 55,601 |
| $ | 56,388 |
|
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 Reports on SEC Form 10-Q for the quarters ended March 31, 2011 and June 30, 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.
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
| June 30, |
| December 31, |
| ||
(dollars in thousands) |
| 2011 |
| 2010 |
| ||
Assets |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 266,746 |
| $ | 330,651 |
|
Accounts receivable and unbilled revenues, net |
| 319,533 |
| 266,996 |
| ||
Available-for-sale investment and mortgage-related securities |
| 711,347 |
| 678,152 |
| ||
Investment in stock of Federal Home Loan Bank of Seattle |
| 97,764 |
| 97,764 |
| ||
Loans receivable held for investment, net |
| 3,580,418 |
| 3,489,880 |
| ||
Loans held for sale, at lower of cost or fair value |
| 4,784 |
| 7,849 |
| ||
Property, plant and equipment, net of accumulated depreciation of $2,055,204 in 2011 and $2,037,598 in 2010 |
| 3,204,996 |
| 3,165,918 |
| ||
Regulatory assets |
| 478,766 |
| 478,330 |
| ||
Other |
| 494,527 |
| 487,614 |
| ||
Goodwill |
| 82,190 |
| 82,190 |
| ||
Total assets |
| $ | 9,241,071 |
| $ | 9,085,344 |
|
Liabilities and shareholders’ equity |
|
|
|
|
| ||
Liabilities |
|
|
|
|
| ||
Accounts payable |
| $ | 168,187 |
| $ | 202,446 |
|
Interest and dividends payable |
| 29,593 |
| 27,814 |
| ||
Deposit liabilities |
| 4,054,949 |
| 3,975,372 |
| ||
Short-term borrowings—other than bank |
| — |
| 24,923 |
| ||
Other bank borrowings |
| 239,122 |
| 237,319 |
| ||
Long-term debt, net—other than bank |
| 1,440,006 |
| 1,364,942 |
| ||
Deferred income taxes |
| 316,843 |
| 278,958 |
| ||
Regulatory liabilities |
| 309,809 |
| 296,797 |
| ||
Contributions in aid of construction |
| 339,489 |
| 335,364 |
| ||
Other |
| 796,573 |
| 823,479 |
| ||
Total liabilities |
| 7,694,571 |
| 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: 95,853,329 share in 2011 and 94,690,932 shares in 2010 |
| 1,343,537 |
| 1,314,199 |
| ||
Retained earnings |
| 178,513 |
| 181,910 |
| ||
Accumulated other comprehensive loss, net of tax benefits |
| (9,843 | ) | (12,472 | ) | ||
Total shareholders’ equity |
| 1,512,207 |
| 1,483,637 |
| ||
Total liabilities and shareholders’ equity |
| $ | 9,241,071 |
| $ | 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 Reports on SEC Form 10-Q for the quarters ended March 31, 2011 and June 30, 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.
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30, |
| 2011 |
| 2010 |
| ||
(in thousands) |
|
|
|
|
| ||
Cash flows from operating activities |
|
|
|
|
| ||
Net income |
| $ | 56,547 |
| $ | 57,334 |
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
| ||
Depreciation of property, plant and equipment |
| 75,243 |
| 79,606 |
| ||
Other amortization |
| 11,965 |
| 2,149 |
| ||
Provision for loan losses |
| 7,105 |
| 6,349 |
| ||
Loans receivable originated and purchased, held for sale |
| (64,028 | ) | (136,197 | ) | ||
Proceeds from sale of loans receivable, held for sale |
| 71,829 |
| 167,583 |
| ||
Changes in deferred income taxes |
| 39,051 |
| (2,381 | ) | ||
Changes in excess tax benefits from share-based payment arrangements |
| (55 | ) | 97 |
| ||
Allowance for equity funds used during construction |
| (2,561 | ) | (3,620 | ) | ||
Decrease in cash overdraft |
| (2,305 | ) | (302 | ) | ||
Changes in assets and liabilities |
|
|
|
|
| ||
Increase in accounts receivable and unbilled revenues, net |
| (52,537 | ) | (25,012 | ) | ||
Increase in fuel oil stock |
| (6,509 | ) | (49,759 | ) | ||
Increase (decrease) in accounts, interest and dividends payable |
| (41,989 | ) | 1,359 |
| ||
Changes in prepaid and accrued income taxes and utility revenue taxes |
| 8,333 |
| (30,699 | ) | ||
Changes in other assets and liabilities |
| (44,908 | ) | 11,732 |
| ||
Net cash provided by operating activities |
| 55,181 |
| 78,239 |
| ||
Cash flows from investing activities |
|
|
|
|
| ||
Available-for-sale investment and mortgage-related securities purchased |
| (193,119 | ) | (379,896 | ) | ||
Principal repayments on available-for-sale investment and mortgage-related securities |
| 161,526 |
| 203,783 |
| ||
Proceeds from sale of available-for-sale investment securities |
| 2,066 |
| — |
| ||
Net decrease (increase) in loans held for investment |
| (104,824 | ) | 61,017 |
| ||
Proceeds from sale of real estate acquired in settlement of loans |
| 3,977 |
| 2,118 |
| ||
Capital expenditures |
| (89,088 | ) | (76,659 | ) | ||
Contributions in aid of construction |
| 8,153 |
| 9,430 |
| ||
Other |
| (2,911 | ) | (10 | ) | ||
Net cash used in investing activities |
| (214,220 | ) | (180,217 | ) | ||
Cash flows from financing activities |
|
|
|
|
| ||
Net increase (decrease) in deposit liabilities |
| 79,577 |
| (57,226 | ) | ||
Net increase (decrease) in short-term borrowings with original maturities of three months or less |
| (24,923 | ) | 13,023 |
| ||
Net increase (decrease) in retail repurchase agreements |
| 1,803 |
| (41,112 | ) | ||
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 |
| 55 |
| (97 | ) | ||
Net proceeds from issuance of common stock |
| 12,071 |
| 10,789 |
| ||
Common stock dividends |
| (47,331 | ) | (46,246 | ) | ||
Preferred stock dividends of subsidiaries |
| (946 | ) | (946 | ) | ||
Other |
| (172 | ) | (1,805 | ) | ||
Net cash provided by (used in) financing activities |
| 95,134 |
| (123,620 | ) | ||
Net decrease in cash and cash equivalents |
| (63,905 | ) | (225,598 | ) | ||
Cash and cash equivalents, beginning of period |
| 330,651 |
| 503,922 |
| ||
Cash and cash equivalents, end of period |
| $ | 266,746 |
| $ | 278,324 |
|
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 Reports on SEC Form 10-Q for the quarters ended March 31, 2011 and June 30, 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.
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) |
| 2011 |
| 2010 |
| 2011 |
| 2010 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating revenues |
| $ | 727,652 |
| $ | 582,094 |
| $ | 1,371,953 |
| $ | 1,128,806 |
|
Operating expenses |
|
|
|
|
|
|
|
|
| ||||
Fuel oil |
| 312,141 |
| 215,322 |
| 573,001 |
| 427,074 |
| ||||
Purchased power |
| 171,737 |
| 139,513 |
| 319,695 |
| 256,295 |
| ||||
Other operation |
| 67,388 |
| 60,254 |
| 132,919 |
| 119,498 |
| ||||
Maintenance |
| 31,276 |
| 32,223 |
| 60,472 |
| 59,276 |
| ||||
Depreciation |
| 36,258 |
| 38,649 |
| 72,690 |
| 77,291 |
| ||||
Taxes, other than income taxes |
| 67,152 |
| 54,170 |
| 127,147 |
| 105,961 |
| ||||
Income taxes |
| 11,160 |
| 11,113 |
| 22,770 |
| 22,154 |
| ||||
|
| 697,112 |
| 551,244 |
| 1,308,694 |
| 1,067,549 |
| ||||
Operating income |
| 30,540 |
| 30,850 |
| 63,259 |
| 61,257 |
| ||||
Other income |
|
|
|
|
|
|
|
|
| ||||
Allowance for equity funds used during construction |
| 1,317 |
| 1,847 |
| 2,561 |
| 3,620 |
| ||||
Other, net |
| 898 |
| 372 |
| 1,808 |
| 1,613 |
| ||||
|
| 2,215 |
| 2,219 |
| 4,369 |
| 5,233 |
| ||||
Interest and other charges |
|
|
|
|
|
|
|
|
| ||||
Interest on long-term debt |
| 14,383 |
| 14,383 |
| 28,766 |
| 28,766 |
| ||||
Amortization of net bond premium and expense |
| 766 |
| 726 |
| 1,549 |
| 1,393 |
| ||||
Other interest charges |
| 636 |
| 609 |
| 1,175 |
| 1,208 |
| ||||
Allowance for borrowed funds used during construction |
| (553 | ) | (790 | ) | (1,073 | ) | (1,569 | ) | ||||
|
| 15,232 |
| 14,928 |
| 30,417 |
| 29,798 |
| ||||
Net income |
| 17,523 |
| 18,141 |
| 37,211 |
| 36,692 |
| ||||
Preferred stock dividends of subsidiaries |
| 229 |
| 229 |
| 458 |
| 458 |
| ||||
Net income attributable to HECO |
| 17,294 |
| 17,912 |
| 36,753 |
| 36,234 |
| ||||
Preferred stock dividends of HECO |
| 270 |
| 270 |
| 540 |
| 540 |
| ||||
Net income for common stock |
| $ | 17,024 |
| $ | 17,642 |
| $ | 36,213 |
| $ | 35,694 |
|
OTHER ELECTRIC UTILITY INFORMATION |
|
|
|
|
|
|
|
|
| ||||
Kilowatthour sales (millions) |
| 2,361 |
| 2,374 |
| 4,711 |
| 4,647 |
| ||||
Wet-bulb temperature (Oahu average; degrees Fahrenheit) |
| 70.5 |
| 67.9 |
| 68.8 |
| 66.8 |
| ||||
Cooling degree days (Oahu) |
| 1,257 |
| 1,210 |
| 2,177 |
| 2,067 |
| ||||
Average fuel oil cost per barrel |
| $ | 123.69 |
| $ | 86.38 |
| $ | 112.23 |
| $ | 84.13 |
|
Customer accounts (end of period) |
| 445,427 |
| 442,936 |
| 445,427 |
| 442,936 |
| ||||
|
| Twelve months ended |
| ||
Return on average common equity |
| June 30, 2011 |
| ||
(rate-making, simple average method) |
| Allowed %(1) |
| Actual % |
|
HECO |
| 10.00 |
| 4.73 |
|
HELCO |
| 10.50 |
| 8.99 |
|
MECO |
| 10.50 |
| 7.02 |
|
(1) Based on the decisions applicable to rates in effect on June 30, 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. On July 22, 2011, HECO received an interim decision and order in its 2011 test year rate case which granted HECO an allowed return of 10.00%.
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 Reports on SEC Form 10-Q for the quarters ended March 31, 2011 and June 30, 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.
Hawaiian Electric Company, Inc. (HECO) and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
| June 30, |
| December 31, |
| ||
(in thousands, except share data) |
| 2011 |
| 2010 |
| ||
Assets |
|
|
|
|
| ||
Utility plant, at cost |
|
|
|
|
| ||
Land |
| $ | 51,439 |
| $ | 51,364 |
|
Plant and equipment |
| 4,941,887 |
| 4,896,974 |
| ||
Less accumulated depreciation |
| (1,968,207 | ) | (1,941,059 | ) | ||
Construction in progress |
| 122,946 |
| 101,562 |
| ||
Net utility plant |
| 3,148,065 |
| 3,108,841 |
| ||
Current assets |
|
|
|
|
| ||
Cash and cash equivalents |
| 25,534 |
| 122,936 |
| ||
Customer accounts receivable, net |
| 174,434 |
| 138,171 |
| ||
Accrued unbilled revenues, net |
| 122,863 |
| 104,384 |
| ||
Other accounts receivable, net |
| 6,425 |
| 9,376 |
| ||
Fuel oil stock, at average cost |
| 159,214 |
| 152,705 |
| ||
Materials and supplies, at average cost |
| 38,207 |
| 36,717 |
| ||
Prepayments and other |
| 41,094 |
| 55,216 |
| ||
Regulatory assets |
| 9,982 |
| 7,349 |
| ||
Total current assets |
| 577,753 |
| 626,854 |
| ||
Other long-term assets |
|
|
|
|
| ||
Regulatory assets |
| 468,784 |
| 470,981 |
| ||
Unamortized debt expense |
| 13,145 |
| 14,030 |
| ||
Other |
| 71,375 |
| 64,974 |
| ||
Total other long-term assets |
| 553,304 |
| 549,985 |
| ||
Total assets |
| $ | 4,279,122 |
| $ | 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 |
| 855,790 |
| 854,856 |
| ||
Accumulated other comprehensive income, net of income taxes |
| 783 |
| 709 |
| ||
Common stock equity |
| 1,338,406 |
| 1,337,398 |
| ||
Cumulative preferred stock – not subject to mandatory redemption |
| 34,293 |
| 34,293 |
| ||
Long-term debt, net |
| 1,000,506 |
| 1,057,942 |
| ||
Total capitalization |
| 2,373,205 |
| 2,429,633 |
| ||
Current liabilities |
|
|
|
|
| ||
Current portion of long-term debt |
| 57,500 |
| — |
| ||
Accounts payable |
| 140,180 |
| 178,959 |
| ||
Interest and preferred dividends payable |
| 20,457 |
| 20,603 |
| ||
Taxes accrued |
| 173,811 |
| 175,960 |
| ||
Other |
| 57,820 |
| 56,354 |
| ||
Total current liabilities |
| 449,768 |
| 431,876 |
| ||
Deferred credits and other liabilities |
|
|
|
|
| ||
Deferred income taxes |
| 301,503 |
| 269,286 |
| ||
Regulatory liabilities |
| 309,809 |
| 296,797 |
| ||
Unamortized tax credits |
| 60,143 |
| 58,810 |
| ||
Retirement benefits liability |
| 335,874 |
| 355,844 |
| ||
Other |
| 109,331 |
| 108,070 |
| ||
Total deferred credits and other liabilities |
| 1,116,660 |
| 1,088,807 |
| ||
Contributions in aid of construction |
| 339,489 |
| 335,364 |
| ||
Total capitalization and liabilities |
| $ | 4,279,122 |
| $ | 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 Reports on SEC Form 10-Q for the quarters ended March 31, 2011 and June 30, 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.
Hawaiian Electric Company, Inc. (HECO) and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30, |
| 2011 |
| 2010 |
| ||
(in thousands) |
|
|
|
|
| ||
Cash flows from operating activities |
|
|
|
|
| ||
Net income |
| $ | 37,211 |
| $ | 36,692 |
|
Adjustments to reconcile net income to cash provided by operating activities |
|
|
|
|
| ||
Depreciation of property, plant and equipment |
| 72,690 |
| 77,291 |
| ||
Other amortization |
| 10,833 |
| 3,101 |
| ||
Changes in deferred income taxes |
| 33,456 |
| (4,522 | ) | ||
Changes in tax credits, net |
| 1,556 |
| 1,685 |
| ||
Allowance for equity funds used during construction |
| (2,561 | ) | (3,620 | ) | ||
Decrease in cash overdraft |
| (2,305 | ) | (302 | ) | ||
Changes in assets and liabilities |
|
|
|
|
| ||
Increase in accounts receivable |
| (33,312 | ) | (18,258 | ) | ||
Increase in accrued unbilled revenues |
| (18,479 | ) | (6,497 | ) | ||
Increase in fuel oil stock |
| (6,509 | ) | (49,759 | ) | ||
Increase in materials and supplies |
| (1,490 | ) | (872 | ) | ||
Increase in regulatory assets |
| (14,498 | ) | (2,252 | ) | ||
Decrease in accounts payable |
| (48,288 | ) | (1,186 | ) | ||
Changes in prepaid and accrued income taxes and utility revenue taxes |
| 12,178 |
| (31,864 | ) | ||
Changes in other assets and liabilities |
| (24,425 | ) | 14,669 |
| ||
Net cash provided by operating activities |
| 16,057 |
| 14,306 |
| ||
Cash flows from investing activities |
|
|
|
|
| ||
Capital expenditures |
| (85,395 | ) | (71,497 | ) | ||
Contributions in aid of construction |
| 8,153 |
| 9,430 |
| ||
Other |
| 77 |
| — |
| ||
Net cash used in investing activities |
| (77,165 | ) | (62,067 | ) | ||
Cash flows from financing activities |
|
|
|
|
| ||
Common stock dividends |
| (35,279 | ) | (26,887 | ) | ||
Preferred stock dividends of HECO and subsidiaries |
| (998 | ) | (998 | ) | ||
Net increase in short-term borrowings from nonaffiliates and affiliate with original maturities of three months or less |
| — |
| 14,100 |
| ||
Other |
| (17 | ) | (1,349 | ) | ||
Net cash used in financing activities |
| (36,294 | ) | (15,134 | ) | ||
Net decrease in cash and cash equivalents |
| (97,402 | ) | (62,895 | ) | ||
Cash and cash equivalents, beginning of period |
| 122,936 |
| 73,578 |
| ||
Cash and cash equivalents, end of period |
| $ | 25,534 |
| $ | 10,683 |
|
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 Reports on SEC Form 10-Q for the quarters ended March 31, 2011 and June 30, 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.
American Savings Bank, F.S.B. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME DATA
(Unaudited)
|
| Three months ended |
| Six months ended |
| |||||||||||
|
| June 30, |
| March 31, |
| June 30, |
| June 30, |
| |||||||
(in thousands) |
| 2011 |
| 2011 |
| 2010 |
| 2011 |
| 2010 |
| |||||
Interest and dividend income |
|
|
|
|
|
|
|
|
|
|
| |||||
Interest and fees on loans |
| $ | 45,648 |
| $ | 46,097 |
| $ | 49,328 |
| $ | 91,745 |
| $ | 99,073 |
|
Interest and dividends on investment and mortgage-related securities |
| 3,793 |
| 3,769 |
| 3,646 |
| 7,562 |
| 6,963 |
| |||||
Total interest and dividend income |
| 49,441 |
| 49,866 |
| 52,974 |
| 99,307 |
| 106,036 |
| |||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
| |||||
Interest on deposit liabilities |
| 2,387 |
| 2,593 |
| 3,852 |
| 4,980 |
| 8,275 |
| |||||
Interest on other borrowings |
| 1,382 |
| 1,367 |
| 1,418 |
| 2,749 |
| 2,844 |
| |||||
Total interest expense |
| 3,769 |
| 3,960 |
| 5,270 |
| 7,729 |
| 11,119 |
| |||||
Net interest income |
| 45,672 |
| 45,906 |
| 47,704 |
| 91,578 |
| 94,917 |
| |||||
Provision for loan losses |
| 2,555 |
| 4,550 |
| 990 |
| 7,105 |
| 6,349 |
| |||||
Net interest income after provision for loan losses |
| 43,117 |
| 41,356 |
| 46,714 |
| 84,473 |
| 88,568 |
| |||||
Noninterest income |
|
|
|
|
|
|
|
|
|
|
| |||||
Fees from other financial services |
| 7,240 |
| 6,946 |
| 6,649 |
| 14,186 |
| 13,063 |
| |||||
Fee income on deposit liabilities |
| 4,599 |
| 4,449 |
| 7,891 |
| 9,048 |
| 15,411 |
| |||||
Fee income on other financial products |
| 1,861 |
| 1,673 |
| 1,735 |
| 3,534 |
| 3,260 |
| |||||
Other income |
| 3,177 |
| 2,379 |
| 2,383 |
| 5,556 |
| 4,776 |
| |||||
Total noninterest income |
| 16,877 |
| 15,447 |
| 18,658 |
| 32,324 |
| 36,510 |
| |||||
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
| |||||
Compensation and employee benefits |
| 18,166 |
| 17,505 |
| 18,907 |
| 35,671 |
| 36,309 |
| |||||
Occupancy |
| 4,288 |
| 4,240 |
| 4,216 |
| 8,528 |
| 8,441 |
| |||||
Data processing |
| 2,058 |
| 1,970 |
| 4,564 |
| 4,028 |
| 8,902 |
| |||||
Services |
| 1,949 |
| 1,771 |
| 1,845 |
| 3,720 |
| 3,573 |
| |||||
Equipment |
| 1,772 |
| 1,657 |
| 1,640 |
| 3,429 |
| 3,349 |
| |||||
Other expense |
| 7,955 |
| 7,933 |
| 8,453 |
| 15,888 |
| 17,021 |
| |||||
Total noninterest expense |
| 36,188 |
| 35,076 |
| 39,625 |
| 71,264 |
| 77,595 |
| |||||
Income before income taxes |
| 23,806 |
| 21,727 |
| 25,747 |
| 45,533 |
| 47,483 |
| |||||
Income taxes |
| 8,611 |
| 7,876 |
| 9,616 |
| 16,487 |
| 17,616 |
| |||||
Net income |
| $ | 15,195 |
| $ | 13,851 |
| $ | 16,131 |
| $ | 29,046 |
| $ | 29,867 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
OTHER BANK INFORMATION (%) |
|
|
|
|
|
|
|
|
|
|
| |||||
Return on average assets |
| 1.24 |
| 1.15 |
| 1.32 |
| 1.20 |
| 1.22 |
| |||||
Return on average equity |
| 12.19 |
| 11.20 |
| 12.80 |
| 11.70 |
| 11.91 |
| |||||
Net interest margin |
| 4.07 |
| 4.16 |
| 4.22 |
| 4.11 |
| 4.20 |
| |||||
Net charge-offs to average loans outstanding (annualized) |
| 0.45 |
| 0.49 |
| 0.57 |
| 0.47 |
| 0.60 |
| |||||
Efficiency ratio |
| 57 |
| 57 |
| 59 |
| 57 |
| 59 |
| |||||
As of period end |
|
|
|
|
|
|
|
|
|
|
| |||||
Nonperforming assets to loans outstanding and real estate owned ** |
| 1.69 |
| 1.82 |
| 1.90 |
|
|
|
|
| |||||
Allowance for loan losses to loans outstanding |
| 1.09 |
| 1.14 |
| 1.03 |
|
|
|
|
| |||||
Tier-1 leverage ratio |
| 9.1 |
| 9.1 |
| 9.3 |
|
|
|
|
| |||||
Total risk-based capital ratio |
| 13.3 |
| 13.5 |
| 14.1 |
|
|
|
|
| |||||
Tangible common equity to total assets |
| 8.5 |
| 8.4 |
| 8.7 |
|
|
|
|
| |||||
** 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 Reports on SEC Form 10-Q for the quarters ended March 31, 2011 and June 30, 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.
American Savings Bank, F.S.B. and Subsidiaries
CONSOLIDATED BALANCE SHEETS DATA
(Unaudited)
|
| June 30, |
| December 31, |
| ||
(in thousands) |
| 2011 |
| 2010 |
| ||
|
|
|
|
|
| ||
Assets |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 178,251 |
| $ | 204,397 |
|
Federal funds sold |
| 1,249 |
| 1,721 |
| ||
Available-for-sale investment and mortgage-related securities |
| 711,347 |
| 678,152 |
| ||
Investment in stock of Federal Home Loan Bank of Seattle |
| 97,764 |
| 97,764 |
| ||
Loans receivable held for investment, net |
| 3,580,418 |
| 3,489,880 |
| ||
Loans held for sale, lower of cost or fair value |
| 4,784 |
| 7,849 |
| ||
Other |
| 234,524 |
| 234,806 |
| ||
Goodwill |
| 82,190 |
| 82,190 |
| ||
Total assets |
| $ | 4,890,527 |
| $ | 4,796,759 |
|
|
|
|
|
|
| ||
Liabilities and shareholder’s equity |
|
|
|
|
| ||
Deposit liabilities–noninterest-bearing |
| $ | 912,034 |
| $ | 865,642 |
|
Deposit liabilities–interest-bearing |
| 3,142,915 |
| 3,109,730 |
| ||
Other borrowings |
| 239,122 |
| 237,319 |
| ||
Other |
| 99,260 |
| 90,683 |
| ||
Total liabilities |
| 4,393,331 |
| 4,303,374 |
| ||
|
|
|
|
|
| ||
Common stock |
| 331,348 |
| 330,562 |
| ||
Retained earnings |
| 170,157 |
| 169,111 |
| ||
Accumulated other comprehensive loss, net of tax benefits |
| (4,309 | ) | (6,288 | ) | ||
Total shareholder’s equity |
| 497,196 |
| 493,385 |
| ||
Total liabilities and shareholder’s equity |
| $ | 4,890,527 |
| $ | 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 Reports on SEC Form 10-Q for the quarters ended March 31, 2011 and June 30, 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.