Exhibit 99
May 8, 2013
Contact: | Shelee M.T. Kimura |
|
| Manager, Investor Relations & | Telephone: (808) 543-7384 |
| Strategic Planning | E-mail: skimura@hei.com |
|
|
|
HAWAIIAN ELECTRIC INDUSTRIES REPORTS FIRST QUARTER 2013 EARNINGS
& DECLARES DIVIDEND
Earnings Per Share of $0.34
Hawaiian Electric Company Invests Over $60 Million in Local Infrastructure
American Savings Bank Continues to Deliver Solid Results
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 first quarter of 2013 of $33.7 million, or $0.34 diluted earnings per share (EPS), compared to $38.3 million, or $0.40 diluted EPS for the first quarter of 2012.
“We’re off to a solid start in 2013 with financial results consistent with our expectations and significant progress on our strategies across our companies. We successfully completed a $180 million common stock offering which allows us to fund the largest capital plan in our utilities’ history over the next two years, benefitting customers with a stronger and more modern electric grid and lower-cost renewable energy. In the first quarter, our utilities invested over $60 million – about 2.5x their earnings – in local infrastructure. American Savings Bank delivered strong loan growth to help offset the impact of the low interest rate environment and gained market share in its mortgage banking business, becoming one of the top ranking lenders in the state for the quarter,” said Constance H. Lau, HEI president and chief executive officer.
“Our companies are committed to reducing Hawaii’s dependence on oil and are constantly seeking ways to increase our use of lower-cost renewable energy. In 2012, we reached a record 13.9% of energy needs from renewable generation and are on track to exceed the next clean energy goal of 15% in 2015,” added Lau. Since the end of 2010, over 80% or close to $50 of the $60 increase in the typical Oahu customer’s bill is due to higher oil prices.
Hawaiian Electric Industries, Inc. News Release
May 8, 2013
HAWAIIAN ELECTRIC COMPANY CONTINUES TO INVEST IN CLEAN ENERGY AND RELIABILITY
Hawaiian Electric Company’s1 net income for the first quarter of 2013 was $24.4 million compared to $27.3 million in the first quarter of 2012.
Overall, the primary variances impacting net income for the quarter were (on an after-tax basis):
· $5 million higher operations and maintenance (O&M) expenses2; and
· $1 million higher depreciation expense.
These were partially offset by (after-tax):
· $2 million recovery of additional costs for reliability and clean energy investments, net of lower heat rate earnings.
Operations and maintenance (O&M) expenses2 (after-tax) were $5 million higher for the first quarter of 2013 compared to the first quarter of the prior year largely due to timing. In 2012, the rate of O&M expense in the first quarter was lower than the rest of the year, whereas, in 2013, management expects O&M to be more evenly distributed throughout the year. In the quarter, O&M reflects higher customer service expenses as such costs received deferral treatment in most of the first half of 2012. Management continues to expect 2013 O&M expenses to be flat to up 1% compared to 2012 as work continues to moderate O&M spending in targeted areas.
AMERICAN SAVINGS BANK CONTINUES TO DELIVER SOLID PERFORMANCE
American Savings Bank’s (American) net income for the first quarter of 2013 was $14.2 million compared with $14.4 million in the fourth, or linked, quarter of 2012 and $15.9 million in the first quarter of 2012, which included $1 million for a one-time release of tax-related reserves. First quarter 2013 net income was consistent with the linked quarter. Net interest income was flat as the 6.9% annualized loan growth this quarter helped offset lower financing margins. Noninterest income was lower, largely due to lower gains on sales of residential mortgage loans, but offset by lower provision for loan losses and lower noninterest expense.
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 expenses covered by surcharges or by third parties. In the first quarter of 2013 and 2012, these expenses were $2 million and $1 million, respectively.
Hawaiian Electric Industries, Inc. News Release
May 8, 2013
Compared to the first quarter of 2012, net income declined by $1.7 million including the effect of the $1 million release of tax reserves mentioned previously. The remaining $0.7 million decline was largely driven by higher noninterest expense, primarily attributable to targeted staffing increases to support increased business volumes and information technology and risk management capabilities, and lower net interest income due to declining asset yields. These were partially offset by the favorable effect of loan growth, higher noninterest income from higher gains on sales of new residential mortgages originated in the quarter and lower provision for loan losses, as the credit quality of the bank’s loan portfolio improved along with the improvement in Hawaii’s economy.
Overall, American achieved solid profitability in the first quarter 2013 with a return on average equity of 11.3% and a return on average assets of 1.12%.
Also refer to the American news release issued on April 30, 2013.
Holding and Other Companies
The holding and other companies’ net losses were $4.9 million in the first quarter of 2013, consistent with the first quarter of 2012.
BOARD DECLARES QUARTERLY DIVIDEND
On May 7, 2013, the board of directors maintained HEI’s quarterly cash dividend of 31 cents per share, payable on June 12, 2013, to shareholders of record at the close of business on May 22, 2013 (ex-dividend date is May 20, 2013). 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 7, 2013 of $28.10, HEI’s yield is 4.4%.
WEBCAST AND CONFERENCE CALL
Hawaiian Electric Industries, Inc. will conduct a webcast and conference call to review its first quarter 2013 earnings on Wednesday, May 8, 2013, 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 (800) 706-7741, passcode: 55241897 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 material information, as
Hawaiian Electric Industries, Inc. News Release
May 8, 2013
well as other important 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, HEI’s and HECO’s Securities and Exchange Commission (SEC) filings and HEI’s public conference calls and webcasts. Also, at the Investor Relations section of HEI’s website, investors may sign up to receive e-mail alerts (based on each investor’s selected preferences). 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 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 May 22, 2013, by dialing (888) 286-8010, passcode: 75540244.
HEI supplies power to approximately 450,000 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.
Hawaiian Electric Industries, Inc. News Release
May 8, 2013
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 Annual Report on Form 10-K for the year ended December 31, 2012 and HEI’s subsequent periodic reports that discuss important factors that could cause HEI’s results to differ materially from those anticipated in such statements. These 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 ended March 31 |
| 2013 |
| 2012 |
| ||
(in thousands, except per share amounts) |
|
|
|
|
| ||
Revenues |
|
|
|
|
| ||
Electric utility |
| $ | 719,273 |
| $ | 749,610 |
|
Bank |
| 64,756 |
| 65,252 |
| ||
Other |
| 35 |
| (2 | ) | ||
Total revenues |
| 784,064 |
| 814,860 |
| ||
Expenses |
|
|
|
|
| ||
Electric utility |
| 666,320 |
| 692,356 |
| ||
Bank |
| 43,005 |
| 42,340 |
| ||
Other |
| 4,082 |
| 4,348 |
| ||
Total expenses |
| 713,407 |
| 739,044 |
| ||
Operating income (loss) |
|
|
|
|
| ||
Electric utility |
| 52,953 |
| 57,254 |
| ||
Bank |
| 21,751 |
| 22,912 |
| ||
Other |
| (4,047 | ) | (4,350 | ) | ||
Total operating income |
| 70,657 |
| 75,816 |
| ||
Interest expense–other than on deposit liabilities and other bank borrowings |
| (19,788 | ) | (18,539 | ) | ||
Allowance for borrowed funds used during construction |
| 730 |
| 870 |
| ||
Allowance for equity funds used during construction |
| 1,215 |
| 1,940 |
| ||
Income before income taxes |
| 52,814 |
| 60,087 |
| ||
Income taxes |
| 18,662 |
| 21,298 |
| ||
Net income |
| 34,152 |
| 38,789 |
| ||
Preferred stock dividends of subsidiaries |
| 473 |
| 473 |
| ||
Net income for common stock |
| $ | 33,679 |
| $ | 38,316 |
|
Basic earnings per common share |
| $ | 0.34 |
| $ | 0.40 |
|
Diluted earnings per common share |
| $ | 0.34 |
| $ | 0.40 |
|
Dividends per common share |
| $ | 0.31 |
| $ | 0.31 |
|
Weighted-average number of common shares outstanding |
| 98,135 |
| 96,167 |
| ||
Adjusted weighted-average shares |
| 98,540 |
| 96,561 |
| ||
Net income (loss) for common stock by segment |
|
|
|
|
| ||
Electric utility |
| $ | 24,429 |
| $ | 27,300 |
|
Bank |
| 14,155 |
| 15,877 |
| ||
Other |
| (4,905 | ) | (4,861 | ) | ||
Net income for common stock |
| $ | 33,679 |
| $ | 38,316 |
|
Comprehensive income attributable to Hawaiian Electric Industries, Inc. |
| $ | 33,618 |
| $ | 38,627 |
|
Return on average common equity (twelve months ended) 1 |
| 8.5% |
| 9.7% |
| ||
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, 2012 and HEI’s Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2013 (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.
1 On a core basis (non-GAAP), 2013 and 2012 return on average common equity (twelve months ended March 31) were 10.0% and 10.1%, respectively. See reconciliation of GAAP to non-GAAP measures.
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
| March 31, |
| December 31, |
| ||
(dollars in thousands) |
| 2013 |
| 2012 |
| ||
|
|
|
|
|
| ||
Assets |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 262,708 |
| $ | 219,662 |
|
Accounts receivable and unbilled revenues, net |
| 348,487 |
| 362,823 |
| ||
Available-for-sale investment and mortgage-related securities |
| 659,400 |
| 671,358 |
| ||
Investment in stock of Federal Home Loan Bank of Seattle |
| 95,152 |
| 96,022 |
| ||
Loans receivable held for investment, net |
| 3,803,002 |
| 3,737,233 |
| ||
Loans held for sale, at lower of cost or fair value |
| 5,351 |
| 26,005 |
| ||
Property, plant and equipment, net of accumulated depreciation of $2,142,040 in 2013 and $2,125,286 in 2012 |
| 3,640,308 |
| 3,594,829 |
| ||
Regulatory assets |
| 874,151 |
| 864,596 |
| ||
Other |
| 527,820 |
| 494,414 |
| ||
Goodwill |
| 82,190 |
| 82,190 |
| ||
Total assets |
| $ | 10,298,569 |
| $ | 10,149,132 |
|
Liabilities and shareholders’ equity |
|
|
|
|
| ||
Liabilities |
|
|
|
|
| ||
Accounts payable |
| $ | 253,096 |
| $ | 212,379 |
|
Interest and dividends payable |
| 26,358 |
| 26,258 |
| ||
Deposit liabilities |
| 4,312,620 |
| 4,229,916 |
| ||
Short-term borrowings–other than bank |
| 133,937 |
| 83,693 |
| ||
Other bank borrowings |
| 193,233 |
| 195,926 |
| ||
Long-term debt, net–other than bank |
| 1,422,875 |
| 1,422,872 |
| ||
Deferred income taxes |
| 459,249 |
| 439,329 |
| ||
Regulatory liabilities |
| 325,527 |
| 322,074 |
| ||
Contributions in aid of construction |
| 415,795 |
| 405,520 |
| ||
Retirement benefits liability |
| 643,104 |
| 656,394 |
| ||
Other |
| 471,217 |
| 526,613 |
| ||
Total liabilities |
| 8,657,011 |
| 8,520,974 |
| ||
|
|
|
|
|
| ||
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: 98,471,405 shares in 2013 and 97,928,403 shares in 2012 |
| 1,413,700 |
| 1,403,484 |
| ||
Retained earnings |
| 220,049 |
| 216,804 |
| ||
Accumulated other comprehensive loss, net of tax benefits |
| (26,484 | ) | (26,423 | ) | ||
Total shareholders’ equity |
| 1,607,265 |
| 1,593,865 |
| ||
Total liabilities and shareholders’ equity |
| $ | 10,298,569 |
| $ | 10,149,132 |
|
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, 2012 and HEI’s Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2013 (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.
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March 31 |
| 2013 |
| 2012 |
| ||
(in thousands) |
|
|
|
|
| ||
Cash flows from operating activities |
|
|
|
|
| ||
Net income |
| $ | 34,152 |
| $ | 38,789 |
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities |
|
|
|
|
| ||
Depreciation of property, plant and equipment |
| 39,726 |
| 37,911 |
| ||
Other amortization |
| 935 |
| 1,419 |
| ||
Provision for loan losses |
| 1,858 |
| 3,546 |
| ||
Loans receivable originated and purchased, held for sale |
| (79,224 | ) | (89,087 | ) | ||
Proceeds from sale of loans receivable, held for sale |
| 102,254 |
| 85,252 |
| ||
Change in deferred income taxes |
| 19,967 |
| 21,260 |
| ||
Change in excess tax benefits from share-based payment arrangements |
| (414 | ) | (44 | ) | ||
Allowance for equity funds used during construction |
| (1,215 | ) | (1,940 | ) | ||
Changes in assets and liabilities |
|
|
|
|
| ||
Decrease in accounts receivable and unbilled revenues, net |
| 14,335 |
| 37,562 |
| ||
Increase in fuel oil stock |
| (29,272 | ) | (14,458 | ) | ||
Increase in regulatory assets |
| (17,746 | ) | (13,948 | ) | ||
Increase (decrease) in accounts, interest and dividends payable |
| 38,148 |
| (36,991 | ) | ||
Change in prepaid and accrued income taxes and utility revenue taxes |
| (50,933 | ) | (41,126 | ) | ||
Contributions to defined benefit pension and other postretirement benefit plans |
| (21,476 | ) | (26,815 | ) | ||
Change in other assets and liabilities |
| (2,776 | ) | (17,046 | ) | ||
Net cash provided by (used in) operating activities |
| 48,319 |
| (15,716 | ) | ||
Cash flows from investing activities |
|
|
|
|
| ||
Available-for-sale investment and mortgage-related securities purchased |
| (26,705 | ) | (53,931 | ) | ||
Principal repayments on available-for-sale investment and mortgage-related securities |
| 36,504 |
| 46,355 |
| ||
Net increase in loans held for investment |
| (66,934 | ) | (34,212 | ) | ||
Proceeds from sale of real estate acquired in settlement of loans |
| 3,046 |
| 3,371 |
| ||
Capital expenditures |
| (71,041 | ) | (65,300 | ) | ||
Contributions in aid of construction |
| 11,710 |
| 22,855 |
| ||
Other |
| 869 |
| - |
| ||
Net cash used in investing activities |
| (112,551 | ) | (80,862 | ) | ||
Cash flows from financing activities |
|
|
|
|
| ||
Net increase in deposit liabilities |
| 82,704 |
| 55,172 |
| ||
Net increase in short-term borrowings with original maturities of three months or less |
| 50,244 |
| 87,467 |
| ||
Net decrease in retail repurchase agreements |
| (2,680 | ) | (379 | ) | ||
Proceeds from issuance of long-term debt |
| 50,000 |
| - |
| ||
Repayment of long-term debt |
| (50,000 | ) | (57,500 | ) | ||
Change in excess tax benefits from share-based payment arrangements |
| 414 |
| 44 |
| ||
Net proceeds from issuance of common stock |
| 4,703 |
| 5,940 |
| ||
Common stock dividends |
| (24,394 | ) | (23,855 | ) | ||
Preferred stock dividends of subsidiaries |
| (473 | ) | (473 | ) | ||
Other |
| (3,240 | ) | (3,757 | ) | ||
Net cash provided by financing activities |
| 107,278 |
| 62,659 |
| ||
Net increase (decrease) in cash and cash equivalents |
| 43,046 |
| (33,919 | ) | ||
Cash and cash equivalents, beginning of period |
| 219,662 |
| 270,265 |
| ||
Cash and cash equivalents, end of period |
| $ | 262,708 |
| $ | 236,346 |
|
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, 2012 and HEI’s Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2013 (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.
Hawaiian Electric Company, Inc. (HECO) and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended March 31 |
| 2013 |
| 2012 |
| ||
(dollars in thousands, except per barrel amounts) |
|
|
|
|
| ||
Operating revenues |
| $ | 716,197 |
| $ | 747,938 |
|
Operating expenses |
|
|
|
|
| ||
Fuel oil |
| 305,100 |
| 327,839 |
| ||
Purchased power |
| 153,364 |
| 164,789 |
| ||
Other operation |
| 71,423 |
| 61,849 |
| ||
Maintenance |
| 29,702 |
| 30,038 |
| ||
Depreciation |
| 38,280 |
| 36,482 |
| ||
Taxes, other than income taxes |
| 67,687 |
| 70,995 |
| ||
Income taxes |
| 14,095 |
| 17,365 |
| ||
Total operating expenses |
| 679,651 |
| 709,357 |
| ||
Operating income |
| 36,546 |
| 38,581 |
| ||
Other income |
|
|
|
|
| ||
Allowance for equity funds used during construction |
| 1,215 |
| 1,940 |
| ||
Other, net |
| 2,312 |
| 1,309 |
| ||
Income tax expense |
| (299 | ) | (44 | ) | ||
Total other income |
| 3,228 |
| 3,205 |
| ||
Interest and other charges |
|
|
|
|
| ||
Interest on long-term debt |
| 14,614 |
| 14,383 |
| ||
Amortization of net bond premium and expense |
| 647 |
| 745 |
| ||
Other interest charges (credits) |
| 315 |
| (271 | ) | ||
Allowance for borrowed funds used during construction |
| (730 | ) | (870 | ) | ||
Total interest and other charges |
| 14,846 |
| 13,987 |
| ||
Net income |
| 24,928 |
| 27,799 |
| ||
Preferred stock dividends of subsidiaries |
| 229 |
| 229 |
| ||
Net income attributable to HECO |
| 24,699 |
| 27,570 |
| ||
Preferred stock dividends of HECO |
| 270 |
| 270 |
| ||
Net income for common stock |
| $ | 24,429 |
| $ | 27,300 |
|
Comprehensive income attributable to HECO |
| $ | 24,447 |
| $ | 27,377 |
|
OTHER ELECTRIC UTILITY INFORMATION |
|
|
|
|
| ||
Kilowatthour sales (millions) |
|
|
|
|
| ||
HECO |
| 1,591 |
| 1,696 |
| ||
HELCO |
| 263 |
| 271 |
| ||
MECO |
| 269 |
| 284 |
| ||
|
| 2,123 |
| 2,251 |
| ||
Wet-bulb temperature (Oahu average; degrees Fahrenheit) |
| 66.0 |
| 67.2 |
| ||
Cooling degree days (Oahu) |
| 789 |
| 861 |
| ||
Average fuel oil cost per barrel |
| $130.83 |
| $134.37 |
| ||
|
| Twelve months ended |
| ||
|
| March 31 |
| ||
Return on average common equity (%) (simple average) 1 |
| 2013 |
| 2012 |
|
HECO |
| 6.97 |
| 7.71 |
|
HELCO |
| 5.07 |
| 9.58 |
|
MECO |
| 7.41 |
| 6.42 |
|
HECO Consolidated |
| 6.68 |
| 7.87 |
|
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, 2012 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, 2013 (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.
1 On a core basis (non-GAAP), the 2013 and 2012 return on average common equity (twelve months ended March 31) were 8.9% and 8.4%, respectively for HECO; 6.3% and 9.6%, respectively for HELCO; 8.8% and 6.4%, respectively for MECO and 8.4% and 8.3% respectively, for HECO Consolidated. See reconciliation of GAAP to non-GAAP measures.
Hawaiian Electric Company, Inc. (HECO) and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
| March 31, |
| December 31, |
| ||
(dollars in thousands, except par value) |
| 2013 |
| 2012 |
| ||
Assets |
|
|
|
|
| ||
Utility plant, at cost |
|
|
|
|
| ||
Land |
| $ | 51,598 |
| $ | 51,568 |
|
Plant and equipment |
| 5,427,933 |
| 5,364,400 |
| ||
Less accumulated depreciation |
| (2,062,810 | ) | (2,040,789 | ) | ||
Construction in progress |
| 153,669 |
| 151,378 |
| ||
Net utility plant |
| 3,570,390 |
| 3,526,557 |
| ||
Current assets |
|
|
|
|
| ||
Cash and cash equivalents |
| 36,940 |
| 17,159 |
| ||
Customer accounts receivable, net |
| 194,457 |
| 210,779 |
| ||
Accrued unbilled revenues, net |
| 135,615 |
| 134,298 |
| ||
Other accounts receivable, net |
| 5,795 |
| 28,176 |
| ||
Fuel oil stock, at average cost |
| 190,691 |
| 161,419 |
| ||
Materials and supplies, at average cost |
| 54,430 |
| 51,085 |
| ||
Prepayments and other |
| 32,255 |
| 32,865 |
| ||
Regulatory assets |
| 61,804 |
| 51,267 |
| ||
Total current assets |
| 711,987 |
| 687,048 |
| ||
Other long-term assets |
|
|
|
|
| ||
Regulatory assets |
| 812,347 |
| 813,329 |
| ||
Unamortized debt expense |
| 10,245 |
| 10,554 |
| ||
Other |
| 69,266 |
| 71,305 |
| ||
Total other long-term assets |
| 891,858 |
| 895,188 |
| ||
Total assets |
| $ | 5,174,235 |
| $ | 5,108,793 |
|
Capitalization and liabilities |
|
|
|
|
| ||
Capitalization |
|
|
|
|
| ||
Common stock, $6 2/3 par value, authorized 50,000,000 shares; outstanding 14,665,264 in 2013 and 2012 |
| $ | 97,788 |
| $ | 97,788 |
|
Premium on capital stock |
| 468,045 |
| 468,045 |
| ||
Retained earnings |
| 911,632 |
| 907,273 |
| ||
Accumulated other comprehensive loss, net of tax benefits |
| (952 | ) | (970 | ) | ||
Common stock equity |
| 1,476,513 |
| 1,472,136 |
| ||
Cumulative preferred stock – not subject to mandatory redemption |
| 34,293 |
| 34,293 |
| ||
Long-term debt, net |
| 1,147,875 |
| 1,147,872 |
| ||
Total capitalization |
| 2,658,681 |
| 2,654,301 |
| ||
Current liabilities |
|
|
|
|
| ||
Short-term borrowings from nonaffiliates |
| 43,052 |
| - |
| ||
Accounts payable |
| 228,426 |
| 186,824 |
| ||
Interest and preferred dividends payable |
| 21,693 |
| 21,092 |
| ||
Taxes accrued |
| 199,350 |
| 251,066 |
| ||
Other |
| 67,930 |
| 62,879 |
| ||
Total current liabilities |
| 560,451 |
| 521,861 |
| ||
Deferred credits and other liabilities |
|
|
|
|
| ||
Deferred income taxes |
| 435,598 |
| 417,611 |
| ||
Regulatory liabilities |
| 325,527 |
| 322,074 |
| ||
Unamortized tax credits |
| 67,939 |
| 66,584 |
| ||
Retirement benefits liability |
| 611,678 |
| 620,205 |
| ||
Other |
| 98,566 |
| 100,637 |
| ||
Total deferred credits and other liabilities |
| 1,539,308 |
| 1,527,111 |
| ||
Contributions in aid of construction |
| 415,795 |
| 405,520 |
| ||
Total capitalization and liabilities |
| $ | 5,174,235 |
| $ | 5,108,793 |
|
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, 2012 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, 2013 (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.
Hawaiian Electric Company, Inc. (HECO) and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March 31 |
| 2013 |
| 2012 |
| ||
(in thousands) |
|
|
|
|
| ||
Cash flows from operating activities |
|
|
|
|
| ||
Net income |
| $ | 24,928 |
| $ | 27,799 |
|
Adjustments to reconcile net income to net cash provided by (used in) operating |
|
|
|
|
| ||
Depreciation of property, plant and equipment |
| 38,280 |
| 36,482 |
| ||
Other amortization |
| 957 |
| 1,561 |
| ||
Change in deferred income taxes |
| 17,975 |
| 20,061 |
| ||
Change in tax credits, net |
| 1,382 |
| 1,356 |
| ||
Allowance for equity funds used during construction |
| (1,215 | ) | (1,940 | ) | ||
Changes in assets and liabilities |
|
|
|
|
| ||
Decrease in accounts receivable |
| 38,703 |
| 25,001 |
| ||
Decrease (increase) in accrued unbilled revenues |
| (1,317 | ) | 11,184 |
| ||
Increase in fuel oil stock |
| (29,272 | ) | (14,458 | ) | ||
Increase in materials and supplies |
| (3,345 | ) | (3,561 | ) | ||
Increase in regulatory assets |
| (17,746 | ) | (13,948 | ) | ||
Increase (decrease) in accounts payable |
| 38,934 |
| (33,174 | ) | ||
Change in prepaid and accrued income taxes and utility revenue taxes |
| (53,666 | ) | (44,561 | ) | ||
Contributions to defined benefit pension and other postretirement benefit plans |
| (21,010 | ) | (26,183 | ) | ||
Change in other assets and liabilities |
| 19,913 |
| 3,444 |
| ||
Net cash provided by (used in) operating activities |
| 53,501 |
| (10,937 | ) | ||
Cash flows from investing activities |
|
|
|
|
| ||
Capital expenditures |
| (67,915 | ) | (63,436 | ) | ||
Contributions in aid of construction |
| 11,710 |
| 22,855 |
| ||
Net cash used in investing activities |
| (56,205 | ) | (40,581 | ) | ||
Cash flows from financing activities |
|
|
|
|
| ||
Common stock dividends |
| (20,070 | ) | (18,261 | ) | ||
Preferred stock dividends of HECO and subsidiaries |
| (499 | ) | (499 | ) | ||
Repayment of long-term debt |
| - |
| (57,500 | ) | ||
Net increase in short-term borrowings from nonaffiliates and affiliate with original maturities of three months or less |
| 43,052 |
| 84,942 |
| ||
Other |
| 2 |
| (120 | ) | ||
Net cash provided by financing activities |
| 22,485 |
| 8,562 |
| ||
Net increase (decrease) in cash and cash equivalents |
| 19,781 |
| (42,956 | ) | ||
Cash and cash equivalents, beginning of period |
| 17,159 |
| 48,806 |
| ||
Cash and cash equivalents, end of period |
| $ | 36,940 |
| $ | 5,850 |
|
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, 2012 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, 2013 (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.
American Savings Bank, F.S.B.
STATEMENTS OF INCOME DATA
(Unaudited)
|
| Three months ended |
| |||||||
|
| March 31, |
| December 31, |
| March 31, |
| |||
(in thousands) |
| 2013 |
| 2012 |
| 2012 |
| |||
Interest income |
|
|
|
|
|
|
| |||
Interest and fees on loans |
| $ | 42,603 |
| $ | 42,816 |
| $ | 44,888 |
|
Interest on investment and mortgage-related securities |
| 3,464 |
| 3,288 |
| 3,805 |
| |||
Total interest income |
| 46,067 |
| 46,104 |
| 48,693 |
| |||
Interest expense |
|
|
|
|
|
|
| |||
Interest on deposit liabilities |
| 1,312 |
| 1,408 |
| 1,779 |
| |||
Interest on other borrowings |
| 1,164 |
| 1,193 |
| 1,261 |
| |||
Total interest expense |
| 2,476 |
| 2,601 |
| 3,040 |
| |||
Net interest income |
| 43,591 |
| 43,503 |
| 45,653 |
| |||
Provision for loan losses |
| 1,858 |
| 3,379 |
| 3,546 |
| |||
Net interest income after provision for loan losses |
| 41,733 |
| 40,124 |
| 42,107 |
| |||
Noninterest income |
|
|
|
|
|
|
| |||
Fees from other financial services |
| 7,643 |
| 8,887 |
| 7,337 |
| |||
Fee income on deposit liabilities |
| 4,314 |
| 4,648 |
| 4,278 |
| |||
Fee income on other financial products |
| 1,794 |
| 1,836 |
| 1,549 |
| |||
Gain on sale of loans |
| 3,346 |
| 6,331 |
| 2,035 |
| |||
Other income |
| 1,592 |
| 1,164 |
| 1,360 |
| |||
Total noninterest income |
| 18,689 |
| 22,866 |
| 16,559 |
| |||
Noninterest expense |
|
|
|
|
|
|
| |||
Compensation and employee benefits |
| 20,088 |
| 19,953 |
| 18,646 |
| |||
Occupancy |
| 4,123 |
| 4,313 |
| 4,225 |
| |||
Data processing |
| 2,987 |
| 2,854 |
| 2,111 |
| |||
Services |
| 2,103 |
| 2,800 |
| 1,783 |
| |||
Equipment |
| 1,774 |
| 1,806 |
| 1,730 |
| |||
Other expense |
| 7,595 |
| 9,207 |
| 6,707 |
| |||
Total noninterest expense |
| 38,670 |
| 40,933 |
| 35,202 |
| |||
Income before income taxes |
| 21,752 |
| 22,057 |
| 23,464 |
| |||
Income taxes |
| 7,597 |
| 7,694 |
| 7,587 |
| |||
Net income |
| $ | 14,155 |
| $ | 14,363 |
| $ | 15,877 |
|
Comprehensive income |
| $ | 15,484 |
| $ | 5,740 |
| $ | 15,899 |
|
OTHER BANK INFORMATION (annualized %, except as of period end) |
|
|
|
|
|
|
| |||
Return on average assets |
| 1.12 |
| 1.15 |
| 1.29 |
| |||
Return on average equity |
| 11.28 |
| 11.29 |
| 12.87 |
| |||
Return on average tangible common equity |
| 13.49 |
| 13.47 |
| 15.44 |
| |||
Net interest margin |
| 3.78 |
| 3.81 |
| 4.04 |
| |||
Net charge-offs to average loans outstanding |
| 0.12 |
| 0.13 |
| 0.28 |
| |||
Efficiency ratio |
| 61 |
| 61 |
| 56 |
| |||
As of period end |
|
|
|
|
|
|
| |||
Nonperforming assets to loans outstanding and real estate owned * |
| 1.89 |
| 1.87 |
| 2.02 |
| |||
Allowance for loan losses to loans outstanding |
| 1.11 |
| 1.11 |
| 1.05 |
| |||
Tier-1 leverage ratio * |
| 9.1 |
| 9.1 |
| 9.1 |
| |||
Total risk-based capital ratio * |
| 12.8 |
| 12.8 |
| 12.9 |
| |||
Tangible common equity to total assets |
| 8.38 |
| 8.39 |
| 8.46 |
| |||
Dividend paid to HEI (via ASHI) ($ in millions) |
| 10 |
| 15 |
| 10 |
| |||
* 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, 2012 and HEI’s Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2013 (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.
American Savings Bank, F.S.B.
BALANCE SHEETS DATA
(Unaudited)
|
| March 31, |
| December 31, |
| ||
(in thousands) |
| 2013 |
| 2012 |
| ||
Assets |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 224,870 |
| $ | 184,430 |
|
Available-for-sale investment and mortgage-related securities |
| 659,400 |
| 671,358 |
| ||
Investment in stock of Federal Home Loan Bank of Seattle |
| 95,152 |
| 96,022 |
| ||
Loans receivable held for investment |
| 3,845,732 |
| 3,779,218 |
| ||
Allowance for loan losses |
| (42,730 | ) | (41,985 | ) | ||
Loans receivable held for investment, net |
| 3,803,002 |
| 3,737,233 |
| ||
Loans held for sale, at lower of cost or fair value |
| 5,351 |
| 26,005 |
| ||
Other |
| 246,420 |
| 244,435 |
| ||
Goodwill |
| 82,190 |
| 82,190 |
| ||
Total assets |
| $ | 5,116,385 |
| $ | 5,041,673 |
|
|
|
|
|
|
| ||
Liabilities and shareholder’s equity |
|
|
|
|
| ||
Deposit liabilities–noninterest-bearing |
| $ | 1,223,921 |
| $ | 1,164,308 |
|
Deposit liabilities–interest-bearing |
| 3,088,699 |
| 3,065,608 |
| ||
Other borrowings |
| 193,233 |
| 195,926 |
| ||
Other |
| 106,337 |
| 117,752 |
| ||
Total liabilities |
| 4,612,190 |
| 4,543,594 |
| ||
|
|
|
|
|
| ||
Common stock |
| 334,344 |
| 333,712 |
| ||
Retained earnings |
| 183,918 |
| 179,763 |
| ||
Accumulated other comprehensive loss, net of tax benefits |
| (14,067 | ) | (15,396 | ) | ||
Total shareholder’s equity |
| 504,195 |
| 498,079 |
| ||
Total liabilities and shareholder’s equity |
| $ | 5,116,385 |
| $ | 5,041,673 |
|
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, 2012 and HEI’s Quarterly Report on SEC Form 10-Q for the quarter ended March 31, 2013 (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.
EXPLANATION OF HEI’S USE OF CERTAIN UNAUDITED NON-GAAP MEASURES
HEI and HECO management use certain non-GAAP measures to evaluate the performance of the utility. Management believes these non-GAAP measures provide useful information and are a better indicator of the utility’s core operating activities. Core earnings as presented here may not be comparable to similarly titled measures used by other companies. The accompanying tables provide a reconciliation of reported GAAP1 earnings to non-GAAP core earnings for both the utility and HEI consolidated and the corresponding adjusted return on average common equity (ROACE).
The reconciling adjustments from GAAP earnings to core earnings are limited to the settlement charges for the partial write-off of utility assets in 2012 and 2011. For more information on the settlement charge recorded in 2012, see the Form 8-K filed on March 20, 2013.
Management does not consider these items to be representative of the company’s fundamental core earnings.
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(Unaudited)
|
| Net Income
|
| ||||
|
| Twelve months ended
|
| ||||
|
| March 31,
|
| ||||
(in millions) |
| 2013 |
| 2012 |
| ||
|
|
|
|
|
| ||
|
|
|
|
|
| ||
GAAP (as reported) |
| $ | 134.0 |
| $ | 148.1 |
|
|
|
|
|
|
| ||
Excluding special items (after-tax): |
|
|
|
|
| ||
Settlement agreement for the partial writedown of certain utility assets |
| 24.4 |
| - |
| ||
|
|
|
|
|
| ||
Settlement agreement for the partial writedown of the East Oahu Transmission Project (EOTP) Phase I costs |
| - |
| 5.7 |
| ||
|
|
|
|
|
| ||
Non-GAAP (core) |
| $ | 158.5 |
| $ | 153.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Note: Columns may not foot due to rounding |
|
|
|
|
| ||
|
| Twelve months ended |
| ||
|
| March 31, |
| ||
Other measures: |
| 2013 |
| 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average common equity (ROACE) (simple average): |
|
|
| ||
Based on GAAP |
| 8.5% |
| 9.7% |
|
Based on non-GAAP (core)2 |
| 10.0% |
| 10.1% |
|
1 U.S. Generally Accepted Accounting Principles.
2 Calculated as core net income divided by average GAAP common equity.
Hawaiian Electric Company, Inc. (HECO) and Subsidiaries
RECONCILIATION OF GAAP1 TO NON-GAAP MEASURES
(Unaudited)
|
| Net Income |
| ||||
|
| Twelve months ended |
| ||||
|
| March 31, |
| ||||
(in millions) |
| 2013 |
| 2012 |
| ||
|
|
|
|
|
| ||
GAAP (as reported) |
| $ | 96.4 |
| $ | 108.1 |
|
|
|
|
|
|
| ||
Excluding special items (after-tax): |
|
|
|
|
| ||
Settlement agreement for the partial writedown of certain utility assets |
| 24.4 |
| - |
| ||
|
|
|
|
|
| ||
Settlement agreement for the partial writedown of the EOTP Phase I costs |
| - |
| 5.7 |
| ||
|
|
|
|
|
| ||
Non-GAAP (core) |
| $ | 120.8 |
| $ | 113.8 |
|
|
|
|
|
|
| ||
Note: Columns may not foot due to rounding |
|
|
|
|
| ||
|
| Twelve months ended |
| ||
|
| March 31, |
| ||
Other measures: |
| 2013 |
| 2012 |
|
Return on average common equity (ROACE) (simple average): |
|
|
| ||
Based on GAAP |
| 6.7% |
| 7.9% |
|
Based on non-GAAP (core)2 |
| 8.4% |
| 8.3% |
|
|
|
| Hawaiian Electric Company, |
| Hawaii Electric Light |
| Maui Electric Company, |
| ||||||||||||
|
| Inc. (HECO, Oahu) |
| Company, Inc. (HELCO) |
| Limited (MECO) |
| ||||||||||||
|
| Net Income |
| Net Income |
| Net Income |
| ||||||||||||
|
| Twelve months ended |
| Twelve months ended |
| Twelve months ended |
| ||||||||||||
|
| March 31, |
| March 31, |
| March 31, |
| ||||||||||||
(in millions) |
| 2013 |
| 2012 |
| 2013 |
| 2012 |
| 2013 |
| 2012 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
GAAP (as reported) |
| $ | 65.1 |
| $ | 66.5 |
| $ | 14.0 |
| $ | 26.6 |
| $ | 17.3 |
| $ | 15.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Excluding special items (after-tax): |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Settlement agreement for the partial writedown of certain utility assets |
| 17.7 |
| - |
| 3.4 |
| - |
| 3.4 |
| - |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Settlement agreement for the partial writedown of the EOTP Phase I costs |
| - |
| 5.7 |
| - |
| - |
| - |
| - |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Non-GAAP (core) |
| $ | 82.8 |
| $ | 72.2 |
| $ | 17.4 |
| $ | 26.6 |
| $ | 20.7 |
| $ | 15.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Note: Columns may not foot due to rounding |
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
| Twelve months ended |
| Twelve months ended |
| Twelve months ended |
| ||||||
|
| March 31, |
| March 31, |
| March 31, |
| ||||||
Other measures: |
| 2013 |
| 2012 |
| 2013 |
| 2012 |
| 2013 |
| 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average common equity (ROACE) (simple average): |
|
|
|
|
|
|
|
|
| ||||
Based on GAAP |
| 7.0% |
| 7.7% |
| 5.1% |
| 9.6% |
| 7.4% |
| 6.4% |
|
Based on non-GAAP (core)2 |
| 8.9% |
| 8.4% |
| 6.3% |
| 9.6% |
| 8.8% |
| 6.4% |
|
1 U.S. Generally Accepted Accounting Principles.
2 Calculated as core net income divided by average GAAP common equity.