<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
(Exact Name of Registrant as Specified in Its Certificate of Trust)
Commission File Number: 1-8503-01
Delaware 52-6829385
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
c/o The Bank of New York, 101 Barclay Street, 21st Floor, New York, N.Y. 10286
(212) 815-5084
Attention: Corporate Trust Trustee Administration
(Address, including zip code, and telephone number, including area code of
principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ------------------ -----------------------------------------
8.36% Trust Originated Preferred New York Stock Exchange
Securities (TOPrS)
(and the related guarantee)
Securities registered pursuant to Section 12(g) of the Act: None
HEI PREFERRED FUNDING, LP
(Exact Name of Registrant as Specified in Its Certificate of Limited
Partnership)
Commission File Number: 1-8503-02
Delaware 52-2007237
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
300 Delaware Avenue, Suite 1704, Wilmington, Delaware 19801 (302) 427-5738
(Address, including zip code, and telephone number, including area code of
principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ------------------- -----------------------------------------
8.36% Partnership Preferred Securities None
(and the related guarantee)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No
----- -----
As of March 31, 1997, no voting securities of the Registrants were held by non-
affiliates of the Registrants.
================================================================================
<PAGE>
Hawaiian Electric Industries Capital Trust I
HEI Preferred Funding, LP
Form 10-Q--for the period February 4, 1997 (inception) to March 31, 1997
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1. Financial statements
<S> <C> <C>
Hawaiian Electric Industries Capital Trust I
--------------------------------------------
<S> <C>
Balance sheet (unaudited) - March 31, 1997................ 1
Statement of earnings (unaudited) - for the period
February 4, 1997 (inception) to March 31, 1997............ 1
Statement of changes in stockholders' equity (unaudited)
- for the period February 4, 1997 (inception) to
March 31, 1997............................................ 2
Statement of cash flows (unaudited) - for the period
February 4, 1997 (inception) to March 31, 1997............ 2
Notes to financial statements (unaudited)................. 3
HEI Preferred Funding, LP
-------------------------
Balance sheet (unaudited) - March 31, 1997................ 5
Statement of earnings (unaudited) - for the period
February 4, 1997 (inception) to March 31, 1997........... 5
Statement of changes in partners' capital (unaudited)
- for the period February 4, 1997 (inception) to
March 31, 1997............................................ 6
Statement of cash flows (unaudited) - for the period
February 4, 1997 (inception) to March 31, 1997............ 6
Notes to financial statements (unaudited)................. 7
Item 2. Management's discussion and analysis of financial condition
and results of operations................................. 8
</TABLE>
PART II. OTHER INFORMATION
<TABLE>
<CAPTION>
<S> <C> <C>
Item 1. Legal proceedings......................................... 9
Item 2. Changes in securities..................................... 9
Item 3. Defaults upon senior securities........................... 9
Item 4. Submission of matters to a vote of security holders....... 9
Item 5. Other information......................................... 9
Item 6. Exhibits and reports on Form 8-K.......................... 9
Signatures.............................................................. 11
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
Item 1. Financial Statements
- -----------------------------
Hawaiian Electric Industries Capital Trust I
Balance sheet (unaudited)
March 31, 1997
(in thousands)
- --------------------------------------------------------------------------------
ASSETS
- ------
<S> <C>
Investment in partnership preferred securities..................... $103,093
==========
Stockholders' equity
- --------------------
Preferred securities (8.36% Trust Originated Preferred Securities;
4,000,000 authorized, issued and outstanding; $25 liquidation
amount per security)............................................... $100,000
Common securities (8.36% Trust Common Securities;
123,720 authorized, issued and outstanding; $25 liquidation
amount per security)............................................... 3,093
----------
$103,093
==========
See accompanying notes to financial statements.
Hawaiian Electric Industries Capital Trust I
Statement of earnings (unaudited)
For the period February 4, 1997 (inception) to March 31, 1997
(in thousands)
- --------------------------------------------------------------------------------
Earnings
Income on partnership preferred securities......................... $1,317
=========
Note: Hawaiian Electric Industries, Inc. owns all of Hawaiian Electric
Industries Capital Trust I's common securities. Therefore, per share data
is not meaningful.
</TABLE>
See accompanying notes to financial statements.
1
<PAGE>
<TABLE>
<CAPTION>
Hawaiian Electric Industries Capital Trust I
Statement of changes in stockholders' equity (unaudited)
For the period February 4, 1997 (inception) to March 31, 1997
(in thousands)
- --------------------------------------------------------------------------------
<S> <C>
Preferred Securities
Issuance of preferred securities on February 4, 1997 (inception)... $ 100,000
-----------
Balance, March 31, 1997............................................ 100,000
-----------
Common Securities
Issuance of common securities on February 4, 1997 (inception)...... 3,093
-----------
Balance, March 31,1997............................................. 3,093
-----------
Retained Earnings
Earnings........................................................... 1,317
Distribution on common securities.................................. (40)
Distribution on preferred securities............................... (1,277)
-----------
Balance, March 31, 1997............................................ --
-----------
Total stockholders' equity......................................... $ 103,093
===========
See accompanying notes to financial statements.
Hawaiian Electric Industries Capital Trust I
Statement of cash flows (unaudited)
For the period February 4, 1997 (inception) to
March 31, 1997
(in thousands)
- --------------------------------------------------------------------------------
Cash flows from operating activities
Earnings........................................................... $ 1,317
------------
Net cash provided by operating Activities.......................... 1,317
------------
Cash flows from investing activities
Purchase of partnership preferred securities on February 4, 1997
(inception)........................................................ (103,093)
------------
Net cash used in investing activities.............................. (103,093)
------------
Cash flows from financing activities
Proceeds from issuance of preferred securities on February 4, 1997.
(inception)....................................................... 100,000
Proceeds from issuance of common securities on February 4, 1997
(inception)....................................................... 3,093
Distribution on common securities.................................. (40)
Distribution on preferred securities............................... (1,277)
------------
Net cash provided by financing activities.......................... 101,776
------------
Net increase in cash and equivalents............................... --
Cash and equivalents, beginning of period.......................... --
------------
Cash and equivalents, end of period................................ $ --
============
See accompanying notes to financial statements.
</TABLE>
2
<PAGE>
Hawaiian Electric Industries Capital Trust I
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
- -------------------------------------------------------------------------------
(1) Organization and purpose
- ----------------------------
Hawaiian Electric Industries Capital Trust I (the Trust) is a statutory business
trust formed under the laws of the State of Delaware on December 19, 1996 for
the exclusive purposes of (i) issuing its 8.36% Trust Originated Preferred
Securities (TOPrS) and its 8.36% Common Securities (the Trust Preferred
Securities and the Trust Common Securities, respectively), (ii) purchasing the
8.36% Partnership Preferred Securities (the Partnership Preferred Securities),
representing the limited partner interest in HEI Preferred Funding, LP (the
Partnership), with the proceeds from the sale of Trust Preferred Securities and
Common Securities, and (iii) engaging in only those other activities necessary
or incidental thereto.
Hycap Management, Inc. (Hycap), a wholly owned subsidiary of Hawaiian Electric
Industries, Inc. (the Company) and sole general partner of the Partnership, has
paid compensation to the underwriters in connection with the offering of the
Trust Preferred Securities, which closed on February 4, 1997. The Company has
agreed to (i) pay all fees and expenses related to the organization and
operations of the Trust (including taxes, duties, assessments, or government
charges of whatever nature (other than withholding taxes) imposed by the United
States or any other domestic taxing authority upon the Trust) and the offering
of the Trust Preferred Securities and (ii) be responsible for all debts and
other obligations of the Trust (other than with respect to the Trust Preferred
Securities and Common Securities). The Company has also agreed to indemnify the
trustees and certain other persons.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------------
BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in conformity
with generally accepted accounting principles (GAAP) for interim financial
information and with the instructions to Securities and Exchange Commission
(SEC) Form 10-Q and Article 10 of Regulation S-X. In preparing the Trust's
financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the balance sheet and the
reported amounts of earnings for the period. Actual results could differ
significantly from those estimates.
In the opinion of the management of the Trust, the accompanying unaudited
financial statements contain all material adjustments required by GAAP to
present fairly the Trust's financial position as of March 31, 1997, and the
results of its operations and cash flows for the period February 4, 1997
(inception) to March 31, 1997. All such adjustments are of a normal recurring
nature, unless otherwise disclosed in this Form 10-Q or other referenced
material. The Trust was formed under Delaware law on December 19, 1996, but
engaged in no activity until it was capitalized through the issuance of the
Trust Preferred Securities and Trust Common Securities on February 4, 1997
(inception) with the proceeds from the sale of the Trust Preferred Securities
and the Common Securities. Accordingly, only the current period's results,
commencing February 4, 1997 (inception) are presented.
INVESTMENT
The investment in Partnership Preferred Securities represents a limited partner
interest in the Partnership and is recorded at cost. As of March 31, 1997, the
carrying value of the investment approximates its fair value. Income on the
Partnership Preferred Securities is accrued when earned.
INCOME TAXES
The Trust does not incur any income tax liabilities. Such liabilities are
incurred directly by the security holders.
3
<PAGE>
(3) INVESTMENT IN PARTNERSHIP PREFERRED SECURITIES
- --------------------------------------------------
The trust holds 4,123,720 8.36% Partnership Preferred Securities, $25
liquidation preference per security. The scheduled distribution payment dates
and redemption provisions of the Partnership Preferred Securities, which are
redeemable after February 4, 2002 at the option of the Partnership, correspond
to the distribution payment dates and redemption provisions of the Trust
Preferred Securities. Upon any redemption of the Partnership Preferred
Securities, the Trust Preferred Securities will be redeemed. The Company has
guaranteed, on a subordinated basis, the payment of distributions by the
Partnership on the Partnership Preferred Securities if, as, and when declared
out of Partnership funds legally available therefor, and payments upon
liquidation of the Partnership or the redemption of the Partnership Preferred
Securities to the extent of Partnership funds legally available therefor.
(4) STOCKHOLDERS EQUITY
- -----------------------
TRUST PREFERRED SECURITIES
The Trust issued 4,000,000 8.36% Trust Preferred Securities, $25 liquidation
amount per security in a public offering which closed on February 4, 1997. The
Trust Preferred Securities are redeemable on or after February 4, 2002 at the
option of the Trust, in whole or in part, at a redemption price equal to $25 per
security. Distributions on the Trust Preferred Securities are cumulative from
the date of original issue and are payable quarterly if, as, and when the Trust
has funds available for payment. Holders of the Trust Preferred Securities have
limited voting rights and are not entitled to vote, to appoint, remove or
replace, or to increase or decrease the number of trustees, which voting rights
are vested exclusively in the holder of the Trust Common Securities. Under
certain circumstances, the Trust Preferred Securities have preferential rights
to payment relative to the Trust Common Securities.
The Company has guaranteed, on a subordinated basis, the payment in full of all
distributions and other payments on the Trust Preferred Securities to the extent
that the Trust has funds legally available therefor. This guarantee and the
partnership distribution guarantee are subordinated to all other liabilities of
the Company and rank pari passu with the Company's most senior preferred stock,
of which there is none currently outstanding.
TRUST COMMON SECURITIES
The trust issued 123,720 8.36% Trust Common Securities, $25 liquidation amount
per security, to the Company on February 4, 1997. The Trust Common Securities
are redeemable on or after February 4, 2002 at the option of the Trust, in whole
or in part, at a redemption price equal to $25 per security.
4
<PAGE>
HEI Preferred Funding, LP
Balance sheet (unaudited)
March 31, 1997
(in thousands)
- -----------------------------------------------------------------------------
Assets
- ------
<TABLE>
<CAPTION>
Investments
<S> <C>
Corporate commercial paper...................................... $ 1,213
Affiliate debentures............................................ 120,073
--------
$121,286
========
Partners' Capital
- -----------------
Partners' capital
Limited partner interest........................................ $103,093
General partner interest........................................ 18,193
--------
$121,286
========
See accompanying notes to financial statements.
HEI Preferred Funding, LP
Statement of earnings (unaudited)
For the period February 4, 1997 (inception) to March 31, 1997
(in thousands)
- -----------------------------------------------------------------------------
Earnings
Interest income--affiliate debentures............................ $1,534
=======
</TABLE>
Note: Hycap Management, Inc., a wholly owned subsidiary of Hawaiian Electric
Industries, Inc. is the sole general partner of HEI Preferred Funding,
LP. Per share data is not meaningful for HEI Preferred Funding, LP.
See accompanying notes to financial statements.
5
<PAGE>
HEI Preferred Funding, LP
Statement of changes in partners' capital (unaudited)
For the period February 4, 1997 (inception) to March 31, 1997
(in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Limited partner's capital
<S> <C>
Issuance of preferred securities on February 4, 1997 (inception). $ 103,093
Earnings allocated to limited partner............................. 1,317
Distribution to limited partner................................... (1,317)
------------
Balance, March 31, 1997........................................... 103,093
------------
General partner's capital
Capital contribution.............................................. 18,193
Earnings allocated to general partner............................. 217
Distribution to general partner................................... (217)
------------
Balance, March 31, 1997........................................... 18,193
------------
Total partners' capital........................................... $121,286
============
See accompanying notes to financial statements.
HEI Preferred Funding, LP
Statement of cash flows (unaudited)
For the period February 4, 1997 (inception) to March 31, 1997
(in thousands)
- --------------------------------------------------------------------------------
Cash flows from operating activities
Earnings.......................................................... $ 1,534
Net cash provided by operating activities........................ 1,534
Cash flows from investing activities
Purchase of affiliate debentures.................................. (120,073)
Purchase of corporate commercial paper............................ (1,213)
----------
Net cash used in investing activities............................. (121,286)
----------
Cash flows from financing activities
Proceeds from issuance of preferred securities.................... 103,093
Capital contribution - general partner............................ 18,193
Distribution to limited partner................................... (1,317)
Distribution to general partner................................... (217)
----------
Net cash provided by financing activities......................... 119,752
----------
Net increase in cash and equivalents.............................. --
Cash and equivalents, beginning of period......................... --
----------
Cash and equivalents, end of period............................... $ --
==========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
HEI Preferred Funding, LP
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
- --------------------------------------------------------------------------------
(1) ORGANIZATION AND PURPOSE
- ----------------------------
HEI Preferred Funding, LP (the Partnership) is a limited partnership that was
formed under the Delaware Revised Uniform Limited Partnership Act on December
23, 1996 for the exclusive purposes of (a) purchasing certain eligible debt
instruments of Hawaiian Electric Industries, Inc. (the Company) and the wholly
owned subsidiaries of the Company (collectively, the Affiliate Investment
Instruments) and certain U.S. government obligations and commercial paper of
unaffiliated entities (Eligible Debt Securities) with the proceeds from (i) the
sale of its 8.36% Partnership Preferred Securities (the Partnership Preferred
Securities), representing a limited partner interest in the Partnership, to
Hawaiian Electric Industries Capital Trust I (the Trust) and (ii) a capital
contribution in exchange for the general partner interest in the Partnership,
(b) receiving interest and other payments on the Affiliate Investment
Instruments and the Eligible Debt Securities held by the Partnership from time
to time, (c) making distributions on the Partnership Preferred Securities and
distributions on the General Partner's interest in the Partnership if, as and
when declared by the General Partner in its sole discretion, (d) subject to the
restrictions and conditions contained in the Agreement of Limited Partnership,
making additional investments in Affiliate Investment Instruments and Eligible
Debt Securities and disposing of any such investments, and (e) except as
otherwise limited in the Agreement of Limited Partnership, entering into, making
and performing all contracts and other undertakings, and engaging in those
activities and transactions as the General Partner deems necessary or advisable
for carrying out the purposes of the Partnership.
Hycap Management, Inc. (Hycap), a wholly owned subsidiary of the Company, is the
sole general partner of the Partnership. Hycap, in its capacity as sole general
partner of the Partnership, has agreed to (i) pay all fees and expenses related
to the organization and operations of the Partnership, including taxes, duties,
assessments, or government charges (other than withholding taxes or taxes or
charges imposed by reason of the transfer of the Partnership Preferred
Securities) imposed by the United States or any other domestic taxing authority
upon the Partnership and (ii) be responsible for all debts and other obligations
of the Partnership (other than with respect to the Partnership Preferred
Securities). Hycap has also agreed to indemnify certain officers and agents of
the Partnership. These obligations of Hycap have been guaranteed by the Company.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------------
BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in conformity
with GAAP for interim financial information and with the instructions to SEC
Form 10-Q and Article 10 of Regulation S-X. In preparing the Partnership
financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the balance sheet and the
reported amounts of earnings for the period. Actual results could differ
significantly from those estimates.
In the opinion of the management of the Partnership, the accompanying unaudited
financial statements contain all material adjustments required by GAAP to
present fairly the Partnership's financial position as of March 31, 1997, and
the results of its operations and cash flows for the period February 4, 1997
(inception) to March 31, 1997. All such adjustments are of a normal recurring
nature, unless otherwise disclosed in this Form 10-Q or other referenced
material. The Partnership was formed on December 23, 1996, but engaged in no
activity until it was capitalized through the issuance of its Partnership
Preferred Securities and general partner interest on February 4, 1997
(inception) with the proceeds from the sale of the Partnership Preferred
Securities and the general partner interest. Accordingly, only the current
period's results, commencing February 4, 1997 (inception) are presented.
7
<PAGE>
INVESTMENTS
The Partnership's investments in affiliate debentures and corporate commercial
paper are classified as held-to-maturity and are recorded at accreted cost. As
of March 31, 1997, the carrying values of these investments approximate their
fair value.
INCOME TAXES
The Partnership does not incur any income tax liabilities. Such liabilities are
incurred directly by the partners.
(3) INVESTMENT IN AFFILIATE DEBENTURES
- --------------------------------------
The Partnership holds debentures of the Company and a wholly owned subsidiary of
the Company. The debentures have a term of approximately 20 years and bear
interest at 8.36% per annum. The interest payment dates and redemption
provisions of the debentures, which are redeemable at the option of the Company
and its subsidiary on or after February 4, 2002, correspond to the distribution
payment dates and redemption provisions of the Partnership Preferred Securities.
Interest and redemption payments on the subsidiary debenture are guaranteed by
the Company on a subordinated basis.
(4) PARTNERS' CAPITAL
- ---------------------
The Partnership issued 4,123,720 8.36% Partnership Preferred Securities, $25
liquidation preference per security, to the Trust on February 4, 1997.
Distributions on the Partnership Preferred Securities are cumulative from the
date of original issue and are payable quarterly if, as, and when declared by
the general partner. The Partnership Preferred Securities are redeemable on or
after February 4, 2002 at the option of the Partnership, at a redemption price
equal to $25 per security plus unpaid distributions. Except as provided in the
Limited Partnership Agreement and Partnership Preferred Securities Guarantee
Agreement, and as otherwise provided by law, the holders of the Partnership
Preferred Securities have no voting rights.
The Company has guaranteed the payment of distributions by the Partnership on
the Partnership Preferred Securities if, as, and when declared out of funds
legally available therefor and payments upon liquidation of the Partnership or
the redemption of the Partnership Preferred Securities to the extent of funds
legally available therefor. This guarantee is subordinated to all other
liabilities of the Company and ranks pari passu with the most senior preferred
stock (if any) issued by the Company and with the Trust Guarantee and the
Investment Guarantee.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- --------------------------------------------------------------------------------
OF OPERATIONS
- -------------
Hawaiian Electric Industries Capital Trust I (the Trust) is a statutory business
trust formed under the Delaware Business Trust Act, as amended, pursuant to a
trust agreement and a certificate of trust filed with the Secretary of State on
December 19, 1996. The Trust Agreement was subsequently amended by an amended
and restated trust agreement dated as of February 1, 1997. The Trust exists for
the exclusive purposes of (i) issuing trust securities, consisting of 8.36%
Trust Originated Preferred Securities (the Trust Preferred Securities) and trust
common securities (the Trust Common Securities), representing undivided
beneficial ownership interests in the assets of the Trust, (ii) investing the
gross proceeds of the trust securities in 8.36% Partnership Preferred Securities
(the Partnership Preferred Securities) issued by HEI Preferred Funding, LP (the
Partnership), and (iii) engaging in only those other activities necessary or
incidental thereto.
The Partnership is a limited partnership formed under the Delaware Revised
Uniform Limited Partnership Act, as amended, pursuant to an agreement of limited
partnership and filing of a certificate of limited partnership with the
Secretary of State on December 23, 1996, which was subsequently amended by an
amended and restated agreement of limited partnership dated as of February 1,
1997. Hycap Management, Inc. (Hycap), a wholly owned subsidiary of Hawaiian
Electric Industries, Inc. (the Company), is the sole general partner of the
Partnership. The Partnership is managed by the general partner and exists for
the exclusive purposes of (a) purchasing certain eligible debt instruments of
the Company and the wholly owned subsidiaries of the Company (collectively, the
Affiliate Investment Instruments) and certain U.S. government obligations and
commercial paper of unaffiliated entities (Eligible Debt Securities) with the
proceeds from (i) the sale of its Partnership Preferred Securities, representing
a limited partner interest in the Partnership, to the Trust and (ii) a capital
contribution in
8
<PAGE>
exchange for the general partner interest in the Partnership, (b) receiving
interest and other payments on the Affiliate Investment Instruments and the
Eligible Debt Securities held by the Partnership from time to time, (c) making
distributions on the Partnership Preferred Securities and distributions on the
general partner interest in the Partnership if, as and when declared by the
general partner in its sole discretion, (d) subject to the restrictions and
conditions contained in the Agreement of Limited Partnership, making additional
investments in Affiliate Investment Instruments and Eligible Debt Securities and
disposing of any such investments, and (e) except as otherwise limited in the
Agreement of Limited Partnership, entering into, making and performing all
contracts and other undertakings, and engaging in those activities and
transactions as the general partner deems necessary or advisable for carrying
out the purposes of the Partnership.
The Registrant's activities are limited to issuing securities and investing the
proceeds as described above. Since the Trust was organized on December 19, 1996,
its activities, as specified in its declaration of trust, have been limited to
the issuance of the Trust Preferred Securities and the Trust Common Securities,
the investing of the proceeds in the Partnership Preferred Securities, and the
payment of distributions on the Trust Preferred Securities and the Trust Common
Securities in accordance with their terms. Since the Partnership was organized
on December 23, 1996, its activities, as specified in its agreement of limited
partnership, have been limited to the issuance of the Partnership Preferred
Securities, the receipt of a capital contribution from Hycap, as general
partner, the investment of the proceeds from the sale of the Partnership
Preferred Securities and the General Partner interest in the Affiliate
Investment Instruments and certain eligible debt securities, and the payment of
distributions on the Partnership Preferred Securities. All of the foregoing
activities of the Trust and the Partnership occurred in or after February 1997.
PART II - OTHER INFORMATION
- --------------------------------------------------------------------------------
Item 1. Legal proceedings
- --------------------------
The Registrants know of no material legal proceedings involving the Trust, the
Partnership or the assets of either of them.
Item 2. Changes in securities
- ------------------------------
Not applicable.
Item 3. Defaults upon senior securities
- ----------------------------------------
Not applicable.
Item 4. Submission of matters to a vote of security holders
- ------------------------------------------------------------
Not applicable.
Item 5. Other information
- --------------------------
Not applicable.
Item 6. Exhibits and reports on Form 8-K
- -----------------------------------------
<TABLE>
<CAPTION>
(a) Exhibits
<S> <C>
Exhibit 4.1 Certificate of Trust dated as of December 19, 1996
(incorporated by reference to Exhibit 4(a)(i) to Registration
Statement on Form S-3 (No. 333-18809) (the "Registration
Statement"))
Exhibit 4.2 Amended and Restated Trust Agreement of the Trust dated as of
February 1, 1997 (incorporated by reference to Exhibit 4(f) to
the Current Report on Form 8-K of Hawaiian Electric
Industries, Inc. dated February 4, 1997, File No. 1-8503 (the
"February 4, 1997 Form 8-K"))
</TABLE>
9
<PAGE>
(a) Exhibits (continued)
<TABLE>
<CAPTION>
<S> <C>
Exhibit 4.3 Amended and Restated Certificate of Limited
Partnership of the Partnership dated as of
December 23, 1996 (incorporated by reference
to Exhibit 4(c) to the Registration Statement)
Exhibit 4.4 Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of
February 1, 1997 (incorporated by reference
to Exhibit 4(e) to the February 4, 1997 Form
8-K)
Exhibit 4.5 Trust Preferred Securities Guarantee Agreement
with respect to the Trust dated as of February
1, 1997 (incorporated by reference to Exhibit
4(o) to the February 4, 1997 Form 8-K)
Exhibit 4.6 Partnership Guarantee Agreement with respect
to the Partnership dated as of February 1,
1997 (incorporated by reference to Exhibit
4(p) to the February 4, 1997 Form 8-K)
Exhibit 4.7 Junior Indenture between HEI and The Bank of
New York, as Trustee, dated as of February 1,
1997 (incorporated by reference to Exhibit
4(i) to the February 4, 1997 Form 8-K)
Exhibit 4.8 Officers' Certificate in connection with
issuance of 8.36% Junior Subordinated
Debenture, Series A, Due 2017 under Junior
Indenture of HEI (incorporated by reference to
Exhibit 4(l) to the February 4, 1997 Form 8-K)
Exhibit 4.9 Affiliate Investment Instruments Guarantee
Agreement with respect to 8.36% Junior
Subordinated Debenture of HEIDI dated as of
February 1, 1997 (incorporated by reference
to Exhibit 4(q) to the February 4, 1997 Form
8-K)
Exhibit 4.10 8.36% Trust Originated Preferred Security
(Liquidation Amount $25 Per Trust Preferred
Security) of the Trust (incorporated by
reference to Exhibit 4(m) to the February 4,
1997 Form 8-K)
Exhibit 4.11 8.36% Junior Subordinated Debenture Series A,
Due 2017, of HEI (incorporated by reference
to Exhibit 4(n) to the February 4, 1997 Form
8-K)
Exhibit 4.12 Certificate Evidencing Trust Common Securities
of the Trust dated February 4, 1997
Exhibit 4.13 Certificate Evidencing Partnership Preferred
Securities of the Partnership dated February
4, 1997
Exhibit 12 Computation of ratios of earnings to combined
fixed charges and preferred securities
distributions, for the period February 4, 1997
(inception) to March 31, 1997
Exhibit 27.1 Hawaiian Electric Industries Capital Trust I
-- Financial Data Schedule
March 31, 1997 and for the period February 4,
1997 (inception) to March 31, 1997
Exhibit 27.2 HEI Preferred Funding, LP -- Financial Data
Schedule
March 31, 1997 and for the period February 4,
1997 (inception) to March 31, 1997
(b) Reports on Form 8-K
</TABLE>
None
10
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrants have duly caused this report to be signed on their
behalf by the undersigned, thereunto duly authorized on the 13th day of August,
1997.
HAWAIIAN ELECTRIC INDUSTRIES
CAPITAL TRUST I
By: /s/Robert F. Mougeot
--------------------
Name: Robert F. Mougeot
Title: Regular Trustee
(Principal Financial Officer of the Trust)
By: /s/Constance H. Lau
-------------------
Name: Constance H. Lau
Title: Regular Trustee
HEI PREFERRED FUNDING, LP
By: HYCAP MANAGEMENT, INC., as General Partner
By: /s/Robert F. Mougeot
--------------------
Name: Robert F. Mougeot
Title: Vice President
(Principal Financial Officer of the
Partnership)
11
<PAGE>
EXHIBIT 4.12
CERTIFICATE NO. NO. OF COMMON SECURITIES
- --------------- ------------------------
TC-1 123,720
CERTIFICATE EVIDENCING TRUST COMMON SECURITIES
OF
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
8.36% Trust Common Securities
(Liquidation Amount $25 Per Trust Common Security)
HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I, a statutory business
trust created under the laws of the State of Delaware (the "TRUST"), hereby
certifies that Hawaiian Electric Industries, Inc., a Hawaii corporation (the
"HOLDER") is the registered owner of 123,720 common securities of the Trust
representing undivided beneficial ownership interests in the assets of the Trust
designated the 8.36% Trust Common Securities (Liquidation Amount $25 Per Trust
Common Security) (the "TRUST COMMON SECURITIES"). The designation, rights,
powers, privileges, restrictions, preferences and other terms and provisions of
the Trust Common Securities represented hereby are set forth in, issued under
and shall in all respects be subject to the provisions of the Amended and
Restated Trust Agreement dated as of February 1, 1997, as the same may be
amended from time to time (the "TRUST AGREEMENT"). Capitalized terms used
herein but not defined shall have the meaning given them in the Trust Agreement.
The Holder is entitled to the benefits of the Trust Common Securities Guarantee
to the extent provided therein. Each Holder of a Trust Common Security, by
acceptance of this certificate, agrees to treat the Initial Debentures, and any
other Affiliate Investment Instruments that are treated as debt instruments by
the relevant Investment Affiliate and by the Partnership, as indebtedness for
United States federal income tax purposes. The Property Trustee will provide a
copy of the Trust Agreement, the Trust Common Securities Guarantee and the
Agreement of Limited Partnership to a Holder without charge upon written request
to the Trust at its principal place of business. THE TRUST COMMON SECURITIES
ARE TRANSFERABLE ON THE BOOKS AND RECORDS OF THE TRUST ONLY IN ACCORDANCE WITH
THE TERMS OF THE TRUST AGREEMENT.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
<PAGE>
The Holder of Trust Common Securities shall be entitled to receive
cumulative cash distributions at a rate per annum of 8.36% of the stated
liquidation amount of $25 per Trust Common Security. Distributions on the Trust
Common Securities shall, from the date of original issue, accumulate and be
cumulative and shall be payable quarterly only to the extent that the Trust has
funds available for the payment of such distributions in the Property Account.
Distributions not paid on the scheduled payment date will accumulate and
compound quarterly (to the extent permitted by applicable law) at the rate of
8.36% per annum ("COMPOUND DISTRIBUTIONS"). The term "DISTRIBUTIONS" as used
herein shall mean ordinary cumulative distributions in respect of each Fiscal
Period together with any such Compounded Distributions. Amounts available to the
Trust for distribution to the Holder of the Trust Common Securities will be
limited to payments received by the Trust from the Partnership on the
Partnership Preferred Securities or from the Company on the Partnership
Guarantee. Distributions on the Partnership Preferred Securities will be paid
only if, as and when declared in the sole discretion of the General Partner of
the Partnership. If and to the extent that the Partnership makes a distribution
on the Partnership Preferred Securities held by the Property Trustee or the
Company makes a payment under the Partnership Guarantee (the amount of any such
Partnership distribution, including any compounded Partnership distributions or
guarantee payment, being a "PAYMENT AMOUNT"), the Trust shall and the Property
Trustee is directed, to the extent funds are available for that purpose pursuant
to the Trust Agreement, to make a Pro Rata Distribution of the Payment Amount to
the Holder.
The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, except that for any period shorter than a full 90-day
quarter on the basis of the actual number of days elapsed in such 90-day
quarter.
Except as otherwise described herein, Distributions on the Trust
Common Securities will be cumulative, will accumulate from the date of initial
issuance and will be payable quarterly in arrears, on March 31, June 30,
September 30 and December 31 of each year, commencing on March 31, 1997 if, as
and when legally available for payment by the Property Trustee. Distributions
will be payable to the holders of record of the Trust Common Securities as they
appear on the books and records of the Trust on the relevant record dates, which
will be one Business Day prior to the relevant payment dates. In the event that
any date on which Distributions are payable is not a Business Day, payment of
such Distribution shall be made on the next succeeding day which is a Business
Day (without any interest or other payment in respect of any
2
<PAGE>
such delay) except that if such Business Day falls in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day (without any reduction of interest or other payments in respect of such
early payment), in each case with the same force and effect as if made on the
payment date. Payments of accumulated Distributions will be payable to the
holders of record of the Trust Common Securities as recorded in the books and
records of the Trust on the relevant record date with respect to the payment
date for the Trust Common Securities which corresponds to the payment date fixed
by the Partnership with respect to the payment of cumulative distributions on
the Partnership Preferred Securities. If Distributions are not paid when
scheduled, the accumulated Distributions shall be paid to the holders of record
of the Trust Common Securities as they appear on the books and records of the
Trust on the relevant record date as determined under the Trust Agreement with
respect to the actual payment date for the Trust Common Securities, which will
correspond to the actual payment date fixed by the Partnership with respect to
the payment of cumulative distributions on the Partnership Preferred Securities
not declared and paid when regularly scheduled.
The Trust Common Securities shall be redeemable as provided in
the Trust Agreement.
IN WITNESS WHEREOF, the Trust has executed this certificate this
4th day of February, 1997.
HAWAIIAN ELECTRIC INDUSTRIES
CAPITAL TRUST I
/s/ ROBERT F. CLARKE
--------------------------------------
ROBERT F. CLARKE, AS REGULAR
TRUSTEE
/s/ ROBERT F. MOUGEOT
--------------------------------------
ROBERT F. MOUGEOT, AS REGULAR
TRUSTEE
/s/ CONSTANCE H. LAU
--------------------------------------
CONSTANCE H. LAU, AS REGULAR
TRUSTEE
3
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust
Common Security Certificate to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(INSERT ASSIGNEE'S SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(INSERT ADDRESS AND ZIP CODE OF ASSIGNEE)
and irrevocably appoints
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
agent to transfer this Trust Common Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: ______________________________
Signature: _________________________
(SIGN EXACTLY AS YOUR NAME APPEARS IN THIS TRUST COMMON SECURITY CERTIFICATE)
4
<PAGE>
EXHIBIT 4.13
CERTIFICATE NO. NO. OF PREFERRED SECURITIES
- --------------- ---------------------------
PP-1 4,123,720
CERTIFICATE EVIDENCING PARTNERSHIP PREFERRED SECURITIES
OF
HEI PREFERRED FUNDING, LP
8.36% Partnership Preferred Securities
(Liquidation Preference $25 Per Partnership Preferred Security)
HEI PREFERRED FUNDING, LP, a limited partnership formed under the laws
of the State of Delaware (the "PARTNERSHIP"), hereby certifies that The Bank of
New York, a New York banking corporation, as the Property Trustee of Hawaiian
Electric Industries Capital Trust I (the "Trust") pursuant to the Amended and
Restated Trust Agreement of the Trust, dated as of February 1, 1997 (the
"HOLDER"), is the registered owner of 4,123,720 preferred securities of the
Partnership representing limited partner interests in the Partnership designated
the 8.36% Partnership Preferred Securities (Liquidation Preference $25 Per
Partnership Preferred Security) (the "PARTNERSHIP PREFERRED SECURITIES"). The
Partnership Preferred Securities are freely transferable on the books and
records of the Partnership, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer.
The designation, rights, powers, privileges, restrictions, preferences and other
terms and provisions of the Partnership Preferred Securities represented hereby
are set forth in, issued under and shall in all respects be subject to the
provisions of the Amended and Restated Agreement of Limited Partnership, dated
as of February 1, 1997, as the same may be amended from time to time (the
"AGREEMENT OF LIMITED PARTNERSHIP"). Capitalized terms used herein but not
defined shall have the meaning given to them in the Agreement of Limited
Partnership. The Holder is entitled to the benefits of the Partnership
Guarantee to the extent provided therein. The Partnership will provide a copy
of the Agreement of Limited Partnership and the Partnership Guarantee to the
Holder without charge upon written request to the Partnership at its principal
place of activity.
Upon receipt of this certificate, the Holder is admitted to the
Partnership as a Limited Partner, is bound by the Agreement of Limited
Partnership and is entitled to the benefits thereunder. The Holder, by
acceptance of this certificate, and each Partnership Preferred Security
Beneficial
<PAGE>
Owner, by acquisition of a beneficial interest in this certificate, agrees to
treat the Initial Debentures, and any other Affiliate Investment Instruments
that are treated as debt instruments by the relevant Investment Affiliate and by
the Partnership, as indebtedness for United States federal income tax purposes.
Distributions payable on each Partnership Preferred Security will be
fixed at a rate per annum of 8.36% of the stated liquidation preference of $25
per Partnership Preferred Security. Distributions not paid on the scheduled
payment date will accumulate and compound quarterly (to the extent permitted by
applicable law) at the rate of 8.36% per annum ("COMPOUNDED DISTRIBUTIONS").
The term "DISTRIBUTIONS" as used herein shall mean ordinary cumulative
distributions in respect of each Fiscal Period together with any such Compounded
Distributions. Distributions on the Partnership Preferred Securities will be
paid only if, as and when declared in the sole discretion of the General Partner
of the Partnership out of funds legally available for the payment of such
Distributions. Amounts available to the Partnership for Distribution to the
holders of the Partnership Preferred Securities will be limited to payments
received by the Partnership from Hawaiian Electric Industries, Inc. and one or
more of certain of its subsidiaries on Affiliate Investment Instruments or from
Hawaiian Electric Industries, Inc. on the Partnership Guarantee or any
Investment Guarantee or from the Eligible Debt Securities. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months,
except that for any period shorter than a full 90-day quarter on the basis of
the actual number of days elapsed in such 90-day quarter.
Except as otherwise described herein, Distributions on the Partnership
Preferred Securities will be cumulative, will accumulate from the date of
initial issuance and will be payable quarterly in arrears, on March 31, June 30,
September 30 and December 31 of each year, commencing on March 31, 1997 (each, a
"Distribution Payment Date"), if, as and when declared by the General Partner in
its sole discretion. If the Partnership Preferred Securities are in book-entry-
only form, Distributions will be payable to the holders of record of Partnership
Preferred Securities as they appear on the books and records of the Partnership
on the relevant record dates, which will be one Business Day prior to the
relevant payment dates. If the Partnership Preferred Securities are not in
book-entry-only form, the relevant record dates shall be the 15th day of the
month of the relevant payment dates. If the Trust or the Property Trustee is
the holder of the Partnership Preferred Securities, all Distributions shall be
made by wire transfer of same day funds to such holder by 12:00 Noon, New York
City time, on the
2
<PAGE>
applicable Distribution Payment Date. Distributions payable on any Partnership
Preferred Securities that are not punctually paid on any Distribution Payment
Date will cease to be payable to the Person in whose name such Partnership
Preferred Securities are registered on the relevant record date, and such
Distribution will instead be payable to the Person in whose name such
Partnership Preferred Securities are registered on the record date for payment
of such defaulted or accumulated Distribution. In the event that any date on
which Distributions are payable is not a Business Day, payment of such
Distributions shall be made on the next succeeding day which is a Business Day
(without any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day (without any
reduction in interest or other amounts in respect of any such early payment), in
each case with the same force and effect as if made on the payment date.
The Partnership Preferred Securities shall be redeemable as provided
in the Agreement of Limited Partnership.
IN WITNESS WHEREOF, the Partnership has executed this certificate this
4th day of February, 1997.
HEI PREFERRED FUNDING, LP
BY: HYCAP MANAGEMENT, INC.
AS GENERAL PARTNER
BY: /S/ ROBERT F. CLARKE
---------------------
ROBERT F. CLARKE
PRESIDENT
BY: /S/ BETTY ANN M. SPLINTER
--------------------------
BETTY ANN M. SPLINTER
SECRETARY
3
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Partnership Preferred Security Certificate to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(INSERT ASSIGNEE'S SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(INSERT ADDRESS AND ZIP CODE OF ASSIGNEE)
and irrevocably appoints
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
agent to transfer this Partnership Preferred Security Certificate on the books
of the Partnership. The agent may substitute another to act for him or her.
Date: ______________________________
Signature: _________________________
(SIGN EXACTLY AS YOUR NAME APPEARS IN THIS PARTNERSHIP PREFERRED SECURITY
CERTIFICATE)
4
<PAGE>
EXHIBIT 12
----------
Hawaiian Electric Industries Capital Trust I
HEI Preferred Funding, LP
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED
SECURITIES DISTRIBUTIONS
(unaudited)
<TABLE>
<CAPTION>
For the period February 4, 1997 (inception)
to March 31, 1997
------------------------------------------------
Hawaiian Electric
Industries Capital HEI Preferred
(dollars in thousands) Trust I Funding, LP
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Earnings............................................... $1,317 $1,534
======= =======
Fixed charges.......................................... $ -- $ --
Preferred securities distribution requirements......... 1,277 1,317
------ ------
TOTAL COMBINED FIXED CHARGES AND PREFERRED
SECURITIES DISTRIBUTIONS............................ $1,277 $1,317
====== ======
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED SECURITIES DISTRIBUTIONS.............. 1.03 1.16
====== ======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0001029528
<NAME> HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> FEB-04-1997
<PERIOD-END> MAR-31-1997
<CASH> 0
<SECURITIES> 103,093
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 103,093
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
100,000
<COMMON> 3,093
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 103,093
<SALES> 0
<TOTAL-REVENUES> 1,317
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,317
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,317
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,317
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0001029534
<NAME> HEI PREFERRED FUNDING, LP
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> FEB-04-1997
<PERIOD-END> MAR-31-1997
<CASH> 0
<SECURITIES> 121,286
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,213
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 121,286
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
103,093
<COMMON> 18,193
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 121,286
<SALES> 0
<TOTAL-REVENUES> 1,534
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,534
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,534
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,534
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
