HAWAIIAN ELECTRIC INDUSTRIES CAPITAL TRUST I
10-Q, 2000-05-10
ELECTRIC SERVICES
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<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, 2000

                  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 Securities (TOPrS)      New York Stock Exchange
(and the related guarantee of Hawaiian Electric
Industries, Inc.)


       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, 2000, no common securities of the Registrant were held by
nonaffiliates of the Registrant.

===============================================================================
<PAGE>

                 Hawaiian Electric Industries Capital Trust I
                    Form 10-Q--Quarter ended March 31, 2000


                                     INDEX
<TABLE>
<CAPTION>



                                                                                             Page No.

                        PART I.  FINANCIAL INFORMATION

<S>                                                                                         <C>
Item 1.   Financial statements
          Balance sheets (unaudited) - March 31, 2000 and December 31, 1999.................    1

          Statements of earnings (unaudited) - for the three months ended
            March 31, 2000 and 1999.........................................................    1

          Statements of changes in stockholders' equity (unaudited) -
            for the three months ended March 31, 2000 and 1999..............................    2

          Statements of cash flows (unaudited) - for the three months ended
            March 31, 2000 and 1999.........................................................    2

          Notes to financial statements (unaudited).........................................    3

Item 2.   Management's discussion and analysis of financial condition
            and results of operations.......................................................    4

                               PART II.  OTHER INFORMATION

Item 1.   Legal proceedings.................................................................    5

Item 6.   Exhibits and reports on Form 8-K..................................................    5

Signatures..................................................................................    5

</TABLE>

                                      ii
<PAGE>

                        PART I - FINANCIAL INFORMATION
- -------------------------------------------------------------------------------
Item 1.  Financial statements
- -----------------------------

Hawaiian Electric Industries Capital Trust I
Balance sheets (unaudited)

<TABLE>
<CAPTION>
                                                                      March 31,               December 31,
(in thousands)                                                          2000                      1999
- -----------------------------------------------------------------------------------------------------------
<S>                                                                <C>                       <C>
Assets
- ------

Investment in partnership preferred securities..............             $103,093                  $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                  $100,000

Common securities (8.36% Trust Common Securities;
   123,720 authorized, issued and outstanding;
   $25 liquidation amount per security).....................                3,093                     3,093
                                                                     ------------               -----------
                                                                         $103,093                  $103,093
                                                                     ============               ===========
</TABLE>
Hawaiian Electric Industries Capital Trust I
Statements of earnings (unaudited)
<TABLE>
<CAPTION>
                                                                          Three months ended March 31,
                                                                     --------------------------------------
(in thousands)                                                           2000                      1999
- -----------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                       <C>
Earnings-equity in earnings of HEI Preferred Funding, LP....              $ 2,155                   $ 2,155
Distribution on preferred securities........................               (2,090)                   (2,090)
                                                                     ------------               -----------
Earnings available for common securities....................              $    65                   $    65
                                                                     ============               ===========
</TABLE>


Note:  Hawaiian Electric Industries, Inc. owns all of Hawaiian Electric
       Industries Capital Trust I's common securities. Therefore, per share data
       is not meaningful.

See accompanying notes to financial statements.

                                       1
<PAGE>

Hawaiian Electric Industries Capital Trust I
Statements of changes in stockholders' equity (unaudited)
<TABLE>
<CAPTION>
                                                                            Three months ended March 31,
                                                                      ----------------------------------------
(in thousands)                                                             2000                      1999
- --------------------------------------------------------------------------------------------------------------

<S>                                                                  <C>                       <C>
Preferred securities, beginning and end of period.........               $100,000                  $100,000
                                                                     ------------               -----------
Common securities, beginning and end of period............                  3,093                     3,093
                                                                     ------------               -----------
Retained earnings, beginning of period....................                     --                        --
   Earnings available for common securities...............                     65                        65
   Distribution on common securities......................                    (65)                      (65)
                                                                     ------------               -----------
   Balance, end of period.................................                     --                        --
                                                                     ------------               -----------
Total stockholders' equity................................               $103,093                  $103,093
                                                                     ============               ===========
</TABLE>

Hawaiian Electric Industries Capital Trust I
Statements of cash flows (unaudited)
<TABLE>
<CAPTION>
                                                                            Three months ended March 31,
                                                                      ----------------------------------------
(in thousands)                                                             2000                      1999
- --------------------------------------------------------------------------------------------------------------

<S>                                                                  <C>                       <C>
Cash flows from operating activities
Earnings before distribution on preferred securities......                $ 2,155                   $ 2,155
Equity in earnings of HEI Preferred Funding, LP...........                 (2,155)                   (2,155)
Distribution from HEI Preferred Funding, LP...............                  2,155                     2,155
                                                                     ------------               -----------
Net cash provided by operating activities.................                  2,155                     2,155
                                                                     ------------               -----------
Cash flows from financing activities
Distribution on common securities.........................                    (65)                      (65)
Distribution on preferred securities......................                 (2,090)                   (2,090)
                                                                     ------------               -----------
Net cash used in financing activities.....................                 (2,155)                   (2,155)
                                                                     ------------               -----------
Net change in cash........................................                     --                        --
Cash, beginning of period.................................                     --                        --
                                                                     ------------               -----------
Cash, end of period.......................................           $         --               $        --
                                                                     ============               ===========

</TABLE>

See accompanying notes to financial statements.

                                       2
<PAGE>

Hawaiian Electric Industries Capital Trust I
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
(Unaudited)

- -------------------------------------------------------------------------------

(1)  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. Accordingly, they do not
include all of the information and footnotes required by GAAP for complete
financial statements. The accompanying unaudited financial statements should be
read in conjunction with the financial statements and notes thereto in the
Annual Report of Hawaiian Electric Industries Capital Trust I (the Trust) on SEC
Form 10-K for the year ended December 31, 1999.

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, 2000 and December
31, 1999, and the results of its operations and its cash flows for the three
months ended March 31, 2000 and 1999. All such adjustments are of a normal
recurring nature unless otherwise disclosed in this Form 10-Q or other
referenced material.

                                       3
<PAGE>

Item 2.  Management's discussion and analysis of financial condition and results
- --------------------------------------------------------------------------------
of operations
- -------------

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 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. All of the foregoing activities of
the Trust occurred in or after February 1997.

All expenses of organizing the Trust, carrying out the issuance of its
securities, and conducting its limited activities have been borne by Hawaiian
Electric Industries, Inc. (the Company), either directly or through Hycap
Management, Inc. (Hycap), its wholly owned subsidiary.

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 the filing of a certificate of limited partnership with the
Secretary of State of Delaware on December 23, 1996, which was subsequently
amended by an amended and restated agreement of limited partnership dated as of
February 1, 1997. The Partnership 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 limited partner interests in the
Partnership, to 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
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. 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 Eligible Debt
Securities, and the payment of distributions on the Partnership Preferred
Securities. Hycap is the sole general partner of the Partnership.

For information about the Company (Commission File Number 1-8503), refer to the
Company's periodic reports filed from time to time under the Securities and
Exchange Act of 1934.

                                       4
<PAGE>

                          PART II - OTHER INFORMATION
- --------------------------------------------------------------------------------

Item 1.   Legal proceedings
- ---------------------------

The Registrant knows of no material legal proceedings involving the Trust or its
assets.

Item 6.   Exhibits and reports on Form 8-K
- ------------------------------------------
(a)    Exhibits

Exhibit 12     Computation of ratios of earnings to combined fixed charges and
               preferred securities distributions for the three months ended
               March 31, 2000 and 1999

Exhibit 27     Hawaiian Electric Industries Capital Trust I -- Financial Data
               Schedule March 31, 2000 and three months ended March 31, 2000

(b)    Reports on Form 8-K

None


                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on the 10th day of May, 2000.


                                       HAWAIIAN ELECTRIC INDUSTRIES
                                       CAPITAL TRUST I *


                                       By:    /s/ Robert F. Mougeot
                                              -----------------------
                                       Name:  Robert F. Mougeot
                                       Title: Regular Trustee


                                       By:    /s/ Edwina H. Kawamoto
                                              ------------------------
                                       Name:  Edwina H. Kawamoto
                                       Title: Regular Trustee


* There is no principal executive officer, principal financial officer,
  controller, principal accounting officer or board of directors of the
  Registrant. The Trustees of the Registrant (which include the Regular
  Trustees, the Property Trustee and the Delaware Trustee) together exercise all
  powers and perform all functions with respect to the Registrant.

                                       5

<PAGE>

                                                                      Exhibit 12
                                                                      ----------


Hawaiian Electric Industries Capital Trust I
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED SECURITIES DISTRIBUTIONS
(unaudited)


<TABLE>
<CAPTION>
                                                                            Three months ended March 31,
                                                                      ----------------------------------------
(in thousands)                                                             2000                      1999
- --------------------------------------------------------------------------------------------------------------

<S>                                                                  <C>                       <C>
Earnings................................................                   $2,155                    $2,155
                                                                     ============               ===========

Fixed charges...........................................                   $   --                    $   --
Preferred securities distributions......................                    2,090                     2,090
                                                                     ------------               -----------
Total combined fixed charges and
   preferred securities distributions...................                   $2,090                    $2,090
                                                                     ============               ===========
Ratio of earnings to combined fixed charges and
   preferred securities distributions...................                     1.03                      1.03
                                                                     ============               ===========
</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-31-2000
<PERIOD-START>                             JAN-01-2000
<PERIOD-END>                               MAR-31-2000
<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>                                 2,155
<CGS>                                                0
<TOTAL-COSTS>                                        0
<OTHER-EXPENSES>                                 2,090
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                                     65
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                                 65
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                        65
<EPS-BASIC>                                          0
<EPS-DILUTED>                                        0


</TABLE>



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