<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 16, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
Exact Name of Registrant Commission I.R.S. Employer
as Specified in Its Charter File Number Identification No.
- ---------------------------------------- ----------- ------------------
Hawaiian Electric Industries, Inc. 1-8503 99-0208097
Hawaiian Electric Company, Inc. 1-4955 99-0040500
</TABLE>
State of Hawaii
----------------------------------------------
(State or other jurisdiction of incorporation)
900 Richards Street, Honolulu, Hawaii 96813
----------------------------------------------------------------
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(808) 543-5662 - Hawaiian Electric Industries, Inc.
(808) 543-7771 - Hawaiian Electric Company, Inc.
None
--------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 5. OTHER EVENTS
On October 16, 1997, HEI issued the following news release:
HONOLULU -- Hawaiian Electric Industries, Inc. (HEI) (NYSE - HE) reported net
income for the three months ended September 30, 1997 of $24.1 million, or 77
cents per share, compared to $17.4 million, or 57 cents per share, in the same
period of 1996. Excluding a nonrecurring charge by the company's savings bank
subsidiary for a special assessment on thrifts by the Federal Deposit Insurance
Corporation (FDIC), net income for the third quarter of 1996 would have been
$25.7 million, or 84 cents per share.
For the nine months ended September 30, 1997 net income was $63.6 million, or
$2.04 per share, compared with $57.6 million, or $1.91 per share, in the same
period last year. Excluding the FDIC special assessment, 1996 year-to-date net
income would have been $65.9 million, or $2.18 per share.
"Tough economic conditions in Hawaii dampened our utilities' kilowatthour sales
this quarter," said Robert F. Clarke, HEI president and chief executive officer.
"Our savings bank continues to perform well despite difficult market conditions
and is close to concluding its purchase of Bank of America's Hawaii operations."
Kilowatthour sales for the quarter and nine months were down 0.3% and 0.5%,
respectively, from the same periods of 1996. Hawaii's tourism industry saw a
0.9% decrease in visitor arrivals in Hawaii through August compared with the
same period of 1996, which impacted kilowatthour sales for the quarter and first
nine months. In addition, cooler temperatures on Oahu through September resulted
in lower residential and commercial air conditioning usage.
Electric utility operating income during the quarter declined 4% to $48.1
million compared with $50.1 million in the same quarter of 1996. Operating
income for the nine months was $127.1 million versus $132.2 million in the same
period last year. In addition to lower kilowatthour sales, higher maintenance
costs and depreciation from plant additions also contributed to the decline in
year-to-date operating income. The recent twelve month return on average common
equity for the Oahu utility declined to 10.0% compared to 11.5% for the twelve
months ended September 30, 1996.
HEI's savings bank subsidiary reported a 21% increase in operating income to
$11.8 million for the quarter compared with $9.8 million in the same quarter of
1996, excluding the nonrecurring FDIC assessment. Operating income for the nine
months was $36.4 million versus $30.0 million in the same period last year
without the FDIC assessment. Results in 1997 are up due to increased net
interest income, lower deposit insurance premiums and expense controls, partly
offset by larger additions to the provision for loan losses. The bank's interest
rate spread -- the difference between the yield on earning assets and cost of
funds -- was 2.96% for the nine months versus 2.80% in the same period last
year. The bank's year-to-date average earning assets were up 5% from the same
period of 1996.
In May 1997, American Savings Bank signed a definitive agreement to acquire
substantially all of the Hawaii deposits of Bank of America and most of its
branches and its Hawaii-based loans. "We are pleased that regulatory review of
the acquisition is proceeding smoothly," Clarke said. "Subject to all conditions
being met, the acquisition looks like it will close by the end of this year. At
closing, we expect to incur acquisition related expenses of approximately $1.9
million after tax."
HEI's real estate development subsidiary has been negatively impacted by the
soft Hawaii real estate market. This quarter, the company took a $2.5 million
noncash after-tax charge on its investment in a real estate project, which was
mostly offset by an investment gain recognized by HEI's passive investment
company. Last week, HEI's maritime freight transportation subsidiary received a
final decision and order from the Hawaii Public Utilities Commission in its 1997
general rate case. The order authorized a 4.7%, or $1.7 million increase in
annual revenues, based on a 14.1% return on average common equity.
1
<PAGE>
Hawaiian Electric Industries, Inc. is a diversified holding company that
delivers essential services to the people of Hawaii. Its core businesses are
electric utilities and a savings bank. Other smaller businesses include maritime
freight transportation, residential real estate development and passive
investments. A subsidiary was formed in 1995 to pursue independent power
projects in Asia and the Pacific.
NOTE: THIS REPORT AND OTHER PRESENTATIONS MADE BY HEI AND ITS SUBSIDIARIES
CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE
EXCHANGE ACT. EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS
SET FORTH ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE CERTAIN RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN
THE FORWARD-LOOKING STATEMENTS. POTENTIAL RISKS AND UNCERTAINTIES INCLUDE, BUT
ARE NOT LIMITED TO, SUCH FACTORS AS THE EFFECT OF ECONOMIC CONDITIONS; PRODUCT
DEMAND AND MARKET ACCEPTANCE RISKS; COMPETITIVE PRODUCTS AND PRICING; CAPACITY
AND SUPPLY CONSTRAINTS OR DIFFICULTIES; NEW TECHNOLOGICAL DEVELOPMENTS;
GOVERNMENTAL AND REGULATORY ACTIONS; ACTUAL PURCHASES UNDER AGREEMENTS; THE
RESULTS OF FINANCING EFFORTS; THE TIMING AND EXTENT OF CHANGES IN INTEREST
RATES; THE FINAL PURCHASE PRICE AND RELATED ADJUSTMENTS MADE PURSUANT TO THE
BANK OF AMERICA, FSB - HAWAII OPERATIONS PURCHASE AND ASSUMPTION AGREEMENT; AND
THE RESULTS OF INTEGRATION OF THE BANK OF AMERICA, FSB - HAWAII OPERATIONS WITH
THE OPERATIONS OF ASB. INVESTORS ARE ALSO DIRECTED TO CONSIDER OTHER RISKS AND
UNCERTAINTIES DISCUSSED IN OTHER PERIODIC REPORTS PREVIOUSLY AND SUBSEQUENTLY
FILED BY HEI AND/OR HAWAIIAN ELECTRIC COMPANY, INC. WITH THE SECURITIES AND
EXCHANGE COMMISSION.
<TABLE>
Hawaiian Electric Industries, Inc. and subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
<CAPTION>
Three months Nine months Twelve months
(in thousands, except ended September 30, ended September 30, ended September 30,
per share amounts) 1997 1996 1997 1996 1997 1996
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
REVENUES
Electric utility $282,234 $284,417 $ 831,314 $ 797,241 $1,114,941 $1,047,050
Savings bank 71,625 68,281 210,211 200,351 281,262 269,494
Other 13,262 15,460 45,042 43,978 59,366 57,898
-------- -------- ---------- ---------- ---------- ----------
367,121 368,158 1,086,567 1,041,570 1,455,569 1,374,442
-------- -------- ---------- ---------- ---------- ----------
EXPENSES
Electric utility 234,089 234,285 704,179 664,995 946,439 880,144
Savings bank 59,778 58,461 173,843 170,373 234,816 229,229
FDIC special assessment* -- 13,835 -- 13,835 -- 13,835
Other 16,942 16,834 52,711 49,477 73,124 67,734
-------- -------- ---------- ---------- ---------- ----------
310,809 323,415 930,733 898,680 1,254,379 1,190,942
-------- -------- ---------- ---------- ---------- ----------
OPERATING INCOME (LOSS)
Electric utility 48,145 50,132 127,135 132,246 168,502 166,906
Savings bank 11,847 (4,015) 36,368 16,143 46,446 26,430
Other (3,680) (1,374) (7,669) (5,499) (13,758) (9,836)
-------- -------- ---------- ---------- --------- ----------
56,312 44,743 155,834 142,890 201,190 183,500
-------- -------- ---------- ---------- --------- ----------
</TABLE>
2
<PAGE>
<TABLE>
Hawaiian Electric Industries, Inc. and subsidiaries
CONSOLIDATED STATEMENTS OF INCOME (continued)
(unaudited)
<CAPTION>
Three months Nine months Twelve months
(in thousands, except ended September 30, ended September 30, ended September 30,
per share amounts) 1997 1996 1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest expense--
electric utility
and other (15,929) (16,060) (48,074) (48,309) (65,597) (64,771)
Allowance for borrowed
funds used during
construction 1,522 1,098 4,658 3,602 6,918 4,882
Preferred stock
dividends of electric
utility subsidiaries (1,563) (1,667) (4,697) (5,008) (6,218) (6,710)
Preferred securities
distributions of
trust subsidiaries (3,064) -- (7,503) -- (7,503) --
Allowance for equity
funds used during
construction 2,654 2,399 8,079 7,197 12,623 9,824
-------- -------- -------- -------- ------- --------
INCOME BEFORE
INCOME TAXES 39,932 30,513 108,297 100,372 141,413 126,725
Income taxes 15,794 13,141 44,701 42,768 56,763 53,506
-------- -------- -------- -------- -------- --------
NET INCOME $ 24,138 $ 17,372 $ 63,596 $ 57,604 $ 84,650 $ 73,219
======== ======== ======== ======== ======== ========
Per common share
Earnings $ 0.77 $ 0.57 $ 2.04 $ 1.91 $ 2.72 $ 2.44
======== ======== ======== ======== ======== ========
Dividends $ 0.61 $ 0.60 $ 1.83 $ 1.80 $ 2.44 $ 2.40
======== ======== ======== ======== ======== ========
Book value
(end of period) $ 25.35 $ 24.89
======== ========
Market price
(end of period) $ 37.44 $ 34.13
======== ========
Weighted average
number of common
shares outstanding 31,528 30,465 31,244 30,178 31,108 30,025
======== ======== ======== ======== ======== ========
</TABLE>
* On September 30, 1996, President Clinton signed the omnibus appropriations
bill, which included a special one-time assessment by the Federal Deposit
Insurance Corporation (FDIC) on all deposits insured by the Savings
Association Insurance Fund held as of March 31, 1995. ASB's assessment was
$8.3 million after-tax and was accrued in September 1996.
3
<PAGE>
<TABLE>
<CAPTION>
Hawaiian Electric Industries, Inc. and subsidiaries
CONSOLIDATED STATEMENTS OF INCOME (continued)
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
Three months Nine months Twelve months
(in thousands, except ended September 30, ended September 30, ended September 30,
per share amounts) 1997 1996 1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------
NET INCOME EXCLUDING
FDIC SPECIAL
ASSESSMENT $24,138 $25,705 $63,596 $65,937 $84,650 $81,552
======= ======= ======= ======== ======= =========
EARNINGS PER COMMON SHARE
EXCLUDING FDIC
SPECIAL ASSESSMENT $0.77 $0.84 $2.04 $2.18 $2.72 $2.72
======= ======= ======= ======= ======= =========
</TABLE>
This information should be read in conjunction with the consolidated financial
statements and the notes thereto incorporated by reference in HEI's Annual
Report on SEC Form 10-K for the year ended December 31, 1996 and the
consolidated financial statements and the notes thereto in HEI's Quarterly
Report on SEC Form 10-Q for the quarters ended March 31, 1997, June 30, 1997 and
September 30, 1997 (when filed).
Results of operations for interim periods are not necessarily indicative of
results to be expected for the full year.
SIGNATURES
Pursuant to the requirements 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. The signature of the undersigned
companies shall be deemed to relate only to matters having reference to such
companies and any subsidiaries thereof.
HAWAIIAN ELECTRIC INDUSTRIES, INC. HAWAIIAN ELECTRIC COMPANY, INC.
(Registrant) (Registrant)
/s/ Robert F. Mougeot /s/ Ernest T. Shiraki
- --------------------------------- ------------------------------------
Robert F. Mougeot Ernest T. Shiraki
Financial Vice President and Controller of HECO
Chief Financial Officer of HEI (Principal Accounting Officer of HECO)
(Principal Financial Officer of HEI)
Date: October 16, 1997 Date: October 16, 1997
4
