HAWAIIAN ELECTRIC CO INC
8-K, 2000-07-26
ELECTRIC SERVICES
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<PAGE>

================================================================================

                                 UNITED STATES
                       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: July 24, 2000


================================================================================

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

================================================================================


                                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. (HEI)
               (808) 543-7771 - Hawaiian Electric Company, Inc. (HECO)

                                     None
         --------------------------------------------------------------
         (Former name or former address, if changed since last report.)

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

Item 5.  Other Events

Forward-looking statements
--------------------------

This current report contains "forward-looking statements", which include
statements which are predictive in nature, which depend upon or refer to future
events or conditions, which include words such as "expects", "anticipates",
"intends", "plans", "believes", "estimates" or similar expressions. In addition,
any statements concerning future financial performance (including future
revenues, earnings or growth rates), ongoing business strategies or prospects
and possible future actions, which may be provided by management, are also
forward-looking statements. Forward-looking statements are based on current
expectations and projections about future events and are subject to risks,
uncertainties and assumptions about Hawaiian Electric Industries, Inc. (HEI) and
its subsidiaries, the performance of the industries in which they do business
and economic and market factors, among other things. These statements are not
guaranties of future performance. Such risks, uncertainties and other important
factors could cause actual results to differ materially from those in the
forward-looking statements and include, but are not limited to, the following:
the effect of international, national and local economic conditions, including
the condition of the Hawaii tourist and construction industries and the Hawaii
housing market; the effects of weather and natural disasters; product demand and
market acceptance risks; increasing competition in the electric utility, banking
and international power industries; capacity and supply constraints or
difficulties; fuel oil price changes; new technological developments;
governmental and regulatory actions, including changes in laws, rules and
regulations applicable to HEI and its subsidiaries, decisions in rate cases and
on permitting issues and changes in taxation; the results of financing efforts;
the timing and extent of changes in interest rates; the timing and extent of
changes in foreign currency exchange rates; the convertibility and availability
of foreign currency; the availability and pricing of forward contracts;
political and business risks inherent in doing business in developing countries;
the risks associated with the installation of new computer systems; the risk
that ASB Realty Corporation fails to qualify as a real estate investment trust
for federal income tax purposes, in which case it would be subject to regular
corporate income taxation; and other risks or uncertainties described elsewhere
in this current report and in other periodic reports previously and subsequently
filed by HEI and/or Hawaiian Electric Company, Inc. with the Securities and
Exchange Commission.

Forward-looking statements speak only as of the date of this current report.



News release
------------

On July 24, 2000, Hawaiian Electric Industries, Inc. (HEI) issued the following
news release:

HAWAIIAN ELECTRIC INDUSTRIES, INC. REPORTS SECOND QUARTER 2000 EARNINGS

     HONOLULU -- Hawaiian Electric Industries, Inc. (NYSE - HE) today reported
net income for the three months ended June 30, 2000 of $19.1 million, or 59
cents per share, compared with $22.8 million, or 71 cents per share, in the same
quarter of 1999. For the six months ended June 30, 2000, net income was $48.1
million, or $1.49 per share, compared with $43.5 million, or $1.35 per share, in
the same period last year.

     "We had a disappointing second quarter. Earnings were down primarily due to
a loss in our international power group. However, results at our utilities and
savings bank continue to benefit from Hawaii's improving economy. Utility net
income was up 25% mainly due to higher kilowatthour sales and lower other
operation expenses when compared to the same quarter last year. In addition, net
income at our savings bank was up 4%," said Robert F. Clarke, HEI chairman,
president and chief executive officer.

                                       1
<PAGE>

     Electric utility net income during the quarter was $24.0 million versus
$19.2 million in the same quarter last year. Net income for the six months was
$47.7 million versus $36.3 million in the same period of 1999.

     Kilowatthour sales increased by 2% during the quarter compared to the same
quarter last year. Hawaii visitor days were up 11% and 9% in April and May 2000,
respectively, compared to the same months in 1999.

     Savings bank net income in the second quarter was $9.4 million compared to
$9.1 million in the same quarter last year. Net income for the six months was
$20.6 million versus $17.6 million in the same period of 1999.

     The bank's average earning assets were up 6% compared to the same quarter
of last year. The bank's interest rate spread - the difference between the yield
on earning assets and the cost of funds - was 3.18% in the recent quarter versus
3.21% in the same quarter of 1999.

     The net loss for the international power operation during the quarter was
$8.8 million compared to $1.4 million in the same quarter last year. The net
loss for the six months was $9.7 million versus $2.2 million in the same period
of 1999.

     The higher net loss this quarter is primarily attributable to results from
the investment in East Asia Power Resources Corporation (EAPRC), a Philippine
power company. An effective 46% interest in EAPRC was acquired from El Paso
Energy International in early March 2000. Higher fuel oil prices and the
weakened value of the Philippine peso negatively impacted EAPRC results.

     The financial results of HEI's other subsidiaries and the corporate parent
this quarter reflect a larger net loss than during the same period last year due
to higher interest expense at the corporate parent.

     HEI is a diversified holding company. Its core businesses are electric
utilities, a savings bank and an international power subsidiary.


                                       2
<PAGE>
Hawaiian Electric Industries, Inc. and subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)

<TABLE>
<CAPTION>

                                                    Three months                        Six months                    Twelve months
(in thousands,                                    ended June 30,                     ended June 30,                   ended June 30,
    except per share amounts)               2000            1999               2000           1999            2000             1999
------------------------------------------------------------------------------------------------------------------------------------

Revenues
<S>                                    <C>            <C>               <C>            <C>             <C>              <C>
Electric utility                       $ 307,845      $  252,272        $ 597,250      $ 490,063       $ 1,162,391      $ 1,003,536
Savings bank                             108,699         101,759          218,966        202,039           426,840          408,827
International power                       (3,950)          1,332           (2,285)         2,324              (145)           4,741
Other                                        542          14,325            1,080         27,509            27,280           54,473
                                   -------------- ---------------   -------------- --------------   --------------- ----------------
                                         413,136         369,688          815,011        721,935         1,616,366        1,471,577
                                   -------------- ---------------   -------------- --------------   --------------- ----------------
Expenses
Electric utility                         256,230         207,936          494,005        404,826           969,669          825,108
Savings bank                              92,384          85,970          183,461        171,119           361,903          352,938
International power                        4,482           2,828            6,597          4,436            11,356            8,404
Other                                      2,914          14,244            5,620         28,812            26,981           58,314
                                   -------------- ---------------   -------------- --------------   --------------- ----------------
                                         356,010         310,978          689,683        609,193         1,369,909        1,244,764
                                   -------------- ---------------   -------------- --------------   --------------- ----------------
Operating income (loss)
Electric utility                          51,615          44,336          103,245         85,237           192,722          178,428
Savings bank                              16,315          15,789           35,505         30,920            64,937           55,889
International power                       (8,432)         (1,496)          (8,882)        (2,112)          (11,501)          (3,663)
Other                                     (2,372)             81           (4,540)        (1,303)              299           (3,841)
                                   -------------- ---------------   -------------- --------------   --------------- ----------------
                                          57,126          58,710          125,328        112,742           246,457          226,813
                                   -------------- ---------------   -------------- --------------   --------------- ----------------
Interest expense--
    other than savings bank              (20,156)        (19,000)         (39,228)       (36,888)          (74,971)         (71,668)
Allowance for borrowed funds
    used during construction                 722             599            1,413          1,239             2,750            3,835
Preferred stock dividends of
     subsidiaries                           (506)           (499)          (1,004)        (1,126)           (2,013)          (4,123)
Preferred securities distributions of
    trust subsidiaries                    (4,009)         (4,008)          (8,018)        (8,007)          (16,036)         (14,372)
Allowance for equity funds
    used during construction               1,328             987            2,597          2,026             4,799            6,490
                                   -------------- ---------------   -------------- --------------   --------------- ----------------
Income from continuing operations
    before income taxes                   34,505          36,789           81,088         69,986           160,986          146,975
Income taxes                              15,409          14,033           33,016         26,476            63,530           54,577
                                   -------------- ---------------   -------------- --------------   --------------- ----------------
Income from continuing operations         19,096          22,756           48,072         43,510            97,456           92,398
                                   -------------- ---------------   -------------- --------------   --------------- ----------------
Discontinued operations, net of income taxes
    Loss from operations
                                               -               -                -              -                 -          (12,474)
    Net gain on disposals
                                               -               -                -              -             3,953            3,781
                                   -------------- ---------------   -------------- --------------   --------------- ----------------
Gain (loss) from discontinued operations
                                               -               -                -              -             3,953           (8,693)
                                   -------------- ---------------   -------------- --------------   --------------- ----------------
Net income                             $  19,096      $   22,756        $  48,072      $  43,510       $   101,409      $    83,705
                                   =============  ==============   ============== ==============   =============== ================
Per common share
    Basic earnings (loss)
         Continuing operations         $    0.59      $     0.71        $    1.49      $    1.35       $     3.02       $     2.88
         Discontinued operations
                                               -               -                -              -              0.12           (0.27)
                                   -------------- ---------------   -------------- --------------   --------------- ----------------
                                       $    0.59      $     0.71        $    1.49      $    1.35       $     3.14       $     2.61
                                   ============= ===============   ============== ==============   =============== ================
    Diluted earnings (loss)
         Continuing operations         $    0.59      $     0.71        $    1.48      $    1.35       $     3.01       $     2.87
         Discontinued operations
                                               -               -                -              -              0.12            (0.27)
                                   ------------- ---------------   -------------- --------------   --------------- ----------------
                                       $    0.59      $     0.71        $    1.48      $    1.35       $      3.13      $      2.60
                                   ============= ===============   ============== ==============   =============== ================
    Dividends                          $    0.62      $     0.62        $    1.24      $    1.24       $      2.48      $      2.48
                                   ============= ===============   ============== ==============   =============== ================
Weighted-average number of
    common shares outstanding             32,403          32,183           32,335         32,168            32,271           32,106
                                   ============= ===============   ============== ==============   =============== ================
Adjusted weighted-average shares          32,542          32,275           32,457         32,266            32,396           32,227
                                   ============= ===============   ============== ==============   =============== ================

Income (loss) from continuing operations by segment
    Electric utility                   $  24,014      $  19,224         $ 47,739       $ 36,305        $   86,656       $   79,130
    Savings bank                           9,396          9,057           20,617         17,582            38,447           32,133
    International power                   (8,794)        (1,437)          (9,715)        (2,226)          (12,578)          (4,155)
    Other                                 (5,520)        (4,088)         (10,569)        (8,151)          (15,069)         (14,710)
                                   ------------- ---------------   -------------- --------------   --------------- ----------------
Income from continuing operations      $  19,096      $   22,756        $ 48,072       $ 43,510        $   97,456       $   92,398
                                   ============= ===============   ============== ==============   =============== ================
</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, 1999 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, 2000 and June 30, 2000
(when filed).

     Results of operations for interim periods are not necessarily indicative of
results to be expected for future interim periods or the full year.


                          ###(End of news release)###

                                       3
<PAGE>

Private placement of subsidiary preferred stock
-----------------------------------------------

It is anticipated that American Savings Bank, F.S.B. (ASB) will resell, in a
private placement currently scheduled for early August of 2000, 60 shares of the
Series B Preferred Stock of its subsidiary, ASB Realty Corporation. These shares
have an aggregate liquidation preference of $60 million and the proceeds of the
sale will be used by ASB to make or purchase additional loans and to purchase
mortgage/asset-backed securities and other assets. A preliminary offering
memorandum with respect to the private placement of this preferred stock is
expected to be circulated to qualified institutional buyers on or about July 28,
2000. The following portions of this Form 8-K provide certain financial
information for HEI and its subsidiaries for the second quarter and the six
months ended June 30, 2000, and other updated information, which is intended to
be included in the preliminary offering memorandum in advance of the filing by
HEI and HECO of their jointly-filed Form 10-Q for the quarter ended June 30,
2000.


                                      HEI

  The following is a brief summary of certain information regarding HEI. This
summary should be read in conjunction with the detailed information about HEI
and its subsidiaries contained in the periodic reports it has filed with the
Commission under the Exchange Act, including its audited and unaudited
consolidated financial statements and related notes.

General

  HEI was incorporated in 1981 under the laws of the State of Hawaii and is a
holding company with subsidiaries engaged in the electric utility, savings bank
and other businesses operating primarily in the State of Hawaii, and in
independent power and integrated energy services projects in Asia and the
Pacific. HEI's predecessor, HECO, was incorporated under the laws of the Kingdom
of Hawaii (now the State of Hawaii) on October 13, 1891. As a result of a 1983
corporate reorganization, HECO became an HEI subsidiary and common shareholders
of HECO became common shareholders of HEI.

  As of December 31, 1999, HEI had consolidated assets of $8.3 billion. HEI had
$1.5 billion in consolidated revenues and net income from continuing operations
of $92.9 million for the year ended December 31, 1999 compared with $94.6
million for the year ended December 31, 1998. Net income amounted to $96.8
million for 1999 compared with $84.8 million for year ended December 31, 1998.
In 1999, HEI reversed $4.0 million of a reserve established in 1998 for the
discontinuance of its residential real estate operation. In 1998, the after-tax
loss recorded for the discontinuance of its residential real estate operation
was offset in part by an after-tax gain from the settlement of HEI's claims
against three insurance carriers. In 1999, utility kilowatthour sales were up.
However, due to increases in maintenance and depreciation expenses, utility
earnings were down 7% for the year. Electric utility net income in 1999 amounted
to $75.2 million compared with $80.8 million in 1998. Kilowatthour sales for the
year were 1% higher than in 1998. The Bank reported net income available for
common stockholder of $35.4 million in 1999 compared with $30.3 million in 1998.
The Bank's earnings were up 17% primarily due to higher net interest income
resulting from a higher volume of business and an improved interest rate spread.
HEIPC reported a net loss of $5.1 million in 1999 compared with a $4.0 million
net loss in 1998, reflecting higher business development expenses.

  HEI had consolidated revenues of $413.1 million and net income of $19.1
million for the quarter ended June 30, 2000 compared to consolidated revenues of
$369.7 million and net income of $22.8 million for the quarter ended June 30,
1999. The increase in revenues was primarily due to increases for the electric
utility and savings bank segments, partially offset by decreases for the
international power and "other" segments. The decrease in net income was
primarily due to the increase in the net loss of the international power
segment. The electric utilities had 22% higher revenues primarily due to

                                       4
<PAGE>

higher fuel oil and purchased energy prices, the effects of which are passed on
to customers, and 2.1% higher kilowatthour sales. The electric utilities' 25%
increase in net income (from $19.2 million in the second quarter of 1999 to
$24.0 million in the second quarter of 2000) was primarily due to the higher
kilowatthour sales and lower other operation expenses (including lower
retirement benefits expenses), partially offset by higher depreciation expense.
The Bank had 7% higher revenues primarily due to higher interest income as a
result of higher weighted-average yields on MABS and loan balances and a 6%
higher average interest-earning asset balance. The Bank's 4% increase in net
income available for common stockholder (from $9.1 million in the second quarter
of 1999 to $9.4 million in the second quarter of 2000) was primarily due to
higher net interest income, partially offset by the impact of reclassifying four
debt securities from "held-to-maturity" status to "available-for-sale" status.
Although the Bank's interest rate spread declined to 3.18% in the second quarter
of 2000 from 3.21% in the same quarter of 1999, the Bank's net interest income
increased due to higher average earning assets. The Bank realized a net loss of
$2.1 million to record the reclassified securities at their estimated fair value
and a net loss of $1.2 million to reverse the related interest accrual. The
international power segment's net loss for the quarter ended June 30, 2000 was
$8.8 million compared to $1.4 million for the same period in 1999. See "--
Philippines Investment." The "other" segment had 96% lower revenues primarily
due to the sale by Hawaiian Tug & Barge Corp. ("HTB") of the stock of its
subsidiary, Young Brothers, Limited ("YB"), and substantially all of HTB's
operating assets for a nominal gain in November 1999. Higher interest expense
resulting from higher average borrowings due to the HEIPC Group's $87.0 million
investment in the Philippines in March 2000 also contributed to the higher net
loss.

  HEI had consolidated revenues of $815.0 million and net income of $48.1
million for the six months ended June 30, 2000 compared to consolidated revenues
of $721.9 million and net income of $43.5 million for the six months ended June
30, 1999. The increase in revenues and net income was primarily due to increases
for the electric utility and savings bank segments, partially offset by
decreases for the international power and "other" segments. The electric
utilities had 22% higher revenues primarily due to higher fuel oil and purchased
energy prices, the effects of which are passed on to customers, and 2.6% higher
kilowatthour sales. The electric utilities' 31% increase in net income (from
$36.3 million in the first half of 1999 to $47.7 million in the first half of
2000) was primarily due to the higher kilowatthour sales and lower other
operation and maintenance expenses (including lower retirement benefits
expenses), partially offset by higher depreciation expense. The Bank had 8%
higher revenues primarily due to higher interest income as a result of higher
weighted-average yields on MABS and loan balances and a 5% higher average
interest-earning asset balance. The Bank's 17% increase in net income available
for common stockholder (from $17.6 million in the first half of 1999 to $20.6
million in the first half of 2000) was primarily due to higher net interest
income, partly offset by lower other income and higher income taxes. The Bank's
interest rate spread was 3.19% in the first half of 2000 compared to 3.14% in
the first half of 1999. The international power segment's net loss for the six
months ended June 30, 2000 was $9.7 million compared to $2.2 million for the
same period in 1999. See "--Philippines Investment." Due to losses attributed to
this investment, HEI expects its consolidated earnings for 2000 to be lower than
consolidated earnings for 1999. The "other" segment had 96% lower revenues
primarily due to HTB's sale of YB and substantially all of its operating assets
for a nominal gain in November 1999. The higher consolidated operating income
due to the electric utility and savings bank segments for the six months ended
June 30, 2000 compared to the same period in 1999 was partially offset by higher
interest expense resulting from higher average borrowings due to the HEIPC
Group's $87.0 million investment in the Philippines in March 2000.

  HEI will not be responsible or otherwise obligated for the payment of
dividends or the liquidation preference with respect to the Series B Preferred
Shares (or, upon the occurrence of an Exchange Event, the Bank B Preferred
Shares). HEI will enter into an Undertaking, however, in which it will make
certain covenants for the benefit of the holders from time to time of the Series
B Preferred Shares (and, upon the occurrence of an Exchange Event, the Bank B
Preferred Shares). See "Description of Series B Preferred Shares--Certain
Covenants of HEI."

                                       5
<PAGE>

  The principal executive offices of HEI are located at 900 Richards Street,
Honolulu, Hawaii 96813 and its telephone number is (808) 543-5662.
Operating Companies Other than the Bank and its Subsidiaries

  HECO and its operating subsidiaries, MECO and HELCO, are regulated public
electric utilities providing the only public electric utility service on the
islands of Oahu, Maui, Lanai, Molokai and Hawaii.

  Besides HECO and its subsidiaries, HEI also owns directly or indirectly
several additional active subsidiaries, the principal ones of which are the
following: HEIDI, which currently is only a holding company of the Bank and its
subsidiaries, including the Company; HEIPC and its subsidiaries; and, prior to
November 11, 1999, Hawaiian Tug & Barge Corp. and its subsidiary.

  HEIPC was formed in 1995 to pursue, directly or through its subsidiaries or
affiliates, independent power and integrated energy services projects in Asia
and the Pacific. A subsidiary of HEIPC operates generating units at a facility
in Guam and another subsidiary has a 75% interest in a joint venture to
construct and operate a 200 megawatts ("MW") (net) coal-fired power plant in
China. HEIPC also has invested $9.7 million to acquire cumulative
nonparticipating 8% preferred shares and 5% of the outstanding common stock of
CEPALCO, an electric distribution company in the Philippines, and in March 2000
made an additional $87.0s million investment in the Philippines. See "--China
Project" and "--Philippines Investment".

  On November 10, 1999, HTB's name changed to The Old Oahu Tug Service, Inc. HTB
was acquired in 1986 and provided ship assist and charter towing services and
owned YB, a regulated intrastate public carrier of waterborne freight among the
Hawaiian Islands. On November 10, 1999, HTB sold substantially all of its
operating assets and all of the capital stock of YB for a nominal gain.

China Project

  In 1998 and 1999, the HEIPC Group acquired what is now a 75% interest in a
joint venture, Baotou Tianjiao Power Co., Ltd., formed to design, construct,
own, operate and manage a 200 MW (net) coal-fired power plant to be located in
Inner Mongolia, People's Republic of China. The power plant is being built
"inside the fence" for Baotou Iron & Steel (Group) Co., Ltd. ("Baotou Steel").
The project has received approval from both the National and Inner Mongolia
governments. Construction had commenced and the first of the two units had been
expected to be online by early 2001, and the second six months later. However,
the Inner Mongolia Power Company ("IMPC"), which owns and operates the
electricity grid in Inner Mongolia, has refused to enter into an interconnection
arrangement with the joint venture. The HEIPC Group does not believe that it is
prudent to continue construction without an interconnection arrangement whose
terms are consistent with the project as approved by the National and Inner
Mongolia governments. Under the power purchase contract between the joint
venture and Baotou Steel, it is Baotou Steel's responsibility to secure an
interconnection arrangement with IMPC. The HEIPC Group continues to work with
Baotou Steel and IMPC to secure a satisfactory interconnection arrangement. If
such an arrangement is not obtained, the HEIPC Group intends to withdraw from
the project (including the HEIPC Group's commitment to invest up to an
additional $86 million toward the project, subject to certain conditions) and
seek recovery of its investment of approximately $25 million to date. HEI's
management cannot predict the outcome of such efforts, nor estimate its
impairment loss, if any, at this time. HEI's financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

Philippines Investment

  On March 7, 2000, an indirect subsidiary of HEIPC acquired a 50% interest in
El Paso Philippines Holding Company, Inc. ("EPHC"), an indirect subsidiary of El
Paso Energy Corporation ("EPEC"), for $87 million plus up to an additional $6
million of payments that are contingent upon future earnings of East Asia Power
Resources Corporation ("EAPRC") and its subsidiaries (the "EAPRC Group").

                                       6
<PAGE>

EPHC owns approximately 91.7% of the common shares of EAPRC, a Philippines
holding company primarily engaged in the electric generation business in Manila
and Cebu through its direct and indirect subsidiaries, using land and barge-
based generating facilities fired by bunker fuel oil, with total installed
capacity of approximately 390 MW. In connection with and subsequent to the HEIPC
Group's investment in EPHC, HEI has guaranteed up to $35 million of existing and
potential obligations related to this investment and has approved an indemnity
of up to approximately $16 million related to title issues on real property
securing a debt of two EAPRC subsidiaries.

  The HEIPC Group recorded a $9.7 million net loss for the six months ended June
30, 2000, compared with a $2.2 million net loss in the same period in 1999. The
HEIPC Group's net loss for the quarter ended June 30, 2000 was $8.8 million
compared to $1.4 million for the same period in 1999. The higher net losses are
primarily attributable to results from the HEIPC Group's indirect investment in
EAPRC. The HEIPC Group accounts for its investment in EPHC under the equity
method of accounting. The accounts of the HEIPC Group are consolidated by HEI on
a one-month lag due to the time needed to consolidate HEIPC's subsidiaries. The
$9.7 million net loss for the six months ended June 30, 2000 thus reflects
results of the HEIPC Group's operations for the months of December 1999 and
January through May 2000 and the $8.8 million net loss for the quarter ended
June 30, 2000 thus reflects results for the months of March, April and May 2000.

  Higher fuel oil prices and the weakened value of the Philippine peso were the
primary causes of the losses incurred by the EAPRC Group for the second quarter
of 2000. The EAPRC Group is implementing strategies to reduce its exposure to
fuel oil price fluctuations and evaluating strategies to reduce its exposure to
foreign currency fluctuations.

  The rates charged by the EAPRC Group under its purchase power agreements are
generally at a discount to the rates charged by the National Power Corporation,
a government owned and controlled corporation of the Philippines. Most of the
fluctuation in fuel oil prices is not recovered in rates charged by the EAPRC
Group. The EAPRC Group's average price of fuel oil per metric ton for March,
April, May and June 2000 was approximately $143, $170, $153 and $175,
respectively. To reduce its near-term exposure to higher fuel oil prices, the
EAPRC Group has purchased nondeliverable forward contracts for fuel oil at an
average price of $155 per metric ton for approximately 80% of its anticipated
purchases from August 1 to December 31, 2000.

  As of June 30, 2000, the EAPRC Group had approximately $200 million in U.S.
dollar denominated debt. From March 7, 2000 (acquisition date) to May 31, 2000,
the high and low Philippine peso exchange rate was PhP40.823 = $1 and PhP43.250
= $1, respectively, a 6% fluctuation. Due to the deterioration of the exchange
rate from March 7 to May 31, 2000, as of June 30, 2000 the HEIPC Group incurred
a loss of approximately $3 million related to the EAPRC Group's U.S. dollar
denominated debt position. As of July 18, 2000, the exchange rate had further
deteriorated to PhP44.600 = $1.

  Based on prevailing and hedged fuel oil prices and trends in currency exchange
rates, management expects that the HEIPC Group will incur net losses for the
remainder of 2000.

                                       7
<PAGE>

                                   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/ Curtis Y. Harada                       /s/ Paul Oyer
--------------------------------           ----------------------------
Curtis Y. Harada                           Paul A. Oyer
Controller                                 Financial Vice President and
                                             Treasurer of HECO
(Principal Accounting Officer of HEI)      (Principal Financial Officer of HECO)

Date:  July 26, 2000                       Date:  July 26, 2000

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