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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: January 24, 2000
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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
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State of Hawaii
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(State or other jurisdiction of incorporation)
900 Richards Street, Honolulu, Hawaii 96813
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(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
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
On January 24, 2000, HEI issued the following news release:
HAWAIIAN ELECTRIC INDUSTRIES, INC. REPORTS 1999 EARNINGS
HONOLULU -- Hawaiian Electric Industries, Inc. (NYSE - HE) today reported
net income from continuing operations of $92.9 million, or $2.89 per share, for
1999 compared with $94.6 million, or $2.96 per share, for 1998.
"Earnings from continuing operations were slightly down in 1999. However,
our utilities and savings bank had a strong fourth quarter. We continue to see
signs that Hawaii's economy is slowly improving. In fact, as of September, the
state's leading economic indicator has risen for six consecutive months, " said
Robert F. Clarke, HEI chairman, president and chief executive officer.
Net income amounted to $96.8 million, or $3.01 per share, for 1999 compared
with $84.8 million, or $2.65 per share for 1998. In 1999, the Company 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.
"This year utility sales were up. However, due to increases in maintenance
and depreciation expenses, utility earnings were down 7% for the year.
Meanwhile, savings bank earnings were up 17% primarily due to higher net
interest income resulting from an improved interest rate spread " said Clarke.
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.
HEI's savings bank subsidiary reported net income of $35.4 million in 1999
compared with $30.3 million in 1998. The bank's interest rate spread - the
difference between the yield on earning assets and cost of funds - was 3.19% in
1999 versus 3.11% in 1998.
HEI's international power subsidiary 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.
On November 10, 1999, HEI closed its sale of Young Brothers, Limited and
most of the assets of Hawaiian Tug & Barge Corp. to Saltchuk Resources, Inc. of
Seattle, Washington. HEI recovered its investment on the sale.
HEI is a diversified holding company. Its core businesses are electric
utilities, a savings bank and an international power subsidiary.
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Hawaiian Electric Industries, Inc. and subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
<TABLE>
<CAPTION>
Three months Years ended
ended December 31, ended December 31,
(in thousands, except per share amounts) 1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Revenues
Electric utility $ 287,858 $ 253,789 $ 1,055,204 $ 1,016,283
Savings bank 105,250 103,559 409,913 409,883
International power 1,207 1,154 4,464 4,773
Other 14,590 13,822 53,709 54,226
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408,905 372,324 1,523,290 1,485,165
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Expenses
Electric utility 244,853 211,864 880,490 838,833
Savings bank 90,737 91,988 349,561 356,233
International power 2,444 1,671 9,195 7,937
Other 6,293 15,029 50,173 57,516
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344,327 320,552 1,289,419 1,260,519
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Operating income (loss)
Electric utility 43,005 41,925 174,714 177,450
Savings bank 14,513 11,571 60,352 53,650
International power (1,237) (517) (4,731) (3,164)
Other 8,297 (1,207) 3,536 (3,290)
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64,578 51,772 233,871 224,646
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Interest expense--electric utility and other (18,143) (17,179) (72,631) (70,524)
Allowance for borrowed funds used during construction 621 770 2,576 5,915
Preferred stock dividends of subsidiaries (511) (1,498) (2,135) (6,005)
Preferred securities distributions of trust subsidiaries (4,009) (3,268) (16,025) (12,557)
Allowance for equity funds used during construction 1,026 1,325 4,228 10,106
----------- ----------- ----------- -----------
Income from continuing operations
before income taxes 43,562 31,922 149,884 151,581
Income taxes 15,810 10,813 56,990 56,953
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Income from continuing operations 27,752 21,109 92,894 94,628
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Discontinued operations, net of income taxes
Loss from operations -- -- -- (13,598)
Net gain on disposals 3,953 -- 3,953 3,781
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Gain (loss) from discontinued operations 3,953 -- 3,953 (9,817)
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Net income $ 31,705 $ 21,109 $ 96,847 $ 84,811
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Per common share
Basic earnings (loss)
Continuing operations $ 0.86 $ 0.66 $ 2.89 $ 2.96
Discontinued operations 0.12 -- 0.12 (0.31)
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$ 0.98 $ 0.66 $ 3.01 $ 2.65
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Diluted earnings (loss)
Continuing operations $ 0.86 $ 0.66 $ 2.88 $ 2.95
Discontinued operations 0.12 -- 0.12 (0.31)
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$ 0.98 $ 0.66 $ 3.00 $ 2.64
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Dividends $ 0.62 $ 0.62 $ 2.48 $ 2.48
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Weighted average number of
common shares outstanding 32,213 32,081 32,188 32,014
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Adjusted weighted average shares 32,308 32,199 32,291 32,129
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Income from continuing operations by segment
Electric utility $ 18,602 $ 17,849 $ 75,222 $ 80,776
Savings bank 9,331 6,647 35,412 30,263
International power (1,429) (639) (5,089) (4,031)
Other 1,248 (2,748) (12,651) (12,380)
----------- ----------- ----------- -----------
Income from continuing operations $ 27,752 $ 21,109 $ 92,894 $ 94,628
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</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 years ended December 31, 1998 and December 31,
1999 (when filed) and the consolidated financial statements and the notes
thereto in HEI's Quarterly Reports on SEC Forms 10-Q for the quarters ended
March 31, 1999, June 30, 1999 and September 30, 1999.
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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/ Paul Oyer
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Robert F. Mougeot Paul A. Oyer
Financial Vice President and Financial Vice President and
Chief Financial Officer Treasurer
(Principal Financial Officer of HEI) (Principal Financial Officer of HECO)
Date: January 24, 2000 Date: January 24, 2000
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