Published: February 08, 2012
HEI Reports 2011 & Fourth Quarter Earnings & Declares Dividend
HONOLULU, Feb. 8, 2012 /PRNewswire/ -- Hawaiian Electric Industries, Inc. (NYSE: HE) (HEI) today reported consolidated net income for common stock for the full year of 2011 was $138.2 million, or $1.44 diluted earnings per share (EPS), compared to $113.5 million, or $1.21 diluted EPS for 2010.
Consolidated net income for the fourth quarter of 2011 was $34.2 million, or $0.36 diluted EPS, compared to $24.7 million, or $0.26 diluted EPS for the fourth quarter of 2010.
"Our improved earnings help us fund the upfront investments necessary to support Hawaii's move to clean energy. We are continuing to reinvest earnings in an aggressive infrastructure program to modernize the electric grid for reliability and to prepare it for significant amounts of renewable energy. In 2011 alone, we invested over $200 million in utility infrastructure which is twice the utilities' 2011 earnings," said Constance H. Lau, HEI president and chief executive officer.
"With the majority of customer bill increases driven by fuel prices, it is crucial that we reduce our dependence on imported oil and continue to add as much cost effective renewable energy as possible as fast as we can. This is critical to help moderate and stabilize the cost of energy for customers," added Lau. A typical Oahu electric bill of $158 at the beginning of 2011 increased about $57 due to higher fuel costs and only $4 from rate increases and other adjustments by the end of the year. The utilities do not earn a profit on fuel purchases. To help offset future impacts of higher fossil fuel costs, the Hawaiian Electric utilities added 146 megawatts of renewable energy in 2011 for a total of approximately 550 megawatts. In 2011, renewable energy supplied more than 10% of our customers' energy use and as high as 40% for our Hawaii Island customers.
"At American Savings Bank, performance remained strong throughout 2011 and earnings increased despite the significant challenges posed by the interest rate environment and federal regulation of bank fees. While maintaining healthy capital levels, the bank paid cash dividends of $58 million and remains a beneficial source of capital. Our unique combination of businesses continues to provide the financial resources and ready access to capital needed to invest in our utility and bank," said Lau.
UTILITY EARNINGS REFLECT CLEAN ENERGY AND RELIABILITY INVESTMENTS
Full Year Results:
Electric utility net income was $100.0 million in 2011 compared to $76.6 million in 2010. The specific variances contributing to the net income increase from the prior year were (on an after-tax basis):
-- $27 million of additional revenues allowed for reliability and clean
energy investments by all three utilities;
-- $6 million higher savings from running our Hawaii Island and Maui County
generation plants more efficiently; and
-- $4 million lower depreciation expense primarily resulting from the
change in depreciation rates and methods.
These increases were partially offset by the following (after-tax):
-- $6 million partial write-down of a transmission project, consistent with
a settlement with the Consumer Advocate (CA) and Department of Defense
(DOD), subject to PUC approval;
-- $6 million of non-recurring tax settlement items in 2010;
-- $4 million implementation of heat rate deadband and lower fuel
efficiency savings on Oahu; and
-- $1 million lower kilowatthour sales for Hawaii Island and Maui County,
down 0.6% and 0.9%, respectively, primarily due to high oil prices
impacting customer bills and conservation. We expect 2012 kilowatthour
sales to be approximately 1% higher than 2011 for both HELCO and MECO.
Operations and maintenance (O&M) expenses((1)) (pretax) were essentially flat compared to the prior year. $6 million of higher transmission and distribution expenses including Asia-Pacific Economic Cooperation (APEC) forum related costs and $6 million of higher bad debt expense were offset by $7 million of lower overhaul costs due to timing and $5 million of lower administrative and general expense from a regulatory change in the capitalization of costs. In 2012, we expect O&M expenses to be approximately 6% higher than in 2011.
Fourth Quarter Results:
Electric utility net income for the fourth quarter 2011 was $25.8 million compared to $18.9 million in the fourth quarter 2010. The significant factors contributing to the net income increase from the fourth quarter of 2010 were (on an after-tax basis):
-- $7 million of additional revenues allowed for reliability and clean
energy investments for our Oahu and Hawaii Island utilities; and
-- $9 million lower O&M expenses.
These increases were partially offset by the write-down of a transmission project, non-recurring tax settlement items in 2010 and lower kilowatthour sales discussed above. For the quarter, kilowatthour sales were down 1.7% and 2.8% for Hawaii Island and Maui County, respectively.
O&M expenses((1)) (pretax) were down $14 million or 14% from the fourth quarter 2010 primarily due to major overhauls that occurred in the fourth quarter of 2010, regulatory changes associated with the capitalization of costs, lower retirement benefit expense and a non-recurring insurance claim settlement in 2011.
((1)) Excludes demand side management (DSM) program costs. DSM program costs were $4 million for the full year in both 2011 and 2010 and $1 million in the fourth quarter of 2011 compared to $2 million in the fourth quarter of 2010. DSM program costs are recovered through a surcharge.
BANK: SOLID PERFORMANCE AND MODERATE LOAN GROWTH
Full Year Results:
Bank net income for 2011 was $59.8 compared to $58.5 million in 2010. Return on assets was 1.23% for 2011 compared to 1.20% in 2010.
The primary drivers for the net income improvement were improved credit quality and lower operating expenses, despite lower revenues from a prolonged low interest rate environment and the impact of regulation on fees.
The significant items contributing to the net income increase from the prior year were (on an after-tax basis):
-- $4 million lower provision for loan losses;
-- $3 million decrease in noninterest expense; and
-- $1 million lower income taxes primarily due to investments in projects
that generated low-income housing tax credits in 2011.
These were offset by:
-- $3 million reduction in net interest income predominantly due to lower
yields on earning assets; and
-- $4 million lower noninterest income due to lower overdraft fees due to
the full year impact of Regulation E and other subsequent regulatory
guidance.
Net interest margin declined to 4.12% in 2011, down from 4.23% in 2010, largely the result of lower interest rates on new loan production, run-off and refinancing of higher yielding residential loans and lower deferred loan fees recognized in 2011 as loan prepayments moderated compared to 2010. This was partially offset by declines in higher costing term certificates and greater low cost core deposit funding.
Provision for loan losses (pretax) was $15.0 million in 2011 compared to $20.9 million in 2010. The $5.9 million decline in the provision was primarily due to the improvement in the mix of our assets, specifically the decrease in the higher risk land loan portfolio, and improved credit quality associated with the modest year-over-year recovery in Hawaii's economy. Similarly, the 2011 net charge-off ratio improved to 0.49%, from 0.61% in 2010.
Noninterest expense (pretax) for 2011 was $143.4 million, $5.5 million lower than the $148.9 million in 2010 which included costs for the FISERV conversion completed in 2010.
Loan growth continued throughout 2011 with five consecutive quarters of loan growth. For the year, total loans increased by $148 million or 4.2%, in-line with our target for mid-single digit loan growth. Loan growth was driven primarily by commercial and home equity loans which more than offset the planned decline in long-term fixed rate residential mortgages as we control interest rate risk in this low rate environment.
Fourth Quarter Results:
Bank net income for the fourth quarter 2011 was $15.3 million, essentially flat compared to $15.5 million in the third, or linked, quarter 2011 and 15% higher than $13.3 million in the fourth quarter 2010. The $2.0 million increase in net income for the fourth quarter of 2011 compared to the fourth quarter of 2010 was largely attributable to (on an after-tax basis): $3 million lower provision for loan losses partially offset by $1 million higher noninterest expense.
Net interest margin was 4.16% in the fourth quarter 2011, up from 4.11% in the linked quarter but down from 4.21% in the fourth quarter 2010. The improvement in net interest margin from the linked quarter was largely due to lower cost of funds and the recognition of deferred loan fees from higher loan prepayments from residential mortgage refinancings.
Provision for loan losses (pretax) was $4.1 million in the fourth quarter 2011 compared to $8.6 million in the fourth quarter 2010 and $3.8 million in the linked quarter. The $4.5 million decline compared to fourth quarter 2010 was primarily due to the lower level of commercial loan defaults in 2011 and a one-time adjustment for land loans that occurred in the fourth quarter 2010. The fourth quarter 2011 net charge-off ratio was 0.48%, improved from 0.54% reported in the linked quarter and from 0.72% in the fourth quarter last year.
Noninterest expense (pretax) for the fourth quarter 2011 was $36.6 million, up from $35.6 million in the linked quarter and $35.0 million in the fourth quarter 2010.
The bank remains well-capitalized with a Tier 1 leverage ratio of 9.0% and total risk-based capital ratio of 12.9% as of the end of the fourth quarter 2011.
HOLDING AND OTHER COMPANIES
The holding and other companies' net losses were $21.6 million in 2011 compared to $21.5 million in 2010, and $6.9 million in the fourth quarter 2011 compared to $7.5 million in the fourth quarter 2010. In the fourth quarter of 2011, HEI funded $3 million to the HEI Charitable Foundation in support of our ongoing commitment to the local communities in which we live, work and serve.
BOARD DECLARES QUARTERLY DIVIDEND; SETS ANNUAL MEETING
On February 7, 2012, the board of directors of HEI maintained the regular quarterly cash dividend of 31 cents per share, payable on March 13, 2012, to shareholders of record at the close of business on February 21, 2012 (ex-dividend date is February 16, 2012). The dividend is equivalent to an annual rate of $1.24 per share.
Dividends have been paid continuously since 1901. At the indicated annual dividend rate and the closing share price on February 7, 2012 of $26.32, HEI's yield is 4.7%.
In addition, HEI's 29(th) annual meeting of shareholders has been scheduled for Wednesday, May 9, 2012, at 9:30 a.m., in Room 805, American Savings Bank Tower 8(th) Floor, 1001 Bishop Street, Honolulu, Hawaii. Shareholders of record at the close of business on March 1, 2012, will be entitled to vote.
WEBCAST AND TELECONFERENCE
Hawaiian Electric Industries, Inc. will conduct a webcast and teleconference call to review 2011 earnings on Thursday, February 9, 2012, at 8:00 a.m. Hawaii time (1:00 p.m. Eastern time). The event can be accessed through HEI's website at www.hei.com or by dialing (800) 299-7089, passcode: 71303637 for the teleconference call. The presentation for the webcast will be on HEI's website under the headings "Investor Relations", "News & Events" and "Presentations & Webcasts". HEI and Hawaiian Electric Company, Inc. (HECO) intend to continue to use HEI's website, www.hei.com, as a means of disclosing additional information. Such disclosures will be included on HEI's website in the Investor Relations section. Accordingly, investors should routinely monitor such portions of HEI's website, in addition to following HEI's, HECO's and American Savings Bank, F.S.B.'s (ASB) press releases, SEC filings and public conference calls and webcasts. The information on HEI's website is not incorporated by reference in this document or in the Company's SEC filings unless, and except to the extent, specifically incorporated by reference. Investors may also wish to refer to the PUC website at dms.puc.hawaii.gov/dms in order to review documents filed with and issued by the PUC. No information on the PUC website is incorporated by reference in this document or in the Company's SEC filings.
An online replay of the webcast will be available at the same website beginning about two hours after the event. Replays of the teleconference call will also be available approximately two hours after the event through February 23, 2012, by dialing (888) 286-8010, passcode: 34794298.
HEI supplies power to over 400,000 customers or 95% of Hawaii's population through its electric utilities, HECO, Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited and provides a wide array of banking and other financial services to consumers and businesses through ASB, one of Hawaii's largest financial institutions.
FORWARD-LOOKING STATEMENTS
This release may contain "forward-looking statements," which include statements that are predictive in nature, depend upon or refer to future events or conditions, and usually include words such as "expects", "anticipates", "intends", "plans", "believes", "predicts", "estimates" or similar expressions. In addition, any statements concerning future financial performance, ongoing business strategies or prospects or possible future actions 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 the accuracy of assumptions concerning HEI and its subsidiaries, the performance of the industries in which they do business and economic and market factors, among other things. These forward-looking statements are not guarantees of future performance.
Forward-looking statements in this release should be read in conjunction with the "Forward-Looking Statements" and "Risk Factors" discussions (which are incorporated by reference herein) set forth in HEI's Annual Report on Form 10-K for the year ended December 31, 2010, Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 and HEI's future periodic reports that discuss important factors that could cause HEI's results to differ materially from those anticipated in such statements. Forward-looking statements speak only as of the date of the report, presentation or filing in which they are made. Except to the extent required by the federal securities laws, HEI, HECO, ASB and their subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Contact: Shelee M.T. Kimura
Manager, Investor Telephone: (808)
Relations & 543-7384
Strategic Planning E-mail: skimura@hei.com
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) Three months ended Years ended
December 31, December 31,
------------ ------------
(in thousands, except per share amounts) 2011 2010 2011 2010
---------------------------------------- ---- ---- ---- ----
Revenues
Electric utility $784,363 $627,034 $2,978,690 $2,382,366
Bank 66,676 68,718 264,407 282,693
Other (11) (15) (762) (77)
----- --- --- ---- ---
851,028 695,737 3,242,335 2,664,982
------- ------- --------- ---------
Expenses
Electric utility 731,911 584,033 2,763,556 2,203,978
Bank 43,818 48,065 172,806 190,105
Other 7,129 4,397 16,277 14,688
----- ----- ----- ------ ------
782,858 636,495 2,952,639 2,408,771
------- ------- --------- ---------
Operating income (loss)
Electric utility 52,452 43,001 215,134 178,388
Bank 22,858 20,653 91,601 92,588
Other (7,140) (4,412) (17,039) (14,765)
----- ------ ------ ------- -------
68,170 59,242 289,696 256,211
------ ------ ------- -------
Interest expense-other than on deposit
liabilities and other bank borrowings (17,840) (19,622) (82,106) (81,538)
Allowance for borrowed funds used during
construction 767 497 2,498 2,558
Allowance for equity funds used during
construction 1,833 1,199 5,964 6,016
-------------------------------------- ----- ----- ----- -----
Income before income taxes 52,930 41,316 216,052 183,247
Income taxes 18,232 16,145 75,932 67,822
------------ ------ ------ ------ ------
Net income 34,698 25,171 140,120 115,425
Preferred stock dividends of subsidiaries 473 473 1,890 1,890
----------------------------------------- --- ----- -----
Net income for common stock $34,225 $24,698 $138,230 $113,535
=========================== ======= ======= ======== ========
Basic earnings per common share $0.36 $0.26 $1.45 $1.22
=============================== ===== ===== ===== =====
Diluted earnings per common share $0.36 $0.26 $1.44 $1.21
================================= ===== ===== ===== =====
Dividends per common share $0.31 $0.31 $1.24 $1.24
========================== ===== ===== ===== =====
Weighted-average number of common shares
outstanding 95,939 94,231 95,510 93,421
======================================== ====== ====== ====== ======
Adjusted weighted-average shares 96,199 94,430 95,820 93,693
================================ ====== ====== ====== ======
Income (loss) by segment
Electric utility $25,814 $18,915 $99,986 $76,589
Bank 15,340 13,296 59,843 58,456
Other (6,929) (7,513) (21,599) (21,510)
----- ------ ------ ------- -------
Net income for common stock $34,225 $24,698 $138,230 $113,535
=========================== ======= ======= ======== ========
Return on average common equity 9.2% 7.8%
In the fourth quarter of 2011, HECO recorded an adjustment of $6
million to revenues related to the third quarter of 2011, which
decreased net income for the fourth quarter of 2011 by $3 million.
This information should be read in conjunction with the consolidated
financial statements and the notes thereto incorporated by reference
and included in HEI's Annual Report on SEC Form 10-K for the years
ended December 31, 2010 and 2011 (when filed) and the consolidated
financial statements and the notes thereto in HEI's Quarterly
Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June
30, 2011 and September 30, 2011, as updated by SEC Forms 8-K.
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31 2011 2010
----------- ---- ----
(dollars in thousands)
Assets
------
Cash and cash equivalents $270,265 $330,651
Accounts receivable and unbilled revenues, net 344,322 266,996
Available-for-sale investment and mortgage-
related securities 624,331 678,152
Investment in stock of Federal Home Loan Bank
of Seattle 97,764 97,764
Loans receivable held for investment, net 3,642,818 3,489,880
Loans held for sale, at lower of cost or fair
value 9,601 7,849
Property, plant and equipment, net of
accumulated depreciation of $2,049,821 in 2011
and $2,037,598 in 2010 3,334,501 3,165,918
Regulatory assets 669,389 478,330
Other 517,550 487,614
Goodwill 82,190 82,190
-------- ------ ------
Total assets $9,592,731 $9,085,344
============ ========== ==========
Liabilities and shareholders' equity
------------------------------------
Liabilities
Accounts payable $216,176 $202,446
Interest and dividends payable 25,041 27,814
Deposit liabilities 4,070,032 3,975,372
Short-term borrowings-other than bank 68,821 24,923
Other bank borrowings 233,229 237,319
Long-term debt, net-other than bank 1,340,070 1,364,942
Deferred income taxes 354,051 278,958
Regulatory liabilities 315,466 296,797
Contributions in aid of construction 356,203 335,364
Retirement benefits liability 530,410 376,994
Other 516,990 446,485
Total liabilities 8,026,489 7,567,414
----------------- --------- ---------
Preferred stock of subsidiaries -not subject
to mandatory redemption 34,293 34,293
-------------------------------------------- ------ ------
Shareholders' equity
Preferred stock, no par value, authorized
10,000,000 shares; issued: none - -
Common stock, no par value, authorized
200,000,000 shares; issued and outstanding:
96,038,328 shares in 2011 and 94,690,932
shares in 2010 1,349,446 1,314,199
Retained earnings 201,640 181,910
Accumulated other comprehensive loss, net of
tax benefits (19,137) (12,472)
-------------------------------------------- ------- -------
Total shareholders' equity 1,531,949 1,483,637
-------------------------- --------- ---------
Total liabilities and shareholders' equity $9,592,731 $9,085,344
========================================== ========== ==========
This information should be read in conjunction with the consolidated
financial statements and the notes thereto incorporated by reference
and included in HEI's Annual Report on SEC Form 10-K for the years
ended December 31, 2010 and 2011 (when filed) and the consolidated
financial statements and the notes thereto in HEI's Quarterly
Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June
30, 2011 and September 30, 2011, as updated by SEC Forms 8-K.
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Years ended December 31 2011 2010
----------------------- ---- ----
(in thousands)
Cash flows from operating activities
Net income $140,120 $115,425
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation of property, plant and
equipment 148,152 154,523
Other amortization 19,318 4,605
Provision for loan losses 15,009 20,894
Impairment of utility plant 9,215 -
Loans receivable originated and purchased,
held for sale (267,656) (360,527)
Proceeds from sale of loans receivable,
held for sale 273,932 392,406
Changes in deferred income taxes 79,444 97,791
Changes in excess tax benefits from share-
based payment arrangements 35 45
Allowance for equity funds used during
construction (5,964) (6,016)
Change in cash overdraft (2,688) (141)
Changes in assets and liabilities
Increase in accounts receivable and
unbilled revenues, net (77,326) (25,880)
Increase in fuel oil stock (18,843) (74,044)
Increase (decrease) in accounts, interest
and dividends payable (34,497) 22,410
Changes in prepaid and accrued income
taxes and utility revenue taxes 73,170 (5,252)
Contributions to defined benefit pension
and other postretirement benefit plans (74,961) (31,792)
Changes in other assets and liabilities (26,094) 36,270
Net cash provided by operating activities 250,366 340,717
----------------------------------------- ------- -------
Cash flows from investing activities
Available-for-sale investment and
mortgage-related securities purchased (361,876) (714,552)
Principal repayments on available-for-
sale investment and mortgage-related
securities 389,906 465,437
Proceeds from sale of available-for-sale
investment and mortgage-related
securities 32,799 -
Net decrease (increase) in loans held for
investment (181,080) 118,892
Proceeds from sale of real estate acquired
in settlement of loans 8,020 5,967
Capital expenditures (235,116) (182,125)
Contributions in aid of construction 23,534 22,555
Other (2,974) 5,092
Net cash used in investing activities (326,787) (278,734)
------------------------------------- -------- --------
Cash flows from financing activities
Net increase (decrease) in deposit
liabilities 94,660 (83,388)
Net increase (decrease) in short-term
borrowings with original maturities of
three months or less 43,898 (17,066)
Net increase (decrease) in retail
repurchase agreements 10,910 (60,308)
Repayments of other bank borrowings (15,000) -
Proceeds from issuance of long-term debt 125,000 -
Repayment of long-term debt (150,000) -
Changes in excess tax benefits from share-
based payment arrangements (35) (45)
Net proceeds from issuance of common stock 15,979 22,706
Common stock dividends (106,812) (93,034)
Preferred stock dividends of subsidiaries (1,890) (1,890)
Other (675) (2,229)
Net cash provided by (used in) financing
activities 16,035 (235,254)
---------------------------------------- ------ --------
Net decrease in cash and cash equivalents (60,386) (173,271)
Cash and cash equivalents, January 1 330,651 503,922
Cash and cash equivalents, December 31 $270,265 $330,651
====================================== ======== ========
This information should be read in conjunction with the consolidated
financial statements and the notes thereto incorporated by reference
and included in HEI's Annual Report on SEC Form 10-K for the years
ended December 31, 2010 and 2011 (when filed) and the consolidated
financial statements and the notes thereto in HEI's Quarterly
Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June
30, 2011 and September 30, 2011, as updated by SEC Forms 8-K.
Hawaiian Electric Company, Inc. (HECO) and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) Three months ended Years ended
December 31, December 31,
------------ ------------
(dollars in thousands, except
per barrel amounts) 2011 2010 2011 2010
----------------------------- ---- ---- ---- ----
Operating revenues $782,904 $616,412 $2,973,764 $2,367,441
------------------ -------- -------- ---------- ----------
Operating expenses
Fuel oil 339,650 237,800 1,265,126 900,408
Purchased power 181,473 144,625 689,652 548,800
Other operation 62,731 68,864 257,065 251,027
Maintenance 28,411 37,593 121,219 127,487
Depreciation 35,302 36,140 142,975 149,708
Taxes, other than income taxes 74,002 57,839 276,504 222,117
Income taxes 19,358 11,081 65,988 48,053
740,927 593,942 2,818,529 2,247,600
------- ------- --------- ---------
Operating income 41,977 22,470 155,235 119,841
---------------- ------ ------ ------- -------
Other income
Allowance for equity funds used
during construction 1,833 1,199 5,964 6,016
Impairment of utility plant (5,496) - (5,496) -
Other, net 833 9,556 3,811 11,679
(2,830) 10,755 4,279 17,695
------ ------ ----- ------
Interest and other charges
Interest on long-term debt 14,383 14,383 57,532 57,532
Amortization of net bond premium
and expense 765 783 3,081 2,975
Other interest charges (1,547) (858) (582) 1,003
Allowance for borrowed funds
used during construction (767) (497) (2,498) (2,558)
12,834 13,811 57,533 58,952
------ ------ ------ ------
Net income 26,313 19,414 101,981 78,584
Preferred stock dividends of
subsidiaries 229 229 915 915
---------------------------- --- --- --- ---
Net income attributable to HECO 26,084 19,185 101,066 77,669
Preferred stock dividends of
HECO 270 270 1,080 1,080
Net income for common stock $25,814 $18,915 $99,986 $76,589
=========================== ======= ======= ======= =======
OTHER ELECTRIC UTILITY
INFORMATION
Kilowatthour sales (millions)
HECO 1,799 1,853 7,242 7,277
HELCO 276 281 1,104 1,110
MECO 293 301 1,181 1,192
--- --- ----- -----
2,368 2,435 9,527 9,579
===== ===== ===== =====
Wet-bulb temperature (Oahu
average; degrees Fahrenheit) 70.0 69.8 70.0 68.3
Cooling degree days (Oahu) 1,273 1,166 4,954 4,661
Average fuel oil cost per barrel $134.28 $92.12 $123.63 $87.62
Customer accounts (end of
period)
HECO 296,800 296,422
HELCO 81,199 80,695
MECO 68,230 67,739
------ ------
446,229 444,856
======= =======
Return on average common equity
(%)
HECO 6.4 6.1
HELCO 9.7 6.5
MECO 7.7 4.0
HECO Consolidated 7.3 5.8
In the fourth quarter of 2011, HECO recorded an adjustment of $6
million to revenues related to the third quarter of 2011, which
decreased net income for the fourth quarter of 2011 by $3 million.
This information should be read in conjunction with the consolidated
financial statements and the notes thereto incorporated by reference
in HECO's Annual Report on SEC Form 10-K for the years ended
December 31, 2010 and 2011 (when filed) and the consolidated
financial statements and the notes thereto in HECO's Quarterly
Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June
30, 2011 and September 30, 2011, as updated by SEC Forms 8-K.
Hawaiian Electric Company, Inc. (HECO) and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31 2011 2010
----------- ---- ----
(in thousands, except share data)
Assets
Utility plant, at cost
Land $51,514 $51,364
Plant and equipment 5,052,027 4,896,974
Less accumulated depreciation (1,966,894) (1,941,059)
Construction in progress 138,838 101,562
Net utility plant 3,275,485 3,108,841
----------------- --------- ---------
Current assets
Cash and cash equivalents 48,806 122,936
Customer accounts receivable, net 183,328 138,171
Accrued unbilled revenues, net 137,826 104,384
Other accounts receivable, net 8,623 9,376
Fuel oil stock, at average cost 171,548 152,705
Materials and supplies, at average cost 43,188 36,717
Prepayments and other 34,602 55,216
Regulatory assets 8,161 7,349
Total current assets 636,082 626,854
-------------------- ------- -------
Other long-term assets
Regulatory assets 661,228 470,981
Unamortized debt expense 12,786 14,030
Other 86,361 64,974
Total other long-term assets 760,375 549,985
---------------------------- ------- -------
Total assets $4,671,942 $4,285,680
============ ========== ==========
Capitalization and liabilities
Capitalization
Common stock, $6 2/3 par value, authorized
50,000,000 shares; outstanding 14,233,723
shares and 13,830,823 shares in 2011 and
2010, respectively $94,911 $92,224
Premium on capital stock 426,921 389,609
Retained earnings 884,284 854,856
Accumulated other comprehensive income, net
of income taxes (32) 709
------------------------------------------- --- ---
Common stock equity 1,406,084 1,337,398
Cumulative preferred stock - not subject to
mandatory redemption 34,293 34,293
Long-term debt, net 1,000,570 1,057,942
Total capitalization 2,440,947 2,429,633
-------------------- --------- ---------
Current liabilities
Current portion of long-term debt 57,500 -
Accounts payable 188,580 178,959
Interest and preferred dividends payable 19,483 20,603
Taxes accrued 224,768 175,960
Other 69,353 56,354
Total current liabilities 559,684 431,876
------------------------- ------- -------
Deferred credits and other liabilities
Deferred income taxes 337,863 269,286
Regulatory liabilities 315,466 296,797
Unamortized tax credits 60,614 58,810
Retirement benefits liability 495,121 355,844
Other 106,044 108,070
Total deferred credits and other liabilities 1,315,108 1,088,807
-------------------------------------------- --------- ---------
Contributions in aid of construction 356,203 335,364
------------------------------------ ------- -------
Total capitalization and liabilities $4,671,942 $4,285,680
==================================== ========== ==========
This information should be read in conjunction with the consolidated
financial statements and the notes thereto incorporated by reference
in HECO's Annual Report on SEC Form 10-K for the years ended
December 31, 2010 and 2011 (when filed) and the consolidated
financial statements and the notes thereto in HECO's Quarterly
Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June
30, 2011 and September 30, 2011, as updated by SEC Forms 8-K.
Hawaiian Electric Company, Inc. (HECO) and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Years ended December 31, 2011 2010
------------------------ ---- ----
(in thousands)
Cash flows from operating activities
Net income $101,981 $78,584
Adjustments to reconcile net income to
cash provided by operating activities
Depreciation of property, plant and
equipment 142,975 149,708
Other amortization 17,378 7,725
Impairment of utility plant 9,215 -
Changes in deferred income taxes 69,091 95,685
Changes in tax credits, net 2,087 2,841
Allowance for equity funds used during
construction (5,964) (6,016)
Change in cash overdraft (2,688) (141)
Changes in assets and liabilities
Increase in accounts receivable (44,404) (5,812)
Increase in accrued unbilled revenues (33,442) (20,108)
Increase in fuel oil stock (18,843) (74,044)
Increase in materials and supplies (6,471) (809)
Increase in regulatory assets (40,132) (2,936)
Increase (decrease) in accounts payable (35,815) 25,392
Changes in prepaid and accrued income
taxes and utility revenue taxes 69,736 (10,170)
Contributions to defined benefit pension
and other postretirement benefit plans (73,176) (31,068)
Changes in other assets and liabilities 9,866 38,958
Net cash provided by operating
activities 161,394 247,789
------------------------------ ------- -------
Cash flows from investing activities
Capital expenditures (226,022) (174,344)
Contributions in aid of construction 23,534 22,555
Other 77 1,327
Net cash used in investing activities (202,411) (150,462)
------------------------------------- -------- --------
Cash flows from financing activities
Common stock dividends (70,558) (48,769)
Proceeds from issuance of common stock 40,000 4,250
Preferred stock dividends of HECO and
subsidiaries (1,995) (1,995)
Other (560) (1,455)
Net cash used in financing activities (33,113) (47,969)
------------------------------------- ------- -------
Net increase (decrease) in cash and cash
equivalents (74,130) 49,358
Cash and cash equivalents, January 1 122,936 73,578
------------------------------------ ------- ------
Cash and cash equivalents, December 31 $48,806 $122,936
====================================== ======= ========
This information should be read in conjunction with the consolidated
financial statements and the notes thereto incorporated by reference
in HECO's Annual Report on SEC Form 10-K for the years ended
December 31, 2010 and 2011 (when filed) and the consolidated
financial statements and the notes thereto in HECO's Quarterly
Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June
30, 2011 and September 30, 2011, as updated by SEC Forms 8-K.
American Savings Bank, F.S.B. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME DATA
(Unaudited) Three months ended Years ended
------------------
December 31, September 30, December 31, December 31,
------------
(in thousands) 2011 2011 2010 2011 2010
-------------- ---- ---- ---- ---- ----
Interest and dividend income
Interest and fees on loans $46,500 $46,240 $46,898 $184,485 $195,192
Interest and dividends on
investment and mortgage-related
securities 3,352 3,654 4,131 14,568 14,946
Total interest and dividend income 49,852 49,894 51,029 199,053 210,138
---------------------------------- ------ ------ ------ ------- -------
Interest expense
Interest on deposit liabilities 1,837 2,166 3,031 8,983 14,696
Interest on other borrowings 1,362 1,375 1,395 5,486 5,653
Total interest expense 3,199 3,541 4,426 14,469 20,349
---------------------- ----- ----- ----- ------ ------
Net interest income 46,653 46,353 46,603 184,584 189,789
Provision for loan losses 4,082 3,822 8,584 15,009 20,894
Net interest income after
provision for loan losses 42,571 42,531 38,019 169,575 168,895
-------------------------- ------ ------ ------ ------- -------
Noninterest income
Fees from other financial services 7,476 7,219 7,436 28,881 27,280
Fee income on deposit liabilities 4,486 4,492 4,849 18,026 26,369
Fee income on other financial
products 1,364 1,806 1,530 6,704 6,487
Other income 3,498 2,689 3,874 11,743 12,419
Total noninterest income 16,824 16,206 17,689 65,354 72,555
------------------------ ------ ------ ------ ------ ------
Noninterest expense
Compensation and employee benefits 17,820 17,646 16,999 71,137 71,476
Occupancy 4,313 4,313 3,931 17,154 16,548
Data processing 1,676 2,451 2,292 8,155 13,213
Services 1,990 1,686 1,477 7,396 6,594
Equipment 1,762 1,712 1,671 6,903 6,620
Other expense 8,997 7,763 8,668 32,648 34,487
Total noninterest expense 36,558 35,571 35,038 143,393 148,938
------------------------- ------ ------ ------ ------- -------
Income before income taxes 22,837 23,166 20,670 91,536 92,512
Income taxes 7,497 7,709 7,374 31,693 34,056
Net income $15,340 $15,457 $13,296 $59,843 $58,456
========== ======= ======= ======= ======= =======
OTHER BANK INFORMATION (%)
Return on average assets 1.26 1.26 1.10 1.23 1.20
Return on average equity 12.24 12.32 10.59 11.99 11.62
Net interest margin 4.16 4.11 4.21 4.12 4.23
Net charge-offs to average loans
outstanding (annualized) 0.48 0.54 0.72 0.49 0.61
Efficiency ratio 57 56 54 57 56
As of period end
Nonperforming assets to loans
outstanding and real estate owned
** 2.01 1.94 1.77
Allowance for loan losses to loans
outstanding 1.03 1.04 1.15
Tier-1 leverage ratio 9.0 9.1 9.2
Total risk-based capital ratio 12.9 13.0 13.9
Tangible common equity to total
assets 8.3 8.6 8.6
** Regulatory basis
This information should be read in conjunction with the consolidated
financial statements and the notes thereto incorporated by reference
and included in HEI's Annual Report on SEC Form 10-K for the years
ended December 31, 2010 and 2011 (when filed) and the consolidated
financial statements and the notes thereto in HEI's Quarterly
Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June
30, 2011 and September 30, 2011, as updated by SEC Forms 8-K.
American Savings Bank, F.S.B. and Subsidiaries
CONSOLIDATED BALANCE SHEETS DATA
(Unaudited)
December 31 2011 2010
----------- ---- ----
(in thousands)
Assets
Cash and cash equivalents $219,678 $204,397
Federal funds sold - 1,721
Available-for-sale investment and mortgage-
related securities 624,331 678,152
Investment in stock of Federal Home Loan Bank of
Seattle 97,764 97,764
Loans receivable held for investment, net 3,642,818 3,489,880
Loans held for sale, at lower of cost or fair
value 9,601 7,849
Other 233,592 234,806
Goodwill 82,190 82,190
-------- ------ ------
Total assets $4,909,974 $4,796,759
============ ========== ==========
Liabilities and shareholder's equity
Deposit liabilities-noninterest-bearing $993,828 $865,642
Deposit liabilities-interest-bearing 3,076,204 3,109,730
Other borrowings 233,229 237,319
Other 118,078 90,683
Total liabilities 4,421,339 4,303,374
----------------- --------- ---------
Common stock 331,880 330,562
Retained earnings 166,126 169,111
Accumulated other comprehensive loss, net of tax
benefits (9,371) (6,288)
Total shareholder's equity 488,635 493,385
-------------------------- ------- -------
Total liabilities and shareholder's equity $4,909,974 $4,796,759
========================================== ========== ==========
This information should be read in conjunction with the consolidated
financial statements and the notes thereto incorporated by reference
and included in HEI's Annual Report on SEC Form 10-K for the years
ended December 31, 2010 and 2011 (when filed) and the consolidated
financial statements and the notes thereto in HEI's Quarterly
Reports on SEC Form 10-Q for the quarters ended March 31, 2011, June
30, 2011 and September 30, 2011, as updated by SEC Forms 8-K.
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SOURCE Hawaiian Electric Industries, Inc.
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