HONOLULU--(BUSINESS WIRE)--May 5, 2008--Hawaiian Electric
Industries, Inc. (NYSE:HE) today reported consolidated net income for
the first quarter of 2008 of $34.0 million or 41 cents per share,
compared with $6.8 million or 8 cents per share and $32.3 million or
40 cents per share for the first quarters of 2007 and 2006,
respectively.
"First quarter earnings recovered from depressed levels a year ago
on better results from both utility and banking operations," said
Constance H. Lau, HEI president and chief executive officer. "A year
ago, utility earnings declined severely as the company sought rate
increases to recover and earn a return on reliability investments and
costs at all three of its electric utilities and wrote off $7 million
after-tax of Keahole power plant expansion costs. In this year's first
quarter, interim rate increases granted by the Hawaii Public Utilities
Commission later in 2007 helped utility earnings," noted Lau. "Bank
earnings increased 26% quarter-over-quarter as the Federal Reserve's
easing of interest rates helped improve American Savings Bank's net
interest margin and there were improvements in both noninterest income
and noninterest expense. Additionally, credit quality remained good."
UTILITY RESULTS
Electric utility net income for the first quarter of 2008 was
$24.6 million compared with $0.5 million and $21.0 million for the
first quarters in 2007 and 2006, respectively. "After a tough first
quarter last year due to the Keahole write-off and pending rate case
decisions, we are now in a better position to earn a more reasonable
return for our investors," said Lau.
Kilowatthour sales were flat compared with the same quarter of
2007 largely because conservation and demand-side management programs
offset the impact of slightly warmer temperatures and an additional
day of sales in February due to the leap year.
"Operations and maintenance expenses were up $4.7 million or 6%
quarter-over-quarter and we expect this higher level of expense to
continue due to additional planned production and transmission and
distribution maintenance work," said Lau.
The utility also recorded $1.2 million in higher
quarter-over-quarter depreciation expenses due to 2007 plant
additions.
BANK RESULTS
Bank net income was $14.6 million in the first quarter of 2008
compared to $11.6 million for the same quarter last year, an increase
of $3.0 million.
"Given the volatility in the financial and credit markets, we are
especially pleased with the bank's solid first quarter results," said
Lau. Net interest income in the first quarter of 2008 was $50.5
million compared to $49.3 million in the first quarter of 2007. Lower
interest expense, primarily due to lower rates on deposits and
borrowings, more than offset lower interest income, primarily due to
lower yields on loans. Net interest margin expanded to 3.16% in the
first quarter of 2008, compared with 3.07% in the first quarter of
2007.
In the first quarter of 2008, the bank recorded a $0.9 million
provision for loan losses. No provision for loan losses was recorded
in the same period in 2007. "The overall credit quality of the bank's
loan portfolio remains good. We are not seeing any significant
deterioration in the quality of our residential loan portfolio. The
provision taken in the quarter was due to loan growth as well as the
reclassification of certain commercial loans. Our delinquent and
nonaccrual loans remain near historical lows. However, as the economy
begins to slow and we add more loans to the portfolio, we expect to
see an increase in loan loss provisions," added Lau.
Noninterest income increased $1.9 million compared to the first
quarter of 2007. Fee income from deposits was higher by $0.7 million
and fees from other financial services were higher by $0.3 million.
The bank recorded a $0.9 million gain on the sale of stock in a
membership organization in the first quarter of 2008.
Noninterest expense for the quarter ended March 31, 2008 was $2.7
million lower than the same period in 2007, primarily due to lower
legal and litigation related expenses.
HOLDING AND OTHER COMPANIES' RESULTS
The holding and other companies' net losses were $5.2 million in
the first quarter of 2008 versus net losses of $5.3 million for the
first quarter of 2007, relatively flat quarter-over-quarter.
WEBCAST AND TELECONFERENCE
Hawaiian Electric Industries, Inc. will conduct a webcast and
teleconference call to review its first quarter 2008 earnings on
Wednesday, May 7, 2008 at 8:00 a.m. Hawaii Time (2:00 p.m. Eastern
Time). The event can be accessed through HEI's website at
http://www.hei.com or by dialing (800) 638-4817, passcode: 92157354
for the teleconference call.
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 May 21, 2008, by dialing (888) 286-8010,
passcode: 87186146.
Representing management will be Constance H. Lau, president and
chief executive officer, Hawaiian Electric Industries, Inc., chairman,
Hawaiian Electric Company, Inc. and chairman and chief executive
officer, American Savings Bank, F.S.B.; T. Michael May, president and
chief executive officer, Hawaiian Electric Company, Inc.; and Timothy
K. Schools, president, American Savings Bank, F.S.B.
HEI supplies power to over 400,000 customers or 95% of Hawaii's
population through its electric utilities, Hawaiian Electric Company,
Inc., 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 American Savings Bank,
F.S.B., the state's third largest financial institution based on
year-end asset size.
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 (including future revenues, expenses, earnings
or losses 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 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" discussion (which is
incorporated by reference herein) set forth on page v of HEI's Annual
Report on Form 10-K for the year ended December 31, 2007, and in 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 this release.
Hawaiian Electric Industries, Inc. (HEI) and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) Three months ended Twelve months ended
March 31, March 31,
------------------- -----------------------
(in thousands, except per
share amounts) 2008 2007 2008 2007
----------------------------------------------------------------------
Revenues
Electric utility $623,889 $447,678 $2,282,525 $2,027,512
Bank 105,844 104,460 426,879 412,821
Other (116) 1,885 2,608 (368)
--------- --------- ----------- -----------
729,617 554,023 2,712,012 2,439,965
--------- --------- ----------- -----------
Expenses
Electric utility 572,906 434,686 2,113,949 1,893,382
Bank 82,481 86,032 337,934 332,850
Other 3,484 4,764 14,192 14,947
--------- --------- ----------- -----------
658,871 525,482 2,466,075 2,241,179
--------- --------- ----------- -----------
Operating income (loss)
Electric utility 50,983 12,992 168,576 134,130
Bank 23,363 18,428 88,945 79,971
Other (3,600) (2,879) (11,584) (15,315)
--------- --------- ----------- -----------
70,746 28,541 245,937 198,786
--------- --------- ----------- -----------
Interest expense - other
than on deposit
liabilities and other
bank borrowings (19,249) (20,511) (77,294) (77,072)
Allowance for borrowed
funds used during
construction 762 598 2,716 2,775
Preferred stock dividends
of subsidiaries (473) (473) (1,890) (1,890)
Allowance for equity funds
used during construction 1,901 1,232 5,888 6,032
--------- --------- ----------- -----------
Income before income taxes 53,687 9,387 175,357 128,631
Income taxes 19,720 2,623 63,375 46,203
--------- --------- ----------- -----------
Net income $ 33,967 $ 6,764 $ 111,982 $ 82,428
========= ========= =========== ===========
Basic earnings per common
share $ 0.41 $ 0.08 $ 1.35 $ 1.01
========= ========= =========== ===========
Diluted earnings per
common share $ 0.41 $ 0.08 $ 1.35 $ 1.01
=========-========= =========== ===========
Dividends per common share $ 0.31 $ 0.31 $ 1.24 $ 1.24
========= ========= =========== ===========
Weighted-average number of
common shares outstanding 83,472 81,448 82,716 81,260
========= ========= =========== ===========
Adjusted weighted-average
shares 83,614 81,713 82,876 81,435
========= ========= =========== ===========
Income (loss) by segment
Electric utility $ 24,585 $ 453 $ 76,288 $ 54,412
Bank 14,576 11,596 56,087 50,551
Other (5,194) (5,285) (20,393) (22,535)
--------- --------- ----------- -----------
Net income $ 33,967 $ 6,764 $ 111,982 $ 82,428
========= ========= =========== ===========
This information should be read in conjunction with the consolidated
financial statements and the notes thereto for the year ended
December 31, 2007 (included in HEI's Form 8-K dated February 21,
2008) and the consolidated financial statements and the notes thereto
in HEI's Quarterly Report on SEC Form 10-Q for the quarter ended
March 31, 2008 (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.
Hawaiian Electric Company, Inc. (HECO) and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended March 31, 2008 2007
----------------------------------------------------------------------
(in thousands)
Operating revenues $622,494 $446,797
--------- ---------
Operating expenses
Fuel oil 249,543 159,929
Purchased power 150,795 111,516
Other operation 55,579 47,193
Maintenance 23,613 27,336
Depreciation 35,434 34,267
Taxes, other than income taxes 57,486 42,547
Income taxes 15,378 4,506
--------- ---------
587,828 427,294
--------- ---------
Operating income 34,666 19,503
--------- ---------
Other income (loss)
Allowance for equity funds used during
construction 1,901 1,232
Other, net 1,096 (6,198)
--------- ---------
2,997 (4,966)
--------- ---------
Income before interest and other charges 37,663 14,537
--------- ---------
Interest and other charges
Interest on long-term debt 11,724 11,496
Amortization of net bond premium and expense 631 546
Other interest charges 986 2,141
Allowance for borrowed funds used during
construction (762) (598)
Preferred stock dividends of subsidiaries 229 229
--------- ---------
12,808 13,814
--------- ---------
Income before preferred stock dividends of HECO 24,855 723
Preferred stock dividends of HECO 270 270
--------- ---------
Net income for common stock $ 24,585 $ 453
========= =========
OTHER ELECTRIC UTILITY INFORMATION
Kilowatthour sales (millions) 2,409 2,404
Cooling degree days (Oahu) 954 845
Average fuel oil cost per barrel $ 93.89 $ 58.19
This information should be read in conjunction with the consolidated
financial statements and the notes thereto for the year ended
December 31, 2007 (included in HECO Exhibit 99.1 to HECO's Form 8-K
dated February 21, 2008) and the consolidated financial statements
and the notes thereto in HECO's Quarterly Report on SEC Form 10-Q for
the quarter ended March 31, 2008 (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.
American Savings Bank, F.S.B. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended March 31, 2008 2007
----------------------------------------------------------------------
(in thousands)
Interest and dividend income
Interest and fees on loans $63,465 $60,281
Interest and dividends on investment and mortgage-
related securities 24,451 28,165
------- -------
87,916 88,446
------- -------
Interest expense
Interest on deposit liabilities 18,220 20,738
Interest on other borrowings 19,149 18,406
------- -------
37,369 39,144
------- -------
Net interest income 50,547 49,302
Provision for loan losses 900 -
------- -------
Net interest income after provision for loan losses 49,647 49,302
------- -------
Noninterest income
Fees from other financial services 6,823 6,501
Fee income on deposit liabilities 6,794 6,055
Fee income on other financial products 1,804 2,012
Gain on sale of securities 935 -
Other income 1,572 1,446
------- -------
17,928 16,014
------- -------
Noninterest expense
Compensation and employee benefits 18,240 18,396
Occupancy 5,397 4,948
Equipment 3,114 3,478
Services 5,673 8,358
Data processing 2,616 2,557
Other expense 9,194 9,180
------- -------
44,234 46,917
------- -------
Income before income taxes 23,341 18,399
Income taxes 8,765 6,803
------- -------
Net income $14,576 $11,596
======= =======
Net interest margin (%) 3.16 3.07
This information should be read in conjunction with the consolidated
financial statements and the notes thereto for the year ended
December 31, 2007 (included in HEI Exhibit 13 to HEI's Form 8-K dated
February 21, 2008) and the consolidated financial statements and the
notes thereto in HEI's Quarterly Report on SEC Form 10-Q for the
quarter ended March 31, 2008 (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.
CONTACT:
Hawaiian Electric Industries, Inc.
Suzy P. Hollinger, 808-543-7385
Manager, Treasury and Investor Relations
Facsimile: 808-203-1155
shollinger@hei.com
SOURCE: Hawaiian Electric Industries, Inc.
