| Hawaiian Electric Industries, Inc. Reports Second Quarter 2006 Earnings |
HONOLULU--(BUSINESS WIRE)--Aug. 1, 2006--Hawaiian Electric Industries, Inc. (NYSE:HE) today reported income from continuing operations for the three months ended June 30, 2006, of $27.2 million, or 34 cents per share, compared with last year's second quarter income from continuing operations of $28.3 million, or 35 cents per share. "Quarter-over-quarter, electric utility results declined due to lower sales from cooler and less humid weather and customer conservation and higher operation and maintenance expenses, while bank results improved due to strong loan growth and an improved net interest margin," said Constance H. Lau, HEI president and chief executive officer. Hawaiian Electric Company's net income for the second quarter of 2006 was $17.3 million compared with $19.6 million for the same quarter last year. Kilowatthour sales declined 2.3% quarter-over-quarter or $8 million in revenues. "Although the number of customers grew during the quarter, they reduced their usage of electricity in response to weather conditions and the higher cost of electricity during the quarter," Lau said. Offsetting the effects of lower kilowatthour sales was a $10 million interim increase in quarterly revenues granted to the company's Oahu utility by the Hawaii Public Utilities Commission in late September 2005. Other operation and maintenance expenses were higher by $8.7 million in the second quarter compared to the second quarter of 2005, due in part to $2.5 million higher maintenance and $2.3 million of higher retirement benefits expenses. Production maintenance was higher due to increased generating station maintenance, and transmission and distribution maintenance was higher due to increased vegetation management and higher distribution line maintenance. The remaining increase in operation and maintenance expenses of $3.9 million includes increased staffing and other costs to support the increased level of peak demand that has occurred over the past five years as well as reliability, customer service and energy efficiency programs. Bank net income in the second quarter of 2006 increased almost 20% to $16.2 million compared with $13.6 million in the second quarter of 2005. "American Savings Bank's second quarter results were strong considering significant margin pressure from the prolonged flat/inverted yield curve," said Lau, "reflecting the solid growth of American Savings Bank's commercial and commercial real estate businesses and its transformation to a full-service community bank." Net interest income increased to $52.9 million in the second quarter of 2006 compared with $48.8 million in the second quarter of 2005. The increase in net interest income was due to higher loan balances, higher yields on loans and mortgage-related securities and investments and an increase in net interest margin. The bank's net interest margin increased to 3.30% in the second quarter of 2006, compared to 3.07% in the second quarter of 2005. Increased interest income from growth in loan balances and increased yields on loans and mortgage-related securities and investments in the second quarter of 2006 more than offset increased funding costs from higher short-term interest rates and a shift in the mix of deposits and borrowings. Also in the second quarter of 2006, continued strong asset quality offset the need to provision for the additional loan growth. The holding and other companies' results were $(6.3) million in the second quarter compared with $(4.9) million in the second quarter of 2005 due in part to $1.3 million of unrealized investment losses (after tax). HEI supplies power to over 400,000 customers or 95% of the Hawaii population through its electric utilities, Hawaiian Electric Company, Hawaii Electric Light Company and Maui Electric Company and provides a wide array of banking and other financial services to Hawaii consumers and businesses through American Savings Bank, the state's third largest bank based on 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 iv of HEI's Form 10-Q for the quarter ended March 31, 2006, 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 June 30,
-----------------------
(in thousands, except per share amounts) 2006 2005
----------------------------------------------------------------------
Revenues
Electric utility $ 503,967 $ 429,730
Bank 102,556 91,946
Other (1,554) 586
----------- -----------
604,969 522,262
----------- -----------
Expenses
Electric utility 464,121 387,083
Bank 76,397 69,744
Other 3,722 3,986
----------- -----------
544,240 460,813
----------- -----------
Operating income (loss)
Electric utility 39,846 42,647
Bank 26,159 22,202
Other (5,276) (3,400)
----------- -----------
60,729 61,449
----------- -----------
Interest expense-other than bank (19,134) (19,130)
Allowance for borrowed funds used during
construction 719 475
Preferred stock dividends of subsidiaries (473) (474)
Allowance for equity funds used during
construction 1,588 1,182
----------- -----------
Income from continuing operations before
income taxes 43,429 43,502
Income taxes 16,205 15,167
----------- -----------
Income from continuing operations 27,224 28,335
Discontinued operations-gain (loss) on
disposal, net of income taxes - (755)
----------- -----------
Net income $ 27,224 $ 27,580
=========== ===========
Per common share
Basic earnings (loss)
- Continuing operations $ 0.34 $ 0.35
- Discontinued operations - (0.01)
----------- -----------
$ 0.34 $ 0.34
=========== ===========
Diluted earnings (loss)
- Continuing operations $ 0.33 $ 0.35
- Discontinued operations - (0.01)
----------- -----------
$ 0.33 $ 0.34
=========== ===========
Dividends $ 0.31 $ 0.31
=========== ===========
Weighted-average number of common shares
outstanding 81,100 80,814
=========== ===========
Adjusted weighted-average shares 81,432 81,213
=========== ===========
Income (loss) from continuing operations by segment
Electric utility $ 17,286 $ 19,644
Bank 16,218 13,552
Other (6,280) (4,861)
----------- -----------
Income from continuing operations $ 27,224 $ 28,335
=========== ===========
Six months
ended June 30,
-----------------------
(in thousands, except per share amounts) 2006 2005
----------------------------------------------------------------------
Revenues
Electric utility $ 979,023 $ 804,505
Bank 202,560 189,170
Other (1,652) 1,215
----------- -----------
1,179,931 994,890
----------- -----------
Expenses
Electric utility 893,597 730,252
Bank 149,386 138,015
Other 7,068 8,503
----------- -----------
1,050,051 876,770
----------- -----------
Operating income (loss)
Electric utility 85,426 74,253
Bank 53,174 51,155
Other (8,720) (7,288)
----------- -----------
129,880 118,120
----------- -----------
Interest expense-other than bank (38,251) (37,965)
Allowance for borrowed funds used during
construction 1,421 902
Preferred stock dividends of subsidiaries (946) (950)
Allowance for equity funds used during
construction 3,136 2,269
----------- -----------
Income from continuing operations before
income taxes 95,240 82,376
Income taxes 35,679 29,946
----------- -----------
Income from continuing operations 59,561 52,430
Discontinued operations-gain (loss) on
disposal, net of income taxes - (755)
----------- -----------
Net income $ 59,561 $ 51,675
=========== ===========
Per common share
Basic earnings (loss)
- Continuing operations $ 0.73 $ 0.65
- Discontinued operations - (0.01)
---------- -----------
$ 0.73 $ 0.64
=========== ===========
Diluted earnings (loss)
- Continuing operations $ 0.73 $ 0.65
- Discontinued operations - (0.01)
----------- -----------
$ 0.73 $ 0.64
=========== ===========
Dividends $ 0.62 $ 0.62
=========== ===========
Weighted-average number of common shares
outstanding 81,041 80,741
=========== ===========
Adjusted weighted-average shares 81,360 81,145
=========== ===========
Income (loss) from continuing operations by segment
Electric utility $ 38,274 $ 32,029
Bank 33,045 31,313
Other (11,758) (10,912)
----------- -----------
Income from continuing operations $ 59,561 $ 52,430
=========== ===========
Twelve months
ended June 30,
-----------------------
(in thousands, except per share amounts) 2006 2005
----------------------------------------------------------------------
Revenues
Electric utility $1,980,902 $1,637,958
Bank 401,300 374,214
Other 18,403 7,867
----------- -----------
2,400,605 2,020,039
----------- -----------
Expenses
Electric utility 1,808,026 1,479,856
Bank 294,380 267,204
Other 15,017 18,682
----------- -----------
2,117,423 1,765,742
----------- -----------
Operating income (loss)
Electric utility 172,876 158,102
Bank 106,920 107,010
Other 3,386 (10,815)
----------- -----------
283,182 254,297
----------- -----------
Interest expense-other than bank (75,595) (74,588)
Allowance for borrowed funds used during
construction 2,539 2,067
Preferred stock dividends of subsidiaries (1,890) (1,901)
Allowance for equity funds used during
construction 5,972 4,941
----------- -----------
Income from continuing operations before
income taxes 214,208 184,816
Income taxes 79,633 66,817
----------- -----------
Income from continuing operations 134,575 117,999
Discontinued operations-gain (loss) on
disposal, net of income taxes - 1,158
----------- -----------
Net income $ 134,575 $ 119,157
=========== ===========
Per common share
Basic earnings (loss)
- Continuing operations $ 1.66 $ 1.46
- Discontinued operations - 0.02
----------- -----------
$ 1.66 $ 1.48
=========== ===========
Diluted earnings (loss)
- Continuing operations $ 1.66 $ 1.46
- Discontinued operations $ - $ 0.01
----------- -----------
$ 1.66 $ 1.47
=========== ===========
Dividends $ 1.24 $ 1.24
=========== ===========
Weighted-average number of common shares
outstanding 80,977 80,637
=========== ===========
Adjusted weighted-average shares 81,267 80,950
=========== ===========
Income (loss) from continuing operations by segment
Electric utility $ 79,047 $ 71,448
Bank 66,615 63,397
Other (11,087) (16,846)
----------- -----------
Income from continuing operations $ 134,575 $ 117,999
=========== ===========
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, 2005 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, 2006 and June 30, 2006 (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 Six months ended
June 30, June 30,
------------------- -------------------
(in thousands) 2006 2005 2006 2005
----------------------------------------------------------------------
Operating revenues $503,350 $428,807 $977,321 $802,497
--------- --------- --------- ---------
Operating expenses
Fuel oil 192,314 148,775 367,652 264,401
Purchased power 122,438 106,369 240,158 207,585
Other operation 47,934 41,794 89,953 83,110
Maintenance 22,382 19,837 39,434 37,775
Depreciation 32,542 30,822 65,075 61,642
Taxes, other than income taxes 46,218 39,293 90,741 75,264
Income taxes 11,020 12,293 24,244 20,031
--------- --------- --------- ---------
474,848 399,183 917,257 749,808
--------- --------- --------- ---------
Operating income 28,502 29,624 60,064 52,689
--------- --------- --------- ---------
Other income
Allowance for equity funds
used during construction 1,588 1,182 3,136 2,269
Other, net 521 777 1,430 1,620
--------- --------- --------- ---------
2,109 1,959 4,566 3,889
--------- --------- --------- ---------
Income before interest and
other charges 30,611 31,583 64,630 56,578
--------- --------- --------- ---------
Interest and other charges
Interest on long-term debt 10,776 10,656 21,554 21,565
Amortization of net bond
premium and expense 543 557 1,086 1,113
Other interest charges 2,226 702 4,139 1,775
Allowance for borrowed funds
used during construction (719) (475) (1,421) (902)
Preferred stock dividends of
subsidiaries 229 229 458 458
--------- --------- --------- ---------
13,055 11,669 25,816 24,009
--------- --------- --------- ---------
Income before preferred stock
dividends of HECO 17,556 19,914 38,814 32,569
Preferred stock dividends of
HECO 270 270 540 540
--------- --------- --------- ---------
Net income for common stock $ 17,286 $ 19,644 $ 38,274 $ 32,029
========= ========= ========= =========
OTHER ELECTRIC UTILITY INFORMATION
Kilowatthour sales (millions) 2,460 2,519 4,850 4,866
Cooling degree days (Oahu) 1,081 1,471 1,854 2,251
Average fuel cost per barrel $ 68.78 $ 51.90 $ 66.20 $ 48.96
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 year ended December
31, 2005 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, 2006 and June 30, 2006 (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 Six months ended
June 30, June 30,
------------------- -------------------
(in thousands) 2006 2005 2006 2005
----------------------------------------------------------------------
Interest and dividend income
Interest and fees on loans $ 57,323 $ 50,657 $112,476 $ 99,170
Interest and dividends on
investment and mortgage-
related securities 30,870 27,523 60,947 62,386
--------- --------- --------- ---------
88,193 78,180 173,423 161,556
--------- --------- --------- ---------
Interest expense
Interest on deposit
liabilities 17,001 12,460 32,394 24,477
Interest on other borrowings 18,308 16,893 35,470 34,641
--------- --------- --------- ---------
35,309 29,353 67,864 59,118
--------- --------- --------- ---------
Net interest income 52,884 48,827 105,559 102,438
Reversal of allowance for loan
losses - - - (3,100)
--------- --------- --------- ---------
Net interest income after
reversal of allowance for
loan losses 52,884 48,827 105,559 105,538
--------- --------- --------- ---------
Noninterest income
Fees from other financial
services 6,742 6,333 13,182 12,196
Fee income on deposit
liabilities 4,376 4,092 8,565 8,263
Fee income on other financial
products 2,132 2,154 4,569 4,589
Gain on sale of securities - 175 - 175
Other income 1,113 1,012 2,821 2,391
--------- --------- --------- ---------
14,363 13,766 29,137 27,614
--------- --------- --------- ---------
Noninterest expense
Compensation and employee
benefits 17,476 17,441 35,313 34,068
Occupancy 4,490 4,088 8,953 8,106
Equipment 3,636 3,302 7,132 6,701
Services 4,124 3,941 7,841 7,608
Data processing 2,547 2,503 5,007 5,548
Other expense 8,815 9,116 17,276 19,966
--------- --------- --------- ---------
41,088 40,391 81,522 81,997
--------- --------- --------- ---------
Income before minority
interests and income taxes 26,159 22,202 53,174 51,155
Minority interests - 18 - 45
Income taxes 9,941 8,631 20,129 19,793
--------- --------- --------- ---------
Income before preferred stock
dividends 16,218 13,553 33,045 31,317
Preferred stock dividends - 1 - 4
--------- --------- --------- ---------
Net income for common stock $ 16,218 $ 13,552 $ 33,045 $ 31,313
========= ========= ========= =========
Net interest margin (%) 3.30 3.07 3.30 3.21
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, 2005 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, 2006 and June 30, 2006 (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. |