News Column

Hawaiian Electric Industries Reports First Quarter 2014 Earnings

May 12, 2014



ENP Newswire - 12 May 2014

Release date- 08052014 - HONOLULU - Hawaiian Electric Industries, Inc. (NYSE - HE) today reported consolidated net income for common stock for the first quarter of 2014 of $45.9 million or $0.45 diluted earnings per share, compared to $33.7 million or $0.34 diluted EPS for the first quarter of 2013.

Yesterday, the HEI board of directors declared a dividend of $0.31 per share, continuing its 113-year history of paying continuous dividends.

'We are off to a solid start in 2014 with first quarter financial results aligned with our full year expectations. We're proud of our leadership in the nation's clean energy transformation, including integrating higher percentages of renewable and distributed generation than states across the nation. The policy guidance recently received from the Hawaii Public Utilities Commission will allow us to continue our work with more clarity as we invest in the modernization of our grid to integrate even more low-cost renewable generation in the future,' said Constance H. Lau, HEI president and chief executive officer.

'American Savings Bank continued to deliver solid results despite the ongoing low interest rate and challenging regulatory environment. The bank had annualized loan growth of 3.6% this quarter, while maintaining strong asset quality and financial returns. American's solid results enabled it to pay dividends of $8.75 million to HEI in the quarter while maintaining healthy capital levels,' added Lau.

HAWAIIAN ELECTRIC COMPANY CONTINUES INVESTMENTS FOR IMPROVED RELIABILITY TO BETTER SERVE OUR CUSTOMERS

Hawaiian Electric Company's1 net income for the first quarter of 2014 was $35.4 million compared to$24.4 million in the first quarter of 2013. The $11.0 million increase from the prior year was driven by the following items (on an after-tax basis):

$8 million lower operations and maintenance (O&M) expenses2 compared to the same quarter last year primarily due to the timing of overhauls, lower production expenses and lower customer service expenses which were elevated in the prior year quarter during the stabilization period for the new customer information system and

$6 million higher net revenues3 compared to the first quarter of 2013 primarily due to $8 million for the estimated recovery of costs for reliability and clean energy investments partially offset by $1 million due to reduced fuel efficiency performance of the generation units on Oahu which were run at lower levels compared to 2013 in part to integrate more renewable energy.

These were partially offset by (after-tax):

$2 million higher depreciation expense resulting from additional infrastructure investments for improved reliability and

$1 million higher interest expense.

Hawaiian Electric Company, unless otherwise defined, refers to the three utilities, Hawaiian Electric Company, Inc. on Oahu, Maui Electric Company, Limited, and Hawaii Electric Light Company, Inc.

Excludes net income neutral expenses covered by surcharges or by third parties of $2 million in both the first quarter of 2014 and 2013.

Net revenues represent the after-tax impact of 'Revenues' less the following expenses which are largely pass through items in revenues: 'fuel oil', 'purchased power' and 'taxes, other than income taxes' as shown on the Hawaiian Electric Company Consolidated Statements of Income.

Note: Amounts indicated as 'after-tax' in this earnings release are based upon adjusting items for the composite statutory tax rates of 39% for the utilities and 40% for the bank.

AMERICAN SAVINGS BANK CONTINUES TO DELIVER SOLID PERFORMANCE

American Savings Bank's (American) net income for the first quarter of 2014 was $14.5 million compared to $12.2 million in the fourth (or linked) quarter of 2013 and $14.2 million in the first quarter of 2013.

First quarter 2014 net income was $2.4 million higher than the linked quarter primarily driven by a $2 million (after-tax) gain on the sale of the municipal bond securities portfolio due to the strategic shift towards higher quality liquid assets and $2 million (after-tax) lower noninterest expenses ($1 million of which is due to lower compensation and benefits expense), partially offset by $1 million (after-tax) decrease in fee income, including lower mortgage banking income associated with lower refinancing volumes.

Compared to the first quarter of 2013, net income increased by $0.4 million. The increase was primarily driven by the $2 million (after-tax) gain on the sale of the municipal bond securities portfolio and lower provision for loan losses. These were largely offset by lower mortgage banking income from significantly lower refinancing activity and lower interchange fees due to the Durbin Amendment which placed a limit on interchange fees and became effective on July 1, 2013 for American.

Overall, American achieved solid profitability in the first quarter of 2014 with a return on average equity of 11.0% and a return on average assets of 1.10%.

Also, refer to the American news release issued on April 30, 2014.

HOLDING AND OTHER COMPANIES

The holding and other companies' net losses were $4.0 million in the first quarter of 2014, down from $4.9 million in the first quarter of 2013. The lower net losses were due to lower interest expense and higher tax benefits.

BOARD DECLARES QUARTERLY DIVIDEND

On May 6, 2014, the board of directors maintained HEI's quarterly cash dividend of $0.31 cents per share, payable on June 10, 2014, to shareholders of record at the close of business on May 22, 2014 (ex-dividend date is May 20, 2014). 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 May 6, 2014 of $23.22, HEI's yield is 5.3%.

HEI WEBCAST AND CONFERENCE CALL TO DISCUSS EARNINGS AND EPS GUIDANCE

Hawaiian Electric Industries, Inc. will conduct a webcast and conference call to review its first quarter 2014 earnings and 2014 earnings per share (EPS) guidance on Wednesday, May 7, 2014 at 7:00 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 (866) 270-6057, passcode: 47349847 for the teleconference call. The presentation for the webcast will be on HEI's website under the heading 'Investor Relations.' HEI and Hawaiian Electric Company 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, Hawaiian Electric Company's and American's press releases, HEI's and Hawaiian Electric Company'sSecurities and Exchange Commission (SEC) filings and HEI's public conference calls and webcasts. Also, at the Investor Relations section of HEI's website, investors may sign up to receive e-mail alerts (based on each investor's selected preferences).

The information on HEI's website is not incorporated by reference in this document or in HEI's and Hawaiian Electric Company'sSEC filings unless, and except to the extent, specifically incorporated by reference. Investors may also wish to refer to the Public Utilities Commission of the State of Hawaii (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 HEI's and Hawaiian Electric Company'sSEC filings.

An on-line replay of the webcast will be available on HEI's website beginning about two hours after the event. Audio replays of the teleconference will also be available approximately two hours after the event through May 21, 2014, by dialing (888) 286-8010, passcode: 24249299.

HEI supplies power to approximately 450,000 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, 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, 2013 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.

These 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, Hawaiian Electric Company, American 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 Relations

Tel: (808) 543-7384


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Source: ENP Newswire


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