Form U-3A-2

 

File No. 69-284

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM U-3A-2

 

Statement by Holding Company Claiming Exemption

Under Rule U-3A-2 from the Provisions of the

Public Utility Holding Company Act of 1935

 

To Be Filed Annually Prior to March 1

 

HAWAIIAN ELECTRIC INDUSTRIES, INC. and

HAWAIIAN ELECTRIC COMPANY, INC.

 

each hereby files with the Securities and Exchange Commission (SEC), pursuant to Rule 2, its statement claiming exemption as a holding company from the provisions of the Public Utility Holding Company Act of 1935 (PUHCA), and submits the following information:

 

1.   Name, State of organization, location and nature of business of claimant and every subsidiary thereof, other than any exempt wholesale generator (EWG) or foreign utility company in which claimant directly or indirectly holds an interest.

 

Hawaiian Electric Industries, Inc. (HEI) was incorporated under the laws of the State of Hawaii on July 20, 1981, for the purpose of becoming the holding company of Hawaiian Electric Company, Inc. (HECO) and its subsidiaries. Its principal executive office is located at 900 Richards Street, Honolulu, Hawaii 96813. The restructuring became effective (i.e., HEI became the holding company of HECO) on July 1, 1983. HEI is a nonutility holding company which currently conducts no business and owns no material assets other than the common stock of its direct subsidiaries (most of which are not significant subsidiaries), including the common stock of HECO, Malama Pacific Corp. (MPC), The Old Oahu Tug Service, Inc. (TOOTS), HEI Diversified, Inc. (HEIDI), HEI Properties, Inc. (HEIPI), Pacific Energy Conservation Services, Inc. (PECS), HEI Power Corp. (HEIPC), HEI District Cooling, Inc. (HEIDC), ProVision Technologies, Inc. (ProVision), HEI Leasing, Inc. (HEILI), Hycap Management, Inc. (Hycap), Hawaiian Electric Industries Capital Trust I (HEI Trust I), Hawaiian Electric Industries Capital Trust II and Hawaiian Electric Industries Capital Trust III. HEI and its direct and indirect subsidiaries are collectively referred to as the Company. As of December 31, 2002, HEI also owned three series of income notes with a face amount of $45.8 million and an estimated fair value and carrying value of $8.0 million and held cash and cash equivalents of $25.1 million, intercompany notes and receivables of $7.2 million and other assets aggregating approximately $7.0 million

HECO is the parent company of Hawaii Electric Light Company, Inc. (HELCO), Maui Electric Company, Limited (MECO), HECO Capital Trust I (HECO Trust I), HECO Capital Trust II (HECO Trust II) and Renewable Hawaii, Inc. (RHI).HECO was incorporated under the laws of the

 

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Kingdom of Hawaii on October 13, 1891, under the name of The Hawaiian Electric Company, Limited. Its name was changed to Hawaiian Electric Company, Inc., on March 16, 1964. Its principal executive office is located at 900 Richards Street, Honolulu, Hawaii 96813. It is a regulated operating electric public utility engaged in the production, purchase, transmission, distribution and sale of electricity on the island of Oahu, State of Hawaii. HELCO was incorporated under the laws of the Republic of Hawaii on December 5, 1894. Its principal executive office is located at 1200 Kilauea Avenue, Hilo, Hawaii 96720. It is a regulated operating electric public utility engaged in the production, purchase, transmission, distribution and sale of electricity on the island of Hawaii, State of Hawaii. MECO was incorporated under the laws of the Territory of Hawaii on April 28, 1921, and purchased the franchise and certain assets of Island Electric Company, Limited, which had been organized in 1911. Its principal executive office is located at 210 Kamehameha Avenue, Kahului, Maui, Hawaii 96732. It is a regulated operating electric public utility engaged in the production, purchase, transmission, distribution and sale of electricity on the islands of Maui, Lanai and Molokai, all located in the State of Hawaii. HECO Trust I was formed under the laws of the State of Delaware on December 31, 1996. HECO Trust I is a statutory business trust formed for the exclusive purposes of (i) issuing and selling its common securities to HECO and its 8.05% Cumulative Quarterly Income Preferred Securities, Series 1997 (QUIPS I) to the public in an underwritten public offering in March 1997, (ii) using the proceeds from the sale of QUIPS I and the common securities to acquire 8.05% Junior Subordinated Deferrable Interest Debentures, Series 1997 issued by HECO and its subsidiaries, MECO and HELCO, (iii) maintaining the status of HECO Trust I as a grantor trust for United States federal income tax purposes and (iv) engaging in only those other activities necessary, convenient or incidental thereto. HECO Trust II was formed under the laws of the State of Delaware on October 15, 1998. HECO Trust II is a statutory business trust formed for the exclusive purposes of (i) issuing and selling its common securities to HECO and its 7.30% Cumulative Quarterly Income Preferred Securities, Series 1998 (QUIPS II) to the public in an underwritten public offering in December 1998, (ii) using the proceeds from the sale of QUIPS II and the common securities to acquire 7.30% Junior Subordinated Deferrable Interest Debentures, Series 1998 issued by HECO and its subsidiaries, MECO and HELCO, (iii) maintaining the status of HECO Trust II as a grantor trust for United States federal income tax purposes and (iv) engaging in only those other activities necessary, convenient or incidental thereto. The Bank of New York is the corporate trustee of HECO Trust I and HECO Trust II and its principal administrative offices are located at 101 Barclay Street 21st floor, New York, New York 10286. RHI was formed under the laws of the State of Hawaii on December 19, 2002 to invest in renewable energy projects. Its principal executive office is located at 900 Richards Street, Honolulu, Hawaii 96813.

MPC’s principal executive office is located at 900 Richards Street, Honolulu, Hawaii 96813. MPC was incorporated under the laws of the State of Hawaii on December 5, 1985. MPC and its subsidiaries are nonutility companies which were organized to invest in, develop and sell real estate. On September 14, 1998, the Board of Directors of HEI adopted a plan to exit the residential real estate development business (engaged in by MPC and its subsidiaries). Accordingly, MPC management commenced a program to sell all of MPC’s real estate assets and investments and HEI reported MPC as a discontinued operation in the Company’s consolidated statements of income in the third quarter of 1998. As real estate assets and investments have been sold or transferred, the entities which held them and entities which were no longer active have been dissolved. In 2002, Malama Development Corp. and Malama Mohala Corp.were dissolved.

Dillingham Tug & Barge Corporation was incorporated under the laws of the State of Hawaii on March 16, 1972, and changed its name to Hawaiian Tug & Barge Corp. (HTB) on October 1, 1986 when HEI acquired HTB from Dillingham Corporation. On November 10, 1999, the sale of substantially all of the operating assets of HTB was closed and HTB’s name was changed

 

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to TOOTS. Its principal executive office is located at 900 Richards Street, Honolulu, Hawaii 96813. HTB was a nonutility company organized to provide charter towing and harbor-assist services primarily within the State of Hawaii. TOOTS no longer provides charter towing and harbor–assist towing services and is currently conducting shut–down activities, after which it is expected to be dissolved.

HEIDI is the parent company of American Savings Bank, F.S.B. (ASB), which is the parent company of American Savings Investment Services Corp. (ASISC, which is the parent company of Bishop Insurance Agency of Hawaii, Inc.), AdCommunications, Inc., American Savings Mortgage Co., Inc., ASB Service Corporation and ASB Realty Corporation. HEIDI was incorporated under the laws of the State of Hawaii on January 6, 1988. Its principal executive office is located at 900 Richards Street, Honolulu, Hawaii 96813. It is a nonutility holding company which currently conducts no business and owns no material assets other than the common stock of ASB and notes receivable from HEI and HEIPC. Also owns a small percentage (0.2%) of ASB Realty Corporation’s common stock. ASB was chartered by the Federal Home Loan Bank as a federal savings bank on January 23, 1987, and is qualified to do business in the State of Hawaii. Its subsidiaries were incorporated under the laws of the State of Hawaii. The principal executive offices of ASB and its subsidiaries are located at 915 Fort Street Mall, Honolulu, Hawaii 96813. ASB and its subsidiaries are nonutility companies providing financial and related services. HEI acquired ASB on May 26, 1988. ASB’s business consists primarily of attracting deposits from the general public and using such deposits, together with borrowings and other funds, to (1) make residential and other real estate-related loans which enable borrowers to purchase, refinance, construct or improve real estate, (2) invest in loans secured by real estate and in mortgage-related and other securities, and (3) make various types of business, commercial and consumer loans. ASB Service Corporation, which was incorporated on October 23, 1990, holds real estate for use by ASB employees; American Savings Mortgage Co., Inc., which was incorporated on October 23, 1990, is a mortgage brokerage company; AdCommunications, Inc., which was incorporated on October 23, 1990, is an advertising agency; ASISC, which was incorporated on October 11, 1990, markets insurance and investment products; and ASB Realty Corporation, which was incorporated on March 27, 1998 and is a real estate investment trust, owns and manages real estate assets. On March 15, 2001, ASISC acquired all of the capital stock of Bishop Insurance Agency of Hawaii, Inc. (BIA), which was incorporated as LKP Corp. under the laws of the State of Hawaii on February 23, 1984. LKP Corp. changed its name to BIA on May 18, 1984, and BIA primarily markets commercial property and casualty insurance products as an insurance agency.

HEIPI was incorporated under the laws of the State of Hawaii on February 9, 1998 as HEIDI Real Estate Corp., and its name was changed to HEIPI on September 23, 1999. Ownership of HEIPI was transferred to HEI by HEIDI on November 18, 1999. Its principal executive office is located at 900 Richards Street, Honolulu, Hawaii 96813. HEIPI was formed as a nonutility company to hold real estate and related assets. HEIPI is a nonutility company which holds passive investments.

PECS was incorporated under the laws of the State of Hawaii on August 12, 1994. Its principal executive office is located at 900 Richards Street, Honolulu, Hawaii 96813. PECS was formed as a nonutility service company to promote energy conservation in Hawaii and the Pacific Basin, but had no operations until December 1996. PECS currently is a contract services company providing limited services to an affiliate.

HEIPC is the parent company of HEI Power Corp. Saipan and HEI Power Corp. International, which is the parent company of HEIPC Philippine Development, LLC, Lake Mainit Power, LLC, HEI Power Corp. Philippines (formerly HEIPC Phnom Penh Power (General), LLC), LLC, HEI Power Corp. China, HEI Power Corp. China II, the 100% owner of United Power Pacific Company Limited (UPP), which in turn is the 75% owner of Baotou Tianjiao Power Co., Ltd. (a

 

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foreign utility company, see items 4a and 4b), HEI Power Corp. China III and HEI Power Corp. China IV. HEIPC is also the parent company of HEI Investments, Inc. (HEIII).

HEIPC was incorporated under the laws of the State of Hawaii on March 24, 1995. Its principal executive office is located at 1001 Bishop Street, American Savings Bank Tower, Honolulu, Hawaii 96813. It is a nonutility company originally formed to pursue independent power and integrated energy services projects in Asia and the Pacific. Those direct and indirect subsidiaries of HEIPC which are not foreign utility companies were originally formed generally for the purposes of directly or indirectly acquiring and maintaining an interest in one or more foreign utility companies or developing or operating utility facilities in foreign countries. On October 23, 2001, the board of directors of HEI adopted a formal plan to exit the international power business (engaged in by HEIPC and its subsidiaries, the HEIPC Group). Accordingly, HEIPC management commenced a program to dispose of all the HEIPC Group’s remaining projects and investments and HEI recorded HEIPC as a discontinued operation in the Company’s consolidated statements of income in the third quarter of 2001.

On November 21, 2001, HEI sold HEI Power Corp. Guam to Mirant Asia-Pacific (Guam) Investments, Inc. for a nominal gain. All of HEIPC’s other direct and indirect subsidiaries will be wound up in due course as the HEIPC Group disposes of its remaining projects and investments.

The following are existing direct and indirect subsidiaries of HEIPC which have their principal executive offices at Ugland House, P.O. Box 309, George Town, Grand Cayman, Cayman Islands, British West Indies (Cayman Location) and were incorporated under the laws of the Cayman Islands (incorporation dates are noted in parentheses) and which were active until the decision was made to exit the international power business: HEI Power Corp. International (International) (April 10, 1996); HEIPC Philippine Development, LLC (Philippine Develop) (September 9, 1996); and HEI Power Corp. Philippines (April 24, 1996). Lake Mainit Power, LLC is a subsidiary of HEIPC at the Cayman Location which was incorporated under the laws of the Cayman Islands on May 21, 1996 but which at all times has been inactive. In accordance with the plan to exit the international power business the following additional former indirect subsidiaries were struck from the official register of companies in the Cayman Islands and thereupon dissolved (date of dissolution is noted in the parentheses): HEIPC Philippine Ventures (March 29, 2002); HEIPC Bulacan I, LLC (March 29, 2002); Bulacan II, LLC (March 29, 2002); HEIPC Cambodia Ventures (March 29, 2002); and, HEIPC Phnom Penh Power (Limited), LLC (March 29, 2002).

The following are indirect subsidiaries of HEIPC which have their principal executive offices at 10, Frere Felix Valis St., Port-Louis, Mauritius (Mauritius Location) and were incorporated under the laws of Mauritius (incorporation dates are noted in parentheses) and which were active until the decision was made to exit the international power business: HEI Power Corp. China (December 10, 1997); HEI Power Corp. China II (China II) (June 10, 1998); and UPP (June 29, 1998). The following are indirect subsidiaries of HEIPC at the Mauritius Location which were incorporated under the laws of Mauritius (incorporation dates are noted in parentheses) but which at all times have been inactive: HEI Power Corp. China III (June 24, 1998) and HEI Power Corp. China IV (June 24, 1998).

HEI Power Corp. Saipan (incorporated April 1, 1998) is a direct subsidiary of HEIPC incorporated under the laws of the Commonwealth of the Northern Mariana Islands, with its principal executive offices at P.O. Box 410, Saipan, MP 96950, and is undergoing dissolution.

On January 26, 2000, HEI Investment Corp. (HEIIC) changed its name to HEIII. HEIIC was incorporated under the laws of the State of Hawaii on May 25, 1984. HEIII’s principal executive office is located at 900 Richards Street, Honolulu, Hawaii 96813. It holds investments in leveraged leases. In February 2000, HEIII was recapitalized and all its common stock and one series of its preferred stock was contributed to HEIPC. In March 2000, HEIII registered (i.e., continued) in Nova Scotia, Canada and its subsidiary, HEIPC Philippines Holding Co., Inc. (Phil Holding), acquired an

 

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indirect interest in East Asia Power Resources Corporation (EAPRC), (a foreign utility company) through a 50% interest in EPHE Philippines Energy Company (EPHE), Inc. Phil Holding, a subsidiary of HEIII, was incorporated on February 8, 2000, under the laws of the Republic of the Philippines. In December 2000, Phil Holding wrote off its indirect investment in EAPRC. In December 2001, HEIII, a Hawaii corporation, withdrew its registration to do business in Nova Scotia, Canada. This was accomplished by continuing out of Nova Scotia, domesticating in Delaware and then merging the Delaware registered corporation into the pre-existing Hawaii corporation. On July 4, 2002, Phil Holding was dissolved by shortening its term of its existence. Thereafter, the capital stock of EPHE held by Phil Holding at the time of its dissolution was held by trustees-in-liquidation until the Philippine Securities and Exchange Commission approved, on December 10, 2002, EPHE’s capital stock reduction which cancelled those shares previously held by Phil Holding.

On December 30, 1985, HEIIC (now known as HEIII) acquired, as part of its investment portfolio, a 15.1899% undivided interest in Plant Robert W. Scherer Unit No. 2, an 818-megawatt (MW) coal-fired generating unit located in Monroe County, Georgia in a sale and leaseback transaction (the Transaction) with Oglethorpe Power Corporation (An Electric Membership Generation and Transmission Corporation). The Transaction is described in the Form U-7D filed by the Wilmington Trust Company and William J. Wade, owner trustees on behalf of HEIIC on December 30, 1985. The Transaction is also the subject of letters (dated December 16 and 24, 1985), from Mudge Rose Guthrie Alexander and Ferdon to the SEC, to which a reply was sent by Mr. Lewis B. Reich, Special Counsel (Reference No. 85-1216E-OPUR). Two amendments to the Form U-7D were filed on October 20, 1986 and on January 16, 1998 for the refinancings of the nonrecourse debt secured by this lease interest. These refinancings had no impact on HEIIC’s investment return because, under the lease agreement, the lessee is entitled to the benefit of any refinancing. The undersigned takes the position that the passive nature of the ownership by HEIIC which results from its participation in the Transaction is exactly comparable to the form of ownership which would qualify under Rule 7(d)(1) under PUHCA. Accordingly, although the information contained in the aforesaid Amendment No. 1 was submitted, the undersigned and HEIIC reserve all rights to claim (and do hereby claim) that by virtue of HEIIC’s participation in the Transaction, HEIIC has not acquired “ownership” of facilities used for the generation, transmission or distribution of electric energy for sale so as to result in HEIIC’s becoming an “electric utility company” as defined in Section 2(a)(3) of the Act.

Other direct or indirect subsidiaries or investments of HEIPC which are (or were) foreign utility companies are listed under item 4a.

HEIDC was incorporated under the laws of the State of Hawaii on August 17, 1998. Its principal executive office is located at 900 Richards Street, Honolulu, Hawaii 96813. HEIDC was formed to develop, build, own, operate and/or maintain, either directly or indirectly, central chilled water, cooling system facilities, and other energy related products and services for commercial and residential buildings. HEIDC currently owns no significant assets and is inactive.

ProVision was incorporated under the laws of the State of Hawaii on October 13, 1998. Its principal executive office is located at 900 Richards Street, Honolulu, Hawaii 96813. ProVision was formed to sell, install, operate and maintain on-site power generation equipment and auxiliary appliances in Hawaii and the Pacific Rim.

HEILI was incorporated under the laws of the State of Hawaii on February 28, 2000. Its principal executive office is located at 900 Richards Street, Honolulu, Hawaii 96813. HEILI was formed to own real estate subject to leases. HEILI currently owns no significant assets and is inactive.

Hycap was incorporated under the laws of the State of Delaware on January 22, 1997. Its registered agent’s office is located at PL&F Service, One Rodney Square, 10th Floor, Tenth and

 

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King Streets, Wilmington, Delaware 19801. Hycap is a nonutility company formed in connection with a trust preferred securities offering to be the sole general partner of HEI Preferred Funding, LP (the Partnership). The Partnership is a limited partnership formed under the Delaware Revised Uniform Limited Partnership Act, as amended, pursuant to an agreement of limited partnership and the filing of a certificate of limited partnership with the Secretary of State on December 23, 1996, which was subsequently amended by an amended and restated agreement of limited partnership dated as of February 1, 1997. Its principal executive office is located at 300 Delaware Avenue, Suite 1704, Wilmington, Delaware 19801. The Partnership is managed by the general partner and exists for the exclusive purposes of (a) purchasing certain eligible debt instruments of HEI and the wholly owned subsidiaries of HEI (collectively, the Affiliate Investment Instruments) and certain U.S. government obligations and commercial paper of unaffiliated entities (Eligible Debt Securities) with the proceeds from (i) the sale of its Partnership Preferred Securities, representing limited partner interests in the Partnership, to HEI Trust I and (ii) a capital contribution by HEI in exchange for the general partner interest in the Partnership, (b) receiving interest and other payments on the Affiliate Investment Instruments and the Eligible Debt Securities held by the Partnership from time to time, (c) making distributions on the Partnership Preferred Securities and distributions on the general partner interest in the Partnership if, as and when declared by the general partner in its sole discretion, (d) subject to the restrictions and conditions contained in the Agreement of Limited Partnership, making additional investments in Affiliate Investment Instruments and Eligible Debt Securities and disposing of any such investments and (e) except as otherwise limited in the Agreement of Limited Partnership, entering into, making and performing all contracts and other undertakings, and engaging in those activities and transactions as the general partner deems necessary or advisable for carrying out the purposes of the Partnership.

HEI Trust I, Hawaiian Electric Industries Capital Trust II and Hawaiian Electric Industries Capital Trust III were formed under the laws of the State of Delaware on December 19, 1996. The Bank of New York is the corporate trustee of each of these trusts and its principal administrative office is located at 101 Barclay Street, 21st Floor, New York, NY 10286. HEI Trust I is a statutory business trust formed for the exclusive purposes of (i) issuing in February of 1997 its 8.36% Trust Originated Preferred Securities and its 8.36% Common Securities, (ii) purchasing the 8.36% Partnership Preferred Securities, representing the limited partner interests in HEI Preferred Funding, LP, with the proceeds from the sale of Trust Originated Preferred Securities and Common Securities, (iii) receiving distributions on the Partnership Preferred Securities, (iv) making distributions on the Trust Originated Preferred Securities, and (v) engaging in only those other activities necessary or incidental thereto. Hawaiian Electric Industries Capital Trust II and Hawaiian Electric Industries Capital Trust III have at all times been inactive.

2.   A brief description of the properties of claimant and each of its subsidiary public utility companies used for the generation, transmission and distribution of electric energy for sale, or for the production, transmission and distribution of natural or manufactured gas, indicating the location of principal generating plants, transmission lines, producing fields, gas manufacturing plants and electric and gas distribution facilities, including all such properties which are outside the State in which claimant and its subsidiaries are organized and all transmission or pipelines which deliver or receive electric energy or gas at the borders of such State.

HEI is a nonutility holding company which currently conducts no business and owns no material assets other than as listed under item 1. Currently, the consolidated revenues of HEI are derived primarily from electric service, bank operations and passive investments.

 

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HECO owns and operates three electric generating plants located on the island of Oahu, with an aggregate generating capability of 1,263 MW as of December 31, 2002. HECO’s power purchase agreements (PPAs) with Kalaeloa Partners, L.P., AES Barbers Point, Inc. and Honolulu Resource Recovery Venture each provided for an additional 180 MW, 180 MW and 46 MW, respectively, of firm generating capability as of December 31, 2002.

HELCO owns and operates electric generating equipment with an aggregate generating capability of 151 MW as of December 31, 2002. Its five power plants are located on the island of Hawaii. Under PPAs with Puna Geothermal Venture, Hilo Coast Power Company and Hamakua Energy Partners, L.P., HELCO was being provided an additional 88 MW of firm generating capability as of December 31, 2002. HELCO currently owns four small run-of-river hydro units, of which three are currently operating, and a windfarm at Lalamilo, which consists of 60 operating wind machines with a total operating capacity of 1.2 MW as of December 31, 2002.

MECO owns and operates electric generating equipment located on the islands of Maui, Lanai and Molokai, with an aggregate generating capability of 257 MW as of December 31, 2002. A PPA between MECO and a sugar company provided for an additional 16 MW of firm generating capability as of December 31, 2002.

HECO, HELCO and MECO also own land, buildings, overhead transmission lines, overhead distribution lines, underground cables, fully owned or jointly owned poles, steel or aluminum high voltage transmission towers, transmission and distribution substations, fuel oil storage facilities and other property and equipment used in the business of generating, purchasing, transmitting, distributing and selling electric energy.

 

3.   The following information for the last calendar year with respect to claimant and each of its subsidiary public utility companies:

 

(a)   Number of kwh. of electric energy sold (at retail or wholesale), and Mcf. of natural or manufactured gas distributed at retail.

 

In 2002, HEI sold no kilowatthours of electric energy, HECO sold at retail 7,390,366,793 kwh. of electric energy, HELCO sold at retail 995,197,893 kwh. of electric energy, and MECO sold at retail 1,158,717,131 kwh. of electric energy.

 

(b)   Number of kwh. of electric energy and Mcf. of natural or manufactured gas distributed at retail outside the State in which each such company is organized.

 

None.

 

(c)   Number of kwh. of electric energy and Mcf. of natural or manufactured gas sold at wholesale outside the State in which each such company is organized, or at the State line.

 

None.

 

(d)   Number of kwh. of electric energy and Mcf. of natural or manufactured gas purchased outside the State in which each such company is organized or at the State line.

 

None.

 

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4.   The following information for the reporting period with respect to claimant and each interest it holds directly or indirectly in an EWG or a foreign utility company, stating monetary amounts in United States dollars:

 

(a)   Name, location, business address and description of the facilities used by the EWG or foreign utility company for the generation, transmission and distribution of electric energy for sale or for the distribution at retail of natural or manufactured gas.

 

On December 4, 1998, HEI acquired indirectly through Philippine Develop an interest in Cagayan Electric Power & Light Co., Inc. (CEPALCO) which has its principal executive offices at Cagayan de Oro City, Misamis Oriental, Philippines and is incorporated under the laws of the Philippines. After a subsequent purchase of common stock and the conversion of preferred stock to common stock, Philippine Develop currently owns approximately 22% of the outstanding common stock of CEPALCO. CEPALCO is a privately owned regulated local distribution company on the island of Mindanao. It operates and maintains three substations, with a total capacity of 75 MVA, and 47 kilometers of transmission lines (69 KV and 138 KV) and 1,000 kilometers of distribution lines. It also has an interest in Mindanao Energy Systems, Inc., a Philippine power generation company that owns and operates an 18.9 MW Bunker-C fed diesel power generating facility.

On or about September 3, 1998, HEI acquired an indirect 80% interest in UPP (through HEI’s indirect subsidiary China II) and an effective 60% interest in Baotou Tianjiao Power Co., Ltd. (Tianjiao) which has its principal executive offices at Suite 906, Baotou Youdian Building, Kun District, Baotou 014010, Inner Mongolia, China and is a Sino-foreign cooperative joint venture established under the laws of the People’s Republic of China. On December 30, 1999, China II acquired the remaining 20% interest in UPP for an effective 75% interest in Tianjiao. Tianjiao was formed to construct, operate, and maintain a 200-MW (net) coal-fired power plant in Baotou, Inner Mongolia, China, over a 22 year period, which includes construction. The power plant was planned to be built “inside the fence” for Baotou Iron & Steel (Group) Co., Ltd. (BaoSteel), which was to be the sole purchaser of the power. At the end of the term, the plant was to be transferred by Tianjiao to BaoSteel (which owns a 25% interest in Tianjiao). Construction was stopped, however, due to delays in obtaining a satisfactory interconnection agreement between Tianjiao and the Inner Mongolia Power Company (IMPC). The IMPC was seeking to limit the joint venture’s load, which is inconsistent with the terms of the project approvals and the power purchase contract. The HEIPC Group no longer believes a satisfactory interconnection arrangement can be obtained and intends to withdraw from the project. In the third quarter of 2001, the HEIPC Group wrote off its remaining investment in the project. The HEIPC Group is pursuing recovery of the $25 million of costs incurred in connection with the joint venture interest; however, there can be no assurance that any amounts will be recovered. (See item 1, HEI is exiting the international power business and will be disposing of all of the HEIPC Group projects and investments.)

On March 6, 2000, HEI acquired indirectly through Phil Holding a 50% interest in EPHE and thereby an approximately 46% indirect interest in EAPRC, which has its principal executive offices at 20th Floor, One Magnificent Mile Building, San Miguel Avenue, Pasig City, Metro Manila, Philippines and is incorporated under the laws of the Republic of the Philippines. At the time of the acquisition, EAPRC was a holding company primarily engaged in the electric generation business in Manila through its direct and indirect subsidiaries using land and barge-based generating facilities. In December 2000, Phil Holding wrote off its indirect investment in EAPRC. Phil Holding was dissolved in July 2002 by shortening the term of its existence.

 

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(b)   Name of each system company that holds an interest in such EWG or foreign utility company and description of the interest held.

 

International owns all of the issued and outstanding shares of common stock of Philippine Develop. Philippine Develop owns approximately 22% of the common stock of CEPALCO.

International owns all of the issued and outstanding shares of common stock of China II. China II owns 100% of the issued and outstanding shares of UPP. UPP owns 75% of Tianjiao.

HEI owns all of the issued and outstanding shares of common stock of HEIPC. HEIPC owns all of the issued and outstanding shares of common stock of International.

 

(c)   Type and amount of capital invested, directly or indirectly, by the holding company claiming exemption; any direct or indirect guarantee of the security of the EWG or foreign utility company by the holding company claiming exemption; and any debt or other financial obligation for which there is recourse, directly or indirectly, to the holding company claiming exemption or another system company, other than the EWG or foreign utility company.

 

As of December 31, 2002, HEI had invested, through HEIPC and its subsidiaries, $9.7 million in CEPALCO preferred and common stock of which $2.7 million had been written off in 2001. As of December 31, 2002, there were no intercompany borrowings by CEPALCO from HEI or any other HEI system company. As of December 31, 2002, HEI had not directly or indirectly guaranteed the securities of CEPALCO and there was no debt or other financial obligation relating to CEPALCO for which there was recourse against HEI or any other HEI system company (other than CEPALCO).

As of December 31, 2002, HEI had invested, through HEIPC and its subsidiaries, $25.1 million in connection with the Tianjiao project in China. As of December 31, 2002, the investment had been written off. As of December 31, 2002, there were no intercompany borrowings by Tianjiao from HEI or any other HEI system company. As of December 31, 2002, HEI had not directly or indirectly guaranteed the securities of Tianjiao and there was no debt or other financial obligation relating to Tianjiao for which there was recourse against HEI or any other HEI system company (other than Tianjiao), except for UPP’s conditional nonrecourse commitment to invest an additional 586 million Renminbi (approximately $70 million) in Tianjiao. It is UPP’s position that the conditions to the nonrecourse commitment have not been, and cannot now be, satisfied and it does not intend to make any further investment in Tianjiao.

As of December 31, 2002, HEI had invested, through HEIPC and its subsidiaries, $89.8 million in EAPRC and subsidiaries, of which all $89.8 million had been recorded as operating losses or written off in 2000 and 2001. As of December 31, 2002, there were no intercompany borrowings by EAPRC or EAPRC’s subsidiaries from HEI or any other HEI system company. HEI had indirectly guaranteed $10 million of EAPRC’s and a subsidiary’s loans, and the potential payment obligation under this guaranty was accrued as of December 31, 2000, simultaneously with the write-off of the investment in EAPRC. In the first quarter of 2001, HEI was released from $1.5 million of the guaranty obligation. Subsequently in 2002, HEI paid the remaining guaranty obligation of $8.5 million.

 

(d)   Capitalization and earnings of the EWG or foreign utility company during the reporting period.

 

As of December 31, 2002, the investment in CEPALCO preferred and common stock was carried at $7 million. In 2002, Philippine Develop received approximately $30,000 in dividends from

 

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CEPALCO. The HEIPC Group recognized an impairment loss on the CEPALCO investment of approximately $2.7 million in the third quarter of 2001.

As of December 31, 2002, the investment in Tianjiao was carried (on the HEI consolidated balance sheet) at nil. In 2002, HEIPC and its subsidiaries received no dividends (or other distributions) from Tianjiao and recorded no equity in earnings from Tianjiao.

 

(e)   Identify any service, sales or construction contract(s) between the EWG or foreign utility company and a system company, and describe the services to be rendered or goods sold and fees or revenues under such agreement(s).

 

CEPALCO and Tianjiao have no service, sales or construction contracts with any HEI affiliate. However, certain HEI affiliates provide general management and other services to Tianjiao in connection with UPP’s obligations under the cooperative joint venture agreement. The HEI affiliates receive no compensation from Tianjiao for these services.

 

EXHIBIT A

 

Unaudited consolidating statements of income and retained earnings of Hawaiian Electric Industries, Inc. and its subsidiary companies for the calendar year 2002, together with an unaudited consolidating balance sheet of Hawaiian Electric Industries, Inc. and its subsidiary companies as of December 31, 2002, are attached hereto as Exhibit A.

Unaudited consolidating income and retained earnings information for the calendar year 2002 for Hawaiian Electric Company, Inc. and its subsidiary companies, for HEI Diversified, Inc. and its subsidiary company, for American Savings Bank, F.S.B. and its subsidiary companies, and for American Savings Investment Services Corp. and its subsidiary, together with unaudited consolidating balance sheet information for said companies and their respective subsidiaries as of December 31, 2002, are attached hereto as Exhibits A-1 through A-4. Unaudited consolidating income, retained earnings and balance sheet information for MPC and its subsidiaries and HEIPC and its subsidiaries are not provided as they are being accounted for as discontinued operations in HEI’s consolidated financial statements.

 

EXHIBIT B

 

The following organizational chart shows the relationship to other system companies of each foreign utility company in which HEI has a direct or indirect interest.

 

HEI – HEIPC – International – China II – UPP – Tianjiao (UPP owns 75%)

 

HEI – HEIPC – International – Philippine Develop – CEPALCO (Philippine

Develop owns approximately 22% of the outstanding common shares)

 

10


Each of the above-named claimants has caused this statement to be duly executed on its behalf by its duly authorized officers on this 25th day of February 2003.

 

HAWAIIAN ELECTRIC INDUSTRIES, INC.

Claimant

By:

 

/s/    ROBERT F. CLARKE        


   

Robert F. Clarke

   

Chairman, President and

Chief Executive Officer

 

ATTEST:

       
   

/s/    MOLLY M. EGGED        


     

By:

 

/s/    PETER C. LEWIS        


   

Molly M. Egged

Assistant Secretary

         

Peter C. Lewis

Vice President-Administration
& Corporate Secretary

 

HAWAIIAN ELECTRIC COMPANY, INC.

Claimant

By:

 

/s/    T. Michael May         


   

T. Michael May

   

President and

Chief Executive Officer

 

ATTEST:

       
   

/s/    MOLLY M. EGGED        


     

By:

 

/s/    Jackie M. Erickson         


   

Molly M. Egged

Secretary

         

Jackie M. Erickson

Vice President - Customer Operations/

General Counsel

 

Name, title, and address of officer to whom notices and correspondence concerning this statement should be addressed:

 

Peter C. Lewis

Vice President-Administration & Corporate Secretary

Hawaiian Electric Industries, Inc.

P. O. Box 730

Honolulu, Hawaii 96808-0730

 

11


 

Exhibit A

HAWAIIAN ELECTRIC INDUSTRIES, INC. AND SUBSIDIARIES

Consolidating Balance Sheet (Page 1 of 3)

December 31, 2002

(Unaudited)

(in thousands)

 

    

Hawaiian

Electric

Industries,

Inc.


    

Hawaiian

Electric

Company,

Inc. and

subsidiaries


    

HEI

Diversified,

Inc. and

subsidiary


  

HEI

Investments,

Inc.


  

HEI

Properties,

Inc.


 

ASSETS

                                  

Cash and equivalents

  

$

25,059

 

  

1,726

 

  

214,758

  

1,058

  

$

28

 

Notes receivable from affiliated companies

  

 

5,600

 

  

 

  

1,401

  

6,006

  

 

272

 

Accounts receivable and unbilled revenues, net

  

 

1,593

 

  

149,424

 

  

26,220

  

1,045

  

 

1

 

Available-for-sale investment and mortgage-related securities

  

 

7,971

 

  

 

  

1,952,317

  

  

 

 

Available-for-sale mortgage-related securities pledged for repurchase agreements

  

 

 

  

 

  

784,362

  

  

 

 

Held-to-maturity investment securities

  

 

 

  

 

  

89,545

  

  

 

 

Loans receivable, net

  

 

 

  

 

  

2,993,989

  

  

 

 

Property, plant and equipment, net

  

 

2,089

 

  

2,013,362

 

  

63,827

  

  

 

 

Regulatory assets

  

 

 

  

105,568

 

  

  

  

 

 

Other

  

 

4,939

 

  

166,306

 

  

123,167

  

46,864

  

 

3,466

 

Goodwill and other intangibles

  

 

 

  

 

  

97,572

  

  

 

 

Investments in subsidiaries, at equity

  

 

1,512,423

 

  

 

  

  

  

 

 

    


  

  
  
  


    

$

1,559,674

 

  

2,436,386

 

  

6,347,158

  

54,973

  

$

3,767

 

    


  

  
  
  


LIABILITIES AND STOCKHOLDERS’ EQUITY

                                  

Liabilities

                                  

Accounts payable

  

$

8,108

 

  

71,967

 

  

56,335

  

8

  

$

 

Deposit liabilities

  

 

 

  

 

  

3,800,772

  

  

 

 

Short-term borrowings

  

 

10,922

 

  

5,600

 

  

  

  

 

 

Securities sold under agreements to repurchase

  

 

 

  

 

  

667,247

  

  

 

 

Advances from Federal Home Loan Bank

  

 

 

  

 

  

1,176,252

  

  

 

 

Long-term debt

  

 

504,000

 

  

705,270

 

  

17,073

  

  

 

 

Deferred income taxes

  

 

(13,110

)

  

158,367

 

  

48,854

  

41,510

  

 

70

 

Contributions in aid of construction

  

 

 

  

218,094

 

  

  

  

 

 

Other

  

 

3,454

 

  

219,539

 

  

32,262

  

747

  

 

(174

)

    


  

  
  
  


    

 

513,374

 

  

1,378,837

 

  

5,798,795

  

42,265

  

 

(104

)

    


  

  
  
  


HEI- and HECO-obligated preferred securities of trust subsidiaries directly or indirectly holding solely HEI and HEI-guaranteed and HECO and HECO-guaranteed subordinated debentures

  

 

 

  

100,000

 

  

  

  

 

 

Preferred stock of subsidiaries-not subject to mandatory redemption

  

 

 

  

34,293

 

  

113

  

  

 

 

    


  

  
  
  


    

 

 

  

134,293

 

  

113

  

  

 

 

    


  

  
  
  


Stockholders’ equity

                                  

Common stock

  

 

839,503

 

  

381,349

 

  

331,072

  

9,080

  

 

3,968

 

Retained earnings (deficit)

  

 

176,118

 

  

542,023

 

  

185,468

  

3,628

  

 

(97

)

Accumulated other comprehensive income (loss)

  

 

30,679

 

  

(116

)

  

31,710

  

  

 

 

    


  

  
  
  


    

 

1,046,300

 

  

923,256

 

  

548,250

  

12,708

  

 

3,871

 

    


  

  
  
  


    

$

1,559,674

 

  

2,436,386

 

  

6,347,158

  

54,973

  

$

3,767

 

    


  

  
  
  


 

Continued on next page.

 

A-1


HAWAIIAN ELECTRIC INDUSTRIES, INC. AND SUBSIDIARIES

Consolidating Balance Sheet (Page 2 of 3)

December 31, 2002

(Unaudited)

(in thousands)

 

(Continued)

 

    

HEI Leasing, Inc


      

Pacific Energy Conservation Services, Inc.


    

HEI District Cooling, Inc.


      

ProVision Technologies, Inc.


    

Hycap Management, Inc.


 

ASSETS


                                          

Cash and equivalents

  

$

3

 

    

64

 

  

2

 

    

119

 

  

$

488

 

Notes receivable from affiliated companies

  

 

 

    

3

 

  

16

 

    

 

  

 

 

Accounts receivable and unbilled revenues, net

  

 

 

    

17

 

  

 

    

37

 

  

 

11

 

Available-for-sale investment and mortgage-related securities

  

 

 

    

 

  

 

    

 

  

 

 

Available-for-sale mortgage-related securities pledged for repurchase agreements

  

 

 

    

 

  

 

    

 

  

 

 

Held-to-maturity investment securities

  

 

 

    

 

  

 

    

 

  

 

 

Loans receivable, net

  

 

 

    

 

  

 

    

 

  

 

 

Property, plant and equipment, net

  

 

 

    

2

 

  

 

    

45

 

  

 

 

Regulatory assets

  

 

 

    

 

  

 

    

 

  

 

 

Other

  

 

 

    

 

  

 

    

260

 

  

 

 

Goodwill and other intangibles

  

 

 

    

 

  

 

    

 

  

 

 

Investments in subsidiaries, at equity

  

 

 

    

 

  

 

    

 

  

 

18,193

 

    


    

  

    

  


    

$

3

 

    

86

 

  

18

 

    

461

 

  

$

18,692

 

    


    

  

    

  


LIABILITIES AND STOCKHOLDERS’ EQUITY


                                          

Liabilities

                                          

Accounts payable

  

$

 

    

4

 

  

 

    

13

 

  

$

 

Deposit liabilities

  

 

 

    

 

  

 

    

 

  

 

 

Short-term borrowings

  

 

 

    

 

  

 

    

 

  

 

 

Securities sold under agreements to repurchase

  

 

 

    

 

  

 

    

 

  

 

 

Advances from Federal Home Loan Bank

  

 

 

    

 

  

 

    

 

  

 

 

Long-term debt

  

 

 

    

 

  

 

    

 

  

 

 

Deferred income taxes

  

 

 

    

 

  

 

    

 

  

 

 

Contributions in aid of construction

  

 

 

    

 

  

 

    

 

  

 

 

Other

  

 

 

    

16

 

  

 

    

70

 

  

 

(36

)

    


    

  

    

  


    

 

 

    

20

 

  

 

    

83

 

  

 

(36

)

    


    

  

    

  


HEI-  and HECO-obligated preferred securities of trust subsidiaries directly or indirectly holding solely HEI and HEI-guaranteed and HECO and HECO-guaranteed subordinated debentures

  

 

 

    

 

  

 

    

 

  

 

 

Preferred stock of subsidiaries-not subject to mandatory redemption

  

 

 

    

 

  

 

    

 

  

 

 

    


    

  

    

  


    

 

 

    

 

  

 

    

 

  

 

 

    


    

  

    

  


Stockholders’ equity

                                          

Common stock

  

 

10

 

    

600

 

  

1,250

 

    

1,260

 

  

 

18,365

 

Retained earnings (deficit)

  

 

(7

)

    

(534

)

  

(1,232

)

    

(882

)

  

 

363

 

Accumulated other comprehensive income (loss)

  

 

 

    

 

  

 

    

 

  

 

 

    


    

  

    

  


    

 

3

 

    

66

 

  

18

 

    

378

 

  

 

18,728

 

    


    

  

    

  


    

$

3

 

    

86

 

  

18

 

    

461

 

  

$

18,692

 

    


    

  

    

  


 

Continued on next page.

 

A-2


 

HAWAIIAN ELECTRIC INDUSTRIES, INC. AND SUBSIDIARIES

Consolidating Balance Sheet (Page 3 of 3)

December 31, 2002

(Unaudited)

(in thousands)

 

(Continued)

 

    

HEI Preferred Funding, LP


  

Hawaiian Electric Industries Capital Trust I


  

The Old Oahu Tug Service, Inc.


    

Reclassifications and Eliminations Dr. (Cr.)


    

Consolidated


ASSETS

                                  

Cash and equivalents

  

$

1,220

  

  

 

 

  

 

  

$

244,525

Notes receivable from affiliated companies

  

 

120,073

  

  

 

3,224

 

  

(136,595

)

  

 

Accounts receivable and unbilled revenues, net

  

 

4

  

  

 

5

 

  

(2,030

)

  

 

176,327

Available-for-sale investment and mortgage-related securities

  

 

  

  

 

 

  

 

  

 

1,960,288

Available-for-sale mortgage-related securities pledged for repurchase agreements

  

 

  

  

 

 

  

 

  

 

784,362

Held-to-maturity investment securities

  

 

  

  

 

 

  

 

  

 

89,545

Loans receivable, net

  

 

  

  

 

 

  

 

  

 

2,993,989

Property, plant and equipment, net

  

 

  

  

 

 

  

 

  

 

2,079,325

Regulatory assets

  

 

  

  

 

 

  

 

  

 

105,568

Other

  

 

  

  

 

 

  

 

  

 

345,002

Goodwill and other intangibles

  

 

  

  

 

 

  

 

  

 

97,572

Investments in subsidiaries, at equity

  

 

  

103,093

  

 

 

  

(1,633,709

)

  

 

    

  
  


  

  

    

$

121,297

  

103,093

  

$

3,229

 

  

(1,772,334

)

  

$

8,876,503

    

  
  


  

  

LIABILITIES AND STOCKHOLDERS’ EQUITY

                                  

Liabilities

                                  

Accounts payable

  

$

11

  

  

$

 

  

2,030

 

  

$

134,416

Deposit liabilities

  

 

  

  

 

 

  

 

  

 

3,800,772

Short-term borrowings

  

 

  

  

 

 

  

16,522

 

  

 

Securities sold under agreements to repurchase

  

 

  

  

 

 

  

 

  

 

667,247

Advances from Federal Home Loan Bank

  

 

  

  

 

 

  

 

  

 

1,176,252

Long-term debt

  

 

  

  

 

 

  

120,073

 

  

 

1,106,270

Deferred income taxes

  

 

  

  

 

(260

)

  

 

  

 

235,431

Contributions in aid of construction

  

 

  

  

 

 

  

 

  

 

218,094

Other

  

 

  

  

 

1,437

 

  

 

  

 

257,315

    

  
  


  

  

    

 

11

  

  

 

1,177

 

  

138,625

 

  

 

7,595,797

    

  
  


  

  

HEI-  and HECO-obligated preferred securities of trust subsidiaries directly or indirectly holding solely HEI and HEI-guaranteed and HECO and HECO-guaranteed subordinated debentures

  

 

  

100,000

  

 

 

  

 

  

 

200,000

Preferred stock of subsidiaries— not subject to mandatory redemption

  

 

  

  

 

 

  

 

  

 

34,406

    

  
  


  

  

    

 

  

100,000

  

 

 

  

 

  

 

234,406

    

  
  


  

  

Stockholders’ equity

                                  

Common stock

  

 

121,286

  

3,093

  

 

2,443

 

  

873,776

 

  

 

839,503

Retained earnings (deficit)

  

 

  

  

 

(385

)

  

728,345

 

  

 

176,118

Accumulated other comprehensive income (loss)

  

 

  

  

 

(6

)

  

31,588

 

  

 

30,679

    

  
  


  

  

    

 

121,286

  

3,093

  

 

2,052

 

  

1,633,709

 

  

 

1,046,300

    

  
  


  

  

    

$

121,297

  

103,093

  

 

3,229

 

  

1,772,334

 

  

$

8,876,503

    

  
  


  

  

 

A-3


 

HAWAIIAN ELECTRIC INDUSTRIES, INC. AND SUBSIDIARIES

Consolidating Statement of Income (Page 1 of 3)

Year ended December 31, 2002

(Unaudited)

(in thousands)

 

    

Hawaiian

Electric

Industries,

Inc.


    

Hawaiian

Electric

Company,

Inc. and

subsidiaries


    

HEI

Diversified,

Inc. and

subsidiary


      

HEI

Investments,

Inc.


  

HEI

Properties,

Inc.


 

Revenues

                                      

Electric utility

  

$

 

  

1,257,176

 

  

 

    

  

$

 

Bank

  

 

 

  

 

  

399,255

 

    

  

 

 

Other

  

 

(3,881

)

  

 

  

365

 

    

1,901

  

 

(629

)

Equity in net income of subsidiaries

  

 

152,725

 

  

 

  

 

    

  

 

 

    


  

  

    
  


    

 

148,844

 

  

1,257,176

 

  

399,620

 

    

1,901

  

 

(629

)

    


  

  

    
  


Expenses

                                      

Electric utility

  

 

 

  

1,062,220

 

  

 

    

  

 

 

Bank

  

 

 

  

 

  

306,372

 

    

  

 

 

Other

  

 

16,984

 

  

 

  

134

 

    

99

  

 

72

 

    


  

  

    
  


    

 

16,984

 

  

1,062,220

 

  

306,506

 

    

99

  

 

72

 

    


  

  

    
  


Operating income (loss)

                                      

Electric utility

  

 

 

  

194,956

 

  

 

    

  

 

 

Bank

  

 

 

  

 

  

92,883

 

    

  

 

 

Other

  

 

131,860

 

  

 

  

231

 

    

1,802

  

 

(701

)

    


  

  

    
  


    

 

131,860

 

  

194,956

 

  

93,114

 

    

1,802

  

 

(701

)

    


  

  

    
  


Interest expense–other than bank

  

 

(37,576

)

  

(44,232

)

  

(1,427

)

    

  

 

 

Allowance for borrowed funds used during construction

  

 

 

  

1,855

 

  

 

    

  

 

 

Preferred stock dividends of subsidiaries

  

 

 

  

(915

)

  

(11

)

    

  

 

 

Preferred securities distributions of trust subsidiaries

  

 

 

  

(7,675

)

  

 

    

  

 

 

Allowance for equity funds used during construction

  

 

 

  

3,954

 

  

 

    

  

 

 

    


  

  

    
  


Income (loss) before income taxes and pfd. stock dividends and pfd. securities distributions

  

 

94,284

 

  

147,943

 

  

91,676

 

    

1,802

  

 

(701

)

Income tax expense (benefit)

  

 

(23,933

)

  

56,658

 

  

30,873

 

    

270

  

 

(145

)

    


  

  

    
  


Income (loss) before pfd. stock dividends and pfd. securities distributions

  

 

118,217

 

  

91,285

 

  

60,803

 

    

1,532

  

 

(556

)

Preferred stock dividends of parent

  

 

 

  

1,080

 

  

 

    

  

 

 

Preferred securities distributions

  

 

 

  

 

  

 

    

  

 

 

    


  

  

    
  


Net income (loss)

  

$

118,217

 

  

90,205

 

  

60,803

 

    

1,532

  

$

(556

)

    


  

  

    
  


 

Continued on next page.

 

A-4


 

HAWAIIAN ELECTRIC INDUSTRIES, INC. AND SUBSIDIARIES

Consolidating Statement of Income (Page 2 of 3)

Year ended December 31, 2002

(Unaudited)

(in thousands)

(Continued)

 

    

HEI Leasing, Inc.


      

Pacific Energy Conservation Services, Inc.


      

HEI District Cooling, Inc.


    

ProVision Technologies, Inc.


    

Hycap Management, Inc.


Revenues

                                        

Electric utility

  

$

 

    

 

    

    

 

  

$

Bank

  

 

 

    

 

    

    

 

  

 

Other

  

 

 

    

206

 

    

    

343

 

  

 

8

Equity in net income of subsidiaries

  

 

 

    

 

    

    

 

  

 

1,441

    


    

    
    

  

    

 

 

    

206

 

    

    

343

 

  

 

1,449

    


    

    
    

  

Expenses

                                        

Electric utility

  

 

 

    

 

    

    

 

  

 

Bank

  

 

 

    

 

    

    

 

  

 

Other

  

 

2

 

    

246

 

    

    

698

 

  

 

52

    


    

    
    

  

    

 

2

 

    

246

 

    

    

698

 

  

 

52

    


    

    
    

  

Operating income (loss)

                                        

Electric utility

  

 

 

    

 

    

    

 

  

 

Bank

  

 

 

    

 

    

    

 

  

 

Other

  

 

(2

)

    

(40

)

    

    

(355

)

  

 

1,397

    


    

    
    

  

    

 

(2

)

    

(40

)

    

    

(355

)

  

 

1,397

    


    

    
    

  

Interest expense–other than bank

  

 

 

    

 

    

    

 

  

 

Allowance for borrowed funds used during construction

  

 

 

    

 

    

    

 

  

 

Preferred stock dividends of subsidiaries

  

 

 

    

 

    

    

 

  

 

Preferred securities distributions of trust subsidiaries

  

 

 

    

 

    

    

 

  

 

Allowance for equity funds used during construction

  

 

 

    

 

    

    

 

  

 

    


    

    
    

  

Income (loss) before income taxes and pfd. stock dividends and pfd. securities distributions

  

 

(2

)

    

(40

)

    

    

(355

)

  

 

1,397

Income tax expense (benefit)

  

 

 

    

 

    

    

1

 

  

 

489

    


    

    
    

  

Income (loss) before pfd. stock dividends and pfd. securities distributions

  

 

(2

)

    

(40

)

    

    

(356

)

  

 

908

Preferred stock dividends of parent

  

 

 

    

 

    

    

 

  

 

Preferred securities distributions

  

 

 

    

 

    

    

 

  

 

    


    

    
    

  

Net income (loss)

  

$

(2

)

    

(40

)

    

    

(356

)

  

$

908

    


    

    
    

  

Continued on next page.

 

A-5


 

HAWAIIAN ELECTRIC INDUSTRIES, INC. AND SUBSIDIARIES

Consolidating Statement of Income (Page 3 of 3)

Year ended December 31, 2002

(Unaudited)

(in thousands)

(Continued)

 

    

HEI Preferred Funding, LP


  

Hawaiian Electric Industries Capital Trust I


  

The Old Oahu Tug Service, Inc.


      

Reclassifications and Eliminations Dr. (Cr.)


    

Consolidated


 

Revenues

                                    

Electric utility

  

$

  

  

 

    

 

  

$

1,257,176

 

Bank

  

 

  

  

 

    

 

  

 

399,255

 

Other

  

 

10,060

  

  

50

 

    

11,153

 

  

 

(2,730

)

Equity in net income of subsidiaries

  

 

  

8,619

  

 

    

162,785

 

  

 

 

    

  
  

    

  


    

 

10,060

  

8,619

  

50

 

    

173,938

 

  

 

1,653,701

 

    

  
  

    

  


Expenses

                                    

Electric utility

  

 

  

  

 

    

 

  

 

1,062,220

 

Bank

  

 

  

  

 

    

 

  

 

306,372

 

Other

  

 

  

  

599

 

    

(210

)

  

 

18,676

 

    

  
  

    

  


    

 

  

  

599

 

    

(210

)

  

 

1,387,268

 

    

  
  

    

  


Operating income (loss)

                                    

Electric utility

  

 

  

  

 

    

 

  

 

194,956

 

Bank

  

 

  

  

 

    

 

  

 

92,883

 

Other

  

 

10,060

  

8,619

  

(549

)

    

173,728

 

  

 

(21,406

)

    

  
  

    

  


    

 

10,060

  

8,619

  

(549

)

    

173,728

 

  

 

266,433

 

    

  
  

    

  


Interest expense–other than bank

  

 

  

  

 

    

(10,943

)

  

 

(72,292

)

Allowance for borrowed funds used during construction

  

 

  

  

 

    

 

  

 

1,855

 

Preferred stock dividends of subsidiaries

  

 

  

  

 

    

1,080

 

  

 

(2,006

)

Preferred securities distributions of trust subsidiaries

  

 

  

  

 

    

8,360

 

  

 

(16,035

)

Allowance for equity funds used during construction

  

 

  

  

 

    

 

  

 

3,954

 

    

  
  

    

  


Income (loss) before income taxes and pfd. stock dividends and pfd. securities distributions

  

 

10,060

  

8,619

  

(549

)

    

172,225

 

  

 

181,909

 

Income tax expense (benefit)

  

 

  

  

(521

)

    

 

  

 

63,692

 

    

  
  

    

  


Income (loss) before pfd. stock dividends and pfd. securities distributions

  

 

10,060

  

8,619

  

(28

)

    

172,225

 

  

 

118,217

 

Preferred stock dividends of parent

  

 

  

  

 

    

(1,080

)

  

 

 

Preferred securities distributions

  

 

  

8,360

  

 

    

(8,360

)

  

 

 

    

  
  

    

  


Net income (loss)

  

$

10,060

  

259

  

(28

)

    

162,785

 

  

$

118,217

 

    

  
  

    

  


 

A-6


HAWAIIAN ELECTRIC INDUSTRIES, INC. AND SUBSIDIARIES

Consolidating Statement of Retained Earnings

Year ended December 31, 2002

(Unaudited)

(in thousands)

 

    

Hawaiian Electric Industries, Inc.


    

Hawaiian Electric Company, Inc. and subsidiaries


    

HEI Diversified, Inc. and subsidiary


      

HEI Investments, Inc.


  

HEI Properties, Inc.


 

Retained earnings (deficit), beginning of year

  

$

147,837

 

  

495,961

 

  

157,762

 

    

2,096

  

$

459

 

Net income (loss)

  

 

118,217

 

  

90,205

 

  

60,803

 

    

1,532

  

 

(556

)

Distributions of HEI Preferred Funding, LP

  

 

 

  

 

  

 

    

  

 

 

Common stock dividends

  

 

(89,936

)

  

(44,143

)

  

(33,097

)

    

  

 

  –

 

    


  

  

    
  


Retained earnings (deficit), end of year

  

$

176,118

 

  

542,023

 

  

185,468

 

    

3,628

  

$

(97

)

    


  

  

    
  


 

    

HEI Leasing, Inc.


      

Pacific Energy Conservation Services, Inc.


    

HEI District Cooling, Inc.


      

ProVision Technologies, Inc.


    

Hycap Management, Inc.


 

Retained earnings (deficit), beginning of year

  

$

(5

)

    

(494

)

  

(1,232

)

    

(526

)

  

$

555

 

Net income (loss)

  

 

(2

)

    

(40

)

  

 

    

(356

)

  

 

908

 

Distributions of HEI Preferred Funding, LP

  

 

 

    

 

  

 

    

 

  

 

–  

 

Common stock dividends

  

 

 

    

 

  

 

    

 

  

 

(1,100

)

    


    

  

    

  


Retained earnings (deficit), end of year

  

$

(7

)

    

(534

)

  

(1,232

)

    

(882

)

  

$

363

 

    


    

  

    

  


 

    

HEI Preferred Funding, LP


    

Hawaiian Electric Industries Capital Trust I


    

The Old Oahu Tug Service, Inc.


      

Reclassifications and Eliminations Dr. (Cr.)


    

Consolidated


 

Retained earnings (deficit), beginning of year

  

$

 

  

 

  

(357

)

    

654,219

 

  

$

147,837

 

Net income (loss)

  

 

10,060

 

  

259

 

  

(28

)

    

162,785

 

  

 

118,217

 

Distributions of HEI Preferred Funding, LP

  

 

(10,060

)

  

 

  

 

    

(10,060

)

  

 

 

Common stock dividends

  

 

 

  

(259

)

  

 

    

(78,599

)

  

 

(89,936

)

    


  

  

    

  


Retained earnings (deficit), end of year

  

$

 

  

 

  

(385

)

    

728,345

 

  

$

176,118

 

    


  

  

    

  


 

A-7


Exhibit A-1

HAWAIIAN ELECTRIC COMPANY, INC. AND SUBSIDIARIES

Consolidating Schedule—Balance Sheet Information (Page 1 of 2)

December 31, 2002

(Unaudited)

(in thousands)

 

    

Hawaiian Electric Company, Inc.


    

Hawaii Electric

Light Company, Inc.


  

Maui Electric Company, Limited


 

ASSETS

                      

Cash and equivalents

  

$

9

 

  

4

  

$

1,713

 

Notes receivable from affiliated companies

  

 

14,900

 

  

  

 

23,000

 

Accounts receivable and unbilled revenues, net

  

 

105,238

 

  

25,091

  

 

20,337

 

Property, plant and equipment, net

  

 

1,239,230

 

  

406,857

  

 

367,275

 

Regulatory assets

  

 

74,946

 

  

16,557

  

 

14,065

 

Other

  

 

120,377

 

  

20,472

  

 

25,457

 

Investments in subsidiaries, at equity

  

 

355,869

 

  

  

 

 

    


  
  


    

$

1,910,569

 

  

468,981

  

$

451,847

 

    


  
  


LIABILITIES AND STOCKHOLDER’S EQUITY

                      

Liabilities

                      

Accounts payable

  

$

49,131

 

  

12,060

  

$

10,371

 

Short-term borrowings

  

 

28,600

 

  

14,900

  

 

 

Long-term debt

  

 

495,689

 

  

140,993

  

 

171,680

 

Deferred income taxes

  

 

132,159

 

  

14,479

  

 

11,729

 

Contributions in aid of construction

  

 

138,298

 

  

54,288

  

 

25,508

 

Other

  

 

121,143

 

  

53,857

  

 

46,186

 

    


  
  


    

 

965,020

 

  

290,577

  

 

265,474

 

    


  
  


HECO-obligated mandatorily redeemable trust preferred securities of subsidiary trusts holding solely HECO and HECO-guaranteed debentures

  

 

 

  

  

 

 

Preferred stock-not subject to mandatory redemption

  

 

22,293

 

  

7,000

  

 

5,000

 

    


  
  


    

 

22,293

 

  

7,000

  

 

5,000

 

    


  
  


Stockholder’s equity

                      

Common stock

  

 

381,349

 

  

99,990

  

 

94,286

 

Retained earnings

  

 

542,023

 

  

71,414

  

 

87,092

 

Accumulated other comprehensive loss

  

 

(116

)

  

  

 

(5

)

    


  
  


    

 

923,256

 

  

171,404

  

 

181,373

 

    


  
  


    

$

1,910,569

 

  

468,981

  

$

451,847

 

    


  
  


 

Continued on next page.

 

A-1-1


 

HAWAIIAN ELECTRIC COMPANY, INC. AND SUBSIDIARIES

Consolidating Schedule—Balance Sheet Information (Page 2 of 2)

December 31, 2002

(Unaudited)

(in thousands)

(Continued)

    

HECO Capital Trust I


  

HECO Capital Trust II


    

Reclassifications and Eliminations Dr. (Cr.)


    

Consolidated


 

ASSETS

                             

Cash and equivalents

  

$

  

    

 

  

$

1,726

 

Notes receivable from affiliated companies

  

 

51,546

  

51,546

    

(140,992

)

  

 

 

Accounts receivable and unbilled revenues, net

  

 

  

    

(1,242

)

  

 

149,424

 

Property, plant and equipment, net

  

 

  

    

 

  

 

2,013,362

 

Regulatory assets

  

 

  

    

 

  

 

105,568

 

Other

  

 

  

    

 

  

 

166,306

 

Investments in subsidiaries, at equity

  

 

  

    

(355,869

)

  

 

 

    

  
    

  


    

$

51,546

  

51,546

    

(498,103

)

  

$

2,436,386

 

    

  
    

  


LIABILITIES AND STOCKHOLDER’S EQUITY

                             

Liabilities

                             

Accounts payable

  

$

  

    

(405

)

  

$

71,967

 

Short-term borrowings

  

 

  

    

37,900

 

  

 

5,600

 

Long-term debt

  

 

  

    

103,092

 

  

 

705,270

 

Deferred income taxes

  

 

  

    

 

  

 

158,367

 

Contributions in aid of construction

  

 

  

    

 

  

 

218,094

 

Other

  

 

  

    

1,647

 

  

 

219,539

 

    

  
    

  


    

 

  

    

142,234

 

  

 

1,378,837

 

    

  
    

  


HECO-obligated mandatorily redeemable trust preferred securities of subsidiary trusts holding solely HECO and HECO-guaranteed debentures

  

 

50,000

  

50,000

    

 

  

 

100,000

 

Preferred stock-not subject to mandatory redemption

  

 

  

    

 

  

 

34,293

 

    

  
    

  


    

 

50,000

  

50,000

    

 

  

 

134,293

 

    

  
    

  


Stockholder’s equity

                             

Common stock

  

 

1,546

  

1,546

    

197,368

 

  

 

381,349

 

Retained earnings

  

 

  

    

158,506

 

  

 

542,023

 

Accumulated other comprehensive loss

  

 

  

    

(5

)

  

 

(116

)

    

  
    

  


    

 

1,546

  

1,546

    

355,869

 

  

 

923,256

 

    

  
    

  


    

$

51,546

  

51,546

    

498,103

 

  

$

2,436,386

 

    

  
    

  


 

A-1-2


HAWAIIAN ELECTRIC COMPANY, INC. AND SUBSIDIARIES

Consolidating Schedule—Income Information (Page 1 of 2)

Year ended December 31, 2002

(Unaudited)

(in thousands)

 

    

Hawaiian Electric Company, Inc.


    

Hawaii Electric Light Company, Inc.


    

Maui Electric Company, Limited


 

Revenues

                        

Electric utility

  

$

872,509

 

  

192,592

 

  

$

192,532

 

Equity in net income of subsidiaries

  

 

30,782

 

  

 

  

 

 

    


  

  


    

 

903,291

 

  

192,592

 

  

 

192,532

 

Expenses–Electric utility

  

 

747,382

 

  

162,553

 

  

 

152,285

 

    


  

  


Operating income

  

 

155,909

 

  

30,039

 

  

 

40,247

 

Interest expense

  

 

(32,458

)

  

(9,512

)

  

 

(10,631

)

Allowance for borrowed funds used during construction

  

 

1,642

 

  

118

 

  

 

95

 

Preferred stock dividends of subsidiaries

  

 

 

  

 

  

 

 

Preferred securities distributions of trust subsidiaries

  

 

 

  

 

  

 

 

Allowance for equity funds used during construction

  

 

3,514

 

  

217

 

  

 

223

 

    


  

  


Income before income tax expense and preferred stock dividends

  

 

128,607

 

  

20,862

 

  

 

29,934

 

Income taxes

  

 

37,322

 

  

7,884

 

  

 

11,452

 

    


  

  


Income before preferred stock dividends

  

 

91,285

 

  

12,978

 

  

 

18,482

 

Preferred stock dividends

  

 

1,080

 

  

534

 

  

 

381

 

    


  

  


Net income

  

$

90,205

 

  

12,444

 

  

 

18,101

 

    


  

  


 

Continued on next page.

 

A-1-3


HAWAIIAN ELECTRIC COMPANY, INC. AND SUBSIDIARIES

Consolidating Schedule—Income Information (Page 2 of 2)

Year ended December 31, 2002

(Unaudited)

(in thousands)

 

(Continued)

 

    

HECO Capital Trust I


    

HECO Capital Trust II


    

Reclassifi-
cations
and Eliminations Dr. (Cr.)


    

Consolidated


 

Revenues

                               

Electric utility

  

$

4,149

 

  

3,763

 

  

8,369

 

  

$

1,257,176

 

Equity in net income of subsidiaries

  

 

 

  

 

  

30,782

 

  

 

 

    


  

  

  


    

 

4,149

 

  

3,763

 

  

39,151

 

  

 

1,257,176

 

Expenses–Electric utility

  

 

 

  

 

  

 

  

 

1,062,220

 

    


  

  

  


Operating income

  

 

4,149

 

  

3,763

 

  

39,151

 

  

 

194,956

 

Interest expense

  

 

 

  

 

  

(8,369

)

  

 

(44,232

)

Allowance for borrowed funds used during construction

  

 

 

  

 

  

 

  

 

1,855

 

Preferred stock dividends of subsidiaries

  

 

 

  

 

  

915

 

  

 

(915

)

Preferred securities distributions of trust subsidiaries

  

 

(4,025

)

  

(3,650

)

  

 

  

 

(7,675

)

Allowance for equity funds used during construction

  

 

 

  

 

  

 

  

 

3,954

 

    


  

  

  


Income before income tax expense and preferred stock dividends

  

 

124

 

  

113

 

  

31,697

 

  

 

147,943

 

Income taxes

  

 

 

  

 

  

 

  

 

56,658

 

    


  

  

  


Income before preferred stock dividends

  

 

124

 

  

113

 

  

31,697

 

  

 

91,285

 

Preferred stock dividends

  

 

 

  

 

  

(915

)

  

 

1,080

 

    


  

  

  


Net income

  

$

124

 

  

113

 

  

30,782

 

  

$

90,205

 

    


  

  

  


 

A-1-4


 

HAWAIIAN ELECTRIC COMPANY, INC. AND SUBSIDIARIES

Consolidating Schedule—Retained Earnings Information

Year ended December 31, 2002

(Unaudited)

(in thousands)

 

    

Hawaiian Electric Company, Inc.


    

Hawaii Electric Light Company, Inc.


    

Maui Electric Company, Limited


        

Retained earnings, beginning of year

  

$

495,961

 

  

65,690

 

  

$

78,182

 

        

Net income

  

 

90,205

 

  

12,444

 

  

 

18,101

 

        

Common stock dividends

  

 

(44,143

)

  

(6,720

)

  

 

(9,191

)

        
    


  

  


        

Retained earnings, end of year

  

$

542,023

 

  

71,414

 

  

$

87,092

 

        
    


  

  


        
                                   
    

HECO Capital Trust I


    

HECO Capital Trust II


    

Reclassifi-
Cations And Eliminations Dr. (Cr.)


    

Consolidated


 

Retained earnings, beginning of year

  

$

 

  

 

  

 

143,872

 

  

$

495,961

 

Net income

  

 

124

 

  

113

 

  

 

30,782

 

  

 

90,205

 

Common stock dividends

  

 

(124

)

  

(113

)

  

 

(16,148

)

  

 

(44,143

)

    


  

  


  


Retained earnings, end of year

  

$

 

  

 

  

 

158,506

 

  

$

542,023

 

    


  

  


  


 

A-1-5


 

HEI DIVERSIFIED, INC. AND SUBSIDIARY

Consolidating Schedule—Balance Sheet Information

December 31, 2002

(Unaudited)

(in thousands)

 

    

HEI Diversified, Inc.


    

American Savings Bank, F.S.B. and subsidiaries


    

Reclassifications and Eliminations Dr. (Cr.)


    

Consolidated


ASSETS

                             

Cash and equivalents

  

$

54

 

  

214,704

    

 

  

$

214,758

Notes receivable from affiliated companies

  

 

1,401

 

  

    

 

  

 

1,401

Accounts receivable and unbilled revenues, net

  

 

4

 

  

26,216

    

 

  

 

26,220

Available-for-sale mortgage-related securities

  

 

 

  

1,952,317

    

 

  

 

1,952,317

Available-for-sale mortgage-related securities pledged for repurchase agreements

  

 

 

  

784,362

    

 

  

 

784,362

Held-to-maturity investment securities

  

 

 

  

89,545

    

 

  

 

89,545

Loans receivable, net

  

 

 

  

2,993,989

    

 

  

 

2,993,989

Property, plant and equipment, net

  

 

 

  

63,827

    

 

  

 

63,827

Other

  

 

20,397

 

  

106,074

    

(3,304

)

  

 

123,167

Goodwill and other intangibles

  

 

 

  

97,572

    

 

  

 

97,572

Investment in subsidiary, at equity

  

 

543,030

 

  

    

(543,030

)

  

 

    


  
    

  

    

$

564,886

 

  

6,328,606

    

(546,334

)

  

$

6,347,158

    


  
    

  

LIABILITIES AND STOCKHOLDER’S EQUITY

                             

Liabilities

                             

Accounts payable

  

$

141

 

  

56,194

    

 

  

$

56,335

Deposit liabilities

  

 

 

  

3,800,772

    

 

  

 

3,800,772

Securities sold under agreements to repurchase

  

 

 

  

667,247

    

 

  

 

667,247

Advances from Federal Home Loan Bank

  

 

 

  

1,176,252

    

 

  

 

1,176,252

Long-term debt

  

 

17,073

 

  

    

 

  

 

17,073

Deferred income taxes

  

 

 

  

48,854

    

 

  

 

48,854

Other

  

 

(578

)

  

32,840

    

 

  

 

32,262

    


  
    

  

    

 

16,636

 

  

5,782,159

    

 

  

 

5,798,795

    


  
    

  

Preferred stock of savings bank subsidiary

  

 

 

  

113

    

 

  

 

113

Minority interests

  

 

 

  

3,304

    

3,304

 

  

 

                               

Stockholder’s equity

                             

Preferred stock

  

 

 

  

75,000

    

75,000

 

  

 

Common stock

  

 

331,072

 

  

243,628

    

243,628

 

  

 

331,072

Retained earnings

  

 

185,468

 

  

192,692

    

192,692

 

  

 

185,468

Accumulated other comprehensive income

  

 

31,710

 

  

31,710

    

31,710

 

  

 

31,710

    


  
    

  

    

 

548,250

 

  

543,030

    

543,030

 

  

 

548,250

    


  
    

  

    

$

564,886

 

  

6,328,606

    

546,334

 

  

$

6,347,158

    


  
    

  

 

A-2-1


HEI DIVERSIFIED, INC. AND SUBSIDIARY

Consolidating Schedule—Income Information

Year ended December 31, 2002

(Unaudited)

(in thousands)

 

    

HEI Diversified, Inc.


    

American Savings Bank, F.S.B. and subsidiaries


      

Reclassifications and Eliminations Dr. (Cr.)


    

Consolidated


 

Revenues

                                 

Bank

  

$

 

  

399,255

 

    

 

  

$

399,255

 

Other

  

 

5,765

 

  

 

    

5,400

 

  

 

365

 

Equity in net income of subsidiary/minority interest

  

 

56,398

 

  

(173

)

    

56,225

 

  

 

 

    


  

    

  


    

 

62,163

 

  

399,082

 

    

61,625

 

  

 

399,620

 

    


  

    

  


Expenses

                                 

Bank

  

 

 

  

306,372

 

    

 

  

 

306,372

 

Other

  

 

134

 

  

 

    

 

  

 

134

 

    


  

    

  


    

 

134

 

  

306,372

 

    

 

  

 

306,506

 

    


  

    

  


Operating income

                                 

Bank

  

 

 

  

92,883

 

    

 

  

 

92,883

 

Other

  

 

62,029

 

  

(173

)

    

61,625

 

  

 

231

 

    


  

    

  


    

 

62,029

 

  

92,710

 

    

61,625

 

  

 

93,114

 

Interest expense–other than bank

  

 

(1,427

)

  

 

    

 

  

 

(1,427

)

Preferred stock dividends of subsidiaries

  

 

 

  

 

    

11

 

  

 

(11

)

    


  

    

  


Income before income taxes and preferred stock dividends

  

 

60,602

 

  

92,710

 

    

61,636

 

  

 

91,676

 

Income tax expense (benefit)

  

 

(201

)

  

31,074

 

    

 

  

 

30,873

 

    


  

    

  


Income before preferred stock dividends

  

 

60,803

 

  

61,636

 

    

61,636

 

  

 

60,803

 

Preferred stock dividends

  

 

 

  

5,411

 

    

(5,411

)

  

 

 

    


  

    

  


Net income

  

$

60,803

 

  

56,225

 

    

56,225

 

  

$

60,803

 

    


  

    

  


 

HEI DIVERSIFIED, INC. AND SUBSIDIARY

Consolidating Schedule—Retained Earnings Information

Year ended December 31, 2002

(Unaudited)

(in thousands)

 

    

HEI Diversified, Inc.


    

American Savings Bank, F.S.B. and subsidiaries


      

Reclassifications and Eliminations Dr. (Cr.)


    

Consolidated


 

Retained earnings, beginning of year

  

$

157,762

 

  

165,564

 

    

165,564

 

  

$

157,762

 

Net income

  

 

60,803

 

  

56,225

 

    

56,225

 

  

 

60,803

 

Common stock dividends

  

 

(33,097

)

  

(29,097

)

    

(29,097

)

  

 

(33,097

)

    


  

    

  


Retained earnings, end of year

  

$

185,468

 

  

192,692

 

    

192,692

 

  

$

185,468

 

    


  

    

  


 

A-2-2


AMERICAN SAVINGS BANK, F.S.B. AND SUBSIDIARIES

Consolidating Schedule—Balance Sheet Information (Page 1 of 2)

December 31, 2002

(Unaudited)

(in thousands)

 

    

American Savings Bank, F.S.B.


  

American Savings Investment Services Corp.


      

ASB Service Corporation


      

AdCommuni- cations, Inc.


ASSETS

                               

Cash and equivalents

  

$

188,151

  

4,408

 

    

19

 

    

$

413

Accounts receivable and unbilled revenues, net

  

 

18,675

  

 

    

 

    

 

Available-for-sale mortgage-related securities

  

 

1,286,599

  

 

    

 

    

 

Available-for-sale mortgage-related securities pledged for repurchase agreements

  

 

784,362

  

 

    

 

    

 

Held-to-maturity investment securities

  

 

89,545

  

 

    

 

    

 

Loans receivable, net

  

 

2,022,814

  

 

    

 

    

 

Property, plant and equipment, net

  

 

63,629

  

178

 

    

20

 

    

 

Other

  

 

107,999

  

996

 

    

 

    

 

6

Goodwill and other intangibles

  

 

96,682

  

890

 

    

 

    

 

Investments in subsidiaries, at equity

  

 

1,841,607

  

 

    

 

    

 

    

  

    

    

    

$

6,500,063

  

6,472

 

    

39

 

    

$

419

    

  

    

    

LIABILITIES AND STOCKHOLDER’S EQUITY

                               

Liabilities

                               

Accounts payable

  

$

54,925

  

1,268

 

    

 

    

$

Deposit liabilities

  

 

3,980,872

  

 

    

 

    

 

Securities sold under agreements to repurchase

  

 

667,247

  

 

    

 

    

 

Advances from Federal Home Loan Bank

  

 

1,176,252

  

 

    

 

    

 

Deferred income taxes

  

 

48,962

  

(108

)

    

 

    

 

Other

  

 

31,803

  

1,037

 

    

 

    

 

    

  

    

    

    

 

5,960,061

  

2,197

 

    

 

    

 

    

  

    

    

Preferred stock of savings bank subsidiary

  

 

  

 

    

 

    

 

Minority interests

  

 

  

 

    

 

    

 

Stockholder’s equity

                               

Preferred stock

  

 

75,000

  

 

    

 

    

 

Common stock

  

 

243,628

  

2,010

 

    

359

 

    

 

61

Retained earnings (deficit)

  

 

194,079

  

2,265

 

    

(320

)

    

 

358

Accumulated other comprehensive income

  

 

27,295

  

 

    

 

    

 

    

  

    

    

    

 

540,002

  

4,275

 

    

39

 

    

 

419

    

  

    

    

    

$

6,500,063

  

6,472

 

    

39

 

    

$

419

    

  

    

    

Continued on next page.

 

A-3-1


AMERICAN SAVINGS BANK, F.S.B. AND SUBSIDIARIES

Consolidating Schedule—Balance Sheet Information (Page 2 of 2)

December 31, 2002

(Unaudited)

(in thousands)

 

(Continued)

 

    

ASB

Realty Corporation


    

American Savings Mortgage Co., Inc.


  

Reclassifications and Eliminations

Dr. (Cr.)


    

Consolidated


ASSETS

                           

Cash and equivalents

  

$

201,807

 

  

6

  

(180,100

)

  

$

214,704

Accounts receivable and unbilled revenues, net

  

 

7,541

 

  

  

 

  

 

26,216

Available-for-sale mortgage-related securities

  

 

667,105

 

  

  

(1,387

)

  

 

1,952,317

Available-for-sale mortgage-related securities pledged for repurchase agreements

  

 

 

  

  

 

  

 

784,362

Held-to-maturity investment securities

  

 

 

  

  

 

  

 

89,545

Loans receivable, net

  

 

971,175

 

  

  

 

  

 

2,993,989

Property, plant and equipment, net

  

 

 

  

  

 

  

 

63,827

Other

  

 

2,046