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 HONOLULU, Oct. 19 /PRNewswire/ -- Hawaiian Electric Industries Inc. (NYSE: HE) reported net income of $16.1 million for the three months ended Sept. 30, compared with net income from continuing operations of $16.6 million in the same period of 1992. Earnings per share were 61 cents, compared with 68 cents per share from continuing operations a year ago.
 For the nine months ended Sept. 30, net income from continuing operations was $44.4 million, or $1.75 per share, compared with $45.2 million, or $1.87 per share from continuing operations in the same period last year.
 Robert F. Clarke, HEI president and chief executive officer, said the results reflect Hawaii's slower economy and the effect of the 1993 tax act, which was retroactive to Jan. 1, 1993.
 Electric utility operating income was up 8 percent in the quarter from the same quarter of 1992 primarily due to rate relief in response to rising costs. Kilowatthour sales were less than expected and did not increase over 1992 levels due to Hawaii's slower economy, cooler weather and conservation. Operating income for the nine months increased 11 percent from the same period last year and includes an accounting adjustment that resulted in a nonrecurring reduction in expenses from the establishment of a regulatory asset for vacations earned but not yet taken.
 HEI's major nonutility subsidiary, American Savings Bank, posted increases in operating income of 48 percent for the quarter and 49 percent for the nine months because of a larger loan portfolio and wider interest rate spreads. American Savings' interest rate spread, the difference between the yield on earning assets and cost of funds, was 4.05 percent in the quarter vs. 3.47 percent in the same period a year ago. The year-to-date interest rate spread was 3.87 percent compared with 3.25 percent in the same period of 1992.
 Corporate and other nonutility operations reflect Hawaii's slower economy and a change in the manner of allocating corporate expenses to the subsidiaries.
 With the retroactive 1 percent increase in the federal tax rate to 35 percent during the third quarter, HEI's consolidated net income decreased approximately $2 million, or 8 cents per share, Clarke said. For the full year, the new tax act is expected to reduce the company's net income by approximately $2.5 million, or 10 cents per share.
 In 1992, HEI reported net losses for the quarter and nine months ended Sept. 30 because of two events: first, the reserve established by the company's former insurance subsidiary for claims for property damage by Hurricane Iniki, and second, the loss recorded for discontinuing HEI's nonutility wind energy business. The hurricane struck the island of Kauai on Sept. 11, 1992. HEI completely wrote off its investment in its former property-casualty insurance subsidiary in the fourth quarter of 1992.
 Hawaiian Electric Industries is a diversified electric utility holding company that delivers essential services to the people of Hawaii through its electric utility, banking, maritime freight transportation and residential real estate subsidiaries.
 Consolidated Statements of Income
 (in thousands except per share amounts)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 Electric utility $235,841 $206,946 $661,788 $557,581
 Savings bank 49,752 50,431 149,183 152,601
 Other 13,893 13,540 49,508 39,595
 Total 299,486 270,917 860,479 749,777
 Electric utility 204,222 177,718 576,168 480,280
 Savings bank 38,048 42,519 117,758 131,498
 Other 16,758 13,379 53,845 35,543
 Total 259,028 233,616 747,771 647,321
 Operating income (loss)
 Electric utility 31,619 29,228 85,620 77,301
 Savings bank 11,704 7,912 31,425 21,103
 Other(a) (2,865) 161 (4,337) 4,052
 Total 40,458 37,301 112,708 102,456
 Interest expense
 Electric utility
 and other (12,901) (11,467) (38,863) (33,683)
 Allowance for borrowed
 funds used during
 construction 1,056 462 2,984 1,545
 Preferred stock dividends
 of electric utility
 subsidiaries (1,628) (1,682) (4,888) (5,051)
 Allowance for equity funds
 used during construction 1,915 1,509 5,269 5,039
 Income from continuing
 operations before income
 taxes 28,900 26,123 77,210 70,306
 Income taxes(b) 12,812 9,571 32,853 25,058
 Income from continuing
 operations 16,088 16,552 44,357 45,248
 Income (loss) from discontinued
 operations --- (53,479) 1,800 (52,442)
 Net income (loss) $16,088 ($36,927) $46,157 ($7,194)
 Earnings (loss) per common share
 Continuing operations $0.61 $0.68 $1.75 $1.87
 Discontinued operations --- (2.20) 0.07 (2.17)
 Total $0.61 ($1.52) $1.82 ($0.30)
 Dividends per common
 share $0.57 $0.56 $1.71 $1.68
 Weighted average number of
 common shares outstanding 26,247 24,374 25,402 24,161
 (a) Includes higher corporate general and administrative expenses due to the refinement in the allocation of corporate-level expenses. For the three months and nine months ended Sept. 30, 1993, corporate- level expenses allocated to subsidiaries decreased approximately $2 million and $5 million, respectively.
 (b) Income tax expense was greater than the same period last year due to four factors: (1) income from continuing operations increased, (2) maritime freight transportation operations can no longer recognize immediate tax benefits from contributions to the Maritime Administration Capital Construction Fund because of the adoption of SFAS No. 109, (3) under SFAS No. 109, the tax calculated on AFUDC must be shown in income taxes rather than netted against AFUDC and (4) the federal tax rate increased 1 percent to 35 percent retroactive to Jan. 1, 1993.
 -0- 10/19/93
 /CONTACT: Constance H. Lau, treasurer, 808-543-7384, or Gary S. Sharpe, director-investor relations, 808-543-7385, both of Hawaiian Electric Industries/

CO: Hawaiian Electric Industries Inc. ST: Hawaii IN: UTI SU: ERN

NY-LM -- LA011 -- 3727 10/19/93 08:02 EDT
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Publication:PR Newswire
Date:Oct 19, 1993

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