Posted on: Tuesday, January 25, 2005

HECO parent puts off earnings report

Advertiser Staff

Hawaiian Electric Industries, Inc., the parent of Hawaiian Electric Co. and American Savings Bank, postponed its fourth quarter earnings release yesterday, saying it discovered a problem with its accounting.

"We have our arms around the issue and are working on the detailed calculations," said Robert F. Clarke, HEI chairman, president and chief executive officer. "I'm confident that the matter will be resolved over the next two weeks."

The company said it became aware of the accounting problem on Jan. 19. The problem had to do with how American Savings Bank amortized premiums and discounts on its mortgage-backed securities portfolio.

The method the bank was using "was not in strict conformance with Statement of Financial Accounting Standards (SFAS) No. 91," the company said in a statement.

HEI said it may have understated net income by between $2 million and $4 million. "The exact amount and timing of the adjustment has not yet been determined," the company said.

Clarke said the company now plans to report fourth quarter earnings on Feb. 7.

HEI supplies power to 93 percent of the Hawai'i electric public utility market through its electric utilities — Hawaiian Electric Co., Hawaii Electric Light Co. and Maui Electric Co. — and operates the state's third-largest financial institution.