[Q1 2025 Financial Highlights and Corporate Update](index=1&type=section&id=HEI%20REPORTS%20FIRST%20QUARTER%202025%20RESULTS) [Overall Performance and CEO Remarks](index=1&type=section&id=Overall%20Performance%20and%20CEO%20Remarks) HEI reported Q1 2025 GAAP net income of **$27 million**, with core income from continuing operations at **$40 million**, reflecting financial recovery and legislative progress Q1 2025 vs Q1 2024 Performance Summary | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **GAAP Net Income** | $27 million | - | | **GAAP EPS** | $0.15 | - | | **Core Income (Continuing Ops)** | $40 million | $28 million | | **Core EPS (Continuing Ops)** | $0.23 | $0.26 | - Key strategic and legislative achievements during the quarter include: - **Debt Reduction**: Completed a **$384 million** debt reduction at the holding company using proceeds from the American Savings Bank sale[4](index=4&type=chunk) - **Asset Sale**: Pacific Current completed the sale of its largest asset, Hamakua Energy, resulting in a **$13 million** pre-tax loss[5](index=5&type=chunk) - **Critical Legislation**: The Hawaii State Legislature passed bills to fund the state's contribution to the Maui wildfire settlement, establish a liability cap for future wildfires, and protect clean energy procurement[6](index=6&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) [Hawaiian Electric Company (Utility)](index=2&type=section&id=HAWAIIAN%20ELECTRIC%20COMPANY%20%28HAWAIIAN%20ELECTRIC%29%20EARNINGS) The utility segment's Q1 2025 net income increased to **$48 million**, with core net income rising to **$50 million**, driven by higher revenues and improved performance Utility Net Income (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **GAAP Net Income** | $48 million | $39 million | | **Core Net Income** | $50 million | $44 million | - Key drivers for the increase in utility net income include: - **$7 million** in higher revenues, primarily from the annual revenue adjustment mechanism[8](index=8&type=chunk) - **$5 million** positive impact from better heat rate performance[8](index=8&type=chunk) - **$1 million** in lower O&M expenses[8](index=8&type=chunk) - The Hawaiian Electric Board of Directors declared a **$10 million** cash dividend payable to HEI for the first quarter of 2025[10](index=10&type=chunk) [Holding and Other Companies](index=3&type=section&id=HOLDING%20AND%20OTHER%20COMPANIES) The Holding and Other Companies segment reported a Q1 2025 GAAP net loss of **$21 million**, primarily due to an asset sale, while core net loss improved to **$10 million** Holding and Other Companies Net Loss (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **GAAP Net Loss** | ($21 million) | ($18 million) | | **Core Net Loss** | ($10 million) | ($16 million) | - The higher net loss was primarily due to a **$13 million** pre-tax loss from Pacific Current's sale of Hamakua Energy[11](index=11&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) [HEI Consolidated Statements of Income](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20DATA) HEI's consolidated revenues decreased to **$744.1 million** in Q1 2025, with net income for common stock falling to **$26.7 million** due to the absence of discontinued operations income present in Q1 2024 HEI Consolidated Income Statement Highlights (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Revenues** | $744,070 | $792,014 | | **Total Operating Income** | $62,420 | $50,887 | | **Income from Continuing Ops** | $27,144 | $21,661 | | **Net Income for Common Stock** | $26,671 | $42,122 | | **Diluted EPS** | $0.15 | $0.38 | [Hawaiian Electric Company Statements of Income](index=7&type=section&id=Hawaiian%20Electric%20Company%2C%20Inc.%20%28Hawaiian%20Electric%29%20and%20Subsidiaries%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20DATA) The electric utility's revenues decreased to **$738.4 million** in Q1 2025, primarily due to lower fuel costs, while operating income increased to **$75.9 million** and net income rose to **$47.8 million** Hawaiian Electric Income Statement Highlights (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Revenues** | $738,366 | $788,578 | | **Total Expenses** | $662,429 | $725,223 | | **Operating Income** | $75,937 | $63,355 | | **Net Income for Common Stock** | $47,816 | $39,221 | Utility Operational Data | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Kilowatthour sales (millions)** | 1,965 | 1,906 | | **Average fuel oil cost per barrel** | $104.55 | $121.84 | [Reconciliation of GAAP to Non-GAAP Measures](index=8&type=section&id=Explanation%20of%20HEI%27s%20Use%20of%20Certain%20Unaudited%20Non-GAAP%20Measures) [Explanation of Non-GAAP Measures](index=8&type=section&id=Explanation%20of%20Non-GAAP%20Measures) HEI uses non-GAAP 'Core' financial measures to assess fundamental operating performance by excluding non-representative items like Maui wildfire costs and asset sale losses - Non-GAAP "Core" measures are used to evaluate performance by excluding certain items to provide a better indicator of core operating activities[27](index=27&type=chunk) - The primary reconciling adjustments are costs related to the Maui wildfires and the loss on sale from the strategic review of Pacific Current[27](index=27&type=chunk) [HEI Consolidated Reconciliation](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20non-GAAP%20Measures%20%28continued%29%20-%20HEI%20Consolidated) HEI's Q1 2025 GAAP income from continuing operations of **$26.7 million** was adjusted to a Non-GAAP (Core) income of **$39.8 million** by excluding wildfire expenses and a subsidiary sale loss HEI Consolidated GAAP to Non-GAAP (Core) Reconciliation - Q1 2025 (in thousands) | Description | Amount | | :--- | :--- | | **GAAP income - continuing operations** | **$26,671** | | After-tax Maui wildfire expenses | $3,362 | | After-tax loss on sale of a subsidiary | $9,809 | | **Non-GAAP (Core) income - continuing operations** | **$39,842** | HEI Consolidated Diluted EPS Reconciliation - Q1 2025 | Description | Amount | | :--- | :--- | | **GAAP Diluted EPS - continuing operations** | **$0.15** | | **Non-GAAP (Core) Diluted EPS - continuing operations** | **$0.23** | [Hawaiian Electric (Utility) Reconciliation](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20non-GAAP%20Measures%20%28continued%29%20-%20Hawaiian%20Electric) The utility's Q1 2025 GAAP net income of **$47.8 million** was adjusted for **$1.9 million** in wildfire-related expenses, resulting in a Non-GAAP (Core) net income of **$49.7 million** Hawaiian Electric GAAP to Non-GAAP (Core) Reconciliation - Q1 2025 (in thousands) | Description | Amount | | :--- | :--- | | **GAAP net income** | **$47,816** | | Total after-tax Maui wildfire related expenses | $1,893 | | **Non-GAAP (Core) net income** | **$49,709** | [Holding and Other Companies Reconciliation](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20non-GAAP%20Measures%20%28continued%29%20-%20Holding%20and%20Other%20Companies) The Holding and Other Companies' Q1 2025 GAAP net loss of **$21.1 million** was adjusted to a Non-GAAP (Core) net loss of **$9.9 million** after accounting for wildfire expenses and a subsidiary sale loss Holding and Other Co. GAAP to Non-GAAP (Core) Reconciliation - Q1 2025 (in thousands) | Description | Amount | | :--- | :--- | | **GAAP net loss** | **($21,145)** | | After-tax Maui wildfire related expenses | $1,469 | | After-tax loss on sale of a subsidiary | $9,809 | | **Non-GAAP (Core) net loss** | **($9,867)** |

Financial Performance - The company's GAAP income from continuing operations was $267 million, or $015 per share[15] - Core earnings from continuing operations reached $398 million, or $023 per share[15] - Maui wildfire expenses reduced earnings by $34 million, or $002 per share[15] - Loss on sale at Pacific further decreased earnings by $98 million, or $006 per share[15] - Adjusted O&M excluding pension decreased from $1246 million in 1Q24 to $1220 million in 1Q25[30] Liquidity and Capital Allocation - The HoldCo and Utility had $492 million and $130 million of unrestricted cash on hand, respectively, as of the end of 1Q[17] - $479 million has been set aside in a special purpose entity for the first settlement payment[17] - Additional ~$600 million in liquidity is available from the ATM program, Utility accounts receivable backed credit facility, and corporate credit facility capacity[17] - $384 million in holding company long term debt was retired on April 9[17] - The Utility declared a $10 million dividend to HEI for the quarter[17] Wildfire Safety and Litigation - The company plans to invest nearly $400 million in capital from 2025 to 2027, with approximately $120 million invested in 2025, to enhance wildfire safety[22] - The Hawaii State Legislature passed House Bill 1001, appropriating funds to address the State of Hawaii's settlement of claims related to the Maui wildfire tort litigation settlement[13]

Financial Impact and Challenges - The company reported significant financial impacts due to the Maui windstorm and wildfires, with potential liabilities from lawsuits and regulatory penalties that may result in unrecoverable costs[26] - The company anticipates an increase in insurance premiums and challenges in obtaining wildfire and general liability insurance coverage at reasonable rates[26] - The company is facing uncertainties regarding access to capital and credit markets due to costs related to the Maui windstorm and wildfires[26] - The company is experiencing high and volatile fuel prices, which are increasing working capital requirements and customer bills[27] - The company is assessing the ability to recover costs associated with tariffs and other factors impacting prices while ensuring reasonable returns on capital investments[27] Environmental and Regulatory Commitments - The company is committed to addressing environmental, social, and governance priorities, including safety, reliability, and resilience in response to extreme weather events[27] - The company is focused on executing its Integrated Grid Plan, which was accepted by the Public Utilities Commission in 2024, to transition towards 100% renewable energy[27] - The company is subject to various regulatory actions that may alter costs to produce electricity and accelerate the move to renewable generation[1] - Hawaiian Electric aims to cut carbon emissions from power generation by 70% by 2030 compared to 2005 levels, with a commitment to achieve net zero carbon emissions by 2045 or sooner[63] - The Utilities expect to meet or exceed the State of Hawaii's Renewable Portfolio Standards (RPS) goals despite challenges in achieving the 2030 carbon reduction target[64] Workforce and Employee Development - The total number of employees decreased from 3,706 in 2022 to 2,602 in 2024, with Hawaiian Electric and its subsidiaries employing 2,533 full-time employees in 2024[45] - A new three-year collective bargaining agreement was ratified, providing for a 3% general wage increase each year from November 1, 2024, through October 31, 2027[46] - The company is focused on fostering an inclusive culture to enhance collaboration and innovation, recognizing the importance of a diverse workforce[47] - The company has invested in employee development programs, including leadership training and technical skills enhancement[50] - The company is expanding its strategic workforce planning initiative to support future transformation plans[55] Operational Performance and Sales - In 2024, Hawaiian Electric's customer accounts reached 310,336, generating electric sales revenues of $2,246,646,000, a decrease from $2,324,044,000 in 2023[66] - The electric utilities' revenues accounted for approximately 100% of HEI's consolidated revenues in 2024, with a net loss of 93% of HEI's loss from continuing operations[60] - Total MWh sales for 2024 reached 8,218.9 thousand, slightly down from 8,226.7 thousand in 2023, marking a decrease of 0.1%[73] - Net generated MWh for 2024 was 5,251.6 thousand, a decrease of 1.7% from 5,343.0 thousand in 2023[73] - Customer-sited solar MWh increased to 1,691.2 thousand in 2024, up 6.7% from 1,585.5 thousand in 2023[73] Infrastructure and Capacity - The firm capacity from Hawaiian Electric's major PPAs accounted for 19% of total net generating and firm purchased capacity on Oahu as of December 31, 2024[80] - The reserve margin across the islands served was 41.4% as of December 31, 2024, indicating a healthy buffer for peak demand[76] - The total fuel storage capacity for Hawaiian Electric is 1,025,000 barrels of LSFO at Barbers Point Tank Farm and 771,000 barrels of LSFO across various generation sites[123] - Hawaiian Electric has a total of 126.5 acres of land for substations, transformer vaults, and distribution facilities, with additional leased properties for operational purposes[124] - The Utilities own and operate various generation sites across Oahu, Hawaii, and Maui, with a mix of fuel types including LSFO, diesel, and renewable sources[122] Regulatory Compliance and Environmental Management - The Utilities have implemented procedures to monitor compliance with TSCA regulations regarding the handling of PCBs and have a program to replace PCB transformers and capacitors[117] - The Utilities are subject to various environmental regulations, including the Emergency Planning and Community Right-to-Know Act, requiring reporting of hazardous chemicals[116] - Hawaiian Electric's operations are governed by state and federal regulations, including the Endangered Species Act, to protect threatened or endangered species[121] - The Utilities have discovered leaking oil-containing equipment and are addressing these releases in compliance with applicable regulatory requirements[120] Future Plans and Strategic Initiatives - The company is undergoing a comprehensive review of strategic options for certain assets of Pacific Current, including the sale of Hamakua Holdings, LLC, expected to close in March 2025[42] - The company has suspended new investments following the Maui windstorm and wildfires while reviewing strategic options[40] - The Utilities operate 32 public DC fast chargers and have filed for an additional 150 DC fast chargers and 150 level 2 charging stations[100] - The Utilities completed the 18-month Smart Charge Hawaii Telematics pilot in December 2024, focusing on electric vehicle infrastructure[99] - The Amended and Restated Power Purchase Agreement with PGV was approved by the PUC on December 29, 2023, allowing for expanded capacity[86]

Financial Performance - HEI's GAAP income from continuing operations for FY2024 was a loss of $13225 million, or -$1042 EPS[22] - HEI's Core income from continuing operations for FY2024 was $1243 million, or $098 Core EPS[22] - HEI's GAAP loss from discontinued operations (ASB) for FY2024 was $1035 million[18] - HEI's Core income from discontinued operations (ASB) for FY2024 was $794 million[18] - HEI's Adjusted O&M Excluding Pension for 2024 was $5242 million, compared to $4638 million in 2023[35] Wildfire Risk Reduction - HEI plans to invest nearly $400 million in capital from 2025 to 2027 to enhance wildfire safety, with approximately $120 million invested in 2025[11] - Of the $400 million investment, 76% is allocated to grid hardening, 13% to grid modernization, 2% to situational awareness, 8% to operational practices, and 1% to strengthening partnerships[12] - HEI has replaced or upgraded 2124 wood poles and replaced over 20 miles of overhead copper conductor with stronger aluminum conductor[9] Wildfire Tort Litigation - Final settlement agreements were signed in November 2024, consistent with key terms announced in August 2024[17] - The Hawaii Supreme Court issued a decision on February 10, 2025, clarifying the path to final resolution of insurance company claims and finalization of settlement agreements[17] Liquidity - As of the end of 4Q, the HoldCo and Utility had $566 million (including proceeds from ASB sale), and $184 million of unrestricted cash on hand, respectively[28]

Financial Data and Key Metrics Changes - The company generated a loss from continuing operations of $1.3 billion for the full year 2024, which includes wildfire settlement accruals of $1.9 billion pretax and other Maui wildfire-related expenses [28][29] - Consolidated core net income was $124 million in 2024, down from $152 million in 2023, while utility core net income decreased to $181 million from $195 million in 2023 [29] - The average residential bill decreased by 7% in 2024, reflecting the company's efforts to reduce customer rates [14] Business Line Data and Key Metrics Changes - The sale of 90.1% of American Savings Bank (ASB) for $405 million was completed, with net proceeds of approximately $380 million used to pay down holding company debt [25][26] - ASB's 2024 results showed a net loss from discontinued operations of $103 million compared to a net income of $53 million in 2023 [27] Market Data and Key Metrics Changes - The utility achieved a 36% renewable portfolio standard in 2024, up from 33% in 2023, on track to reach an interim goal of 40% by 2030 [14] - The company ended 2024 with the strongest liquidity position in its history, bolstered by a successful equity offering that raised $558 million [10][23] Company Strategy and Development Direction - The company aims to focus on its core utility business following the sale of ASB, which simplifies its strategy and regulatory position [11][12] - A three-year action plan for wildfire safety with an estimated cost of $450 million has been established, with approximately $400 million expected to be capital expenditures [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive outcome of the Hawaii Supreme Court ruling, which is a significant step towards finalizing the settlement agreement related to the Maui wildfires [21][22] - The company plans to continue pursuing supportive legislation and aims to return to investment grade [24][86] Other Important Information - The company invested approximately $120 million in wildfire safety improvements in 2024, including a public safety power shutoff program and upgrades to utility infrastructure [16][17] - The updated wildfire safety strategy was filed with the Public Utilities Commission (PUC) in January, building upon immediate actions taken after the August 2023 wildfires [18] Q&A Session Summary Question: Confidence in the settlement proceeding without interference from insurers - Management expressed confidence in the positive outcome of the Hawaii Supreme Court decision, which is a major step towards finalizing the settlement agreement [36][37] Question: Capital expenditure expectations and financing plans - The company is refining its three-year capital forecast, expecting an increase in capital expenditures, particularly for wildfire safety and other approved projects [42][49] Question: Legislative session and potential impacts on customer bills - Management noted that discussions are ongoing regarding the impacts on customers and the establishment of a wildfire recovery fund, emphasizing the importance of balancing customer and shareholder needs [52][66] Question: Securitization and rating agency expectations - Management indicated that there is a good understanding of the benefits of securitization for securing lower-cost financing, which would ultimately benefit customers [71][73]

Financial Performance - HEI reported a full year 2024 net loss of $1,426 million, or $11.23 per share, compared to a net income of $199 million, or $1.81 per share in 2023[2]. - Core income from continuing operations for 2024 was $124 million, or $0.98 per share, down from $152 million, or $1.38 per share in 2023[2]. - The fourth quarter 2024 net loss was $68 million, or $0.40 per share, compared to net income of $49 million, or $0.44 per share in Q4 2023[2]. - Hawaiian Electric's full-year net loss was $1,226 million, compared to net income of $194 million in 2023, primarily due to pre-tax wildfire-related expenses of $2,019 million[6][7]. - The loss from discontinued operations totaled $103 million for 2024, compared to net income of $53 million in 2023[10]. - The holding and other companies reported a net loss of $96 million in 2024, up from $48 million in 2023, primarily due to higher wildfire-related expenses[11]. - The company reported a GAAP net loss of $1,226,362,000 for the year ended December 31, 2024, compared to a profit of $193,952,000 in 2023[32]. - Non-GAAP (core) net income for the year ended December 31, 2024, was $180,739,000, down from $195,068,000 in 2023, a decrease of 7%[32]. - The GAAP net loss reported for the year ended December 31, 2024, was $(96,161,000), significantly higher than the $(48,076,000) loss in 2023[33]. - Non-GAAP (Core) net loss for the year ended December 31, 2024, was $(56,438,000), compared to $(43,371,000) in 2023[33]. Revenue and Expenses - Total revenues for Q4 2024 were $799,180,000, a decrease of 6.4% from $853,424,000 in Q4 2023[23]. - Electric utility revenues decreased to $796,174,000 in Q4 2024 from $849,982,000 in Q4 2023, reflecting a decline of 6.3%[26]. - Total expenses for Q4 2024 were $745,518,000, down 4.3% from $779,093,000 in Q4 2023[23]. - Operating income for Q4 2024 was $53,662,000, compared to $74,331,000 in Q4 2023, representing a decline of 28%[23]. - The average fuel oil cost per barrel decreased to $104.38 in Q4 2024 from $132.47 in Q4 2023[26]. - Total pretax expenses for the year ended December 31, 2024, were $27,203,000, compared to $12,304,000 in 2023, reflecting a substantial increase[33]. Wildfire-Related Expenses - The company recorded a provision of $1,875,000,000 for wildfire tort-related claims in 2024[26]. - Total Maui wildfire-related pretax expenses for 2024 reached $2,046,030,000, significantly higher than $127,112,000 in 2023[31]. - Wildfire tort-related claims amounted to $1,915,000,000 for the year ended December 31, 2024, compared to $75,000,000 in 2023[31]. - Total Maui windstorm and wildfire-related expenses, net of insurance recoveries, for 2024 were $1,895,086,000, compared to $1,503,000 in 2023[32]. - Total Maui windstorm and wildfires related expenses, net of insurance recoveries, were $4,040,000 for Q4 2024, compared to $1,254,000 in Q4 2023[33]. Legal and Interest Expenses - Legal expenses related to Maui wildfire claims totaled $13,449,000 for Q4 2024, compared to $23,768,000 in Q4 2023, a reduction of 43%[31]. - Legal expenses for the three months ended December 31, 2024, amounted to $2,212,000, a decrease from $5,282,000 in the same period of 2023[33]. - The company incurred interest expenses of $14,834,000 for the year ended December 31, 2024, significantly higher than $2,600,000 in 2023[31]. - Interest expenses for the year ended December 31, 2024, were $3,666,000, compared to $1,377,000 in 2023, indicating a significant increase[33]. Dividends and Shareholder Returns - The utility dividend to HEI remains suspended due to limited cash needs following recent equity issuance[9]. - Non-GAAP diluted earnings per share for Q4 2024 was $0.20, down from $0.34 in Q4 2023, a decline of 41%[31]. - Basic earnings per common share for continuing operations were $0.17 in Q4 2024, down from $0.41 in Q4 2023[23]. Strategic Changes - HEI sold 90.1% of American Savings Bank, simplifying its strategy and regulatory position while allowing a focus on the utility business[3][5]. - The utility achieved a 36% renewable portfolio standard in 2024, on track to meet the 40% milestone by 2030[3][5].

Legal and Settlement Issues - HEI and Hawaiian Electric have agreed to contribute a total of $1.99 billion to settle tort-related legal claims from the Maui windstorm and wildfires, with payments structured in four equal annual installments of $479 million starting in late 2025 [269]. - The total defendant contribution for the settlement is approximately $4.04 billion, with HEI and Hawaiian Electric's share representing about 49.2% of this total [269]. - Incremental expenses related to the Maui windstorm and wildfires amounted to approximately $2.2 billion since August 8, 2023, including legal claims and other associated costs [298]. - The company expects to continue incurring legal expenditures related to the Maui windstorm and wildfires, despite some mitigation through insurance recoveries [298]. - Estimated wildfire liabilities accrued by the Utilities reached approximately $1.92 billion as of September 30, 2024, related to the Maui windstorm and wildfire claims [311]. - The Utilities revised their total settlement accrual to $1.92 billion, classifying the first $479 million installment as a current liability [394]. - Hawaiian Electric's cash and cash equivalents balance was $147.6 million as of September 30, 2024, an increase from $106.1 million as of December 31, 2023 [395]. - The ABL Facility allows borrowings of up to $250 million on a revolving basis, but the amount that could be drawn was temporarily limited to approximately $90 million due to accrued wildfire claims [401]. Financial Performance - In the third quarter of 2024, HEI and Hawaiian Electric recorded a decrease in kWh sales by 1.6% compared to the same period in 2023, attributed to the impact of the Maui windstorm and wildfires [282]. - Revenues for the three months ended September 30, 2024, increased by 4% to $938,383,000 compared to $901,873,000 in 2023, driven by growth in the electric utility and bank segments [291]. - Operating loss for the nine months ended September 30, 2024, was $(1,769,104,000), a significant decrease from operating income of $261,608,000 in 2023, primarily due to wildfire tort-related claims totaling $1.71 billion [292]. - Net loss for common stock for the nine months ended September 30, 2024, was $(1,357,764,000), compared to net income of $150,449,000 in 2023, reflecting lower performance in the electric utility and bank segments [292]. - The effective tax rate for the third quarter of 2024 was a 30% tax benefit, compared to a 15% tax expense in the same quarter of 2023, influenced by substantial pretax losses [293]. - The operating loss for Q3 2024 was $(45.156) million, significantly higher than $(8.806) million in Q3 2023, attributed to a $35.2 million impairment loss on long-lived assets at Pacific Current [305]. - The net loss for Q3 2024 was $(40.595) million, compared to $(13.708) million in Q3 2023, reflecting the same factors affecting the operating loss [305]. - For the first nine months of 2024, total revenues were $10.144 million, a decline of 30.5% from $14.540 million in the same period of 2023, mainly due to lower sales at Pacific Current subsidiaries [305]. - HEI and its subsidiaries incurred net losses of approximately $104 million and $1.36 billion for the three and nine months ended September 30, 2024, respectively [311]. - The company suspended dividends starting after the second quarter of 2023 to enhance liquidity and allocate cash for rebuilding efforts [323]. Economic and Market Conditions - The economic conditions in Hawaii remained stable with an unemployment rate of 2.9% as of September 2024, while the average daily passenger count increased by 3.9% compared to the previous year [282]. - Hawaii's unemployment rate in September 2024 was 2.9%, slightly lower than 3.0% in September 2023, while Maui County's unemployment is projected to average 4.0% in 2024 [299]. - The average daily passenger count in Hawaii increased by 3.9% compared to the previous year, although international visitor arrivals remained 22.8% below 2019 levels [299]. - The median sales price for single-family homes in Oahu increased by 4.8% to $1,112,722 compared to the same period in 2023, while the number of closed sales for condominiums decreased by 5.6% [300]. - The consumer price index in Hawaii increased by 4.2% over the last 12 months as of September 2024, impacting operational costs [329]. Utility Operations and Strategy - The Utilities aim to achieve a 70% reduction in carbon emissions from power generation by 2030, compared to a 2005 baseline, but expect delays due to supply chain disruptions and credit rating downgrades [343]. - The last coal-fired IPP plant in Hawaii ceased operations on September 1, 2022, removing approximately 10% of Oahu's generation from the Utilities' mix [344]. - The Utilities achieved a renewable portfolio standard (RPS) of 34.5% for 2020, exceeding the statutory target of 30% [346]. - The estimated cost for the full deployment of advanced metering infrastructure (AMI) under the Grid Modernization Strategy is approximately $143 million, with $129 million incurred to date [356]. - The Utilities have completed the formal GMS Phase 1 project, deploying about 448,000 advanced meters, servicing approximately 95% of total customers [356]. - The Public Safety Power Shutoff (PSPS) program is set to launch on July 1, 2024, to mitigate wildfire risks in high fire risk areas [341]. - The Utilities are developing an integrated Demand Response Portfolio Plan to enhance system operations and reduce costs for customers [352]. Banking and Financial Services - The net interest margin for ASB in the third quarter of 2024 was 2.82%, an increase from 2.79% in the previous quarter and 2.70% in the same quarter last year [283]. - Core deposits at ASB decreased by approximately 2.1% from year-end 2023, leading to an increase in overall funding costs [284]. - ASB recorded a net income of $19 million in Q3 2024, an increase of $8 million compared to $11 million in the same period in 2023 [425]. - Interest and dividend income increased to $262 million in Q3 2024 from $247 million in Q3 2023, a rise of 6.1% [426]. - Noninterest income rose to $50 million in Q3 2024, up from $45 million in Q3 2023, reflecting a 11.1% increase [426]. - Total revenues for the nine months ended September 30, 2024, reached $312 million, compared to $292 million for the same period in 2023, marking a 6.8% increase [426]. - The allowance for credit losses at the end of the period was $64.8 million, down from $76.4 million at the end of 2023 [445]. - ASB's Tier-1 leverage ratio as of September 30, 2024, was 8.6%, exceeding the regulatory requirement of 5.0% [452].

Financial Performance - HEI reported a consolidated net loss of $104.4 million, or $0.91 per share, for Q3 2024, which includes a $203.0 million accrual for estimated wildfire liabilities[1]. - Core net income for Q3 2024 was $52.2 million, down from $61.5 million in Q3 2023[3]. - Hawaiian Electric's net loss for Q3 2024 was $82.6 million, compared to net income of $43.5 million in Q3 2023, primarily due to a $121 million after-tax loss from wildfire liabilities[11]. - The net loss for common stock was $(104,402) thousand for the three months ended September 30, 2024, compared to a net income of $41,118 thousand in the same period of 2023[28]. - Basic earnings per share for the three months ended September 30, 2024, were $(0.91), down from $0.37 in the same period of 2023[28]. - GAAP net income for the three months ended September 30, 2024, was $(104,402) thousand, compared to $41,118 thousand in 2023, reflecting a significant decline[37]. - Non-GAAP (core) net income for the same period was $52,155 thousand, down from $61,508 thousand year-over-year[37]. - The company reported a GAAP diluted loss per share of $(0.91) for Q3 2024, compared to earnings of $0.37 per share in Q3 2023[37]. - Non-GAAP diluted earnings per share for Q3 2024 were $0.46, down from $0.56 in the same quarter of 2023[37]. Revenue and Expenses - Total revenues for the three months ended September 30, 2024, were $938,383 thousand, an increase from $901,873 thousand in the same period of 2023, representing a growth of approximately 4.3%[28]. - The electric utility segment reported revenues of $829,617 thousand for the three months ended September 30, 2024, compared to $794,987 thousand in the prior year, reflecting an increase of about 4.4%[28]. - Total expenses increased significantly to $1,064,931 thousand for the three months ended September 30, 2024, from $826,762 thousand in the same period of 2023, marking a rise of approximately 28.8%[28]. - The electric utility segment incurred an operating loss of $(104,564) thousand for the three months ended September 30, 2024, compared to an operating income of $71,358 thousand in the prior year[28]. Wildfire-Related Expenses - Incremental after-tax Maui wildfire-related expenses totaled $126.3 million, impacting Hawaiian Electric's core net income[13]. - The company recorded a provision for wildfire tort-related claims of $163 million in the third quarter of 2024[28]. - The company incurred $236,396 in pretax expenses related to the Maui wildfires, with a significant portion attributed to wildfire tort-related claims[35]. - After-tax adjustments related to wildfire expenses amounted to $156,557, compared to $20,390 in the previous year[35]. - Wildfire tort-related claims expenses reached $150,727 thousand for Q3 2024, significantly higher than $55,688 thousand in Q3 2023[37]. - The company incurred after-tax expenses of $175,514 thousand related to the Maui wildfire for the three months ended September 30, 2024[37]. - The total after-tax expenses related to Maui windstorm and wildfires for the nine months ended September 30, 2024, were $1,404,495 thousand[40]. Asset and Equity - HEI's asset impairment for Pacific Current was $35.2 million, contributing to a net loss of $40.6 million in holding and other companies for Q3 2024[18]. - The return on average common equity for the twelve months ended September 30, 2024, was not meaningful (NM), compared to 9.5% in the prior year[28]. - The efficiency ratio based on GAAP for 2024 was 70.30%, an improvement from 72.30% in 2023[43]. Banking Operations - Total loans at American Savings Bank were $6.1 billion as of September 30, 2024, down 2.3% from December 31, 2023[16]. - The bank's net interest margin expanded to 2.82%, an increase of 3 basis points compared to Q2 2024[1]. - Total interest and dividend income for the three months ended June 30, 2024, was $87,655, an increase from $86,178 in the previous quarter[32]. - Net interest income after provision for credit losses was $61,986, compared to $63,594 in the previous quarter[32]. - Noninterest income totaled $17,489 for the three months ended June 30, 2024, up from $15,765 in the previous quarter[32]. - Total noninterest expense decreased to $56,046 from $136,465 in the previous quarter, primarily due to a significant goodwill impairment in the prior period[32]. - Net income for the three months ended June 30, 2024, was $18,778, a recovery from a loss of $45,787 in the previous quarter[32]. - Return on average assets improved to 0.81% from (1.97%) in the previous quarter[32]. - Return on average equity increased to 14.28% from (33.97%) in the previous quarter[32]. Management Outlook - HEI's management expressed confidence that the recent settlement agreements represent the best outcome for the company and the community[4].

Financial Data and Key Metrics Changes - For Q2 2024, the company recorded a consolidated net loss of $1.3 billion or $11.74 per share, primarily due to significant one-time losses related to wildfire liabilities and goodwill impairment [15][16] - The utility reported a net loss of $1.23 billion for the quarter, which included a $1.71 billion loss due to the accrual of estimated wildfire liabilities [15][16] - Excluding one-time losses, consolidated core net income was $49.1 million, down from $54.6 million in Q2 2023 [16][17] Business Line Data and Key Metrics Changes - Utility core net income decreased to $43.9 million from $45.3 million year-over-year, driven by higher operational and wildfire mitigation expenses [17] - American Savings Bank (ASB) core net income increased slightly to $20.7 million from $20.2 million, attributed to prudent expense management and higher non-interest income [17] Market Data and Key Metrics Changes - The utility's capital budget for wildfire mitigation efforts is nearly $120 million, representing over 35% of the total budget [10] - The utility has launched a Public Safety Power Shutoff program to enhance safety during high-risk conditions [9] Company Strategy and Development Direction - The company is focused on investing in a sustainable and resilient future for Hawaii, including enhancing wildfire safety strategies and strengthening infrastructure [9][11] - A comprehensive review of strategic options for ASB is ongoing, with no set timetable for potential actions [13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the proposed settlement related to the Maui wildfires, which aims to provide a clearer path forward for the company [6][21] - The company does not intend to raise rates to cover settlement costs and believes it can meet future needs without impacting customers [35] Other Important Information - The proposed settlement includes a total payment of over $4 billion to settle wildfire-related claims, with HEI's contribution being $1.99 billion pretax [6][15] - A hearing is scheduled for August 13 to address the claims of insurance companies related to the settlement [7][27] Q&A Session Summary Question: Confidence in finalizing the settlement - Management highlighted the importance of the settlement terms and the 90-day period for discussions between plaintiffs and insurers to resolve claims [20][21] Question: Capital spending and financing options - The company is working on long-term capital plans and aims for investment-grade credit metrics to lower customer bills [22][23] Question: Court's role in insurer claims - Management explained the ongoing court proceedings and the potential outcomes regarding insurer claims against individual plaintiffs [26][27] Question: Settlement size and insurer involvement - Management expressed cautious optimism about the settlement terms and the potential for resolution between plaintiffs and insurers [30][31]

Hawaiian Electric (NYSE:HE) stock is up on Wednesday as the reports spread that Maui County is preparing to offer a settlement to those affected by the 2023 Maui fires. On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. According to these reports, the county is weighing a settlement for thousands ...