[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]

Core Viewpoint - Hawaiian Electric's stock is experiencing a significant increase due to reports that Maui County is preparing to offer settlements to those affected by the 2023 Maui fires [1][3]. Group 1: Settlement Details - Maui County is considering settlements for thousands affected by the fires, coinciding with lawsuits against the county progressing in court [3]. - Specific details regarding the settlements, such as the timeline for payments and the amounts involved, remain undisclosed, raising concerns about whether the settlements will be sufficient to prevent further lawsuits [3][4]. Group 2: Impact on Hawaiian Electric - Settlements could potentially shield Hawaiian Electric from prolonged and expensive legal battles, which is generating investor optimism and could mark a turning point in the company's recent challenges [5]. - As a result of this news, Hawaiian Electric's stock has risen by 14.7% with over 10 million shares traded, significantly surpassing its average daily trading volume of approximately 2.9 million shares [7].