HEI(US:HE)2025-05-09 20:26PART I. FINANCIAL INFORMATION Financial Statements Unaudited consolidated financial statements for HEI and Hawaiian Electric detail HEI's net income decline from ASB sale and wildfire liability, contrasting with Hawaiian Electric's increased net income Hawaiian Electric Industries, Inc. and Subsidiaries Financial Statements HEI's Q1 2025 consolidated financial statements show decreased revenues and net income, primarily due to the ASB sale, with a significant $1.915 billion wildfire tort liability on the balance sheet HEI Condensed Consolidated Statements of Income (unaudited) | (in thousands, except per share amounts) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Total revenues | $744,070 | $792,014 | | Total operating income | $62,420 | $50,887 | | Income from continuing operations | $27,144 | $21,661 | | Income from discontinued operations | $— | $20,934 | | Net income for common stock | $26,671 | $42,122 | | Diluted earnings per common share | $0.15 | $0.38 | HEI Condensed Consolidated Balance Sheets (unaudited) | (dollars in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $8,766,181 | $8,931,416 | | Total current liabilities | $1,559,019 | $1,324,591 | | Wildfire tort-related claims (Current) | $478,750 | $478,750 | | Wildfire tort-related claims (Noncurrent) | $1,436,250 | $1,436,250 | | Total liabilities | $7,226,012 | $7,418,034 | | Total shareholders' equity | $1,505,876 | $1,479,089 | - Net cash provided by operating activities decreased to $49.7 million in Q1 2025 from $124.6 million in Q1 2024, with net cash used in financing activities totaling $102.2 million primarily for long-term debt repayment2426 Hawaiian Electric Company, Inc. and Subsidiaries Financial Statements Hawaiian Electric's Q1 2025 financial statements report decreased revenues but increased operating and net income, despite significant wildfire tort-related claims liability Hawaiian Electric Condensed Consolidated Statements of Income (unaudited) | (in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 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 | Hawaiian Electric Condensed Consolidated Balance Sheets (unaudited) | (dollars in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $7,864,144 | $7,613,604 | | Wildfire tort-related claims (Current) | $478,750 | $478,750 | | Wildfire tort-related claims (Noncurrent) | $1,436,250 | $1,436,250 | | Total capitalization and liabilities | $7,864,144 | $7,613,604 | Notes to Condensed Consolidated Financial Statements (unaudited) Notes detail accounting policies and significant events, including the $1.99 billion Maui wildfire settlement, ASB sale, regulatory environment, and debt compliance - HEI and Hawaiian Electric entered into settlement agreements to resolve tort-related legal claims from the Maui wildfires for a total contribution of $1.99 billion, including a $75 million contribution to the One 'Ohana Initiative, payable in four equal annual installments of approximately $479 million starting in early 20264950 - As of March 31, 2025, the company accrued a liability of $1.915 billion for wildfire tort-related claims ($478.75 million current, $1.436 billion non-current), with an additional $40 million recorded as an insurance receivable related to the settlement5521 - The company is defending against a putative securities class action and several shareholder derivative lawsuits related to the Maui wildfires, with the ultimate outcome and potential loss not reasonably estimable at this time606162 - On December 31, 2024, the company sold 90.1% of American Savings Bank (ASB), resulting in ASB's results being presented as discontinued operations for all periods shown697172 - The Public Utilities Commission (PUC) temporarily suspended the Earnings Sharing Mechanism (ESM) to prevent customers from potentially bearing costs associated with the Maui wildfires without prior PUC review110 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the financial impact of the Maui wildfire settlement, HEI's net income decline from the bank segment sale, and the electric utility's increased net income, outlining liquidity and strategic priorities HEI Consolidated HEI's consolidated results were dominated by the Maui wildfire settlement and the bank segment sale, leading to a net income drop despite significant capital raising for settlement funding HEI Consolidated Results of Operations | (in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $744,070 | $792,014 | | Operating income | $62,420 | $50,887 | | Income from continuing operations for common stock | $26,671 | $21,188 | | Income from discontinued operations | $— | $20,934 | | Net income for common stock | $26,671 | $42,122 | - HEI and Hawaiian Electric are obligated to contribute $1.99 billion towards a settlement for tort-related legal claims from the Maui wildfires, with the first of four equal annual installments of $479 million classified as a current liability197200 - To finance the first settlement payment, HEI completed a sale of 62.2 million shares of common stock, raising net proceeds of approximately $557.7 million201 - Total available liquidity as of March 31, 2025, was $1.232 billion, consisting of $299 million in undrawn utility credit, $304 million in undrawn 'All Other' credit, and $629 million in cash and cash equivalents227228 Electric Utility The electric utility segment's net income increased due to higher Annual Revenue Adjustment (ARA) revenue and lower O&M expenses, despite decreased revenues, while focusing on wildfire safety and facing decarbonization delays Electric Utility Results of Operations | (in millions) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $738 | $789 | | Operating income | $76 | $63 | | Net income for common stock | $48 | $39 | - Kilowatt-hour (kWh) sales increased by 3.1% in Q1 2025 compared to Q1 2024, reflecting warmer weather and economic recovery on Maui247 - The utility developed a 2025-2027 Wildfire Safety Strategy estimated to cost $450 million, focusing on grid hardening, enhanced inspections, and operational changes, and launched a Public Safety Power Shutoff (PSPS) program on July 1, 2024265266 - Due to project delays and financing challenges, the utility expects its goal of a 70% reduction in carbon emissions will be achieved later than the original 2030 target date269 - As of March 31, 2025, the utility's total available liquidity was approximately $504 million, including $374 million in undrawn credit and $130 million in cash322323 Quantitative and Qualitative Disclosures About Market Risk The company reports no significant changes in its exposure to market risk during the first quarter of 2025, referring to its 2024 Form 10-K for full discussion - There have been no significant changes in HEI's and Hawaiian Electric's exposure to market risk during the quarter ended March 31, 2025343 Controls and Procedures Management for both HEI and Hawaiian Electric concluded their disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the quarter - Management of both HEI and Hawaiian Electric concluded that their respective disclosure controls and procedures were effective as of the end of the reporting period345349 - No changes in internal control over financial reporting occurred during the first quarter of 2025 that materially affected, or are reasonably likely to materially affect, internal controls346350 PART II. OTHER INFORMATION Legal Proceedings This section incorporates by reference detailed descriptions of legal proceedings from other parts of the report, including the 2024 Form 10-K and financial statement notes - The report incorporates by reference detailed discussions of legal proceedings from its 2024 Form 10-K and Notes 2 and 4 of this Form 10-Q, which cover the Maui wildfire litigation and regulatory matters352 Risk Factors This section directs readers to the risk factors detailed in the company's 2024 Form 10-K, the MD&A, and other sections of this quarterly report for information regarding risks and uncertainties - For information on risk factors, the report refers to the 2024 Form 10-K, the MD&A, and the Cautionary Note Regarding Forward-Looking Statements within this document353 Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities During Q1 2025, HEI purchased common shares on the open market to satisfy plan requirements, not under a publicly announced repurchase program Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2025 | 30,376 | $9.01 | | February 2025 | 23,836 | $9.91 | | March 2025 | 18,728 | $10.73 | - Share purchases were made to satisfy the requirements of the HEI Dividend Reinvestment and Stock Purchase Plan and the Hawaiian Electric Industries Retirement Savings Plan, not as part of a publicly announced buyback program357 Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The exhibits filed with this report include certifications from the CEOs and CFOs of both HEI and Hawaiian Electric, as well as XBRL interactive data files358