HEI(HE) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Consolidated Results Overview HEI's Q2 2025 overview details consolidated financial performance, strategic business advancements, legislative developments, and key operational initiatives Consolidated Financial Highlights HEI reported Q2 2025 GAAP net income of $26 million ($0.15/share) and Core income of $35 million ($0.20/share), compared to $28 million ($0.26/share) Core income in Q2 2024 | Metric | Q2 2025 (GAAP) | Q2 2025 (Core) | Q2 2024 (Core) | | :----- | :------------- | :------------- | :------------- | | Net Income | $26 million | $35 million | $28 million | | EPS | $0.15 | $0.20 | $0.26 | - Core income from continuing operations decreased year-over-year from $0.26 per share in Q2 2024 to $0.20 per share in Q2 2025[2] Strategic Business Updates HEI is simplifying its business model by selling Pacific Current assets and planning to divest American Savings Bank, with the asset sale impacting earnings by $5 million - Sale of Pacific Current's solar and battery storage assets completed[3][4] - Expected divestiture of remaining stake in American Savings Bank over the next year[4] - Quarter's results reflect a $5 million earnings impact from asset impairment and tax credit recapture related to the Pacific Current sale[3] Legislative and Regulatory Progress New legislation establishes a wildfire liability cap, authorizes $500 million for safety improvements via securitization, and funds Maui wildfire tort settlement contributions - Legislation signed into law directs the Public Utilities Commission to establish an aggregate liability cap for economic damages from future wildfires[3][5] - Legislation authorizes securitization to finance $500 million in wildfire safety improvements, enhancing customer affordability[3][5] - Legislation appropriates funds for the State of Hawaii's contribution to the Maui wildfire tort litigation settlement[3][5] Key Operational Initiatives The utility actively advances its wildfire safety strategy to enhance service safety, reliability, and resilience, mitigating extreme weather risks - Utility continues to improve the safety, reliability, and resilience of service to communities through advancement of wildfire safety strategy[3] Segment-Specific Financial Performance This section analyzes the Q2 2025 financial performance of Hawaiian Electric and Holding and Other Companies, highlighting key earnings drivers and operational expenses Hawaiian Electric Company Hawaiian Electric reported Q2 2025 net income of $39 million, a significant recovery from a $1,229 million net loss in Q2 2024, driven by the absence of wildfire liabilities Earnings Analysis This section provides a detailed analysis of Hawaiian Electric's GAAP and Core earnings for Q2 2025 and Q2 2024, highlighting year-over-year changes | Metric | Q2 2025 (GAAP) | Q2 2024 (GAAP) | Change | | :----- | :------------- | :------------- | :----- | | Net Income (Loss) | $39 million | $(1,229) million | +$1,268 million | | Metric | Q2 2025 (Core) | Q2 2024 (Core) | Change | | :----- | :------------- | :------------- | :----- | | Net Income | $42 million | $44 million | -$2 million | - The $1,712 million loss recorded in Q2 2024 due to the accrual of estimated wildfire liabilities was the primary driver for the year-over-year improvement[7] Operational Expenses and Revenue Drivers This section details Hawaiian Electric's operational expenses, including wildfire mitigation costs, and revenue drivers for Q2 2025 - Higher O&M expenses of $11 million, driven by $7 million in higher wildfire mitigation program expenses, $4 million in higher legal and consulting costs, $2 million in higher property and general liability insurance costs, and $1 million in higher demand response expenses[6] - Partially offset by $7 million in higher revenues, primarily from the annual revenue adjustment mechanism, and a $4 million impact from better heat rate performance[7] - Pre-tax wildfire-related expenses of $11 million were partially offset by $10 million of costs deferred pursuant to the Public Utilities Commission's decision[6] Utility Dividend Declaration The Hawaiian Electric Board of Directors declared a $10 million cash dividend payable to HEI for the second quarter of 2025 - The Hawaiian Electric Board of Directors declared a $10 million cash dividend payable to HEI for the second quarter of 2025[8] Holding and Other Companies Holding and Other Companies reported a Q2 2025 net loss of $13 million, an improvement from $20 million in Q2 2024, primarily due to lower wildfire expenses | Metric | Q2 2025 (GAAP) | Q2 2025 (Core) | Q2 2024 (Core) | | :----- | :------------- | :------------- | :------------- | | Net Loss | $(13) million | $(7) million | $(15) million | | Metric | Q2 2025 (GAAP) | Q2 2024 (GAAP) | Change | | :----- | :------------- | :------------- | :----- | | Net Loss | $(13) million | $(20) million | +$7 million | - The lower net loss for the quarter was primarily due to lower wildfire expenses, partially offset by expenses taken in relation to the strategic review of Pacific Current[9] Consolidated GAAP Financial Statements This section provides HEI's consolidated GAAP statements of income, detailing revenues, expenses, and net income for Q2 2025 and year-to-date HEI and Subsidiaries Statements of Income HEI's consolidated statements of income show significant Q2 2025 recovery, driven by the absence of prior-year wildfire claims, with positive operating income despite slightly decreased revenues | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Total revenues | $746,392 | $795,417 | $1,490,462 | $1,587,431 | | Total expenses | $692,645 | $2,457,006 | $1,374,295 | $3,198,133 | | Operating income (loss) | $53,747 | $(1,661,589) | $116,167 | $(1,610,702) | | Income (loss) from continuing operations | $26,558 | $(1,249,224) | $53,702 | $(1,227,563) | | Net income (loss) for common stock | $26,085 | $(1,295,484) | $52,756 | $(1,253,362) | | Diluted earnings (loss) per common share | $0.15 | $(11.74) | $0.31 | $(11.37) | - Electric utility expenses in Q2 2024 included $1,712 million of Wildfire tort-related claims, which were absent in Q2 2025, leading to a dramatic improvement in operating income[19] Hawaiian Electric GAAP Financial Statements This section presents Hawaiian Electric's GAAP statements of income and key operating data, including kilowatthour sales and fuel costs for Q2 2025 Hawaiian Electric and Subsidiaries Statements of Income Hawaiian Electric's statements of income reflect a strong Q2 2025 recovery to net income, primarily due to the absence of wildfire claims, with positive operating income | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenues | $742,482 | $792,331 | $1,480,848 | $1,580,909 | | Total expenses | $677,938 | $2,436,771 | $1,340,367 | $3,161,994 | | Operating income (loss) | $64,544 | $(1,644,440) | $140,481 | $(1,581,085) | | Net income (loss) for common stock | $39,150 | $(1,229,394) | $86,966 | $(1,190,173) | - Wildfire tort-related claims of $1,712,000 thousand were recorded in Q2 2024, but not in Q2 2025, which is the main reason for the improved financial performance[21] Other Electric Utility Operating Data Hawaiian Electric reported increased kilowatthour sales across all subsidiaries and a decrease in average fuel oil cost per barrel in Q2 2025 | Metric | Q2 2025 | Q2 2024 | YoY Change | | :---------------------- | :------ | :------ | :--------- | | Kilowatthour sales (millions) | 2,032 | 1,971 | +61 | | Average fuel oil cost per barrel | $100.40 | $120.12 | -$19.72 | - Kilowatthour sales increased across all Hawaiian Electric subsidiaries (Hawaiian Electric, Hawaii Electric Light, Maui Electric) in Q2 2025 compared to Q2 2024[21] Non-GAAP Measures and Reconciliations This section explains and reconciles non-GAAP "Core" measures for HEI, Hawaiian Electric, and Holding and Other Companies, adjusting for wildfire and strategic review costs Explanation of Non-GAAP Measures HEI management uses "Core" non-GAAP measures to assess performance, excluding Maui wildfire-related costs and Pacific Current strategic review expenses for a clearer view of core operations - "Core" measures exclude Maui wildfire-related costs and expenses taken in connection with HEI's ongoing review of strategic options for Pacific Current[3][16][23] - Management believes these non-GAAP measures provide useful information and are a better indicator of the companies' core operating activities[23] HEI Consolidated Non-GAAP Reconciliation HEI's consolidated Core income from continuing operations for Q2 2025 was $35,356 thousand ($0.20 diluted EPS), after adjusting for wildfire costs, subsidiary sale loss, and asset impairment | Metric (in thousands) | Q2 2025 (GAAP) | Q2 2025 (Core) | Q2 2024 (GAAP) | Q2 2024 (Core) | | :-------------------- | :------------- | :------------- | :------------- | :------------- | | Income (loss) - continuing operations | $26,085 | $35,356 | $(1,249,697) | $28,377 | | Diluted EPS - continuing operations | $0.15 | $0.20 | $(11.33) | $0.26 | - Total Maui wildfire-related expenses, net of insurance recoveries and approved deferral treatment (after tax), were $3,829 thousand in Q2 2025, significantly lower than $1,278,074 thousand in Q2 2024[25] - Loss on sale of a subsidiary (after tax) was $9,809 thousand for the six months ended June 30, 2025[25] Hawaiian Electric Non-GAAP Reconciliation Hawaiian Electric's Core net income for Q2 2025 was $42,481 thousand, a slight decrease from $43,874 thousand in Q2 2024, with 2024 GAAP-Core difference due to wildfire expenses | Metric (in thousands) | Q2 2025 (GAAP) | Q2 2025 (Core) | Q2 2024 (GAAP) | Q2 2024 (Core) | | :-------------------- | :------------- | :------------- | :------------- | :------------- | | Net income (loss) | $39,150 | $42,481 | $(1,229,394) | $43,874 | - Total Maui wildfire-related expenses, net of insurance recoveries and approved deferral treatment (after tax), were $3,331 thousand in Q2 2025, compared to $1,273,268 thousand in Q2 2024[26] Holding and Other Companies Non-GAAP Reconciliation Holding and Other Companies' Core net loss for Q2 2025 improved to $7,125 thousand from $15,497 thousand in Q2 2024, reflecting lower wildfire expenses and asset adjustments | Metric (in thousands) | Q2 2025 (GAAP) | Q2 2025 (Core) | Q2 2024 (GAAP) | Q2 2024 (Core) | | :-------------------- | :------------- | :------------- | :------------- | :------------- | | Net loss | $(13,065) | $(7,125) | $(20,303) | $(15,497) | - Total Maui wildfire-related expenses, net of insurance recoveries (after tax), were $498 thousand in Q2 2025, down from $4,806 thousand in Q2 2024[27] - Loss on sale of a subsidiary (after tax) and asset impairment (after tax) contributed $9,809 thousand and $5,442 thousand respectively to adjustments for the six months ended June 30, 2025[27] Corporate Information and Disclosures This section provides details on the earnings call, an overview of HEI's operations, and important disclosures regarding forward-looking statements and associated risks Earnings Call and Investor Relations HEI will host a webcast and conference call on August 7, 2025, to discuss Q2 2025 results, with materials available on HEI's and the PUC's websites - Webcast and conference call scheduled for August 7, 2025, at 10:30 a.m. Hawaii time (4:30 p.m. Eastern)[10] - Investors can access presentation materials and listen to the call via HEI's website (www.hei.com) under "Investor Relations" and the Public Utilities Commission of the State of Hawaii (PUC) website[11][12][13] About Hawaiian Electric Industries, Inc. (HEI) HEI is a family of companies providing energy services in Hawaii, with Hawaiian Electric serving 95% of the population, committed to decarbonization, grid modernization, and public safety - HEI's electric utility, Hawaiian Electric, supplies power to approximately 95% of Hawaii's population[15] - HEI is undertaking an ambitious effort to decarbonize its operations and the broader state economy, and modernize and harden the grid to ensure resilience and public safety[15] Forward-Looking Statements and Risk Factors This release contains forward-looking statements subject to risks and uncertainties, not guarantees of future performance, and HEI does not undertake to update them unless legally required - Forward-looking statements are predictive in nature, depend upon or refer to future events or conditions, and are subject to risks, uncertainties, and assumptions[17] - Investors should read forward-looking statements in conjunction with the "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" discussions in HEI's Annual Report on Form 10-K for the year ended December 31, 2024, and other SEC periodic reports[18] - HEI, Hawaiian Electric, and their subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by federal securities laws[18]