Continued Strength of Utility and Bank
Operations
Quarter’s Results Include Accrual for
Previously-Announced Tort Litigation Settlement and Bank’s Goodwill
Impairment
Settlement Will Help Communities to Move
Forward and Aid Rebuilding
- 2Q24 Net Loss of $1.30 billion, or $11.74 per share,
Includes Accrual of Estimated Wildfire Liabilities From
Tort-related Legal Claims
- Quarter’s Results Also Include Bank’s Goodwill Impairment
Related to HEI’s Ongoing Review of Strategic Options for
ASB
- Excluding Accrual of Estimated Wildfire Liabilities, ASB’s
Goodwill Impairment, and Other Maui Wildfire-Related Expenses,
Results Were Solid for the Quarter, with Core Net Income and Core
EPS1 of $49.1 million and $0.44
- Utility Continues to Advance Wildfire Mitigation and
Resilience Efforts
- Bank Net Interest Margin Expanded to 2.79%, Up 4 Basis
Points Compared to 1Q
- Strong Bank Credit Quality and Another Release of Reserves
Reflect Healthy Hawaii Economy
Hawaiian Electric Industries, Inc. (NYSE - HE) (HEI)
today reported a consolidated net loss for the second quarter of
2024 of $1.30 billion, or $11.74 per share. The results included a
$1.71 billion ($1.27 billion after taxes) loss from the accrual of
estimated wildfire liabilities from tort-related legal claims, an
$82.2 million ($66.1 million after taxes) loss from a goodwill
impairment at American Savings Bank (ASB) and $9.8 million ($7.2
million after taxes) of other Maui wildfire-related expenses, net
of insurance recoveries and deferrals. Excluding these items, core
net income2 was $49.1 million for the second quarter of 2024
compared to $54.6 million in the second quarter of 2023.
“Our core operations remain strong across the enterprise, and
both our utility and bank remain very well-positioned to continue
serving our customers and communities for the long term. The
utility continues to rapidly advance wildfire mitigation and
resilience efforts, and excluding the goodwill impairment taken
during the quarter, our bank is improving profitability while
maintaining a strong capital and liquidity position,” said Scott
Seu, HEI president and CEO.
“Last week we announced that HEI, Hawaiian Electric and other
defendants had entered into an agreement in principle to settle all
tort claims related to the Maui wildfires. The settlement would
allow all parties to come together on a path forward. Our Board and
management team are pleased to have reached this agreement in
principle on an expedited basis. We are confident that this
settlement represents the best outcome for HEI, as it provides a
clear line of sight toward resolution of the wildfire-related tort
litigation and increased certainty for our company’s path ahead. In
the coming months, we will be focused on finalizing the agreement
and regaining the strength of our enterprise.
“Since last August, we have been advancing a strategy designed
to support a strong, financially healthy enterprise that will
empower a thriving future for Hawaii. Consistent with this
approach, HEI has been undertaking a comprehensive review of
strategic options for ASB, which is what led us to report a
non-cash goodwill impairment for the bank last month. We will
continue to take prudent and measured actions to ensure our
companies are well positioned to serve our customers and community
for the long term,” said Seu.
There is no set timetable for HEI’s comprehensive review of
strategic options for ASB, and there can be no assurances that any
actions regarding ASB will result from this evaluation. Neither HEI
nor ASB expect to disclose or provide an update concerning
developments related to this process unless or until HEI’s Board of
Directors has approved a definitive course of action or otherwise
determined that further disclosure is appropriate or necessary.
HAWAIIAN ELECTRIC COMPANY (HAWAIIAN ELECTRIC)
EARNINGS3
Hawaiian Electric’s net loss for the second quarter of 2024 was
$1,229.4 million compared to net income of $45.3 million in the
second quarter of 2023, with the decrease primarily driven by the
following after-tax items:
- $1,271 million after-tax loss due to the accrual of estimated
wildfire liabilities related to tort-related legal claims and cross
claims as of June 30, 2024;
- $7 million in higher operations and maintenance (O&M)
expenses, including $4 million of costs associated with the Maui
windstorm and wildfire event. These costs include wildfire
mitigation expenses and the settlement of indemnification claims
asserted by the state. The remaining increase in O&M included
higher insurance costs, and higher substation and meter operations
corrective and preventative maintenance costs;
- $2 million from higher depreciation; and
- $1 million impact from worse heat rate performance.
These items were partially offset by the following after-tax
items:
- $6 million higher revenues, including $4 million from the
annual revenue adjustment mechanism, $1 million from the major
project interim recovery mechanism and $1 million in other
revenues.
Excluding incremental after-tax Maui windstorm and
wildfire-related expenses net of insurance recoveries, Hawaiian
Electric’s core net income4 for the quarter was $43.9 million.
Incremental after-tax Maui windstorm and wildfire-related expenses
of $1,273 million were composed of the $1,271 million loss
contingency accrued for estimated tort-related wildfire
liabilities, and $20.0 million of other Maui wildfire-related
expenses, net of $12.2 million of insurance-related recoveries and
$5.7 million of costs deferred pursuant to the Public Utilities
Commission’s decision allowing Hawaiian Electric to defer these
costs.
Going Concern Assessment
HEI and Hawaiian Electric do not yet have a financing plan in
place to address the future payment of the $1.71 billion Maui
windstorm and wildfire settlement accrued in the second quarter of
2024. Until a definitive financing plan is developed and is
probable of being implemented, HEI and Hawaiian Electric will
disclose a “going concern” risk in their financial statements.
After definitive financing plans are in place and likely to be
implemented, such a going concern risk is expected to be resolved.
This risk is the result of estimated payments under the settlement
agreement. HEI and Hawaiian Electric are working closely with their
financial advisors to develop a financing plan for their settlement
contribution, and intend to finance the settlement payments through
a mix of debt, common equity, equity-linked securities, or other
potential options, although there can be no assurance at this time
as to the availability or terms of any such financing.
Utility Dividend Update
In connection with the going concern assessment, the utility
dividend to HEI has been suspended. HEI and Hawaiian Electric
continue to believe that the companies have sufficient liquidity
runway as parties work toward finalizing the agreement in principle
to settle tort claims related to the Maui wildfires.
AMERICAN SAVINGS BANK EARNINGS
ASB’s second quarter 2024 net loss of $45.8 million compared to
net income of $20.9 million in the first quarter of 2024 and $20.2
million in the second quarter of 2023. Results for the quarter
reflect the impact of a goodwill impairment of $82.2 million ($66.1
million after taxes) in connection with HEI’s ongoing review of
strategic options for ASB. The goodwill is related to acquisitions
that took place in the 1980s and 1990s. The impairment is non-cash
and has no impact on ASB’s liquidity. Net income for the quarter
also reflected the release of $0.8 million of Maui wildfire-related
reserves, partially offset by Maui wildfire-related expenses of
$1.3 million. Excluding the after-tax impacts of these items, core
net income for the second quarter was $20.7 million.5
Total earning assets as of June 30, 2024 were $8.9 billion, down
approximately 3.0% from December 31, 2023.
Total loans were $6.1 billion as of June 30, 2024, down 2.5%
from December 31, 2023.
Total deposits were $8.0 billion as of June 30, 2024, down 1.3%
from December 31, 2023. Core deposits declined 1.3% from December
31, 2023, while certificates of deposit decreased 1.4% primarily
due to the paydown of $166 million in public time deposits. As of
June 30, 2024, 83% of deposits were F.D.I.C. insured or fully
collateralized, with approximately 79% of deposits F.D.I.C.
insured. For the second quarter of 2024, the average cost of funds
was 115 basis points, down slightly from 117 basis points in the
linked quarter and up 32 basis points from the prior year
quarter.
In the second quarter of 2024, ASB did not pay a dividend to
HEI, supporting ASB’s healthy capital levels. ASB had a Tier 1
leverage ratio of 8.4% as of June 30, 2024.
Please refer to ASB’s news release issued on July 30, 2024 for
additional information on ASB.
HOLDING AND OTHER COMPANIES
The holding and other companies’ net loss was $20.3 million in
the second quarter of 2024 compared to $10.9 million in the second
quarter of 2023. The higher net loss compared to the prior year
quarter was primarily due to Maui wildfire-related expenses, higher
Pacific Current net loss and higher corporate legal expenses. Core
net loss for the second quarter of 2024 was $15.5 million6.
EARNINGS RELEASE, WEBCAST AND CONFERENCE CALL TO DISCUSS
EARNINGS
HEI will conduct a webcast and conference call to review its
second quarter 2024 consolidated financial results today at 10:30
a.m. Hawaii time (4:30 p.m. Eastern).
To listen to the conference call, dial 1-888-660-6377 (U.S.) or
1-929-203-0797 (international) and enter passcode 2393042. Parties
may also access presentation materials (which include
reconciliation of non-GAAP measures) and/or listen to the
conference call by visiting the conference call link on HEI’s
website at www.hei.com under “Investor Relations,” sub-heading
“News and Events — Events and Presentations.”
A replay will be available online and via phone. The online
replay will be available on HEI’s website about two hours after the
event. The audio replay will also be available about two hours
after the event through August 23, 2024. To access the audio
replay, dial 1-800-770-2030 (U.S.) or 1-647-362-9199
(international) and enter passcode 2393042.
HEI and Hawaiian Electric Company, Inc. (Hawaiian Electric)
intend to continue to use HEI’s website, www.hei.com, as a means of
disclosing additional information; such disclosures will be
included in the Investor Relations section of the website.
Accordingly, investors should routinely monitor the Investor
Relations section of HEI’s website, in addition to following HEI’s,
Hawaiian Electric’s and ASB’s press releases, HEI’s and Hawaiian
Electric’s Securities and Exchange Commission (SEC) filings and
HEI’s public conference calls and webcasts. Investors may sign up
to receive e-mail alerts via the “Investor Relations” section of
the website. The information on HEI’s website is not incorporated
by reference into this document or into HEI’s and Hawaiian
Electric’s SEC filings unless, and except to the extent,
specifically incorporated by reference.
Investors may also wish to refer to the Public Utilities
Commission of the State of Hawaii (PUC) website at
https://hpuc.my.site.com/cdms/s/ to review documents filed with,
and issued by, the PUC. No information on the PUC website is
incorporated by reference into this document or into HEI’s and
Hawaiian Electric’s SEC filings.
____________________
1
See the “Explanation of HEI’s Use
of Certain Unaudited Non-GAAP Measures” and the related GAAP
reconciliation at the end of this release.
2
Refer to footnote 1.
3
Utility amounts indicated as
after-tax in this earnings release are based upon adjusting items
using a current year composite statutory tax rate of 25.75%.
4
Refer to footnote 1.
5
Refer to footnote 1.
6
Refer to footnote 1.
ABOUT HEI
The HEI family of companies provides the energy and financial
services that empower much of the economic and community activity
of Hawaii. HEI’s electric utility, Hawaiian Electric, supplies
power to approximately 95% of Hawaii’s population and 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. Its banking subsidiary, ASB,
is one of Hawaii’s largest financial institutions, providing a wide
array of banking and other financial services and working to
advance economic growth, affordability and financial fitness. HEI
also helps advance Hawaii’s sustainability goals through
investments by its non-regulated subsidiary, Pacific Current. For
more information, visit www.hei.com.
NON-GAAP MEASURES
Measures described as “core” are non-GAAP measures which exclude
after-tax Maui wildfire-related costs and the goodwill impairment
taken in connection with HEI’s ongoing review of strategic options
for ASB. See “Explanation of HEI’s Use of Certain Unaudited
Non-GAAP Measures” and the related GAAP reconciliations at the end
of this release.
This release may contain “forward-looking statements,” which
include statements that are predictive in nature, depend upon or
refer to future events or conditions, and usually include words
such as “will,” “expects,” “anticipates,” “intends,” “plans,”
“believes,” “predicts,” “estimates” or similar expressions. In
addition, any statements concerning future financial performance,
ongoing business strategies or prospects or possible future actions
are also forward-looking statements. Forward-looking statements are
based on current expectations and projections about future events
and are subject to risks, uncertainties and the accuracy of
assumptions concerning HEI and its subsidiaries, the performance of
the industries in which they do business and economic, political
and market factors, among other things. These forward-looking
statements are not guarantees of future performance.
Forward-looking statements in this release should be read in
conjunction with the “Cautionary Note Regarding Forward-Looking
Statements” and “Risk Factors” discussions (which are incorporated
by reference herein) set forth in HEI’s Annual Report on Form 10-K
for the year ended December 31, 2023 and HEI’s other periodic
reports that discuss important factors that could cause HEI’s
results to differ materially from those anticipated in such
statements. These forward-looking statements speak only as of the
date of the report, presentation or filing in which they are made.
Except to the extent required by the federal securities laws, HEI,
Hawaiian Electric, ASB 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.
Hawaiian Electric Industries, Inc. (HEI)
and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME DATA
(Unaudited)
Three months ended June
30
Six months ended June
30
(in thousands, except per share
amounts)
2024
2023
2024
2023
Revenues
Electric utility
$
792,331
$
794,191
$
1,580,909
$
1,624,552
Bank
101,943
96,885
207,087
190,742
Other
3,086
4,609
6,522
8,628
Total revenues
897,360
895,685
1,794,518
1,823,922
Expenses
Electric utility (includes $1,712 million
of Wildfire tort-related claims in 2024)
2,436,771
720,566
3,161,994
1,475,052
Bank (includes $82 million of goodwill
impairment in 2024)
159,329
72,017
238,941
142,354
Other
20,235
10,123
36,139
20,019
Total expenses
2,616,335
802,706
3,437,074
1,637,425
Operating income (loss)
Electric utility
(1,644,440
)
73,625
(1,581,085
)
149,500
Bank
(57,386
)
24,868
(31,854
)
48,388
Other
(17,149
)
(5,514
)
(29,617
)
(11,391
)
Total operating income (loss)
(1,718,975
)
92,979
(1,642,556
)
186,497
Retirement defined benefits credit—other
than service costs
1,281
1,153
2,563
2,305
Interest expense, net—other than on
deposit liabilities and other bank borrowings
(32,400
)
(29,832
)
(63,991
)
(58,630
)
Allowance for borrowed funds used during
construction
1,344
1,295
2,730
2,426
Allowance for equity funds used during
construction
3,336
3,772
6,976
7,073
Interest income
3,134
—
6,267
—
Income (loss) before income
taxes
(1,742,280
)
69,367
(1,688,011
)
139,671
Income tax expense (benefit)
(447,269
)
14,284
(435,595
)
29,394
Net income (loss)
(1,295,011
)
55,083
(1,252,416
)
110,277
Preferred stock dividends of
subsidiaries
473
473
946
946
Net income (loss) for common
stock
$
(1,295,484
)
$
54,610
$
(1,253,362
)
$
109,331
Basic earnings (loss) per common
share
$
(11.74
)
$
0.50
$
(11.37
)
$
1.00
Diluted earnings (loss) per common
share
$
(11.74
)
$
0.50
$
(11.37
)
$
1.00
Dividends declared per common
share
$
—
$
0.36
$
—
$
0.72
Weighted-average number of common
shares outstanding
110,303
109,573
110,260
109,544
Weighted-average shares assuming
dilution
110,303
109,780
110,260
109,870
Net income (loss) for common stock by
segment
Electric utility
$
(1,229,394
)
$
45,299
$
(1,190,173
)
$
92,308
Bank
(45,787
)
20,204
(24,853
)
38,766
Other
(20,303
)
(10,893
)
(38,336
)
(21,743
)
Net income (loss) for common
stock
$
(1,295,484
)
$
54,610
$
(1,253,362
)
$
109,331
Comprehensive income (loss) attributable
to HEI
$
(1,293,890
)
$
47,001
$
(1,261,569
)
$
122,210
Return on average common equity (%)
(twelve months ended)
NM
10.2
NM Not meaningful.
This information should be read in
conjunction with the consolidated financial statements and the
notes thereto in HEI filings with the SEC. Results of operations
for interim periods are not necessarily indicative of results to be
expected for future interim periods or the full year.
Hawaiian Electric Company, Inc. (Hawaiian
Electric) and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME DATA
(Unaudited)
Three months ended June
30
Six months ended June
30
($ in thousands, except per barrel
amounts)
2024
2023
2024
2023
Revenues
$
792,331
$
794,191
$
1,580,909
$
1,624,552
Expenses
Fuel oil
258,652
280,157
542,948
614,254
Purchased power
181,328
168,434
341,145
321,195
Other operation and maintenance
147,561
136,360
291,451
264,676
Wildfire tort-related claims
1,712,000
—
1,712,000
—
Depreciation
62,812
60,689
125,624
121,616
Taxes, other than income taxes
74,418
74,926
148,826
153,311
Total expenses
2,436,771
720,566
3,161,994
1,475,052
Operating income (loss)
(1,644,440
)
73,625
(1,581,085
)
149,500
Allowance for equity funds used during
construction
3,336
3,772
6,976
7,073
Retirement defined benefits credit—other
than service costs
1,072
1,048
2,144
2,095
Interest expense and other charges,
net
(21,417
)
(20,872
)
(41,402
)
(41,118
)
Allowance for borrowed funds used during
construction
1,344
1,295
2,730
2,426
Interest income
1,452
—
2,884
—
Income (loss) before income
taxes
(1,658,653
)
58,868
(1,607,753
)
119,976
Income tax expense (benefit)
(429,758
)
13,070
(418,578
)
26,670
Net income (loss)
(1,228,895
)
45,798
(1,189,175
)
93,306
Preferred stock dividends of
subsidiaries
229
229
458
458
Net income (loss) attributable to
Hawaiian Electric
(1,229,124
)
45,569
(1,189,633
)
92,848
Preferred stock dividends of Hawaiian
Electric
270
270
540
540
Net income (loss) for common
stock
$
(1,229,394
)
$
45,299
$
(1,190,173
)
$
92,308
Comprehensive income (loss)
attributable to Hawaiian Electric
$
(1,229,440
)
$
45,255
$
(1,190,268
)
$
92,219
OTHER ELECTRIC UTILITY INFORMATION
Kilowatthour sales (millions)
Hawaiian Electric
1,470
1,480
2,882
2,910
Hawaii Electric Light
254
252
508
503
Maui Electric
247
262
487
517
1,971
1,994
3,877
3,930
Average fuel oil cost per barrel
$
120.12
$
122.69
$
121.01
$
131.48
Return on average common equity (%)
(twelve months ended)1
NM
8.2
1 Simple average.
NM Not meaningful.
This information should be read
in conjunction with the consolidated financial statements and the
notes thereto in Hawaiian Electric filings with the SEC. Results of
operations for interim periods are not necessarily indicative of
results to be expected for future interim periods or the full
year.
American Savings Bank, F.S.B.
STATEMENTS OF INCOME DATA
(Unaudited)
Three months ended
Six months ended June 30
(in thousands)
June 30, 2024
March 31, 2024
June 30, 2023
2024
2023
Interest and dividend income
Interest and fees on loans
$
72,960
$
72,971
$
67,966
$
145,931
$
132,808
Interest and dividends on investment
securities
13,218
14,964
13,775
28,182
28,412
Total interest and dividend income
86,178
87,935
81,741
174,113
161,220
Interest expense
Interest on deposit liabilities
18,015
17,432
9,661
35,447
16,498
Interest on other borrowings
6,479
8,154
8,852
14,633
16,573
Total interest expense
24,494
25,586
18,513
50,080
33,071
Net interest income
61,684
62,349
63,228
124,033
128,149
Provision for credit losses
(1,910
)
(2,159
)
43
(4,069
)
1,218
Net interest income after provision for
credit losses
63,594
64,508
63,185
128,102
126,931
Noninterest income
Fees from other financial services
5,133
4,874
5,009
10,007
9,688
Fee income on deposit liabilities
4,630
4,898
4,504
9,528
9,103
Fee income on other financial products
2,960
2,743
2,768
5,703
5,512
Bank-owned life insurance
2,255
3,584
1,955
5,839
3,380
Mortgage banking income
364
424
230
788
360
Gain on sale of real estate
—
—
495
—
495
Other income, net
423
686
678
1,109
1,479
Total noninterest income
15,765
17,209
15,639
32,974
30,017
Noninterest expense
Compensation and employee benefits
29,802
32,459
29,394
62,261
59,598
Occupancy
5,220
5,063
5,539
10,283
11,127
Data processing
4,960
4,846
5,095
9,806
10,107
Services
4,250
4,151
2,689
8,401
5,284
Equipment
2,477
2,649
2,957
5,126
5,603
Office supplies, printing and postage
1,006
1,018
1,109
2,024
2,274
Marketing
747
776
834
1,523
1,850
Goodwill impairment
82,190
—
—
82,190
—
Other expense
5,813
4,942
6,152
10,755
12,343
Total noninterest expense
136,465
55,904
53,769
192,369
108,186
Income (loss) before income
taxes
(57,106
)
25,813
25,055
(31,293
)
48,762
Income tax expense (benefit)
(11,319
)
4,879
4,851
(6,440
)
9,996
Net income (loss)
$
(45,787
)
$
20,934
$
20,204
$
(24,853
)
$
38,766
Comprehensive income (loss)
$
(44,154
)
$
11,166
$
12,994
$
(32,988
)
$
49,986
OTHER BANK INFORMATION (annualized %,
except as of period end)
Return on average assets
(1.97
)
0.88
0.84
(0.53
)
0.81
Return on average equity
(33.97
)
15.64
16.20
(9.25
)
15.87
Return on average tangible common
equity
(39.84
)
18.48
19.40
(10.89
)
19.07
Net interest margin
2.79
2.75
2.75
2.77
2.80
Efficiency ratio
176.20
70.27
68.18
122.52
68.40
Net charge-offs to average loans
outstanding
0.15
0.14
0.14
0.14
0.14
As of period end
Nonaccrual loans to loans receivable held
for investment
0.53
0.53
0.22
Allowance for credit losses to loans
outstanding
1.11
1.16
1.13
Tangible common equity to tangible
assets
5.4
5.0
4.3
Tier-1 leverage ratio
8.4
8.0
7.8
Dividend paid to HEI (via ASB Hawaii,
Inc.) ($ in millions)
$
—
$
—
$
11.0
$
—
$
25.0
This information should be read in
conjunction with the consolidated financial statements and the
notes thereto in HEI filings with the SEC. Results of operations
for interim periods are not necessarily indicative of results to be
expected for future interim periods or the full year.
Explanation of HEI’s Use of Certain Unaudited Non-GAAP
Measures
HEI and ASB management use certain non-GAAP measures to evaluate
the performance of HEI and the bank.
Management believes these non-GAAP measures provide useful
information and are a better indicator of the companies’ core
operating activities. Core earnings and other financial measures as
presented here may not be comparable to similarly titled measures
used by other companies. The accompanying tables provide a
reconciliation of reported GAAP1 earnings to non-GAAP core earnings
and returns on average equity and average assets for the bank.
The reconciling adjustments from GAAP earnings to core earnings
are limited to the costs related to the Maui wildfires and the
goodwill impairment taken in connection with HEI’s ongoing review
of strategic options for ASB. Management does not consider these
items to be representative of the company’s fundamental core
earnings.
Reconciliation of GAAP to non-GAAP
Measures
Hawaiian Electric Industries, Inc. (HEI)
and Subsidiaries
Unaudited
(in thousands)
Three months ended June 30,
2024
Six months ended June 30,
2024
Maui
wildfire-related costs
Pretax expenses:
Legal expenses
$
25,000
$
40,027
Outside services expenses
1,778
4,525
Provision for credit losses
(800
)
(2,300
)
Wildfire tort-related claims
1,712,000
1,712,000
Other expenses
6,931
15,950
Interest expenses
3,386
8,211
Pretax expenses
1,748,295
1,778,413
Insurance recoveries
(18,875
)
(31,452
)
Deferral of cost
(7,656
)
(15,554
)
Wildfire-related expenses, excluding
insurance recovery and deferral
1,721,764
1,731,407
Pretax goodwill impairment
82,190
82,190
Income tax benefits2
(459,419
)
(461,901
)
After-tax adjustments
$
1,344,535
$
1,351,696
HEI consolidated
net income
GAAP net income (as reported)
$
(1,295,484
)
$
(1,253,362
)
Excluding special items related to the
Maui wildfire (after tax):
Legal expenses
18,554
29,711
Outside services expenses
1,316
3,338
Provision for credit losses
(585
)
(1,683
)
Wildfire tort-related claims
1,271,160
1,271,160
Other expenses
5,145
11,845
Interest expenses
2,515
6,097
After tax expenses
1,298,105
1,320,468
Insurance recoveries
(14,015
)
(23,353
)
Deferral of cost
(5,685
)
(11,549
)
Maui wildfire-related expenses, net of
insurance recoveries and approved deferral treatment (after
tax)
1,278,405
1,285,566
Goodwill impairment (after-tax)
66,130
66,130
Non-GAAP (core) net income
$
49,051
$
98,334
GAAP Diluted earnings (loss) per share
(as reported)
$
(11.74
)
$
(11.37
)
Non-GAAP (core) Diluted earnings per
share
$
0.44
$
0.89
1
Accounting principles generally
accepted in the United States of America.
2
Current year composite statutory
tax rate of 25.75% is used for Utility and corporate amounts and
current year composite statutory tax rate of 26.80% is used for ASB
amounts.
Note: Other segment (Holding and
Other Companies) wildfire-related expenses (legal, outside services
and other) are included in “Expenses-Other” and interest expense is
included in “Interest expense, net—other than on deposit
liabilities and other bank borrowings” on the HEI and subsidiaries’
Consolidated Statements of Income Data. See Electric Utilities and
Bank tables below for more detail.
Reconciliation of GAAP to non-GAAP
Measures
Hawaiian Electric Company, Inc. and
Subsidiaries
Unaudited
(in thousands)
Three months ended June 30,
2024
Six months ended June 30,
2024
Maui windstorm
and wildfires related costs
Pretax expenses:
Legal expenses1
$
17,613
$
28,348
Outside services expenses1
997
1,781
Wildfire tort-related claims
1,712,000
1,712,000
Other expenses1
5,741
14,882
Interest expenses2
2,524
6,431
Pretax expenses
1,738,875
1,763,442
Insurance recoveries
(16,379
)
(26,348
)
Deferral of cost
(7,656
)
(15,554
)
Total Maui windstorm and wildfires
related expenses, net of insurance recoveries and approved deferral
treatment
1,714,840
1,721,540
Income tax benefits3
(441,572
)
(443,297
)
After-tax expenses
$
1,273,268
$
1,278,243
Hawaiian Electric
consolidated net income
GAAP net income (as reported)
$
(1,229,394
)
$
(1,190,173
)
Excluding special items related to the
Maui windstorm and wildfires (after tax):
Legal expenses
13,078
21,049
Outside services expenses
740
1,322
Wildfire tort-related claims
1,271,160
1,271,160
Other expenses
4,263
11,050
Interest expenses
1,874
4,775
Maui windstorm and wildfires related
expenses (after tax)
1,291,115
1,309,356
Insurance recoveries (after tax)
(12,162
)
(19,564
)
Deferral of cost (after tax)
(5,685
)
(11,549
)
Total Maui windstorm and wildfires related
expenses, net of insurance recoveries and approved deferral
treatment (after tax)
1,273,268
1,278,243
Non-GAAP (core) net income
$
43,874
$
88,070
1
Legal, outside services and other
are included in “Other operation and maintenance” on the Hawaiian
Electric and subsidiaries Consolidated Statements of Income
Data.
2
Interest expense is included in
“Interest expense and other charges, net” on the Hawaiian Electric
and subsidiaries Consolidated Statements of Income Data.
3
Current year composite statutory
tax rate of 25.75% is used for Utility amounts.
Reconciliation of GAAP to non-GAAP
Measures
American Savings Bank F.S.B.
Unaudited
(in thousands)
Three months ended June 30,
2024
Six months ended June 30,
2024
Maui wildfire
related costs and goodwill impairment
Pretax expenses:
Provision for credit losses
$
(800
)
$
(2,300
)
Professional services expense
1,201
2,909
Other expenses, net
51
(266
)
Pretax Maui wildfire related costs,
net
452
343
Pretax goodwill impairment
82,190
82,190
Income tax benefit1
(16,181
)
(16,152
)
After-tax expenses
$
66,461
$
66,381
ASB net income
(loss)
GAAP (as reported)
$
(45,787
)
$
(24,853
)
Excluding expense relating to Maui
wildfire costs and goodwill impairment (after tax):
Provision for credit losses
(586
)
(1,684
)
Professional services expense
880
2,130
Other expenses, net
37
(195
)
Goodwill impairment
66,130
66,130
Maui wildfire related cost, net and
goodwill impairment (after tax)
66,461
66,381
Non-GAAP (core) net income
$
20,674
$
41,528
Three months ended June 30,
2024
Six months ended June 30,
2024
Ratios
(annualized %)
Based on GAAP
Return on average assets
(1.97
)
(0.53
)
Return on average equity
(33.97
)
(9.25
)
Return on average tangible common
equity
(39.84
)
(10.89
)
Efficiency ratio
176.20
122.52
Based on Non-GAAP (core)
Return on average assets
0.89
0.88
Return on average equity
15.34
15.46
Return on average tangible common
equity
17.99
18.20
Efficiency ratio
68.46
68.49
1
Current year composite statutory
tax rate of 26.8% is used for ASB amounts.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240809332009/en/
Mateo Garcia Director, Investor Relations Telephone: (808)
543-7300 E-mail: ir@hei.com
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