HEI Reports Second Quarter 2024 Results
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
“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
“Last week we announced that HEI,
“Since last August, we have been advancing a strategy designed to support a strong, financially healthy enterprise that will empower a thriving future for
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’s net loss for the second quarter of 2024 was
-
$1,271 million after-tax loss due to the accrual of estimated wildfire liabilities related to tort-related legal claims and cross claims as ofJune 30, 2024 ; -
$7 million in higher operations and maintenance (O&M) expenses, including$4 million of costs associated with theMaui 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
Going Concern Assessment
Utility Dividend Update
In connection with the going concern assessment, the utility dividend to HEI has been suspended.
AMERICAN SAVINGS BANK EARNINGS
ASB’s second quarter 2024 net loss of
Total earning assets as of
Total loans were
Total deposits were
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
Please refer to ASB’s news release issued on
HOLDING AND OTHER COMPANIES
The holding and other companies’ net loss was
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
To listen to the conference call, dial 1-888-660-6377 (
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
Investors may also wish to refer to the
____________________ | ||
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
NON-GAAP MEASURES
Measures described as “core” are non-GAAP measures which exclude after-tax
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
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME DATA |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
||||||||||||||
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
(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 |
|
|
2,436,771 |
|
|
|
720,566 |
|
|
|
3,161,994 |
|
|
|
1,475,052 |
|
Bank (includes |
|
|
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 |
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME DATA |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
||||||||||||||
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
($ 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 |
|
|
(1,229,124 |
) |
|
|
45,569 |
|
|
|
(1,189,633 |
) |
|
|
92,848 |
|
Preferred stock dividends of |
|
|
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 |
|
$ |
(1,229,440 |
) |
|
$ |
45,255 |
|
|
$ |
(1,190,268 |
) |
|
$ |
92,219 |
|
OTHER ELECTRIC UTILITY INFORMATION |
|
|
|
|
|
|
|
|
||||||||
Kilowatthour sales (millions) |
|
|
|
|
|
|
|
|
||||||||
|
|
|
1,470 |
|
|
|
1,480 |
|
|
|
2,882 |
|
|
|
2,910 |
|
|
|
|
254 |
|
|
|
252 |
|
|
|
508 |
|
|
|
503 |
|
|
|
|
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 |
|
||||||||||||||||||||
STATEMENTS OF INCOME DATA |
||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||
|
|
Three months ended |
|
Six months ended |
||||||||||||||||
(in thousands) |
|
|
|
|
|
|
|
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 |
|
|
|
|
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 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
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 |
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
Reconciliation of GAAP to non-GAAP Measures |
||||||||
|
||||||||
Unaudited |
||||||||
(in thousands) |
Three months ended
|
|
Six months ended
|
|||||
|
|
|
|
|||||
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 |
|
|
|
|||||
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 |
) |
|
|
|
1,278,405 |
|
|
|
1,285,566 |
|
|
|
|
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 |
|
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. |
Reconciliation of GAAP to non-GAAP Measures |
||||||||
|
||||||||
Unaudited |
||||||||
(in thousands) |
Three months ended
|
|
Six months ended
|
|||||
|
|
|
|
|||||
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 |
|
1,714,840 |
|
|
|
1,721,540 |
|
|
Income tax benefits3 |
|
(441,572 |
) |
|
|
(443,297 |
) |
|
After-tax expenses |
$ |
1,273,268 |
|
|
$ |
1,278,243 |
|
|
|
|
|
|
|||||
|
|
|
|
|||||
GAAP net income (as reported) |
$ |
(1,229,394 |
) |
|
$ |
(1,190,173 |
) |
|
Excluding special items related to the |
|
|
|
|||||
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 |
|
|
|
|
1,291,115 |
|
|
|
1,309,356 |
|
|
Insurance recoveries (after tax) |
|
(12,162 |
) |
|
|
(19,564 |
) |
|
Deferral of cost (after tax) |
|
(5,685 |
) |
|
|
(11,549 |
) |
|
Total |
|
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 |
|
2 |
Interest expense is included in “Interest expense and other charges, net” on the |
|
3 |
Current year composite statutory tax rate of 25.75% is used for Utility amounts. |
Reconciliation of GAAP to non-GAAP Measures |
||||||||
|
||||||||
Unaudited |
||||||||
(in thousands) |
Three months ended
|
|
Six months ended
|
|||||
|
|
|
|
|||||
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 |
|
|
|
|||||
Provision for credit losses |
|
(586 |
) |
|
|
(1,684 |
) |
|
Professional services expense |
|
880 |
|
|
|
2,130 |
|
|
Other expenses, net |
|
37 |
|
|
|
(195 |
) |
|
|
|
66,130 |
|
|
|
66,130 |
|
|
|
|
66,461 |
|
|
|
66,381 |
|
|
Non-GAAP (core) net income |
$ |
20,674 |
|
|
$ |
41,528 |
|
|
Three months ended
|
|
Six months ended
|
|||
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/
Director, Investor Relations
Telephone: (808) 543-7300
E-mail: ir@hei.com
Source: