HAWAIIAN ELECTRIC INDUSTRIES, INC. HEI
1Q24 Financial Results
May 10, 2024
Non-GAAP Financial Information
This presentation refers to certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles. Reconciliations of those non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the Appendix herein.
Other
See Appendix for definition of Core Earnings, Core EPS, and Core Return on Equity.
2
Maui Wildfire Update
One 'Ohana progressing
Legislative and
policy efforts
continue
Recent official
reports align with our understanding
- First phase of One 'Ohana launched on March 1st
- 58 registrations (43 decedent, 15 injury)
- Registration deadline extended to May 31st; Governor Green has said deadline for completed claims forms will be July 1st
- Governor signed SB582 on May 2nd, setting aside funding for Maui recovery efforts-including State's contribution to One 'Ohana fund
- Although 2024 legislative session has concluded, Hawaii's lawmakers and leadership remain highly engaged in reducing risk through wildfire legislation
- Governor Green's newly formed Climate Advisory Team (CAT) will play critical role in drafting climate resilience policy
- CAT's initial focus is on development of a fund to mitigate the impacts of climate change, and a structure to resolve claims related to future disasters
-
"After Action Report" published by County of Maui's Department of Fire and Public Safety; "Lahaina Fire Comprehensive Timeline Report" published by Hawaii's
State Attorney General - Both reports consistent with our understanding of events that took place on August 8th, neither report focused on cause
3
Utility Wildfire Mitigation and Resilience Updates
Taking immediate action to address wildfire
risk....
….While pursuing funding that could accelerate
wildfire mitigation efforts and reduce bill impact
Enhance
strategies and
practices
Improve
situational awareness
- Block reclosing and enable fast trip
- Enhanced inspection tools & data
- Enhanced vegetation management
- Public Safety Power Shutoff
- Forward observers
- Dual optical/thermal video cameras
- Weather stations
- 360 video cameras with artificial intelligence
Purpose | Est. selection | Total | Federal match |
timeframe | project | ||
amount | |||
Grid | Selected | $190M | 50% |
hardening | 8/2023 | ||
Wildfire grid | Summer/Fall | $200M | 50% |
resilience | 2024 | ||
ADMS & field | Summer/Fall | $205M | 49% |
devices | 2024 | ||
Grid | Summer/Fall | $500M | 50% |
✓ Upgrading poles | |
Continue to | ✓ Reconductoring and line spacers |
harden grid | ✓ Strategic undergrounding |
- Address identified asset risks
2024 capex of $117M budgeted for wildfire mitigation
innovation | 2024 | |
Total | $1.1Bn | $545M |
4
ASB Performing Well, Seeing Benefits from Balance Sheet Repositioning
Benefits from 4Q
balance sheet repositioning
Maui outlook
improving
Continued stability
of deposit base
- Net interest margin expanded, with lower cost of funds following previous quarter's securities sale
- Last quarter's transaction reduced bank's highest cost funding
- $1.5 million of reserves released related to Maui wildfires
- Maui economic outlook remains better than initially expected
- Loyal and long-tenured deposit base remains stable
- 86% of deposits F.D.I.C.-insured or fully collateralized, 82% of deposits F.D.I.C.-insured
- No risk to customer deposits as a result of legal claims related to the Maui wildfires
5
1Q24 Financial Performance
GAAP Net Income and EPS | Core1 Net Income and EPS | |
LTM ROE (GAAP)
$54.7 | $42.1 |
$18.6 | $20.9 |
$47.0 | $39.2 |
($10.9) | ($18.0) |
$0.50 | $0.38 |
$0.17 | $0.19 |
$0.43 | $0.36 |
($0.10) | ($0.16) |
1Q23 | 1Q24 |
$54.7 | $49.3 |
$18.6 | $20.9 |
$47.0 | $44.2 |
($10.9) | ($15.8) |
$0.50 | $0.45 |
$0.17 | $0.19 |
$0.43 | $0.40 |
($0.10) | ($0.14) |
1Q23 | 1Q24 |
10.0% | |
8.1% | |
2023 | 2024 |
LTM ROE (Core1)
10.0% | 9.5% |
2023 | 2024 |
Utility | Bank | Holding Co. & Other | ||
Note: Columns may not foot due to rounding.
1. See appendix for reconciliation of GAAP net income, EPS and ROE to the related "Core" metrics.
6
1Q24 Financial Highlights
$0.01 | 1Q 2023 vs. 1Q 2024 EPS Variances1 | |
$0.05 | $0.06 | |
$0.02
$0.05 | $0.01 | ||||
$0.03 | $0.02 | ||||
$0.02 | $0.03 | ||||
$0.01
Total: ~$(0.07)
$0.50
Total: ~$0.02
Total: ~($0.06)
HoldCo &
Other
$0.38
1Q 2023 | Revenue | Interest | O&M | Heat rate | Wildfire | Net interest Provision | Noninterest | Wildfire | Pacific | Tax rate | 1Q 2024 |
EPS | expense, net | expense | income | inc. & other | expense | Current | EPS |
1. Columns may not foot due to rounding. Bank adjustments for wildfire-related expense were slightly positive, but round to a neutral EPS impact so are not shown on slide (including ~$0.01 wildfire-related provision release).
7
Liquidity Update
Prudent liquidity management as we work through timing, impacts of litigation
- As of the end of 1Q, the HoldCo and Utility had $127 and $130 million of cash on hand, respectively
- Cash being carefully managed across the enterprise and additional sources of liquidity being secured
- Utility accounts receivable facility of up to $250 million progressing, with PUC decision scheduled for June 24th
- Utility declared dividend of $13 million for the quarter (consistent with the previous quarter); Continued suspension of ASB dividend supports the bank's healthy capital levels
8
Q&A
Appendix
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
HEI - Hawaiian Electric Industries Inc. published this content on 10 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 May 2024 21:41:49 UTC.
