HAWAIIAN ELECTRIC INDUSTRIES INC Q4 FY2024 earnings call

• Settlement of Maui wildfire tort litigation: In November 2024, final settlement agreements were signed, with a favorable Hawaii Supreme Court decision in February 2025 clarifying insurers can't separately sue after settlement. Next steps include class and individual plaintiff allocation of settlement amount, preliminary approval, notice process, and final approval.
• American Savings Bank sale: Completed in late 2024, selling 90.1% for $405 million, with net proceeds used to reduce holding company debt.
• Wildfire safety measures: In 2024, the utility invested ~$120 million in wildfire safety improvements, launched public safety power shutoff program, replaced poles, upgraded lines, cleared vegetation, and installed weather stations/cameras. Submitted updated long-term wildfire safety strategy with a 3-year plan (2025-2027) costing ~$450 million, ~$400 million in CapEx.
• Renewable portfolio standard: Achieved 36% in 2024, on track for 40% by 2030, with average residential bill decreasing 7% in 2024.

There is no detailed breakdown of financial performance by specific product segments. However, for continuing operations, in 2024, the utility achieved a 36% renewable portfolio standard, up from 33% in 2023, while the average residential bill decreased 7%. The sale of 90.1% of American Savings Bank resulted in net proceeds used to reduce holding company debt. Discontinued operations for American Savings Bank in 2024 had a net loss of $103 million compared to net income of $53 million in 2023.

• Focus on obtaining supportive legislation, finalizing and implementing the Maui Wildfire Tort litigation settlement, and returning to investment grade.
• CapEx plans: Refining 3-year capital forecast, with 2025 targeting ~$350-$375 million, ~$400 million over 2025-2027 for wildfire safety, and additional CapEx for renewables and other projects.
• Liquidity management: Prudently managing liquidity while finalizing settlement and formulating financing plans for future payments and utility CapEx needs.

• Uncertainties in legislative process: Early stages of Hawaii legislative session with debates on wildfire recovery fund financing, including potential impacts on customers and shareholders.
• Settlement and insurance challenges: Potential for insurers to appeal or disrupt settlement, timing uncertainties in finalizing settlement approval processes.
• Wildfire mitigation execution risks: Delays or challenges in implementing wildfire safety measures and achieving expected risk reduction targets.

Q: Did the Hawaii Supreme Court issue a ruling on insurers' separate legal action against defendants and what's the timeline for settlement finalization?

A: The Hawaii Supreme Court issued a favorable decision aligning with their arguments. Next steps include class and individual plaintiffs allocating settlement amount, preliminary approval in Q2 2025, objection/opt-out deadlines in Q3 2025, and final approval hearing in Q4 2025.

Q: How are you thinking about framing wildfire legislation for stakeholder support and securitization prospects?

A: There's positive momentum in legislative discussions on wildfire recovery fund. Securitization is seen as a way to secure lower-cost financing, but it's early in the process and rating agencies want a backstop fund; it's too soon to determine outcome but progress would be credit positive.