he-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Exact Name of Registrant as Specified in Its Charter	Commission File Number	I.R.S. Employer Identification No.
HAWAIIAN ELECTRIC INDUSTRIES, INC.	1-8503	99-0208097
and Principal Subsidiary
HAWAIIAN ELECTRIC COMPANY, INC.	1-4955	99-0040500

State of Hawaii

(State or other jurisdiction of incorporation or organization)

Hawaiian Electric Industries, Inc. – 1001 Bishop Street, Suite 2900, Honolulu, Hawaii 96813

Hawaiian Electric Company, Inc. – 1099 Alakea Street, Suite 2200, Honolulu, Hawaii 96813

(Address of principal executive offices and zip code)

Hawaiian Electric Industries, Inc. – (808) 543-5662

Hawaiian Electric Company, Inc. – (808) 543-7771

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)


Registrant	Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Hawaiian Electric Industries, Inc.	Common Stock, Without Par Value	HE	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Hawaiian Electric Industries, Inc.

Yes

☒

☐

Hawaiian Electric Company, Inc.

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Hawaiian Electric Industries, Inc.

Yes

☒

☐

Hawaiian Electric Company, Inc.

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.

Hawaiian Electric Industries, Inc.:

Hawaiian Electric Company, Inc.:

Large accelerated filer

☒

Smaller reporting company

☐

Large accelerated filer

☐

Smaller reporting company

☐

Accelerated filer

☐

Emerging growth company

☐

Accelerated filer

☐

Emerging growth company

☐

Non-accelerated filer

☐

Non-accelerated filer

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Hawaiian Electric Industries, Inc.

☐

Hawaiian Electric Company, Inc.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Hawaiian Electric Industries, Inc.

Yes

☐

☒

Hawaiian Electric Company, Inc.

Yes

☐

☒

Securities registered pursuant to 12(b) of the Act:

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuers’ classes of common stock, as of the latest practicable date.


Class of Common Stock	Outstanding May 3, 2024
Hawaiian Electric Industries, Inc. (Without Par Value)	110,302,667	Shares
Hawaiian Electric Company, Inc. ($6-2/3 Par Value)	17,854,278	Shares (not publicly traded)

Hawaiian Electric Industries, Inc. (HEI) is the sole holder of Hawaiian Electric Company, Inc. (Hawaiian Electric) common stock.

This combined Form 10-Q is separately filed by HEI and Hawaiian Electric. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. No registrant makes any representation as to information relating to the other registrant, except that information relating to Hawaiian Electric is also attributed to HEI.

Hawaiian Electric Industries, Inc. and Subsidiaries

Hawaiian Electric Company, Inc. and Subsidiaries

Form 10-Q—Quarter ended March 31, 2024

TABLE OF CONTENTS


Page No.
ii	Glossary of Terms
iv	Cautionary Note Regarding Forward-Looking Statements

	PART I. FINANCIAL INFORMATION
1	Item 1.	Financial Statements
		Hawaiian Electric Industries, Inc. and Subsidiaries
1		Condensed Consolidated Statements of Income (unaudited) - three months ended March 31, 2024 and 2023
2		Condensed Consolidated Statements of Comprehensive Income (unaudited) - three months ended March 31, 2024 and 2023
3		Condensed Consolidated Balance Sheets (unaudited) - March 31, 2024 and December 31, 2023
4		Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited) - three months ended March 31, 2024 and 2023
5		Condensed Consolidated Statements of Cash Flows (unaudited) - three months ended March 31, 2024 and 2023
		Hawaiian Electric Company, Inc. and Subsidiaries
7		Condensed Consolidated Statements of Income (unaudited) - three months ended March 31, 2024 and 2023
7		Condensed Consolidated Statements of Comprehensive Income (unaudited) - three months ended March 31, 2024 and 2023
8		Condensed Consolidated Balance Sheets (unaudited) - March 31, 2024 and December 31, 2023
10		Condensed Consolidated Statements of Changes in Common Stock Equity (unaudited) - three months ended March 31, 2024 and 2023
11		Condensed Consolidated Statements of Cash Flows (unaudited) - three months ended March 31, 2024 and 2023
12		Notes to Condensed Consolidated Financial Statements (unaudited)
59	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
59		HEI consolidated
67		Electric Utility
82		Bank
88	Item 3.	Quantitative and Qualitative Disclosures About Market Risk
89	Item 4.	Controls and Procedures

	PART II.	OTHER INFORMATION
90	Item 1.	Legal Proceedings
90	Item 1A.	Risk Factors
90	Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

91	Item 6.	Exhibits
92	Signatures

Hawaiian Electric Industries, Inc. and Subsidiaries

Hawaiian Electric Company, Inc. and Subsidiaries

Form 10-Q—Quarter ended March 31, 2024

GLOSSARY OF TERMS


Terms						Definitions
ABR						Alternate Base Rate
ACL						Allowance for credit losses, which is the current credit loss standard, requires recording the allowance based on the expected loss model
AES Hawaii						AES Hawaii, Inc.



AOCI						Accumulated other comprehensive income/(loss)
ARA						Annual revenue adjustment
ASB						American Savings Bank, F.S.B., a wholly owned subsidiary of ASB Hawaii, Inc.
ASB Hawaii						ASB Hawaii, Inc., a wholly owned subsidiary of Hawaiian Electric Industries, Inc. and the parent company of American Savings Bank, F.S.B.

ASU						Accounting Standards Update

CBRE						Community-based renewable energy
Company						Hawaiian Electric Industries, Inc. and its direct and indirect subsidiaries, including, without limitation, Hawaiian Electric Company, Inc. and its subsidiaries (listed under Hawaiian Electric); ASB Hawaii, Inc. and its subsidiary, American Savings Bank, F.S.B. and Pacific Current, LLC and its subsidiaries (listed under Pacific Current).
Consumer Advocate						Division of Consumer Advocacy, Department of Commerce and Consumer Affairs of the State of Hawaii
CSSM						Collective Shared Savings Mechanism
D&O						Decision and order from the PUC

DER						Distributed energy resources

DRIP						HEI Dividend Reinvestment and Stock Purchase Plan


ECRC						Energy cost recovery clause
EIP						2010 Equity and Incentive Plan, as amended
EPA						Environmental Protection Agency — federal
EPRM						Exceptional Project Recovery Mechanism
EPS						Earnings per share


ESM						Earnings Sharing Mechanism
EVE						Economic value of equity
Exchange Act						Securities Exchange Act of 1934

FDIC						Federal Deposit Insurance Corporation
federal						U.S. Government
FHLB						Federal Home Loan Bank
FHLMC						Federal Home Loan Mortgage Corporation
Fitch						Fitch Ratings, Inc.
FNMA						Federal National Mortgage Association
FRB						Federal Reserve Board
GAAP						Accounting principles generally accepted in the United States of America
GHG						Greenhouse gas
GNMA						Government National Mortgage Association
GSPA						Grid Services Purchase Agreement
Hamakua Energy						Hamakua Energy, LLC, an indirect subsidiary of Pacific Current
Hawaii Electric Light						Hawaii Electric Light Company, Inc., an electric utility subsidiary of Hawaiian Electric Company, Inc.
Hawaiian Electric						Hawaiian Electric Company, Inc., an electric utility subsidiary of Hawaiian Electric Industries, Inc. and parent company of Hawaii Electric Light Company, Inc., Maui Electric Company, Limited, Renewable Hawaii, Inc. and HE AR INTER LLC
HEI						Hawaiian Electric Industries, Inc., direct parent company of Hawaiian Electric Company, Inc., ASB Hawaii, Inc. and Pacific Current, LLC.

GLOSSARY OF TERMS, continued


Terms						Definitions
HEIRSP						Hawaiian Electric Industries Retirement Savings Plan
HELOC						Home equity line of credit
HPOWER						City and County of Honolulu with respect to a power purchase agreement for a refuse-fired plant
IIJA						Infrastructure Investment and Jobs Act
IPP						Independent power producer
IRLCs						Interest rate lock commitments
IWSM						Interim Wildfire Safety Measures
Kalaeloa						Kalaeloa Partners, L.P.
kWh						Kilowatthour/s (as applicable)

LMI						Low-to-moderate income
LTIP						Long-term incentive plan
Mahipapa						Mahipapa, LLC, a subsidiary of Pacific Current
Maui Electric						Maui Electric Company, Limited, an electric utility subsidiary of Hawaiian Electric Company, Inc.
Maui windstorm and wildfires						The fires in the West Maui (Lahaina) and Upcountry Maui areas that caused fatalities and widespread property damage in Lahaina on August 8, 2023
Mauo						Mauo, LLC, a subsidiary of Pacific Current
MFD						County of Maui Department of Fire and Public Safety
Moody’s						Moody’s Investors Service’s
MPIR						Major Project Interim Recovery

MRP						Multi-year rate period
MSRs						Mortgage servicing rights
MW						Megawatt/s (as applicable)
NII						Net interest income
NPBC						Net periodic benefit costs
NPPC						Net periodic pension costs
O&M						Other operation and maintenance
OCC						Office of the Comptroller of the Currency
OPEB						Postretirement benefits other than pensions
Pacific Current						Pacific Current, LLC, a wholly owned subsidiary of HEI and parent company of Hamakua Holdings, LLC, Mauo, LLC, Alenuihaha Developments, LLC, Kaʻieʻie Waho Company, LLC, Kaʻaipuaʻa, LLC, Upena, LLC and Mahipapa, LLC
PBR						Performance-based regulation

PIMs						Performance incentive mechanisms
PPA						Power purchase agreement
PPAC						Purchased power adjustment clause
PSPS						Public Safety Power Shutoff
PUC						Public Utilities Commission of the State of Hawaii
PV						Photovoltaic
RAM						Revenue adjustment mechanism
RBA						Revenue balancing account

RFP						Request for proposals
ROACE						Return on average common equity
RORB						Return on rate base
RPS						Renewable portfolio standards
S&P						S&P Global Ratings
SBA						Small Business Administration
SEC						Securities and Exchange Commission
See						Means the referenced material is incorporated by reference

SOFR						Secured Overnight Financing Rate
TDR						Troubled debt restructuring

Utilities						Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited
VIEs						Variable interest entities

iii

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report and other presentations made by Hawaiian Electric Industries, Inc. (HEI) and Hawaiian Electric Company, Inc. (Hawaiian Electric) and their subsidiaries 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 (collectively, the Company), 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 and actual results and financial condition may differ materially from those indicated in the forward-looking statements.

Risks, uncertainties and other important factors that could cause actual results to differ materially from those described in forward-looking statements and from historical results include, but are not limited to, the following:

•the impact of the Maui windstorm and wildfires including the potential liabilities from the many lawsuits filed against the Company and potential regulatory penalties which may result in significant costs that may be unrecoverable (or not reimbursed on a timely basis) through insurance and/or rates;

•an increase in insurance premiums and the inability to fully recover premiums through rates or the potential inability to obtain wildfire and general liability insurance coverage at reasonable rates, if available at all;

•the uncertainties surrounding the Company’s access to capital and credit markets due to the uncertainties associated with the costs related to the Maui windstorm and wildfires;

•extreme weather events, including windstorms and other natural disasters, particularly those driven or exacerbated by climate change, which could increase the risk of the Utilities’ equipment being damaged, becoming inoperable or contributing to a wildfire;

•the material reduction or extended delay in dividends or other distributions from one or more operating subsidiaries to HEI;

•further downgrades by securities rating agencies in their ratings of the securities of HEI and Hawaiian Electric and their impact on results of financing efforts;

•the risks of suffering losses and incurring liabilities that are uninsured (e.g., damages to the Utilities’ transmission and distribution system and losses from business interruption) or underinsured (e.g., losses not covered as a result of insurance deductibles or other exclusions or exceeding policy limits), and the risks associated with the operation of transmission and distribution assets and power generation facilities, including public and employee safety issues, and assets causing or contributing to wildfires;

•international, national and local economic and political conditions—including the state of the Hawaii tourism, defense and construction industries; the strength or weakness of the Hawaii and continental U.S. real estate markets (including the fair value and/or the actual performance of collateral underlying loans held by ASB, which could result in higher loan loss provisions and write-offs); decisions concerning the extent of the presence of the federal government and military in Hawaii; the implications and potential impacts of future federal government shutdowns, including the impact to our customers’ ability to pay their electric bills and/or bank loans and the impact on the state of Hawaii economy; the implications and potential impacts of U.S. and foreign capital and credit market conditions and federal, state and international responses to those conditions; the potential impacts of global and local developments (including global economic conditions and uncertainties, unrest, terrorist acts, wars, conflicts, political protests, deadly virus epidemic or other crisis); the effects of changes that have or may occur in U.S. policy, such as with respect to immigration and trade; and pandemics;

•the ability to adequately address risks and capitalize on opportunities related to our environmental, social and governance priority areas, which include safety, reliability and resilience, including relating to wildfires and other extreme weather events, decarbonization, economic health and affordability, secure digitalization, diversity, equity and inclusion, employee engagement, and climate-related risks and opportunities;

•citizen activism, including civil unrest, especially in times of severe economic depression and social divisiveness, which could negatively impact customers and employees, impair the ability of the Company and the Utilities to operate and maintain their facilities in an effective and safe manner, and citizen or stakeholder activism that could delay the construction, increase project costs or preclude the completion of third-party or Utility projects that are required to meet electricity demand, resilience and reliability objectives and renewable portfolio standards (RPS) and other climate-related goals;

•the effects of future actions or inaction of the U.S. government or related agencies, including those related to the U.S. debt ceiling or budget funding, monetary policy, trade policy and tariffs, energy and environmental policy, and other policy and regulatory changes advanced or proposed by President Biden and his administration;

•weather, natural disasters (e.g., hurricanes, earthquakes, tsunamis, lightning strikes, lava flows and the increasing effects of climate change, such as more severe storms, flooding, droughts, heat waves, and rising sea levels) and wildfires, including their impact on the resilience and reliability and cost of the Company’s and Utilities’ operations, collateral underlying ASB loans and the economy;

•the timing, speed and extent of changes in interest rates and the shape of the yield curve, which could result in lower portfolio yields and net interest margin, or higher borrowing costs;

•changes in interest rates and market liquidity, as well as the magnitude of such changes, which may reduce interest margins, impact funding sources, alter valuations and affect the ability to originate and distribute financial products in the primary and secondary markets;

•the continued ability of the Company and the Utilities to access the credit and capital markets (e.g., to obtain commercial paper and other short-term and long-term debt financing, including lines of credit, and, in the case of HEI, to issue common stock) under volatile and challenging market conditions, and the potential higher cost of such financings, if available;

•the risks inherent in changes in the value of the Company’s pension and other retirement plan assets and ASB’s securities available for sale, and the risks inherent in changes in the value of the Company’s pension liabilities, including changes driven by interest rates and mortality improvements;

•changes in laws, regulations (including tax regulations), market conditions, interest rates and other factors that result in changes in assumptions used to calculate retirement benefits costs and funding requirements;

•increasing competition in the banking industry from traditional financial institutions as well as from non-traditional providers of financial services, including financial service subsidiaries of commercial and manufacturing companies (e.g., increased price competition for loans and deposits, or an outflow of deposits to alternative investments or platforms, which may have an adverse impact on ASB’s net interest margin and portfolio growth);

•the potential delay by the Public Utilities Commission of the State of Hawaii (PUC) in considering (and potential disapproval of actual or proposed) renewable energy or resilience proposals, among others, and related costs; reliance by the Utilities on outside parties such as the state, independent power producers (IPPs) and developers; supply-chain challenges; and uncertainties surrounding technologies, solar power, wind power, biofuels, environmental assessments required to meet RPS and other climate-related goals; the impacts of implementation of the renewable energy and resilience proposals on future costs of electricity and potential penalties imposed by the PUC for delays in the commercial operations of renewable energy projects;

•the ability of the Utilities to develop, implement and recover the costs of implementing the Utilities’ action plans included in their updated Power Supply Improvement Plans, Demand Response Portfolio Plan, Distributed Generation Interconnection Plan, Grid Modernization Plans, and business model changes, which have been and are continuing to be developed and updated in response to the orders issued by the PUC, the PUC’s April 2014 statement of its inclinations on the future of Hawaii’s electric utilities and the vision, business strategies and regulatory policy changes required to align the Utilities’ business model with customer interests and the state’s public policy goals, and subsequent orders of the PUC;

•the ability of the Utilities to recover undepreciated cost of fossil fuel generating units, if they are required to be retired before the end of their expected useful life;

•capacity and supply constraints or difficulties, especially if generating units (utility-owned or IPP-owned) fail or measures such as demand-side management, distributed generation, combined heat and power or other firm capacity supply-side resources fall short of achieving their forecasted benefits or are otherwise insufficient to reduce or meet peak demand;

•high and/or volatile fuel prices, which increases working capital requirements and customer bills, or delivery of adequate fuel by suppliers (including as a result of the Russia-Ukraine war and conflict in the Middle East), which could affect the reliability of utility operations, and the continued availability to the electric utilities of their energy cost recovery clauses (ECRCs);

•the continued availability to the electric utilities or modifications of other cost recovery mechanisms, including the purchased power adjustment clauses (PPACs), annual revenue adjustment (ARA) and pension and postretirement benefits other than pensions (OPEB) tracking mechanisms, and the continued decoupling of revenues from sales to mitigate the effects of declining kilowatt-hour sales;

•the ability of the Utilities to recover increasing or additional costs and earn a reasonable return on capital investments not covered by the ARA, while providing the customer dividend required by performance-based regulation (PBR);

•the impact from the PUC’s implementation of PBR for the Utilities pursuant to Act 005, Session Laws 2018, including the potential addition of new performance incentive mechanisms (PIMs), third-party proposals adopted by the PUC in its implementation of PBR, and the implications of not achieving performance incentive goals;

•the impact of fuel price levels and volatility on customer satisfaction and political and regulatory support for the Utilities;

•unfavorable changes in economic conditions, such as sustained inflation, higher interest rates or recession, may negatively impact the ability of the Company’s customers to pay their utility bills or loan payments, reduce loan production, and increase operating costs of the Utilities or Bank that cannot be passed on to, or recovered, from customers;

•the risks associated with increasing reliance on renewable energy, including the availability and cost of non-fossil fuel supplies for renewable energy generation and the operational and related cost impacts of adding intermittent sources of renewable energy to the electric grid;

•the growing risk that energy production from renewable generating resources may be curtailed and the interconnection of additional resources will be constrained as more generating resources are added to the Utilities’ electric systems and as customers reduce their energy usage;

•the ability of IPPs to deliver the firm capacity anticipated in their power purchase agreements (PPAs);

•the potential that, as IPP contracts near the end of their terms, there may be less economic incentive for the IPPs to make investments in their units to ensure the availability of their units;

•the ability of the Utilities to negotiate, periodically, favorable agreements for significant resources such as fuel supply contracts and collective bargaining agreements and avoid or mitigate labor disputes and work stoppages;

•new technological developments that could affect the operations and prospects of the Utilities and ASB or their competitors such as the commercial development of energy storage and microgrids and banking through alternative channels, including use of digital currencies, which could include a central bank digital currency;

•cybersecurity risks and the potential for cyber incidents, including potential incidents at HEI, its subsidiaries (including at ASB branches and electric utility plants), its third-party service providers, contractors and customers with whom they have shared data (IPPs, distributed energy resources (DER) aggregators and customers enrolled under DER programs) and incidents at data processing centers used, to the extent not prevented by intrusion detection and prevention systems, anti-virus software, firewalls and other general IT controls;

•failure to achieve remaining cost savings commitment related to the management audit committed savings of $33 million over the 2021 to 2025 multi-year rate period (MRP);

•federal, state, county and international governmental and regulatory actions, such as existing, new and changes in laws, rules and regulations applicable to HEI, the Utilities and ASB (including changes in taxation and tax rates, increases in capital requirements, regulatory policy changes, environmental laws and regulations (including resulting compliance costs and risks of fines and penalties and/or liabilities), the regulation of greenhouse gas emissions, governmental fees and assessments (such as Federal Deposit Insurance Corporation assessments), and potential carbon pricing or “cap and trade” legislation that may fundamentally alter costs to produce electricity and accelerate the move to renewable generation);

•developments in laws, regulations and policies governing protections for historic, archaeological and cultural sites, and plant and animal species and habitats, as well as developments in the implementation and enforcement of such laws, regulations and policies;

•discovery of conditions that may be attributable to historical chemical releases, including any necessary investigation and remediation, and any associated enforcement, litigation or regulatory oversight;

•decisions by the PUC in rate cases and other proceedings (including the risks of delays in the timing of decisions, adverse changes in final decisions from interim decisions and the disallowance of project costs as a result of adverse regulatory audit reports or otherwise);

•decisions by the PUC and by other agencies and courts on land use, environmental and other permitting issues (such as required corrective actions, restrictions and penalties that may arise, such as with respect to environmental conditions or RPS);

•potential enforcement actions by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (FRB), the Federal Deposit Insurance Corporation (FDIC) and/or other governmental authorities (such as consent orders, required corrective actions, restrictions and penalties that may arise, for example, with respect to compliance deficiencies under existing or new banking and consumer protection laws and regulations or with respect to capital adequacy);

•the risks associated with the geographic concentration of HEI’s businesses and ASB’s loans, ASB’s concentration in a single product type (i.e., first mortgages) and ASB’s significant credit relationships (i.e., concentrations of large loans and/or credit lines with certain customers);

•changes in accounting principles applicable to HEI and its subsidiaries, including the adoption of new U.S. accounting standards, the potential discontinuance of regulatory accounting related to PBR or other regulatory changes, the effects of potentially required consolidation of variable interest entities (VIEs), or required finance lease or on-balance-sheet operating lease accounting for PPAs with IPPs;

•faster than expected loan prepayments that can cause a decrease in net interest income and portfolio yields, an acceleration of the amortization of premiums on loans and investments and the impairment of mortgage-servicing assets of ASB;

•changes in ASB’s loan portfolio credit profile and asset quality and/or mix, which may increase or decrease the required level of provision for credit losses, allowance for credit losses (ACL) and charge-offs;

•changes in ASB’s deposit levels, cost or mix which may have an adverse impact on ASB’s cost of funds;

•the final outcome of tax positions taken by HEI and its subsidiaries;

•the ability of the Company’s non-regulated subsidiary, Pacific Current, LLC (Pacific Current), to achieve its performance and growth objectives, which in turn could affect its ability to service its non-recourse debt;

•the Company’s reliance on third parties and the risk of their non-performance; and

•other risks or uncertainties described elsewhere in this report and in other reports (e.g., “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K) previously and subsequently filed by HEI and/or Hawaiian Electric with the Securities and Exchange Commission.

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, Pacific Current and their subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether written or oral and whether as a result of new information, future events or otherwise.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Hawaiian Electric Industries, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (unaudited)


	Three months ended March 31
(in thousands, except per share amounts)		2024		2023
Revenues
Electric utility		$	788,578	$	830,361
Bank		105,144		93,857
Other		3,436		4,019
Total revenues		897,158		928,237
Expenses
Electric utility		725,223		754,486
Bank		79,612		70,337
Other		15,904		9,896
Total expenses		820,739		834,719
Operating income (loss)
Electric utility		63,355		75,875
Bank		25,532		23,520
Other		(12,468)		(5,877)
Total operating income		76,419		93,518
Retirement defined benefits credit—other than service costs		1,282		1,152
Interest expense, net—other than on deposit liabilities and other bank borrowings		(31,591)		(28,798)
Allowance for borrowed funds used during construction		1,386		1,131
Allowance for equity funds used during construction		3,640		3,301
Interest income		3,133		—

Income before income taxes		54,269		70,304
Income taxes		11,674		15,110
Net income		42,595		55,194
Preferred stock dividends of subsidiaries		473		473
Net income for common stock		$	42,122	$	54,721
Basic earnings per common share		$	0.38	$	0.50
Diluted earnings per common share		$	0.38	$	0.50

Weighted-average number of common shares outstanding		110,218		109,514
Net effect of potentially dilutive shares (share-based compensation programs)		258		311
Weighted-average shares assuming dilution		110,476		109,825

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.

Hawaiian Electric Industries, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (unaudited)


	Three months ended March 31
(in thousands)		2024		2023
Net income for common stock		$	42,122	$	54,721
Other comprehensive income (loss), net of taxes:
Net unrealized gains (losses) on available-for-sale investment securities:
Net unrealized gains (losses) on available-for-sale investment securities arising during the period, net of taxes of $(4,975) and $6,079, respectively		(13,589)		16,605

Amortization of unrealized holding losses on held-to-maturity securities, net of taxes of $1,129 and $1,346, respectively		3,086		3,677
Derivatives qualifying as cash flow hedges:
Unrealized interest rate hedging gains (losses) arising during the period, net of taxes of $256 and $65, respectively		740		186
Reclassification adjustment to net income, net of taxes of $(16) and $(17), respectively		(48)		(48)
Retirement benefit plans:
Adjustment for amortization of prior service credit and net gains recognized during the period in net periodic benefit cost, net of taxes of $(154) and $(122), respectively		(449)		(357)
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes of $159 and $147, respectively		459		425
Other comprehensive income (loss), net of taxes		(9,801)		20,488
Comprehensive income attributable to Hawaiian Electric Industries, Inc.		$	32,321	$	75,209

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.

Hawaiian Electric Industries, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (unaudited)


(dollars in thousands)	March 31, 2024		December 31, 2023
Assets
Cash and cash equivalents	$	485,192	$	679,546
Restricted cash	17,531		15,028
Accounts receivable and unbilled revenues, net	469,298		575,176
Available-for-sale investment securities, at fair value	1,091,889		1,136,439
Held-to-maturity investment securities, at amortized cost	1,191,074		1,201,314
Stock in Federal Home Loan Bank, at cost	32,489		14,728
Loans held for investment, net	6,045,665		6,106,438
Loans held for sale, at lower of cost or fair value	2,923		15,168
Property, plant and equipment, net of accumulated depreciation of $3,374,016 and $3,317,759 at March 31, 2024 and December 31, 2023, respectively	6,183,503		6,150,126
Operating lease right-of-use assets	91,182		94,905

Regulatory assets	315,067		294,804
Other	915,205		877,959
Goodwill	82,190		82,190
Total assets	$	16,923,208	$	17,243,821
Liabilities and shareholders’ equity
Liabilities
Accounts payable	$	248,806	$	247,462
Interest and dividends payable	61,452		51,206
Deposit liabilities	8,005,064		8,145,778

Other bank borrowings	593,000		750,000
Long-term debt, net—other than bank	2,837,875		2,842,429
Deferred income taxes	299,012		297,954
Operating lease liabilities	99,611		103,900
Finance lease liabilities	350,290		339,040
Regulatory liabilities	1,159,811		1,150,690

Defined benefit pension and other postretirement benefit plans liability	84,554		82,879
Other	772,060		853,349
Total liabilities	14,511,535		14,864,687
Preferred stock of subsidiaries - not subject to mandatory redemption	34,293		34,293
Commitments and contingencies (Notes 2, 4 and 5)
Shareholders’ equity
Preferred stock, no par value, authorized 10,000,000 shares; issued: none	—		—
Common stock, no par value, authorized 200,000,000 shares; issued and outstanding: 110,302,667 shares and 110,151,798 shares at March 31, 2024 and December 31, 2023, respectively	1,707,689		1,707,471
Retained earnings	968,842		926,720
Accumulated other comprehensive loss, net of tax benefits	(299,151)		(289,350)
Total shareholders’ equity	2,377,380		2,344,841
Total liabilities and shareholders’ equity	$	16,923,208	$	17,243,821

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.

Hawaiian Electric Industries, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited)


	Common stock			Retained		Accumulated other comprehensive
(in thousands)	Shares	Amount		Earnings		income (loss)		Total
Balance, December 31, 2023	110,152	$	1,707,471	$	926,720	$	(289,350)	$	2,344,841
Net income for common stock	—	—		42,122		—		42,122
Other comprehensive loss, net of tax benefits	—	—		—		(9,801)		(9,801)
Share-based expenses and other, net	151	218		—		—		218

Balance, March 31, 2024	110,303	$	1,707,689	$	968,842	$	(299,151)	$	2,377,380











Balance, December 31, 2022	109,471	$	1,692,697	$	845,830	$	(336,028)	$	2,202,499
Net income for common stock	—	—		54,721		—		54,721
Other comprehensive income, net of taxes	—	—		—		20,488		20,488
Share-based expenses and other, net	101	(307)		—		—		(307)
Common stock dividends (36¢ per share)	—	—		(39,446)		—		(39,446)
Balance, March 31, 2023	109,572	$	1,692,390	$	861,105	$	(315,540)	$	2,237,955

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.

Hawaiian Electric Industries, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)


	Three months ended March 31
(in thousands)	2024		2023
Cash flows from operating activities
Net income	$	42,595	$	55,194
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation of property, plant and equipment	68,757		66,508
Other amortization	12,093		10,362
Provision for credit losses	(2,159)		1,175
Loans originated, held for sale	(25,318)		(5,450)
Proceeds from sale of loans, held for sale	26,450		5,662

Gain on sale of loans, net	(425)		(130)
Deferred income tax expense (benefit)	1,826		(1,076)
Share-based compensation expense	1,288		2,031
Allowance for equity funds used during construction	(3,640)		(3,301)
Other	2,091		(988)
Changes in assets and liabilities
Decrease in accounts receivable and unbilled revenues, net	138,369		82,423
Decrease (increase) in fuel oil stock	(14,025)		33,429
Increase in materials and supplies	(1,329)		(4,548)
Increase in regulatory assets	(17,178)		(8,898)
Increase in regulatory liabilities	2,909		11,551
Increase in accounts, interest and dividends payable	8,462		24,748
Change in prepaid and accrued income taxes, tax credits and utility revenue taxes	(11,628)		(47,305)
Decrease in defined benefit pension and other postretirement benefit plans liability	(930)		(1,950)
Change in other assets and liabilities	(103,589)		(38,485)
Net cash provided by operating activities	124,619		180,952
Cash flows from investing activities

Principal repayments on available-for-sale investment securities	25,615		32,484


Proceeds from repayments or maturities of held-to-maturity investment securities	13,752		17,938
Purchase of stock from Federal Home Loan Bank	(21,856)		(35,960)
Redemption of stock from Federal Home Loan Bank	4,095		52,520
Net decrease (increase) in loans held for investment	42,853		(68,871)

Proceeds from sale of commercial loans	31,067		—
Purchase of loans held for investment	—		(13,012)
Capital expenditures	(99,550)		(124,297)

Contributions to low income housing investments	—		(418)

Other	(1,568)		2,148
Net cash used in investing activities	(5,592)		(137,468)

(continued)

Hawaiian Electric Industries, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited) (continued)


	Three months ended March 31
(in thousands)	2024		2023
Cash flows from financing activities
Net increase (decrease) in deposit liabilities	(140,714)		60,905
Net decrease in short-term borrowings with original maturities of three months or less	—		(88,666)
Net increase (decrease) in other bank borrowings with original maturities of three months or less	73,000		(564,430)
Proceeds from issuance of short-term debt	—		65,000

Proceeds from issuance of other bank borrowings	320,000		550,000
Repayment of other bank borrowings	(550,000)		—
Proceeds from issuance of long-term debt	4,673		150,000
Repayment of long-term debt	(8,268)		(53,878)
Withheld shares for employee taxes on vested share-based compensation	(1,070)		(2,338)

Common stock dividends	—		(39,446)
Preferred stock dividends of subsidiaries	(473)		(473)
Other	(8,026)		(5,535)
Net cash provided by (used in) financing activities	(310,878)		71,139
Net increase (decrease) in cash, cash equivalents and restricted cash	(191,851)		114,623
Cash, cash equivalents and restricted cash, beginning of period	694,574		204,927
Cash, cash equivalents and restricted cash, end of period	502,723		319,550
Less: Restricted cash	(17,531)		(4,216)
Cash and cash equivalents, end of period	$	485,192	$	315,334

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (unaudited)


	Three months ended March 31
(in thousands)		2024		2023
Revenues		$	788,578	$	830,361
Expenses
Fuel oil		284,296		334,097
Purchased power		159,817		152,761
Other operation and maintenance		143,890		128,316
Depreciation		62,812		60,927
Taxes, other than income taxes		74,408		78,385
Total expenses		725,223		754,486
Operating income		63,355		75,875
Allowance for equity funds used during construction		3,640		3,301
Retirement defined benefits credit—other than service costs		1,072		1,047
Interest expense and other charges, net		(19,985)		(20,246)
Allowance for borrowed funds used during construction		1,386		1,131
Interest income		1,432		—
Income before income taxes		50,900		61,108
Income taxes		11,180		13,600
Net income		39,720		47,508
Preferred stock dividends of subsidiaries		229		229
Net income attributable to Hawaiian Electric		39,491		47,279
Preferred stock dividends of Hawaiian Electric		270		270
Net income for common stock		$	39,221	$	47,009

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.

HEI owns all of the common stock of Hawaiian Electric. Therefore, per share data with respect to shares of common stock of Hawaiian Electric are not meaningful.

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (unaudited)


	Three months ended March 31
(in thousands)		2024		2023
Net income for common stock		$	39,221	$	47,009
Other comprehensive loss, net of taxes:



Retirement benefit plans:
Adjustment for amortization of prior service credit and net gains recognized during the period in net periodic benefit cost, net of taxes of $(176) and $(163), respectively		(508)		(470)
Reclassification adjustment for impact of D&Os of the PUC included in regulatory assets, net of taxes of $159 and $147, respectively		459		425
Other comprehensive loss, net of taxes		(49)		(45)
Comprehensive income attributable to Hawaiian Electric Company, Inc.		$	39,172	$	46,964

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (unaudited)


(dollars in thousands, except par value)	March 31, 2024		December 31, 2023
Assets
Property, plant and equipment
Utility property, plant and equipment
Land	$	52,019	$	52,098
Plant and equipment	8,302,449		8,232,810
Right-of-use assets - finance lease	354,401		342,174
Less accumulated depreciation	(3,249,089)		(3,197,514)
Construction in progress	330,743		320,223
Utility property, plant and equipment, net	5,790,523		5,749,791
Nonutility property, plant and equipment, less accumulated depreciation of $41 and $40 as of March 31, 2024 and December 31, 2023, respectively	6,941		6,942
Total property, plant and equipment, net	5,797,464		5,756,733
Current assets
Cash and cash equivalents	129,754		106,077
Restricted cash	2,000		2,000
Customer accounts receivable, net	209,999		244,309
Accrued unbilled revenues, net	171,455		185,644
Other accounts receivable, net	38,025		111,519
Fuel oil stock, at average cost	161,433		148,237
Materials and supplies, at average cost	115,719		114,433
Prepayments and other	72,025		58,491
Regulatory assets	82,503		68,453
Total current assets	982,913		1,039,163
Other long-term assets
Operating lease right-of-use assets	68,217		71,877
Regulatory assets	232,564		226,351
Other	193,704		189,430
Total other long-term assets	494,485		487,658
Total assets	$	7,274,862	$	7,283,554

(continued)

Hawaiian Electric Company, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (unaudited) (continued)


(dollars in thousands, except par value)	March 31, 2024		December 31, 2023
Capitalization and liabilities
Capitalization
Common stock ($6 2/3 par value, authorized 50,000,000 shares; outstanding 17,854,278 shares at March 31, 2024 and December 31, 2023)	$	119,048	$	119,048
Premium on capital stock	810,955		810,955
Retained earnings	1,502,479		1,476,258
Accumulated other comprehensive income, net of taxes-retirement benefit plans	2,800		2,849
Common stock equity	2,435,282		2,409,110
Cumulative preferred stock — not subject to mandatory redemption	34,293		34,293
Long-term debt, net	1,886,028		1,934,277
Total capitalization	4,355,603		4,377,680
Commitments and contingencies (Notes 2 and 4)
Current liabilities
Current portion of operating lease liabilities	16,234		16,617
Current portion of long-term debt, net	46,931		—


Accounts payable	198,636		191,040
Interest and preferred dividends payable	43,926		22,882
Taxes accrued, including revenue taxes	282,446		291,942
Regulatory liabilities	26,149		36,559
Other	108,006		171,436
Total current liabilities	722,328		730,476
Deferred credits and other liabilities
Operating lease liabilities	58,399		62,098
Finance lease liabilities	341,141		330,978
Deferred income taxes	403,761		399,001
Regulator