夏威夷电力实业 (HE) 2026年第三季度业绩电话会：风暴成本，费率调整案与野火和解

核心要点

• HEI (HE) 公布2026年第三季度GAAP净利润为3550万美元，合每股收益0.20美元，上年同期为3070万美元，合每股收益0.18美元。
• 核心净利润从上年同期的3280万美元（合每股收益0.19美元）降至2300万美元（合每股收益0.13美元），主要原因是公用事业运营及维护（O&M）费用增加，其中包括约1370万美元的税前风暴增量预估成本。
• 截至季度末，公司流动性总额约为13亿美元，其中包括2.24亿美元非受限现金，以及股票和信贷额度项下约11亿美元的可用额度。
• 管理层表示，暂定的监管日程有望支持新基础费率于2027年5月初生效。若全部申请获得批准，HEI预计将在2027年增加8300万美元收入，按全年折算年化运行增量将达1.25亿美元。
• HEI已预付8000万美元用于第二笔野火和解金付款。管理层预计还将进一步预付至少1亿美元，这可能将2027年4月到期的应付金额降至3亿美元以下。
• 公司仍在评估通过普通债务和可转换债券来偿付剩余和解义务，并明确重点在于尽量减少对股东的股权稀释，同时努力重建投资级信用指标。

关键财务数据

HEI确认了约6400万美元与American Savings Bank相关的税前已实现及未实现收益。其中包括出售HEI所持9.9%股份中35%股权所获得的1830万美元税前收益，以及剩余股份产生的4590万美元未实现收益。

Pacific Current就Mahipapa生物质发电设施计提了5070万美元的非现金税前减值。公用事业利息支出中还包含约1800万美元与野火和解负债相关的非现金增殖费用。

业务与运营表现

公用事业O&M费用中包含与8月和9月飓风相关的预估1370万美元税前增量成本。作为组织架构精简的一部分，HEI还将约560万美元费用从控股公司转移至公用事业子公司。管理层强调，该项转移并未增加合并层面的整体费用。

飓风“拉拉”（Lala）在高峰期导致HEI服务区域内超过40%的客户账户停电。该公用事业子公司在三天内为超过95%的受影响客户恢复了供电。飓风“洛厄尔”（Lowell）和“诺洛”（Nolo）对HEI电网系统的影响相对有限。

管理层表示，包括电线杆升级和加强植被修剪在内的野火防范措施，有助于减少极端天气期间的倒杆故障。自2023年毛伊岛野火以来，每100万美元保额的商业野火保险费率已下降52%。

HEI正寻求监管批准，对高达5亿美元的野火安全、防范及韧性投资进行资产证券化。在受调查的100多家公用事业企业中，客户满意度排在第86百分位。

American Savings Bank于9月完成了首次公开募股（IPO）。Pacific Current剩余的运营资产Mahipapa在拟议出售交易终止且购电协议于10月1日到期后，于11月3日申请了破产法第7章清算。

管理层展望

待批的基础费率重设申请提议在两年内分阶段上调5.3%的基础费率。夏威夷公共事业委员会（PUC）的暂定日程预计将在2027年4月中下旬作出最终裁决，新费率有望于5月初生效。

若按上述时间表全额获批，管理层预计2027年将增加8300万美元收入，相当于1.25亿美元全年年化运行增量对应的8个月收入。公用事业子公司在该部分年度内的核心净资产收益率（ROE）目标约为7.3%至7.8%，相当于新费率执行一整年时约8.3%至8.8%的水平。

上述测算未包含基于绩效的监管（PBR）程序第六阶段项下提议的绩效激励机制的潜在影响。管理层预计，潜在的ROE上升空间最高可达150个基点（约3300万美元），潜在惩罚最高可达50个基点（约1100万美元）。具体时间与监管裁定结果仍存在不确定性。

HEI预计，潜在出售剩余ASB股份所得款项及预期的保险理赔收益，将支持至少额外1亿美元的和解预付款项。管理层计划视市场情况，通过发行普通债或可转债为剩余款项筹资。

值得关注的风险与问题

• HEI已申请递延计入合规风暴费用的许可，并请求PUC在2026年12月15日前作出裁决。递延批准并不构成对成本回收的批准，后者将在2027年另行申请。
• 基础费率重设以及第六阶段PBR程序的推进时间与结果仍取决于PUC的裁决。
• 剩余野火和解金付款的融资条款将取决于市场环境，以及在普通债与可转债之间的权衡。
• 计划中的和解预付款在一定程度上取决于HEI对剩余ASB股份的潜在出售情况以及预期的保险收益。
• Mahipapa进入破产法第7章清算程序，此前该资产遭受飓风破坏、拟议出售交易终止且购电协议已到期。
• 能否重获投资级评级仍取决于评级机构的决定。

分析师问答亮点

管理层重申，第二笔野火和解款项的剩余部分可能会通过普通债或可转债进行融资。在已完成的8000万美元预付款及预期的额外进账到位后，HEI的目标是将2027年4月的应付余额降至约3亿美元或略低的水平。

关于潜在的野火责任上限，管理层表示PUC的正式规则制定程序正在进行中。规则草案可能会在2027年某个时间出台，但具体时间取决于委员会的推进节奏。

管理层表示，目前没有在当前股价水平下动用市价增发（ATM）股权计划的打算。公司预计大部分资本支出将依靠内生收益解决，并辅以债务融资。管理层还表示，除可能存在的时间调整外，2027年和2028年的资本开支计划与上一季度基本保持一致。

业绩电话会完整纪要

完整财报电话会议逐字稿

管理层陈述

Operator

Thank you for joining us, and welcome to the HEI Third Quarter 2026 Earnings Conference Call. [Operator Instructions]

I will now hand the conference over to Mateo Garcia, Director of Investor Relations. Sir, please go ahead.

Mateo Garcia

Thank you. Welcome, everyone, to HEI's Third Quarter 2026 Earnings Call. Joining me today are our CEO, Scott Seu; our President, Shelee Kimura; our Senior Vice President and CFO, Paul Ito; and other members of senior management. Our earnings release and our presentation for this call are available in the Investor Relations section of our website.

As a reminder, forward-looking statements will be made on today's call. Factors that could cause actual results to differ materially from expectations can be found in our presentation, our SEC filings and in the Investor Relations section of our website. Today's presentation also includes references to non-GAAP financial measures, including those referred to as core items. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure.

We will take questions from institutional investors at the end of this call. Individual investors and others can reach out to Investor Relations.

Now Scott Seu will begin with his remarks.

Scott W. Seu

Aloha kakou. Welcome, everyone. For today's call, I'll start with updates on key strategic priorities and regulatory processes. Paul Ito will walk through the quarter's results and discuss the financial implications of pending regulatory requests.

Throughout this year, we've continued to make measurable progress across the key objectives that we've communicated since the Maui wildfires of 2023. We told you that we would take the actions necessary to improve the financial strength of our enterprise and ensure our ability to serve and invest in our communities for the long term. Over the past 3 years, we've done this by improving our financial and operational risk profile, resulting in upgrades in both HEI and Hawaiian Electric's ratings from all 3 agencies.

Our liquidity today is more than 5x what it was just after the wildfires and more than twice what it was just before the wildfires, giving us significant optionality as we look ahead toward making the remaining payments stipulated under the historic settlement agreement that was upheld by the Hawaii Supreme Court earlier this year. We've also restored our access to capital, completing successful debt and equity offerings at the operating company level and holding company level, respectively. We've achieved substantial milestones in implementing our Wildfire Mitigation Plan, resulting in significantly lower risk of utility-caused ignitions across our system.

The effectiveness of our efforts has not only been recognized by the rating agencies, but by our insurance providers as well. Our insurers have recognized us as among the best-in-class with respect to wildfire risk mitigation. And as a result, our price per million for commercial wildfire premiums has declined 52% since the Maui wildfires.

We're also implementing our Wildfire Mitigation Plan at the least cost to customers, with securitization planned to cover up to $500 million in wildfire mitigation program costs and other resilience spending. With the divestitures of American Savings Bank and the Pacific Current businesses, we're moving ahead with a more streamlined and simpler business solely focused on a regulated electric utility. After consistently achieving aggressive strategic milestones to date under challenging circumstances, we're well positioned for strong execution of our strategies, ensuring that we can continue to strengthen the financial position of the company while serving our communities with safe, affordable, reliable and resilient electricity.

Turning to the next slide. We continue to advance strategic priorities during the third quarter. Our islands experienced elevated storm activity in August and September, and I'm proud of the strong performance of our crews in quickly restoring power following severe weather and damage to our system. Hurricane Lala caused extensive statewide damage as it passed through the southern portion of the island chain in mid-August, causing hurricane force winds across the state. At their peak, outages impacted over 40% of customer accounts across our service territories. However, our crews made rapid progress restoring service under challenging weather conditions, with more than 95% of affected customers restored within 3 days of the storm's passing.

Hurricane Lowell passed by our service territories in early September, with limited impacts to our system. Our crews provided assistance to Kauai Island Utility Cooperative to restore power on the island of Kauai, which experienced severe impacts. In September, Hurricane Nolo had only minor impacts in our service territory, with a handful of outages that our crews quickly addressed. Most customers' power was restored within hours.

Our ability to quickly restore customers in the face of very challenging weather conditions is a result of the hard work of Hawaiian Electric crews and our effective execution implementing resiliency measures. The significant resources invested in resilience as we've implemented our Wildfire Mitigation Plan proved beneficial in the face of these severe weather events. For example, measures already implemented in high wildfire risk areas, such as pole upgrades and enhanced vegetation trimming, have resulted in fewer pole failures during extreme weather events.

We continue to prioritize safety in everything we do, and we've implemented industry-wide best practices, adopting proven measures used by wildfire-affected utilities on the mainland, but tailored to our very different risk profile. Hawaii's wildfire risk differs significantly from that of California or other wildfire-prone Western states, where large-scale wildfires are a regular occurrence, often numerous times a year. We continue to implement industry best practices to strengthen safety and reduce risk of utility equipment involvement in an ignition.

Wildfire risk reduction has also become a statewide collaborative effort involving many dedicated parties beyond the state's utilities. Government agencies, first responders, landowners, nonprofits and others are engaged in dedicated efforts and have increased funding and other resources to reduce the risk of ignition, spread and impact of wildfires.

Along with safety, reliability and resilience, affordability remains a priority in everything we do. Our pending rate rebasing request reflects that balance. We've proposed a 5.3% base rate increase phased in over 2 years that is in line with projected inflation while supporting the continued investments needed for a safe, reliable and resilient grid.

We're mindful of the cost pressures our customers face, especially our low-income customers, in the current high price environment. That's also why we recently sought PUC approval of up to $500 million in wildfire safety and resilience investments using securitization, which was authorized by Hawaii's legislature and signed into law by Governor Green last year. The structure is designed to lower the cost to customers while advancing public safety.

Our work to consistently deliver for our customers has not gone unrecognized, and we've seen consistent improvement in customer satisfaction over the past 3 years. We were pleased to see that customer satisfaction scores during the quarter remained well above industry averages, with customer satisfaction in the 86th percentile of over 100 utilities surveyed.

Turning to the next slide. Our rate rebasing continues to progress. And over the past few months, public hearings have been held on all islands we serve. We are awaiting a final PUC procedural schedule, which will give us a better sense of the next significant milestone dates and when new rates might take effect.

In the meantime, the review process to consider PBR framework changes for the next 5 years is progressing toward conclusion. In October, the PUC issued guidance for what is called PBR Phase 6, including a staff proposal to narrow focus for the remaining steps in this process. The staff proposal is largely aligned with our own positions on PBR modifications. The collaboration and discussions among the PBR stakeholder parties to this point should facilitate a PUC decision on final PBR framework changes in the near future, although no time line for such a decision has been set thus far.

We'll be filing our comments on the PUC staff's proposal no later than November 13. The PUC has laid out high-level procedural steps following the reply comments, with the next major milestone being the commission's inclinations, expected to be published in early January. In summary, our key PBR-related regulatory processes are advancing, and we expect more clarity on the exact timing for conclusion of the rate rebasing and Phase 6 in the near term. We continue to execute on our operational priorities, maintaining our focus on affordability while delivering the safe, reliable and resilient electricity our customers deserve.

I'll now turn the call over to Paul to discuss our financial results.

Paul Ito

Thank you, Scott. I'll start with our financial results on Slide 6. For the third quarter of 2026, we generated GAAP net income of $35.5 million or $0.20 per share compared to $30.7 million or $0.18 per share a year ago. The results include the impacts of several items we consider noncore. American Savings Bank completed an initial public offering in September. And as part of the transaction, HEI sold 35% of its 9.9% stake, realizing net proceeds of approximately $33.9 million and a pretax gain of $18.3 million. HEI also recognized a noncash unrealized gain of $45.9 million on its remaining stake in the bank, reflecting its market value at quarter end. In total, the realized and unrealized gains were approximately $64 million pretax.

We also recorded a noncash pretax asset impairment of $50.7 million at Pacific Current related to its last remaining operating asset, the Mahipapa biomass generating facility on Kauai. In September, the proposed sale of Mahipapa to an unaffiliated third party was terminated because the parties could not resolve certain obligations needed to close the sale. Mahipapa's facility has been offline since early September following damage from Hurricane Lowell, and its power purchase agreement with Kauai Island Utility Cooperative, or KIUC, ended on October 1.

Mahipapa filed for Chapter 7 liquidation on November 3. Once the proceeding is completed, there will be no remaining operations under Pacific Current. We've worked to minimize the impacts of the shutdown on stakeholders, including Mahipapa employees, KIUC and creditors. The impairment reduced the plant assets to their estimated net salvage value.

Similar to last quarter, utility interest expense includes approximately $18 million of noncash accretion expense on the wildfire settlement liability. As a reminder, we discounted the remaining settlement payments to present value last quarter. Accretion increases that recorded liability as the payment dates approach. It does not increase the agreed settlement payments.

Excluding ASB investment gains, the Pacific Current impairment and Maui wildfire-related items, consolidated core net income and EPS were $23 million and $0.13, down from $32.8 million and $0.19 in the third quarter of 2025. The decline primarily reflects storm-related expenses at the utility, which remain included in both GAAP and core results. At the utility, GAAP net income was $13.5 million compared to $37 million a year ago. Utility core net income for the quarter was $27.6 million compared to $39.6 million in 2025. The decrease in utility core net income primarily reflects higher O&M expenses.

The higher utility O&M was driven by $13.7 million of estimated incremental pretax storm costs related to hurricanes in August and September and approximately $5.6 million of expenses previously recorded at the holding company, but now recorded at the utility. This transfer started in the third quarter and reflects the integration of holding company functions and employees into the utility as we simplify the business. The ongoing expenses are now recorded at the utility, but the transfer itself did not increase consolidated expenses. The costs that remain at the holding company will primarily consist of interest expense on holding company debt and holding company expenses that are unrelated to utility operations.

In October, we filed for deferral of the storm-related expenses and have requested a PUC decision no later than December 15, 2026. If approved and the applicable accounting criteria are met, we would reverse the qualifying expenses in our fourth quarter financials. Our request covers incremental, prudently incurred storm costs. We'll then file for recovery in a separate request to the PUC in 2027 under our Z-factor recovery mechanism. We believe the storm costs meet the required criteria specified for recovery under the Z-factor because the costs were prudently incurred, incremental and related to exogenous events outside of the control of the utility. Approval to defer the costs would not by itself constitute approval of recovery.

Holding company core net loss for the quarter was $4.6 million compared to $6.8 million in the third quarter of 2025. The lower core net loss was primarily driven by the holding company expenses that are now being recorded at the utility, partially offset by lower interest income due to a lower cash balance following the first settlement payment made in April of this year.

Turning to the next slide. As of the end of the third quarter, on a consolidated basis, total liquidity was approximately $1.3 billion. This includes $224 million of unrestricted cash on hand and approximately $1.1 billion of liquidity available under HEI's ATM program, HEI's and the utility's credit facility capacity and the utility's accounts receivable facility.

We continue to believe that we are well positioned to meet increased working capital requirements due to higher fuel prices, as well as financing needs related to utility CapEx. Consistent with last quarter, we have not seen a meaningful increase in bad debt expense or write-offs this year, and bad debt expense is actually lower than it was at this time last year, while net write-offs have been relatively flat.

Turning to the next slide. As Scott mentioned, our rate rebasing request is being reviewed by the PUC. The PUC's tentative procedural schedule contemplates a final decision in order in mid- to late April 2027. This could allow for new rates to take effect by early May. Under this illustrative scenario, assuming our full rate rebasing requests were granted, we would see $83 million of additional revenue from the rate rebasing in 2027, which is 8 months of the full year run rate of $125 million. Under the scenario for a partial year of new rates, the utility would manage to a core return on equity of approximately 7.3% to 7.8%. That is equivalent to approximately 8.3% to 8.8% under a full year of new rates, reflecting the full $125 million base rate increase.

The partial year and full year ROE scenarios do not include the potential impacts from new performance incentive mechanisms or other changes to the PBR framework that are being considered under Phase 6 of the PBR proceeding. These scenarios are illustrative, and the timing and outcome of the PUC's decision remain uncertain. If the PUC approves the PIMs package proposed by the company in the Phase 6 PBR proceeding, the potential upside of up to 150 basis points of ROE in PIMs would be approximately $33 million. The potential downside from up to 50 basis points of ROE and PIM penalties would be approximately $11 million.

Turning next to our financing plans. Our strong quarter end liquidity provides significant flexibility as we look ahead toward funding our CapEx and the remaining wildfire settlement payments. We have already prepaid $80 million toward the second settlement payment, reducing the $479 million amount due by $82 million after reflecting the early payment discount. In addition, we expect to prepay at least another $100 million before the April 2027 due date using proceeds from the potential sale of our remaining shares of ASB and expected insurance proceeds. If completed as expected, these prepayments would reduce the amount remaining due in April to below $300 million.

We still expect to finance the remainder of the second payment with straight debt or convertible debt. We have a variety of financing options available, and with strong liquidity, we have flexibility on timing as market conditions evolve. We also have the option to make some or all of the remaining settlement payments early, with a discount applied based on an annualized rate of 5.5%.

We will continue to evaluate additional prepayments against our financing costs and liquidity needs. Our financing strategy will focus on minimizing shareholder dilution while building toward investment-grade credit metrics over the long term. We believe achieving those metrics, together with the implementation of the wildfire protections contemplated by Act 258 and completion of the remaining settlement payments, would provide a credible path back to investment-grade. The timing and outcome of any rating actions remain at the discretion of the rating agencies. As our financial position strengthens, our Board of Directors may revisit our dividend policy with a longer-term objective of reaching a payout ratio consistent with peer utilities.

We'll now open up the call for questions.

Operator

[Operator Instructions] Your first question comes from Michael Lonegan with Barclays.

分析师问答

Michael Lonegan

So you talked about the early payment approach for the wildfire liabilities. So I was just wondering if you could share if you're leaning more towards -- for the remaining amount, more towards debt or convertible debt? And is this something you could expect in the near term or closer to the April due date for the PEP payment?

Paul Ito

Mike, this is Paul. So just to clarify, you're asking about the second settlement payment that's coming up specifically?

Michael Lonegan

Yes.

Paul Ito

Okay. Yes. So let me just start where we're at and what our plan is as we get to the April settlement payment date. So as I said on the call, we've already prepaid $80 million at a discount. And so that reduces the remaining amount to about $400 million.

We expect to obtain additional proceeds to do a prepayment from our remaining ASB stake. And we also expect additional insurance proceeds. And so roughly speaking, that's a little bit over $100 million, and that would allow us to prepay to further reduce the amount to $300 million or slightly less.

In terms of the remaining $300 million and how we would finance that, our plans remain consistent with what we said before. It will be debt or convertible debt. We're looking at both. Obviously, we're watching market conditions. And we're going to look at the trade-offs between the two and then make a decision at the appropriate moment, but that's our current plan.

Michael Lonegan

And then I was wondering if you could talk about the status of the liability cap process, when we could expect updates on that? And could this potentially go through the -- in the next legislative session in 2027?

Scott W. Seu

Mike, this is Scott. So the process is still being overseen by the Public Utilities Commission. This is a formal rule-making process. They are in the midst of that. They have spent time seeking inputs from various stakeholders, including our company, and that's where it sits. The next step is really up to the PUC in terms of when they would be able to issue a set of draft rules for consideration. But obviously, that would be sometime in 2027.

Michael Lonegan

Okay. And then lastly for me, there are some tweaks to the 2027 and 2028 capital program. I was just wondering if you could walk us through what changed there? And then also, I know, like -- you've said the majority of your capital program will be funded with prior debt issuances and cash flow. Just -- do you expect to use your ATM much as well?

Paul Ito

So maybe I'll start with the ATM. Currently, based on where our stock price is, there's no plans to utilize that. As mentioned, currently, we don't pay a dividend. And so we would expect to fund largely our CapEx program through internally generated earnings, but also supplement that with debt.

In terms of changes to the CapEx program, I don't believe there was a significant change. Sometimes there's a shifting of EPRM timing of the capital. But generally, it remains largely consistent, I believe, with last quarter.

Operator

There are no further questions at this time. I will now turn the call back to Scott Seu for closing remarks.

Scott W. Seu

Thank you. In summary, we continue to make good progress building on our record of strong execution. Our entire team is dedicated to best serving our customers, our community and our shareholders.

I'm happy to end this call by welcoming our newest Board member, Peter Ho, to our HEI and Hawaiian Electric Ohana. Peter recently retired as Chairman and CEO of the Bank of Hawaii, a position he held for 16 years. He brings a wealth of knowledge and experience in finance, customer service, the Hawaii community and public company leadership to our Board, and I look forward to working with him. Mahalo for attending our earnings call today. Take care.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.