Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 2025, for Hawaiian Electric Industries, Inc. (HEI) and its principal subsidiary, Hawaiian Electric Company, Inc. (Hawaiian Electric). HEI is a holding company primarily engaged in the electric utility business through its regulated subsidiaries (Hawaiian Electric, Hawaii Electric Light, and Maui Electric), which serve approximately 95% of Hawaii's population. In late 2024, HEI sold its banking subsidiary, American Savings Bank (ASB), and has since focused on divesting non-utility assets (Pacific Current) to streamline operations and address financial obligations stemming from the August 2023 Maui windstorm and wildfires.
Key Financial Metrics
| Metric (in millions) | 2025 | 2024 |
|---|---|---|
| Total Revenues | $3,087 | $3,220 |
| Operating Income (Loss) | $235 | $(1,707) |
| Net Income (Loss) from Continuing Ops | $123 | $(1,323) |
| Net Income (Loss) for Common Stock | $123 | $(1,426) |
| EPS (Basic) | $0.71 | $(11.23) |
| Long-Term Debt | $2,410 | $2,800 |
| Available Liquidity | $1,572 | N/A |
Note: 2024 results were significantly impacted by a $1.875 billion provision for wildfire tort-related claims. 2025 results reflect a return to profitability driven by the absence of this non-recurring charge and lower fuel costs.
Material Changes vs. Prior Period
- Profitability Recovery: HEI returned to net income of $123 million in 2025, a stark contrast to the $1.426 billion net loss in 2024. The 2024 loss was primarily driven by the accrual of estimated liabilities for the Maui wildfire settlement.
- Revenue Decline: Total revenues decreased 4% to $3.087 billion. This was largely due to lower fuel oil prices (down ~14% year-over-year) and lower purchased power prices, partially offset by a 2.5% increase in kWh sales volume.
- Asset Divestitures: HEI completed the sale of its bank subsidiary (ASB) in December 2024. In 2025, HEI sold its Hamakua Energy subsidiary (March 2025) and its solar and battery energy storage system assets (August 2025) as part of a strategy to divest non-utility assets.
- Debt Reduction: Long-term debt decreased by approximately $390 million to $2.41 billion, aided by the repayment of senior notes using proceeds from the ASB sale.
Guidance, Outlook, and Risks
- Wildfire Settlement Obligations: HEI and Hawaiian Electric have agreed to a total contribution of approximately $1.99 billion to settle tort-related claims from the Maui wildfires. Payments are structured in four equal annual installments of approximately $479 million, with the first payment expected in early 2026. The company has raised sufficient capital for the first installment but is working on financing plans for the remaining balance.
- Credit Ratings: Credit ratings remain below investment grade (e.g., S&P B+, Moody's Ba3, Fitch B+), though outlooks are generally positive. This limits access to lower-cost capital and increases borrowing costs.
- Regulatory Environment: The company is navigating a Performance-Based Regulation (PBR) framework. A key focus is the re-basing of target revenues for the next multi-year rate period, with a collaborative alternative proposal under review by the Public Utilities Commission (PUC).
- Renewable Energy Transition: Progress toward the 70% carbon emission reduction goal by 2030 has slowed due to supply chain disruptions, inflation, and federal policy changes (e.g., repeal of investment tax credits). The company expects to meet the 2030 Renewable Portfolio Standard (RPS) goals but anticipates the carbon reduction target will be achieved later than originally planned.
- Going Concern: Management believes current liquidity ($1.572 billion available) and financing plans alleviate substantial doubt about the company's ability to continue as a going concern, though uncertainty remains regarding the ability to raise capital for remaining settlement payments.
Investor Verification Checklist
- Settlement Finality: Verify the final court approval status of the Maui wildfire Class Settlement Agreement and the resolution of insurer subrogation claims, which are conditions precedent to the first payment.
- Financing Plan Execution: Monitor the company's progress in securing financing for the remaining ~$1.5 billion of wildfire settlement payments, as failure to do so could trigger strategic alternatives including bankruptcy.
- Regulatory Re-basing: Track the PUC's decision on the alternative rate re-basing proposal or the subsequent rate case, which will determine future revenue recovery capabilities.
- Credit Rating Trajectory: Watch for credit rating upgrades, which are critical for reducing the cost of capital and accessing commercial paper markets.
- Dividend Policy: Confirm the status of HEI's common stock dividends, which have been suspended since August 2023 to preserve liquidity for settlement obligations.