Hawaiian Electric Industries Inc. (NYSE:HE) Q4 2014 Earnings Conference Call - Final Transcript

Feb 12, 2015 • 05:00 pm ET


Hawaiian Electric Industries Inc. (NYSE:HE) Q4 2014 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the Q4 2014 Hawaiian Electric Industries, Inc. Earnings Conference Call. My name is Alex, and I will be your operator for today. [Operator Instructions]

I would now like to turn the conference over to Clifford Chen, Manager of Investor Relations and Strategic Planning. Please proceed, sir.

Clifford Chen

Thank you, Alex, and welcome to Hawaiian Electric Industries 2014 Fourth Quarter and Year-end Earnings Conference Call. Joining me this morning are Connie Lau, HEI President and Chief Executive Officer; Jim Ajello, HEI Executive Vice President and Chief Financial Officer; Alan Oshima, Hawaiian Electric Company President and Chief Executive Officer as well as other members of senior management.

Connie will provide an overview of the year and recent company updates. Jim will then update you on Hawaii's economy, our results for the fourth quarter and year-end and will provide 2015 earnings guidance. They will conclude with questions and answers.

In today's presentation, management will be using non-GAAP financial measures to describe the company's operating performance. Our press release and webcast presentation materials, which are posted on our Investor Relations website, contain additional disclosures regarding these non-GAAP measures, including reconciliations of those measures to the equivalent GAAP measures.

Forward-looking statements will also be made on today's call. Actual results could differ materially from what is described in those statements. Please reference the forward-looking statements disclosure accompanying the webcast slides, which provides additional information on important factors that could cause results to differ. The company undertakes no obligation to publicly update or revise any forward-looking statements, including EPS guidance, whether as a result of new information, future events or otherwise.

I'll now turn the call over to our CEO, Connie Lau.

Constance Hee Lau

Thank you, Cliff, and hello to everyone. 2014 was an eventful year for us, as we filed comprehensive energy transformation plans for Hawaii and announced a merger with NextEra energy. Our operating companies delivered solid financial results with earnings in line with our 2014 EPS guidance. Earned ROE was 9.6% on a GAAP basis and 9.8%, excluding merger-related expenses.

At the utility, we continue to invest in the modernization and improvement of our electric grid, as we integrated more renewable energy. Even as recent oil price decreases have brought our customers bill relief, we remain focused on further reducing and stabilizing costs for our customers as well as continuing to bring cleaner sources of energy to Hawaii. And similar to Hawaiian Electric's June abbreviated rate case filing for Oahu, we filed an abbreviated rate case for Maui Electric at the end of December in which we offered to forego the opportunity to request additional base revenue.

Our bank delivered solid financial results in 2014 in a challenging regulatory and interest rate environment. We produced strong loan growth of 6.8% while improving credit quality and maintaining healthy capital level. And finally, we are making good progress on our utility merger and bank spinoff.

Our pending combination with NextEra Energy brings together two industry leaders in clean energy. With NextEra