Hawaiian Electric Industries Inc. (NYSE:HE) Q4 2019 Earnings Conference Call - Final Transcript

Feb 13, 2020 • 04:15 pm ET


Hawaiian Electric Industries Inc. (NYSE:HE) Q4 2019 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Fourth Quarter 2019 Hawaiian Electric Industries, Inc. Earnings Conference call and Webcast. [Operator Instructions] I would now like to turn the conference over to Ms. Julie Smolinski, Director of Investor Relations and Strategic Planning. Please go ahead.

Julie R. Smolinski

Thank you, Elisa, and welcome, everyone, to Hawaiian Electric Industries Fourth Quarter and Full year 2019 Earnings Conference Call. Joining me today are Connie Lau, HEI President and Chief Executive Officer; Greg Hazelton, HEI Executive Vice President and Chief Financial Officer; Alan Oshima, Hawaiian Electric President and Chief Executive Officer; Scott Seu, incoming Hawaiian Electric President and Chief Executive Officer; and Rich Wacker, American Savings Bank President and Chief Executive Officer; as well as other members of the senior management. Connie will provide an overview followed by Greg, who will update you on Hawaii's economy, our results for the fourth quarter and full year and our outlook for 2020. Then we'll conclude with questions and answers. During today's call, we'll be using non-GAAP financial measures to describe our operating performance.

Our press release and webcast presentation are posted on HEI's Investor Relations website and contain reconciliations of these measures to the equivalent GAAP measures. Forward-looking statements will also be made on today's call. Factors that could cause actual results to differ materially from expectations can be found in our webcast slides, our filings with the SEC and on the HEI website.

And I'll now ask our CEO, Connie Lau, to begin with an overview.

Constance Hee Lau

Thank you, Julie, and aloha to everyone. 2019 was a year of solid achievement for our companies, from financial to operational to environmental results. We achieved solid earnings at both our utility and bank and grew consolidated earnings 8%. We strengthened our consolidated return on equity to 9.8% and improved earned ROE at the utility and maintained a strong ROE at the bank. Our utility continued to deliver on key priorities of its five-year plan. We're especially proud that Hawaiian Electric and the state of Hawaii were recognized for their leadership in transforming our state to a clean energy, carbon-neutral economy. Our state's leadership and innovation in clean energy transformation was highlighted in recent reports by the Rocky Mountain Institute and Public Utilities fortnightly. And Hawaiian Electric was named 2019 Utility of the Year by Utility Dive. American Savings Bank also performed well, delivering 5.7% loan growth and maintaining a net interest margin above its peers. Excluding a onetime net gain on sale of properties, the bank exited as it moved to its new campus. Bank earnings were up slightly from 2018 despite lower-than-expected interest rates.

Our Pacific Current team continued to focus on optimizing its existing project portfolio and pursuing additional sustainable investment opportunities. With our continued financial performance and our confidence in our future prospects, our Board approved a second consecutive annual increase in the dividend, raising the quarterly dividend per share from $0.32 to $0.33 or $1.32 annually. At Hawaiian Electric, our 2019 accomplishments reflect goals and initiatives from our 2015