HE 10-K & 10-Q changes, risk factors and insider trading

Potential lossesLosses resulting from the Maui windstorm and wildfires coulddid and may continue to have a material adverse effect on HEI’s and Hawaiian Electric’s financial condition, liquidity, cash flows and results of operations. On August 8, 2023, a number of brush fires in the West Maui (Lahaina) and Upcountry Maui areas caused widespread property damage, including damage to property of the Utilities, and 102 confirmed fatalities in Lahaina (the Maui windstorm and wildfires). The Maui Department of Fire and Public Safety (MFD) and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) reports classified the cause of the fire as “accidental.”

HEI’s and Hawaiian Electric’s access to capitallower markets and othercost sources of debt and equity financings in a timely manner and on acceptable termscapital will continue to be negatively impacted as a result of the downgrades in their debt credit ratings to below investment grade. In August 2023, HEI and Hawaiian Electric received multiple downgrades to their debt, including to ratings below investment grade, by Fitch, Moody’s and S&P. As of February 14,17, 2025,2026, the Fitch, Moody’s and S&P ratings of HEI and Hawaiian Electric were as follows:

Unless and until these debt ratings are upgraded to investment grade, the Company will continue to have restricted access to capitallower markets and othercost sources of debt and equity financings, if at all, in a timely manner and on acceptable terms.capital. Recent projects, such as, wildfire mitigation plan, grid modernization, reliability and resilience all require significant capital expenditures to implement. The Company may not be able to obtain the necessary financing to achieve its business objectives as a result of the downgrades. Accordingly, the Company’s financial condition, liquidity, cash flows and results of operations may be adversely impacted if debt credit ratings are maintained at below investment grade for an extended period of time.

Extreme weather events and other natural disasters, particularly those exacerbated by evolving climate changedynamics such as the Maui windstorm and wildfires, could materially affect Hawaiian Electric’s assets and infrastructure, particularly if such infrastructure is damaged or is found to have contributed to other catastrophic events such as a wildfire. Extreme weather-related incidents and other natural disasters, including volcanic eruptions, mudslides, hurricanes, tsunamis and other storms, can interfere with the generation and transmission of electricity, and can seriously damage the infrastructure necessary to deliver electricity to customers. Damage to Hawaiian Electric’s infrastructure can also cause or contribute to additional loss through events such as wildfires. These risks are increasing, as evolving climate changedynamics hashave exacerbated some of the conditions that lead to these extreme weather events and natural disasters. Such an event can result in lost revenue and increased expenses for the Utilities, but it also can result in regulatory penalties and disallowances if Hawaiian Electric is unable to restore power on a timely basis. Also, an extreme event can lead to significant claims for damages, including for loss of life and property, and has been the case with the Maui windstorm and wildfires. Therefore, these events could have a material adverse effect on the Company’s business, reputation, financial condition and results of operations.

Holding Company Risk—HEI is a holding company that derives its income from its principal operating subsidiary, Hawaiian Electric, and depends on the ability of Hawaiian Electric to pay dividends or make other distributions to HEI and on its own ability to raise capital. HEI is a legal entity separate and distinct from its subsidiaries. As a holding company with no significant operations of its own,company, HEI’s cash flows and consequent ability to service its obligations and pay dividends on its common stock is dependent upon its receipt of dividends or other distributions from Hawaiian Electric and its ability to issue common stock or other equity securities and to incur additional debt. A material reduction or delay in dividends or other distributions by Hawaiian Electric for an extended period of time, such as a continuation or expansion of the reduction in dividends that HEI currently is experiencing due to the Maui windstorm and wildfires, could have a material adverse effect on the Company’s business, financial condition and results of operations. The ability of HEI’sHawaiian subsidiariesElectric to pay dividends or make other distributions to HEI, in turn, is subject to the risks associated with their operations and to contractual and regulatory restrictions, including:

•the provisions of an HEI agreement with the PUC (PUC Agreement), which could limit the ability of HEI’s principal electric public utility subsidiary, Hawaiian Electric, to pay dividends to HEI in the event that the consolidated common stock equity of the Utilities falls below 35% of total capitalization of the electric utilities.Utilities. As of December 31, 2024,2025, the consolidated common stock equity of HEI’s electric utility subsidiaries was 33%42% of their total capitalization based on the current definition under the PUC Agreement and, as a result, the Utilities are restricted in cash payment of their dividend to HEI at this time (see Note 15 of the Consolidated Financial Statements.); and

•the provisions of preferred stock resolutions and debt instruments of HEI and its subsidiaries.

Credit and Capital Market Risk—The Company, and its lowered credit rating, is subject to risks associated with the Hawaii economy, including catastrophic events such as the Maui windstorm and wildfirewildfires (in the aggregate and on an individual island basis), volatile U.S. capital markets and changes in the interest rate and credit market environment that have or could result in higher retirement benefit plan funding requirements and restrictions on the ability of HEI or its subsidiaries to borrow money or issue securities. The two largest components of Hawaii’s economy are tourism and the federal government (including the military). Because the core businesses of HEI’s subsidiaries are providing local public electric utility services (through Hawaiian Electric and its subsidiaries), the Company’s operating results are significantly influenced by: Hawaii’s economy, which in turn is influenced by economic conditions in the mainland U.S. (particularly California) and Asia (particularly Japan) as a result of the impact of those conditions on tourism; by the impact of interest rates on the construction and real estate industries and by the impact of federal government spending in Hawaii, which can be affected by world conditions; and, from time to time, the expiration of federal government appropriations bills. In addition, the Hawaii economy could be directly or indirectly affected by implications and potential impacts of U.S. and foreign capital and credit market conditions and federal, state and international responses to those conditions and the potential impacts of global and local developments (including economic conditions and uncertainties; unrest, terrorist acts, wars (such as the Russia-Ukraine war and the Israel-Hamas war), conflicts, political protests, deadly virus epidemic, pandemics, or other crisis; the effects of changes that have or may occur in U.S. policy, such as with respect to immigration and trade).

HEI and the Utilities are also exposed to interest rate risk primarily due to their periodic borrowing requirements, the discount rate used to determine pension funding requirements and the possible effect of interest rates on the electric utilities’Utilities’ rates of return. Interest rates are sensitive to many factors, including general economic conditions and the policies of government and regulatory authorities. HEI cannot predict future changes in interest rates, nor be certain that interest rate risk management strategies it or its subsidiaries have implemented will be successful in managing interest rate risk.

There may be future conditions or events that raise substantial doubt about our ability to continue as a going concern, and it is possible that any plan developed to alleviate such doubt may be unsuccessful. In addition, any capital raised may result in dilution to our current shareholders. For the year ended December 31, 2024, the Company incurred losses from continuing operations of approximately $1.32 billion. For the year ended December 31, 2024, the Utilities incurred net losses of approximately $1.23 billion. The net losses for the year ended December 31, 2024, were primarily due to the accruals of estimated wildfire liabilities in the second and third quarters of 2024, totaling approximately $1.92 billion related to the Maui windstorm and wildfire tort-related legal claims. The Company previously disclosed in its Quarterly Report on Form 10-Q for the quarter ending June 30, 2024, that based on its financial and liquidity condition, and because it had not yet implemented a capital financing plan to address proposed wildfire settlement payments, there was substantial doubt about HEI’s and the Utilities’ ability to continue as a going concern. In the third quarter of 2024, the Company was able to alleviate the conditions that caused the substantial doubt about HEI’s and the Utilities’ ability to continue as a going concern.

Management believes the Company’s cash and cash equivalents amount of $751$502 million and GLST1’s restricted cash amount of $479 million, both as of December 31, 2024,2025, the available capacity on Hawaiian Electric’s asset-based lending facility (ABL Facility) (see Note 6 of the Consolidated Financial Statements included herein), additional liquidity under HEI’s recently registered ATMat-the-market offering program as well as expenditure reduction efforts effectively alleviate any conditions that may cause substantial doubt regarding HEI’s and Utilities’ ability to continue as a going concern. The Company has adequate cash to meet its financial obligations and sustain operations in the short term, including available sufficient liquidity to fund the first installment of the settlement of wildfire tort claims (expected to be made no earliersooner than theearly fourth quarter of 20252026) and its other cash obligations for the next 12 months following the issuance of its financial statements. The plans that have been implemented have mitigated the conditions that previously caused the substantial doubt about HEI’s and the Utilities’ ability to continue as a going concern as of the date of filing their 2024 second quarter financial statements. Although the Company has raised sufficient cash to pay the first installment of the settlement of wildfire tort claims, the Company is currently working with its financial advisors on a financing plan to raise the additional capital necessary to fund the remaining settlement of wildfire tort claims. While management believes the Company will be able to raise the necessary capital, there is no assurance that management’s plans will be successful. If the financing plans are unsuccessful, the Company may need to consider other strategic alternatives.

The recurrence of any substantial doubt about HEI’s and the Utilities’ ability to continue as a going concern may affect the price of our common stock, may impact our relationship with third parties with whom wethe doCompany does business, including our vendors, lenders and employees, may impact our ability to raise additional capital or refinance existing debt and may impact our ability to comply, going forward, with certain covenants in our debt agreements and/or satisfy conditions to draw thereunder, which could significantly and materially restrict our operations.

If a court-approved definitive settlement agreement to resolve Maui windstorm and wildfire tort-related legal claims is not obtained, or if financing for settlement payments is not available, wethe Company may need to consider other alternatives for addressing the outstanding legal claims or settlement payments, and such alternatives could adversely affect our financial results or other factors impacting our finances, operations or stock valuation. As described more fully in Note 2 of the Consolidated Financial Statements included herein, the Company entered into Settlement Agreements effective November 1, 2024, to resolve all Maui windstorm and wildfire tort-related legal claims, including all claims among the defendants. Such Settlement Agreements are subject to court approval, and other conditions including resolution of the claims of the insurance companies that have paid claims for property loss and other damages. If all conditions of the Settlement Agreements are satisfied, the Company has agreed to make substantial payments to settle all Maui windstorm and wildfire tort-related legal claims. As described more fully in Note 2 of the Consolidated Financial Statements included herein, if the conditions of the Settlement Agreements are not satisfied or the agreements are otherwise terminated, the Company intends to vigorously defend against the litigation. There is no assurance that the Company will be successful in the defense of the litigation or that insurance proceeds will be available to fund any potential settlements, judgments, or costs associated with the litigation.

If the Company’s financing plans are unsuccessful, wethe Company may need to consider other strategic alternatives, including delaying strategic initiatives, selling assets, or other strategic measures including, without limitation, obtaining relief under the U.S. Bankruptcy Code. Such alternatives could adversely affect our financial results or other factors impacting our finances, operations or stock valuation.

YouShareholders of HEI’s common stock may experience future dilution as a result of future equity offerings. In order to raise additional capital, including capital necessary to fund litigation settlement expenses, the Company may in the future offer additional shares of HEI’s Common Stock or other securities convertible into or exchangeable for HEI Common Stock at prices that may not be the same as the current market price per share, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which the Company may sell additional shares of HEI Common Stock, or securities convertible or exchangeable into HEI Common Stock, in future transactions may be higher or lower than the current market price per share of HEI Common Stock.

In addition, any future sales of a substantial number of shares of HEI Common Stock in the public market, or the perception that such sales may occur, could adversely affect the price of HEI Common Stock. WeThe Company cannot predict the effect, if any, that market sales of those shares of Common Stock, or the perception that those shares may be sold, will have on the market price of HEI Common Stock. Further, wethe Company may not have the ability to raise the amount of capital necessary on reasonable terms, or at all, to fund our contribution to the Maui wildfire tort litigation settlement, and uncertainties about the Company’s access to capital could have a material adverse effect on the market price of HEI Common Stock.

The Company does not expect to pay any dividends on HEI Common Stock in the foreseeable future. The Company does not currently intend to pay dividends on HEI Common Stock and currently intends to retain future earnings, if any, to fund the development and growth of the Company’s business.business and to fund future settlement payments of the tort-related legal claims in the litigation arising out of the Maui windstorm and wildfires. In addition, the terms of certain existing and any future debt agreements may preclude the Company from paying dividends.dividends on HEI Common Stock. As a result, capital appreciation, if any, of HEI Common Stock may be your sole source of gain for the foreseeable future.

•The Utilities face competition from IPPs; customer self-generation, with or without cogeneration; customer energy storage; wheeling of renewable energy under Senate Bill 589, now known as Act 266, and the potential formation of community-based, cooperative ownership or municipality structures for electrical service on all islands it serves. With the exception of certain identified projects, the Utilities are required to use competitive bidding to acquire a future generation resource unless the PUC finds competitive bidding to be unsuitable. This means that unless exempt, proposed company-owned generation projects must be bid into a request for proposals which is open to IPPs, and be selected under a competitive bidding process. The PUC sets policies for distributed generation interconnection agreements and standby rates. The results of competitive bidding, competition from IPPs, customer self-generation, wheeling, and potential cooperative ownership or municipality structures for electric utility service, and the rate at which technological developments facilitating nonutility generation of electricity, combined heat and power technology, off-grid microgrids, and customer energy storage may render the operations of the Utilities less competitive or outdated and adversely affect the Utilities and the results of their operations.

Cybersecurity and Physical Security Risk—The Company is subject toCompany’s information technology systems and operationaloperations systemcould failures,be networkimpacted disruptions,by a cyber attacksincident, andcybersecurity breachesbreach, inor dataphysical securityattack that could materially and adversely affect its businesses and reputation. The Company and its subsidiaries rely on information technology systems, some of which are managed or hosted by third party service providers, to manage its business data, communications, and other business processes. Such information technology systems are vulnerable to cyberattacks or other security incidents, which could result in unauthorized access to confidential data, ransomware demands or disruptions to operations. In addition, there is increasing cybersecurity risk associated with the broad adoption of a remote working environment. If the Company is unable to prevent or adequately respond to and resolve an incident, it may have a material impact on the Company’s business, financial condition, results of operations and reputation.

Utilities. The Utilities rely on evolving and complex operational systems and infrastructure and information systems, networks and other technologies, including artificial intelligence and machine learning, which are interconnected with the systems and network infrastructure owned by third parties to support a variety of business processes and activities, including procurement and supply chain, invoicing and collection of payments, customer relationship management, human resource management, the acquisition, generation and delivery of electrical service to customers, and to process financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting and legal and tax requirements. The Utilities use their systems and infrastructure to create, collect, store, and process sensitive information, including personal information regarding customers, employees and their dependents, retirees, and other individuals. Their systems are vulnerable to disability, failures or unauthorized access caused by natural disasters, physical attacks, cybersecurity incidents, security breaches, user error, unintentional defects created by system changes, military or terrorist actions, nation-state threat actors, criminal organizations, power or communication failures or similar events. Any such failure could have a material adverse impact on the Utilities’ ability to process transactions and provide service, as well the Utilities’ financial condition and results of operations. Physical attacks targeting physical assets or personnel could cause damage, disrupt operations, or cause injuries. Any failure, interruption, or decrease in the functionality of the Utility’s operational networks could cause harm to the public or employees, significantly disrupt operations, negatively impact the Utility’s ability to operate in a safe and efficient manner, and damage the Utility’s assets or operations or those of third parties. Further, a data breach involving theft, improper disclosure, or other unauthorized access to or acquisition of confidential information could subject the Utilities to penalties for violation of applicable privacy laws, claims by third parties, and enforcement actions by government agencies. A data breach could also reduce the value of proprietary information, and harm the reputation of the Utilities.

Private and public entities, such as the North American Electric Reliability Corporation, and the U.S. federal government, including the Departments of Defense, Homeland Security and Energy, and the White House, have noted that cyberattacks targeting utility systems are increasing in sophistication, magnitude, and frequency. The Utilities’ systems have been, and will likely continue to be, a target of attacks. Further, the Utilities’ operational networks may be subject to unforeseen operational/cybersecurity risks due to the reliance on legacy operational components or modernizing and interconnecting existing infrastructure with new technologies and control systems, including those owned by third parties, such as independent power producers, distributed energy resource aggregators and customers. Although the Utilities have not experienced a material cybersecurity or physical security breach to date, such incidents may occur and may have a material adverse effect on the Utilities and the Company in the future. The Utilities continue to make investments in their cybersecurity program,and physical security programs, including personnel, technologies, cyber insurance and training of Utilities personnel; however, there can be no assurance that these systems or their expected functionality will be implemented, maintained, or expanded effectively; nor can security measures completely eliminate the possibility of a cybersecurity breach.breach or physical attack. The Utilities maintain cyber liability insurance that covers certain damages caused by cyber incidents. However, there is no guarantee that adequate insurance will continue to be available at rates the Utilities believe are reasonable or that the costs of responding toto, and recovering fromfrom, a cyber incident will be covered by insurance or recoverable in rates. If the Utilities’ operational technologies or networks were to malfunction or fail or cybersecurity or other security measures were to be breached, the Utilities could suffer financial loss, business disruptions, liability to customers, regulatory intervention or damage to their reputations.

Related to damages and costs incurred as a result of the Maui windstorm and wildfires, the Company has property insurance with a total policy limit of $500 million, subject to a $1 million retention, for wildfire damages related to Utility-owned non-generating assets, including overhead transmission and distribution assets within 1,000 feet of such assets. The Company also has $165 million of excess liability insurance and $25 million of miscellaneous professional liability insurance for third party claims, including claims related to wildfires, with a retention of $0.3 million and $0.1 million, respectively, and $145 million directors and officers liability insurance to cover claims related to shareholder and derivative lawsuits, with a retention of $1.0 million. The aggregate damages and costs associated with the Maui windstorm and wildfires could significantly exceed the Company’s policy limits.

Environmental Regulation—Increased federal and state environmental regulation will require an increasing commitment of resources and funds and could result in construction delays or penalties and fines for non-compliance. HEI and its subsidiaries are subject to federal, state and local environmental laws and regulations relating to air quality, water quality, hazardous substances, waste management, natural resources and health and safety, which regulate, among other matters, the operation of existing facilities, the construction and operation of new facilities and the proper cleanup and disposal of hazardous and toxic wastes and substances. These laws and regulations could result in increased capital, operating, and other costs. HEI or its subsidiaries are currently involved in investigatory or remedial actions at current, former or third-party sites and there is no assurance that the Company will not incur material costs relating to these sites. In addition, compliance with these legal requirements requires the Utilities to commit significant resources and funds toward, among other things, environmental monitoring, installation of pollution control equipment andequipment, payment of emission fees.fees and natural resource minimization and mitigation costs. These laws and regulations, among other things, require that certain environmental permits be obtained in order to construct or operate certain facilities, and obtaining such permits can entail significant expense and cause substantial construction delays. Also, these laws and regulations may be amended from time to time, including amendments that increase the burden and cost of compliance. For example, emission and/or discharge limits may be tightened, more extensive permitting requirements may be imposed and additional substances may become regulated. In addition, significant regulatory uncertainty exists regarding the impact of federal or state greenhouse gas emission limits and reductions.

Regulatory Risk—Actions of the PUC are outside the control of the Utilities and could result in inadequate or untimely rate increases, rate reductions or refunds or unanticipated delays, expenses or writedowns in connection with the construction of new projects. The rates the Utilities are allowed to charge for their services and the timeliness of permitted rate increases are among the most important items influencing the Utilities’ results of operations, financial condition and liquidity. The PUC has broad discretion over the rates that the Utilities charge their customers. On December 23, 2020, as part of the D&O establishing the PBR Framework, the PUC established a five-year Multi-year Rate Period (MRP) during which there will be no general rate cases. In the fourth year of the MRP, the PUC willbegan comprehensivelyits comprehensive review of the PBR Framework to determine if any modifications or revisions are appropriate. The PUCUtilities isare currently evaluatingexploring a collaborative non-rate case re-basing proposal under the Utilities’PBR proposalFramework as an alternative to rebasea rate case process. This alternative could be implemented by January 2027. If a satisfactory non-rate case re-basing alternative cannot be achieved, the ratesUtilities would file a rate case in the formsecond half of a2026, tri-company rate case withutilizing a 20262027 test year.

To improve the timing and certainty of thecost recovery of their costs,recovery, the Utilities have proposed and/or received approval of various cost recovery mechanisms, including an ECRC (which includes a PUC-ordered 98%/2% risk-sharing split between customers and the Utilities for fossil fuel price variations from baseline prices, with a current annual aggregate exposure cap of +/- $3.7 million), a PPAC, and pension and OPEB tracking mechanisms, as well as a decoupling mechanism, an exceptional project recovery mechanism (EPRM) (formerly Major Project Interim Recovery (MPIR) adjustment mechanism), and a Renewable Energy Infrastructure Program surcharge. AAny change in,modification or the elimination of, any of these cost recovery mechanisms,mechanisms could have a material adverse effect on the Utilities. See “Regulatory mechanisms” in Electric Utility’sutility’s Business.

Under the PBR Framework, the Utilities’ annual revenue adjustment (ARA) includes a customer dividend consisting of a negative adjustment of 0.22% compounded annually and a flow through of the “pre-PBR” savings commitment from the management audit recommendations developed in the 2020 test year rate case. The ability of the Utilities to recover increasing costs and earn a reasonable return on capital investments not covered by the ARA or not achieving the customer dividend and cost savings commitment could have a material adverse effect on the Utilities. UnderIn addition, several existing Performance Incentive Mechanisms (PIMs) remain in effect. The PUC has indicated that in the next phase of PBR Framework,review, it will examine modifications to the existing PIMs continue,I-factor and the PUCcustomer establisheddividend newprovisions PIMsof the ARA, the earnings sharing mechanism, revenue opportunities from the X-factor and isthe workingEPRM onguidelines, additionaland PIMsthe withPIM stakeholders.portfolio. The assessment of penalties for not achieving performance goals or the failure to achieve PIMs rewards could affect the Utilities’ ability to achieve their allowed ROACEs and also have a material adverse effect on the Utilities.

Based on the current operations of the Utilities and regulatory framework, including the impact of the approved PBR Framework, the Utilities continue to follow regulatory accounting under Accounting Standards Codification (ASC) 980. Continued accounting in this manner requires that certain criteria relating to the recoverability of such costs through rates be met, including achieved financial results that support the recovery of costs. If events or circumstances should change, such that the criteria are no longer satisfied, the Utilities expect that their regulatory assets (amounting to $227$308 million as of December 31, 20242025), net of regulatory liabilities (amounting to $1,218$1,444 million as of December 31, 20242025), would be charged to the statement of income in the period of discontinuance. See “Performance-based regulation framework” in Note 4 of the Consolidated Financial Statements.

The Utilities could be required to refund to their customers,refund, with interest, any revenues thatcollected havefrom been or may be receivedcustomers under interim rate orders in their rate case proceedings and other proceedings,proceedings if and to the extent theythat exceed the amounts allowedapproved in final orders.

Many public utility projects require PUC approval and various permits (e.g., environmental and land use permits) from other governmental agencies. Difficulties in obtaining, or the inability to obtain, the necessary approvals or permits, or any adverse decision or policy made or adopted, or any prolonged delay in rendering a decision, by an agency with respect to such approvals and permits, can result in significantly increasedincrease project costs or evenlead cancellationto ofproject projects.cancellation. In the event a project does not proceed, or if the PUC disallows cost recovery for all or part of a project, or if project costs exceed caps imposed by the PUC in its approval of the project, project costs may need to be written off in amounts that could result in significant reductions in Hawaiian Electric’s consolidated net income. In addition, as the Utilities may retire fossil fuel generating units before thefully full recoveryrecovering of its investment,investment ifand the PUC disallows cost recovery of the undepreciated cost,costs, the resulting write-offs of such amounts could have an adverse impact on the Utilities’ results of operations.

Weather Conditions Risk—Electric utility operations are significantly influenced by weather conditions and natural disasters. The Utilities’ results of operations can be affected by the weather and natural disasters. Weather conditions, particularly temperature and humidity, directly impact the demand for electricity. Additionally, severe weather and natural disasters may become more intense and/or frequent because of evolving global climate changes.dynamics. Recent natural disasters such as the Kilauea eruption in 2018, Mauna Loa eruption in 2022, and the Maui windstorm and wildfires in 2023, have disrupted electric utility operations. These types of events can cause outages, property damage and result in significant additional expenses that may not always be recoverable.

Evolving Climate ChangeDynamics Risk—Electric utility operations may be significantly influenced by evolving climate change.dynamics. While the timing, extent and ultimate effects of evolving climate changedynamics cannot be determined with any certainty, climatesuch changedynamics isare predicted to cause sea level rise, which could impact coastal and low-lying areas where much of the Utilities’ electric infrastructure is located. Potential consequences include erosion of beaches, saltwater intrusion into aquifers and surface ecosystems, higher water tables and increased flooding and storm damage due to heavy rainfall. ClimateEvolving changeclimate dynamics may also intensify extreme weather conditions including floods, hurricanes, heat waveswaves, and droughtdroughts which could increase wildfire risk. These factors along with changes in sea levels, water availability and water quality have the potential to materially and adversely affect the Utilities’ results of operations, financial condition, and liquidity. For example, severe weather and its related impacts could cause significant harm to the Utilities’ physical facilities.

Third Party Performance Risk—Electric utility operations depend heavily on third-party suppliers of fuel and purchased power. The Utilities rely on fuel suppliers and shippers, and IPPs to deliver fuel and power, respectively, in accordance with contractual agreements. Approximately 75% of the net energy generated or purchased by the Utilities in 20242025 was generated from the burning of fossil fuel oil, and purchases of power by the Utilities provided about 40%41% of their total net energy generated and purchased for the same period. Failure or delay by fuel suppliers and shippers to provide fuel pursuant to existing contracts, or failure by a major IPP to deliver the firm capacityas anticipated in its PPA, could disrupt the ability of the Utilities to deliver electricity, affect the Utilities’ maintenance schedules that could affect future reliability and require the Utilities to incur additional expenses to meet the needs of their customers that may not be recoverable. In addition, as the 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. Also, as these contractual agreements end, the Utilities may not be able to purchase fuel and power on terms equivalent to the current contractual agreements.

The Energy Reserve Margin, the planning criteria used to determine generation adequacy, is the percentage which the system generation capacity must exceed the system load in each hour. The Utilities’ Energy Reserve Margin is satisfied from 20252026 through 20292030 with the addition of planned generation and storage resource additions for all islands except for Hawaii Island and Lanai, which forecasts are near or slightly below target levelslevels. The One Big Beautiful Act signed into law by lessPresident thanTrump oneon percentJuly 4, 2025, impacts the ability of recently selected and new wind and solar projects to qualify for 2025.federal tax credits. Any loss in renewable energy tax credits will likely result in higher prices for new renewable projects, which rely on such incentives to provide clean, affordable energy. The Utilities have plans to address these issues through managing maintenance schedules of existing generations, and if necessary, may request for voluntary customer conservation during periods of high power demands. The environment for resource planning has increased in complexity and uncertainty and the Utilities will continue using a portfolio approach to meet its obligation to serve. This includes increased renewable energy, energy storage, and other potential options, both supply side and customer programs. If the Utilities are unable to meet customer energy requirements, it could negatively impact the satisfaction of the Utilities’ customers, which could have an adverse impact on the Utilities’ business, reputation and results of operations.

Stakeholder Activism Risk—Electric utility and third-party purchased power projects may be significantly impacted by stakeholder activism. The potential impact of stakeholder activism could increase total utility project costs, and delay the permitting, construction and overall timing or preclude the completion of third-party or utility projects that are required to meet electricity demand, resilience and reliability objectives, and RPS and other climate relatedclimate-related goals. If a utility project cannot be completed, the project costs may need to be written off in amounts that could result in significant reductions in Hawaiian Electric’s consolidated net income and negatively impact its financial condition and liquidity.

Legislative Risk—The Utilities may be adversely affected by new legislation, executive orders or administrative actions. The Utilities operations are subject to regulations under a wide variety of federal and state regulations and policies. Changes to federal and state laws, rules, regulations and policies are continuous and ongoing and the federal administration, the U.S. Congress, state legislatures and state administrations may enact and implement new laws, regulations and policies that could adversely and materially affect us. The new federal administration has indicated its intent to implement material changes to the federal government’s structure and operations and to advocate material changes to federal laws, regulations and policies. The Utilities cannot predict future changes in laws,regulationslaws, regulations and policies, how they will be implemented and interpreted, or the ultimate effect that this changing environment will have on us. There can be no assurance that laws, regulations and policies will not be changed in ways that have a material adverse effect on the Utilities’ operations, financial condition, results of operations, and cash flows. The federal and state executive branches, Congress, the Hawaii legislature and governmental agencies have adopted, or are considering adopting, a number of measures that will significantly affect the Utilities, as described below.

Renewable Portfolio Standards law. The 2001 Hawaii Legislature adopted a law requiring the Utilities to meet a renewable portfolio standard, which has been amended over the years. The most recent amendment to Hawaii’s RPS law occurred in July 2022, which former Governor Ige signed as Act 240 (H.B.2089), that amended the RPS calculation from renewable energy as a percentage of sales to renewable energy as a percentage of total generation. The amended RPS calculation results in a lower calculated percentage than the amount calculated under the previous methodology. The change in the definition is to be applied prospectively to future milestone measurements and will require that the Utilities acquire more renewable energy than under the previous RPS calculation to comply with the RPS milestones. The Utilities are committed to achieving these goalsmilestones and met the 2015 and 2020 RPS; however, due to the exclusion of energy savings in calculating RPS after 2014 and risks such as potential delays in IPPs being able to deliver contracted renewable energy, it is possible the Utilities may not attain the required renewable percentages in the future, and management cannot predict the future consequences of failure to do so (including potential penalties to be assessed by the PUC). On December 19, 2008, the PUC approved a penalty of $20 for every megawatt-hour (MWh) that an electric utility is deficient under Hawaii’s RPS law. The PUC noted, however, that this penalty may be reduced, in the PUC’s discretion, due to events or circumstances that are outside an electric utility’s reasonable control, to the extent the event or circumstance could not be reasonably foreseen and ameliorated, as described in the RPS law and in an RPS framework adopted by the PUC. In addition, the PUC ordered that the Utilities will be prohibited from recovering any RPS penalty costs through rates.

GlobalEvolving climate changedynamics and greenhouse gas emissions reduction. National and international concern about evolving climate changedynamics and the contribution of greenhouse gas (GHG) emissions (including carbon dioxide emissions from the combustion of fossil fuels) to climatesuch changedynamics have led to federal legislative and regulatory proposals and action by the stateState of Hawaii to reduce GHG emissions.

Hawaii Revised Statutes (HRS) § 269-6(b) requires that “in making determinations of the reasonableness of the costs pertaining to electric or gas utility system capital improvements and operations, the PUC shall explicitly consider, quantitatively or qualitatively, the effect of the state’s reliance on fossil fuels on price volatility, export of funds for fuel imports, fuel supply reliability risk, and greenhouse gas emissions.” Based on HRS § 269-6(b) and recent case law discussing the scope of this section, the Utilities are performing GHG analyses to quantitatively or qualitatively describe the GHG emissions of proposed projects involving system capital improvements and operations that are submitted to the PUC for approval. On June 20, 2024, House Bill 2390 was signed into law as Act 54 and took effect on July 1, 2024. Act 54 authorizes the PUC to waive a lifecycle GHG analysis for energy projects that do not involve combustion. On September 18, 2024, the PUC approved the Utilities’ waiver requests for the Stage 3 solar plus storage and wind projects.

The Utilities have taken, and continue to identify opportunities to take, direct action to reduce GHG emissions from their operations,operations while focusing on reliability and managing cost impacts, including, but not limited to, supporting demand-side management programs that foster energy efficiency, using renewable resources for energy production and purchasing power from IPPs generated by renewable resources, and burning renewable biodiesel at selected Hawaiian Electric and Maui Electric generating units. In Novemberthe fourth quarter of 2021, the Utilities committedoutlined their Climate Action Plan to a 70% reduction in power generation GHG emissions by 2030 compared to a 2005 baseline and achievement of net zerocut carbon emissions from power generation 70% by 2045.2030, Whilecompared to a 2005 baseline. The emissions covered by this goal include stack emissions from generation owned by Hawaiian Electric and IPPs who sell electricity to the reduction is not mandated by law, the Utilities could suffer reputational harm if it fails to achieve its commitments, which may negatively impact its business.Utilities. Since thethat time the 2030 goal was established,time, delays and cancellations in the commercial operation of new renewable third-party generation resources and higher costs as a result of supply chain disruptions and inflationary pressures, as well as federal policies related to solar panel imports, have slowed the pace of progress toward reducing GHGgreenhouse gas emissions. Also, see the “Developments in renewable energy efforts—New renewable PPAs” section in Hawaiian Electric’s MD&A. The One Big Beautiful Act signed into law by President Trump on July 4, 2025 may impact the ability of recently selected and new wind and solar projects to qualify for federal tax credits. Any loss in renewable energy tax credits could lead to project risk for new wind and solar projects in development and will likely result in higher prices for new renewable projects, which rely on such incentives to provide clean, affordable energy. Further, new tariffs imposed on equipment and materials used in the construction of renewable facilities will have an impact on pricing of new renewable projects. As a result of these challenges and the downgrade of Hawaiian Electric’s credit ratings after the Maui windstorm and wildfires is anticipated to be an additional impediment to completion of new renewable energy and storage projects. As a result of these challenges,wildfires, the Utilities expect the planned 70% reduction in carbon emissions to be achieved later than the original 2030 target date. However, the Utilities will continue to replace significant amounts of fossil fuel generation with renewable energy between now and 2030 and expect to meet or exceed the State of Hawaii’s 2030 RPS goals.

Renewable Transition Risk—The Utilities may be subject to increased operational challenges and their results of operations, financial condition and liquidity may be adversely impacted in meeting the commitments and objectives of clean energy initiatives, Renewable Portfolio Standards (RPS) and other climate relatedclimate-related goals. The far-reaching nature of the Utilities’ renewable energy commitments and the RPS and other climate related goals present risks to the Company. Among such risks are: (1) 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 proposals and related costs; (2) the dependence on outside parties, such as the state, developers and third-party suppliers of renewable purchased energy, which if the Utilities are unsuccessful in negotiating purchased power agreements with such IPPs or if a major IPP delays or fails to deliver the anticipated capacity and/or energy in its purchased power agreement, could impact the Utilities’ achievement of their commitments to RPS and other climate relatedclimate-related goals, eligibility for performance incentive mechanisms associated with the speed of increasing renewable generation, the ability to retire fossil fuel units, and/or the Utilities’ ability to deliver reliable service; (3) delays in acquiring or unavailability of non-fossil fuel supplies for renewable generation; (4) the impact of intermittent power to the electrical grid and reliability of service if appropriate supporting infrastructure is not installed or does not operate effectively; (5) the inability to recover the undepreciated cost of fossil fuel generating units if they are required to be retired before the end of their expected useful life; (6) uncertainties surrounding current and future renewable technologies, such as solar power, wind power, biofuels, battery storage, hydro, hydrogen, as well as related environmental assessments required to meet RPS and other climate relatedclimate-related goals; (7) uncertainty with regard to federal policy, including tax credit availability for both IPPs and Utility projects; (8) the impacts of implementation of the renewable energy proposals on future costs of electricity and potential penalties imposed by the PUC for delays in the commercial operations of renewable energy projects; (89) the likelihood that the Utilities may need to make substantial investments in related infrastructure, which could result in increased borrowings and, therefore, materially impact the financial condition and liquidity of the Utilities; (910) the imputed debt related to the pendingexecuted renewable power purchase agreements under the stage 1, stage 2, stage 3 and other RFPs could result in a credit rating downgrade for the Utilities and the Company; and (1011) the commitment to support a variety of initiatives, which, if approved by the PUC, may have a material impact on the results of operations and financial condition of the Utilities depending on their design and implementation. These initiatives include, but are not limited to, programs to enable more customer-sited generation. The implementation of these or other programs may adversely impact the results of operations, financial condition and liquidity of the Utilities.

Executive overview and strategy. HEI is a holding company with operations primarily focused on Hawaii’s electric utility sector after selling its bank operations on December 31, 2024. In 2017, HEI formed Pacific Current to make investments in non-regulated renewable energy and sustainable infrastructure projects. On December 30, 2024, HEI, ASB, and ASB Hawaii, a wholly owned subsidiary of HEI and ASB’s parent holding company, entered into investment agreements to sell 90.1% of the common stock of ASB to various investors, including certain ASB officers and directors of ASB. The sale transaction closed on December 31, 2024 and no investor acquired more than 9.9% of the common stock of ASB. The proceeds from the sale will bewere used to primarilyrepay strengthena theratable Company’sportion balanceof sheeteach andof promoteHEI’s long-termsenior financialnotes stabilityin whichApril may include partially paying down its long-term debt, funding the wildfire settlement amount, and/or for other corporate purposes.2025. Subsequent to the sale, HEI has one reportable segment: Electric utility. HEI and its other subsidiaries which are not reportable segments are grouped and reported as an “All Other” non-reportable segment.

All Other. The All Other segment primarily comprises the results of Pacific Current, which invested in non-regulated clean energy and sustainable infrastructure in the State of Hawaii to help reach the state’s sustainability goals, and HEI’s corporate-level operating, general and administrative expenses. However, subsequentSubsequent to the Maui windstorm and wildfires, HEI and Pacific Current have suspended any new investments whileand undertakingundertook a comprehensive review of strategic options for certainthe assets of Pacific Current. As part of HEI’s comprehensive review of strategic options for Pacific Current, all investments of Pacific Current that were made through its subsidiaries were sold in 2025, except for Mahipapa, its remaining operating subsidiary which is in the process of being sold. The All Other segment also includes ASB Hawaii, which previously owned ASB, and a 40% interest in GLST1, an entity created for the specific purpose of holding HEI’s and Hawaiian Electric’s first liability installment payment pursuant to the settlement agreements to settle the tort-related claims in the litigation arising out of the Maui windstorm and wildfires.

While aA major focus of HEI’s financial strategy is to grow core earnings/profitability at the Utilities and Pacific Current in a controlled risk manner and optimize operating, capital and tax efficiencies in order to support its dividend and deliver shareholder value,value. HEI isalso workingcontinues to work on strategic financing plans to raise capital necessary to fund the settlement of wildfire tort claims.

Sustainability. At HEI, sustainability principles have long been embedded as applicable within the Company’s activities and are integral to the Company’s efforts to create value for all of its stakeholders. With all of its operations isolated in the middle of the Pacific Ocean, the Company’s long-term health and financial performance isare inextricably linked with the strength of the Hawaii economy, its communities, and the environment. That is why long-term shareholder and broader stakeholder value are both served by the Company’s efforts to serve as a catalyst for a better Hawaii.

•ensuring resilience, including safety, as the Company adapts to aevolving changingclimate climate,dynamics, which isare exacerbating conditions that can lead to increasing risk of droughts, severe storms, flooding, wildfires and other extreme weather events and natural disasters;

The Company has also focused on ensuring thatintegrated sustainability considerations areas appropriately integratedappropriate into governance structures, strategies and risk management. This includes:

•integration of Board oversight of important sustainability matters into its existing governance structures and processes across companies. This includes full HEI Board review of sustainability-related strategies, Audit & Risk Committee oversight of sustainability-related risks, Compensation & Human Capital Management Committee responsibility for sustainability-related compensation matters and human capital management and Nominating and Corporate Governance Committee responsibility for ensuring an appropriate board governance framework is in place with respect to sustainability.

•robust sustainability and risk management expertise among board members, including directors with direct experience in renewable energy, climate change policy and strategy,strategy in the context of evolving climate dynamics, and risk and environmental management.

•sustainability goals incorporated as part of HEI and Utility executive incentive compensation.compensation as appropriate.

The Company is committed to transparency and providing information to allow customers, community leaders, investors and other stakeholders to understand how the Company’s strategies and operations advance sustainability objectives and contribute to long-term stakeholder value creation.

The Company issued its first consolidated sustainability report in September 2020. The report was aligned with Sustainability Accounting Standards Board guidance. The Company has since further developed its sustainability reporting to include disclosures regarding risks and opportunities related to evolving climate change,dynamics, as well as associated risk management and governance processes, based on recommendations from the Task Force on Climate-related Financial Disclosures. It has also outlined key impacts for the Company under two climate scenarios, including a scenario targeted to limit global temperature rise to two degrees Celsius or lower. The Company’s most recent reports include HEI’s enterprise-wide GHG emissions inventory, providing the basis to further guide the Company's strategies and enable greater transparency around its progress on climate issues.inventory. Net enterprise-wide GHG emissions in measured categories have decreased over time, driven largely by reductions in the utility’s generation-related emissions intensity. The Company’s sustainability reports can be found at www.hei.com/sustainability.

Note: TotalTotals may not foot due to rounding.

The Company’s effective tax rate (combined federal and state income tax rates) was at24% 26% (tax benefitexpense) in 2024,2025, compared to 19%26% (tax benefit) in 2024. The Company’s effective tax expenserate inwas 2023,lower than 2024 primarily due to the substantial pretaxpre-tax loss in 2024 resulting from the Utilities’ accrual of the loss contingencies related to the Maui windstorm and wildfireswildfire tort-related claims and because the impact of permanent items had a smaller impact on the effective tax ratesrate includingin federal2024, partially offset by recapture of investment tax credits and lower research and development tax credit claims in 2024, partially offset by an increase in excess taxes related to vesting of share-based awards and lower amortization in 2024 of the Utilities’ regulatory liability related to certain excess deferred income taxes resulting from the Tax Act’s decrease in the federal income tax rate.2025.

Maui windstorm and wildfires related expenses, net. The Company’s incremental expenses related to the Maui windstorm and wildfires, as discussed in Note 2 of the Consolidated Financial Statements, for the years ended December 31, 2025, 2024 and 2023 were as follows:

32 Related to the PUC’s order, received on December 27, 2023, approving deferred accounting treatment for the Utilities’ incremental non-labor expenses related to the August 2023 Maui windstorm and wildfires.wildfires Amountsincurred through December 31, 2024. Pursuant to the PUC order received on February 12, 2025, deferral accounting treatment limited to insurance premiums and outside services and legal costs associated with the asset-based lending facility credit agreement incurred in 2025 was granted. Applicable amounts were reclassifieddeferred to a regulatory asset. See “Risk Factors” in Item 1A. for further discussion of regulatory risks. See Note 2 of the Consolidated Financial Statements.

45 Excludes expenses related to discontinued operations amounting to $1.3 million and $11.3 million for the years ended December 31, 2024 and 2023, respectively.

Note: All Other segment Maui windstorm and wildfires related expenses - (legal, outside servicesservices, wildfire securities-related claims and other) and insurance recoveries are included in “Expenses-Other” and interest expense is included in “Interest expense, net” on the HEI and subsidiaries Consolidated Statements of Income. See Electric utility section below for more detail.

From August 8, 2023 through December 31, 2024,2025, HEI and its subsidiaries have incurred approximately $2.2$2.3 billion of Maui windstorm and wildfires related expenses, including the Utilities’ estimate of the losses related to a settlement of all wildfire tort-related legal claims and cross claims andclaims, the One ‘Ohana Initiative contribution.contribution and $47.8 million related to the securities class action settlement. Certain of these costs are reimbursable under excess liability insurance, professional liability insurance, and directors and officers liability insurance policies. As of December 31, 2024,2025, HEI and its subsidiaries have approximately $13$10 million, nil and $122$71 million of insurance coverage remaining under the excess liability, professional liabilityliability, and directors and officers liability policies, respectively, after deducting applicable retention amounts, amounts that have been recovered under insurance policies (including the One ‘Ohana Initiative contribution), and amounts expected to be recovered for incurred costscosts, including the securities class action settlement, and recognized as a receivable as of year-end.

In the fourth quarter,quarter of 2025, the average daily passenger count was 4.2%2.0% higherlower than the comparable period in the prior year. The recovery in total passenger counts from the low levels in 2020, which occurred under COVID-19 restrictions, thus far has been driven by domestic travelers, with international travelers, including Japanese travelers, remaining at lower levels. In the fourth quarter, international visitor arrivals (excluding Japan) remained 18.9%18.0% below 2019 pre-COVID-19 levels. Due to the weak yen, Japanese visitors are 41.8%36.6% below 2019 pre-COVID-19 levels.

Hawaii real estate activity through December 2024,2025, as indicated by Oahu’s home resale market, resulted in ana increase1.5% decrease in the median sales price of 1.3% for condominiums and an increase of 4.8%3.5% for single-family homes compared to the same period in 2023,2024. with the DecemberThe median single-family home price ofwas $1,054,500,$1,100,000 belowin December 2025, slightly lower than the recordall-time $1,153,500high of $1,185,000, set earlier this year in MayFebruary 2022.2025. The number of closed sales through December 20242025 decreasedsaw 2.5%a 1.1% decrease for condominiums and increaseda 9.1%3.5% increase for single-family residential homes compared to the same period in 2023.2024.

Hawaii’s petroleum product prices relate to the crude oil in international markets. The price of crude oil has decreased about 10.9%14.7% over the same quarter in the prior year.

Maui windstorm and wildfires related expenses,items, net. For the three and six months ended MarchJune 31,30, 2026 and 2025, the Company’s incremental expensesitems related to the Maui windstorm and wildfires as discussed in Note 2 of the Condensed Consolidated Financial Statements, were as follows:

From August 8, 2023 through MarchJune 31,30, 2026, HEI and its subsidiaries have incurred approximately $2.27$2.14 billion of Maui windstorm and wildfires related expenses, including the Utilities’ estimate of the losses related to a settlement of all wildfire tort-related legal claims and cross claims, the One ‘Ohana Initiative contribution and $47.8 million related to the securities class action settlement. Certain of these costs are reimbursable under excess liability insurance, professional liability insurance and directors and officers liability insurance policies. As of MarchJune 31,30, 2026, HEI and its subsidiaries have approximatelyrecovered $9the million,remaining nilunpaid insurance claim proceeds owed under its excess liability and $70professional liability insurance policies, and approximately $71 million of insurance coverage is remaining under the excess liability, professional liability and directors and officers liability policies, respectively,policy, after deducting applicable retention amounts, amounts that have been recovered under insurance policies (including the One ‘Ohana Initiative contribution), and amounts expected to be recovered for incurred costs,costs includingsuch as the securities class action settlement,settlement andthat is recognized as a receivable as of the quarter end.

On April 10, 2026, the last condition to the finalization of the tort settlement agreements and first installment payment was satisfied when the last insurer agreed to a stipulation withdrawing with prejudice the appeal of the December 30, 2025 summary judgment entered in favor of HEI, Hawaiian Electric and other defendants. As a result, the Company paid the first of its four equal annual $479 million installments pursuant to the settlement agreements and has initiated efforts to recover the remaining unpaid insurance coverage under its excess liability policy.agreements.

Note: The statistical data in this section is from public third-party sources that management believes to be reliable (e.g., Board of Governors of the Federal Reserve System, Department of Business, Economic Development and Tourism, University of Hawaii Economic Research Organization (UHERO), U.S. Bureau of Labor Statistics, Honolulu Board of REALTORS®, and U.S. Energy Information Administration).

In the firstsecond quarter of 2026, the average daily passenger count was 2.7%1.4% lowerhigher than the comparable period in the prior year. The recovery in total passenger counts from the low levels in 2020, which occurred under COVID-19 restrictions, thus far has been driven by domestic travelers, with international travelers, including Japanese travelers, remaining at lower levels. In the firstsecond quarter, international visitor arrivals (excluding Japan) remained 20.1%27.8% below 2019 levels. Due to the weak yen, Japanese visitors are 38.6%39.4% below 2019 levels.

Hawaii’s preliminary seasonally adjusted unemployment rate in FebruaryJune 2026 was 2.3%,2.6%, which was a decreaseslight increase from the FebruaryJune 2025 rate of 2.6%.2.3%. The national unemployment rate in MarchJune 2026 was 4.3%,4.2%, slightly higher than the MarchJune 2025 rate of 4.2%.4.1%. According to a recent forecast by UHERO, issued on FebruaryMay 27,15, 2026, jobs in the State will increase by 0.2%0.1% in 2026.

At its MarchJuly 18,29, 2026 meeting, the Federal Open Market Committee (FOMC) decided to maintain the federal funds rate target range at 3.5% to 3.75%. The FOMC noted that economic activity is expanding despite uncertainty around the economic outlook remains elevated, and that the implications of developmentsconflict in the Middle East for the U.S. economy are uncertain.East.

UHERO forecasts full year 2026 real GDP to increase 1.6%,1.0%, real personal income to increase 0.9%, a decrease in1.0%, total visitor arrivals ofto 0.6%,increase 2.0%, and an unemployment rate of 2.3%2.4% for the State. According to UHERO, Hawaii’s economy is graduallybeing moving beyond a mild jobs recession in 2025 as payrolls have begun to edge upward, supportedchallenged by athe resilientdamages U.S.from economythe two Kona storms and the localIran constructionwar, industry.which has contributed to surging oil prices and is expected to raise inflation, increase travel costs, and slow major economies that impact visitors.

All other segment. The all other business segment loss includes results of the stand-alone corporate operations of HEI, ASB Hawaii, GLST1Hawaii and Pacific Current, including the results of Hamakua Energy and the solar and battery energy storage system facilities up until the close of their respective sales in 2025.2025, and GLST1 up until its termination on June 3, 2026.

The all other business segment loss includes results of the stand-alone corporate operations of HEI (including eliminations of intercompany transactions) and the results of HEI’s subsidiaries, GLST1,GLST1 (up until its termination on June 3, 2026), ASB Hawaii and Pacific Current. Significant investments of Pacific Current made through its subsidiaries include: Pacific Current’s indirect subsidiary up until the close of its sale on March 10, 2025, Hamakua Energy, which owned a 60-MW combined cycle power plant on Hawaii Island that provides electricity to Hawaii Electric Light; Pacific Current’s solar project subsidiaries up until the close of the Solar Asset Disposition effective August 1, 2025, which includes Mauo, which owned solar-plus-storage projects totaling 8.6 MW on five University of Hawaii campuses, Alenuihaha Developments, LLC, which owned a collection of renewable energy assets on Oahu and Kauai, and Ka‘ie‘ie Waho Company, LLC, which owned a 6-MW solar photovoltaic system that provides renewable energy to Kauai Island Utility Cooperative; Pacific Current’s remaining operating subsidiary, Mahipapa, which owns a 7.5-MW nameplate biomass facility on Kauai; as well as eliminations of intercompany transactions.

The Company’s objective continues to be to operate a strong, financially healthy enterprise to empower a thriving future for Hawaii. In September 2025, HEI and Hawaiian Electric each entered into a fourth amended and restated credit agreement with a syndicate of eight financial institutions, increasing each of their committed capacities to $300 million (see Note 5 of the Condensed Consolidated Financial Statements). As of MarchJune 31,30, 2026, HEI and Hawaiian Electric each had $15no million and nil, respectively, drawndraws on their revolving credit facilities and no commercial paper outstanding.

As of MarchJune 31,30, 2026, HEI consolidated had $2.4$2.3 billion of long-term debt, of which $125 million is due or expected to be repaid within 12 months.debt. In addition, as of MarchJune 31,30, 2026, the Utilities accrued estimated wildfire liabilities of approximately $1.92$1.3 billion (pre-tax), related to the settlement of the Maui windstorm and wildfire tort-related legal claims (see Note 2 of the Condensed Consolidated Financial Statements). HEI and Hawaiian Electric determined that making payments under the terms of the Settlement Agreements in four equal annual installments is the most viable option and have classified the first $479 million installment as a current liability based on expected timing of the payment and the remaining $1.44 billion as a noncurrent liability on the Company’s and the Utilities’ Condensed Consolidated Balance Sheets.option. To finance the first installment payment, in September 2024, HEI completed the sale of 62.2 million shares of common stock.stock in September 2024. The shares were issued under a registration statement registering up to $575 million of common stock. The net proceeds from the sale of common stock amounted to approximately $557.7 million. In November 2024, HEI transferred the first installment payment to GLST1, a wholly owned subsidiary created for the specific purpose of holding the first installment payment pursuant to the settlement of the Maui windstorm and wildfire tort-related legal claims (see Note 2 of the Condensed Consolidated Financial Statements). The cash for the first installment payment is classified as restricted cash on the Condensed Consolidated Balance Sheet as of March 31, 2026. On April 10, 2026, HEI and Hawaiian Electric paid the finalfirst condition$479 million of four equal annual installments and subsequently terminated GLST1 in June 2026. In the second quarter of 2026, the Utilities remeasured the remaining settlement liability at present value, resulting in an adjustment to paymentthe occurred underremaining settlement agreementsliability from $1.44 billion to $1.30 billion and recognized a reduction to expense of $154 million, net of accretion expense of $18 million for the three and six months ended June 30, 2026 (see Note 2 of the Condensed Consolidated Financial Statements). As of June 30, 2026, Hawaiian Electric classified $410 million as a current liability and $890 million as a noncurrent liability on HEI’s and the firstUtilities’ installmentCondensed paymentConsolidated ofBalance $479 million was made.Sheets.

The following table provides the components of available liquidity as of MarchJune 31,30, 2026. See “Liquidity and capital resources” in Hawaiian Electric’s MD&A below for components of its available liquidity under existing credit facilities as of MarchJune 31,30, 2026.

Management believes with the Company’s cash and cash equivalents amount of $453$239 million and GLST1’s restricted cash amount of $479 million, both as of MarchJune 31,30, 2026, the available capacity on Hawaiian Electric’s ABL Facility, HEI’s and Hawaiian Electric’s increased borrowing capacities of their unsecured lines of credit, and additional liquidity under HEI’s registered at-the-market offering program, the Company has adequate cash to meet its financial obligations and sustain operations in the short term.

The Company expects that liquidity will continue to be impacted in the long term primarily due to the remaining liability payments to settle wildfire claims; the August 2023 downgrades of the Company’s credit ratings to below investment grade, which may limit the Company from readily accessing low-cost unsecured, short-term borrowings and other sources of debt and equity financing on favorable terms; and higher working capital requirements resulting from inflation and elevated fuel prices. Although the Company has raised sufficient cash to pay the first installment of the settlement of wildfire tort claims, theThe Company is currently working with its financial advisors on a financing plan to raise the additional capital necessary to fund the remaining settlement payments for the wildfire tort claims. While management believes the Company will be able to raise the necessary capital, there is no assurance that management’s plans will be successful. If the financing plans are unsuccessful, the Company may need to consider other strategic alternatives. See further discussion in “Risk Factors” in Item 1A. If further liquidity is deemed necessary in the short term, Hawaiian Electric could also reduce the pace of capital spending related to non-essential projects, manage O&M expenses, seek borrowings on a secured basis, and explore asset sales.

Credit1 ratings.As Onof December 31, 2025. In March 17, 2026, S&P revised HEI’s outlook to “Positive” from “Credit WatchCreditWatch Positive” and reaffirmedaffirmed the “B+” issuer credit rating. On April 21, 2026, Moody’s upgraded HEI’s long-term issuer rating to “Ba2” from “Ba3,” and changed its outlook to “Stable” from “Positive.”

HEI also periodically makes short-term loans to Hawaiian Electric to meet Hawaiian Electric’s cash requirements, including the funding of loans by Hawaiian Electric to Hawaii Electric Light and Maui Electric, but no such short-term loans to Hawaiian Electric were outstanding as of MarchJune 31,30, 2026.

There were no new issuances of common stock through the DRIP or the HEIRSP for the threesix months ended MarchJune 31,30, 2026 and 2025.

For the first threesix months of 2026, net cash providedused byin operating activities of HEI consolidated was $61$350 million. Net cash used in investing activities for the same period was $102$240 million, primarily due to capital expenditures. Net cash used in financing activities for the same period was $8$151 million, primarily due to repayment of long-term debt.

Dividends. The payout ratios for the first threesix months of 2026 and full year 2025 were nil. Each quarter, the HEI Board of Directors evaluates whether to declare a dividend and considers many factors in the evaluation including, but not limited to, the Company’s results of operations, liquidity, the long-term prospects for the Company, current and expected future economic conditions, and capital investment alternatives. In August 2023, in consideration of the potential impact from the Maui windstorm and wildfires, the HEI Board of Directors voted to suspend the quarterly cash dividend, starting after the second quarter 2023 dividend, and has not declared a cash dividend since that time. This action was intended to allow the Company to provide additional liquidity and allocate resources to reducing wildfire risk and rebuilding and restoring power and help ensure a strong future for the Utilities. In May 2025, after a temporary suspension of Hawaiian Electric’s quarterly cash dividend to HEI that began with the second quarter 2024 dividend, the Hawaiian Electric Board of Directors approved a $10 million dividend for each quarter of 2025 and an $11 million dividend for each of the first quarterand second quarters of 2026. This decision was made after considering several factors, including the continued progress of the Maui windstorm and wildfire settlement, the Utilities’ results of operations and the Utilities’ liquidity position.

For the firstsecond quarter of 2026, the Utilities generated net income of approximately $35.3$137.9 million compared to $47.8$39.2 million for the same quarter of 2025. See “Results of operations” below for variance explanations.

In the firstsecond quarter of 2026, kWh sales volume increaseddecreased 0.4%0.8% compared to the same period in 2025. The increasedecrease is driven by cloudiercooler weather conditions, reducing production from rooftop solar and solar water heaters.conditions.

The price of crude oil has increased 5.8%51.9% over the same quarter in the prior year. The Utilities are able to pass through fuel costs to customers and have limited fuel cost exposure through a 2% fuel cost-risk sharing mechanism (approximately $3.7 million maximum penalty/reward exposure annually). However, the Utilities expect cash flow impacts from the timing of the disbursements for fuel inventories and subsequent collection of accounts receivable, resulting in higher working capital requirements.

In MarchJune 2026, the Consumer Price Index (CPI) increased 3.3%3.5% over the last 12 months. In Hawaii, the MarchMay 2026 Urban Hawaii (Honolulu) CPI increased 3.7%5.1% over the last 12 months. Under the PBR Framework, inflation risk for the Utilities is partially mitigated by an Annual Revenue Adjustment (ARA), which is based on a formula that includes a compounded and non-compounded portion.

Alternative re-basing. See “Regulatory proceedings” in Note 4 of the Condensed Consolidated Financial Statements.

Affiliate transactions. In June 2025, the Utilities submitted a request with the PUC to terminate or indefinitely suspend all or specific provisions of the Affiliate Transaction Requirements (ATRs). On October 31, 2025, HEI and Hawaiian Electric filed a revised request, afterfollowing a September 2025 PUC order that providedproviding guidance on topics to be addressed in such a request, HEI and Hawaiian Electric filed a revised request. Beginning in 2024 and continuing into 2026, HEI has embarked on a strategy to divest all of its affiliated companies other than the Utilities, intendingwith the intent for the Utilities to be HEI’s sole operating companies. In their filing, HEI and Hawaiian Electric described how termination or suspension of the ATRs would allow implementation of a corporate integration, under which all HEI employees would move to Hawaiian Electric, a few officer positions would manage and operate both HEI and Hawaiian Electric (dual-hatted executives), and the HEI and Hawaiian Electric boards of directors would be composed of a single set of individuals. On March 23, 2026, the PUC issued an order approving the indefinite suspension of the ATR provisions requested by HEI and Hawaiian Electric. The PUC’s approval is subject to specified commitments, including HEI’s divestment of all remaining Pacific Current and affiliated assets, a prohibition on pursuing new diversification activities, continued compliance with Hawaii Revised Statutes Section 269-19.5 governing affiliated interests, and ongoing cooperation with the PUC, including reporting obligations. HEI is requiredPursuant to filethose reporting requirements, HEI filed a report establishing a divestment timeline for remaining affiliate assets and tois provideproviding monthly progress reports thereafter.to the PUC. The order also requires advance notice to the PUC and the Consumer Advocate prior to seeking any change in recovery of HEI-related expenses in future re-basing or rate proceedings. The PUC subsequently issued an order confirming that all ATR compliance filings and reporting are likewise suspended and closed the docket. HEI and Hawaiian Electric implemented the integration in June 2026.

System reliability. Since the August 2023 Maui windstorm and wildfires, the Utilities have developed a set of interim wildfire safety measures to mitigate the risk of wildfires in areas identified as having higher risk of wildfire in all service territories (Oahu, Maui County, and Hawaii Island). These interim measures represent actions the Utilities performed in 2024. On January 10, 2025, the Utilities filed their 2025-2027 Wildfire SafetyMitigation StrategyPlan (WSS,WMP, also referred to as Wildfire MitigationSafety PlanStrategy or WMPWSS) with the PUC, which outlines their plans to reduce wildfire risk throughout their service territories over the next three years, and was approved by the PUC on December 31, 2025. The PUC also directed the Utilities to provide a WMP update bi-annually. On April 13, 2026, the Utilities submitted their 2026-2027 WMP update to the PUC. The WMP update primarily reflects 1) maturation of the wildfire mitigation framework following the 2025-2027 WSS,WMP, 2) direct responses to the PUC’s areas of continuous improvement identified in a decision and order, and 3) other non-substantive revisions for clarity. These measures result in disruptions to service and negatively impact Transmission and Distribution (T&D) System Average Interruption Duration Index (SAIDI) and System Average Interruption Frequency Index (SAIFI). While the Utilities work to refine these measures over time to mitigate customer impacts, the Utilities are currently focused on taking immediate steps to keep island communities safe during extreme weather events. For a discussion regarding the launch of the Public Safety Power Shutoff program, see discussion below under “Wildfire safety measures.”

Hawaii Island has two generators out of service for extended maintenance, one of which is expected to return to service in the secondfourth quarter of 2026. While these units are unavailable for maintenance, during certain periods there may be reductions in generation reserve margins and failure of other generators, which could risk generation shortfalls.

3 Starting in the fourth quarter of 2025, certain Wildfire SafetyMitigation StrategyPlan costs were deferred and continued to be deferred in 2026.

4 kWh sales were slightly higherlower compared to the same quarter in prior year. The increasedecrease in sales can bewas attributed to cloudiercooler weather conditions, reducing production from rooftop solar and solar water heaters.conditions.

Hawaiian Electric’s consolidated return on average common equity (ROACE) was 10%15.0% and not meaningful3.7% for the twelve months ended MarchJune 31,30, 2026 and 2025, respectively.

For more information of the Utilities’ incremental expensesitems related to the Maui windstorm and wildfires for the three and six months ended MarchJune 31,30, 2026 and 2025, see “Results of operations—Maui windstorm and wildfires related expensesitems, net” in HEI’s MD&A.

Wildfire safety measures. In January 2025, the Utilities developed and filed with the PUC a 2025-2027 Wildfire SafetyMitigation StrategyPlan (WSSWMP), which identifies risk mitigation strategies to perform over the next three years across their service territories. The measures, including wildfire risk analysis, implementation of the Public Safety Power Shutoff (PSPS) program, grid design changes, and system hardening, have been integrated into the 2025-2026 WSS.WMP. The strategies and actions include additional operational changes, grid hardening work, enhanced inspections and vegetation management, and risk modeling to inform and prioritize hardening work and operational actions. On May 30, 2025, the Utilities submitted an application to the PUC for Exceptional Project Recovery Mechanism (EPRM) cost recovery estimated at $350 million, net of costs funded through other existing programs. On December 31, 2025, the PUC approved the Utilities’ 2025-2027 WSS.WMP. The PUC also directed the Utilities to provide a WMP update bi-annually. On April 13, 2026, the Utilities submitted their 2026-2027 WMP update to the PUC. On June 25, 2026, the PUC approved the Utilities’ request for Exceptional Project Recovery Mechanism (EPRM) cost recovery estimated at $350 million. See also “Utility projects” in Note 4 of the Condensed Consolidated Financial Statements.

Hawaiian Electric has also committed to achieving net zero carbon emissions from power generation by 2045 or sooner. While the timing of the Utilities’ carbon reduction goals will be impacted by federal policies, key elements of the 2030 plan have already been completed or remain on track to be completed by 2030, including the closure of AES Hawaii, Inc., the State’s last coal-fired IPP plant, increasing rooftop solar capacity by more than 50% over 2021 levels, retiring six fossil fuel generating units, increasing grid-scale and customer-owned storage, expanding geothermal resources, and creating customer incentives for using clean, lower-cost energy at certain times of the day and using less fossil-fueled energy at night. The retirement of fossil-fueled generating units is consistent with state policy and supported by Hawaii state law.

The Hawaii State Energy Office’s Alternative Fuel, Repowering and Energy Transition Study (Alternative Fuel Study) expresses concern about the speed of the transition to renewable energy and cites to the continued reliance on imported oil as a driver of high bills and intense carbon emissions. The report makes a case for the use of liquefied natural gas on Oahu to replace low sulfur fuel oil during the transition to 100% renewable energy, and names several entities as potential investors that could help speed the transition. On October 6, 2025, the Office of the Governor of the State of Hawaii andHawaii, JERA Co., Inc. (JERA Co.), Japan’s largest power producer, and its U.S. subsidiary, JERA Americas Inc. (JERA Americas), signed a non-binding Strategic Partnering Agreement that establishes a framework for long-term collaboration to support Hawaii’s decarbonization goals and energy transition. The Strategic Partnering Agreement supports the implementation of the Hawaii State Energy Office’s Alternative Fuel Study to pursue fuel diversification, including liquified natural gas, to reduce near-term reliance on oil. On March 17, 2026, JERA Co. provided a proposal to the State of Hawaii to modernize Oahu’s energy system to accelerate the replacement of oil-fired generation with new energy assets, including an approximately 500-MW hybrid combined-cycle and simple-cycle power facility supported by offshore liquefied natural gas import infrastructure. On July 17, 2026, JERA isAmericas exploringfiled opportunitiesa notice of intent with the PUC to participatefile a Certificate of Public Convenience and Necessity (CPCN) for the development, ownership, and operation of a new, proposed regulated power generation company (GenCo) and associated utility-scale generation facilities on Oahu totaling 500 MW. JERA Americas intends to file the CPCN application in the equityfirst investmentquarter needed,of 2027. JERA Americas’ proposal is not intended to replace Hawaiian Electric’s role as the retail utility, system operator, and ifcontinued ownership and operation of existing generation resources, but is intended to provide regulated wholesale generation service within the projectexisting isintegrated approved,electric JERAsystem. estimatesHawaiian Electric believes that any significant new generation resource serving Oahu customers should be evaluated through a transparent, competitive procurement process designed to ensure that customers receive the best overall value and that all qualified market participants have an opportunity to compete. Hawaiian Electric believes that competition, together with oversight by the PUC and input from all stakeholders pursuant to the State's competitive bidding framework, provides an effective mechanism to evaluate project costs, reliability benefits, operational characteristics, commercial viability, and customer impacts. Accordingly, on July 17, 2026, Hawaiian Electric filed a request with the PUC to open a new infrastructureproceeding and establish an expedited process for approval of a request for proposals (RFP) for approximately 500 MW of fuel-flexible firm generation capacity on Oahu. Hawaiian Electric proposed that the RFP be administered concurrently with its Integrated Grid Planning (IGP) procurement process and that proposals received through the respective procurements be evaluated through a single integrated portfolio assessment to identify the resources that provide the greatest overall benefit to customers. On August 5, 2026 the PUC issued a letter responding to the Utilities’ July 17 request, with the PUC noting that a demonstration of need for the additional 500 MW of fuel‑flexible firm generation would be developedrequired, overand without demonstrating need, it is not reasonable and in the nextpublic severalinterest years,to withopen a targetdocket commercialor operationotherwise dateexpedite inreview 2030.and approval of Hawaiian Electric’s Firm RFP request at this time. The timing, scope, and outcome of the PUC's consideration of any future proceeding relating to JERA Americas’ proposed CPCN application, remain uncertain.

The Utilities have made significant progress on the path to clean energy and have been successful in achieving RPS goals. To datedate, the Utilities have met all of the statutory RPS goals, including exceeding the latest milestone RPS target of 30% for 2020, where it achieved an RPS of 34.5%. The Utilities expect to continue to meet the RPS milestones under the amended RPS law. See “Developments in renewable energy efforts” below.

The Integrated Grid Planning (IGP) process utilizes an inclusive and transparent stakeholder engagement model to provide an avenue for interested parties to engage with the Utilities and contribute meaningful input throughout the IGP process. The first cycle of the IGP was accepted by the PUC on March 7, 2024, and is the culmination of more than five years of partnership with stakeholders and community members across the islands. Together, they forecasted future energy needs and identified strategies to meet Hawaii’s growing energy demand with 100% renewable resources. The Integrated Grid Plan proposes actionable steps to decarbonize the electric grid on the State of Hawaii’s timeline, with a flexible framework that can adapt to future technologies. On January 2, 2026, the PUC opened the Second Cycle of the Integrated Grid Plan to continue to plan for future resources needed on the Utilities’ systems.

In 2022, the Utilities were approved to expand the Energy Demand Response Program (EDRP) on the islandislands of Maui and Oahu, which provides approximately 8 MW and 43 MW on Maui and Oahu, respectively. The PUC approved the cost recovery of the additional incentives for both Oahu and Maui through the Demand Side Management Surcharge.

During the time that EDRP was available, Bring Your Own Device Level 1 was launched on April 1, 2025, to succeed EDRP, which closed on July 1, 2024, on Oahu. The Bring Your Own Device Level 1 later evolved into Bring Your Own Device Plus, which began on May 15, 2025. Enrollment for the Bring Your Own Device Plus program will be available until total enrolled program capacity reaches 50 MW statewide, 3 MW of which is currently provided statewide.

The Utilities filed their initial application with the PUC on September 30, 2019 for an Advanced Distribution Management System as part of Phase 2 of their GMS implementation. However, as the Utilities were unsuccessful in securing Infrastructure Investment and Jobs Act federal funding in 2024, the Utilities are currently re-scoping GMS Phase 2 and plan to file another updated and supplemented PUC application for updated project costs in the secondthird quarter of 2026.

On November 10, 2025, the Utilities filed their Track A Retail Wheeling Straw Proposal. The Utilities’ Straw Proposal provides an overview for the application process, a discussion of technical standards for grid interconnection and monitoring, provisions for metering and monitoring and a discussion of pricing mechanisms in the tariff structure and how to appropriately allocate wheeling costs. The Consumer Advocate and stakeholders provided comments on the Utilities’ Straw Proposal by January 20, 2026. The Utilities filed responses to the comments of the Consumer Advocate and stakeholders on March 6, 2026. On April 7, 2026, the PUC held a technical conference and stakeholder workshop where the Utilities provided a presentation on the Track A Retail Wheeling Straw Proposal and addressed the various comments and questions raised by the PUC, Consumer Advocate, and stakeholders in the proceeding. At the end of the conference, the PUC stated it would be issuing further guidance on the docket and a procedural schedule for the remainder of the proceeding.

Regulatory proceedings. On December 23, 2020, the PBR D&O was issued, establishing the PBR Framework. The PBR Framework implemented a five-year multi-year rate period (MRP), during which there will be no general rate case applications. TheOn July 17,2026, the Utilities arefiled currentlytheir exploringapplication afor collaborativeapproval non-rateof casetheir re-basing proposal under the PBR Framework as an alternative to a rate case process.proposal. See “Regulatory proceedings” in Note 4 of the Condensed Consolidated Financial Statements for a discussion of re-basing, PBR Framework and decoupling.

On August 31, 2023, the PUC issued an order temporarily suspending the Earnings Sharing Mechanism (ESM) until further notice. The intent of the order is to address the unintended consequence of customers potentially bearing the costs associated with the Maui windstorm and wildfires through the operation of the ESM without prior PUC review. In accordance with the order, the ESM remains suspended and there is no earnings sharing adjustment for 2026 as of MarchJune 31,30, 2026.