Hawaiian Electric Q3 2026 operating income falls to $41.2M
The remaining Maui settlement installments are due in April 2027, April 2028 and April 2029.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Hawaiian Electric Industries, Inc. reported third-quarter 2026 revenue of $1,008.7 million versus $790.6 million in 2025 and net income for common stock of $35.5 million versus $30.7 million. Operating income was $41.2 million, down from $52.0 million; the quarter included a $64.1 million gain on sale of investment and net unrealized gain on investment measured at fair value.
HEI sold 2,253,264 ASB common shares in ASB’s IPO on September 16, 2026, receiving $33.9 million in net proceeds and recording an $18.3 million pretax realized gain. Its remaining 4,181,538 shares had a fair value of $74.8 million as of September 30, 2026. HEI plans to use sale proceeds, including proceeds from a planned 2027 sale of the remaining shares, for partial wildfire-settlement prepayments.
HEI and Hawaiian Electric are obligated to contribute $1.99 billion under the Maui settlement, including $75 million previously contributed. They paid the first of four equal annual $479 million installments on April 10, 2026; HEI made a $40 million partial prepayment on September 16 and another $40 million on October 28 toward the second installment. Mahipapa recorded a $50.7 million third-quarter impairment; its power purchase agreement with KIUC ended October 1, 2026, and it filed a voluntary Chapter 7 petition on November 3, 2026.
2 points · 0 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointQuarterly revenue was $1,008.7 million, versus $790.6 million in 2025.
- Moderate pointQuarterly net income for common stock was $35.5 million, versus $30.7 million.
Negative
- Moderate pointQuarterly operating income was $41.2 million, versus $52.0 million in 2025.
Filing Explained
The court entered final judgment on HEI’s securities-class settlement on
Key Figures
Total revenue: $1,008.7 million
Net income for common stock: $35.5 million
Operating income: $41.2 million
+5 more
8 metrics
Total revenue
$1,008.7 million
Three months ended September 30, 2026; $790.6 million in 2025
Net income for common stock
$35.5 million
Three months ended September 30, 2026; $30.7 million in 2025
Operating income
$41.2 million
Three months ended September 30, 2026; $52.0 million in 2025
Mahipapa pretax impairment charge
$50.7 million
Three months ended September 30, 2026
ASB share-sale net proceeds
$33.9 million
HEI’s sale of ASB common shares in September 2026
ASB pretax realized gain
$18.3 million
HEI’s sale of ASB common shares
Maui settlement contribution obligation
$1.99 billion
HEI and Hawaiian Electric total contribution, including $75 million previously contributed
Annual settlement installment
$479 million
First installment paid April 10, 2026; remaining installments due in April 2027, April 2028 and April 2029
Key Terms
fair value, accretion expense, net salvage value, regulatory asset, +1 more
5 terms
fair value financial
"remaining investment in ASB at fair value"
Fair value is an estimate of what an asset or company is really worth today, derived from expected future earnings, comparable market prices and other relevant facts—like agreeing a price for a used car after checking mileage, condition and similar listings. Investors use fair value to decide whether a stock looks overpriced or undervalued, which helps guide buy, hold or sell decisions and sets expectations for potential returns and risk.
accretion expense financial
"Accretion expense for the three and nine months ended September 30, 2026"
Accretion expense is the periodic accounting charge that reflects the increase in the recorded value of a future obligation as its payment date approaches, similar to how a snowball grows as you roll it downhill. For investors it matters because it lowers reported earnings without using cash, and signals that a company is recognizing the rising cost of an obligation (such as a discounted bond or a future cleanup liability) over time, affecting profit comparability and balance-sheet measures.
net salvage value financial
"written down to their estimated net salvage value"
regulatory asset financial
"deferred $79.1 million of these incremental costs to a regulatory asset"
asset-based lending facility financial
"Pursuant to the asset-based lending facility credit agreement"
A lending arrangement where a company borrows money using specific assets—such as unpaid customer invoices, inventory, or equipment—as collateral, similar to using items at a pawn shop to get a short-term loan. Investors care because it alters a company’s cash flow and risk profile: it can provide quick working capital but increases secured obligations and can affect lenders’ priority if the business runs into financial trouble. The terms and size of the facility also influence borrowing costs and financial flexibility.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were Hawaiian Electric Industries (HE) third-quarter 2026 results?
HEI reported third-quarter 2026 revenue of $1,008.7 million and net income for common stock of $35.5 million. The comparable 2025 figures were $790.6 million and $30.7 million, respectively; operating income was $41.2 million versus $52.0 million.
How many ASB shares did HEI sell in 2026?
HEI sold 2,253,264 ASB common shares in ASB’s September 16, 2026 IPO, receiving $33.9 million in net proceeds and recording an $18.3 million pretax realized gain. As of September 30, 2026, its remaining 4,181,538 shares had a fair value of $74.8 million.
How much debt did Mahipapa have before filing for Chapter 7?
At September 30, 2026, Mahipapa had approximately $49 million in long-term debt and approximately $2 million in long-lived assets. It filed a voluntary Chapter 7 petition on November 3, 2026; its assets would become part of its bankruptcy estate, to be administered and liquidated by a trustee.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
For the quarterly period ended September 30, 2026
OR
| Exact Name of Registrant as Specified in Its Charter | Commission File Number | I.R.S. Employer Identification No. | ||||||||||||
| and Principal Subsidiary | ||||||||||||||
State of Hawaii
(State or other jurisdiction of incorporation or organization)
Hawaiian Electric Industries, Inc. – 1001 Bishop Street , Suite 2900 , Honolulu , Hawaii 96813
Hawaiian Electric Company, Inc. – 1099 Alakea Street , Suite 2200 , Honolulu , Hawaii 96813
(Address of principal executive offices and zip code)
Hawaiian Electric Industries, Inc. – (808 ) 543-5662
Hawaiian Electric Company, Inc. – (808 ) 543-7771
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
| Registrant | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||
| Hawaiian Electric Industries, Inc. | |||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
| Hawaiian Electric Industries, Inc. | ☒ | No | ☐ | Hawaiian Electric Company, Inc. | ☒ | No | ☐ | |||||||||||||||||||||||||
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
| Hawaiian Electric Industries, Inc. | ☒ | No | ☐ | Hawaiian Electric Company, Inc. | ☒ | No | ☐ | |||||||||||||||||||||||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.
| Hawaiian Electric Industries, Inc.: | Hawaiian Electric Company, Inc.: | ||||||||||||||||||||||
| ☒ | Smaller reporting company | Large accelerated filer | ☐ | Smaller reporting company | |||||||||||||||||||
| Accelerated filer | ☐ | Emerging growth company | Accelerated filer | ☐ | Emerging growth company | ||||||||||||||||||
| Non-accelerated filer | ☐ | ☒ | |||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
| Hawaiian Electric Industries, Inc. | ☐ | Hawaiian Electric Company, Inc. | ☐ | |||||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
| Hawaiian Electric Industries, Inc. | Yes | ☐ | No | Hawaiian Electric Company, Inc. | Yes | ☐ | No | |||||||||||||||||||||||||
Securities registered pursuant to 12(b) of the Act:
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuers’ classes of common stock, as of the latest practicable date.
| Class of Common Stock | Outstanding October 30, 2026 | ||||||||||
| Hawaiian Electric Industries, Inc. (Without Par Value) | Shares | ||||||||||
| Hawaiian Electric Company, Inc. ($6-2/3 Par Value) | Shares (not publicly traded) | ||||||||||
Hawaiian Electric Industries, Inc. (HEI) is the sole holder of Hawaiian Electric Company, Inc. (Hawaiian Electric) common stock.
HAWAIIAN ELECTRIC COMPANY, INC. MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
This combined Form 10-Q is separately filed by HEI and Hawaiian Electric. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. No registrant makes any representation as to information relating to the other registrant, except that information relating to Hawaiian Electric is also attributed to HEI.
Hawaiian Electric Industries, Inc. and Subsidiaries
Hawaiian Electric Company, Inc. and Subsidiaries
Form 10-Q—Quarter ended September 30, 2026
TABLE OF CONTENTS
| Page No. | |||||||||||
ii | Glossary of Terms | ||||||||||
iv | Cautionary Note Regarding Forward-Looking Statements | ||||||||||
PART I. FINANCIAL INFORMATION | |||||||||||
1 | Item 1. | Financial Statements | |||||||||
Hawaiian Electric Industries, Inc. and Subsidiaries | |||||||||||
1 | Condensed Consolidated Statements of Income (unaudited) - three and nine months ended September 30, 2026 and 2025 | ||||||||||
2 | Condensed Consolidated Statements of Comprehensive Income (unaudited) - three and nine months ended September 30, 2026 and 2025 | ||||||||||
3 | Condensed Consolidated Balance Sheets (unaudited) - September 30, 2026 and December 31, 2025 | ||||||||||
4 | Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited) - three and nine months ended September 30, 2026 and 2025 | ||||||||||
5 | Condensed Consolidated Statements of Cash Flows (unaudited) - nine months ended September 30, 2026 and 2025 | ||||||||||
Hawaiian Electric Company, Inc. and Subsidiaries | |||||||||||
6 | Condensed Consolidated Statements of Income (unaudited) - three and nine months ended September 30, 2026 and 2025 | ||||||||||
6 | Condensed Consolidated Statements of Comprehensive Income (unaudited) - three and nine months ended September 30, 2026 and 2025 | ||||||||||
7 | Condensed Consolidated Balance Sheets (unaudited) - September 30, 2026 and December 31, 2025 | ||||||||||
9 | Condensed Consolidated Statements of Changes in Common Stock Equity (unaudited) - three and nine months ended September 30, 2026 and 2025 | ||||||||||
10 | Condensed Consolidated Statements of Cash Flows (unaudited) - nine months ended September 30, 2026 and 2025 | ||||||||||
11 | Notes to Condensed Consolidated Financial Statements (unaudited) | ||||||||||
48 | Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||||||
48 | HEI consolidated | ||||||||||
54 | Electric utility | ||||||||||
70 | Item 3. | Quantitative and Qualitative Disclosures About Market Risk | |||||||||
71 | Item 4. | Controls and Procedures | |||||||||
PART II. | OTHER INFORMATION | ||||||||||
72 | Item 1. | Legal Proceedings | |||||||||
72 | Item 1A. | Risk Factors | |||||||||
72 | Item 2. | Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities | |||||||||
73 | Item 5. | Other Information | |||||||||
74 | Item 6. | Exhibits | |||||||||
75 | Signatures | ||||||||||
i
Hawaiian Electric Industries, Inc. and Subsidiaries
Hawaiian Electric Company, Inc. and Subsidiaries
Form 10-Q—Quarter ended September 30, 2026
GLOSSARY OF TERMS
| Terms | Definitions | |||||||
ABL Facility | Asset-based lending facility | |||||||
| ARA | Annual revenue adjustment | |||||||
AOCI | Accumulated other comprehensive income (loss) | |||||||
| ASB | American Savings Bank, F.S.B., previously a wholly owned subsidiary of ASB Hawaii, Inc. On December 31, 2024, American Savings Bank, F.S.B. was sold. | |||||||
| ASB Hawaii | ASB Hawaii, Inc., a wholly owned subsidiary of Hawaiian Electric Industries, Inc. and previously the parent company of American Savings Bank, F.S.B. On December 31, 2024, American Savings Bank, F.S.B. was sold. | |||||||
| ASU | Accounting Standards Update | |||||||
ATR | Affiliate Transaction Requirement | |||||||
BESS | Battery Energy Storage System | |||||||
| Company | Hawaiian Electric Industries, Inc. and its direct and indirect subsidiaries, including, without limitation, Hawaiian Electric Company, Inc. and its subsidiaries (listed under Hawaiian Electric); ASB Hawaii, Inc.; and Pacific Current, LLC and its subsidiaries (listed under Pacific Current). Effective June 3, 2026, GLST1, LLC was dissolved and terminated. | |||||||
| Consumer Advocate | Division of Consumer Advocacy, Department of Commerce and Consumer Affairs of the State of Hawaii | |||||||
| D&O | Decision and order from the PUC | |||||||
| DOE | U.S. Department of Energy | |||||||
| DRIP | HEI Dividend Reinvestment and Stock Purchase Plan | |||||||
| ECRC | Energy Cost Recovery Clause | |||||||
| EIP | 2010 Equity and Incentive Plan, as amended | |||||||
| EPA | Environmental Protection Agency — federal | |||||||
| EPRM | Exceptional Project Recovery Mechanism | |||||||
| EPS | Earnings per share | |||||||
| ESM | Earnings Sharing Mechanism | |||||||
| Exchange Act | Securities Exchange Act of 1934 | |||||||
| FASB | Financial Accounting Standards Board | |||||||
Federal | U.S. Government | |||||||
| GAAP | Accounting principles generally accepted in the United States of America | |||||||
GDPPI | Gross Domestic Product Price Index | |||||||
GLST1 | GLST1, LLC, a former subsidiary of Hawaiian Electric Industries, Inc. Effective June 3, 2026, GLST1, LLC was dissolved and terminated. | |||||||
| Hamakua Energy | Hamakua Energy, LLC, previously an indirect subsidiary of Pacific Current. On March 10, 2025, Hamakua Holdings, LLC was sold and as a result, its wholly owned subsidiary, Hamakua Energy, LLC is no longer owned by Pacific Current as of such closing. | |||||||
Hamakua Holdings | Hamakua Holdings, LLC, previously a direct subsidiary of Pacific Current and parent company of Hamakua Energy, LLC and HAESP, LLC. On March 10, 2025, Hamakua Holdings, LLC was sold. | |||||||
| Hawaii Electric Light | Hawaii Electric Light Company, Inc., an electric utility subsidiary of Hawaiian Electric Company, Inc. | |||||||
| Hawaiian Electric | Hawaiian Electric Company, Inc., an electric utility subsidiary of Hawaiian Electric Industries, Inc. and parent company of Hawaii Electric Light Company, Inc., Maui Electric Company, Limited, Renewable Hawaii, Inc. and HE AR INTER LLC | |||||||
HE AR BRWR | HE AR BRWR LLC, a direct subsidiary of HE AR INTER LLC | |||||||
HE AR INTER | HE AR INTER LLC, a direct subsidiary of Hawaiian Electric Company, Inc. and parent company of HE AR BRWR LLC | |||||||
| HEI | Hawaiian Electric Industries, Inc., direct parent company of Hawaiian Electric Company, Inc., ASB Hawaii, Inc. and Pacific Current, LLC. | |||||||
| HEIRSP | Hawaiian Electric Industries Retirement Savings Plan | |||||||
| IPP | Independent power producer | |||||||
Kaʻieʻie Waho | Kaʻieʻie Waho Company, LLC, a former subsidiary of Pacific Current | |||||||
ii
GLOSSARY OF TERMS, continued
| Terms | Definitions | |||||||
| kWh | Kilowatthour/s (as applicable) | |||||||
| LTIP | Long-term incentive plan | |||||||
| Mahipapa | Mahipapa, LLC, a subsidiary of Pacific Current | |||||||
| Maui Electric | Maui Electric Company, Limited, an electric utility subsidiary of Hawaiian Electric Company, Inc. | |||||||
Maui windstorm and wildfires | The fires in the West Maui (Lahaina) and Upcountry Maui areas that caused fatalities and widespread property damage in Lahaina on August 8, 2023 | |||||||
| Mauo | Mauo, LLC, a former subsidiary of Pacific Current | |||||||
| Moody’s | Moody’s Ratings | |||||||
| MPIR | Major Project Interim Recovery | |||||||
| MRP | Multi-year rate period | |||||||
| MW | Megawatt/s (as applicable) | |||||||
| O&M | Operation and maintenance | |||||||
| OPEB | Postretirement benefits other than pension | |||||||
| Pacific Current | Pacific Current, LLC, a wholly owned subsidiary of HEI and parent company of Kaʻaipuaʻa, LLC, Mahipapa, LLC, and Pacific Current, Solar and Storage Holding Company, LLC. On March 10, 2025, Hamakua Holdings, LLC was sold. In June 2025, all of Pacific Current’s membership interests in Mauo, LLC, Alenuihaha Developments, LLC, Kaʻieʻie Waho Company, LLC and Upena, LLC were transferred to PC Opco. On August 1, 2025, PC Opco was sold. | |||||||
| PC Holdco | Pacific Current, Solar and Storage Holding Company, LLC, a wholly owned subsidiary of Pacific Current and previously the parent company of PC Opco. On August 1, 2025, PC Opco was sold. | |||||||
| PC Opco | Pacific Current, Solar and Storage Operating Company, LLC, previously a wholly owned subsidiary of PC Holdco. In June 2025, Pacific Current transferred all of the outstanding membership interests in Mauo, LLC, Alenuihaha Developments, LLC, Kaʻieʻie Waho Company, LLC and Upena, LLC to PC Opco. On August 1, 2025, PC Opco was sold. | |||||||
| PBR | Performance-based regulation | |||||||
| PIMs | Performance Incentive Mechanisms | |||||||
| PPA | Power purchase agreement | |||||||
| PPAC | Purchased Power Adjustment Clause | |||||||
PSPS | Public Safety Power Shutoff | |||||||
| PUC | Public Utilities Commission of the State of Hawaii | |||||||
| PV | Photovoltaic | |||||||
| RBA | Revenue balancing account | |||||||
RFPs | Request for proposals | |||||||
| ROACE | Return on average common equity | |||||||
| RPS | Renewable portfolio standards | |||||||
| S&P | S&P Global Ratings | |||||||
SAIDI | System Average Interruption Duration Index | |||||||
SAIFI | System Average Interruption Frequency Index | |||||||
| SEC | Securities and Exchange Commission | |||||||
| See | Means the referenced material is incorporated by reference | |||||||
| SOFR | Secured Overnight Financing Rate | |||||||
Stage 1 | Request for proposal process to procure renewable projects governed by the PUC in February 2018 | |||||||
Stage 2 | Request for proposal process to procure renewable projects governed by the PUC in August 2019 | |||||||
| T&D | Transmission and Distribution | |||||||
| Utilities | Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited | |||||||
| VIEs | Variable interest entities | |||||||
WMP | Wildfire Mitigation Plan | |||||||
iii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report and other presentations made by Hawaiian Electric Industries, Inc. (HEI) and Hawaiian Electric Company, Inc. (Hawaiian Electric) and their subsidiaries contain “forward-looking statements,” which include statements that are predictive in nature, depend upon or refer to future events or conditions and usually include words such as “will,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “predicts,” “estimates” or similar expressions. In addition, any statements concerning future financial performance, ongoing business strategies or prospects or possible future actions are also forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are subject to risks, uncertainties and the accuracy of assumptions concerning HEI and its subsidiaries (collectively, the Company), the performance of the industries in which they do business and economic, political and market factors, among other things. These forward-looking statements are not guarantees of future performance and actual results and financial condition may differ materially from those indicated in the forward-looking statements.
Risks, uncertainties and other important factors that could cause actual results to differ materially from those described in forward-looking statements and from historical results include, but are not limited to, the following:
•the potential for further trade policy changes under the current administration could disrupt our supply chains and increase costs, e.g., the Utilities’ capital goods and equipment purchases and those of its independent power producers (IPPs) that contain components, sub-components, or raw materials sources from outside the U.S. could experience increases in costs, which could threaten the viability of projects and impact our ability to meet customer demand and the Utilities’ ability to achieve renewable portfolio standards (RPS) goals;
•the impact of the Maui windstorm and wildfires, including potential liabilities in excess of settlement amounts and potential regulatory penalties, which may result in significant costs that may be unrecoverable (or not reimbursed on a timely basis) through insurance and/or rates;
•an increase in insurance premiums and the inability to fully recover premiums through rates or the potential inability to obtain wildfire and general liability insurance coverage at reasonable rates, if available at all;
•the ability to raise the amount of capital necessary on reasonable terms, if at all, for the Company’s and the Utilities’ contribution to the Maui wildfire tort litigation settlement in order to alleviate future conditions that may cause substantial doubt about HEI’s and the Utilities’ ability to continue as a going concern;
•potential further dilution to existing shareholders if the Company raises funds by issuing additional equity or equity-linked securities;
•the inability to execute financing plans to alleviate future conditions that may cause substantial doubt about HEI’s and the Utilities’ ability to continue as a going concern prior to the issuance of their respective annual financial statements, which could result in an event of default and an acceleration of the Company’s and the Utilities’ debt and lead to filing for bankruptcy protection if waivers from lenders are not received;
•extreme weather events, including windstorms and other natural disasters, particularly those driven or exacerbated by evolving climate dynamics, which could increase the risk of the Utilities’ equipment being damaged, becoming inoperable or contributing to a wildfire;
•future suspension, material reduction or extended delay in dividends or other distributions from operating subsidiaries to HEI;
•further downgrades by credit rating agencies in their ratings of the securities of HEI and Hawaiian Electric and their impact on results of financing efforts;
•the risks of suffering losses and incurring liabilities that are uninsured (e.g., damages to the Utilities’ transmission and distribution system and losses from business interruption) or underinsured (e.g., losses not covered as a result of insurance deductibles or other exclusions or exceeding policy limits), and the risks associated with the operation of transmission and distribution assets and power generation facilities, including public and employee safety issues, and assets causing or contributing to wildfires;
•international, national and local economic and political conditions—including the state of the Hawaii tourism, defense and construction industries; the strength or weakness of the Hawaii and continental U.S. real estate markets; decisions concerning the extent of the presence of the federal government and military in Hawaii; the implications and potential impacts of federal government shutdowns, including the impact to the Utilities’ customers’ ability to pay their electric bills and the impact on the State of Hawaii economy; the implications and potential impacts of U.S. and foreign capital and credit market conditions and federal, state and international responses to those conditions; the potential impacts of global and local developments (including global economic conditions and uncertainties, unrest, terrorist acts, wars, conflicts, political protests, deadly virus epidemic or other crisis); the effects of changes that have or may occur in U.S. policy, such as with respect to immigration and trade; and pandemics;
•the ability to adequately address risks and capitalize on opportunities related to the Company’s and the Utilities’ sustainability priority areas, which include safety, reliability and resilience, including relating to wildfires and other extreme weather events, decarbonization, economic health and affordability, secure digitalization, human capital management, employee engagement, and climate-related risks and opportunities;
•citizen activism, including civil unrest, especially in times of severe economic depression and heightened social and political divisions, which could negatively impact customers and employees, impair the ability of the Company and the Utilities to operate and maintain their facilities in an effective and safe manner, and citizen or stakeholder activism that could delay the construction, increase project costs 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-related goals;
iv
•the effects of actions or inaction of the U.S. government or related agencies, including those related to the U.S. debt ceiling or budget funding, monetary policy, trade policy, energy and environmental policy, and other policy and regulatory changes advanced or proposed by the current administration;
•weather, natural disasters (e.g., hurricanes, earthquakes, tsunamis, lightning strikes, lava flows and the effects of evolving climate dynamics, such as more severe storms, flooding, droughts, heat waves, and rising sea levels) and wildfires, including their impact on the resilience and reliability and cost of the Company’s and Utilities’ operations, and the economy;
•the timing, speed and extent of changes in interest rates and the shape of the yield curve, which could result in higher borrowing costs and changes in market liquidity;
•the continued ability of the Company and the Utilities to access the credit and capital markets to fund necessary investments and expenditures (e.g., to obtain short-term and long-term debt financing, including lines of credit, and, in the case of HEI, to issue common stock) under volatile and challenging market conditions, and the potential higher cost of such financings, if available, and due to the uncertainties associated with the costs related to the Maui windstorm and wildfires;
•the risks inherent in changes in the value of the Company’s pension and other retirement plan assets, and the risks inherent in changes in the value of the Company’s pension liabilities, including changes driven by stock market values, interest rates and mortality improvements;
•changes in laws, regulations (including tax regulations), market conditions, interest rates and other factors that result in changes in assumptions used to calculate retirement benefits costs and funding requirements;
•the potential delay by the Public Utilities Commission of the State of Hawaii (PUC) in considering (and potential disapproval of actual or proposed) proposals related to rate rebasing, performance-based regulation (PBR), wildfire safety, renewable energy or grid resiliency, among others, and related costs; reliance by the Utilities on outside parties such as the State, IPPs and developers; supply-chain challenges; and uncertainties surrounding technologies, solar power, wind power, biofuels, liquefied natural gas, environmental assessments required to meet RPS and other climate-related goals; the impacts of implementation of the wildfire mitigation, renewable energy and resilience proposals on future costs of electricity and potential penalties imposed by the PUC for delays in the commercial operations of renewable energy projects;
•the ability of the Utilities to develop, execute and recover the implementation costs of the Utilities’ action plans included in their Integrated Grid Plan, which was accepted by the PUC in 2024, due to the recent issuance of the PUC’s 2024 Inclinations on the Future of Energy in Hawaii, Governor Josh Green’s Executive Order No. 25-01, Accelerating Hawaii’s Transition Toward 100 Percent Renewable Energy, and the Hawaii State Energy Office’s Alternative Fuel, Repowering and Energy Transition Study on the aforementioned plans of the Utilities;
•the ability of the Utilities to recover undepreciated cost of fossil fuel generating units, if they are required to be retired before the end of their expected useful life;
•capacity and supply constraints or difficulties, especially if generating units (utility-owned or IPP-owned) fail or measures such as demand-side management, distributed generation, combined heat and power or other firm capacity supply-side resources fall short of achieving their forecasted benefits or are otherwise insufficient to reduce or meet peak demand;
•high and/or volatile fuel prices, which increases working capital requirements and customer bills, or delivery of adequate fuel by suppliers (including as a result of the Iran war, Russia-Ukraine war and conflicts in the Middle East), which could affect the reliability of utility operations, and the continued availability to the Utilities of their Energy Cost Recovery Clauses (ECRCs);
•the continued availability to the Utilities or modifications of other cost recovery mechanisms, including the Purchased Power Adjustment Clauses (PPACs), annual revenue adjustment (ARA) and pension and postretirement benefits other than pensions (OPEB) tracking mechanisms, and the continued decoupling of revenues from sales to mitigate the effects of declining kilowatt-hour sales;
•the ability of the Utilities to recover increasing or additional costs (e.g., due to trade policies imposed by the current administration, tariffs, inflation, or other factors impacting prices) and earn a reasonable return on capital investments not covered by the ARA, while providing the customer dividend required by PBR;
•the impact from the PUC’s modification of the PBR for the Utilities pursuant to Act 005, Session Laws 2018, including the potential changes to existing and/or addition of new Performance Incentive Mechanisms (PIMs), third-party proposals adopted by the PUC, and the implications of not achieving performance incentive goals;
•the impact of fuel price levels and volatility on customer satisfaction and political and regulatory support for the Utilities;
•unfavorable changes in economic conditions, such as sustained inflation, higher interest rates or recession, that negatively impact the ability of the Company’s customers to pay their utility bills and increase operating costs of the Utilities that cannot be passed on to, or recovered, from customers;
•the risks associated with increasing reliance on renewable energy, including the availability and cost of non-fossil fuel supplies for renewable energy generation and the operational impacts and related cost impacts of adding intermittent sources of renewable energy to the electric grid;
•the growing risk that energy production from renewable generating resources may be curtailed and the interconnection of additional resources will be constrained as more generating resources are added to the Utilities’ electric systems and as customers reduce their energy usage;
•the ability of IPPs to deliver the firm capacity anticipated in their power purchase agreements (PPAs);
•the potential that, as 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;
•the ability of the Utilities to negotiate, periodically, favorable agreements for significant resources such as fuel supply contracts and collective bargaining agreements and avoid or mitigate labor disputes and work stoppages;
v
•new technological developments that could affect the operations and prospects of the Utilities or their competitors such as the commercial development of energy storage and microgrids;
•the potential that cyber or physical security incidents, including potential incidents at HEI, its subsidiaries (including at electric utility plants), third-party service providers, contractors and customers with whom they have shared data (IPPs, distributed energy resources aggregators and customers enrolled under distributed energy resources programs) and incidents at data processing centers used, to the extent not prevented by physical and cybersecurity protections, could result in operational disruption; the misappropriation or loss of confidential or proprietary assets, information or data, including customer, employee, financial, or operating system information, or intellectual property; corruption of data; or potential costs, lost revenues, litigation, or reputational harm;
•failure to achieve remaining cost savings commitment related to the management audit recommendations of $6.6 million per year during the multi-year rate period (MRP) from June 2021 to May 2026, and continuing until the second MRP begins;
•federal, state, county and international governmental and regulatory actions, such as existing, new and changes in laws, rules and regulations applicable to HEI and the Utilities (including changes in taxation and tax rates, increases in capital requirements, regulatory policy changes, environmental laws and regulations (including resulting compliance costs and risks of fines and penalties and/or liabilities), the regulation of greenhouse gas emissions, governmental fees and assessments, and potential carbon pricing or “cap and trade” legislation that may fundamentally alter costs to produce electricity and accelerate the move to renewable generation);
•the impact from the PUC’s implementation of wheeling for the Utilities, including cost shifting and customer equity considerations, the potential increased competition, and other legal and technical implications, pursuant to Act 266, which authorizes wheeling of renewable energy and requires the PUC to establish associated policies and procedures;
•the impact of competitive pressures from third-party alternative generation resources and regulatory changes affecting the Company’s utility franchise may negatively impact its growth prospects, market position, and stock price;
•developments in laws, regulations and policies governing protections for historic, archaeological and cultural sites, and plant and animal species and habitats, as well as developments in the implementation and enforcement of such laws, regulations and policies;
•discovery of conditions that may be attributable to historical chemical releases, including any necessary investigation and remediation, and any associated enforcement, litigation or regulatory oversight;
•decisions by the PUC in rate cases and other proceedings (including the risks of delays in the timing of decisions, adverse changes in final decisions from interim decisions and the disallowance of project costs as a result of adverse regulatory audit reports or otherwise);
•decisions by the PUC and by other agencies and courts on land use, environmental and other permitting issues (such as required corrective actions, restrictions and penalties that may arise, such as with respect to environmental conditions or RPS);
•the risks associated with the geographic concentration of HEI’s businesses;
•changes in accounting principles applicable to HEI and its subsidiaries, including the adoption of new U.S. accounting standards, the potential discontinuance of regulatory accounting related to PBR or other regulatory changes, the effects of potentially required consolidation of variable interest entities (VIEs), or required finance lease or on-balance-sheet operating lease accounting for PPAs with IPPs;
•the final outcome of tax positions taken by HEI and its subsidiaries;
•the ability to effectively utilize federal and state net operating loss carryforwards;
•the Company’s reliance on third parties and the risk of their non-performance; and
•other risks or uncertainties described elsewhere in this report (e.g., Item 1A. Risk Factors) and in other reports previously and subsequently filed by HEI and/or Hawaiian Electric with the Securities and Exchange Commission (SEC).
Forward-looking statements speak only as of the date of the report, presentation or filing in which they are made. Except to the extent required by the federal securities laws, HEI, Hawaiian Electric, Pacific Current and their subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether written or oral and whether as a result of new information, future events or otherwise.
vi
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Hawaiian Electric Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (unaudited)
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||||||
| (in thousands, except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||
| Electric utility | $ | $ | $ | $ | ||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Total revenues | ||||||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
Electric utility (includes $ | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Total expenses | ||||||||||||||||||||||||||
Operating income (loss) | ||||||||||||||||||||||||||
| Electric utility | ||||||||||||||||||||||||||
| Other | ( | ( | ( | ( | ||||||||||||||||||||||
Total operating income | ||||||||||||||||||||||||||
| Retirement defined benefits credit—other than service costs | ||||||||||||||||||||||||||
| Interest expense, net (Note 2) | ( | ( | ( | ( | ||||||||||||||||||||||
| Allowance for borrowed funds used during construction | ||||||||||||||||||||||||||
| Allowance for equity funds used during construction | ||||||||||||||||||||||||||
Interest and dividend income | ||||||||||||||||||||||||||
| Gain on sale of investment and net unrealized gain on investment measured at fair value | ||||||||||||||||||||||||||
| Gain (loss) on sale of subsidiaries and impairment losses on subsidiary assets sold and assets formerly classified as held for sale | ( | ( | ( | |||||||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||||||||
| Income taxes | ( | |||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||
| Preferred stock dividends of subsidiaries | ||||||||||||||||||||||||||
| Net income for common stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Basic earnings per common share | $ | $ | $ | $ | ||||||||||||||||||||||
| Diluted earnings per common share | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted-average number of common shares outstanding | ||||||||||||||||||||||||||
| Net effect of potentially dilutive shares (share-based compensation programs) | ||||||||||||||||||||||||||
| Weighted-average shares assuming dilution | ||||||||||||||||||||||||||
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2025 Form 10-K.
1
Hawaiian Electric Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (unaudited)
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
Net income for common stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Other comprehensive loss, net of taxes: | ||||||||||||||||||||||||||
Derivatives qualified as cash flow hedges: | ||||||||||||||||||||||||||
Unrealized interest rate hedging gains (losses), net of taxes of | ( | |||||||||||||||||||||||||
Reclassification adjustment to net income, net of taxes of $( | ( | ( | ( | ( | ||||||||||||||||||||||
| Retirement benefit plans: | ||||||||||||||||||||||||||
Adjustment for amortization of net gains recognized during the period in net periodic benefit cost, net of taxes of $( | ( | ( | ( | ( | ||||||||||||||||||||||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory accounts, net of taxes of $ | ||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | ( | ( | ( | ( | ||||||||||||||||||||||
| Comprehensive income attributable to Hawaiian Electric Industries, Inc. | $ | $ | $ | $ | ||||||||||||||||||||||
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2025 Form 10-K.
2
Hawaiian Electric Industries, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)
| (dollars in thousands) | September 30, 2026 | December 31, 2025 | ||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash | ||||||||||||||
| Accounts receivable and unbilled revenues, net | ||||||||||||||
| Regulatory assets | ||||||||||||||
| Other | ||||||||||||||
Assets held for sale | ||||||||||||||
| Total current assets | ||||||||||||||
| Noncurrent assets: | ||||||||||||||
Property, plant and equipment, net of accumulated depreciation of $ | ||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||
| Regulatory assets | ||||||||||||||
| Defined benefit pension and other postretirement benefit plans asset | ||||||||||||||
| Other | ||||||||||||||
| Total noncurrent assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Liabilities and shareholders’ equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Interest and dividends payable | ||||||||||||||
| Current portion of long-term debt, net | ||||||||||||||
| Regulatory liabilities | ||||||||||||||
| Wildfire related claims | ||||||||||||||
| Other | ||||||||||||||
Liabilities held for sale | ||||||||||||||
| Total current liabilities | ||||||||||||||
Noncurrent liabilities: | ||||||||||||||
Long-term debt, net | ||||||||||||||
| Operating lease liabilities | ||||||||||||||
| Finance lease liabilities | ||||||||||||||
| Regulatory liabilities | ||||||||||||||
Defined benefit pension liability | ||||||||||||||
Wildfire tort-related claims | ||||||||||||||
| Other | ||||||||||||||
Total noncurrent liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
Commitments and contingencies (Notes 2 and 4) | ||||||||||||||
| Shareholders’ equity | ||||||||||||||
Preferred stock, no par value, authorized | ||||||||||||||
Common stock, no par value, authorized | ||||||||||||||
| Retained earnings (deficit) | ( | ( | ||||||||||||
Accumulated other comprehensive income, net of taxes | ||||||||||||||
| Total shareholders’ equity | ||||||||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||||||||
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2025 Form 10-K.
3
Hawaiian Electric Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited)
| Common stock | Retained earnings (deficit) | Accumulated other comprehensive income | ||||||||||||||||||||||||||||||
| (in thousands) | Shares | Amount | Total | |||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
| Net income for common stock | — | — | — | |||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | — | — | — | ( | ( | |||||||||||||||||||||||||||
| Share-based expenses and other, net | — | — | ||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | ( | |||||||||||||||||||||||||||||||
| Net income for common stock | — | — | — | |||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | — | — | — | ( | ( | |||||||||||||||||||||||||||
| Share-based expenses and other, net | — | — | ||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | ( | |||||||||||||||||||||||||||||||
| Net income for common stock | — | — | — | |||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | — | — | — | ( | ( | |||||||||||||||||||||||||||
| Share-based expenses and other, net | — | — | ||||||||||||||||||||||||||||||
| Balance, September 30, 2026 | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
| Net income for common stock | — | — | — | |||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | — | — | — | ( | ( | |||||||||||||||||||||||||||
| Share-based expenses and other, net | — | — | ||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | ( | |||||||||||||||||||||||||||||||
| Net income for common stock | — | — | — | |||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | — | — | — | ( | ( | |||||||||||||||||||||||||||
| Share-based expenses and other, net | — | — | ||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | ( | |||||||||||||||||||||||||||||||
| Net income for common stock | — | — | — | |||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | — | — | — | ( | ( | |||||||||||||||||||||||||||
| Share-based expenses and other, net | ( | — | — | ( | ||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2025 Form 10-K.
4
Hawaiian Electric Industries, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
| Nine months ended September 30 | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Cash flows from operating activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities | ||||||||||||||
| Depreciation of property, plant and equipment | ||||||||||||||
| Other amortization | ||||||||||||||
| Gain on sale of ASB investment | ( | |||||||||||||
| Unrealized gain on remaining investment in ASB | ( | |||||||||||||
| Loss on sale of subsidiaries and impairment loss on assets sold and assets previously classified as held for sale | ||||||||||||||
| Deferred income taxes | ( | |||||||||||||
| Share-based compensation expense | ||||||||||||||
| Allowance for equity funds used during construction | ( | ( | ||||||||||||
| Other | ( | ( | ||||||||||||
| Changes in assets and liabilities | ||||||||||||||
| Increase in accounts receivable and unbilled revenues, net | ( | ( | ||||||||||||
Increase in fuel oil stock | ( | ( | ||||||||||||
Increase in materials and supplies | ( | ( | ||||||||||||
| Decrease (increase) in regulatory assets | ( | |||||||||||||
| Increase in regulatory liabilities | ||||||||||||||
| Increase in accounts, interest and dividends payable | ||||||||||||||
| Change in prepaid and accrued income taxes, tax credits and utility revenue taxes | ( | ( | ||||||||||||
Change in defined benefit pension and other postretirement benefit plans asset/liability | ( | ( | ||||||||||||
| Settlement payments | ( | |||||||||||||
| Increase (decrease) in wildfire-related claims | ( | |||||||||||||
| Change in other assets and liabilities | ( | |||||||||||||
| Net cash provided by (used in) operating activities | ( | |||||||||||||
| Cash flows from investing activities | ||||||||||||||
Proceeds from sale of subsidiaries | ||||||||||||||
| Proceeds from sale of assets | ||||||||||||||
| Capital expenditures | ( | ( | ||||||||||||
Other, net | ||||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities | ||||||||||||||
| Repayment of short-term debt | ( | |||||||||||||
| Proceeds from issuance of long-term debt | ||||||||||||||
| Repayment of long-term debt | ( | ( | ||||||||||||
| Withheld shares for employee taxes on vested share-based compensation | ( | ( | ||||||||||||
| Preferred stock dividends of subsidiaries | ( | |||||||||||||
| Other | ( | ( | ||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||
Net decrease in cash, cash equivalents and restricted cash | ( | ( | ||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | ||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | ||||||||||||||
| Less: Restricted cash | ( | ( | ||||||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||||||||
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2025 Form 10-K.
5
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (unaudited)
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Fuel oil | ||||||||||||||||||||||||||
| Purchased power | ||||||||||||||||||||||||||
| Other operation and maintenance | ||||||||||||||||||||||||||
| Wildfire tort-related claims (Note 2) | ( | |||||||||||||||||||||||||
| Depreciation | ||||||||||||||||||||||||||
| Taxes, other than income taxes | ||||||||||||||||||||||||||
| Total expenses | ||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Allowance for equity funds used during construction | ||||||||||||||||||||||||||
| Retirement defined benefits credit—other than service costs | ||||||||||||||||||||||||||
| Interest expense and other charges, net (Note 2) | ( | ( | ( | ( | ||||||||||||||||||||||
| Allowance for borrowed funds used during construction | ||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||||||||
| Income taxes | ||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||
| Preferred stock dividends of subsidiaries | ||||||||||||||||||||||||||
| Net income attributable to Hawaiian Electric | ||||||||||||||||||||||||||
| Preferred stock dividends of Hawaiian Electric | ||||||||||||||||||||||||||
| Net income for common stock | $ | $ | $ | $ | ||||||||||||||||||||||
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2025 Form 10-K.
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (unaudited)
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
Net income for common stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Other comprehensive income (loss), net of taxes: | ||||||||||||||||||||||||||
| Retirement benefit plans: | ||||||||||||||||||||||||||
Adjustment for amortization of net gains recognized during the period in net periodic benefit cost, net of taxes of $( | ( | ( | ( | ( | ||||||||||||||||||||||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory accounts, net of taxes of $ | ||||||||||||||||||||||||||
| Other comprehensive income (loss), net of taxes | ( | ( | ( | |||||||||||||||||||||||
Comprehensive income attributable to Hawaiian Electric Company, Inc. | $ | $ | $ | $ | ||||||||||||||||||||||
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2025 Form 10-K.
6
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)
| (dollars in thousands, except par value) | September 30, 2026 | December 31, 2025 | ||||||||||||
| Assets | ||||||||||||||
| Property, plant and equipment | ||||||||||||||
| Utility property, plant and equipment | ||||||||||||||
| Land | $ | $ | ||||||||||||
| Plant and equipment | ||||||||||||||
| Right-of-use assets - finance lease | ||||||||||||||
| Less accumulated depreciation | ( | ( | ||||||||||||
| Construction in progress | ||||||||||||||
| Utility property, plant and equipment, net | ||||||||||||||
Nonutility property, plant and equipment, less accumulated depreciation of $ | ||||||||||||||
| Total property, plant and equipment, net | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | ||||||||||||||
| Customer accounts receivable, net | ||||||||||||||
| Accrued unbilled revenues, net | ||||||||||||||
| Other accounts receivable, net | ||||||||||||||
| Fuel oil stock, at average cost | ||||||||||||||
| Materials and supplies, at average cost | ||||||||||||||
| Prepayments and other | ||||||||||||||
| Regulatory assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Other long-term assets | ||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||
| Regulatory assets | ||||||||||||||
Defined benefit pension and other postretirement benefit plans asset | ||||||||||||||
Investment in unconsolidated affiliate | ||||||||||||||
| Other | ||||||||||||||
| Total other long-term assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
(continued)
7
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited) (continued)
| (dollars in thousands, except par value) | September 30, 2026 | December 31, 2025 | ||||||||||||
| Capitalization and liabilities | ||||||||||||||
| Capitalization | ||||||||||||||
Common stock ($6 2/3 par value, authorized | $ | $ | ||||||||||||
| Premium on capital stock | ||||||||||||||
| Retained earnings | ||||||||||||||
Additional paid-in capital | ||||||||||||||
| Accumulated other comprehensive income, net of taxes-retirement benefit plans | ||||||||||||||
| Common stock equity | ||||||||||||||
| Long-term debt, net | ||||||||||||||
| Total capitalization | ||||||||||||||
| Commitments and contingencies (Notes 2 and 4) | ||||||||||||||
| Current liabilities | ||||||||||||||
| Current portion of operating lease liabilities | ||||||||||||||
| Current portion of long-term debt, net | ||||||||||||||
| Accounts payable | ||||||||||||||
| Interest and preferred dividends payable | ||||||||||||||
| Taxes accrued, including revenue taxes | ||||||||||||||
| Regulatory liabilities | ||||||||||||||
Wildfire tort-related claims | ||||||||||||||
| Other | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Deferred credits and other liabilities | ||||||||||||||
| Operating lease liabilities | ||||||||||||||
| Finance lease liabilities | ||||||||||||||
| Deferred income taxes | ||||||||||||||
| Regulatory liabilities | ||||||||||||||
| Unamortized tax credits | ||||||||||||||
| Defined benefit pension liability | ||||||||||||||
Wildfire tort-related claims | ||||||||||||||
| Other | ||||||||||||||
| Total deferred credits and other liabilities | ||||||||||||||
| Total capitalization and liabilities | $ | $ | ||||||||||||
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2025 Form 10-K.
8
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Common Stock Equity (unaudited)
| Common stock | Premium on capital | Retained | Additional paid-in | Accumulated other comprehensive | ||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Shares | Amount | stock | earnings | capital | income | Total | |||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Net income for common stock | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||
Common stock dividends | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| Net income for common stock | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||
| Common stock dividends | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Additional paid-in capital (Note 11) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
Net income for common stock | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of taxes | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Common stock dividends | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Additional paid-in capital (Note 11) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2026 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Net income for common stock | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||
| Additional paid-in capital | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Net income for common stock | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||
| Common stock dividends | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Additional paid-in capital | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Net income for common stock | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||
| Common stock dividends | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2025 Form 10-K.
9
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
| Nine months ended September 30 | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Net income | $ | $ | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||||
| Depreciation of property, plant and equipment | ||||||||||||||
| Other amortization | ||||||||||||||
| Deferred income taxes | ( | |||||||||||||
| State refundable credit | ( | ( | ||||||||||||
| Insurance recovery related to wildfire tort-related claim | ( | |||||||||||||
| Bad debt expense | ||||||||||||||
| Allowance for equity funds used during construction | ( | ( | ||||||||||||
| Other | ||||||||||||||
| Changes in assets and liabilities | ||||||||||||||
| Increase in accounts receivable | ( | ( | ||||||||||||
| Increase in accrued unbilled revenues | ( | ( | ||||||||||||
| Increase in fuel oil stock | ( | ( | ||||||||||||
| Increase in materials and supplies | ( | ( | ||||||||||||
| Decrease (increase) in regulatory assets | ( | |||||||||||||
| Increase in regulatory liabilities | ||||||||||||||
| Increase in accounts payable | ||||||||||||||
| Change in prepaid and accrued income taxes, tax credits and revenue taxes | ( | |||||||||||||
Change in defined benefit pension and other postretirement benefit plans asset/liability | ( | ( | ||||||||||||
| Decrease in wildfire tort-related claims | ( | |||||||||||||
| Change in other assets and liabilities | ( | ( | ||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows from investing activities | ||||||||||||||
| Capital expenditures | ( | ( | ||||||||||||
| Other | ||||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities | ||||||||||||||
| Common stock dividends | ( | ( | ||||||||||||
| Preferred stock dividends of Hawaiian Electric and subsidiaries | ( | |||||||||||||
Proceeds from capital contribution from parent | ||||||||||||||
| Repayment of short-term debt | ( | |||||||||||||
| Proceeds from issuance of long-term debt | ||||||||||||||
| Repayment of long-term debt | ( | ( | ||||||||||||
| Payments of obligations under finance leases | ( | ( | ||||||||||||
| Other | ( | ( | ||||||||||||
| Net cash provided by (used in) financing activities | ( | |||||||||||||
| Net increase (decrease) in cash and cash equivalents | ( | |||||||||||||
Cash and cash equivalents, beginning of period | ||||||||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||||||||
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2025 Form 10-K.
10
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Note 1 · Basis of presentation
In the opinion of HEI’s and Hawaiian Electric’s management, the accompanying unaudited condensed consolidated financial statements contain all material adjustments required by GAAP to fairly state consolidated HEI’s and Hawaiian Electric’s financial positions as of September 30, 2026 and December 31, 2025, the results of their operations for the three and nine months ended September 30, 2026 and 2025, and cash flows for the nine months ended September 30, 2026 and 2025. All such adjustments are of a normal recurring nature, unless otherwise disclosed below or in other referenced material. Results of operations for interim periods are not necessarily indicative of results for the full year.
Assets held for sale and discontinued operations. In June 2025, the Company determined the net assets of Mahipapa, the remaining Pacific Current operating subsidiary, met the criteria for classification as held for sale. The Company reclassified these assets and liabilities as “Assets held for sale” and “Liabilities held for sale” in the condensed consolidated balance sheets as of December 31, 2025. In addition, the Company had also determined that the planned sale of this asset did not represent a strategic shift having a major effect on the Company’s operations and financial results, and therefore did not meet the criteria for classification as discontinued operations.
During the quarter, the Company determined Mahipapa to be an abandoned asset which no longer met the criteria for classification as held for sale. Accordingly, the related assets and liabilities were reclassified to held and used. Upon reclassification, these assets were written down to their estimated net salvage value at the date of the reclassification. For further discussion, see “Assets held for sale - Mahipapa” in Note 3.
Recent accounting pronouncements.
Income statement disclosures. In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The guidance requires more detailed information about specified categories of expenses included in certain captions presented on the face of the income statement. ASU No. 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this amendment on the Company’s consolidated financial statements.
Accounting for Internal-use software. In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software. The guidance removes all references to project stages in software development and requires capitalization of internal-use software costs to begin when management has authorized and committed to funding the project and it is probable the project will be completed and used to perform the intended function. ASU No. 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of this amendment on the Company’s consolidated financial statements.
Accounting for government grants. In December 2025, the FASB issued ASU No. 2025-10, Accounting for Government Grants Received by Business Entities. The ASU adds guidance on the recognition, measurement and presentation of government grants received by business entities. ASU No. 2025-10 is effective for annual reporting periods beginning after December 15, 2028, and for interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of this amendment on the Company’s consolidated financial statements.
Note 2 · Maui windstorm and wildfires
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 windstorm and wildfires were fueled by extreme winds and drought-like conditions in those parts of Maui.
11
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Restoration costs and recoveries. The Utilities are continuing restoration work to rebuild portions of the electric system in Lahaina to ensure safe and reliable power to customers. Restoration efforts include the rebuilding of electrical lines along former routes in the Lahaina area with the installation of new poles and electrical equipment. Ongoing work is focused on reestablishing electrical service to homes as they are being built.
The Public Utilities Commission of the State of Hawaii (PUC) has issued orders authorizing deferred accounting treatment for certain incremental non-labor expenses related to the Maui windstorm and wildfires incurred from August 8, 2023 through December 31, 2025. The approval pertains only to deferred cost treatment for expenses that are not already part of base rates; any actual recovery of deferred costs will be the subject of a separate application. As of September 30, 2026, the Utilities have deferred $79.1 million of these incremental costs to a regulatory asset.
Tort-related legal claims. HEI and the Utilities each were named in several thousand lawsuits related to the Maui windstorm and wildfires. These lawsuits (collectively, tort-related legal claims) named as defendants HEI, the Utilities, and others, including the County of Maui, the State of Hawaii and related state entities, private landowners and developers, and telecommunications companies. Most of these lawsuits alleged that the defendants were responsible for, and/or negligent in failing to prevent or respond to, the wildfires that led to property destruction and loss of life. The defendants filed lawsuits and/or asserted cross-claims against one another, and approximately 200 subrogation insurers brought actions against certain of the defendants, including HEI and the Utilities.
Effective November 1, 2024, HEI and Hawaiian Electric entered into two definitive settlement agreements (one with class plaintiffs and one with lawyers representing individual plaintiffs, collectively, the Settlement Agreements) to settle the tort-related legal claims in the litigation arising out of the Maui windstorm and wildfires on a global basis without any admission of liability. The Settlement Agreements, including mutual releases among the parties, became effective upon the satisfaction of the last remaining condition on April 10, 2026. Most of the thousands of lawsuits have now been dismissed.
Under the Settlement Agreements, HEI and Hawaiian Electric are obligated to contribute a total of $1.99 billion, including $75 million previously contributed to the One ‘Ohana Initiative, of the total defendant contribution of approximately $4.04 billion. HEI and Hawaiian Electric paid the first of four equal annual $479 million installments on April 10, 2026. In April 2026, HEI recorded a $479 million noncash equity contribution to Hawaiian Electric, which used it to relieve the current wildfire tort-related claim liability. See Note 11. The funds for the first installment were previously raised through HEI’s September 2024 equity offering and held in a special purpose vehicle formed specifically to hold the first payment pending satisfaction of all conditions to payment. The remaining installments are due in April 2027, April 2028, and April 2029. HEI and Hawaiian Electric have the option to accelerate the payments, in whole or in part, with such accelerated payments to be discounted at a rate of 5.5 % per annum. HEI and Hawaiian Electric are also obligated to contribute a share to the settlement administration fees only if certain other sources are exhausted when such fees become due, for which $4.5 million was accrued as of September 30, 2026, based on the best estimate at this time.
The Settlement Agreements also provide that $500 million of the total settlement payments will be reserved and made available to defendants to defray the cost to resolve any claims brought by plaintiffs who do not release claims as part of either Settlement Agreement. Approximately 70 plaintiffs who “opted out” of the class Settlement Agreement have not signed individual agreements and releases to join the global settlement. Some of these opt outs are pursuing their claims through lawsuits in state and federal court, including two putative class actions pending in federal court; others have stated that they will accept settlements in line with the global settlement amount; and others have indicated they are abandoning their claims. The defendants are continuing in their efforts to resolve all of these claims through the $500 million holdback fund. Based on current projections, HEI and Hawaiian Electric believe that the $500 million holdback will be sufficient to resolve these claims.
The Company believes the tort-related legal claims arising out of the Maui windstorm and wildfires have been substantially concluded and that settlements or judgments from any remaining claims will be funded from the $500 million holdback. If additional liabilities were to be incurred, or if the holdback is insufficient to cover remaining claims, however, the losses could be material to the Company’s results of operations, financial position and cash flows and could result in violations of the financial covenants in the Company’s debt agreements. If any such losses were to be sufficiently high, the Company may not have liquidity or the ability to access liquidity at levels necessary to satisfy such losses. However, any possible loss in excess of the amount recorded cannot reasonably be estimated at this time.
After the final condition to payment under the Settlement Agreements was satisfied in the second quarter of 2026, the Utilities remeasured the remaining settlement liability at present value using their incremental borrowing rate, in accordance with Accounting Standards Codification Topic 835-30 Imputation of Interest. As of June 30, 2026, the remeasurement reduced Hawaiian Electric’s remaining settlement liability by $154 million and was recognized as a reduction to expense. The discounted settlement liability will accrete through interest expense under the effective interest method until the applicable settlement payment due dates, when its carrying amount is expected to equal the remaining gross settlement payment obligation. Accretion expense for the three and nine months ended September 30, 2026, was $18 million and $36 million, respectively and is reported in “Interest expense, net” and “Interest expense and other charges, net” on HEI’s and the Utilities’ Condensed Consolidated Statements of Income, respectively. On September 16, 2026, HEI made a partial prepayment of
12
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
$40 million towards the second installment amount due in April 2027. As of September 30, 2026, the remaining settlement liability, measured at present value, was classified as a current liability of $376 million and a noncurrent liability of $903 million on HEI’s and the Utilities’ Condensed Consolidated Balance Sheets. On October 28, 2026, HEI made another partial prepayment of $40 million towards the second installment amount due in April 2027.
Securities class action. On August 24, 2023, a putative securities class action was filed in the United States District Court for the Northern District of California claiming violations of the Securities Exchange Act of 1934 (the Exchange Act) and Rule 10b-5 promulgated thereunder against HEI and Hawaiian Electric and certain of HEI’s and Hawaiian Electric’s current and former officers, and Section 20(a) of the Exchange Act against certain current and former officers (the Securities Action). The lawsuit broadly alleges that the defendants made materially false and misleading statements or omissions regarding the wildfire prevention and safety protocols and related matters.
On November 5, 2025, the parties signed a binding term sheet to settle the Securities Action (the Securities Action Term Sheet) following negotiations facilitated by a mediator. On January 5, 2026, the parties executed a definitive stipulation of settlement (the Securities Action Stipulation of Settlement) that will provide for the complete resolution of the Securities Action in exchange for a payment by the Company of $47.8 million as part of the overall settlement described below. As of now, the only remaining condition is the final approval of the Securities Action Stipulation of Settlement and dismissal of the case. In connection with the settlement of the Securities Action, there will be no admission of liability by the Company or any defendants and the Company, the defendants, and related persons will receive a customary full release of all claims. On March 3, 2026, the United States District Court for the Northern District of California preliminarily approved the Securities Action Stipulation of Settlement. On October 15, 2026, the court held a hearing to finally approve the settlement. On October 23, 2026, the court issued its order finally approving the settlement. On November 5, 2026, the court entered its order of final judgment.
In connection with the execution of the Securities Action Term Sheet, HEI accrued $47.8
Shareholder derivative lawsuits. Two putative shareholder derivative actions were filed in the Circuit Court of the First Circuit, State of Hawaii on September 11, 2023 and on November 6, 2024. In addition, three putative shareholder derivative actions were filed in the United States District Court for the Northern District of California between December 26, 2023 and February 8, 2024, and two putative shareholder derivative actions were filed in the United States District Court for the District of Hawaii between April 8, 2024 and June 8, 2024. All of the lawsuits were purportedly brought by shareholders on behalf of nominal defendants HEI and Hawaiian Electric against certain current and former officers and directors of HEI and Hawaiian Electric. In all of the cases, the plaintiffs generally alleged state law breaches of fiduciary duty, abuse of control, corporate waste, unjust enrichment, gross mismanagement and aiding and abetting breaches of fiduciary duty claims in connection with the Maui windstorm and wildfires and certain of the Company’s prior public disclosures, and some of them added claims based on purported violations of federal securities laws.
On November 5, 2025, the parties signed a binding term sheet (the Derivative Litigation Term Sheet) to settle all of the outstanding derivative actions described above (the Derivative Actions). The Derivative Litigation Term Sheet was signed following negotiations facilitated by a mediator. On December 31, 2025, the parties executed a definitive settlement agreement (the Derivative Litigation Settlement Agreement) that provides for a complete resolution of the claims asserted in the Derivative Actions in exchange for a payment on behalf of the individual defendants by the Company’s insurers in the amount of $100 million (the Derivative Litigation Settlement Proceeds, which was fully funded by the directors and officers’ liability insurance policies), which will be used in part to pay the $47.8 million for the Securities Action Stipulation of Settlement and fees and expenses for plaintiffs’ counsel. In connection with the settlement of the Derivative Actions, there were no admissions of liability, and the defendants and related persons received a customary full release of all claims. On March 9, 2026, the United States District Court for the District of Hawaii preliminarily approved the Derivative Litigation Settlement Agreement. On May 28, 2026, the United States District Court for the District of Hawaii issued an order of final approval of the Derivative Litigation Settlement Agreement and dismissal of the Derivative Actions with prejudice. The court granted plaintiffs’ award for attorneys’ fees (25 % of the Derivative Litigation Settlement Proceeds), plus expenses, and service fees for the plaintiffs. On June 29, 2026, the judgment dismissing the Derivative Actions with prejudice became final. On July 14, 2026 and consistent with that final judgment and the Derivative Litigation Settlement Agreement, the Circuit Court of the First Circuit, State of Hawaii approved the parties’ notice of voluntary dismissal with prejudice of the last two Derivative Actions.
As noted above, $47.8 million of the $100 million Derivative Litigation Settlement Proceeds will be used to fund the settlement of the Securities Action. The remaining amount, the award in the Derivative Actions for the plaintiffs’ attorneys’
13
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
fees and expenses, and payment of other settlement-related expenses provided for in the term sheet, is accounted for as a contingent gain which will be recognized when realized or realizable.
Maui windstorm and wildfires costs. Legal costs in connection with the litigation and loss contingencies are expensed as incurred. The Company has $165 million of excess liability insurance and $25 million of professional liability insurance for third party claims, including claims related to wildfires, with a retention of $0.3 million and $1.0 million, respectively, and $145 million directors and officers liability insurance to cover claims related to the shareholder and derivative lawsuits, with a retention of $1.0 million. As of September 30, 2026, the Company’s insurance receivable totaled $48 million, related to the settlement of the Securities Action and the Utilities had no insurance receivable under the policies. As of September 30, 2026, HEI and its subsidiaries have approximately nil , nil and $71 million of insurance coverage remaining under the excess liability, professional liability, 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 costs and recognized as a receivable.
See table below for the incremental items related to the Maui windstorm and wildfires.
| Three months ended September 30, 2026 | Nine months ended September 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Electric utility | HEI consolidated | Electric utility | HEI consolidated | |||||||||||||||||||||||||||||||||||||||||||
| Maui windstorm and wildfires related expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
| Legal expenses | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Other expense | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Maui windstorm and wildfires related expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Insurance recoveries1 | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Settlement remeasurement2 | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Accretion expense3 | |||||||||||||||||||||||||||||||||||||||||||||||
Total Maui windstorm and wildfires related items, net | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||||
| Three months ended September 30, 2025 | Nine months ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| (in thousands) | Electric utility | HEI consolidated | Electric utility | HEI consolidated | |||||||||||||||||||||||||||||||
| Maui windstorm and wildfires related expenses: | |||||||||||||||||||||||||||||||||||
| Legal expenses | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Wildfire securities-related claims | |||||||||||||||||||||||||||||||||||
| Other expense | |||||||||||||||||||||||||||||||||||
| Total Maui windstorm and wildfires related expenses | |||||||||||||||||||||||||||||||||||
Insurance recoveries4 | ( | ( | ( | ||||||||||||||||||||||||||||||||
Deferral treatment approved by the PUC5 | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Total Maui windstorm and wildfires related expenses, net of insurance recoveries and approved deferral treatment | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
1 Includes $8.5 million recognized as an adjustment to the Wildfire tort-related claims for the nine months ended September 30, 2026.
2 Represents an adjustment related to remeasuring the remaining settlement liability at present value in accordance with Accounting Standards Codification Topic 835-30 Imputation of Interest.
3 Represents accretion expense related to remeasuring the remaining settlement liability, which is included in “Interest expense, net” and “Interest expense and other charges, net” in HEI’s and the Utilities’ Condensed Consolidated Statements of Income, respectively.
4 HEI consolidated includes insurance recovery related to the settlement of the securities class action of $47.8 1.0 million and $7.6 million, respectively, of which, $0.5 million and $4.5 million were deferred to a regulatory asset, respectively, and are reported on line “Deferral treatment approved by the PUC.”
5 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 deferred to a regulatory asset.
14
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Note 3 · Segment financial information
Reportable segments are strategic business units of the Company that offer different products and services and operate in different regulatory environments. The Company operates and reports on one
(in thousands) | Electric utility | All other | Total | |||||||||||||||||
| Three months ended September 30, 2026 | ||||||||||||||||||||
| Revenues | $ | $ | $ | |||||||||||||||||
| Depreciation and amortization | $ | $ | $ | |||||||||||||||||
| Interest and dividend income | $ | $ | $ | |||||||||||||||||
| Interest expense, net | $ | $ | $ | |||||||||||||||||
| Income before income taxes | $ | $ | $ | |||||||||||||||||
| Income taxes | ( | ( | ||||||||||||||||||
| Net income for common stock | $ | $ | $ | |||||||||||||||||
| Nine months ended September 30, 2026 | ||||||||||||||||||||
| Revenues | $ | $ | $ | |||||||||||||||||
| Depreciation and amortization | $ | $ | $ | |||||||||||||||||
Interest and dividend income | $ | $ | $ | |||||||||||||||||
| Interest expense, net | $ | $ | $ | |||||||||||||||||
Income (loss) before income taxes | $ | $ | ( | $ | ||||||||||||||||
| Income taxes | ( | |||||||||||||||||||
| Net income for common stock | $ | $ | $ | |||||||||||||||||
| Capital expenditures | $ | $ | $ | |||||||||||||||||
Total assets (at September 30, 2026) | $ | $ | $ | |||||||||||||||||
| Three months ended September 30, 2025 | ||||||||||||||||||||
| Revenues | $ | $ | $ | |||||||||||||||||
| Depreciation and amortization | $ | $ | $ | |||||||||||||||||
| Interest income | $ | $ | $ | |||||||||||||||||
| Interest expense, net | $ | $ | $ | |||||||||||||||||
Income (loss) before income taxes | $ | $ | ( | $ | ||||||||||||||||
| Income taxes | ( | |||||||||||||||||||
Net income (loss) | ( | |||||||||||||||||||
| Preferred stock dividends of subsidiaries | ( | |||||||||||||||||||
Net income (loss) for common stock | $ | $ | ( | $ | ||||||||||||||||
| Nine months ended September 30, 2025 | ||||||||||||||||||||
| Revenues | $ | $ | $ | |||||||||||||||||
| Depreciation and amortization | $ | $ | $ | |||||||||||||||||
| Interest income | $ | $ | $ | |||||||||||||||||
| Interest expense, net | $ | $ | $ | |||||||||||||||||
Income (loss) before income taxes | $ | $ | ( | $ | ||||||||||||||||
| Income taxes | ( | |||||||||||||||||||
Net income (loss) | ( | |||||||||||||||||||
| Preferred stock dividends of subsidiaries | ( | |||||||||||||||||||
Net income (loss) for common stock | $ | $ | ( | $ | ||||||||||||||||
Capital expenditures | $ | $ | $ | |||||||||||||||||
Total assets (at December 31, 2025) | $ | $ | $ | |||||||||||||||||
15
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Sales from Hamakua Energy to Hawaii Electric Light (a regulated affiliate), up until the close of its sale on March 10, 2025, are eliminated in consolidation.
ASB Hawaii. ASB Hawaii was formed in 1988 and served as the holding company for ASB prior to its sale on December 31, 2024. As part of the sale, ASB Hawaii retained a 9.9 % noncontrolling investment in ASB amounting to $44.6 million. As of December 31, 2025, the ASB investment of $44.6 million was included in “Other noncurrent assets” on the Company’s Condensed Consolidated Balance Sheets.
On September 16, 2026, ASB’s common stock commenced trading on The Nasdaq Stock Market LLC (Nasdaq) following the completion of ASB’s initial public offering (IPO) at a price of $16 per share. In connection with the IPO, ASB effected a 7,222 -to-1 forward stock split, and the Company sold 2,253,264 shares of ASB common stock, reducing its ownership interest in ASB to 6.43 %. The Company received net cash proceeds of $33.9 million from the sale and recognized a pretax realized gain, net of transaction costs, of $18.3 million, and plans to use the cash proceeds to fund partial prepayments of the wildfire settlement. As of September 30, 2026, the Company remeasured its remaining investment in ASB at fair value based on the closing price of ASB’s common stock on Nasdaq. The Company’s remaining investment, consisting of 4,181,538 shares of ASB common stock, had a fair value of $74.8 million as of September 30, 2026, resulting in the recognition of a pretax unrealized gain of $45.9 million for the quarter then ended. In 2027, the Company plans to sell its remaining shares and use the cash proceeds to fund partial prepayments of the wildfire settlement. The realized gain on the sale of ASB common stock and the unrealized gain on the remeasurement of the Company’s remaining investment in ASB are included in “Gain on sale of investment and net unrealized gain on investment measured at fair value” in the Company’s Condensed Consolidated Statements of Income. As of September 30, 2026, the ASB investment of $74.8 million was included in “Other current assets” on the Company’s Condensed Consolidated Balance Sheets.
GLST1. GLST1 was formed in November 2024 for the purpose of holding the first installment payment pursuant to the settlement of the Maui windstorm and wildfire tort-related legal claims. HEI transferred the amount of the first settlement payment, $479 million, into GLST1, which was restricted from disbursing such funds except in connection with the initial payment to the settlement funds and was classified as “Restricted cash” on HEI’s Condensed Consolidated Balance Sheet as of December 31, 2025. Effective March 31, 2025, HEI assigned 60 % of the membership interests of GLST1 to Hawaiian Electric. As of December 31, 2025, the assigned equity interests totaled $287.3 million, which was reported on “Investment in unconsolidated affiliate” on the Utilities’ Condensed Consolidated Balance Sheet. On April 10, 2026, HEI and Hawaiian Electric paid the first of four equal annual $479 million installments, and effective June 3, 2026, GLST1 was dissolved and terminated.
Pacific Current. Pacific Current was formed in 2017 to focus on investing in non-regulated renewable energy and sustainable infrastructure in the State of Hawaii to help achieve the state’s sustainability goals. As part of HEI’s comprehensive review of strategic options for Pacific Current, significant investments of Pacific Current that were made through its subsidiaries, Hamakua Energy, Mauo and Kaʻieʻie Waho were sold in 2025. Mahipapa is Pacific Current’s subsidiary, which owns a 7.5 -MW renewable, firm dispatchable closed-loop biomass-to-energy facility on Kauai that provides electricity to Kauai Island Utility Cooperative (KIUC) under a PPA that was scheduled to expire in January 2036, but was mutually terminated by the parties effective October 1, 2026 as described below.
Assets held for sale-Mahipapa. In connection with the sale of Mauo, Kaʻieʻie Waho and other solar and battery assets (Solar Asset Disposition) and as part of the membership interest purchase agreement pursuant to which the Solar Asset Disposition was conducted (MIPA), but as a separate transaction, Pacific Current agreed to sell all of the membership interest in its biomass subsidiary, Mahipapa, to the same unaffiliated third party that is party to the MIPA (the Mahipapa Sale), with each of the parties’ obligations to complete the Mahipapa Sale subject to the conditions set forth in the MIPA. In September 2026, the proposed sale of Mahipapa to an unaffiliated third party was terminated because the parties were unable to resolve certain obligations required to complete the transaction. In addition, Mahipapa’s facility has remained offline since early September 2026, as damage from Hurricane Lowell continues to prevent the plant from restarting. These developments, along with other past issues, led Mahipapa and KIUC to agree to terminate their PPA effective October 1, 2026. As of September 30, 2026, the Company was evaluating strategic alternatives for Mahipapa, including a potential Chapter 7 bankruptcy filing. The Company therefore concluded Mahipapa to be an abandoned asset which no longer met the criteria for classification as held for sale and reclassified its related assets and liabilities as held and used.
Upon reclassification, the assets were written down to their estimated net salvage value, as of September 30, 2026. The Company recognized a pretax impairment charge of $50.7 million for the three months ended September 30, 2026, in connection with the reclassification, resulting in total pretax impairment charges of $54.5 million for the nine months ended September 30, 2026. These charges are included in “Gain (loss) on sale of subsidiaries and impairment losses on subsidiary assets sold and assets formerly classified as held for sale” in the Company’s Condensed Consolidated Statements of Income.
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The net assets and liabilities of Mahipapa classified as held for sale in the Company’s Condensed Consolidated Balance Sheets as of December 31, 2025 were classified as current, and are summarized as follows:
| (in thousands) | December 31, 2025 | ||||
| Property, plant and equipment, net of accumulated depreciation | $ | ||||
| Other assets | |||||
| Assets held for sale-current | $ | ||||
| Long-term debt, net | $ | ||||
| Other liabilities | |||||
| Liabilities held for sale-current | $ | ||||
Subsequent event-Mahipapa bankruptcy. On November 3, 2026, Mahipapa filed a voluntary petition for bankruptcy under Chapter 7 in the United States Bankruptcy Court for the District of Hawaii.
The decision to file under Chapter 7 followed the termination of the proposed sale of Mahipapa to an unaffiliated third party in September 2026 because the parties were unable to resolve certain obligations required to complete the transaction and the subsequent termination of Mahipapa’s PPA with KIUC. The terminated sale and other operating issues led Mahipapa and KIUC to terminate their PPA effective October 1, 2026.
Upon the filing of the Chapter 7 petition, Mahipapa’s assets will become part of its bankruptcy estate and a trustee will be appointed to administer and liquidate the bankruptcy estate. As of September 30, 2026, Mahipapa had long-lived assets amounting to approximately $2 million and outstanding long-term debt of $49 million. The ultimate disposition of Mahipapa’s assets and liabilities will depend upon the Chapter 7 proceedings. The anticipated completion date of the liquidation proceedings cannot be reasonably estimated at this time.
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Note 4 · Electric utility segment
Consolidated variable interest entities. The HE AR INTER LLC and its direct subsidiary, HE AR BRWR LLC, (collectively, the Special Purpose Entities or SPEs) are bankruptcy remote, direct and indirect wholly owned subsidiaries of the Utilities. Pursuant to the asset-based lending facility (ABL Facility) credit agreement, the Utilities sell certain accounts receivable to the SPEs as collateral, which in turn, obtain financing from financial institutions. As of September 30, 2026, the ABL Facility remains undrawn and the SPEs have $319.0 million of net accounts receivable, included in “Customer accounts receivable, net,” and “Accrued unbilled revenues, net” on the Utilities’ Condensed Consolidated Balance Sheets and “Accounts receivable and unbilled revenues, net” on the Company’s Condensed Consolidated Balance Sheets.
The SPEs are considered VIEs due to insufficient equity investment at risk. The most significant activities that impact the economic performance of the SPEs are cash and financing management. The Utilities are considered the primary beneficiary as the Utilities direct the activities related to cash and financing management and therefore, are required to consolidate the SPEs. Although the SPEs are direct and indirect wholly owned consolidated subsidiaries of the Utilities, the SPEs are legally separate from the Utilities. The assets of the SPEs (which are primarily accounts receivables) are not available to creditors of the Utilities.
Unconsolidated variable interest entities.
Power purchase agreements. The Utilities have power purchase agreements (PPAs) with independent power producers (IPPs) and Schedule Q providers (i.e., customers with cogeneration and/or power production facilities who buy power from or sell power to the Utilities). As of September 30, 2026, the Utilities evaluated and concluded none of the IPPs or Schedule Q providers are currently required to be consolidated by reasons that i) no variable interests exist in the PPAs; ii) where variable interests are present, the Utilities are not deemed the primary beneficiary due to lack of power to direct the activities that most significantly impact the IPPs’ economic performance; or iii) the PPAs qualify for scope exceptions under current accounting standards for consolidation.
The carrying amounts of assets and liabilities related to the Utilities’ PPAs, where variable interests are present but the Utilities are not deemed the primary beneficiary, are limited to the purchased power and energy payments. As the Utilities recover such payments through the PUC-approved Purchased Power Adjustment Clause (PPAC) or the Energy Cost Recovery Clause (ECRC) mechanism, there is no significant potential exposure to loss to the Utilities as of September 30, 2026.
GLST1. GLST1 was formed in November 2024 for the purpose of holding the first installment payment pursuant to the settlement of the Maui windstorm and wildfire tort-related legal claims. Effective March 31, 2025, HEI assigned 60 % of the membership interests of GLST1 to Hawaiian Electric. The Utilities are deemed to have a variable interest in GLST1 but concluded that the Utilities are not the primary beneficiary of GLST1. As the Utilities have the ability to exercise significant influence over GLST1, the Utilities accounted for the membership interests under the equity method of accounting. On April 10, 2026, HEI and Hawaiian Electric paid the first of four equal annual installments and subsequently dissolved and terminated GLST1 in June 2026.
Commitments and contingencies.
Contingencies. The Utilities are subject in the normal course of business to legal, regulatory and environmental proceedings. Excluding the liabilities from the Maui windstorm and wildfires, management does not anticipate that the aggregate ultimate liability arising out of these pending or threatened legal proceedings will be material to its financial position. However, the Utilities cannot rule out the possibility that such outcomes could have a material effect on the results of operations or liquidity for a particular reporting period in the future.
August 2023 Maui windstorm and wildfires. See Note 2.
Property insurer litigation. HEI and Hawaiian Electric were actively seeking recovery of damages to rebuild the covered electrical infrastructure from their insurers and, to date, have received insurance reimbursements of more than $22 million related to submitted claims under the $500 million property insurance coverage. On February 13, 2026, Hawaiian Electric Industries, Inc., Hawaiian Electric Company, Inc., and Maui Electric Company, Limited (collectively, the Hawaiian Electric Plaintiffs) filed suit against four of their property insurers: Defendants XL Insurance Company of America, Inc., Allianz Global Risks US Insurance Company, the Princeton Excess and Surplus Lines Insurance Company, and General Security Indemnity Company of Arizona (collectively, the HEI Insurers). The HEI Insurers are commercial property insurers that insured the Hawaiian Electric Plaintiffs at the time of the August 2023 Maui windstorm and wildfires. The Hawaiian Electric Plaintiffs also had commercial property insurance under policies issued by Associated Electric & Gas Insurance Services (AEGIS), Ascot Syndicate 1414, IQUW Syndicate 1856, Energy Insurance Mutual, QBE International Markets, and Certain Underwriters at Lloyd’s London (collectively, the AEGIS Insurers). Under the policies issued by the AEGIS Insurers, the Hawaiian Electric Plaintiffs and the AEGIS Insurers were required to engage in negotiation meetings, and if negotiation was
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unsuccessful, mediation prior to litigation. Accordingly, the Hawaiian Electric Plaintiffs did not name the AEGIS Insurers as defendants in the complaint filed on February 13, 2026.
The HEI Insurers and AEGIS Insurers (jointly, the Property Insurers) acknowledged coverage under the policies at issue for loss or damage to the Hawaiian Electric Plaintiffs’ property in connection with the Maui windstorm and wildfires and paid a portion of the Hawaiian Electric Plaintiffs’ losses. However, the Property Insurers denied coverage and refused to pay for a substantial portion of the loss and expense claimed. In April 2026, the Hawaiian Electric Plaintiffs and the Property Insurers engaged in negotiations and finalized a partial settlement in the second quarter of 2026 (the Settlement). The Settlement resolved all disputes with the AEGIS Insurers with respect to coverage under the AEGIS policies for loss arising out of the Maui windstorm and wildfires, as well as a portion of the disputes between the Hawaiian Electric Plaintiffs and the HEI Insurers. As the proceeds from the Settlement will be used to offset the Utilities’ rebuild and/or replacement capital costs, the unapplied fund in excess of incurred costs are reflected in other non-current liabilities as of September 30, 2026. Litigation is ongoing in the federal district court for the District of Hawaii with respect to the remaining coverage disputes with the HEI Insurers that were not resolved by the Settlement. The Hawaiian Electric Plaintiffs seek declaratory relief regarding the extent of the HEI Insurers’ obligations under the policies, as well as a determination that the HEI Insurers have breached the policies by refusing to indemnify the Hawaiian Electric Plaintiffs for covered loss and expense. The Hawaiian Electric Plaintiffs and the HEI Insurers engaged in mediation on July 8, 2026, but the mediation was not successful. The Hawaiian Electric Plaintiffs filed an amended complaint in the litigation on July 29, 2026, seeking approximately $40.7 million in damages.
Hu Honua Bioenergy, LLC (Hu Honua). In 2013, Hu Honua filed a lawsuit in the U.S. District Court for the District of Hawaii based on Hawaii Electric Light’s termination of a PPA between the parties. The lawsuit asserted breach of contract and antitrust claims. On April 17, 2025, the U.S. District Court granted Hawaii Electric Light’s Motion to Dismiss in part, dismissing the Federal Antitrust claims, but declining to exercise jurisdiction over the State antitrust claim. The remaining State claims, including the contract claims and the State antitrust claim, were dismissed without prejudice.
On May 14, 2025, Hu Honua filed its notice of appeal in federal Ninth Circuit court. Due to ongoing negotiations between Hu Honua and Hawaii Electric Light on a new PPA, the appellate briefing schedule has been vacated, and the court issued an administrative closure until February 1, 2027, and Hu Honua must provide a status report to the court by January 25, 2027.
On May 16, 2025, Hu Honua filed its complaint in state court for the remaining State claims. Hu Honua has granted Hawaii Electric Light an open-ended extension to answer or otherwise respond to the State complaint while PPA negotiations are ongoing. The State court ordered a scheduling conference for August 12, 2025, which was subsequently postponed to January 14, 2027, to allow the parties to continue ongoing settlement discussions.
Molokai New Energy Partners (MNEP). In July 2018, the PUC approved Maui Electric’s PPA with MNEP to purchase solar energy from a photovoltaic (PV) plus battery storage project. The 4.88 -MW PV and 3 -MW Battery Energy Storage System (BESS) project was to deliver no more than 2.64 MW at any time to the Molokai system. On March 25, 2020, MNEP filed a complaint in the U.S. District Court for the District of Hawaii against Maui Electric claiming breach of contract. On June 3, 2020, Maui Electric provided a Notice of Default and Termination of the PPA to MNEP terminating the PPA with an effective date of July 10, 2020. Thereafter, MNEP filed an amended complaint to include claims relating to the termination and Hawaiian Electric filed its answer to the amended complaint on September 11, 2020, disputing the facts presented by MNEP and all claims within the original and amended complaint. Currently, the discovery phase is ongoing. Trial which was previously set to commence on September 16, 2025 was continued to February 18, 2026 and is now set to begin November 13, 2026.
Madison Energy v. Apparent Inc. lawsuits. In two similar lawsuits, third-party claims have been asserted against the Utilities concerning the Utilities’ purported approvals and alleged representations regarding customer-sited solar projects. The first matter concerns a project at the Kamehameha Schools Maui (KSM) campus, and the second concerns a project at a KTA Super Stores (KTA) location on Hawaii Island.
The first lawsuit, referred to as the KSM lawsuit, concerns a solar project at the KSM campus. The original developer, Apparent Inc. (Apparent), entered into a PPA with KSM and subsequently sold the project to Madison Energy, which retained Apparent to design, construct, and operate the project. Apparent purportedly received a conditional Permission to Operate letter (PTO) from Maui Electric and, in purported reliance on that letter and other alleged representations, interconnected the project to Maui Electric’s grid and began operations. Upon learning of the purported PTO and the project’s operation, Maui Electric determined that it had no record of creating, issuing, or transmitting the PTO and that several project items required prior to PTO remained outstanding. Accordingly, Maui Electric directed that the project be disconnected from the grid. KSM subsequently terminated the PPA, and Madison Energy terminated its agreement with Apparent. In December 2024, Madison Energy filed suit against Apparent in state court, asserting contract, quasi-contract and fraud claims relating to the purported PTO. Apparent denied liability and filed a counterclaim against Madison Energy for breach of contract, and asserted third-party
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claims against Maui Electric and Hawaiian Electric. Apparent alleges, among other things, that the Utilities issued and subsequently disavowed the purported PTO. The discovery phase is ongoing, and trial is currently scheduled for March 8, 2027.
The second lawsuit, referred to as the KTA lawsuit, was filed by Madison Energy in February 2025 and concerns a solar project at a KTA location on Hawaii Island. The allegations and claims are substantially similar to those asserted in the KSM lawsuit. The discovery phase is ongoing.
The Utilities dispute the claims and intend to defend against them vigorously. The Utilities are unable to predict the ultimate outcomes of these matters or reasonably estimate the amount or range of any possible loss.
Environmental regulation. The Utilities are subject to environmental laws and regulations that regulate the operation of existing facilities, the construction and operation of new facilities and the proper cleanup and disposal of hazardous waste and toxic substances.
Hawaiian Electric, Hawaii Electric Light and Maui Electric, like other utilities, periodically encounter petroleum or other chemical releases associated with current or previous operations. The Utilities report and take action on these releases when and as required by applicable law and regulations. The Utilities believe the costs of responding to such releases identified to date will not have a material effect, individually or in the aggregate, on Hawaiian Electric’s consolidated results of operations, financial condition or liquidity.
Former Molokai Electric Company generation site. In 1989, Maui Electric acquired Molokai Electric Company. Molokai Electric Company had sold its former generation site (Site) in 1983 but continued to operate at the Site under a lease until 1985 and left the property in 1987. The Environmental Protection Agency (EPA) has since identified environmental impacts in the subsurface soil at the Site. In cooperation with the State of Hawaii Department of Health and EPA, Maui Electric further investigated the Site and the adjacent parcel to determine the extent of impacts of polychlorinated biphenyls (PCBs), residual fuel oils and other subsurface contaminants. Maui Electric has a reserve balance of $2.4 million as of September 30, 2026, representing the probable and reasonably estimable undiscounted cost for remediation of the Site and the adjacent parcel based on presently available information; however, final costs of remediation will depend on the cleanup approach implemented.
Pearl Harbor sediment study. In July 2014, the U.S. Navy notified Hawaiian Electric of the Navy’s determination that Hawaiian Electric is a Potentially Responsible Party under Comprehensive Environmental Response, Compensation, and Liability Act responsible for the costs of investigation and cleanup of PCB contamination in sediment in the area offshore of the Waiau power plant as part of the Pearl Harbor Superfund Site. Hawaiian Electric was also required by the EPA to assess potential sources and extent of PCB contamination onshore at Waiau power plant.
As of September 30, 2026, the reserve account balance recorded by Hawaiian Electric to address the PCB contamination was $8.8 million. The reserve balance represents the probable and reasonably estimable undiscounted cost for the onshore and offshore investigation and remediation. The final remediation costs will depend on the actual onshore and offshore cleanup costs.
Endangered Species Act. The Utilities received a notice under the federal Endangered Species Act, from Earthjustice on behalf of the American Bird Conservancy and Conservation Council for Hawaii (Conservation Groups) in January 2024. The notice is the pre-cursor to a citizen’s suit under the Endangered Species Act. The notice alleges that the Utilities are out of compliance with the Act due to alleged impacts on endangered seabirds caused by the Utilities’ powerlines, street lights and facility lights on Maui and Lanai. At the time the notice was served, the Utilities were already in the process of drafting a Habitat Conservation Plan (HCP) with respect to the powerlines and will be applying for associated state and federal take/license permits. Notwithstanding, the notice asserts that the scope of the HCP should be broader and additional interim measures are necessary while the HCP and related permits are pending.
After negotiations among the parties, a complaint was filed on November 12, 2024 regarding the powerlines and on December 11, 2024, the court approved a settlement agreement. Pursuant to that agreement, the Utilities will continue the HCP process and take specific actions to minimize and mitigate the potential impact of the Utilities’ powerlines while the document is being prepared. The agreement also contains additional requirements that include coordination with the Conservation Groups with various aspects of the HCP and powerline operations, and continuing the Utilities’ commitment to a species mitigation project with University of Hawaii Foundation to monitor, protect and increase the population of Hawaiian Petrels.
The street and facility lights aspect of the notice was not resolved and a second complaint was filed on November 19, 2024, that includes the County of Maui as a party. Hawaiian Electric and Maui Electric answered the complaint on December 12, 2024, and at this time, the parties have completed discovery. On July 3, 2025, the parties executed an interim agreement eliminating the need for the Conservation Groups to file for injunctive relief related to the 2025 seabird fallout season, and a similar interim agreement was reached in September 2026 for the 2026 fallout season. The County of Maui’s and the
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Conservation Groups’ cross-motions for summary judgment were denied, and the trial was continued from September 2026 to March 2027 for scheduling reasons. The parties may engage in additional settlement discussions in an effort to resolve the matter. However, the Utilities are unable to determine the ultimate outcome or the amount of any possible loss.
Commitments.
Purchase commitments. As of December 31, 2025, the Utilities’ estimated future minimum payments pursuant to purchase obligations related to material contracts of $2.63 billion. See Note 4 of the Notes to the Consolidated Financial Statements in Item 8 of the 2025 Form 10-K.
As of September 30, 2026, a total of nine Stage 1 and Stage 2 renewable projects provide the Utilities with a capacity of 301.5 MW, with 1,771 -MWh batteries.
Purchases from all IPPs were as follows:
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Kalaeloa Partners, L.P. | $ | $ | $ | $ | ||||||||||||||||||||||
| Hamakua Energy | ||||||||||||||||||||||||||
| HPOWER | ||||||||||||||||||||||||||
| Puna Geothermal Venture | ||||||||||||||||||||||||||
| Kapolei Energy Storage | ||||||||||||||||||||||||||
| Solar IPPs | ||||||||||||||||||||||||||
| Wind IPPs | ||||||||||||||||||||||||||
Other IPPs 1 | ||||||||||||||||||||||||||
| Total IPPs | $ | $ | $ | $ | ||||||||||||||||||||||
1 Includes hydro power and other PPAs.
Utility projects. Many public utility projects require PUC approval and various permits from other governmental agencies. Difficulties in obtaining, or the inability to obtain, the necessary approvals or permits or community support can result in significantly increased project costs or even cancellation of projects. In the event a project does not proceed, or if it becomes probable the PUC will disallow cost recovery for all or part of a project, or if PUC-imposed caps on project costs are expected to be exceeded, project costs may need to be written off in amounts that could result in significant reductions in Hawaiian Electric’s consolidated net income.
Waena battery energy storage system project. In September 2020, Maui Electric filed a PUC application to purchase and install a 40 -MW BESS at its Waena Site in Central Maui. In December 2023, the PUC approved Maui Electric’s request to commit funds estimated at $82.1 million, for the purchase and installation of the project, and to recover costs for the project under Exceptional Project Recovery Mechanism (EPRM). In July 2025, the PUC approved the Utilities’ request to authorize recovery of costs in addition to the amounts approved in December 2023 due to the uncertainty of changes in law, limited to the lesser of either the actual costs or 20 % over the approved estimated capital costs. Project costs incurred as of September 30, 2026, amount to $66.4 million.
Climate adaptation transmission and distribution resilience program. The Utilities maintain that improving resiliency of the electric grid is an urgent matter and recognizes that evolving climate dynamics are making Hawaii increasingly vulnerable to severe weather events. On January 31, 2024, the PUC approved the Utilities’ request to commit an estimated $189.7 million in funds for the climate adaptation transmission and distribution resilience program, over a project period of five years . The project will focus on, among other things, system hardening in wildfire risk areas including installing video camera and weather monitors in wildfire risk areas and strengthening transmission lines to help prevent ignition, enable quicker response and add situational awareness.
The project costs to be recovered through EPRM is subject to a cap of $95 million and any amount in excess will be subject to the PUC’s further review. On August 7, 2024, the Utilities received a notification from the U.S. Department of Energy (DOE) that their application for $95 million in federal funds under the Infrastructure Investment and Jobs Act was officially awarded. On August 20, 2024, the Utilities submitted a copy of their executed agreement with the DOE to the PUC. On July 16, 2026, the Utilities received a notification of an award modification from the DOE that updated certain terms and conditions including the removal of the scope related to community benefits plans and the associated funding for those deliverables. As a result, the federal share total was reduced from $95 million to $92.6 million. The $95 million EPRM cap is not impacted at this
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time. On October 2, 2026, the Utilities filed their August 2026 - August 2027 Forward Looking Annual Report. Project costs incurred as of September 30, 2026, amount to $51.5 million.
In 2025, the President issued multiple executive orders that impact federal funding. The Utilities are not impacted at this time but will continue to monitor for any new executive orders and any changes that are passed down through the federal contracting officer for the resilience program.
Waiau repower project. On March 28, 2025, the Utilities filed an application to the PUC for their self-build project - Waiau repower project. The project, selected as part of a competitive bid process, was estimated at $847 million and involves replacing six existing turbines with six fuel-flexible combustion turbines that provide 253 MW of renewable firm generation, expected to be placed in service in stages from 2029 to 2033. The Utilities requested, among other things, approvals of 1) the commitment of funds for such project, and 2) recovery of project costs through the EPRM. On October 17, 2025, the Utilities filed an updated application reflecting revised costs of $1.16 billion, citing unavoidable and changed market conditions outside the Utilities’ control. On March 23, 2026, the PUC approved the commitment of funds and EPRM recovery for the Waiau repower project at the initial estimated cost of $847 million plus the lesser of a 10 % increase or the difference in the Gross Domestic Product Price Index (GDPPI) between the date of the best and final offer submission and the date of the PUC’s decision and order (Inflationary Adjustment). On April 2, 2026, the Utilities filed a motion for reconsideration of the PUC’s decision and order. On April 17, 2026, the PUC issued an order addressing the Utilities’ motion for reconsideration which, among other things, affirmed that the project costs up to $847 million plus the Inflationary Adjustment can be recovered through EPRM and clarified that the Utilities may, after the project is in-service, seek recovery for project cost amounts greater than the approved amount in a general rate case or rate re-basing proceeding. Based on the estimated GDPPI for the first quarter of 2026 released by the Bureau of Economic Analysis on June 25, 2026, the project costs plus the Inflationary Adjustment are currently estimated at $908 million. Project costs incurred as of September 30, 2026, amount to $102.9 million.
On April 28, 2026, in connection with the Waiau repower project, Hawaiian Electric entered into three contracts to acquire a total of six gas turbine units from GE Vernova Operations, LLC to secure the manufacturing and staggered delivery of gas turbine units in pairs between 2029 and 2030. These contracts mitigate the risk of delayed turbine unit deliveries, remove the exposure to non-tariff price increases, and support the achievement of on-time commercial operations of the Waiau repower project.
In December 2025, Federal Emergency Management Agency issued a Letter of Final Determination on the preliminary updates to Oahu’s Flood Insurance Rate Maps. As a result of the updates, portions of the Waiau power plant will transition to a newly designated flood zone A, which is estimated to have a 1 % chance of annual flooding. The new flood maps became effective on June 10, 2026. The Utilities are currently assessing the impact the change may have on the Waiau repower project.
Wildfire Mitigation Plan (WMP). In January 2025, the Utilities developed and filed with the PUC a 2025-2027 WMP (formerly referred to as Wildfire Safety Strategy), which identifies risk mitigation strategies to perform over the three years across their service territories. 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 December 31, 2025, the PUC approved the Utilities’ 2025-2027 WMP. On June 25, 2026, the PUC approved the Utilities’ request for EPRM cost recovery up to $350 million in project costs for 2025-2027. The PUC will condition recovery, among other things, on that the Utilities are not allowed to effectuate cost recovery for any of the approved 2025-2027 WMP project costs through the EPRM until the PUC has issued an order addressing the Utilities’ forthcoming securitization application for a financing order pursuant to Hawaii Revised Statutes Section 269G-2. All project costs that are approved for cost recovery through securitization shall not be recoverable through the EPRM. Any approved project costs that may be deemed ineligible for recovery through securitization may be recovered through the EPRM. Project costs incurred as of September 30, 2026, amount to approximately $125 million.
Regulatory proceedings.
Performance-based regulation framework (PBR Framework). The PUC issued a decision and order (PBR D&O) establishing the PBR Framework to govern the Utilities. The PBR Framework implemented a five-year multi-year rate period (MRP), during which there will be no general rate case applications. The first MRP ended on May 31, 2026, and the next MRP (MRP2) is scheduled to commence in 2027. The period between the end of the first MRP and the beginning of MRP2 is intended to be a transition period (see Phase 7 discussed below). PBR working group meetings started in 2024 to consider potential PBR changes for MRP2. The PBR Framework Review will continue with the following: (i) Phase 6: consideration and development of proposals for modifications to the PBR Framework, which focuses on the inflation factor, customer dividend, Earnings Sharing Mechanism (ESM), revenue opportunities afforded by the X-Factor and the EPRM guidelines, and Performance Incentive Mechanisms (PIMs) portfolio, and (ii) Phase 7: the finalization and documentation of approved PBR Framework modifications prior to MRP2 commencement. Regarding Phase 6, on October 23, 2026, the PUC issued an order
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
that introduced a proposal prepared by PUC staff, which identified possible modifications of certain PBR mechanisms in preparation for MRP2 (Staff Proposal). The PUC stated that the Staff Proposal is intended to be a starting point for discussion among the PBR parties, which may result in further modification(s) of mechanisms or development of entirely different mechanism structures. To facilitate an open discussion, the PUC instructed the PBR parties to file initial comments regarding the Staff Proposal by November 13, 2026, and that these initial comments will not be construed as a party’s statement of position. Following consideration of the PBR parties’ initial comments on the Staff Proposal, the PUC anticipates issuing an order by early January 2027, outlining its inclinations on some or all of the PBR mechanisms discussed in the Staff Proposal to provide guidance regarding the PUC’s priorities for the remainder of these proceedings. The PUC then plans to host a workshop with the PBR parties, followed by parties filing statements of position, a discovery period, a second workshop, an evidentiary hearing, and a briefing period. The dates for these procedural steps will be determined by the PUC.
Alternative re-basing. In an order issued on February 27, 2025, the PUC concluded that the Utilities’ target revenues should be re-based for MRP2 and allowed the Utilities to file a single, consolidated application that presents their requested adjustment to target revenues. The proceeding to re-base the Utilities’ target revenues for MRP2 shall be bifurcated into two tracks, with the first track focused on reaching a decision on the Utilities’ revenue requirements prior to the commencement of MRP2, and the second track focused on making a final determination on the revenue requirement and addressing the rate design component. On March 6, 2026, the Utilities filed a joint alternative re-basing proposal with Ulupono Initiative, requesting an increase of $170 million over annual target revenues at current effective rates, with $125 million phased into revenues in the first year of MRP2 and the remaining $45 million implemented in the second year of MRP2. In an order issued on June 15, 2026, the PUC directed the Utilities to re-submit their request for an increase in their revenue requirement, with supporting materials, in the form of a new application, and established a tentative procedural schedule for the new proceeding, with a final decision anticipated in mid to late April 2027. On June 25, 2026, the Utilities filed a motion for reconsideration of the PUC’s order on the Utilities’ alternative re-basing proposal. Specifically, the Utilities requested reconsideration of the PUC’s rejection of the Utilities’ reservation of rights provision and the procedural schedule established in the order. The Utilities are awaiting a decision from the PUC on the motion.
On July 17, 2026, the Utilities filed their application for approval of their re-basing proposal, which retained the March 6, 2026 joint alternative re-basing proposal’s requested $170 million revenue increase. The Utilities proposed to implement the requested increase in two phases: (1) an increase in annual revenues by approximately $125 million effective January 1, 2027 and (2) an increase in annual revenues by an additional approximately $45 million effective January 1, 2028. The requested increase consists primarily of adjustments for the difference between forecasted and actual inflation during the current performance-based regulation period, previously approved depreciation rates for certain steam generating units, increased insurance expenses, and a reduction to certain operating and maintenance expense increases. The Utilities requested an interim decision by December 18, 2026. The PUC held public hearings regarding the Utilities’ application on September 22, 2026, in Kona on Hawaii Island; September 29, 2026, on Maui; September 30, 2026, on Lanai; October 1, 2026, on Molokai, October 2, 2026, on Oahu; and November 4, 2026, in Hilo on Hawaii Island.
Earnings Sharing Mechanism. The PBR Framework established a symmetrical ESM for achieved rate-making return on average common equity (ROACE) outside of a 300 basis points deadband above or below the current authorized ROACE of 9.5 % for each of the Utilities (i.e., above 12.5 % or below 6.5 %). There is a 50 /50 sharing between customers and Utilities for the achieved rate-making ROACE falling within 150 basis points outside of the deadband in either direction, and a 90 /10 sharing for any further difference. A reopening or review of the PBR terms may be triggered if the Utilities’ credit rating outlook indicates a potential credit downgrade below investment grade status, or if its achieved rate-making ROACE enters the outer most tier of the ESM.
On August 31, 2023, the PUC issued an order temporarily suspending the 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.
Exceptional Project Recovery Mechanism. The established EPRM Guidelines, formerly known as Major Project Interim Recovery (MPIR), permit the Utilities to include the full amount of approved costs in the EPRM for recovery in the first year the project goes into service, pro-rated for the portion of the year the project is in service. Deferred and other operation and maintenance (O&M) expense projects are also eligible for EPRM recovery under the EPRM Guidelines. EPRM recoverable costs are limited to the lesser of actual incurred project costs or the PUC‑approved amounts, net of savings. The recovery of the project costs previously approved under the MPIR continues within the PBR Framework.
As of September 30, 2026, the Utilities’ annualized MPIR and EPRM revenue amounts totaled $39.3 million, including revenue taxes. The PUC approved the Utilities’ recovery of the annualized MPIR and EPRM revenues effective June 1, 2026, through the Revenue Balancing Account (RBA) rate adjustment.
23
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
As of September 30, 2026, the PUC approved the recovery of six EPRM projects with an estimated amount of $1.40 billion in capital costs to the extent the project costs are not included in rates. See “Utility projects” section above. Currently, the Utilities are seeking EPRM recovery for two additional projects subject to PUC approval.
Performance Incentive Mechanisms. On December 18, 2024, and clarified on January 15, 2025, the PUC issued orders granting the Utilities’ request to suspend the Transmission and Distribution (T&D) System Average Interruption Duration Index (SAIDI) and T&D System Average Interruption Frequency Index (SAIFI) PIMs for wildfire risk circuits from January 1, 2024 to December 31, 2025. Separately, the Utilities submitted a request on December 16, 2025 to expand the suspension of T&D SAIDI and T&D SAIFI PIMs (T&D PIMs) to all circuits and extend the suspension to December 31, 2026, to consider modifications to the T&D PIMs. On April 21, 2026, the PUC issued an order denying the Utilities’ request to expand suspension of T&D PIMs to all circuits, but, on its own motion, extended the current suspension of the T&D PIMs for wildfire risk circuits through December 31, 2026. Consistent with the current suspension, this shall include continued exclusion of all Public Safety Power Shutoff (PSPS) program events from PIM performance metrics and targets. On October 1, 2026, the Utilities requested that the PUC continue the suspension of the T&D PIMs for wildfire risk circuits and exclusions of all PSPS program events from the performance metrics and targets across the Utilities’ service territories, to the extent necessary beyond December 31, 2026, while the PUC considers the Utilities’ revised T&D PIMs proposal that will be submitted by November 17, 2026. Absent PUC approval of any further extension, the T&D PIMs suspension will expire and no exclusions on any circuits will be valid after December 31, 2026.
For the 2025 evaluation period, the Utilities earned $7.5 million (nil for Hawaiian Electric, $5.4 million for Hawaii Electric Light and $2.1 million for Maui Electric) in rewards net of penalties. The net rewards related to 2025 were reflected in the 2026 PIMs annual report and 2026 spring revenue report filings with the exception of the Phase 1 Request for Proposal (RFP) PIM, which was reflected in the 2025 fall revenue report filing. For the 2026 evaluation period, the Utilities accrued $2.3 million in rewards for the Interconnection Requirements Study PIM (for Hawaiian Electric and Hawaii Electric Light), which were reflected in the 2026 fall revenue report filing.
Annual review cycle. Under the PBR Framework, target revenues are adjusted according to an index-driven annual revenue adjustment (ARA) based on: (i) an inflation factor, (ii) a predetermined X-factor to encompass productivity, which is set at zero, (iii) a Z-factor to account for exceptional circumstances not in the Utilities’ control and (iv) a customer dividend consisting of a negative adjustment of 0.22 % of adjusted revenue requirements compounded annually and a flow through of the “pre-PBR” savings commitment from the management audit recommendations developed in a prior docket at a rate of $6.6 million per year from 2021 until the rate resets.
PBR D&O also established an annual review cycle for revenue adjustments under the PBR Framework, including the biannual submission of the revenue reports. The Utilities’ 2026 fall revenue report was filed on October 30, 2026, which is subject to PUC approval. The proposed net incremental amounts between the 2026 spring and 2026 fall revenue reports are shown in the following table. The amounts are to be collected (refunded) from January 1, 2027, through December 31, 2027, under the RBA rate tariffs, which were proposed in the 2026 fall revenue report filing.
| (in millions) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Total | ||||||||||||||||||||||
Incremental ARA revenues | $ | $ | $ | $ | ||||||||||||||||||||||
| Annual change in accrued RBA balance through September 30, 2026 | ( | ( | ( | ( | ||||||||||||||||||||||
Incremental PIMs (net) | ( | |||||||||||||||||||||||||
Net incremental amount to be collected under the RBA rate tariffs | $ | $ | $ | $ | ||||||||||||||||||||||
Regulatory assets and liabilities.
Regulatory assets for Maui windstorm and wildfires related costs. The PUC has issued orders authorizing deferred accounting treatment for certain incremental non-labor expenses related to the Maui windstorm and wildfires incurred from August 8, 2023 through December 31, 2025. The approval pertains only to deferred cost treatment for expenses that are not already part of base rates; any actual recovery of deferred costs will be the subject of a separate application.
As of September 30, 2026, the Utilities have recorded $79.1 million in regulatory assets for the incremental costs incurred during the aforementioned period related to the Maui windstorm and wildfires event.
Requests for cost recovery of deferred costs will be the subject of a separate application at which time the PUC will evaluate whether such costs were prudently incurred and reasonable and determine the extent to which such costs will be eligible for recovery, and the period over which recovery will occur. If the PUC denies recovery of any deferred costs, such costs would be charged to expense in the period that those costs are no longer considered probable of recovery.
24
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Regulatory assets for Wildfire Mitigation Plan (WMP). On December 31, 2025, the PUC approved the Utilities’ 2025-2027 WMP (formerly referred to as Wildfire Safety Strategy). The Utilities’ 2025-2027 WMP is a three-year action plan that targets a material reduction in wildfire risk associated with utility infrastructure. The PUC also directed the Utilities to provide a WMP update bi-annually. On June 25, 2026, the PUC issued a decision and order approving cost recovery of the Utilities’ 2025-2027 WMP project costs through the EPRM. As of September 30, 2026, the Utilities have recorded a regulatory asset of $27.8 million. See “Utility projects—Wildfire Mitigation Plan” section above.
Regulatory assets for suspension of disconnections related costs. Based on circumstances related to the Maui windstorm and wildfires, on August 31, 2023 and subsequently on October 13, 2023, the PUC issued orders directing all regulated utilities located on, or providing utility service on Maui, among other things, (i) to suspend disconnections of services and associated disconnection fees beginning from August 8, 2023, through the end of the emergency relief period established by the Governor’s Emergency Proclamations related to the Maui windstorm and wildfires, which currently continues through December 15, 2026 (Suspension Period); (ii) to suspend any and all rules and provisions of individual utility tariffs that prevent or condition re-connection of disconnected customers during the Suspension Period; (iii) not to charge customers interest on past due payments or impose any late payment fees through the Suspension Period; (iv) to establish regulatory assets to record costs directly related to the suspension of disconnections, and to record receipt of governmental aid and donation-based aid, loans or grants, and/or all other assistance measures, and any cost savings realized; and (v) to file a notice with the PUC regarding any upcoming application or other request pursuant to Hawaii Revised Statutes Sections 269-16.3, -17, -17.5, -18, -19, or -19.5 and/or regarding any significant financial change to the Maui utility, at least 60 days prior to filing such application or other request with the PUC. The orders also discourage the filing of emergency or general rate increases in response to the emergency situation. On December 23, 2025, the PUC revised the notice of financial change reporting requirement (item v above) to apply only to the Utilities.
In future proceedings, the PUC will assess the utility’s request for recovery of these regulatory assets including whether it is reasonable and necessary, the appropriate period of recovery for the approved amount of regulatory assets, any amount of carrying costs thereon, any savings directly attributable to suspension of disconnects, and other related matters. As of September 30, 2026, the Utilities have recorded $8.0 million in regulatory assets for the incremental costs incurred due to the suspension of disconnections.
Condensed consolidating financial information. Condensed consolidating financial information for Hawaiian Electric and its subsidiaries are presented for the three and nine months ended September 30, 2026 and 2025, and as of September 30, 2026 and December 31, 2025.
Hawaiian Electric unconditionally guarantees Hawaii Electric Light’s and Maui Electric’s obligations (a) to the State of Hawaii for the repayment of principal and interest on Special Purpose Revenue Bonds issued for the benefit of Hawaii Electric Light and Maui Electric and (b) under their respective private placement note agreements and the Hawaii Electric Light notes and Maui Electric notes issued thereunder.
25
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Income
Three months ended September 30, 2026
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||||||
| Revenues | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||||||||||||
| Fuel oil | ||||||||||||||||||||||||||||||||||||||
| Purchased power | ||||||||||||||||||||||||||||||||||||||
| Other operation and maintenance | ( | |||||||||||||||||||||||||||||||||||||
| Depreciation | ||||||||||||||||||||||||||||||||||||||
| Taxes, other than income taxes | ||||||||||||||||||||||||||||||||||||||
| Total expenses | ( | |||||||||||||||||||||||||||||||||||||
| Operating income (loss) | ( | |||||||||||||||||||||||||||||||||||||
| Allowance for equity funds used during construction | ||||||||||||||||||||||||||||||||||||||
| Equity in earnings of subsidiaries | ( | |||||||||||||||||||||||||||||||||||||
| Retirement defined benefits credit (expense)—other than service costs | ( | |||||||||||||||||||||||||||||||||||||
| Interest expense and other charges, net | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Allowance for borrowed funds used during construction | ||||||||||||||||||||||||||||||||||||||
| Interest income | ( | |||||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | ( | ( | ||||||||||||||||||||||||||||||||||||
| Income taxes | ( | ( | ||||||||||||||||||||||||||||||||||||
| Net income (loss) for common stock | $ | ( | ( | $ | ||||||||||||||||||||||||||||||||||
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Comprehensive Income
Three months ended September 30, 2026
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||||||
| Net income (loss) for common stock | $ | ( | ( | $ | ||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of taxes: | ||||||||||||||||||||||||||||||||||||||
| Retirement benefit plans: | ||||||||||||||||||||||||||||||||||||||
| Adjustment for amortization of net gains recognized during the period in net periodic benefit cost, net of taxes | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Reclassification adjustment for impact of D&Os of the PUC included in regulatory accounts, net of taxes | ( | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of taxes | ( | ( | ||||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) attributable to common shareholder | $ | ( | ( | $ | ||||||||||||||||||||||||||||||||||
26
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Income
Three months ended September 30, 2025
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||||||
| Revenues | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||||||||||||
| Fuel oil | ||||||||||||||||||||||||||||||||||||||
| Purchased power | ||||||||||||||||||||||||||||||||||||||
| Other operation and maintenance | ( | |||||||||||||||||||||||||||||||||||||
| Depreciation | ||||||||||||||||||||||||||||||||||||||
| Taxes, other than income taxes | ||||||||||||||||||||||||||||||||||||||
| Total expenses | ( | |||||||||||||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||||||||||||||
| Allowance for equity funds used during construction | ||||||||||||||||||||||||||||||||||||||
| Equity in earnings of subsidiaries | ( | |||||||||||||||||||||||||||||||||||||
| Retirement defined benefits credit (expense)—other than service costs | ( | |||||||||||||||||||||||||||||||||||||
| Interest expense and other charges, net | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Allowance for borrowed funds used during construction | ||||||||||||||||||||||||||||||||||||||
| Interest income | ( | |||||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | ( | ( | ||||||||||||||||||||||||||||||||||||
| Income taxes | ( | |||||||||||||||||||||||||||||||||||||
| Net income (loss) | ( | ( | ||||||||||||||||||||||||||||||||||||
| Preferred stock dividends of subsidiaries | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Hawaiian Electric | ( | ( | ||||||||||||||||||||||||||||||||||||
| Preferred stock dividends of Hawaiian Electric | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) for common stock | $ | ( | ( | $ | ||||||||||||||||||||||||||||||||||
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Comprehensive Income
Three months ended September 30, 2025
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric Consolidated | ||||||||||||||||||||||||||||||||
| Net income (loss) for common stock | $ | ( | ( | $ | ||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of taxes: | ||||||||||||||||||||||||||||||||||||||
| Retirement benefit plans: | ||||||||||||||||||||||||||||||||||||||
| Adjustment for amortization of net gains recognized during the period in net periodic benefit cost, net of taxes | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Reclassification adjustment for impact of D&Os of the PUC included in regulatory accounts, net of taxes | ( | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of taxes | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) attributable to common shareholder | $ | ( | ( | $ | ||||||||||||||||||||||||||||||||||
27
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Income
Nine months ended September 30, 2026
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
| Revenues | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||||||||||||
| Fuel oil | ||||||||||||||||||||||||||||||||||||||
| Purchased power | ||||||||||||||||||||||||||||||||||||||
| Other operation and maintenance | ( | |||||||||||||||||||||||||||||||||||||
Wildfire tort-related claims | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Depreciation | ||||||||||||||||||||||||||||||||||||||
| Taxes, other than income taxes | ||||||||||||||||||||||||||||||||||||||
| Total expenses | ( | |||||||||||||||||||||||||||||||||||||
Operating income | ||||||||||||||||||||||||||||||||||||||
| Allowance for equity funds used during construction | ||||||||||||||||||||||||||||||||||||||
| Equity in earnings of subsidiaries | ( | |||||||||||||||||||||||||||||||||||||
| Retirement defined benefits credit (expense)—other than service costs | ( | |||||||||||||||||||||||||||||||||||||
| Interest expense and other charges, net | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Allowance for borrowed funds used during construction | ||||||||||||||||||||||||||||||||||||||
Interest income | ( | |||||||||||||||||||||||||||||||||||||
Income before income taxes | ( | |||||||||||||||||||||||||||||||||||||
| Income taxes | ||||||||||||||||||||||||||||||||||||||
Net income for common stock | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Comprehensive Income
Nine months ended September 30, 2026
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
Net income for common stock | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes: | ||||||||||||||||||||||||||||||||||||||
| Retirement benefit plans: | ||||||||||||||||||||||||||||||||||||||
Adjustment for amortization of net gains recognized during the period in net periodic benefit cost, net of taxes | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory accounts, net of taxes | ( | |||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Comprehensive income attributable to common shareholder | $ | ( | $ | |||||||||||||||||||||||||||||||||||
28
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Income
Nine months ended September 30, 2025
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
| Revenues | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||||||||||||
| Fuel oil | ||||||||||||||||||||||||||||||||||||||
| Purchased power | ||||||||||||||||||||||||||||||||||||||
| Other operation and maintenance | ( | |||||||||||||||||||||||||||||||||||||
| Depreciation | ||||||||||||||||||||||||||||||||||||||
| Taxes, other than income taxes | ||||||||||||||||||||||||||||||||||||||
| Total expenses | ( | |||||||||||||||||||||||||||||||||||||
Operating income | ||||||||||||||||||||||||||||||||||||||
| Allowance for equity funds used during construction | ||||||||||||||||||||||||||||||||||||||
| Equity in earnings of subsidiaries | ( | |||||||||||||||||||||||||||||||||||||
| Retirement defined benefits credit (expense)—other than service costs | ( | |||||||||||||||||||||||||||||||||||||
| Interest expense and other charges, net | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Allowance for borrowed funds used during construction | ||||||||||||||||||||||||||||||||||||||
Interest income | ( | |||||||||||||||||||||||||||||||||||||
Income before income taxes | ( | |||||||||||||||||||||||||||||||||||||
| Income taxes | ||||||||||||||||||||||||||||||||||||||
Net income | ( | |||||||||||||||||||||||||||||||||||||
| Preferred stock dividends of subsidiaries | ||||||||||||||||||||||||||||||||||||||
Net income attributable to Hawaiian Electric | ( | |||||||||||||||||||||||||||||||||||||
| Preferred stock dividends of Hawaiian Electric | ||||||||||||||||||||||||||||||||||||||
Net income for common stock | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Comprehensive Income
Nine months ended September 30, 2025
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
Net income for common stock | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes: | ||||||||||||||||||||||||||||||||||||||
| Retirement benefit plans: | ||||||||||||||||||||||||||||||||||||||
Adjustment for amortization of net gains recognized during the period in net periodic benefit cost, net of taxes | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Reclassification adjustment for impact of D&Os of the PUC included in regulatory accounts, net of taxes | ( | |||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Comprehensive income attributable to common shareholder | $ | ( | $ | |||||||||||||||||||||||||||||||||||
29
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Balance Sheet
September 30, 2026
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsi-diaries | Consoli- dating adjustments | Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||
| Property, plant and equipment | ||||||||||||||||||||||||||||||||||||||
| Utility property, plant and equipment | ||||||||||||||||||||||||||||||||||||||
| Land | $ | $ | ||||||||||||||||||||||||||||||||||||
| Plant and equipment | ||||||||||||||||||||||||||||||||||||||
| Right-of-use assets - finance lease | ||||||||||||||||||||||||||||||||||||||
| Less accumulated depreciation | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Construction in progress | ||||||||||||||||||||||||||||||||||||||
| Utility property, plant and equipment, net | ||||||||||||||||||||||||||||||||||||||
| Nonutility property, plant and equipment, less accumulated depreciation | ||||||||||||||||||||||||||||||||||||||
| Total property, plant and equipment, net | ||||||||||||||||||||||||||||||||||||||
| Investment in wholly owned subsidiaries, at equity | ( | |||||||||||||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||||||||||||||
| Advances to affiliates | ( | |||||||||||||||||||||||||||||||||||||
| Customer accounts receivable, net | ||||||||||||||||||||||||||||||||||||||
| Accrued unbilled revenues, net | ||||||||||||||||||||||||||||||||||||||
| Other accounts receivable, net | ( | |||||||||||||||||||||||||||||||||||||
| Fuel oil stock, at average cost | ||||||||||||||||||||||||||||||||||||||
| Materials and supplies, at average cost | ||||||||||||||||||||||||||||||||||||||
| Prepayments and other | ( | |||||||||||||||||||||||||||||||||||||
| Regulatory assets | ||||||||||||||||||||||||||||||||||||||
| Total current assets | ( | |||||||||||||||||||||||||||||||||||||
| Other long-term assets | ||||||||||||||||||||||||||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||||||||||||||||||||||||||
| Regulatory assets | ||||||||||||||||||||||||||||||||||||||
| Defined benefit pension and other postretirement benefit plans asset | ||||||||||||||||||||||||||||||||||||||
| Other | ( | |||||||||||||||||||||||||||||||||||||
| Total other long-term assets | ( | |||||||||||||||||||||||||||||||||||||
| Total assets | $ | ( | $ | |||||||||||||||||||||||||||||||||||
(continued)
30
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Balance Sheet (continued)
September 30, 2026
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsi-diaries | Consoli- dating adjustments | Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
| Capitalization and liabilities | ||||||||||||||||||||||||||||||||||||||
| Capitalization | ||||||||||||||||||||||||||||||||||||||
| Common stock equity | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Long-term debt, net | ( | |||||||||||||||||||||||||||||||||||||
| Total capitalization | ( | |||||||||||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||||||||||||
| Current portion of operating lease liabilities | ||||||||||||||||||||||||||||||||||||||
| Short-term borrowings from affiliate | ( | |||||||||||||||||||||||||||||||||||||
| Accounts payable | ||||||||||||||||||||||||||||||||||||||
| Interest and preferred dividends payable | ( | |||||||||||||||||||||||||||||||||||||
| Taxes accrued, including revenue taxes | ( | |||||||||||||||||||||||||||||||||||||
| Regulatory liabilities | ||||||||||||||||||||||||||||||||||||||
Wildfire tort-related claims | ||||||||||||||||||||||||||||||||||||||
| Other | ( | |||||||||||||||||||||||||||||||||||||
| Total current liabilities | ( | |||||||||||||||||||||||||||||||||||||
| Deferred credits and other liabilities | ||||||||||||||||||||||||||||||||||||||
| Operating lease liabilities | ||||||||||||||||||||||||||||||||||||||
| Finance lease liabilities | ||||||||||||||||||||||||||||||||||||||
| Deferred income taxes | ( | |||||||||||||||||||||||||||||||||||||
| Regulatory liabilities | ||||||||||||||||||||||||||||||||||||||
| Unamortized tax credits | ||||||||||||||||||||||||||||||||||||||
| Defined benefit pension plans liability | ||||||||||||||||||||||||||||||||||||||
Wildfire tort-related claims | ||||||||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||||||||
| Total deferred credits and other liabilities | ( | |||||||||||||||||||||||||||||||||||||
| Total capitalization and liabilities | $ | ( | $ | |||||||||||||||||||||||||||||||||||
31
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Balance Sheet
December 31, 2025
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsi-diaries | Consoli- dating adjustments | Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||
| Property, plant and equipment | ||||||||||||||||||||||||||||||||||||||
| Utility property, plant and equipment | ||||||||||||||||||||||||||||||||||||||
| Land | $ | $ | ||||||||||||||||||||||||||||||||||||
| Plant and equipment | ||||||||||||||||||||||||||||||||||||||
Right-of-use assets - finance lease | ||||||||||||||||||||||||||||||||||||||
| Less accumulated depreciation | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Construction in progress | ||||||||||||||||||||||||||||||||||||||
| Utility property, plant and equipment, net | ||||||||||||||||||||||||||||||||||||||
| Nonutility property, plant and equipment, less accumulated depreciation | ||||||||||||||||||||||||||||||||||||||
| Total property, plant and equipment, net | ||||||||||||||||||||||||||||||||||||||
Investment in wholly owned subsidiaries, at equity | ( | |||||||||||||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||||||||||||||
| Customer accounts receivable, net | ||||||||||||||||||||||||||||||||||||||
| Accrued unbilled revenues, net | ||||||||||||||||||||||||||||||||||||||
| Other accounts receivable, net | ( | |||||||||||||||||||||||||||||||||||||
| Fuel oil stock, at average cost | ||||||||||||||||||||||||||||||||||||||
| Materials and supplies, at average cost | ||||||||||||||||||||||||||||||||||||||
| Prepayments and other | ( | |||||||||||||||||||||||||||||||||||||
| Regulatory assets | ||||||||||||||||||||||||||||||||||||||
| Total current assets | ( | |||||||||||||||||||||||||||||||||||||
| Other long-term assets | ||||||||||||||||||||||||||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||||||||||||||||||||||||||
| Regulatory assets | ||||||||||||||||||||||||||||||||||||||
| Defined benefit pension and other postretirement benefit plans asset | ||||||||||||||||||||||||||||||||||||||
| Investment in unconsolidated affiliate | ||||||||||||||||||||||||||||||||||||||
| Other | ( | |||||||||||||||||||||||||||||||||||||
| Total other long-term assets | ( | |||||||||||||||||||||||||||||||||||||
| Total assets | $ | ( | $ | |||||||||||||||||||||||||||||||||||
(continued)
32
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Balance Sheet (continued)
December 31, 2025
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsi-diaries | Consoli- dating adjustments | Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
| Capitalization and liabilities | ||||||||||||||||||||||||||||||||||||||
| Capitalization | ||||||||||||||||||||||||||||||||||||||
| Common stock equity | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Long-term debt, net | ( | |||||||||||||||||||||||||||||||||||||
| Total capitalization | ( | |||||||||||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||||||||||||
| Current portion of operating lease liabilities | ||||||||||||||||||||||||||||||||||||||
Current portion of long-term debt, net | ||||||||||||||||||||||||||||||||||||||
| Accounts payable | ||||||||||||||||||||||||||||||||||||||
| Interest and preferred dividends payable | ( | |||||||||||||||||||||||||||||||||||||
| Taxes accrued, including revenue taxes | ( | |||||||||||||||||||||||||||||||||||||
| Regulatory liabilities | ||||||||||||||||||||||||||||||||||||||
Wildfire tort-related claims | ||||||||||||||||||||||||||||||||||||||
| Other | ( | |||||||||||||||||||||||||||||||||||||
| Total current liabilities | ( | |||||||||||||||||||||||||||||||||||||
| Deferred credits and other liabilities | ||||||||||||||||||||||||||||||||||||||
| Operating lease liabilities | ||||||||||||||||||||||||||||||||||||||
| Finance lease liabilities | ||||||||||||||||||||||||||||||||||||||
| Deferred income taxes | ( | |||||||||||||||||||||||||||||||||||||
| Regulatory liabilities | ||||||||||||||||||||||||||||||||||||||
| Unamortized tax credits | ||||||||||||||||||||||||||||||||||||||
| Defined benefit pension plan liability | ||||||||||||||||||||||||||||||||||||||
Wildfire tort-related claims | ||||||||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||||||||
| Total deferred credits and other liabilities | ( | |||||||||||||||||||||||||||||||||||||
| Total capitalization and liabilities | $ | ( | $ | |||||||||||||||||||||||||||||||||||
33
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Changes in Common Stock Equity
Nine months ended September 30, 2026
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Net income for common stock | ( | |||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||||||
| Common stock dividends | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||
| Issuance of common stock, net of expenses | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Additional paid-in capital | — | ( | ||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2026 | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Changes in Common Stock Equity
Nine months ended September 30, 2025
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | ( | $ | |||||||||||||||||||||||||||||||||||
Net income for common stock | ( | |||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of taxes | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||||||
| Common stock dividends | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||
| Additional paid-in capital | — | ( | ||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | ( | $ | |||||||||||||||||||||||||||||||||||
34
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Cash Flows
Nine months ended September 30, 2026
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
| Net cash provided by operating activities | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Cash flows from investing activities | ||||||||||||||||||||||||||||||||||||||
| Capital expenditures | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Advances to affiliates | ( | |||||||||||||||||||||||||||||||||||||
| Other | ( | ( | ||||||||||||||||||||||||||||||||||||
| Net cash used in investing activities | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Cash flows from financing activities | ||||||||||||||||||||||||||||||||||||||
| Common stock dividends | ( | ( | ||||||||||||||||||||||||||||||||||||
Net increase in short-term borrowings from affiliate | ( | |||||||||||||||||||||||||||||||||||||
| Repayment of long-term debt | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Payments of obligations under finance leases | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Other | ( | ( | ||||||||||||||||||||||||||||||||||||
| Net cash provided by (used in) financing activities | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Cash and cash equivalents, beginning of period | ||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||||||||||||||||||||||||||||||||
Hawaiian Electric Company, Inc. and Subsidiaries
Condensed Consolidating Statement of Cash Flows
Nine months ended September 30, 2025
| (in thousands) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Other subsidiaries | Consolidating adjustments | Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Cash flows from investing activities | ||||||||||||||||||||||||||||||||||||||
| Capital expenditures | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Advances to affiliates | ( | |||||||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||||||||
| Net cash used in investing activities | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Cash flows from financing activities | ||||||||||||||||||||||||||||||||||||||
| Common stock dividends | ( | ( | ||||||||||||||||||||||||||||||||||||
| Preferred stock dividends of Hawaiian Electric and subsidiaries | ( | ( | ||||||||||||||||||||||||||||||||||||
Proceeds from capital contribution from parent | ||||||||||||||||||||||||||||||||||||||
| Repayment of short-term debt | ( | ( | ||||||||||||||||||||||||||||||||||||
| Proceeds from issuance of long-term debt | ||||||||||||||||||||||||||||||||||||||
Net increase in short-term borrowings from affiliate | ( | |||||||||||||||||||||||||||||||||||||
| Repayment of long-term debt | ( | ( | ||||||||||||||||||||||||||||||||||||
| Payments of obligations under finance leases | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Other | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Net cash provided by (used in) financing activities | ( | ( | ||||||||||||||||||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ( | ||||||||||||||||||||||||||||||||||||
Cash and cash equivalents, beginning of period | ||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||||||||||||||||||||||||||||||||
35
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Note 5 · Credit agreements and long-term debt
Credit agreements. The following table provides the credit agreement capacity, outstanding and undrawn components as of September 30, 2026 and December 31, 2025.
As of September 30, 2026 | As of December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (in millions) | Capacity | Outstanding | Undrawn | Capacity | Outstanding | Undrawn | |||||||||||||||||||||||||||||
| HEI corporate: | |||||||||||||||||||||||||||||||||||
| Unsecured revolving line of credit | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Hawaiian Electric: | |||||||||||||||||||||||||||||||||||
| Unsecured revolving line of credit | |||||||||||||||||||||||||||||||||||
ABL Facility1 | |||||||||||||||||||||||||||||||||||
Borrowing from HEI - standing commitment letter2 | |||||||||||||||||||||||||||||||||||
| Total Hawaiian Electric | |||||||||||||||||||||||||||||||||||
Total Consolidated HEI2 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
1 Borrowing capacity is calculated based on eligible customer accounts receivable balance at the end of each period.
2 $75
Syndicated credit agreements. On September 5, 2025, HEI and Hawaiian Electric each entered into a fourth amended and restated senior unsecured revolving credit facility (the HEI Facility and the Hawaiian Electric Facility, respectively) with a syndicate of eight financial institutions. The aggregate amount of revolving commitments under the HEI Facility was increased to $300 million from $175 million and includes a $25 million letter of credit sub-facility and a $30 million swingline sub-facility. The HEI Facility’s commitment termination date was extended to September 5, 2030 from May 14, 2027. The aggregate amount of revolving commitments available under the Hawaiian Electric Facility was increased to $300 million from $200 million and includes a $40 million letter of credit sub-facility and a $30 million swingline sub-facility. On May 8, 2026, the PUC issued an order extending the term of the Hawaiian Electric Facility to September 5, 2030. The Hawaiian Electric Facility also allows for commitment increases of up to an additional $75 million, subject to customary conditions. None of the facilities are collateralized. As of September 30, 2026, HEI and Hawaiian Electric each had no draws on their revolving facilities.
Intercompany borrowing agreement. Under the HEI and Hawaiian Electric Intercompany Borrowing and Investment Policy effective October 3, 2025 (the Intercompany Borrowing Policy), HEI has committed to make revolving short-term loans to Hawaiian Electric pursuant to the terms set forth in the standing commitment letter dated December 5, 2025 (the 2025 Commitment Letter). For loans that mature on or before December 4, 2026, the 2025 Commitment Letter provides a borrowing limit of $75 million outstanding at any time and the applicable interest rate. Hawaiian Electric currently has no borrowings under the Intercompany Borrowing Policy and the 2025 Commitment Letter.
Asset-based lending facility credit agreement. On May 17, 2024, Hawaiian Electric, through a special-purpose subsidiary, entered into an ABL Facility credit agreement (ABL Credit Facility Agreement) with several banks, which, subject to the limitations and conditions set forth in such agreement, allows borrowings of up to $250 million on a revolving basis using certain accounts receivable as collateral. The ABL Facility was approved by the PUC, became effective on July 24, 2024 and will expire on July 24, 2027. As of September 30, 2026, total available capacity under the ABL Facility was $250 million and remains undrawn.
36
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Long-term debt. As of September 30, 2026, the Company and Hawaiian Electric were in compliance with all applicable financial covenants. The following table summarizes the long-term debt, net for the Company and Hawaiian Electric as of September 30, 2026 and December 31, 2025.
| (in thousands) | September 30, 2026 | December 31, 2025 | ||||||
| All other: | ||||||||
HEI | $ | $ | ||||||
HEI revolving credit facility SOFR + | ||||||||
Mahipapa | ||||||||
Mahipapa | ||||||||
| Less unamortized debt issuance costs and debt discount | ( | ( | ||||||
| Less current portion long-term debt, net of unamortized debt issuance cost | ( | |||||||
All other long-term debt, net | ||||||||
| Hawaiian Electric: | ||||||||
| Special purpose revenue bonds and unsecured senior notes | ||||||||
| Less unamortized debt issuance costs | ( | ( | ||||||
| Less current portion long-term debt, net of unamortized debt issuance cost | ( | |||||||
Hawaiian Electric long-term debt, net | ||||||||
HEI consolidated long-term debt, net | $ | $ | ||||||
1 HEI’s revolving credit facility’s term benchmark margin was 2.25 % and 2.50 %, as of September 30, 2026 and December 31, 2025, respectively, reduced in July 2026 as a result of improved credit ratings. As of December 31, 2025, the HEI revolving credit facility’s weighted-average interest rate was 6.32 %. See “Syndicated credit agreements” above.
2 As of December 31, 2025, excludes Mahipapa’s non-recourse loans amounting to $54.0 million which were classified as “Liabilities held for sale” on the Company’s Condensed Consolidated Balance Sheets. See “Assets held for sale-Mahipapa” in Note 3.
Note 6 · Shareholders' equity
Accumulated other comprehensive income/(loss). Changes in the balances of each component of accumulated other comprehensive income/(loss) (AOCI) were as follows:
HEI consolidated | Hawaiian Electric consolidated | ||||||||||||||||||||||||||||
| (in thousands) | Unrealized gains (losses) on derivatives | Retirement benefit plans | AOCI | AOCI-Retirement benefit plans | |||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | |||||||||||||||||||||||||
| Current period other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||||||||
| Balance, September 30, 2026 | $ | $ | $ | $ | |||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | |||||||||||||||||||||||||
| Current period other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | |||||||||||||||||||||||||
37
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Reclassifications out of AOCI were as follows:
| Amount reclassified from AOCI | Affected line item in the Statements of Income / Balance Sheets | |||||||||||||||||||||||||||||||
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| HEI consolidated | ||||||||||||||||||||||||||||||||
| Net realized gains on derivatives qualifying as cash flow hedges | $ | ( | $ | ( | $ | ( | $ | ( | Interest expense and gain (loss) on sale of subsidiaries and impairment losses on subsidiary assets sold and assets formerly classified as held for sale | |||||||||||||||||||||||
| Retirement benefit plans: | ||||||||||||||||||||||||||||||||
| Amortization of net gains recognized during the period in net periodic benefit cost | ( | ( | ( | ( | See Note 8 for additional details | |||||||||||||||||||||||||||
| Impact of D&Os of the PUC included in regulatory accounts | See Note 8 for additional details | |||||||||||||||||||||||||||||||
| Total reclassifications | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||
| Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
| Retirement benefit plans: | ||||||||||||||||||||||||||||||||
| Amortization of net gains recognized during the period in net periodic benefit cost | $ | ( | $ | ( | $ | ( | $ | ( | See Note 8 for additional details | |||||||||||||||||||||||
| Impact of D&Os of the PUC included in regulatory accounts | See Note 8 for additional details | |||||||||||||||||||||||||||||||
| Total reclassifications | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||
Note 7 · Revenues
The following tables disaggregate revenues by major source, timing of revenue recognition, and segment:
| Three months ended September 30, 2026 | Nine months ended September 30, 2026 | ||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Electric utility | All other | Total | Electric utility | All other | Total | |||||||||||||||||||||||||||||||||||
| Revenues from contracts with customers | |||||||||||||||||||||||||||||||||||||||||
| Electric energy sales - residential | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Electric energy sales - commercial | |||||||||||||||||||||||||||||||||||||||||
| Electric energy sales - large light and power | |||||||||||||||||||||||||||||||||||||||||
| Electric energy sales - other | |||||||||||||||||||||||||||||||||||||||||
| Other sales | |||||||||||||||||||||||||||||||||||||||||
| Total revenues from contracts with customers | |||||||||||||||||||||||||||||||||||||||||
| Revenues from other sources | |||||||||||||||||||||||||||||||||||||||||
| Regulatory revenue | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||||||||
| Total revenues from other sources | |||||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Timing of revenue recognition | |||||||||||||||||||||||||||||||||||||||||
| Total revenues from contracts with customers - services/goods transferred over time | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
38
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
| Three months ended September 30, 2025 | Nine months ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||
| (in thousands) | Electric utility | All other | Total | Electric utility | All other | Total | ||||||||||||||||||||||||||||||||
| Revenues from contracts with customers | ||||||||||||||||||||||||||||||||||||||
| Electric energy sales - residential | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Electric energy sales - commercial | ||||||||||||||||||||||||||||||||||||||
| Electric energy sales - large light and power | ||||||||||||||||||||||||||||||||||||||
| Electric energy sales - other | ||||||||||||||||||||||||||||||||||||||
| Other sales | ||||||||||||||||||||||||||||||||||||||
| Total revenues from contracts with customers | ||||||||||||||||||||||||||||||||||||||
| Revenues from other sources | ||||||||||||||||||||||||||||||||||||||
| Regulatory revenue | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||||||||
| Total revenues from other sources | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Timing of revenue recognition | ||||||||||||||||||||||||||||||||||||||
| Total revenues from contracts with customers - services/goods transferred over time | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
There are no material contract assets or liabilities associated with revenues from contracts with customers existing at September 30, 2026 or December 31, 2025. Accounts receivable and unbilled revenues related to contracts with customers represent an unconditional right to consideration since all performance obligations have been satisfied. These amounts are disclosed as “Accounts receivable and unbilled revenues, net” on HEI’s Condensed Consolidated Balance Sheets and “Customer accounts receivable, net” and “Accrued unbilled revenues, net” on Hawaiian Electric’s Condensed Consolidated Balance Sheets.
As of September 30, 2026, the Company had no material remaining performance obligations due to the nature of the Company’s contracts with its customers. For the Utilities, performance obligations are fulfilled as electricity is delivered to customers.
39
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Note 8 · Retirement benefits
Defined benefit pension and other postretirement benefit plans information. The Company contributed $10 million ($10 million by the Utilities) to its pension and other postretirement benefit plans during the first nine months of 2026, compared to $6 million ($6 million by the Utilities) during the first nine months of 2025. The Company’s current estimate of total contributions to its pension and other postretirement benefit plans in 2026 is $15 million ($15 million by the Utilities), compared to $12 million ($11 million by the Utilities) in 2025. In addition, the Company expects to pay directly $3 million ($1 million by the Utilities) of benefits in 2026, compared to $2 million ($1 million by the Utilities) paid in 2025.
The components of net periodic pension costs and net periodic benefit costs for HEI consolidated and Hawaiian Electric consolidated were as follows:
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Pension benefits | Other benefits | Pension benefits | Other benefits | |||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||
| HEI consolidated | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Service cost | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Interest cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Amortization of net actuarial (gain)/losses | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Net periodic pension/benefit cost (return) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Impact of PUC D&Os | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net periodic pension/benefit cost (return) (adjusted for impact of PUC D&Os) | $ | $ | $ | ( | $ | ( | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||
| Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Service cost | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Interest cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Amortization of net actuarial (gain)/losses | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Net periodic pension/benefit cost (return) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Impact of PUC D&Os | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net periodic pension/benefit cost (return) (adjusted for impact of PUC D&Os) | $ | $ | $ | ( | $ | ( | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||
HEI consolidated recorded retirement benefits expense of $33 million ($32 million by the Utilities) in the first nine months of 2026 and $35 million ($34 million by the Utilities) in the first nine months of 2025, and charged the remaining net periodic benefit cost primarily to electric utility plant.
The Utilities have implemented pension and OPEB tracking mechanisms under which all of their retirement benefit expenses (except for executive life and nonqualified pension plan expenses) determined in accordance with GAAP are recovered over time. Under the tracking mechanisms, any actual costs determined in accordance with GAAP that are over/under amounts allowed in rates are charged/credited to a regulatory asset/liability. The regulatory asset/liability for each utility will then be amortized over five years beginning with the respective utility’s next rate case.
Defined contribution plans information. For the first nine months of 2026 and 2025, the Company’s expenses and cash contributions for its defined contribution plans under the Hawaiian Electric Industries Retirement Savings Plan (HEIRSP) were $8.3 6.2 8.1 5.9
40
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Note 9 · Share-based compensation
Under the 2010 Equity and Incentive Plan, as amended and restated effective February 9, 2024 (EIP), HEI can issue shares of common stock as incentive compensation to nonemployee directors and selected employees and consultants in the form of stock options, stock appreciation rights, restricted shares, restricted stock units, performance shares and other share-based and cash-based awards.
As of September 30, 2026, approximately 2.4 million shares remained available for future issuance under the terms of the EIP, assuming recycling of shares withheld to satisfy statutory tax liabilities relating to EIP awards, including an estimated 1.6 million shares that could be issued upon the vesting of outstanding restricted stock units and the achievement of performance goals for awards outstanding under long-term incentive plans (assuming that such performance goals are achieved at maximum levels).
Under the 2011 Nonemployee Director Stock Plan (2011 Director Plan), HEI can issue shares of common stock as compensation to nonemployee directors of HEI and its principal subsidiaries. As of September 30, 2026, there were no shares remaining available for future issuance under the 2011 Director Plan. After all of the shares remaining under the 2011 Director Plan were issued, shares for nonemployee director grants of common stock were, and going forward will be, made from available shares under the EIP, which was amended in 2024 to provide for nonemployee director grants.
Share-based compensation expense and the related income taxes were as follows:
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| HEI consolidated | ||||||||||||||||||||||||||
Share-based compensation expense (benefit)1 | $ | $ | ( | $ | $ | |||||||||||||||||||||
| Income taxes | ( | |||||||||||||||||||||||||
| Hawaiian Electric consolidated | ||||||||||||||||||||||||||
Share-based compensation expense (benefit)1 | ( | |||||||||||||||||||||||||
| Income taxes | ||||||||||||||||||||||||||
1 For the three and nine months ended September 30, 2026 and 2025, the Company has not capitalized any share-based compensation.
Stock awards. HEI granted HEI common stock to nonemployee directors under the 2011 Director Plan and EIP as follows:
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||||||
| (dollars in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Shares granted | ||||||||||||||||||||||||||
| Fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Income taxes | ||||||||||||||||||||||||||
The number of shares issued to each nonemployee director of HEI and Hawaiian Electric is determined based on the closing price of HEI common stock on the grant date.
Restricted stock units. Information about HEI’s grants of restricted stock units was as follows:
| Three months ended September 30 | Nine months ended September 30 | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Shares | (1) | Shares | (1) | Shares | (1) | Shares | (1) | ||||||||||||||||||||||||||||||||||||||||
| Outstanding, beginning of period | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Granted | |||||||||||||||||||||||||||||||||||||||||||||||
| Vested | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Forfeited | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Outstanding, end of period | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Total weighted-average grant-date fair value of shares granted (in millions) | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
(1) Weighted-average grant-date fair value per share based on the average price of HEI common stock on the date of grant.
41
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
For the nine months ended September 30, 2026 and 2025, total restricted stock units and related dividends that vested had a fair value of $0.4 million and $0.5 million, respectively, and the related tax benefits were nil and $0.1 million, respectively.
As of September 30, 2026, there was no unrecognized compensation cost related to restricted stock units.
Long-term incentive plan payable in stock. The 2024-26, 2025-27 and 2026-28 long-term incentive plans (LTIP) provide for performance awards under the EIP of shares of HEI common stock based on the satisfaction of performance goals. The number of shares of HEI common stock that may be awarded is fixed on the date the grants are made, subject to the achievement of specified performance levels and calculated dividend equivalents. The potential payout varies from 0 % to 220 % of the number of target shares, depending on the achievement of the goals. The 2024-26 LTIP performance goals include a market condition goal. The market condition goal is based on HEI’s total shareholder return (TSR) compared to the Peer Group (the Company’s compensation peer group consisting of companies in the EEI Index and approved by the Company’s Compensation & Human Capital Management Committee), in each case over the relevant three-year period. The other performance condition goals relate to Hawaiian Electric’s credit rating, public safety, funds from operations to total adjusted debt ratio and customer experience. The 2025-27 and 2026-28 LTIPs include other performance goals (described above) and a relative TSR payout modifier, which may adjust the payout shares based on the relative TSR result. The relative TSR modifier is based on HEI’s TSR compared to the Peer Group.
LTIP linked to TSR. Information about HEI’s LTIP grants linked to TSR was as follows:
| Three months ended September 30 | Nine months ended September 30 | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Shares | (1) | Shares | (1) | Shares | (1) | Shares | (1) | ||||||||||||||||||||||||||||||||||||||||
| Outstanding, beginning of period | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Granted | |||||||||||||||||||||||||||||||||||||||||||||||
| Vested (issued or unissued and cancelled) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Forfeited | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Outstanding, end of period | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Total weighted-average grant-date fair value of shares granted (in millions) | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
(1) Weighted-average grant-date fair value per share determined using a Monte Carlo simulation model.
The grant date fair values of the LTIP awards linked to TSR were determined using a Monte Carlo simulation model utilizing actual information for the common shares of HEI and the Peer Group for the period from the beginning of the performance period to the grant date and estimated future stock volatility of HEI and the Peer Group over the remaining three-year performance period. The expected stock volatility assumptions for HEI and the Peer Group were based on the three-year historic stock volatility. A dividend assumption is not required for the Monte Carlo simulation because the grant payout includes dividend equivalents and projected returns include the value of reinvested dividends.
The following table summarizes the assumptions used to determine the fair value of the LTIP awards linked to TSR and the resulting fair value of LTIP awards granted:
| 2026 | 2025 | |||||||||||||
| Risk-free interest rate | % | % | ||||||||||||
| Expected life in years | ||||||||||||||
| Expected volatility | % | % | ||||||||||||
| Range of expected volatility for Peer Group | ||||||||||||||
| Grant-date fair value (per share) (HEI) | $ | $ | ||||||||||||
| Grant-date fair value (per share) (Hawaiian Electric) | $ | $ | ||||||||||||
There were no
As of September 30, 2026, there was $6.3 million of total unrecognized compensation cost related to the nonvested performance awards payable in shares linked to TSR. The cost is expected to be recognized over a weighted-average period of 1.6 years.
42
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
LTIP awards linked to other performance conditions. Information about HEI’s LTIP awards payable in shares linked to other performance conditions was as follows:
| Three months ended September 30 | Nine months ended September 30 | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Shares | (1) | Shares | (1) | Shares | (1) | Shares | (1) | ||||||||||||||||||||||||||||||||||||||||
| Outstanding, beginning of period | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Granted | |||||||||||||||||||||||||||||||||||||||||||||||
| Vested | |||||||||||||||||||||||||||||||||||||||||||||||
Increase above target/(cancelled) due to performance | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Forfeited | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Outstanding, end of period | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Total weighted-average grant-date fair value of shares granted (at target performance levels) (in millions) | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
There were no
As of September 30, 2026, there was $0.6 million of total unrecognized compensation cost related to the nonvested shares linked to performance conditions other than TSR. The cost is expected to be recognized over a weighted-average period of 0.3 years.
Note 10 · Income taxes
The Company’s effective tax rate (combined federal and state income tax rates) for the nine months ended September 30, 2026 was 15 %. This rate differs from the combined statutory rates, primarily due to the Utilities’ amortization of excess deferred income taxes related to the 2017 Tax Cuts and Jobs Act reduction in tax rate from 35% to 21%, valuation allowance release related to the gains on the ASB investment and research and development tax credit claims recognized in 2026; partially offset by higher executive compensation limitations and substantially higher pretax income related to the remeasurement of the wildfire tort-related settlement liability to present value (net of accretion) and investment in ASB to fair market value, net of the impairment of Pacific Current assets.
For the nine months ended September 30, 2025, the Company’s effective tax rate was 25 %.
The Company’s effective tax rate was lower for the first nine months of 2026, compared to 2025, primarily due to discrete tax benefits recognized in 2026 from the valuation allowance release related to the gains on the ASB investment and research and development tax credit claims recognized; partially offset by the substantially higher pretax income related to the remeasurement of the wildfire tort-related settlement liability to present value (net of accretion) and investment in ASB to fair market value, net of the impairment of Pacific Current assets. The primary discrete tax item affecting the 2025 period was the recapture of investment tax credits.
The Utilities’ effective tax rate (combined federal and state income tax rates) for the nine months ended September 30, 2026 was 23 %. This rate differs from the combined statutory rates, primarily due to the Utilities’ amortization of excess deferred income taxes related to the 2017 Tax Cuts and Jobs Act reduction in tax rate from 35% to 21%, and research and development tax credit claims recognized in 2026; partially offset by higher executive compensation limitations and substantially higher pretax income related to the remeasurement of the wildfire tort-related settlement liability to present value (net of accretion).
For the nine months ended September 30, 2025, the Utilities’ effective tax rate was 22 %.
The Utilities’ effective tax rate was higher for the first nine months of 2026, compared to 2025, primarily due to a discrete tax expense recognized in 2026 resulting from the remeasurement of the Utilities’ remaining wildfire tort-related settlement liability at present value, partially offset by research and development credit claims recognized in 2026.
The Company regularly assesses the need for a valuation allowance on its deferred tax assets. In making this assessment, the Company considers both positive and negative evidence related to the likelihood of realization of its deferred tax assets to determine, based on the weight of all available evidence, whether it is more likely than not that some or all of the deferred tax
43
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
assets will not be realized. A valuation allowance release indicates that it is more likely than not that the deferred tax assets will be realized.
As of September 30, 2026, the Company released $15.9 million of valuation allowances recorded against its beginning-of-year deferred tax assets, representing a tax benefit of approximately 7 %. Based on its analysis of all positive and negative evidence, the Company concluded that it is more likely than not that a portion of its U.S. federal and state deferred tax assets will be realized based on current and anticipated future earnings. When a change in a valuation allowance is recognized during an interim period, the portion resulting from current-year income is included in the annual effective tax rate, while the portion supported by projections of future taxable income is recognized as a discrete tax benefit in the interim period. The release of these valuation allowances resulted in a discrete tax benefit of $15.9
The Company continues to maintain a valuation allowance against the remaining deferred tax assets that do not meet the more-likely-than-not realization criterion and assesses the need for a valuation allowance on a quarterly basis.
On July 4, 2025, federal tax legislation, commonly referred to as the One Big Beautiful Bill Act (OBBBA), which includes a broad range of tax reform provisions, was signed into law in the United States. The Company recognized the impact of OBBBA. The Company will continue to assess the legislation’s impact on future reporting periods; however, the legislation is not anticipated to have a material impact on the Company’s financial statements.
Currently, there are no active Internal Revenue Service income tax examinations. In January 2026, the Company was notified that the State of Hawaii would audit the Company’s income tax returns for tax years 2022 through 2024. In June 2026, the Company received a schedule of proposed income tax assessments from the Hawaii Department of Taxation. The proposed assessment relates to the capital goods excise tax credit claimed on the 2022 Hawaii State tax return, which the Company does not plan to dispute.
The Company recorded an additional $0.3 million of tax expense as a discrete item during the second quarter of 2026 related to this proposed assessment. No interest expense was recorded since the Company has sufficient tax credit carryforwards on its 2022 Hawaii State tax return and intends to use those carryforward credits to satisfy the proposed tax assessment.
As of September 2026, the tax auditor concurred that the proposed adjustment may be offset by available tax credit carryforwards. No other audit issues remain outstanding, and the filing of the amended returns for 2022 through 2024 represents the final step necessary to close the audit. The Company expects to file the amended returns by December 2026.
44
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Note 11 · Cash flows
| Nine months ended September 30 | 2026 | 2025 | ||||||||||||
| (in millions) | ||||||||||||||
| Supplemental disclosures of cash flow information | ||||||||||||||
| Cash payments (receipts): | ||||||||||||||
| HEI consolidated | ||||||||||||||
| Interest to non-affiliates, net of amounts capitalized | $ | $ | ||||||||||||
| Interest on finance lease obligations | ||||||||||||||
| Federal income tax, net | ( | |||||||||||||
| State of Hawaii income tax, net (including refundable credits) | ( | |||||||||||||
| Hawaiian Electric consolidated | ||||||||||||||
| Interest to non-affiliates, net of amounts capitalized | ||||||||||||||
| Interest on finance lease obligations | ||||||||||||||
| Federal income taxes, net | ( | |||||||||||||
| State of Hawaii income taxes, net (including refundable credits) | ||||||||||||||
| Supplemental disclosures of noncash activities | ||||||||||||||
| HEI consolidated | ||||||||||||||
Common stock issued (gross) for nonemployee director and executive/management compensation (financing)1 | ||||||||||||||
| Debt assumed by buyer - sale of subsidiaries (financing) | ||||||||||||||
| Hawaiian Electric consolidated | ||||||||||||||
Capital contribution from parent related to installment payments of the wildfire tort-related claim liability (financing)2 | ||||||||||||||
Capital distribution from former unconsolidated affiliate (financing)2 | ||||||||||||||
Capital distribution to parent (financing)2 | ||||||||||||||
| Capital contribution from parent of a membership interest in a former unconsolidated affiliate (financing) | ||||||||||||||
| HEI consolidated and Hawaiian Electric consolidated | ||||||||||||||
| Property, plant and equipment | ||||||||||||||
Unpaid invoices and accruals for capital expenditures, balance, end of period (investing) | ||||||||||||||
| Right-of-use assets obtained in exchange for finance lease obligations (financing) | ||||||||||||||
Estimated fair value of noncash contributions in aid of construction (investing) | ||||||||||||||
| Reduction of long-term debt from funds previously transferred for repayment (financing) | ||||||||||||||
1 The amounts shown represent the market value of common stock issued for nonemployee director and executive/management compensation and withheld to satisfy statutory tax liabilities.
2 Included in Hawaiian Electric change in additional paid-in capital. Change in additional paid-in capital represents the noncash capital contribution from parent related to installment payments of the tort-related settlement, net of noncash capital distribution from former unconsolidated affiliate, noncash capital distribution to parent and noncash transfer of operating liabilities from the parent of $12 million.
45
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
Note 12 · Fair value measurements
Fair value measurement and disclosure valuation methodology. The following are descriptions of the valuation methodologies used for assets and liabilities recorded at fair value and for estimating fair value for financial instruments not carried at fair value:
Money market mutual funds. The Company considers all liquid investments purchased with an initial maturity of three months or less and deposits in money market mutual funds that are readily convertible into cash to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value due to the short-term nature of these instruments.
Marketable equity securities. Upon ASB becoming publicly traded in September 2026, the Company’s remaining investment in ASB no longer qualified for the measurement alternative for equity securities without readily determinable fair values and is measured at fair value on a recurring basis based on quoted market prices in an active market, a Level 1 input.
Long-term debt. Fair value of fixed-rate long-term debt was obtained from third-party financial services providers based on the current rates offered for debt of the same or similar remaining maturities and from discounting the future cash flows using the current rates offered for debt of the same or similar risks, terms, and remaining maturities. The carrying amount of floating rate long-term debt approximated fair value because of the short-term interest reset periods. Long-term debt is classified in Level 2 of the valuation hierarchy.
The following table presents the carrying or notional amount, fair value and placement in the fair value hierarchy of the Company’s financial instruments.
| Estimated fair value | ||||||||||||||||||||||||||||||||
| (in thousands) | Carrying or notional amount | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Total | ||||||||||||||||||||||||||||
| September 30, 2026 | ||||||||||||||||||||||||||||||||
| Financial assets | ||||||||||||||||||||||||||||||||
| HEI consolidated | ||||||||||||||||||||||||||||||||
| Money market mutual funds | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Marketable equity securities1 | ||||||||||||||||||||||||||||||||
| Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
| Money market mutual funds | ||||||||||||||||||||||||||||||||
| Financial liabilities | ||||||||||||||||||||||||||||||||
| HEI consolidated | ||||||||||||||||||||||||||||||||
| Long-term debt, net | ||||||||||||||||||||||||||||||||
| Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
| Long-term debt, net | ||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||
| Financial assets | ||||||||||||||||||||||||||||||||
| HEI consolidated | ||||||||||||||||||||||||||||||||
| Money market mutual funds | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
| Money market mutual funds | ||||||||||||||||||||||||||||||||
| Financial liabilities | ||||||||||||||||||||||||||||||||
| HEI consolidated | ||||||||||||||||||||||||||||||||
Long-term debt, net2 | ||||||||||||||||||||||||||||||||
| Hawaiian Electric consolidated | ||||||||||||||||||||||||||||||||
| Long-term debt, net | ||||||||||||||||||||||||||||||||
46
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited) continued
1 Included in “Other current assets” in HEI’s Condensed Consolidated Balance Sheets as of September 30, 2026.
2 Carrying or notional amount does not include $52 million related to Mahipapa long term debt, net which is included in “Liabilities held for sale” in HEI’s Condensed Consolidated Balance Sheets as of December 31, 2025. See Note 3 for more information.
Assets and liabilities measured at fair value on a recurring basis include money market mutual funds. Money market mutual funds are included in “Cash and cash equivalents” and “Restricted cash” in HEI’s Condensed Consolidated Balance Sheets.
There were no Level 3 assets or liabilities as of September 30, 2026 and December 31, 2025.
47
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion updates “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in HEI’s and Hawaiian Electric’s 2025 Form 10-K and should be read in conjunction with such discussion and the 2025 annual consolidated financial statements of HEI and Hawaiian Electric and notes thereto included in HEI’s and Hawaiian Electric’s 2025 Form 10-K, as well as the quarterly condensed consolidated financial statements and notes thereto included in Item 1 of this Form 10-Q.
HEI consolidated
Recent developments. For discussion of the impacts of inflation and other macro-economic factors impacting the Utilities, see also “Recent developments” in Hawaiian Electric’s MD&A. See also “Economic conditions” below for further discussion of the economic impact of recent events, and Note 2 of the Condensed Consolidated Financial Statements for recent updates and disclosures relating to the Maui windstorm and wildfires.
RESULTS OF OPERATIONS
| Three months ended September 30 | % | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | change | Primary reason(s)1 | ||||||||||||||||||||||
| Revenues | $ | 1,008,710 | $ | 790,610 | 28 | Increase in the electric utility segment, partly offset by a decrease in the all other segment. | ||||||||||||||||||||
| Operating income | 41,217 | 52,046 | (21) | Decrease in the electric utility segment, partly offset by an increase in the all other segment. | ||||||||||||||||||||||
| Net income for common stock | 35,450 | 30,747 | 15 | Higher net income related to gain on sale of investment and net unrealized gain on investment measured at fair value, partially offset by higher impairment losses on assets formerly classified as held for sale, higher interest expense due to the accretion related to the remeasuring of the remaining settlement liability (see Note 2 of the Condensed Consolidated Financial Statements) and higher average debt balances and lower operating income. Also see effective tax rate explanations below. | ||||||||||||||||||||||
| Nine months ended September 30 | % | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | change | Primary reason(s)1 | ||||||||||||||||||||||
| Revenues | $ | 2,694,860 | $ | 2,281,072 | 18 | Increase in the electric utility segment, partly offset by a decrease in the all other segment. | ||||||||||||||||||||
Operating income | 298,808 | 168,213 | 78 | Increase in the electric utility segment (primarily due to the adjustment related to remeasuring the remaining settlement liability (see Note 2 of the Condensed Consolidated Financial Statements)) and an increase in the all other segment. | ||||||||||||||||||||||
Net income for common stock | 189,100 | 83,503 | 126 | Higher net income related to higher operating income, gain on sale of investment and net unrealized gain on investment measured at fair value, partially offset by higher impairment losses on assets formerly classified as held for sale, higher interest expense due to the accretion related to the remeasuring of the remaining settlement liability (see Note 2 of the Condensed Consolidated Financial Statements) and lower interest income due to the first installment payment of the tort-related settlement in April 2026. Also see effective tax rate explanations below. | ||||||||||||||||||||||
1 Also, see the all other segment discussion below.
The Company’s effective tax rates for the first nine months of 2026 and 2025 were 15% and 25%, respectively. For the third quarters of 2026 and 2025, the Company’s effective tax rates were (82)% (tax benefit) and 22% tax expense, respectively. The lower effective tax rate for the first nine months of 2026, compared to the same period in 2025, was primarily due to discrete tax benefits recognized in 2026 from the valuation allowance release related to the gains on the ASB investment and research and development tax credit claims recognized; partially offset by the substantially higher pretax income related to the
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remeasurement of the wildfire tort-related settlement liability to present value (net of accretion) and investment in ASB to fair market value, net of the impairment of Pacific Current assets. The lower effective tax rate for the third quarter of 2026, compared to the same period in 2025, was primarily due to discrete tax benefits recognized in third quarter of 2026 from the valuation allowance release related to the gains on the ASB investment, impairment of Pacific Current assets, accretion of the wildfire tort-related settlement liability, and research and development tax credit claims recognized.
Maui windstorm and wildfires related items, net. For the three and nine months ended September 30, 2026 and 2025, the Company’s incremental items related to the Maui windstorm and wildfires as discussed in Note 2 of the Condensed Consolidated Financial Statements, were as follows:
| Three months ended September 30, 2026 | Nine months ended September 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Electric utility | All other | HEI consolidated | Electric utility | All other | HEI consolidated | ||||||||||||||||||||||||||||||||||||||
Maui windstorm and wildfires related expenses: | ||||||||||||||||||||||||||||||||||||||||||||
| Legal expenses | $ | 1,028 | $ | (26) | $ | 1,002 | $ | 3,592 | $ | 2,642 | $ | 6,234 | ||||||||||||||||||||||||||||||||
| Other expense | — | 31 | 31 | 1,116 | 293 | 1,409 | ||||||||||||||||||||||||||||||||||||||
Total Maui windstorm and wildfires related expenses | 1,028 | 5 | 1,033 | 4,708 | 2,935 | 7,643 | ||||||||||||||||||||||||||||||||||||||
Insurance recoveries1 | (35) | (172) | (207) | (8,866) | (515) | (9,381) | ||||||||||||||||||||||||||||||||||||||
Settlement remeasurement2 | — | — | — | (153,870) | — | (153,870) | ||||||||||||||||||||||||||||||||||||||
Accretion expense3 | 18,010 | — | 18,010 | 35,724 | — | 35,724 | ||||||||||||||||||||||||||||||||||||||
Total Maui windstorm and wildfires related items, net | $ | 19,003 | $ | (167) | $ | 18,836 | $ | (122,304) | $ | 2,420 | $ | (119,884) | ||||||||||||||||||||||||||||||||
| Three months ended September 30, 2025 | Nine months ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||
| (in thousands) | Electric utility | All other | HEI consolidated | Electric utility | All other | HEI consolidated | ||||||||||||||||||||||||||||||||
Maui windstorm and wildfires related expenses: | ||||||||||||||||||||||||||||||||||||||
| Legal expenses | $ | 4,316 | $ | 1,478 | $ | 5,794 | $ | 12,469 | $ | 8,063 | $ | 20,532 | ||||||||||||||||||||||||||
Outside services expense | — | — | — | — | 135 | 135 | ||||||||||||||||||||||||||||||||
| Wildfire securities-related claims | — | 47,750 | 47,750 | — | 47,750 | 47,750 | ||||||||||||||||||||||||||||||||
Other expense | 5,791 | 101 | 5,892 | 17,278 | 401 | 17,679 | ||||||||||||||||||||||||||||||||
| Interest expense | 131 | 267 | 398 | 2,543 | 756 | 3,299 | ||||||||||||||||||||||||||||||||
Total Maui windstorm and wildfires related expenses | 10,238 | 49,596 | 59,834 | 32,290 | 57,105 | 89,395 | ||||||||||||||||||||||||||||||||
Insurance recoveries4 | (430) | (48,640) | (49,070) | 126 | (53,500) | (53,374) | ||||||||||||||||||||||||||||||||
Deferral treatment approved by the PUC5 | (6,237) | — | (6,237) | (21,809) | — | (21,809) | ||||||||||||||||||||||||||||||||
Total Maui windstorm and wildfires related expenses, net of insurance recoveries and approved deferral treatment | $ | 3,571 | $ | 956 | $ | 4,527 | $ | 10,607 | $ | 3,605 | $ | 14,212 | ||||||||||||||||||||||||||
1 Includes $8.5 million recognized as an adjustment to the Wildfire tort-related claims for the nine months ended September 30, 2026.
2 Represents an adjustment related to remeasuring the remaining settlement liability at present value in accordance with Accounting Standards Codification Topic 835-30 Imputation of Interest.
3 Represents accretion expense related to remeasuring the remaining settlement liability, which is included in “Interest expense, net” and “Interest expense and other charges, net” in HEI’s and the Utilities’ Condensed Consolidated Statements of Income, respectively.
4 HEI consolidated includes insurance recovery related to the settlement of the securities class action of $47.8 million for the three and nine months ended September 30, 2025. Also includes adjustments related to costs that are no longer probable of recovery under the insurance policies. For the three and nine months ended September 30, 2025, HEI consolidated and Electric utility adjustments amount to $1.0 million and $7.6 million, respectively, of which, $0.5 million and $4.5 million were deferred to a regulatory asset, respectively, and are reported on line “Deferral treatment approved by the PUC.”
5 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 deferred to a regulatory asset. See “Risk Factors” in Item 1A. for further discussion of regulatory risks. See Note 2 of the Condensed Consolidated Financial Statements.
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Note: The all other segment Maui windstorm and wildfires related expenses (legal, outside services and other) and insurance recoveries are included in “Expenses-Other” and interest expense is included in “Interest expense, net” on the HEI and Subsidiaries Condensed Consolidated Statements of Income. See Electric utility section below for more detail.
From August 8, 2023 through September 30, 2026, HEI and its subsidiaries have incurred approximately $2.28 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 September 30, 2026, HEI and its subsidiaries have recovered the remaining unpaid insurance claim proceeds owed under its excess liability and professional liability insurance policies, and approximately $71 million of insurance coverage is remaining under the directors and officers liability policy, after deducting applicable retention amounts and amounts expected to be recovered for incurred costs such as the securities class action settlement that 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. In addition, on September 16, 2026, HEI made a partial prepayment of $40 million towards the second annual installment due in April 2027. On October 28, 2026, HEI made another partial prepayment of $40 million towards the second installment amount due in April 2027.
Economic conditions.
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, and U.S. Energy Information Administration).
In the third quarter of 2026, the average daily passenger count was 1.6% lower 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 traveler counts, including those from Japan, remaining at lower levels. In the third quarter, domestic passenger counts were 2.3% above 2019 levels, while international passenger counts (excluding Japan) remained 34.8% below 2019 levels. Due to the weak yen, Japanese visitors are 41.9% below 2019 levels.
Hawaii’s preliminary seasonally adjusted unemployment rate in September 2026 was 2.8%, which was an increase from the September 2025 rate of 2.1%. The national unemployment rate in September 2026 was 4.2%, slightly lower than the September 2025 rate of 4.4%. According to a recent forecast by UHERO, issued on September 25, 2026, jobs in the State will decrease by 0.2% in 2026.
Hawaii’s petroleum product prices are correlated to the crude oil price in international markets. The price of crude oil has increased 39.7% over the same quarter in the prior year.
At its September 16, 2026 meeting, the Federal Open Market Committee (FOMC) decided to raise the federal funds rate target range to 3.75% to 4.00%. The FOMC noted that while inflation remains elevated, domestic spending, productivity growth and capital investment are strong.
UHERO forecasts full year 2026 real GDP to increase 0.6%, real personal income to increase 1.1%, total visitor arrivals to decrease 0.7%, and an unemployment rate of 2.5% for the State. According to UHERO, Hawaii’s economy has slowed due to the war-driven oil prices and an active storm season. Gradual relief is expected as energy prices ease and storm recovery proceeds.
See also “Recent Developments” in the “Electric utility” section below for further discussion of the economic impact of recent events.
All other segment. The all other business segment loss includes results of the stand-alone corporate operations of HEI, ASB Hawaii 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, and GLST1 up until its termination on June 3, 2026.
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| Three months ended September 30 | ||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | Change | Primary reason(s) | ||||||||||||||||||||||||||||||||||
| Revenues | $ | 1,606 | $ | 3,182 | $ | (1,576) | Lower revenues primarily due to lower sales at Pacific Current subsidiaries. | |||||||||||||||||||||||||||||||
| Operating loss | (6,956) | (10,747) | 3,791 | Lower operating loss primarily due to the transfer of the majority of corporate general and administrative costs to the Utilities as part of the June 2026 integration to combine the companies. | ||||||||||||||||||||||||||||||||||
| Net income (loss) | 21,962 | (6,241) | 28,203 | Change in net income (loss) related to gain on sale of investment and net unrealized gain on investment measured at fair value and lower interest expense due to lower average debt balances, partly offset by higher impairment losses on assets formerly classified as held for sale and lower interest income due to the first installment payment of the tort-related settlement in April 2026. Also see effective tax rate explanations above. | ||||||||||||||||||||||||||||||||||
| Nine months ended September 30 | ||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | Change | Primary reason(s) | ||||||||||||||||||||||||||||||||||
| Revenues | $ | 6,852 | $ | 12,796 | $ | (5,944) | Lower revenues primarily due to lower sales at Pacific Current1 subsidiaries. | |||||||||||||||||||||||||||||||
| Operating loss | (30,462) | (35,061) | 4,599 | Lower operating loss primarily due to lower Pacific Current losses and the transfer of the majority of corporate general and administrative costs to the Utilities as part of the June 2026 integration to combine the companies, partly offset by higher corporate consulting expense. | ||||||||||||||||||||||||||||||||||
| Net income (loss) | 2,411 | (40,451) | 42,862 | Change in net income (loss) related to gain on sale of investment and net unrealized gain on investment measured at fair value and lower interest expense due to lower average debt balances, partly offset by higher impairment losses on assets formerly classified as held for sale and lower interest income due to the first installment payment of the tort-related settlement in April 2026. Also see effective tax rate explanations above. | ||||||||||||||||||||||||||||||||||
1 As a subsidiary of Hamakua Holdings, Hamakua Energy’s sales to Hawaii Electric Light (a regulated affiliate) up until the close of its sale on March 10, 2025, are eliminated in consolidation.
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 (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, including 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 which owned a 6-MW solar photovoltaic system that provides renewable energy to Kauai Island Utility Cooperative; Pacific Current’s subsidiary, Mahipapa, which owns a 7.5-MW nameplate biomass facility on Kauai; as well as eliminations of intercompany transactions.
In late February 2024, Hamakua Energy’s combustion turbine and its leased combustion turbine unexpectedly sustained damages from contaminated fuel resulting in a plant shut down through June 2024. In addition, in March 2024, a fire, which was ignited from a vendor’s welding activities during scheduled maintenance, destroyed the cooling tower at the Mahipapa facility on Kauai resulting in a plant shutdown through December 2024. The Company is currently working with its legal counsel on seeking recovery of its losses related to damages sustained to its plant facilities.
As part of HEI’s comprehensive review of strategic options for certain assets of Pacific Current, in March 2025, Pacific Current closed on the sale of Hamakua Holdings, a then wholly owned subsidiary of Pacific Current and parent company of Hamakua Energy, to an unaffiliated third party. In addition, in August 2025, Pacific Current, through an indirect subsidiary, sold all of its membership interests in Mauo, Alenuihaha Developments, LLC, Kaʻieʻie Waho and Upena, LLC. On November 3, 2026, Mahipapa filed a voluntary petition for bankruptcy under Chapter 7 in the United States Bankruptcy Court for the District of Hawaii. See Note 3 of the Condensed Consolidated Financial Statements for more information.
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FINANCIAL CONDITION
Liquidity and capital resources. See “Credit and Capital Market Risk” in Item 1A. Risk Factors in HEI’s and Hawaiian Electric’s 2025 Form 10-K and in Item 1A. Risk Factors below.
HEI’s and the Utilities’ future results of operations are subject to significant risks and uncertainties. Factors that could cause actual results to differ materially from expectations include, but are not limited to, access to lower-cost sources of capital, the ability to attract and retain key personnel, and pending or threatened litigation, including the wildfire-related litigation described above.
The Company remains focused on maintaining a strong and financially healthy enterprise and has taken additional measures to strengthen its financial position while continuing to provide reliable service to customers and support its long-term commitments to Hawaii and its communities. 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 September 30, 2026, neither HEI nor Hawaiian Electric had any borrowings outstanding under its revolving credit facility or any commercial paper outstanding.
In addition, in May 2024, Hawaiian Electric entered into an asset-based credit facility that allows borrowings of up to $250 million (see Note 5 of the Condensed Consolidated Financial Statements), and in September 2024, HEI registered with the SEC an at-the-market offering program under which HEI may offer and sell, from time to time at its sole discretion, its common stock, without par value, having an aggregate offering price of up to $250 million. To date, Hawaiian Electric has not drawn on its asset-based credit facility and HEI has not sold any common stock under its at-the-market offering program. Other proactive measures included suspending HEI’s quarterly common stock dividend after payment of the second quarter dividend in September 2023, repaying outstanding revolving credit facility borrowings and reducing or eliminating discretionary costs.
As of September 30, 2026, HEI consolidated had $2.3 billion of long-term debt and Hawaiian Electric had accrued estimated wildfire liabilities, at present value, of approximately $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). On April 10, 2026, HEI and Hawaiian Electric paid the first $479 million of four equal annual installments of the wildfire settlement liability using proceeds from HEI’s sale of 62.2 million shares of common stock in September 2024. In addition, on September 16, 2026, HEI made a partial prepayment of $40 million towards the second annual installment due in April 2027. As of September 30, 2026, Hawaiian Electric classified $376 million of the settlement as a current liability and $903 million as a noncurrent liability on HEI’s and the Utilities’ Condensed Consolidated Balance Sheets. On October 28, 2026, HEI made another partial prepayment of $40 million towards the second installment amount due in April 2027.
The following table provides the components of available liquidity as of September 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 September 30, 2026.
As of September 30, 2026 | |||||||||||||||||
| (in millions) | Capacity | Outstanding | Undrawn | ||||||||||||||
Electric utility | |||||||||||||||||
Total credit, excluding standing commitment letter with HEI1 | $ | 550 | $ | — | $ | 550 | |||||||||||
Total available credit - Electric utility | $ | 550 | |||||||||||||||
All other | |||||||||||||||||
| Unsecured revolving line of credit | $ | 300 | $ | — | $ | 300 | |||||||||||
| At-the-market program | 250 | — | 250 | ||||||||||||||
Total available credit and other liquidity - All other | $ | 550 | $ | — | $ | 550 | |||||||||||
| Consolidated cash and cash equivalents | 224 | ||||||||||||||||
Total available liquidity | $ | 1,324 | |||||||||||||||
1 Pursuant to an HEI and Hawaiian Electric Intercompany Borrowing and Investment Policy, Hawaiian Electric may borrow up to $75 million under its standing commitment letter. Hawaiian Electric currently has no borrowings under this commitment. See Note 5 of the Condensed Consolidated Financial Statements for a description of the HEI and Hawaiian Electric Intercompany Borrowing and Investment Policy.
Management believes the Company’s $224 million of cash and cash equivalents as of September 30, 2026, together with the available capacity under Hawaiian Electric’s ABL Facility, HEI’s and Hawaiian Electric’s syndicated credit facilities and
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HEI’s registered at-the-market offering program, provides sufficient liquidity to meet the Company’s financial obligations and sustain operations in the short term. If additional short-term liquidity is needed, Hawaiian Electric may reduce the pace of capital spending related to non-essential projects, manage O&M expenses, seek additional borrowings, and/or explore asset sales.
The Company expects long-term liquidity will continue to be impacted by the remaining wildfire settlement payments; the Company’s below investment grade credit ratings, 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. The 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 unsuccessful, the Company may pursue other strategic alternatives. See further discussion in “Risk Factors” in Item 1A.
Credit ratings. On April 21, 2026 and July 22, 2026, Moody’s and S&P, respectively, upgraded HEI’s credit ratings. On August 11, 2026, S&P withdrew HEI’s short-term and commercial paper ratings at the Company’s request due to lack of access to the commercial paper market. As of October 30, 2026, the Fitch, Moody’s, and S&P ratings of HEI were as follows:
| Fitch | Moody’s | S&P | ||||||||||||||||||
From1 | To | From1 | To | From1 | To | |||||||||||||||
| Long-term issuer default, long-term and issuer credit, respectively | B+ | B+ | Ba3 | Ba2 | B+ | BB- | ||||||||||||||
| Short-term issuer default, commercial paper and commercial paper, respectively | B | B | NP | NP | B | WR | ||||||||||||||
| Outlook | Positive | Positive | Positive | Stable | Watch Positive | Stable | ||||||||||||||
1 As of December 31, 2025. In March 2026, S&P revised HEI’s outlook to “Positive” from “CreditWatch Positive” and affirmed the “B+” issuer credit rating.
NP - Not Prime.
WR - Withdrawn rating.
Note: The above ratings reflect only the view, at the time the ratings are issued or affirmed, of the applicable rating agency, from whom an explanation of the significance of such ratings may be obtained. Such ratings are not recommendations to buy, sell or hold any securities; such ratings may be subject to revision or withdrawal at any time by the rating agencies; and each rating should be evaluated independently of any other rating.
HEI consolidated material cash requirements. Material cash requirements of HEI consolidated include: payments related to settlement of tort-related legal claims and cross claims; Utility-related capital expenditures (including capital expenditures related to wildfires and wildfire mitigations), labor and benefits costs, O&M expenses, fuel and purchase power costs, and debt and interest payments; HEI-related debt and interest payments; and HEI equity contributions to support Mahipapa, Pacific Current’s subsidiary.
The consolidated capital structure of HEI was as follows:
| (dollars in millions) | September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||
Long-term debt, net, including current portion of long-term debt, net | $ | 2,313 | 56 | % | $ | 2,410 | 60 | % | ||||||||||||||||||
| Common stock equity | 1,802 | 44 | 1,606 | 40 | ||||||||||||||||||||||
| $ | 4,115 | 100 | % | $ | 4,016 | 100 | % | |||||||||||||||||||
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 September 30, 2026.
See Note 5 of the Condensed Consolidated Financial Statements for a brief description of the Company’s loans.
There were no new issuances of common stock through the DRIP or the HEIRSP for the nine months ended September 30, 2026 and 2025.
For the first nine months of 2026, net cash used in operating activities of HEI consolidated was $231 million, which included the first installment of the settlement payment. Net cash used in investing activities for the same period was $363 million, primarily due to capital expenditures. Net cash used in financing activities for the same period was $162 million, primarily due to repayment of long-term debt.
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Dividends. The payout ratios for the first nine 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, second and third 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.
MATERIAL ESTIMATES AND CRITICAL ACCOUNTING POLICIES
In preparing financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ significantly from those estimates.
In accordance with SEC Release No. 33-8040, “Cautionary Advice Regarding Disclosure About Critical Accounting Policies,” management has identified the accounting policies it believes to be the most critical to the Company’s financial statements—that is, management believes that these policies are both the most important to the portrayal of the Company’s results of operations and financial condition, and currently require management’s most difficult, subjective or complex judgments.
For information about these material estimates and critical accounting policies, in addition to the critical policy discussed below, see pages 42, 43, 61 and 62 of the MD&A included in Part II, Item 7 of HEI’s and Hawaiian Electric’s 2025 Form 10-K.
Following are discussions of the results of operations, liquidity and capital resources of the electric utility segment.
Electric utility
Recent developments. See also “Recent developments” in HEI’s MD&A and Note 2 of the Condensed Consolidated Financial Statements, which includes disclosures relating to Maui windstorm and wildfires.
For the third quarter of 2026, the Utilities generated net income of approximately $13.5 million compared to $37.0 million for the same quarter of 2025. See “Results of operations” below for variance explanations.
In the third quarter of 2026, kWh sales volume increased 1.0% compared to the same period in 2025. The increase was primarily attributable to less sunny weather, which reduced production from rooftop solar and solar water heaters.
The price of crude oil has increased 39.7% 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 September 2026, the Consumer Price Index (CPI) increased 3.7% over the last 12 months. In Hawaii, the September 2026 Urban Hawaii (Honolulu) CPI increased 5.2% 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.
•The compounded portion of the ARA includes an adjustment for the annual change in inflation based on the estimated change in Gross Domestic Product Price Index (GDPPI) for the upcoming year, less a predetermined annual productivity factor (currently set at zero), less a 0.22% customer dividend, applied to a basis equal to test year target revenues plus the Rate Adjustment Mechanism revenue in effect prior to the implementation of PBR, plus the prior adjustment year’s compounded portion of the ARA. The inflation factor percentage is the consensus projection of annual percentage change in GDPPI for the following calendar year published by Blue Chip Economic Indicators each October. For the 2026 calendar year, the forecasted 2026 GDPPI was 2.58% (net of the 0.22% customer dividend), measured in October 2025, and became effective in rates on January 1, 2026. For the 2027 calendar year, the forecasted 2027 GDPPI was 2.58% (net of the 0.22% customer dividend), measured in October 2026, and is scheduled to become effective in rates on January 1, 2027, subject to the approval by the Public Utilities Commission of the State of Hawaii (PUC).
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•The non-compounded portion of the ARA includes a subtractive component, representing the management audit savings commitment, or refund to customers, which was approved by the PUC to supplement the 0.22% customer dividend discussed above to make up the total customer dividend that will be applied to the ARA formula during the multi-year rate period (MRP).
Recent regulatory and legislative developments.
Storm response and restoration costs. Beginning in the first quarter of 2026, the Utilities’ service territories experienced several severe weather events, including two Kona Low storms and an extraordinary period of tropical cyclone activity in the fall of 2026 involving Hurricanes Lala, Lowell and Nolo, that caused significant damage to the Utilities’ electric infrastructure, widespread electric service interruptions and ongoing emergency response and restoration activities. These events resulted in state emergency declarations. On October 21, 2026, the Utilities filed an application with the PUC requesting approval to defer qualifying incremental O&M costs incurred in connection with response and restoration efforts related to the Kona Low storms and the 2026 hurricane season, including related incident-management and general support costs. The requested deferral periods extend from March 13 through December 31, 2026 for the Kona Low storms and from August 14 through December 31, 2026 for the 2026 hurricane season. The application does not request approval to recover the costs, but is intended to preserve the Utilities’ ability to seek recovery through a separate application through the Z-factor mechanism. For the nine months ended September 30, 2026, the Utilities incurred $23 million of O&M costs related to these severe weather events. The Utilities are finalizing their assessment of the incremental portion of these costs and preliminarily estimate that approximately 75% to 85% of the total costs are incremental. The amount ultimately requested in the Utilities’ deferral application may differ from this preliminary estimate and will be subject to PUC approval.
Act 191 (2025). Act 191 allows the State to “step-in” for the Utilities in the case of utility financial distress, providing payment assurance to project owners and addressing concerns regarding some independent power producers’ ability to procure low-cost financing for new renewable energy and storage projects due to the Utilities’ credit ratings. The Utilities entered into a Master Agency Agreement with the State and Step-In Agreements for certain power purchase agreements, effective on September 1, 2026. Act 191 supports the Utilities’ ability to procure energy and gives IPP’s assurance to bid on projects in order to provide customers and communities with safe, reliable and affordable clean energy.
Act 258 (2025). Act 258 directs the PUC to evaluate the viability of a wildfire recovery fund, establish an aggregate liability cap on economic damages from future wildfires and authorizes securitization to finance wildfire safety and resilience infrastructure improvements. Act 258 is intended to support the Utilities’ financial stability and facilitate investment in wildfire mitigation and infrastructure resilience. On October 9, 2026, the Utilities filed an application with the PUC, requesting a financing order authorizing the issuance of approximately $531 million aggregate principal amount of infrastructure resilience bonds, reflecting up to approximately $500 million of infrastructure resilience costs, including carrying costs, and approximately $31 million of estimated upfront financing costs. The proposed costs include wildfire mitigation, grid modernization and related eligible operation and maintenance costs, certain of which remain subject to approval in separate PUC proceedings. The application proposes that the bonds would be issued by a bankruptcy-remote special-purpose entity and repaid through an irrevocable, nonbypassable Infrastructure Resilience Charge collected from customers over a period of up to 30 years. The proposed financing is subject to PUC approval, and the amount, timing, interest rates, customer charges, tax treatment, and other terms may differ from the amounts and assumptions included in the application.
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, following a September 2025 PUC order providing 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, with 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. Pursuant to those reporting requirements, HEI filed a report establishing a divestment timeline for remaining affiliate assets and is providing monthly progress reports 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. For the three months
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ended September 30, 2026, HEI’s integration costs incremental to Hawaiian Electric amounted to approximately $5.6 million (pretax).
System reliability. Since the August 2023 Maui windstorm and wildfires, the Utilities have implemented wildfire safety measures in areas identified as having higher wildfire risk across their service territories (Oahu, Maui County, and Hawaii Island). These measures include more sensitive protective settings that can interrupt service more quickly when potential faults are detected, blocking automatic reclosing in certain circumstances, and conducting visual patrols before restoring service. While these measures are intended to reduce wildfire ignition risk, they have increased, and may continue to increase, the frequency and duration of certain transmission and distribution outages and adversely affect Transmission and Distribution (T&D) System Average Interruption Duration Index (SAIDI) and System Average Interruption Frequency Index (SAIFI).
On January 10, 2025, the Utilities filed their 2025-2027 Wildfire Mitigation Plan (WMP), formerly referred to as the Wildfire Safety Strategy) with the PUC. The PUC approved the WMP on December 31, 2025 and directed the Utilities to submit a 2026-2027 WMP Update, which the Utilities filed on April 13, 2026. The WMP Update primarily reflects 1) maturation of the wildfire mitigation framework following the 2025-2027 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. The Utilities continue to refine these measures and deploy reliability mitigations while prioritizing the safety of customers and communities during elevated wildfire conditions. Public Safety Power Shutoff events, if initiated, could also result in extended service interruptions. For additional information regarding the Public Safety Power Shutoff program, see “Wildfire safety measures” below.
Hawaii Island has two generators out of service for extended maintenance, one of which is expected to return to service in the fourth 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.
For a discussion regarding the impact of the Maui windstorm and wildfires on the Utilities’ liquidity and capital resources, see discussion below under “Financial Condition–Liquidity and capital resources.”
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RESULTS OF OPERATIONS
| Three months ended September 30 | Increase | |||||||||||||||||||||||||
| 2026 | 2025 | (decrease) | (dollars in millions, except per barrel amounts) | |||||||||||||||||||||||
| $ | 1,007 | $ | 787 | $ | 220 | Revenues. Net increase largely due to: | ||||||||||||||||||||
| $ | 173 | higher fuel oil prices and higher kWh generated1 | ||||||||||||||||||||||||
| 38 | higher purchased power energy cost and higher PPAC revenues, partially offset by lower kWh purchased1, 2 | |||||||||||||||||||||||||
| 8 | higher revenue from ARA | |||||||||||||||||||||||||
| 2 | higher Performance Incentive Mechanisms revenue | |||||||||||||||||||||||||
| 1 | higher MPIR/EPRM revenue | |||||||||||||||||||||||||
| (2) | lower fuel cost risk-sharing adjustment | |||||||||||||||||||||||||
| 399 | 241 | 158 | Fuel oil expense1. Net increase largely due to higher fuel oil prices, higher kWh generated, and worse fuel efficiency | |||||||||||||||||||||||
| 218 | 184 | 34 | Purchased power expense1, 2. Net increase largely due to higher purchased power energy cost, and the settlement of liquidated damages with IPPs in 2025, offset in part by lower kWh purchased | |||||||||||||||||||||||
| 182 | 162 | 20 | Operation and maintenance expenses. Net increase largely due to: | |||||||||||||||||||||||
| 16 | storm restoration and repairs and response cost | |||||||||||||||||||||||||
| 6 | HEI integration costs | |||||||||||||||||||||||||
| 5 | higher property and general liability insurance costs | |||||||||||||||||||||||||
| 4 | higher employee benefits and incentive program costs | |||||||||||||||||||||||||
| 2 | higher general claims | |||||||||||||||||||||||||
| (2) | lower IT system maintenance costs | |||||||||||||||||||||||||
| (3) | lower wildfire mitigation program costs expensed3 | |||||||||||||||||||||||||
| (3) | fewer generating facility overhauls performed | |||||||||||||||||||||||||
| (4) | write-off of preliminary engineering costs in 2025 | |||||||||||||||||||||||||
| 160 | 138 | 22 | Other expenses. Increase due to higher revenue taxes and higher depreciation expense due to increasing investments to integrate more renewable energy and improve customer reliability and system efficiency | |||||||||||||||||||||||
| 48 | 63 | (15) | Operating income. Decrease largely due to higher operation and maintenance expenses, lower fuel cost risk-sharing adjustment, and higher depreciation, offset in part by higher revenue from ARA | |||||||||||||||||||||||
| 14 | 48 | (34) | Income before income taxes. Decrease largely due to lower operating income and higher interest expense, primarily due to the accretion related to the remaining wildfire tort-related settlement liability (see Note 2 of the Condensed Consolidated Financial Statements) and interest on the 2025 Notes started in September 2025, offset in part by higher AFUDC related to increased capital expenditures | |||||||||||||||||||||||
| 13 | 37 | (24) | Net income for common stock. Decrease due to lower income before income taxes. See below for effective tax rate explanation | |||||||||||||||||||||||
| 2,257 | 2,234 | 23 | Kilowatthour sales (millions)4 | |||||||||||||||||||||||
| $ | 154.87 | $ | 98.20 | $ | 56.67 | Average fuel oil cost per barrel | ||||||||||||||||||||
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| Nine months ended September 30 | Increase | |||||||||||||||||||||||||
| 2026 | 2025 | (decrease) | (dollars in millions, except per barrel amounts) | |||||||||||||||||||||||
| $ | 2,688 | $ | 2,268 | $ | 420 | Revenues. Net increase largely due to: | ||||||||||||||||||||
| $ | 306 | higher fuel oil prices and higher kWh generated1 | ||||||||||||||||||||||||
| 89 | higher purchased power energy cost and higher PPAC revenues, partially offset by lower kWh purchased1, 2 | |||||||||||||||||||||||||
| 23 | higher revenue from ARA | |||||||||||||||||||||||||
| 3 | higher Performance Incentive Mechanisms revenue | |||||||||||||||||||||||||
| 3 | higher MPIR/EPRM revenue | |||||||||||||||||||||||||
| (4) | lower fuel cost risk-sharing adjustment | |||||||||||||||||||||||||
| 972 | 690 | 282 | Fuel oil expense1. Net increase due to higher fuel oil prices, higher kWh generated, and worse fuel efficiency | |||||||||||||||||||||||
| 587 | 505 | 82 | Purchased power expense1, 2. Net increase largely due to higher purchased power energy cost, the addition of Stage 1 renewable projects, and the settlement of liquidated damages with IPPs in 2025, offset in part by lower kWh purchased | |||||||||||||||||||||||
| 511 | 463 | 48 | Operation and maintenance expenses. Net increase largely due to: | |||||||||||||||||||||||
| 23 | storm restoration and repairs and response cost | |||||||||||||||||||||||||
| 19 | higher generation and transmission and distribution operation and maintenance | |||||||||||||||||||||||||
| 12 | higher property and general liability insurance costs | |||||||||||||||||||||||||
| 8 | higher employee benefits and incentive program costs | |||||||||||||||||||||||||
| 6 | HEI integration costs | |||||||||||||||||||||||||
| 3 | higher general claims | |||||||||||||||||||||||||
| (4) | write-off of preliminary engineering costs in 2025 | |||||||||||||||||||||||||
| (19) | lower wildfire mitigation program costs expensed3 | |||||||||||||||||||||||||
| (162) | — | (162) | Wildfire tort-related claims. Decrease due to the remeasurement of the remaining wildfire tort-related settlement liability at present value and insurance recoveries (see Note 2 of the Condensed Consolidated Financial Statements) | |||||||||||||||||||||||
| 451 | 407 | 44 | Other expenses. Increase due to higher revenue taxes and higher depreciation expense due to increasing investments to integrate more renewable energy and improve customer reliability and system efficiency | |||||||||||||||||||||||
| 329 | 203 | 126 | Operating income. Increase largely due to the remeasurement of the wildfire tort-related claims, higher revenues from ARA, performance incentive mechanisms, and MPIR/EPRM, offset in part by higher operation and maintenance expenses, higher depreciation, and lower fuel cost risk-sharing adjustment | |||||||||||||||||||||||
| 242 | 160 | 82 | Income before income taxes. Increase largely due to higher operating income, higher AFUDC related to increased capital expenditures, and higher interest income earned, partially offset by higher interest expense, primarily due to the accretion related to the remeasurement of the remaining wildfire tort-related settlement liability at present value (see Note 2 of the Condensed Consolidated Financial Statements) and interest on the 2025 Notes started in September 2025 | |||||||||||||||||||||||
| 187 | 124 | 63 | Net income for common stock. Increase due to higher income before income taxes. See below for effective tax rate explanation | |||||||||||||||||||||||
| 6,244 | 6,231 | 13 | Kilowatt-hour sales (millions)4 | |||||||||||||||||||||||
| $ | 132.00 | $ | 101.00 | $ | 31.00 | Average fuel oil cost per barrel | ||||||||||||||||||||
| 476,286 | 474,038 | 2,248 | Customer accounts (end of period) | |||||||||||||||||||||||
1The rate schedules of the Utilities currently contain Energy Cost Recovery Clauses (ECRCs) through which changes in fuel oil prices and certain components of purchased energy costs are passed on to customers.
2The rate schedules of the Utilities currently contain Purchased Power Adjustment Clauses (PPACs) through which changes in purchased power expenses (except purchased energy costs) are passed on to customers.
3 Starting in the fourth quarter of 2025, certain Wildfire Mitigation Plan costs were deferred and continued to be deferred in 2026.
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4 kWh sales were higher compared to the same quarter in prior year. The increase was primarily attributable to less sunny weather, which reduced production from rooftop solar and solar water heaters.
The Utilities’ effective tax rates for the first nine months of 2026 and 2025 were 23% and 22%, respectively. For the third quarters of 2026 and 2025, the Utilities’ effective tax rates were 3% and 23%, respectively. The higher effective tax rate for the first nine months of 2026, compared to the same period in 2025, was primarily due to discrete tax expense from higher pretax income related to the remeasurement of the wildfire tort-related settlement liability to present value (net of accretion); partially offset by the research and development tax credit claims recognized. The lower effective tax rate for the third quarter of 2026, compared to the same period in 2025, was primarily due to discrete tax benefits recognized in the third quarter of 2026 from the lower pretax income related to the accretion of wildfire tort-related settlement liability, and the research and development tax credit claims recognized.
Hawaiian Electric’s consolidated return on average common equity (ROACE) was 13.4% and 12.8% for the twelve months ended September 30, 2026 and 2025, respectively.
For more information of the Utilities’ incremental items related to the Maui windstorm and wildfires for the three and nine months ended September 30, 2026 and 2025, see “Results of operations—Maui windstorm and wildfires related items, net” in HEI’s MD&A.
See “Economic conditions” in the “HEI consolidated” section above.
Executive overview and strategy. The Utilities provide electricity on all the principal islands in the State of Hawaii, other than Kauai, to approximately 95% of the State’s population, and operate five separate grids. The Utilities’ mission is to empower their communities and customers with safe, reliable, resilient, affordable, and clean energy. The goal is to create a safe, modern, resilient, flexible, and dynamic electric grid that protects Hawaii from impacts of climate dynamics, position the Utilities to achieve the expectations of their customers and communities and earn their trust, and achieve Hawaii’s decarbonization goals that are aligned with the statutory goal of 100% renewable portfolio standard and net-negative carbon emissions by 2045.
Wildfire safety measures. In January 2025, the Utilities developed and filed with the PUC their 2025-2027 WMP, 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 2025-2027 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 December 31, 2025, the PUC approved the Utilities’ 2025-2027 WMP and directed the Utilities to submit 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.
The PSPS program calls for the Utilities to preventatively de-energize circuits in areas identified as high fire risk during certain weather conditions. The PSPS program launched on July 1, 2024 has been used when it is needed, to protect customers, communities and employees. Since the July 2024 implementation, the Utilities have continued to mature the PSPS program as it has gained experience executing the program along with public safety partners, communities, and residents. For example, the Utilities now have an in-house meteorologist and a 24/7 watch office that monitor hazardous conditions through additional strategically placed weather stations to enhance their forecasting capability and an artificial intelligence wildfire detection camera for situational awareness of localized hazardous conditions. The PSPS protocols will evolve over time as more analytical, forecast, and situational awareness capabilities and wildfire mitigations are deployed. De-energizing circuits in high wildfire risk areas will lead to extended interruptions for many customers, even if not in a high wildfire risk area. The Utilities will continue to work with key stakeholders in balancing the risk of utility-related wildfires with the risk to the public arising from not having electricity.
Transition to a decarbonized and sustainable energy future. The Utilities are fully committed to leading and enabling pathways to a decarbonized and sustainable energy future for Hawaii. A sustainable energy future is one that focuses on delivering electricity safely, reliably and affordably, strengthening resilience and shifting away from fossil-fueled resources. The Utilities believe that a holistic approach to evolving climate dynamics is needed, working on both climate mitigation efforts along with climate adaptation efforts. Climate mitigation requires achieving the Utilities’ decarbonization and renewable energy commitments, facilitating and promoting beneficial electrification, and deploying carbon removal and offsets among other levers to reduce statewide emissions.
Climate action plan. In the fourth quarter of 2021, the Utilities outlined their Climate Action Plan to cut carbon emissions from power generation 70% by 2030, compared to a 2005 baseline. The emissions covered by this goal include stack emissions from generation owned by Hawaiian Electric and independent power producers (IPPs) who sell electricity to the Utilities. Since
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that 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 have slowed the pace of progress toward reducing greenhouse gas emissions. Also, see the “Developments in renewable energy efforts—New renewable PPAs” section below. The One Big Beautiful Act signed into law 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, 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 RPS goals and expect to meet or exceed the State of Hawaii’s 2030 RPS goals. The Utilities estimate that 2025 carbon emissions were approximately 25% below the 2005 baseline, compared with approximately 27% below the baseline in 2024, reflecting an increase in emissions year over year due to higher customer electricity usage. This represented an increase in emissions compared to the 27% reduction in 2024 due to higher customer electric usage. As renewable energy replaces fossil fuel generation, carbon emissions are expected to continue to decline over time.
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.
State of Hawaii laws and policies. In January 2025, the State of Hawaii issued two key policy documents and an alternative fuel study. The PUC issued its 2024 Inclinations on the Future of Energy in Hawaii (2024 PUC Inclinations). The 2024 PUC Inclinations are intended to provide a guide for the completion of energy infrastructure upgrades for public safety, reliability and resiliency. This includes among other items, strategic hardening, diversification and enhancements of transmission and distribution systems, expedited replacement of older fossil fired generation, streamlined interconnection for renewable utility scale and distributed energy resources, including a specific goal to limit fossil fuel generation to no more than 40% on each island by 2030, software and hardware improvement to prevent cybersecurity threats, creation of resilience hubs, and integration of electric, gas, and renewable resources to support continuity of energy, telecommunications, water and wastewater services. The 2024 PUC Inclinations specifically state that “Strategic ownership of new generation (by the Utilities) may be beneficial, especially when such ownership stabilizes utility finances, benefits from low-interest federal loans or advances other objectives such as operational accountability, resilience and public safety.”
Governor Josh Green issued Executive Order No. 25-01, Accelerating Hawaii’s Transition Toward 100 Percent Renewable Energy (EO 25-01). EO 25-01 sets forth collective actions to accelerate the State’s decarbonization, stabilize and reduce energy costs, lower the State’s carbon footprint, strengthen energy security, and gain access to capital for the energy transition. Among other actions, EO 25-01 calls for 100% renewable electricity production in the counties of Hawaii and Maui by 2035 and achieving a 70% reduction of Oahu’s greenhouse gas emissions reductions from the electricity sector by 2035, using 2005 as a baseline, calls for the maximization of distributed solar energy paired with energy storage, including the installation of 50,000 new distributed energy resources by 2030, accelerating permitting tied to renewable energy, approving interconnection, and addressing energy burdens on low- and moderate-income residents.
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 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, 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 Americas filed a notice of intent with the PUC to file 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
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utility-scale generation facilities on Oahu totaling 500 MW. In the notice, JERA Americas stated that it intends to file the CPCN application in the first quarter of 2027. JERA Americas’ notice indicated that its proposal is not intended to replace Hawaiian Electric’s role as the retail utility or system operator, or to displace Hawaiian Electric’s continued ownership and operation of existing generation resources, but is intended to provide regulated wholesale generation service within the existing integrated electric system. Hawaiian 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 proceeding 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 required, and without demonstrating need, it is not reasonable and in the public interest to open a docket or otherwise expedite review 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 are engaged in planning activities designed to support the State’s energy policy objectives, including the transition to a more affordable, reliable, and sustainable energy system. These planning efforts evaluate a range of resource, fuel, and technology options and are informed by state energy policy guidance and stakeholder input. Importantly, the 2024 PUC Inclinations, EO 25-01, and Alternative Fuel Study all recognize that to achieve the State’s ambitious goals is a collective effort that will require government agencies, electric utilities, and private stakeholders to work together, acknowledging that each of these groups has an important role to play. The 2024 PUC Inclinations for example state: “Energy utilities, government agencies and private stakeholders must embrace an ethos of collective responsibility to confront and effectively mitigate the vulnerabilities revealed by Lahaina’s heartbreaking tragedy, the COVID pandemic, ongoing global unrest, cybersecurity threats and the overarching climate crisis.” The PUC later states: “The Commission does not expect energy utilities to accelerate their transformation without regulatory assistance and third-party resources.” All three documents also recognize the progress made to date towards the State’s renewable energy goals. The Utilities remain committed to working with all stakeholders to support the State’s energy policy objectives and reach Hawaii’s ambitious renewable energy goals.
Hawaii’s renewable portfolio standard law requires electric utilities to meet an RPS of 30%, 40%, 70% and 100% by December 31, 2020, 2030, 2040 and 2045, respectively. Hawaii law has also established a target of sequestering more atmospheric carbon and greenhouse gases than emitted within the State by 2045. The Utilities’ strategies and plans are fully aligned in meeting these targets (see also “Integrated Grid Planning” below).
The Utilities have made significant progress on the path to clean energy and have been successful in achieving RPS goals. To date, 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.
If the Utilities are not successful in meeting the RPS targets as mandated by law, the PUC could assess a penalty of $20 for every megawatt-hour (MWh) that an electric utility is deficient. Based on the level of total generation in 2025, a 1% shortfall in meeting the 2030 RPS requirement of 40% would translate into a penalty of approximately $2.1 million. The PUC has the discretion to reduce the penalty 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. In addition to penalties under the RPS law, failure to meet the mandated RPS targets would be expected to result in a higher proportion of fossil fuel-based generation than if the RPS target had been achieved, which in turn would be expected to subject the Utilities to limited commodity fossil fuel price exposure under a fuel cost risk-sharing mechanism. The fuel cost risk-sharing mechanism apportions 2% of the fuel cost risk to the Utilities (and 98% to ratepayers) and has a maximum exposure (or benefit) of $3.7 million. Conversely, the Utilities have incentives under PIMs that provide a financial reward for accelerating the achievement of renewable generation as a percentage of total generation, including customer supplied generation. In 2025, the Utilities achieved a 36.8% RPS accruing a reward of $1.9 million based on $10/MWh in exceedance of 35.0% RPS. In 2026, the Utilities are eligible for a reward of $10/MWh in exceedance of 36.0% RPS.
The Utilities are fully aligned with, and supportive of, state policy to achieve a decarbonized future and have made significant progress in reducing emissions through renewable energy and electrification. This alignment with state policy is reflected in management compensation programs and the Utilities’ long-range plans, which include aspirational targets in order to catalyze action and accelerate the transition away from fossil fuels throughout their operations at a pace more rapid than
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dictated by current law. The long-range plans, including aspirational targets, serve as guiding principles in the Utilities’ continued transformation, and are updated regularly to adapt to changing technology, costs, and other factors. While there is no financial penalty for failure to achieve the Utilities’ long-range aspirational objectives, the Utilities recognize that there are environmental and social costs from the continued use of fossil fuels.
The State of Hawaii’s policy is supported by the regulatory framework and includes a number of mechanisms designed to maintain the Utilities’ financial stability during the transition toward the State’s decarbonized future. Under the sales decoupling mechanism, the Utilities are allowed to recover from customers, target test year revenues, independent of the level of kWh sales, which have generally trended lower over time as privately-owned distributed energy resources have been added to the grid and energy efficiency measures have been put into place. Other regulatory mechanisms under the PBR Framework reduce some of the regulatory lag during the multi-year rate plan, such as the annual revenue adjustment to provide annual changes in utility revenues, including inflationary adjustments, and the EPRM, which allows the Utilities to recover and earn on certain approved eligible projects placed into service. See “Regulatory proceedings” in Note 4 of the Condensed Consolidated Financial Statements.
Integrated grid planning. Achieving high levels of renewable energy and a carbon free electric system will require modernizing the grid through coordinated energy system planning in partnership with local communities and stakeholders. To accomplish this, the Utilities are implementing an innovative systems approach to energy planning intended to yield the most cost-effective renewable energy and decarbonization pathways that incorporates customer and stakeholder input.
The 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.
Demand response programs. Pursuant to PUC orders, the Utilities are developing an integrated Demand Response Portfolio Plan that will enhance system operations and reduce costs to customers. The reduction in cost for the customer will take the form of either rates or incentive-based programs that will compensate customers for their participation individually, or by way of engagements with turnkey service providers that contract with the Utilities to aggregate and deliver various grid services on behalf of participating customers and their distributed assets.
In 2022, the Utilities were approved to expand the Energy Demand Response Program (EDRP) on the islands 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.
Grid modernization. The overall goal of the Grid Modernization Strategy (GMS) is to deploy modern grid investments at an appropriate priority, sequence and pace to cost-effectively maximize flexibility, minimize the risk of redundancy and obsolescence, deliver customer benefits and enable greater resiliency, reliability, distributed energy resources and renewable energy integration.
After the Utilities were unsuccessful in securing federal funding for the project under the Infrastructure Investment and Jobs Act in 2024, the Utilities filed an amended PUC application for the second phase of Grid Modernization on September 21, 2026. The amended application proposes the establishment of a Distribution Operations Platform and other project components in place of an Advanced Distribution Management System and reduces the estimated total project costs from $215.2 million to $121.6 million, subject to PUC approval.
Investigation on the establishment of wheeling. On July 1, 2024, the PUC issued an order to institute a proceeding to investigate the establishment of electricity wheeling policies and procedures for the electric utilities for the State of Hawaii. The PUC stated that it intended to address matters using lessons learned in the initial three docket phases to explore implementation of an intragovernmental wheeling policy and an evaluation of retail wheeling in subsequent phases, as appropriate.
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On August 29, 2025, the PUC issued an order dividing the proceeding into two tracks, Track A, focused on retail wheeling, and Track B, focused on an intragovernmental credit share program that was the subject of the prior procedural schedule in the docket.
On October 22, 2025, the Utilities filed feedback on the PUC’s proposed Track B, Intragovernmental Shared Credit Program. The Utilities support the program but emphasize that careful program design is necessary to ensure technical feasibility, administrative efficiency, and fairness for all customers. The Utilities agree that the program could support the development of renewable energy zones by unlocking government lands for renewable projects and enabling proactive transmission planning.
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.
On July 29, 2026, the PUC issued an order providing guidance on the proposed Track A retail wheeling program and addressing procedural matters. The order established an Oahu-only Retail Wheeling Pilot Program framework intended to satisfy Act 266 by January 1, 2027, and directed the Utilities to file an updated Track A proposal, draft tariff, and proposed pilot framework by August 19, 2026. The updated proposal must address, among other things, cost allocation, customer protections, technical standards, reporting requirements, and considerations for future program enhancements and expansion. The PUC directed the Utilities to include an Oahu-only pilot proposal, with a recommended two- to five-year duration, a plan for data collection and reporting on billing impacts, lost utility revenues and developer profits, opportunities for stakeholder feedback, annual performance monitoring, and recommendations for future expansion. In addition, the order provided staff guidance that the updated proposal should address refinements to the application and interconnection processes, a draft wheeling agreement and consumer protection disclosures, necessary revisions to Rule 14H and interconnection requirements, wheeling fee and administrative metering fee methodologies, curtailment clarification, and sample bill credit and wheeling fee calculations. The PUC further adopted a statement of issues for Track A focused on whether the updated proposal and draft tariff comply with Act 266, and whether the proposed application process, technical standards, pricing mechanism, proposed allocation of wheeling costs, and proposed pilot framework are reasonable and in the public interest. The order also adopted a supplemental Track A procedural schedule to govern the remainder of Track A unless otherwise ordered by the PUC.
On September 2, 2026, the Utilities filed their updated proposal for Track A retail wheeling. The updated proposal establishes a 10 MW retail wheeling pilot on Oahu, supported by corresponding utility-scale storage intended to maintain grid reliability and minimize impacts to non-participating customers. The Consumer Advocate and other parties to the proceeding filed statements of position on the updated proposal, and the Utilities filed their reply statement of position on October 30, 2026. The Utilities stated that the updated proposal is intended to implement Act 266 through a measured pilot designed to facilitate additional renewable energy development while addressing grid reliability and potential cost impacts to non-participating customers. The Utilities also identified minimum requirements that would apply if wheeling generators were permitted to operate prior to implementation of the utility-scale storage resource and stated that such operation could result in cost shifting and operational risks. In their reply statement of position, the Utilities continued to support approval of the proposed storage and cost recovery framework.
The PUC issued an order on September 3, 2026 proposing an updated intragovernmental shared credit program, referred to as the Public Power Program, and established a procedural schedule for Track B of the proceeding. The order directed parties to the proceeding to respond to the PUC’s proposal within 45 days. Parties filed responses on October 19, 2026. On October 22, 2026, the PUC extended the response deadline to October 26, 2026, for all parties that had not yet responded. Parties that had not yet responded to the PUC’s proposal filed their responses on October 26, 2026.
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. On July 17, 2026, the Utilities filed their application for approval of their re-basing proposal. See “Regulatory proceedings” in Note 4 of the Condensed Consolidated Financial Statements for a discussion of re-basing, PBR Framework and decoupling.
Regulated returns. As part of the PBR Framework’s annual review cycle, the Utilities track their rate-making ROACEs as calculated under the earnings sharing mechanism, which includes only items considered in establishing rates. At year-end, each utility’s rate-making ROACE is compared against its ROACE allowed by the PUC to determine whether earnings sharing has been triggered. The D&O in the PBR proceeding modified the earnings sharing mechanism to a symmetric arrangement.
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Effective with annual earnings for 2021, the earnings sharing will be triggered for achieved rate-making ROACE outside of a 300 basis points dead band above and below the current authorized rate-making ROACE of 9.5% for each of the Utilities (i.e., above 12.5% or below 6.5%). Earnings sharing credits or recoveries will be included in the biannual report (formally known as annual decoupling filing) to be filed with the PUC in the spring of the following year.
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 September 30, 2026.
Actual and PUC-allowed returns, as of September 30, 2026, were as follows:
| Ratio (%) | Rate-making Return on rate base (RORB)1 | Book ROACE2 | Rate-making ROACE3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Twelve months ended September 30, 2026 | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Hawaiian Electric | Hawaii Electric Light | Maui Electric | Hawaiian Electric | Hawaii Electric Light | Maui Electric | |||||||||||||||||||||||||||||||||||||||||||||||
| Utility returns | 8.21 | 5.40 | 4.41 | 19.68 | 8.58 | 5.31 | 10.98 | 5.83 | 3.56 | |||||||||||||||||||||||||||||||||||||||||||||||
| PUC-allowed returns | 7.37 | 7.52 | 7.43 | 9.50 | 9.50 | 9.50 | 9.50 | 9.50 | 9.50 | |||||||||||||||||||||||||||||||||||||||||||||||
| Difference | 0.84 | (2.12) | (3.02) | 10.18 | (0.92) | (4.19) | 1.48 | (3.67) | (5.94) | |||||||||||||||||||||||||||||||||||||||||||||||
1 Based on recorded operating income and average rate base, both adjusted for items not included in determining electric rates.
2 Based on recorded net income divided by average common equity.
3 Based on recorded net income adjusted to remove items not included in determining electric rates, divided by rate making equity.
Rate-making calculations remove the impacts of the Settlement Agreements and eliminate the balances for the asset-based lending facility (ABL Facility) on a stand-alone company basis. The Utilities have stated that customers will not be impacted by payments related to the Settlement Agreements for the Maui windstorm and wildfires, which totals $1.9 billion (see Note 2 of the Condensed Consolidated Financial Statements). The ABL Facility contains certain intercompany costs related to the ABL Facility that are eliminated on a consolidated basis, and these transactions are eliminated on a stand-alone company basis for rate-making. Therefore, the rate-making returns were adjusted to exclude these impacts.
The gap between PUC-allowed ROACEs and the ROACEs achieved is generally due to the exclusion of certain expenses from rates (for example, incentive compensation and charitable contributions), and depreciation, other O&M expense and return on rate base that are in excess of what is currently being recovered through rates (the last rate case plus authorized Rate Adjustment Mechanism revenue and ARA revenues). Maui Electric's returns are lower than authorized levels due to higher sustained maintenance and investments than what is recovered in current rates.
Developments in renewable energy efforts. The Utilities continue to procure renewable energy ambitiously. The Utilities’ renewable energy goals depend, in large part, on the success of renewable projects developed and operated by independent power producers. Significant project delays or failures of these projects increase the risk of the Utilities not meeting the renewable portfolio standards or other climate related goals, eligibility for Performance Incentive Mechanisms associated with the speed of increasing renewable generation, and the ability to retire fossil fuel units. Developments in the Utilities’ efforts to further their renewable energy strategy include renewable energy projects discussed in Note 4 of the Condensed Consolidated Financial Statements and the following:
New renewable PPAs.
•Under a request for proposal process governed by the PUC and monitored by independent observers, the Utilities issued Stage 2 Renewable Request for Proposals (RFPs) for Oahu, Maui and Hawaii Island and Grid Services RFP on August 22, 2019. Of the 11 PPAs filed by the Utilities, six PPAs were declared null and void by the independent power producers and one PPA was mutually terminated. The four remaining projects have received PUC approval. The Utilities filed three requests with the PUC for approval of amendments related to previously-approved PPAs for changes in pricing and/or guaranteed commercial operations dates to support completion of the projects while maintaining system reliability. The PUC approved of all three amendments. To date, two Stage 2 projects have reached commercial operations. See also “Purchase commitments” in Note 4 of the Condensed Consolidated Financial Statements. Separately, the PUC approved the Utilities’ Waena Battery Energy Storage System project under Stage 2. See “Utility projects” in Note 4 of the Condensed Consolidated Financial Statements.
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A summary of the remaining four approved Stage 2 PPAs and the self-build project is as follows:
| Utilities | Number of contracts | Total photovoltaic size (MW) | BESS Size (MW/MWh) | Guaranteed commercial operation dates | Contract term (years) | Total projected annual lump sum payment (in millions) | ||||||||||||||||||||||||||||||||||||||
| PPAs | ||||||||||||||||||||||||||||||||||||||||||||
| Hawaiian Electric | 3 | 79 | 79 | / | 443 | 5/17/241, 6/7/24 & 9/1/241 | 20 & 25 | $ | 31.4 | |||||||||||||||||||||||||||||||||||
| Hawaiian Electric | 1 | N/A | 185 | / | 565 | 12/19/23 | 20 | 24 | ||||||||||||||||||||||||||||||||||||
| Self-build | ||||||||||||||||||||||||||||||||||||||||||||
| Maui Electric | 1 | 40 | / | 160 | 11/30/26 | — | ||||||||||||||||||||||||||||||||||||||
| Total | 5 | 79 | 304 | / | 1,168 | $ | 55.4 | |||||||||||||||||||||||||||||||||||||
1 Project delays have resulted in guaranteed commercial operations date being missed.
The total projected annual payment of $55.4 million for these PPAs will be recovered through the PPAC to the extent such costs are not included in base rates.
Tariffed renewable resources.
•As of September 30, 2026, there were approximately 755 MW, 162 MW, and 167 MW of installed distributed renewable solar energy technologies at Hawaiian Electric, Hawaii Electric Light and Maui Electric, respectively, for tariff-based private customer generation programs, namely Standard Interconnection Agreement, Net Energy Metering, Net Energy Metering Plus, Customer Grid Supply, Customer Self Supply, Customer Grid Supply Plus, Interim Smart Export, Smart Distributed Energy Resources — Export, Smart Distributed Energy Resources — Non-Export, and Community-Based Renewable Energy. As of September 30, 2026, an estimated 45% of single-family homes on the islands of Oahu, Hawaii and Maui have installed private rooftop solar systems, and approximately 25% of the Utilities’ total customers have solar systems.
•The Utilities’ feed-in tariff program is designed to encourage the addition of more renewable energy projects in Hawaii. As of September 30, 2026, there were 44 MW, 2 MW and 6 MW of installed feed-in tariff capacity from renewable energy technologies at Hawaiian Electric, Hawaii Electric Light and Maui Electric, respectively.
Biofuel sources.
•On August 23, 2024, the Utilities issued an RFP for biodiesel fuel supply commencing February 1, 2026. Proposals were due on September 30, 2024, and the Utilities have completed negotiations with two suppliers and submitted an application to the PUC on April 3, 2025. On June 2, 2025, the Utilities and Pacific Biodiesel Technologies, LLC (PBT) signed an agreement for supply of biodiesel commencing February 1, 2026, which was approved by the PUC on January 14, 2026. On May 18, 2026, the Utilities and Par Hawaii Refining, LLC (PAR Hawaii) signed an agreement for supply of renewable diesel, which will become effective upon PUC approval.
•Hawaiian Electric also has a spot buy contract with PBT to purchase additional quantities of biodiesel at or below the price of diesel. Some purchases of “at parity” biodiesel have been made under the spot purchase contract, which was extended through June 2027.
•Hawaiian Electric has a contingency supply contract with REG Marketing & Logistics Group, LLC to also supply biodiesel to any generating unit on Oahu in the event PBT is not able to supply necessary quantities. This contingency contract has been extended to November 2027 and will continue with no volume purchase requirements.
Requests for renewable proposals, expressions of interest, and information.
•The Hawaii Island Stage 3 RFP, seeking 65 MW of renewable firm capacity and 325 gigawatt-hours (GWh) of renewable dispatchable energy annually, was issued on November 21, 2022. Proposals were received on April 20, 2023. The Stage 3 RFPs for Oahu and Maui opened for bids on January 20, 2023. For Oahu, the Utilities sought 500 to 700 MW of renewable firm capacity, and at least 965 GWh of renewable dispatchable energy annually. For Maui, the Utilities sought at least 40 MW of renewable firm capacity, and at least 425 GWh of renewable dispatchable energy annually. As of September 30, 2026, the Utilities have 12 active Stage 3 projects, including one self-build project. The Utilities obtained PUC approval for three solar-plus BESS projects with a combined capacity of 166 MW as of September 30, 2026. Additionally, in the third quarter of 2026, the Utilities executed a renewable firm capacity contract with Kalaeloa Partners L.P. for 208 MW of capacity on Oahu, which is the largest PPA under the Stage 3 RFP. The Utilities continue to advance the remaining selected projects through negotiations and execution and the PUC approval process.
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On March 28, 2025, the Utilities filed an application to the PUC for their self-build project - Waiau repower project. See “Utility projects” in Note 4 of the Condensed Consolidated Financial Statements.
A summary of the Stage 3 PPAs and self-build project is as follows:
| Utilities | Number of contracts | Total renewable energy size (MW) | BESS Size (MW/MWh) | Firm Generation (MW) | |||||||||||||||||||||||||
| PPAs | |||||||||||||||||||||||||||||
| Hawaiian Electric | 4 | 126 | 510 | 307 | |||||||||||||||||||||||||
| Hawaii Electric Light | 3 | 86 | 374 | 60 | |||||||||||||||||||||||||
| Maui Electric | 4 | 90 | 240 | 40 | |||||||||||||||||||||||||
| Self-build project | |||||||||||||||||||||||||||||
| Hawaiian Electric | 1 | — | — | 253 | |||||||||||||||||||||||||
| Total | 12 | 302 | 1,124 | 660 | |||||||||||||||||||||||||
•On August 19, 2024, the PUC opened a docket for the Utilities’ Integrated Grid Planning RFP (IGP RFP). On August 26, 2024, the Utilities filed their draft IGP RFP for Oahu and Hawaii Island. The Oahu portion of the IGP RFP seeks 750 GWh per year of energy and 350 MW of grid forming resources by November 1, 2030, and 81 MW of renewable firm capacity by December 2033. The Hawaii Island portion of the IGP RFP seeks 435 GWh per year of energy and 115 MW of grid forming resources by November 1, 2030, and 30 MW of renewable firm capacity by December 2032. On August 18, 2025, the Utilities filed a request with the PUC for approval to not offer utility-owned sites to other potential bidders. On September 9, 2025, the Consumer Advocate filed a response indicating it did not object to the Utilities’ request and a party to the docket filed a response requesting that the PUC consider the broader market impacts that limiting available sites would have on the available interconnection capacity and market competitiveness. On December 12, 2025, and on February 6, 2026, the Utilities filed their responses to additional PUC information requests. On June 17, 2026, the PUC approved the IGP RFP with minor modifications. The Utilities filed their final IGP RFP on July 17, 2026. The IGP RFP was issued in August 2026. On August 31, 2026, the Utilities held a virtual technical conference. The deadline for submitting Preliminary Interconnection Report Meeting requests was September 18, 2026.
•On July 17, 2026, the Utilities also filed a letter requesting the PUC open a new proceeding for 500 MW of fuel-flexible firm generation on Oahu with an expedited timeline that would allow for issuance of the RFP by the end of 2026. The Utilities stated that a transparent, competitive RFP process supports customer affordability considerations and could accommodate technologies that may not fit within the framework of the ongoing IGP RFP process. 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 required, and without demonstrating need, it is not reasonable and in the public interest to open a docket or otherwise expedite review and approval of Hawaiian Electric’s Firm RFP request at this time.
Legislation and regulation. Congress and the Hawaii legislature periodically consider legislation that could have positive or negative effects on the Utilities and their customers. Also see “Environmental regulation” in Note 4 of the Condensed Consolidated Financial Statements.
State legislation. Act 301 (2025) appropriates funds to address the State of Hawaii’s share in the settlement of claims related to the Maui wildfire and windstorm tort litigation settlement and provides a resolution to those affected by the Maui windstorm and wildfires and provides assurance for a global settlement to move forward.
Act 266 (2025), among other things, authorizes wheeling of renewable energy and requires the PUC to establish policies and procedures to implement wheeling of renewable electricity for a capacity of not more than two megawatts, as well as microgrid service tariffs, by January 1, 2027. Act 266 also requires the PUC to establish an installation goal for new customer-sited distributed energy resources and establish tariffs to achieve the installation goal and for grid service programs, microgrids, and community-based renewable energy. The Utilities are currently assessing the potential impact related to wheeling as the PUC works to establish the provisions and terms for the implementation of wheeling in compliance with Act 266. For more information on wheeling, see discussion in “Investigation on the establishment of wheeling” above.
Federal legislation. The One Big Beautiful Act signed into law on July 4, 2025 by the President may impact the ability of the Utilities’ recently selected and new wind and solar projects to qualify for federal tax credits. Federal regulations continue to be developed, so the complete scope of potential impacts remains unknown at this time. Any loss in renewable energy tax
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credits could lead to project risk for new wind and solar projects in development and will likely result in higher prices for such projects, developers of which rely extensively on federal tax credits to finance such projects. It is also possible that the sunsetting of these tax credits will impact the supply chain for projects throughout the U.S. as developers rush to meet the four-year safe harbor timeline.
Trade policies. U.S. trade policies continue to evolve as existing tariff programs are modified and new measures are implemented. The impact on the Utilities from trade policies imposed by the U.S. or its trading partners remains uncertain at this time. The Utilities estimated that the majority of the Utilities’ capital goods are purchased domestically at this time. However, the Utilities and their independent power producers procure capital goods that flow through global supply chains and may include raw materials, sub-components, or components sourced or assembled outside the U.S. Utility capital costs and the cost of power procured from independent power producers may increase due to new trade policies and changes in trade policy from the U.S. and its trading partners, based on the amount of foreign content of capital goods. It is also possible that trade policies could impact commodities and raw materials costs, leading to inflation of utility capital costs indirectly through the broader supply chain. Utility-scale battery projects planned by both Hawaiian Electric and independent power producers may see significant cost increases or supply chain challenges, as the majority of battery components are currently manufactured in, or have significant supply chain exposure to, the People’s Republic of China. The Utilities continue to assess the potential impact of evolving trade policies.
Federal grant. On August 7, 2024, the Utilities received a notification from the U.S. Department of Energy that their climate adaption transmission and distribution resilience program application for $95 million in federal funds was officially awarded. On July 16, 2026, the Utilities received a notification of an award modification from the DOE that updated certain terms and conditions including the removal of the scope related to community benefits plans and the associated funding for those deliverables. As a result, the federal share total was reduced from $95 million to $92.6 million. See “Utility projects” in Note 4 of the Condensed Consolidated Financial Statements for additional discussions. There is no assurance that the federal government will reimburse in a timely manner or may dispute reimbursement.
Fuel contracts. On February 1, 2022, the Utilities and PAR Hawaii entered into a fuel supply contract (Supply Agreement) commencing January 1, 2023, which was approved by the PUC on December 1, 2022. On August 14, 2024, the Utilities entered into a second amendment of the Supply Agreement, extending the term by an additional three years through January 31, 2029 and creating savings in fuel costs. The second amendment became effective on June 18, 2025, upon the issuance of the PUC’s final decision and order.
On March 3, 2022, as part of economic sanctions amid the Russia-Ukraine war, PAR Hawaii announced that it was suspending all purchases of Russian crude oil, which accounted for at least 25% of Hawaii’s supply. To help ensure adequate fuel supply, the Utilities entered into a backup fuel supply contract with Vitol Inc. (Vitol), effective December 1, 2022 through June 30, 2023, with annual extensions if mutually agreed by both parties. The fuel supply contract has been extended through June 30, 2027. On December 1, 2022, the PUC issued a final decision and order approving the Vitol backup fuels supply contract, and costs incurred under the contract are recovered through the Utilities’ respective ECRCs.
Fuel barge contract. On July 8, 2026, the Utilities entered into a ten-year contract with Sause Bros., Inc. for inter-island fuel transportation, which is expected to commence on April 1, 2027, pending PUC approval.
FINANCIAL CONDITION
Liquidity and capital resources. The Utilities’ future results of operations are subject to significant risks and uncertainties. Factors that could cause actual results to differ materially from expectations include, but are not limited to, access to capital, ability to attract and retain key personnel, and pending or threatened litigation, including the wildfire-related litigation described above.
Hawaiian Electric remains focused on operating a strong, financially healthy enterprise that supports a thriving future for Hawaii. While the fundamentals of their business remain strong, the Utilities have taken prudent, measured actions to strengthen their financial position while continuing to provide reliable service to their customers and reinforcing their long-term commitment to serving the community. 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) and in May 2024, the Utilities entered into an asset-based credit facility that allows borrowings of up to $250 million (see Note 5 of the Condensed Consolidated Financial Statements). As of September 30, 2026, there were no outstanding borrowings under the credit agreements or asset-based credit facility. Other measures include re-prioritizing capital spending and reducing certain O&M, issuing unsecured debt, and conducting asset sales, among others. In October 2026, the Utilities filed a request with the PUC for approval to issue securitized bonds to finance $500 million of wildfire mitigation and other resilience work.
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The following table provides the components of Hawaiian Electric’s available liquidity under existing facilities.
As of September 30, 2026 | |||||||||||||||||
(in millions) | Capacity | Outstanding | Undrawn | ||||||||||||||
| Unsecured revolving line of credit | $ | 300 | $ | — | $ | 300 | |||||||||||
| ABL Facility | 250 | — | 250 | ||||||||||||||
| Borrowing from HEI - standing commitment letter | 75 | — | 75 | ||||||||||||||
| Total credit | $ | 625 | $ | — | $ | 625 | |||||||||||
| Cash and cash equivalents | 176 | ||||||||||||||||
| Total available liquidity from cash and under existing facilities | $ | 801 | |||||||||||||||
As of September 30, 2026, Hawaii Electric Light and Maui Electric had short-term borrowings from Hawaiian Electric in the amount of nil and $45.5 million, respectively, and had long-term intercompany loans from Hawaiian Electric in the amount of $25 million and $90 million, respectively.
See Note 5 of the Condensed Consolidated Financial Statements for a brief description of Hawaiian Electric’s loans.
Management believes that HEI’s and the Utilities’ current cash and cash equivalents balances, as of September 30, 2026, amounting to $47.9 million and $176.0 million, respectively, the available capacity on Hawaiian Electric’s ABL Facility and revolving line of credit (see Note 5 of the Condensed Consolidated Financial Statements), and the additional liquidity from HEI’s at-the-market offering program, provide sufficient liquidity to fund operations and satisfy their other obligations for the short term.
On April 10, 2026, the final condition to payment under the Settlement Agreements was satisfied when the December 30, 2025 judgment obtained by HEI and Hawaiian Electric on the subrogation claims brought by insurers became final and unappealable. Accordingly, on April 10, 2026, HEI and Hawaiian Electric paid the first of four equal annual $479 million installments. And subsequently on September 16, 2026, HEI made a partial prepayment of $40 million towards the second annual installment due in April 2027. On October 28, 2026, HEI made another partial prepayment of $40 million towards the second installment amount due in April 2027. See Note 2 of the Condensed Consolidated Financial Statements for additional information.
The rebuilding of Lahaina will be a community-led effort and will occur over an extended period of time. The cost of rebuilding Maui Electric’s infrastructure is not yet known, but could be significant because the infrastructure that may be required is expected to be different than what previously existed. For example, to mitigate wildfire risk, grid hardening strategies, such as undergrounding of lines in high-risk locations will be significantly more expensive than using overhead lines and will thus result in increased costs.
The price of crude oil has increased 39.7% over the same quarter in the prior year, which has moderately impacted the Utilities’ liquidity. The Utilities have a fuel pass-through mechanism with limited fuel cost-risk sharing. 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.
Hawaiian Electric utilizes cash on hand to support normal operations and will draw on its revolving line of credit or ABL Facility, as needed, to supplement any operational needs. Hawaiian Electric may also borrow short-term from HEI for itself and on behalf of Hawaii Electric Light and Maui Electric, and Hawaiian Electric may borrow from or loan to Hawaii Electric Light and Maui Electric on a short-term basis. The intercompany borrowings among the Utilities, but not the borrowings from HEI, are eliminated in the consolidation of Hawaiian Electric’s financial statements. The Utilities also utilize long-term debt, borrowings of the proceeds of special purpose revenue bonds issued by the State of Hawaii Department of Budget and Finance, the issuance of privately placed unsecured senior notes bearing taxable interest, and high yield capital markets, to finance the Utilities’ capital improvement projects, or to repay short-term borrowings used to finance such projects. The downgrades of Hawaiian Electric’s credit ratings will continue to adversely impact the Utilities’ ability to access lower cost sources of capital.
As of September 30, 2026, the Utilities are in compliance with all applicable financial covenants and expect to continue to be in compliance with all the financial covenants in the next 12 months. The Utilities’ liquidity has improved, but continues to be impacted from the downgrades of their credit ratings, which result in higher credit spreads compared to investment grade credit spreads. However, the Utilities cannot predict the future effects on the Utilities’ ability to access additional capital or the future impacts on the Utilities’ financial position, results of operations, and cash flows.
Credit ratings. On April 21, 2026 and July 22, 2026, Moody’s and S&P, respectively, upgraded the credit ratings of Hawaiian Electric. On August 11, 2026, S&P withdrew its ‘B’ short-term and commercial paper rating at Hawaiian Electric’s
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request due to the lack of access to the commercial paper market. As of October 30, 2026, the Fitch, Moody’s, and S&P ratings of Hawaiian Electric were as follows:
| Fitch | Moody’s | S&P | ||||||||||||||||||
From1 | To | From1 | To | From1 | To | |||||||||||||||
| Long-term issuer default, long-term and issuer credit, respectively | BB- | BB- | Ba2 | Ba1 | B+ | BB- | ||||||||||||||
| Short-term issuer default, commercial paper and commercial paper, respectively | B | B | NP | NP | B | WR3 | ||||||||||||||
| Senior unsecured debt/special purpose revenue bonds | BB | BB | Ba2 | Ba1 | * | * | ||||||||||||||
| Cumulative preferred stock (selected series) | * | * | WR2 | WR2 | * | * | ||||||||||||||
| Outlook | Positive | Positive | Positive | Stable | Watch Positive | Stable | ||||||||||||||
1 As of December 31, 2025. In March 2026, S&P revised Hawaiian Electric’s outlook to “Positive” from “CreditWatch Positive” and reaffirmed the “B+” issuer credit rating.
2 Rating withdrawn due to preferred stock redemption in the fourth quarter of 2025.
3 Rating withdrawn due to lack of access to the commercial paper market.
* Not rated.
NP - Not Prime.
WR - Withdrawn rating.
Note: The above ratings reflect only the view, at the time the ratings are issued or affirmed, of the applicable rating agency, from whom an explanation of the significance of such ratings may be obtained. Such ratings are not recommendations to buy, sell or hold any securities; such ratings may be subject to revision or withdrawal at any time by the rating agencies; and each rating should be evaluated independently of any other rating.
Taxable debt. On July 24, 2025, the Utilities received PUC approval to issue during the three-year period of 2025 through 2027, unsecured obligations bearing taxable interest (Hawaiian Electric up to $900 million, Hawaii Electric Light up to $115 million and Maui Electric up to $150 million), to finance capital expenditures, repay long-term and/or short-term debt used to finance or refinance capital expenditures, and/or to reimburse funds used for payment of capital expenditures. Pursuant to the approval, on September 18, 2025, Hawaiian Electric issued $500 million in unsecured senior notes with an interest rate of 6.00% (2025 Notes). A portion of the proceeds was used to repay the outstanding balance of the Utilities’ revolving and term loan facilities and the remaining proceeds are intended to be used to 1) finance capital expenditures, 2) repay long-term debt and short-term debt used to finance or refinance capital expenditures, and 3) reimburse funds used for the payment of capital expenditures. The 2025 Notes will mature on October 1, 2033.
On November 3, 2025, Hawaiian Electric made long-term intercompany loans to Hawaii Electric Light and Maui Electric in the amount of $25 million and $90 million, respectively. The interest rate and term of the loans are the same as Hawaiian Electric’s 2025 Notes. The long-term intercompany loans are eliminated in the total consolidated Hawaiian Electric amounts. See summary table below for remaining authorized amounts as of September 30, 2026 for each respective utility.
| (in millions) | Hawaiian Electric | Hawaii Electric Light | Maui Electric | ||||||||
| Total “up to” amounts of taxable debt authorized from 2025 through 2027 | $ | 900 | $ | 115 | $ | 150 | |||||
| Less: taxable debt executed on September 18, 2025/ long-term intercompany loans | 500 | 25 | 90 | ||||||||
| Remaining authorized amounts | $ | 400 | $ | 90 | $ | 60 | |||||
As of September 30, 2026, the Utilities have $2.06 billion of long-term debt, of which nil is due or expected to be repaid within 12 months.
Equity. On October 28, 2025, the Utilities received PUC approval to issue and sell each utility’s common stock over a three-year period from January 1, 2025 through December 31, 2027 (Hawaiian Electric sale/s to HEI of up to $210 million, Hawaii Electric Light sale/s to Hawaiian Electric of up to $70 million, and Maui Electric sale/s to Hawaiian Electric of up to $145 million) and the purchase of Hawaii Electric Light and Maui Electric common stock by Hawaiian Electric. As of September 30, 2026, Hawaiian Electric, Hawaii Electric Light, and Maui Electric have $210 million, $70 million, and $79 million, respectively, of remaining common stock authorization.
Securitization. Act 258 authorizes the PUC to approve securitization financing for certain utility costs. On October 9, 2026, the Utilities filed for PUC approval to request a financing order authorizing the issuance of approximately $531 million aggregate principal amount of infrastructure resilience bonds, reflecting up to approximately $500 million of infrastructure
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resilience costs, including carrying costs, and approximately $31 million of estimated upfront financing costs. The proposed costs include wildfire mitigation, grid modernization and related eligible operation and maintenance costs, certain of which remain subject to approval in separate PUC proceedings. Securitization is expected to result in lower financing costs than traditional financing alternatives available to the Utilities. See “Recent regulatory and legislative developments” section above for more information.
Cash flows. The following table reflects the changes in cash flows for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025:
| Nine months ended September 30 | |||||||||||||||||
| (in thousands) | 2026 | 2025 | Change | ||||||||||||||
| Net cash provided by operating activities | $ | 254,092 | $ | 320,003 | $ | (65,911) | |||||||||||
| Net cash used in investing activities | (396,791) | (247,682) | (149,109) | ||||||||||||||
| Net cash provided by (used in) financing activities | (167,551) | 247,402 | (414,953) | ||||||||||||||
Net cash provided by operating activities. The decrease in net cash provided by operating activities was primarily driven by higher cash paid for fuel oil stock, and higher customer bills due to higher fuel oil prices.
Net cash used in investing activities. The increase in net cash used in investing activities was primarily driven by an increase in capital expenditures related to construction activities.
Net cash provided by (used in) financing activities. The decrease in net cash provided by financing activities was largely driven by proceeds from the issuance of long-term debt in 2025, partially offset by debt repayments.
Material cash requirements. Material cash requirements of the Utilities include payments related to settlement of tort-related legal claims and cross claims to the extent HEI does not make such payments, O&M expenses, labor and benefits costs, fuel and purchase power costs, debt and interest payments, operating and finance lease obligations, their forecasted capital expenditures (including capital expenditures related to wildfires and wildfire mitigations) and investments, their expected retirement benefit plan contributions and other short-term and long-term material cash requirements. The cash requirements for O&M, fuel and purchase power costs, debt and interest payments, and operating and finance lease obligations are generally funded through the collection of the Utilities’ revenue requirement established in the last rate case and other mechanisms established under the regulatory framework. The cash requirements for capital expenditures are generally funded through operating cash flows, the issuance of debt, and contributions of equity from HEI and generally recovered through the Utilities’ revenue requirement or other capital recovery mechanisms over time.
Hawaiian Electric’s consolidated capital structure was as follows:
| (dollars in millions) | September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||
Long-term debt, net, including current portion of long-term debt, net | $ | 2,058 | 52% | $ | 2,183 | 58 | % | |||||||||||||||||||
| Common stock equity | 1,909 | 48 | 1,583 | 42 | ||||||||||||||||||||||
| $ | 3,967 | 100% | $ | 3,766 | 100 | % | ||||||||||||||||||||
Note: Columns may not foot due to rounding.
The Utilities’ credit rating downgrades related to the Maui windstorm and wildfires will continue to limit their ability to readily access low-cost sources of capital. Through the sale of common stock in September 2024, HEI raised sufficient cash to pay for the first installment of the settlement of wildfire tort claims and paid for the first installment on April 10, 2026. HEI is currently working with its financial advisors on a financing plan to raise the additional capital required to fund the remaining settlement payments for the wildfire tort claims. While management believes that HEI will be able to raise the necessary capital, there is no assurance that management’s plans will be successful. The damages and losses related to the Maui windstorm and wildfires and related lawsuits (see further information in Note 2 of the Condensed Consolidated Financial Statements), the economic impact of higher fuel prices, inflation, higher interest rates, tightening of monetary policy, and geopolitical situations, create significant uncertainty, and the Utilities cannot predict the extent or duration of these conditions, the future effects that these conditions will have on the Utilities’ financing plan, cost of capital and their ability to access additional capital, or the future impacts on the Utilities’ financial position, results of operations, and cash flows.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no significant changes in HEI’s and Hawaiian Electric’s exposure to market risk during the quarter ended September 30, 2026. For discussion of our exposure to market risk, see page 62 included in Part II. Item 7A. of HEI’s and Hawaiian Electric’s 2025 Form 10-K.
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Item 4. Controls and Procedures
HEI:
Disclosure Controls and Procedures
The Company maintains a set of disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934, as amended (Exchange Act), is recorded, processed, summarized and reported within the time periods specified in SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Exchange Act. Management, including the Company’s Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective, as of the end of the period covered by this report, at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There have been no changes in internal control over financial reporting during the third quarter of 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Hawaiian Electric:
Disclosure Controls and Procedures
Hawaiian Electric maintains a set of disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed by Hawaiian Electric in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC’s rules and forms, and that such information is accumulated and communicated to Hawaiian Electric’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
An evaluation was performed under the supervision and with the participation of Hawaiian Electric’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Hawaiian Electric’s disclosure controls and procedures, as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Exchange Act. Management, including Hawaiian Electric’s Chief Executive Officer and Chief Financial Officer, concluded that Hawaiian Electric’s disclosure controls and procedures were effective, as of the end of the period covered by this report, at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There have been no changes in internal control over financial reporting during the third quarter of 2026 that have materially affected, or are reasonably likely to materially affect, Hawaiian Electric’s internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The descriptions of legal proceedings (including judicial proceedings and proceedings before the PUC and environmental and other administrative agencies) in HEI’s and Hawaiian Electric’s 2025 Form 10-K (see “Part I. Item 3. Legal Proceedings” and proceedings referred to therein) and this Form 10-Q (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 2 and 4 of the Condensed Consolidated Financial Statements) are incorporated by reference in this Item 1. With regard to any pending legal proceeding, alternative dispute resolution, such as mediation or settlement, may be pursued where appropriate, with such efforts typically maintained in confidence unless and until a resolution is achieved. Certain HEI subsidiaries (including Hawaiian Electric and its subsidiaries and Pacific Current and its subsidiaries) may also be involved in ordinary routine PUC proceedings, environmental proceedings and litigation incidental to their respective businesses.
Item 1A. Risk Factors
For information about Risk Factors, see pages 14 to 26 of HEI’s and Hawaiian Electric’s 2025 Form 10-K and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures about Market Risk” and the Condensed Consolidated Financial Statements herein. Also, see “Cautionary Note Regarding Forward-Looking Statements” on pages iv through vi herein.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
(c) Purchases of HEI common shares were made on the open market during the third quarter of 2026 to satisfy the requirements of certain plans as follows:
ISSUER PURCHASES OF EQUITY SECURITIES
Period1 | Total Number of Shares Purchased2 | Average Price Paid per Share2 | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
| July 1 to 31, 2026 | 15,463 | $13.43 | — | NA | ||||||||||||||||||||||
| August 1 to 31, 2026 | 15,857 | $12.13 | — | NA | ||||||||||||||||||||||
| September 1 to 30, 2026 | 29,924 | $9.95 | — | NA | ||||||||||||||||||||||
NA - Not applicable.
1 Trades (total number of shares purchased) are reflected in the month in which the order is placed.
2 The purchases were made to satisfy the requirements of the HEI Dividend Reinvestment and Stock Purchase Plan (DRIP) and the Hawaiian Electric Industries Retirement Savings Plan (HEIRSP) for shares purchased for cash or by the reinvestment of dividends by participants under those plans and none of the purchases were made under publicly announced repurchase plans or programs. Average prices per share are calculated exclusive of any commissions payable to the brokers making the purchases for the DRIP and the HEIRSP. Of the “Total number of shares purchased,” 3,653 of the 15,463 shares, 5,177 of the 15,857 shares and 11,563 of the 29,924 shares were purchased for the DRIP; the remaining shares were purchased for the HEIRSP. The repurchased shares were issued for the accounts of the participants under registration statements registering the shares issued under these plans.
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Item 5. Other Information
During the three months ended September 30, 2026, no director or officer of HEI or Hawaiian Electric (as defined in Exchange Act Rule 16a-1(f)) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.
Election of Director
On November 5, 2026, the Company’s Board of Directors (the “Board”) elected Peter Ho as a director of the Company, effective immediately, to serve until the Company’s 2027 Annual Meeting of Shareholders. Mr. Ho was also appointed as a member of the Company’s Audit & Risk Committee.
There are no arrangements or understandings between Mr. Ho and any other person pursuant to which he was selected as a director of the Company and no transactions involving Mr. Ho that are required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Mr. Ho will participate in the Company’s standard non-employee director compensation program, as described in the Company’s Proxy Statement dated April 29, 2026, and will enter into substantially the same indemnity agreement that the Company entered into with each of its existing directors, the form of which is filed as Exhibit 10.17 to the Company’s Annual Report on Form 10-K for fiscal year 2025.
Compensatory Arrangements of Certain Officers
On November 5, 2026, upon recommendation from the Company’s Compensation and Human Capital Management Committee, the Board approved an increase to the annual base salary of the Company’s and Hawaiian Electric’s Chief Financial Officer (“CFO”), Paul K. Ito, from $517,900 to $580,000, retroactive to September 1, 2026. The increase recognizes the dual roles Mr. Ito has performed as the CFOs of both the Company and Hawaiian Electric since April of 2026.
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Item 6. Exhibits
HEI Exhibit 4.1 | Revised Amendment 2024-1 to the Hawaiian Electric Industries Retirement Savings Plan, restatement effective January 1, 2025. | |||||||
HEI Exhibit 4.2 | Amendment 2026-1 to the Hawaiian Electric Industries Retirement Savings Plan, restatement effective January 1, 2025. | |||||||
HEI Exhibit 4.3 | Ninth Amendment effective October 1, 2026 to Trust Agreement (dated as of September 4, 2012) between HEI and Fidelity Management Trust Company. | |||||||
HEI Exhibit 4.4 | Letter Amendment effective October 2, 2026 to Trust Agreement (dated as of September 4, 2012) between HEI and Fidelity Management Trust Company | |||||||
HEI Exhibit 31.1 | Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of Scott W. H. Seu (HEI Chief Executive Officer) | |||||||
HEI Exhibit 31.2 | Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of Paul K. Ito (HEI Chief Financial Officer) | |||||||
HEI Exhibit 32.1 | HEI Certification Pursuant to 18 U.S.C. Section 1350 | |||||||
| HEI Exhibit 101.INS | XBRL Instance Document - the instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
| HEI Exhibit 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
| HEI Exhibit 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| HEI Exhibit 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| HEI Exhibit 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| HEI Exhibit 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| HEI Exhibit 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
Hawaiian Electric Exhibit 10.1 | Inter-Island Fuel Transportation Contract between Sause Bros., Inc. and Hawaiian Electric dated July 8, 2026 (certain confidential information has been omitted). | |||||||
Hawaiian Electric Exhibit 10.2 | First Amendment dated July 27, 2026 to Amended and Restated Power Purchase Agreement between Hawaiian Electric and Kalaeloa Partners, L.P., dated October 29, 2021. | |||||||
Hawaiian Electric Exhibit 10.3 | Power Purchase Agreement between Hawaiian Electric and Kalaeloa Partners, L.P., dated July 27, 2026. | |||||||
Hawaiian Electric Exhibit 31.3 | Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of Scott W. H. Seu (Hawaiian Electric Chief Executive Officer) | |||||||
Hawaiian Electric Exhibit 31.4 | Certification Pursuant to Rule 13a-14 promulgated under the Securities Exchange Act of 1934 of Paul K. Ito (Hawaiian Electric Chief Financial Officer) | |||||||
Hawaiian Electric Exhibit 32.2 | Hawaiian Electric Certification Pursuant to 18 U.S.C. Section 1350 | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized. The signature of the undersigned companies shall be deemed to relate only to matters having reference to such companies and any subsidiaries thereof.
| HAWAIIAN ELECTRIC INDUSTRIES, INC. | HAWAIIAN ELECTRIC COMPANY, INC. | |||||||||||||
| (Registrant) | (Registrant) | |||||||||||||
| By | /s/ Scott W. H. Seu | By | /s/ Scott W. H. Seu | |||||||||||
| Scott W. H. Seu | Scott W. H. Seu | |||||||||||||
| Chief Executive Officer | Chief Executive Officer | |||||||||||||
| (Principal Executive Officer of HEI) | (Principal Executive Officer of Hawaiian Electric) | |||||||||||||
| By | /s/ Paul K. Ito | By | /s/ Paul K. Ito | |||||||||||
| Paul K. Ito | Paul K. Ito | |||||||||||||
Senior Vice President and | Senior Vice President, | |||||||||||||
Chief Financial Officer | Chief Financial Officer and Treasurer | |||||||||||||
| (Principal Financial Officer of HEI) | (Principal Financial Officer of Hawaiian Electric) | |||||||||||||
| Date: November 6, 2026 | Date: November 6, 2026 | |||||||||||||
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