HAWAIIAN ELECTRIC CO INC

Recent developments. See also “Recent developments” in Hawaiian Electric’s MD&A and Note 2 of the Condensed Consolidated Financial Statements, which includes recent updates and disclosures relating to the Maui windstorm and wildfires.

On September 5, 2025, HEI and Hawaiian Electric each amended their senior unsecured revolving credit facility (the HEI Revolving Facility and the Hawaiian Electric Revolving Facility, respectively) resulting in increased borrowing capacities and available liquidity. HEI increased its revolving commitments available under the HEI Revolving Facility to $300 million from $175 million and extended the termination date to September 5, 2030 from May 14, 2027. Hawaiian Electric increased its revolving commitments available under the Hawaiian Electric Revolving Facility to $300 million from $200 million and extended the termination date to September 4, 2026, subject to an automatic extension to the earlier of (i) such date specified in a final order or approval of the PUC and (ii) if such order or approval is obtained, September 5, 2030. The Hawaiian Electric Revolving Facility also allows for commitment increases of up to an additional $75 million, subject to customary conditions. Refer to Note 5 of the Condensed Consolidated Financial Statements for additional terms of the amended credit facilities.

In addition, on September 18, 2025, Hawaiian Electric issued $500 million in unsecured senior notes with an interest rate of 6.00% and maturing on October 1, 2033. See Note 5 of the Condensed Consolidated Financial Statements for additional terms of the unsecured senior 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.

In June 2025, the Utilities submitted a request with the PUC to terminate or suspend the Affiliate Transaction Requirements (ATRs). Beginning in 2024 and continuing in 2025, HEI has embarked on a strategy to divest all of its affiliated companies other than the Utilities, intending for the Utilities to be HEI’s sole operating company. Termination of the ATRs would allow implementation of a corporate integration, under which all HEI employees would move to the Utilities. A few Hawaiian Electric officer positions would also manage and operate HEI (dual-hatted executives) and the HEI and Hawaiian Electric boards of directors would be comprised of a single set of individuals. In September 2025, the PUC dismissed the request without prejudice. In its order, the PUC provided guidance on the topics to be addressed in any future request. On October 31, 2025 HEI and Hawaiian Electric filed a revised request with the PUC to terminate or suspend the ATRs.

On November 5, 2025, the parties of the securities class action lawsuit related to the Maui windstorm and wildfires, signed a binding term sheet to settle the Securities Action (the Securities Action Term Sheet) following negotiations facilitated by a mediator. The Securities Action Term Sheet calls for the parties to prepare and execute a definitive stipulation of settlement (Securities Action Stipulation of Settlement) that will provide for the complete resolution, compromise, and settlement of the Securities Action in exchange for a payment by the Company of $47.8 million (the Securities Action Settlement Amount). The Securities Action Settlement Amount will be fully funded by the proceeds of the Derivative Settlement discussed below. The settlement of the Securities Action is conditioned on, among other things, the finalization of the Securities Action Stipulation of Settlement; approval by the boards of the Company and Hawaiian Electric of the Securities Action Stipulation of Settlement; timely funding of the Securities Action Settlement Amount; the finalization of the Derivative Stipulation of Settlement (defined and discussed below) by February 28, 2026; final court approval of the Derivative Stipulation Settlement; both preliminary and final court approval of the Securities Action Stipulation of Settlement; and entry of a judgment of dismissal following final court approval of the Securities Action Stipulation of Settlement. 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.

In addition, on November 5, 2025, the parties of the shareholder derivative lawsuits related to the Maui windstorm and wildfires, signed a binding term sheet (the Derivative Litigation Term Sheet) to settle all of the outstanding derivative actions described above (the Derivative Litigation Matters). The Derivative Litigation Term Sheet was signed following negotiations facilitated by a mediator. The Derivative Litigation Term Sheet calls for the parties to prepare and execute a definitive settlement agreement (the Derivative Litigation Settlement Agreement) that will provide for a complete resolution, compromise, and settlement of the claims asserted in the Derivative Litigation Matters in exchange for a payment on behalf of the individual defendants by the Company’s insurers in the amount of $100 million (the Derivative Settlement Proceeds, which is to be fully funded by the directors and officers’ liability insurance policies). The Derivative Settlement is conditioned on, among other things, timely funding of the Derivative Settlement Proceeds by the insurers; the approval by the boards of HEI and Hawaiian Electric (including their independent, non-defendant directors) of Derivative Litigation Settlement Agreement; final court approval of the Derivative Litigation Settlement Agreement; and entry of final judgment and orders of dismissal in the Derivative Litigation Matters. The plaintiffs’ counsel intends to request court approval for attorneys’ fees of 25% of the Derivative Settlement Proceeds, plus expenses not to exceed $475,000. In connection with the settlement of the Derivative Litigation Matters, there will be no admissions of liability and the defendants, and related persons will receive a customary full release of all claims.

In connection with the execution of the Securities Action Term Sheet, HEI accrued, as of September 30, 2025, $47.8 million, and concurrently, recorded an insurance reimbursement receivable of an equivalent amount as the recovery of the agreed settlement payment under its directors and officers liability insurance policy is deemed probable.

For further discussion of the impacts of inflation and other macro-economic factors impacting the Utilities, see “Recent Developments” in the Electric utility section below. See also “Economic conditions” below for further discussion of the economic impact of recent events.