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 June 30, 2026, the Utilities have deferred $80.5 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, and the parties to the litigation are now in the process of dismissing the thousands of lawsuits.

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 June 30, 2026, based on the best estimate at this time.

The Settlement Agreements are intended to resolve all pending and potential tort-related legal claims related to the Maui windstorm and wildfires. 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 80 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.

Following the final condition to payment under the Settlement Agreements, in the second quarter of 2026, the Utilities remeasured the remaining settlement liability at present value, discounted using the Utilities’ incremental borrowing rate in accordance with Accounting Standards Codification Topic 835-30 Imputation of Interest. Based on the remeasurement, Hawaiian Electric adjusted down the remaining settlement liability from $1.44 billion to $1.30 billion and recognized a reduction to expense of $154 million, net of accretion expense of $18 million for the three and six months ended June 30, 2026. The accretion expense is reported on line “Interest expense, net” and “Interest expense and other charges, net” on HEI’s and the Utilities’ Condensed Consolidated Statements of Income, respectively. The discounted settlement liability will continue to accrete through interest expense using the effective interest method until the applicable settlement payment due dates, at which time the carrying amount of the liability is expected to equal the gross settlement payment obligation. As of June 30, 2026, Hawaiian Electric classified $410 million as a current liability and $890 million as a noncurrent liability on HEI’s and the Utilities’ Condensed Consolidated Balance Sheets.

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.

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. The court set a hearing date for September 24, 2026 for the final approval of the settlement.

In connection with the execution of the Securities Action Term Sheet, HEI accrued $47.8 million in the third quarter of 2025, and 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. In the third quarter of 2025, HEI charged the accrued settlement to “Expenses-Other” in HEI and Subsidiaries’ Condensed Consolidated Statements of Income, which was offset by the probable insurance recovery. The accrued settlement and insurance receivable is included in “Wildfire related claims” and “Accounts receivable and unbilled revenues, net,” under current liabilities and current assets, respectively, in HEI and subsidiaries’ Condensed Consolidated Balance Sheets.

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’ 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 June 30, 2026, the Company’s and Utilities’ insurance receivable primarily related to the settlement of the Securities Action totaled $48 million and $0.1 million, respectively, under the policies. As of June 30, 2026, HEI and its subsidiaries have approximately nil, nil and $71 million of insurance coverage remaining under the excess liability,


	Three months ended June 30, 2026	Six months ended June 30, 2026
(in thousands)			Electric utility		HEI consolidated		Electric utility		HEI consolidated
Maui windstorm and wildfires related expenses:
Legal expenses			$	1,109	$	3,325	$	2,564	$	5,232



Other expense			1,116		1,270		1,116		1,378
Total Maui windstorm and wildfires related expenses			2,225		4,595		3,680		6,610
Insurance recoveries1			(7,870)		(7,842)		(8,831)		(9,174)
Settlement remeasurement2			(153,870)		(153,870)		(153,870)		(153,870)
Accretion expense3			17,714		17,714		17,714		17,714
Total Maui windstorm and wildfires related items, net			$	(141,801)	$	(139,403)	$	(141,307)	$	(138,720)


	Three months ended June 30, 2025			Six months ended June 30, 2025
(in thousands)		Electric utility		HEI consolidated		Electric utility		HEI consolidated
Maui windstorm and wildfires related expenses:

Legal expenses		$	4,304	$	5,888	$	8,153	$	14,738




Other expense		6,452		6,740		13,899		14,823

Total Maui windstorm and wildfires related expenses		10,756		12,628		22,052		29,561
Insurance recoveries4		3,620		2,418		556		(4,304)
Deferral treatment approved by the PUC5		(9,889)		(9,889)		(15,572)		(15,572)
Total Maui windstorm and wildfires related expenses, net of insurance recoveries and approved deferral treatment		$	4,487	$	5,157	$	7,036	$	9,685