Hawaiian Electric Industries, Inc.

Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the ATI fourth quarter and full year 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remark, there will be a question and answer session. If you would like to ask a question during that time, simply press star ending number one on your telephone keypad. I would now like to turn the call over to Mateo Garcia, Director of Investor Relations. Mateo, please go ahead.

Thank you. Welcome, everyone, to HEI's fourth quarter and full year 2025 earnings call. Joining me today are Scott Siu, HEI President and CEO, Scott DeGhetto, HEI Executive Vice President and CFO, Shelly Kimura, Hawaiian Electric President and CEO, and other members of senior management. Our earnings release and our presentation for this call are available in the investor relations section of our website. As a reminder, forward-looking statements will be made on today's call. Factors that could cause actual results to differ materially from expectations can be found in our presentation, our SEC filings, and in the investor relations section of our website. Today's presentation also includes references to non-GAAP financial measures, including those referred to as core items. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. We will take questions from institutional investors at the end of this call. Individual investors and others can reach out to Investor Relations. Now, Scott Hsu will begin with his remarks.

Aloha kakou. Welcome, everyone. For today's call, I'll start with an overview of the important accomplishments we've made over the past year and touch on our priorities going forward. Scott Figueroa will walk through our financial results and then open it up for questions. Over the past year, we continue to execute on the priorities we've communicated since the Maui wildfires in 2023, and I'm proud of the progress we've made. We've advanced key initiatives, including progressing the Maui Wildfire Tort Settlement, pursuing legislative measures that support our communities as we deal with the risk of wildfires, implementing wildfire safety improvements that have reduced the risk of ignition from utility equipment, and laying the groundwork for a successful second multi-year rate period under our performance-based regulation, or PBR, framework. Our actions to date help ensure our ability to serve and invest in our communities for the long term. Last quarter, we discussed the process to obtain final court approval of the Maui Wildfire Tort Settlement. We continue to make good progress in resolving the remaining contingencies to payment. In late December, the Maui Circuit Court granted our motion for summary judgment on the subrogation insurer's direct claims. In January, the court granted final approval of the class settlement agreement and provided a good faith settlement determination. We also received another favorable decision from the Hawaii Supreme Court. As previously disclosed, the subrogation insurers moved to intervene in the class settlement process and the Maui Circuit Court denied this attempt last June. The insurers appealed and the appeal was sent to the Hawaii Supreme Court. On February 10, the court affirmed the lower court's denial of the subrogation insurer's motion to intervene in the class settlement. In doing so, it made clear that a class settlement transforms an insurer's subrogation rights into lien rights the same way an individual settlement does, which is what the court ruled on a year ago. This decision ends the insurer's efforts to derail the class settlement, and because they lack party status in the class action, The insurers should not be able to file a successful appeal to the final approval of the class agreement previously granted by the Maui Circuit Court. This positive result moves us one step closer toward final court approval of the settlement agreements. In sum, we've continued to work through the administrative steps required to see the settlement through to completion and trigger our first payment. We're also pleased that we've been able to finalize settlements resolving both the shareholder class action and shareholder derivative lawsuits filed in connection with the Maui wildfires. As disclosed last quarter, in early November, we signed binding term sheets to settle the litigation. In late December and early January, the settlements were finalized and executed. The agreements provide for complete resolution of both sets of litigation. with the company's obligations fully funded by insurance proceeds. Turning to legislation, as we've discussed over the past few quarters, Hawaii's historic wildfire legislation, signed into law last July, acknowledges the need for legislative measures to protect our communities and support the financial stability of electric utilities in the face of increasingly severe weather events. The PUC's wildfire fund study was completed at the end of December, And this was a crucial first step in implementing our state's milestone legislation. Work continues to establish a liability cap. With the PUC rulemaking process expected to take 18 to 24 months. Details around the wildfire fund will be established sometime thereafter. The PUC also approved the utilities three year wildfire safety strategy in late December. concluding that the strategy can be expected to reduce wildfire risk and emphasizing the importance of continuous improvement. The utility has achieved many of the operational objectives laid out in the strategy ahead of schedule and will continue rapidly advancing the strategy as we progress through 2026. We'll be submitting our next update to the PUC in April. We've also continued to make our company stronger and more resilient through carefully managing our balance sheet. Our successful $500 million utility debt issuance last year, as well as our revolver upsize to $600 million, support our financial flexibility and liquidity as we look toward the elevated capital cycle ahead. We also continue to advance our state's clean energy goals. With the utility reaching a 37% renewable portfolio standard or RPS in 2025. We remain on track to meet the 40% by 2030 statutory RPS requirement. Affordability has been a central focus as we've advanced our strategic and operational priorities. Customer bills remain stable in 2025, despite the significant investments we've made in wildfire safety and resilience. The utility continues to offer financial assistance to working families, including providing over $1 million in payment assistance. Turning to the next slide, as we look ahead to our objectives for 2026, we'll continue working to resolve the conditions to payment in the tort litigation settlement agreements. We believe we're in the home stretch of this process as the only remaining steps are resolving all outstanding appeals. This includes resolving the appeal the insurers have taken from the judgments entered in our favor in their direct subrogation actions. Turning to our ongoing rate rebasing, as discussed on our last earnings call, we are pursuing an alternative process that could allow for resetting rates without the time, costs, and resources typically required for a full rate case proceeding. We see this as an opportunity to develop a rate rebasing proposal in a nontraditional manner, consistent with fundamental PBR tenets set forth by the Commission and state legislature, encouraging innovation and honoring a stakeholder-driven process. We plan to submit a joint rebasing proposal with Ulupono Initiative, a PBR working group stakeholder party, by March 6. We'd also like to address some of the elements that could be improved under our PBR regulatory framework, including our annual inflationary adjustment and performance incentive mechanisms, or PIMs. This will happen in the process that the PUC has designated as PBR Phase 6. We expect further guidance from the PUC on a schedule for Phase 6 after the rebasing proposal is submitted. Affordability remains a central focus as we look ahead toward the commencement of the second multi-year rate period under PBR, especially given the elevated capital investment cycle projected over the next few years. We are pursuing low-cost financing options that would reduce impacts to customers from critical investments required for safety and resilience. In the coming months, we'll be submitting a request to finance Wildfire Safety Strategy CapEx and other infrastructure resilience costs via securitization, which is typically the lowest cost of capital available for these types of investments. In summary, in 2026, we'll continue to execute on our key objectives of advancing the tort settlement and our rate rebasing process while implementing the wildfire risk reduction measures outlined in our wildfire safety strategy. Although much remains to be done, I'm optimistic about the path ahead and proud of what our team has accomplished to date. Finally, we'll be seeing an executive transition at HEI at the end of the quarter. As previously determined by our Board of Directors in 2024, Scott DeGetto's term as HEI CFO expires on April 1, and as a result, Scott will resign effective April 2. Paul Ito, the current treasurer and CFO of Hawaiian Electric, will resume his prior role as HEI CFO, effective April 2, 2026. Scott joined us as our CFO shortly after the Maui wildfires in 2023, and he's played a crucial role in helping lead our company through the most challenging period we've ever been through. His leadership and expertise have been critical for our success, and I'd like to thank Scott for all that he's done. And even though he'll hand the CFO reins over to Paul come April, Scott won't be too far, as we'll have him support us as our consultant. Again, I thank Scott and I welcome Paul back to his previous role. Scott Figueroa, I'll now turn the call over to you.