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 HEI Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] 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 Seu, HEI President and CEO; Scott DeGhetto, HEI Executive Vice President and CFO; and Shelee 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 Seu 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 touched on our priorities going forward. Scott DeGhetto 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 multiyear 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 towards 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 insurers 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 insurers motion to intervene in the class settlement. In doing so, it made clear that a class settlement transforms an insurer's subrogation rights…

Thank you, Scott. And it's been a pleasure working alongside you in serving this company. I'll start with our financial results on Slide 6. For the full year 2025, we generated net income of $123.1 million or $0.71 per share compared to a net loss of approximately $1.4 billion in 2024. The results include $16.5 million of pretax Maui wildfire-related expenses net of insurance recoveries and deferrals. Approximately $12.6 million of that amount was recorded at the utility. Results for the year also include $12.4 million of losses related to the strategic review of Pacific Current. Excluding these items, which we refer to as non-core, consolidated core net income was $149.3 million or $0.86 per share. This compares to core income from continuing operations of $124.3 million or $0.98 per share in 2024. Utility core net income for the year was $177.5 million compared to $180.7 million in 2024. The decrease was driven by higher O&M expenses, primarily due to previously deferred consulting and legal fees, higher interest expense, higher depreciation and the recognition of tax credit benefits in the previous year. Holding company core net loss was $28.2 million compared to $56.4 million in 2024. The lower core net loss was driven by lower interest expense due to the lower debt balance following the retirement of holding company debt in April and higher interest income from cash being held on the balance sheet to make the first settlement payment. Turning to the next slide. As of the end of the fourth quarter, the holding company and the utility had approximately $16 million and $486 million of unrestricted cash on hand, respectively. In addition, the holding company has approximately $530 million in combined liquidity available under its ATM program and credit facility capacity. The utility also has approximately $540 million of liquidity available under its accounts receivable facility and credit facility capacity. Consistent with last quarter, Hawaiian Electric's Board of Directors approved a $10 million quarterly dividend to HEI for the fourth quarter of 2025. There have been no changes to our settlement financing plans since what we communicated last quarter. We still expect to fund the second settlement payment with debt and/or convertible debt and expect that payments thereafter will be funded with a mix of debt and equity depending on market conditions. As Scott Seu mentioned, outstanding appeals must be resolved before we can make our first $479 million settlement payment, which we now expect to make in the second half of 2026. Turning to the next slide. We still expect 2026 CapEx of $550 million to $700 million in 2027 and 2028 CapEx to increase further to $600 million to $800 million and $600 million to $850 million, respectively. This level of spend is consistent with our expectations communicated last quarter and is subject to additional PUC approvals and further resource adequacy initiatives and analysis. At that, let's open up the call to questions.

[Operator Instructions] Your first question comes from the line of Michael Lonegan with Barclays.

Just wondering if you could talk about the latest appeal by the insurers. What do you see as the chances the Hawaii Supreme Court takes up the case? Or do you think it's possible that they deny to hear the appeal based on some of the language from the prior appeals or prior cases with the Supreme Court?

Mike, this is Scott. Thanks for the question. Yes. So the only remaining item here is that appeal, the subros appeal of the earlier summary judgment, which dismissed their claims, their direct claims against the defendants. There's been no briefing scheduled yet on this appeal that was just filed in January. I do think that ultimately, of course, I don't want to get ahead of our Hawaii Supreme Court. But essentially, this is the last step. And all decisions by the Circuit Court and the State Supreme Court have been very supportive of the settlements. Again, I won't speculate we'll speak for the Supreme Court. But I'm -- maybe I'll stop my comments there.

Okay. And then on financing the second settlement payment, what are your latest thoughts on a preference between debt or convertible debt or a combination thereof? And do you think you'll wait until after the settlement is approved to do this financing? Or is it something we could see like with the first settlement capital raise where you did that already with equity?

Mike, Scott DeGhetto. So no change in plans from what we've been saying over the past several quarters. It will be a relevering at HEI either through debt or convertible debt. Right now, based upon market conditions, I would say we're leaning more towards convertible debt and doing it all as convertible debt, but that certainly can change. as we go forward. And then in terms of the timing of that payment, we don't anticipate doing anything until after the settlements approved. As you know, that first payment was raised a while ago. It's being held in escrow. And then once the settlement is approved, we have 30 days to make that payment. And so then we would look -- once that payment is made, we'll continue to look at the markets and determine at the appropriate time when we would raise that money. I don't think it will be a year in advance like we did the last one. But you just never know. It depends on where the market is at that particular time.

Great. And then you talked about financing your capital program with the prior debt issuance and then also retained earnings, a good portion of it. With the remaining amount, do you expect to use your $250 million ATM program, how much of that -- and what could be the cadence of issuances of that if you were to use that?

So in terms -- let me hit the ATM program first, and then I'll kick it to Paul Ito to talk a little bit a bit more about financing down at the utility and his thoughts on that. But in terms of the ATM, the ATMs out there, we have the ability to use it again, we'll be opportunistic in use of that. We may use it. We may not. It just again, depends on market conditions, but that's always an option for us.

And then lastly from me, American Savings Bank, you talked about selling the remaining roughly 10% stake of that. Is that assumed in your financing plan? Or how should we think about the timing of that potential sale?

So we still intend to divest that remaining 9.9% in calendar year 2026. Again, just depends on market conditions, how the bank is doing, et cetera. So we continue to look at that regularly. And again, we do have plans to divest that this year.

Your next question comes from the line of James Ward with Jefferies.

Congratulations, Paul. And Scott wishing you all the best. In terms of the PBR rebasing, what should we think about in terms of what's actually in that upcoming March 6 joint proposal. You've spoken to it at a high level, but the 2 to 3 most material elements may be target revenue methodology, PIM redesign of a follow-up on that, et cetera? How should we be thinking about what's in there?

Yes, James, I think we've described the high-level elements of what we're trying to work through. including the inflationary adjustment factor, having a true-up mechanism as opposed to the current structure. Looking at the PIMS and making sure the PIMS are nice and tight in terms of our ability to actually influence outcomes as well as also the potential return from those PIMs if we show that we have truly performed well there. We've also mentioned in the past looking at expanding the scope of EPRM, the exceptional project recovery mechanism. So those are the key elements I'd say.

Okay. Got you. I have a follow-up on the pen but just first, in terms of like rebasing outcome, for risk just described this as the final extension. And what are the specific triggers that we should think about in terms of what would cause you to pivot back to a traditional 2027 test year rate case a second half '26. Like how are you managing the risk of that Jan 2027 new rate states slipping?

James, let me hand it over to Joe Viola at the utility. He's our Senior Vice President, overseeing our regulatory affairs.

The March 6 day is when we'll be submitting the rebasing proposal with one of the PBR stakeholders, Ulupono, as Scott had mentioned. The commission after that will just take a look. We figure in about 30 days. They'll make sure that everything as a formal matter administratively is in there that they expect and then give us an order to proceed with the rest of the process. We'll make -- the only thing that would cause us to pivot to a 2027 test year rate case is if that rate basing falls over denied.

Got it. Okay. That's very helpful. On the per design, we actually hosted a call recently, we posted a number of the past year, Hawaii-focused former regulators, other people attached to the political process and so on. And they were as clear for me, which I'm sure you guys already would be aligned with and happy to hear, but reiterating 150 to 200 basis points of incremental earnings power above your authorized ROE with the original intention for the PIMS and that's coming from on high. With that in mind, and given how the initial ones were often designed with things that were outside of your control, unfortunately. And also the imbalances in terms of asymmetry in terms of downside and upside. What -- on the PIM redesign, what does a more meaningful package look like to you guys in practice? Like what would the top 2 or 3 PIM changes be that you're pursuing? And how should we think about that symmetry in terms of upside versus downside?

This is Joe again. I think in terms of the ultimate reward opportunity, we think -- we believe that the commission should eventually support what they said in the past at 150 to 200 basis points, and we'll support that. We think there's other support for that as well. In terms of what we want to see going forward, we've learned a lot, living under the first 5 years of PBR. So when we say more meaningful package, we want to make sure that the targets are reasonably set and the means to achieve them are reasonably within our control. That's the important part. We're going to look going forward, as Scott mentioned, we'll be discussing with the specific topics and specific priorities would be for those incentives. But it's -- to us, it's the design to make sure that we can achieve them. And that's our main goal. .

Yes. The only other thing I'd add, James, is we're also interested to see if we can actually reduce the total number of PIMS because that has been a bit of a challenge over the last few years managing a long list of PIMS.

Got it. That's very helpful. Last question I have is the wildfire platform here, legislation passed. So you're now guiding the 8 to 24 months for the liability cap process. wildfire fund thereafter. We obviously saw the PUC report at the end of the year to the legislature. So bringing it back right to the 24 months back to 2026, what are the 2026 milestones we should be watching for liability cap, wildfire fund, securitization. It sounds like wildfire fund might not be on there. I'll leave it open, but I think that's what the other part people would like to on.

Yes, James. So as you noted, right, at the end of last year, the PUC filed their report on the fund, the potential for a fund. And in that, they indicated that it should actually be taken up after the PUC rule-making process for a limitation of liability happens, which the PUC has indicated that, that would be the 18- to 24-month period beginning -- roughly the beginning of this year. So as far as critical milestones, I mean a state agency rule-making process, 18 to 24 months, it will involve a lot of information gathering, data gathering. And eventually, they would file a proposed set of rules for comments and review and then they would go back and take those into account and issue the final. Once the final rule making is proposed, there is a certain period of time for the governor to actually be able to weigh in with his own comments. And at that point, once that is resolved, then the rule becomes final. So those are the high-level steps in the rule-making process. As far as other critical milestones this year, it's really all on that PUC rule-making process. And I think I would also say there's nothing that would be teed up for example, in front of the legislature this year.

Got it. Okay. I appreciate it, and see you next week at the conference.

That concludes our question-and-answer session. I will now turn the call back over to Scott Seu for closing remarks. .

I just want to close by saying again to all of our investors and interested stakeholders. Thank you for your support. 2025, like I said, was a year where we felt we really -- we're able to make a lot of progress in terms of advancing our key initiatives. I also want to one more time, just thank Scott DeGhetto for his service as HEI's CFO, coming to us shortly after the Maui wildfires in 2023. And Paul Ito, I welcome you back to our team at HEI. So with that, thank you very much.

Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.