#1State of Hawaii General Obligation Bonds of 2021 $1,900,325,000* Investor Presentation September 21, 2021 *Preliminary, subject to change STATE UA 1959 HAWAI O-KA-AINA PONO#2STATE OF TATE O 1959 HAWAI Disclaimer The Investor Presentation you are about to view is provided as of September 21, 2021 for a proposed offering of the State of Hawaii's ("the State") General Obligation Bonds of 2021, Series GD, Series GE, Series GF, Series GG, Series GH, Series Gl and Series GJ. If you are viewing this presentation after that date, events may have occurred that have a material adverse effect on the financial information presented. Neither the Underwriters mentioned in this presentation (the "Underwriters"), nor the State have undertaken any obligation to update this presentation. The information presented is not warranted as to completeness or accuracy and is subject to change without notice. You agree not to duplicate, copy, download, screen capture, electronically store, or record this presentation, nor to produce, publish or distribute this presentation in any form whatsoever. This Investor Presentation is provided for your information and convenience only. Any investment decisions regarding the State's Series 2021 Bonds should be made only after a careful review of the complete Preliminary Official Statement. This Investor Presentation does not constitute a recommendation or an offer or solicitation for the purchase or sale of any security or other financial instrument or to adopt any investment strategy. Any offer or solicitation with respect to the State's Series 2021 Bonds will be made by means of a Preliminary Official Statement or Official Statement that will describe the actual terms of the State's Series 2021 Bonds. In no event shall the State or the Underwriters be liable for any use by any party of, any decision made or action taken by any party in reliance on, any inaccuracies or errors in, or any omissions from, the information contained herein and such information may not be relied upon by you in evaluating the merits of participating in any transaction mentioned herein. These materials have not been prepared with a view toward public disclosure under applicable securities laws or otherwise, and may not be reproduced, disseminated, quoted or referred to, in whole or in part. These materials may not reflect information known to other professionals in other business areas of the Underwriters and their affiliates. The Underwriters makes no representations as to the legal, tax, or accounting treatment of any transactions mentioned herein, or any other effects such transactions may have on you and your affiliates or any other parties to such transactions and their respective affiliates. You should consult with your own advisors as to such matters. Nothing in these materials constitutes a commitment by the Underwriters or any of their affiliates to enter into any transaction. Past performance is not indicative of future returns, which will vary. Transactions involving the State's Series 2021 Bonds may not be suitable for all investors. You should consult with your own advisors as to the suitability of such securities or other financial instruments for your particular circumstances. Additional information is available upon request. Clients should contact their salesperson at, and execute transactions through, the Underwriters or their affiliated entities qualified in their home jurisdiction unless governing law permits otherwise. Neither the State, Underwriters or their affiliates provide tax advice. Any statements contained herein as to tax matters were neither written nor intended to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on such taxpayer.#3Transaction Summary 1 Issuer: Issue: Ratings: State of Hawaii $1,900,325,000* Taxable General Obligation Bonds S&P: AA+ (Stable); Moody's: Aa2 (Positive); Fitch: AA (Stable) The Full Faith and Credit of the State of Hawaii Security: Series: Par Amount: Purpose: Amortization:* Series GD $600,000,000* Series GE $200,000,000 New Money Refund BANS 2022 - 2041 Refunded Bonds:* Tax Status: Call Provision:* Senior Manager: Co-Senior Managers: Co-Managers: Pricing:* Closing:* * Preliminary, subject to change N/A Series GF GJ $1,100,325,000* Advance Refunding STATE OF 1959 HAWAI 2022 - 2041 N/A 2022 - 2033 Please see Appendix I of the Preliminary Official Statement Federally Taxable; State of Hawaii Tax-Exempt To be Determined BofA Securities Citigroup, Morgan Stanley Jefferies, RBC Capital Markets Indications of Interest: September 28, 2021 Institutional Order Period: September 29, 2021 October 14, 2021#42021 Plan of Finance Amortization OF STATE O 1959 HAWAI Series Par Amount Tax Status Purpose Principal Due Call Option General Obligation Bonds of 2021 2021 GD $600,000,000 Taxable 2021 GE $200,000,000 Taxable 2021 GF $27,500,000 Taxable 2021 GG $86,800,000 Taxable New Money BANS Refunding October 1 TBD October 1 TBD Refunding February 1 None Refunding August 1 None Taxable Refunding August 1 None 2021 GH $141,800,000 2021 GI $108,000,000 Taxable Refunding 2021 GJ $736,225,000 Taxable Refunding August 1 None August 1 TBD Maturity 2022 $25,215,000 $8,680,000 $27,500,000 2023 25,885,000 8,715,000 $86,800,000 $141,800,000 -- -- 2024 26,330,000 8,760,000 -- $108,000,000 2025 26,535,000 8,825,000 2026 26,805,000 8,915,000 2027 27,130,000 9,025,000 -- 2028 27,510,000 9,155,000 2029 27,955,000 9,300,000 -- 2030 28,435,000 9,460,000 2031 28,955,000 9,635,000 2032 29,525,000 9,820,000 -- -- 2033 30,145,000 10,030,000 $77,220,000 78,000,000 78,945,000 80,060,000 -- 81,350,000 82,755,000 84,265,000 85,910,000 87,720,000 2034 30,820,000 10,255,000 -- 2035 31,540,000 10,490,000 2036 32,310,000 10,750,000 2037 33,130,000 11,020,000 -- -- 2038 34,010,000 11,315,000 2039 34,940,000 11,625,000 -- -- 2040 35,910,000 11,945,000 2041 36,915,000 12,280,000 Total $600,000,000 $200,000,000 $27,500,000 $86,800,000 $141,800,000 $108,000,000 $736,225,000 2 Preliminary; subject to change.#5HAWAI Introduction The State's Economic and Financial Metrics are Returning to or Exceeding Pre-Pandemic Levels Monthly Economic Indicators (1) Unemployment Rate Single Family Home Prices (Oahu) Single Family Home Sales (Oahu) Visitor Arrivals Visitor Expenditures June 2019 3.1% $800,000 327 June 2020 14.4% $770,000 June 2021 7.7% $979,000 OF STATE O 947,112 $1,630,780,000 302 17,068 $107,000,000 (5) 451 791,053 $1,437,100,000 -5.4% (Actual) 1959 Council on Revenues Projections (2) FY 2020 Growth Rate FY 2021 Growth Rate 4.1% 3.0% -5.4% (Actual) -11.0% 8.1% (Actual) General Excise Tax $262,819,000 $220,148,000 $294,303,000 Monthly State Tax Revenues (1) Personal Income Tax (Withholding) Transient Accommodations Tax $164,776,000 $42,571,000 General Fund Revenues $589,649,000 $150,190,000 $5,302,000 $478,090,000 $185,823,000 $44,267,000 $735,357,000 Pension (3) OPEB (3) Market Value of Assets $17.2 billion Fund Balances $1.8 billion $18.0 billion $2.3 billion $21.4 billion $3.7 billion EBRF Balance $378.2 million $58.9 million HHRF Balance $183.8 million $191.3 million Reserves and Liquidity (4) General Fund Balance $752.1 million $991.7 million Total EBRF, HHRF and GF Balance $1.3 billion $1.2 billion $319.5 million $187.2 million $1,249.9 million $1.8 billion State Treasury Pool $7.4 billion $7.3 billion $9.6 billion 3 ཋསེཏེཝཧེ (1) Source: State of Hawaii Department of Business, Economic Development & Tourism - Monthly Economic Indicators. (2) Forecasts: State of Hawaii Department of Taxation Council on Revenues; Actuals: State of Hawaii Department of Budget and Finance. (3) State of Hawaii Employee Retirement System and Employer - Union Health Benefits Trust Fund. Pension market value is preliminary and subject to adjustment. (4) State of Hawaii Department of Budget and Finance. Unaudited for FY 2021. (5) Estimated.#6STATE O OF 1959 HAWAI ■ Health Update The State has a Comprehensive and Strategic Approach for Managing Health Issues The State and each of Hawaii's Counties are requiring their employees to get vaccinated or tested weekly The U.S. Department of Defense and many large companies will soon require vaccinations or weekly testing The State is implementing a SMART Health Card which operates using QR code for individuals that received vaccination in Hawaii and can be easily used for entrance into establishments, such as restaurants The State is adding temporary hospital capacity and is bringing additional healthcare workers from the mainland to assist with the near-term increase in hospitalizations Statewide restrictions include requiring masks indoors and limiting social gatherings to 10 people indoors and 25 outdoors All of Hawaii's four counties have adopted emergency orders and/or rules limiting the size of indoor and outdoor gatherings and in some cases requiring proof of vaccination The Safe Travels program, which has allowed for over 5 million visitors to come to Hawaii safely since October 2020, was expanded to allow travelers to bypass the 10-day quarantine if they have been fully vaccinated - 100% 100 New and Probable COVID-19 Cases per 100k (1)(2) 0 50 Apr-20 May-20 Mar-20 Jun-20 Hawaii Jul-20 Aug-20 U.S. Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Vaccination Rate (At Least One Dose) (1) 50% 0% Dec-20 Hawaii Jan-21 Feb-21 Mar-21 U.S. Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Vaccination Rate by Age Visitors without proof of vaccination can continue to qualify for a quarantine exemption with a negative COVID-19 test 100% 80% 91.8% 100.0% 100.0% 96.8% 90.0% ■Completed Initiated 82.0% 72.9% 66.4% 68.4% 81.3% 60% 72.2% 63.3% 56.5% 40% 53.9% 20% Not Eligible for Vaccination 0% 75+ 65-74 50-64 40-49 30-39 18-29 12-17 0-11 Sources: CDC COVID Data Tracker. State of Hawaii Department of Health. (1) 7-Day moving averages. 4 (2) Probable infections include people who never received a confirmatory test but are believed to have had the virus because of their known exposure and symptoms or because of a positive antigen test.#7OF STATE O 1959 HAWAI Returning Tourism to Hawaii The State Successfully Managed the Return of Tourism to Hawaii In July 2021, total passenger arrivals reached 89% of July 2019 levels and domestic passengers were 112% of July 2019 levels ■In July 2021, domestic and international air seats were at 118.1% and 2.1% of 2019 levels, respectively ■ Hotel occupancy rose to 82% by July 2021, up from 24% in December 2020 and almost matching July 2019 occupancy levels of 85% ■ Hotel room RevPar rebounded in July 2021 to $303, dramatically higher than the December 2020 RevPar of $69 and even surpassing the July 2019 level of $260 ■Many hotels are using the opportunity to reinvest and improve their facilities Hotel Occupancy January - July (2019 vs. 2021) 100% 80% 60% 40% 20% 0% Jan Feb Mar Apr May Jun Jul ■2019 2021 Total Passenger Arrivals (1) 50,000 5 40,000 30,000 20,000 10,000 له Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 -2021 Domestic Passenger Arrivals (1) 50,000 40,000 30,000 20,000 10,000 Sources: Hawaii Department of Business, Economic Development & Tourism - Monthly Economic Indicators & Tourism Data Warehouse. (1) 7-Day Moving Average. لله m Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2021#8STATE O OF 1959 HAWAI Diversified Economy The State's Labor Market is Diversified and Improving ◉ Hawaii's economy has continued to diversify, with 84% of economic activity in non-tourism sectors in recent years (compared to 67% in 1988) Federal (including military), state and local government are stable components of the economy ■ Strong real estate market with increasing prices and sales volume ■ The construction industry remains strong, with large public and private sector capital projects ongoing The State's unemployment rate increased dramatically at the onset of the pandemic but has steadily declined with increased economic and tourism activity and as of August 2021 is at 7.0% Hawaii Nonfarm Employment Base (First 7-Months of 2021) (1) Mining, Logging, Military and Construction 9.2% Government 19.1% Other Services. 3.6% 6.0% Manufacturing 1.8% Trade, Transportation, and Utilities 16.7% Information 1.1% Financial Activities 4.4% Leisure & Hospitality 13.9% Professional & Business Services Education & Health 11.1% Services 13.2% Unemployment Rate (Seasonally Adj. 2016 to August 2021) 25% August 2021 7.0% 5.2% 6 (1) Sources: State of Hawaii, Department of Labor and Industrial Relations. U.S. Bureau of Economic Analysis. U.S. Bureau of Labor Statistics. State of Hawaii Department of Business, Economic Development & Tourism. Preliminary. Source: State of Hawaii Department of Budget and Finance. Jan-16 Jul-16 Jan-17 20% Hawaii U.S. 15% 10% 5% 0% Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21#9Real Estate Market and Development OF STATE O 1959 HAWAI Home Prices Continue to Rise; Commercial, Residential, and Public Sector Projects are Planned or Underway Single Family and Condo Home Sales Data (% Change Between First 8 Months of 2020 and 2021) Significant Capital Investment in Public Projects Single Family Homes Condo Homes Airports Island Closed Sales Median Price Closed Sales Median Price Oahu 26.8% 20.2% 67.9% 8.1% Honolulu Harbor New Aloha Stadium Maui 43.6% 29.3% 98.0% 11.3% Hawaii 36.8% 20.5% 101.6% 24.3% Rail System (HART) Wastewater Kauai 78.1% 37.4% 119.8% 15.4% Water Source: Hawaii Island Realtors and the Kauai Board of Realtors, the Honolulu Board of Realtors, and the Realtors Association of Maui. Major Commercial/Residential/Hospitality Developments Building Permits Issued from August 2020 July 2021 Over $50 Million Island Property $2.7 billion planned for major system-wide projects through FY 2026 $850 million modernization plan $350 million development of stadium entertainment district $12 billion rail transit system on Oahu Honolulu plans to spend $2+ billion over the next 5 years Honolulu BWS has identified $810 million of CIP through FY 2024 Source: Public news and Official Statements. Value of Private Building Permits Issued ($ in Millions) (1) Value of Hawaii Private Building Permits Increased 45.4% During First Half of 2021 $350 ■Residential ■Commercial Additions & Alterations Oahu Koula Туре Oahu Hoopili Hawaii Kona Village Resort Oahu The Central Ala Moana Residential Permit Value ($ in Millions) Residential $220.4 $300 Oahu Sky Ala Moana Hotel 200.0 Oahu Koa Ridge Oahu Victoria Place Maui Kihei High School Residential 155.3 $250 Residential 123.1 Education 110.0 $200 Oahu Mililani Solar Maui Makena Golf & Beach Club Residential 71.1 Residential 66.0 $150 Oahu Waiawa Solar Res/Comm 64.7 $100 Oahu Turtle Bay Resort Hotel Oahu Halewaiolu Senior Residences Commercial 56.0 Commercial 56.0 $50 Residential 54.5 Hotel 54.1 $0 54.1 7 (1) Sources: State of Hawaii Department of Business, Economic Development & Tourism and County Building Departments. 12-month rolling average basis. Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21#10HAWAI Federal and Military Presence in Hawaii Federal and Military Programs are Important Parts of the Economy OF STATE O ■The total compensation of federal government employees in Hawaii was about $9.3 billion in 2020, up 1.6% from the previous year ■During the current COVID-19 pandemic, defense spending in Hawaii has remained stable, sustaining 49,000 local jobs ■ While COVID-19 affected Hawaii's tourism industry, military service members and families continued to utilize local businesses and services helping to support the Hawaii economy ■FY 2019 direct Department of Defense spending on payroll and contracts totaled $7.5 billion in Hawaii, the second highest of any state in the nation, in terms of spending to GDP ratio at 7.7% ■ Hawaii was allocated COVID-19 related federal funding of $12.5 billion in 2020 and $6.9 billion in 2021 1959 - Federal Contract Awards in Hawaii (FY 2015 – 2019) Billions $3.0 $2.5 $2.0 $1.5 $2.5 $2.2 $1.0 $2.0 $1.8 $1.9 $0.5 $0.0 2015 2016 2017 2018 2019 2020 COVID-19 Federal Funding Coronavirus Preparedness and Response Families First Coronavirus Response CARES Paycheck Protection Program & Health Care Enhancement Executive Action 2021 COVID-19 Federal Funding 2020 Total Consolidated Appropriations Act American Rescue Plan Act of 2021 - Total Coronavirus State Fiscal Relief Fund Coronavirus Local Fiscal Relief Fund Education Coronavirus Capital Projects Fund All other programs 2021 Allocation Amount ($MM) $67.0 479.4 7,887.4 3,644.1 374.5 $12,452.4 Amount ($MM) $1,384.6 5,537.3 1,641.6 518.2 577.7 115.3 2,684.6 $6,921.9 00 8 Sources: U.S. Bureau of Economic Analysis and U.S. Department of Defense. Hawaii Department of Business, Economic Development & Tourism.#11State Government Structure Hawaii has a Centralized State Government with Strong Executive Authority ■ The Governor's office has significant powers and scope - Governor and the Lieutenant Governor are the only directly STATE O OF 1959 HAWAI elected executive officials (same ticket) - Executive authority to control spending through ability to — restrict, delay or suspend appropriations Broad powers of appointment Authority to issue Emergency Proclamations ■ State Legislature has the ability to increase taxes and authorize debt without voter approval ■The State's Constitution does not provide for voter driven initiatives ■ The Council on Revenues ("the Council") provides independent quarterly revenue forecasts that facilitate better budget planning and execution Biennium budgeting and multi-year financial and capital planning are additional strengths ■ Constitutional requirements for positive ending General Fund balance and either level debt service or level debt 9 Hawaii's G.O. Bonds have a clear first lien priority on all General Fund balances#12STATE O OF 1959 HAWAI State Revenues The State's Tax Structure Provides Stable Delivery of Tax Revenue ■ The General Excise Tax (GET) and Individual Income Tax comprise over 89% of the State's annual General Fund tax revenues The GET is a broad tax based on the gross income that businesses generate in the State ■■ GET is levied at a low rate and has been a stable source of revenue to the State for several decades Unlike most other state sales taxes, Hawaii's GET applies to revenue generated on services in addition to its broad application to revenue from the sale of goods Transient Accommodations Tax (TAT) accounted for only about 2% of General Fund Revenues in FY 2021 and is expected to grow in FY 2022 State General Fund Tax Revenue Composition (FY 2021)(1) Public Service Companies Liquor and. Permits 0.6% Insurance Premiums 2.3% Inheritance and Estate 0.4% 1.7% 1.0% Tobacco and Licenses TAT 2.1% Miscellaneous 0.2% Conveyance 0.4% General Excise and Use 42.2% 20-Year History of General Fund Tax Revenues Millions Income Individuals 46.4% Income Corporations 2.6% $8,000 $7,000 $6,000 All General Fund Revenues GET Collections Individual Income Tax Collections (net) $5,000 $4,000 $3,000 $2,000 $1,000 $0 (2) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Fiscal Year 2017 2018 2019 2020 2021 10 (1) (2) Sources: Hawaii Department of Business, Economic Development & Tourism. Hawaii Department of Taxation. The Tax Foundation. Unaudited. The State's cash basis statements are not directly comparable with the State's audited financial statements, which are accrual basis. The State had two collections for personal income tax in FY 2021.#13Council on Revenues Forecast Recent Council Forecasts Show Revenue Outlook Returning to Pre-Pandemic Levels OF STATE O The Council's September 2021 forecast increased FY 2022 revenue growth to 6.3% from its May 2021 forecast of 3.0% and maintained 4% annual growth for Fiscal Years 2023-2028 This change increased the General Fund Financial Plan by $1.58 billion for FY 2022-2026, which was in addition to the $3.1 billion that was added as a result of the upward revision in the Council's May 2021 forecast The upward revision in the 2022 forecast is due to robust collections of general excise and income taxes as well as increased tourist arrivals and consumer spending so far in 2021 The Council acknowledges the level of uncertainty regarding COVID-19 and reduction in further Federal stimulus spending 1959 Council on Revenues Forecasted Tax Revenues (1,2) Actual Sep 21 Forecast Millions $10,500 $9,900 Jan 20 Forecast $9,300 . Mar 20 Forecast $8,700 May 20 Forecast $8,100 Sep 20 Forecast $7,500 Jan 21 Forecast $6,900 • Mar 21 Forecast $6,300 . May 21 Forecast $5,700 2019 2020 2021 2022 2023 Sources (1) 11 (2) Forecast: Department of Taxation Council on Revenues. Actual: Hawaii Department of Business, Economic Development & Tourism. 2024 2025 2026 2027 2028 Fiscal Year HAWAI#14HAWAI General Fund Financial Plan Assumptions/Details OF STATE O The State's Updated Multi-Year General Fund Financial Plan is Based upon the Recent September 2021 Council on Revenues Forecast 1959 ■ Expenditures are based upon all Legislatively approved budgets in 2021 - Also incorporates 2021 Legislative Session tax measures, Special Funds and Emergency Budget and Reserve Fund transfers as well as working capital borrowing Out year expenditures for Executive branch reflect continuation of recurring budget costs with increases for projected debt service, pension contribution, FICA, employee health benefits, OPEB and Medicaid costs Other budgets (Judiciary, Legislative, Office of Hawaiian Affairs) assume continuation of recurring budget costs Specific appropriations include $390 million for additional OPEB prefunding contributions and $250 million for an additional deposit into the Emergency Budget and Reserve Fund Improved Council on Revenues forecast allows for significant planned actions and set asides to be included in the updated Financial Plan (requires further Legislative approval and possibly federal approval due to receipt of COVID-19 funds) - Proposed voluntary set asides include a $1.05 billion deposit to the State's Emergency Budget Reserve Fund later this fiscal year and $250 million in OPEB payments above the ARC requirement in FY 2023 among other one-time expenditures The State has the flexibility to not implement these items in the event that revenue forecasts change ■ Before taking into account the large proposed voluntary reserve and OPEB deposits, the updated General Fund Financial Plan projects recurring revenues in excess of recurring expenditures each and every year through FY 2027 This will provide the State considerable flexibility in its ongoing financial management in the event that future Council revenue projections are reduced 12 Sources: Department of Budget and Finance.#15General Fund Financial Plan as of September 8, 2021 OF STATE O 1959 HAWAI The State's General Fund Financial Plan Shows Recurring Budgetary Balance and Record Reserves Adj. Act. FY 2020 Est. Est. Est. FY 2021 FY 2022 FY 2023 Est. FY 2024 Est. FY 2025 Est. FY 2026 Est. FY 2027 ($ in millions) REVENUES Executive Branch: -6.3% Tax revenues $6,694.7 8.1% $7,250.4 Nontax revenues 1,562.2 Judicial Branch revenues 28.2 1,721.5 31.1 Other revenues/adjustments: TOTAL REVENUES $8,285.1 $9,003.0 6.3% $7,707.0 740.3 27.2 (41.1) $8,433.4 4.0% $8,015.3 750.7 27.2 (105.1) $8,688.1 4.0% $8,335.9 767.1 27.2 4.0% $8,669.4 783.8 27.2 4.0% $9,016.1 887.0 27.2 4.0% $9,376.8 907.8 27.2 $9,130.3 $9,480.3 $9,930.3 $10,311.8 EXPENDITURES Executive Branch: Operating CIP Specific appropriation/CB Other expenditures/adjustments Sub-total Exec Branch Legislative Branch Judicial Branch OHA Counties Lapses TOTAL EXPENDITURES REV. OVER (UNDER) EXPEND. CARRY-OVER BALANCE (DEFICIT) Beginning Ending Estimated EBRF Balances (1): EBRF Fund Balance as % of Prior Year Revenues (State Policy Target of 10%) 13 8,024.0 8,047.9 7,663.9 7,758.6 8,298.5 8,410.4 8,628.9 8,576.8 159.5 829.4 15.7 1,064.6 8,163.5 42.6 8,877.3 41.1 8,744.2 172.2 3.1 163.0 41.1 164.9 46.4 1,174.9 8,979.9 41.4 47.0 639.4 8,984.9 41.9 47.1 631.0 9,088.5 41.9 47.1 628.0 9,304.0 41.9 47.1 628.1 9,252.0 41.9 165.3 165.8 166.0 166.0 166.0 3.0 2.3 2.3 2.3 2.3 2.3 2.3 (346.9) $8,034.5 (328.5) $8,755.9 (80.0) $8,872.5 (80.0) $9,108.9 (80.0) $9,114.9 (80.0) $9,218.7 (80.0) $9,434.2 (80.0) $9,382.2 250.6 752.1 $1,002.7 247.2 1,002.7 $1,249.9 (439.0) 1,249.9 $810.9 (420.9) 810.9 $390.0 15.5 390.0 $405.5 261.7 405.5 $667.2 496.2 667.2 929.7 1,163.3 $1,163.3 $2,093.0 $58.9 0.74% $319.5 3.86% $1,374.7 15.27% $1,382.6 16.39% $1,390.1 16.00% $1,397.4 15.30% $1,404.4 $1,411.6 14.81% 14.21% 1) EBRF adds $250M in FY 2021 per Act 6/SSLH21; adds $1,050M in FY 2022. Sources: Department of Accounting and General Services; Department of Budget and Finance. Note: Due to rounding, details may not add to totals.#16HAWAI Reserves and Liquidity The State Continues to Maintain Strong Reserves and Sizeable General Fund Ending Balances Millions Historical Fund Balances OF STATE O 1959 $2,000 $1,800 HHRF EBRF O General Fund Ending Balance $1,756.6 5% of Prior FY GF Revenues 10% of Prior FY GF Revenues 15% of Prior FY GF Revenues $1,600 $1,387.2 $1,400 $1,315.6 $1,303.9 $1,314.1 $1,241.9 $1,200 $1,249.9 $1,000 $893.8 $750.3 $752.1 $800 $1,027.8 $991.7 $600 $378.2 $375.7 $400 $319.5 $200 $100.9 $311.3 $58.9 $186.9 $182.1 $177.9 $183.8 $191.3 $187.2 $0 2016 2017 2018 2019 2020 2021 (1) Fiscal Year Emergency Budget and Reserve Fund ("EBRF") $345 million was transferred to the General Fund in FY 2020 ■FY 2021 ending balance of $319.5 million, which includes a $250 million increase from FY 2020 ■ Policy target at 10% of prior fiscal year revenues - FY 2021 EBRF balance was 3.86% of FY 2020 General Fund revenues Hawaii Hurricane Relief Fund ("HHRF") Fund was not used to balance the budget during COVID-19 FY 2021 market valuation of $187.2 million While not a formal budgetary reserve, HHRF remains available as a flexible liquidity source, if needed Investment income goes to the General Fund 14 (1) Unaudited.#17Pension FY 2021 Preliminary Results have Improved Pension Funding Levels over FY 2020 Hawaii ERS Key Metrics STATE O OF 1959 HAWAI Enacted Higher Rates (Employer Contributions) (1) Hawaii ERS Asset Valuation FY 2020 $18.0 billion General Police & Fire FY 2017 17% 25% Investment Return 1.3% FY 2018 18% 28% UAAL $14.6 billion FY 2019 19% 31% Funded Ratio 55.3% FY 2020 22% 36% Funding Period 26 years FY 2021 24% 41% Projected ERS Funded Ratio (FY 2020) Investment returns for FY 2021 exceeded the State's target return of 7.0% and show a preliminary asset valuation increase to $21.4 billion (2) 100.00% 90.00% These returns will further reduce the ERS Net Pension Liability 80.00% 70.00% ■ Act 17/2017 (SB936) employer contribution increases are fully implemented 60.00% ■ Stress tests, conducted annually since 2017, show system is sustainable in a low-return environment 50.00% 40.00% ■ For further information, please visit: https://ers.ehawaii.gov (1) (2) Contributions as % of payroll. Preliminary and subject to adjustment. Note: The graphic includes contributions for both the State and counties. Source: Employee's Retirement System of the State of Hawaii. 2020 2025 2030 2035 2040 2045 Fiscal Year 15#18OPEB The State Continues to Build a Substantial Balance in its OPEB Trust Fund OF STATE O 1959 HAWAI ◉ Act 268, Session Laws of Hawaii 2013 requires the State to pre-fund its OPEB costs and pay down the unfunded actuarial accrued liability over a 30-year period Under the Act, increasing OPEB prefunding contributions were phased in through FY 2018 with 100% of the ARC payment made beginning with FY 2019 The State made its full ARC payment for FY 2021 and an additional prefunding contribution of $390 million, making the total prefunding contribution for FY 2021 $827 million State OPEB prefunding contributions and investment returns resulted in a State OPEB Trust Fund balance estimated to be $3.7 billion at the end of FY 2021, up from $2.4 billion at the end of FY 2020 The State's FY 2021 OPEB contributions and investment returns are expected to increase the funded ratio above the FY 2020 funded ratio of 21% EUTF Prefunding Contributions (State Only) Millions EUTF Balance and Funded Ratio (State Only) $900 $827 $4,000 $800 Prefunding Requirements $3,500 $700 ■Total Prefunding Contributions $3,000 $600 $2,500 $500 $430 $430 $433 $433 $437 $2,000 $3,733 $400 $333 $337 $297 $1,500 $300 $250 $230 $2,371 $1,000 $200 $164 $1,829 $117 $1,295 $83 $500 $100 $880 $481 $221 $0 $0 2015 2016 2017 2018 Fiscal Year 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021(1) Fiscal Year 16 (1) Source: Hawaii Employer-Union Health Benefits Trust Fund. Estimated. Includes a $390 million prefunding contribution accrued as of June 30, 2021 and paid in July 2021.#19Treasury Portfolio The State's Liquidity Provides Future Financial Flexibility Portfolio Breakdown by Security Type (6/30/2021) Demand Deposits $1,833,207,300_ 19% U.S. Government Agency $4,820,460,776_ 50% Bank CDs $414,938,179 4% U.S. Treasury $2,535,391,905 27% Portfolio Breakdown by Category, June 2019, 2020 and 2021 6/30/2020 Portfolio U.S. Government Agency Bank CDs U.S. Treasury Demand Deposits (1) Total Cash & Investments Source: Hawaii Department of Budget & Finance. Unreconciled. 17 (1) 6/30/2019 $4,470,845,979 $2,734,758,309 6/30/2021 $4,820,460,776 1,720,628,864 1,596,510,758 414,938,179 664,417,411 1,597,103,595 2,535,391,905 533,047,374 1,361,904,167 1,833,207,300 $7,388,939,628 $7,290,276,829 $9,603,998,160 OF STATE O 1959 HAWAI#20HAWAI Debt Management OF STATE O The State has a Long Record of Conservative Debt Management Practices that are Governed by a Formal Debt Management Policy ■ Principal and interest on G.O. Bonds are a first charge on the General Fund and have a pledge of full faith and credit ■G.O. Bonds have conservative Constitutional constraints on debt structure Limits final maturity to 25 years, and principal can be deferred no more than 5 years G.O. Debt Service Profile (1) Millions $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 1959 68% Principal Repayment in 10 years ■ Principal Interest - Requires level debt service or level principal amortization Maximum annual debt service can be no more than 18.5% of the average of the prior three year General Fund revenues ■ No Statewide vote required for debt issuance ■ The State conservatively manages its debt portfolio Bonds issued with 20 year final maturity and level debt service - 2021 new money issuance has no principal deferral 100% fixed rate G.O. debt with no derivatives - 68% of principal amortizes over the next 10 years $- 2033 2034 2035 2036 2037 2038 2039 2040 2041 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Fiscal Year Debt Service as % of General Fund Revenues (2) 14% 12% 10% 8% 6% 4% 2% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Fiscal Year 2014 2015 2016 2017 2018 2019 2020 2021 18 (1) (2) Includes $63 million of reimbursable G.O. Bonds and excludes $200 million Bond Anticipation Notes. The State also has a de minimis amount of Certificates of Participation outstanding. Excludes reimbursable G.O. Bonds and Bond Anticipation Notes debt service. General Fund Revenues are net of Working Capital Borrowings and Reserve Fund transfers.#21HAWAI STATE O OF 1959 Investor Relations and Contact Information Please Join Us for a Live Online Investor Presentation on September 27, 2021 ■ On behalf of the State's syndicate, Morgan Stanley will host a live presentation via Zoom for institutional investors on Monday, September 27 at 2:00 PM Eastern ■To access the Zoom presentation please RSVP to [email protected] and [email protected] ■ The State requests that questions regarding its credit or financing also be submitted in advance by Wednesday, September 22, 2021 State of Hawai Investor Relations Home B&F DHHL Airports Harbors Highways DBEDT HHFDC UH Board of Regents E KOMO MAI Search a Welcome to the State of Hawai's investor Relations information page. We hope that you find the information helpful and beneficial for your needs. DIRECTOR OF FINANCE Craig Hira Type of Debe Department of Budget & Finance (BF) General Obigation Bonds Certificates of Participation Department of Hawaiian Home Lands (DHHL) Revenue Bonds Certificates of Participation Department of Transportation (DOT) Fach Moody's S&P 442 AAA STATE OF HAWAI'I Bond Sales Current Offerings ⚫Bond Sales Calendar NA NA NA State Financing Information Comprehensive Annual Financial Reports (CAFR) A AT NIA 3014 A NA Council on Revenues Quarterly Revenue Forecasts Department of Business. Economic Development and For questions, please contact the following individuals below or visit the State's investor relations website State of Hawaii, Department of Budget & Finance Rod Becker ([email protected], 808-586-1612) BofA Securities (Lead Bookrunner) Frank Lauterbur ([email protected], 213-345-9575) Department of Transportation - Airports Investor Relations Home B&F DHHL Airports Harbors Highways DBEDT HHFDC UH Board of Regents Welcome to the Department of Transportation - Airports investor relations web site. Type of Debt Fitch Moody's S&P Department of Transportation - Airports Credit Rating Search a STATE OF HAWAI'I Bond Sales ⚫ Current Offerings ⚫ Bond Sales Calendar State Financing Information ⚫ Comprehensive Annual Financial Reports (CAFR) ⚫ Council on Revenues Quarterly Revenue Forecasts ⚫ Department of Business, Economic Development and Tourism - Economic Data . Employees' Retirement Suctom 19 Additional information may also be found at: http://investorrelations.hawaii.gov/ (pictured)#22Conclusion Hawaii has a Resilient Economy with Growing General Fund Revenues, Prudent Financial Management and an Enduring Appeal Worldwide Napali Coast - Kauai Kona Coast - Hawaii Island 20 Honolulu Oahu Manele - Lanai STATE O OF 1959 HAWAI