#1* State of Hawaii General Obligation Bonds of 2020, Series GA, Series GB (Taxable) and Series GC (Taxable) $1,047,150,000* Investor Presentation October 2020 Preliminary, subject to change. STATE 1959 HAWAII UN ONO. MAU KE EX-O-KA AINA 1.KA.P#21 Disclaimer STATE OF 1959 The Investor Presentation you are about to view is provided as of October 13, 2020 for a proposed offering of the State of Hawaii's ("the State") General Obligation Bonds of 2020, Series GA, Series GB (Taxable), and Series GC (Taxable). 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 2020 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 2020 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 2020 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 2020 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. HAWAI#3Series 2020 G.O. Bonds Financing Summary* General Bond Information Series GA Series GB Series GC Issuer: Ratings: Security: Par Amount: Tax Status: State of Hawaii Moody's: Aa2 (Stable); S&P: AA+ (Negative); Fitch: AA (Stable) $147,150,000* Tax-Exempt The full faith and credit of the State of Hawaii $600,000,000* Taxable $300,000,000* Purpose: New Money New Money Principal Amortization: 2021* 2022 2025* Taxable Refunding of Direct Purchase BANS 2025 2040* Coupon Type: Fixed Fixed Call Option: TBD* Lead Manager: Fixed TBD* TBD* BofA Securities Co-Senior Manager: Co-Managers: Schedule Virtual Investor Presentation: October 19, 2020 Tax-Exempt Retail Order Period October 20, 2020* Taxable Indications of Interest: October 20, 2020* Pricing Date: October 21, 2020* Delivery Date: October 29, 2020* 2 Preliminary, subject to change. Morgan Stanley Citigroup, Jefferies, and Raymond James & Associates Total $1,047,150,000* Multiple Multiple 2021 2040* Fixed TBD* STATE OF 1959 HAWAI#4Update Since July Since the last financing, the State's economy has held steady Resilient Economy Pension OPEB Council on Revenues Projections STATE OF 1959 Monthly Unemployment Rate Building Permits Single Family Home Prices (Oahu) Single Family Home Sales (Oahu) Pre-Testing Start Date Federal COVID-19 Funding K-12 Education July 2020 13.4% (June) October 2020 12.5% (August) $233,994,000 (6-month average until May) $261,159,000 (6-month average until July) $797,000 (May) 248 (May) 8/1/2020 (Tentative) $8.1 billion Blended Learning $880,000 (September) 391 (September) 10/15/2020 (Firm) $10.1 billion Blended Learning Investment Returns Market Value of Assets Investment Returns Fund Balances 1.26% (FY 2020) $17.2 billion (FY 2020) 2.0% (FY 2020) $2.3 billion (6/30/2020) 6.9% (FY2021 YTD) $18.2 billion (As of 8/31/2020) 6.2% (FY2021 YTD) $2.4 billion (As of 8/31/2020) FY 2021 FY 2022 FY 2023-2026 -12.0% 12.0% 3.0%, 3.0%, 3.0%, 3.0% Budget Controls Budget Restrictions 7% Budget, 5% Contingency Restriction & Hiring Freeze Total Balances (1) FY2021 & FY2025 $753.5 & ($281.8) million 3 (1) Includes General Fund ending balance, Emergency & Budget Reserve Fund (EBRF) and Hawaii Hurricane Relief Fund (HHRF). -11.0% 8.5% 6.0%, 4.0%, 3.0%, 3.0% 5% Budget, 5% Contingency Restriction & Hiring Freeze $805.4 & $348.6 million HAWAI#54 STATE OF 1959 Health Update Hawaii is focused on protecting public health and revitalizing the economy Health Update ◉ Hawaii has the sixth-lowest per capita cases in the nation, with 12,937 confirmed cases of COVID-19 and 160 deaths in the State(1)(2) Hawaii faced an elevated case count in September; daily new cases reached a high of 18 per 100k (7-day moving average), but have since declined to 7, which is below the national average of 13 cases per 100k(3) ■ The State currently has 256 contact tracers and is in the process of expanding its capacity ■ The State is currently conducting 1,300-1,600 tests daily and has conducted nearly 265k in total Recent State Actions ■ The State and Counties are in the process of relaxing the stay at home orders with a measured approach ■ Effective October 15th, under a pre-travel testing program persons who have had test conducted within 72 hours of departure and can produce a negative test result may enter the State without having to quarantine ■ The Governor is coordinating with the four county mayors to ensure a coordinated and safe implementation of the pre-travel test program State of Hawaii - Daily New COVID-19 Cases (Per 100k 7-day Moving Average) 20 March 27th: Overseas and interisland 16 14-day quarantine begins 12 8 0 March-20 April-20 May-20 (1) https://www.cdc.gov/covid-data-tracker/#cases as of October 6, 2020. 4 (2) https://health.hawaii.gov/coronavirusdisease2019/ as of October 6, 2020. (3) https://globalepidemics.org/key-metrics-for-covid-suppression/ as of October 6, 2020. June-20 August 27th: Stay at home order on Oahu reinstituted for two weeks June 16th: Interisland quarantine lifted August 19th: Oahu limiting indoor and outdoor groups to no more than five individuals August 11th: Partial Reinstatement of Interisland quarantine (Maui, Kauai and Hawaii Counties only) Sept 8th: Stay at home. order on Oahu extended to Sept 24th Sept 24th: Parks, beaches, retail business and restaurants to re-open with restrictions on Oahu July-20 August-20 September-20 October-20 HAWAI#6Preparing for Tourism to Return to Hawaii 5 The public and private sectors are preparing for a safe return of tourism to Hawaii Currently Targeted for October 15th, the Pre-Testing Travel Program for Traveling to Hawaii Without a 14-Day Quarantine Will Include: ■ Passengers must provide proof of a negative COVID-19 test administered within three days prior to departure ■ Online application, "Safe Travels", became mandatory for all travelers on September 1st and verifies passenger contact information and collects health information needed for arrival screening and health monitoring ■ The online application will provide a QR code that gets scanned in at the airport ■ United, Hawaiian, American and Alaska Airlines have announced testing programs Airline Readiness and Capacity Expecting Hawaii to be a "favored destination", United Airlines added four weekly non- stops from Chicago to Kona on the Big Island and from Newark to Maui for summer 2021 ■ Hawaiian Airlines is expected to add 252 flights per week to the mainland Japan Airlines plans to start 4 non-scheduled flights between Tokyo and Honolulu ■ Southwest Airlines has emphasized importance of Hawaii routes and will resume schedule with waiver of quarantine requirements Hawaii Tourism Authority & Hotel Strategies ■ The State and Hawaii Tourism Authority (HTA) are working in conjunction with the tourism industry to ready the state for the re-opening to tourism with over $50 million marketing campaign currently underway in domestic and international markets ■ Efforts to establish a "Resort Bubble", which would allow participating visitors to travel between islands without a 14-day quarantine as long as they stay in clearly defined geographical areas, agree to tracking and ensure limited contact ■ The State is considering travel protocols for lifting the quarantine for visitors from Japan, Korea, New Zealand and Australia HAWAIIAN STATE OF 1959 HAWAI#7Visitor Industry Hawaii's visitor industry has been through many economic cycles and global events Visitors by Accommodation Type Visitor Diversification Hostel 0.5% Condo Hotel 12.9% B&B 0.6% Timeshare 15.0% Apt/Hotel 0.1% Others Vacation 0.5% Rental 16.8% Hotel 53.6% STATE Region U.S. Mainland 2009 Arrivals % of Total 2019 Arrivals 4,280,286 65.7% 6,879,215 % of Total 66.0% Japan 1,168,080 17.9% 1,545,806 14.8% Canada 346,583 5.3% 535,267 5.1% Oceania 136,717 2.1% 362,360 3.5% China 41,924 0.6% 93,703 0.9% Korea 51,353 0.8% 225,479 2.2% Europe 104,403 1.6% 138,550 1.3% Latin America 17,502 0.3% 25,957 0.3% Others 370,206 5.7% 618,658 5.9% Total 6,517,054 100.0% 10,424,995 100.0% Record of Resilience: Hawaii Visitor Arrivals 9/11 Terrorist (in millions) Attack SARS Epidemic Global Financial Crisis Japan's Tsunami 12 10 8 6 4 2 0 2000 6 (1) Projected. 2001 2002 Source: Hawaii Department of Business, Economic Development & Tourism. 2003 2004 2005 2006 2007 2008 2009 2010 2011 Volcanic Eruption COVID-19 Pandemic Actual Projected 2012 2013 2014 2015 2016 2017 2018 2019 2020 (1) 2021(1) 2022(1) 2023 (1) Calendar Year OF 1959 HAWAI#8Labor Market The State's labor market has improved in recent months STATE OF 1959 ■ The State's economy continues to diversify, with 84% of economic activity now in non-tourism sectors (compared to 67% in 1988) government are stable components of the economy ◉ Federal (including military), state and local ◉ Private health care as well as professional and business services have grown in recent years Hawaii Employment Base - 1st Quarter 2020(¹) Manufacturing. 2% Information 1% Agriculture .1% Other Services 4% Financial Activities 4% Private Education 2% Natural Resources, Trade, Transportation & Utilities 17% Mining, Construction Hawai'i's largest financial institutions are strong, supporting a robust and durable local business environment ■ Strong real estate market with stable prices and very low foreclosures supports the overall economy ■ The construction industry remains strong, with large public and private sector capital projects ongoing ■ Military presence provides important economic activity and security, and military payroll jobs have remained consistent over the past 20 years According to a Hawaii Business survey, 84% of businesses were open on July 8th; however, this number declined to 75% with the most recent stay at home order 5% Local Government. 3% State Government. 10% Health Care &. Social Assistance 7 (1) Source: State of Hawaii, Department of Labor and Industrial Relations, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics. Leisure & Hospitality 18% HAWAI Professional & Business Services 10% Federal (Civilian) Federal (Military) 10% 5% 8%#9Federal and Military Federal and military programs are important parts of the economy ◉ All branches of the U.S. military are represented in Hawaii In total, the defense industry provides over 102,000 jobs statewide with annual household incomes totaling $8.4 billion The Hawaii based Indo-Pacific Command is responsible for over 50% of global command activity and is essential to national security FY 2021 federal spending is expected to include more than $300 million for major military construction projects in Hawaii To date the State has received a total of $10.1 billion in COVID-19 related federal funding through the various stimulus bills UNITED STATES ARMY UNITED STATES AIR FORCE ITE UNI ED STATE UNITED MARINE OF 1959 HAWAI STAT ATE STATES CORPS Hawaii Military Payroll Jobs (1) (CY 2000 – 2019) COVID-19 Related Federal Funding 70,000 Federal Government Funding 60,000 Amount ($MM) 50,000 Small Business Administration Paycheck Protection Program $2,479 Coronavirus Relief Fund 1,250 40,000 Unemployment Insurance Supplement 2,408 30,000 IRS Stimulus Checks 1,227 20,000 Treasury Loan (Payroll Support Program) 315 10,000 Grants 1,349 0 Small Business Administration Economic Injury Disaster Loan 1,072 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Total $10,100 Source: U.S. Bureau of Economic Analysis and U.S. Department of Defense. (1) Includes reserves and National Guard. 8 (2) Source: Senator Brian Schatz's website.#10State Powers and Actions The State has a wide range of tools at its disposal to manage its finances STATE OF 1959 HAWAI Budgeting Sufficient Liquidity ■ The Governor has the executive authority to control spending by restricting, delaying or suspending appropriations, including managing labor through furloughs Although the State cannot make supplemental appropriations without legislative approval, the Governor can shift money within the budget ■ The State Legislature also has the ability to increase taxes and authorize debt without voter approval ■ The State plans to access $345 million of the $403.9 million of Emergency and Budget Reserve Fund (EBRF) to the general fund for FY 2020 and the State Legislature authorized transfer of $183 million of Hawaii Hurricane Relief Fund (HHRF) in FY 2021, which the Administration does not plan to use at this time ■ The State extended the income tax due date to July 20th, five days after the extended federal income tax deadline ■ The State's Treasury portfolio had a total market value of approximately $6.9 billion as of September 30, 2020 Borrowing Capabilities ■ The State Legislature has authorized borrowing up to $2.1 billion County Update 6 ■ The State has the emergency powers to waive the G.O. debt limit to accommodate short-term cashflow borrowings ■ The State has the ability to defer G.O. Bond principal up to five years and extend the final maturity from 20 to 25 years ■ The State also has the ability to use excess premium from tax-exempt bonds to pay interest for up to three years ■ The State has the ability to inter-fund borrow from its special funds (such as Harbors and Highways) ■ All four counties have received CARES Act funding - Honolulu directly and the others via the State ■ The State legislature has the ability to adjust the County transient accommodation tax allocation and has done so in the past ■ The Governor has the power to suspend TAT allocations subject to an emergency proclamation and has done so for FY 2021#11STATE OF 1959 HAWAI Council on Revenues Update In September, the Council on Revenues improved the projections for long-term growth The Council held a virtual meeting on September 9th, 2020 to forecast revenue growth for State General Fund revenues and increased its forecast for FY 2021 from -12% to -11.0% Primarily due to the delay in the income tax filing deadline from April 2020 to July 2020 that resulted in a $308 million shift from fiscal year 2020 to fiscal year 2021 ■The Council lowered its forecast for FY 2022 from 12.0% to 8.5% and projects revenues will grow by 6.0% in FY 2023, 4.0% in FY 2024, and 3.0% for FY 2025-2027 10 ◉ The forecast assumes the pre-testing travel program begins in November ◉ The Council recognizes that a number of unknowns may significantly affect Hawaii's economic activity and State tax collections including the trajectory of the virus, the availability of a vaccine, effective treatment, rapid, low-cost testing, the State and Federal government's response to the pandemic, reopening the tourism economy and its timing, and the duration of government shutdown measures General Fund Tax Revenue Collections & Projections ($mm) Actual Projected $10,000 $9,106 $8,756 $8,419 $8,095 $8,000 $7,784 $7,142 $7,413 $7,413 $6,796 $6,853 $7,127 $7,341 $7,561 $7,788 $6,194 $6,315 $6,465 $6,000 $5,468 $5,371 $5,735 $7,142 $4,426 $4,590 $4,590 $4,973 $6,695 $5,958 $6,642 $4,202 $4,364 $4,324 $6,546 $6,743 $6,945 $7,153 $7,368 $5,845 $4,000 $2,000 COR Forecast from March 11, 2020 COR Forecast from May 28, 2020 COR Forecast from September 9, 2020 -11.0% 8.5% 6.0% $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Fiscal Year 3.8% 0.0% 5.0% 4.0% 4.0% 4.0% 4.0% -7.0% -12.0% 12.0% 3.0% 3.0% 3.0% 3.0% 4.0% 3.0% 3.0% 3.0% 2020 2021 2022 2023 2024 2025 2026 2027#12STATE OF 1959 General Fund Financial Plan as of October 1, 2020 The State is pursuing a two-phase approach to manage the General Fund Financial Plan Initial Phase: Taking actions to ensure that the State can address revenue shortfalls through FY2021 FY2020 FY2021 Administration issued directives to reduce spending -- restrictions, hiring freezes, etc Legislature authorized fund transfers ($341 million) Legislature authorized transfer of $345 million from the EBRF to general fund Administration walked back supplemental budget requests ($178 million) and proposed legislation ($19 million) Legislature reduced FY2021 base budget by $205 million Legislature authorized up to $2.1 billion of working capital borrowing through short-term G.O. Bonds; however, Administration plans to borrow only $750 million to be repaid over five years Legislature authorized use of $183 million from the HHRF to address pandemic-related shortfalls; however, Administration does not plan to use HHRF funding at the present time Legislature authorized fund transfers ($40 million) Administration to negotiate approximately 9.2 % furloughs for most State employees ($311 million) Administration temporarily suspended OPEB pre-funding by emergency proclamation ($390 million) and will pay only retiree health premiums ($452 million) Second Phase: Undertaking a program review in conjunction with preparation of the fiscal biennium 22-23 budget, that will be presented to the Legislature during the 2021 legislative session FY2021 - 23 To ensure that State expenditures are in line with reduced revenue projections, the state is targeting program review reductions in the amount of $605 million FY2024 - 25 " Future considerations may include possible revenue enhancements, refocusing the State's Medicaid program, etc. General fund ending balance is now projected to be positive in these years 11 Sources: Department of Accounting and General Services; Department of Budget and Finance, July 2019. HAWAI#13General Fund Financial Plan as of October 1, 2020 The State is pursuing a number of adjustments to manage the General Fund Financial Plan ($ in millions) Total Revenues Total Expenditures Additional Sources Short-Term Borrowing Transfer from the EBRF Additional Expenditure Adjustments Ul loan interest $1.8B (to be an EA in FY21) Short-term G.O. borrowing repayment / interest Furlough 9.23% units 1,2,3,4,5,6,7,8,13,14 only; start Dec 1° Suspend Act 268 revert to pay go retiree premiums only st Actual FY 19 $7,916.6 $7,914.7 Est. FY 20 $7,637.1 $8,045.5 Est. FY 21 $6,636.8 Est. FY 22 $7,158.0 $8,365.5 $8,525.5 Est. FY 23 $7,555.3 $8,700.0 Est. FY 24 $7,848.7 Est. $8,934.6 FY 25 $8,077.9 $9,060.6 750.0 648.0 Program Review Reductions Total Additional expenditure adjustments Rev. Over (Under) Expend. 20.8 39.2 35.2 30.9 26.4 153.9 153.9 153.9 153.9 (164.2) (311.1) (311.1) (311.1) (28.5) (390.2) (381.7) (370.4) (361.3) (351.3) (605.0) (605.0) (605.0) (605.0) (533.6) (1,104.7) (1,097.4) (1,092.6) (804.5) 1.8 239.6 (445.1) (262.8) (47.4) 6.7 (178.2) Carry-Over Balance (Deficit) Beginning 750.3 752.1 991.7 Ending $752.1 $991.7 $546.6 546.6 $283.9 283.9 $236.5 236.5 $243.2 243.2 $65.0 Emergency & Budget Reserve Fund (EBRF) 378.2 58.9 67.5 73.2 79.5 Hawaii Hurricane Relief Fund (HHRF) 183.8 191.3 191.3 191.3 191.3 85.9 191.3 92.3 191.3 GF Ending Balance, EBRF and HHRF $1,314.1 $1,241.9 $805.4 $548.4 $507.3 $520.4 $348.6 ■ Key Assumptions: Does not assume additional federal funding (e.g. HEROES Act) Does not reduce pension funding and includes final step-up in employer contributions for FY2021 Preserves HHRF funds ($191 million) and a portion of EBRF funds ($59 million) for future contingencies FY 2020 that it includes $345 million of the EBRF and various fund swaps and transfers 12 Sources: Department of Accounting and General Services; Department of Budget and Finance. Note: Due to rounding, details may not add to totals. STATE OF 1959 HAWAI#14Pension System The State is committed to funding the pension system STATE OF 1959 FY2019 market value of assets increased to $17.2 billion with a funded ratio of 55.2% ■To meet the commitment that ERS achieve full funding within a 30-year horizon, the State enacted legislation to phase-in higher systemwide employer contribution rates in steps through FY2021 (pictured right) ■The State has appropriated the full amount for FY2021 Enacted Higher Rates (Employer Contributions) General Police & Fire FY 2017 17% 25% The ERS adopted a crisis risk strategy approximately 6 years ago which will allocate approximately 20% of its portfolio assets (presently at 16% of assets) to strategies intended to hold their value in a crisis scenario. FY 2018 18% 28% FY 2019 19% 31% FY 2020 22% 36% ■FY2020 total portfolio return was 1.26% FY 2021 24% 41% 75% of the ERS portfolio is liquid, and the plan has not experienced any liquidity issues to date ERS has on average less exposure to illiquid private investments than its peers (25% vs 36%) ■The stress test shows that the ERS can withstand a -20% return in year 1, followed by 20 years with returns at 5% (2 percentage points below the assumed rate) before returning to 7% and require only moderate rate increases to ensure that the funding period never extends beyond 30 years in any future annual valuation For further information, please visit https://ers.ehawaii.gov/wp-content/uploads/2020/01/2019-Actuarial-Valuation.pdf Source: Employee's Retirement System of the State of Hawaii. 13 HAWAI#1514 Other Post Employment Benefits The State has built a substantial balance in its OPEB trust fund over the past six years ■The State's OPEB trust fund balance is estimated to increase to $1.8 billion in FY2019 Estimated FY2020 total portfolio return was 1.7% The General Fund Financial Plan suspends pre-funding contributions but does not draw any funds from the State's EUTF balance to pay retiree premiums EUTF Prefunding Contributions (State Only, FY2014-2019) EUTF Balance and Funded Ratio (State Only, FY2015 - 2019) Millions $500 $450 Prefunding Requirements $430 $430 Millions $2,000 $1,800 $1,829 16.1% $400 ■Total Prefunding Contributions $1,600 $350 $333 $337 $1,400 $1,295 $297 $300 $1,200 $250 $250 $230 $1,000 12.1% $880 $200 $800 $164 $150 $600 $117 8.6% $481 $100 $100 $83 $400 4.9% $221 $50 $200 $0 2.4% $0 $- 2014 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Fiscal Year Fiscal Year Source: Hawaii Employer-Union Health Benefits Trust Fund. STATE OF 1959 HAWAI#16Treasury Portfolio The State has liquidity to ensure financial flexibility ■The State's treasury portfolio had a total market value of approximately $6.9 billion as of September 30, 2020 ■ Portfolio is low risk, primarily comprised of Bank CDs, U.S. Treasuries and Agency Securities with AAA ratings ■The effective duration of the portfolio is 0.38 years ■ Estimated portfolio-weighted yield (based on estimated annualized income) is 0.34% ■Internal borrowable resources provide an additional source of liquidity Portfolio Breakdown by Security Type U.S. Government Agency 2,498,089,369 36% U.S. Treasury 3,969,705,707 58% 15 (1) Does not include monies in the State's checking account. Bank CD's 392,188,904 6% STATE OF 1959 HAWAI#1716 (1) (2) Debt Management The State has a long track record of conservative debt management practices that are governed by a formal debt management policy G.O. Debt Service Profile (1) ■ 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 years 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 ballot initiatives required for debt issuance ■The State conservatively manages its debt portfolio Bonds issued with 20 year maturity and level debt service 100% fixed rate G.O. debt with no derivatives 63% of principal amortizes over the next 10 years BABS debt service is budgeted on a gross basis G.O. debt service as a percentage of General Fund revenues has been relatively constant across multiple economic cycles 14% 12% 10% 8% 6% 4% 2% 0% Excludes $321 million of reimbursable G.O. Bonds and $600 million Bond Anticipation Notes. The State also has a de minimis amount of Certificates of Participation outstanding. Excludes reimbursable G.O. Bond and Bond Anticipation Notes debt service. Millions $1,000 $800 $600 $400 $200 $- 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Fiscal Year 2032 2033 Debt Service as % of General Fund Revenues (2) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2034 63% ■General State Projects (46%) Department of Education (40%) University of Hawaii (14%) 2035 2036 2037 2038 2039 2040 2041 STATE OF 1959 HAWAI#18Investor Relations and Contact Information Please join us for a live online investor presentation on October 19, 2020 ■The State will conduct a live presentation for institutional investors on Monday, October 19 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 Friday, October 16th State of Hawai'i Investor Relations Home B&F DHHL Airports Harbors Highways DBEDT HHFDC UH Board of Regents E KOMO MAI Welcome to the State of Hawairs Investor Relations information page. We hope that you find the information helpful and beneficial for your needs. Type of Debt Department Budget & Finance (BF) General Obligation Bonds Fitch Moody's S&P AR- Ax2 AR+ 17 Certificates of Participation N/A NIA N/A Department of Hawaiian Home Lands (DHHL) Revenue Bonds Certificates of Participation A AT NA N/A N/A Department Transportation (DOT) Search STATE DIRECTOR OF FINANCE Craig K. Hiral 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 OF 1959 For questions, please contact the following individuals below or visit the State's investor relations website State of Hawaiʻi, Department of Budget & Finance Department of Transportation - Airports Investor Relations Search Rod Becker ([email protected], 808-586-1612) BofA Securities (Lead Bookrunner) Frank Lauterbur ([email protected], 213-345-9575) Craig Dussinger ([email protected], 213-345-9579) 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 Additional information may also be found at: http://investorrelations.hawaii.gov/ (pictured) 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 System HAWAI#19Conclusion STATE OF 1959 HAWAI Hawaii is relatively well positioned to manage through current events Strong ■ Centralized government allows Hawaii to react more quickly to crises than many other states Governmental ■ Executive authority to control spending through the ability to restrict, delay or suspend appropriations ■ State Legislature has the ability to increase taxes and authorize debt without voter approval Authority Financial ■ $58.9 million EBRF and $191.3 million HHRF are still in reserve ■ Capitalized on the economic growth in recent years to increase contributions to fund pension and OPEB Preparedness ■ Avoided using prior budget surpluses to fund large new programs with recurring costs Continued Focus on Public Health Resilient Economy ■ Council on Revenues provides quarterly revenue forecasts that facilitate budget adjustments ■ The proactive COVID-19 management has held cases per capita amongst the lowest in the nation ■ Statewide management of most health and social welfare programs ■ Robust statewide healthcare system under which the vast majority of residents are insured ■ Diverse economy with multiple independent sectors, including construction and professional services ■ Military presence is critical for national security and provides further economic stability ■ Significant federal funding will help strengthen the recovery ■ Robust government and private investment in infrastructure will provide fiscal stimulus ■ Demand for Hawaii real estate remains strong ■ Local governments in Hawaii are financially strong with ample reserves ■ Hawaii is a globally-recognized, premium brand with a focus on health, nature and sustainability Premier Tourism Industry ■ Tourism industry is positioned for a quick recovery with a quarantine end date of October 15 ■ State, Hawaii Tourism Authority, airlines and hotels are working together to facilitate a safe and successful return of tourism to Hawaii 18#2019 'Oni Like Kākou (Moving Forward Together) Hawaii draws strength from the enduring appeal of its diverse visitor destinations Napali Coast - Kauai Kona Coast - Hawaii Island Honolulu - Oahu Wailea Beach - Maui STATE OF 1959 HAWAI