XML 49 R27.htm IDEA: XBRL DOCUMENT v3.6.0.2
Shareholders' equity
12 Months Ended
Dec. 31, 2016
Equity [Abstract]  
Shareholders' equity
9 · Shareholders’ equity
Reserved shares.  As of December 31, 2016, HEI had reserved a total of 11,857,869 shares of common stock for future issuance under the HEI Dividend Reinvestment and Stock Purchase Plan (DRIP), the Hawaiian Electric Industries Retirement Savings Plan (HEIRSP), the HEI 2011 Nonemployee Director Stock Plan, the ASB 401(k) Plan and the 2010 Executive Incentive Plan.
Equity forward transaction.  On March 19, 2013, HEI entered into an equity forward transaction in connection with a public offering on that date of 6.1 million shares of HEI common stock at $26.75 per share. On March 19, 2013, HEI common stock closed at $27.01 per share. On March 20, 2013, the underwriters exercised their over-allotment option in full and HEI entered into an equity forward transaction in connection with the resulting additional 0.9 million shares of HEI common stock.
The use of an equity forward transaction substantially eliminates future equity market price risk by fixing a common equity offering sales price under the then existing market conditions, while mitigating immediate share dilution resulting from the offering by postponing the actual issuance of common stock until funds are needed in accordance with the Company’s capital investment plans. Pursuant to the terms of these transactions, a forward counterparty borrowed 7 million shares of HEI’s common stock from third parties and sold them to a group of underwriters for $26.75 per share, less an underwriting discount equal to $1.00312 per share. Under the terms of the equity forward transactions, HEI was required to issue and deliver shares of HEI common stock to the forward counterparty at the then applicable forward sale price. The forward sale price was initially determined to be $25.74688 per share at the time the equity forward transactions were entered into, and the amount of cash to be received by HEI upon physical settlement of the equity forward was subject to certain adjustments in accordance with the terms of the equity forward transactions.
The equity forward transactions had no initial fair value since they were entered into at the then market price of the common stock. HEI concluded that the equity forward transactions were equity instruments based on the accounting guidance in ASC Topic 480, "Distinguishing Liabilities from Equity," and ASC Topic 815, "Derivatives and Hedging," and that they qualified for an exception from derivative accounting under ASC Topic 815 because the forward sale transactions were indexed to its own stock. On December 19, 2013 and July 14, 2014, HEI settled 1.3 million and 1.0 million shares under the equity forward for proceeds of $32.1 million (net of the underwriting discount of $1.3 million) and $23.9 million (net of underwriting discount of $1.0 million), respectively, which funds were ultimately used to purchase Hawaiian Electric shares.
On March 20, 2015, HEI settled the remaining 4.7 million shares under the equity forward for proceeds of $104.5 million (net of the underwriting discount of $4.7 million), which funds were used for the reduction of debt and for general corporate purposes. The proceeds were recorded in equity at the time of settlement. Prior to their settlement, the shares remaining under the equity forward transactions were reflected in HEI’s diluted EPS calculations using the treasury stock method.
For 2016, 2015 and 2014, the equity forward transactions did not have a material dilutive effect on HEI’s EPS.
Accumulated other comprehensive income/(loss).  Changes in the balances of each component of accumulated other comprehensive income/(loss) (AOCI) were as follows:
 
HEI Consolidated
 
Hawaiian Electric Consolidated
 (in thousands)
 Net unrealized gains (losses) on securities
 
 Unrealized gains(losses) on derivatives
 
 Retirement benefit plans
 
AOCI
 
 Unrealized losses on derivatives
 
 Retirement benefit plans
 
AOCI
Balance, December 31, 2013
$
(3,663
)
 
$
(525
)
 
$
(12,562
)
 
$
(16,750
)
 
$

 
$
608

 
$
608

Current period other comprehensive income (loss)
4,125

 
236

 
(14,989
)
 
(10,628
)
 

 
(563
)
 
(563
)
Balance, December 31, 2014
462

 
(289
)
 
(27,551
)
 
(27,378
)
 

 
45

 
45

Current period other comprehensive income (loss)
(2,334
)
 
235

 
3,215

 
1,116

 

 
880

 
880

Balance, December 31, 2015
(1,872
)
 
(54
)
 
(24,336
)
 
(26,262
)
 

 
925

 
925

Current period other comprehensive loss
(6,059
)
 
(400
)
 
(408
)
 
(6,867
)
 
(454
)
 
(793
)
 
(1,247
)
Balance, December 31, 2016
$
(7,931
)
 
$
(454
)
 
$
(24,744
)
 
$
(33,129
)
 
$
(454
)
 
$
132

 
(322
)

Reclassifications out of AOCI were as follows:
 
 
Amount reclassified from AOCI
 
 
Years ended December 31
 
2016
 
2015
 
2014
 
Affected line item in the Statement of Income
(in thousands)
 
 
 
 
 
 
 
 
HEI consolidated
 
 
 
 
 
 
 
 
Net realized gains on securities
 
$
(360
)
 
$

 
$
(1,715
)
 
Revenues-bank (net gains on sales of securities)
Derivatives qualified as cash flow hedges
 
 
 
 

 
 

 
 
Window forward contracts
 
(173
)
 

 

 
Revenues-electric utilities (gains on window forward contractssee Note 4 for additional details)
Interest rate contracts (settled in 2011)
 
54

 
235

 
236

 
Interest expense
Retirement benefit plan items
 
 

 
 

 
 

 
 
Amortization of prior service credit and net losses recognized during the period in net periodic benefit cost
 
14,518

 
22,465

 
11,344

 
See Note 10 for additional details
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets
 
28,584

 
(25,139
)
 
207,833

 
See Note 10 for additional details
Total reclassifications
 
$
42,623

 
$
(2,439
)
 
$
217,698

 
 
Hawaiian Electric consolidated
 
 
 
 
 
 
 
 
Derivatives qualified as cash flow hedges
 
 
 
 
 
 
 
 
Window forward contracts
 
(173
)
 

 

 
Revenues (gains on window forward contractssee Note 4 for additional details)
Retirement benefit plan items
 
 

 
 

 
 

 
 
Amortization of prior service credit and net losses recognized during the period in net periodic benefit cost
 
$
13,254

 
$
20,381

 
$
10,212

 
See Note 10 for additional details
Less: reclassification adjustment for impact of D&Os of the PUC included in regulatory assets
 
28,584

 
(25,139
)
 
207,833

 
See Note 10 for additional details
Total reclassifications
 
$
41,665

 
$
(4,758
)
 
$
218,045