Share-based compensation (Tables)

3 Months Ended

Mar. 31, 2013

Share-based compensation

Schedule of share-based compensation expense and related income tax benefit

Three months ended March 31	2013		2012
(in millions)
Share-based compensation expense (1)	$	1.9	$	1.8
Income tax benefit	0.7		0.6

(1) The Company has not capitalized any share-based compensation cost.

Schedule of nonqualified stock options by grant year

March 31, 2013			Outstanding & Exercisable (Vested)
Year of grant	Range of exercise prices		Number of options	Weighted-average remaining contractual life	Weighted-average exercise price
2003	$	20.49	12,000	0.1	$	20.49

Schedule of nonqualified stock options activity and statistics

Three months ended March 31	2013		2012
(dollars in thousands, except prices)
Shares exercised	2,000		12,000
Weighted-average exercise price	$	20.49	$	21.68
Cash received from exercise	$	41	$	260
Intrinsic value of shares exercised (1)	$	15	$	91
Tax benefit realized for the deduction of exercises	$	6	$	36

(1) Intrinsic value is the amount by which the fair market value of the underlying stock and the related dividend equivalents exceeds the exercise price of the option.

Schedule of stock appreciation rights by grant year

March 31, 2013			Outstanding & Exercisable (Vested)
Year of grant	Range of exercise prices		Number of shares underlying SARs	Weighted-average remaining contractual life	Weighted-average exercise price
2004	$	26.02	62,000	1.1	$	26.02
2005	26.18		102,000	2.0	26.18
	$	26.02 –26.18	164,000	1.7	$	26.12

Schedule of restricted share and stock awards

	2013			2012
Three months ended March 31	Shares	(1)		Shares		(1)
Outstanding, beginning of period	9,005	$	22.21	46,807		$	24.45
Granted	—	—		—		—
Vested	—	—		(8,700	)	27.17
Forfeited	—	—		—		—
Outstanding, end of period	9,005	$	22.21	38,107		$	23.83

(1) Weighted-average grant-date fair value per share based on the closing or average price of HEI common stock on the date of grant.

Schedule of restricted stock units

	2013				2012
Three months ended March 31	Shares		(1)		Shares		(1)
Outstanding, beginning of period	315,094		$	22.82	247,286		$	21.80
Granted	107,231	(2)	26.89		92,512	(3)	25.98
Vested	(113,212	)	20.30		(21,247	)	24.95
Forfeited	(7,968	)	25.26		—		—
Outstanding, end of period	301,145		$	25.15	318,551		$	22.80

(1) Weighted-average grant-date fair value per share based on the average price of HEI common stock on the date of grant.

(2) Total weighted-average grant-date fair value of $2.9 million.

(3) Total weighted-average grant-date fair value of $2.4 million.

Schedule of Long-Term Incentive Plan (LTIP) linked to total return to shareholders

	2013				2012
Three months ended March 31	Shares		(1)		Shares		(1)
Outstanding, beginning of period	239,256		$	29.12	197,385		$	25.94
Granted	89,533		32.69		77,482	(2)	30.71
Vested	(87,753	)	22.45		(35,397	)	14.85
Forfeited	(5,972	)	32.96		—		—
Outstanding, end of period	235,064		$	32.87	239,470		$	29.12

(1) Weighted-average grant-date fair value per share determined using a Monte Carlo simulation model.

(2) Total weighted-average grant-date fair value of $2.4 million.

Schedule of assumptions used to determine the fair value of Long-Term Incentive Plan (LTIP) linked to total return to shareholders (TRS)

	2013			2012
Risk-free interest rate	0.38		%	0.33		%
Expected life in years	3			3
Expected volatility	19.4		%	25.3		%
Range of expected volatility for Peer Group	12.4% to 25.3		%	15.5% to 34.5		%
Grant date fair value (per share)	$	32.69		$	30.71

Schedule of Long-Term Incentive Plan (LTIP) linked to other performance conditions

	2013				2012
Three months ended March 31	Shares		(1)		Shares		(1)
Outstanding, beginning of period	247,175		$	25.04	182,498		$	22.63
Granted	118,895		26.89		115,104	(2)	25.98
Vested	(18,275	)	18.95		—		—
Forfeited	(5,971	)	25.94		—		—
Outstanding, end of period	341,824		$	26.00	297,602		$	23.92

(1) Weighted-average grant-date fair value per share based on the average price of HEI common stock on the date of grant.

(2) Total weighted-average grant-date fair value of $3 million (at target performance levels).