United States securities and exchange commission logo
March 14, 2023
Shannon Okinaka
Chief Financial Officer
Hawaiian Holdings Inc
3375 Koapaka Street, Suite G-350
Honolulu, HI, 96819
Re: Hawaiian Holdings
Inc
Form 10-K for the
Fiscal Year ended December 31, 2022
Filed February 15,
2023
File No. 001-31443
Dear Shannon Okinaka:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year ended December 31, 2022
Financial Statements
Note 14 - Amazon Agreement, page 99
1. We understand that you
recently issued Amazon a warrant valued at $82.5 million to
acquire up to 9,442,443
shares of your common stock, and that a portion of the
warrant representing
rights to acquire 1,258,992 common shares, which you valued at
$ 11.6 million, vested
upon issuance. You indicate that a corresponding asset has been
recognized and we see
the balancing entry to additional paid-in capital.
We also understand that
an exercise price of $14.71 has been established for the first
6,294,962 shares to
vest, and that an exercise price for the remaining balance of 3,147,481
shares to vest is not
yet determinable. You explain that the value of the warrant will be
recognized as a
reduction of revenue over the vesting period, which you indicate will
correlate with payments
that Amazon will make under the Air Transportation Services
Shannon Okinaka
Hawaiian Holdings Inc
March 14, 2023
Page 2
Agreement (ATSA) "or generally with respect to air cargo or air
charters," with full
vesting of the award possible if the cumulative payments amount to
$1.8 billion, prior to
the expiration of the warrant on October 20, 2031.
Please expand your disclosures to clarify your accounting policy as it
relates to your
expectations for vesting and recognition of warrant value. For
example, (i) describe the
circumstances under which you will recognize incremental value of the
warrant as an
asset, (ii) explain how vesting or your expectations about the
probability of vesting will
factor into these determinations, (iii) indicate the period over which
the initial and each
incremental value recognized as an asset will be amortized or explain
how the period will
be established if this will depend on future events, (iv) clarify the
extent to which there is
or is not a consistent proportional vesting relationship with dollar
sales over the term of
the arrangement, and (v) include such additional information as
necessary to clarify how
your plan to recognize warrant value as an offset to revenue over the
vesting period
reconciles with having an asset for the fully vested portion of the
warrant.
Tell us whether you have relied upon the guidance in FASB ASC
606-10-32-25A
and FASB ASC 718 in formulating your accounting policy, including
measurement and
classification. If you believe this is the applicable guidance, please
clarify your view on
the classification, circumstances that could result in a change in
classification, your
accounting policy election for forfeitures related to nonemployee
share-based payment
awards pursuant to FASB ASC 718-10-35-1D, and how you will
characterize and present
changes in the value of the warrant associated with the uncertain
exercise price, if not
attributable to the transaction price, along with your rationale.
However, if you have relied upon other guidance in formulating your
accounting policy,
please identify the specific literature and explain to us your
rationale. Please also submit
any associated revisions that you propose to the critical accounting
policy disclosures on
page 52, to address the guidance in Item 303(b)(3) of Regulation S-K.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact John Cannarella, Staff Accountant, at (202) 551-3337 or
Karl Hiller,
Branch Chief, at (202) 551-3686 with any questions.
FirstName LastNameShannon Okinaka Sincerely,
Comapany NameHawaiian Holdings Inc
Division of
Corporation Finance
March 14, 2023 Page 2 Office of
Energy & Transportation
FirstName LastName