Huntington National Bank 2005 Annual Report Download - page 122

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NOTES TOCONSOLIDATED FINANCIAL STATEMENTS HUNTINGTON BANCSHARES INCORPORATED
15. SHAREHOLDERS’ EQUITY
Effective April 27, 2004, the board of directors authorized a new share repurchase program (the 2004 Repurchase Program) which
cancelled the prior 2003 share repurchase program and authorized Management to repurchase not more than 7.5 million shares
of Huntington common stock. On June 9, 2005, Huntington reactivated its share repurchase program upon settlement of the SEC
formal investigation.
On October 18, 2005, the Company announced that the board of directors authorized a new program for the repurchase of up to
15 million shares of our common stock (the 2005 Repurchase Program). The 2005 Repurchase Program does not have an
expiration date. The 2004 Repurchase Program, with 3.1 million shares remaining, was cancelled and replaced by the 2005
Repurchase Program. The Company expects to repurchase the shares from time to time in the open market or through privately
negotiated transactions, depending on market conditions.
Listed below is the share repurchase activity for the year ended December 31, 2005:
Total Average
Number Price
of Shares Paid Per
Repurchase Programs Purchased Share
The 2004 Repurchase Program 4,415,700 $24.58
The 2005 Repurchase Program 5,175,000 23.76
Total Shares Repurchased in 2005 9,590,700 $24.13
16. EARNINGS PER SHARE
Basic earnings per share is the amount of earnings for the period available to each share of common stock outstanding during
the reporting period. Diluted earnings per share is the amount of earnings available to each share of common stock outstanding
during the reporting period adjusted for the potential issuance of common shares for dilutive stock options. The calculation of
basic and diluted earnings per share for each of the three years ended December 31 was as follows:
Year ended December 31,
(in thousands, except per share amounts) 2005 2004 2003
Income before cumulative effect of accounting change $412,091 $398,925 $385,693
Cumulative effect of change in accounting principle, net of tax —— (13,330)
Net income $412,091 $398,925 $372,363
Average common shares outstanding 230,142 229,913 229,401
Dilutive potential common shares 3,333 3,943 2,181
Diluted average common shares outstanding 233,475 233,856 231,582
Earnings Per Share
Basic
Income before cumulative effect of accounting change $ 1.79 $ 1.74 $ 1.68
Net income 1.79 1.74 1.62
Diluted
Income before cumulative effect of accounting change 1.77 1.71 1.67
Net income 1.77 1.71 1.61
The average market price of Huntington’s common stock for the period was used in determining the dilutive effect of
outstanding stock options. Dilutive potential common shares include stock options and options held in deferred compensation
plans. Dilutive potential common shares are computed based on the number of shares subject to options that have an exercise
price less than the average market price of Huntington’s common stock for the period.
Approximately 5.7 million, 2.6 million, and 2.8 million options to purchase shares of common stock outstanding at the end of
2005, 2004, and 2003, respectively, were not included in the computation of diluted earnings per share because the effect would
be antidilutive. The weighted average exercise price for these options was $25.68 per share, $26.96 per share, and $26.74 per share
at the end of the same respective periods.
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