Huntington National Bank 2011 Annual Report Download - page 45

DISCUSSION OF RESULTS OF OPERATIONS
This section provides a review of financial performance from a consolidated perspective. It also includes a
Significant Items section that summarizes key issues important for a complete understanding of performance
trends. Key consolidated balance sheet and income statement trends are discussed. All earnings per share data is
reported on a diluted basis. For additional insight on financial performance, please read this section in
conjunction with the Item 7: Business Segment Discussion.
Significant Items
Definition of Significant Items
From time-to-time, revenue, expenses, or taxes, are impacted by items judged by us to be outside of
ordinary banking activities and / or by items that, while they may be associated with ordinary banking activities,
are so unusually large that their outsized impact is believed by us at that time to be infrequent or short-term in
nature. We refer to such items as Significant Items. Most often, these Significant Items result from factors
originating outside the Company; e.g., regulatory actions / assessments, windfall gains, changes in accounting
principles, one-time tax assessments / refunds, litigation actions, etc. In other cases they may result from our
decisions associated with significant corporate actions out of the ordinary course of business; e.g., merger /
restructuring charges, recapitalization actions, goodwill impairment, etc.
Even though certain revenue and expense items are naturally subject to more volatility than others due to
changes in market and economic environment conditions, as a general rule volatility alone does not define a
Significant Item. For example, changes in the provision for credit losses, gains / losses from investment
activities, asset valuation writedowns, etc., reflect ordinary banking activities and are, therefore, typically
excluded from consideration as a Significant Item.
Management believes the disclosure of “Significant Items” in current and prior period results aids analysts/
investors in better understanding corporate performance and trends so that they can ascertain which of such
items, if any, they may wish to include/exclude from their analysis of the company’s performance — i.e., within
the context of determining how that performance differed from their expectations, as well as how, if at all, to
adjust their estimates of future performance accordingly. To this end, Management has adopted a practice of
listing “Significant Items” in its external disclosure documents (e.g., earnings press releases, quarterly
performance discussions, investor presentations, Forms 10-Q and 10-K).
“Significant Items” for any particular period are not intended to be a complete list of items that may
materially impact current or future period performance.
Significant Items Influencing Financial Performance Comparisons
Earnings comparisons among the three years ended December 31, 2011, 2010, and 2009 were impacted by a
number of significant items summarized below.
1. Early Extinguishment of Debt. The positive impacts relating to the early extinguishment of debt on our
reported results were: $9.7 million ($0.01 per common share) in 2011 and $141.0 million ($0.18 per common
share) in 2009. These amounts were recorded as reductions to noninterest expense.
2. Visa®.Prior to the Visa®IPO occurring in March 2008, Visa®was owned by its member banks, which
included the Bank. As a result of this ownership, we received Class B shares of Visa®stock at the time of the
Visa®IPO. In the 2009 second quarter, we sold these Visa®stock shares, resulting in a $31.4 million pretax gain
($.04 per common share). This amount was recorded to noninterest income. In 2011, a $6.4 million derivative
loss due to an increase in the liability associated with the sale of these shares was recorded to noninterest income.
31