Huntington National Bank 2003 Annual Report Download - page 72

MANAGEMENT’S DISCUSSION AND ANALYSIS
Table 20—Line of Business—GAAP Earnings vs. Operating Earnings Reconciliation(1)
(in thousands of dollars)
Regional
Banking
Dealer
Sales PFG
Treasury/
Other Total
2003
Net Income—GAAP $172,799 $ 62,624 $25,953 $110,987 $372,363
Change from prior year—$ 58,329 37,967 3,128 (50,792) 48,632
Change from prior year—% 51.0% NM 13.7% (31.4)% 15.0%
Restructuring releases — — — (4,333) (4,333)
Gain on sale of automobile loans — (13,493) — (12,532) (26,025)
Cum. effect of change in accounting — 10,888 — 2,442 13,330
Gain on sale of branch offices — — — (8,523) (8,523)
Long-term debt extinguishment — — — 9,913 9,913
Net Income—Operating $172,799 $ 60,019 $25,953 $ 97,954 $356,725
Change from prior year—$ 59,599 36,152 1,127 (19,862) 77,016
Change from prior year—% 52.6% NM 4.5% (16.9)% 27.5%
2002
Net Income—GAAP $114,470 $ 24,657 $22,825 $161,779 $323,731
Change from prior year—$ (26,244) 52,382 1,232 161,565 188,935
Change from prior year—% (18.7)% NM 5.7% NM 140.2%
Restructuring charges — — 3,429 28,403 31,832
Loss from Florida operations (1,270) (790) (1,428) 5,013 1,525
Gain on sale of Florida operations — — — (61,422) (61,422)
Merchant Services gain — — — (15,957) (15,957)
Net Income—Operating $113,200 $ 23,867 $24,826 $117,816 $279,709
Change from prior year—$ (13,701) 44,094 5,906 42,629 78,928
Change from prior year—% (10.8)% NM 31.2% 56.7% 39.3%
2001
Net Income—GAAP $140,714 $(27,725) $21,593 $ 214 $134,796
Restructuring charges 5,948 10,400 2,990 32,634 51,972
Loss from Florida operations (19,761) (2,902) (5,663) 42,339 14,013
Net Income—Operating $126,901 $(20,227) $18,920 $ 75,187 $200,781
(1) See Significant Factors Influencing Financial Performance discussion on page 39.
NM, not a meaningful value.
Dealer Sales was notably impacted by the cumulative effect of change in accounting principle (FIN 46), adopted on July 1, 2003. As a
result of adopting FIN 46, a securitization trust, which owned $1.0 billion of automobile loans, was consolidated. The parent company
held a $40 million investment in this entity and, upon consolidation, this investment and its related interest receivable was
consolidated as well, generating $2.4 million of after-tax cumulative effect to Treasury/Other earnings. The remainder of the
cumulative effect of accounting change was recorded in Dealer Sales. For 2003, operating earnings for Dealer Sales and Treasury/Other
were adjusted for this change in accounting.
Restructuring charges and releases were excluded from all three years’ operating earnings for each business segment. The restructuring
charges were originally established to address non-run-rate earnings issues for all business segments. Restructuring releases occurred in
2002 and 2003 and were recorded in Treasury/Other. One charge in 2002 related to a loss in the Private Financial Group segment and
was adjusted for in that segment.
Earnings from the sold Florida banking and insurance operations crossed all business segments. The run-rate earnings related to these
operations were excluded from earnings for each segment for 2002 and 2001. The gain from the sale of these operations was recorded
in the Treasury/Other segment to isolate it from the bank’s core operating segments and was excluded from Treasury/Other’s
operating results for 2002.
70 HUNTINGTON BANCSHARES INCORPORATED