Huntington National Bank 2013 Annual Report Download - page 36

30
(1) Comparisons for presented periods are impacted by a number of factors. Refer to “Significant Items”.
(2) Net income excluding expense for amortization of intangibles for the period divided by average tangible common shareholders’
equity. Average tangible common shareholders’ equity equals average total common shareholders’ equity less average intangible
assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax liability, and
calculated assuming a 35% tax rate.
(3) On a fully-taxable equivalent (FTE) basis assuming a 35% tax rate.
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 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.
We believe the disclosure of Significant Items provides a better understanding of our performance and trends to ascertain which
of such items, if any, to include or exclude from an analysis of our performance; i.e., within the context of determining how that
performance differed from expectations, as well as how, if at all, to adjust estimates of future performance accordingly. To this end,
we adopted a practice of listing Significant Items in our external disclosure documents; e.g., earnings press releases, 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, 2013, 2012, and 2011 were impacted by a number of
Significant Items summarized below.
1. Pension Curtailment Gain. During the 2013 third quarter, a $33.9 million pension curtailment gain was recorded in personnel
costs. This resulted in a positive impact of $0.03 per common share for 2013.
2. Franchise Repositioning Related Expense. During 2013, $23.5 million of franchise repositioning related expense was
recorded. This resulted in a negative impact of $0.02 per common share for 2013.
3. State deferred tax asset valuation allowance adjustment. During 2012, a valuation allowance of $21.3 million (net of tax)
was released for the portion of the deferred tax asset and state net operating loss carryforwards expected to be realized. This
resulted in a positive impact of $0.02 per common share for 2012. Additional information can be found in the Provision for
Income Taxes section within this MD&A.