Humana 2005 Annual Report Download - page 96

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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
12. EARNINGS PER COMMON SHARE COMPUTATION
Detail supporting the computation of basic and diluted earnings per common share was as follows for the
years ended December 31, 2005, 2004 and 2003:
2005 2004 2003
(in thousands, except per share results)
Net income available for common stockholders ..... $308,483 $280,012 $228,934
Weighted average outstanding shares of common
stock used to compute basic earnings per common
share ..................................... 161,714 160,421 158,968
Dilutive effect of:
Employee stock options .................... 3,565 1,999 1,240
Restricted stock awards .................... 95 36 1,752
Shares used to compute diluted earnings per common
share ..................................... 165,374 162,456 161,960
Basic earnings per common share ................ $ 1.91 $ 1.75 $ 1.44
Diluted earnings per common share ............... $ 1.87 $ 1.72 $ 1.41
Stock options to purchase 9,934 shares in 2005, 2,134,184 shares in 2004, and 4,209,266 shares in 2003
were anti-dilutive and, therefore, were not included in the computations of diluted earnings per common share.
13. STOCKHOLDERS’ EQUITY
Stock Repurchases
During 2005, we acquired 68,296 of our common shares in connection with employee stock plans at an
aggregate cost of $2.4 million, or an average of $34.62 per share.
Stockholders’ Rights Plan
Our stockholders’ rights plan expired in accordance with its terms in February 2006.
Regulatory Requirements
Certain of our subsidiaries operate in states that regulate the payment of dividends, loans, or other cash
transfers to Humana Inc., our parent company, and require minimum levels of equity as well as limit investments
to approved securities. The amount of dividends that may be paid to Humana Inc. by these subsidiaries, without
prior approval by state regulatory authorities, is limited based on the entity’s level of statutory income and
statutory capital and surplus. In most states, prior notification is provided before paying a dividend even if
approval is not required.
As of December 31, 2005, we maintained aggregate statutory capital and surplus of $1,203.2 million in our
state regulated subsidiaries. Each of these subsidiaries was in compliance with applicable statutory requirements
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