Humana 2007 Annual Report Download - page 97

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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, 2007, 2006 and 2005:
2007 2006 2005
(in thousands, except per share results)
Net income available for common stockholders ..... $833,684 $487,423 $296,730
Weighted average outstanding shares of common
stock used to compute basic earnings per common
share ..................................... 166,871 164,137 161,714
Dilutive effect of:
Employee stock options .................... 2,251 3,542 3,751
Restricted stock .......................... 698 317 95
Shares used to compute diluted earnings per common
share ..................................... 169,820 167,996 165,560
Basic earnings per common share ................ $ 5.00 $ 2.97 $ 1.83
Diluted earnings per common share ............... $ 4.91 $ 2.90 $ 1.79
Restricted stock and stock options to purchase 1,017,381 shares in 2007, 854,379 shares in 2006, and
826,587 shares in 2005 were anti-dilutive and, therefore, were not included in the computations of diluted
earnings per common share.
13. STOCKHOLDERS’ EQUITY
Stock Repurchases
On February 21, 2008, the Board of Directors authorized the use of up to $150 million for the repurchase of
our common shares exclusive of shares repurchased in connection with employee stock plans. The shares may be
purchased from time to time at prevailing prices in the open market, by block purchases, or in privately-
negotiated transactions.
In connection with employee stock plans, we acquired 406,377 of our common shares at an aggregate cost
of $27.4 million during 2007, and 467,767 of our common shares at an aggregate cost of $26.2 million during
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.
Based on the most recent statutory financial statements as of December 31, 2007, we maintained aggregate
statutory capital and surplus of $2,905.2 million in our state regulated subsidiaries. This compares to applicable
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