Huntington National Bank 2003 Annual Report Download - page 130

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table shows the components of net periodic benefit cost recognized in the most recent three years:
Pension Benefits Post-Retirement Benefits
(in thousands of dollars) 2003 2002 2001 2003 2002 2001
Service cost $ 9,817 $ 8,263 $ 8,394 $1,121 $1,126 $1,060
Interest cost 16,647 15,458 14,675 3,479 3,603 3,435
Expected return on plan assets (25,138) (26,416) (22,821) — — —
Amortization of transition asset (251) (265) (259) 1,104 1,104 1,261
Amortization of prior service cost — (185) (305) 605 605 693
Curtailments — 2,022 — — 2,526 —
Settlements 4,354 3,373 471 — — —
Recognized net actuarial loss (gain) 1,774 — (535) — — (31)
Benefit Cost (Gain) $ 7,203 $ 2,250 $ (380) $6,309 $8,964 $6,418
The curtailment reflected above related to the sale of the Florida banking and insurance operations. This expense was recognized in
Huntington’s results of operations in 2002. It is Huntington’s policy to recognize settlement gains and losses as incurred. Management
expects net periodic pension cost to approximate $20 million and net periodic post-retirement benefits cost to approximate $6 million
for 2004.
At September 30, 2003 and 2002, The Huntington National Bank, as trustee, held all Plan assets. The Plan assets consisted of
investments in a variety of Huntington mutual funds and Huntington common stock as follows:
Fair Value
2003 2002
(in thousands of dollars) Balance % Balance %
Cash $ — — $ 5,000 2%
Huntington Funds—money market 1,570 1% 14,993 6%
Huntington Funds—equity funds 191,616 66% 146,024 59%
Huntington Funds—fixed income funds 82,520 29% 69,340 28%
Huntington Common Stock 12,863 4% 11,786 5%
Fair Value of Plan Assets at September 30 $288,569 100% 246,643 100%
The number of shares of Huntington common stock held by the Plan was 642,364 at ,September 30, 2003 and 2002. Dividends and
interest received by the Plan during 2003 and 2002 were $7.0 million and $6.1 million, respectively. The Plan has acquired and held
Huntington common stock in compliance at all times with Section 407 of the Employee Retirement Income Security Act of 1978.
The following table shows when benefit payments, which include expected future service, as appropriate, are expected to be paid:
(in thousands of dollars)
Pension
Benefits
Post-
Retirement
Benefits
Fiscal Year:
2004 $ 14,525 $ 3,974
2005 15,710 4,190
2006 16,712 4,376
2007 18,351 4,503
2008 20,096 4,586
2009 through 2013 120,240 23,884
Expected contributions for 2004 for the Plan cannot be reasonably determined until pension funding reform measures currently
pending in Congress are enacted, which is expected to be in the first quarter of 2004. Expected contributions for 2004 for the Post-
Retirement Benefit plan are $4.0 million.
The assumed healthcare cost trend rate has a significant effect on the amounts reported. A one-percentage point increase would
increase service and interest costs and the post-retirement benefit obligation by $69,000 and $0.8 million, respectively. A one-
128 HUNTINGTON BANCSHARES INCORPORATED