KeyBank 2007 Annual Report Download - page 47

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MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATIONS KEYCORP AND SUBSIDIARIES
Additional information pertaining to Key’s retained interests in loan
securitizations is summarized in Note 1 under the heading “Loan
Securitizations” on page 67, Note 6 (“Securities”), which begins on
page 79, and Note 8 under the heading “Retained Interests in Loan
Securitizations” on page 81.
Commitments to extend credit or funding. Loan commitments provide
for financing on predetermined terms as long as the client continues to
meet specified criteria. These commitments generally carry variable
rates of interest and have fixed expiration dates or other termination
clauses. In many cases, a client must pay a fee to obtain a loan
commitment from Key. Since a commitment may expire without resulting
in a loan, the total amount of outstanding commitments may exceed
Key’s eventual cash outlay significantly. Further information about
Key’s loan commitments at December 31, 2007, is presented in Note 18
(“Commitments, Contingent Liabilities and Guarantees”) under the
heading “Commitments to Extend Credit or Funding” on page 97.
Figure 29 includes the remaining contractual amount of each class of
commitment to extend credit or funding. For loan commitments and
commercial letters of credit, this amount represents Key’s maximum
possible accounting loss if the borrower were to draw upon the full
amount of the commitment and subsequently default on payment for the
total amount of the then outstanding loan.
Other off-balance sheet arrangements. Other off-balance sheet
arrangements include financial instruments that do not meet the definition
of a guarantee as specified in Interpretation No. 45, “Guarantor’s
Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others,” and other relationships,
such as liquidity support provided to asset-backed commercial paper
conduits, indemnification agreements and intercompany guarantees.
Information about such arrangements is provided in Note 18 under
the heading “Other Off-Balance Sheet Risk” on page 99.
Contractual obligations
Figure 29 summarizes Key’s significant contractual obligations, and
lending-related and other off-balance sheet commitments at December
31, 2007, by the specific time periods in which related payments are due
or commitments expire.
After After
December 31, 2007 Within 1 Through 3 Through After
in millions 1 Year 3 Years 5 Years 5 Years Total
Contractual obligations:
a
Deposits with no stated maturity $40,176 — — — $40,176
Time deposits of $100,000 or more 9,810 $ 648 $ 398 $ 452 11,308
Other time deposits 8,718 1,538 474 885 11,615
Federal funds purchased and securities sold
under repurchase agreements 3,927———3,927
Bank notes and other short-term borrowings 6,453 — — — 6,453
Long-term debt 1,365 3,449 2,849 4,294 11,957
Noncancelable operating leases 117 199 146 273 735
Liability for unrecognized tax benefits 2 19 — — 21
Purchase obligations:
Banking and financial data services 64 54 19 1 138
Telecommunications 25 15 — — 40
Professional services 19 4 — — 23
Technology equipment and software 23 26 7 — 56
Other 12 8 2 — 22
Total purchase obligations 143 107 28 1 279
Total $70,711 $5,960 $3,895 $5,905 $86,471
Lending-related and other off-balance sheet commitments:
Commercial, including real estate $12,971 $ 9,799 $7,253 $1,121 $31,144
Home equity 34 146 368 7,673 8,221
When-issued and to be announced
securities commitments — — — 665 665
Commercial letters of credit 154 55 8 — 217
Principal investing commitments 11 21 23 224 279
Liabilities of certain limited partnerships
and other commitments 3 6 6 69 84
Total $13,173 $10,027 $7,658 $9,752 $40,610
a
Deposits and borrowings exclude interest.
FIGURE 29. CONTRACTUAL OBLIGATIONS AND OTHER OFF-BALANCE SHEET COMMITMENTS