KeyBank 2007 Annual Report Download - page 66

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64
KEYCORP AND SUBSIDIARIES
Year ended December 31,
in millions 2007 2006 2005
OPERATING ACTIVITIES
Net income $ 919 $ 1,055 $ 1,129
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Provision for loan losses 529 147 143
Depreciation and amortization expense 425 397 358
Liability to Visa 64 ——
Litigation reserve 42 ——
Write-off of goodwill 5170 —
Net securities losses (gains) 35 (1) (1)
Gain from sale of McDonald Investments branch network (171) ——
Gains related to MasterCard Incorporated shares (67) (9) —
Proceeds from settlement of automobile residual value insurance litigation 279 ——
Gain from settlement of automobile residual value insurance litigation (26) ——
Loss (gain) from sale of discontinued operations 3(22) —
Net gains from principal investing (134) (53) (56)
Net losses (gains) from loan securitizations and sales 17 (76) (69)
Deferred income taxes (74) 27 105
Net (increase) decrease in loans held for sale from continuing operations (1,099) (280) 972
Net (increase) decrease in trading account assets (144) (62) 13
Other operating activities, net (798) (288) (426)
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (195) 1,005 2,168
INVESTING ACTIVITIES
Proceeds from sale of discontinued operations —2,520 —
Proceeds from sale of McDonald Investments branch network,
net of retention payments 199 ——
Proceeds from sale of MasterCard Incorporated shares 67 ——
Cash used in acquisitions, net of cash acquired (80) (34) (219)
Net (increase) decrease in short-term investments (305) 247 (133)
Purchases of securities available for sale (4,696) (4,640) (3,770)
Proceeds from sales of securities available for sale 2,111 201 187
Proceeds from prepayments and maturities of securities available for sale 2,564 3,933 3,686
Purchases of held-to-maturity securities —(7) (43)
Proceeds from prepayments and maturities of held-to-maturity securities 14 60 23
Purchases of other investments (662) (542) (445)
Proceeds from sales of other investments 358 234 280
Proceeds from prepayments and maturities of other investments 191 293 270
Net increase in loans, excluding acquisitions, sales and transfers (5,865) (2,384) (3,964)
Purchases of loans (64) (133) (42)
Proceeds from loan securitizations and sales 480 454 604
Purchases of premises and equipment (196) (120) (155)
Proceeds from sales of premises and equipment 9612
Proceeds from sales of other real estate owned 64 33 67
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (5,811) 121 (3,642)
FINANCING ACTIVITIES
Net increase in deposits 3,980 361 943
Net increase (decrease) in short-term borrowings 5,545 (1,780) 1,955
Net proceeds from issuance of long-term debt 654 3,016 3,048
Payments on long-term debt (3,583) (2,638) (3,187)
Purchases of treasury shares (595) (644) (229)
Net proceeds from issuance of common stock 112 244 129
Tax benefits in excess of recognized compensation cost
for stock-based awards 13 28 —
Cash dividends paid (570) (557) (531)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 5,556 (1,970) 2,128
NET (DECREASE) INCREASE IN CASH AND DUE FROM BANKS (450) (844) 654
CASH AND DUE FROM BANKS AT BEGINNING OF YEAR 2,264 3,108 2,454
CASH AND DUE FROM BANKS AT END OF YEAR $ 1,814 $ 2,264 $ 3,108
Additional disclosures relative to cash flow:
Interest paid $2,913 $2,704 $1,737
Income taxes paid 342 467 195
Noncash items:
Cash dividends declared, but not paid $148 ——
Assets acquired 129 — $81
Liabilities assumed 126 —7
Loans transferred to other real estate owned 35 $72 47
Loans transferred from portfolio to held for sale —2,474 —
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS