KeyBank 2014 Annual Report Download - page 190

12. Income Taxes
Income taxes included in the income statement are summarized below. We file a consolidated federal income tax
return.
Year ended December 31,
in millions 2014 2013 2012
Currently payable:
Federal $ 288 $ 216 $ 178
State 33 26 18
Total currently payable 321 242 196
Deferred:
Federal 16 39 41
State (11) (10) (6)
Total deferred 529 35
Total income tax (benefit) expense (a) $ 326 $ 271 $ 231
(a) There was no income tax (benefit) expense recorded on securities transactions in 2014 and 2012. The income tax (benefit) expense on
securities transactions totaled $1 million in 2013. Income tax expense excludes equity- and gross receipts-based taxes, which are assessed
in lieu of an income tax in certain states in which we operate. These taxes, which are recorded in “noninterest expense” on the income
statement, totaled $17 million in 2014, $23 million in 2013, and $29 million in 2012.
Significant components of our deferred tax assets and liabilities included in “accrued income and other assets”
and “accrued expense and other liabilities,” respectively, on the balance sheet, are as follows:
December 31,
in millions 2014 2013
Allowance for loan and lease losses $ 316 $ 334
Employee benefits 251 187
Net unrealized securities losses 17 45
Federal credit carryforwards 96 226
State net operating losses and credits 911
Other 312 302
Gross deferred tax assets 1,001 1,105
Less: valuation allowance —1
Total deferred tax assets 1,001 1,104
Leasing transactions 682 753
Other 125 141
Total deferred tax liabilities 807 894
Net deferred tax assets (liabilities) (a) $ 194 $ 210
(a) From continuing operations
We conduct quarterly assessments of all available evidence to determine the amount of deferred tax assets that
are more-likely-than-not to be realized, and therefore recorded. The available evidence used in connection with
these assessments includes taxable income in prior periods, projected future taxable income, potential tax-
planning strategies, and projected future reversals of deferred tax items. These assessments involve a degree of
subjectivity and may undergo significant change. Based on these criteria, we have recorded a valuation allowance
of less than $1 million dollars against the gross deferred tax assets associated with certain state net operating loss
carryforwards and state credit carryforwards.
At December 31, 2014, we had a federal credit carryforward of $96 million. Additionally, we had state net
operating loss carryforwards of $62 million and state credit carryforwards of $6 million, resulting in a net state
deferred tax asset of $9 million. These carryforwards are subject to limitations imposed by tax laws and, if not
utilized, will gradually expire through 2031.
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