KeyBank 2014 Annual Report Download - page 201

The following table summarizes our securities financing agreements at December 31, 2014, and December 31,
2013:
December 31, 2014
in millions
Gross Amount
Presented in
Balance Sheet
Netting
Adjustments (a) Collateral (b)
Net
Amounts
Offsetting of financial assets:
Reverse repurchase agreements $ 3 $ (1) $ (2) —
Securities borrowed —— ——
Total $ 3 $ (1) $ (2) —
Offsetting of financial liabilities:
Repurchase agreements $ 1 $ (1) — —
Total $ 1 $ (1) — —
December 31, 2013
in millions
Gross Amount
Presented in
Balance Sheet
Netting
Adjustments (a) Collateral (b)
Net
Amounts
Offsetting of financial assets:
Reverse repurchase agreements $ 347 $ (278) $ (66) $ 3
Securities borrowed 12 — (12) —
Total $ 359 $ (278) $ (78) $ 3
Offsetting of financial liabilities:
Repurchase agreements $ 517 $ (278) $ (239) —
Total $ 517 $ (278) $ (239) —
(a) Netting adjustments take into account the impact of master netting agreements that allow us to settle with a single counterparty on a net
basis.
(b) These adjustments take into account the impact of bilateral collateral agreements that allow us to offset the net positions with the related
collateral. The application of collateral cannot reduce the net position below zero. Therefore, excess collateral, if any, is not reflected
above.
Like other financing transactions, securities financing agreements contain an element of credit risk. To mitigate
and manage credit risk exposure, we generally enter into master netting agreements and other collateral
arrangements that give us the right, in the event of default, to liquidate collateral held and to offset receivables
and payables with the same counterparty. Additionally, we establish and monitor limits on our counterparty
credit risk exposure by product type. For the reverse repurchase agreements, we monitor the value of the
underlying securities we have received from counterparties and either request additional collateral or return a
portion of the collateral based on the value of those securities. We generally hold collateral in the form of highly
rated securities issued by the U.S. Treasury and fixed income securities. In addition, we may need to provide
collateral to counterparties under our repurchase agreements and securities borrowed transactions. In general, the
collateral we pledge and receive can be sold or repledged by the secured parties.
15. Stock-Based Compensation
We maintain several stock-based compensation plans, which are described below. Total compensation expense for
these plans was $46 million for 2014, $38 million for 2013, and $53 million for 2012. The total income tax benefit
recognized in the income statement for these plans was $17 million for 2014, $14 million for 2013, and $20 million for
2012. Stock-based compensation expense related to awards granted to employees is recorded in “personnel expense”
on the income statement; compensation expense related to awards granted to directors is recorded in “other expense.”
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