KeyBank 2014 Annual Report Download - page 214

The Patient Protection and Affordable Care Act and the Education Reconciliation Act of 2010, which were both
signed into law in March 2010, changed the tax treatment of the federal subsidies described above. As a result of
these laws, these subsidy payments become taxable in tax years beginning after December 31, 2012. The
accounting guidance applicable to income taxes requires the impact of a change in tax law to be immediately
recognized in the period that includes the enactment date. However, these tax law changes did not affect us, as
we did not have a deferred tax asset recorded for Medicare Part D subsidies received.
Employee 401(k) Savings Plan
A substantial number of our employees are covered under a savings plan that is qualified under Section 401(k) of
the Internal Revenue Code. The plan permits employees to contribute from 1% to 100% of eligible
compensation, with up to 6% being eligible for matching contributions. Commencing January 1, 2010, an
automatic enrollment feature was added to the plan for all new employees. The initial default contribution
percentage for employees is 2% and will increase by 1% at the beginning of each plan year until the default
contribution is 10% for plan years on and after January 1, 2012. The plan also permits us to provide a
discretionary annual profit sharing contribution. We accrued a 2% contribution for 2014 and made contributions
of 2% for 2013 and 2.4% for 2012 on eligible compensation for employees eligible on the last business day of the
respective plan years. We also maintain a deferred savings plan that provides certain employees with benefits
they otherwise would not have been eligible to receive under the qualified plan once their compensation for the
plan year reached the IRS contribution limits. Total expense associated with the above plans was $70 million in
2014, $66 million in 2013, and $77 million in 2012.
17. Short-Term Borrowings
Selected financial information pertaining to the components of our short-term borrowings is as follows:
December 31,
dollars in millions 2014 2013 2012
FEDERAL FUNDS PURCHASED
Balance at year end $18$18$8
Average during the year 32 164 111
Maximum month-end balance 36 1,486 613
Weighted-average rate during the year .10% .09% .14%
Weighted-average rate at December 31 .08 .10 .15
SECURITIES SOLD UNDER REPURCHASE AGREEMENTS
Balance at year end $ 557 $ 1,516 $ 1,601
Average during the year 1,150 1,638 1,703
Maximum month-end balance 1,519 2,099 2,455
Weighted-average rate during the year .16% .13% .19%
Weighted-average rate at December 31 .01 .15 .14
OTHER SHORT-TERM BORROWINGS
Balance at year end $ 423 $ 343 $ 287
Average during the year 597 394 413
Maximum month-end balance 996 466 599
Weighted-average rate during the year 1.49% 1.89% 1.69%
Weighted-average rate at December 31 1.58 2.00 1.81
Rates exclude the effects of interest rate swaps and caps, which modify the repricing characteristics of certain short-term borrowings. For
more information about such financial instruments, see Note 8 (“Derivatives and Hedging Activities”).
As described below and in Note 18 (“Long-Term Debt”), KeyCorp and KeyBank have a number of programs and
facilities that support our short-term financing needs. Certain subsidiaries maintain credit facilities with third
parties, which provide alternative sources of funding. KeyCorp is the guarantor of some of the third-party
facilities.
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