KeyBank 2014 Annual Report Download - page 187

The acquisition of Pacific Crest Securities during the third quarter of 2014 resulted in a $78 million increase in
the goodwill recorded in the Key Corporate Bank unit. Additional information regarding the acquisition is
provided in Note 13 (“Acquisitions and Discontinued Operations”).
As of December 31, 2014, we expected goodwill in the amount of $112 million to be deductible for tax purposes
in future periods.
Accumulated impairment losses related to the Key Corporate Bank reporting unit totaled $665 million at
December 31, 2014, 2013, and 2012. There were no accumulated impairment losses related to the Key
Community Bank unit at December 31, 2014, 2013, and 2012.
The following table shows the gross carrying amount and the accumulated amortization of intangible assets
subject to amortization.
2014 2013
December 31,
in millions
Gross Carrying
Amount
Accumulated
Amortization
Gross Carrying
Amount
Accumulated
Amortization
Intangible assets subject to amortization:
Core deposit intangibles $ 105 $ 82 $ 105 $ 70
PCCR intangibles 136 69 136 44
Other intangible assets (a) 148 137 135 135
Total $ 389 $ 288 $ 376 $ 249
(a) Carrying amount and accumulated amortization excludes $18 million each at December 31, 2014, and December 31, 2013, related to the
discontinued operations of Austin and the sale of Victory.
As a result of the acquisition of Pacific Crest Securities on September 3, 2014, intangible assets were recognized
at their acquisition date fair value of $13 million. These intangible assets are being amortized on a straight line
basis over an average useful life of five years.
As a result of the Western New York branches acquisition on July 13, 2012, a core deposit intangible asset was
recognized at its acquisition date fair value of $40 million. This core deposit intangible asset is being amortized
on an accelerated basis over its useful life of seven years. A second closing of this acquisition on September 14,
2012, relating exclusively to the purchase of credit card receivables, resulted in a PCCR intangible asset of $1
million that is being amortized on an accelerated basis over its useful life of eight years.
As a result of the purchase of Key-branded credit card assets from Elan Financial Services, Inc. on August 1,
2012, a PCCR intangible asset was recognized at its acquisition date fair value of $135 million. This PCCR asset
is being amortized on an accelerated basis over its useful life of eight years.
Intangible asset amortization expense was $39 million for 2014, $44 million for 2013, and $23 million for 2012.
Estimated amortization expense for intangible assets for each of the next five years is as follows: 2015 — $36
million; 2016 — $28 million; 2017 — $19 million; 2018 — $11 million; and 2019 — $5 million.
11. Variable Interest Entities
A VIE is a partnership, limited liability company, trust, or other legal entity that meets any one of the following
criteria:
/The entity does not have sufficient equity to conduct its activities without additional subordinated financial
support from another party.
/The entity’s investors lack the power to direct the activities that most significantly impact the entity’s
economic performance.
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