KeyBank 2014 Annual Report Download - page 44

Introduction
This section reviews the financial condition and results of operations of KeyCorp and its subsidiaries for each of
the past three years. Some tables include additional periods to comply with disclosure requirements or to
illustrate trends in greater depth. When you read this discussion, you should also refer to the consolidated
financial statements and related notes in this report. The page locations of specific sections that we refer to are
presented in the table of contents.
Terminology
Throughout this discussion, references to “Key,” “we,” “our,” “us,” and similar terms refer to the consolidated
entity consisting of KeyCorp and its subsidiaries. “KeyCorp” refers solely to the parent holding company, and
“KeyBank” refers solely to KeyCorp’s subsidiary bank, KeyBank National Association. KeyBank (consolidated)
refers to the consolidated entity consisting of KeyBank and its subsidiaries.
We want to explain some industry-specific terms at the outset so you can better understand the discussion that
follows.
/We use the phrase continuing operations in this document to mean all of our businesses other than the
education lending business, Victory, and Austin. The education lending business and Austin have been
accounted for as discontinued operations since 2009. Victory was classified as a discontinued operation in
our first quarter 2013 financial reporting as a result of the sale of this business as announced on February 21,
2013, and closed on July 31, 2013.
/Our exit loan portfolios are separate from our discontinued operations. These portfolios, which are in a
run-off mode, stem from product lines we decided to cease because they no longer fit with our corporate
strategy. These exit loan portfolios are included in Other Segments.
/We engage in capital markets activities primarily through business conducted by our Key Corporate Bank
segment.These activities encompass a variety of products and services. Among other things, we trade
securities as a dealer, enter into derivative contracts (both to accommodate clients’ financing needs and to
mitigate certain risks), and conduct transactions in foreign currencies (both to accommodate clients’ needs
and to benefit from fluctuations in exchange rates).
/For regulatory purposes, capital is divided into two classes. Federal regulations currently prescribe that at
least one-half of a bank or BHC’s total risk-based capital must qualify as Tier 1 capital. Both total and Tier
1 capital serve as bases for several measures of capital adequacy, which is an important indicator of
financial stability and condition. As described under the heading “Regulatory capital and liquidity —
Capital planning and stress testing” in the section entitled “Supervision and Regulation” in Item 1 of this
report, the regulators are required to conduct a supervisory capital assessment of all BHCs with assets of at
least $50 billion, including KeyCorp. As part of this capital adequacy review, banking regulators evaluate a
component of Tier 1 capital, known as Tier 1 common equity. The section entitled “Capital — Capital
adequacy” in this MD&A provides more information on total capital, Tier 1 capital, and Tier 1 common
equity and describes how the three measures are calculated.
Additionally, a comprehensive list of the acronyms and abbreviations used throughout this discussion is included
in Note 1 (“Summary of Significant Accounting Policies”).
33