<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 11-K
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the Fiscal Year Ended December 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From ________ To _______
Commission File Number 0-850
KEYCORP 401(k) SAVINGS PLAN
---------------------------------------
(Full title of the plan)
KEYCORP
127 PUBLIC SQUARE
CLEVELAND, OHIO 44114
---------------------------------------
(Name of issuer of the securities held
pursuant to the plan and the address
of its principal executive office)
<PAGE> 2
KEYCORP
401(k) SAVINGS PLAN
FORM 11-K
REQUIRED INFORMATION
- --------------------
Item 4. Financial Statements and Supplemental Schedules for the Plan.
The KeyCorp 401(k) Savings Plan ("Plan") is subject to the Employee Retirement
Income Security Act of 1974 ("ERISA"). In lieu of the requirements of Items 1-3
of this Form, the Plan is filing financial statements and supplemental
schedules prepared in accordance with the financial reporting requirements of
ERISA. The Plan financial statements and supplemental schedules for the fiscal
year ended December 31, 1996, are included as Exhibit 99.1 to this report on
Form 11-K and are incorporated herein by reference. The Plan financial
statements and supplemental schedules have been examined by Ernst & Young LLP,
Independent Auditors, and their report in included therein.
EXHIBITS
- -------
23.1 Consent of Independent Auditors, Ernst & Young LLP
99.1 Financial statements and supplemental schedules of the KeyCorp 401(k)
Savings Plan for the fiscal year ended December 31, 1996, prepared in
accordance with the financial reporting requirements of ERISA.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the trustees (or
other persons who administer the plan) have duly caused this annual report to
be signed on its behalf by the undersigned hereunto duly authorized.
KeyCorp 401(k) Savings Plan
Date: June 30, 1997
By: /s/ Richard V. Mazzola
Richard V. Mazzola
Vice President
<PAGE> 1
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the KeyCorp Registration
Statements (Form S-8 No. 33-45518, No. 33-46278, and No. 33-54819) pertaining to
the KeyCorp 401(k) Savings Plan of our report dated June 23, 1997, with respect
to the financial statements and schedules of the KeyCorp 401(k) Savings Plan
included in this Annual Report (Form 11-K) for the period ended December 31,
1996.
Ernst & Young LLP
Cleveland, Ohio
June 23, 1997
<PAGE> 1
Exhibit 99.1
REPORT OF INDEPENDENT AUDITORS
Compensation and Organization Committee
KeyCorp
We have audited the accompanying statements of net assets available for benefits
of the KeyCorp 401(k) Savings Plan as of December 31, 1996 and 1995, and the
related statements of changes in net assets available for benefits for the
periods then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the KeyCorp
401(k) Savings Plan at December 31, 1996 and 1995, and the changes in its net
assets available for benefits for the periods then ended, in conformity with
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment as of December 31, 1996, and reportable transactions for the
period then ended, are presented for purposes of complying with the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974, and are not a required part of the
financial statements. The fund information in the statements of net assets
available for benefits and the statements of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for benefits and changes in net assets avaliable for
benefits of each fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
Cleveland, Ohio
June 23, 1997
1
<PAGE> 2
KEYCORP 401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Intermediate
KeyCorp Value Loan Balanced Income
Stock Fund Fund Fund Fund Fund
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
KeyCorp common stock
(cost $338,442,936) $774,608,794
Insurance company contract 1,000,000
Interest in collective trusts and
mutual funds (cost $384,523,670) 5,607,845 $207,017,566 $50,479,565 $69,026,690
Loans to participants $34,138,156 93,642
-------------------------------------------------------------------------------------
Total investments 781,216,639 207,017,566 34,138,156 50,479,565 69,120,332
Cash 33,891 389 291
Contributions receivable-Employer 1,120,368 250,406 92,327 60,586
Contributions receivable-Participants 699,851 583,609 217,692 138,399
Income receivable 204,148 4,898 3,400 389
Other receivable 254,607 122,816 88,974 38,631
-------------------------------------------------------------------------------------
Total assets 783,529,504 207,979,684 34,138,447 50,881,958 69,358,337
LIABILITIES
ESOP indebtedness 48,864,000
Other liabilities 1,205,692 963,585 393,350 404,111 243,148
-------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $733,459,812 $207,016,099 $33,745,097 $50,477,847 $69,115,189
=====================================================================================
<CAPTION>
Special Stock Money
Value Index Market
Fund Fund Fund Total
------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
KeyCorp common stock
(cost $338,442,936) $774,608,794
Insurance company contract 1,000,000
Interest in collective trusts and
mutual funds (cost $384,523,670) $7,613,636 $8,475,397 $86,477,309 434,698,008
Loans to participants 34,231,798
------------------------------------------------------------------
Total investments 7,613,636 8,475,397 86,477,309 1,244,538,600
Cash 63 34,634
Contributions receivable-Employer 16,197 18,841 73,821 1,632,546
Contributions receivable-Participants 39,601 45,853 169,405 1,894,410
Income receivable 380,808 593,643
Other receivable 33,497 40,692 52,521 631,738
------------------------------------------------------------------
Total assets 7,702,931 8,580,783 87,153,927 1,249,325,571
LIABILITIES
ESOP indebtedness 48,864,000
Other liabilities 89,296 105,390 26,142 3,430,714
------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $7,613,635 $8,475,393 $87,127,785 $1,197,030,857
==================================================================
</TABLE>
See notes to financial statements.
2
<PAGE> 3
KEYCORP 401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
KeyCorp
Stock Fund Equity Fund Loan Fund Balanced Fund
------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
KeyCorp common stock
(cost $323,682,686) $ 578,437,952
Common stock-other (cost $51,765) $ 761,859
Insurance company contract
Interest in collective trusts and mutual funds
(cost $319,937,715) 4,145,132 160,954,350 $27,192,066
Loans to participants $ 32,834,046
------------------------------------------------------------------
Total investments 582,583,084 161,716,209 32,834,046 27,192,066
Cash 13,120 13,764
Contributions receivable-Employer 750 375
Contributions receivable-Participants 1,473 750
Income receivable 75,978 11,665
Other receivable 250,845
------------------------------------------------------------------
Total assets 582,923,027 161,730,097 32,847,810 27,193,191
LIABILITIES
ESOP indebtedness 51,408,924
Other liabilities 1,595,175 1,200,602 433,206
------------------------------------------------------------------
$ 529,918,928 $ 160,529,495 $ 32,847,810 $ 26,759,985
==================================================================
NET ASSETS AVAILABLE FOR BENEFITS
<CAPTION>
Money Market
Bond Fund Fund Total
--------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments, at fair value:
KeyCorp common stock
(cost $323,682,686) $ 578,437,952
Common stock-other (cost $51,765) 761,859
Insurance company contract $ 1,000,000 1,000,000
Interest in collective trusts and mutual funds
(cost $319,937,715) 78,586,086 $ 78,824,154 349,701,788
Loans to participants 110,207 32,944,253
--------------------------------------------------
Total investments 79,696,293 78,824,154 962,845,852
Cash 26,884
Contributions receivable-Employer 750 1,875
Contributions receivable-Participants 2,223
Income receivable 72,756 362,828 523,227
Other receivable 1,381 252,226
--------------------------------------------------
Total assets 79,769,799 79,188,363 963,652,287
LIABILITIES
ESOP indebtedness 51,408,924
Other liabilities 404,571 3,633,554
--------------------------------------------------
$ 79,365,228 $ 79,188,363 $ 908,609,809
==================================================
NET ASSETS AVAILABLE FOR BENEFITS
</TABLE>
See notes to financial statements.
3
<PAGE> 4
KEYCORP 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE PERIOD FROM JANUARY 1, 1996 TO DECEMBER 31, 1996
<TABLE>
<CAPTION>
Intermediate Special
KeyCorp Value Loan Balanced Income Value
Stock Fund Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASES
Contributions:
Employer $ 23,353,542 $ 6,465,460 $ 2,318,459 $ 1,726,989 $ 106,974
Participants 18,925,989 16,088,581 6,211,129 4,123,410 522,345
----------------------------------------------------------------------------------------------
42,279,531 22,554,041 8,529,588 5,850,399 629,319
Interest on participant loans $ 2,388,367
Common stock dividends 23,760,859
Net investment gain from collective
trusts and mutual funds 1,158,314 3,219,488 1,265,290 4,551,477 30,954
Net realized gain and unrealized
appreciation, KeyCorp common
stock 222,326,623
Net realized gain and unrealized
appreciation, collective trusts
and mutual funds 34,788,267 4,148,111 275,549
----------------------------------------------------------------------------------------------
Total increases 289,525,327 60,561,796 2,388,367 13,942,989 10,401,876 935,822
DECREASES
Net realized loss and unrealized
depreciation, collective trusts
and mutual funds 999,074
Participant withdrawals 51,456,386 16,110,636 2,911,028 3,317,763 7,810,028 87,688
Interest expense 4,662,170
Administrative and other expenses 262,540 1,693
----------------------------------------------------------------------------------------------
Total decreases 56,381,096 16,110,636 2,911,028 3,319,456 8,809,102 87,688
----------------------------------------------------------------------------------------------
Changes in net assets 233,144,231 44,451,160 (522,661) 10,623,533 1,592,774 848,134
Interfund transfer in (out) (29,603,347) 2,035,444 1,419,948 13,094,329 (11,842,813) 6,765,501
Net assets at beginning of period 529,918,928 160,529,495 32,847,810 26,759,985 79,365,228
----------------------------------------------------------------------------------------------
NET ASSETS AT END OF PERIOD $ 733,459,812 $ 207,016,099 $ 33,745,097 $ 50,477,847 $ 69,115,189 $ 7,613,635
==============================================================================================
<CAPTION>
Stock Money
Index Market
Fund Fund Total
--------------------------------------------------
<S> <C> <C> <C>
INCREASES
Contributions:
Employer $ 140,112 $ 1,988,220 $ 36,099,756
Participants 500,064 5,045,469 51,416,987
--------------------------------------------------
640,176 7,033,689 87,516,743
Interest on participant loans 2,388,367
Common stock dividends 23,760,859
Net investment gain from collective
trusts and mutual funds 81,126 4,187,943 14,494,592
Net realized gain and unrealized
appreciation, KeyCorp common
stock 222,326,623
Net realized gain and unrealized
appreciation, collective trusts
and mutual funds 503,266 39,715,193
--------------------------------------------------
Total increases 1,224,568 11,221,632 390,202,377
DECREASES
Net realized loss and unrealized
depreciation, collective trusts
and mutual funds 999,074
Participant withdrawals 45,592 14,116,731 95,855,852
Interest expense 4,662,170
Administrative and other expenses 264,233
--------------------------------------------------
Total decreases 45,592 14,116,731 101,781,329
--------------------------------------------------
Changes in net assets 1,178,976 (2,895,099) 288,421,048
Interfund transfer in (out) 7,296,417 10,834,521
Net assets at beginning of period 79,188,363
908,609,809
--------------------------------------------------
NET ASSETS AT END OF PERIOD $ 8,475,393 $ 87,127,785 $ 1,197,030,857
==================================================
</TABLE>
See notes to financial statements.
4
<PAGE> 5
KEYCORP 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE PERIOD FROM DECEMBER 31, 1994 TO DECEMBER 31, 1995
<TABLE>
<CAPTION>
KeyCorp
Stock Fund Equity Fund Loan Fund Balanced Fund Bond Fund
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASES
Contributions:
Employer $ 20,918,020 $ 5,779,273 $ 1,817,134 $ 2,104,707
Participants 17,922,275 15,312,795 5,233,655 5,455,258
------------------------------------------------------------------------------------
38,840,295 21,092,068 7,050,789 7,559,965
Interest on participant loans $ 2,270,419
Common stock dividends 22,291,248 41,170
Net investment gain from collective trusts
and mutual funds 662,970 3,822,406 742,413 4,719,726
Net realized gain and unrealized
appreciation, KeyCorp common stock 178,546,499
Net realized gain and unrealized
appreciation, collective trusts and
mutual funds 33,066,058 2,256,670 3,414,343
------------------------------------------------------------------------------------
Total increases 240,341,012 58,021,702 2,270,419 10,049,872 15,694,034
DECREASES
Participant withdrawals 33,082,964 11,988,933 1,444,766 8,261,965
Interest expense 5,359,774
Administrative and other expenses 701,691 38,896 492,350 2,842 37,984
------------------------------------------------------------------------------------
Total decreases 39,144,429 12,027,829 492,350 1,447,608 8,299,949
------------------------------------------------------------------------------------
Changes in net assets 201,196,583 45,993,873 1,778,069 8,602,264 7,394,085
Plan merger-KeyCorp 74,761,328 66,941,548 14,685,018 34,790,100
Plan merger-State Home 1,153,929 38,136 504,685 849,998
Plan merger-First Citizens 1,938,584
Fund merger (19,164,357) 43,645,186
Interfund transfer in (out) (4,447,369) 2,138,940 2,096,151 10,942,390 (7,314,141)
Net assets at beginning of period 258,408,386 44,301,205 33,414,793 4,772,062
------------------------------------------------------------------------------------
NET ASSETS AT END OF PERIOD $ 529,918,928 $ 160,529,495 $ 32,847,810 $26,759,985 $ 79,365,228
====================================================================================
<CAPTION>
Special Fixed Money Market
Income Fund Fund Total
------------------------------------------------------
<S> <C> <C> <C>
INCREASES
Contributions:
Employer $ 2,453,741 $ 33,072,875
Participants 6,782,298 50,706,281
------------------------------------------------------
9,236,039 83,779,156
Interest on participant loans 2,270,419
Common stock dividends 22,332,418
Net investment gain from collective trusts
and mutual funds 5,028,583 14,976,098
Net realized gain and unrealized
appreciation, KeyCorp common stock 178,546,499
Net realized gain and unrealized
appreciation, collective trusts and
mutual funds 3,139 38,740,210
------------------------------------------------------
Total increases 14,267,761 340,644,800
DECREASES
Participant withdrawals 10,659,810 65,438,438
Interest expense 5,359,774
Administrative and other expenses 110,172 1,383,935
------------------------------------------------------
Total decreases 10,769,982 72,182,147
------------------------------------------------------
Changes in net assets 3,497,779 268,462,653
Plan merger-KeyCorp 67,979,239 259,157,233
Plan merger-State Home 820,695 3,367,443
Plan merger-First Citizens 1,938,584
Fund merger $ (24,480,829)
Interfund transfer in (out) (3,415,971)
Net assets at beginning of period 24,480,829 10,306,621 375,683,896
------------------------------------------------------
NET ASSETS AT END OF PERIOD $ 0 $ 79,188,363 $ 908,609,809
======================================================
</TABLE>
See notes to financial statements.
5
<PAGE> 6
KeyCorp 401(k) Savings Plan
Notes to Financial Statements
For the Periods Ended December 31, 1996 and 1995
A. SIGNIFICANT ACCOUNTING PRINCIPLES
The accounting records of the KeyCorp 401(k) Savings Plan (the "Plan") are
maintained on the accrual basis.
Investments are stated at aggregate fair value which is determined based on the
closing price reported on the last business day of the Plan year as follows:
KEYCORP COMMON STOCK
Closing market price as quoted on the NYSE exchange as of December 31, 1996
and 1995.
INSURANCE CONTRACTS
At contract value which in the opinion of the management of the Plan
represents fair value.
COLLECTIVE TRUST FUNDS
Market values of units held in collective trust funds are determined daily
by the trustee of the funds.
MUTUAL FUNDS
Closing price as quoted per the Wall Street Journal as of December 31, 1996
and 1995.
The change in the difference between fair value and the cost of investments is
reflected in the statements of changes in net assets available for benefits as a
component of either (1) net realized gain and unrealized appreciation, KeyCorp
common stock, or (2) net realized gain and unrealized appreciation
(depreciation), collective trusts and mutual funds.
Purchases and sales of securities are reflected on a trade-date basis. Gains or
losses on sale of securities are based on the specific cost of investments sold.
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded as earned on the accrual basis.
6
<PAGE> 7
KeyCorp 401(k) Savings Plan
Notes to Financial Statements--Continued
A. SIGNIFICANT ACCOUNTING PRINCIPLES - CONTINUED
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Certain 1995 amounts have been reclassified to conform to current period
presentation.
B. MERGERS
On July 1, 1996, the Plan was amended and restated. The following amendments are
effective:
- The name of the Equity Fund was changed to the Value Fund.
- The name of the Bond Fund was changed to the Intermediate Income
Fund.
- The Special Value Fund and Stock Index Fund were added as
investment options.
The Plan was amended effective January 1, 1995, to provide for the merger of the
KeyCorp Profit Sharing Plus Plan, with and into the Plan, and to change the name
of the Plan to the "KeyCorp 401(k) Savings Plan." The following amendments are
also effective January 1, 1995:
- The Special Fixed Income Fund is eliminated as an investment
option.
- Participant eligibility was changed to a minimum of 1,000 hours
in any 12 month period.
- The number of Plan loans that a Participant may have outstanding
at any time is increased from two to three.
- The Plan year end is changed from December 30 to December 31.
7
<PAGE> 8
KeyCorp 401(k) Savings Plan
Notes to Financial Statements--Continued
B. MERGERS - CONTINUED
In an agreement dated May 5, 1994, State Home Savings Bank, FSB entered into an
Agreement and Plan of Merger with Society National Bank. In an agreement dated
June 30, 1994, First Citizens Bancorp of Indiana entered into an Agreement and
Plan of Merger with KeyCorp. As provided in the respective agreements, the State
Home Saving Bank 401(k) Profit Sharing Plan and the Citizens Banking Company
401(k) Retirement Plan and Trust continued in effect until such date
participants were provided the opportunity to participate in the benefit plans
maintained by KeyCorp. All participants employed at the effective date of the
respective mergers became fully vested in their account balances. Effective
March 31, 1995, the State Home Savings Bank 401(k) Profit Sharing Plan and the
Citizens Banking Company 401(k) Retirement Plan and Trust were merged with and
into the KeyCorp 401(k) Savings Plan and all assets were transferred to the
KeyCorp Plan.
C. DESCRIPTION OF THE PLAN
The following provides only general information regarding the Plan. Participants
should refer to the Plan document or summary plan description for a more
complete description of the Plan's provisions.
The Plan is a defined contribution plan which contains two primary features. The
portion of the Plan that is attributable to participant contributions is a
profit sharing plan and the portion of the Plan that is attributable to Employer
contributions is designed to be invested primarily in KeyCorp's common stock and
constitutes an employee stock ownership plan ("ESOP").
Employees are eligible to participate in the Plan if they have completed 15 days
of employment with KeyCorp.
Participants make contributions to the Plan by means of payroll deductions.
Participants can elect to make contributions (pre-tax) from 1% to 10% of their
compensation. KeyCorp matches the contributions dollar for dollar up to a
maximum of 6% of compensation. A minimum of 50% of the matching contribution is
in the form of KeyCorp common stock. Matching contributions of KeyCorp common
stock are made either by releasing shares from the Plan's ESOP feature or by
purchasing in the open market.
8
<PAGE> 9
KeyCorp 401(k) Savings Plan
Notes to Financial Statements--Continued
C. DESCRIPTION OF THE PLAN--CONTINUED
In addition, KeyCorp may contribute to the Plan a profit sharing amount
determined by the Board of Directors, which is to be allocated to participants
at the end of the Plan year. A participant's voluntary contributions are
currently limited to the maximum allowable amount under the Internal Revenue
Code.
A participant's interest in Employer contributions is vested after completion of
three full years of service. Forfeitures of a participant's account before the
participant has become fully vested may be used to reduce Employer
contributions, to pay amounts needed to correct errors, to resolve claims in
respect to benefit payments, to offset administrative expenses of the Plan or to
facilitate stock transactions required for Plan investment or distribution
purposes.
Participants may withdraw amounts from their account subject to specific
provisions of the Plan regarding which contribution amounts (Employee Pre-Tax
Contributions, Employer Matching or Profit Sharing Contributions, etc.) are to
be withdrawn.
Loans are available to participants based only on pre-tax contributions and a
participant may have a maximum of three loans outstanding at one time. Upon
termination, participants may receive a distribution of cash or stock from their
Employee Stock Fund account and cash from all other accounts. Participants may
leave their balance in the Plan if the balance is greater than $3,500. Upon
retirement, the distribution of benefits to participants is made in either a
lump sum payment or monthly cash installments at the participant's option.
Distributions must begin by the year in which a participant reaches age 70-1/2.
The Employer has the right under the Plan to discontinue contributions at any
time and terminate the Plan. In the event of termination of the Plan, the assets
of the Plan will be distributed to the participants based on the amounts in
their respective accounts.
D. INVESTMENTS
Key Trust Company of Ohio, N.A., an affiliate of KeyCorp, serves as the trustee
for certain assets of the Plan with the balance held in trust by Wachovia Bank
of North Carolina, N.A. Financial information regarding the assets held by the
Plan are included in the accompanying financial statements and in the table
below based on information provided by the trustees.
9
<PAGE> 10
KeyCorp 401(k) Savings Plan
Notes to Financial Statements--Continued
D. INVESTMENTS--CONTINUED
Upon enrollment, participants direct all of their participant contributions for
investment in one of several funds in 5% increments. Plan participants have the
option to invest in the KeyCorp Stock Fund and/or a combination of six funds
which hold collective investment trust funds and/or mutual funds: the Value
Fund, the Balanced Fund, the Intermediate Income Fund, the Special Value Fund,
the Stock Index Fund and the Institutional Money Market Fund.
All of the above mentioned collective investment trust funds and mutual funds
are sponsored by affiliates of KeyCorp. The aggregate cost of investment sales
in all of the above collective trust funds is the average cost per share or per
unit at the time of the sale.
During the periods ended December 31, 1996 and 1995, the Plan's investments
(including realized gains and losses on investments held for any portion of the
Plan year) appreciated in fair market value $261,042,742 and $217,286,709,
respectively as follows:
<TABLE>
<CAPTION>
Net Appreciation
(Depreciation) in
Fair Value Fair Value at
During Year End of Year
------------------------------------
<S> <C> <C>
Year ended December 31, 1996:
Fair value as determined by quoted market price:
KeyCorp Stock Fund $222,326,623 $781,216,639
Value Fund 34,788,267 207,017,566
Balanced Fund 4,148,111 50,479,565
Intermediate Income Fund (999,074) 69,120,332
Special Value Fund 275,549 7,613,636
Stock Index Fund 503,266 8,475,397
Money Market Fund 86,477,309
Fair value as determined by trustee:
Loan Fund 34,138,156
---------------------------------
$261,042,742 $1,244,538,600
=================================
</TABLE>
10
<PAGE> 11
KeyCorp 401(k) Savings Plan
Notes to Financial Statements--Continued
D. INVESTMENTS--CONTINUED
<TABLE>
<CAPTION>
Net Appreciation
in Fair Value Fair Value at
During Year End of Year
---------------------------------------------
<S> <C> <C>
Year ended December 31, 1995:
Fair value as determined by quoted market price:
KeyCorp Stock Fund $ 178,546,499 $ 582,583,084
Equity Fund 33,066,058 161,716,209
Bond Fund 3,414,343 79,696,293
Balanced Fund 2,256,670 27,192,066
Fair value as determined by trustee:
Loan Fund 32,834,046
Money Market Fund 3,139 78,824,154
--------------------------------------------
$ 217,286,709 $ 962,845,852
============================================
</TABLE>
The fair value of investments that represent 5% or more of the Plan's net assets
are as follows:
<TABLE>
<CAPTION>
1996 1995
--------------------------------------
<S> <C> <C>
KeyCorp Common Stock $ 774,608,794 $ 578,437,952
Victory Value Fund 207,016,105 159,545,171
Victory Institutional Money Market Fund 86,505,083 81,020,818
Victory Limited Term Income Fund 78,155,363
Victory Intermediate Income Fund 69,002,100
</TABLE>
E. INCOME TAX STATUS
The Internal Revenue Service has ruled that effective December 13, 1996, the
Plan, as amended, is qualified under Section 401(a) of the Internal Revenue Code
and is, therefore, not subject to tax under present income tax laws.
11
<PAGE> 12
KeyCorp 401(k) Savings Plan
Notes to Financial Statements--Continued
E. INCOME TAX STATUS--CONTINUED
Participants will not be subject to income tax for contributions made on their
behalf by KeyCorp nor on any money earned by the Plan and credited to their
account until the participants withdraw all or a portion of their accumulative
balance.
F. EMPLOYEE STOCK OWNERSHIP PLAN
The Plan structure includes a leveraged ESOP. The Plan sponsor loaned the
proceeds of funds borrowed from several institutional investors to the ESOP.
These funds were used to purchase shares of KeyCorp's common stock. The ESOP
debt is secured by KeyCorp common stock held by the ESOP trustee. The ESOP will
repay the loans from KeyCorp using corporate contributions made to the Plan on
behalf of participants and dividends on the common stock acquired with the
loans. The amount of dividends received on ESOP shares used for debt service
totaled approximately $5,047,000 and $4,800,000 for 1996 and 1995, respectively.
Except for the repayment schedule, the loans to the ESOP are subject to
substantially similar terms as the borrowings from institutional investors. The
loan agreement consisted of two separate loans, one bearing interest at 8.255%,
due June 26, 1996 (which was paid in full in March 1996), and the other at
8.404%, due in annual installments commencing July 14, 1997, through July 14,
2001, each subject to rate increases as described in the agreements.
The common stock of KeyCorp held by the ESOP was initially classified as
unallocated by the Plan. Shares of common stock are allocated to participants as
KeyCorp elects to make matching contributions from the ESOP. The allocation is
made based on market value at the time of allocation. The related carrying value
is determined based on the original purchase price. During the periods ended
December 31, 1996 and 1995, 235,157 and 635,892 shares of common stock,
respectively, were reclassified to allocated. At December 31, 1996 and 1995,
1,706,514 and 1,941,671 shares of common stock, respectively, were classified as
unallocated.
12
<PAGE> 13
KeyCorp 401(k) Savings Plan
Notes to Financial Statements--Continued
G. TRANSACTIONS WITH PARTIES-IN-INTEREST
The Plan's trustee, Key Trust Company of Ohio, N.A., is an affiliate of the Plan
sponsor. All investments and transactions are maintained and initiated by the
trustee. During 1996 and 1995, the Plan received $23,763,251 and $21,850,465,
respectively, in common stock dividends from shares of KeyCorp. The Plan invests
in certain collective investment funds and in certain mutual funds from which
the Plan received $31,030 and $401,201 in investment income and $13,316,523 and
$12,924,108 of dividend income in 1996 and 1995, respectively.
During the periods ended December 31, 1996 and 1995, 1,475,807 and 1,772,267
shares of common stock of KeyCorp were purchased by the Plan for $59,191,723 and
$55,740,915, respectively, and 1,627,728 and 1,130,459 shares of common stock of
KeyCorp were sold by the Plan for $66,276,498 and $36,061,386, respectively.
13
<PAGE> 14
KeyCorp 401(k) Savings Plan
Supplemental Schedule 27(a)--Schedule of
Assets Held for Investment
December 31, 1996
<TABLE>
<CAPTION>
Number
of Shares/ Current
Description of Assets Par Value Value Cost
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
KEYCORP STOCK FUND
* KeyCorp common stock 15,338,788 $774,608,794 $338,442,936
DTF Short-Term Investment Fund 4,707,046 4,707,046 4,707,046
Insurance Company Contracts:
Confederation Life Issurance Company,
9.4%, due April 16, 1995 1,000,000 1,000,000 1,000,000
Collective trust of Key Trust Company of
Ohio, N.A
**EB Money Market Fund 900,799 900,799 900,799
----------------------------
Total KeyCorp Stock Fund 781,216,639 345,050,781
VALUE FUND
**Victory Institutional Money Market Fund 1,461 1,461 1,461
**Victory Value Stock Fund 14,537,648 207,016,105 161,613,569
----------------------------
Total Value Fund 207,017,566 161,615,030
LOAN FUND
Loans to participants 34,138,156 34,138,156 34,138,156
BALANCED FUND
**Victory Balanced Fund 4,100,556 50,477,844 46,357,880
**Victory Institutional Money Market Fund 1,721 1,721 1,721
----------------------------
Total Balanced Fund 50,479,565 46,359,601
</TABLE>
14
<PAGE> 15
KeyCorp 401(k) Savings Plan
Supplemental Schedule 27(a)--Schedule of
Assets Held for Investment--Continued
<TABLE>
<CAPTION>
Number
of Shares/ Current
Description of Assets Par Value Value Cost
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INTERMEDIATE INCOME FUND
**Victory Intermediate Income Fund 7,248,120 69,002,100 68,520,271
**Victory Institutional Money
Market Fund 24,590 24,590 24,590
Loans to participants 93,642 93,642 93,642
---------------------------------
Total Intermediate Income Fund 69,120,332 68,639,503
SPECIAL VALUE FUND
**Victory Special Value Fund 551,713 7,613,634 7,802,008
**Victory Institutional Money
Market Fund 2 2 2
---------------------------------
Total Special Value Fund 7,613,636 7,802,010
STOCK INDEX FUND
**Key Stock Index Fund 784,759 8,475,397 8,116,014
MONEY MARKET FUND
**Victory Institutional Money
Market Fund 86,477,309 86,477,309 86,477,309
---------------------------------
TOTAL ASSETS HELD FOR INVESTMENT $1,244,538,600 $758,198,404
=================================
<FN>
* Denotes a party-in-interest investment.
** Denotes a party-in-interest investment. The investment is managed by KeyCorp's affiliate, Key Asset Management Inc. (formerly
known as Society Asset Management, Inc.)
</TABLE>
15
<PAGE> 16
KeyCorp 401(k) Savings Plan
Schedule of Reportable Transactions
Supplemental Schedule 27(d)--Transactions or Series of Transactions
in Excess of 5% of the Current Value of Plan Assets
Period Ended December 31, 1996
<TABLE>
<CAPTION>
Purchase
Description Units Price Selling Price Cost of Assets Net Gain
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
*KEYCORP COMMON STOCK
106 purchases 1,475,807 shares $59,191,723
195 sales 1,627,728 shares $66,276,498 $35,024,329 $31,252,168
**VICTORY INSTITUTIONAL MONEY
MARKET FUND
347 purchases 61,417,159 shares 61,417,159
288 sales 55,932,893 shares 55,932,893 55,932,893 0
**VICTORY LIMITED TERM INCOME FUND
51 purchases 714,818 shares 7,232,048
48 sales 8,377,108 shares 83,849,971 82,853,434 996,537
**VICTORY INTERMEDIATE INCOME FUND
44 purchases 8,313,674 shares 78,588,492
82 sales 1,086,481 shares 10,323,973 10,267,437 56,536
**VICTORY VALUE FUND
113 purchases 3,508,843 shares 47,708,539
120 sales 1,964,931 shares 35,854,616 21,132,687 14,721,929
DTF SHORT-TERM INVESTMENT FUND
210 purchases 93,515,304 shares 93,515,304
265 sales 92,265,838 shares 92,265,838 92,265,838 0
<FN>
The purchase price of securities acquired represented the fair value at the
dates of the above transactions.
* Denotes a party-in-interest investment.
** Denotes a party-in-interest investment. The investment is managed by KeyCorp's affiliate, Key Asset Management Inc.
(formerly known as Society Asset Management, Inc.)
</TABLE>
16
