Winning MOVES BY HENRY L. MEYER lll While I am not satisfied with our 2003 results, I believe we are well positioned to improve on this perform- ance in 2004. We took several positive steps during the year – both within our three major business groups and across the company – to address Key’s top priorities: grow revenue, manage expenses and improve credit quality. I n 2003, Key earned $903 million, or $2.12 per diluted common share. That compares with the prior year’s earnings of $976 million, or $2.27 per share.  financial performance. It requires an absolute adherence to the highest levels of ethical conduct. We were pleased to be rated highly for our corporate governance practices among the 1,600 public companies evaluated in 2003 by GovernanceMetrics International, an independent organization that is pioneering accountability ratings on behalf of investors.  Such qualities and the progress we are making have been rewarded. The total return on our shares, which includes price appreciation and divi- dend payments, was approximately 22 percent in 2003. It was about 8 percent But the current business environ- ment demands more of us than strong The group also refined its data analytics and modeling techniques, such as predicting a client’s next most likely need and creating sales leads Consumer Banking dramatically simplified its organization structure during the year, and appointed a new national sales manager. Now, all employees share the same goal: to build deep and profitable relationships with clients. To reinforce this mindset, the group instituted rigorous measurement and monitoring systems that encourage frequent contact with clients and prospects, an important precursor to growth. First, Group President Jack Kopnisky and his team have reduced back-office expenses and reallocated those resources to enhance sales. They opened 13 KeyCenters in 2003, reintroduced drive-up windows where appropriate and extended service hours. They hired an additional 125 relationship managers (RMs), and licensed approximately 250 employees to sell investment products. Consumer Banking also marketed more aggressively, introducing, for example, free checking and, earlier this year, free online bill pay. And the group empha- sized sales activity in call centers and on our Internet site, Key.com, which have traditionally focused on service.  I am optimistic about Consumer Banking’s prospects for several reasons. Strong demand for Consumer Banking’s home equity solutions, fueled by low interest rates and robust con- sumer spending, helped drive the improvement. Lower demand by small businesses for loans, and the effect of our May 2001 decision to scale back our automobile financing business, masked the overall strength of this group relative to peers. Consumer Banking earned $425 million for the year, up approximately 7 percent from $399 million in 2002. the year before. As we continue to address our priorities, I expect to see shareholder value increase further. Business group results Consumer Banking 2  GLYPH<c5412> Key 2003 PREVIOUS PAGE SEARCH BACK TO CONTENTS NEXT PAGE Why Key is well positioned to deliver stronger results