NOTES TO CONSOLIDATED FINANCIAL STATEMENTS KEYCORP AND SUBSIDIARIES RECONCILING ITEMS INVESTMENT MANAGEMENT SERVICES Investment Management Services includes Victory Capital Management and McDonald Financial Group.  Victory Capital Management manages or gives advice regarding investment portfolios for a national client base, including corporations, labor unions, not-for-profit organizations, governments and individuals. These portfolios may be managed in separate accounts, common funds or the Victory family of mutual funds.  Total assets included under “Reconciling Items” represent primarily the unallocated portion of nonearning assets of corporate support functions. Charges related to the funding of these assets are part of net interest income and are allocated to the business segments through noninterest expense. Reconciling Items also include certain items that are not allocated to the business segments because they are not reflective of their normal operations. McDonald Financial Group offers financial, estate and retirement planning and asset management services to assist high-net-worth clients with their banking, brokerage, trust, portfolio management, insurance, charitable giving and related needs. The table that spans pages 58 and 59 shows selected financial data for each major business group for the years ended December 31, 2003, 2002 and 2001. This table is accompanied by additional supplementary information for each of the lines of business that comprise these groups. The information was derived from the internal financial reporting system that management uses to monitor and manage Key’s financial performance. Accounting principles generally accepted in the United States guide financial accounting, but there is no authoritative guidance for “management accounting” — the way management uses its judgment and experience to make reporting decisions. Consequently, the line of business results Key reports may not be comparable with line of business results presented by other companies.  Other Segments consist primarily of Treasury, principal investing and the net effect of funds transfer pricing. OTHER SEGMENTS Other Segments Total Segments Reconciling Items b Key 2003 2002 2001 2003 2002 2001 2003 2002 2001 2003 2002 2001 $(230) $(106) $(130) $2,924 $2,973 $2,987 $(128) $(104) $ (117) $2,796 $2,869 $2,870 192 118 66 1,749 1,727 1,750 11 42 (25) 1,760 1,769 1,725 (38) 12 (64) 4,673 4,700 4,737 (117) (62) (142) 4,556 4,638 4,595 1 1 3 501 553 457 GLYPH<209> GLYPH<209> 893 501 553 1,350 GLYPH<209> 1 1 210 230 379 GLYPH<209> GLYPH<209> 151 210 230 530 34 25 23 2,569 2,483 2,468 (37) (60) (57) 2,532 2,423 2,411 (73) (15) (91) 1,393 1,434 1,433 (80) (2) (1,129) 1,313 1,432 304 (72) (49) (80) 478 494 519 (68) (38) (372) 410 456 147 (1) 34 (11) 915 940 914 (12) 36 (757) 903 976 157 GLYPH<209> GLYPH<209> (1) GLYPH<209> GLYPH<209> (25) GLYPH<209> GLYPH<209> GLYPH<209> GLYPH<209> GLYPH<209> (25) $ (1) $3 4 $ (12) $ 915 $ 940 $ 889 $ (12) $3 6 $ (757) $ 903 $ 976 $ 132 GLYPH<209>% 3% (9)% 101% 96% 673% (1)% 4% (573)% 100% 100% 100% GLYPH<209> 4 (1) 100 100 100 N/A N/A N/A N/A N/A N/A $ 918 $1 , 262 $ 1,833 $62,754 $63,250 $65,872 $ 125 $ 143 $ 104 $62,879 $63,393 $65,976 12,771 11,218 11,584 82,456 80,074 83,376 1,892 1,707 1,527 84,348 81,781 84,903 3,166 3,606 3,492 48,437 44,861 45,493 (94) (80) (38) 48,343 44,781 45,455 GLYPH<209> GLYPH<209> GLYPH<209> $8 4 $9 9 $8 8 $98 $95 $111 $182 $194 $199 $1 $1 $5 548 780 673 GLYPH<209> GLYPH<209> GLYPH<209> 548 780 673 N/M N/M N/M 13.91% 14.75% 13.61% N/M N/M N/M 13.08% 14.96% 2.01% 35 33 26 13,773 14,068 14,613 6,261 6,748 6,942 20,034 20,816 21,555  ¥ The provision for loan losses includes an additional $400 million ($252 million after tax) taken to increase the allowance for loan losses for KeyGLYPH<213>s continuing loan portfolio and an additional $490 million ($309 million after tax) recorded primarily in connection with KeyGLYPH<213>s decision to discontinue certain credit-only commercial relationships. ¥D epreciation and amortization expense includes a goodwill write-down of $150 million associated with the downsizing of the automobile GLYPH<222>nance business, and other noninterest expense includes charges of $20 million ($13 million after tax) taken to establish additional litigation reserves. TE = Taxable Equivalent, N/A = Not Applicable, N/M = Not Meaningful NEXT PAGE BACK TO CONTENTS SEARCH PREVIOUS PAGE 59