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Key calculates its basic and diluted earnings per common share as follows: 

## 2. EARNINGS PER COMMON SHARE 

<img src='content_image/36368.jpg'>

Key completed the following acquisitions and divestiture during the past three years. 

## ACQUISITIONS 

## NewBridge Partners LLC 

On July 1, 2003, Key acquired NewBridge Partners LLC, a growth equity investment management firm headquartered in New York City with managed assets of $1.8 billion at the date of acquisition. The terms of the transaction are not material to Key and have not been disclosed. 

## Union Bankshares, Ltd. 

On December 12, 2002, Key purchased Union Bankshares, Ltd., the holding company for Union Bank & Trust, a seven-branch bank headquartered in Denver, Colorado. Key paid $22.63 per Union Bankshares common share for a total cash consideration of $66 million. Goodwill of approximately $34 million and core deposit intangibles of $13 million were recorded. Union Bankshares, Ltd. had assets of $475 million at the date of acquisition. On January 17, 2003, Union Bank & Trust was merged into KBNA. 

## Conning Asset Management 

On June 28, 2002, Key purchased substantially all of the mortgage loan and real estate business of Conning Asset Management, headquartered in Hartford, Connecticut. Conning’s mortgage loan and real estate 

## 3. ACQUISITIONS AND DIVESTITURE 

business originates, securitizes and services multi-family, retail, industrial and office property mortgage loans on behalf of pension fund and life insurance company investors. At the date of acquisition, this business had net assets of $17 million and serviced approximately $4 billion in commercial mortgage loans through its St. Louis office. In accordance with a confidentiality clause in the purchase agreement, the terms, which are not material to Key, have not been disclosed. 

## The Wallach Company, Inc. 

On January 2, 2001, Key purchased The Wallach Company, Inc., an investment banking firm headquartered in Denver, Colorado. Key paid the purchase price of approximately $11 million using a combination of cash and 370,830 Key common shares. Goodwill of approximately $9 million was recorded and, prior to the adoption of SFAS No. 142, “Goodwill and Other Intangible Assets,” on January 1, 2002, was being amortized using the straight-line method over a period of 10 years. 

## DIVESTITURE 

## 401(k) Recordkeeping Business 

On June 12, 2002, Key sold its 401(k) plan record-keeping business. Key recognized a gain of $3 million ($2 million after tax) on the transaction, which is included in “other income” on the income statement. 

