KeyBank 2014 Annual Report Download - page 198

The results of this discontinued business are included in “income (loss) from discontinued operations, net of
taxes” on the income statement. The components of “income (loss) from discontinued operations, net of taxes”
for Victory, which includes the additional gain recorded as of March 31, 2014, on the sale of this business, are as
follows:
Year ended December 31,
in millions 2014 2013 2012
Net interest income $12 ——
Noninterest income 10 $ 212 $ 111
Noninterest expense 166 89
Income (loss) before income taxes 21 146 22
Income taxes 854 8
Income (loss) from discontinued operations, net of taxes $13$92$14
The discontinued assets and liabilities of Victory included on the balance sheet are as follows:
December 31,
in millions 2014 2013
Seller note (a) —$29
Total assets —$29
Accrued expense and other liabilities ——
Total liabilities ——
(a) At December 31, 2013, the only remaining asset of Victory was the Seller note. The Seller note was paid off during the fourth quarter of
2014.
The Seller note was accounted for at fair value and classified as a Level 3 asset through December 31, 2013.
Since the contingency involving certain fund outflows was resolved, the Seller note was no longer accounted for
at fair value subsequent to December 31, 2013.
The following table presents the Victory Seller note that was measured at fair value on a recurring basis at
December 31, 2013.
December 31, 2013
in millions Level 1 Level 2 Level 3 Total
ASSETS MEASURED ON A RECURRING BASIS
Seller note ——$29$29
Total assets on a recurring basis at fair value — — $ 29 $ 29
The following table shows the change in the fair value of the Level 3 Victory Seller note for the years ended
December 31, 2014, and December 31, 2013.
in millions Seller note
Balance at December 31, 2012 —
Gains (losses) recognized in earnings (a) $(3)
Issuances 32
Balance at December 31, 2013 29
Gains (losses) recognized in earnings (a) (1)
Settlements (28)
Balance at December 31, 2014 (b) —
185