KeyBank 2013 Annual Report Download - page 172

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Quantitative Information about Level 3 Fair Value Measurements
The range and weighted-average of the significant unobservable inputs used to fair value our material Level 3
recurring and nonrecurring assets at December 31, 2013, and December 31, 2012, along with the valuation
techniques used, are shown in the following table:
December 31, 2013
dollars in millions
Fair Value of
Level 3 Assets Valuation Technique
Significant
Unobservable Input
Range
(Weighted-Average)
Recurring
Other investments — principal investments —
direct:
$ 141 Individual analysis of the condition of
each investment
Debt instruments EBITDA multiple 6.00 - 7.00 (6.10)
Equity instruments of private companies EBITDA multiple (where applicable) 4.80 - 10.40 (6.20)
Revenue multiple (where applicable) 1.10 - 4.70 (4.00)
Nonrecurring
Impaired loans 16 Fair value of underlying collateral Discount 10.00 - 100.00% (36.00%)
Goodwill 979 Discounted cash flow and market data Earnings multiple of peers 10.10 - 14.40 (11.59)
Equity multiple of peers 1.17 - 1.29 (1.24)
Control premium N/A (35.00%)
Weighted-average cost of capital N/A (13.00%)
December 31, 2012
dollars in millions
Fair Value of
Level 3 Assets Valuation Technique
Significant
Unobservable Input
Range
(Weighted-Average)
Recurring
Other investments — principal investments —
direct:
$ 191 Individual analysis of the condition of
each investment
Debt instruments EBITDA multiple 5.50 - 6.00 (5.90)
Equity instruments of private companies EBITDA multiple (where applicable) 5.00 - 8.50 (6.10)
Revenue multiple (where applicable) 0.30 - 5.70 (4.80)
Nonrecurring
Impaired loans 25 Fair value of underlying collateral Discount 0.00 - 100.00% (45.00%)
Goodwill 979 Discounted cash flow and market data Earnings multiple of peers 9.70 - 14.20 (11.25)
Equity multiple of peers .95 - 1.17 (1.09)
Control premium N/A (30.00%)
Weighted-average cost of capital N/A (13.00%)
Fair Value Disclosures of Financial Instruments
The levels in the fair value hierarchy ascribed to our financial instruments and the related carrying amounts at
December 31, 2013, and December 31, 2012, are shown in the following table.
December 31, 2013
Fair Value
in millions
Carrying
Amount Level 1 Level 2 Level 3
Netting
Adjustment Total
ASSETS
Cash and short-term investments (a) $ 6,207 $ 5,860 $ 347 — — $ 6,207
Trading account assets (b) 738 4 734 — — 738
Securities available for sale (b) 12,346 20 12,326 — — 12,346
Held-to-maturity securities (c) 4,756 — 4,617 — — 4,617
Other investments (b) 969 — 392 $ 577 — 969
Loans, net of allowance (d) 53,609 — — 52,102 — 52,102
Loans held for sale (b) 611 — — 611 — 611
Mortgage servicing assets (e) 332 — — 386 — 386
Derivative assets (b) 407 56 1,134 29 $ (812) (f) 407
LIABILITIES
Deposits with no stated maturity (a) $ 62,425 — $ 62,425 — — $ 62,425
Time deposits (e) 6,837 $ 558 6,368 — — 6,926
Short-term borrowings (a) 1,877 2 1,875 — — 1,877
Long-term debt (e) 7,650 7,611 397 — — 8,008
Derivative liabilities (b) 414 49 864 $ 1 $ (500) (f) 414
157