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Investment Securities
 3 Months Ended
Mar. 31, 2012
Available-for-sale Securities [Abstract]  
Investment Securities
Investment Securities
Our portfolio of securities includes bonds, equity securities, asset- and mortgage-backed securities, interests in securitization trusts, and other investments. The cost, fair value, and gross unrealized gains and losses on available-for-sale securities were as follows.
 
 
March 31, 2012
 
December 31, 2011
 
 
Amortized cost
 
Gross unrealized
 
Fair
value
 
Amortized cost
 
Gross unrealized
 
Fair
value
($ in millions)
 
gains  
 
losses  
 
gains  
 
losses  
 
Available-for-sale securities
 

 

 

 

 

 

 

 

Debt securities
 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies
 
$
1,438

 
$
7

 
$
(1
)
 
$
1,444

 
$
1,535

 
$
13

 
$
(2
)
 
$
1,546

States and political subdivisions
 
1

 
—

 
—

 
1

 
1

 
—

 
—

 
1

Foreign government
 
851

 
14

 
(1
)
 
864

 
765

 
20

 
(1
)
 
784

Mortgage-backed residential (a)
 
6,773

 
71

 
(25
)
 
6,819

 
7,266

 
87

 
(41
)
 
7,312

Asset-backed
 
2,679

 
33

 
(5
)
 
2,707

 
2,600

 
28

 
(13
)
 
2,615

Corporate debt
 
1,514

 
45

 
(8
)
 
1,551

 
1,486

 
23

 
(18
)
 
1,491

Other
 
582

 
—

 
—

 
582

 
326

 
1

 
—

 
327

Total debt securities 
 
13,838

 
170

 
(40
)
 
13,968

 
13,979

 
172

 
(75
)
 
14,076

Equity securities
 
1,046

 
24

 
(96
)
 
974

 
1,188

 
25

 
(154
)
 
1,059

Total available-for-sale securities (b)
 
$
14,884

 
$
194

 
$
(136
)
 
$
14,942

 
$
15,167

 
$
197

 
$
(229
)
 
$
15,135

(a)
Residential mortgage-backed securities include agency-backed bonds totaling $5,234 million and $6,114 million at March 31, 2012, and December 31, 2011, respectively.
(b)
Certain entities related to our Insurance operations are required to deposit securities with state regulatory authorities. These deposited securities totaled $16 million at both March 31, 2012, and December 31, 2011.
The maturity distribution of available-for-sale debt securities outstanding is summarized in the following tables. Prepayments may cause actual maturities to differ from scheduled maturities.
 
 
Total
 
Due in
one year
or less
 
Due after
one year
through
five years
 
Due after
five years
through
ten years
 
Due after
ten years (a)
($ in millions)
 
Amount
 
Yield
 
Amount
 
Yield
 
Amount
 
Yield
 
Amount
 
Yield
 
Amount
 
Yield
March 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of available-for-sale debt securities (b)
 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies
 
$
1,444

 
0.8
%
 
$
241

 
—
%
 
$
1,201

 
1.0
%
 
$
2

 
2.2
%
 
$
—

 
—
%
States and political subdivisions
 
1

 
5.4

 
—

 
—

 
—

 
—

 
—

 
—

 
1

 
5.4

Foreign government
 
864

 
3.8

 
65

 
7.4

 
555

 
4.0

 
244

 
2.5

 
—

 
—

Mortgage-backed residential
 
6,819

 
2.4

 
—

 
—

 
6

 
6.2

 
237

 
1.9

 
6,576

 
2.4

Asset-backed
 
2,707

 
2.1

 
—

 
—

 
1,611

 
1.9

 
522

 
2.0

 
574

 
3.0

Corporate debt
 
1,551

 
4.9

 
13

 
5.8

 
727

 
4.3

 
686

 
5.4

 
124

 
5.2

Other
 
582

 
1.4

 
571

 
1.4

 
—

 
—

 
11

 
4.1

 
—

 
—

Total available-for-sale debt securities
 
$
13,968

 
2.5

 
$
890

 
1.5

 
$
4,100

 
2.3

 
$
1,702

 
3.4

 
$
7,275

 
2.5

Amortized cost of available-for-sale debt securities
 
$
13,838

 
 
 
$
890

 
 
 
$
4,058

 
 
 
$
1,673

 
 
 
$
7,217

 
 
December 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of available-for-sale debt securities (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and federal agencies
 
$
1,546

 
0.9
%
 
$
231

 
—
%
 
$
1,202

 
0.9
%
 
$
113

 
2.2
%
 
$
—

 
—
%
States and political subdivisions
 
1

 
5.4

 
—

 
—

 
—

 
—

 
—

 
—

 
1

 
5.4

Foreign government
 
784

 
4.4

 
77

 
7.7

 
506

 
4.3

 
201

 
3.3

 
—

 
—

Mortgage-backed residential
 
7,312

 
2.5

 
3

 
4.8

 
2

 
6.3

 
189

 
2.6

 
7,118

 
2.5

Asset-backed
 
2,615

 
2.1

 
—

 
—

 
1,599

 
1.9

 
574

 
1.9

 
442

 
3.2

Corporate debt
 
1,491

 
4.9

 
19

 
4.9

 
741

 
4.4

 
606

 
5.6

 
125

 
4.7

Other
 
327

 
1.4

 
316

 
1.3

 
—

 
—

 
11

 
4.6

 
—

 
—

Total available-for-sale debt securities
 
$
14,076

 
2.6

 
$
646

 
1.7

 
$
4,050

 
2.4

 
$
1,694

 
3.5

 
$
7,686

 
2.6

Amortized cost of available-for-sale debt securities
 
$
13,979

 
 
 
$
644

 
 
 
$
4,026

 
 
 
$
1,678

 
 
 
$
7,631

 
 
(a)
Investments with no stated maturities are included as contractual maturities of greater than 10 years. Actual maturities may differ due to call or prepayment options.
(b)
Yields on tax-exempt obligations are computed on a tax-equivalent basis.
The balances of cash equivalents were $5.2 billion and $5.6 billion at March 31, 2012, and December 31, 2011, respectively, and were composed primarily of money market accounts and short-term securities, including U.S. Treasury bills.
The following table presents gross gains and losses realized upon the sales of available-for-sale securities. During the three months ended March 31, 2012, we did not recognize any other-than-temporary impairment on available-for-sale securities.
 
 
Three months  ended
March 31,
($ in millions)
 
2012
 
2011
Gross realized gains
 
$
98

 
$
94

Gross realized losses
 
(8
)
 
(10
)
Net realized gains
 
$
90

 
$
84

The following table presents interest and dividends on available-for-sale securities.
 
 
Three months  ended
March 31,
($ in millions)
 
2012
 
2011
Taxable interest
 
$
79

 
$
98

Taxable dividends
 
5

 
5

Interest and dividends on available-for-sale securities
 
$
84

 
$
103

The table below summarizes available-for-sale securities in an unrealized loss position in accumulated other comprehensive income. Based on the methodology described below that was applied to these securities, we believe that the unrealized losses relate to factors other than credit losses in the current market environment. As of March 31, 2012, we did not have the intent to sell the debt securities with an unrealized loss position in accumulated other comprehensive income, and it is not more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. As of March 31, 2012, we had the ability and intent to hold equity securities with an unrealized loss position in accumulated other comprehensive income. As a result, we believe that the securities with an unrealized loss position in accumulated other comprehensive income are not considered to be other-than-temporarily impaired at March 31, 2012. Refer to Note 1 to the Consolidated Financial Statements in our 2011 Annual Report on Form 10-K for additional information related to investment securities and our methodology for evaluating potential other-than-temporary impairments.
 
 
March 31, 2012
 
December 31, 2011
 
 
Less than
12 months
 
12 months
or longer
 
Less than
12 months
 
12 months
or longer
($ in millions)
 
Fair
value
 
Unrealized
loss
 
Fair
value
 
Unrealized
loss
 
Fair
value
 
Unrealized
loss
 
Fair
value
 
Unrealized
loss
Available-for-sale securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and federal agencies
 
$
477

 
$
—

 
$
—

 
$
—

 
$
179

 
$
(2
)
 
$
—

 
$
—

Foreign government
 
231

 
(1
)
 
—

 
—

 
197

 
(1
)
 
—

 
—

Mortgage-backed residential
 
2,499

 
(23
)
 
72

 
(3
)
 
2,302

 
(39
)
 
45

 
(2
)
Asset-backed
 
624

 
(5
)
 
8

 
—

 
994

 
(13
)
 
1

 
—

Corporate debt
 
241

 
(7
)
 
14

 
(1
)
 
444

 
(16
)
 
30

 
(2
)
Total temporarily impaired debt securities
 
4,072

 
(36
)
 
94

 
(4
)
 
4,116

 
(71
)
 
76

 
(4
)
Temporarily impaired equity securities
 
450

 
(65
)
 
91

 
(31
)
 
770

 
(148
)
 
18

 
(6
)
Total temporarily impaired available-for-sale securities
 
$
4,522

 
$
(101
)
 
$
185

 
$
(35
)
 
$
4,886

 
$
(219
)
 
$
94

 
$
(10
)