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.



	September 30, 2012									December 31, 2011
	Amortized cost		Gross unrealized					Fair value		Amortized cost		Gross unrealized					Fair value
($ in millions)	Amortized cost		gains		losses			Fair value		Amortized cost		gains		losses			Fair value
Available-for-sale securities
Debt securities
U.S. Treasury and federal agencies	$	1,354	$	4	$	—		$	1,358	$	1,535	$	13	$	(2	)	$	1,546
U.S. states and political subdivisions	—		—		—			—		1		—		—			1
Foreign government	803		17		—			820		765		20		(1		)	784
Mortgage-backed residential (a)	6,269		114		(9		)	6,374		7,266		87		(41		)	7,312
Asset-backed	2,365		47		(1		)	2,411		2,600		28		(13		)	2,615
Corporate debt	1,349		59		(4		)	1,404		1,486		23		(18		)	1,491
Other	333		—		—			333		326		1		—			327
Total debt securities	12,473		241		(14		)	12,700		13,979		172		(75		)	14,076
Equity securities	1,114		28		(72		)	1,070		1,188		25		(154		)	1,059
Total available-for-sale securities (b)	$	13,587	$	269	$	(86	)	$	13,770	$	15,167	$	197	$	(229	)	$	15,135


(a)	Residential mortgage-backed securities include agency-backed bonds totaling $4,580 million and $6,114 million at September 30, 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 $15 million and $16 million at September 30, 2012, and December 31, 2011, respectively.

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
September 30, 2012
Fair value of available-for-sale debt securities (b)
U.S. Treasury and federal agencies	$	1,358	0.5	%	$	428	—	%	$	731	0.7	%	$	199	1.1	%	$	—	—	%
Foreign government	820		3.6		134		3.9		433		3.8		249		3.1		4		6.3
Mortgage-backed residential	6,374		2.7		—		—		4		5.3		182		2.3		6,188		2.7
Asset-backed	2,411		2.2		5		3.9		1,583		2.1		486		2.0		337		3.2
Corporate debt	1,404		5.2		18		3.9		637		4.2		621		6.2		128		5.7
Other	333		1.4		332		1.4		—		—		1		4.4		—		—
Total available-for-sale debt securities	$	12,700	2.6		$	917	1.2		$	3,388	2.3		$	1,738	3.3		$	6,657	2.7
Amortized cost of available-for-sale debt securities	$	12,473			$	916			$	3,339			$	1,682			$	6,536
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	%	$	—	—	%
U.S. 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 $7.3 billion and $5.6 billion at September 30, 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 and other-than-temporary impairment.



	Three months ended September 30,						Nine months ended September 30,
($ in millions)	2012			2011			2012			2011
Gross realized gains	$	55		$	90		$	224		$	288
Gross realized losses	(18		)	(15		)	(31		)	(37		)
Other-than-temporary impairment	(56		)	—			(56		)	—
Net realized (losses) gains	$	(19	)	$	75		$	137		$	251

The following table presents interest and dividends on available-for-sale securities.



	Three months ended September 30,				Nine months ended September 30,
($ in millions)	2012		2011		2012		2011
Taxable interest	$	67	$	96	$	225	$	294
Taxable dividends	6		6		18		17
Interest and dividends on available-for-sale securities	$	73	$	102	$	243	$	311

Certain available for sale securities were sold at a loss in 2012 and 2011 as a result of market conditions within these respective periods (e.g., a downgrade in the rating of a debt security). 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 September 30, 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 September 30, 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 September 30, 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.



	September 30, 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	$	22	$	—		$	—	$	—		$	179	$	(2	)	$	—	$	—
Foreign government	129		—			—		—			197		(1		)	—		—
Mortgage-backed residential	650		(7		)	86		(2		)	2,302		(39		)	45		(2		)
Asset-backed	130		(1		)	1		—			994		(13		)	1		—
Corporate debt	101		(2		)	19		(2		)	444		(16		)	30		(2		)
Total temporarily impaired debt securities	1,032		(10		)	106		(4		)	4,116		(71		)	76		(4		)
Temporarily impaired equity securities	299		(26		)	303		(46		)	770		(148		)	18		(6		)
Total temporarily impaired available-for-sale securities	$	1,331	$	(36	)	$	409	$	(50	)	$	4,886	$	(219	)	$	94	$	(10	)