Investments in Marketable Securities

12 Months Ended

Mar. 31, 2012

Investments in Marketable Securities [Abstract]

Note 3 – Investments in Marketable Securities

We classify all of our investments in marketable securities as available-for-sale. The amortized cost and estimated fair value of investments in marketable securities and related unrealized gains and losses were as follows:

				March 31, 2012
				Amortized		Unrealized		Unrealized			Fair
(Dollars in millions)				cost		gains		losses			value
Available-for-sale securities:
	Debt instruments:
		U.S. government and agency obligations		$	108	$	1	$	(1)	$	108
		Municipal debt securities			17		3		-		20
		Certificates of deposit			1,341		-		-		1,341
		Commercial paper			633		-		-		633
		Foreign government debt securities			3		-		-		3
		Corporate debt securities			100		7		-		107
		Mortgage-backed securities:
			U.S. government agency		100		5		-		105
			Non-agency residential		7		1		-		8
			Non-agency commercial		25		1		-		26
		Asset-backed securities			13		-		-		13
	Equity instruments:
		Fixed income mutual funds:
			Short-term sector fund		39		1		-		40
			U.S. government sector fund		319		-		(6)		313
			Municipal sector fund		19		2		-		21
			Investment grade corporate sector fund		261		37		-		298
			High-yield sector fund		31		6		-		37
			Real return sector fund		228		3		-		231
			Mortgage sector fund		651		-		(12)		639
			Asset-backed securities sector fund		37		4		-		41
			Emerging market sector fund		60		2		-		62
			International sector fund		143		19		-		162
		Equity mutual fund			268		183		-		451
Total investments in marketable securities				$	4,403	$	275	$	(19)	$	4,659

Note 3 – Investments in Marketable Securities (Continued)
					March 31, 2011¹
				Amortized		Unrealized		Unrealized			Fair
(Dollars in millions)					cost		gains		losses		value
Available-for-sale securities:
	Debt instruments:
		U.S. government and agency obligations		$	96	$	1	$	(2)	$	95
		Municipal debt securities			15		-		-		15
		Certificates of deposit			1,820		1		-		1,821
		Commercial paper			385		-		-		385
		Foreign government debt securities			5		-		-		5
		Corporate debt securities			121		5		-		126
		Mortgage-backed securities:
			U.S. government agency		77		2		(1)		78
			Non-agency residential		7		1		-		8
			Non-agency commercial		17		-		-		17
		Asset-backed securities			22		-		-		22
	Equity instruments:
		Fixed income mutual funds:
			Short-term sector fund		37		2		-		39
			U.S. government sector fund		526		-		(48)		478
			Municipal sector fund		18		-		-		18
			Investment grade corporate sector fund		279		38		-		317
			High-yield sector fund		27		8		-		35
			Real return sector fund		77		-		(1)		76
			Mortgage sector fund		644		-		(5)		639
			Asset-backed securities sector fund		34		5		-		39
			Emerging market sector fund		56		2		-		58
			International sector fund		136		2		(2)		136
		Equity mutual fund			259		156		-		415
Total investments in marketable securities				$	4,658	$	223	$	(59)	$	4,822

1 Certain prior period amounts have been reclassified to conform to the current period presentation.

The fixed income mutual funds include investments in funds that are privately placed. The total fair value of private placement fixed income mutual funds was $1.8 billion at March 31, 2012 and 2011. For each fund, cash redemption limits may apply to each 90 day period.

Note 3 – Investments in Marketable Securities (Continued)

OTTI Securities

For fiscal 2012, unrealized losses for AFS debt securities deemed to be other-than-temporarily impaired were recognized in Investment and other income, net and were not material to our Consolidated Statement of Income. For fiscal 2011, there were no AFS debt or equity securities deemed to be other-than-temporarily impaired.

Unrealized Losses on Securities

The following table presents the fair value and gross unrealized losses of investments in marketable securities that had been in a continuous unrealized loss position for less than twelve consecutive months. These unrealized losses are recorded in Accumulated Other Comprehensive Income:

			Less than 12 months as of
			March 31, 2012					March 31, 2011
			Fair		Unrealized		Fair		Unrealized
(Dollars in millions)			value		losses		value		losses
Available-for-sale securities:
Debt instruments:
	U.S. government and agency obligations		$	68	$	(1)	$	55	$	(2)
	U.S. government agency mortgage-
		backed securities		-		-		38		(1)
Equity instruments:
	U.S. government sector fund			237		(2)		478		(48)
	Real return sector fund			-		-		76		(1)
	Mortgage sector fund			639		(12)		639		(5)
	International sector fund			-		-		109		(2)
Total investments in marketable
	securities		$	944	$	(15)	$	1,395	$	(59)

At March 31, 2012 and March 31, 2011, total gross unrealized loss and fair value of investments that had been in a continuous unrealized loss position for 12 consecutive months or more were not material to our Consolidated Balance Sheet.

Note 3 – Investments in Marketable Securities (Continued)

Contractual Maturities and Yields

The contractual maturities of investments in marketable securities at March 31, 2012 are summarized in the following table. Prepayments may cause actual maturities to differ from scheduled maturities.

		Due in 1 Year or				Due after 1 Year				Due after 5 Years
			Less			through 5 Years				through 10 Years				Due after 10 Years					Total
(Dollars in millions)		Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield
Fair Value of Available-for-Sale Securities:
Debt instruments:
U.S. government and
	agency obligations	$	7	1.45	%	$	42	1.92	%	$	57	2.00	%	$	2	6.01	%	$	108	1.95	%
Municipal debt securities			-	-			-	-			1	5.51			19	6.05			20	6.01
Certificates of deposit			1,341	0.20			-	-			-	-			-	-			1,341	0.20
Commercial paper			633	0.02			-	-			-	-			-	-			633	0.02
Foreign government debt
	securities		-	-			3	2.93			-	-			-	-			3	2.93
Corporate debt
	securities		2	3.90			54	4.43			46	5.45			5	6.13			107	4.86
Mortgage-backed securities:
	U.S. government agency		-	-			-	-			6	4.48			99	4.05			105	4.08
	Non-agency residential		-	-			-	-			0	-			8	8.03			8	8.03
	Non-agency commercial		-	-			3	2.80			1	4.37			22	4.29			26	4.25
Asset-backed securities			-	-			5	2.39			2	1.03			6	1.14			13	1.71
Debt instruments total			1,983	0.15			107	3.29			113	3.59			161	4.48			2,364	0.75

Equity instruments:
Fixed income mutual funds																			1,844	4.92
Equity mutual funds																			451	3.15
Equity instruments total																			2,295	4.58

Total fair value		$	1,983	0.15	%	$	107	3.29	%	$	113	3.59	%	$	161	4.48	%	$	4,659	2.63	%
Total amortized cost		$	1,983			$	104			$	109			$	151			$	4,403

Yields are based on the amortized cost balances of securities held at March 31, 2012. Yields are derived by aggregating the monthly result of interest and dividend income (including the effect of related amortization of premiums and accretion of discounts) divided by amortized cost. Equity instruments do not have a stated maturity date.

Securities on Deposit

In accordance with statutory requirements, we had on deposit with state insurance authorities U.S. debt securities with amortized cost and fair value of $6 million at March 31, 2012 and March 31, 2011.

Note 3 – Investments in Marketable Securities (Continued)

Realized Gains and Losses on Sales of AFS Securities

Realized losses on sales included $7 million of impairment losses in fiscal 2010. There were no material impairment losses recorded in fiscal 2012 and 2011. Realized gains and losses from the sale of available-for-sale securities are as follows:


		Years ended March 31,
Available-for-sale securities:		2012		2011		2010
Realized gains on sales	$	16	$	70	$	32
Realized losses on sales	$	41	$	23	$	24