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Investments in Marketable Securities
 3 Months Ended
Sep. 30, 2012
Investments in Marketable Securities [Abstract]  
Investments in Marketable Securities

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:

 

    September 30, 2012
    Amortized  Unrealized  Unrealized  Fair
(Dollars in millions)cost  gains losses  value
Available-for-sale securities:           
 Debt instruments:           
  U.S. government and agency obligations$ 138 $ 4 $ - $ 142
  Municipal debt securities  18   4   -   22
  Certificates of deposit  1,844   1   -   1,845
  Commercial paper  511   -   -   511
  Foreign government debt securities  3   -   -   3
  Corporate debt securities  85   7   -   92
  Mortgage-backed securities:           
   U.S. government agency  98   6   -   104
   Non-agency residential  6   1   -   7
   Non-agency commercial  23   1   -   24
  Asset-backed securities  9   -   -   9
 Equity instruments:           
  Fixed income mutual funds:           
   Short-term sector fund  38   3   -   41
   U.S. government sector fund  293   16   -   309
   Municipal sector fund  19   3   -   22
   Investment grade corporate sector fund  262   52   -   314
   High-yield sector fund  32   7   -   39
   Real return sector fund  276   14   -   290
   Mortgage sector fund  647   -   (2)   645
   Asset-backed securities sector fund  37   7   -   44
   Emerging market sector fund  60   6   -   66
   International sector fund  152   13   -   165
  Equity mutual fund  273   193   -   466
Total investments in marketable securities$ 4,824 $ 338 $ (2) $5,160

Note 3 – Investments in Marketable Securities (Continued)
               
     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

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 $1.9 billion and $1.8 billion at September 30, 2012 and March 31, 2012, respectively. For each fund, cash redemption limits may apply to each 90 day period.

Note 3 – Investments in Marketable Securities (Continued)

 

OTTI Securities

 

There were no available-for-sale debt or equity securities deemed to be other-than-temporarily impaired for the three and six months ended September 30, 2012 and September 30, 2011.

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, net of applicable taxes in our Consolidated Statement of Shareholder's Equity:
               
    Less than 12 months as of
    September 30, 2012 March 31, 2012
    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)
Equity instruments:            
 U.S. government sector fund   -   -   237   (2)
 Mortgage sector fund   529   (2)   639   (12)
Total investments in marketable             
 securities $ 529 $ (2) $ 944 $ (15)
               

At September 30, 2012 and March 31, 2012, 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.

 

Realized Gains and Losses on Sales of Available-For-Sale Securities

Realized gains and losses from the sale of available-for-sale securities are as follows:

   Three Months Ended Six Months Ended
   September 30, September 30,
(Dollars in millions)2012201120122011
Available-for-sale securities:            
 Realized gains on sales $ 5 $ - $ 9 $12
 Realized losses on sales $ 1 $ 35 $ 2 $35

Note 3 – Investments in Marketable Securities (Continued)

 

Contractual Maturities and Yields

 

The contractual maturities of investments in marketable securities at September 30, 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 Yearsthrough 10 YearsDue after 10 Years Total 
(Dollars in millions)Amount YieldAmount YieldAmount YieldAmount YieldAmount Yield
Fair Value of Available-for-Sale Securities:                    
Debt instruments:                         
U.S. government and                          
 agency obligations$ 2  0.05%$ 49  1.29%$ 80  1.75%$ 11  1.84%$ 142  1.52%
Municipal debt securities  -  -   3  4.38   1  5.54   18  6.00   22  5.76 
Certificates of deposit  1,845  0.67   -  -   -  -   -  -   1,845  0.67 
Commercial paper  511  0.18   -  -   -  -   -  -   511  0.18 
Foreign government debt                          
 securities  -  -   3  2.93   -  -   -  -   3  2.93 
Corporate debt                          
 securities  2  4.85   52  4.41   37  5.13   1  7.86   92  4.72 
Mortgage-backed securities:                        
 U.S. government agency -  -   -  -   5  4.29   99  3.63   104  3.67 
 Non-agency residential -  -   -  -   -  -   7  8.07   7  8.07 
 Non-agency commercial -  -   4  3.45   2  0.86   18  3.91   24  3.62 
Asset-backed securities  -  -   1  2.93   3  1.01   5  1.56   9  1.67 
Debt instruments total  2,360  0.57   112  2.97   128  2.85   159  3.95   2,759  0.96 
                          
Equity instruments:                         
Fixed income mutual funds                    1,935  4.47 
Equity mutual fund                     466  3.53 
Equity instruments total  -     -     -     -     2,401  4.29 
Total fair value$ 2,360  0.57%$ 112  2.97%$ 128  2.85%$ 159  3.95%$ 5,160  2.51%
Total amortized cost$ 2,359   $ 107   $ 122   $147   $4,824   

Yields are based on the amortized cost balances of securities held at September 30, 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 both September 30, 2012 and March 31, 2012.