Investments in Marketable Securities

12 Months Ended

Mar. 31, 2013

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, 2013
				Amortized		Unrealized		Unrealized			Fair
(Dollars in millions)				cost		gains		losses			value
Available-for-sale securities:
	Debt instruments:
		U.S. government and agency obligations		$	101	$	3	$	-	$	104
		Municipal debt securities			14		2		-		16
		Certificates of deposit			2,040		1		-		2,041
		Commercial paper			495		-		-		495
		Foreign government debt securities			3		-		-		3
		Corporate debt securities			122		6		-		128
		Mortgage-backed securities:
			U.S. government agency		83		4		-		87
			Non-agency residential		4		1		-		5
			Non-agency commercial		50		1		-		51
		Asset-backed securities			13		-		-		13
	Equity instruments:
		Fixed income mutual funds:
			Short-term sector fund		40		3		-		43
			U.S. government sector fund		296		16		-		312
			Municipal sector fund		19		3		-		22
			Investment grade corporate sector fund		273		54		-		327
			High-yield sector fund		34		8		-		42
			Real return sector fund		284		9		-		293
			Mortgage sector fund		663		-		(15)		648
			Asset-backed securities sector fund		38		9		-		47
			Emerging market sector fund		63		3		-		66
			International sector fund		163		7		-		170
		Equity mutual fund			259		225		-		484
Total investments in marketable securities				$	5,057	$	355	$	(15)	$	5,397

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 $2.0 billion and $1.8 billion at March 31, 2013 and March 31, 2012, respectively. For each fund, we may redeem shares solely in cash up to the lesser of $250 thousand or 1 percent of the individual fund's net assets during any 90 day period. Although the fund manager will normally redeem all shares for cash, in unusual circumstances, it reserves the right to pay any redemption exceeding this amount in whole or in part by a distribution in kind of securities held by the respective fund in lieu of cash.

Note 3 – Investments in Marketable Securities (Continued)

OTTI Securities

For fiscal 2013 and 2011, there were no available-for-sale securities with unrealized losses that were deemed to be other-than-temporarily impaired. For fiscal 2012, unrealized losses for available-for-sale 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.

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
		March 31, 2013					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		532		(12)		639		(12)
Total investments in marketable securities		$	532	$	(12)	$	944	$	(15)

At March 31, 2013, 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 $3 million and $116 million, respectively. At 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 AFS Securities

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

		Years ended March 31,
(Dollars in millions)		2013		2012		2011
Available-for-sale securities:
Realized gains on sales	$	23	$	16	$	70
Realized losses on sales	$	2	$	41	$	23

Note 3 – Investments in Marketable Securities (Continued)

Contractual Maturities and Yields

The contractual maturities of investments in marketable securities at March 31, 2013 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	$	12	0.11	%	$	46	1.44	%	$	41	1.78	%	$	5	1.84	%	$	104	1.52	%
Municipal debt securities			2	1.33			-	0.00			2	5.54			12	5.76			16	5.33
Certificates of deposit			2,041	0.56			-	0.00			-	0.00			-	0.00			2,041	0.56
Commercial paper			495	0.13			-	0.00			-	0.00			-	0.00			495	0.13
Foreign government debt
	securities		-	0.00			3	2.93			-	0.00			-	0.00			3	2.93
Corporate debt
	securities		10	4.75			51	4.52			56	4.80			11	6.09			128	4.60
Mortgage-backed securities:
	U.S. government agency		-	0.00			-	-			5	4.11			82	3.49			87	3.53
	Non-agency residential		-	0.00			-	0.00			-	0.00			5	10.92			5	10.92
	Non-agency commercial		-	0.00			4	3.56			2	1.23			45	3.65			51	3.44
Asset-backed securities			-	0.00			-	0.00			7	1.10			6	1.68			13	1.42
Debt instruments total			2,560	0.50			104	3.09			113	3.41			166	3.99			2,943	0.89

Equity instruments:
Fixed income mutual funds																			1,970	5.27
Equity mutual funds																			484	3.85
Equity instruments total			-				-				-				-				2,454	4.99

Total fair value		$	2,560	0.50	%	$	104	3.09	%	$	113	3.41	%	$	166	3.99	%	$	5,397	2.75	%
Total amortized cost		$	2,559			$	100			$	107			$	160			$	5,057

Yields are based on the amortized cost balances of securities held at March 31, 2013. 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, 2013 and March 31, 2012.