Securities

Securities consisted of the following available-for-sale investments:



December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Continuing operations:
Money market funds	$	80	$	—	$	—	$	80
Securities available-for-sale - continuing operations	$	80	$	—	$	—	$	80
Securities available-for-sale - discontinued operations⁽¹⁾	$	1,231	$	180	$	—	$	1,411



December 31, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in millions)
Continuing operations:
U.S. Treasury	$	80	$	—	$	—		$	80
U.S. government sponsored enterprises⁽²⁾	1		—		—			1
U.S. corporate debt securities⁽³⁾	57		1		(1		)	57
Foreign debt securities⁽⁴⁾	26		—		—			26
Equity securities	10		—		—			10
Money market funds	13		—		—			13
Subtotal	187		1		(1		)	187
Accrued investment income	1		—		—			1
Securities available-for-sale - continuing operations	$	188	$	1	$	(1	)	$	188
Securities available-for-sale - discontinued operations⁽¹⁾	$	1,694	$	165	$	(8	)	$	1,851


⁽¹⁾	Securities available-for-sale in our discontinued operations relates to our discontinued Insurance business and primarily consists of U.S. corporate debt securities, money market funds and foreign debt securities at December 31, 2012 and 2011.


⁽²⁾	Represents mortgage-backed securities issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation as of December 31, 2011.


⁽³⁾	The majority of our U.S. corporate debt securities represented investments in the financial services, consumer products and insurance sectors at December 31, 2011.


⁽⁴⁾	We did not hold any foreign debt securities issued by the governments of Portugal, Ireland, Italy, Greece or Spain at December 31, 2011. We did not hold any foreign debt securities at December 31, 2012.

At December 31, 2012, we did not hold any available-for-sale securities from continuing operations with gross unrealized losses. The table below provides a summary of gross unrealized losses and related fair values as of December 31, 2011 for available-for-sale securities for continuing operations classified as to the length of time the losses have existed.



	Less Than One Year						Greater Than One Year
December 31, 2011	Number of Securities	Gross Unrealized Losses			Aggregate Fair Value of Investments		Number of Securities	Gross Unrealized Losses		Aggregate Fair Value of Investments
	(dollars are in millions)
U.S. corporate debt securities	17	$	(1	)	$	26	—	$	—	$	—
Foreign debt securities	10	—			15		—	—		—
Equity Securities	1	—			5		—	—		—
	28	$	(1	)	$	46	—	$	—	$	—

We review our securities whenever there is an unrealized loss in accordance with our accounting policies for other-than-temporary impairment (“OTTI”). As a result of this review, no OTTI was recorded during 2012. During 2011 and 2010, an OTTI of less than $1 million was recognized in earnings on certain debt securities. In addition, during 2010 we recognized a recovery in accumulated other comprehensive income relating to the non-credit component of OTTI previously recognized in accumulated other comprehensive income totaling $4 million.

As it relates to the securities of our discontinued operations, these securities are part of a disposal group that were classified as held for sale during the second quarter of 2012 and moved to assets of discontinued operations. See Note 2, “Discontinued Operations,” for additional information.

On-Going Assessment for Other-Than-Temporary Impairment On a quarterly basis, we perform an assessment to determine whether there have been any events or economic circumstances to indicate that a security with an unrealized loss has suffered other-than-temporary impairment. A debt security is considered impaired if the fair value is less than its amortized cost basis at the reporting date. If impaired, we then assess whether the unrealized loss is other-than-temporary.

An unrealized loss is generally deemed to be other-than-temporary and a credit loss is deemed to exist if the present value of the expected future cash flows is less than the amortized cost basis of the debt security. As a result, the credit loss component of an other-than-temporary impairment write-down for debt securities is recorded in earnings while the remaining portion of the impairment loss is recognized net of tax in other comprehensive income (loss) provided we do not intend to sell the underlying debt security and it is more-likely-than-not that we would not have to sell the debt security prior to recovery.

We consider the following factors in determining whether a credit loss exists and the period over which the debt security is expected to recover:


•	The length of time and the extent to which the fair value has been less than the amortized cost basis;


•	The level of credit enhancement provided by the structure which includes, but is not limited to, credit subordination positions, overcollateralization, protective triggers and financial guarantees provided by monoline wraps;


•	Changes in the near term prospects of the issuer or underlying collateral of a security, such as changes in default rates, loss severities given default and significant changes in prepayment assumptions;


•	The level of excess cash flows generated from the underlying collateral supporting the principal and interest payments of the debt securities; and


•	Any adverse change to the credit conditions of the issuer or the security such as credit downgrades by the rating agencies.

At December 31, 2011, approximately 90 percent of our corporate debt securities from our continuing operations were rated A- or better. During the third quarter of 2012, we sold all of our remaining corporate debt securities that were held as part of continuing operations.

If the fair value of a particular security is below its amortized cost for more than 12 months, it does not necessarily result in a credit loss and hence other-than-temporary impairment. The decline in fair value may be caused by, among other things, the illiquidity of the market. To the extent we do not intend to sell the debt security and it is more-likely-than-not we will not be required to sell the security before the recovery of the amortized cost basis, no other-than-temporary impairment is deemed to have occurred.

For available-for-sale securities in our discontinued operations, at December 31, 2012, approximately 86 percent of our corporate debt securities are rated A- or better and approximately 80 percent of our asset-backed securities, which totaled $14 million are rated AAA. At December 31, 2011, approximately 88 percent of our corporate debt securities for discontinued operations are rated A- or better and approximately 91 percent of our asset-backed securities for discontinued operations, which totaled $27 million are rated AAA. Other-than-temporary impairments may occur in future periods if the credit quality of the securities deteriorates.

The following table summarizes gross realized gains and losses for continuing operations during 2012, 2011 or 2010:



Year Ended December 31,	2012		2011		2010
	(in millions)
Gross realized gains on available-for-sale securities	$	3	$	26	$	—
Gross realized losses on available-for-sale securities	—		11		—