Offsetting Assets and Liabilities

3 Months Ended

Mar. 31, 2013

Offsetting Assets and Liabilities

Offsetting Assets and Liabilities

11.  Offsetting Assets and Liabilities

Certain financial instruments and derivative instruments are eligible for offset in the Consolidated Balance Sheets under U.S. GAAP. The Company’s derivative instruments, repurchase agreements and securities borrowing and lending agreements are subject to master netting arrangements and collateral arrangements and meet the U.S. GAAP guidance to qualify for offset. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. Securities borrowed and loaned result from transactions between the Company’s broker dealer subsidiary and other financial institutions and are recorded at the amount of cash collateral advanced or received. The Company’s policy is to recognize amounts subject to master netting arrangements on a gross basis on the Consolidated Balance Sheets.

The following tables present the gross and net information about the Company’s assets subject to master netting arrangements:

	March 31, 2013
			Gross		Amounts
	Gross		Amounts		of Assets		Gross Amounts Not Offset
	Amounts of		Offset in the		Presented in		in the Consolidated Balance Sheets
	Recognized		Consolidated		the Consolidated		Financial			Cash			Securities			Net
	Assets		Balance Sheets		Balance Sheets		Instruments (1)			Collateral			Collateral			Amount
	(in millions)
Derivatives:
OTC	$	3,280	$	—	$	3,280	$	(2,687	)	$	(307	)	$	(241	)	$	45
Exchange-traded	94		—		94		—			—			—			94
Total derivatives	3,374		—		3,374		(2,687		)	(307		)	(241		)	139
Securities borrowed	146		—		146		(58		)	(88		)	—			—
Total	$	3,520	$	—	$	3,520	$	(2,745	)	$	(395	)	$	(241	)	$	139

	December 31, 2012
			Gross		Amounts
	Gross		Amounts		of Assets		Gross Amounts Not Offset
	Amounts of		Offset in the		Presented in		in the Consolidated Balance Sheets
	Recognized		Consolidated		the Consolidated		Financial			Cash			Securities			Net
	Assets		Balance Sheets		Balance Sheets		Instruments (1)			Collateral			Collateral			Amount
	(in millions)
Derivatives:
OTC	$	3,527	$	—	$	3,527	$	(2,706	)	$	(428	)	$	(355	)	$	38
Exchange-traded	96		—		96		—			—			—			96
Total derivatives	3,623		—		3,623		(2,706		)	(428		)	(355		)	134
Securities borrowed	135		—		135		(67		)	(68		)	—			—
Total	$	3,758	$	—	$	3,758	$	(2,773	)	$	(496	)	$	(355	)	$	134

(1) Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar

arrangements that management elects not to offset on the Consolidated Balance Sheets.

The following tables present the gross and net information about the Company’s liabilities subject to master netting arrangements:

	March 31, 2013
			Gross		Amounts
	Gross		Amounts		of Liabilities		Gross Amounts Not Offset
	Amounts of		Offset in the		Presented in		in the Consolidated Balance Sheets
	Recognized		Consolidated		the Consolidated		Financial			Cash			Securities			Net
	Liabilities		Balance Sheets		Balance Sheets		Instruments (1)			Collateral			Collateral			Amount
	(in millions)
OTC derivatives	$	3,389	$	—	$	3,389	$	(2,687	)	$	(67	)	$	(634	)	$	1
Securities loaned	177		—		177		(58		)	(119		)	—			—
Repurchase agreements	200		—		200		—			—			(200		)	—
Total	$	3,766	$	—	$	3,766	$	(2,745	)	$	(186	)	$	(834	)	$	1

	December 31, 2012
			Gross		Amounts
	Gross		Amounts		of Liabilities		Gross Amounts Not Offset
	Amounts of		Offset in the		Presented in		in the Consolidated Balance Sheets
	Recognized		Consolidated		the Consolidated		Financial			Cash			Securities			Net
	Liabilities		Balance Sheets		Balance Sheets		Instruments (1)			Collateral			Collateral			Amount
	(in millions)
OTC derivatives	$	3,310	$	—	$	3,310	$	(2,706	)	$	(67	)	$	(531	)	$	6
Securities loaned	145		—		145		(67		)	(78		)	—			—
Repurchase agreements	501		—		501		—			—			(501		)	—
Total	$	3,956	$	—	$	3,956	$	(2,773	)	$	(145	)	$	(1,032	)	$	6

(1) Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar

arrangements that management elects not to offset on the Consolidated Balance Sheets.

In the tables above, the amounts of assets or liabilities presented in the Consolidated Balance Sheets are offset first by financial instruments that have the right of offset under master netting or similar arrangements, then any remaining amount is reduced by the amount of cash and securities collateral. The actual amounts of collateral may be greater than amounts presented in the tables.

The Company’s freestanding derivative instruments are reflected in other assets and other liabilities. Repurchase agreements are reflected in short-term borrowings. Securities borrowing and lending agreements are reflected in receivables and other liabilities, respectively. See Note 12 for additional disclosures related to the Company’s derivative instruments, Note 9 for additional disclosures related to the Company’s repurchase agreements and Note 3 for information related to derivatives held by consolidated investment entities.