Humana 2003 Annual Report Download - page 79

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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Gross unrealized losses and fair value aggregated by investment category and length of time that individual
securities have been in a continuous unrealized loss position were as follows at December 31, 2003:
Less than 12 months 12 months or more Total
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
(in thousands)
U.S. Government obligations .......................... $251,218 $(2,125) $ — $ — $251,218 $ (2,125)
Tax exempt municipal securities ....................... 90,705 (1,566) 21,979 (494) 112,684 (2,060)
Corporate and other securities ......................... 121,184 (3,674) 714 (4) 121,898 (3,678)
Mortgage-backed securities ........................... 47,060 (1,295) — — 47,060 (1,295)
Redeemable preferred stocks .......................... — — 21,348 (734) 21,348 (734)
Debt securities ................................. 510,167 (8,660) 44,041 (1,232) 554,208 (9,892)
Equity securities .................................... — — 7,162 (285) 7,162 (285)
Total investment securities ........................ $510,167 $(8,660) $51,203 $(1,517) $561,370 $(10,177)
Unrealized losses at December 31, 2003 resulted from 96 positions. Less than 3% of the carrying value of
our consolidated investment securities have been in an unrealized loss position greater than one year. The
unrealized losses at December 31, 2003 generally can be attributed to changes in interest rates. All securities
trading at an unrealized loss remain current on all contractual payments and we believe it is probable that we will
be able to collect all amounts due according to the contractual terms of the debt securities. After taking into
account these and other factors, including our ability and intent to hold these securities until recovery or maturity,
we determined the unrealized losses on these investment securities were temporary.
The contractual maturities of debt securities available for sale at December 31, 2003, regardless of their
balance sheet classification, are shown below. Expected maturities may differ from contractual maturities
because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Amortized
Cost Fair Value
(in thousands)
Due within one year .................................. $ 117,485 $ 118,393
Due after one year through five years ..................... 597,975 607,343
Due after five years through ten years .................... 341,640 347,908
Due after ten years .................................... 876,231 886,944
Total debt securities .............................. $1,933,331 $1,960,588
Gross realized investment gains were $52.8 million in 2003, $24.7 million in 2002, and $25.1 million in
2001. Gross realized gains in 2003 included a gain of $15.2 million related to the sale of one venture capital
investment in the second quarter of 2003.
Gross realized investment losses were $16.2 million in 2003, $34.8 million in 2002, and $11.2 million in
2001. Gross realized losses included impairment losses of $3.2 million in 2003, $27.2 million in 2002, and
$2.4 million in 2001 after an evaluation indicated that a decline in fair value below the cost basis was other
than temporary.
Beginning in the fourth quarter of 2002, we began participation in a securities lending program where we
loan certain investment securities for short periods of time in exchange for collateral, consisting of cash or U.S.
Government securities, equal to at least 102% of the fair value of the investment securities on loan. As of
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