Humana 2006 Annual Report Download - page 87

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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, 2006 and 2005:
Less than 12 months 12 months or more Total
2006
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
(in thousands)
U.S. Government obligations .................... $ 389,393 $(3,073) $ 339,043 $ (7,255) $ 728,436 $(10,328)
Tax exempt municipal securities .................. 533,409 (1,659) 501,129 (10,943) 1,034,538 (12,602)
Corporate and other securities .................... 162,169 (846) 167,415 (2,978) 329,584 (3,824)
Mortgage-backed securities ..................... 184,394 (1,523) 72,449 (3,136) 256,843 (4,659)
Debt securities ............................ 1,269,365 (7,101) 1,080,036 (24,312) 2,349,401 (31,413)
Non-redeemable preferred stocks ................. 7,959 (16) — — 7,959 (16)
Total investment securities .................. $1,277,324 $(7,117) $1,080,036 $(24,312) $2,357,360 $(31,429)
Less than 12 months 12 months or more Total
2005
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
(in thousands)
U.S. Government obligations .................... $ 611,683 $ (3,790) $272,176 $ (8,481) $ 883,859 $(12,271)
Tax exempt municipal securities .................. 470,477 (4,846) 258,825 (7,914) 729,302 (12,760)
Corporate and other securities .................... 248,016 (4,932) 131,166 (4,867) 379,182 (9,799)
Mortgage-backed securities ..................... 51,921 (742) 36,987 (2,225) 88,908 (2,967)
Redeemable preferred stocks .................... — — 6,862 (338) 6,862 (338)
Debt securities ............................ 1,382,097 (14,310) 706,016 (23,825) 2,088,113 (38,135)
Non-redeemable preferred stocks ................. 4,409 (37) 5,477 (206) 9,886 (243)
Total investment securities .................. $1,386,506 $(14,347) $711,493 $(24,031) $2,097,999 $(38,378)
Unrealized losses at December 31, 2006 resulted from 425 positions out of a total of 758 positions held.
Approximately 30% of the carrying value of our investment securities have been in an unrealized loss position
greater than one year. Of these investment securities in an unrealized loss position longer than a year,
approximately 97% are within 5% of recovering fair value up to cost. No single issue was below cost by more
than 15%. The unrealized losses at December 31, 2006 primarily were caused by increases in interest rates. All
issuers of 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 the severity of the decline and our ability and intent to
hold these securities until recovery or maturity, we determined the unrealized losses on these investment
securities were temporary and, as such, no impairment was required.
The contractual maturities of debt securities available for sale at December 31, 2006, 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 .................................. $ 262,925 $ 262,354
Due after one year through five years ..................... 1,064,931 1,055,582
Due after five years through ten years .................... 628,358 624,094
Due after ten years .................................... 1,657,766 1,656,300
Total debt securities .............................. $3,613,980 $3,598,330
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