Humana 2008 Annual Report Download - page 89

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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
During 2008, we revised the fair value estimate of certain other intangible assets and future policy benefit
reserves associated with our fourth quarter 2007 acquisitions of CompBenefits and KMG. This resulted in an
increase in goodwill of $125.7 million, primarily related to refining assumptions used to calculate the fair value
assigned to the KMG future policy benefits payable and customer contracts acquired, net of related deferred
income taxes.
On March 1, 2007, we acquired DefenseWeb Technologies, Inc., or DefenseWeb, a company responsible
for delivering customized software solutions for the Department of Defense, for cash consideration of $27.5
million.
On May 1, 2006, we acquired CHA Service Company, or CHA Health, a health plan serving employer
groups in Kentucky, for cash consideration of $67.5 million.
The results of operations and financial condition of Cariten, Metcare, OSF, SecureHorizons, KMG,
CompBenefits, DefenseWeb, and CHA have been included in our consolidated statements of income since the
acquisition dates.
4. INVESTMENT SECURITIES
Investment securities classified as current and long-term were as follows at December 31, 2008 and 2007:
December 31, 2008 December 31, 2007
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
(in thousands)
U.S. Government and agency
obligations ................... $1,842,179 $41,484 $ (285) $1,883,378 $ 973,584 $12,528 $ (2,109) $ 984,003
Tax exempt municipal securities .... 1,702,026 27,649 (40,213) 1,689,462 1,860,394 10,842 (6,245) 1,864,991
Mortgage and asset-backed
securities .................... 935,402 1,841 (171,041) 766,202 903,223 11,652 (4,213) 910,662
Corporate securities .............. 930,707 10,532 (99,842) 841,397 863,748 9,295 (9,177) 863,866
Redeemable preferred stocks ....... 18,052 1,650 — 19,702 14,658 900 — 15,558
Debt securities .............. 5,428,366 83,156 (311,381) 5,200,141 4,615,607 45,217 (21,744) 4,639,080
Equity securities ............. 16,956 — (1,655) 15,301 12,848 16 (1,577) 11,287
Investment securities ......... $5,445,322 $83,156 $(313,036) $5,215,442 $4,628,455 $45,233 $(23,321) $4,650,367
The contractual maturities of debt securities available for sale at December 31, 2008, 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 .................................. $ 438,544 $ 439,124
Due after one year through five years ..................... 836,408 835,710
Due after five years through ten years .................... 869,039 835,924
Due after ten years .................................... 3,284,375 3,089,383
Total debt securities .............................. $5,428,366 $5,200,141
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