Humana 2009 Annual Report Download - page 95

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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Approximately $19.6 million of our unrealized losses at December 31, 2009 relate to our residential and
commercial mortgage-backed securities. Factors such as seniority, underlying collateral characteristics and credit
enhancements support the recoverability of these securities. Residential and commercial mortgage-backed
securities are primarily composed of senior tranches having high credit support, with 99% of the collateral
consisting of prime loans. All commercial mortgage-backed securities are rated AAA at December 31, 2009.
All issuers of securities we own trading at an unrealized loss remain current on all contractual payments.
After taking into account these and other factors previously described, we believe these unrealized losses
primarily were caused by an increase in market interest rates and tighter liquidity conditions in the current
markets than when the securities were purchased. As of December 31, 2009, we do not intend to sell the
securities with an unrealized loss position in accumulated other comprehensive income and it is not likely that we
will be required to sell these securities before recovery of their amortized cost basis, and as a result, we believe
that the securities with an unrealized loss are not other-than-temporarily impaired as of December 31, 2009.
The detail of realized gains (losses) related to investment securities and included with investment income
was as follows for the years ended December 31, 2009, 2008, and 2007:
2009 2008 2007
(in thousands)
Gross realized gains ................................... $123,361 $ 56,879 $20,501
Gross realized losses .................................. (103,878) (136,296) (8,833)
Net realized gains (losses) .......................... $ 19,483 $ (79,417) $11,668
There were no material other-than-temporary impairments in 2009 or 2007. Gross realized losses in 2008
included other-than-temporary impairments of $103.1 million, primarily due to investments in Lehman Brothers
Holdings Inc. and certain of its subsidiaries, which filed for bankruptcy protection in 2008, as well as declines in
the values of securities primarily associated with the financial services industry.
The contractual maturities of debt securities available for sale at December 31, 2009, 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 .................................. $ 367,245 $ 367,658
Due after one year through five years ..................... 1,699,943 1,726,641
Due after five years through ten years .................... 1,381,100 1,408,322
Due after ten years .................................... 1,804,113 1,823,640
Mortgage and asset-backed securities ..................... 2,173,343 2,170,889
Total debt securities .............................. $7,425,744 $7,497,150
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