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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
101
Our Level 3 assets had a fair value of $32 million at December 31, 2014, or 0.3% of our total invested assets.
During the years ended December 31, 2014, 2013, and 2012, the changes in the fair value of the assets measured using
significant unobservable inputs (Level 3) were comprised of the following:
For the years ended December 31,
2014 2013 2012
Private
Placements
Auction
Rate
Securities Total
Private
Placements
Auction
Rate
Securities Total
Private
Placements
Auction
Rate
Securities Total
(in millions)
Beginning balance at January 1 $ 24 $ 13 $ 37 $ 25 $ 13 $ 38 $ 25 $ 16 $ 41
Total gains or losses:
Realized in earnings ——— ——— ———
Unrealized in other
comprehensive income ——— ——— ———
Purchases ——— ——— ———
Sales — (5) (5) — — — — (3)(3)
Settlements ——— (1)—
(1)———
Balance at December 31 $ 24$ 8$32$ 24$ 13$37$ 25$ 13$38
Financial Liabilities
Our long-term debt, recorded at carrying value in our consolidated balance sheets, was $3,825 million at
December 31, 2014 and $2,600 million at December 31, 2013. The fair value of our long-term debt was $4,102 million
at December 31, 2014 and $2,751 million at December 31, 2013. The fair value of our long-term debt is determined
based on Level 2 inputs, including quoted market prices for the same or similar debt, or if no quoted market prices are
available, on the current prices estimated to be available to us for debt with similar terms and remaining maturities.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
As disclosed in Note 3, we completed our acquisitions of American Eldercare, Metropolitan, SeniorBridge,
Arcadian, and other companies during 2014, 2013, and 2012. The values of net tangible assets acquired and the resulting
goodwill and other intangible assets were recorded at fair value using Level 3 inputs. The majority of the related tangible
assets acquired and liabilities assumed were recorded at their carrying values as of the respective dates of acquisition,
as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and
other intangible assets acquired in these acquisitions were internally estimated primarily based on the income approach.
The income approach estimates fair value based on the present value of the cash flows that the assets are expected to
generate in the future. We developed internal estimates for the expected cash flows and discount rates in the present
value calculations. Other than assets acquired and liabilities assumed in these acquisitions, there were no assets or
liabilities measured at fair value on a nonrecurring basis during 2014, 2013, or 2012.