Humana 2015 Annual Report Download - page 115

Download and view the complete annual report

Please find page 115 of the 2015 Humana annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 166

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166

Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
107
Our Level 3 assets had a fair value of $11 million at December 31, 2015, or 0.1% of our total invested assets.
During the years ended December 31, 2015, 2014, and 2013, 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,
2015 2014 2013
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$ 8$32$ 24$ 13$37$ 25$ 13$38
Total gains or losses:
Realized in earnings (1) — (1) — — — — — —
Unrealized in other
comprehensive income ——— ——— ———
Purchases ——— ——— ———
Sales (17) (3) (20) — (5)(5)———
Settlements ——— ——— (1)—
(1)
Balance at December 31 $ 6 $ 5 $ 11 $ 24 $ 8 $ 32 $ 24 $ 13 $ 37
Financial Liabilities
Our long-term debt, recorded at carrying value in our consolidated balance sheets, was $3,821 million at
December 31, 2015 and $3,825 million at December 31, 2014. The fair value of our long-term debt was $3,986 million
at December 31, 2015 and $4,102 million at December 31, 2014. 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.
Due to the short-term nature, carrying value approximates fair value for our commercial paper borrowings.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
As disclosed in Note 3, we completed our acquisition of American Eldercare and other companies during 2015,
2014, and 2013. 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 material assets or liabilities measured at fair value
on a nonrecurring basis during 2015, 2014, or 2013.