United Healthcare 2008 Annual Report Download - page 95

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UNITEDHEALTH GROUP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At December 31, 2007, prior to the adoption of FAS 159 on January 1, 2008, the amortized cost, gross unrealized
gains and losses, and fair value of cash, cash equivalents and investments associated with the Program, included
in Assets Under Management, were as follows:
(in millions) Amortized Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Cash and Cash Equivalents .............................. $ 441 $— $— $ 441
Debt Securities — Available-for-Sale:
U.S. Government and Direct Agency obligations ........ 621 22 — 643
State and Municipal obligations ...................... 25 — — 25
Corporate obligations .............................. 555 5 (7) 553
Mortgage-backed securities (a) ....................... 514 3 (3) 514
Total Debt Securities — Available-for-Sale ................. 1,715 30 (10) 1,735
Total Cash and Investments ............................. $2,156 $ 30 $ (10) $2,176
(a) Includes Agency-backed mortgage pass-through securities.
14. Fair Value of Financial Instruments
In the normal course of business, the Company invests in various financial assets, incur various financial
liabilities and enter into agreements involving derivative securities.
Fair values are disclosed for all financial instruments for which it is practicable to estimate fair value, whether or
not such values are recognized in the Consolidated Balance Sheets. Management obtains quoted market prices
for these disclosures.
The carrying amounts reported in the Consolidated Balance Sheets for cash and cash equivalents, premium and
other current receivables, unearned premiums, accounts payable and accrued expenses, income taxes payable,
and certain other current liabilities approximate fair value because of their short-term nature.
For a discussion of the methods and assumptions that were used to estimate the fair value of each class of
financial instrument see Note 5 to the Notes to Consolidated Financial Statements for information on Debt and
Equity Securities, Note 13 to the Notes to Consolidated Financial Statements for information on AARP and Note
9 to the Notes to Consolidated Financial Statements for information related to Interest Rate Swaps and Senior
Unsecured Notes.
The carrying values and fair values of the Company’s financial instruments at December 31 are as follows:
2008 2007
(in millions)
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Assets
Debt Securities — Available-for-Sale .......................... $13,472 $13,472 $12,845 $12,845
Equity Securities — Available-for-Sale ......................... 477 477 383 383
Debt Securities — Held-to-Maturity ............................ 200 210 193 193
AARP Program-related Investments ............................ 1,941 1,941 1,735 1,735
Interest rate swaps .......................................... 622 622 — —
Liabilities
Senior Unsecured Notes ..................................... 12,693 10,941 9,564 9,239
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