United Healthcare 2015 Annual Report Download - page 74

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The amortized cost and fair value of debt securities as of December 31, 2015, by contractual maturity, were as
follows:
Available-for-Sale Held-to-Maturity
(in millions)
Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Due in one year or less ....................................... $ 2,103 $ 2,105 $ 121 $121
Due after one year through five years ............................ 6,830 6,843 188 188
Due after five years through ten years ........................... 4,752 4,793 118 118
Due after ten years .......................................... 1,765 1,810 83 84
U.S. agency mortgage-backed securities ......................... 2,127 2,124 — —
Non-U.S. agency mortgage-backed securities ..................... 962 956 — —
Total debt securities ......................................... $ 18,539 $18,631 $ 510 $511
The fair value of available-for-sale investments with gross unrealized losses by major security type and length of
time that individual securities have been in a continuous unrealized loss position were as follows:
Less Than 12 Months 12 Months or Greater Total
(in millions)
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
December 31, 2015
Debt securities — available-for-sale:
U.S. government and agency obligations . . . $1,473 $ (6) $ — $ — $1,473 $ (6)
State and municipal obligations .......... 650 (3) — — 650 (3)
Corporate obligations .................. 4,629 (63) 339 (18) 4,968 (81)
U.S. agency mortgage-backed securities . . . 1,304 (12) 116 (4) 1,420 (16)
Non-U.S. agency mortgage-backed
securities .......................... 593 (7) 127 (4) 720 (11)
Total debt securities — available-for-sale ...... $8,649 $ (91) $ 582 $ (26) $9,231 $ (117)
Equity securities — available-for-sale ......... $ 112 $ (11) $ 89 $ (46) $ 201 $ (57)
December 31, 2014
Debt securities — available-for-sale:
U.S. government and agency obligations . . . $ 420 $ (1) $ — $ — $ 420 $ (1)
State and municipal obligations .......... 711 (4) 99 (1) 810 (5)
Corporate obligations .................. 2,595 (17) 464 (9) 3,059 (26)
U.S. agency mortgage-backed securities . . . — — 272 (5) 272 (5)
Non-U.S. agency mortgage-backed
securities .......................... 254 (2) 114 (2) 368 (4)
Total debt securities — available-for-sale ...... $3,980 $ (24) $ 949 $ (17) $4,929 $ (41)
Equity securities — available-for-sale ......... $ 107 $ (6) $ 88 $ (19) $ 195 $ (25)
The Company’s unrealized losses from all securities as of December 31, 2015 were generated from
approximately 11,000 positions out of a total of 24,000 positions. The Company believes that it will collect the
principal and interest due on its debt securities that have an amortized cost in excess of fair value. The unrealized
losses were primarily caused by interest rate increases and not by unfavorable changes in the credit quality
associated with these securities. At each reporting period, the Company evaluates securities for impairment when
the fair value of the investment is less than its amortized cost. The Company evaluated the underlying credit
quality and credit ratings of the issuers, noting neither a significant deterioration since purchase nor other factors
leading to an other-than-temporary impairment (OTTI). As of December 31, 2015, the Company did not have the
intent to sell any of the securities in an unrealized loss position. Therefore, the Company believes these losses to
be temporary.
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