United Healthcare 2011 Annual Report Download - page 73

Download and view the complete annual report

Please find page 73 of the 2011 United Healthcare 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 104

  • 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

71
active markets.
Throughout the procedures discussed above in relation to the Company's processes for validating third party pricing
information, the Company validates the understanding of assumptions and inputs used in security pricing and determines the
proper classification in the hierarchy based on that understanding.
Interest Rate Swaps. Fair values of the Company’s interest rate swaps were estimated using the terms of the swaps and publicly
available market yield curves. Because the swaps were unique and not actively traded, the fair values were classified as Level
2.
AARP Program-related Investments. AARP Program-related investments consist of debt and equity securities held to fund
costs associated with the AARP Program and are priced and classified using the same methodologies as the Company’s other
securities.
Senior Unsecured Notes. The fair values of the senior unsecured notes are estimated based on third-party quoted market prices
for the same or similar issues.
AARP Program-related Other Liabilities. AARP Program-related other liabilities consist of liabilities that represent the
amount of net investment gains and losses related to AARP Program-related investments that accrue to the benefit of the AARP
policyholders.
A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs
is as follows:
(in millions)
Balance at beginning of period .
Purchases...................................
Sales ..........................................
Settlements................................
Net unrealized (losses) gains in
accumulated other
comprehensive income..........
Net realized (losses) gains in
investment and other income.
Balance at end of period............
December 31, 2011
Debt
Securities
$ 141
92
—
(25)
—
—
$ 208
Equity
Securities
$ 208
35
(17)
(7)
(4)
(6)
$ 209
Total
$ 349
127
(17)
(32)
(4)
(6)
$ 417
December 31, 2010
Debt
Securities
$ 120
43
(4)
(20)
—
2
$ 141
Equity
Securities
$ 312
45
(167)
—
9
9
$ 208
Total
$ 432
88
(171)
(20)
9
11
$ 349
December 31, 2009
Debt
Securities
$ 62
76
—
(12)
—
(6)
$ 120
Equity
Securities
$ 304
25
(3)
—
7
(21)
$ 312
Total
$ 366
101
(3)
(12)
7
(27)
$ 432
Non-financial assets and liabilities or financial assets and liabilities that are measured at fair value on a nonrecurring basis are
subject to fair value adjustments only in certain circumstances, such as when the Company records an impairment. There were
no significant fair value adjustments for these assets and liabilities recorded during the years ended December 31, 2011, 2010
and 2009.