HCA Holdings, Inc. | 2013 | FY | 3


NOTE 6 — INVESTMENTS OF INSURANCE SUBSIDIARIES

A summary of the insurance subsidiaries’ investments at December 31 follows (dollars in millions):

 

     2013  
     Amortized
Cost
     Unrealized
Amounts
    Fair
Value
 
        Gains      Losses    

Debt securities:

          

States and municipalities

   $ 385       $ 11       $ (3   $ 393   

Auction rate securities

     7                        7   

Asset-backed securities

     12                        12   

Money market funds

     94                        94   
  

 

 

    

 

 

    

 

 

   

 

 

 
     498         11         (3     506   

Equity securities

     2         2                4   
  

 

 

    

 

 

    

 

 

   

 

 

 
   $ 500       $ 13       $ (3     510   
  

 

 

    

 

 

    

 

 

   

Amounts classified as current assets

             (62
          

 

 

 

Investment carrying value

           $ 448   
          

 

 

 

 

     2012  
     Amortized
Cost
     Unrealized
Amounts
    Fair
Value
 
        Gains      Losses    

Debt securities:

          

States and municipalities

   $ 395       $ 23       $      $ 418   

Auction rate securities

     74                 (6     68   

Asset-backed securities

     14                        14   

Money market funds

     67                        67   
  

 

 

    

 

 

    

 

 

   

 

 

 
     550         23         (6     567   

Equity securities

     2         1                3   
  

 

 

    

 

 

    

 

 

   

 

 

 
   $ 552       $ 24       $ (6     570   
  

 

 

    

 

 

    

 

 

   

Amounts classified as current assets

             (55
          

 

 

 

Investment carrying value

           $ 515   
          

 

 

 

At December 31, 2013 and 2012, the investments of our insurance subsidiaries were classified as “available-for-sale.” Changes in temporary unrealized gains and losses are recorded as adjustments to other comprehensive income (loss). At December 31, 2013 and 2012, $1 million and $9 million, respectively, of our investments were subject to the restrictions included in insurance bond collateralization and assumed reinsurance contracts.

 

Scheduled maturities of investments in debt securities at December 31, 2013 were as follows (dollars in millions):

 

     Amortized
Cost
     Fair
Value
 

Due in one year or less

   $ 110       $ 110   

Due after one year through five years

     180         186   

Due after five years through ten years

     100         102   

Due after ten years

     89         89   
  

 

 

    

 

 

 
     479         487   

Auction rate securities

     7         7   

Asset-backed securities

     12         12   
  

 

 

    

 

 

 
   $ 498       $ 506   
  

 

 

    

 

 

 

The average expected maturity of the investments in debt securities at December 31, 2013 was 3.8 years, compared to the average scheduled maturity of 5.4 years. Expected and scheduled maturities may differ because the issuers of certain securities have the right to call, prepay or otherwise redeem such obligations prior to their scheduled maturity date.


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