| B. | INVESTMENTS IN MARKETABLE DEBT SECURITIES |
Marketable debt securities consisted of the following at December 31:
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2013 |
AMORTIZED COST |
UNREALIZED GAINS |
UNREALIZED LOSSES |
FAIR VALUE |
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U.S. tax-exempt securities |
$ | 214.9 | $ | 1.2 | $ | 216.1 | ||||||||||
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U.S. corporate securities |
78.2 | .1 | $ | .1 | 78.2 | |||||||||||
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U.S. government and agency securities |
5.5 | 5.5 | ||||||||||||||
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Non-U.S. corporate securities |
608.5 | 1.2 | .4 | 609.3 | ||||||||||||
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Non-U.S. government securities |
217.3 | .7 | .5 | 217.5 | ||||||||||||
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Other debt securities |
140.5 | .4 | 140.9 | |||||||||||||
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| $ | 1,264.9 | $ | 3.6 | $ | 1.0 | $ | 1,267.5 | |||||||||
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2012 |
AMORTIZED COST |
UNREALIZED GAINS |
UNREALIZED LOSSES |
FAIR VALUE |
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U.S. tax-exempt securities |
$ | 217.2 | $ | 1.5 | $ | .1 | $ | 218.6 | ||||||||
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U.S. corporate securities |
59.8 | .3 | 60.1 | |||||||||||||
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U.S. government and agency securities |
.8 | .8 | ||||||||||||||
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Non-U.S. corporate securities |
447.5 | 1.4 | .2 | 448.7 | ||||||||||||
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Non-U.S. government securities |
349.3 | 5.8 | .1 | 355.0 | ||||||||||||
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Other debt securities |
108.9 | .6 | 109.5 | |||||||||||||
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| $ | 1,183.5 | $ | 9.6 | $ | .4 | $ | 1,192.7 | |||||||||
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The cost of marketable debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Amortization, accretion, interest and dividend income and realized gains and losses are included in investment income. The cost of securities sold is based on the specific identification method. Gross realized gains were $2.0, $3.8 and $3.2, and gross realized losses were $.7, $.3 and $1.3 for the years ended December 31, 2013, 2012 and 2011, respectively.
Marketable debt securities with continuous unrealized losses and their related fair values were as follows:
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At December 31, |
2013 | 2012 | ||||||||||||
| LESS THAN TWELVE MONTHS |
TWELVE MONTHS OR GREATER |
LESS THAN TWELVE MONTHS |
TWELVE MONTHS OR GREATER |
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Fair value |
$ | 388.3 | $ | 28.4 | $ | 291.0 | ||||||||
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Unrealized losses |
.9 | .1 | .4 | |||||||||||
For the investment securities in gross unrealized loss positions identified above, the Company does not intend to sell the investment securities. It is more likely than not that the Company will not be required to sell the investment securities before recovery of the unrealized losses, and the Company expects that the contractual principal and interest will be received on the investment securities. As a result, the Company recognized no other-than-temporary impairments during the periods presented.
Contractual maturities at December 31, 2013 were as follows:
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Maturities: |
AMORTIZED COST |
FAIR VALUE |
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Within one year |
$ | 534.7 | $ | 535.5 | ||||
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One to five years |
729.9 | 731.6 | ||||||
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Six to ten years |
.3 | .4 | ||||||
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| $ | 1,264.9 | $ | 1,267.5 | |||||
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Marketable debt securities included $.4 and nil of variable rate demand obligations (VRDOs) at December 31, 2013 and 2012, respectively. VRDOs are debt instruments with long-term scheduled maturities which have interest rates that reset periodically.
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