United Healthcare 2009 Annual Report Download - page 46

Shelf Registration. In February 2008, we filed a universal S-3 shelf registration statement with the SEC
registering an unspecified amount of debt securities.
Credit Ratings. Our credit ratings at December 31, 2009 were as follows:
Moody’s Standard & Poor’s Fitch
Ratings Outlook Ratings Outlook Ratings Outlook
Senior unsecured debt ......................... Baa1 Stable A- Negative A- Negative
Commercial paper ............................ P-2 n/a A-2 n/a F1 n/a
The availability of financing in the form of debt or equity is influenced by many factors, including our
profitability, operating cash flows, debt levels, credit ratings, debt covenants and other contractual restrictions,
regulatory requirements and economic and market conditions. For example, a significant downgrade in our credit
ratings or conditions in the capital markets may increase the cost of borrowing for us or limit our access to
capital. We have therefore adopted strategies and actions toward maintaining financial flexibility to mitigate the
impact of such factors on our ability to raise capital.
Debt Tender. In February 2010, we completed cash tender offers for $775 million aggregate principal amount of
certain of our outstanding notes. We believe this debt repurchase will improve the matching of floating rate
assets and liabilities on our balance sheet and reduce our debt service cost. We used cash on hand to fund the
purchase of the notes.
Share Repurchases. Under our Board of Directors’ authorization, we maintain a common share repurchase
program. Repurchases may be made from time to time at prevailing prices in the open market. In 2009, we
repurchased 74.3 million shares at an average price of approximately $24 per share and an aggregate cost of $1.8
billion. As of December 31, 2009, we had Board of Directors’ authorization to purchase up to an additional
28.7 million shares of our common stock. In February 2010, the Board renewed and increased our share
repurchase program, and authorized us to repurchase up to 120 million shares of our common stock.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
The following table summarizes future obligations due by period as of December 31, 2009, under our various
contractual obligations and commitments:
(in millions) 2010 2011 to 2012 2013 to 2014 Thereafter Total
Debt (a) ...................................... $2,164 $1,361 $1,559 $ 6,089 $11,173
Interest on debt (b) ............................. 545 659 406 3,549 5,159
Operating leases ............................... 255 420 272 644 1,591
Purchase obligations (c) ......................... 115 31 — — 146
Future policy benefits (d) ........................ 139 353 337 1,152 1,981
Unrecognized tax benefits (e) ..................... 19 — — 104 123
Unfunded investment commitments (f) ............. 138 42 24 16 220
Other obligations (g) ........................... 210 80 — 252 542
Total contractual obligations ................. $3,585 $2,946 $2,598 $11,806 $20,935
(a) See Note 9 of Notes to the Consolidated Financial Statements for more detail.
(b) Calculated using stated rates from the debt agreements and assuming amounts are outstanding through their
contractual term, including the effect of the debt tender described in Note 9 of Notes to the Consolidated
Financial Statements. For variable-rate obligations, we used the rates in place as of December 31, 2009 to
estimate all remaining contractual payments. Includes unamortized discounts from par values.
(c) Includes fixed or minimum commitments under existing purchase obligations for goods and services,
including agreements that are cancelable with the payment of an early termination penalty. Excludes
agreements that are cancelable without penalty and excludes liabilities to the extent recorded in our
Consolidated Balance Sheets as of December 31, 2009.
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