United Healthcare 2009 Annual Report Download - page 53

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contracts. As part of our risk management strategy, we may enter into interest rate swap agreements with
financial institutions to manage the impact of market interest rates on interest expense. In January 2009, we
terminated interest rate swap contracts with $4.9 billion in notional value to lock-in the benefit of low market
interest rates. This gain will be realized over the remaining life of the applicable hedged fixed-rate debt as a
reduction to interest expense in the Consolidated Statements of Operations.
The following table summarizes the impact of a hypothetical change in market interest rates by 1% or 2% as of
December 31, 2009 on our investment income and interest expense per annum, and the fair value of our financial
investments and debt (in millions):
Increase (Decrease) in Market Interest Rate
Investment
Income Per
Annum (a)
Interest
Expense Per
Annum (a)
Fair Value of
Financial
Investments
Fair Value of
Debt
2% ............................................. $196 $ 15 $(1,059) $(1,187)
1 ............................................... 98 8 (540) (633)
(1).............................................. (15) (6) 541 730
(2).............................................. nm nm 1,075 1,579
nm = not meaningful
(a) Given the low absolute level of short-term market rates on our floating rate assets and liabilities as of
December 31, 2009, the assumed hypothetical change in interest rates has been floored at zero and does not
reflect the full 1% point reduction in interest income or interest expense.
As of December 31, 2009, we had $577 million of equity securities and venture capital funds, a portion of which
were invested in various public and non-public companies concentrated in the areas of health care delivery and
related information technologies. Market conditions that affect the value of health care or technology stocks will
likewise impact the value of our equity investments.
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