United Healthcare 2012 Annual Report Download - page 34

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and could materially and adversely affect our results of operations, financial position and cash flows. In addition,
the state and federal budgetary pressures could cause the government to impose new or a higher level of taxes or
assessments for our commercial programs, such as premium taxes on insurance companies and health
maintenance organizations and surcharges or fees on select fee-for-service and capitated medical claims, and
could materially and adversely affect our results of operations, financial position and cash flows.
In addition, a prolonged unfavorable economic environment could adversely impact the financial position of
hospitals and other care providers, which could materially and adversely affect our contracted rates with these
parties and increase our medical costs or materially and adversely affect their ability to purchase our service
offerings. Further, unfavorable economic conditions could adversely impact the customers of our Optum
businesses, including health plans, HMOs, hospitals, care providers, employers and others, which could, in turn,
materially and adversely affect Optum’s financial results.
Our investment portfolio may suffer losses, which could materially and adversely affect our results of
operations, financial position and cash flows.
Market fluctuations could impair our profitability and capital position. Volatility in interest rates affects our
interest income and the market value of our investments in debt securities of varying maturities, which comprise
the vast majority of the fair value of our investments as of December 31, 2012. Relatively low interest rates on
investments, such as those experienced during recent years, have adversely impacted our investment income, and
a prolonged low interest rate environment could further adversely affect our investment income. In addition, a
delay in payment of principal and/or interest by issuers, or defaults by issuers (primarily from investments in
corporate and municipal bonds), could reduce our net investment income and we may be required to write down
the value of our investments, which could materially and adversely affect our profitability and shareholders’
equity.
We also allocate a small proportion of our portfolio to equity investments, which are subject to greater volatility
than fixed income investments. General economic conditions, stock market conditions, and many other factors
beyond our control can materially and adversely affect the value of our equity investments and may result in
investment losses.
There can be no assurance that our investments will produce total positive returns or that we will not sell
investments at prices that are less than their carrying values. Changes in the value of our investment assets, as a
result of interest rate fluctuations, changes in issuer financial conditions, illiquidity or otherwise, could have an
adverse effect on our shareholders’ equity. In addition, if it became necessary for us to liquidate our investment
portfolio on an accelerated basis, it could have a material adverse effect on our results of operations and the
capital position of regulated subsidiaries.
If the value of our intangible assets is materially impaired, our results of operations, shareholders’ equity
and debt ratings could be materially and adversely affected.
Goodwill and other intangible assets were $36.0 billion as of December 31, 2012, representing 44% of our total
consolidated assets. We periodically evaluate our goodwill and other intangible assets to determine whether all or
a portion of their carrying values may be impaired, in which case a charge to earnings may be necessary. For
example, the manner in or the extent to which the Health Reform Legislation is implemented may impact our
ability to maintain the value of our goodwill and other intangible assets in our business. Similarly, the value of
our goodwill may be materially and adversely impacted if businesses that we acquire perform in a manner that is
inconsistent with our assumptions. In addition, from time to time we divest businesses, and any such divestiture
could result in significant asset impairment and disposition charges, including those related to goodwill and other
intangible assets. Any future evaluations requiring an impairment of our goodwill and other intangible assets
could materially and adversely affect our results of operations and shareholders’ equity in the period in which the
impairment occurs. A material decrease in shareholders’ equity could, in turn, adversely impact our debt ratings
or potentially impact our compliance with our debt covenants.
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