Health Net 1998 Annual Report Download - page 30

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2 8 F O U N D ATIO N H EALTH SYSTEMS, I N C.
(Dollars in thousands) Year 1 Year 2 Year 3 Year 4 Year 5 Beyond Total
Long-term Borrowings
Fixed Rate $ 4,005 $13,049 $ 2,148 $ 2,167 $2,186 $16,196 $ 39,751
Floating Rate 75,830 75,830 75,830 1,262,915 — — 1,490,405
Total $79,835 $88,879 $77,978 $1,265,082 $2,186 $16,196 $1,530,156
loss that may occur, since actual future gains and
losses will differ from those estimated,based upon
actual fluctuations in market rates,operating expo-
sures, and the timing thereof, and changes in the
Company’s investment portfolios during the year.
The Company, however, believes that any loss
i n c u rred would be offset by the effects of interest rate
movements on the respective liabilities,since these
liabilities are affected by many of the same fa c t o rs that
affect asset performance; that is,economic activity,
inflation and interest rates, as well as regional and
industry factors.
In addition, the Company has some interest
rate market risk due to its borrow i n g s . Notes paya bl e ,
capital leases and other financing arrangements total
$1,256 million and the related average interest rate is
6.30% (which interest rate is subject to change pur-
suant to the terms of the credit agreement).See a
d e s c ription of the credit facility under “Liquidity and
Capital Resources.” The table below presents the
expected cash flows of market risk sensitive instru-
ments at December 31,1998.These cash flows
include both expected principal and interest pay-
ments consistent with the terms of the outstanding
debt as of December 31,1998.