United Healthcare 2010 Annual Report Download - page 32

If we are not able to protect our proprietary rights to our databases and related products, our ability to
market our knowledge and information-related businesses could be hindered and our business could be
adversely affected.
We rely on our agreements with customers, confidentiality agreements with employees, and our trademarks,
trade secrets, copyrights and patents to protect our proprietary rights. These legal protections and precautions
may not prevent misappropriation of our proprietary information. In addition, substantial litigation regarding
intellectual property rights exists in the software industry, and we expect software products to be increasingly
subject to third-party infringement claims as the number of products and competitors in this industry segment
grows. Such litigation and misappropriation of our proprietary information could hinder our ability to market and
sell products and services and our revenues and results of operations could be adversely affected.
Our ability to obtain funds from some of our subsidiaries is restricted and if we are unable to obtain
sufficient funds from our subsidiaries to fund our obligations, our operations or financial position may be
adversely affected.
Because we operate as a holding company, we are dependent upon dividends and administrative expense
reimbursements from some of our subsidiaries to fund our obligations. Many of these subsidiaries are regulated
by states’ departments of insurance. We are also required by law or regulation to maintain specific prescribed
minimum amounts of capital in these subsidiaries. The levels of capitalization required depend primarily upon
the volume of premium revenues generated. A significant increase in premium volume will require additional
capitalization from us. In most states, we are required to seek prior approval by these state regulatory authorities
before we transfer money or pay dividends from these subsidiaries that exceed specified amounts. In addition, we
normally notify the state departments of insurance prior to making payments that do not require approval. An
inability of our regulated subsidiaries to pay dividends to their parent companies could impact the scale to which
we could reinvest in our business through capital expenditures or business acquisitions, and could adversely
affect our ability to maintain our corporate quarterly dividend payment cycle, repurchase of shares of our
common stock and repay our debt. If we are unable to obtain sufficient funds from our subsidiaries to fund our
obligations, our operations or financial position may be adversely affected.
Any failure by us to manage and complete acquisitions and other significant transactions successfully
could harm our results of operations, business and prospects.
As part of our business strategy, we frequently engage in discussions with third parties regarding possible
investments, acquisitions, divestitures, strategic alliances, joint ventures, and outsourcing transactions and often
enter into agreements relating to such transactions. If we fail to identify and complete successfully transactions
that further our strategic objectives, we may be required to expend resources to develop products and technology
internally, we may be at a competitive disadvantage or we may be adversely affected by negative market
perceptions, any of which may have a material adverse effect on our results of operations, financial position or
cash flows. For acquisitions, success is also dependent upon efficiently integrating the acquired business into our
existing operations. If we are unable to successfully integrate and grow these acquisitions and to realize
contemplated revenue synergies and cost savings, our results of operations could be adversely affected.
Downgrades in our credit ratings, should they occur, may adversely affect our business, financial condition
and results of operations.
Claims paying ability, financial strength, and credit ratings by nationally recognized statistical rating
organizations are important factors in establishing the competitive position of insurance companies. Ratings
information is broadly disseminated and generally used throughout the industry. We believe our claims paying
ability and financial strength ratings are important factors in marketing our products to certain of our customers.
Our credit ratings impact both the cost and availability of future borrowings. Each of the credit rating agencies
reviews its ratings periodically and there can be no assurance that current credit ratings will be maintained in the
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