Humana 2007 Annual Report Download - page 36

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ability and financial strength ratings are an important factor in marketing our products to certain of our
customers. Our debt ratings impact both the cost and availability of future borrowings. Each of the rating
agencies reviews its ratings periodically and there can be no assurance that current ratings will be maintained in
the future. Our ratings reflect each rating agency’s opinion of our financial strength, operating performance, and
ability to meet our debt obligations or obligations to policyholders, but are not evaluations directed toward the
protection of investors in our common stock and should not be relied upon as such. Downgrades in our ratings,
should they occur, may adversely affect our business, financial condition and results of operations.
Changes in economic conditions could adversely affect our business and results of operations.
Recent events, including fallout from problems in the U.S. credit markets, indicate a potential near-term
recession in the U.S. economy. The state of the U.S. economy could adversely affect our employer group renewal
prospects and our ability to collect or increase premiums. The state of the U.S. economy could also adversely
affect the budget of individual states and of the federal government. That could result in attempts to reduce
payments in our federal and state government health care coverage programs, including the Medicare, military
services, and Medicaid programs, and could result in an increase in taxes and assessments on our activities.
Although we could attempt to mitigate or cover our exposure from such increased costs through, among other
things, increases in premiums, there can be no assurance that we will be able to mitigate or cover all of such costs
which could adversely affect our financial position, results of operations, and cash flows.
Increased litigation and negative publicity could increase our cost of doing business.
The health benefits industry continues to receive significant negative publicity reflecting the public
perception of the industry. This publicity and perception have been accompanied by increased litigation,
including some large jury awards, legislative activity, regulation and governmental review of industry practices.
These factors may adversely affect our ability to market our products or services, may require us to change our
products or services, may increase the regulatory burdens under which we operate and may require us to pay
large judgments or fines. Any combination of these factors could further increase our cost of doing business and
adversely affect our financial position, results of operations, and cash flows.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
26