Humana 2010 Annual Report Download - page 86

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account for certain unpredictable events that may effect interest income, including unexpected changes of cash
flows into and out of the portfolio, changes in the asset allocation, including shifts between taxable and
tax-exempt securities, and spread changes specific to various investment categories. In the past ten years,
changes in 3 month LIBOR rates during the year have exceeded 300 basis points twice, have not changed
between 200 and 300 basis points, have changed between 100 and 200 basis points four times, and have changed
by less than 100 basis points four times.
Increase (decrease) in
pretax earnings given an
interest rate decrease of
X basis points
Increase (decrease) in
pretax earnings given an
interest rate increase of
X basis points
(300) (200) (100) 100 200 300
(in thousands)
As of December 31, 2010
Investment income ............... $(30,864) $(20,498) $(10,427) $35,736 $71,236 $106,910
Interest expense (a) ...............0000 0 0
Pretax ...................... $(30,864) $(20,498) $(10,427) $35,736 $71,236 $106,910
As of December 31, 2009
Investment income ............... $(24,993) $(17,443) $(15,075) $36,729 $68,447 $101,142
Interest expense (a) ...............0000 0 0
Pretax ...................... $(24,993) $(17,443) $(15,075) $36,729 $68,447 $101,142
(a) The interest rate under our senior notes is fixed. There were no borrowings outstanding under the credit
agreement at December 31, 2010 or December 31, 2009.
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