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United Health Group [PDF Document] Form 8-K Related to Earnings Release
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    United Health Group [PDF Document] Form 8-K Related to Earnings Release United Health Group [PDF Document] Form 8-K Related to Earnings Release Document Transcript

    • ˆ1BNJVW55J4BSDS6YŠ1BNJVW55J4BSDS6 CHWFBU-2K-PD008 UNITED HEALTH GROUP RR Donnelley ProFile CHI blanl0cw 13-Oct-2005 17:12 EST 39260 TX 1 2* 9.0.21 FORM 8-K MIN HTM ESS 0C Page 1 of 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): October 14, 2005 UNITEDHEALTH GROUP INCORPORATED (Exact name of registrant as specified in its charter) Minnesota 0-10864 41-1321939 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) UnitedHealth Group Center, 9900 Bren Road East, Minnetonka, Minnesota 55343 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (952) 936-1300 N/A (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
    • ˆ1BNJVW55J4DPFX6DŠ 1BNJVW55J4DPFX6 CHWFBU-2K-032 UNITED HEALTH GROUP RR Donnelley ProFile CHI walkr0cw 13-Oct-2005 17:14 EST 39260 TX 2 2* 9.0.21 FORM 8-K MIN HTM ESS 0C Page 1 of 1 Item 2.02. Results of Operations and Financial Condition On October 14, 2005, UnitedHealth Group Incorporated (the “Company”) issued a press release discussing third quarter 2005 results. A copy of the press release is furnished herewith as Exhibit 99 and incorporated in this Item 2.02 by reference. The press release contains forward-looking statements regarding the Company. To supplement our consolidated financial results as determined by generally accepted accounting principles (GAAP), the press release also discloses the following non-GAAP information which management believes provides useful information to investors: Certain account balances and financial measures have been presented in this earnings release excluding our AARP business. Management believes these disclosures are meaningful since underwriting gains or losses related to the AARP business are recorded as an increase or decrease to a rate stabilization fund (RSF) and the effects of changes in balance sheet amounts associated with the AARP program accrue to the overall benefit of the AARP policyholders through the RSF balance. Although the Company is at risk for underwriting losses to the extent cumulative net losses exceed the balance in the RSF, the Company has not been required to fund any underwriting deficits to date and management believes the RSF balance is sufficient to cover potential future underwriting or other risks associated with the contract. CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 UnitedHealth Group and its representatives may from time to time make written and oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA), including statements in this report, in presentations, press releases (including the earnings release attached as Exhibit 99 to this report and the earnings conference call described in such earnings release), filings with the Securities and Exchange Commission, reports to shareholders and in meetings with analysts and investors. Generally the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. These statements may contain information about financial prospects, economic conditions, trends and unknown certainties. We caution that actual results could differ materially from those that management expects, depending on the outcome of certain factors. These forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the results discussed in the forward-looking statements. Some factors that could cause results to differ materially from the forward-looking statements include: • increases in health care costs that are higher than we anticipated in establishing our premium rates, including increased consumption of or costs of medical services; • heightened competition as a result of new entrants into our market, and consolidation of health care companies and suppliers; • events that may negatively affect our contract with AARP; • increased competition and other uncertainties resulting from changes in Medicare laws;
    • ˆ1BNJVW55J4CJV06-Š 1BNJVW55J4CJV06 CHICOR-2K-PD009 UNITED HEALTH GROUP RR Donnelley ProFile CHI dolct0cw 13-Oct-2005 17:13 EST 39260 TX 3 2* 9.0.21 FORM 8-K MIN HTM ESS 0C Page 1 of 1 • increases in costs and other liabilities associated with increased litigation, legislative activity and government regulation and review of our industry; • our ability to execute contracts on competitive terms with physicians, hospitals and other service providers; • failure to maintain effective and efficient information systems, which could result in the loss of existing customers, difficulties in attracting new customers, difficulties in determining medical costs estimates and appropriate pricing, customer and physician and health care provider disputes, regulatory violations, increases in operating costs, or other adverse consequences; • possible impairment of the value of our intangible assets if future results do not adequately support goodwill and intangible assets recorded for businesses that we acquire; • costs associated with compliance with restrictions on patient privacy, including system changes, development of new administrative processes, and potential noncompliance by our business associates; • misappropriation of our proprietary technology; • potential effects of terrorism, including increased use of health care services, disruption of information and payment systems, and increased health care costs; and • our anticipated acquisition of PacifiCare Health Systems, Inc. may be delayed or impeded as a result of required governmental consents, approval by PacifiCare’s stockholders, and other conditions to the merger, which may increase the costs of the merger and reduce anticipated benefits. This list of important factors is not intended to be exhaustive. A further list and description of some of these risks and uncertainties can be found in our reports filed with the Securities and Exchange Commission from time to time, including our annual reports on Form 10-K and quarterly reports on Form 10-Q. Any or all forward-looking statements we make may turn out to be wrong. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Except to the extent otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements.
    • ˆ1BNJVW55J4CQYB6oŠ 1BNJVW55J4CQYB6 CHICOR-2K-PD009 UNITED HEALTH GROUP RR Donnelley ProFile CHI dolct0cw 13-Oct-2005 17:13 EST 39260 TX 4 2* 9.0.21 FORM 8-K MIN HTM ESS 0C Page 1 of 1 Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: October 14, 2005 UNITEDHEALTH GROUP INCORPORATED By: /s/ David J. Lubben David J. Lubben General Counsel & Secretary
    • ˆ1BNJVW55JGN8736XŠ 1BNJVW55JGN8736 CHWFBU-2K-PD008 UNITED HEALTH GROUP RR Donnelley ProFile CHI blanl0cw 13-Oct-2005 22:31 EST 39260 TX 5 3* 9.0.21 FORM 8-K MIN HTM ESS 0C Page 1 of 1 EXHIBITS Number Description 99 Press Release, dated October 14, 2005, issued by UnitedHealth Group
    • ˆ1BNJVW55JD5PLC65Š 1BNJVW55JD5PLC6 CHICOR-2K-PD009 UNITED HEALTH GROUP RR Donnelley ProFile CHI dolct0cw 13-Oct-2005 21:16 EST 39260 EX99 1 3* 9.0.21 03000001 FORM 8-K MIN HTM ESS 0C Page 1 of 1 Exhibit 99 NEWS RELEASE Contacts: John S. Penshorn Senior Vice President 952-936-7214 Patrick J. Erlandson Chief Financial Officer 952-936-5901 (For Immediate Release) UNITEDHEALTH GROUP REPORTS RECORD THIRD QUARTER NET EARNINGS OF $0.64 PER SHARE • Revenues for Third Quarter Up 15% to More Than $11.3 Billion • Services Extended to 500,000 New Consumers • Operating Margin Expanded to 12.2% • Earnings Per Share Increased 23% • Operating Cash Flows of $1.2 Billion, Up 25% • Return on Equity of 31% MINNEAPOLIS (October 14, 2005) – UnitedHealth Group (NYSE: UNH) achieved record results in the third quarter of 2005, reported Chairman and CEO William W. McGuire, M.D. “Third quarter results were driven by strong and diverse growth coupled with consistent operating performance across the spectrum of UnitedHealth Group businesses. Every reporting segment produced year-over-year and sequential quarterly advances in operating earnings, and our businesses in the aggregate brought services to yet another half a million Americans in the past three months.”
    • ˆ1BNJVW55JFK55M6&Š 1BNJVW55JFK55M6 CHWFBU-2K-PD008 UNITED HEALTH GROUP RR Donnelley ProFile CHI blanl0cw 13-Oct-2005 21:46 EST 39260 EX99 2 3* 9.0.21 03000001 FORM 8-K MIN HTM ESS 0C Page 1 of 1 Quarterly Financial Performance Three Months Ended September 30, June 30, September 30, 2005 2005 2004 Revenues $11.32 billion $11.11 billion $9.86 billion Earnings From Operations $ 1.38 billion $ 1.31 billion $1.09 billion Operating Margin 12.2% 11.8% 11.1% UnitedHealth Group Highlights • Third quarter earnings per share of $0.64 grew 23 percent from $0.52 in the third quarter of 2004, and improved 3 cents or 5 percent from the second quarter of 2005. • Third quarter consolidated net earnings increased to $842 million, up $144 million or 21 percent year-over-year and $33 million or 4 percent on a sequential quarter basis. • Consolidated revenues of $11.3 billion increased $1.5 billion or 15 percent year-over-year, and $211 million or 2 percent from the second quarter of 2005. • Operating costs were 14.9 percent of revenues in the third quarter, compared to 15.1 percent in the third quarter of 2004 and 14.7 percent in the second quarter of 2005. The year-over-year decline reflects advances in quality and productivity, along with the benefits of an increase in business scale. The sequential quarterly increase reflects initial consumer education and operational readiness costs related to the national introduction of the Company’s new Medicare prescription drug plans. • Earnings from operations increased to $1.4 billion in the third quarter, up $286 million or 26 percent over the prior year, and up $68 million or 5 percent sequentially. • Consolidated third quarter operating margin improved to 12.2 percent from 11.1 percent in third quarter 2004 and 11.8 percent in second quarter 2005.
    • ˆ1BNJVW55JCV49Z6*Š 1BNJVW55JCV49Z6 CHWFBU-2K-PD008 UNITED HEALTH GROUP RR Donnelley ProFile CHI blanl0cw 13-Oct-2005 21:02 EST 39260 EX99 3 2* 9.0.21 FORM 8-K MIN HTM ESS 0C Page 1 of 1 UnitedHealth Group Highlights – Continued • Accounts receivable, excluding the AARP programs, were $528 million at September 30, 2005, and continued to represent less than 5 days sales outstanding. • Medical costs payable, excluding the AARP programs, increased $259 million or 6 percent year-over-year, standing at $4.9 billion at September 30, 2005. Medical costs days payable was 64 days for the quarter. • During the third quarter, the Company realized favorable development of $60 million in its estimates of medical costs incurred in 2004. Third quarter results also included $70 million in favorable development stemming from the first two quarters of 2005. • The income tax rate in the third quarter of 2005 of 36 percent increased 50 basis points sequentially and two percentage points year-over-year, primarily due to shifts in the relative size of the business in higher tax states, especially in the northeastern United States. • Cash flows from operations were $1.2 billion for the third quarter, up 25 percent year-over-year, and reached approximately $3.7 billion for the first nine months of 2005. • Available cash on hand reached $470 million at September 30, 2005, as the Company began to set aside funds for debt redemption related to the proposed PacifiCare merger. The Company also repurchased 4 million shares in the third quarter, bringing year-to-date shares repurchased and capital deployed to 49 million shares and $2.3 billion, respectively. • Third quarter 2005 annualized return on equity reached 31 percent. • The United Health Foundation committed $10 million in the third quarter to fund disaster-related community needs. Closing Comment “Our efforts are directed at advancing quality, access, affordability and simplicity in health care systems – and doing so for a wide array of customers and markets,” stated Dr. McGuire. “We are pleased to see that pursuing better ways to organize health resources, apply technology and use data – all done through a diverse and responsible group of businesses – is producing positive results for all concerned parties. “Our business outlook is favorable. The continued strategic and operating advances we are making, combined with strong organic growth now being realized as each of our businesses expands their market share, will drive positive performance into 2006. We now expect full year earnings of $2.48 per share in 2005, a 26 percent advance, and foresee further earnings per share growth in 2006 of 15 percent or more, prior to considering any per share contributions from the launch of our new prescription drug plans for seniors or the pending PacifiCare merger.”
    • ˆ1BNJVW55JFQJ2C6JŠ 1BNJVW55JFQJ2C6 CHWFBU-2K-PD008 UNITED HEALTH GROUP RR Donnelley ProFile CHI blanl0cw 13-Oct-2005 21:50 EST 39260 EX99 4 5* 9.0.21 03000002 FORM 8-K MIN HTM ESS 0C 03000003 03000004 Page 1 of 1 Business Description – Health Care Services The Health Care Services segment consists of the UnitedHealthcare, AmeriChoice and Ovations business units. UnitedHealthcare coordinates network-based health and well-being services on behalf of multistate mid-sized and local employers and for consumers. AmeriChoice facilitates and manages health care services for state Medicaid programs and their beneficiaries. Ovations delivers health and well-being services to Americans over the age of 50. Quarterly Financial Performance Three Months Ended September 30, June 30, September 30, 2005 2005 2004 Revenues $9.95 billion $9.81 billion $8.71 billion Earnings From Operations $976 million $944 million $763 million Operating Margin 9.8% 9.6% 8.8% Key Developments for Health Care Services • Revenues for Health Care Services of $10.0 billion grew $1.2 billion in the third quarter – a 14 percent year-over-year increase and a gain of $142 million or 1 percent sequentially. • Third quarter Health Care Services operating earnings of $976 million increased $213 million or 28 percent year-over-year. On a sequential quarter basis, operating earnings increased $32 million or 3 percent, as improved performance from AmeriChoice and continued gains from business growth at UnitedHealthcare and Ovations more than offset increased marketing and administrative cost investments associated with introducing Medicare prescription drug plans at Ovations. • Third quarter operating margin of 9.8 percent expanded 100 basis points year-over-year and 20 basis points sequentially.
    • ˆ1BNJVW55JCYD286pŠ 1BNJVW55JCYD286 CHICOR-2K-PD009 UNITED HEALTH GROUP RR Donnelley ProFile CHI dolct0cw 13-Oct-2005 21:07 EST 39260 EX99 5 2* 9.0.21 FORM 8-K MIN HTM ESS 0C Page 1 of 1 Key Developments for Health Care Services – Continued • Third quarter revenues of $6.8 billion for UnitedHealthcare increased $836 million or 14 percent year-over-year and $78 million or 1 percent sequentially. • UnitedHealthcare served 11.4 million people as of September 30, 2005, an increase of 460,000 individuals year to date, including an increase of 265,000 individuals in the third quarter of 2005. Third quarter results were highlighted by strong internal growth of 135,000 people and supplemented by the September 19, 2005 acquisition of Neighborhood Health Partnership in Miami, Florida. • UnitedHealthcare’s third quarter 2005 commercial medical care ratio of 78.0 percent compared favorably to the ratio of 78.6 percent in both the second quarter of 2005 and the third quarter of 2004. • AmeriChoice third quarter revenues of $843 million increased $48 million or 6 percent year-over-year. • AmeriChoice membership of approximately 1.2 million people is essentially flat year-over-year, as organic growth in people served was offset by a membership reduction related to its withdrawal from the Illinois market during the third quarter. • Ovations reported revenues of $2.3 billion in the third quarter, up $358 million or 18 percent year-over-year and $65 million or 3 percent from second quarter 2005. • Ovations increased its Medicare Advantage health plan enrollment by 20,000 people in the third quarter, bringing year-to- date growth to 45,000 people and the year-over-year increase to 60,000 people – a 19 percent gain. • During the third quarter, the Centers for Medicare and Medicaid Services (CMS) awarded its approval to Ovations to offer Medicare prescription drug plans across all 50 states and all U.S. territories. • The lead drug plan offering from Ovations, the AARP MedicareRx plan, is priced below the market average price in 33 of the 34 designated program regions, qualifying the business to receive an estimated 650,000 seniors by direct federal assignment for January 1, 2006.
    • ˆ1BNJVW55JFQX8=6ÉŠ 1BNJVW55JFQX8=6 CHWFBU-2K-PD008 UNITED HEALTH GROUP RR Donnelley ProFile CHI blanl0cw 13-Oct-2005 21:50 EST 39260 EX99 6 4* 9.0.21 03000005 FORM 8-K MIN HTM ESS 0C Page 1 of 1 Business Description Uniprise delivers network-based health and well-being services, business-to-business transaction processing services, consumer connectivity, and technology support services to large employers and health plans, and provides health-related consumer and financial transaction products and services. Quarterly Financial Performance Three Months Ended September 30, June 30, September 30, 2005 2005 2004 Revenues $969 million $962 million $842 million Earnings From Operations $205 million $198 million $171 million Operating Margin 21.2% 20.6% 20.3% Key Developments • Third quarter revenues of $969 million increased $127 million or 15 percent over third quarter 2004 and $7 million or 1 percent sequentially. • Uniprise serves more than 10.5 million people in the national multilocation employer segment, having increased its membership by 630,000 people in the first nine months of 2005. The total number of people served declined by 35,000 in the third quarter, a 0.3 percent sequential decrease, due to employment attrition. • Uniprise earnings from operations of $205 million grew $34 million or 20 percent year-over-year, as revenue expansion outpaced increases in operating costs. On a sequential quarter basis, earnings from operations improved $7 million or 4 percent, as the operating margin reached 21.2 percent, expanding 90 basis points year-over-year and 60 basis points from second quarter 2005.
    • ˆ1BNJVW55JFR2D96aŠ 1BNJVW55JFR2D96 CHWFBU-2K-PD008 UNITED HEALTH GROUP RR Donnelley ProFile CHI blanl0cw 13-Oct-2005 21:50 EST 39260 EX99 7 4* 9.0.21 03000006 FORM 8-K MIN HTM ESS 0C Page 1 of 1 Business Description Specialized Care Services offers a comprehensive array of specialized benefits, networks, services and resources to help consumers improve their health and well-being. Quarterly Financial Performance Three Months Ended September 30, June 30, September 30, 2005 2005 2004 Revenues $728 million $678 million $580 million Earnings From Operations $148 million $139 million $124 million Operating Margin 20.3% 20.5% 21.4% Key Developments • Third quarter revenues rose to $728 million, up $148 million or 26 percent year-over-year, and up $50 million or 7 percent from the second quarter of 2005, driven by strong customer growth and business expansion across the portfolio of Specialized Care Services companies. • In the third quarter, earnings from operations of $148 million increased $24 million or 19 percent year-over-year and $9 million or 6 percent sequentially. • The Specialized Care Services operating margin of 20.3 percent decreased 110 basis points year-over-year and 20 basis points from the second quarter of 2005, as revenue gains from comparatively lower margin dental benefit products changed the overall mix of business for the segment.
    • ˆ1BNJVW55JFRKNL6HŠ 1BNJVW55JFRKNL6 CHWFBU-2K-PD008 UNITED HEALTH GROUP RR Donnelley ProFile CHI blanl0cw 13-Oct-2005 21:51 EST 39260 EX99 8 5* 9.0.21 03000007 FORM 8-K MIN HTM ESS 0C Page 1 of 1 Business Description Ingenix is a leader in the field of health care data, analysis and application, serving pharmaceutical companies, health insurers and other payers, physicians and other health care providers, large employers and governments. Quarterly Financial Performance Three Months Ended September 30, June 30, September 30, 2005 2005 2004 Revenues $205 million $175 million $170 million Earnings From Operations $ 49 million $ 29 million $ 34 million Operating Margin 23.9% 16.6% 20.0% Key Developments • Ingenix revenues increased $35 million, or 21 percent year-over-year, to $205 million in the third quarter of 2005. • The Ingenix contract revenue backlog grew 25 percent year-over-year, due to strong customer demand for software products that enable payers, employers and other intermediaries to obtain a detailed understanding of medical costs and trends, software tools that improve business operations for medical service providers, and consulting and outsourced services. • During the third quarter, the U.S. Food and Drug Administration announced it will utilize Ingenix i3 Aperio™ software and analytic consulting services to help improve the effectiveness and speed of safety evaluations for pharmaceutical agents that have been approved for use in the U.S. market. • Ingenix earnings from operations increased $15 million, or 44 percent year-over-year, and the operating margin increased to 23.9 percent, up 390 basis points from third quarter 2004, due to strong contribution margins on consulting services and software product sales, as well as focused operating cost disciplines across its businesses.
    • ˆ1BNJVW55JD8V9069Š 1BNJVW55JD8V906 CHICOR-2K-PD009 UNITED HEALTH GROUP RR Donnelley ProFile CHI dolct0cw 13-Oct-2005 21:18 EST 39260 EX99 9 2* 9.0.21 FORM 8-K MIN HTM ESS 0C Page 1 of 1 About UnitedHealth Group UnitedHealth Group (www.unitedhealthgroup.com) is a diversified health and well-being company dedicated to making health care work better. Headquartered in Minneapolis, Minn., UnitedHealth Group offers a broad spectrum of products and services through six operating businesses: UnitedHealthcare, Ovations, AmeriChoice, Uniprise, Specialized Care Services and Ingenix. Through its family of businesses, UnitedHealth Group serves more than 55 million individuals nationwide. Forward-Looking Statements This news release may contain statements, estimates or projections that constitute “forward-looking” statements as defined under U.S. federal securities laws. Generally the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. A list and description of some of the risks and uncertainties can be found in our reports filed with the Securities and Exchange Commission from time to time, including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Except to the extent otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements. Earnings Conference Call As previously announced, UnitedHealth Group will discuss the Company’s results, strategy and future outlook on a conference call with investors at 8:45 a.m. Eastern time today. UnitedHealth Group will host a live webcast of this conference call from the Investor Information page of the Company’s Web site (www.unitedhealthgroup.com). The webcast replay of the call will be available on the same site for one week following the live call. The conference call replay can also be accessed by dialing 1-800-642-1687, conference ID # 9434578. This earnings release and the Form 8-K dated October 14, 2005, which may also be accessed in the Investor Information section of the Company’s Web site, include a reconciliation of non-GAAP financial measures. ###
    • ˆ1BNJVW55JGQRL56tŠ 1BNJVW55JGQRL56 CHICOR-2K-PD009 UNITED HEALTH GROUP RR Donnelley ProFile CHI dolct0cw 13-Oct-2005 22:42 EST 39260 EX99 10 2* 9.0.21 FORM 8-K MIN HTM ESS 0C Page 1 of 1 UNITEDHEALTH GROUP Earnings Release Schedules and Supplementary Information Quarter Ended September 30, 2005 • Consolidated Statements of Operations • Condensed Consolidated Balance Sheets • Condensed Consolidated Statements of Cash Flows • Segment Financial Information • Customer Profile Summary
    • ˆ1BNJVW55JGS8DP6dŠ 1BNJVW55JGS8DP6 CHWFBU-2K-PD008 UNITED HEALTH GROUP RR Donnelley ProFile CHI blanl0cw 13-Oct-2005 22:46 EST 39260 EX99 11 3* 9.0.21 FORM 8-K MIN HTM ESS 0C Page 1 of 1 UNITEDHEALTH GROUP CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 REVENUES Premiums $10,245 $ 8,920 $30,178 $23,985 Services 942 842 2,764 2,444 Investment and Other Income 135 97 378 278 Total Revenues 11,322 9,859 33,320 26,707 COSTS Medical Costs 8,138 7,180 24,101 19,375 Operating Costs 1,690 1,488 4,942 4,151 Depreciation and Amortization 116 99 333 268 Total Costs 9,944 8,767 29,376 23,794 1,378 1,092 3,944 2,913 EARNINGS FROM OPERATIONS Interest Expense (62) (34) (166) (86) 1,316 1,058 3,778 2,827 EARNINGS BEFORE INCOME TAXES Provision for Income Taxes (474) (360) (1,348) (979) $ 842 $ 698 $ 2,430 $ 1,848 NET EARNINGS $ 0.67 $ 0.55 $ 1.92 $ 1.50 BASIC NET EARNINGS PER COMMON SHARE $ 0.64 $ 0.52 $ 1.83 $ 1.43 DILUTED NET EARNINGS PER COMMON SHARE Diluted Weighted-Average Common Shares Outstanding 1,319 1,341 1,327 1,295
    • ˆ1BNJVW55JH2S2W6&Š 1BNJVW55JH2S2W6 CHICOR-2K-PD009 UNITED HEALTH GROUP RR Donnelley ProFile CHI dolct0cw 13-Oct-2005 23:07 EST 39260 EX99 12 5* 9.0.21 FORM 8-K MIN HTM ESS 0C Page 1 of 1 UNITEDHEALTH GROUP CONDENSED CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) September 30, December 31, 2005 2004 ASSETS Cash and Short-Term Investments $ 5,493 $ 4,505 Accounts Receivable, net 941 906 Other Current Assets 2,818 2,830 Total Current Assets 9,252 8,241 Long-Term Investments 8,235 7,748 Other Long-Term Assets 12,209 11,890 Total Assets $ 29,696 $ 27,879 LIABILITIES AND SHAREHOLDERS’ EQUITY Medical Costs Payable $ 5,888 $ 5,540 Commercial Paper and Current Maturities of Long-Term Debt 631 673 Other Current Liabilities 5,510 5,116 Total Current Liabilities 12,029 11,329 Long-Term Debt, less current maturities 3,850 3,350 Future Policy Benefits for Life and Annuity Contracts 1,750 1,669 Deferred Income Taxes and Other Liabilities 838 814 Shareholders’ Equity 11,229 10,717 Total Liabilities and Shareholders’ Equity $ 29,696 $ 27,879 The table below summarizes certain balance sheet data excluding AARP related amounts: September 30, December 31, 2005 2004 Accounts Receivable, net $ 528 $ 517 Other Current Assets $ 1,066 $ 947 Other Current Liabilities $ 4,321 $ 3,743 Medical Costs Payable $ 4,912 $ 4,641 Days Medical Costs in Medical Costs Payable 64 64
    • ˆ1BNJVW55JGWM6N6SŠ 1BNJVW55JGWM6N6 CHWFBU-2K-PD008 UNITED HEALTH GROUP RR Donnelley ProFile CHI blanl0cw 13-Oct-2005 22:51 EST 39260 EX99 13 2* 9.0.21 FORM 8-K MIN HTM ESS 0C Page 1 of 1 UNITEDHEALTH GROUP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) Nine Months Ended September 30, 2005 2004 Operating Activities Net Earnings $ 2,430 $ 1,848 Noncash Items: Depreciation and amortization 333 268 Deferred income taxes and other 60 25 Net changes in operating assets and liabilities 871 744 Cash Flows From Operating Activities 3,694 2,885 Investing Activities Cash paid for acquisitions, net of cash assumed (286) (1,912) Purchases of property, equipment and capitalized software (367) (240) Net sales and maturities/(purchases) of investments (349) 344 Cash Flows Used For Investing Activities (1,002) (1,808) Financing Activities Common stock repurchases (2,380) (2,098) Net change in commercial paper and debt 458 1,921 Other, net 416 473 Cash Flows (Used For) From Financing Activities (1,506) 296 Increase in cash and cash equivalents 1,186 1,373 Cash and cash equivalents, beginning of period 3,991 2,262 Cash and cash equivalents, end of period $ 5,177 $ 3,635 Supplemental Schedule of Noncash Investing Activities: Common Stock Issued for Acquisitions $ — $ 5,557
    • ˆ1BNJVW55JGYXGD6pŠ 1BNJVW55JGYXGD6 CHWFBU-2K-PD008 UNITED HEALTH GROUP RR Donnelley ProFile CHI blanl0cw 13-Oct-2005 22:57 EST 39260 EX99 14 3* 9.0.21 FORM 8-K MIN HTM ESS 0C Page 1 of 1 UNITEDHEALTH GROUP SEGMENT FINANCIAL INFORMATION (in millions) (unaudited) REVENUES Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 UnitedHealthcare $ 6,772 $ 5,936 $20,072 $15,519 Ovations 2,339 1,981 6,808 5,535 AmeriChoice 843 795 2,514 2,296 Health Care Services 9,954 8,712 29,394 23,350 Uniprise 969 842 2,872 2,520 Specialized Care Services 728 580 2,053 1,707 Ingenix 205 170 546 456 Corporate and eliminations (534) (445) (1,545) (1,326) Total Consolidated $ 11,322 $ 9,859 $33,320 $26,707 EARNINGS FROM OPERATIONS Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 Health Care Services $ 976 $ 763 $ 2,830 $ 1,976 Uniprise 205 171 592 508 Specialized Care Services 148 124 420 356 Ingenix 49 34 102 73 Total Consolidated $ 1,378 $ 1,092 $ 3,944 $ 2,913
    • ˆ1BNJVW55JH22R86$Š 1BNJVW55JH22R86 CHWFBU-2K-PD008 UNITED HEALTH GROUP RR Donnelley ProFile CHI blanl0cw 13-Oct-2005 23:06 EST 39260 EX99 15 4* 9.0.21 FORM 8-K MIN HTM ESS 0C Page 1 of 1 UNITEDHEALTH GROUP CUSTOMER PROFILE SUMMARY (in thousands) (unaudited) September June December September Customer Profile 2005 (a) 2005 2004 2004 Commercial Businesses Risk-based 11,785 11,530 10,820 10,595 Fee-based 16,750 16,665 15,525 15,265 7,190 7,075 7,035 6,890 Federal, State, and Municipal Governments 1,555 1,540 1,455 1,450 Individual Consumers 19,745 19,715 19,005 19,025 Business-to-Business 57,025 56,525 53,840 53,225 Grand Total 1,060 1,005 560 235 Consumer-directed health plans (included above) (a) Includes 130,000 individuals served by Neighborhood Health Partnership, which was acquired in September 2005. Supplemental Segment Profile—Health Care Services and Uniprise September June December September 2005 (a) 2005 2004 2004 Health Care Services: Risk-based commercial 7,805 7,700 7,655 7,635 Fee-based commercial 3,615 3,455 3,305 3,200 Medicare 375 355 330 315 Medicaid 1,230 1,265 1,260 1,240 Total Health Care Services 13,025 12,775 12,550 12,390 Uniprise 10,505 10,540 9,875 9,565