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

  1. 1. <SUBMISSION> <TYPE> 8-K <DOCUMENT-COUNT> 9 <LIVE> <FILER-CIK> 0000731766 <FILER-CCC> ######## <CONTACT-NAME> Edgar Filing Group <CONTACT-PHONE-NUMBER> 214-651-1001 ext5300 <SROS> NYSE <PERIOD> 10-14-2004 <NOTIFY-INTERNET> csd.minneapolis@bowne.com <NOTIFY-INTERNET> edgar.dallas@bowne.com <ITEMS> 2.02
  2. 2. <DOCUMENT> <TYPE> 8-K <FILENAME> c88784e8vk.htm <DESCRIPTION> Form 8-K <TEXT>
  3. 3. Table of Contents 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, 2004 UNITEDHEALTH GROUP INCORPORATED (Exact name of registrant as specified in its charter) Minnesota 0-10864 41-1321939 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) 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))
  4. 4. TABLE OF CONTENTS Item 2.02. Results of Operations and Financial Condition Signatures EXHIBITS Press Release
  5. 5. Table of Contents Item 2.02. Results of Operations and Financial Condition On October 14, 2004, UnitedHealth Group Incorporated (the “Company”) issued a press release discussing third quarter 2004 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 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 medical costs that are higher than anticipated in establishing our premium rates, including increased use of or cost of medical services; • heightened competition as a result of new entrants into the market and consolidation of both our competitors and suppliers in the industries in which we operate, which may make it more difficult for us to retain or increase customers, to improve the terms on which we do business with our suppliers, and to maintain or advance profitability; • events that may negatively affect our contract with AARP, including any failure on our part to service AARP customers in an effective manner and any adverse events that directly effect AARP or its business partners;
  6. 6. Table of Contents • the uncertain effects on our business of the new Medicare reform legislation; • costs associated with legislative activity, government regulation and review of our industry, including costs of changes in our business practices in response to new legislation and regulations, costs associated with regular and special governmental audits, investigations and enforcement actions, and costs associated with maintaining necessary regulatory approvals; • a reduction in our bargaining power or a deterioration of our relationships with certain physicians, hospitals and other health care providers; • increases in costs associated with increased litigation and the potential that our insurance coverage may be insufficient to cover certain costs; • failure to maintain effective and efficient information systems, which could result in, among other things, loss of existing customers, difficulties in attracting new customers, difficulties in determining medical cost estimates and establishing appropriate pricing, customer and physician and other health care provider disputes, regulatory problems, and increases in operating expenses; • increases in costs associated with business acquisitions, including assumption of unanticipated liabilities, difficulties in integration, or underperformance of acquired companies; • costs associated with compliance with emerging restrictions on patient privacy, including system changes, development of new administrative processes, and compliance by our business associates; • failure to adequately maintain our proprietary rights to our databases and related products due to lack of legal protections or failure to take necessary precautions, which could hinder our ability to market and sell our products and services; and • the potential impact on the health care industry resulting from acts of terrorism or the threat of future acts of terrorism and related concerns, which could lead to, among other things, increased use of health care services, loss of membership in health plans due to reductions in employment, adverse effects on the financial condition of employers who sponsor health care coverage for their employees, disruption of our information and payment systems, increased health care costs and disruption of the financial and insurance markets. 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.
  7. 7. Table of Contents 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, 2004 UNITEDHEALTH GROUP INCORPORATED By: /s/ David J. Lubben David J. Lubben General Counsel & Secretary
  8. 8. Table of Contents EXHIBITS Number Description 99 Press Release, dated October 14, 2004, issued by UnitedHealth Group
  9. 9. <DOCUMENT> <TYPE> EX-99 <FILENAME> c88784exv99.htm <DESCRIPTION> Press Release <TEXT>
  10. 10. EXHIBIT 99 NEWSRELEASE 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 $1.04 PER SHARE • Revenues for Third Quarter up 36% to More Than $9.8 Billion • Strong Customer Growth Across Businesses • Operating Margin Expanded to 11.1% • Operating Cash Flows Exceeded $950 Million, Up 49% • Earnings Per Share Increased 35% MINNEAPOLIS (October 14, 2004) – UnitedHealth Group (NYSE: UNH) achieved record results in the third quarter of 2004, reported Chairman and CEO William W. McGuire, M.D. Third quarter results were driven by strong and diverse growth and consistent operating performance across the spectrum of UnitedHealth Group businesses, with every reporting segment producing year-over-year and sequential quarterly gains in earnings from operations and operating margins.
  11. 11. Quarterly Financial Performance Three Months Ended September 30, June 30, September 30, 2004 2004 2003 Revenues $9.86 billion $8.70 billion $7.24 billion Earnings From Operations $1.09 billion $945 million $763 million Operating Margin 11.1% 10.9% 10.5% UnitedHealth Group Highlights • Third quarter earnings per share of $1.04 increased 35 percent from $0.77 in the third quarter of 2003, and improved 11 cents or 12 percent from the second quarter of 2004. This includes the favorable resolution of income tax returns from prior years, which benefited earnings per share in third quarter 2004 by approximately 1 cent. • Third quarter consolidated net earnings increased to $698 million, up $222 million or 47 percent year-over-year and $102 million or 17 percent on a sequential quarter basis. • Consolidated revenues of $9.9 billion increased $2.6 billion or 36 percent year-over-year, and $1.2 billion or 13 percent from the second quarter of 2004. • Organic customer growth strengthened for UnitedHealth Group businesses in the third quarter. Examples include gains of 55,000 people at Uniprise; 140,000 people for UnitedHealthcare; 105,000 consumers with HealthAllies; 10,000 people at AmeriChoice; and strong growth for Ovations, including 37,000 people purchasing Medicare supplement products, growth of 5,000 people in Medicare Advantage programs, and approximately 300,000 consumers accessing one of three discount drug card offerings. • Operating costs declined to 15.1 percent of revenues in the third quarter, representing strong improvement of 180 basis points from the third quarter of 2003 and 40 basis points from the second quarter of 2004. • Earnings from operations increased to $1.1 billion in the third quarter, up $329 million or 43 percent over the prior year, and up $147 million or 16 percent sequentially. • Consolidated third quarter operating margin improved to 11.1 percent from 10.5 percent in the third quarter 2003 and from 10.9 percent in second quarter 2004.
  12. 12. UnitedHealth Group Highlights – Continued • Medical costs payable, excluding the AARP division of Ovations, increased $1.5 billion or 48 percent year-over-year, standing at $4.7 billion at September 30, 2004. Medical costs days payable were 69 days for the quarter, which included the effect of Oxford Health Plans, Inc. (Oxford) for two months from the date of acquisition. • During the third quarter, the Company realized prior year favorable development of $50 million in its estimates of medical costs incurred, compared to $20 million in prior year favorable development realized in the third quarter of 2003. • In addition, the Company realized $50 million in positive development in the third quarter related to estimates of medical costs incurred in the first and second quarters of 2004. This compares to $80 million of in-year favorable development realized in the third quarter of 2003. • Cash flows from operations were $958 million for the third quarter, up 49 percent year-over-year, and reached approximately $2.9 billion for the first nine months of 2004. • The Company repurchased 13.7 million shares in the third quarter, bringing year-to-date shares repurchased and capital deployed through September 30, 2004, to 34 million shares and $2.1 billion, respectively. • Third quarter 2004 annualized return on equity was approximately 31 percent. Closing Comment “I am pleased to report these operating results, supported by strong cash flows. That said, our most significant accomplishments this quarter were in areas that strengthened our businesses for the future,” Dr. McGuire stated. “Examples of these include closing the Oxford acquisition, establishing a strategic alliance with Harvard Pilgrim, formally launching our health savings account capabilities and strengthening our senior management group with several key new people. Operationally, we expect to close 2004 and enter 2005 with continued strong performance driven by a combination of increasing market share across all of our businesses and double-digit percentage overall operating margins. The impact of these gains is reflected in the fact that we now project fourth quarter 2004 earnings of approximately $1.07 per share, bringing our previous projection for full-year 2004 earnings up 5 cents to $3.92 per share. Building on that momentum, our outlook anticipates further earnings per share growth to approximately $4.70 to $4.75 per share in 2005, eight cents per share above the range of our most recent outlook.”
  13. 13. 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 local employers and 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, 2004 2004 2003 Revenues $8.71 billion $7.59 billion $6.22 billion Earnings From Operations $763 million $636 million $490 million Operating Margin 8.8% 8.4% 7.9% Key Developments for Health Care Services • Revenues for Health Care Services grew $2.5 billion or 40 percent year-over-year and $1.1 billion or 15 percent sequentially to $8.7 billion in the third quarter of 2004. • Third quarter Health Care Services operating earnings of $763 million increased $273 million or 56 percent year-over-year and $127 million or 20 percent sequentially. • Third quarter operating margin of 8.8 percent expanded 90 basis points year-over-year and 40 basis points sequentially.
  14. 14. Key Developments for Health Care Services – Continued • Third quarter revenues of $5.9 billion for UnitedHealthcare increased $2.0 billion or 52 percent year-over-year and $0.9 billion or 19 percent sequentially. • UnitedHealthcare served 10.8 million people as of September 30, 2004, an increase of 2.5 million individuals year to date, including an increase of 1.5 million individuals in the third quarter of 2004. Excluding the acquisition of Oxford, UnitedHealthcare grew membership by 140,000 people during the third quarter. • UnitedHealthcare’s third quarter 2004 commercial medical care ratio of 78.6 percent was consistent with the 79.4 percent and 79.2 percent ratios in the second quarter of 2004 and the third quarter of 2003, respectively. Businesses acquired in the past 12 months contributed 40 basis points to the year-over-year decline. • AmeriChoice third quarter revenues of $795 million increased $127 million or 19 percent year-over-year and $22 million or 3 percent from the second quarter of 2004. • AmeriChoice serves more than 1.2 million people, having increased enrollment by 135,000 people year to date. In the third quarter of 2004, AmeriChoice grew enrollment by 10,000 individuals. • Ovations reported record revenues of $2.0 billion in the third quarter, up $336 million or 20 percent year-over-year and $170 million or 9 percent from second quarter 2004. • Ovations’ participation in the drug discount card market continues to expand, with approximately 300,000 consumers added in the third quarter. More than 2.3 million people now access an Ovations Pharmacy Solutions offering, up 36 percent year-over-year.
  15. 15. 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, 2004 2004 2003 Revenues $842 million $843 million $778 million Earnings From Operations $171 million $170 million $154 million Operating Margin 20.3% 20.2% 19.8% Key Developments • Third quarter revenues of $842 million increased 8 percent over third quarter 2003. • Uniprise serves more than 9.5 million people in the national multi-location employer segment, having increased its membership by 55,000 people in the third quarter, as new client wins more than offset the impact of job-related attrition at large employer customers. This was further offset by attrition of 10,000 members from the Passport offering during the third quarter. • Uniprise operating earnings of $171 million grew $17 million or 11 percent year-over-year, as revenue expansion outpaced increases in operating costs. The Uniprise operating margin of 20.3 percent expanded 50 basis points year-over-year and improved 10 basis points from second quarter 2004.
  16. 16. 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, 2004 2004 2003 Revenues $580 million $573 million $476 million Earnings From Operations $124 million $119 million $100 million Operating Margin 21.4% 20.8% 21.0% Key Developments • Third quarter revenues rose to $580 million, up $104 million or 22 percent year-over-year, and up $7 million or 1 percent from the second quarter of 2004, driven by strong customer growth across the portfolio of Specialized Care Services companies. • In the third quarter, earnings from operations of $124 million increased $24 million or 24 percent year-over-year and $5 million or 4 percent sequentially. • The Specialized Care Services operating margin of 21.4 percent expanded 40 basis points year-over-year and 60 basis points from the second quarter of 2004, as operating efficiency gains continued to more than offset the business mix shift toward comparatively lower margin service lines.
  17. 17. Business Description Ingenix is an international leader in the field of health care data, analysis and application. Ingenix serves multiple health care market segments on a business-to-business basis, including 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, 2004 2004 2003 Revenues $170 million $146 million $148 million Earnings From Operations $ 34 million $ 20 million $ 19 million Operating Margin 20.0% 13.7% 12.8% Key Developments • Ingenix revenues increased $22 million, or 15 percent year-over-year, to $170 million in the third quarter of 2004. Due to the seasonal sales characteristics of some of its key product lines, year-over-year financial comparisons are more meaningful indications of performance than sequential quarterly comparisons. • In the third quarter, Ingenix had significant sales of its latest release of ClaimsManager software to large physician groups and integrated health care delivery systems, and MedPoint, an innovative pharmaceutical prescription data product. • Ingenix operating earnings increased $15 million or 79 percent year-over-year, and the operating margin increased to 20 percent, up 720 basis points from third quarter 2003, due to the combination of strong contribution margins on software system sales and focused operating cost reduction efforts across its businesses.
  18. 18. About UnitedHealth Group UnitedHealth Group is a diversified health and well-being company that provides a broad spectrum of resources and services to help people improve their health and well-being through all stages of life. Consolidated UnitedHealth Group operating results include the operating performance of the Company’s four reportable business segments – Health Care Services (which includes the results of UnitedHealthcare, AmeriChoice and Ovations), Uniprise, Specialized Care Services and Ingenix. 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 # 163551. This earnings release and the Form 8-K dated October 14, 2004, which may also be accessed in the Investor Information section of the Company’s Web site, include a reconciliation of non-GAAP financial measures. ###
  19. 19. UNITEDHEALTH GROUP Earnings Release Schedules and Supplementary Information Quarter Ended September 30, 2004 - Consolidated Statements of Operations - Condensed Consolidated Balance Sheets - Condensed Consolidated Statements of Cash Flows - Segment Financial Information - Customer Profile Summary
  20. 20. UNITEDHEALTH GROUP CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2004 2003 2004 2003 REVENUES Premiums $8,920 $6,395 $23,985 $18,791 Services 842 780 2,444 2,329 Investment and Other Income 97 63 278 180 Total Revenues 9,859 7,238 26,707 21,300 COSTS Medical Costs 7,180 5,174 19,375 15,333 Operating Costs 1,488 1,226 4,151 3,620 Depreciation and Amortization 99 75 268 222 Total Costs 8,767 6,475 23,794 19,175 1,092 763 2,913 2,125 EARNINGS FROM OPERATIONS Interest Expense (34) (24) (86) (71) 1,058 739 2,827 2,054 EARNINGS BEFORE INCOME TAXES Provision for Income Taxes (360) (263) (979) (736) $ 698 $ 476 $ 1,848 $ 1,318 NET EARNINGS $ 1.09 $ 0.81 $ 2.99 $ 2.23 BASIC NET EARNINGS PER COMMON SHARE DILUTED NET EARNINGS PER COMMON $ 1.04 $ 0.77 $ 2.85 $ 2.13 SHARE Diluted Weighted-Average Common Shares Outstanding 670 617 648 620
  21. 21. UNITEDHEALTH GROUP CONDENSED CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) September 30, December 31, 2004 2003 ASSETS Cash and Short-Term Investments $ 4,409 $ 2,748 Accounts Receivable, net 910 745 Other Current Assets 2,877 2,627 Total Current Assets 8,196 6,120 Long-Term Investments 8,091 6,729 Other Long-Term Assets 11,610 4,785 Total Assets $27,897 $17,634 LIABILITIES AND SHAREHOLDERS’ EQUITY Medical Costs Payable $ 5,541 $ 4,152 Commercial Paper and Current Maturities of Long-Term Debt 150 229 Other Current Liabilities 4,876 4,387 Total Current Liabilities 10,567 8,768 Long-Term Debt, less current maturities 3,750 1,750 Future Policy Benefits for Life and Annuity Contracts 1,642 1,517 Deferred Income Taxes and Other Liabilities 871 471 Shareholders’ Equity 11,067 5,128 Total Liabilities and Shareholders’ Equity $27,897 $17,634 The table below summarizes certain balance sheet data excluding AARP related amounts. September 30, 2004 December 31, 2003 September 30, 2003 Accounts Receivable, net $ 528 $ 393 $ 530 Other Current Assets $ 959 $ 668 $ 486 Other Current Liabilities $3,464 $2,950 $2,448 Medical Costs Payable $4,653 $3,278 $3,146 68 (a) Days Medical Costs in Medical Costs Payable 68 68 (a) For comparability purposes, amount excludes the impact of Oxford Health Plans, Inc. which was acquired on July 29, 2004, and Mid- Atlantic Medical Services, Inc. which was acquired on February 10, 2004.
  22. 22. UNITEDHEALTH GROUP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) Nine Months Ended September 30, 2004 2003 Operating Activities Net Earnings $ 1,848 $ 1,318 Noncash Items: Depreciation and amortization 268 222 Deferred income taxes and other 25 28 Net changes in operating assets and liabilities 744 565 Cash Flows From Operating Activities 2,885 2,133 Investing Activities Cash paid for acquisitions, net of cash assumed (1,912) (87) Purchases of property, equipment and capitalized software (240) (281) Net sales and maturities/(purchases) of investments 344 340 Cash Flows Used For Investing Activities (1,808) (28) Financing Activities Common stock repurchases (2,098) (1,362) Net change in commercial paper and debt 1,921 (11) Other, net 473 205 Cash Flows From (Used For) Financing Activities 296 (1,168) Increase in cash and cash equivalents 1,373 937 Cash and cash equivalents, beginning of period 2,262 1,130 Cash and cash equivalents, end of period $ 3,635 $ 2,067 Supplemental Schedule of Noncash Investing Activities: Common Stock Issued for Acquisitions $ 5,557 $ —
  23. 23. UNITEDHEALTH GROUP SEGMENT FINANCIAL INFORMATION (in millions) (unaudited) REVENUES Three Months Ended September 30, Nine Months Ended September 30, 2004 2003 2004 2003 UnitedHealthcare $5,936 $3,911 $15,519 $11,501 Ovations 1,981 1,645 5,535 4,888 AmeriChoice 795 668 2,296 1,955 Health Care Services 8,712 6,224 23,350 18,344 Uniprise 842 778 2,520 2,322 Specialized Care Services 580 476 1,707 1,393 Ingenix 170 148 456 395 Corporate and eliminations (445) (388) (1,326) (1,154) Total Consolidated $9,859 $7,238 $26,707 $21,300 EARNINGS FROM OPERATIONS Three Months Ended September 30, Nine Months Ended September 30, 2004 2003 2004 2003 Health Care Services $ 763 $490 $1,976 $1,342 Uniprise 171 154 508 459 Specialized Care Services 124 100 356 281 Ingenix 34 19 73 43 Total Consolidated $1,092 $763 $2,913 $2,125
  24. 24. UNITEDHEALTH GROUP CUSTOMER PROFILE SUMMARY (in thousands) (unaudited) September June December September Customer Profile 2004 (a) 2004 (a) 2003 2003 Commercial Businesses Risk-based 10,595 9,345 8,360 8,505 Fee-based 15,265 15,120 14,110 14,155 Governments Federal 1,380 (b) 4,140 4,325 4,330 State and municipal 5,510 5,385 5,035 5,195 1,450 1,200 1,190 700 Consumers 19,025 19,260 17,440 17,235 Business-to-Business Partners 53,225 54,450 50,460 50,120 Grand Total (a) HealthAllies members of 910,000 at September 30, 2004 and 805,000 at June 30, 2004 are included with Consumers and Commercial Businesses in the Customer Profile Summary above. (b) Department of Defense (DOD) contract for Optum Nurseline Services involving 2.8 million members and $11 million in annual revenue is now managed directly by the DOD. Supplemental Franchise Profile - Health Care Services and Uniprise September June December September 2004 (a) (b) 2004 (a) 2003 2003 Health Care Services: Risk-based commercial 7,635 6,225 5,400 5,005 Fee-based commercial 3,200 3,060 2,895 2,855 Medicare 315 240 230 225 Medicaid 1,240 1,230 1,105 1,090 Total Health Care Services 12,390 10,755 9,630 9,175 Uniprise 9,565 9,520 9,060 9,125 (a) Includes 920,000 risk-based commercial, 90,000 fee-based commercial, 50,000 Uniprise and 95,000 Medicaid individuals served in connection with the acquisitions of Mid-Atlantic Medical Services, Inc. and other businesses in the first quarter of 2004. (b) Includes 1,375,000 risk-based commercial, 35,000 fee-based commercial and 70,000 Medicare individuals served in connection with the acquisition of Oxford Health Plans, Inc. in the third quarter of 2004.

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