-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T/WiAA8qH7I+SFgCo0sX3P2wIGCr/ohKSPEmXdurEJdUNKMbm/LNR2wUeNpvjqX+ 26akIGwbECoVEgjnGP5P4A== 0001193125-05-201427.txt : 20051014 0001193125-05-201427.hdr.sgml : 20051014 20051014073247 ACCESSION NUMBER: 0001193125-05-201427 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20051014 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20051014 DATE AS OF CHANGE: 20051014 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITEDHEALTH GROUP INC CENTRAL INDEX KEY: 0000731766 STANDARD INDUSTRIAL CLASSIFICATION: HOSPITAL & MEDICAL SERVICE PLANS [6324] IRS NUMBER: 411321939 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10864 FILM NUMBER: 051137710 BUSINESS ADDRESS: STREET 1: UNITEDHEALTH GROUP CENTER STREET 2: 9900 BREN ROAD EAST CITY: MINNEAPOLIS STATE: MN ZIP: 55343 BUSINESS PHONE: 9529361300 MAIL ADDRESS: STREET 1: 9900 BREN ROAD EAST CITY: MINNETONKA STATE: MN ZIP: 55343 FORMER COMPANY: FORMER CONFORMED NAME: UNITED HEALTHCARE CORP/ DATE OF NAME CHANGE: 20000309 FORMER COMPANY: FORMER CONFORMED NAME: UNITED HEALTHCARE CORP DATE OF NAME CHANGE: 19920703 8-K 1 d8k.htm FORM 8-K Form 8-K

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

of incorporation)

  (Commission File Number)  

(I.R.S. Employer

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))

 



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;


    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.


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


EXHIBITS

 

Number

  

Description


99    Press Release, dated October 14, 2005, issued by UnitedHealth Group

 

 

EX-99 2 dex99.htm PRESS RELEASE Press Release

Exhibit 99

 

N E W S   R E L E A S E     
     LOGO

 

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.”


LOGO

 

 

Quarterly Financial Performance

 

                        
     Three Months Ended

 
     September 30,
2005


   

June 30,

2005


    September 30,
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.


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.”


LOGO

  LOGO

LOGO

 

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,
2005


   

June 30,

2005


    September 30,
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.


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.


LOGO

 

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,
2005


   

June 30,

2005


    September 30,
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.


LOGO

 

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,
2005


   

June 30,

2005


    September 30,
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.


LOGO

 

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,
2005


   

June 30,

2005


    September 30,
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.


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.

 

###


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

 

 


UNITEDHEALTH GROUP

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

(unaudited)

 

     Three Months Ended
September 30,


    Nine Months Ended
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  
    


 


 


 


EARNINGS FROM OPERATIONS

     1,378       1,092       3,944       2,913  

Interest Expense

     (62 )     (34 )     (166 )     (86 )
    


 


 


 


EARNINGS BEFORE INCOME TAXES

     1,316       1,058       3,778       2,827  

Provision for Income Taxes

     (474 )     (360 )     (1,348 )     (979 )
    


 


 


 


NET EARNINGS

   $ 842     $ 698     $ 2,430     $ 1,848  
    


 


 


 


BASIC NET EARNINGS PER COMMON SHARE

   $ 0.67     $ 0.55     $ 1.92     $ 1.50  
    


 


 


 


DILUTED NET EARNINGS PER COMMON SHARE

   $ 0.64     $ 0.52     $ 1.83     $ 1.43  
    


 


 


 


Diluted Weighted-Average Common Shares Outstanding

     1,319       1,341       1,327       1,295  
    


 


 


 



UNITEDHEALTH GROUP

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions)

(unaudited)

 

     September 30,
2005


   December 31,
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,
2005


   December 31,
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


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  


UNITEDHEALTH GROUP

SEGMENT FINANCIAL INFORMATION

(in millions)

(unaudited)

 

REVENUES                         
     Three Months Ended
September 30,


    Nine Months Ended
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
September 30,


    Nine Months Ended
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  
    


 


 


 



UNITEDHEALTH GROUP

CUSTOMER PROFILE SUMMARY

(in thousands)

(unaudited)

 

 

Customer Profile


   September
2005 (a)


   June
2005


   December
2004


   September
2004


Commercial Businesses

                   

Risk-based

   11,785    11,530    10,820    10,595

Fee-based

   16,750    16,665    15,525    15,265

Federal, State, and Municipal Governments

   7,190    7,075    7,035    6,890

Individual Consumers

   1,555    1,540    1,455    1,450

Business-to-Business

   19,745    19,715    19,005    19,025
    
  
  
  

Grand Total

   57,025    56,525    53,840    53,225
    
  
  
  

Consumer-directed health plans (included above)

   1,060    1,005    560    235
    
  
  
  

(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
2005 (a)


   June
2005


   December
2004


   September
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
    
  
  
  
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