EX-99 2 dex99.htm PRESS RELEASE Press Release

Exhibit 99

 

NEWS RELEASE   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

 

FOURTH QUARTER AND FULL YEAR 2005 EARNINGS OF $0.65 AND $2.48 PER SHARE

 

Company Increases 2006 Earnings Per Share Growth Projection To a Range of 21% to 23%

 

•      Fourth Quarter Revenues Up 15%

 

•      Full Year Revenues Up 22%

•      Fourth Quarter Operating Margin of 11.9%

 

•      Full Year Operating Margin of 11.8%

•      Fourth Quarter Adjusted Cash Flows exceeded $900 Million

 

•      Full Year Adjusted Cash Flows above $4.6 Billion

•      Fourth Quarter Return on Equity of 24%

 

•      Full Year Return on Equity of 27%

•      Fourth Quarter EPS Grew 20%

 

•      Full Year EPS Grew 26%

 

MINNEAPOLIS (January 19, 2006) – UnitedHealth Group (NYSE: UNH) achieved record results in the fourth quarter and full year ended December 31, 2005, reported Chairman and CEO William W. McGuire, M.D. today.

 

He noted that the full year results were driven by balanced contributions across the diversified family of UnitedHealth Group businesses and the extension of services to nearly 3.6 million new customers across all of its member-based businesses in 2005.


LOGO

 

Quarterly and Annual Financial Performance

 

 

     Three Months Ended

    Year Ended

 
     December 31,
2005


    September 30,
2005


    December 31,
2004


    December 31,
2005


    December 31,
2004


 

Revenues

   $ 12.05 billion     $ 11.32 billion     $ 10.51 billion     $ 45.37 billion     $ 37.22 billion  

Earnings From Operations

   $ 1.43 billion     $ 1.38 billion     $ 1.19 billion     $ 5.37 billion     $ 4.10 billion  

Operating Margin

     11.9 %     12.2 %     11.3 %     11.8 %     11.0 %

 

UnitedHealth Group Highlights

 

    Fourth quarter earnings per share of $0.65 increased 20 percent from $0.54 in the fourth quarter of 2004, and improved 1 cent or 2 percent from the third quarter of 2005. Fourth quarter earnings per share included approximately 2 cents per share in market launch expenses for the Medicare Part D prescription drug benefit program. Excluding the market launch expenses, fourth quarter earnings of $0.67 per share gained 24 percent year-over-year.

 

    Full year earnings per share of $2.48, which includes 3 cents per share in Medicare Part D program launch costs, increased 26 percent from $1.97 per share in 2004. Excluding the market launch expenses, full year earnings of $2.51 per share grew 27 percent year-over-year.

 

    Fourth quarter consolidated net earnings increased to $870 million, up $131 million or 18 percent year-over-year and $28 million or 3 percent on a sequential quarter basis. Full year net earnings advanced to $3.3 billion, up $713 million or 28 percent over 2004 results.

 

    On December 20, 2005, the Company completed its acquisition of PacifiCare Health Systems, Inc., (PacifiCare), strengthening the assets of multiple business segments and improving the breadth of its customer offerings and its future earnings capacity. The results of the operations of PacifiCare in the subsequent seven business day period contributed $440 million in revenues to UnitedHealth Group fourth quarter and full year results on a consolidated basis. PacifiCare had no significant impact on UnitedHealth Group operating or financial metrics for the fourth quarter or full year.

 

    Consolidated fourth quarter revenues exceeded $12.0 billion, increasing $1.5 billion or 15 percent year-over-year and $723 million or 6 percent sequentially. Revenues for full year 2005 increased $8.1 billion or 22 percent to $45.4 billion, with sizable revenue advances in each of the Company’s business segments.


Highlights for UnitedHealth Group – Continued

 

    Fourth quarter investment and other income of $121 million included $9 million in net capital losses on the sale of investments. By comparison, third quarter 2005 investment and other income of $135 million included $4 million in net capital gains, and fourth quarter 2004 investment and other income of $110 million also included $4 million in net capital gains.

 

    Operating costs represented 15.5 percent of revenues in the fourth quarter, including about 40 basis points or approximately $50 million in market launch expenses for the Medicare Part D prescription drug benefit program. Excluding these market launch expenses, the fourth quarter 2005 operating cost ratio of 15.1 percent was stable year-over-year. The full year reported operating cost ratio of 15.0 percent improved significantly from 15.4 percent in 2004. Excluding market launch expenses, the full year operating cost ratio was 14.9 percent.

 

    Earnings from operations increased to $1.4 billion in the fourth quarter, up $241 million or 20 percent over the prior year, and up $51 million or 4 percent sequentially. Full year earnings from operations of $5.4 billion advanced 31 percent over 2004 results.

 

    Consolidated fourth quarter operating margin improved to 11.9 percent from 11.3 percent in the fourth quarter of 2004. Excluding market launch expenses for the Medicare Part D prescription drug benefit program from both the third and fourth quarters of 2005, the fourth quarter operating margin of 12.3 percent was stable with the third quarter and gained 1 percent from 11.3 percent in the fourth quarter of 2004. The full year reported operating margin of 11.8 percent improved 80 basis points from 11.0 percent in 2004. Excluding market launch costs, the full year operating margin of 12.0 percent expanded 1 percent in 2005.

 

    Adjusted cash flows from operations were $941 million for the fourth quarter and $4.6 billion for the year. Reported cash flows from operations, which included only two monthly payments in the fourth quarter and 11 monthly payments for the full year from the Centers for Medicare and Medicaid Services (CMS), were $632 million in the fourth quarter and more than $4.3 billion for the full year.

 

    The medical care ratio, excluding the AARP division of Ovations, was 78.2 percent in the fourth quarter and 78.6 percent for full year 2005, a decrease of 90 basis points year-over-year.

 

    Medical costs payable, excluding PacifiCare and the AARP division of Ovations, increased $281 million or 6 percent year-over-year to $4.9 billion. Including PacifiCare, medical costs payable were $6.3 billion at December 31, 2005. Medical costs days payable were 63 days for the quarter, excluding the AARP division of Ovations and the operations of the PacifiCare platform.

 

    During the fourth quarter, the Company realized favorable development of $30 million in its estimates of medical costs incurred in 2004. The Company also realized $50 million in favorable development related to estimates of medical costs incurred in the first nine months of 2005, with no effect on full year results.


Highlights for UnitedHealth Group – Continued

 

    The Company used $960 million in cash in the fourth quarter to retire outstanding debt obligations of PacifiCare. In addition, UnitedHealth Group repurchased 4 million shares in the fourth quarter, bringing the full year repurchase total to 54 million shares at a weighted average cost of $48 per share.

 

    Fourth quarter 2005 annualized return on equity was 24 percent, with full year return on equity exceeding 27 percent.

 

Closing Comment

 

Dr. McGuire concluded, “I am pleased to report both strong 2005 results and a very favorable 2006 outlook, supported by accelerating internal growth and expanding business opportunities. Our growth prospects across all of our business units directly reflect our ability to help the health care system work more effectively and, in turn, enhance the accessibility and affordability of services. Based on our strong position and business momentum entering 2006, we now anticipate a further increase in our earnings per share growth to a range of 21 percent to 23 percent over our 2005 results.”

 

UnitedHealth Group adopted the new accounting rules for stock compensation costs, effective January 2006. Including noncash stock compensation costs, the Company anticipates earnings of $2.85 to $2.90 per share in 2006, a significant increase over the $2.82 to $2.85 per share that the Company had previously projected for 2006. On a comparative accounting basis, the new 2006 outlook of $2.85 to $2.90 in earnings per share compares with earnings of $2.36 per share in 2005, including an adjustment to reflect 12 cents per share in noncash stock compensation costs in 2005. A restatement of historical financial results to reflect noncash stock compensation costs by business segment, by quarter, will be available in the Financial Reports and SEC Filings section of the Investor Information page on www.unitedhealthgroup.com.


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 and Annual Financial Performance

 

 

     Three Months Ended

    Year Ended

 
     December 31,
2005


    September 30,
2005


    December 31,
2004


    December 31,
2005


    December 31,
2004


 

Revenues

   $ 10.63 billion     $ 9.95 billion     $ 9.32 billion     $ 40.02 billion     $ 32.67 billion  

Earnings From Operations

   $ 985 million     $ 976 million     $ 834 million     $ 3.82 billion     $ 2.81 billion  

Operating Margin

     9.3 %     9.8 %     8.9 %     9.5 %     8.6 %

 

Key Developments for Health Care Services

 

  Fourth quarter 2005 Health Care Services revenues grew $1.3 billion or 14 percent year-over-year to $10.6 billion. Full year revenues increased $7.3 billion or 22 percent to $40.0 billion.

 

  Fourth quarter Health Care Services earnings from operations of $985 million increased $151 million or 18 percent year-over-year and $9 million or 1 percent sequentially.

 

  Fourth quarter operating margin of 9.3 percent increased 40 basis points year-over-year and decreased 50 basis points sequentially. The sequential decrease was due to an increase in Health Care Services operating costs in the Ovations business related to preparation, marketing and enrollment for the start of Medicare Part D prescription drug benefit plans on January 1, 2006. The full year operating margin of 9.5 percent expanded 90 basis points year-over-year.


LOGO

 

Key Developments for Health Care Services – Continued

 

    Fourth quarter revenues of $7.1 billion for UnitedHealthcare grew by $683 million or 11 percent year-over-year. Full year revenues of $27.2 billion increased by more than $5.2 billion or 24 percent year-over-year.

 

    For the year, UnitedHealthcare (excluding the impact of PacifiCare) brought services to an additional 720,000 people in 2005, including 335,000 through internal growth and 385,000 through geographically focused acquisitions. The completion of the PacifiCare merger in late December 2005 brings additional significant mid-sized and small employer business, as well as individual business, to UnitedHealthcare for 2006.

 

    The full year UnitedHealthcare medical care ratio of 78.2 percent improved 80 basis points as medical cost trends moderated in 2005, impacted by effective health care facilitation and cost management, efficient benefit designs and the general economic environment. The fourth quarter medical care ratio was 78.0 percent.

 

    AmeriChoice fourth quarter revenues of $873 million increased $48 million or 6 percent year-over-year and $30 million or 4 percent sequentially. Full year AmeriChoice revenues of $3.4 billion increased 9 percent year-over-year.

 

    AmeriChoice grew enrollment by 20,000 people in the fourth quarter of 2005, bringing the year-end total to 1.25 million people. Year-over-year, the number of people served by AmeriChoice was stable, as organic growth was offset by a membership reduction related to its withdrawal from the Illinois market during the third quarter of 2005.

 

    Ovations fourth quarter revenues of $2.6 billion grew $571 million or 28 percent year-over-year. Full year Ovations revenues of $9.4 billion increased more than $1.8 billion or 24 percent over 2004 results.

 

    In its Medicare Advantage health benefit programs, Ovations added 20,000 seniors through internal growth in the fourth quarter, bringing the full year membership advance to 65,000 people, an increase of 20 percent. The merger with the PacifiCare Secure Horizons business in late December nearly triples the number of seniors served through Medicare Advantage plans for January 2006.

 

    On a combined basis as of January 17, 2006, Ovations and PacifiCare had enrolled 4.3 million senior consumers in Medicare Part D prescription drug benefit plans, including those affiliated with Medicare Advantage health plan programs with Part D benefits.

 

    Full year earnings from operations for Ovations increased by approximately 25 percent in 2005 due to overall revenue growth and the achievement of stable operating margins, despite bearing significant expenses for launch of the Medicare Part D prescription drug benefit program on 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 and Annual Financial Performance

 

 

     Three Months Ended

    Year Ended

 
     December 31,
2005


    September 30,
2005


    December 31,
2004


    December 31,
2005


    December 31,
2004


 

Revenues

   $ 978 million     $ 969 million     $ 845 million     $ 3.85 billion     $ 3.37 billion  

Earnings From Operations

   $ 207 million     $ 205 million     $ 169 million     $ 799 million     $ 677 million  

Operating Margin

     21.2 %     21.2 %     20.0 %     20.8 %     20.1 %

 

Key Developments

 

  Uniprise revenues increased $133 million or 16 percent over fourth quarter 2004 and $485 million or 14 percent for full year 2005, reaching $978 million and $3.85 billion for the respective periods.

 

  Uniprise advanced the number of people served in the national multilocation employer segment by more than 600,000 in 2005. Uniprise estimates it added more than 400,000 new consumers in early 2006, and that it is on track for full year 2006 growth of 500,000 to 600,000 people.

 

  The Uniprise fourth quarter operating margin of 21.2 percent increased 120 basis points year-over-year and was stable sequentially, as fourth quarter earnings from operations grew 22 percent or $38 million year-over-year to $207 million. As a result of productivity and efficiency gains, earnings from operations increased $2 million from third quarter 2005, despite seasonal fourth quarter enrollment costs and expenses for significant levels of benefit plan changes related to 2006 enrollment activities.

 

  Full year earnings from operations of $799 million increased $122 million or 18 percent over 2004 results. The full year operating margin of 20.8 percent reflected 70 basis points in year-over-year gain, driven by improving productivity through the application of advanced technology to basic business processes.


LOGO

 

Business Description

 

Specialized Care Services offers a comprehensive array of specialized benefits, networks, services and resources to make health care work better by connecting people to proven solutions for health and well being.

 

Quarterly and Annual Financial Performance

 

 

     Three Months Ended

    Year Ended

 
     December 31,
2005


    September 30,
2005


    December 31,
2004


    December 31,
2005


    December 31,
2004


 

Revenues

   $ 753 million     $ 728 million     $ 588 million     $ 2.81 billion     $ 2.30 billion  

Earnings From Operations

   $ 162 million     $ 148 million     $ 129 million     $ 582 million     $ 485 million  

Operating Margin

     21.5 %     20.3 %     21.9 %     20.7 %     21.1 %

 

Key Developments

 

    Fourth quarter revenues rose to $753 million, up $165 million or 28 percent year-over-year and $25 million or 3 percent from the third quarter of 2005. Full year revenues of $2.8 billion increased $511 million or 22 percent, reflecting exceptional growth as the businesses within this segment added more than 5 million new people as customers in 2005. This includes more than 3 million people who were customers of other UnitedHealth Group businesses and who purchased an offering from Specialized Care Services for the first time.

 

    The Specialized Care Services fourth quarter operating margin of 21.5 percent expanded 120 basis points sequentially and declined 40 basis points year-over-year. The full year operating margin of 20.7 percent also decreased 40 basis points year-over-year. The fourth quarter and full year operating margin percentages were consistent with the evolving business mix for this reporting segment.

 

    Fourth quarter earnings from operations of $162 million increased $33 million or 26 percent year-over-year and $14 million or 9 percent sequentially. Full year earnings from operations grew $97 million or 20 percent year-over-year to $582 million.


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 and Annual Financial Performance

 

 

     Three Months Ended

    Year Ended

 
     December 31,
2005


    September 30,
2005


    December 31,
2004


    December 31,
2005


    December 31,
2004


 

Revenues

   $ 248 million     $ 205 million     $ 214 million     $ 794 million     $ 670 million  

Earnings From Operations

   $ 75 million     $ 49 million     $ 56 million     $ 177 million     $ 129 million  

Operating Margin

     30.2 %     23.9 %     26.2 %     22.3 %     19.3 %

 

Key Developments

 

    Ingenix fourth quarter revenues of $248 million increased $34 million or 16 percent year-over-year and $43 million or 21 percent sequentially. Advances were driven by the seasonal pick-up for Ingenix syndicated content products and strong software sales. On a full year basis, Ingenix grew revenues by $124 million or 19 percent over 2004 results.

 

    Strong sales performance continued in the fourth quarter, with the Ingenix contract revenue backlog exceeding $850 million across its business units on December 31, 2005, a year-over-year increase of 28 percent.

 

    Ingenix earnings from operations increased $19 million or 34 percent year-over-year and $26 million or 53 percent on a sequential quarter basis. Full year earnings from operations increased $48 million or 37 percent to $177 million. The fourth quarter operating margin of 30.2 percent expanded 4 percentage points year-over-year, bringing the full year 2005 operating margin up to 22.3 percent. Exceptional earnings leverage, particularly from data, software and informatics products, drove the year-over-year and sequential operating margin gains.


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 approximately 65 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 #3484226. This earnings release and the Form 8-K dated January 19, 2006, 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 December 31, 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 December 31,

    Year Ended December 31,

 
     2005

    2004

    2005

    2004

 

REVENUES

                                

Premiums

   $ 10,880     $ 9,510     $ 41,058     $ 33,495  

Services

     1,044       891       3,808       3,335  

Investment and Other Income

     121       110       499       388  
    


 


 


 


Total Revenues

     12,045       10,511       45,365       37,218  
    


 


 


 


COSTS

                                

Medical Costs

     8,624       7,625       32,725       27,000  

Operating Costs

     1,872       1,592       6,814       5,743  

Depreciation and Amortization

     120       106       453       374  
    


 


 


 


Total Costs

     10,616       9,323       39,992       33,117  
    


 


 


 


EARNINGS FROM OPERATIONS

     1,429       1,188       5,373       4,101  

Interest Expense

     (75 )     (42 )     (241 )     (128 )
    


 


 


 


EARNINGS BEFORE INCOME TAXES

     1,354       1,146       5,132       3,973  

Provision for Income Taxes

     (484 )     (407 )     (1,832 )     (1,386 )
    


 


 


 


NET EARNINGS

   $ 870     $ 739     $ 3,300     $ 2,587  
    


 


 


 


BASIC NET EARNINGS PER COMMON SHARE

   $ 0.69     $ 0.57     $ 2.61     $ 2.07  
    


 


 


 


DILUTED NET EARNINGS PER COMMON SHARE

   $ 0.65     $ 0.54     $ 2.48     $ 1.97  
    


 


 


 


Diluted Weighted-Average Common Shares Outstanding

     1,338       1,359       1,330       1,310  
    


 


 


 



UNITEDHEALTH GROUP

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions)

(unaudited)

 

     December 31,
2005


   December 31,
2004


ASSETS

             

Cash and Short-Term Investments

   $ 6,011    $ 4,505

Accounts Receivable, net

     1,290      906

Other Current Assets

     3,339      2,830
    

  

Total Current Assets

     10,640      8,241

Long-Term Investments

     8,971      7,748

Other Long-Term Assets

     21,763      11,890
    

  

Total Assets

   $ 41,374    $ 27,879
    

  

LIABILITIES AND SHAREHOLDERS’ EQUITY

             

Medical Costs Payable

   $ 7,301    $ 5,540

Commercial Paper and Current Maturities of Long-Term Debt

     3,261      673

Other Current Liabilities

     6,082      5,116
    

  

Total Current Liabilities

     16,644      11,329

Long-Term Debt, less current maturities

     3,850      3,350

Future Policy Benefits for Life and Annuity Contracts

     1,761      1,669

Deferred Income Taxes and Other Liabilities

     1,386      814

Shareholders’ Equity

     17,733      10,717
    

  

Total Liabilities and Shareholders’ Equity

   $ 41,374    $ 27,879
    

  

 

The table below summarizes certain balance sheet data excluding AARP related amounts:

 

     December 31, 2005

    December 31, 2004

Accounts Receivable, net

   $ 876     $ 517

Other Current Assets

   $ 1,547     $ 947

Other Current Liabilities

   $ 4,877     $ 3,743

Medical Costs Payable

   $ 6,300     $ 4,641

Days Medical Costs in Medical Costs Payable

     63 (a)     64

(a) Excludes the impact on Days Medical Costs in Medical Costs Payable of PacifiCare Health Systems, Inc. (PacifiCare), which was acquired in December 2005. Including PacifiCare, Days Medical Costs in Medical Costs Payable were 77 days.


UNITEDHEALTH GROUP

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)

 

     Year Ended December 31,

 
     2005

    2004

 

Operating Activities

                

Net Earnings

   $ 3,300     $ 2,587  

Noncash Items:

                

Depreciation and amortization

     453       374  

Deferred income taxes and other

     167       125  

Net changes in operating assets and liabilities

     406       1,049  
    


 


Cash Flows From Operating Activities

     4,326       4,135  
    


 


Investing Activities

                

Cash paid for acquisitions, net of cash assumed

     (2,562 )     (2,225 )

Purchases of property, equipment and capitalized software

     (509 )     (350 )

Net sales and maturities/(purchases) of investments

     (418 )     931  
    


 


Cash Flows Used For Investing Activities

     (3,489 )     (1,644 )
    


 


Financing Activities

                

Common stock repurchases

     (2,557 )     (3,446 )

Net change in commercial paper and debt

     2,656       2,044  

Other, net

     494       640  
    


 


Cash Flows From (Used For) Financing Activities

     593       (762 )
    


 


Increase in cash and cash equivalents

     1,430       1,729  

Cash and cash equivalents, beginning of period

     3,991       2,262  
    


 


Cash and cash equivalents, end of period

   $ 5,421     $ 3,991  
    


 


Supplemental Schedule of Noncash Investing Activities:

                

Common Stock Issued for Acquisitions

   $ 5,696     $ 5,557  


UNITEDHEALTH GROUP

 

SEGMENT FINANCIAL INFORMATION

(in millions)

(unaudited)

 

     Three Months Ended December 31,

    Year Ended December 31,

 
     2005

    2004

    2005

    2004

 

REVENUES

                                

UnitedHealthcare

   $ 7,114     $ 6,431     $ 27,186     $ 21,950  

Ovations

     2,638       2,067       9,446       7,602  

AmeriChoice

     873       825       3,387       3,121  
    


 


 


 


Health Care Services

     10,625       9,323       40,019       32,673  

Uniprise

     978       845       3,850       3,365  

Specialized Care Services

     753       588       2,806       2,295  

Ingenix

     248       214       794       670  

Eliminations

     (559 )     (459 )     (2,104 )     (1,785 )
    


 


 


 


Total Consolidated

   $ 12,045     $ 10,511     $ 45,365     $ 37,218  
    


 


 


 


     Three Months Ended December 31,

    Year Ended December 31,

 
     2005

    2004

    2005

    2004

 

EARNINGS FROM OPERATIONS

                                

Health Care Services

   $ 985     $ 834     $ 3,815     $ 2,810  

Uniprise

     207       169       799       677  

Specialized Care Services

     162       129       582       485  

Ingenix

     75       56       177       129  
    


 


 


 


Total Consolidated

   $ 1,429     $ 1,188     $ 5,373     $ 4,101  
    


 


 


 



UNITEDHEALTH GROUP

 

CUSTOMER PROFILE SUMMARY

(in thousands)

(unaudited)

 

Customer Profile


   December
2005 (a)(b)


    September
2005


   June
2005


   December
2004


Commercial Businesses

                    

Risk-based

   11,905     11,785    11,530    10,820

Fee-based

   17,035 (c)   16,750    16,665    15,525

Federal, State, and Municipal Governments

   7,080     7,190    7,075    7,035

Individual Consumers

   1,470 (d)   1,555    1,540    1,455

Business-to-Business

   19,870     19,745    19,715    19,005
    

 
  
  

Grand Total

   57,360     57,025    56,525    53,840
    

 
  
  

Consumer-directed health plans (included above)

   1,095     1,060    1,005    560
    

 
  
  

 

     December
2005 (a)(b)


    September
2005


   June
2005


   December
2004


Supplemental Segment Profile - Health Care Services and Uniprise

                    

Health Care Services:

                    

Risk-based commercial

   7,765     7,805    7,700    7,655

Fee-based commercial

   3,895 (c)   3,615    3,455    3,305

Medicare

   395     375    355    330

Medicaid

   1,250     1,230    1,265    1,260
    

 
  
  

Total Health Care Services

   13,305     13,025    12,775    12,550
    

 
  
  

Uniprise

   10,480     10,505    10,540    9,875
    

 
  
  

(a) Excludes individuals served by PacifiCare Health Systems, Inc., which was acquired in December 2005.
(b) Reflects a 20,000 person reduction in UnitedHealthcare’s December 31, 2005 commercial membership pursuant to a Consent Decree from the Department of Justice related to the PacifiCare merger.
(c) Includes 255,000 individuals served by United Medical Resources, Inc., which was acquired in December 2005.
(d) Reflects the divestiture of 85,000 members pursuant to the sale of the Golden Rule life insurance and annuity business in October 2005.

 

PacifiCare Membership

 

PacifiCare member data is being reviewed by UnitedHealth Group pursuant to the December 20, 2005 merger. As of December 31, 2005, PacifiCare estimated year-end commercial membership of approximately 2.3 million accessing risk-based benefits and 100,000 accessing fee-based benefits. In addition, approximately 750,000 individuals received Medicare-sponsored benefits as of December 31, 2005. The member data reflects projected fourth quarter net sales and dis-enrollment activities and a partial writedown related to the rapid run-off experienced by its 2005 Pacific Life indemnity insurance acquisition, representing a total net reduction of approximately 100,000 commercial members, as well as the discontinuance of approximately 70,000 members to be divested pursuant to a Consent Decree with the Department of Justice and the completed divestiture of PacifiCare’s Guam-based business. Beginning in the first quarter of 2006, membership for PacifiCare will be included in UnitedHealth Group’s reported amounts.