N E W S R E L E A S E
[UNITEDHEALTH GROUP LOGO]
Contacts: John S. Penshorn
Director of Capital Markets
Communications & Strategy
952-936-7214
Patrick J. Erlandson
Chief Financial Officer
952-936-5901
(For Immediate Release)
UNITEDHEALTH GROUP REPORTS RECORD
FIRST QUARTER NET EARNINGS OF $1.29 PER SHARE
o REVENUES FOR FIRST QUARTER EXCEEDED $6.9 BILLION, UP 16%
o OPERATING MARGIN INCREASED TO 9.4%
o REPORTED OPERATING CASH FLOWS OF $725 MILLION; ADJUSTED CASH FLOWS OF
$870 MILLION
o RETURN ON EQUITY EXCEEDED 36%
MINNEAPOLIS (April 16, 2003) - UnitedHealth Group (NYSE: UNH) achieved record
results in the first quarter of 2003, reported Chairman and CEO William W.
McGuire, M.D. today. First quarter results were driven by strong performance
across the family of UnitedHealth Group operating businesses.
[UNITEDHEALTH GROUP LOGO]
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QUARTERLY FINANCIAL PERFORMANCE
THREE MONTHS ENDED
------------------
MARCH 31, DECEMBER 31, MARCH 31,
2003 2002 2002
---- ---- ----
Revenues $6.98 billion $6.68 billion $6.01 billion
Earnings From Operations $653 million $609 million $482 million
Operating Margin 9.4% 9.1% 8.0%
- --------------------------------------------------------------------------------
Effective January 1, 2003 the Company transferred Medicaid-related business
oversight from UnitedHealthcare to AmeriChoice, as well as certain
Medicare-related businesses from UnitedHealthcare to Ovations and managed health
plan services from UnitedHealthcare to Uniprise. The 2002 segment financial
information has been restated for comparability purposes to conform to the
current composition of business segments. The restatement had no effect on
previously reported 2002 consolidated financial information. Comparative
revenues and earnings from operations for each business segment for all quarters
of 2002 on both a reported and restated basis are included in the attached
schedules. All amounts and computations in this earnings report are presented
using 2002 restated segment financial information.
UNITEDHEALTH GROUP HIGHLIGHTS
o First quarter earnings per share of $1.29 increased 40 percent from
$0.92 in the first quarter of 2002, and improved 9 cents or 8 percent
from the fourth quarter of 2002.
o First quarter consolidated net earnings increased to $403 million, up
$108 million or 37 percent year-over-year.
o Consolidated revenues increased $962 million or 16 percent
year-over-year to approach $7.0 billion, reflecting balanced growth
across the Company's business segments.
o Operating costs were 17.2 percent of revenue in the first quarter, an
improvement of 30 basis points from the fourth quarter of 2002 and 10
basis points from the first quarter of 2002.
o Earnings from operations increased to $653 million in the first
quarter, up $171 million or 35 percent over the prior year, and up $44
million or 7 percent sequentially.
o Consolidated first quarter operating margin improved to 9.4 percent
from 8.0 percent in the first quarter of 2002.
UNITEDHEALTH GROUP HIGHLIGHTS - CONTINUED
o Excluding the AARP division of Ovations,
o March 31, 2003 receivables decreased $30 million or 6
percent sequentially to $511 million, and declined $29
million year-over-year, even as related quarterly revenues
increased $904 million year-over-year or 18 percent during
this time frame.
o Medical cost days payable, at 66 days, were in line with
results over the past four years. Medical payables increased
$238 million or 8 percent in the first quarter and $452
million or 17 percent year-over-year, standing at $3.1
billion at March 31, 2003.
o Reported cash flows from operations were $725 million for the first
quarter. Adjusted for the $145 million premium payment due in the
first quarter of 2003 that was received from the Centers for Medicare
and Medicaid Services on December 31, 2002, operating cash flows were
$870 million, up 59 percent year-over-year on a comparable basis.
o The company purchased in excess of 5 million shares of UnitedHealth
Group stock during the first quarter of 2003 at a weighted-average
price below $84 per share.
o First quarter 2003 annualized return on equity reached 36.3 percent.
CLOSING COMMENT
"Efforts to provide strong value propositions and performance on behalf of our
customers, coupled with our service advances and modern technology, have enabled
us to accelerate our revenue growth rate year-over-year while further expanding
our operating margin," Dr. McGuire concluded. "Based on our early 2003
performance, we now expect full year earnings per share growth of around 27
percent in 2003."
BUSINESS DESCRIPTION
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 first
quarter results, strategy and future outlook on a conference call with investors
at 8:45 a.m. EDT today. UnitedHealth Group will host a live webcast of this
conference call from the company's Web site (http://www.unitedhealthgroup.com).
The conference call webcast is open to all interested parties.
[UNITEDHEALTHCARE LOGO] [OVATIONS LOGO]
[AMERICHOICE 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 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, including the administration of supplemental
health insurance coverage on behalf of AARP.
- --------------------------------------------------------------------------------
QUARTERLY FINANCIAL PERFORMANCE
THREE MONTHS ENDED
------------------
MARCH 31, DECEMBER 31, MARCH 31,
2003 2002 2002
---- ---- ----
Revenues $6.01 billion $5.76 billion $5.18 billion
Earnings From Operations $402 million $382 million $276 million
Operating Margin 6.7% 6.6% 5.3%
- --------------------------------------------------------------------------------
KEY DEVELOPMENTS FOR HEALTH CARE SERVICES
o Revenues for Health Care Services grew $831 million or 16 percent
year-over-year in the first quarter of 2003.
o First quarter Health Care Services operating earnings of $402 million
increased $126 million or 46 percent year-over-year and $20 million or 5
percent sequentially.
o First quarter operating margin of 6.7 percent expanded 140 basis points
year-over-year and 10 basis points sequentially.
KEY DEVELOPMENTS FOR HEALTH CARE SERVICES - CONTINUED
UNITEDHEALTHCARE
o First quarter revenues of $3.8 billion for UnitedHealthcare increased
15 percent year-over-year.
o Fee-based services grew by more than 90,000 individuals in the
quarter, bringing year-over-year net growth to 260,000, up 10 percent.
Risk-based commercial enrollment grew by more than 100,000 individuals
in the first quarter. These gains were largely offset by the
elimination of 150,000 people due to the final phase of a targeted
reduction in the multi-option, multi-carrier segment of the commercial
marketplace and by the loss of more than 35,000 people from employment
attrition at existing customers due to weak business conditions in the
U.S. economy.
o UnitedHealthcare's commercial medical care ratio of 81.5 percent was
stable with the fourth quarter of 2002, as strong, consistent pricing
was appropriately matched to underlying costs.
AMERICHOICE
o The AmeriChoice business generated strong operational performance in
the first quarter of 2003. Operating margins were stable
year-over-year, as price increases averaging 3 percent were matched
with modest medical cost trends, largely moderated by the effective
application of the AmeriChoice Personal Care model in the 10 states in
which AmeriChoice currently does business.
o AmeriChoice Medicaid enrollment grew by 15,000 in the first quarter of
2003, reaching 1.045 million people.
OVATIONS
o Ovations reported record revenues of $1.6 billion in the first
quarter, up $47 million or 3 percent year-over-year and $58 million or
4 percent from fourth quarter 2002.
o The actively marketed standardized Medicare supplement program,
managed by Ovations on behalf of AARP, realized a net 70,000 increase
in subscribers in the first quarter of 2003. The active program
subscriber growth rate has continued to accelerate and reached 13
percent on a year-over-year basis.
[UNIPRISE LOGO]
BUSINESS DESCRIPTION
Uniprise provides 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.
- --------------------------------------------------------------------------------
QUARTERLY FINANCIAL PERFORMANCE
THREE MONTHS ENDED
------------------
MARCH 31, DECEMBER 31, MARCH 31,
2003 2002 2002
---- ---- ----
Revenues $769 million $702 million $660 million
Earnings From Operations $152 million $130 million $128 million
Operating Margin 19.8% 18.5% 19.4%
- --------------------------------------------------------------------------------
KEY DEVELOPMENTS
o First quarter revenues of $769 million increased 17 percent over first
quarter 2002 and 10 percent sequentially, principally due to new business
growth.
o Uniprise directly serves 9.3 million people in the national multi-location
employer segment, having added more than 700,000 individuals as part of the
January enrollment cycle, offset by the attrition of more than 40,000
individuals from existing customers as a direct result of continued
weakness in the U.S. employment market.
o Operating margin expanded 40 basis points year-over-year and 130 basis
points sequentially, reaching 19.8 percent in the first quarter of 2003.
Advances in customer service and operational productivity coupled with
strong growth contributed to the overall operating margin expansion.
o The combination of top-line growth and margin expansion drove first quarter
operating income to $152 million, an increase of $24 million or 19 percent
year-over-year, and up $22 million or 17 percent from the fourth quarter of
2002.
[SPECIALIZED CARE SERVICES 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
------------------
MARCH 31, DECEMBER 31, MARCH 31,
2003 2002 2002
---- ---- ----
Revenues $454 million $386 million $367 million
Earnings From Operations $88 million $79 million $66 million
Operating Margin 19.4% 20.5% 18.0%
- --------------------------------------------------------------------------------
KEY DEVELOPMENTS
o First quarter revenues rose to $454 million, up $87 million or 24 percent
year-over-year, and up $68 million or 18 percent from the fourth quarter of
2002, with strong growth across the nine component companies of this
segment.
o Specialized Care Services expanded its services to approximately 2 million
unique new consumers in the first quarter of 2003 as compared to year-end
2002. The segment realized strong sequential growth in many of its
businesses, including ACN Group, Dental Benefit Providers, Spectera and
United Behavioral Health.
o The operating margin of 19.4 percent expanded 140 basis points from the
comparable quarter in the prior year. Year-over-year margin expansion
reflected the segment's significant progress in aligning assets, technology
and operating platforms to improve performance.
o In the first quarter, operating earnings of $88 million increased $22
million or 33 percent year-over-year and $9 million or 11 percent
sequentially.
[INGENIX LOGO]
BUSINESS DESCRIPTION
Ingenix is an international leader in the field of health care data, analysis
and application. The company serves multiple health care market segments on a
business-to-business basis, including pharmaceutical companies, health insurers
and other payers, care providers, large employers and governments.
- --------------------------------------------------------------------------------
QUARTERLY FINANCIAL PERFORMANCE
THREE MONTHS ENDED
------------------
MARCH 31, DECEMBER 31, MARCH 31,
2003 2002 2002
---- ---- ----
Revenues $121 million $155 million $109 million
Earnings From Operations $11 million $18 million $12 million
Operating Margin 9.1% 11.6% 11.0%
- --------------------------------------------------------------------------------
KEY DEVELOPMENTS
o Ingenix revenues increased 11 percent year-over-year or $12 million to $121
million in the first quarter of 2003.
o First quarter revenues decreased $34 million from the fourth quarter of
2002 as a reflection of seasonal demand for publication products and
software offerings, which peaks annually in the fourth quarter.
o Strong first quarter operating margin within Ingenix Health Intelligence
was offset by relatively weaker performance within the Ingenix
Pharmaceutical Services unit, which has been challenged by suboptimal
industry conditions. The level of pharmaceutical services business activity
strengthened in the first quarter with bookings exceeding $50 million
year-to-date, which significantly restores revenue backlog for the balance
of 2003.
###
UNITEDHEALTH GROUP
EARNINGS RELEASE SCHEDULES AND SUPPLEMENTARY INFORMATION
QUARTER ENDED MARCH 31, 2003
- Consolidated Statements of Operations
- Condensed Consolidated Balance Sheets
- Condensed Consolidated Statements of Cash Flows
- Segment Financial Information
- 2002 Segment Financial Information - Revenues Restated for
Business Unit Transfers
- 2002 Segment Financial Information - Earnings from Operations
Restated for Business Unit Transfers
- Franchise Profile - Health Care Services and Uniprise
- Reconciliation of Non-GAAP Financial Measures
UNITEDHEALTH GROUP
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
THREE MONTHS ENDED MARCH 31,
------------------------------------------
2003 2002
---------------- -----------------
REVENUES
Premiums $ 6,148 $ 5,246
Services 770 705
Investment and Other Income 57 62
---------------- -----------------
Total Revenues 6,975 6,013
---------------- -----------------
COSTS
Medical Costs 5,050 4,435
Operating Costs 1,199 1,040
Depreciation and Amortization 73 56
---------------- -----------------
Total Costs 6,322 5,531
---------------- -----------------
EARNINGS FROM OPERATIONS 653 482
Interest Expense (23) (24)
---------------- -----------------
EARNINGS BEFORE INCOME TAXES 630 458
Provision for Income Taxes (227) (163)
---------------- -----------------
NET EARNINGS $ 403 $ 295
================ =================
BASIC NET EARNINGS PER COMMON SHARE $ 1.35 $ 0.96
================ =================
DILUTED NET EARNINGS PER COMMON SHARE $ 1.29 $ 0.92
================ =================
Weighted-Average Common Shares
Outstanding, Assuming Dilution 311.6 321.5
================ =================
UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)
MARCH 31, DECEMBER 31,
2003 2002
------------------ -------------------
ASSETS
Cash and Short-Term Investments $ 2,040 $ 1,831
Receivables, net 835 835
Other Current Assets 2,494 2,508
------------------ -------------------
Total Current Assets 5,369 5,174
Long-Term Investments 4,555 4,498
Other Long-Term Assets 4,521 4,492
------------------ -------------------
Total Assets $ 14,445 $ 14,164
================== ===================
LIABILITIES AND SHAREHOLDERS' EQUITY
Medical Costs Payable $ 4,027 $ 3,741
Commercial Paper and Current Maturities
of Long-Term Debt 402 811
Other Current Liabilities 3,743 3,827
------------------ -------------------
Total Current Liabilities 8,172 8,379
Long-Term Debt, less current maturities 1,400 950
Deferred Income Taxes and Other Liabilities 429 407
Shareholders' Equity 4,444 4,428
------------------ -------------------
Total Liabilities and Shareholders' Equity $ 14,445 $ 14,164
================== ===================
-------------------------------------------------------------------------------------
The table below summarizes certain balance sheet data excluding AARP related amounts.
March 31, 2003 December 31, 2002
-------------- -----------------
Receivables, net $ 511 $ 541
Other Current Assets $ 482 $ 463
Other Current Liabilities $ 2,348 $ 2,381
Medical Costs Payable $ 3,086 $ 2,848
Days Medical Costs in Medical Costs Payable 66 66
------------------------------------------------------------------------------------
UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
THREE MONTHS ENDED MARCH 31,
----------------------------
2003 2002
----------- ------------
Operating Activities
Net Earnings $ 403 $ 295
Noncash Items:
Depreciation and amortization 73 56
Deferred income taxes and other 8 20
Net changes in operating assets and liabilities 241 (1)
----------- ------------
Cash Flows From Operating Activities 725 370
----------- ------------
INVESTING ACTIVITIES
Cash paid for acquisitions (6) (8)
Purchases of property, equipment and
capitalized software (92) (128)
Net sales and maturities/(purchases) of investments 427 133
----------- ------------
Cash Flows From (Used For) Investing Activities 329 (3)
----------- ------------
FINANCING ACTIVITIES
Common stock repurchases (496) (450)
Net change in commercial paper and debt 41 (74)
Other, net 73 64
----------- ------------
Cash Flows Used For Financing Activities (382) (460)
----------- ------------
Increase (Decrease) in cash and cash equivalents 672 (93)
Cash and cash equivalents, beginning of period 1,130 1,540
----------- ------------
Cash and cash equivalents, end of period $ 1,802 $ 1,447
=========== ============
UNITEDHEALTH GROUP
SEGMENT FINANCIAL INFORMATION
(in millions)
(unaudited)
REVENUES
THREE MONTHS ENDED MARCH 31,
--------------------------------------
2003 2002 (a)
---------------- ----------------
UnitedHealthcare $ 3,767 $ 3,270
Ovations 1,610 1,563
AmeriChoice 637 350
---------------- ----------------
Health Care Services 6,014 5,183
Uniprise 769 660
Specialized Care Services 454 367
Ingenix 121 109
Corporate and eliminations (383) (306)
---------------- ----------------
Total Consolidated $ 6,975 $ 6,013
================ ================
EARNINGS FROM OPERATIONS
THREE MONTHS ENDED MARCH 31,
------------------------------------
2003 2002 (a)
---------------- --------------
Health Care Services $ 402 $ 276
Uniprise 152 128
Specialized Care Services 88 66
Ingenix 11 12
---------------- --------------
Total Operating Segments 653 482
Corporate - -
---------------- --------------
Total Consolidated $ 653 $ 482
================ ==============
(a) Effective January 1, 2003, the Company transferred Medicaid-related
business oversight from UnitedHealthcare to AmeriChoice, as well as certain
Medicare-related businesses from UnitedHealthcare to Ovations and managed
health plan services from UnitedHealthcare to Uniprise. The 2002 segment
financial information has been restated for comparability purposes to
conform to the current composition of business segments. The restatement
had no effect on previously reported 2002 consolidated financial
information.
UNITEDHEALTH GROUP
2002 SEGMENT FINANCIAL INFORMATION - REVENUES
RESTATED FOR BUSINESS UNIT TRANSFERS
(in millions)
(unaudited)
REPORTED
Q1 2002 Q2 2002 Q3 2002 Q4 2002 FULL YEAR 2002
-------------- ------------- -------------- ------------- ---------------
REVENUES
UnitedHealthcare $ 4,071 $ 4,105 $ 4,222 $ 4,617 $ 17,015
Ovations 1,135 1,160 1,168 1,166 4,629
-------------- ------------- -------------- ------------- ---------------
Health Care Services 5,206 5,265 5,390 5,783 21,644
Uniprise 657 659 698 699 2,713
Specialized Care Services 367 375 381 386 1,509
Ingenix 109 109 118 155 491
Corporate and eliminations (326) (330) (340) (341) (1,337)
-------------- ------------- -------------- ------------- ---------------
Total Consolidated $ 6,013 $ 6,078 $ 6,247 $ 6,682 $ 25,020
============== ============= ============== ============= ===============
RESTATED (a)
Q1 2002 Q2 2002 Q3 2002 Q4 2002 FULL YEAR 2002
-------------- ------------- -------------- ------------- ---------------
REVENUES
UnitedHealthcare $ 3,270 $ 3,341 $ 3,458 $ 3,598 $ 13,667
Ovations 1,563 1,558 1,556 1,552 6,229
AmeriChoice 350 343 353 610 1,656
-------------- ------------- -------------- ------------- ---------------
Health Care Services 5,183 5,242 5,367 5,760 21,552
Uniprise 660 662 701 702 2,725 (b)
Specialized Care Services 367 375 381 386 1,509
Ingenix 109 109 118 155 491
Corporate and eliminations (306) (310) (320) (321) (1,257)(b)
-------------- ------------- -------------- ------------- ---------------
Total Consolidated $ 6,013 $ 6,078 $ 6,247 $ 6,682 $ 25,020
============== ============= ============== ============= ===============
(a) Effective January 1, 2003, the Company transferred Medicaid-related
business oversight from UnitedHealthcare to AmeriChoice, as well as certain
Medicare-related businesses from UnitedHealthcare to Ovations and managed
health plan services from UnitedHealthcare to Uniprise. The 2002 segment
financial information has been restated for comparability purposes to
conform to the current composition of business segments. The restatement
had no effect on previously reported 2002 consolidated financial
information.
(b) The transfer of managed health plan services to Uniprise resulted in a net
increase to Uniprise's 2002 restated revenues of $12 million. This net
increase is comprised of a $92 million increase in external customer
revenues partially offset by an $80 million decrease in internal revenues
related to customer service and transaction processing services that were
previously charged to UnitedHealthcare by Uniprise. The transfer of managed
health plan services to Uniprise more appropriately aligns these service
offerings internally resulting in a decrease of $80 million in both
internal revenues and intercompany eliminations which are no longer
necessary.
UNITEDHEALTH GROUP
2002 SEGMENT FINANCIAL INFORMATION - EARNINGS FROM OPERATIONS
RESTATED FOR BUSINESS UNIT TRANSFERS
(in millions)
(unaudited)
REPORTED
Q1 2002 Q2 2002 Q3 2002 Q4 2002 FULL YEAR 2002
------------ ------------ ------------- ------------- --------------
EARNINGS FROM OPERATIONS
Health Care Services $ 278 $ 316 $ 358 $ 384 $ 1,336
Uniprise 126 127 128 128 509
Specialized Care Services 66 68 73 79 286
Ingenix 12 12 13 18 55
------------ ------------ ------------- ------------- ------------
Total Consolidated $ 482 $ 523 $ 572 $ 609 $ 2,186
============ ============ ============= ============= ============
RESTATED (a)
Q1 2002 Q2 2002 Q3 2002 Q4 2002 FULL YEAR 2002
------------ ------------ ------------- ------------- --------------
EARNINGS FROM OPERATIONS
Health Care Services $ 276 $ 314 $ 356 $ 382 $ 1,328
Uniprise 128 129 130 130 517
Specialized Care Services 66 68 73 79 286
Ingenix 12 12 13 18 55
------------ ------------ ------------- ------------- ------------
Total Consolidated $ 482 $ 523 $ 572 $ 609 $ 2,186
============ ============ ============= ============= ============
(a) Effective January 1, 2003, the Company transferred Medicaid-related
business oversight from UnitedHealthcare to AmeriChoice, as well as certain
Medicare-related businesses from UnitedHealthcare to Ovations and managed
health plan services from UnitedHealthcare to Uniprise. The 2002 segment
financial information has been restated for comparability purposes to
conform to the current composition of business segments. The restatement
had no effect on previously reported 2002 consolidated financial
information.
HEALTH CARE SERVICES AND UNIPRISE
FRANCHISE PROFILE
(individuals served in thousands)
(unaudited)
MARCH DECEMBER MARCH DECEMBER
2003 2002 2002 2001
------------- ------------ ------------- ------------
Health Care Services Commercial:
Risk-Based 4,995 5,070 4,960 5,250
Fee-Based 2,805 2,715 2,545 2,305
------------- ------------ ------------- ------------
Total Health Care Services Commercial 7,800 7,785 7,505 7,555
Uniprise 9,315 8,640 8,685 7,970
------------- ------------ ------------- ------------
Total Commercial 17,115 16,425 16,190 15,525
============= ============ ============= ============
Health Care Services Government Programs:
Medicare 225 225 235 345
Medicaid 1,045 1,030 655 640
------------- ------------ ------------- ------------
Total Health Care Services Government Programs 1,270 1,255 890 985
============= ============ ============= ============
UNITEDHEALTH GROUP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions)
(unaudited)
FINANCIAL MEASURES EXCLUDING AARP GAAP REPORTED EXCLUDING
AMOUNT AARP BUSINESS AARP BUSINESS
------------- ----------------- ---------------
MARCH 31, 2003
Receivables, net $ 835 $ 324 $ 511
Medical Costs Payable $ 4,027 $ 941 $ 3,086
DECEMBER 31, 2002
Receivables, net $ 835 $ 294 $ 541
Medical Costs Payable $ 3,741 $ 893 $ 2,848
MARCH 31, 2002
Receivables, net $ 834 $ 294 $ 540
Medical Costs Payable $ 3,535 $ 901 $ 2,634
ADJUSTED CASH FLOWS FROM OPERATING ACTIVITIES
THREE MONTHS ENDED MARCH 31,
-------------------------------------------
2003 2002
----------------- -----------------
GAAP Cash Flows From Operating Activities $ 725 $ 370
January CMS Premium Payment
Received in December 145 178
----------------- -----------------
Adjusted Cash Flows From Operating Activities $ 870 $ 548
================= =================