United Healthcare 2004 Annual Report Download - page 23

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UNITEDHEALTH GROUP 21
Business Overview
UnitedHealth Group is a diversified health and well-being company, serving approximately 55 million
Americans. Our focus is on improving the American health care system by simplifying the administrative
components of health care delivery; promoting evidence-based medicine as the standard for care; and
providing relevant, actionable data that physicians, health care providers, consumers, employers and other
participants in health care can use to make better, more informed decisions.
Through our diversified family of businesses, we leverage core competencies in advanced technology-
based transactional capabilities; health care data, knowledge and informatics; and health care resource
organization and care facilitation to make health care work better. We provide individuals with access
to quality, cost-effective health care services and resources. We promote the delivery of care, consistent
with the best available evidence for effective health care. We provide employers with superb value, service
and support, and we deliver value to our shareholders by executing a business strategy founded upon
a commitment to balanced growth, profitability and capital discipline.
2004 Financial Performance Highlights
UnitedHealth Group had an excellent year in 2004. The company achieved diversified growth
across its business segments and generated net earnings of $2.6 billion and operating cash flows
of $4.1 billion, representing increases of 42% and 38%, respectively, over 2003. Other financial
performance highlights include:
>Diluted net earnings per common share of $3.94, representing an increase of 33% over 2003.
>Revenues of $37.2 billion, a 29% increase over 2003. Excluding the impact of acquisitions, revenues
increased 8% over 2003.
>Operating earnings of more than $4.1 billion, up 40% over 2003.
>Consolidated operating margin of 11.0%, up from 10.2% in 2003, driven primarily by improved
margins on risk-based products, revenue mix changes and operational and productivity improvements.
>Return on shareholders’ equity of 31.4%.
UnitedHealth Group acquired Oxford Health Plans, Inc. (Oxford) in July 2004 for total consideration
of approximately $5.0 billion and acquired Mid Atlantic Medical Services, Inc. (MAMSI) in February 2004 for
total consideration of approximately $2.7 billion. The results of operations and financial condition of Oxford
and MAMSI have been included in UnitedHealth Group’s Consolidated Financial Statements since the
respective acquisition dates.
RESULTS OF OPERATIONS