United Healthcare 2006 Annual Report Download - page 110

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CONSOLIDATED QUARTERLY STATEMENTS OF OPERATIONS
For the Quarter Ended December 31, 2005
APB 25 — Historical Accounting Method FAS 123R — Current Accounting Method
(in millions, except per share data) As Reported Adjustments (1) As Restated Adoption (2) Adjustments (3) As Restated
Revenues
Premiums ................. $10,880 $ 243 $11,123 $ — $ — $11,123
Services ................... 1,044 (80) 964 — — 964
Products .................. — 78 78 — — 78
Investment and Other
Income ................. 121 — 121 — — 121
Total Revenues ......... 12,045 241 12,286 — — 12,286
Operating Costs
Medical Costs .............. 8,624 259 8,883 — — 8,883
Operating Costs ............ 1,872 66 1,938 (11) 14 1,941
Cost of Products Sold ........ — 45 45 — — 45
Depreciation and
Amortization ............. 120 — 120 — — 120
Total Operating Costs .... 10,616 370 10,986 (11) 14 10,989
Earnings From Operations ...... 1,429 (129) 1,300 11 (14) 1,297
Interest Expense ............ (75) — (75) — — (75)
Earnings Before Income Taxes . . . 1,354 (129) 1,225 11 (14) 1,222
Provision for Income Taxes . . . (484) 35 (449) 3 2 (444)
Net Earnings .................. $ 870 $ (94) $ 776 $ 14 $ (12) $ 778
Basic Net Earnings per Common
Share ...................... $ 0.69 $(0.08) $ 0.61 $0.01 $(0.01) $ 0.61
Diluted Net Earnings per
Common Share .............. $ 0.65 $(0.07) $ 0.58 $0.01 $(0.01) $ 0.58
Basic Weighted-Average Number
of Common Shares
Outstanding ................. 1,271 — 1,271 — — 1,271
Dilutive Effect of Common Stock
Equivalents ................. 67 (2) 65 2 4 71
Diluted Weighted-Average
Number of Common Shares
Outstanding ................. 1,338 (2) 1,336 2 4 1,342
(1) Includes $78 million of stock-based compensation and $21 million of deferred tax benefit associated with
the restatement of our historical APB 25 Consolidated Statement of Operations as well as an adjustment to
premium revenue of $280 million, medical costs of $256 million and operating costs of $24 million to
reflect a reinsurance contract on a gross basis. We have also reclassified certain service revenues and
operating costs to product revenues and cost of products sold, respectively, primarily related to our
pharmacy benefit management business acquired as part of the PacifiCare acquisition in December 2005 in
order to conform to our current presentation.
(2) Reflects $67 million of stock-based compensation and $24 million of deferred tax benefit as recorded under
the modified retrospective method of adoption of FAS 123R, net of the restatement adjustments under APB
25.
(3) Represents adjustments made to restate our Consolidated Statement of Operations subsequent to the
adoption of FAS 123R under the modified retrospective method of adoption and includes $14 million of
additional stock-based compensation and $2 million of related deferred tax benefit.
108