United Healthcare 2006 Annual Report Download - page 3

EXPLANATORY NOTE
In this Form 10-K, UnitedHealth Group Incorporated (“UnitedHealth Group” or the “Company”) is restating its
Consolidated Balance Sheet as of December 31, 2005, and the related Consolidated Statements of Operations,
Changes in Shareholders’ Equity and Cash Flows for each of the fiscal years ended December 31, 2005 and
December 31, 2004 and quarterly financial data for the quarter ended December 31, 2005.
This Form 10-K also reflects the restatement of “Selected Financial Data” in Item 6 for the fiscal years ended
December 31, 2005, 2004, 2003 and 2002, and the amendment of “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” presented in the Company’s Form 10-K for the fiscal year ended
December 31, 2005 as it related to the fiscal years ended December 31, 2005 and December 31, 2004.
Immediately prior to the filing of this Form 10-K, the Company filed an amended quarterly report on Form 10-Q/A
for the quarter ended March 31, 2006 and quarterly reports on Form 10-Q for the quarters ended June 30, 2006 and
September 30, 2006. These Forms 10-Q/A and 10-Q contain restated financial information for the first three fiscal
quarters of 2005 and the quarter ended March 31, 2006.
Previously filed annual reports on Form 10-K and quarterly reports on Form 10-Q (other than for the quarter
ended March 31, 2006, which has been amended by the Form 10-Q/A) have not been amended and should not be
relied upon.
Background of the Restatement
In March 2006, media reports questioned whether a number of companies, including UnitedHealth Group, had
engaged in backdating stock option grants. Shortly thereafter, the Company was notified that the Securities and
Exchange Commission (the “SEC”) had commenced an inquiry into the Company’s historic practices concerning
stock option grants.
On April 4, 2006, the Company’s Board of Directors (the “Board”) created an independent committee comprised
of three independent directors to review the Company’s option grant practices over the period from 1994 through
2005 (the “Independent Review Period”). The independent committee engaged the law firm of Wilmer Cutler
Pickering Hale and Dorr LLP (“WilmerHale”) as counsel for its independent review, and WilmerHale retained
independent accounting advisors. WilmerHale has advised that, in the course of its review, it examined physical
and electronic documents comprising more than 26 million pages of material and conducted over 80 interviews.
WilmerHale’s report of its findings (the “WilmerHale Report”) was furnished to the Board and publicly issued
on October 15, 2006. The complete text of the WilmerHale Report is available on the Company’s Web site,
www.unitedhealthgroup.com, and is included as an exhibit to the Company’s Current Report on Form 8-K filed
with the SEC on October 16, 2006.
After substantially completing its analysis of the accounting adjustments necessary to reflect the findings of the
WilmerHale Report, on November 8, 2006, the Company filed with the SEC a Current Report on Form 8-K
reporting management’s conclusion, which the Audit Committee of the Board had approved, that — due solely to
the Company’s historic stock option practices — the Company’s financial statements for the fiscal years ended
December 31, 1994 through 2005, the interim periods contained therein, the quarter ended March 31, 2006 and
all earnings and press releases, including for the quarters ended June 30, 2006 and September 30, 2006, and
similar communications issued by the Company for such periods, and the related reports of the Company’s
independent registered public accounting firm, should no longer be relied upon. The Form 8-K also reported that
management had re-evaluated its assessment of the Company’s internal controls over financial reporting and had
concluded that, as of December 31, 2005, the Company had a material weakness solely relating to stock option
plan administration and accounting for and disclosure of stock option grants.
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