United Healthcare 2006 Annual Report Download - page 32

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Business Overview
UnitedHealth Group is a diversified health and well-being company, serving approximately 70 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 provide employers and consumers 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.
Financial Restatements
All of the financial information presented in this Item 7 has been adjusted to reflect the restatement of the
Company’s financial results, which is more fully described in the “Explanatory Note” immediately preceding
Part I, Item 1 and in Note 3, “Restatement of Consolidated Financial Statements” of the Notes to Consolidated
Financial Statements in this Form 10-K. The impact under FAS 123R of recognizing additional stock-based
compensation expense and related tax effects as a result of historic stock option practices as well as immaterial
adjustments unrelated to historic stock option practices that were identified through a review of the Company’s
accounting practices is $43 million ($57 million net of tax) in 2005, $40 million ($44 million net of tax) in 2004,
and an aggregate of $453 million ($313 million net of tax) for 2003 and all prior years. The impact under APB 25
of all errors is $304 million ($238 million net of tax) in 2005, $200 million ($158 million net of tax) in 2004, and
an aggregate of $1,056 million ($738 million net of tax) for 2003 and all prior years. The Company also
conducted a sensitivity analysis to assess how the restatement adjustment would have changed under two
alternative methodologies for determining measurement dates. See “— Critical Accounting Policies and
Estimates — Stock Option Measurement Dates” for details.
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