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The following tables present the effect of the restatement adjustments by financial statement line item for the
Consolidated Statements of Operations, Balance Sheet, Statement of Changes in Shareholders’ Equity and
Statements of Cash Flows. The tables have been presented on both a FAS 123R basis, which the Company
adopted on January 1, 2006, and on an APB 25 basis, which was used for all periods prior to January 1, 2006.
Consolidated Statements of Operations
For the Year 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 .................... $41,058 $1,038 $42,096 $ — $ — $42,096
Services ..................... 3,808 (142) 3,666 — — 3,666
Products ..................... — 158 158 — — 158
Investment and Other Income .... 499 6 505 — — 505
TotalRevenues............ 45,365 1,060 46,425 — — 46,425
Operating Costs
Medical Costs ................. 32,725 944 33,669 — — 33,669
Operating Costs ............... 6,814 331 7,145 (67) 56 7,134
CostofProductsSold........... — 89 89 — — 89
Depreciation and Amortization . . . 453 — 453 — — 453
Total Operating Costs . . . . . . 39,992 1,364 41,356 (67) 56 41,345
Earnings From Operations ......... 5,373 (304) 5,069 67 (56) 5,080
Interest Expense ............... (241) — (241) — — (241)
Earnings Before Income Taxes ...... 5,132 (304) 4,828 67 (56) 4,839
Provision for Income Taxes ...... (1,832) 66 (1,766) 1 9 (1,756)
Net Earnings ..................... $ 3,300 $ (238) $ 3,062 $ 68 $ (47) $ 3,083
Basic Net Earnings per Common
Share ......................... $ 2.61 $(0.19) $ 2.42 $0.05 $(0.03) $ 2.44
Diluted Net Earnings per Common
Share ......................... $ 2.48 $(0.17) $ 2.31 $0.05 $(0.05) $ 2.31
Basic Weighted-Average Number of
Common Shares Outstanding ..... 1,265 — 1,265 — — 1,265
Dilutive Effect of Common Stock
Equivalents .................... 65 (2) 63 2 3 68
Diluted Weighted-Average Number of
Common Shares Outstanding ..... 1,330 (2) 1,328 2 3 1,333
(1) Includes $317 million of stock-based compensation and $89 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 $1,113 million, medical costs of $1,016 million and operating costs of $97 million to
reflect a reinsurance contract on a gross basis to conform to our current presentation. 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 in 2005.
(2) Reflects $250 million of stock-based compensation and $90 million of deferred tax benefit as recorded
under the modified retrospective method of adoption of FAS 123R that would have been recognized based
on our original pro forma disclosure under FAS 123 prior to the restatement, 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 to correct the previously
presented pro forma disclosures for the effects of the historical stock option practices and includes $56
million of additional stock-based compensation and $9 million of related deferred tax benefit.
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