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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ÈANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
OR
‘TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
Commission file number: 1-10864
UNITEDHEALTH GROUP INCORPORATED
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1321939
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
UNITEDHEALTH GROUP CENTER
9900 BREN ROAD EAST
MINNETONKA, MINNESOTA 55343
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (952) 936-1300
Securities registered pursuant to Section 12(b) of the Act:
COMMON STOCK, $.01 PAR VALUE NEW YORK STOCK EXCHANGE, INC.
(Title of each class) (Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ÈNo ‘
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes ‘No È
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ÈNo ‘
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. È
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a
smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ÈAccelerated filer ‘
Non-accelerated filer ‘Smaller reporting company ‘
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ‘No È
The aggregate market value of voting stock held by non-affiliates of the registrant as of June 29, 2007, was $67,267,773,208
(based on the last reported sale price of $51.14 per share on June 29, 2007, on the New York Stock Exchange).*
As of February 15, 2008, there were 1,251,382,699 shares of the registrant’s Common Stock, $.01 par value per share, issued
and outstanding.
Note that in Part III of this report on Form 10-K, we “incorporate by reference” certain information from our Definitive Proxy
Statement for the Annual Meeting of Shareholders to be held on June 5, 2008. This document will be filed with the Securities
and Exchange Commission (SEC) within the time period permitted by the SEC. The SEC allows us to disclose important
information by referring to it in that manner. Please refer to such information.
* Only shares of voting stock held beneficially by directors, executive officers and subsidiaries of the Company have been
excluded in determining this number.

Table of contents

  • Page 1
    ... UNITEDHEALTH GROUP CENTER 9900 BREN ROAD EAST MINNETONKA, MINNESOTA (Address of principal executive offices) 55343 (Zip Code) Registrant's telephone number, including area code: (952) 936-1300 Securities registered pursuant to Section 12(b) of the Act: COMMON STOCK, $.01 PAR VALUE NEW YORK STOCK...

  • Page 2
    ...Statements and Supplementary Data ...Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ... Item 9A. Controls and Procedures ...Item 9B. Other Information ...PART III Item 10. Item 11. Item 12. Item 13. Item 14. Directors, Executive Officers and Corporate Governance...

  • Page 3
    ... to improve access to health and well-being services, simplify the health care experience, promote quality and make health care more affordable. Our revenues are derived from premium revenues on risk-based products; fees from management, administrative, technology and consulting services; sales of...

  • Page 4
    ... UnitedHealthcare provides coordination and facilitation of medical services, customer and health care professional services and access to a contracted network of physicians, hospitals and other health care professionals. Small employer groups are more likely to purchase risk-based products because...

  • Page 5
    ... to contract for cost-effective access to a large number of conveniently located care professionals. Directly or through UnitedHealth Group's family of companies, UnitedHealthcare offers: • • A comprehensive range of benefit plans integrating medical, ancillary and alternative care products so...

  • Page 6
    ... access to contracted networks of physicians, hospitals and other health care professionals for a fixed service fee per individual served. As of December 31, 2007, USS served 415 employers, including 175 of the Fortune 500 companies. Definity Health provides innovative consumer health care solutions...

  • Page 7
    ... (PPO), Special Needs Plans, Point-of-Service (POS) plans, and Private-Fee-for-Service plans. Under the Medicare Advantage programs, Secure Horizons provides health insurance coverage to eligible Medicare beneficiaries in exchange for a fixed monthly premium per member from CMS that varies based on...

  • Page 8
    ... offers government agencies a number of diverse management service programs - including clinical care, consulting and management, pharmacy benefit services and administrative and technology services - to help them effectively administer their distinct health care delivery systems and benefits for...

  • Page 9
    ... health information, private health portals and consumer health marketing services to address daily living concerns and assist individuals in accessing the health care system. Behavioral Solutions Behavioral Solutions serves 35 million individuals with its employee assistance programs, work/life...

  • Page 10
    ... systems for verification of benefit coverage and eligibility. Financial Services also provides electronic payment and statement services for health care professionals and payers. INGENIX Ingenix offers database and data management services, software products, publications, consulting services...

  • Page 11
    ...) and commercial health plans. Prescription Solutions' integrated PBM services include retail network pharmacy management, mail order pharmacy services, specialty pharmacy services, benefit design consultation, drug utilization review, formulary management programs, disease management and compliance...

  • Page 12
    ...employers who sponsor employee benefit health plans, particularly those that maintain self-funded plans. Regulations established by the U.S. Department of Labor provide additional rules for claims payment and member appeals under health care plans governed by ERISA. Additionally, some states require...

  • Page 13
    ...contain network, contracting, product and rate, and financial and reporting requirements. There are laws and regulations that set specific standards for delivery of services, payment of claims, adequacy of health care professional networks, fraud prevention, protection of consumer health information...

  • Page 14
    ..., third-party administrators and business services outsourcing companies, health care professionals that have formed networks to directly contract with employers or with CMS, specialty benefit providers, government entities, disease management companies, and various health information and consulting...

  • Page 15
    ... Networks. Mr. Mikan was Chief Financial Officer of Specialized Care Services (now OptumHealth) from 2003 to June 2004. Mr. Mikan joined UnitedHealth Group in 1998 and held various executive positions with the Company from 1998 to 2003. Mr. Munsell is Executive Vice President of UnitedHealth Group...

  • Page 16
    ... was President and Chief Executive Officer of AmeriChoice. Mr. Welters joined UnitedHealth Group in 2002 and held various executive positions with the Company from 2002 to 2003. Mr. Wichmann is Executive Vice President of UnitedHealth Group and President of the Commercial Markets Group and has...

  • Page 17
    ... and shareholders of record on April 3, 2006 received an annual dividend for 2006 of $0.03 per share. Issuer Purchases of Equity Securities Issuer Purchases of Equity Securities (1) Fourth Quarter 2007 Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of...

  • Page 18
    ... five-year total return to shareholders on UnitedHealth Group's common stock relative to the cumulative total returns of the S&P 500 index, and a customized peer group (the "Fortune 50 Group"), an index of certain Fortune 50 companies for the five-year period ended December 31, 2007. The second...

  • Page 19
    ... Group 12/02 UnitedHealth Group S&P 500 Fortune 50 Group 12/03 12/04 12/05 12/06 12/07 $100.00 $139.40 $211.02 $298.01 $257.81 $279.42 $100.00 $128.68 $142.69 $149.70 $173.34 $182.87 $100.00 $121.48 $134.20 $132.92 $150.72 $140.95 The stock price performance...

  • Page 20
    ... the health care industry. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among UnitedHealth Group, The S&P 500 Index And The Peer Group $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 12/02 12/03 12/04 12/05 12/06 12/07 UnitedHealth Group S&P 500 Peer Group 12/02 UnitedHealth Group S&P 500...

  • Page 21
    ... and Analysis of Financial Condition and Results of Operations and Consolidated Financial Statements and Notes. (1) On January 1, 2006, the Company began serving as a plan sponsor offering Medicare Part D drug insurance coverage under a contract with CMS. Total revenues generated under this program...

  • Page 22
    ... processing; customer, consumer and care provider services; and access to contracted networks of physicians, hospitals and other health care professionals. Through our pharmacy benefit management (PBM) business, Prescription Solutions, revenues are derived from products sold and from administrative...

  • Page 23
    ... well as annual rate increases. Product Revenues. Consolidated product revenues in 2007 totaled $898 million, an increase of $161 million, or 22%, over 2006. The increase was driven by pharmacy sales growth at Prescription Solutions primarily due to providing prescription drug benefit services to an...

  • Page 24
    ... costs as a percentage of total revenues) for 2007 of 14.0% was consistent with 2006. The operating cost ratio reflected productivity gains from technology deployment and other cost management initiatives, offset by the effect of business mix change as fee-based businesses such as Ingenix increase...

  • Page 25
    Cost of Products Sold Cost of products sold in 2007 totaled $768 million, an increase of $169 million, or 28%, over 2006. This was primarily due to costs associated with increased pharmacy sales at Prescription Solutions as a result of providing prescription drug benefit services to an additional ...

  • Page 26
    ..., products and services, types of customers, distribution methods and operational processes, and regulatory environment. These businesses also share significant common assets, including our contracted networks of physicians, health care professionals, hospitals and other facilities, information...

  • Page 27
    ... effective operating cost management. Ingenix Ingenix offers solutions to a spectrum of health care market participants on a national and international basis, including data management services, software products, publications, consulting and actuarial services, business process outsourcing services...

  • Page 28
    ... and specialty pharmacy management services to employer groups, union trusts, seniors through Medicare prescription drug plans, and commercial health plans. Prescription Solutions revenues for 2007 of $13.2 billion increased by $9.2 billion, or 224%, over 2006. This was primarily driven by providing...

  • Page 29
    ...the number of individuals served by commercial fee-based arrangements during 2006, as well as annual rate increases. In addition, Ingenix service revenues increased by approximately 22% due to new business growth in the health information and contract research businesses and from businesses acquired...

  • Page 30
    ...of 2005, Commercial Markets revenues increased by approximately 2% over 2005. This was primarily due to an 8% increase in the number of individuals served with commercial fee-based products and annual service fee rate increases for self-insured customers, as well as average premium rate increases of...

  • Page 31
    ... was driven mainly by the acquisition of PacifiCare and the new Medicare Part D program, which have lower operating margins than historic UnitedHealth Group businesses. The following table summarizes the number of individuals served by Health Care Services, by major market segment and funding...

  • Page 32
    ... include our Board of Directors' approved investment policy, regulatory limitations, return objectives, tax implications, risk tolerance and maturity dates. Our longterm investments are also available for sale to meet short-term liquidity and other needs. Cash in excess of the capital needs of our...

  • Page 33
    ... pricing processes, which seek to match premium rate increases with estimated future health care costs. In 2007, a hypothetical unexpected 1% increase in commercial insured medical costs would have reduced net earnings by approximately $190 million. Change in Capital Structure. On October 31, 2007...

  • Page 34
    ...purchasers of the notes to exchange each series of these notes for a new issue of substantially identical debt securities registered under the 1933 Act. We expect to complete the exchange in February 2008. In June 2007, we issued a total of $1.5 billion in senior unsecured debt, which included: $500...

  • Page 35
    ... at an average price of approximately $56 per share and an aggregate cost of approximately $2.2 billion. As of December 31, 2007, we had Board of Directors' authorization to purchase up to an additional 171.9 million shares of our common stock. Our common stock repurchase program is discretionary as...

  • Page 36
    ... of the indenture governing those debt securities. This followed our announcement that we would delay filing our quarterly report on Form 10-Q for the quarter ended June 30, 2006. See Note 13 of Notes to the Consolidated Financial Statements for details. Bank Credit Facilities. In November 2007, we...

  • Page 37
    ...in charitable contributions for the benefit of California health care consumers, which has been accrued in our Consolidated Balance Sheets. We have committed to specific projects totaling approximately $18 million of the $50 million charitable commitment at December 31, 2007, of which $6 million was...

  • Page 38
    ...initial contract application. Contracts are generally non-cancelable by enrollees; however, enrollees may change plans during an annual enrollment period each year. As a result of the Medicare Part D product benefit design, the Company incurs a disproportionate amount of pharmacy benefit costs early...

  • Page 39
    ... Financial Statements. Medical Costs Each reporting period, we estimate our obligations for medical care services that have been rendered on behalf of insured consumers but for which claims have either not yet been received or processed, and for liabilities for physician, hospital and other medical...

  • Page 40
    ... as time from date of service to claim receipt, claim backlogs, seasonal variances in medical care consumption, health care professional contract rate changes, medical care utilization and other medical cost trends, membership volume and demographics, benefit plan changes, and business mix changes...

  • Page 41
    ... 31, 2007; however, actual claim payments may differ from established estimates. Assuming a hypothetical 1% difference between our December 31, 2007 estimates of medical costs payable and actual medical costs payable, excluding the AARP business, 2007 earnings from operations would increase or...

  • Page 42
    ... premium revenues in the period eligible individuals are entitled to receive health care services. Customers are typically billed monthly at a contracted rate per eligible person multiplied by the total number of people eligible to receive services, as recorded in our records. Employer groups...

  • Page 43
    ...respect to accounts receivable are limited due to the large number of employer groups that constitute our customer base. As of December 31, 2007, we had an aggregate $2.0 billion reinsurance receivable resulting from the sale of our Golden Rule Financial Corporation life and annuity business in 2005...

  • Page 44
    ... Minnesota Supreme Court Justices, appointed by our Board of Directors to review claims asserted in federal and state shareholder derivative claims relating to our historical stock option practices (Special Litigation Committee), and the related restatement of our historical financial statements...

  • Page 45
    ... actual medical costs or utilization rates as a percentage of revenues can result in significant changes in our financial results. For example, if medical costs increased by 1% without a proportional change in related revenues for commercial insured products, our annual net earnings for 2007 would...

  • Page 46
    ... fully insured commercial business. The agreement covers several key areas of review of our business operations, including claims payment accuracy and timeliness, appeals and grievances resolution timeliness, health care professional network/service, utilization review, explanation of benefits...

  • Page 47
    ... health care products. If we fail to compete effectively to maintain or increase our market share, including maintaining or increasing enrollments in businesses providing health benefits, our results of operations could be materially adversely affected. Our businesses compete throughout the United...

  • Page 48
    ...these competitive prices and services. In any particular market, these physicians and health care providers could refuse to contract, demand higher payments, or take other actions that could result in higher health care costs, less desirable products for customers or difficulty meeting regulatory or...

  • Page 49
    ...to the design and management of our service offerings. These matters include, among others, claims related to health care benefits coverage and payment (including disputes with enrollees, customers, and contracted and non-contracted physicians, hospitals and other health care professionals), medical...

  • Page 50
    ... our information systems and data integrity effectively, we could lose existing customers, have difficulty attracting new customers, have problems in determining medical cost estimates and establishing appropriate pricing, have disputes with customers, physicians and other health care professionals...

  • Page 51
    ...of insurance companies. Ratings information is broadly disseminated and generally used throughout the industry. We believe our claims paying ability and financial strength ratings are an important factor in marketing our products to certain of our customers. Our debt ratings impact both the cost and...

  • Page 52
    ...rates would change the fair value of our debt by approximately $330 million. At December 31, 2007, we had $383 million of equity investments, a portion of which were held in various public and non-public companies concentrated in the areas of health care delivery and related information technologies...

  • Page 53
    ... DATA UnitedHealth Group Consolidated Statements of Operations (in millions, except per share data) 2007 For the Year Ended December 31, 2006 2005 Revenues Premiums ...Services ...Products ...Investment and Other Income ...Total Revenues ...Operating Costs Medical Costs ...Operating Costs ...Cost...

  • Page 54
    UnitedHealth Group Consolidated Balance Sheets (in millions, except per share data) As of December 31, 2007 2006 Assets Current Assets Cash and Cash Equivalents ...Short-Term Investments ...Accounts Receivable, net of allowances of $121 and $120 ...Assets Under Management ...Deferred Income Taxes ...

  • Page 55
    UnitedHealth Group Consolidated Statements of Changes in Shareholders' Equity Common Stock Shares Amount Additional Paid-in Capital Net Unrealized Total Gains on Shareholders' Comprehensive Investments Equity Income (in millions) Retained Earnings Balance at December 31, 2004 ...1,286 Issuances ...

  • Page 56
    ... and Other ...Share-Based Compensation ...Net Change in Other Operating Items, net of effects from acquisitions, and changes in AARP balances: Accounts Receivable and Other Current Assets ...Medical Costs Payable ...Accounts Payable and Other Accrued Liabilities ...Unearned Premiums ...Cash Flows...

  • Page 57
    ... Financial Statements. For both premium risk-based and fee-based customer arrangements, we provide coordination and facilitation of medical services; transaction processing; customer, consumer and care professional services; and access to contracted networks of physicians, hospitals and other health...

  • Page 58
    ... factors such as time from date of service to claim receipt, claim backlogs, care professional contract rate changes, medical care consumption and other medical cost trends. We estimate liabilities for physician, hospital and other medical cost disputes based upon an analysis of potential outcomes...

  • Page 59
    ... the current portion of future policy benefits for life insurance and annuity contracts. Customer balances represent excess customer payments and deposit accounts under experience-rated contracts. At the customer's option, these balances may be refunded or used to pay future premiums or claims under...

  • Page 60
    ...year term and may be cancelled upon 30 days notice by either the Company or the customer. Costs related to the acquisition and renewal of customer contracts are charged to expense as incurred. Share-Based Compensation In December 2004, the Financial Accounting Standards Board (FASB) issued Statement...

  • Page 61
    ... of their short-term nature. The following methods and assumptions were used to estimate the fair value of each class of financial instrument: • Current and long-term investments, available-for-sale, at fair value: The carrying amount is stated at fair value, based on quoted market prices, where...

  • Page 62
    ... Financial Statements. 3. Medicare Part D Pharmacy Benefits Contract Beginning January 1, 2006, the Company began serving as a plan sponsor offering Medicare Part D prescription drug insurance coverage under contracts with the Centers for Medicare & Medicaid Services (CMS). Under the Medicare...

  • Page 63
    ... coverage limit. The uneven timing of Medicare Part D pharmacy benefit claims results in losses in the first half of the year that entitle the Company to risk-share adjustment payments from CMS. Accordingly, during the interim periods within the contract year we record a net risk-share receivable...

  • Page 64
    ... our existing benefits administration businesses and enable existing and new Fiserv Health customers to leverage our full range of assets, including ancillary services, our national network and technology tools. The pro forma effects of this acquisition on our Consolidated Financial Statements were...

  • Page 65
    ... our product offerings for a host of specialized services. The operations of PacifiCare reside primarily within our Health Care Services, OptumHealth and Prescription Solutions segments. Under the terms of the agreement, PacifiCare shareholders received 1.1 shares of UnitedHealth Group common stock...

  • Page 66
    ... reductions largely in the Health Care Services segment, costs of terminated or vacated leased facilities and other contract termination costs. The following table illustrates the changes in employee termination benefit costs and other integration costs related to the PacifiCare acquisition as...

  • Page 67
    ... by type, were as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in millions) 2007 Cash and Cash Equivalents ...Debt Securities - Available for Sale: U.S. Government and Agency obligations ...State and Municipal obligations ...Corporate obligations ...Total Debt...

  • Page 68
    ... equity securities consists of investments held by our UnitedHealth Capital business in various public and nonpublic companies concentrated in the areas of health care delivery and related information technologies. Market conditions that affect the value of health care and related technology stocks...

  • Page 69
    ... Assets Changes in the carrying amount of goodwill, by segment, during the years ended December 31, 2007 and 2006, were as follows: Health Care Services Prescription Solutions (in millions) OptumHealth Ingenix Consolidated Balance at December 31, 2005 ...$ Acquisitions and Subsequent Payments...

  • Page 70
    ... factors such as time from date of service to claim receipt, claim backlogs, care professional contract rate changes, medical care consumption and other medical cost trends. We estimate liabilities for physician, hospital and other medical cost disputes based upon an analysis of potential outcomes...

  • Page 71
    ...adjusted based upon the applicable interest rate swap fair values in accordance with the fair value hedge short-cut method of accounting described below. (2) Estimated based on third-party quoted market prices for the same or similar issues. As of December 31, 2007, our outstanding commercial paper...

  • Page 72
    ..., 2007 and 2006, we had no amounts outstanding under this credit facility. On December 1, 2006, our Health Care Services business segment acquired the Student Insurance Division (Student Resources) of The MEGA Life and Health Insurance Company through an asset purchase agreement. Under the terms of...

  • Page 73
    ... risk. Since these amounts completely offset, we have reported both the swap asset and the debt liability within debt in our Consolidated Balance Sheets and there have been no net gains or losses recognized in our Consolidated Statements of Operations. At December 31, 2007, the rates used to accrue...

  • Page 74
    ...authorized for issuance, and no preferred shares issued and outstanding. 10. Share-Based Compensation and Other Employee Benefit Plans We adopted FAS 123R as of January 1, 2006. FAS 123R requires companies to measure compensation expense for all share-based payments (including employee stock options...

  • Page 75
    ... Recognition We recognize compensation cost for share-based awards, including stock options, SARs, restricted stock and restricted stock units, on a straight-line basis over the related service period (generally the vesting period) of the award, or to an employee's eligible retirement date under the...

  • Page 76
    ... who were executive officers of the Company at the time of grant of an applicable stock option to increase the exercise price of certain outstanding stock options. No compensation was payable to any of those individuals as a result of the increase in the exercise price of their stock options. As...

  • Page 77
    ...: (in millions) 2007 2006 Deferred Income Tax Assets Accrued Expenses and Allowances ...Unearned Premiums ...Medical Costs Payable and Other Policy Liabilities ...Long Term Liabilities ...Net Operating Loss Carryforwards ...Share-Based Compensation ...Unrecognized Tax Benefits ...Other ...Subtotal...

  • Page 78
    ... 31, 2007, the total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $131 million. We currently file income tax returns in the U.S. federal jurisdiction, various states, and foreign jurisdictions. The U.S. Internal Revenue Service (IRS) has completed...

  • Page 79
    ... ...Assets Under Management ...Medical Costs Payable ...Other Policy Liabilities ...Other Current Liabilities ... $ $ $ $ $ 459 2,176 1,109 1,132 394 $ $ $ $ $ 417 1,924 1,004 1,008 329 The effects of changes in balance sheet amounts associated with the AARP Medicare Supplement Insurance program...

  • Page 80
    ... with the AARP insurance program, included in Assets Under Management, were as follows: (in millions) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value 2007 Cash and Cash Equivalents ...Debt Securities - Available for Sale: U.S. Government and Agency obligations ...State and...

  • Page 81
    ... Report on Form 10-K, we believed that compensation expense related to prior exercises of certain stock options by certain of the Company's executive officers would no longer qualify as deductible performance-based compensation in accordance with Internal Revenue Code Section 162(m) as a result...

  • Page 82
    ... the state court judge entered an order modifying the stay to allow plaintiffs counsel to access documents produced in the federal derivative action described above. On December 6, 2007, the Special Litigation Committee concluded its review of claims relating to the Company's historical stock option...

  • Page 83
    ...consolidating the actions into a single action. The action is captioned In re UnitedHealth Group Incorporated PSLRA Litigation. The action was brought by lead plaintiff California Public Employees Retirement System against the Company and certain of our current and former officers and directors. The...

  • Page 84
    ... policies. Other allegations included breach of state prompt payment laws and breach of contract claims for failure to timely reimburse health care providers for medical services rendered. The consolidated suits seek injunctive, compensatory and equitable relief as well as restitution, costs, fees...

  • Page 85
    ... force us to change how we do business, restrict revenue and enrollment growth, increase our health care and administrative costs and capital requirements, and increase our liability in federal and state courts for coverage determinations, contract interpretation and other actions. Further, we must...

  • Page 86
    ... have similar products and services, types of customers, distribution methods and operational processes, and operate in a similar regulatory environment. These businesses also share significant common assets, including our contracted networks of physicians, health care professionals, hospitals and...

  • Page 87
    ... table presents segment financial information as of and for the years ended December 31, 2007, 2006 and 2005: Health Care Services Prescription Solutions Corporate and Intersegment Eliminations (in millions) OptumHealth Ingenix Consolidated 2007 Revenues - External Customers ...$ Revenues...

  • Page 88
    ... quarterly financial information for all quarters of 2007 and 2006. (in millions, except per share data) March 31 For the Quarter Ended June 30 September 30 December 31 2007 Revenues ...Operating Costs ...Earnings From Operations ...Net Earnings ...Basic Net Earnings per Common Share ...Diluted Net...

  • Page 89
    ...of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and...

  • Page 90
    ... to allow timely decisions regarding required disclosure. In connection with the filing of this Form 10-K, management evaluated, under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of the...

  • Page 91
    ... and Chief Accounting Officer February 21, 2008 New York Stock Exchange Certification Pursuant to Section 303A.12(a) of the NYSE listed company manual, the Company submitted an unqualified certification of its Chief Executive Officer to the NYSE in 2007. We have also filed, as exhibits to this Form...

  • Page 92
    ...control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable...

  • Page 93
    ... Vice President and Chief Accounting Officer; the President, Enterprise Services Group; the President, Public & Senior Markets Group; and the President, Commercial Markets Group. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Pursuant to General Instruction G(3) to Form...

  • Page 94
    ... and Transactions" and "Corporate Governance" in our definitive proxy statement for the Annual Meeting of Shareholders to be held June 5, 2008, and such required information is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by Item 9(e) of...

  • Page 95
    ... and Restated Bylaws of UnitedHealth Group Incorporated (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K dated May 29, 2007) Senior Indenture, dated as of November 15, 1998, between United HealthCare Corporation and The Bank of New York (incorporated by reference...

  • Page 96
    ...the Company's Current Report on Form 8-K dated October 31, 2006) Second Amendment to UnitedHealth Group Executive Savings Plan (2004 Statement) UnitedHealth Group Directors' Compensation Deferral Plan (2002 Statement) (incorporated by reference to Exhibit 10(d) of the Company's Annual Report on Form...

  • Page 97
    ... and between UnitedHealth Group Incorporated and Stephen J. Hemsley Employment Agreement, effective as of November 7, 2006, by and between United HealthCare Services, Inc. and George L. Mikan III (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated January 30...

  • Page 98
    ... are on terms substantially in the form of Letter Agreement incorporated by reference to Exhibit 10(jj) of the Company's Annual Report on Form 10K for the year ended December 31, 2006) Form of Letter Agreement, effective as of December 22, 2006, by and between UnitedHealth Group Incorporated and...

  • Page 99
    ... duly authorized. Dated: February 21, 2008 UNITEDHEALTH GROUP INCORPORATED By /S/ STEPHEN J. HEMSLEY Stephen J. Hemsley President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf...

  • Page 100
    Signature Title Date * Douglas W. Leatherdale * Mary O. Mundinger * Robert L. Ryan * Gail R. Wilensky *By /S/ CHRISTOPHER J. WALSH As Attorney-in-Fact Director February 21, 2008 Director February 21, 2008 Director February 21, 2008 Director February 21, 2008 98

  • Page 101
    ... and Restated Bylaws of UnitedHealth Group Incorporated (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K dated May 29, 2007) Senior Indenture, dated as of November 15, 1998, between United HealthCare Corporation and The Bank of New York (incorporated by reference...

  • Page 102
    ...the Company's Current Report on Form 8-K dated October 31, 2006) Second Amendment to UnitedHealth Group Executive Savings Plan (2004 Statement) UnitedHealth Group Directors' Compensation Deferral Plan (2002 Statement) (incorporated by reference to Exhibit 10(d) of the Company's Annual Report on Form...

  • Page 103
    ... 10.2 to the Company's Current Report on Form 8-K dated December 6, 2007) Agreement, dated December 5, 2007, by and between William W. McGuire, M.D. and UnitedHealth Group Incorporated and the Special Litigation Committee of the Board of Directors of UnitedHealth Group Incorporated (incorporated by...

  • Page 104
    ... OF 2002 Certification of Principal Executive Officer I, Stephen J. Hemsley, certify that: 1. 2. I have reviewed this Annual Report on Form 10-K of UnitedHealth Group Incorporated (the "registrant"); Based on my knowledge, this report does not contain any untrue statement of a material fact or omit...

  • Page 105
    ... of Principal Financial Officer I, George L. Mikan III, certify that: 1. 2. I have reviewed this Annual Report on Form 10-K of UnitedHealth Group Incorporated (the "registrant"); Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material...

  • Page 106
    ... and Chief Executive Officer Certification of Principal Financial Officer In connection with the Annual Report of UnitedHealth Group Incorporated (the "Company") on Form 10-K for the period ended December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report...