United Healthcare 2006 Annual Report Download - page 30

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CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
For the Year Ended December 31, 2003
(in millions, except per share data) APB 25 — Historical Accounting Method FAS 123R — Current Accounting Method
As Reported Adjustments (1) As Restated Adoption (2) Adjustments (3) As Restated
Revenues
Premiums .................. $25,448 $ 835 $26,283 $ — $ — $26,283
Services .................... 3,118 (225) 2,893 — — 2,893
Products ................... — 263 263 — — 263
Investment and Other Income . . . 257 — 257 — — 257
Total Revenues .......... 28,823 873 29,696 — — 29,696
Operating Costs
Medical Costs ............... 20,714 768 21,482 — — 21,482
Operating Costs .............. 4,875 128 5,003 18 54 5,075
Cost of Products Sold ......... — 169 169 — — 169
Depreciation and
Amortization .............. 299 — 299 — — 299
Total Operating Costs ..... 25,888 1,065 26,953 18 54 27,025
Earnings From Operations ....... 2,935 (192) 2,743 (18) (54) 2,671
Interest Expense ............. (95) — (95) — — (95)
Earnings Before Income Taxes .... 2,840 (192) 2,648 (18) (54) 2,576
Provision for Income Taxes .... (1,015) 62 (953) 19 13 (921)
Net Earnings ................... $ 1,825 $ (130) $ 1,695 $ 1 $ (41) $ 1,655
Basic Net Earnings per Common
Share ........................ $ 1.55 $ (0.11) $ 1.44 $ — $(0.04) $ 1.40
Diluted Net Earnings per Common
Share ....................... $ 1.48 $ (0.11) $ 1.37 $ — $(0.03) $ 1.34
Basic Weighted-Average Number of
Common Shares Outstanding . . . 1,178 — 1,178 — — 1,178
Dilutive Effect of Common Stock
Equivalents .................. 56 (1) 55 1 3 59
Diluted Weighted-Average Number
of Common Shares
Outstanding .................. 1,234 (1) 1,233 1 3 1,237
Financial Highlights and Management’s Discussion and Analysis of Financial Condition and Results of Operations
should be read together with the accompanying Consolidated Financial Statements and Notes.
(1) Includes $172 million of stock-based compensation expense and $49 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 $927 million, medical costs of $848 million and operating costs of $79 million to reflect a
reinsurance contract on a gross basis. In order 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
2005.
(2) Reflects $190 million of stock-based compensation expense and $68 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 $54 million of additional stock-
based compensation expense and $13 million of related deferred tax benefit.
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