United Healthcare 2006 Annual Report Download - page 84

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Consolidated Statements of Operations
For the Year Ended December 31, 2004
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 ................. $33,495 $ 944 $34,439 $ — $ — $34,439
Services .................. 3,335 (92) 3,243 — — 3,243
Products .................. — 122 122 — — 122
Investment and Other
Income ................. 388 25 413 — — 413
TotalRevenues......... 37,218 999 38,217 — — 38,217
Operating Costs
Medical Costs .............. 27,000 858 27,858 — — 27,858
Operating Costs ............ 5,743 287 6,030 2 41 6,073
CostofProductsSold........ — 54 54 — — 54
Depreciation and
Amortization ............. 374 — 374 — — 374
Total Operating Costs . . . 33,117 1,199 34,316 2 41 34,359
Earnings From Operations ...... 4,101 (200) 3,901 (2) (41) 3,858
Interest Expense ............ (128) — (128) — — (128)
Earnings Before Income Taxes . . . 3,973 (200) 3,773 (2) (41) 3,730
Provision for Income Taxes . . . (1,386) 42 (1,344) 15 10 (1,319)
Net Earnings .................. $ 2,587 $ (158) $ 2,429 $ 13 $ (31) $ 2,411
Basic Net Earnings per Common
Share ...................... $ 2.07 $(0.13) $ 1.94 $0.01 $(0.02) $ 1.93
Diluted Net Earnings per
Common Share .............. $ 1.97 $(0.11) $ 1.86 $0.01 $(0.04) $ 1.83
Basic Weighted-Average Number
of Common Shares
Outstanding ................ 1,252 — 1,252 — — 1,252
Dilutive Effect of Common Stock
Equivalents ................. 58 (2) 56 2 6 64
Diluted Weighted-Average
Number of Common Shares
Outstanding ................ 1,310 (2) 1,308 2 6 1,316
(1) Includes $201 million of stock-based compensation and $56 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 $1,016 million, medical costs of $926 million and operating costs of $90 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 2005.
(2) Reflects $203 million of stock-based compensation and $71 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 $41
million of additional stock-based compensation and $10 million of related deferred tax benefit.
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