United Healthcare 2007 Annual Report Download - page 44

Cautionary Statements Relating to Our Historical Stock Option Practices
Matters relating to or arising out of our historical stock option practices, including regulatory inquiries,
litigation matters, and potential additional cash and noncash charges could have a material adverse effect
on the Company.
In early 2006, our Board of Directors initiated an independent review of the Company’s historical stock option
practices from 1994 to 2005. The independent review was conducted by an independent committee comprised of
three independent directors of the Company (Independent Committee) with the assistance of independent counsel
and independent accounting advisors. On October 15, 2006, we announced that the Independent Committee had
completed their review of the Company’s historical stock option practices and reported the findings to the
non-management directors of the Company. As a result of our historical stock option practices, we restated our
previously filed financial statements, we are subject to various regulatory inquiries and litigation matters, and we
may be subject to further cash and noncash charges, the outcome of any or all of which could have a material
adverse effect on us.
Regulatory Inquiries
As previously disclosed, the SEC and the U.S. Attorney for the Southern District of New York are conducting
investigations into the Company’s historical stock option practices and the Company has received requests for
documents from the Minnesota Attorney General and various Congressional committees in connection with these
issues and the Company’s executive compensation practices. We have not resolved these matters. We cannot
provide assurance that the Company will not be subject to adverse publicity, regulatory or criminal fines,
penalties, or other sanctions or contingent liabilities or adverse customer reactions in connection with these
matters. In addition, we may be subject to additional regulatory inquiries arising out of the review of the
Independent Committee, the review of a special litigation committee, consisting of two former 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. Regulatory inquiries may be time consuming,
expensive and distracting from the conduct of our business. The adverse resolution of any regulatory inquiry
could have a material adverse effect on our business, financial condition and results of operations.
Litigation Matters
We and certain of our current and former directors and officers are defendants in a consolidated federal securities
class action, an Employment Retirement Income Security Act of 1974, as amended (ERISA) class action, and
state and federal shareholder derivative actions relating to our historical stock option practices. We also have
received shareholder demands relating to those practices.
In addition, following our announcement that we would delay filing our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2006, we received a purported notice of default from persons claiming to hold our 5.8%
Senior Unsecured Notes due March 15, 2036 alleging a violation of the indenture governing those debt securities.
We cannot provide assurance that the ultimate outcome of these actions will not have a material adverse effect on
our business, financial condition or results of operations. See Note 13 of Notes to the Consolidated Financial
Statements for a more detailed description of these proceedings and shareholder demands.
In addition, we may be subject to additional litigation, proceedings or actions arising out of the Independent
Committee’s review, the Special Litigation Committee’s review and the related restatement of our historical
financial statements. Litigation regulatory proceedings or actions may be time consuming, expensive and
distracting from the conduct of our business. The adverse resolution of any specific lawsuit or any potential
regulatory proceeding or action could have a material adverse effect on our business, financial condition and
results of operations.
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