United Healthcare 2007 Annual Report Download - page 66

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price and the associated income tax effects of the pro forma adjustments. The following unaudited pro forma
results have been prepared for comparative purposes only and do not purport to be indicative of the results of
operations that would have occurred had the acquisition been consummated at the beginning of the period.
(in millions, except per share data)
For the
Year Ended
December 31, 2005
Pro forma - unaudited
Revenues ................................................ $ 60,486
Net Earnings ............................................. $ 3,351
Earnings Per Share:
Basic ............................................... $ 2.46
Diluted ............................................. $ 2.33
We record liabilities related to integration activities in connection with business combinations when integration
plans are finalized and approved by management within one year of the acquisition date in accordance with the
requirements of EITF Issue No. 95-3, “Recognition of Liabilities in Connection with a Purchase Business
Combination.” Liabilities recorded relate to activities that have no future economic benefit to the Company and
represent contractual obligations. These liabilities result in an increase to goodwill acquired. At each reporting
date, we evaluate our liabilities associated with integration activities and make adjustments as appropriate.
Integration activities relate primarily to severance costs for certain workforce 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 of December 31, 2007:
(in millions)
Employee
Termination
Benefit Costs
Other Integration
Activities Total
Accrued integration liabilities at December 31, 2006 .... $ 27 $ 28 $ 55
Estimate adjustments ............................. (13) (3) (16)
Payments made against liability ..................... (12) (23) (35)
Accrued integration liabilities at December 31, 2007 .... $ 2 $ 2 $ 4
For the years ended December 31, 2007, 2006 and 2005, aggregate consideration paid, net of cash assumed and
other effects, for smaller acquisitions was $262 million, $276 million and $196 million, respectively. These
acquisitions were not material to our Consolidated Financial Statements.
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