<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
----------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): NOVEMBER 2, 1995
----------------
UNITED HEALTHCARE CORPORATION
-----------------------------
(exact name of registrant as specified in charter)
MINNESOTA
---------
(State or other jurisdiction of incorporation)
0-13253 41-1321939
------- ----------
(Commission File Number) (IRS Employer Identification No.)
300 OPUS CENTER, 9900 BREN ROAD EAST, MINNETONKA, MN 55343
----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 936-1300
--------------
<PAGE>
Item 5. Other Events
- ---------------------
On November 2, 1995, the Registrant announced its financial results for the
third quarter ended September 30, 1995.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
- ----------------------------------------------------------------------------
(c) Exhibits
- --- --------
Exhibit 99.1 - United HealthCare Corporation Press Release, dated November
2, 1995.
Exhibit 99.2 - Supplemental Financial Schedules related to financial
results for the third quarter ended September 30, 1995.
2
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITED HEALTHCARE CORPORATION
-----------------------------
(Registrant)
By /s/ David P. Koppe
-----------------------------------
David P. Koppe
Chief Financial Officer
Date: November 2, 1995
3
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page No.
- -------------- ----------- -------
99.1 United HealthCare Corporation Press Release dated 5
November 2, 1995.
99.2 Supplemental Financial Schedules related to 13
financial results for the third quarter ended
September 30, 1995.
4
<PAGE>
CONTACTS: David Koppe, CFO
(612) 936-7211
Bernard McDonagh
Vice President, Investor
Relations
(612) 936-7214
Susan Busch
Director, Communications
(612) 992-5132
(For Immediate Release)
UNITED HEALTHCARE REPORTS RECORD
THIRD QUARTER EARNINGS OF $0.53 PER SHARE
THIRD QUARTER ENROLLMENT GAINS OF 142,600
STRONGEST IN COMPANY'S HISTORY
SAME STORE ENROLLMENT GAIN ACCELERATES TO 19.3%
EARNINGS THRU NINE MONTHS UP 20.2%
MINNEAPOLIS (November 2, 1995) -- United HealthCare Corporation (NYSE:UNH)
announced today that total revenues for the third quarter ended September 30,
1995 increased 27.0 percent to $1.22 billion compared to $956.8 million for the
same period a year ago. Third quarter net earnings were $ 93.7 million, up 15.9
percent from net earnings of $80.8 million for last year's third quarter. Third
quarter 1995 earnings per share were $0.53, a 15.2 percent increase over
earnings per share of $0.46 for the third quarter of 1994.
For the nine months ended September 30, 1995, total revenues increased 24.2
percent to $3.48 billion, compared to $2.80 billion for the same period a year
ago. Net earnings for the nine-month 1995 period were $273.0 million, up 20.7
percent from comparable net earnings of $226.2 million for the nine-month period
in 1994. Earnings per share for the nine-month 1995 period were $1.55, a 20.2
percent increase over comparable earnings per share of $1.29 for the nine-month
period in 1994.
(more)
<PAGE>
United HealthCare Corporation
Third Quarter Results
November 2, 1995 -- p. 2
(In the second quarter of 1994, the company recorded nonrecurring, non-operating
merger costs of $35.9 million associated with its May 1994 acquisitions of
Complete Health Services, Inc. and Ramsay-HMO, Inc. This reduced net earnings
before extraordinary gain by $22.3 million, or $0.13 per share, and resulted in
reported net earnings before extraordinary gain of $1.16 per share for the first
nine months of 1994. In addition, the company's May 1994 sale of its subsidiary
Diversified Pharmaceutical Services, Inc. resulted in an extraordinary gain of
$1.38 billion, or $7.85 per share.)
United HealthCare Chairman and CEO William McGuire said, "The third quarter was
very positive on a number of fronts. We saw record enrollment gains in the
quarter, adding 142,600 new members in our owned health plans while
simultaneously seeing continued good control of medical and administrative
costs. During a period in which the market remains competitive, we are
particularly gratified by the acceptance of our products in various geographic
and purchaser markets. This is attested to by our strong enrollment growth
which accelerated in all of our product areas; commercial, Medicare and
Medicaid. The company continued to employ the same underwriting discipline that
has been guiding the company for the last six years, namely pricing our products
to our costs and managing the medical and administrative costs associated with
delivering these products."
ADDITIONAL HIGHLIGHTS
- ---------------------
ENROLLMENT: Year-over-year same-store enrollment in owned health plans
accelerated to 19.3 percent, or 472,100 enrollees. Strong growth was seen in
all segments, with commercial enrollment up 18.1 percent, Medicare 29.8 percent,
and Medicaid 24.1 percent.
Third quarter 1995 same-store growth was a record for the company with the
addition of 142,600 members. This compares with the 70,200 members added in the
same quarter a year ago. For the nine months ended in September 1995, the
company added a total of 407,300 members.
"We are extremely pleased with our third quarter enrollment growth," said Dr.
McGuire. "We continue to see strong growth in the commercial segment and our
ongoing efforts to accelerate growth in the Medicare segment appear to be paying
off. Growth in the Medicaid segment was particularly encouraging considering
the continued delays encountered by the state governments in getting federal
waivers to initiate or expand managed care programs for this population. We
currently believe strong growth will continue, with further acceleration of
enrollment growth possible, particularly in these government programs."
(more)
<PAGE>
United HealthCare Corporation
Third Quarter Results
November 2, 1995 -- p. 3
UNITED HEALTHCARE CORPORATION
OWNED HEALTH PLAN ENROLLMENT
<TABLE>
<CAPTION>
SEPTEMBER DECEMBER
1995 1994 1994
--------- --------- ---------
<S> <C> <C> <C>
Enrollment (restated
for pooled acquisitions
only)
Commercial 2,455,200 1,752,500 1,790,500
Medicaid 330,700 266,400 285,400
Medicare 137,100 105,600 108,900
--------- --------- ---------
Total 2,923,000 2,124,500 2,184,800
--------- --------- ---------
Enrollment (same-store
restated for all
acquisitions)
Commercial 2,455,200 2,078,900 2,121,400
Medicaid 330,700 266,400 285,400
Medicare 137,100 105,600 108,900
--------- --------- ---------
Total 2,923,000 2,450,900 2,515,700
--------- --------- ---------
</TABLE>
MEDICAL COSTS: The company noted that the medical expense ratio, the percent of
premium revenue expensed as medical costs, rose slightly in the third quarter to
79.3 percent from 78.7 percent reported for the same quarter a year ago and from
the 78.6 percent reported in the second quarter of 1995.
As in the second quarter, the major factors that caused this slight increase in
the medical expense ratio were related primarily to the company's Medicaid
programs:
(more)
<PAGE>
United HealthCare Corporation
Third Quarter Results
November 2, 1995 -- p. 4
. While progress is being made with the Rhode Island Medicaid Program, that
program's medical expense ratio remains significantly higher than in the
company's other plans. The company currently believes that as this
program evolves the ratio should come down and be more in line with that
of other markets.
. The company continues to bear the cost of increased physician Medicaid
fees it put in place in late 1994 in Chicago without the benefit of the
anticipated growth in enrollment.
. Rate cutbacks for Medicaid began to take effect in Florida during the
quarter resulting in the Medicaid medical expense ratio in this market
increasing almost two percentage points.
Aside from this, the company is not seeing any system wide increase in its
medical cost experience.
SG&A COSTS: SG&A spending was 14.3 percent of revenues for the third quarter of
1995, down sequentially from the 14.6 percent reported in the second quarter,
and up modestly from the 13.9 percent reported for the same quarter a year ago.
The sequential reduction in SG&A spending on a percentage of revenue basis was
due primarily to the company's increased enrollment growth.
MANAGED AND SPECIALTY SERVICES: These businesses continued their strong
performance during the third quarter. Revenues from these operations grew 20.9
percent year over year while operating income was up a very strong 55.2
percent. Results from the company's managed health plans was one of the drivers
of these excellent results; with enrollment in the managed plans up 22 percent
year over year. In addition, the company's mental health subsidiary, United
Behavioral Systems, and the company's Managed Care for the Aged business had
strong results.
"We are extremely pleased with these third quarter results," said Dr. McGuire.
"Enrollment growth in the third quarter set a record and showed the continued
acceptance of our products by purchasers. Revenue growth was strong in the face
of continued competition in certain markets, changing benefit structures for
certain buyers, and reductions in Medicaid reimbursement in certain states. In
spite of these pressures we were still able to increase earnings through the
first nine months of 1995 at over a 20 percent rate."
(more)
<PAGE>
United HealthCare Corporation
Third Quarter Results
November 2, 1995 -- p. 5
McGuire added that "We are now actively involved in the process of integrating
the MetraHealth acquisition which was completed on October 2, 1995. We feel
even more strongly now, after the completion of the acquisition, that the new
combined entity will bring enhanced value to the purchasers of health care
allowing United to continue its long record of producing superior growth in
revenues and earnings. In addition, strategic efforts like our recently
announced venture in South Africa as well as one currently under development in
Europe, position the company to be a leader in what we believe will be the
increasing internationalization of the managed care concept. We are currently
looking forward to a strong fourth quarter in 1995 and continued excellent
results in 1996."
United HealthCare now serves over 40 million individuals through its various
products, including managed care and indemnity programs, as well as managed
mental health and substance abuse services; utilization management; workers'
compensation and disability management services; specialized provider networks;
third-party administration (TPA) services; employee assistance services;
Medicare and managed care programs for the aged; managed Medicaid services;
managed pharmacy; health care evaluation services; information systems; and
administrative services.
# # # # #
<PAGE>
UNITED HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
--------------------- ---------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES
Premiums $1,100,013 $858,228 $3,153,275 $2,498,921
Management Services 76,367 59,820 210,340 218,794
Investment Income and Other 39,156 38,786 113,701 82,140
---------- -------- ---------- ----------
Total Revenues 1,215,536 956,834 3,477,316 2,799,855
---------- -------- ---------- ----------
OPERATING EXPENSES
Medical Costs 872,358 675,650 2,480,020 1,957,494
Selling, General and
Administrative Costs 173,267 133,462 500,364 424,996
Depreciation & Amortization 19,343 16,258 59,392 48,539
---------- -------- ---------- ----------
Total Operating Expenses 1,064,968 825,370 3,039,776 2,431,029
---------- -------- ---------- ----------
EARNINGS FROM OPERATIONS 150,568 131,464 437,540 368,826
Interest Expense (146) (413) (704) (1,550)
Merger Costs -- -- -- (35,940)
---------- -------- ---------- ----------
EARNINGS BEFORE INCOME TAXES
MINORITY INTERESTS AND
EXTRAORDINARY GAIN 150,422 131,051 436,836 331,336
Provision for Income Taxes (55,655) (49,810) (161,629) (125,908)
Minority Interests in Net Earnings
of Consolidated Subsidiaries (1,097) (399) (2,226) (1,532)
---------- -------- ---------- ----------
NET EARNINGS BEFORE
EXTRAORDINARY GAIN 93,670 80,842 272,981 203,896
Extraordinary Gain on Sale of
Subsidiary, net of income
taxes of $808,758 -- -- -- 1,377,075
---------- -------- ---------- ----------
NET EARNINGS $93,670 $80,842 $272,981 $1,580,971
========== ======== ========== ==========
Net Earnings Per Share Before
Extraordinary Gain $0.53 $0.46 $1.55 $1.16
Extraordinary Gain Per Share -- -- -- 7.85
---------- -------- ---------- ----------
Net Earnings Per Share $0.53 $0.46 $1.55 $9.01
========== ======== ========== ==========
Weighted Average Number of Common
Shares Outstanding 177,070 176,038 176,615 175,501
========== ======== ========== ==========
</TABLE>
<PAGE>
UNITED HEALTHCARE CORPORATION
EARNINGS REPORT*
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30, 1995 September 30, 1994
------------------ ------------------
<S> <C> <C>
Revenues $1,215,536 $956,834
Net earnings $93,670 $80,842
Net earnings per share $0.53 $0.46
Average number of common shares
outstanding 177,070 176,038
Nine Months Ended
September 30, 1995 September 30, 1994
------------------ ------------------
Revenues $3,477,316 $2,799,855
Net earnings before extraordinary gain $272,981 $203,896 **
Extraordinary gain on sale of subsidiary --- 1,377,075
------------------ ------------------
Net earnings $272,981 $1,580,971
================== ==================
Net earnings per share before
extraordinary gain $1.55 $1.16 **
Extraordinary gain per share --- 7.85
------------------ ------------------
Net earnings per share $1.55 $9.01
------------------ ------------------
Average number of common shares
outstanding 176,615 175,501
* All periods presented include the results of Ramsay HMO, Inc., and Complete Health Services, Inc. in accordance
with pooling of interests accounting.
**Excluding the nonrecurring, non-operating costs of $35.9 million before tax, $22.3 million after tax, net earnings before
extraordinary gain for the nine months ended September 30, 1994 would have been $226.2 million, or $1.29 per share.
</TABLE>
<PAGE>
UNITED HEALTHCARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
September 30, 1995 December 31, 1994
------------------ -----------------
(unaudited)
<S> <C> <C>
ASSETS
Cash and Short-term Investments $1,583,998 $1,654,336
Other Current Assets 309,703 253,879
Long-term Investments 1,001,584 1,115,054
Other Long Term Assets 1,001,586 466,210
---------- ----------
TOTAL ASSETS $3,896,871 $3,489,479
---------- ----------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Medical Services Payables $500,450 $443,559
Other Current Liabilities 235,699 220,743
Long-term Obligations 26,189 24,275
---------- ----------
TOTAL LIABILITIES 762,338 688,577
Minority Interests 7,021 5,446
Shareholders' Equity 3,127,512 2,795,456
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $3,896,871 $3,489,479
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UNITED HEALTHCARE CORPORATION
QUARTERLY ANALYSIS FOR THE QUARTER ENDED 09/30/95
(Unaudited) (000's)
SCHEDULE A
% CHANGE
3 MONTHS ENDED % 3 MONTHS ENDED % 09/30/94 to
REVENUES: 09/30/95 (4) REVENUE 09/30/94 REVENUE 09/30/95
-------------- -------- -------------- -------- -----------
<S> <C> <C> <C> <C> <C>
PREMIUM ....................................... $1,100,013 90.5% $858,228 89.7% 28.2%
MANAGEMENT SERVICES ........................... 76,367 6.3% 59,820 6.2% 27.7%
INVESTMENT INCOME.............................. 39,156 3.2% 38,786 4.1% 1.0%
---------- ----- -------- ----- -----
TOTAL REVENUES .............................. 1,215,536 100.0% 956,834 100.0% 27.0%
---------- ----- -------- ----- -----
OPERATING EXPENSES:
MEDICAL COSTS (1) ............................. 872,358 79.3%(1) 675,650 78.7%(1) 29.1%
SELLING, GENERAL & ADMINISTRATION ............. 173,267 14.3% 133,462 13.9% 29.8%
DEPRECIATION & AMORTIZATION ................... 19,343 1.6% 16,258 1.7% 19.0%
---------- ----- -------- ----- -----
TOTAL OPERATING EXPENSES .................... 1,064,968 87.6% 825,370 86.3% 29.0%
---------- ----- -------- ----- -----
EARNINGS FROM OPERATIONS .......................... 150,566 12.4 131,464 13.7% 14.5%
INTEREST EXPENSE .................................. (146) (413) -64.6%
MERGER COSTS (2) .................................. ---- ----
---------- -------- -----
EARNINGS BEFORE INCOME TAXES AND MINORITY
INTERESTS AND EXTRAORDINARY GAIN ................ 150,422 131,051 14.8%
PROVISION FOR INCOME TAXES ........................ (55,655) (49,810) 11.7%
MINORITY INTERESTS ................................ (1,097) (399) 174.9%
---------- -------- -----
NET EARNINGS BEFORE EXTRAORDINARY GAIN ............ 93,670 80,842 15.9%
EXTRAORDINARY GAIN ON SALE OF SUBSIDIARY,
NET OF INCOME TAXES OF $808,758 (3).............. ---- ----
---------- --------
NET EARNINGS ...................................... $ 93,670 $ 80,842
========== ========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING: 177,070 176,038
========== ========
EARNINGS PER SHARE:
NET EARNINGS BEFORE EXTRAORDINARY GAIN (2) $ 0.53 $ 0.46
EXTRAORDINARY GAIN (3) ---- ----
---------- --------
NET EARNINGS PER SHARE $ 0.53 $ 0.46
========== ========
</TABLE>
<TABLE>
<CAPTION>
% CHANGE
9 MONTHS ENDED % 9 MONTHS ENDED % 09/30/94 to
REVENUES: 09/30/95 (4) REVENUE 09/30/94 REVENUE 09/30/95
-------------- -------- -------------- -------- -----------
<S> <C> <C> <C> <C> <C>
PREMIUM ....................................... $3,153,275 90.7% $2,498,921 89.3% 26.2%
MANAGEMENT SERVICES ........................... 210,340 6.0% 218,794 7.8% -3.9%
INVESTMENT INCOME.............................. 113,701 3.3% 82,140 2.9% 38.4%
---------- ------ ---------- ----- -----
TOTAL REVENUES .............................. 3,477,316 100.0% 2,799,855 100.0% 24.2%
---------- ------ ---------- ----- -----
OPERATING EXPENSES:
MEDICAL COSTS (1) ............................. 2,480,020 78.6%(1) 1,957,494 78.3%(1) 26.7%
SELLING, GENERAL & ADMINISTRATION ............. 500,364 14.4% 424,996 15.2% 17.7%
DEPRECIATION & AMORTIZATION ................... 59,392 1.7% 48,539 1.7% 22.4%
---------- ------ ---------- ----- -----
TOTAL OPERATING EXPENSES .................... 3,039,776 87.4% 2,431,029 86.8% 25.0%
---------- ------ ---------- ----- -----
EARNINGS FROM OPERATIONS .......................... 437,540 12.6% 368,826 13.2% 18.6%
INTEREST EXPENSE .................................. (704) (1,550) -54.6%
MERGER COSTS (2) .................................. ---- (35,940) (2)
---------- ---------- -----
EARNINGS BEFORE INCOME TAXES AND MINORITY
INTERESTS AND EXTRAORDINARY GAIN ................ 436,836 331,336 31.8%
PROVISION FOR INCOME TAXES ........................ (161,629) (125,908) 28.4%
MINORITY INTERESTS ................................ (2,226) (1,532) 45.3%
---------- ---------- -----
NET EARNINGS BEFORE EXTRAORDINARY GAIN ............ 272,981 203,896 (2) 33.9%
EXTRAORDINARY GAIN ON SALE OF SUBSIDIARY,
NET OF INCOME TAXES OF $808,758 (3).............. ---- 1,377,075 (3)
---------- ----------
NET EARNINGS ...................................... $ 272,981 $1,580,971
========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING: 176,615 175,501
========== ==========
EARNINGS PER SHARE:
NET EARNINGS BEFORE EXTRAORDINARY GAIN (2) $ 1.55 $ 1.16 (2)
EXTRAORDINARY GAIN (3) ---- 7.85 (3)
---------- ----------
NET EARNINGS PER SHARE $ 1.55 $ 9.01
========== ==========
Note: All periods presented include the results of Ramsay HMO Inc., and Complete Health Services Inc. in accordance with pooling of
interests accounting. The Ramsay and Complete mergers occurred on May 31, 1994.
(1) Ratio of medical costs to premium revenue. Ratio includes health plans and United Behavioral Systems.
(2) Second quarter 1994 merger costs include professional fees and other direct costs associated with the May, 1994 merger of
United HealthCare Corporation and Ramsay HMO Inc., & Complete Health Services Inc. These costs were $35.9 million before tax,
$22.3 million after tax, and reduced net earnings per share before extraordinary gain by $ .13.
(3) On May 27, 1994, the Company completed the sale of its subsidiary Diversified Pharmaceutical Services to SmithKline Beecham for
$2.3 billion, resulting in a net after tax gain of $1.38 billion or $7.85 EPS for the quarter. Post disposition results of DPS
are not included.
(4) Includes post acquisition operating results of GenCare Health Systems, Inc. acquired on January 3, 1995 and Group Sales and
Service of Puerto Rico, Inc. acquired on February 28, 1995.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE B
UNITED HEALTHCARE CORPORATION
QUARTERLY TREND ANALYSIS
(Unaudited)
(000's)
% CHG FROM % CHG FROM
3RD QTR % 4TH QTR % 3RD QTR 1ST QTR % 4TH QTR
1994 REVENUE 1994 REVENUE 1994 1995(2) REVENUE 1994
-------- ------- -------- ------- ---------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES:
PREMIUM................................ $858,228 89.7% $877,317 90.5% 2.2% $1,004,489 91.0% 14.5%
MANAGEMENT SERVICES ................... 59,820 6.3% 55,822 5.8% -6.7% 65,224 5.9% 16.8%
INVESTMENT INCOME...................... 38,786 4.0% 35,888 3.7% -7.5% 34,122 3.1% -4.9%
-------- ------ -------- ------ ------- ---------- ------ ------
TOTAL REVENUES......................... 956,834 100.0% 969,027 100.0% 1.3% 1,103,835 100.0% 13.9%
-------- ------ -------- ------ ------- ---------- ------ ------
OPERATING EXPENSES:
MEDICAL COSTS(1)....................... 675,650 78.7%(1) 685,613 78.1%(1) 1.5% 783,501 78.0%(1) 14.3%
SELLING, GENERAL & ADMIN............... 133,462 13.9% 130,653 13.5% -2.1% 157,578 14.3% 20.6%
DEPRECIATION & AMORT................... 16,258 1.7% 15,540 1.6% -4.4% 19,665 1.8% 26.5%
-------- ------ -------- ------ ------- ---------- ------ ------
TOTAL OPERATING EXPENSES............... 825,370 86.3% 831,806 65.8% 0.8% 960,744 87.0% 15.5%
-------- ------ -------- ------ ------- ---------- ------ ------
EARNINGS FROM OPERATIONS................ 131,464 13.7% 137,221 14.2% 4.4% 143,091 13.0% 4.3%
INTEREST EXPENSE........................ (413) (613) 48.4% (180) -70.6%
-------- -------- ------- ---------- ------
EARNINGS BEFORE INCOME TAXES, MINORITY
INTERESTS AND EXTRAORDINARY GAIN....... 131,051 136,608 4.2% 142,911 4.6%
PROVISION FOR INCOME TAXES.............. (49,810) (51,914) 4.2% (52,878) 1.9%
MINORITY INTERESTS...................... (399) (451) --- (601) ---
-------- -------- ------- ---------- ------
NET EARNINGS............................ $ 80,842 $ 84,243 4.2% $ 89,432 6.2%
======== ======== ======= ========== ======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING: 176,038 176,573 0.3% 176,403 -0.1%
======== ======== ======= ========== ======
EARNINGS PER SHARE:
NET EARNINGS PER SHARE................. $ 0.46 $ 0.48 $ 0.51
======== ======== ==========
</TABLE>
<TABLE>
<CAPTION>
% CHG FROM % CHG FROM
2ND QTR $ 1ST QTR 3RD QTR % 2ND QTR
1995(2) REVENUE 1995 1995(2) REVENUE 1995
---------- ------- ---------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
PREMIUM................................ $1,048,773 90.6% 4.4% $1,100,013 90.5% 4.9%
MANAGEMENT SERVICES ................... 68,749 5.9% 5.4% 76,367 6.3% 11.1%
INVESTMENT INCOME...................... 40,423 3.5% 18.5% 39,156 3.2% -3.1%
---------- ------- ---------- ---------- ------- ----------
TOTAL REVENUES......................... 1,157,945 100.0% 4.9% 1,215,536 100.0% 5.0%
---------- ------- ---------- ---------- ------- ----------
OPERATING EXPENSES:
MEDICAL COSTS(1)....................... 824,161 78.6%(1) 5.2% 872,358 79.3%(1) 5.8%
SELLING, GENERAL & ADMIN............... 169,519 14.6% 7.6% 173,267 14.3% 2.2%
DEPRECIATION & AMORT................... 20,384 1.8% 3.7% 19,343 1.6% -5.1%
---------- ------- ---------- ---------- ------- ----------
TOTAL OPERATING EXPENSES............... 1,014,064 87.6% 5.5% 1,064,968 87.6% 5.0%
---------- ------- ---------- ---------- ------- ----------
EARNINGS FROM OPERATIONS................ 143,881 12.4% 0.6% 150,568 12.4% 4.6%
INTEREST EXPENSE........................ (378) 110.0% (146) -61.4%
---------- ---------- ---------- ----------
EARNINGS BEFORE INCOME TAXES, MINORITY
INTERESTS AND EXTRAORDINARY GAIN....... 143,503 0.4% 150,422 4.8%
PROVISION FOR INCOME TAXES.............. (53,096) 0.4% (55,655) 4.8%
MINORITY INTERESTS...................... (528) --- (1,097) ---
---------- ---------- ---------- ----------
NET EARNINGS............................ $ 89,879 0.5% $ 93,670 4.2%
========== ========== =========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING: 176,304 -0.1% 177,070 0.4%
========== ========== =========== ==========
EARNINGS PER SHARE:
NET EARNINGS PER SHARE................. $ 0.51 $ 0.53
========== ==========
(1) Ratio of medical costs to premium revenue. Ratio includes health plans and United Behavioral Systems.
(2) Includes post acquisition operating results of GenCare Health Systems, Inc. acquired on January 3, 1995 and Group Sales and
Service of Puerto Rico, Inc. acquired on February 28, 1995.
</TABLE>
<PAGE>
SCHEDULE C
UNITED HEALTHCARE CORPORATION
QUARTERLY ANALYSIS FOR THE QUARTER ENDED 09/30/95
LINE OF BUSINESS SUMMARY
(Unaudited)
(000's)
<TABLE>
<CAPTION>
% CHANGE
3 MONTHS ENDED % 3 MONTHS ENDED % 09/30/94 to
09/30/95 (1) OF TOTAL 09/30/94 OF TOTAL 09/30/95
-------------- -------- -------------- -------- -----------
<S> <C> <C> <C> <C> <C>
REVENUES
OWNED HEALTH PLANS $1,103,066 90.7% $852,746 89.1% 29.4%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES 104,480 (2) 8.6% 86,392 (2) 9.0% 20.9% (2)
CORPORATE, ELIMINATIONS AND OTHER 7,990 0.7% 17,696 1.9% ----
-------------- -------- -------------- -------- -----------
TOTAL REVENUE $1,215,536 100.0% $956,834 100.0% 27.0%
============== ======== ============== ======== ===========
OPERATING INCOME
OWNED HEALTH PLANS $ 103,545 68.8% $ 88,141 67.0% 17.5%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES 22,098 (2) 14.7% 14,242 (2) 10.9% 55.2% (2)
CORPORATE, ELIMINATIONS AND OTHER 24,925 16.5% 29,081 22.1% ----
-------------- -------- -------------- -------- -----------
TOTAL OPERATING INCOME $ 150,568 100.0% $131,464 100.0% 14.5%
============== ======== ============== ======== ===========
OPERATING MARGIN
OWNED HEALTH PLANS 9.4% 10.3%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES 21.2% 16.5%
-------------- --------------
TOTAL OPERATING MARGIN 12.4% 13.7%
============== ==============
% CHANGE
9 MONTHS ENDED % 9 MONTHS ENDED % 09/30/94 to
09/30/95 (1) OF TOTAL 09/30/94 OF TOTAL 09/30/95
-------------- -------- -------------- -------- -----------
REVENUES
OWNED HEALTH PLANS $3,156,146 90.8% $2,487,816 88.9% 26.9%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES 297,504 (2) 8.5% 370,108 (2) 13.2% -19.6% (2)
CORPORATE, ELIMINATIONS AND OTHER 23,666 0.7% (58,069) -2.1% ----
-------------- -------- -------------- -------- -----------
TOTAL REVENUE $3,477,316 100.0% 2,799,855 100.0% 24.2%
============== ======== ============== ======== ===========
OPERATING INCOME
OWNED HEALTH PLANS $ 312,337 71.4% $ 256,023 69.4% 22.0%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES 57,905 (2) 13.2% 57,372 (2) 15.6% 0.9% (2)
CORPORATE, ELIMINATIONS AND OTHER 67,298 15.4% 55,431 15.0% ----
-------------- -------- -------------- -------- -----------
TOTAL OPERATING INCOME $ 437,540 100.0% $ 368,826 100.0% 18.6%
============== ======== ============== ======== ===========
OPERATING MARGIN
OWNED HEALTH PLANS 9.9% 10.3%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES 19.5% 15.5%
TOTAL OPERATING MARGIN -------------- --------------
12.6% 13.2%
============== =============
</TABLE>
Note: All periods presented include the results of Ramsay HMO Inc., and
Complete Health Services Inc. in accordance with pooling of
interests accounting. The Ramsay and Complete mergers occurred on
May 31, 1994.
(1) Includes post acquisition operating results of GenCare Health Systems,
Inc. acquired on January 3, 1995 and Group Sales and
Service of Puerto Rico, Inc. acquired on February 28, 1995.
(2) Excludes the post disposition results of Diversified Pharmaceutical
Services, which was sold on May 27, 1994.
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE D
UNITED HEALTHCARE CORPORATION
LINE OF BUSINESS SUMMARY - HISTORY
(000's)
1994
============================================================= ======================
3RD QTR % OF 4TH QTR % OF % CHG FROM 1ST QTR % OF
TOTAL TOTAL 3RD QTR 94 TOTAL
------------------------------------------------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
OWNED HEALTH PLANS $852,746 89.1% $870,730 89.9% 2.1% $1,005,782(2) 91.1%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES(1) 86,392(1) 9.0% 86,001(1) 8.9% -0.5% 92,812(1) 8.4%
CORPORATE, ELIMINATIONS AND OTHER 17,696 1.9% 12,296 1.2% --- 5,241 0.5%
------------------------------------------------------------- ----------------------
TOTAL REVENUE $958,834 100.0% $969,027 100.0% 1.3% $1,103,835 100.0%
============================================================= ======================
OPERATING INCOME
OWNED HEALTH PLANS $ 88,141 67.0% $ 96,038 70.0% 9.0% $ 107,145(2) 74.9%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES(1) 14,242(1) 10.9% 14,622(1) 10.7% 2.7% 17,176(1) 12.0%
CORPORATE, ELIMINATIONS AND OTHER 29,081 22.1% 26,561 19.3% --- 18,770 13.1%
------------------------------------------------------------- ----------------------
TOTAL OPERATING INCOME $131,484 100.0% $137,221 100.0% 4.4% $ 143,091 100.0%
============================================================= ======================
OPERATING MARGIN
OWNED HEALTH PLANS 10.3% 11.0% 10.7%(2)
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES(1) 16.5%(1) 17.0%(1) 18.5%(1)
----------- ------------ --------------
TOTAL OPERATING MARGIN 13.7% 14.2% 13.0%
=========== ============ ==============
FOR INFORMATION PURPOSES ONLY
INVESTMENT INCOME INCLUDED IN
LINE OF BUSINESS ABOVE:
OWNED HEALTH PLANS $ 8,447 $ 9,906 17.3% $ 12,387
CORPORATE, ELIMINATIONS AND OTHER 30,339 25,982 -14.4% 21,735
------------------------------------------------------------- ----------------------
TOTAL INVESTMENT INCOME $ 38,786 $ 35,888 -7.5% $ 34,122
============================================================= ======================
RATIOS
- ----------------------------------
COMBINED SG & A RATIO(3) 10.6% 10.3% 10.8%
HEALTH PLAN MEDICAL LOSS RATIO(4) 79.4% 79.1% 78.9%
</TABLE>
<TABLE>
<CAPTION>
1995
================================================================================================
% CHG FROM 2ND QTR % OF % CHG FROM 3RD QTR % OF % CHG FROM % CHG FROM
4TH QTR 94 TOTAL 1ST QTR 95 TOTAL 2ND QTR 95 3RD QTR 94
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES
OWNED HEALTH PLANS 15.5% $1,047,298(2) 90.4% 4.1% $1,103,066(2) 90.7% 5.3% 29.4%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES(1) 7.9% 100,212(1) 8.7% 8.0% 104,480(1) 8.6% 4.3% 20.9%
CORPORATE, ELIMINATIONS AND OTHER --- 10,435 0.9% --- 7,990 0.7% --- ---
------------------------------------------------------------------------------------------------
TOTAL REVENUE 13.9% $1,157,945 100.0% 4.9% $1,215,536 100.0% 5.0% 27.0%
================================================================================================
OPERATING INCOME
OWNED HEALTH PLANS 11.6% $ 101,647(2) 70.7% -5.1% $ 103,545(2) 68.8% 1.9% 17.5%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES(1) 17.5% 18,631(1) 12.9% 8.5% 22,098(1) 14.7% 18.6% 55.2%
CORPORATE, ELIMINATIONS AND OTHER --- 23,603 16.4% --- 24,925 16.5% --- ---
------------------------------------------------------------------------------------------------
TOTAL OPERATING INCOME 4.3% $ 143,881 100.0% 0.6% $ 150,588 100.0% 4.6% 14.5%
================================================================================================
OPERATING MARGIN
OWNED HEALTH PLANS 9.7%(2) 9.4%(2)
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES(1) 18.6%(1) 21.2%(1)
----------- -----------
TOTAL OPERATING MARGIN 12.4% 12.4%
=========== ===========
FOR INFORMATION PURPOSES ONLY
INVESTMENT INCOME INCLUDED IN
LINE OF BUSINESS ABOVE:
OWNED HEALTH PLANS 25.0% $ 13,322 7.5% $ 14,551 9.2% 72.3%
CORPORATE, ELIMINATIONS AND OTHER -16.3% 27,101 24.7% 24,605 -9.2% -18.9%
------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME -4.9% $ 40,423 18.5% $ 39,156 -3.1% 1.0%
================================================================================================
RATIOS
- ----------------------------------
COMBINED SG & A RATIO(3) 11.0% 10.6%
HEALTH PLAN MEDICAL LOSS RATIO(4) 79.4% 80.1%
(1) Excludes the post disposition results of Diversified Pharmaceutical Services, which was sold on May 27, 1994.
(2) Includes post acquisition operating results of GenCare Health Systems, Inc. acquired on January 3, 1995 and Group Sales and
Service of Puerto Rico, Inc. acquired on February 28, 1995.
(3) Total selling, general & administrative expense for Owned and Managed Health Plans as a percent of combined premium revenue for
Owned and Managed Health Plans.
(4) Ratio for owned health plans only.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE E
UNITED HEALTHCARE CORPORATION
QUARTERLY ANALYSIS
BALANCE SHEET
(Unaudited)
(000's)
SUMMARY BALANCE SHEET 12/31/93 03/31/94 06/30/94 (1) 09/30/94 12/31/94 03/31/95 (2)
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CASH & SHORT-TERM INVESTMENTS $ 400,870 $ 377,628 $2,347,177 $1,843,727 $1,654,336 $ 945,073
OTHER CURRENT ASSETS 213,098 231,924 238,019 218,874 253,879 276,678
LONG-TERM INVESTMENTS 768,563 814,844 1,032,524 1,020,897 1,115,054 1,488,750
OTHER LONG-TERM ASSETS 404,823 460,127 448,672 445,559 466,210 990,330
------------ ------------ ------------ ------------ ------------ ------------
TOTAL ASSETS $1,787,354 $1,884,523 $4,066,392 $3,529,057 $3,489,479 $3,700,831
============ ============ ============ ============ ============ ============
MEDICAL SERVICES PAYABLE $ 459,201 $ 455,627 $ 441,043 $ 437,174 $ 443,559 $ 479,027
UNEARNED PREMIUMS 70,844 76,174 31,018 68,300 70,718 87,911
OTHER CURRENT LIABILITIES/INCOME
TAXES PAYABLE 128,689 149,624 155,486 120,899 134,025 199,186
TAXES PAYABLE - GAIN ON SALE
OF SUBSIDIARY ------ ------ 808,758 171,758 16,000 ------
OTHER LONG-TERM LIABILITIES 39,099 38,259 27,123 23,956 24,275 25,142
------------ ------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES 697,833 719,684 1,463,428 822,087 688,577 791,266
MINORITY INTERESTS 4,111 4,788 5,048 5,197 5,446 5,846
SHAREHOLDERS' EQUITY 1,085,410 1,160,051 2,597,916 2,701,773 2,795,456 2,903,719
------------ ------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES & EQUITY $1,787,354 $1,884,523 $4,066,392 $3,529,057 $3,489,479 $3,700,831
============ ============ ============ ============ ============ ============
SUMMARY BALANCE SHEET 06/30/95 09/30/95
___________________________ ----------- ------------
<S> <C> <C>
CASH & SHORT-TERM INVESTMENTS $1,031,172 $1,583,998
OTHER CURRENT ASSETS 272,943 309,703
LONG-TERM INVESTMENTS 1,456,333 1,001,584
OTHER LONG-TERM ASSETS 995,538 1,001,586
----------- ------------
TOTAL ASSETS $3,755,986 $3,896,871
=========== ============
MEDICAL SERVICES PAYABLE $ 473,612 $ 500,450
UNEARNED PREMIUMS 93,534 95,251
OTHER CURRENT LIABILITIES/INCOME TAXES
PAYABLE 136,517 140,448
TAXES PAYABLE - GAIN ON SALE OF
SUBSIDIARY ------ ------
OTHER LONG-TERM LIABILITIES 20,545 26,189
----------- ------------
TOTAL LIABILITIES 724,208 762,338
MINORITY INTERESTS 6,374 7,021
SHAREHOLDERS' EQUITY 3,025,404 3,127,512
----------- ------------
TOTAL LIABILITIES & EQUITY $3,755,986 $3,896,871
=========== ============
</TABLE>
Note: All periods presented include the results of Ramsay HMO Inc. and Complete
Health Services Inc. in accordance with pooling of interests accounting. The
Ramsay and Complete mergers occurred on May 31, 1994.
(1) On May 27, 1994, the Company completed the sale of its subsidiary
Diversified Pharmaceutical Services to SmithKline Beecham for $2.3 billion,
resulting in a net after tax gain of $1.38 billion or $7.86 EPS.
(2) GenCare Health Systems, Inc. (St. Louis) was acquired in January, 1995.
Group Sales and Service of Puerto Rico, Inc. was acquired in February, 1995.
<PAGE>
SCHEDULE F
UNITED HEALTHCARE CORPORATION
QUARTERLY TREND ANALYSIS
HEALTH PLAN ENROLLMENT
<TABLE>
<CAPTION>
DEC SEP DEC SEP
1993 1994 1994 1995(1)(2)
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
OWNED - COMMERCIAL
INSURED 1,459,000 1,633,000 1,668,000 2,263,000
SELF FUNDED 62,000 120,000 123,000 192,000 (1)
----------- ----------- ----------- -----------
TOTAL COMMERCIAL 1,521,000 1,753,000 1,791,000 2,455,000
- MEDICARE 98,000 106,000 109,000 137,000
- MEDICAID 239,000 266,000 285,000 331,000
----------- ----------- ----------- -----------
TOTAL OWNED ENROLLMENT 1,858,000 2,125,000 2,185,000 2,923,000
MANAGED - COMMERCIAL
INSURED 695,000 727,000 747,000 875,000
SELF FUNDED 110,000 137,000 144,000 196,000
----------- ----------- ----------- -----------
TOTAL COMMERCIAL 805,000 864,000 891,000 1,071,000
- MEDICARE 79,000 77,000 77,000 76,000
- MEDICAID 46,000 45,000 47,000 57,000
----------- ----------- ----------- -----------
TOTAL MANAGED ENROLLMENT 930,000 986,000 1,015,000 1,204,000
TOTAL - COMMERCIAL
INSURED 2,154,000 2,360,000 2,415,000 3,138,000
SELF FUNDED 172,000 257,000 267,000 388,000
----------- ----------- ----------- -----------
TOTAL COMMERCIAL 2,326,000 2,617,000 2,682,000 3,526,000
- MEDICARE 177,000 183,000 186,000 213,000
- MEDICAID 285,000 311,000 332,000 388,000
----------- ----------- ----------- -----------
TOTAL HEALTH PLANS 2,788.000 3,111,000 3,200,000 4,127,000
=========== =========== =========== ===========
% CHANGE % CHANGE
DEC 94 to SEP 94 to
SEP 95 SEP 95
=========== ===========
OWNED - COMMERCIAL
INSURED 35.7% 38.6%
SELF FUNDED 56.1%(1) 60.0%(1)
----------- -----------
TOTAL COMMERCIAL 37.1% 40.0%
- MEDICARE 25.7% 29.2%
- MEDICAID 16.1% 24.4%
----------- -----------
TOTAL OWNED ENROLLMENT 33.8% 37.6%
MANAGED - COMMERCIAL
INSURED 17.1% 20.4%
SELF FUNDED 36.1% 43.1%
----------- -----------
TOTAL COMMERCIAL 20.2% 24.0%
- MEDICARE - 1.3% -1.3%
- MEDICAID 21.3% 26.7%
----------- -----------
TOTAL MANAGED ENROLLMENT 18.6% 22.1%
TOTAL - COMMERCIAL
INSURED 29.9% 33.0%
SELF FUNDED 45.3% 51.0%
----------- -----------
TOTAL COMMERCIAL 31.5% 34.7%
- MEDICARE 14.5% 16.4%
- MEDICAID 16.9% 24.8%
----------- -----------
TOTAL HEALTH PLANS 29.0% 32.7%
=========== ===========
</TABLE>
(1) Includes GenCare Health Systems, Inc. acquired on January 3, 1995.
GenCare had 250,000 enrollees (including 38,000 self funded enrollees)
as of September, 1995. Consistent with purchase accounting, no prior
period restatement was made.
(2) Includes Group Sales and Service acquired on February 28, 1995. Group
Sales and Service had 133,000 enrollees as of September, 1995.
Consistent with purchase accounting, no prior restatement was made.
