<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): FEBRUARY 14, 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 February 14, 1995, the Registrant announced its financial results for the
fourth quarter and fiscal year ended December 31, 1994.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
- - - ----------------------------------------------------------------------------
(c) Exhibits
- - - --- --------
Exhibit 99.1 - United HealthCare Corporation Press Release, dated February
14, 1995.
Exhibit 99.2 - Supplemental Financial Schedules related to financial
results for the fourth quarter ended December 31, 1994.
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
Vice President, Treasurer and
Chief Financial Officer
Date: February 14, 1995
3
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page No.
- - - -------------- ----------- --------
99.1 United HealthCare Corporation Press Release dated
February 14, 1995. 5
99.2 Supplemental Financial Schedules related to financial
results for the fourth quarter ended December 31, 1994. 9
4
<PAGE>
CONTACTS: Bernard McDonagh, Vice
President, Investor Relations
(612) 936-7214
Noreen Conway
Vice President, Public Relations
& Communications
(612) 936-1125
(For Immediate Release)
UNITED HEALTHCARE REPORTS RECORD YEAR AND FOURTH QUARTER
1994'S $1.77 NET EPS FROM OPERATIONS UP 44 PERCENT
OVER 1993'S $1.23
RECORD JANUARY 1995 ENROLLMENT GROWTH
CAPS 1994'S 990,400 OWNED-PLAN GAIN
MINNEAPOLIS (February 14, 1995) -- United HealthCare Corporation (NYSE:UNH)
today announced record results for the fourth quarter and year ended December
31, 1994.
(The results that follow are restated for all periods to include the
results of Complete Health Services, Inc. and Ramsay-HMO, Inc., in accordance
with pooling-of-interests accounting. A one-time, second quarter 1994 non-
operating transaction charge of $35.9 million was taken for the professional and
other costs of these May 1994 acquisitions, reducing reported full-year 1994
net earnings by $22.3 million, or $0.13 per share. In addition, the company
reported an extraordinary gain in 1994's second quarter of $1.4 billion, or
$7.86 per share, resulting from the May 27, 1994, sale of its subsidiary
Diversified Pharmaceutical Services (DPS) for $2.3 billion in pre-tax cash
proceeds.)
1994 ANNUAL RESULTS
- - - -------------------
Net earnings for 1994 before the non-operating merger costs and
extraordinary DPS sale gain were $310.4 million, up 46 percent over 1993 net
earnings of $212.1
(more)
<PAGE>
United HealthCare Corp.
1995 Results
February 14, 1995 -- p. 2
million. Earnings per share before the non-operating merger costs and the
extraordinary gain from the sale of DPS were $1.77, up 44 percent from $1.23 for
1993.
Net earnings for 1994 inclusive of the non-operating merger costs and the
extraordinary gain were $1.67 billion, or $9.50 per share.
Revenues for 1994 were $3.77 billion, a 21 percent increase over $3.12
billion reported for 1993.
FOURTH QUARTER 1994 RESULTS
- - - ---------------------------
Fourth quarter net earnings were $84.2 million, up 41 percent from last
year's fourth quarter, with earnings per share of $0.48, a 41 percent increase
over $0.34 reported for the fourth quarter of 1993. Revenues for the fourth
quarter were $969.0 million, a 17 percent increase over fourth quarter 1993.
The company noted that fourth quarter as well as total 1994 revenue growth
comparisons are affected by the absence of DPS-related revenues following the
company's sale of DPS in May 1994 and the change in the UHC-Allina management
contract effective August 1994.
United HealthCare Chairman and CEO William W. McGuire, M.D., said the
company is extremely pleased with both the year's and fourth quarter's results.
"These results reflect another banner year for our company on all fronts. We
continued our strong internal growth, coupling this with successful acquisition
activity and our strategic sale of and continued management role with
Diversified Pharmaceutical Services," Dr. McGuire said.
ADDITIONAL HIGHLIGHTS
- - - ---------------------
Medical Loss Ratio. The company's fourth quarter 1994 medical loss ratio
(medical costs as a percent of premium revenues) in its owned plans was 79.1
percent, down sequentially from the 79.4 percent reported for third quarter
1994.
Fourth quarter's experience represents a typical seasonal slowdown in
utilization in
(more)
<PAGE>
United HealthCare Corp.
1995 Results
February 14, 1995 -- p. 3
addition to the company's ongoing effective utilization management efforts.
Shareholders' equity stood at $2.8 billion at December 31, compared with
$1.1 billion at December 31, 1993.
Enrollment Growth. As reported recently by the company, enrollment growth
in the company's owned health plans, including acquisitions, rose by 990,400
members, or 64 percent, during the 12 months ended January 1995. This included
very good internal growth of 63,800 enrollees in the fourth quarter of 1994 and
a record one-month gain of 152,500 in January 1995. Internal enrollment growth
for the 12-month period ending January 1995 also was very strong, rising by
384,000 enrollees, or 18 percent. Dr. McGuire said the company anticipates
continued strong post-January enrollment gains in all three of its primary
market segments -- commercial, Medicaid and Medicare.
"Moving forward, we also see continued growth in our existing specialty
businesses. We also look forward to building on our full range of strengths and
expertise to deliver additional innovative and effective products to serve our
current and expanding client base," he said.
United HealthCare Corporation is a national leader in health care
management, serving purchasers, users, managers and providers of health care
since 1974. The company's broad range of products is offered through 21
locally-based owned and managed health plans, whose membership exceeds 3.6
million, and its non-geographically bounded specialty care management companies,
which serve the needs of 24 million-plus lives.
# # # # #
<PAGE>
UNITED HEALTHCARE CORPORATION
EARNINGS REPORT*
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31, 1994 DECEMBER 31, 1993
------------------ -----------------
<S> <C> <C>
Revenues $ 969,027 $ 827,600
Net earnings $ 84,243 $ 59,587
Net earnings per share $ 0.48 $ 0.34
Average number of
common shares outstanding 176,573 173,254
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1994 DECEMBER 31, 1993
----------------- -----------------
<S> <C> <C>
Revenues $3,768,882 $3,115,202
Net earnings before extraordinary
item (see Note a) $ 288,139(a) $ 212,078
Extraordinary gain on sale of
subsidiary $1,377,075 $ --
Net earnings $1,665,214 $ 212,078
Net earnings per share before
extraordinary item (see Note a) $ 1.64(a) $ 1.23
Extraordinary gain $ 7.86 $ --
---------- ----------
Net earnings per share $ 9.50 $ 1.23
========== ==========
Average number of
common shares outstanding 175,209 171,739
</TABLE>
* All periods presented have been restated to include the results of HMO
America, Inc., Ramsay-HMO, Inc. and Complete Health Services, Inc. in accordance
with pooling of interests accounting. United HealthCare Corporation and HMO
America merged on August 31, 1993. The Ramsay and Complete mergers occurred on
May 31, 1994.
(a) Excluding the $35.9 million in non-operating pooling expenses ($0.13
earnings per share) associated with the Ramsay-HMO and Complete Health Services
mergers, net earnings before the extraordinary gain for the 12-month period
ended December 31, 1994, would have been: earnings - $310,422; and earnings per
share - $1.77.
<PAGE>
SCHEDULE A
UNITED HEALTHCARE CORPORATION
QUARTERLY ANALYSIS FOR THE QUARTER ENDED 12/31/94
(Unaudited) (000's)
<TABLE>
<CAPTION>
% CHANGE
3 MONTHS ENDED % 3 MONTHS ENDED % 12/31/93 to
REVENUES: 12/31/94 (6) REVENUE 12/31/93 REVENUE 12/31/94
-------------- ------- -------------- ------- -----------
<S> <C> <C> <C> <C> <C>
PREMIUM....................................... $ 877,317 90.5% $ 736,647 89.0% 19.1%
MANAGEMENT SERVICES........................... 55,822 5.8% 73,923 8.9% -24.5%
INVESTMENT INCOME............................. 35,888 3.7% 17,030 2.1% 110.7%
-------------- ----- -------------- ----- ----------
TOTAL REVENUES............................. 969,027 100.0% 827,600 100.0% 17.1%
-------------- ----- -------------- ----- ----------
OPERATING EXPENSES:
MEDICAL COSTS (1)............................. 685,613 78.1%(1) 580,238 78.8%(1) 18.2%
SELLING, GENERAL & ADMINISTRATION............. 130,653 13.5% 138,597 16.7% -5.7%
DEPRECIATION & AMORTIZATION................... 15,540 1.6% 14,487 1.8% 7.3%
-------------- ----- -------------- ----- ----------
TOTAL OPERATING EXPENSES................... 831,806 85.8% 733,322 88.6% 13.4%
-------------- ----- -------------- ----- ----------
EARNINGS FROM OPERATIONS........................ 137,221 14.2% 94,278 11.4% 45.5%
INTEREST EXPENSE................................ (613) (789) -22.3%
GAIN ON SALE OF SUBSIDIARY (2).................. -- -- --
MERGER COSTS (3) (4)............................ -- -- --
-------------- -------------- ----------
EARNINGS BEFORE INCOME TAXES, MINORITY
INTERESTS AND EXTRAORDINARY GAIN.............. 136,608 93,489 46.1%
PROVISION FOR INCOME TAXES...................... (51,914) (33,316) 55.8%
MINORITY INTERESTS.............................. (451) (586) -23.0%
-------------- -------------- ----------
NET EARNINGS BEFORE EXTRAORDINARY GAIN.......... 84,243 59,587 41.4%
EXTRAORDINARY GAIN ON SALE OF SUBSIDIARY,
NET OF INCOME TAXES OF $808,758 (6)........... -- --
-------------- --------------
NET EARNINGS.................................... $ 84,243 $ 59,587
============== ==============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (5): 176,573 173,254 1.9%
============== ============== ==========
EARNINGS PER SHARE (5):
NET EARNINGS BEFORE EXTRAORDINARY GAIN (4) $ 0.48 $ 0.34 41.2%
EXTRAORDINARY GAIN (6) -- --
-------------- --------------
NET EARNINGS PER SHARE $ 0.48 $ 0.34
============== ==============
<CAPTION>
% CHANGE
12 MONTHS ENDED % 12 MONTHS ENDED % 12/31/93 to
12/31/94 (6) REVENUE 12/31/93 REVENUE 12/31/94
--------------- ------- --------------- ------- -----------
<S> <C> <C> <C> <C> <C>
PREMIUM....................................... $ 3,376,238 89.6% $ 2,782,399 89.3% 21.3%
MANAGEMENT SERVICES........................... 274,616 7.3% 270,027 8.7% 1.7%
INVESTMENT INCOME............................. 118,028 3.1% 62,776 2.0% 88.0%
-------------- ----- -------------- ----- ----------
TOTAL REVENUES............................. 3,768,882 100.0% 3,115,202 100.0% 21.0%
-------------- ----- -------------- ----- ----------
OPERATING EXPENSES:
MEDICAL COSTS (1)............................. 2,643,107 78.3%(1) 2,236,588 80.4%(1) 18.2%
SELLING, GENERAL & ADMINISTRATION............. 555,649 14.7% 491,635 15.8% 13.0%
DEPRECIATION & AMORTIZATION................... 64,079 1.7% 50,628 1.6% 26.6%
-------------- ----- -------------- ----- ----------
TOTAL OPERATING EXPENSES................... 3,262,835 86.6% 2,778,851 89.2% 17.4%
-------------- ----- -------------- ----- ----------
EARNINGS FROM OPERATIONS........................ 506,047 13.4% 336,351 10.8% 50.5%
INTEREST EXPENSE................................ (2,163) (3,046) -29.0%
GAIN ON SALE OF SUBSIDIARY (2).................. -- 14,982 (2) --
MERGER COSTS (3) (4)............................ (35,940)(4) (14,860)(3) --
-------------- -------------- ----------
EARNINGS BEFORE INCOME TAXES, MINORITY
INTERESTS AND EXTRAORDINARY GAIN.............. 467,944 333,427 40.3%
PROVISION FOR INCOME TAXES...................... (177,822) (119,379) 49.0%
MINORITY INTERESTS.............................. (1,983) (1,970) 0.7%
-------------- -------------- ----------
NET EARNINGS BEFORE EXTRAORDINARY GAIN.......... 288,139 (4) 212,078 See Note (4)
EXTRAORDINARY GAIN ON SALE OF SUBSIDIAR,
NET OF INCOME TAXES OF $808,758 (6).......... 1,377,075 (6) --
-------------- --------------
NET EARNINGS.................................... $ 1,665,214 $ 212,078
============== ==============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (5): 175,209 171,739 2.0%
============== ============== ==========
EARNINGS PER SHARE (5):
NET EARNINGS BEFORE EXTRAORDINARY GAIN (4) $ 1.64 (4) $ 1.23 See Note (4)
EXTRAORDINARY GAIN (6) 7.86 (6) --
-------------- --------------
NET EARNINGS PER SHARE $ 9.50 $ 1.23
============== ==============
</TABLE>
Note: All periods presented have been restated to include the results of HMO
America, Inc., Ramsay HMO Inc., and Complete Health Services Inc. in
accordance with pooling of interests accounting. UHC and HMO America
merged on August 31, 1993. 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) On July 30, 1993, United HealthCare of Iowa, a 26,800 member health
maintenance organization, was sold for $19.8 million.
(3) 1993 merger costs include professional fees and other direct costs
associated with the August, 1993 merger of United HealthCare Corporation
and HMO America, Inc.
(4) 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. Excluding the effects of
the Ramsay and Complete merger costs, net earnings before extraordinary
gain for the year ended 12/31/94 would have been: Earnings -$310,422 &
EPS - $1.77.
(5) Weighted average number of common shares outstanding and earnings per share
have been restated to reflect the Company's February 23, 1994 two-for-one
stock split.
(6) 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. Post
disposition results of DPS are not included.
<PAGE>
SCHEDULE B
UNITED HEALTHCARE CORPORATION
QUARTERLY TREND ANALYSIS
(Unaudited)
(000's)
<TABLE>
<CAPTION>
% CHG FROM
4TH QTR % 1ST QTR % 4TH QTR 2ND QTR %
REVENUES: 1993 REVENUE 1994 REVENUE 1993 1994 (4) REVENUE
------- ------- ------- ------- ---------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
PREMIUM................................... $ 736,647 89.0% $ 804,991 89.1% 9.3% $ 835,702 89.0%
MANAGEMENT SERVICES....................... 73,923 8.9% 81,422 9.0% 10.1% 77,552 8.2%
INVESTMENT INCOME......................... 17,030 2.1% 17,143 1.9% 0.7% 26,211 2.8%
--------- ----- --------- ----- ---- ---------- -----
TOTAL REVENUES............................ 827,600 100.0% 903,556 100.0% 9.2% 939,465 100.0%
--------- ----- --------- ----- ---- ---------- -----
OPERATING EXPENSES:
MEDICAL COSTS (1)......................... 580,238 78.8%(1) 629,578 78.2%(1) 8.5% 652,266 78.1%(1)
SELLING, GENERAL & ADMIN.................. 138,597 16.7% 143,366 15.9% 3.4% 148,168 15.8%
DEPRECIATION & AMORT...................... 14,487 1.8% 15,903 1.8% 9.8% 16,378 1.7%
--------- ----- --------- ----- ---- ---------- -----
TOTAL OPERATING EXPENSES.................. 733,322 88.6% 788,847 87.3% 7.6% 816,812 86.9%
--------- ----- --------- ----- ---- ---------- -----
EARNINGS FROM OPERATIONS................... 94,278 11.4% 114,709 12.7% 21.7% 122,653 13.1%
INTEREST EXPENSE........................... (789) (568) -28.0% (569)
MERGER COSTS (2)........................... -- -- -- (35,940)(2)
--------- --------- ---- ----------
EARNINGS BEFORE INCOME TAXES, MINORITY
INTERESTS AND EXTRAORDINARY GAIN.......... 93,489 114,141 22.1% 86,144
PROVISION FOR INCOME TAXES................. (33,316) (43,067) 29.3% (33,031)
MINORITY INTERESTS......................... (586) (676) -- (457)
--------- --------- ---- ----------
NET EARNINGS BEFORE EXTRAORDINARY GAIN 59,587 70,398 18.1% 52,656 (2)
EXTRAORDINARY GAIN ON SALE OF SUBSIDIARY,
NET OF INCOME TAXES OF $808,758 (4)....... -- -- 1,377,075 (4)
--------- --------- ----------
NET EARNINGS............................... $ 59,587 $ 70,398 $1,429,731
========= ========= ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING (3): 173,254 174,507 0.7% 175,490
========= ========= ==== ==========
EARNINGS PER SHARE (3):
NET EARNINGS BEFORE EXTRAORDINARY GAIN (2) $ 0.34 0.40 17.6% 0.30 (2)
EXTRAORDINARY GAIN (4) -- -- 7.85 (4)
--------- --------- ==== ----------
NET EARNINGS PER SHARE $ 0.34 0.40 8.15
========= ========= ==========
<CAPTION>
% CHG FROM % CHG FROM % CHG FROM
1ST QTR 3RD QTR % 2ND QTR 4TH QTR % 3RD QTR
REVENUES: 1994 1994 (4) REVENUE 1994 1994 (4) REVENUE 1994
---------- -------- ------- ---------- -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
PREMIUM................................... 3.8% $ 858,228 89.7% 2.7% $ 877,317 90.5% 2.2%
MANAGEMENT SERVICES....................... -4.8% 59,820 6.3% -22.9% 55,822 5.8% -6.7%
INVESTMENT INCOME......................... 52.9% 38,786 4.0% 48.0% 35,888 3.7% -7.5%
-------- --------- ----- -------- --------- ----- -------
TOTAL REVENUES............................ 4.0% 956,834 100.0% 1.8% 969,027 100.0% 1.3%
-------- --------- ----- -------- --------- ----- -------
OPERATING EXPENSES:
MEDICAL COSTS (1)......................... 3.6% 675,650 78.7%(1) 3.6% 685,613 78.1%(1) 1.5%
SELLING, GENERAL & ADMIN.................. 3.3% 133,462 13.9% -9.9% 130,653 13.5% -2.1%
DEPRECIATION & AMORT...................... 3.0% 16,258 1.7% -0.7% 15,540 1.6% -4.4%
-------- --------- ----- -------- --------- ----- -------
TOTAL OPERATING EXPENSES.................. 3.5% 825,370 86.3% 1.0% 831,806 85.8% 0.8%
-------- --------- ----- -------- --------- ----- -------
EARNINGS FROM OPERATIONS................... 6.9% 131,464 13.7% 7.2% 137,221 14.2% 4.4%
INTEREST EXPENSE........................... 0.2% (413) -27.4% (613) 48.4%
MERGER COSTS (2)........................... -- -- -- -- --
-------- --------- -------- --------- -------
EARNINGS BEFORE INCOME TAXES, MINORITY
INTERESTS AND EXTRAORDINARY GAIN.......... -24.5% 131,051 52.1% 136,608 4.2%
PROVISION FOR INCOME TAXES................. -23.3% (49,810) 50.8% (51,914) 4.2%
MINORITY INTERESTS......................... -- (399) -- (451) --
-------- --------- -------- --------- -------
NET EARNINGS BEFORE EXTRAORDINARY GAIN See Note (2) 80,842 See Note (2) 84,243 4.2%
EXTRAORDINARY GAIN ON SALE OF SUBSIDIARY,
NET OF INCOME TAXES OF $808,758 (4)....... -- --
--------- ---------
NET EARNINGS............................... $ 80,842 $ 84,243
========= =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING (3): 0.6% 176,038 0.3% 176,573 0.3%
======== ========= ======== ========= =======
EARNINGS PER SHARE (3):
NET EARNINGS BEFORE EXTRAORDINARY GAIN (2) See Note (2) $ 0.46 See Note (2) $ 0.48 4.3%
EXTRAORDINARY GAIN (4) -- --
--------- ---------
NET EARNINGS PER SHARE $ 0.46 $ 0.48
========= =========
</TABLE>
Note: All periods presented have been restated to include the results of HMO
America, Inc., Ramsay HMO Inc., and Complete Health Services Inc. in
accordance with pooling of interests accounting. UHC and HMO America
merged on August 31, 1993. 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) Weighted average number of common shares outstanding and earnings per share
have been restated to reflect the Company's February 23, 1994 two-for-one
stock split.
(4) 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.
<PAGE>
SCHEDULE C
UNITED HEALTHCARE CORPORATION
QUARTERLY ANALYSIS FOR THE YEAR ENDED 12/31/94
LINE OF BUSINESS SUMMARY
(Unaudited)
(000's)
<TABLE>
<CAPTION>
% CHANGE
3 MONTHS ENDED % 3 MONTHS ENDED % 12/31/93 to
REVENUES 12/31/94 OF TOTAL 12/31/93 OF TOTAL 12/31/94
- - - -------- -------------- -------- -------------- -------- -----------
<S> <C> <C> <C> <C> <C>
OWNED HEALTH PLANS $ 870,730 89.9% $ 735,950 88.9% 18.3%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 86,001 (1) 8.9% 127,044 15.4% -32.3%(1)
CORPORATE, ELIMINATIONS AND OTHER 12,296 1.2% (35,394) -4.3% --
------------- ----- ------------- ----- -----
TOTAL REVENUE $ 969,027 100.0% $ 827,600 100.0% 17.1%
============= ===== ============= ===== =====
OPERATING INCOME
- - - ----------------
OWNED HEALTH PLANS $ 96,038 70.0% $ 65,511 69.5% 46.6%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 14,622 (1) 10.7% 21,585 22.9% -32.3%
CORPORATE, ELIMINATIONS AND OTHER 26,561 19.3% 7,182 7.6% --
------------- ----- ------------- ----- -----
TOTAL OPERATING INCOME $ 137,221 100.0% $ 94,278 100.0% 45.5%
============= ===== ============= ===== =====
OPERATING MARGIN
- - - ----------------
OWNED HEALTH PLANS 11.0% 8.9%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 17.0%(1) 17.0%
------------- -------------
TOTAL OPERATING MARGIN 14.2% 11.4%
============= =============
<CAPTION>
% CHANGE
12 MONTHS ENDED % 12 MONTHS ENDED % 12/31/93 to
REVENUES 12/31/94 OF TOTAL 12/31/93 OF TOTAL 12/31/94
- - - -------- --------------- -------- --------------- -------- -----------
<S> <C> <C> <C> <C> <C>
OWNED HEALTH PLANS $ 3,358,546 89.1% $ 2,777,514 89.2% 20.9%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 456,109 (1) 12.1% 425,992 13.7% 7.1%(1)
CORPORATE, ELIMINATIONS AND OTHER (45,773) -1.2% (88,304) -2.8% --
------------- ----- ------------- ----- -----
TOTAL REVENUE $ 3,768,882 100.0% $ 3,115,202 100.0% 21.0%
============= ===== ============= ===== =====
OPERATING INCOME
- - - ----------------
OWNED HEALTH PLANS $ 352,061 69.6% $ 234,415 69.7% 50.2%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 71,994 (1) 14.2% 76,050 22.6% -5.3%
CORPORATE, ELIMINATIONS AND OTHER 81,992 16.2% 25,886 7.7% --
------------- ----- ------------- ----- -----
TOTAL OPERATING INCOME $ 506,047 100.0% $ 336,351 100.0% 50.5%
============= ===== ============= ===== =====
OPERATING MARGIN
- - - ----------------
OWNED HEALTH PLANS 10.5% 8.4%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 15.8%(1) 17.9%
------------- -------------
TOTAL OPERATING MARGIN 13.4% 10.8%
============= =============
</TABLE>
Note: All periods presented have been restated to include the results of HMO
America, Inc., Ramsay HMO Inc., and Complete Health Services Inc. in
accordance with pooling of interests accounting. UHC and HMO America
merged on August 31, 1993. The Ramsay and Complete mergers occurred on
May 31, 1994.
(1) Excludes the post disposition results of Diversified Pharmaceutical
Services, which was sold on May 27, 1994.
<PAGE>
SCHEDULE D
UNITED HEALTHCARE CORPORATION
LINE OF BUSINESS SUMMARY - HISTORY
(000's)
<TABLE>
<CAPTION>
1993 1994
=================== ==================================================================
4TH QTR % OF 1ST QTR % OF % CHG FROM 2ND QTR % OF % CHG FROM
REVENUES TOTAL TOTAL 4TH QTR 93 TOTAL 1ST QTR 94
- - - -------- ------------------- ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OWNED HEALTH PLANS $ 735,950 88.9% $ 803,251 88.9% 9.1% $ 831,819 88.5% 3.6%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 127,044 15.4% 149,824 16.6% 17.9% 133,892 (1) 14.3% -10.6%
CORPORATE, ELIMINATIONS AND OTHER (35,394) -4.3% (49,519) -5.5% -- (26,246) -2.8% --
------------------- ------------------------------------------------------------------
TOTAL REVENUE $ 827,600 100.0% $ 903,556 100.0% 9.2% $ 939,465 100.0% 4.0%
=================== ==================================================================
OPERATING INCOME
- - - ----------------
OWNED HEALTH PLANS $ 65,511 69.5% $ 82,651 72.1% 26.2% $ 85,231 69.5% 3.1%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 21,585 22.9% 23,443 20.4% 8.6% 19,687 (1) 16.0% -16.0%
CORPORATE, ELIMINATIONS AND OTHER 7,182 7.6% 8,615 7.5% 20.0% 17,735 14.5% --
------------------- ------------------------------------------------------------------
TOTAL OPERATING INCOME $ 94,278 100.0% $ 114,709 100.0% 21.7% $ 122,653 100.0% 6.9%
=================== ==================================================================
OPERATING MARGIN
- - - ----------------
OWNED HEALTH PLANS 8.9% 10.3% 10.2%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 17.0% 15.6% 14.7%(1)
------------ ------------ --------------
TOTAL OPERATING MARGIN 11.4% 12.7% 13.1%
============ ============ ==============
FOR INFORMATION PURPOSES ONLY
- - - -----------------------------
INVESTMENT INCOME INCLUDED IN LINE OF BUSINESS ABOVE:
OWNED HEALTH PLANS $ 7,773 $ 7,869 1.2% $ 8,471 7.7%
CORPORATE, ELIMINATIONS AND OTHER 9,257 9,274 0.2% 17,740 91.3%
------------------- ------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 17,030 $ 17,143 0.7% $ 26,211 52.9%
=================== ==================================================================
RATIOS
- - - ------
COMBINED SG & A RATIO (2) 12.2% 10.9% 10.9%
HEALTH PLAN MEDICAL LOSS RATIO (3) 80.0% 79.5% 79.1%
<CAPTION>
1994
=======================================================================================
3RD QTR % OF % CHG FROM 4TH QTR % OF % CHG FROM % CHG FROM
REVENUES TOTAL 2ND QTR 94 TOTAL 3RD QTR 94 4TH QTR 94
- - - -------- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OWNED HEALTH PLANS $ 852,746 89.1% 2.5% $ 870,730 89.9% 2.1% 18.3%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 86,392 (1) 9.0% -35.5% 86,001 (1) 8.9% -0.5% -32.3%
CORPORATE, ELIMINATIONS AND OTHER 17,696 1.9% -- 12,296 1.2% -- --
---------------------------------------------------------------------------------------
TOTAL REVENUE $ 956,834 100.0% 1.8% $ 969,027 100.0% 1.3% 17.1%
=======================================================================================
OPERATING INCOME
- - - ----------------
OWNED HEALTH PLANS $ 88,141 67.0% 3.4% $ 96,038 70.0% 9.0% 46.6%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 14,242 (1) 10.8% -27.7% 14,622 (1) 10.7% 2.7% -32.3%
CORPORATE, ELIMINATIONS AND OTHER 29,081 22.1% -- 26,561 19.3% -8.7% --
---------------------------------------------------------------------------------------
TOTAL OPERATING INCOME $ 131,464 100.0% 7.2% $ 137,221 100.0% 4.4% 45.5%
=======================================================================================
OPERATING MARGIN
- - - ----------------
OWNED HEALTH PLANS 10.3% 11.0%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 16.5%(1) 17.0%(1)
-------------- --------------
TOTAL OPERATING MARGIN 13.7% 14.2%
============== ==============
FOR INFORMATION PURPOSES ONLY
- - - -----------------------------
INVESTMENT INCOME INCLUDED IN LINE OF BUSINESS ABOVE:
OWNED HEALTH PLANS $ 8,447 -0.3% $ 9,906 17.3% 27.4%
CORPORATE, ELIMINATIONS AND OTHER 30,339 71.0% 25,982 -14.4% 180.7%
---------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 38,786 48.0% $ 35,888 -7.5% 110.7%
=======================================================================================
RATIOS
- - - ------
COMBINED SG & A RATIO (2) 10.6% 10.3%
HEALTH PLAN MEDICAL LOSS RATIO (3) 79.4% 79.1%
</TABLE>
Note: All periods presented have been restated to include the results of HMO
America, Inc., Ramsay HMO Inc., and Complete Health Services Inc. in
accordance with pooling of interests accounting. UHC and HMO America
merged on August 31, 1993. The Ramsay and Complete mergers occurred on
May 31, 1994.
(1) Excludes the post disposition results of Diversified Pharmaceutical
Services, which was sold on May 27, 1994.
(2) Total selling, general & administrative expense for Owned and Managed
Health Plans as a percent of combined premium revenue for Owned and Managed
Health Plans.
(3) Ratio for owned health plans only.
<PAGE>
SCHEDULE E
UNITED HEALTHCARE CORPORATION
QUARTERLY ANALYSIS
BALANCE SHEET
(Unaudited)
(000's)
<TABLE>
<CAPTION>
SUMMARY BALANCE SHEET 12/31/91 12/31/92 (1) 03/31/93 (2) 06/30/93 09/30/93
- - - --------------------- ----------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
CASH & SHORT-TERM INVESTMENTS $ 341,404 $ 411,716 $ 340,737 $ 263,282 $ 238,121
OTHER CURRENT ASSETS 103,253 125,780 172,342 198,358 197,715
LONG-TERM INVESTMENTS 171,853 480,663 551,825 655,871 724,883
OTHER LONG-TERM ASSETS 184,963 303,015 400,097 407,384 414,270
----------- ----------- ----------- ----------- -----------
TOTAL ASSETS $ 801,473 $ 1,321,174 $ 1,465,001 $ 1,524,895 $ 1,574,989
=========== =========== =========== =========== ===========
MEDICAL SERVICES PAYABLE $ 223,741 $ 328,592 $ 391,625 $ 398,587 $ 401,578
UNEARNED PREMIUMS 42,343 60,808 30,308 32,293 20,456
OTHER CURRENT LIABILITIES 64,603 81,240 126,987 122,879 121,025
TAXES PAYABLE - GAIN ON SALE OF SUBSIDIARY -- -- -- -- --
OTHER LONG-TERM LIABILITIES 41,649 24,132 42,044 41,032 40,095
----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES 372,336 494,772 590,964 594,791 583,154
MINORITY INTERESTS 2,341 3,499 4,103 3,091 3,536
SHAREHOLDERS' EQUITY 426,796 822,903 869,934 927,013 988,299
----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES & EQUITY $ 801,473 $ 1,321,174 $ 1,465,001 $ 1,524,895 $ 1,574,989
=========== =========== =========== =========== ===========
<CAPTION>
SUMMARY BALANCE SHEET 12/31/93 03/31/94 06/30/94 (3) 09/30/94 12/31/94
- - - --------------------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
CASH & SHORT-TERM INVESTMENTS $ 400,870 $ 377,628 $ 2,347,177 $ 1,843,727 $ 1,654,336
OTHER CURRENT ASSETS 213,098 231,924 238,019 218,874 253,879
LONG-TERM INVESTMENTS 713,879 789,710 1,018,719 1,000,721 1,093,132
OTHER LONG-TERM ASSETS 459,507 485,261 462,477 465,735 488,132
----------- ----------- ----------- ----------- -----------
TOTAL ASSETS $ 1,787,354 $ 1,884,523 $ 4,066,392 $ 3,529,057 $ 3,489,479
=========== =========== =========== =========== ===========
MEDICAL SERVICES PAYABLE $ 459,201 $ 455,627 $ 441,043 $ 437,174 $ 443,559
UNEARNED PREMIUMS 70,844 76,174 31,018 68,300 70,718
OTHER CURRENT LIABILITIES 128,689 149,624 155,486 120,899 134,025
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
----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES 697,833 719,684 1,463,428 822,087 688,577
MINORITY INTERESTS 4,111 4,788 5,048 5,197 5,446
SHAREHOLDERS' EQUITY 1,085,410 1,160,051 2,597,916 2,701,773 2,795,456
----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES & EQUITY $ 1,787,354 $ 1,884,523 $ 4,066,392 $ 3,529,057 $ 3,489,479
=========== =========== =========== =========== ===========
</TABLE>
Note: All periods presented have been restated to include the results of HMO
America, Inc., and Complete Health Services Inc. in accordance with
pooling of interests accounting. UHC and HMO America merged on August 31,
1993. The Ramsay and Complete mergers occurred on May 31, 1994.
(1) Physicians Health Plan of Ohio, Inc. (Columbus, OH) was acquired in
January, 1992. Also, the Company completed a public offering of 5,000,000
shares of common stock in March, 1992, raising net proceeds of
approximately $196,000,000.
(2) Western Ohio HealthCare Corporation (Dayton, OH) was acquired in January,
1993.
(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 $7.86 EPS.
<PAGE>
SCHEDULE F
UNITED HEALTHCARE CORPORATION
QUARTERLY TREND ANALYSIS
ENROLLMENT
<TABLE>
<CAPTION>
% CHANGE % CHANGE
DEC JAN DEC JAN DEC 93 to JAN 94 to
HEALTH PLANS 1993 1994 1994 1995(2) DEC 94 JAN 95
- - - -------------------------------------------- ---------- ---------- ---------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
OWNED (1) - COMMERCIAL 1,521,000 1,639,000 1,791,000 2,133,000 17.8% 30.1.%
- MEDICARE 98,000 98,000 109,000 111,000 11.2% 13.3%
- MEDICAID 239,000 239,000 285,000 291,000 19.2% 21.8%
---------- ---------- ---------- ---------- --------- ---------
TOTAL OWNED 1,858,000 1,976,000 2,185,000 2,535,000 17.6% 28.3%
MANAGED - COMMERCIAL 852,000 871,000 940,000 1,012,000 10.3% 16.2%
- MEDICARE 79,000 79,000 77,000 77,000 -2.5% -2.5%
- MEDICAID 46,000 45,000 47,000 50,000 2.2% 11.1%
---------- ---------- ---------- ---------- --------- ---------
TOTAL MANAGED 977,000 995,000 1,064,000 1,139,000 8.9% 14.5%
TOTAL - COMMERCIAL 2,373,000 2,510,000 2,731,000 3,145,000 15.1% 25.3%
- MEDICARE 177,000 177,000 186,000 188,000 5.1% 6.2%
- MEDICAID 285,000 284,000 332,000 241,000 16.5% 20.1%
---------- ---------- ---------- ---------- --------- ---------
TOTAL HEALTH PLANS 2,835,000 2,971,000 3,249,000 3,674,000 14.6% 23.7%
========== ========== ========== ========== ========= =========
SPECIALTY MANAGED CARE SERVICES COMPANIES
- - - --------------------------------------------
UNITED BEHAVIORAL SYSTEMS 2,373,000 2,618,000 2,962,000 3,074,000 24.8% 17.4%
HEALTHMARC 1,863,000 1,863,000 2,144,000 2,235,000 15.1% 20.0%
UNITED RESOURCE NETWORKS 12,885,000 13,087,000 15,633,000 15,986,000 21.3% 22.2%
INSTITUTE FOR HUMAN RESOURCES 2,078,000 2,385,000 2,585,000 2,804,000 24.4% 17.6%
</TABLE>
(1) Consistent with pooling accounting, all periods presented have been
restated to include the enrollment of HMO America, Inc., Ramsay HMO Inc.,
and Complete Health Services Inc. UHC and HMO America merged on August 31,
1993. The Ramsay and Complete mergers occurred on May 31, 1994.
(2) Includes GenCare enrollment only for the January 1995 period (230,000
enrollees). GenCare Health Systems was acquired on January 4, 1995.
Consistent with purchase accounting, no prior period restatements were
reflected on this schedule.
Total GenCare enrollment in December 1993, January 1994 and December 1994
was 150,000, 175,000 and 198,000 enrollees, respectively.
