<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): MAY 4, 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 May 4, 1995, the Registrant announced its financial results for the first
quarter ended March 31, 1995.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
- ----------------------------------------------------------------------------
(c) Exhibits
- --- --------
Exhibit 99.1- United HealthCare Corporation Press Release, dated May 4,
1995.
Exhibit 99.2 - Supplemental Financial Schedules related to financial
results for the first quarter ended March 31, 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: May 4, 1995
3
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page No.
- -------------- ----------- --------
99.1 United HealthCare Corporation Press Release dated 5
May 4, 1995.
99.2 Supplemental Financial Schedules related to financial 11
results for the first quarter ended March 31, 1995.
4
<PAGE>
CONTACTS: David Koppe, CFO
(612) 936-7211
Bernard McDonagh
Vice President, Investor Relations
(612) 936-7214
Noreen Conway, Vice President
Public Relations &
Communications
(612) 936-1126
(For Immediate Release)
UNITED HEALTHCARE REPORTS STRONG FIRST QUARTER RESULTS
EARNINGS GROWTH DRIVEN BY STRONG ENROLLMENT GAINS,
CONTINUED CONTROL OF MEDICAL EXPENSES
MEDICAL LOSS RATIO DECLINES TO 78.0 PERCENT
MINNEAPOLIS (May 4, 1995) -- United HealthCare Corporation (NYSE:UNH) today
announced record earnings for the first quarter ended March 31, 1995.
First quarter net earnings were $89.4 million, up 27.0 percent from net
earnings of $70.4 million for last year's first quarter, with earnings per share
of $0.51, a 27.5 percent increase over $0.40 reported for the first quarter of
1994. Revenues for the first quarter were $1.104 billion, a 22.2 percent
increase over the $903.6 million reported for first quarter 1994.
The company's first quarter 1995 medical loss ratio (medical costs as a
percent of premium revenues) was 78.0 percent. This was down sequentially from
both the 78.1 percent reported for the fourth quarter 1994 and the 78.2 percent
reported for the same
(more)
<PAGE>
United HealthCare Corporation
First Quarter Results
May 4, 1995 -- p. 2
period one year ago. These results are especially positive considering that
historically the company has experienced higher medical utilization in the first
quarter.
United HealthCare Chairman and CEO William W. McGuire, M.D., said, "We are
pleased with our continuing success at controlling medical costs, realizing good
operating margins and sustaining strong growth. The company's discipline of
effectively managing its costs and pricing to these costs remains intact. We
also believe that the potential for future medical cost reduction is strong in
all of our health plans."
The first quarter of 1995 includes the post-acquisition results of GenCare
Health Systems, Inc. and Group Sales and Service of Puerto Rico, Inc.. These
purchases were completed on January 3 and February 28, 1995, respectively.
ADDITIONAL HIGHLIGHTS
- ---------------------
MEDICAL COSTS. The company saw no unusual increases in its major medical
expense categories in the first quarter of 1995. Hospital utilization, as
measured in bed days per 1000 enrollees, decreased in the aggregate across the
company's owned health plan markets as compared to the first quarter of 1994.
Primary care and specialist physician costs, as well as outpatient costs, also
remained generally stable with the year-ago quarter. Contributing to this
control of medical costs are the company's extended experience with its various
product lines, most of which have been offered for several years; strong market
positions which contribute to favorable long-term contracts; a positive approach
to providers; and its information systems capabilities. "We remain diligent in
monitoring our medical costs and believe that we have identified appropriate
areas for ongoing improvement," said Dr. McGuire.
SG&A COSTS. For the first quarter of 1995, the company's total SG&A costs as a
percent of total revenue were 14.3 percent, down significantly from the 15.9
percent
(more)
<PAGE>
United HealthCare Corporation
First Quarter Results
May 4, 1995 -- p. 3
reported for the first quarter one year ago and up from the 13.5 percent
reported for the fourth quarter of 1994. SG&A costs for owned health plans were
10.8 percent of revenue, down from 10.9 percent for the first quarter of 1994
and up from 10.3 percent for the fourth quarter of 1994. The sequential
increase in these costs for the health plans can be attributed to increased
spending of about $5 million in a number of areas, including spending on
developing Medicare and Medicaid initiatives. In addition, the company is
investing in a variety of new non-health plan endeavors that have not yet
produced significant offsetting revenue. These efforts include managed care
programs for the aged, information services for health care providers, and
international business opportunities. Expenses related to these non-health plan
programs exceeded $5 million, or approximately $0.02 per share, during the first
quarter.
ENROLLMENT. Compared to March 31, 1994, first quarter 1995
enrollment in the company's owned health plans grew by 1,140,400 members
(including acquisitions), or 73.0 percent, ending the quarter at 2,702,000
members. For all health plans owned as of March 31, 1995, internal growth
totalled 379,000 members, or 16.3 percent, for the 12-month period ended
March 31, 1995. While pleased with the first quarter enrollment results, Dr.
McGuire said that the company has not yet benefited from its increased focus on
Medicare or state-led Medicaid initiatives. The company stated that while
uncertainties remain regarding the various states' timing and rate of
implementation of many of the Medicaid programs, it believes that these
programs, coupled with several major commercial accounts recently awarded,
ongoing strength and emerging opportunities in the small-group and point-of-
service products, and the enhanced Medicare efforts, should serve as a base for
strong enrollment growth through the remainder of 1995 and into 1996.
(more)
<PAGE>
United HealthCare Corporation
First Quarter Results
May 4, 1995 -- p. 4
HIGHLIGHTS OF FIRST QUARTER RESULTS
<TABLE>
<CAPTION>
QUARTER
ENDED
-------------------------------------
3/31/94 12/31/94 3/31/95
---------- ---------- ----------
<S> <C> <C> <C>
Premium revenue $805.0 mil $877.3 mil $1.004 bil
Medical loss ratio 78.2% 78.1% 78.0%
(percent of premium rev.)
SG&A (percent of revenue)
Total 15.9% 13.5% 14.3%
Health Plan 10.9% 10.3% 10.8%
Enrollment -- Owned (restated
for pooled acquisitions)
Commercial 1,660,000 1,791,000 2,291,000
Medicare 99,000 109,000 114,000
Medicaid 252,000 285,000 297,000
---------- ---------- ----------
Total Owned 2,011,000 2,185,000 2,702,000
Enrollment -- Managed
Commercial 885,000 940,000 1,033,000
Medicare 78,000 77,000 76,000
Medicaid 45,000 47,000 52,000
---------- ---------- ----------
Total Managed 1,008,000 1,064,000 1,161,000
Total Enrollment 3,019,000 3,249,000 3,863,000
$ (000's)
Cash & Investments $1,192,472 $2,769,390 $2,433,823
Medical Payables $ 455,627 $ 443,559 $ 479,027
Shareholders' Equity $1,160,051 $2,795,456 $2,903,719
</TABLE>
"We are very pleased with our performance this quarter," said Dr.
McGuire. "In the face of minimal premium increases, we have continued to
control our medical costs, resulting in continuation of our pattern of strong
earnings growth. At the same time, we
(more)
<PAGE>
United HealthCare Corporation
First Quarter Results
May 4, 1995 -- p. 5
continue to commit significant personnel resources and dollars to new product
opportunities which we believe hold significant opportunity for the company.
This approach of new business development coupled with ongoing efforts to
improve our existing products and services should help us continue to realize
long-term growth and superior performance."
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 3.8
million, and its non-geographically bounded specialty care management companies,
which serve the needs of an additional 25 million-plus lives.
# # # # #
<PAGE>
UNITED HEALTHCARE CORPORATION
EARNINGS REPORT*
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1995 MARCH 31, 1994
-------------- --------------
<S> <C> <C>
Revenues $1,103,835 $903,556
Net earnings $ 89,432 $ 70,398
Net earnings per share $ 0.51 $ 0.40
Average number of
common shares outstanding 176,403 174,507
</TABLE>
* The financial information for the quarter ended March 31, 1994, has been
restated to 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. First quarter 1995 results
include the post-acquisition results of GenCare and Group Sales and Services of
Puerto Rico, purchased on January 3 and February 28, respectively.
<PAGE>
SCHEDULE A
UNITED HEALTHCARE CORPORATION
QUARTERLY ANALYSIS FOR THE QUARTER ENDED 03/31/95
(Unaudited) (000's)
<TABLE>
<CAPTION>
% CHANGE
3 MONTHS ENDED % 3 MONTHS ENDED % 03/31/94 to
03/31/95 (2) REVENUE 03/31/94 REVENUE 03/31/95
-------------- ------- -------------- ------- -----------
<S> <C> <C> <C> <C> <C>
REVENUES:
PREMIUM ......................................... $1,004,489 91.0% $804,991 89.1% 24.8%
MANAGEMENT SERVICES ............................. 65,224 5.9% 81,422 9.0% (19.9%)
INVESTMENT INCOME................................ 34,122 3.1% 17,143 1.9% 99.0%
---------- ------ -------- ------ ------
TOTAL REVENUES ................................ 1,103,835 100.0% 903,556 100.0% 22.2%
---------- ------ -------- ------ ------
OPERATING EXPENSES:
MEDICAL COSTS (1) ............................... 783,501 78.0%(1) 629,578 78.2%(1) 24.4%
SELLING, GENERAL & ADMINISTRATION ............... 157,578 14.3% 143,366 15.9% 9.9%
DEPRECIATION & AMORTIZATION ..................... 19,665 1.8% 15,903 1.8% 23.7%
---------- ------ -------- ------ ------
TOTAL OPERATING EXPENSES ...................... 960,744 87.0% 788,847 87.3% 21.8%
---------- ------ -------- ------ ------
EARNINGS FROM OPERATIONS ............................ 143,091 13.0% 114,709 12.7% 24.7%
INTEREST EXPENSE .................................... (180) (568) (68.3%)
---------- -------- ------
EARNINGS BEFORE INCOME TAXES AND MINORITY
INTERESTS.......................................... 142,911 114,141 25.2%
PROVISION FOR INCOME TAXES .......................... (52,878) (43,067) 22.8%
MINORITY INTERESTS .................................. (601) (676) (11.1%)
---------- -------- ------
NET EARNINGS ........................................ $ 89,432 $ 70,398 27.0%
========== ======== ======
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING: 176,403 174,507 1.1%
========== ======== ======
EARNINGS PER SHARE: $ 0.51 $ 0.40 27.5%
========== ======== ======
</TABLE>
Note: All periods presented have been restated to 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) 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.
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE B
UNITED HEALTHCARE CORPORATION
QUARTERLY TREND ANALYSIS
(Unaudited)
(000's)
% CHG FROM
1ST QTR % 2ND QTR % 1ST QTR 3RD QTR
1994 REVENUE 1994 REVENUE 1994 1994
-------- ------- -------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
PREMIUM.................................... $804,991 89.1% $ 835,702 89.0% 3.8% $858,226
MANAGEMENT SERVICES ....................... 81,422 9.0% 77,552 8.2% (4.8%) 59,820
INVESTMENT INCOME.......................... 17,143 1.9% 26,211 2.8% 52.9% 38,786
-------- ------ ---------- ------ ---------- --------
TOTAL REVENUES............................. 903,556 100.0% 939,465 100.0% 4.0% 956,834
-------- ------ ---------- ------ ---------- --------
OPERATING EXPENSES:
MEDICAL COSTS (1) ......................... 629,578 78.2%(1) 652,266 78.1%(1) 3.6% 675,650
SELLING, GENERAL & ADMIN................... 143,366 15.9% 148,168 15.8% 3.3% 133,462
DEPRECIATION & AMORT....................... 15,903 1.8% 16,378 1.7% 3.0% 16,258
-------- ------ ---------- ------ ---------- --------
TOTAL OPERATING EXPENSES................... 788,847 87.3% 816,812 86.9% 3.5% 825,370
-------- ------ ---------- ------ ---------- --------
EARNINGS FROM OPERATIONS...................... 114,709 12.7% 122,653 13.1% 6.9% 131,464
INTEREST EXPENSE.............................. (568) (569) 0.2% (413)
MERGER COSTS (2) ............................ -- (35,940)(2) -- --
-------- ---------- ---------- --------
EARNINGS BEFORE INCOME TAXES, MINORITY
INTERESTS AND EXTRAORDINARY GAIN............. 114,141 86,144 (24.5%) 131,051
PROVISION FOR INCOME TAXES.................... (43,067) (33,031) (23.3%) (49,810)
MINORITY INTERESTS............................ (676) (457) -- (399)
-------- ---------- ---------- --------
NET EARNINGS BEFORE EXTRAORDINARY GAIN........ 70,398 52,656(2) See Note(2) 80,842
EXTRAORDINARY GAIN ON SALE OF SUBSIDIARY,
NET OF INCOME TAXES OF $808,758 (3).......... -- 1,377,075(3) --
-------- ---------- --------
NET EARNINGS ................................. $ 70,398 $1,429,731 $ 80,842
======== ========== ========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING: 174,507 175,490 0.6% 176,038
======== ========== ========== ========
EARNINGS PER SHARE:
NET EARNINGS BEFORE EXTRAORDINARY GAIN (2) $ 0.40 $ 0.30(2) See Note(2) $ 0.46
EXTRAORDINARY GAIN (3) -- 7.85(3) --
-------- ---------- --------
NET EARNINGS PER SHARE $ 0.40 $ 8.15 $ 0.46
======== ========== ========
</TABLE>
<TABLE>
<CAPTION>
% CHG FROM % CHG FROM
% 2ND QTR 4TH QTR % 3RD QTR 1ST QTR
REVENUE 1994 1994 REVENUE 1994 1995(4)
-------- ---------- -------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
PREMIUM.................................... 89.7% 2.7% $ 877,317 90.5% 2.2% $1,004,489
MANAGEMENT SERVICES ....................... 6.3% (22.9%) 55,822 5.8% (6.7%) 65,224
INVESTMENT INCOME.......................... 4.0% 48.0% 35,888 3.7% (7.5%) 34,122
-------- ---------- ---------- ------ ---------- ----------
TOTAL REVENUES............................. 100.0% 1.8% 969,027 100.0% 1.3% 1,103,835
-------- ---------- ---------- ------ ---------- --------
OPERATING EXPENSES:
MEDICAL COSTS (1) ......................... 78.7%(1) 3.6% 685,613 78.1%(1) 1.5% 783,501
SELLING, GENERAL & ADMIN................... 13.9% (9.9%) 130,653 13.5% (2.1%) 157,578
DEPRECIATION & AMORT....................... 1.7% (0.7%) 15,540 1.6% (4.4%) 19,665
-------- ---------- ---------- ------ ---------- --------
TOTAL OPERATING EXPENSES................... 86.3% 1.0% 831,806 85.8% 0.8% 960,744
-------- ---------- ---------- ------ ---------- --------
EARNINGS FROM OPERATIONS...................... 13.7% 7.2% 137,221 14.2% 4.4% 143,091
INTEREST EXPENSE.............................. (27.4%) (613) 48.4% (180)
MERGER COSTS (2) ............................ -- -- -- --
---------- ---------- ---------- --------
EARNINGS BEFORE INCOME TAXES, MINORITY
INTERESTS AND EXTRAORDINARY GAIN............. 52.1% 136,608 4.2% 142,911
PROVISION FOR INCOME TAXES.................... 50.8% (51,914) 4.2% (52,878)
MINORITY INTERESTS............................ -- (451) -- (601)
---------- ---------- ---------- --------
NET EARNINGS BEFORE EXTRAORDINARY GAIN........ See Note(2) 84,243 4.2% 89,432
EXTRAORDINARY GAIN ON SALE OF SUBSIDIARY,
NET OF INCOME TAXES OF $808,758 (3).......... -- --
---------- --------
NET EARNINGS ................................. $ 84,243 4.2% $ 89,432
========== ========== ========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING: 0.3% 176,573 0.3% 176,403
========== ========== ========== ========
EARNINGS PER SHARE:
NET EARNINGS BEFORE EXTRAORDINARY GAIN (2) See Note(2) $ 0.48 4.3% $ 0.51
EXTRAORDINARY GAIN (3) -- --
---------- --------
NET EARNINGS PER SHARE $ 0.48 $ 0.51
========== ========
</TABLE>
<TABLE>
<CAPTION>
% CHG FROM
% 4TH QTR
REVENUE 1994
-------- ----------
<S> <C> <C>
REVENUES:
PREMIUM.................................... 91.0% 14.5%
MANAGEMENT SERVICES ....................... 5.9% 16.8%
INVESTMENT INCOME.......................... 3.1% (4.9%)
-------- ------
TOTAL REVENUES............................. 100.0% 13.9%
-------- ------
OPERATING EXPENSES:
MEDICAL COSTS (1) ......................... 78.0%(1) 14.3%
SELLING, GENERAL & ADMIN................... 14.3% 20.6%
DEPRECIATION & AMORT....................... 1.8% 26.5%
-------- ------
TOTAL OPERATING EXPENSES................... 87.0% 15.5%
-------- ------
EARNINGS FROM OPERATIONS...................... 13.0% 4.3%
INTEREST EXPENSE.............................. (70.6%)
MERGER COSTS (2) ............................ --
------
EARNINGS BEFORE INCOME TAXES, MINORITY
INTERESTS AND EXTRAORDINARY GAIN............. 4.6%
PROVISION FOR INCOME TAXES.................... 1.9%
MINORITY INTERESTS............................ --
------
NET EARNINGS BEFORE EXTRAORDINARY GAIN........ 6.2%
EXTRAORDINARY GAIN ON SALE OF SUBSIDIARY,
NET OF INCOME TAXES OF $808,758 (3)..........
NET EARNINGS ................................. 6.2%
======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING: (0.1%)
======
EARNINGS PER SHARE:
NET EARNINGS BEFORE EXTRAORDINARY GAIN (2) 6.3%
EXTRAORDINARY GAIN (3)
NET EARNINGS PER SHARE
</TABLE>
[FN]
Note: All periods presented have been restated to 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.
<PAGE>
SCHEDULE C
UNITED HEALTHCARE CORPORATION
QUARTERLY ANALYSIS FOR THE QUARTER ENDED 03/31/95
LINE OF BUSINESS SUMMARY
(Unaudited)
(000's)
<TABLE>
<CAPTION>
% CHANGE
3 MONTHS ENDED % 3 MONTHS ENDED % 03/31/94 to
03/31/95 (1) OF TOTAL 03/31/94 OF TOTAL 03/31/95
-------------- -------- -------------- -------- -----------
<S> <C> <C> <C> <C> <C>
REVENUES
- --------
OWNED HEALTH PLANS $1,005,782 91.1% $803,251 88.9% 25.2%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES 92,812(2) 8.4% 149,824 16.6% (38.1%)(2)
CORPORATE, ELIMINATIONS AND OTHER 5,241 0.5% (49,519) (5.5%) --
---------- ------ -------- ------ ------
TOTAL REVENUE $1,103,835 100.0% $903,556 100.0% 22.2%
========== ====== ======== ====== ======
OPERATING INCOME
- ----------------
OWNED HEALTH PLANS $ 107,145 74.9% $ 82,651 72.1% 29.6%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES 17,176(2) 12.0% 23,443 20.4% (26.7%)(2)
CORPORATE, ELIMINATIONS AND OTHER 18,770 13.1% 8,615 7.5% --
---------- ------ -------- ------ ------
TOTAL OPERATING INCOME $ 143,091 100.0% $114,709 100.0% 24.7%
========== ====== ======== ====== ======
OPERATING MARGIN
- ----------------
OWNED HEALTH PLANS 10.7% 10.3%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES 18.5% 15.6%
---------- --------
TOTAL OPERATING MARGIN 13.0% 12.7%
========== ========
</TABLE>
Note: All periods presented have been restated to 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>
SCHEDULE D
UNITED HEALTHCARE CORPORATION
LINE OF BUSINESS SUMMARY - HISTORY
(000's)
<TABLE>
<CAPTION>
1994
===================================================================================
1ST QTR % OF 2ND QTR % OF % CHG FROM 3RD QTR % OF % CHG FROM
TOTAL TOTAL 1ST QTR 94 TOTAL 2ND QTR 94
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES
OWNED HEALTH PLANS $803,251 88.9% $831,819 88.5% 3.6% $852,746 89.1% 2.5%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 149,824 16.6% 133,892(1) 14.3% (10.6%) 86,392(1) 9.0% (35.5%)
CORPORATE, ELIMINATIONS AND OTHER (49,519) (5.5%) (26,246) (2.8%) ------ 17,696 10.9% ------
-----------------------------------------------------------------------------------
TOTAL REVENUE $903,556 100.0% $939,465 100.0% 4.0% $956,834 100.0% 1.8%
===================================================================================
OPERATING INCOME
OWNED HEALTH PLANS $ 82,651 72.1% $ 85,231 69.5% 3.1% $ 88,141 67.0% 3.4%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 23,443 20.4% 19,687(1) 16.0% (16.0%) 14,242(1) 10.9% (27.7%)
CORPORATE, ELIMINATIONS AND OTHER 8,615 7.5% 17,735 14.5% ------ 29,081 22.1% ------
-----------------------------------------------------------------------------------
TOTAL OPERATING INCOME $114,709 100.0% $122,653 100.0% 6.9% $131,464 100.0% 7.2%
===================================================================================
OPERATING MARGIN
OWNED HEALTH PLANS 10.3% 10.2% 10.3%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 15.6% 14.7%(1) 16.5%(1)
-------- -------- --------
TOTAL OPERATING MARGIN 12.7% 13.1% 13.7%
======== ======== ========
FOR INFORMATION PURPOSES ONLY
- -----------------------------
INVESTMENT INCOME INCLUDED IN LINE OF BUSINESS ABOVE:
OWNED HEALTH PLANS $ 7,869 $ 8,471 7.7% $ 8,447 (0.3%)
CORPORATE, ELIMINATIONS AND OTHER 9,274 17,740 91.3% 30,339 71.0%
-----------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME $ 17,143 $ 26,211 52.9% $ 38,786 48.0%
===================================================================================
RATIOS
- -------------------------------------
COMBINED SG & A RATIO (2) 10.9% 10.9% 10.6%
HEALTH PLAN MEDICAL LOSS RATIO (3) 79.5% 79.1% 79.4%
</TABLE>
<TABLE>
<CAPTION>
1995
================================ =================================================
4TH QTR % OF % CHG FROM 1ST QTR % OF % CHG FROM % CHG FROM
TOTAL 3RD QTR 94 TOTAL 4TH QTR 94 1ST QTR 94
-------------------------------- -------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
OWNED HEALTH PLANS $870,730 89.9% 2.1% $1,005,782(4) 91.1% 15.5% 25.2%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 86,001(1) 8.9% (0.5%) 92,812(1) 8.4% 7.9% (38.1%)
CORPORATE, ELIMINATIONS AND OTHER 12,296 1.2% --------- 5,241 0.5% --------- ---------
-------------------------------- -------------------------------------------------
TOTAL REVENUE $969,027 100.0% 1.3% $1,103,835 100.0% 13.9% 22.2%
================================ =================================================
OPERATING INCOME
OWNED HEALTH PLANS $ 96,038 70.0% 9.0% $ 107,145(4) 74.9% 11.6% 29.6%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 14,622(1) 10.7% 2.7% 17,176(1) 12.0% 17.5% (26.7%)
CORPORATE, ELIMINATIONS AND OTHER 26,561 19.3% --------- 18,770 13.1% --------- ---------
-------------------------------- -------------------------------------------------
TOTAL OPERATING INCOME $137,221 100.0% 4.4% $ 143,091 100.0% 4.3% 24.7%
================================ =================================================
OPERATING MARGIN
OWNED HEALTH PLANS 11.0% 10.7%
MANAGED HEALTH PLAN AND
SPECIALTY SERVICES (1) 17.0%(1) 18.5%
----------- -----------
TOTAL OPERATING MARGIN 14.2% 13.0%
=========== ===========
FOR INFORMATION PURPOSES ONLY
INVESTMENT INCOME INCLUDED IN LINE OF BUSINESS ABOVE:
OWNED HEALTH PLANS 9,906 17.3% $ 12,387 25.0% 57.4%
CORPORATE, ELIMINATIONS AND OTHER 25,982 (14.4%) 21,735 (16.3%) 134.4%
-------------------------------- -------------------------------------------------
TOTAL INVESTMENT INCOME $ 35,888 (7.5%) $ 34,122 (4.9%) 99.0%
================================ =================================================
RATIOS
- ------------------------------------------
COMBINED SG & A RATIO (2) 10.3% 10.8%
HEALTH PLAN MEDICAL LOSS RATIO (3) 79.1% 78.9%
</TABLE>
Note: All periods presented have been restated to 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) 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.
(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.
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE E
UNITED HEALTHCARE CORPORATION
QUARTERLY ANALYSIS
BALANCE SHEET
(Unaudited)
(000's)
SUMMARY BALANCE SHEET 12/31/91 12/31/92(1) 03/31/93(2) 06/30/93 09/30/93 12/31/93
_____________________ --------- ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CASH & SHORT-TERM INVESTMENTS $341,404 $ 411,716 $ 340,737 $ 263,282 $ 238,121 $ 400,870
OTHER CURRENT ASSETS 103,253 125,780 172,342 198,358 197,715 213,098
LONG-TERM INVESTMENTS 174,770 511,860 586,627 691,210 762,939 768,563
OTHER LONG-TERM ASSETS 182,046 271,818 365,295 372,045 376,214 404,823
-------- ---------- ---------- ---------- ---------- ----------
TOTAL ASSETS $801,473 $1,321,174 $1,465,001 $1,524,895 $1,574,989 $1,787,354
======== ========== ========== ========== ========== ==========
MEDICAL SERVICES PAYABLE $223,741 $ 328,592 $ 391,625 $ 398,587 $ 401,578 $ 459,201
UNEARNED PREMIUMS 42,343 60,808 30,308 32,293 20,456 70,844
OTHER CURRENT LIABILITIES/INCOME TAXES PAYABLE 64,603 81,240 126,987 122,879 121,025 128,689
TAXES PAYABLE - GAIN ON SALE OF SUBSIDIARY -- -- -- -- -- --
OTHER LONG-TERM LIABILITIES 41,649 24,132 42,044 41,032 40,095 39,099
-------- ---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES 372,336 494,772 590,964 594,791 583,154 697,833
MINORITY INTERESTS 2,341 3,499 4,103 3,091 3,536 4,111
SHAREHOLDERS' EQUITY 426,796 822,903 869,934 927,013 988,299 1,085,410
-------- ---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES & EQUITY $801,473 $1,321,174 $1,465,001 $1,524,895 $1,574,989 $1,787,354
======== ========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
SUMMARY BALANCE SHEET 03/31/94 06/30/94(3) 09/30/94 12/31/94 03/31/95(4)
_____________________ ---------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
CASH & SHORT-TERM INVESTMENTS $ 377,628 $2,347,177 $1,843,727 $1,654,336 $ 945,073
OTHER CURRENT ASSETS 231,924 238,019 218,874 253,879 276,678
LONG-TERM INVESTMENTS 814,844 1,032,524 1,020,897 1,115,054 1,488,750
OTHER LONG-TERM ASSETS 460,127 448,672 445,559 466,210 990,330
---------- ---------- ---------- ---------- ----------
TOTAL ASSETS $1,884,523 $4,066,392 $3,529,057 $3,489,479 $3,700,831
========== ========== ========== ========== ==========
MEDICAL SERVICES PAYABLE $ 455,627 $ 441,043 $ 437,174 $ 443,559 $ 479,027
UNEARNED PREMIUMS 76,174 31,018 68,300 70,718 87,911
OTHER CURRENT LIABILITIES/INCOME TAXES PAYABLE 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 38,259 27,123 23,956 24,275 25,142
---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES 719,684 1,463,428 822,087 688,577 791,266
MINORITY INTERESTS 4,788 5,048 5,197 5,446 5,846
SHAREHOLDERS' EQUITY 1,160,051 2,597,916 2,701,773 2,795,456 2,903,719
---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES & EQUITY $1,884,523 $4,066,392 $3,529,057 $3,489,479 $3,700,831
========== ========== ========== ========== ==========
</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) 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.
(4) 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>
<TABLE>
<CAPTION>
SCHEDULE F
UNITED HEALTHCARE CORPORATION
QUARTERLY TREND ANALYSIS
ENROLLMENT
DEC JAN MAR DEC
HEALTH PLANS 1993 1994 1994 1994
- ----------------------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
OWNED (1) - COMMERCIAL
INSURED 1,459,000 1,526,000 1,542,000 1,668,000
SELF FUNDED 62,000 113,000 118,000 123,000
---------- ---------- ---------- ----------
TOTAL COMMERCIAL 1,521,000 1,639,000 1,660,000 1,791,000
- MEDICARE 98,000 98,000 99,000 109,000
- MEDICAID 239,000 239,000 252,000 285,000
---------- ---------- ---------- ----------
TOTAL OWNED ENROLLMENT 1,858,000 1,976,000 2,011,000 2,185,000
MANAGED - COMMERCIAL
INSURED 742,000 753,000 760,000 796,000
SELF FUNDED 110,000 118,000 125,000 144,000
---------- ---------- ---------- ----------
TOTAL COMMERCIAL 852,000 871,000 885,000 940,000
- MEDICARE 79,000 79,000 78,000 77,000
- MEDICAID 46,000 45,000 45,000 47,000
---------- ---------- ---------- ----------
TOTAL MANAGED ENROLLMENT 977,000 995,000 1,008,000 1,064,000
TOTAL - COMMERCIAL
INSURED 2,201,000 2,279,000 2,302,000 2,464,000
SELF FUNDED 172,000 231,000 243,000 267,000
---------- ---------- ---------- ----------
TOTAL COMMERCIAL 2,373,000 2,510,000 2,545,000 2,731,000
- MEDICARE 177,000 177,000 177,000 186,000
- MEDICAID 285,000 284,000 297,000 332,000
---------- ---------- ---------- ----------
2,835,000 2,971,000 3,019,000 3,249,000
========== ========== ========== ==========
SPECIALTY MANAGED CARE SERVICES COMPANIES
- -------------------------------------------------------
UNITED BEHAVIORAL SYSTEMS 2,373,000 2,618,000 2,710,000 2,962,000
HEALTHMARC 1,863,000 1,863,000 1,852,000 2,144,000
UNITED RESOURCE NETWORKS 12,885,000 13,087,000 13,289,000 15,633,000
INSTITUTE FOR HUMAN RESOURCES 2,078,000 2,385,000 2,367,000 2,585,000
% CHANGE % CHANGE
JAN MAR DEC 94 to MAR 94 to
HEALTH PLANS 1995 (2) 1995 (3) MAR 95 MAR 95
- ------------------------------------------------------- ----------- ----------- ----------- -----------
OWNED (1) - COMMERCIAL
INSURED 1,940,000 2,094,000 25.5% 35.8%
SELF FUNDED 193,000(2) 197,000 60.2%(2) 66.9%(2)
---------- ---------- ---------- ----------
TOTAL COMMERCIAL 2,133,000 2,291,000 27.9% 38.0%
- MEDICARE 111,000 114,000 4.6% 15.2%
- MEDICAID 291,000 297,000 4.2% 17.9%
---------- ---------- ---------- ----------
TOTAL OWNED ENROLLMENT 2,535,000 2,702,000 23.7% 34.4%
MANAGED - COMMERCIAL
INSURED 845,000 862,000 8.3% 13.4%
SELF FUNDED 167,000 171,000 18.8% 36.8%
---------- ---------- ---------- ----------
TOTAL COMMERCIAL 1,012,000 1,033,000 9.9% 16.7%
- MEDICARE 77,000 76,000 -1.3% -2.6%
- MEDICAID 50,000 52,000 10.6% 15.6%
---------- ---------- ---------- ----------
TOTAL MANAGED ENROLLMENT 1,139,000 1,161,000 9.1% 15.2%
TOTAL - COMMERCIAL
INSURED 2,785,000 2,956,000 20.0% 28.4%
SELF FUNDED 360,000 368,000 37.8% 51.4%
---------- ---------- ---------- ----------
TOTAL COMMERCIAL 3,145,000 3,324,000 21.7% 30.6%
- MEDICARE 188,000 190,000 2.2% 7.3%
- MEDICAID 341,000 349,000 5.1% 17.5%
---------- ---------- ---------- ----------
TOTAL HEALTH PLANS 3,674,000 3,863,000 18.9% 28.0%
========== ========== ========== ==========
SPECIALTY MANAGED CARE SERVICES COMPANIES
_________________________________________
UNITED BEHAVIORAL SYSTEMS 3,074,000 3,228,000 9.0% 19.1%
HEALTHMARC 2,235,000 2,001,000 -6.7% 8.0%
UNITED RESOURCE NETWORKS 15,986,000 16,240,000 3.9% 22.2%
INSTITUTE FOR HUMAN RESOURCES 2,804,000 2,917,000 12.8% 23.2%
(1) Consistent with pooling accounting, all periods presented have been restated to include the enrollment of Ramsay HMO Inc., and
Complete Health Services Inc. The Ramsay and Complete mergers occurred on May 31, 1994.
(2) Includes GenCare Health Systems, Inc. acquired on January 3, 1995. GenCare had 230,000 enrollees (39,800 self funded enrollees)
as of January, 1995. Consistent with purchase accounting, no prior period restatement was made.
(3) Group Sales and Service (133,000 enrollees as of March, 1995) was acquired on February 28, 1995. Consistent with purchase
accounting, no prior restatement was made.
</TABLE>
