UnitedHealth Group (UNH)

Income Taxes

The decrease in our effective income tax rate was primarily due to lower earnings resulting in an increased proportion of tax-free investment income to total earnings.

Income Taxes

Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting bases of assets and liabilities based on enacted tax rates and laws. The deferred income tax provision or benefit generally reflects the net change in deferred income tax assets and liabilities during the year, excluding any deferred income tax assets and liabilities of acquired businesses. The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the year reported.

Income Taxes

Our effective income tax rate was 35.8% and 35.7% for the three and nine months ended September 30, 2008, respectively, as compared to 36.3% and 36.6% for the comparable 2007 periods, primarily due to lower earnings resulting in an increased proportion of tax-free investment income to total earnings.

Income Taxes

Our effective income tax rate was 33.8% and 35.6% for the three and six months ended June 30, 2008, respectively, as compared to 36.7% in both comparable 2007 periods, primarily due to lower earnings resulting in an increased proportion of tax-free investment income to total earnings.

Income Taxes

Our effective income tax rate was 36.2% in the March 2008 quarter as compared to 36.8% in the comparable 2007 period, primarily due to state tax matters.

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Income Taxes

Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting bases of assets and liabilities based on enacted tax rates and laws. The deferred income tax provision or benefit generally reflects the net change in deferred income tax assets and liabilities during the year, excluding any deferred income tax assets and liabilities of acquired businesses. The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the year reported.

Income Taxes

Our effective income tax rate for the three months ended September 30, 2007 was 36.3% compared to 35.9% for the comparable 2006 period. Our effective income tax rate for the nine months ended September 30, 2007 was 36.6% compared to 36.2%, for the comparable 2006 period. These rates reflect changes in business and income mix in states with differing income tax rates, as well as a decrease in the benefit related to tax-exempt interest.

Income Taxes

Our effective income tax rate for the three months ended June 30, 2007 was essentially flat at 36.7% compared to 36.8% for the comparable 2006 period. Our effective income tax rate for the six months ended June 30, 2007 and 2006 was 36.7% and 36.4%, respectively. The increase was largely due to business and income mix in states with differing income tax rates, as well as a decrease in tax-exempt interest.

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Income Taxes

Our effective income tax rate increased to 36.8% in the first quarter of 2007 from 35.9% for the first quarter of 2006 largely due to business and income mix in states with differing income tax rates.

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Income Taxes

Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting bases of assets and liabilities based on enacted tax rates and laws. The deferred income tax provision or benefit generally reflects the net change in deferred income tax assets and liabilities during the year, excluding any deferred income tax assets and liabilities of acquired businesses. The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the year reported.

Income Taxes

Our effective income tax rate for the three and nine months ended September 30, 2006 was 35.9% and 36.2%, respectively, compared to 36.6% and 36.3% in the comparable 2005 periods. The decrease was primarily driven by favorable settlements of prior year tax returns during 2006.

Income Taxes

Our effective income tax rate was 35.9% in each of the first quarters of 2006 and 2005.

Income Taxes

Our effective income tax rate for the three and six months ended June 30, 2006 was 36.8% and 36.4%, respectively, compared to 36.3% and 36.1% in the comparable 2005 periods. The increase was mainly driven by the acquisition of PacifiCare which increased our business and income mix in states with higher income tax rates.

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Income Taxes

Our effective income tax rate was 36.0% in the first quarter of 2006 and 35.4% in the first quarter of 2005. The increase is mainly driven by the acquisition of PacifiCare which changed our business and income mix between states with differing income tax rates.

Income Taxes

Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting bases of assets and liabilities based on enacted tax rates and laws. The deferred income tax provision or benefit generally reflects the net change in deferred income tax assets and liabilities during the year, excluding any deferred income tax assets and liabilities of acquired businesses. The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the year reported.

Income Taxes

Our effective income tax rate for the three and nine months ended September 30, 2005 was 36.0% and 35.7% compared to 34.0% and 34.6% in the comparable 2004 periods. The increase was mainly driven by changes in business and income mix between states with differing income tax rates, as well as favorable settlements of prior year tax returns during 2004. Excluding these settlements, the effective tax rate would have been approximately 35.0% for both the three and nine months ended September 30, 2004.

Income Taxes

Our effective income tax rate for the three and six months ended June 30, 2005 was 35.5% compared to 35.0% in the comparable 2004 periods. The increase is mainly driven by changes in business and income mix between states with differing income tax rates.

Income Taxes

Our effective income tax rate was 35.5% in the first quarter of 2005 and 35.0% in the first quarter of 2004. The increase is mainly driven by changes in business and income mix between states with differing income tax rates.

¹Management believes disclosure of the medical care ratio excluding the AARP business is meaningful since underwriting gains or losses related to the AARP business accrue to the overall benefit of the AARP policyholders through a rate stabilization fund (RSF). Although the company is at risk for underwriting losses to the extent cumulative net losses exceed the balance in the RSF, we have not been required to fund any underwriting deficits to date, and management believes the RSF balance is sufficient to cover potential future underwriting or other risks associated with the contract during the foreseeable future.

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Income Taxes

Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting bases of assets and liabilities based on enacted tax rates and laws. The deferred income tax provision or benefit generally reflects the net change in deferred income tax assets and liabilities during the year, excluding any deferred income tax assets and liabilities of acquired businesses. The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the year reported.