UnitedHealth Group (UNH)

Operating Activities

Net cash flows from operating activities totaled $880 million for the six months ended June 30, 2008, as compared to $4.3 billion for the six months ended June 30, 2007, a decrease of $3.4 billion, or 79%. Operating cash flows for the six months ended June 30, 2007 included $1.6 billion for July CMS payments received in June 2007. The remaining decrease reflected the timing of income tax payments of approximately $700 million and the decrease in net earnings.

As discussed in Note 15 of Notes to the Condensed Consolidated Financial Statements, on July 2, 2008, we announced that we had reached an agreement in principle with the lead plaintiff and plaintiff class representative to settle the federal securities class action lawsuit arising from the consolidated amended complaint filed on December 8, 2006 in the U.S. District Court in Minnesota. Under the terms of the proposed settlement, we will pay $895 million into a settlement fund for the benefit of class members in two installments. An installment of $450 million will be deposited into the settlement fund on the earlier of: (i) 10 days following preliminary court

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approval of the settlement or (ii) September 15, 2008. The remaining $445 million settlement amount will be deposited into the settlement fund on the earlier of: (i) 10 days following final non-appealable court approval of the settlement of the claims, (ii) 10 days following execution by the plaintiffs and non-settling defendants of an agreement in principle for the settlement of the claims against the non-settling defendants, or (iii) January 1, 2009.

Operating Activities

Net cash flows from operating activities totaled $280 million for the quarter, as compared to $2.6 billion for the three months ended March 31, 2007, a decrease of $2.3 billion, or 89%. The decrease reflected the early receipt of an April 2007 payment of $1.5 billion from CMS, the timing of payments to our external pharmacy benefit fulfillment partner and the timing of federal program receipts and payments, the impact of which are all expected to reverse over the course of 2008. The decrease also reflected a decrease in consumers served through commercial and Part D risk-based arrangements.

Operating Activities

Net cash flows from operating activities totaled $5.9 billion, $6.5 billion and $4.1 billion for 2007, 2006 and 2005, respectively. Cash from operating activities in 2007 decreased from 2006 by $649 million, or 10%, due to a reduction in working capital cash flows of $1.5 billion partially offset by an increase of $495 million in net income. The decrease in working capital cash flows was driven by lower medical costs payable growth primarily related to Ovations Medicare programs as the 2006 operating cash flows benefited from the initial establishment of the medical costs payable balance related to the Medicare Part D program, fewer income tax refunds received in 2007 as well as larger income tax payments and the timing of certain government payments and receipts. Overall, our receivables and related days sales outstanding increased primarily as a result of these governmental timing differences, while our commercial business receivables remained relatively flat.