UnitedHealth Group (UNH)

Recent Developments

During the third quarter, Specialized Care Services and its individual businesses were rebranded as OptumHealth. OptumHealth’s customers include health plans, the public sector and employer groups. The rebranding allows OptumHealth to represent its broad capabilities to the external market and reinforce its ability to create relationships to improve overall health and well-being.

On October 3, 2007, we entered into four agreements with AARP that amended our existing AARP arrangements and incorporated many of the terms of the April 13, 2007 AARP agreement. These agreements extended our arrangements with AARP on the Supplemental Health Insurance Program to December 31, 2017, extended our arrangement with AARP on the Medicare Part D business to December 31, 2014, and gave us an exclusive right to use the AARP brand on our Medicare Advantage offerings until December 31, 2014, subject to certain limited exclusions.

On October 30, 2007, our Board of Directors renewed and increased the Company’s common stock repurchase program, under which up to 210 million shares of our common stock may now be repurchased.

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Recent Developments

Key Business Developments

The results of PacifiCare Health Systems, Inc. (“PacifiCare”), which we acquired in December 2005 for total cash and stock consideration of approximately $8.8 billion, were included for the full year 2006. This acquisition significantly strengthened our resources by enhancing our capabilities on the Pacific Coast and in other Western states and broadening the scope of our product offerings for a host of specialized services.

On January 1, 2006, we began serving as a plan sponsor offering Medicare Part D prescription drug insurance coverage under a contract with the Centers for Medicare & Medicaid Services (CMS). As of December 31, 2006, we had enrolled approximately 5.7 million members in the Part D program, including approximately 4.5 million in the stand-alone prescription drug plans and approximately 1.2 million in Medicare Advantage plans incorporating Part D coverage.

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Senior Leadership Changes

During 2006, we made significant changes in our senior management personnel and in the structure and responsibilities of senior management positions, including the following:

Business Organization Changes

Consistent with the structural changes to the Company’s executive management, we began transitioning our operating structure into the following three new market groups in 2007:

This initial operating structure will continue to evolve as we add new executive positions and realign enterprise-wide functions to strengthen our capabilities and performance. We have not currently realigned assets or changed the way our senior executives evaluate financial performance. Therefore, until we have completed the transition of our operating structure into the new market groups, we will continue to describe and report our results of operations in our earnings releases and SEC filings (including this Form 10-K) using the four business segments described in “ — Overview” above.

Executive Compensation and Corporate Governance

In addition to the senior leadership and business organization changes, our Board of Directors implemented a number of significant changes in the areas of executive compensation (including controls over equity awards) and corporate governance. The “Compensation Discussion and Analysis” and “Corporate Governance” sections of our Definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 29, 2007 will contain a detailed description of these changes. See also Item 9A of this Form 10-K for a discussion of the remediation of our internal control over financial reporting solely relating to stock option plan administration and accounting for and disclosure of stock option grants.

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