<HTML><BODY style="word-wrap: break-word; -khtml-nbsp-mode: space; -khtml-line-break: after-white-space; "><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><A href="http://www.latimes.com/business/la-fi-united15oct15,1,5498105.story?coll=la-headlines-business"><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">http://www.latimes.com/business/la-fi-united15oct15,1,5498105.story?coll=la-headlines-business</SPAN></FONT></A></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" face="Arial" size="5"><SPAN class="Apple-style-span" style="font-size: 18px;"><B>UnitedHealth Earnings Rise 21% as Medical Costs Ease</B></SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">From Reuters</SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><BR></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">October 15, 2005</SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><BR></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Insurer UnitedHealth Group Inc., which is in the process of acquiring PacifiCare Health Systems Inc. of Cypress to augment its position in the Medicare market, reported a 21% rise in third-quarter earnings Friday.</SPAN></FONT><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><BR></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Minnetonka, Minn.-based UnitedHealth credited the increase to membership gains and lower-than-expected medical costs. The company forecast that strong profit growth would continue through 2006 at a clip of at least 15%.</SPAN></FONT><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><BR></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">UnitedHealth predicted that the coming Medicare prescription drug benefit would add 2 million to 3 million new members to its rolls next year, potentially boosting 2006 earnings by 5 cents a share. The company said membership increased to 11.4 million, a gain of 265,000 in the quarter.</SPAN></FONT><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><BR></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Net earnings rose to $842 million, or 64 cents a share, from $698 million, or 52 cents, a year earlier. The results were a penny a share better than the average forecast by analysts polled by Reuters Estimates.</SPAN></FONT><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><BR></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Third-quarter revenue rose 15% to $11.3 billion, in line with analysts' estimates.</SPAN></FONT><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><BR></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Goldman Sachs analyst Matthew Borsch said UnitedHealth's results boded well for the sector. As the first of the big managed-care companies to report earnings, the company is considered a bellwether.</SPAN></FONT><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><BR></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Shares of UnitedHealth rose $2.23 to $56.43. News of its results lifted shares of rivals WellPoint Inc., Cigna Corp., Aetna Inc. and Humana Inc.</SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><BR></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">"We expect another strong back half for managed care," Borsch said in a research note. "Continued slowing in medical cost trends should drive upside to projected earnings, setting the stage for favorable industry fundamentals through mid-2006."</SPAN></FONT><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><BR></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">UnitedHealth is set to grow after the company completes its $8.1-billion acquisition of PacifiCare. UnitedHealth said it expected to close the deal by year-end or early in 2006.</SPAN></FONT><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; font: normal normal normal 16px/normal Times; min-height: 19px; "><BR></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Borsch said strength in the quarter was driven by a lower medical cost ratio, a key measure of the company's effectiveness in taming costs for doctors, hospitals and pharmaceuticals.</SPAN></FONT><FONT class="Apple-style-span" face="Times" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT></DIV><DIV style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; "><BR class="khtml-block-placeholder"></DIV></BODY></HTML>