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UnitedHealth Group, Inc. (NYSE:UNH)

Q4 2007 Earnings Conference Call

January 22, 2008, 8:45 am ET

Executives

Stephen Hemsley - President andChief Executive Officer

Mike Mikan - Chief FinancialOfficer

David Wichmann - Executive VicePresident; President of Individual and Employer Markets Group

Ken Burdick - Chief ExecutiveOfficer of UnitedHealthcare Group

Mike Matteo - Chief ExecutiveOfficer of Uniprise

Rick Jelinek - Chief ExecutiveOfficer of AmeriChoice

Simon Stevens - Vice President

Analysts

Josh Raskin - Lehman Brothers

Bill Georges - J.P. Morgan

Charles Boorady - Citi

Justin Lake- UBS

Christine Arnold - Morgan Stanley

Greg Nersessian - Credit Suisse

Matthew Borsch - Goldman Sachs

Scott Fidel - Deutsche Bank

Sheryl Skolnick - CRT CapitalGroup

Carl McDonald - Oppenheimer

John Rex - Bear Stearns

Presentation

Operator

My name is Dennis, and I will beyour conference facilitator today. At this time, I would like to welcomeeveryone to the UnitedHealth Group Fourth Quarter and the year ended 2007 EarningsConference Call. All lines have been placed on mute to prevent any backgroundnoise. After the speakers' remarks, there will be a question-and-answer period.(Operator Instructions). As a reminder, this conference is being recorded.

This call and these contents arethe property of UnitedHealth Group. Any use, copying or distribution withoutwritten permission from UnitedHealth Group is strictly prohibited. Here is someimportant introductory information. This call will reference non-GAAP amounts.Reconciliation of non-GAAP to GAAP amounts is available on the financialreports and SEC section of the company's investor information page at www.unitedhealthgroup.com.

This call containsforward-looking statements under U.S. Federal Securities laws. Suchstatements are subject to risks and uncertainties that could cause actualresults to differ materially from historical experience and presentexpectations. A description of some of the risks and uncertainties can be foundin reports that we filed with the Securities and Exchange Commission fromtime-to-time including the cautionary statements included in our annual reportson Form 10-K, and quarterly reports on Form 10-Q, as well as our current reporton Form 8-K filed in connection with the company's January 22, 2008 earningsrelease.

Information presented on thiscall is contained in the earnings release and Form 8-K dated January 22, 2007which may be accessed from the investor information page of the company'swebsite at www.unitedhealthgroup.com. I would now like to turn the conferenceover to the President and Chief Executive Officer of UnitedHealth Group,Stephen Hemsley

Stephen Hemsley - President and Chief Executive Officer

Good morning and thank you forjoining us this morning. In 2007, our primary goals were continued predictablegrowth in earnings, the strengthening of our operating fundamentals, andfurther leveraging the value of our diversified market-facing businessapproaches, including our capacity to generate and apply capital to build shareholder value. As we look at UnitedHealth Group's 2007 performance, we canreport that we have begun to make strong advances in all of these areas, andthat we have a significantly more powerful sense of momentum than we had atthis time last year.

Fourth quarter earnings of $0.92per share bought full year 2007 earnings to an adjusted $3.50 per share. Thatrepresents an increase of 18% over full year 2006 results. Earnings growth wasdriven by a more than $1 billion increase in adjusted operating earnings, andcomplemented by a reduction of more than 40 million weighted average sharesoutstanding for the year. We saw improved profitability in public and seniorprogram, while Enterprise Services businesses continued to deliver exceptionalgrowth in financial performance. These strong performances were offset by yearlong softness in our commercial risk benefits business, which today representsroughly 40% of our operating earnings. However, our medical care ratio improvedby 60 basis point year-over-year, and our operating profit margin expanded from9.8% to 10.6% as adjusted.

The value of our diversifiedbusiness approach was evident again in 2007, as we pursued expansion invirtually every segment of the Healthcare landscape. Our earnings streamcontinues to diversify by business, product, service line, client type andgeography. Our operating performance continues to strengthen across the fullexpanse of our businesses, with a smooth transition into January forcommercial, senior and public sector clients.

We continue to see clearimprovements in our market relationships and in service, as measured both byour metrics and more importantly by direct market feedback. We are installing agreater emphasis enterprise wide and building relationship equity with all ofour stakeholders, and those efforts are beginning to get traction.

Our [own] capital generationremains at distinctive characteristic of our organization. We reported cashflows from operations approaching $6 billion in 2007 or 126% of net income. Weachieve these results amidst reductions in risk-based memberships at UnitedHealthcare,Ovations Medicare Advantage, which underscores both our remarkable cashproduction capacity our businesses have and the critical focus we maintain oncapital generation.

I would note that there were sometiming differences that impact fourth quarter cash flows, including certainstate Medicaid receivables, some accelerated income tax items, and the timingof certain federal program payment. We now expect cash flows to be roughly $7billion in 2008.

We increased our debt-to-totalcapital ratio in 2007 from 26% to 35%, and expanded our share repurchasecommitment while maintaining strong credit ratings. We repurchased 125 millionshares in 2007 for $6.6 billion, including 40 million shares for $2.2 billionin the fourth quarter. This fourth quarter activity gives us a strong start onour stated target $7 billion in share repurchase by year-end 2008.

In addition, we had $2.4 billionin cash on hand, as well as further debt capacity as of December 31. Ourcapital will support our previously announced all cash mergers, sharerepurchase goals and general corporate uses.

While 2007 was seen as a quiteyear for us on the merger and acquisition front, we made a number of significantmoves to strengthen our enterprise. The most visible announced acquisitionswere Sierra, Fiserv and in early 2008 Unison. We also executed a number oflower profile, but strategically important acquisitions, including the LewinGroup in public policy consulting, Administration Resources Corporation, themarket leader in VEBA administration and Healthia, Lighthouse MD and Red Oak inclinical data and physician revenue cycle management.

Since we are discussing capital,I will anticipate a question about our investment portfolio. We have a totalportfolio of cash and investments of about $22.3 billion. Our exposure at thebeginning of the fourth quarter to sub prime loans was the de minimis, and whatlittle exposure we did have was further reduced in the quarter.

Our municipal bond portfolio isabout $5.5 billion in size and represents about one fourth of our total cashand investments. Those bonds were selected by highly regarded outsideinvestment managers, specifically based on the strong underlying credit qualityof the issuers, and independent of any credit insurance. Our investmentphilosophy remains one of conservatism, rather than one of overreaching for yieldand that approach has produced dependable result in times of bond marketturbulence in the past.

As we discussed at our recentInvestor Day, we have completed the transition to our new business segmentfinancial reporting this quarter. We have posted historical quarterly detailfor 2006 and 2007 for both income statements and the membership payables on ourwebsite. And Mike Mikan can answer any questions you may have related to thesechanges through the course of the day.

We will now turn to a briefdiscussion of our key fourth quarter January trends in the areas costs, growthand client delivery. The short version is that all three of these are trackingwith our most recent outlook. Full year adjusted earnings from operations of$8.025 billion were near the upper end of our range we provided at InvestorDay.

Year-over-year earnings growth inenterprise service businesses continued to be powerful in the quarter.Healthcare services earnings showed an expected sequential decline, whichreflected the decrease in earnings in the commercial benefits businesses due tonormal seasonal usage patterns, as well as the increased investment inmarketing to seniors.

In general, our businessesserving senior and public sector markets had another very solid quarter andshowed strong year-over-year earnings improvement.

Fourth quarter medical cost trendswere in line with expectations, with the full year medical care ratio of 80.6%in line with the low end of our Investor Day outlook.

Ovations and AmeriChoice againhad strong gross profit results, continuing their recent trends. The commercialrisk medical care ratio for UnitedHealthcare was 83.7% in the quarter, briningthe full year ratio at 82.1%. That fourth quarter care ratio includes certainnegative non-recurring items, the largest of which is an accrual that reducedpremium revenues in the quarter due to one state recently issued regulatorydetermination on prior year underwriting performance.

After consideration of these ourfourth quarter medical care ratio was above what we expected for the quarter.This includes the prudent and appropriate accrual for estimated medical costsin high deductible health policies, which incurs seasonally higher claims costin the fourth quarter each year.

All in, our 2007 full yearcommercial medical cost trend came in comfortably within the 7% to 7.5% rangewe discussed at Investor Day. We are pleased with that excellent and consistentmedical cost trend performance.

Fourth quarter operating costsremained well controlled, coming in at 14.4% in the quarter and bringing fullyear to 13.8% as adjusted. This sequential quarterly increase in operatingcosts of about $80 million included expenses for fully staffing the annualJanuary surge and benefit changes in enrollment service needs for membershipbusinesses and marketing costs for our senior business, including significantadvertising and market launch expenditures for the only Medicare Advantageproduct branded with the AARP name.

Turning to January 2008 growth,we are still truing up retention figures, so these remark are very much basedon preliminary estimates. Our enterprise services businesses are on track forsolid 2008 revenue growth. Ingenix closed the year with a revenue backlogexceeding $1.7 billion, an increase of 46% over the last year.

OptumHealth's integratedcapabilities at new branding are resonating well with customers in both theemployer and payor markets. Exante, which is being re-branded as OptumFinancial Services has been building its electronic payment network at a rapidpace and moved to total of $19 billion in funds electronically in 2007, anincrease of 80%.

Prescription Solutions is infinal negotiations for the location of its third mail service facility, andwill start fitting out this base in early 2008. As we move aggressively doadvance our growth agenda.

I would point out that thiscollection of enterprise services businesses made more operating profit in 2007than the entirety of UnitedHealth Group did in 2000. They are each wellsituated for growth in 2008 and for longer-term performance.

AmeriChoice grew by 245,000people in 2007, a 17% advance including 10,000 people in the fourth quarter. Weare pleased with the momentum AmeriChoice has generated this past year, whichincludes the new Medicaid program in Tennessee,SCHIP in Texas and the January 1 launch of aninnovative consumer-driven model serving the uninsured population in Indiana.

We anticipate continue growthduring 2008 from this business. Additionally the state of Tennessee recently issued its RFP for theeast and west regions, and we are well positioned to pursue both. Missouri and Connecticutare also markets we are evaluating for 2008 expansion.

Our pending acquisition of Unison will further strengthenAmeriChoice in these states and expand our services in this high growth marketsegment, sort of, to a total of more than 2 million people. We expect thistransaction will close before the end of the second quarter.

In Medicare Advantage, ouradvance planning, broker training, national and local market advertising andelectronic enrollment processes drove a productive start to the selling season.This is a much improved position from last year. The broker channel hasreengaged and the build out of our internal distribution channels will continuethroughout the year and into 2009.

Ovations is off to a strong startwith preliminary January figures, putting us on pace for growth of 145,000 to175,000 people, with Medicare Advantage offerings in 2008 as we set out atInvestor Day. Compared with last year, new sales are meaningfully up andcustomer retention has improved sharply. Our strong growth sales are estimatedto net out at around 60,000 to 85,000 new members by the end of theopen-enrollment period, which runs through March 31.

We continue to expect thatone-half of our annual growth in this line will come after April 1 from [8thJune] activity and in particular strong monthly growth trends in our expandedchronic care special needs plan.

Those are all organic numbers andexclude any impact from the pending Sierra acquisition. While we are limited inwhat we can say here, we are in very advanced and productive discussions withthe Department of Justice and planned to close this year transaction in thenear future.

As per Part D, as previouslydiscussed, January saw the reassignment by the government of the number of ourPart D low income members. We anticipate a reduction of about 650,000 peoplethat will be at least partially offset by open-market growth, the pendingacquisition of Sierra's Part D business and the Part D component of the newMedicare Advantage enrollment activity I mentioned a moment ago.

In the Part D open-market, oursales trends are quite satisfactory, recognizing that of course we need to waitto shoot up this enrollment data from CMS before we have any final numbers.

As we discussed at our CommercialDay, or our Investor Day, our commercial market businesses, UnitedHealthcareand Uniprise remain soft. The first quarter 2008 decline in people servethrough fee-based arrangements is trending closer to 150,000 than to 200,000people as we are performing better than expected in open-enrollment resultswith large employers. We believe this is an early reflection in our servicegains, which I will discuss in a minute.

First quarter losses inrisk-based commercial products appear closer to 400,000 people than 350,000.The components of the 400,000 include more than 200,000 from the PacifiCare,75,000 on funding conversions that remained with our company and the balancerepresenting organic decline.

We are still truing up all ofthese numbers, but it appears that first quarter will still have the expecteddecline of about 2% in total. Our results in 2008 business will be strengthenedby the acquisition of Fiserv, adding close to 2 million consumers serve throughfee-based arrangement and Sierra contributing additional risk-based consumersin commercial market businesses. This would result in a net gain of 7% in thefirst quarter for the UnitedHealthcare and Uniprise commercial benefit markets.

Let me now address our pricingdiscipline and improving service performance, which are critical given theireffort, the effects on organic growth layer in 2008 and into 2009. We continueto match UnitedHealthcare pricing to medical cost trends and expect to maintaina stable full year medical care ratio at around 82% plus or minus 50 basispoints.

With natural quarterlyutilization fluctuations, our fourth quarter 2007 revenues show a sequentialimprovement in the rate of increase in realized per member per month yield, andwe expect this trend will continue steadily in 2008. We remained comfortablewith and committed to our discipline in long-term philosophy of pricing to ourmedical cost trends.

As you are aware, we started itearly last year on a conservative effort to rebuild and enhance our service,which had impacted UnitedHealthcare's growth, with both fee-based andrisk-based customers. At Investor Day, Dave Wichmann discussed in detail thesignificant commitment to this area and the tangible results we have alreadyachieved.

In summary, we focused leadershipand resources on the issue and our service levels have recovered strongly. Wehave more to do with Legacy PacifiCare, but we are otherwise back to marketperformance levels and will further improve our service metrics throughout therest of this year. We are pleased to report to you continuing advances in theseareas.

Let's start with some basics.Intense focus has brought down our adjusted inventories by 80% over the pastsix months, and turnaround time on issues improved by more than 40% from thethird quarter to the fourth quarter of 2007. We expect to perform to less than48 hour inventory on issue resolution going forward and we anticipate that thisincreased fee, the resolution will be felt positively by clients and physiciansalike.

Our quality also continues toimprove. With first call accuracy in the fourth quarter up 20% year-over-yearfor consumers and 60% year-over-year for physicians. Our emerging serviceapproach integrates pharmaceutical, medical and administrative data enablingempowered experts to provide once and done resolution service across these keyfunctional area. The feedback on this approach has been powerfully positive andwe are expanding aspects of it broadly to the marketplace.

Our dollar accuracy on claimspayment has advanced 80 basis points in the past year to over 99% in the fourthquarter. We are seeing improved audit scores from consultants that willcontinue to improve in 2008, as fresher results begin to recover by theirreviews.

With regard to access, an independentthird-party survey found more U.S.physician offices except UnitedHealthcare than any other insurance claim. Weadded more than 40,000 physicians and other care providers to our network in2007, and continue to advance consumer access with key hospitals, most recentlyAdvocate in Chicago.

I would point out that less than50 basis points of our hospital spend was in out of network status at any time,even for one day in 2007, taken for a highly stable network.

Our Premium designation programis critical to consumers who want to make in-form decisions about the qualityand cost of their care into our new generation of consumer products such asEdge. In 2008, the Premium designation network encompassed 21 distinct medicalspecialties and is available to consumers in 38 states, plus the District of Columbia.This is an important component of our integrated strategy to support consumersin receiving the right care at a right time and place. Sophisticated employersunderstand the value of an Advocate for this kind of transparency for theiremployees and their families.

In our customer satisfaction onpost call surveys continues to be in the 98% of our range in the fourth quarterand nearly 98% in December using the strengthened service approach as describedearlier. Consumer surveyed immediately after their interaction with our agentsare indicating strong improvements in overall satisfaction. Also important tonote, that 2007 was another fertile year for innovation across UnitedHealth Group.We introduced exciting new products such as Edge and Vital Measures. Weexpanded the integration of comprehensive Care Advocacy protocols. Launched thenext generation of consumer products, advanced and began to scale theintegration of financial services, expanded our real time adjudicationcapability, introduced the personal pharmacy history, brought premiumdesignation program to scale and became the first company to adopt NCCNstandards for determining chemotherapy drug coverage as part of our commitmentsto [best science]. And as I mentioned; launched an innovative service modelthat is delivering compelling results for our customers.

We are gratified to have beennamed most innovative company in our industry in the most recent fortunesurvey. These service and innovation examples all directly relate to thebroader aspiration of performing as an integrated UnitedHealth Group Systems.We look forward both to external market validation of these gains and continuedadvancement and innovation in 2008.

I will close with a brief summaryand some forward-looking comments. This year and quarter, we have done what wetold you we would do. We refocused to improve fundamental execution and we willmaintain that focus. We continue to expand and enrich our network across all productsand did so with significantly lower levels of disruption. We have substantiallyaddressed PacifiCare integration and broader service issues, and fullyrecognize that we must continue to strengthen that market quarter-by-quarterthroughout 2008.

We executed on our marketing andsales approach in the Medicare Advantage and Part D sales season. Westrengthened our discipline in pricing to cost across the commercial benefitmarket even at the cost of membership growth and demonstrated it with improvingyield in the quarter.

At 2007 adjusted earning pershare increased by 18%. This is directly the result of diversified, adaptable,and market-focused businesses. We are positioned to deliver continuous strongresults in 2008, and key elements for 2008 include an accelerating MedicareAdvantage business supported by an exclusive alliance with AARP for 2014,expanded product offerings and expanded geographic footprints and great brandname recognition. Second; market place recognition of our stronger service performanceacross the board.

New product launches and anintense focus on profitable growth in our commercial market, a continuedcommitment to pricing discipline, timely closure of the Sierra and Unisonmergers and as always our ongoing commitment to effective capital management.We continue to project revenues to be around $83 billion. The impact of thetiming of the Sierra acquisition kind of a potential resolution with theJustice Department will be more than offset by closure of Fiserv. Unison representspotential upside of revenue. We expect earnings of $3.95 to $4 per share in2008 supported by cash flow of $7 billion, and we are targeting first quarterearnings in a range of $0.82 to $0.84 per share or 11% to 14% over the prioryear as adjusted.

As we pointed out in InvestorDay, we are focused on the greater, long-term opportunity to become a trulyunique enterprise. The opportunity to build out UnitedHealth Group as an openand engaged health system, one that could adapt to ever changing market conditionsand shifting demand in the dynamic healthcare landscape.

I want to thank our employees fortheir focus and support from our customers and our businesses during 2007. Westand together dedicated de-leveraging our ideas, unique capabilities in scale,our solid execution and our strong financial standing for the benefit of theentire healthcare community, our customers, our employees and our investors.

We appreciate your interest todayand we can now move to questions, I'm joined in this room by many of our seniorbusiness colleagues. And John Penshorn, Brett Manderfeld, and Mike Mikan andothers will continue to be available after this call to respond to anyadditional questions you may have. Thank you.

Question-and-Answer Session

Operator

(Operator Instructions)

Your first question will comefrom the line of Josh Raskin with Lehman Brothers.

Josh Raskin

Hi, thanks good morning. Questionon the improvement in the service metrics, I think you guys have a lot ofstatistics to sort of back it up, in terms of the internal measurement, but I'mcurious how do you measure the external constituents? I mean are there brokersurveys that you do or how do you get sort of comfort that the market'srecognizing that or it's just simply looking at your membership growth?

Stephen Hemsley

Well Josh, I would react on twolevels. Obviously given our focus on this we have been in a very consistentcontact with brokers, with consultants, with employers and soliciting verydirect feedback in terms for our performance in these areas. And I cannotoverstate the degree of connection we have been pursuing and will continue topursue with that. And that is one channel of direct feedback.

I would point to another, andthat is our post call, post contact surveys with consumers directly and withphysicians with respect to their satisfaction and our follow-up in terms of anyareas where they express concerns. And we monitor those surveys, which arereally available and done on every call, at every contact, so that we can reallytrack trends in this area. And those have been trending so strongly, favorablethrough the course of the year that is I think another very credible andfact-based respond with respect to our service levels. But I would also -- wehave [Dirk McMann] here and Dave Wichmann and I think perhaps they can respondmore effectively.

Dirk McMann

So, what I would also say isthat, Josh, after the call is over, we'd both take a survey and if there is anegative result on that survey, what happens is that the negative result isdefined as two standard deviations from the mean in terms of performance, andthat email immediately goes to one of our supervisors and the supervisorfollows up within 24 hours with that particular customer to make sure the issueis exactly resolved. As a result of it we have also been very, very powerful ona very first call, first contact basis. And that’s where we look the trend thatwe are seeing, and that just being followed up.

David Wichmann

From a call perspective in termsof how we have improved, we have moved from about a 4% plus error rate at thebeginning of last year to a 2% error rate at the end of this year.

Josh Raskin

I think what I am trying tobridge is, is these improvements in these metrics which is obvious, I mean thelevel of service is obviously dramatically better. I guess I am trying tobridge that with the expectations around membership. I think, you've alluded tothe commercial businesses, first quarter loss is trending a little bit betterthan expected. Is it fair to say that's where the outlook for the full year. Ithink you had said last time that you would had growth in the sequentialquarters two, three and fourth, is there -- maybe an update as to what youexpect full year membership to look like?

David Wichmann

Yeah, I'll let Ken Burdick andMike Matteo respond to that, but our view in terms of membership guidance isreally unchanged. We do expect to see positive growth, particularly in the riskproducts in the third and fourth quarters. And I would say to your openingcomment that the momentum is, dynamics are clearly distinctively different thanthey were at that time last year. Ken?

Ken Burdick

Good morning, Josh. Let me justrespond on the outlook for the remainder of the year. You are correct. We continueto have an expectation that is absolutely in line with the guidance from theInvestor Day. There has been some variation in January results by funding type,but the outlook for the remainder of the year is for growth both in the fullyinsured space as well as the fee-based business and is really attributable toseveral things.

Number one, the improvements thatthe marketplace is seeing in both service and in the network stability. Numbertwo, the impact of the new generation of the broader range price point productsthat we discussed at some length at Investor Day. And then third, we're reallystarting to get traction from the focus on expanding and revitalizing ourbroker and consultant's distribution channel.

And maybe I'll let Mike Matteospeak to some of the success we've had with some of the open enrollments.

Mike Matteo

Thanks Ken. In terms of our largecase market with Uniprise, we saw a better first quarter than anticipated and alot of that is attributable to working in concert with our large employers andthen partnership really helping them to showcase what we can do from a serviceperspective but a medical cost trend perspective and our ability to attract andretain individual members when they have a choice between us and the competingplan, and so open enrollment results were actually better than expected thisyear for January in the first quarter.

Josh Raskin

Okay, thanks.

Stephen Hemsley

I'll throw one point ofclarification in and that is, as we've said, we are down 50,000 more than weanticipated as we look at January. We don't see recovering that 50,000 but theexpectation that we have in terms of growth for the balance of the year andthat mix continues to be in line with our Investor guidance. Bill, nextquestion please.

Operator

Our next question will come fromthe line of Bill Georges with J.P. Morgan.

Bill Georges

Thanks, good morning. I'mwondering, if you could just help out with a little more detail around yourcommercial medical loss ratio and I guess, you mentioned during the preparedremarks, some sort of state funding requirement, I wasn't exactly clear on whatthat was but could you, if possible, strike out the moving parts around thehigher commercial MLR?

Ken Burdick

I would ask Mike here to respond?

Mike Matteo

Bill, I don't want to get intothe specifics on the regulatory item, because it's an ongoing negotiation. ButI'll try to breakout and give you a little more detail on the context into whatSteve said earlier. We did book the fourth quarter to an 83.7% medical careratio. That was impacted by the special cause items that Steve had mentioned.The regulatory item was something we were made aware of in the late secondquarter, early third quarter. At that time we booked to our best estimate basedon our interpretation of the statute and legal advice. We worked with thisindividual state throughout the remainder of the year. Based on new informationwe have reconciled this best estimate with the state, and that impacted ourfourth quarter tier ratio. If you excluded those items, we would be in linewith the expectation that we gave at the end of the third quarter.

Bill Georges

Okay. And if you could also justprovide detail on the moving parts in your cost trend forecast for '08?

Mike Matteo

On that I wouldn't stick withwhat we had at the Investor Day conference that I laid out for you and I thinkalso Ken Burdick did as well.

Bill Georges

Okay. So no change in view of thecomponent and cost trends?

Mike Matteo

No we would still be overall at 7.5%plus or minus 50 basis points for 2008.

Bill Georges

Okay, great. Thanks very much.

Stephen Hemsley

Next question please?

Operator

Your next question will come fromthe line of Charles Boorady with Citi.

Charles Boorady

Hi thanks good morning. Justcurious in light of the changing economic environment what assumptions you aremaking about the impact of the economy in '08 versus '07 in terms of the topline from the potential for lay-offs and pressure on state budgets in yourstate programs? And then on the medical expense line, one could argue for lowertrends if you assume that we consumers are going to consume less healthcare butthere is also some evidence that people accelerate consumption ahead of beinglaid off in healthcare, I'm not sure how you see those two offsetting eachother?

Stephen Hemsley

While there are severaldimensions to that one question, we build assumptions for attrition into ouroutlook and I'll have Dave Wichmann respond to that, I'll also suggest that thecost pressures that are imposed on states often present opportunities, probablymore often than not present opportunities for us in growth, so we often viewthose pressures at the positive in terms of the growth outlook. And then I'llhave Mike kind of respond to the economic impact that might manifest itself ontrends, so Dave.

David Wichmann

Good morning, Charles. As you'dhave expect we too are concerned about employment levels and the fact that theymay drop off, we believe that we accounted for nominal costs attrition in ourforecasts, however depending upon the severity of the economic conditions thatof course could be more severe as well. To-date we have seen some modest, verymodest declines in the financial services industry, related to the sub-prime inparticular, beyond that we have really focused on advancing service and seeingif there is opportunities for us, so we can grow our enrollment within ourexisting clients. And I think as Mike Matteo pointed earlier in this response,we’ve been very successful with that large case marketplace, and believe thatsuccess is reflective about that improved service performance.

Stephen Hemsley

Rick, you want to talk aboutstate progress

Rick Jelinek

On the state side, we have goodvisibility, and too -- roughly half of our markets are ready in terms of therate settings for 2008 and we feel good about that in this year. In addition,as Steve mentioned any budget shortfalls or budget pressures at the state levelprovide opportunity for the business to grow in general, as more people areadded on to the Medicaid rolls and the SCHIP rolls for the program. So, we feelvery good about the prospects this year looking forward.

Stephen Hemsley

Charles, let me speak aboututilization more in the broad context and then I will try to narrow in on theimpact of the economy. And broadly speaking, we think our products align wellto the individual's consumption behavior, that is, getting the individual moreinvolved in the health care decision making process and that in fact has had abenefit on bringing utilization to a more appropriate level. We are also veryintent on managing our costs. As you know, we've talked about significanthealthcare affordability initiatives, driving bed-days, in-patient stays downand we have seen that again this year with another 1% or so decline in bed-dayutilization.

With respect to the economy, asyou know, healthcare consumption generally lags the economy, so at a point intime, when you are going into a recession, you generally are experiencinghigher utilization that is already baked into our run rate, but we willcontinue to manage costs and utilization by aligning our products and all thethings that we do around educating the consumer and managing utilization,broadly speaking to make sure that our cost trends are in line, if not industryleading and we feel very confident of that.

Charles Boorady

Have the employers been proactivein asking you to do more to control medical expenses, I saw your initiative ononcology and also mimicking Medicare on not paying for certain areas in thehospital? But are there other such initiatives that could bring down the trend?

Stephen Hemsley

Mike, do you want to speak,broadly speaking, from our customers' perspective?

Mike Mikan

Yeah. I would say, overall, fromthe large case perspective, customers are always interested in theaffordability agenda. But this actually presents an opportunity where somecustomers who may have been, I would say, more paternalistic or willing to lookat more aggressive tactics that help them manage costs, in terms of how theyinteract with the system, particularly around consumer driven health plans andreally evaluating those and how that can part of their portfolio, to drive moreaggressive cost trends. So, this economic exposure does at times create someopportunity for us to leverage what we have in our best-in-class network or premiumnetworks and activation strategies with consumer driven health plans. So, thatkind of opens up the conversation a little bit more.

Josh Raskin

Thank you.

Stephen Hemsley

Next question please?

Operator

Our next question will come fromthe line of Justin Lake with UBS.

Justin Lake

Thanks, good morning. Couple of questions,just first in regards to your -- obviously with the fourth quarter issues youhad last year, I was just wondering if there is anything that you could tell usas far as what you've done to improve your visibility on cost trends orutilization, as you went into year-end and maybe compare that to last year. Andsame thing on the pricing side, you said, as you went through the first quarterof '08, it was apparent that your yield didn’t reach the levels that you werehoping for. Is there anything you could tell us as far as giving us an updatein regards to what you see your pricing yields doing? And what you've donedifferently to see those trends?

Stephen Hemsley

Yeah. Ken do you want to respondto yield aspect of it?

Ken Burdick

All right. Thanks Justin. Afterseeing the fourth quarter results in '06, we began making adjustments in '07 toour pricing. Some of that fell towards the end of '07, much of that is going befelt in '08 and we are very confident that our pricing and our yield istracking with our net-of-cost projections.

Justin Lake

Okay. Anything on the utilizationside that you could tell us as far as what you saw at the -- maybe you had folksin the hospitals at the end of the year? Do you see anything differently thanlast year?

Stephen Hemsley

Mike.

Mike Mikan

Yeah. This is an area that we'vespend -- as you can imagine Justin a fair amount of time on this year. Tryingto get better information, real-time notification information from ourhospitals, also understanding what is occurring in the outpatient setting, andthen as important to that is just looking at the pharmacy data as we closed outthe year between the holidays and we saw a significant drop-off in the pharmacyconsumption which really last year occurred from two fold, one was thesignificant ramp up that we saw within, call it the high deductible benefit,just the switchover from traditional products into that. And then also,consumers that wanted to give their prescriptions filled and a outpatientprocedure done near the end of the year, we just didn't anticipate that as youknow last year we talked about that or at least the degree and this year wefeel we are lot closer to understanding that and we feel we've reservedappropriately as you can see as indicated in our expected loss ratio for thefourth quarter.

Justin Lake

Great. And just one quickfollow-up on the economic questions that Josh had, I saw that your accountsreceivables was up about $200 million and your DSOs were up a day, I am justwondering if that's timing related or maybe there are some issues and I am justcurious around the individual segment with the economy being what it is, I amwondering if you are seeing people maybe paying their bills a little bit lateror not paying them at all as far as they are individual, maybe they are verysmall, and the small group on the premiums.

Mike Mikan

No, they were timing relatedissues and in particular Steve mentioned the state Medicaid payments, we hadtwo states that we did not collect at the end of the year and we've collectedin January already, so they are just timing differences.

Justin Lake

So, nothing on the individualside to worry about?

Mike Mikan

No nothing.

Stephen Hemsley

No actually they are receivableson the commercial businesses that had performed exceptionally well, most of thereceivable growth as in the other businesses.

Justin Lake

Perfect, thank you.

Operator

Your next question will come fromthe line of Christine Arnold with Morgan Stanley.

Christine Arnold

Good morning. I have a questionon your commercial MLR, the premium yield improved in the fourth quarter as youmentioned, you increased price such that you said much of the benefit will be feltkind of in the first quarter and into 2008. Given that the MLR was higher thanyour expectations in this business in '07, and you've taken pricing action,what's the potential that the MLR could improve in 2008? I know you are guidingfor kind of stabilish plus or minus 50. But it seems to me it should improvegiven the pricing action, could you talk about that?

Stephen Hemsley

Well, we offered guidance thatrepresented a corridor and obviously we are striving for stability there. Ithink there is potential for upside performance. But I think it would be very,very premature to provide any indications of it at this point in time. And so weare, our guidance stays where it is, but we would be looking to outperform itjust as a natural instinct.

Christine Arnold

Okay. And then the follow-up.We've heard from the marketplace that you've changed some of the ASO termsentering 2008, in some cases in order to retain accounts, where there were someservice issues. Can you talk about the change in ASO terms and how at risk youare for medical trends?

Stephen Hemsley

Yeah, I think my Mike Mikan isperhaps the best to respond to that and then maybe Dave Wichmann could put somecolor on it.

Mike Mikan

Yeah, thanks. When we look at thelarge case marketplace and the performance guarantees, we had to increaseseveral amounts at risk from a service perspective, but we're that confidentthat that it will be a non issue for us going into the year. We do not have avery different profile in terms of a ASO fee at risk from an affordabilityperspective or a cost perspective in terms of that, while we've done it onselected accounts. It is not something we think will substantially change ourrisk profile in 2008 or 2009.

Christine Arnold

Is that because you don't thinkmedical trends will hit that next quarter or because you didn't put much risk?

Mike Mikan

It's a little bit of combinationof both while we've had to put some amounts at risk. We only will put at riskwhat we think we can hit and achieve. The other part of this is that in a largecase market, we are able to achieve very good trends for our large customerseven below some of those trends on our fully insured books of business.

Christine Arnold

Okay. Thank you.

Stephen Hemsley

Christine, the only thing I wouldadd to that is that we throughout the year and just trying to get back to Josh'squestion, we throughout the year had seen a steady decline in the amount ofpayouts and performance guarantees our business particularly related toservice. So it's just another external validation point.

Christine Arnold

Thank you.

Operator

Your next question will come fromthe line of Greg Nersessian with Credit Suisse.

Greg Nersessian

Hey, good morning. Thank you. Myquestion is just on the quarterly progression of earnings next year and justspecifically in light of three factors, I just wanted to hopefully get a betterunderstanding for the first is just a loss of the dual-eligible PDP lives. Howthat might influence the earning seasonality innovations?

The second was just on the NAmarketing cost related to the AARP relationship in '08. Was there any one-timeamount of spending this year, or would you expect the same amount of spending next-gen?

And the final piece is just onthe high-deductible plans in the commercial book. Has that kind of stabilized,or would you expect to commercial MLR progression to get even more pronounce?Thank you.

Stephen Hemsley

I think I have Mike respond interms of those elements and then from our business point of view, we might addsome color.

Greg Nersessian

Okay.

Mike Mikan

Okay. With respect to the loss,there is two things going on with the Part D. One, as you know, the change inthe risk corridor, which will affect the quarters, especially the first threequarters negatively and then positively in the fourth quarter. That will besomewhat offset by favorable impact of not having the level of Part Ddual-eligibles in the first quarter, so that should be favorable in the firstquarter offsetting some of that negativity. And then I apologize, what were thelast two?

Stephen Hemsley

Actually high-deductible plansand I think that basically we have a very clear beat on that as the patentsestablish that would be roughly the same as, we expect it would be roughly thesame as this year. And then with respect to marketing cost, there is no [oncard]. I think Simon might respond to that.

Simon Stevens

Sure. Yes, Greg. So as far as theAARP brand launch is concerned, we have had a number of one-time launch costs,which we incurred in the second half of last year, which we wouldn't into thisrepeating at that same level next year.

Greg Nersessian

Could you quantify the magnitudeof that or a range?

Mike Mikan

Well, we will obviously makeadjustments as to precisely what the shape of that marketing spend would benext year, when we see the full year impact of it this year. But we have talkedabout the 30 basis points of costs associated with that in the last part of2007.

Greg Nersessian

Okay. But just in, so justgenerally speaking, overall, the quarterly earnings progression for next yearwill be most impacted by the two Part D components Mike that you mentioned onthe dual-eligibles and the risk corridors?

Mike Mikan

Yes.

Greg Nersessian

Okay. Thank you.

Operator

Your next question will come fromthe line of Matthew Borsch with Goldman Sachs.

Matthew Borsch

Yes, hi, good morning. Just aquick one on pricing. Could you characterize what you are seeing in the marketversus maybe a year or two years ago, and particularly in terms of theintensity of price competition on the commercial risk side of the business?

And is there any variation betweenpublic companies and not for profits where maybe ones more aggressive, onesless aggressive than what you saw a year or two ago? And just, if I could justadd to that one other piece which is, can you give us any sense of where youthink the commercial risk MCR will land in the first quarter just because thereis obviously a lot of focus on that metric.

Stephen Hemsley

So Ken, may be you should respondin terms of what you think the pricing environment is, and then Mike can talkto the first quarter care ratios.

Ken Burdick

Thank you, Mathew. Let me speakfirst for the, and [also] profits. We are seeing the consistent pricingbehavior that we've really observed for the last 18 months to 24 months. Nochange. It continues to be competitive.

With respect to the individualmarket, that's where we think we have seen an increase in the number ofcompetitors, which is driving a higher level of price competition. And then inthe upper range, it's really consistent with the patterns that have emergedover the last couple of years. We don't see any fundamental change in thedynamics around either fee or risk-based pricing. It continues to be acompetitive, but the rational market.

Stephen Hemsley

And relatively stable consistentwith last 24 months.

Matthew Borsch

Great.

Stephen Hemsley

And ratio?

Mike Mikan

Hey Matt, when you adjust out --as you know, last year we reported Q1 loss ratio in the UnitedHealthcarebusiness of 81.2%. When you adjust out development, we believe that this yearwe will be in line with that adjusted loss ratio of around 80.5%, thus we wouldexpect in the first quarter.

Matthew Borsch

Okay. Thank you.

Operator

Your next question will come fromthe line of Scott Fidel with Deutsche Bank.

Scott Fidel

Thanks. Good morning. Just had aquestion, just around if you could give us a little more details on the MAopen-enrollment fees and then just relative to the net sales you are seeing,maybe how that's tracking in network-based products with the ARP relationshipcompared to private fee, and then also if you are seeing any higherdis-enrollments in terms of retention in MA, a couple of competitors have citedseeing some of that recently.

Stephen Hemsley

Simon, I think this is yours.

Simon Stevens

So, SecureHorizons folks are fairlyseeing a sales turnaround from their position than last year, gross sales areup and determinations are down. As Steve said based on current enrollmenttrends, SecureHorizons believes that they should be on track for 60,000 ormore, [next to] Medicare Advantage numbers sold by March 31 and effective byApril 1, inline with our full year projection that we set out at Investor Dayof a 125,000 to 175,000. As for product mix, we are seeing gross salesconsistent with the strategy that we set out for you at Investor Day withdeliberately strong acquisition in our network based products, AARP branded HMOproducts and [SNP] products together with private free-for-service sales, butfocused particularly on our network-based offering.

Scott Fidel

And then in terms ofdis-enrollments or retention levels, I think you said that there was trackingin line with expectations for '08 so far?

Simon Stevens

Yeah, I mean, our terminationrates are significantly down on what they were last year. Well of course we havelarger installed-base of Medicare Advantage members than anyone else in theindustry, nearly 1.4 million members. So even with the much reduced terminationrate, simply math means that we still have higher number of member exit duringselling seasons than others, which we have to do then, let off against stronggross sales.

Scott Fidel

And if I can just ask afollow-up, just around the group Medicare piece and whether you've signed anysales to-date yet or/and then what the pipeline looks for the remainder of 2008and then looking out to 2009?

Stephen Hemsley

Yeah, we are leader in theemployer group retiree market place, we've got over 400,000 group Medicaremembers including those in Medicare Advantage. We are going to activelyparticipate in the 2008 opportunities group business, recognizing of course forthe large group as these are most likely to take effect for 1/1/'09. So I guessin parting it's worth remembering that much of the group medical advantage nowshowing up on the 1/1 Medicare roster actually reflect commercial life withother plans converted to Medicare advantage as far back as last summer.

Scott Fidel

Okay. Thank you.

Operator

Your next question will come fromthe line of Sheryl Skolnick with CRT Capital Group.

Sheryl Skolnick

Thank you very much. I'm a bit --I'm very curious to understand what's happening with that one particular state,but I'll hope that we get some more clarity perhaps in the 10-K on thatdisclosure. So I don't want to waste my question by pressuring you on thatpoint. But I guess where I do want to pressure you a little bit for moreclarity or color if I could is, you mentioned the commercial membership wasgoing to be down about 50,000 more than anticipated, and if I heard you, or atthe lower end of the range. And if I heard you correctly Steve, you said thatyou probably don't make that up. A; is that correct? and B, did I hear youcorrectly, and D; can you break that down into; are these old products, arethese markets in which you've not yet got any traction on your service andinnovative product initiative or is that a lack of traction in the new, moreinnovative products or where you've put the effort into reconfiguring thebroker channel?

Stephen Hemsley

First of all, Sheryl youabsolutely heard correctly we are 50,000 and more and we are talking risk base.

Sheryl Skolnick

Right. That's what I mean, thecommercial risk base.

Stephen Hemsley

Right.

Sheryl Skolnick

And if you are in a group size,can you give me more detail on where the weakness appears to be?

Stephen Hemsley

Ken you want to respond to that?

Ken Burdick

Sheryl, you are correct, that inthe older product line as I mentioned in the Investor Day conference, our Edgeproduct for example is rolling out throughout the country, but we only had itin 21 markets as of January. I'll just speak to the-- that the momentum that weare gaining, I'll sight one example of the Chicago market, because I know if Italk about things like network stability, and improved service, and broker engagementit may not resonate. I'll just quickly describe that using Chicago in example all of these things havecome together, so that with the signing of Advocate we experienced growth inour small book for the first time in several years. We sold seven new customerswith brokerage that we had not been writing business with. And we had 2500additional members in one open-in-moment opportunity and our large caseproposal activity is up 25%. And that's really -- its one illustration of theimpact of this three of four different things that we talk about, asfundamental initiatives that are building momentum in our business.

Sheryl Skolnick

Okay. But never the less that wasnot enough to offset what appears to be another attrition story, and I’m tryingto understand that, I mean we know about the American Medical Securityattrition and the PHS book attrition, are we now going to have to go throughanother period in which new products replace old, new services replace old, andwe have more than expected attrition, I mean I think that I know the attritionitself is obvious, but it sounds like its more than anticipated and that's whatI’m trying to get at. Are we going into yet another cycle of disappointmentbecause we're surprised by a lack of traction in the old product base forUnitedHealthcare.

Stephen Hemsley

No, Sheryl I would not think thatthat theme resonates, if you really take a look at the concentration, it ismore California, I won't put it all in terms of PacifiCare, and I won't put itall in terms of repositioning of that book, but I would say, if there is aconcentration, it is more in the Californiadirection. And, I actually think that our outlook with respect to going forwardis as I said more positive than we have been probably in a couple years. And,but now you are focused on risk, but we are also seeing fee performance, feebased product performance that was actually stronger in January than weanticipated and we are kind of positive with respect to that going forward aswell.

Sheryl Skolnick

And the tax rate was lower thananticipated in the quarter, was there any specific reason for that?

Stephen Hemsley

That is right, Mike, you want tocomment?

Mike Mikan

Yes we just -- when we did ourend of the year reconciliation with the income across the different taxjurisdictions we had a favorable state income tax impact.

Sheryl Skolnick

I guess I am concerned, becausethe cash flow was lower, the tax rate was lower, there were couple of one timeitems in the quarter, the revenue was lighter, I know that's history, I knowyou want to look forward, but the quality of earnings there make me a littleconcerned. Why shouldn’t I be?

Mike Mikan

I actually think the quality ofearnings is quite strong, I think we were very appropriate with respect to howwe established care ratio for the fourth quarter. I think the earnings actuallywere at the upper end of our range. If you take a look at our earnings in termsof where we position them from an operating point of view at $8.25 billion, wewere five short of the absolute upper end of the range. I think if you take alook at cash flow capacity that was approaching $6 billion and the cash isreally more a function of timing, so we've basically strengthened the 2008. So,actually I don't see a quality issue at all, I actually see us addressing veryappropriately any and all concerns that ends and continuing to perform well.

Sheryl Skolnick

Okay, thanks so much.

Mike Mikan

Thank you.

Operator

Our next question will come fromthe line of Carl McDonald with Oppenheimer.

Carl McDonald

Thanks, it looks like theMedicare Advantage had another very, very strong quarter in the fourth quarter.I am still having a little trouble cross-walking between the loss ratio in '07to the expectation that the loss ratio is going to be stable again in 2008.

So, can you help us there interms of, it looks like there was a lot of favorable development in theMedicare business in '07? Your assumption is that it doesn't continue in '08.Is there less favorable development impacting the Medicare business than wethink there is or are there other factors that are helping 2008 and thenoffsetting the loss of that favorable development next year?

Stephen Hemsley

We'll let Mike start and thenmaybe Simon can add to it.

Mike Mikan

We talked about this after thefirst quarter. We've got a broad diverse business across the insured differentblock and development is, most of you all are aware that we did have negativeprior period development or prior year development for the UnitedHealthcarebusiness. We have a diverse block of business across Medicaid programs, the OptumHealth program, stop-loss and other. So, Idon't want to just focus in on MA, which is what seems to be where we arenaturally going. You do need to look at it across a block of business thatrepresents and I know that's insurance cost, but that is, in fact, this part ofthe business is roughly call it $55 billion plus in medical cost and over $8billion of medical payable. So, we need to make sure we are looking in thecontext of the overall block of business in that insurance stock?

Stephen Hemsley

Simon?

Simon Stevens

And then Carl just to supplementthat in terms of the Medicare Advantage MCLs for 2008, you asked that therewere other factors that might explain outlook and I would draw your attentionto quite a few. The first is obviously the 2008 rates were reasonable. Thesecond was that our 2008 benefits were designed prudently. Th1ird was medicalcost trends are expected to be broadly stable. In addition our clinical modelis gaining traction. The efficiency of the drug components of our servicescontinues to improve and opt through a greater mail and generic usage. Thereare some annualized effects from the change in member mix that we sold during 2007,and of course the risk adjusted compensation that we now received to meet thehealth needs of our members this continuing the results flow [not a] one-timepayment. So those are some of the variables that needed through the outlookthat we have given you.

Carl McDonald

Do you want to quantify theimpact on margins from field development to the Medicare Advantage business in'07?

Simon Stevens

We really haven't commented aboutthat in any areas of our business. Should we get to the next question please?

Operator

Your next question will come fromthe line of John Rex with Bear Stearns.

John Rex

Thanks. I just wanted to go backto the commercial cost of accrual again here. Just thinking about, we saw this4Q versus 4Q '06, if we adjusted the 4Q '06 for the negative development youtalked about in the 1Q '07, if we roughly need you 16 [81.7] loss ratiocompared to 83 call a plus a little bit this Q. And can you just help meunderstand like how much of this is about higher portion of your member shiftingin high-deductible plans this year versus last of the 10 million UHG risk book.How much is -- you've alluded a couple of times to more conservative accrualsin the commercial book as you exited 4Q. And can you just kind of give us afeel for what was driving that higher adjusted comp?

Stephen Hemsley

Well, John…

John Rex

Making it a pretty big shift.

Stephen Hemsley

It's a pretty big shift and it'sgetting in the detail and I don't want to get into reconciling non-GAAP items,so I will try to answer it as best as I can. And if I don't, I'll have John,Brett and I'll follow up with you afterwards. But to make sure we are gettingto that question like I said as best we can.

If you go back to last year, theadjustments that -- the things that were impacting that loss ratio vis-à-visthe loss ratio this year and the fourth quarter are development the in and theout in both periods and that would be about call it a 150 basis points. So youwere close to what I would have estimated the adjusted loss ratio to be.

We are impacted by those specialcosts items that we mentioned earlier. As you know even though we are seeingpricing increase, the impact on that has not -- on the loss ratio is not farenough along to see that result in the fourth quarter. We do expect our pricingactions to be seen in 2008, but that did impact as well.

And then also the net item thatyou are probably trying to quantify is the fourth quarter does have heavier daycontent. You price for that across the year, but the fourth quarter 2008 is ahigher utilization days than the previous year. And then the ramp-up of thehigh-deductible plans as evidenced by the increase in CDHP plans in the LegacyUnitedHealthcare product going from 11% to 15% in the fourth quarter. So thatdoes impact the individual quarter not necessarily the full year as you know.You price for that for the full year, but if you've got months that haveFebruary utilization, that doesn't in fact impact your loss ratio. So takingall those things in the context, we believe we're appropriately reserved.

John Rex

I mean, maybe I can see this way,is your view of utilization in the 4Q '07, is it that it was higher than evenyour revised view of 4Q '06?

Stephen Hemsley

No.

Mike Mikan

Not at all.

Stephen Hemsley

No, that it's a -- all that wasreserving issues, we talked about in the first quarter and…

John Rex

Right. Okay. So I mean justreading in and it just an 83 plus a little bit versus an [81.7], I'm justtrying to understand if there is something in the book of business thatshifting that I need to be thinking about more?

Stephen Hemsley

No, I think it's all thereconciling items that I referred to you. I don't think there is anything elseto it.

John Rex

Okay. Thanks.

Stephen Hemsley

Before we conclude if I can --had a recap in a nutshell. We performed to the high end of 2007 guidance inoperating and per share earnings for the quarter and the year. UnitedHealthcarecommercial ratio for the quarter performed largely in line with our previous statementsand we have reaffirmed our commercial care ratio for '08 in an 82% plus orminus 50 basis point range.

First quarter membership appearsroughly to be in line with our Investor Day discussion. Higher premium yieldsfrom pricing actions are taking -- are getting traction and are being realized.Medicare or Medicaid and supplemental products all appear to be in line withfor '08 membership projections.

2008 revenue estimates in annualoperating earnings and per share outlook remained unchanged. First quarter pershare earnings should be as much as 14% above the prior year quarter, and weexpect roughly 7 billion in operating cash flows for '08 and will continue ourshare buyback program. All of these elements, all of these represented asignificantly stronger level of visibility and momentum compared to where wewere this call last year and we will continue to focus on improving ourperformance as we go through 2008.

Thank you very much for youattention today.

Operator

Ladies and Gentlemen, that doesconclude our conference for today. You may all disconnect, and thank you forparticipating.

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Source: UnitedHealth Group, Inc. Q4 2007 Earnings Call Transcripts

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