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PACIFICARE HEALTH SYSTEMS ANNOUNCES RECORD YEAR-END RESULTS

 CYPRESS, Calif., Nov. 18 ~PRNewswire~ -- PacifiCare(R) Health Systems Inc. (NASDAQ: PHSYA, PHSYB) announced today that operating revenue, earnings and membership reached record levels in fiscal 1992.
 Operating revenue for the fiscal year ended Sept. 30, 1992, increased 36 percent to $1,686,314,000 compared to $1,242,357,000 for the prior year. Earnings for the fiscal year were $43,590,000, or $1.78 per share, vs. $25,702,000, or $1.10 per share, a year earlier. All earnings per share amounts have been adjusted to reflect the June 1992 stock dividend, which had the same effect on the total number of outstanding shares as a 2-for-1 stock split. Total membership grew 32 percent to 956,214 at Sept. 30, 1992, which included the addition of approximately 130,000 members from the acquisition of The Health Plan of America (HPA) in December 1991.
 "Fiscal 1992 has been a strong and successful year for PacifiCare Health Systems -- a year that resulted in a 50 percent improvement in our operating margin," said Terry Hartshorn, president and chief executive officer.
 "In spite of a weak economy and excluding our recent acquisition, commercial enrollment growth was 8 percent. Membership in our Secure Horizons Medicare programs grew 35 percent over the same period.
 "The ratio of health care expenses to premium revenue fell 2.2 percentage points due to higher premium revenue, operational efficiencies and lower commercial hospital utilization which were partially offset by increased prescription drug benefit costs. Also lowering the ratio was a positive reserve adjustment recorded in the June quarter. Marketing, general and administrative expenses as a percentage of operating revenue were up over last year due to higher Secure Horizons marketing expenses, one-time integration costs related to the HPA acquisition and increased staffing to handle higher membership levels.
 "Fiscal 1992 was also an eventful year for the company," Hartshorn continued. "We acquired and integrated a large HMO into our existing California operations, our shareholders approved the creation of a new, non-voting class of common stock and the company paid shareholders a non-voting common stock dividend in June. Additionally, our market value exceeded the $1 billion mark in September, and we completed two separate public offerings of non- voting common stock in July and October 1992 which raised approximately $97 million."
 For the fourth quarter of fiscal 1992, the company's operating revenue rose 33 percent to $454,569,000 compared to $342,252,000 a year ago. Approximately one third of the increase resulted from the acquisition of HPA. Earnings for the quarter were $12,140,000, or $0.47 per share, vs. $7,944,000, or $0.35 per share, for the same period last year.
 PacifiCare Health Systems is one of the nation's leading managed health care organizations. Primary operations include HMOs for employer groups and Medicare beneficiaries in California, Oklahoma, Oregon, Texas and Washington with more than 950,000 members. Other operations include a health and life insurance company, a behavioral health managed-care organization, a utilization review services firm, and a health promotion company.
 PACIFICARE HEALTH SYSTEMS, INC.
 (Dollars in thousands except per share data)
 Unaudited
 Three months ended
 Sept. 30,
 1992 1991
 Income Statement
 Premiums $451,492 $338,915
 Other income 3,077 3,337
 Total operating revenue 454,569 342,252
 Health care services:
 Medical services 188,755 133,982
 Hospital services 139,356 117,200
 Other services 46,207 32,701
 Total health care services 374,318 283,883
 Marketing, general & admin expenses 63,068 47,376
 Amortization of intangibles 658 59
 Operating income 16,525 10,934
 Interest income 4,821 4,186
 Interest expense (630) (44)
 Income before income taxes 20,716 15,076
 Provision for income taxes 8,576 7,132
 Net income $12,140 $7,944
 Earnings per share $0.47 $0.35
 Weighted avg number of shares outstanding 25,805 23,512
 Operating Statistics
 Medical loss ratio (health care services
 as a percentage of premium revenue):
 Consolidated 82.9 pct 83.8 pct
 Commercial 79.3 pct 81.7 pct
 Secure Horizons Medicare 86.7 pct 86.1 pct
 Marketing, general & admin expenses
 as a percentage of operating revenue 13.9 pct 13.8 pct
 Operating income as a percentage of
 operating revenue 3.6 pct 3.2 pct
 Twelve months ended
 Sept. 30,
 1992 1991
 Income Statement
 Premiums $1,675,174 $1,232,784
 Other income 11,140 9,573
 Total operating revenue 1,686,314 1,242,357
 Health care services:
 Medical services 675,607 503,816
 Hospital services 554,532 440,244
 Other services 163,506 109,179
 Total health care services 1,393,645 1,053,239
 Marketing, general & admin expenses 229,881 158,985
 Amortization of intangibles 2,239 399
 Operating income 60,549 29,734
 Interest income 17,725 14,960
 Interest expense (3,422) (173)
 Income before income taxes 74,852 44,521
 Provision for income taxes 31,262 18,819
 Net income $43,590 $25,702
 Earnings per share $1.78 $1.10
 Weighted avg number of shares outstanding 24,509 23,346
 Operating Statistics
 Medical loss ratio (health care services
 as a percentage of premium revenue):
 Consolidated 83.2 pct 85.4 pct
 Commercial 80.2 pct 84.0 pct
 Secure Horizons Medicare 86.6 pct 87.1 pct
 Marketing, general & admin expenses
 as a percentage of operating revenue 13.6 pct 12.8 pct
 Operating income as a percentage of
 operating revenue 3.6 pct 2.4 pct
 PACIFICARE HEALTH SYSTEMS INC.
 Membership Data
 At Sept. 30, 1992
 Secure
 Comm'l Horizons Total
 PacifiCare of California 532,265 169,025 701,290
 PacifiCare of Oklahoma 107,198 6,453 113,651
 PacifiCare of Oregon 57,390 23,805 81,195
 PacifiCare of Texas 45,251 14,827 60,078
 Total membership 742,104 214,110 956,214
 At Sept. 30, 1991
 Secure
 Comm'l Horizons Total
 PacifiCare of California 382,489 128,397 510,886
 PacifiCare of Oklahoma 98,315 1,559 99,874
 PacifiCare of Oregon 51,548 19,755 71,303
 PacifiCare of Texas 35,070 9,363 44,433
 Total membership 567,422 159,074 726,496
 PACIFICARE HEALTH SYSTEMS INC.
 Balance Sheet Data
 At At
 Sept. 30, 1992 Sept. 30, 1991
 Cash & equiv. and
 marketable securities $272,135 $205,846
 Medical claims and
 benefits payable $208,000 $175,700
 Total assets $498,082 $322,328
 Long-term debt $18,488 $2,280
 Total shareholders' equity $198,884 $99,678
 -0- 11~18~92
 ~CONTACT: David K. Erickson (investor relations), 714-229-2636, or Debby Iacunato (media relations), 714-220-3745, both of PacifiCare~
 (PHSYA PHSYB)


CO: PacifiCare Health Systems Inc. ST: California IN: HEA SU: ERN

BP-JB -- LA002 -- 2165 11~18~92 08:05 EST
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Date:Nov 18, 1992
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