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Share Name | Share Symbol | Market | Type |
---|---|---|---|
UnitedHealth Group Inc | NYSE:UNH | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-1.97 | -0.40% | 491.00 | 492.36 | 485.78 | 491.96 | 1,205,914 | 18:19:15 |
Strong and diversified performance continued across UnitedHealth Group (NYSE: UNH) in the third quarter 2019.
“Optum and UnitedHealthcare are driving value for our customers, creating momentum to finish the year strongly and move into 2020 with an intense focus on accelerating the growth of our businesses by advancing quality, affordability and satisfaction for those we serve,” said David S. Wichmann, chief executive officer of UnitedHealth Group.
Based on strong third quarter 2019 results and its positive view for the rest of the year, the Company increased its full year net earnings outlook to $14.15 to $14.25 per share and adjusted net earnings to a range of $14.90 to $15.00 per share, both increasing $0.15 per share at the mid-point.
Quarterly Financial Performance
Three Months Ended
September 30,
2019
September 30,
2018
June 30,
2019
Revenues
$60.4 billion
$56.6 billion
$60.6 billion
Earnings from Operations
$5.0 billion
$4.6 billion
$4.7 billion
Net Margin
5.9%
5.6%
5.4%
UnitedHealthcare provides health care benefits globally, serving individuals and employers, and Medicare and Medicaid beneficiaries. UnitedHealthcare is dedicated to improving the value health care consumers receive by reducing the total cost of care, enhancing the quality of care received, improving health and wellness and simplifying the health care experience.
Quarterly Financial Performance
Three Months Ended
September 30,
2019
September 30,
2018
June 30,
2019
Revenues
$48.1 billion
$45.9 billion
$48.6 billion
Earnings from Operations
$2.7 billion
$2.6 billion
$2.6 billion
Operating Margin
5.5%
5.6%
5.4%
Optum is a health services business serving the global health care marketplace, including payers, care providers, health systems, employers, governments, life sciences companies and consumers. Using market-leading information, data analytics, technology and clinical insights, Optum helps improve overall health system performance: optimizing care quality, reducing health care costs and improving the consumer and physician experience.
Quarterly Financial Performance
Three Months Ended
September 30,
2019
September 30,
2018
June 30,
2019
Revenues
$28.8 billion
$25.4 billion
$28.0 billion
Earnings from Operations
$2.4 billion
$2.0 billion
$2.1 billion
Operating Margin
8.2%
8.0%
7.5%
About UnitedHealth Group
UnitedHealth Group (NYSE: UNH) is a diversified health care company dedicated to helping people live healthier lives and helping make the health system work better for everyone. UnitedHealth Group offers a broad spectrum of products and services through two distinct platforms: UnitedHealthcare, which provides health care coverage and benefits services; and Optum, which provides information and technology-enabled health services. For more information, visit UnitedHealth Group at www.unitedhealthgroup.com or follow @UnitedHealthGrp on Twitter.
Earnings Conference Call
As previously announced, UnitedHealth Group will discuss the Company’s results, strategy and future outlook on a conference call with investors at 8:45 a.m. Eastern Time today. UnitedHealth Group will host a live webcast of this conference call from the Investors page of the Company’s website (www.unitedhealthgroup.com). Following the call, a webcast replay will be available on the same site through October 29, 2019. The conference call replay can also be accessed by dialing 1-800-839-1162. This earnings release and the Form 8-K dated October 15, 2019, can also be accessed from the Investors page of the Company’s website.
Non-GAAP Financial Information
This news release presents non-GAAP financial information provided as a complement to the results provided in accordance with accounting principles generally accepted in the United States of America (“GAAP”). A reconciliation of the non-GAAP financial information to the most directly comparable GAAP financial measure is provided in the accompanying tables found at the end of this release.
Forward-Looking Statements
The statements, estimates, projections, guidance or outlook contained in this document include “forward-looking” statements which are intended to take advantage of the “safe harbor” provisions of the federal securities law. The words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “forecast,” “outlook,” “plan,” “project,” “should” and similar expressions identify forward-looking statements. These statements may contain information about financial prospects, economic conditions and trends and involve risks and uncertainties. Actual results could differ materially from those that management expects, depending on the outcome of certain factors including: our ability to effectively estimate, price for and manage medical costs; new or changes in existing health care laws or regulations, or their enforcement or application; the DOJ’s legal action relating to the risk adjustment submission matter; our ability to maintain and achieve improvement in quality scores impacting revenue; reductions in revenue or delays to cash flows received under government programs; changes in Medicare, the CMS star ratings program or the application of risk adjustment data validation audits; cyber-attacks, other privacy/data security incidents, or our failure to comply with related regulations; risks and uncertainties associated with the pharmacy benefits management industry; competitive pressures; changes in or challenges to our public sector contract awards; our ability to contract on competitive terms with physicians, hospitals and other service providers; failure to achieve targeted operating cost productivity improvements; increases in costs and other liabilities associated with litigation, government investigations, audits or reviews; failure to manage successfully our strategic alliances or complete or receive anticipated benefits of strategic transactions; fluctuations in foreign currency exchange rates; downgrades in our credit ratings; our investment portfolio performance; impairment of our goodwill and intangible assets; failure to maintain effective and efficient information systems or if our technology products do not operate as intended; and our ability to obtain sufficient funds from our regulated subsidiaries or from external financings to fund our obligations, maintain our debt to total capital ratio at targeted levels, maintain our quarterly dividend payment cycle, or continue repurchasing shares of our common stock. This above list is not exhaustive. We discuss these matters, and certain risks that may affect our business operations, financial condition and results of operations more fully in our filings with the SEC, including our reports on Forms 10-K, 10-Q and 8-K. By their nature, forward-looking statements are not guarantees of future performance or results and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Actual results may vary materially from expectations expressed or implied in this document or any of our prior communications. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We do not undertake to update or revise any forward-looking statements, except as required by law.
UNITEDHEALTH GROUP Earnings Release Schedules and Supplementary Information Quarter Ended September 30, 2019 - Condensed Consolidated Statements of Operations - Condensed Consolidated Balance Sheets - Condensed Consolidated Statements of Cash Flows - Supplemental Financial Information - Businesses - Supplemental Financial Information - Business Metrics - Reconciliation of Non-GAAP Financial MeasureUNITEDHEALTH GROUP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2019
2018
2019
2018
Revenues Premiums$
47,397
$
44,613
$
142,074
$
133,155
Products
7,546
7,344
23,971
21,050
Services
4,942
4,217
13,756
12,590
Investment and other income
466
382
1,453
1,035
Total revenues
60,351
56,556
181,254
167,830
Operating costs Medical costs
39,041
36,158
117,164
108,448
Operating costs
8,960
8,479
25,892
25,371
Cost of products sold
6,627
6,718
21,606
19,373
Depreciation and amortization
709
611
2,002
1,791
Total operating costs
55,337
51,966
166,664
154,983
Earnings from operations
5,014
4,590
14,590
12,847
Interest expense
(449
)
(353
)
(1,267
)
(1,026
)
Earnings before income taxes
4,565
4,237
13,323
11,821
Provision for income taxes
(936
)
(953
)
(2,752
)
(2,603
)
Net earnings
3,629
3,284
10,571
9,218
Earnings attributable to noncontrolling interests
(91
)
(96
)
(273
)
(272
)
Net earnings attributable to UnitedHealth Group common shareholders$
3,538
$
3,188
$
10,298
$
8,946
Diluted earnings per share attributable to UnitedHealth Group common shareholders
$
3.67
$
3.24
$
10.65
$
9.09
Adjusted earnings per share attributable to UnitedHealth Group common shareholders (a)
$
3.88
$
3.41
$
11.22
$
9.60
Diluted weighted-average common shares outstanding
963
983
967
984
(a) See page 6 for a reconciliation of the non-GAAP measure
UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)
September 30,
December 31,
2019
2018
Assets Cash and short-term investments$
15,818
$
14,324
Accounts receivable, net
10,964
11,388
Other current assets
16,759
12,980
Total current assets
43,541
38,692
Long-term investments
36,840
32,510
Other long-term assets
93,328
81,019
Total assets$
173,709
$
152,221
Liabilities, redeemable noncontrolling interests and equity Medical costs payable$
20,939
$
19,891
Commercial paper and current maturities of long-term debt
6,387
1,973
Other current liabilities
35,315
31,345
Total current liabilities
62,641
53,209
Long-term debt, less current maturities
38,507
34,581
Other long-term liabilities
12,814
8,204
Redeemable noncontrolling interests
1,991
1,908
Equity
57,756
54,319
Total liabilities, redeemable noncontrolling interests and equity$
173,709
$
152,221
UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
Nine Months Ended September 30,
2019
2018
Operating Activities Net earnings$
10,571
$
9,218
Noncash items: Depreciation and amortization
2,002
1,791
Deferred income taxes and other
(4
)
(127
)
Share-based compensation
525
512
Net changes in operating assets and liabilities
(836
)
1,923
Cash flows from operating activities
12,258
13,317
Investing Activities Purchases of investments, net of sales and maturities
(2,028
)
(3,729
)
Purchases of property, equipment and capitalized software
(1,421
)
(1,505
)
Cash paid for acquisitions, net
(8,200
)
(5,824
)
Other, net
338
(187
)
Cash flows used for investing activities
(11,311
)
(11,245
)
Financing Activities Common share repurchases
(5,101
)
(3,650
)
Dividends paid
(2,908
)
(2,454
)
Net change in commercial paper and long-term debt
8,192
1,200
Other, net
404
1,211
Cash flows from (used for) financing activities
587
(3,693
)
Effect of exchange rate changes on cash and cash equivalents
(37
)
(97
)
Increase (decrease) in cash and cash equivalents
1,497
(1,718
)
Cash and cash equivalents, beginning of period
10,866
11,981
Cash and cash equivalents, end of period
$
12,363
$
10,263
UNITEDHEALTH GROUP
SUPPLEMENTAL FINANCIAL INFORMATION - BUSINESSES
(in millions, except percentages)
(unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2019
2018
2019
2018
Revenues UnitedHealthcare$
48,105
$
45,937
$
145,595
$
137,242
Optum
28,763
25,391
83,152
73,718
Eliminations
(16,517
)
(14,772
)
(47,493
)
(43,130
)
Total consolidated revenues$
60,351
$
56,556
$
181,254
$
167,830
Earnings from Operations UnitedHealthcare
$
2,655
$
2,559
$
8,251
$
7,316
Optum (a)
2,359
2,031
6,339
5,531
Total consolidated earnings from operations
$
5,014
$
4,590
$
14,590
$
12,847
Operating Margin UnitedHealthcare
5.5
%
5.6
%
5.7
%
5.3
%
Optum
8.2
%
8.0
%
7.6
%
7.5
%
Consolidated operating margin
8.3
%
8.1
%
8.0
%
7.7
%
Revenues UnitedHealthcare Employer & Individual$
14,291
$
13,734
$
42,407
$
40,856
UnitedHealthcare Medicare & Retirement
20,698
18,789
62,649
56,573
UnitedHealthcare Community & State
10,670
11,054
33,038
32,471
UnitedHealthcare Global
2,446
2,360
7,501
7,342
OptumHealth
$
8,133
$
6,052
$
21,994
$
17,752
OptumInsight
2,617
2,254
7,145
6,508
OptumRx
18,454
17,437
55,194
50,484
Optum eliminations
(441
)
(352
)
(1,181
)
(1,026
)
(a)
Earnings from operations for Optum for the three and nine months ended September 30, 2019 included $748 and $2,062 for OptumHealth; $632 and $1,589 for OptumInsight; and $979 and $2,688 for OptumRx, respectively. Earnings from operations for Optum for the three and nine months ended September 30, 2018 included $622 and $1,680 for OptumHealth; $534 and $1,382 for OptumInsight; and $875 and $2,469 for OptumRx, respectively. UNITEDHEALTH GROUP SUPPLEMENTAL FINANCIAL INFORMATION - BUSINESS METRICS UNITEDHEALTHCARE CUSTOMER PROFILE (in thousands) People Served September 30,2019 June 30,2019 December 31,2018 September 30,2018 Commercial: Risk-based
8,605
8,325
8,495
8,450
Fee-based
19,230
19,090
18,420
18,365
Total Commercial
27,835
27,415
26,915
26,815
Medicare Advantage
5,230
5,190
4,945
4,915
Medicaid
5,965
6,360
6,450
6,630
Medicare Supplement (Standardized)
4,510
4,495
4,545
4,540
Total Public and Senior
15,705
16,045
15,940
16,085
Total UnitedHealthcare - Domestic Medical
43,540
43,460
42,855
42,900
International
5,845
6,070
6,220
6,070
Total UnitedHealthcare - Medical
49,385
49,530
49,075
48,970
Supplemental Data Medicare Part D stand-alone
4,415
4,430
4,710
4,725
OPTUM PERFORMANCE METRICS September 30,2019 June 30,2019 December 31,2018 September 30,2018 OptumHealth Consumers Served (in millions)
95
95
93
92
OptumInsight Contract Backlog (in billions)$
19.0
$
18.5
$
17.0
$
15.7
OptumRx Quarterly Adjusted Scripts (in millions)
325
343
348
331
Note: UnitedHealth Group served 136 million unique individuals across all businesses at September 30, 2019.UNITEDHEALTH GROUP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
(in millions, except per share data)
(unaudited)
ADJUSTED NET EARNINGS PER SHARE(a)
Three Months Ended September 30,
Nine Months Ended September 30,
Projected Year Ended December 31,
2019
2018
2019
2018
2019
GAAP net earnings attributable to UnitedHealth Group common shareholders$
3,538
$
3,188
$
10,298
$
8,946
$13,650 - $13,750
Intangible amortization
262
221
729
661
~1,000
Tax effect of intangible amortization
(64
)
(54
)
(180
)
(165
)
~(245)
Adjusted net earnings attributable to UnitedHealthGroup common shareholders
$
3,736
$
3,355
$
10,847
$
9,442
$14,405 - $14,505
GAAP diluted earnings per share
$
3.67
$
3.24
$
10.65
$
9.09
$14.15 - $14.25
Intangible amortization per share
0.27
0.22
0.75
0.67
~1.00
Tax effect per share of intangible amortization
(0.06
)
(0.05
)
(0.18
)
(0.16
)
~(0.25)
Adjusted diluted earnings per share$
3.88
$
3.41
$
11.22
$
9.60
$14.90 - $15.00
(a)
Adjusted net earnings per share is a non-GAAP financial measure. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, or superior to, financial measures prepared in accordance with GAAP. Adjusted net earnings per share excludes from the relevant GAAP metric, as applicable, intangible amortization and other items, if any, that do not relate to the Company's underlying business performance. Management believes that the use of adjusted net earnings per share provides investors and management useful information about the earnings impact of acquisition-related intangible asset amortization. As amortization fluctuates based on the size and timing of the Company’s acquisition activity, management believes this exclusion provides a more useful comparison of the Company's underlying business performance and trends from period to period. While intangible assets contribute to the Company’s revenue generation, the intangible amortization is not directly related. Therefore, the related revenues are included in adjusted earnings per share.
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View source version on businesswire.com: https://www.businesswire.com/news/home/20191015005470/en/
Investors: Brett Manderfeld Senior Vice President 952-936-7216
Media: Matt Stearns Senior Vice President 202-276-0085
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