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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 | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 492.45 | 647 | 12:48:47 |
During the third quarter of 2020, UnitedHealth Group (NYSE: UNH) saw continued growth, led by Optum and the UnitedHealthcare public-sector and senior benefits businesses, even as the Company continued its expansive COVID-19 response efforts supporting patients, care providers, customers and communities.
“The people of UnitedHealth Group continue to deliver more innovative and modern solutions for customers, physicians and consumers, while responding to the needs of the people and communities affected by the pandemic,” said David S. Wichmann, chief executive officer of UnitedHealth Group. “We’re encouraged to see those we serve respond to the incentives we offered to safely seek care as the health system continued to recover in the quarter.”
As expected, strong underlying performance across business segments continued to be impacted by the voluntary consumer and customer assistance initiatives undertaken by the Company. Net earnings of $3.30 per share and adjusted earnings of $3.51 per share declined 10%, while care patterns disrupted by the pandemic moved closer to normal levels. The Company is updating its full year earnings per share outlook for 2020 to net earnings of $15.65 to $15.90 per share and adjusted net earnings of $16.50 to $16.75 per share.
The Company’s efforts to proactively help patients obtain the care they need continues, along with additional investments to support those affected by COVID-19. Since the crisis onset, the enterprise has been mobilized to maintain comprehensive front-line care; develop innovative methods and protocols for detection, testing, treatment and vaccine discovery; and support the broader health system and communities in need. During the third quarter, the Company continued to work with local and state leaders across the country to expand testing; contact tracing; and education, medical and mental health support, especially in under-resourced communities. The Company continues to invest and partner with premier research institutions to improve outcomes for minority populations affected during the crisis.
Quarterly Financial Performance
Three Months Ended
September 30, 2020
September 30, 2019
June 30, 2020
Revenues
$65.1 billion
$60.4 billion
$62.1 billion
Earnings from Operations
$4.7 billion
$5.0 billion
$9.2 billion
Net Margin
4.9%
5.9%
10.7%
UnitedHealthcare provides health care benefits globally, serving individuals and employers, and Medicare and Medicaid beneficiaries. UnitedHealthcare is dedicated to improving the value 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, 2020
September 30, 2019
June 30, 2020
Revenues
$50.4 billion
$48.1 billion
$49.1 billion
Earnings from Operations
$2.1 billion
$2.7 billion
$7.0 billion
Operating Margin
4.1%
5.5%
14.3%
Optum is a health services business serving the global health care marketplace, including payers, care providers, 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 experience.
Quarterly Financial Performance
Three Months Ended
September 30, 2020
September 30, 2019
June 30, 2020
Revenues
$34.9 billion
$28.8 billion
$32.7 billion
Earnings from Operations
$2.6 billion
$2.4 billion
$2.2 billion
Operating Margin
7.4%
8.2%
6.8%
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 Investor Relations page of the company’s website (www.unitedhealthgroup.com). Following the call, a webcast replay will be available on the same site through October 28, 2020. The conference call replay can also be accessed by dialing 1-800-839-5493. This earnings release and the Form 8-K dated October 14, 2020, can also be accessed from the Investor Relations 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: risks associated with public health crises, large-scale medical emergencies and pandemics, such as the COVID-19 pandemic; 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; failure to maintain effective and efficient information systems or if our technology products do not operate as intended; cyberattacks, 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; 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, 2020 - 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 Measure UNITEDHEALTH GROUP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (unaudited) Three Months EndedSeptember 30, Nine Months EndedSeptember 30,2020
2019
2020
2019
Revenues Premiums$50,863
$47,397
$150,897
$142,074
Products8,777
7,546
25,455
23,971
Services5,124
4,942
14,265
13,756
Investment and other income351
466
1,057
1,453
Total revenues65,115
60,351
191,674
181,254
Operating costs Medical costs41,636
39,041
117,314
117,164
Operating costs10,174
8,960
30,190
25,892
Cost of products sold7,935
6,627
23,123
21,606
Depreciation and amortization719
709
2,159
2,002
Total operating costs60,464
55,337
172,786
166,664
Earnings from operations4,651
5,014
18,888
14,590
Interest expense(395)
(449)
(1,262)
(1,267)
Earnings before income taxes4,256
4,565
17,626
13,323
Provision for income taxes(1,000)
(936)
(4,209)
(2,752)
Net earnings3,256
3,629
13,417
10,571
Earnings attributable to noncontrolling interests(84)
(91)
(226)
(273)
Net earnings attributable to UnitedHealth Group common shareholders$3,172
$3,538
$13,191
$10,298
Diluted earnings per share attributable to UnitedHealth Group common shareholders$3.30
$3.67
$13.73
$10.65
Adjusted earnings per share attributable to UnitedHealth Group common shareholders (a)$3.51
$3.88
$14.36
$11.22
Diluted weighted-average common shares outstanding962
963
961
967
(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,
2020
2019
Assets Cash and short-term investments$20,809
$14,245
Accounts receivable, net12,171
11,822
Other current assets21,841
16,567
Total current assets54,821
42,634
Long-term investments39,184
37,209
Other long-term assets96,964
94,046
Total assets$190,969
$173,889
Liabilities, redeemable noncontrolling interests and equity Medical costs payable$21,167
$21,690
Short-term borrowings and current maturities of long-term debt3,899
3,870
Other current liabilities41,531
36,222
Total current liabilities66,597
61,782
Long-term debt, less current maturities39,895
36,808
Other long-term liabilities14,526
13,137
Redeemable noncontrolling interests1,847
1,726
Equity68,104
60,436
Total liabilities, redeemable noncontrolling interests and equity$190,969
$173,889
UNITEDHEALTH GROUP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) Nine Months EndedSeptember 30,2020
2019
Operating Activities Net earnings$13,417
$10,571
Noncash items: Depreciation and amortization2,159
2,002
Deferred income taxes and other167
(4)
Share-based compensation527
525
Net changes in operating assets and liabilities(197)
(836)
Cash flows from operating activities16,073
12,258
Investing Activities Purchases of investments, net of sales and maturities(1,386)
(2,028)
Purchases of property, equipment and capitalized software(1,477)
(1,421)
Cash paid for acquisitions, net(4,326)
(8,200)
Other, net(165)
338
Cash flows used for investing activities(7,354)
(11,311)
Financing Activities Common share repurchases(2,541)
(5,101)
Dividends paid(3,400)
(2,908)
Net change in short-term borrowings and long-term debt2,941
8,192
Other, net1,006
404
Cash flows (used for) from financing activities(1,994)
587
Effect of exchange rate changes on cash and cash equivalents(160)
(37)
Increase in cash and cash equivalents6,565
1,497
Cash and cash equivalents, beginning of period10,985
10,866
Cash and cash equivalents, end of period$17,550
$12,363
UNITEDHEALTH GROUP SUPPLEMENTAL FINANCIAL INFORMATION - BUSINESSES (in millions, except percentages) (unaudited) Three Months EndedSeptember 30, Nine Months EndedSeptember 30,2020
2019
2020
2019
Revenues UnitedHealthcare$50,373
$48,105
$150,548
$145,595
Optum34,923
28,763
100,457
83,152
Eliminations(20,181)
(16,517)
(59,331)
(47,493)
Total consolidated revenues$65,115
$60,351
$191,674
$181,254
Earnings from Operations UnitedHealthcare$2,068
$2,655
$11,963
$8,251
Optum (a)2,583
2,359
6,925
6,339
Total consolidated earnings from operations$4,651
$5,014
$18,888
$14,590
Operating Margin UnitedHealthcare4.1%
5.5%
7.9%
5.7%
Optum7.4%
8.2%
6.9%
7.6%
Consolidated operating margin7.1%
8.3%
9.9%
8.0%
Revenues UnitedHealthcare Employer & Individual$14,081
$14,291
$41,324
$42,407
UnitedHealthcare Medicare & Retirement22,606
20,698
68,613
62,649
UnitedHealthcare Community & State11,820
10,670
34,796
33,038
UnitedHealthcare Global1,866
2,446
5,815
7,501
OptumHealth$10,499
$8,133
$28,830
$21,994
OptumInsight2,767
2,617
7,893
7,145
OptumRx22,081
18,454
65,009
55,194
Optum eliminations(424)
(441)
(1,275)
(1,181)
(a) Earnings from operations for Optum for the three and nine months ended September 30, 2020 included $835 and $2,388 for OptumHealth; $785 and $1,882 for OptumInsight; and $963 and $2,655 for OptumRx, respectively. 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. UNITEDHEALTH GROUP SUPPLEMENTAL FINANCIAL INFORMATION - BUSINESS METRICS UNITEDHEALTHCARE CUSTOMER PROFILE (in thousands) People Served September 30, 2020 June 30, 2020 December 31, 2019 September 30, 2019 Commercial: Risk-based7,950
8,065
8,575
8,605
Fee-based18,400
18,705
19,185
19,230
Total Commercial26,350
26,770
27,760
27,835
Medicare Advantage5,670
5,605
5,270
5,230
Medicaid6,435
6,210
5,900
5,965
Medicare Supplement (Standardized)4,450
4,450
4,500
4,510
Total Public and Senior16,555
16,265
15,670
15,705
Total UnitedHealthcare - Domestic Medical42,905
43,035
43,430
43,540
Global5,285
5,365
5,720
5,845
Total UnitedHealthcare - Medical48,190
48,400
49,150
49,385
Supplemental DataMedicare Part D stand-alone
4,075
4,120
4,405
4,415
OPTUM PERFORMANCE METRICS September 30, 2020 June 30, 2020 December 31, 2019 September 30, 2019 OptumHealth Consumers Served (in millions)
98
97
96
95
OptumInsight Contract Backlog (in billions)$19.9
$19.4
$19.3
$19.0
OptumRx Quarterly Adjusted Scripts (in millions)325
316
333
325
Note: UnitedHealth Group served 140 million unique individuals across all businesses at September 30, 2020.UNITEDHEALTH GROUP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
(in millions, except per share data)
(unaudited)
ADJUSTED NET EARNINGS PER SHARE(a)
Three Months EndedSeptember 30, Nine Months EndedSeptember 30, ProjectedYear EndedDecember 31,2020
2019
2020
2019
2020
GAAP net earnings attributable to UnitedHealth Group common shareholders$3,172
$3,538
$13,191
$10,298
$15,025 - $15,275 Intangible amortization
269
262
801
729
~1,070 Tax effect of intangible amortization
(64
)
(64
)
(194
)
(180
)
~(260) Adjusted net earnings attributable to UnitedHealth Group common shareholders$3,377
$3,736
$13,798
$10,847
$15,835 - $16,085 GAAP diluted earnings per share
$3.30
$3.67
$13.73
$10.65
$15.65 - $15.90 Intangible amortization per share
0.28
0.27
0.83
0.75
~1.10 Tax effect per share of intangible amortization
(0.07
)
(0.06
)
(0.20
)
(0.18
)
~(0.25) Adjusted diluted earnings per share$3.51
$3.88
$14.36
$11.22
$16.50 - $16.75
(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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20201014005337/en/
Investors: Brett Manderfeld Senior Vice President 952-936-7216
Media: Matt Stearns Senior Vice President 202-276-0085
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