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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 | |
---|---|---|---|---|---|---|---|---|
1.84 | 0.37% | 495.70 | 497.23 | 491.40 | 492.00 | 2,727,018 | 01:00:00 |
UnitedHealth Group (NYSE:UNH) reported third quarter results reflecting well-balanced growth and steady execution across its diverse businesses.
“Our growth indicators are positive as we conclude 2016, and we expect to be well positioned in 2017 to better serve consumers and deliver more value to the health system overall,” said Stephen J. Hemsley, chief executive officer of UnitedHealth Group.
The Company increased its outlook for 2016 GAAP net earnings to approximately $7.45 per share and adjusted net earnings to approximately $8.00 per share, from its previous range of $7.25 to $7.40 in GAAP net earnings per share and $7.80 to $7.95 in adjusted net earnings per share.
Quarterly Financial PerformanceThree Months Ended
September 30, September 30, June 30,2016
2015
2016
Revenues $46.3 billion $41.5 billion $46.5 billion Earnings From Operations $3.6 billion $3.0 billion $3.2 billion Net Margin 4.3% 3.8% 3.8%UnitedHealthcare provides health care benefits, serving individuals and employers ranging from sole proprietorships to large, multi-site and national and international organizations; delivers health and well-being benefits to Medicare beneficiaries and retirees; manages health care benefit programs on behalf of state Medicaid and community programs; and serves the nation’s military service members, retirees and their families through the TRICARE program.
Quarterly Financial PerformanceThree Months Ended
September 30, September 30, June 30,2016
2015
2016
Revenues $37.2 billion $32.8 billion $37.6 billion Earnings From Operations $2.1 billion $1.9 billion $1.9 billion Operating Margin 5.7% 5.7% 5.2%UnitedHealthcare Employer & Individual
UnitedHealthcare Medicare & Retirement
UnitedHealthcare Community & State
Optum is a health services business serving the broad health care marketplace, including payers, care providers, employers, governments, life sciences companies and consumers. Using advanced data analytics and technology, Optum’s people help improve overall health system performance: optimizing care quality, reducing costs and improving the consumer experience and care provider performance.
Quarterly Financial Performance
Three Months Ended
September 30, September 30, June 30,2016
2015
2016
Revenues $21.1 billion $19.3 billion $20.6 billion Earnings From Operations $1.5 billion $1.1 billion $1.3 billion Operating Margin 6.9% 5.9% 6.1%About UnitedHealth Group
UnitedHealth Group (NYSE: UNH) is a diversified health and well-being 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 November 1, 2016. The conference call replay can also be accessed by dialing 1-800-283-4799. This earnings release and the Form 8-K dated October 18, 2016 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 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 within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). These statements are intended to take advantage of the “safe harbor” provisions of the PSLRA. Generally the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “forecast,” “outlook,” “plan,” “project,” “should” and similar expressions identify forward-looking statements, which generally are not historical in nature. These statements may contain information about financial prospects, economic conditions and trends and involve risks and uncertainties. We caution that actual results could differ materially from those that management expects, depending on the outcome of certain factors.
Some factors that could cause actual results to differ materially from results discussed or implied in the forward-looking statements include: our ability to effectively estimate, price for and manage our medical costs, including the impact of any new coverage requirements; new laws or regulations, or changes in existing laws or regulations, or their enforcement or application, including increases in medical, administrative, technology or other costs or decreases in enrollment resulting from U.S., Brazilian and other jurisdictions’ regulations affecting the health care industry; assessments for insolvent payers under state guaranty fund laws; our ability to achieve improvement in CMS Star ratings and other quality scores that impact revenue; reductions in revenue or delays to cash flows received under Medicare, Medicaid and TRICARE programs, including sequestration and the effects of a prolonged U.S. government shutdown or debt ceiling constraints; changes in Medicare, including changes in payment methodology, the CMS Star ratings program or the application of risk adjustment data validation audits; our participation in federal and state health insurance exchanges which entail uncertainties associated with mix and volume of business; cyber-attacks or other privacy or data security incidents; failure to comply with privacy and data security regulations; regulatory and other risks and uncertainties of the pharmacy benefits management industry; competitive pressures, which could affect our ability to maintain or increase our market share; changes in or challenges to our public sector contract awards; our ability to execute contracts on competitive terms with physicians, hospitals and other service providers; failure to achieve targeted operating cost productivity improvements, including savings resulting from technology enhancement and administrative modernization; increases in costs and other liabilities associated with increased litigation, government investigations, audits or reviews; failure to manage successfully our strategic alliances or complete or receive anticipated benefits of acquisitions and other strategic transactions, including our acquisition of Catamaran; fluctuations in foreign currency exchange rates on our reported shareholders’ equity and results of operations; downgrades in our credit ratings; adverse economic conditions, including decreases in enrollment resulting from increases in the unemployment rate and commercial attrition; the performance of our investment portfolio; impairment of the value of our goodwill and intangible assets in connection with dispositions or if estimated future results do not adequately support goodwill and intangible assets recorded for our existing businesses or the businesses that we acquire; increases in health care costs resulting from large-scale medical emergencies; 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 the debt or capital markets to fund our obligations, to maintain our debt to total capital ratio at targeted levels, to maintain our quarterly dividend payment cycle or to continue repurchasing shares of our common stock.
This list of important factors is not intended to be exhaustive. We discuss certain of these matters more fully, as well as certain risk factors that may affect our business operations, financial condition and results of operations, in our filings with the Securities and Exchange Commission, including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Any or all forward-looking statements we make may turn out to be wrong, and can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. 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 future 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 applicable securities laws.
UNITEDHEALTH GROUP
Earnings Release Schedules and Supplementary Information Three and Nine Months Ended September 30, 2016 - 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 Measures UNITEDHEALTH GROUPCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in millions, except per share data)(unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenues Premiums $ 36,142 $ 31,801 $ 107,366 $ 95,436 Products 6,696 6,482 19,699 8,935 Services 3,264 3,036 9,673 8,607 Investment and other income 191 170 567 530 Total revenues 46,293 41,489 137,305 113,508 Operating costs Medical costs 29,040 25,729 87,342 77,646 Operating costs 7,033 6,178 20,584 17,750 Cost of products sold 6,125 6,112 18,108 8,350 Depreciation and amortization 515 452 1,528 1,209 Total operating costs 42,713 38,471 127,562 104,955 Earnings from operations 3,580 3,018 9,743 8,553 Interest expense (269 ) (229 ) (799 ) (530 ) Earnings before income taxes 3,311 2,789 8,944 8,023 Provision for income taxes (1,333 ) (1,171 ) (3,579 ) (3,407 ) Net earnings 1,978 1,618 5,365 4,616 Earnings attributable to noncontrolling interests (10 ) (21 ) (32 ) (21 )Net earnings attributable to UnitedHealth Group common shareholders
$ 1,968 $ 1,597 $ 5,333 $ 4,595Diluted earnings per share attributable to UnitedHealth Group common shareholders
$ 2.03 $ 1.65 $ 5.51 $ 4.75Adjusted earnings per share attributable to UnitedHealth Group common shareholders (a)
$ 2.17 $ 1.77 $ 5.94 $ 5.05 Diluted weighted-average common shares outstanding 969 967 968 967 (a) See page 6 for a reconciliation of the non-GAAP measure UNITEDHEALTH GROUPCONDENSED CONSOLIDATED BALANCE SHEETS(in millions)(unaudited) September 30,2016 December 31,2015 Assets Cash and short-term investments $ 15,667 $ 12,911 Accounts receivable, net 7,347 6,523 Other current assets 12,754 12,205 Total current assets 35,768 31,639 Long-term investments 23,324 18,792 Other long-term assets 64,550 60,823 Total assets $ 123,642 $ 111,254 Liabilities, redeemable noncontrolling interests and equity Medical costs payable $ 16,500 $ 14,330 Commercial paper and current maturities of long-term debt 7,202 6,634 Other current liabilities 27,394 21,934 Total current liabilities 51,096 42,898 Long-term debt, less current maturities 26,022 25,331 Other long-term liabilities 7,033 7,564 Redeemable noncontrolling interests 1,937 1,736 Equity 37,554 33,725 Total liabilities, redeemable noncontrolling interests and equity $ 123,642 $ 111,254 UNITEDHEALTH GROUPCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in millions)(unaudited) Nine Months EndedSeptember 30,
2016 2015 Operating Activities Net earnings $ 5,365 $ 4,616 Noncash items: Depreciation and amortization 1,528 1,209 Deferred income taxes and other (473 ) (257 ) Share-based compensation 369 306 Net changes in operating assets and liabilities 4,415 355 Cash flows from operating activities 11,204 6,229 Investing Activities Purchases of investments, net of sales and maturities (4,769 ) (114 ) Purchases of property, equipment and capitalized software (1,220 ) (1,072 ) Cash paid for acquisitions, net (2,727 ) (16,183 ) Other, net (25 ) (51 ) Cash flows used for investing activities (8,741 ) (17,420 ) Financing Activities Common share repurchases (1,117 ) (1,130 ) Dividends paid (1,666 ) (1,310 ) Net change in commercial paper and long-term debt 1,077 14,231 Other, net 1,046 39 Cash flows (used for) from financing activities (660 ) 11,830 Effect of exchange rate changes on cash and cash equivalents 70 (151 ) Increase in cash and cash equivalents 1,873 488 Cash and cash equivalents, beginning of period 10,923 7,495 Cash and cash equivalents, end of period $ 12,796 $ 7,983 UNITEDHEALTH GROUPSUPPLEMENTAL FINANCIAL INFORMATION - BUSINESSES(in millions, except percentages)(unaudited) Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2016 2015 2016 2015 Revenues UnitedHealthcare $ 37,177 $ 32,817 $ 110,633 $ 98,513 Optum 21,119 19,302 61,426 45,705 Eliminations (12,003 ) (10,630 ) (34,754 ) (30,710 ) Total consolidated revenues $ 46,293 $ 41,489 $ 137,305 $ 113,508 Earnings from Operations UnitedHealthcare $ 2,113 $ 1,876 $ 5,909 $ 5,805 Optum (a) 1,467 1,142 3,834 2,748 Total consolidated earnings from operations $ 3,580 $ 3,018 $ 9,743 $ 8,553 Operating Margin UnitedHealthcare 5.7 % 5.7 % 5.3 % 5.9 % Optum 6.9 % 5.9 % 6.2 % 6.0 % Consolidated operating margin 7.7 % 7.3 % 7.1 % 7.5 % Revenues UnitedHealthcare Employer & Individual $ 13,251 $ 11,871 $ 39,580 $ 35,139 UnitedHealthcare Medicare & Retirement 13,927 12,267 42,286 37,607 UnitedHealthcare Community & State 8,312 7,392 24,303 21,502 UnitedHealthcare Global 1,687 1,287 4,464 4,265 OptumHealth 4,332 3,532 12,395 10,259 OptumInsight 1,825 1,585 5,254 4,384 OptumRx 15,237 14,407 44,583 31,615 Optum eliminations (275 ) (222 ) (806 ) (553 ) (a) Earnings from operations for Optum for the three and nine months ended September 30, 2016 included $404 and $1,008 for OptumHealth; $371 and $950 for OptumInsight; and $692 and $1,876 for OptumRx, respectively. Earnings from operations for Optum for the three and nine months ended September 30, 2015 included $363 and $850 for OptumHealth; $289 and $782 for OptumInsight; and $490 and $1,116 for OptumRx, respectively. UNITEDHEALTH GROUPSUPPLEMENTAL FINANCIAL INFORMATION - BUSINESS METRICS UNITEDHEALTHCARE CUSTOMER PROFILE(in thousands) People Served September 30, 2016 June 30, 2016 December 31, 2015 September 30, 2015 Commercial risk-based 8,750 8,695 8,285 8,180 Commercial fee-based, including TRICARE 21,735 21,790 21,445 21,350
Total Commercial 30,485 30,485 29,730 29,530 Medicare Advantage 3,600 3,550 3,235 3,225 Medicaid 5,790 5,675 5,305 5,305 Medicare Supplement (Standardized) 4,245 4,215 4,035 4,010 Total Public and Senior 13,635 13,440 12,575 12,540 Total UnitedHealthcare - Domestic Medical 44,120 43,925 42,305 42,070 International 3,970 4,050 4,090 4,010 Total UnitedHealthcare - Medical 48,090 47,975 46,395 46,080 Supplemental Data Medicare Part D stand-alone 4,945 4,940 5,060 5,075 OPTUM PERFORMANCE METRICS September 30, 2016 June 30, 2016 December 31, 2015 September 30, 2015 OptumHealth Consumers Served (in millions) 81 80 78 77 OptumInsight Contract Backlog (in billions) $ 12.6 $ 11.3 $ 10.4 $ 10.2 OptumRx Quarterly Adjusted Scripts (in millions) 252 250 258 226 Note: UnitedHealth Group served 133 million unique individuals across all businesses at September 30, 2016, 132 million at June 30, 2016, 129 million at December 31, 2015, and 127 million at September 30, 2015. UNITEDHEALTH GROUP Reconciliation of Non-GAAP Financial Measures - Adjusted Net Earnings per Share - Adjusted Cash Flows from Operations Use of Non-GAAP Financial Measures Adjusted net earnings per share and adjusted cash flows from operations are non-GAAP financial measures. 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. 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.
Management believes that the use of adjusted cash flows from operations provides investors and management with useful information to compare our cash flows from operations for the current period to that of other periods, when the Company does not receive its monthly payment from the Centers for Medicare and Medicaid Services (CMS) in the applicable quarter. CMS generally remits their monthly payments on the first calendar day of the applicable month. However, if the first calendar day of the month falls on a weekend or a holiday, CMS has typically paid the Company on the last business day of the preceding calendar month. As such, quarterly operating cash flows determined in accordance with GAAP may occasionally include CMS premium payments for two months or four months. Adjusted cash flows from operating activities presents operating cash flows assuming all CMS payments were received on the first calendar day of the applicable month.
UNITEDHEALTH GROUPRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(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
2016 2015 2016 2015 December 31, 2016 GAAP net earnings $ 1,968 $ 1,597 $ 5,333 $ 4,595 ~$7,200 Intangible amortization 222 180 660 445 ~880 Tax effect of intangible amortization (83 ) (63 ) (241 ) (156 ) ~(325) Adjusted net earnings $ 2,107 $ 1,714 $ 5,752 $ 4,884 ~$7,750 GAAP diluted earnings per share $ 2.03 $ 1.65 $ 5.51 $ 4.75 $ 7.45 Intangible amortization per share 0.23 0.19 0.68 0.46 ~0.90 Tax effect of intangible amortization per share (0.09 ) (0.07 ) (0.25 ) (0.16 ) ~(0.35) Adjusted diluted earnings per share $ 2.17 $ 1.77 $ 5.94 $ 5.05 $ 8.00(a)
GAAP and adjusted net earnings are attributable to UnitedHealth Group common shareholders. ADJUSTED CASH FLOWS FROM OPERATIONSThree MonthsEndedSeptember 30,2016
Nine MonthsEndedSeptember 30,2016
GAAP cash flows from operations $ 7,203 $ 11,204 Less: October CMS premium payments received in September (3,777 ) (3,777 ) Adjusted cash flows from operations $ 3,426 $ 7,427Click here to subscribe to Mobile Alerts for UnitedHealth Group.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161018005653/en/
UnitedHealth GroupInvestors:Brett Manderfeld, 952-936-7216Vice PresidentorJohn S. Penshorn, 952-936-7214Senior Vice PresidentorMedia:Tyler Mason, 424-333-6122Vice President
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