- Full Year Revenues of $257.1 Billion Grew $15.0 Billion or 6%,
led by 21% at Optum
- Full Year and Fourth Quarter Net Earnings Per Share of $16.03
and $2.30
- Full Year and Fourth Quarter Adjusted Net Earnings Per Share of
$16.88 and $2.52
- Results Reflect COVID-19 Impacts and Related Assistance
Initiatives
Fundamental execution was strong across UnitedHealth Group
(NYSE: UNH) in the fourth quarter and throughout the full year
2020, led by Optum and by UnitedHealthcare’s community and senior
benefit businesses, even as the Company delivered expansive
voluntary relief efforts for consumers, care providers and
customers across the health system.
“I couldn’t be prouder of the more than 325,000 women and men of
this enterprise for their role in advancing a higher performing
health system during these times of unprecedented challenges,” said
David S. Wichmann, chief executive officer of UnitedHealth Group.
“We are grateful for the human spirit and resolve of our people,
including our 125,000 clinicians who, with other frontline health
care workers, demonstrated extraordinary collaboration, compassion
and innovation.”
The full year and fourth quarter results reflect continued
strong performance, impacted by COVID-19 care costs, continued
voluntary consumer and customer assistance initiatives and other
pandemic-related factors. As expected, fourth quarter net earnings
of $2.30 per share and adjusted earnings of $2.52 per share
declined as care patterns normalized, while COVID-19 costs rose,
and further rebate effects were recognized. The 2020 results were
consistent with the outlook provided by the Company at its December
1st, 2020 Investor Conference.
The Company affirmed its recently issued full year earnings
outlook for 2021, including net earnings of $16.90 to $17.40 per
share and adjusted net earnings of $17.75 to $18.25 per share. As
previously discussed, this outlook includes approximately $1.80 per
share in potential net unfavorable impact to accommodate continuing
COVID-19 effects, such as: testing and treatment costs; the
residual impact of people deferring care in 2020; and unemployment
and other economy-driven factors.
Quarterly and Annual Financial
Performance
Three Months Ended
Year Ended
December 31, 2020
December 31, 2019
September 30, 2020
December 31, 2020
December 31, 2019
Revenues
$65.5 billion
$60.9 billion
$65.1 billion
$257.1 billion
$242.2 billion
Earnings from Operations
$3.5 billion
$5.1 billion
$4.7 billion
$22.4 billion
$19.7 billion
Net Margin
3.4%
5.8%
4.9%
6.0%
5.7%
- UnitedHealth Group’s full year 2020 revenues of $257.1 billion
grew $15.0 billion or 6.2% year-over-year, reflecting broad-based
revenue growth across the businesses.
- Full year 2020 earnings from operations grew $2.7 billion or
13.8% year-over-year to $22.4 billion, with both UnitedHealthcare
and Optum contributing to the expansion.
- The full year 2020 medical care ratio of 79.1% declined from
82.5% in 2019 primarily impacted by the return of the health
insurance tax and disrupted care patterns earlier in the year,
offset by the Company’s COVID-19 assistance measures and testing
and treatment costs. Favorable medical reserve development was $850
million in the quarter, with $770 million related to 2020. Year-end
days claims payable were 47.8 days compared to 46.8 days in the
third quarter 2020 and 50.8 days at year end 2019, with the
year-over-year comparison impacted by timing factors, including the
Company’s voluntary acceleration of payments to assist care
providers.
- The full year 2020 operating cost ratio of 16.2% increased from
14.5% in 2019 as continued operating efficiency gains were offset
by the return of the health insurance tax, COVID-19 response
efforts, business mix and increased investments in service,
innovation and growth.
- Cash flows from operations in 2020 of $22.2 billion, or 1.4
times net income, grew 20.1% year-over-year. Fourth quarter cash
flows were stronger than anticipated, partly on timing
factors.
- Return on equity of 24.9% in 2020 reflected the Company’s
strong overall operating performance and efficient capital
structure.
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 and Annual Financial
Performance
Three Months Ended
Year Ended
December 31, 2020
December 31, 2019
September 30, 2020
December 31, 2020
December 31, 2019
Revenues
$50.3 billion
$48.2 billion
$50.4 billion
$200.9 billion
$193.8 billion
Earnings from Operations
$396 million
$2.1 billion
$2.1 billion
$12.4 billion
$10.3 billion
Operating Margin
0.8%
4.3%
4.1%
6.2%
5.3%
- UnitedHealthcare full year revenues of $200.9 billion compare
to $193.8 billion last year, as growth in serving community and
senior programs was partially offset by commercial enrollment
declines. UnitedHealthcare community and senior program revenues
grew by 8.0% in 2020, with an additional 1.2 million people served
in Medicaid and Medicare Advantage, while commercial revenue growth
was impacted by pandemic-related economic factors.
- Full year operating earnings were $12.4 billion compared to
$10.3 billion last year, with the care pattern disruption which
occurred in the second quarter offset by the Company’s efforts to
help people obtain needed care, increased COVID-19 testing and care
costs and rebate and customer assistance effects.
- Fourth quarter operating results reflect restoration of care
patterns, the Company’s continued efforts to provide support and
relief efforts to correct economic imbalances caused by the
pandemic and additional reserves for rebates and related activity
as calendar year assessments were concluded.
- UnitedHealthcare growth highlights for 2021 include: serving an
expected up to 1.5 million more people in total, with growth in
Individual and Group Medicare Advantage and Dual Special Needs
Plans approaching 900,000 people; Medicaid growth with new market
entries in Kentucky, Indiana, and North Carolina along with a
strong proposal pipeline for both existing and new states;
commercial market and specialty expansion, with newly introduced
consumer-centric offerings, such as physician-led plans, expected
to grow again at a strong-double digit pace.
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 and Annual Financial
Performance
Three Months Ended
Year Ended
December 31, 2020
December 31, 2019
September 30, 2020
December 31, 2020
December 31, 2019
Revenues
$35.9 billion
$29.8 billion
$34.9 billion
$136.3 billion
$113.0 billion
Earnings from Operations
$3.1 billion
$3.0 billion
$2.6 billion
$10.0 billion
$9.4 billion
Operating Margin
8.7%
10.1%
7.4%
7.4%
8.3%
- Optum full year revenues of $136.3 billion compare to $113.0
billion last year and full year operating earnings of $10.0 billion
compare to $9.4 billion last year.
- OptumHealth served 98 million people at year end, compared to
96 million a year ago and revenue per consumer served increased 29%
year-over-year for full year 2020 and in the fourth quarter, driven
by further expansion of people served in value-based care
arrangements and the increasing acuity of the care services
provided.
- OptumInsight’s revenue backlog increased by nearly $1.0 billion
in 2020 to $20.2 billion, driven by growth in managed services.
OptumInsight and Change Healthcare (NASDAQ: CHNG) recently
announced they would combine. The combination will more effectively
connect and simplify core clinical, administrative and payment
processes, resulting in better health outcomes and experiences for
everyone, at lower cost.
- During 2020 OptumRx continued to build its growing pharmacy
care services offerings, including community-based behavioral
pharmacies, e-commerce services, home infusion services and
specialty pharmacy. Script volume in the established pharmacy
benefits management business began to approach more normal levels
in the fourth quarter, rising 6 million from the third quarter and
15 million from the second quarter to 331 million.
- Optum growth expectations for 2021 include: continued expansion
of value-based care arrangements, strong growth serving seniors at
Optum Care through clinic-based and in-home services and expansion
of ambulatory care surgery service lines; OptumRx’s ongoing
expansion of multi-dose packaging, alternate site infusion services
and retail pharmacy dispensing; growth in OptumInsight’s pipeline
for comprehensive managed services, including revenue management,
information technology, payment integrity and data analytics.
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 February 3, 2021. The
conference call replay can also be accessed by dialing
1-855-859-2056, Conference ID: 5181037. This earnings release and
the Form 8-K dated January 20, 2021 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 Year Ended December 31, 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 EndedDecember 31, Year EndedDecember 31,
2020
2019
2020
2019
Revenues Premiums
$50,581
$47,625
$201,478
$189,699
Products
8,690
7,626
34,145
31,597
Services
5,751
5,217
20,016
18,973
Investment and other income
445
433
1,502
1,886
Total revenues
65,467
60,901
257,141
242,155
Operating costs Medical costs
42,082
39,276
159,396
156,440
Operating costs
11,514
9,301
41,704
35,193
Cost of products sold
7,622
6,511
30,745
28,117
Depreciation and amortization
732
718
2,891
2,720
Total operating costs
61,950
55,806
234,736
222,470
Earnings from operations
3,517
5,095
22,405
19,685
Interest expense
(401)
(437)
(1,663)
(1,704)
Earnings before income taxes
3,116
4,658
20,742
17,981
Provision for income taxes
(764)
(990)
(4,973)
(3,742)
Net earnings
2,352
3,668
15,769
14,239
Earnings attributable to noncontrolling interests
(140)
(127)
(366)
(400)
Net earnings attributable to UnitedHealth Group common
shareholders
$2,212
$3,541
$15,403
$13,839
Diluted earnings per share attributable to UnitedHealth Group
common shareholders
$2.30
$3.68
$16.03
$14.33
Adjusted earnings per share attributable to UnitedHealth Group
common shareholders (a)
$2.52
$3.90
$16.88
$15.11
Diluted weighted-average common shares outstanding
961
962
961
966
(a) See page 6 for a reconciliation of the non-GAAP measure
UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS (in millions)
(unaudited)
December 31, December
31,
2020
2019
Assets Cash and short-term investments
$19,781
$14,245
Accounts receivable, net
12,870
11,822
Other current assets
21,067
16,567
Total current assets
53,718
42,634
Long-term investments
41,242
37,209
Other long-term assets
102,329
94,046
Total assets
$197,289
$173,889
Liabilities, redeemable noncontrolling interests and equity
Medical costs payable
$21,872
$21,690
Short-term borrowings and current maturities of long-term debt
4,819
3,870
Other current liabilities
45,729
36,222
Total current liabilities
$72,420
$61,782
Long-term debt, less current maturities
38,648
36,808
Other long-term liabilities
15,682
13,137
Redeemable noncontrolling interests
2,211
1,726
Equity
68,328
60,436
Total liabilities, redeemable noncontrolling interests and equity
$197,289
$173,889
UNITEDHEALTH GROUP CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (in millions) (unaudited)
Year EndedDecember 31,
2020
2019
Operating Activities Net earnings
$15,769
$14,239
Noncash items: Depreciation and amortization
2,891
2,720
Deferred income taxes and other
(60)
124
Share-based compensation
679
697
Net changes in operating assets and liabilities
2,895
683
Cash flows from operating activities
22,174
18,463
Investing Activities Purchases of investments, net of
sales and maturities
(2,836)
(2,504)
Purchases of property, equipment and capitalized software
(2,051)
(2,071)
Cash paid for acquisitions, net
(7,139)
(8,343)
Other, net
(506)
219
Cash flows used for investing activities
(12,532)
(12,699)
Financing Activities Common share repurchases
(4,250)
(5,500)
Dividends paid
(4,584)
(3,932)
Net change in short-term borrowings and long-term debt
2,586
3,994
Other, net
2,658
(187)
Cash flows used for financing activities
(3,590)
(5,625)
Effect of exchange rate changes on cash and cash equivalents
(116)
(20)
Increase in cash and cash equivalents
5,936
119
Cash and cash equivalents, beginning of period
10,985
10,866
Cash and cash equivalents, end of period
$16,921
$10,985
SUPPLEMENTAL FINANCIAL INFORMATION - BUSINESSES (in
millions, except percentages) (unaudited)
Three Months EndedDecember 31, Year EndedDecemeber
31,
2020
2019
2020
2019
Revenues UnitedHealthcare
$50,327
$48,247
$200,875
$193,842
Optum
35,851
29,798
136,308
112,950
Eliminations
(20,711)
(17,144)
(80,042)
(64,637)
Total consolidated revenues
$65,467
$60,901
$257,141
$242,155
Earnings from Operations UnitedHealthcare
$396
$2,075
$12,359
$10,326
Optum (a)
3,121
3,020
10,046
9,359
Total consolidated earnings from operations
$3,517
$5,095
$22,405
$19,685
Operating Margin UnitedHealthcare
0.8%
4.3%
6.2%
5.3%
Optum
8.7%
10.1%
7.4%
8.3%
Consolidated operating margin
5.4%
8.4%
8.7%
8.1%
Revenues UnitedHealthcare Employer
& Individual
$14,548
$14,538
$55,872
$56,945
UnitedHealthcare Medicare & Retirement
22,151
20,603
90,764
83,252
UnitedHealthcare Community & State
11,691
10,752
46,487
43,790
UnitedHealthcare Global
1,937
2,354
7,752
9,855
OptumHealth
$10,978
$8,323
$39,808
$30,317
OptumInsight
2,909
2,861
10,802
10,006
OptumRx
22,489
19,094
87,498
74,288
Optum eliminations
(525)
(480)
(1,800)
(1,661)
(a) Earnings from operations for Optum for the three months and
year ended December 31, 2020 included $1,046 and $3,434 for
OptumHealth; $843 and $2,725 for OptumInsight; and $1,232 and
$3,887 for OptumRx, respectively. Earnings from operations for
Optum for the three months and year ended December 31, 2019
included $901 and $2,963 for OptumHealth; $905 and $2,494 for
OptumInsight; and $1,214 and $3,902 for OptumRx, respectively.
UNITEDHEALTH GROUP SUPPLEMENTAL FINANCIAL INFORMATION -
BUSINESS METRICS UNITEDHEALTHCARE CUSTOMER
PROFILE (in thousands)
People Served December
31, 2020 September 30, 2020 December 31, 2019
Commercial: Risk-based
7,910
7,950
8,575
Fee-based
18,310
18,400
19,185
Total Commercial
26,220
26,350
27,760
Medicare Advantage
5,710
5,670
5,270
Medicaid
6,620
6,435
5,900
Medicare Supplement (Standardized)
4,460
4,450
4,500
Total Public and Senior
16,790
16,555
15,670
Total UnitedHealthcare - Domestic Medical
43,010
42,905
43,430
Global
5,425
5,285
5,720
Total UnitedHealthcare - Medical
48,435
48,190
49,150
Supplemental Data Medicare Part D stand-alone
4,045
4,075
4,405
OPTUM PERFORMANCE METRICS December 31,
2020 September 30, 2020 December 31, 2019
OptumHealth Consumers Served (in millions)
98
98
96
OptumInsight Contract Backlog (in billions)
$20.2
$19.9
$19.3
OptumRx Quarterly Adjusted Scripts (in millions)
331
325
333
Note: UnitedHealth Group served 142 million unique
individuals across all businesses at December 31, 2020.
UNITEDHEALTH GROUP RECONCILIATION OF NON-GAAP FINANCIAL
MEASURE (in millions, except per share data) (unaudited)
ADJUSTED NET EARNINGS PER SHARE(a) Three Months
EndedDecember 31, Year EndedDecember 31,
ProjectedYear EndedDecember 31,
2020
2019
2020
2019
2021
GAAP net earnings attributable to UnitedHealth Group common
shareholders
$2,212
$3,541
$15,403
$13,839
$16,050 - $16,600 Intangible amortization
279
275
1,080
1,004
~1,100 Tax effect of intangible amortization
(68)
(68)
(262)
(248)
~(275) Adjusted net earnings attributable to UnitedHealth Group
common shareholders
$2,423
$3,748
$16,221
$14,595
$16,875 - $17,425 GAAP diluted earnings per share
$2.30
$3.68
$16.03
$14.33
$16.90 - $17.40 Intangible amortization per share
0.29
0.29
1.12
1.04
~1.15 Tax effect per share of intangible amortization
(0.07)
(0.07)
(0.27)
(0.26)
~(0.30) Adjusted diluted earnings per share
$2.52
$3.90
$16.88
$15.11
$17.75 - $18.25 (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/20210120005191/en/
Investors: Brett Manderfeld Senior Vice President
952-936-7216
Media: Matt Stearns Senior Vice President
202-276-0085
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