- Revenues of $71.3 Billion Grew 15%, with Well-Diversified
Growth at Optum and UnitedHealthcare
- Earnings from Operations were $6.0 Billion
- Cash Flows from Operations reached $5.5 Billion or 1.3x Net
Income
- Net Earnings were $4.46 Per Share and Adjusted Earnings were
$4.70 Per Share
Strong and diversified growth continued across UnitedHealth
Group (NYSE: UNH) in the second quarter 2021.
“The compassion, dedication and ongoing efforts of our 330,000
colleagues to advance peoples’ health and health system performance
reinforces our confidence in delivering strongly on our strategies
for those we serve and continuing to grow well into the future,”
said Andrew Witty, chief executive officer of UnitedHealth
Group.
Based upon first half 2021 performance, the Company increased
its full year net earnings outlook to $17.35 to $17.85 per share
and adjusted earnings to $18.30 to $18.80 per share. The outlook
continues to include approximately $1.80 per share in potential net
unfavorable COVID-19 effects. UnitedHealth Group is focused on
helping people access the care they need, including vaccinations,
and expects a continued rise in provision of care in the second
half of this year. COVID-19 effects include testing and treatment
costs; the residual impact of people having deferred care in 2020;
and unemployment and other economy-driven factors.
Quarterly Financial Performance
Three
Months Ended
June 30,
2021
June 30,
2020
March 31,
2021
Revenues
$71.3 billion
$62.1 billion
$70.2 billion
Earnings from Operations
$6.0 billion
$9.2 billion
$6.7 billion
Net Margin
6.0%
10.7%
6.9%
- UnitedHealth Group’s second quarter 2021 revenues of $71.3
billion grew 14.8% year-over-year, reflecting well-diversified
growth across the enterprise, including double-digit percentage
growth at both Optum and UnitedHealthcare.
- Earnings from operations in the second quarter 2021 were $6.0
billion and adjusted earnings were $4.70 per share, with the
year-over-year comparisons reflecting the broad-based deferral of
care during the second quarter 2020 due to the pandemic.
- Cash flows from operations in second quarter 2021 were $5.5
billion, or 1.3 times net income.
- The second quarter 2021 medical care ratio of 82.8% compared to
70.2% last year, with the variance due to second quarter 2020
COVID-19 effects. Favorable medical reserve development was $500
million in the quarter compared to $1.0 billion in the first
quarter 2021 and $1.4 billion in the second quarter last year. Days
claims payable of 49.1 days compared to 49.8 days in the first
quarter 2021 and 50.4 days in the second quarter 2020.
- The second quarter 2021 operating cost ratio of 14.5% decreased
from 16.1% in second quarter 2020. Factors contributing to the
decline include the repeal of the health insurance tax, broad-based
2020 investments to support people and health systems, the
revenue-related effects of the pandemic, and continued productivity
advances, partially offset by business mix and investments.
- The Company returned $1.4 billion to shareholders in the second
quarter via dividends, following a 16% increase in June 2021. In
the quarter, 3.2 million shares were repurchased for $1.2 billion,
bringing year-to-date repurchases to 7.9 million shares for $2.9
billion.
- Return on equity of 25.2% in the quarter reflected the
Company’s strong and diverse earnings profile and efficient capital
base. Debt to total capital was 40.1% at quarter end.
UnitedHealthcare provides health care benefits globally, serving
individuals and employers, and Medicare and Medicaid beneficiaries.
UnitedHealthcare is dedicated to improving the value customers and
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
June 30,
2021
June 30,
2020
March 31,
2021
Revenues
$55.5 billion
$49.1 billion
$55.1 billion
Earnings from Operations
$3.1 billion
$7.0 billion
$4.1 billion
Operating Margin
5.6%
14.3%
7.5%
- UnitedHealthcare second quarter 2021 revenues grew by $6.4
billion or 13.0% to $55.5 billion compared to last year.
- Strong growth in UnitedHealthcare’s community and senior
offerings resulted from expansion in people served. Since the end
of 2020, total people served by UnitedHealthcare grew by nearly 1.2
million, including 150,000 in the second quarter 2021.
- Second quarter 2021 operating earnings were $3.1 billion
compared to $7.0 billion last year, reflecting strong revenue
growth, more than offset by pandemic driven deferral of care last
year.
- Growth highlights include: continued strong membership growth
during the first half this year in individual Medicare Advantage,
Group Medicare Advantage and Dual Special Needs Plans; Medicaid
contract awards in Hawaii and Ohio, as well as a strong pipeline of
potential new and renewing awards during the remainder of 2021; and
further expansion of innovative commercial benefit products and
capabilities such as our care provider-aligned and consumer-centric
products, and continued outlook for strong specialty benefits
growth.
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
June 30,
2021
June 30,
2020
March 31,
2021
Revenues
$38.3 billion
$32.7 billion
$36.4 billion
Earnings from Operations
$2.9 billion
$2.2 billion
$2.6 billion
Operating Margin
7.5%
6.8%
7.2%
- Optum second quarter revenues of $38.3 billion grew 17.2% and
operating earnings of $2.9 billion grew 29.1%, with each of the
three Optum businesses contributing double-digit operating earnings
growth.
- OptumHealth served 99 million people at the end of second
quarter 2021 compared to 97 million a year ago, and revenue per
consumer served increased 43% year-over-year. This continues the
expansion of people served in value-based care arrangements, growth
in affiliated physicians and build-out of local market care
delivery services including in-home, clinic-based and outpatient
services, all on a multi-payer basis.
- OptumInsight’s revenue backlog increased by $1.9 billion or 10%
compared to the second quarter 2020 to $21.3 billion, driven by
growth in comprehensive managed services. OptumInsight continues to
advance initiatives to help health systems scale essential
capabilities through the deployment of advanced technology,
innovative talent and labor models and progressive approaches to
productivity enhancements. This includes a significant new client
relationship with Bassett Healthcare Network to help them improve
clinical and operational performance.
- OptumRx adjusted scripts in the quarter were 342 million,
growth of 8% compared to last year and 4% from the first quarter
2021, as the provision of care has continued to recover over the
last year.
- Growth highlights include: continued expansion of Optum Care’s
integrated care delivery networks and growth serving people in
their homes; OptumInsight new business wins and continued pipeline
expansion in comprehensive managed services, including revenue
management, information technology, data analytics and payment
integrity; and OptumRx’s continued diversification and growth of
pharmacy care services, highlighted by specialty pharmacy, infusion
services, community-based behavioral health pharmacies and
e-commerce.
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: Optum, which provides information
and technology-enabled health services; and UnitedHealthcare, which
provides health care coverage and benefits 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 July 29, 2021. The
conference call replay can also be accessed by dialing
1-888-203-1112, Conference Code: 6765563. This earnings release and
the Form 8-K dated July 15, 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 attract, develop, retain,
and manage the succession of key employees and executives; the
impact of potential changes in tax laws and regulations (including
any increase in the U.S. income tax rate applicable to
corporations); 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 June 30, 2021 -
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 Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Revenues Premiums
$56,233
$49,394
$111,719
$100,034
Products
8,433
8,247
16,773
16,678
Services
6,099
4,156
12,017
9,141
Investment and other income
556
341
1,008
706
Total revenues
71,321
62,138
141,517
126,559
Operating costs Medical costs
46,546
34,678
91,450
75,678
Operating costs
10,359
10,001
20,582
20,016
Cost of products sold
7,660
7,501
15,232
15,188
Depreciation and amortization
778
717
1,536
1,440
Total operating costs
65,343
52,897
128,800
112,322
Earnings from operations
5,978
9,241
12,717
14,237
Interest expense
(410)
(430)
(807)
(867)
Earnings before income taxes
5,568
8,811
11,910
13,370
Provision for income taxes
(1,196)
(2,115)
(2,560)
(3,209)
Net earnings
4,372
6,696
9,350
10,161
Earnings attributable to noncontrolling interests
(106)
(59)
(222)
(142)
Net earnings attributable to UnitedHealth Group common
shareholders
$4,266
$6,637
$9,128
$10,019
Diluted earnings per share attributable to UnitedHealth Group
common shareholders
$4.46
$6.91
$9.55
$10.43
Adjusted earnings per share attributable to UnitedHealth Group
common shareholders (a)
$4.70
$7.12
$10.02
$10.84
Diluted weighted-average common shares outstanding
956
960
956
961
(a)
See page 6 for a reconciliation of the
non-GAAP measure
UNITEDHEALTH GROUP CONDENSED CONSOLIDATED BALANCE
SHEETS (in millions) (unaudited)
June 30,
December 31,
2021
2020
Assets Cash and short-term investments
$22,561
$19,781
Accounts receivable, net
14,587
12,870
Other current assets
21,768
21,067
Total current assets
58,916
53,718
Long-term investments
44,061
41,242
Other long-term assets
107,315
102,329
Total assets
$210,292
$197,289
Liabilities, redeemable noncontrolling interests and equity
Medical costs payable
$25,131
$21,872
Short-term borrowings and current maturities of long-term debt
3,868
4,819
Other current liabilities
47,558
45,729
Total current liabilities
76,557
72,420
Long-term debt, less current maturities
44,348
38,648
Other long-term liabilities
16,066
15,682
Redeemable noncontrolling interests
1,299
2,211
Equity
72,022
68,328
Total liabilities, redeemable noncontrolling interests and equity
$210,292
$197,289
UNITEDHEALTH GROUP CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (in millions) (unaudited)
Six Months Ended June
30,
2021
2020
Operating Activities Net earnings
$9,350
$10,161
Noncash items: Depreciation and amortization
1,536
1,440
Deferred income taxes and other
113
238
Share-based compensation
426
388
Net changes in operating assets and liabilities
120
719
Cash flows from operating activities
11,545
12,946
Investing Activities (Purchases of investments, net of sales
and maturities) Sales and maturities, net of purchases
(2,789)
573
Purchases of property, equipment and capitalized software
(1,130)
(920)
Cash paid for acquisitions, net
(4,642)
(3,952)
Other, net
(648)
(186)
Cash flows used for investing activities
(9,209)
(4,485)
Financing Activities Common share repurchases
(2,900)
(1,691)
Dividends paid
(2,548)
(2,212)
Net change in short-term borrowings and long-term debt
4,858
5,215
Other, net
1,159
1,712
Cash flows from financing activities
569
3,024
Effect of exchange rate changes on cash and cash equivalents
6
(143)
Increase in cash and cash equivalents
2,911
11,342
Cash and cash equivalents, beginning of period
16,921
10,985
Cash and cash equivalents, end of period
$19,832
$22,327
UNITEDHEALTH GROUP SUPPLEMENTAL FINANCIAL INFORMATION -
BUSINESSES (in millions, except percentages) (unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Revenues UnitedHealthcare
$55,474
$49,107
$110,588
$100,175
Optum
38,303
32,695
74,687
65,534
Eliminations
(22,456)
(19,664)
(43,758)
(39,150)
Total consolidated revenues
$71,321
$62,138
$141,517
$126,559
Earnings from Operations UnitedHealthcare
$3,095
$7,007
$7,203
$9,895
Optum (a)
2,883
2,234
5,514
4,342
Total consolidated earnings from operations
$5,978
$9,241
$12,717
$14,237
Operating Margin UnitedHealthcare
5.6%
14.3%
6.5%
9.9%
Optum
7.5%
6.8%
7.4%
6.6%
Consolidated operating margin
8.4%
14.9%
9.0%
11.2%
Revenues UnitedHealthcare Employer & Individual
$14,942
$12,963
$29,574
$27,243
UnitedHealthcare Medicare & Retirement
25,304
22,855
50,778
46,007
UnitedHealthcare Community & State
13,110
11,523
26,083
22,976
UnitedHealthcare Global
2,118
1,766
4,153
3,949
OptumHealth
$13,300
$9,139
$25,703
$18,331
OptumInsight
2,957
2,632
5,809
5,126
OptumRx
22,524
21,371
44,128
42,928
Optum eliminations
(478)
(447)
(953)
(851)
(a)
Earnings from operations for Optum for the
three and six months ended June 30, 2021 included $1,128 and $2,090
for OptumHealth; $762 and $1,541 for OptumInsight; and $993 and
$1,883 for OptumRx, respectively. Earnings from operations for
Optum for the three and six months ended June 30, 2020 included
$841 and $1,553 for OptumHealth; $561 and $1,097 for OptumInsight;
and $832 and $1,692 for OptumRx, respectively.
UNITEDHEALTH GROUP SUPPLEMENTAL FINANCIAL INFORMATION -
BUSINESS METRICS UNITEDHEALTHCARE CUSTOMER
PROFILE (in thousands)
People Served June 30,
2021 March 31, 2021 December 31, 2020 June 30,
2020 Commercial: Risk-based
7,840
7,860
7,910
8,065
Fee-based
18,395
18,455
18,310
18,705
Total Commercial
26,235
26,315
26,220
26,770
Medicare Advantage
6,385
6,335
5,710
5,605
Medicaid
7,130
6,975
6,620
6,210
Medicare Supplement (Standardized)
4,390
4,390
4,460
4,450
Total Community and Senior
17,905
17,700
16,790
16,265
Total UnitedHealthcare - Domestic Medical
44,140
44,015
43,010
43,035
Global
5,485
5,460
5,425
5,365
Total UnitedHealthcare - Medical
49,625
49,475
48,435
48,400
Supplemental Data Medicare Part D stand-alone
3,750
3,795
4,045
4,120
OPTUM PERFORMANCE METRICS June 30, 2021
March 31, 2021 December 31, 2020 June 30, 2020
OptumHealth Consumers Served (in millions)
99
99
98
97
OptumInsight Contract Backlog (in billions)
$21.3
$20.8
$20.2
$19.4
OptumRx Quarterly Adjusted Scripts (in millions)
342
329
331
316
Note: UnitedHealth Group served 146 million unique
individuals across all businesses at June 30, 2021.
UNITEDHEALTH GROUP
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURE
(in millions, except per share
data)
(unaudited)
ADJUSTED NET EARNINGS PER
SHARE(a)
Three Months Ended June
30,
Six Months Ended June
30,
Projected Year Ended December
31,
2021
2020
2021
2020
2021
GAAP net earnings attributable to UnitedHealth Group common
shareholders
$4,266
$6,637
$9,128
$10,019
$16,550 - $17,050 Intangible amortization
305
267
599
532
~1,190 Tax effect of intangible amortization
(75)
(65)
(146)
(130)
~(290) Adjusted net earnings attributable to UnitedHealth Group
common shareholders
$4,496
$6,839
$9,581
$10,421
$17,450 - $17,950 GAAP diluted earnings per share
$4.46
$6.91
$9.55
$10.43
$17.35 - $17.85 Intangible amortization per share
0.32
0.28
0.63
0.55
~1.25 Tax effect per share of intangible amortization
(0.08)
(0.07)
(0.16)
(0.14)
~(0.30) Adjusted diluted earnings per share
$4.70
$7.12
$10.02
$10.84
$18.30 - $18.80 (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/20210715005337/en/
Investors: Brett Manderfeld 952-936-7216
Media: Matt Stearns Senior Vice President
202-276-0085
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