- Revenues Increased 11% to $72.3 Billion, with Strong and
Diversified Growth across Optum and UnitedHealthcare
- Earnings from Operations $5.7 Billion
- Cash Flows from Operations $7.6 Billion or 1.8x Net
Income
- Net Earnings $4.28 Per Share and Adjusted Earnings $4.52 Per
Share
Consistent, well-balanced growth continued across UnitedHealth
Group (NYSE: UNH) in the third quarter 2021.
“Our positive growth and operating results are thanks to the
340,000 Optum and UnitedHealthcare team members who strive every
day to help clinicians deliver and people access quality,
affordable health care,” said Andrew Witty, chief executive officer
of UnitedHealth Group.
The Company increased its full year net earnings outlook to
$17.70 to $17.95 per share and adjusted earnings to $18.65 to
$18.90 per share. The Company’s full year 2021 outlook for net
unfavorable COVID-19 earnings effects is consistent with previous
expectations.
Quarterly Financial Performance
Three
Months Ended
September 30,
2021
September 30,
2020
June 30,
2021
Revenues
$72.3 billion
$65.1 billion
$71.3 billion
Earnings from Operations
$5.7 billion
$4.7 billion
$6.0 billion
Net Margin
5.6%
4.9%
6.0%
- UnitedHealth Group’s third quarter 2021 revenues of $72.3
billion grew $7.2 billion or 11.1% year-over-year, reflecting
balanced, double-digit growth at both Optum and
UnitedHealthcare.
- Third quarter 2021 earnings from operations were $5.7 billion
including well diversified contributions from across the
enterprise. The Optum businesses comprised 54% of the consolidated
total. Adjusted net earnings per share were $4.52.
- Cash flows from operations in the third quarter were $7.6
billion or 1.8 times net income and $19.1 billion year-to-date or
1.4 times net income.
- The third quarter 2021 medical care ratio of 83.0% compared to
81.9% last year, with the variance due largely to the repeal of the
health insurance tax. Favorable medical reserve development was
$700 million, with $520 million related to 2021 and a majority of
the effect offset by rebates, risk-corridors and other related
factors. Days claims payable of 50.4 days compared to 49.1 days in
the second quarter 2021 and 46.8 days in the third quarter
2020.
- The operating cost ratio of 14.8% this quarter decreased from
15.6% in third quarter 2020 primarily due to the repeal of the
health insurance tax and continued productivity advances, partially
offset by business mix and growth and innovation investments.
- The Company returned $1.4 billion to shareholders in the third
quarter via dividends, an increase of 16% in the annual dividend
rate from the year ago quarter. The Company repurchased 2.5 million
shares for $1.1 billion in the quarter.
- Return on equity of 23.5% in the quarter 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 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
September 30,
2021
September 30,
2020
June 30,
2021
Revenues
$55.9 billion
$50.4 billion
$55.5 billion
Earnings from Operations
$2.7 billion
$2.1 billion
$3.1 billion
Operating Margin
4.7%
4.1%
5.6%
- UnitedHealthcare third quarter 2021 revenues of $55.9 billion
grew by $5.6 billion or 11.0% compared to the previous year.
Continued strong growth in UnitedHealthcare’s community and senior
offerings and growth serving 320,000 more people in commercial risk
and self-funded offerings this quarter contributed to the revenue
expansion. This includes commercial business expansion and organic
growth in both specialty and medical benefits, such as innovative,
consumer-centric and provider-led benefit plans.
- Total people served by UnitedHealthcare grew by 790,000 in the
third quarter and nearly 2 million people since the end of 2020,
led by continued strong growth in Medicare Advantage, Dual Special
Needs Plans and Medicaid more broadly. New Medicaid regions served
this year include North Carolina, Kentucky and Indiana, with recent
new contract awards in Nevada, Ohio and Hawaii. UnitedHealthcare is
on pace to grow by more than 900,000 additional people in Medicare
Advantage this year including Dual Special Needs Plans.
- Third quarter 2021 operating earnings were $2.7 billion
compared to $2.1 billion last year, reflecting strong member
growth, reduced net COVID-19 effects and a continued focus on
operating cost management.
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,
2021
September 30,
2020
June 30,
2021
Revenues
$39.8 billion
$34.9 billion
$38.3 billion
Earnings from Operations
$3.1 billion
$2.6 billion
$2.9 billion
Operating Margin
7.7%
7.4%
7.5%
- Optum third quarter revenues of $39.8 billion grew 13.9% and
operating earnings of $3.1 billion grew 18.5% compared to the prior
year, with each of the three Optum businesses contributing to
operating earnings growth, led by OptumHealth.
- OptumHealth revenue per consumer served grew 30% year-over-year
in the quarter and the business grew to serve 99 million people at
the end of third quarter 2021 compared to 98 million a year ago.
This growth included more people served in value-based care
arrangements and further build-out of local market care delivery
services, including clinic-based and outpatient services, and
in-home physical and digital capabilities.
- OptumInsight’s revenue backlog of $22.3 billion increased $2.4
billion or 12% compared to the third quarter 2020, with the growing
backlog and pipeline driven by comprehensive managed services,
including revenue management, care coordination, digital
modernization and payment integrity services. Recent business wins
include a significant new client relationship with SSM Health to
help accelerate operational performance, clinical outcomes and
patient health care experiences.
- OptumRx adjusted scripts in the quarter were 344 million,
growth of 6% compared to last year driven by growth in people
served and as the provision of care and usage of pharmaceuticals
has continued to recover over the last year. OptumRx continues to
grow and diversify its pharmacy care offerings, including the
number of community-based behavioral health pharmacies and growth
in specialty pharmacy, infusion services and e-commerce
offerings.
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 October 28, 2021. The
conference call replay can also be accessed by dialing
1-888-203-1112, Conference Code: 5065077. This earnings release and
the Form 8-K dated October 14, 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 September 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 September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Revenues Premiums
$56,967
$50,863
$168,686
$150,897
Products
8,703
8,777
25,476
25,455
Services
6,164
5,124
18,181
14,265
Investment and other income
503
351
1,511
1,057
Total revenues
72,337
65,115
213,854
191,674
Operating costs Medical costs
47,302
41,636
138,752
117,314
Operating costs
10,725
10,174
31,307
30,190
Cost of products sold
7,802
7,935
23,034
23,123
Depreciation and amortization
796
719
2,332
2,159
Total operating costs
66,625
60,464
195,425
172,786
Earnings from operations
5,712
4,651
18,429
18,888
Interest expense
(422)
(395)
(1,229)
(1,262)
Earnings before income taxes
5,290
4,256
17,200
17,626
Provision for income taxes
(1,099)
(1,000)
(3,659)
(4,209)
Net earnings
4,191
3,256
13,541
13,417
Earnings attributable to noncontrolling interests
(105)
(84)
(327)
(226)
Net earnings attributable to UnitedHealth Group common
shareholders
$4,086
$3,172
$13,214
$13,191
Diluted earnings per share attributable to UnitedHealth Group
common shareholders
$4.28
$3.30
$13.82
$13.73
Adjusted earnings per share attributable to UnitedHealth Group
common shareholders (a)
$4.52
$3.51
$14.54
$14.36
Diluted weighted-average common shares outstanding
955
962
956
961
(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,
2021
2020
Assets Cash and short-term investments
$23,871
$19,781
Accounts receivable, net
14,152
12,870
Other current assets
23,587
21,067
Total current assets
61,610
53,718
Long-term investments
44,777
41,242
Other long-term assets
106,658
102,329
Total assets
$213,045
$197,289
Liabilities, redeemable noncontrolling interests and equity
Medical costs payable
$25,918
$21,872
Short-term borrowings and current maturities of long-term debt
3,620
4,819
Other current liabilities
50,037
45,729
Total current liabilities
79,575
72,420
Long-term debt, less current maturities
43,345
38,648
Other long-term liabilities
15,493
15,682
Redeemable noncontrolling interests
1,373
2,211
Equity
73,259
68,328
Total liabilities, redeemable noncontrolling interests and equity
$213,045
$197,289
UNITEDHEALTH GROUP CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (in millions) (unaudited)
Nine Months Ended September
30,
2021
2020
Operating Activities Net earnings
$13,541
$13,417
Noncash items: Depreciation and amortization
2,332
2,159
Deferred income taxes and other
178
167
Share-based compensation
591
527
Net changes in operating assets and liabilities
2,483
(197)
Cash flows from operating activities
19,125
16,073
Investing Activities Purchases of investments, net of sales
and maturities
(3,702)
(1,386)
Purchases of property, equipment and capitalized software
(1,759)
(1,477)
Cash paid for acquisitions, net
(4,727)
(4,326)
Other, net
(900)
(165)
Cash flows used for investing activities
(11,088)
(7,354)
Financing Activities Common share repurchases
(3,950)
(2,541)
Dividends paid
(3,915)
(3,400)
Net change in short-term borrowings and long-term debt
3,733
2,941
Other, net
304
1,006
Cash flows used for financing activities
(3,828)
(1,994)
Effect of exchange rate changes on cash and cash equivalents
(45)
(160)
Increase in cash and cash equivalents
4,164
6,565
Cash and cash equivalents, beginning of period
16,921
10,985
Cash and cash equivalents, end of period
$21,085
$17,550
UNITEDHEALTH GROUP SUPPLEMENTAL FINANCIAL INFORMATION -
BUSINESSES (in millions, except percentages) (unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Revenues UnitedHealthcare
$55,927
$50,373
$166,515
$150,548
Optum
39,785
34,923
114,472
100,457
Eliminations
(23,375)
(20,181)
(67,133)
(59,331)
Total consolidated revenues
$72,337
$65,115
$213,854
$191,674
Earnings from Operations UnitedHealthcare
$2,651
$2,068
$9,854
$11,963
Optum (a)
3,061
2,583
8,575
6,925
Total consolidated earnings from operations
$5,712
$4,651
$18,429
$18,888
Operating Margin UnitedHealthcare
4.7%
4.1%
5.9%
7.9%
Optum
7.7%
7.4%
7.5%
6.9%
Consolidated operating margin
7.9%
7.1%
8.6%
9.9%
Revenues UnitedHealthcare Employer & Individual
$15,094
$14,081
$44,668
$41,324
UnitedHealthcare Medicare & Retirement
24,931
22,606
75,709
68,613
UnitedHealthcare Community & State
13,763
11,820
39,846
34,796
UnitedHealthcare Global
2,139
1,866
6,292
5,815
OptumHealth
$13,812
$10,499
$39,515
$28,830
OptumInsight
3,139
2,767
8,948
7,893
OptumRx
23,337
22,081
67,465
65,009
Optum eliminations
(503)
(424)
(1,456)
(1,275)
(a) Earnings from operations for Optum for the three and nine
months ended September 30, 2021 included $1,143 and $3,233 for
OptumHealth; $906 and $2,447 for OptumInsight; and $1,012 and
$2,895 for OptumRx, respectively. 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.
UNITEDHEALTH GROUP SUPPLEMENTAL FINANCIAL INFORMATION -
BUSINESS METRICS UNITEDHEALTHCARE CUSTOMER
PROFILE (in thousands)
People Served
September 30, 2021
June 30, 2021
December 31, 2020
September 30, 2020
Commercial: Risk-based
7,960
7,840
7,910
7,950
Fee-based
18,595
18,395
18,310
18,400
Total Commercial
26,555
26,235
26,220
26,350
Medicare Advantage
6,455
6,385
5,710
5,670
Medicaid
7,510
7,130
6,620
6,435
Medicare Supplement (Standardized)
4,405
4,390
4,460
4,450
Total Community and Senior
18,370
17,905
16,790
16,555
Total UnitedHealthcare - Domestic Medical
44,925
44,140
43,010
42,905
Global
5,490
5,485
5,425
5,285
Total UnitedHealthcare - Medical
50,415
49,625
48,435
48,190
Supplemental Data Medicare Part D stand-alone
3,725
3,750
4,045
4,075
OPTUM PERFORMANCE METRICS
September 30, 2021
June 30, 2021
December 31, 2020
September 30, 2020
OptumHealth Consumers Served (in millions)
99
99
98
98
OptumInsight Contract Backlog (in billions)
$22.3
$21.3
$20.2
$19.9
OptumRx Quarterly Adjusted Scripts (in millions)
344
342
331
325
Note: UnitedHealth Group served 146 million unique
individuals across all businesses at September 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 September
30,
Nine Months Ended September
30,
Projected Year Ended December
31,
2021
2020
2021
2020
2021
GAAP net earnings attributable to UnitedHealth Group common
shareholders
$4,086
$3,172
$13,214
$13,191
$16,900 - $17,150 Intangible amortization
305
269
904
801
~1,200 Tax effect of intangible amortization
(74)
(64)
(220)
(194)
~(290) Adjusted net earnings attributable to UnitedHealth Group
common shareholders
$4,317
$3,377
$13,898
$13,798
$17,800 - $18,050 GAAP diluted earnings per share
$4.28
$3.30
$13.82
$13.73
$17.70 - $17.95 Intangible amortization per share
0.32
0.28
0.95
0.83
~1.25 Tax effect per share of intangible amortization
(0.08)
(0.07)
(0.23)
(0.20)
~(0.30) Adjusted diluted earnings per share
$4.52
$3.51
$14.54
$14.36
$18.65 - $18.90 (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/20211014005338/en/
Investors: Brett Manderfeld Senior Vice President
952-936-7216
Media: Matt Stearns Senior Vice President
202-276-0085
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