- Revenues of $80.9 Billion Grew 12% Year-Over-Year, with
Diversified Growth across Optum and UnitedHealthcare
- Earnings from Operations were $7.5 Billion
- Cash Flows from Operations were $18.5 Billion; Adjusted Cash
Flows from Operations were $8.8 Billion, 1.6x Net Income
- Net Earnings $5.55 Per Share; Adjusted Earnings $5.79 Per
Share
Strong and well-balanced performance continued across
UnitedHealth Group (NYSE: UNH) in the third quarter of 2022.
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UnitedHealth Group Corporate Headquarters
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“The strength of our performance reflects the diligence and
determination of our colleagues to improve people’s experience
across the health care system and make high-quality care simpler,
more accessible and more affordable,” said Andrew Witty, chief
executive officer of UnitedHealth Group.
Growth in the third quarter was driven by continued expansion in
the number of people served throughout UnitedHealthcare and in the
value-based care initiatives at Optum Health. The company increased
its full year 2022 net earnings outlook to $20.85 to $21.05 per
share and adjusted net earnings to $21.85 to $22.05 per share.
Quarterly Financial Performance
Three
Months Ended
September 30,
2022
September 30,
2021
June 30,
2022
Revenues
$80.9 billion
$72.3 billion
$80.3 billion
Earnings from Operations
$ 7.5 billion
$ 5.7 billion
$ 7.1 billion
Net Margin
6.5%
5.6%
6.3%
- UnitedHealth Group’s third quarter 2022 revenues were $80.9
billion, growth of $8.6 billion or 12% year-over-year, reflecting
double-digit growth at both Optum and UnitedHealthcare.
- Third quarter 2022 earnings from operations were $7.5 billion,
growth of 31% year-over-year, with strong contributions from both
Optum and UnitedHealthcare. Adjusted net earnings of $5.79 per
share increased 28% compared to the third quarter of 2021.
- The third quarter 2022 medical care ratio was 81.6% compared to
81.5% in the second quarter 2022 and 83.0% in the third quarter of
2021, due to COVID effects and business mix. Favorable medical
reserve development of $870 million compared to $890 million in the
second quarter 2022 and $700 million in the year ago third quarter.
Days claims payable were 50.8, compared to 50.6 in the second
quarter of 2022 and 50.4 in the third quarter of 2021.
- The third quarter 2022 operating cost ratio of 14.4% compares
to 14.6% in the second quarter 2022 and 14.8% in the year ago
quarter, reflecting continued productivity gains, offset by
business mix and investments in growth initiatives.
- Adjusted cash flows from operations for the third quarter 2022
were $8.8 billion or 1.6-times net income, excluding the impact of
October CMS payments received in September. Year-to-date, the
company has returned $10.5 billion to shareholders through
dividends and share repurchases. Return on equity of 28.5% in the
quarter reflected the company’s sustained growth 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 improving health and wellness, enhancing the
quality of care received, simplifying the health care experience
and reducing the total cost of care.
Quarterly Financial Performance
Three
Months Ended
September 30,
2022
September 30,
2021
June 30,
2022
Revenues
$62.0 billion
$55.9 billion
$62.1 billion
Earnings from Operations
$ 3.8 billion
$ 2.7 billion
$ 3.9 billion
Operating Margin
6.1%
4.7%
6.2%
- UnitedHealthcare third quarter revenues of $62.0 billion grew
$6.1 billion or 11% year-over-year, reflecting broad-based
growth.
- Third quarter 2022 operating earnings were $3.8 billion
compared to $2.7 billion last year, reflecting growth in people
served, COVID effects, and continued medical and operating cost
management.
- Total people served domestically by UnitedHealthcare has grown
by approximately 850,000 in 2022, including 185,000 in the third
quarter. Growth was led by UnitedHealthcare’s community-based and
senior offerings. The number of people served with domestic
commercial benefit insurance offerings has grown by more than
100,000 over the past six months.
Optum’s health services businesses serve the global health care
marketplace, including payers, care providers, employers,
governments, life sciences companies and consumers. Using
market-leading information, analytics, technology and clinical
insights, Optum helps improve overall health system performance:
optimizing care quality, reducing care costs and improving the
consumer experience.
Quarterly Financial Performance
Three
Months Ended
September 30,
2022
September 30,
2021
June 30,
2022
Revenues
$46.6 billion
$39.8 billion
$45.1 billion
Earnings from Operations
$ 3.7 billion
$ 3.1 billion
$ 3.3 billion
Operating Margin
7.9%
7.7%
7.3%
- Optum third quarter revenues of $46.6 billion grew $6.8 billion
or 17% year-over-year, led by Optum Health. Operating earnings were
$3.7 billion compared to $3.1 billion last year.
- Optum Health revenue per consumer served increased 31% over the
year ago period, driven by growth in value-based care arrangements
and continued expansion of care delivery platforms, including
in-home, clinic-based, ambulatory surgery, behavioral and
digital.
- Optum Insight revenue grew 18% in the third quarter led by the
growth of payer and provider services. Revenue backlog increased by
$1.8 billion over the year ago period to $24.1 billion. The
combination with Change Healthcare was completed at the beginning
of the fourth quarter 2022 and will accelerate efforts to better
connect and simplify the core clinical, administrative and payment
processes health care providers and payers depend on to serve
patients.
- Optum Rx’s revenue growth of 8% in the third quarter reflects
the impact of serving new clients and further expansion of pharmacy
care services offerings, including specialty and community
pharmacy. Adjusted scripts grew to 359 million compared to 344
million last year.
About UnitedHealth Group
UnitedHealth Group (NYSE: UNH) is a health care and well-being
company with a mission to help people live healthier lives and help
make the health system work better for everyone through two
distinct and complementary businesses. Optum delivers care aided by
technology and data, empowering people, partners and providers with
the guidance and tools they need to achieve better health.
UnitedHealthcare offers a full range of health benefits, enabling
affordable coverage, simplifying the health care experience and
delivering access to high-quality care. Visit UnitedHealth Group at
www.unitedhealthgroup.com and 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 on the Investor Relations page and at https://uhg.co/Replay
through October 28, 2022. This earnings release and the Form 8-K
dated October 14, 2022, 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; failure to protect proprietary rights to our
databases, software and related products; risks and uncertainties
associated with our businesses providing pharmacy care services;
competitive pressures, including our ability to develop and deliver
innovative products to health care payers and expand access to
virtual care; changes in or challenges to our public sector
contract awards; failure to develop and maintain satisfactory
relationships with health care payers, 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,
2022 - 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 GROUP CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per
share data) (unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Revenues Premiums
$
64,491
$
56,967
$
192,457
$
168,686
Products
9,190
8,703
28,026
25,476
Services
6,700
6,164
19,717
18,181
Investment and other income
513
503
1,175
1,511
Total revenues
80,894
72,337
241,375
213,854
Operating costs Medical costs
52,635
47,302
157,251
138,752
Operating costs
11,663
10,725
34,773
31,307
Cost of products sold
8,306
7,802
25,389
23,034
Depreciation and amortization
828
796
2,418
2,332
Total operating costs
73,432
66,625
219,831
195,425
Earnings from operations
7,462
5,712
21,544
18,429
Interest expense
(516
)
(422
)
(1,416
)
(1,229
)
Earnings before income taxes
6,946
5,290
20,128
17,200
Provision for income taxes
(1,562
)
(1,099
)
(4,397
)
(3,659
)
Net earnings
5,384
4,191
15,731
13,541
Earnings attributable to noncontrolling interests
(122
)
(105
)
(372
)
(327
)
Net earnings attributable to UnitedHealth Group
common shareholders
$
5,262
$
4,086
$
15,359
$
13,214
Diluted earnings per share attributable to
UnitedHealth Group common shareholders
$
5.55
$
4.28
$
16.15
$
13.82
Adjusted earnings per share attributable to
UnitedHealth Group common shareholders (a)
$
5.79
$
4.52
$
16.85
$
14.54
Diluted weighted-average common shares outstanding
948
955
951
956
(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,
2022
2021
Assets Cash and short-term investments
$
42,527
$
23,907
Accounts receivable, net
17,047
14,216
Other current assets
23,363
23,635
Total current assets
82,937
61,758
Long-term investments
41,557
43,114
Other long-term assets
118,570
107,334
Total assets
$
243,064
$
212,206
Liabilities, redeemable noncontrolling interests
and equity Medical costs payable
$
29,064
$
24,483
Short-term borrowings and current maturities of long-term debt
3,229
3,620
Other current liabilities
68,642
50,189
Total current liabilities
100,935
78,292
Long-term debt, less current maturities
45,438
42,383
Other long-term liabilities
13,770
15,052
Redeemable noncontrolling interests
4,857
1,434
Equity
78,064
75,045
Total liabilities, redeemable noncontrolling interests and
equity
$
243,064
$
212,206
UNITEDHEALTH GROUP CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (in millions) (unaudited)
Nine Months Ended September
30,
2022
2021
Operating Activities Net earnings
$
15,731
$
13,541
Noncash items: Depreciation and amortization
2,418
2,332
Deferred income taxes and other
(590
)
178
Share-based compensation
675
591
Net changes in operating assets and liabilities
12,505
2,483
Cash flows from operating activities
30,739
19,125
Investing Activities Purchases of investments, net of
sales and maturities
(4,067
)
(3,702
)
Purchases of property, equipment and capitalized software
(1,936
)
(1,759
)
Cash paid for acquisitions, net
(7,154
)
(4,727
)
Other, net
50
(900
)
Cash flows used for investing activities
(13,107
)
(11,088
)
Financing Activities Common share repurchases
(6,000
)
(3,950
)
Dividends paid
(4,450
)
(3,915
)
Net change in short-term borrowings and long-term debt
3,806
3,733
Other, net
6,478
304
Cash flows used for financing activities
(166
)
(3,828
)
Effect of exchange rate changes on cash and cash equivalents
4
(45
)
Increase in cash and cash equivalents
17,470
4,164
Cash and cash equivalents, beginning of period
21,375
16,921
Cash and cash equivalents, end of period
$
38,845
$
21,085
UNITEDHEALTH GROUP SUPPLEMENTAL FINANCIAL INFORMATION -
BUSINESSES (in millions, except percentages) (unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Revenues UnitedHealthcare
$
61,995
$
55,927
$
186,695
$
166,515
Optum
46,559
39,785
134,900
114,472
Eliminations
(27,660
)
(23,375
)
(80,220
)
(67,133
)
Total consolidated revenues
$
80,894
$
72,337
$
241,375
$
213,854
Earnings from Operations UnitedHealthcare
$
3,799
$
2,651
$
11,447
$
9,854
Optum (a)
3,663
3,061
10,097
8,575
Total consolidated earnings from operations
$
7,462
$
5,712
$
21,544
$
18,429
Operating Margin UnitedHealthcare
6.1
%
4.7
%
6.1
%
5.9
%
Optum
7.9
%
7.7
%
7.5
%
7.5
%
Consolidated operating margin
9.2
%
7.9
%
8.9
%
8.6
%
Revenues UnitedHealthcare Employer &
Individual - Domestic
$
15,929
$
15,094
$
47,318
$
44,668
UnitedHealthcare Employer & Individual - Global
2,120
2,139
6,500
6,292
UnitedHealthcare Employer & Individual - Total
18,049
17,233
53,818
50,960
UnitedHealthcare Medicare & Retirement
27,895
24,931
85,620
75,709
UnitedHealthcare Community & State
16,051
13,763
47,257
39,846
Optum Health
$
18,463
$
13,812
$
52,728
$
39,515
Optum Insight
3,693
3,139
10,194
8,948
Optum Rx
25,203
23,337
73,919
67,465
Optum eliminations
(800
)
(503
)
(1,941
)
(1,456
)
(a) Earnings from operations for Optum for the three and nine
months ended September 30, 2022 included $1,575 and $4,340 for
Optum Health; $1,007 and $2,693 for Optum Insight; and $1,081 and
$3,064 for Optum Rx, respectively. Earnings from operations for
Optum for the three and nine months ended September 30, 2021
included $1,143 and $3,233 for Optum Health; $906 and $2,447 for
Optum Insight; and $1,012 and $2,895 for Optum Rx, respectively.
UNITEDHEALTH GROUP SUPPLEMENTAL FINANCIAL INFORMATION -
BUSINESS METRICS UNITEDHEALTHCARE CUSTOMER
PROFILE (in thousands)
People Served September
30, 2022 June 30, 2022 December 31, 2021
September 30, 2021 Commercial - Domestic: Risk-based
8,055
8,010
7,985
7,960
Fee-based
18,500
18,480
18,595
18,595
Total Commercial - Domestic
26,555
26,490
26,580
26,555
Medicare Advantage
7,035
6,945
6,490
6,455
Medicaid
8,005
7,990
7,655
7,510
Medicare Supplement (Standardized)
4,370
4,355
4,395
4,405
Total Community and Senior
19,410
19,290
18,540
18,370
Total UnitedHealthcare - Domestic Medical
45,965
45,780
45,120
44,925
Commercial - Global
5,360
5,465
5,510
5,490
Total UnitedHealthcare - Medical
51,325
51,245
50,630
50,415
Supplemental Data Medicare Part D
stand-alone
3,310
3,330
3,700
3,725
OPTUM PERFORMANCE METRICS September
30, 2022 June 30, 2022 December 31, 2021
September 30, 2021 Optum Health Consumers Served (in
millions)
101
101
100
99
Optum Insight Contract Backlog (in billions)
$
24.1
$
23.6
$
22.4
$
22.3
Optum Rx Quarterly Adjusted Scripts (in millions)
359
357
353
344
Note: UnitedHealth Group served 149 million unique
individuals across all businesses at September 30, 2022.
UNITEDHEALTH GROUP RECONCILIATION 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 December
31,
2022
2021
2022
2021
2022
GAAP net earnings attributable to UnitedHealth Group common
shareholders
$
5,262
$
4,086
$
15,359
$
13,214
$19,800 - $20,025 Intangible amortization
323
305
896
904
~1,290 Tax effect of intangible amortization
(92
)
(74
)
(233
)
(220
)
~(330) Adjusted net earnings attributable to UnitedHealth Group
common shareholders
$
5,493
$
4,317
$
16,022
$
13,898
$20,750 - $20,975 GAAP diluted earnings per
share
$
5.55
$
4.28
$
16.15
$
13.82
$20.85 - $21.05 Intangible amortization per share
0.34
0.32
0.94
0.95
~1.35 Tax effect per share of intangible amortization
(0.10
)
(0.08
)
(0.24
)
(0.23
)
~(0.35) Adjusted diluted earnings per share
$
5.79
$
4.52
$
16.85
$
14.54
$21.85 - $22.05
ADJUSTED CASH FLOWS FROM OPERATIONS(a)
Three Months EndedSeptember 30, 2022
Nine Months EndedSeptember 30, 2022 GAAP cash flows
from operations
$
18,549
$
30,739
Less: October CMS premium payments received in September
(9,763
)
(9,763
)
Adjusted cash flows from operations
$
8,786
$
20,976
(a) 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.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.Management believes 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 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. 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221014005099/en/
Investor Contact: Zack Sopcak Senior Vice President
952-936-7215 zack.sopcak@uhg.com
Media Contact: Matt Stearns Senior Vice President
202-276-0085 matt.stearns@uhg.com
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