UNH UnitedHealth Group Inc

• Revenues of $98.9 Billion Grew Nearly $6 Billion Year Over Year, Led by Optum
• Consumers Served by UnitedHealthcare’s Commercial Domestic Offerings Grew 2.3 Million Year to Date
• Cash Flows from Operations were $6.7 Billion or 1.5x Net Income
• Second Quarter Earnings of $4.54 Per Share Reflect Classification of Remaining South American Operations as Held for Sale and Cyberattack Impacts
• Adjusted Earnings of $6.80 Per Share Include $0.28 in Business Disruption Impacts; Exclude South American and Direct Response Costs

UnitedHealth Group (NYSE: UNH) reported second quarter 2024 results reflecting broad-based growth at Optum and UnitedHealthcare.

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UnitedHealth Group corporate headquarters (Photo: Business Wire)

“The diversified, durable growth across UnitedHealth Group stems from our colleagues’ commitment to ensuring high-quality, affordable care is available to the people we serve, and positions us well for the near and long-term,” said Andrew Witty, chief executive officer of UnitedHealth Group.

The company updated its full year 2024 net earnings outlook to $15.95 to $16.40 per share to reflect the classification to held for sale of its remaining South America operations and the estimated Change Healthcare cyberattack impacts. The company completed the sale of its larger Brazilian operations in the first quarter of 2024.

The company affirmed the adjusted net earnings outlook of $27.50 to $28.00 per share established at its November 2023 Investor Conference. The consistent outlook absorbs an estimated $0.60 to $0.70 per share of business disruption impacts for the affected Change Healthcare services, which has increased $0.30 per share since the initial estimate was provided last quarter.

Cyberattack Update

The company has restored the majority of the affected Change Healthcare services while continuing to provide financial support to the remaining health care providers in need. To date, the company has provided over $9 billion in advance funding and interest-free loans to support care providers.

Total cyberattack impacts in the second quarter were $0.92 per share. This included $0.64 per share to support direct response efforts such as the Change Healthcare clearinghouse platform restoration and increased medical care expenditures. Additionally, Change Healthcare business disruption impacts, reflecting lost revenue and the costs of maintaining full readiness of the affected Change Healthcare services, were $0.28 per share in the second quarter.

The company currently estimates the total full year 2024 impact at $1.90 to $2.05 per share. Within this, direct response costs are estimated at $1.30 to $1.35, an increase of $0.40 to $0.45 from the initial estimate. The change is due to the company’s care provider financial support initiatives and consumer notification costs. Business disruption impacts are estimated at $0.60 to $0.70 per share.

South America Update

Having completed the sale of its Brazilian business, the company intends to sell its remaining South American operations. Total South American impacts in the quarter were $1.28 per share, the majority of which is non-cash and is due to the cumulative impact of foreign currency losses.

Quarterly Financial Performance

 

Three Months Ended

 

 

 

June 30,

2024

June 30,

2024 (Adj)

June 30,

2023

December 31,

2023

 

 

Revenues

$98.9 billion

 

$99.1 billion

$92.9 billion

$94.4 billion

Earnings from Operations

$ 7.9 billion

$ 8.7 billion

$ 8.1 billion

$ 7.7 billion

Net Margin

4.3%

6.0%

5.9%

5.8%

• Second quarter 2024 revenues grew nearly $6 billion to $98.9 billion, led by strong expansion in people served domestically at Optum and UnitedHealthcare. Second quarter earnings from operations were $7.9 billion, including $1.1 billion in unfavorable cyberattack effects. Adjusted earnings from operations of $8.7 billion include the Change Healthcare business disruption impacts and exclude the cyberattack direct response and South American impacts.
• The second quarter 2024 reported medical care ratio of 85.1% included 65 basis points of impacts due to accommodations to support care providers (40 basis points) and South American actions (25 basis points). The increase from the prior year’s 83.2% was also due to the previously noted revenue effects of CMS’s Medicare funding reductions, medical reserve development effects, and business and member mix. The company did not reflect any favorable earnings impacting medical reserve development in the quarter.
• Days claims payable of 45.2 compared to 47.1 in the first quarter of 2024 and 48.2 in the second quarter of 2023. Within this, the return to more normal claims submission patterns from care providers and, to a lesser extent, the impact of the South American actions, decreased days claims payable from the first quarter. The acceleration of claims payments to care providers and South American actions decreased days claims payable from the prior year.
• The second quarter of 2024 operating cost ratio of 13.3% compared to 14.9% in 2023, reflecting continued strong operating cost efficiency.
• Cash flows from operations from the second quarter of 2024 were $6.7 billion, or 1.5 times net income. In June the company increased its annual dividend rate by 12%, the 15th consecutive year of double-digit increases. During the quarter, the company prioritized financial resources to support care providers disrupted by the cyberattack.

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

 

 

June 30,

2024

June 30,

2024 (Adj)

June 30,

2023

December 31,

2023

 

 

Revenues

$73.9 billion

 

$74.1 billion

$70.2 billion

$70.8 billion

Earnings from Operations

$ 4.0 billion

$ 4.4 billion

$ 4.4 billion

$ 3.1 billion

Operating Margin

5.4%

5.9%

6.2%

4.4%

• UnitedHealthcare second quarter revenues of $73.9 billion increased nearly $4 billion over the prior year, reflecting growth in the number of people served domestically. Operating earnings were $4.0 billion and adjusted operating earnings were $4.4 billion.
• Year to date, the number of consumers served domestically with the company’s commercial offerings grew by 2.3 million to 29.6 million as UnitedHealthcare’s innovative and consumer focused product portfolio continues to resonate with customers.
• The total number of people served by the company’s offerings for seniors and people with complex needs grew to 9.4 million. UnitedHealthcare offerings feature product designs tailored to meet the specific needs of people who have limited economic resources and who are often underserved.
• Total people served by the company’s state-based community offerings moderated to 7.4 million, with the year-over-year change due to the state-driven Medicaid eligibility redetermination process. The UnitedHealthcare team is continuing its comprehensive outreach to help families maintain, reinstate or find other affordable coverage.

The Optum 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 and technology to yield clinical insights, Optum helps improve overall health system performance by optimizing care quality, reducing care costs and improving the consumer experience.

Quarterly Financial Performance

 

Three Months Ended

 

 

June 30,

2024

June 30,

2024 (Adj)

June 30,

2023

December 31,

2023

 

 

Revenues

$62.9 billion

 

$62.9 billion

$56.3 billion

$59.5 billion

 

Earnings from Operations

$ 3.9 billion

$ 4.3 billion

$ 3.7 billion

$ 4.6 billion

 

Operating Margin

6.2%

6.8%

6.6%

7.7%

 

• Optum second quarter revenues of $62.9 billion grew over $6 billion over the prior year, with growth led by Optum Rx and Optum Health. Operating earnings were $3.9 billion and adjusted operating earnings were $4.3 billion. Adjusted operating earnings exclude costs to support the direct Change Healthcare response efforts. Operating earnings and adjusted operating earnings include $335 million in business disruption impacts at Change Healthcare.
• Optum Health revenue increased 13% over last year, driven by growth in the number of patients served under value-based care offerings and expansion of the types and level of care provided. Optum Health continued to advance and deepen its clinical support for patients, including those with complex medical needs.
• Optum Insight operating earnings were $550 million and adjusted operating earnings, which exclude direct response costs, were $940 million. Operating earnings and adjusted operating earnings include the $335 million of business disruption impacts. The revenue backlog grew by over $1 billion over last year, reflecting new health system partnerships.
• Optum Rx revenue increased 13% in the second quarter due to growth in serving new customers, expanded relationships with existing clients and continued advancement in the comprehensive scope of pharmacy services offered, including specialty and community-based pharmacies. Adjusted scripts grew to nearly 400 million, compared to 380 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 UnitedHealth Group on LinkedIn.

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.com/Replay through July 30, 2024. This earnings release and the Form 8-K dated July 16, 2024, 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 laws. 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: 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; cyberattacks, other privacy/data security incidents, or our failure to comply with related regulations; 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; the DOJ’s legal action relating to the risk adjustment submission matter; our ability to maintain and achieve improvement in quality scores impacting revenue; failure to maintain effective and efficient information systems or if our technology products do not operate as intended; risks and uncertainties associated with our businesses providing pharmacy care services; competitive pressures, including our ability to maintain or increase our market share; changes in or challenges to our public sector contract awards; failure to achieve targeted operating cost productivity improvements; failure to develop and maintain satisfactory relationships with health care payers, physicians, hospitals and other service providers; the impact of potential changes in tax laws and regulations; increases in costs and other liabilities associated with litigation, government investigations, audits or reviews; failure to complete, manage or integrate strategic transactions; risk and uncertainties associated with the pending sale of operations in South America; risks associated with public health crises arising from large-scale medical emergencies, pandemics, natural disasters and other extreme events; failure to attract, develop, retain and manage the succession of key employees and executives; our investment portfolio performance; impairment of our goodwill and intangible assets; failure to protect proprietary rights to our databases, software and related products; downgrades in our credit ratings; and our ability to obtain sufficient funds from our regulated subsidiaries or from external financings to fund our obligations, reinvest in our business, 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, 2024

• Condensed Consolidated Statements of Operations
• Condensed Consolidated Balance Sheets
• Condensed Consolidated Statements of Cash Flows
• Revenues by Business - Supplemental Financial Information
• Earnings by Business - Supplemental Financial Information
• People Served and Performance Metrics - Supplemental Financial Information
• Reconciliation of Non-GAAP Financial Measures

UNITEDHEALTH GROUP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data; unaudited)

 

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2024

 

2023

 

2024

 

2023

Revenues

 

 

 

 

 

 

 

 

Premiums

 

$76,897

 

$72,474

 

$154,885

 

$145,260

Products

 

12,211

 

10,651

 

24,120

 

20,918

Services

 

8,750

 

8,663

 

17,638

 

16,743

Investment and other income

 

997

 

1,115

 

2,008

 

1,913

Total revenues

 

98,855

 

92,903

 

198,651

 

184,834

Operating costs

 

 

 

 

 

 

 

 

Medical costs

 

65,458

 

60,268

 

131,193

 

120,113

Operating costs

 

13,162

 

13,809

 

27,239

 

27,434

Cost of products sold

 

11,340

 

9,748

 

22,396

 

19,153

Depreciation and amortization

 

1,020

 

1,021

 

2,017

 

1,991

Total operating costs

 

90,980

 

84,846

 

182,845

 

168,691

Earnings from operations

 

7,875

 

8,057

 

15,806

 

16,143

Interest expense

 

(985)

 

(828)

 

(1,829)

 

(1,582)

Loss on sale of subsidiary and subsidiaries held for sale

 

(1,225)

 

—

 

(8,311)

 

—

Earnings before income taxes

 

5,665

 

7,229

 

5,666

 

14,561

Provision for income taxes

 

(1,244)

 

(1,572)

 

(2,466)

 

(3,130)

Net earnings

 

4,421

 

5,657

 

3,200

 

11,431

Earnings attributable to noncontrolling interests

 

(205)

 

(183)

 

(393)

 

(346)

Net earnings attributable to UnitedHealth Group common shareholders

 

$4,216

 

$5,474

 

$2,807

 

$11,085

Diluted earnings per share attributable to UnitedHealth Group common shareholders

 

$4.54

 

$5.82

 

$3.02

 

$11.77

Adjusted earnings per share attributable to UnitedHealth Group common shareholders (a)

 

$6.80

 

$6.14

 

$13.71

 

$12.39

Diluted weighted-average common shares outstanding

 

928

 

940

 

929

 

942

(a)

See page 7 for a reconciliation of non-GAAP measures.

UNITEDHEALTH GROUP

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions; unaudited)

 

 

 

June 30, 2024

 

December 31, 2023

Assets

 

 

 

 

Cash and short-term investments

 

$31,323

 

$29,628

Accounts receivable, net

 

23,115

 

21,276

Other current assets

 

37,600

 

27,533

Total current assets

 

92,038

 

78,437

Long-term investments

 

46,113

 

47,609

Other long-term assets

 

147,905

 

147,674

Total assets

 

$286,056

 

$273,720

Liabilities, redeemable noncontrolling interests and equity

 

 

 

 

Medical costs payable

 

$32,547

 

$32,395

Short-term borrowings and current maturities of long-term debt

 

11,371

 

4,274

Other current liabilities

 

60,752

 

62,385

Total current liabilities

 

104,670

 

99,054

Long-term debt, less current maturities

 

63,727

 

58,263

Other long-term liabilities

 

18,425

 

17,484

Redeemable noncontrolling interests

 

4,558

 

4,498

Equity

 

94,676

 

94,421

Total liabilities, redeemable noncontrolling interests and equity

 

$286,056

 

$273,720

UNITEDHEALTH GROUP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions; unaudited)

 

 

 

Six Months Ended June 30,

 

 

2024

 

2023

Operating Activities

 

 

 

 

Net earnings

 

$3,200

 

$11,431

Noncash items:

 

 

 

 

Depreciation and amortization

 

2,017

 

1,991

Deferred income taxes and other

 

101

 

(573)

Share-based compensation

 

594

 

604

Loss on sale of subsidiary and subsidiaries held for sale

 

8,311

 

—

Net changes in operating assets and liabilities

 

(6,333)

 

13,906

Cash flows from operating activities

 

7,890

 

27,359

Investing Activities

 

 

 

 

Purchases of investments, net of sales and maturities

 

(221)

 

(1,574)

Purchases of property, equipment and capitalized software

 

(1,596)

 

(1,589)

Cash paid for acquisitions, net

 

(3,031)

 

(8,161)

Loans to providers - cyberattack

 

(8,100)

 

—

Other, net

 

(809)

 

(424)

Cash flows used for investing activities

 

(13,757)

 

(11,748)

Financing Activities

 

 

 

 

Common share repurchases

 

(3,072)

 

(5,000)

Dividends paid

 

(3,664)

 

(3,284)

Net change in short-term borrowings and long-term debt

 

12,790

 

7,695

Other, net

 

981

 

3,320

Cash flows from financing activities

 

7,035

 

2,731

Effect of exchange rate changes on cash and cash equivalents

 

(44)

 

106

Increase in cash and cash equivalents, including cash within businesses held for sale

 

1,124

 

18,448

Less: cash within businesses held for sale

 

(265)

 

—

Net increase in cash and cash equivalents

 

859

 

18,448

Cash and cash equivalents, beginning of period

 

25,427

 

23,365

Cash and cash equivalents, end of period

 

$26,286

 

$41,813

UNITEDHEALTH GROUP

REVENUES BY BUSINESS - SUPPLEMENTAL FINANCIAL INFORMATION

(in millions; unaudited)

 

 

 

 

 

Optum

 

UnitedHealth Group Consolidated (a)

 

 

UnitedHealthcare

 

Optum Health

 

Optum Insight

 

Optum Rx

 

Total Optum (a)

 

Three Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$73,866

 

$27,050

 

$4,543

 

$32,415

 

$62,879

 

$98,855

South American impacts

 

220

 

—

 

—

 

—

 

—

 

220

Adjusted revenues (b)

 

$74,086

 

$27,050

 

$4,543

 

$32,415

 

$62,879

 

$99,075

Business disruption impacts - cyberattack (c)

 

$—

 

$—

 

$334

 

$—

 

$334

 

$334

Three Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$70,231

 

$23,917

 

$4,674

 

$28,646

 

$56,344

 

$92,903

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$149,223

 

$53,781

 

$9,045

 

$63,250

 

$123,931

 

$198,651

South American impacts

 

220

 

—

 

—

 

—

 

—

 

220

Adjusted revenues (b)

 

$149,443

 

$53,781

 

$9,045

 

$63,250

 

$123,931

 

$198,871

Business disruption impacts - cyberattack (c)

 

$—

 

$—

 

$613

 

$—

 

$613

 

$613

Six Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$140,699

 

$46,921

 

$9,170

 

$56,064

 

$110,403

 

$184,834

UnitedHealthcare Revenues

(in millions; unaudited)

 

 

 

Employer & Individual (E&I)

 

Medicare & Retirement

 

Community & State

 

Total UnitedHealthcare

 

 

Domestic

 

Global

 

Total E&I

 

 

 

Three Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$18,646

 

$591

 

$19,237

 

$34,904

 

$19,725

 

$73,866

Three Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$16,759

 

$2,325

 

$19,084

 

$32,440

 

$18,707

 

$70,231

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$36,485

 

$2,123

 

$38,608

 

$70,390

 

$40,225

 

$149,223

Six Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$33,303

 

$4,488

 

$37,791

 

$65,446

 

$37,462

 

$140,699

(a)

Optum and consolidated revenues for the three months ended June 30, 2024 and 2023 include Optum eliminations of $1,129 and $893; and corporate eliminations of $37,890 and $33,672, respectively. Optum and consolidated revenues for the six months ended June 30, 2024 and 2023 include Optum eliminations of $2,145 and $1,752; and corporate eliminations of $74,503 and $66,268, respectively.

(b)

See page 7 for description of non-GAAP measures.

(c)

Amounts represent reduced revenues during the business disruption period.

UNITEDHEALTH GROUP

EARNINGS BY BUSINESS - SUPPLEMENTAL FINANCIAL INFORMATION

(in millions, except percentages; unaudited)

 

 

 

 

 

 

Optum

 

UnitedHealth Group Consolidated

 

 

UnitedHealthcare

 

 

Optum Health

 

Optum Insight

 

Optum Rx

 

Total Optum

 

Three Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations

 

$4,004

 

 

$1,919

 

$546

 

$1,406

 

$3,871

 

$7,875

Direct response costs - cyberattack

 

255

 

(a)

22

(a)

394

 

—

 

416

 

671

South American impacts

 

115

 

 

—

 

—

 

—

 

—

 

115

Adjusted earnings from operations (b)

 

$4,374

 

 

$1,941

 

$940

 

$1,406

 

$4,287

 

$8,661

Total direct response costs - cyberattack (c)

 

$255

 

 

$22

 

$394

 

$—

 

$416

 

$776

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

5.4 %

 

 

7.1 %

 

12.0 %

 

4.3 %

 

6.2 %

 

8.0 %

Adjusted operating margin (b)

 

5.9 %

 

 

7.2 %

 

20.7 %

 

4.3 %

 

6.8 %

 

8.7 %

Business disruption impacts - cyberattack (d)

 

$—

 

 

$—

 

$334

 

$—

 

$334

 

$334

Total cyberattack impacts

 

$255

 

 

$22

 

$728

 

$—

 

$750

 

$1,110

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations

 

$4,358

 

 

$1,525

 

$968

 

$1,206

 

$3,699

 

$8,057

Operating margin

 

6.2 %

 

 

6.4 %

 

20.7 %

 

4.2 %

 

6.6 %

 

8.7 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations

 

$8,399

 

 

$3,818

 

$1,036

 

$2,553

 

$7,407

 

$15,806

Direct response costs - cyberattack

 

485

 

(a)

160

(a)

619

 

—

 

779

 

1,264

South American impacts

 

115

 

 

—

 

—

 

—

 

—

 

115

Adjusted earnings from operations (b)

 

$8,999

 

 

$3,978

 

$1,655

 

$2,553

 

$8,186

 

$17,185

Total direct response costs - cyberattack (c)

 

$485

 

 

$160

 

$619

 

$—

 

$779

 

$1,369

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

5.6 %

 

 

7.1 %

 

11.5 %

 

4.0 %

 

6.0 %

 

8.0 %

Adjusted operating margin (b)

 

6.0 %

 

 

7.4 %

 

18.3 %

 

4.0 %

 

6.6 %

 

8.6 %

Business disruption impacts - cyberattack (d)

 

$—

 

 

$—

 

$613

 

$—

 

$613

 

$613

Total cyberattack impacts

 

$485

 

 

$160

 

$1,232

 

$—

 

$1,392

 

$1,982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations

 

$8,701

 

 

$3,301

 

$1,875

 

$2,266

 

$7,442

 

$16,143

Operating margin

 

6.2 %

 

 

7.0 %

 

20.4 %

 

4.0 %

 

6.7 %

 

8.7 %

(a)

Amounts primarily represent incremental medical costs for accommodations to support care providers.

(b)

See page 7 for description of non-GAAP measures.

(c)

Amounts represent direct response costs incurred within the operating segments and at the parent (e.g., interest expense).

(d) Amounts represent reduced revenues during the business disruption period. These amounts are not included within the adjustment to earnings from operations.

UNITEDHEALTH GROUP

PEOPLE SERVED AND PERFORMANCE METRICS - SUPPLEMENTAL FINANCIAL INFORMATION

(unaudited)

 

UnitedHealthcare Customer Profile

(in thousands)

 

People Served

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

June 30, 2023

Commercial - Domestic:

 

 

 

 

 

 

 

 

Risk-based

 

8,735

 

8,545

 

8,115

 

8,035

Fee-based

 

20,835

 

20,870

 

19,200

 

19,140

Total Commercial - Domestic

 

29,570

 

29,415

 

27,315

 

27,175

Medicare Advantage

 

7,770

 

7,760

 

7,695

 

7,590

Medicaid

 

7,410

 

7,680

 

7,845

 

8,355

Medicare Supplement (Standardized)

 

4,335

 

4,325

 

4,355

 

4,330

Total Community and Senior

 

19,515

 

19,765

 

19,895

 

20,275

Total UnitedHealthcare - Domestic Medical

 

49,085

 

49,180

 

47,210

 

47,450

Commercial - Global

 

1,330

 

2,295

 

5,540

 

5,385

Total UnitedHealthcare - Medical

 

50,415

 

51,475

 

52,750

 

52,835

 

 

 

 

 

 

 

 

 

Supplemental Data

 

 

 

 

 

 

 

 

Medicare Part D stand-alone

 

3,065

 

3,085

 

3,315

 

3,355

Optum Performance Metrics

 

 

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

June 30, 2023

Optum Health Consumers Served (in millions)

 

104

 

104

 

103

 

103

Optum Insight Contract Backlog (in billions)

 

$32.6

 

$32.8

 

$32.1

 

$31.4

Optum Rx Quarterly Adjusted Scripts (in millions)

 

399

 

395

 

400

 

381

 

Note: UnitedHealth Group served 149 million unique individuals across all businesses at June 30, 2024.

UNITEDHEALTH GROUP

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Use of Non-GAAP Financial Measures

Adjusted net earnings per share, adjusted earnings from operations, adjusted operating margin, adjusted net margin, adjusted revenues and adjusted medical care ratio 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. Adjustments made to these measures are as follows:

Intangible Amortization: Adjusted net earnings per share excludes intangible amortization from the relevant GAAP measure. As amortization fluctuates based on the size and timing of the Company’s acquisition activity, management believes this exclusion presents 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.

South American Impacts: Adjusted net earnings per share and adjusted net margin excludes the effects of various international transactions, including the loss on sale of our Brazilian operations that was completed on February 6, 2024, the loss on our remaining South American operations being classified as held for sale and certain other non-recurring matters impacting our South American operations. Adjusted earnings from operations, adjusted operating margin, adjusted medical care ratio and adjusted revenues excludes the effects of certain non-recurring matters impacting our South American operations. As these matters are related to the Company's strategy to exit South America, the impact is not representative of the Company's underlying business performance and therefore management believes the exclusion presents a more useful comparison of the Company's underlying business performance and trends from period to period.

Direct Response Costs - Cyberattack: Adjusted net earnings per share, adjusted earnings from operations, adjusted medical care ratio, adjusted operating margin and adjusted net margin excludes cyberattack direct response costs. Management believes the exclusion of costs incurred to investigate and remediate the attack, other direct and incremental costs incurred as a result of the cyberattack and incremental costs for accommodations to support care providers presents a more useful comparison of the Company's and its reportable segments' underlying business performance and trends from period to period.

Note: See pages 4 and 5 for reconciliation of GAAP amounts to adjusted revenues, adjusted earnings from operations and adjusted operating margin.

UNITEDHEALTH GROUP

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in millions, except per share data; unaudited)

Adjusted Net Earnings Per Share

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

Projected Year Ended December 31,

 

 

2024

 

2023

 

2024

 

2023

 

2024

Net earnings attributable to UnitedHealth Group common shareholders

 

$4,216

 

$5,474

 

$2,807

 

$11,085

 

$14,750 - $15,300

Intangible amortization

 

417

 

398

 

816

 

786

 

~1,600

Tax effect of intangible amortization

 

(103)

 

(100)

 

(201)

 

(196)

 

~(400)

South American impacts

 

1,340

 

—

 

8,426

 

—

 

~8,450

Tax effect of South American impacts

 

(157)

 

—

 

(157)

 

—

 

~(160)

Direct response costs - cyberattack

 

776

 

—

 

1,369

 

—

 

1,600 -1,650

Tax effect of direct response costs - cyberattack

 

(182)

 

—

 

(323)

 

—

 

(375) - (400)

Adjusted net earnings attributable to UnitedHealth Group common shareholders

 

$6,307

 

$5,772

 

$12,737

 

$11,675

 

$25,400 - $26,000

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$4.54

 

$5.82

 

$3.02

 

$11.77

 

$15.95 - $16.40

Intangible amortization per share

 

0.45

 

0.42

 

0.88

 

0.83

 

~1.75

Tax effect of intangible amortization per share

 

(0.11)

 

(0.10)

 

(0.22)

 

(0.21)

 

~(0.45)

South American impacts per share

 

1.45

 

—

 

9.07

 

—

 

~9.10

Tax effect of South American impacts per share

 

(0.17)

 

—

 

(0.17)

 

—

 

~(0.15)

Direct response costs - cyberattack per share

 

0.84

 

—

 

1.47

 

—

 

1.70 - 1.80

Tax effects of direct response costs - cyberattack per share

 

(0.20)

 

—

 

(0.34)

 

—

 

(0.40) - (0.45)

Adjusted diluted earnings per share

 

$6.80

 

$6.14

 

$13.71

 

$12.39

 

$27.50 - $28.00

 

 

 

 

 

 

 

 

 

 

 

Additional Information: Total Cyberattack Impacts

 

 

 

 

 

 

 

 

 

 

Business disruption impacts (a)

 

$334

 

$—

 

$613

 

$—

 

$700 - $800

Tax effect of business disruption impacts (a)

 

(70)

 

—

 

(118)

 

—

 

(140) - (160)

Business disruption impacts, net of tax (a)

 

$264

 

$—

 

$495

 

$—

 

$560 - $640

 

 

 

 

 

 

 

 

 

 

 

Business disruption impacts per share (a)

 

$0.28

 

$—

 

$0.53

 

$—

 

$0.60 - $0.70

 

 

 

 

 

 

 

 

 

 

 

Total cyberattack impacts

 

$1,110

 

$—

 

$1,982

 

$—

 

$2,300 - $2,450

Tax effect of total cyberattack impacts

 

(252)

 

—

 

(441)

 

—

 

(515) - (560)

Total cyberattack impacts, net of tax

 

$858

 

$—

 

$1,541

 

$—

 

$1,785 - $1,890

 

 

 

 

 

 

 

 

 

 

 

Total cyberattack impacts per share

 

$0.92

 

$—

 

$1.66

 

$—

 

$1.90 - $2.05

(a)

Amounts represent reduced revenues during the business disruption period. These amounts are not included within the adjustment to net earnings.

Adjusted Net Margin

 

 

 

Three Months Ended June 30, 2024

 

Six Months Ended June 30, 2024

Consolidated revenue

 

$98,855

 

$198,651

South American impacts

 

220

 

220

Adjusted consolidated revenues

 

$99,075

 

$198,871

 

 

 

 

 

Net earnings attributable to UnitedHealth Group common shareholders

 

$4,216

 

$2,807

South American impacts

 

1,340

 

8,426

Tax effect of South American impacts

 

(157)

 

(157)

Direct response costs - cyberattack

 

776

 

1,369

Tax effect of direct response costs - cyberattack

 

(182)

 

(323)

Adjusted net earnings attributable to UnitedHealth Group common shareholders for South American impacts and direct response costs

 

$5,993

 

$12,122

 

 

 

 

 

Net margin attributable to UnitedHealth Group common shareholders

 

4.3 %

 

1.4 %

Adjusted net margin attributable to UnitedHealth Group common shareholders for South American impacts and direct response costs

 

6.0 %

 

6.1 %

Adjusted Medical Care Ratio

 

 

 

Projected Year Ended December 31, 2024

Medical care ratio

 

84.3% +/- 50 bps

Impact of direct response costs and South American impacts

 

~(0.3)%

Adjusted medical care ratio

 

84.0% +/- 50 bps

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240716029443/en/

Investor Contact: Zack Sopcak 952-936-7215 zack.sopcak@uhg.com

Media Contact: Eric Hausman 952-936-3963 eric.hausman@uhg.com