UnitedHealth Group corporate headquarters (Photo: Business Wire)
UnitedHealth Group corporate headquarters (Photo: Business Wire)
–(BUSINESS WIRE)–UnitedHealth Group (NYSE: UNH) reported third quarter 2024 results reflecting broad-based growth in the number of people served by Optum and UnitedHealthcare.
“Our continued growth, which positions us well for the coming years, is rooted in the innovative products and responsive service of our people that are embraced each day across the full range of health care participants,” said Andrew Witty, chief executive officer of UnitedHealth Group.
The company’s full year 2024 net earnings outlook of $15.50 to $15.75 per share reflects the South America operations disposition activities reported in the first half of 2024 and Change Healthcare cyberattack impacts.
The company’s adjusted net earnings outlook of $27.50 to $27.75 continues within the $27.50 to $28.00 range established nearly a year ago, even as it absorbs an estimated $0.75 per share of business disruption impacts for the affected Change Healthcare services, which have increased ~$0.10 per share from the estimate provided last quarter.
Quarterly Financial Performance
Three Months Ended
September 30,
2024
September 30,
2024 (Adj)
September 30,
2023
December 31,
2023
Revenues
$100.8 billion
$100.8 billion
$92.4 billion
$94.4 billion
Earnings from Operations
$ 8.7 billion
$ 9.0 billion
$ 8.5 billion
$ 7.7 billion
Net Margin
6.0%
6.3%
6.3%
5.8%
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,
2024
September 30,
2023
December 31,
2023
Revenues
$74.9 billion
$69.9 billion
$70.8 billion
Earnings from Operations
$ 4.2 billion
$ 4.6 billion
$ 3.1 billion
Operating Margin
5.6%
6.6%
4.4%
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
September 30,
2024
September 30,
2024 (Adj)
September 30,
2023
December 31,
2023
Revenues
$63.9 billion
$63.9 billion
$56.7 billion
$59.5 billion
Earnings from Operations
$ 4.5 billion
$ 4.8 billion
$ 3.9 billion
$ 4.6 billion
Operating Margin
7.0%
7.4%
6.9%
7.7%
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 through October 29, 2024. This earnings release and the Form 8-K dated October 15, 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 September 30, 2024
UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data; unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenues
Premiums
$77,442
$72,339
$232,327
$217,599
Products
12,631
10,354
36,751
31,272
Services
9,104
8,671
26,742
25,414
Investment and other income
1,643
997
3,651
2,910
Total revenues
100,820
92,361
299,471
277,195
Operating costs
Medical costs
65,957
59,550
197,150
179,663
Operating costs
13,280
13,855
40,519
41,289
Cost of products sold
11,834
9,423
34,230
28,576
Depreciation and amortization
1,041
1,007
3,058
2,998
Total operating costs
92,112
83,835
274,957
252,526
Earnings from operations
8,708
8,526
24,514
24,669
Interest expense
(1,074)
(834)
(2,903)
(2,416)
Loss on sale of subsidiary and subsidiaries held for sale
(20)
—
(8,331)
—
Earnings before income taxes
7,614
7,692
13,280
22,253
Provision for income taxes
(1,356)
(1,654)
(3,822)
(4,784)
Net earnings
6,258
6,038
9,458
17,469
Earnings attributable to noncontrolling interests
(203)
(197)
(596)
(543)
Net earnings attributable to UnitedHealth Group common shareholders
$6,055
$5,841
$8,862
$16,926
Diluted earnings per share attributable to UnitedHealth Group common shareholders
$6.51
$6.24
$9.53
$18.01
Adjusted earnings per share attributable to UnitedHealth Group common shareholders (a)
$7.15
$6.56
$20.85
$18.95
Diluted weighted-average common shares outstanding
930
936
930
940
(a)
See page 7 for a reconciliation of non-GAAP measures.
UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions; unaudited)
September 30,
2024
December 31,
2023
Assets
Cash and short-term investments
$37,134
$29,628
Accounts receivable, net
20,024
21,276
Other current assets
35,100
27,533
Total current assets
92,258
78,437
Long-term investments
48,689
47,609
Other long-term assets
158,362
147,674
Total assets
$299,309
$273,720
Liabilities, redeemable noncontrolling interests and equity
Medical costs payable
$33,951
$32,395
Short-term borrowings and current maturities of long-term debt
3,909
4,274
Other current liabilities
63,705
62,385
Total current liabilities
101,565
99,054
Long-term debt, less current maturities
74,101
58,263
Other long-term liabilities
19,188
17,484
Redeemable noncontrolling interests
4,574
4,498
Equity
99,881
94,421
Total liabilities, redeemable noncontrolling interests and equity
$299,309
$273,720
UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
Nine Months Ended
September 30,
2024
2023
Operating Activities
Net earnings
$9,458
$17,469
Noncash items:
Depreciation and amortization
3,058
2,998
Deferred income taxes and other
(844)
(553)
Share-based compensation
831
851
Loss on sale of subsidiary and subsidiaries held for sale
8,331
—
Net changes in operating assets and liabilities
1,001
13,496
Cash flows from operating activities
21,835
34,261
Investing Activities
Sales and maturities of investments, net of purchases (purchases, net of sales and maturities)
1,852
(2,850)
Purchases of property, equipment and capitalized software
(2,587)
(2,427)
Cash paid for acquisitions and other transactions, net
(11,674)
(8,389)
Loans to care providers – cyberattack
(8,904)
—
Repayment of care provider loans – cyberattack
3,189
—
Other, net
(1,284)
(721)
Cash flows used for investing activities
(19,408)
(14,387)
Financing Activities
Common share repurchases
(4,028)
(6,500)
Dividends paid
(5,601)
(5,023)
Net change in short-term borrowings and long-term debt
15,120
5,848
Other, net
(661)
1,302
Cash flows from (used for) financing activities
4,830
(4,373)
Effect of exchange rate changes on cash and cash equivalents
(30)
49
Increase in cash and cash equivalents, including cash within businesses held for sale
7,227
15,550
Less: cash within businesses held for sale
(254)
—
Net increase in cash and cash equivalents
6,973
15,550
Cash and cash equivalents, beginning of period
25,427
23,365
Cash and cash equivalents, end of period
$32,400
$38,915
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 September 30, 2024
Total revenues
$74,853
$25,917
$4,931
$34,207
$63,925
$100,820
Business disruption impacts – cyberattack (c)
$—
$—
$134
$—
$134
$134
Three Months Ended September 30, 2023
Total revenues
$69,853
$23,864
$4,977
$28,857
$56,737
$92,361
Nine Months Ended September 30, 2024
Total revenues
$224,076
$79,698
$13,976
$97,457
$187,856
$299,471
South American impacts
220
—
—
—
—
220
Adjusted revenues (b)
$224,296
$79,698
$13,976
$97,457
$187,856
$299,691
Business disruption impacts – cyberattack (c)
$—
$—
$747
$—
$747
$747
Nine Months Ended September 30, 2023
Total revenues
$210,552
$70,785
$14,147
$84,921
$167,140
$277,195
UnitedHealthcare Revenues
(in millions; unaudited)
Employer & Individual (E&I)
Medicare &
Retirement
Community &
State
Total
UnitedHealthcare
Domestic
Global
Total E&I
Three Months Ended September 30, 2024
Total revenues
$18,985
$769
$19,754
$34,904
$20,195
$74,853
Three Months Ended September 30, 2023
Total revenues
$16,854
$2,417
$19,271
$32,022
$18,560
$69,853
Nine Months Ended September 30, 2024
Total revenues
$55,470
$2,892
$58,362
$105,294
$60,420
$224,076
Nine Months Ended September 30, 2023
Total revenues
$50,157
$6,905
$57,062
$97,468
$56,022
$210,552
(a)
Optum and consolidated revenues for the three months ended September 30, 2024 and 2023 include Optum eliminations of $1,130 and $961; and corporate eliminations of $37,958 and $34,229, respectively. Optum and consolidated revenues for the nine months ended September 30, 2024 and 2023 include Optum eliminations of $3,275 and $2,713; and corporate eliminations of $112,461 and $100,497, respectively.
(b)
See page 7 for description of non-GAAP measures.
(c)
Amounts represent reduced revenues due to business disruption.
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 September 30, 2024
Earnings from operations
$4,212
$2,161
$791
$1,544
$4,496
$8,708
Direct response costs – cyberattack
—
—
257
—
257
257
Adjusted earnings from operations (b)
$4,212
$2,161
$1,048
$1,544
$4,753
$8,965
Total direct response costs – cyberattack (c)
$—
$—
$257
$—
$257
$341
Operating margin
5.6 %
8.3 %
16.0 %
4.5 %
7.0 %
8.6 %
Adjusted operating margin (b)
5.6 %
8.3 %
21.3 %
4.5 %
7.4 %
8.9 %
Business disruption impacts – cyberattack (d)
$—
$—
$134
$—
$134
$134
Total cyberattack impacts
$—
$—
$391
$—
$391
$475
Three Months Ended September 30, 2023
Earnings from operations
$4,592
$1,568
$1,109
$1,257
$3,934
$8,526
Operating margin
6.6 %
6.6 %
22.3 %
4.4 %
6.9 %
9.2 %
Nine Months Ended September 30, 2024
Earnings from operations
$12,611
$5,979
$1,827
$4,097
$11,903
$24,514
Direct response costs – cyberattack
485
(a)
160
(a)
876
—
1,036
1,521
South American impacts
115
—
—
—
—
115
Adjusted earnings from operations (b)
$13,211
$6,139
$2,703
$4,097
$12,939
$26,150
Total direct response costs – cyberattack (c)
$485
$160
$876
$—
$1,036
$1,710
Operating margin
5.6 %
7.5 %
13.1 %
4.2 %
6.3 %
8.2 %
Adjusted operating margin (b)
5.9 %
7.7 %
19.3 %
4.2 %
6.9 %
8.7 %
Business disruption impacts – cyberattack (d)
$—
$—
$747
$—
$747
$747
Total cyberattack impacts
$485
$160
$1,623
$—
$1,783
$2,457
Nine Months Ended September 30, 2023
Earnings from operations
$13,293
$4,869
$2,984
$3,523
$11,376
$24,669
Operating margin
6.3 %
6.9 %
21.1 %
4.1 %
6.8 %
8.9 %
(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 due to business disruption. 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
September 30, 2024
June 30, 2024
December 31, 2023
September 30, 2023
Commercial – Domestic:
Risk-based
8,900
8,735
8,115
8,120
Fee-based
20,830
20,835
19,200
19,130
Total Commercial – Domestic
29,730
29,570
27,315
27,250
Medicare Advantage
7,810
7,770
7,695
7,645
Medicaid
7,450
7,410
7,845
8,065
Medicare Supplement (Standardized)
4,340
4,335
4,355
4,345
Total Community and Senior
19,600
19,515
19,895
20,055
Total UnitedHealthcare – Domestic Medical
49,330
49,085
47,210
47,305
Commercial – Global
1,335
1,330
5,540
5,475
Total UnitedHealthcare – Medical
50,665
50,415
52,750
52,780
Supplemental Data
Medicare Part D stand-alone
3,055
3,065
3,315
3,355
Optum Performance Metrics
September 30, 2024
June 30, 2024
December 31, 2023
September 30, 2023
Optum Health Consumers Served (in millions)
104
104
103
103
Optum Insight Contract Backlog (in billions)
$32.8
$32.6
$32.1
$31.6
Optum Rx Quarterly Adjusted Scripts (in millions)
407
399
400
383
Note: UnitedHealth Group served 148 million unique individuals across all businesses at September 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 and adjusted revenues 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 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 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
September 30,
Nine Months Ended
September 30,
Projected Year Ended
December 31,
2024
2023
2024
2023
2024
Net earnings attributable to UnitedHealth Group common shareholders
$6,055
$5,841
$8,862
$16,926
$14,375 – $14,650
Intangible amortization
426
392
1,242
1,178
~1,650
Tax effect of intangible amortization
(104)
(96)
(305)
(292)
~(410)
South American impacts
9
—
8,435
—
~8,515
Tax effect of South American impacts
4
—
(153)
—
~(175)
Direct response costs – cyberattack
341
—
1,710
—
~2,000
Tax effect of direct response costs – cyberattack
(80)
—
(403)
—
~(470)
Adjusted net earnings attributable to UnitedHealth Group common shareholders
$6,651
$6,137
$19,388
$17,812
$25,475 – $25,750
Diluted earnings per share
$6.51
$6.24
$9.53
$18.01
$15.50 – $15.75
Intangible amortization per share
0.46
0.42
1.34
1.25
~1.80
Tax effect of intangible amortization per share
(0.11)
(0.10)
(0.33)
(0.31)
~(0.45)
South American impacts per share
0.01
—
9.07
—
~9.15
Tax effect of South American impacts per share
—
—
(0.17)
—
~(0.15)
Direct response costs – cyberattack per share
0.37
—
1.84
—
~2.15
Tax effects of direct response costs – cyberattack per share
(0.09)
—
(0.43)
—
~(0.50)
Adjusted diluted earnings per share
$7.15
$6.56
$20.85
$18.95
$27.50 – $27.75
Additional Information: Total Cyberattack Impacts
Business disruption impacts (a)
$134
$—
$747
$—
~$870
Tax effect of business disruption impacts (a)
(21)
—
(139)
—
~(165)
Business disruption impacts, net of tax (a)
$113
$—
$608
$—
~$705
Business disruption impacts per share (a)
$0.12
$—
$0.65
$—
~$0.75
Total cyberattack impacts
$475
$—
$2,457
$—
~2,870
Tax effect of total cyberattack impacts
(101)
—
(542)
—
~(635)
Total cyberattack impacts, net of tax
$374
$—
$1,915
$—
~$2,235
Total cyberattack impacts per share
$0.40
$—
$2.06
$—
~$2.40
(a)
Amounts represent reduced revenues due to business disruption. These amounts are not included within the adjustment to net earnings.
Adjusted Net Margin
Three Months Ended
September 30, 2024
Nine Months Ended
September 30, 2024
Consolidated revenue
$100,820
$299,471
South American impacts
—
220
Adjusted consolidated revenues
$100,820
$299,691
Net earnings attributable to UnitedHealth Group common shareholders
$6,055
$8,862
South American impacts
9
8,435
Tax effect of South American impacts
4
(153)
Direct response costs – cyberattack
341
1,710
Tax effect of direct response costs – cyberattack
(80)
(403)
Adjusted net earnings attributable to UnitedHealth Group common shareholders for South American impacts and direct response costs
$6,329
$18,451
Net margin attributable to UnitedHealth Group common shareholders
6.0 %
3.0 %
Adjusted net margin attributable to UnitedHealth Group common shareholders for South American impacts and direct response costs
6.3 %
6.2 %
Investor Contact:
Zack Sopcak
952-936-7215
zack.sopcak@uhg.com
Media Contact:
Eric Hausman
952-936-3963
eric.hausman@uhg.com
UnitedHealth Group Reports Third Quarter 2024 Results
Investor Contact:
Zack Sopcak
952-936-7215
zack.sopcak@uhg.com
Media Contact:
Eric Hausman
952-936-3963
eric.hausman@uhg.com