– UnitedHealth Group (NYSE: UNH) reported first quarter
2023 results reflecting consistent broad-based growth at Optum and UnitedHealthcare.
“Our strong, enterprise-wide growth this quarter is a direct result of our colleagues’ unwavering
commitment to offering more health services to more people and connecting consumers with greater
access to high-quality, affordable care,” said Andrew Witty, chief executive officer of UnitedHealth
Group.
Growth in the first quarter was led by serving more people across the enterprise and the company’s
expanding capabilities to care for them more comprehensively. The company increased its full year net
earnings outlook to $23.25 to $23.75 per share and adjusted net earnings to $24.50 to $25.00 per
share.
Page 2 of 6
Quarterly Financial Performance
Three Months Ended
March 31,
2023
March 31,
2022
December 31,
2022
Revenues $91.9 billion $80.1 billion $82.8 billion
Earnings from Operations $ 8.1 billion $ 7.0 billion $ 6.9 billion
Net Margin 6.1% 6.3% 5.8%
- UnitedHealth Group’s first quarter 2023 revenues grew 15% to $91.9 billion year-over-year,
including diversified double-digit growth at both Optum and UnitedHealthcare. - First quarter 2023 earnings from operations were $8.1 billion, an increase of 16%, with strong
contributions from both Optum and UnitedHealthcare. Year-over-year earnings growth was led
by Optum Health as a result of its growing positive impact in serving patients with value-based
care services. - The first quarter 2023 medical care ratio at 82.2% compared to 82% last year, due to business
mix. Days claims payable were 47.8, compared to 49.9 in the fourth quarter 2022 and 49.1 in
the first quarter 2022. Favorable medical reserve development in the first quarter of $470
million compared to $620 million in the fourth quarter 2022 and $290 million in the year ago first
quarter. - The first quarter 2023 operating cost ratio of 14.8% increased from 14.2% in 2022 due to
business mix and the company’s continued investments to accelerate and support future
growth opportunities, partially offset by continued productivity advances. - Cash flows from operations for the first quarter 2023 were $16.3 billion or 2.8-times net income.
Excluding the impact of April CMS payments received at the end of March, adjusted cash flows
from operations were $5.1 billion or 0.9-times net income, consistent with the company’s
outlook. The company returned $3.5 billion to shareholders in the first quarter through
dividends and share repurchases. Return on equity of 28.2% in the quarter reflected the
company’s consistent and diverse earnings profile and efficient capital structure.
Page 3 of 6
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
March 31,
2023
March 31,
2022
December 31,
2022
Revenues $70.5 billion $62.6 billion $63.0 billion
Earnings from Operations $ 4.3 billion $ 3.8 billion $ 2.9 billion
Operating Margin 6.2% 6.1% 4.7% - UnitedHealthcare first quarter revenues grew 13% to $70.5 billion and operating earnings grew
14% to $4.3 billion, reflecting growth in the number of people served. - In the first quarter of 2023, UnitedHealthcare grew to serve nearly 2 million more people than a
year ago, with broad-based growth across the company’s commercial, community-based and
senior benefit offerings. The number of consumers served with domestic commercial benefit
offerings grew 665,000 in the first quarter 2023 compared to year-end 2022, reflecting
continued focus on innovative, affordable, consumer-centric benefit plans. Recent Medicaid
contract awards in Indiana and Texas will expand the products and geographies served.
UnitedHealthcare is pacing strongly to its outlook for another year of market-leading growth in
serving more people through its Medicare Advantage offerings.
Page 4 of 6
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 and technology to yield 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
March 31,
2023
March 31,
2022
December 31,
2022
Revenues $54.1 billion $43.3 billion $47.9 billion
Earnings from Operations $ 3.7 billion $ 3.2 billion $ 4.0 billion
Operating Margin 6.9% 7.3% 8.3% - Optum first quarter revenues grew 25% to $54.1 billion and operating earnings grew 19% to
$3.7 billion. - Optum Health revenue per consumer served increased 34% over the year ago quarter, driven
by growth in people served under value-based care arrangements. The results reflect
continued expansion of the care services offered to meet patients’ care needs across at-home,
digital and in-clinic settings. - Optum Insight’s revenue backlog increased by 35% to $30.7 billion, compared to a year ago,
driven by the addition of Change Healthcare and growth in comprehensive managed services
offerings for health systems. Optum Insight continues to accelerate its integration activities and
investments in services, capabilities and product offerings to care providers and health plans. - Optum Rx’s revenue growth of 15% in the first quarter resulted from advances in serving new
clients and further expansion of its specialty and community-based pharmacy offerings.
Adjusted scripts grew to 378 million compared to 352 million last year.
Page 5 of 6
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.com/Replay through April 28, 2023. This earnings release and the Form 8-K
dated April 14, 2023, 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: 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; 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;
Page 6 of 6
cyberattacks, other privacy/data security incidents, or our failure to comply with related regulations;
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 (including any
increase in the U.S. income tax rate applicable to corporations); increases in costs and other liabilities
associated with litigation, government investigations, audits or reviews; failure to manage successfully
our strategic alliances or complete, manage or integrate strategic transactions; risks associated with
public health crises arising from large-scale medical emergencies, pandemics, natural disasters and
other extreme events; fluctuations in foreign currency exchange rates; 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, 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.
.
#
Investor Contact: Media Contact:
Zack Sopcak Matt Stearns
Senior Vice President Senior Vice President
952-936-7215 202-276-0085
[email protected] [email protected]
UNITEDHEALTH GROUP
Earnings Release Schedules and Supplementary Information
Quarter Ended March 31, 2023
- 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
March 31,
2023 2022
Revenues
Premiums…………………………………………………………………………………………………………………………………………………………………….. $72,786 $64,070
Products ………………………………………………………………………………………………………………………………………………………………………. 10,267 9,340
Services……………………………………………………………………………………………………………………………………………………………………….. 8,080 6,372
Investment and other income………………………………………………………………………………………………………………………………………. 798 367
Total revenues ………………………………………………………………………………………………………………………………………………………… 91,931 80,149
Operating costs
Medical costs……………………………………………………………………………………………………………………………………………………………….. 59,845 52,523
Operating costs……………………………………………………………………………………………………………………………………………………………. 13,625 11,401
Cost of products sold…………………………………………………………………………………………………………………………………………………… 9,405 8,487
Depreciation and amortization……………………………………………………………………………………………………………………………………… 970 788
Total operating costs……………………………………………………………………………………………………………………………………………….. 83,845 73,199
Earnings from operations…………………………………………………………………………………………………………………………………………. 8,086 6,950
Interest expense………………………………………………………………………………………………………………………………………………………….. (754) (433)
Earnings before income taxes………………………………………………………………………………………………………………………………….. 7,332 6,517
Provision for income taxes…………………………………………………………………………………………………………………………………………… (1,558) (1,369)
Net earnings ………………………………………………………………………………………………………………………………………………………………. 5,774 5,148
Earnings attributable to noncontrolling interests…………………………………………………………………………………………………………… (163) (121)
Net earnings attributable to UnitedHealth Group common shareholders…………………………………………………………….. $5,611 $5,027
Diluted earnings per share attributable to UnitedHealth Group common shareholders …………………………………….. $5.95 $5.27
Adjusted earnings per share attributable to UnitedHealth Group common shareholders (a) …………………………….. $6.26 $5.49
Diluted weighted-average common shares outstanding………………………………………………………………………………………………. 943 954
(a) See page 6 for a reconciliation of the non-GAAP measure
1
UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)
March 31,
2023
December 31,
2022
Assets
Cash and short-term investments ………………………………………………………………………………………………………………………………….. $46,497 $27,911
Accounts receivable, net ……………………………………………………………………………………………………………………………………………….. 22,414 17,681
Other current assets………………………………………………………………………………………………………………………………………………………. 24,984 23,477
Total current assets………………………………………………………………………………………………………………………………………………. 93,895 69,069
Long-term investments ………………………………………………………………………………………………………………………………………………….. 46,884 43,728
Other long-term assets ………………………………………………………………………………………………………………………………………………….. 142,900 132,908
Total assets……………………………………………………………………………………………………………………………………………………………… $283,679 $245,705
Liabilities, redeemable noncontrolling interests and equity
Medical costs payable……………………………………………………………………………………………………………………………………………………. $31,809 $29,056
Short-term borrowings and current maturities of long-term debt……………………………………………………………………………………. 9,931 3,110
Other current liabilities …………………………………………………………………………………………………………………………………………………… 74,742 57,071
Total current liabilities…………………………………………………………………………………………………………………………………………… 116,482 89,237
Long-term debt, less current maturities………………………………………………………………………………………………………………………….. 60,657 54,513
Other long-term liabilities……………………………………………………………………………………………………………………………………………….. 15,918 15,608
Redeemable noncontrolling interests …………………………………………………………………………………………………………………………….. 4,801 4,897
Equity…………………………………………………………………………………………………………………………………………………………………………….. 85,821 81,450
Total liabilities, redeemable noncontrolling interests and equity………………………………………………………………………………. $283,679 $245,705
2
UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
Three Months Ended
March 31,
2023 2022
Operating Activities
Net earnings ………………………………………………………………………………………………………………………………………………………………….. $5,774 $5,148
Noncash items:
Depreciation and amortization……………………………………………………………………………………………………………………………………. 970 788
Deferred income taxes and other……………………………………………………………………………………………………………………………….. (263) 178
Share-based compensation ……………………………………………………………………………………………………………………………………….. 362 299
Net changes in operating assets and liabilities………………………………………………………………………………………………………………. 9,484 (1,094)
Cash flows from operating activities………………………………………………………………………………………………………………………… 16,327 5,319
Investing Activities
Purchases of investments, net of sales and maturities ………………………………………………………………………………………………….. (2,319) (1,632)
Purchases of property, equipment and capitalized software………………………………………………………………………………………….. (760) (555)
Cash paid for acquisitions, net ………………………………………………………………………………………………………………………………………. (7,826) (1,231)
Other, net ………………………………………………………………………………………………………………………………………………………………………. (115) (255)
Cash flows used for investing activities …………………………………………………………………………………………………………………… (11,020) (3,673)
Financing Activities
Common share repurchases………………………………………………………………………………………………………………………………………….. (2,000) (2,500)
Dividends paid……………………………………………………………………………………………………………………………………………………………….. (1,537) (1,363)
Net change in short-term borrowings and long-term debt………………………………………………………………………………………………. 12,375 2,048
Other, net ………………………………………………………………………………………………………………………………………………………………………. 4,352 4,119
Cash flows from financing activities…………………………………………………………………………………………………………………………. 13,190 2,304
Effect of exchange rate changes on cash and cash equivalents……………………………………………………………………………………. 51 157
Increase in cash and cash equivalents ………………………………………………………………………………………………………………………….. 18,548 4,107
Cash and cash equivalents, beginning of period……………………………………………………………………………………………………………. 23,365 21,375
Cash and cash equivalents, end of period …………………………………………………………………………………………………………………….. $41,913 $25,482
3
UNITEDHEALTH GROUP
SUPPLEMENTAL FINANCIAL INFORMATION – BUSINESSES
(in millions, except percentages)
(unaudited)
Three Months Ended
March 31,
2023 2022
Revenues
UnitedHealthcare………………………………………………………………………………………………………………………………………………………….. $70,468 $62,595
Optum…………………………………………………………………………………………………………………………………………………………………………… 54,059 43,259
Eliminations…………………………………………………………………………………………………………………………………………………………………… (32,596) (25,705)
Total consolidated revenues …………………………………………………………………………………………………………………………………… $91,931 $80,149
Earnings from Operations
UnitedHealthcare………………………………………………………………………………………………………………………………………………………….. $4,343 $3,798
Optum (a)……………………………………………………………………………………………………………………………………………………………………… 3,743 3,152
Total consolidated earnings from operations…………………………………………………………………………………………………………… $8,086 $6,950
Operating Margin
UnitedHealthcare………………………………………………………………………………………………………………………………………………………….. 6.2% 6.1%
Optum…………………………………………………………………………………………………………………………………………………………………………… 6.9% 7.3%
Consolidated operating margin ………………………………………………………………………………………………………………………………. 8.8% 8.7%
Revenues
UnitedHealthcare Employer & Individual – Domestic …………………………………………………………………………………………………….. $16,544 $15,822
UnitedHealthcare Employer & Individual – Global …………………………………………………………………………………………………………. 2,163 2,133
UnitedHealthcare Employer & Individual – Total ……………………………………………………………………………………………………… 18,707 17,955
UnitedHealthcare Medicare & Retirement…………………………………………………………………………………………………………………….. 33,006 29,100
UnitedHealthcare Community & State…………………………………………………………………………………………………………………………… 18,755 15,540
Optum Health ……………………………………………………………………………………………………………………………………………………………….. $23,004 $16,682
Optum Insight……………………………………………………………………………………………………………………………………………………………….. 4,496 3,219
Optum Rx ……………………………………………………………………………………………………………………………………………………………………… 27,418 23,911
Optum eliminations……………………………………………………………………………………………………………………………………………………….. (859) (553)
(a) Earnings from operations for Optum for the three months ended March 31, 2023 and 2022 included $1,776 and $1,366 for Optum Health; $907 and $847 for Optum
Insight; and $1,060 and $939 for Optum Rx, respectively.
4
UNITEDHEALTH GROUP
SUPPLEMENTAL FINANCIAL INFORMATION – BUSINESS METRICS
UNITEDHEALTHCARE CUSTOMER PROFILE
(in thousands)
People Served March 31, 2023 December 31, 2022 March 31, 2022
Commercial – Domestic:
Risk-based…………………………………………………………………………………………………………… 8,025 8,045 7,950
Fee-based……………………………………………………………………………………………………………. 19,325 18,640 18,460
Total Commercial – Domestic……………………………………………………………………………. 27,350 26,685 26,410
Medicare Advantage………………………………………………………………………………………………… 7,545 7,105 6,890
Medicaid………………………………………………………………………………………………………………….. 8,380 8,170 7,810
Medicare Supplement (Standardized)……………………………………………………………………… 4,320 4,375 4,355
Total Community and Senior …………………………………………………………………………… 20,245 19,650 19,055
Total UnitedHealthcare – Domestic Medical……………………………………………………. 47,595 46,335 45,465
Commercial – Global………………………………………………………………………………………………… 5,295 5,360 5,500
Total UnitedHealthcare – Medical…………………………………………………………………….. 52,890 51,695 50,965
Supplemental Data
Medicare Part D stand-alone………………………………………………………………………………. 3,380 3,295 3,360
OPTUM PERFORMANCE METRICS
March 31, 2023 December 31, 2022 March 31, 2022
Optum Health Consumers Served (in millions) ……………………………………………………….. 103 102 100
Optum Insight Contract Backlog (in billions)……………………………………………………………. $30.7 $30.0 $22.8
Optum Rx Quarterly Adjusted Scripts (in millions)…………………………………………………… 378 370 352
Note: UnitedHealth Group served 152 million unique individuals across all businesses at March 31, 2023.
5
UNITEDHEALTH GROUP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions, except per share data)
(unaudited)
ADJUSTED NET EARNINGS PER SHARE(a)
Three Months Ended
March 31,
Projected Year Ended
December 31,
2023 2022 2023
GAAP net earnings attributable to UnitedHealth Group common shareholders………………….. $5,611 $5,027 $21,800 – $22,400
Intangible amortization……………………………………………………………………………………………………….. 388 281 ~1,565
Tax effect of intangible amortization……………………………………………………………………………………. (96) (69) ~(390)
Adjusted net earnings attributable to UnitedHealth Group common shareholders……….. $5,903 $5,239 $22,975 – $23,575
GAAP diluted earnings per share……………………………………………………………………………………….. $5.95 $5.27 $23.25 – $23.75
Intangible amortization per share……………………………………………………………………………………….. 0.41 0.29 ~1.65
Tax effect per share of intangible amortization……………………………………………………………………. (0.10) (0.07) ~(0.40)
Adjusted diluted earnings per share…………………………………………………………………………….. $6.26 $5.49 $24.50 – $25.00
ADJUSTED CASH FLOWS FROM OPERATIONS(a)
Three Months Ended
March 31, 2023
GAAP cash flows from operations …………………………………………………………………………………………………………………………………………………….. $16,327
Less: April CMS premium payments received in March…………………………………………………………………………………………………………………….. (11,196)
Adjusted cash flows from operations ………………………………………………………………………………………………………………………………………….. $5,131
(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.
