Revenues of $92.4 Billion Grew 14% Year-Over-Year
Earnings from Operations Grew 14%
Cash Flows from Operations were $6.9 Billion
Earnings were $6.24 Per Share, Adjusted Earnings $6.56 Per Share

UnitedHealth Group (NYSE:UNH) reported third quarter 2023 performance led by broad-based growth at Optum and UnitedHealthcare.

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UnitedHealth Group corporate headquarters (Photo: Business Wire)

"As a result of our colleagues' steadfast focus on helping people access and receive the care they need, we are well-positioned to help even more people and continue to generate strong, diversified growth in the coming years," said Andrew Witty, chief executive officer of UnitedHealth Group.

Growth in the third quarter was driven by the continuing increase in the number of people served by Optum and UnitedHealthcare and the broadening scope of services offered. The company strengthened the range of its full year 2023 net earnings outlook to $23.60 to $23.75 per share and adjusted net earnings to $24.85 to $25.00 per share.

Quarterly Financial Performance
	Three Months Ended
	September 30, 2023	September 30, 2022	June 30, 2023
Revenues	$92.4 billion	$80.9 billion	$92.9 billion
Earnings from Operations	$ 8.5 billion	$ 7.5 billion	$ 8.1 billion
Net Margin	6.3%	6.5%	5.9%

UnitedHealth Group's third quarter 2023 revenues grew 14% to $92.4 billion year-over-year, including double-digit growth at both Optum and UnitedHealthcare. Third quarter 2023 earnings from operations were $8.5 billion, an increase of 14%.
The third quarter 2023 medical care ratio of 82.3%, compared to 81.6% last year, driven by previously noted outpatient care, primarily serving seniors, and business mix. Days claims payable were 50.7, compared to 48.2 in the second quarter 2023 and 50.8 in the third quarter 2022. Favorable medical reserve development of $720 million compared to $480 million in the second quarter 2023 and $870 million in the year-ago third quarter.
The third quarter 2023 operating cost ratio of 15% increased from 14.4% last year as the company's business mix continues to shift to services and due to investments to support growth, offset in part by productivity improvements.
Cash flows from operations for the third quarter 2023 were $6.9 billion or 1.1x net income. Nine-months to date, cash flows were $34.3 billion or 2.0x net income and adjusted for CMS payment timing were $22.4 billion or 1.3x net income. The company returned over $11.5 billion to shareholders through the first nine months of 2023 through dividends and share repurchases. Return on equity of 28% in the quarter reflected the company's consistent, broad-based earnings 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, 2023	September 30, 2022	June 30, 2023
Revenues	$69.9 billion	$62.0 billion	$70.2 billion
Earnings from Operations	$ 4.6 billion	$ 3.8 billion	$ 4.4 billion
Operating Margin	6.6%	6.1%	6.2%

UnitedHealthcare third quarter revenues grew 13% to $69.9 billion, reflecting growth in the number of people served. Operating earnings were $4.6 billion compared to $3.8 billion last year.
Year-to-date, total people served by UnitedHealthcare with medical benefits has increased by 1.1 million, driven by growth in the company's commercial and public sector businesses. The number of consumers served with commercial benefits has grown by nearly 700,000 in 2023, reflecting the company's focus on innovative and affordable benefit plans. The number of people served by the company's senior and community offerings grew by over 400,000 due to product designs tailored to meet the specific needs of seniors as well as people and their families with limited economic resources and who often are underserved.
The UnitedHealthcare team remains actively engaged with individuals impacted by the ongoing state-driven Medicaid eligibility redetermination process. The company's comprehensive outreach efforts are helping families connect with the right resources to maintain affordable coverage.

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 by optimizing care quality, reducing care costs and improving the consumer experience.

Quarterly Financial Performance
	Three Months Ended
	September 30, 2023	September 30, 2022	June 30, 2023
Revenues	$56.7 billion	$46.6 billion	$56.3 billion
Earnings from Operations	$ 3.9 billion	$ 3.7 billion	$ 3.7 billion
Operating Margin	6.9%	7.9%	6.6%

Optum third quarter revenues grew 22% to $56.7 billion. Operating earnings were $3.9 billion compared to $3.7 billion last year. The operating margin of 6.9% compares to 7.9% in the prior year, reflecting investments in services provided to patients and customers to support growth.
Optum Health revenue increased 29% over last year and revenue per consumer served increased 27%, driven by growth in patients served under value-based care arrangements and continued expansion of the types and levels of care provided. The operating results reflect previously noted higher care activity and continued investments to improve patient health outcomes and status.
Optum Insight revenue increased 35% compared to a year ago due to the addition of Change Healthcare and growth across its technology-enabled offerings, which serve health systems, care providers, health plans and life sciences organizations. Optum Insight continues to build and invest in advanced data capabilities to meet the rising needs of its customers. The revenue backlog increased by more than $7 billion to over $31 billion compared to last year.
Optum Rx revenue increased 14% in the third quarter due to growth in serving new clients, expanded relationships with existing clients and continued advancement in the comprehensive scope of pharmacy services offered, including specialty and community-based pharmacy offerings. Adjusted scripts grew to over 383 million compared to 359 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 October 27, 2023. This earnings release and the Form 8-K dated October 13, 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; 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; increases in costs and other liabilities associated with litigation, government investigations, audits or reviews; failure to 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; 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.

UNITEDHEALTH GROUP

Earnings Release Schedules and Supplementary Information
Quarter Ended September 30, 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 September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenues
Premiums	$	72,339		$	64,491		$	217,599		$	192,457
Products		10,354			9,190			31,272			28,026
Services		8,671			6,700			25,414			19,717
Investment and other income		997			513			2,910			1,175

Total revenues		92,361			80,894			277,195			241,375

Operating costs
Medical costs		59,550			52,635			179,663			157,251
Operating costs		13,855			11,663			41,289			34,773
Cost of products sold		9,423			8,306			28,576			25,389
Depreciation and amortization		1,007			828			2,998			2,418

Total operating costs		83,835			73,432			252,526			219,831

Earnings from operations		8,526			7,462			24,669			21,544

Interest expense		(834	)		(516	)		(2,416	)		(1,416	)

Earnings before income taxes		7,692			6,946			22,253			20,128

Provision for income taxes		(1,654	)		(1,562	)		(4,784	)		(4,397	)

Net earnings		6,038			5,384			17,469			15,731

Earnings attributable to noncontrolling interests		(197	)		(122	)		(543	)		(372	)

Net earnings attributable to UnitedHealth Group common shareholders	$	5,841		$	5,262		$	16,926		$	15,359

Diluted earnings per share attributable to
UnitedHealth Group common shareholders	$	6.24		$	5.55		$	18.01		$	16.15

Adjusted earnings per share attributable to
UnitedHealth Group common shareholders (a)	$	6.56		$	5.79		$	18.95		$	16.85

Diluted weighted-average common shares outstanding		936			948			940			951

(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,
	2023		2022
Assets
Cash and short-term investments	$	44,097	$	27,911
Accounts receivable, net		20,673		17,681
Other current assets		27,135		23,477

Total current assets		91,905		69,069

Long-term investments		45,474		43,728
Other long-term assets		144,684		132,908

Total assets	$	282,063	$	245,705


Liabilities, redeemable noncontrolling interests and equity
Medical costs payable	$	32,792	$	29,056
Short-term borrowings and current maturities of long-term debt		5,290		3,110
Other current liabilities		76,097		57,071

Total current liabilities		114,179		89,237

Long-term debt, less current maturities		58,079		54,513
Other long-term liabilities		15,825		15,608
Redeemable noncontrolling interests		4,416		4,897
Equity		89,564		81,450

Total liabilities, redeemable noncontrolling interests and equity	$	282,063	$	245,705

UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)

	Nine Months Ended September 30,
	2023			2022
Operating Activities
Net earnings	$	17,469		$	15,731
Noncash items:
Depreciation and amortization		2,998			2,418
Deferred income taxes and other		(553	)		(590	)
Share-based compensation		851			675
Net changes in operating assets and liabilities		13,496			12,505

Cash flows from operating activities		34,261			30,739

Investing Activities
Purchases of investments, net of sales and maturities		(2,850	)		(4,067	)
Purchases of property, equipment and capitalized software		(2,427	)		(1,936	)
Cash paid for acquisitions, net		(8,389	)		(7,154	)
Other, net		(721	)		50

Cash flows used for investing activities		(14,387	)		(13,107	)

Financing Activities
Common share repurchases		(6,500	)		(6,000	)
Dividends paid		(5,023	)		(4,450	)
Net change in short-term borrowings and long-term debt		5,848			3,806
Other, net		1,302			6,478

Cash flows used for financing activities		(4,373	)		(166	)

Effect of exchange rate changes on cash and cash equivalents		49			4

Increase in cash and cash equivalents		15,550			17,470

Cash and cash equivalents, beginning of period		23,365			21,375

Cash and cash equivalents, end of period	$	38,915		$	38,845

UNITEDHEALTH GROUP
SUPPLEMENTAL FINANCIAL INFORMATION - BUSINESSES
(in millions, except percentages)
(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenues
UnitedHealthcare	$	69,853		$	61,995		$	210,552		$	186,695
Optum		56,737			46,559			167,140			134,900
Eliminations		(34,229	)		(27,660	)		(100,497	)		(80,220	)

Total consolidated revenues	$	92,361		$	80,894		$	277,195		$	241,375

Earnings from Operations
UnitedHealthcare	$	4,592		$	3,799		$	13,293		$	11,447
Optum (a)		3,934			3,663			11,376			10,097

Total consolidated earnings from operations	$	8,526		$	7,462		$	24,669		$	21,544

Operating Margin
UnitedHealthcare		6.6	%		6.1	%		6.3	%		6.1	%
Optum		6.9	%		7.9	%		6.8	%		7.5	%
Consolidated operating margin		9.2	%		9.2	%		8.9	%		8.9	%


Revenues
UnitedHealthcare Employer & Individual - Domestic	$	16,854		$	15,929		$	50,157		$	47,318
UnitedHealthcare Employer & Individual - Global		2,417			2,120			6,905			6,500
UnitedHealthcare Employer & Individual - Total		19,271			18,049			57,062			53,818
UnitedHealthcare Medicare & Retirement		32,022			27,895			97,468			85,620
UnitedHealthcare Community & State		18,560			16,051			56,022			47,257

Optum Health	$	23,864		$	18,463		$	70,785		$	52,728
Optum Insight		4,977			3,693			14,147			10,194
Optum Rx		28,857			25,203			84,921			73,919
Optum Eliminations		(961	)		(800	)		(2,713	)		(1,941	)

(a)

Earnings from operations for Optum for the three and nine months ended September 30, 2023 included $1,568 and $4,869 for Optum Health; $1,109 and $2,984 for Optum Insight; and $1,257 and $3,523 for Optum Rx,repectively. 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, espectively.

UNITEDHEALTH GROUP
SUPPLEMENTAL FINANCIAL INFORMATION - BUSINESS METRICS


UNITEDHEALTHCARE CUSTOMER PROFILE
(in thousands)

People Served	September 30, 2023		June 30, 2023		December 31, 2022		September 30, 2022

Commercial - Domestic:
Risk-based		8,120		8,035		8,045		8,055
Fee-based		19,130		19,140		18,640		18,500

Total Commercial - Domestic		27,250		27,175		26,685		26,555

Medicare Advantage		7,645		7,590		7,105		7,035
Medicaid		8,065		8,355		8,170		8,005
Medicare Supplement (Standardized)		4,345		4,330		4,375		4,370

Total Community and Senior		20,055		20,275		19,650		19,410
Total UnitedHealthcare - Domestic Medical		47,305		47,450		46,335		45,965

Commerical - Global		5,475		5,385		5,360		5,360

Total UnitedHealthcare - Medical		52,780		52,835		51,695		51,325


Supplemental Data

Medicare Part D stand-alone		3,335		3,355		3,295		3,310



OPTUM PERFORMANCE METRICS

	September 30, 2023		June 30, 2023		December 31, 2022		September 30, 2022

Optum Health Consumers Served (in millions)		103		103		102		101
Optum Insight Contract Backlog (in billions)	$	31.6	$	31.4	$	30.0	$	24.1
Optum Rx Quarterly Adjusted Scripts (in millions)		383		381		370		359


Note: UnitedHealth Group served 152 million unique individuals across all businesses at September 30, 2023.

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,
	2023			2022			2023			2022			2023
GAAP net earnings attributable to UnitedHealth Group common shareholders	$	5,841		$	5,262		$	16,926		$	15,359		$22,125 - $22,350
Intangible amortization		392			323			1,178			896		~1,565
Tax effect of intangible amortization		(96	)		(92	)		(292	)		(233	)	~(390)
Adjusted net earnings attributable to UnitedHealth Group common shareholders	$	6,137		$	5,493		$	17,812		$	16,022		$23,300 - $23,525

GAAP diluted earnings per share	$	6.24		$	5.55		$	18.01		$	16.15		$23.60 - $23.75
Intangible amortization per share		0.42			0.34			1.25			0.94		~1.65
Tax effect per share of intangible amortization		(0.10	)		(0.10	)		(0.31	)		(0.24	)	~(0.40)
Adjusted diluted earnings per share	$	6.56		$	5.79		$	18.95		$	16.85		$24.85 - $25.00

ADJUSTED CASH FLOWS FROM OPERATIONS^(a)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
GAAP cash flows from operations	$	6,902		$	18,549		$	34,261		$	30,739
Add: July CMS premium payments received in June		11,808			-			-			-
Less: October CMS premium payments received in September		(11,857	)		(9,763	)		(11,857	)		(9,763	)
Adjusted cash flows from operations	$	6,853		$	8,786		$	22,404		$	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.

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UnitedHealth Group Reports Third Quarter 2023 Results