UnitedHealth Group Reports Third Quarter 2023 Results

• 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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"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.

• 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.

• 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.

• 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.

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