UnitedHealth(UNH) - 2023 Q3 - Quarterly Report

Revenue Growth - Consolidated revenues grew 14% to $92.361 billion, with UnitedHealthcare revenues growing 13% and Optum revenues growing 22%[59] - UnitedHealthcare's revenues increased by 13% to $69.853 billion in Q3 2023 compared to $61.995 billion in Q3 2022, driven by growth in Medicare Advantage and commercial offerings[68][69] - Optum Health revenues grew 29% to $23.864 billion in Q3 2023, serving 103 million people, up from 101 million in Q3 2022, primarily due to value-based care arrangements[68][72] - Optum Rx fulfilled 383 million adjusted scripts in Q3 2023, up from 359 million in Q3 2022, contributing to a 14% revenue increase to $28.857 billion[68][74] - UnitedHealthcare's Medicare & Retirement segment revenues grew 15% to $32.022 billion in Q3 2023, driven by increased enrollment in Medicare Advantage plans[69] - UnitedHealthcare's Community & State segment revenues increased 16% to $18.560 billion in Q3 2023, reflecting growth in Medicaid enrollment[69] - Optum Insight revenues rose 35% to $4.977 billion in Q3 2023, driven by growth in business and technology services[68][73] Earnings and Profitability - Consolidated earnings from operations increased to $8.5 billion, up from $7.5 billion last year, with UnitedHealthcare growing 21% and Optum growing 7%[59] - Diluted earnings per common share were $6.24, up from $5.55 last year[59] - Consolidated operating earnings increased 14% to $8.526 billion in Q3 2023, with UnitedHealthcare contributing $4.592 billion, up 21% year-over-year[68] - Return on equity was 28.0%, slightly down from 28.5% last year[59] Medical Costs and Ratios - Medical costs increased by 13% to $59.550 billion, primarily due to growth in people served through Medicare Advantage and Medicaid[61][64] - The medical care ratio (MCR) increased to 82.3%, up from 81.6% last year, driven by elevated care activity and business mix[61][64] - Operating cost ratio increased to 15.0%, up from 14.4%, due to business mix and investments to support future growth[61][65] Enrollment and Membership - UnitedHealthcare served 1.5 million more people, driven by growth across each of the company's businesses[59] - UnitedHealthcare's domestic medical enrollment grew 3% to 47.305 million in Q3 2023, with Medicare Advantage enrollment increasing 9% to 7.645 million[70] Cash Flow and Financial Position - Cash flows from operations for the nine months ended September 30, 2023, were $34.3 billion[59] - Cash provided by operating activities increased to $34.261 billion in the first nine months of 2023, up from $30.739 billion in the same period of 2022[77] - Operating cash flows increased primarily due to higher net earnings and the receipt of $11.9 billion in October 2023 CMS premium payment, compared to $9.8 billion in September 2022[78] - As of September 30, 2023, the company held $87.5 billion in cash, cash equivalents, and securities, including $38.9 billion in cash and cash equivalents and $44.4 billion in debt securities[79] - The company's debt to debt-plus-shareholders' equity ratio was approximately 38% as of September 30, 2023, well below the 60% covenant limit[81] Share Repurchases and Dividends - The company repurchased $6.5 billion of common stock in the first nine months of 2023, compared to $6.0 billion in the same period of 2022[77] - In the nine months ended September 30, 2023, the company repurchased 13 million shares at an average price of $485.10 per share, with authorization to purchase up to 18 million shares remaining[82] - The company increased its quarterly cash dividend to an annual rate of $7.52 per share in June 2023, up from $6.60 per share[82] Investments and Acquisitions - Investment and other income increased by 94% to $997 million, driven by increased interest rates[61][63] - The company has pending acquisitions in the healthcare sector with a total anticipated consideration of approximately $5 billion, subject to regulatory approval[82] - A 1% increase in market interest rates would decrease the fair value of the company's financial assets by $1.758 billion and liabilities by $3.846 billion, while a 1% decrease would increase asset values by $1.858 billion and liabilities by $4.635 billion[87] - The company's available-for-sale debt securities portfolio had a weighted-average duration of 3.8 years and a weighted-average credit rating of "Double A" as of September 30, 2023[79] Credit Ratings and Controls - The company maintains strong credit ratings, with senior unsecured debt rated A2 by Moody's, A+ by S&P, and A by Fitch, all with stable outlooks[82] - The company's disclosure controls and procedures were deemed effective at the reasonable assurance level as of September 30, 2023[89]