01—Abstract
Summary
Summary of the 10-K/A filed February 18, 2009. Cited figures are marked; the original filing is the authoritative source.
UnitedHealth Group Inc. (UNH) filed this 10-K/A amendment primarily to correct a typographical error regarding 2008 Medicare Part D revenue, revising it from $4.6 billion to $5.8 billiona.
The overall financial performance presented in the filing shows a mixed picture for the year ended December 31, 2008. While total revenues grew to $81.2 billionb, up from $75.4 billion in 2007, net earnings saw a significant decline to $3.0 billion from $4.7 billion in the prior year. This decrease in profitability, coupled with a substantial increase in investing activities, potentially reflecting strategic acquisitions, warrants investor attention.
The company's balance sheet shows growth in total assets to $55.8 billionc, an increase from $50.9 billion in 2007, and a rise in total debt. Despite the increased leverage, the Debt-to-Total-Capital ratio remains manageable. Investors should monitor the impact of recent acquisitions, such as Sierra Health Services and Fiserv Health, on future earnings and operational integration, especially in the context of the overall economic environment of 2008.
02—Key points
Key Highlights
- Total revenues for 2008 reached $81.2 billion, an increase from $75.4 billion in 2007, indicating continued top-line growth.
- Net earnings decreased to $3.0 billion in 2008, down from $4.7 billion in 2007, suggesting potential margin pressures or integration costs.
- The company made significant acquisitions in 2008, including Sierra Health Services for approximately $2.6 billion, indicating a strategy of growth through consolidation.
- Investing activities significantly increased to $(5.1) billion in 2008 from $(4.1) billion in 2007, primarily driven by these acquisitions.
- The Debt-to-Total-Capital ratio increased to 38.1% in 2008 from 35.4% in 2007, reflecting the impact of acquisitions and increased debt financing.
- Medicare Part D revenue for 2008 was corrected to $5.8 billion, a key clarification for investors tracking this segment's contribution.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2008, UnitedHealth Group Inc kept $0.04.
- Revenue$81.19B100.0%
- Cost of revenue−$1.48B1.8%
- Gross profit$79.71B98.2%
- Operating costs−$74.44B91.7%
- Operating income$5.26B6.5%
- Interest, other & tax−$2.29B2.8%
- Net income$2.98B3.7%
Where FY2008 revenue went
$81.19B- Other operating costs: $61.34B, 76% of revenue
- SG&A: $13.10B, 16% of revenue
- Net income: $2.98B, 3.7% of revenue
- Cost of revenue: $1.48B, 1.8% of revenue
- Interest, other & tax: $2.29B, 2.8% of revenue
Kept 3.7% as net incomeNet income $2.98B · 3.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2008filed February 18, 2009Financial Statements
FY2008 against FY2007
| Line item | FY2008FY2007 | Change |
|---|---|---|
| Revenue | $81.19B$75.43B | +7.6% |
| Cost of Revenue | $1.48B$768.00M | +92.7% |
| Gross Profit | $79.71B$74.66B | +6.8% |
| SG&A Expenses | $13.10B$10.58B | +23.8% |
| Operating Expenses | $75.92B$67.58B | +12.3% |
| Operating Income | $5.26B$7.85B | −32.9% |
| Interest Expense | $639.00M$544.00M | +17.5% |
| Net Income | $2.98B$4.65B | −36.0% |
| EPS (Basic) | $2.45$3.55 | −31.0% |
| EPS (Diluted) | $2.40$3.42 | −29.8% |
| Shares Outstanding (Basic) | 1.21B1.31B | −7.5% |
| Shares Outstanding (Diluted) | 1.24B1.36B | −8.8% |
05—Questions
Frequently Asked Questions
What was the main reason for filing this amended 10-K report?
The primary reason for this Amendment No. 1 on Form 10-K/A was to correct a typographical error in the original filing. The reported revenue for the Medicare Part D drug insurance coverage program in 2008 was corrected from $4.6 billion to $5.8 billion.
How did UnitedHealth Group's revenue and net earnings perform in 2008 compared to 2007?
In 2008, UnitedHealth Group reported total revenues of $81.2 billion, an increase from $75.4 billion in 2007. However, net earnings decreased significantly to $3.0 billion in 2008, down from $4.7 billion in 2007.
What were the major acquisitions made by UnitedHealth Group in 2008, and how did they impact the financials?
In 2008, UnitedHealth Group completed several significant acquisitions, including Sierra Health Services, Inc. (approximately $2.6 billion), Fiserv Health, Inc. (approximately $740 million), and Unison Health Plans (approximately $930 million). These acquisitions contributed to an increase in total assets and investing activities, and likely influenced the rise in debt and the Debt-to-Total-Capital ratio.
How has the company's debt level changed, and what is the current debt-to-capital ratio?
The total commercial paper and long-term debt increased to $12.8 billion in 2008 from $11.0 billion in 2007. Consequently, the Debt-to-Total-Capital ratio rose to 38.1% in 2008 from 35.4% in 2007, indicating increased leverage.
06—Continue