01—Abstract
Summary
Summary of the 10-K filed February 9, 2012. Cited figures are marked; the original filing is the authoritative source.
UnitedHealth Group's 2011 10-K report highlights a year of substantial revenue growth, reaching $101.9 billiona, an 8% increase over 2010, driven by strong performance in both its UnitedHealthcare and Optum segments.
The company reported net earnings of $5.14 billionb, a 11% increase year-over-year, with diluted earnings per share of $4.73. This growth was supported by an increase in UnitedHealthcare's membership by 1.6 million individuals and a significant 21% revenue increase from the Optum health services business. The company's strategic focus on affordability, consumer empowerment, and integrated health services continues to drive results.
Despite rising medical costs, which increased by 8% and were influenced by hospital price increases, UnitedHealth Group managed its medical care ratio effectively, maintaining it at 80.8%. The company also demonstrated strong operational cash flow, increasing by 11% to $7 billionc.
Key financial indicators such as return on equity (18.9%d) and a strengthened debt-to-debt-plus-equity ratio (29.1%) indicate a healthy financial position. The report also underscores the company's active share repurchase program and a consistent increase in shareholder dividends.
02—Key points
Key Highlights
- Total revenues grew 8% to $101.9 billion in 2011, driven by strong performance in both UnitedHealthcare and Optum segments.
- Net earnings increased by 11% to $5.14 billion, with diluted earnings per share rising by 15% to $4.73.
- UnitedHealthcare membership grew by 1.6 million individuals, reflecting continued expansion in health benefits.
- Optum segment revenues surged by 21%, indicating strong growth in health services and technology solutions.
- The company managed its medical costs effectively, with a medical care ratio of 80.8%, despite increasing healthcare service costs.
- Operating cash flow saw an 11% increase, reaching $7 billion, demonstrating robust cash generation.
- Shareholder returns were enhanced through a 65 million share repurchase program and an increased quarterly dividend.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, UnitedHealth Group Inc kept $0.05.
- Revenue$101.86B100.0%
- Cost of revenue−$2.38B2.3%
- Gross profit$99.48B97.7%
- Operating costs−$91.01B89.3%
- Operating income$8.46B8.3%
- Interest, other & tax−$3.32B3.3%
- Net income$5.14B5.0%
Where FY2011 revenue went
$101.86B- Other operating costs: $75.46B, 74% of revenue
- SG&A: $15.56B, 15% of revenue
- Net income: $5.14B, 5.0% of revenue
- Cost of revenue: $2.38B, 2.3% of revenue
- Interest, other & tax: $3.32B, 3.3% of revenue
Kept 5.0% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 9, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $101.86B$94.16B | +8.2% |
| Cost of Revenue | $2.38B$2.12B | +12.7% |
| Gross Profit | $99.48B$92.04B | +8.1% |
| SG&A Expenses | $15.56B$14.27B | +9.0% |
| Operating Expenses | $93.40B$86.29B | +8.2% |
| Operating Income | $8.46B$7.86B | +7.6% |
| Interest Expense | $505.00M$481.00M | +5.0% |
| Net Income | $5.14B$4.63B | +11.0% |
| EPS (Basic) | $4.81$4.14 | +16.2% |
| EPS (Diluted) | $4.73$4.10 | +15.4% |
| Shares Outstanding (Basic) | 1.07B1.12B | −4.5% |
| Shares Outstanding (Diluted) | 1.09B1.13B | −3.9% |
05—Questions
Frequently Asked Questions
What was UnitedHealth Group's revenue and net earnings performance in 2011?
In 2011, UnitedHealth Group reported total revenues of $101.9 billion, an 8% increase from 2010. Net earnings were $5.14 billion, up 11% from the previous year, with diluted earnings per share reaching $4.73, a 15% increase.
How did the UnitedHealthcare and Optum segments perform?
The UnitedHealthcare segment saw its revenue grow by 7% to $95.3 billion, supported by a 1.6 million increase in membership. The Optum health services segment experienced significant growth, with revenues increasing by 21% to $28.7 billion, highlighting its expanding role in the company's overall business.
What is the company's outlook on medical costs and its impact?
UnitedHealth Group expects medical costs to continue to be driven by increasing unit costs, particularly hospital prices. However, the company aims to manage these costs through care management programs, provider negotiations, and cost-shifting to consumers. The medical care ratio remained stable at 80.8% in 2011.
How is the company managing its capital and returning value to shareholders?
UnitedHealth Group maintained a strong financial position, with its debt-to-debt-plus-equity ratio decreasing to 29.1%. The company actively repurchased 65 million shares of its common stock for $3.0 billion and increased its quarterly dividend rate to $0.1625 per share, demonstrating a commitment to enhancing shareholder value.
06—Continue