Cash Flow and Balance Sheet

As reported by the company, cash flow from operations was $2.9 billion in 3Q10, compared with $2.7 million in 3Q09. UnitedHealth had $1.0 billion in cash available at the end of 3Q10 (versus $2.3 billion on December 31, 2009). Management expects cash flows from operations to be more than $5 billion (versus $5 billion) for FY10.

The company used $1.9 billion in cash during 3Q10 to fund acquisitions in the Health Services market, principally in the areas of clinical workflow and compliance and health system connectivity.

The debt to debt-plus-equity ratio decreased to 30.1% as of September 30, 2010, from 32.8% as of September 30, 2009, thereby further strengthening the company’s financial flexibility.

There were 8 days sales outstanding in accounts receivable at the end of 3Q10, flat on a y/y basis.

Dividend and Share Repurchases

The company repurchased about 20.0 million shares during 3Q10.

On September 28, 2010, UnitedHealth Group paid a dividend of $0.125 per share to shareholders at the close of September 14, 2010.
 

• Uneven and jobless economic recovery might result in the loss of more profitable commercial enrollment.

• Continued low interest rates affect earnings contribution from cash and investments.

• Increased medical and operating cost pressures related to the Affordable Care Act and Mental Health Parity Act, and expenses to prepare for compliance with the federally mandated ICD-10 coding and HIPAA 5010 standards.

• An uncertain view of the states' Medicaid rate environment given the pressures on state budgets.

• A comparatively modest net decrease in federal Medicare rates than in 2010.