UnitedHealth Group Incorporated (NYSE:UNH) Q4 2019 Earnings Conference Call - Final Transcript
Jan 15, 2020 • 08:45 am ET
return metrics remain strong, with return on equity of almost 26%. We ended the year with a debt to capital ratio of around 40%, even with over $10 billion of deployment for business combinations and capex, $5.5 billion in share repurchases and a 20% dividend increase.
Medical reserves developed favorably in the fourth quarter by $270 million, including $150 million from 2019. Overall, medical costs were well managed, resulting in an 82.5% medical care ratio for full year 2019. We continue to be highly attentive to operating costs as part of our overall affordability agenda. In 2019, our operating cost ratio of 14.5% improved 50 basis points, reflecting 60 basis points of operating cost productivity and the deferral of the health insurance tax, partially offset by the effect of business mix changes and continued investments in innovation, service, and growth.
We enter 2020 with diversified growth momentum, balance sheet strength and financial flexibility. On earnings progression, we continue to expect 47% to 48% of full year earnings per share to be realized in the first half of the year. A point to keep in mind on the quarterly progression, 2019 first quarter has one fewer workday than 2018, resulting in a higher earnings level. This year the first quarter has a more normal mix, but then adds an extra day due to leap year. Taken together, the day count shifting has a year-over-year impact on the medical care ratio of about 80 basis points, this will result in the first quarter 2020 MCR running higher than the second quarter and earnings per share progressing accordingly, with just under 55% of the first half earnings expected to be realized in the second [Phonetic] quarter. These impacts of course were fully contemplated in the 2020 outlook we provided at the beginning of December.
For full year 2020, we continue to expect revenues to approach $262 billion and adjusted net earnings per share in a range of $16.25 to $16.55. Consistent with our prior practices, we will more formally address these and other expectations after the first quarter.
With that, I'll turn it back to Dave.
David S. Wichmann
Thank you, John. As you can tell, we are confident in the outlook for our diversified and growing enterprise for 2020 and beyond. Our businesses remain strong and well positioned for continued balanced growth by delivering even higher levels of societal value. We remain committed to our mission and an intense focus on serving one person at a time at increasing levels of value, more affordable, better outcomes, and improved experiences while generating strong returns for you, our shareholders.
Operator, let's open it up for questions. One per caller, please.