UnitedHealth Group Reports First Quarter Performance

Strong, well-diversified business performance contributed to growth across UnitedHealth Group (NYSE: UNH) in the first quarter 2021, even as the Company continued to support consumers, customers and the broader health system in the pandemic response.

“The unique combined capabilities of Optum and UnitedHealthcare and the unwavering commitment of our people continue to help advance the way care is delivered, improving results for those we serve and shareholders,” said Andrew Witty, chief executive officer of UnitedHealth Group.

Based upon initial 2021 business performance trends, the Company increased its full year net earnings outlook to $17.15 to $17.65 per share and adjusted earnings to $18.10 to $18.60 per share. This outlook continues to include approximately $1.80 per share in potential net unfavorable impact to accommodate continuing COVID-19 effects, such as: testing and treatment costs; the residual impact of people having deferred care in 2020; and unemployment and other economy-driven factors. COVID-19 treatment and testing during the quarter was higher than expected, paired with higher elective care deferral patterns. UnitedHealth Group is focused on encouraging and helping people to obtain the care they need, including vaccinations, and expects a continued rise in provision of care as the year progresses. The Company has provided support to ensure continued stability of the health system in response to the pandemic. For more information about UnitedHealth Group’s response to COVID-19, go to https://www.unitedhealthgroup.com/newsroom/addressing-covid.html.

• UnitedHealth Group’s first quarter 2021 revenues of $70.2 billion grew $5.8 billion or 9.0% year-over-year, reflecting broad-based growth across Optum and UnitedHealthcare.

• First quarter 2021 earnings from operations grew $1.7 billion or 34.9% year-over-year to $6.7 billion, with both Optum and UnitedHealthcare contributing to the expansion.

• The first quarter medical care ratio of 80.9% compared to 81.0% in first quarter 2020. Favorable medical reserve development was $1.0 billion in the quarter compared to $850 million in the fourth quarter 2020 and $580 million in the first quarter last year. Days claims payable of 49.8 days compared to 47.8 days in the fourth quarter 2020 and 50.5 days in the first quarter 2020.

• The first quarter 2021 operating cost ratio of 14.6% decreased from 15.5% in first quarter 2020 due to the repeal of the health insurance tax and continued operating efficiency gains, partially offset by business mix, and increased service, growth and innovation investments.

• Cash flows from operations in first quarter 2021 were $6.0 billion, or 1.2 times net income.

• Return on equity of 29.5% in the quarter reflected the Company’s strong overall operating performance and efficient capital structure.

UnitedHealthcare provides health care benefits globally, serving individuals and employers, and Medicare and Medicaid beneficiaries. UnitedHealthcare is dedicated to improving the value consumers receive by reducing the total cost of care, enhancing the quality of care received, improving health and wellness and simplifying the health care experience.

• UnitedHealthcare first quarter revenues of $55.1 billion grew by $4.0 billion or 7.9% compared to last year, led by continued growth in people served by community and senior programs.

• In the first quarter 2021, people served by UnitedHealthcare grew by more than 1 million since the end of 2020.

• First quarter 2021 operating earnings were $4.1 billion compared to $2.9 billion last year, reflecting growth in people served and the absence of an extra calendar day which impacted first quarter 2020.

• Growth highlights include: strong individual Medicare Advantage membership growth during the annual enrollment period, several large new Group MA business wins and growth in people served in Dual Special Needs Plans; a Medicaid contract award in Oklahoma to serve TANF, CHIP and expansion populations across the state; and continued strong growth in specialty products, including dental and vision, and a strong commercial benefits selling season.

Optum is a health services business serving the global health care marketplace, including payers, care providers, employers, governments, life sciences companies and consumers. Using market-leading information, data analytics, technology and clinical insights, Optum helps improve overall health system performance: optimizing care quality, reducing health care costs and improving the consumer experience.

• Optum first quarter revenues grew 10.8% to $36.4 billion and operating earnings grew 24.8% to $2.6 billion.

• OptumHealth revenue per consumer served increased 31% year-over-year during the first quarter 2021, driven by growth in the number of people served in value-based care arrangements and increasing acuity of the care services provided. OptumHealth served 99 million people at the end of first quarter 2021 compared to 96 million people a year ago.

• OptumInsight’s revenue backlog increased by $1.6 billion in the first quarter to $20.8 billion, driven by growth in comprehensive managed services, including revenue management, payment integrity, information technology and data analytics. As previously announced, the OptumInsight and Change Healthcare (NASDAQ: CHNG) combination is expected to close during the second half 2021. This combination will more effectively connect and simplify core clinical, administrative and payment processes, resulting in better health outcomes and experiences for users, at lower cost.

• OptumRx revenues and earnings grew modestly compared to the first quarter of 2020 and adjusted scripts were 329 million compared to 339 million last year. First quarter 2020 included the advance provision of medications to people served in response to COVID-related supply concerns, with script levels then receding with care deferral patterns.

• Growth highlights include: continued expansion of Optum Care’s integrated local care delivery networks, including expanded digital capabilities and strong growth serving seniors across in-home, clinic-based and other ambulatory care settings; OptumInsight new business wins, contract extensions and pipeline growth in comprehensive managed services; strong execution at OptumRx onboarding hundreds of new clients and continued growth and diversification of pharmacy care services, including community-based behavioral health pharmacies, alternate site infusion services, e-commerce, specialty pharmacy, prescription discount cards and multi-dose packaging.

About UnitedHealth Group

UnitedHealth Group (NYSE: UNH) is a diversified health care company dedicated to helping people live healthier lives and helping make the health system work better for everyone. UnitedHealth Group offers a broad spectrum of products and services through two distinct platforms: Optum, which provides information and technology-enabled health services; and UnitedHealthcare, which provides health care coverage and benefits services. For more information, visit UnitedHealth Group at www.unitedhealthgroup.com or follow @UnitedHealthGrp on Twitter.

Earnings Conference Call

As previously announced, UnitedHealth Group will discuss the company’s results, strategy and future outlook on a conference call with investors at 8:45 a.m. Eastern Time today. UnitedHealth Group will host a live webcast of this conference call from the Investor Relations page of the company’s website (www.unitedhealthgroup.com). Following the call, a webcast replay will be available on the same site through April 29, 2021. The conference call replay can also be accessed by dialing 1-855-859-2056, Conference ID: 2769667. This earnings release and the Form 8-K dated April 15, 2021 can also be accessed from the Investor Relations page of the Company’s website.

Non-GAAP Financial Information

This news release presents non-GAAP financial information provided as a complement to the results provided in accordance with accounting principles generally accepted in the United States of America (“GAAP”). A reconciliation of the non-GAAP financial information to the most directly comparable GAAP financial measure is provided in the accompanying tables found at the end of this release.

Forward-Looking Statements

The statements, estimates, projections, guidance or outlook contained in this document include “forward-looking” statements which are intended to take advantage of the “safe harbor” provisions of the federal securities law. The words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “forecast,” “outlook,” “plan,” “project,” “should” and similar expressions identify forward-looking statements. These statements may contain information about financial prospects, economic conditions and trends and involve risks and uncertainties. Actual results could differ materially from those that management expects, depending on the outcome of certain factors including: risks associated with public health crises, large-scale medical emergencies and pandemics, such as the COVID-19 pandemic; our ability to effectively estimate, price for and manage medical costs; new or changes in existing health care laws or regulations, or their enforcement or application; the DOJ’s legal action relating to the risk adjustment submission matter; our ability to maintain and achieve improvement in quality scores impacting revenue; reductions in revenue or delays to cash flows received under government programs; changes in Medicare, the CMS star ratings program or the application of risk adjustment data validation audits; failure to maintain effective and efficient information systems or if our technology products do not operate as intended; cyberattacks, other privacy/data security incidents, or our failure to comply with related regulations; risks and uncertainties associated with the pharmacy benefits management industry; competitive pressures; changes in or challenges to our public sector contract awards; our ability to contract on competitive terms with physicians, hospitals and other service providers; failure to attract, develop, retain, and manage the succession of key employees and executives; the impact of potential changes in tax laws and regulations (including any increase in the U.S. income tax rate applicable to corporations); failure to achieve targeted operating cost productivity improvements; increases in costs and other liabilities associated with litigation, government investigations, audits or reviews; failure to manage successfully our strategic alliances or complete or receive anticipated benefits of strategic transactions; fluctuations in foreign currency exchange rates; downgrades in our credit ratings; our investment portfolio performance; impairment of our goodwill and intangible assets; and our ability to obtain sufficient funds from our regulated subsidiaries or from external financings to fund our obligations, maintain our debt to total capital ratio at targeted levels, maintain our quarterly dividend payment cycle, or continue repurchasing shares of our common stock. This above list is not exhaustive. We discuss these matters, and certain risks that may affect our business operations, financial condition and results of operations more fully in our filings with the SEC, including our reports on Forms 10-K, 10-Q and 8-K. By their nature, forward-looking statements are not guarantees of future performance or results and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Actual results may vary materially from expectations expressed or implied in this document or any of our prior communications. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We do not undertake to update or revise any forward-looking statements, except as required by law.

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