UnitedHealth Group Reports Second Quarter 2021 Results

• Revenues of $71.3 Billion Grew 15%, with Well-Diversified Growth at Optum and UnitedHealthcare
• Earnings from Operations were $6.0 Billion
• Cash Flows from Operations reached $5.5 Billion or 1.3x Net Income
• Net Earnings were $4.46 Per Share and Adjusted Earnings were $4.70 Per Share

Strong and diversified growth continued across UnitedHealth Group (NYSE: UNH) in the second quarter 2021.

“The compassion, dedication and ongoing efforts of our 330,000 colleagues to advance peoples’ health and health system performance reinforces our confidence in delivering strongly on our strategies for those we serve and continuing to grow well into the future,” said Andrew Witty, chief executive officer of UnitedHealth Group.

Based upon first half 2021 performance, the Company increased its full year net earnings outlook to $17.35 to $17.85 per share and adjusted earnings to $18.30 to $18.80 per share. The outlook continues to include approximately $1.80 per share in potential net unfavorable COVID-19 effects. UnitedHealth Group is focused on helping people access the care they need, including vaccinations, and expects a continued rise in provision of care in the second half of this year. COVID-19 effects include testing and treatment costs; the residual impact of people having deferred care in 2020; and unemployment and other economy-driven factors.

• UnitedHealth Group’s second quarter 2021 revenues of $71.3 billion grew 14.8% year-over-year, reflecting well-diversified growth across the enterprise, including double-digit percentage growth at both Optum and UnitedHealthcare.

• Earnings from operations in the second quarter 2021 were $6.0 billion and adjusted earnings were $4.70 per share, with the year-over-year comparisons reflecting the broad-based deferral of care during the second quarter 2020 due to the pandemic.

• Cash flows from operations in second quarter 2021 were $5.5 billion, or 1.3 times net income.

• The second quarter 2021 medical care ratio of 82.8% compared to 70.2% last year, with the variance due to second quarter 2020 COVID-19 effects. Favorable medical reserve development was $500 million in the quarter compared to $1.0 billion in the first quarter 2021 and $1.4 billion in the second quarter last year. Days claims payable of 49.1 days compared to 49.8 days in the first quarter 2021 and 50.4 days in the second quarter 2020.

• The second quarter 2021 operating cost ratio of 14.5% decreased from 16.1% in second quarter 2020. Factors contributing to the decline include the repeal of the health insurance tax, broad-based 2020 investments to support people and health systems, the revenue-related effects of the pandemic, and continued productivity advances, partially offset by business mix and investments.

• The Company returned $1.4 billion to shareholders in the second quarter via dividends, following a 16% increase in June 2021. In the quarter, 3.2 million shares were repurchased for $1.2 billion, bringing year-to-date repurchases to 7.9 million shares for $2.9 billion.

• Return on equity of 25.2% in the quarter reflected the Company’s strong and diverse earnings profile and efficient capital base. Debt to total capital was 40.1% at quarter end.

UnitedHealthcare provides health care benefits globally, serving individuals and employers, and Medicare and Medicaid beneficiaries. UnitedHealthcare is dedicated to improving the value customers and 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 second quarter 2021 revenues grew by $6.4 billion or 13.0% to $55.5 billion compared to last year.

• Strong growth in UnitedHealthcare’s community and senior offerings resulted from expansion in people served. Since the end of 2020, total people served by UnitedHealthcare grew by nearly 1.2 million, including 150,000 in the second quarter 2021.

• Second quarter 2021 operating earnings were $3.1 billion compared to $7.0 billion last year, reflecting strong revenue growth, more than offset by pandemic driven deferral of care last year.

• Growth highlights include: continued strong membership growth during the first half this year in individual Medicare Advantage, Group Medicare Advantage and Dual Special Needs Plans; Medicaid contract awards in Hawaii and Ohio, as well as a strong pipeline of potential new and renewing awards during the remainder of 2021; and further expansion of innovative commercial benefit products and capabilities such as our care provider-aligned and consumer-centric products, and continued outlook for strong specialty benefits growth.

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 second quarter revenues of $38.3 billion grew 17.2% and operating earnings of $2.9 billion grew 29.1%, with each of the three Optum businesses contributing double-digit operating earnings growth.

• OptumHealth served 99 million people at the end of second quarter 2021 compared to 97 million a year ago, and revenue per consumer served increased 43% year-over-year. This continues the expansion of people served in value-based care arrangements, growth in affiliated physicians and build-out of local market care delivery services including in-home, clinic-based and outpatient services, all on a multi-payer basis.

• OptumInsight’s revenue backlog increased by $1.9 billion or 10% compared to the second quarter 2020 to $21.3 billion, driven by growth in comprehensive managed services. OptumInsight continues to advance initiatives to help health systems scale essential capabilities through the deployment of advanced technology, innovative talent and labor models and progressive approaches to productivity enhancements. This includes a significant new client relationship with Bassett Healthcare Network to help them improve clinical and operational performance.

• OptumRx adjusted scripts in the quarter were 342 million, growth of 8% compared to last year and 4% from the first quarter 2021, as the provision of care has continued to recover over the last year.

• Growth highlights include: continued expansion of Optum Care’s integrated care delivery networks and growth serving people in their homes; OptumInsight new business wins and continued pipeline expansion in comprehensive managed services, including revenue management, information technology, data analytics and payment integrity; and OptumRx’s continued diversification and growth of pharmacy care services, highlighted by specialty pharmacy, infusion services, community-based behavioral health pharmacies and e-commerce.

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 July 29, 2021. The conference call replay can also be accessed by dialing 1-888-203-1112, Conference Code: 6765563. This earnings release and the Form 8-K dated July 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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