UNITEDHEALTH GROUP INC Quarterly Report for Q1 Ended Mar 31, 2016

Summary

UnitedHealth Group reported strong financial performance for the first quarter of 2016, with total revenues increasing by a significant 25% year-over-year to $44.5 billion. This growth was primarily driven by the acquisition of Catamaran Corporation and robust organic expansion across both the UnitedHealthcare and Optum segments. Net earnings attributable to common shareholders rose 14% to $1.61 billion, or $1.67 per diluted share, indicating effective operational management and growth strategies. The company demonstrated solid operational execution, with earnings from operations up 12% to $2.96 billion. UnitedHealthcare saw a 10% revenue increase, serving an additional 2 million people domestically, although its operating margin saw a slight decrease. The Optum segment was a key growth driver, with revenues up 54% and operating earnings up 49%, propelled by strong performance across its health delivery, technology, and pharmacy care services businesses, bolstered significantly by the Catamaran acquisition. The company also maintained a strong liquidity position with $2.3 billion in cash flows from operations.

Key Highlights

• 1Consolidated revenues surged 25% to $44.5 billion, driven by acquisitions and organic growth.
• 2Net earnings attributable to common shareholders increased 14% to $1.61 billion, with diluted EPS rising to $1.67.
• 3UnitedHealthcare revenue grew 10%, serving an additional 2 million domestic members.
• 4Optum segment revenue grew 54% to $19.7 billion, with earnings from operations up 49%, reflecting strong contributions from Catamaran acquisition and organic growth.
• 5Cash flows from operating activities remained strong at $2.3 billion.
• 6The company maintained a healthy debt-to-equity ratio of approximately 47%, well within its covenant limits.
• 7UnitedHealth Group is actively managing its portfolio, with reduced participation in individual public exchanges for 2017.

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